Wednesday, March 6, 2024
5:30 PM
CITY OF HAYWARD
Hayward City Hall
777 B Street
Hayward, CA 94541
www.Hayward-CA.gov
Conference Room 2A & Virtual Platform (Zoom)
Council Budget and Finance Committee
Agenda
March 6, 2024Council Budget and Finance
Committee
Agenda
NOTICE: The Council Budget and Finance Committee will hold a hybrid meeting in Conference Room 2A and virtually via Zoom.
Public Participation
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/84114094139?
pwd=pI6eeP4WAlmWNPB7E8tNPBLehRY-2I-PX7E.SVtnjKPAfDONYfP6 Webinar ID: 841 1409 4139
Password: Budget@306
Or join by phone:
US: +1 669 900 6833 or +1 646 931 3860
Meeting ID: 841 1409 4139
Password: 6576978517
CALL TO ORDER
AB 2449 TELECONFERENCE NOTIFICATIONS AND CONSIDERATION
ROLL CALL
PUBLIC COMMENTS:
Please note: Public comment via Zoom has been suspended.
APPROVAL OF MINUTES
Review and Approve the Council Budget and Finance
Committee December 6, 2023 Meeting Minutes
MIN 24-0291.
Attachments: Attachment I Minutes
March 6, 2024Council Budget and Finance
Committee
Agenda
REPORTS/ACTION ITEMS
FY 2024 Mid-Year Budget Review and Five-Year General Fund Financial Model Update
RPT 24-0182.
Attachments: Attachment I Staff Report
Attachment II General Fund Long Range Financial Model
Update
3. FY 2025 Budget Update and Calendar Review (Oral Report)
FUTURE AGENDA ITEMS
Review and Approve the FY 2024 Agenda Planning CalendarACT 24-0124.
Attachments: Attachment I Agenda Planning Calendar
COMMITTEE MEMBER/STAFF ANNOUNCEMENTS
ADJOURNMENT
Next Meeting - 5:30 p.m., Wednesday, April 17, 2024
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
CITY OF HAYWARD
Hayward City Hall
777 B Street
Hayward, CA 94541
www.Hayward-CA.gov
File #: MIN 24-029
DATE: March 6, 2024
TO: Council Budget and Finance Committee
FROM: Director of Finance
SUBJECT
Review and Approve the Council Budget and Finance Committee December 6, 2023 Meeting Minutes
RECOMMENDATION
That the Council Budget and Finance Committee (CBFC) reviews and approves the December 6, 2023 CBFC meeting minutes.
SUMMARY
The CBFC held a meeting on December 6, 2023, and the draft minutes are attached for the Committee’s review and approval.
ATTACHMENTS
Attachment I 12/6/2023 CBFC Meeting Minutes
CITY OF HAYWARD Printed on 3/3/2024Page 1 of 1
powered by Legistar™
ATT ACHMENT I
COUNCIL BUDGET & FINANCE COMMITTEE MEETING
Meeting Minutes of December 6, 2023
Call to Order: 5:31 p.m.
Members Present: Mayor Salinas, Councilmember Bonilla Jr., Councilmember Syrop
Members Absent: None
Staff: Kelly McAdoo, Regina Youngblood, Nicole Gonzales, Crissy Mello Franchesca Hatfield, Nicholas Mullins
Guests: None
Public Comments: None
1. Approval of Meeting Minutes from November 1, 2023
Action: Minutes reviewed and unanimously approved.
Councilmember Bonilla Jr. absent for the vote.
2. American Rescue Plan Act (ARPA) Funding: Analysis and Review of Current and Planned Expenditures
Finance Director Gonzales presented an update on ARPA funding and project statuses
Councilmember Syrop Questions:
A. Where is the bulk of “Address negative economic impacts caused by the public health emergency” funds budgeted?
B. Can ARPA funds be used to replenish the General Fund Reserve? C. Why did funds double for the potential Safe Parking Pilot program versus what was initially presented?
D. Would the loans issued from the potential Affordable Housing Development project be paid back?
E. Does the potential Exterior Video Surveillance Cameras-City Hall and Weekes Branch Library project include the Watkins garage? If not, can the project be amended to add the garage?
F. What is the total potential reallocation amount of unobligated ARPA funds?
G. Does potential projection prioritization occur during Council Budget and Finance Committee or the full Council?
Councilmember Bonilla Questions:
A. Are any of the “address negative economic impacts caused by the public health emergency” funds available for reallocation? B. How much is the true cost of the potential Safe Parking program? C. How is the cost determined for the potential Motel Vouchers program?
D. What are the next steps regarding the allocation of unobligated ARPA funds?
E. Will Council get to choose the potential projects to fund if there are unobligated ARPA funds?
Action: The Committee received the presentation and provided feedback.
3. Review and Approve the FY 2024 Agenda Planning Calendar Add a debrief of the People’s Budget project to the calendar? Add update on Hayward Economic Development Corporation
Action: The Committee reviewed the calendar and provided agenda recommendations.
Committee Members/Staff Announcements: None.
Adjournment: The meeting was adjourned at 6:26 p.m.
CITY OF HAYWARD
Hayward City Hall
777 B Street
Hayward, CA 94541
www.Hayward-CA.gov
File #: RPT 24-018
DATE: March 6, 2024
TO: Council Budget and Finance Committee
FROM: Director of Finance
SUBJECT
FY 2024 Mid-Year Budget Review and Five-Year General Fund Financial Model Update
RECOMMENDATION
That the Council Budget and Finance Committee reviews and provides comments on the FY 2024 Mid- Year Budget Review and Five-Year General Fund Financial Model Update.
SUMMARY
This report presents the mid-year review of the FY 2024 Adopted Budget, and an update to the Five-Year General Fund Financial Model (model) presenting proposed changes and projected year-end results based on current trends and data. While staff considers the entire City budget in its mid-year review, this report focuses primarily on the General Fund.
Proposed FY 2024 mid-year expenditures net a total increase of $17.9 million in General Fund expenses.
Of this amount, $14.9 million is related to previously authorized and approved appropriations, and proposed FY 2024 mid-year expenditure adjustments totaling a net increase of $1.99 million, and $1.0 million for the previously approved commitment to the Employee Home Loan Pilot Program. Table 1 and Table 2 below detail the key changes in General Fund expenditures related to previous Council authorized and approved appropriations, and proposed new FY 2024 mid-year requests:
CITY OF HAYWARD Printed on 3/3/2024Page 1 of 3
powered by Legistar™
File #:RPT 24-018
General Fund revenues are expected to exceed the originally projected FY 2024 amount by $10.1 million.
Changes in revenue projections are detailed in Table 3 of the report. Key changes in the General Fund CITY OF HAYWARD Printed on 3/3/2024Page 2 of 3
powered by Legistar™
File #:RPT 24-018
revenues are as follows:
The total change to the FY 2024 Adopted Budget is an increase of $17.9 million. Of that amount, $8.3 million is related to operational expenses, with $9.6 million in appropriations related to authorized loans to Hayward Economic Development Corporation ($8.6 million), and loans for the Employee Home Loan Pilot Program ($1.0 million).
If mid-year requests are approved as proposed, in addition to the previously approved appropriations, the FY 2024 Revised Budget would result in $12.9 million projected use General Fund Reserves for FY 2024.
This report provides an overall update to the City’s Five-Year General Fund outlook.
ATTACHMENTS
Attachment I Staff Report
Attachment II General Fund Long Range Financial Model Update CITY OF HAYWARD Printed on 3/3/2024Page 3 of 3
powered by Legistar™
DATE: March 6, 2024
TO: Council Budget and Finance Committee
FROM: Director of Finance
SUBJECT: FY 2024 Mid-Year Budget Review and Five-Year General Fund Financial Model Update
RECOMMENDATION
That the Council Budget and Finance Committee reviews and provides comments on the FY 2024 Mid-Year Budget Review and Five-Year General Fund Financial Model Update.
SUMMARY
This report presents the mid-year review of the FY 2024 Adopted Budget, and an update to the Five-Year General Fund Financial Model (model) presenting proposed changes and projected year-end results based on current trends and data. While staff considers the entire City budget in its mid-year review, this report focuses primarily on the General Fund.
Proposed FY 2024 mid-year expenditures net a total increase of $17.9 million in General Fund expenses. Of this amount, $14.9 million is related to previously authorized and approved appropriations, and proposed FY 2024 mid-year expenditure adjustments totaling a net increase of $1.99 million, and $1.0 million for the previously approved commitment to the Employee Home Loan Pilot Program. Table 1 and Table 2 below detail the key changes in General Fund expenditures related to previous Council authorized and approved appropriations, and proposed new FY 2024 mid-year requests:
TABLE 1: PREVIOUS COUNCIL AUTHORIZED AND APPROVED GENERAL FUND APPROPRIATIONS Previous Council Approved Appropriation
FY 2024
Impact ($)
Employee Contract Terms – Local 1909, HPMU, and City Council $1,688,651 Replenish stolen and damaged emergency shelter equipment $12,057 New Image Landscape for Downtown Hayward Maintenance $116,402 Annual contingency for Hayward Median Maintenance with Brightview Landscape $30,000 STEP Grant Appropriations $265,000
Appropriate grant funding for Officer Wellness and Mental Health $113,737 Appropriate grant funding for the Hayward Animal Shelter $8,000 Hayward Literacy Council Reimbursement $10,750
Transfer-Out: Loan to Economic Development Corporation for the Purchase Cinema Place $8,600,000 Previously Approved FY 2023 Budget Carryforwards $4,073,282 Previous Council Approved Appropriations Subtotal $14,917,879
TABLE 2: PROPOSED NEW FY 2024 GENERAL FUND MID-YEAR REQUESTS Mid-Year Request (NEW)
FY 2024 Impact
($)
No Mid-Year Personnel Requests $0
Personnel Expenses $0
Unanticipated services and software expenses $183,500
Expenses related to the US Conference of Mayor’s $20,000 Expenses related to the Alameda County Mayor’s Dinner $8,000 Reallocation of ISF charges from Special Revenue to the General Fund $26,482 Additional consulting services inspection fees and plan check for services $500,000 Expenses to support Downtown Special Events $40,000
Downtown Hayward Improvement Association (DHIA) Assessment increase $5,581 Transfer-Out: General Fund Capital - Replace freezer necessary for animal control operations $11,000
Transfer-Out: Information Technology Fund - Previously collected technology fee revenue $166,544 Transfer-Out: Fleet Management Fund – Fuel costs and deferred repairs and maintenance $436,244 Transfer-Out: General Liability Fund – Increase in insurance premium $296,958 Transfer Out: Facilities Management Fund – Security Services and PGE costs for the FS6 Training Center $296,243
Non-Personnel Expenses $1,990,552
Mid-Year Requests (NEW) Subtotal $1,990,552
Appropriate funds for previously approved Employee Home Loan Pilot Program $1,000,000 Mid-Year Requested Appropriation Total $2,990,552
TOTAL GENERAL FUND EXPENSES $17,908,432
General Fund revenues are expected to exceed the originally projected FY 2024 amount by $10.1 million. Changes in revenue projections are detailed in Table 3 of the report. Key changes in the General Fund revenues are as follows:
TABLE 3: GENERAL FUND REVENUES
GENERAL FUND REVENUE ADJUSTMENTS
FY 2024
IMPACT ($)
Projected increase in Property Tax above budgeted amount $2,200,000 Projected increase in Utility User Tax above budgeted amount $3,000,000 Reimbursement from over allocation to Workers’ Compensation Fund $4,497,701 Previously approved revenue increases via grant funding $436,026 TOTAL GENERAL FUND REVENUES $10,134,183
The total change to the FY 2024 Adopted Budget is an increase of $17.9 million. Of that amount, $8.3 million is related to operational expenses, with $9.6 million in appropriations related to authorized loans to Hayward Economic Development Corporation ($8.6 million), and loans for the Employee Home Loan Pilot Program ($1.0 million).
If mid-year requests are approved as proposed, in addition to the previously approved appropriations, the FY 2024 Revised Budget would result in $12.9 million projected use General Fund Reserves for FY 2024.
This report provides an overall update to the City’s Five-Year General Fund outlook.
BACKGROUND
On June 6, 20231, Council adopted the FY 2024 Operating Budget, which projected a reluctant use of General Fund Reserves by $5.1 million to balance the budget. Since the time of the FY 2024 Operating Budget adoption, the City’s fiscal position has changed as it continues to address service needs and emerging needs of the community. Considering recently updated revenue projections, additional Council approved appropriations, and proposed new mid-year requests, the proposed FY 2024 Revised Budget will result in a balanced budget with a small projected use of General Fund Reserves. If mid-year requests are approved as proposed, in addition to the previously approved appropriations, the FY 2024 Revised Budget would result in $12.9 million projected use General Fund Reserves for FY 2024.
This report includes an update to the Five-Year General Fund Financial Model as part of the FY 2024 mid-year review, reflecting the proposed changes in revenue projections and expenditure adjustments.
DISCUSSION
GENERAL FUND REVENUES
FY 2024 General Fund revenues are projected to be $10.1 million higher than originally projected.
This is primarily attributed to projected increases in Property Tax, and Utility Users Tax (UUT) revenues, and reimbursement from prior over allocation to the City’s Workers’ Compensation Fund.
The following analysis highlights key revenue variances as it pertains to FY 2024 mid-year projections and the impact on future year projections as outlined in the model.
Property Tax (increase of $2.2 million) – The FY 2024 Adopted Budget projected an increase of 3% year-over-year in Property Tax revenues as the economic recovery led to increased home values. Property Tax projections have been updated to reflect slightly more growth than previously projected in tax revenue.
1 Hayward City Council Meeting on June 6, 2023 - https://hayward.legistar.com/
Utility User Tax (increase of $3.0 million) – The FY 2024 Adopted Budget projected UUT at $18.0 million. Based on review and analysis of year-to-date revenue collected, the mid-year budget review forecasts an increase of approximately $3.0 million in projected revenue through the end of the fiscal year.
Transfer-In from Workers’ Compensation Fund ($4.5 million) - The fund transfer will reimburse the General Fund for prior-year overfunding to the Workers’ Compensation Fund.
Grant Appropriations ($0.4 million) – Previous approved Council grant funding appropriation.
GENERAL FUND EXPENDITURES
FY 2024 General Fund total adjustments include FY 2023 carryforwards, previous Council authorized and approved appropriations, and mid-year requests. FY 2024 General Fund expenditures, including proposed mid-year requests and previous Council authorized and approved appropriations are projected to be $17.9 million higher than the City adopted budget. Of this amount, $14.9 million is related to previously authorized and approved appropriations, which includes $4.1 million in FY 2023 budget carryforward, and $10.8 million related to other previously authorized and approved appropriations, such as grants, contract agreements, and loan agreements. Proposed FY 2024 new mid-year expenditure requests total an increase of $1.99 million, and a request for appropriation of $1.0 million for the previous Council approved Employee Home Loan Pilot Program.
The following analysis highlights key expenditure variances as it pertains to FY 2024 mid-year projections and the fiscal impacts on future year projections, as illustrated in the model.
Operating Expenses
A number of adjustments are needed at mid-year to fund necessary and/or unanticipated expenditures, and to appropriate prior year carryforward requests into FY 2024.
Carryforward Requests (increase of $4.1 million):
A carryforward is unspent budget that is linked to a commitment such as a contract, requisition, or purchase order. The carryforward of commitment to a new fiscal year carries with it the unspent budget associated with the balance of the commitment. Carryforwards represent budget amounts that were previously authorized and approved by Council during the prior fiscal year.
Previous Council Approved Appropriations - FY 2024 (increase of $10.8 million):
City Council previously authorized and approved appropriations totaling $12.5 million. Previously authorized and approved appropriations are as follows:
Council approval of employee contract terms ($1.7 million) Replenish stolen and damaged emergency shelter equipment ($12,057) New Image Landscape for Downtown Hayward Maintenance ($116,402) Annual contingency for Hayward Median Maintenance with Brightview Landscape ($30,000)
STEP Grant Appropriations ($265,000)
Purchase of 1069 B Street (Cinema Place) ($8,600,000)
Appropriate grant funding for Officer Wellness and Mental Health ($113,737) Appropriate grant funding for the Hayward Animal Shelter ($8,000) Hayward Literacy Council Reimbursement ($10,750)
Appropriate Funds for Previously Approved Employee Home Loan Pilot Program (increase of $1,000,000):
In 2019, City Council approved the use of $1,000,000 of General Fund reserves to fund an Employee Home Loan Pilot Program. The pilot program was paused due to the onset of the COVID-19 pandemic. The pilot program has re-launched with the first lottery drawing scheduled to occurring on April 1, 2024.
Proposed FY 2024 Mid-Year Requests – New (net increase of $1.99 million):
City Manager Unanticipated Services and Software (increase of $183,500):
o Language Access Plan ($36,000)
o Strategic Roadmap Dashboard ($30,000)
o Lean Innovation Staff Training ($12,500)
o Public Works and Maintenance Services Organizational Assessment ($75,000) o Investigation Services ($30,000)
Mayor and City Council (increase of $28,000): Costs associated with US Conference of Mayors ($20,000) and the Alameda County Mayors Dinners ($8,000) Internal Service Fees (increase of $26,482): Reallocation of ISF charges from Special Revenue to the General Fund for Community Services Division Consulting Services (increase of $500,000): Additional consulting services, inspection fees, and plan check for services in Development Services
Downtown Special Events costs (increase of $40,000) – Additional funding required to support Downtown Special Events
Downtown Hayward Improvement Association (increase of $5,581) – Additional funding required for the DHIA Assessment fee increase
Transfer-Out (increase of $1,206,989)
o Transfer-Out: Capital Projects Fund - Replace freezer need for animal control operations ($11,000)
o Transfer-Out: Information Technology Capital Fund - Previously collected technology fee revenue ($166,544)
o Transfer-Out: Fleet Management Fund – Fuel costs and deferred repairs and maintenance ($436,244)
o Transfer-Out: General Liability Fund – Increase in insurance premium ($296,958) o Transfer Out: Facilities Management Fund – Security Services and PGE costs for the FS6 Training Center ($296,243)
The amounts shown below in Table 4 demonstrate the General Fund impact of the changes being proposed as part of the City’s FY 2024 Mid-Year Budget Review, as well as previously approved appropriations authorized after the Council adopted the City’s Operating Budget in June of 2023.
TABLE 4: SUMMARY OF PROPOSED GENERAL FUND CHANGES
(in thousands)
FY 2024
Adopted Change
FY 2024
Mid-Year
Revised
Revenue
Property Tax $2,200
Utility User Tax (UUT) $3,000
Transfer-In (reimbursement) from Workers’ Compensation Fund $4,498 Grant Revenue Appropriations $436
Total Revenue $199,883 $10,134 $210,017
Operating Expenditures
FY 2023 Budget Carryforwards $4,073
FY 2024 Previous Council Approved Appropriations $556 FY 2024 Employee Contract Terms Council Approved Appropriations $1,689 FY 2024 New Mid-Year Requests $1,991
Total Operating Expenditures $204,978 $8,309 $213,287
Loan Expenditures
Employee Home Loan Program $1,000
Hayward Economic Development Corporation Loan $8,600
Total Loan Expenditures $9,600
Net Total Expenditures $204,978 $17,909 $222,887
FIVE-YEAR GENERAL FUND MODEL UPDATE
The Five-Year Model (model) has been updated to include projected changes in revenue and expenses impacting the City’s projected year-end fiscal position for FY 2024. The FY 2024 Adopted Budget projected a use of General Fund Reserves in the amount of $5.1 million by the end of the fiscal year, with a projected ending balance of $37.6 million. Based on the FY 2024 Adopted Budget, the model projected that General Fund Reserves would represent 18.4% of the City’s budgeted General Fund expenditures, which falls below the City’s current General Fund Reserve policy that states that General Fund Reserves should equal 20% of budgeted General Fund expenditures.
As part of the mid-year review process, the model has been updated to include current revenue projections, mid-year expenditure requests, and previous Council approved appropriations as discussed in this report. The updated model projects a use of $12.9 million in General Fund Reserves by the end of the fiscal year, compared to the projected use of General Fund Reserves at the time of adoption, which projected a use of $5.1 million. The change in projected use of General Fund Reserves can be attributed to the net impact of increased revenue projections and increases in projected expenses. A loan to the Hayward Economic Development Corporation for the purchase of Cinema Place in the amount of $8.6 million is attributed to a significant increase in
General Fund expenses. Additionally, the mid-year proposal reflects a $1.0 million appropriation to fund the previous Council approved Employee Home Loan Pilot Program.
While the loans are shown as current expenses, both the Hayward Economic Development Corporation and employee home loans will be repaid to the General Fund overtime until the loans are paid in full. An update to the model presented to Council during the scheduled March 12, 2024, meeting will reflect projected annual loan repayments. Based on these changes, the General Fund Reserve balance is projected to be 14% of total expenses by the end of the fiscal year when including the approved loans. Exclusion of the loans from the General Fund Reserve balance, demonstrates a projected reserve balance of 18.5%.
At a Council work session held on February 6, staff presented Council with an update to the General Fund Long Range Financial Model. During the work session, staff reviewed a number of policy decisions that could impact the net fiscal position of the City. The scenarios included a combination of revenue generation strategies, cost reduction strategies, and illustration of potential employee cost increases. The scenarios are not reflected in the mid-year model update.
Should Council elect to implement presented revenue generating strategies, it could increase revenue by approximately $2.5 million annually.
Table 5 provides an overview of the City’s five-year forecast, with updated revenue projections and expenditures. The table provides a review of the General Fund Reserve balance based on standard operating expense and revenue generation, and also provides an update to the General Fund Reserve balance when including the loans to the Hayward Economic Development Corporation and Employee Home Loan Pilot Program.
TABLE 5: FIVE-YEAR GENERAL FUND FINANCIAL MODEL UPDATE
MEASURE C FUND
Measure C Operating
The Council, as well as the ballot language for Measure C, established several spending priorities for these funds. These priorities include a mix of capital projects and funding allocations toward operating services. While Measure C revenues are to primarily be used to fund capital projects, Revenues $199,883 $210,016 $210,500 $215,731 $217,447 $220,951 Expenditures $204,978 $213,286 $215,871 $223,674 $230,093 $234,374 Net Change in Reserve - Surplus / (Shortfall) ($5,095) ($3,269) ($5,371) ($7,943) ($12,646) ($13,423) Beginning Balance $42,723 $42,723 $39,454 $34,083 $26,139 $13,494 Ending Balance $37,628 $39,454 $34,083 $26,139 $13,494 $70 Target to maintain 20% GF Reserves of Expenditures 18.4% 18.5% 15.8% 11.7% 5.9% 0.0% Beginning Balance $42,723 $42,723 $29,853 $24,482 $16,538 $3,893 Net Change in Reserves - Surplus / (Shortfall) ($3,269) ($5,371) ($7,943) ($12,646) ($13,423) Employee Home Loan Pilot Program ($1,000)
Economic Development Corporation Loan ($8,600)
Net Ending Balance $37,628 $29,853 $24,482 $16,538 $3,893 ($9,530) Net Target to maintain 20% GF Reserves of Expenditures 18.4% 14.0% 11.3% 7.4% 1.7% (4.1%) FY 2028
Forecast
Year 5
GENERAL FUND FORECAST
Mid-Year Update
in thousands
FY 2024
Revised
Year 1
FY 2025
Forecast
Year 2
FY 2026
Forecast
Year 3
FY 2027
Forecast
Year 4
FY 2024
Adopted
Year 1
operating activities, such as police services, addressing illegal dumping, litter control, and graffiti abatement, which also fulfill the promises of Measure C.
FY 2024 Measure C operating fund total adjustments include previously authorized and approved appropriations, and mid-year requests. Proposed FY 2024 Measure C expenditure related requests total an increase of $792,289. The following details the additional request:
Previously approved carryforwards from FY 2023 ($374,229) Proposed Mid-Year Request: Transfer-out to the General Liability Insurance Fund for the Measure C allocated portion of the increased amount in the City’s insurance premium costs (increase of $7,060).
Proposed Mid-Year Request: Appropriate funding to St. Rose Hospital to support the continued delivery of vital health care services while hospital leadership works on long- term sustainable financial plan (increase of $250,000). Proposed Mid-Year Request: Appropriate funds for additional expenses related to Operation Clean Sweep to support Citywide clean-up (increase of $75,000). Proposed Mid-Year Request: Appropriate funds for expenses related to polling, research, public engagement, and communication regarding the potential Measure C extension (increase of $86,000).
Measure C Capital
While Measure C funds operating programs and related expenses, Measure C funds are primarily used to fund capital projects. FY 2024 Measure C capital total adjustments amount to $6.8 million.
Of this amount, the FY 2023 carryforwards accounts for $4.8 million, and $2.0 million in previously approved appropriations for Fire Station 6 and Fire Training Center Project.
OTHER FUNDS
Total adjustments for FY 2024 Other Funds include FY 2023 carryforwards, previous Council approved appropriations, and mid-year requests. Expenditure increases in Other Funds total $35.3 million. Of this total, FY 2023 budget carryforwards total $16.7 million; and appropriations previously approved by City Council total $11.8 million. Increase in expenditure requests at mid- year amount to a net of $6.8 million. Detail of mid-year adjustments are as follows:
Previous City Council Approved Appropriations (increase of $11.8 million) Appropriation of California State Library Grant Funds (increase of $233,984). Appropriation of various Local Grants for the Fire Department (increase of $139,020). Appropriation of Friends of Hayward Library donations (increase of $161,000). Appropriation of FY 2024 Budgets for Landscape and Lighting Assessment Districts and Maintenance Districts (increase of $2.6 million).
Appropriate funds for the purchase of 1069 B Street, LLC’s leasehold interest in the Cinema Place property (increase of $8,600,000).
Appropriate received funds for the Hayward Youth Commission (increase of $3,102). Appropriation to establish budget balances from Byrne Grant 2022 and 2023 award years (increase of $83,572).
Proposed Mid-Year Requests (increase of $6.8 million)
Measure D Recycling Fund (increase of $91,966): Budget correction to appropriately allocate funds for the Senior Sustainability Specialist. Rental Housing Program Fund (increase of $60,508): Increased translation services expenses.
Affordable Housing Fund (increase of $13,950): Administrative budget correction, increase appropriate funds for housing programs to sustain baseline budget. Community Development Block Grant Fund (increase of $504,877): Increase CDBG expenditure to program revenue received in FY 2023 and FY 2024. Water Fund (decrease of $45,983): Budget correction to appropriately allocate funds for the Senior Sustainability Specialist
Sewer Fund (decrease of $45,983): Budget correction to appropriately allocate funds for the Senior Sustainability Specialist
Facilities Management Fund (increase of $336,775): Increase in security services contract and expansion of security service hours at the Watkins parking garage, City Hall, and Downtown facilities, replacement of the backflow preventer at Fire Station #1; PG&E costs at Fire Station #6 Training Center; major backup emergency generator repairs at Fire Station #9; fuel polishing to maintain diesel fuel for fire engines and emergency backup generators; and additional security services needs at the various library branches. Landscape & Lighting and Maintenance District Funds (increase of $79,872): Increased water utility needs.
Fleet Management Fund (increase of $600,000): Increase in fleet fuel budget due to projected increases in fuel costs; and increase in budget for deferred maintenance and repairs of City fleet.
Federal Grants Fund (increase of $505): Adjustment to match actual FY 2024 HOME grant allocation.
General Liability Insurance Fund (increase of $399,862): Reflect the cost of the increased insurance premiums in the FY 2024 Adopted Budget. This expense is an Internal Service Fund, which is supported by allocations and transfers from General Fund, Measure C, and various operating funds.
Transfer-Out to the General Fund from other funds for the reallocation of ISF charges from Special Revenue (increase of $26,482)
Transfer-Out to the General Liability Insurance Fund from other funds for the allocation of costs contributing to the increase in general liability insurance premium cost (increase of $94,617).
Transfer-Out to Fleet Maintenance Fund from other funds for the allocation of cost contributing to the increase in operating expenses related to fleet fuel and deferred maintenance of citywide fleet (increase of $163,756).
Transfer-Out from Worker’s Compensation Fund (Fund 705) for reimbursement from over allocation to Workers’ Compensation Fund (increase of $5,400,000) Transfer-In to Enterprise Funds (Water Fund, Sewer Fund, Stormwater Fund) for reimbursement from over allocation to Workers’ Compensation Fund (increase in revenue of $902,299)
CAPITAL IMPROVEMENT FUNDS
Total adjustments for FY 2024 Capital Improvement Funds include FY 2023 carryforwards, previous Council approved appropriations, and mid-year requests. The FY 2024 Capital Improvement Budget expenditures total a net increase of $138.1 million. Of this amount, FY 2023 carry forwards total $136.1 million; and prior Council authorized, and approved appropriations total $1.2 million. Proposed mid-year adjustments reflect an increase in projected expenditures in the amount of $815,767. Table 6 provides detail of the proposed FY 2024 CIP mid-year changes.
TABLE 6: PROPOSED FY 2024 MID-YEAR CIP CHANGES
Mid-Year CIP Changes
FY 2024
Mid-Year
Changes
Capital Projects (Fund 405) – Replace freezer to store deceased animals requires additional $11,000 than original quote $11,000
Facilities Capital (Fund 726) – Replacement of exterior doors at the Corp Yard to accommodate new access control door readers; new service maintenance contract for access control system; electrical infrastructure upgrade to provide adequate power for EV charging stations in City Hall basement garage; and Watkins garage security enhancements $203,920
Special Gas Tax (Fund 210) – Transfer-out: Budget correction of FY 2023 Mid-Year Transfer- Per the FY 22 TDA Audit, the auditor's recommended Project 05307 (Patrick/Gading Complete Street) should be expensed out of Fund 210 instead of Fund 213 $350,226
Measure BB (Fund 212) - Administrative adjustment of expense budget; reducing budget due to ACTC prohibition of non-ACTC funds being expensed in Measure BB (Fund 212); funds will be appropriated in Street Systems Improvement (Fund 450) ($300,000)
Street Systems Improvement (Fund 450) - Administrative adjustment of expense budget to utilize developer deposit revenue; funds incorrectly appropriated to Measure BB (Fund 212) $300,000 Fleet Management Enterprise (Fund 737) – Use of fund balance to fund the gap for valve truck replacement $200,000
Fleet Management Capital (Fund 736) – Appropriate received revenue from insurance claim and auction of two fire vehicles $50,621
Total Net Change $815,767
AMERICAN RESCUE PLAN ACT (ARPA) STATE AND LOCAL FISCAL RECOVERY FUNDS On March 11, 2021, the American Rescue Plan Act (ARPA) of 2021 was signed into law. A major component of ARPA was the State and Local Fiscal Recovery Fund (SLFRF), which included $65 billion in direct federal relief to cities to address the impacts of COVID-19 and aid in recovery. The City of Hayward was allocated approximately $38.3 million in fiscal recovery funding, to be disbursed in two tranches. The first tranche of 50% of the City’s allocation was disbursed in late May 2021, with the second half was disbursed in May of 2022.
On July 13, 2021, Council approved a plan for use of the City’s ARPA $38.3 million. To date, the City has received the full $38.3 million in ARPA funding. Council appropriated $18.9 million in FY 2022, and $16.4 million FY 2023. The use of ARPA funds is governed by the SLFRF Interim Final Rule issued by the US Treasury Department in May 2021. City Staff developed the ARPA expenditure plan based on community needs, the City’s operational response, and Council feedback. The expenditure plan was also presented to the Council Infrastructure Committee, the Homelessness-
Housing Task Force, the Council Economic Development Committee, and the Community Services Commission for further refinement prior to Council approval in July.
The ARPA expenditure plan is comprised of 37 projects across four major expenditure categories:
support for public health expenditures and investments in pandemic operational needs; addressing negative impacts cause by the public health emergency; replacement of lost public sector revenue; and investment in water, sewer, and broadband infrastructure. Projects commenced in FY 2022 and will continue through FY 2024.
Table 7 provides an overview of total expenditures in FY 2023 and the revised budget in FY 2024.
TABLE 7: ARPA EXPENDITURE PLAN OVERVIEW ($ THOUSANDS)
Expenditure Category Total Budget FY 2022
Actuals FY 2023 Actuals
FY 2024
Revised
Budget
Support public health expenditures,
including capitalizing investments in
public facilities to meet pandemic
operational needs
$6,940 $799 $897 $5,244
Address negative economic impacts
caused by the public health
emergency
$15,700 $3,915 $4,270 $7,515
Replace lost public sector revenue $14,500 $7,250 $7,250 $0 Invest in water, sewer, and
broadband infrastructure
$1,238 $80 $323 $835
TOTAL ARPA EXPENDITURES $38,378 $12,043 $12,740 $13,595 *Includes unspent FY 2023 appropriated expenditures (carried forward into FY 2024)
In accordance with the U.S. Treasury guidelines, ARPA recipients must obligate funds by December 31, 2024, and fully expend all ARPA dollars by December 31, 2026. The obligation of funds may include entering into contract and/or securing a purchase order or requisition for supplies, services, and/or equipment that are considered eligible expenses. The City has the option to reallocate any unspent and/or unobligated ARPA dollars to fund potential projects that meet the eligibility requirements of ARPA dollars. Currently, the majority of projects are expected to fully obligate or expend all ARPA dollars by the funding deadlines.
As of February 2024, it is estimated that there may be approximately $1.2 million in funding from the unspent funds allocated to the Regional Fire Training Center project that may be considered for reallocation. In December 2023, staff presented the Council Budget and Finance Committee with an update on ARPA projects and funding status. Several potential projects and/or programs were presented to the Committee for consideration and feedback, which included the following:
Potential Projects Description Estimated Cost
Replacement of Lost
Revenue
Additional allocation to the General Fund for the
Replacement of Lost Revenue.
Staff to
determine
amount – will
be included in
3/12 report to
Council
Homelessness Public
Education Campaign
Develop a public education campaign to educate
the Hayward community about ongoing
homelessness efforts and how the homeless
system of care operates. (LHH 1.3a).
$ 75,000
FY25 Funding for South
Hayward Parish Year-
Round Operations
Continued funding for extended operations of
emergency shelter at South Hayward Parish,
which was expanded beyond a Winter Warming
Shelter through the City's first ARPA allocation
(2.1e).
$ 1,000,000
Calendar Year 2025 Safe
Parking Pilot
Leverage County land use committee convening to
identify land for safe parking pilot to serve mid-
county residents (2.2b).
$ 1,000,000
Additional Navigation
Center Funding for On-Site
Meals and Operational
Expenses
Increase operational funding to Hayward
Navigation Center to add more on-site meals and
cover existing operating gaps due to increased
costs (2.1a).
$ 500,000
FY 2025 Motel Voucher
Program
Allocate funding to enable continued operations of
motel voucher program, which provides brief
motel stays for individuals who are unsheltered
and on the waitlist for the Navigation Center or
who need temporary shelter during dangerous
weather events when alternative shelter is not
available.
$ 50,000
Affordable Housing
Development
Apply available ARPA funding to the next
Affordable Housing Notice of Funding Availability
(NOFA) to fund affordable housing development
loans. To ensure funds are expended prior to the
deadline, funds could be used for shovel-ready
projects, pre-development costs, or acquisition
costs. Applicable projects would include new
construction, preservation of affordable housing
or adaptive re-use. The additional $5 million in
funding may possibly fund another one or two
projects.
$ 5,000,000
Expansion of Together for
Hayward eGift Card
Program
The Together for Hayward eGift Card Program is
one of the most successful and impactful economic
recovery programs the City offers. The program
injects dollars into small businesses using ARPA
funds which are then matched by consumers. Staff
are well versed in administering this program and
would be able to expend the funds prior to the
deadline.
Any available
amount
The Committee was supportive of all the potential projects and/or programs, and supported staff in moving forward to the full City Council for consideration when deemed appropriate by staff.
STRATEGIC ROADMAP
This agenda item is a routine operational item and does not specifically relate to any of the six priorities outlined in the Council’s Strategic Roadmap.
FISCAL IMPACT
The overall fiscal impact of the proposed mid-year adjustments is an increase to General Fund revenue of $10.1 million, and an increase to General Fund expenditures of $17.9 million. Of this amount, an increase of $1.99 million is attributed to newly requested adjustments; with $15.9 million attributed to carryforwards, and previously approved appropriations. All Other Funds (including Measure C) proposed adjustments will result in a net increase of $7.6 million in newly requested expenditures; and Capital Improvement Funds will result in a proposed net increase in expenditures of $0.8 million in newly requested expenditures.
SUSTAINABILITY FEATURES
The actions in this report do not have an impact on sustainability. Sustainability elements are more directly identified with specific projects as they are carried out.
PUBLIC CONTACT/NEXT STEPS
Upon recommendation by the Committee, staff will present the FY 2024 Mid-Year Budget Review and Five-Year General Fund Financial Model Update to the full City Council at the regularly scheduled meeting on Tuesday, March 12, 2024.
Prepared by: Nicholas Mullins, Management Analyst II
Nicole Gonzales, Director of Finance
Recommended by: Nicole Gonzales, Director of Finance
Approved by:
_________________________________________
Kelly McAdoo, City Manager
CURRENT FORECAST GENERAL FUND HISTORICAL SUMMARY
FY2017
Actuals
FY2018
Actuals
FY2019
Actuals
FY2020
Actuals
FY2021
Actuals
FY2022
Actuals
FY2023
Actuals
FY2024
Adopted
FY 2024
Mid-Year
FY 2024
Revised
FY2025
Forecast
FY2026
Forecast
FY2027
Forecast
FY2028
Forecast
FY2029
Forecast
FY2030
Forecast
FY2031
Forecast
FY2032
Forecast
FY2033
Forecast
Property Tax $47,196 $51,236 $54,468 $58,432 $61,196 $63,524 $68,458 $67,498 $2,200 $69,698 $72,959 $75,601 $78,353 $81,226 $84,023 $86,733 $90,211 $93,871 $97,733 Sales Tax 34,839 33,389 36,011 39,680 40,075 44,028 44,051 46,439 $46,439 47,423 48,728 47,650 47,794 50,311 52,967 55,735 57,280 58,866 Utility Users Tax 20,754 17,488 16,935 16,066 17,268 17,308 25,945 18,000 3,000 $21,000 21,000 21,420 21,848 22,285 22,731 23,186 23,649 24,122 24,605 Transient Occupancy Tax 2,560 2,808 2,823 2,187 1,552 1,979 2,359 2,000 $2,000 2,060 2,122 2,079 2,090 2,204 2,324 2,450 2,524 2,600 Cannabis Tax 0 0 0 3 442 843 804 1,100 $1,100 1,122 1,144 1,167 1,191 1,214 1,239 1,264 1,289 1,315 Emerg Svcs Facilities Excise Tax 2,100 2,131 2,186 2,030 1,831 1,829 2,045 2,075 $2,075 2,096 2,117 2,138 2,159 2,181 2,203 2,225 2,247 2,269 Business License Tax 2,591 2,752 2,833 2,755 2,677 3,171 3,287 2,811 $2,811 2,839 2,868 2,896 2,780 2,739 2,833 2,931 3,032 3,062 Property Transfer Tax 8,350 9,168 12,256 12,150 17,120 21,226 12,357 17,600 $17,600 17,776 17,954 17,236 16,977 17,563 18,169 18,796 18,983 19,173 Franchises 9,646 9,648 9,730 10,582 10,624 10,516 11,907 12,179 $12,179 12,423 12,671 12,924 13,183 13,447 13,716 13,990 14,270 14,555 Permits & Fees 14,917 14,777 15,966 12,074 13,300 12,738 14,297 14,099 $14,099 14,381 14,668 14,746 14,936 15,337 15,750 16,177 16,500 16,830 Interest 253 57 488 460 (9) (735) 427 300 $300 530 437 295 102 0 0 0 0 0 Other Revenue 11,319 10,902 10,751 9,725 14,597 8,629 7,663 11,591 436 $12,027 11,636 11,681 11,728 11,775 11,822 11,870 11,919 11,969 12,019 Transfers In 4,037 4,045 17,357 3,964 3,967 11,571 17,123 4,192 4,498 $8,690 4,256 4,320 4,386 4,454 4,522 4,592 4,664 4,737 4,811 Total Revenues 158,561 158,401 181,804 170,107 184,641 196,625 210,724 199,883 10,134 210,017 210,500 215,731 217,447 220,951 228,093 235,581 244,010 250,824 257,839 Salaries/Wages 67,624 69,065 72,803 73,459 73,817 77,837 81,762 98,419 1,689 100,108 102,144 105,845 108,212 110,631 113,104 115,633 118,218 120,861 123,568 Overtime 9,254 10,370 9,574 9,767 11,903 13,903 14,919 3,370 3,370 3,500 3,570 3,641 3,714 3,789 3,864 3,942 4,020 4,101 Retirement 23,021 23,366 26,951 30,183 33,051 36,742 40,016 42,846 42,846 46,944 49,399 51,648 53,639 57,479 58,780 60,031 58,410 58,532 Health 11,840 11,723 11,533 11,639 11,765 11,994 12,410 16,200 16,200 16,382 16,873 17,379 17,901 18,438 18,991 19,560 20,147 20,752 Retiree Medical 2,847 2,794 3,020 3,107 3,059 3,248 3,241 3,465 3,465 3,552 3,641 3,722 3,806 3,891 3,978 4,067 4,158 4,251 Workers Compensation 6,307 6,228 6,815 6,816 8,106 8,526 9,001 5,418 5,418 5,553 5,692 5,820 5,951 6,084 6,221 6,361 6,503 6,649 Other Benefits 3,007 3,270 1,831 2,065 2,347 2,299 2,492 1,233 1,233 1,280 1,328 1,357 1,388 1,419 1,451 1,484 1,517 1,551 Personnel Charge Out (4,069) (5,213) (3,803) (5,031) (3,500) (4,168) (5,336) (6,371) (6,371) (6,515) (6,661) (6,811) (6,964) (7,120) (7,280) (7,444) (7,611) (7,782) Vacancy Savings - - - - - - - (5,881) (5,881) (4,076) (4,208) (4,291) (4,377) (4,464) (4,553) (4,644) (4,736) (4,830) Subtotal Personnel 119,831 121,604 128,724 132,005 140,546 150,382 158,506 158,699 1,689 160,388 168,764 175,479 180,678 185,688 192,619 197,084 201,574 203,271 206,792 Maintenance & Utilities 787 715 797 920 804 1,210 1,092 1,687 1,687 1,738 1,790 1,843 1,899 1,956 2,014 2,075 2,137 2,201 Services & Supplies 9,326 10,335 11,441 12,105 11,880 10,069 12,593 10,901 778 11,679 11,173 11,453 11,739 12,033 12,333 12,642 12,958 13,282 13,614 Internal Service Charges 14,413 11,863 15,504 16,858 14,048 14,890 16,813 19,951 19,951 19,951 20,450 21,064 21,696 22,347 23,017 23,707 24,419 25,151 Capital Outlay 0 85 5,427 12 257 657 68 0 0 250 258 265 273 281 290 299 307 317 Transfers Out-Debt 3,640 3,348 2,857 2,015 2,993 2,544 2,742 2,708 2,708 2,715 2,715 2,715 734 734 508 281 281 281 Transfers Out-CIP 1,769 2,898 3,357 5,814 2,117 6,309 4,811 2,560 916 3,476 2,637 2,716 2,797 2,881 2,968 3,057 3,148 3,243 3,340 Transfers Out-Liability/Other 9,193 4,257 8,500 5,624 6,252 8,217 9,244 8,473 297 8,770 8,642 8,815 8,991 9,171 9,354 9,542 9,732 9,927 10,126 Budget Additions/Appropriations - - - - - - - - 4,629 4,629 - - - - - - - - - Budget Cuts - - - - - - - - 0 - - - - - - - - - Total Expense 158,957 155,105 176,608 175,353 178,897 194,277 205,868 204,978 8,309 213,286 215,871 223,674 230,093 234,374 242,593 248,153 253,775 256,867 261,821 GF Reserves - Surplus/(Use) (396) 3,296 5,196 (5,246) 5,743 2,348 4,857 (5,095) (3,269) (5,371) (7,943) (12,646) (13,423) (14,500) (12,572) (9,764) (6,042) (3,983) ACFR Adjustment (752) (592) (702) (785) (461) (612) - - - - - - - - - - - Beginning Fund Balance 30,829 29,681 32,385 36,879 30,847 36,130 37,866 42,723 42,723 39,454 34,083 26,139 13,494 70 (14,430) (27,001) (36,766) (42,808) Ending Fund Balance 29,681 32,385 36,879 30,847 36,130 37,866 42,723 37,628 39,454 34,083 26,139 13,494 70 (14,430) (27,001) (36,766) (42,808) (46,791) Bal as % of Expenses 18.7% 20.9% 20.9% 17.6% 20.2% 19.5% 20.8% 18.4% 18.5% 15.8% 11.7% 5.9% 0.0% -5.9% -10.9% -14.5% -16.7% -17.9% Employee Home Loan Program 1,000 1,000
ED Corp Loan 8,600 8,600
Net Ending Fund Balance 29,681 32,385 36,879 30,847 36,130 37,866 42,723 37,628 29,853 24,482 16,538 3,893 (9,531) (24,031) (36,602) (46,367) (52,409) (56,392) Net Bal as % of Expenses 18.7% 20.9% 20.9% 17.6% 20.2% 19.5% 20.8% 18.4% 14.0% 11.3% 7.4% 1.7% -4.1% -9.9% -14.7% -18.3% -20.4% -21.5% ($ in Thousands)
ATTACHMENT II
CITY OF HAYWARD
Hayward City Hall
777 B Street
Hayward, CA 94541
www.Hayward-CA.gov
File #: ACT 24-012
DATE: March 6, 2024
TO: Council Budget and Finance Committee
FROM: Director of Finance
SUBJECT
Review and Approve the FY 2024 Agenda Planning Calendar
RECOMMENDATION
That the Council Budget and Finance Committee reviews and approves the FY 2024 Agenda Planning Calendar.
SUMMARY
The FY 2024 Agenda Planning Calendar suggests agenda topics for the year for the Committee’s consideration.
ATTACHMENTS
Attachment I FY 2024 Agenda Planning Calendar
CITY OF HAYWARD Printed on 3/3/2024Page 1 of 1
powered by Legistar™
ATTACHMENT I
COUNCIL BUDGET AND FINANCE COMMITTEE
2024 Agenda Planning Calendar
March 6, 2024
Meeting Location: Conference Room 2A/Zoom Platform
Meeting Time: 5:30 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)
March 6, 2024 FY 2025 Budget Update and Calendar Review FY 2024 Mid-Year Budget Review and General Fund Long-Range Financial Model Update
April 17, 2024 People’s Budget Debrief
Hayward Community Foundation Update
Discussion on Mayor & City Council FY 2025 Budget
FY 2025 Proposed Budget Discussion
May 15, 2024 Annual Review of City Issued Debt
Annual City Benefit Liabilities and Funding Plan Review June 19, 2024 FY 2025 Budget Process Debrief (Oral Presentation) July 17, 2024 Council Recess
August 21, 2024 Council Recess
September 18, 2024 TBD
October 16, 2024 Measure C Annual Report
November 20, 2024 Investment Portfolio Review and FY 2025 Statement of Investment Policy and Delegation Authority (Oral Presentation by External Investment Manager)
FY 2024 Annual Audit Process (Oral Presentation by External Auditor) December 18, 2024 FY 2026 Budget Process and Calendar Review January 15, 2025 FY 2026 Budget Process and Calendar Review February 19, 2025 FY 2025 Mid-Year Budget Review and General Fund Long-Range Financial Model Update
(continued on next page)
Non-scheduled future agenda topics:
- Additional Payment OPEB Trust
ATTACHMENT I
- 238 Parcel Sales Update (Timing TBD on Transactions)
- Public Bank East Bay
- Hayward Economic Development Corporation