TITLE:
title
CAPITAL ASSET NEEDS (CAN) ORDINANCE EMERGENCY EXCEPTION AND CAPITAL IMPROVEMENT PROGRAM (CIP) PROJECT DEFERRALS - FISCAL YEAR 2024-25
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DEPARTMENT: PUBLIC WORKS DEPARTMENT/FINANCE DEPARTMENT
PRESENTED BY: RAJA SETHURAMAN, PUBLIC WORKS DIRECTOR AND CAROL MOLINA, FINANCE DIRECTOR
CONTACT INFORMATION: RAJA SETHURAMAN, PUBLIC WORKS DIRECTOR (714) 754-5343
RECOMMENDATION:
recommendation
Staff requests the City Council:
1. Authorize the "Emergency Exception" clause of the Capital Asset Needs Ordinance under Section 2-209.2 (a)(2), Economic Downturn, for Fiscal Year 2024-25.
2. Provide direction on which approved projects may be deferred to help address the General Fund revenue shortfall resulting from the current economic downturn.
3. Approve a financial plan to reinstate the $2.9 million in deferred projects by:
a. Prioritizing funding in FY 2025-26 if revenues exceed expectations, and if needed.
b. Reinstate the funding over a 10-year period for fiscal years that revenues exceed expenditures to ensure a fiscally sustainable General Fund budget.
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BACKGROUND:
The City Council at their regular meeting on September 15, 2015, adopted the Capital Asset Needs (CAN) Ordinance (Attachment 1), requiring the allocation of a minimum of five percent (5%) of the annual General Fund revenues to Capital Fund 401. While the City met this requirement during the budget process for Fiscal Year 2024-25, the City's General Fund revenues are coming in lower than expected. This required several actions from staff to reduce operating expenditures to achieve a balanced budget.
Upon further in-depth fiscal analysis, the Finance Department determined that an additional $3.6 million in savings are needed. Staff is proposing to achieve this by deferring approximately $2.9 million in General Fund Capital Improvement Projects (CIP) and by funding the street sweeping program entirely with Gas Tax, thereby reducing the General Fund street sweeping expenditures b...
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