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Finance Committee Agenda - January 14, 2016
CITY OF NEWPORT BEACH FINANCE COMMITTEE AGENDA - Final 100 Civic Center Drive - Crystal Cove Conference Room, Bay 2D Thursday, January 14, 2016 - 3:00 PM Finance Committee Members: Keith Curry, Chair / Council Member Diane Dixon, Mayor Tony Petros, Council Member Patti Gorczyca, Committee Member William C. O’Neill, Committee Member Larry Tucker, Committee Member John Warner, Committee Member Staff Members: Dave Kiff, City Manager Dan Matusiewicz, Finance Director / Treasurer Steve Montano, Deputy Director, Finance Marlene Burns, Administrative Specialist to the Finance Director The Finance Committee meeting is subject to the Ralph M. Brown Act. Among other things, the Brown Act requires that the Finance Committee agenda be posted at least seventy-two (72) hours in advance of each regular meeting and that the public be allowed to comment on agenda items before the Committee and items not on the agenda but are within the subject matter jurisdiction of the Finance Committee. The Chair may limit public comments to a reasonable amount of time, generally three (3) minutes per person. The City of Newport Beach’s goal is to comply with the Americans with Disabilities Act (ADA) in all respects. If, as an attendee or a participant at this meeting, you will need special assistance beyond what is normally provided, we will attempt to accommodate you in every reasonable manner. Please contact Dan Matusiewicz, Finance Director, at least forty-eight (48) hours prior to the meeting to inform us of your particular needs and to determine if accommodation is feasible at (949) 644-3123 or dmatusiewicz@newportbeachca.gov. NOTICE REGARDING PRESENTATIONS REQUIRING USE OF CITY EQUIPMENT Any presentation requiring the use of the City of Newport Beach’s equipment must be submitted to the Finance Department 24 hours prior to the scheduled meeting. I.CALL MEETING TO ORDER II.ROLL CALL III.PUBLIC COMMENTS Public comments are invited on agenda and non-agenda items generally considered to be within the subject matter jurisdiction of the Finance Committee. Speakers must limit comments to three (3) minutes. Before speaking, we invite, but do not require, you to state your name for the record. The Finance Committee has the discretion to extend or shorten the speakers’ time limit on agenda or non-agenda items, provided the time limit adjustment is applied equally to all speakers. As a courtesy, please turn cell phones off or set them in the silent mode. IV.CONSENT CALENDAR MINUTES OF DECEMBER 10, 2015A. Recommended Action: Approve and file. V.CURRENT BUSINESS January 14, 2016 Page 2 Finance Committee Meeting BI-ANNUAL INVESTMENT PORTFOLIO REVIEWA. Summary: Staff and/or one or more investment advisors will discuss current market conditions and the performance of the City's investment portfolio. Recommended Action: Receive and file. IMPLEMENTATION OF BUDGET PREPARATION FRAMEWORK - REVIEW OF OPERATING BUDGET, SESSION 4 B. Summary: During recent Finance Committee meetings, members discussed pursuing actions for bringing greater transparency and accountability during the annual budget development process. Staff believes that following a proposed budget preparation framework consisting of budget principles, and associated strategies and tactics can be a reliable vehicle for improving the City’s budget process. In furtherance of Budget Framework Tactic T.10.1, the goal of this presentation will be to familiarize members of the Finance Committee with the elements of the Fiscal Year 2015-2016 Public Works Department budget, provide opportunity for questions, and to gain clarity in the funding allocations for departmental programs. Recommended Action: In furtherance of Budget Framework Tactic T.10.1, review, ask questions, and provide comment relating to the Public Works Department Fiscal Year 2015-2016 operating budget. REVIEW OF FACILITIES FINANCIAL PLANNING TOOL (FFPT)C. Summary: Staff will present the timing, means of financing, and fiscal impacts associated with funding high-priority capital projects approved by the City Council. Recommended Action: Receive and file. January 14, 2016 Page 3 Finance Committee Meeting WORK PLAN OVERVIEWD. Summary: Staff will present and seek approval of the tentative Finance Committee agenda topics scheduled for the calendar year. The work plan represents the planned topics of discussion; however, is subject to change based on the availability of information and the need to schedule other topics as they arise. Recommended Action: Review and approve the tentative Finance Committee agenda topics. ISSUANCE OF MULTI-FAMILY HOUSING REVENUE BONDS FOR THE UPTOWN NEWPORT PROJECT BY THE CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY TO TPG/TSG VENTURE I ACQUISITION, LLC E. Summary: The California Statewide Communities Development Authority (CSCDA) is authorized to issue bonds, notes, and other evidences of indebtedness or certificates of participation in leases to public entities and private developers in order to promote economic development, including the provisions and maintenance of multi-family housing. The borrower, TPG/TSG Venture I Acquisition, LLC, (a joint venture entity formed by Shopoff Realty Investments and the Picerne Group) is seeking financing from CSCDA for the acquisition, construction and development of the multifamily rental housing projects collectively known as the Uptown Newport Village. The law requires a public hearing be held to allow members of the public and the governing board the ability to comment and approve or disapprove the issuance of bonds for the project. Any project not approved by the local jurisdiction will not be financed through CSCDA. As the Program Participant, the City of Newport Beach will not incur any liability of this CSCDA financing. Recommended Action: Review and recommend a City Council public hearing on the issuance of Multi-Family Housing Revenue Bonds by CSCDA to TPG/TSG Venture I, LLC for the development of the Uptown Newport I and II Apartments. January 14, 2016 Page 4 Finance Committee Meeting YEAR-END CLOSING RESULTSF. Summary: Staff will present the preliminary year-end closing results for Fiscal Year 2014-2015. Recommended Action: Receive and file. QUARTERLY ERP UPDATEG. Summary: Staff will provide the Committee with a progress report on the Enterprise Resource Plan project to receive and file. Recommended Action: Receive and file. VI.FINANCE COMMITTEE ANNOUNCEMENTS ON MATTERS WHICH MEMBERS WOULD LIKE PLACED ON A FUTURE AGENDA FOR DISCUSSION, ACTION OR REPORT (NON-DISCUSSION ITEM) VII.ADJOURNMENT ! 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" & '&# " #/ "% - % # " # 4 '8# - #1 /'&& )= =, #.++& % % ! ! )* &8 57 7D573 7'$$ - ! % ''4 " - # " 3 >4 "$$ ( ( "- " )* &8 &81 )' *%+ 8 F "$$ 8 CD 5 D 3 7'$$ - ! %& ! %- % #") 9" " "$$ ( ( "- " )* E3 D 7 7 7 D55. 5 DD 7D77 = 7D77 ? E3 )D Finance Committee Meeting Minutes December 10, 2015 Page 1 of 6 CITY OF NEWPORT BEACH FINANCE COMMITTEE DECEMBER 10, 2015 MEETING MINUTES I. CALL MEETING TO ORDER The meeting was called to order at 4:00 p.m. in the Newport Coast Conference Room, Bay 2E, 100 Civic Center Drive, Newport Beach, California 92660. II. ROLL CALL PRESENT: Council Member Keith Curry (Chair), Mayor Pro Tem Diane Dixon, Council Member Tony Petros (arrived 4:05 p.m.), Committee Member Patti Gorczyca, Committee Member William C. O'Neill, Committee Member Larry Tucker, and Committee Member John Warner STAFF PRESENT: City Manager Dave Kiff, Finance Director/Treasurer Dan Matusiewicz, Assistant City Manager Carol Jacobs, Deputy Finance Director Steve Montano, IT Manager Rob Houston, Police Support Services Administrator Jonathan Stafford, Fire Chief Scott Poster, Assistant Fire Chief Rob Williams, Division Fire Chief Cathy Ord, Principal Planner Jim Campbell, Deputy General Services Director Mike Pisani, Administrative Manager Angela Crespi, and EMS Division Chief Kristin Thompson MEMBERS OF THE PUBLIC: Marilyn Ellis, Neil Ellis and Jim Mosher III. PUBLIC COMMENTS Jim Mosher commented on the shelf space provided in the Library for the City budget but noted that the Library does not yet have a copy of the budget adopted earlier this year. Additionally, the versions available on line are missing documents and he wondered whether the City will have a published budget document this year. He commented on the Annual Consolidated Statement of Revenues and Expenditures published in the Daily Pilot and suggested Members of the Committee may want to review it. He referenced a recent Council meeting where discussion took place regarding the Civic Center budget and the need for an independent audit. He commented on the possibility of being under/over budget as well as on an organization called, "Transparent California" and their release of salary information for all California Cities. He suggested the Committee might be interested in reviewing it. He added that pension data is also available through the same organization. IV. CONSENT CALENDAR A. MINUTES OF NOVEMBER 12, 2015 Recommended Action: Approve and file. Chair Curry opened public comments. Jim Mosher reported that there was reference in the minutes to an Officer David McGill and that he is now the Deputy Police Chief. Additionally, he noted there is reference to OTS and suggested spelling that out as the Office of Traffic Safety and noted that the minutes from the last several meetings are not yet on the City's website. Seeing no others wishing to address the Committee, Chair Curry closed public comments. Finance Committee Meeting Minutes December 10, 2015 Page 2 of 6 Committee Member Warner moved, and Committee Member O'Neill seconded, to approve the November 12, 2015, Finance Committee Minutes, as corrected. The motion carried, unanimously. V. CURRENT BUSINESS A. UNDERGROUND UTILITY ASSESSMENT DEFERRAL PROGRAM Summary: At its October 13, 2015, meeting the City Council considered an Underground Utility Assessment Deferral Program and referred consideration of potential program ideas to the Finance Committee for recommendation. The general plan would be designed to help resident property owners that may not have sufficient disposable income to pay the undergrounding assessment or utility connection costs. The purpose of this staff report is to analyze potential options for recommendation to the City Council and facilitate discussion. Recommended Action: Provide the City Council with options and recommendations for programs focused on providing financial relief to resident property owners that may not have sufficient disposable income to pay the undergrounding assessment or utility connection costs. Finance Director/Treasurer Dan Matusiewicz presented details of the report noting that interest has been expressed in an Assessment Deferral Program. He reported that the staff report details three options for the Committee to consider and reported that he had a conversation with a local bank that would be interested in assisting the City in the loan administration. The City would either have to guarantee the loan or front the proceeds. The third recommendation is education on what options are available in the private sector. Committee Member Patti Gorczyca reported that in an abundance of caution, the City Attorney suggested, and she agreed, to recuse herself from this item as she owns property within Assessment District 117. However, as the item affects her property, she kept the option of providing comments as a member of the public open. She indicated that she received an opinion from the Fair Political Practices Commission that she did not have a conflict, but, she went ahead and recused herself in an abundance of caution. Council Member Curry commented on the assessment amount and reported that the deferral criteria has not yet been established. He presented a sample scenario with various assumptions and asked how the City would get paid back. Finance Director/Treasurer Matusiewicz reported that upon transfer or sale of the home, the note would either become due or it would be payable from escrow. He stated that if the home were to be transferred, the heir would be responsible for paying the assessment at the time of the transfer. Discussion followed regarding the process in cases where the home went into foreclosure, ways of protecting the City's interests, the City's priority status as long as it was ahead of any other financing, additional costs for administration of the loan, the possibility of establishing terms that may address the default issue and use of similar programs in the past. Council Member Curry questioned the financial prudence of using public money to provide private loans and expressed concerns with the amount of time allowed for the loan to be paid back. He also questioned whether there is legality in establishing a commitment like this. He added that there would be additional impetus to want to foreclose on properties and felt that the proposal will result in a lot of work for a very narrow segment of the community. Finance Committee Meeting Minutes December 10, 2015 Page 3 of 6 Committee Member Tucker agreed and added that he does not see the decision within the purview of the Committee. Additionally, he stated that it is a complicated arrangement, for not a lot of money but acknowledged increases in property values by undergrounding utilities. Council Member Petros added that the City would not want to face the inevitability of foreclosing on someone's home. Discussion followed regarding interest comparisons using the City's deferral program versus through property taxes, over a twenty-year period, the possibility of funding through reverse mortgages or grants, funding sources, appropriate uses of CDBG funds, undergrounding costs, and criteria for adjusting assessments. Council Member Petros suggested moving this item along and direct staff to summarize the issues discussed. Additionally, that there be an acknowledgement that the Committee discussed the issue of using the public treasury as bank, and specify that there is some concern regarding the chilling effect this could have on homeowner defaults; in addition, that the summary of issues be presented to Council, for their consideration. Council Member Curry opened public comments. Neil Ellis asked regarding ownership of the poles and spoke in opposition to the undergrounding plan and questioned the validity of a petition that was circulated regarding the matter. Council Member Curry reported that voters have already voted on the district and that the matter is not within the Finance Committee's purview. Mr. Ellis opined that the owners of the pole should pay for their removal if they want them out. Council Member Curry closed public comments. Council Member Petros moved, and Mayor Pro Tem Dixon seconded, to direct staff to summarize the issues discussed, that there be an acknowledgement that the Committee discussed the issue of using the public treasury as bank, and specify that there is some concern regarding the chilling effect this could have on homeowner defaults; in addition, that the summary of issues be presented to Council, for their consideration. The motion carried, unanimously. Committee Member O'Neill moved, and Mayor Pro Tem Dixon seconded, to recommend to Council, that the City replicate the 2010 Utility Connection Grant Program using CDBG funds at 80 percent income level for connections. The motion failed with 2 ayes (O’Neill and Dixon) and 5 noes. B. IMPLEMENTATION OF BUDGET PREPARATION FRAMEWORK – REVIEW OF OPERATING BUDGET, SESSION 3 Summary: During recent Finance Committee meetings, members discussed pursuing actions for bringing greater transparency and accountability during the annual budget development process. Staff believes that following a proposed budget preparation framework consisting of budget principles, and associated strategies and tactics can be a reliable vehicle for improving the City’s budget process. In furtherance of Budget Framework Tactic T.10.1, the goal of this presentation will be to familiarize members of the Finance Committee with the elements of the Fiscal Year 2015-2016 Fire Department budget, provide opportunity for questions, and to gain clarity in the funding allocations for departmental programs. Finance Committee Meeting Minutes December 10, 2015 Page 4 of 6 Recommended Action: In furtherance of Budget Framework Tactic T.10.1, review, ask questions, and provide comment relating to the Fire Department Fiscal Year 2015-2016 operating budget. Fire Chief Scott Poster distributed handouts to the Committee, provided a brief video regarding the Newport Beach Fire Department and a PowerPoint presentation of the Department's budget. Discussion followed regarding overtime, the possibility of having pool employees, having lower- level trained employees to avoid overtime costs and using retirees to work in support positions. Fire Chief Poster provided details of Fire Department operations, responses, revenues, tasks of the Facility Coordinator, facilities maintenance, contract management and paramedic and non- paramedic assessment units. Requests were made to show years of service for safety personnel and show figures compared to prior years in terms of percentages and list key drivers, in future reports. Discussion followed regarding doing a variance analysis on a City-wide basis. Fire Chief Poster addressed budget execution, revenue optimization and budget revenue generation. Council Member Petros commended Chief Poster for his work and for his report of the current system. He wondered regarding other opportunities and options to deliver the same service and hoped that the City would have the courage to review the type of service that the community would like to see and consider options for delivery and cutting costs. Discussion followed regarding the possibility of studying what other municipalities and Fire Departments are doing that may work for the City, working with the Fire Authority and opportunities to share services. Council Member Curry opened public comments. Jim Mosher commented on contracts with the various bargaining units and reported that summary information is available on the City's website. He commented on bereavement pay and on contracts with the Police and Fire Chiefs. In response to his question, Finance Director/Treasurer Matusiewicz reported that overtime is not pensionable. He asked regarding equipment replacement and specific items within the report. Council Member Curry closed public comments. Council Member Curry reported the Fire Department is the second largest department in the City and the budget impacts are very significant for the overall community. The City has been working closely with the Chief in terms of streamlining and Council Member Curry added that many issues are contractually limited as well as by State law. Discussion followed regarding considering new models of safety services, unfunded pension liabilities, and the need to get the house in order as best as possible. Finance Director/Treasurer Matusiewicz asked whether the Committee would like to direct staff to proceed developing the budget under the current model, make a study and make adjustments upon conclusion of the study. Council Member Petros stated that the Committee appreciates the services that the Fire Department has provided, but in the January budget cycle, the Committee will roll up its sleeves and in cooperation with the Fire Department, see if the City can do better for its citizens. Finance Committee Meeting Minutes December 10, 2015 Page 5 of 6 C. LIFE SAFETY SERVICES PROGRAM EVALUATION Summary: Staff will discuss the results of a recent review of the City’s Fire Department Life Safety Service as part of the on-going effort to review operations for effectiveness, efficiency and cost. This report provides the roles and responsibilities of the Division and summarizes the results of the study. Recommended Action: Receive and file. Assistant City Manager Carol Jacobs provided a report noting there were initial concerns about coordination of plan check and plan review as a customer-service driven study. She reported that the consultant interviewed people across a number of departments and noted there were a number of themes that the City can work on relative to internal issues. She stated there were financial issues and asked for input from the Committee regarding reclassifying the Fire Marshall position, making it an Assistant Fire Marshall, saving the City about $129,000 a year or not hiring another body and letting the Building Official assume the Assistant Fire Marshall role. She addressed other options and listed actions taken and under consideration. Council Member Curry spoke in support of letting the Building Official assume the Assistant Fire Marshall role. Additionally, he noted the need to streamline the permitting process. Assistant City Manager Jacobs added that any fire-related issue that could not be addressed by the Assistant Fire Marshall, would be addressed by Chief Poster. She reported that the study did not include benchmarking of other agencies. Council Member Curry opened public comment. Jim Mosher commented on the report, emergency readiness and improving public outreach. Chief Poster noted that the Fire Department has a Hazard Mitigation Plan and noted there was public outreach done. Council Member Curry closed public comment. Committee Member O’Neill moved, and Committee Member Gorczyca seconded, to receive and file the report. The motion carried, unanimously. D. CITY COUNCIL POLICY F-9 CITY VEHICLE/EQUIPMENT GUIDELINES Summary: At the City Council Meeting of October 27, 2015, the City Council reviewed and approved changes to the City Council Policy F-9 – City Vehicle/Equipment Guidelines. These changes will extend the life of the City’s fleet, eliminate several types of equipment the City no longer owns and add vehicles to the Equipment Maintenance Fund that were previously not included. The revision to Policy F-9 on October 27, 2015, resulted in savings of approximately $1,039,000 to the City’s General and Enterprise Funds. The City Council requested that the Finance Committee review Policy F-9 to determine if additional savings are available. After a thorough review of the policy and the financial resources necessary to maintain the Equipment Replacement Fund, staff is not recommending any changes to the useful lives of the equipment. Recommended Action: Provide direction to staff on the proposed changes. Finance Committee Meeting Minutes December 10, 2015 Page 6 of 6 Council Member Curry provided a brief report and noted the item is ready for adoption. Discussion followed regarding the City's use of clean fuel. Council Member Curry explained the use of alternative fuels. Council Member Curry opened public comments. Jim Mosher noted that the use of alternative fuels is not mandatory. Council Member Curry closed public comments. Mayor Pro Tem Dixon moved, and Committee Member Gorczyca seconded, to forward the matter on to City Council. The motion carried, unanimously. In reply to Mayor Pro Tem Dixon's inquiry, City Manager Kiff reported that staff will be providing year-end closing results and an ERP update in January as well as an investment review. VI. ADJOURNMENT The Finance Committee adjourned at 5:50 p.m. to the next regular meeting of the Finance Committee on January 14, 2016, at 4:00 p.m. Filed with these minutes are copies of all materials distributed at the meeting. The agenda for the Regular Meeting was posted on December 3, 2015, at 8:32 p.m., in the binder and on the City Hall Electronic Board located in the entrance of the Council Chambers at 100 Civic Center Drive. Attest: ___________________________________ _____________________ Keith Curry, Chair Date Finance Committee Chair CITY OF NEWPORT BEACH FINANCE COMMITTEE STAFF REPORT Agenda Item No. 5A January 14, 2016 TO: HONORABLE CHAIR AND MEMBERS OF THE COMMITTEE FROM: Finance Department Dan Matusiewicz, Finance Director (949) 644-3123 or danm@newportbeachca.gov SUBJECT: BI-ANNUAL INVESTMENT PORTFOLIO REVIEW EXECUTIVE SUMMARY The purpose of this memorandum is to review current market conditions and report on the performance of the City’s investment portfolio relative to the City’s investment objectives. The report includes all invested City funds. All investments are in compliance with California Government Code and the City’s adopted Statement of Investment Policy. DISCUSSION Guided by Council Policy F-1 and constrained by California Government Code, the City’s core investment objectives are to provide safety of the invested principal by maintaining a well-diversified, high-quality portfolio of liquid assets while earning a market rate of return commensurate with the City’s conservative risk profile. California State Code Section 53600.5 mandates that the City Treasurer shall follow three objectives when investing, reinvesting, purchasing, acquiring, exchanging, selling, or managing public funds. The primary objective of the City Treasurer shall be to safeguard the principal of the funds under its control. The secondary objective shall be to meet the liquidity needs of the City. The third objective shall be to achieve a return on the funds under his or her control. Current Market Conditions Interest Rates On December 16, 2015, the Federal Open Market Committee (FOMC) set a new target range for the federal funds rate (0.25% to 0.50%). This is a 0.25% increase from the previous range (0.00% to 0.25%), which was set exactly seven years earlier on December 16, 2008. The Federal Reserve (Fed) also raised by 0.25% the interest rate it Bi-Annual Investment Portfolio Review January 14, 2016 Page 2 pays banks on excess reserves deposited with the Fed to 0.50%. The increase in the target federal funds rate was similar to the first increase in each of the last three tightening cycles. Those past cycles resulted in cumulative increases of 1.75% to 4.25% over the succeeding 18 to 24 months. However, Fed governors have urged investors not to look to history for guidance. In the past three tightening cycles, the end- point was 3.75% to 5.25%. Overall, the Fed is proceeding with caution as it begins to normalize monetary policy in a slow and deliberate manner. Most market economists currently forecast a rate of only 1.25% to 1.50% two years from now. Since the end of the third quarter, Treasury interest rates moved higher across the yield curve, but with greater change in shorter maturities, which comprise most of the City’s holdings. The City’s average portfolio duration is approximately 1.76 years as of December 31, 2015. We anticipate that the current trends in interest rates will continue with shorter interest rates remaining under greater pressure to move higher compared to those with longer maturities. Sharp increases in yield will have a two-fold impact on the City’s portfolio including increased investment in come and decreased market value of existing holdings. It is important to note that unrealized losses due to market fluctuations, will remain unrealized provided the security is held to maturity. Gross Domestic Product (GDP) Real gross domestic product – the value of the goods and services produced by the nation's economy less the value of the goods and services used up in production, adjusted for price changes – increased at an annual rate of 2.0% in the third quarter of 2015, according to the "third" estimate released by the Bureau of Economic Analysis. In the second quarter, real GDP increased 3.9%. The increase in real GDP in the third quarter primarily reflected positive contributions from personal consumption expenditures (PCE), nonresidential fixed investment, state and local government Bi-Annual Investment Portfolio Review January 14, 2016 Page 3 spending, residential fixed investment, and exports that were partly offset by a negative contribution from private inventory investment. Additionally, US GDP increased both on a quarter-over-quarter and a year-over-year basis. Labor Market The month of November showed continued improvement in the US labor market. Non- farm payrolls increased 211,000. This exceeded a forecasted increase of 200,000. September and October payrolls also had a combined upward revision of 35,000. Bi-Annual Investment Portfolio Review January 14, 2016 Page 4 November’s unemployment rate remained unchanged at 5.0%. However, November’s underemployment rate slightly increased to 9.9% from 9.8%. Portfolio Overview The City’s strategy will continue to focus on working with its investment advisors to invest in high quality fixed income securities consistent with the City’s investment policy and the California Government Code. The City will also seek to identify value from among the full range of investment options, while ensuring the portfolio continues to be well diversified. The City’s cash, excluding bond proceeds, is pooled for investment purposes. As of December 31, 2015, invested funds totaled over $219 million. These investments are assets belonging to the City Newport Beach, which include the General Fund, special revenue funds, internal service funds, the enterprise funds (i.e., Water and Wastewater) as well as various non-major funds. Short-Term Portfolio (Liquidity) The City uses a combination of demand deposit accounts (DDA) and the Local Agency Investment Fund (LAIF) in its short-term portfolio to provide sufficient liquidity to meet its operating requirements. At December 31, 2015, the city maintained in excess of $42 million in its short-term portfolio. Municipal deposits in DDA accounts are 110 percent collateralized by bank assets, and the City currently receives a compensating balance credit against bank fees at a rate of 0.44%. The average investment life of the LAIF fund was 210 days on September 30, 2015. The average effective yield was 0.32%. LAIF reports on its performance quarterly. Bi-Annual Investment Portfolio Review January 14, 2016 Page 5 Medium-Term Portfolio Funds that are unlikely to be spent in the near future are kept in a medium-term portfolio consisting of over $169 million that is actively managed by two individual investment advisors in accordance with all applicable City policies and codes, State statutes, and Federal regulations. The City’s entire investment portfolio of over $219 million as of December 31, 2015, is summarized in the figure below. Bi-Annual Investment Portfolio Review January 14, 2016 Page 6 Safety The City’s Medium-Term portfolio is comprised of broadly diversified, high quality, marketable securities with an average maturity of approximately 1.8 years. Risk characteristics including concentration by security type, market sector, issuer concentration, credit rating and investment duration are summarized below. The Treasury report in its entirety is available at www.newportbeachca.gov/treasury The City’s investment portfolio is structured to have risk and return characteristics similar to that of the City’s benchmark, the Merrill Lynch 1-3 Year Treasury Index. The City’s medium-term portfolio average annual total return for the twelve months ending December 31, 2015, was 0.73%, as compared to the City’s performance-measuring benchmark return of 0.54%. The spread over the index return was generally achieved by the City’s willingness to purchase high quality corporate bonds. Bi-Annual Investment Portfolio Review January 14, 2016 Page 7 Total Return The illustration below demonstrates that “Total Return” is comprised of two elements, “Price Return” and “Income Return.” Price return is the rate of the total return generated by capital appreciation due to changes in the market price of an asset. Income return represents the rate of the total return generated by the income from the stated interest rate on the bond. Since bond price moves inversely to yield, as interest rates rise the unrealized price return suffers, which in turn impacts total return. This is evidenced by the trailing month, prior month, and trailing quarter price and total returns below. As mentioned previously, one cause of these declines is the Federal Reserve’s 0.25% interest rate increase on December 16. The upside is that if interest rates continue to rise, as we expect it will do gradually, so will the income from the portfolio. *Periods less than 1 year were annualized for ease of comparison. Bi-Annual Investment Portfolio Review January 14, 2016 Page 8 Comparative Performance We use two benchmarks to measure performance. Our first benchmark is the Merrill Lynch 1-3 Year Treasury Index. Our second benchmark is the Merrill Lynch 1-3 Year Government/Corporate A Rated and Above Index. While these benchmarks are used for comparison purposes, the composition of the City’s portfolio does have differences from the benchmark portfolios. The City’s investment advisors believe that these differences add value to the City’s portfolio in the long run. For example, while the first benchmark is composed exclusively of US Treasuries, the City’s portfolio also contains other types of securities. As mentioned previously, the high quality corporate bonds in the City’s portfolio allowed it to outperform the benchmark for the twelve months ending December 31, 2015. The performance of our portfolio compares favorably to both our benchmarks in all categories as of January 10, 2016, as demonstrated below. Prepared by: Submitted by: /s/Jeremiah Lim /s/Dan Matusiewicz Jeremiah Lim Dan Matusiewicz Accountant Finance Director City of Newport Beach Fourth Quarter 2015 Review of Portfolio January 14, 2016 Sarah Meacham, Director PFM Asset Management LLC 601 S. Figueroa Street, Suite 4500 Los Angeles, CA 90017 213-489-4075 © PFM Asset Management LLC 0.00% 0.20% 0.40% 0.60% 0.80% 1.00% 1.20% Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 FOMC raises fed funds target rate FOMC statement hints at increase Favorable jobs report in November U.S. Treasury Yields Experience Volatility Source: Bloomberg. 2-Year U.S. Treasury Yield December 31, 2014 – December 31, 2015 •The yield on 2-year Treasuries rose 0.39% in 2015 from 0.66% to 1.05% as the market priced in an expected increase in the fed funds target rate. © PFM Asset Management LLC 1 -0.20% 0.00% 0.20% 0.40% 0.60% 0.80% 1.00% 1.20% 1.40% 1.60% 1.80% 2.00% 3 M 6 M 1 Y 2 Y 3 Y 4 Y 5 Y Yi e l d Maturity December 31, 2014 September 30, 2015 December 31, 2015 Interest Rates Rose in Fourth Quarter 2015 12/31/14 9/30/15 12/31/15 3 Month 0.04% -0.02% 0.17% 6 Month 0.12% 0.07% 0.48% 1 Year 0.22% 0.31% 0.60% 2 Year 0.67% 0.63% 1.05% 3 Year 1.15% 0.96% 1.40% 5 Year 1.65% 1.36% 1.76% U.S. Treasury Yield Curve Source: Bloomberg. © PFM Asset Management LLC 2 •Short-term yields increased in anticipation of the Federal Open Market Committee’s first rate hike. •Intermediate- to long-term yields also increased but to a lesser degree due to low inflation. At Last! An Increase in the Fed Funds Target Rate Source: Federal Reserve. December 16 •Given the economic outlook, and recognizing the time it takes for policy actions to affect future economic outcomes, the Committee decided to raise the target range for the federal funds rate to 0.25 – 0.50%. •A range of recent labor market indicators, including ongoing job gains and declining unemployment, shows further improvement and confirms that underutilization of labor resources has diminished appreciably since early this year. •Inflation has continued to run below the Committee’s 2% longer-run objective, partly reflecting declines in energy prices and in prices of non-energy imports . . . Some survey-based measures of longer-term inflation expectations have edged down . . . [the Committee] is reasonably confident that inflation will rise, over the medium term, to its 2% objective. •Given the economic outlook, and recognizing the time it takes for policy actions to affect future economic outcomes, the Committee decided to raise the target range for the federal funds rate to 0.25 – 0.50% . . . the stance of monetary policy remains accommodative. 3 © PFM Asset Management LLC 2.1% 0.6% 3.9% 2.0% -2% -1% 0% 1% 2% 3% 4% 5% Q111Q211Q311Q411Q112Q212Q312Q412Q113Q213Q313Q413Q114Q214Q314Q414Q115Q215Q315Q415Q116Q216Q316Qo Q % C h a n g e ; S e a s o n a l l y A d j u s t e d A n n u a l i z e d R a t e U.S. GDP U.S. Economic Growth Slowed in Third Quarter •U.S. GDP growth slowed to an estimated 2.0% in the third quarter after strong 3.9% growth in the second quarter. •While consumer spending showed continued strength, declines in inventory growth and a widening trade deficit detracted from GDP. Source: Bureau of Economic Analysis; Bloomberg. Bloomberg Survey of Economists 4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2011 2012 2013 2014 2015 2016 © PFM Asset Management LLC 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 0K 100K 200K 300K 400K 500K Dec-10 Jun-11 Dec-11 Jun-12 Dec-12 Jun-13 Dec-13 Jun-14 Dec-14 Jun-15 Dec-15 Un e m p l o y m e n t R a t e Ch a n g e i n N o n -Fa r m P a y r o l l s Monthly Change in Non-Farm Payrolls and Unemployment Rate Change in Non-Farm Payrolls (left axis)Unemployment Rate (right axis) U.S. Job Market Close to Full Employment •The U.S. labor market added an average 265,000 jobs per month in 2015. •The unemployment rate ended 2015 at 5%. Source: Bureau of Labor Statistics, Bloomberg. Unemployment Rate: 5.0% 5 © PFM Asset Management LLC 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% Nov-05 Nov-06 Nov-07 Nov-08 Nov-09 Nov-10 Nov-11 Nov-12 Nov-13 Nov-14 Nov-15 Yo Y % C h a n g e Inflation Measures Consumer Price Index vs Personal Consumption Expenditures Core CPI Core PCE Fed's Long Term Inflation Target Inflation Remains Muted •The personal consumption expenditures (PCE) price index, the Fed’s preferred gauge of core inflation, continues to undershoot the 2% target, advancing at just 1.3% year-over-year through October. •Falling oil prices and lack of wage pressure are helping keep inflation low. Source: Bloomberg. © PFM Asset Management LLC 6 •The most significant event in the fourth quarter was the FOMC hike in December. •A conservative duration bias mitigated rising rates on the market value of the City’s portfolio and aided the City’s performance relative to the index. •Corporate spreads tightened in the fourth quarter resulting in their significant outperformance over other asset classes such as Treasuries and Federal Agencies. •Federal Agency spreads fluctuated during the quarter and ended the year toward the narrower end of the range. –As Federal Agency spreads narrowed, we swapped Federal Agency securities for a combination of negotiable CDs as well as Treasury and corporate securities with greater return potential. Fourth Quarter 2015 Portfolio Recap © PFM Asset Management LLC 7 •To capitalize on rising yields, as rates rose throughout the quarter we strategically extended portfolio duration by investing in a combination of U.S. Treasury and corporate securities along with negotiable certificates of deposit in the 2-3 year range. 0.30% 0.50% 0.70% 0.90% 1.10% 1.30% 1.50% 1.70% 1.90% Se p - 3 0 Oc t - 0 3 Oc t - 0 6 Oc t - 0 9 Oc t - 1 2 Oc t - 1 5 Oc t - 1 8 Oc t - 2 1 Oc t - 2 4 Oc t - 2 7 Oc t - 3 0 No v - 0 2 No v - 0 5 No v - 0 8 No v - 1 1 No v - 1 4 No v - 1 7 No v - 2 0 No v - 2 3 No v - 2 6 No v - 2 9 De c - 0 2 De c - 0 5 De c - 0 8 De c - 1 1 De c - 1 4 De c - 1 7 De c - 2 0 De c - 2 3 De c - 2 6 De c - 2 9 PFMAM Extended Portfolio Duration as Rates Rose 2-Year U.S. Treasury Yields September 30, 2015 – December 31, 2015 Extension Trades U.S. Treasuries Corporate Notes Negotiable CDs Source: Bloomberg. 8 © PFM Asset Management LLC Summary of Quarterly Changes in Portfolio Composition 9 © PFM Asset Management LLC 38% 31% 24% 23% 37% 28% 32% 35% 36% 20% 9% 8% 9% 9% 13% 25% 27% 30% 30% 29% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 4Q14 1Q15 2Q15 3Q15 4Q15 2015 Quarterly Sector Allocation Money Market Fund Corporate Notes California Municipal Obligations Negotiable CDs Commercial Paper Federal Agencies U.S. Treasuries •Since inception, the portfolio has outperformed the benchmark by an annual average of 0.24%. Notes: •Performance on trade-date basis, gross (i.e., before fees), in accordance with the CFA Institute’s Global Investment Performance Standards (GIPS). •Bank of America Merrill Lynch (BAML) Indices provided by Bloomberg Financial Markets. •Money fund included in the performance calculation but excluded from yield and duration computations. •Quarterly returns are presented on an unannualized basis. Performance numbers for periods greater than one year are presented on an annualized basis. •Inception date is first quarter 1993. Duration (years) Past Quarter Past Year Past 3 Years Past 5 Years Since Inception City of Newport Beach 1.75 (0.23%) 0.79% 0.70% 0.97% 4.09% BAML 1-3 Year U.S. Treasury Index 1.80 (0.44%) 0.54% 0.51% 0.70% 3.85% Total Returns for periods ending December 31, 2015 Portfolio Total Return 10 © PFM Asset Management LLC Portfolio Earnings Analysis Notes: •Performance on trade-date basis, gross (i.e., before fees) in accordance with the CFA Institute’s Global Investment Performance Standards (GIPS). •Quarterly returns are presented on an unannualized basis. Q1 2015 Q2 2015 Q3 2015 Q4 2015 Past Year Total Interest and Realized Gain/Loss 153,378 192,460 225,704 217,864 789,406 + Change in market value 266,199 -99,158 68,479 -412,550 -177,030 = Total Return $ 419,577 93,302 294,183 -194,686 612,376 Total Return % 0.55% 0.12% 0.35% -0.23% 0.79% Portfolio Earnings Analysis As of December 31, 3015 11 © PFM Asset Management LLC •Most sector index returns posted a negative fourth quarter due to a swift rise in market yields but ended the full year with decent returns. Fixed-Income Index Returns 12 © PFM Asset Management LLC 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Full Year U.S. Treasury 0.52% 0.15% 0.31% (0.44%) 0.54% Agency 0.54% 0.16% 0.36% (0.37%) 0.69% Corp A-AAA 0.77% 0.08% 0.36% (0.05%) 1.16% Municipals 0.26% 0.01% 0.57% (0.08%) 0.76% 2015 Total Returns 1-3 Year Indices Source: BofA Merrill Lynch Indices. Returns for greater than one year are annualized. Security Type Market Value as of December 31, 2015 Percent of Portfolio % Change vs. December 31, 2014 Permitted by Policy In Compliance U.S. Treasury $31,504,585 36% -1% 100% Federal Agencies $17,210,012 20% -7% 100% Negotiable Certificates of Deposit $10,941,232 13% +4% 30% California Municipal Obligations $532,684 1% - 30% Corporate Notes $24,705,842 29% +4% 30% Money Market Fund $92,105 <1% - 20% Total $84,986,460 100% Portfolio Holdings in Compliance with California Code and City’s Investment Policy 13 © PFM Asset Management LLC •The City’s portfolio is well diversified by both sector and issuer. AAA 2% AA 66% A 14% A-1+ (Short- term) 4% A-1 (Short- term) 9% Not Rated 4% Money Market Fund <1% City’s Holdings Maintain Highest Credit Quality Notes: •As of December 31, 2015. •Standard & Poor's Ratings. •“Not Rated” securities include California Earthquake Authority, which is rated A3 by Moody’s, and FAMCA which is not required to be rated. Issuer Distribution U.S. Treasury 37% FNMA 5% FHLB 4% FHLMC 7% Credit Quality Money Market Fund <1% Corporate Issuers Bank of New York 3% Wells Fargo 3% General Electric 3% IBM 2% Chevron 2% Apple 2% Cisco Systems 2% JP Morgan Chase 2% Exxon Mobil 2% Toyota Motor CC 1% Deere and Company 1% American Honda Finance 1% Pfizer 1% American Express Credit Corp. 1% PepsiCo 1% Disney 1% ConocoPhillips <1% Wal-Mart Stores <1% 14 © PFM Asset Management LLC Negotiable CD Issuers HSBC Bank USA 3% BMO Harris Bank 3% Svenska Handelsbanken NY 2% Canadian Imperial Bank NY 2% Bank of Nova Scotia Houston 1% Rabobank Nederland NV NY 1% Goldman Sachs Bank 1% Municipal Issuers University of California <1% California Earthquake Authority <1% FAMCA 4% •The portfolio’s duration and maturity structure are positioned to closely match that of the benchmark in order to capitalize on the steepness of the yield curve. Portfolio Holdings Are Diversified by Maturity Note: Callable securities in portfolio are included in the maturity distribution analysis to their stated maturity date, although they may be called prior to maturity. 15 © PFM Asset Management LLC 1% 2% 55% 42% 0% 0% 0% 4% 55% 41% 0% 0% 0% 20% 40% 60% Under 6 Months 6 - 12 Months 1 - 2 Years 2 - 3 Years 3 - 4 Years 4 - 5 Years Pe r c e n t a g e o f T o t a l P o r t f o l i o City of Newport Beach Merrill Lynch 1-3 Year Treasury Index Maturity Distribution As of December 31, 2015 •We expect the U.S. economy will continue to expand at a moderate pace, bolstered by gains in the job market and consumer spending. However, the global economy faces significant headwinds, particularly in emerging market economies. •The Federal Reserve has signaled that future rate increases will be gradual and likely tied to “actual progress” towards the Fed’s inflation target. •We will continue to manage duration with a conservative bias in an effort to protect the market value of the portfolio in light of the bias toward higher rates by the end of 2016. •The corporate sector continues to add significant value to the City’s portfolio. We will maintain the portfolio’s allocation near the upper end of the City’s policy limits to maximize the benefit from this sector. We will continue to carefully monitor the impact of global growth concerns on the corporate sector as a whole and on specific issuers. •We will continue to monitor the yield relationship between Federal Agency and Treasury securities, looking to add Federal Agencies when their additional yields over Treasuries offers value. 2016 Investment Outlook and Strategy © PFM Asset Management LLC 16 Make a few notes to bring regarding emerging market economies For the Month Ending December 31, 2015Managed Account Detail of Securities Held CITY OF NEWPORT BEACH, CALIFORNIA Dated Date/Coupon/Maturity CUSIP Rating Rating Date Date Cost at Cost Interest Cost Value Security Type/Description S&P Moody's Original YTM Accrued Amortized MarketTrade Settle Par U.S. Treasury Bond / Note US TREASURY NOTES DTD 01/31/2012 0.875% 01/31/2017 1,200,093.60 1,203,458.30 4,394.02 1,206,140.63 02/27/1502/26/15AaaAA+ 1,200,000.00 912828SC5 0.61 US TREASURY NOTES DTD 01/31/2012 0.875% 01/31/2017 1,220,095.16 1,221,015.78 4,467.26 1,222,335.16 07/31/1407/29/14AaaAA+ 1,220,000.00 912828SC5 0.80 US TREASURY NOTES DTD 01/31/2012 0.875% 01/31/2017 1,275,099.45 1,279,060.99 4,668.65 1,281,922.85 03/27/1503/26/15AaaAA+ 1,275,000.00 912828SC5 0.58 US TREASURY NOTES DTD 02/29/2012 0.875% 02/28/2017 2,000,782.00 2,003,464.44 5,913.46 2,008,125.00 06/03/1406/02/14AaaAA+ 2,000,000.00 912828SJ0 0.73 US TREASURY NOTES DTD 03/31/2012 1.000% 03/31/2017 771,202.74 771,054.91 1,956.56 771,894.92 12/30/1412/24/14AaaAA+ 770,000.00 912828SM3 0.89 US TREASURY NOTES DTD 07/02/2012 0.750% 06/30/2017 1,246,093.75 1,249,282.64 25.76 1,248,730.47 11/03/1410/30/14AaaAA+ 1,250,000.00 912828TB6 0.79 US TREASURY NOTES DTD 07/02/2012 0.750% 06/30/2017 1,495,312.50 1,496,035.94 30.91 1,493,261.72 12/10/1412/05/14AaaAA+ 1,500,000.00 912828TB6 0.93 US TREASURY NOTES DTD 08/31/2012 0.625% 08/31/2017 635,900.16 635,914.16 1,351.65 632,700.00 09/04/1409/02/14AaaAA+ 640,000.00 912828TM2 1.01 US TREASURY NOTES DTD 11/30/2012 0.625% 11/30/2017 1,209,897.18 1,214,246.09 666.67 1,211,040.63 12/03/1412/01/14AaaAA+ 1,220,000.00 912828UA6 0.87 US TREASURY NOTES DTD 11/30/2010 2.250% 11/30/2017 1,354,294.43 1,359,707.96 2,606.56 1,373,445.31 03/27/1503/26/15AaaAA+ 1,325,000.00 912828PK0 0.87 US TREASURY NOTES DTD 01/31/2013 0.875% 01/31/2018 2,014,875.00 2,022,930.09 7,414.91 2,022,785.16 11/09/1511/05/15AaaAA+ 2,025,000.00 912828UJ7 0.92 US TREASURY NOTES DTD 05/15/2015 1.000% 05/15/2018 2,537,349.45 2,538,273.03 3,292.58 2,538,246.09 12/30/1512/28/15AaaAA+ 2,550,000.00 912828XA3 1.20 US TREASURY NOTES DTD 07/01/2013 1.375% 06/30/2018 998,925.28 1,007,147.60 37.59 1,008,175.98 10/14/1510/08/15AaaAA+ 995,000.00 912828VK3 0.88 US TREASURY NOTES DTD 07/31/2013 1.375% 07/31/2018 2,123,096.22 2,138,418.10 12,169.87 2,144,494.33 04/27/1504/24/15AaaAA+ 2,115,000.00 912828VQ0 0.94 For the Month Ending December 31, 2015Managed Account Detail of Securities Held CITY OF NEWPORT BEACH, CALIFORNIA Dated Date/Coupon/Maturity CUSIP Rating Rating Date Date Cost at Cost Interest Cost Value Security Type/Description S&P Moody's Original YTM Accrued Amortized MarketTrade Settle Par U.S. Treasury Bond / Note US TREASURY NOTES DTD 08/01/2011 2.250% 07/31/2018 3,457,936.78 3,467,373.96 31,731.11 3,485,448.83 07/06/1507/01/15AaaAA+ 3,370,000.00 912828QY9 1.11 US TREASURY NOTES DTD 09/15/2015 1.000% 09/15/2018 5,858,056.90 5,876,241.70 17,505.49 5,875,570.31 12/04/1512/02/15AaaAA+ 5,900,000.00 912828L40 1.15 US TREASURY NOTES DTD 09/30/2011 1.375% 09/30/2018 1,003,125.00 1,011,745.12 3,493.85 1,012,656.25 10/14/1510/08/15AaaAA+ 1,000,000.00 912828RH5 0.94 US TREASURY NOTES DTD 10/31/2013 1.250% 10/31/2018 998,594.00 1,002,825.75 2,129.12 1,002,968.75 11/09/1511/05/15AaaAA+ 1,000,000.00 912828WD8 1.15 103,856.02 31,400,729.60 31,498,196.56 0.96 31,539,942.39 31,355,000.00 Security Type Sub-Total Municipal Bond / Note UNIV OF CAL TXBL REV BONDS DTD 10/02/2013 0.907% 05/15/2016 275,371.25 275,000.00 318.71 275,000.00 10/02/1309/26/13Aa2AA 275,000.00 91412GSX4 0.91 CA EARTHQUAKE AUTH TXBL REV BONDS DTD 11/06/2014 1.194% 07/01/2016 255,471.75 255,000.00 1,522.35 255,000.00 11/06/1410/29/14A3NR 255,000.00 13017HAC0 1.19 1,841.06 530,843.00 530,000.00 1.05 530,000.00 530,000.00 Security Type Sub-Total Federal Agency Bond / Note FHLB NOTES DTD 11/17/2014 0.625% 11/23/2016 798,432.80 800,407.52 527.78 800,752.00 03/27/1503/27/15AaaAA+ 800,000.00 3130A3J70 0.57 FHLMC REFERENCE NOTE DTD 01/16/2015 0.500% 01/27/2017 1,374,446.88 1,378,721.47 2,951.67 1,377,585.00 01/16/1501/15/15AaaAA+ 1,380,000.00 3137EADU0 0.59 FANNIE MAE GLOBAL NOTES DTD 01/09/2012 1.250% 01/30/2017 1,284,800.00 1,288,404.84 6,711.11 1,292,595.20 06/16/1506/15/15AaaAA+ 1,280,000.00 3135G0GY3 0.64 FHLB GLOBAL NOTES (CALLABLE) DTD 03/24/2015 0.840% 03/24/2017 1,497,792.00 1,500,000.00 3,395.00 1,500,000.00 03/24/1503/17/15AaaAA+ 1,500,000.00 3130A4QV7 0.84 FNMA NOTES DTD 03/10/2014 0.750% 04/20/2017 907,420.15 910,020.28 1,346.04 910,027.30 06/16/1506/15/15AaaAA+ 910,000.00 3135G0ZB2 0.75 For the Month Ending December 31, 2015Managed Account Detail of Securities Held CITY OF NEWPORT BEACH, CALIFORNIA Dated Date/Coupon/Maturity CUSIP Rating Rating Date Date Cost at Cost Interest Cost Value Security Type/Description S&P Moody's Original YTM Accrued Amortized MarketTrade Settle Par Federal Agency Bond / Note FHLB GLOBAL NOTES DTD 05/15/2015 0.625% 05/30/2017 457,847.20 459,734.94 247.57 459,618.20 05/15/1505/14/15AaaAA+ 460,000.00 3130A5EP0 0.67 FNMA GLOBAL BENCHMARK NOTES DTD 06/08/2007 5.375% 06/12/2017 971,800.46 975,622.94 2,595.68 992,948.85 07/31/1507/30/15AaaAA+ 915,000.00 31398ADM1 0.76 FREDDIE MAC GLOBAL NOTES DTD 06/25/2012 1.000% 07/28/2017 529,118.61 529,981.24 2,252.50 529,964.49 08/14/1408/12/14AaaAA+ 530,000.00 3137EADJ5 1.00 FREDDIE MAC GLOBAL NOTES DTD 06/25/2012 1.000% 07/28/2017 3,848,589.14 3,863,773.52 16,383.75 3,868,070.80 03/20/1503/19/15AaaAA+ 3,855,000.00 3137EADJ5 0.85 FAMCA NOTES DTD 08/23/2012 1.030% 08/23/2017 3,562,276.34 3,574,829.88 13,055.82 3,593,947.80 09/25/1209/24/12NRNR 3,565,000.00 31315PSX8 0.86 FHLB NOTES DTD 07/24/2015 0.750% 08/28/2017 945,236.70 948,311.26 2,434.38 947,872.00 07/24/1507/23/15AaaAA+ 950,000.00 3130A62S5 0.86 FNMA NOTES DTD 08/25/2014 1.000% 09/27/2017 977,791.08 983,696.67 2,558.89 985,105.80 04/30/1504/28/15AaaAA+ 980,000.00 3135G0ZL0 0.78 54,460.19 17,155,551.36 17,213,504.56 0.79 17,258,487.44 17,125,000.00 Security Type Sub-Total Corporate Note PFIZER INC GLOBAL NOTES DTD 06/03/2013 0.900% 01/15/2017 998,036.00 999,534.29 4,150.00 998,400.00 06/03/1305/28/13A1AA 1,000,000.00 717081DD2 0.95 PEPSICO CORP NOTES DTD 02/28/2014 0.950% 02/22/2017 743,597.17 744,671.36 2,536.10 744,150.70 02/28/1402/25/14A1A 745,000.00 713448CL0 0.99 WAL-MART STORES INC CORP NOTES DTD 04/22/2014 1.000% 04/21/2017 255,186.92 254,983.19 495.83 254,961.75 04/22/1404/15/14Aa2AA 255,000.00 931142DN0 1.01 APPLE INC CORP NOTE DTD 05/06/2014 1.050% 05/05/2017 675,396.23 674,838.18 1,082.81 674,642.25 05/06/1404/29/14Aa1AA+ 675,000.00 037833AM2 1.07 APPLE INC CORP NOTE DTD 05/06/2014 1.050% 05/05/2017 1,000,587.00 999,421.08 1,604.17 998,753.58 06/06/1405/06/14Aa1AA+ 1,000,000.00 037833AM2 1.09 TOYOTA MOTOR CREDIT CORP NOTE DTD 05/16/2014 1.125% 05/16/2017 424,285.58 424,895.82 597.66 424,774.75 05/16/1405/13/14Aa3AA- 425,000.00 89236TBH7 1.14 For the Month Ending December 31, 2015Managed Account Detail of Securities Held CITY OF NEWPORT BEACH, CALIFORNIA Dated Date/Coupon/Maturity CUSIP Rating Rating Date Date Cost at Cost Interest Cost Value Security Type/Description S&P Moody's Original YTM Accrued Amortized MarketTrade Settle Par Corporate Note THE WALT DISNEY CORPORATION CORP NOTE DTD 06/02/2014 0.875% 05/30/2017 518,978.20 519,554.81 391.81 519,064.00 06/02/1405/28/14A2A 520,000.00 25468PCZ7 0.94 BANK OF NEW YORK MELLON CORPORATE NOTES DTD 05/21/2012 1.969% 06/20/2017 1,005,441.00 1,013,229.02 601.64 1,027,230.00 06/02/1405/29/14A1A 1,000,000.00 064058AA8 1.06 AMERICAN HONDA FINANCE GLOBAL NOTE DTD 07/15/2014 1.200% 07/14/2017 233,962.95 234,828.64 1,308.17 234,668.65 07/15/1407/08/14A1A+ 235,000.00 02665WAF8 1.25 WELLS FARGO & COMPANY CORP NOTES DTD 09/09/2014 1.400% 09/08/2017 499,429.00 499,718.96 2,197.22 499,505.00 09/09/1409/02/14A2A 500,000.00 94974BGB0 1.43 WELLS FARGO & COMPANY CORP NOTES DTD 09/09/2014 1.400% 09/08/2017 789,097.82 791,942.50 3,471.61 792,488.50 07/07/1507/01/15A2A 790,000.00 94974BGB0 1.25 CHEVRON CORP NOTE DTD 11/18/2014 1.345% 11/15/2017 528,332.09 530,000.00 910.86 530,000.00 11/18/1411/10/14Aa1AA 530,000.00 166764AL4 1.35 TOYOTA MOTOR CREDIT CORP NOTE DTD 01/12/2015 1.450% 01/12/2018 414,210.67 414,612.42 2,824.88 414,431.45 01/12/1501/07/15Aa3AA- 415,000.00 89236TCA1 1.50 WACHOVIA CORP NOTES DTD 01/31/2008 5.750% 02/01/2018 804,667.05 807,967.18 17,848.96 823,828.45 06/18/1506/15/15A2A 745,000.00 92976WBH8 1.61 IBM CORP NOTES DTD 02/06/2015 1.125% 02/06/2018 1,812,779.80 1,821,087.75 8,269.53 1,819,433.75 02/06/1502/03/15Aa3AA- 1,825,000.00 459200HZ7 1.23 JP MORGAN CHASE CORP NOTES (CALLABLE) DTD 03/02/2015 1.700% 03/01/2018 1,627,071.89 1,634,690.36 9,265.00 1,634,574.90 03/02/1502/25/15A3A- 1,635,000.00 46623EKD0 1.71 CHEVRON CORP NOTES DTD 03/03/2015 1.365% 03/02/2018 1,185,437.61 1,192,053.02 5,391.94 1,191,331.35 06/18/1506/15/15Aa1AA 1,195,000.00 166764AV2 1.48 EXXON MOBIL CORP NOTES DTD 03/06/2015 1.305% 03/06/2018 1,502,608.56 1,505,000.00 6,273.97 1,505,000.00 03/06/1503/04/15AaaAAA 1,505,000.00 30231GAL6 1.31 AMERICAN HONDA FINANCE CORP NOTES DTD 03/13/2015 1.500% 03/13/2018 804,061.08 809,199.32 3,645.00 808,914.60 03/13/1503/10/15A1A+ 810,000.00 02665WAT8 1.55 For the Month Ending December 31, 2015Managed Account Detail of Securities Held CITY OF NEWPORT BEACH, CALIFORNIA Dated Date/Coupon/Maturity CUSIP Rating Rating Date Date Cost at Cost Interest Cost Value Security Type/Description S&P Moody's Original YTM Accrued Amortized MarketTrade Settle Par Corporate Note GENERAL ELEC CAP CORP GLOBAL NOTES DTD 04/02/2013 1.625% 04/02/2018 1,003,265.00 1,002,402.22 4,017.36 1,002,900.00 07/07/1507/01/15A1AA+ 1,000,000.00 36962G6W9 1.52 GENERAL ELEC CAP CORP GLOBAL NOTES DTD 04/02/2013 1.625% 04/02/2018 1,083,526.20 1,084,270.29 4,338.75 1,085,259.60 06/18/1506/15/15A1AA+ 1,080,000.00 36962G6W9 1.45 PEPSICO, INC CORP NOTES DTD 04/30/2015 1.250% 04/30/2018 244,106.24 244,977.07 518.92 244,970.60 04/30/1504/27/15A1A 245,000.00 713448CR7 1.25 CONOCOPHILLIPS COMPANY CORP NOTE DTD 05/18/2015 1.500% 05/15/2018 333,768.48 339,967.38 651.67 339,959.20 05/18/1505/13/15A2A 340,000.00 20826FAL0 1.50 BANK OF NEW YORK MELLON CORP (CALLABLE) DTD 05/29/2015 1.600% 05/22/2018 1,544,203.00 1,549,886.08 2,686.67 1,549,860.50 05/29/1505/22/15A1A 1,550,000.00 06406HDB2 1.60 CISCO SYSTEMS INC CORP NOTE DTD 06/17/2015 1.650% 06/15/2018 1,676,978.93 1,669,765.67 1,224.67 1,669,716.10 06/17/1506/10/15A1AA- 1,670,000.00 17275RAU6 1.66 TOYOTA MOTOR CREDIT CORP DTD 07/13/2015 1.550% 07/13/2018 548,700.90 549,603.80 3,978.33 549,532.50 07/13/1507/08/15Aa3AA- 550,000.00 89236TCP8 1.58 JOHN DEERE CAPITAL CORP NOTE DTD 09/11/2015 1.750% 08/10/2018 1,350,351.00 1,348,808.15 7,218.75 1,348,677.00 09/11/1509/08/15A2A 1,350,000.00 24422ETA7 1.78 AMERICAN EXP CREDIT CORP NT (CALLABLE) DTD 11/05/2015 1.875% 11/05/2018 997,357.00 999,914.56 2,916.67 999,910.00 11/05/1510/29/15A2A- 1,000,000.00 0258M0DZ9 1.88 100,418.95 24,605,423.37 24,661,823.12 1.41 24,686,939.18 24,590,000.00 Security Type Sub-Total Certificate of Deposit GOLDMAN SACHS BANK USA CD DTD 08/19/2014 0.900% 08/12/2016 999,155.00 1,000,000.00 3,328.77 1,000,000.00 08/19/1408/14/14P-1A-1 1,000,000.00 38147J2L5 0.90 CANADIAN IMPERIAL BANK NY YCD DTD 04/10/2015 1.010% 04/06/2017 1,940,591.25 1,950,000.00 4,650.21 1,950,000.00 04/10/1504/06/15P-1A-1 1,950,000.00 13606JYY9 1.01 RABOBANK NEDERLAND NV CERT DEPOS DTD 04/27/2015 1.070% 04/21/2017 1,244,000.00 1,250,000.00 2,600.69 1,250,000.00 04/27/1504/22/15P-1A-1 1,250,000.00 21684BXH2 1.07 For the Month Ending December 31, 2015Managed Account Detail of Securities Held CITY OF NEWPORT BEACH, CALIFORNIA Dated Date/Coupon/Maturity CUSIP Rating Rating Date Date Cost at Cost Interest Cost Value Security Type/Description S&P Moody's Original YTM Accrued Amortized MarketTrade Settle Par Certificate of Deposit BMO HARRIS BANK NA CD DTD 10/23/2015 1.000% 04/24/2017 2,094,267.00 2,100,000.00 4,083.33 2,100,000.00 10/23/1510/22/15Aa3A-1 2,100,000.00 05574BFW5 1.01 SVENSKA HANDELSBANKEN NY FLT CERT DEPOS DTD 11/24/2015 0.832% 08/24/2017 1,249,268.75 1,250,000.00 1,097.91 1,250,000.00 11/24/1511/20/15P-1A-1+ 1,250,000.00 86958DH54 0.84 BANK OF NOVA SCOTIA HOUSTON YCD DTD 11/09/2015 1.560% 11/06/2017 1,298,329.50 1,300,000.00 2,929.33 1,300,000.00 11/09/1511/06/15P-1A-1 1,300,000.00 06417GAS7 1.55 HSBC BANK USA NA FLOATING CERT DEPOS DTD 11/18/2015 0.954% 11/17/2017 2,094,486.73 2,095,000.00 2,443.03 2,095,000.00 11/18/1511/17/15P-1A-1+ 2,095,000.00 40428AR41 0.97 21,133.27 10,920,098.23 10,945,000.00 1.04 10,945,000.00 10,945,000.00 Security Type Sub-Total 84,545,000.00 84,960,369.01 1.07 281,709.49 84,848,524.24 84,612,645.56 Managed Account Sub-Total $84,545,000.00 $84,960,369.01 $281,709.49 $84,848,524.24 $84,612,645.56 1.07% $84,894,355.05 $281,709.49 Total Investments Accrued Interest Securities Sub-Total CITY OF NEWPORT BEACH FINANCE COMMITTEE STAFF REPORT Agenda Item No. 5B January 14, 2016 TO: HONORABLE CHAIRMAN AND MEMBERS OF THE COMMITTEE FROM: Finance Department Dan Matusiewicz, Finance Director 949-644-3123, danm@newportbeachca.gov SUBJECT: Implementation of Budget Preparation Framework – Review of Operating Budget, Session 4 SUMMARY: During recent Finance Committee meetings, members discussed pursuing actions for bringing greater transparency and accountability during the annual budget development process. Staff believes that following a proposed budget preparation framework consisting of budget principles, and associated strategies and tactics can be a reliable vehicle for improving the City’s budget process. In furtherance of Budget Framework Tactic T.10.1, the goal of this presentation will be to familiarize members of the Finance Committee with the elements of the Fiscal Year 2015-2016 Public Works Department budget, provide opportunity for questions, and to gain clarity in the funding allocations for departmental programs. RECOMMENDED ACTION: In furtherance of Budget Framework Tactic T.10.1, review, ask questions, and provide comment relating to the Public Works Department Fiscal Year 2015-2016 operating budget. DISCUSSION: The Finance Committee expressed an interest in having greater involvement in the review of the proposed budget prior to its adoption by the City Council. During the September 16, 2015, Finance Committee meeting, members discussed and agreed to pursue a Budget Preparation Framework for bringing greater transparency and accountability during the annual budget development process. Implementation of Budget Preparation Framework – Review of Operating Budget, Session 4 January 14, 2015 Page 2 The Budget Preparation Framework consists of goals, strategies and associated tactics to facilitate the establishment of priorities, guiding program activities, and allocating resources. Goals or “budget principles” represent statements that identify the broad goals that provide overall direction for the City and serve as a basis for decision making. Strategic objectives are major accomplishments that the City seeks to achieve over a specified period of time to achieve its long term goals. Tactics identify what should be done, that is, outline the specific tasks that must be accomplished to achieve the strategic objectives. Certain members of the Finance Committee expressed a desire to be more involved in the early stages of the budget process, well in advance of the budget adoption by the City Council in May. Budget development is typically well underway by February, the month that the Committee convened its first meeting in 2015. Soliciting Committee input earlier will provide the Finance Committee with a better opportunity to be involved and better understand the proposed budget. Committee Members also requested a year-over-year budget variance analysis to understand the reasons for major increases or decreases. This Public Works budget variance analysis summary can be found in Attachment C. The goal of this presentation will be to familiarize members of the Finance Committee with the elements of the Fiscal Year 2015-2016 Public Works Department departmental budget, provide opportunity for questions, and to gain clarity in the funding allocations for departmental programs. The Public Works section of the Fiscal Year 2015-2016 Performance Plan and Budget Detail can be found in Attachments A and B. The Public Works Department also prepared a “Five Year Operating Budget Overview” and PowerPoint presentation which can be found in Attachments D and E. This agenda item is in furtherance of Budget Framework Tactic T.10.1 and staff will schedule similar Finance Committee presentations covering the operating budgets of other departments over the next few months. Budget Framework Tactic T.10.1: Staff would take the Finance Committee (FC) through a series of three to four “deep dives” into specific budget divisions or programs, with explanations about the Budget Detail and salaries, benefits, contract service accounts, and more. Set aside enough time to do this without anyone feeling rushed. • Have each member of the FC identify 2-3 areas of interest – or questions they want answered before they have a final discussion about the budget – and complete these to general satisfaction prior to having the Council’s spring 2016 budget sessions for FY 16-17. This action will provide members with the context and understanding of the City’s programs in advance of the Fiscal Year 2016-2017 budget process and reinforce an environment of continual process improvement. Implementation of Budget Preparation Framework – Review of Operating Budget, Session 4 January 14, 2015 Page 3 Prepared and Submitted by: /s/ Dan Matusiewicz _____________________________ Dan Matusiewicz Finance Director Attachments: A. Public Works Department Fiscal Year 2015-2016 Operating Budget Performance Plan B. Public Works Department Fiscal Year 2015-2016 Operating Budget Detail C. Public Works Budget Variance Analysis Summary D. Public Works Five Year Operating Budget Overview E. Public Works PowerPoint Presentation ATTACHMENT A Public Works Department Fiscal Year 2015-2016 Operating Budget Performance Plan 130 Department Budgets MISSION STATEMENT Protecting and providing quality public improvements and services. DEPARTMENT OVERVIEW The City of Newport Beach is committed to maintaining a high quality of life by providing essential infrastructure and public facilities. The Department of Public Works is responsible for managing a comprehensive and ambitious improvement program designed to meet the current and future needs of the community and to protect the City’s physical and natural assets. Capital projects include improvements to the City’s roads, intersections, bridges, sidewalks, storm drains, traffic signals, water quality and environmental features, piers, water and sewer systems, street lighting, public buildings, harbor improvements and parks. A key service area focuses on the use of engineering expertise to solve problems and to promote a safe and efficient transportation system. Public Works adds quality, safety and order to our lives through the use of engineered controls and measures such as traffic signals, signage and pavement maintenance. Public Works also manages public property through permitted encroachments, ensures the safety of utility company activities, private construction and special events in the public right-of- way, and reviews plans for residential and commercial development as they relate to the public right- of-way. KEY DEPARTMENT PROGRAMS ENGINEERING SERVICES y Capital Improvement Program y Water Quality and Environmental Programs y Transportation System and Operations and Development Services HARBOR RESOURCES ADMINISTRATION AND RECORDS PUBLIC WORKS Department Budgets 131 GOALS y Facilitate design and construction of public infrastructure to meet community priorities and goals and to optimize the performance and lifespan of public assets. y Continuously improve our project delivery capability and use of project management tools to deliver the highest quality improvements and services on time and on budget. y Maintain and operate City transportation systems including vehicle, bicycle and pedestrian facilities in a safe and reliable manner. y Implement use of technology tools, such as online bidding for capital improvement projects, website and social media, and citywide efforts to upgrade several new software systems to improve efficient delivery of services and meet customer expectations. y Integrate increased communication and team building in all aspects of department operations and organizational culture. y Develop long-range plans for the maintenance and repair of publically maintained buildings, facilities, and structures as well a capital improvements plan for tidelands related facilities and amenities. y Participate in discussions and innovative solutions for current and emerging issues such as bicycle safety, sea levels and seawalls, regulatory compliance and permitting, water quality and water conservation, and park planning. TOTAL PUBLIC WORKS DEPARTMENT COSTS Service I ndicators 2012-13 Actual 2013-14 Actual 2014-15 Estimated 2015-16 Projected CIP funds expended1 $79,282,383 $42,096,125 $66,190,668 $66,600,490 81% 82% 80% 85% 100% 94% 85% 90% 95% 83% 90% 90% Total full-tim e department personnel 35 34 35 35 Total part-tim e department personnel 2.58 2.11 2.85 3.35 1 CIP projects completed within two months of baseline schedule - target 85% CIP projects completed within awarded contract value, plus approved contingency - target 90% Plan checks completed within target date Does not include assessment district project funds nor encumbered funds for work in progress; actual data reflects amounts expended including assessment district project expenses and capital budget expenses approved mid-year. Projected budget includes estim ated carry-over funds from current budget. 2012-13 2013-14 2014-15 2015-16 Actual Actual Estimated Adopted Salaries and Benefits 5,359,230$ 5,447,720$5,947,278$ 6,362,020$ Maintenance and Operations 2,495,223$ 2,349,697$3,834,175$ 3,307,668$ Capital E quipment 21,664$28,686$48,095$ 14,001$ Total 7,876,117$ 7,826,103$ 9,829,548$ 9,683,689$ 132 Department Budgets PROGRAMS ENGINEERING SERVICES CAPITAL IMPROVEMENT PROGRAM DELIVERY INTENDED OUTCOME Manage the development, design, construction and administration of all of the City’s Capital Improvement Program (CIP) projects. CORE FUNCTIONS y Feasibility studies, planning, permitting, master plans y Right-of-way acquisition y Utilities coordination y Engineering design y Project management y Construction management y Public right-of-way inspection y Community outreach and education y Utility undergrounding district administration and coordination y Coordination with outside agencies such as County of Orange, OCTA, Caltrans, OCSD, MWDOC and surrounding cities related to regional infrastructure issues y Coordination with federal and state regulatory agencies related to strategic planning for dredging, water quality and ecosystem restoration projects y Pursue and manage grant funding for eligible projects. WORK PLAN: y Oversee project and construction management of scheduled and emergency Capital Improvement Program projects such as Traffic Signal Modernization, water infrastructure improvements, pavement condition improvements, and harbor and tidelands improvements. y Manage and update infrastructure master plans to reflect the community’s goals of maintaining quality public infrastructure that are sustainable into the future with emphasis on facilities, transportation, environmental and water quality, and tidelands management. Department Budgets 133 CAPITAL IMPROVEMENT PROGRAM COSTS CAPITAL IMPROVEMENT PROGRAM BUDGETED STAFFING 2012-13 2013-14 2014-15 2015-16 Actual Actual Estimated Adopted Salaries and Benefits 2,268,607$ 2,320,554$ 2,485,274$2,676,982$ Maintenance and Operations 489,959$ 553,110$672,695$512,494$ Capital E quipment 8,502$15,100$ 23,095$ 3,000$ Total 2,767,068$ 2,888,764$ 3,181,064$ 3,192,476$ Positions F Y 2012-13 F Y 2013-14 F Y 2014-15 F Y 2015-16 Full-Time Assistant City E ngineer 1.0 1.0 1.0 1.0 Assoc 5% C ivil E ngineer 2.0 3.0 3.0 3.0 Associate Civil E ngineer 1.0 1.0 1.0 1.0 Construction Inspection S upervisor 1.0 1.0 1.0 1.0 Deputy Public Works Director/City E ngineer 1.0 1.0 1.0 1.0 Facilities Manager 1.0 1.0 - - Junior 5% C ivil E ngineer 1.0 - - - Principal Civil E ngineer 1.0 1.0 1.0 1.0 Public Works Inspector II - - 1.0 1.0 Senior Civil E ngineer 3.0 3.0 3.0 3.0 Senior Public Works Inspector 2.0 2.0 2.0 2.0 Total Full-Time 14.0 14.0 14.0 14.0 Part-T ime Contract Civil Engineer 0.26 0.26 - - Public Works Technical Aide 0.85 0.85 1.35 1.85 Total Part-Time 1.11 1.11 1.35 1.85 Total Budgeted S taffing 15.11 15.11 15.35 15.85 134 Department Budgets ENGINEERING SERVICES WATER QUALITY AND ENVIRONMENTAL PROGRAMS INTENDED OUTCOME Ensure City is compliant with state and federal permits and regulations so that the citizens and guests of Newport Beach enjoy the best environmental standard of living possible by planning and engineering protections and implementing clean water requirements for Newport Bay, the ocean shoreline and other sensitive areas. CORE FUNCTIONS: y Management and enforcement of local, state and federal laws, policies and regulations y Environmental programming and capital planning including the pursuit of funding opportunities and collaborative public/ private partnerships. y Community education and promotion of best management practices y Participate in regional planning and coordination with the community, other public agencies, regulatory agencies and various environmental stakeholders. WORK PLAN: y Participate, oversee and implement the requirements and regulations associated with regional water quality permits and orders. y Implement water quality improvement projects for Big Canyon wetlands, Semeniuk Slough dredging, Newport Coast ASBS protection program. y Install various catch basin filters and water quality filtration units citywide. y Continue coordination with regional watershed stakeholders and the Regional Water Quality Control Board to develop sustainable water quality strategies with achievable goals within economic conditions. y Encourage water conservation through education and awareness. Crystal Cove State Beach Semeniuk Slough at Coast Highway Department Budgets 135 WATER QUALITY AND ENVIRONMENTAL PROGRAM COSTS WATER QUALITY AND ENVIRONMENTAL PROGRAMS BUDGETED STAFFING ENGINEERING SERVICES TRANSPORTATION SYSTEM & OPERATIONS AND DEVELOPMENT SERVICES INTENDED OUTCOME Promote a safe, efficient and effective multi-modal transportation system for various roadway uses and protect interests in the public right-of-way. CORE FUNCTIONS: TRANSPORTATION SYSTEM MANAGEMENT AND OPERATIONS y Traffic engineering, traffic studies and transportation planning y Traffic signal system operations, coordination and maintenance Neighborhood traffic calming y Oversight and implementation of the City’s Bicycle Master Plan. y Special event support and coordination 2012-13 2013-14 2014-15 2015-16 Actual Actual Estimated Adopted Salaries and Benefits 303,277$319,376$520,858$ 536,522$ Maintenance and Operations 55,327$68,518$ 105,200$ 71,109$ Capital E quipment -$8,138$ 2,500$ 1,500$ Total 358,604$396,032$ 628,558$609,131$ Positions F Y 2012-13 F Y 2013-14 F Y 2014-15 F Y 2015-16 Full-Time Assistant City E ngineer 1.0 1.0 1.0 1.0 Code & Water Quality E nforcement D ivision Manager 1.0 1.0 1.0 - Senior E ngineer -- -1.0 Water Conservation Coordinator 1.0 1.0 1.0 1.0 Total Full-Time 3.0 3.0 3.0 3.0 Total Budgeted S taffing 3. 0 3. 0 3. 0 3. 0 136 Department Budgets DEVELOPMENT SERVICES y Plan check services y Subdivision engineering y Land use coordination y Planning Commission support staffing y Surveying and mapping y Encroachment permits and temporary street closures WORK PLAN: y Continue processing the transportation planning and associated environmental processes for private developments. y Continue implementing the traffic management plan to improve traffic flows and reduce congestion. y Review, manage and implement traffic, bicycle and pedestrian safety and operation improvements. y Implement elements of the Bicycle Master Plan to provide safe and efficient movement of bicycles throughout the City. y Continued modernization and rehabilitation of traffic signals throughout the City. y Plan check street, water, wastewater, drainage, tract, and parcel maps. TRANSP. SYSTEM & OP AND DEVELOPMENT SERVICES PROGRAM COSTS 2012-13 2013-14 2014-15 2015-16 Actual Actual Estimated Adopted Salaries and Benefits 1,332,811$ 1,358,436$ 1,405,436$ 1,512,570$ Maintenance and Operations 534,423$531,172$973,637$ 1,013,211$ Capital E quipment 1,177$1,735$ 1,000$ 1,000$ Total 1,868,411$ 1,891,342$2,380,073$2,526,781$ Department Budgets 137 TRANSP. SYSTEM & OP AND DEVELOPMENT SERVICES BUDGETED STAFFING HARBOR RESOURCES INTENDED OUTCOME Protect and improve the resources of Newport Harbor and Upper Newport Bay for life, recreation and commerce. CORE FUNCTIONS: y Permit issuance and administration for pier, marina and mooring operations y Coordination and execution of harbor dredging y Regulatory compliance y Harbor Commission and Tidelands Management Committee staffing support y Balboa Yacht Basin property management y Studies, planning, permitting and long term capital facilities y Beach sand replenishment projects and sediment maintenance y Oversee and manage the City’s Harbor-related infrastructure and maintenance y Interagency coordination and planning Positions F Y 2012-13 F Y 2013-14 F Y 2014-15 F Y 2015-16 Full-Time Assoc 5% C ivil E ngineer 2.0 2.0 3.0 5.0 City Traffic E ngineer 1.0 1.0 1.0 1.0 Junior C ivil E ngineer 2.0 2.0 2.0 - Senior Civil E ngineer 2.0 2.0 2.0 2.0 Senior T raffic E ngineering T echnician 1.0 - - - Total Full-T ime 8.0 7.0 8.0 8.0 Part-T ime PW Technical A ide 1.0 1.0 1.0 1.0 Total Part-T ime 1.0 1.0 1.0 1.0 Total Budgeted S taffing 9. 0 8. 0 9. 0 9. 0 138 Department Budgets WORK PLAN: y Continue pursuing funding opportunities for harbor related projects and amenities. y Carry out capital project priorities in the harbor area such as harbor pier maintenance and repairs, harbor dredging and sand management, and bulkhead and seawall repairs. y Address reconstruction of sea walls around Balboa Island and Newport Harbor. y Ensure current and future projects address and account for possible future sea level changes that may affect public and private properties. y Continue development of a comprehensive master plan for the management, governance, and financing strategies for all tidelands, including dredging, beach replenishment, long- term capital plan, sea level rise, oil and gas and water quality. y Complete eelgrass surveys along the harbor shoreline. HARBOR RESOURCES PROGRAM COSTS HARBOR RESOURCES BUDGETED STAFFING Positions F Y 2012-13 F Y 2013-14 F Y 2014-15 F Y 2015-16 Full-T ime Harbor R esources Manager 1.0 1.0 1.0 1.0 Harbor R esources S upervisor 1.0 1.0 1.0 1.0 Harbor R esources Technician II 1.0 1.0 1.0 1.0 Total F ull-Time 3.0 3.0 3.0 3.0 Total B udgeted Staffing 3. 0 3. 0 3. 0 3. 0 2012-13 2013-14 2014-15 2015-16 Actual Actual Estimated Adopted Salaries and Benefits 460,704$473,595$485,091$513,248$ Maintenance and Operations 1,189,517$ 1,034,319$ 1,901,465$ 1,460,356$ Capital E quipment 11,676$(3)$ 10,000$ 2,501$ Total 1,661,897$ 1,507,911$ 2,396,556$ 1,976,105$ Department Budgets 139 ADMINISTRATION AND RECORDS INTENDED OUTCOME Lead and support department’s organizational, development and strategic planning and provide legal, financial and administrative support for Public Works divisions. Oversee the department and Capital Improvements Plan budgets, financial operations, and public records. CORE FUNCTIONS: y Implementation of City Council and management directives and policies y Budget development and administration y CIP financial management y Contracts and grants administration y Customer service and communications y Permit issuance y Manage and maintain department plans, maps and documents y Financial management and planning WORK PLAN: y Coordinate infrastructure management priorities, as directed by the City Council. y Facilitate department staffing and management practices to improve efficiencies and manage resource allocation of budget, staffing and contractual services. y Enhance customer service and communications through improved information access, friendly service and prompt professional responses. y Continue movement to electronic records to improve efficiency and enable improved access to information for accountability and transparency. y Coordinate with outside agencies including OCTA, Caltrans, OCSD, SCE, etc. regarding regional issues affecting the City. 140 Department Budgets ADMINISTRATION PROGRAM COSTS 2012-13 2013-14 2014-15 2015-16 Actual Actual Estimated Adopted Salaries and Benefits 993,831$975,760$ 1,050,620$ 1,122,700$ Maintenance and Operations 225,997$162,579$181,178$ 250,499$ Capital E quipment 309$3,716$ 11,500$ 6,000$ Total 1,220,137$ 1,142,054$ 1,243,299$ 1,379,199$ Department Budgets 141 Positions F Y 2012-13 F Y 2013-14 F Y 2014-15 F Y 2015-16 Full-Time Administrative Analyst 1.0 1.0 1.0 1.0 Administrative Assistant - 1.0 1.0 1.0 City S urveyor 1.0 - - - Engineering Technician 1.0 1.0 1.0 1.0 Management A ssistant 1.0 1.0 1.0 1.0 Public Works Director 1.0 1.0 1.0 1.0 Public Works Specialist 1.0 1.0 1.0 - Permit T echnician II ---1.0 PW Finance/Admin Manager 1.0 1.0 1.0 1.0 Total F ull-Time 7.0 7.0 7.0 7.0 Part-T ime Intern ---0.5 Office A ssistant P/T 0.47--- Student Aide --0.5- Total Part-Time 0.47 - 0.5 0.5 Total Budgeted S taffing 7.47 7.00 7.50 7.50 ADMINISTRATION BUDGETED STAFFING ATTACHMENT B Public Works Department Fiscal Year 2015-2016 Operating Budget Detail Report :DIVISION POSITION WORKSHEET Year:JUL To JUN 2016 Division 010-5050 - PW-ADMIN Position Type of Employee FTE Base Wages Specialty Pays Retirement Contrib (City) [1] Other Benefits Total Salaries and Benefits ADMINISTRATIVE ANALYST Full Time 1.00 86,710 0 3,225 24,495 114,430 ASSISTANT, ADMINISTRATIVE Full Time 1.00 61,858 960 2,301 24,315 89,433 ENGINEERING TECHNICIAN Full Time 1.00 75,358 0 2,803 25,883 104,044 MANAGEMENT ASSISTANT Full Time 1.00 71,568 0 2,662 23,746 97,975 PERMIT TECHNICIAN II Full Time 1.00 75,358 0 2,803 23,933 102,094 PUBLIC WORKS DIRECTOR Full Time 1.00 202,883 5,760 7,545 32,136 248,324 PW FINANCE/ADMIN MANAGER Full Time 1.00 134,098 960 4,987 28,581 168,626 INTERN Part Time 0.50 16,796 0 -1,445 244 15,595 7.50 724,630 7,681 24,880 183,332 940,522 [1] Retirement Contribution (City) for each position does not include the amortized cost of the unfunded pension liability. 142 DESCRIPTION 2014 ADOPTED 2015 ADOPTED 2015 AMENDED 2016 ADOPTED 7000 SALARIES - MISC 665,223 690,359 690,359 707,834 7020 SALARIES - PART TIME 0 0 0 16,796 7030 SALARIES - SEASONAL 0 12,542 12,542 0 Total Regular Salaries 665,223 702,902 702,902 724,630 7099 SALARY SAVINGS (76,679)000 7110 CAR ALLOWANCE 4,800 4,800 4,800 4,800 7114 CELL PHNE STIPND EXP 1,920 1,920 1,920 2,881 Total Other Salaries (69,959)6,720 6,720 7,681 Total Salaries 595,264 709,622 709,622 732,310 7210 HLTH/DNTAL/VISON FT 127,344 136,059 136,059 140,515 7223 ANNUAL OPEB COST 28,231 33,971 33,971 29,919 7227 RHS $2.50 CONTRIB 4,950 5,400 5,400 6,630 Total Health & Retiree Ins 160,525 175,430 175,430 177,064 7290 LIFE INSURANCE 735 735 735 7357295 EMP ASSIST PRGM 160 165 165 1717370 WORKERS' COMP, MISC 19,965 19,965 19,965 17,0787373 COMPSNTED ABSNCES 23,283 24,163 24,163 24,7747425 MEDICARE FRINGES 9,809 10,192 10,192 10,507 Total Other Benefits 53,952 55,220 55,220 53,2657439 PERS MBR CNTRBN MISC 6,453 53,848 53,848 56,4927440 PERS ER CNTRBN MISC 103,109 55,229 55,229 57,250 7445 EE RET CNTRBN MISC 0 (75,249) (75,249) (89,492) 7446 PERS UNFND LIAB MISC 0 76,050 76,050 135,181 7460 RETRMNT PT/TEMP 0 470 470 630 Total Retirements 109,562 110,348 110,348 160,061 Total Benefits 324,039 340,998 340,998 390,390 Total Salaries and Benefits 919,303 1,050,620 1,050,620 1,122,700 8030 MAINT&REPAR - EQUIP 2,000 0 0 0 8033 PRNTR MAINT/SUPLIES 1,000 500 500 500 8050 PSTGE,FREIGHT,EXPRS 3,300 2,800 2,800 2,800 8060 PUBLICATIONS & DUES 3,300 1,500 1,500 1,500 8080 SERVICES-PROF & TECH 66,000 66,000 66,000 120,000 8086 SRVCS-OTHR PRNT VNR 0 1,000 1,000 1,0008089 SVCS-CTY PRT CNTRCT 6,206 1,500 1,500 1,5008100 TRAVEL & MEETINGS 4,500 4,500 4,500 4,5008105 TRAINING 10,000 13,100 16,200 7,5008112 UTILITIES - TELEPHONE 300 0 0 08140 SUPPLIES- OFFICE NOC 17,250 17,250 17,250 17,250 8160 MAINT & REPAIR NOC 500 0 0 0 8200 SPECIAL DEPT SUPPLIES 3,635 3,500 3,500 5,600 8240 TOOLS,INSTRMNTS,ETC 250 0 0 0 8310 SFTWRE LICNSE RENWL 720 720 720 720 8318 IT ISF OPRATNG CHRGE 27,712 34,575 34,575 49,022 8319 IT ISF STRATGIC CHRG 8,034 8,194 8,194 19,001 8340 GENERAL INSURANCE 22,939 22,939 22,939 19,606 Total Operating Expenses 177,645 178,078 181,178 250,499 9000 OFFICE EQUIPMENT 1,250 0 0 0 9010 COMPUTER EQUIPMENT 0 3,000 3,000 3,000 9400 OFF FRNTRE/FIXTRES 2,000 8,500 8,500 3,000 Total Capital Outlay 3,250 11,500 11,500 6,000 Total Division Expenses 1,100,198 1,240,199 1,243,299 1,379,199 Total Expenses 1,100,198 1,240,199 1,243,299 1,379,199 010-5050 PW-ADMINT50000 Total Expenses 143 Report :DIVISION POSITION WORKSHEET Year:JUL To JUN 2016 Division 230-5060 - HARBOR RESOURCES Position Type of Employee FTE Base Wages Specialty Pays Retirement Contrib (City) [1] Other Benefits Total Salaries and Benefits HARBOR RESOURCES MANAGER Full Time 1.00 150,238 960 5,587 29,350 186,136 HARBOR RESOURCES SUPRVSR Full Time 1.00 109,949 960 4,089 27,085 142,083 HARBOR RESOURCES TECH II Full Time 1.00 72,176 0 2,684 25,576 100,436 3.00 332,363 1,920 12,361 82,011 428,655 [1] Retirement Contribution (City) for each position does not include the amortized cost of the unfunded pension liability. 144 2014 ADOPTED 2015 ADOPTED 2015 AMENDED 2016 ADOPTED'(6&5,37,21 7000 SAL$5,(60,6&318,100 327,454 327,454 332,363 Total Regular Salaries 318,100 327,454 327,454 332,363 7114 CELL PHNE STIPND EXP 1,500 1,500 1,500 1,920 Total Other Salaries 1,500 1,500 1,500 1,920 Total Salaries 319,600 328,955 328,955 334,284 7210 HLTH/DNTAL/VISON FT 54,576 58,311 58,311 60,221 7223 ANNUAL OPEB COST 15,038 16,245 16,245 14,191 7227 RHS $2.50 CONTRIB 4,320 4,770 4,770 4,950 Total Health & Retiree Ins 73,934 79,326 79,326 79,362 7290 LIFE INSURANCE 315 315 315 315 7295 EMP ASSIST PRGM 69 71 71 73 7370 WORKERS' COMP, MISC 8,098 8,098 8,098 6,927 7373 COMPSNTED ABSNCES 11,134 11,461 11,461 11,633 7425 MEDICARE FRINGES 4,761 4,748 4,748 4,819 Total Other Benefits 24,376 24,693 24,693 23,7677439 PERS MBR CNTRBN MISC 3,086 25,541 25,541 26,5267440 PERS ER CNTRBN MISC 49,306 26,196 26,196 26,8827445 EE RET CNTRBN MISC 0 (35,693) (35,693) (41,047)7446 PERS UNFND LIAB MISC 0 36,072 36,072 63,474 Total Retirements 52,391 52,118 52,118 75,835 Total Benefits 150,701 156,136 156,136 178,964 Total Salaries and Benefits 470,301 485,091 485,091 513,248 8020 AUTOMOTIVE SERVICE 1,600 1,600 1,600 1,600 8022 EQUIP MAINT ISF 6,766 7,401 7,401 7,386 8024 VEHICLE REPLACE ISF 8,207 8,207 8,207 8,207 8030 MAINT&REPAR - EQUIP 100 0 0 0 8033 PRNTR MAINT/SUPLIES 3,200 500 500 500 8040 MAINT&REPAIR - BLDG 40,220 40,220 54,880 50,000 8050 PSTGE,FREIGHT,EXPRS 1,500 2,000 2,000 0 8060 PUBLICATIONS & DUES 3,500 2,500 2,500 0 8066 ALARM MONITORING 0 750 750 750 8070 RENTAL/PROP & EQUIP 5,700 5,700 5,700 5,700 8080 SERVICES-PROF & TECH 438,500 638,500 913,728 260,00080808 NPDES ADMINSTRTN 150,000 150,000 150,000 150,00080809 TMDL ADMINISTRTN 160,000 180,000 212,000 200,0008081 SERVICES - JANITORIAL 2,500 2,500 2,500 3,0008086 SRVCS-OTHR PRNT VNR 0 12,000 12,000 12,0008088 SERVICES - CONTRACT 0 25,000 25,000 25,000 808B MOORING MGMT 285,000 295,000 295,000 325,000 808G BYB MANAGEMENT 0 0 0 180,000 8100 TRAVEL & MEETINGS 1,000 1,500 1,500 2,000 8105 TRAINING 2,500 2,500 2,500 2,500 8112 UTILITIES - TELEPHONE 200 800 800 800 8114 UTILITIES - NTRL GAS 1,000 1,300 1,300 1,300 8116 UTILITIES - ELECTRICITY 45,000 45,000 45,000 45,000 8118 UTILITIES - WATER 10,000 16,000 16,000 16,000 8130 SEWER USE FEE/PROPE 0 0 0 80 8140 SUPPLIES- OFFICE NOC 4,000 3,000 3,000 3,000 8150 SUPPLIES- JANITORIAL 2,000 2,000 2,000 4,000 8168 MAINT-PIERS/FLTS/DCK 15,000 15,000 15,000 85,000 8170 MAINT - BEACHES 25,000 25,000 25,000 25,0008200 SPECIAL DEPT SUPPLIES 7,000 4,500 4,500 4,5008240 TOOLS,INSTRMNTS,ETC 800 0 0 08318 IT ISF OPRATNG CHRGE 58,876 71,932 71,932 21,0098319 IT ISF STRATGIC CHRG 4,017 4,097 4,097 8,1438340 GENERAL INSURANCE 15,070 15,070 15,070 12,880 Total Operating Expenses 1,298,256 1,579,577 1,901,465 1,460,356 9300 EQUIPMENT, N.O.C. 12,000 0 10,000 0 9400 OFF FRNTRE/FIXTRES 0 0 0 2,501 Total Capital Outlay 12,000 0 10,000 2,501 Total Division Expenses 1,780,557 2,064,668 2,396,556 1,976,104 230-5060 HARBOR RESOURCEST50000 Total Expenses Total Expenses 1,780,557 2,064,668 2,396,556 1,976,104 145 Report :DIVISION POSITION WORKSHEET Year:JUL To JUN 2016 Division 010-5070 - WATER QUALITY Position Type of Employee FTE Base Wages Specialty Pays Retirement Contrib (City) [1] Other Benefits Total Salaries and Benefits ASSISTANT CITY ENGINEER Full Time 1.00 153,899 960 5,724 27,821 188,404 CIVIL ENGINEER, SENIOR Full Time 1.00 103,272 960 3,841 27,085 135,158 WATER CONSERVATION COORD Full Time 1.00 95,368 1,860 3,580 26,707 127,515 3.00 352,539 3,781 13,145 81,613 451,077 [1] Retirement Contribution (City) for each position does not include the amortized cost of the unfunded pension liability. 146 DESCRIPTION 2014 ADOPTED 2015 ADOPTED 2015 AMENDED 2016 ADOPTED 7000 SALARIES - MISC 353,142 358,446 359,196 352,539 Total Regular Salaries 353,142 358,446 359,196 352,539 7063 CERTIFICATION PAY 913 900 900 900 7114 CELL PHNE STIPND EXP 2,880 2,881 2,881 2,881 Total Other Salaries 3,793 3,781 3,781 3,781 Total Salaries 356,935 362,227 362,977 356,320 7210 HLTH/DNTAL/VISON FT 54,576 58,311 58,311 60,221 7223 ANNUAL OPEB COST 16,694 18,034 18,034 15,567 7227 RHS $2.50 CONTRIB 3,120 3,420 3,420 3,540 Total Health & Retiree Ins 74,390 79,765 79,765 79,328 7290 LIFE INSURANCE 315 315 315 315 7295 EMP ASSIST PRGM 69 71 71 73 7370 WORKERS' COMP, MISC 2,780 2,780 2,780 2,378 7373 COMPSNTED ABSNCES 12,360 12,546 12,546 12,3397425 MEDICARE FRINGES 5,184 5,211 5,211 5,125 Total Other Benefits 20,707 20,922 20,922 20,2307439 PERS MBR CNTRBN MISC 3,443 28,029 28,029 28,2087440 PERS ER CNTRBN MISC 54,879 28,748 28,748 28,5867445 EE RET CNTRBN MISC 0 (39,169) (39,169) (43,650)7446 PERS UNFND LIAB MISC 0 39,586 39,586 67,499 Total Retirements 58,322 57,194 57,194 80,644 Total Benefits 153,419 157,881 157,881 180,202 Total Salaries and Benefits 510,355 520,108 520,858 536,522 8020 AUTOMOTIVE SERVICE 900 900 900 900 8022 EQUIP MAINT ISF 3,474 3,801 3,801 3,793 8024 VEHICLE REPLACE ISF 2,585 2,585 2,585 2,585 8050 PSTGE,FREIGHT,EXPRS 1,100 800 800 800 8060 PUBLICATIONS & DUES 500 500 500 500 8080 SERVICES-PROF & TECH 30,000 30,000 30,000 30,000 80809 TMDL ADMINISTRTN 0 20,000 20,000 0 8089 SVCS-CTY PRT CNTRCT 699 500 500 500 8100 TRAVEL & MEETINGS 1,500 1,000 1,000 1,000 8105 TRAINING 1,500 1,000 1,000 1,0008140 SUPPLIES- OFFICE NOC 500 500 500 5008200 SPECIAL DEPT SUPPLIES 0 300 300 1,3008318 IT ISF OPRATNG CHRGE 24,699 30,292 30,292 14,0068319 IT ISF STRATGIC CHRG 2,678 2,731 2,731 5,4298340 GENERAL INSURANCE 10,291 10,291 10,291 8,796 Total Operating Expenses 80,426 105,200 105,200 71,1099300 EQUIPMENT, N.O.C. 1,500 500 500 500 9400 OFF FRNTRE/FIXTRES 0 2,000 2,000 1,000 Total Capital Outlay 1,500 2,500 2,500 1,500 Total Division Expenses 592,280 627,808 628,558 609,130 Total Expenses 592,280 627,808 628,558 609,130 010-5070 WATER QUALITY-ENVRMTL PRGT50000 Total Expenses 147 Report :DIVISION POSITION WORKSHEET Year:JUL To JUN 2016 Division 010-5100 - PW-ENGINEERING Position Type of Employee FTE Base Wages Specialty Pays Retirement Contrib (City) [1] Other Benefits Total Salaries and Benefits ASSISTANT CITY ENGINEER Full Time 1.00 153,899 960 5,724 30,041 190,624 CIVIL ENGINEER ASSOC 5% Full Time 1.00 97,104 0 3,611 25,010 125,725 CIVIL ENGINEER ASSOC 5% Full Time 1.00 114,046 0 4,241 27,528 145,816 CIVIL ENGINEER ASSOC 5% Full Time 1.00 114,046 0 4,241 27,498 145,786 CIVIL ENGINEER, ASSOCIATE Full Time 1.00 108,680 0 4,042 27,353 140,074 CIVIL ENGINEER, PRINCIPAL Full Time 1.00 146,536 960 5,450 29,767 182,712 CIVIL ENGINEER, SENIOR Full Time 1.00 131,810 960 4,902 28,228 165,899 CIVIL ENGINEER, SENIOR Full Time 1.00 131,810 1,980 4,857 28,198 166,845 CIVIL ENGINEER, SENIOR Full Time 1.00 131,810 960 4,902 28,468 166,139 CONSTRUCT. INSPEC. SUPER Full Time 1.00 114,046 960 4,241 25,848 145,096 DEPUTY PW DIRECTR/CITY EN Full Time 1.00 186,763 5,160 6,946 29,448 228,317 PUBLIC WORKS INSPECTOR II Full Time 1.00 78,114 960 2,905 24,070 106,048 PUBLIC WORKS INSPECTOR SR Full Time 1.00 98,280 960 3,655 27,108 130,003 PUBLIC WORKS INSPECTOR SR Full Time 1.00 98,280 960 3,655 25,068 127,963 PW TECHNICAL AIDE W/PARS Part Time 1.00 29,182 0 1,094 423 30,700 PW TECHNICAL AIDE W/PARS Part Time 0.85 24,805 0 930 360 26,095 15.85 1,759,211 14,822 65,397 384,626 2,224,057 [1] Retirement Contribution (City) for each position does not include the amortized cost of the unfunded pension liability. 148 DESCRIPTION 2014 ADOPTED 2015 ADOPTED 2015 AMENDED 2016 ADOPTED 7000 SALARIES - MISC 1,648,313 1,652,522 1,654,597 1,705,224 7020 SALARIES - PART TIME 37,856 0 0 0 7030 SALARIES - SEASONAL 24,098 38,835 38,835 53,987 Total Regular Salaries 1,710,267 1,691,357 1,693,432 1,759,211 7040 OT, MISC & 1/2 TIME 9,668 14,668 14,668 14,668 Total Overtime Salaries 9,668 14,668 14,668 14,668 7063 CERTIFICATION PAY 4,187 4,080 4,080 1,020 7110 CAR ALLOWANCE 0 0 0 4,200 7114 CELL PHNE STIPND EXP 3,840 5,761 5,761 9,602 Total Other Salaries 8,027 9,841 9,841 14,822 Total Salaries 1,727,962 1,715,866 1,717,941 1,788,701 7210 HLTH/DNTAL/VISON FT 254,688 272,118 272,118 281,031 7223 ANNUAL OPEB COST 78,131 84,176 84,176 71,707 7227 RHS $2.50 CONTRIB 14,580 15,840 15,840 16,380 Total Health & Retiree Ins 347,399 372,134 372,134 369,1187290 LIFE INSURANCE 1,470 1,470 1,470 1,4707295 EMP ASSIST PRGM 321 331 331 3417370 WORKERS' COMP, MISC 0 47,574 47,574 40,6947373 COMPSNTED ABSNCES 57,691 57,838 57,838 59,6837425 MEDICARE FRINGES 23,490 24,797 24,797 25,721 Total Other Benefits 82,972 132,009 132,009 127,909 7439 PERS MBR CNTRBN MISC 16,070 129,215 129,215 136,175 7440 PERS ER CNTRBN MISC 256,138 132,528 132,528 137,919 7445 EE RET CNTRBN MISC 0 (180,570) (180,570) (210,721) 7446 PERS UNFND LIAB MISC 0 180,560 180,560 325,856 7460 RETRMNT PT/TEMP 2,323 1,456 1,456 2,025 Total Retirements 274,531 263,190 263,190 391,253 Total Benefits 704,902 767,333 767,333 888,280 Total Salaries and Benefits 2,432,864 2,483,199 2,485,274 2,676,982 8020 AUTOMOTIVE SERVICE 10,000 10,000 10,000 10,000 8022 EQUIP MAINT ISF 32,373 39,656 39,656 39,142 8024 VEHICLE REPLACE ISF 27,230 30,148 30,148 30,148 8030 MAINT&REPAR - EQUIP 500 0 0 08033 PRNTR MAINT/SUPLIES 1,000 500 500 1,7008050 PSTGE,FREIGHT,EXPRS 250 250 250 2508060 PUBLICATIONS & DUES 4,000 3,500 3,500 3,5008080 SERVICES-PROF & TECH 303,100 100,000 360,049 200,0008100 TRAVEL & MEETINGS 3,000 3,000 3,000 3,0008105 TRAINING 10,000 8,000 8,000 7,0008111 TELECOMM-DATALINES 2,700 2,700 2,700 2,700 8112 UTILITIES - TELEPHONE 2,400 1,400 1,400 1,200 8140 SUPPLIES- OFFICE NOC 4,500 4,500 4,500 4,500 8200 SPECIAL DEPT SUPPLIES 3,200 3,500 3,500 3,500 8240 TOOLS,INSTRMNTS,ETC 500 0 0 0 8310 SFTWRE LICNSE RENWL 1,000 1,000 1,000 12,000 8318 IT ISF OPRATNG CHRGE 104,562 129,106 129,106 105,046 8319 IT ISF STRATGIC CHRG 18,745 19,120 19,120 40,716 8340 GENERAL INSURANCE 56,266 56,266 56,266 48,091 Total Operating Expenses 585,327 412,647 672,695 512,494 9006 SOFTWARE LICENSES 4,000 7,000 11,733 09400 OFF FRNTRE/FIXTRES 4,200 7,000 11,362 3,000 Total Capital Outlay 8,200 14,000 23,095 3,000 Total Division Expenses 3,026,391 2,909,845 3,181,064 3,192,475 Total Expenses 3,026,391 2,909,845 3,181,064 3,192,475 010-5100 PW-ENGINEERINGT50000 Total Expenses 149 Report :DIVISION POSITION WORKSHEET Year:JUL To JUN 2016 Division 010-5200 - PW-TRANS DEVT Position Type of Employee FTE Base Wages Specialty Pays Retirement Contrib (City) [1] Other Benefits Total Salaries and Benefits CITY TRAFFIC ENGINEER Full Time 1.00 153,899 540 5,724 29,891 190,054 CIVIL ENGINEER ASSOC 5% Full Time 1.00 108,680 1,980 4,080 27,128 141,867 CIVIL ENGINEER ASSOC 5% Full Time 1.00 103,880 1,984 3,819 25,345 135,028 CIVIL ENGINEER ASSOC 5% Full Time 1.00 108,680 960 4,042 26,783 140,464 CIVIL ENGINEER ASSOC 5% Full Time 1.00 114,046 0 4,241 27,468 145,756 CIVIL ENGINEER ASSOC 5% Full Time 1.00 114,046 1,020 4,279 27,213 146,559 CIVIL ENGINEER, SENIOR Full Time 1.00 131,810 0 4,902 28,378 165,089 CIVIL ENGINEER, SENIOR Full Time 1.00 131,810 1,980 4,940 28,302 167,032 PW TECHNICAL AIDE W/PARS Part Time 1.00 29,182 0 1,094 423 30,700 9.00 996,034 8,465 37,121 221,016 1,262,634 [1] Retirement Contribution (City) for each position does not include the amortized cost of the unfunded pension liability. 150 DESCRIPTION 2014 ADOPTED 2015 ADOPTED 2015 AMENDED 2016 ADOPTED 7000 SALARIES - MISC 813,475 936,874 936,874 966,851 7020 SALARIES - PART TIME 28,350 0 0 0 7030 SALARIES - SEASONAL 0 28,766 28,766 29,182 Total Regular Salaries 841,826 965,640 965,640 996,034 7040 OT, MISC & 1/2 TIME 5,867 5,867 5,867 5,867 Total Overtime Salaries 5,867 5,867 5,867 5,867 7063 CERTIFICATION PAY 2,213 3,060 3,060 4,084 7114 CELL PHNE STIPND EXP 3,420 4,381 4,381 4,381 Total Other Salaries 5,633 7,441 7,441 8,465 Total Salaries 853,325 978,948 978,948 1,010,365 7210 HLTH/DNTAL/VISON FT 127,344 155,496 155,496 160,589 7223 ANNUAL OPEB COST 42,560 41,542 41,542 40,602 7227 RHS $2.50 CONTRIB 9,780 10,560 10,560 10,980 Total Health & Retiree Ins 179,684 207,599 207,599 212,1717290 LIFE INSURANCE 735 840 840 8407295 EMP ASSIST PRGM 160 189 189 1957370 WORKERS' COMP, MISC 21,087 21,087 21,087 18,0387373 COMPSNTED ABSNCES 28,472 32,791 32,791 33,8407425 MEDICARE FRINGES 12,369 14,131 14,131 14,572 Total Other Benefits 62,823 69,038 69,038 67,4857439 PERS MBR CNTRBN MISC 7,934 72,488 72,488 77,490 7440 PERS ER CNTRBN MISC 126,432 75,195 75,195 78,446 7445 EE RET CNTRBN MISC 0 (102,453) (102,453) (119,910) 7446 PERS UNFND LIAB MISC 0 103,543 103,543 185,428 7460 RETRMNT PT/TEMP 1,063 1,079 1,079 1,094 Total Retirements 135,429 149,852 149,852 222,548 Total Benefits 377,935 426,488 426,488 502,204 Total Salaries and Benefits 1,231,261 1,405,436 1,405,436 1,512,570 8020 AUTOMOTIVE SERVICE 4,600 3,000 3,000 3,000 8022 EQUIP MAINT ISF 10,956 11,986 11,986 11,963 8024 VEHICLE REPLACE ISF 7,746 7,746 7,746 7,746 8030 MAINT&REPAR - EQUIP 280,000 280,000 424,027 520,000 8033 PRNTR MAINT/SUPLIES 1,500 500 500 2008034 MAINT & REPR-DMGE 30,000 50,000 70,794 50,0008050 PSTGE,FREIGHT,EXPRS 200 200 200 2008060 PUBLICATIONS & DUES 1,700 1,700 1,700 2,5008080 SERVICES-PROF & TECH 173,500 175,500 279,680 225,5008089 SVCS-CTY PRT CNTRCT 0 2,500 2,500 2,5008100 TRAVEL & MEETINGS 2,000 1,500 1,500 1,0008105 TRAINING 3,000 3,000 3,000 2,000 8112 UTILITIES - TELEPHONE 4,000 0 0 0 8140 SUPPLIES- OFFICE NOC 1,300 2,000 2,000 3,500 8160 MAINT & REPAIR NOC 800 0 0 0 8200 SPECIAL DEPT SUPPLIES 4,000 4,000 4,000 3,500 8240 TOOLS,INSTRMNTS,ETC 400 0 421 421 8310 SFTWRE LICNSE RENWL 500 500 500 500 8318 IT ISF OPRATNG CHRGE 25,808 32,420 32,420 56,025 8319 IT ISF STRATGIC CHRG 9,373 9,560 9,560 21,715 8340 GENERAL INSURANCE 118,102 118,102 118,102 100,942 Total Operating Expenses 679,484 704,214 973,637 1,013,2119400 OFF FRNTRE/FIXTRES 0 1,000 1,000 1,000 Total Capital Outlay 0 1,000 1,000 1,000 Total Division Expenses 1,910,745 2,110,650 2,380,073 2,526,781 Total Expenses 1,910,745 2,110,650 2,380,073 2,526,781 010-5200 PW-TRANS DEVTT50000 Total Expenses 151 DESCRIPTION 2014 ADOPTED 2015 ADOPTED 2015 AMENDED 2016 ADOPTED 010-5050 PW-ADMIN 1,100,198 1,240,199 1,243,299 1,379,199 010-5070 WATER QUALITY-EN 592,280 627,808 628,558 609,130 010-5100 PW-ENGINEERING 3,026,391 2,909,845 3,181,064 3,192,475 010-5200 PW-TRANS DEVT 1,910,745 2,110,650 2,380,073 2,526,781 230-5060 HARBOR RESOURCE 1,780,557 2,064,668 2,396,556 1,976,104 D5000 PUBLIC WORKS 8,410,171 8,953,170 9,829,548 9,683,690 D5000 PUBLIC WORKST50000 Total Expenses 152 ATTACHMENT C Public Works Budget Variance Analysis Summary Entity:D5000 ‐ PUBLIC WORKS Format:Budget Review Date Exported:24‐Nov‐15 2014 2015 2016 $ % DESCRIPTION ADOPTED ADOPTED ADOPTED Change Change Notes 7000 SALARIES ‐ MISC 3,798,253 3,965,656 4,064,811 99,155 2.50% 7020 SALARIES ‐ PART TIME 66,206 0 16,796 16,796 #DIV/0! 7030 SALARIES ‐ SEASONAL 24,098 80,143 83,170 3,027 3.78% Total Regular Salaries 3,888,558 4,045,799 4,164,777 118,978 2.94% 7040 OT, MISC & 1/2 TIME 15,535 20,535 20,535 0 0.00% Total Overtime Salaries 15,535 20,535 20,535 0 0.00% 7063 CERTIFICATION PAY 7,313 8,040 6,004 ‐2,036 ‐25.32% 7099 SALARY SAVINGS ‐76,679 0 0 0 #DIV/0! 7110 CAR ALLOWANCE 4,800 4,800 9,000 4,200 87.50% 7114 CELL PHNE STIPND EXP 13,560 16,443 21,664 5,221 31.75% Total Other Salaries ‐51,006 29,283 36,668 7,385 25.22% Total Salaries 3,853,086 4,095,617 4,221,980 126,363 3.09% 7210 HLTH/DNTAL/VISON FT 618,528 680,295 702,577 22,282 3.28% 7223 ANNUAL OPEB COST 180,654 193,968 171,985 ‐21,983 ‐11.33% 1 7227 RHS $2.50 CONTRIB 36,750 39,990 42,480 2,490 6.23% Total Health & Retiree Ins 835,932 914,253 917,043 2,790 0.31% 7290 LIFE INSURANCE 3,570 3,675 3,675 0 0.00% 7295 EMP ASSIST PRGM 779 827 853 26 3.14% 7370 WORKERS' COMP, MISC 51,930 99,504 85,116 ‐14,388 ‐14.46% 2 7373 COMPSNTED ABSNCES 132,939 138,798 142,268 3,470 2.50% 7425 MEDICARE FRINGES 55,613 59,078 60,744 1,666 2.82% Total Other Benefits 244,831 301,882 292,656 ‐9,226 ‐3.06% 7439 PERS MBR CNTRBN MISC 36,985 309,121 324,892 15,771 5.10% 3 7440 PERS ER CNTRBN MISC 589,863 317,896 329,082 11,186 3.52% 7445 EE RET CNTRBN MISC 0 ‐433,133 ‐504,820 ‐71,687 16.55% 4 7446 PERS UNFND LIAB MISC 0 435,811 777,439 341,628 78.39% 5 7460 RETRMNT PT/TEMP 3,386 3,005 3,749 744 24.76% Total Retirements 630,234 632,700 930,341 297,641 47.04% Total Benefits 1,710,997 1,848,836 2,140,040 291,204 15.75% Total Salaries and Benefits 5,564,083 5,944,453 6,362,020 417,567 7.02% 8020 AUTOMOTIVE SERVICE 17,100 15,500 15,500 0 0.00% 8022 EQUIP MAINT ISF 53,569 62,844 62,284 ‐560 ‐0.89% 8024 VEHICLE REPLACE ISF 45,768 48,686 48,686 0 0.00% 8030 MAINT&REPAR ‐ EQUIP 282,600 280,000 520,000 240,000 85.71% 6 8033 PRNTR MAINT/SUPLIES 6,700 2,000 2,900 900 45.00% 8034 MAINT & REPR‐DMGE 30,000 50,000 50,000 0 0.00% 8040 MAINT&REPAIR ‐ BLDG 40,220 40,220 50,000 9,780 24.32% 8050 PSTGE,FREIGHT,EXPRS 6,350 6,050 4,050 ‐2,000 ‐33.06% 8060 PUBLICATIONS & DUES 13,000 9,700 8,000 ‐1,700 ‐17.53% 8066 ALARM MONITORING 0 750 750 0 0.00% 8070 RENTAL/PROP & EQUIP 5,700 5,700 5,700 0 0.00% 8080 SERVICES‐PROF & TECH 1,011,100 1,010,000 835,500 ‐174,500 ‐17.28% Changes over 10k and over 5% noted below. 1 Entity:D5000 ‐ PUBLIC WORKS Format:Budget Review Date Exported:24‐Nov‐15 2014 2015 2016 $ % DESCRIPTION ADOPTED ADOPTED ADOPTED Change Change Notes Changes over 10k and over 5% noted below. 80808 NPDES ADMINSTRTN 150,000 150,000 150,000 0 0.00% 80809 TMDL ADMINISTRTN 160,000 200,000 200,000 0 0.00% 8081 SERVICES ‐ JANITORIAL 2,500 2,500 3,000 500 20.00% 8086 SRVCS‐OTHR PRNT VNR 0 13,000 13,000 0 0.00% 8088 SERVICES ‐ CONTRACT 0 25,000 25,000 0 0.00% 8089 SVCS‐CTY PRT CNTRCT 6,905 4,500 4,500 0 0.00% 808B MOORING MGMT 285,000 295,000 325,000 30,000 10.17% 7 808G BYB MANAGEMENT 0 0 180,000 180,000 #DIV/0! 8 8100 TRAVEL & MEETINGS 12,000 11,500 11,500 0 0.00% 8105 TRAINING 27,000 27,600 20,000 ‐7,600 ‐27.54% 8111 TELECOMM‐DATALINES 2,700 2,700 2,700 0 0.00% 8112 UTILITIES ‐ TELEPHONE 6,900 2,200 2,000 ‐200 ‐9.09% 8114 UTILITIES ‐ NTRL GAS 1,000 1,300 1,300 0 0.00% 8116 UTILITIES ‐ ELECTRICITY 45,000 45,000 45,000 0 0.00% 8118 UTILITIES ‐ WATER 10,000 16,000 16,000 0 0.00% 8130 SEWER USE FEE/PROPERTY TAX 0 0 80 80 #DIV/0! 8140 SUPPLIES‐ OFFICE NOC 27,550 27,250 28,750 1,500 5.50% 8150 SUPPLIES‐ JANITORIAL 2,000 2,000 4,000 2,000 100.00% 8160 MAINT & REPAIR NOC 1,300 0 0 0 #DIV/0! 8168 MAINT‐PIERS/FLTS/DCK 15,000 15,000 85,000 70,000 466.67% 9 8170 MAINT ‐ BEACHES 25,000 25,000 25,000 0 0.00% 8200 SPECIAL DEPT SUPPLIES 17,835 15,800 18,400 2,600 16.46% 8240 TOOLS,INSTRMNTS,ETC 1,950 0 421 421 #DIV/0! 8310 SFTWRE LICNSE RENWL 2,220 2,220 13,220 11,000 495.50% 10 8318 IT ISF OPRATNG CHRGE 241,657 298,326 245,108 ‐53,218 ‐17.84% 11 8319 IT ISF STRATGIC CHRG 42,846 43,703 95,004 51,301 117.39% 12 8340 GENERAL INSURANCE 222,668 222,668 190,315 ‐32,353 ‐14.53% 13 Total Operating Expenses 2,821,138 2,979,716 3,307,668 327,952 11.01% 9000 OFFICE EQUIPMENT 1,250 0 0 0 #DIV/0! 9006 SOFTWARE LICENSES 4,000 7,000 0 ‐7,000 ‐100.00% 9010 COMPUTER EQUIPMENT 0 3,000 3,000 0 0.00% 9300 EQUIPMENT, N.O.C.13,500 500 500 0 0.00% 9400 OFF FRNTRE/FIXTRES 6,200 18,500 10,501 ‐7,999 ‐43.24% Total Capital Outlay 24,950 29,000 14,001 ‐14,999 ‐51.72% Total Division Expenses 8,410,171 8,953,170 9,683,690 730,520 8.16% Total Expenses 8,410,171 8,953,170 9,683,690 730,520 8.16% Notes: 1. OPEB costs declined $440K city‐wide due to favorable actuarial experience. 2. Workers' Comp Internal Service Fund (ISF) charges to departments remained unchanged city‐wide but due to an updated cost‐allocation based on department experience, the Public Works charge decreased over $14K. 2 2014 2015 2016 $ % DESCRIPTION ADOPTED ADOPTED ADOPTED Change Change Notes Changes over 10k and over 5% noted below. 3. The normal cost of the PERS pension benefit generally increases at a rate similar to the growth of payroll plus any change to the normal cost due to changes in actuarial assumptions. 4. Employee contributions to the total cost of PERS have increased due to collective bargaining. City‐wide employee contributions increased $817K over the prior year due to an estimate total of $8.2 million. 5. City‐wide contributions to pay down the unfunded pension liability was accelerated increasing the total contribution $8.7 million to achieve a total UAL payment of $21.5 million. 12. Continued Refinement of 3 year old IT ISF Budget. Moved portion of operations hardware budget into strategic replacement budget as those funds are predominantly used to replace existing equipment versus buy net new devices. 13. General Liability ISF charges to departments increased $1 Million City‐wide. However, due to an updated actuarial cost‐ allocation, Public Works charges decreased $32k due to favorable experience. 6. An amendment to a Personal Service Agreement for traffic signal maintenance, emergency repairs and upgrades was approved by the City Council on October 28, 2014. This also included additional expenses for Caltrans maintained signals, signals shared by the City of Irvine and batteries and supplies. $240,000 was added to the Transportation/Dev. Svcs Division. 7. This change was the result of contractual increases with the County of Orange for Harbor Mooring Management. New contract effective 1/1/16. There was no increase in bottom‐line to division. There was also a reallocation of funds from 5060‐8080 (Professional / Technical Services) 8. This represents a reassignment of the division budget to separate costs for management of Balboa Yacht Basin. There was no increase in bottom‐line to this division. Funds were reallocated from 5060‐8080 (Professional / Technical Services). 9. This represents a reassignment of division budget to cover costs for maintenance of public docks, floats and piers in the correct line item. No increase in bottom‐line to this division. Funds were reallocated from 5060‐8080 (Professional / Technical Services). 10. This represents a reassignment of division budget to cover costs in correct line item for AutoCAD licensing and pavement management software. No increase in bottom‐line to this division. Funds were reallocated within the Engineering Division. 11. Continued Refinement of 3 year old IT ISF Budget. Reduction in PW operating charge to better reflect actual PW staff use of hardware, software, and IT staff time. Moved portions of Operations hardware budget into Strategic Replacement Budget. 3 ATTACHMENT D Public Works Five Year Operating Budget Overview 2012 Adopted Budget 2013 Adopted Budget % Change from Prior Year 2014 Adopted Budget % Change from Prior Year 2015 Adopted Budget % Change from Prior Year 2016 Adopted Budget % Change from Prior Year General Fund Salaries / Benefits 4,561,583.00$ 5,060,756.00$ 11%5,093,783.00$ 1%5,459,363.00$ N7 7%5,848,774.00$ N11 7% Maintenance / Operations * (Detail Below)1,262,017.00$ 1,251,925.00$ -1%1,522,882.00$ 22%1,400,139.00$ -8%1,847,313.00$ 32% Capital Outlay 10,435.00$ 13,950.00$ 34%12,950.00$ -7%29,000.00$ 124%11,500.00$ -60% General Fund Subtotal 5,834,035.00$ 6,326,631.00$ 8%6,629,615.00$ 5%6,888,502.00$ 4%7,707,587.00$ 12% Tidelands Fund Salaries / Benefits 418,559.00$ 433,321.00$ 4%470,301.00$ 9%485,091.00$ 3%513,248.00$ 6% Maintenance / Operations ** (Detail Below)970,926.00$ 1,236,158.00$ 27%1,298,256.00$ 5%1,579,577.00$ 22%1,460,356.00$ -8% Capital Outlay 12,000.00$ 12,000.00$ 0%12,000.00$ 0%-$ -100%2,501.00$ N12 Tidelands Fund Subtotal 1,401,485.00$ 1,681,479.00$ 20%1,780,557.00$ 6%2,064,668.00$ 16%1,976,105.00$ -4% Public Works Operating Budget Grand Total > > 7,235,520.00$ 8,008,110.00$ 11%8,410,172.00$ 5%8,953,170.00$ 6%9,683,692.00$ 8% * General Fund Maintenance/Operations Budget Detail Contract Services Administration - Professional Services 65,765.00$ 66,000.00$ 0%66,000.00$ 0%66,000.00$ 0%120,000.00$ N13 82% Water Quality/Environ. Professional Services 30,000.00$ 30,000.00$ 0%30,000.00$ 0%30,000.00$ 0%30,000.00$ 0% Engineering- Professional Services 44,600.00$ 103,100.00$ N3 131%303,100.00$ N5 194%200,000.00$ N8 -34%200,000.00$ 0% Transportation-Professional Services 21,500.00$ 23,500.00$ 9%173,500.00$ 638%175,000.00$ 1%225,500.00$ 29% Transportation-Maintenance & Repair Equip 1 310,000.00$ 310,000.00$ 0%310,000.00$ 0%330,000.00$ 6%570,000.00$ N14 73% Subtotal Contract Services 471,865.00$ 532,600.00$ 13%882,600.00$ 66%801,000.00$ -9%1,145,500.00$ 43% Internal Service Funds (ISF)653,182.28$ 600,518.96$ -8%513,571.68$ -14%569,519.36$ 11%583,789.44$ 3% Other Department Expenses 136,969.72$ 118,806.04$ -13%126,710.32$ 7%29,619.64$ -77%118,023.56$ 298% Total General Fund > > 1,262,017.00$ 1,251,925.00$ -1%1,522,882.00$ 22%1,400,139.00$ -8%1,847,313.00$ 32% ** Tidelands Fund Maintenance/Operations Budget Detail Contract Services Mooring Management 235,000.00$ 285,000.00$ 21%295,000.00$ 4%325,000.00$ 10% Harbor Resources - Professional Services 267,700.00$ 413,500.00$ N4 54%438,500.00$ N6 6%638,500.00$ N9 46%440,000.00$ -31% Property Maint. and Repair 2 158,620.00$ 152,020.00$ -4%146,520.00$ -4%153,470.00$ 5%235,300.00$ N15 53% Water Quality - NPDES 163,318.00$ 150,000.00$ -8%150,000.00$ 0%150,000.00$ 0%150,000.00$ 0% Water Quality - TMDL 280,000.00$ 150,000.00$ -46%160,000.00$ 7%180,000.00$ 13%200,000.00$ 11% Subtotal Contract Services 869,638.00$ 1,100,520.00$ 27%1,180,020.00$ 7%1,416,970.00$ 20%1,350,300.00$ -5% Internal Service Funds (ISF)70,966.20$ 106,637.76$ 50%92,936.16$ -13%106,707.40$ 15%57,607.56$ -46% Other Department Expenses 30,321.80$ 29,000.24$ -4%25,299.84$ -13%55,899.60$ N10 121%52,448.44$ -6% Total Tidelands Fund > > 970,926.00$ 1,236,158.00$ 27%1,298,256.00$ 5%1,579,577.00$ 22%1,460,356.00$ -8% Notes: 1 Traffic signal maint. & traffic signal maint. due to damages 9 Added $200,000 for contract engineering services 2 Contract maint. for buildings, beaches, docks, floats, public piers 10 Added $25,000 to remove derelict vessels 3 Transfer from salary savings to supplement contract inspections 11 Increased for unfunded liability and step increases 4 Added funding for Balboa Yacht Basin Management and lobby services 12 Transferred fire ring replacement to Municipal Operations Department 5 Added $200,000 for contract engineering services, primarily inspection serv.13 Added $45,000 for Marina Management at Marina Park (to be moved to Harbor Resources with Tidelands Funding) 6 Added $25,000 for contract and legal services 14 Added $240,000 for traffic signal maint. per 10/28/14 City Council action 7 15 8 Reduced contract services to offset addition of a full time Inspector Public Works Department 5 Year Operating Budget Overview Converted contract services to a full time inspector; added Assoc. Engineer; and transferred Admin. Asst. from Human Resources Moved maintenance of floats, docks, public piers to its own line item for better tracking; and moved $10,000 to building maint from Professional/Technical Services ATTACHMENT E Public Works PowerPoint Presentation Public Works Department Operating Budget Finance Committee January 14, 2016 Public Works Department Organizational Chart by Function 38.35 Total F.T.E: - 35 Full Time Employees / 3.35 Part Time Employees Public Works Department FIVE YEAR OPERATING BUDGET OVERVIEW 2012 Adopted Budget 2013 Adopted Budget % Change from Prior Year 2014 Adopted Budget % Change from Prior Year 2015 Adopted Budget % Change from Prior Year 2016 Adopted Budget % Change from Prior Year General Fund Salaries / Benefits 4,561,583.00$ 5,060,756.00$ 11%5,093,783.00$ 1%5,459,363.00$ N7 7%5,848,774.00$ N11 7% Maintenance / Operations * (Detail Below)1,262,017.00$ 1,251,925.00$ -1%1,522,882.00$ 22%1,400,139.00$ -8%1,847,313.00$ 32% Capital Outlay 10,435.00$ 13,950.00$ 34%12,950.00$ -7%29,000.00$ 124%11,500.00$ -60% General Fund Subtotal 5,834,035.00$ 6,326,631.00$ 8%6,629,615.00$ 5%6,888,502.00$ 4%7,707,587.00$ 12% Tidelands Fund Salaries / Benefits 418,559.00$ 433,321.00$ 4%470,301.00$ 9%485,091.00$ 3%513,248.00$ 6% Maintenance / Operations ** (Detail Below)970,926.00$ 1,236,158.00$ 27%1,298,256.00$ 5%1,579,577.00$ 22%1,460,356.00$ -8% Capital Outlay 12,000.00$ 12,000.00$ 0%12,000.00$ 0%-$ -100%2,501.00$ N12 Tidelands Fund Subtotal 1,401,485.00$ 1,681,479.00$ 20%1,780,557.00$ 6%2,064,668.00$ 16%1,976,105.00$ -4% Public Works Operating Budget Grand Total > > 7,235,520.00$ 8,008,110.00$ 11%8,410,172.00$ 5%8,953,170.00$ 6%9,683,692.00$ 8% * General Fund Maintenance/Operations Budget Detail Contract Services Administration - Professional Services 65,765.00$ 66,000.00$ 0%66,000.00$ 0%66,000.00$ 0%120,000.00$ N13 82% Water Quality/Environ. Professional Services 30,000.00$ 30,000.00$ 0%30,000.00$ 0%30,000.00$ 0%30,000.00$ 0% Engineering- Professional Services 44,600.00$ 103,100.00$ N3 131%303,100.00$ N5 194%200,000.00$ N8 -34%200,000.00$ 0% Transportation-Professional Services 21,500.00$ 23,500.00$ 9%173,500.00$ 638%175,000.00$ 1%225,500.00$ 29% Transportation-Maintenance & Repair Equip 1 310,000.00$ 310,000.00$ 0%310,000.00$ 0%330,000.00$ 6%570,000.00$ N14 73% Subtotal Contract Services 471,865.00$ 532,600.00$ 13%882,600.00$ 66%801,000.00$ -9%1,145,500.00$ 43% Internal Service Funds (ISF)653,182.28$ 600,518.96$ -8%513,571.68$ -14%569,519.36$ 11%583,789.44$ 3% Other Department Expenses 136,969.72$ 118,806.04$ -13%126,710.32$ 7%29,619.64$ -77%118,023.56$ 298% Total General Fund > > 1,262,017.00$ 1,251,925.00$ -1%1,522,882.00$ 22%1,400,139.00$ -8%1,847,313.00$ 32% ** Tidelands Fund Maintenance/Operations Budget Detail Contract Services Mooring Management 235,000.00$ 285,000.00$ 21%295,000.00$ 4%325,000.00$ 10% Harbor Resources - Professional Services 267,700.00$ 413,500.00$ N4 54%438,500.00$ N6 6%638,500.00$ N9 46%440,000.00$ -31% Property Maint. and Repair 2 158,620.00$ 152,020.00$ -4%146,520.00$ -4%153,470.00$ 5%235,300.00$ N15 53% Water Quality - NPDES 163,318.00$ 150,000.00$ -8%150,000.00$ 0%150,000.00$ 0%150,000.00$ 0% Water Quality - TMDL 280,000.00$ 150,000.00$ -46%160,000.00$ 7%180,000.00$ 13%200,000.00$ 11% Subtotal Contract Services 869,638.00$ 1,100,520.00$ 27%1,180,020.00$ 7%1,416,970.00$ 20%1,350,300.00$ -5% Internal Service Funds (ISF)70,966.20$ 106,637.76$ 50%92,936.16$ -13%106,707.40$ 15%57,607.56$ -46% Other Department Expenses 30,321.80$ 29,000.24$ -4%25,299.84$ -13%55,899.60$ N10 121%52,448.44$ -6% Total Tidelands Fund > > 970,926.00$ 1,236,158.00$ 27%1,298,256.00$ 5%1,579,577.00$ 22%1,460,356.00$ -8% Public Works Department 5 Year Operating Budget Overview City of Newport Beach FY 2015-16 Adopted Budget $321,051,663 *Does not include carryovers City Council 0.35% City Clerk 0.23% City Manager 0.94% Human Resources 0.81% City Attorney 0.72% Finance 2.27% Police 16.30% Fire 13.47% Municipal Operations 17.29% Library Services 2.34% Recreation & Senior Svcs 3.55% Community Development 3.26% Public Works 3.02% CIP* 19.51% Internal Service 11.64% Other 4.32% CIP* 19.51% Public Works 3.02% Public Works Department FY 2015-16 Operating Budget $9,683,692 Traffic Signal Maint. / Repair (GF) $570,000 6% Salaries/ Benefits (GF) $5,848,774 60% Salaries/ Benefits (TF) $513,248 5% Contract Services (GF) $575,500 6% Internal Service Funds (GF, TF) $641,397 7% Contract Services (TF) $1,115,000 12% Property Maint. / Repair (TF) $235,300 2% Dept. Expenses (GF) $129,524 1% Dept. Expenses (TF) $54,949 1% General Fund (GF) •Engineering Services •Transportation/ ROW Develop. Ser. •Water Quality/ Conservation/Environ. •Administration Tidelands Fund (TF) •Harbor Resources Public Works Department FY 2015-16 Operating Budget – TIDELANDS FUND $1,976,105 Mooring Management $325,000 16% Salaries/ Benefits $513,248 26% All Contract Services $1,115,000 56% ISF $57,608 3% Contract Services Other $260,000 13% Property Maint. & Repair $235,300 12% Dept. Expenses $54,949 3% WQ - TMDL $200,000 10% BYB Management $180,000 9% WQ - NPDES $150,000 8% Public Works Department FY 2015-16 Operating Budget – GENERAL FUND $7,707,587 Traffic Signal Maint. / Repair $570,000 7% Salaries/ Benefits $5,848,774 76% Contract Services $575,500 7% ISF $583,789 8% Dept. Expenses $129,524 2% The Capital Improvement Program reflects the City Council goals and objectives, infrastructure master planning documents, community needs/requests, as well as items required by laws or regulations. It: Provides a Basis for Project Planning Identifies Potential Conflicts Sets Priorities & Appropriates Funds Develops and Constructs Identified Public Improvements Addresses Significant Maintenance Projects Responds to Changing Priorities and Conditions This is formulated into an Annual Capital Improvement Budget. Capital Improvement Program General Plan & Circulation Element Pavement Management Program Traffic Signal Modernization & Rehabilitation Plan Bicycle Master Plan Water Master Plan Sewer Master Plan Street Light Master Plan Facilities Financing Plan Facilities Maintenance Plan Master Plan of Drainage 5 Year Tidelands Capital Plan 9 Planning Documents $- $2,000,000 $4,000,000 $6,000,000 $8,000,000 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 Fiscal Year CIP Baseline General Fund Contribution 00 20 40 60 80 100 120 140 160 180 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Mi l l i o n s Approved Budget Adjusted Budget New Rebudgets CIP Funding History PW - FTE 33 33 33 33 34 33 33 33 33 32 33 35 34 35 35 FY 2011/12 Public Works downsizes and adds 2 divisions: Harbor Resources and WQ/Environ. City General Fund State Gas Tax County Measure M ½¢ Sales Tax Tidelands Revenue Grants (Federal, State, Local) AQMD Clean Air Subvention Funds Federal CDBG Developer Fees (Drainage Fees, Traffic Impact Fees, Park Acquisition, etc.) Sewer Utility Charges Water Utility Charges Parking Revenues Private Contributions Other Sources of Funding for CIP Your Public Works Department: Protecting and Providing Quality A Well-Engineered Machine Public Improvements and Services Questions, Comments, and Discussion 2012 Adopted Budget 2013 Adopted Budget % Change from Prior Year 2014 Adopted Budget % Change from Prior Year 2015 Adopted Budget % Change from Prior Year 2016 Adopted Budget % Change from Prior Year General Fund Salaries / Benefits 4,561,583.00$ 5,060,756.00$ 11%5,093,783.00$ 1%5,459,363.00$ N7 7%5,848,774.00$ N11 7% Maintenance / Operations * (Detail Below)1,262,017.00$ 1,251,925.00$ -1%1,522,882.00$ 22%1,400,139.00$ -8%1,847,313.00$ 32% Capital Outlay 10,435.00$ 13,950.00$ 34%12,950.00$ -7%29,000.00$ 124%11,500.00$ -60% General Fund Subtotal 5,834,035.00$ 6,326,631.00$ 8%6,629,615.00$ 5%6,888,502.00$ 4%7,707,587.00$ 12% Tidelands Fund Salaries / Benefits 418,559.00$ 433,321.00$ 4%470,301.00$ 9%485,091.00$ 3%513,248.00$ 6% Maintenance / Operations ** (Detail Below)970,926.00$ 1,236,158.00$ 27%1,298,256.00$ 5%1,579,577.00$ 22%1,460,356.00$ -8% Capital Outlay 12,000.00$ 12,000.00$ 0%12,000.00$ 0%-$ -100%2,501.00$ N12 Tidelands Fund Subtotal 1,401,485.00$ 1,681,479.00$ 20%1,780,557.00$ 6%2,064,668.00$ 16%1,976,105.00$ -4% Public Works Operating Budget Grand Total > > 7,235,520.00$ 8,008,110.00$ 11%8,410,172.00$ 5%8,953,170.00$ 6%9,683,692.00$ 8% * General Fund Maintenance/Operations Budget Detail Contract Services Administration - Professional Services 65,765.00$ 66,000.00$ 0%66,000.00$ 0%66,000.00$ 0%120,000.00$ N13 82% Water Quality/Environ. Professional Services 30,000.00$ 30,000.00$ 0%30,000.00$ 0%30,000.00$ 0%30,000.00$ 0% Engineering- Professional Services 44,600.00$ 103,100.00$ N3 131%303,100.00$ N5 194%200,000.00$ N8 -34%200,000.00$ 0% Transportation-Professional Services 21,500.00$ 23,500.00$ 9%173,500.00$ 638%175,000.00$ 1%225,500.00$ 29% Transportation-Maintenance & Repair Equip 1 310,000.00$ 310,000.00$ 0%310,000.00$ 0%330,000.00$ 6%570,000.00$ N14 73% Subtotal Contract Services 471,865.00$ 532,600.00$ 13%882,600.00$ 66%801,000.00$ -9%1,145,500.00$ 43% Internal Service Funds (ISF)653,182.28$ 600,518.96$ -8%513,571.68$ -14%569,519.36$ 11%583,789.44$ 3% Other Department Expenses 136,969.72$ 118,806.04$ -13%126,710.32$ 7%29,619.64$ -77%118,023.56$ 298% Total General Fund > > 1,262,017.00$ 1,251,925.00$ -1%1,522,882.00$ 22%1,400,139.00$ -8%1,847,313.00$ 32% ** Tidelands Fund Maintenance/Operations Budget Detail Contract Services Mooring Management 235,000.00$ 285,000.00$ 21%295,000.00$ 4%325,000.00$ 10% Harbor Resources - Professional Services 267,700.00$ 413,500.00$ N4 54%438,500.00$ N6 6%638,500.00$ N9 46%440,000.00$ -31% Property Maint. and Repair 2 158,620.00$ 152,020.00$ -4%146,520.00$ -4%153,470.00$ 5%235,300.00$ N15 53% Water Quality - NPDES 163,318.00$ 150,000.00$ -8%150,000.00$ 0%150,000.00$ 0%150,000.00$ 0% Water Quality - TMDL 280,000.00$ 150,000.00$ -46%160,000.00$ 7%180,000.00$ 13%200,000.00$ 11% Subtotal Contract Services 869,638.00$ 1,100,520.00$ 27%1,180,020.00$ 7%1,416,970.00$ 20%1,350,300.00$ -5% Internal Service Funds (ISF)70,966.20$ 106,637.76$ 50%92,936.16$ -13%106,707.40$ 15%57,607.56$ -46% Other Department Expenses 30,321.80$ 29,000.24$ -4%25,299.84$ -13%55,899.60$ N10 121%52,448.44$ -6% Total Tidelands Fund > > 970,926.00$ 1,236,158.00$ 27%1,298,256.00$ 5%1,579,577.00$ 22%1,460,356.00$ -8% Public Works Department 5 Year Operating Budget Overview 2012 Adopted Budget 2013 Adopted Budget % Change from Prior Year 2014 Adopted Budget % Change from Prior Year 2015 Adopted Budget % Change from Prior Year 2016 Adopted Budget % Change from Prior Year General Fund Salaries / Benefits 4,561,583.00$ 5,060,756.00$ 11%5,093,783.00$ 1%5,459,363.00$ N7 7%5,848,774.00$ N11 7% Maintenance / Operations * (Detail Below)1,262,017.00$ 1,251,925.00$ -1%1,522,882.00$ 22%1,400,139.00$ -8%1,847,313.00$ 32% Capital Outlay 10,435.00$ 13,950.00$ 34%12,950.00$ -7%29,000.00$ 124%11,500.00$ -60% General Fund Subtotal 5,834,035.00$ 6,326,631.00$ 8%6,629,615.00$ 5%6,888,502.00$ 4%7,707,587.00$ 12% Tidelands Fund Salaries / Benefits 418,559.00$ 433,321.00$ 4%470,301.00$ 9%485,091.00$ 3%513,248.00$ 6% Maintenance / Operations ** (Detail Below)970,926.00$ 1,236,158.00$ 27%1,298,256.00$ 5%1,579,577.00$ 22%1,460,356.00$ -8% Capital Outlay 12,000.00$ 12,000.00$ 0%12,000.00$ 0%-$ -100%2,501.00$ N12 Tidelands Fund Subtotal 1,401,485.00$ 1,681,479.00$ 20%1,780,557.00$ 6%2,064,668.00$ 16%1,976,105.00$ -4% Public Works Operating Budget Grand Total > > 7,235,520.00$ 8,008,110.00$ 11%8,410,172.00$ 5%8,953,170.00$ 6%9,683,692.00$ 8% * General Fund Maintenance/Operations Budget Detail Contract Services Administration - Professional Services 65,765.00$ 66,000.00$ 0%66,000.00$ 0%66,000.00$ 0%120,000.00$ N13 82% Water Quality/Environ. Professional Services 30,000.00$ 30,000.00$ 0%30,000.00$ 0%30,000.00$ 0%30,000.00$ 0% Engineering- Professional Services 44,600.00$ 103,100.00$ N3 131%303,100.00$ N5 194%200,000.00$ N8 -34%200,000.00$ 0% Transportation-Professional Services 21,500.00$ 23,500.00$ 9%173,500.00$ 638%175,000.00$ 1%225,500.00$ 29% Transportation-Maintenance & Repair Equip 1 310,000.00$ 310,000.00$ 0%310,000.00$ 0%330,000.00$ 6%570,000.00$ N14 73% Subtotal Contract Services 471,865.00$ 532,600.00$ 13%882,600.00$ 66%801,000.00$ -9%1,145,500.00$ 43% Internal Service Funds (ISF)653,182.28$ 600,518.96$ -8%513,571.68$ -14%569,519.36$ 11%583,789.44$ 3% Other Department Expenses 136,969.72$ 118,806.04$ -13%126,710.32$ 7%29,619.64$ -77%118,023.56$ 298% Total General Fund > > 1,262,017.00$ 1,251,925.00$ -1%1,522,882.00$ 22%1,400,139.00$ -8%1,847,313.00$ 32% ** Tidelands Fund Maintenance/Operations Budget Detail Contract Services Mooring Management 235,000.00$ 285,000.00$ 21%295,000.00$ 4%325,000.00$ 10% Harbor Resources - Professional Services 267,700.00$ 413,500.00$ N4 54%438,500.00$ N6 6%638,500.00$ N9 46%440,000.00$ -31% Property Maint. and Repair 2 158,620.00$ 152,020.00$ -4%146,520.00$ -4%153,470.00$ 5%235,300.00$ N15 53% Water Quality - NPDES 163,318.00$ 150,000.00$ -8%150,000.00$ 0%150,000.00$ 0%150,000.00$ 0% Water Quality - TMDL 280,000.00$ 150,000.00$ -46%160,000.00$ 7%180,000.00$ 13%200,000.00$ 11% Subtotal Contract Services 869,638.00$ 1,100,520.00$ 27%1,180,020.00$ 7%1,416,970.00$ 20%1,350,300.00$ -5% Internal Service Funds (ISF)70,966.20$ 106,637.76$ 50%92,936.16$ -13%106,707.40$ 15%57,607.56$ -46% Other Department Expenses 30,321.80$ 29,000.24$ -4%25,299.84$ -13%55,899.60$ N10 121%52,448.44$ -6% Total Tidelands Fund > > 970,926.00$ 1,236,158.00$ 27%1,298,256.00$ 5%1,579,577.00$ 22%1,460,356.00$ -8% Notes: 1 Traffic signal maint. & traffic signal maint. due to damages 9 Added $200,000 for contract engineering services 2 Contract maint. for buildings, beaches, docks, floats, public piers 10 Added $25,000 to remove derelict vessels 3 Transfer from salary savings to supplement contract inspections 11 Increased for unfunded liability and step increases 4 Added funding for Balboa Yacht Basin Management and lobby services 12 Transferred fire ring replacement to Municipal Operations Department 5 Added $200,000 for contract engineering services, primarily inspection serv.13 Added $45,000 for Marina Management at Marina Park (to be moved to Harbor Resources with Tidelands Funding) 6 Added $25,000 for contract and legal services 14 Added $240,000 for traffic signal maint. per 10/28/14 City Council action 7 15 8 Reduced contract services to offset addition of a full time Inspector Public Works Department 5 Year Operating Budget Overview Converted contract services to a full time inspector; added Assoc. Engineer; and transferred Admin. Asst. from Human Resources Moved maintenance of floats, docks, public piers to its own line item for better tracking; and moved $10,000 to building maint from Professional/Technical Services CITY OF NEWPORT BEACH FINANCE COMMITTEE STAFF REPORT Agenda Item No. 5C January 14, 2016 TO: HONORABLE CHAIRMAN AND MEMBERS OF THE COMMITTEE FROM: Finance Department Dan Matusiewicz, Finance Director (949) 644-3123, danm@newportbeachca.gov SUBJECT: Review of Facilities Financial Planning Tool (FFPT) DISCUSSION: City Council Policy F-28, Facilities Financing Plan (FFP), requires that staff prepare an update to the long-term facilities replacement plan annually. Each year, as part of the budget process, staff shall prepare an update of the Facilities Financial Planning Tool for review, modification, and approval by the City Council. Staff has projected the timing, means of financing, and fiscal impacts associated with funding high-priority projects recently in the CIP budget. Staff recommends that the Committee directs staff to bring the attached Facilities Financial Plan for City Council approval. Prepared and submitted by: /s/Dan Matusiewicz Dan Matusiewicz Finance Director Attachment: A. FFP Tool ATTACHMENT A FFP Tool 01/14/2016 Start Start Est. Project Date Date Priority Projects Cost (Design)(Construction) 20 Marina Park 37,000,000 2011 2014 29 Bonita Creek - Artificial Turf 2,000,000 2025 2025 5 FS 2 - Lido 8,000,000 2016 2017 8 FS 5 - CDM (& Library)7,460,000 2015 2016 9 FS 6 - Mariners (apparatus bay only)1,200,000 2015 2016 25 Sunset View Park w/Ped Bridges & Dog Park 10,450,000 2016 2018 26 West Newport Comm Ctr (incl pool)25,000,000 2015 2018 39 Utilities/Corporate Yard Merge- Phase I 4,000,000 2018 2020 3 FS 1 - Peninsula (& Library)6,100,000 2018 2020 6 FS 3 - Santa Barbara 8,000,000 2022 2025 2 Police Station at Corporate Yard 48,000,000 2022 2025 1 2 ******** Total 157,210,000 2016 2018 Marina Park Completion Sunset View Park w/Ped Bridges & Dog Park Bonita Creek - Artificial Turf West Newport Comm Ctr (incl pool) FS 2 - Lido FS 5 - CDM (& Library) FS 6 - Mariners (apparatus bay only) 2020 2025 Utilities/Corporate Yard Merge- Phase I FS 3 - Santa Barbara FS 1 - Peninsula (& Library)Police Station at Corporate Yard 3 4 FS 3 - Santa Barbara Key Metric Target Max Debt Svc as % of Revenues NA < 8.0% Minimum FFP Reserve Balance (000's)8,194$ NA Key Statistics Min Max Avg GF Contribution to FFP (000's)8,000 14,080 11,382 Debt Service (000's)7,443 8,194 7,706 GF Contributions to FFP as % Rev 4.43%5.0%4.9% Debt Svc as % of Revenues 2.64%4.6%3.4% 5 6 FFP Balance (000's)13,513$ 44,365$ 32,902$ Project Balance (000's)0$ 29,764$ 11,609$ Key Statistics Min Max Avg GF Contribution to FFP (000's)8,000 20,691 14,437 Debt Service (000's)- 8,194 6,804 GF Contributions to FFP as % Rev 4.43%5.0%5.0% Debt Svc as % of Revenues 0.00%4.6%2.6% FFP Reserve Balance (000's)13,513$ 238,886$ 80,706$ Project Balance (000's)0$ 29,764$ 6,205$ 7 8 Remaining Debt Capacity (Dbt. Svc < or = 8% of GF Rev):95.4$ Million 30 Year Council Debt Mgmt Policy (F-6) 15 Year Scenario Highlights 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% 8.00% 9.00% 10.00% 20 1 5 20 1 7 20 1 9 20 2 1 20 2 3 20 2 5 20 2 7 20 2 9 20 3 1 20 3 3 20 3 5 20 3 7 20 3 9 20 4 1 20 4 3 20 4 5 GF Contribution to FFP as a Percent of GF Revenue GF Contribution % Budget Debt Service - as % of Revenues $0 $5,000,000 $10,000,000 $15,000,000 $20,000,000 $25,000,000 20 1 5 20 1 7 20 1 9 20 2 1 20 2 3 20 2 5 20 2 7 20 2 9 20 3 1 20 3 3 20 3 5 20 3 7 20 3 9 20 4 1 20 4 3 20 4 5 GF Contribution to FFP Compared to Debt Service GF Contribution to FFP Debt Service - 50,000,000 100,000,000 150,000,000 200,000,000 250,000,000 300,000,000 20 1 5 20 1 7 20 1 9 20 2 1 20 2 3 20 2 5 20 2 7 20 2 9 20 3 1 20 3 3 20 3 5 20 3 7 20 3 9 20 4 1 20 4 3 20 4 5 FFP Reserve Balance - 5,000,000 10,000,000 15,000,000 20,000,000 25,000,000 30,000,000 35,000,000 40,000,000 45,000,000 20 1 5 20 1 7 20 1 9 20 2 1 20 2 3 20 2 5 20 2 7 20 2 9 20 3 1 20 3 3 20 3 5 20 3 7 20 3 9 20 4 1 20 4 3 20 4 5 Project Funding Cash Funded Construction Debt Funded Construction - 5,000,000 10,000,000 15,000,000 20,000,000 25,000,000 30,000,000 35,000,000 40,000,000 45,000,000 20 1 5 20 1 7 20 1 9 20 2 1 20 2 3 20 2 5 20 2 7 20 2 9 20 3 1 20 3 3 20 3 5 20 3 7 20 3 9 20 4 1 20 4 3 20 4 5 Project Expenditures - 5,000,000 10,000,000 15,000,000 20,000,000 25,000,000 30,000,000 35,000,000 40,000,000 20 1 5 20 1 7 20 1 9 20 2 1 20 2 3 20 2 5 20 2 7 20 2 9 20 3 1 20 3 3 20 3 5 20 3 7 20 3 9 20 4 1 20 4 3 20 4 5 Debt Service Capacity Max Debt Service - 8% of Revenues Debt Service 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% 8.00% 9.00% 10.00% 20 1 5 20 1 7 20 1 9 20 2 1 20 2 3 20 2 5 20 2 7 20 2 9 20 3 1 20 3 3 20 3 5 20 3 7 20 3 9 20 4 1 20 4 3 20 4 5 Debt Service as % of GF Revenues Debt Service - as % of Revenues - 5,000,000 10,000,000 15,000,000 20,000,000 25,000,000 30,000,000 35,000,000 2015 2016 2017 2018 2019 Annual GF Contributions Periodic GF or One-time Transfers Private Contributions Interest Earnings Cash Contributions Project Total Interest Debt Service Description Year Proceeds COI Issue Rate Term Maturity 2010 Civic Center COPs 2011 123,000,000 1,289,442 124,289,442 4.4%30 2041 Traunch 2 0 - - - 5.0%30 30 Traunch 3 0 - - - 5.0%30 30 1 of 7 FY FY FV Net YR Major Current Repl Est $Current Age:Useful Years to Project Design Start Const Start Cost Est @ Private Proposed Function Project Built Remodel Sq Ft Sq Ft /Sq Ft 2016 Life Start Estimate Year Year 2.5% Growth Contribtions Cost Gen Gov Civic Center 2013 100,000 100,000 675 3 60 57 67,500,000 2070 2073 - - Gen Gov Council Chambers 2013 29,000 29,000 675 3 60 57 19,575,000 2070 2073 - - Gen Gov Civic Center Parking Structure 2013 450 450 16,000 3 60 57 7,200,000 2070 2073 - - Police Police Station at Corporate Yard 1973 48,000 60,000 800 43 50 9 48,000,000 2022 2025 59,945,423 59,945,423 Municipal Operations Utilities/Corporate Yard Merge- Phase I 138,185 **50 4 4,000,000 2018 2020 4,415,252 4,415,252 Municipal Operations Big Canyon Aux. Yard 2015 9,000 9,000 575 1 50 51 1,400,000 2062 2065 - Fire FS 2 - Land Purchase **- 2017 2017 - - Fire FS 1 - Peninsula (& Library)1962 3,423 8,000 763 54 50 4 6,100,000 2018 2020 6,733,259 6,733,259 Fire FS 2 - Lido 1952 9,953 10,000 800 64 50 1 8,000,000 2016 2017 8,200,000 8,200,000 Fire FS 3 - Santa Barbara 1971 13,605 10,000 800 45 50 9 8,000,000 2022 2025 9,990,904 9,990,904 Fire FS 4 - Balboa Island 1994 4,597 4,400 800 22 50 28 3,520,000 2041 2044 7,027,662 7,027,662 Fire FS 5 - CDM (& Library)1950 2,495 9,800 761 66 50 0 7,460,000 2015 2016 7,460,000 7,460,000 Fire FS 6 - Mariners (apparatus bay only)1957 2,926 1,500 675 59 50 0 1,200,000 2015 2016 1,200,000 1,200,000 Fire FS 6 - Mariners (Living Area Rebuild)1957 3,000 800 59 9 2024 2025 - - Fire FS 7 - SAH 2007 11,027 6,500 800 9 50 41 5,200,000 2054 2057 14,311,390 14,311,390 Fire FS 8 - Npt. Coast 1995 11,027 11,027 800 21 50 29 8,821,600 2042 2045 18,052,587 18,052,587 Fire Lifeguard HQ Replacement 2015 6,167 5,500 800 **25 24 4,400,000 2038 2040 7,958,394 7,958,394 Fire Newport Jr. Guard Building 0 2015 2,225 575 **8 1,279,375 2022 2024 1,558,794 1,558,794 - Library Library-Balboa (Construct w/ FS-1)1962 5,566 3,000 700 54 50 46 - 2059 2062 - - Library Library-CDM (Construct w/ FS-5)1958 4,323 3,800 700 58 50 46 - 2059 2062 - - Library Library-Mariners 2006 15,305 15,305 575 10 50 40 - 2053 2056 - - Library Library-Central 1997 50,930 65,000 575 19 50 36 37,375,000 2049 2052 90,916,007 90,916,007 Rec Facility Marina Park 2015 22,000 575 1 50 -2 37,000,000 2011 2014 37,000,000 4,761,512 32,238,488 Rec Facility Newport Coast Ctr 2007 16,865 16,865 575 9 50 41 9,697,375 2054 2057 26,689,023 26,689,023 Rec Facility Newport Theatre Arts Center 1973 8,042 12,000 575 43 50 14 6,900,000 2027 2030 9,749,519 4,874,760 4,874,760 Rec Facility OASIS Sr. Ctr 2010 36,467 43,232 575 6 60 44 24,858,400 2057 2060 73,675,527 73,675,527 Rec Facility Sunset Ridge 2014 **NA 2 ∞-2 8,020,754 2014 2014 8,020,754 8,020,754 Rec Facility Sunset View Park w/Ped Bridges & Dog Park 0 **NA **∞2 10,450,000 2016 2018 10,979,031 5,000,000 5,979,031 Rec Facility West Newport Comm Ctr (incl pool)2017 11,980 25,000 575 -1 50 2 25,000,000 2015 2018 26,265,625 26,265,625 Rec Facility Bonita Creek - Artificial Turf 2015 160,000 NA 12 1 15 9 2,000,000 2025 2025 2,497,726 2,497,726 Rec Facility Community Youth Center (CYC) - Grant Howald 1988 5,146 5,146 575 28 50 16 2,958,950 2029 2032 4,392,578 4,392,578 Rec Facility Caroll Beek Center 1980 1,555 1,555 575 36 50 17 894,125 2030 2033 1,360,517 1,360,517 Rec Facility Bonita Creek Community Ctr.1988 2,876 2,876 575 28 50 22 1,653,700 2035 2038 2,846,963 2,846,963 Rec Facility Cliff Drive Community Room 1960 750 750 575 56 50 20 431,250 2033 2036 706,653 706,653 Rec Facility Girls & Boys Club (East Bluff Park)1965 11,800 11,800 575 51 50 6 6,785,000 2020 2022 7,868,520 7,868,520 - Rec Facility Lawn Bowling Facility (San Joaquin Hills Park)1974 2,750 2,750 575 42 50 23 1,581,250 2036 2039 2,790,291 2,790,291 383,769,978 456,920,598 432,857,012 Fire FS 2 - Land Purchase **1,500,000 2,017 2017 Library Library-Balboa (Construct w/ FS-1)1962 5,566 3,000 700 5400%50 46 2,100,000 Library Library-CDM (Construct w/ FS-5)1958 4,323 3,800 700 5800%50 46 2,660,000 2 of 7 1 2 3 4 5 6 7 8 9 10 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 AFFORDABILITY ASSUMPTIONs General Fund Revenues 180,000,000 191,750,000 197,502,500 203,427,575 209,530,402 215,816,314 222,290,804 228,959,528 235,828,314 242,903,163 250,190,258 257,695,966 Growth Assumption 3.20%6.53%3.00%3.00%3.00%3.00%3.00%3.00%3.00%3.00%3.00%3.00% GF Annual Contribution %4.44%4.43%5.00%5.00%5.00%5.00%5.00%5.00%5.00%5.00%5.00%5.00% Debt Service as % of GF Revenues 4.55%4.26%4.05%3.93%3.81%3.69%3.38%3.28%3.18%3.08%2.98%2.89% FFP SOURCES Beginning FFP Balance 11,606,070 13,928,520 13,513,477 33,194,654 44,250,709 36,291,379 28,381,694 28,167,361 30,006,079 35,548,691 41,584,493 41,156,344 Sources Annual GF Contributions 8,000,000 8,500,000 9,875,125 10,171,379 10,476,520 10,790,816 11,114,540 11,447,976 11,791,416 12,145,158 12,509,513 12,884,798 Periodic GF or One-time Transfers Private Contributions 34,580,841 4,094,606 22,604,570 11,855,091 669,018 551,701 634,378 651,018 666,939 683,846 701,238 29,864,314 Interest Earnings 237,935 174,106 202,702 580,906 885,014 725,828 567,634 563,347 600,122 710,974 831,690 823,127 Total Sources:42,818,776 12,768,712 32,682,398 22,607,376 12,030,552 12,068,345 12,316,552 12,662,342 13,058,477 13,539,977 14,042,441 43,572,239 Uses Debt Service (8,194,455) (8,172,755) (7,990,221) (7,990,321) (7,978,881) (7,967,030) (7,519,886) (7,511,985) (7,504,864) (7,493,175) (7,459,589) (7,457,662) Other Fiscal Charges (4,572) (11,000) (11,000) (11,000) (11,000) (11,000) (11,000) (11,000) (11,000) (11,000) (11,000) (11,000) Less: Cash Proj Funding (32,297,299) (5,000,000) (5,000,000) (3,550,000) (12,000,000) (12,000,000) (5,000,000) (3,300,640) - - (7,000,001) (39,057,657) Total Uses:(40,496,326) (13,183,755) (13,001,221) (11,551,321) (19,989,881) (19,978,030) (12,530,886) (10,823,624) (7,515,864) (7,504,175) (14,470,590) (46,526,319) Projected FFP Balance 13,928,520 13,513,477 33,194,654 44,250,709 36,291,379 28,381,694 28,167,361 30,006,079 35,548,691 41,584,493 41,156,344 38,202,264 PROJECT SOURCES Beginning Balance 21,091,028 29,764,129 24,773,510 24,310,510 17,617,681 9,611,024 11,303,204 10,171,523 9,570,185 9,570,185 9,570,185 9,326,780 CASH FUNDING FROM FFP 32,297,299 5,000,000 5,000,000 3,550,000 12,000,000 12,000,000 5,000,000 3,300,640 7,000,001 39,057,657 PRIVATE CONTRIBUTIONS - - - - - - - - - - - - DEBT FUNDING - 2010 Civic Center COPs - - - - - - - - - - - - TOTAL DEBT FUNDING - - - - - - - - - - - - Interest on Debt Proceeds - - - - - - - - - - - - TOTAL PROJECT RESOURCES 53,388,327 34,764,129 29,773,510 27,860,510 29,617,681 21,611,024 16,303,204 13,472,163 9,570,185 9,570,185 16,570,185 48,384,437 PROJECT USES Future Cost 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Fire FS 1 - Peninsula & Library 6,733,259 - - - - - (673,326) (3,703,292) (2,356,641) - - - - Fire FS 2 - Lido 8,200,000 (69,137) - (820,000) (4,440,863) (2,870,000) - - - - - - - Fire FS 3 - Santa Barbara 9,990,904 - - - - - - - - - - (999,090) (5,494,997) Fire FS 4 - Balboa Island 7,027,662 - - - - - - - - - - - - Fire FS 5 - CDM & Library 7,460,000 - (746,000) (4,103,000) (2,611,000) - - - - - - - - Fire FS 6 - Mariners (apparatus bay only)1,200,000 - (660,000) (540,000) - - - - - - - - - Fire FS 6 - Mariners (Living Area Rebuild)- - - - - - - - - - - - - Fire FS 7 - SAH 14,311,390 - - - - - - - - - - - - Fire FS 8 - Npt. Coast 18,052,587 - - - - - - - - - - - - Fire Lifeguard HQ Remodel 7,958,394 (154,999) - - - - - - - - - - - Fire Newport Jr. Guard Building - - - - - - - - - - - - - Library Library-Mariners - - - - - - - - - - - - - Library Library-Central 90,916,007 - - - - - - - - - - - - MOD Utilities/Corporate Yard Merge 4,415,252 (165,394) - - - - (441,525) (2,428,388) (1,545,338) - - - - MOD Big Canyon Aux. Yard - - - - - - - - - - - - - Police Police Station @ Current Cite.59,945,423 - - - - - - - - - - (5,994,542) (32,969,982) Rec Marina Park 32,238,488 (17,414,817) (8,584,619) - - - - - - - - - - Rec Newport Coast Ctr 26,689,023 - - - - - - - - - - - - Rec Newport Thearter Arts Center 4,874,760 - - - - - - - - - - - - Rec OASIS Sr. Ctr 73,675,527 - - - - - - - - - - - - Rec Sunset Ridge 8,020,754 (2,996,700) - - - - - - - - - - - Rec Sunset View Park 5,979,031 - - - (597,903) (2,690,564) - - - - - - - Rec West Newport Comm Ctr (incl pool)26,265,625 (33,500) - - (2,593,063) (14,446,094) (9,192,969) - - - - - - Rec Pedestrian Bridge at Superior/PCH - - - - - - - - - - - - - Miscellaneous Projects (2,520,011) Rec Parking Structure at Superior/PCH - - - - - - - - - - - - - Rec Bonita Creek - Artificial Turf 2,497,726 - - - - - - - - - - (249,773) (1,373,749) Rec Caroll Beek Center 1,360,517 - - - - - - - - - - - - Rec Bonita Creek Community Ctr.2,846,963 - - - - - - - - - - - - Rec Cliff Drive Community Room 706,653 - - - - - - - - - - - - Rec Girls & Boys Club (East Bluff Park)- - - - - - - - - - - - - TOTAL PROJECT EXPENDITURES 432,857,012 (23,624,198) (9,990,619) (5,463,000) (10,242,829) (20,006,658) (10,307,820) (6,131,681) (3,901,979) - - (7,243,405) (39,838,729) ENDING BALANCE OF PROJECT RESOURCES 29,764,129 24,773,510 24,310,510 17,617,681 9,611,024 11,303,204 10,171,523 9,570,185 9,570,185 9,570,185 9,326,780 8,545,708 Sources and Uses Proforma 3 of 7 AFFORDABILITY ASSUMPTIONs General Fund Revenues Growth Assumption GF Annual Contribution % Debt Service as % of GF Revenues FFP SOURCES Beginning FFP Balance Sources Annual GF Contributions Periodic GF or One-time Transfers Private Contributions Interest Earnings Total Sources: Uses Debt Service Other Fiscal Charges Less: Cash Proj Funding Total Uses: Projected FFP Balance PROJECT SOURCES Beginning Balance CASH FUNDING FROM FFP PRIVATE CONTRIBUTIONS DEBT FUNDING 2010 Civic Center COPs TOTAL DEBT FUNDING Interest on Debt Proceeds TOTAL PROJECT RESOURCES PROJECT USES Future Cost Fire FS 1 - Peninsula & Library 6,733,259 Fire FS 2 - Lido 8,200,000 Fire FS 3 - Santa Barbara 9,990,904 Fire FS 4 - Balboa Island 7,027,662 Fire FS 5 - CDM & Library 7,460,000 Fire FS 6 - Mariners (apparatus bay only)1,200,000 Fire FS 6 - Mariners (Living Area Rebuild)- Fire FS 7 - SAH 14,311,390 Fire FS 8 - Npt. Coast 18,052,587 Fire Lifeguard HQ Remodel 7,958,394 Fire Newport Jr. Guard Building - Library Library-Mariners - Library Library-Central 90,916,007 MOD Utilities/Corporate Yard Merge 4,415,252 MOD Big Canyon Aux. Yard - Police Police Station @ Current Cite.59,945,423 Rec Marina Park 32,238,488 Rec Newport Coast Ctr 26,689,023 Rec Newport Thearter Arts Center 4,874,760 Rec OASIS Sr. Ctr 73,675,527 Rec Sunset Ridge 8,020,754 Rec Sunset View Park 5,979,031 Rec West Newport Comm Ctr (incl pool)26,265,625 Rec Pedestrian Bridge at Superior/PCH - Miscellaneous Projects Rec Parking Structure at Superior/PCH - Rec Bonita Creek - Artificial Turf 2,497,726 Rec Caroll Beek Center 1,360,517 Rec Bonita Creek Community Ctr.2,846,963 Rec Cliff Drive Community Room 706,653 Rec Girls & Boys Club (East Bluff Park)- TOTAL PROJECT EXPENDITURES 432,857,012 ENDING BALANCE OF PROJECT RESOURCES Sources and Uses Proforma 11 12 13 14 15 16 17 18 19 20 21 22 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 265,426,845 273,389,650 281,591,340 290,039,080 298,740,252 307,702,460 315,395,021 323,279,897 331,361,894 339,645,941 348,137,090 356,840,517 3.00%3.00%3.00%3.00%3.00%3.00%2.50%2.50%2.50%2.50%2.50%2.50% 5.00%5.00%5.00%5.00%5.00%5.00%5.00%5.00%5.00%5.00%5.00%5.00% 2.81%2.72%2.64%2.56%2.48%2.41%2.35%2.29%2.23%2.17%2.11%2.06% 38,202,264 28,700,150 36,239,308 44,365,327 52,601,744 59,309,672 67,642,111 75,564,808 85,085,728 95,852,987 108,360,592 121,586,093 13,271,342 13,669,483 14,079,567 14,501,954 14,937,013 15,385,123 15,769,751 16,163,995 16,568,095 16,982,297 17,406,855 17,842,026 737,370 756,155 775,437 795,230 1,152,167 1,183,121 1,214,931 1,247,622 890,355 995,113 1,024,966 1,055,715 764,045 574,003 724,786 887,307 1,052,035 1,186,193 1,352,842 1,511,296 1,701,715 1,917,060 2,167,212 2,431,722 14,772,758 14,999,641 15,579,790 16,184,490 17,141,214 17,754,437 18,337,524 18,922,913 19,160,164 19,894,470 20,599,032 21,329,463 (7,457,661) (7,449,483) (7,442,771) (7,437,073) (7,422,286) (7,410,998) (7,403,827) (7,390,993) (7,381,905) (7,375,865) (7,362,532) (7,356,134) (11,000) (11,000) (11,000) (11,000) (11,000) (11,000) (11,000) (11,000) (11,000) (11,000) (11,000) (11,000) (16,806,211) - - (500,000) (3,000,000) (2,000,000) (3,000,000) (2,000,000) (1,000,000) - - (500,000) (24,274,872) (7,460,483) (7,453,771) (7,948,073) (10,433,286) (9,421,998) (10,414,827) (9,401,993) (8,392,905) (7,386,865) (7,373,532) (7,867,134) 28,700,150 36,239,308 44,365,327 52,601,744 59,309,672 67,642,111 75,564,808 85,085,728 95,852,987 108,360,592 121,586,093 135,048,421 8,545,708 0 0 0 12,524 331,406 185,983 634,013 348,326 872,145 801,480 412,821 16,806,211 500,000 3,000,000 2,000,000 3,000,000 2,000,000 1,000,000 500,000 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 25,351,919 0 0 500,000 3,012,524 2,331,406 3,185,983 2,634,013 1,348,326 872,145 801,480 912,821 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 - - - - - - - - - - - - - - - - - - - - - - - - (3,496,816) - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - (20,980,898) - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - (487,476) (2,681,118) (1,706,166) - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - (874,204) - - - - - - - - - - - - - - - - - (136,052) (748,284) (476,181) - - - - - - - - - - - - - - (284,696) - - - - - - - - - (70,665) (388,659) (247,329) - - - - - - - - - - - - (25,351,918) - - (487,476) (2,681,118) (2,145,424) (2,551,970) (2,285,687) (476,181) (70,665) (388,659) (532,025) 0 0 0 12,524 331,406 185,983 634,013 348,326 872,145 801,480 412,821 380,796 4 of 7 DEBT SERVICE Avg 0 1 2 3 4 5 6 7 8 Debt 2015 2016 2017 2018 2019 2020 2021 2022 2023 Project Total Interest Service Debt Service Description Year Proceeds COI Issue Rate Term Maturity (Net) 2010 Civic Center COPs 2011 123,000,000 1,289,442 124,289,442 4.4%30 2041 (7,614,280) (8,194,455) (8,172,755) (7,990,221) (7,990,321) (7,978,881) (7,967,030) (7,519,886) (7,511,985) (7,504,864) Traunch 2 0 - - - 5.0%30 30 - - - - - - - - - - Traunch 3 0 - - - 5.0%30 30 - - - - - - - - - Traunch 4 0 - - - 5.0%30 30 - - - - - - - - - - Traunch 5 0 - - - 5.0%30 30 - - - - - - - - - - Traunch 6 0 - - - 5.0%30 30 - - - - - - - - - - Traunch 7 0 - - - 5.0%30 30 - - - - - - - - - - Traunch 8 0 - - - 5.0%30 30 - - - - - - - - - - Traunch 9 0 - - - 5.0%30 30 - - - - - - - - - - Traunch 10 0 - - - 5.0%30 30 - - - - - - - - - - TOTAL DEBT (7,614,280) (8,194,455) (8,172,755) (7,990,221) (7,990,321) (7,978,881) (7,967,030) (7,519,886) (7,511,985) (7,504,864) 5 of 7 DEVELOPMENT AGREEMENTS AND PRIVATE CONTRIBUTIONS General TOTAL Public Park Public Arts FFP Agreement REF Description Trigger Benefit Benefit & Culture BENEFIT Total Hoag OASIS Pledge May 12, 2009 Pledge Letter Payment Schedule 500,000 - - 500,000 500,000 500,000 OK Hoag OASIS Pledge May 12, 2009 Pledge Letter Payment Schedule 500,000 - - 500,000 500,000 500,000 OK Hoag OASIS Pledge May 12, 2009 Pledge Letter Payment Schedule 1,500,000 - - 1,500,000 1,500,000 1,500,000 OK 2,500,000 - - 2,500,000 2,500,000 Friends of Oasis Pledge Oasis Construction Restricted for Oasis Only 2,000,000 - - 2,000,000 2,000,000 2,000,000 OK North Newport Center 4.1 In Lieu Park Fees Paid within 5 Days of Award of OASIS Contract - 5,600,000 5,600,000 5,600,000 5,600,000 OK North Newport Center 4.1 In Lieu Park Fees 430 $$26,046.51 Milestone Pmts - 5,600,000 5,600,000 5,600,000 5,600,000 OK North Newport Center T2 4.1 94 Units x $26,046.51 Milestone Pmts 2,448,372 2,448,372 2,448,372 2,448,372 OK North Newport Center 4.2 1 Issuance of First Building Permit 13,545,000 - 13,545,000 13,545,000 13,545,000 OK North Newport Center 4.2 Public Benefit Fee - 430 Units @ $31,500 Issuance of remaining 430 Residential Building Permits 13,545,000 - (270,900) 13,274,100 13,274,100 13,545,000 FIX North Newport Center T2 Amended Agrmt Public Benefit Fee - 94 Units @ $63,000 Issuance of 431 st permit - 524 th permit 5,922,000 (118,440) 5,803,560 5,803,560 5,922,000 FIX North Newport Center 4.4 Street Widening and Traffic Signals Within 30 Days of Reimbursement Request - - 2,500,000 - OK North Newport Center Amended Agrmt Bayside Drive Walkway Connection Within 90 Days of written notice after award of contract 200,000 200,000 200,000 200,000 OK 33,212,000 13,648,372 (389,340) 46,471,032 48,971,032 The Dart Development (24 units)(PA2012-146) - 600,875 600,875 600,875 600,875 OK Newport Bay Marina (27 units) (PA2001-210)- 186,147 186,147 186,147 186,147 OK Via Lido Mixed Use(2 units) (PA2010-081)- 104,500 104,500 104,500 104,500 OK 2218 Channel Rd.Abell John & Helou Carol - 26,125 26,125 26,125 26,125 OK Plaza CDM (6 Units) (PA2010-061) - 104,500 104,500 104,500 104,500 OK 214 Narcissus (1 Units) (PA2011-192)- - - - OK 604 Acacia Ave (PA2012-005) - 26,125 26,125 26,125 26,125 OK 610 Larkspur LLC (NP2013-003)- 26,125 26,125 26,125 26,125 OK 416 Orchid Ave.- 26,125 26,125 26,125 26,125 OK Cohen Galina - 309 Goldenrod - 26,125 26,125 26,125 26,125 OK 819 W. Balboa NP2012-010 26,125 26,125 26,125 26,125 OK Friend of the Oasis 35,000 35,000 35,000 35,000 OK 35,000 1,152,772 - 1,187,772 1,187,772 Hoag DA # 5 8.2 Semeniuk Slough Study $200K Fee Eliminated with with DA amendment in 2008 - - - - - - OK Hoag DA # 5 8.2 Reimb City related to Superior Ave Medians Completion of Project Expenditures - - - - 1,500,000 - OK Hoag DA # 5 8.2 Public Benefit (Park or Pub Safety)Paid June 2009 Xfred to Facilities Reserve 1,500,000 - - 1,500,000 1,500,000 1,500,000 OK Hoag DA # 5 8.4 Sunset View Park, Shrub & Groundcover Pending Improvements - 150,000 - 150,000 150,000 150,000 OK 1,500,000 150,000 - 1,650,000 3,150,000 Santa Barbara Condos - - - Santa Barbara Condos Section 3.3 of MOA Unrestricted Public Benefit Concurrent with Certificate of Occupancy 1,645,566 - (32,911) 1,612,655 1,612,655 1,645,566 FIX Santa Barbara Condos Section 3.3 of MOA Unrestricted Public Benefit Concurrent with Certificate of Occupancy 3,354,434 - (67,089) 3,287,345 3,287,345 3,287,345 OK Santa Barbara Condos (NP2005-014)Section 3.2 of MOA 79 Units x $26,046.51 Fee due at building permit issue 2,061,834 - 2,061,834 2,061,834 2,061,834 OK 5,000,000 2,061,834 (100,000) 6,961,834 6,961,834 Banning Ranch Section 3.1 1375 x 30,909 x 80% (Haircut Assumption)Each Building Permit 27,663,555 - - 27,663,555 27,663,555 - UNKNOWN Uptown Newport $32,500/Unit - 1,244 Units - - - - Phase I - 680 Units a) 455 b) 225 PRIOR TO EACH BUILDING PERMIT 22,100,000 (442,000) 21,658,000 22,624,665 22,624,665 OK Phase II - 564 Units PRIOR TO EACH BUILDING PERMIT 18,330,000 (366,600) 17,963,400 18,594,856 18,594,856 OK In Lieu Park Fees - Phase I PRIOR TO EACH BUILDING PERMIT-Less Park Credits - 10,143,361 10,143,361 10,143,361 10,143,361 OK In Lieu Park Fees - Phase II PRIOR TO EACH BUILDING PERMIT-Less Park Credits - 10,550,389 10,550,389 10,550,389 10,550,389 OK 40,430,000 20,693,750 (808,600) 60,315,150 61,913,271 NB Country Club 3.1 54,819 x 10.00 Golf Club Clubhouse Issuance of First Building Permits 562,196 - (11,244) 550,952 550,952 562,196 FIX Dunes Settlement Section C(e)Restaurant on Parcel B2 Issuance of Building Permit 50,000 - (1,000) 49,000 49,000 49,000 OK Dunes Settlement Section C(f)Family Inn Issuance of Building Permit 100,000 - (2,000) 98,000 98,000 98,000 OK Dunes Settlement Section C(g)Family Inn Prior to Occupancy 410,402 - (8,208) 402,194 402,194 402,194 OK 560,402 - (11,208) 549,194 549,194 Golf Reality Fund (GRF)3.1 Tennis Club Reconstruction 3,725 x $10.00 Issuance of Building Permit 37,250 (745) 36,505 36,505 36,505 OK Golf Reality Fund (GRF)3.1 Single Family Homes $5 x $93,000 Single Family Homes 465,000 (9,300) 455,700 455,700 455,700 OK 502,250 - (10,045) 492,205 492,205 Land Re Use Decisions Monrovia Property Sale Actual 5,639,096 5,639,096 5,639,096 OK Lido House Hotel Lease Lease Ground Lease > of Base Rent or Percent Rents - - Per Lease Per Lease Police Facility Concord Estimated Annual Financial Benefit Not Used 1,706,000 1,706,000 1,706,000 - UNKNOWN West Newport Gym - Lease Lease Ground Lease 289,055 289,055 289,055 5,938,288 Per Lease 1,995,055 - - 7,634,151 7,634,151 115,960,458 37,706,728 (1,330,437) 157,975,845 163,573,966 181,448,503 CHECK CELLS 6 of 7 DEVELOPMENT AGREEMENTS AND PRIVATE CONTRIBUTIONS Agreement Hoag OASIS Pledge Hoag OASIS Pledge Hoag OASIS Pledge Friends of Oasis Pledge North Newport Center North Newport Center North Newport Center T2 North Newport Center North Newport Center North Newport Center T2 North Newport Center North Newport Center The Dart Development (24 units)(PA2012-146) Newport Bay Marina (27 units) (PA2001-210) Via Lido Mixed Use(2 units) (PA2010-081) 2218 Channel Rd.Abell John & Helou Carol Plaza CDM (6 Units) (PA2010-061) 214 Narcissus (1 Units) (PA2011-192) 604 Acacia Ave (PA2012-005) 610 Larkspur LLC (NP2013-003) 416 Orchid Ave. Cohen Galina - 309 Goldenrod 819 W. Balboa NP2012-010 Friend of the Oasis Hoag DA # 5 Hoag DA # 5 Hoag DA # 5 Hoag DA # 5 Santa Barbara Condos Santa Barbara Condos Santa Barbara Condos Santa Barbara Condos (NP2005-014) Banning Ranch Uptown Newport NB Country Club Dunes Settlement Dunes Settlement Dunes Settlement Golf Reality Fund (GRF) Golf Reality Fund (GRF) Land Re Use Decisions Monrovia Property Sale Lido House Hotel Lease Police Facility West Newport Gym - Lease 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 5,600,000 - - 13,545,000 5,922,000 200,000 600,875 150,000 1,645,566 3,287,345 1,384,625 14,491,750 8,132,915 18,594,856 6,785,909 3,357,452 10,550,389 562,196 49,000 98,000 402,194 36,505 455,700 5,639,096 75,000 150,000 250,000 328,303 338,152 348,868 358,746 369,488 380,594 392,011 403,772 415,885 428,361 441,212 791,069 814,801 839,245 864,422 132,358 206,385 210,513 214,723 219,018 223,398 296,226 302,150 308,193 314,357 320,644 327,057 333,598 340,270 347,076 354,017 361,098 368,320 375,686 383,200 34,580,841 4,094,606 22,604,570 11,855,091 669,018 551,701 634,378 651,018 666,939 683,846 701,238 29,864,314 737,370 756,155 775,437 795,230 1,152,167 1,183,121 1,214,931 1,247,622 7 of 7 CITY OF NEWPORT BEACH FINANCE COMMITTEE STAFF REPORT Agenda Item No. 5D January 14, 2016 TO: HONORABLE CHAIRMAN AND MEMBERS OF THE COMMITTEE FROM: Finance Department Dan Matusiewicz, Finance Director (949) 644-3123, danm@newportbeachca.gov SUBJECT: Work Plan Overview DISCUSSION: Staff will present and seek approval of tentative Finance Committee agenda topics scheduled for the year. Prepared and submitted by: /s/Steve Montano Dan Matusiewicz Deputy Finance Director Attachment: A. Finance Committee 2016 Work Plan ATTACHMENT A Finance Committee 2016 Work Plan Updated January 11, 2016 Scheduled Date Agenda Title Agenda Description Thursday, January 14, 2016 Bi-Annual Investment Portfolio Review Staff and/or one or more investment advisors will describe the performance of the City's investment portfolio.Implementation of Budget Preparation Framework - Review of Operating Budget, Session 4 (Public Works Department) The goal of this presentation will be to familiarize members of the Finance Committee with the elements of the Fiscal Year 2015-2016 Public Works Department budget, provide opportunity for questions, and to gain clarity in the funding allocations for departmental programs.Review of Facilities Financial Planning Tool (FFPT) Staff will present the timing, means of financing, and fiscal impacts associated with funding high-priority capital projects approved by the City Council. Work Plan Overview Staff will present and seek approval of the tentative Finance Committee agenda topics scheduled for the calendar year. The work plan represents the planned topics of discussion; however, is subject to change based on the availability of information and the need to schedule other topics as they arise. Issuance of Multi-Family Housing Revenue Bonds for the Uptown Newport Project by the California Statewide Communities Development Authority to TPG/TSG Venture I Acquisition, LLC The California Statewide Communities Development Authority (CSCDA) is authorized to issue bonds, notes, and other evidences of indebtedness to public entities and private developers in order to promote economic development, including the provisions and maintenance of multi-family housing. TPG/TSG Venture I Acquisition, LLC (the borrower also known as the Shopoff and Picerne Real Estate Joint Venture Investment Group) is seeking financing from CSCDA for the acquisition, construction and development of the multifamily rental housing projects collectively known as the Uptown Newport Village. The law requires a public hearing be held to allow members of the public and the governing board the ability to comment and approve or disapprove the issuance of bonds for the project. Any project not approved by the local jurisdiction will not be financed through CSCDA. As the Program Participant, the City of Newport Beach will not incur any liability of this CSCDA financing. Year-End Closing Results Staff will present the preliminary year-end closing results for Fiscal Year 2014-2015.Quarterly ERP Update Staff will provide the Committee with a progress report on the Enterprise Resource Plan project to receive and file. Thursday, February 11, 2016 Implementation of Budget Preparation Framework - Review of Operating Budget, Session 5 (Municipal Operations Department) The goal of this presentation will be to familiarize members of the Finance Committee with the elements of the Fiscal Year 2015-2016 Municipal Operations Department budget, provide opportunity for questions, and to gain clarity in the funding allocations for departmental programs.Review of Public Employees Retirement System (PERS) Valuation Staff will summarize the results from our latest PERS actuarial valuation and financial options to manage the current obligation. Thursday, March 10, 2016 Quarterly ERP Update Staff will provide the Committee with a progress report on the Enterprise Resource Plan project to receive and file. FY 2014-2015 Audit Review (with Auditor) The City’s external audit firm, White Nelson Diehl Evans LLP will meet with the Finance Committee to discuss the audit findings for the fiscal year ending 6/30/2015. The committee will have an opportunity to discuss any potential areas of concern and the auditors can discuss any changes in accounting standards or disclosures that were relevant for the audit year. Financial Policy Update (Optional) Review and discuss any proposed Financial Policy updates as necessary. Proposed FY 2016-2017 Budget Overview # 1 Staff will provide an overview of the Proposed FY 2016-2017 Budget Assumptions. Thursday, April 28, 2016 **Special Meeting Date** Proposed FY 2016-2017 Budget Overview # 2 Staff will provide an overview of the Proposed FY 2016-2017 Operating Budget and or CIP. Thursday, May 12, 2016 Proposed FY 2016-2017 Budget Overview # 3 Staff will provide an overview of the Proposed FY 2016-2017 Operating Budget and or CIP.Review Staff Recommendation on the Selection of a Certified Public Accounting Audit Firm Staff will recommend the selection of a certified public accountant firm to perform the annual audit. The selection will be based on the evaluation results generated from a Request for Proposals process. City of Newport Beach Finance Committee Work Plan 2016 February March May January April I:\Users\FIN\Shared\Admin\Finance Committee\Workplan\2016\2016 FC Workplan 1 Updated January 11, 2016 Scheduled Date Agenda Title Agenda Description City of Newport Beach Finance Committee Work Plan 2016 Tuesday, June 16, 2015 Annual Fee Schedule Update The purpose of this meeting is to review staff’s recommendation to revise the Master Fee Schedule according to CPI and to review the specific changes recommended for departmental related fees.Audit Entrance Conference (Optional) Auditors will contact members of the Finance Committee individually to discuss the work plan for the fiscal year ending 6/30/2016 CAFR audit. Alternatively, the auditor may request an audience with the Finance Committee as a whole, in which case a meeting may be convened during this month. The committee will have an opportunity to discuss any potential areas of concern they wish the auditors to review and the auditors can discuss any changes in accounting standards or disclosures that may be relevant for the audit year.Financial Policy Update (Optional) Review and discuss any proposed Financial Policy updates as necessary. Quarterly ERP Update Staff will provide the Committee with a progress report on the Enterprise Resource Plan project to receive and file. Thursday, July 14, 2016 Proposed Committee Recess Thursday, August 11, 2016 Proposed Committee Recess Tuesday, September 15, 2015 Bi-Annual Investment Performance Review Staff and/or one or more investment advisors will describe the performance of the City's investment portfolio.Investment Policy Review Annual review of Investment Policy.Quarterly ERP Update Staff will provide the Committee with a progress report on the Enterprise Resource Plan project to receive and file. Thursday, October 13, 2016 Review of Post Employment Retiree Insurance Actuarial Valuation (AKA OPEB) The City's OPEB actuary will review the City's latest OPEB valuation and liability.Review of Cloud-Based Business Intelligence Software Business intelligence software delivers critical financial information and analytics to internal decision makers and members of the community. Staff will demonstrate the functionality of the proposed software solution and seek input from the Committee on its various configuration options.Prepare Budget Guidance in preparation for the FY 2017-2018 Budget Staff will seek guidance and input from the Committee regarding potential areas of budget process improvement prior to the preparation of the 2017-18 annual budget. Thursday, November 10, 2016 Review of Public Employees Retirement System (PERS) Valuation Staff will summarize the results from the latest PERS actuarial valuation and financial options to manage the current obligation.Finalize Budget Guidance in preparation for the FY 2017-2018 Budget Staff will seek guidance and input from the Committee regarding potential areas of budget process improvement prior to the preparation of the 2017-18 annual budget. Tuesday, December 15, 2015 Year-End Closing Results Staff will present the preliminary year-end closing results for Fiscal Year 2015-2016.Quarterly ERP Update Staff will provide the Committee with a progress report on the Enterprise Resource Plan project to receive and file. September November December June July August October I:\Users\FIN\Shared\Admin\Finance Committee\Workplan\2016\2016 FC Workplan 2 CITY OF NEWPORT BEACH FINANCE COMMITTEE STAFF REPORT Agenda Item No. 5E January 14, 2016 TO: HONORABLE CHAIRMAN AND MEMBERS OF THE COMMITTEE FROM: Finance Department Dan Matusiewicz, Finance Director 949-644-3123, danm@newportbeachca.gov SUBJECT: Issuance of Multi-Family Housing Revenue Bonds for the Uptown Newport Project by the California Statewide Communities Development Authority to TPG/TSG Venture I Acquisition, LLC SUMMARY: The California Statewide Communities Development Authority (CSCDA) is authorized to issue bonds, notes, and other evidences of indebtedness to public entities and private developers in order to promote economic development, including the provisions and maintenance of multi-family housing. TPG/TSG Venture I Acquisition, LLC (the borrower also known as the Shopoff and Picerne Real Estate Joint Venture Investment Group) is seeking financing from CSCDA for the acquisition, construction and development of the multifamily rental housing projects collectively known as the Uptown Newport Village. The law requires a public hearing be held to allow members of the public and the governing board the ability to comment and approve or disapprove the issuance of bonds for the project. Any project not approved by the local jurisdiction will not be financed through CSCDA. As the Program Participant, the City of Newport Beach will not incur any liability of this CSCDA financing. RECOMMENDED ACTION: Review and recommend a City Council public hearing on the issuance of Multi-Family Housing Revenue Bonds by CSCDA to TPG/TSG Venture I Acquisition, LLC for the development of the Uptown Newport I and II Apartments. DISCUSSION: The California Statewide Communities Development Authority, known as "CSCDA" or "California Communities", is a joint powers authority sponsored by the League of Issuance of Multi-Family Housing Revenue Bonds for the Uptown Newport Development by the California Statewide Communities Development Authority to TPG/TSG Venture I Acquisition, LLC January 14, 2016 Page 2 California Cities ("League") and the California State Association of Counties ("CSAC"). CSCDA was created by the League and CSAC in 1988 to enable local government and eligible private entities access to low-cost, tax-exempt financing for projects that provide a tangible public benefit, contribute to social and economic growth and improve the overall quality of life in local communities throughout California. CSCDA has issued more than $50 billion through 1,300 plus financings since 1988 and consistently ranks in the top 10 of more than 3,000 nationwide public issuers of tax- exempt debt, as measured by annual issuance amount. TPG/TSG Venture I Acquisition, LLC is seeking financing from CSCDA for the acquisition, construction and development of the following multifamily rental housing projects (collectively known as the Uptown Newport Village) located within the City: Name Location Number of Units Aggregate Maximum Bond Amount Uptown Newport I Apartments 4301 Jamboree Road, Newport Beach, California 233 $92,000,000 Uptown Newport II Apartments 4201 Jamboree Road, Newport Beach, California 222 $100,000,000 Uptown Newport Village will replace a pair of aging industrial buildings on 25 acres near the airport with a walkable neighborhood of retail shops, restaurants, parks and 1,244 apartment units. The benefits that accrue to private developers seeking CSCDA financing include: • Cost effective bond financing for a wide range of public benefit projects. • In depth knowledge on the issuance and post issuance compliance requirements of private activity bonds, including the state volume cap process when applicable. • Extensive experience in working with all public finance professionals covering the California marketplace. • Recognized identity in the tax-exempt marketplace, which is key to marketing the sale of bonds. CSCDA is authorized by its Agreement to issue bonds, notes, and other evidences of indebtedness or certificates of participation in leases or other agreements in order to promote economic development, including the provisions and maintenance of multi- family housing. However, under the terms of the Agreement, CSCDA may not provide Issuance of Multi-Family Housing Revenue Bonds for the Uptown Newport Development by the California Statewide Communities Development Authority to TPG/TSG Venture I Acquisition, LLC January 14, 2016 Page 3 financing unless the governing body of the Program Participant where the project is located (City of Newport Beach) approves the project and its financing. Federal tax law and Section 9 of the CSCDA joint powers agreement require that a public hearing be held in the jurisdiction where the project is located. This provides members of the public and the governing board the ability to comment and approve or disapprove the issuance of bonds for the project. Any project not approved by the local jurisdiction will not be financed through CSCDA. As the Program Participant, the City of Newport Beach will not incur any liability of this CSCDA financing. The bonds issued by CSCDA are limited obligations of the borrower, not CSCDA or the Program Participant. The CSCDA joint powers agreement expressly provides that CSCDA is a public entity separate and apart from the Program Participants, and "its debts, liabilities and obligations do not constitute debts, liabilities or obligations of any party to the joint powers agreement." The Program Participants are not responsible for any repayment of debt by borrowers, nor are they named in any of the bond documents. The law requires a public hearing for the approval of the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA) Resolution (See Attachment A), which is currently scheduled for the January 26, 2016, City Council meeting. Prepared and Submitted by: /s/ Dan Matusiewicz _____________________________ Dan Matusiewicz Finance Director Attachment: A. A Resolution of the City Council of the City of Newport Beach Approving the Issuance by the California Statewide Communities Development Authority of Multifamily Housing Revenue Bonds for the Uptown Newport I Apartments and Uptown Newport II Apartments ATTACHMENT A A Resolution of the City Council of the City of Newport Beach Approving the Issuance by the California Statewide Communities Development Authority of Multifamily Housing Revenue Bonds for the Uptown Newport I Apartments and Uptown Newport II Apartments RESOLUTION NO. ____________ A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH APPROVING THE ISSUANCE BY THE CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY OF MULTIFAMILY HOUSING REVENUE BONDS FOR THE UPTOWN NEWPORT I APARTMENTS AND UPTOWN NEWPORT II APARTMENTS WHEREAS, the California Statewide Communities Development Authority (the “Authority”) is authorized pursuant to the provisions of California Government Code Section 6500 et seq. and the terms of an Amended and Restated Joint Exercise of Powers Agreement, dated as of June 1, 1988 (the “Agreement”), among certain local agencies throughout the State of California, including the City of Newport Beach (the “City”), to issue revenue bonds in accordance with Chapter 7 of Part 5 of Division 31 of the California Health and Safety Code for the purpose of financing multifamily rental housing projects; and WHEREAS, TPG/TSG Venture I Acquisition, LLC, or related entities, has requested that the Authority adopt a plan of financing providing for the issuance of multifamily housing revenue bonds (the “Bonds”) in one or more series issued from time to time, including bonds issued to refund such revenue bonds in one or more series from time to time, to finance the acquisition, construction and development of the following multifamily rental housing projects located within the City: Name Location Number of Units Aggregate Maximum Bond Amount Uptown Newport I Apartments 4301 Jamboree Road, Newport Beach, California 233 $92,000,000 Uptown Newport II Apartments 4201 Jamboree Road, Newport Beach, California 222 $100,000,000 The facilities are respectively known as Uptown Newport I Apartments and Uptown Newport II Apartments (the “Projects”) and operated by Picerne Management Corporation; and WHEREAS, the Bonds or a portion thereof will be “private activity bonds” for purposes of the Internal Revenue Code of 1986 (the “Code”); and WHEREAS, pursuant to Section 147(f) of the Code, prior to their issuance, private activity bonds are required to be approved by the “applicable elected representative” of the governmental units on whose behalf such bonds are expected to be issued and by a governmental unit having jurisdiction over the entire area in which any facility financed by such bonds is to be located, after a public hearing held following reasonable public notice; and WHEREAS, the members of this City Council (this “City Council”) are the applicable elected representatives of the City of Newport Beach (the “City”); and WHEREAS, there has been published, at least 14 days prior to the date hereof, in a newspaper of general circulation within the City, a notice that a public hearing regarding the Bonds would be held on a date specified in such notice; and WHEREAS, such public hearing was conducted on such date, at which time an opportunity was provided to interested parties to present arguments both for and against the issuance of the Bonds; and WHEREAS, the Authority is also requesting that the City Council approve the issuance of any refunding bonds hereafter issued by the Authority for the purpose of refinancing the Bonds which financed the Project (the “Refunding Bonds”), but only in such cases where federal tax laws would not require additional consideration or approval by the City Council; and WHEREAS, it is intended that this resolution shall constitute the approval of the issuance of the Bonds required by Section 147(f) of the Code and Section 9 of the Agreement; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH AS FOLLOWS: Section 1. The above recitals are true and correct. Section 2. The City Council hereby approves the issuance of the Bonds and the Refunding Bonds by the Authority. It is the purpose and intent of the City Council that this resolution constitute approval of the Bonds for the purposes of (a) Section 147(f) of the Code and (b) Section 9 of the Agreement. Section 3. The officers of the City are hereby authorized and directed, jointly and severally, to do any and all things and to execute and deliver any and all documents that they deem necessary or advisable in order to carry out, give effect to and comply with the terms and intent of this resolution and the financing approved hereby. Section 4. The City Clerk shall forward a certified copy of this Resolution to: Justin Cooper, Esq. Orrick, Herrington & Sutcliffe LLP 405 Howard Street San Francisco, California 94105 Section 5. This resolution shall take effect immediately upon its passage. ADOPTED by the City Council of the City of Newport Beach at a regular meeting of said Council held on the 26th day of January, 2016, by the following vote: AYES: NOES: ABSENT: Mayor ATTEST: City Clerk CITY OF NEWPORT BEACH FINANCE COMMITTEE STAFF REPORT Agenda Item No. 5F January 14, 2016 TO: HONORABLE CHAIRMAN AND MEMBERS OF THE COMMITTEE FROM: Finance Department Dan Matusiewicz, Finance Director (949) 644-3123, DanM@newportbeachca.gov SUBJECT: Year-End Closing Results EXECUTIVE SUMMARY: The City of Newport Beach Finance Department has prepared this preliminary year-end update for the Finance Committee to review the status of revenues, expenditures, and fund balance for the City’s General Fund and other available and discretionary reserves. General Fund revenues overall finished the year at $185.8 million, $4.4 million (2.4 percent) higher than budgeted and $11.9 million (6.9 percent) higher than the prior year. General Fund expenditures overall finished the year at $164.5 million, $12 million (6.8 percent) lower than budgeted and $15.5 million (10.4 percent) higher than the prior year. Net income (revenues net of expenditures) prior to transfers and other sources of revenue amounted to $21.3 million. Of this net income amount, $16.7 million was transferred out to other funds which include both routine and non-routine transfers associated with the prior year surplus. See Attachment B for an explanation of the transfers. After eliminating capital project carryovers, deferrals, encumbrances, receipt and or use of restricted revenues sources, the General Fund annual operating surplus amounted to $14.2 million, an increase of $4.5 million over the prior year. The positive underlying economic factors in Newport Beach in recent years has allowed for the accumulation of General Fund reserves at the end of Fiscal Year 2014-2015 in the amount of $90 million, a gross fund balance increase of $4.6 million from the prior year. See General Fund Reserves, page 7 of this report, for a breakdown of the $90 million. At the end of Fiscal Year 2014-2015, the sum total of all available and discretionary reserves total $120 million. See page 8 for a summary of the discretionary reserves. Year-End Closing Results January 14, 2016 Page 2 DISCUSSION: Revenues General Fund revenues overall finished the year $4.4 million (2.4 percent) higher than the budget and $11.9 million (6.9 percent) higher than the prior year (see table below). Much of Fiscal Year 2014-2015’s increase is the result of higher than expected revenue from the General Fund’s top three revenue sources (Property Tax, Sales Tax, and Transient Occupancy Taxes). Top “3” Revenues The top three individual revenue sources, Property Taxes, Sales Taxes and Sales Tax in Lieu, and Transient Occupancy Taxes (TOT), represent 74 percent of all General Fund revenues. Tax revenues in total, including business licenses, franchise fees and other taxes represent nearly 79 percent of all General Fund revenues while only 21 percent is generated by other revenue sources. General Fund Revenues Prior Year Q4 Actual 2013-14 Budget 2014-15 YTD Q4 Actual 2014-15 2014-15 Budget to Actual $ Variance 2014-15 Budget to Actual % Variance Percent of 2014-15 Budget Realized Year-Over-Year Q4 $ Change Year-Over-Year Q4 % Change Taxes and assessments: Property 79,889,346$ 83,969,239$ 84,121,461$ 152,222$ 0.18%100.18%4,232,115$ 5.30% Sales 23,142,065 24,754,322 24,832,412 78,090 0.32%100.32%1,690,347 7.30% Sales tax in-lieu 7,727,876 8,046,423 8,046,424 1 0.00%100.00%318,548 4.12% Transient occupancy 18,176,369 19,377,767 20,369,158 991,391 5.12%105.12%2,192,789 12.06% Other taxes 8,434,367 8,443,015 8,727,401 284,386 3.37%103.37%293,034 3.47% Intergovernmental 1,714,445 1,622,725 2,637,452 1,014,727 62.53%162.53%923,007 53.84% Licenses, permits and fees 5,299,166 6,754,406 6,555,699 (198,707) -2.94%97.06%1,256,533 23.71% Charges for services 16,808,431 15,825,356 16,698,763 873,407 5.52%105.52%(109,668) -0.65% Fines and forfeitures 3,271,910 3,818,200 3,725,795 (92,405) -2.42%97.58%453,885 13.87% Investment income 542,915 361,778 437,272 75,494 20.87%120.87%(105,643) -19.46% Net increase in fair value of invest 53,783 - 61,337 61,337 7,554 14.05% Property income 7,831,964 7,275,470 7,962,877 687,407 9.45%109.45%130,913 1.67% Donations 208,486 162,250 406,050 243,800 150.26%250.26%197,564 94.76% Other 768,280 1,018,102 1,207,704 189,602 18.62%118.62%439,424 57.20%TOTAL 173,869,403$ 181,429,053$ 185,789,805$ 4,360,752$ 2.40%102.40%11,920,402$ 6.86% Year-End Closing Results January 14, 2016 Page 3 Property Tax Property tax is the top source of revenue for the City of Newport Beach. It represents almost half (45.3 percent) of all General Fund revenues. Property taxes overall finished the year $152 thousand (0.2 percent) higher than the budget and $4.2 million (5.3 percent) higher than the prior year (see table below). We realized a notable increase in secured and unsecured property tax, coming in at an increase over the prior year of 5.6 percent and 10.5 percent respectively. Reflective of changes in ownership and new construction, supplemental taxes increased 19 percent over the prior year. Prior year penalties and interest receipts are down 13.8 percent from last year due to the improved economic status of homeowners. The Other Property Tax revenue category is 4.78 percent lower than the prior year due to a dip in property tax transfer (transfer of title) revenues. Continued job growth, low mortgage rates, more confident consumers and other factors have put more wind in the housing market sails. Southern California’s June home sales were the highest since summer 2006. The median price paid for all Southern California homes sold in June was up 2.8 percent from May and 5.7 percent from the prior year. As the chart below indicates, the median sales price in Newport Beach is over $1.6 million at the end of June 2015 and the number of home sales (464) is up over the prior quarter (Q2) year-over-year. Property Taxes Prior Year Q4 Actual 2013-14 Budget 2014-15 YTD Q4 Actual 2014-15 2014-15 Budget to Actual $ Variance 2014-15 Budget to Actual % Variance Percent of 2014-15 Budget Realized Year-Over-Year Q4 $ Change Year-Over-Year Q4 % ChangeSecured 64,602,202$ 68,281,223$ 68,236,644$ (44,579)$ -0.07%99.93%3,634,442$ 5.63% Unsecured 2,414,405 2,447,718 2,667,069 219,351 8.96%108.96%252,665 10.46% Prior Year Penalties & Interest 908,053 960,000 783,103 (176,897) -18.43%81.57%(124,950) -13.76% Supplemental 1,641,159 1,412,604 1,953,373 540,769 38.28%138.28%312,214 19.02%In Lieu of VLF 7,459,004 7,692,124 7,697,166 5,042 0.07%100.07%238,162 3.19%RDA Dissolution 415,342 650,000 451,957 (198,043) -30.47%69.53%36,614 8.82% All Other Property Taxes 2,449,181 2,525,570 2,332,149 (193,421) -7.66%92.34%(117,032) -4.78% TOTAL 79,889,347$ 83,969,239$ 84,121,461$ 152,222$ 0.18%100.18%4,232,114$ 5.30% Year-End Closing Results January 14, 2016 Page 4 Newport Beach Single Family Residential Full Value Sales (1/1/12 – 6/30/15) Sales Tax The City’s sales tax base is largely generated from three main industry categories including Autos and Transportation, General Consumer Goods, and Restaurants/Hotels as indicated in the adjacent pie chart that depicts the most recent available sales tax statistics. The largest segment, “Autos and Transportation,” accounts for 33 percent of total sales taxes and is represented by 178 new and used auto/boat/aircraft dealers, supply stores and repair shops. The next largest segment, “Restaurants and Hotels,” accounts for 24 percent of total sales tax and is represented by 462 restaurants, hotels, clubs and other amusement places. The third largest sales tax segment, “General Consumer Goods” accounts for 23 percent of total sales taxes and is represented by a multitude of stores and shops that provide various consumer goods. Year-over-year, the Restaurants and Hotels and Business and Industry sales tax categories in Newport Beach are up over the prior year, which suggests improved consumer perception and confidence in our local economy. Sales taxes finished the year $78 thousand (0.2 percent) higher than the budget and $2 million (6.5 percent) higher than the prior year (see table below). Sales Taxes Prior Year Q4 Actual 2013-14 Budget 2014-15 YTD Q4 Actual 2014-15 2014-15 Budget to Actual $ Variance 2014-15 Budget to Actual % Variance Percent of 2014-15 Budget Realized Year-Over-Year Q4 $ Change Year-Over-Year Q4 % ChangeSales and Use Tax 23,142,065$ 24,754,322$ 24,832,412$ 78,090$ 0.32%100.32%1,690,347$ 7.30% Property Tax in Lieu of Sales Tax 7,727,876 8,046,423 8,046,424 1 0.00%100.00%318,548 4.12% TOTAL 30,869,941$ 32,800,745$ 32,878,836$ 78,091$ 0.24%100.24%2,008,895$ 6.51% Source: HdL Companies Source: HdL Companies Year-End Closing Results January 14, 2016 Page 5 Transient Occupancy Taxes Transient Occupancy Taxes (TOT) finished the year $991 thousand (5.1 percent) higher than the budget and $2.2 million (12.1 percent) higher than the prior year (see table below). This increase is due to higher occupancy rates in the City’s hotels, motels, cottages, and resorts and a strong travel and tourism business sector. As can be seen from the adjacent bar chart, TOT revenues have maintained a sustained climb in recent years. Expenditures General Fund expenditures overall finished the year $12 million (6.8 percent) lower than the budget and $15.5 million (10.4 percent) higher than the prior year (see table below). The savings were the result of salary and benefit savings in the amount of $2.5 million; $5.7 million in operating and maintenance and $800 thousand in other savings. A substantial portion of the unexpended budget ($3 million) was attributable to capital improvement projects that were not completed at year end. This amount will be reserved for expenditures in Fiscal Year 2015-2016 and is therefore not counted in the annual operating surplus. Prior Year Q4 Actual 2013-14 Budget 2014-15 YTD Q4 Actual 2014-15 2014-15 Budget to Actual $ Variance 2014-15 Budget to Actual % Variance Percent of 2014-15 Budget Realized Year-Over-Year Q4 $ Change Year-Over-Year Q4 % Change Transient Occupancy Taxes 18,176,369$ 19,377,767$ $20,369,158 $991,391 5.12%105.12%$2,192,789 12.06% Year-End Closing Results January 14, 2016 Page 6 Net income (revenues net of expenditures) prior to transfers and other sources of revenue amounted to $21.3 million. Of this net income amount, $16.7 million was transferred out to other funds. Transfers out include $12.2 million for routine purposes including the annual funding of the Facilities Financial Planning Reserve (FFPR) ($8 million) and the annual subsidy of the Tidelands Fund ($4.2 million). A total of $1.8 million was transferred out to other funds in furtherance of Council priorities including $1.0 million for information technology and emergency communications, $350 thousand for the Facilities Maintenance Reserve and $450 thousand to the Equipment Fund. The remaining transfers out of $2.6 million were made to projects and program activity in the City’s General Liability Insurance and Retiree Medical Funds. Expenditures in Fiscal Year 2014-2015 increased from the prior year as the result of a focus on programs and activities that support a high quality physical environment, community safety and investments in information technology. With the improving economy and the associated uptick in revenues, the City continues its ongoing commitment to improve the quality of streets, sidewalks, alleys, and other infrastructure through the increase in Public Works expenditures and capital outlay. Increased General Fund Expenditures Prior Year Q4 Actual 2013-14 Budget 2014-15 YTD Q4 Actual 2014-15 2014-15 Budget to Actual $ Variance 2014-15 Budget to Actual % Variance Year-Over- Year Q4 $ Change Year-Over- Year Q4 % Change Expenditures: General Government: City Council 1,509,395$ 1,444,929$ 971,969$ (472,960)$ -32.73%(537,426)$ -35.61% City Clerk 682,840 847,647 762,425 (85,222) -10.05%79,585 11.65% City Attorney 2,090,616 2,292,777 1,984,866 (307,911) -13.43%(105,750) -5.06% City Manager 2,370,605 2,772,182 2,202,975 (569,207) -20.53%(167,630) -7.07% Finance 4,855,955 5,560,696 5,031,531 (529,165) -9.52%175,576 3.62% Human Resources 2,564,916 2,695,136 2,352,959 (342,177) -12.70%(211,957) -8.26% Total General Government 14,074,327 15,613,367 13,306,725 (2,306,642) -14.77%(767,602) -5.45%- Public Safety:- Police 42,312,233 49,007,977 47,805,772 (1,202,205) -2.45%5,493,539 12.98% Fire 31,759,652 37,299,076 36,556,108 (742,968) -1.99%4,796,456 15.10% Total Public safety 74,071,885 86,307,053 84,361,880 (1,945,173) -2.25%10,289,995 13.89%- Public Works:- MOD- General services 22,169,419 24,620,857 22,867,826 (1,753,031) -7.12%698,407 3.15% Public Works 5,551,312 6,491,259 6,272,426 (218,833) -3.37%721,114 12.99% MOD - Utilities 884,385 1,043,616 972,263 (71,353) -6.84%87,878 9.94% Total Public Works 28,605,116 32,155,732 30,112,515 (2,043,217) -6.35%1,507,399 5.27%- Community Development:- Community Development 8,665,648 9,834,172 8,657,129 (1,177,043) -11.97%(8,519) -0.10% Code and Water Quality Enforcement 975,060 1,283,918 1,089,402 (194,516) -15.15%114,342 11.73% Total Community Development 9,640,708 11,118,090 9,780,487 (1,337,603) -12.03%139,779 1.45%- Community services:- Parking Operations 741,187 1,235,671 1,086,559 (149,112) -12.07%345,372 46.60% Library Services 7,139,584 8,106,013 7,388,951 (717,062) -8.85%249,367 3.49% Recreation and Senior Services 8,960,948 10,501,918 9,873,970 (627,948) -5.98%913,022 10.19% Total Community Services 16,841,719 19,843,602 18,349,480 (1,494,122) -7.53%1,507,761 8.95%- Capital Outlay 5,587,015 11,340,915 8,469,632 (2,871,283) -25.32%2,882,617 51.59%- Debt Service:- Interest and Fiscal Charges 175,611 170,000 175,812 5,812 3.42%201 0.11% Total Debt Service - - Total Expenditures 148,996,381$ 176,548,759$ 164,522,575$ (12,026,184)$ -6.81%15,526,194$ 10.42% Year-End Closing Results January 14, 2016 Page 7 expenditures from the prior year were also the result of negotiated bargaining unit increases in salary and benefits. A high-level summary of Fiscal Year 2014-2015 revenues and expenditures can be found in the Comparative Income Statement in Attachment A. General Fund Reserves This section provides balances of the City’s General Fund Reserves at the end of Fiscal Year 2014-2015. This information is useful in assessing the City’s net resources available for spending at the end of the fiscal year. Contributions to the reserve are established by prudent fiscal policies and as part of the annual budget process, or as conditions change. The positive underlying economic factors in Newport Beach in recent years has allowed for the accumulation of General Fund reserves at the end of Fiscal Year 2014-2015 in the amount of $90.0 million, an increase of $4.6 million from the prior year. The non-spendable and restricted categories of fund balance are for resources that are not in spendable form or are legally or contractually required to remain intact. The committed and assigned portion of fund balance includes amounts that are constrained by the City’s intent to be used for specific purposes but are still within the City's full Audited Preliminary & Unaudited 2014 2015 Change Non-spendable 16,316,499$ 15,784,396$ (532,103)$ Restricted 3,939,751 5,389,810 1,450,059 Committed Parking Reserves 517,592 719,997 202,405 Cable Franchise 476,616 627,889 151,273 Other Miscellaneous 5,761,917 4,142,871 (1,619,046) Subtotal Committed 6,756,125 5,490,757 (1,265,368) Assigned Capital Reappropriations 6,026,110 6,357,095 330,985 Other 1,326,170 1,421,225 95,055 Subtotal Assigned 7,352,280 7,778,320 426,040 Unassigned Contingency Reserve 41,321,103 41,314,870 (6,233) Residual Unassigned Fund Balance (Surplus)9,694,717 14,194,388 4,499,671 Subtotal Unassigned 51,015,820 55,509,258 4,493,438 General Fund Balance 85,380,475$ 89,952,541$ 4,572,066$ General Fund Reserves Year-End Closing Results January 14, 2016 Page 8 discretion. The unassigned category is the residual portion of available fund balance that is not otherwise restricted, committed or assigned. There are a myriad of “moving parts” that impact and change the level of the fund balance from one year to the next. Factors that contribute to the increase in fund balance include the net income (higher revenue/lower expenditures than budgeted) described in the previous section, the amount needed to be set aside for capital projects that did not get completed in the prior (reserve for reappropriations), the reserve levels for restricted or non-spendable funds that result from various activities that can occur in any given year such. Factors that contribute to decreases in fund balance include transfers out to other funds, such as the FFPR and accelerating the payment to the City’s pension unfunded liability – examples of recent transactions resulting from Council priorities. The confluence of the various financial transactions resulting from both policy decisions and the unique circumstances that arise in any given year determine the General Fund balance. Ultimately, the increase in our unassigned fund balance (surplus) is the best measure of annual operating surplus which increased $4.5 million to $14.2 million during the year. Summary of Available and Discretionary Reserves In summary, the City’s ability to set aside resources for future projects, acquisitions, and other allowable purposes is the result of maintaining a focus on the City Council’s priorities, including responsible, yet difficult, spending decisions, adherence to a Fiscal Sustainability Plan, strong revenue monitoring, analysis and reporting. The City’s reserve funds provide a mechanism for saving money to finance all or part of future infrastructure, equipment, and other requirements and provide a degree of financial stability. The strategic reserves also normalize departmental budgeting for programs that have life-cycles greater than one year, act as a strategic savings plan for long-term assets and liabilities, and enable appropriate distribution of city-wide costs to individual departments. During both strong and uncertain economic times, reserve funds provide the City with a welcomed budgetary option that can help mitigate the need to cut services. At the end of Fiscal Year 2014- 2015, the sum total of all available and discretionary reserves total $120 million. Available and Discretionary Reserve Summary1 Preliminary & Unaudited 2015 Miscellaneous Council Commitments 13,207,740$ Strategic Savings Facilities Financing Planning Reserve 10,387,218 Sunset Ridge Park 2,869,349 Marina Park Fund 2 (2,891,089) Facilities Maintenance 1,934,066 Lifeguard Headquarter 2 (121,076) Misc. Facilities Financing 2 (502,205) Parks & Community Centers 1,951,745 West Community Center 2 (33,500) Corp. Yard Consolidation 2 (165,394) Public Arts & Culture 408,180 Equipment Replacement 15,308,255 Information Technology 5,230,690 Risk Management 3 16,887,571 Contingency Reserves 41,314,870 Unassigned Reserves (Surplus)14,194,388 Total Reserves 119,980,808$ 1 Excludes non-spendable and restricted reserve funds. 2 Expenditures relating to facilities are tracked in these funds. When projects are completed, a positive fund balance will be rendered after funds are transferred from the FFRP. 3 Includes General Liability, Compensated Absences and Workers Comp reserves. Year-End Closing Results January 14, 2016 Page 9 Prepared by: Submitted by: /s/ Steve Montano _____________________________ /s/ Dan Matusiewicz _____________________________ Steve Montano Deputy Finance Director Dan Matusiewicz Finance Director Attachments: A. Comparative Income Statement B. Interfund Transfers ATTACHMENT A Comparative Income Statement $% 2012 2013 2014 2015 Change Change General Fund Revenues: Property Taxes 71,546,249$ 81,603,194$ 79,889,346$ 84,121,461$ 4,232,115$ 5.30% Sales Taxes 20,107,597 20,764,204 23,142,065 24,832,412 1,690,347 7.30% Sales Taxes In Lieu 6,523,492 7,078,517 7,727,876 8,046,424 318,548 4.12% TOT Taxes 14,798,191 16,500,285 18,176,369 20,369,158 2,192,789 12.06% All other Revenues 43,124,928 44,461,987 44,933,747 48,420,350 3,486,603 7.76% Total Revenues 156,100,457 170,408,187 173,869,403 185,789,805 11,920,402 6.86% General Fund Expenditures: General Government 11,817,861 13,276,718 14,074,327 13,306,725 (767,602) -5.45% Public Safety 67,415,971 72,714,586 74,071,885 84,361,880 10,289,995 13.89% Public Works 25,953,473 26,977,969 28,605,116 30,112,515 1,507,399 5.27% Community Development 8,798,193 8,878,665 9,640,708 9,746,531 105,823 1.10% Community Services 17,731,921 16,570,787 16,841,719 18,349,480 1,507,761 8.95% Capital outlay 3,827,132 5,235,786 5,587,015 8,469,632 2,882,617 51.59% Debt Service 979,590 180,426 175,611 175,812 201 0.11% Total Expenditures 136,524,141 143,834,937 148,996,381 164,522,575 15,526,194 10.42% Income before transfers & other sources 19,576,316 26,573,250 24,873,022 21,267,230 (3,605,792) -14.50% Other Financing Sources (Uses) Transfers in 4,842,263 89,297 563,552 38,802 (524,750) -93.11% Transfers out (7,395,066) (25,324,747) (21,186,257) (16,733,966) 4,452,291 -21.01% Total other financing sources (uses)(2,552,803) (25,235,450) (20,622,705) (16,695,164) 3,927,541 -19.04% Net Change in Fund Balance 17,023,513 1,337,800 4,250,317 4,572,066 321,749 7.57% Fund Balance, beginning 62,768,845 79,792,358 81,130,158 85,380,475 4,250,317 5.24% Fund Balance, ending 79,792,358$ 81,130,158$ 85,380,475$ 89,952,541$ 4,572,066$ 5.35% General Fund Comparative Income Statement ATTACHMENT B Interfund Transfers Interfund Transfers Interfund transfers at June 30, 2015, consisted of the following: General Fund Tide and Submerged Land - Operating Facilities Financial Planning Reserve Civic Center COP Internal Service Fund Non-Major Funds Total General Fund -$ 4,233,966$ 8,000,000$ -$ 4,150,000$ 350,000$ 16,733,966$ Facilities Financial Planning Reserve - - - 8,199,027 - 32,297,299 40,496,326 Internal Service Fund - - - - 6,283,631 - 6,283,631 Non-Major Funds 38,802 - - - - 162,862 201,664 Total 38,802$ 4,233,966$ 8,000,000$ 8,199,027$ 10,433,631$ 32,810,161$ 63,715,587$ Transfers In Tr a n s f e r s O u t The City typically uses transfers to fund ongoing subsidies. The General Fund transferred $4,233,966 to subsidize the maintenance and operation of the Tide and Submerged Land-Operating Fund; $8,000,000 to the Facilities Financial Planning Reserve Fund to cash fund construction projects for General Fund supported facilities; $2,500,000 to the General Liability Fund and $1,000,000 to the Compensated Absences Fund to mitigate certain liabilities; $450,000 to the Equipment Maintenance Fund to fund for cardiac monitors; $350,000 to Facilities Maintenance Fund and $200,000 to the Retiree Insurance Fund. The Facilities Financial Planning Reserve Fund transferred $8,199,027 to the Civic Center COP Fund for the debt service payments related to the Civic Center Certificates of Participation; $20,682,848 to the Marina Park Fund and $1,855,956 to the Sunset Ridge Park Fund to cash fund design and construction of the two parks; $6,025,000 to the Fire Station Fund for projects related to Fire Stations; $2,550,000 to the Parks and Community Centers Fund for projects related to various other parks and community centers; $750,000 to the Miscellaneous Facilities Financing Fund to cash fund design and construction of miscellaneous facilities and $433,495 to the Public Arts and Cultural Facilities Fund to fund for art in public places. The Circulation and Transportation Fund transferred $157,701 to the CIOSA Construction Fund for debt service. As required by the pre-annexation agreement, $24,337 of interest accrued in the Newport Coast Annexation fund was transferred to the General Fund. The Contributions fund transferred $14,465 to the General Fund and $3,357 to the State Gas Tax Fund to reimburse these funds for expenditures inadvertently charged to the these funds. The Gas Tax Fund transferred $1,804 to the Contribution Fund to reimburse the fund for expenditures inadvertently charged to the Contribution Fund. The Equipment Maintenance Fund transferred $3,902,903 to the Insurance Reserve Fund and $1,380,728 to the Compensated Absence Fund to mitigate certain liabilities, and $1,000,000 to Information Technology Fund to fund for 800 MHz radios and infrastructure. CITY OF NEWPORT BEACH FINANCE COMMITTEE STAFF REPORT Agenda Item No. 5G January 14, 2016 TO: HONORABLE CHAIRMAN AND MEMBERS OF THE COMMITTEE FROM: Finance Department Steve Montano, Deputy Finance Director (949) 644-3240 or Smontano@NewportBeachCA.gov SUBJECT: Quarterly ERP Update SUMMARY: ERP (Enterprise Resource Planning) software is a business management software system that integrates all of the City’s core functional requirements for financials, human capital management, citizen services, and revenues. Implementation of the Enterprise Resource Planning (ERP) software implementation project continues. The software provider of the City’s ERP or business management software system that integrates all of the City’s core functional requirements for financials, human capital management, citizen services, and revenues is Tyler Technologies Inc. The Tyler system known as “Munis” will replace the current FinancePlus system. The ERP implementation consists of 4 major overlapping phases. The graphic below depicts the current project phase start and planned go live dates (MMM-YY). We have completed Phases 1 and 2 and are currently working on Phase 3. Phase 4 will begin next month. Quarterly ERP Update January 14, 2016 Page 2 Here is an update of recent and planned activities pertaining to each project phase: Financials – Phase 1 The financials portion of the project (including such modules as General Ledger, Purchasing, Budget, Projects and Grants and Accounts Payable) became operational on July 8, 2015. Since this time, staff has grown accustomed to the new functionality and is still fine-tuning the system. Recent outreach to department heads and their staff revealed that additional training on how to run reports, understanding the online user dashboard, and learning how to access “cube” reports in Excel is desirable. We will have a Tyler consultant on site January 20-21 to provide such training to key department representatives. HR/Payroll – Phase 2 The Human Resources and Payroll module became operational on December 26, 2015. An important functionality of the module known as the Employee Self Service (ESS) allows employees to access and update their own personal information through a secure online web portal. ESS allows employees to: view payroll information such as paycheck history and W-4 election details, view current benefits, request time off, enter timecards to record time worked and/or absences and see flex, vacation and sick leave balances up to date online. The module also allows for a paperless payroll process, streamlines timesheet entry and ensures all local, state and federal requirements are met with Munis Payroll. Standard payroll functions include, but are not limited to, payroll and expense reimbursement processing; reconciliation of employee insurance reports to monthly premium statements; manual or automatic check reconciliation and support of electronic timesheet entry. Utility Billing – Phase 3 Phase 3 consists of implementing new General Billing, Accounts Receivable, and Utility Billing software. These modules will improve how we create invoices and bills for miscellaneous charges, and maintain accounts for our water and wastewater customers. Staff has been participating in Tyler led business processing consulting sessions to configure the software in conformance with the City’s business needs and industry best business practices. Work on the conversion of data from the old system to the new will begin shortly. The phase is scheduled to be completed in October of 2016. Work Orders and Fleet Management – Phase 4 The modules in Phase 4 will provide work order solutions for preventive maintenance schedules, maintenance department inspections, departmental service requests, and citizen service requests. As a result of their integration with the Financial, Human Resources and Revenue suites, the modules will eliminate duplicate entry of labor time, Quarterly ERP Update January 14, 2016 Page 3 journal entries and billings. Information will be up-to-date and data input errors or missing information will be reduced. Phase 4 work will begin in February of 2016. RECOMMENDED ACTION: Receive and file. /s/ Steve Montano _______________________ Steve Montano Deputy Director, Finance