and
PRESENT: Council Members Campos, Cortesé, Dando, Diquisto, LeZotte, Reed, Shirakawa, Jr., Williams, Yeager; Gonzales.
ABSENT: Council Member Chavez
STAFF: City Manager Del Borgsdorf, Budget Director Larry Lisenbee, Assistant Budget Director Jennifer Maguire, Principal Budget Analyst Richard Desmond, Mayor’s Budget and Policy Director Joe Guerra, City Clerk Patricia L. O’Hearn, and Legislative Secretary Rachel Thrower
The meeting was called to order at 8:38 a.m.
PROPOSED 2001-02 CAPITAL BUDGET and 2002-06 CAPITAL IMPROVEMENT PROGRAM
Documents Filed: (1) Agenda of the City Council Study Session on Proposed 2001-2002 Capital Budget for Monday, May 7, 2001. (2) Memorandum from City Manager, Del D. Borgsdorf dated May 1, 2001, filed in the binder of the Proposed 2001-2002 Capital Budget and the Proposed 2002-2006 Capital Improvement Program, which was distributed to the City Council. (3) Hard copies of Staff presentations on City Service Areas of Recreation and Cultural Services, Public Safety, and Transportation Services.
Mayor Gonzales opened the Study Session on the consideration of the Proposed 2001-2002 Capital Budget and the Proposed 2002-2006 Capital Improvement Program, with presentations focused on City Service Areas (CSAs). He omitted opening comments and introduced City Manager Del D. Borgsdorf who stated the Proposed 2002-2006 Capital Improvement Budget represents the largest Program in the history of San José, totaling $1.9 billion representing a 12% increase from the Adopted 2001-2005 CIP. He stated the Proposed 2001-2002 Capital Budget totals $987 million and reflects an increase of $253 million from the Adopted 2000-2001 Capital Budget and derives funding from a variety of sources. He stated the most significant part of the Capital Improvement Program was driven by the passage of the General Obligation Bonds in November 2000, Measures O and P, and includes the implementation of branch library and parks and recreation projects – approximately $228 million for parks and $212 million for branch library projects extended over a ten-year period. He stated the Civic Center, included for the first time in the City’s CIP, the Traffic Calming projects, and Fire Apparatus and tools are among the more significant additions to the Program, and will be summarized in the staff presentation. He stated the Airport Master Plan, the Police Facilities, the Fire Protection Strategic Plan, and the Convention Center all require significant investments which are not included in the current budget and remain in various stages of development. With regard to the presentation process, he stated the seven City Service Areas (CSA) integrate services provided in individual departments into the key lines of business, and that following this morning’s meeting, the Administration will provide Council with detailed agendas for the remaining City Capital and City Operating Budget Study Sessions.
Overview
Presentation
Principal Budget Analyst Richard Desmond, with the use of a slide show, presented a comprehensive overview of the fifteen Capital Programs and described the 2002-2006 major funding sources, percentages and use of funding that include the sale of bonds, loans and transfers, beginning fund balances from prior fiscal years, fees and charges derived from construction taxes, revenues from other governmental agencies, and interest income and miscellaneous revenue. Referencing Construction Tax Revenues and the five-year revenue summary, he stated major construction-related revenues anticipated in the CIP – the Building and Structure and Construction Excise Taxes – are projected to decline from the levels achieved in the past few years, but not to the intensity experienced during the recession of the early 1990s. He stated the forecasted revenues have been increased from prior forecasts to reflect projections for a less severe decline in construction activity over the five-year period; these revenues primarily support the Traffic Capital Program. Describing the actual versus estimated tax distribution of Construction and Conveyance Tax, he stated the anticipated increase in C&C Tax collections reflects projections for a slightly less severe drop in the housing resale market over the next five-year period than was previously forecasted, which increases will have significant impacts on Parks, Library, Service Yards, Fire, and Communications programs. He stated the 2001-02 Capital Budget and percentages are allocated to transportation-related projects and the Airport, underground facilities, Municipal facilities, Parks, Fire, and Library projects. He stated a number of projects in the 2002-2006 Capital Improvement Program will result in significant additional operating and maintenance costs to the General Fund, and will be reflected in future General Fund Forecasts. Displaying artists’ renditions of some of the projects that have been completed or currently under construction, he described the various stages of development and the resources needed to complete the Tuers Golf Course, the Northside Community Center that will include senior housing and a community center at the ground level, the Route 87 and Taylor Street Interchange Fire Stations 30 and 31, numerous parks and trails, San José International Airport, the New Dr. Martin Luther King, Jr. Library, which is a collaboration between the City of San José and San José State University, the West Valley Branch Library, and the New San José Civic Center.
Mayor Gonzales acknowledged the excellent PowerPoint presentation by City Staff and the reality of the City’s goals and objectives depicted in the graphics, and asked Staff to include references to major neighborhood projects implemented during the past year and the projects in progress; and in the form of suggestions for next year’s Capital Budget, asked that Staff include a list of Council Priorities and cite projected completion dates of the projects.
RECREATION AND CULTURAL
SERVICES
Park &
Community Facilities and Library Capital Programs
Discussion/Action: Director of Parks, Recreation and Neighborhood Services, Mark Linder, Team Leader for the Recreation and Cultural Services City Service Area, joined by Library Director Jane Light, presented a comprehensive summary of the Park & Community Facilities Development Capital Program, which plans for and implements the acquisition, development and protection of parks, recreation facilities, and open space to maintain a high qualify of life in San José, and consists of seventeen funds including the ten Council District funds, a City-Wide fund for city-wide/regional facilities, and six special purpose funds. With the use of a PowerPoint presentation, Mark Linder characterized the CSA Vision as the results and outcomes of efforts and contributions to the City and its residents. He described the CSA Mission and discussed the efforts supported by investment proposals for the seven Outcomes – (1) Safe and clean parks, facilities, and attractions; (2) Vibrant learning and leisure opportunities; (3) Safe and successful youth and families; (4) Diverse range of arts and cultural offerings; (5) Seniors and persons with disabilities leading healthy and independent lives; (6) Healthy neighborhoods and capable communities; and (7) Services responsive to the 21st Century customer needs – totaling $107 million during Fiscal Year 2000-2001. He stated the Park and Community Facilities Development Capital Program has been developed in consideration of specific priorities utilized in coordination with Council Offices and client departments to rate, recommend, and schedule park and community facility developments, and assumptions that have been used in formulating the Park and Community Facilities CIP. In reviewing the Five-Year Goals of the CSA, he provided improvement examples and program outcomes to be realized; however, when completed, the projects included in the 2002-2006 CIP or planned by other agencies would have a significant impact on the General Fund Operating Budget, and do not reflect the progress toward service level objectives that would result from any future acquisition of park land and/or facilities for which a reserve has been established. He stated Measure P will provide funding over a ten year period for the renovation of 90 neighborhood park play areas and 28 park restrooms, expand nine community and senior centers and the City’s trail system, build two new sport complexes, enhance four regional park facilities, and implement improvements at Happy Hollow Park and Zoo.
Beginning at page 151 of the Library 2002-2006 Overview, Library Director Jane Light discussed library issues in the Capital Improvement Program and summarized the source and proposed use of funds – Construction and Conveyance Tax, Branch Libraries Bond Projects Fund, Benefit Assessment District funds, and the General Fund – and pointed out project highlights for the first year and beyond for the West Valley Library, the Blossom Hill Library, and the acquisition of land for all library site development. In reviewing some of the policy implications and successes of the Library projects, she stated the provisions of the Benefit Assessment District includes a 2004-05 sunset clause, after which a dedicated replacement source of funding will be required. Without the replacement source of funding for this major revenue source to the Libraries, she stated significant operational and capital expenses would have to be absorbed by the General Fund or major reductions would occur in the level of services. She stated expenditures for the furniture, fixtures, and equipment (FF&E) for the new Branch Library Bond projects are not eligible for bond proceeds; therefore, other funding sources will need to be identified. She stated C&C taxes are earmarked for materials, acquisitions, technologies, and automation, without which the needs of library patrons would not be met; therefore, to comply with 21st century library needs, Staff is proposing a new service model that will allow the Department to redeploy staff to direct public services and utilize technologies that better serve the community-at-large.
Park and Community Facilities Development Capital Program
Referencing page 197 of the proposed CIP, Mark Linder identified the primary sources and uses of funds that support the Park and Community Facilities Capital Program. Under the direction of the Parks, Recreation and Neighborhood Services, he stated the Program provides oversight of the planning and development for approximately 3,500 acres of regional/city-wide, and neighborhood community parks and open space within the City’s sphere of influence. In addition, he stated the City has plans for implementation of a 100-mile trails and greenways system that will provide a network of hiking, biking, jogging and equestrian trails along the Guadalupe River, Coyote and Los Gatos Creeks, and all major feeder streams. He stated the Five-Year CIP proposes more than $319 million for parks and community facilities construction projects, more than $87 million committed for projects and reserves for the first year, $153 million in bond proceeds, with the remaining bond projects to start beyond the five-year period, and will involve a number of steps that will include the following: (1) Two rounds of meetings with City Council Members and the Mayor’s Office in the Fall of 2001 for the purpose of enumerating issues proposed by constituents and checking those against various master plans; (2) developing recommendations that focus on the build-out and completion of various master plans; (3) reviewing the Greenprint Strategic Plan to ensure compliance; (4) continuing the cultivation of ongoing communication mechanisms with the City Council Members and the Mayor’s Office; and (5) pursuing potential grant opportunities to leverage existing resources.
With respect to the Five-Year CIP policy implications, he stated Staff plans to focus on program connections to the Strong Neighborhoods Initiative, to ensure implementation of the Greenprint Strategies with added focus on parkland and expanding community facilities as the City’s population increases. He stated Staff will utilize a delivery system which is neighborhood driven and multi-serviced that turns smaller recreation facilities into larger community facilities with various partnerships working together.
Because the Parkland Dedication Ordinance (PDO) provides 46% of the actual cost of the parkland needed for new residents, he stated PRNS Staff will be working with developers and residents in an effort to amend the PDO to allow for additional resources. He stated project highlights in the CIP include the animal shelter at Monterey and Umbarger, the first of 5 phases in the Master Plan Development of Kelly Park and Happy Hollow, Capital/Tuers Municipal Golf Course to be completed in 2001, Penitencia Creek entrance of Alum Rock Park and Trail, Quail Hollow Bridge replacement, one or more skate parks proposed for every Council District, design and construction of Northside Community Center, and the South Central Swim Center in District 7, which is scheduled for completion and use in 2002. As a point of information, he stated the Council-approved service levels in the General Plan have begun to materialize for neighborhood and community service parks – 3.5 acres per thousand population – and sufficient square footage for community centers.
In response to Council Members’ requests, the Administration to provide information applicable to the following: (1) Vice Mayor Shirakawa, Jr. noted his concerns regarding the order of priority for District projects and those funded by Measure P, and as projects proceed that Staff aggressively monitor construction schedules of all projects and make sure all capital projects receive the same level of attention. (2) Regarding District 2 Library projects and the expenditure of bond funds, Council Member Williams asked Staff to review and possibly revise the design and construction schedule for library facilities, to prepare a report on the implications of a shorter buildout for the projects included in the Bond Initiatives for the Libraries, and to include recommendations allowing for appropriate adjustments to be made for the Edenvale SNI areas. (3) Regarding Council Member Dando’s request for Staff to develop an ordering schedule for FF&E, City Manager, Del D. Borgsdorf stated the Administration is working on a plan for all capital projects ranging from the first library which opens in 18 months to the New Civic Center; within the first six months of FY 2002-03 the Administration will present to Council a strategy that concentrates on funding levels and sources. (3) Regarding Blossom Hill Library and Council Member Dando’s request for traffic improvements, the Administration was directed to formulate a plan with Streets & Traffic coordinating with Library Planning for the installation of appropriate safety mechanisms and the funds to implement and maintain those improvements. (4) Council Member Dando emphasized the importance for a master plan that would provide the guidelines for the City to accelerate the acquisition of portables and save money in the process, and the necessity of utilizing portables and modular units as temporary facilities to house materials and provide services during construction of permanent library facilities. City Manager, Del D. Borgsdorf, stated the Administration and the City Attorney’s Office have scheduled for Council consideration on May 15, 2001 amendments to various chapters and titles in the San José Municipal Code that would streamline existing City purchasing procedures and processes and make other technical changes affecting the purchases of supplies, materials, and equipment. Council Member Dando queried Staff on the status of funding for projects being discussed by the City Manager and the Water District and whether arrangements will include provisions that would allow common use of amenities and use of existing properties, and whether the City could accelerate the necessary improvements along the pathways. City Manager Del D. Borgsdorf stated the Administration has reviewed the list of projects with the Water District and is prepared to submit to Council a financing strategy for both agencies.
In response to Council Member Reed’s request for budget information on the Open Space Authority 20% Funding Program on page 207, and funding balances and designations, Mark Linder stated Staff will provide Council with those reports as individual projects are scheduled for approval by the City Council; and via the City Manager’s Office Staff will provide Council with additional information on funding for the City’s portion of development costs for the construction of a Youth/Community Center at George Mayne School. Regarding the various Park Youth/Tot Lot Renovations as referenced on page 422, Staff to provide Council with complete descriptions of the improvements to be made to the facilities. In response to Council Member Cortesé’s request for information on the budget dedicated to the submittal and settlement of claims resulting from fire damage involving City parks facilities and how the process works, City Manager Borgsdorf to provide Council with an informational report. Referencing page 397 and the Park Trust Fund Program, Council Member Reed asked Staff to provide Council with an explanation for the inadequate level of funding appropriated for completion of the trail and neighborhood improvements along the Penitencia Creek Park Chain. He referenced page 362, the list of Citywide Projects, and asked Staff to provide the reason certain projects are omitted in the first year’s budget, and the absence of details for project improvements. He asked Staff to provide Council with an informational report on the projects, including a description of the renovations and a summary for all the projects listed in the Program. Council Member Campos asked for an updated version of the information on page 259 with adjustments made as needed. In regards to Council Member Yeager’s concerns related to the decrease in funds for the acquisition of books per year, the proposed level of spending and the service level shortfall, and whether the projects can be accelerated to demonstrate to the community the City’s good-faith efforts or other strategies employed, Jane Light stated the adopted service level is greater in the number of items required; however, in terms of the number of items held per resident, the City is deficient. She stated the collection could be increased as the number of libraries is increased in the City, and the number of items will be increased commensurate with funding levels. As a possible remedy, she suggested the issue of operating costs to support the Library projects to be directly related to the Benefit Assessment District; that the addition of newer and larger collections, up-to-date technologies, and the staff to support those programs are increased; and to increase public outreach efforts to inform the community on the use of the City’s Library system, compared to the years preceding the passage of Measure O; and as a method of notifying patrons of the value they are getting from their $25 investment per parcel, Library Staff puts a sticker on each item purchased by Benefit District funds.
PUBLIC
SAFETY CITY SERVICE AREA
Fire Service
Capital Program
CSA Team Spokesperson Dale Foster, Assistant Fire Chief, introduced Deputy Fire Chief John McMillan, Director of Bureau of Support Services, and stated the CSA Team is comprised of the Police Department, the Independent Police Auditor, and the Office of Emergency Services; however, the Fire Department is the only member of the Public Safety CSA that receives significant and ongoing capital funding and has an ongoing capital improvement program. Using PowerPoint to make the presentation, he reviewed the objective of the Fire Department Capital Improvement Program (CIP), reviewed revenue highlights, and commented on the Fire Protection Strategic Plan, which analyzed the Fire Department’s current operations, and identified improvements necessary to provide the most effective and efficient emergency services to meet the City’s current and future needs. He presented a comprehensive overview of the Department, which included the response to more than 60,000 calls for service annually, Department facilities consisting of 31 fire stations, training center, administration and warehouse facility, support for 5 Battalions, 31 engine companies, 8 truck companies, 3 Urban Search and Rescue (USAR) companies, and 1 Hazardous Incident Team (HIT) dedicated to covering approximately 202 square miles, including 70 square miles of wild land. Regarding Capital revenue sources, he stated the Fire Department Capital Improvement Program is funded through revenue from Construction and Conveyance Tax (C&C), which is 8.4% of the proceeds and the sole source of dedicated funds for Fire Capital projects; however, in recent years it has become necessary to use General Fund to supplement funds from C&C to address the Fire Department critical capital needs, primarily for apparatus. He stated the two sources are anticipated to provide almost $21 million in the proposed 2002-2006 CIP, which is the highest in 10 years, and at best, serves as a limited resource. He stated future major funding for Strategic Plan projects might require a General Obligation Bond Measure, and developer funding for 2 new turnkey Fire Stations – Communications Hill and North Coyote Valley. He stated High Priority Projects recommended in the Strategic Plan are addressed in the Capital Improvement Program, and will require significant investment of funds by the City. He stated a comprehensive long-term financing strategy for projects will be submitted to the City Council later in this year, and will include recommendations for fully funded projects, partially funded projects, and long-term projects requiring a funding strategy and 2 new fire station for perimeter growth, 45 new fire stations for infill growth, and relocation of Fire Station Nos. 8, 9 as part of a combined strategy of a new station in the South Willow Glen area, 12 as part of the process of building a new station near Cottle and Blossom Hill, 17, 23, and 25, to improve distribution of resources. He described the Apparatus Replacement Program as one of the best fleets in the nation, and the replacement of fire engines, trucks, USARs, and other emergency response apparatus as now planned in accordance with the 1997 Council-approved Apparatus Schedule as part of the Public Safety Augmentation Plan.
He stated the Proposed CIP includes the majority of the funding from the General Fund for the Apparatus Replacement Reserve to supplement the C&C Funding for future apparatus replacements, more than $5 million for lease payments on previously purchased apparatus, and $1.7 million for facilities improvements. In reviewing “Other Capital Improvements”, he stated significant improvements have been made to numerous fire stations within the last few years in order to address significant repair or privacy needs for the Department’s mixed-gender workforce, that funding has been provided for the Training Center Master Plan to continue with the conceptual design, needs assessment, and the feasibility study; however, funding strategy has not been determined for the design and construction of the new Fire Training Facility. He stated future CSA projects currently under study include the Fire and Police Training Facilities, Citywide Driver Training Facilities, a second Police Service Center, and several Technology Projects. He stated the Fire Development needs to develop long-term funding strategy for remaining recommendations in the Strategic Plan, needs to maintain a master planning approach to address organization-wide projects, and must develop a revenue shortfall strategy. The CSA Team responded to Council’s inquiries and concerns and was requested to return with a report and recommendations on potential use of excess land for expanded fire station services and include plans for developing lands currently banked.
TRANSPORTATION
SERVICES
Parking and
Traffic Capital Programs
In the Introduction, Director of Transportation, Wayne Tanda, provided a description of the Vision of the Transportation Services CSA and acknowledged the teamwork of the six City Departments – Transportation, Public Works, Police, Aviation, Planning, Building and Code Enforcement, and Redevelopment Agency – and their achievement of the four Outcomes – Viable Choices in Travel Modes, Convenient Commute to Workplace, Efficient Access to Major Activity Centers, and Transportation Assets/Services That Enhance Community Livability – which render the transportation system vital to supporting economic development activities and a high quality of life for the community. With the use of a Power Point presentation, he pointed out the primary components contained in the Transportation Services Capital Improvement Program – Proposed Traffic and Parking Capital Improvement Programs – and provided explanations of the sources and use of funds organized by categories, including the Traffic CIP revenues history over the past 5 years. He stated the CIP is primarily funded by the use of proceeds from the Building and Structure Construction Tax and the Construction Excise Tax, both of which are on new development, and is supplemented by the addition of much smaller amounts of General Fund monies.
For each of the four Outcomes and the use of the Traffic Capital Improvement Program to achieve those Outcomes, he described each Performance Measurement, identified Proposed Budget Augmentations, and elaborated on Planned Actions, and provided a comprehensive summary of program highlights in each category. He stated the highest priority regional projects for the City of San José continues to be the upgrade to Route 87 to a freeway between Julian Street and Route 101, Route 880/Coleman, Route 880/Stevens Creek, and Route 101/Trimble Interchange, which will allow for the development of much needed improvements. He stated City Staff will continue to coordinate with Valley Transportation Authority the development of the BART extension to San José, CalTrain expansions and continue participation in the planning of new LRT corridor expansions. Noting the disparity between available resources and identified City transportation needs for both infrastructure development and maintenance, he stated the Recovery Plan for Street Maintenance is fully funded through fiscal year 2006; because the program is under-funded from year 2006 through 2010, Staff will develop a strategy to address the needs and return to Council with a report and recommendations.
Hans Larsen, Division Manager of Transportation Planning, and Jim Ortbal, Deputy Director of Parking & Administrative Services, responded to Council questions on parking and traffic issues. Referencing page 652 and the Program Description, Mayor asked Staff to provide in future budgets a better description of the actual work to be accomplished. Referencing page 673 and the activities performed by City Staff for the BART to San José project, Mayor Gonzales encouraged the Administration to provide ample staffing level, as the transportation projects provide for in Measure A, and take into consideration specific needs in the City of San José; however, he cautioned against the creation of a bureaucracy that would impede the progress of the project. On page 677, he suggested Staff monitor the facilitation of the annual program. Vice Mayor Shirakawa, Jr. expressed dissatisfaction with the order of priority for the median island landscaping improvements as itemized on page 598, and asked Staff to provide Council with a list of all sites Citywide. Council Member Reed asked Staff to provide Council with the reason Shellenberger Road was omitted from the list of Arterial Collector Construction Projects on page 611, and include descriptions of the medium island improvements for all the construction projects, and include additional descriptions of the Regional Projects listed on page 616.
Referencing page 596, Council Member Williams stated the funding level is inadequate for the Environmental Enhancements, Median Island landscaping, and asked Staff to appropriate additional funds to maintain the infrastructure. In response to Council Member Campos’ inquiry regarding the Underground Utilities Program on page 646 and the list of locations identified in the project descriptions, City Attorney J. Richard Doyle stated the Public Utilities Commission program was suspended by PG&E.
Mayor Gonzales stated the remaining CSA
Budgets would be presented on Thursday, May 10, 2001, at 8:30 a.m. The meeting
was adjourned at 11:55 a.m.
PATRICIA L. O’HEARN, CITY CLERK