Agenda Item A.1
DISCUSSION/ACTION ITEM
Meeting Date: October 30, 2023
TO: Mayor and Councilmembers
FROM: Charles W. Ebeling, Public Works Director
CONTACT: Autumn Glaeser, Capital Improvement Program Manager SUBJECT: Funding Project Connect and Hollister Old Town Interim Striping Projects RECOMMENDATION:
A. Receive a presentation on the preliminary five-year (2023/2024 - 2027/2028) Capital Improvement Program project delivery and preliminary cost estimates; B. Reject all bids for Hollister Old Town Interim Striping Project; C. Direct staff to return to City Council on December 5, 2023 to award Project Connect, and include the proposed funding strategy, and related budget adjustments and appropriations;
D. Direct staff to negotiate a construction change order to Project Connect to construct the Hollister Old Town Interim Striping Project and return to City Council on December 19, 2023 to approve a change order for the Hollister Old Town Interim Striping Project; E. Authorize the City Manager or his designee to request an amendment to the Measure A Investment Plan by the Santa Barbara County Association of Governments to transfer the $8.4 million in Measure A regional funds from the named Goleta US 101 Overcrossing project to the Goleta Transportation Circulation Improvements Project; and
F. Direct staff to come back in April 2024 to further review the CIP project delivery and options for funding these projects.
BACKGROUND:
Beginning in December 2022, the City Manager worked with Department Directors and staff to develop a draft two -year budget plan that meets existing levels of service and addresses policy direction as provided in the City’s updated 2023-2025 Strategic Plan, each department’s Annual Work Program, and City Council’s priorities from previous 1 Meeting Date: October 30, 2023
2 discussions on the general transaction and use tax measure that will go into effect January 1, 2024.
This preliminary two-year budget was first presented to the City Council on May 2, 2023, at a budget workshop. During this workshop, staff provided the Council with an overview of the budget process and approach. Updated revenue and expenditure projections were reviewed, along with updates to the General Fund’s projected fun d balance and Five - Year Forecast. Staff received feedback from Council and made adjustments accordingly.
A second budget workshop , held on May 23, 2023 , provided the City Council the opportunity to review and discuss the updated Comprehensive Capital Improvement Plan, and Capital Improvement Program (CIP) Budget for F iscal Years (FY) 2023/24 and 2024/25. During this budget workshop, staff provided the Council with an overview of the Comprehensive CIP, and the three main components. The three components inc lude a Comprehensive CIP Project List, the Five -Year CIP Project List and the CIP Budget for FY 2023/24 and 2024/25. Furthermore, the Council was briefed on the ongoing progress of key projects undertaken by the Public Works, Neighborhood Services, and Gen eral Services departments. The review also included updated project costs, new funding amounts and estimated unfunded amounts.
On June 6, 2023, a third budget workshop was held to provide the Council with an update on the Preliminary Operating and Capita l Improvement Budgets for F Y 2023/24 and 2024/25 and seek feedback on the direction given at the previous workshops. Specific budgetary issues were discussed, including Library Funding and Book Van, Creeks and Watershed Management Plan and Program and revi ew of the new general transaction and use tax measure suggested funding table.
Based on feedback provided by the Council at the workshops, along with additional analysis and information provided by staff, updates were made to refine the overall budget estimates.
On June 20, 2023 , Council adopted the FY 2023/24 and 2024/25 budget. The budget covered the Comprehensive CIP Work Program and noted projects with unfunded balances. Given the persistent volatility of the economy and the revelation of higher than anticipated CIP project costs from recent bid s, staff expect that the FY 2023/24 and 2024/25 budgets will necessitate regular reviews and adjustments in the upcoming years.
DISCUSSION
The Public Works CIP Division is responsible for constructing, maintaining, and repairing City infrastructure such as roads, bridges, drainage facilities, and traffic signals. The City of Goleta owns over 100 parcels and approximately 8 5 centerline miles of right-of-way.
Many of the City-owned properties are parks and open spaces with a total area of approximately 515 acres. Public Works manages or collaborates with other departments to maintain the 85 centerline miles of roadway traffic signals and 16 other traffic devices, 1,400 LED streetlights, 16 parks, and 14 open spaces, 14,000 city trees (approximately 8,000 street trees and 6,000 park trees), 12 creeks, 2 miles of coastline, and storm drain infrastructure including storm drainpipes, manholes, and drainage inlets . These assets 2 Meeting Date: October 30, 2023
3 are improved, maintained, and prioritized through CIP projects, non-CIP projects, and maintenance projects.
CIP projects improve and enhance public safety, achieve sustainability, enhance livability, and expand economic development. The Comprehensive CIP Project List as adopted on June 20, 2023 and is a list of current, upcoming, and potential future projects that are developed from several sources including City Council direction, departmental recommendations, and policy documents. Additional sources include City Council- approved and adopted documents such as the Development Impact Fee (DIF) Program, Bicycle and Pedestrian Master Plan, UCSB Long Range Development Plan, and projects that address regulatory compliance requirements and meet several of the City’s Goals and Policies
Public Works CIP projects are funded from various sources. The major sources of funds available for CIP projects are dedicated funds for the type of use. The use of dedicated funds is restricted by the limitations imposed by local, state or federal laws as sociated with the funding source. For the most part, funds for the CIP projects are accounted for in the City’s special revenue funds and include various DIF funds, transportation related special revenue funds, and major federal and state grants that have been awarded.
Projects that are not completely supported by dedicated revenue or are partially supported by grant revenues in need of matching funds are generally supplemented by the General Fund when funds are available. The City may also receive direct funding for projects from other agencies, jurisdictions, or individuals through grants, loans, donations and/or other subsidies.
Public Works CIP Project Delivery Budget
Based on the latest bidding data and funding limitations known, Public Works has identified 12 projects that the City is obligated to deliver over the next 5 years as shown in Table 1. The obligated projects have been identified based on grant constraints, maintenance needs, or are required by regulatory agencies. The presentation (Attachment 1) will show the full project amounts required to fund the CIPs over the next 5 years, including the funded, grant, and unfunded amounts. The funding sources range from the General Fund to Special Revenue funds such as Measure A, DIF revenues, and various grants. Since DIF revenues are estimates based on the timing of development, it is important to note that these revenues will be revised on an annual basis as more current information regarding the timing of development projects becomes available.
Given the multitude of projects and cost increases over the years, the City is faced with a growing funding gap. The funding gap in the current Five-Year CIP Budget can possibly be addressed by various financing options and strategies, including deferrin g projects, use of one-time available fund balance , or debt financing. Financing a project with debt without going to voters will require an ongoing commitment of the City’s current limited revenue sources unless a project itself is able to generate sufficient revenues over time.
Table 1 shows the CIP Project Delivery Schedule and how the listed 12 project meets City goals and policies.
3 Meeting Date: October 30, 2023
4 Table 1 CIP Project Delivery Schedule and City Goals and Policies
Hollister Old Town Interim Striping Project
The Hollister Avenue Old Town Interim Striping Project received two (2) bids that were received on August 10, 2023. The engineer’s estimate and bid are as follows:
Table 2 Bid Results
Engineer’s Estimate $1,840,943.75
Granite Construction $4,015,848.00
Toro Enterprise $4,499,221.25
The engineer’s estimate for construction costs was $1,840,943 .75. Granite was the lowest responsible bidder at $4,015,848. However, Granite’s bid amount was over 118% more than the engineer's estimate. Toro’s bid amount was 144% more than the engineer's estimate. Public Works staff typically recommend an award of a project if the bid is within the engineer's estimate of plus or minus 20%, this bid has come in approximately 5.9 times over that amount. Due to the significant variance between available budget and bid amounts, Public Works staff is recommending that Council reject all bids for the Hollister Old Town Interim Striping Project.
Upon awarding Project Connect, staff recommend s negotiating a construction change order with Security Paving for the Hollister Old Town Interim Striping Project. Staff will 23/24 24/25 25/26 26/27 27/28
Project Name Project Phase 1 2 3 4 5
Project Connect Construction x x x x x
San Jose Creek Bike Path - Northern &
Southern Segments Design x x
Traffic Signal Upgrades Conceptual
Design x x x x x
Ellwood Mesa/Sperling Preserve
Butterfly Management Plan Design x x x x
Hollister Class I Bike Path Lighting Design/
Construction
Hollister Avenue Old Town Interim
Striping Construction x x x
Storke/Hollister Transit, Bike/Ped, and
Median Imp. Design x x x
MAINTENANCE/REGULATORY
San Jose Creek Channel Fish-Passage
Modification Project Design x x x
Cathedral Oaks Crib Wall Repair Conceptual
Design x
Ellwood Beach Drive Drainage Repair Conceptual
Design x x x
Evergreen Park Drainage Repair Design x x x
Full Trash Capture Project Conceptual
Design x x
Maintenance
Regulatory
Requirements
Facilities
Traffic Circulation
Bicycle Ped Master
Plan BPMP
Creek and Watershed
Management Prog
(CWMP)
Project Delivery Schedule and City Goals and
Policies
Work Started
Fiscal Year/Work Program Year
4 Meeting Date: October 30, 2023
5 collaborate with Security Paving to have this be the first order of work. It is projected that this approach will potentially include a cost savings between $500,000 and $1,000,000.
Staff anticipates that it can bring an item back to the City Council on December 19, 2023 for approval of the change order to Project Connect for the construction of the Hollister Old Town Interim Striping Project. The work on this Change order will start December 20, 2023 with construction anticipated to start April 2024 due to material p rocurement lead times.
Project Connect
Project Connect received two (2) bids that were received on October 9, 2023. The engineer’s estimate and bid are as follows:
Table 3 Bid Results
Engineer’s Estimate $55,021,811.70
Security Paving $62,746,273.60
Granite Construction $73,788,412.00
The engineer’s estimate for construction costs was $55,021,811.70. Security Pavement was the apparent lowest responsible bidder at $62,746,273.60. The bid amount was over 14% more than the engineer's estimate (within industry standard variances). Granite’s bid amount was over 34% more than the engineer's estimate. Public Works staff will return to Council on December 5, 2023 to award Project Connect to the lowest responsible bidder, Security Paving, in the amount of $62,746,273.60 with authorization for staff to exceed by 16% as a contingency.
Proposed Funding Strategy for Project Connect and Hollister Old Town Interim Striping Projects
Public Works staff have elevated alternativ e funding options to fund the above listed projects. The following finding strategies are for councils considerations:
Defer 7 Proposed Projects from FY2023/24 Work program General Fund - Temporarily reassign Measure B Public Works Appropriations Transfer the $8.4 million in Measure A regional funds from the named Goleta US 101 Overcrossing project to the Goleta Transportation Circulation Improvements Project
General Fund – Transfer unassigned balance to above listed projects Development Impact Fee – Transfer unassigned balance to above listed projects
Table 4 Proposed Funding Strategy
Categories FY 23/24 FY24/25 FY25/26 FY26/27 FY27/28
(all numbers in thousands)
Defer Proposed Projects $2,305 $1,026 $2,856 $1,746 $1,026 General Fund – Reassign
Measure B (PW) $3,107 - - - -
5 Meeting Date: October 30, 2023
6 Measure A Named Project –
Reassigned - $8,414 - - -
General Fund – Unassigned
Balance $5,000 - - - -
DIF Fund – Unassigned
Balance - $2,200 - - -
Estimated Total $10,411 $11,640 $2,856 $1,746 $1,026
Future CIP Workshops
Public Works will return to City Council in April 2024 to discuss Committed CIP project funding and delivery strategies including the use of debt financing.
FISCAL IMPACTS:
The fiscal impact will depend on City Council action. Staff’s proposed funding strategy for Project Connect and Hollister Old Town Interim Striping Projects, will temporarily reduce budget supported by the General Fund and other special revenue funds, and the additional appropriation from the General Fund’s u nassigned fund balance of $5 million will go towards closing the funding gap. Approximately $5.5 million is estimated to be available of one -time fund balance. Should the City Council move forward with staff’s proposed funding strategy or alternatives, budget adjustments and appropriations will be as part of the staff report related to Project Connect.
Updated fund balance information will be provided in the Q1 Financial Review and may be adjusted as the City closes its books and completes their audit. In addition revenue sources are continuing to be evaluated, and staff is working on an updated 5-year forecast as part of the FY 24/25 Mid-Cycle budget update.
Reviewed By: Legal Review By: Approved By:
___________________ ___________________ _________________ Kristine Schmidt Megan Garibaldi Robert Nisbet
Assistant City Manager City Attorney City Manager
ATTACHMENTS:
1. Five-Year CIP Project Delivery Presentation
6 ATTACHMENT 1
Five-Year CIP Project Delivery Presentation
7 Five-Year CIP
Project Delivery
Monday, October 30, 2023
Special City Council Meeting
8 Objectives
Discuss funding/schedule of Obligated CIP
Projects
To be delivered over next 5 years
Funding Project Connect and Hollister Avenue
Old
Town Interim Striping Project
CIP Project Planning Cycle –
Return to City Council April 2024
October 30, 2023, Special City Council Meeting 2
9 Comprehensive CIP Project List
3 Department Total
Projects
Active
Projects
Delayed
Projects
Future
Projects
Public Works
(PW) 105+ 22 16 62+
Maintenance 15 4 N/A 10
Neighborhood
Services (NS) 21 19 3 -
General Services
(GS) 9 6 3 -
Approved list as of 6/30/23 City of Goleta Budget
October 30, 2023, Special City Council Meeting
10 Comprehensive CIP List –
By Category (5-Year)
4October 30, 2023, Special City Council Meeting
$- $50,000,000 $100,000,000 $150,000,000 $200,000,000 $250,000,000 $300,000,000 Bike/Ped
Engineering
Environmental/Drainage
Facilities
General Services
Neighborhood Services
Parks and Open Space
Traffic
Transportation
Sum of Unfunded Sum of Total Project Cost
Department
Comprehensive
CIP List
Active Projects
Public Works (PW) 22
Maintenance 4
Neighborhood
Services (NS) 19
General Services (GS) 6
11 $16,025,000
$25,612,000
$33,502,000
$21,757,000
$24,033,000
$286,410,000
$- $50,000,000 $100,000,00 0 $150,000,000 $200,000,000 $250,000,000 $300,000,000 FY23/24
FY24/25
FY25/26
FY26/27
FY27/28
FY28-FY38
Local Funds Grant Funds Unfunded
Comprehensive CIP Projects –
Funding Gap (Public Works Only)
5 Department
Comprehensive
CIP List
Active Projects
Public Works
(PW) 22
Maintenance
/Non- CIP 2
10 YEARS FOR REFERENCE
5 Year Unfunded
Estimate
$120,929,000
Notes:
1. Local funds beyond FY24/25 are preliminary estimates and are not budgeted
2. Local Funds + Grant Funds + Unfunded = Estimated Project Costs and are subject to change October 30, 2023, Special City Council Meeting
12 Committed CIP Projects –
(Estimated Public Works Project Cost Only)
6 GRANT FUNDED
Project Connect
San Jose Creek Multipurpose Path (N & S Segments)
Traf
fic Signal Upgrades
Ellwood Mesa/Sperling Preserve Open Space Monarch
Butterfly Habitat Management Plan
Hollister Avenue Class I Bike Path Lighting
Hollister Avenue Old Town Interim Striping
Storke Rd/Hollister Ave. Transit, Bike/Ped & Median Improv.
MAINTENANCE/REGULATORY
San Jose Creek Channel Fish-Passage Modification
Cathedral Oaks Crib Wall
Ellw
ood Beach Drive Drainage
Evergreen Park Drive Drainage
Full Trash Capture
Grants Funds: 52%
Local Funds: 48%
October 30, 2023, Special City Council Meeting
$45,011,000
$77,820,000
$56,131,000
Local Funds
Grant Funds
Unfunded
13 7
1. Project Connect
8. SJC Channel Fish-Passage Mod. Project
3. Traffic Signal Upgrades
4. Ellwood Mesa/Sperling Preserve Open
Space MBHMP
5. Hollister Bike Path Lighting
6. Hollister Ave. Old Town Interim Striping
7. Storke Rd. Hollister Ave. Transit, B/P, &
Median Improv.
9. Ellwood Drive Drainage
10. Evergreen Drive Drainage
11. Full Trash Capture
2. SJC Bike Multipurpose Path (N&S)
FY23/24 FY24/25 FY25/26 FY26/27 FY27/28
DESIGN
CONSTRUCTION
12. Cathedral Oaks Crib Wall
Schedule Legend
$9.3M
$16.8M $13M
$9.7M
$8.2M
UNFUNDED
GRANT FUNDS
LOCAL FUNDS
Funding Legend
Total Unfunded $56,131,000
Committed CIP Projects - Schedule
October 30, 2023, Special City Council Meeting
14 Committed PW CIP Projects –
Funding Gap
8 10 YEARS FOR REFERENCE
$9,155,000
$16,446,000
$12,635,000
$9,663,000
$8,230,000
$- $20,000,0 00 $40,000,000 $60,000,000 $80,000,000 $100,000,000 FY23/24
FY24/25
FY25/26
FY26/27
FY27/28
Local Funds Grant Funds Unfunded
5 Year Unfunded
Estimate
$56,131,000
Notes:
1. Local funds beyond FY24/25 are preliminary estimates and are not budgeted
2. Local Funds + Grant Funds + Unfunded = Estimated Project Costs and are subject to change Committed Projects Only -
Does not include the
maintenance or emergency
projects
Department Committed
Project List
Public Works
(PW) 12
October 30, 2023, Special City Council Meeting
15 Project Connect Bid Results
October 30, 2023, Special City Council Meeting 9
Engineers
Estimate
Security
Paving
Granite
$55,021,811 $62,746,273 $73,788,412
Low bid is within 14% of Engineers Estimate (within industry standards) 16 Project Connect Funding
October 30, 2023, Special City Council Meeting 10
Funding Source
Ekwill-Fowler
Extensions
Hollister Avenue
Bridge
Total Project
Connect
Total Project Cost $65,821,310 $34,807,685 $100,628,995 Local Funds $23,724,570 $4,093,030 $27,817,600
Grant Funding $21,506,990 $29,000,000 $50,506,990
Unfunded $20,589,750 $1,714,655 $22,304,405
17 Project Connect & Hollister Old Town
Interim Striping Project Funding
October 30, 2023, City Council Special Meeting 11
Funding Source Total Project
Connect
Hollister Old Town
Int. Striping
Total Project Cost $100,630,000 $5,144,315
Local Funds $27,818,000 $1,154,000
Grant Funding $50,507,000 $365,315
Unfunded $22,305,000 $3,625,000
~$27,000,000 Unfunded
18 Potential Sources for Funding
12 The following is a list of short-term solutions, available to the City Funding Options Estimated
Amount Notes
General Fund – Unassigned Fund
Balance $5,000,000 Available for one-time use.
General Fund – Contingency
Borrowing $4,233,484 Repayment plan needed within 5 years.
General Fund – Temporary
Reprogramming of Measure B TBD Further discussion below Measure A Named Project –
Rename
and reprogram $8,414,000
Value based on 2020 evaluation by
SBCAG. One-time use.
Defer Projects in Work program Various Further discussion below Other – Financing, etc.* TBD
*Any type of debt financing considered is staff’s “last resort” option and will need to be made in accordance with the City’s Debt Management Policy
October 30, 2023, Special City Council Meeting
19 General Fund – Measure B Proposed
PW Appropriations
13 Proposed Categories
Deferred
(all numbers in thousands)
FY 23/24 FY24/25 FY25/26 FY26/27 FY27/28
Increase Annual Pavement Program
(ongoing) $1,666 $3,331 $3,331 $3,331 $3,331
Increase maintenance of concrete, trees,
signals, ADA (ongoing) $381 $691 $691 $691 $691
Funding reserve for Creeks and
Watershed (ongoing) N/A $150 $150 $150 $150
Increase funding for maintenance of open
spaces, storm drains (ongoing) $530 $541 $541 $541 $541 Increase funding for Ellwood/Butterfly
management (ongoing) $200 $200 $200 $200 $200
Design Lake Los Carneros Footbridge
replacement (one-time) $330 N/A N/A N/A N/A
Estimated Total $3,107 $4,913 $4,913 $4,913 $4,913
Notes:
1. Local funds beyond FY24/25 are preliminary estimates and are not budgeted October 30, 2023, Special City Council Meeting
20 General Fund – Measure B Proposed
Other Appropriations
14 Proposed Categories
Deferred
(all numbers in thousands)
FY 23/24 FY24/25 FY25/26 FY26/27 FY27/28
Funding to implement
Economic Development plan
(ongoing)
$75 $100 $100 $100 $100
Funding for Childcare Programs
(ongoing) $50 $250 $250 $250 $250
Funding for Old Town projects
and priorities (ongoing) $150 $150 $150 $150
Estimated Total $125 $500 $500 $500 $500
Notes:
1. Local funds beyond FY24/25 are preliminary estimates and are not budgeted October 30, 2023, Special City Council Meeting
21 Goleta US 101 Overcrossing –
Measure A Named Project
15 Categories
(all numbers in thousands)
Conceptual
Design
Envir.
Phase
Final
Design
Const.
(FY27/28) Total
Measure A (named
project) $8,414 $8,414
Local Dev (AB 1600) -
Other Future* (STIP,
RSTP, etc.) $11,741 $11,741
Unfunded $1,620 $2,700 $10,260 $43,565 $58,145
Total $1,620 $2,700 $10,260 $63,720 $78,300
*Other Future available after FY27-28
$11.7 will be given to next
project in line most likely a
northern Santa Barbara
County project
October 30, 2023, Special City Council Meeting
22 Deferred Projects Proposed -
Potential Changes to Budget for Proposed CIP Projects
16 Categories
(all numbers in thousands) FY 23/24 FY24/25 FY25/26 FY26/27 FY27/28 Cathedral Oaks Crib Wall $1,100
Public Works Corp Yard $250 $714
Goleta Storm Drain Master Plan $200
City-Wide Open Space Management
and Maintenance $100
Lake Los Carneros Master Plan $250
Fairview & Stow Canyon Traffic
Signal & Intersection Improvements $532 $720
Vision Zero $234
Annual Pavement Rehabilitation $4,000 $4,000 $4,000 $4,000 $4,000 Annual Misc. Concrete & ADA
Project $755 $1,026 $1,026 $1,026 $1,026
Estimated Total $6,305 $5,026 $6,856 $5,746 $5,026
October 30, 2023, Special City Council Meeting
23 LRDP Projects to be Deferred
17 Proj No. Project Name Proj No. Project Name
9001 Complete Streets (Hollister) 9062 Hollister/Storke Intersection 9097 South Fairview Avenue Project I-08 (GTIP) Patterson/US 101 SB-Ramp I-01 (GTIP) Fairview/Calle Real Intersection I-09 (GTIP) Patterson/US 101 NB-Ramp I-02 (GTIP) Fairview/US 101 SB-Ramp 9002 Hollister/SR-217 NB-Ramp I-03 (GTIP) Fairview/US 101 NB-Ramp I-12 (GTIP) Hollister/Canon Green Intersection I-10 (GTIP) Hollister/Patterson Intersection 9072 La Patera Overcrossing 9045 Los Carneros/US 101 SB-Ramp 9027 Ellwood Station Overcrossing October 30, 2023, Special City Council Meeting
24 18
Proposed Funding Strategy
Fund Project Connect & Hollister Old Town Interim
Striping
Categories
(all numbers in thousands) FY 23/24 FY24/25 FY25/26 FY26/27 FY27/28 Defer Proposed Projects $2,305 $1,026 $2,856 $1,746 $1,026 General Fund –
Reassign Measure B
(PW)
$3,107
Measure A Named
Project - Reassigned $8,414
General Fund –
Unassigned Balance $5,000
DIF Fund – Unassigned
Balance $2,200
Estimated Total $10,41
1 $11,640 $2,856 $1,746 $1,026
October 30, 2023, Special City Council Meeting
~$27M
25 Funding Gap Summary
Project Connect & Hollister Interim Striping –
Unfunded $2
7M
Committed CIP Projects - $56M
Staff developed an interactive 5-year funding and
cash flow
worksheet to be used to develop further
funding strategies
Month Day, Year City Council/Committee Meeting Name 19
26 Unfunded Funding Scenarios
Potential Budget Changes to Fund Proposed CIP Projects
20 Interactive Model for scenario
discussions
October 30, 2023, Special City Council Meeting
27 Looking Forward
21October 30, 2023, Special City Council Meeting
28 Potential Funding Sources - Borrowing
22 The following is a list of other short-term solutions, available to the City Funding Options Estimated
Amount Notes
General Fund – Contingency Borrowing $4,233,484 Repayment plan needed within 5 years.
General Fund – CIP Reserve Funding Policy for
future Pay-Go TBD
Ongoing funding policy set aside into a CIP reserve account (e.g., 50% of excess net revenues), instead of focusing in on the unassigned fund balance.
Interfund Borrowing – Other Special Revenue Funds TBD
Ideal for 1-2 years, until special revenue fund needs their funds
Short-Term Debt – Bank Loans / Lines of Credit TBD
Most expensive due to rate environment. Benchmark rate + 200bps.
Lease Financing (COPs) TBD City will need to make capacity.
IBank Financing TBD
Dependent on revenue stream and capacity. Up to $25
million for Infrastructure Projects, utilizing the State’s credit (State recently increased up to $65 million)
Any type of debt financing considered is staff “last resort” option and will need to be made in accordance with the City’s Debt Management Policy
October 30, 2023, City Council Special Meeting
29 Potential Funding Sources – Borrowing
Costs
23 Market volatility, interest rates could be between 4% to 6% Increased fed funds rate, influences treasury rates, which influences borrowing rat
es
City would need to make ongoing revenue source available to make debt pay
ments
Recent IBank financing at $40m, 20 years, @ 4.04% and $21m, 30 yea
rs @ 4.36%
City would need to demonstrate long-term net operating revenue, debt capacity
, and debt service coverage
Estimated borrowing costs:
October 30, 2023, City Council Special Meeting
10 years 15 years 20 years 30 years 10 years 15 years 20 years 30 years
3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00%
$1,172,305 $837,666 $672,157 $510,193 $2,930,763 $2,094,165 $1,680,393 $1,275,482
3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50%
$1,202,414 $868,251 $703,611 $543,713 $3,006,034 $2,170,627 $1,759,027 $1,359,283
4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00%
$1,232,909 $899,411 $735,818 $578,301 $3,082,274 $2,248,528 $1,839,544 $1,445,752
4.50% 4.50% 4.50% 4.50% 4.50% 4.50% 4.50% 4.50%
$1,263,788 $931,138 $770,428 $613,915 $3,159,471 $2,327,845 $1,926,070 $1,534,789
5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00%
$1,295,046 $963,423 $802,426 $650,514 $3,237,614 $2,408,557 $2,006,065 $1,626,286
6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00%
$1,358,680 $1,029,628 $871,846 $726,490 $3,396,700 $2,574,069 $2,179,614 $1,816,225 $25,000,000$10,000,000
30 Other Potential Funding Sources
24 The following is a list of long-term solutions
Funding Options Estimated
Amount Notes
Create a Stormwater Utility Fee Subject to voter approval, pursuant to Proposition 218 General Obligation Bonds: Subject to voter approval, 2/3 super-majority $30.00 per $100,000 AV @ 30 years $83,500,000
$45.00 per $100,000 AV @ 30 years $125,300,000
$60.00 per $100,000 AV @30 years $167,000,000
Consider Future Revenue Enhancement
Options Dedicated to CIP TBD
Any debt financing considered will need to be made in accordance with the City’s Debt Management Policy October 30, 2023, City Council Special Meeting
31 CIP Project Planning Cycle
25 IDENTIFY
PRIORITIZE
PROGRAM
BUDGET
ADOPTION
IMPLEMENTATION
IDENTIFY project needs and scope
Ongoing
Master plans
Stakeholder input (annual public workshops)
PRIORITIZE project needs and develop Long Range CIP
Strategic P
lan
PROGRAM projects
Staff programs based on funding, project development
phase, project
needs, etc.
CIP projects are incorporated into the 5-year CIP and BUDGET
Available funding is distributed to projects programmed City Council ADOPTS budget
2-year budget
Mid-Cycle budget review
CIP projects move towards design and IMPLEMENTATION
October 30, 2023, Special City Council Meeting
32 Project Prioritization Proposed GoalsStaff/Public Safety • Creates a safer
work environment
for employees
• Provides the
equipment and
readiness to step
into action during
times of
emergency
• Creates a safer
and healthier
community for
everyone in the
City of Goleta
•Prioritization
Ranking W
eight: 5
Equity
• Creates an
opportunity for all
to participate
•Prioritization
Ranking W
eight: 4
Maintenance
• Maintains the City
of Goleta’s
existing
infrastructure
•Prioritization
Ranking W
eight: 3
Regulatory Constraints
• Addresses and
meets the City’s,
State, and
Federal codes
and regulations
•Prioritization
Ranking W
eight: 4
Grant Funded
• Grant funds have
been secured
• Constraints such
as timely use of
funds
•Prioritization
Ranking W
eight: 4
Stakeholder Input
• Driven by
communities
and/or involves
stakeholders or
other agencies
•Prioritization
Ranking W
eight: 3
26October 30, 2023, Special City Council Meeting
33 Project Connect Summary
• Project Connect Award - $62,746,273
• If Council does not take this action:
• City likely to pay back up to $9,9M to State and Federal grant agencies • City to give up $50.5M+ in State and Federal grant funding • Defer removal of 100-year flood plain in eastern Old Town Goleta • Impacts disadvantaged communities and potential redevelopment • Potential impacts or damage of the 25-year storm
• Determine legal and funding issues regarding property acquisitions • Risk not receiving any future grants from many agencies 27October 30, 2023, Special City Council Meeting
34 Council Actions
Receive a presentation on the preliminary five-year (2023/2024 - 2027/2028) Capital Improvement
Program project delivery and preliminary cost estimates; Reject all bids for Hollister Old Town Interim Striping Project; Direct staff to return to City Council on December 5, 2023 to award Project Connect, and include
the proposed funding strategy, and related budget adjustments and appropriations; Direct staff to negotiate a construction change order to Project Connect to construct the Hollister
Old Town Interim Striping Project and return to City Council on December 19, 2023 to approve a change order for the Hollister Old Town Interim Striping Project; Authorize the City Manager or his designee to request an amendment to the Measure A Investment
Plan by the Santa Barbara County Association of Governments to transfer the $8.4 million in Measure A regional funds from the named Goleta US 101 Overcrossing project to the Goleta Transportation Circulation Improvements Project; and Direct staff to come back in April 2024 to further review the CIP project delivery and options for funding these projects.
28October 30, 2023, Special City Council Meeting
35 Questions/Comments
29October 30, 2023, Special City Council Meeting
36