CITY COUNCIL
AND AS SUCCESSOR AGENCY TO THE
COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS
CITY OF PALM SPRINGS, CALIFORNIA
SPECIAL STUDY SESSION AGENDA
WEDNESDAY, MAY 4, 2022
3:00 P.M. CLOSED SESSION
5:30 P.M. STUDY SESSION
Council Chamber, City Hall
3200 E. Tahquitz Canyon Way
Palm Springs, CA 92262
Lisa Middleton, Mayor
Grace Elena Garner, Mayor Pro Tem
Christy Gilbert Holstege, Councilmember
Geoff Kors, Councilmember
Dennis Woods, Councilmember
Pursuant to Assembly Bill 361, this meeting may also be conducted by teleconference.
Any person who wishes to provide public testimony for an item on the agenda is requested to file a speaker card before the Public Testimony portion of the meeting.
You may submit your public comment to the City Council electronically. Material may be emailed to [email protected]. Transmittal prior to the start of the meeting is required. Any correspondence received during or after the meeting will be distributed to the City Council and retained for the official record as soon as practicable.
You may provide telephonic comments by calling the City Clerk's Office at (760) 323-8204. You may be added to the queue at any time prior to the end of the public comment period for the subject hearing. At the appropriate time, a staff member will call you so that you may provide your public testimony to the City Council.
View the City Council meeting live at the City’s website www.palmspringsca.gov/pstv, YouTube, or Channel 17 (Spectrum).
AGENDA EN ESPAÑOL DISPONIBLE EL LUNES - HAGA CLIC AQUÍ
3:00 P.M. SPECIAL CLOSED SESSION
CALL TO ORDER:
PUBLIC COMMENT FOR CLOSED SESSION ITEMS ONLY (Council Chamber): The City Council welcomes public input. Members of the public may address the City Council by completing a public comment card and giving it to the City Clerk prior to the meeting. Pursuant to State Law, the City Council may not discuss or take action on issues not on the meeting agenda (Government Code Section 54954.2). If you are compensated to communicate with City officials, you may be required to register and/or make certain disclosures as a lobbyist, please see the City Clerk for additional information.
RECESS TO SPECIAL CLOSED SESSION: See Closed Session Agenda
5:30 P.M. SPECIAL STUDY SESSION
CALL TO ORDER:
PLEDGE OF ALLEGIANCE:
ROLL CALL:
REPORT OF CLOSED SESSION:
PUBLIC COMMENT FOR AGENDA ITEMS ONLY: This time has been set aside for members of the public to address the City Council only on agenda items. Two (2) minutes will be assigned to each speaker. Pursuant to State Law, the City Council may not discuss or take action on issues not on the meeting agenda (Government Code Section 54954.2).
1. DISCUSSION OF THE FIVE-YEAR CAPITAL IMPROVEMENT PROGRAM FOR FISCAL YEARS 2023 – 2027, REVIEW OF AIRPORT FUND ENDING FISCAL YEAR 2021-22 AND PRELIMINARY OVERVIEW OF THE FISCAL YEAR 2022-23 AIRPORT BUDGET RECOMMENDATION:
1. Discuss the proposed Five-Year Capital Improvement Program.
2. Prioritize existing vs proposed projects for the Five-Year Capital Improvement Program.
3. Provide direction to Staff on any changes to the proposed Five-Year Capital Improvement Program FY 23-27.
4. Provide direction to Staff on any changes to the Preliminary FY 2022-23 Airport Fund Budget.
ADJOURNMENT
May 4, 2022 City Council Special Study Session Agenda 2
AFFIDAVIT OF POSTING
State of California )
County of Riverside ) ss.
City of Palm Springs )
I, Monique M. Lomeli, Interim City Clerk of the City of Palm Springs, California, hereby certify this Agenda was delivered to each member of the City Council, provided to all parties who have requested such notice, posted at City Hall before 7:00 p.m., on April 29, 2022, and posted on the City’s website as required by established policies and procedures.
_____________________________
Monique M. Lomeli, CMC
Interim City Clerk
P U B L I C N O T I C E S
Pursuant to G.C. Section 54957.5(b)(2) the designated office for inspection of records in connection with the meeting is the Office of the City Clerk, City Hall, 3200 E. Tahquitz Canyon Way. Complete Agenda Packets are available for public inspection at: City Hall Office of the City Clerk. Agenda and staff reports are available on the City’s website www.palmspringsca.gov. If you would like additional information on any item appearing on this agenda, please contact the Office of the City Clerk at (760) 323-8204.
It is the intention of the City of Palm Springs to comply with the Americans with Disabilities Act (ADA) in all respects. If, as an attendee or a participant at this meeting, or in meetings on a regular basis, you will need special assistance beyond what is normally provided, the City will attempt to accommodate you in every reasonable manner. Please contact the Office of the City Clerk, (760) 323-8204, at least 48 hours prior to the meeting to inform us of your particular needs and to determine if accommodation is feasible.
May 4, 2022 City Council Special Study Session Agenda 3
CITY COUNCIL STAFF REPORT
05/04/2022
City Clerk -
SUBJECT
RECESS TO SPECIAL CLOSED SESSION: See Closed Session Agenda Attachments
Closed Session Agenda
CITY COUNCIL
AND AS SUCCESSOR AGENCY TO THE
COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF THE PALM SPRINGS
SPECIAL CLOSED SESSION AGENDA
Wednesday, May 4, 2022 – 3:00 p.m.
Pursuant to Assembly Bill 361, this meeting may be conducted by teleconference and there may be no in-person public access to the meeting location.
PUBLIC COMMENT PERIOD FOR CLOSED SESSION ITEMS ONLY
(Time limit is two minutes per person) The City Council welcomes public input. Pursuant to State law, the City Council may not discuss or take action on issues not on the meeting agenda (Government Code Section 54954.2).
CONFERENCE WITH LEGAL COUNSEL The City Council finds, based on advice from the City Attorney, that discussion in open session of the following described matter(s) will prejudice the position of the City in existing and anticipated litigation.
MATTERS CREATING SIGNIFICANT EXPOSURE TO LITIGATION G C. § 54956.9(d)(2)
One (1) matter that, in the opinion of the City Council on the advice of the City Attorney, based on existing facts and circumstances, there is significant exposure to litigation against the City.
DISCUSSION TO CONSIDER INITIATION OF LITIGATION Gov’t Code § 54956.9(d)(4)
Under existing facts and circumstances, there is one (1) matter the City Council has decided or may decide to initiate litigation.
PUBLIC EMPLOYEE PERFORMANCE EVALUATION Gov’t Code 54957
Employee: City Manager
Employee: City Attorney
CITY COUNCIL STAFF REPORT
05/04/2022 1.
City Clerk -
SUBJECT
DISCUSSION OF THE FIVE-YEAR CAPITAL IMPROVEMENT PROGRAM FOR FISCAL YEARS 2023 – 2027, REVIEW OF AIRPORT FUND ENDING FISCAL YEAR 2021-22 AND PRELIMINARY OVERVIEW OF THE FISCAL YEAR 2022-23 AIRPORT BUDGET RECOMMENDATION:
1. Discuss the proposed Five-Year Capital Improvement Program.
2. Prioritize existing vs proposed projects for the Five-Year Capital Improvement Program.
3. Provide direction to Staff on any changes to the proposed Five-Year Capital Improvement Program FY 23-27.
4. Provide direction to Staff on any changes to the Preliminary FY 2022-23 Airport Fund Budget.
Attachments
Study Session Item 1
CITY COUNCIL STAFF REPORT
DATE: May 4, 2022 STUDY SESSION
SUBJECT: DISCUSSION OF THE FIVE-YEAR CAPITAL IMPROVEMENT PROGRAM FOR FISCAL YEARS 2023 – 2027, REVIEW OF AIRPORT FUND ENDING FISCAL YEAR 2021-22 AND PRELIMINARY OVERVIEW OF THE FISCAL YEAR 2022-23 AIRPORT BUDGET
FROM: Justin Clifton, City Manager
BY: Engineering Division
Department of Aviation
Department of Finance & Treasury
SUMMARY:
A Five-Year Capital Improvement Program (CIP) has been prepared for the City of Palm Springs. This CIP is a budgeting and strategic planning tool used to prioritize the construction of public infrastructure and facilities for the next five years, as well as identify sources of funding. Each project within the CIP is reviewed for alignment with the City Council’s Strategic Plan.
Also prepared is the estimated ending Airport Fund revenues and expenditures for Fiscal Year 2021-22 and a preliminary overview of the Fiscal Year 2022-23 Airport Fund Budget.
RECOMMENDATION:
1. Discuss the proposed Five-Year Capital Improvement Program.
2. Prioritize existing vs proposed projects for the Five- Year Capital Improvement Program.
3. Provide direction to Staff on any changes to the proposed Five-Year Capital Improvement Program FY 23-27.
4. Provide direction to Staff on any changes to the Preliminary FY 2022- 23 Airport Fund Budget.
5-YEAR CAPITAL IMPROVEMENT PROGRAM
BACKGROUND:
California Government Code Section 65403 and the Administration Element of the City’s General Plan requires that the City Council review and adopt a Capital Improvement Study Session - 1
City Council Staff Report
May 4, 2022 -- Page 2
Budget Study Session – 5-Year CIP and Airport Budget
Program (CIP). Previously, separate 5-Year CIPs were prepared for the Airport Fund and the Wastewater Fund. In addition, informal multiple year capital improvement programs were established for projects funded with Gas Tax and Measure A (mainly related to larger transportation projects funded with state/federal funds), as well as the Measure J Fund.
Last year, Staff prepared the Five -Year CIP for FY 2021-22 through FY 2025-26, to strategically identify all the current multi-year ongoing capital projects, including those to be funded in the Airport Fund and Wastewater Fund. City Council adopt ed a Resolution concurrently with the adoption of the FY 21-22 Budget to approve the 5-Year CIP.
ENGINEERING STAFFING
The Engineering Services Division is comprised of four segments which include Capital Improvements, Land Development, Field Inspection, and Administration. Within these segments are engineers, engineering assistants, techni cians, inspectors , and administrative support. The Department works together to provide support to and interact with the general public, land developers, contractors, consultants, federal and state agencies, local agencies, Commissions, ONE -PS, neighborhood groups and other departments within the City. The Engineering Division is challenged with completing active projects and starting the backlog of capital and facility projects.
The following is a list a list of current positions within the Engineering Services Division tasked with delivering the above-mentioned services:
Administration
• City Engineer
• Administrative Coordinator
Capital Projects
• Principal Engineer • Engineering Assistant (Vacant)
• Senior Civil Engineer • Associate Civil Engineer (2)
Land Development Senior Engineering Assistant
• Engineering Assistant • Counter Technician
• Engineering Associate • Inspector (2)
CURRENT ACTIVE PROJECTS
Staff is actively working on, or assisting with, approximately 64 Capital P rojects with a total approximate cost of $333.3 million. Most of the projects were presented in last year’s 5-Year CIP with the exception of the Navigation Center ; however, almost all the projects that Staff is working on were created prior to last year.
Study Session - 2
City Council Staff Report
May 4, 2022 -- Page 3
Budget Study Session – 5-Year CIP and Airport Budget
Staff has grouped the 64 Capital Projects into the 4 areas of Council Priorities (Quality of Life, Environmental Stewardship, Community Infrastructure, and Good Governance). In addition, Staff segregated projects directly associated with the Airport, Wastewater Treatment Plant, Federal Bridges, and State Funded Safety projects. Projects that did not fit in the above-mentioned categories w ere grouped together in a category called Miscellaneous.
The following is the list of 64 projects grouped into distinct categories:
Quality of Life - 1A Improve Homelessness
1 Project with an approximate cost of $10,000,000
• 22-05 - Navigation Center
Community Infrastructure - 3A Prioritize Deferred Maintenance 11 Projects with an approximate cost of $7,293,835
• 18-14 – Gene Autry Wind Wall/Guardrails
• 19-14 – Demuth Community Center Egress and HVAC Improvements • 19-19 – City Yard Roof Replacement
• 19-36 – Traffic Management Center and Signal Timing Optimization • 20-04 – Sunrise Plaza HVAC Improvements
• 20-06 – City Hall and Police Department Electrical Upgrades • 20-07 – Sunrise Plaza Domestic Waterline Separation
• 20-08 – Fleet Operations HVAC & Electrical Improvements • 20-09 – Demuth Community Center Window Replacements
• 20-10 – Sunrise Plaza Door & Window Replacements
• 20-22 – City Hall and Police Department Cooling Towers
Community Infrastructure - 3B Expand Walking/ Biking Infrastructure 3 Projects with an approximate cost of $4,232,000
• 17-07 – North Palm Canyon Pedestrian Enhancements
• 21-12 – SB 821 – Pedestrian Facilities Program FY 21-22 • CVAG – CV Link – Mesquite – Sunrise to Demuth Park (not funded by City)
Community Infrastructure - 3B Identify Hight Priority Facilities 1 Project with an approximate cost of $2,300,000
• 18-18 – Bogert Trail Sewer Lift Station
Community Infrastructure - 3B Focus on Parks and Community Assets 8 Projects with an approximate cost of $13,648,790
• 15-07 – Downtown Park
• 19-28 – Recreation Field LED Lighting Upgrades
• 20-27 – Pavilion Acoustics
• 20-29 – Playground Surfacing
Study Session - 3
City Council Staff Report
May 4, 2022 -- Page 4
Budget Study Session – 5-Year CIP and Airport Budget
• 20-30 – Demuth and Desert Highland Park Restrooms
• 21-16 – Demuth Dog Park
• 21-22 – Desert Highland Park Ballfield Laser Leveling and Bleachers • 21-32 – Swim Center Shade Structures
Community Infrastructure - 3B Accelerate Street Paving
2 Projects with an approximate cost of $7,000,000
• 22-02 – Annual Slurry Seal Program
• 22-08 – Annual Pavement Rehabilitation
Federally Funded Bridges
6 Projects with an approximate cost of $175,200,000
• 01-11 – Indian Canyon Widening & Bridge at UPRR
• 06-18 – South Palm Canyon Bridge at Arenas Canyons
• 08-25 – Ramon Widening & Bridge
• 10-10 – Vista Chino Low Water Crossing
• 12-02 – South Palm Canyon Bridge at Tahquitz Creek
• 12-04 – East Palm Canyon Bridge @ Palm Canyon Wash
State Funded Highway Safety Improvement Projects (HSIP) and Traffic Signal Projects
7 Projects with an approximate cost of $8,736,104
• 15-32 – Highway Safety Improvement Program – Cycle 7 – 17 intersections • 16-18 – Highway Safety Improvement Program – Cycle 8 – 14 intersections • 16-19 – Highway Safety Improvement Program – Cycle 8 – Flashing Beacon • 18-05 – Highway Safety Improvement Program – Cycle 9 – 9 intersections • 20-21 – Local Roadway Safety Plan (LSRP)
• 20-19 – Desert Highland Traffic Signal – Ind. Canyon Dr./Rosa Parks Rd • 20-33 – San Rafael Dr and Avenida Caballeros Traffic Signal
Airport Projects
11 Projects with an approximate cost of $45,543,423
• 19-03 – Invitation for Bids – Ticketing Hall Expansion • 19-34 – Passenger Boarding Bridges
• 21-13 – Demonstration Garden
• 21-14 – Regional Concourse Gate 16
• 21-19 – Video Ribbon Monitors
• 21-26 – Storage Space
• 21-27 – Taxiway Rehabilitation
• 21-28 – Shared Use Podium – Bono Concourse
• 21-29 – Wildlife Hazard Assessment
• 21-30 – Hot Spots Study
• 21-31 – Parking Surveying and Striping
Study Session - 4
City Council Staff Report
May 4, 2022 -- Page 5
Budget Study Session – 5-Year CIP and Airport Budget
Wastewater Treatment Plant Projects
7 Projects with an approximate cost of $49,823,500
• 20-25 – Digester No. 2 and Gas Flare Improvement Project • 21-04 – General Sitework and Paving
• 21-05 – Sludge Drying Beds
• 21-06 – Demolition of Various Facilities
• 21-07 – Filtrate Pump Station
• 21-08 – Biosolids Dewatering Facility
• 21-11 – Block Wall
Miscellaneous Projects
7 Projects with an approximate cost of $9,483,957
• 19-11 – Electric Vehicle Charge Stations
• 19-15 – Storm Drain Line 20
• 19-17 – Citywide Speed Survey
• 19-26 – Backup Generators (replace existing or build new) • 20-03 – Roundabout at S. Indian Canyon, S. Palm Canyon and Camino Parocela • 21-17 – Arnico Tract Sewer – Phase 4
• 22-04 – Rim Road Widening
TOTAL COST ALL PROJECTS: $333,261,609
STAFF ANALYSIS:
The 5- Year CIP is a planning document that is subject to revision as conditions and funding opportunities change. The document represents a five- year assessment of the City’s infrastructure, facilities, and equipment needs that will be updated annually.
Staff developed a comprehensive 5-Year CIP by evaluating proposed capital projects to determine the estimated cost, funding source, and schedule for construction within the next 5 years. The objectives of the Five-Year CIP are:
• Promote sound financial planning in the implementation of capital projects. • Identify and forecast funding needs and sources to maximize federal, state, regional, and local funding sources.
• Implement projects that meet the community and City Council goals. • Complete capital improvements in a timely and systematic manner.
The 5-Year CIP will be reviewed annually, during which time the City's needs may be re- prioritized and the City's financial status may be re- evaluated. The CIP book is divided into the following 4 sections:
Study Session - 5
City Council Staff Report
May 4, 2022 -- Page 6
Budget Study Session – 5-Year CIP and Airport Budget
1. Five Year Capital Improvement Program.
a. A one-page funding summary for the entire five-year plan. b. Table of Projects and Accounts.
c. List of Projects by Fund for each Fiscal Year.
2. City Council Priorities.
3. Detailed Project Information Sheets. These pages provide the project description, project justification, conformance to City Council priorities, location, breakdown of the cost estimate, and provides the breakdown of project funding.
4. Appendix.
a. List of Revenue Funds. These pages provide a brief explanation of the various funds that may be used on CIP.
b. Historical list of City Project numbers.
A copy of the DRAFT 5-Year CIP can be found at the following link:
https://publicportal.palmspringsca.gov/WebLink/DocView.aspx?id=1305544&dbid=0&re po=CityHall-Primary
COUNCIL PRIORITIZATION
Given the understanding that the Engineering Division is challenged with completing all the projects listed in year one of the 5-year CIP, Staff is requesting City Council direction on prioritizing the projects listed below. The list of projects is comprised of existing projects and new projects, and programs introduced this year.
Staff will focus its resources on the highest priority projects first and work down the list as projects are complete and more resources are added. The City Council will have the opportunity to review project priorities on an annual basis as a part of the budget process, or when the top priority projects are complete, whichever comes first.
Projects for Prioritization
1) 16-08 Main Library Renovation
2) 20-03 Roundabout at Indian Canyon, South Palm Canyon and Camino Parocela
3) 20-21 Local Road Safety Plan Proposed Projects
4) 22-23 Annual Traffic Calming Projects (multiple projects city wide) 5) 22-19 Relocate Fire Station Number 1
6) 22-20 Measure J Community Initiated Projects (14)
7) 22-21 Pedestrian and Safe Routes to Schools Master Plan Projects (37) 8) 22-22 Annual Sign and Striping Replacement
9) 22-24 Pickleball Courts Project
Study Session - 6
City Council Staff Report
May 4, 2022 -- Page 7
Budget Study Session – 5-Year CIP and Airport Budget
ENVIRONMENTAL ASSESSMENT:
The requested action by City Council is statutorily exempt from the requirements of the California Environmental Quality Act (CEQA). The review and discussion of the CIP does not commit the City to implement any of the identified projects in the ClP. Therefore, review and discussion of the CIP qualifies for a statutory exemption under CEQA Guidelines Section 15262 for “Feasibility and Planning Studies” for possible future actions which the City has not approved, adopted, or funded and which will not have a legally binding effect on later activities.
ALIGNMENT WITH STRATEGIC PLANNING:
Each project in the 5 -Year CIP has been evaluated for alignment with City Council Priorities.
FISCAL IMPACT:
Fully funded projects are not presented in this year’s Five-Year CIP. As indicated earlier, there are 64 active projects with an estimated cost of $333.3 million. The Five- Year CIP as presented for this Study Session includes 51 projects with a total estimated cost of $387.7 million to be funded with the following funds:
• Fund 133 - Gas Tax
• Fund 134 - Measure A (Regional and Local)
• Fund 135 - Drainage
• Fund 142 - SB1
• Fund 152 - Quimby
• Fund 260 - Measure J
• Fund 261 - Capital Projects
Enterprise funds.
• Fund 420 - Wastewater
• Fund 416 - Airport Fund
In addition to the above-mentioned funds, projects are being funded through grants from the Coachella Valley Association of Governments (CVAG), the Highway Bridge Program (HBP), Federal Highway Safety Improvement Project (HSIP), Senate Bill 821 Bicycle and Pedestrian Facilities Program Update (SB 821), and other available funding.
The requested action has no direct fiscal impact. Funding for Fiscal Year 2022-23 capital projects will be included for approval with the adoption of the Fiscal Year 2022-23 Budget.
Study Session - 7
City Council Staff Report
May 4, 2022 -- Page 8
Budget Study Session – 5-Year CIP and Airport Budget
AIRPORT ENDING FY 2021-22 REVIEW AND OVERVIEW OF FY 2022-23 BUDGET
BACKGROUND:
The City owns and operates the Palm Springs International Airport (Airport) and is responsible for all revenues and expenditures associated with the Airport, which are appropriated in a separate Enterprise Fund. There are four funds within the Airport Fund.
STAFF ANALYSIS:
CURRENT FISCAL YEAR 2021-2022
The Airport Fund revenue for FY 2021- 2022 is projected to exceed the Revised Budget for FY 2021-22 by approximately $6.5M. The increase in revenues is due to a substantial increase in airline activity and passenger growth. The Airport now serves 13 passenger airlines which includes three new Canadian airlines – Swoop and Flair that started service in December 2021, and aha! that launched service in January 2022. Additionally, Southwest, Alaska, and Allegiant airlines added new routes to different cities across the United States. The new airlines and added routes have contributed to the passenger growth at the Airport. The most incremental revenue increases are identified below.
• On-Airport Car Rental Fees increased by $3.0M, an increase of 52.5% • Parking Fees increased by $1.3M, an increase of 41%
• Airline Fees increased by $1.8M, an increase of 34%
Table 1 below provides a summary of the Revenue Actuals for FY 2020-21, the Revised Budget for FY 2021-22, and the FY 2021-22 Airport Fund Estimated Revenue Actuals.
TABLE 1
Category
FY 2020-21
Actual
FY 2021-22
Revised
Budget
FY 2021-22
Estimated
Actuals
FY 2022-23
Prposed
Budget % Change
Scheduled Landing Fees 2,107,977 2,130,000 3,340,000 3,340,000 56.8% Landing Fee Surcharge 844,474 1,071,000 1,659,000 1,783,000 54.9% Terminal Air Comm Rental 1,971,523 2,197,000 2,227,000 2,094,000 1.4% Land Rental 1,317,324 1,605,000 1,440,000 1,223,000 -10.3% Advertising 233,048 256,000 336,000 400,000 31.3% Parking 2,680,743 3,326,000 4,704,000 4,704,000 41.4% On-Airport Rental Car 5,263,544 5,837,000 8,899,000 8,899,000 52.5% Term Non-Air Comm Rental 946,725 1,000,000 1,399,000 1,741,300 39.9% TSA Law Enfocement Officer Grant 144,800 120,000 141,000 264,000 17.5% Concessions 10,219 10,000 23,000 97,200 130.0% Customs Fees 228,456 240,000 349,000 349,000 45.4% All Other General Revenue 3,642,112 4,708,000 4,475,000 4,285,200 -4.9% TOTAL 19,390,944 22,500,000 28,992,000 29,179,700 28.9% Fund 415 Airport Revenue
Study Session - 8
City Council Staff Report
May 4, 2022 -- Page 9
Budget Study Session – 5-Year CIP and Airport Budget
Airport Fund Expenditures
The Airport Fund expenditures in FY 2021- 22 are projected to decrease from the FY 2021-22 Revised Budget by approximately $3.7M. The following are the projected expenditure decreases:
• $1.2M reduction in contractual services due to a lower volume of maintenance repairs and service calls.
• $2.5M reduction in personnel expenses due to vacancies.
Table 2 below provides a summary of the Expenditure Actuals for FY 2020- 21, the Revised Budget for FY 2021-22, and the FY 2021-22 Airport Fund Estimated Expenditure Actuals.
TABLE 2
Airport Fund Unassigned Fund Balance
The Airport Fund ended FY 2020-21 with a Total Fund Balance of $3.5M; FY 2021-22 is projected to have a $7.8M surplus and Total Fund Balance of $11.3M. Unassigned Fund Balance is projected to increase by $7.1M from $567K to $7.6M and the CalPERS Reserve Set-Aside ending balance for FY 2021-22 is projected to be $3.7M, as shown in Table 3 below.
Category
FY 2020-21
Actual
FY 2021-22
Revised
B
udget
FY 2021-22
Estimated
A
ctuals
FY 2022-23
Proposed
B
udget
% Change
Airport Administration 3,986,813 5,412,490 3,925,000 6,296,049 60.4% Airport Security 2,825,144 3,023,764 2,754,000 3,138,357 14.0% Airside Operations 1,660,134 1,052,500 1,101,000 1,054,902 -4.2% Air Rescue-Fire 3,815,758 3,619,226 3,482,000 4,237,176 21.7% Landside Operations 1,131,673 1,548,400 1,233,000 1,516,675 23.0% Grounds Maintenance 405,867 721,600 472,000 662,081 40.3% Terminal Building Operations 6,579,342 6,605,630 5,861,000 7,032,956 20.0% Control Center Operations 3,422,265 4,132,397 3,471,000 4,285,198 23.5% Customs 250,562 212,900 288,000 276,484 -4.0% TOTAL $24,077,558 $26,328,906 $22,587,000 $28,499,878 26.2% Fund 415 Airport Expenditures
Study Session - 9
City Council Staff Report
May 4, 2022 -- Page 10
Budget Study Session – 5-Year CIP and Airport Budget
TABLE 3
In addition to the Airport Fund (Fund 415), the Airport has the Customer Facility Fund (Fund 405), the Passenger Facility Fund (Fund 410) and the Capital Projects Fund (Fund 416). Both Fund 405 and 410 are restricted funds.
Fund 405 collects a customer facility fee on rental cars. The funds are restricted for a future $150M capital project to construct a new consolidated rental car facility. Fund 410 collects the passenger facility charge assessed on passenger airline tickets. The funds are restricted to Federal Aviation Administration (FAA) approved airport projects. In 2019, the City Council took action and adopted an Ordinance authorizing the issuance of Airport Revenue Bonds for the purpose of financing the construction of the Airport Terminal Improvements. As a result, Bonds in the amount of approximately $22.2M were issued with the proceeds used in part to finance the construction of the Airport Ticket Wing Expansion project. Lastly, Fund 416 is the Airport’s Capital Projects Fund. The Airport receives approximately $4.1M in Airport Improvement Program grants funded by the FAA FY 2020-21
Actual
FY 2021-22
Revised
Budget
FY 2021-22
Estimated
Actual
FY2022-23
Proposed
Budget
Beginning Projected Fund Balance - Unrestricted 4,803,152 3,567,860 3,567,860 11,374,810 Operating Revenues 19,390,944 22,500,000 28,992,000 29,179,700 Transfer In - - - - Add: Grant Revenue 3,451,322 4,200,000 1,401,950 11,889,698 Total Revenues 22,842,266 26,700,000 30,393,950 41,069,398 Transfer Out - - - (5,381,078) Operating Expenditures (24,077,558) (26,328,906) (22,587,000) (28,499,878) Less: Grant Expenditures - - - - Total Expenditures (24,077,558) (26,328,906) (22,587,000) (33,880,956) Surplus / (Deficit) (1,235,292) 371,094 7,806,950 7,188,442 Total Fund Balance 3,567,860 3,938,954 11,374,810 18,563,252 CalPERS Reserve Set-Aside 3,000,000 3,750,000 3,750,000 4,500,000 Unassigned Fund Balance 567,860 188,954 7,624,810 14,063,252 Fund Balance Total 14.82% 14.96% 50.36% 54.79%
Fund Balance CalPERS Reserve Total 12.46% 14.24% 16.60% 13.28% Fund Balance % Total 27.28% 29.20% 66.96% 68.07%
Study Session - 10
City Council Staff Report
May 4, 2022 -- Page 11
Budget Study Session – 5-Year CIP and Airport Budget
that are accumulated to fund the Airport’s 10% local match to federally funded capital projects, and non-grant funded local airport projects. Fund 416 also receives a transfer from the Airport Fund 415 to support local non-FAA funded capital projects.
A summary of the current FY 2021-22 estimate compared to the Revised Budget for these funds is shown on Table 4 below.
TABLE 4
PROPOSED BUDGET FISCAL YEAR 2022-2023
Airport Fund Revenues
The Total Operating Revenue budget for FY 2022- 2023 is $41M. This represents a $10.6M or 34.9% increase from the FY 2021-22 Estimated Actuals.
Fund 405 - Customer Facility Charge
Beginning Projected Fund Balance 25,476,706$ 26,768,208$ 26,768,208$ 29,925,208$ Revenues 1,391,343 1,750,000 3,182,000 7,297,000 Expenditures (99,841) (150,000) (25,000) (2,000,000) Total Fund Balance 26,768,208$ 28,368,208$ 29,925,208$ 35,222,208$ Fund 410 - Passenger Facility Charge
Beginning Projected Fund Balance 67,929$ (7,483,353)$ (7,483,353)$ (4,297,652)$ Revenues 5,368,652 4,275,000 5,680,700 6,867,000 PFC Bond Proceed
Project Costs (12,147,779) -
Expenditures (18,286) (20,000)
Bond Expenditures (753,869) (3,023,000) (2,494,999) (2,501,000) Total Fund Balance (7,483,353)$ (6,231,353)$ (4,297,652)$ 48,348$ Fund 416 - Capital Projects
Beginning Projected Fund Balance 53,044,451$ 63,683,406$ 63,683,406$ 56,183,406$ Federal Grants 5,376,115 5,355,500 7,500,000 8,170,000 Measure "J" & "D" airport fuel tax - 500,000 - - Local Capital Projects (1,390,367) (2,260,000) (830,000) (3,868,000) Local AIP Grant Match - - - (763,078) Expenses - - (15,000,000) FAA Projects (8,170,000)
Depreciation/Asset Disposal/Budget Transfer Out (5,494,573) Other - Transfer from 410 12,147,780
Other - Transfer from 415 2,260,000 830,000 4,631,078 Total Fund Balance 63,683,406$ 69,538,906$ 56,183,406$ 56,183,406$ FY 2021-22
Revised Budget
FY 2021-22
Estimated Actual
FY 2022-23
Proposed Budget
FY 2020-21
Actual
Study Session - 11
City Council Staff Report
May 4, 2022 -- Page 12
Budget Study Session – 5-Year CIP and Airport Budget
• Airline related revenues for FY 2022- 23 are anticipated to be $7.2M or approximately 18% of the Total Operating Revenues. Airline revenue sources are comprised of landing fees and terminal building rents.
• Non-Airline Revenues represent $21.9M or approximately 53% of the FY 2022-23 Total Operating Revenues. Major non- airline revenues sources: (1) Terminal Concessions including Car Rental, News and Gift, and Food and Beverage; (2) Public Parking and Ground Tr ansportation Revenues; (3) various Building, Hangar, and Land rents; and (4) Other non-airline revenues.
• Grant Revenues represent $11.8M or approximately 29% of the FY 2022-23 Total Operating Revenues. Federal grant funding was allocated to the Airport t hrough the Coronavirus Aid, Relief and Economic Security Act (CARES), Coronavirus Response and Relief Supplemental Appropriations Act (CRRSAA), and American Rescue Plan Act (ARPA). The three grants combined provided approximately $28M for the Airport. The proposed FY 2022- 23 Budget anticipates utilizing approximately $11.8M of the CARES Act, ARPA and CRRSAA grants to fund payroll and other operating expenses.
Customer Facility Charge (CFC) Revenues
The CFC Revenues budget for FY 2022- 23 is $7.4M. This represents a $3.9M or 112% increase from the FY 2021-22 Estimated Actual.
• Rates were increased on March 1, 2022, from $10 per one rental car transaction to a daily fee of $9 per day up to a five day maximum ($45) per one rental car transaction.
The CFC Expenditure budget for FY 2022- 23 is $2M. This proposed expense is to start the planning and design of the future consolidated rental car facility.
Passenger Facility Charge (PFC) Revenues
The PFC Revenues budget for FY 2022- 23 is $6.8M. This represents a $1.1M or 21% increase from the FY 2021-22 Estimated Actual.
• PFC increases are due to the increase in total annual passengers.
The PFC Expenditure budget for FY 2022- 23 is $2.5M. This expenditure represents the principal and interest payments on the bonds.
Airport Fund Expenditures
The Total Operation Expenditure budget for FY 2022- 23 is $33. 9M. Expenditures are expected to increase by 33% when compared to the Estimated Actuals for FY 2021-2022.
Study Session - 12
City Council Staff Report
May 4, 2022 -- Page 13
Budget Study Session – 5-Year CIP and Airport Budget
The increase is comprised of approximately $5. 9M in personnel costs, administrative services, material and supplies , contractual service expenditures , and $4.6M in capital expenditures. There is a transfer of $750K to fund the CalPERS fund.
• Materials and supplies are used primarily for the items needed by Maintenance staff to maintain the Airport, as well as office supplies used by administrative staff.
Budgeted allocations for office supplies, general supplies, and equipment were significantly reduced in FY 2021- 22 in response to the COVID -19 pandemic and efforts to reduce cost. Some of those reductions are being added back in FY 2022- 23 as the Airport move towards increased passenger traffic.
• C ontractual Services accounts for approximately $2.6M or 7.7% of the proposed budget. The Airport uses this account to procure professional services necessary to cover expertise not available within the Airport as well as maintenance and repair services for specialized systems and equipment.
• Capital Expenditures account for approximately $ 4.6M or 1 4% of the proposed budget. Approximately $765K of this amount is the 10% local share for FAA funded Airport Improvement Program projects. The remaining $3.8 M is for the special capital projects.
• Capital Expenditures include:
• Restroom Capacity Renovation
• Concourses Carpet Replacement
• Apron Gate Pavement Rehabilitation
• Airport Improvement Program projects include:
• Design and Construction of Taxiway Rehabilitation
• Airfield Wildlife Hazard Management Assessment
• Airfield Hot Spot Study and Design
• Airport Master Plan
In accordance with the City Council priorities, Table 5 on the next page is City Manager Recommended new one-time and on-going expenditures. Additional detail for each line item is provided in Attachment 1.
Study Session - 13
City Council Staff Report
May 4, 2022 -- Page 14
Budget Study Session – 5-Year CIP and Airport Budget
TABLE 5
Airport Fund Unassigned Fund Balance
The current proposed budgeted surplus for FY 2022- 23 for all related Airport funds is projected to be $7.7M, for an ending Unassigned Fund Balance at FY 2022-23 of $14.6M.
The ending assigned CalPERS Reserve balance for FY 2022- 23 in the Airport fund is projected to be $4.5M, for a projected combined CalPERS and Unassigned Fund Balance of $19.1M.
FISCAL IMPACT:
Provide direction to Staff on any changes to the Preliminary FY 22-23 Airport Budget.
REVIEWED BY:
City Engineer: Joel Montalvo
Interim Airport Director: Harry Barrett
Finance Director: Nancy Pauley
City Manager: Justin Clifton
ATTACHMENTS:
1. Airport Fund City Manager Recommendations – Additional Detail PROJECTED FY 2022-2023 FUND BALANCE 19,113,453
Airport Positions Ongoing One-Time
1 Add (3) Maintenance Worker 284,600
2 Add (1) Aviation Security Supervisor 149,200
3 Add (1) Manager, Airport Safety Management Systems 169,000 4 Add (1) Aviation Planner 162,000
5 Add (1) Industrial Technician, Lead 135,000
6 Add (1) Marketing and Communications Specialist 157,400 7 Add (1) Community Engagement & Legislative Affairs Specialist 169,000 8 Add (1) Operations Specialist 126,400
9 Add (1) Maintenance Supervisor 140,300
10 Pay Scale Increase (4) Airport Operations Supervisor 30,000 11 Equipment (Computer/Radio/Phone) 45,000
12 Office Furniture 62,000
13 Add IT Tech (Moved from IT to Airport) 124,400 14 Add IT Tech (1/2 Moved from IT to Airport) 62,200 1,522,900 107,000 1,629,900
TOTAL AIRPORT 1,522,900 107,000 1,629,900 ENDING FUND BALANCE AFTER ONGOING EXPENSES 17,738,261
City Manager Recommended
Study Session - 14
ATTACHMENT 1
AIRPORT FUND CITY MANAGER RECOMMENDATIONS
1. Airport Maintenance Worker (3.0 FTEs): This position will provide additional annual staffing to address the facility hygiene efforts and help reduce overtime. The Airport has not added FTEs of this nature in many years as there was a desire in previous years to focus on keeping operating costs low. However, the activity at the Airport has increased significantly, leading to a corresponding increase in complaints from both internal and external customers. Further, much of the Airport staff have longevity; there is a need for additional personnel to ensure day off and leave coverage.
2. Aviation Security Supervisor (1.0 FTE): The Aviation Department requests to create
1.0 new FTE in the classification of Aviation Security Supervisor. This classification would report to the Airport Security Coordinator and would have the formal responsibilities of an Alternate Airport Security Coordinator. The Security Supervisor would be responsible for overseeing scheduling at the badging office, administering training to the airport badge population and liaise with TSA to assist the Security Coordinator with implementing changes to the Airport Security Program mandates and security directives.
3. Airport Manager, Airport Safety Management Systems (SMS) (1.0 FTE): The Airport requests to create 1.0 new FTE in the classification of Manager, Airport Safety Management Systems to satisfy the implementation of Federal Aviation Administration’s (FAAs) Order 8000.369 which is expected to be effective Q3 of this calendar year.
4. Aviation Planner (1.0 FTE): The Aviation Department requests to create 1.0 new FTE in the classification of Aviation Planner. This classification is critical due to current and long-range capital needs of the Airport. The Aviation Department has lacked in- house resources for scheduling, planning, and driving the voluminous number of capital projects that the A irport has a need to pursue. Historically, the responsibility of driving these projects has fallen to the Assistant Airport Director or Executive Director, in coordination with the City P lanning and Engineering Departments, which has resulted in some project inefficiency, scope creep and missed elements. On average, under the Airport Capital Improvement Program (ACIP), the A irport initiates about two to three major projects per federal fiscal year using grant funding, with a number (five to six) of additional scheduled and ad hoc projects under the normal Capital Improvement Plan (CIP). It has also been the airport’s experience that projects related to the airfield specifically could benefit from civil engineers and planners that have a deep knowledge of aeronautical and airspace regulations and principles. Due to operational growth and looming capital projects, the Aviation Department seeks to substantially improve our ability to deliver projects in a timely and efficient manner, and this necessitates a single point of contact or team who has a global understanding of the Airport’s capital needs.
Study Session - 15
5. Airport Industrial Technician Lead (1.0 FTE): The Airport requests an additional 1.0 FTE in the classification of Industrial Technician Lead to coordinate all resources, scheduling, logs, and to add personnel capacity for the maintenance of the A irport Baggage Handling System and the Passenger Boarding Bridges systems.
6. Marketing & Communications Specialist (1.0 FTE): The Aviation Department requests to create 1.0 new FTE in the classification of Marketing & Communications Specialist. This classification would report to the Deputy Director of Aviation, Marketing.
This position would be responsible for assisting with social media, community outreach, customer service, copy writing, brand management, Airport advertising, and managing the Airport’s volunteer navigator program among other duties as assigned.
7. Community & Legislative Affairs Specialist (1.0 FTE): The Aviation Department requests to create 1.0 new FTE in the classification of Community and Legislative Affairs Specialist. This classification would report to the Executive Director and would have the responsibility to manage and coordinate governmental affairs for the A irport, including governmental, departmental, interagency, administrative, commission, and community activities while promoting and fostering mutually beneficial and cooperative relations between the Airport and other governmental organizations at the local, state and federal levels.
8. Airport Operations Specialist (1.0 FTE): The Airport requests an additional 1.0 FTE in the classification of Operations Specialist to address increased demand on operational programs, including Control Center Operations, Airline Resource Management, and compliance inspections.
9. Maintenance Supervisor (1.0 FTE): The Aviation Department requests to create 1.0 new FTE in the classification of Maintenance Supervisor. This classification would report to the Airport Maintenance Superintendent and support the department as one of four supervisors o verseeing twenty -three (23) maintenance personnel across two shifts seven days per week.
10. Airport Operations Supervisor (1.0 FTE): The Aviation Department requests to reclassify all four (4) of the Airport Operations Supervisors from the existing step 50 to step 52. This re-classification would result in approximately $60,000 in annual expenses.
The total one-time costs are $107,000 and the ongoing annual costs are $1,522,900.
Study Session - 16