Wednesday, September 21, 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
September 21, 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.
CALL TO ORDER
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.
Please click the link below to join the webinar:
https://hayward.zoom.us/j/83287960339?pwd=OXJjUy8reXBPaWdpWjlIeW5LNy90UT09 Meeting ID: 832 8796 0339
Password: Budget@921
Or join by phone:
US: +1 669 900 6833 or +1 646 931 3860
Webinar ID: 832 8796 0339
Password: 6121139975
A Guide to attend virtual meetings is provided at this link: https://bit.ly/3jmaUxa
ROLL CALL
PUBLIC COMMENTS:
Limited Only to Items on the Agenda and Submitted in Writing Prior to the Meeting.
APPROVAL OF MINUTES
Review and Approve of the Council Budget and Finance
Committee June 15, 2022, Meeting Minutes
MIN 22-105
Attachments: Attachment I Minutes
September 21, 2022Council Budget and Finance
Committee
Agenda
REPORTS/ACTION ITEMS
Public Bank East Bay UpdateACT 22-087
Attachments: Attachment I Staff Report
Attachment II Public Banking Draft Resolution and Letter of Support
Attachment III City Edits on Public Banking Draft Resolution and Letter of Support
CalPERS UpdateACT 22-083
Attachments: Attachment I Staff Report
FUTURE AGENDA ITEMS
Review and Approve the FY 2023 Agenda Planning CalendarACT 22-082 Attachments: Attachment I Agenda Planning Calendar
COMMITTEE MEMBER/STAFF ANNOUNCEMENTS
ADJOURNMENT
Next Meeting - 5:00 p.m., Wednesday, October 19, 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 22-105
DATE: September 21, 2022
TO: Council Budget and Finance Committee
FROM: Director of Finance
SUBJECT
Review and Approve of the Council Budget and Finance Committee June 15, 2022, Meeting Minutes
RECOMMENDATION
That the Council Budget and Finance Committee (CBFC) reviews and approves the June 15, 2022 Committee meeting minutes.
SUMMARY
The CBFC held a meeting on June 15, 2022 and the draft minutes are attached for the CBFC’s review and approval.
ATTACHMENTS
Attachment I 06/15/22 CBFC Meeting Minutes
CITY OF HAYWARD Printed on 9/16/2022Page 1 of 1
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ATTACHMENT I
COUNCIL BUDGET & FINANCE COMMITTEE MEETING
Meeting Minutes of June 15, 2022
Call to Order: 5:01 p.m.
Members Present: Mayor Barbara Halliday, Councilmember Sara Lamnin, Councilmember Aisha Wahab
Members Absent: None
Staff: Kelly McAdoo, Regina Youngblood, Dustin Claussen, Michael Lawson, Nicole Gonzales, Katie Rivera, Rick Rivera, Nicholas Mullins, Crissy Mello, Nick Tabari
Guests: None
Public Comments: No public comments.
1. Approval of Meeting Minutes from May 18, 2022
Action: Unanimous approval as submitted.
2. City’s Insurance Program and Coverage
City Attorney Lawson provided an overview of the City’s current insurance programs and premiums.
Action: The Committee received the presentation and provided feedback. The City Attorney was instructed to examine potential earthquake insurance coverage.
3. Measure C Debt Analysis and Review
Director Claussen provided a report regarding the current status of the Measure C fund, including revenues, expenditures, and outstanding debt service.
Action: The Committee received the presentation and provided feedback.
4. FY 2023 Budget Process Debrief (Oral Presentation)
Director Claussen presented the Committee with a summary of the FY 2023 Budget Process.
Action: The Committee received the presentation and provided feedback.
5. Review and Approve the FY 2023 Agenda Planning Calendar
Action: The Committee reviewed and approved the calendar.
Committee Members/Staff Announcements: None.
Adjournment: The meeting was adjourned at 6:21pm
CITY OF HAYWARD
Hayward City Hall
777 B Street
Hayward, CA 94541
www.Hayward-CA.gov
File #: ACT 22-087
DATE: September 21, 2022
TO: Council Budget and Finance Committee
FROM: Director of Finance
SUBJECT
Public Bank East Bay Update
RECOMMENDATION
That the Committee receives and provides feedback on the draft resolution of support for Public Bank East Bay, and the draft letter of support to the Alameda County Board of Supervisors and recommends approval of the draft resolution and letter to the City Council.
SUMMARY
This report presents two draft resolutions in support of the Public Bank East Bay and a draft letter of support to Alameda County Board of Supervisors. One was drafted by the Friends of the Public Bank East Bay (Attachment II) and one that was edited by City staff (Attachment III).
ATTACHMENTS
Attachment I Staff Report
Attachment II Public Banking Draft Resolution and Letter of Support Attachment III City Edits on Public Banking Draft Resolution and Letter of Support CITY OF HAYWARD Printed on 9/16/2022Page 1 of 1
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DATE: September 21, 2022
TO: Council Budget and Finance Committee
FROM: Director of Finance
SUBJECT: Public Bank East Bay Update
RECOMMENDATION
That the Committee receives and provides feedback on the draft resolution of support for Public Bank East Bay, and the draft letter of support to the Alameda County Board of Supervisors and recommends approval of the draft resolution and letter to the City Council.
SUMMARY
This report presents two draft resolutions in support of the Public Bank East Bay and a draft letter of support to Alameda County Board of Supervisors. One was drafted by the Friends of the Public Bank East Bay (Attachment II) and one that was edited by City staff (Attachment III).
BACKGROUND
In September 2019, the California state legislature passed AB 857, the Public Banking Act.
Public banking is a financial institution owned by public entities, such as cities and counties.
Public banking is banking operated in the public interest, through institutions owned by the people through their representative governments. In November 2021, Public Bank East Bay provided the Committee with a presentation on its institution, an overview of how public banking works, and an overview of its model and next steps. In April 2022, Public Bank East Bay returned to the Committee with a presentation of the East Bay Viability Study and requested the Committee’s support in moving forward with a draft resolution of support for the Public Bank East Bay, and letter of support to the Alameda County Board of Supervisors.
DISCUSSION
During the last fiscal year, Public Bank East Bay has presented the Committee with information about the services provided and requested support from the City of Hayward. A draft Resolution of Support of the Public Bank East Bay (Attachment II) was presented to the Committee in April 2022 with a request to support that the resolution and letter to be sent to the Alameda County Board of Supervisors on behalf of the City of Hayward.
The Committee expressed support for the draft resolution and letter to the Alameda County Board of Supervisors fully supporting its participation in Public Bank East Bay, but did not support the commitment of the City of Hayward to participating in Public Bank East Bay at that time.
In reviewing the draft resolution and letter of support, potential concerns were noted with specific language that may overstate the City’s intentions and commitment to participating in Public Bank East Bay. Attachment III provides edits to the resolution and letter that staff recommends the Committee recommend for Council approval.
ECOMONIC IMPACT
This is an informational item and has no direct economic impact.
FISCAL IMPACT
This is an informational item and has no direct fiscal impact at this point in time.
NEXT STEPS
Upon direction from the Committee, staff will proceed with next steps based on the recommendation of the Committee.
Prepared by: Nicole Gonzales, Deputy Director of Finance Dustin Claussen, Director of Finance
Reviewed by: Dustin Claussen, Director of Finance
Approved by:
_________________________________
Kelly McAdoo, City Manager
ATTACHMENT II
Draft Resolution in Support of the Public Bank East Bay
Whereas, the City of Hayward currently banks with JPMorgan Chase Bank; and
Whereas, Chase’s investments are not aligned well with Hayward’s commitment to social and economic justice; and
Whereas, in 2019 the Public Banking Act passed the CA state legislature, and lays out the path for local governmental agencies to start public banks; and
Whereas, the state Department of Financial Protection and Innovation, the agency that licenses new banks, has issued its regulations for licensing public banks; and
Whereas, the Friends of the Public Bank East Bay has completed its Viability Study, and the Richmond City Council approved it on April 5; and
Whereas, it is anticipated that both Oakland and Berkeley will also approve the Viability Study in September and join Richmond as founding members of the Bank; and
Whereas, the Friends of the Public Bank East Bay has hired prominent banking attorney, Gary Findley, as their consultant to write the Bank’s business plan; and
Whereas, Hayward would be welcome to contribute to the Bank’s capital fund, as well as move our deposits from Chase to the Public Bank in due time; and
Whereas, moving our money from Chase to the Public Bank would help ensure that the Bank’s investment policies would benefit Hayward and not Wall Street shareholders; and
Whereas, the Friends has not yet gotten firm commitments from the Alameda County Board of Supervisors; therefore
Be It Resolved, that the City of Hayward supports the mission of the Public Bank East Bay (https://publicbankeastbay.org/vision); and further
Be It Resolved, that the City of Hayward send the attached letter of support for the Public Bank East Bay to the Alameda County Board of Supervisors, effective immediately.
ATTACHMENT II
September 00, 2022
Alameda County Board of Supervisors
1221 Oak Street, #536
Oakland, CA 94612
Dear County Supervisors,
The Hayward City Council fully supports the creation of the Public Bank East Bay and urges you to formally endorse it as well.
The Friends of the Public Bank, a 501(c)(3), in March completed the state-mandated Viability Study which lays out the high-level plan for the Bank, specifically that the Bank will partner with community-based lenders like community banks, credit unions and Community Development Financial Institutions (CDFIs) to deliver affordable financing and emergency funding to small and worker-owned businesses in neighborhoods hit hardest by COVID-19 and environmental injustices. The Public Bank East Bay will invest in economic initiatives and projects that build wealth rather than extract it, such as permanently affordable housing, community-controlled renewable energy infrastructure, and refinancing municipal debt.
The Friends acknowledge that the governance plan for the Public Bank will have to be approved by the regulatory authorities, and therefore may change, but they are committed to ensuring that members of the most economically marginalized communities are represented on the Bank’s Board and directly involved in shaping lending policies and governance. The Hayward City Council supports the mission of the Public Bank East Bay to democratize finance and use public money for public good, and urges the Board to also support the creation of the Bank.
Sincerely,
Hayward City Council
ATTACHMENT III
City Comment on Draft Resolution in Support of the Public Bank East Bay
Whereas, in 2019, the Public Banking Act passed the CA State legislature, and lays out the path for local governmental agencies to start public banks; and
Whereas, the State Department of Financial Protection and Innovation, the agency that licenses new banks, has issued its regulations for licensing public banks; and
Whereas, the Friends of the Public Bank East Bay have completed a Viability Study, and the Richmond City Council approved it on April 5, 2022; and
Whereas, Hayward may choose to become a member of Public Bank East Bay through contributions to the Bank’s capital fund or movement of other City deposits to the Public Bank in due time; and
Whereas, the Friends of the Public Bank East Bay has not yet gotten firm commitments from the Alameda County Board of Supervisors.
Now Therefore Be It Resolved, that the City of Hayward supports further exploration of the creation of the Public Bank East Bay (https://publicbankeastbay.org/vision); and further
Be It Further Resolved, that the City of Hayward send the attached letter of support for the Public Bank East Bay to the Alameda County Board of Supervisors.
ATTACHMENT III
September 00, 2022
Alameda County Board of Supervisors
1221 Oak Street, #536
Oakland, CA 94612
Dear County Supervisors,
The Hayward City Council supports the creation of the Public Bank East Bay and urges you to formally endorse it as well.
The Friends of the Public Bank, a 501(c)(3), in March completed the state-mandated Viability Study which lays out the high-level plan for the Bank, specifically that the Bank will partner with community-based lenders like community banks, credit unions, and Community Development Financial Institutions (CDFIs) to deliver affordable financing and emergency funding to small and worker-owned businesses in neighborhoods hit hardest by COVID-19 and environmental injustices. The Public Bank East Bay will invest in economic initiatives and projects that build wealth rather than extract it, such as permanently affordable housing, community-controlled renewable energy infrastructure, and refinancing municipal debt.
The Friends acknowledge that the governance plan for the Public Bank will have to be approved by the regulatory authorities, and therefore may change, but they are committed to ensuring that members of the most economically marginalized communities are represented on the Bank’s Board and directly involved in shaping lending policies and governance. The Hayward City Council supports the mission of the Public Bank East Bay to democratize finance and use public money for public good, and urges the Board to also support the creation of the Bank.
Sincerely,
Barbara Halliday, Mayor on behalf of the Hayward City Council
CITY OF HAYWARD
Hayward City Hall
777 B Street
Hayward, CA 94541
www.Hayward-CA.gov
File #: ACT 22-083
DATE: September 21, 2022
TO: Council Budget and Finance Committee
FROM: Director of Finance
SUBJECT
CalPERS Update
RECOMMENDATION
That the Committee receives the report on the CalPERS Update.
SUMMARY
This report provides an overview of CalPERS preliminary investment return for Fiscal Year 2021-2022.
ATTACHMENTS
Attachment I Staff Report
CITY OF HAYWARD Printed on 9/16/2022Page 1 of 1
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DATE: September 21, 2022
TO: Council Budget and Finance Committee
FROM: Director of Finance
SUBJECT: CalPERS Update
RECOMMENDATION
That the Committee receives the report on the CalPERS Update.
SUMMARY
This report provides an overview of CalPERS preliminary investment return for Fiscal Year 2021-2022.
BACKGROUND
The City of Hayward offers its employees and retirees a defined pension benefit plan that is managed and administered by the California Pensions Retirement System (CalPERS), a State of California Pension program. For each of the City’s plans (Police, Fire, & Miscellaneous), CalPERS provides an annual actuarial valuation report detailing the latest status of the City of Hayward Pension plans for employees and retirees. These actuarial reports are used to calculate the annual required contribution to the pension obligations. In addition, updates on the rate of investment return, funding status, and changes based on various impacts are detailed in the report.
In October 20211, staff presented the Committee with an overview of the June 30, 2020, CalPERS Actuarial Valuation Report, including financial scenarios based on the potential changes to the 7.0 percent discount rate, which was triggered based on unprecedented returns on investments in fiscal year 2020-2021. The scenarios presented included financial impacts based on a potential change in discount rate ranging between 6.8 percent and 6.375 percent. At the time of that report, the CalPERS’ Board of Directors had not formally approved the change in discount rate. In November 2021, the CalPERS Board of Directors approved a change in discount rate from 7.0 percent to 6.8 percent.
1 CBFC Meeting on 10/20/21, CITY OF HAYWARD - File #: RPT 21-117 (legistar.com)
Updated CalPERS Actuarial Valuation Reports for each plan through June 30, 2021 have not yet been released by CalPERS. It is anticipated that the valuation reports will be published and made available within the next several weeks. Staff will provide the Committee with an overview based on the most recent CalPERS Actuarial Valuation reports at a future Council Budget and Finance Committee meeting.
DISCUSSION
Each year, CalPERS announces its investment returns for the fiscal year. In July 2021, CalPERS announced that their investment return for fiscal year 2020-21 was 21.3 percent. This unprecedented investment return triggered the Funding Risk Mitigation policy, which states the discount rate may be adjusted in times when investment during the fiscal year exceeds the current target rate of return by two or more percent. In November 2021, the CalPERS Board of Directors (Board) approved the change in discount rate from 7.0 percent to 6.8 percent.
The City continues to monitor CalPERS investment returns each fiscal year to evaluate the impact on the City and each of its retirement plans. In July 2022, CalPERS announced a preliminary -6.1 percent net return on investment for the 12-month period ending on June 30, 2022. This is a vast shift compared to the fiscal year 2020-2021, where CalPERS announced a historic high of 21.3 percent investment returns. This is CalPERS’ first loss reported for its investment returns since the Great Recession in 2009.
The negative return, combined with the change in the discount rate to 6.8 percent, led to a roughly 9 percent drop in the pensions’ funded estimated overall funded status, which is 72 percent. The combination of the negative return coupled with the change in the discount rate are expected to result in higher employer contributions in future years.
In the next several weeks, CalPERS is expected to release Actuarial Valuation Reports through June 30, 2021 for all three plans, which will include the updated discount rate of 6.8 percent.
Staff will return to the Committee at a future date with an update on long-term fiscal implication of the change in discount rate coupled with the recent CalPERS investment returns for fiscal year 2021-2022.
ECOMONIC IMPACT
This is an informational item and has no direct economic impact.
FISCAL IMPACT
While the rising costs of funding associated with the City’s pension plans is a challenging piece of the operating budget, the conveyance of the information included in this report has no fiscal impact.
NEXT STEPS
Staff will return to the Committee at a future date with an update on long-term fiscal implication of the change in discount rate coupled with the recent CalPERS investment returns for fiscal year 2021-2022.
Prepared by: Nicole Gonzales, Deputy Director of Finance
Reviewed by: Dustin Claussen, Director of Finance
Approved by:
_________________________________
Kelly McAdoo, City Manager
CITY OF HAYWARD
Hayward City Hall
777 B Street
Hayward, CA 94541
www.Hayward-CA.gov
File #: ACT 22-082
DATE: September 21, 2022
TO: Council Budget and Finance Committee
FROM: Director of Finance
SUBJECT
Review and Approve the FY 2023 Agenda Planning Calendar
RECOMMENDATION
That the Council Budget and Finance Committee reviews and approves the FY 2023 Agenda Planning Calendar.
SUMMARY
The FY 2023 Agenda Planning Calendar suggests agenda topics for the year for the Committee’s consideration.
ATTACHMENTS
Attachment I FY 2023 Agenda Planning Calendar
CITY OF HAYWARD Printed on 9/16/2022Page 1 of 1
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ATTACHMENT I
COUNCIL BUDGET AND FINANCE COMMITTEE
FY 2023 Agenda Planning Calendar
September 21, 2022
Meeting Location: Remote Participation
Meeting Time: 5:00 p.m.
Meeting Dates: The Council Budget & Finance Committee generally meets monthly on the 3rd Wednesday of the month, except for July and 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)
September 21, 2022 CalPERS Update
Public Banking Resolution Review
October 19, 2022
Hayward Community Foundation Update
Transient Occupancy Tax Review
FY 2022 Annual Audit Process (Oral Presentation by External Auditor) November 16, 2022 Investment Portfolio Review and FY 2023 Statement of Investment Policy Update (External Investment Manager)
December 21, 2022 Presentation of FY 2022 Annual Audit
FY 2024 Budget Process and Calendar Review
January 18, 2023 Annual Comprehensive Financial Report for the Year Ended June 30, 2022 February 15, 2023 FY 2023 Mid-Year Budget Review and General Fund Long Range Financial Model Update
March 15, 2023 Discussion on Mayor & City Council FY 2024 Budget FY 2024 Budget Process Update
April 19, 2023 FY 2024 Proposed Budget Discussion
May 17, 2023 Annual Review of City Issued Debt
Annual City Benefit Liabilities and Funding Plan Review June 21, 2023 FY 2024 Budget Process Debrief (Oral Presentation) Non-scheduled future agenda topics:
(Cont’d on following page)
- Fleet Utilization Study
- Pension Obligation Bonds (as Updates Available)
- Additional Payment OPEB Trust
- 238 Parcel Sales Update (Timing TBD on Transactions)