City Council

(13)\n25-0874-S1\nGOVERNMENT OPERATIONS and BUDGET AND FINANCE\nCOMMITTEES’ REPORT relative to the Fiscal Year (FY) 2025-26\nSecond Construction Projects Report.\nRecommendations for Council action, SUBJECT TO THE APPROVAL\nOF THE MAYOR:\n1. AUTHORIZE the Controller to:\na. Transfer $27,119,080 between departments and funds as\nspecified in Attachment 1 of the October 15, 2025 City\nAdministrative Officer (CAO) report, attached to the\nCouncil file.\nb. Transfer $700,000 between accounts within departments\nand funds as specified in Attachment 2 of the October 15,\n2025 CAO report, attached to the Council file.\nc. Appropriate $4,160,494 between accounts within\ndepartments and funds as specified in Attachment 3 of the\nOctober 15, 2025 CAO report, attached to the Council file.\nd. In accordance with Recommendation No. 1a, reimburse\nthe General Fund within the Municipal Improvement\nCorporation of Los Angeles (MICLA), upon CAO approval\nand receipt of requesting departments’ labor services,\nconstruction materials, and supply invoices for completed\nwork to include reimbursements for labor services that\nmust contain an hourly breakdown with task descriptions\nand codes detailing the completed MICLA eligible work, in\nconnection with departmental accounts designated for the\nfollowing projects, as detailed in the October 15, 2025\nCAO report, attached to the Council file:\ni. Access Control Units Replacement, City Hall East\n(Item N)\nii. City Hall East Structural Assessment Project, Planter\nAsbestos Abatement (Item R)\niii. Seventh Street Body Shop (Item T)\niv. Alterations and Improvement (Item X)\nv. Frank Hotchkin Memorial Training Center\nImprovements (Item Z)\n2. AUTHORIZE the following:\na. Establishing a new appropriation account entitled Seventh\nStreet Body Shop in the amount of $2.0 million within\nMICLA Fund No. 298/40, Account No. TBD - Seventh\nStreet Body Shop\nb. Reprogramming 2023-24 and 2025-26 MICLA Funding\nand Communications Equipment Purchases as detailed in\nItems V and W of the October 15, 2025 CAO report,\nattached tot he Council file.\nc. Reprogramming MICLA savings from equipment\npurchases adopted in the 2023-24 and 2025-26 budgets\nto purchase replacement vehicles.\n3. AUTHORIZE the CAO to make technical corrections, as\nnecessary, to the transactions authorized through said\nCAO report, as required to implement the intent of those\ntransactions.\nFiscal Impact Statement: The CAO reports that the recommendations\nstated in the October 15, 2025 CAO report, attached to the Council\nfile, include transfers, appropriations, and authority for expenditures\ntotaling $32.0 million. This consists of $4.9 million from various\nspecial funds, $23.4 million in MICLA funds, $2.2 million in Capital\nand Technology Improvement Expenditure Program (CTIEP) funds,\nand $1.4 million in General Fund. All transfers and appropriations are\nbased on existing funds, reimbursements, or revenues. There is an\nanticipated General Fund impact in an amount not yet determined for\noperations and maintenance costs of the Barnsdall Art Park –\nResidence, a facility that is currently not in operation. These costs will\nbe addressed through the City budget process at the time the facility\nis scheduled for completion\nFinancial Policies Statement: The CAO reports that the\nrecommendations stated in the October 15, 2025 CAO report,\nattached to the Council file, comply with the City’s Financial Policies in\nthat appropriations for funds are limited to available cash balances\nneeded to fund ongoing maintenance, programming, project\nshortfalls, and critical operational needs in the current budget year.\nDebt Impact Statement: The CAO reports that the issuance of MICLA\ndebt is a General Fund obligation. The proposed MICLA fund\nappropriation for the capital project described in Item T would cause\nthe City to borrow $2.0 million at an approximate 5.5 percent interest\nrate over a period of 20 years. The total estimated debt service for the\nMICLA-funded projects is $3.3 million, including interest of\napproximately $1.3 million. The estimated average annual debt\nservice is $167,000 over a period of 20 years. Actual interest rates\nmay differ as rates are dependent on market conditions at the time of\nissuance. The CAO cannot fully predict what interest rates will be in\nthe future. In accordance with the City's Debt Management Policy, the\nCity has an established debt ceiling to guide the evaluation of the\naffordability for future debt. The debt ceiling for non-voted direct debt\nas a percentage of General Fund revenues is six percent. The 2025-\n26 Adopted Budget non-voter-approved debt service ratio is 2.40\npercent. The issuance of MICLA debt for these projects will not cause\nthe City to exceed the six percent non-voter-approved debt limit.