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Home My WebLink AboutAGENDA REPORT 1996 0702 CC SPC ITEM 07G5; ♦ • CITY OF MOORPARK -�A,LJFORNIA CITY COUNCIL AGENDA REPORT TO: The Honorable City Council F. ,... FROM: Donald P. Reynolds Jr., Administrative Services Manager DATE: June 26, 1996 SUBJECT: Consider Transfers From Various Funds to the Equipment Replacement Fund Discussion Attached is a summary of the Equipment Replacement Fund, and history of transactions from the past four years. Gas Tax (Fund 3) contributed $90,000 in FY 1994/95, and the General Fund has contributed $138,408 since 1993/94, for a total contribution thus far of $228,408. With the adoption of the 1996/97 Budget, the City Council approved a transfer from the General Fund to the Equipment Replacement Fund ( "31 ") of $245,791 which completes the funding needed for the General Fund through June 30, 1996. Consolidated into the General Fund obligation are capital items bought by funding from Assessment District 84 -1 and 85 -2. Six other funds comprise the balance of obligations to equipment replacement, and this report requests that these transfers be completed. 1995/96 Status Activity in the last fiscal year include adding new equipment to the schedule, removing equipment, interest earnings and expenses from the fund. Also prepared at the end of each fiscal year is a "fully depreciated" listing, which is used to forecast future needs for replacing City equipment. The attachment summarizes this year's activity as noted below. Last year, the City relied upon the Equipment Replacement Fund for $11,832 in expenses. These funds were used by the General Fund for part of the computer upgrade project, and are recorded on line 13 of the attachment. Including the month of June 1995, equipment valued at $231,079 was added to the listing. New equipment bought during this time includes computers, radios and the City Bus. Using a depreciation schedule date of June 1995, these purchases will not appear on the schedule until June 1997, and after one year, will have the following impact: This year, the City removed $138,782 of equipment from the listing as "surplus ", reducing the obligation to some of the funds. These items include the old personal computers, radios, and radar equipment. Not all of the equipment removed was fully depreciated, so the net reduction to the obligation is $137,962, summarized as follows: Interest earnings of $9,800 were credited to Fund 31 this year, reducing the obligation to each fund proportionately, as shown on line 15 of the attachment. With additional funds being transferred this fiscal year, the interest amount will increase as long as the actual earnings remain stable. Knowing that next year the City will have an additional obligation of new equipment equal to $19,626, plus another year added to the currently listed items, it is important to realize that some of these increases will be off -set by interest, and equipment being removed from the list. As the year progresses, this final obligation for next fiscal year will be identified. It should also be recognized that the City is carrying 33 items on the schedule which are fully depreciated, and not scheduled for replacement this year, with a value of $100,289. Some items, like typewriters and freezers, may last another ten years. But of the 33 items, there are four vehicles valued at $42,969, and 13 computer printers valued at $23,164 that will most likely require replacement in the next 18 months. Transfer Requests The attached summary identifies at the bottom of the page that $353,948 is needed to meet the current obligation in Fund 31, and of this, the General Fund has met $245,791. The General Fund contribution reported to the Council May 29, 1996, is slightly high according to recent changes in the fund. A 1990 police vehicle was removed reducing the obligation by $10,194 to Fund 02, which resulted in a change to the percentages used to allocate interest. The General Fund portion of the interest increased from 67% to 69 %, reducing its obligation from $245,791 to $245,579, or by $212. Staff recommends that this adjustment be made next fiscal year. Including past year's contributions as stated in lines 5, 6 and 7 in Attachment "A °, the General Fund has contributed $384,199 since 1993194, ($245,791 + $138,408). 2 K I ) Cf Subtracting the revised General Fund Obligation of $245,579 from the total obligation to Fund 31, leaves a balance needed of $108,369, distributed as follows: Fund June, 30, 1996 balance Transfer Inc /Dec Adjusted Balance 02 30,416.00 (4,383.00) 26,033.00 03 1,177,983.00 (14,619.00) 1,163,364.00 12 0.00 (4,015.00) (4,015.00) 41 39,973.00 (68,220.00) (28,247.00) 71 9,117,000.00 (17,132.00) 9,099,868.00 Total (108,369.00) The table shows that not all of the funds have a sufficient balance remaining to meet the obligation this year. Therefore, adjustments have to be made. The Traffic Safety Fund 02 revenue has decreased sharply since the State reduced the revenue from vehicle fines in 1992. The balance available is based primarily on funds received prior to 1992. When the revenue source was sufficient, between 1984 and 1992, the City used these monies to off -set a portion of equipment related to street maintenance and for large equipment purchases at City Hall. Now, due to decreased revenue to this fund, staff is proposing that this fund only be used for equipment replacement related to crossing guard expenses, which relate to the radio equipment bought in June, 1995. To accomplish this, the $4,383 obligation to Equipment Replacement is proposed to be shifted to the Gas Tax Fund 3. This increases the Gas Tax obligation from $14,619 to $19,002. The amount required for Fund 12 is related to the new City bus. The estimated fund balance for next June is $9,649, and a portion of this could be reserved to initiate a partial pavement schedule. No transfer is recommended. This is the first year in several years that an anticipated balance is available from Fund 41. Staff recommends that Fund 41 establish a four year payment plan, beginning with 25 percent this fiscal year, ($17,055), leaving a Fund 41 balance available of $22,923 to be used as an undesignated reserve for the rest of the fiscal year. N i A �'. The following table summarizes the anticipated status of the Equipment Replacement fund based upon these proposed transfers: FUND 6/96 OBLIGATIONS PROPOSED /ACTUAL TRANSFER BALANCE 01 245,579.00 245,791.00 (212.00) 02 0.00 0.00 0.00 03 19,002.00 19,002.00 0.00 12 4,015.00 0.00 4,015.00 41 68,220.00 17,055.00 51,165.00 71 17,132.00 17,132.00 0.00 TOTAL 353,948.00 1 298,980.00 54,968.00 The total amount required to meet the Fund 31 obligation since 1993/94, is $582,356. The total amount transferred to this fund since 1993/94, including staffs recommendation summarized above, is $527,388, ($228,408 shown on line 9 of the attachment + $298,980), leaving an obligation of $54,968. With the transfers proposed in place, each fund except Fund 12 can contribute to equipment replacements. Several funds have shared the original cost of the City's large equipment purchases (copiers, phones, office equipment), and they could collectively now be used to replace some of these items. Recommendation That the City Council authorize the transfer of funds as follows: 1) Consolidate the Fund 02 obligation with Fund 3, for a total obligation of 19,002, and reduce the estimated fund balance in the Gas Tax, (Fund 03) of $1,177,983 by transferring $19,002, to Fund 31, for a revised Fund 3 Balance of $1,158,981; 2) Reduce the estimated fund balance in Community Development, (Fund 41) of $39,973, by transferring 25 percent of the total obligation, or $17,055, to Fund 31, for a revised Fund 41 balance of $22,918; and 3) Reduce the estimated fund balance in Redevelopment (Fund 71) of $9,117,000 by transferring $17,132 to Fund 31, for a revised fund balance of $9,099,868. Attachment- Fund 31 Summary/History 4 s EQUIPMENT REPLACEMENT SUMMARY TOTAL VALUE OF CITY EQUIPMENT = $1,250,544 TOTAL EQUIPMENT REPLACEMENT OBLIGATION = $532,907 YEAR USED FOR JUNE 30, 1996 DEPRECIATION SCHEDULE = 95.5 TOTAL OF EQUIPMENT SURPLUSSED IN FY 1995/96 = $138,782 TOTAL 06/26/96 revisions REPLACEMENT 27 -Jun -96 01 41 03 02" 12 70 20 23 25 OBLIGATION 1 PRIOR YEARS OBLIGATIONS, ENDING JUNE 30, 1995 232649 79312 73960 17148 0 ---------------------------- 12968 0 0 0 416037 2 1994195 ADDITIONAL DEPRECIATION 109858 -9203 31064 -12644 4126 4638 0 0 0 127839 ....................................................................................... 3 TOTAL OBLIGATIONS, JUNE 30, 1995 ............................... 342507 70109 105024 _................................ 4504 4126 17606 ............................... 0 . 0 0 543876 ----------------------------------- 4 CONTRIBUTIONS MADE 5 1993/94 CONTRIBTIONS 106393 6 1994/95 CONTRIBUTIONS 25050 90000 7 1995/96 CONTRIBUTIONS 0 0 0 8 REVENUE (RESALE OF THE POLICE MOTORCYCLE) 6965 ...................................... .. ................................................................................................................. 9 CONTRIBUTIONS /REVENUE SUB - TOTAL 138408 0 90000 0 0 0 ............................... 0 . 0 0 228408 10 OBLIGATIONS LESS CONTRIBUTIONS ---------------------------------- - - - - I 204099 70109 15024 -- - - 4504 4126 17606 0 0 0 0 315468 11 1993/94 EXPENSES/TRANSFER OUT 13079 12 1994/95 EXPENSES 23369 13 1995/96 EXPENSES 11832 - 14 PROJECTED YEAR END REMAINING OBLIGATIONS ��', 252379 70109 15024 ------------------------------------- 4504 4126 17606 0 363748 15 PRECENTAGE DISTRIBUTION 69% 19% 4% 1% 1% 5% 0% 1 16 Interest Credited to Fund 31 per percentages FY 1995/96 ESTIMATED TO BE $9,800) 6800 1889 405 121 111 474 0 0 0 0 9800 ------------------------------------- - - - - -- ------------- - - - - -- -- - - - - -- TOTALS 17 Obligation less Interest Credit ��I, 245579 68220 14619 4383 4015 17132 0 353948 " Proposed to be Paid By Gas Tax Fund 3 Ili ter c