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HomeMy WebLinkAbout6/6/2023 Item 7c, Jackson - Staff Agenda CorrespondenceCity of San Luis Obispo, Council Memorandum City of San Luis Obispo Council Agenda Correspondence DATE: June 6, 2023 TO: Mayor and Council FROM: Emily Jackson, Finance Director VIA: Derek Johnson, City Manager SUBJECT: ITEM 7C – ADOPTION OF THE 2023-25 FINANCIAL PLAN AND FISCAL YEAR 2023-24 BUDGET Staff received the following questions, regarding the 2023-15 Financial Plan and Fiscal Year 2023-24 Budget. The questions are below with staff’s response shown in italics: 1. What are the total proposed new FTE’s and in which Department? Is the Operating employee’s list on pages 113-115 the actual total (10)? Or are there also more FTE’s in Capital (p 211 engineering)? There are 10 (see table 1 below). Pg. 211 is referring to previously approved positions to help support CIP. Some positions are currently under recruitment. 2. What are the contract positions converted to FTE’s and in which departments? See table 1 below. The City’s employee summary is included on Financial Plan Pg. 115. In total there are 10 FTE positions being added from FY 2022 -23 to FY 2023-24; however, eight of these were already approved during FY 2022-23 and the ongoing budget allocation is included in the new financial plan. Per Resolution 11399, Section 1: “The budget allocations listed in Exhibit A will be included in the 2023-25 Financial Plan as ongoing budget items.” Table 1: Position Dept Type FTE Previously Approved Sustainability & Natural Resources Analyst Admin Contract to Regular Ongoing 1 Housing Specialist Position CDD Contract to Regular Ongoing 1 Volunteer Coordinator P&R Contract to Regular Ongoing 1 Contract Coordinator PW Contract to Regular Ongoing 1 Community Services Officers PD Contract to Regular Ongoing 4 Admin Assistant (Admin/IT)* Admin Contract to Regular Ongoing 1 Urban Forester PW New Position 1 Total 10 *This is a reclassification of the “Management Fellow” position approved by the City Council in the 2019-21 Financial Plan as an ongoing, contract position to a regular position. As a result, there is no fiscal impact associated with this change. Item 7c – Adoption of the 2023-25 Financial Plan and Fiscal year 2023-24 Budget Page 2 3. What are the job openings resulting from current staff promotions and in which departments? During the 2021-2023 financial plan, job openings were generally distributed evenly across three categories: one-third resulting from the addition of new positions to support the services provided to the community, another third was due to internal promotions, and the remaining third arose from general turnover. Specifically, in 2022 - 23, internal promotions accounted for 35% of the job openings. 4. What positions are proposed to be eliminated or reduced? There are no regular FTEs proposed to be eliminated or reduced. The supplemental employee count decreased in some cases due to one-time budget being removed. Contract Stormwater Inspector Position (CDD) Contract Heavy Equipment Mechanic (PW) Reductions in Supplemental/Intern budget: Fleet, CIP, Engineering, Transportation, WRRF 5. What, if any, is the effect of the hiring chill on this proposed budget? The hiring chill does not have a direct impact on the recommendations included in the 2023-25 Financial Plan. The hiring chill is intended to prompt a critical review of all vacancies in order to determine if there is a need to fill positions immediately. Under the Hiring Chill, Department Heads must demonstrate that positions are necessary to meet health, safety or other high-priority needs. The expectation is that only certain positions will be filled and the savings from positions that aren’t filled will contribute to FY 2022-23 year-end fund balance which will enable repayment of the Operating Reserve (used to cover storm recovery costs), Infrastructure Investment Fund (used to purchase the building at 1106 Walnut) or make an additional discretionary payment to CalPERs. The description of a Hiring Chill included in the Fiscal Health Contingency Plan is as follows: Hiring Chill. City Manager approval will be required to fill vacant regular positions. To fill a vacant position, department heads must demonstrate that it is necessary in meeting public health, safety or other high-priority service needs that cannot be met on an interim basis through contract, overtime or temporary staffing. In implementing the “chill,” the goal is not just short-term savings, but preserving future options if the problem turns-out to be ongoing. Item 7c – Adoption of the 2023-25 Financial Plan and Fiscal year 2023-24 Budget Page 3 6. By what amount would our PERS debt increase if all proposed FTE’s are approved? The CalPERS unfunded liability is influenced by various factors that are not solely determined by the number of FTE’s at the City. The unfunded liability amount is based upon an actuarial analysis which factors in a number of variables including but not limited to: CalPERS investment gains/losses, the number of active and retired members in the City’s pension plans, and the various benefits provided based on enrollment in the various pension tiers. Out of the ten FTE’s proposed, nine are existing contract employees who receive CalPERS retirement benefits. Unless there is different direction to eliminate these positions, the nine positions are not adding to the unfunded liability as they are already eligible for CalPERS retirement and are paying the member contribution. 7. Has the recent FEMA reimbursement decision changed the cost impacts of storm recovery (p8,27,73) The recent announcement that the Federal Disaster Declaration for the February and March storms was extended to include San Luis Obispo County for Public Assistance means that the City will be eligible for FEMA reimbursement of certain costs related to the March storms up to a maximum of 75%. The FEMA coverage is not expected to change overall estimated costs, but will reduce the City’s share of eligible expenses in response to the March storms from 100% to 6.25% due to Cal OES covering 75% of the remaining 25% of eligible costs through the California Disaster Assistance Act (CDAA). The percentage of these incurred costs and estimated future expenses that are deemed eligible through FEMA Public Assistance or CDAA are yet to be determined. 8. What is the criteria for listing some FTE’s listed as “operating” and other FTE’s as “capital” expenses? All positions are listed in the FTE count on page 112 and are included in the operating budget. In an attempt to reflect the projected cost of staff time within the Public Works Department spent on management of the CIP and delivery of projects, some positions are categorized as “Capital” in the Local Revenue Measure and Capital sections of the budget. (Fiscal Policy Section 9J, pg. 521) 9. Why is the target for affordable housing production down significantly to 50 per year (p173)? 50 units has been the target used as a Performance Measure for several years running. The last time the market did not produce 50 affordable housing units was in 2020-21, when 40 units were produced. Currently, there are 214 affordable units under construction, and 257 affordable units that are fully entitled and ready to go through the building permit process for permits. Item 7c – Adoption of the 2023-25 Financial Plan and Fiscal year 2023-24 Budget Page 4 These projects include: • Under Construction o Tiburon Place (Orcutt Area) - 68 units o Broad Street Place – 40 units o Toscano – 38 units o Anderson Hotel – 68 units • Entitlements Approved o Monterey Mixed-Use – 106 units o 736 Orcutt (Maxine Lewis) - 40 units o Bridge Street Family Apartments – 94 units o Jones Mixed-Use (Orcutt Area) - 9 units o THMA Palm Street Studios – 8 units 10. CC just approved the Community Forest Plan, but tree maintenance as proposed seems to be dispersed through departments, not coordinated centrally. Why is the City arborist transferring from Public Works to Community Development? (p179) Why is Public Works proposing a new Urban Forester position? (208) Trees have been removed from the Urban Forest Services metrics since they are maintained by Parks and Recreation Rangers (210) Planting 10,000 more trees is listed (p 216) as an Urban Forest Services function, but a large number of those trees will likely be in City Open Space and maintained by the Parks & Rec Rangers. Is there a central tree coordinator position proposed? On January 12, 2023, Council completed an Urban Forest Study Session which included an overview of Urban Forest Services Program’s Organizational Structure, an updated tree inventory, an overview of the Community Forest Plan, and a Maintenance Work Plan. At that study session Council was briefed on the breadth of services the Urban Forest Services Program provides to the City including Proactive & Responsive Maintenance, Community Education & Outreach, Staff of the Tree Committee, Community Partner Liaison, Tree Removal Applications, Municipal Code Enforcement, Heritage Tree Program, Development Review, and Pest Management. Due to the program’s diversity of services provided to the Community by a small maintenance program, Council was presented with a staffing plan that bifurcated services offered moving administrative, liaison, development review and code enforcement work over to the Community Development Department in order to align work efforts with expertise as the Community Development Department largely completes this type of work for other City operations. Public Works would keep the maintenance responsibility for trees in streets, parks and City facilities and Parks and Recreation would keep the maintenance responsibility for trees in open spaces and public creek areas. With the Urban Forest Study Session, Council was presented with an updated tree inventory that was specific to the areas maintained by the Urban Forest Services Program including public rights of way, parks and City facilities. Trees were not Item 7c – Adoption of the 2023-25 Financial Plan and Fiscal year 2023-24 Budget Page 5 removed from the inventory, we have a more accurate inventory of the trees within the public rights of way, parks and City facilities now and that asset inventory will be closely managed. There is not a central tree coordinator position that is proposed with the 2023 -25 Financial Plan nor was it proposed in the study session presented to Council. Metrics for trees within the public rights of way, parks and City facilities will continue to be presented as a performance measure for the Public Works Department. Trees planted as part of the 10 Tall initiative (10,000 more trees planted) within the areas maintained by the Urban Forest Services Program will be tracked and reported out as a Public Works performance measures. Trees planted as part of the 10 Tall Initiative will also be formally reported out to Council via future Climate Action Plan updates every four years and will include new trees planted on private property, in open spaces, in public rights of way, parks, and City facilities. The next formal Climate Action Plan update is scheduled for the fall of 2027 precedent to preparation of the 2027-29 Financial Plan (see Figure 4.1 on page 74). Informal updates to tree planting activity will be provided on a regular basis, however, through the 10 Tall website that was demonstrated at the January 12, 2023, Study Ses sion. As presented in the study session, the plan to bifurcate maintenance of the trees planted in public rights of way, parks and City facilities was reviewed and that implementation is included in this 2023-25 Financial Plan. This includes outsourcing the maintenance pruning of City trees to a maintenance contractor and keeping a small crew of maintenance staff in the Public Works Department to address small tree care (newly planted trees) as well as responding to immediate needs such as falling limbs blocking the public right of way. Young tree care is critical especially in the built environment to ensure that trees are growing correctly and have the proper watering. Even though a majority of the trees planted to address the 10 Tall Initiative are planned for open spaces, this will remain a large work effort for the Urban Forest Program in the coming years. In summary, the proposals outlined in the 2023 -25 Financial Plan align with Council direction received at the January 12, 2023 study session. 11. Stormwater Utility should be included in Utilities, not Public Works. Utilities has expertise with enterprise fund management. The City’s Stormwater program is managed through Utilities; however, it is combined with Flood Control and is primarily funded through the General Fund and therefore included in the Public Works budget. If Stormwater became its own enterprise fund, it would be included in Utilities. Item 7c – Adoption of the 2023-25 Financial Plan and Fiscal year 2023-24 Budget Page 6 12. Could the Police motto be changed from “Service, Pride, Integrity” to “Service, Respect, Integrity”? The Police Department is currently undergoing a 5-year strategic planning process. Consideration of an update to the Department’s Mission, Vision, and Motto are included in that process, but it is too early to know what potential changes to the motto might be made, as engagement with the community and staff is ongoing. 13. Could the term “base fee” be changed to “service fee” or “hook up fee”? (p 269) Across the water and wastewater industry, the terms “base fee”, “service fee”, etc. are used to represent that portion of the bill that is uniformly and equally applied to all customers in the same customer class. On Agenda Packet Page 348, they are referred to as a “Fixed Charge” by the City’s rate consultant. Staff would be hesitant to change the term at this point due to the inclusion of the term “base fee” in the Proposition 218 Public Hearing Notification. Staff believe that, if desired, a change in terms would be best made with an upcoming rate structure study, currently planned for with the next 2025-27 Financial Plan. 14. Could water rates be lowered during this budget cycle due to reduced chemicals usage and efficiencies? (p 276) If yes, by how much? Any increases in efficiencies that could lead to reduced costs were completely offset due to increases in commodity costs in the current budget cycle. Future areas for exploring opportunities for efficiencies include the utilization of groundwater, p otential revenue from short-term outside City non-potable water sales, and with the Water Treatment Plant Infrastructure Renewal Strategy which will look at changing the time of plant operations to take advantage of more favorable time of use electrical ra tes. 15. Why groundwater recharge with wastewater (injection well field) not being included in this budget cycle? Why delay replenishing groundwater with excess wastewater? (281) The current Financial Plan contain funding to study these next steps towards p otable reuse in the form of a Source Water Strategic Plan (CIP #117). The first step towards indirect potable reuse will be the completion of the WRRF, with significant treatment processes being scheduled for completion at the end of 2023. The next step w ill involve the utilization of existing groundwater supplies to free capacity in the groundwater basin. As the City has stored groundwater for several years, in conjunction with the large winter storms, the groundwater basin currently has no room for additional water to be injected. The City recently received a grant for approximately $6 million that will enable the utilization of local groundwater. This groundwater project will be designed to be adaptable to future indirect potable reuse projects. It i s wise to clean up the existing groundwater before adding new water to the basin. Item 7c – Adoption of the 2023-25 Financial Plan and Fiscal year 2023-24 Budget Page 7 16. At the April 18th Council meeting, a question was asked about the lack of new funding allocated to childcare other than the additional funds allocated in Major City Goal task 2.8d for financial aid to low-income families, concerned that after making childcare a central part of our original goal and budget discussions, we’re left with very little to show for it in this budget? There were active talks between SLCUSD, Cal Poly and the City around a partnership and we clarified that we could revisit the allocation of funds when/if those opportunities manifested. What is the status of this partnership and timing? A. The City met with SLCUSD and Cal Poly representatives on April 25 to discuss and explore the opportunity for a partnership pilot program to support the three agencies for ‘on-site’ childcare for employees. All three agencies agree on the benefits this collaboration would bring to support the variety of employees. The current Teach Elementary campus (across from Cal Poly on Grand and Slack St) was highlighted as primary focus for this potential and SLCUSD is currently researching with the SLO County Office of Education on one of the facilities on that property, as well as some adjacent facilities managed by Cal Poly (along Grand). There is exiting potential at this location to support all three agencies and there are more conversations to be had, however all three are optimistic with this potential collaboration. A similar effective model was identified with City of Davis and UC Davis and staff from each agency are in research stages for a future meeting. As the City Manager mentioned at the previous Council meeting, the intent of the partners is to use the remaining funds contributed from the initial Child Care Study to advance a feasibility study for employee specific childcare. The feasibility study will include identifying any potential facility options for expanding after school care, not limited to just the current school district facilities. B. The SLCUSD is utilizing Measure C-22 funds to upgrade and expand facilities and shared that the initial priority is at the elementary campuses. The City is in communication with District Administrators regarding providing appropriate space to support programs for before and after-school childcare at each of the elementary campuses. Discussions continue regarding the potential for additional portable classrooms to supplement the impacts to construction during projects. C. Operational Budget Clarification: The SLCUSD will continue to provide and fund the TK and Kinder programs for families at each campus this upcoming year. The District has an MOU with the City to pay for the staffing and oversight of these programs. Previous to 2022-2023, the City coordinated and operated the registrations for TK & Kinder programs and included that in the revenue forecasting. D. The City’s Parks & Recreation Department is continuing to provide Before and After-School care at the five other elementary campuses, including suppo rting the District’s TK programs with City Parks & Rec staff. Additionally, the Department will strategically continue to offer the afternoon/early evening programs such as sport clinics, fitness camps, contract class offerings in order to provide alternatives for children during after-school hours. Item 7c – Adoption of the 2023-25 Financial Plan and Fiscal year 2023-24 Budget Page 8 E. Included in the 2023-25 Financial Plan is an increase for scholarship funds for Year 1: $20K and Year 2: $25K to assist families that qualify for financial assistance. These new scholarship funds will be in addition to the support funds that we receive from CAPSLO (which can range between $25-$40K per year). F. The City’s Economic Development Division has included funding in the 2023-25 Financial Plan to continue the childcare start-up grants of $50,000 to assist with new childcare businesses in the City.