HomeMy WebLinkAbout20A - AA - GRAFFITI SRVS FUNDSREQUEST FOR
COUNCIL ACTION
CITY COUNCIL MEETING DATE:
SEPTEMBER 20, 2016
TITLE:
APPROPRIATION ADJUSTMENT FOR
GRAFFITI ABATEMENT SERVICES AND
REDUCTION IN ENTERPRISE FUND
ASSESSMENT (STRATEGIC PLAN NO. 4)
CITY MANAGER
CLERK OF COUNCIL USE ONLY:
G"• -R
❑ As Recommended
❑
As Amended
❑
Ordinance on 1't Reading
❑
Ordinance on 2nd Reading
❑
Implementing Resolution
❑
Set Public Hearing For
CONTINUED TO
FILE NUMBER
1. Approve an Appropriation Adjustment reducing the Fiscal Year 2016 -17 budgeted
appropriation for the Sanitation Fund in the amount of $1,601,440.
2. Authorize expenditures related to Graffiti Abatement Services for Fiscal Year 2016 -17, in
the amount of $1,200,000, within the General Fund.
3. Direct Staff to calculate a Sanitation rate reduction corresponding to the reduction in
Appropriation and related Expenditures recommended for the Sanitation Fund.
4. Direct Staff to reduce an assessment from the Water Enterprise Fund to the General Fund
for Fiscal Year 2016 -17 by $2,388,082.
DISCUSSION
The City's Water Enterprise (Enterprise) is a vast operation which supplies the City's residents
and businesses clean water via an infrastructure consisting of 20 wells, 27 pumps, 8 reservoirs,
and 7 imported water connections. As a result of this infrastructure the Enterprise utilizes
existing Non - Enterprise City of Santa Ana assets and services including but not limited to: Public
Safety, Capital Assets, and Right of Way maintenance. However, staff has identified a reduction
in the assessment to the Enterprise which can be applied during the current fiscal year (2016 -17).
As a result of recent cost allocation studies, staff recommends to reduce the assessment by
$2,388,082. The proposed reduction in the assessment will result in total revenue and
expenditure to be received and incurred respectively in the amount of $4,537,918 for both the
General Fund and Water Fund. As a percentage of revenue for the General Fund, the revised
assessment to the Enterprise, since fiscal year 1993 -94, is at a 22 year low and approximates
2% of General Fund total revenues. The reduction in the assessment to the Enterprise will result
in approximately $2,388,082 available for funding of capital /infrastructure improvement projects.
20A -1
Appropriation Adjustment for Graffiti Abatement Services
and Reduction in Enterprise Fund Assessment
September 20, 2016
Page 2
Sanitation Fund
As a best practice the City periodically reviews expenditures incurred by its Enterprise operations
including the Sanitation Fund. Through a recent review, it was determined that Graffiti
Abatement services throughout the City including Public -Use Park facilities may be funded by the
City's General Fund.
Upon consultation with Public Works Agency, it was determined $1,200,000 in expenses are
attributable to Graffiti Abatement within the Sanitation Fund accounting unit (Graffiti
Abatement/Street Cleaning) totaling $1,601,440. Staff recommends the service to be continued;
however expenditures incurred since July 1, 2016 should be recorded and correspondingly
funded by the City's General Fund for an amount totaling $1,200,000. The balance in
appropriation related to the accounting unit (Graffiti Abatement /Street Cleaning), in the amount of
$401,440, will be funded within existing Sanitation Fund accounting units.
Funding
As a result of the reduction in assessment and reclassification of expenditures to the General
Fund, staff has identified the projected fiscal year 2015 -16 General Fund surplus as the funding
source for these initiatives and to address the related impact to the General Fund. The year -end
surplus is largely as a result of earlier than anticipated receipt of Sales Tax - Triple Flip revenues
from the State of California. Upon certification of the Audit Opinion in December 2016, Staff will
present the proposed Surplus spending plan projected for fiscal year 2015 -16 identifying the
funding sources and related amounts. Approval of this item will reflect inclusion of the Graffiti
Abatement Services within the proposed FY 2015 -16 surplus spending plan.
STRATEGIC PLAN ALIGNMENT
Approval of this item supports the City's efforts to meet Goal #4 — Maintain a stable, efficient and
transparent financial environment.
FISCAL IMPACT
Water Fund Assessment from the General Fund
Funds budgeted and available, in the amount of $2,388,082 will be reduced in both the Water
Enterprise Operating Expenses — General Fund Overhead (06017642- 65500) and also reduced
in the General Fund Miscellaneous Revenues account no. - (01117002- 57791).
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Appropriation Adjustment for Graffiti Abatement Services
and Reduction in Enterprise Fund Assessment
September 20, 2016
Page 3
Reduction in appropriation and corresponding reclassification of expenditures related to Graffiti
Abatement Services
Appropriation in the amount of $1,601,440 will be reduced in the following accounting unit related
to the above - referenced services:
Reduction in Appropriation:
o Sanitation Enterprise /Graffiti Removal /Street Cleaning — Contractual Services
(06817642- various) Expenditures - $1,601,440
Reclassification of Expenditures:
c Funding in the amount of $1,200,000 for Graffiti Abatement services previously
funded within the Sanitation Fund are budgeted and available in the Non -
Departmental Contractual Services (01105015 - 62300).
Robert C. Corte
Deputy City Manager
City Manager's Office
f A , Lz---
F d Mousavipour
Executive Director
Public Works Agency
APPROVED AS TO FUNDS AND ACCOUNTS:
Francisco Gutierrez
Executive Director
Finance and Management Services Agency
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