Unfunded Liability Obligations and Unfunded Infrastructure Needs ACTION CALENDAR April 11, 2023
Property Tax
Given the continued high collection rate, and the resilience of property values in the City, as well as a large volume of recent property sales (which bring assessed values to market value), we are projecting that annual growth will be approximately 5.5% over the next several years. The persistence of strong growth of property valuations in recent years, as well as the spike in current year sales (which bring properties assessed valuations to market value), have caused staff to increase the projected growth rate from the 3.5% that we have used in prior long-term projections.
Sales Tax
The immense effects of COVID-19 on sales tax revenue in FY 2021 were largely reversed in FY 2022, with revenue levels almost back to FY 2019 levels, and staff now project growth to level off to approximately 4% in FY 2024. There is still some potential risk that an overall slowdown in underlying economic recovery will be reflected in reduced growth in consumer spending and sales tax collections Business License Taxes
We are projecting a 5% growth in Business License Tax revenue from heavily impacted FY 2021 levels, as economic activity recovers from the recession caused by the pandemic. Long-term projections will be adjusted as the post-pandemic economic environment becomes clearer. 2023 business license returns (for 2022 gross receipts) are just now being received, so we will know more about how revenues are trending once they are processed over the next month or so.
Transfer Tax
Given the continued strength in property values and in sales activity, we expect Transfer Tax revenues to remain basically flat from FY 2024 – FY 2027. The spike in revenue being seen in FY 2022, and to a lesser extent in FY 2023, is likely due to sales triggered by looming interest rate increases that have been signaled by the Federal Reserve, as well as some pent-up demand from mildly depressed sales during the pandemic. Over the 5 years prior to the pandemic, transfer tax revenues grew 6% per year on average, but interest rate increases will probably negatively impact sales prices and volumes somewhat in the next few years. We also expect revenues from Measure P supplemental tax on high value property transfers to remain basically flat.
General Fund Revenues versus General Fund Expenditures
One value of producing long term General Fund revenue projections is to compare them against General Fund expenditure projections. Since about 57% of the General Fund expenditures are personnel costs, any change in those costs has an impact on the balance between revenues and expenditures.
The chart below is offered as a demonstration only and is not a proposal or budget plan.
Unfunded Liability Obligations and Unfunded Infrastructure Needs ACTION CALENDAR April 11, 2023
The expenditure projections assume the following:
• Staffing level held constant using the FY 2023 Adopted Budget • No cost of living adjustments (COLA) beyond what is currently negotiated • PERS rates based on rates provided by the City’s actuarial agency • Other Fringe Benefits increase annually by 8 percent starting in FY 2025 • Salary Savings budgeted at 8 percent annually starting in FY 2025 • Non-Personnel costs increase annually by 3 percent starting in FY 2025 • General Fund Transfer to the CIP Fund is $19M annually and includes • Baseline Amount of $5M
• Property transfer tax of $14M
• FY 2025 and outward years shows the new policy of funding an additional $18M towards Streets
Staff is in the process of developing the FY 2024 Mid-Biennial Budget Update, however, the preliminary forecast above indicates that the City has a structural deficit that needs to be addressed in FY 2025 through FY 2027, due, in part, to the impact of CalPERS financial losses in FY 2022.
CONCLUSION
One of the terms that is often used with respect to the long-term obligations that are described above is “unfunded liabilities.” Unfunded liabilities are defined as identifiable obligations of an organization for which the organization does not have 100% of the funding (cash or other assets) set aside to cover the cost should all obligations become immediately due. Generally, an organization manages a balance between funding a portion of the entire obligation and the associated risk that the obligation will be due at the same time. This balance is considered the practical and responsible approach since payment demands of these obligations rarely, if ever, occur simultaneously. The alternative would be to 100% fund the obligations causing a great portion of cash to be reserved and not available for providing services or meeting other immediate obligations, needs, or desires of the community. Maintaining a careful balance between cash on hand to fund daily operations and liquidity to cover unfunded liabilities is a key challenge for all governments.
FY 2023
Adopted
FY 2023
Projected
FY 2024
Adopted
FY 2025
Projected
FY 2026
Projected
FY 2027
Projected
GF Revenues
Baseline
258.70 $ 272.90 $ 261.70 $ 262.20 $ 267.60 $ 272.50 $ GF Expenditures -
Zero COLA
280.70 $ 275.70 $ 274.00 $ 293.70 $ 295.00 $ 299.60 $ Surplus/(Deficit) (22.00) $ (2.80) $ (12.30) $ (31.50) $ (27.40) $ (27.10) $ *FY 2023 Adopted & FY 2024 Adopted balanced through the use of fund balance General Fund Revenues v.s. Expenditures - Demonstrative Comparison (dollars in millions)
Unfunded Liability Obligations and Unfunded Infrastructure Needs ACTION CALENDAR April 11, 2023
POSSIBLE FUTURE ACTION
The information contained in this report will be referenced throughout the budget planning meetings in advance of the FY 2024 Mid-Biennial Budget Update and during the FY 2025 & FY 2026 Biennial Budget process. The City’s Budget and Finance Policy Committee will continue to discuss funding options and provide recommendations to the City Council to address the City’s unfunded liabilities and infrastructure needs.
FISCAL IMPACTS OF POSSIBLE FUTURE ACTION
There is no fiscal impact associated with receiving the report. However, the report describes the immediate and long-term projected costs associated with pension and other post-employment benefits. In order to help mitigate these specific liabilities, the City’s actuarial recommends the City continue to allocate $5.5 million each fiscal year to the Section 115 Pension Trust for the next 2 years (to reach a balance of $25 million) to six years (to reach a balance of $50 million) and increase the contribution to retiree health insurance plans by $8.8 million over the next 20 years in order to fully pre-fund its OPEB liabilities. In addition, significant resources will be necessary to address the City’s infrastructure needs.
ENVIRONMENTAL SUSTAINABILITY AND CLIMATE IMPACTS
Actions included in the budget will be developed and implemented in a manner that is consistent with the City’s environmental sustainability goals and requirements.
CONTACT PERSON
Sharon Friedrichsen, Budget Manager, City Manager’s Office, 981-7000 Rama Murty, Senior Management Analyst, City Manager’s Office, 981-7000 Henry Oyekanmi, Finance Director, Department of Finance, 981-7300 Attachments:
1. Employee and Retiree Benefits Funded Status
2. City’s Debt Obligations
Exhibit A: General Obligation bonds
Exhibit B: Revenue Bonds
3. Capital Assets
Exhibit A: Infrastructure
Exhibit B: Appraisal of Buildings Valued at $5 million or more
4. General Fund Revenues
5. Foster & Foster, Incorporated City of Berkeley Pension and OPEB Funding Study
Fund Name Valuation Date
Estimated
Liability Plan Assets Funding Target Net Liability % Funded Police Retiree Income Plan (closed)* 6/30/2020 $ 79.95 $ 5.83 2 $ 74.1 7.29% Police Employee Retiree Health Plan
(new)*
7/1/2019 $ 40.43 $ 2.49 2 $ 37.9 6.16% Fire Employees Retiree Health Plan* 7/1/2019 $ 25.83 $ 11.31 1 $ 14.5 43.8% Retiree Health Premium Assistance
Plan (Non-Safety Members)*
7/1/2019 $ 68.46 $ 27.81 1 $ 40.7 40.62% Safety Members Pension Fund* 6/30/2020 $ 1.86 $ 0.10 2 $ 1.76 5.4% Miscellaneous CalPERS Plan* 6/30/2021 1,181.2$ 946.3$ 1 $ 234.9 80.1% Police CalPERS Plan* 6/30/2021 483.8$ 332.5$ 1 $ 151.3 68.7% Fire CalPERS Plan* 6/30/2021 306.7$ 248.1$ 1 $ 58.60 80.9% TOTAL 2,188.2$ 1,574.4$ - 613.8$ 72.0% Since the implementation of GASB67 and 68 the Annual Required Contribution (ARC) is no longer provided.
Funding Target:
2 - pay as you go
Employee and Retiree Benefits Funded Status (dollars in millions) Attachment 1 1 - percentage of payroll
*Retiree Medical Plan & CalPERS Plans data from acturial reports from Foster & Foster, Inc.
Attachment 2 Exhibit A
FY Principal Interest Principal Interest Principal Interest Principal Interest Principal Interest Principal Interest Principal Interest Principal Interest Principal Interest Principal Interest 217,140,000
2023 370,000 526,000.00 2,270,000 779,837.50 320,000 420,112.50 730,000.00 1,000,556.26 740,000.00 1,265,540.00 265,000.00 272,075.00 395,000.00 409,312.50 1,500,000.00 1,258,325.00 - 560,733 6,590,000 6,492,492 13,082,491.51 210,550,000 2024 385,000 507,125.00 2,380,000 663,587.50 335,000 403,737.50 765,000.00 963,181.26 770,000.00 1,237,265.00 275,000.00 258,575.00 415,000.00 389,062.50 1,750,000.00 1,177,075.00 805,000 2,081,070 7,880,000 7,680,679 15,560,678.76 202,670,000 2025 405,000 491,425.00 2,495,000 541,712.50 350,000 386,612.50 805,000.00 923,931.26 800,000.00 1,209,790.00 285,000.00 244,575.00 435,000.00 367,812.50 920,000.00 1,110,325.00 580,000 2,032,770 7,075,000 7,308,954 14,383,953.76 195,595,000 2026 420,000 478,787.50 2,625,000 413,712.50 370,000 370,462.50 845,000.00 882,681.26 825,000.00 1,181,352.50 300,000.00 229,950.00 455,000.00 345,562.50 965, 000.00 1,063,200.00 615,000 1,997,970 7,420,000 6,963,679 14,383,678.76 188,175,000 2027 430,000 465,237.50 2,760,000 306,687.50 385,000 355,362.50 885,000.00 843,856.26 855,000.00 1,151,952.50 315,000.00 214,575.00 485,000.00 322,062.50 1,010,000.00 1,013,825.00 650,000 1,961,070 7,775,000 6,634,629 14,409,628.76 180,400,000 2028 445,000 449,350.00 2,840,000 222,687.50 405,000 339,562.50 920,000.00 807,756.26 885,000.00 1,121,502.50 335,000.00 198,325.00 505,000.00 297,312.50 1,065,000.00 961,950.00 690,000 1, 922,070 8,090,000 6,320,516 14,410,516.26 172,310,000 2029 465,000 431,150.00 1,960,000 150,687.50 425,000 322,962.50 960,000.00 779,156.26 915,000.00 1,090,002.50 355,000.00 181,075.00 530,000.00 271,437.50 1,115,000.00 907,450.00 730,000 1,880,670 7,455,000 6,014,591 13,469,591.26 164,855,000 2030 480,000 412,250.00 880,000 108,087.50 450,000 307, 712.50 980,000.00 757,931.26 950,000.00 1,057,365.00 370,000.00 162,950.00 555,000.00 244,312.50 1,170,000.00 850,325.00 775,000 1,836,870 6,610,000 5,737,804 12,347,803.76 158,245,000 2031 500,000 392,650.00 305,000 89,931.25 470,000 293,912.50 1,000,000.00 731,906.26 980,000.00 1,023,590.00 395,000.00 143,825.00 585,000.00 215,812.50 1,230,000.00 796,475.00 820,000 1,790,370 6,285,000 5,478,473 11,763,472.51 151,960,000 2032 520,000 372,250.00 315,000 79,856.25 485,000 279,587.50 1,030,000.00 701,456.26 1,015,000.00 989,946.25 410,000.00 125,750.00 615,000.00 188,887.50 1,280,000.00 752,675.00 860,000 1,749,370 6,530,000 5,239,779 11,769,778.76 145,430,000 2033 540,000 350,712.50 325,000 69,253.13 500,000 264,812.50 1,060,000.00 670,106.26 1,050,000.00 956,390.00 430,000.00 108,950.00 640,000.00 163,787.50 1,320,000.00 713,675.00 915,000 1,697,770 6,780,000 4, 995,457 11,775,456.89 138,650,000 2034 565,000 327,921.88 335,000 57,906.26 515,000 250,875.00 1,095,000.00 637,781.26 1,085,000.00 921,696.25 450,000.00 94,725.00 665,000.00 137, 687.50 1,355,000.00 673,550.00 965,000 1,642,870 7,030,000 4,745,013 11,775,013.15 131,620,000 2035 590,000 304,100.01 345,000 46,006.26 530,000 237,812.50 1,125,000.00 604,481.26 1,120,000.00 885,865.00 460,000.00 82,200.00 690,000.00 114,037.50 1,400,000.00 632,225.00 1,025,000 1,584,970 7,285,000 4,491,698 11,776,697.53 124,335,000 2036 610,000 278,587.51 360,000 33,668.76 550,000 223,968.75 1,160,000.00 570,206.26 1,155,000.00 848,896.25 480,000.00 68,700.00 715,000.00 95,643.75 1,440,000.00 596,825.00 1,085,000 1,523,470 7,555,000 4,239,966 11,794,966.28 116,780,000 2037 640,000 251,243.76 370,000 20,662.51 570,000 209,268.75 1,195,000.00 534,881.26 1,190,000.00 807,815.00 495,000.00 54, 675.00 730,000.00 76,650.00 1,470,000.00 567,725.00 1,145,000 1,463,795 7,805,000 3,986,716 11,791,716.28 108,975,000 2038 665,000 222,696.88 385,000 6,978.13 590,000 193,675.00 1,230,000.00 497,737.51 1,235,000.00 762,346.25 510,000.00 39,600.00 750,000.00 56,325.00 1,500,000.00 538,025.00 1,205,000 1,406,545 8,070,000 3,723,929 11,793,928.77 100,905,000 2039 695,000 192,946.88 610,000 177,175.00 1,270,000.00 458,675.01 1,285,000.00 715,096.25 525,000.00 24,075.00 770,000.00 35,400.00 1,530,000.00 507,725.00 1,265,000 1,346,295 7,950,000 3,457,388 11,407,388.14 92,955,000 2040 725,000 161,884.38 630,000 160,125.00 1,310,000.00 418,362.51 1,330,000.00 666,065.00 540,000.00 8,100.00 795,000.00 11, 925.00 1,560,000.00 476,825.00 1,325,000 1,284,943 8,215,000 3,188,229 11,403,229.39 84,740,000 2041 760,000 128,925.00 655,000 142,456.25 1,350,000.00 375,956.26 1, 380,000.00 615,252.50 1,590,000.00 445,325.00 1,390,000 1,220,680 7,125,000 2,928,595 10,053,595.01 77,615,000 2042 790,000 94,050.00 680,000 124,100.00 1,395,000.00 331,350.01 1,435,000.00 562,471.25 1,620,000.00 413,225.00 1,460,000 1,153,265 7,380,000 2,678,461 10,058,461.26 70,235,000 2043 830,000 57,600.00 705,000 104,175.00 1,440,000.00 285,281.26 1,485,000.00 507,721.25 1,655,000.00 380,475.00 1,530,000 1,082,455 7,645,000 2,417,708 10,062,707.51 62,590,000 2044 865,000 19,462.50 735,000 82,575.00 1,485,000.00 237,750.01 1,545,000.00 450,908.75 1,685,000.00 347,075.00 1,605,000 1,008,250 7,920,000 2,146,021 10,066,021.26 54,670,000 2045 765,000 60,075.00 1,535,000.00 188,675.01 1,600,000.00 394,740.00 1,720,000.00 311,950.00 1,685,000 928,000 7,305,000 1,883,440 9,188,440.01 47,365,000 2046 795,000 36,675.00 1,585,000.00 137,975.01 1,655,000.00 339,405.00 1,760,000.00 274,975.00 1, 765,000 843,750 7,560,000 1,632,780 9,192,780.01 39,805,000 2047 825,000 12,375.00 1,635,000.00 84,628.13 1,710,000.00 282,200.00 1,795,000.00 236,081.25 1,855,000 755,500 7,820,000 1,370,784 9,190,784.38 31,985,000 2048 1,690,000.00 28,518.75 1,770,000.00 223,040.00 1,835,000.00 107,943.75 1,950,000 662,750 7,245,000 1,022,253 8,267,252.50 24, 740,000
2049 1,830,000.00 161,840.00 1,875,000.00 174,600.00 2,045,000 565,250 5,750,000 901,690 6,651,690.00 18,990,000 2050 1,890,000.00 98,600.00 1,920,000.00 132,412.50 2,150,000 463,000 5,960,000 694,013 6,654,012.50 13,030,000 2051 1,955,000.00 33,235.00 1,960,000.00 89,212.50 2,255,000 355,500 6,170,000 477,948 6,647,947.50 6,860,000 2052 2,005,000.00 45,112.50 2,370,000 242,750 4,375,000 287,863 4,662,862.50 2,485,000 2053 2,485,000 124,250 2,485,000 124,250 2,609,250.00 - Grant
Total 12,695,000$ 6,916,356$ 20,950,000$ 3,591,263$ 13,650,000$ 5,760,169$ 30,480,000$ 14,454,778$ 36,440,000$ 21,561,890$ 7,195,000$ 2,512,700$ 10,730,000$ 3,743,031$ 45,000,000$ 17,556,588$ 40,000,000$ 39,169,020$ 217,140,000$ 115,265,795$ 332,405,795$ General Obligation Bonds
Total End of FY GO
Bonds Balance
Annual Total
P & I
2014 Measure M (2014
Street and Integrated
Watershed)
2015 GO Refunding Bonds
(Refunding Measure G, S, I)
2016 Measure M (2016 Street
and Integrated Watershed)
2017 Measure T1 Infrastructure and
Facilities Improvementsd 2020 Measure O Affordable Housing 2020 G.O Bonds ( Series A) 2020 G.O Bonds ( Series B) 2021 G.O Bonds ( Measure T1) 2022 Measure O Affordable
Housing
Attachment 2 Exhibit B
FY Principal Interest Principal Interest Principal Interest Principal Interest Principal Interest 2022 - - - 52, 045,000 2023 352,498.83 146,881.34 1,152,501 480, 231.16 0. 00 138,200.00 840,000 1, 074,650.00 2, 345,000 1, 839,963 4, 184,962.50 49,700,000 2024 366,551.94 130,667.56 1,198,448 427, 219.93 0. 00 138,200.00 870,000 1, 041,050.00 2, 435,000 1, 737,137 4, 172,137.49 47,265,000 2025 386,460.51 111,842.25 1,263,539 365, 670.25 0. 00 138,200.00 905,000 1, 006,250.00 2, 555,000 1, 621,963 4, 176,962.50 44,710,000 2026 405,197.99 92,050.79 1,324,802 300, 961.71 0. 00 138,200.00 945,000 970, 050.00 2, 675,000 1, 501,263 4, 176,262.50 42,035,000 2027 427,448.74 71,234.62 1,397,551 232, 902.88 0. 00 138,200.00 980,000 932, 250.00 2, 805,000 1, 374,588 4, 179,587.50 39,230,000 2028 442,672.95 53,908.31 1,447,327 176, 254.19 0. 00 138,200.00 1,020,000 893, 050.00 2, 910,000 1, 261,413 4, 171,412.50 36,320,000 2029 459,068.24 40,095.28 1,500,932 131, 092.22 190, 000.00 133,450.00 1,060,000 852, 250.00 3, 210,000 1, 156,888 4, 366,887.50 33,110,000 2030 320,879.33 16,461.17 1,049,121 102, 695.08 280, 000.00 121,700.00 1,105,000 809, 850.00 2, 755,000 1, 050,706 3, 805,706.25 30,355,000 2031 1,450,000 74,187.50 290,000.00 107,450.00 1,145,000 765, 650.00 2, 885,000 947, 288 3, 832,287.50 27,470,000 2032 1,500,000 25,312.50 305,000.00 92,575.00 1,190,000 719, 850.00 2, 995,000 837, 738 3, 832,737.50 24,475,000 2033 320,000.00 76,950.00 1,240,000 672, 250.00 1, 560,000 749, 200 2, 309,200.00 22,915,000 2034 335,000.00 60,575.00 1,290,000 622, 650.00 1, 625,000 683, 225 2, 308,225.00 21,290,000 2035 350,000.00 46,950.00 1,340,000 571, 050.00 1, 690,000 618, 000 2, 308,000.00 19,600,000 2036 360,000.00 36,300.00 1,380,000 530, 850.00 1, 740,000 567, 150 2, 307,150.00 17,860,000 2037 375,000.00 27,150.00 1,425,000 489, 450.00 1, 800,000 516, 600 2, 316,600.00 16,060,000 2038 380,000.00 19,600.00 1,465,000 446, 700.00 1, 845,000 466, 300 2, 311,300.00 14,215,000 2039 390,000.00 11,900.00 1,510,000 402, 750.00 1, 900,000 414, 650 2, 314,650.00 12,315,000 2040 400,000.00 4,000.00 1,555,000 357, 450.00 1, 955,000 361, 450 2, 316,450.00 10,360,000 2041 1,600,000 310,800.00 1,600,000 310, 800 1, 910,800.00 8,760,000 2042 1,650,000 262,800.00 1,650,000 262, 800 1, 912,800.00 7,110,000 2043 1,700,000 213,300.00 1,700,000 213, 300 1, 913,300.00 5,410,000 2044 1,750,000 162,300.00 1,750,000 162, 300 1, 912,300.00 3,660,000 2045 1,805,000.00 109,800.00 1,805,000 109, 800 1, 914,800.00 1,855,000 2046 1,855,000.00 55,650.00 1,855,000 55, 650 1, 910,650.00 - Grand Total 3,160,779$ 663,141$ 13,284,221$ 2, 316,527$ 3, 975,000$ 1, 567,800$ 31, 625,000$ 14, 272,700$ 52, 045,000$ 18, 820,169$ 70,865,169$ Berkeley Rep. 2012 Refunding 1947 Center 2012 Refunding End of FY Rev
Bonds
Balance
Revenue Bonds
Annual Total
P & I
Total2016 Parking Revenue Bond
2010 Animal Shelter COP
2021 RefudingRevenue
Attachment 3Internal
FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 Total
Year 1 Year 2 Year 3 Year 4 Year 5 Year 1- 5
Parks, Park Buildings, Pools, Waterfront, and Camps - Existing Infrastructure Available Funding(1)
$3,815,000 $3,815,000 $3,815,000 $3,815,000 $3,815,000 $19,075,000 Expenditures $3,815,000 $3,815,000 $3,815,000 $3,815,000 $3,815,000 $19,075,000 Capital & Maint. Need (2)
$238,550,000
Unfunded Liability ($243,889,665) ($249,437,577) ($255,201,857) ($261,190,945) ($267,413,607) ($267,413,607) Available Funding $0 $0 $0 $0 $0 $0
Expenditures $0 $0 $0 $0 $0 $0
Capital & Maint. Need $145,130,000
Unfunded Liability ($150,790,070) ( $156,670,883) ($162,781,047) ($169,129,508) ($175,725,559) ($175,725,559) City Buildings
Available Funding $1,800,000 $2,800,000 $2,800,000 $2,800,000 $2,800,000 $13,000,000 Expenditures $1,800,000 $2,800,000 $2,800,000 $2,800,000 $2,800,000 $13,000,000 Capital & Maint. Need $314,500,000
Unfunded Liability ($324,895,300) ($334,657,017) ($344,799,440) ($355,337,419) ($366,286,378) ($366,286,378) Sidewalks & Pathways
Available Funding $1,035,000 $1,035,000 $1,035,000 $1,035,000 $1,035,000 $5,175,000 Expenditures $1,035,000 $1,035,000 $1,035,000 $1,035,000 $1,035,000 $5,175,000 Capital & Maint. Need $60,000,000
Unfunded Liability ($61,264,635) ($62,578,591) ($63,943,791) ($65,362,234) ($66,835,996) ($66,835,996) Streets & Roads
Available Funding $15,920,000 $14,820,000 $14,820,000 $14,820,000 $14,820,000 $75,200,000 Expenditures $15,920,000 $14,820,000 $14,820,000 $14,820,000 $14,820,000 $75,200,000 Capital & Maint. Need $248,750,000
Unfunded Liability ($241,910,370) ($235,946,894) ($229,750,843) ($223,313,146) ($216,624,379) ($216,624,379) Street Lights
Available Funding $400,000 $400,000 $400,000 $400,000 $400,000 $2,000,000 Expenditures $400,000 $400,000 $400,000 $400,000 $400,000 $2,000,000 Capital & Maint. Need $5,250,000
Unfunded Liability ($6,741,500) ($6,588,819) ($6,430,182) ($6,265,360) ($6,094,109) ($6,094,109) Sewers
Available Funding $20,813,315 $24,489,500 $21,967,500 $20,885,000 $20,885,000 $109,040,315 Expenditures $20,813,315 $24,489,500 $21,967,500 $20,885,000 $20,885,000 $109,040,315 Capital & Maint. Need $183,500,000
Unfunded Liability ($169,031,466) ( $150,179,102) ($133,211,855) ($116,707,602) ($99,559,684) ($99,559,684) Storm Water & Green Infrastructure
Available Funding $3,005,000 $2,050,000 $2,000,000 $2,000,000 $2,000,000 $11,055,000 Expenditures $3,005,000 $2,050,000 $2,000,000 $2,000,000 $2,000,000 $11,055,000 Capital & Maint. Need $362,000,000
Unfunded Liability ($372,995,805) ($385,412,691) ($398,365,786) ($411,824,052) ($425,807,190) ($425,807,190) Traffic Signals & Parking Infrastructure
Available Funding $400,000 $400,000 $400,000 $400,000 $400,000 $2,000,000 Expenditures $400,000 $400,000 $400,000 $400,000 $400,000 $2,000,000 Capital & Maint. Need $23,500,000
Unfunded Liability ($24,000,900) ($24,521,335) ($25,062,067) ($25,623,888) ($26,207,619) ($26,207,619) Undergrounding Project
Available Funding $0 $0 $0 $0 $0 $0
Expenditures $0 $0 $0 $0 $0 $0
Capital & Maint. Need $110,750,000
Unfunded Liability ($115,069,250) ($119,556,951) ($124,219,672) ($129,064,239) ($134,097,744) ($134,097,744) Vets & Old City Hall
Available Funding $0 $0 $0 $0 $0 $0
Expenditures $0 $0 $0 $0 $0 $0
Parks, Park Buildings, Pools, Waterfront - New Planned Infrastructure(3) San Pablo Park: Community Center and Pool; King Park: 25M Competitive Pool / Locker Room; Tom Bates Sports Complex: Youth Soccer Field, Pickleball Courts and Restroom; New Restrooms in Parks over 1 Acre: James Kenney, Aquatic, Civic Center, King, and John Hinkel Parks; James Kenney Park: Skate Spot; Waterfront Bike Park; Pier/Ferry Preferred Concept with landside and waterside improvements
Attachment 3Internal
Capital & Maint. Need $130,000,000
Unfunded Liability ($135,070,000) ($140,337,730) ($145,810,901) ($151,497,527) ($157,405,930) ($157,405,930) Transfer Station
Available Funding $0 $0 $0 $0 $0 $0
Expenditures $0 $0 $0 $0 $0 $0
Capital & Maint. Need $76,000,000
Unfunded Liability $78,964,000 $82,043,596 $85,243,296 $85,243,296 Bike & Ped Projects
Available Funding $0 $0 $0 $0 $0 $0
Expenditures $0 $0 $0 $0 $0 $0
Capital & Maint. Need $129,000,000
Unfunded Liability ($134,031,000) ($139,258,209) ($144,689,279) ($150,332,161) ($156,195,115) ($156,195,115) Transit Projects
Available Funding $0 $0 $0 $0 $0 $0
Expenditures $0 $0 $0 $0 $0 $0
Capital & Maint. Need $53,000,000
Unfunded Liability ($55,067,000) ($57,214,613) ($59,445,983) ($61,764,376) ($64,173,187) ($64,173,187) Fire Projects
Available Funding $0 $0 $0 $0 $0 $0
Expenditures $0 $0 $0 $0 $0 $0
Capital & Maint. Need $288,000,000
Unfunded Liability ($299,232,000) ($310,902,048) ($323,027,228) ($335,625,290) ($348,714,676) ($348,714,676) TOTAL
Available Funding $46,788,315 $49,409,500 $46,837,500 $45,755,000 $45,755,000 $234,545,315 Expenditures $46,788,315 $49,409,500 $46,837,500 $45,755,000 $45,755,000 $234,545,315 T1 Funding: $100M Infrastructure Bond(4)
$16,978,333 $8,093,333 $4,105,000 $0 $0 $29,176,666
Capital & Maint. Need $2,079,930,000
Unfunded Liability ($2,094,793,723) ($2,118,987,845) ($2,150,685,871) ($2,188,807,620) ($2,228,416,117) ($2,228,416,117) (3) If new planned infrastructure is built, there will be approx. $44M in savings realized in existing infrastructure cost estimates. (4) The $100M T1 bond funding allocations started in 2017 and are planned to be exhausted in 2026. (1) Unless otherwise noted, available funding includes recurring sources of capital and major maintenance funding. (2) Capital & Maint. Needs are current estimates of unfunded needs. Needs are estimated to increase at a rate of 3.9% per year.
Public Buildings - Appraisal of Assets Valued @ $5M or More Other ID. Address Sq Feet Year Built Last Appr. Occupied As Leased Owned Total Values MAIN LIBRARY 2090
KITTREDGE
STREET
(FRONT)
102,000 1931 2021 LIBRARY - HIGH
END
OWNED $ 83,882,271
CIVIC CENTER BUILDING
ANNEX
1947 CENTER
STREET
112,798 1947 2021 PUBLIC WORKS
ENGINEERING AND
TRANSPORTATION
OWNED $ 80,731,494
CENTER STREET
GARAGE AND
COMMERCIAL SPACE
2025 CENTER
STREET
248,000 2018 2021 CITY AND PUBLIC
PARKING AND
OFFICE
OWNED $ 44,950,008
MARTIN LUTHER KING
JR. CIVIC CENTER
2180 MILVIA
STREET
89,075 1940 2021 OFFICE BUILDING OWNED $ 76,798,274
PUBLIC SAFETY
BUILDING (INCLUDES
PRIIMARY EOC)
2100 MARTIN
LUTHER KING
JR WAY
60,108 2000 2021 POLICE
STATION/FIRE
STATION OFFICES
OWNED $ 40,144,015
OLD CITY HALL 2134 MARTIN
LUTHER KING
JR. WAY
38,400 1908 2021 OFFICE OWNED $ 29,831,879
TELEGRRAPH/CHANNING
(SATHER GATE) MALL
AND GARAGE
2438 DURANT
AVENUE/CHAN
NING AVENUE
186,890 1990 2021 PARKING GARAGE
W/RETAIL
OWNED $ 22,081,096
FIRE DEPARTMENT
WAREHOUSE
1011 FOLGER
AVENUE
8,021 2011 2019 WAREHOUSE OWNED $ 13,373,058
DONA SPRING ANIMAL
SHELTER
1 BOLIVAR
DRIVE
11,700 2013 2021 ANIMAL SHELTER OWNED $ 9,875,519 LIBRARY-WEST BRANCH 1125
UNIVERSITY
AVENUE
9,300 2013 2021 LIBRARY OWNED $ 8,446,998
TAREA HALL PITTMAN
SOUTH BRANCH
1901 RUSSELL
STREET
8,700 2013 2021 LIBRARY OWNED $ 7,789,776
OXFORD STREET
GARAGE
2165
KITTREDGE
STREET
42,128 2009 2021 PARKING/RETAIL OWNED $ 6,241,391 BERKELEY REP THEATER 2025 ADDISON
STREET
24,893 2000 2016 THEATRE OWNED $ 6,678,445
VETERANS MEMORIAL
HALL
1931 CENTER
STREET
33,254 1923 2021 ASSEMBLY AND
HOMELESS
SHELTER
OWNED $ 20,390,535
Attachment 3, Exhibit BPage 34 of 74
Public Buildings - Appraisal of Assets Valued @ $5M or More Other ID. Address Sq Feet Year Built Last Appr. Occupied As Leased Owned Total Values Attachment 3, Exhibit B
NORTH BERKELEY
SENIOR CITIZENS
CENTER
1901 HEARST
AVENUE
20,880 1977 2021 SENIOR CENTER OWNED $ 6,661,453
JAMES KENNEY
RECREATION CENTER
1718 & 1720
8TH STREET
17,724 1973 2019 RECREATION
CENTER/ASSEMBL
Y
OWNED $ 6,740,269
LIBRARY-NORTH
BRANCH
1170 THE
ALAMEDA
9,555 1936 2019 LIBRARY OWNED $ 6,571,658
LIBRARY - CLAREMONT
BRANCH
2940
BENVENUE
AVENUE
8,110 1924 2019 LIBRARY OWNED $ 5,403,431
SOUTH BERKELEY
SENIOR CENTER
2939 ELLIS
STREET
17,156 1977 2019 SENIOR CENTER OWNED $ 6,441,480 BERKELEY MARINA 201
UNIVERSITY
AVENUE
152,571 1974 2019 BOAT DOCKS OWNED $ 6,171,038
BERKELEY TUOLUMNE
CAMP
31585 HARDIN
FLAT RD,
GROVELAND,
CA
34,365 2022 DINING HALL/TENT
CABINS/DESK
OWNED $ 13,470,651
HS LORDSHIPS 199 SEAWALL 25,000 1967 2021 RESTAURANT AND
SPECIAL EVENT
VENUE
OWNED $ 10,246,736
512,921,475$ TOTAL
Attachment 4
5 YEARS PROJECTED GENERAL FUND
REVENUES
Projected General Fund
Revenue
FY 2023 through FY 2027
FY 2023
Adopted FY 2023 FY 2024 FY 2025 FY 2026 FY 2027
Undesignated Revenues
Secured Property Taxes 75,664,920 79,091,256 81,859,450 84,724,531 87,689,889 90,759,035 Supplemental Taxes 2,000,000 2,300,000 2,300,000 2,300,000 2,300,000 2,300,000 Unsecured Property Taxes 3,516,000 3,516,000 3,516,000 3,516,000 3,516,000 3,516,000 Property Transfer Taxes 18,000,000 18,000,000 16,000,000 16,000,000 16,000,000 16,000,000 Property Transfer Tax - Measure P 14,073,750 14,073,750 14,073,750 14,073,750 14,073,750 14,073,750 Sales Taxes 19,016,546 19,634,807 19,391,714 20,231,914 21,146,495 22,043,410 Soda Tax 990,210 1,025,800 1,025,800 1,025,800 1,025,800 512,900 Utility Users Taxes 13,800,000 15,000,000 15,000,000 15,000,000 15,000,000 15,000,000 Transient Occupancy Taxes(TOT) 5,000,000 7,500,000 7,725,000 7,956,750 8,195,453 8,441,316 Short-term Rentals 1,000,000 1,400,000 1,400,000 1,400,000 1,400,000 1,400,000 Business License Taxes 19,000,000 19,000,000 19,000,000 19,380,000 19,767,600 19,767,600 Recreational Cannabis 1,400,000 1,400,000 1,400,000 1,428,000 1,456,560 1,456,560 Measure U1 4,900,000 4,900,000 4,900,000 4,998,000 5,097,960 5,097,960 Other Taxes 2,631,441 3,331,441 3,331,441 3,331,441 3,331,441 3,331,441 Vehicle In Lieu Taxes 15,926,168 16,626,651 17,208,584 17,810,884 18,434,265 19,079,464 Parking Fines - Regular Collections 4,326,450 4,800,000 4,800,000 4,800,000 4,800,000 4,800,000 Parking Fines - Booting Collections - - - - - -
Moving Violations 132,600 132,600 132,600 135,252 137,957 137,957 Ambulance Fees 3,880,779 5,330,779 5,350,779 3,880,779 3,880,779 3,880,779 Interest Income 6,000,000 7,000,000 7,000,000 7,000,000 7,000,000 7,000,000 Franchise Fees 1,613,283 1,720,056 1,720,056 1,720,056 1,720,056 1,720,056 Other Revenues 6,729,977 7,529,977 7,529,977 7,529,977 7,529,977 7,529,977 Indirect cost reimbursements 5,490,000 5,990,000 5,990,000 5,990,000 5,990,000 5,990,000 Transfers 17,096,148 17,096,148 21,023,924 4,472,621 4,562,074 4,562,074
Total Undesignated Revenues 242,188,272 256,399,265 261,679,074 248,705,755 254,056,056 258,400,279
Attachment 4
Designated Revenues
Prop. Transfer Taxes for capital improvements 16,462,172 16,462,172 12,962,172 13,541,415 13,541,415 14,132,244 Total Designated Revenues 16,462,172 16,462,172 12,962,172 13,541,415 13,541,415 14,132,244
TOTAL REVENUES AND TRANSFERS 258,650,444 272,861,437 274,641,246 262,247,170 267,597,471 272,532,523 Property Taxes
Given th e continued h
igh collection rate, and the resilience of property values in the City, as well as a large volume of recent property sales (which bring assessed values to market value), we are projecting that annual growth will be approximately 5.5% over the next several years. The persistence of strong growth of property valuations in recent years, as well as the spike in current year sales (which bring properties assessed valuations to market value), have caused staff to increase the projected growth rate from the 3.5% that we have used in prior long-term projections.
Sales Taxes
The immense effects of COVID-19 on sales tax revenue in FY 2021 were largely reversed in FY 2022, with revenue levels almost back to FY 2019 levels, and staff now project growth to level off to approximately 4% in FY 2024.
There is still some potential risk that an overall slowdown in underlying economic recovery will be reflected in reduced growth in consumer spending and sales tax collections.
Business License Taxes
We are projecting a 5% growth in Business License Tax revenue from heavily impacted FY 2021 levels, as economic activity recovers from the recession caused by the pandemic. Long -term projections will be adjusted as the post - pandemic economic environment becomes clearer. 2023 business license returns (for 2022 gross receipts) are just now being received, so we will know more about how revenues are trending once they are processed over the next month or so.
Transient Occupancy Tax
With recovery of business at the City’s hotels expected to lag behind general economic recovery, and relying on industry guidance regarding predicted occupancy levels, we are currently projecting only 3% annual growth from current revenue levels. Even after taking into consideration the new downtown hotel, we will continue to monitor the major hotels’ projections of future occupancies and will adjust long-term projections as necessary.
Utility Users Tax
We expect UUT revenue to rise marginally from FY 2022 through FY 2024, after increasing slightly in the current year due to rate increases approved by the Public Utilities Commission. Revenues are expected to remain flat after FY 2024 and beyond after all the rate increases have been actualized.
Attachment 4
Transfer Tax
Given the continued strength in property values and in sales activity, we expect Transfer Tax revenues to remain basically flat from FY 2024 – FY 2027. The spike in revenue being seen in FY 2022, and to a lesser extent in FY 2023, is likely due to sales triggered by looming interest rate increases that have been signaled by the Federal Reserve, as well as some pent- up demand from mildly depressed sales during the pandemic. Over the 5 years prior to the pandemic, transfer tax revenues grew 6% per year on average, but interest rate increases will probably negatively impact sales prices and volumes somewhat in the next few years. We also expect revenues from Measure P supplemental tax on high value property transfers to remain basically flat.
CITY OF BERKELEY
Pension and OPEB
Funding Study
Mary Elizabeth Redding, FSA, EA, MAAA
Bianca Lin, FSA, EA, MAAA
Katherine Moore, ASA, MAAA
Wai Man Yam
Foster & Foster, Inc.
February 23, 2023
l:\berkeleycity\opeb\unfunded_liability_study\2022\f&f_berkeleycity_23-02-23_pension_and_opeb_funding_study_v2.docx Agenda
OPEB
OPEB Funding Recommendation
CalPERS
CalPERS Funding Recommendation
Summary
February 23, 2023 1
OPEB
February 23, 2023 2
Definitions
OPEB: Other (than pension) Post Employment Benefits: Medical benefits paid to retirees
No legal requirement to provide OPEB
Depends on bargaining agreements
Unlike pensions, could be eliminated for future hires Depending on bargaining agreements, could be changed
for current employees/retirees
February 23, 2023 3
Definitions
Normal Cost (NC): value of benefits earned by employees in the coming year
Actuarial Accrued Liability (AAL): value of benefits earned to date
Unfunded Actuarial Accrued Liability (UAL):
AAL minus Assets
Discount Rate (DR): Rate used to calculate present value of future benefits.
Based on expected rate of return on invested assets.
Higher rate => lower present value
February 23, 2023 4
Definitions
Actuarially Determined Contribution (ADC): Full Prefunding:
Normal Cost plus
Amortization (payment over time) of UAAL
Why is there a UAAL?
OPEB was not fully funded in the past
Cost of benefits being earned every year should have been paid since plan inception
Cost of benefits being earned is currently $8 million/year Things did not always happen as expected
February 23, 2023 5
OPEB Funding Study Assumptions
Projection assumptions for study
Current investment policy: 3%/year future returns
Full prefunding = normal cost + 20 year amortization of unfunded actuarial accrued liability
No change in number of active employees
Note: Investing funds for the long term should provide higher returns, on average, and reduce needed City contributions.
February 23, 2023 6
OPEB Benefit Summary
Miscellaneous Fire PERIP Police
Benefit Up to cap Up to cap Kaiser 2-party
premium
amount
Up to cap
Cap depends on Retirement date,
Bargaining Unit,
Coverage
Retirees after
1997 only
Retirement
before
September
2012
Retirement
after
September
2012
100% of Cap 20 years 25 years N/A 20 years
Cap Increases Kaiser premium
increases, up to
4.5%/Year
4.5% per year No limit Kaiser
premium
increases, up
to 6%/Year
Current Trust
Contributions
% of payroll; in
MOUs
About 1/3 of
recommended
contribution
Retiree
premium
amount
About 8% of
recommended
contribution
February 23, 2023 7
OPEB - Miscellaneous
$-
$1
$2
$3
$4
$5
$6
$7
2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031
Contribution
(Amounts in millions)
Benefit Payments Current Contribution Amounts
Full Pre-Funding, DR 3%
February 23, 2023 8
OPEB - Miscellaneous
$-
$20
$40
$60
$80
$100
$120
$140
$160
$180
2021 2024 2027 2030 2033 2036 2039 2042 2045 2048 2051
Unfunded Actuarial Accrued Liability
(Amounts in millions)
Current Contribution Amounts Full Pre-Funding, DR 3%
February 23, 2023 9
OPEB – Police
$-
$1
$2
$3
$4
$5
$6
$7
2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031
Contribution
(Amounts in millions)
Benefit Payments Current Contribution Amounts
Full Pre-Funding, DR 3%
February 23, 2023 10
OPEB – Police
$-
$20
$40
$60
$80
$100
$120
$140
$160
$180
2021 2024 2027 2030 2033 2036 2039 2042 2045 2048 2051
Unfunded Actuarial Accrued Liability
(Amounts in millions)
Current Contribution Amounts Full Pre-Funding, DR 3%
February 23, 2023 11
OPEB – Fire
$-
$1
$2
$3
$4
$5
$6
$7
2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031
Contribution
(Amounts in millions)
Benefit Payments Current Contribution Amounts
Full Pre-Funding, DR 3%
February 23, 2023 12
OPEB - Fire
$-
$20
$40
$60
$80
$100
$120
$140
$160
$180
2021 2024 2027 2030 2033 2036 2039 2042 2045 2048 2051
Unfunded Actuarial Accrued Liability
(Amounts in millions)
Current Contribution Amounts Full Pre-Funding, DR 3%
February 23, 2023 13
Police Retirement Income Plan (PERIP)
$-
$1
$2
$3
$4
$5
$6
$7
2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031
Contribution
(Amounts in millions)
Benefit Payments Current Contribution Amounts
Full Pre-Funding, DR 3.0%
February 23, 2023 14
Police Retirement Income Plan (PERIP)
$-
$20
$40
$60
$80
$100
$120
$140
$160
$180
2021 2024 2027 2030 2033 2036 2039 2042 2045 2048 2051
Unfunded Actuarial Accrued Liability
(Amounts in millions)
Current Contribution Amounts Full Pre-Funding, DR 3.0%
February 23, 2023 15
Total of All OPEB Plans
Summary of Recommendation
($ Millions)
Plan
Current
Contribution
Amounts
Increase
Full Pre-
Funding
ADC
(DR 3%)
Miscellaneous $2.5 $2.1 $4.6
Fire 0.9 1.7 2.6
PERIP 2.8 1.4 4.3
Police 0.3 3.5 3.9
Total $6.5 $8.8 $15.3
Recommended contributions are based on 3% expected annual return on trust funds. Higher expected returns would lower needed funding.
February 23, 2023 16
Total of All OPEB Plans
February 23, 2023 17
CalPERS Pensions
February 23, 2023 18
How Did We Get A Large
CalPERS Unfunded Liability?
Combination of many factors
Large investment losses in some years combined with
“smoothing” policy delayed funding improvement.
Enhanced benefits
Demographics - growing number of retirees
Updated & strengthened actuarial assumptions
PEPRA (hires after 1/1/2013) beginning to help contributions The City has always paid the required CalPERS contributions
February 23, 2023 19
Number of Pension Members
February 23, 2023 20
Pension Funded Status (Combined)
Do as combined Misc. Police, Fire
February 23, 2023 21
Miscellaneous–CalPERS Rates (% Payroll)
0%
10%
20%
30%
40%
50%
60%
Contribution Projection – Percent of Pay
25th Percentile 50th Percentile 75th Percentile
February 23, 2023 22
Fire–CalPERS Rates ($millions)
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Contribution Projection – Percent of Pay
25th Percentile 50th Percentile 75th Percentile
February 23, 2023 23
Police–CalPERS Rates (% Payroll)
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
110%
120%
Contribution Projection – Percent of Pay
25th Percentile 50th Percentile 75th Percentile
February 23, 2023 24
Total Projected CalPERS Contributions
($Millions)
72.3 71.1
76.0 78.2
82.9 87.1
95.8 100.2 104.2 104.5 107.4 107.8
41.6 40.6 43.5 44.2 47.1 49.5
54.8 57.3 59.7 59.1 61.0 61.2
20.0 20.3 21.5 22.4 23.6 24.7 26.7 27.9 29.0 29.5 30.2 30.3
10.6 10.2 11.0 11.5 12.2 12.9 14.3 15.0 15.6 15.8 16.2 16.3 $0
$20
$40
$60
$80
$100
$120
22/23 23/24 24/25 25/26 26/27 27/28 28/29 29/30 30/31 31/32 32/33 33/34 Contribution Projection ($Millions)
Miscellaneous & Safety
Total Miscellaneous Safety Police Safety Fire
February 23, 2023 25
CalPERS Funding
February 23, 2023 26
Reduce/Eliminate Unfunded Liability
The City is already paying the full actuarially determined contribution for its CalPERS plans
The City’s funded status is similar to other CalPERS public agencies
Most ideas to pay down the unfunded liability ahead of schedule are not recommended
Pension Obligation Bond (POB) is interest arbitrage
Success not guaranteed
Unlike OPEB, City cannot leave CalPERS
New hires must be in CalPERS
Current employees must retain current benefits
$2.1 Billion payment needed to leave CalPERS
February 23, 2023 27
Irrevocable Supplemental (§115) Trust
Can only be used to:
Reimburse City for CalPERS contributions
Make payments directly to CalPERS
Investments significantly less restricted than City investment funds
City’s §115 Trust
Established in FY2018
Contributions up to $5.2 Million per year
Current target contribution $5.5 Million per year
Balance 6/30/2022 $14.8 Million
February 23, 2023 28
Irrevocable Supplemental (§115) Trust
Best use: Rate Stabilization
Add to Trust when possible
Use Trust funds to help pay CalPERS contributions in highest years or if unexpected increases
Accumulate funds to eventually pay down UAL
Target:
Consider City’s reserve policy?
Consider potential variability of projected contributions? In 10 years, 50% chance of contributions $25M larger or smaller than projected
Consider potential contribution impact of large
investment loss?
February 23, 2023 29
Example: Impact of 1 Year Poor Returns
Difference in Contributions Due to Poor 2022 Investment Return
February 23, 2023 30
Example: Impact of 1 Year Poor Returns
Difference in Contributions Due to Poor 2022 Investment Return (Total City Plans)
($Millions)
Payment Year
Increase
Each Year
Cumulative
Increase
2024/25 $4.9 $4.9
2025/26 9.7 14.6
2026/27 14.5 29.2
2027/28 19.3 48.5
2028/29 24.1 72.6
February 23, 2023 31
CalPERS Funding Recommendation
Prioritize OPEB
Continue funding CalPERS §115 Trust as possible
Current $5.5M/year target is ideal
Recommend trust balance of $25M to $50M
Higher balance could be used to pay down UAL
February 23, 2023 32
Summary
February 23, 2023 33
Summary of Recommendations
OPEB Funding (Misc, Police, Fire, “PERIP”)
Full pre-funding; will increase annual contribution
Total $8.8 million additional per year
CalPERS
Continue targeting $5.5 million per year
February 23, 2023 34
Thank You
Homeless Services
Panel of Experts
2180 Milvia Street, Berkeley, CA 94704 ● Tel: (510) 981-7000 ● TDD: (510) 981-6903 ● Fax: (510) 981-7099 E-mail: [email protected] Website: http://www.CityofBerkeley.info/Manager
ACTION CALENDAR
April 11, 2023
To: Honorable Mayor and Members of the City Council
From: Homeless Services Panel of Experts
Submitted by: Carole Marasovic, Chair, Homeless Services Panel of Experts Subject: Recommendation for RV Lot and Waste Management on Streets for RVs
RECOMMENDATION
The Homeless Services Panel of Experts recommends to Council that they refer to staff to expedite all efforts to identify a location for another RV lot(s) to take the place of the now closed SPARK lot at 742 Grayson and that the new lot identified require mandatory safety inspections and fire extinguishers to be provided. The Homeless Services Panel of Experts further recommends that Council refer to staff to develop a waste management plan to be implemented for RVs currently on the streets.
FISCAL IMPACTS OF RECOMMENDATION
This two-part recommendation needs to be evaluated by City staff and the Council Budget and Finance Committee to assess the costs of implementation.
CURRENT SITUATION AND ITS EFFECTS
The SPARK RV lot at 742 Grayson closed at the same time that Horizon at 742 Grayson closed at the end of December, 2022. While arrangements were made for the residents of Horizon to move into the Berkeley Inn, no lot could be identified to hold the residents of the SPARK lot.
The SPARK lot was a successful endeavor with a capacity of 40 RVs. Safety inspections were not required which may have led to a fire of a vehicle.
RVs formerly in the lot have been left to roam the streets with health and safety risks to the dwellers who formerly resided there and with complaints from the larger community.
RV dwellers have the legal right to shelter in their vehicles. They require a lot to do so.
Despite the land limitations, the City needs to amp up efforts to identify another lot to be overseen by a social services provider. Fire extinguishers must be provided and there should be safety inspections.
For health and sanitation purposes, remaining RVS on the street should have waste management services provided. Waste management services were provided at SPARK,
Recommendation for RV Lot and Waste ACTION CALENDAR
Management on Streets for RVs April 11, 2023
should be provided at the new RV lot and for the health and sanitation of the RV dwellers and the larger community should be provided to RV dwellers living on the streets given the limited capacity of the RV lot provided.
BACKGROUND
On February 1, 2023, the Homeless Services Panel of Experts recommended as follows:
Action: M/S/C Marasovic/Johnson recommends to Council that they refer to staff to expedite all efforts to identify a location for another RV lot(s) to take the place of the now closed SPARK lot at 742 Grayson and that the new lot identified require mandatory safety inspections and fire extinguishers to be provided. The Homeless Services Panel of Experts further recommends that Council refer to staff to develop a waste management plan to be implemented for RVs currently on the streets.
Vote: Ayes: Johnson, Jones, Marasovic, Feller, Kealoha-Blake, and Meany.
Noes: None. Abstain: None. Absent: Bookstein.
ENVIRONMENTAL SUSTAINABILITY AND CLIMATE IMPACTS
The benefits to the environment in terms of health and safety for the RV dwellers and the larger community, as to both recommendations, are indisputable.
RATIONALE FOR RECOMMENDATION
The need for the RV lot for the health and safety of the RV dwellers and larger community is stated above.
ALTERNATIVE ACTIONS CONSIDERED
Overnight lots, City or faith-based, could be explored but they are difficult to manage particularly by a single provider. In addition, they leave RV dwellers to wander the Berkeley streets during the day.
CITY MANAGER
See Companion Report.
CONTACT PERSON
Josh Jacobs, Homeless Services Coordinator, Neighborhood Services, (510) 981-5435
Office of the City Manager
2180 Milvia Street, Berkeley, CA 94704 ● Tel: (510) 981-7000 ● TDD: (510) 981-6903 ● Fax: (510) 981-7099 E-mail: [email protected] Website: http://www.CityofBerkeley.info/Manager
ACTION CALENDAR
April 11, 2023
To: Honorable Mayor and Members of the City Council
From: Dee Williams-Ridley, City Manager
Submitted by: Peter Radu, Assistant to the City Manager Subject: Companion Report to Recommendation for RV Lot and Waste Management on Streets for RVs
RECOMMENDATION
Refer the Homeless Services Panel of Experts’ recommendation to identify and expedite a new safe RV parking location/program and develop a waste management plan for RVs on the streets to the Budget and Finance Policy Committee for consideration alongside all other homeless services priorities in the budget process.
FISCAL IMPACTS OF RECOMMENDATION
As the Homeless Services Panel of Experts mention in their report, this recommendation needs to be evaluated by City staff and the Council Budget and Finance Committee to assess the costs of implementation. Costs will vary depending on locations, number of vehicles served, and breadth of social services offered to participants.
CURRENT SITUATION AND ITS EFFECTS
Staff do not disagree with the spirit of the Homeless Services Panel of Experts recommendation to quickly identify a location for another RV lot(s) to take the place of the now closed SPARK lot at 742 Grayson, that the new lot identified require mandatory safety inspections and fire extinguishers, and to develop a management plan to be implemented for RVs currently on the streets. However, this plan would require funding that is not currently identified. Moreover, as staff presented to the Budget and Finance Policy Committee on February 9, 2023, Measure P (the most likely source for implementing this recommendation) is projecting serious structural deficiencies over the remaining 5 years of its lifespan, and staff have recommended new shelter programs (such as the proposed master lease of the Super 8 at 1619 University Ave, which has the opportunity to leverage State funding on a 1:1 match basis) be prioritized first.
For these reasons, and given the limited staff capacity to identify, design, lease up and contract multiple new programs at once, we recommend sending this request to the Budget and Finance Committee for consideration in the budget process.
Companion Report to Recommendation for RV Lot ACTION CALENDAR April 11, 2023
BACKGROUND
On February 1, 2023, the Homeless Services Panel of Experts recommended as follows:
Action: M/S/C Marasovic/Johnson recommends to Council that they refer to staff to expedite all efforts to identify a location for another RV lot(s) to take the place of the now closed SPARK lot at 742 Grayson and that the new lot identified require mandatory safety inspections and fire extinguishers to be provided. The Homeless Services Panel of Experts further recommends that Council refer to staff to develop a waste management plan to be implemented for RVs currently on the streets.
Vote: Ayes: Johnson, Jones, Marasovic, Feller, Kealoha-Blake, and Meany.
Noes: None. Abstain: None. Absent: Bookstein.
ENVIRONMENTAL SUSTAINABILITY AND CLIMATE IMPACTS
There are no environmental concerns with the recommendation to refer this item to the Budget and Finance Policy Committee. This recommendation is consistent with emergency preparedness needs for the unhoused community.
RATIONALE FOR RECOMMENDATION
The resources available to the unhoused community are extremely limited and spending funding on a recreational vehicle lot needs to be weighed against the other funding priorities for our homeless services.
ALTERNATIVE ACTIONS CONSIDERED
Alternative sites could also be identified to expand current shelter capacity which may alleviate the need for additional lot space.
CONTACT PERSON
Josh Jacobs, Homeless Services Coordinator, Neighborhood Services, (510) 225-8035
Peace and Justice Commission
2180 Milvia Street, Berkeley, CA 94704 ● Tel: (510) 981-7000 ● TDD: (510) 981-6903 ● Fax: (510) 981-7099 E-Mail: [email protected] Website: http://www.cityofberkeley.info/manager
ACTION CALENDAR
APRIL 11, 2023
To: Honorable Mayor and Members of the City Council
From: Peace and Justice Commission
Submitted by: George Lippman, Chairperson, Peace and Justice Commission Subject: Referral of two health educator positions to the COB FY 2024 budget process
RECOMMENDATION:
Refer to the budget process a request for estimated $150,000 annually, beginning in FY 2024 or as early as the AAO #2 process in spring 2023, for staffing, materials, and supplies to be able to more broadly and flexibly conduct health education, prevention, and outreach to reduce health disparities, as proposed by the Peace and Justice Commission.
FISCAL IMPACTS OF RECOMMENDATION
Estimated annual cost: $150,000. This estimate was given by Dr. Lisa Warhuus, HHCS Director, for staffing, materials, and supplies to be able to more broadly and flexibly conduct health education, prevention, and outreach to reduce health disparities.
CURRENT SITUATION AND ITS EFFECTS:
According to HHCS Director Dr. Lisa Warhuus, “the overriding health challenge in Berkeley are health disparities....For many years, we have seen significant disparities between the health status of our white community members (generally well above national averages), and our BIPOC community members. Geographically, this shows up with generally excellent health outcomes for people living in the hills, with less ideal outcomes in zip codes in South and West Berkeley (although this is shifting somewhat with gentrification). In recent years, other high-risk populations would include people experiencing homelessness and, to some extent, the LGBTQ+ community (though we need more research on the latter as it can very dependent upon circumstances). “One of the biggest challenges we have in addressing health disparities is in the communications and outreach (prevention) component of the work. We need to do more culturally responsive outreach to those most negatively impacted by disparities, engage and listen to what people feel is most needed, and work with them to fill that gap. In doing so over the years, our Public Health division has often found that what is most missing is trust in the system, information and education done in a culturally responsive way, and clear access points for medical insurance, coverage, and a medical home.
Referral of two health educator positions to the COB FY 2024 budget process ACTION CALENDAR April 11, 2023
“For instance, in a health assessment conducted by the Public Health Division in 2018, the highest priority identified by Berkeley participants to achieve a healthy community was communities that had access to basic needs and services (i.e. healthcare, housing, healthy food, transportation, etc.), felt connected and was treated with openness, tolerance, and inclusion, and had resources and up to date information on services. “The greatest threats to optimal health that community members identified were high costs of living, food security, and stress/mental wellness with recurring barriers being lack of or limited information and resources available to community members.” At its regular meeting January 9, 2023, the Peace and Justice Commission adopted the following recommendation proposing the hiring of two health educator positions for the next fiscal year.
M/S/C: Bohn, Jaqulin.
Ayes: Lippman, Jacqulin, Bohn, Lee, Morizawa, Gussmann.
Noes: None.
Abstain: Maran.
Absent: Leon-Maldonado.
ENVIRONMENTAL SUSTAINABILITY
N/A
BACKGROUND
Peace and Justice commissioners, along with members of the Commission on the Status of Women and the Community Health Commission, recently met with HHCS Director Dr. Lisa Warhuus and Public Health Manager Janice Chin, at Council’s request, to discuss resources for and obstacles to reproductive health services and education.
Dr. Warhuus clarified that “from the lens of HHCS, the work in Berkeley needs to be centered on health disparities in the larger context first,” and to “ensure that our Public Health Division continuously includes Reproductive and Sexual Health (RSH) work as a part of their broader health education, prevention, and outreach strategy.” HHCS is bringing on a consultant who will organize and engage community members and other stakeholders to create a Community Health Assessment and a Community Health Improvement Plan, including a pilot program to create a health innovation zone to work toward remedying severe health inequities. Performance measures will be tracked through a new web-based population data health platform that will be rolled out as part of this process.
Referral of two health educator positions to the COB FY 2024 budget process ACTION CALENDAR April 11, 2023
RATIONALE FOR RECOMMENDATION
HHCS would benefit from hiring staff and paying for materials and supplies out of general fund to be able to more broadly and flexibly conduct health education, prevention, and outreach to reduce health disparities.
The department is facing the lack of sufficient resources to do culturally responsive outreach, engagement, and prevention on an unconstrained basis. Engagement of these educators would assist with Reproductive and Sexual Health (RSH) outreach as part of the larger health outreach program.
ALTERNATIVE ACTIONS CONSIDERED
None
CITY MANAGER
See companion report.
CONTACT PERSON
George Lippman, Chairperson, Peace and Justice Commission Okeya Vance-Dozier, Commission Secretary, (510) 684-0503
Office of the City Manager
2180 Milvia Street, Berkeley, CA 94704 ● Tel: (510) 981-7000 ● TDD: (510) 981-6903 ● Fax: (510) 981-7099 E-Mail: [email protected] Website: http://www.cityofberkeley.info/manager
ACTION CALENDAR
April 11, 2023
To: Honorable Mayor and Members of the City Council
From: Dee Williams-Ridley, City Manager
Submitted by: Peter Radu, Assistant to the City Manager Subject: Companion Report: Referral of two health educator positions to the COB FY 2024 budget process
RECOMMENDATION:
Refer to the Peace and Justice Commission’s request for $150,000 annually for staffing, materials, and supplies for health education and outreach to the Budget and Finance Policy Committee for further deliberation.
FISCAL IMPACTS OF RECOMMENDATION
There are no fiscal impacts associated with this recommendation.
CURRENT SITUATION AND ITS EFFECTS:
The Peace and Justice Commission has requested $150,000 annually to fund two health educator positions. The City Manager does not disagree with the potential merit of this request, but rather recommends that Council clearly identify concrete impacts and outcomes for the positions, as well as a budget source, before referring them for funding.
Moreover, further deliberation allows Council to work with staff to identify any existing baseline services that could be supplemented, which may provide a more cost-efficient means of meeting outstanding needs than hiring new staff.
ENVIRONMENTAL SUSTAINABILITY AND CLIMATE IMPACTS
There are no environmental benefits nor challenges associated with this recommendation.
BACKGROUND
At its regular meeting January 9, 2023, the Peace and Justice Commission adopted the following recommendation proposing the hiring of two health educator positions for the next fiscal year.
M/S/C: Bohn, Jaqulin.
Ayes: Lippman, Jacqulin, Bohn, Lee, Morizawa, Gussmann.
Public
Companion Report: Referral of two health educator positions to the ACTION CALENDAR COB FY 2024 budget process April 11, 2023
Noes: None.
Abstain: Maran.
Absent: Leon-Maldonado.
RATIONALE FOR RECOMMENDATION
A clearer picture of desired impacts and outcomes associated with this request compared to baseline services, as well as financial implications, should be identified at the Committee level before recommending them to the full Council for funding.
ALTERNATIVE ACTIONS CONSIDERED
Council could refer this request directly to the budget process.
CONTACT PERSON
Peter Radu, Assistant to the City Manager, (510) 981-7045.
Environment and Climate Commission
2180 Milvia Street, Berkeley, CA 94704 ● Tel: (510) 981-7000 ● TDD: (510) 981-6903 ● Fax: (510) 981-7099 E-Mail: [email protected] Website: http://www.CityofBerkeley.info/Manager
INFORMATION CALENDAR
April 11, 2023
To: Honorable Mayor and Members of the City Council
From: Environment and Climate Commission (ECC)
Submitted by: Ben Gould, Chairperson, ECC
Subject: Environment and Climate Commission 2023 Work Plan
INTRODUCTION
The Environment and Climate Commission is responsible for advising the City Council on matters related to environmental sustainability and climate change. The commission’s scope includes work to advance the goals of: advancing green buildings and resource efficiency; decarbonizing buildings and transportation; engaging and educating the community; addressing the impacts and welfare of all species, including animals, insects, and plants; reducing greenhouse gas emissions; reducing toxics and preventing pollution; and supporting environmental justice. The commission works closely with the City of Berkeley’s Office of Energy & Sustainable Development (OESD).
CURRENT SITUATION AND ITS EFFECTS
The ECC has a broad scope and a responsibility to support and work closely with OESD staff. The following projects are the current efforts underway by the ECC:
Project Status Description
Transportation
Public Space
Re-allocation &
Vehicle Miles
Traveled (VMT)
Targets
In Committee Re-allocate public street space away from auto- centric uses towards pedestrians, bicyclists, and
buses, even more than currently envisioned in
the bicycle and pedestrian master plans.
Consider setting specific, measurable VMT
reduction targets and identify and implement
strategies to achieve them.
Encourage
cargo bike
deliveries
In Committee Encourage e-bike deliveries to & by businesses.
Native Plants
and Pest
Reduction
In Committee Identify opportunities & strategies to support native plants & avoid pesticides.
ECC 2023 Work Plan INFORMATION CALENDAR
April 11, 2023
OESD input &
support
Ongoing Support OESD staff with feedback on programs,
standards, and other initiatives, including the
Building Emissions Saving Ordinance (BESO),
the Berkeley Existing Buildings Electrification
Strategy (BEBES), the Climate Equity Fund,
Climate Action planning, etc.
At its February 22, 2023 meeting the Environment and Climate Commission approved the work plan to send to the City Council as follows: Motion/second to approve the 2023 Workplan as revised during the meeting (Tregub, Hedlund). The motion carried 9-0-0-0; Ayes: Tregub, Ranney, Hedlund, McGuire, Tahara, Allen, Guliasi, Lunaparra, Gould.
Noes: None. Abstain: None. Absent: None.
BACKGROUND
First established in 2022, ECC was formed by merging the Community Environmental Advisory Commission (CEAC) and the Energy Commission (EC). ECC commissioners bring a wide range of expertise, with backgrounds in government, academia, nonprofit, and private sector environmental work. These backgrounds inform ECC’s work and help it to consider diverse and equitable approaches to addressing the City’s environmental challenges.
This work plan is intended to provide a guide to the work ECC plans to take on in 2022.
As additional items or issues arise, or are referred to the Commission from Council, ECC will adjust this plan accordingly.
ENVIRONMENTAL SUSTAINABILITY AND CLIMATE IMPACTS
ECC’s initiatives will improve environmental sustainability, reduce greenhouse gas emissions, and support a just transition.
POSSIBLE FUTURE ACTION
ECC is considering the following potential additional efforts:
Project Status Description
Green New
Deal policies
Conceptual Develop and support Green New Deal policies
for Berkeley.
Electrification
Information
Campaign
Conceptual Making it easier for homeowners and renters who are interested in electrification (building +
vehicle) to get information & be excited. Give
people positive feelings about induction and
electrification. Create checklist / resources / what
you might do / should think about for people who
are not doing major remodel or buying home, etc.
ECC 2023 Work Plan INFORMATION CALENDAR
April 11, 2023
Support renters with feasible, affordable
technologies.
Electric Mobility Conceptual Work to reduce technological, policy, access, and cost barriers to transportation electrification.
Expanded
OESD Support
– events,
resiliency hubs
Conceptual Provide additional support at public events where OESD is staffing tables or otherwise engaging
with the public. Support OESD with resiliency
centers.
Water
conservation,
recycling, and
reuse;
stormwater
management
Conceptual Explore opportunities for policies and initiatives around water conservation, recycling, and reuse;
stormwater management.
FISCAL IMPACTS OF POSSIBLE FUTURE ACTION
Future action items that ECC may send to City Council could require staff time to develop, finalize, and/or implement. ECC strives to ensure proposals provide significant net triple bottom line benefits to the City when evaluating total costs and benefits across environmental, social, and economic impacts.
CONTACT PERSON
Billi Romain, Secretary, Environment and Climate Commission, [email protected].
Communications
All communications submitted to the City Council are
public record. Communications are not published directly to the City’s website. Copies of individual communications are available for viewing at the City Clerk Department and through Records Online.
City Clerk Department
2180 Milvia Street
Berkeley, CA 94704
(510) 981-6900
Records Online
https://records.cityofberkeley.info/
To search for communications associated with a particular City Council meeting using Records Online:
1. Select Search Type = “Public – Communication Query (Keywords)”
2. From Date: Enter the date of the Council meeting
3. To Date: Enter the date of the Council meeting (this may match the From Date field)
4. Click the “Search” button
5. Communication packets matching the entered criteria will be returned
6. Click the desired file in the Results column to view the document as a PDF