City of Culver City, California
Agenda Item Report
Meeting Date: 07/26/2010 Item Number: A-3
CITY COUNCIL AGENDA ITEM: FOUR-FIFTHS VOTE REQUIREMENT – Approval of
a Budget Amendment to Appropriate General Fund Reserves Towards
Infrastructure and Technology Improvements.
Contact Person/Dept.: Jeff Muir/Finance
Charles D. Herbertson, Public Works
Phone Number: (310) 253-5865
(310) 253-5630
Fiscal Impact: Yes [X] No [] General Fund: Yes [X] No []
Public Hearing: [] Action Item: [X] Attachments: []
Commission Action Required: Yes [] No [] Date: _______________
Public Notification: (E-Mail) Meetings and Agendas – City Council (07/21/10)
Department Approval:
Jeff Muir (07/20/10)
Charles D. Herbertson (07/20/10)
City Attorney Approval:
Carol Schwab (by H. Baker) (07/21/10)
Chief Financial Officer Approval:
Jeff Muir (07/20/10)
City Manager Approval:
P. Lamont Ewell (07/22/10)
RECOMMENDATION:
Staff recommends the City Council approve a budget amendment which
appropriates $4 million from the General Fund Reserve towards infrastructure and
technology improvements.
A Budget Amendment requires a 4/5 vote.
BACKGROUND:
Financial reports and budget presentations over the last few fiscal years have
included in-depth discussion of the substantial backlog the City has in terms of
deferred maintenance for its streets, sidewalks, streetlights and public facilities.
During the presentation of the City Manager’s Proposed Budget for Fiscal Year
2010/2011, the City Manager recommended the City Council consider modifying the
Fiscal Policy requiring the City to maintain 30% of the operating General Fund
expenditure budget in reserves.
The recommendation included lowering the reserve requirement to 20% and
investing some portion of reserves in excess of this amount into deferred
maintenance and/or technology projects that would increase efficiency (and thereby
potentially reduce costs of doing business in the long-term). The City Council
deliberated the matter and decided against changing the policy at that time. The
City Council did express being open to further discussion of the idea, including
temporarily dipping below the current reserve policy in order to make needed
deferred maintenance investments. City of Culver City, California
Agenda Item Report
The estimated General Fund Reserve balance at the end of Fiscal Year 2010/2011
is $28.7 million. This represents a 35.1% reserve level based on the adopted
operating expenditure budget. Based on the City Council Adopted Budget for Fiscal
Year 2010/2011, the City could appropriate approximately $4.1 million towards one-
time projects and still maintain a 30% General Fund reserve as required by the
current policy. Therefore, staff is recommending the appropriation and investment of
$4 million of General Fund reserves into deferred maintenance and technology
upgrade projects.
DISCUSSION:
Infrastructure Projects
Staff is recommending investing $2 million in deferred maintenance projects in the
categories of streets ($1 million), street lights ($600,000), Vet’s Memorial Building
(VMB) improvements ($250,000) and irrigation upgrades at City parks ($150,000).
These areas of investment were identified by the Public Works Director in
consultation with the Parks, Recreation, and Community Services Director (for the
VMB and irrigation projects) as meeting the criteria of high need and also the ability
to complete the projects within the fiscal year. The specific projects within these
categories are as follows:
Project Category Project
Estimated
Budget
Streets
Segrell Way $232,000
Dobson Way and Stevens Circle $185,000
Hayter Avenue - Sawtelle to Port $97,000
Jasmine Avenue - Farragut to Culver $157,000
Kinston Avenue - Jefferson to Lindberg Park $102,000
Rhoda Way - Cota to Studio $113,000
Walgrove Avenue - Washington to Zanja $74,000
Contingency $40,000
Total Streets $1,000,000
Street Lights
Replace Street Lights between Washington Place and
Washington Boulevard on the following Streets: Coolidge,
Berryman, Minerva, Bledsoe, Albright (except new street
lights installed as part of assessment district) $600,000
Total Street
Lights $600,000 City of Culver City, California
Agenda Item Report
VMB
Improvements
Install wireless capabilities $40,000
Electronic Reader Board $75,000
Renovate Main Kitchen and Concession Counters $75,000
Renovate backstage meeting/dressing rooms $30,000
Aesthetic improvements to Auditorium & Meeting Rooms $30,000
Total VMB $250,000
Parks Irrigation
Upgrades
Culver City Park $65,000
City Wide Upgrades to Weather Based Controllers $30,000
Add Master Valves and Flow Meters where not installed $55,000
Total Parks
Irrigation
Upgrades $150,000
Grand Total $2,000,000
Staff is also currently investigating the possibility of leveraging the funds through a
public/private partnership or other arrangement that may allow the City to do even
more with this appropriation. Staff is requesting City Council approval and
appropriation for the baseline project list above. If, prior to the end of October, staff
is able to identify a way to better leverage these funds, a staff report will be brought
to the City Council requesting authority to do so. If this possibility does not
materialize by the end of October, staff will move forward with the baseline projects
above.
Technology Upgrade
Staff is recommending establishment of a project budget for replacement of the
City’s financial system in the amount of $2 million. This project will provide the City
with a comprehensive financial software package that will include improved
efficiencies in various workflows as well as an improved ability for departmental staff
and executive management to better leverage the data in the system in decision
making and financial planning.
JD Edwards’ One World Xe is the current primary Culver City Enterprise Financial
System platform. The system provides different modules including General Ledger,
Accounts Payable, Accounts Receivable, Payroll and Human Resources, and City of Culver City, California
Agenda Item Report
Purchasing. JD Edwards was implemented in Culver City in 1999, largely due to
concerns that the prior system could not support Y2K concerns.
The JD Edwards system is difficult to navigate and extract information from for the
casual user. There are a number of stand-alone financial software applications that
have been internally developed or purchased because JD Edwards does not offer
the module, or it was not suited to the City’s needs. These include:
• Employee Time Reporting
• Budget Preparation
• Cashiering
• Check Printing
• Report Writing
• Job Costing
• Inventory / Warehouse
• Fixed Assets
• Applicant Tracking
• Business license administration
• Refuse billing
Maintaining these separate systems and any integration they maintain with JD
Edwards can be complicated and costly. Some of the internally developed
applications are highly reliant on key IT staff members, which can present problems
if they are unavailable. One of the goals of a financial system replacement project
will be identifying a system that incorporates as many of these modules as possible,
where system interfaces are already included and all maintenance and support
comes from one vendor.
JD Edwards was acquired by Peoplesoft, which was then acquired by Oracle. This
consolidation of three large software vendors into the Oracle umbrella has resulted
in uncertainty about future JD Edwards One World product development and support
for the municipal government financial and human resources software. Oracle has
recently pledged expansion of JD Edwards, and that they will fully support the
Microsoft SQL database. However, the City should weigh this against what it has
seen during past years in terms of support, which from staff’s perspective has been
lacking.
The other issue facing the City is the requirement for the City to upgrade the JD
Edwards software. Based on our most recent information, this upgrade must be
completed by December 31, 2012 or the City will no longer receive software support.
Based on new software licensing costs from Oracle and the professional consulting
required, this upgrade is estimated to cost between $250,000 and $300,000. Staff
feels strongly that this money would be better spent on investing in an improved
replacement system.
City of Culver City, California
Agenda Item Report
To summarize, staff strongly recommends moving forward with a financial system
replacement project. This will ultimately result in the ability to better optimize
workflows and create efficiencies, provide better access to financial data to assist in
decision making and allow the City to avoid the substantial cost required just to
upgrade the current system.
FISCAL ANALYSIS:
The funds recommended for appropriation above will be added to the following
accounts:
Account Description Amount
42000863.730100 Local Street Resurfacing $1,000,000
42000684.730100 Street Light Replacement $600,000
42000876.730100 Veterans Memorial Bldg. Refurbishment $250,000
42000612.730100 Park Irrigation Upgrades $150,000
42000636.730100 Financial System Replacement/Enhance $2,000,000
ATTACHMENTS:
None.
MOTION:
That the City Council:
1) Approve a Budget Amendment appropriating $4 million in General Fund
Reserves towards infrastructure and technology improvements; and,
2) Authorize the City Manager to investigate the ability to further leverage the $2
million for deferred maintenance projects;
3) Authorize the City Manager to move forward on the baseline projects
identified if leveraging opportunities are not identified by October, 2010.
A Budget Amendment requires a 4/5 vote.