HomeMy WebLinkAbout05.18.2020 SP Minutes @3:00MINUTES
SPECIAL MEETING
BUDGET STANDING
y
COMMITTEE
c'�LIFOR� OF THE
CITY OF SOUTH SAN FRANCISCO
MUNICIPAL SERVICES BUILDING
COUNCIL CHAMBERS
33 ARROYO DRIVE
SOUTH SAN FRANCISCO, CA
MONDAY, MAY 18, 2020
3:00 p.m.
Call to Order. Time: 3:00 p.m.
Roll Call. PRESENT: Councilmember Nicolas and
Vice Mayor Addiego.
AGENDA REVIEW
No changes
REMOTE PUBLIC COMMENTS
Members of the public wishing to participate were encouraged to submit public comments in writing in
advance of the meeting to all-cc@ssfnet 2: 00 p.m. on Monday, May 18, 2020.
The comments were distributed to the Committee Members, uploaded to the website for public viewing,
and are part of the record. Assistant City Clerk Avila read into the record the following voicemails:
David Souza, President of AARP South San Francisco Chapter 3156 pertaining to parking problems at
that location and recommended the City close the Magnolia Senior Center and build underground
parking.
South San Francisco resident stated her yoga instructor informed her that the Magnolia Senior Center
would be closing. She believed the center was essential for the residents and seniors of South San
Francisco.
South San Francisco resident stated she went to the Magnolia Senior Center twice a week for yoga and
was told the center may be closing forever. She stated she was a taxpayer and believed the seniors
deserved to be at the center to practice their yoga to keep themselves healthy.
Assistant City Manager Ranals advised that on May 15, 2020 a letter was sent to all part-time City staff
on the possibility of not getting paid after July 1, 2020. She believed that letter may have had some people
believe that the Magnolia Senior Center would be closing. She emailed residents to clarify the rumors of
the Magnolia Senior Center closing for good. She stated the closure of the Magnolia Senior Center was
predicated by the San Mateo County Health Officer's order.
MATTERS FOR CONSIDERATION
1. Motion to approve the Minutes for the meeting of February 24, 2020.
MOTION - Councilmember Nicolas Second -Vice Mayor Addiego to approve the minutes from the
meeting of February 24, 2020. The motion carried unanimously.
2. Fiscal Year 2020-2021 Operating Budget Presentation. (Janet Salisbury, Finance Director)
Vice Mayor Addiego allowed for a late public comment to be heard.
Briana Ridgeskins, Alzheimer's Support Association volunteer praised the efforts of all the workers at the
Magnolia Senior Center and spoke against the closing of the center.
Finance Director Salisbury presented the Fiscal Year (FY) 2020-21 Operating Budget to the Budget
Committee Members. She stated adjustments to the FY 2019-20 budget and the proposed FY 2020-21
budget were required due to the extraordinary economic downturn stemming from the COVID-19 global
pandemic. South San Francisco was a financially strong, AAA credit rated city -well positioned to weather
the financial downturn associated with COVID-19. Nevertheless, the global economy had contracted.
Over 33 million Americans had lost their jobs and South San Francisco had not been spared this
economic pain.
Finance Director Salisbury advised that the General Fund was the City's largest and core operational
fund. For the current fiscal year, FY 2019-20, rapid financial actions to reduce spending, combined with
higher than anticipated actual revenues, have yielded a surplus of $4,634,181 (operating revenues of
$126,247,355 less expenditures of $121,613,174). This surplus could be used to offset some of the
revenue losses anticipated in FY 2020-21.
For the upcoming fiscal year, FY 2020-21, the City had anticipated to have $105,385,881 (not including
carryover purchase orders) in revenues and $112,217,884 in operating expenditures (net of departmental
reductions), yielding an operating shortfall of $6,832,003. Staff recommended using a combination of the
FY 2019-20 surplus totaling $4,634,181 and $2,197,822 from the City's reserve fund to balance the FY
2020-21 budget.
CURRENT FY 2019-20 BUDGET
Finance Director Salisbury stated that prior to the COVID-19 outbreak, South San Francisco's FY 2019-
20 budget reflected total general fund revenues of $127,780,177 and commensurate expenditures of
$127,888,734. This balanced budget incorporated the $2,174,663 surplus that was reported during the
mid -year budget review, which was presented to Council on February 26, 2020.
Currently, the City's financial reserve fund totals $52,346,000, broken down as follows:
SPECIAL BUDGET STANDING COMMITTEE MEETING MAY 18, 2020
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General Reserves $24,400,000
Infrastructure Reserves $22,400,000
Ca1PERS Stabilization Reserve $ 5,546,000
TOTAL $52,346,000
PROPOSED FY 2020-21 GENERAL FUND BUDGET
Finance Director Salisbury indicated South San Francisco was well positioned to recover economically
from COVID-19, with a large industrial base anchored by the world's largest biotechnology research
center. It was expected that the negative economic impact of COVID-19 would be felt throughout FY
2020-21, gradually lessening in calendar year 2021 as businesses recover, restaurants reopen, travel
resumes and hotel occupancy increased.
The revenue forecast for FY 2020-21 is shown below, set against revenues from FY 2019-20:
Property Tax revenue had, for the past six years, increased at an annual rate of 6% per year, reflective of a
booming economy. Some slowdown in property transfers and development was anticipated and a
conservative growth rate of 2% was used in this forecast. Note that even during the housing crisis of
2007-2008, the City did not observe a decline in property taxes.
Sales Tax revenue was expected to decline by $1,703,766, or about 10%, compared with the actual sales
tax revenue expected in FY 2019-20. The sales tax forecast was provided by the City's sales tax
consultant as the best estimate available at that time.
Transient Occupancy Tax (TOT) revenue had grown by 22% from March 2019 to March 2020, but was
the hardest hit revenue sources due to COVID-19. TOT was estimated to decline by $4,706,131, or about
36%, compared with the actual TOT revenue expected in FY 2019-20.
Commercial Parking Tax revenue was expected to decline by $765,787, or about 42%, compared with the
actual commercial parking tax revenue expected in FY 2019-20. This reflected a COVID-19 decline due
to a decline in airline passengers and a continued decline in business driven by the popularity of ride -
share companies such as Uber and Lyft.
Vice Mayor Addiego inquired whether staff could categorize the sales tax totals for the June 9, 2020
Special City Council meeting. Finance Director Salisbury stated the sales tax consultant used by the City
used sales tax figures two quarters behind as provided by San Mateo County. She confirmed that she
would update the staff report with the different categories for Council for the meeting.
PROPOSED FY 2020-21 GENERAL FUND EXPENDITURES
There was a revenue shortfall projected for FY 2020-21; hence, the reason for expenditure reductions.
The information below is a summary by department of proposed spending reductions, in addition to what
that means on a percentage basis with the adjusted FY2019-20 general fund budgets:
City Council: Total reduction $16,600, a 5.72% reduction of the department's FY 2019-20 budget.
Supplies and services reduction of $16,600, including eliminating funding for the Council Reorganization
event and reduction in travel and conference budget.
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City Clerk: Total reduction $3,500, a 0.32% reduction of the department's FY 2019-20 budget. Supplies
and services reduction of $3,500, including eliminating of promotions budget, and reduction in elections
and travel budget.
City Attorney: Total reduction $157,500, a 14.11 % reduction of the department's FY 2019-20 budget.
Supplies and services reduction of $157,500 in legal expenses and claims, anticipating a lower need for
legal services with an economic slowdown.
Vice Mayor Addiego asked whether there was a way to monitor the use of legal services from the City
Attorney's Office to effectively create a 15% budget savings. City Manager Futrell advised the City
receives a monthly invoice which they can use to track usage. Vice Mayor Addiego seeked clarification
that the City Attorney's Office wouldn't reduce their fees by 15%. City Manager Futrell stated the City
Attorney's Office worked for the City Council so he wouldn't ask for that. City Attorney Woodruff
advised that the City Attorney's Office worked closely with the Executive Leadership Team and would
notify them if they noticed an increase in activity to stay within the budget set by City Council.
City Manager's Office: Total reduction $515,376, an 8.61 % reduction of the department's FY 2019-20
budget. Personnel savings of $315,151 through reassignment of a position to the Measure W Fund.
Supplies and services reduction of $200,225, including reduction in city newsletters, mailers and street
banners, elimination of BIO 2021, elimination of food budget for Council Reorganization, and reduction
of travel and training budget.
Councilmember Nicolas expressed concern regarding the reduction in city newsletters. City Manager
Futrell stated the city newsletter would continue to be published but at a lesser frequency of every four
months. He mentioned the majority of the costs came from printing and postage for mailing of the city
newsletters. He stated staff would be able to do the electronic city newsletters more frequently and
encouraged residents to read the newsletter online.
Finance Department: Total reduction $427,916, an 11.11 % reduction of the department's FY 2019-20
budget. Personnel savings of $238,916 through hiring freeze of currently vacant positions, reassignment
of portions of positions to bond issuance costs, and reducing the hours for the mail courier. Supplies and
services reduction of $189,000, including reduction in outside contractors, travel and office supplies.
Enterprise Resource Planning (ERP) upgrade must be calendared as a priority for the City as the current
system is end of life.
Councilmember Nicolas inquired whether the current ERP system was still functional. City Manager
Futrell confirmed the ERP system was currently functional but the vendor has indicated that the system
would no longer be supported. He added the budget originally had $400,000 to begin the process of
upgrading the system but took it out due to reductions. City Manager Futrell anticipated the economy to
come back which then staff would add the item back to the budget for City Council's consideration.
Vice Mayor Addiego had concerns about cutting the hours of part time employees and wondered if the
employee would be better off getting furloughed and collecting unemployment with the extra $600 a
month provided by the government which would potentially net them a higher income. City Manager
Futrell stated the City would work with each individual part time employee to find the best case scenario
for each individual.
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Non -Departmental: Total reduction $27,625, a 1.94% reduction of the department's FYI 9-20 budget.
Supplies and services reduction of $77,625 due to a decrease in expected animal control contract costs
and transfer of budget for certain citywide dues, offset by a cost increase of $50,000 in the City's safety
program.
Human Resources (HR) Department: Total reduction $21,000, a 1.04% reduction of the department's
FY 2019-20 budget. Services reduction of $21,000 through reduction in training and recruitment costs.
Vice Mayor Addiego congratulated Human Resources Director Lockhart for filling the vacant positions in
February.
Economic and Community Development Department: Total reduction $2,528,644,18.14% reduction
of the department's FY 2019-20 budget. Personnel savings of $1,124,644 through hiring freeze of
currently vacant positions, and reassignment of portions of positions to the General plan Fund. Supplies
and services reduction of $1,404,000, including reduction in outside contractor for building inspection,
and reduction in advertising and promotion. Planning Commission minutes transcription reduction of
$6,000.
Councilmember Nicolas advised transcription of Planning Commission minutes had been requested by
City Council at one point. City Manager Futrell stated that had been a controversial item for years and
that staff recommend move to action minutes from verbatim minutes. He added that staff had to hire an
outside consultant to prepare verbatim minutes.
Vice Mayor Addiego suggested viewing the recordings of the meetings and utilizing Granicus for any
additional details not found on action style minutes.
Fire Department: Total reduction $660,489, a 2.13% reduction of the department's FY 19-20 budget.
Personnel savings of $450,319 through hiring freeze of currently vacant positions. Supplies and services
reduction of $355,500, including decrease plan check consultant costs and decrease in training and travel;
offset by a cost increase including $24,144 for cost of county contracts for Office of Emergency Services
and Fire Dispatch; and $111,160 increase for cost of Ambulance GEMT and QAF upfront payments to
the State.
Councilmember Nicolas inquired on the time it would take to recoup the cost of $111,160. Finance
Director Salisbury advised that would be in FY 2020-21. She stated the City would pay up front and get
reimbursed on the back end.
Fire Chief Magallanes clarified that Fire would get that back on every Medicaid and Medi -Cal call paid
quarterly and get reimbursed $220 for each call.
Vice Mayor Addiego inquired whether there were any big ticket purchase items that Fire Chief
Magallanes anticipated. Fire Chief Magallanes stated the only big ticket purchase item was the ambulance
and he had put it off for the last three years.
Police Department: Total reduction $1,200,276, a 3.86% reduction of the department's FY 2019-20
budget. Personnel savings of $605,191 through hiring freeze of currently vacant positions, and $361,359
in personnel savings through anticipated retirements over the next twelve months. Supplies and services
reduction of $233,725, including delaying handgun replacements, cutting the training budget by 50%,
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eliminating the Gun -Buy -Back program, and cancelling YMCA clinic -based and school-based
counselling contracts.
Vice Mayor Addiego requested clarification on the handgun replacement reduction as he did not
remember coming to the City Council in the past. Police Chief Azzopardi stated the item had been
deferred a couple of times administratively. He advised their guns are at the point of breaking down but
they had not and he felt comfortable using their current guns with the extra guns they have as backup for
another year.
Vice Mayor Addiego inquired whether there were any big ticket purchase items for the Police
Department. Police Chief Azzopardi stated he had no big ticket purchase items to report.
City Manager Futrell stated there were a lot of agencies letting go of police officers due to budget
concerns and felt comfortable on the possibility of adjusting the budget if they could hire some great
police officers that had been recently laid off.
Public Works Department: Total reduction $551,562, a 9.58% reduction of the department's FY 2019-
20 budget. Personnel savings of $682,816 through hiring freeze of currently vacant positions, offset by a
cost increase of $469,193 in personnel cost to correct a long-standing misapplication of city engineer staff
cost to CIP instead of the General Fund. Supplies and services reduction of $337,940, including
reassigning some sidewalk and drainage work to the sewer enterprise fund, and reducing the Low -Income
Sewer rebate program by $245,000.
Vice Mayor Addiego expressed concern on the lack of sidewalk repairs and street cleaning. Public Works
Director/City Engineer Kim advised that the level of service had been declining recently but stated they
could be more proactive if it were not for the vacancies.
Library Department: Total reduction $462,028, a 7.08% reduction of the department's FY 2019-20
budget. Personnel savings of $293,920 through hiring freeze of currently vacant positions and closing
Grand Avenue Library on Sundays. Supplies and services reduction of $168,108, including halting
various technology equipment replacement, reduction of certain collections budgets, and elimination of
some adult programs.
Library Director Sommer advised staffing was the most difficult for their department as the reduction
represented 10-12 hourly staff that had been with the City for a long time. She stated 50,000 items had
been checked out a month from both libraries and nothing had been returned since they closed. She
anticipates a tremendous surge in returns as soon as the libraries start accepting returns which she relies
on the hourly staff to do the intensive labor of checking in and re -shelving of all the returned materials.
Information Technology (IT) Department: Total reduction $312,500, a 6.95% reduction of the
department's FY 2019-20 budget. Supplies and services reduction of $332,500, including reduction in
outside contractor GIS services, Pen -TV contribution reduction, and Office 365 implementation delay.
Parks & Recreation Department: Total reduction $2,180,365, a 12.33% reduction of the department's
FY 2019-20 budget. Personnel savings of $817,746 through hiring freeze of currently vacant positions,
and $282,807 as a result of the reassignment of two positions to the Common Greens Fund. Supplies and
services reduction of $1,179,811, including closing the pool and elimination of recreation services on
Sundays; reduction of services from July through September due to the Sheltering in Place Order;
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cancellation of Concert in the Park, Movie Night in the Park, Halloween Extravaganza, the Nutcracker
performance, and October Middle School dances; reduction of the parks and building minor maintenance
fund; elimination of summer camp field trips; and scaling back the Cultural Arts Commission and the
Beautification Committee. This is offset by increased expenses for proposed "drive -in movie night" and
creation of an "Innovation Fund" of $100,000 providing the department a flexible fund to provide
innovative offerings during the COVID-19 pandemic.
Councilmember Nicolas inquired why the pool had to be open if only one family was allowed inside a
pool at a time. Assistant City Manager Ranals advised that municipal pools were not the only pools the
County had restrictions on. Pool restrictions also applied to country clubs, home owner associations and
other pools not necessarily a municipal pool. She advised on networking with other Parks & Recreation
Directors in San Mateo County to build a reservation system for the pools where residents could reserve a
lane of the pool for certain times.
Councilmember Nicolas expressed concern on eliminating too many activities for the youth and seniors.
Vice Mayor Addiego inquired whether the 50% employee discount on childcare was contractual. City
Manager Futrell did not believe it was contractual but worried some may see it as breaking faith with the
employees.
Finance Director Salisbury concluded while South San Francisco remained financially strong, the breadth
and depth of the economic downturn associated with COVID-19 was still unknown. A sharp economic
recovery was hoped for, but staff recommend a conservative budget approach at this time with minimal
reliance on city reserves to preserve the City's ability to respond over time if the economic downturn
deepens further.
The presented budget for FY 2020-21 provided city departments sufficient resources to maintain an
excellent level of service for the coming fiscal year. Staff intends to revisit the FY 2020-21 budget with
City Council, likely in October 2020, to adjust the budget as necessary based upon tax receipts and other
economic data indicators available at that time.
PUBLIC COMMENTS
Anne Baxter, South San Francisco resident was in opposition of closing the Magnolia Senior Center and
queried what the City would offer to the seniors if the Magnolia Senior Center closed.
South San Francisco resident, hoped there would be a budget for the Magnolia Senior Center and stated
the seniors that use the facility were low-income, fragile and without the services would have no way to
participate in programs.
3. Report regarding proposed Capital Improvement Program for fiscal year 2020-21. (Eunejune
Kim, Director of Public Works/City Engineer and Matt Ruble, Principal Engineer)
Principal Engineer Ruble presented the proposed Capital Improvement Program (CIP) for Fiscal Year
(FY) 2020-21 to the Budget Committee members. He stated the CIP outlined large capital expenditures
and infrastructure improvement projects throughout the City. City departments identified necessary
improvements and prioritized project implementation when preparing the CIP. City staff considered the
following criteria when selecting projects for inclusion in the CIP:
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• Grant funded projects requiring a city contribution
• Previously approved projects under construction or contract
• Projects required for regulatory compliance
• Projects to maintain or upgrade existing City infrastructure
• Projects with no general fund allocations
• Projects requested by the community or city departments
• Projects that can be reasonably delayed, are complete, or no longer necessary
Principal Engineer Ruble advised with these guidelines in mind, Staff proposed the following FY 2020-
21 CIP budget appropriations and reductions. The proposed FY 2020-21 CIP budget is $289.4 million,
with $137.1 million of new appropriations and $152.3 million of previous year appropriations for
continuing projects. The single largest new appropriation was the estimated $99 million for the Civic
Center Campus Project.
The FY 2020-21 CIP included 98 projects: five new projects and 93 continuing projects. The CIP was
comprised of six project types: 1. Public Facilities, 2. Parks, 3. Storm Drains 4. Sanitary Sewer, 5. Streets
and 6. Traffic.
The following were the five new projects:
1. ST2101 El Camino Real (ECR) Median Improvement Project - Project replaced the landscaped
median, including irrigational systems and vegetation on ECR between Chestnut Avenue and
Spruce Avenue. The project replicated or complemented the Grand Boulevard design concepts -
$75,000.
2. ST2102 Broadband Expansion Project - This project funded City participation in the "Dig Once"
joint trench project, installing two 2 -inch conduits for fiber optic cables throughout the city.
Participation in the joint trench program realized a significant savings when compared to a
standalone project - $750,000.
3. TR2101 Utah and Harbor Intersection Improvements - Project removed street parking on Harbor
Way to accommodate a south bound right -turn and north bound through lane, restripes and
removed street parking on Utah Avenue to add one east bound left -turn and one west bound left -
turn, and replaced existing 4 -way STOP with traffic signals - $250,000.
4. TR2102 East Grand & Allerton and East Grand & DNA Way Intersection Improvements - Project
included lane modifications and traffic signal installation at East Grand & Allerton and East
Grand & DNA Way. Project included signal interconnect conduit and fiber to support the City's
Adaptive Traffic Control System - $3,500,000.
5. TR2103 Local Roadway Safety Plan - Project evaluated the City's unique local traffic safety,
developing a prioritized list of improvements and actions with defined needs, contributing to and
in support of the Statewide Strategic Highway Safety Plan. Federal mandates required each State
to complete a statewide data -driven traffic safety plan coordinating the efforts of a wide range of
organizations to reduce traffic accident fatalities and serious injuries on all public roads - $80,000.
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Principal Engineer Ruble identified the following featured projects:
PF 1707 Civic Center Campus — This project would design and construct a new community civic
campus including a new library, parks and recreation facility, council chambers, and included
design of a new police operations and 911 dispatch center, and a new fire station - $99 million.
2. PF2003 Police Operations and 911 Dispatch Center — This project constructed a new police
operations and 911 dispatch center at the corner of Chestnut and Antoinette - $57,615.
PF2001 Oyster Point Fuel Tank Removal — This project removed decommissioned underground
fuel tanks from Oyster Point Marina - $200,000.
4. PF2002 Oyster Point Marina Water -Taxi Ferry Terminal — Engineering and design work to
upgrade Oyster Point peninsula, the adjacent guest dock, and to design a new water -taxi ferry
terminal and passenger building. The improvements would help to eliminate flooding over
landfill and account for sea level rise. - $300,000.
5. PKI 402 Orange Memorial Park Sports Field and SDI 801 Orange Memorial Park Storm Water
Capture — This project designed and constructed a storm water capture system to ensure the City
complied with Municipal Regional Permit requirements - $6,000,000.
6. TR 1906 Hillside and Lincoln Traffic Improvements — This project replaced existing three-way
STOP at Hillside Avenue and Lincoln Avenue with traffic signals, and included pedestrian
crossing and sidewalk improvements. Additionally, this project would reconfigure the roadway by
reducing Hillside Boulevard to one lane between Lincoln Street and Lawndale Boulevard,
installing a two-way center left -turn lane, and separated bike lanes in each direction on Hillside
Boulevard. This project may also include the construction of a sidewalk between the intersection
and adjacent school and new trail connection to the existing City trail network - $1.5 million.
7. ST1801 Grand Avenue Streetscape/Grand Avenue and Airport Boulevard Intersection
Improvements — This project redesigned Grand Avenue to accommodate wider sidewalks and an
improved streetscape, improving Caltrain Station access and supporting the downtown retail
environment. Phase 1 - project would include improvements to Airport Boulevard and Grand
Avenue crosswalks. Phase 2 - prepared and implemented new streetscape designs for Grand
Avenue, including new sidewalk paving, corner bulb outs, crosswalk treatments, new street
furnishings, and landscaping - $1.525 million.
ST1903 Pavement Management Program — This project rehabilitated various city streets in
accordance with the City's pavement management program - $4.567 million.
City Manager Futrell stated staff covered the new projects and the major projects in their presentation but
there were a total of 98 projects in total that were referenced in the staff report.
Vice Mayor Addiego inquired on how much of the infrastructure reserves would the projects use. City
Manager Futrell advised that none of the infrastructure reserves were appropriated but instead
appropriated general fund dollars which then cascaded down into the operating budget short fall.
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ADJOURNMENT
Being no further business, Vice Mayor Addiego adjourned the meeting at 5:31 p.m.
Submitted by: Approved by:
Gabrie o , Deputy City Clerk Mark Addiego, Vice Mayo
City of South San Francisco City of South San Francisco
Approved by the Budget Standing Committee: � / Z � / 2020
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