HomeMy WebLinkAboutAGENDA REPORT 2004 0519 CC REG ITEM 09GMOORPARK CITY COUNCIL
AGENDA REPORT
ITEM 9 • F.
A(,-- `
To: Honorable City Council
From: Nancy Burns, Senior Management Analyst
Date: May 13, 2004 (CC Meeting of May 19, 2004)
Subject: CONSIDER AGREEMENT REGARDING SUBORDINATION OF DEED OF
TRUST BY VINTAGE CREST SENIOR APARTMENTS, L. P., IN
FAVOR OF U.S. BANK N.A. (GPA 2002 -01, ZC 2002 -01, RPD
2002 -02)
BACKGROUND
A Deed of Trust, Assignment of Rents, Security Agreement, and
Fixture Filing in the amount of sixteen million dollars
($16,000,000) was recorded December 13, 2002, against the
Vintage Crest Property. This Deed of Trust secures the loan of
the same amount made to Vintage Crest Senior Apartments, L. P.
and capitalized by multi - family housing revenue bonds, issued by
the City in the same amount. The loan has been assigned to U.S.
Bank, N.A., as Bondowner Representative and Beneficiary under
the Deed of Trust.
DISCUSSION
Section 5.22 of the Deed of Trust on this property acknowledges
its junior position to the previously recorded Development
Agreement for this project and anticipates its subordination to
the Payment -in- lieu -of -Taxes (PILOT) Agreement and the
Affordable Housing Agreement. The PILOT Agreement provides for
reimbursement to the City for potential loss of property tax
revenue due to a welfare exemption the developer may receive as
a non - profit corporation whose project will serve low income
tenants. The Affordable Housing Agreement (and Affordable
Housing Implementation and Rental Restriction Plan, which is an
attachment) provides for the ongoing restriction of rents on all
units in the project.
000142
Honorable City Council
Date 05/13/04
Page 2
provides for the ongoing restriction of rents on all units in
the project.
STAFF RECOMMENDATION
Approve Agreement Regarding Subordination of Deed of Trust,
subject to final language approval by the City Manager and City
Attorney, and direct the City Clerk to record the document with
the County of Ventura.
Attachment: Agreement Regarding Subordination of Deed of
Trust
000143
RECORDING REQUESTED BY AND
WHEN RECORDED RETURN TO:
City of Moorpark
799 Moorpark Avenue
Moorpark, California 93021
Attention: City Clerk
Exempt From Recorder's Fees Pursuant to
Government Code Sections 6103 and 27383
Space Above This Line Reserved For Use By Recorder
AGREEMENT REGARDING SUBORDINATION
OF DEED OF TRUST
This Agreement Regarding Subordination of Deed of Trust (the "Agreement ") is
made as of , 2004 by and among the CITY OF MOORPARK, a
municipal corporation (the "City "), VINTAGE CREST SENIOR APARTMENTS, L.P., a
California limited partnership ( "Vintage Crest "), and U.S. BANK NATIONAL
ASSOCIATION, a national banking association ( "Bank ").
WITNESSETH
WHEREAS, Vintage Crest, as grantor, and Bank, as beneficiary, are parties to
that certain agreement entitled Deed of Trust, Assignment of Rents, Security
Agreement, and Fixture Filing, made December 1, 2002, and recorded in Official
Records of Ventura County, California on December 13, 2002 as Instrument No. 2002-
0316797 (the "Deed of Trust "); and
WHEREAS, the City and Vintage Crest are parties to that certain Development
Agreement, dated October 22, 2002, and recorded in Official Records of Ventura
County, California on October 28, 2002 as Instrument No. 2002- 0263670 (the
"Development Agreement ") for the construction of 190 apartments (the "Project ") on
certain real property located within the City and legally described on Exhibit "A" attached
hereto (the "Land "); and
WHEREAS, pursuant to the Development Agreement, the City and Vintage Crest
have entered into an Affordable Housing Agreement, effective as of
, 2004 (the "Affordable Housing Agreement "); and
WHEREAS, pursuant to the Development Agreement and the Affordable
Housing Agreement, Vintage Crest has agreed to construct the Project and to enter into
certain restrictions upon the operation of. the Project as set forth in that certain
Affordable Housing Implementation and Rental Restriction Plan (the "Plan "), a copy of
LA #4832 - 9951 -3344 v3
000144
DRAFT
which Plan is attached to and is a part of the Affordable Housing Agreement and was
recorded in Official Records of Ventura County, California on ,
2004 as Instrument No. ; and
WHEREAS, in connection with the Project, the City and Vintage Crest have also
entered into that certain Agreement for Payment in Lieu of Taxes, dated
2004, and recorded in Official Records of Ventura County, California
on , 2004 as Instrument No. (the "PILOT
Agreement "); and
WHEREAS, pursuant to Section 5.22 of the Deed of Trust, Vintage Crest and the
Bank agreed that the Deed of Trust and the rights and remedies of the beneficiary
thereunder are subject to and subordinate in lien to the Development Agreement, the
Affordable Housing Agreement, including the Plan, and the PILOT Agreement
(collectively, the "Senior Instruments "); and
WHEREAS, Vintage Crest and the Bank agreed for the benefit of the City to
execute, acknowledge and deliver such instruments, in recordable form, as the City
might reasonably request to evidence such subordination; and
WHEREAS, in furtherance thereof, the City has requested that Vintage Crest and
the Bank enter into and execute this Agreement, and Vintage Crest and the Bank are
willing to do so.
NOW, THEREFORE, in consideration of the covenants and agreements
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, it is agreed as follows:
1. Vintage Crest and Bank agree that notwithstanding the time of the
recording of the Deed of Trust, the Senior Instruments, together with any and all
amendments and modifications thereto to which the Bank has given its prior written
consent (which consent will not be unreasonably withheld), each are and shall be and
remain at all times a lien and charge on the Land prior and superior to the lien and
charge of the Deed of Trust.
2. Vintage Crest and Bank agree that the Deed of Trust is subject and
subordinate to the Senior Instruments and intentionally and unconditionally waive,
relinquish and subordinate the lien and charge of the Deed of Trust in favor of the lien
and charge upon the Land of the Senior Instruments.
3. This Agreement and the terms and provisions of Section 5.22 of the Deed
of Trust together constitute the entire agreement of the parties with respect to the
subject matter hereof and supersede all prior or contemporaneous agreements of the
parties with respect to that subject matter excepting Section 5.22 of the Deed of Trust.
LA #4832 - 9951 -3344 v3
000145
DRAFT
4. This Agreement is to be governed by and construed in accordance with
the internal laws of the State of California, without regard to principles of conflicts of law.
5. This Agreement is binding upon and inures to the benefit of the parties
and their respective successors and assigns.
6. This Agreement may be executed in counterparts each of which shall be
an original but all of which taken together shall constitute but one and the same
instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed by their respective duly authorized officers or representatives as of the date
first set forth above.
CITY OF MOORPARK,
a municipal corporation
A
Patrick Hunter, Mayor
ATTEST:
City Clerk
VINTAGE CREST SENIOR APARTMENTS,
L.P., a California limited partnership
By: USA Properties Fund, Inc., a California
Corporation
Its Administrative General Partner
IN
Geoffrey C. Brown, President
By: Riverside Charitable Corporation, a
California nonprofit corporation
Its Managing General Partner
Kenneth S. Robertson,
Chairman of the Board
U. S. BANK NATIONAL ASSOCIATION,
a national banking association
In
Jennifer A. Barnes,
Vice President
000146
LA #4832 - 9951 -3344 v3
ALL - PURPOSE ACKNOWLEDGMENT
State of California
County of
On , 2004, before me,
appeared
[ ] personally known to me -OR-
DRAFT
personally
[ ] proved to me on the basis of satisfactory evidence to be the person(s) whose
name(s) is /are subscribed to the within instrument and acknowledged to me that
he /she /they executed the same in his /her /their authorized capacity(ies), and that by
his /her /their signature(s) on the instrument the person(s), or the entity upon behalf of
which the person(s) acted, executed the instrument.
Witness my hand and official seal.
SIGNATURE OF NOTARY
CAPACITY CLAIMED
BY SIGNER
[ ]
INDIVIDUAL(S)
[ ] OFFICER(S) (TITLE[S]):
[ ]
PARTNER(S)
[ ] ATTORNEY -IN -FACT
[ ]
TRUSTEE(S)
[ ] SUBSCRIBING WITNESS
[ ] GUARDIAN /CONSERVATOR
[ ] CHAIRPERSON /MAYOR
[ ] OTHER:
SIGNER IS REPRESENTING:
Name of person(s) or entity(ies):
LA #4832 - 9951 -3344 v3 000147
ALL - PURPOSE ACKNOWLEDGMENT
State of California
County of
On , 2004, before me,
appeared
[ ] personally known to me -OR-
DRAFT
personally
[ ] proved to me on the basis of satisfactory evidence to be the person(s) whose
name(s) is /are subscribed to the within instrument and acknowledged to me that
he /she /they executed the same in his /her /their authorized capacity(ies), and that by
his /her /their signature(s) on the instrument the person(s), or the entity upon behalf of
which the person(s) acted, executed the instrument.
Witness my hand and official seal.
SIGNATURE OF NOTARY
CAPACITY CLAIMED
BY SIGNER
[ ]
INDIVIDUAL(S)
[ ]
OFFICER(S) (TITLE[S]):
PARTNER(S)
ATTORNEY-IN-FACT
TRUSTEE(S)
SUBSCRIBING WITNESS
GUARDIAN /CONSERVATOR
CHAIRPERSON /MAYOR
OTHER:
SIGNER IS REPRESENTING:
Name of person(s) or entity(ies):
LA #4832 - 9951 -3344 v3 000148
ALL - PURPOSE ACKNOWLEDGMENT
State of California
County of
On , 2004, before me,
appeared
[ ] personally known to me -OR-
, personally
[ ] proved to me on the basis of satisfactory evidence to be the person(s) whose
name(s) is /are subscribed to the within instrument and acknowledged to me that
he /she /they executed the same in his /her /their authorized capacity(ies), and that by
his /her /their signature(s) on the instrument the person(s), or the entity upon behalf of
which the person(s) acted, executed the instrument.
Witness my hand and official seal.
SIGNATURE OF NOTARY
CAPACITY CLAIMED
BY SIGNER
[ ] INDIVIDUAL(S)
[ ]
OFFICER(S) (TITLE[S]):
PARTNER(S)
ATTORNEY -IN -FACT
TRUSTEE(S)
SUBSCRIBING WITNESS
GUARDIAN /CONSERVATOR
CHAIRPERSON /MAYOR
OTHER:
SIGNER IS REPRESENTING:
Name of person(s) or entity(ies):
LA #4832 - 9951 -3344 v3
000149
DRAFT
EXHIBIT "A"
Legal Description of the Land
A portion of Lot "U of Tract "L" of the Rancho Simi, as per Map recorded in Book 5,
Page 5 of Maps and Parcel B of Parcel Map No. 5316, in the City of Moorpark, County
of Ventura, State of California as shown on a Parcel Map recorded in Book 60 Page 87
of Parcel Maps, in the office of the County Recorder of said County, shown as Parcel 1
on the Lot Line Adjustment No. 2002 -05 recorded October 24, 2002, as Instrument No.
2002 - 0259095 -00, Official Records, in the office of the County Recorder of said County.
EXCEPT a portion of Parcel 1 on the Lot Line Adjustment No 2002 -05, in the City of
Moorpark, County of Ventura, State of California, described and shown in document
recorded October 24, 2002, as Document No. 2002 - 0259095 -00 of Official Records, in
the office of the County Recorder of said County, described as follows:
Beginning at the Southeast corner of said Lot Line Adjustment; thence the following
numbered courses:
1 st: North 660 00'24" West 547.50 feet along the Southerly line of said Lot Line
Adjustment, to the Southwest corner of said Lot Line Adjustment;
2nd: North 01 03'00" West 213.96 feet along the Westerly line of said Lot Line
Adjustment to the Northwesterly prolongation of the first course recited as "South 680
07' 11" East 269.41 feet" of the parcel described in Exhibit "A" in the deed recorded
September 4, 2001, as Document No. 2001 - 174965 of Official Records, in the office of
the County Recorder of said County;
3rd: South 680 34'26" East 537.30 feet along said Northwesterly prolongation to a
point in the Easterly line of said Lot Line Adjustment;
4th: South 000 03' 00" East 240.31 feet, along said Easterly line to the point of
beginning.
000150
1A #4832 - 9951 -3344 v3
ITEM q.G.
MOORPARK CITY COUNCIL
AGENDA REPORT
TO: Honorable City Council
FROM: Steve Kueny, City Manager
DATE: May 12, 2004 (City Council Meeting of May 19, 2004)
SUBJECT: Consider Proposed Operating and Capital Improvement
Budgets for the Fiscal Year 2004/2005
The City Manager's recommended budgets for the City of Moorpark
and the Moorpark Redevelopment Agency for fiscal year 2004/2005
will be presented to the City Council for it's consideration on
May 19, 2004.
It is recommended that the City Council receive the recommended
Operating and Capital Improvement Budgets for FY 2004/2005 and
set a date for a budget workshop.
RECOMMENDATION
Receive the budgets and set a workshop for May 26, 2004.
°1PN 11
r
000151
ITEM `� • G
CITY OF MOORPARK
AGENDA REPORT
To: Honorable City Council
From: Steven Kueny, City Manager
Cindy Borchard, Administrative Services Director
Date: May 19, 2004
Subject: City Manager's Budget Message for Fiscal Year 2004/05
The City Manager's recommended budget for the City of Moorpark
and the Moorpark Redevelopment Agency for fiscal year 2004/05
are presented to the City Council and Agency Board for
consideration. The total proposed budget is summarized below.
As currently proposed, all funds are balanced either with
estimated revenues exceeding appropriations or through transfers
in from surpluses in other funds except the General Fund which
as a result of the proposed $263,886 two year contribution to
the State Budget deficit has a projected $151,235 shortfall.
City
City of
of
Moorpark
Moorpark
Expenditure
Moorpark
All Other
Redevelopment
Total All
Category
General Fund
Funds
Agency
Funds
Personnel
$3,269,537
$2,350,502
$201,945
$5,821,984
Operations
$6,120,783
$3,952,870
$2,195,590
$12,269,243
Sub -Total
$9,390,320
$6,303,372
$2,397,535
$18,091,227
Capital
Outlay /Impr
$257,701
$26,367,977
$1,138,969
$27,764,647
Debt Service
$0
$0
$1,484,586
$1,484,586
Transfers to
$1,368,995
$2,577,786
$1,061,973
$5,008,754
Other Funds
Total
$11,017,016
$35,249,135
$6,083,063
$52,349,214
As currently proposed, all funds are balanced either with
estimated revenues exceeding appropriations or through transfers
in from surpluses in other funds except the General Fund which
as a result of the proposed $263,886 two year contribution to
the State Budget deficit has a projected $151,235 shortfall.
City Manager's Budget Message
May 19, 2004
Page 2 of 26
This can be addressed by using a portion of the General Fund
reserve or selected expenditure reductions.
As a reminder, the City's Budget serves as a spending plan for
the upcoming fiscal year. The Operating Budget and Capital
Improvement Program Budget are adaptable documents which can be
changed during the year. When needed, budget adjustments are
submitted to City Council for unforeseen and /or unanticipated
events which take place during the year.
Fiscal Environment
The current State Budget crisis will continue to have an impact
on the City. On January 9, 2004, the Governor released a
proposed FY 2004 -05 State Budget that proposed to take $1.3
billion in property tax revenues from cities, counties, special
districts and redevelopment agencies on an on -going basis to the
ERAF accounts in each county to help defer the state's
obligation for K -12 education funding. This proposed increase
was on top of the $6 billion in property taxes already being
shifted to ERAF accounts ($250,000 estimated in FY 04/05 for
Moorpark). The $1.3 billion cut included a $135 million cut to
local redevelopment agencies and $188.6 million cut to cities.
This represented a loss to the City of Moorpark estimated at
$342,143 for FY 2003 -04 and another $446,248 in fiscal year
2004 -05.
The Governor's revised budget proposal released on May 13th
proposes that the cities, counties, special districts and
redevelopment agencies make a two -year contribution to solving
the state's budget deficit of $1.3 billion per year. This is an
alternative to his January budget, which proposed a permanent
$1.3 billion annual increase in the ERAF property tax shift.
This proposal has been evaluated by a working group of the Board
Members of the League of California Cities and a recommended
allocation method for the cities' $350 million contribution to
the state budget deficit has been proposed to the Governor and
Legislature. This recommended allocation method would be
allocated one -third on the basis of cities' proportionate share
of the VLF, property tax and sales tax with no contribution more
than 40 or less than 2% of a cities general revenues. Over two
years cities will pay in $700 million, but in the third year
they will get back $520 million, for a net three -year cost of
$180 million. Future contributions would be prevented by the
amendment. The centerpiece of the proposal is a permanent
City Manager's Budget Message
May 19, 2004
Page 3 of 26
reduction of the VLF rate from 2% to 0.65% (its current
effective rate). This would trigger the elimination of the VLF
backfill (approximately $4 billion) which would be replaced with
a like amount of property taxes, dollar - for - dollar, except for a
two year "contribution" by cities and counties of $700 million
($350 million each) in both 2004 -05 and 2005 -06. In the third
year, cities and counties would receive the full amount of the
new property tax in exchange for the VLF backfill, and it would
grow as property tax grows in the future. This would increase
every city's and every county's share of the property tax.
In exchange, the Governor pledges to lead a campaign to secure
legislative and voter support in November 2004 for a
constitutional amendment with revenue and mandate protections
equivalent to or better than the LOCAL initiative. In the
absence of an agreement, the Governor is expected to oppose the
LOCAL initiative.
The Local Taxpayers and Public Safety Protection Act is an
initiative sponsored by the League of California Cities, the
California State Association of Counties and the California
Special District Association. Planned for the November 2004
statewide ballot, the measure is intended to increase local
control over local tax dollars, so that funding for critical
local services is more dependable and predictable. The
initiative would require a majority vote of the people before
the state government would be allowed to take and use local
government funds. It also strengthens existing law that says
when the state mandates a program, service or added cost to
local governments, the state must reimburse the local
governments in a timely manner for the cost of providing that
program or service. It should be noted that assuming the
initiative qualifies, it will be on the November ballot until an
alternative in a form acceptable to the LOCAL Coalition is
approved by the Legislature.
The estimated impact of the $350 million "contribution" by
cities developed by the League based on information obtained
from the State Controller's Office for the City of Moorpark is
$263,886 in FY 04/05 and FY 05/06. Redevelopment agencies
across the State were also impacted in fiscal year 2003 -04 by a
one -time shift in property tax revenues totaling $135 million
statewide. The impact to the City of Moorpark Redevelopment
Agency in FY 03/04 is $135,608 and an estimated $251,000 in FY
04/05 and 05/06.
City Manager's
May 19, 2004
Page 4 of 26
Budget Message
The other part of the state's recovery plan includes the
adoption of Propositions 57 and 58 in March which will provide
for financing to partially fund the deficit and a balanced
budget requirement.
"Triple Flip" - On March 2, 2004, voters approved a statewide
ballot measure (Proposition 57) to issue $15 billion in deficit
reduction bonds. These bonds will be paid off over seven to
nine years based on the revenue stream that will fund them from
the "triple flip ". The "triple flip" suspends one- quarter
percent of the Bradley -Burns sales and use tax for cities and
counties, replaces the lost revenues on a dollar - for - dollar
basis with funds set aside from the countywide property tax
revenues (primarily ERAF), and increases the State's sales and
use tax by one - quarter percent with the State increase dedicated
to repayment of the bond measure. Though a lawsuit has been
filed challenging the reduction in the Bradley -Burns sales tax,
the triple flip is set to go into effect on July 1, 2004. The
impact to the City of Moorpark will be on cash flow and the
subsequent reduction in interest income due to biannual (catch-
up payments) rather than monthly sales tax payments. In
addition, there is the risk of not being made completely
"whole ".
As is customary, the Governor's proposed budget may be modified
during the next several weeks during deliberations by the state
legislature. Therefore, the City's recommended budget may
require additional adjustments after the State budget is adopted
by the legislature and signed by the governor.
Future Projections for the California Economy
The Governor's fiscal projections indicate improved labor
markets and stronger output growth are expected in 2004 and
2005. California personal income increased for the sixth
consecutive quarter in the second quarter of 2003. Also
encouraging, exports of made -in- California merchandise began to
increase again in the third quarter after falling for nearly
three years, and taxable sales posted a fifth consecutive year -
over -year gain. While indicators suggest that modest reform is
projected for 2004, job growth throughout the state will be
tempered due to the relatively high cost of doing business in
California. Recent changes to the State's workers' compensation
system by the legislature should aid in reducing employer costs.
City Manager's Budget Message
May 19, 2004
Page 5 of 26
Locally, the UCSB Economic Forecast for Ventura County projects:
• After a cyclical downturn in 2003, Ventura County is
expected to bounce back in 2004, but like the nation,
this will be a recovery with slow job growth. A 0.4
percent job growth in Ventura County is expected in 2004.
• As with the national economy, the consumer was the only
source of spending support in Ventura County in 2003. An
increase of real retail sales growth is predicted to be
2.2 percent in 2004.
• The median single - family home price value for December
2003 was $488,700. The annual value was an increase of
21.7 percent over 2002, or 18.5 percent in real terms. A
slowdown in median home price growth is predicted for
2004 -on.
• Ventura County issued 3,646 residential building permits
in 2003 compared with 2,499 in 2002. The increase in
1,147 units was comprised of an increase of 1,088
multiple- family units. 2004 building activity will be
smaller than 2003 but larger than 2002.
General Fund Reserves
The Council will recall that, as part of the last three annual
budgets, unspent appropriations and unanticipated revenues from
the 1999/00 fiscal year (the 11800 fund ") were set aside for
special projects and programs. The balance of these funds at
June 30, 2003, is $264,220. Of this amount, we anticipate that
$222,997 will be spent in the 2003/04 fiscal year, leaving a
balance of $41,223. The original purpose of the 11800" fund was
to provide funding for needed positions until General Fund
Revenue had increased to fund them. Since sufficient 2004/05 FY
projected General Fund revenue is available to fund these
projects and programs this year, it is recommended that the
tracking of these expenditures within the General Fund be
terminated and on -going funding be provided from the annual
General Fund revenues effective 6/30/04.
A recap of the General Fund for last year and this year is as
follows:
City Manager's Budget Message
May 19, 2004
Page 6 of 26
The projected deficits for FY 02/03 and FY 03/04 were absorbed
by the 11800" fund surplus within the General Fund. Revised
projections during the preparation of the FY 03/04 budget
projected a General Fund surplus for FY 02/03 of $558,756. At
the time, it was recommended that the surplus remain in the
reserve to fund the projected VLF revenue loss. As noted above,
the actual audited surplus for FY 02/03 turned out to be
$1,702,133. This was primarily due to operational savings and
capital improvement projects not being completed.
We are predicting that revenues in the General
2003/04 fiscal year will exceed expenditures
though historically the surplus has exceeded
departmental projects are not fully completed
end. In addition, the projected revenue
anticipated due to the $625,476 VLF "loan" in FY
Fund during the
by only $6,834
projections as
by fiscal year
is less than
03/04.
HISTORY OF MOORPARK'S GENERAL FUND BALANCE AND SURPLUS
Fiscal Years 1993 -94 Thru 2002 -03
$16
$14
$12 - - - --
N
$10 - - - -- - - - --
C
$H @O- - -- - - - -- - --
$6
$4 - - - -- - - -- - - - -- - - - --
$2
$0 1993- 1994- 1995- 1996- 1997- 1998- 1999- 2000- 2001- 2002-
94 95 96 97 98 99 00 01 02 03
FUND BALANCE 4.3192 4.5267 5.4605 5.8637 6.5795 7.4987 8.5361 10.598 11.754 13.456
—* SURPLUS 10.02.5 10.2075 0.9339 0.4032 0.7158 0.9192 1.0374 1.6236 1.1556 1.7021
FISCAL YEAR
FISCAL YEAR
2002/03
2003/04
Adopted
Adopted
Budget
Actual
Budget
Projected
Revenue
$8,863,288
$9,686,636
$ 9,820,706
$9,261,550
Expenditures
$9,041,221
$7,984,503
$10,010,597
$9,254,716
Surplus
(Deficit)
$(177,933)
$1,702,133
$ (189,891)
$ 6,834
The projected deficits for FY 02/03 and FY 03/04 were absorbed
by the 11800" fund surplus within the General Fund. Revised
projections during the preparation of the FY 03/04 budget
projected a General Fund surplus for FY 02/03 of $558,756. At
the time, it was recommended that the surplus remain in the
reserve to fund the projected VLF revenue loss. As noted above,
the actual audited surplus for FY 02/03 turned out to be
$1,702,133. This was primarily due to operational savings and
capital improvement projects not being completed.
We are predicting that revenues in the General
2003/04 fiscal year will exceed expenditures
though historically the surplus has exceeded
departmental projects are not fully completed
end. In addition, the projected revenue
anticipated due to the $625,476 VLF "loan" in FY
Fund during the
by only $6,834
projections as
by fiscal year
is less than
03/04.
HISTORY OF MOORPARK'S GENERAL FUND BALANCE AND SURPLUS
Fiscal Years 1993 -94 Thru 2002 -03
$16
$14
$12 - - - --
N
$10 - - - -- - - - --
C
$H @O- - -- - - - -- - --
$6
$4 - - - -- - - -- - - - -- - - - --
$2
$0 1993- 1994- 1995- 1996- 1997- 1998- 1999- 2000- 2001- 2002-
94 95 96 97 98 99 00 01 02 03
FUND BALANCE 4.3192 4.5267 5.4605 5.8637 6.5795 7.4987 8.5361 10.598 11.754 13.456
—* SURPLUS 10.02.5 10.2075 0.9339 0.4032 0.7158 0.9192 1.0374 1.6236 1.1556 1.7021
City Manager's Budget Message
May 19, 2004
Page 7 of 26
The General Fund Revenue Picture for the Coming Year
General - purpose revenues such as property and sales taxes are
anticipated to increase slightly in the 2004/05 fiscal year.
Property Tax Distribution
City of
Moorpark
ERAF 14.30% 7.40%
Ventur
County
20.39% Special School
Districts Districts
16.00% 41.90%
Sources 8d1 Coren 8 Cone
Property tax revenues are
expected to increase
approximately 5% for the
coming year, to $2.8 million.
While many new homes have
recently been built and sold
in Moorpark, they do not
generate substantial amounts
of property tax revenue for
the City. The City receives
only about 7.4% (6.7% after
ERAF) of property tax paid by
property owners in the
City - including the small portion that formerly was allocated
to the Mosquito Abatement District before the City assumed this
responsibility. For every $400,000 new home sold, the City will
only receive approximately $296 per year in property tax
revenues. Additionally, if the home is in the redevelopment
project area, that new revenue is channeled to the redevelopment
agency and not the City General Fund.
Sales Tax Distribution
7.25 Cents per Dollar
Ventura County
City of
Moorpark County
1 Transit
cent
95 rants
6 cents Source: State Board of Equalization
Sales tax revenues are
anticipated to increase
during the 2003/04 fiscal
year, from nearly $1.7
million in 2002/03 to $2
million. While we will see
only modest growth in the
economy, new retail
development will result in an
increase of about 8% for a
total of $2.16 million for
the 2004/05 fiscal year.
This is primarily due to the Moorpark Marketplace development
which is projected to generate 689 new jobs and over
City Manager's Budget Message
May 19, 2004
Page 8 of 26
$600,000 /year in sales tax with nearly full occupancy in FY
2004/05.
The third major source of revenue in the General Fund is Motor
Vehicle License Fees, estimated to be $2.3 million next year, up
nearly 6% over FY 02/03. As noted previously, the VLF backfill
"gap" for FY 03/04 ($625,476) is a loan to the State due to be
paid back in FY 06. VLF is an annual fee on the ownership of a
registered vehicle in California, levied in place of a property
tax on vehicles. These fees are collected by the State and
distributed to local jurisdictions on a per- capita basis. Total
revenues are allocated 61% to the State, 27% to counties, and
12% to cities.
General purpose revenues, such as taxes and motor vehicle fees
are the only significant source of revenue the City receives
which do not have restrictions on how they may be used. These
discretionary revenue sources are used to support a variety of
programs and services that do not have other dedicated revenue
sources. As inflation and the demand for services grow, the
future of those services depends on increases in these
discretionary revenues. Most significantly, in the 2004/05
fiscal year, 61% of the revenues from these three sources (sales
tax, property tax, and motor vehicle license fees) will be spent
on law enforcement services. Over the past six years, the
City's cost to provide law enforcement services has increased at
a higher rate each year than the General Fund revenues available
to provide these services. Law enforcement services now account
for 48% of all General Fund revenues (after deducting the cost
allocation reimbursement).
Interest earnings are projected to remain low in the coming
year. As interest rates have dropped, interest earnings have
also dropped, with revenues to the General Fund estimated at
only $150,000 in the coming year. The General Fund also
receives interest earned by the Endowment Fund in excess of 2 %,
however, no revenue is budgeted to be received by the General
Fund in the coming year due to rates not expected to exceed 2 %.
Below is a comparison of the General Fund budget projections for
FY 03/04 compared to the proposed FY 04/05 budget.
03/04
Projected
04/05
Budget
$ Increase
% Increase
Revenue
$9,261,550
$11,129,667
$1,868,117
20.2%
Expenditures
$9,254,716
$11,017,016
$1,762,300
19.0%
Surplus
$6,834
$112,651
City Manager's Budget Message
May 19, 2004
Page 9 of 26
The increase in revenue over the FY 03/04 projection is
primarily due to a projected increase in property tax
($130,250); sales tax ($160,000); and motor vehicle license
revenue ($922,034) as well as an increase in the cost allocation
plan reimbursement. It should be noted that the FY 03/04 VLF
revenue projection reflects the $625,476 reduction for the
"loan" to the State thereby explaining the "large" increase in
FY 04/05 over FY 03/04. A summary of revenue and expenditure
assumptions is included in an appendix in the Budget document.
The expenditure increase is primarily due to one -time
expenditures of $34,000 for the Hazardous Mitigation Plan and
Emergency Preparedness Handbook; $110,000 for Marquee Signs;
$25,000 for reconfiguration of the city hall public counter;
$28,000 for City Hall computer room fire suppression; $24,000
for Civic Center driveway redesign; and, increased Police
Services Contract costs and overall projected salary and benefit
increases.
While General Fund revenue is projected to increase,
expenditures are projected to increase at a similar rate. Also
as stated above, we are still not sure of the State budget
deficit impact on our projected revenues.
The recommended General Fund budget would be balanced
(anticipated revenues exceed anticipated expenses by $112,651)
except as previously indicated the projected $263,886 proposed
ERAF loss in FY 04/05 will cause the General Fund to have a
projected deficit of ($151,235). This ERAF shift is in addition
to the ERAF shift that began in FY 92/93 costing the City of
Moorpark approximately $260,000 in FY 04/05 and over $2 million
dollars to date.
Cost Increases Anticipated for the 2004/05 Fiscal Year
Staffing Expenses
The City Council has consistently attempted to ensure that
employees are compensated at competitive and market rate levels
to retain existing employees and attract the highest quality
employees. The Consumer Price Index information for April was
released May 14, 2004 and reflects a 2.3% increase over the
prior year.
CalPERS health insurance premiums have significantly increased
over the past few years. The City experienced an average
increase of approximately 18% effective January 2004. Rates are
City Manager's Budget Message
May 19, 2004
Page 10 of 26
anticipated to continue to rise and we have included a 20%
increase in the 04/05 budget effective January 1, 2005. Cal
PERS staff has indicated that information on the new rates won't
be available until mid -June. Staff will be following the
proposed long -term solutions to the crisis facing the health
care system. An evaluation of whether or not to remain in PERS
must be made by 6/30/04 in order to become effective January
2005.
A combination of declining investment returns in a poor
performing stock market the last few years and changes in
actuarial methodology has reduced the value of our assets held
with CalPERS to fund retirement costs. The City's required
contribution to CalPERS for retirement benefits is 3.581% in FY
03/04, up from 1.1020-8 in FY 02/03. Rates are increasing again
for FY 04/05 to 8.136 %. This is increasing costs to the City by
$171,797, including over $100,000 in the General Fund. Rates
are expected to increase again, to approximately 9 %, in the
05/06 fiscal year.
After several years of significant increases for general
liability insurance, we are seeing a leveling off of rates.
Projections indicate our cost for general liability insurance
will decrease over 25 %, however, workers compensation is
expected to increase over 25% for FY 04/05. It is anticipated
that workers compensation costs will gradually level out with
the Governor's reform package.
Other Expenses
Four years ago, the City implemented a comprehensive cost
allocation plan in compliance with federal regulations. This
plan allocates certain General Fund "overhead" costs to other
funds, including the Redevelopment Agency, Gas Tax Fund, and
others. As a result of this, in the 2004/05 fiscal year, the
General Fund will receive $1.8 million from other funds as
payment for services provided by the General Fund departments.
FY 2004/05 COST ALLOCATION PLAN SUMMARY
FUND
OVERHEAD CONTRIBUTION
Community Development
$553,922
L & L Assessment Districts
113,922
Park Maintenance Fund
352,730
Local Transit
121,045
Solid Waste AB 939
65,850
Gas Tax Fund
229,022
MRA- Low /Mod Housing
141,639
MRA- Operations
261,621
TOTAL
$1,839,731
City Manager's Budget Message
May 19, 2004
Page 11 of 26
This is an increase of $564,415 or 440 over the overhead
allocation for FY 03/04 due to the additional workload generated
by other departments in FY 02/03 on the General Fund and the
overhead being fully distributed.
It should be noted that the City also allocates "general"
overhead costs identified in the non - departmental central
services and information services divisions budgets of the
General Fund for actual costs for shared supplies, utilities,
network services, insurance, etc. based on the number of FTE's
and computer users in city hall.
The Equipment Replacement Fund was created many years ago to set
aside funds that would be needed to replace equipment, including
automobiles, as necessary. A one -time contribution of
approximately $402,000 was made during the 2001/02 fiscal year,
fully funding this account. This year's budget includes the
replacement of various computer monitors and cpu's in the amount
of $17,800. The fund balance projected at FY 04/05 year end is
$375,156. Based on our projected fixed asset annual accumulated
depreciation, we should maintain a minimum of $350,000 in this
fund.
Goals and Objectives
The City Council has established a number of goals and
objectives for the coming year, including their top ten
priorities. The recommended budget includes funding for these
top ten goals.
The priorities, goals and objectives will be further discussed
as part of the budget workshops.
City Council
Our cost for Local Agency Formation Commission for 2004/05 is
estimated to be $4,175. In addition, funding in the amount of
$6,550 has been included for VCOG membership; $2,950 for SCAG
and $10,525 for League of California Cities membership.
City Manager
Public Information
Although not included in the FY 2004/05 budget, negotiations
with Adelphia Communications for a new franchise agreement are
City Manager's Budget Message
May 19, 2004
Page 12 of 26
nearly complete and the agreement will include sufficient grant
funding to make the needed improvements to the Cable Channel 10
Broadcast System including:
1. Core equipment update
2. Purchase an automated Playback /BBS System
3. Complete audio system upgrade
4. Complete lighting system upgrade, and
5. Presentation facilities upgrade.
These improvements will provide
quality and creative presentation
programming on the City's Public
from Adelphia over the life of
provide the necessary resourc
facilities in the new City Hall.
a marked improvement in the
of broadcasts and information
Access Channel. The grants
the new franchise will also
es for establishing these
Also, although not included in the budget at this time, grant
funds can be used to provide live Council meetings over the
internet including searchable archives and long -term record
keeping.
Emergency Management
New items in this budget in response to the City's After - Action
Report for the "Simi Fire" include funding for a City Employee
Photo Identification Card System and four satellite phones. The
budget also supports a significant increase in staff training
and includes funds for training to establish a Community
Emergency Response Team (CERT) and an Emergency Preparedness
Handbook for Moorpark residents and businesses. The City is
eligible and will receive state and federal grant funding to
support many of these expenditures.
Redevelopment Agency
The Governor's May budget revision proposes about a $250 million
cut in redevelopment funding for each of the next two fiscal
years. The Agency's ERAF shift for fiscal year 02/03 was
$84,000, $135,608 for fiscal year 03/04 and another $251,000 is
projected in both FY 04/05 and FY 05/06. The additional
$115,392 is not included in the recommended budget and
adjustments will be required if the legislature agrees with this
recommendation.
City Manager's Budget Message
May 19, 2004
Page 13 of 26
A Secretary I position was not filled in FY 03/04 and the
position has been eliminated in FY 04/05. It is not anticipated
that there will be sufficient operating surplus to fund this
position in the near future.
Economic Development - Funding for Business Assistance loans has
been eliminated due to the increasing ERAF obligation to the
State. The budget includes funds for professional services to
complete the preparation of a new Five -Year Implementation Plan
(2004 -2009) which is a statutory requirement and to complete an
amendment to the Redevelopment Plan restoring eminent domain
authority for the Agency to acquire commercial or industrial
properties for redevelopment. Funds have also been included to
implement the Graphic Identity Marketing Plan.
Housing - As in past years, the Agency will pass through tax
increment revenues on to MUSD and other agencies in the county.
However, beginning in the 02/03 fiscal year, the Agency also
returns approximately $1 million in tax increment revenues to
the County in compliance with the Agency's pass- through tax
agreements. This is an increase from approximately $600,000 in
01/02 fiscal year. The Agency will make principal and interest
payments as follows:
• 1999 Tax Allocation Refunding Bonds $763,369
• 2001 Tax Allocation Bonds $601,216
It should also be noted that $20,400 has been included in the
General Fund from the Vintage Crest PILOT Agreement annual
payment.
Community Development Block Grant
Public Services Sub grant funding remains constant in the FY
2004/05 budget. Balances of funding allocation will be budgeted
for land acquisition and design development of the new Human
Services Complex.
Leqal Services
Litigation and other legal costs paid from the General Fund have
declined in the last year and staff projects these costs to
remain low in the coming year. Whenever appropriate, the cost
of legal services is charged to development projects. As in the
past, funding for litigation above a cumulative $25,000 is
appropriated by the Council separately as the need arises.
City Manager's Budget Message
May 19, 2004
Page 14 of 26
City Clerk
For the City Clerk's division, staff intends to continue to
focus on records retention with an allocation of $10,000 to hire
a qualified consultant to update the City's Records Retention
Schedule and conduct training on legal requirements for records
retention. Funds for the November 2004 estimated election costs
have been included. At this time the election expenses for the
North Park project if approved have not been included. However,
if needed, these expenses would be developer funded.
Administrative Services
Administration
The recommended budget includes $25,000 to remodel the reception
area of City hall. This project would create a more efficient
workspace for the Receptionist, create an additional work area,
and improve the design /atmosphere to better serve the public.
Information Svstems
During 2002/03, staff initiated the redesign of the City's
website which has recently been completed. Phase II of the
project is proposed to be completed in fiscal year 2004/05 and
is projected to cost approximately $30,000 which will be carried
over from fiscal year 2003/04. This will include developing
custom applications into the existing website to give the user
the ability to purchase online, complete applications online and
schedule appointments with different departments within the
City.
For the coming year, funding is also recommended to upgrade
financial software (Pentamation) and hardware, including a new
Windows server to replace our Unix server. Also, we have
included funds ($7,500) to cover the cost (hardware, software
and connection) to host the internet server currently being
hosted off -site. This will be more cost efficient as we will
also be able to host the GIS system and provide a faster
internet connection and more control.
Community Development
As predicted in the 2003/04 budget, the Community Development
Department is projecting a deficit in the Community Development
Fund. After several years of significant construction permit
City Manager's Budget Message
May 19, 2004
Page 15 of 26
revenue increases, the City started in fiscal year 2002/03 to
experience a falling off of revenues tied to new development.
As the City approaches build -out, fewer large -scale commercial,
industrial, and residential projects will be pursued. Also,
until FEMA and the County complete the Flood Control Study some
developments with about 400 residential units cannot proceed
which further contributes to the projected deficit in the
Community Development Fund. There are a few previously- approved
projects which will generate revenues but those are projected to
decrease in FY 2004 -05.
The Associate Planner and Secretary II positions have been
eliminated and additional staff time (25 %) for the Senior
Management Analyst is being charged to the Traffic System
Management Fund to reflect time needed to manage the recently
approved Council program.
The current projections for fiscal year 2004/05 indicate that
spending in the Community Development Fund will exceed revenues
by $719,230, creating a fund balance of ($469,208) at June 30,
2005. In past years, staff vacancies have led to cost savings
in both salaries /benefits and planned projects that could not be
completed. However, with staffing at normal levels, and
anticipated projects planned for the coming year, departmental
revenues will not be sufficient to cover expenses.
Obviously, the department cannot continue to operate in a
negative position and we are researching options to resolve this
problem. An hourly rate study was recently conducted by staff
and approved by Council to increase fees to the appropriate
levels. It appears, as stated in the FY 03/04 budget message,
that on a long -term basis the General Fund will need to
contribute funds to staff the department to serve our citizens.
The budget does include the preparation of a much needed Master
Plan of Trails and Bikeways in the amount of $100,000 fully
funded by Traffic System Management fees.
Community Services
Administration
The proposed 2004/05 fiscal year general fund budget includes
funding ($15,000) to hire a consultant to assist with the
development of a Park Master Plan. The plan will include
City Manager's Budget Message
May 19, 2004
Page 16 of 26
existing park facilities and identify future park locations and
amenities based on population and recreation trends.
The City received a funding request from the New West Symphony
for $12,950. Their request stated that the funds would be used
to send 3rd and 4th grade students in the Moorpark Unified School
District to a "Symphonic Adventure" program. The proposed
2004/05 fiscal year budget does not include funding for this
request.
Animal /Vector Control
In the 2004/05 fiscal year it is anticipated that the
animal /vector control division will be faced with an increased
demand for animal control service requests and the need to step
up mosquito surveillance as concerns about the West Nile Virus
are heightened. Despite pending future demands, there are no
significant budget changes proposed in the 2004/05 fiscal year
for the division over the current year, with the exception of
the planned cancellation of the division's property lease. The
City currently has a ground lease for the site of the
animal /vector control office building, which expires on June 30,
2004. Division staff will move into the vacated fire station
across from City Hall until the Corporate Yard construction has
been complete. This will generate a savings of approximately
$6,000.
In fiscal year 2004/05, the County proposes a number of budget
cuts impacting the Ventura County Animal Regulation Department.
To offset some of the budget cuts, the Department increased some
of its fees including licensing. The licensing and shelter fees
collected from Moorpark residents are used to cover
approximately half of the total cost of these services to the
City. The remaining 50 percent is funded by the City's General
Fund.
Since the City performs routine animal control services in-
house, the budget reductions will not be noticeable to most
Moorpark residents. If the County's budget reductions are
approved, most animal control services to the surrounding
unincorporated areas will be eliminated. It is unknown at this
time whether the City will notice an impact. Staff will
continue evaluating the feasibility of canvassing the City's dog
and cat owners to increase the number of licensed pets as well
as identifying methods to notify owners of annual renewals.
Additionally, staff will begin to explore options for licensing
City Manager's Budget Message
May 19, 2004
Page 17 of 26
animals in -house rather than relying on the County to perform
the service.
Transit
The bus purchase included in the current budget will be carried
over to the 2004/05 fiscal year. The purchase of two new buses
will be funded from a federal transportation grant at the time
the federal legislature approves the final transportation budget
authorization. When the new buses arrive, staff intends to
surplus the City's oldest bus and use another as a back -up bus.
The FY 2004/05 budget also includes TDA funding to install more
bus shelters and bus route holder signs. Bus service to the
Ventura County Fair has been eliminated in the FY 2004/05
budget. There has been very little interest in this service,
which has been offered for the past two years.
With the revisions to the Urbanized Area boundaries, the City's
transit system was re- categorized from a rural /urban system to
an urban system. This changes the City's farebox goal from 14.9
percent to 20 percent. The City has three years in which to
achieve the new goal. If the City is unable to achieve the goal
it may reduce its bus service or subsidize the costs.
Solid Waste
Effective July 1, 2004, the County will increase the surcharge
fee at the Simi Valley Landfill by $1.65 per ton which equates
to an approximately 22� increase per month to the residential
refuse rate. The staff is negotiating with the City's franchise
haulers to delay assessing Moorpark customers for the increase
until January 1, 2005, to avoid a mid -year rate increase. The
City Council will receive a report on this in June.
Additionally, the California
imposed by the County on all
will be decreased by 45G per
which equates to approximatE
refuse rates. Staff proposes
haulers to the City.
Active Adult Center
Integrated Waste Management fee
refuse haulers in Ventura County
ton. This is a pass- through fee
!ly 2G per month to residential
that this fee be remitted by the
One of the potential budget cuts the County is considering in
fiscal year 04/05 is a reduction or elimination of the Senior
Nutrition Program. The City hosts a Senior Nutrition Congregate
City Manager's Budget Message
May 19, 2004
Page 18 of 26
Meal Site where a noon meal is served each weekday and a Home
Delivered Meal Site where meals are assembled for delivery to
homebound senior citizens. The City contributes $10,000 to this
program to support the cost_ of a meal site coordinator. The
final outcome of the County's budget will not be known until
after the City adopts its budget. In the event the program is
eliminated, the City Council may wish to revisit this issue.
At the Council's direction, the level of CDBG funding for the
City's Active Adult Center in FY 2004/05 has been reduced from
$12,000 in the current fiscal year to $5,500. The General Fund
will fund the remaining cost for the three part -time employees.
Facilities
Funds are included in the amount of $28,000 to install a fire
suppression system for the City Hall computer room. This is a
non -water based system that in the event of a fire will activate
prior to the code - required sprinkler system activation which
would have a devastating impact on the City's main computer
server.
Recreation
Funds to implement an on -line registration system in the amount
of $16,500 have been included in the FY 2004/05 budget. The
recreation division has completed an evaluation of the software
options and is prepared to move forward.
Youth Recreation Programs - The recreation division plans to
continue promoting the Youth Scholarship Program, implementing
the Council's recommendation to encourage donations to the
program through the quarterly recreation brochure. The new
budget also includes funding to hire a consultant to assist with
the development of a Youth Master Plan in the amount of $7,000.
Teen Programs - In the current fiscal year the Teen Travel Camp
program unexpectedly required assistance from the General Fund
in the amount of $9,000. The intent was that camp fees would
cover all of the direct and indirect costs for this program.
For FY 2004/05 the recreation division has revised the fees and
trip schedule in an effort to sufficiently cover costs. To
protect the General Fund, promotional materials for this program
will include a cancellation statement notifying families that
the program will be cancelled if the anticipated participation
numbers do not materialize.
City Manager's Budget Message
May 19, 2004
Page 19 of 26
In cooperation with the Moorpark Boys and Girls Club, the
recreation division will implement a couple of changes to the
Moorpark After Dark program in FY 2004/05. The changes are
being made in response to cost increases, in particular the
increased cost in police services. The dances will end at 9:30
p.m. rather than 10:00 p.m. and there will be a nominal cost for
pizza. These changes should keep the program financially
stable.
Special Event Programs - The division is not proposing any new
special events, but it has incorporated the Council's and the
Parks and Recreation Commission's recommendation to add a man-
made snow component to the Hometown Holiday Event at a cost of
$3,000 making the total for the event $4,000. The division is
also recommending the elimination of the Visit with Santa Event
since it serves a very small segment of the community.
Library
Depending on the outcome of the State budget cuts, the Moorpark
library may be under funded by approximately $2,000. If this
should occur, the City may be asked to make up the difference
from its Library Facility Fee Fund balance. However, impacts to
the Moorpark Library's hours of operation are not anticipated.
Park Maintenance
The total operational cost to maintain the City's parks is
projected to be $1.46 million for the 2004/05 fiscal year.
Special assessments paid by property owners will pay
approximately $552,000 of this amount leaving the General Fund
to fund the remaining $914,000. This is an increase over FY
03/04 level by approximately $150,000. The increase is a result
of rising costs for staff and overhead charges and a projected 8
percent increase in contract maintenance costs.
Capital Improvement Projects proposed for the FY 04/05 include:
• Design work for the expansion of the gym at AVRC
• Expansion of the office space at AVRC
• Design and partial construction of Poindexter Park
• Design of the new park at the corner of Magnolia and
Charles Street
• Replacement of playground equipment at Virginia Colony Park
• Construction of restrooms at Glenwood Park
City Manager's Budget Message
May 19, 2004
Page 20 of 26
In addition, several projects that were not completed in the
current fiscal year will be carried over into the new year
including completion of AVCP Phase II and replacement of
playground equipment at Mountain Meadows.
It should be noted that the landscape costs to maintain the new
areas is projected to be $33,144 annually which has not been
included in the FY 04/05 budget. This includes the cost for
approximately 11 acres of landscaping, restroom, playlot and
hardscape.
Public Works
Administration
It should be noted that no additional monies have been requested
for efforts related to the further development of Public Works
GIS applications. Staff is looking into possible development of
this resource. Any future recommendation requiring additional
funding will be brought forward to the City Council.
Engineering
With the hiring of the new City Engineer in FY 2003/04,
responsibility for the administration of the contract engineer
agreement with Charles Abbott Associates was transferred from
the Community Development Department to the City Engineer.
It should be noted that the engineering and traffic retainer is
now accounted for within the Engineering Department funded 12.5%
from the General Fund and 87.5% from the Community Development
Fund and the traffic retainer is funded 50% Community
Development and 50% Gas Tax Fund.
Council will recall that the funding for the City Engineer
position was initially proposed to be funded by a combination of
the General Fund reserve, project related funds (including the
Los Angeles Avenue AOC), Citywide Traffic Fund, Traffic System
Management Fund and $100,000 paid by Pacific Communities for
processing of Los Angeles Avenue improvements. To date, the
position has been funded from the General Fund. Charges will be
identified from the other funding sources to reimburse the
General Fund for FY 03/04 and 04/05 costs.
City Manager's
May 19, 2004
Page 21 of 26
Budget Message
It should be noted that a study of engineer and public works
services will be completed by early 2005 with further
recommendations to be brought back to Council at that time.
Lighting and Landscaping District
As reported by the Public Works Director, several of the
Lighting and Landscaping (L &L) District zones continue to face
deficit fund positions, as assessment revenues have not been
adequate to pay all lighting and landscaping related expenses.
Last November the City Council approved fund transfers from the
General Fund and the Gas Tax Fund in an aggregate amount of
$71,936 in order to "balance out" the FY 02/03 year -end deficits
for certain of the Assessment District Funds. In a staff report
from the Public Works Director dated May 5, 2004, the City
Council was advised that a like fund transfer of about $27,000
will again be requested next November to "balance out" the
anticipated FY 03/04 year -end Assessment District Fund deficits.
This transfer is included in the FY 04/05 budget. That staff
report also mentions that the projected aggregate deficits for
year -end FY 04/05 is about $91,000.
Prior to the 2001/02 fiscal year, it had been our policy that
the L &L District(s) would only be charged the direct cost of
providing these services (electricity costs, landscape contract
costs, etc.) However, beginning in the 2001/02 fiscal year, we
began charging the larger assessment district zones for some of
the staff time required to oversee the contracts and administer
the districts. For the 2004/05 fiscal year, we will continue to
limit these charges to only those zones with fund balances in
excess of $25,000.
It is anticipated that upon payment of future AOC fees by
Cypress Land Company, there will be adequate funding available
to proceed with the design and construction of the median
landscaping on Tierra Rejada Road east of Spring Road. It
should be noted, however, that the addition of this area to the
landscaping maintained by the City will cause the expected
deficit in the Citywide Landscape Maintenance Fund (Fund 2300)
to increase. This will also be the case for Spring Road median
north of New LA Avenue.
Street /Signal Maintenance
It is the intent of staff to seek bids for a new Traffic Signal
Maintenance Contract based on new, more comprehensive
City Manager's Budget Message
May 19, 2004
Page 22 of 26
maintenance specifications and requirements. Additional funds
have been budgeted for an anticipated increase in the cost for
this service.
Costs related to changing the name of Los Angeles Avenue (East)
to Princeton Avenue are expected to be minor and will be
absorbed by the budget for sign maintenance.
mpnR.q
Although NPDES requirements and efforts continue to grow, the
budget amount for this program (Division 8320) in the amount of
$34,248 remains basically the same as last year. At this point,
no large cost increases are anticipated.
Police Services
The recommended budget assumes that the State Supplemental Law
Enforcement Grant (SLESF) will remain the same for the coming
year, with anticipated revenues of $100,000. These revenues are
used to partially fund a 40 -hour Patrol Officer.
In fiscal year 2001/02 the City received and allocated $39,908
of California Law Enforcement Equipment Program (CLEEP) monies.
In FY 02/03 the City received $20,475 to be spent by 6/30/04.
The State budget did not fund the continuation of these funds
for FY 03/04 or FY 04/05.
The current contract between the County of Ventura and the
Deputy Sheriff's Association expires on July 1, 2005. Within
the contract, salary increases are expected on July 4, 2004 of
3 %. For FY 04/05 the estimated increase for contract rates are
projected to be 14 %. The major contributors to this increase
are salaries ( +3 %), retirement ( +54 %), and worker's compensation
( +12 %). This increase is on top of the approximate 16% increase
in FY 03/04.
Below is a sampling of positions and the most recent percentage
increases.
City Manager's Budget Message
May 19, 2004
Page 23 of 26
POSITION
FY
02/03
FY
03/04
PERCENTAGE
INCREASE
FY
04/05
PERCENTAGE
INCREASE
Captain
176,699
208,289
17.9%
237,449
14.0%
Sergeant -Det.
145,772
165,950
13.8%
189,183
14.0`k
Senior Deputy -Det
125,122
141,817
13.3%
161,671
14.0%
40 -hr. Traffic
Motor w/o relief
129,841
154,753
19.2%
176,418
14.0%
84 hr. Patrol
n/a
353,376
n/a
402,849
14.0%
24 hr. Patrol
647,425
706,752
9.2%
805,697
14.0%
The projected increased cost for 75% of the HSRO Officer funded
by MUSD will be $11,387.28 annually and although not included in
the budget at this time will be included in the final document.
As previously reported to the Council, modification in the
deployment at the Moorpark Police Station resulted in a change
to the costs for this service. Since September 1, 2002,
Sheriff's staffing for a portion of the east County
unincorporated areas have been stationed at Moorpark. This
includes 4 sergeants, 14 deputies, 2 senior deputies and a
records clerk. About this same time the deployment for most
patrol deputies transitioned to a 12 hour shift. This resulted
in the creation of an 84 hour patrol instead of a 56 hour
patrol. With these shifts, the overhead cost for the City
positions increased. Also, overtime costs are projected to
increase in FY 04/05 to $37,364 from $9,800 in FY 03/04 for
additional transportation to Ventura due to East Valley Jail
closing and special events because County CSU disbanded. Also,
included is $7,500 additional for car mileage and $21,600 per
year for modems in car.
In addition to the deployment referenced above, other
adjustments included the following:
• 50% of the cost of the Captain;
• 100% of the cost of City's Administrative Sergeant;
• 25% of the Detective Sergeant; and
• 50% of the Deputy position assigned to the 3- person
Detective Unit
are now not charged to the City. These changes recognize the
shared costs of these positions with the County unincorporated
positions. In addition, for FY 2002/03 the Administrative
Assistant position was deleted and replaced with an additional
Cadet position.
a
City Manager's Budget Message
May 19, 2004
Page 24 of 26
As in FY 03/04, MUSD continues to fund 75% of the cost of the
High School Resource Officer (HSRO). The City funds 100% of the
5th grade DARE officer.
The FY 03/04 rates recently adopted by the Board of Supervisors
will result in a projected net surplus of $581,833 for Moorpark
over the FY 03/04 adopted budget due to the reduction of one 84-
hour car. The City was able to provide the same level of
coverage with the change in 12 -hour shift.
It is anticipated that the new Police Services Facility will be
completed in Spring 2005 and rent for six months at the Flory
location is budgeted and three months' operational costs for the
new facility have been included in the FY 04/05 departmental
budget. This includes estimated costs for electricity
($32,000), gas ($21,650), water and sewer ($650), and
maintenance costs ($3,500) . In addition, an office assistant
position has been included at a cost of $14,000 for three
months. Projected revenue for the California Highway Patrol
lease for three months ($17,538) has also been included.
The Budget Document
The City Manager's Recommended budget has been reformatted this
year to include summary and detail reports as well as support
documentation in one binder.
Capital Improvement Budget
The Public Works Director has prepared a seven -year Capital
Improvement Plan for street and related projects that will be
presented to the City Council soon. The capital improvement
projects included in this recommended budget are in compliance
with the draft CIP being prepared for the City Council's
consideration.
Because capital improvement projects span many years, the budget
appropriation for these projects is carried forward from year to
year until the project is complete. The amounts shown for the
2004/05 fiscal year will be adjusted after conclusion of the
2003/04 fiscal year, when actual project expenses to date are
tallied.
The City has proposed a very aggressive project list for fiscal
year 2004 -05 totaling over $27 million dollars. Please refer to
this document for more detailed information about each proposed
capital improvement project.
t
City Manager's Budget Message
May 19, 2004
Page 25 of 26
It should be noted that the following projects are proposed to
be partially funded in FY 04/05 from the Endowment Fund:
• Police Services Facility $5,350,000
• City Hall Facility $1,100,000
• Corporation Yard $4,318,230
Total $10,768,230
This will leave the Endowment Fund with a projected fund balance
of $2,000,273. A portion of the funding for the Police Services
Facility will be a loan from the Endowment Fund and will be paid
back over the next several years from police facilities fees.
Buildout for residential is expected by 2020 and non - residential
by 2025 with a projected police facilities fee at current rates
totaling $4.3 million.
Summary
The recommended budget includes no new programs or increased
services (with the exception of a few very low -cost one -time
items) and is basically status -quo from the 2003/04 fiscal year
with the exception of the changes in sheriff staffing, the
deletion of an associate planner and two secretary positions.
Staff will continue to monitor both the on -going State Budget
crisis and the City's local revenue receipts and expenditures on
a monthly basis to maintain a balanced budget.
Several points should be emphasized:
There is a long term need for additional General Fund revenue to
fund:
• the maintenance of the new police, city yard and city
hall facilities,
• increasing health care costs which have averaged over
12% the last three years,
• PERS retirement cost increases projected to jump from
3.581% to 8.581% effective 7/1/04 and then again jump
to 9% effective 7/1/05 costing the General Fund an
estimated $108,000 in 04/05 and another $40,000 for
05/06,
• long term street maintenance needs since Gas Tax
provides only for staff and basic maintenance. We
t
} City Manager's Budget Message
May 19, 2004
Page 26 of 26
currently use TDA and grant funds to fund slurry,
overlay and reconstruction projects,
• GASB 34 potential costs for long -term infrastructure
replacement costs for parks, streets, etc.,
• the cost allocation plan, while appropriate does serve
to drain dollars from other funds. The goal should be
to have enough General Fund surplus to fund this cost
($1,839,731 for FY 04/05),
• assessment district subsidies projected to be
approximately $91,000 for FY 04/05.
• three developer provided payments for FY 04/05 are
anticipated from Toll ($750,000), Asadarian ($80,000)
and Pardee ($300,000). The Toll payment is budgeted
in the Endowment Fund, however, the Asadarian and
Pardee payments have not been included and are subject
to future Council direction.
• potential trickle -down effect from the County as a
result of the State budget hit. Already included are
additional sheriff costs resulting from closing of the
East Valley Holding Facility, elimination of CSU and
rate increases almost 5 times higher than CPI, future
animal control and senior services program costs.
Continued uncertainty with the State Budget through at least the
November 2004 elections makes the City's budget decisions
somewhat difficult and will probably require a mid -year
evaluation of the adopted budget.
My thanks to the Department Managers and their support staff and
finance staff for their outstanding work, interdepartmental
cooperation and commitment in preparing this budget. As in the
past, the Budget summary will be available on the City's website
at'www.ci.moorpark.ca.us.
Recommendation
It is recommended that the City Council receive the recommended
Operating and Capital Improvements Budget for fiscal year
2004/05 and set a budget workshop for May 26, 2004.