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HomeMy WebLinkAbout05.08.2024@100 SP Budget Standing Committee of the City CouncilWednesday, May 8, 2024 1:00 PM City of South San Francisco P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, CA City Manager's Conference Room, 400 Grand Avenue South San Francisco, CA 94080 Budget Standing Committee of the City Council JAMES COLEMAN, Mayor MARK ADDIEGO, Councilmember Special Meeting Agenda 1 May 8, 2024Budget Standing Committee of the City Council Special Meeting Agenda American Disability Act: The City Clerk will provide materials in appropriate alternative formats to comply with the Americans with Disabilities Act. Please send a written request to City Clerk Rosa Govea Acosta at 400 Grand Avenue, South San Francisco, CA 94080, or email at [email protected]. Include your name, address, phone number, a brief description of the requested materials, and preferred alternative format service at least 24-hours before the meeting. Accommodations: Individuals who require special assistance of a disability -related modification or accommodation to participate in the meeting, including Interpretation Services, should contact the Office of the City Clerk by email at [email protected], 24-hours before the meeting. Notification in advance of the meeting will enable the City of South San Francisco to make reasonable arrangements to ensure accessibility to the meeting. How to submit written Public Comment before the City Council Meeting: Members of the public are encouraged to submit public comments in writing in advance of the meeting via the eComment tab by 11:00 a.m. on the meeting date. Use the eComment portal by clicking on the following link : https://ci-ssf-ca.granicusideas.com/meetings or by visiting the City Council meeting's agenda page. eComments are also directly sent to the iLegislate application used by City Council and staff. Page 2 City of South San Francisco Printed on 5/6/2024 2 May 8, 2024Budget Standing Committee of the City Council Special Meeting Agenda CALL TO ORDER ROLL CALL AGENDA REVIEW PUBLIC COMMENTS- Comments are limited to items on the Special Meeting Agenda. MATTERS FOR CONSIDERATION Motion to approve the Minutes for the meeting of April 9, 2024.1. Report regarding the City of South San Francisco Operating Budget for Fiscal Year 2024-25 (Karen Chang, Director of Finance) 2. Report regarding proposed Capital Improvement Program for the Fiscal Year 2024-25. (Eunejune Kim, Director of Public Works/City Engineer, and Matthew Ruble, Principal Engineer) 3. ADJOURNMENT Page 3 City of South San Francisco Printed on 5/6/2024 3 City of South San Francisco Legislation Text P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, CA File #:24-461 Agenda Date:5/8/2024 Version:1 Item #:1. Motion to approve the Minutes for the meeting of April 9, 2024. City of South San Francisco Printed on 5/6/2024Page 1 of 1 powered by Legistar™4 CALL TO ORDER TIME: 3:00 p.m. ROLL CALL PRESENT: Mayor Coleman Councilmember Addiego AGENDA REVIEW None. PUBLIC COMMENTS None. MATTERS FOR CONSIDERATION 1. Motion to approve the Minutes for the meeting of February 05, 2024. Motion – Councilmember Addiego / Second – Mayor Coleman: to approve the minutes. The motion carried unanimously. 2. Report regarding the discussion of City of South San Francisco Operating Budget for Fiscal Year 2024-25. (Karen Chang, Director of Finance) City Manager Ranals noted that staff was seeking direction and that a subsequent meeting would occur in May. Director Chang stated the report was preliminary and echoed that findings would be reviewed again in May. Director Chang presented the report and shared the City’s projected deficit and reviewed contributions to the deficit to include the revenue and expenditures assumptions, general fund revenues, balance budgeting strategies, and one-time resources. Councilmember Addiego inquired about the timeline of the Community Benefits Program. City Attorney Woodruff noted there was not a timeline on the development agreement. City Manager Ranals clarified that staff was directed to hold off on recruitment for vacancies and noted that the 3 million department cuts have not been finalized and are still under review. Mayor Coleman suggested expanding the list of department cuts so that the Council can review and agree on items. MINUTES SPECIAL MEETING BUDGET STANDING COMMITTEE OF THE CITY OF SOUTH SAN FRANCISCO TUESDAY, APRIL 9, 2024 3:00 p.m. City Hall, City Manager’s Conference Room 400 Grand Avenue, South San Francisco, CA 5 SPECIAL BUDGET STANDING COMMITTEE MEETING APRIL 9, 2024 MINUTES PAGE 2 Mayor Coleman inquired about the excess revenue in Measure W. Director Chang discussed the excess revenue and balance of the funds. City Attorney Woodruff clarified the purpose of the Measure W Committee and stated that if Council provided direction there is the ability to utilize those funds. Department representatives reviewed and discussed their potential cuts and items for savings. The Council and staff continued to engage in questions and discussions and suggested potential measures for savings to include the sale of DNA Way, leasing of Orange Library, Community Facilities District funds, and staffing. Direction and feedback was provided to staff. ADJOURNMENT Being no further business, Mayor Coleman adjourned the meeting at 4:56 p.m. Submitted by: Approved by: Jazmine Miranda James Coleman Assistant City Clerk Mayor Approved by the Budget Standing Committee: / / 6 City of South San Francisco Legislation Text P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, CA File #:24-450 Agenda Date:5/8/2024 Version:1 Item #:2. Report regarding the City of South San Francisco Operating Budget for Fiscal Year 2024-25 (Karen Chang, Director of Finance) BACKGROUND/DISCUSSION Due to the formatting limitations of the City’s Agenda Management platform, the full staff report accompanying this agenda item is being attached as Exhibit A of this report. Attachments: Att 1 - General Fund Revenue and Expenditure Report Att 2 - New Request - Positions Att 3 - New Request - Supplies and Services - General Fund and Other Funds Att 4 - City Wide Balancing Measure Details City of South San Francisco Printed on 5/6/2024Page 1 of 1 powered by Legistar™7 City of South San Francisco Page 1 of 9 City of South San Francisco Legislation Text File#: 24-450 Agenda Date: 5/8/2024 Version: 1 Item #: 2 Report regarding the City of South San Francisco Operating Budget for Fiscal Year 2024-25. (Karen Chang, Director of Finance) RECOMMENDATION It is recommended that the Budget Standing Committee provide feedback in preparation for the City Council study session on May 22, 2024 related to the establishment of the City’s Fiscal Year (FY) 2024-25 operating budget. BACKGROUND/DISCUSSION During the revenue enhancement study session in November 2023, staff discussed with the City Council about the City’s General Fund structural deficit as reflected in the updated General Fund 10 -Year Long Range Forecast. The General Fund is the City’s largest and core operational fund, where general taxes are accounted for and the bulk of the City’s core services are accounted for and delivered by departments such as Economic and Community Development, Fire, Library, Parks and Recreation, Police, Public Works, and City Administration. The discussion of this report will be focused mainly on the General Fund operating budget. FY 2023-24 Budget Update City Council adopted the FY 2023-24 mid-year budget on February 28, 2024. During the mid-year review, staff updated the year end projections to reflect a potential $2.1 million shortfall for FY 2023-24. As presented during the FY 2023-24 mid-year budget, General Fund Total Revenues were projected to be $140.3 million. As shown in the table below, the General Fund is projected to end the fiscal year with $146.0 million in total revenues, which reflects $5.7 million more in property tax residual (as a taxing entity) from the former Redevelopment Agency (RDA) than anticipated, reflecting the impact of long -term growth and development of the RDA on assessed value. FY 2023-24 expenditures are projected at $155.3 million, which would result in a General Fund surplus of approximately $3.1 million. Should actual revenues prove to be stronger than expected or expenditures come in less than budgeted, this would translate into a smaller deficit or surplus, which would boost the available General Fund unassigned fund balance. P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, CA 8 File#: 24-450 Agenda Date: 5/8/2024 City of South San Francisco Page 2 of 9 Table 2: Projected City Reserves Summary For June 30, 2024 (in millions) General Reserves (20% set aside) $27.0 Pension Stabilization Reserves 5.8 Infrastructure Reserves 4.4 Total Reserve Levels $37.2 Available Unassigned Fund Balance (1) 25.6 Reserves & Surplus Fund Balance $62.8 (1) Est. balance includes the $3.1million surplus projection FY 2024-25 Proposed Budget Due to a projected deficit of approximately $19.2 million for FY 2024-25, staff held a study session with the Budget Sub-Committee on April 9, 2024 to seek guidance. After the April 9th meeting, the City Manager directed each department to reduce their operating budget by 5% to help balance the FY 2024-25 budget. There are still looming economic uncertainties. Given that the Federal Reserve continues to raise interest rates to try to combat inflation, revenue projections remain uncertain. In particular, the projections are sensitive to changes in personal income, inflation, interest rates, and the extent to which workers return to offices. Nevertheless, the projections presented reflect the most up to date economic and financial data available. The FY 2024-25 Operating Budget has been developed assuming many of the revenue categories would experience moderate to flat growth. On the expenditure side, the proposed payroll budget incorporates all the approved positions during FY 2023-24 as well as all the COLA increase per MOU agreements. Contracts for AFSCME, Confidential, and Mid-Management bargaining units expire on June 30, 2024. The FY 2024-25 proposed budget includes approximately $648,200 in personnel requests and $2,151,600 in supplies and services requests. More detailed information about these requests can be found in Attachment 2 to this report. Table 1: FY 2023-24 Y/E Projections (in millions) Revenues $ 146.0 Add: Carryover Purchase Orders/Capital Improvement Plan budget 12.4 Less: Expenditures ($155.3) Net Surplus/(Deficit) $3.1 9 File#: 24-450 Agenda Date: 5/8/2024 City of South San Francisco Page 3 of 9 For the FY 2024-25 proposed budget, expenditures are projected to exceed the revenue by approximately $11.4 million. To balance the FY 2024-25 budget, the City Manager directed departments to reduce their operating budget by 5%. Detailed information about the reduction from each department can be found in Attachment 4. To maintain the current level of services, staff recommends transferring $3 million from Measure W (Fund 101) to the General Fund to cover public safety and park and recreation staff costs. To bridge the remaining gap, staff recommends the Budget Sub-Committee consider using $8.4 million from the General Fund unassigned fund balance. Consistent with best practices and the City’s past practice, staff provide a mid- year budget update. If revenue projections are stronger than anticipated or expenditures are lower than budgeted, staff will recommend the appropriate budget adjustments. Due to the uncertainty of the business license tax measure, staff made no changes to the business license tax projections. For the upcoming fiscal year, FY 2024-25, the Finance Department is projecting operating revenues of $136.1 million and $147.5 million in operating expenditures which will result in a projected deficit of $11.4 million. 1. FY 2024-25 GENERAL FUND REVENUE PROJECTIONS The FY 2024-25 Operating Budget has been developed assuming many of the revenue categories would experience moderate to flat growth. 1. Property Tax revenue is projected higher based on historical information 2. Sales Tax is expected to increase slightly 3. TOT revenue with modest increase 4. Franchise Fee with a moderate increase 5. Permit Fees slightly increase from mid-year forecast The General Fund revenue forecast (not including Measure W) for FY 2024-25 is shown below, set against FY 2023-24 budget and FY 2022-23 actuals (in thousands): Table 3: FY 2024-25 Projections (in millions) Total Revenues $136.1 Measure W 3.0 Use of General Fund Unassigned Fund Balance 8.4 Total Resources $147.5 Less: Expenditure (147.5) Net Surplus/ (Deficit) Balanced 10 File#: 24-450 Agenda Date: 5/8/2024 City of South San Francisco Page 4 of 9 Revenue Types FY2022-23 FY2023-24 FY2024-25 Actuals Adopted Budget Adjusted Budget* Proposed Budget Percentage Change from FY2023-24 Taxes $ 100,571 $ 93,192 $ 91,882 $ 94,563 1.5% Property Tax 54,041 47,980 49,280 50,200 5.0% Sales Tax 21,735 23,352 21,952 23,213 -1.0% Transient Occupancy Tax 16,735 14,910 14,000 14,500 -3.0% Other Tax 8,060 6,950 6,650 6,650 -4.0% Franchise Fees 5,241 4,600 4,600 6,200 35.0% Licenses and Permits 20,468 16,963 12,463 13,610 -20.0% Fines & Forfeitures 757 700 700 873 25.0% Intergovernmental 3,559 3,140 6,010 3,588 14.0% Charges for Services 11,673 9,709 11,569 10,562 9.0% Money & Property -341 3,940 4,450 4,455 13.0% Other Revenues 353 338 338 283 -16.0% Transfers In 5,284 2,594 3,718 1,934 -25.0% PO/CIP Rollover 12,438 - ARPA 4,987 4,987 - -100% TOTAL REVENUES $ 147,565 $ 140,163 $153,155 $ 136,068 -3.0% *Adjusted budget includes approx. $12.4 million of CIP and PO rollovers made throughout the fiscal year. Property Tax remains the City’s largest revenue component and is projected to be $50.2 million in FY 2024-25. Property tax revenues have increased at an annual rate of 6% over the last five years from the economic boom along with robust developments. However, high interest rates and a slowing economy are expected to dampen the growth of property valuation in this upcoming fiscal year. Staff has factored in modest growth in FY 2024-25. This revenue stream is also overshadowed by the risk of increasing Property Tax In-Lieu of Vehicle License Fees (VLF) shortfalls from declining numbers of non-basic aid schools. Following the previous practice, the County of San Mateo, on behalf of itself and all the municipalities within the county, filed a claim with the State of California in August 2023 for the $70.0 million FY 2022- 23 VLF shortfall, which the State will consider as a part of its FY 2024-25 budget for appropriation. At present, the State’s proposed FY 2024-25 budget does not include any appropriations for the FY 2022-23 VLF county-wide shortfall of $70.0 million (of which the City’s share is $3.0 million). The State of California has consistently approved budget appropriations since FY 2019-20 for San Mateo County’s VLF shortfall. The City has submitted a letter to its state representatives to address this matter. To be conservative, staff has realigned the projection for VLF for FY 2024-25 based on the latest information available. Sales Tax revenues have been revised upward by $1.2 million for FY 2024-25 based on the latest forecast from the City’s sales tax consultant. Transient Occupancy Tax (TOT) was hit the hardest during FY 2020-21 with collection dropping to an all-time low of $6.7 million (40% of the pre-pandemic amount.) Since then, this revenue stream has demonstrated a strong recovery, however, during FY 2023-24, TOT has not rebounded as quickly as staff has hoped for. Based on the current industry trend, staff anticipates TOT might stay flat in the upcoming year. 11 File#: 24-450 Agenda Date: 5/8/2024 City of South San Francisco Page 5 of 9 Licenses and Permit revenues had been relatively stable prior to FY 2022-23 as construction and economic development throughout the City was strong. Rising interest rates triggered by untamed inflation starting in mid-2022, along with recent bank collapses, casts a shadow on the economy and presents a challenging environment for developers in FY 2024-25. Staff is cautiously optimistic about the development growth within the city boundary and project a modest increase in revenues related to construction and economic development from mid-year projection. Franchise Fee includes a one-time electronic billboard revenue of $1.4 million for FY 2024-25. Charges for Services revenues experienced a significant downturn during the pandemic. For FY 2024-25, staff expects to see a continued moderate increase to charges for services. As discussed during mid-year budget, the planning and building permits have been negatively impacted by the higher interest rate environment. However, we budgeted higher revenue from Fire for the GEMT program. Use Money & Property is budgeted as the same level as FY 2024-25 as staff expects the Federal Reserve to start reducing the federal funds rate in FY 2024-25. 2. PROPOSED FY 2024-25 GENERAL FUND EXPENDITURES The following table shows the proposed FY 2024-25 General Fund expenditure budgets by department (in thousands). Expenditure Type FY2022-23 FY2023-24 FY2024-25 Actuals Adopted Budget Adjusted Budget 2025 Proposed Percentage Change from FY2023-24 Adopted City Council $ 242 $ 269 $ 269 $ 306 14.0% City Clerk 1,028 1,265 1,265 1,198 -5.0% City Treasurer 35 133 132 170 28.0% City Attorney 1,220 1,109 1,109 1,459 32.0% City Manager 3,820 4,931 5,221 3,891 -21.0% Finance 3,090 3,992 4,520 3,883 -3.0% Non-Departmental 9,357 1,894 1,894 1,894 0.0% Human Resources 2,221 2,885 2,995 2,700 -6.0% Econ. & Comm. Development 11,771 8,500 12,514 8,573 1.0% Fire 35,513 32,762 34,339 36,636 12.0% Police 36,283 36,838 36,952 37,893 3.0% Public Works 7,936 11,954 13,822 12,285 3.0% Library 6,475 8,045 8,473 8,458 5.0% Parks & Recreation 20,503 24,675 27,394 27,209 10.0% CIP 689 900 4,376 900 0.0% TOTAL GENERAL FUND EXPENDITURES 140,183 140,152 155,276 147,455 5.0% Information Technology (ISF) 3,771 4,443 5,038 4,321 -3.0% 12 File#: 24-450 Agenda Date: 5/8/2024 City of South San Francisco Page 6 of 9 FY 2024-25 Expenditure Projection Higher payroll costs for FY 2024-25 are largely due to: 1. 3% COLA, approximately $3.0 million 2. Increase in healthcare costs roughly resulted in $1.3 million increase for the General Fund a. 17% Kaiser b. 7.9% for Blue Shield c. 10% decrease in Dental 3. Increase of overall Pension costs of $2.7 million due to CalPERS’ investment losses from FY 2021- 22; The General Fund’s share of the increased pension cost is $2.1 million. Attachment 2 to this report provides a detailed explanation of each department, along with the proposed General fund budget breakdown of payroll, supplies and services, and interdepartmental charges. It also includes the IT department summary which is accounted for in the internal service fund. Attachment 3 of this report shows a draft summary of the balancing measures submitted by each department. The following narrative provides additional information for each of the major expenditure categories. Payroll: • Total payroll costs, which includes salaries, wages, overtime, healthcare, pension, and other benefits, are projected to be $117.3 million. The projected cost reflects negotiated increases in employee compensation, increases in cost of healthcare, and an increase in pension contributions. • The payroll costs take into consideration the City’s required annual Unfunded Accrued Liability (UAL) payment to CalPERS. The UAL payment is the City’s obligation and is based on an amortization schedule provided by CalPERS. It is calculated based upon the assets that are in the City’s pension plans versus how much is required to pay pension benefits for all current and future retirees. The total UAL obligation for FY 2024-25 is $19.9 million. This is a 14.4% increase from the FY 2023-24 UAL payment of $17.4 million. The cost is much higher in FY 2024-25 because CalPERS’ investment return of negative 6.1% in FY 2021-22, which begins its 20-year amortization in FY 2024-25. • There are 5.45 full-time equivalent (FTE) requests for FY 2024-25. The proposed budget presented in Attachment 2 is inclusive of the position requests, re-classifications, and costing. 13 File#: 24-450 Agenda Date: 5/8/2024 City of South San Francisco Page 7 of 9 NEW PAYROLL REQUESTS Departments FTE Salaries and Benefits (General Fund) Salaries and Benefits (Solid Waste Fund) City Council - $20,000 - City Manager - 40,000 - Library 1.45 166,584 - Parks & Rec 4.50 268,483 - Police - 62,510 - Public Works -0.5 45,873 $44,745 Grand Total 5.45 $603,450 $44,745 • The positions listed in Attachment 2 are all positions within the department. However, the operating expenditures shown are limited to the General Fund. As for operating departments such as ECD, Public Works, and Parks and Recreation, some payroll expenditures are charged to other funds. Supplies and Services: • The proposed budget includes all decision packages (new requests) submitted by departments that have been reviewed by the City Manager and are subject to Council approval. Please refer to Attachment 3 for details. Interdepartmental Charges: • Interdepartmental Charges are expenses that are accounted for in the General Fund (and other funds as necessary) and summarily transferred out to fund “internal services”. The largest internal service fund is for the Information Technology (IT) Department. In effect, the cost to fund IT services, as an example, is calculated and then “charged” to various funds of which the General fund is the largest component. The interdepartmental charges have not been finalized yet. 3. OTHER FUNDS There are other funds that the Finance Department manages outside of the General Fund. The new requests from other funds can be found in Attachment 3. Many of the final budgets for these funds are contingent upon the adoption of the Capital Improvement Program (CIP) by City Council. The numbers may change based upon Council’s action related to the FY2024-25 CIP program. 4. RESERVES The City’s financial reserve funds are expected to be approximately $53.6 million. A breakdown is shown below: 14 File#: 24-450 Agenda Date: 5/8/2024 City of South San Francisco Page 8 of 9 The General Reserve, which represents at a minimum, 20 percent of the City’s annual revenue budget excluding transfers in (General Fund), follows the best practices guidelines from the Government Finance Officers’ Association (GFOA). The Infrastructure Reserve is largely comprised of General Fund surpluses that were set aside over previous years in anticipation of the City’s future infrastructure projects. The value shown is the unencumbered monies available that have not yet been designated toward a project. It should be noted that within the proposed FY 2024-25 Capital Improvement Program, a net $1.0 million of direct capital project funding is requested from the Infrastructure Reserves has been included in the above number. The CalPERS Stabilization Reserve was established through two separate Council actions in FY 2015-16 and FY 2017-18 totaling $5.546 million. Finance capitalized on the higher interest environment and set up a separate investment account with the City’s investment manager, Chandler, in December 2022 that yields a higher rate of return. As of March 2024, the balance of the account has grown to $5.8 million. The Unassigned General Fund Balance is the available fund balance remaining in the General Fund (as shown in the table in the summary section of this report) that has not been assigned for any particular purpose. This balance will change depending on the extent to which expenditures may exceed revenues (deficit) in FY 2023-24. It is important to note that the unassigned fund balance also acts as a buffer allowing for the natural ebb and flow within the General Fund that occurs during the year as a result of the mismatch between when revenues are received, and expenditures are incurred. Although placed in different categories, the City Council, by majority vote, are allowed to use the above reserve funds as necessary. FISCAL IMPACT For Fiscal Year 2024-25, the City’s General Fund is projected to have operating revenues of $136.1 million with additional Measure W funding and use of General Fund Unassigned Fund Balance of $11.4 million for a total of available revenues and resources of $147.5 million. Expenditures net of any carryover purchase orders are projected to be $147.5 million, resulting in a balanced budget. RELATIONSHIP TO STRATEGIC PLAN The budget is the City’s spending plan that supports Priority Area 3, Financial Stability. Estimated ending Financial Reserve for FY 2024-25 (in millions) General Reserve $ 27.0 Infrastructure Reserve* 3.6 CalPERS Stabilization Reserve 5.8 Unassigned General Fund Balance* 17.2 Total $ 53.6 15 File#: 24-450 Agenda Date: 5/8/2024 City of South San Francisco Page 9 of 9 CONCLUSION South San Francisco has weathered well during the pandemic and have since seen a steadily recovery of revenue during the FY 2023-24. However, there is still a looming cloud of uncertainty in the economy. Amid the high inflation, consumers are showing a softer demand for goods and are spending more on services. Retail sales growth is at risk as consumers dip into savings and assume more debt, especially with the Federal Reserve keeping interest rates higher for longer to try to curb inflation. The high interest rate environment has caused a slowdown in the construction and real estate market as the cost of borrowing remains elevated. Like most city governments, employee compensation remains the biggest portion of the City’s operating budget. In this upcoming budget, Staff recommend cautiously filling vacant positions and approving the department’s requests to maintain critical services to the community. Staff recommend the committee to approve the budget measures to reduce the overall expenditure but will allow the City to provide continued services to the community. Staff recommends transferring $3 million from Measure W (Fund 101) to the General Fund (Fund 100) to cover some of public safety and parks and recreation staff costs and use $8.4 million from the unassigned fund balance to balance this year’s budget. Staff will continue to explore other avenues to increase revenue and will bring it forward to the sub-committee when such measures materialize. Staff intends to revisit the FY 2023-24 budget with City Council when the audit for the current fiscal year is available (likely in February 2025) and adjust the budget as necessary based upon tax revenue trends and other economic data indicators available at that time. Staff welcomes feedback from the Budget Standing Committee related to the information contained herein. Attachments: Att 1 – General Fund Revenue and Expenditure Reports Att 2 - New Request – Positions Att 3 – New Request – Supplies and Services – General Fund and Other Funds Att 4 - City Wide Balancing Measures Details 16 General Fund Revenue Summary Attachment 1 Revenue Type FY 2023 Actual FY 2024 Adopted Budget FY 2024 Adjusted Budget FY 2025 Proposed Budget % of Total Projected Revenue Property Taxes 54,041,118 47,980,000 49,280,000 50,200,000 37% Sales Taxes 21,735,087 23,351,500 21,951,500 23,213,000 17% Transient Occupancy Tax 16,735,087 14,910,000 14,000,000 14,500,000 11% Other Taxes 8,059,817 6,950,000 6,650,000 6,650,000 5% Franchise Fees 5,240,637 4,600,000 4,600,000 6,200,000 5% License & Permits 20,467,645 16,962,894 12,462,894 13,610,000 10% Fines & Forfeitures 757,019 700,000 700,000 873,000 1% Intergovernmental (Grants)3,558,740 3,139,827 6,009,562 3,588,000 3% Charges for Services 11,673,188 9,709,257 11,569,271 10,562,000 8% Use of Money & Property (340,684) 3,940,000 4,450,000 4,455,000 3% Other Revenues 353,379 337,826 337,826 282,500 0% Transfers In 5,283,683 2,593,804 3,718,154 1,934,000 1% PO/CIP Rollover - - 12,437,539 - 0% ARPA - 4,987,373 4,987,373 - 0% Total 147,564,716 140,162,481 153,154,119 136,067,500 100% 17 General Fund Expenditure Attachment 1 DEPARTMENT FY 2023 Actual FY 2024 Adopted Budget FY 2024 Adjusted Budget FY 2025 Based Budget FY 2025 New Request- payroll FY 2025 New Request - SS Cost Saving Measures FY 2025 Proposed Budget City Council 241,595 269,486 269,486 296,359 20,000 - (10,000) 306,359 City Clerk 1,027,826 1,265,010 1,265,011 1,243,010 - - (44,685) 1,198,325 City Treasurer 35,280 133,428 133,428 132,198 - 38,000 - 170,198 City Attorney 1,220,059 1,108,825 1,108,825 1,108,825 - 350,000 - 1,458,825 City Manager’s Office 3,819,858 4,931,075 5,221,126 4,552,881 40,000 - (702,176) 3,890,705 Finance Department 3,089,869 3,992,281 4,519,734 4,067,350 - - (184,630) 3,882,720 Non-Departmental*9,357,380 1,894,367 1,894,367 1,894,367 - - - 1,894,367 Human Resources Dept.2,221,160 2,884,524 2,995,351 2,831,976 - - (132,000) 2,699,976 Economic & Community Develop.11,770,931 8,499,933 12,513,633 9,197,246 - 138,723 (763,157) 8,572,812 Fire Department 35,512,513 32,761,869 34,339,443 36,604,257 - 852,000 (820,574) 36,635,683 Police Department 36,282,832 36,838,240 36,951,706 39,155,067 62,510 709,874 (2,034,709) 37,892,742 Public Works Department 7,936,326 11,954,045 13,821,528 12,933,608 45,873 - (694,890) 12,284,591 Library Department 6,475,274 8,044,806 8,473,086 8,666,143 166,584 23,000 (397,470) 8,458,257 Parks and Recreation Dept.20,503,316 24,675,441 27,394,407 27,164,304 268,483 40,000 (263,380) 27,209,407 CIP 688,940 900,000 4,375,873 900,000 - - - 900,000 TOTAL 140,183,159 140,153,330 155,277,004 150,747,590 603,450 2,151,597 (6,047,671) 147,454,966 Information Technology 3,770,987 4,443,433 5,037,801 4,369,487 - 121,800 (142,968) 4,321,433 18 FY2024-25 New Payroll Request Summary Attachment 2 Personnel Requests Funding Sources Departments General Fund Solid Waste Reduction Fund Grand Total 5.45 City Council 20,000.00 20,000.00 Elected-Salary change effective 12/2024 N/A 20,000.00 20,000.00 City Manager 40,000.00 40,000.00 Reclass -Position Study (net cost) N/A 40,000.00 40,000.00 Library 166,584.00 166,584.00 Literacy Services Assistant I - Hourly (x665) 0.85 64,170.00 64,170.00 Literacy Services Coordinator (A445) 0.60 102,414.00 102,414.00 Parks & Recreation 268,483.00 268,483.00 Recreation Leader II - Hourly (X365) 0.25 13,113.00 13,113.00 Recreation Leader III - Hourly (X370) 0.01 821.00 821.00 0.14 8,208.00 8,208.00 2.05 116,772.00 116,772.00 Recreation Leader IV - Hourly (X375) 2.05 129,569.00 129,569.00 Police 62,510.00 62,510.00 Police Lieutenant (M275) 1.00 381,170.00 381,170.00 Police Sergeant (C165) (1.00) (318,660.00) (318,660.00) Public Works 45,873.00 44,745.00 90,618.00 Engineer- Associate (M115) (1.00) (241,174.00) (241,174.00) Engineer- Senior (M340) 1.00 287,047.00 287,047.00 Office Specialist - Hourly (X415) (0.50) 44,745.00 44,745.00 Grand Total 5.45 603,450.00 44,745.00 648,195.00 19 General Fund Attachment 3 FY2024-25 New Supplies and Services Request Summary Supplies and Services Requests Funding Sources Department General Fund ATTORNEY Legal service fees 350,000 ATTORNEY Total 350,000 ECD Holiday Decorations 113,723 TDM Monitoring 25,000 ECD Total 138,723 Fire Additional funds for ambulance billing 22,000 CMS cost reporting contractor 30,000 Funds to pay DHCS for PP-GEMT-IGT 640,000 Increase in ambulance radio monthly charges 25,000 Plan check contractual services 135,000 Fire Total 852,000 LIB English as Second Language (ESL) State Library Grant 23,000 LIB Total 23,000 P&R Supplies, snack, field trips, entry fees, etc 40,000 P&R Total 40,000 PD Contract out - Parking Enforcement Officers 649,874 Mental Health Clinician for SSF -100%60,000 PD Total 709,874 TREASURER Consultant increase cost 38,000 TREASURER Total 38,000 Grand Total 2,151,597 20 Other Funds FY2024-25 New Supplies and Services Request Summary Attachment 3 Supplies and Services Requests Funding Sources Department Developer Deposits Fund Asset Seizure/ Opioid Settlement Fund Sewer Enterprise Fund Equipt Replacement Fund Information Technology Fund Public Safety Impact Fee Fund Commercial Linkage Fee Fund Public Arts-In- Lieu Fund Grand Total ECD Analysis of Labor Standards Impacts on the Financial Feasibility of Development Projects 30,000 30,000 Anti Displacement Task Force 220,000 220,000 Expanded Objective Design Standards 125,000 125,000 Ongoing Property Acquisition Work 200,000 200,000 Administration of Anti Displacement Task Force 50,000 50,000 ECD Total 125,000 500,000 625,000 IT Computer Replacement 120,000 120,000 IT Total 120,000 120,000 P&R Art Component for Oyster Point 60,000 60,000 Continuation of Rotating Solo Art Exhibit-LPR 3,500 3,500 P&R Total 63,500 63,500 PD ALPR Cameras around the City 121,800 121,800 Mandated Radio Upgrade 125,000 400,000 525,000 Mental Health Clinician for SSF -100%196,000 196,000 PD Total 321,000 121,800 400,000 842,800 PW Bulk chemicals 299,000 299,000 Gas and electricity costs for sanitary sewer pump stations 50,200 50,200 Gas and electricity costs for WQCP 65,860 65,860 NBSU Outfall diffuser cleaning and testing (40,000) (40,000) Polymer costs for operations at WQCP 423,500 423,500 Sanitary Sewer Overflow staff training 9,000 9,000 Waste disposal services cost increase -WQCP 5,400 5,400 PW Total 812,960 812,960 Grand Total 125,000 321,000 812,960 120,000 121,800 400,000 500,000 63,500 2,464,260 21 FY2024-25 Citywide Balancing Measures Attachment 4 Per Department Submissions Funding Sources Department 100 General Fund 270 Developer Deposits Fund 710 Sewer Enterprise Fund 720 Parking District Fund 785 Information Technology Fund Grand Total City Clerk (44,685) (44,685) Supplies/Services (44,685) (44,685) Allow limited training and staff development opportunities for staff (2,825) (2,825) Reduce election outreach, eliminate candidate binder (25,860) (25,860) Reduce printing of Municode publications (10,000) (10,000) Reduce purchase of office supplies and monitor expenses (2,000) (2,000) Reduce staff development budget to only necessary certification training (4,000) (4,000) City Council (10,000) (10,000) Supplies/Services (10,000) (10,000) Reduce District Outreach line item budget (10,000) (10,000) City Manger (702,176) (702,176) Personnel (395,712) (395,712) Freeze Administrative Assistant I (125,847) (125,847) Freeze- Management Analyst II (178,075) (178,075) Transfer- Promotores 2.0 FTE to ECD (91,790) (91,790) Supplies/Services (306,464) (306,464) 15Five, Taste of SSF, CMO Holiday Luncheon (5,198) (5,198) Adjust to account for CMO getting closer to fully staffed. 3,950 3,950 Aligning budget with YTD trend. 5,490 5,490 Assumes city-wide newsletter will be issued at a similar frequency as 2022-23. (72,787) (72,787) Bio conference, CSMFO, Cal Cities City Manager conference 3,856 3,856 Canva & Constant Contact 14,702 14,702 Every Kid Deserves a Bike-Need grant funding in order to continue the program (34,000) (34,000) IT Purchases In other departments (5,025) (5,025) Largely reflects the elimination of federal lobbyist (103,096) (103,096) Lead for America fellowship (35,000) (35,000) Leaves $10k available for recurring costs, including $5k for potential Farmers Market move. (5,191) (5,191) Leaves $28k in this line item for AmeriCorps fellow ($20k) + Management Fellow ($8k) (13,380) (13,380) Leaves $5k available for recurring costs. While we've historically never exceeded $2700 in this line item, setting a new baseline at $5k with potentially additional resources needed for the Communications Manager. (11,050) (11,050) Legal services for Monsanto case- required legal cost 3,708 3,708 Membership for City and CMO- Cal Cities ($22k); Council report ($10k); National League of Cities ($6k); 7,844 7,844 Provide adequate budget for DEI Officer to attend a couple of conferences 3,950 3,950 Reduce budget for misc. items, including stickers and cups (10,350) (10,350) Reduction of discretionary budget (90,262) (90,262) Remaining budget accounts for Employee holiday luncheon ($12k), Mayor large event ($25k), National Night Out ($5k); (12,950) (12,950) SSF Community Chest (1,750) (1,750) Storage fees (1,453) (1,453) There is currently no budget in this line item 1,000 1,000 Translation & other communications services; newsletter design; texting/messaging platform. 89,712 89,712 Year-end estimate is $20k. Historically, we've never spent more than $14k (59,600) (59,600) Youth in Government ($7k) and Sister Cities ($15k) 20,416 20,416 ECD (763,157) (763,157) Personnel (313,157) (313,157) Buidling Official- Assistant (1.0 FTE) Freeze in FY2025 (210,602) (210,602) Misc Hourly (1.0 FTE) - Eliminate position (51,366) (51,366) Planner - Senior (1.0 FTE) Freeze in FY2025 (120,351) (120,351) Research and Rehab Specialist PT (0.40 FTE) - Eliminate position (22,628) (22,628) Transfer- Promotores 2.0 FTE from CMO to ECD 91,790 91,790 Supplies/Services (450,000) (450,000) BIO Conference/Holiday Decorations Reduction (Both scaled back by 50%) (150,000) (150,000) Reduce Professional services (300,000) (300,000) Finance (184,630) (184,630) Personnel (149,890) (149,890) Delay in filling the Financial Analyst II position by 4 months (55,830) (55,830) Delay in filling the Accounting Supervisor position by 4 months (60,560) (60,560) Savings in underfilling the MA position with Accountant I (33,500) (33,500) 22 FY2024-25 Citywide Balancing Measures Attachment 4 Per Department Submissions Funding Sources Department 100 General Fund 270 Developer Deposits Fund 710 Sewer Enterprise Fund 720 Parking District Fund 785 Information Technology Fund Grand Total Supplies/Services (34,740) (34,740) Limit to essential travel for trainings and conferences, staff development- no overnight travel (15,000) (15,000) Reduce temporary staffing (8,840) (8,840) Reduce contractual services budget (8,500) (8,500) Reduce Rents and leases budget (2,400) (2,400) Fire (820,574) (820,574) Personnel (713,985) (713,985) Defer hiring 3 paramedic/firefighters and promoting a Battalion Chief (298,090) (298,090) Freeze MAI position (step 1) (164,564) (164,564) Freeze Safety Inspector Trainee (Hourly) (181,331) (181,331) Reduce Training Division Overtime (70,000) (70,000) Supplies/Services (106,589) (106,589) Reduce Clothing & Personal Expenditures (500) (500) Reduce IT Purchases in Other Depts. (10,000) (10,000) Reduce Maint. And Operation Equipment (5,000) (5,000) Reduce or delay purchase of some books and publications (2,942) (2,942) Reduce or delay purchase of some office supplies (1,300) (1,300) Reduce or delay purchase of some operating supplies in training and suppression (36,936) (36,936) Reduce Staff Development / succession planning in all divisions (36,250) (36,250) Reduce Travel and Conference to only essential (6,000) (6,000) Reduce use or find other funding for postage (3,250) (3,250) Reduce use or find other funding for printed materials (4,411) (4,411) HR (132,000) (132,000) Personnel (32,000) (32,000) Eliminate or reduce youth summer internships (32,000) (32,000) Supplies/Services (100,000) (100,000) Reduce Classification & Compensation Consultant (20,000) (20,000) Reduce HR Sponsored Department Training (Leadership Academy) (20,000) (20,000) Reduce Recruitment Supplies and Services (10,000) (10,000) Reduce Safety Training Consultant (20,000) (20,000) Reduce Staff development budget (3,000) (3,000) Reduce Travel/Conferences to essential (1,000) (1,000) Reduce Youth Summer Internship Consultants (26,000) (26,000) IT 80,000 (222,968) (142,968) Supplies/Services 80,000 (222,968) (142,968) Copier Managed Services (38,000) (38,000) Reduce funding for computers and peripherals (6,825) (6,825) Reduce funding for Network Equipment (42,000) (42,000) Reduce Operation Equipment (servers, storage etc) (2,500) (2,500) Reduce Professional and Consulting Services (75,000) (75,000) Software maintenance annual increases 67,000 67,000 Software maintenance reduction (pay from non-general fund account) 80,000 80,000 Special Program Expenditure used for ad hoc projects (45,643) (45,643) Software maintenance reduction (80,000) (80,000) Library (397,470) (397,470) Personnel (258,590) (258,590) Delay hiring Management Analyst II for six months (1 FTE) (112,998) (112,998) Librarian I - Hourly (0.06 FTE) (6,311) (6,311) Librarian II - Hourly (0.09 FTE) (9,919) (9,919) Library Assistant I - Hourly- 5% cut reduce in assistance with equipt, collection, programs (.20 FTE); Reduce Makerspace open hours, class visits, special programming (15,132) (15,132) Library Clerk - Hourly (0.25 FTE); reduce Makerspace open hours, class visits, special programming (13,396) (13,396) Library Page - Hourly (2 FTE) (93,757) (93,757) Literacy Services Assistant Coordinator - Hourly (0.02 FTE) (1,583) (1,583) Literacy Services Assistant I - Hourly (0.02 FTE) (1,434) (1,434) Office Specialist - Hourly (0.05 FTE) (4,060) (4,060) Supplies/Services (138,880) (138,880) Absorb special a/v and digital collections into other line items (10,500) (10,500) 23 FY2024-25 Citywide Balancing Measures Attachment 4 Per Department Submissions Funding Sources Department 100 General Fund 270 Developer Deposits Fund 710 Sewer Enterprise Fund 720 Parking District Fund 785 Information Technology Fund Grand Total Cancellation of Wall Street Journal and digital science magazines recently added to collection (18,567) (18,567) Explore alternate sources to support network costs (6,938) (6,938) Find another source for mainenance of equipment or cancel maintenance contracts (4,000) (4,000) GRANTS (10,500) (10,500) Hold off on purchasing backup supplies until very low inventory (1,400) (1,400) Reduce adult books and magazines collections by approx. 10% (10,000) (10,000) Reduce adult programming of special speakers events (1,000) (1,000) Reduce Gene Mullin CLC (GMCLC) printing budget (210) (210) Reduce GMCLC maintenance of equipment budget (315) (315) Reduce GMCLC postage budget (200) (200) Reduce Grand Library a/v collections by 6% (1,000) (1,000) Reduce Main Library children's a/v collections by 8% (1,000) (1,000) Reduce Main Library special family and Makerspace programs and supplies (4,000) (4,000) Reduce meeting and mileage expenses - GMCLC (100) (100) Reduce meeting and mileage expenses - Project Read (400) (400) Reduce meeting and mileage expenses general library (400) (400) Reduce Phone service budget (1,000) (1,000) Reduce popular adult a/v collections by approxiately 10% (9,700) (9,700) Reduce promotional support for special programs (400) (400) Reduce special programming for children and families (1,000) (1,000) Reduce staff development funds; important to maintain some funding to support new staff (3,000) (3,000) Reduce technical processing, general library, special programming supply budgets (5,000) (5,000) Reduce Technology Equipment and Software Upgrades (4,000) (4,000) Severely limit travel, conferences (10,000) (10,000) This is the mandatory library network and equipment maintenance increases as a result of increased technology and uses in the new library; this was submitted as an essential budget increase that is not approved and will be a decrease, which will have to be covered with additional reductions to Supplies and Services. (34,250) (34,250) Park & Rec (263,380) (263,380) Supplies/Services (263,380) (263,380) Arborist Technician (1.0 FTE) (141,130) (141,130) Cultural Activities Grant (10,000) (10,000) Eliminate Summer 2025 Field trips- budget line reduction (60,000) (60,000) Stationary Engineer (1.0 FTE)) (52,250) (52,250) Police (2,034,709) (2,034,709) Personnel (2,028,209) (2,028,209) Communications Dispatcher (1.0 FTE) (149,899) (149,899) Miscellaneous Hourly (0.38 FTE) (50,772) (50,772) Parking Enforcement Officer (2.0 DTE) (262,666) (262,666) Police Officer (8.0 FTE)- Police officer positons cannot be frozen due to minimum staffing and the need to provide continuous essential emergency services to the public. The vacancies will be replenished with new officers, but that will happen gradually (1,528,192) (1,528,192) Police Property/Evidence Asst (.48 FTE) (36,680) (36,680) Supplies/Services (6,500) (6,500) Investigative Database. Future cost savings. Service eliminated. (6,500) (6,500) Public Works (694,890) 164,794 131,496 (398,600) Personnel (296,290) 164,794 131,496 - Public Works Maintenance Worker - Hourly (1.50 FTE) (131,496) 131,496 - Public Works Maintenance Worker - Senior (1.0 FTE) (164,794) 164,794 - Supplies/Services (398,600) (398,600) Eliminate back up street sweeping services. (62,100) (62,100) Purchase of one (1) Chevy Bolt (45,000) (45,000) Purchase of one (1) Roland RTW-640 64" Sign Printer. (41,500) (41,500) Sewer Service Low Income Program (250,000) (250,000) Grand Total (6,047,671) 80,000 164,794 131,496 (222,968) (5,894,349) 24 FY 2024-25Budget Study Session Presentation to Budget Sub-committee Karen Chang, Director of Finance May 8, 2024 25 Agenda FY 2024-25 Budget Overview FY 2024-25 General Fund Proposed Budget FY 2024-25 New Request Positions Supplies & Services FY 2024-25 Balancing Measures Q & A 26 FY 2023-24 Year End Projections ($ Millions) 3 Description Target Amount Revenues $146.0 Add: PO/CIP Budget rollover 12.4 Available Revenue Resources 158.4 Less: Expenditure (155.3) Surplus / (Deficit)$3.1 27 Projected City Reserves (As of June 30, 2024) ($ Millions) 4 General Reserves (20%of Revenue)$27.0 Pension Stabilization Reserves 5.8 Infrastructure Reserves 4.4 Total Reserve Levels $37.2 Available Unassigned GF Fund Balance 25.6 Reserves &Surplus Fund Balance $62.8 28 Revenue Assumptions 1. Property Tax revenue –projected higher based on historical trend 2. Sales Tax revenue –projected higher based on consultant’s forecast 3. TOT, Franchise Tax & Permit Fee –Modest increase (2-3%) 4. Department input updated 5. No ARPA funds 5 29 Expenditure Assumptions 1. Personnel Costs ‒Include 3% COLA (~$3M) ‒Increase in health care costs (Kaiser 17%, Blue Shield 7.9%) (GF~$1.3M) ‒Pension cost increase (GF ~$2.1M) 2.Supplies & Services -Use Base Line budget (FY 2023 + mid-year –one-time expenditures) 3. Interdepartmental Charges –Stay flat 4. New Request –Not approve unless it has no negative impact to GF 6 30 FY 2024-25 General Fund – Revenues ($ Thousands)FY 2024-25 Budgeted Revenue –($136.1M) Revenue Type FY 2023 Actual FY 2024 Adopted Budget FY 2024 Adjusted Budget FY 2025 Proposed Budget % of Total Projected Revenue Property Taxes 54,041$ 47,980$ 49,280$ 50,200$ 37% Sales Taxes 21,735 23,352 21,952 23,213 17% Transient Occupancy Tax 16,735 14,910 14,000 14,500 11% Other Taxes 8,060 6,950 6,650 6,650 5% Franchise Fees 5,241 4,600 4,600 6,200 5% License & Permits 20,468 16,963 12,463 13,610 10% Fines & Forfeitures 757 700 700 873 1% Intergovernmental (Grants)3,559 3,140 6,010 3,588 3% Charges for Services 11,673 9,709 11,569 10,562 8% Use of Money & Property (341) 3,940 4,450 4,455 3% Other Revenues 353 338 338 283 0% Transfers In 5,284 2,594 3,718 1,934 1% PO/CIP Rollover - - 12,438 - 0% ARPA - 4,987 4,987 - 0% Total 147,565$ 140,163$ 153,155$ 136,068$ 100% 31 FY 2024-25 General Fund – Expenditures by Dept ($ thousands) -$147.5 M DEPARTMENT FY 2023 Actual FY 2024 Adopted Budget FY 2024 Adjusted Budget FY 2025 Based Budget FY 2025 New Request- payroll FY 2025 New Request - SS Cost Saving Measures FY 2025 Proposed Budget City Council 242$ 269$ 269$ 296$ 20$ -$ (10)$ 306$ City Clerk 1,028 1,265 1,265 1,243 - - (45) 1,198 City Treasurer 35 133 133 132 - 38 - 170 City Attorney 1,220 1,109 1,109 1,109 - 350 - 1,459 City Manager’s Office 3,820 4,931 5,221 4,553 40 - (702) 3,891 Finance Department 3,090 3,992 4,520 4,067 - - (185) 3,883 Non-Departmental*9,357 1,894 1,894 1,894 - - - 1,894 Human Resources Dept.2,221 2,885 2,995 2,832 - - (132) 2,700 Economic & Community Develop.11,771 8,500 12,514 9,197 - 139 (763) 8,573 Fire Department 35,513 32,762 34,339 36,604 - 852 (821) 36,636 Police Department 36,283 36,838 36,952 39,155 63 710 (2,035) 37,893 Public Works Department 7,936 11,954 13,822 12,934 46 - (695) 12,285 Library Department 6,475 8,045 8,473 8,666 167 23 (397) 8,458 Parks and Recreation Dept.20,503 24,675 27,394 27,164 268 40 (263) 27,209 CIP 689 900 4,376 900 - - - 900 TOTAL 140,183$ 140,152$ 155,276$ 150,746$ 604$ 2,152$ (6,048)$ 147,455$ Information Technology 3,771$ 4,443$ 5,038$ 4,369$ -$ 122$ (143)$ 4,321$ 32 FY 2024-25 General Fund – Expenditures by Category ($Thousands)FY 2024-25 Budgeted Expenditure $147.5M) Expenditures FY 2023 Actual FY 2024 Adopted Budget FY 2024 Adjusted Budget FY 2025 Based Budget FY 2025 New Request- payroll Balancing Measures FY 2025 Proposed Budget % of Total Expenditure PAYROLL 103.50$ 105.90$ 106.80$ 117.30$ 0.60$ (4.20)$ 113.80$ 78% SUPPLIES & SERVICES 27.00 23.30 33.20 22.50 2.20 (1.90) 22.80 15% CAPITAL OUTAY 0.20 - 0.90 - - - - 0% INTERDEPARTMENTAL CHARGES 8.10 9.50 9.50 9.50 - - 9.50 6% TRANSFERS 1.40 1.40 4.90 1.40 - - 1.40 0.01 TOTAL 140.20 140.10 155.30 150.70 2.80 (6.10) 147.50 100% 33 General Fund Summary-FY 2024-25 ($ millions) 10 Description Amount PROJECTED REVENUES $136.1 PROJECTED EXPENDITURES (147.5) Deficit ($ 11.4) 34 Budget Balancing Strategies ($ Millions) 11 Description Target Amount FY 24-25 Deficit $ ( 11.4) + Measure W 3.0 + Use of General Fund Reserve 8.4 RESULT BALANCED 35 New Payroll Requests (FY2024-25) 12 Departments FTE Salaries and Benefits (General Fund) Salaries and Benefits Solid Waste Reduction Fund) City Council 0.00 20,000 City Manager 0.00 40,000 Library 1.45 166,584 Parks & Recreation 4.50 268,483 Police 0.00 62,510 Public Works -0.50 45,873 44,745 Grand Total 5.45 603,450 44,745 FY2024-25 NEW PAYROLL REQUESTS 36 Supplies & Services Requests (FY2024-25)-GF 1337 Supplies & Services Requests (FY2024-25)-Other Funds 1438 Cost Savings Measures Summary(FY2024-25)-GF 15 DEPARTMENT Cost Saving Measures City Council (10,000) City Clerk (44,685) City Treasurer - City Attorney - City Manager’s Office (702,176) Finance Department (184,630) Non-Departmental*- Human Resources Dept.(132,000) Economic & Community Develop.(763,157) Fire Department (820,574) Police Department (2,034,709) Public Works Department (694,890) Library Department (397,470) Parks and Recreation Dept.(263,380) CIP - TOTAL (6,047,671) Information Technology (142,968) 39 Projected City Reserves (As of June 30, 2025) ($ Millions) 16 General Reserves (20%of Revenue)$27.0 Pension Stabilization Reserves 5.8 Infrastructure Reserves 3.6 Total Reserve Levels $36.4 Available Unassigned GF Fund Balance 17.2 Reserves &Surplus Fund Balance $53.6 40 Recommendation ($ Millions) 17 Description Target Amount FY 24-25 Deficit $( 11.40) + Measure W 3.0 + Use of General Fund Reserve Unassigned Fund Balance 8.4 RESULT BALANCED 41 Next Step Planned Meetings to Discuss Budget –City Council Study Session: May 22, 2024 –City Council Adoption: June 12, 2024 1842 QUESTIONS? 4Q&A 1943 City of South San Francisco Legislation Text P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, CA File #:24-377 Agenda Date:5/8/2024 Version:1 Item #:3. Report regarding proposed Capital Improvement Program for the Fiscal Year 2024-25.(Eunejune Kim, Director of Public Works/City Engineer, and Matthew Ruble, Principal Engineer) RECOMMENDATION Staff recommends that the Budget Standing Committee of the City Council review and provide feedback on the proposed Capital Improvement Program for the Fiscal Year 2024-25. BACKGROUND/DISCUSSION The Capital Improvement Program (CIP)outlines large capital expenditures and infrastructure improvement projects throughout the City.City departments identify necessary improvements and prioritize project implementation when preparing the CIP. City staff considers the following criteria when selecting projects for inclusion in the CIP: •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 Based on these guidelines,staff proposes the following Fiscal Year (FY)2024-25 CIP budget appropriations. The proposed FY 2024-25 CIP budget is $169.07 million,with $19.30 million of new appropriations and approximately $150.89 million of previous year appropriations for continuing projects.Additionally,the City has identified $1.12 million in Infrastructure Reserves within two (2)project budgets and $18.9 million in Sewer Enterprise Funds within nine (9)projects,which can be redirected back to the City’s budget to help support the CIP budget needs for FY 2024-25 and out-years. CIP Project Summary The FY 2024-25 CIP includes 185 projects: 13 new projects and 172 continuing projects. The CIP is comprised of six (6) project types: •Public Facilities •Parks •Storm Drains •Sanitary Sewer City of South San Francisco Printed on 5/6/2024Page 1 of 7 powered by Legistar™44 File #:24-377 Agenda Date:5/8/2024 Version:1 Item #:3. •Streets •Traffic The following brief overview identifies proposed new projects and additional appropriation requests for continuing projects. Public Facilities Projects - These projects renovate, construct, and improve city buildings and infrastructure. New appropriations request: ·(pf2207)Library,Parks &Recreation -Phase II (Bonds)-Construction Phase of Community Civic Campus Phase II: Library, Parks & Recreation Center. - $960,000 ·(pf2003)Police Station -Phase I (bonds)-Construction Phase of Community Civic Campus Phase I: Police Department and 911 Dispatch Center. - $140,000 ·(pf2210)City Broadband Expansion Project -Construction of Conduits and Installation of Fiber Optic Cables in the Westborough Area. - $500,000 ·New project (pf2501)Corporation Yard Roof Replacement -Replace the Membrane Roof at the Corporation Yard. - $900,000 ·New project (pf2502)Facility Condition Assessment -To conduct a Facility Condition Assessment.- $200,000 Total New Public Facilities Appropriation Requests = $2.7 million Parks Projects -These projects replace and improve playgrounds,renovate baseball fields,and expand parks at city-owned public spaces. New appropriations request: ·New project (pk2501)Dedicated Pickleball Courts -Perform a site analysis to determine the best locations for a pickleball court, followed by design and construction. - $650,000 Total New Parks Appropriation Requests = $650,000 Storm Drain Projects -Projects repair and improve storm drains and infrastructure to reduce pollution run-off into the San Francisco Bay. New appropriations request: ·(sd2402)SSF Shoreline Protection and Connectivity Project -Conduct a feasibility study to explore preventive measures against sea level rise and examine opportunities to enhance connectivity and protect the community. - $200,000 ·New project (sd2501)Storm Drain Improvement Project -Carry out maintenance and repairs as City of South San Francisco Printed on 5/6/2024Page 2 of 7 powered by Legistar™45 File #:24-377 Agenda Date:5/8/2024 Version:1 Item #:3. recommended in the Storm Drain Master Plan findings. - $1,000,000 ·New project (sd2502)Storm Water Trash Capture Devices -Install Trash Capture Device (TCD)units to ensure the City achieves 100% compliance with the Municipal Regional Permit (MRP). - $160,000 Total New Storm Drain Appropriation Requests = $1.36 Million Sanitary Sewer Projects:Projects maintain the Water Quality Control Plant (WQCP),Collection System Pumps Stations, and sanitary sewer lines within the City. New appropriations request: ·(ss2001)Sanitary Sewer Rehabilitation -This project will result in new paint and protective coatings on buildings and pipes at the Water Quality Control Plant (WQCP).FY 2024-25 for construction phase of project. - $1,000,000 ·(ss2401)Oyster Point Sewer Main Upsize -Co-funding agreement with Kilroy to design and construct a sewer main upsize for the Oyster Point Sewer Main.FY 2024-25 for construction phase of project.- $4,000,000 ·(ss2403)Variable Frequency Drive Replacement Project -Sanitary pump Stations -Replacement of variable frequency drive components associated with Plant pumping system originally installed in 1998. FY 2024-25 for construction phase of project. - $980,000 ·(ss2409)Industrial Coating Reapplication Project -WQCP and Pump Stations -Coating of WQCP and pump stations. - $500,000 ·New project (ss2501)Sanitary Pump Stations 5,6,7 Upgrade Project -Planning,engineering design, equipment selection,installation,testing,and ongoing maintenance to improve the functionality and reliability of infrastructure at three sanitary pump stations. -$300,000 ·New project (ss2502)Sanitary Sewer Rehab FY 2024-25 -Annual sewer rehabilitation project at locations citywide based on the Sewer Master Plan analysis and recommendations. - $500,000 Total New Sanitary Sewer Appropriation Requests = $7.28 million Streets Projects :These projects repair bridges,resurface streets,improve medians and sidewalks,and study the feasibility of proposed roadway and rail extensions. New appropriations Request: ·(st2303)Bridge Asset Management Program -Cost proposal to inspect pedestrian bridges,non-National Bridge Inventory (NBI)bridges,and retaining wall structures owned by the City.This includes City of South San Francisco Printed on 5/6/2024Page 3 of 7 powered by Legistar™46 File #:24-377 Agenda Date:5/8/2024 Version:1 Item #:3. Bridge Inventory (NBI)bridges,and retaining wall structures owned by the City.This includes preparing the Fiscal Year 24-25 Bridge Preventive Maintenance Program (BPMP)funding application and entering data on structure conditions into the asset management program software. - $140,000 ·(st1703)Bridge Preventative Master Plan -Project to address maintenance issues related to bridges,not covered by grants. - $220,000 ·(st2002)Survey Monument Replacement Project -This project establishes a new east-west route within the City for motorists, and pedestrians. - $45,000 ·New project (st2501) Downtown Vision Zero Improvements - Conduct a study of High Injury Network streets in the downtown area and develop design drawings within the right-of-way (ROW) to enhance safety for pedestrians and bicyclists. - $400,000 ·New project (st2502)2025 Street Surface Seal (Area 1)-Design and construct street surface seal project as part of the Pavement Management Program (PMP).This program cycles through Areas 1 to 6, addressing one area each year.The project involves applying a new surface seal to streets and adding new thermoplastic striping, legends, and crosswalks. - $3,500,000 ·New project (st2503)2025 Pavement Repair and Crack Seal -Project to repair roadway issues like cracks,raveling,and potholes in asphalt concrete (AC)pavement;a preventive maintenance program that includes localized repairs and crack sealing. - $1,000,000 ·New project (st2504)Reconnecting Communities -Highways to Boulevards -Project to address the barriers to transit crossings at El Camino Real,US Highway 101,the railroad tracks,and Colma Creek. - $200,000 ·New project (st2505)2026 Surface Seal Project (Area 2)-Design street surface seal project as part of the Pavement Management Program (PMP).This program cycles through Areas 1 to 6,addressing one area each year.The project involves applying a new surface seal to streets and adding new thermoplastic striping, legends, and crosswalks. - $200,000 Total New Streets Appropriation Requests = $5.7 million Traffic Projects:These projects focus on arterials,corridors,and key intersections within the City including adaptive traffic signals to provide better traffic flow,improve pedestrian safety,traffic calming,and better bicycle rider safety on city streets. New appropriations Request: $1.6 million ·(tr2404)Chestnut/Commercial Traffic Signal -Design and construct new traffic signals and implement City of South San Francisco Printed on 5/6/2024Page 4 of 7 powered by Legistar™47 File #:24-377 Agenda Date:5/8/2024 Version:1 Item #:3. ·(tr2404)Chestnut/Commercial Traffic Signal -Design and construct new traffic signals and implement additional improvements at intersections to enhance pedestrian safety. - $1,500,000 ·New project (tr2501)Vision Zero -This project aims to secure grants to develop a Vision Zero Action Plan,comprising policies,programs,and initiatives geared towards eliminating traffic-related fatalities and serious injuries. - $100,000 Total New Traffic Appropriation Requests = $1.6 million Infrastructure Reserve Refund:To release financial resources for urgent needs,the City has decided to close two projects.This action will free up funds from the Infrastructure Reserve,allowing us to prioritize immediate requirements. ·(pf2302) Annex Replacement & Landscape - Initial study to replace the City Hall Annex and update the City Hall block landscape. - ($405,000) ·(pk2201) Replace City Pool Complex - Project to build a new aquatics center to replace the existing pool. - ($716,613.30) TOTAL REFUND TO Infrastructure Reserve = $1,121,613.30 Sewer Enterprise Fund Refund:To support sustainable resource management,the City has thoroughly reviewed current and upcoming projects dependent on Sewer Enterprise Funds.As a result,we have decided to close specific projects to reallocate these funds more effectively for the FY 2024-25 budget and subsequent years. We plan to revisit these projects in the future. ·(ss1502)Pump Station 4 Redundant Force Main -The PS4 is the only main conveyance line East of 101. - ($4,050,000) ·(ss2301)WQCP Diffused Air Flotation Thickener Replacement -Upgrade the existing flotation thickeners to accommodate plant processes. - ($4,350,000) ·(ss2402)Variable Frequency Drive Modernization Project -Replacement of variable frequency drive components associated with Plant pumping systems originally installed in 1998. - ($800,000) ·(ss2405)Headworks No.1 Grit Chamber Tower Rehab Project WQCP -Evaluate,design and construct replacement grit tower structures installed in 1951. - ($2,000,000) City of South San Francisco Printed on 5/6/2024Page 5 of 7 powered by Legistar™48 File #:24-377 Agenda Date:5/8/2024 Version:1 Item #:3. ·(ss2406) Transformer K Replacement Project - ($200,000) ·(ss2407)SB 1383 Organics Diversion Mandate Compliance and Cogeneration Expansion Project - Evaluate,engineer,and design processing and storage equipment to comply with SB 1383 mandate and enhance renewable biogas production.This project will expand sustainable onsite power generation and heat recovery. - ($4,900,000) ·(ss2408)Biosolids Drying and Recycling Project -Evaluate,design,and construct equipment associated with decreased moisture content of biosolids to comply with SB 1383 mandate.Renewable products such as biochar, soil amendments, and fly ash enhancers. - ($900,000) ·(ss2409)Industrial Coating Reapplication Project -WQCP and Pump Stations -Project to maintain applied industrial coatings to Plant and pump station metal assets. - ($1,500,000) ·(ss2410)WQCP Operations Control Center Rehabilitation Project -Project to modernize operations control center to achieve the following goals -1)better ergonomics,2)replacement terminals for Plant SCAEDA supervisory control and data acquisition, 3) replacement of HVAC system. - ($200,000) TOTAL REFUND to Sewer Enterprise Fund = $18.9 million FUNDING The staff report outlines the proposed allocations for the FY 2024-25 CIP budget totaling $150.17 million.This includes $19.30 million in new appropriations and approximately $150.89 million carried over from prior years for ongoing projects.In addition,the report identifies potential financial efficiencies by reallocating $1.12 million from Infrastructure Reserves and $18.9 million from Sewer Enterprise Funds.These funds will be redirected to enhance the City’s budget by closing 11 projects,supporting both the current fiscal year and future CIP needs.Detailed funding allocations for each project,sorted by funding source,are provided in the attached document,which includes both new appropriation requests and the offsetting return of funds.Additionally,the distribution of the new $19.3 million in appropriations is visually represented in the accompanying pie chart. This strategic financial planning ensures that the City continues to prioritize efficient,responsible management of resources to meet our community’s infrastructure needs. City of South San Francisco Printed on 5/6/2024Page 6 of 7 powered by Legistar™49 File #:24-377 Agenda Date:5/8/2024 Version:1 Item #:3. CONCLUSION Staff will amend the FY 2024-25 CIP based on direction from the Budget Subcommittee and present the revised CIP at the Special City Council Study Session May 22, 2024. Attachments: 1.Proposed Capital Improvement Program Requests by Funding Source FY 2024-25 City of South San Francisco Printed on 5/6/2024Page 7 of 7 powered by Legistar™50 $650,000.00 $333,334.00 $566,667.00 $160,000.00 $160,000.00 $650,000.00 $200,000.00 $333,333.00 $1,366,667.00 $1,900,000.00 $220,000.00 $200,000.00 $900,000.00 $500,000.00 $838,386.70 $45,000.00 $140,000.00 -$405,000.00 -$716,613.30 $200,000.00 $200,000.00 $45,000.00 $100,000.00 $2,200,000.00 $4,000,000.00 $4,000,000.00 $1,100,000.00 $200,000.00 $1,500,000.00 $400,000.00 sd2502 Storm Water Trash Capture Devices st2303 Bridge Asset Management Program pf2302 City Hall Annex Replacement and Landscape Improvement pk2201 Aquatics Center st1703 Bridge Preventative Maintenance Program pf2502 Facility Condition Assessment pf2501 Corporation Yard Roof Replacement pf2210 Westborough Area Broadband Expansion FY2025 $140,000.00 $960,000.00 pk2501 Dedicated Pickleball Courts st2503 2025 Pavement Repair and Crack Seal st2502 2025 Street Surface Seal (Area 1 - Westborough) st2505 2026 Surface Seal Project st2503 2025 Pavement Repair and Crack Seal st2502 2025 Street Surface Seal (Area 1 - Westborough) ss2401 Oyster Point Sewer Main Upsize sd2402 SSF Shoreline Protection and Connectivity Project st2002 Survey Monument Replacement Project pf2003 Police Station - Phase I (Bonds) pf2207 Library Parks & Recreation - Phase II (Bonds) st2504 Reconnecting Communities - Highways to Boulevards tr2404 Chestnut/Commercial Traffic Signal st2501 Downtown Vision Zero Improvements tr2501 Vision Zero Request Title Road Maintenance Acct (SB1)st2503 st2502 Total Solid Waste Reduction Park Land Construction pk2501 Total Park Land Construction st2503 st2502 Total Measure A Solid Waste Reduction sd2502 pf2501 pf2210 Total Infrastructure Reserves Measure A st2505 Infrastructure Reserves st2303 pf2302 pk2201 st1703 pf2502 Total East of 101 Traffic Impact Fees Gas Tax st2002 Total Gas Tax East of 101 Sewer Impact Fee ss2401 Total East of 101 Sewer Impact Fee East of 101 Traffic Impact Fees sd2402 Citywide Traffic Impact Fee st2504 tr2404 st2501 tr2501 Total Citywide Traffic Impact Fee Funding Source Project Number Bonds/Loans pf2003 pf2207 Total Bonds/Loans 51 ss2301 ss1502 Pump Station 4 Redundant Force Main -$4,050,000.00ss1502 Storm Water sd2501 Total Storm Water Total Funding Sources -$726,613.30 $1,000,000.00 $1,000,000.00 $500,000.00 $500,000.00 $980,000.00 $300,000.00 $1,000,000.00 $333,333.00 $1,566,666.00 $1,899,999.00 $900,001.00 sd2501 Storm Drain Improvement Project ss2001 Sanitary Sewer Rehabilitation ss2502 Sanitary Sewer Rehab FY 2024-25 ss2409 Industrial Coating Reapplication Project - WQCP and Pump Stations ss2403 Variable Frequency Drive Replacement Project - Sanitary Pump Stations ss2501 Sanitary Pump Stations 5, 6, 7 Upgrade Project st2503 2025 Pavement Repair and Crack Seal st2502 2025 Street Surface Seal (Area 1 - Westborough) ss2403 ss2501 ss2001 Total Sewer Enterprise st2502 Total SMC Measure W Sewer Enterprise ss2502 ss2409 Total Road Maintenance Acct (SB1) SMC Measure W st2503 ss2301 WQCP Diffused Air Flotation Thickener Replacement -$4,350,000.00 ss2402 ss2402 Variable Frequency Drive Modernization Project -$800,000.00 ss2405 ss2405 Headworks No. 1 Grit Chamber Tower Rehab Project WQCP -$2,000,000.00 ss2406 ss2406 Transformer K Replacement Project -$200,000.00 ss2407 ss2407 SB 1383 Organics Diversion Mandate Compliance and Cogeneration Expansion Project -$4,900,000.00 ss2408 ss2408 Biosolids Drying and Recycling Project -$900,000.00 -$15,620,000.00 ss2409 ss2409 Industrial Coating Reapplication Project - WQCP and Pump Stations -$1,500,000.00 ss2410 ss2410 WQCP Operations Control Center Rehabilitation Project -$200,000.00 52 CAPITAL IMPROVEMENT PROGRAM FY2024-25 BUDGET STANDING COMMITTEE MAY 8, 2024 Government Code Section 54957.5 SB 343 Item Agenda: 05/08/2024 Budget SP CC Item 3 Capital Improvement Program FY2024-25 CIP BY PROJECT TYPE Capital Improvement Program FY2024-25 FY 2024-25 CIP PROJECT REQUESTS BY FUNDING SOURCE Total $19,295,000.00 Capital Improvement Program FY2024-25 PUBLIC FACILITIES PROJECTS – NEW APPROPRIATIONS REQUEST •(pf2207) Library, Parks & Recreation - Phase II (Bonds) - $960,000 •(pf2003) Police Station - Phase I (Bonds) - $140,000 •(pf2210) City Broadband Expansion Project - $500,000 •New project (pf2501) Corporation Yard Roof Replacement - $900,000 •New project (pf2502) Facility Condition Assessment - $200,000 Total New Public Facilities Appropriation Requests = $2.7 million Capital Improvement Program FY2024-25 PARKS PROJECTS– NEW APPROPRIATIONS REQUEST •New project (pk2501) Dedicated Pickleball Courts - $650,000 Total New Parks Appropriation Requests = $650,000 Capital Improvement Program FY2024-25 STORM DRAIN– NEW APPROPRIATIONS REQUEST •(sd2402) SSF Shoreline Protection and Connectivity Project - $200,000 •New project (sd2501) Storm Drain Improvement - $1,000,000 •New project (sd2502) Storm Water Trash Capture - $160,000 Total New Storm Drain Appropriation Requests = $1.36 Million Capital Improvement Program FY2024-25 SANITARY SEWER – NEW APPROPRIATIONS REQUEST •(ss2001) Sanitary Sewer Rehabilitation - $1,000,000 •(ss2401) Oyster Point Sewer Main Upsize - $4,000,000 •(ss2403) Variable Frequency Drive Replacement Project - $980,000 •(ss2409) Industrial Coating Reapplication Project - $500,000 •New project (ss2501)Sanitary Pump Stations 5, 6, 7 Upgrade Project - $300,000 •New project (ss2502) Sanitary Sewer Rehab FY 2024-25 - $500,000 Total New Sanitary Sewer Appropriation Requests = $7.28 million Capital Improvement Program FY2024-25 STREETS PROJECTS – NEW APPROPRIATIONS REQUEST •(st2303) Bridge Asset Management Program - $140,000 •(st1703) Bridge Preventative Master Plan - $220,000 •(st2002) Survey Monument Replacement Project - $45,000 •New project (st2501) Downtown Vision Zero Improvements - $400,000 •New project (st2502) 2025 Street Surface Seal (Area 1) - $3,500,000 •New project (st2503) 2025 Pavement Repair and Crack Seal - $1,000,000 •New project (st2504) Reconnecting Communities - Highways to Boulevards - $200,000 •New project (st2505) 2026 Surface Seal Project (Area 2) - $200,000 Total New Streets Appropriation Requests = $5.7 million Capital Improvement Program FY2024-25 TRAFFIC PROJECTS – NEW APPROPRIATIONS REQUEST •(tr2404) Chestnut/Commercial Traffic Signal - $1,500,000 •New project (tr2501) Vision Zero - $100,000 Total New Traffic Appropriation Requests = $1.6 million Capital Improvement Program FY2024-25 INFRASTRUCTURE RESERVE REFUND •(pf2302) Annex Replacement & Landscape - ($405,000) •(pk2201) Replace City Pool Complex - ($716,613.30) TOTAL REFUND to Infrastructure Reserve = $1,121,613.30 Capital Improvement Program FY2024-25 SEWER ENTERPRISE FUND REFUND •(ss1502) Pump Station 4 Redundant Force Main - ($4,050,000) •(ss2301) WQCP Diffused Air Flotation Thickener Replacement - ($4,350,000) •(ss2402) Variable Frequency Drive Modernization Project - ($800,000) •(ss2405) Headworks No. 1 Grit Chamber Tower Rehab Project WQCP - ($2,000,000) •(ss2406) Transformer K Replacement Project -($200,000) •(ss2407) SB 1383 Organics Diversion Mandate Compliance and Cogeneration Expansion Project - ($4,900,000) •(ss2408) Biosolids Drying and Recycling Project - ($900,000) •(ss2409) Industrial Coating Reapplication Project - WQCP and Pump Stations - ($1,500,000) •(ss2410) WQCP Operations Control Center Rehabilitation Project - ($200,000) TOTAL REFUND to Sewer Enterprise Fund = $18.9 million Capital Improvement Program FY2024-25 Questions / Discussion