AGENDA PACKET
Town of Atherton
City Council
FEBRUARY 01,2023
STUDY SESSION AND SPECIAL MEETING
4:00 PM.
This meeting is being held virtually and inperson
Council Chambers
80 Fair Oaks Lane
Atherton, CA 94027
This meeting is being held via teleconference pursuant to Government Code section 54953(e) (1)(B) and in compliance with the Brown Act. Section 54953(e)(1)(B) permits the Town to hold a meeting during a proclaimed state of emergency via teleconference in order to determine whether as a result of the emergency meeting in person would present an imminent risk to attendees' health or safety. The meeting will be held by tele or video conferencing.
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This Agenda may not reflect the actual order of items. The order of items is subject to change based on Council action.
SPECIAL MEETING
ROLL CALL – Holland, DeGolia,Lewis, Vice Mayor HawkinsManuelian, Mayor Widmer PUBLIC COMMENT – Public comments can be made by teleconference or emailed directly to the City Clerk, Anthony Suber at [email protected] (This portion of the meeting is reserved for persons wishing to address the Council on any item on the Special Meeting Agenda; no other business shall be considered. Each speaker may address the Council for a limit of three minutes.)
ACTION ITEM
1. RECEIVE AND FILE THE MIDYEAR BUDGET REPORT FOR FY 2022/23 Report: ROBERT BARRON III, FINANCE DIRECTOR
Recommendation: It is recommended that the Council receive and file the MidYear Budget Review for the General Fund for FY 2022/23.
Description: This item involves a presentation by staff of the midyear budget review for the fiscalyear2022/2023Councilwilldiscussahighlevelviewofrevenueandexpendituresfor Town of Atherton City Council Special Meeting and Study Session Packet – February 01, 2023
PUBLIC COMMENT – Public comments can be made by teleconference or emailed directly to the City Clerk, Anthony Suber at [email protected] (This portion of the meeting is reserved for persons wishing to address the Council on any item on the Special Meeting Agenda; no other business shall be considered. Each speaker may address the Council for a limit of three minutes.)
ACTION ITEM
1. RECEIVE AND FILE THE MIDYEAR BUDGET REPORT FOR FY 2022/23 Report: ROBERT BARRON III, FINANCE DIRECTOR
Recommendation: It is recommended that the Council receive and file the MidYear Budget Review for the General Fund for FY 2022/23.
Description: This item involves a presentation by staff of the midyear budget review for the fiscal year 2022/2023. Council will discuss a highlevel view of revenue and expenditures for the Town General Fund. It updates the Council on the Town’s financial position at the halfway point of the fiscal year. Discussion may include feedback on operations, the Town Center Project, and CIP budget.
STUDY SESSION
2. REVIEW AND PROVIDE DIRECTION TO STAFF REGARDING LEGISLATIVE
ADVOCACY
Report: GEORGE RODERICKS, CITY MANAGER
Recommendation: It is recommended that the Council review and provide direction to staff regarding legislative advocacy.
Description: The City Council will review and provide direction related to C/CAG and League of California Cities legislative policy platforms.
COUNCIL REPORTS/COMMENTS
ADJOURN
Town of Atherton City Council Special Meeting and Study Session Packet – February 01, 2023
Item No. 1
Town of Atherton
CITY COUNCIL STAFF REPORT – ACTION ITEM
TO: HONORABLE MAYOR AND CITY COUNCIL
GEORGE RODERICKS, CITY MANAGER
FROM: ROBERT BARRON III, FINANCE DIRECTOR
DATE: FEBRUARY 1, 2023
SUBJECT: RECEIVE AND FILE THE MID-YEAR BUDGET REPORT FOR FY 2022/23
RECOMMENDATION
Receive and file the Mid-Year Budget Review for the General Fund for FY 2022/23.
BACKGROUND
The FY 2022/23 Budget reflects the Town’s positive financial outlook. The City Council priorities continue to focus on reducing long-term liabilities, addressing capital project needs, and ensuring that operational needs are met. The City Council recently authorized the use of the OPEB Trust account to begin the payment of retiree health expenses. This will begin in March and staff estimates that the use of the Trust will reduce General Fund expenditures by $150,000 for the remainder of the fiscal year. The next budget will reflect a decrease of retiree health expense from the General Fund of approximately $550,000.
The Town continues its reliance on Property Taxes as the single, most important revenue source for the Town’s General Fund. These revenues continue to be robust even as interest rates have seen a steep rise. Most other revenues have remained static and continued as anticipated. There are increases in building and planning revenue due to permit activity and construction time limit forfeiture on projects. Public works and park revenues also show increases. Staff works to augment revenues through grants as well as community and regional partnerships, where possible.
In FY 2022/23 Budget, the City Council allocated $3.34 million towards the Town Capital Improvement Program. The Town is shifting its focus from the Town Center Project to other capital project needs in drainage, bike and pedestrian, street maintenance, traffic management, green infrastructure and the Park. Other projects include the Atherton Station Building design review for integration into the new Town Center.
The General Fund is the only funding source for CIP projects that do not have a specific outside funding source, such as Gas Tax, Measure A, Measure M, Measure W, or grants. The FY 2022/23 FYI 2022/23 Mid-Year Budget Staff Report
February 1, 2023
CIP allocated $5,985,000 toward various projects. These were based on priority and available funding. As we begin the FY 2023/24 Budget process, the Council may reallocate priorities to augment CIP funds elsewhere.
FINDINGS | ANALYSIS
This Mid-Year Report is a high-level view of revenues and expenditures at the half-way point of the current fiscal year. It updates the City Council on the Town’s financial position and makes recommendations for adjustments based on changed requirements, service needs, and priorities.
This fiscal year has some adjustment for mostly one-time operational needs. It does not involve a discussion of line-item expenditures and revenues.
The Mid-Year Report is focused solely on the Town’s General Fund as the main operating fund for the Town. Staff reviews and makes internal adjustments as necessary to account for changing needs and priorities within each department, considering anticipated expenditures for the remainder of the year within each respective line-item. Adjustments at the Department level are approved by the City Manager. Adjustments beyond the department level budget or transfers between departments or funds must be approved by the City Council. For the FY 2022/23 Budget, there are six areas that necessitate adjustments that requires Council-level approval.
The majority of items are one-time expenditures due to operations and maintenance needs; and/or one-time identified priority projects such as the Housing Element. At Mid-Year there is an additional need for $808,250 expenditure appropriations in the FY 2022/23 Budget.
Of the $808,250 increase, $650,000 are one-time expenditures related to specific staffing, onetime operational and facility maintenance expenditures, planning contract services and related expenditures for the Housing Element Update. The recent authorization to expense the OPEB retiree expense from the OPEB Trust produces a $150,000 savings to Town General Fund expense and nets the total additional need of expenditure appropriations at Mid-Year to $658,250. Some of these costs could also be offset by ARPA funds as discussed later in this Report. • Building Department Budget – Contract Expenditures due to Revenue adjustments; • Administration Department Budget – Expenditures for outside litigation expense; • Planning Department – Expenditures for planning contract staffing levels to provide Town Services and Housing Element Services;
• Inter-Departmental Budget – additional expenditures due to property insurance increases; • Police Department – Expenditures for overtime and investigative services costs; and • Public Works Department – Expenditures for engineering services staff support and Park facility and maintenance repairs.
Overall, Revenues are expected to exceed projections for the fiscal year by $1,601,693 (inclusive of ERAF). Budget amendments are not necessary to reflect increases in revenues.
FYI 2022/23 Mid-Year Budget Staff Report
February 1, 2023
REVENUES
Property Tax Revenues
The FY 2022/23 Budget projected property tax revenue at $14,279,158. This represented an 8.8% increase over FY 2021/22’s Adjusted Budget of $13,120,529. Anticipated revenues for FY 2022/23 reflect an increase of $635,529, for a total property tax revenue of $14,914,687 – a 4.45% increase over what was projected.
Source FY 2022/2023
Budget
Projected
Change
Anticipated
Revenue
% Change
Secured Property Tax $11,107,730 $345,000 $11,452,730 3.10% Unsecured Property Taxes $420,000 $6,200 $426,200 1.47% SB813 Redemption $315,000 $0 $315,000 0.00%
Property Tax in Lieu of VLF $1,672,448 $284,329 $1,956,777 17.0.% Property Transfer Tax $763,980 $763,980 0.00%
TOTAL $14,279,158 $635,529 $14,914,687 4.45%
Property taxes comprise about 73% of the total General Fund revenue stream. The assessed property value change from FY 2021/22 to FY 2022/23 was $1,149,035,370. This equates to a net taxable increase of 8.79%. From FY 2011/12 to FY 2022/23, Atherton has seen a growth of assessed property value of approximately 223%. The Town is the 5th highest in the County for property tax net value change of year-to-year growth for FY 2022/23. Nevertheless, HdL Companies suggests that the Town use a projection of 4.5% to 5.5% increase in property tax revenues next fiscal year.
Property Tax in Lieu of VLF
The Property Tax in Lieu of VLF expects an increase of $284,329, due to increase in VLF amount in FY 22/23 compared to what was anticipated. At the State level, since 2004, the two Sources of funding for Vehicle License Fees (VLF) are ERAF funds that non-basic aid school districts are entitled to receive, and then if needed, the property tax revenues of non-basic aid school districts.
If ERAF funds are insufficient to fund VLF, then VLF is funded from property taxes of non-basic aid school districts. Monies taken from non-basic aid school districts are then backfilled by the State.
VLF funds cannot come from basic aid school districts. Insufficient VLF funds are the result of school districts in the County having insufficient funding and having converted to basic aid districts. In FY 2022/23 there were eight non-basic aid school districts in the County, compared to seven in prior. For FY 2022/23, there is a $11.78 million shortfall Countywide, Atherton’s portion is $71,580. When there is a VLF shortfall County and respective agencies must submit requests to the State for funding appropriations of these shortfalls in the State’s upcoming budgets.
It is important to note that VLF and ERAF are protected monies that local agencies and counties are entitled to receive. There is no statutory mechanism (equivalent to Proposition 1A) to fully reimburse cities and counties for shortages. Staff and other municipal agencies along with the FYI 2022/23 Mid-Year Budget Staff Report
February 1, 2023
County are working with State representatives, counties, and city managers to assist with messaging on securing VLF funding for the future.
In FY 2021/22 the Town had a VLF shortfall total of $915,533. This included a shortfall of $573,549 for FY 2020/21 and $341,984 for FY 2021/22. We received $573,549 in August 2022 for FY 2020/21 VLF and $143,026 in August 2022 as partial payment for the FY 2021/22 VLF shortfall. Total amount we received for FY 2021/22 VLF is $1,204,764. There is still a shortfall of $198,958. It was estimated that the FY 2021/22 shortfall would be appropriated in the State’s 2023/24 budget, however as of this month, it is not appropriated in the State Budget. The FY 2022/23 VLF amount is $1,527,046 and the funds available from the State are $1,455,466. There is an estimated shortfall of $71,580. The total VLF shortfall to the Town is $270,538. County and Agencies must submit requests for these outstanding shortfalls.
VLF Amount Funds Available Shortfall State Appropriations Year FY 20-21 $1,328,296 $1,328,296 $0 Received August FY 22/23 FY 21-22 $1,403,722 $1,204,764 $198,958 Partial-No Estimate on Receive date
FY 22-23 $1,527,046 $1,455,466 $71,580 No Estimate
Total $4,259,064 $3,414,987 $270,538
ERAF Revenues
The Town treats ERAF revenue as “one time” revenue for specific projects or priorities such as capital projects and contributions toward long-term liabilities. It is not included in the Town’s operational revenue for the purpose of general operations. Currently, ERAF is being used for COP financing lease payments and as partial allocation to Capital Improvement Fund for the Town CIP program. The use of ERAF such allocation is a year-to-year decision by the City Council and the process includes understanding the amount of ERAF received in current fiscal year and then allocating the use of funds in the upcoming budget process.
Illustrated below are the past uses of ERAF funds. From FY 2013/14 to FY 2015/16, the Town allocated a total of $3,211,958 of ERAF funds toward identified Council priorities. From FY 2016/17 to FY 2021/22, The Town allocated $10,002,346 of ERAF Funds to the Town Center.
Fiscal Year Budget Amount Actual Amount Use of Funds
FY 2013/14 $700,000 $1,020,000 OPEB Liabilities
FY 2014/15 $700,000 $1,125,000 $680,684 – OPEB Liabilities $444,316 – Workers’ Comp
FY 2015/16 $1,200,000 $1,066,958 $112,998- WC Equity
$548,950- CalPERS UAL
$405,010- Additional CIP
FY 2016/17 $1,033,000 $1,103,185 Town Center
FY 2017/18 $1,066,958 $1,280,172 Town Center
FYI 2022/23 Mid-Year Budget Staff Report
February 1, 2023
FY 2018/19 $1,025,000 $1,691,772 Town Center
FY 2019/20 $1,300,000 $1,784,091 Town Center
FY 2020/21 $1,312,500 $1,863,658 Town Center
FY 2021/22 $1,100,000 $2,279,468 Town Center
ERAF funds allowed the Town to contribute $5,000,000 into the OPEB Trust, reducing its longterm retiree health liability for retired employees. Based on Council priorities, ERAF can be used to reduce unfunded pension liabilities or be used for other long-term debt like the COP call option for the Town Center. With the Town Center project completed, focus can be shifted to additional Town priorities.
The Town’s ERAF revenue for FY 2022/23 is $2,339,064. This is an increase of $23,064 over budget of $2,316,000. ERAF revenue has fluctuated the past several years from as low as $1,020,000 to now as high as $2,339,064. Since FY 2013/14 ERAF revenues increased 229%.
Due to ERAF being under constant threat at the State level, in previous years ERAF had been budgeted around $1.1 to $1.3 million. During the FY 22/23 budget process, ERAF was budgeted near the FY 2021/22 revenue amount received of $2.27 million.
Staff cautions that ERAF still remains under threat at the State level. The State Controller’s Office (SCO) issued guidelines in early 2021 to be used to determine a school district’s ERAF entitlement. The guidelines were effective for FY 2019/20 and thereafter. The County implemented the State guidelines for ERAF. Even though the Town has seen increases in ERAF recently, staff still believes that down the line the State could make additional changes to the calculation to reduce the excess ERAF and thus is a prudent time to consider these funds as onetime use. With the recent trends in ERAF with the Town receiving approximately $2.3 million, for projection purposes, Excess ERAF estimated to be received in FY 2023/24 will be at $2.3 million range. The Council will review and direct ERAF during the annual budget process.
Sales Tax
There is a projected increase in Sales & Use Tax of $20,000 for a total of $315,000.
Source FY 2022/2023
Budget
Projected
Change
Anticipated
Revenue
Sales & Use Tax $195,000 $10,000 $205,000,000
Prop 172 Sales Tax Police $100,000 $10,000 $110,000
TOTAL $295,000 $20,000 $315,000
Other General Fund Revenues
Other significant General Fund Revenues include:
• Franchise Fees
• Business Licenses
FYI 2022/23 Mid-Year Budget Staff Report
February 1, 2023
• Planning Revenues
• Police Revenue
• Park Revenue & Miscellaneous Revenue
The increase in Franchise Fee revenue is due to small increases in projected cable fee revenue and a slight increase in projected business license receipts for the fiscal year.
Building Revenue shows a projected increase in permit revenue of $127,000 and as a result requires a budget amendment under contract for building life safety expenditures. The increase is due to permit building activity in the Town during the FY 2022/23. Planning Revenue also shows an increase of $65,000 corresponding with building activity.
Police Revenue is projected to increase $16,500 attributable to slight increases in Other Fines & Forfeitures, POST reimbursement, and Special Service fees.
Public Works Revenue shows an increase of $89,000 attributable to an increase in administrative citation fees, encroachment, and tree inspections fees. Slight decrease in penalty fees for work without a permit due to code enforcement activity on verification of permits. Park Program Revenue is projecting an increase of revenue of $56,000. Slight increase for events, however majority increase is due to catering service fee revenue the Town receives from Catered Too (Park Event Manager) on their catering revenue. As the exclusive right for catering for park event space, the Town receives ten percent (%) of catering revenue.
There is an increase of Miscellaneous Revenue of $550,000 at Mid-Year. This is due to an increase in construction time limit forfeitures. These are one-time revenues. All other Town revenues remain static.
Source FY 2022/2023
Budget
Projected
Change
Anticipated
Revenue
% Change
Property Taxes $14,279,458 $635,529 $14,914,987 4.45%
Sales Taxes $295,000 $20,000 $315,000 6.77%
Franchise Fees $1,005,000 $6,000 $1,011,000 .59%
Intergovernmental $43,000 $3,600 $46,600 8.3%
Business Licenses $268,000 $10,000 $278,000 3.73%
Planning Revenue $225,300 $65,000 $290,300 28.8%
Building Revenue $1,792,000 $127,000 $1,919,000 7.08%
Police Revenue $299,890 $16,500 $316,390 5.5%
DPW Revenue $747,700 $89,000 $836,700 -3.3%
Park Program Revenue $176,800 $56,000 $232,800 31.67%
Miscellaneous Revenue $451,458 $550,000 $1,001,458 0%
TOTAL $19,583,306 $1,578,629 $21,161,935 5.25%
Basic revenues increased $1,578,629 and coupled with the ERAF increase of $23,064, this results in a total projected General Fund Revenue increase for FY 2022/23 of $1,601,693.
FYI 2022/23 Mid-Year Budget Staff Report
February 1, 2023
EXPENDITURES
Expenditures – Departmental Adjustments
Staff reviewed and analyzed operational projections for each department for the remainder of the fiscal year. Any changes within department budgets were netted out across other line-item expenses where feasible and do not require budget adjustments. Internal adjustments were made to account for changing needs and priorities considering anticipated expenditures for the remainder of the year within each respective line-item.
There have been additional costs related to the new operational costs of the Town Center buildings now that they are fully online. There are also expenses related to facility repairs of facilities in the Park. There are increases in operational costs to address staffing needs within the community development and public works departments. Landscape maintenance operations are being rescaled to Town needs and building maintenance for all Town facilities is being transitioned to a Maintenance Manager. There are current outside consultant services for engineering services due to a staff vacancy and planning services are on the rise due to increased development and housing element updates.
Departments are expected to meet budget appropriations or report lower operational expenses at end of the Fiscal Year. There are several adjustments needed to the Operating Budget. Staff will return a Budget Resolution at the February 15 meeting for adoption to address the adjustments.
Building Department – Budget Amendment of $68,750
1) The Building Contract is revenue based. This is an adjustment in expenditures due to the anticipated increase in revenue. Revenue is projected to increase from $1,792,000 to $1,919,000. Building services are provided via contract with Interwest Consulting Services receiving 58% of the first million in revenue and 55% for additional building revenues over $1 million. The increase of revenue requires an additional expenditure adjustment of $68,750.
Administration Department – Budget Amendment of $166,500 2) There was an increase in Environmental Program Committee budget for FY 2022/23 in the amount of $6,500 for the AGZA event programming.
3) During the fiscal year there was the need for legal human resources assistance. The additional necessary cost is $120,000. Staff anticipates that the budget expenditure for future years human resources and for future outside litigation support is non-recurring and will be nominal.
The additional expense is not related to labor negotiations. 4) During the fiscal year the Town engaged outside other contract consultant services for newsletter, website and recruitment support. This was a cost that will be rescaled in the FY 2023/24 budget but the total FY 2022/23 expenditure was $40,000.
FYI 2022/23 Mid-Year Budget Staff Report
February 1, 2023
Planning Department- Budget Amendment of $150,000
5) This adjustment is for planning services for the Town as well as a ramp up of zoning work related to the Hosing Element. It is anticipated that this cost will be a 1-2 year series of additional costs.
Interdepartmental Department- Budget Amendment of $43,000 6) The Town maintains property and liability insurance and the costs for fiscal year for property insurance necessitates and increase. For the past several years insurance costs have remained static. Insurance costs have increased and will require additional appropriations.
Police Department- Budget Amendment of $223,000
7) The Police Department is currently close to full staffing and has weathered the challenges of staffing attrition, hiring complexities for public safety personnel, and the COVID pandemic.
The Department currently needs additional appropriations for overtime. In previous years, the Department has been able to use funds from regular budgeted salaries since the Department was not fully staffed but maintained a budget for approved staffing levels. Changes within the Department budget were netted out among line-item expenses where feasible to offset additional overtime appropriations. The Department overtime applies to a to backfill to maintain the 2 +1 staffing model for each shift. Backfill is mainly attributed to filling in for sick time, training, and COVID-related absences. In addition, personnel are catching up on vacations that were not taken during the pandemic. Other OT within the department is for mandated/essential trainings for instructor development, investigative courses, basic traffic collision, DUI training, Core course, Supervisor courses, crisis intervention training and State of California POST mandated trainings. This requires additional appropriations of $193,000. 8) During the fiscal year there was the discovery of a buried vehicle in the Town that garnered national news attention. The Department incurred numerous expenses with the investigation of the buried vehicle. This included San Mateo Crime Lab assistance, towing, excavation and construction fees, and storage of the vehicle. The additional cost of $30,000. One time cost.
Public Works Department- Budget Amendment of $157,000
9) The Department has been operating with a vacant Senior Engineer position for most of FY 2022/23. To compensate, the Town has been using consultant engineering services to fulfill the need. This is a one-time cost which requires an additional appropriation of $77,000. 10) During the fiscal year there were necessary and unanticipated facility repairs and maintenance needs at various locations at the Park. The playschool needed sewer pipe repair work $14.5K.
Repair of men’s bathroom remove and install toilets $2K and miscellaneous repairs $2K. The Gilmore house had several repair and maintenance items that included water pipe replacement $12K, main sewer line replacement $33K, and related interior painting and repairs $20K.
Total additional one-time costs of $80,000.
FYI 2022/23 Mid-Year Budget Staff Report
February 1, 2023
There are no other adjustments required within the FY 2022/23 Budget.
Expenditure Summary
With the departmental adjustment for Building noted above, the FY 2021/22 Adjusted Budget by Department looks as follows:
Department FY 2022/2023
Adjusted Budget
NET Mid-Year
Adjustments
FY 2022/2023
Adjusted Budget
City Council $61,513 $61,513
Administration $1,032,501 $166,500 $1,199,001
City Attorney $310,000 $310,000
Finance $897,696 $897,696
Planning $612,071 $150,000 $762,071
Building $1,454,284 $68,750 $1,523,034
Inter-department $981,511 $43,000 $1,024,511
Police $9,303,866 $223,000 $9,526,866
Public Works $3,076,233 $157,000 $3,233,233
Total $17,729,675 $808,250 $18,537,925
Total Budget Summary
Revenues, inclusive of ERAF, are $23,500,999. This represents a net positive change in fund balance of $4,963,074 at year-end and an anticipated ending fund balance of $14,044,273 (inclusive of the mandatory reserves). This also includes the change order settlement close out for the outstanding work on the Town Center Project This amount is a General Fund allocation of $435,135 to the facility fund. The close out amount for the project could be redirected as one-time expense from the Town ARPA Funds.
Revenue Amount
General Fund $21,161,935
ERAF Revenues $2,339,064
Total General Fund Revenue Sources $23,500,999
Expenditures
General Fund Expenditures $18,537,925
Total General Fund Expenditures $18,537,925
Net Change in Fund Balance $4,963,074
The FY 2022/23 beginning total fund balance was $13,585,333 (inclusive of the mandatory reserves). At the conclusion of FY 2022/23, after transfers out for Debt Service, the abovereflected departmental adjustments, and the remaining transfer of unallocated funds to Town Center construction, the end of year fund balance projection is $14,044,273 (this includes all mandatory reserves). The projected FY 22/23 net change in Fund Balance is a positive $458,939.
FYI 2022/23 Mid-Year Budget Staff Report
February 1, 2023
FY 2022/23 Beginning Fund Balance $13,585,333
FY 2022/23 Projected Revenues $23,500,999
Total Available Funds $37,086,332
Transfer out FY 2022/23 COP Debt Service ($861,000)
Net Mid-Year Adjustments ($808,250)
OPEB FY Expense Reduction due to use of PARS TRUST $150,000 FY 2020/21 Expenditures (Original Budget) ($17,729,675) Transfer of GF Unallocated Funds to Facility Fund 406 ($453,135) General Fund Transfer allocation for Capital Projects
Fund 401
($3,340,000)
FY 2022/23 Projected Year End Balance $14,044,272
15% Emergency Reserve Requirement ($2,780,689)
15% Contingency Reserve Requirement ($2,780,689)
American Rescue Plan Reserve ($1,707,000)
FY 2022/23 Projected Unallocated Fund Balance $6.775,895 The FY 2022/23 budget includes the transfer allocation of $3.34 million to the Town Capital Project Fund 401 for identified priorities in the Town CIP. With the above inclusive mandatory reserves and the ARPA fund reserve set aside for identification of Town obligated non-recurring expenditures, the projected FY 2022/23 ending Unallocated Fund balance is $6,775,895. During FY 2022/23 budget, the Council authorized the adjustment of the Operational Contingency reserve from 20 percent to 15 percent (%). Based on FY 2022/23 Adjusted Expenditures, this freed up approximately $926K to be distributed to the Unallocated Fund Balance.
ARPA Funding
The Town received $1.7 million from the American Rescue plan. The initial portion, $853,661 was received in July 2021 and the remainder will arrive by June 2022. These funds may be used to respond to the public health emergency with respect to COVID-19 but are fairly broad in their application. These funds must be obligated by December 31, 2024 and must be spent by the end of calendar year 2026. As part of the FY 2023/24 Budget, staff will provide a set of recommendations for the Council’s considered use of the ARPA allocation. These will be to onetime, non-recurring expenses for Council consideration. The Town Center Project construction COVID-related delays to the project are one of the items to be considered.
Current regulations allow local governments to utilize funds for response to COVID-19 emergency or its negative economic impacts, including assistance provided to people, businesses etc. These funds will augment the Town’s COVID operation expenses, but they will also serve in relief for other unexpected costs and current or future loss of revenues.
FYI 2022/23 Mid-Year Budget Staff Report
February 1, 2023
Uses of ARPA Funds:
1. Replace lost public sector revenue
2. Spending on Government Services-Road building and maintenance, other infrastructure; General government administration, staff, and administrative facilities; Provision of police and other public safety services
3. Responding on Public Health and Economic Impacts of COVID-19- Public Communication efforts, Emergency operations centers & response equipment
4. Public Sector Capacity-Bolster Public Safety, Public Health, and Human Services
5. Capital Expenditures- respond to public health and negative economic impacts
6. Premium Pay- to eligible workers performing essential work during the pandemic
7. Water & Sewer Infrastructure- necessary investments in water and sewer infrastructure Upcoming Capital Improvement Program (CIP) Projects
In FY 2022/23, the CIP allocates $5,985,000 in capital projects. The Park Master Plan, road maintenance, drainage and traffic safety improvements are major parts of the CIP. With no additional special tax revenue for the major projects in the CIP, the Town follows the “save then spend” approach for capital projects over multiple years. The General Fund is the only funding source for a CIP project that does not have a specific outside funding source. There was an allocation of $3.34 million in the FY 2022/23 Budget to the Town Capital Improvement fund.
Street Maintenance is a continued priority as part of the Town’s Annual Street Maintenance Program. The expenditures proposed in FY 2022/23 reflect two-inch grinding overlays, dig-outs, and cape and slurry seal projects on various streets totaling $1,500,000. Funds are budgeted for Bike/Pedestrian improvement opportunities; but these are largely in support of grant applications for larger projects and/or as local match funds for approved grant applications.
Current funding sources for Streets and Bike/Pedestrian improvements are portions of the remaining Parcel Tax, Measure A, Gas Tax, Measure W, and Measure M. The CIP includes $1,700,000 for Park Circulation and Pedestrian Circulation improvements. There is $300,000 for implementation of Green Infrastructure Plan Projects. There is $300,000 for Atherton Train Station design.
Below are the budgeted cost estimates of anticipated or already undertaken projects in FY 2022/23. Details for specific projects will move forward to the Council as part of contract bidding and award.
Streets & Transportation
Capital Project Budget Current Status
Traffic Control Devices $15,000 Restriped school crosswalks at Laurel School (Lower), Las Lomitas Elementary, and
Menlo-Atherton High School. Purchased
additional signage.
ADLP Traffic Safety
Improvement Project
$600,000 Project Management Task Order requested
FYI 2022/23 Mid-Year Budget Staff Report
February 1, 2023
Solar Radar Indicators
Purchase
$15,000 Purchased Radar Indicators
Traffic Counts/Speed Surveys $25,000 Not started
Grant Funding Opportunities $25,000 Submitted OBAG3 Grant application for Adelante-Selby Safe Routes bikeway
improvements. (contingency funding list)
Submitted SMTA Bike Ped Grant application
for El Camino Real Complete Streets Gap
Closure. (awarded)
Refresh Class III Pavement
Markings
$100,000 Not started. Executed task-order to initiate
project design.
Watkins Avenue Ped
Improvements/Middlefield to
McCormick
$100,000 Executed task-order proposal to initiate
development of alternatives.
Selby Lane Bicycle Lane
Improvements
$250,000 Submitted OBAG3 Grant application for
Adelante-Selby Safe Routes bikeway
improvements. (contingency funding list).
Requested task-order for design.
Fair Oaks Lane @ Lloyden
Improvements
$175,000 Executed task order proposal for design
Annual Road Maintenance
Program
$1,500,000 Initiated Pavement Management Program
assessments through MTC PTAP grant.
Pavement assessments completed and under
review. Executed task-order for project
design.
NTMP Projects $160,000 Installed median striping on Atherton Ave., Stockbridge Ave. Restriped high-visibility
crossings and shark-tooth limit lines at
Adelante-Selby School and Encinal
Elementary. Installed larger stop signs in
various locations. Purchased speed feedback
signs and temporary speed humps. Initiated
outreach regarding speed humps. Initiated
Middlefield Road signal timing analysis
through MTC PASS Grant. Installed new
speed limit signs in various locations.
Installed speed humps and speed feedback
signs on Glenwood Avenue.
Drainage
Capital Project Budget Current Status
Atherton Channel
Assessment/Relining
Upstream of ADLP
$400,000 Not started
FYI 2022/23 Mid-Year Budget Staff Report
February 1, 2023
Green Infrastructure
Implementation
$300,000 Cooperative project on Encina Avenue under
construction as part of Encina Avenue
Reconstruction project by County.
Evaluation of Intersections @
ECR
$150,000 Not started
Upper Atherton Channel
Monitoring
$10,000 Not started
Town Buildings, Park & Facilities
Capital Project Budget Current Status
ADA Improvement Program $10,000 Scope TBD
Town Center Project
(Station)
$300,000 Design complete and submitted for Building
Permit.
Fencing Improvements Along
Watkins
$200,000 Executed task-order for conceptual design.
Concurrent with Watkins Avenue Pedestrian
Improvements.
Parking Lot Repairs $350,000 Requested task-order for design General/Misc Repairs $100,000 Scope TBD
Park Circulation Plan $1,050,000 Design presented to Council for feedback.
Design documents being finalized for bid
solicitation.
Total $5,985,000
POLICY CONSIDERATIONS
The Mid-Year Budget Report is an opportunity to make adjustments and operations corrections based on unanticipated changes and the goals and priorities of the City Council. If there are projects or priorities that the Council wishes to address at mid-year, this is the opportunity to do so. The Mid-Year Budget Report encompasses all changes to the budget thus far in the Fiscal Year. Staff will bring back a Budget Amendment Resolution to the February 15 Council meeting to reflect the noted adjustments.
FISCAL IMPACT
Discussed above, the overall fiscal impact to the General Fund due to Mid-Year adjustments is a General Fund Net expenditure increase of $658,250 (3.7%) against a General Fund (plus ERAF) revenue increase of $1,601,693 (7.3%).
GOAL ALIGNMENT
Goal A- Maintain Fiscal Responsibility
PUBLIC NOTICE
Public notification was achieved by posting the agenda, with this agenda item being listed, at least 72 hours prior to the meeting in print and electronically. Information about the project is also disseminated via the Town’s electronic News Flash and Atherton Online. There are approximately FYI 2022/23 Mid-Year Budget Staff Report
February 1, 2023
1,200 subscribers to the Town’s electronic News Flash publications. Subscribers include residents as well as stakeholders – to include, but be not limited to, media outlets, school districts, Menlo Park Fire District, service provides (water, power, and sewer), and regional elected officials.
ATTACHMENTS
Item No. 2
Town of Atherton
CITY COUNCIL STAFF REPORT – STUDY SESSION
TO: HONORABLE MAYOR AND CITY COUNCIL
GEORGE RODERICKS, CITY MANAGER
FROM: GEORGE RODERICKS, CITY MANAGER
DATE: FEBRUARY 1, 2023
SUBJECT: REVIEW AND PROVIDE DIRECTION TO STAFF REGARDING
LEGISLATIVE ADVOCACY
RECOMMENDATION
Review and provide direction to staff regarding legislative advocacy.
BACKGROUND
Both the City/County Association of Governments (C/CAG) and the League of California Cities have Legislative Policy Platforms. Due to the size of these publications, they are only included electronically as Attachment 1 and Attachment 2, respectively.
The C/CAG Legislative Committee provides advice and recommendations to the full C/CAG Board on all matters dealing with State legislation, ballot measures, and positions to take on specific bills. A description of the work of the Committee can be found here:
https://ccag.ca.gov/committees/legislative-committee/. Similarly, the League of California Cities advocates on issues that affect all of California’s cities and towns. Their teams work with regional field staff and lawmakers to sponsor, draft, and support legislative and regulatory measures that promote local decision-making, and lobby against policy that erodes local control. The League takes positions on hundreds of bills annually and works with over 400 local officials serving on Cal Cities seven policy committees. A description of the work of the League Advocacy can be found here: https://www.calcities.org/advocacy.
The Town also uses the services of the Renne Public Policy Group (RPPG) to assist in the review and the advancement of legislative policy priorities for the Town as it directly relates to housing and local control. A description of the work and group can be found here:
https://rennepublicpolicygroup.com.
ANALYSIS
Throughout the year, the Town is apprised of various legislative measures and is encouraged to sign on to correspondence in support of or opposition to various legislative measures. The urgency Legislative Advocacy
February 1, 2023
with which some of this occurs does not align with the regularly established meeting schedule of the City Council and often, the Town will not participate due to inability to move something forward. In addition, often, the Council will discuss and postpone discussion of legislative correspondence while it is re-written to address a singular style.
As the State Legislature works to impose and intrude more and more into local control, ensuring the Town has a timely and consistent voice is important. To that end, staff recommends that the City Council consider authorizing the Mayor to work directly with the City Manager to develop, as needed, a timely Town response on legislative issues that align either with the League of California Cities Legislative Platform or C/CAG Legislative Platform. If the Town’s proposed position does not align with the League of California Cities or C/CAG platform, the Mayor and/or City Manager should elevate the issue to the full City Council for direction.
All correspondence sent would be copied to the entire Council and the correspondence would also be uploaded to the Town’s website under Mayoral Correspondence.
Many Town partner agencies do not have independently adopted legislative platforms and some call upon member agencies to support matters that affect their scope. Staff would also encourage the Council to authorize the Mayor and City Manager to prepare considered responses on behalf of the Town when requested by partner agencies, to include: Library JPA Governing Board, Peninsula Clean Energy, and the Menlo Park Fire Protection District.
POLICY FOCUS
Legislative Advocacy.
FISCAL IMPACT
None.
GOAL ALIGNMENT
This report and its contents are in alignment with the following Council Policy Goals:
• Goal F – Be Forward-Thinking, Well-Managed, and Well-Planned
PUBLIC NOTICE
Public notification was achieved by posting the agenda, with this agenda item being listed, at least 72 hours prior to the meeting in print and electronically. Information about the project is also disseminated via the Town’s electronic News Flash and Atherton Online. There are approximately 1,200 subscribers to the Town’s electronic News Flash publications. Subscribers include residents as well as stakeholders – to include, but be not limited to, media outlets, school districts, Menlo Park Fire District, service provides (water, power, and sewer), and regional elected officials. The Legislative Advocacy
February 1, 2023
Town maintains an active and up to date Project Website at http://caatherton.civicplus.com/index.aspx?NID=290.
COMMISSION/COMMITTEE FEEDBACK/REFERRAL
This item has or X has not been before a Town Committee or Commission. ____ Audit/Finance Committee (meets every other month)
____ Bicycle/Pedestrian Committee (meets as needed)
____ Environmental Programs Committee (meets every other month) ____ Park and Recreation Committee (meets each month)
____ Planning Commission (meets each month)
____ Rail Committee (meets every other month)
____ Transportation Committee (meets every other month)
ATTACHMENTS
• Attachment 1 – C/CAG Legislative Policy
o https://www.ci.atherton.ca.us/DocumentCenter/View/10882/Attachment-A---CCAG-Legislative-Policy • Attachment 2 – League of Cities Legislative Policy
o https://www.ci.atherton.ca.us/DocumentCenter/View/10881/Attachment-B--- League-of-Cities-Legislative-Policy