Cordova Street Road Diet Project

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3 Department of Transportation Cordova Street Road Diet Project Finance Committee and City Council February 22, 2016

4 Recommendation Department of Transportation It is recommended that the City Council: 1. Find that the following proposed actions are exempt from review pursuant to the California Environmental Quality Act ( CEQA ), pursuant to State CEQA Guidelines Section (b) (3); and 2. Authorize the City Manager to execute all agreements associated with the receipt of $2,115,000 in reimbursable grant funding from the Los Angeles County Metropolitan Transportation Authority (Metro) for the implementation and management of the Cordova Road Diet Project (Capital Improvement Project Number 75052). 2

5 Cordova Street Project- Connecting Activity Centers/Destinations in the Community Department of Transportation 3

6 Background Department of Transportation The Department of Transportation applied for and was awarded a 2009 Metro Call for Projects grant to improve pedestrian safety and to install bike lanes on Cordova Street between Arroyo Parkway and Hill Street through the implementation of a road diet. Changes to federal funding resulted in suspension of the Metro funds, In 2015, Metro Board voted to restore funding to the Cordova Project 4

7 Cordova Street Project Goals Department of Transportation Consistent with City s Mobility Element objectives to promote a livable community where people can circulate without cars Improve safety of non-motorized users Increase the proportion of trips accomplished by biking and walking Provide an ideal linkage to Del Mar Metro Gold Line station, businesses, stores and employment centers in the South Lake District of Pasadena, as well as to academic institutions, including Pasadena City College and Caltech. Shorten Pedestrian Crossings at intersections Maintain or reduces vehicular speeds Installs Bike lanes in both Directions 5

8 Cordova Street from S Arroyo Department of Transportation Parkway to Lake Ave 6

9 Cordova Street from Lake Ave to Hill Department of Transportation Street 7

10 Project s Proposed Funding Department of Transportation FUNDING SOURCE FUNDS AVAILABLE MTA Reimbursable Grant $ 2,115,000 Existing Local Match $ 500,518 Remaining Local Match Planned for FY 2018 CIP with Measure R (Fund 236) $ 96,125 TOTAL PROJECT COST $ 2,711,643 8

11 Recommendation Department of Transportation It is recommended that the City Council: 1. Find that the following proposed actions are exempt from review pursuant to the California Environmental Quality Act ( CEQA ), pursuant to State CEQA Guidelines Section (b) (3); and 2. Authorize the City Manager to execute all agreements associated with the receipt of $2,115,000 in reimbursable grant funding from the Los Angeles County Metropolitan Transportation Authority (Metro) for the implementation and management of the Cordova Road Diet Project (Capital Improvement Project Number 75052). 9

12 CITY MANAGER S OFFICE APPROVAL OF INTERNAL AUDIT PLAN FOR FY 2016 (MIDYEAR) & FY 2017 February 22, 2016 Audit Committee Meeting Presented by: Ruthe Holden, Internal Audit Manager

13 Requirements for Audit Plan CITY MANAGER S OFFICE Requesting Approval Annual Internal Audit Plan IIA Standard 2010 > Internal Auditor must establish a risk-based Audit Plan, > Based on a documented Annual Risk Assessment Standard 2020 > Must communicate the Internal Audit activity s plans and resource requirements to Senior Management and City Council for review and approval City adopted the IIA s standards per CA Govt Code Section

14 Approach CITY MANAGER S OFFICE 1. Understand City s Strategic Goals 2. Citywide Risk Assessment > Process to identify and assess potential events or situations that may prevent the City from achieving its strategic goals > Evaluates risk in 4 areas Strategic Operational Compliance, and Financial 3

15 Approach CITY MANAGER S OFFICE 2. Citywide Risk Assessment > Not an Audit - art rather than a science > MGO Fraud Risk Assessment is a subset of Citywide Risk Assessment 3. Complete Citywide Risk Assessment > Established Audit Universe Includes all departments reporting to City Manager Excludes City Council appointees Excludes City of Pasadena s affiliated agencies > Inherent Risks scored based on probability & impact 4

16 Approach CITY MANAGER S OFFICE 3. Complete Citywide Risk Assessment > Plotted Inherent Risks on Heat Map > High Risk Score does not mean that department is: Ineffectively managed Sufficient controls are not already in place, or Function is not performing properly > High Risk Score indicates: Negative event could be particularly damaging, or Negative event could be more likely to occur in the absence of effective controls 5

17 Citywide Risk Assessment Heat Map CITY MANAGER S OFFICE Citywide Risk Heat Map Probability 5.0 III IV 4.0 B N L F 3.0 C E I M K G J A D H I II Impact A B C D E F G H I J K L M N LEGEND City Manager Finance Fire Housing & Career Services Human Resources Human Services & Recreation Information Technology Library & Information Services Planning & Community Development Police Public Health Public Works Transportation Water & Power 6

18 Approach CITY MANAGER S OFFICE 4. Identify Key Citywide Business Processes & Impact on Auditable Areas > Set of activities designed to provide critical support to auditable areas > Efficient and effective use of audit resources Audits of key business areas impact multiple departments within one audit > Identified 10 key Citywide business processes > Risks listed in each business process do not represent actual events occurring. > Risks listed are potential risks normally associated with that business process 7

19 Approach CITY MANAGER S OFFICE 5. Developed Proposed Audit Plan > Selected based on available resources, & proposed professional services for FY 2017 > Priorities used to select audits: Audits identified in KPMG, Task Force or Management Partners reports related to alleged embezzlement Audits of key business processes that have significant Citywide impact High Risk auditable areas in order of quadrants IV, II then III 8

20 Next Steps CITY MANAGER S OFFICE Audit Plan > MGO Fraud Risk Assessment Ongoing > Operational Audit of Accounts Payable Start Planning Process Quarterly Communication (May) > Progress of Audit Plan > Summary of Fraud Hotline > Status of Open Audit Recommendations 9

21 FINANCE DEPARTMENT QUARTERLY INVESTMENT REPORT Quarter Ending December 31, 2015 Presented by Vic Erganian Deputy Finance Director/City Treasurer Finance Committee/City Council February 22, 2016

22 The quarter in review FINANCE DEPARTMENT Economy grew at 0.7% rate during 4th quarter of Unemployment continued to decline. Unemployment rate was 4.9% at year end compared to 5.6% a year ago. Housing continued to improve. Inflation has been under control. YoY CPI at 0.7% as of December Core CPI at 2.1%. Fed raised Fed Funds rate in December by 0.25%. U.S. still the bright spot and the best economy among the industrialized countries. Average annual GDP was less than 2%. SPX Index returned % in 2015 DOW returned -2.23% in 2015 Equities dropped in January 2016 and rates declined. 2

23 Effective Fed Funds Rate FINANCE DEPARTMENT 3

24 Historic 2Year Treasury yield FINANCE DEPARTMENT 4

25 2 year Treasury yield FINANCE DEPARTMENT 5

26 Risks FINANCE DEPARTMENT Financial health of European banks - DB A slowing Chinese economy Dropping commodity prices Strong Dollar 6

27 TOTAL FUNDS UNDER MANAGEMENT FINANCE DEPARTMENT Total Funds Under Management as of 12/31/2015 (Market Values): Pooled Investment Portfolio 396,289,128 Capital Endowment 1,900,474 Stranded Investment Reserve Portfolio 68,628,879 Special Funds 28,918,623 Investments held with Fiscal Agents 59,872,458 Total Funds under Management 555,609,562 7

28 POOLED PORTFOLIO STRUCTURE FINANCE DEPARTMENT As of December 31, 2015 US Treasury Securities 5.0% LAIF 12.7% Cash in Bank 1.0% Money Market - Collateralized 7.5% Municipal Bonds 3.6% Corporate Bonds 17.5% Federal Agencies 52.7% 8

29 POOLED PORTFOLIO CREDIT QUALITY FINANCE DEPARTMENT Money Market Funds FDIC/Collateralized Municipal Bonds Aa2/Aa3/A1/SP-1+ Federal Agencies Aaa Corporate Bonds Aaa/Aa1/Aa3/A1/A2/A3 US Treasury Aaa LAIF In Trust (Not rated) 9

30 CORPORATE CREDIT QUALITY FINANCE DEPARTMENT New York Life Aaa Johnson & Johnson Aaa Apple Inc Aa1 Toyota Aa3 IBM Corporation Aa3 GE Capital A1 Pepsico Inc A1 Bank of America A1 Wells Fargo A2 Union Bank A2 JPMorgan A3 10

31 TAXABLE MUNIS FINANCE DEPARTMENT University of Ca Revenue Aa2 UC California Regents Aa2 Santa Rosa CA TABs AA State of California Aa3 Morgan Hills RDA AA- San Francisco Int l Airport A1 Los Angeles County PW A1 Pomona USD GOs A1 Riverside California POB SP-1+ 11

32 COMPLIANCE FINANCE DEPARTMENT COMPLIANCE REPORT Pooled Investment Portfolio As of 12/31/15 Diversification Credit Quality Maturity Portfolio Portfolio State Gov't Portfolio Credit Credit Quality Portfolio % of total Code limits compliance Quality per Gov Code compliance Maturity Collateralized Money Market 7.49% 100% In compliance 102% Collateral 102% Collateral In compliance In compliance Municipal Bonds 3.56% 100% In compliance Aa3/Aa2/A1 A or better In compliance In compliance US Treasury Securities 5.03% 100% In compliance Aaa AA+/Aaa In compliance In compliance Corporate Bonds 17.53% 30% In compliance Aaa/Aa3/A1/A2/A3 A or better In compliance In compliance Federal Agency Issues 52.74% 100% In compliance Aaa AA+/Aaa In compliance In compliance LAIF 12.65% 100% In compliance n/a n/a In compliance In compliance Cash 0.99% 100% In compliance Collateralized Collateralized In compliance In compliance % Portfolio Value 396,289,128 12

33 Fiscal YTD Effective Yield-Pooled Portfolio FINANCE DEPARTMENT Effective Yield FYTD 12/31/ % 1.79% 1.00% 1.19% 0.80% 0.60% 0.75% 0.75% 0.40% 0.20% 0.35% 0.49% 0.50% 0.00% Pooled Portfolio Avg. 2 YR Treasury County LA Pool LAIF 13

34 Fiscal YTD Effective Yield Power Reserve FINANCE DEPARTMENT 1.60% Effective Yield FYTD 12/31/ % 1.40% 1.20% 1.55% 1.53% 1.00% 0.80% 0.60% 0.40% 0.20% 0.75% 0.49% 0.50% 0.35% 0.00% Avg. 5 YR Treasury Power Reserve Portfolio County of LA Pool LAIF 14

35 Yield Comparison FINANCE DEPARTMENT FY2016-As of December 31, 2015 Other California Cities- Earned Interest Rates For the Quarter Ending December 31, 2015 City Rates Earned Palo Alto** 1.92% Pasadena* 1.24% Glendale 1.21% Los Angeles % Sacramento 1.04% Torrance+ 1.04% Anaheim 0.99% Riverside % San Jose 0.76% County of Los Angeles (Pool) 0.75% San Diego 0.72% San Francisco 0.61% *Blended Effective Yield (Pooled Portfolio & Power Reserve Portfolio) **Investment policies allow maturities out to 10 years. + As of November As of October As of September

36 Historic total returns FINANCE DEPARTMENT Total Return - Pool vs ML 1-3 Corp/Agency Index Returns (Quarterly) Index Return Pooled portfolio (1.000) (2.000) Quarters 16

37 CONCLUSION FINANCE DEPARTMENT All investments are in compliance with the State Government Code and the City s investment policy. Ample liquidity is maintained to meet budgeted expenditures. Adequate returns vs. portfolio risk. 17

38 Finance Department General Fund Update Presented by Matt Hawkesworth Director of Finance Finance/Audit Committee February 22, 2016

39 Revenues Finance Department Property Tax Projected $3.4m over Budget Sales Tax Unwinding Triple Flip may bring $2m Transient Occupancy Tax (TOT) Up 10.8% over FY 15 2

40 Revenues Continued Finance Department Utility Users Tax Continuing to decline. Projected to finish $500k below budget Franchise Fees Projected to collect $250,000 less than budget. Overnight Parking Permits Projected $200,000 over budget to meet FY 15 actuals. 3

41 Revenues Continued Finance Department Motor Vehicle License Fee Projected $350,000 above budget. State Mandated Cost Reimbursement Projected $196,000 in unanticipated revenue. State Funding Department of Finance approved $1.98m in reimbursement for debt service payments. 4

42 Expenditures Finance Department Personnel Costs Tracking in line with Budget. Maintenance and Operations Most are tracking in line with Budget. Will have one significant budget adjustment request in April for legal services. 5

43 Overall General Fund Finance Department Total Revenues Projected - $229.7m Total Expenditures Projected $224.6m Currently projecting a $5.1 surplus for FY16 primarily based upon one-time revenues. 6