Wednesday, January 15, 2025
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
January 15, 2025Council 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.
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: Jan 15, 2025 05:30 PM Pacific Time
Topic: Council Budget and Finance Committee - January 2025 Please click the link below to join the webinar:
https://hayward.zoom.us/j/84196579618?pwd=PkaxgmcSPJF2LSEo48NRPdqxw585Qr.1 Webinar ID: 841 9657 9618
Password: Budget@115
Or join by phone:
US: +1 669 900 6833 or +1 646 931 3860
Meeting ID: 841 9657 9618
Password: 8736368433
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
Review and Approve of the Council Budget and Finance
Committee November 20, 2024, Meeting Minutes
MIN 25-0011.
Attachments: Attachment I Minutes
January 15, 2025Council Budget and Finance
Committee
Agenda
REPORTS/ACTION ITEMS
Transient Occupancy Tax (TOT) ReviewACT 24-0912.
Attachments: Attachment I Staff Report
3. FY 2026 Budget Process and Calendar Review (Oral Report)
FUTURE AGENDA ITEMS
Review and Approve the 2025 Agenda Planning CalendarACT 25-0024.
Attachments: Attachment I Planning Agenda
COMMITTEE MEMBER/STAFF ANNOUNCEMENTS
ADJOURNMENT
Next Meeting - 5:30 p.m., Wednesday, February 19, 2025
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 25-001
DATE: January 15, 2025
TO: Council Budget and Finance Committee
FROM: Director of Finance
SUBJECT
Review and Approve of the Council Budget and Finance Committee November 20, 2024, Meeting Minutes
RECOMMENDATION
That the Council Budget and Finance Committee (CBFC) reviews and approves the November 20, 2024, CBFC meeting minutes.
SUMMARY
The CBFC held a meeting on November 20, 2024, and the draft minutes are attached for the CBFC’s review and approval.
ATTACHMENTS
Attachment I 11/20/2024 CBFC Meeting Minutes
CITY OF HAYWARD Printed on 1/11/2025Page 1 of 1
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ATT ACHMENT I
COUNCIL BUDGET & FINANCE COMMITTEE MEETING
Meeting Minutes of November 20, 2024
Call to Order: 5:30 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: Justin Resuello, PFM and Whitney Crockett, Maze & Associates
Public Comments: None
1. Approval of Meeting Minutes from October 29, 2024
Action: Minutes reviewed and unanimously approved.
2. Investment Portfolio Review and FY 2025 Statement of Investment Policy Update Nicole Gonzales, Director of Finance and Justin Resuello of PFM presented Councilmember Syrop Questions:
A. With the recent change in interest rates, how is the City’s investment strategy impacted?
B. Could the City consider adding language regarding investments in companies affiliated with fossil fuels into the City’s Statement of Investment Policy? Councilmember Bonilla Jr. Questions:
A. Where does the City’s 4% yield go? Is it reinvested or does it go to the City’s General Fund?
B. What is the process to reallocate investments across sectors? Action: The Committee received the presentation and provided feedback.
3. FY 2024 Annual Audit Process
Whitney Crockett of Maze & Associates presented
Action: The Committee received the report.
4. Review and Approve the FY 2024/2025 Agenda Planning Calendar Action: The Committee reviewed the calendar and provided feedback.
Committee Members/Staff Announcements: None.
Adjournment: The meeting was adjourned at 6:34 p.m.
CITY OF HAYWARD
Hayward City Hall
777 B Street
Hayward, CA 94541
www.Hayward-CA.gov
File #: ACT 24-091
DATE: January 15, 2025
TO: Council Budget and Finance Committee
FROM: Director of Finance
SUBJECT
Transient Occupancy Tax (TOT) Review
RECOMMENDATION
That the Committee provides feedback on this analysis and provides a recommendation to present to City Council to adjust the City’sTOT rate that the Hayward voter approved with the passing of Measure NN in November 2020 for a rate up to 14 percent.
SUMMARY
This report provides a review of the City’scurrent TOT rate, and consideration for increasing the TOT rate in accordance with Measure NN, a voter approved ballot measure, which authorized Council to adjust the TOT rate from 8.5 percent up to 14 percent. In November 2020, the City continued to balance the impacts related to the economic uncertainties around the pandemic. At that time, Council directed staff to keep the TOT rate at its current rate of 8.5 percent to allow hoteliers time to recover from the pandemic. Council requested that an adjustment to the TOT rate be reviewed and considered when the economy has recovered from the impacts of the pandemic.
The report provides an overview of the TOT rate, and consideration for adjusting the TOT rate from 8.5 percent to up to 14 percent.
ATTACHMENTS
Attachment I Staff Report
CITY OF HAYWARD Printed on 1/11/2025Page 1 of 1
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DATE: January 15, 2025
TO: Council Budget and Finance Committee
FROM: Director of Finance
SUBJECT: Transient Occupancy Tax (TOT) Review
RECOMMENDATION
That the Committee provides feedback on this analysis and provides a recommendation to present to City Council to adjust the City’s TOT rate that the Hayward voter approved with the passing of Measure NN in November 2020 for a rate up to 14 percent.
SUMMARY
This report provides a review of the City’s current TOT rate, and consideration for increasing the TOT rate in accordance with Measure NN, a voter approved ballot measure, which authorized Council to adjust the TOT rate from 8.5 percent up to 14 percent. In November 2020, the City continued to balance the impacts related to the economic uncertainties around the pandemic. At that time, Council directed staff to keep the TOT rate at its current rate of 8.5 percent to allow hoteliers time to recover from the pandemic. Council requested that an adjustment to the TOT rate be reviewed and considered when the economy has recovered from the impacts of the pandemic.
The report provides an overview of the TOT rate, and consideration for adjusting the TOT rate from 8.5 percent to up to 14 percent.
BACKGROUND
In June 20201, Council was presented with a comparative analysis of TOT rates and revenues in neighboring agencies, as well as the presentation of the results of 2017 voter polling in comparison with election results from Bay Area cities that had previously placed ballot measures to voters. The analysis found that Hayward had the lowest TOT rate and ranks eleventh in per-capita TOT revenues of the sixteen Bay Area cities with populations over 100,000. At the time, past polling found that an increase to TOT was supported by approximately two-thirds of registered Hayward voters.
1 CITY OF HAYWARD - File #: LB 20-030 (legistar.com)
On July 14, 20202, Council authorized actions to place an increase in the City’s TOT from 8.5 percent to up to 14 percent before the voters of Hayward at the November 3, 2020 election. In November 2020, the voters of Hayward passed Measure NN, which increased the TOT from
8.5 percent to no more than 14 percent.
On November 16, 20223, Council Budget and Finance Committee was presented with a review of the City’s current TOT rate and collected revenue. During the presentation, the Committee received comparisons of current TOT rates in neighboring cities and TOT revenue under different rate scenarios. The Committee recommended maintaining the current 8.5 percent rate and discussed potential rate adjustments after further analysis and continued economic recovery.
DISCUSSION
Staff compared the City’s TOT rate of 8.5 percent to that of fifteen other cities in the Bay Area with populations over 100,000. The City’s current TOT rate remains the lowest among the neighboring agencies listed below. However, with the passage of Measure NN, Council has the authority to adjust the TOT rate up to 14 percent, which would place the City TOT rate within the highest rate compared to neighboring cities; adjusting the rate to 12 percent would place the City TOT rate in the middle of the neighboring agencies listed below. In 2020, when Measure NN was approved by the Hayward voters, Council directed staff to hold the rate at
8.5 percent to allow local hoteliers to recover from the impacts of the pandemic. Table 1, below, provides a comparison of current TOT rates among neighboring cities:
Table 1: Comparison of Current TOT Rates
City TOT Rate
San Francisco 14.00%
Oakland 14.00%
San Mateo 14.00%
Santa Clara 13.50%
Daly City 13.00%
Sunnyvale 12.50%
Fairfield 12.00%
Berkeley 12.00%
Vallejo 11.00%
San Jose 10.00%
Fremont 10.00%
Concord 10.00%
Richmond 10.00%
Antioch 10.00%
Santa Rosa 9.00%
Hayward 8.50%
2 CITY OF HAYWARD - File #: LB 20-038 (legistar.com)
3 CITY OF HAYWARD - File #: ACT 22-120 (legistar.com)
Prior to the pandemic, the TOT rate was set at 8.5 percent, generating an average of $2.6 million in General Fund revenue per year in the five fiscal years proceeding that time.
Projections for prior years, assuming higher rates had been in place, can be seen in Table 2, below. These rates reflect pre-pandemic revenue collection.
Table 2: TOT Revenue Under Different Rate Scenarios in FY 2015 through FY 2019
Fiscal Year 8.5% (Actual) 10% 12% 14%
FY 2015 $ 2,033,057 $ 2,391,831 $ 2,870,197 $ 3,348,564 FY 2016 $ 2,591,468 $ 3,048,786 $ 3,658,543 $ 4,268,300 FY 2017 $ 2,559,873 $ 3,011,615 $ 3,613,938 $ 4,216,261 FY 2018 $ 2,808,158 $ 3,303,715 $ 3,964,458 $ 4,625,201 FY 2019 $ 2,822,564 $ 3,320,663 $ 3,984,796 $ 4,648,929 Average $ 2,563,024 $ 3,015,322 $ 3,618,387 $ 4,221,451
However, the pandemic crisis significantly impacted the City’s TOT revenue source from FY 2020 through FY 2022. In FY 2023, TOT revenue began to show signs of recovery with an increase of approximately $0.5 million over FY 2021 in actual revenue collected. Table 3, below, provides updated projections for the last five years, since Measure NN was approved by the Hayward-voters. The table illustrates the fiscal impacts to the revenue source had higher TOT rates been in place during the past five fiscal years.
Table 3: TOT Revenue Under Different Rate Scenarios in FY 2020 through FY 2024
Fiscal Year 8.5% (Actual) 10% 12% 14%
FY 2020 $2,186,926 $2,572,854 $3,087,425 $3,601,996
FY 2021 $1,552,148 $1,826,056 $2,191,268 $2,556,479
FY 2022 $1,978,905 $2,328,124 $2,793,748 $3,259,373
FY 2023 $2,358,670 $2,774,906 $3,329,887 $3,884,868
FY 2024 $2,045,297 $2,406,232 $2,887,478 $3,368,724
Average $2,045,297 $2,406,232 $2,887,478 $3,368,724
As illustrated in Table 3, if a 12 percent TOT had been in place since FY 2020, it would have generated an average of $2.9 million per year; an average increase of about $0.8 million in annual revenue.
FISCAL IMPACT
Prior to the pandemic and passage of Measure NN, the TOT rate was set at 8.5 percent, and generated approximately $2.6 million in General Fund revenue per year in the five fiscal years proceeding FY 2020.
As the City continues to recover from the impacts of the pandemic, TOT revenue has continued to improve and progress toward pre-pandemic levels. Should the City Council choose to exercise its authority to adjust the TOT rate to 14 percent, the increase would result in positive impacts to the General Fund. If a 12 percent TOT rate was approved, using the TOT annual average revenue, shown in Table 3, the City could potentially realize an increase of approximately $0.8 annually in General Fund revenue.
STRATEGIC ROADMAP
This agenda item supports the Strategic Priority of Improve Organizational Health.
Specifically, this item relates to the implementation of the following project(s):
Project 1, Part 1.a: Maintain and Expand Fiscal Sustainability: Evaluate an increase in the Transient Occupancy Tax.
NEXT STEPS
If the Committee supports the consideration of adjusting the TOT rate in accordance with the voter-approved Measure NN, staff will provide the full City Council with an update and review of the TOT rate and analysis for consideration.
Prepared by: Nicholas Mullins, Senior Management Analyst
Recommended by: Nicole Gonzales, Director of Finance
Approved by:
________________________________
Dustin Claussen, Assistant City Manager
CITY OF HAYWARD
Hayward City Hall
777 B Street
Hayward, CA 94541
www.Hayward-CA.gov
File #: ACT 25-002
DATE: January 15, 2025
TO: Council Budget and Finance Committee
FROM: Director of Finance
SUBJECT
Review and Approve the 2025 Agenda Planning Calendar
RECOMMENDATION
That the Council Budget and Finance Committee reviews and approves the 2025 Agenda Planning Calendar.
SUMMARY
The 2025 Agenda Planning Calendar suggests agenda topics for the year for the Committee’s consideration.
ATTACHMENTS
Attachment I 2025 Agenda Planning Calendar
CITY OF HAYWARD Printed on 1/11/2025Page 1 of 1
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ATTACHMENT I
COUNCIL BUDGET AND FINANCE COMMITTEE
2025 Agenda Planning Calendar
January 15, 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)
February 19, 2025 FY 2025 Mid-Year Budget Review and General Fund Long-Range Financial Model Update
City’s Real Estate Update
March 19, 2025 FY 2026 Budget Update
Hayward Economic Development Corporation 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
October 15, 2025 TBD
November 19, 2025 Investment Portfolio Review and FY 2026 Statement of Investment Policy and Delegation Authority (Oral Presentation by External Investment Manager)
FY 2025 Annual Audit Process (Oral Presentation by External Auditor) December 17, 2025 TBD
January 21, 2026 FY 2027 Budget Process and Calendar Review
Non-scheduled future agenda topics:
- Additional Payment OPEB Trust
- 238 Parcel Sales Update (Timing TBD on Transactions)
- Hayward Community Foundation Update