1

cc15_054

STAFF REPORT

MEETING

DATE: March 31, 2015

TO: City Council

FROM: Cathy Capriola, Assistant City Manager

PRESENTER: Cathy Capriola, Assistant City Manager

Matt Greenberg, Park Manager

SUBJECT: MID-YEAR BUDGET UPDATE AND APPROVAL OF CAPITAL

BUDGET ADJUSTMENT

REQUEST

Consider 1.) Receiving an update report from Frei Real Estate Services on the mid-year budget for

MVMCC and 2.) Approving the following minor budget adjustments to the FY 14/15 MVMCC

Capital Improvement Program budget due to an unforeseen capital need to fund improvements to

the detection and cathodic protection system within the gas utility system which results in no net

increase to the capital budget:

1. Decrease the New Ballroom Floor from $50,000 to $40,000.

2. Increase the Gas Utility Capital line item from zero to $10,000.

RECOMMENDATION

Receive report and approve budget adjustments.

DISCUSSION

Each year, Frei Real Estate provides a Mid-Year Budget Report and delivers a written

memorandum to the PAC and the City. Attached is a copy of this report. Mr. Frei reports that

there is the need for a realignment within the Capital Budget due to an unforeseen capital need

within the gas utility system. The budget adjustments outlined below will not result in an increase

to the capital budget.

MVMCC has a cathodic protection system to protect underground utility pipes from corroding due

to electrolysis. After review, there is a need to replace a worn out rectifier and anode bed for a

total cost estimated at $9,400. Additional background regarding this system and need are outlined

in the attached Mid-Year Budget Report. Management is recommending that the funding for this

unanticipated capital expense be taken from the Ballroom Floor line item which will not be

undertaken this year.

922 Machin Avenue Novato, CA 94945

(415) 899-8900 FAX (415) 899-8213

www.novato.org

1

2

FISCAL IMPACT

There is funding within the current capital budget to absorb this unforeseen gas utility system need.

There is no increase to the capital budget if this budget adjustment is approved.

ATTACHMENTS

1. January 26, 2015 Mid-Year Budget Review – FY 6/30/2015 Memorandum from Al Frei

2

FRET REAL ESTATE SERVICES834t) AUBURN BLVD. • SUITE 100 • CITRUS HEIGHTS, CA 95610 • (916) 722-8110 FAX (916) 722-8111

DATE: January 26, 2015

TO: City of NovatoPark Acquisition Corporation

FROM: Al Frei

RE: Mann Valley Mobile Country ClubMid Year Budget Review — FY 6/30/15

Summary

Our mid-year budget review ending 12/31/14 shows a total deviation of 15.06% under-budget inoperating costs (middle of page 4).

Significant Budget Deviations

ExpensesWages-Office Manager — Jane has continued to work extra hours in order toallow Matt additional time to resolving Park issues.Garbage — A greater than expected rate increase along with additional temporarybins which were brought in for Park cleanup/brush clearing.Fire Abatement — A considerable amount of brush clearing has been necessaryaround the Park to meet fire department requirements.Pool Supplies & Equipment — The Park installed a chemical control system andhired a pool company to monitor the pool and spa chemical levels.

> Trees - Several dead or leaning trees that were in danger of causing propertydamage were removed.Licenses & Permits - The most expensive fee, HCD annual permit ($4,383) hasalready been paid.

RECOMMENDATIONS:

OPERATING BUDGETWhile a few specific expense items (listed above) have costs exceeding the budgetedamount, no category has exceeded its budgeted amount. Management recommends norevision to the operating budget.

CAPITAL PLAN

Major Completed Projects:Asphalt driveways and ctil-de-sacs

Mann View DriveClub View Drive

Emergency Generator

3

Retaining Walls at:39 Scenic Drive120 Sunrise Lane13 Fallen Leaf Drive36 Mann Valley Drive

Slopes/Drains/V-Ditches at:12 Fallen Leaf Drive12$ Panorama Drive184 Mann Valley Drive4$ Club View Drive41 Club View Drive19 Mann View Drive

Projects in Process or Upcoming Projects:Asphalt Repairs/Crack FillsClubhouse Shades & AwningsClubhouse Exterior Paint/CarpentryClubhouse Flat Roof/BeamsRetaining Walls at:

106 Panorama Drive17 Club View Drive

Gas Shut Off Valve

RECOMMENDATIONS:

CAPITAL BUDGETThe park has a cathodic protection system to protect underground utility pipes from corroding dueto electrolysis. There are three anode beds (see attached description) in the Park. One at 134Sunrise between 134 & 31 Club View, one at 3 Mann Valley Drive, and one at 47 Mann ValleyDrive (see attached map). Jarsco Utilities Inc., the company who performs our annual gas leakdetection and cathodic protection system survey identified a worn out rectifier and anode bed atspace 47. The cost to replace both is $9,400. This is a capital plan expense that was notanticipated this year.

Management’s recommendation is to reduce the $50,000 budget for ballroom floor replacementscheduled for this year by $9,400, move the $9,400 to the utility item, and move out the ballroomfloor to 2015/20 16 since it will not be done until all handicap modifications in the clubhouse arecompleted.

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beds involves burying a magnesium or

zinc anode in the soil and connecting it

to a pipeline by welding the copper wire

running from the anode

to the surface of the pipeline.

A pipeline may have as few as one, or

many anodes connected to it.

The sole purpose for installing an anode

bed is that it controls corrosion of an

existing pipeline.

I.E. Cathodic protection: CathodicProtection (CP) is a technique usedto control the corrosion of a metalsurface by making it the cathode ofan electrochemical cell. A simplemethod of protection connectsprotected metal to a more easilycorroded “sacrificial metal” to act asthe anode. The sacrificial metal thencorrodes instead of the protectedmetal. For structures such as longpipelines, where passive galvaniccathodic protection is not adequate,an external DC electrical powersource is used to provide sufficientcurrent.

BY

Cathodic protection systems protecta wide range of metallic structures invarious environments. Commonapplications are: steel pipelines.Another common application is ingalvanized steel, in which asacrificial protects them fromrust. I.E. Anode Bed. Corrodedanode below

For pipelines, anodes are arranged in groundbeds eitherdistributed or in a deep vertical hole depending on severaldesign and field condition factors including currentdistribution requirements.

Rectifier:

Cathodic protection transformer-rectifier units are oflencustom manufactured and equipped with a variety offeatures, including remote monitoring and control, integralcurrent interrupters and various type of electrical enclosures.The output DC negative terminal is connected to thestructure to be protected by the cathodic protectionsystem. The rectifier output DC positive cable isconnected to the anodes. The AC power cable is connectedto the rectifier input terminals

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