Wednesday, August 21, 2024
5:30 PM
CITY OF HAYWARD
Hayward City Hall
777 B Street
Hayward, CA 94541
www.Hayward-CA.gov
Conference Room 4A & Virtual Platform (Zoom)
Council Budget and Finance Committee
Revised Agenda
August 21, 2024Council Budget and Finance
Committee
Revised Agenda
NOTICE: The Council Budget and Finance Committee will hold a hybrid meeting in Conference Room 4A 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.
When: Aug 21, 2024 05:30 PM Pacific Time
Topic: Council Budget and Finance Committee Meeting
Please click the link below to join the webinar:
https://hayward.zoom.us/j/88441998775?pwd=Y5Yw65M7h9ViVyHlS3LQ90h0U7AE4A.1 Webinar ID: 884 4199 8775
Password: Budget@821
Or join by phone:
US: +1 669 900 6833 or +1 646 931 3860
Meeting ID: 884 4199 8775
Password: 0111857511
This agenda has been updated to include the following information: Pursuant to Government Code section 54953, the meeting will include a teleconference location at Hampton Inn Sacramento /Rancho Cordova, 10755 Gold Center Drive, Rancho Cordova, California 95670. Council Member Bonilla Jr. will participate via teleconference. The agenda will be posted at the teleconference location and the public will have an opportunity to address the Council Budget and Finance Committee.
CALL TO ORDER
AB 2449 TELECONFERENCE NOTIFICATIONS AND CONSIDERATION
ROLL CALL
PUBLIC COMMENTS:
Limited Only to Items on the Agenda and Submitted Prior to the Meeting.
APPROVAL OF MINUTES
August 21, 2024Council Budget and Finance
Committee
Revised Agenda
Review and Approve of the Council Budget and Finance
Committee May 15, 2024, Meeting Minutes
MIN 24-0871.
Attachments: Attachment I Minutes
REPORTS/ACTION ITEMS
Public Bank East Bay UpdateACT 24-0552.
Attachments: Attachment I Staff Report
3. FY 2025 Budget Process Debrief (Oral Presentation)
FUTURE AGENDA ITEMS
Review and Approve the 2024/2025 Agenda Planning CalendarACT 24-0534.
Attachments: Attachment I Planning Agenda
COMMITTEE MEMBER/STAFF ANNOUNCEMENTS
ADJOURNMENT
Next Meeting - 5:30 p.m., Wednesday, September 18, 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 24-087
DATE: August 21, 2024
TO: Council Budget and Finance Committee
FROM: Director of Finance
SUBJECT
Review and Approve of the Council Budget and Finance Committee May 15, 2024, Meeting Minutes
RECOMMENDATION
That the Council Budget and Finance Committee (CBFC) reviews and approves the May 15, 2024, CBFC meeting minutes.
SUMMARY
The CBFC held a meeting on May 15, 2024, and the draft minutes are attached for the CBFC’s review and approval.
ATTACHMENTS
Attachment I 5/15/2024 CBFC Meeting Minutes
CITY OF HAYWARD Printed on 8/16/2024Page 1 of 1
powered by Legistar™
ATT ACHMENT I
COUNCIL BUDGET & FINANCE COMMITTEE MEETING
Meeting Minutes of May 15, 2024
Call to Order: 5:32 p.m.
Members Present: Mayor Salinas, Councilmember Syrop, and Councilmember Bonilla Jr.
Members Absent: None
Staff: Dustin Claussen, Regina Youngblood, Adam Kostrzak, Nicole Gonzales, Christina Crosby, Franchesca Hatfield, Crissy Mello, Nicholas Mullins, Mary Thomas, Alex Ameri, Elli Lo, Kyle Carbert, and Suzan England Guests: NHA Advisors: Craig Hill, Christian Sprunger, Brown and Caldwell:
Seema Chavan
Public Comments: None
1. Approval of Meeting Minutes from April 17, 2024
Action: Minutes reviewed and approved by Councilmember Syrop and Councilmember Bonilla Jr.
2. Water Resource Recovery Facility (WRRF) Improvements, Phase II – Project Funding Strategy Update
NHA Advisors presented
Councilmember Syrop Questions:
A. Can you confirm these costs are representative of the initial quote? The staff report lists the cost as $520 million.
B. Is there an agreement from the Water Quality Board that the amount won’t go under 50% in 15 years?
C. Is the interest rate on the WIFIA Loans tied to rates set by the federal government?
D. Is this a good interest rate? Should the City wait before locking in this rate?
E. Are the anticipated rate increases also applied to commercial customers?
F. Are the rate increases in addition to the currently proposed rates? G. What type of relief can the City offer residents in regard to rate increases?
Councilmember Bonilla Jr. Questions:
A. How will the City’s rates compare to other agencies?
B. Are there opportunities for state or federal funds to assist with the cost of the facility?
C. Will the project be complete in 2030? How far can the City push out the project?
Action: The Committee received the presentation and provided feedback.
3. Review and Comment on the Annual City Benefit Liabilities and Funding Plan Finance Director Gonzales presented
Councilmember Syrop Questions:
A. Does the City have a choice whether to pay the Pay-Go? B. Does the City have discretion on the OPEB payments?
C. How much are CalPERS rates increasing over the next few years? Councilmember Bonilla Jr. Questions:
A. What does the Miscellaneous Plan represent?
B. What happens to the City’s credit and bond rating if the accrued liability goes up?
C. Is the 80% funding levels where the City is or the recommended funding level?
Mayor Salinas Questions:
A. How many other cities are achieving its funding ratio? B. Are there cities where their accrued liability is zero? C. Is there value in having a Councilmember participate on the CalPERS committee of League of California Cities?
Action: The Committee received the report.
4. Annual Review of City Issued Debt
Finance Director Gonzales Presented
Councilmember Syrop Questions:
A. Would the City’s debt grow by about half a billion if debt is issued to fund the Water Resource Recovery Facility Improvements? B. What would the City have to do to achieve AAA credit rating? C. Has the City adjusted its strategies for its investment accounts? Councilmember Bonilla Jr. Questions:
A. What does the City do with investment income? Where does it go? B. How will the new Water Resource Facility Improvement project impact the City’s credit rating?
Action: The Committee received the report.
5. Review and Approve the FY 2024/2025 Agenda Planning Calendar Councilmember Syrop Questions:
A. Can the committee receive an update regarding the Hayward Economic Development Corporation at a future meeting?
B. Can the committee receive an update regarding the Hayward Community Foundation?
Councilmember Bonilla Jr. Questions:
A. When the Public Bank item is discussed, is the City’s role also going to be discussed?
B. Will the ARPA discussion include possibly moving ARPA funds to General Fund reserves?
Action: The Committee reviewed the calendar.
Committee Members/Staff Announcements: None.
Adjournment: The meeting was adjourned at 6:45 p.m.
CITY OF HAYWARD
Hayward City Hall
777 B Street
Hayward, CA 94541
www.Hayward-CA.gov
File #: ACT 24-055
DATE: August 21, 2024
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 City’s continued participation in the Public Bank East Bay, including the consideration of future financial commitment to becoming a founding member of the bank.
SUMMARY
For a number of years, the City of Hayward has engaged with the Public Bank East Bay (PBEB) as it continued toward establishing a public bank in California. The passage of AB 857, the California Public Banking Act, provided a pathway for local government entities to charter public banks. Since that time, the Public Bank East Bay has engaged with several local agencies to gain support for the creation of a public bank in California. This report provides an update on the PBEB and projected next steps for the continued establishment of the public bank, including applying to the State of California’s Department of Financial Protection and Innovation (State) and Federal Deposit Insurance Corporation (FDIC).
ATTACHMENTS
Attachment I Staff Report
CITY OF HAYWARD Printed on 8/16/2024Page 1 of 1
powered by Legistar™
DATE: August 21, 2024
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 City’s continued participation in the Public Bank East Bay, including the consideration of future financial commitment to becoming a founding member of the bank.
SUMMARY
For a number of years, the City of Hayward has engaged with the Public Bank East Bay (PBEB) as it continued toward establishing a public bank in California. The passage of AB 857, the California Public Banking Act, provided a pathway for local government entities to charter public banks. Since that time, the Public Bank East Bay has engaged with several local agencies to gain support for the creation of a public bank in California. This report provides an update on the PBEB and projected next steps for the continued establishment of the public bank, including applying to the State of California’s Department of Financial Protection and Innovation (State) and Federal Deposit Insurance Corporation (FDIC).
BACKGROUND
In September 2019, California state legislature passed AB 857, the Public Banking Act.
Public banking refers to financial institutions that are owned by public entities, such as cities and counties, and operate in the public interest. These institutions are owned by the people through their representative governments and are designed to serve the needs of the community.
In November 2021, PBEB provided the Council Budget and Finance Committee (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, PBEB returned to the Council Budget and Finance Committee (Committee) to present its viability study. During this meeting, PBEB requested the Committee's support to
move forward with a draft resolution in favor of the PBEB and to provide a letter of support to the Alameda County Board of Supervisors.
In November 20221, Council adopted the draft resolution in support for the PBEB, and a letter of support to Alameda County Board of Supervisors.
DISCUSSION
The PBEB aims to establish an institution where municipal funds are invested to benefit local communities through lending opportunities. The PBEB business plan outlines its goal to provide loans and financial products by leveraging public funds to serve specific communities.
These loans and products will primarily focus on affordable housing development, affordable homeownership, support for local enterprises (including small business loans), and green investments related to environmental justice. While the initial focus will be on these areas, PBEB may eventually expand into other markets to further support local communities.
To create the bank institution, the PBEB must apply to the State and FDIC. Both applications include a number of requirements, including the completion of a viability study, and business plan. The PBEB have created both the viability study, and most recently drafted a business plan.
The draft business plan outlines the financial strategies to establish the necessary initial capitalization and ongoing funding to ensure long-term operation of the bank. This includes substantial capital contributions from public agencies totaling $40 million; and sizable first year deposits from those vested agencies totaling $9 million. It is projected that the bank will be profitable and sustainable by the third year. The draft business plan also indicates that a portion of the deposits are expected to come from the Community Reinvestment Act (CRA)2 and other private sources. The draft business plan also includes financial management planning, a plan for monitoring through a governing board, and financial projections, such as Pro Forma.
The Cities of Berkeley, Oakland, Richmond, and County of Alameda expressed intent to form the PBEB. In partnership, these agencies formed a working group to review the PBEB’s draft business plan. While the City of Hayward has not expressed an intent to be a founding member of the bank, staff participated in the working group to gain insight and learn more about the business model and objectives of the public bank.
The working group met regularly to review and discuss the draft business plan and provided comments and questions on the information outlined in the draft business plan. In early 2024, the City of Berkeley engaged with a consultant, HR&A, to review and provide professional feedback regarding the viability of the draft business plan. The consultant has completed a draft pre-decisional report. Staff received a copy of this repot on August 14, 2024. Staff will
1City of Hayward - Council Meeting November 1, 2022 - Item 6 2Community Reinvestment Act (CRA)
provide a high-level summary of the opinion, and recommendations outlined in the draft pre- decisional report. The PBEB will continue to engage with the City of Berkeley’s Budget Committee to continue a path toward approval of the draft business plan and resolve that the City of Berkeley invest and join the bank. In April 20233, the City of Berkeley approved the PBEB viability study, and declared intent to form the bank. To date, the City of Berkeley continues to engage with PBEB as stated in this report.
In May 20244, the City of Richmond approved the draft business plan, and adopted a resolution joining the public bank, if the charter is approved by the State and Alameda County has delivered the necessary commitments. If those requirements are met, the City of Richmond will contribute its portion of the initial capitalization of the bank and become a founding member of the bank.
In December 202256, the City of Oakland adopted the PBEB viability study, and resolved the intent to form the PBEB with the City of Oakland as founding members. The City of Oakland had planned to place the approval of the bank's draft business plan and a resolution to join and commit to capitalizing the bank on its July agenda. However, due to more urgent matters, this item has been postponed to September. Despite the delay, the City of Oakland remains supportive and committed to investing in the bank.
The Treasurer of Alameda County (County) has expressed the intent to invest in PBEB once the bank is licensed. PBEB is actively working with the County to secure approval of the draft business plan and a commitment from the County to invest and join the bank.
PBEB is actively seeking support and a $1 million capital investment from the City of Hayward. The amount for annual deposits is yet to be determined. By joining and committing to this investment, the City of Hayward would become a founding member and secure a seat on the Board of Directors.
Potential Future Efforts
Public Bank East Bay - The PBEB continues to attempt to collaborate with agencies that have expressed support for forming the bank, including Alameda County and the cities of Richmond, Oakland, and Berkeley. While the City of Richmond has resolved to approve the submission of the draft business plan to the State and has authorized the signing of the charter application, its commitment is contingent on State approval and Alameda County meeting necessary commitments. If these requirements are met, the City of Richmond plans to contribute its portion to capitalize the bank and become a founding member.
PBEB is continuing to engage with the County of Alameda, City of Oakland, and City of Berkeley as detailed in this report. Before PBEB can apply to charter the bank with the State,
3City of Berkeley - Council Meeting April 11, 2023 - Item 34 4City of Richmond - Council Meeting May 28, 2024 - Item P.1.a 5City of Oakland - Council Meeting December 20, 2022 - Item 22-0931 6City of Oakland - Council Meeting December 20, 2022 - Item 22-0986
and complete the regulatory review by the FDIC, the bank must first identify and secure capital funding for the operation of the public bank. At this time, the capital investment has not been secured. PBEB continues to work with interested public agencies, including exploring other sources to establish the necessary capitalization to form the bank.
In the future, should the PBEB receive approval from both governing entities, there would be significant regulations set forth. For the first three years of the operation of the bank, the FDIC and the state regulators regularly monitor the operation of the bank, including quarterly reports and examination to ensure compliance.
City of Hayward - Staff is requesting guidance from the Committee on whether the City of Hayward should continue its involvement with PBEB and consider becoming a founding member. This would involve a financial commitment to contribute toward the bank's capitalization.
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
Staff will proceed with next steps based on the direction and recommendation of the Committee.
Prepared by: Nicole Gonzales, Director of Finance
Reviewed by: Regina Youngblood, Assistant City Manager
Approved by:
____________________________________________
Dustin Claussen, Interim City Manager
CITY OF HAYWARD
Hayward City Hall
777 B Street
Hayward, CA 94541
www.Hayward-CA.gov
File #: ACT 24-053
DATE: August 21, 2024
TO: Council Budget and Finance Committee
FROM: Director of Finance
SUBJECT
Review and Approve the 2024/2025 Agenda Planning Calendar
RECOMMENDATION
That the Council Budget and Finance Committee reviews and approves the 2024/2025 Agenda Planning Calendar.
SUMMARY
The 2024/2025 Agenda Planning Calendar suggests agenda topics for the year for the Committee’s consideration.
ATTACHMENTS
Attachment I 2024/2025 Agenda Planning Calendar
CITY OF HAYWARD Printed on 8/16/2024Page 1 of 1
powered by Legistar™
ATTACHMENT I
COUNCIL BUDGET AND FINANCE COMMITTEE
2024/2025 Agenda Planning Calendar
August 21, 2024
Meeting Location: Conference Room 4A/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)
August 21, 2024 FY 2025 Budget Process Debrief (Oral Presentation) Public Bank East Bay
September 18, 2024 ARPA Funds Update
City Procurement Policy Updates
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 TBD
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
March 19, 2025 FY 2026 Budget Update
April 16, 2025 Discussion on Mayor & City Council FY 2026 Budget FY 2026 Proposed Budget Discussion
May 21, 2025 Annual Review of City Issued Debt
Annual City Benefit Liabilities and Funding Plan Review June 18, 2025 FY 2026 Budget Process Debrief (Oral Presentation) July 16, 2025 Council Recess
Non-scheduled future agenda topics:
- Additional Payment OPEB Trust
- 238 Parcel Sales Update (Timing TBD on Transactions)
- Hayward Economic Development Corporation
- Hayward Community Foundation Update