SunnyvaleRTC

June 27, 2006

SUBJECT: Consideration of Funding for Enhanced Murphy Avenue Street Maintenance and Budget Modification No. 1

REPORT IN BRIEF

At the City Council meeting of June 20, 2006, Council adopted the FY 2006/2007 Budget, Master Fee Schedule and Appropriations Limit. The adopted budget included funding for street maintenance on Murphy Avenue that is consistent with the citywide standards. No additional funding was appropriated for the enhanced street maintenance based on prior City Council direction provided as part of the FY 2005/2006 Budget. On June 22, 2006, the Mayor requested that the issue of enhanced maintenance on Murphy Avenue be brought back to Council on the June 27, 2006 agenda for funding consideration as part of the 2006/2007 budget.

The level of maintenance for that block has been carried out as a capital project for the last several years. At the December 13, 2005 Council meeting, Council acted to continue the maintenance at an annualized level of $35,000 through June 30, 2006 (RTC 05-385.) Council also directed staff to work with the Sunnyvale Downtown Association to determine options for funding enhanced street maintenance after June 30, 2006 through a parking maintenance district or business improvement district. That process did not result in a funding mechanism that could be implemented by July 1, 2006. As of now, a plan for funding the enhanced maintenance has not been approved or implemented, and no additional funding is included in the adopted FY 2006/2007 Budget. If Council chooses to approve additional funding, staff is recommending that the one time operating cost be funded from the Service Level Set-Aside.

BACKGROUND

Murphy Avenue has had enhanced maintenance services for many years. Historical data for the maintenance of Murphy Avenue reflects a budget of approximately $40,000 per year up to FY 2001/02. In FY 1997/98, the funding of this service was moved from the operating budget to a capital project entitled “Downtown Area Maintenance Project (820610)” with the intention that the downtown businesses would self-fund this enhanced level of service in the future. This level of service is provided only on the 100 block of South Murphy Avenue.

Below is a list of the maintenance services and costs for Murphy Avenue for FY 1987/88 through FY 2000/01:

Litter removal ––five days per week (landscaped areas only--$13,540)
Removal of weeds––every two weeks (landscaped areas only--$1,354)
Fountain maintenance—once a month ($624)
Shrub and groundcover maintenance—as needed ($7,812)
Removal and replacement of flowers—three times per year ($3,124)
Sidewalk washing—once a week (half the street on Monday and the other half on Friday--$13,540)

The Budget for the above services averaged approximately $40,000 per year.

In FY 2001/02, the budget for the Downtown Area Maintenance Project (820610) was increased to $90,000 to address the concerns of the downtown businesses about the condition of Murphy Avenue. The increased funding provided for the additional services listed below:

Litter removal—five days a week (all areas) ($6,621)
Sidewalk maintenance—three days per week ($37,072)
Removal of weeds—twice per week ($3,972)
Shrub and groundcover maintenance—three times per year ($2,335)

In FY 2002/03, the budget for the Downtown Area Maintenance Project (820610) was increased to address further concerns by Council and downtown businesses, specifically cigarette butts and litter issues. The increased funding provided for the additional services listed below:

Litter removal—seven days a week (all areas--$5,803)
Sidewalk steam cleaning–once a week ($16,070)
Sidewalk power vacuuming on weekends ($4,836)

The total budget for all of the above maintenance for FY 02/03 was $116,711.

As part of the FY 2003/04 Budget reduction process, Council provided direction to fund the project for two more years (FY 2003/04 and FY 2004/05) with future costs to be funded through a business improvement district. The elimination of funding for this project in FY 2005/06 did away with the following services:

Litter removal—seven days a week
Sidewalk maintenance (power vacuuming on Saturdays and Sundays, water washing of all sidewalk areas on Mondays and Fridays, and steam cleaning section of sidewalks on Tuesdays, Wednesdays, and Thursdays so that all sidewalk areas were steamed cleaned once a week).
Removal of weeds-twice a week
Shrub and groundcover maintenance—three times per year
Removal and replacement of annual flowers—three times per year
Fountain Maintenance—once a month
Daily manual removal of tree leaves during the fall season

Because a business improvement district had not been formed, Council, as part of the budget process for FY 05/06, approved a limited maintenance schedule for Murphy Avenue for one year. The limited schedule included:

Removal of weeds—once a week
Litter Removal (landscaped areas only)—twice a week
Shrub and groundcover maintenance—as needed
Fountain maintenance—once a month
Removal and replacement of annual flowers—three times per year with smaller flowers and the flowers are not replaced if vandalized.

The budget for the maintenance listed above was $12,421 for FY 2005/06. In December of 2005, the City Council increased funding for maintenance by $12,000 for a total annualized cost of $35,000. This increase added the following services:

Garbage pick up on Saturdays and Sundays by Public Works staff.
Pressure washing (once a week) and steam cleaning (once a month) sidewalk by Public Works staff.
Litter removal along all sidewalks before pressure washing by Public Works staff.

It should be noted that funding for the tree lights on Murphy Avenue was also contained in a separate Capital project that also is scheduled to cease at the end of the 2005/2006 Fiscal Year. The budgeted amount for the tree lights was $7,000 per year plus $13,500 every other year to replace the light strings. The light strings were replaced during FY 2005/2006, therefore the cost to continue operations for one more year would be $7,000.

It should also be noted, funding for enhanced maintenance services on Murphy Avenue will have no effect to the current level of street sweeping provided on this block. Street sweeping services on Murphy Avenue is funded through the Operating Budget within Program 116 – Pavement Operations. Therefore, funding of a Capital Project for enhanced maintenance services will have no impact to street sweeping services on Murphy Avenue.

EXISTING POLICY

Socio-Economic Element: Economy and Employment

Policy 5.1B.2 Participate in partnerships with local industry/businesses in order to facilitate communication and address mutual concerns.

Policy 5.1C.1 Support efforts to establish Sunnyvale's downtown area as a strong commercial center for the City.

Land Use and Transportation Element

Policy 5.1C.3 Maintain an attractive business community.

Policy N1.13 Promote an attractive and functional commercial environment.

Policy 2.5D.2 Maintain beautiful and comfortable outdoor public places which provide a shared sense of ownership and belonging for Sunnyvale residents, businesses, and visitors.

Policy 2.5D2k Continue to encourage pedestrian and commercial activity on the sidewalks of the historic 100 block of Murphy Avenue.

Community Design Sub Element

Action Statement 2.5A.3f. Strengthen the downtown as the visual as well as functional focus of Sunnyvale.

DISCUSSION

The lack of a property or business owner funding source has left the enhanced maintenance of Murphy Avenue unfunded and not sustainable within existing operating budgets of the City. As of July 1, 2006, all enhanced maintenance is scheduled to cease. The only maintenance services to continue will be periodic tree trimming and shrub maintenance consistent with the level of service the City provides for other City owned and maintained median islands and arterial landscaping throughout the City. The routine maintenance of sidewalks, litter pickup, tree lighting and fountain maintenance will fall upon the property or business owners in the area.

FISCAL IMPACT

The fiscal impact of any action taken by the City Council is dependent on the level of service that the City Council wishes to adopt for Murphy Avenue. These impacts will vary from $0 to $42,000 which would fund the enhanced street maintenance consistent with the FY 2005/06 service level at an estimated cost of $35,000 and $7,000 for the Murphy Street tree lights. If Council’s desire is to provide this level of service, staff recommends funding this with the General Fund Service Level Set-Aside. The impact on the Service Level Set-Aside will be a one time reduction of the Set-Aside if some level of enhanced maintenance is approved for one year or an ongoing reduction if enhanced maintenance is approved as an ongoing operating cost to the City.

BUDGET MODIFICATION NO. 1

FISCAL YEAR 2006/2007

Current

Increase

(Decrease)

Revised

General Fund

Expenditures:

820610 Downtown Area Maintenance

$0

$35,000

$35,000

824940 Murphy Avenue Tree Lights Maintenance

$0

$7,000

$7,000

Reserves:

General Fund Service Level Set-Aside

$500,000

($42,000)

$458,000

Conclusion

The provision of enhanced maintenance services on Murphy Avenue goes back several years and has varied in response to economic times and requests from property owners or the public. For at least the last five years it has been assumed that the enhanced service would be phased out of City budgets and paid for by the property owners/businesses on Murphy Avenue. The funding of these services with an alternative funding source has not occurred and the provision of these enhanced services will not be continued unless funded by the City or the property owners/businesses of the 100 block of Murphy Avenue.

PUBLIC CONTACT

Public contact was made through posting of the Council agenda in Public places, on the City’s web page, and the publication of the general business/ public hearing items in the San Jose Mercury News.

In addition, the annual Budget Workshop was held on May 23, 2006 (see Attachment A - approved meeting minutes) and a Budget Hearing was held on June 13, 2006. The City Council heard testimony by the public on the downtown street maintenance services at the June 13, 2006 Budget Hearing. Attachment B is a synopsis of the June 13, 2006 public testimony.

Due to the short notice received to agendize this issue, many interested parties may not be aware this issue is being considered by Council.

ALTERNATIVES

1. Approve funding of enhanced maintenance services on the 100 block of Murphy Avenue at the existing level of $35,000 for one year only and adoption of Budget Modification No. 1 in the amount of $35,000.

2. Approve funding of enhanced maintenance services on the 100 block of Murphy Avenue at the original 2005/2006 budget level of $12,421 for one year only and adoption of Budget Modification No. 1 in the amount of $12,421.

3. Approve funding of the Tree Light replacement and operation in the amount of $7,000 for one year only and adoption of Budget Modification No. 1 in the amount of $7,000.

4. Council could choose to fund the enhanced maintenance for more than one year by adopting any combination of alternatives listed above for two or more years, or as an ongoing project for the full 20 year plan. The budget Modification related to each alternative above is for a single year and adoption of any multi-year funding will result in those costs times the number of years approved for funding.

5. Take no action and do not approve funding for enhanced maintenance services on the 100 block of Murphy Avenue.

RECOMMENDATION

Council can choose to approve any combination of Alternatives 1, 2, 3 and 4 and adoption of Budget Modification No. 1 in the amount of the total of the alternatives selected; or, Council could choose Alternative 5 and no budget modification would be necessary.

Staff has no recommendation.

Prepared by:

Marvin Rose Director, Public Works

Reviewed by:

Mary Bradley, Director, Finance

Approved by:

Amy Chan

City Manager

Attachment

A. Copy of approved meeting minutes from the May 23, 2006 Budget Workshop (pdf file 43k)

B. Synopsis of the June 13, 2006 Budget Hearing testimony by the Public (pdf file 21k)