Fiscal Year (FY) 2022-2023 Preliminary Budget
The total budget is similar to the prior year in scope and balance across fund types and departments.
Total citywide revenues (excluding trust) of $46.3M are offset by $43.3M in expenditures resulting in citywide budgeted $2.9M net use of fund balances. Staff anticipates targeted use of American Rescue Plan Act Funds (“ARPA”) - not reflected in the preliminary budget table presented below - pending Council discussion of potential uses. Total estimated ARPA revenues in FY 2022-23 are $3.5M.
The increased dispersion of revenues across the General, Capital, Restricted, and Enterprise fund groups indicates significant improvement in the complexity and diversity of funding sources to support related resident services; including housing, streets, capital, grants, and water infrastructure, as reflected below:
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Description
General
Fund
Restricted
Funds
Capital
Funds
Enterprise
Funds
TOTAL
CITY
FUNDS
Successor
Trust
Fund
Total Revenues 28,496 9,951 3,009 4,808 46,263 5,511
Total Expenditures (28,952) (10,407) (266) (3,695) (43,321) (1,664) Net Sources / (Uses) (456) (457) 2,742 1,112 2,942 3,847 Net Transfers (1,118) 1,118 - - - -
Change in Fund (1,574) 662 2,742 1,112 2,942 3,847
FY 22-23 Preliminary - Citywide Funds (In 000's)
General Fund Revenues
The City’s revenue forecasts are favorable as compared to the current year projected revenues. A $1.2M increase in General Fund revenues is anticipated, excluding the developer reimbursement revenues mainly due to a scheduled backfill in the amount of $2.1M for the lost property tax in lieu of vehicle license fees (VLF) revenue in FY20-21.
Preliminary General Fund revenue estimates include:
· Property Tax Funding: $0.8M estimated increase in property tax due mainly to the scheduled backfill of the lost revenues in FY20-21 in property tax in lieu of vehicle license fees for about $2.1M offset by an estimated shortfall of $2.5M as opposed to $1.2M actual shortfall FY21-22;
· Transient Occupancy Tax (TOT): $95K estimated increase in TOT comparing to the CY projection, yet the estimated annual revenue would be 65% below pre-Covid figure;
· Redevelopment Court Settlement: $0.65M estimated reduced distribution of former Agency property taxes (RPTTF) - annual variable loss through 2033; and
· Extended Time Gap in New Development Projects: due to critical infrastructure and capacity planning issues, both within and outside direct City control.
The table below reflects a preliminary General Fund revenue detail:
FY 2021-22
Projected
FY 2022-23
Preliminary Variance
Property Tax 14,935,000 15,757,421 822,421
Sales Tax 5,375,000 5,845,000 470,000
Transient Occupancy Tax 750,000 844,800 94,800
Business License Tax 1,280,000 1,348,250 68,250
Other Revenues 4,714,040 4,420,684 (293,356)
Subtotal 27,054,040 28,216,155 1,162,115
Pass-Through Development 1,695,000 280,000 (1,415,000)
Total Revenues $ 28,749,040 $ 28,496,155 $ (252,885)
General Fund Expenditures
Total General Fund expenditures of $30.1M represent department operating requests for certain strategic projects and normal operating service costs. The preliminary
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budget reflects all current staff positions with no assumptions for held or frozen positions. Given the high inflation rate exacerbating rising personnel costs, rising insurance and product costs, and inability to defer certain capital expenditures - it will be difficult to reduce the negative operating gap as in the previous year.
The preliminary expenditure budget also does not reflect: (1) previously approved encumbrances and carry-forward capital expenditures; (2) unfunded Capital Improvement Plan project requests; (3) $3.5M ARPA federal funds (pending Council direction); and (4) funding of all listed Strategic Priorities. These aspects of the City’s budget will be included during Budget Hearings later in May.
General Fund Forecast
In September 2021, Finance prepared a Five-Year preliminary projection, technical information draft of the City’s General Fund Forecast Report (Report) to provide the estimates in the fiscal condition of the General Fund for the next five years. The Department is currently engaged in a review process to vet current forecast assumptions, perform research in areas identified, and develop a user-friendly, integrated model format aimed at communicating with the general public. While preparing the Five-Year Forecast, most economic signs indicated that the City’s financial outlook would continue to have slow growth in the revenues despite the outpacing growth in the expenditures which will create a sizable budget deficit every year for the next five years (see “Change in fund balance” in the table below in red). As such, staff recommends maintaining the conservative budget approach and remaining cautious in spending decisions.
The table below displays the Five-Year Forecast completed in 2021 and updated based on the most updated trend information as of April 2022.
Mid-year Budget
2022 2023 2024 2025 2026 2027
Property Tax $ 14,935 $ 15,757 $ 15,258 $ 17,178 $ 17,283 $ 17,724 Sales Tax 5,375 5,845 6,107 6,259 6,416 6,576
Transient Occupancy Tax 750 845 1,150 1,380 1,587 1,746 Utility Users Tax 1,665 1,703 1,725 1,748 1,770 1,793
Business License Tax 1,280 1,348 1,375 1,402 1,431 1,459 Franchise Fees 1,065 1,196 1,224 1,252 1,280 1,310
Permits and Fees 397 232 358 366 375 383
Developer Reimbursements 1,695 280 2,300 2,025 - -
Charges for Current Svcs 641 531 900 921 942 964
Other Revenues 947 760 855 855 875 850
Total Revenues $ 28,750 $ 28,497 $ 31,252 $ 33,386 $ 31,959 $ 32,805 GENERAL FUND FORECAST Preliminary Draft (in thousands)
Revenues
FORECAST
Mid-year Budget
2022 2023 2024 2025 2026 2027
Salaries $ 10,432 $ 12,882 $ 13,385 $ 13,715 $ 14,050 $ 14,390 Benefits:
Insurance and Other 2,385 3,157 3,330 3,455 3,450 3,585 PERS 1,941 2,708 2,890 3,170 3,450 3,605
4,326 5,865 6,220 6,625 6,900 7,190
14,758 18,747 19,605 20,340 20,950 21,580
Professional Services 5,182 6,038 4,943 5,067 5,193 5,323 Professional Services - Pass 1,541 255 2,091 1,841 - -
Services and Supplies 2,561 2,441 3,016 3,092 3,169 3,248 Lease Payments 810 845 899 989 1,088 1,115
Capital Outlay 892 592 397 403 409 415
Insurance and Settlements 645 897 1,097 1,152 1,209 1,270 Overhead Allocation (834) (862) (862) (862) (862) (862) $ 25,555 $ 28,953 $ 31,186 $ 32,022 $ 31,156 $ 32,089
$ 3,195 $ (456) $ 66 $ 1,364 $ 803 $ 716
Subtotal Benefits
Expenditures
FORECAST
Subtotal Personnel
Total Expenditures
Operating Income (Loss)
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Other Financing Sources (Uses):
Transfers In - - - - - -
Transfers Out (2,381) (1,118) (2,452) (2,526) (2,602) (2,680) $ (2,381) $ (1,118) $ (2,452) $ (2,526) $ (2,602) $ (2,680) $ 814 $ (1,574) $ (2,387) $ (1,162) $ (1,799) $ (1,964) Other Reserve Changes (3,000) (2,200) (1,400) (950) - - SA Loan Repayment, Net Housing 1,400 2,200 1,400 950 - - July 01 Balance 25,371 24,585 23,011 20,624 19,462 17,663 June 30 Balance $ 24,585 $ 23,011 $ 20,624 $ 19,462 $ 17,663 $ 15,699 * Projected Reserve Balance does not include certain restricted and assigned balances Change in Fund Balance
Projected Reserve Fund Balance*
Net Operating Transfers
Proposed Classification Changes for FY 2022-2023
Staff proposes additions and modifications to targeted positions to address service needs for both the community and the organization - and to address Council strategic priorities related to community services, housing, and improving internal control structure due to the new ERP implementation. Proposing these positions without also restructuring or eliminating positions where service structure needs are changing is a stated risk in terms of the increase in potential future operating deficits - and staff views that a backlog of work exists to support positioning “over capacity” for a limited period while also monitoring the long-term impact of major revenue disruption in the General Fund. The potential increase in the costs would be less than 1.5% of the total personnel costs, and staff approaches this recommendation bearing the following facts:
· $3.5M in ARPA funds available through December 2024;
· General Fund accumulated reserves provides risk stability; and · The City has achieved significant amounts of salary saving in the past few years (Approximately $1.7M and estimated to $2.0M in FY20-21 and FY21-22, respectively) Many of the position costs below are based on gross estimates pending HR analysis of job descriptions and comparable salary ranges. The positions will reflect approximately $229K in on-going costs on the General Fund and increase the General Fund “baseline” deficit in FY 2022-23 from $1.6M to $1.8M, as follows:
Division Description FTE
General
Fund
Other
Funds
Estimated
Cost
Com Svc Recreation Coordinator 1.0 $ 105,000 $ - $ 105,000 Planning Planning Technician 1.0 103,600 - 103,600
2.0 208,600 - 208,600
Finance Payroll Manager1 n/a 20,000 - 20,000
n/a 20,000 - 20,000
2.0 $ 228,600 $ - $ 228,600
Sub-total addition
Sub-total change
Estimated funding request
A brief description of each need, as follows:
· Recreation Coordinator -This classification was approved in the last FY as a time limited position, but, due to continued workload efforts, staff recommends that the position be made permanent. This would not be a net addition to the number of permanent employees.
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· Payroll Manager - This is a replacement of the current Management Analyst II position and a restructuring effort to improve internal control environment between HR and Finance due to the changes caused by the new ERP implementation.
Addresses Council Strategic Priorities (ERP Implementation). This would not be a net addition to the number of permanent employees. · Planning Technician - To support the processing of new development applications, new business licenses, address assignments, sign applications, temporary use permits, and other day-to-day processes under the Planning Division. Position will help provide customer service and counter coverage to customers who need assistance with planning projects and procedures, as well as coordination with other divisions and departments for planning related issues. Need: Mid-year. Addresses recent increase of development applications implementing recent new state laws: SB35 (Streamlining), SB9 (Densification) and accessory dwelling unit projects.
Additional Budget Considerations for FY 2022-2023
As the City’s FY 2022-2023 budget process continues, staff will also be formulating recommendations for improvements and investments in the following areas:
1. Staff Recruitment, Retention, and Overall Morale/Health of the City’s Workforce
2. Re-opening Strategy and Recovery from the COVID-19 Pandemic
3. Further Analysis and Planning Regarding the City’s Long-Term Fiscal Health Including Strategies to Fund Infrastructure More Comprehensively Additionally, ARPA fund revenue in the amount of $3.5M is not included in the preliminary budget as further direction from the City Council on how to appropriate these funds is required. Staff will present a recommendation in the future budget hearings.
Next Steps
The City’s Code requires that the Council “…hold public hearings on the annual budget, as submitted, at which all interested persons shall be given an opportunity to be heard, for or against, the revenues estimated or any proposed appropriation therein.” Council approved the 2022-23 Budget Calendar with the following budget hearing dates:
· May 19, 2022 - Budget Study Session #1: Introduction & Overview of Proposed Budget; Measure P Budget Schedule, Measure HH
· May 26, 2022 - Budget Study Session #2: Continuation of Proposed Budget Discussions
· June 7, 2022 - Budget Hearing & Adoption of FY2022-23 Budget and GANN Limit Attachments
1. FY 2022-23 Preliminary Budget Summary
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Attachments
1. Attachment#1 FY2022-23 Preliminary Budget Summary
9.4 Packet Pg. 542
Revenues Expenditures In Out
10 General Fund $ 28,216,155 $ ‐ (26,246,593) $ ‐ $ $ (3,569,393) $ (1,599,831) 11 IT Replacement Fund $ ‐ $ ‐ (1,193,861) $ $ ‐ 1,193,861 $ ‐ $ 12 Equipment & Vehicles $ ‐ $ ‐ (285,000) $ $ ‐ 285,000 $ ‐ $ 13 Self Insurance $ ‐ $ ‐ (972,168) $ $ ‐ 972,168 $ ‐ $ 16 Community Benefit Fund $ ‐ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ 17 Com Dev Pass Thru 280,000 $ $ ‐ (254,545) $ ‐ $ ‐ $ $ 25,455 $ ‐ ‐ $ ‐ $ $ (2,451,029) $ ‐ 2,451,029 $ $ 28,496,155 $ ‐ (28,952,167) $ ‐ $ $ (1,118,364) $ (1,574,376) 211 USEPA $ ‐ $ ‐ (9,714) $ ‐ $ ‐ $ $ (9,714) 213 Police Grants 162,000 $ $ ‐ (191,417) $ ‐ $ ‐ $ $ (29,417) 215 Misc Federal and State Grants 1,057,000 $ ‐ $ ‐ $ ‐ $ ‐ $ $ 1,057,000 230 Local Grants 153,000 $ ‐ $ ‐ $ ‐ $ ‐ $ $ 153,000 231 CYSFF TOT $ 111,600 $ ‐ (90,280) $ ‐ $ ‐ $ $ 21,320 232 Measure C 1,000 $ $ ‐ (207,300) $ ‐ $ ‐ $ $ (206,300) Community Programs $ 1,484,600 $ ‐ (498,711) $ ‐ $ ‐ $ $ 985,889 201 State Gas Tax 1,541,000 $ $ (772,205) $ (550,000) $ ‐ 64,500 $ $ 283,295 202 Measure A 636,000 $ $ (3,210) $ ‐ (500,000) $ $ 132,790 203 NPDES 247,500 $ $ ‐ (551,368) $ $ ‐ 303,868 $ ‐ $ 206 Park In Lieu $ ‐ ‐ $ ‐ $ ‐ $ ‐ $ 221 Lighting District 678,933 $ $ ‐ (167,364) $ ‐ $ $ 511,569 222 Drainage District 144,002 $ $ ‐ (431,274) $ $ ‐ 287,272 $ ‐ $ 234 County Measure W 304,000 $ $ (1,500) $ ‐ (200,000) $ ‐ $ $ 102,500 290 ARPA‐ American Rescue Plan $ ‐ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ Infrastructure Programs $ 3,551,435 $ (1,926,921) $ (1,250,000) $ ‐ 655,640 $ $ 1,030,154 204 Rent Stabilization 544,860 $ $ ‐ (657,859) $ ‐ $ ‐ $ $ (112,999) 207 Housing In Lieu 42,000 $ $ ‐ (4,030,160) $ ‐ $ ‐ $ $ (3,988,160) 209 Housing Assistance Program 4,500 $ $ ‐ (6,250) $ ‐ $ ‐ $ $ (1,750) 216 Commercial IF 2,475,280 $ ‐ $ ‐ $ ‐ $ ‐ $ $ 2,475,280 217 Residential IF $ ‐ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ 218 Affordable Housing TOT 125,600 $ $ ‐ (27,280) $ ‐ $ ‐ $ $ 98,320 219 Measure HH 1,702,280 $ $ ‐ (619,063) $ ‐ $ ‐ $ $ 1,083,217 220 Lo‐Mod Housing Successor 20,000 $ $ ‐ (1,222,627) $ $ ‐ 462,724 $ $ (739,903) 233 Silicon Valley Community ‐ $ $ ‐ (168,442) $ ‐ $ ‐ $ $ (168,442) Affordable Housing Programs $ 4,914,520 $ ‐ (6,731,681) $ $ ‐ 462,724 $ $ (1,354,437) Total Special Revenue Funds 9,950,555 $ $ (9,157,313) $ (1,250,000) $ ‐ 1,118,364 $ $ 661,606 301 Capital Improvement Fund 458,000 $ $ (110,849) $ ‐ (155,407) $ ‐ $ $ 191,744 303 Capital Grant $ ‐ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ 305 Parks & Trails 233,000 $ ‐ $ ‐ $ ‐ $ ‐ $ $ 233,000 306 Public Facilities 405,000 $ ‐ $ ‐ $ ‐ $ ‐ $ $ 405,000 307 Transportation 1,756,572 $ ‐ $ ‐ $ ‐ $ ‐ $ $ 1,756,572 308 RBD‐I Storm D 3,850 $ ‐ $ ‐ $ ‐ $ ‐ $ $ 3,850 309 RBD‐O Storm D 152,150 $ ‐ $ ‐ $ ‐ $ ‐ $ $ 152,150 Capital Funds 3,008,572 $ $ (110,849) $ ‐ (155,407) $ ‐ $ $ 2,742,316 510 Water Service Fund 482,500 $ $ ‐ (271,732) $ ‐ $ ‐ $ $ 210,768 511 Water Capital Fund 533,000 $ $ (100,000) $ ‐ (220,000) $ ‐ $ $ 213,000 512 Water Meter Fund 289,000 $ ‐ $ ‐ $ ‐ $ ‐ $ $ 289,000 513 Water Capacity Fee Fund 490,000 $ ‐ $ ‐ $ ‐ $ ‐ $ $ 490,000 FY 2022‐23 Preliminary Budget Summary
Fund Description
Operating Capital
Improvement Plan
Operating Transfers
Net Change
Fund Balance
ELIMINATING ENTRY
General Fund
9.4.a
Packet Pg. 543 Attachment: Attachment#1 FY2022-23 Preliminary Budget Summary (2204 : FY22-23 Preliminary Budget and Budget Message) Revenues Expenditures In Out
FY 2022‐23 Preliminary Budget Summary
Fund Description
Operating Capital
Improvement Plan
Operating Transfers
Net Change
Fund Balance
Revenues Expenditures In Out
Water Enterprise 1,794,500 $ $ (371,732) $ ‐ (220,000) $ ‐ $ $ 1,202,768 520 Garbage Service Fund 3,013,000 $ $ ‐ (3,103,737) $ ‐ $ ‐ $ $ (90,737) Total Enterprise 4,807,500 $ $ (3,475,469) $ ‐ (220,000) $ ‐ $ $ 1,112,031 $ 46,262,782 $ (41,695,798) $ (1,625,407) $ 1,118,364 $ (1,118,364) $ 2,941,577 Revenues Expenditures In Out
705 Successor Operating 3,959,000 $ $ ‐ (114,105) $ ‐ $ ‐ $ $ 3,844,895 706 Successor Debt Service 1,552,425 $ $ ‐ (1,550,310) $ ‐ $ ‐ $ $ 2,115 Successor Agency 5,511,425 $ $ ‐ (1,664,415) $ ‐ $ ‐ $ $ 3,847,010 Operating Transfers Net Change
Fund Balance Fund Description
Operating Capital
Improvement Plan
FY 2022‐23 Preliminary Budget Summary
Fund Description
Operating Capital
Improvement Plan
Operating Transfers
Net Change
Fund Balance
9.4.a
Packet Pg. 544 Attachment: Attachment#1 FY2022-23 Preliminary Budget Summary (2204 : FY22-23 Preliminary Budget and Budget Message)
EAST PALO ALTO
CITY COUNCIL
STAFF REPORT
DATE: April 19, 2022
TO: Honorable Mayor and Members of the City Council
VIA: Jaime M. Fontes, City Manager
BY: James Colin, Executive Assistant
James Colin, Executive Assistant
SUBJECT: COVID-19 Vaccination Program Regular Update
Recommendation
Discuss the COVID-19 vaccination program update and provide direction to staff.
Alignment with City Council Strategic Plan
This recommendation is primarily aligned with:
Ø Priority #5: Improve Communication and Enhance Community Engagement Ø Priority #6: Create a Healthy and Safe Community
Background
On a weekly basis the Mayor and Vice Mayor meet with key staff to discuss and coordinate City of East Palo Alto COVID-19 Vaccination Program efforts and progress.
The purpose of this report is to present the information regarding the abovementioned program and efforts in an open forum engaging all members of the Council and the public.
Analysis
See Attachment 1.
The attachments included in this report routinely cover the items typically discussed at the COVID-19 vaccination briefing with the Mayor and Vice Mayor as well as key staff.
The format is discussed as follows:
1. Review of previous week vaccination efforts. This item identifies each event by the date
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at which it occurred, the time, the location provider, the address, and the vaccination numbers (sometimes by vaccination type and 1st or 2nd dose).
2. Review of upcoming vaccination events for the week. This follows the same content format as number 1 but concentrates on the efforts to make the upcoming event organized and successful.
3. Outreach efforts (not always discussed). This item typically involved a review of outreach efforts as discussed in item 2 but in more detail and/or a change in strategy as circumstances may change.
4. Future Efforts
5. Incentives (Previously considered).
Public Notice
The public was provided notice of this agenda item by posting the City Council agenda on the City’s official bulletin outside City Hall and making the agenda and report available at the City’s website and the San Mateo County Library at 2145 University Avenue, East Palo Alto.
Fiscal Impact
N/A as this is an informational report.
Environmental
The action being considered by the City Council is exempt from the California Environmental Quality Act (CEQA) because it is not a “project” pursuant to 15378(b)(4) because it is a fiscal activity which does not involve any commitment to any specific project which may result in a potentially significant impact on the environment.
Attachments
1. Draft Vaccination Meeting Agenda 4-19-2022
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Vaccination Meeting Agenda
Tuesday, April 19, 2022
1. Review of previous week vaccination efforts:
Ravenswood Family Health Clinic
2. Review of Upcoming vaccination event for week
Day Partners Pop.
Age Time Location Address
Tuesday County of San
Mateo/Lookout Health 5+ 3:00 am – 7:00 pm
Lewis & Joan Platt
East Palo Alto Family
YMCA
2180 Euclid Ave.
Thursday County of San Mateo 12+ 6:00 am – 9:00 pm
Lewis & Joan Platt
East Palo Alto Family
YMCA
2180 Euclid Ave.
Saturday Ravenswood Family
Health Clinic 5+ 9:00 am – 11:00 am Ravenswood Family Health Clinic 1885 Bay Rd.
Saturday County of San Mateo/
Stanford 5+ 11:00 am – 6:00 pm Woodland Park Apartments 2021 Euclid Ave.
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Packet Pg. 547 Attachment: Draft Vaccination Meeting Agenda 4-19-2022 (2216 : COVID-19 Vaccination Program Regular Update)
3. Review of Testing Sites
*The Ravenswood City School District and the Sequoia Union High School District each have additional COVID testing capabilities for students of the districts. Any student or caregiver may contact either District’s main office to learn about how to secure a rapid test for the student.
Date Time Location Address
Tuesday - Thursday 11:00am –
4:00pm Ravenswood Shopping Center 1781 E Bayshore Rd, Palo Alto, CA 94303
Tuesday 3:00pm –
7:00pm
Lewis And Joan Platt East Palo
Alto Family YMCA 2180 Euclid Ave, East Palo Alto, CA
Thursday 6:00pm –
9:00pm
Lewis And Joan Platt East Palo
Alto Family YMCA 2180 Euclid Ave, East Palo Alto, CA
Monday - Friday
12:00pm7:00pm
(weekends
10am-4pm)
(Stanford) North Fair Oaks -
Drive Through 2685 Bay Road, Redwood City, CA
Thursday Only 8:00am8:00pmNorth Fair Oaks Library 2500 Middlefield Rd, Redwood City
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Packet Pg. 548 Attachment: Draft Vaccination Meeting Agenda 4-19-2022 (2216 : COVID-19 Vaccination Program Regular Update)