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HomeMy WebLinkAbout08.03.2022 Minutes @6:30 CALL TO ORDER Chair Zemke called the meeting to order at 6:30 p.m. ROLL CALL Committee member DeGuzman, present Committee member Del Rosario, present Committee member Rey, present Committee member Romero (alternate), absent Vice Chair Brosnan, present Chair Zemke, present AGENDA REVIEW No changes. REMOTE PUBLIC COMMENTS No public comments MATTERS FOR CONSIDERATION 1. Welcome and Introductions Chair Zemke conducted introductions of members. 2. Motion to approve the Minutes from the meeting April 21, 2022 Motion - Vice Chair Brosnan/Second - Committee member DeGuzman: To approve the Minutes from the meeting April 21, 2022, by roll call vote: AYES Committee member DeGuzman, Committee member Del Rosario, Committee member Rey, Vice Chair Brosnan, Chair Zemke NAYS: None; ABSENT: None; ABSTAIN: None 3. Annual Reorganization of the Measure W Citizens’ Oversight Committee. Motion - Chair Zemke nominated Committee member Del Rosario to serve as Measure W Citizens’ Oversight Committee Chair for fiscal year 2022-2023/Second – Committee member DeGuzman, by MINUTES MEETING MEASURE W CITIZENS’ OVERSIGHT COMMITTEE CITY OF SOUTH SAN FRANCISCO Wednesday, August 3, 2022 6:30 p.m. TELECONFERENCE MEETING This meeting is being held in accordance with the Brown Act as currently in effect under the provisions of Assembly Bill 361 which allows attendance by members of the Measure W Citizens’ Oversight Committee, City staff and the public to participate and conduct the meeting by teleconference. Teleconference locations are not open to the public. MEASURE W COC MINUTES August 3, 2022 MINUTES PAGE 2 roll call vote: AYES Committee member DeGuzman, Committee member Del Rosario, Committee member Rey, Vice Chair Brosnan, Chair Zemke NAYS: None; ABSENT: None; ABSTAIN: None Committee member Del Rosario took over as Chair Motion – Committee member Zemke nominated Committee member DeGuzman to serve as Measure W Citizens’ Oversight Committee Vice Chair for fiscal year 2022-2023/Second – Chair Del Rosario, by roll call vote: AYES Committee member DeGuzman, Committee member Rey, Committee member Zemke, Vice Chair Brosnan, Chair Del Rosario NAYS: None; ABSENT: None; ABSTAIN: None Committee member DeGuzman took over as Vice Chair 4. Informational report on Measure W fund balance and expenditures for FY 2021-22. (Karen Chang, Director of Finance) Director of Finance Karen Chang introduced and thanked the Committee for their service. Director Chang then presented an Overview of Measure W as the half-cent sales tax that was approved by voters in 2015 and went into effect on April 1, 2016. She explained that for transparency the City has set up a separate fund, outside of the General Fund, to account for the revenue and expenditures. She explained that the purpose of Measure W is to maintain and enhance the residents’ quality of life. She presented that the major projects funded by the measure are the Civic Campus and Paving Program and that bonds have been issued to facilitate those projects which Measure W income is used to pay for the debt service. She presented in a summary that to date preliminary numbers show that we have received about $71.6M in revenue and total expenditures are about $56.5M. Vice Chair DeGuzman questioned if the money received from the issuance of the bonds is considered revenue to which Director Chang explained that the revenue is mainly related to the Measure W sales tax receipts not including the bond proceeds. Vice Chair DeGuzman then asked where staff puts the profit from the bonds issued. Director Chang stated that the City accounts for bond proceeds in a separate fund and confirmed with Deputy Finance Director Jason Wong. Director Chang went on to clarify that the revenue is from the half-cent sales tax and the expenditures were related to the Civic Campus, the Paving Program, and the Debt Service. Director Chang continued that Measure W revenues are enough to pay for the expenditures. She clarified that the 6/30/2022 revenue numbers are only preliminary as there is a two-month lag in sales tax receipts from the California Department of Tax and Fee Administration and that actual collection is only through April. Director Chang stated that staff estimates sales tax revenue will go up to approximately $14M but that the number won’t be finalized until the tax revenue is received and that Finance is still closing their books so a more firm number related to expenditures will be presented closer to January. Vice Chair DeGuzman and Chair Del Rosario clarified with Director Chang that the Measure W revenues are used to pay the debt service related to the bonds. Director Chang confirmed that the statement was correct. Vice Chair DeGuzman asserted that he is trying to understand the sales tax, bond proceeds, and expenditure numbers as one of the committee tasks is to meet with the auditors who will substantiate those numbers. Director Chang stated that Measure W is part of the annual audit that the auditors will review from the City as a whole and that the auditors will issue an opinion statement ensuring compliance with all the requirements. Vi ce Chair DeGuzman stated that MEASURE W COC MINUTES August 3, 2022 MINUTES PAGE 3 in previous years he has not seen a separate audit for Measure W funds. Director Chang responded that the audit is for the City as a whole but stated that Measure W is a separate and unique fund that can be found on page 113 of the City’s annual financial statement. Director Chang also stated that additional information for the public can be found on the Measure W website. Director Chang continued her presentation with a summary of the recently issued bonds. Director Chang explained that due to the rising interest rate concern the City has expediated the bond sales of Series 2022A from the original date in October 2022 to May 2022 and stated that the City successfully issued the $65M bond on May 25, 2022 achieving about $700k in interest savings. Director Chang stated that the total project for Orange Park will be about $72M augmented by a Caltrain Grant and Impact Fees. She then presented the Measure W Cash Flow citing the estimated 3% growth in sales tax receipts. Director Chang went on to explain that Measure W will be sufficient to cover the debt service. Director Chang covered the issuance of the three bond tranches; Series 2020A, to fund the Police Station for $53.8M at an interest cost of 2.27%, Series 2021A to fund the Library Parks and Recreation and Streets Pavement for $104M at 2.29%, and Series 2022A to fund the Aquatics Center and Sports Field for $65M at 4.03% because of rising interest cost. Chair Del Rosario asked if the bonds were all fixed interest to which Director Chang confirmed. Vice Chair DeGuzman asked how the debt service payments are calculated. Director Chang explained that there is an amortization schedule like a mortgage. Vice Chair DeGuzman asked if the bond was issued as a thirty-year bond. Deputy Director Wong stated that because Measure W was issued as a 30-year tax beginning April of 2016 the final maturity of the bonds was set to mature April of 2046 to not go beyond the sales tax. Director Chang then thanked Deputy Director Wong for his work with the bonds and concluded her presentation. Vice Chair DeGuzman asked if staff feels confident in the revenue estimation to which Director Chang stated that she believes that the revenues received which will be reported at the close of books in August will be close to staff’s estimation. Committee member Brosnan thanked Vice Chair DeGuzman for his questions and stated that he did not believe that the subcommittee is effective without including the other members as their questions are valid. Director Chang stated that she values the Committees input. Committee member Zemke thanked staff for their clear responses. Vice Chair DeGuzman asked about the date of the recent auditor ’s report. Director Chang stated that the current report is audited through June 30, 2021, and that Finance is closing the books for June 30, 2022, which is anticipated to be audited by December 2022. Vice Chair DeGuzman asked how the committee could pose questions to the auditors. He asked whether contact would be made directly to the auditors or through staff. Director Chang stated that because there is not currently a separate audit for Measure W, she would discuss with the auditors to see if there is a procedure for posing questions. Vice Chair DeGuzman asked if the auditors will receive samples related to Measure W to which Director Chang explained that the auditors are doing a city-wide audit and will choose random samples from the City’s many funds. She stated that while there is a high chance that the auditors will pick samples from Measure W there is no way to guarantee that they will pick expenditures or revenues pertaining to Measure W. Vice Chair DeGuzman asked if the auditors do a verification of the Measure W cash flow. Director Chang referenced page 113 in the financial report. Chair Del Rosario asked where the information could be found and in response to Chair Del Rosario’s req uest Director Chang stated that there is a link to the City’s website in the Staff Report. Vice Chair DeGuzman asked if the auditors will issue a Management Discussion and Analysis report related to Measure W or if staff can issue and provide one along with a quarterly statement of MEASURE W COC MINUTES August 3, 2022 MINUTES PAGE 4 cash flow. Director Chang stated that she would investigate to see staff has the capacity to provide the statement of cash flow. Committee member Brosnan asked if Measure W is part of the monthly expenditure logs Council receives. Director Chang stated that Council receives check registers by Department that include expenditures pertaining to the whole City but that it does not specifically say that it is a Measure W expenditure and that Council does not receive a financial report on any of the City’s funds monthly. Committee member Brosnan asked if Measure W could be classified as its own department for the purpose of the Committee to receive a check log like the Council receives monthly to which Director Chang stated that this would not be possible as Measure W is its own separate and unique fund. Committee member Brosnan stated that although he has seen the raw data, he could not at this time say that he understands Measure W expenditures and does not feel that he could know that every penny that is spent for Measure W is appropriate. Director Chang asked if the Committee’s confidence would be boosted by a separate audit to which Vice Chair DeGuzman and Chair Del Rosario agreed. There was some discussion related specific vendors in the financial reports provided and the committee agreed these would be addressed later via email to Director Chang. Committee member Brosnan thanked Director Chang and Deputy Director Wong citing the progress made during the meeting and stating that he believes that Measure W COC has an outstanding team. No public comments. The following was submitted via Q&A chat: Hello! My name is Kelly Morrison. My dad was SSF Fire Captain for many years (William Morrison). My sister and brother are currently SSF employees. I graduated from El Camino HS in 1986. I am pursuing my Masters of Social Work and will be attending these meetings regularly. Would any of you be willing to answer these questions for my policy class? My e-mail is [email protected]. I need to sign off due to class-but will be attending regularly! • What motivated the person you engaged with to get involved? • How did the person you engaged with learn about the organization? • Holding the event? • What has the person you engaged with done in the past to advocate for this issue? Committee member Zemke asked how this comment could be addressed according to the Brown Act to which Alexandra Wolf of the City Attorney’s Office stated that the committee can respond to the request individually. ADJOURNMENT MEASURE W COC MINUTES August 3, 2022 MINUTES PAGE 5 Being no further business, Chair Del Rosario adjourned the meeting at 7:44 p.m. Submitted by: Approved by: _____________________ ______________________________ Amanda Parker-Govea Engy Del Rosario Committee Secretary Chair Approved by the Measure W Citizens’ Oversight Committee: / /