To:   HONORABLE MAYOR AND                    From:   Citizen Oversight

                        CITY COUNCIL                                                          Committee for the Public

                                                                                                              Safety Bond Program

 

   Subject:   See Below                                                    Date:     November 12, 2003

 

SUBJECT:    ANNUAL FINANCIAL STATUS REPORT ON THE NEIGHBORHOOD SECURITY BOND PROGRAM FOR FISCAL YEAR 2002-2003

 

 

RECOMMENDATION

 

Approval of this report on the neighborhood security bond program.

 

 

BACKGROUND

 

At the City’s general election held on March 5, 2002, voters approved Measure O (2002), San José 911, Fire, Police, Paramedic and Neighborhood Security Act, authorizing the City to issue general obligation bonds up to $159,000,000.  As part of the bond requirements, the City established a Citizen Oversight Committee (COC) to conduct an annual public hearing and prepare an annual report informing the Council and the public of the appropriateness of bond expenditures, the progress of the various projects, and the results of the annual audit on or before December 31st of each year.

 

On May 29th and August 6th of 2003, the COC for the Neighborhood Security Bond program met with staff to review quarterly expenditures of the projects included in the Neighborhood Security Bond Measure approved by voters in March 2002.    On November 12, 2003, the Citizen Oversight Committee conducted a public hearing regarding the yearly expenditures for fiscal year 2002-2003. City staff presented information to the Committee regarding the appropriateness of bond expenditures and the progress of the various projects. At that same meeting, staff from the Finance Department presented the results of the annual audit.

 

This report to the Mayor and Council provides an update on the status of the Neighborhood Security bond projects at the end of its first fiscal year (2002-2003).

 

 

PROJECT STATUS

 

During the first fiscal year of this bond program, City staff and consultants working on the Neighborhood Security bond projects have been focused on several key activities in parallel. 

For several new and relocated fire stations, the Police Substation, the Fire Training Center as well as the West Community Policing Center, City staff has focused on site selection to facilitate site acquisition at the earliest feasible date.  Public Works, Fire and Police staffs are working closely with Council Districts, the City Manager’s Office, the Redevelopment Agency and Planning Building & Code Enforcement Department to identify appropriate sites.  Discussions with the owner of site under consideration for the Police Substation have begun, while a site for the West Community Policing Center has been identified and is in the process of being purchased.   For several of the new/relocated Fire Stations, Fire Department staff has identified multiple sites for consideration. Where opportunities for donation of private land are evident, as in the case of Fire Station 25 in Alviso, staff is working diligently toward that goal.   For several of the relocated stations, Fire is exploring purchase of private parcels as well as options on existing city owned lands.  For all of these scenarios, staff continues to develop conceptual site designs and complete preliminary planning reviews to assess the projects’ suitability for each of the proposed sites.

For the first five fire station upgrades, staff’s focus has been on scope determination, design and subsequently on production of construction documents. (i.e. plans & specifications).  As of this report, for the first three fire station remodels’ construction documents have been completed, put out to bid and awarded.  Construction has commenced on Fire Stations 4 & 13 and is scheduled to begin for Fire Station 26 in early December 2003. 

 

Of the four community policing center (CPC) projects in the Safety Bond Program, two were active in fiscal year 2002-2003.  As of this memo, an offer for a property for the West CPC has been delivered to the owner while beneficial occupancy of the Central CPC has been achieved.

 

 

PROJECT FINANCING, REVENUE AND EXPENDITURES

 

A total of $39.38 million in General Obligation (GO) Bonds have been issued to fund safety bond projects through 2003-2004.  In addition to the $39.38 million in bond revenue, interest earned as of June 30, 2003-totaled approximately $1,285,080 for total revenue of $40.66 million.  Through June 30, 2003, approximately $2.67 million of these bond funds had been expended or encumbered.  The City expects to issue additional GO bonds under the Security Act Bond authorization over the next five to six years.

 

The table below shows the total expenditures and encumbrances as of June 30, 2003 for Neighborhood Security Bond projects. 

 

 

 

Bond Proceeds
& Interest

Expended/Encumbered

Through June 30, 2003

 

Balance

Neighborhood Security Bond

$     40,660,080

$  2,674,336

$  37,985,744

 

 

CONCLUSION

 

For the 2002-2003 fiscal year there were thirteen active projects that incurred expenses and/or encumbrances.  Of these thirteen, one (the Central CPC) has been completed.  The design and bid phases for three of the fire station upgrades were completed in FY 2002-2003, were award in the first quarter of 2003-2004 and are currently under construction.   The number of active projects in the current fiscal year (2003-2004) has increased from thirteen to twenty one, which will result in accelerated expenditures.   Staff will continue to provide quarterly updates to the Citizen Oversight Committee on the status of the projects and their expenditures as they progress.

 

The Committee is concerned that since several of the Neighborhood Security Bond projects are currently in the land acquisition phase, it has limited ability to validate the cost effectiveness of expenditures on this activity at this time.  Committee members anticipate reviewing expenditures upon completion of acquisition, and will reexamine expenditures at that time.

 

 

CEQA

 

Not a project.

 

 

PHYLLIS LAZZARINI

Chairperson

Public Safety Bond – Citizen Oversight Committee