HomeMy WebLinkAboutAGENDA REPORT 2017 0621 CCSA REG ITEM 10I ITEM 10.1.
CITY OF MOORPARK,CALIFORNIA
City Council Meeting
ACTION:. 4.4mcd
MOORPARK CITY COUNCIL / ,:� "�" , 5
AGENDA REPORT BY:
To: Honorable City Council
From: Ron Ahlers, Finance Director V�
By: Irmina Lumbad, Deputy Finance Director
Date: June 5, 2017 (CC Meeting of 06/21/17)
Subject: Consider Equipment Replacement Fund (3003) Projected Status as of
June 30, 2017 and Consider Resolution Amending Fiscal Year
2016/2017 Budget by Appropriating $428,551.34 and Authorizing the
Transfers from Various Sources to the Equipment Replacement Fund
(3003) and Authorizing the Designation of Fund Balance for
Equipment Replacement Obligation in Certain Restricted Funds
SUMMARY
At June 30, 2017, the projected total book value of the City's active machineries and
equipment is $8,867,347.50 (Attachment 1); five items worth $92,356.83 have already
been replaced, but retained in inventory. The equipment replacement obligation is
estimated to be $4,811,000.02. Of this obligation, the share of transit items is
$1,034,330.76 and the allocation for Successor Agency to the Moorpark
Redevelopment Agency (SARA) funded items is $69,449.28. At year end, the
estimated balance of monies set-aside for equipment replacement in various funds will
total $3,311,362.37. The projected shortfall for equipment replacement across various
funds is $465,306.89.
DISCUSSION
In fiscal year (FY) 1985/86, the Equipment Replacement Fund (ERF) was established to
set-aside funds to replace various machineries and equipment as they age and/or as
the asset's useful life has exhausted. The annual contribution to the ERF is allocated to
various sources that originally financed the acquisition of the asset, subject to
availability of unreserved fund balance. The ERF fund balance should equal the
accumulated depreciation of capital asset plus the replacement cost of non-capital
assets due for replacement less the estimated revenue from investment earnings and
proceeds from asset disposal.
126
Honorable City Council
June 21, 2017
Page 2
Through June 30, 2016, ERF posted $3,736,458.00 contributions from various funds;
earned $399,214.73 investment income and proceeds from sale of assets; and received
$377,351.00 development fees from Pardee Homes, specifically for replacement for
park amenities at Mammoth Highlands Park. Over the years, the City expended
$1,581,865.65 from ERF to replace aging or outdated equipment.
Contributions(Transfers)Other Funds
Traffic Library Special
General Fund Safety Facilities Community Gas Tax Projects
(1000) (2000)b TSM (2001) (2004) Devt (2200) (2415)` (3004) TOTAL
FY 1985/86-
FY 1994/95 $123,079.00 $90,000.00 $213,079.00
FY 1995/96-
FY 2004/05 $786,542.00 $17,055.00 $19,002.00 $822,599.00
FY 2005/06-
FY 2014/15a $120,000.00 $161,994.00 $75,232.00 $102,021.00 $149,568.00 $1,763,551.00 $2,372,366.00
FY 2015/16 $54,037.00 $17,115.00 $257,262.00 $328,414.00
$1,029,621.00 $161,994.00 $129,269.00 $119,136.00 $17,055.00 $258,570.00 $2,020,813.00 $3,736,458.00
a Msc Revenue includes $377,351 from Pardee Homes to satisfy Section 6.9 of Ordinance 263 Moorpark Highlands SP2.
In FY 13/14 Traffic Safety reimbursed ERF$66,582 for traffic enforcement equipment replaced using ERF.
In FY 13/14 Gas Tax reimbursed ERF$149,568 for street maintenance equipment replaced using ERF.
During the current year, the City acquired two vehicles with aggregate cost of
$49,336.70 — 2017 Chevy Colorado F150 ($26,971.25 from ERF) and 2014 Chevy Volt
($22,365.45 from Traffic System Management Fund). These items replaced Code
Compliance vehicle no. 65, which has been retained in service and pool car vehicle No.
22 ($14,036.32), which was sent to surplus last April. In addition, $402,055.43 of
various capital assets have been disposed including two buses ($349,114.72) and two
trucks ($47,769.40). The City received $4,979.50 from the proceeds of asset sale. At
June 30, 2017, the estimated total book value of machineries and equipment is
$8,867,347.50 — capitalized machinery and equipment $7,769,731.84 plus non-capital
items of $1,097,615.66. The capitalized total comprises of $189,637.39 funded by the
Successor Agency to the Moorpark Redevelopment Agency (SARA); playground
equipment and transit vehicles valued at $1,171,726.12 and $2,159,421.29,
respectively. Attachment 1 shows the breakdown by asset category.
For FY 2016/17, the City appropriated $62,500.00 from ERF as following items:
• Phone system upgrade at Moorpark Public Services Facility - $9,000.00
• Client Access Licenses - $12,500.00
• Replacement of Parks vehicle no. 43 (2002 Ford F-350) — $38,000.00
127
Honorable City Council
June 21, 2017
Page 3
Assuming no other activities for the current year, the estimated City-wide obligation is
$4,811,000.02. The aggregate reserves for equipment replacement are estimated to be
$3,311,362.37 leaving $1,499,637.65 unfunded. $1,034,330.76 for transit items will not
be reserved since the replacements are usually funded by a grant. The State
Department of Finance has approved the SARA Long-Range Property Management
Plan; the previously deferred obligation of $69,449.28 should now be funded in ERF.
The obligation and funding status are as follows:
Distribution by Fund
OBLIGATION ERF GAS Tax LMD' Transit SARA
(deferred)m (deferred)
Accum Deprec,7/1/16 $4,667,550.69
+ 1617 Estimated Depreciation $502,020.58
expense
- Accumulated Depreciation 1617 ($416,091.75)
disposals
Projected Accum Deprec,6/30/17 $4,753,479.52 $3,206,072.93 $315,987.83 $127,638.72 $1,034,330.76 $69,449.28
+ ERF appropriations 1617 $62,500.00 $62,500.00
- Proceeds from 1617 disposals ($4,979.50) ($4,979.50)
- Estimated 1617 Invest. Income $0.00
Projected ERF Obligation,6/30/17 $4,811,000.02 $3,263,593.43 $315,987.83 $127,638.72 $1,034,330.76 $69,449.28
Reserves as of6/30/2016 $3,311,362.37 $2,904,491.37 $301,204.00 $105,667.00 $0.00 $0.00
Unfunded Obligation,6/30/2017 $1,499,637.65 $359,102.06 $14,783.83 $21,971.72 $1,034,330.76 $69,449.28
- Deferred Amounts ($1,034,330.76) ($1,034,330.76)
Shorftall $465,306.89 $359,102.06 $14,783.83 $21,971.72 $0.00 $69,449.28
* Landscape Maintenance Districts 2, 12, 15&22
Transit funded by Prop 1B-Local Streets &Roads (2434)$137,323.38 and Local Transit 8c(2414)$897,007.38.
If no funding is set-aside in the current year and all appropriations (FY 2016/15 -
$62,500 and FY 2017/18 - $314,500) are expended by June 30, 2018, the shortfall will
increase by $909,631.95 to $1,374,938.84.
FISCAL IMPACT
The adopted FY 2016/17 operating budget does not include transfers to the ERF. The
$465,306.89 shortfall is recommended to be funded as follows:
1. Approve the funding of the Gas Tax (2415) equipment replacement obligation of
$14,783.83 and direct the Finance Department to process the necessary
accounting entries to designate an additional $14,783.83 in the Reserve for
Equipment Replacement account (33020) within the fund.
128
Honorable City Council
June 21, 2017
Page 4
Reserve for Equipment Replacement(33020)
Projected
Balance @ Obligation FY16/17
6/30/2016 6/30/2017 Set-Aside
Gas Tax 2415 $301,204.00 $315,987.83 $14,783.83
The projected fund balance at 6/30/2017 after this provision is $693,389.75. The
estimated fund balance at 6/30/2018 is $39,344.17. SB1 was signed into law last
May 2017 that provides more funding for streets. Staff anticipates that there will
be enough money to cover this obligation.
2. Approve the funding of the various Landscape Maintenance Districts equipment
replacement obligation of $21,971.72 and direct the Finance Department to
process the necessary accounting entries to designate an additional $21,971.72
in the Reserve for Equipment Replacement account (33020) in the following
amounts:
Reserve for Equipment Replacement(33020)
Projected
Balance @ Obligation FY16/17
6/30/2016 6/30/2017 Set-Aside
2302: 84-2 Steeple Hill 12865 $16,280.00 $19,590.96 $3,310.96
2312 84-2 Carlsberg $16,946.00 $20,392.09 $3,446.09
2315 Country Club Estates $30,452.00 $36,646.05 $6,194.05
2322 Moorpark Highlands $41,989.00 $51,009.62 $9,020.62
TOTAL $105,667.00 $127,638.72 $21,971.72
3. Approve a budget amendment with an aggregate appropriation of $428,551.34 -
Library Facilities Fund (2004) -$5,606.00; Traffic System Management Fund
(2001) - $1,116.00; and General Fund (1000) - $421,829.34. The General
Fund's portion, which includes $69,449.28 for SARA assets, is proposed to be
funded by a transfer from the Special Projects Fund (3004). Authorize the
transfer of $428,551.34 to the Equipment Replacement Fund (3003).
STAFF RECOMMENDATION (ROLL CALL VOTE)
1. Adopt Resolution No. 2017- amending the FY 2016/17 Budget by
appropriating $428,551.34 and authorizing the transfers from various sources to
the Equipment Replacement Fund (3003); and
129
Honorable City Council
June 21, 2017
Page 5
2. Authorize the additional designation of fund balance for Equipment Replacement
Obligation in certain restricted funds.
Attachments:
1) Summary of Covered Equipment & Machineries by Category (Unadjusted
Book Value)
2) Resolution No. 2017-
130
Attachment 1
CITY OF MOORPARK
Summary of Covered Equipment& Machineries by Category
Book Value of Active Equipment
As of 06/30/2017 Projected
Capital EXCLUDED
Category Category Title COVERED TOTAL
Asset ITEMS
Inventory COMPUTER COMPUTER EQUIPMENT $ 119,239.42 $ 332,247.29 $ 451,486.71
Only LICVEH OTHER LICENSED VEHICLES $ 2,523.58 $ 2,523.58
MACH MACHINERY AND TOOLS $ 35,838.31 $ 35,838.31
OFFEQUIP OFFICE EQUIPMENT $ 29,856.70 $ 29,856.70
OFFFURN OFFICE FURNITURE $45,630.14 $ 45,630.14
OTHEQUIP OTHER EQUIPMENT $ 372,954.88 $ 372,954.88
OTHVEH OTHER VEHICLES $ 21,882.88 $ 21,882.88
OUTDOOR OUTDOOR EQUIPMENT $ 219,642.44 $ 219,642.44
PLAYEQUP PLAYGROUND EQUIPMENT $ 37,039.44 $ 37,039.44
Sub-Total $ 119,239.42 $ 1,097,615.66 $ 1,216,855.08
Capital AUTO AUTOMOBILES $ 27,395.53 $ 119,144.44 $ 146,539.97
Assets COMPUTER COMPUTER EQUIPMENT $ 59,604.17 $ 823,308.86 $ 882,913.03
HVYTRUCK HEAVY TRUCK $ 229,672.75 $ 229,672.75
LGTTRUCK LIGHT TRUCKS $ 365,780.62 $ 365,780.62
LICVEH OTHER LICENSED VEHICLES $ 103,357.39 $ 103,357.39
OFFEQUIP OFFICE EQUIPMENT $ 5,357.13 $ 324,848.58 $ 330,205.71
OFFFURN OFFICE FURNITURE $ 580,408.75 $ 580,408.75
OTHEQUIP OTHER EQUIPMENT $ 891,860.31 $ 891,860.31
OTHVEH OTHER VEHICLES $ 246,044.07 $ 246,044.07
OUTDOOR OUTDOOR EQUIPMENT $ 661,801.83 $ 661,801.83
PLAYEQUP PLAYGROUND EQUIPMENT $ 1,171,726.12 $ 1,171,726.12
TRANSIT BUSES $ 2,159,421.29 $ 2,159,421.29
Sub-Total $ 92,356.83 $ 7,677,375.01 $ 7,769,731.84
GRAND TOTAL $ 211,596.25 $ 8,774,990.67 $ 8,986,586.92
Adjustments:
Excluded items acquired prior to 06/30/2004 ($ 119,239.42) $ 0.00 ($ 119,239.42)
$ 92,356.83 $ 8,774,990.67 $ 8,867,347.50
131
ATTACHMENT.2
RESOLUTION NO. 2017 -
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
MOORPARK, CALIFORNIA, AMENDING THE FISCAL YEAR
2016/2017 BUDGET BY APPROPRIATING $428,551.34 AND
AUTHORIZING THE TRANSFERS FROM VARIOUS
SOURCES TO THE EQUIPMENT REPLACEMENT FUND
(3003); AND AUTHORIZING THE DESIGNATION OF FUND
BALANCE FOR EQUIPMENT REPLACEMENT OBLIGATION
IN CERTAIN RESTRICTED FUNDS
WHEREAS, in Fiscal Year (FY) 1985/86 the City established the Equipment
Replacement Fund (3003) to set-aside money to replace various machineries and
equipment as they age and/or as the asset's useful life has exhausted; and
WHEREAS, on June 15, 2016, the City Council adopted the Operating and Capital
Improvement Budget for FY 2016/2017, and it does not include any transfers to the
Equipment Replacement Fund (3003); and
WHEREAS, a staff report has been presented to the City Council summarizing the
projected unfunded obligation totaling $1,499,637.65 at June 30, 2017. Of this total, the
aggregate share of $1,034,330.76 for transit machineries will continue to be deferred
leaving $465,306.89 to be funded; and
WHEREAS, accounting entries totaling $36,755.55 — $14,783.83 from the Gas Tax
Fund (2415), $3,310.96 from 84-2 Steeple Hill T2865 (2302), $3,446.09 from 84-2
Carlsberg (2312), $6,194.05 from Country Club Estates (2315) and $9,020.62 from
Moorpark Highlands (2322) are required to be designated as additional obligation in
Account 33020.— Reserve for Equipment Replacement within the respective funds; and
WHEREAS, the Equipment Replacement Fund (3003) accounts for the aggregate
city-wide share of the obligation of $428,551.34. The General Fund's portion of
$421,829.34 is recommended to be funded by a transfer from the Special Projects Fund
(3004). A budget amendment is required and the following transfers are recommended
from these funds: Library Facilities (2004) - $5,606.00; Traffic Systems Management
(2001) - $1,116.00; and Special Projects (3004) - $421,829.34; and
WHEREAS, Exhibits "A" and "B", attached hereto and made a part hereof,
describes said budget amendments and the resultant impacts to the budget line items.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF MOORPARK DOES
HEREBY RESOLVE AS FOLLOWS:
132
Resolution No. 2017-
Page 2
SECTION 1. That the deferral of the funding obligation for transit related assets
with aggregate total of $1,034,330.76; Local Transit Article 8c Fund (2414) - $897,007.38
and Proposition 1B Local Streets and Roads Fund (2434) - $137,323.38 is hereby
approved.
SECTION 2. That the accounting entries totaling $36,755.55 to designate
additional fund balance reserve for equipment replacement as more particularly described
in Exhibit "A" is hereby approved.
SECTION 3. That an aggregate budget amendment and fund transfer of
$428,551.34, as more particularly described in Exhibit"B", is hereby approved.
SECTION 4. The City Clerk shall certify to the adoption of this resolution and
shall cause a certified resolution to be filed in the book of original resolutions.
PASSED AND ADOPTED this 21st day of June, 2017.
Janice S. Parvin, Mayor
ATTEST:
Maureen Benson, City Clerk
Attachments:
Exhibit 'A'
Exhibit 'B'
133
Resolution No. 2017-
Page 3
Exhibit A
•
Fund Balance Designation for Equipment Replacement Reserve
Fund Fund/Account From To
Gas Tax 2415-000-00000-33990 $14,783.83
2415-000-00000-33020 $14,783.83
84-2 Steeple Hill T2865 2302-000-00000-33990 $3,310.96
2302-000-00000-33020 $3,310.96
84-2 Carlsberg 2312-000-00000-33990 $3,446.09
2312-000-00000-33020 $3,446.09
Country Club Estates 2315-000-00000-33990 $6,194.05
2315-000-00000-33020 $6,194.05
Moorpark Highlands 2322-000-00000-33990 $9,020.62
2322-000-00000-33020 $9,020.62
TOTAL $36,755.55 $36,755.55
134
Resolution No. 2017-
Page 4
Exhibit B
Budget Amendment for
Various Funds for
Equipment Replacement Obligation
2016/2017
A. Fund Allocation
Fund/Account No. Fund Description Amount
2001-000-00000-33990 Traffic Systems Management Fund $1,116.00
2004-000-00000-33990 Library Facilities Fund $5,606.00
3004-000-00000-33990 Special Projects Fund $421,829.34
3003-000-00000-33990 Equipment Replacement Fund ($428,551.34)
Total $0.00
B. Revenue Budget Allocation
Fund/Account No. Current Budget Revision Amended Budget
3003-000-00000-49010 $0.00 $428,551.34 $428,551.34
Total $0.00 $428,551.34 $428,551.34
C. Expenditure Appropriation
Budget Number Current Budget Revision Revised Budget
2001-000-00000-59010 $0.00 $1,116.00 $1,116.00
2004-000-00000-59010 $0.00 $5,606.00 $5,606.00
3004-000-00000-59010 $0.00 $421,829.34 $421,829.34
Total $0.00 $428,551.34 $428,551.34
D. lnterfund Transfer
Transfer TO
FROM 3003-000-00000-49010
2001-000-00000-59010 $1,116.00
2004-000-00000-59010 $5,606.00
3004-000-00000-59010 $421,829.34
Total $428,551.34
AApproved as to Form: ,'
P P sL �.�
135