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RECEIVE REPORT ON STRONG COMMUNITIES INITIATIVE AND PROVIDE DIRECTION TO STAFF ON EXPENDITURE PRIORITIES
recommended action
RECOMMENDATION
This item is for discussion only, no action is required. Receive an update to the Strong Communities Expenditure Plan and provide direction to staff on expenditure priorities.
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Summary
In November 2016 Stockton voters approved the Strong Communities Initiative (Measure M), a 16-year, ¼ cent special transactions and use tax to support Library and Recreation Services. Revenues began coming to the City in April 2017 and the City Council adopted expenditure priorities in August 2017. Since that time the City has seen several promises fulfilled including restoration of hours at Libraries and Community Centers, increases in Library and Recreation programming, design of a new facility and funding appropriated for several capital projects.
Staff indicated at the time priorities were adopted that the plan would continue to be regularly updated as actual revenues and expenditures are posted and as we refine project estimates. Staff has received updated forecasts for sales tax revenues, Long-Range Financial Plan variables, and Capital Project costs and incorporated them into the existing spending priorities.
Staff has also taken Council direction to provide more specifics on the future of aquatics programming and research the impacts of accelerating Library and Recreation services in Northwest Stockton. With this work complete, estimates show that revenues have decreased, operating costs have increased, and capital estimates have increased, requiring a reexamination of priorities. Staff is seeking Council direction to understand acceptable trade-offs for spending priorities in order to deliver on Strong Communities programs and projects, fit projected resources, and meet Council objectives.
Background
On November 8, 2016 Stockton voters passed Measure M, a ¼ cent special transactions and use tax to provide funding for library and recreation services for 16 years. Revenues were estimated at between $9 - $11 million annually. Revenues began coming to the City in April 2017 and the Council adopted the Strong Communities Expenditure Plan in August 2017 via resolution 2017-08-21-0801. Since that time several promises have been fulfilled including:
• Expanded Library and Recreation hours at all facilities
• Hired architect to design a new Library/Community Center in Northeast Stockton
• Initiated soccer and aquatics capital projects
• Brought Wi-Fi to Van Buskirk, Stribley, Arnold Rue and Oak Park
• Replaced Gym floor at Van Buskirk
• Made repairs to McKinley Community Center
• Remodeled Troke Library children’s room
• Renovation of Seifert courtyard
• Exterior paint and tile of Chavez Library
• Expanded Ultra Friday Nights recreation programming
• Added free coaches’ clinics
• Added free kids’ instructional clinics
• Introduced Mini-Movers
• Debuted digital activity guide
• Added new adult kickball, basketball and volleyball leagues
• Increased the number of free City special events
• Installed equipment for Live-streaming ESL class and other programs
• Opened the Arnold Rue Micro Library (with Stribley opening in February 2019).
Over the past few months staff have received new sales tax revenue forecasts, Long-Range Financial Plan updates and updates to CIP cost estimates. These were incorporated into the Strong Communities Expenditure Plan to determine the future financial outlook for City Library and Recreation programs.
Staff also prepared options for future aquatics programs and studied the impacts of accelerating Library and Recreation Services in Northwest Stockton per Council direction given during budget adoption in June 2018.
DISCUSSION
New projections for Strong Communities show revenues have decreased by $6 million, operating costs have increased by $3 million, and capital estimates have increased by $19 million. Operating projections include funding for approved Strong Communities positions, Maintenance of Effort obligations, Micro Library program, operating a leased facility for Library and Recreation services beginning in 2030, and support for after-school program costs.
Strong Communities Expenditure Plan Update 16-Year Summary
|
|
2017 Estimates |
Current Estimates |
|
Estimated Funding |
$188,700,000 |
$182,600,000 |
|
Estimated Operating Expenses |
$145,100,000 |
$147,000,000 |
|
Funds Remaining |
$43,600,000 |
$35,600,000 |
|
|
|
|
|
Program Needs: |
|
|
|
Northwest Services (accelerated to 2027) |
|
$1,500,000 |
|
Estimated Planned Capital Expenditures |
$44,600,000 |
$64,388,000 |
|
|
$44,600,000 |
$65,388,000 |
|
Shortfall |
$(1,000,000) |
$(30,288,000) |
Capital estimates are significantly higher than last year. Reasons for the increase include escalation of construction costs, amended project scopes, and new projects officially added to the CIP budget. Projects that have seen the most increased costs are Northeast facility, Aquatics Renovations, Chavez Library Renovation and McKinley Park Facilities Upgrades.
Using the new projections staff also followed Council direction and prepared options for aquatics programming and studied the impacts of accelerating Library and Recreation services in Northwest Stockton.
Aquatics
In the current Strong Communities Expenditure Plan, Aquatics has a $6.2 million capital allocation. This estimate was based on repairs and improvements to all aquatics facilities, but no new construction. In prior Council discussions staff agreed with Aquatic Design Consultants’ recommendations to create a regional aquatics complex at Oak Park, a new four-lane pool with interactive water feature at McKinley Park and a sprayground feature at Victory Park.
In light of new projections, it would cost a total of $11 million to deliver these aquatics projects, $5 million above the current allocation. An increase of this magnitude would jeopardize other important spending priorities.
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Current Recommendation (CIP Allocation of $6.2M) |
|
McKinley |
New Interactive Pool |
$ 3,913,997 |
|
Victory |
Small Sprayground |
$ 1,533,604 |
|
Oak Park |
Aquatics Complex |
$ 5,722,216 |
|
|
|
$11,169,817 |
|
|
Difference |
$(4,947,817) |
Staff recommends increasing the allocation by $1 million to $7.2 million and pursuing one of three options to address community needs and reduce project costs. Although two options still show a shortfall, these could be made up by reducing the scope of other projects or pursuing grant funds such as State Proposition 68 funds. Any new facility that is added will require ongoing operating costs for maintenance and operations. New pools are estimated at a minimum of $50,000 each annually with spraygrounds being less. These costs will need to be factored into the Expenditure Plan once an option is selected. The design process for the first new facility would take place during 2019, with construction completed by the end of 2022. Remaining projects would occur sequentially to allow enough funds to accrue to cover project costs. With any of these options there would be no funds for any replacement pools at other City locations. These would continue to be maintained and repaired as needed but no improvements would be made.
In considering these options the question is whether there should more centralized approach to aquatics with a multi-amenity complex, a more distributed approach, or a hybrid of the two:
New Recommendation (CIP Allocation of $7.2M)
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Option 1 |
|
Option 2 |
|
Option 3 |
|
|
Small Sprayground-Victory |
$ 1,533,604 |
6 Lane Pool-Victory |
$ 3,440,340 |
6 Lane Pool -McKinley or Victory |
$ 3,440,340 |
|
Small Sprayground -McKinley |
$ 1,533,604 |
6 Lane Pool-McKinley |
$ 3,440,340 |
Medium Sprayground - McKinley or Victory |
$ 2,033,934 |
|
Aquatics Complex-Oak Park |
$ 5,722,216 |
Repairs and Heater-Oak Park |
$ 1,000,000 |
Repairs and Heater-Oak Park |
$ 1,000,000 |
|
|
$ 8,789,424 |
|
$ 7,880,680 |
|
$ 6,474,274 |
|
|
$ (1,567,424) |
|
$ (658,680) |
|
$ 747,726 |
Northwest Library and Recreation Services
With estimates showing a decrease in expected revenues and an increase in operating costs over the lifespan of Strong Communities, any acceleration of Northwest services is challenging. If this is a Council priority, staff recommends moving up the date no more than three years to 2027, with the understanding that the $1.5 million in costs would require a corresponding reduction in other priorities. Simultaneous capital projects will occur over the next several years and moving up another priority any earlier will strain resources and capacity. Strong Communities funds are spent as they accrue, and some projects must occur later in the measure than others by virtue of this fact. At the end of Strong Communities, the General Fund would need to absorb operating costs.
Present Situation
Projections for the Strong Communities Expenditure Plan indicate lower revenues, higher operating costs, and higher capital costs requiring revisions to address the new realities. The revised Recommended Strong Communities Expenditure Plan seeks to create a balanced, affordable and deliverable set of projects that adhere to Strong Communities guiding principles:
• Restore Services
• Priority for programs and projects that have high community benefit
• Wherever possible, improve existing assets
• Focus on underserved areas
• Leverage partnership and funding opportunities.
Strong Communities Recommended Expenditure Plan 16-Year Summary
|
|
2017 Estimates |
Current Estimates |
|
Estimated Funding |
$188,700,000 |
$182,600,000 |
|
Estimated Operating Expenses |
$145,100,000 |
$147,000,000 |
|
Northwest Services (accelerated to 2027) |
- |
- |
|
Estimated Planned Capital Expenditures |
$44,600,000 |
$37,466,000 |
|
Shortfall |
$(1,000,000) |
$(1,866,000) |
Key Plan Recommendations:
• Increasing the aquatics allocation to deliver an acceptable program
• Eliminating Park Sport Field Lighting Repairs priority
• Eliminating Playground Replacement priority
• Moving the Library Radio Frequency Identification project to “wait list” status if other funds become available
• Moving up the Chavez Library renovation priority
• Delaying the McKinley Park Facilities Upgrade priority
• Placing Regional Sports Complex priority on a “wait list” if other funds become available
• Allocating $1 million for basic recreation improvements should Van Buskirk Golf Course cease operations
• Substituting construction of a Northwest facility with a leased building and moving up start date for services three years to 2027 from 2030; construction of a new facility would be considered if additional funds become available.
Recognizing the need to maximize resources, staff is also pursuing several strategies including:
• Finding ways to reduce costs for the Northeast facility
• Re-scoping other projects to provide a smaller set of key improvements
• Aggressively pursuing state funds from Proposition 68, a need-based program providing up to $8.5 million per project for recreation and park improvements in underserved areas
• Seeking partnerships with other agencies.
FINANCIAL SUMMARY
This is an informational item only and staff is seeking council direction on the recommended Strong Communities Expenditure Plan. Council direction will be incorporated into the Expenditure Plan and will be presented for approval during the FY 2019-20 budget adoption process.