Wednesday, April 20, 2022
5:00 PM
CITY OF HAYWARD
Hayward City Hall
777 B Street
Hayward, CA 94541
www.Hayward-CA.gov
Remote Participation
Council Budget and Finance Committee
Agenda
April 20, 2022Council Budget and Finance
Committee
Agenda
COVID-19 Notice: Consistent with Assembly Bill 361/Gov Code 54953(e), the Council Budget and Finance Committee meeting includes teleconference participation by all Council Budget and Finance Committee members and the public.
How to observe the Meeting:
1. YouTube Live stream: https://www.youtube.com/user/cityofhayward How to submit written Public Comment:
Send an email to [email protected] by 2:00 p.m. the day of the meeting. Please identify the Agenda Item Number in the subject line of your email. Emails will be compiled into one file, distributed to the Council Budget and Finance Committee and City staff, and published on the City's Meeting & Agenda Center under Documents Received After Published Agenda. https://hayward.legistar.com/Calendar.aspx When submitting written comments, indicate in the email if you want your comment read into the record.
Requests will be allowed provided the reading will not exceed three (3) minutes consistent with the time limit for speakers at Council Committee meetings. Email comments will become part of the record of Council Committee meetings.The Chair can limit the time for reading written comments.
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Password: Budget@420
Or Telephone:
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Meeting ID: 869 2869 1647
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CALL TO ORDER
ROLL CALL
PUBLIC COMMENTS:
Limited Only to Items on the Agenda and Submitted in Writing Prior to the Meeting.
APPROVAL OF MINUTES
April 20, 2022Council Budget and Finance
Committee
Agenda
Review and Approve the Council Budget and Finance
Committee March 16, 2022, Meeting Minutes
MIN 22-0481
Attachments: Attachment I Minutes
REPORTS/ACTION ITEMS
2 Public Bank East Bay Viability Study (Presentation by Public Bank East Bay)
City Tax Generating Revenue Review and DiscussionRPT 22-0383 Attachments: Attachment I Staff Report
FY 2023 Proposed Budget and Saturday Budget Work SessionACT 22-0404 Attachments: Attachment I Staff Report
Attachment II Working Agenda and Schedule
FUTURE AGENDA ITEMS
Review and Approve the FY 2022 Agenda Planning CalendarACT 22-0395 Attachments: Attachment I Agenda Planning Calendar
COMMITTEE MEMBER/STAFF ANNOUNCEMENTS
ADJOURNMENT
Next Meeting - 5:00 p.m. Wednesday, May 18, 2022
The City of Hayward's Open Data Portal was designed to allow the public to explore, visualize, and download publicly accessible data. The Open Data Portal allows a clear view of the City's financial performance. Access to the portal may be found at https://haywardca.opengov.com/
CITY OF HAYWARD
Hayward City Hall
777 B Street
Hayward, CA 94541
www.Hayward-CA.gov
File #: MIN 22-048
DATE: April 20, 2022
TO: Council Budget and Finance Committee
FROM: Director of Finance
SUBJECT
Review and Approve the Council Budget and Finance Committee March 16, 2022, Meeting Minutes
RECOMMENDATION
That the Council Budget and Finance Committee (CBFC) reviews and approves the March 16, 2022 CBFC meeting minutes.
SUMMARY
The CBFC held a meeting on March 16, 2022, and the draft minutes are attached for the CBFC’s review and approval.
ATTACHMENTS
Attachment I 03/16/22 CBFC Meeting Minutes
CITY OF HAYWARD Printed on 4/15/2022Page 1 of 1
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ATTACHMENT I
COUNCIL BUDGET & FINANCE COMMITTEE MEETING
Meeting Minutes of March 16, 2022
Call to Order: 5:00 p.m.
Members Present: Mayor Barbara Halliday, Councilmember Aisha Wahab, Councilmember Sara Lamnin
Members Absent: None
Staff: Kelly McAdoo, Regina Youngblood, Dustin Claussen, Nicholas Mullins, Rick Rivera, Mary Thomas
Guests: Craig Hill, NHA Advisors
Mike Meyers, NHA Advisors
Public Comments: None
1. Approval of Meeting Minutes from February 16, 2022
Action: Motion was made by Mayor Halliday to approve the minutes of February 16, 2022, Council and Budget Finance Committee meeting. Motion was seconded by Councilmember Lamnin and passed with unanimous approval.
2. CalPERS Pension Unfunded Accrued Liability (UAL) Update and Introduction to Restructuring Concepts
Director Claussen introduced Craig Hill and Mike Meyers of NHA Advisors who provided an update to the CalPERS Pension Unfunded Accrued Liability (UAL) and restructuring concepts
Action: The Committee received the presentation and provided feedback. The Committee asked to continue the Public Obligation Bond (POB) analysis and continued education for the Committee and City Council.
3. Fiscal Year 2023 Mayor & City Council Departmental Budget Discussion
Mary Thomas presented the Fiscal Year 2023 Mayor & City Council Department budget and accomplishments.
Action: The Committee received the presentation and provided feedback. Staff will incorporate suggested feedback.
4. Fiscal Year 2023 Budget Process Update
Director Claussen provided a brief oral update regarding the Fiscal Year 2023 Budget Process.
Action: None
5. Review and Approve the FY 2022 Agenda Planning Calendar
The Committee reviewed the FY 2022 Agenda
Action: Councilmember Wahab requested an update on Public Banking and Mayor Halliday requested an informational report on current Hayward taxes and their sunset dates to be provided during the April Council Budget & Finance Committee meeting.
Committee Members/Staff Announcements:
None
Adjournment: The meeting was adjourned at 6:31 p.m.
CITY OF HAYWARD
Hayward City Hall
777 B Street
Hayward, CA 94541
www.Hayward-CA.gov
File #: RPT 22-038
DATE: April 20, 2022
TO: Council Budget and Finance Committee
FROM: Director of Finance
SUBJECT
City Tax Generating Revenue Review and Discussion
RECOMMENDATION
That the Committee receives this report on City tax revenues and provide direction to staff on consideration of potential future tax measures to explore for viability.
SUMMARY
This report provides an overview of the City’s tax generating revenues and final community satisfaction survey results associated with support of establishing a parcel tax and provides an opportunity for further discussion regarding the consideration of future tax measures.
ATTACHMENTS
Attachment I Staff Report
CITY OF HAYWARD Printed on 4/15/2022Page 1 of 1
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DATE: April 20, 2022
TO: Council Budget and Finance Committee
FROM: Director of Finance
SUBJECT: City Tax Generating Revenue Review and Discussion
RECOMMENDATION
That the Committee receives this report on City tax revenues and provide direction to staff on consideration of potential future tax measures to explore for viability.
SUMMARY
This report provides an overview of the City’s tax generating revenues and final community satisfaction survey results associated with support of establishing a parcel tax and provides an opportunity for further discussion regarding the consideration of future tax measures.
BACKGROUND AND DISCUSSION
In October 2021, the Committee expressed a desire to continue discussions around a potential ballot measure to establish an annual parcel tax to support City services, including homelessness response. At the time, the City had received preliminary polling results from the Resident Satisfaction Survey, which indicated potential support for a ballot measure to establish an annual parcel tax. The Committee requested that staff return to the Committee in Spring 2022 to discuss the final results of the survey, and consideration of placing a tax measure on the 2024 ballot.
This report provides an overview of the City’s tax generating revenues as well as the final results of the Resident Satisfaction Survey associated with community support to establish a parcel tax. The intent of this report is to solicit feedback and engage the Committee in a discussion regarding the consideration of future tax measures.
Tax Generating Revenue:
The City of Hayward has several key tax generating revenue sources, including County, State, and Local taxes. These revenue streams make up a significant portion of the City’s annual revenue. The various general use taxes include Property Tax, Sales Tax, Utility User Tax (UUT), Real Property Transfer Tax (RPTT), Transit Occupancy Tax (TOT), Cannabis
Tax, and Measure C Sales Tax. This report provides a brief overview of each tax generating revenue, including a summarized description of each tax, voter-approved ballot measures, sunset dates, and impacts on the overall revenues received by the City.
Property Tax is collected by Alameda County and remitted to the City through the fiscal year. Under the State constitution, Real Property Taxes (Property Tax) are applied to all taxable real and personal property and set at 1 percent of the assessed value. Factors that affect revenue generation from property tax include changes in assessed value and economic growth in the Bay Area.
Sales and Use Tax is the second largest source of General Fund revenue. Sales tax is an excise tax imposed on retailers for the privilege of selling or leasing tangible personal property. The Use Tax is an excise tax imposed for the storage, use, or other consumption of tangible personal property purchased from any retailer. The proceeds of sales and use taxes imposed within the boundaries of Hayward are collected and distributed by the State to various agencies, with the City of Hayward receiving the equivalent of 1 percent of the amount collected. While Alameda County has the highest sales tax rate in the State at 10.25 percent, the second highest sales tax rate is Los Angeles County, which is 0.75 percent lower than Alameda County.
Sales Tax – Measure C is a local half-cent sales tax. In June 2014, the voters of the City of Hayward passed Measure C, which increased the City’s Transaction and Use Tax (Sales Tax) by half a percent for twenty years. When the measure was placed on the ballot in 2014, the Council adopted an accompanying advisory resolution specifying how the Measure C tax proceeds would be utilized to demonstrate commitment to key community priorities. These items included: debt service for the new library and community learning center, fire station remodels, and the new fire training center; additional staffing in Police and Maintenance; and significant street paving efforts.
Utility Users Tax (UUT) is the third largest source of General Fund revenue. Measure D was a voter approved measure (originally approved in 2009 and renewed in 2016 for 20 years) that imposed a 5.5 percent UUT on electric, gas, cable services, and telecommunication services. This tax is not applicable to State, County, or City agencies, or to insurance companies and banks. Factors that impact this revenue source include consumption/use, regulatory actions, PUC rate changes, market indicators, evolution of technology and state and/or federal legislative action.
Real Property Transfer Tax (RPTT) is a tax that is associated with the sale of real property. In November 2018, Hayward voters passed Measure T, which increased the City’s RPTT from $4.50 to $8.50 per $1,000 valuation of the value of consideration paid for the documented sale of real property or any transfer of interest in real property. This tax is collected and recorded by Alameda County, and remitted to the City throughout the fiscal year. RPTT is tied directly to all real property sales, which makes this revenue source more volatile and difficult to predict trending year over year.
Transit Occupancy Tax (TOT) is a general tax, often referred to as a hotel tax where each transient is subject to pay a tax percentage of the rent charged by the hotel operator. In November 2020, Hayward voters passed Measure NN, which increase the TOT rate from
8.5 percent to up to 14% of the rent charged by the hotel operator. The Council has not approved an increase to the TOT yet under this new authority as the hotel industry continues to recover from COVID.
Cannabis Tax is a general tax on the sale of adult use of recreational and medical cannabis.
In November 2016, Hayward voters passed Measure EE, which authorized the City to enact an ordinance imposing a cannabis tax not to exceed 15%. The tax imposed applies to the cultivation, distribution, manufacturing, business-to-business, as well as retail sales.
Currently, the City Council has authorized a tax of 7% on cannabis businesses in Hayward.
Over the years, the City has taken various tax ballot measures to its Hayward-voters, and has received support for tax measures that provide community support and programmatic services to the Hayward community. Table 1 provides an overview of City taxes that have been passed by Hayward voters, with two of the top City revenue sources (UUT and Measure C) having defined sunset dates.
Table 1: Voter Approved Tax Ballot Measures
City Tax
Voter-Approved Ballot
Measures Sunset Date
Sales Tax (1/2 Cent) Measure C December 2034
Utility User Tax (UUT) Measure D June 2039
Real Property Transfer Tax (RPTT) Measure T N/A
Cannabis Tax Measure EE N/A
Transient Occupancy Tax (TOT) Measure NN N/A
Table 2 below provides a summary of each tax generating revenue over the last three fiscal years.
Table 2: Three-Year Actuals of Tax Generating Revenue (All Funds) Tax Revenues
FY 2019
Actuals
FY 2020
Actuals
FY 2021
Actuals
Property Tax $54,467,978 $58,431,803 $61,196,409
Sales & Use Tax (General Fund) $36,010,642 $39,679,957 $40,074,819 Sales & Use Tax (Measure C) $16,906,773 $16,886,500 $18,577,214 Utility Users Tax (UUT) $16,935,327 $16,065,943 $17,267,592 Real Property Transfer Tax (RPTT) $12,256,155 $12,150,286 $17,120,032 Transient Occupancy Tax (TOT) $2,822,564 $2,186,927 $1,552,148 Cannabis Tax $0 $2,985 $441,877
Community Polling of Parcel Tax Ballot Measure:
In Fall 2021, the City conducted the Resident Satisfaction Survey, which included polling questions surrounding the potential support of a tax measure that would establish a parcel tax. The survey was conducted in October 2021 by FM3 Research. The results of the
survey1 indicated that the majority of Hayward-voters support a parcel tax to fund homelessness and mental health response projects, programs, and services. The survey indicated that 59 percent support a $79 per year parcel tax, with 55 percent supporting a $109 per year parcel tax.
FISCAL IMPACT
There is no fiscal impact associated with this information report.
NEXT STEPS
With direction from the Committee, staff will work to advance efforts and facilitate a discussion to the full Council on viable potential tax measures for future ballots.
Prepared by: Nicole Gonzales, Deputy Director of Finance
Recommended by: Dustin Claussen, Director of Finance
Approved by:
__________________________________
Kelly McAdoo, City Manager
1 2021-Resident-Satisfaction-Survey-Results.pdf (hayward-ca.gov)
CITY OF HAYWARD
Hayward City Hall
777 B Street
Hayward, CA 94541
www.Hayward-CA.gov
File #: ACT 22-040
DATE: April 20, 2022
TO: Council Budget and Finance Committee
FROM: Director of Finance
SUBJECT
FY 2023 Proposed Budget and Saturday Budget Work Session
RECOMMENDATION
That the Committee receives an update on the FY 2023 Budget process and reviews the “working agenda and schedule” for the City Council budget work session scheduled on Saturday, May 14, 2022.
SUMMARY
This report provides a brief update to the Committee on the FY 2023 Budget process and provides an overview of the proposed “work agenda and schedule” that will define the structure of the City Council budget work session scheduled on Saturday, May 14, 2022.
ATTACHMENTS
Attachment I Staff Report
Attachment II Working Agenda and Schedule
CITY OF HAYWARD Printed on 4/15/2022Page 1 of 1
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DATE: April 20, 2022
TO: Council Budget and Finance Committee
FROM: Director of Finance
SUBJECT: FY 2023 Proposed Budget and Saturday Budget Work Session
RECOMMENDATION
That the Committee receives an update on the FY 2023 Budget process and reviews the “working agenda and schedule” for the City Council budget work session scheduled on Saturday, May 14, 2022.
SUMMARY
This report provides a brief update to the Committee on the FY 2023 Budget process and provides an overview of the proposed “work agenda and schedule” that will define the structure of the City Council budget work session scheduled on Saturday, May 14, 2022.
BACKGROUND AND DISCUSSION
On March 16, 2022, the Committee received a detailed update on the FY 2023 Budget process.
Staff presented a visualization of the annual budget process, as shown in Graph 1.
Graph 1: FY 2023 Annual Budget Timeline
January
Budget Kick-
Off
February
Operating
Budget
Requests Due
March Budget
Review Meetings
with City Manager
and CIP Screening
Committee
April
Proposed
Operating
Budget
Presented to
City Council
and
published on
City website
May 14
Saturday
Budget Work
Session
May 17 CIP
Budget Work
Session
June 7 or 14
Public Hearing &
Adoption of both
Operating and CIP
Budgets
At this point in the process, the City Manager has reviewed all department budget requests.
City Manager recommendations have been finalized and incorporated into the Proposed FY 2023 Operating Budget. Staff is currently compiling the Proposed FY 2023 Operating Budget book. The Proposed FY 2023 Operating Budget will be provided to the full Council and published on the City’s website by the end of April.
On May 14, 2022, the City Council Budget Work Session will be held to review the Proposed FY 2023 Operating Budget. Attachment II is the “working agenda and schedule” for the City Council Budget Work Session. During the Saturday work session, Council will: (1) review the City’s Five-Year Plan, and (2) receive and discuss the department budgets, where the Council will have an opportunity to ask questions as well as discuss and provide feedback to each department. A separate CIP Budget Work Session is scheduled for May 17, 2022.
Upon completion of all budget work sessions, the Proposed FY 2023 Operating and CIP Budgets are scheduled for a Public Hearing and Adoption on June 7, 2022. Should the Public Hearing result in necessary changes to the Proposed FY 2023 Operating and CIP Budgets, the item will be continued to June 14, 2022, for final adoption.
ECONOMIC IMPACT
There is no economic impact associated with this report as it is informational only.
STRATEGIC ROADMAP
This agenda item is a routine operational item and is not specifically relate to a project currently identified in the Strategic Roadmap.
FISCAL IMPACT
There is no fiscal impact associated with this report as it is informational only.
PUBLIC CONTACT
The agenda for this item was posted in compliance with the California Brown Act.
NEXT STEPS
The Proposed FY 2023 Operating Budget will be presented to Council and published on the City’s website by the end of April. A Saturday budget work session will be held on May 14, 2022, followed by a Public Hearing and Adoption of the FY 2023 Operating and CIP Budgets on June 7 or 14, 2022.
Prepared by: Nicole Gonzales, Deputy Director of Finance
Recommended by: Dustin Claussen, Director of Finance
Approved by:
_________________________________
Kelly McAdoo, City Manager
ATTACHMENT II
AGENDA (TENTATIVE)
TIME TOPIC LEAD
9:00 – 9:15 A.M. WELCOME & INTRODUCTIONS KELLY MCADOO
9:15 – 9:45 A.M. FY 2022 PROPOSED BUDGET OVERVIEW KELLY MCADOO 9:45 – 10:05 A.M. MAINTENANCE SERVICES (5/15) TODD RULLMAN 10:05 – 10:25 A.M. DEVELOPMENT SERVICES (5/15) JENNIFER OTT 10:25 – 10:35 A.M. BREAK
10:35 – 10:55 A.M. CITY CLERK’S OFFICE (5/15) MIRIAM LENS 10:55 – 11:25 A.M. POLICE (10/20) TONEY CHAPLIN
11:25 – 11:45 P.M. CITY MANAGER’S OFFICE (5/15) KELLY MCADOO 11:45 – 12:05 P.M. INFORMATION TECHNOLOGY (5/15) ADAM KOSTRZAK 12:05 – 1:00 P.M. LUNCH BREAK
1:00 – 1:20 P.M. FIRE (5/15) CHIEF CONTRERAS
1:20 – 1:35 P.M. HUMAN RESOURCES (5/10) JANA SANGY
1:35 – 1:45 P.M. FINANCE (5/5) DUSTIN CLAUSSEN
1:45 – 2:00 P.M. LIBRARY (5/10) JAYANTI ADDLEMAN
2:00 – 2:15 P.M. BREAK
2:15 – 2:30 P.M. CITY ATTORNEY’S OFFICE (5/10) MICHAEL LAWSON 2:30 – 3:00 P.M. PUBLIC WORKS (10/20) ALEX AMERI
3:00 – 3:15P.M.
3:15 – 4:00 P.M.
MAYOR AND CITY COUNCIL (5/10)
CLOSING REMARKS/NEXT STEPS
KELLY MCADOO
KELLY MCADOO
VERSION 04/12/22
MAY 14, 2022
9:00 A.M. – 4:00 P.M.
CITY OF HAYWARD
Hayward City Hall
777 B Street
Hayward, CA 94541
www.Hayward-CA.gov
File #: ACT 22-039
DATE: April 20, 2022
TO: Council Budget and Finance Committee
FROM: Director of Finance
SUBJECT: Review and Approve the FY 2022 Agenda Planning Calendar
RECOMMENDATION
That the Council Budget and Finance Committee reviews and approves the 2022 Agenda Planning Calendar.
SUMMARY
The FY 2022 Agenda Planning Calendar suggests agenda topics for the year for the Committee’s consideration.
ATTACHMENTS
Attachment I FY 2022 Agenda Planning Calendar
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ATTACHMENT I
COUNCIL BUDGET AND FINANCE COMMITTEE
FY 2022 Agenda Planning Calendar
April 20, 2022
Meeting Location: Remote Participation
Meeting Time: 5:00 p.m.
Meeting Dates: The Council Budget & Finance Committee generally meet monthly on the 3rd Wednesday of the month, except for August, due to City Council Break. Special meetings will be scheduled as determined necessary by the Committee or the City Manager.
DATE SUGGESTED TOPICS (subject to change)
April 20, 2022
Public Banking Viability Study
FY 2023 Proposed Budget Discussion
City Tax Discussion
May 18, 2022
Annual Review of City Issued Debt
Measure C Debt Analysis/Review
Annual City Benefit Liabilities and Funding Plan Review June 15, 2022 FY 2023 Budget Process Debrief (Oral Presentation) July 20, 2022 To be Announced
August 17, 2022 Meeting Canceled - Council Recess
Non-scheduled future agenda topics:
- Fleet Utilization Study
- Hayward Community Foundation Update