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9 DATE: March 25, 2024
TO: Mayor and Members of the City Council
President and Members of the Estero Municipal Improvement District (EMID) Board of Directors
VIA: Stefan Chatwin, City/District Manager
Marlene Subhashini, Assistant City/District Manager
FROM: Andrew Brozyna, Public Works Director
Kurt Zander, Building and Vehicle Maintenance Manager
DEPARTMENT: Public Works
SUBJECT: BUILDING MAINTENANCE FUND BUDGET AND INTERNAL
SERVICE CHARGES FOR FY 2024-2025
RECOMMENDATION
It is recommended that the City Council review this report and its attachments and provide policy direction regarding the development of the Building Maintenance Internal Service Fund Budget for Fiscal Year 2024-2025.
EXECUTIVE SUMMARY
There are two budget impacts associated with the Building Maintenance Fund: (1) expenditures related to the Building Maintenance operation, including scheduled replacement projects (Attachments 1 and 2); and (2) funding transfers to support the Building Maintenance Operation and future replacement of building components.
If the budget is prepared as detailed in this report, the Building Maintenance Division is estimated to require the expenditure of $2,916,996 from Fund 505 (Building Maintenance Fund) in FY 2024-2025, including $1,600 for the replacement of maintenance equipment scheduled for replacement. In addition, the budget will reflect transfers totaling $3,510,769
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9 to the Building Maintenance fund from the General and Enterprise Funds to support the maintenance operation and the planned future replacement of building components.
Details of the cost and distribution of operation are contained in the attachments to this report.
BACKGROUND
The building maintenance program was created to ensure that all City facilities are safe, clean, and comfortable through management, maintenance, inspection, repair, and replacement of all the systems that comprise the City/District’s seven City facilities totaling 150,748 square feet. Established maintenance protocols allow City staff to continue to provide the highest quality service to the Foster City community.
The Division’s staff completes work requests, emergency and routine repairs in a timely manner with the support of outside contractors to assist with preventative maintenance and special projects.
Building Maintenance Division Staff duties include but are not limited to:
•Emergency Repairs – such as gas leaks or water pipe breaks. •Work Requests – such as electrical outlet failure or carpet stain removal. •Regular Repairs – such as lighting ballast replacement or restroom plumbing. •Supplies/Inventory – such as ordering and organizing regularly stocked supplies and materials.
•Preventative Maintenance – such as maintaining industry standards with respect to fire extinguisher, safety and other inspections.
•Special Projects – such as resurfacing floors, refurbishing building areas and upgrading and deploying the Lagoon Holiday Tree.
•Administration – such as complying with contract and purchasing requirements, staffing, and managing and overseeing the division operations budget and replacement funds.
In FY 2023-2024, Building Maintenance staff completed the following significant projects in addition to emergency and routine repair and preventative maintenance:
•Installed a new electric oven in the Vibe Teen Center. •Completed 5-year fire sprinkler repair work mandated by the state, with significant cost savings by self-performing rather than contracting the work. •Removed the Library’s book sensor alarm system, removed damaged entrance flooring and installed new flooring, with significant savings by self-performing rather than contracting the work.
•Installed a new dimming curtain at the Community Center. •Installed five (5) new LCD televisions and three (3) projectors in conference rooms in several City buildings.
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9 •With Public Works Engineering, managed the installation of new roofs at the Police Station, Vibe Teen Center, Parks Workshops and Vehicle Maintenance Shop. •Replaced building interior drywall and finish work following remediation of water damage at the Parks, Public Works, and Small Mechanic workshops.
The Building Maintenance Fund provides for the distribution of costs for building management and maintenance among user departments and funds. It also serves as a funding mechanism for the replacement of building components such as roofs, flooring, paint, HVAC, lighting and elevators. Setting aside replacement funding and planning for replacement over the life of the building components provides for an orderly replacement process.
ANALYSIS
The Building Maintenance Fund relies on anticipation of replacement and major renovation costs for facilities. Regular replacement or renovation of lighting, elevators, paint, flooring, HVAC and roofs are identified and the cost is spread over the life of the assets. Staff actively monitors and adjusts estimated useful life (Attachment 3) and replacement cost (Attachment 4) of each item to ensure that funding will be available as replacement is needed.
CEQA
Not Applicable
FISCAL IMPACT
There are two budget impacts associated with the Building Maintenance Fund.
Expenditures for the Building Maintenance operation are found in the Building Maintenance Division budget. The total recommended Building Maintenance Division budget is $2,916,996, which includes staffing, maintenance supplies, insurance, utilities and funding for scheduled maintenance projects to be performed during the year. (Attachment 5)
Funding for the Building Maintenance operation is reallocated from the General and Enterprise funds through transfers from divisions based upon the percentage of total City facility space used by them. After accounting for the purchase of replacement equipment for which funding has been previously set aside, the annual transfer for operations is $2,915,396.
Budget transfers are also used to accumulate funding for the future replacement of building components and equipment used to maintain the organization’s buildings. The recommended transfer for planned future replacement of building components is $595,373. The total fiscal impact of these two budget components as distributed among funds is shown in detail in Attachment 6 and summarized below in Table 2. 5 6
9 Table 2: Building Replacement Fund Annual Replacement Charge (Transfer) Summary – All Funds Fund FY 23-24 FY 24-25
Increase
(Decrease)
%
Change
General 3,247,891 3,226,265 (21,626) -0.7%
Water 139,627 142,252 2,625 1.9%
Wastewater 139,627 142,252 2,625 1.9%
Totals 3,527,145 3,510,769 (16,376) -0.5%
Building Maintenance Fund Budget Analysis
The FY 2024-2025 Building Maintenance Fund line item budget reflects a decrease for the Building Maintenance Division operation of approximately $39,000 (1.3%) compared to FY 2023-2024 (Attachment 5). The primary drivers of the decrease are:
•An overall increase of approximately $77,000 in personnel costs. •An increase of $2,000 to reflect higher costs for supplies and services. •A decrease of approximately $40,000 in Internal Service Fund transfers for Equipment Replacement, Vehicle Replacement and Information Technology, which are detailed in separate reports on those funds.
•A decrease of $78,000 for scheduled building projects compared to FY 2023-2024.
Staff routinely monitors fund balances to ensure that adequate funds are available. Based on calculations from the Finance Department, the Building Maintenance Fund is expected to end Fiscal Year 2023-2024 with an available fund balance of 9,025,173. The amount directly attributable to the replacement of equipment and to scheduled building projects through the end of FY 2023-2024 is $5,330,067, and the Council-set minimum contingency reserve is $100,000, leaving an uncommitted balance of $3,595,106. This final balance also reflects the transfer of $1,846,500 in funding that had been accumulated for the replacement of items at the Recreation to Capital Improvement Project (CIP) 301-678 Recreation Center Rebuild. This transfer is shown in the CIP budget also on the agenda for tonight’s meeting.
CITY COUNCIL VISION, MISSION, AND VALUE/PRIORITY AREA
As Building Maintenance provides for and maintains facilities for all City operations, the Building Maintenance budget addresses all of the City’s priority goals.
ATTACHMENTS
Attachment 1 - Items to be Replaced
Attachment 2 - 505 – Building Maintenance Fund Expenses 5 6
9 Attachment 3 - Changes to Estimated Useful Lives
Attachment 4 - Changes to Replacement Values
Attachment 5 - Building Maintenance Fund Comparisons
Attachment 6 - Internal Service Fund Charges
Attachment 7 - Items Added To or Deleted From the Building Maintenance List Attachment 8 - Building Maintenance Fund Narrative