AgdaPkt 2018-02-26 Joint SA PFA - Laserfiche WebLink

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6.2.B. - Page 4 $186,000 into the Workers' Compensation Fund to cover necessary costs incurred in FY 2016-17, maintain an 80% confidence level and cover costs in FY 2017-18. Increases to expenditures of $846,000 include the offsetting transfer out from the Self - Insurance Fund, as well as a $544,000 appropriation for the purchase of fire equipment from an amount that the Fire Department has reserved in prior years. Docktown Relocation Costs and Funding Strategy Over the past two and a half years, the City Council has responded to a lawsuit over residential uses at the Docktown Marina, and considered various approaches to addressing this issue. At the December 12, 2016 City Council meeting, the Council approved the Docktown Plan, which provides assistance to individuals living at Docktown to find new housing. The City has contracted with relocation experts Overland, Pacific and Cutler to meet with each tenant and sub -tenant, explain benefits provided under the Docktown Plan, help them apply for relocation benefits, and sell their property to the City if desired by the tenant. At the time this report was drafted, 37 of the 70 tenants and sub -tenants at Docktown Marina have relocated, and another 23 tenants and sub -tenants have agreed to relocate by February 28, 2018 (or June 30, 2018 for families with school-age children). In February 2016, costs associated with the Docktown Plan were estimated at $10.3 million. In February 2017, the City Council approved the use of one-time funds and annual transfers from the General Fund to pay for costs associated with providing relocation assistance. The costs paid through December 31, 2017 amount to $9.4 million. On January 8, 2018, staff provided City Council with an update on the Docktown Plan current funding needs; estimated costs are now $20.8 million. At that time, the City Council approved a transfer of $6.0 million from the General Fund to cover estimated costs, and directed staff to return with a funding strategy for the remaining costs. As was anticipated in approving the Docktown Plan, short-term loans from City funds to the General Fund are necessary in order to provide sufficient cash flow to pay relocation benefits. Staff recommends the following approach to provide up -front funding of the remaining costs: • Loan $6.0 million from the Equipment Service Fund at an interest rate equal to the City's investment rate of return. This loan must be repaid to the Equipment Services Internal Service Fund within ten years, but staff expects to repay the loan within the next two fiscal years by transferring $3.0 million per year from the General Fund. This loan will not have a negative impact on the Equipment