Boise City Mayor s Budget Team Recommendations

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1 Boise City Mayor s Budget Team Recommendations To: Subject: Members of the City Council Mayor s Budget Team Recommendations for the January 28, 2004 meeting The MBT reviews proposed changes in the approved budget. The interim budget process is documented on the City web site under the Mayor s Budget Team menu selection Detailed back up information is usually available for agenda items. All items requiring approval by the City Council are approved by the Mayor and separately transmitted to the City Council agenda for action. All allocations by the City Council of the City tax funds contingency account are shown on the web site. Meeting Attendance: Mayor Bieter, Jade Riley, Alec Andrus, Roger Cockerille, Jim Hall, Don Pierce, Steve Purvis, and John Walhof. Others participating: Mike Odell, Airport; Greg Whyte, IT; and Heather Mink, Denise McNeley, and Tonya Wallace, Budget Advisors. 1. Parks and Recreation: Request for approval of $20,000 expenditure increase in the Shaul property disposition capital project, offset with property sale proceeds. Request: This request is to increase the Shaul property disposition capital project by $20,000 for expenses offset by $700,000 of property sale proceeds related to the auction of the property, which has been declared as surplus. The Issue: In the FY 2002 and FY 2003 Two Year Budget, the City Council directed purchase of two branch library sites one in the southeast and one on the west bench. When the actual purchases were finally consummated, the purchase price of the Cole and Ustick, West Bench branch library site exceeded the budget for both purchases. The O Neills allowed the City to reduce the size of the lot for the southeast branch library site and redesigned their development. That reduced the price for the site by about $500,000. The down payment was made in FY 2003 leaving a balance of about $880,000. The City Council asked staff to provide recommendations to bridge the gap. The Library Foundation and the Friends of the Library came up with $200,000 leaving a balance of about $680,000. As a possible solution to the funding gap, Jim Hall, Parks and Recreation Department Director, offered the suggestion to City Council that proceeds from the sale of the Shaul property be used to cover the shortfall for the Bown Crossing branch library site. City Council agreed to designate the proceeds from the sale for the library use and directed that Parks and Recreation be reimbursed for the amount from future land sale proceeds. Background on the Shaul Property: In FY 2000, the Shaul property (19.22 acres) was acquired through an exchange agreement with the Ahaveth Beth Israel for 5 acres of property at Morris Hill Cemetery. Later in FY 2000, BPR acquired the adjacent 66 acres from the Jensen family as a substantial donation. The Jensen property was subsequently designated as the Pearl Jensen Community Park. Therefore, the Shaul property was no longer required to meet the Parks Comprehensive Plan standards for park property in that area. As a result, in FY 2003, the 1

2 City Council declared the Shaul property to be surplus. The surplus parcel has been reduced to 18.3 acres by sale of an out parcel to United Water to allow the construction of a new water system to the development. On December 16, 2003 Council approved Resolution #17960 for Realty Marketing Northwest to auction the property, which will include a sealed qualifying process followed by a live auction of qualified bidders. The property appraised at $680,000. The Parks and Recreation Department anticipates that the property will be sold for development of multi-housing/residential housing. If the property does not sell at auction, RMNW will market it as the City s agent. The department has received a number of phone calls from interested buyers. They have not received any calls from citizens expressing concerns about the sale. Ted Baird in Legal is working with the department to ensure that the auction complies with State law. As an aside, the Library staff and Board have expressed their great appreciation to Jim Hall and to the Parks and Recreation Department for their gracious and collegial offer of the proceeds of the sale of this land to benefit the branch library program. They have also strongly supported the notion of refunding the amount to the Parks when other surplus land is sold. Budget Office Review: The Budget Office considers this a relatively routine request. The decision to use an external agency to promulgate the auction sale was based on the conclusion that the City would receive a better return. It was done with an understanding that the auction agent would have some fee. This request recommends that City Council document approval of the cost of the auction agent. The estimated cost of $20,000 is based upon negotiations and is variable only to the extent of the various costs of disposition and recording. A reconciliation of the actual expenses incurred and actual proceeds received after the sale will occur between the Budget office and BPR. Fiscal Impact: The $20,000 expenditure increase will reduce the land sale revenue proceeds. The sale was estimated earlier at $680,000 based upon a per acre price of about $38,000. The Parks staff report that they have some hope that the sale price will exceed that amount. If the sale price exceeds $700,000, the full amount budgeted for the Bown Crossing library branch site will be achieved. If the sale price is less, the difference will be needed to fund the branch purchase. Any balance beyond $700,000 can be allocated by the City Council. The Budget Office would suggest that, if that were to occur, the balance could go to the parkland acquisition account. That would recycle money that was earlier approved for parkland acquisition. If the highest offered purchase price is less than $680,000, the City can reject the offers and market the land in any efficient manner deemed reasonable by the City Council. MBT Recommended Action: Approval of a $20,000 expenditure budget for the Shaul Property capital land sale project with an offsetting revenue account from sale proceeds of $680,000. 2

3 2. Parks and Recreation: Clarification of the amount of the Capitol Boulevard Streetscape capital project. Request: This request is intended to clarify and document in the FY 2004 budget the approved Capitol Boulevard Streetscape project budget of $550,000 offset by $495,000 in grant revenues. To do so, an increase of $25,000 is required. Background: Grant funding for the Capitol Boulevard Streetscape beautification capital project was requested in FY 2001 with a projected construction phase to be completed in FY The requested project budget was $550,000 with a $55,000 (ten percent) local match requirement. On May 1, 2002, the City Council accepted the federal Transportation Efficiency Act (TEA-21) grant funding for Capitol Boulevard Streetscape capital project. The project was approved and managed administratively by the Idaho Transportation Department. The grant match was not budgeted and City Council directed staff to provide alternatives to fund it. The strategy followed was to fund the match in increments. In FY 2002, Parks recommended transfer of $7,000 from the land acquisition account to the project to fund the local match for the project engineering ($4,000) and for the ITD administrative down payment to ITD ($3,000.) In FY 2003, ITD provided the grant amount for the engineering work. On January 28, 2003, City Council approved a transfer of $8,000 from the Mayor s contingency account for the next portion of matching funds. In the FY 2004 and FY 2005 Two Year Budget development (CIP) process, the balance of the match required was approved by the City Council. However, only $470,000 was requested for the construction phase of the project. That amount, due to an administrative oversight, was short by $25,000 of the required total (life of the project) budget of $550,000. To correct the oversight, a budget increase of $25,000 is needed, offset by grant revenue. Budget Office Review: The Budget Office suggests that the record be clarified and that the budget increased for the project budget. The timing for TEA-21 grant funded projects is typically attenuated and because it crosses several fiscal years, the project budget total may be susceptible to inadvertent change. This project was broken into phases and the recommended amount in the FY 2004 budget has proven to be short. The mechanism of grant review provides an assurance that an issue such as this will be reconciled. The City Council did approve the total project budget of $550,000 and allocated the $15,000 in local match in FY 2002 and FY The construction phase is now timely and in the reconciliation, the Park staff recognized that the City appropriation for the project is short. Budget considers this an unfortunate tracking error in the year-to-year appropriation but it has not slowed the project and has not affected the City s ability to complete the project or to meet ITD standards and requirements. 3

4 Fiscal Impact: The total life of the project budget is unchanged and remains at $550,000. The City s local match has been properly budgeted and the balance of the match needed for the project is available. An appropriation increase of $25,000, which will be offset by the TEA-21 grant funds, is needed to allow the City to complete the project and to capture the grant funds available. MBT Recommended Action: Approval of an increase of $25,000 in the Capitol Boulevard Streetscape project, offset by TEA-21 grant funds, to reflect the total project budget of $550,000, which was approved by City Council on May 1, Airport: Commercial Shuttle Ordinance Revisions Request: Airport is requesting approval of revisions to the Airport shuttle ordinance approved in FY Background: In FY 2003, City Council adopted revisions to the Airport shuttle ordinance (Title 12, Chapter 19, of the Boise City Code). The original revisions included: 1) expanding the definition of shuttles, 2) increasing the permit fee for courtesy shuttles, 3) decreasing the trip fee for revenue shuttles, 4) changing the annual permit fee for revenue shuttles based on the vehicle passenger load, 5) limiting dwell time in the shuttle lane, 6) modifying the renewal dates for shuttle permits, 7) limiting the number of shuttles from the same company in the shuttle lane, and 8) requiring shuttles to have pre-booked passengers. After operating under the new ordinance, Airport has determined that a situation occurs that is not covered in the ordinance. To correct the problem, Airport is proposing the addition of a $10 day shuttle permit that would be valid for 24 hours after issuance. This change will place shuttles that occasionally use the facility (for example, a charter shuttle for a single event) on the same basis as those that regularly use the airport (for example, hotel shuttles.) Budget Office Review: The added user fee will generate additional revenue for the Airport, but not enough to require an increase in the revenue appropriation. This item requires City Council approval because it is adding a user fee to the ordinance. A noticed public hearing will be required to adopt the new fee. Fiscal Impact: Airport estimates that the changes to the fee schedule will generate a small amount of additional revenue in the Airport fund; however, no additional appropriation is required. MBT recommended action: Approval of the additional day shuttle permit fee, contingent upon completion of necessary public hearing requirements. 4. Information Technology (IT): Spam Blocking Software. Request: IT requests a based increase of $6,900 in FY 2005 for the maintenance cost of spam software. 4

5 The Issue: This request has been accelerated to take advantage of a price break for spam blocking software and the associated maintenance contract. The total cost of the selected software and a one-year maintenance contract is $15,048. However, if the City were to commit to acquiring the software before January 31, 2004, the City would receive the software free of charge and only be required to purchase the maintenance contract for $7,200. IT has agreed to fund the FY 2004 contract cost of $7,200 from their EOY turnback monies. However, since these funds are one-time in nature, they are requesting approval of a base increase of $6,900 in FY 2005 for the continued maintenance. Background: Currently the City receives an estimated 10,000 unwanted s a week, advertising everything from lower insurance rates to highly objectionable graphic adult content. The number of viruses attached to the software has often been significant. Failure to catch them can be extremely costly in time and productivity. Last fall, the IT Division established a multidepartmental committee to study the issue and recommend a solution. The Spam Committee concluded three issues regarding spam lost productivity, security, and potential liability. Regarding productivity, the Spam Committee, based on a recent study, estimates that if it takes City employees just three seconds to deal with these s, the City is losing about 8 hours of productivity a week. The Spam Committee contends that the problem is accelerating at an increasing rate, and if solved programmatically, that the City can regain that productivity permanently. Another issue is security, in that the primary avenue computer viruses find their way into the City is through attachment to spam messages. Therefore, the IT Division believes that stopping spam provides a more secure and productive network. Human Resources and Legal believe it is essential for the City to provide control of spam. They fully support this request. IT has worked on a proposal to control spam for some time. They recommend this solution. The ITAT discussed the proposal at their January 13 meeting and recommended approval by the MBT for the funding for this solution. The software provides both spam control and antivirus protection within the GroupWise system. The issue of spam is a national and international issue and legislation and other methods to limit spam are now being considered in Congress. If successful, perhaps the need for this software could be lessened. It is unlikely that it will be eliminated in the near future. Budget Office Review: This item is brought before MBT now due to the timing and the ability to save the City $7,848. The issue has been identified by IT, the ITAT and by many staff members as a significant problem (e.g., because of lost productivity, potential security breaches, and potential litigation.) This request requires City Council approval since the purchase results in a base cost increase. 5

6 Fiscal Impact: The FY 2004 costs will be covered within current allocations (end of year turnback) in IT. The FY 2005 cost is a base cost increase. Because of the limited base funding available, the priority of the SPAM software is a key question. Funding would be provided through the unallocated balance, which was about $500 thousand when last reported to City Council in November MBT Recommended Action: Approval of a base funding increase of up to $6,900 in FY 2005 for the Information Technology division for maintenance of anti-spam software for the City network. 5. Information only: Contingency account report: The FY 2004 budget included $380,000 in the funded contingent account in the General Fund. On December 9, the City Council transferred $89,493 to the account. City Council allocations of the account to January 26th total $114,855, leaving a balance of $354,638. Details of allocations are published on the intranet in the MBT documentation site, which may be accessed at Select the Mayor s Budget Team on the left menu and then the Contingency Account on the list of MBT documents. A PDF file will be displayed with contingent account actions throughout the fiscal year. Approved: David H. Bieter Mayor 6