April 16, 2024
Finance Department
DATE: April 16, 2024
TO: Mayor Martinez and Members of the City Council
FROM:
Andrea Miller, Director of Finance
Daniel Chavarria, PE, Director of Public Works
Robert Armijo, PE, Deputy Director of Public Works/City Engineer
Josef Munoz, Capital Projects Manager
Mubeen Qader, Deputy Director of Finance
Subject:
Capital Improvement Plan Projects Update
FINANCIAL IMPACT: Appropriation of $4,058,438 from Fiscal Year 2022-23 Unspent Funds
PREVIOUS COUNCIL
ACTION:
March 5, 2024
STATEMENT OF THE
ISSUE:
City staff is bringing forth a capital projects prioritization, status update, and appropriation of Fiscal Year 2022-23 unspent funds and ARPA funding exchange with General
Capital Fund for several projects.
RECOMMENDED ACTION: RECEIVE an update regarding the prioritization and status of the Capital Improvement Plan Projects; and
ADOPT a resolution to APPROPRIATE $4,058,438 of
unspent funds from Fiscal Year 2022-23 – Finance
Department (Andrea Miller 510-620-6790).
DISCUSSION:
On March 5, 2024, City Council received a mid-year budget review presentation. During that meeting, City Council asked City staff to further evaluate the Capital Improvement Projects (CIP) listed on Attachment 8 of the March 5, 2024, mid-year staff report AGENDA
REPORT
April 16, 2024
(Attachment 1). City Council directed staff to consider the following criteria as part of the evaluation process:
Legal Compliance Issues
Funding Obligation such as American Rescue Plan Act (ARPA) Housing/Facility issues such as Station #63
Health and Safety Issues
Quality of Life
Finance and Public Works staff worked closely together to further evaluate the projects and to determine those projects under development for the current fiscal year, and those that will be developed in future fiscal years.
As shown in Table 1, City staff identified $8,782,686 available for capital projects from a combination of prior year unspent funds of $6,879,432, and the net increase of mid-year revenue and expenditure adjustments of $1,903,254. On March 5, City Council appropriated $400,000 which left a remaining balance of $8,382,686 in unspent funds.
City staff is recommending an appropriation of $4,058,438 of those remaining unspent funds ($3,503,008 will be exchanged with ARPA funding to expand park-related projects and $555,430 will support funding gaps in existing CIP projects). This leaves a contingency or set-aside of $4,324,248 in remaining unspent funds for future allocation.
Due to the timing of revenue and expenditure fluctuations throughout the fiscal year, staff does not recommend allocating the full amount identified until the fiscal year is complete and there is a better sense of how those revenue and expenditures will materialize. In addition, it is impractical to encumber funds this close to the end of the fiscal year as they will need to be reallocated in the new fiscal year beginning July 1, 2024.
Table 1: Unspent Funds
Description Amount
FY 2022-23 Unspent Funds and Available Revenue
(Presented on March 5,2024) 8,782,686
City Council Appropriations (March 5, 2024) (400,000)
Balance of FY 2022-23 Unspent Funds 8,382,686
Exchange Funding with ARPA (See Table 2) (3,503,008)
Existing Capital Projects with Funding Gaps (See Table 3) (555,430) Contingency/Set Aside 4,324,248
This agenda item is to further evaluate the capital improvement projects, provide status updates on the approved projects, review estimated timelines for each project, provide partial unspent funds allocation to soccer fields, and discuss funding allocation exchange of ARPA and General Capital Fund between the Main Library Revitalization and Sidewalk Improvements Project.
April 16, 2024
Capital Projects Status and Timeline
During the mid-year budget review presentation on March 5, 2024, the City Council allocated $400,000 for select projects ($300,000 to Fire Station 63; $50,000 to 37th Street; and $50,000 to Nevin Avenue between 19th – 27th Streets). City Council did not allocate a significant part of the unspent funds and directed staff to prioritize and provide status updates and timelines on the currently approved projects. The Capital Projects team of engineers were hired in the spring of 2023 or after, and there are three additional engineer recruitments currently in progress. The Public Works department is reorganizing the administrative unit to provide enhanced support for project management. Given additional staff and an enhanced administrative unit, the capital projects are expected to move quicker.
Attachment 2 details the preliminary CIP Plan, annual budgets, and their respective timelines.
Unspent Funds Allocation Recommendation and Exchange with ARPA
On November 28, 2023, the City Council allocated $4,200,000 of American Rescue Plan Act (ARPA) funds to soccer fields/parks/restrooms. The ARPA funding will be applied to improvements at two community parks (Martin Luther King, Jr. Park and Shields-Reid Park), and one neighborhood park (Wendell Park). The improvements include, but are not limited to, courts, lighting, play areas, and restrooms to improve or expand the usability of existing fields. The planned improvements adjacent to fields are key to accessibility for residents from across the city and usability during the winter and evening hours. Since ARPA funds must be encumbered by December 31, 2024, City staff recommends exchanging $3,503,008 in ARPA allocations referenced below in Table 2 with the unspent funds and reappropriate ARPA funds to the soccer fields/parks/restrooms project with an expanded scope of work.
Table 2: List of Projects Exchanging ARPA Fund with Unspent Funds ARPA Project Amount Current
Funding
Recommended
Funding
Fire Station 66 Restroom 423,283 ARPA Unspent Funds
Recreation Center HVAC 1,114,975 ARPA Unspent Funds
Shields-Reid HVAC 900,000 ARPA Unspent Funds
Nevin Center HVAC 1,064,750 ARPA Unspent Funds
Total 3,503,008
The additional appropriation of $3,503,008 for the soccer fields/parks/restrooms project would increase the total appropriation from $4,200,000 to $7,703,008. The additional funding will allow the City to expand the scope of work with enhanced services and improvements at these parks (Attachment 3).
In addition, as shown in Table 3, City staff recommends appropriating $555,430 from the prior year unspent funds to the following projects: Harbour 8 Park Extension
April 16, 2024
($300,000), 6th Street & Macdonald Ave Signal Improvement ($205,430), and Bridge Preventive Maintenance ($50,000). Harbour 8 Park Extension and 6th Street & Macdonald Avenue Signal Improvement projects are currently in construction and have a funding gap. These projects need the identified funds to close out the projects. The Bridge Preventive Maintenance project requires a funding match for the Statewide Transportation Improvement Program (STIP) Federal Grant.
Table 3 Capital Projects Recommended for Unspent Funds
Existing Capital Improvement Project with Funding Gap Unspent Funds Harbour 8 Park Extension 300,000
6th Street & Macdonald Ave Signal Improvement 205,430
Bridge Preventative Maintenance 50,000
Total 555,430
Historic Richmond Main Library Renovation Project Funding Exchange
City Council appropriated a total of $4,156,490 in ARPA funding to the Library Renovation project in two different meetings in 2022. Since ARPA funds must be encumbered by December 31, 2024, and the project construction costs will not be encumbered in 2024, City staff recommends that the balance of the appropriation, $1,898,377, be exchanged with the General Capital funds and to reappropriate the ARPA funds of $1,898,377 to Americans with Disabilities Act (ADA) Miscellaneous Sidewalk Rehabilitation project.
Table 4: Main Library and ADA Sidewalk Funding Exchange Project Amount Current
Funding New Funding
Library Revitalization Project Fund
Exchange 1,898,377 ARPA General Capital
ADA Miscellaneous Sidewalk
Rehabilitation project. 1,898,377 General
Capital ARPA
In order to meet ARPA deadlines and complete critical CIP projects, City staff recommends that City Council adopts the resolution to appropriate General Fund unspent funds and exchange ARPA funds with unspent funds (Attachment 4).
Next Steps
City staff will continue to develop the Multi-Year Capital Improvement Plan and will present a draft as part of the FY 2024-25 Budget development process on May 28, 2024.
April 16, 2024
DOCUMENTS ATTACHED:
Attachment 1 – From March 5, 2024, Attachment 8 Capital Improvement Projects with Projected Shortfalls
Attachment 2 – CIP Status Report
Attachment 3 – Soccer Field-Parks-Restrooms Scope of Work Attachment 4 – Resolution