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Staff Report
City Council
Item No. 3.3
Meeting Date: November 8, 2023
From: Kevin Biersack, Financial Services Director
Title: Update to Emergency Funding for Debris Removal (Cleanup) and Emergency Protective Measures for Tropical Storm Hilary
City Council
RECOMMENDATION:
To update the task orders/purchase orders/contracts for the Phase I Emergency Response Work for Debris Removal (Cleanup) and Emergency Protective Measures for the August 20, 2023 Tropical Storm Hilary impacts; and, identify budget FY 2023/2024 budget impacts (deferments) and budget adjustments.
BACKGROUND:
The August 20, 2023, Tropical Storm Hilary struck Southern California, the Coachella Valley, and more specifically Cathedral City, resulting in flooded roads, neighborhoods and mud flows in various areas of Cathedral City. Runoff flood waters brought large amounts of and sediment and left areas of the City flooded, covered in several feet of mud and debris, and roads without access.
Significant damage from mud flows occurred within approximately 40 acres at the northeast area of Panorama neighborhood. This mud flow resulted in the required road closures of:
• Date Palm Drive from I-10 to 30th Avenue
• Vista Chino from Date Palm to Avenida Maravilla
• Horizon Road from Vista Chino to Panorama Road
• Adelina Road from Date Palm Drive to Horizon Road
• Avenida La Vista from Adelina Road to Los Gatos Road
• Panorama Road from Horizon Road to Avenida La Vista
• Tachevah Drive from Date Palm Drive to Avenida La Vista
The storm response was greater than what could be handled by City staff and required the request of mutual aid for emergency response and contracting out for debris cleanup. The City declared a local state of emergency on August 21, 2023, which was ratified by the City Council on August 23, 2023 and again on October 11, 2023. In order
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to expedite emergency and working access to the above cited streets, the City, under emergency operation protocols, hired contractors for the initial removal of mud and debris to open the streets for emergency personnel, residential and limited public access.
Due to the volume of rain that occurred during the storm, flooding also occurred in other areas of the City requiring road closures. Specifically, these arterial roads closed to traffic included:
• Dinah Shore Drive from western City limits to Da Vall Drive, and • Varner Road from Palm Drive to Rio Del Sol/Bob Hope Drive.
Underneath the Date Palm Drive and the Ofelia Bringas Memorial Bridges was a significant deposit of three (3) to six (6) feet of earth along the bottom of the Whitewater River Channel filling the actual drops of the drop -structures under each of the bridges.
Long term, this sediment deposit will need to be removed to restore the channel to pre - storm capacities. This restoration work is being discussed with Caltrans and Coachella Valley Water District and the financial impact is not yet determined.
The emergency work to restore access and traffic through Panorama Neighborhood began on August 21, 2023. During this disaster, various contractors were hired to assist the City. Residents disposed of mud, debris and trash from their properties and placed it in the right of way The emergency work included removing mud, debris, and trash from those streets and rights of way, while also ensuring emergency protective measures occurred to provide safe neighborhoods and traffic control. Some of these emergency tasks are still on-going.
Efforts to restore the neighborhoods from storm damages include heavy equipment contracting and rentals (loaders) to move the mud off the streets, roll -off dumpsters for local debris, portable restrooms for residents and volunteers, water trucks and street sweepers.
For both debris cleanup and emergency response, significant labor was incurred by City staff totaling $262,087 comprised of $205,379 in regular pay and $56,708 in overtime pay.
As of October 20, 2023, the City has incurred $1,027,331.39 in 3 rd party costs of the previously City Council authorized $1,062,000. The primary vendors assisting the City on these emergency response efforts and tasks are listed below:
• Jacobsson Engineering Construction – Storm mud clean-up work • Demo Unlimited Inc. – Storm mud clean-up work
• Tops and Barricades – Traffic control set up and removals • PS Tree Maintenance – Clean-up sidewalks, medians, and pathways • Signature Sculptures – Bulky items collection and removal • NAI Consulting Inc. – FHWA/FEMA Recovery Assistance
• ASAP Pumping – Clean-up
• Sunbelt Rentals – Equipment Rental
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• United Rental – Equipment Rental
• Valley Smog – Vehicle Repairs
• Burrtec – Storm mud clean-up work, but we do not have any billings yet from the vendor
• Miscellaneous – Food/Water, Legal, Printing, Repairs, Supplies, Repairs, etc
City Staff has met with the following agencies to discuss the procedures required to access and recover funds spent to mitigate the storm’s damages:
• Riverside County Emergency Management Department (EMD) • California Office of Emergency Services (CalOES)
• Federal Emergency Management Agency (FEMA)
• California Department of Transportation (CalTrans)
Additional debris removal costs includes $4,563,162 for the contract approved at the September 27, 2023 City Council meeting for Stice Company to remove the approximately 150,000 to 172,500 cubic yards of mud cleared from Vista Chino Road and Date Palm Drive and the surrounding neighborhood(s).
DISCUSSION:
Due to the significant costs of the unplanned expenditures resulting from the cleanup and debris removal efforts following Tropical Storm Hilary, it is necessary to relook at the adopted FY 2023/24 and FY 2024/25 budgets to identify budgeted items that could be cut or delayed or would require additional use of fund balance to cover. Staff have also identified some additional new expenses that were not budgeted and now require review during this discussion of budget amendments.
A. Proposed Deferral or Cuts to FY 2023/24 General Fund budgeted items
Staff have identified several initiatives that could be cut or delayed to mitigate the extraordinary expenses incurred due to the storm response and recovery efforts. The proposed CalPERS and OPEB payments would be one -time cuts for FY 2023/24. The Capital and Park Improvement projects are proposed to be delayed or continued but utilizing other restricted funding sources instead of the General. Total cuts and deferrals amount to $6,492,090.
.
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Description Amount
CalPERS $2,240,097
Other Post Employment Benefits (OPEB) $2,240,097
Capital Improvement Project (CIP) Plan Maintenance of Effort (MOE) Deferrals or Alternate Funding Sources
o Varner Rd Design: Palm Drive to Date Palm Drive $375,000 o East Palm Canyon REAS $350,000
o Cathedral Canyon Bike Lane & Sidewalk – match to be funded with Riverside County Transportation Committee (RCTC) Transportation Development Act (TDA) (Fund 240) $270,400
o Cathedral Canyon Channel East Multimodal Path $220,000 o Date Palm Drive Expansion Project – match to be funded with RCTC Measure A, instead of the General Fund (originally in the CIP Plan) $179,496 o Cypress Rd/Santoro Dr Drain Improvements $80,000
o Panorama Neighborhood: AD 85-1, N/O Baristo, S/O Vega, E/O Landau, W/O Avenida Los Ninos $60,000
Note - $282,000+ from the Assessment District to be used for Horizon Rd and other affected streets
o Date Palm Drive from Vista Chino Dr to Tachevah Dr (Engineering Professional Services reprogrammed) $57,000
o New Assessment District Phase 2a, Conceptual Plans $40,000 Subtotal $1,631,896
Parks Improvement Project (PIP) Plan, comprised of:
o Century Park
§ Restroom Security Doors $40,000
§ Parking Lot Lighting $50,000
o Ocotillo Park Outfield Fence $40,000
o Panorama Park Restroom Security Doors $50,000
o Town Square Splash Pad $200,000
Subtotal $380,000
Grand Total $6,492,090
B. Budget Increases for FY 2023/24
The following items are requests for budget adjustments due to increased costs. Staff received the bid proposal for Dream Homes Park and the amount requested below reflects the total additional funds needed to fully fund the park construction along with a contingency. In addition, insurance premiums paid this fiscal year require additional budget authorization. Staff proposes using fund balance to cover these expenses.
Proposed increased budget authorizations totaling $3,313,851 are requested below:
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Description Amount
Dream Homes Park – to be encumbered in
FY 2023/24 but not spent until 2024/25
$2,481,211
Insurance Premium Increases $832,640
Total General Fund Expenditures $3,313,851
Insurance Premium – Other Funds
Crime, Cyber, Deadly Weapon, Liability,
Health
$42,455
Note – For insurance costs, staff expense from the Insurance Fund (612), requires a separate budget adjustment for the $875,095 (which is the total cost of General Fund and Other Funds Insurance Premium increases).
C. Tropical Storm Hilary Overtime Costs
The City incurred $56,708 in overtime costs across departments to respond to the storm. The impacted departments, primarly Police, Fire, and Public Works are being asked to absorb the overtime into their current budgets.
D. Future Roadway Repairs
The damage caused by Tropical Storm Hilary and resulting from roadway cleanup efforts are significant. Below are current estimates, which include the potential for full depth removal of the existing asphalt and base, disposal of the existing damaged section and reconstruction of the standard street section s. The total financial impact for the primary roadways listed below is currently estimated at $16,868,683. Staff are seeking Federal Highway Administration (FHWA), CalTrans and sources to identify other funding opportunities for these roadways. Staff currently estimates there could be a City financial impact (matching funds) required up to $6,000,000 for the repairs of these roadways:
• Varner Road between Palm Drive and Date Palm Drive
• Date Palm Drive between Vista Chino and 30th
• Vista Chino between Date Palm Drive and Panorama Road • Panorama Road between Date Palm Drive and Horizon Road • Horizon Road between Vista Chino and Panorama Road (funding has been identified from Assessment District funds)
• Los Gatos Road between Date Palm and Avenida La Vista • Avenida La Vista between Los Gatos Road and Adelina Road • Adelina Road between Date Palm Drive and Horizon Road (funding has been identified from Assessment District funds)
• Various alleys within these project limits
E. Staff have identified five (5) road improvement projects, some requiring a City match, totaling $1,568,000 that will not be using the General Fund as a funding source. These projects are:
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• Cathedral Canyon Bike Lane and Sidewalk was originally identified in the CIP Plan for the City match to be made using the General Fund. With the subsequent notification from RCTC that TDA funds (240) will be distributed, the $270,400 match will no longer use the General Fund as a source.
• Highway Safety Improvement Program (HSIP) 10 for Pedestrian Crossing at Ramon Rd and Avenida La Paloma - Additional Costs total $638,300, comprised of CalTrans participation of $383,300 with City participation of $250,000. Staff recommends using Measure A (Fund 243) for the City match and defer:
o Papaya – Sunny Lane REAS
o Los Gatos Drainage Improvement – included w ith Date Palm Drive project and seeking grant and emergency relief funding
• HSIP 11 CalTrans grant totaling $3,524,400 requires a City match totaling $391,000 using Traffic Safety (Fund 233), Improvements include:
o Pedestrian Crosswalk upgrades @ 18 intersections,
o Pedestrian signals @ two (2) intersections,
o Signal hardware @ 49 intersections, and
o Improvements at the 30th Avenue and San Eljay intersection
• Horizon and Adelina Roads are in Assessment District 8803, Panorama neighborhood. There is currently $282,000 available in District funds, which will be used for road improvements. Any unspent funds will be utilized to address other impacted streets.
• Varner Road design for the 3.7 -mile length from Palm Drive to Date Palm Drive will use remnant Redevelopment Agency (RDA) funding instead of the General Fund. Th e original General Fund estimates were planned at $375,000 for each FY 2023/2024 and FY2024/2025. The current estimate is to utilize $59 2,231.57 during the same two -year period – a net savings of $157K+.
FISCAL IMPACT
In summary,
• Debris Removal and Emergency Preparedness previously authorized total $5,625,162.
• The General Fund (100) savings from the deferred budgeted line items total $6,492,090.
• The total operational budget adjustments reflect a total of $4,231,401 comprised of:
o $3,313,851 General Fund (100) for Dream Homes Park and Insurance increases,
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o $ 875,095 Insurance Fund (612) for Insurance increases o $ 42,455 Other Funds (241, 243, and 246) for Insurance increases
• Future roadway repairs could have a General Fund (100) impact up to $6,000,000, currently planned over is fiscal year (2023/2024) and next fiscal year (2024/2025).
With the items identified above, the potential impact to the General Fund (100) is currently estimated at $8,446,923.
PROJECTS RECOMMENDED TO BE DEFERRED
The following projects were identified in the Strategic Plan but did not yet have budget appropriated for the projects. Staff recommends these items be deferred and reassessed in the future.
• Facilities Master Plan, Facilities Condition Assessment – Year 1 • Equipment Replacement Fund allocation
• Annual allocation to Facilities Fund (614)
• Compensation and Classification Study
• Facilities Master Plan (Phase II - policies, procedures, etc) • Entryway Monument Study
• IT Master Plan recommendations
Additionally, all department staff will be looking at their current staffing and contract labor to identify opportunities for cost -savings and efficiencies. Current position vacancies or positions budgeted for FY 2024/25 will be evaluated for funding or deferred hiring.
FUND BALANCE PROJECTIONS
For the fiscal year ending (FY 2022/2023) being finalized and for the years adopted in the City’s current Biennial Budget (FY 2023/2024 and FY 2024/2025), General Fund financial data is provided below with the associated projected Fund Balance “Savings Account” reserves for each year:
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FY 2022/2023
Results
FY 2023/2024
Original Budget
FY 2023/2024
Projection
FY 2024/2025
Projection
Beginning GF Balance $35,728,660 $39,276,888 $39,276,888 $36,604,836 Revenues 62,240,315 62,007,499 62,053,539 63,646,766
Expenditures 67,915,349 69,679,551 73,594,749 71,648,019 Operating Surplus / (Deficit) -5,675,034 -7,672,052 -11,541,210 -8,001,253 GF Balance (Available Cash) $30,053,626 $31,604,836 $27,735,678 $28,603,583 ARPA Revenue comprised of: 8,223,262 5,000,000 5,000,000 1,000,000 Rehiring Public Sector Staff 1,385,415 1,000,000 1,000,000 1,000,000 Supplemental Pay 836,963
Revenue Recovery 6,000,884 4,000,000 4,000,000
Surplus / (Deficit) $2,548,228 -$2,672,052 -$6,541,210 -$7,001,253 Ending GF Balance (Avail Cash) $39,276,888 $36,604,836 $32,735,678 $29,603,583 33% Fund Balance Reserve
Policy 22,638,450 23,226,517 24,531,583 23,882,673
50% Target Fund Balance
Policy 33,957,675 34,839,776 36,797,375 35,824,010
Actual % Fund Balance Reserve 58% 53% 44% 41%