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Home My WebLink About0 - Facilities Finance Review Committee Report• 0 FACILITIES FINANCE REVIEW COMMITTEE . Final Report — May 23, 2006 Facilities Finance Review Committee IL Report — May 23, 2006 EW 1. The Committee recommends that the Long -term Facilities Financing Plan, specifically the plan designated as Attachment A to this report, should be developed in final form and reviewed and updated at duly noticed Council Meetings on a regular basis: • As part of the annual budget review process; • Any other time an actual project is being considered for design and funding within the current fiscal year; and • Any time the Long -term Facilities Financing Plan deviates from the financing schedule adopted by the City Council. 1 lJ Facilities Finance Review Committee Report — May 23, 2006 2. The Committee recommends that a Facilities Replacement Fund, consisting of deposits from reserves, General Fund contributions, proceeds from COPS and interest earnings thereon, should be established. This Facilities Replacement Fund would represent all revenues and expenditures connected with the Long -term Facilities Financing Plan. It would also act as a repository for funds set aside in reserve for future program expenses, thereby facilitating "level funding" from the General Fund. Facilities Finance Review Committee Report — May 23, 2006 3. The Committee finds that although the Long -term Facilities Financing Plan is an ambitious undertaking, It can probably be accomplished within an acceptable time frame, depending upon Council project priorities, using revenue sources currently available to the City. Therefore, the Committee recommends that the Long- term Facilities Financing Plan nnQt, include any form of tax increase. e 0 0 Facilities Finance Review Committee Report — May 23, 2006 4. The Committee recommends the use of Certificates of Participation (COPS) to fund the Long -term Facilities Financing Plan. The Committee further recommends that the use of COPS should be supplemented by an initial General Fund allocation to the Facilities Replacement Fund. Staff reported to the Committee that the Capital Projects Reserve that has been established for this purpose is expected to have an accumulated balance of approximately $14 million after the close of the 2006- 2007 fiscal year. The Committee recommends that this entire amount should be allocated to the new Facilities Replacement Fund. Facilities Finance Review Committee Report — Elm May 23, 2006 The Committee recommends that future annual General Fund allocations to the Facilities Replacement Fund should be targeted at $4.5 to $6 million, adjusted upward at least 2.5% per year, unless the City Council determines that other General Fund Operating Budget requirements should constrain it to a lower level. The specific level of funding within that range should be identified by the City Manager, in light of competing requirements, in his Budget Recommendation to the City Council. Facilities Finance Review Committee Report — May 23, 2006 6. The Committee recommends that the annual contribution (the "Net General Fund Impact's to the Facilities Replacement Fund should be capped at 5% of General Fund revenues during any fiscal year. Absent a determination by the City Council that there are special extenuating circumstances, prospective projects should be delayed until they can be accommodated within that 5% ceiling. Facilities Finance Review Committee 16 - Report — May 23, 2006 7. The Committee recommends that, while support of the Long -term Facilities Financing Plan is an important and appropriate use of the fiscal resources available to the City: • The existing service levels for operations supported by the General Fund should be maintained, • The existing Capital Improvement Program support level should be maintained, • Reserves should be maintained as per Council Policies, and • Replacing and repairing existing facilities should ge,nera0y1have priority over adding new facilities. 0 0 Facilities Finance Review Committee Report — May 23, 2006 8. The Committee recommends that the City Council should continue to conduct a vigorous community outreach program including noticed community meetings as part of the process of finalizing the Long -term Facilities Financing Plan, especially with regard to scope, need, prioritization and financing of projects. The goal is to ensure that the City provide sufficient information to demonstrate the substance of the Long -term Facilities Financing Plan. Facilities Finance Review Committee Report — May 23, 2006 01111111111117— __ - 9. The Committee recommends that an independent "Needs Assessment' should be conducted as each facility is being considered for design and approval, unless the City Council determines that such an outside assessment is not needed and would constitute an unnecessary expenditure. 0 0 Facilities Finance Review Committee Report — May 23, 2006 .,6, 10. The Committee recommends that the schedule for replacement of individual facilities should depend upon: • Need • The actual and projected balances in the Facilities Replacement Fund • The cost of COP financing • The availability of other funding on a case by case basis • Council and Community priorities • The status of the useful life of the asset to be replaced and the ability of the current facility to meet service and regulatory requirements Facilities Finance Review Committee Report — May 23, 2006 11. The Committee recommends that the City Council and City Staff should make all reasonable efforts to secure additional outside funding for specific projects within the Long -term Facilities Financing Plan. Particular attention should be given to encouraging volunteer fund raising and also naming opportunities where appropriate. The Crean /Mariners Library is an excellent example to emulate whenever possible. Xq • 0 Facilities Finance Review Committee Report — May 23, 2006 12. The Committee estimates that the proposed initiative to require a public vote for the City to enter into COP financing agreements would impact the Long -term Facilities Financing Plan in several ways: a. There would be a direct cost of holding a special election, if the vote were not held in concurrence with a regularly scheduled election b. To the extent that the requirement for a vote delayed a particular project the cost of that project would increase at an estimated rate of approximately 3% per year c. The requirement for a vote would affect the promptness with which financing could be obtained, which could result in additional, but undetermined, financing costs d. A public vote would establish whether the public wants its funds spent on a project and the level of public support FACILrrY REPLACEMENT PLANNING WORKSHEET �aeall9n NSlr snnlran;.® Yr. 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NN frA00 Nbc Be�YXf9Bssln C29l WOCr aIeM Or :1950s W99tl Fwn0 T. sw, Facilities Finance Review Committee Report — May 23, 2006 Facitties Replacement Fund S100 r $6a -- -- • Cash Available to Finame Coretruction and Service Debt S70 560 - $50 $40 S30 - 320 $10 3a 1 3 5 7 .. 11 13 15 17 19 21 23 25 27 29 31 33 35 $35 $30 $25 c $20 f $15 $10 $5 $0 Facilities Finance Review Committee Report — May 23, 2006 Construction Expenditures as Compared to Net General Fund Debt Service Budget A G Caremldlon Eyerdllures ❑ Net rob[ Service Expenditures WME]i Ifillil I I l 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 EA 0 0 Facilities Finance Review Committee Report — May 23, 2006 General Fund Appropriations PTO. MnW'e�mrs 4.5`.° o OHn 9erMC� 40 y 3.5% m 3.0% 3 r 2.5 °k 2.0`w 1.0 0.5 0.0% 1 3 6 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 YOM saso $400 $350 $300 $250 S2W $150 Slop $50 S