Tuesday, October 29, 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
Agenda
October 29, 2024Council Budget and Finance
Committee
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: Oct 29, 2024 05:30 PM Pacific Time
Topic: Council Budget and Finance Committee - October 2024 Please click the link below to join the webinar:
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Password: Budget@X29
Or join by phone:
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CALL TO ORDER
AB 2449 TELECONFERENCE NOTIFICATIONS AND CONSIDERATION
ROLL CALL
Limited Only to Items on the Agenda and Submitted Prior to the Meeting.
PUBLIC COMMENTS:
APPROVAL OF MINUTES
Review and Approve of the Council Budget and Finance
Committee September 18, 2024, Meeting Minutes
MIN 24-1121.
Attachments: Attachment I Minutes
October 29, 2024Council Budget and Finance
Committee
Agenda
REPORTS/ACTION ITEMS
General Fund Budget Balancing StrategiesRPT 24-0862.
Attachments: Attachment I Staff Report
American Rescue Plan Act (ARPA) Analysis and ReviewRPT 24-0873.
Attachments: Attachment I Staff Report
Attachment II ARPA Project Status Update
FUTURE AGENDA ITEMS
Review and Approve the 2024/2025 Agenda Planning CalendarACT 24-0824.
Attachments: Attachment I Planning Agenda
COMMITTEE MEMBER/STAFF ANNOUNCEMENTS
ADJOURNMENT
Next Meeting - 5:30 p.m., Wednesday, November 20, 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 24-112
DATE: October 29, 2024
TO: Council Budget and Finance Committee
FROM: Director of Finance
SUBJECT
Review and Approve of the Council Budget and Finance Committee September 18, 2024, Meeting Minutes
RECOMMENDATION
That the Council Budget and Finance Committee (CBFC) reviews and approves the September 18, 2024, CBFC meeting minutes.
SUMMARY
The CBFC held a meeting on September 18, 2024, and the draft minutes are attached for the CBFC’s review and approval.
ATTACHMENTS
Attachment I 09/18/2024 CBFC Meeting Minutes
CITY OF HAYWARD Printed on 10/25/2024Page 1 of 1
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ATT ACHMENT I
COUNCIL BUDGET & FINANCE COMMITTEE MEETING
Meeting Minutes of September 18, 2024
Call to Order: 5:31 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 Guests: None
Public Comments: None
1. Approval of Meeting Minutes from August 21, 2024
Action: Minutes reviewed and unanimously approved.
2. City Procurement Policy Update
Finance Director Gonzales presented
Councilmember Syrop Questions:
A. Why are we increasing the threshold to $150,000? What other cities have thresholds of $100,000?
B. Is the City Attorney threshold comparable to the City Manager threshold?
C. Does this affect the annual AB 481 report?
D. Do the increased thresholds affect and include supplies, services, and equipment?
E. Why are the thresholds amounts so high? Is it to account for inflation? F. Can you explain the difference between slides three and four? Councilmember Bonilla Jr. Questions:
A. Does this change the overall internal purchasing process? Mayor Salinas Questions
A. How will this change affect reporting to Council?
B. Will increasing the threshold amount allow for department heads to sign for items under the threshold amount?
Action: The Committee received the presentation and provided feedback.
3. Measure C Annual Report
Finance Director Gonzales presented
Councilmember Syrop Questions:
A. Are there specific positions funded through Measure C? B. Where can we find information for Measure C related projects? C. Will residents receive a K-1 Measure information in support of passing the measure?
Councilmember Bonilla Jr. Questions:
A. Where did the City receive additional funds from for the Fire Station 6 project?
B. What caused the jump in expenditures from fiscal year 2024 to fiscal year 2025?
Mayor Salinas Questions:
A. Can you provide City Council a one-page explanation of the Measure C chart provided in the presentation tonight and information on how Measure C funds are utilized?
B. What is the status of paying for the last phase of the Route 238 Corridor?
C. Do you know how much the City still owes for the Route 238 Corridor
Action: The Committee received the report.
4. Review and Approve the FY 2024/2025 Agenda Planning Calendar Councilmember Syrop Questions:
A. Can you provide a vacancy report during the budget strategy Council Budget & Finance Committee meeting?
Councilmember Bonilla Jr. Questions:
A. When is the General Fund discussion being scheduled for full Council? B. Can we discuss surplus properties?
Action: The Committee reviewed the calendar.
Committee Members/Staff Announcements: None.
Adjournment: The meeting was adjourned at 6:33 p.m.
CITY OF HAYWARD
Hayward City Hall
777 B Street
Hayward, CA 94541
www.Hayward-CA.gov
File #: RPT 24-086
DATE: October 29, 2024
TO: Council Budget and Finance Committee
FROM: Director of Finance
SUBJECT
General Fund Budget Balancing Strategies
RECOMMENDATION
That the Committee reviews and receives the high-level overview of varying budget balancing strategies.
SUMMARY
The City of Hayward continues to review and plan for ongoing structural deficits that have led to the use of General Fund reserves over the last two years, and currently projected into the future. In anticipation of a continued need to use reserves to balance the General Fund, the City is reviewing potential fiscal policies to both enhance revenue growth and reduce expenditures. The following report summarizes some general concepts and strategies related to both revenue enhancements and expenditure reductions and realignments.
ATTACHMENTS
Attachment I Staff Report
CITY OF HAYWARD Printed on 10/25/2024Page 1 of 1
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DATE: October 29, 2024
TO: Council Budget and Finance Committee
FROM: Director of Finance
SUBJECT:
RECOMMENDATION
That the Committee reviews and receives the high-level overview of varying budget balancing strategies.
SUMMARY
The City of Hayward continues to review and plan for ongoing structural deficits that have led to the use of General Fund reserves over the last two years, and currently projected into the future. In anticipation of a continued need to use reserves to balance the General Fund, the City is reviewing potential fiscal policies to both enhance revenue growth and reduce expenditures. The following report summarizes some general concepts and strategies related to both revenue enhancements and expenditure reductions and realignments.
BACKGROUND
The City of Hayward is currently projecting a budgetary shortfall in General Fund in FY 2025 and the coming years. Over the last two fiscal years the City has had to rely on General Fund reserves to balance the operating budget. Led by strong leadership by Council and conservative fiscal management, the City has not fully realized the use of reserves as projected over the last two years. In an effort to work toward addressing both short-term and long-term fiscal sustainability, staff is exploring best practices, industry standards, and innovative strategies to assist in closing the projected structural budget gap. Staff is also exploring strategies that had been previously implemented by the City during financially challenging times, such as during the great recession, and the Covid-19 pandemic.
In 2017 the City projected a similar use of reserves and held a budget work session held in 2017 for Council to consider potential options to be used to address the projected structural deficit. At that time the City worked with a consultant to build a robust General Fund Long- Range Financial Model, which assisted in a staff lead work session with Council to discuss and receive direction of the exploration and implementation of several budget strategies, including revenue generation and cost reductions. Based on direction from Council, the City explored and implemented several strategies to assist in achieving long-term fiscal sustainability, which included two key voter approved revenue generating measures: 1) an
increase to the City’s Real Property Transfer Tax (RPTT) increasing the tax from $4.50/$1,000 to $8.50/$1,000; and 2) Transient Occupancy Tax (TOT) which allowed the Council to increase the tax from 8.5% up to a maximum of 14%. the City’s TOT currently remains set at
8.5%.
The City has faced fiscal challenges before, weathering the storms of the Great Recession, the COVID-19 pandemic, and other periods of economic contraction by employing various strategies that sustained service delivery and fiscal stability. Now, it is essential for the City to stay focused and proactive in addressing both short-term and long-term structural deficits.
This requires building on past experiences and exploring innovative solutions to achieve robust fiscal health. In this spirit, staff has developed a comprehensive list of strategies for the Committee’s review and consideration.
DISCUSSION
REVENUE ENHANCEMENTS
Many times, in municipal government, taxes and fees serve as the two primary sources of revenue, but differ in purpose, structure, application and adoption. In reviewing and considering revenue enhancements, municipalities will explore adjustments to its taxes and fees.
Taxes
Taxes are mandatory contributions imposed by the local government on residents, businesses, and property owners, typically used to fund essential public services such as policing, fire protection, public education, infrastructure maintenance, and social services.
Taxes are not tied to any specific service; instead, they go into the general budget and are used across various functions of the government. They are assessed based on factors like income, property value, sales, or other local criteria, and are usually levied on a recurring basis. Taxes are generally set by voter approval. Taxes are levied by local governments, to generate revenue for public services and infrastructure. Common municipal taxes include, property taxes, sales taxes, business taxes, cannabis taxes, transient occupancy taxes, and utility taxes.
In reviewing potential tax revenue generation strategies, the City, like other municipalities, should review existing taxes to ensure full authority is exercised in collection of taxes, and explore potential increases to existing taxes.
Potential Tax Considerations:
Cannabis Tax
Cannabis tax refers to the various taxes imposed on the sale and distribution of cannabis products, which can include cultivation, manufacturing, and retail sales. These taxes vary widely depending on the jurisdiction and can take several forms. In November 2016 the voters of Hayward approved Measure EE authorizing the City to impose a local tax not exceeding fifteen percent of gross sales on recreational and medical cannabis. The tax may be
applied to the cultivation, distribution, manufacturing, business-to-business sales, as well as retail sales. Exercising the full tax could serve as a long-term revenue generating strategy.
Fiscal Impact Range: $0.7 million – $0.9 million
Transient Occupancy Taxes (TOT)
TOT, also known as a hotel tax, is imposed on individuals who rent lodging in hotels, motels, and vacation rentals. TOT rates are approved by voters via ballot measure and can vary by jurisdiction. In 2020, voters in Hayward approved an increase in TOT up to 14.5 percent.
Executing the full tax could serve as a revenue generating strategy to assist with long-term fiscal sustainability.
Fiscal Impact Range: $1.0 million - $1.5 million
Short-Term Rental
Short-term rentals (STRs), such as those listed on platforms like Airbnb, VRBO, and others, have become increasingly popular as alternatives to traditional hotel accommodations. In some municipalities, including cities like Hayward, these rentals may be subject to the TOT.
Short-term rental hosts may be required to register with the City or obtain a business license.
Challenges may include tracking and enforcement of the collection of TOT from smaller, private rentals. Many cities have specific regulations that require STR hosts to register properties, comply with tax remittance guidelines, and ensure rentals meet certain health and safety standards. Non-compliance can result in penalties or the removal of properties from rental platforms. This potential revenue generating strategy would yield more time to explore the cost benefit analysis of regulatory compliance with revenue generation.
Fiscal Impact Range: Additional analysis needed to calculate potential impact.
Business License Tax
Business license tax is primarily a regulatory tax that allows cities to monitor and regulate businesses within their local jurisdiction prior to opening, and renewed annually. This potential revenue generating strategy would require support from subject matter experts and would yield a potential lengthy and labor-intensive process. Implementing adjustments to the business license tax requires affirmative voter approval. Additional analysis would be required, along with Council approval before consideration of placing a proposed tax adjustment on the voter ballot.
Fiscal Impact Range: $1.0 million - $1.5 million
Fees
Fees, on the other hand, are charges imposed on individuals or entities for specific services or privileges provided by the local government. Unlike taxes, which fund general operations, fees are typically designed to cover the cost of particular services such as building permits, garbage collection, recreation programs, or utility usage (water, sewer, etc.). Fees are often
one-time payments or charged as a user-specific service fee, meaning that the individual or business benefiting from the service is directly responsible for covering its cost.
Fees are charged by municipalities for various services provided. Fees include permit, utilities, licenses, developer impact fees, to name a few. The purpose of fees imposed by municipalities are intended to generate revenue to fund local services, cost recovery for services provided, and regulation. In reviewing potential other revenue generation strategies, the City, like other municipalities, can explore and review current or potential new fees.
Potential Fee Considerations:
Developer Impact Fees are designed to mitigate the impact of the new development and local infrastructure. The fees help ensure that the costs of the new growth are borne by the developers rather than existing residents. These fees are calculated via nexus studies that estimate the demand for public services generated by the development and land use type.
Common types include Traffic, Public Facility, Parks and Recreation, Public Safety, and Water and Sewer Impact Fees. The City of Hayward currently has a Park Impact Fee adopted in December of 2019 and Traffic Impact Fee adopted in July of 2022.
Fiscal Impact Range: Additional resources needed to calculate potential impact.
Fees for Public Art
Fees for public art may be instituted through a framework that establishes collecting funds that will support public art projects. This can involve charging developers or businesses a fee specifically designated for the creation, installation, and maintenance of public art. The fee can be structured in various ways depending on the goals of the city, local regulations, and the scale of the art projects, including percentage of building permit or construction valuation, impact fees or voluntary contributions and endowments.
With interest in developing a public art program, establishing a public art fee could help defray potential impacts to the General Fund, while also providing a community benefit. While this fee may not have an impact on the current General Fund bottom line, identifying a potential funding source for a new program is essential to ensure sustainability and minimize continued expenditure growth in the General Fund.
Fiscal Impact Range: Additional analysis is needed to calculate potential impact.
Potential One-Time Revenues
The City of Hayward currently has a policy for the Use of One-Time Revenue. This policy states, if the City’s General Fund is not within the policy noted in the Reserves Policy, which requires 20 percent of General Fund operating revenues, then any one-time revenue would be allocated to replenish reserves until the reserves policy requirement is met. Current opportunities for one-time revenue proceeds are the following:
Sales Proceeds from Caltrans Route 238 Properties
In 2016, the City acquired properties from Caltrans within and along the boundary of the City of Hayward. Since 2016, several properties have been sold for commercial and housing development. These funds have not been appropriated and remain in a separate account from the City’s General Fund.
Fiscal Impact Range: $5.0 million - $7.0 million
American Rescue Plan Act (ARPA)
The City received federal stimulus funding, ARPA funding, in response to recovery efforts related to the pandemic. Under federal guidelines, all ARPA dollars must be either spent or obligated December 31, 2024. Any unobligated dollars could be appropriated to the General Fund to account for the calculated lost revenue experienced during the pandemic. While some funds were previously appropriated to the General Fund for this use, there remains capacity to appropriate additional ARPA dollars to account for lost revenue experienced during this economic downturn.
Fiscal Impact: $3.6 million
Other potential revenue could include auditing existing revenue streams to ensure full compliance with existing regulations and taxes such as business license, TOT, UUT and cannabis operations. Ongoing community development including new housing, business, and retail establishments increase both property and sales tax long-term.
EXPENDITURE CONTROL AND REDUCTION
While the City of Hayward has implemented varying cost reduction strategies in the past, which include common practices amongst municipalities, not all strategies are the best solution for every organization. Some strategies to explore include: cost control and prioritization of spending (i.e. essential services and program evaluation).
Cost Control
Cost control strategies can assist in reducing structural budget deficits both in short-term and long-term approaches. Among the strategies contemplated in this report are:
Working to identify potential short-term personnel reduction; Seeking potential operational efficiencies;
Considering consolidation of services; and
Reduction of capital project subsidies.
While expenditure reduction strategies can assist in closing structural budget deficits, these types of strategies may also be challenging to implement and could have significant impacts on services, staff retention/attraction and morale.
Personnel Costs Strategies
Personnel costs are the single largest annual expenditure in municipal government. As service organizations, it is expected that the largest cost of an organization is attributed to staff who provide services to the community. Some short-term personnel cost saving measures often implemented by local jurisdictions include the following:
Hiring Freezes: These short term “freezes” are one time cost saving measures for budgeted positions. Savings can positively impact the bottom line. While one time in nature, hiring freezes can impact service delivery. Given the operational needs of the organization, the duration of hiring freezes can negatively impact the City’s ability to maintain adequate service levels and have significant impact on staff morale depending on length of time for the “freeze”.
For depiction, the potential fiscal impact is based on a three-month hiring freeze beyond what is already estimated in the City budgets for salary savings related to vacant positions that happen organically through attrition throughout the normal course of a year. Analysis of a hiring freeze policies should be considered to better understand potential service deliver impacts.
Fiscal Impact Range: $3.6 million
Reduction in Overtime: Develop and institute policy related to overtime usage. While establishing an overtime policy may yield expenditure savings, there are potential challenges with this strategy, including maintaining staffing minimum staffing levels, service demands, impacts related to vacancies, and operational needs. Analysis of establishing an overtime policy should be explored to understand potential operational impacts and staff morale and retention.
Fiscal Impact Range: Additional analysis needed to calculate potential impacts.
Reduce General Fund Subsidy to Capital Projects
Institute an annual General Fund subsidy cap to fund capital projects as opposed to funding on as needed basis. The City can implement a maximum allowable annually to fund capital projects that rely on the General Fund as a primary funding source. Increase in leveraging other resources, such as federal, state, and local grant fund opportunities, and special revenue funds to capital needs.
While the capital infrastructure is vital to communities, organizations must recognize and live within its means before jeopardizing operational and service needs of the community. This may require prioritization or re-prioritization of capital projects each year based on funding availability and a reduction in support from the General Fund.
While reduction of General Fund support to capital projects can aid in balancing the General Fund, this strategy is not without flaws. The potential consequences and outcomes with the deferral of capital expenditure can negatively impact already aging infrastructure and vehicles replacement that allow the City to provide services to the community. Additionally, the deferment of capital expenditures to achieve immediate savings could have the potential to
cost more in the future, as the costs of construction, equipment, and supplies only increase over time. While this strategy may yield immediate positive impacts to the General Fund bottom line, the consequences of deferring capital expenses will not go without potential negative side effects and should be carefully considered before implementation.
Fiscal Impact Range: $0.5 million to $2 million
Prioritization of Spending
Essential Services
Operating costs for the General Fund are often tied to programs and services that serve communities. These programs often make up the core services that the City provides and range from public safety emergency response to building maintenance, library programing and financial reporting. A comprehensive approach to long-term sustainable fiscal planning would require an evaluation of those core services and a potential priority-based budgeting approach.
Priority based budgeting may help the organization allocate current resources based on priorities and goals rather than funding programs and departments at existing levels. This type of evaluation can be time consuming, data intensive, and require significant organizational change. While this may be an approach the City considers in the future, it is not a feasible strategies to address the City’s current fiscal position.
Program Evaluation
Regular assessment of the effectiveness of programs and services to determine which can be scaled back or eliminated can assist in prioritizing spending and controlling costs. Evaluation of existing programs and services is a feasible approach to addressing current financial shortfalls. This approach would include collaborating with departments to evaluate operating budgets at the programmatic level.
In addition, evaluation of discretionary budgets is a strategy that can be implemented to defer or reduce discretionary purchases for a specified period of time. Examples of deferring or reducing discretionary purchases, include, but not limited to the following areas:
Limit travel for conferences and trainings;
Evaluate and reduce the need for consultant services; Review and reduce office supplies and materials; and
Evaluate and reduce non-essential service levels.
While department operational needs vary from one another, it is important to evaluate programs and discretionary purchases with an equitable lens. Establishing clear definitions and criteria to evaluate programs and discretionary purchases will guide departments in the review and evaluation process. Whether a dollar reduction threshold is set, or a percent reduction is defined, this process can yield annual expenditure savings.
ECONOMIC IMPACT
There is no economic impact associated with this report as it is informational only.
FISCAL IMPACT
There is no fiscal impact associated with this report; however
PUBLIC CONTACT
The agenda for this item was posted in compliance with the California Brown Act.
NEXT STEPS
Staff will continue to evaluate the City’s General Fund and update the General Fund Model based on the FY 2024 outcomes and current market conditions. The strategies presented to the Committee will be provided to the full Council at an upcoming meeting for review and consideration.
Prepared by: Christina Crosby, Deputy Director of Finance Nicole Gonzales, Director of Finance
Recommended by: Nicole Gonzales, Director of Finance
Approved by:
_____________________________________________
Dustin Claussen, Interim City Manager
CITY OF HAYWARD
Hayward City Hall
777 B Street
Hayward, CA 94541
www.Hayward-CA.gov
File #: RPT 24-087
DATE: October 29, 2024
TO: Council Budget and Finance Committee
FROM: Director of Finance
SUBJECT
American Rescue Plan Act (ARPA) Analysis and Review
RECOMMENDATION
That the Committee receive an update on the status of American Rescue Plan Act (ARPA) funded projects and approve recommendations for the reallocation of unobligated and/or unspent ARPA funds.
SUMMARY
On March 11, 2021, the federal stimulus package, the American Rescue Plan Act (ARPA), was signed into law, providing $1.9 trillion in economic stimulus to address impacts due to the COVID-19 crisis.
Specifically, federal relief provided over $65 billion in direct funding to cities to address the economic and fiscal impacts of the pandemic and to assist in the recovery of local communities. The City of Hayward was awarded an allocation of $38.4 million in ARPA dollars.
This report provides an update on the status of ARPA funded projects that were approved by Council on July 13, 2021, as part of the Federal Stimulus Expenditure Plan. To meet funding requirements, all ARPA funding must be obligated by December 31, 2024, and fully expended by December 31, 2026. For the Committee’s consideration and feedback, this report provides recommendations on addressing unobligated funds and reallocation to ensure federal compliance.
ATTACHMENTS
Attachment I Staff Report
Attachment II ARPA Project Status Update
CITY OF HAYWARD Printed on 10/25/2024Page 1 of 1
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DATE: October 29, 2024
TO: Council Budget and Finance Committee
FROM: Director of Finance
SUBJECT: American Rescue Plan Act (ARPA) Analysis and Review
RECOMMENDATION
That the Committee receive an update on the status of American Rescue Plan Act (ARPA) funded projects and approve recommendations for the reallocation of unobligated and/or unspent ARPA funds.
SUMMARY
On March 11, 2021, the federal stimulus package, the American Rescue Plan Act (ARPA), was signed into law, providing $1.9 trillion in economic stimulus to address impacts due to the COVID-19 crisis. Specifically, federal relief provided over $65 billion in direct funding to cities to address the economic and fiscal impacts of the pandemic and to assist in the recovery of local communities. The City of Hayward was awarded an allocation of $38.4 million in ARPA dollars.
This report provides an update on the status of ARPA funded projects that were approved by Council on July 13, 2021, as part of the Federal Stimulus Expenditure Plan. To meet funding requirements, all ARPA funding must be obligated by December 31, 2024, and fully expended by December 31, 2026. For the Committee’s consideration and feedback, this report provides recommendations on addressing unobligated funds and reallocation to ensure federal compliance.
BACKGROUND
The City of Hayward was awarded an allocation of approximately $38.4 million in relief funds from the federal government to address the internal and external needs of the organization and Hayward community associated with the pandemic.
On July 13, 20211, the City Council adopted the City of Hayward Federal Stimulus Expenditure Plan for $38.4 million in federal stimulus funding. Annual budget appropriation of ARPA
1 Hayward City Council Meeting – July 13, 2021 (www.legistar.com)
funded projects has been included in the annual budget process beginning in FY 2022 through FY 2024.
In December 20232, the Council Budget and Finance Committee received an update on the status of ARPA fund projects, including a list of potential projects that could be funded through the use of the reallocation of any unobligated ARPA dollars.
DISCUSSION
To prioritize the needs of the organization and community, the City created two major internal expenditure categories: (1) Community Safety and Economic Recovery, and (2) Fiscal Recovery and Stabilizing City Operations. The Community Safety and Economic Recovery category prioritizes the external needs of the community in the areas of: economic development; housing and homelessness prevention; community and nonprofit programs and efforts; and enhanced clean-up and maintenance. The Fiscal Recovery and Stabilizing City Operations category focuses on: the internal fiscal needs of the City to stabilize City operations and services through replenishing and offsetting the loss of past and projected City revenues; investments in technology needed to return-to-work safely and to enhance remote participation moving forward; and other building and infrastructure investments needed to help maintain and expand City operations and services in a post-COVID environment.
On July 13, 2021, the City Council adopted the City of Hayward Federal Stimulus Expenditure Plan for $38.4 million in federal stimulus funding. The projects and programs funded by ARPA include: (1) Support Public Health Expenditures, including Capitalizing Investments in Public Facilities to Meeting Pandemic Operational Needs; (2) Address Negative Impacts Caused by the Public Health Emergency; (3) Replacement of Lost Public Sector Revenue; and (4) Investment in Water, Sewer, and Broadband Infrastructure. Table 1, below, provides a summary of federal relief funding efforts by project/program categories:
Table 1: Summary of Hayward Federal Stimulus Expenditure Plan
PROJECT/PROGRAM
CATEGORY
BUDGET
AMOUNT
YEAR 1 BUDGET
APPROPRIATION
(FY 2022)
YEAR 2 BUDGET
APPROPRIATION
(FY 2023)
YEAR 3 BUDGET
APPROPRIATION
(FY 2024)
Public Health $ 6,940,000 $ 3,240,000 $ 2,981,000 $ 719,000 Negative Economic Impacts $15,700,000 $ 7,845,000 $ 5,755,000 $ 2,100,000 Replacement of Lost
Revenue
$14,500,000 $ 7,250,000 $ 7,250,000 $ - Water/Sewer/Broadband
Infrastructure
$ 1,238,000 $ 588,000 $ 450,000 $ 200,000 TOTAL $38,378,000 $ 18,923,000 $ 16,436,000 $ 3,019,000 ARPA Project and Program Updates:
2 Hayward Council Budget and Finance Committee Meeting - December 6, 2023 (www.legistar.com)
The City remains dedicated to the transparency of how federal relief funds are allocated and spent. Additionally, providing updates on the status of each project in the adopted Federal Stimulus Expenditure Plan is included in the annual budget document to allow for continued transparency with the Council and the community. Attachment II provides an update on each project through October 2024.
The following section provides expenditure details by ARPA funded project category as outlined in the Federal Stimulus Expenditure Plan: (1) Support Public Health Expenditures, including Capitalizing Investments in Public Facilities to Meeting Pandemic Operational Needs; (2) Address Negative Impacts Caused by the Public Health Emergency; (3) Replacement of Lost Public Sector Revenue; and (4) Investment in Water, Sewer, and Broadband Infrastructure.
Supporting Public Health Projects, Including Investments in Public Facilities:
Several projects were identified to support public health expenditures, including capitalizing investments in public facilities to meet pandemic operational needs. Projects related to technology investment in City operations, building upgrades and improvements are included in the Hayward Federal Stimulus Expenditure Plan.
Graph 1 provides an overall summary of the total allocation and year-to-date actual expenditures spent on projects and programs that are included under the category of Support Public Health, Including Investments in Public Facilities. Attachment II provides more detail on project status and financial obligations anticipated through FY 2025.
Graph 1:
Supporting Public Health Projects, Including Investments in Public Facilities – Actuals vs. Unspent Allocation
$ in thousands
Address Negative Economic Impacts Caused by the Public Health Emergency:
Several projects were identified to address negative economic impacts caused by the public health emergency. Projects and Programs included under this category were intended to assist local businesses in efforts to recover from the implications of the pandemic, as well as the development of programs to support those experiencing homelessness and to prevent more members of the community from falling into homelessness.
Graph 2 provides an overall summary of the total allocation and year to date actual expenditures spent on projects and programs that are included under the category of Address Negative Economic Impacts Caused by the Public Health Emergency. Attachment II provides more detail on project status and financial obligations anticipated through FY 2025.
Graph 2:
Address Negative Economic Impacts Caused by the Public Health Emergency – Actuals vs. Unspent Allocation
$ in thousands
Replace Lost Public Sector Revenue:
Replacement of Lost Public Sector Revenue: Consistent with methodology provided by the Treasury Guidelines, Council authorized the appropriation of ARPA funding to replace lost public sector revenue due to the COVID crisis. Funding to replace lost revenue was allocated in Year 1 (FY 2022) and Year 2 (FY 2023), which reflects a transfer of $14.5 million, split equally between the two fiscal years.
Graph 3 provides an overall summary of the total allocation and year-to-date actual expenditures. As outlined in Hayward Federal Stimulus Expenditure Plan, a total of $14.5 million of ARPA dollars were allocated to the General Fund to replace lost public sector revenue during the height of the pandemic.
Graph 3:
Replace Lost Public Sector Revenue – Actuals vs. Unspent Allocation
$ in thousands
Invest in Water, Sewer, and Broadband Infrastructure:
Graph 4 provides an overall summary of the total allocation and year to date actual expenditures spent on projects and programs that are included under the category of Invest in Water, Sewer, and Broadband Infrastructure.
Graph 4:
Invest in Water, Sewer, and Broadband Infrastructure – Actuals vs. Unspent Allocation
$ in thousands
Recommendations for Uses of Unobligated ARPA Funds
According to Federal compliance standards ARPA recipients must obligate all 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 the General Fund to account for lost revenue during the pandemic.
In developing the Federal Stimulus Expenditure Plan, Council considered a number of priorities that would both meet the needs of the community as it recovered from the pandemic, and restoration the City’s fiscal position due to the negative impacts the pandemic had on a number of key revenue sources. While the City appropriated $14.5 million to the General Fund for the restoration of lost revenue, there is still capacity to appropriate additional ARPA dollars.
Table 2 provides a summary of ARPA funded projects that will not meet the obligation deadline and will be considered for appropriation to the General Fund for lost revenue:
Table 2: ARPA Projects Unable to Meet Deadline
Support public health expenditures, including capitalizing investments in public facilities to meet pandemic operational needs
Project Project Unobligated Funds Status of Project
RP013 Council Chambers Upgrades $104,010 Unable to Meet Obligation Deadline
RP015 Access Hayward Replacement
Implementation $50,000 Unable to Meet Obligation
Deadline
RP019 Expand Fiber Network to Fire Station 5
and Fire Station 9 $365,542 Unable to Meet Obligation
Deadline
Address negative economic impacts caused by the public health emergency Project Project Unobligated Funds Status of Project
RP140 Relocation Assistance for Displaced
Tenants $8,585 On As-Need Basis - Funds
to Reappropriate
RP160 Legal Services for Eviction Protection $450,000 Unable to Meet Obligation Deadline
RP170 Hotel Vouchers for Encampment
Abatements $2,289 On As-Need Basis - Funds
to Reappropriate
Table 3 provides a summary of ARPA funded projects that are complete and have unspent and unobligated funds remaining, and will be considered for appropriation to the General Fund for lost revenue:
Table 3: ARPA Projects with Unobligated Available Funding
Support public health expenditures, including capitalizing investments in public facilities to meet pandemic operational needs
Project Project Unobligated
Funds Status of Project
RP010 Corporation Yard Campus Fiber Upgrade $60,000 Complete - Funds to Reappropriate
RP011 Zero Trust Network Security Software $8,562 Complete - Funds to Reappropriate
RP016 Portable PA System and Mixer $3,000 Complete - Funds to Reappropriate
RP017 SD-WAN Implementation $10,765 Complete - Funds to Reappropriate
RP018 Web Camera/Headsets $9,816 Complete - Funds to
Reappropriate
RP030 Contribution to Animal Control Facility
Renovation $28,989 Complete - Funds to
Reappropriate
RP050 Fire Training Center Funding Gap $506,058 Complete - Funds to Reappropriate
Additionally, as part of the Federal Stimulus Expenditure Plan approved by Council, a First- Time Homebuyer Down Payment Assistance/Wealth-Building Program was identified as a community need. The program includes a budget of $2 million in ARPA dollars, which has not yet been expended. Staff has explored combining this program with an acquisition rehab program (social impact bond program) to reduce the acquisition costs to the purchasers making the program more feasible for low-income purchasers as required by the federal guidelines but the lender for the program withdrew its commitment due to a pending merger.
While staff has a plan for committing funds prior to the deadline and administering the program, given the constraints of the federal funding, staff is recommending that the $2 million in ARPA funding be appropriated to the General Fund.
As the City approaches the December 31, 2024, deadline to obligated all ARPA dollars, staff reviewed all ARPA funded projects. Staff met with Departments to review and discuss project status and feasibility to meet obligation deadlines. Based on these conversations and analysis, there is approximately up to $3.6 million in ARPA dollars that could be reallocated to the General Fund for the restoration of lost revenue. Staff recommends appropriating the $3.6 million in ARPA dollars to the General Fund to account for lost revenue during the pandemic.
During a future work session, Council may consider prioritizing and/or setting guidelines for the use of appropriated funds to the General Fund.
If the Committee agrees with Staff’s recommendation to re-appropriate these funds, the Council could consider funding the project in the future using General Fund dollars and identifying a target population that is more likely to be successful purchasers at a time when the City’s financial outlook is more stable. The first-time homebuyer down payment assistant program is also included in the City’s Strategic Roadmap. Depending on viability and funding, this project may be deferred on the Strategic Roadmap.
ECONOMIC IMPACT
Receiving the Federal Stimulus funding (ARPA), the City has be able to respond and provide relief to both the City programs rand local community members who experienced adverse economic impacts related to the pandemic. Beginning in July 2021, the adopted Federal Stimulus Expenditure Plan identified several projects and programs that provided funding that has made a substantial difference in helping the local economy recover from the pandemic.
STRATEGIC ROADMAP
This agenda item supports several of the Strategic Priorities in the City’s approved Strategic Roadmap.
FISCAL IMPACT
There is no fiscal impact related to this specific agenda item.
PUBLIC CONTACT
This agenda item was published in accordance with all Brown Act requirements.
NEXT STEPS
Staff will present an update on the status of ARPA funding projects and discuss recommendations for consideration related to the reallocation of unobligated and/or unspent funds with the full Council on November 19, 2024.
Prepared by: Nicholas Mullins, Senior Management Analyst Nicole Gonzales, Director of Finance
Recommended by: Nicole Gonzales, Director of Finance
Approved by:
_____________________________________________
Dustin Claussen, Interim City Manager
ARPA Project Status Update ATTACHMENT II
Project Project Description Budget Amount
Year 1
FY 2022
Actual
Year 2
FY 2023
Actual
Year 3
FY 2024
Actual
Year 4
FY 2025
Actuals (YTD)
Year 4
FY 2025
Available Budget
Unobligated to be
Reallocated Status of Project
Technology Investment in City Operations $2,700,000
EnerGov Contingency Funding Supports the implementation of an online permitting software solution. $0 $101,431
$36,519 $0 $0 Completed
Corporation Yard Campus Fiber Upgrade
Fiber optic broadband connections
installation at the Corporation Yard. These
connections allow for a faster, more
secure and reliable network connection.
$60,000 $0
$0 $60,000 $60,000 Complete - Funds to
Reappropriate
Zero Trust Network Security Software
This project allows for the research,
solicitation, procurement, and
implementation of appropriate
services/solutions to increase the overall
security posture for the City to support the
high utilization of hybrid work.
$0 $0
$6,735 $136,532 $8,562 $8,562 Complete - Funds to
Reappropriate
Weekes Public Library Redundant Internet Carrier
This project includes the implementation
of a redundant solution increasing the
network speed as well as providing a
more secure and reliable internet
connection.
$10,000 $0
$0 $0 $0 Completed
Council Chambers Upgrades
Enhancements to the City Council
Chambers audio, video, conferencing, and
recording systems to allow for hybrid
meetings with Council and members of the
public either at home or in the Chambers.
$93,795 $88,954
$9,080 $9,525 $104,010 $104,010 Unable to Meet
Obligation Deadline
Laptops
Equipping City staff laptops as desktop
replacements to be more mobile-focused
and to allow for flexibility and supporting
the high utilization of hybrid work.
$0 $84,936
$0 $133,064 $0 $0 Completed
Access Hayward Replacement Implementation
Submit a solicitation, receive proposals,
and evaluate different solutions for the
City's customer relationship management
(CRM) software, Access Hayward.
$0 $0
$0 $50,000 $50,000 Unable to Meet
Obligation Deadline
Portable PA System and Mixer
Upgrade the current portable PA system
to allow the City to hold public events
outside, in the rotunda, or in larger spaces.
$0 $0 $0 $3,000 $3,000 Complete - Funds to
Reappropriate
SD-WAN Implementation Implement SD-WAN to enhance speed and reliability.
$444,378 $446,194
$425,477 $121,180 $10,765 $10,765 Complete - Funds to
Reappropriate
Web Camera/Headsets
This project supports the purchase web
cameras and headsets to support the
utilization of the hybrid work
environment.
$11,684 $0
$0 $9,816 $9,816 Complete - Funds to
Reappropriate
A. support public health expenditures, Including capitalizing investments in public facilities to meet pandemic operational needs ARPA Project Status Update ATTACHMENT II
Expand Fiber Network to Fire Station 5 and Fire Station 9 Enhance and expand fiber network
connectivity, including in and around Fire
Station 5 and Fire Station 9. The City will
work to connect the two stations to fiber
optics, while adding infrastructure to
allow high speed broadband.
$0 $0 $0 $365,542 $365,542 Unable to Meet
Obligation Deadline
Building Safety Upgrades Upgrade various safety aspects of City buildings. $300,000 $0 $0 $300,000 $0 $0 Funding Reallocated Contribution to Animal Control Facility Renovation Contribute funds to renovate the Animal Control Facility. $300,000 $0 $0 $0 $271,011 $28,989 $28,989 In Progress Weekes Branch Feasibility Assessment
Community Needs Assessment and
Architectural Assessment of the Weekes
Branch Library to determine
infrastructure and renovation needs at the
facility.
$40,000 $0 $28,180 $0 $11,820 $0 In Progress
Weekes Lib Security Enhancements
Interior and exterior security
enhancements at the Weekes Library
branch.
$40,000 $38,990 $0 $1,010 $0 In Progress
Fire Training Center Funding Gap
Public health-focused modifications for
the currently under construction Fire
Department regional training center and
the accompanying renovation of Fire
Station 6.
$1,273,123 $0 $0 $0 $456,058 $456,058 Complete - Funds to Reappropriate
St. Regis Funding In response to the COVID-19 pandemic, a variety of PPE supplies were procured. $0 $0 $0 $250,000 $0 In Progress PPE Supplies
Design, implement, and maintain Human
Resources systems to track and provide
staff with COVID-19 testing, vaccination,
and contact-tracing.
$42,368 $41,982 $386 $0 $0 $0 Completed
Vaccination Record Management Software
Public health-focused modifications for
the currently under construction "The
Stack" community service, health, and
wellness center in South Hayward.
$244,509 $136,844 $107,665 $0 $0 $0 Completed
The Stack Contribution $2,000,000 $0 $0 $0 $2,000,000 $0 $0 Completed TOTAL $6,940,000 $798,682 $896,735 $777,811 $2,671,312 $1,359,572 $1,096,742 ARPA Project Status Update ATTACHMENT II
Project
Direct assistance to nonprofits serving
Hayward residents in the areas of health,
housing, and education.
Budget Amount
Year 1
FY 2022
Actual
Year 2
FY 2023
Actual
Year 3
FY 2024
Actual
Year 4
FY 2025
Actuals (YTD)
Year 4
FY 2025
Available Budget
Unobligated to be
Reallocated Status of Project
Economic Development Business Recovery
Extension of the City's existing Hotel
Annex Program, which partners with local
vacant hotels to house unsheltered
residents who are at significant risk for
COVID-19, including seniors, families, and
those with compromised immune systems.
$2,000,000 $206,695 $647,051 $714,744 $431,169 $340 $0 Completed Community Agency Funding Augmentation
Expansion of the existing temporary
Winter Warming Shelter into a yearly
shelter, dinner, and breakfast from
6:30pm until 7:00am. The project also
adds daytime program as part of the
expansion.
$500,000 $80 $419,134 $0 $80,972 -$167 $0 Completed
Extend Hotel Annex Program
Direct payment of rental limited,
temporary subsidies to households at high
risk of eviction or loss of housing through
other means.
$3,000,000 $1,527,780 $1,472,220 $0 $0 $0 Completed
Expand Winter Warming Shelter Year-Round, including
Daytime Hours
Provide funds for the Navigation Center to
support the continued operations during
the pandemic and maintain occupancy
numbers by expanding the living quarters
to support a third communal living
bungalow on the site.
$2,000,000 $776,976 $841,789 $381,235 $0 $0 Completed
Shallow Subsidies for Homelessness Prevention
The City has partnered with Housing and
Economic Rights Advocates (HERA) to
provide default and foreclosure
prevention services through this program.
$1,500,000 $0 $227,373 $406,157 $866,470 $0 $0 Completed Hayward Navigation Center Contribution
Distribution of emergency relocation
assistance funds to tenants displaced due
to economic impacts from the COVID-19
pandemic or other disasters and
emergencies.
$1,000,000 $853,966 $7,642 $0 $138,393 $0 In Progress
Foreclosure Legal and Financial Assistance
Distribution of emergency relocation
assistance funds to tenants displaced due
to economic impacts from the COVID-19
pandemic or other disasters and
emergencies.
$1,000,000 $191,318 $192,737 $255,402 $440,140 $0 $0 Completed Relocation Assistance for Displaced Tenants
Design and implementation of a program
for the City acquisition of foreclosed or tax
-
defaulted properties to preserve as
permanent affordable housing.
Acquisitions will be in partnership with
and transfer ownership to existing tenants
and community land trusts.
$250,000 $107,262 $26,348 $107,805 $58,585 $58,585
On As-Need Basis -
Funds to
Reappropriate
First-Time Homebuyer Down payment Assistance/Wealth-
Building Program
Provide hotel vouchers to unsheltered
residents displaced due to abatement of
cleanup of unsafe or illegal encampments.
$2,000,000 $0 $0 $0 $2,000,000 $2,000,000 Potential Reallocation B. Address negative economic impacts caused
by the public health emergency
ARPA Project Status Update ATTACHMENT II
Legal Services for Eviction Protection
Support cleanup efforts and maintenance
of unsafe and illegal encampments when
appropriate and necessary.
$1,000,000 $0 $0 $122,787 $377,213 $450,000 $450,000 Unable to Meet Obligation Deadline
Hotel Vouchers for Encampment Abatements
Purchase mobile pressure washers for
continued maintenance and abatement
efforts for encampments, which may
include the cleaning and restoring of
exterior surfaces.
$175,000 $16,971 $80,784 $58,580 $16,375 $2,289 $2,289
On As-Need Basis -
Funds to
Reappropriate
Encampment Clean-Ups
Strategic clean-ups and improvements in
areas that are vulnerable to blight or
illegal dumping, such as the City's main
thoroughfares and business districts.
$875,000 $235,550 $287,203 $287,017 $0 $0 $0 Completed
Mobile Pressure Washer for Encampment Clean-up $50,000 $28,848 $10,394 $10,757 $0 $0 $0 Completed Operation Clean Sweep – Citywide Enhanced Clean-Up $350,000 $48,886 $67,718 $41,499 $0 $0 $0 Completed TOTAL $15,700,000 $3,994,333 $4,280,393 $2,385,984 $2,212,340 $2,649,439 $2,510,874 ARPA Project Status Update ATTACHMENT II
Project Budget Amount
Year 1
FY 2022
Actual
Year 2
FY 2023
Actual
Year 3
FY 2024
Actual
Year 4
FY 2025
Actuals (YTD)
Year 4
FY 2025
Available Budget
Unobligated to be
Reallocated Status of Project
Replacement of Lost Public Sector Revenue $14,500,000 $7,250,000 $7,250,000 $0 $0 $0 $0 Completed Project
Contribute funds to renovate the
Corporation Yard to support
infrastructure work.
Budget Amount
Year 1
FY 2022
Actual
Year 2
FY 2023
Actual
Year 3
FY 2024
Actual
Year 4
FY 2025
Actuals (YTD)
Year 4
FY 2025
Available Budget
Unobligated to be
Reallocated Status of Project
Tech Lending Library: Chrome Books/Hot Spots for 3 Years Contribute funds to expand the Fleet Shop to support infrastructure work. $388,000 $79,748 $230,894 $77,357 $0 $230,695 $0 Completed Corporation Yard Renovation to Support Infrastructure
Work $600,000 $0 $37,291 $977,667 $136,033
$27,027 $27,027 In Progress
Fleet Shop Expansion to Support Infrastructure Work $250,000 $0 $54,686 $0 $0 $0 $0 Funding Reallocated TOTAL $1,238,000 $79,748 $322,871 $1,055,025 $136,033 $257,722 $27,027 TOTAL ARPA ALLOCATION $38,378,000 $12,122,763 $12,749,999 $4,218,820 $5,019,685 $4,266,733 $3,634,643 D. Invest in Water, Sewer, and Broadband Infrastructure C. Replace Lost Public Sector Revenue
CITY OF HAYWARD
Hayward City Hall
777 B Street
Hayward, CA 94541
www.Hayward-CA.gov
File #: ACT 24-082
DATE: October 29, 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 10/25/2024Page 1 of 1
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ATTACHMENT I
COUNCIL BUDGET AND FINANCE COMMITTEE
2024/2025 Agenda Planning Calendar
October 29, 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)
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
August 20, 2025 TBD
September 17, 2025 Measure C Annual Report
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