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Public Works Agency <br />www.santa-ana.org/public-works <br />Item # 12 <br />City of Santa Ana <br />20 Civic Center Plaza, Santa Ana, CA 92701 <br /> Staff Report <br />December 19, 2023 <br />TOPIC: Engineering Division Funding <br />AGENDA TITLE <br />Approve General Fund Appropriation Adjustment to Cure Negative Fund Balance in the <br />Public Works Engineering Fund (General Fund) <br />RECOMMENDED ACTION <br />Approve a General Fund appropriation adjustment to transfer $2.9 million to the Public <br />Works Engineering Fund 086 to cure the negative fund balance and prepare for fund <br />closure during FY 2023-24. (Requires five affirmative votes) <br />GOVERNMENT CODE §84308 APPLIES: No <br />DISCUSSION <br />The Engineering Services Division of the Public Works Agency provides a variety of <br />services to support City capital projects, traffic operations, and development within the <br />City. The Engineering Services Division is responsible for delivering a capital <br />improvement program consisting of street, traffic, storm drain, parks, building facilities, <br />and water and sewer improvements, a large part of which are grant funded. <br />The Engineers are able to charge most, but not all, of their time to restricted money or <br />developer deposits. Staff time is charged with a fully-burdened rate; this includes <br />salary, benefits, and overhead such as supervision, equipment, and administrative <br />support. Restricted money sources such as Measure M2, grants, etc., often limit the <br />amount of overhead the City can charge for staff time. Realistically, an employee may <br />have roughly 1,800 hours per year of productive work time due to administrative tasks, <br />time off, training, and other demands. Therefore, between the overhead limitations and <br />the reality of productive work time, the Engineering Division is not able to charge 100% <br />of its cost to restricted money or developer deposits. <br />The Engineering Services Division is accounted for in a separate internal service fund <br />(Fund 086). Due to the inability to charge 100% of cost, the fund has been struggling <br />with a negative fund balance for several years. Staff has been trying to find other <br />solutions (e.g. updated fee studies) to increase the charge rate; but recently Orange <br />County Transportation Authority (OCTA) made a determination to deny charge rates