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06-11-13 Searchable Packet Table of Contents Agenda2 Public Hearing to Consider the Recommended Budget for Fiscal Year 2013-2014 and the adoption of the Recommended Budget and Establishment of the Appropriation Limit, and Related Actions Staff Report5 A - Budget Resolution Apple17 B - Budget Resolution Operating and Capital20 C- Budget Resolution Ops and Capital23 D - Budget Study Session Follow Up24 E - Negative Dec48 1 AGENDA CUPERTINO CITY COUNCIL ~ SPECIAL MEETING 10300 Torre Avenue, City Hall Conference Room A 10350 Torre Avenue, Community Hall Council Chamber Tuesday, June 11, 2013 5:05 PM CITY COUNCIL MEETING ROLL CALL 5:05 PM, City Hall Conference Room A CLOSED SESSION 1.Subject: Conference with Labor Negotiator (Government Code 54957.6); Agen designated negotiators: Director of Administrative Services, Cit Dania Torres Wong; Employee organizations: Operating Engineers L Union; Cupertino Employees' Association; Unrepresented (Management an Confidential) Employees' Compensation Program; Appointed Employe Compensation Program PLEDGE OF ALLEGIANCE 6:45 PM, Community Hall Council Chamber ROLL CALL CEREMONIAL MATTERS AND PRESENTATIONS - None POSTPONEMENTS ORAL COMMUNICATIONS This portion of the meeting is reserved for persons wishing to a any matter not on the agenda. Speakers are limited to three (3) State law will prohibit the council from making any decisions with respect not listed on the agenda. 2 Tuesday, June 11, 2013Cupertino City Council CONSENT CALENDAR Unless there are separate discussions and/or actions requested b member of the public, it is requested that items under the Consent Calendar be acted on simultaneously. SECOND READING OF ORDINANCES - None PUBLIC HEARINGS 2.Subject: Public Hearing to Consider the Recommended Budget for Fiscal Yea- 2014 and the adoption of the Recommended Budget and Establishment of the Appropriation Limit, and Related Actions Recommended Action: a. Adopt Resolution No. 13-051 establishing a special project budget for the Planning and Community Development Current Planning Program for costs related to Pass Thru Revenues for Fiscal Year 2013-14 b. Adopt Resolution No. 13-052 establishing an Operating Budget and Capital Budget for Fiscal Year 2013-14 c. Adopt Resolution No. 13-053 establishing an AppropriationLimit for Fiscal Year 2013-14 d. Take action on items listed in the Follow-up Items for Council Action section of this report and direct staff to make the appropriate adjustments 2013-14 Recommended Budget and Resolutions i. $50,000 for the water testing of Stevens Creek Reservoir ii. $9,000,000 for parking structure near library field iii. $2,000,000 for accelerated pavement repairs iv. $19,000 for the purchase and replacement of new smaller tree badges v. $75,000 to expand the stage in the Cupertino room at the Quinlan Center vi. $20,000 reduction in unrequested Community Funding dollars vii. $3,500 in ongoing Wifi related costs viii. $15,000 in one-time costs related to a Wifi study ix. $125,000 reduction for the deletion of the Civic Center Distribu System Capital Improvement Plan; e.Adopt negative declaration EA-2013-01 for the Capital Improvement Plan(CIP) projects described in the FY 2-14 Recommended Budget Staff Report A - Budget Resolution Apple B - Budget Resolution Operating and Capital 3 Tuesday, June 11, 2013Cupertino City Council C-Budget Resolution Ops and Capital D - Budget Study Session Follow Up E - Negative Dec ORDINANCESAND ACTION ITEMS REPORTS BY COUNCIL AND STAFF ADJOURNMENT 4 CITY MANAGERS OFFICE CITY HALL 10 10UPERTINO, CA 95014-3255 TELEPHONE: (408) 777-3212 www.cupertino.org CITY COUNCIL STAFF REPORT Meeting: June 11, 2013 Subject Public Hearing to Consider the RecommendedBudget for Fiscal Year 2013-2014 and the adoption of the Recommended Budget and Establishment of the Appropriation Limit, and Related Actions. Recommended Action a.Adopt Resolution No. 13- establishing a special project budget for the Planning and Community Development Current Planning Program for costs related to Pass Thru Revenues for Fiscal Year 2013-14 b.Adopt Resolution No. 13- establishing an Operating Budget and Capital Budget for Fiscal Year 2013-14 c.Adopt Resolution No. 13- establishing an Appropriation Limit for Fiscal Year 2013-14 d.Take action on items listed in the Follow Up Items for Council Action section of this report and direct staff to make the appropriate adjustments 2013-14 Recommended Budget and Resolutions i.$50,000 for the water testing of Stevens Creek Reservoir ii.$9,000,000 for parking structure near library field iii.$2,000,000 for accelerated pavement repairs iv.$19,000 for the purchase and replacement of new smaller tree badges v.$75,000 to expand the stage in the Cupertino room at the Quinlan Center vi. $20,000 reduction in unrequested Community Funding dollars vii.$3,500 in ongoing Wifi related costs viii.$15,000 in one time costs related to a Wifi study ix.$125,000 reduction for the deletion of the Civic Center Distributive Antenna System Capital Improvement Plan e.Adopt negative declaration EA-2013-01 for the Capital Improvement Plan(CIP) projects described in the FY 2013-14 Recommended Budget 1 5 Description The California Government Code requires a Public Hearing be heldprior to the adoption of the Citys budget. The purpose of the public hearing opportunity for residents to voice their opinions on the Citys appropriations limit. In prior years the budget hearing and adopeld in separate meetings. California Government Code permits the budget hearing and adoption of budget to take place in the same meeting. Staff is recommending Council do both at the same meeting for FY 2013-14. Council will first hold the public hearing then after the public hearing is closed,move to consider budget adoption. In addition, Article XIIIB of the California Constitution established appropr government agencies within California. Originally established by the appropriations limit places a maximum limit on the appropriat that can be made by the state, school districts, and local gover Fiscal Impact The recommended Budget for FY 2013-14 reflects a total City budget of $86,155,772, a decrease of $6,390,445 or 6.3% when compared to the FY 2012-13 Amended Budget. The recommendedbudget is summarized by fund and source of funding in the following table and pie chart: Fund Type Total Recommended Total Fund Balance & General Fund Expenditures Recommended One Time Contribution Department Funding Revenue Required General $ 57,505,270 $ 8,533,660 $ 5,316,610 $ 43,655,000 Special 7,160,496 5,557,000 (3,308) 1,606,804 Revenue Debt Service 3,171,838 - 92,838 3,079,000 Capital 3,402,000 289,000 (3,920,000) 7,033,000 Projects Enterprise 8,186,721 6,909,000 893,721 384,000 Internal 6,729,447 3,861,139 485,308 2,383,000 Service Total $ 86,155,772 $ 25,149,799 $ 2,865,169 $ 58,140,804 2 6 FY 2013-14 Recommended Budget by Fund $86,155,772 Internal Service Enterprise$6,729,447 $8,186,721 7.8% 9.5% Capital $3,402,000 3.9% Debt General $3,171,838 $57,505,270 3.7% 66.8% Special $7,160,496 8.3% General Fund The General Fund is used to pay for core services such as public recreation, planning and community development, streets and trees, and a host vital services. The revenue used to pay for these services comes taxes such as property tax and sales tax, franchise fees, charge variety of other discretionary sources. As illustrated in the following chart, the majority of the General Fund supports costs for non-departmental (transfers out to other funds),public works and law enforcement. 3 7 FY 2013-14 Recommended General Fund Budget by Department $57,505,270 Councils and CommissionAdministration 3,399,328 794,555 5.9% 1.4% Law Enforcement 9,992,234 Non Departmental 17.4% 15,741,804 27.4% Public Affairs 809,913 1.4% Administrative Services 2,806,574 4.9% Public Works 12,947,194 22.5% Parks and Recreation Community Development 4,040,129 6,973,539 7.0% 12.1% The Citys total budget is anticipated to decreasein comparisonto the FY 2012-13 Amended Budget but the Citys General Fund expenditures are recommended at $57,505,270, an increase of $8,148,747 or 16.5% from the Fiscal Year 20-13 Amended Budget. This increase is primarily attributed to several one-time special and capital projects costs. TheGeneral Fund is balanced through the use of General Fund revenue of $52,188,660 and $5,316,610 in unassigned fundbalance. General FundRevenue The FY 2013-14 RecommendedBudget forecasts general fund revenue of $52,188,660. This is an increase of $1,535,660 or 3% whencompared tothe FY 2012-13 Amended Budget. The following chart represents the total general fund revenue: 4 8 GENERAL FUND REVENUE SUMMARY FY 2011-12FY 2012-13 FY 2012-13 FY 2013-14 Percent 1 REVENUESActualsAmended Estimate Recommended Change Sales Tax 17,326,460 16,492,000 17,602,000 16,215,000 -1.7% Property Tax 11,915,066 14,762,000 14,433,000 13,138,000 -11.0% Transient Occupancy 3,112,934 3,252,000 3,697,000 4,400,000 35.3% Utility Tax 3,264,896 3,359,000 3,143,000 3,253,000 -3.2% Franchise Fees 2,808,136 2,845,000 2,837,000 2,905,000 2.1% Other Taxes1,336,712 1,558,000 1,634,000 2,700,000 73.3% Licenses & Permits 2,900,936 4,346,000 3,250,000 3,480,000 -19.9% Use of Money & Property 647,858 875,000 650,000 660,000 -24.6% Intergovernmental 413,146 315,000 426,000 265,000 -15.9% Charges for Services 2,880,399 2,099,000 3,800,000 4,514,660 115.1% Fines & Forfeitures 661,899 650,000 629,000 620,000 -4.6% Miscellaneous/Non-Op 294,744 100,000 157,000 38,000 -62.0% TOTAL REVENUE 47,563,186 50,653,000 52,258,000 52,188,660 3.0% General Fund Fund Balance The General Fund unassigned fund balance is projected to decrease from the curr year estimate of $14.0 million to $4.4 million in FY 2013-14. This is primarily attributed to the use of unassigned fund balance of $5.3 million for one-time special and capital projects in the FY 2013-14 Recommended Budget and the addition of new reserves as listed in the table below in the recommended changes column: ActualAmendedProjectedRecommendedRecommended CLASSIFICATION2011-122012-132012-2013Changes2013-14 Other Classifications 1,699,003 1,699,003 1,699,003 - 1,699,003 Assigned Economic Uncertainty I 12,500,000 12,500,000 12,500,000 - 12,500,000 Economic Uncertainty II 1,400,000 1,400,000 1,400,000 - 1,400,000 Economic Fluctuation 2,000,000 2,000,000 2,000,000 - 2,000,000 PERS 500,000 500,000 500,000 - 500,000 One Time Revenue 1,329,297 - - - - Equipment Fund Loan for 1A 504,497 - - - - Reserve for Encumbrances 172,659 172,659 - 172,659 Revenue Liability - - - 3,920,000 3,920,000 General Building 357,449 357,449 Total Assigned 18,406,453 16,400,000 16,572,659 4,277,449 20,850,108 Unassigned 6,496,719 2,666,432 14,010,513 - 4,416,454 TOTAL ENDING FUND BALANCE 26,602,175 20,765,435 32,282,175 4,277,449 26,965,565 Reflects percent change from the FY 2012-13 Amended Budget. 1 5 9 Special Revenue Funds Special Revenue Funds are a fund type used to account for the pr revenue sources that are legally restricted to expenditures for specific purp Revenue Funds account for 8.3% of the City-wide expenditure budget. The largest Special Revenue Fund is the Transportation fund. Other funds account for Storm Drain and Affordable Housing programs. The Recommended Budget for Special Revenue Funds for FY 2013-14 is $7.1 million. Budgets within the Special Revenue Funds are funded by $5.6 million in department revenue and $1.6 million in transfers from the General Fund resulting in an increase to fund balance of $0.1million. The Special Revenue Funds began the fiscal year with a cumulative $2.2 million in fund balances and are projected to end the year cumulative fund balances of $2.3million. Capital Project Funds The Capital Improvement Project Fund, Stevens Creek Corridor Park, and Reserve are currently in the Capital Projects Fund type category typically used to account for financial resources that are used construction of major capital facilities or to provide capital improvements for City departments. The Recommended Budget for Capital Projects Funds for FY 2013-14 is $3.4 million. Budgets within the Capital Project Funds are funded by $0.9 million in department revenue and $7million in transfers from the General Fund resulting in an increase to fund balance of $4.5 million. The Capital Reserves began the fiscal year with$1.9million in fund balances and are projected to end the year with fund balances of $6.4 million. This projectedfund balance will consist of $5 million for general capital improvements (policy level), $1.3 million for infrastructure projects, and $0.1 million set-aside for a designated traffic improvement project. Enterprise Funds Enterprise Funds are set up for specific services that are funded directly by for goods or services. Enterprise Funds consist of Resource Reco collection franchise, Blackberry Farm for the City-owned golf course, the Cupertino Sports Center, and Recreation Programs for cultural, youth, teen, sportd physical recreation programs. 6 10 The Recommended Budget for Enterprise Funds for FY 2013-14 is $8.2 million. Budgets within the Enterprise Funds are funded by $6.9 million in program revenue and $0.4 million in transfers from the General Fund, resulting in a decrease to fund $0.9 million. The Enterprise Funds began the fiscal year with $8.5 million in balances and are projected to end the year with fund balances ofmillion. Internal Service Funds Internal Service Funds are used for areas where goods or service City departments or governments on a cost-reimbursement basis. Internal Service Funds comprise funds and programs for information technology, City Channel and website, workers compensation, equipment, compensated absence, -term disability, and retiree medical insurance. The FY 2013-14 RecommendedBudget for the Internal Service Funds is $6.7 million. Budgets within the Internal Service Funds are funded by $3.9 million in department revenue, $0.8 million in equipment replacement funding and $2.3million in transfers from the General Fund resulting in an increase to fund balance of $0.3 million. The Internal Service Funds began the fiscal year with $5.1 million in fund balancesand are expected to end the year with fund balances of $5.4 million. Ongoing Challenges Revenue Volatility The Citys revenue mix is heavily reliant on volatile business-to-business sales tax, which makes up approximately 23% of the annual operating revenues. Business-to- business sales taxes are very sensitive to economic fluctuations Cupertinos experience during the dotcom bust from 2000-2004. Our heavy reliance on the volatile high tech industry also makes us vulnerable. In a year of economic recovery, the loss of two of our top three sales tax producers i2013-14 is projected to result in an 8% reduction in sales tax compared to the FY 201-13 year-end projections. The consequence of this loss only makesthe City even more reliant on one single major tax producer. As a result, the Citys revenues coul based on the success or failure of this single business to busin Sales Tax Liability The Board of Equalization (BOE) is challenging the way sales tax had previousl reported by one of our top sales tax generators. If the BOE dete was reported improperly, it could result in the City being requi million in prior year sales taxes in addition to any subsequent revenues this company. While the issue is being contested, the City is preparing for the worst and hoping for the best. Beginning in FY 2013-14 and throughout the five-year forecast 7 11 period, the City will be building up a Revenue Liability Reserve to a million currently at risk ($10.6 from prior years and $1.8 milli- 13). The City is assuming the loss of these sales tax revenues isongoing. Any sales tax revenues received from this source will also be placed in the Reserve. Labor Negotiations The City is currently negotiating employee salary and benefits w While the Recommended Budget assumes a 3% increase in total compensation, it is possible the budget will need to be amended based on the final r negotiations. Health Benefits There is uncertainty around how the implementation of the Afford will affect the City. Beginning in 2018, the so called Cadillac Tax will impose an excise tax for any employer-sponsored health coverage, including dental and vision coverage, whose value exceeds $10,200 per year for individuals and $27,500 excise tax will be imposed on the amount that exceeds the predetermined thresholds. Some of the Citys current health plans would fall under the def plan, which would increase the cost of providing health benefits Retirement Benefits Significant investment losses experienced by California Public Employees Retirement System (CalPERS) during the great recession resulted in overall funded status of retirement system dropping to 60.8%. Given the recovery, the funded status has 2 improved to 70%. The desired goal is 100% funded status, where assets on hand are 3 equal to the desired level of assets needed to pay pension benef analysis, CalPERS actuaries determined the retirement system was falling to dangerously low funded status levels under existing actuarial policies. This prompted the CalPERS Board to adopt revised actuarial polic the system to 100% funded level within 30 years. The new method the asset smoothing period from 15 years to 5 years and paying gains and losses over a fixed 30 year period with a 5-year ramp up at the beginning of the 30-year period and a 5-year ramp down at the end. The new method is expected to increas retirement contributions beginning in FY 15-16. CalPERS is still determining the impact on public agencies, however, we have included an escalator in the assigned PERS CalPERS Pension & Health Benefits Committee, Agenda Item 9A: Amo 2 Methods for Retirement Trust Funds. April 16, 2013. Ibid. 3 8 12 reserve beginning in FY 2015-16 of the Five-Year General Fund Forecast based on preliminary information available on the impact of this change. UNMET NEEDS As the City prepared its FY 2013-14 RecommendedBudget, some issues surfaced for which funding had not yet been identified. These items include: Unfunded Retirement Health Liability Under Government Accountability Standards Board Statement 45 (GASB 45),state and local governments are required to calculate and report the cost other benefits called "other post-employment benefits" (OPEBs) as an expense during the years in which an employee is providing services in exchange for future benefits. According to the most recent actuarial report, City of Cupertino liability with anongoing cost of $1.7 million. Pre-funding for the OPEB liability is not included in the recommended budget. Unfunded Infrastructure Backlog Pavement Maintenance Included in the Street Pavement budget is $1,985,000 for annual asphalt projects. This minimal level of funding is insuff Citys Streets. At this level of funding the Citys Pavement Condition Index (PCI) of 64 would fall approximately two points to 62. If the City were to million dollars as listed in the Follow Up Items for Council Actionsection of this report, in pavement maintenance this would result in the City maintaining the CPI at 64. Capital Improvement Projects Several desirable Capital Projects arelisted in the unfunded project section of the Capital Improvement Plan (CIP). sfor these unfunded projects total approximately $25.5 million. This total does not include any new or amended projects as listed in the Follow Up Items for Council Action section of this report. Budget Study Session On May 14, 2013, the City Council held a Budget Study Session to, in detail the City Managers FY 2013-14 Recommended Budget. At the study session, Council directed staff to come back with new or additional information on a variety of ite Attachment D is a listing of these Council requests and staff responses. Some of these items require Council specific action and other items are for informational purposes only. 9 13 Follow Up Items for Council Action Action items as listed in the budget study session section of th in this section. Council should consider what items they would like to add to the Recommended Budget and direct staff to make the appropriate adju budget as necessary. Request Funding Funding Impact Required Source Add a potential allocation of $50,000 for water $50,000 General Reduce testing of Stevens Creek Reservoir Fund Unassigned Fund Balance Come back with cost estimate and process for $7-$9 General Reduce moving forward for potential parking million Fund and/or Unassigned structure near Library Field or other solution Financing fund balance for parking and/or issuance of new debt Staff to provide what accelerated pavement $2 million General Reduce Fund Unassigned work could be completed and benefits Fund Balance associated with the repairs and at what costs Come back with small budget allocation for $13,000-General Reduce smaller tree tags that match the bark on City $19,000 Fund Unassigned trees. Fund Balance To modify Cupertino Room Stage $75,000 General Reduce Fund Unassigned Fund Balance Reduce Community Funding program by ($20,000) General Increase $20,000 to reflect unrequested funds Fund Unassigned Fund Balance Add to project list potential replacement of $3,500 General Reduce wireless system at City facilities. annually, Fund Unassigned and/or Fund Balance $15,000 one- time cost Total $18,500 Remove the Distributed Antenna System ($125,000) General Increase (DAS) from CIP project listing Fund Unassigned Fund Balance 10 14 Request Funding Funding Impact Required Source Designate funds for Public Works in a special N/A $5,000 Included in project for the analysis of alternatives to Recommended improve cell phone coverage near poorly Budget served public facilities The Citys fund balance status for the next five years is included below for Councils reference. Please note that an increase use of unassigned fund balance of over $13,482 will result in unassigned fund balance falling below the policy 2014-15. If Council approves the deletion of the Distributive Antenna Sys from the CIP and the reduction ($20,000) in Community Funding,this will result in an additional $145,000 in unassigned fund balance available for use FIVE YEAR FORECAST FUND 2013-20142014-20152015-2016 2016-2017 2017-2018 Beginning Fund Balance 32,282,175 26,970,565 24,455,144 28,431,225 33,016,462 Nonspendable1,003,439 1,003,439 1,003,439 1,003,439 1,003,439 Restricted695,564 695,564 695,564 695,564 695,564 Reserve for Encumbrances/Assigned 172,659 172,659 172,659 172,659 172,659 Reserves/Assigned 20,320,000 22,065,000 24,660,000 26,880,000 29,000,000 Unassigned4,773,903 513,482 1,894,563 4,259,800 7,540,648 Total Ending Fund Balance 26,965,565 24,450,144 28,426,225 33,011,462 38,412,310 Council can direct staff to reduce other assigned fund balance reserves (as listed in the General Fund Fund Balance section on page 5 of this staff report) to fund Council directed expenses that are not currently funded in the City ManaRecommended Budget. Changes to the Budget and Minor Corrections After presenting the Recommended Budget to Council on May 3 and presentation rd materials to Council at the May 14study session, staff made the following th changes/corrections to the budget. General Fund Expenditures were increased by $5,000 to fund an Alternative to Improve Cell Phone Coverage in Poorly Served Public Facilities Special Project in the Public Works Building Maintenance City Hall budget. This increase is funded through the use of unassigned fund balance. Special Revenue Funds Minor changes will be made in some financial schedules to correct department revenue for the Transportation Fund that had 11 15 change is reflected in Attachment B, Financial Overview by Fund and will be corrected in the budget document when it is finalized. Environmental Impacts on the Capital Improvement Plan On May 16, 2013, The Environmental Review Committee (ERC) examin found that there are no significant cumulative environmental imp the granting of a Negative Declaration for the entire CIP (excluding Stevens Creek Corridor Park Phase 2) is recommended. Environmental Determination The CIP list for FY 2013-2014 includes the following: Projects with previous environmental review: e 2) Mitigated Negative Declaration adopted in June 2006. Project aspects changed and a new environmental analy completed, leading to the City Council to adopt a new Mitigated Declaration in September 2011. Projects with deferred environmental analysis: Corridor Park Chain Master Plan-McClellan to Stevens Creek Blvd, Library-Story Room Expansion, Sidewalk Improvements- Orange and Byrne Avenue, McClellan Road Sidewalk Improvements-Phase 1, Storm Drain Master Plan Update, Environmental Education Center- Solar PV System, and City Hall- Distributed Antenna System (DAS). Location, improvements and possible enviro impacts cannot be ascertained at this time. Project details must be finalized for design and environmental analysis work. The remaining CIP projects included in this review are: facilities throughout the City; ____________________________________ Prepared by:Kristina Alfaro, Sr. Management Analyst Reviewed by:Amy Chan, Consultant Approved for Submission by: David Brandt, City Manager Attachments: A: Draft Resolution pass thru revenue budget of City for fiscal year 2013-14 B: Draft Resolution operating and capital budget of City for fiscal year 2013-14 C: Draft Resolution appropriation limit for fiscal year 2013-14 D: Budget Study Session follow up items E: Negative Declaration 12 16 Attachment RESOLUTION NO. 13- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CUPERTINO ADOPTING A PORTION OF THE OPERATING BUDGET FOR FISCAL YEAR 2013-14 RELATED TO PASS-THROUGH REVENUES FOR THE APPLE CAMPUS 2 PROJECT WHEREAS, the orderly administration of municipal government is dependent on the establishment of a sound fiscal policy of maintaining a pio of expenditures within anticipated revenues and available monies; a WHEREAS, the extent of any project or program and the degree of it accomplishment, as well as the efficiency of performing assigned responsibilities, is likewise dependent on the monies made avail and WHEREAS, the City Manager has submitted his estimates of anticipated revenues and fund balances, has determined that estimated revenues and fund balances are adequate to cover appropriations, and has recommended the allocation of monies for specified program activities; and WHEREAS, a portion of the Community Development Department budget for fiscal year 2013-2014 budget involves pass-through revenues paid to the City to cover the costs for various consultants needed on the Apple Campus 2 project, which have been included in the budget to provide transparency and acc NOW, THEREFORE, BE IT RESOLVED that the City Council does hereby approve the following: Section 1: That portion of the Planning and Community Development Department budget for fiscal year 2013-2014 reflecting pass-through revenues paid to the City to cover consultant and expert costs associated with the Apple Campus 2 project, as shown in more detail on Attachment 1, attached and incorporated by reference. 17 PASSED AND ADOPTED at a regular meeting of the City Council of the City of Cupertino this __ th day of June 2013, by the following vote: Vote Members of the City Council AYES: NOES: ABSENT: ABSTAIN: ATTEST: APPROVED: Grace Schmidt, City Clerk Orrin Mahoney, Mayor City of Cupertino 18 Attachment 1 FISCAL YEAR 2013-14 PROPOSED BUDGET FINANCIAL OVERVIEW BY FUND Special Enterprise Debt Service Capital Project Internal Service 2013-2014 Proposed Revenue CategoriesGeneral FundRevenue FundFundsFundFundsFundsBudget Total Sales Tax$ -$ -$ -$ -$- $ -$- Property Tax - - -- - - - Transient Occupancy - - -- - - - Utility Tax - - -- - - - Franchise Fees - - -- - - - Other Taxes - - -- - - - Licenses & Permits - - -- - - - Use of Money & Property - - -- - - - Intergovernmental - - -- - - - Charges for Services 745,000 - - -- -745,000 Fines & Forfeitures - - -- - - - Miscellaneous - - -- - - - Transfers - - -- - - - TOTAL REVENUE$ 745,000$ -$ -$ -$- $ -$745,000 Special Enterprise Debt Service Capital Project Internal Service 2013-2014 Proposed Appropriation CategoriesGeneral FundRevenue FundFundsFundFundsFundsBudget Total Employee Compensation - - -- - - - Employee Benefits - - -- - - - Materials - - -- - - - Contract Services - - -- - - - Contingencies - - -- - - - Cost Allocation - - -- - - - Special Projects 745,000 - - -- -745,000 Capital Outlays - - -- - - - Debt Service/Other Uses - - -- - - - Transfers - - -- - - - TOTAL EXPENDITURES$ 745,000$ -$ -$ -$- $ -$745,000 Depreciation Reserve - - Net Increase (Decrease) in Fund $ -$ -$ -$ -$- $ -$ - Balance/Retained Earnings 19 Attachment RESOLUTION NO. 13- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CUPERTINO ADOPTING AN OPERATING AND CAPITAL IMPROVEMENT BUDGET FOR FISCAL YEAR 2013-14 BY RATIFYING THE ADEQUACY OF ESTIMATED REVENUES AND FUND BALANCES IN EACH FUND TO COVER APPROPRIATED MONIES, APPROPRIATING MONIES THEREFROM FOR SPECIFIED ACTIVITIES AND ACCOUNTS, AND SETTING FORTH CONDITIONS OF ADMINISTERING SAID BUDGET WHEREAS, the orderly administration of municipal government is de on the establishment of a sound fiscal policy of maintaining a proper ratio of expenditures within anticipated revenues and available monies; a WHEREAS, the extent of any project or program and the degree of i accomplishment, as well as the efficiency of performing assigned duties and responsibilities, is likewise dependent on the monies made avail and WHEREAS, the City Manager has submitted his estimates of anticipated revenues and fund balances, has determined that estimated revenues and fund balances are adequate to cover appropriations, and has recommended the allocation of monies for specified program activities; NOW, THEREFORE, BE IT RESOLVED that the City Council does hereby the following sections as a part of its fiscal policy: Section 1: The estimates of available fund balances and anticipated resou to be received in each of the several funds during fiscal year 2013-14, as submitted by the City Manager in his proposed budget and amended during the budget study sessions, are sufficient to cover appropriations. Section 2. There is appropriated from each of the several funds the sum of money set forth as expenditures for the funds named in the Fiscal Year 2013-2014 Proposed Budget Financial Overview by Fund (Attachment 1 ), as amended during the budget sessions, and stated for the purposes as expressed and estimated for each department. Section 3. The City Manager is hereby authorized to administer and transfer appropriations between Budget Accounts within the Operating Budg when in his opinion such transfers become necessary for administrative purpo 20 Section 4. The Director of Administrative Services shall prepare and submit City Council quarterly a revised estimate of Operating Revenues. Section 5. The Director ofAdministrative Services is hereby authorized to carry over, from the prior fiscal year, unexpended appropriations for Capital Improvement projects. Section 6. The Director of Administrative Services is hereby authorized to continue appropriations for operating expenditures that are encumbered or scheduled to be encumbered at year end. PASSED AND ADOPTED at a regular meeting of the City Council of the City of Cupertino this __ th day of June 2013, by the following vote: Vote Members of the City Council AYES: NOES: ABSENT: ABSTAIN: ATTEST: APPROVED: Grace Schmidt, City Clerk Orrin Mahoney, Mayor City of Cupertino 21 Attachment 1 FISCAL YEAR 2013-14 PROPOSED BUDGET FINANCIAL OVERVIEW BY FUND Special Enterprise Debt Service Capital Project Internal Service 2013-2014 Proposed Revenue CategoriesGeneral FundRevenue FundFundsFundFundsFundsBudget Total Sales Tax$ 16,215,000$ -$ -$ -$- $ -$16,215,000 Property Tax 13,138,000 - - -- -13,138,000 Transient Occupancy 4,400,000 - - -- -4,400,000 Utility Tax 3,253,000 - - -- -3,253,000 Franchise Fees 2,905,000 - - -- -2,905,000 Other Taxes 2,700,000 400,000 - -- -3,100,000 Licenses & Permits 3,480,000 - - -- -3,480,000 Use of Money & Property 660,000 50,000 30,000 -- 9,000749,000 Intergovernmental 265,000 4,742,000 - - 289,000 -5,296,000 Charges for Services 3,769,660 365,000 6,879,000 -- 3,852,13914,865,799 Fines & Forfeitures 620,000 - - -- -620,000 Miscellaneous 38,000 - - -- - 38,000 Transfers 1,606,804 384,000 3,079,000 7,623,000 2,383,00015,075,804 - TOTAL REVENUE$ 51,443,660$ 7,163,804$ 7,293,000 $ 3,079,000$ 7,912,000$ 6,244,139$83,135,603 Special Enterprise Debt Service Capital Project Internal Service 2013-2014 Proposed Appropriation CategoriesGeneral FundRevenue FundFundsFundFundsFundsBudget Total Employee Compensation 11,954,742 714,820 1,276,371 -- 1,000,42514,946,358 Employee Benefits 5,075,873 339,149 388,174 -- 2,129,5947,932,790 Materials 3,546,528 447,527 384,112 -- 371,4554,749,622 Contract Services 12,847,522 396,837 4,884,484 -- 1,409,50019,538,343 Contingencies 1,162,522 61,556 358,710 -- 174,1021,756,890 Cost Allocation 4,140,179 594,607 879,870 -- 1,101,9716,716,627 Special Projects 2,263,100 2,446,000 - -- 12,0004,721,100 Capital Outlays 28,000 2,160,000 15,000 - 2,812,000 530,4005,545,400 Debt Service/Other Uses 1,256,000 - - 3,171,838- -4,427,838 Transfers 14,485,804 - - - 590,000 -15,075,804 TOTAL EXPENDITURES$ 56,760,270$ 7,160,496$ 8,186,721 $ 3,171,838$ 3,402,000$ 6,729,447$85,410,772 Depreciation Reserve 802,000802,000 Net Increase (Decrease) in Fund $ (5,316,610)$ 3,308$ (893,721)$ (92,838)$ 4,510,000$ 316,692$ (1,473,169) Balance/Retained Earnings 22 Attachment RESOLUTION NO. 13- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CUPERTINO ESTABLISHING AND ADOPTING THE APPROPRIATION LIMIT FOR FISCAL YEAR 2013-14 WHEREAS, the State of California has adopted legislation requirin jurisdictions to calculate their appropriation limits in complying with Article XIII B; and WHEREAS, said limits are determined by a formula based upon chang population, (city or county), combined with either the change in capita income) or the change in the local assessment roll due to local nonresidential construction; and WHEREAS, the local governing body is required to set an appropria adoption of a resolution; and WHEREAS, the city/county population percentage change over the prior year is 1.17% /1.57% respectively, and the California per capita personal income change is 5.12%. In computing the 2013-14 limit, the City Council has elected to use the county population percentage change along with the California per capita income change,but the Council has a right to use thenon-residential assessed valuation percentage change when the figure is available. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City Cupertino hereby approves a 2013-14 fiscal appropriation limit of $80,979,979. PASSED AND ADOPTED at a regular meeting of the City Council of th Cupertino this __th day of June 2013, by the following vote: Vote Members of the City Council AYES: NOES: ABSENT: ABSTAIN: ATTEST: APPROVED: ______ Grace Schmidt, City ClerkOrrin Mahoney, Mayor, City of Cupertino 23 Attachment D Fiscal Year 2013-14 Budget Study Session Follow Up Items Request Page Retirement costs as a percent of the total FY 2014-15 budget 1 Retirement costs as a percent of total FY 2014-15 Salary & Benefit Costs 1 Information on 3 retirement tiers 1 Amount of total debt and interest rate How long until the City can refinance 2 Impacts of refinancing early What revenue will be received from the San Jose Water and PG&E i6 separately) Have Fiscal Strategic Committee look into possibility of increas6 uncertainty reserves based on CPI and bring back to Council Number of filled positions as of May 1, 2013 versus May 1, 2011 6 Provide standard information on groups seeking Community Funding 7 Bring back recommendation from Audit Committee regarding investm9 for PERS and PARS with explanation as to why PERS has their own invest strategy Put in next Godbe survey regarding removing one or two lanes fro9 Blvd for possible light rail. Also include this in General Plan amendment process. Add recommendation the Proposed Budget Adoption Hearing to add a potentia9 allocation of $50,000 for water testing of Stevens Creek Reservo Research funding/sponsors for free Wifi in the City 10 Add to project list potential replacement of wireless system at City facilities. 11 City to hold a teen oriented musical event or other for cultural 12 Fee Analysis 12 Affordable Housing Status on Palmer Bill and Nexus Study 13 Potential Rental Revenues from new library room 13 Reopen lease agreement with Santa Clara County Bring back information on how often Scenic Circle bridge from Bl14 used by students Status report on contract position with Fire Department14 24 Request Page Potential for Traffic Impact Fee 15 Come back with cost estimate and process for moving forward for potential 16 parking structure near Library Field or other solution for parki Keep a placeholder in Public Works new projects buildings list f16 phone project, but not the City Hall distributed antenna system that is listed currently More explanation and justification on the trail running through 17 Staff to provide what accelerated pavement work could be complet17 associated with the repairs and at what costs Provide more information on what is required for Linda Vista Park. 18 Add Tank House project to McClellan Ranch Master Plan 19 Come back with small budget allocation for smaller tree tags tha19 City trees. IT Budget versus other local agencies of similar size and/or information on systems, 20 number of systems and staffing Stevens Creek Master Plan Update 20 New CIP Cupertino Room Stage 20 Existing Bathroom at McClellan Ranch Site Access versus Cost to add additional 21 restroom and ADA requirements that the facility have 2 ADA accessible restroom Rename of Depreciation to Replacement Fund 21 Community Outreach to inform residents of the revised Budget Doc 21 Add PowerPoint Presentations to the Web 21 Solar versus PG&E Costs 22 25 RETIREMENT COSTS A request was made to provide information on retirement costs as a percent of the total Fiscal Year 2014-15 projected budget, retirement costs as a percent of total FY 2014-15 salary and benefit costs and additional information on the three retirement Retirement costs as a percent of the total FY 2014-15 budget is 6.3% (including retirement contributions and retiree health and LTD costs). Retirement costs as a percent of total FY 2014-15 Salary & Benefit Costs are 23.8% (including retirement contributions and retiree health and LTD c Information on 3 retirement tiers is available on the following chart that is also available in the Proposed Budget. Tier Benefits Hire Date Employer Employer Total Employee Total Share Pickup Employer Share Rate Share I 2.7% @ 55 On or 21.058% 6.00% 27.058% 2.00% 29.058% before Highest Year 12/29/12 II 2% @ 60 After 21.058% 2.00% 23.058% 5.00% 28.058% 12/29/12 Highest 3 Yr with prior Avg CalPERS or Reciprocal agency service III 2% @ 62 After 21.058% 0.00% 21.058% 6.25% 27.308% 12/29/12 Highest 3 Yr with no Avg prior CalPERS service or a break in service over 6 months or more 1 To Table of Contents 26 DEBT SERVICE A request was made for additional information regarding total City debt and refinancing options. On May 23, 2012 the City issued debt of $43.9 million at an average interest rate of 2.81% or $13.1 million in interest that will be paid thru 2030 for a total of $57,073,759 in principal and interest payments. This is represented in detail in the attached schedule on page 3. Prepayment of principal by what is called Direct Funding or refinancing cannot begin until June 15, 2020. The City chose an eight year pre-payment lockout (or bond call) period to secure our interest rate. However, what is called an Advance Refundinould be implemented from now up until that date. In an Advance Refunding the City issues new debt then completely pays off the old debt when the lockout period ends. The City would continue to make debt payments on the old debt for remaining 7 years of the lockout period and would pay a ball eighth year. Interest rate of the escrow earnings needs to be at least the same as the interest rate on the old debt payment to cover the cost for this to make sensehe financial hurdles to make an advance refunding worthwhile are higher than a direct refundiThe City asked MAGIS Advisors, a public financing consultant to run an Advance Refunding scenario and compare that to the Citys current debt service schedule. In an Advance Refunding the City would 1 need to finance issuance costs of: Underwriting $621,320 Other Issuance Costs $220,000 Total Issuance Costs $841,320 The City would issue $44.38 million in face value of new bonds, a $2.72 million premium and $1.59 million deposit transfer from the debt service reserve funfor a total of $48.69 million in bond proceeds at a rate of 2.23%. These proceeds would be used for: Issuance Costs $ 841,320 Deposit to Debt Service Reserve $ 1,659,063 Escrow Account $ 46,183,463 Rounding Amount $ 1,624 Total $ 48,685,470 1 This Analysis assumes the City will make its scheduled debt service payment on July 1, 2013 2 To Table of Contents 27 SCHEDULE OF LEASE PAYMENTS Total Annual Payment PrincipalInterestLease Lease DateComponentComponentPaymentPayment 12/15/12 687,643.15 687,643.15 6/15/13 1,920,000.00 567,778.75 2,487,778.75 3,175,421.90 12/15/13 564,418.75 564,418.75 6/15/14 2,040,000.00 564,418.75 2,604,418.75 3,168,837.50 12/15/14 559,318.75 559,318.75 6/15/15 2,055,000.00 559,318.75 2,614,318.75 3,173,637.50 12/15/15 538,768.75 538,768.75 6/15/16 2,090,000.00 538,768.75 2,628,768.75 3,167,537.50 12/15/16 517,868.75 517,868.75 6/15/17 2,135,000.00 517,868.75 2,652,868.75 3,170,737.50 12/15/17 496,518.75 496,518.75 6/15/18 2,180,000.00 496,518.75 2,676,518.75 3,173,037.50 12/15/18 474,718.75 474,718.75 6/15/19 2,220,000.00 474,718.75 2,694,718.75 3,169,437.50 12/15/19 441,418.75 441,418.75 6/15/20 2,290,000.00 441,418.75 2,731,418.75 3,172,837.50 12/15/20 407,068.75 407,068.75 6/15/21 2,355,000.00 407,068.75 2,762,068.75 3,169,137.50 12/15/21 371,743.75 371,743.75 6/15/22 2,425,000.00 371,743.75 2,796,743.75 3,168,487.50 12/15/22 335,368.75 335,368.75 6/15/23 2,500,000.00 335,368.75 2,835,368.75 3,170,737.50 12/15/23 297,868.75 297,868.75 6/15/24 2,575,000.00 297,868.75 2,872,868.75 3,170,737.50 12/15/24 259,243.75 259,243.75 6/15/25 2,655,000.00 259,243.75 2,914,243.75 3,173,487.50 12/15/25 219,418.75 219,418.75 6/15/26 2,730,000.00 219,418.75 2,949,418.75 3,168,837.50 12/15/26 178,468.75 178,468.75 6/15/27 2,815,000.00 178,468.75 2,993,468.75 3,171,937.50 12/15/27 136,243.75 136,243.75 6/15/28 2,900,000.00 136,243.75 3,036,243.75 3,172,487.50 12/15/28 92,743.75 92,743.75 6/15/29 2,985,000.00 92,743.75 3,077,743.75 3,170,487.50 12/15/29 47,968.75 47,968.75 6/15/30 3,070,000.00 47,968.75 3,117,968.75 3,165,937.50 Total43,940,000.0013,133,759.4057,073,759.4057,073,759.40 3 To Table of Contents 28 The result of the analysis were that if the City were to refinance using an Advance Refunding now it would result in average extra costs of $140,000 per year in debt service payments thru 2030, that totals $1,962,161 and $2,380,737 respectively in net present value and nominal value basis (see detailed analysis on page 4). Based on the financial analysis prepared by MAGIS staff would no refinanced at this time. 4 To Table of Contents 29 MAGIS ADVISORS, PUBLIC FINANCE CONSULTANTS ILLUSTRATION ONLY (alt version) DebtServiceComparison Date TotalP+I DSR NetNewD/S OldNet D/S Savings 07/01/2014 3,313,662.31 - 3,312,038.67 3,168,837.50 (143,201.17) 07/01/2015 3,317,640.00 - 3,317,640.00 3,173,637.50 (144,002.50) 07/01/2016 3,311,605.00 - 3,311,605.00 3,167,537.50 (144,067.50) 07/01/2017 3,312,980.00 - 3,312,980.00 3,170,737.50 (142,242.50) 07/01/2018 3,315,805.00 - 3,315,805.00 3,173,037.50 (142,767.50) 07/01/2019 3,315,830.00 - 3,315,830.00 3,169,437.50 (146,392.50) 07/01/2020 3,318,055.00 - 3,318,055.00 3,172,837.50 (145,217.50) 07/01/2021 3,312,305.00 - 3,312,305.00 3,169,137.50 (143,167.50) 07/01/2022 3,313,755.00 - 3,313,755.00 3,168,487.50 (145,267.50) 07/01/2023 3,317,055.00 - 3,317,055.00 3,170,737.50 (146,317.50) 07/01/2024 3,312,030.00 - 3,312,030.00 3,170,737.50 (141,292.50) 07/01/2025 3,318,125.00 - 3,318,125.00 3,173,487.50 (144,637.50) 07/01/2026 3,314,985.00 - 3,314,985.00 3,168,837.50 (146,147.50) 07/01/2027 3,317,595.00 - 3,317,595.00 3,171,937.50 (145,657.50) 07/01/2028 3,315,595.00 - 3,315,595.00 3,172,487.50 (143,107.50) 07/01/2029 3,313,845.00 - 3,313,845.00 3,170,487.50 (143,357.50) 07/01/2030 3,312,075.00 (1,659,062.50) 1,653,012.50 1,579,118.75 (73,893.75) 2 Total $56,352,942.31 (1,659,062.50) $54,692,256.17 $52,311,518.75 (2,380,737.42) PVAnalysisSummary(NettoNet) GrossPVDebtServiceSavings (2,012,835.63) EffectsofchangesinDSRinvestments 49,050.81 NetPVCashflowSavings@2.291%(AIC) (1,963,784.82) ContingencyorRoundingAmount 1,623.64 NetPresentValueLoss $(1,962,161.18) NetPVLoss /$42,020,000RefundedPrincipal (4.670%) NetPVLoss /$44,380,000RefundingPrincipal (4.421%) RefundingBondInformation RefundingDatedDate 7/03/2013 RefundingDeliveryDate 7/03/2013 2 Total Old Debt Service assumes a debt payment is made on July 1, Service Reserve(DSR) of $1,586,818.75 is applied. 5 To Table of Contents 30 WATER AND ELECTRIC REVENUE A request was made for information regarding revenue received fr and Cal Water rate increases. The recommended budget forecasts that Cupertino will receive $120,000 in additio revenue from PG&E due mostly to the 5% rate increase The recommended budget forecasts that Cupertino will receive $10,000 in addition revenue from San Jose Water due mostly to a pending rate increase of 21.5% The recommended budget forecasts that Cupertino will receive $6,000 in additiona revenue from Cal Water due mostly to the 14% rate increase The table below shows estimated and proposed revenues from various utilities: FY 2012-13 Estimate FY 2013-14 Forecast Utility Utility Tax Franchise Utility Tax Franchise Fee Fee PG&E 1,500,000 825,000 1,580,000 865,000 San Jose Water 0 170,000 0 18000 Cal Water 0 45,000 0 51,000 Other 1,643,000 1,797,000 1,673,000 1,802,000 TOTAL 3,143,000 2,837,000 3,253,000 2,905,000 ECONOMIC UNCERTAINTY RESERVES A request was made to have the Fiscal Strategic Committee (FSC) consider the possibility of increasing the economic uncertainty reserves by the Consumer Price Index (CPI) or other escalator and make a recommendation to the Council. It is anticipated that a recommendation from the FSC to Council in February 2014. FILLED POSITIONS A request was made to provide information on the number of filled positions in the City as of 2011, 2012 and 2013. The following table shows the number of positions at a point in time: As of DateVacancies Authorized Positions Vacancy Rate 3/16/2011 14 162.75 9% 2/9/2012 12 162.75 7% 3/13/2013 8164.75 5% Total authorized as recommended in the FY 2013-14 budget total 164.75. 3 3 Added one Limited 2 year term position Associate Planner and one Sr. Management Analyst position 6 To Table of Contents 31 COMMUNITY FUNDING COMPARISION A request was made to provide standard information on groups see The following matrix has been developed to assist Council in reviewing requests for community fundi 7 32 To Table of Contents 8 33 To Table of Contents PERS AND PARS INVESTMENT STRATEGY A request was made for the Audit Committee to review and make reregarding investment policies for California Public Employees Retirement System (CalPERS) and Public Agency Retirement Services (PARS). It is anticipated that the Audit Committee will review investmen September 2013. Recommendations will be presented to Council. STEVENS CREEK LIGHTRAIL A request was made to provide information regarding removing one to two lanes from Stevens Creek Boulevard for a possible Light Rail tracks and adding a qu Survey to assess residents interest on this change. A question will be added to the next Godbe survey that will be compiled in approximately one year from now. The Citys General Plan Amendment (GPA) currently includes study bringing Bus Rapid Transit (BRT) to Cupertino. BRT would require the same Right of Way (ROW) as light rail (per Valley Transportation Agencys contention). If the Council would like to include light rail and its implications, there may be additiofrom the Planning consultants to study the Environmental Impact Report (EIR). STEVENS CREEK RESERVOIR WATER STUDY A request was made to include as part of the Fiscal Year 2013-14 Recommended Budget Hearing and Adoption a recommendation to add an action item regaquality testing at Stevens Creek Reservoir. This action is included as part of the Summary of Action section in the staff report An additional appropriation of $50,000 will require Council acti recommended budget, if Council is interested in having the study 9 To Table of Contents 34 WIFI FREE CITYWIDE A request was made to research the possibility of providing free-Fi to the residents of Cupertino. The following options were identified: City Method Description Costs to City Challenges Mountain Corporate Google placed radio $0 Finding a View Sponsor transmitters throughout the sponsor City on designated street poles. All installation and maintenance costs are borne by Google. Utility costs are paid for by the City but reimbursed by Google. To get stronger signals on the interior of business or homes, Consumer Premise Equipment must be purchased at a cost between $50-$100. Santa Clara Provided Bought and then upgraded $200,000 Startup costs, through City or replaced original MetroFi ongoing Owned Utility, equipment. maintenance Silicon Valley Upgraded smart-meter $1,000,000 and service Power program. one time costs City uses the smart meters to provide free wifi to $ 24,0000 residents. ongoing San Jose Public/Private Private Company (Rukus $ 94,000 Startup costs, (Downtown) Partnership Wireless) provided outdoor Start Up ongoing access points on light poles maintenance and indoor access points at and service other locations throughout costs downtown. The City of San Jose is $ 22,000 responsible for the Ongoing management of the wireless network. 10 To Table of Contents 35 WIFI IMPROVEMENT IN CITY BUILDINGS A request was made to research what options are available to imp City buildings. The city of Cupertino maintains 11 public WiFi Access Points (APs). The following costs are independent of existing cost for Internet service. The City can replace the routers from the legacy provider for th and considerations: 1.Replace existing service with public WiFi service for commercial Internet Service Providers (ISP); No cost a.These services have mandatory 10-minute user sessions after which the user must log in again b.These services require the user to create an account with the IS 2. Replace existing service with commercially available routers, $1,200 one-time cost a.These routers lack the Terms of Service landing page b.Unable to consolidate management of sessions or APs (Manual vs. Virtual) 3.Replace existing service with managed solution, $3,500 annually a.Vendor provides hardware and cloud-based management software b.Session duration and landing pages controlled by city 4.Develop strategic plan for leveraging and integration of City ne functionality, $15,000 a.Consultant to conduct in-depth analysis, needs assessment and prioritization of technologies, analysis of potential barriers hindering the imple prioritized technologies. b.Does not address short-term WiFi concerns Staff recommends option 3 and 4 to address WiFi issues in the sh item has been included in the staff report for Council consideration. 11 To Table of Contents 36 TEEN ORIENTED MUSIC OR CULTURAL EVENT A request was made to add a teen oriented music or cultural even The powers and functions of the Teen Commission will be to advisParks and Recreation staff on issues and projects important to youth, possible representation of Cupertino youth. Traditionally in September the Teen Commissioners generate a lis on throughout the term. Once the list has been refined and agreed upon,the group will begin to work appropriately. The teens are suggesting their own work plan items, with some input from staff. They are very good about talking amongst one another to keep theommunity based and with the best intentions to enhance the community. It is anticipated that a potential project lists for the teen coill be established in August/September 2013. At this time staff will advise the Teen Commission of Councils request for a musical or cultural event. The list will be made available to Council in October 2013 as part of items of interest. In May 2014, the Teen Commis Council highlighting projects completed in the fiscal year. FEE STUDY A request was made to provide information regarding Planning and Engineering fees collected, specifically information regarding: What fees are for? How are fees developed? Impact associated with fees? How Cupertino fees compare with other comparable jurisdictions City Manager staff will work with Planning and Community Development and Public Works staff on a Fee Study that will address the question listed above be completed on or before February 2014. Once the study has been completed it will presented to Council. 12 To Table of Contents 37 AFFORDABLE HOUSING A request was made for a status update on the Palmer bill and nexus study. Per the Councils current work program, the nexus study is scheduled to be completed with the Housing Elment (December 2014). The Palmer bill can be discussed within this context. As to the status on the Palmer bill, Council asked if City needed a nexus study if a bill is being considered. The Citys consultant attorney recommended updating our residential nexus study which was done before our 1999-2006 Housing Element was adopted in 2003. LIBRARY REVENUES AND LEASE AGREEMENT A request was made to research potential revenues for the new room in the library and potentially reopening the lease agreement with the library. Currently the Library rents Community Hall at no costs at approxan average of 2 hours per rental. If a new library room were to be approximately 122 possible rental slots, 12 of the libraries room rental would require a larger facility than the library room such as Community Hall. Projecte is as follows: Room Hourly Hours per Events Total Costs Description Rental Rate Event Community $30 / hr (M-F) 2 122 $7,320 Possible rental revenue Hall due to increased availability of Community Hall New Library $20 2 122 $4,880 Anticipated rental 4 Room revenue from new library room TOTAL MAXIMUM PROJECTED REVENUE $12,200 The library lease agreement with Santa Clara County ends on December 31, 2018. The annual lease agreement requires the County to pay a minimum base rent o yearly sum equal to the increase of Cupertinos assessed propert assigned assessed value from the base year in FY 1985-86. The County would likely not be agreeable to reopen the lease agreement unless the City provided an incent construction of a reading room in FY 2014-15, additional parking, or solar installations that 4 Rate based on current Social Room rental rate 13 To Table of Contents 38 would reduce the Countys utility costs. Administrative Services lease agreement with the County in Fall of 2013. SCENIC CIRCLE BRIDGE A request was made to provide information on how often the Scenic Circle Bridge is used by students. An informal survey was conducted by the California Land Manageme Farm on the week of May 20, 2013. The results of the survey were that on average there are approximately 5 students in the morning going to school and 5 students in the afternoon returning home, for a total of 5 students using the bridge twice per day. SANTA CLARA COUNTY FIRE DEPARTMENT POSITION A request was made to provide a status update for a contract pos Clara County (SCC) Fire Department. Background 5 Since 1996 the SCC Fire Department had funded one full time position to serve the City of Cupertino exclusively. This position worked solely on disaster addition to this contract position, the City also has a part time employee working approximately 20 hours per week on disaster preparedness issues. Based on property tax figures received through June 30, 2011: 5 Research was conducted regarding expenditures spent per city ser budget information posted online and staff had not yet received a response from Fire Department staff at the time of this report. 14 To Table of Contents 39 The Fire Department receives approximately $20 million in Cupertino property tax per year Revenue has been consistent for the last three years and is now growing This equates to approximately 29% of the SCC Fire revenue budget Cupertino comprises 24% of the total residents served (58,000/24 Cupertino comprises 12% of total square miles served (12/105) The redevelopment agency has additionally added to this revenue In Fiscal Year 2010-2011 the SCC Fire Department switched to a regional approach of providing disaster preparedness services. The City lost its dedicated position and was given 1/5 of a th position (according to the Fire Department) to assume the same role previously accomplished by one full time position. City staff feels that based on measureable work product the serv closer to 5% of a full time position, or 1/20. th City Staff has communicated their dissatisfaction with the level SCC Fire Department on many occasions and has attempted to negotiate to restore serv levels back to the pre-regionalization level. Current Status The SCC Fire Department has two full time at-will positions staffed and no recruitments planned. The Citys disaster preparedness service levels contin have stalled. Council Members Mark Santoro and Rod Sinks will be meeting with the Fire Chi future to discuss the Citys service level concerns and attempt discussion is not successful, council members will speak with thervisors in an effort to resolve the Citys service level issues. Staff will provide a status report on this issue after the meeti SCC Board of Supervisors. POTENTIAL FOR TRAFFIC IMPACT FEE A request was made to provide information on a Traffic Impact Fee. The basis and the use of revenue generated from a traffic impact fee are limited to trans impacted by new development. 15 To Table of Contents 40 To support the adoption of a traffic impact fee, a nexus study wd need to be prepared that anticipated General Plan build out and anticipated transportatio not likely that the limited amount of new development could support large scale transportation projects, however this could be considered in the City Managers Office Work Plan following the current General Plan Amendment process. CIVIC CENTER PARKING A request was made to provide a process and estimates for parkin Staff used some very rough assumptions to obtain an order of magnitude estimate for a parking garage, the cost would be $7M - $9M ($93k - $150k/net additional stall). The per stall cost is very high because the garage is impacting ~60 existing surface lot spaces, so the total garage cost is netted only over the additional 60 75 stalls obtained with the garage. This assumes: Garage dimensions 41,000-48,000 square feet (125 wide x 326 to 384 long) 2 levels; ½ floor below grade and 1 ½ floors above grade 120-150 total stalls (net increase of 60-75 stalls) Costs are summarized in the table below: Stall Yield Stalls Total Cost Per Stall Cost 6 Range Low High Low High Low High New 120 150 $7 mil $9 mil $47k $75k Impacted (60) (75)-- - - Net 60 75$7 mil $9 mil $93k $150k CIVIC CENTER CELL PHONE PROJECT A request was made to provide a project that would improve cellu Center. In addition, Council requested that the Distributed Antenna System (DAS) be removed from the Capital Improvement Plan (CIP). Staff has removed the DAS from the proposed CIP and a Special Project for $5,000 has been added to the Operating Budget Special Projects (Facilities Building Maintenance City Hall Budget Unit 110-8501) entitled Civic Center Cell Signal Enhancement Study. It is anticipated 6 Per stall costs are calculated by taking the lowest end of the S yield and the highest end of the Stall Total Cost Range divided the lowest stall yield. 16 To Table of Contents 41 the study will be completed by Spring of 2014 and results of the study and recommendations on options available to improve cellular coverage will be brought b TRAIL ON EAST SIDE OF LIBRARY FIELD A request was made to provide explanation and justification on side of library field. Parking demand in the afternoons at the Civic Center exceeds curon-site. Maximizing the use of available on-street parking by employees and patrons will help reduce the congestion on-site. Providing a suitable walk will encourage the use of under curbside parking on Pacifica Drive. Such a walk will also add to circulation options for neighborhood residents. ACCELERATED PAVEMENT MAINTENANCE A request was made to provide information on what accelerated pa completed and the benefits associated with these repairs. The current proposed pavement maintenance budget for Fiscal Year 2013-14 is $1,985,000, of which $750,000 is funded from the General Fund. If this program was augmented with an additional $2 million for Fiscal Year 2013-14, Public works could likely maintain the Citys current Pavement Condition Index (PCI) of 64. If funding levels remain at $1,985,000 the department estimates the Citys PCI would drop approximately two The Metropolitan Transportation Commission indicates that a PCI of 7 Good range for pavement condition. The following table summarizes various levels of funding and impact to PCI: 17 To Table of Contents 42 Funding Level PCI Impact PCI (Current 64) $1,985,000 At this level of funding as -2 (PCI 62) provided in the recommended budget, PCI will decrease by approximately 2 points $3,985,000 If Council chose to provide an Between -1 and 0 (PCI 63-64) additional $2 mil in funding for staff to complete accelerated pavement work, this would maintain the current PCI and would slow the rate of increase for the Citys backlog of deferred pavement maintenance $5,000,000 If Council chose to provide a 0 (PCI 64) total of $5 million for ongoing pavement maintenance, this would maintain the PCI and further slow the rate of increase for the Citys backlog of deferred pavement maintenance. $6,500,000 If Council chose to provide a Between 0.5 and 1.0(PCI 65) total of $6.5 million for ongoing pavement maintenance, this could result in a gain of PCI of 0.5 to 1 points per year and an even further deceleration of increase in the backlog of deferred pavement maintenance. LINDA VISTA PARK A request was made to provide information on what is required fo improvements. Three concept plans were presented in the Fiscal Year 2012-2013 CIP budget document for the restoration or renovation of the lower pond area of Linda Vista All three concepts trigger 18 To Table of Contents 43 path of travel accessibility improvements from the upper area Path of travel improvements are required by the current California Building Code as determined by the Building Official, and supported by additional code research by accessibility codes, including sections 1127B, 1132B, and 1134B. The code does provide for exceptions; however the exceptions require findings that would not have applicability or foundation in this case. A fourth scenario which would exclusively restore exactly the wa including the ponds, does not require accessibility upgrades. NATHAN TANK HOUSE TO STEVENS CREEK CORRIDOR A request was made to add Nathan Tank House to the McClellan Ranch Master Plan Project description. The proposed CIP sheet has been revised to include the Nathan Tank House to the project description. Costs associated with the tank house were already included in the project costs but not listed in the project description. There are no a change. PURCHASE OF SMALLER, BARK COLORED TREE BADGES A request was made to estimate costs associated with purchasing smaller, bark colored tree badges to be placed on City Trees. 12,000 badges have been purchased at $.53/badge. Approximately 8,000 badges have placed on street trees to date. There are an estimated 14,000 street trees. Smaller badges are estimated to cost $.50/badge. Labor cost per each badge affixed is approximat Three alternatives are available for changing the type of badge used: Option 1 (Council Request) Purchase the smaller, less eye-catching badges now and place on remaining 6,000 trees, and replace the existing 8,000 badges next year. The cost for new badges would be $7,000, however this would add an additional $1-$2/badge ($6,000 to $12,000) for staff to return to replace the existing badges. For a total cost between $13,000 to $19,000. As the badging program has been very successful in prompting calls for - badging would also impact the response time to these calls. 19 To Table of Contents 44 Option 2 (Staff Recommendation) - Continue to place the remaining stock of badges as part of the initial education and information outreach to identify stree City responsibilities. The plastic used for the badges is weath-proof and UV resistant, but still we expect that they will begin to show wear after 3 or 4 years, so at that point, and concurrent with routine pruning and maintenance we could change the badge t- catching badge. The cost for the new badges would be roughly $7 staff time would be minimal. Option 3 (Staff Recommendation)- Switch immediately to using the smaller, less eye-catching badges for the remainder of the inventory (roughly 6,000 of the Then, after 3-4 years return to switch out the existing badges on 8,000 trees asbove. The cost and staff time would be the same as in Option 2; $7,000 for new badges and minimal additional staff time. An action item for option 1 has been included in the staff report for Council consideration. IT AND CITY CHANNEL STUDY It was requested that a study be conducted of other local agencies of similar what systems are being used and staffing support. It is anticipated a study will be completed and shared with Coun STEVENS CREEK PARK & RESTORATION PHASE Project status was presented to Council on 5/21/13 and the const STAGE IN CUPERTINO ROOM A request was made to add research costs associated with the expansion of the stage in the Cupertino Room of the Quinlan Center. Staff recommends budgeting $75,000 to study, design and construc and dance floor. Parks and Recreation staff recommends that the stage not be expanded. If the stage depth were to be extended, general floor space will be reducedfloor space is currently often used at capacity already. Any expansion width wise requires infrastructure changes and cost $75,000. 20 To Table of Contents 45 This expansion would not achieve significant stage space increase. The only pro to expanding the stage would be to allow for larger raised performances. However, this room is rented often because of the number of people it can accommodate, not because ENVIRONMENTAL EDUCATION CENTER 2 RESTEROOM ND A request was made by Council for information regarding additional costs and delay to add a second restroom to the Environmental Education Center (EEC), and also for staff to confirm that a second restroom would need to meet accessibility code standard. A second restroom must be built to accessible standards, per building code. The additional cost to add a second restroom is $65,000. A report to Council on the feasibility and costs associated with a 2 restroom and a recommended action on how to proceed will be included as a nd recommended action on the June 4 agenda. th DEPRECIATION TO REPLACEMENT FUND A request was made by Council to rename Depreciation listed as a revenue in the Fund Balance Report to Replacement Funding. The schedule has been updated. COMMUNITY OUTREACH AND BUDGET SESSION PRESENTATIONS A request was made by Council for Community Outreach to inform our residents of the revised budget document and to make the Power Point presentations from t available online. Residents were advised on the revised budget via Facebook, Twitter and the revised document is featured on the main page on the Cupertino website www.cupertino.org. All presentations were made available through the Citys website. 21 To Table of Contents 46 SOLAR AND PG&E COSTS A request was made for information regarding the cost of solar energy and PG&E costs. According to a study conducted by the consulting services firm Optony in February 2013, the City could conservatively experience the following savings over 25 years by installing a solar 7 photovoltaic (PV) system using the following financing options: Power Utility Direct Purchase Savings Purchase Savings Agreement $ 3,509,410$ 2,508,165 $ 1,001,245 $ 2,781,609 $ 727,801 Direct Purchase The City would use existing cash reserves to purchase the system outri this situation, the City would be responsible for all ownership Maintenance (O&M), regular system cleaning, and monitoring of syy situations, this may yield the greatest long-term returns, but requires cash up-front and operational costs. Power Purchase Agreement (PPA) The City would enter into a contract with a third party to purchase all energy produced by a PV system installed on property owned by the City. This third party would own the PV system and would be fully responsib including financing, maintenance, insurance, and system production. 7 The PV system has an anticipated useful life of 25 years 22 To Table of Contents 47 CITY OF CUPERTINO RECOMMENDATION OF ENVIRONMENTAL REVIEW COMMITTEE May 16, 2013 As provided by the Environmental Assessment Procedure, adopted by the City of Cupertino on May 27, 1983, as amended, the following des by the Environmental Review Committee of the City of Cupertino o PROJECT DESCRIPTION AND LOCATION Application No.: CP-2013-01 (EA-2013-01) Applicant: City of Cupertino Location: Citywide DISCRETIONARY ACTION REQUEST Review of the project additions to the five-year Capital Improveto 2017-18 FINDINGS OF THE ENVIRONMENTAL REVIEW COMMITTEE The Environmental Review Committee recommends the granting of a finding that the cumulative impact of the CIP projects is determined to be insignificant. /s/Aarti Shrivastava Aarti Shrivastava Community Development Director g/erc/REC EA-2013-01 48