Page 2 of 9 project costs are included in the budget consistent with the adopted Measure C and Measure J Strategic Plans. Below is a summary of the FY

Transcription

1 Meeting Date: Subject Summary of Issues Recommendations Financial Implications Options Attachments (See APC Packet dated 3/1/18) Changes from Committee Approval of FY Midyear Budget for the Contra Costa Transportation Authority (CCTA) and Congestion Management Agency (CMA) The Authority annually approves a midyear budget to adjust estimates in the original budget as-needed to accomplish goals through the end of the fiscal year. Overall, the midyear budget proposes a reduction in the Authority s budget from $184.5 million to $181.2 million, a decrease of $3.3 million. The adjustments are largely due to revised project schedules and the timing difference between expenditures and related reimbursements from other agencies. Staff seeks approval of Resolution A (Rev 1), which will update changes to the FY budget. Summarized below. N/A A. FY Midyear Budget, Exhibits 1 through 9 B. Resolution A (Rev 1) At the APC Meeting, the APC accepted staff s report on the revisions to the FY Midyear Budget. The APC requested clarification of the debt service budget estimate to be included in the staff report. Background The Authority s adopted budget is a fiscal plan of revenues and expenditures for the fiscal year July 1, 2017 to June 30, 2018 (FY ). The budget includes the annual operating costs for programs, project management, administrative functions, as well as regional planning, congestion management, and transportation demand management activities. Annual capital 2.A.9-1

2 Page 2 of 9 project costs are included in the budget consistent with the adopted Measure C and Measure J Strategic Plans. Below is a summary of the FY adopted budget and the proposed midyear budget, including revenues, expenditures and other financing sources. The difference between revenues and expenditures are funded from bond proceeds and other sources. The category of other sources includes Measure C and Measure J revenues from prior fiscal years earmarked specifically for projects and programs in the current fiscal year. Sources: Original FY 2018 Midyear FY 2018 Change Sales Tax Revenues $ 86,500,000 $ 86,500,000 $ - Federal Revenues 2,124,000 2,226, ,633 State Revenues 4,467,515 7,530,815 3,063,300 Local Revenues 17,699,858 7,202,462 (10,497,396) Investment/Other Income 1,252,000 1,402, ,000 Bonds Proceeds 39,899,496 43,869,158 3,969,662 Other Sources 32,565,271 32,515,198 (50,073) Total Sources $ 184,508,140 $ 181,246,266 $ (3,261,874) Uses: FY Budget - Midyear Projects Section $ 95,661,909 $ 89,395,209 $ (6,266,700) Programs Section 46,358,438 48,296,035 1,937,597 Planning Section 3,460,131 3,531,139 71,008 Administration Section 2,097,312 2,145,983 48,671 Debt Service 36,930,350 37,877, ,550 Total Uses $ 184,508,140 $ 181,246,266 $ (3,261,874) Brief Description of Major Line Items and Proposed Changes The FY midyear budget details both expected revenues, expenditures and other financing sources and uses, as follows: Sales Tax Revenues No adjustments are being proposed. The original budget of $86.5 million represents an increase of 1.6% compared to the actual amount received in FY of $85.1 million. Actual revenue received for the first six months is $46.6 million, an increase of $2.8 million (6.5%) over the 2.A.9-2

3 Page 3 of 9 prior year during the same period. Current sales tax revenues show improvement in the construction and heavy equipment, retail, restaurant, and service station sectors. Investment Income Revenues An increase of $150,000 on the 2017A bond proceeds to reflect increased investment returns. Federal, State and Local Grant Revenues A total decrease of $7.3 million to $17 million is proposed, including: - Increase of Regional Measure 2 (RM2) revenues by $400,000 to $4.3 million due to the receipt of reimbursements on the following projects: Increases of $500,000 for the State Route 4 (SR4) East Widening Somersville to SR160 and $1.5 million for the SR4 East Widening Loveridge projects for final construction phase billing. Decreases of $1.6 million on the Interstate 680 (I-680) Carpool Lane Completion project to reflect the latest project schedules. - Decrease of East Contra Costa Regional Fee and Finance Authority (ECCRFFA) revenues by $8 million for the Balfour Road Interchange to reflect the second amendment of the ECCRFFA contract, which utilizes Measure J funding commitments prior to billing for the ECCRFFA reimbursement. - Decrease of Bay Area Toll Authority (BATA) revenues by $2.9 million on the I-680 Carpool Lane Completion project to reflect the latest project schedules. - Increase of State Transportation Improvement Program (STIP) revenues by $1.7 million on the I-80/San Pablo Dam Road Interchange to finalize the construction billing reimbursement. - Increase of State funds revenues by $1.35 million related to the new funding agreement connected to expanding autonomous vehicle testing. Bond Proceeds The Authority issued the 2017A sales tax revenue bond in June of 2017 generating $100 million in bond proceeds. These funds will be utilized in the current and future fiscal years for capital 2.A.9-3

4 Page 4 of 9 projects. Issuing bonds is essential to accelerate project delivery compared to pay-as-you-go financing that otherwise would require many years to accumulate the resources necessary to fund large projects. Based on the current project projections and timing of reimbursements, $43.9 million will be used to fund the designated projects. Other Sources These other sources are the constant accumulation of sales tax revenue collected in prior years programmed to specific projects and programs as outlined in the adopted Measure J and Measure C strategic plans. The funds are tracked and restricted specifically for carrying out the particular project or program. The FY projects, planning and programs have sufficient resources available to fund these planned expenditures. The timing of these expenditures by categories can fluctuate from year to year and in some cases the revenues can exceed the current year allocations. Based on the revised expenditure plans, Measure J is projected to utilize $21.5 million and Measure C will utilize $11 million. Expenditures Expenditures are categorized by section, including Projects, Programs, Planning, Administration and Debt Service. In total, the midyear budget proposes a net decrease of $3.3 million to $181.2 million. Adjustment by section includes the following: Project Section Decreased $6.3 million to $89.4 million. The following table explains the major changes to annual project expenditures: Project Category Budget Adjustment Reason for Adjustment Caldecott Tunnel Fourth Bore (CIP1/9625) BART East County Connection Rail Extension (CIP2/9626) $1,065,141 $2,019,510 MEASURE J An increase in this fund category is due to anticipated faster progress on settlement projects for the Caldecott Tunnel Fourth Bore (Project 1001). An increase in this fund category is due to some additional construction management work on the East Contra Costa Rail Extension (ebart) 2.A.9-4

5 Project Category Budget Adjustment Administration and Projects Committee STAFF REPORT Page 5 of 9 (Project 2001). Reason for Adjustment SR4 East Widening (CIP3/9627) Capital Corridor Station Improvements (CIP4/9628) East County Corridors (CIP5/9629) I-680 & SR242 Interchange Improvements (CIP6/9630) I-80 Corridor (CIP7/9631) I-680 Corridor (CIP8/9632) Richmond Parkway (CIP9/9633) $1,681,621 $991,909 ($4,653,475) ($1,034,285) $2,263,197 ($7,061,175) $491,000 An increase in this fund category is due to accelerated design effort for landscaping on the SR4 East Widening: Somersville Road (Project 3001). An increase in this fund category is due to the completion of the path to transit construction part of the Hercules Rail Station (Project 4001). A decrease in this fund category is due to construction timing for the SR4 Balfour Road Interchange, Phase 1 (Project 5005). A minor decrease in this fund category is expected due to somewhat slower progress on the environmental clearance phase for the SR4 Operational Improvements (Project 6006). An increase in this fund category is mainly to reflect some cost increases for the construction timing of the I-80/Central Avenue Interchange Improvements (Project 7003). A decrease in this fund category is to reflect the latest schedule for the express lane in the Southbound (SB) direction of the I-680 Carpool Lane Completion/Express Lanes (Project 8001). An increase in this fund category is due to additional work completed on the installation of the signal interconnect for the Richmond 2.A.9-5

6 Project Category Budget Adjustment Administration and Projects Committee STAFF REPORT Page 6 of 9 Reason for Adjustment Parkway Maintenance/Upgrade (Project 9002). Subregional Major Street Improvements (SPP24/9648) Subregional Major Street Improvements (SPP27/9651) BART Improvements (CCMP 10/9634) I-680 Corridor (HAA1/9551) Major Arterials SW Region (HAA6/9556) ($2,510,329) $2,043,704 ($941,667) ($957,647) $360,000 A minor decrease in this fund category is due to the timing associated with several projects to be completed by the local municipalities. An increase in this fund category is due to the timing associated with construction of a project related to the Capitol Corridor Rail Station Improvements at Martinez (Project 27001). A decrease in this fund category is expected mainly due to slower expenditures on the BART Parking, Access and Other Improvements Southwest County: Lafayette BART Improvements (Project ). Measure C A decrease in this fund category is due to slower progress on the Pacheco Boulevard Widening (Project 1216) in Martinez and the I-680/SR4 Interchange (Project 1117). An increase in this fund category is due to the accelerated construction schedule for the Danville Various Streets & Preservation (Project C1723). Programs Section Increase of $1.9 million to $48.3 million - Programs are allocated based on the Expenditure Plan and provide funding for a range of programs from Bus Services, Commute Alternatives, Paratransit, Local Streets and Roads, Transportation for Livable Community Project Grants (TLC), Pedestrian, Bicycle 2.A.9-6

7 Page 7 of 9 and Trail Facilities (PBTF), Express Bus and Safe Transportation for Children. Staff worked with the participating jurisdictions to update the timing of expenditures and several budgets were revised to reflect current allocations and commitments for various programs (i.e. Bus Services, Express Bus, Safe Transportation for Children, etc.). - A new special revenue fund has been created to isolate program expenditures related to the funding agreement between the State of California and the Authority. The total agreement is for $3.5 million and will be utilized over a three-year period. The agreement will fund the expansion and development of GoMentum Station. The appropriation will support planning, operations, and construction at GoMentum Station. Planning activities include program management, regulatory approvals, research and development, and application development. Projected expenditures between now and the end of the fiscal year are projected to be $1.35 million and offset by equal matching funds by the State. Planning Section Increase of $71,000 to $3.5 million - Decrease of $10,000 to reflect current salary and benefit allocations. - Increase of $120,000 to reflect the current contracted services associated with growth management, action planning and monitoring and project modeling. - Decrease of $40,000 to adjust current consulting estimates on costs related to the Sustainable Communities Strategy (SCS) Implementation, Priority Development Area (PDA) and Investment Growth Strategy programs. Administration Section Increase of $50,000 to $2.1 million - Decrease in salaries and benefits of $64,000 to $4.78 million. The decrease reflects adjustments to benefits provided by the Authority. Adjustments were made to reflect reduced projected expenses related to health, dental and worker s compensation. In addition, updating the replacement of two staff members with PEPRA employees has reduced our retirement expenditures. Also, there were several employee allocation shifts from several projects, programs and departments to reflect the current workloads. The detail is shown in Exhibit 8, Staff Budget Allocation and Exhibit 9, Salary & Benefits Budget Detail. 2.A.9-7

8 Page 8 of 9 - Increase in General Administrative expenditures of $61,000 to $1.5 million. The categories with increases are: office expense: $15,000 for computer replacement, property lease: $22,000 for increased operational maintenance, professional services: $50,000 for the web redesign, Software agreements: $30,000 for finance software and Form 700 software hosting and office furniture and equipment decreased $40,000 to reflect current projections. - Administrative salary and benefits costs are $675,000 and represent 0.78%, which is below the 1% limitation on Administrative salary and benefits costs established by Measure J. Debt Service Increase of $950,000 to $37.9 million to adjust for revised debt schedules associated with the issuance of the 2017A revenue bonds and additional interest expense anticipated on the 2012A bonds as a result of the tax law changes reducing the corporate tax rate from 35% to 21%. As a result, this change reduces the return on tax-exempt bonds relative to the after-tax return on comparable taxable investments. A change in tax law is a usual triggering event that permits bondholders of variable rate bonds (like the 2012A bonds) to adjust the interest rate. The adjusted rate realigns the tax-exempt investment return with comparable taxable investment returns. In the coming months staff will present alternatives and a preferred strategy to refinance the 2012A bonds into a more cost effective alternative. Other Financing Sources (Uses) The accompanying schedules include a category called Other Financing Sources (Uses). This category primarily serves as an accounting of cash transfers from one Authority fund to another. The funds are budgeted within sections discussed above. For example, Measure J project expenditures budgeted in the Project Section are funded by bond proceeds that are held in a separate bond debt service fund. The budget transfers these funds to the Authority s general fund where the expenditures take place. The Debt service funds will transfer $43.9 million to the General fund to fund capital projects. The General fund will transfer $37.9 million to the debt service funds to pay the principal and interest related to the Authority s bonds. Description of Exhibits 2.A.9-8

9 Page 9 of 9 Exhibit 1 is a table showing revenues, expenditures, and changes in fund balance for all fund types as compared to the FY actuals, original FY budget, actuals through December 31, 2017, and proposed midyear budget amounts for FY Exhibit 2 is a table showing revenues, expenditures, and changes in fund balance. The Authority s finances are organized in funds, and are shown in a similar format to the Internal Accounting Report. Exhibit 3 is a revenue line item budget detail for all funds with comparison to the original FY budget. Exhibit 4 is an expenditure line item budget detail for the Programs including Transportation for Clean Air (TFCA) and GoMentum Station programs. Exhibit 5 shows the line item expenditure budget detail for the Projects. Measure C and Measure J projects are shown separately. Exhibit 6 is an expenditure line item budget detail for General Administration and Project Management. Authority-wide services, supplies, and fixed assets are usually contained in the Administration category. Exhibit 7 shows the line item expenditure budget detail for the CMA sections: Regional Planning and Growth Management, Congestion Management, and SCS Implementation. Exhibit 8 is the staff budget allocation to the respective categories, funding source, and budgeted amounts for the current and prior fiscal year. Exhibit 9 is the salary and benefits budget detail for the Authority with comparison to the original FY budget. 2.A.9-9

10 This Page Intentionally Blank