City Council

(41) 24­0879 TRANSPORTATION COMMITTEE and BUDGET, FINANCE AND INNOVATION COMMITTEE REPORT relative to the 2024­25 First Transportation­Related Construction Projects Report. Recommendations for Council action, SUBJECT TO THE APPROVAL OF THE MAYOR: 1. APPROVE Recommendations Nos. 1 through 4, 6 and 7 contained in the City Administrative Officer (CAO) report dated August 1, 2024, attached to the Council file. 2. AUTHORIZE the Controller to amend the appropriation for the Sixth Street Viaduct Replacement Project (Item D) in Recommendation No. 1 as follows: From: Fund 51Q/94, Measure R Local Return Fund Tuesday Account- No. 94WM16, - Maintenance Program: Bridge $60,000 1. APPROVE Recommendations Nos. 1 through 4, 6 and 7 contained in the City Administrative Officer (CAO) report dated August 1, 2024, attached to the Council file. 2. AUTHORIZE the Controller to amend the appropriation for the Sixth Street Viaduct Replacement Project (Item D) in Recommendation No. 1 as follows: From: Fund 51Q/94, Measure R Local Return Fund Account No. 94WM16, Bridge Maintenance Program: $60,000 To: Fund 100/40. Department of General Services Account No. 001014, Salaries Construction Projects: $40,000 Account No. 003180, Construction Materials: $20,000 Total: $60,000 3. RESCIND Recommendation No. 5, which authorizes the Controller to reimburse the General Fund and Municipal Improvement Corporation of Los Angeles (MICLA), upon approval of the CAO, City departments’ labor costs, construction materials, and supply invoices for completed work for the Sixth Street Viaduct Replacement Project (Item D) as the financial transaction does not use MICLA financing for the inspection support services. Fiscal Impact Statement: The CAO reports that the recommendations listed in the report and amendment include transfers, appropriations, and authority for expenditures totaling $38.8 million. This consists of $29.54 million for grants, $8 million from various special funds, $0.06 million in MICLA financing, and $1.2 million from the General Fund. All transfers and appropriations are based on existing funds, reimbursements, or revenues. There is no additional General Fund impact for operations and maintenance costs as a result of the recommendations in Attachment 4 of the CAO report. Financial Policies Statement: The CAO reports that the recommendations stated in the report and amendment comply with the City’s Financial Policies in that appropriations of funds are limited to cash and anticipated revenues in the current budget year. Debt Impact Statement: The CAO reports that issuance of MICLA debt is a General Fund obligation. The issuance of MICLA financing for the Sixth Street Viaduct Replacement Project (Item D) would cause the City to borrow $60,000 at an approximate 5.5 percent interest rate over a period of 20 years. The total estimated debt service for this capital improvement project is $100,400, including interest of approximately $40,400. During the life of the bonds, the combined estimated average annual debt service is $5,020 over a 20­year period. Actual interest rates may differ as rates are dependent on market conditions at the time of issuance. The CAO cannot fully predict what interest rates will be in the future. In accordance -with the,Debt- Management Policy, the City has an established debt ceiling to guide in evaluating the affordability for future Debt Impact Statement: The CAO reports that issuance of MICLA debt is a General Fund obligation. The issuance of MICLA financing for the Sixth Street Viaduct Replacement Project (Item D) would cause the City to borrow $60,000 at an approximate 5.5 percent interest rate over a period of 20 years. The total estimated debt service for this capital improvement project is $100,400, including interest of approximately $40,400. During the life of the bonds, the combined estimated average annual debt service is $5,020 over a 20­year period. Actual interest rates may differ as rates are dependent on market conditions at the time of issuance. The CAO cannot fully predict what interest rates will be in the future. In accordance with the City Debt Management Policy, the City has an established debt ceiling to guide in evaluating the affordability for future debt. The debt ceiling for non­voted direct debt as a percentage of General Fund revenues is six percent. The 2024­25 Adopted Budget non voter­approved debt ratio is 2.66 percent. The issuance of debt for this project will not cause the City to exceed the six percent non voter­ approved debt limit.