The Turlock City Council will receive a mid-year budget update on Tuesday, noting that expenditures appear to be on-track with projections, though revenues remain uncertain.
The difficulty tracking revenues comes due to a timing issue related to the receipt of revenues; revenue from October 2010 through December 2010 will not be remitted to the city until March. Thus far, though, sales tax revenue projections appear accurate.
Staff is recommending a few minor changes to the budget, including an additional $136,331 in sales tax revenue for street maintenance projects, and a $150,456 increase in a refund on a liability program. The refund would be used for sidewalk and vehicle repair, while the remainder would go to self-insurance funds.
Bad news is already on the horizon for next year, as the city learned that retirement costs will be increasing nearly $818,000, $573,000 of which would be paid from the General Fund. Additionally, labor agreements to reduce $2.1 million in wages and/or benefits are due to sunset on June 30; $1.4 million of the returning wages would be paid from the General Fund.
The council will also hear news that the City of Turlock netted $2.4 million during the 2009-2010 budget, but that gain came entirely due to the city’s decision to shift $5.3 million from overfunded insurance reserve accounts into the General Fund reserve.
The city finished the 2009-2010 fiscal year with revenues $885,462 below budget, mainly due to decreased sales tax revenues. The decline was somewhat balanced out by down expenditures, a total of $523,877 under budget, but Turlock finished the year with a $2.9 million deficit, not counting the $5.3 million fund transfer. That deficit is better than a $3.3 million deficit projected at the start of the 2009-2010 fiscal year, and a $3.5 million deficit suggested during the mid-year budget review.
Council to consider Fleet Maintenance outsourcing report
City staff will recommend Turlock City Council members reject a proposed plan to outsource the city’s Fleet Maintenance Services division on Tuesday, as the move would cost the city more than keeping the work in-house.
The idea of outsourcing Fleet Maintenance first came up during budget discussions in May 2010. At the request of then-Councilman Ted Howze, Municipal Services Director Dan Madden drafted requests for bids to move the maintenance of vehicles, small equipment, and heavy equipment to a private provider or another governmental agency.
“I don’t see how this department is sustainable in any way when we can go out and privatize at a much lower rate than what we have here,” Howze said in May 2010.
On May 25, 2010 council approved a motion appointing then-Vice Mayor Kurt Spycher to oversee development of the RFP, and allowed Turlock City Employees Association legal counsel Bob Phibbs to observe throughout the process. On Oct. 12, 2010, the City Council finalized the RFP and proceeded with the formal bid process to outsource Fleet Maintenance Services.
Bids, split into four separate areas, were opened Dec. 1, 2010. For on-site services, the City of Turlock’s in-house projection came in at $484,729 – more than half a million dollars less than the lowest bidder, First Vehicle Services, at $937,586.
Other areas, including small equipment repairs, were more competitive. All qualified bidders showed a lower hourly rate than the City of Turlock, by $8 per hour, but declined to show their parts markup cost, leaving staff to recommend continuing the service with Fleet Maintenance. A bid for heavy and off-road equipment suffered a similar fate, with an incomplete bid leading staff to conclude that service could be performed by City Fleet Maintenance Services for less than the bidders.
In the final bidding area, light trucks and sedans, Patchett’s Ford offered an hourly labor rate which would result in a $43,000 cost savings compared to City Fleet Maintenance Services. But staff noted those savings don’t include cost of delivering and picking up vehicles, record keeping, and management, which would drop the savings to $30,260, at the best. With that amount of savings, staff was unable to determine what changes in staffing level would be possible.
Council will have the final say to reject or accept any or all bids, or to send projects back out to bid.
Streetlight loan on agenda
On Tuesday the council will also consider a potential solution to a long-time budget sticking point with a proposed, Low-Interest Energy Conservation Assistance Act Loan agreement with the California Energy Commission to retrofit city streetlights to energy-efficient induction lighting.
In the approved 2010-2011 budget, the largest chunk of a $2.7 million deficit was a $600,000 tab for Turlock’s streetlight program. That program was previously funded through now non-existent state transportation funds.
Induction lamps use 50 percent less electricity than existing city lamps, while the bulbs last nearly five times as long, reducing labor and replacement costs. The city would save approximately $110,885 on electricity each year with the conversion should the loan be approved, plus approximately $25,000 in labor costs, paying off the loan in about seven years.
The proposed, $766,165 loan at 3 percent interest is in addition to a $643,100 federal stimulus grant the city previously received. The stimulus project will convert approximately 1,800 streetlights; the CEC grant would allow the city to convert nearly all remaining streetlights to induction technology.
The Turlock City Council is also scheduled to:
· Consider hiring a part-time supervisor in the Housing Program Services Division while current HPSD manager Maryn Pitt serves as Interim Assistant City Manager until June 30, 2011.
Four managers from various city departments have served four month terms as Interim Assistant City Manager for the last 16 months, all while performing their regular duties. But, during Pitt’s tenure, Pitt was asked to take on the assignment of Interim Airport Manager and to assist with the 2011-2012 city budget process, leaving little time for housing duties.
The position would be funded with $32,000 from the General Fund and the Housing Set-Aside Fund.
· Join with the League of California Cities to oppose Gov. Jerry Brown’s proposal to eliminate redevelopment agencies and enterprise zones. The proposal could jeopardize Turlock’s plans to construct a Public Safety Center, which would be financed in large part through new Turlock Redevelopment Agency Bonds.
· Issue a proclamation recognizing the Charity Quilt Committee of the Turlock Quilt Guild.
· Hear a presentation on the “Character Counts” program from the Turlock Unified School District.
· Receive staff updates on the Public Safety Facility and Turlock Together.
· Finalize an amendment to the Turlock Municipal Code, which would better establish restrictions on the retail sale of dogs and cats. The Municipal Code change would clarify that breeders must follow the Animal Welfare Act, enforced by the U.S. Department of Agriculture, and that “Breeders are required to maintain minimum health, safety and welfare standards for animals in their care.” The ordinance amendment was initially approved at the council’s Jan. 11 meeting.
· Reaffirm the City of Turlock’s role as the owner, sponsor, and jurisdiction of record for the Turlock Municipal Airport with the Federal Aviation Administration. The council will also receive the annual report of the Turlock Regional Aviation Association.
· Assess nine properties for costs related to the abatement of weeds, obnoxious growths, and debris, and establish a lien for payment. The assessments total nearly $3,800.
The Turlock City Council will meet at 7 p.m. on Tuesday in the Yosemite Room of Turlock City Hall, 156 S. Broadway.
To contact Alex Cantatore, e-mail firstname.lastname@example.org or call 634-9141 ext. 2005.