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Home My WebLink About09 - NB-1 - Approval of Deferred Finance, Develop - 11/19/20191 CITY COUNCIL AGENDA REPORT MEETING DATE: NOVEMBER 19, 2019 ITEM NUMBER: NB-1 SUBJECT:APPROVAL OF DEFERRED FINANCE, DEVELOPMENT SERVICES, INFORMATION TECHNOLOGY, AND POLICE DEPARTMENT’S REQUESTS FROM FISCAL YEAR 2019-20 BUDGET ADOPTION DATE: NOVEMBER 13, 2019 FROM: FINANCE DEPARTMENT PRESENTATION BY: KELLY TELFORD, CPA, FINANCE DIRECTOR FOR FURTHER INFORMATION CONTACT: KELLY TELFORD, CPA, FINANCE DIRECTOR, (714) 754-5243 RECOMMENDATION: Staff recommends that the City Council approve the following items that were ultimately deferred during the June 18, 2019 budget adoption hearing: 1. Information Technology Department: Eliminate one part-time Intern and one part- time Programmer Analyst and add one full-time equivalent Network Administrator; 2. Development Services Department: Eliminate one part-time Code Enforcement Officer and reclassify two existing part-time Code Enforcement Officers to full-time Code Enforcement Officers; 3. Police Department: Authorize the City Manager to enter into a master financing agreement for a principal amount not-to-exceed $1.5 million for the purchase of the Mobile Command Vehicle if the City is unsuccessful in securing grant funding; 4. Police Department: Approval of a budget adjustment appropriating $1.125 million (the amount needed to upgrade or replace the L3 police car video system and five replacement vehicles, plus a ten percent contingency); and 5. Police Department: Approve the three-year funding and implementation plan for the requested items. BACKGROUND: During the FY 2019-20 budget adoption, several positions were not approved and the Finance Department was asked to bring these requests, along with the Police Department’s requests, back for consideration once the preliminary results for FY 2018- 2 19 were available and the first quarter of FY 2019-20 was closed. On November 12, 2019, the City Council considered the preliminary results for FY 2018-19, pacing for the first quarter of FY 2019-20, and items that were ultimately deferred during the June 18th budget adoption hearing. DISCUSSION: Deferred Staffing Items: The FY 2019-20 preliminary budget contained several proposed positions that were ultimately deferred during the June 18, 2019 budget adoption hearing. Staff requested to allow these proposed positions to be re-evaluated in conjunction with the review of FY 2018-19 year-end balances and FY 2019-20 first quarter financial results. A list of these positions is in Attachment 1. Subsequently, the Finance Department requested to substitute the full-time Financial Analyst position to a full-time Budget and Purchasing Manager position based on a higher priority need in the department. The City Council approved this request on November 5, 2019. Finance staff also had numerous discussions with the IT and Development Services Departments regarding their deferred positions, which remain critical since they respond to three of the City Council’s goals. Code Enforcement Officers keep our community safe (City Council Goals No. 1) by addressing code violations. IT Department staff is responsible for keeping every department’s system running smoothly, including Finance and payroll. They play a significant role in keeping the City fiscally sustainable, to address our long-term obligations as well as immediate needs (City Council Goals No. 3), and good government and community engagement (City Council Goals No. 6). Having full- time positions in both departments will help with staff retention. Given the better than expected FY 2018-19 preliminary financial results and FY 2019-20 pacing, staff is again recommending the conversion of two part-time positions to one full- time Network Administrator and three part-time Code Enforcement Officers to two full- time Code Enforcement Officers. Attachment 1 provides the estimated costs for these recommendations. Deferred Police Department Requests: During the FY 2018-19 budget adoption, the Police Department also made numerous requests. The initial list totaled nearly $4 million. Staff has been working closely with the Police Department to research outside funding opportunities, including grant funding and equipment financing to help fund these requests. Finance and the Police Department have developed a three-year implementation plan to fund the Police Department’s most critical requests (Attachment 2). A phased approach will allow the City to address how to pay for these items, as well as set a realistic goal for implementation. The first item we addressed was the highest priority item, the Mobile Command Vehicle (MCV). The MCV was previously approved and appropriated by City Council in the FY 3 2017-18 Budget; however, when the MCV was ready to be purchased, the Finance Department identified a structural deficit in the Equipment Replacement Fund necessitating the identification of an alternative financing source. Since then, the Finance Department has been looking at all funding options including grants, leases, loan financing and cash reserves. The City has already begun working with Townsend Public Affairs, the City’s grant writing and legislative advocacy consultant, to identify possible grant options for funding the MCV. If a viable grant opportunity is identified, the City will submit a grant application and will wait to purchase the MCV until the results are released. If the City is unable to identify a viable option by April 1, 2020, the City recommends securing loan financing for the MCV. At today’s low interest rate environment, the City can borrow from a financial institution to fund a significant purchase at a favorable interest rate. At this time, staff is reviewing a financing option for the mobile command vehicle (MCV), which is estimated to cost $1.5 million if we purchase it today. Under the financing option, the annual cost is expected to be $180,000 each year over a 10-year period. The Police Department has evaluated this option and is in agreement with the Finance Department’s recommendation. If a grant is identified or the MCV is financed, this would allow the City to consider using available cash for other critical needs such as the L3 police car video system and five replacement vehicles, which will be prioritized in FY 2019-20 (Phase 1). As shown in Attachment 2, the Finance Department and Police Department are recommending the City Council authorize the City Manager to enter into a master financing agreement for a principal amount not-to-exceed $1.5 million for the MCV as described above which will provide an alternative if the City is unsuccessful in securing grant funding. In addition, the Finance Department recommends appropriating $1.125 million (the amount needed to upgrade or replace the L3 police car video system and five replacement vehicles, plus a ten percent contingency) to the FY 2019-20 Police Department Budget from the FY 2018-19 one-time sales tax revenues received that were unanticipated. For the remaining phases, staff is recommending the City Council formally approve the three-year funding and implementation plan to address the subject items. In Phase 2, the Finance Department and Police Department recommend budgeting five additional vehicles and the Police vehicle computers (MDCs). Phase 2 also includes the first year financing payment for the MCV estimated to total $180,000, if the City were to choose financing. If approved, $1,185,000 would be included in the FY 2020-21 Budget. In Phase 3, the Finance Department and Police Department recommend budgeting five more vehicles. Phase 3 also includes the second year financing payment for the MCV estimated to total $180,000, if the City were to choose financing. If approved, $410,000 would be included in the FY 2021-22 Budget. Finally, the three remaining items in Attachment 2 have already been purchased (including the CCTV System, Drone, and Dragon Dictation Software). Other items are anticipated to be purchased through outside funding sources such as AB 109, Asset Forfeiture Funds, or other grant opportunities (including the personal protective equipment, Digital Imaging Management Software and Crime Scene Investigation Equipment). 4 ALTERNATIVES CONSIDERED: The City Council could choose not to approve part of or all of the recommendations and provide alternative direction. FISCAL REVIEW: Deferred Staffing Items: There is sufficient funding in the FY 2019-20 IT and Development Services Department Budgets, respectively, to fund the proposed staffing changes. The estimated total ongoing cost of these staffing changes is $261,859, with a breakdown of costs per position included as Attachment 1. Deferred Police Department Requests: Staff is recommending Council to authorize the City Manager to enter into a master financing agreement for a principal amount not-to-exceed $1.5 million for the purchase of the Mobile Command Vehicle, if the City is unsuccessful in securing grant funding. The preliminary estimate for a 10-year financing term is approximately $180,000 per year and would begin in FY 2020-21. Staff is also requesting approval of a budget adjustment appropriating $1.125 million (the amount needed to upgrade or replace the L3 police car video system and five replacement vehicles, plus a ten percent contingency) to the FY 2019-20 Police Department Budget from the FY 2018-19 one-time sales tax revenues received which were unanticipated in the General Fund unassigned Fund Balance. Finally, staff is recommending the City Council formally approve the funding and implementation plan (Attachment 2), which totals approximately $2.2 million over three years, excluding the future items and corresponding costs. LEGAL REVIEW: The City Attorney has reviewed and approved this report as to form. COUNCIL GOALS AND PRIORITIES: Consideration of the deferred items from the FY 2019-20 budget adoption accomplishes the following City Council Goals & Priorities: Goal No. 1 – Keep Our Community Safe, by upgrading our public safety infrastructure, improving staffing in the Code Enforcement Department, continuing to address the secondary impacts of sober living homes through code enforcement; Goal No. 3 – Keep the City Fiscally Sustainable, to address our long- term obligations as well as immediate needs; and No. 6 – Good Government and Community Engagement, by completing our IT strategic plan. 5 CONCLUSION: Staff recommends that the City Council approve the following items that were ultimately deferred during the June 18, 2019 budget adoption hearing: 1. Information Technology Department: Eliminate one part-time Intern and one part- time Programmer Analyst and add one full-time equivalent Network Administrator; 2. Development Services Department: Eliminate one part-time Code Enforcement Officer and reclassify two existing part-time Code Enforcement Officers to full-time Code Enforcement Officers; 3. Police Department: Authorize the City Manager to enter into a master financing agreement for a principal amount not-to-exceed $1.5 million for the purchase of the Mobile Command Vehicle, if the City is unsuccessful in securing grant funding; 4. Police Department: Approval of a budget adjustment appropriating $1.125 million (the amount needed to upgrade or replace the L3 police car video system and five replacement vehicles, plus a ten percent contingency) to the FY 2019-20 Police Department Budget; and 5. Police Department: Approve the three-year funding and implementation plan for the requested items. KELLY A. TELFORD, CPA BRYAN GLASS Finance Director Police Captain BARRY CURTIS STEVE ELY Economic & Development Services Information Technology Director Director KIMBERLY HALL BARLOW City Attorney ATTACHMENTS: 1. Deferred Items – Staffing 2. Deferred Items – Police Department Requests and Funding/Implementation Plan DISTRIBUTION: City Manager City Attorney City Clerk Staff Items Deferred During FY 19/20 Budget Adoption - AddendumStaffing ItemsOriginal RequestDepartment Description Original Estimated Cost Ongoing Estimated Costs Finance Department FT Financial Analyst (new position) 139,014 139,014 Information Technology DepartmentFT Network Administrator - Eliminate PT Intern and PT Programmer Analyst and add this positon8,570 36,686 Development Services DepartmentFT Code Enforcement Officers (2) - Eliminate one PT Code Enforcement Officer and reclassifying two PT Code Enforcement Officers to full time12,987 12,987 Estimated Cost to General Fund160,571 188,687 Revised RecommendationsDepartment Description Original FY 19/20 Estimated Cost Revised FY 19/20 Estimated Cost* Ongoing Estimated Costs 139,014 - 139,014 - 106,093 212,186 Information Technology DepartmentFT Network Administrator - Eliminate PT Intern and PT Programmer Analyst and add this positon8,570 5,713 36,686 Development Services DepartmentFT Code Enforcement Officers (2) - Eliminate one PT Code Enforcement Officer and reclassifying two PT Code Enforcement Officers to full time12,987 8,658 12,987 Estimated Cost to General Fund160,571 120,464 261,859 * Based on 8 months left in the fiscal year.Finance DepartmentFT Financial AnalystFT Budget and Purchasing Manager