Hercules City Council
June 14, 2022

Tuesday, June 14, 2022
7:00 PM
City of Hercules
111 Civic Drive
Hercules, CA 94547
City Council
Mayor Dion Bailey
Vice Mayor Alexander Walker-Griffin
Council Member Dan Romero
Council Member Chris Kelley
Council Member Tiffany Grimsley
Dante Hall, City Manager
Patrick Tang, City Attorney
Lauren Berges, City Clerk
Meeting Agenda
In-Person in Council Chambers or
Zoom ID: 841 0405 9457
Zoom Passcode: 520815
Zoom Phone Number: 1-669-900-6833
1 June 14, 2022City Council Meeting Agenda
See last pages of agenda for information regarding meeting procedures To view webcast of meetings, live or on demand, go to the City's website at www.ci.hercules.ca.us I. SPECIAL MEETING - CLOSED SESSION – NONE
II. PUBLIC COMMUNICATION - CLOSED SESSION ITEMS
III. CONVENE INTO CLOSED SESSION - NO ITEMS
IV. REGULAR MEETING – 7:00 P.M. CALL TO ORDER - ROLL CALL V. REPORT ON ACTION TAKEN IN CLOSED SESSION
VI. PLEDGE OF ALLEGIANCE
VII. MOMENT OF SILENCE
VIII. INTRODUCTIONS/PRESENTATIONS/COMMISSION REPORTS
22-194
Proclamation Recognizing June 12, 2022 as Philippine
Independence Day
Philippine Independence Day ProclamationAttachments:

IX. AGENDA ADDITIONS/DELETIONS
X. PUBLIC COMMUNICATIONS
This time is reserved for members of the public to address issues not included in the agenda. In accordance with the Brown Act, Council will refer to staff any matters brought before them at this time, and those matters may be placed on a future agenda.

In accordance with Executive Order N-25-20 and guidance from the California Department of Public Health on gatherings, remote public participation is allowed as follows:

The public may log into the Zoom meeting (refer to agenda cover for Zoom login information) and provide their public comment (3 minute time limit). If attending in-person, please fill out a speaker card and provide to the City Clerk.

When the public comment period is open for the item you wish to speak on, use the "raise hand" feature in Zoom (or press *9 if connecting via phone audio only) at the time the Mayor calls for public comment. Please wait your turn and once you are brought into the meeting, state your name and city of residence for the record.

For additional alternatives to providing public comments please refer to the Notice of Important Instructions on how to Participate and Watch the Hercules City Council Meeting on the back page of the agenda.

All public comments are allowed up to 3 minutes to relay their message or concern. A limit of 30 minutes will be devoted to taking public comment at this point in the agenda. If any speakers remain at the conclusion of the initial 30 minute period, time will be reserved at the conclusion of the meeting to take the remaining comments.

2 June 14, 2022City Council Meeting Agenda
XI. PUBLIC HEARINGS
22-201 Public Hearing Regarding Possible Charter City Measure for the November 8, 2022 General Election
This is the second of two required public hearings.

Recommendation: Receive and discuss staff report, open the public hearing, take public comment, and provide staff with further direction regarding a potential November 8, 2022 ballot measure to become a charter city.

Staff Report charter city public hearing 220614 - jpt
Attach 1 - May 10, 2022 Staff Report with Attachments
Attachments:
22-196 Public Hearing on Proposed FY 2022-23 City of Hercules Budget Plan Including the First Year of the Five Year 2022-2027 Capital Improvement Budget
Recommendation: Open the public hearing, receive a staff report, take public testimony, and continue the public hearing to June 28, 2022.

FY 22-23 Proposed Budget Public Hearing_SR
Attach 1 - FY 22-23 Annual Budget - Final
Attach 2 - Budget Intro - CIP_Sewer_ISF
Attach 3 - Budget Intro - GF and Other Governmental Funds Attachments:

XII. CONSENT CALENDAR
22-200 Minutes
Recommendation: Approve the Regular Meeting Minutes of May 24, 2022.

Meeting Minutes for May 24, 2022Attachments:
22-190 Military Equipment Funding, Acquisition, and Use Policy Recommendation: To waive the second reading and adopt Ordinance No. 537 Hercules Police Department Policy No. 709: Military Equipment; Acquisition, Funding, and Use.
6-14-22 Staff Report
Attach 1 - 6-14-22 Ordinance
Attach 2 - 5-10-22 Staff Report
Attach 3 - Policy Section 709; Military Equipment
Attach 4 - Military Equipment Description Policy Insert Attachments:

3 June 14, 2022City Council Meeting Agenda
22-191 November 8, 2022 General Municipal Election
Recommendation: To consider the following: 1. Adopt Resolution Calling for the Holding of a General Municipal Election to be held on Tuesday, November 8, 2022 for the Election of Two Members of the City Council for the Full Term of Four Years. 2. Adopt a Resolution Requesting the Contra Costa Board of Supervisors to Consolidate a General Municipal Election to be held on Tuesday, November 8, 2022 with the Statewide General Election to be Held on the Same Date. 3. Adopt a Resolution Adopting Regulations for Candidates for Elective Office Pertaining to Candidates Statements Submitted to the Voters at an Election to be held on Tuesday, November 8, 2022.

Staff Report - City Election - 110822
Attach 1 - Resolution Calling the Election
Attach 2 - Resolution Requesting Consolidation
Attach 3 - Resolution - Candidate Statement Regulations Attach 4 - Notice of Election
Attachments:
22-193 All Electric Building Ordinance
Recommendation: To waive the second reading and adopt Ordinance No. 539, amending the Hercules Municipal Code, Title 9 - Building Regulations, modifying Chapter 5 - Electrical Code.
061422 SR All-Electric Building - CC Staff Report - 2022-05-24 Attachment 1 - 061422 All-Electric Building - Ordinance Attachment 2 - All-Electric Building - PC Resolution - Final Attachment 3 - Staff Report to CC - 2021-9-28
Attachment 4 - Staff Report to CC - 2022-01-11
Attachment 5 - Staff Report to CC - 2022-02-08
Attachments:
22-195 List of Projects for Fiscal Year 2022-23 Funded by SB1: The Road Repair and Accountability Act of 2017.

Recommendation: Adopt a resolution approving a list of projects for Fiscal Year 2022-23 funded by SB1: the Road Repair and Accountability Act of 2017.

SB1 2020-21 Staff Report
SB1 2021-22 Reso - Exhibit 1
Street Rehabilitation Project - Sycamore Ave_
Attachments:

4 June 14, 2022City Council Meeting Agenda
XIII. DISCUSSION AND/OR ACTION ITEMS
22-192 Update of the City’s Housing Element for 2023-2031 Recommendaton: To receive a presentation on the City’s General Plan Housing Element to meet the State’s 6th Cycle Regional Housing Needs Allocation (RHNA) requirements.
2023-2031 Housing Element Draft - Intro - CC staff report _ 061422 Attach 1 - Hercules Council Meeting 061422 Rev3
Attachments:

XIV. PUBLIC COMMUNICATIONS
This time is reserved for members of the public who were unavailable to attend the Public Communications period during Section X of the meeting, or were unable to speak due to lack of time. The public speaker requirements specified in Section X of this Agenda apply to this Section.

XV. CITY COUNCIL/CITY MANAGER/CITY ATTORNEY ANNOUNCEMENTS,

COMMITTEE, SUB-COMMITTEE AND INTERGOVERNMENTAL COMMITTEE REPORTS

AND FUTURE AGENDA ITEMS
This is the time for brief announcements on issues of interest to the community. In accordance with the provisions of the Brown Act, matters which do not appear on this agenda but require City Council discussion may be either (a) referred to staff or other resources for factual information or (b) placed on a future meeting agenda.

XVI. ADJOURNMENT
The next Regular Meeting of the City Council will be held on Tuesday, June 28, 2022 at 7:00p.m. in the Council Chambers.

Agendas are posted in accordance with Government Code Section 54954.2(a) or Section 54956.

Members of the public can view electronic agendas and staff reports by accessing the City website at www.ci.hercules.ca.us and can receive e-mail notification of agenda and staff report postings by signing up to receive an enotice from the City’s homepage. Agendas and staff reports may also be obtained by contacting the Administrative Services Department at (510) 799-8215 (Posted: June 9, 2022)

5 June 14, 2022City Council Meeting Agenda

INSTRUCTIONS ON HOW TO PARTICIPATE AND WATCH THE HERCULES CITY COUNCIL AND PLANNING

COMMISSION HYBRID MEETINGS
Attend in Person: Hercules City Council Chambers – 111 Civic Drive, Hercules, CA 94547 Attend via Zoom Teleconference: Details provided below and zoom webinar login, passcode and phone numbers provided on the agenda cover.

Please note: Updated COVID-19 safety protocols will be posted outside the City Council Chambers. Please review this information before entering the Council Chambers.

How to Submit Public Comments
In Person: Attend meeting at the Hercules City Council Chambers, fill out a public speaker card located on the side table and submit it to the City Clerk.

Via Zoom: Members of the public may submit a live remote public comment via Zoom video conferencing.

Download the Zoom mobile app from the Apple Appstore or Google Play. If you are using a desktop computer, you can test your connection to Zoom by clicking here or go to: https://www.zoom.us/join. Zoom also allows you to join by phone at +1-669-900-6833 or +1-929-205-6099 or +1-253-215-8782. • Speakers will be asked to provide their name and city of residence, although providing this information is not required for participation.
• Each speaker will be allowed up to 3 minutes to speak and provide comment. A limit of 30 minutes will be devoted to taking public comment during the first public comment period on the agenda. If any speaker comments have not been accommodated prior to the initial 30 minute period, time will be reserved at the conclusion of the meeting for the remaining public comments. • Speakers will be muted until their opportunity to provide public comment.

When the Mayor opens the comment period for the item you wish to speak on, please use the “raise hand” feature (or press *9 if connecting via telephone) which will alert staff that you have a comment to provide and press *6 to unmute.

Written Comments Submitted Electronically: All comments received before 3:00 p.m. the day of the meeting will be provided to the City Council prior to the meeting and posted to the City’s agenda website and located by clicking on the “meeting details” tab. Written comments received after 3:00 p.m. will be provided to City Council and posted to the agenda website the following day. Written comments will not be read aloud during the meeting. Email comments to [email protected]. Please indicate which item on the agenda you are commenting on in the subject line of your email.

Written comments submitted in person or via mail: Additional ways to provide your public comment is to either drop off your comment in person to the front desk receptionist located in the City Hall lobby or to mail your comment to City of Hercules, ATTN: City Clerk – Public Comment (Meeting Date), 111 Civic Drive, Hercules, CA 94547 in time to reach the City Clerk no later than 3:00 p.m. on the day of the meeting or you can submit your comment by telephone by calling (510) 799-8215 no later than 3:00 p.m. on the meeting date.

If you need assistance with public comment, please contact: Lauren Berges, City Clerk at [email protected] or by calling (510) 799-8215.

All public comments will become part of the official meeting record. The City cannot guarantee that its network and/or the website will not be uninterrupted. To ensure that the City Council receives your written comments, you are strongly encouraged to submit your comments in writing in advance of the meeting by 3:00 p.m. on the day of the Council or Commission meeting.

6 June 14, 2022City Council Meeting Agenda

OTHER WAYS TO WATCH THE MEETING
Live on Channel 28: City Council meetings will replay the following Thursday at 7:00 p.m. and Saturday at 1:00 p.m.

Planning Commission meetings will replay the following Wednesday at 7:00 p.m. and Saturday at 9:00 a.m.

Video Streamed Live on the City’s Website:

To view City Council and Planning Commission meeting videos online go to: Hercules Meeting Videos.

Instructions to view Live or On-Demand Videos from the City’s website:

1. Go to: Hercules Meeting Videos or https://hercules.legistar.com/calendar.aspx.

2. Locate the desired meeting and date.

3. Click the associated “Video” link (Video status is as follows):

Video = Video is available for on demand viewing.

In Progress = Video is available for viewing during live recording.

Not Available = Video is either unavailable or has not been recorded.

THE HERCULES CITY COUNCIL ADHERES TO THE FOLLOWING POLICIES,

PROCEDURES AND REGULATIONS REGARDING CITY COUNCIL MEETINGS

7 June 14, 2022City Council Meeting Agenda

1. SPECIAL ACCOMODATIONS: In compliance with the Americans with Disabilities Act, if you require special accommodations to participate at a City Council meeting, please contact the City Clerk at 510-799-8215 at least 48 hours prior to the meeting.

2. AGENDA ITEMS: Persons wishing to add an item to an agenda must submit the final written documentation 12 calendar days prior to the meeting. The City retains the discretion whether to add items to the agenda. Persons wishing to address the City Council otherwise may make comments during the Public Communication period of the meeting.

3. AGENDA POSTING: Agendas of regular City Council meetings are posted at least 72 hours prior to the meeting at City Hall, the Hercules Swim Center, Ohlone Child Care Center, Hercules Post Office, and on the City’s website (www.ci.hercules.ca.us),

4. PUBLIC COMMUNICATION: Persons who wish to address the City Council should complete the speaker form prior to the Council's consideration of the item on the agenda.

Anyone who wishes to address the Council on a topic that is not on the agenda and is relevant to the Council should complete the speaker form prior to the start of the meeting. Speakers will be called upon during the Public Communication portion of the meeting. In accordance with the Brown Act, the City Council may not take action on items not listed on the agenda. The Council may refer to staff any matters brought before them at this time and those matters may be placed on a future agenda.

In the interests of conducting an orderly and efficient meeting, speakers will be limited to three (3) minutes.

Anyone may also submit written comments at any time before or during the meeting.

5. CONSENT CALENDAR: All matters listed under Consent Calendar are considered to be routine and will be enacted by one motion. There will be no separate discussion of these items unless requested by a member of the Council or a member of the public prior to the time the City Council votes on the motion to adopt.

6. LEGAL CHALLENGES: If you challenge a decision of the City Council in court, you may be limited to raising only those issues you or someone else raised at the meeting or in written correspondence delivered at, or prior to, the meeting. Actions challenging City Council decisions shall be subject to the time limitations contained in Code of Civil Procedure Section 1094.6.

8 Proclamation of the City of Hercules Honoring June 12th, 2022 as Philippine Independence Day
WHEREAS, on June 12, 2022, the Filipino American community in the United States will have celebrated the 124th anniversary of Philippine Independence, and on this occasion, recognize California’s Filipino American citizens and thank them for their countless contributions to the nation’s cultural, economic, and political heritage; and
WHEREAS, the Philippine Declaration of Independence was enacted on June 12, 1898, in Cavite – Viejo, now known as Kawit, Cavite, Philippines when the Filipino people proclaimed sovereignty and independence from Spain’s colonial rule after winning the Philippine Revolution of 1896; and WHEREAS, on that same day, the first ever Republic in Asia was established as the Republic of the Philippines with General Emilio Aguinaldo as President, and the Philippine Flag and National Anthem officially consecrated and honored; and
WHEREAS, the hard won Philippine freedom was short-lived with the outbreak of the expansionist Spanish American War ending the 1898 Treaty of Paris seceding the Philippines to the United States; and WHEREAS, in defense of their freedom, the Filipino people resisted U.S. domination by waging the Philippine American War; and
WHEREAS, the United States government did not recognize Philippine Independence until the signing of the Treaty of Manila on July 4, 1946, now observed as Philippine-American Friendship Day, while June 12, 1898 was signed into law on August 4, 1964 by President Diosdado Macapagal as Philippine Independence Day; and
WHEREAS, Filipinos have been coming to the United States in large waves of migration and immigration, first as U.S. nationals, then as aliens, then as United States citizens, and have since, built multigenerational and diverse communities; and
WHEREAS, today, there are 4.2 million people of Filipino descent living in the United States; 1.5 million are in California; over 34,000 in Contra Costa County.

WHEREAS, Many of the original families moved from Daly City and San Francisco during the 1970s when the City of Hercules had a housing boom and they invited their relatives and friends to move into the relatively new city of Hercules, where diversity was embraced by all residents; and WHEREAS, on Philippine Independence Day, the Filipino American community remembers the struggles their forefathers suffered to free themselves from foreign oppression and be inspired to seek freedom from all forms of oppression.

NOW, THEREFORE, BE IT PROCLAIMED, that I, Dion Bailey, Mayor of the City of Hercules, on behalf of the entire City Council, do hereby recognize June 12, 2022 as Philippine Independence Day in the City of Hercules and we honor this day with our continued observance of relevant ceremonies, programs, and activities.

In witness whereof, I hereunto set my hand and cause the seal of the City of Hercules to be affixed this 14th day of June, 2022.
________________________________
Dion Bailey, Mayor
9 1

STAFF REPORT TO THE CITY COUNCIL

DATE: Regular Meeting of June 14, 2022

TO: Mayor Bailey and Members of the City Council

VIA: Dante Hall, City Manager

SUBMITTED BY: Patrick Tang, City Attorney
Ben Fay, Special Counsel

SUBJECT: Second Public Hearing Regarding a Possible Charter City Measure

Recommended Action
Staff recommends that the City Council hold the second of two required public hearings regarding a proposed charter for the City of Hercules, which if authorized by the Council, would be placed on the ballot for the November 8, 2022, general election.

Background
The City Council has engaged in a series of discussions at regularly agendized council meetings regarding placing two potential tax measures on the November 8, 2022 ballot for voter approval.

The first measure would be a renewal of the existing Utility Users Tax (UUT), which if not renewed by an affirmative vote of a majority of voters, will expire January 1, 2025. The second measure would be an increase in the Real Property Transfer Tax (RPTT). The Council has directed that staff continue to explore both the UUT and Charter City/RPTT options for possible placement on the November 8, 2022 ballot.

The RPTT. Hercules is a general law city, and only charter cities c an impose RPTT, with voter approval, beyond the statutorily mandated amount for general law cities. In order for the City to seek voter approval for an adjustment to the RPTT, a ballot measure to become a charter city must be approved by the voters at a general election. Prior reports discussing the charter city/RPTT option are provided as attachments to this report.

The process for placing the UUT continuation measu re on the ballot and the process for placing the Charter City/RPTT measure on the ballot are different; in order to place a charter city measure on the ballot, among other requirements two public hearings must be convened. This is the second of the required two public hearings for the Charter City/RPTT measure. 10 2

Discussion
Cities in California are organized as either general law cities or charter cities. The City of Hercules is a general law city. Cities are general law cities by default but may go throu gh a process to become charter cities. A general law city has the authority to exercise its police powers to act locally, but its acts must be consistent with all general laws adopted by the State Legislature. In contrast, a charter city may use its “home rule” authority to adopt local laws regarding “municipal affairs” that vary from, and even conflict with, state laws that apply to general law cities.

“Municipal affairs,” over which charter cities have independent authority and are not bound by the general laws, include the structure of a city’s government, aspects of contracting, and municipal revenues. One charter city power in particular is the ability, with voter approval, to impose a higher Real Property Transfer Tax (“RPTT”) than that mandated by s tate law. An RPTT (also called a Documentary Transfer Tax) is a tax imposed on the transfer of real property in the City. The tax is only collected by the county when a change of ownership is recorded, and the county remits the tax to the City. The tax is imposed as a percentage of the value of the real property being transferred. Under the Revenue and Taxation Code, the maximum rate at which a general law city can impose an RPTT is 0.055%; charter cities , however, are not so restricted , and many charter cities have adopted higher RPTTs under their charter authority. These include Alameda (1.2%), Albany (1.5%), Berkeley (1.5% to 2.5% depending on the value of the property), El Cerrito (1.2%), Emeryville (1.2%), Oakland ($1.5% to 2.5% depending on the value o f the property), Piedmont (1.3%), Richmond (0.7%), and San Leandro (1.1%). See prior staff reports containing additional information regarding which cities have opted to become charter cities, and the amount of RPTT these charter cities are collecting, attached to this report.

There have been several examples in recent years of general law cities seeking to become charter cities in order to increase the RPTT. For example, i n 2014, the City of Emeryville adopted a charter partly in order to increase its RPTT. In fact, it limited its charter authority to municipal revenues, specifically taxation and assessments, and the increase of the RPTT in particular.

The City of Emeryville charter has previously been presented to Council by staff as an example of a Bay Area city that has received voter approval to become a charter city, and can be found in the documents attached to this report . Emeryville’s charter is limited to municipal revenues, with a particular focus on increasing the City’s RPTT. If the decision is made to place a charter city matter on the ballot for November 8, 2022, a n ordinance would also be placed on the ballot that if approved by the voters, would increase the RPTT by the amount specified by the City Council.

The charter measure and the R PTT ordinance could be placed separately on the ballot, as Emeryville did, or they could be combined into one ballot measure, as El Cerrito did.

Charter City Timeline : A city can only adopt a charter with the approval of a majority of the electorate. In order to put a proposed charter on the ballot, the City Council must first hold two public hearings on the proposed charter. There must be at least 30 days between the two public hearings, and at least one of the hearings must be held outside regular business hours. The Council cannot vote on whether to submit the charter to the voters until at least 21 days after the second 11 3

hearing, and the decision to put the charter on the ballot must be made at least 88 days before the election.

Next Steps:

After this second of two required public hearings is completed, the Charter City/RPTT proposal will come back to Council in July for a decision whether to proceed with placing the matter on the ballot, and if so, what the RPTT rate would be. A simple majority vote in the affirmative of the Council is required to place a Charter measure on the ballot. However, an increase to the RPTT would adjust the current R PTT tax rate, and p ursuant to California Government Code Section 53724(b), placing such a tax measure on the ballot requires 2/3 approval by Council. Meeting the statutory 2/3 vote requirement on a five-member council means that four of five council members would have to vote in the affirmative to place the RPTT tax measure on the ballot.

Conclusion
Should the Council direct that staff continue to explore the charter city option, it is recommended by staff that the decision and vote on whether to place the matter on the November 8th, 2022 ballot occurs at one of the regularly scheduled council meetings in July.

Attachment 1: Staff Report from the May 10, 2022 Council meeting, with attachments

12 1

STAFF REPORT TO THE CITY COUNCIL
DATE: Regular Meeting of May 10, 2022
TO: Mayor Bailey and Members of the City Council
VIA: Dante Hall, City Manager
SUBMITTED BY: Patrick Tang, City Attorney
Ben Fay, Special Counsel
SUBJECT: Public Hearing Regarding a Possible Charter City Measure Recommended Action
Staff recommends that the City Council hold the first of two required public hearings regarding a proposed charter for the City of Hercules, which if authorized by the Council, would be placed on the ballot for the November 8, 2022, general election.

Background
The City Council has engaged in a series of discussions at regu larly agendized council meetings regarding two potential tax measur es. The first would be a rene wal of the existing Utility Users Tax (UUT), which if not renewed by an affirmative vote of a majority of voters, will expire January 1, 2025. The second would be an increase in the Real Property T ransfer Tax (RPTT). Hercules is a general law city, and only charter cities can increase the RPTT beyond the statutorily mandated amount for general law cities. In order for the City to increas e the RPTT, a ballot measure to become a charter city must be approved by the voters at a general election. Prior reports discussing the charter city/RPTT option are provided as attachments to this report.

The Council has directed that st aff continue to explore both th e UUT and Charter City/RPTT options for placement on the November 8, 2022 ballot. In order to place a charter city measure on the ballot, among other requirements two public hearings must be convened. This is the first of the required two public hearings.

Discussion
Cities in California are organized as either general law cities or charter cities. The City of Hercules is a general law city. Cities are general law cities by default but may go through a process to become charter cities. A general law city has the authority to exercise its police powers to act locally, but its acts must be consistent with all general laws adopted by the State Legislature. In 
13 2
contrast, a charter city may use its “home rule” authority to adopt local laws regarding “municipal affairs” that vary from, and even conflict with, general state laws. “Municipal affairs,” over which charter cities have independent authority and do not have to follow the general laws, include the structure of a city’s government, aspects of contracting, and municipal revenues. One charter city power in particular is the ability, with voter approval, to impose a higher Real Property Transfer Tax (“RPTT”) than that mandated by state law. An RPTT (also called a Documentary Transfer Tax) is a tax imposed on the transfer of real property in the City. The tax is collected by the county when a change of ownership is recorded, and the county remits the tax to the City. The tax is imposed as a percentage of the value of the real property being transferred.

Under the Revenue and Taxation Code, the maximum rate at which a general law city can impose an RPTT is 0.055%; charter cities, however, are not so restricted, and many charter cities have adopted higher RPTTs under their charter authority. These include Alameda (1.2%), Albany (1.5%), Berkeley (1.5% to 2.5% depending on the value of the pro perty), El Cerrito (1.2%), Emeryville (1.2%), Oakland ($1.5% to 2.5% depending on the value of the property), Piedmont (1.3%), Richmond (0.7%), and San Leandro (1.1%).

In 2014, the City of Emeryville adopted a charter, partly in or der to increase its RPTT. In fact, it limited its charter authority to municipal revenues, specifically taxation and assessments, and the increase of the RPTT in particular. The City of Emeryville charter is being presented by staff as an example of a Bay Area city that has received voter approval to become a charter city.

If the decision is made to place a proposed charter on the ballot for the November 8, 2022 election, a separate measure would also be placed on the ballot that if approved by the voters would increase the RPTT by the amount specified by the City Council. The City could also consider combining the proposed charter and proposed increase in the RPTT into a single ballot measure.

Charter City Timeline
A city can only adopt a charter with the approval of a majority of the electorate. In order to put a proposed charter on the ballot, the City Council must first hold two public hearings on the proposed charter. There must be at least 30 days between the two public hearings, and at least one of the hearings must be held outside regular business hours. The Counc il cannot vote on whether to submit the charter to the voters until at least 21 days after t he second hearing, and the decision to put the charter on the ballot must be made at least 88 days before the election.

Conclusion
Should the Council direct that staff continue to explore the charter city option, the second required public hearing would take place at the June 14th, 2022 Council meeting.

Attachment 1: City of Emeryville Charter Example
Attachment 2: Staff Report from March 8, 2022 Council meeting, with attachments 
14 Attachment 1

CITY OF EMERYVILLE CHARTER

ARTICLE I

NAME AND BOUNDARIES
100. Name and Boundaries
The municipal corporation now existing and known as the City of Emeryville, hereafter referred to as “the City,” shall remain and continue to be a municipal body corporate and politic, as at present, in name, in fact, and in law.

ARTICLE II

POWERS OF CITY
200. Exercise of Constitutional Power of Taxation
The City of Emeryville adopts this Charter to exercise all cons titutional powers conferred on cities under Article XI sections 7 and 5 of the California Constitution sole ly with respect to the powers over municipal affairs in relation to municipal revenues including taxation and assessment, and a system for the imposition, levy and collection of a tax on the conveyance of real property based on the value of the real property in addition to the amount authorized by California Revenue and Taxation Code section 11911. 201. Subject to General Laws
Except as provided in this Charter with respect to the power of the City over municipal affairs in relation to municipal revenues including taxation and assessment, the powers of the City shall otherwise be constrained by, subject to, and governed by the general laws of the State as now and hereafter existing relating to cities organized
under said general laws.
202. Severability
If any provision of this Charter is found by a court of competent jurisdiction to be invalid, the remaining provisions of the Charter shall remain in full force and effect.

ARTICLE III

SUCCESSION
300. Rights and
Liabilities
The City shall remain vested with and continue to have, hold, and enjoy all property, rights of property, and rights of action of every nature and description now pertaining to this municipality, and is hereby declared to be the successor of same. It shall be subject to all the obl igations, contracts, liabilities, debts, and duties that now exist against or with the City.
301. Ordinances, Codes, and Other Regulations
All ordinances, codes, resolutions, regulations, rules, and por tions thereof, in force at the time this Charter takes effect, and not in conflict or inconsistent herewith, sha ll continue in force until repealed, amended, changed, or superseded in the manner provided by this Charter and any other applicable laws. 57 15

302. Pending Actions And Proceedings
No action or proceeding, civil or criminal, pending at the time this Charter takes effect, brought by or against the City or any officer, office, or department thereof, shall b e affected or abated by the adoption of this Charter, or by anything herein contained.

ARTICLE IV

FORM OF GOVERNMENT
400. Form of Government
The form of government shall be that commonly known as the Coun cil -Manager form of government. The
City Council, consisting of five councilmembers elected at large for four year staggered terms, in the manner in effect when this Charter was adopted, shall establish the po licy of the City and the City Manager shall carry out that policy.[]

58 16

REPORT TO THE CITY COUNCIL

DATE: Regular Meeting of March 8, 2022

TO: Mayor Bailey and Members of the City Council

SUBMITTED BY: J. Patrick Tang, City Attorney
Dante Hall, City Manager

SUBJECT: Follow up from February 22 Council meeting – Discussion of Potential Tax Measures: 1) Renewal of the City’s Existing Voter Approved Utility Users Tax (UUT), and 2) Process for Becoming a Charter City for the Limited Purpose of Increasing the Real Property Transfer Tax (RPTT), which is Only Paid by Buyers or Sellers of Real Property

RECOMMENDED ACTION:

Receive report, discuss, provide direction to staff regarding: 1) Extending the City’s existing, voter-approved Utility Users Tax (UUT) beyond January 1, 2025 and, 2) placing a potential charter city measure on the ballot, for the limited purpose of increasing the Real Property Transfer Tax (RPTT).

FISCAL IMPACT OF RECOMMENDATION:

If the Council moves forward with one or more of the proposed ballot measures, costs will be incurred for staff time, consulting, and ballot related expenses.

EXECUTIVE SUMMARY:

Two potential tax measures are discussed in this report. The first is a renewal of the existing Utility Users Tax (UUT), which if not renewed by an affirmative vote of a majority of voters, will expire January 1, 2025. The second is an increase in the Real Property Transfer Tax (RPTT). Hercules is a general law city, and only charter cities can increase the RPTT beyond the statutorily mandated amount for general law cities. In order to increase the RPTT, the Council must place a ballot measure before the voters at a general election to become a 59 Attachment 2
to 5/10/22 report
17 charter city for that limited purpose. The Council has directed that both options be considered for placement on the November 8, 2022 ballot.

BACKGROUND:

At the February 8, 2022 Council meeting, the City’s consultants, the Lew Edwards Group and FM3 Research (“Consultants”), provided polling results related to extending the existing Utility Users Tax (UUT) currently set to expire in January 2025, and the viability of becoming a Charter City for the limited purpose of increasing the Real Property Transfer Tax (RPTT) (Attachments 1 and 2). After receiving the presentation and after a discussion of options, the Council declined to move forward with a ballot measure in June 2022 for renewing the UUT (this would have required the adoption of a fiscal emergency declaration by a unanimous vote of the Council), and instead directed that staff work with Consultants to determine the viability of placing on the November 2022 ballot:

1) A measure to renew the existing, voter-approved UUT, which if not continued would expire in January 2025; and

2) A measure to become a Charter City for the limited purpose of increasing the RPTT; and

3) In conjunction with 2 above, approval of an ordinance increasing the RPTT to an as yet unspecified amount above the current statutory amount of $0.55 per $1,000 of property value.

The direction from Council to explore the placement of all of the ab ove measures on the November ballot necessitates retention of one or more consultants for additional polling and survey work. At the February 22, 2022 Council meeting, staff presented Council with a contract extension for Lew Edwards and FM3 Research to undertake the work required to determine the viability of placing both the UUT and City Charter/RPTT measures on the November ballot. The Council had a number of questions regarding both of the proposed measures, and agreed to defer action on approval of additional funding for Consultants until the Council could first have additional discussion at tonight’s meeting regarding both the UUT and City Charter/RPTT matters.

DISCUSSION:

What is the UUT? The Utility Users Tax (UUT), pursuant to Title 8, Chapter 8 of the Hercules Municipal Code, is a tax approved in two different elections by Hercules voters and collected by the service provider on the use of various utilities by Hercules residents, covering telecommunications, electricity, natural gas, water, and video service usage. The 60 18
UUT is currently assessed at 8%, and the UUT will expire on January 1, 2025. The City receives approximately $3.5 million a year from the UUT.

The City is a lean organization and has not fully recovered from the staff and budgetary cuts necessitated by the Great Recession. With the dissolution of the redevelopment agency in 2012 by Sacramento, the City has lost a si gnificant funding source for funding capital improvements. In FY 2011, the City reduced its workforce by 30% and made significant service cuts to bring expenditures in line with its revenues. The attached chart identifies the changes in the number of full-time employees from FY 2011 through FY 2020 (Attachment 3). While these changes saved the City from near bankruptcy, it did not cure the long-term structural deficit, nor contemplate a plan for financial sustainability.

The City relies on UUT proceeds to fund a wide range of services including maintenance of public properties, staffing, and providing for public safety. If the UUT is allowed to expire in January 2025 without being continued, the loss of approximately $3.5 million a year in revenue would drastically impair the City’s ability to provide even a minimal level of service. If we are required to make budget cuts that may include police and neighborhood patrols, street maintenance, parks, senior services, youth programs, and economic development, we risk a decline in our quality of life.

What is the RPTT? The Real Property Transfer Tax (RPTT), pursuant to Title 8, Chapter 3 of the Hercules Municipal Code, is an existing tax collected by the County Clerk-Recorder which is only paid by buyers or sellers of real property. It is imposed on each deed, instrument or writing by which any land or other realty sold within the City of Hercules is granted, assigned, transferred or otherwise conveyed to any other person or persons, at the rate established by state law for general law cities of $1.10 for each $1,000 of property value.

The tax proceeds received are split, with $.055 per $1,000 going to the County, and the $.055 per $1,000 going to the City. The amount of RPTT the City received in 2021 for all properties sold during that year was a total of $120,000.00.

To increase the RPTT, a general law city must become a charter city. To become a charter city, a general law city must receive voter approval via a ballot measure. Becoming a charter city requires approval by a simple majority of voters at a general election. Other East Bay/Bay Area cities such as Alameda, Albany, Berkeley, El Cerrito, Emeryville, and Hayward have taken this step to expand their authority to collect a larger percentage of these transactions. If the City increases its share of RPTT in this manner, the County would continue to receive $0.55 per $1,000 of property value, but the City would retain the rest of the amount authorized by the tax measure.

At the February 22 meeting, the questions and comments by Council included:
61 19

x Can the UUT be renewed at a higher rate than the current 8%? How about 9% or 10%?

Answer: Yes. The UUT can be set higher than the current 8% rate; however, the polling to date by Consultants did not contemplate an increase to the current UUT rate of 8% and an increase might poll significantly differently from a renewal with no rate increase. Every increase of 1% of UUT would result in additional revenue of approximately $437,500 based on current UUT revenue of approximately $3.5 million a year.

x Should Consultants be provided a specific amount or a range of potential RPTT amounts prior to undertaking additional polling of voters?

Answer: Yes. To fully understand public sentiment of a potential RPTT increase, Council direction on a tax rate range (a low and high dollar amount) would be important to establish prior to polling, so consultants can test that range. Depending on feedback from the polling results, the Council would be able to select a viable RPTT tax me asure amount for placement on the November 2022 ballot.

x How have other cities determined the amount of RPTT increase to be sought?

Answer: Most of the cities surveyed have established an increased RPTT rate based in large part on a projection of future need. For example in the case of Emeryville in 2014, which is 95% inside a redevelopment area, the amount of RPTT to be collected, $12 per $1,000 of property value, was calculated based on h ow m u c h f u n d i n g f o r b u d ge t a n d c a p i ta l i m p ro vem en ts w a s l o s t a s a result of redevelopment dissolution, and how much funding would be needed for additional critical capital improvements.

As a point of reference, the chart below identifies the base RPTT rates applied in nearby charter cities. The median tax rate selected by these cities is $12 per $1,000 of property value. The RPTT rate for all charter cities in California has been previously reported and is included in the agenda materials from past Council reports, attached to this report (Attachment 4).

62 20

CITY CITY TAX (PER

THOUSAND DOLLARS)
Alameda $12.00
Albany $15.00
Berkeley $15.00
El Cerrito $12.00
Emeryville $12.00
Oakland $15.00
Piedmont $13.00
Richmond $7.00
San Leandro $11.00
Median $12.00

For Hercules, General Fund expenditures are projected to increase at the estimated rate of 3% a year. Expenditure projections for a 5-year forecast period through 2027 range from $16.8 to $18.6 million assuming the current service levels are preserved. A structural deficit of approximately $2 million will begin in FY 24-25 without additional revenue streams and if the UUT is not renewed beyond its January 2025 expiration date (Attachments 5 and 6).

This forecast does not include the fut ure expectations of the Council and citizens regarding the potential for expanded service levels and public infrastructure needs and improvements.

As mentioned above, in 2011 the City made significant service cuts in the attempt to bring expenditures in line with its revenues. Even if an extension of the UUT at its current rate of 8% were approved by the voters, an additional $3 million annually would still be need ed to restore City services to pre- recession levels (or FY 2011) (Attachment 7) .

Should Hercules become a charter city and increase its RPTT, the revenue comparison chart below shows the annual revenue that would be received using the average annual RPTT amounts received for Fiscal Years 2014-2019:

Tax Rate $0.55/1,000 $4/1,000 $8/1,000 $12/1,000 $16/1000 Estimated
Annual Revenue $115K $838K $1.6M $2.5M $3.3M

Therefore, curing the structural deficit projected to begin in FY 24-25 and restoring prior service levels to meet community demand would require a 63 21
renewal of the UUT at its current 8% rate, and an additional $3 million annually. Given the staff shortages in the Public Works Department (Attachments 8, 9 and 10), the current lack of a dedicated code enforcement unit, understaffing in the Planning Department, and the perceived need to increase public safety expenditures to meet future needs resulting from a projected increase in 1,509 resident ials units (Attachment 11), staff recommends that Consultants be directed to poll voters regarding the Charter City/RPTT proposal based on a range from $8 to $16 per $1,000 to achieve the revenue amounts illustrated in the above table.

x What is the timeline for each of the proposed measures?

UUT: A proposed measure to continue the UUT must be submitted at least eighty-eight (88) days before the November 8, 2022 election. The City Council would need to vote on submi ssion of the ballot measure no later than the August 9, 2022 council meeting.

Charter City/RPTT:

Prior to approving submission of the charter to the voters, the City Council must hold at least two public hearings on the proposal of the charter and the content of the charter, and notice of those hearings must be published at least twenty one (21) calendar days before the date of each hearing. The second public hearing must be held at least thirty (30) days after the first hearing, and at least one of the hearings must be held outside of normal business hours.

The City Council may not vote on submission of the charter to the voters until twenty one (21) days after the second public hearing. A charter proposal can only be voted on at a regular general election, absent a declaration of a fiscal emergency. In order for the City Council to place a charter measure on the ballot for November 2022, the City would need to adhere to the following timeline:

The City Council must vote to submit the proposed charter to the voters at least eighty-eight (88) days before the election, and hold at least two public hearings.

City Council holds first public hearing on proposed charter May 10, 2022
Notice of the hearing must be given 21 days in advance

City Council holds second public hearing on proposed charter 64 22
June 14, 2022
Must occur at least 30 days after first public hearing

City Council votes on submission of the proposed charter to the voters no later than August 9, 2022.

Election Date: November 8, 2022

CONCLUSION:

Staff seeks further direction from Council regarding the proposed tax measures discussed in this report.

Attachments:

1. February 8, 2022, Staff Report - Polling Results Related to Extending the Existing Utility Users Tax and the Viability of Becoming a Charter City

2. February 4, 2022, Summary Report of January 2022 Community Survey Results

3. Changes in Full-Time Equivalent City Government Employees by Function Last Ten Years

4. February 25, 2020, Staff Report - Process for Becoming a Charter City

5. January 25, 2022, Staff Report - Long-Term Financial Projection

6. FY 21-22 General Fund Five-Year Financial Forecast

7. Estimated Cost to Restore City Staffing Levels to Pre-recession Levels

8. March 23, 2021, Staff Report - Public Works Department Organizational Review and Analysis

9. March 23, 2021, City Council Presentation - Public Works Department Organizational Review and Analysis

10. March 23, 2021, Final Report - Public Works Department Organizational Review and Analysis

11. Summary of Built and Approved Residential Units as of February 28, 2022

65 23

REPORT TO THE CITY COUNCIL
DATE: Regular Meeting of February 8, 2022
TO: Mayor Kelley and Members of the City Council
SUBMITTED BY: Dante Hall, City Manager
SUBJECT: Report on Polling Results Related to Extending the Existing Util ity Users Tax and the Viability of Becoming a Charter City for the Limited Purpose of Increasing the Real Estate Property Transfer Tax RECOMMENDATION ACTION:

Staff recommends that the City Council:

1. Receive the report from the Lew Edwards Group and direct staff to proceed with planning for the placement of the Utility Users Tax measure on the City’s regularly scheduled Municipal Election in November of 2022, or

2. Provide alternate direction
FISCAL IMPACT:

There is no fiscal impact to receiving this report. Based on th e Council’s direction, staff will return to the Council to request additional funds.

EXECUTIVE SUMMARY:

In October of 2021, the City awarded a contract to the Lew Edwards Group, and FM3 Research to determine the public opinion of registered voters regarding 1) the feasibility of going to the voters in November 2022 or November 2024 to extend the existing Utility Users Tax (UUT) prior to its expiration on January 1, 2025, and 2) the viability of becoming a charter city for the limited purpose of increasing the Real Property Transfer Tax (RPTT). 66 Attachment 1 to
3/08/22 staff report
24 Lew Edwards and FM3 Research have completed the public opinion survey and will be making a presentation about their findings and recommendations related to the UUT and RTTP initiatives (ATTACHMENT 1).

BACKGROUND AND ANALYSIS:

At its May 25 th, 2021 meeting, the Council engaged in a discussion regarding the feasibility of becoming a charter city for the limited purpose of increasing the real Property Transfer Tax, the Council requested that the Charter City/RPTT item come back for additional discussion and further directed that a companion report be prepared regarding the need to extend the UUT which will otherwise expire on January 1, 2025.

The City of Hercules relies on the UUT to provide sufficient ongoing revenues to sustain current levels of service. The UUT sunsets January 1, 2025 and is estimated to generate a projected $ 3.5 million in revenue in the fiscal year which ends June 30, 2022. Without these revenues, the city would not be in the position to continue to provide the services important to our community even at the current reduced level. While there has been some improvement in revenues overall, Hercules still receives a low share of the property taxes compared to other cities in Contra Costa County, and its retail tax base while largely weathering the effects of Covid-19 is not significant enough to support current service levels without the UUT.

Attachments:

1. Summary Report of January 2022 Community Survey Result

2. January 2022 Community Opinion Survey Questions

3. November 9, 2021 Staff Report – Lew Edwards Group award of contract

4. Resolution

5. Election Opinion Poll Services
67 25
To: Hercules City Manager Dante Hall

From: Lew Edwards Group and FM3 Research

Date: February 4, 2022

Re: Summary Report of January 2022 Community Survey Results

INTRODUCTION

Together with City Executive Staff, Lew Edwards Group (LEG) and FM3 Research (FM3) designed an updated 2022 City of Hercules Community Survey to evaluate customer satisfaction, resident priorities for services, and community interest in potential local funding measures.

Survey interviews were conducted by FM3 January 3-17 th. LEG/FM3 is pleased to report 324 completed interviews, which is more than the 245 respondents w illing to respond in the last survey conducted in the City in 2015. The Margin of Error on the full sample is +/- 5.4% at the 95% confidence level.

VIEWS OF THE CITY

Having served the City’s sustainability needs over the course of the past decade, LEG/FM3 have a unique view on how resident perspectives have evolved over time.

2022 survey respondents clearly view life in Hercules through a more positive lens. Today, those who say things are off on the wrong track are at a record low, and 56% of respondents feel the City is headed in the “right direction” -- a 25 point increase from when we started our collaboration with the City in 2012.

A majority of respondents feel the City is doing an “excellent” or “good” job providing services, and a plurality believe the City is doing a good job managing its budget and finances. At the same time, perceptions of city inefficiency and corruption have continued to steadily decline since 2012, with perceptions of corruption, cronyism, waste, or inefficiency dropping from a high of 63% in 2012 to 24% today.

While confidence has softened since our 2015 collaboration, it is st ill stronger than many other cities are currently experiencing and is likely due to the uncertain COVID times. This is a testament to City leadership’s hard work during these trying times.
68 Attachment 2
to 3/08/22 staff report
26 MEASURE VIABILITIES

There were three measures evaluated in the 2022 study.

Renewal of Existing Voter-Approved UUT, with No Increase in Tax Rate

The City is in a strong position to renew its existing, voter-approved utility users tax (UUT) measure in November 2022. The following ballot question (reviewed and approved by the City Attorney) was tested three times in the study:

CITY OF HERCULES NO TAX INCREASE/FINANCIAL STABILITY MEASURE: Shall an ordinance to maintain Hercules’ long-term financial stability and essential city services, such as neighborhood police patrols; crime prevention; street and pothole repair; and youth and senior programs, by renewing an existing, voter-approved 8% utility users’ tax, generating approximately $3, 600,000 annually until ended by voters, with no tax increase, low -income exemptions, independent citizens’ oversight, annual audits, and funding that cannot be taken by Sacramento, be adopted?

This simple majority requirement measure begins with a 67% viability threshold on the first ballot test, stays consistent at 69% on the second test, and remains at 66% on the final, third ballot test. As there is no statistical difference in these percentages, this measure is strongly supported by respondents and remains remarkably consistent through the entire progression of the survey.

Based on this evaluation, LEG/FM3 recommend the City proceed with planning for placement of this measure on the City’s regularly scheduled Municipal Election.

City Charter Measure

Each of the two following measures were tested once in the study:

CITY OF HERCULES CITY CHARTER/LOCAL CONTROL MEASURE. To enhance local control over funding essential city services, shall the City of Hercules Charter be adopted to establish Hercules as a Charter City with the ability to adopt a local real property transfer tax, subject to voter approval? The City Council’s powers otherwise remain unchanged and are limited by State general law, and any other powers as a charter city would have to be approved by voters. Do you think you would vote “yes” or “no” on this measure?

This simple majority-requirement Charter measure receives 39% support. While this percentage is not unusual for other LEG cities who have enacted similar measures, it bears noting that in Hercules's case, the percentage opposition to this measure is also 39%, which is far higher than in our other successful cities. The percentage of undecideds are therefore much lower in Hercules (around 20%) than in other successful jurisdictions.

69 27
Based on the community’s current reaction to this measure LEG/FM3 advise a longer runway of preparation for the 2024 election cycle to provide time for the City to educate the community about this measure concept if desired.

Real Property Transfer Tax (RPTT) Measure

The following companion revenue measure to the Charter Measure was also tested once in the survey:

CITY OF HERCULES ESSENTIAL SERVICES PROTECTION MEASURE. Shall an ordinance to expand locally controlled funding for essential city services such as improving 911 response times, disaster preparedness/ safe routes to school; retaining/ attracting businesses; keeping public areas/ parks safe/ clean; by enacting a real property transfer tax (paid only by buyers and sellers of property at the time of sale), until ended by voters and requiring annual audits, no funds for Sacramento, be adopted?

The test of this simple majority-requirement companion RPTT measure is at 53% which is within the MOE for the survey. As this type of funding mechanism is reliant on the companion Charter Measure being adopted, as noted above, deferring consideration of this measure package until 2024 is strongly advised due to the relatively low scoring reactions to both at this time.

TOP SCORING COMMUNITY PRIORITIES

An extensive battery of City services/objectives was evaluated in the study. The following seven services/objectives scored the most intensively and highly:

ƒ Maintaining long-term financial stability - 88%
ƒ Preventing funds being taken by Sacramento - 87%
ƒ Meeting water quality health standards - 86%
ƒ Maintaining fiscal accountability - 86%
ƒ Maintaining 911 response times - 85%
ƒ Keeping public areas and parks safe and clean - 84%
ƒ Keeping funds local - 81%

INFORMATIONAL STATEMENTS

The following paraphrased informational facts resonated most strongly and effectively with survey respondents.

Budget Implications: Without this funding, the City will lose $3.6 million every year, which is over 20% of the City's budget. The City may have no choice but to slash basic city services just to balance its budget, including police and neighborhood patrols, street maintenance, parks, senior services, youth programs, economic development, and others.

70 28
Maintaining Local Public Safety Services : Measure C has maintained police services. If it is not renewed, the City will be forced to seriously consider major cuts to our police department, which could impact crime prevention and 911 response times.

Quality of Life: Hercules is a place where people desire to live and raise families. If the City is forced to continue cutting basic city services, the character of our community and its quality of life will decline. Renewing local funding helps protect and maintain essential City services that make our community a safe, well-maintained place to live.

Finally, it bears noting that the study found that virtually half of Hercules respondents were concerned about the amount they were paying in utilities -- viewing it as an “extremely” or “very” serious problem. In these uncertain COVID times LEG/FM3 would caution the City about over- reaching to consider any increase or changes to the actual UUT rate. These results show your constituents clearly value maintaining existing voter-approved funding for the City’s long-term fiscal stability with no tax rate increase, but do not speak to the viability of a potential increase in the rate.

RECOMMENDATIONS/NEXT STEPS

Educating and engaging your residents around the City’s budget, service needs and local priorities is vital to maintaining measure viability. LEG/FM3 recommend the City educate and engage the community during the upcoming budget process to collect more input and keep the public updated on your challenges.

As in past collaborations with the City, LEG’s recommended Public Information toolkit will include the following:

ƒ Informational Speakers’ Bureau: City staff should visit those organizations in-person or through their scheduled online meetings to solicit feedback and provide information, which was highly effective and well-received by the community in past collaborations.

ƒ Opinion Leader Communications and Outreach: Communicating the results of this survey provides the City with an opportunity to engage opinion leaders and expand the conversation with high-level leaders.

ƒ Website/Newsletters/Social Media: Facts and information about the City’s financial condition should be placed on the City’s website, Facebook Page and Twitter feed. LEG will be recommending an E-Update & Social Media Plan to engage the public, get more feedback, and provide information.

ƒ Media Response & Earned Media: Any opportunity to respond to the media should be treated with high importance and an opportunity to share information with the community.

ƒ City Newsletter: Producing and mailing printed City Newsletters are recommended to engage and inform the Community about City service needs and priorities. While the Speakers’ 71 29
Bureau and Opinion Leader letters are extremely effective forms of communication, direct mail remains one essential component of a comprehensive, multi-disciplinary communications plan especially for seniors.

ƒ Citizens Advisory Committee engagement: In LEG/FM3’s past collaborations with the City, the Hercules Citizens Advisory Committee has always been involved as a highly credible community messenger, and we look forward to collaborating with the Committee again.

THUMBNAIL TIMELINE IF PREPARING FOR A NOVEMBER 2022 PLACEMENT

LEG/FM3 are looking forward to finalizing a graph presentation of Community Survey highlights for presentation to the City Council on February 8th. The following is a thumbnail outline of the timetable and key activities if planning for a November 2022 measure:

February – May: Update City Council, authorize continued project planning Engage Influentials and Community at Large
Solicit additional community feedback, report back to public Utilize budget consideration/adoption engagement and
messaging opportunities

June – July: Prepare ballot measure documents
Place measure on Municipal Election ballot

August – November: Submit ballot measure documents to County ROV Develop Municipal Election Communications Toolkit
Provide Municipal Election/Measure Information to public Thank the community for participating

November – December: Evaluate 2022 activities
If desired, commence assessment, planning and engagement for charter/RPTT activities

72 30
City of Hercules
Full-Time Equivalent City Government Employees by Function Last Ten Fiscal Years
For the Fiscal Year Ended June 30, Compared to
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 FY 2011 % Function
General Government 12.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 11.00 (1.00) -8% Public Safety 29.00 26.00 23.00 24.00 24.00 24.00 24.00 26.00 26.00 28.00 (1.00) -3% Public Works (a) 14.00 18.00 14.00 13.00 11.00 11.00 11.00 11.00 11.00 11.00 (3.00) -21% Community Development 5.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 (3.00) -60% Parks and Recreation 9.00 6.00 4.00 4.00 4.00 4.00 4.00 4.00 4.00 4.00 (5. 00) -56%

69.00 62.00 53.00 53.00 51.00 51.00 51.00 53.00 53.00 56.00 (13.00) -19% Housing Authority (b) 3.00 3.00
Total 72.00 65.00 53.00 53.00 51.00 51.00 51.00 53.00 53.00 56.00 (13.00) NOTE:
(a) Public Works includes Wastewater and Solid Waste
(b) The Housing Authority became a separate legal entity during Fiscal Year 2011-12 Source: City of Hercules Operating Budget
0 10
20 30
40 50
60 70
80 FTE's
General Government Public Safety Public Works (a)
Community Development Parks and Recreation Housing Authority (b) 73 Attachment 3 to
3/08/22 staff report
31 1

REPORT TO THE CITY COUNCIL

DATE: Regular Meeting of February 25, 2020
TO: Mayor Esquivias and Members of the City Council

SUBMITTED BY: J. Patrick Tang, City Attorney
David Biggs, City Manager

SUBJECT: Process for Becoming a Charter City for the Purpose of Increasing the Real Property Transfer Tax (RPTT)

RECOMMENDED ACTION:

Receive report, discuss, and provide direction, if any.

COMMISSION/SUBCOMMITTEE ACTION AND RECOMMENDATION:

There was no commission or subcommittee review of this item.

FISCAL IMPACT: There is no direct cost associated with the preparation of this report. Future steps of considering a ballot measure, including possible polling, prepa ring a proposed charter, undertaking the process to place the measure on the ballot, and conducting an e lection, would all incur costs. The exact amount of the impact would depend on what type of community eng agement the Council would want.

Any process would involve staff and city attorney time. If a ballot measure were approved by the voters, Hercules would see an increase in RPTT revenue. The amount of i ncrease would depend upon the RPTT rate set by the City; various estimates are provided in the Rev enue Rate Comparison Table, see page 4.

However, it is uncertain whether voters would approve an increased RPTT.

BACKGROUND: At its January 14, 2020 regular meeting, the City Council direc ted the city attorney and staff to prepare a report for Council information regarding the process for becoming a charter city, for the limited purpose of setting real property transfer tax (RPTT) ra tes beyond the rate set by state law for general law cities.

DISCUSSION: Cities in California are organized as either general law citi es or charter cities. The City of Hercules is a general law city. Cities are general law cities by default, but may go through a process to 74 Attachment 4 to
3/08/22 staff report
32 2

become charter cities. A general law city has the authority to exercise its police powers to act locally, but its acts must be consistent with all general laws adopted by the State Legislature. This is why general law cities are “locked in” to receiving a real property transfer tax (RPTT) rate of $0.55 per $1,000 as set by the state. In contrast, a charter city may use its “home rule” authority to adopt local laws regarding “municipal affairs” that vary from state laws, so that a charter city has more control over local affairs than a general law city. A significant authority possessed by charter cities is the authority, with voter approval, to impose a higher RPTT rate. Charter law cities are not subject to state law regarding RPTT because the setting of RPTT rates is deemed a municipal affair. As a result, charter cities may impose RPTT at a rate higher than the maximum statutory rate otherwise received by general law ci ties. A list of all California general law and charter cities, along with their respective RPTT rates, is provided as Attachment 1.

There are other reasons why a general law city may seek to become a charter city other than to set RPTT rates, including but not limited to changing the number of elected officials, establishing district elections, and providing for a strong mayor form of government (see Attachment 2), but given Council’s direction to limit the discussion to becoming a charter city for the sole purpose of adjusting RPTT rates, other reasons for becoming a charter city are not discussed in this report. A n example of the type of limiting language that can be included in a charter to restrict the scope of local authority to setting the RPTT rate is provided below:

“The City may exercise the powers of a charter city to generate revenue by imposing a tax on the conveyance of real property, based upon the price paid for the real property ("real property transfer tax"). Any real property transfer tax imposed by the City shall be in addition to any similar tax authorized by the general laws of the State of California. Except as provided in this Charter, the powers of the City shall otherwise be constrained by, subject to, and governed by the general laws of the State as now and hereafter existing relating to cit ies organized under such general laws.“

It should be noted that, while other governance changes may not be in consideration as part of the approval of an initial charter, charter city status does expand the possible universe of both council and voter-initiated changes to governance and other matters via the electoral process that may otherwise not be possible as a General Law City. However, once a charter is adopted by the voters, it can only be changed by an affirmative vote of a majority of the electorate. And, on ce a RPTT rate has been approved by the voters, as a general tax it cannot be changed without receiving the affirmative vote of a majority of the electorate. In other words, the Council could not change the charter without voter approval, nor could the Council change the RPTT rate without voter approval.

What is RPTT? The real property transfer tax (RPTT) applies to transactions involving the sale and purchase of all improved property with homes or commercial structures, a nd all unimproved land with no structures. The tax is paid when ownership transfers from the s eller of the property to the purchaser of the property. Generally, the tax can be paid by either the seller or the purchaser, or the tax can be shared between the seller and the purchaser. It is a one-time expense related to the transfer of ownership, and is unrelated to the annual payment of property taxes. Currently under the California Revenue and Taxation Code, property in general law cities when it is sold is assesse d a county transfer tax of $1.10 for every $1,000 of the real estate’s sales price. Counties then split th at tax with the cities, so that the city where 75 33
3 the sale took place receives $0.55 for every $1,000 of sale price. Hercules thus currently receives an RPTT of the maximum allowed for general law cities of $0.55 per $1,000 of value.

Recently a number of general law cities have utilized the legal process to become charter cities for the limited purpose of setting RPTT rates beyond the baseline rate of $0.55 per $1,000 established for general law cities.1 Under State law and the California Constitution, cities cannot impose, increase or extend any tax unless the tax is approved by the voters. Accordingly, a me asure to become a charter city, and an increase to the RPTT, would require voter approval by a simple majority of the electorate.

How much does the property buyer pay? Property owners/sellers in general law cities in California p ay a RPTT of $1.10 per thousand dollars of sales price or $275 on a $250,000 property sale; by way of example, that means $550 on a $500,000 property sale; $825 on a $750,000 property sale, and; $1,100 on a $1,000,000 property sale. The RPTT amounts above are split between the county and the city, so that the city receives half. Should the City become a Charter City a nd enact a higher RPTT, the full $1.10 per thousand provided for under State law would go to the County, a nd the City rate authorized under the Charter would be in addition to the base $1.10 per thousand tha t the County would receive. The local increase to the RPTT is essentially a local tax measure; unlike the property tax where the City gets back less than 4 cents per dollar, all of the additional RPTT amount would flow to the City, with none of it going to the State and the County receiving only the statutory allocation of $1.10 per $1,000.

The table below shows the RPTT paid under the General Law city provisions now in effect, and four additional illustrations on what a possible Charter City rate w ould impose. As you can see, under the charter city examples, the amount that goes to the County remains the same, regardless of the RPTT rate set by the City:

TAX RATE COMPARISON TABLE

Gen. Law RPTT
$1.10/1,000

Charter RPTT
$4/1,000
Charter RPTT
$8/1,000
Charter RPTT
$12/1,000
Charter RPTT
$16/1,000
Property Sale
Price
City/County City/County City/County City/County City/County $250,000 137.50/137.50 1,000/275 2,000/275 3,000/275 4,000/275 $500,000 275/275 2,000/550 4,000/550 6,000/550 8,000/550 $750,000 412.50/412.50 3,000/825 6,000/825 9,000/825 12,000/825 $1,000,000 550/550 4,000/1,100 8,000/1,100 12,000/1,100 16,000/1,100

1 Six cities attempted to increase their RPTT rates at the 2018 general election. Voters in five of the six cities approved the RPTT increases. Two of the cities, El Cerrito and Union City, were general law cities that sought to become charter cities for that limited purpose; El Cerrito voters approved becoming a charter city and increasing their RPTT to $12.00 per thousand, while Union City voters did not approve a similar measure. Emeryville became a charter city to increase RPTT rates in 2014.
76 34
4 By way of comparison, a Hercules resident who buys a $25,000 au tomobile in Contra Costa County pays $2,187.50 in sales tax, based on the current 8.75% tax rate, of which the City receives $375.00. How much additional revenue would the city receive if the city adopted a n increase to the RPTT ? The amount of additional revenue would depend on what RPTT rate was selected. Below is a chart showing the annual revenue that would be received using the average annual RPTT amounts received by Hercules for Fiscal Years 2014-2019 ($115,248), and based on a range of RPTT rates:

REVENUE RATE COMPARISON TABLE

$0.55/1,000 $4/1,000 $8/1,000 $12/1,000 $16/1000
City County City County City County City County City County $115K $115K $838K $230K $1.6M $230K $2.5M $230K $3.3M $230K

What is the process for becoming a charter city?
Becoming a charter city requires approval by a simple majority of voters. Prior to approving submission of the charter to the voters, the City Council must hold at least two public hearings on the proposal of the charter and the content of the charter, and notice of those hea rings must be published at least twenty one (21) calendar days before the date of each hearing. The sec ond public hearing must be held at least thirty (30) days after the first hearing, and at least one of the hearings must be held outside of normal business hours. The City Council may not vote on submission of the charter to the voters until twenty one (21) days after the second public hearing. A charter proposal c an only be voted on at a regular general election, absent a declaration o f a fiscal emergency. In order for the City Council to place a charter measure on the ballot for November 3, 2020, the City would need to hold the first formal public hearing on a proposed charter at the first meeting in May 2020.

An increased RPTT is not itself established by the charter. Rat her, the RPTT would be established by a separate ordinance submitted simultaneously to the voters. The ordinance would include the RPTT rate along with other administrative rules. Since the draft charter would prohibit the City from exercising any of the powers of a charter city except for the enactment of an increased RPTT, becoming a charter city and the transfer tax are inextricably linked.

It is common for cities looking to adopt a charter to launch a community engagement process to inform the public about what becoming a charter city would entail and receive feedback prior to placing a charter measure on the ballot. Because becoming a charter city is a com plicated issue that can easily cause confusion, it is strongly recommended that if the Council decid ed to try and become a charter city that communications professionals be retained to help explain to the public what becoming a charter city entails.

If the Council wished to explore this further, it would want to make some preliminary decisions about the RPTT, such as the proposed rate, before beginning the community engagement process. In addition, the need to renew the expiring existing Utility Users base rate and override by no later than 2024 or 2025, should be considered. These and other factors could also be assessed by undertaking polling to determine 77 35
5 the voter’s reactions to a number of possible options. This would normally be one of the first steps before deciding to place a matter on the ballot. The City last undertook polling in 2015 prior to opting to place a measure on the ballot to renew the sales tax override, and the measure was crafted based on the information garnered from professional polling.

Ultimately, the Council would have the ability to make changes and adjustments prior to submitting the measure to the voters, based on feedback received during the en g a g e m e n t p r oc e s s a n d u p on f u r t h e r review.

Possible options for community engagement could include all or some of the following:

• Conduct polling to gauge community interest before placing th e measure on the ballot. This could include both scientific and unscientific polling; or • Appoint a community committee to make recommendations regarding the draft charter and RPTT;
• Conduct official town hall meetings to provide information ab out the charter and RPTT to the community, as well as allow an opportunity for the public to as k questions and the Council to receive feedback;
• Mail information including FAQs to residents about becoming a charter city.

The above list of community engagement options is non-exhaustiv e and is intended only as an example of possible types of outreach. The more extensive the outreach, the more community feedback can be expected, but there would be a greater increase in staff time and costs to implement.

SUMMARY CONCLUSION: Becoming a charter city is an option that a number of general law cities have pursued, for varying reasons. Most recently, cities that have placed charter city measures on the ballot have done so primarily to allow local control over the setting of RPTT rates, and have opted to expressly exclude additional powers that are otherwise available to charter cities.

ATTACHMENTS:

1. RPTT Rates Statewide

2. League of California Cities Summary

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94 52
General Law City v. Charter City
Characteristic General Law City Charter City
Ability to Govern
Municipal Affairs
Bound by the state’s general law, regardless
of whether the subject concerns a municipal
affair.

Has supreme authority over “municipal
affairs.” Cal. Const. art. XI, § 5(b).

Form of Government State law describes the city’s form of government For example, Government
Code section 36501 authorizes general law
cities be governed by a city council of five
members, a city clerk, a city treasurer, a
police chief, a fire chief and any subordinate
officers or employees as required by law.

City electors may adopt ordinance which
provides for a different number of council
members. Cal. Gov’t section 34871. The
Government Code also authorizes the “city
manager” form of government. Cal. Gov’t
Code § 34851.

Charter can provide for any form of
government including the “strong mayor,”
and “city manager” forms. See Cal. Const.
art. XI, § 5(b); Cal. Gov’t Code § 34450 et
seq.

Elections Generally Municipal elections conducted in accordance with the California Elections Code. Cal. Elec.

Code §§ 10101 et seq..

Not bound by the California Elections Code.

May establish own election dates, rules, and
procedures. See Cal. Const. art. XI, § 5(b);
Cal. Elec. Code §§ 10101 et seq..

Methods of Elections Generally holds at-large elections whereby voters vote for any candidate on the ballot.

Cities may also choose to elect the city
council “by” or “from” districts, so long as the
election system has been established by
ordinance and approved by the voters. Cal.

Gov’t Code § 34871. Mayor may be elected
by the city council or by vote of the people.

Cal. Gov’t Code §§ 34902.

May establish procedures for selecting
officers. May hold at-large or district
elections. See Cal. Const. art. XI, § 5(b).

City Council Member
Qualifications
Minimum qualifications are:

1. United States citizen

2. At least 18 years old

3. Registered voter

4. Resident of the city at least 15 days
prior to the election and throughout
his or her term

5. If elected by or from a district, be a
resident of the geographical area
comprising the district from which he
or she is elected.

Cal. Elec. Code § 321; Cal. Gov’t Code §§
34882, 36502; 87 Cal. Op. Att’y Gen. 30
(2004).

Can establish own criteria for city office
provided it does not violate the U.S.

Constitution. Cal. Const. art. XI, § 5(b), 82
Cal. Op. Att’y Gen. 6, 8 (1999).
95 53
Characteristic General Law City Charter City
Public Funds for Candidate
in Municipal Elections
No public officer shall expend and no
candidate shall accept public money for the
purpose of seeking elected office. Cal. Gov’t
Code § 85300.

Public financing of election campaigns is
lawful. Johnson v. Bradley, 4 Cal. 4th 389
(1992).

Term Limits May provide for term limits. Cal. Gov’t Code § 36502(b).

May provide for term limits. Cal. Const. art.

XI, § 5(b); Cal Gov’t Code Section 36502 (b).

Vacancies and Termination
of Office
An office becomes vacant in several
instances including death, resignation,
removal for failure to perform official duties,
electorate irregularities, absence from
meetings without permission, and upon non-
residency. Cal. Gov’t Code §§ 1770, 36502,
36513.

May establish criteria for vacating and
terminating city offices so long as it does not
violate the state and federal constitutions.

Cal. Const. art. XI, § 5(b).

Council Member
Compensation and
Expense Reimbursement
Salary-ceiling is set by city population and
salary increases set by state law except for
compensation established by city electors.

See Cal. Gov’t Code § 36516. If a city
provides any type of compensation or
payment of expenses to council members,
then all council members are required to
have two hours of ethics training. See Cal.

Gov’t Code §§ 53234 - 53235.

May establish council members’ salaries.

See Cal. Const. art. XI, § 5(b). If a city
provides any type of compensation or
payment of expenses to council members,
then all council members are required to
have two hours of ethics training. See Cal.

Gov’t Code §§ 53234 - 53235.

Legislative Authority Ordinances may not be passed within five days of introduction unless they are urgency
ordinances. Cal. Gov’t Code § 36934.

Ordinances may only be passed at a regular
meeting, and must be read in full at time of
introduction and passage except when, after
reading the title, further reading is waived.

Cal. Gov't Code § 36934.

May establish procedures for enacting local
ordinances. Brougher v. Bd. of Public Works,
205 Cal. 426 (1928).

Resolutions May establish rules regarding the
procedures for adopting, amending or
repealing resolutions.

May establish procedures for adopting,
amending or repealing resolutions. Brougher
v. Bd. of Public Works, 205 Cal. 426 (1928).

Quorum and Voting
Requirements
A majority of the city council constitutes a
quorum for transaction of business. Cal.

Gov’t Code § 36810.

All ordinances, resolutions, and orders for
the payment of money require a recorded
majority vote of the total membership of the
city council. Cal. Gov't Code § 36936.

Specific legislation requires supermajority
votes for certain actions.

May establish own procedures and quorum
requirements. However, certain legislation
requiring supermajority votes is applicable to
charter cities. For example, see California
Code of Civil Procedure section 1245.240
requiring a vote of two-thirds of all the
members of the governing body unless a
greater vote is required by charter.
96 54
Characteristic General Law City Charter City
Rules Governing
Procedure and Decorum
Ralph Brown Act is applicable. Cal. Gov’t
Code §§ 54951, 54953(a).

Conflict of interest laws are applicable. See
Cal. Gov’t Code § 87300 et seq..

Ralph Brown Act is applicable. Cal. Gov’t
Code §§ 54951, 54953(a).

Conflict of interest laws are applicable. See
Cal. Gov’t Code § 87300 et seq..

May provide provisions related to ethics,
conflicts, campaign financing and
incompatibility of office.

Personnel Matters May establish standards, requirements and procedures for hiring personnel consistent
with Government Code requirements.

May have “civil service” system, which
includes comprehensive procedures for
recruitment, hiring, testing and promotion.

See Cal. Gov't Code § 45000 et seq.

Meyers-Milias-Brown Act applies. Cal. Gov't
Code § 3500.

Cannot require employees be residents of
the city, but can require them to reside within
a reasonable and specific distance of their
place of employment. Cal. Const. art. XI, §
10(b).

May establish standards, requirements, and
procedures, including compensation, terms
and conditions of employment for personnel.

See Cal. Const. art. XI, § 5(b).

Procedures set forth in Meyers-Milias-Brown
Act (Cal. Gov't Code § 3500) apply, but note,
“[T]here is a clear distinction between the
substance of a public employee labor issue
and the procedure by which it is resolved.

Thus there is no question that 'salaries of
local employees of a charter city constitute
municipal affairs and are not subject to
general laws.'” Voters for Responsible
Retirement v. Board of Supervisors, 8
Cal.4th 765, 781 (1994).

Cannot require employees be residents of
the city, but can require them to reside within
a reasonable and specific distance of their
place of employment. Cal. Const. art. XI,
section 10(b).

Contracting Services Authority to enter into contracts to carry out necessary functions, including those
expressly granted and those implied by
necessity. See Cal. Gov't Code § 37103;
Carruth v. City of Madera, 233 Cal. App. 2d
688 (1965).

Full authority to contract consistent with
charter.

May transfer some of its functions to the
county including tax collection, assessment
collection and sale of property for non-
payment of taxes and assessments. Cal.

Gov't Code §§ 51330, 51334, 51335. 97
55 Characteristic General Law City Charter City
Public Contracts Competitive bidding required for public works contracts over $5,000. Cal. Pub. Cont. Code
§ 20162. Such contracts must be awarded to
the lowest responsible bidder. Pub. Cont.

Code § 20162. If city elects subject itself to
uniform construction accounting procedures,
less formal procedures may be available for
contracts less than $100,000. See Cal. Pub.

Cont. Code §§ 22000, 22032.

Contracts for professional services such as
private architectural, landscape architectural,
engineering, environmental, land surveying,
or construction management firms need not
be competitively bid, but must be awarded
on basis of demonstrated competence and
professional qualifications necessary for the
satisfactory performance of services. Cal.

Gov't Code § 4526.

Not required to comply with bidding statutes
provided the city charter or a city ordinance
exempts the city from such statutes, and the
subject matter of the bid constitutes a
municipal affair. Pub. Cont. Code § 1100.7;
see R & A Vending Services, Inc. v. City of
Los Angeles, 172 Cal. App. 3d 1188 (1985);
Howard Contracting, Inc. v. G.A. MacDonald
Constr. Co., 71 Cal. App. 4th 38 (1998).

Payment of Prevailing
Wages
In general, prevailing wages must be paid on
public works projects over $1,000. Cal. Lab.

Code § 1771. Higher thresholds apply
($15,000 or $25,000) if the public entity has
adopted a special labor compliance program.

See Cal. Labor Code § 1771.5(a)-(c).

Historically, charter cities have not been
bound by state law prevailing-wage
requirements so long as the project is a
municipal affair, and not one funded by state
or federal grants. Vial v. City of San Diego,
122 Cal. App. 3d 346, 348 (1981). However,
there is a growing trend on the part of the
courts and the Legislature to expand the
applicability of prevailing wages to charter
cities under an analysis that argues that the
payment of prevailing wages is a matter of
statewide concern. The California Supreme
Court currently has before them a case that
will provide the opportunity to decide
whether prevailing wage is a municipal affair
or whether it has become a matter of
statewide concern.
98 56
Characteristic General Law City Charter City
Finance and Taxing Power May impose the same kinds of taxes and assessment as charter cities. See Cal. Gov't
Code § 37100.5.

Imposition of taxes and assessments subject
to Proposition 218. Cal. Const. art.XIIIC.

Examples of common forms used in
assessment district financing include:
x Improvement Act of 1911. Cal. Sts.
& High. Code § 22500 et seq..
x Municipal Improvement Act of 1913.

See Cal. Sts. & High. Code §§
10000 et seq..
x Improvement Bond Act of 1915. Cal.

Sts. & High. Code §§ 8500 et seq..
x Landscaping and Lighting Act of
1972. Cal. Sts. & High. Code §§
22500 et seq..
x Benefit Assessment Act of 1982.

Cal. Gov't Code §§ 54703 et seq..

May impose business license taxes for
regulatory purposes, revenue purposes, or
both. See Cal. Gov't Code § 37101.

May not impose real property transfer tax.

See Cal. Const. art. XIIIA, § 4; Cal. Gov't
Code § 53725; but see authority to impose
documentary transfer taxes under certain
circumstances. Cal. Rev. & Tax. Code §
11911(a), (c).

Have the power to tax.

Have broader assessment powers than a
general law city, as well as taxation power as
determined on a case-by case basis.

Imposition of taxes and assessments subject
to Proposition 218, Cal. Const. art. XIIIC, §
2, and own charter limitations
May proceed under a general assessment
law, or enact local assessment laws and
then elect to proceed under the local law.

See J.W. Jones Companies v. City of San
Diego, 157 Cal. App. 3d 745 (1984).

May impose business license taxes for any
purpose unless limited by state or federal
constitutions, or city charter. See Cal. Const.
art. XI, § 5.

May impose real property transfer tax; does
not violate either Cal. Const art. XIIIA or
California Government Code section 53725.

See Cohn v. City of Oakland, 223 Cal. App.
3d 261 (1990); Fielder v. City of Los
Angeles, 14 Cal. App. 4th 137 (1993).

Streets & Sidewalks State has preempted entire field of traffic control. Cal. Veh. Code § 21.

State has preempted entire field of traffic
control. Cal. Veh. Code § 21.

Penalties & Cost Recovery May impose fines, penalties and forfeitures, with a fine not exceeding $1,000. Cal. Gov’t
Code § 36901.

May enact ordinances providing for various
penalties so long as such penalties do not
exceed any maximum limits set by the
charter. County of Los Angeles v. City of Los
Angeles, 219 Cal. App. 2d 838, 844 (1963).
99 57
Characteristic General Law City Charter City
Public Utilities/Franchises May establish, purchase, and operate public works to furnish its inhabitants with electric
power. See Cal. Const. art. XI, § 9(a); Cal.

Gov't Code § 39732; Cal. Pub. Util. Code §
10002.

May grant franchises to persons or
corporations seeking to furnish light, water,
power, heat, transportation or
communication services in the city to allow
use of city streets for such purposes. The
grant of franchises can be done through a
bidding process, under the Broughton Act,
Cal. Pub. Util. Code §§ 6001-6092, or
without a bidding process under the
Franchise Act of 1937, Cal. Pub. Util. Code
§§ 6201-6302.

May establish, purchase, and operate public
works to furnish its inhabitants with electric
power. See Cal. Const. art. XI, § 9(a); Cal.

Apartment Ass’n v. City of Stockton, 80 Cal.

App. 4th 699 (2000).

May establish conditions and regulations on
the granting of franchises to use city streets
to persons or corporations seeking to furnish
light, water, power, heat, transportation or
communication services in the city.

Franchise Act of 1937 is not applicable if
charter provides. Cal. Pub. Util. Code §
6205.

Zoning Zoning ordinances must be consistent with
general plan. Cal. Gov't Code § 65860.

Zoning ordinances are not required to be
consistent with general plan unless the city
has adopted a consistency requirement by
charter or ordinance. Cal. Gov’t. Code §
65803.
100
58 101
59 102
60 .

STAFF REPORT TO THE CITY COUNCIL
DATE: Regular Meeting of January 25, 2022
TO: Members of the City Council
VIA: Dante Hall, City Manager
SUBMITTED BY: Edwin Gato, Finance Director
SUBJECT: Long-Term Financial Projection for the General Fund an d Approval of a Resolution to unanimously declare a fiscal emergency in the City of Hercules
RECOMMENDATION: R e v i e w a n d d i s c u s s t h e l o n g - t e r m financial projection for the G eneral Fund, and approval of a resolution to unanimously declare a fiscal emergency in the City of Hercules related to the expiration of the City’s Utility Users Tax on January 1, 2025.

FISCAL IMPACT OF RECOMMENDATION
There is no direct impact from the preparation and review of an updated long-term forecast. It is a planning tool that can be used to guide future fiscal decisions.

BACKGROUND AND DISCUSSION
The City’s finances are managed through four major efforts each year. The development and adoption of a budget for each fiscal year which starts July 1st is generally considered the first point in the annual cycle. This is generally followed by the completion and the acceptance of the audit for the prior fiscal year, with the goal of having that completed by December 31st or earlier.

The completion of the annual audit typically sets the stage for the mid-year budget review in February or March and can include some adjustments or additional appropriations or designations of reserves.

The preparation of an update to the long-term forecast would typically be received by the Council in March/April timeframe to set the stage for the development of the budget for the next fiscal year.

However, this year due to the Utility Users Tax, which will sunset in January 2025, staff prepared the long-term financial projections early to show the fiscal impact of the discontinuance of the UUT to the City’s bottom line and to start the voter approval process to continue its UUT.

With the audit being received by the City Council tonight, it is time to review an updated Long-Term Financial Projection. The forecast has been updated to reflect the FY 20-21 audit results with the FY 21-22 Adopted Budget and the preliminary look of the FY 22-23 projections. A long-term forecast was prepared for the General Fund for the time period from FY 23-24 through FY 27-28. 103
Attachment 5 to
3/08/22 staff report
61 The five-year forecast is an essential tool that reflects the City’s com mitment to fiscal health and sustainability. This model is used to evaluate the immediate impact of budgetary decisions and the costs of decisions over multiple years. The tool is updated based on current revenue and expenditure information. Though individual variables and assumptions may c hange over time, the five-year forecast provides a consistent model to realistically forecast the City’s fiscal performance. The five- year forecast includes all aspects of the General Fund. It mod els and forecasts all General Fund revenues (property tax, sales tax, utility users tax, etc.) and expenditures in detail. The City updates the five-year forecast as part of the regular budget update to the Council. These updates are part of developing the budget for the upcoming fiscal year, as explained above.

The five-year forecast (FY 22-23 through 26-27) marks the first look at the FY 22-23 annual budget.

It includes projected General Fund financials over the next five years based on current service levels and information on revenues.

SIGNIFICANT CHANGES FROM PRIOR YEAR
The COVID-19 Pandemic began to directly impact City operations in mid-March 2020 when the initial County Health Order resulted in a stay-home order for all but essential services workers.

Now, nearly two years later, we continue to operate under a County Health Order, which has been updated and revised. Over time, we have also had to comply with the Governor's Executive Orders as they have evolved. Also, the City Manager declared a local emergency in response to the COVID- 19 Pandemic initially on March 15, 2020. That local emergency declaration was ratified by the City Council and extended by the City Council's action every 60 days after that.

Also, we would like to acknowledge that the City of Hercules is the only City Hall in the county that did not close during the COVID event. As essential services workers, City employees continued to work unless they had COVID-related health or childcare issues. We were fortunate that our physical facilities and level of staffing lent themselves to operate on-site in a safe manner with all reasonable and required precautions taken to protect our employees and customers. Of course, we could not continue in-person City Council and other public meetings and transitioned to the Zoom platform.

We continue to utilize this platform in compliance with the Governor’s Executive Order.

REVENUE PROJECTION AND ASSUMPTIONS USED: The General Fund major revenue categories are summarized on Attachment 2. The City derives a significant portion of its General Fund revenues from economically sensitive sources such as property taxes, sales taxes (1% Bradley-Burns and Measure B), and utility users’ taxes. When one or more of these key revenue sources deviates from projections, funding for future programs and services may be affected.

As shown in the following graph, General Fund revenues are projected to increase at the rate of 2% a year and include estimated revenues from new development. Revenue projections for a 5-year forecast period through 2027 range from $17.5 to $16.7 million. The following explains the major revenue assumptions used to estimate General Fund revenues. 104
62 ¾ Utility Users Tax (UUT) are revenues collected from the consumption of utility services, including (but not limited to) electric, gas, water, sewer, telephone (including cell phone and long-distance), sanitation, and cable television. The City determines the rate of the tax and the use of its revenues. Based on the trend and its consumption rate, the City continues to see erosion in Wireless Telecom’s UUT revenues due to the update in allocations of the bundled packages from the respective providers. These updated allocations shifted a more significant percentage towards data, which is not taxable.

On June 4, 2013, the voters approved Ordinance #475, increasing the tax rate from 6% to 8%. The Utility Users Tax will automatically sunset, and its provisions shall become ineffective on January 1, 2025. The five-year forecast assumes that the tax will sunset in mid FY 24-25. To avoid catastrophic impacts to City services due to a severe and sudden loss of revenue, Staff recommends going back to the voters to extend the tax imposed on utilities.
¾ Total Sales Tax revenue is highly concentrated with two producers generating over 50% of the City's sales tax. Based on the report received from MuniServices, Hercules’s sales tax revenue is substantially generated from business and industry sources. However, the City continues to benefit from the ongoing implementation of the Wayfair decision regarding online sales and the more significant amount of purchases being made online due to the Pandemic, with these trends being found as part of the City's share in the County pool. It should also be noted that the Wayfair decision's full effect is anticipated to have occurred by the end of the FY 20/21 fiscal year. After that, any increases from the County pool will be driven primarily by the underlying economic trends. ¾ The City is realizing a stable property tax-related revenue growth and assumed the following: The California Consumer Price Index (CCPI) for FY 2021-22 that has been approved by the State is 1.036%. In year two of the forecast, the CIP growth is estimated -
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
14,000,000
16,000,000
18,000,000
20,000,000
FY 22-23
Forecast
FY 23-24
Forecast
FY 24-25
Forecast
FY 25-26
Forecast
FY 26-27
Forecast
General Fund
5-Year Forecast - Operating Revenues
Taxes
Taxes on New Development
Intergovernmental
Program Revenues
Use of Money & Property/Other
Admin Cost Allocation
Transfers In
105
63 at 1.5% and in years 3-5 of the forecast, the CCPI has been for ecast at the maximum allowable rate of 2%.

This year the Assessors applied the CCPI factor of 1.036%. It is important to note that all properties that have been granted Proposition 8 reductions between 2008 and 2012, and in some counties in 2020 due to lower sale price trends in 2019 , are required to be reviewed each year outside of the CCPI adjustment and any positive adjustment to those properties will likely exceed the 1.036% if properties are granted value restorations. ¾ The new general tax revenues that will be generated from new developments, such as Muir Pointe, Bayfront, Sycamore Crossing, Willow Auto Site, and Hilltown are estimated based on residential unit impact, assuming an average of 2.5 people per unit using FY 19- 20 projected tax revenues as a base.
¾ The effect of COVID-19 mandatory closures to the Parks & Recreation program resulted in a reduction of $1.1 million of program revenues in FY 20-21 as adjusted at Midyear.

Childcare programs, contract classes, sports programs, and faci lity rentals were all suspended since March 2020, with very limited offerings underway now. The five-year projections assumed that all programs would be restored starting FY 21-22.

EXPENDITURE PROJECTION AND ASSUMPTIONS USED: As shown in the following graph, General Fund expenditures are projected to increase at the estimated rate of 3% a year.

Expenditure projections for a 5-year forecast period through 2027 range from $16.8 to $18.6 million assuming the same service level. The following chart shows the growth in General Fund expenditures.

1. The most significant cost in the General Fund is driven by its labor. Labor accounts for almost 60% of total expenditures. Below are significant assumptions used to estimate the cost of salaries and benefits:
-
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
14,000,000
16,000,000
18,000,000
20,000,000
FY 22-23
Forecast
FY 23-24
Forecast
FY 24-25
Forecast
FY 25-26
Forecast
FY 26-27
Forecast
General Fund
5-Year Forecast - Operating Expenditures
Non-Department/Transfers
Workers Comp/General Liability
Administration
Parks and Recreation
Community Development
Public Works
Police
106
64 a. Regular Salaries– Cost of living (COLA) increase by 3% per year. b. PERS Miscellaneous and Public Safety Normal Cost rate applied are projected as follows based on CalPERS actuarial assumptions:
c. PERS Unfunded Accrued Liability (UAL) contribution amounts are projected as follows based on CalPERS actuarial assumptions.

2. Parks & Recreation programs have been suspended since March 20 2 0. Th e five-y ear forecast assumed that programs would be restored starting FY 21-22.

3. The City of Hercules has been navigating a series of financial difficulties dating back to the Great Recession in FY 2007-08, the elimination of redevelopment in 2011, in addition to financial mismanagement which occurred under a former City Manager who resigned in 2011. While much progress has been made and the City has been able to build up its reserves by making financially prudent decisions and adopting balanced budgets which also use one-time monies for strategic purposes, ensuring the o ngoing financial sustainability of the City, and lingering issues associated with the State dissolution of redevelopment in 2011 have not been fully resolved.

On April 8, 2020, the City entered into a settlement agreement implementing an installment payment plan for the Other Funds Due Diligence Revi ew payment. The outstanding $3.6 million payment will be made by the City and Successor Agency to the Contra Costa County Auditor-Controller according to the following schedule, which the initial payment was made on May 1, 2020:

FY 22-23 FY 23-24 FY 24-25 FY 25-26 FY 26-27
Police Classic 23.70% 23.70% 23.70% 23.70% 23.70%
Police 2nd-Tier 21.80% 21.80% 21.80% 21.80% 21.80%
Police PEPRA 13.10% 13.10% 13.10% 13.10% 13.10%
Miscellaneous Classic 10.30% 10.30% 10.30% 10.30% 10.30% Miscellaneous PEPRA 7.60% 7.60% 7.60% 7.60% 7.60%
FY 22-23 FY 23-24 FY 24-25 FY 25-26 FY 26-27
Police Classic 747,000 $ 797,000 $ 847,000 $ 873,000 $ 896,000$ Police 2nd-Tier 2,000 2,100 2,200 400 400
Police PEPRA 6,200 4,900 5,800 6,000 6,200
Miscellaneous Classic 614,000 651,000 691,000 711,000 730,000 Miscellaneous PEPRA 3,400 4,200 4,800 5,000 5,100
1,372,600 $ 1,459,200$ 1,550,800$ 1,595,400 $ 1,637,700$ 107
65 This $3.6 million are funds advanced by the City in 2011 to the Redevelopment Agency to make a bond payment in order to avoid a default on the Redevelopment Agency’s bonds due to the dramatic decline in property values as a result of the Great Recession. The City advanced these funds in April 2011, and the Redevelopment Dissolution Act approved by the State Legislature and signed by then Governor Brown, made t his type of transfer illegal after the fact later in 2011. The DDR completed in 2015 identified that this amount needed to be returned to the former Redevelopment Agency by the City.

The City is working with Senator Skinner regarding a bill which, if passed by the State Legislature and signed by the Governor, would make the City eligible for a Finding of Completion which would allow for the repayment of City loans ma de by the former Redeployment Agency. While more than $50 million in City loans are reflected as being outstanding, it is anticipated that the State Department of Fin ance will not find the supporting documentation acceptable for loans beyond an estimat ed $3 to $4 million.

Once that determination is made, any remaining accounts receivable related to loans from the City to the former Redevelopment Agency will have to be red uced by the loans disallowed, and that will be done once a final determination is made.

4. In August 2020, the City refinanced the proceeds of the Library Lease Revenue Bonds, Series 2003B. The City structured the refinancing to achieve all of the cash flow savings in the first three years which is reflected in the forecast.

5. On October 18, 2013, the City agreed with CalHFA to extend the term of the loan on Housing Enabled by Local Partnership (HELP) and Residential Dev elopment Loan Program (RDLP) through April 11, 2027, and August 15, 2026, res pectively. At that time, payments of the remaining loan balances are due in full. Prior to the end of the loan term, the City will work with CalHFA to negotiate a further extension to repay the remaining loan balance.

NET ANNUAL RESULTS
Based on the current information known, the General Fund will end the fiscal years with a positive net revenue until year three. On January 1, 2025, the Utility Users Tax (UUT) will sunset. Also, per our agreement with the California Housing Finance Agency (CalHFA), the remaining loan balances are due no later than April 11, 2027, and August 15, 2026, for HELP and RDLP loans, respectively.

Therefore, a structural deficit will start in FY 24-25 assuming the same service level, the UUT is not renewed, and the accelerated payments on CalHFA loans are not re negotiated. The FY 22-23 projections will be further updated and refined during the adoption of the budget in June 2022.

RECOMMENDATION
Staff recommends going back to the voters (a separate agenda item in the future) to extend the UUT, a tax imposed on utilities. In order to be submitted on the ballot for a state primary election, the City must first adopt a declaration of a fiscal emergency by unanimous vote of the Council. 108
66 The California Constitution requires the election for a general tax measure such as this to be held on a regularly scheduled general municipal election, except in cases of emergency declared by a unanimous vote of the City Council. Declaring a fiscal emergenc y allows flexibility on when to place the renewal on the ballot. Placing the UUT tax renewal on an upcoming ballot before the tax expires will allow for an uninterrupted collection of the UUT and a seamless funding of critical city services.

ATTACHMENTS:

1. Resolution

2. General Fund Long-Term Financial Forecast
109
67 General Fund
Five-Year Financial Forecast
Year 1 Year 2 Year 3 Year 4 Year 5
FY 19-20 FY 20-21 FY 21-22 FY 22-23 FY 23-24 FY 24-25 FY 25-26 FY 26-27 Audited
Actuals
Audited
Actuals Adopted Forecast Forecast Forecast Forecast Foreca st Beginning Available Balance $ 2,412,068 $ 1,847,112 2,138,983$ 1,071,458 1,317,948 2,636,463 2,698,978 $ - $ Revenues
Taxes
Utility User Tax 3,483,843 3,590,649 3,509,000 3,618,000 3,644,000 1,833,000 Sales Tax 4,212,285 4,775,496 4,654,675 4,962,649 5,059,649 5,158,649 5,258,649 5,360,649 Property Taxes 1,415,995 1,451,716 1,520,000 1,433,000 1,462,000 1,492,000 1,522,000 1,553,000 Franchise Fees 948,503 862,104 896,000 897,000 915,000 933,000 951,000 969,000 Business Licenses 251,418 268,697 198,000 279,000 284,000 290,000 296,000 302,000 Transfer Tax 142,850 126,488 132,000 130,000 133,000 136,000 139,000 142,000 Transient Occupancy Tax 6,179 7,635 5,000 8,000 8,000 8,000 8,000 8,000 Intergovernmental 2,151,433 2,285,392 2,418,000 2,394,866 2,471,866 2,555,866 2,642,866 2,695,000 Fines & Forefeitures 62,582 36,586 37,000 38,000 39,000 40,000 41,000 42,000 Revenues from New Developments 302,000 924,000 1,428,000 1,662,000 1,851,000 Program Revenues
Community Development 675,556 824,891 242,000 540,000 552,000 564,000 576,000 588,000 Parks and Recreation 1,020,758 396,290 1,753,000 1,789,000 1,826,000 1,863,000 1,900,000 1,938,000 Police 483,110 48,958 219,000 123,000 125,000 127,000 129,000 131,000 Public Works 28,588 46,908 68,000 48,000 49,000 50,000 51,000 52,000 Other 6,770 10,571 11,000 11,000 11,000 11,000 11,000 11,000 Use of Money & Property 600,707 511,191 244,000 249,000 254,000 260,000 266,000 272,000 Cost allocated to other funds 534,992 619,634 719,325 616,000 629,000 642,000 655,000 669,000 Transfers In 227,335 150,000 150,000 150,000 150,000 150,000 150,000 150,000 16,252,904 16,013,206 16,776,000 17,588,515 18,536,515 17,541,515 16,258,515 16,733,649 Expenditures
Police 7,564,927 7,549,028 7,545,685 8,019,000 8,284,000 8,558,000 8,810,000 9,068,000 Public Works 305,464 292,525 374,592 310,000 317,000 325,000 333,000 342,000 Community Development 611,297 792,456 725,810 820,000 845,000 870,000 895,000 922,000 Parks and Recreation 2,165,547 1,434,988 2,787,803 2,761,000 2,843,000 2,925,000 3,005,000 3,085,000 City Council 376,082 407,588 331,114 420,000 430,000 441,000 452,000 463,000 City Manager 385,675 360,115 409,908 368,000 378,000 389,000 400,000 411,000 Legal 284,709 154,562 265,000 164,000 169,000 174,000 179,000 184,000 Administrative Services 700,608 679,926 718,643 659,000 678,000 698,000 717,000 736,000 Finance 1,044,931 1,106,024 1,155,608 1,178,000 1,215,000 1,253,000 1,290,000 1,327,000 Workers Comp/General Liability 1,084,650 1,080,572 1,235,837 1,138,000 1,172,000 1,207,000 1,241,000 1,276,000 Non-Department 766,112 375,912 260,000 712,000 765,000 763,000 561,000 563,000 Transfers Out 205,099 214,819 423,000 330,000 236,000 236,000 245,000 256,000 15,495,101 14,448,515 16,233,000 16,879,000 17,332,000 17,839,000 18,128,000 18,633,000 Net Annual Activity
Baseline Operations 757,803$ 1,564,691$ 543,000 709,515 1,204,515 (297,485) (1,869,485) (1,899,351) One-Time Revenues 1,723,486 600,747 1,056,000 141,000 114,000 360,000 416,000 438,000 One-Time Expenditures (1,234,170) (2,062,500)
DOF Settlement (1,812,075) (604,025) (604,025) (604,025) CalHFA Loan Repayments (3,900,000) (1,300,000)
Draw/(Return) from Reserve (1,269,542) 2,654,507 1,380,010 Ending Available Balance 1,847,112$ 2,138,983 $ 1,071,458 $ 1,317,948 2,636,463 2,698,978 - (1,381,341)$ Operating Reserve:

Beginning Balance 3,797,650$ 2,764,975 $ 4,034,517 $ 4,034,517 4,034,517 4,034,517 4,034,517 $ 1,380,010 $ Current Year Contribution 236,867
Return/(Draw) - reserve (1,269,542) 1,269,542 (2,654,507) (1,380,010) Ending Balance 2,764,975$ 4,034,517 $ 4,034,517 $ 4,034,517 4,034,517 4,034,517 1,380,010 $ - $ % of Projected Operating
Expenditures 18% 28% 25% 24% 23% 23% 8% 0%
* Assumed discontinuation of Utility User Tax starting January 1, 2025 per ordinance. 110
Attachment 6 to
3/08/22 staff report
68 Position Title Function FTE Cut Revised
Accounting Technician General Government 3 (1) 2 Admin Srvc Director/City Clerk General Government 1 1
City Manager General Government 1 1
Finance Director General Government 1 1
Human Resources Administrator General Government 1 1
Information Systems Administrator General Government 1 1 Office Assistant General Government 1 (1) 0
Personnel Technician General Government 1 (1) 0 Senior Accountant General Government 1 1
Senior Clerk General Government 1 1
Information Systems Specialist General Government 1 1 Management Analyst General Government 1 1
Police Assistant Public Safety 1 1
Police Commander Public Safety 1 1
Police Officer Public Safety 19 (1) 18
Police Sergeant Public Safety 6 6
Administrative Specialist Public Safety 2 2
Assistant Engineer Public Works 1 1
Maintenance Aide Public Works 1 (1) 0
Maintenance Worker Public Works 8 1 9
Real Property Manager Public Works 1 (1) 0
Public Works Superintendent Public Works 1 1
Public Works Technician Public Works 1 (1) 0 Office Assistant Public Works 1 (1) 0
Assistant/Senior Planner Community Development 1 (1) 0 Chief Building Official Community Development 1 (1) 0 Development Services Technician Community Development 1 1 Permit Technician Community Development 1 (1) 0 Community Development Director Community Development 1 1 Parks and Recreation Director Parks and Recreation 1 1 Estimate Approx.

Recreation Coordinator Parks and Recreation 7 (4) 3 FY 21-22 in Restoring Cost Recreation Program Manager Parks and Recreation 1 (1) 0 Budget FY 2011 FTE Increase 69 -13 56 -19% $15,278,000 $18,333,600 $3,055,600
111
Attachment 7 to
3/08/22 staff report
69 STAFF REPORT TO THE CITY COUNCIL
DATE: Regular Meeting of March 23, 2021
TO: Members of the City Council
SUBMITTED BY: David Biggs, City Manager
Mike Roberts, Public Works Director/City Engineer
SUBJECT: Public Works Department Organizational Review and Analysis RECOMMENDED ACTION: Receive a presentation on the Public Works Department Organizational Review and Analysis, discuss, provide direction, if any.

FISCAL IMPACT OF RECOMMENDATION: There is no financial impact associated with receiving this report. Any cost associated with the recommendations will be evaluated in the future, at the time a specific recommendation is being considered for implementation.

At the last Council meeting of March 9, Decision Package #22-7 was introduced which would create a new Public Works Specialist/Inspector Classification utilizin g an existing vacant FTE.

Implementing this recommendation, which is the highest priority identified in the study, would be cost neutral to the General Fund. Additional information will be provided at the time the FY 21-22 budget is being considered for adoption.

DISCUSSION:The Public Works Department provides broad range of services including oversight of the City’s transportation network, sewer collection system, stormwater system, landscaping and lighting, facilities maintenance, capital improvements, and eng ineering review for private development projects. These services have been delivered with an organizational structure, staffing level, and staffing configuration that have remained constant since 2014, following staffing reductions that occurred due to the City’s financial hardship.

Given the time that has passed as well as the changes the City has undergone since 2014, MRG was retained to evaluate the Public Works Department and provide recommendations to ensure services are as efficient and effective as possible and the department remains responsive to the public.

In addition to drawing upon their in-house expertise, MRG’s org anizational assessment process included reviewing the City’s financial documents and interviewing staff and Council. They also completed a departmental comparison with four other similar cities in Contra Costa County. This included a comparison by related functions as summarized in the table below. 112
Attachment 8 to
3/08/22 staff report
70 Table 1 – Comparative Municipalities Public Works Related Functions Agency Population 1
Public
Roads
(maintained
miles)2
Collection
System
(miles)
Engineering
Staff
O&M
Staff
Total
Public
Works
Employees
Total PW
Employees/
10,000
Population
Pinole 19,500 53 49 3 10 13 6.7
El
Cerrito 25,000 72 NA 5 14 19 7.6
Orinda 19,000 92 NA 7 53 12 6.3
Moraga 16,900 63 NA 5 6 11 6.5
Comp
City
Avg
20,100 70 49 5 9 14 6.8
Hercules 25,500 55 63 2.54 8.54 11 4.3
1California Department of Finance Population Estimates - May 2020 2Caltrans California Public Road Data - December 2020
3O&M staffing reduced to 5 from 7 in FY 2020-2021 to address COVID financial impact 4The Public Works Superintendent position was estimated to split time equally between Engineering and Maintenance MRG’s recommendations cover three functional areas: staffing, organizational modifications, and technical & equipment enhancements. They are summarized below and covered in detail in the report.

I. Staffing
x Reclassify a vacant Maintenance Worker I/II position and create a n e w P u b l i c W o r k s Specialist (Inspector) classification.
x Consider creating a new Public Works Supervisor classification. x Consider shifting janitorial duties for all City buildings and potentially park restrooms from full-time staff to contract services.
x Consider creating a Maintenance Aide classification and shifting the weekend parks and facilities duties from two full-time Maintenance Workers to one full-time Maintenance Worker supported by part-time staff.
x Consider using the Maintenance Worker I/II as a flexibly staffed classification and/or better differentiate between the two levels.
x Consider creating a Senior Civil Engineer classification.

II. Organizational Modifications
x Ensure that Engineering staff c oordinates and reviews outside r eviewer comments for development projects prior to forwarding to developers/applicants. x Provide enhanced oversight of the City-wide landscape contract. x Relocate the Public Works Superintendent to the Maintenance Yard. x Establish performance or workload measures for the Department. x Establish clear timelines for response to the most common requests for service. x Clarify expectations, standards, and frequency of inspection fo r the Maintenance & Operations Division’s monthly public right-of-way inspection program. 113
71 x Consider establishing a standby procedure and rotation that inc orporates all qualified maintenance staff.
x Ensure performance evaluations are completed consistently and in a timely manner. x Establish consistent and well-defined expectations and lines of authority in the Superintendent’s absence and clarify when “Additional Duties” pay will be applied. x Better define the “lead worker” language in the Local 315 MOU.

III. Technical and Equipment Enhancements
x Implement a basic work order and tracking system to begin track ing work output and scheduling recurring preventative maintenance activities. x Start mapping and inventorying maintained assets during the monthly inspection program. x Develop an agreement with Pinole or another neighboring agency to gain access to pavement patching equipment to improve road maintenance.

These recommendations cover a broad range of functional areas and could be phased in over time as resource levels allow. Staff looks forward to using the Organizational Review and Analysis as a guide to ensure the Public Works Department is optimally configured to best serve the public and the City’s needs into the foreseeable future.

MRG will be in attendance tonight to present their Public Works Organizational Review and Analysis as well as answer any questions.

ATTACHMENTS:

1. Presentation on Public Works Department Organizational Review and Analysis

2. Public Works Department Organizational Review and Analysis Financial Impact
Description:

Funding Source:

Budget Recap:

Total Estimated cost: $ New Revenue: $
Amount Budgeted: $ Lost Revenue: $
New funding required: $ New Personnel: $
Council Policy Change: Yes No
114
72 City Council Meeting – March 23,2021
City of Hercules
Public Works Department
Organizational Review
and Analysis
1 115
Attachment 9 to
3/08/22 staff report
73 PURPOSE OF THE PROJECT
The MRG project team conducted a high-level staffing,
service delivery and organizational structure analysis of the Public Works Department to achieve the following
objectives:
• Improve service delivery and outcomes
• Increase efficiencies and effectiveness
• Clarify employee roles and responsibilities
• Streamline management oversight
2 116
74 PROJECT METHODOLOGY
The project methodology included the following:
• Review of the City’s budget documents, staff cost
allocations, Comprehensive Annual Financial Reports,
Lighting and Landscape District Engineer Reports,
organizational chart, and job descriptions
• Interviews with City staff and each Council Member
• Desk review of the organizational structure of four
comparative municipalities in Contra Costa County:
• El Cerrito
• Pinole
• Moraga
• Orinda
3 117
75 KEY FINDINGS
• Extensive use of outside consultants and contractors
• Significant staff reductions between 2012 to 2014 from high of 18 to current 11
• Management staff spend virtually all their time performing staff level work or managing everyday work functions
• Insufficient capacity to perform strategic planning, implement work productivity systems and oversee staff
• No formal work order or work productivity systems in place • Limited inspection of encroachment permit work and
development projects
• Limited review and coordination of outside engineering firms • Desire for enhanced oversight of the landscape contractor 4 118
76 COMPARATIVE
AGENCY

ANALYSIS
5 Table 1 – Comparative Municipalities Public Works Related Functions

Agency Population 1
Public
Roads
(maintained
miles)2
Collection
System
(miles)
Engineering
Staff
O&M
Staff
Total
Public
Works
Employees
Total PW
Employees/
10,000
Population
Pinole 19,500 53 49 3 10 13 6.7
El Cerrito 25,000 72 NA 5 14 19 7.6
Orinda 19,000 92 NA 7 53 12 6.3
Moraga 16,900 63 NA 5 6 11 6.5
Comp
City Avg 20,100 70 49 5 9 14 6.8
Hercules 25,500 55 63 2.54 8.54 11 4.3
1California Department of Finance Population Estimates - May 2020 2Caltrans California Public Road Data - December 2020
3O&M staffing reduced to 5 from 7 in FY 2020-2021 to address COVID financial impact 4The Public Works Superintendent position was estimated to split time equally between Engineering and Maintenance 119
77 RECOMMENDATIONS
Create a new Public Works Specialist (Inspector) classification • Fund by reclassifying vacant Maintenance Worker I/II position • Addresses many of the Department’s most pressing issues:
• Frees the Superintendent to oversee maintenance staff and implement work order and other management tools
• Provides needed oversight of development projects and encroachment permit-related work in the City’s right-of-way
• Provides additional time for the Associate Engineer to review and coordinate the work of outside consultants by reassigning work to the new position
• Satisfies the City Council’s and other stakeholders’ goal for enhanced oversight of the landscape contractor by assigning oversight to this new position, trained and experienced in inspecting contract work and enforcing contract provisions
6 120
78 RECOMMENDATIONS
• Create a new Public Works Supervisor classification
• Fill as funds become available or by upgrading a Maintenance Worker I/II position
• Assist in the oversight of outside contractors and vendors • Clear line of authority in the absence of the Superintendent • Path of succession and promotion within the Division
• Assist in the development and implementation of needed system improvements
• Consider shifting janitorial duties for all City buildings and potentially park restrooms to contract services
and/or part-time staff
• Implement a variety of work productivity and
performance measurement systems to improve
effectiveness
7 121
79 PROPOSED ORGANIZATIONAL

STRUCTURE
• Reallocates Department staff to areas of greatest need – public works inspection, outside engineering consultant oversight, and landscape contract oversight through the creation of a Public Works Specialist position
• Creates a Public Works Supervisor classification that provides for both staff development opportunities and
succession planning
• Reallocates staff resources and responsibilities to provide adequate management and supervisory-level staff to
develop and implement necessary procedures and
systems for performance and workload management
8 122
80 PROPOSED ORGANIZATIONAL

STRUCTURE
9 123
81 Post Office Box 561 Wilton, California 95693 916-261-7547 [email protected]

CITY OF HERCULES

Public Works Department
Organizational Review and Analysis
Prepared by:

Mike Bakaldin
Charlene Harris
Mike Oliver

Municipal Resource Group, LLC
March 2021
124
Attachment 10 to
3/08/22 staff report
82 City of Hercules - Public Works Department Organizational Review and Analysis Page i Municipal Resource Group, LLC Report

TABLE OF CONTENTS
Page
EXECUTIVE SUMMARY .....................................................................................................1 BACKGROUND .................................................................................................................1 ORGANIZATIONAL ASSESSMENT PROCESS AND METHODOLOGY .....................................2 A. Document Review ................................................................................................2 B. Staff and Customer Interviews .............................................................................2 C. Comparative Municipality Review ............................... .........................................3 KEY OBSERVATIONS AND FINDINGS ................................. ................................................3 A. Public Works Department ....................................... .............................................3 B. Engineering Division .............................................................................................4 C. Maintenance & Operations Division .....................................................................5 COMPARATIVE AGENCIES .......................................... ......................................................9 RECOMMENDATIONS ............................................... .....................................................10 A. Staffing ..............................................................................................................10 B. Organizational Modifications .............................................................................13 C. Technical and Equipment Enhancements ......................... ..................................16 PROPOSED ORGANIZATIONAL STRUCTURE ............................. .......................................17 CONCLUSION .................................................................................................................17

ATTACHMENTS
Attachment A List of Interviewees
Attachment B List of Interview Questions
Attachment C-1 City of Pinole Organizational Chart
Attachment C-2 City of Orinda Organizational Chart
Attachment C-3 Town of Moraga Organizational Chart
Attachment C-4 City of El Cerrito Organizational Chart
Attachment D Hercules Public Works Department Proposed Organiza tional Structure

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EXECUTIVE SUMMARY
The City of Hercules (“City”) engaged Municipal Resource Group, LLC (“MRG”) to assist the City’s Public Works Department (“Department”) in determining an organizational structure and staffing configuration that would improve service delivery and outcomes, increase efficiencies and effectiveness, clarify employee roles and responsibilities, and streamline management oversight.

The process included a review of provided documentation and dat a; individual interviews of identified Department staff, the City Manager, and each member of the City Council; and a review of data from comparative municipalities. The data and subseque nt analysis were incorporated into a series of findings and recommendations.

MRG’s most critical recommendation is to reclassify a currently vacant Maintenance Worker I/II position to a new Public Works Specialist (Inspector) classific ation. This one recommendation addresses many of the Department’s most pressing issues, in that it would:
x Free the Public Works Superintendent to provide the necessary o versight and direction to maintenance staff and the time to implement a work order sys tem, performance or workload measures and other management tools;
x Provide needed oversight of development projects and encroachme nt of permit-related work in the City’s right-of-way;
x Provide additional time for the Associate Engineer to review an d coordinate the work of outside consultants by reassigning work to the new position; and x Satisfy the City Council’s and other stakeholders’ goal for enh anced oversight of the landscape contractor by assigning oversight to this new positio n, who would be trained and experienced in inspecting contract work and enforcing contract provisions.

Other key recommendations include:
x Consider creating a new Public Works Supervisor classification; x Shifting janitorial duties for all City buildings and potentially park restrooms from full-time staff to contract services and/or part-time staff; and
x I m p l e m e n t i n g a v a r i e t y o f w o r k p r o d u c t i v i t y , p e r f o r m a n c e m e a s u rement and accountability systems to improve effectiveness.

BACKGROUND
The Department is tasked with overseeing the construction, reha bilitation, and maintenance of the City’s infrastructure. The Department operates with a limit ed number of staff supported by outside consultants and contractors for a wide variety of designated services. While the City has continued to develop and grow (9% population growth since 2011) , and infrastructure and infrastructure maintenance requirements have increased along wi th service delivery expectations, the number of Department staff has remained const ant since 2014, following staffing reductions to address fiscal impacts brought on by the Great Recession. The Department 126
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operated with an average staffing of 14.75 FTEs between the years 2011 through 2014. Beginning in Fiscal Year 2015, the staffing level was reduced and has remained at 11.0 FTEs.

The MRG project team conducted a high-level staffing, service d elivery and organizational structure analysis of the Public Works Department to achieve the following objectives:
x Evaluate service delivery methods and outcomes, utilizing City Council, City Manager, and Public Works staff input, and provide recommendations to improv e service delivery and outcomes;
x Evaluate staffing levels, positions, and contracted services in relation to the workload to provide recommendations as to appropriate staffing levels; and x Evaluate the Public Works Department’s organizational structure a n d p r o v i d e recommendations for improved efficiency and service delivery.

The report that follows represents the results of that review a nd analysis, which included interviews with Department staff, the City Manager, and each me mber of the City Council. The results were based upon these interviews as well as a review of best practices and organizational design, other municipal models, and an assessment of the current departmental environment.

ORGANIZATIONAL ASSESSMENT PROCESS AND METHODOLOGY
The organizational assessment consisted of the following three steps:

A. Document Review
MRG reviewed the City’s budget documents, staff cost allocation s, Lighting and Landscape District Engineer Reports, and Department job descriptions to d evelop an understanding of the City’s and Department’s financial position and organizational structure.

B. Staff and Customer Interviews
On January 14, 2021, the project was officially kicked off with an online meeting that included City Manager David Biggs, Public Works Director/City Engineer Michael Roberts, and MRG Consultants Mike Oliver, Mike Bakaldin and Charlene Harris. Mr. Biggs and Mr. Roberts provided a background overview of the Department as well as critical input and perspective on the history, culture and effectiveness of the City and the Department. The team also discussed and finalized the project scope of services and timeline.

O n J a n u a r y 2 7 , 2 0 2 1 , M R G h e l d o n - s i t e i n t e r v i e w s w i t h t h e C i t y Manager, the Public Works Director, and selected Department staff. The interviews focuse d on the individuals’ roles and responsibilities, their Division’s performance, service deliver y, measurements of effectiveness, resource allocation and potential opportunities for improvement . MRG held follow-up phone interviews with the Public Works Director and Superintendent to clarify details and ensure the accuracy of the report findings.
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In late January and early February of 2021, MRG interviewed eac h member of the City Council.

The interviews generally focused on service delivery and potent ial opportunities for improvement.

The complete list of interviewees is found in Attachment A. The interview questions are provided as Attachment B. These served as a guidepost for the interviews, and subseque nt questions were asked as issues were further identified or additional clarification was needed.

C. Comparative Municipality Review
The Consultants conducted a desk review of the organizational structures and assigned functions of four comparative municipalities in Contra Costa County. The se municipalities included El Cerrito, Pinole, Moraga, and Orinda.

KEY OBSERVATIONS AND FINDINGS
The review and analysis process led to the following key observations and findings. They identify opportunities for improvement in the Department’s organizationa l structure and serve as a roadmap to improve service delivery, operations, efficiencies, and management oversight. The recommendations in the next section are derived from the key observations and findings.

A. Public Works Department
The Public Works Department consists of two Divisions: Engineer ing and Maintenance & Operations.

The Public Works Director/City Engineer manages both Divisions, but is primarily focused on the Engineering Division in his capacity as the City Engineer. The Public Works Superintendent manages the Maintenance & Operations Division, while dedicating a significant portion of his time to support the Engineering Division. Key findings and obse rvations regarding the Department include:
x The Public Works Department utilizes outside consultants and co ntractors to provide a significant portion of the Department’s services. Department st aff is tasked with managing the contracts and overseeing the work product. The contract model appears to work well for the Department and allows for greater flexibility in managing the resources necessary to deliver services. However, there are challenges in managing the number of contracts and adequately overseeing the work product.
x The Department experienced significant personnel reductions bet ween 2011 and 2014, dropping from a high of 18 full-time positions to the current 11 full-time positions. x Due to the currently “lean” organizational structure, both the Department’s management personnel (Public Works Director/City Engineer and Public Works Superintendent) spend virtually all of their time performing staff-level work or mana ging everyday work functions. Currently, neither position has sufficient capacity to perform strategic planning 128
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o r d e v e l o p a n d i m p l e m e n t n e w p r o c e d u r e s a n d s y s t e m s t o i m p r o v e infrastructure reliability and work productivity.
x The Department does not perform regular personnel performance evaluations, except for p r o b a t i o n a r y e m p l o y e e s a n d e m p l o y e e s e l i g i b l e f o r s t e p i n c r e a s es, and lacks performance standards and workload measures for most of the key functions.

Consequently, the Department is hindered by a lack of clear exp ectations within an agreed framework of planned goals, standards, and competence requirements. x The Department does not utilize a work order or computerized maintenance management system (CMMS). Work assignments are typically distri buted verbally and currently there is no formal or informal follow-up process. Cit y-wide, there has been a recent effort by the City Manager’s office to track citizen complaints and service requests via a spreadsheet with an expectation that each complaint/reque st will be tracked up to final resolution. The City is also exploring implementation of an off-the-shelf work order system that could potentially be used by all departments to iss ue and track complaints, service requests and internally generated work.
x The Department lacks a succession plan, and the organizational structure does not provide a clear line of succession for the two leadership posit ions, Public Works Director/City Engineer and Public Works Superintendent.

B. Engineering Division
The Engineering Division administers the City’s Capital Improve ment Program; reviews and i n s p e c t s g r a d i n g a n d p u b l i c i m p r o v e m e n t s o n p r i v a t e d e v e l o p m e n t projects; reviews traffic engineering; issues encroachment and grading permits; and administers the City’s clean water and sewer lateral certification programs. Engineering staff pri marily provides counter service, address public inquiries, and manage outside consultants and contractors who perform the bulk o f t h e d e v e l o p m e n t p l a n r e v i e w s , c a p i t a l p r o j e c t d e s i g n , a n d c apital project construction management.

The Division is staffed by a Public Works Director/City Engineer and an Associate Engineer, and is supported by the Public Works Superintendent, who performs publ ic works inspections on encroachment permits and private development projects and assis ts with capital projects. Key findings and observations for the Engineering Division include:
x Prior to his appointment in 2014 as the Public Works Superinten dent, the incumbent s e r v e d a s t h e C i t y ’ s P u b l i c W o r k s I n s p e c t o r f o r o v e r 2 0 y e a r s . Because the Inspector position has not been filled, the Superintendent continues to s erve as the primary inspector for development projects, encroachment permits and sewer lateral repairs and replacements. These dual roles result in the Superintendent spe nding less than the required time managing the maintenance activities. The Associate Engineer serves as his backup. The Superintendent estimates that, on average, inspecti on and Engineering Division-related responsibilities account for 30 to 40% of his time. x Engineering staff reports that they do not have the capacity to inspect a significant portion of the encroachment permit work, especially the work performed by public utilities. Staff 129
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also has limited capacity to actively inspect development projects and ensure compliance with conditions of approval.
x The Engineering Division relies heavily on outside consultants to review plans and specifications for new developments. Staff members report that they no longer have the capacity to review the outside consultant’s development plan re view comments. As a result, plan review comments are typically transmitted directly from the consultant to the developer without review by City staff. Further, City staff has limited time to coordinate and manage the outside staff. The lack of City staff review, an d coordination of development plan reviews can lead to uneven conformance with Ci ty specifications and conditions of approval.
x V i r t u a l l y , a l l c a p i t a l p r o j e c t d e s i g n , c o n s t r u c t i o n m a n a g e m e n t , a n d p r o j e c t i n s p e c t i o n activities are performed by outside consultants. On occasion, E ngineering staff will manage a small capital project and perform the construction inspection in-house.

C. Maintenance & Operations Division
The Maintenance & Operations Division is responsible for the following:
x Maintaining the City’s public parks, landscape medians, streets, sidewalks, and facilities; x Ensuring clean stormwater and compliant wastewater discharge in to San Pablo Bay through the City’s creek and storm drain maintenance, street sw eeping and sewer collection programs;
x Graffiti abatement;
x Addressing illegal dumping; and
x Oversight of the City-wide Lighting and Landscaping Assessment District contracts.

Maintenance & Operations staff’s primary duties include:
x Providing janitorial service to City facilities except for City Hall; x Performing light building maintenance;
x Cleaning and light maintenance of City parks;
x Replacing and repairing streetlights and street signs; x Inspecting sewer lift stations;
x Removing graffiti and illegally dumped materials;
x Temporarily patching potholes;
x Responding to sewer overflows; and
x Performing limited pavement and curb marking maintenance. 130
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The Division is also responsible for overseeing outside contractors who:
x M a i n t a i n t h e C i t y ’ s p a r k a n d m e d i a n l a n d s c a p i n g , t r a f f i c s i g n a ls, vehicles, sidewalks, roadways, and building and sewer system mechanical and electrical systems; x Provide street cleaning, weed abatement, and pest control services; and x Clean and repair the sewer collection system.

The Maintenance & Operations Division is staffed by a Public Wo rks Superintendent, four Maintenance Worker II positions and four Maintenance Worker I p ositions, with one of the Maintenance Worker I/II positions currently vacant. Key findings and observations include:
x The Public Works Superintendent has insufficient time to organi ze, direct, and supervise the work of the Maintenance & Operations Division. In addition to his inspection duties, the incumbent supports the Engineering Division as needed, whic h on average, takes up to 40% of his time. Over the past year, the Superintendent estimated that he spent up to 50% of his time overseeing the City’s energy efficiency and con servation project (Engie).

In effect, the Superintendent has had approximately 10% of available time in the last year to oversee the Maintenance & Operations Division. The Superinte ndent’s primary office is located at City Hall, with a secondary office at the maintenance yard. x As a result of the Superintendent’s multiple responsibilities, Maintenance & Operations Division staff is primarily self-directed. Each Maintenance Wor ker is assigned several parks and buildings to maintain during their workweek. The firs t half of the typical weekday is spent performing janitorial work in the City’s build ings and park restrooms, inspecting sewer lift stations, and opening and inspecting parks and buildings. The second half of the day is spent resolving issues discovered during the morning, responding to public complaints and service requests, working on minor projec ts assigned by the Superintendent, inspecting contract maintenance work, or inspec ting an assigned zone for issues.
x The Division does not have clearly established standards or exp ectations for the various routine daily tasks that the staff perform. For example, once a maintenance worker cleans and opens a building and restroom, there is no accepted or set standard as to the minimum number of times the maintenance worker should return to each facility during the day to ensure cleanliness and safety. Further, there is lit tle to no day-to-day supervision of maintenance staff by the Superintendent. Consequently, staff performance and facility conditions are inconsistent due to a lack of clear expectations, accountability, and oversight.
x The Division does not have clearly established response time ex pectations for the most common requests for service, including pothole repair, street l i g h t r e p a i r o r g r a f f i t i removal. Staff members stated that graffiti and illegal dumping requests for service are typically handled within 48 hours, and that street light outages can take up to a week. x The Division does not have the equipment or materials for asphalt work beyond the temporary repair of potholes with cold patch. More permanent as p h a l t r e p a i r s a r e prioritized and either performed under the annual asphalt maint enance contract or 131
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incorporated into the City’s asphalt management program and per formed in later years.

It is the City’s practice to defer permanent patching and repai r s t o e i t h e r t h e a n n u a l contracted repair project or the CIP program, which can take years to implement. x Maintenance is primarily conducted in a reactive mode, although there has been an effort to be more proactive. Recently, staff divided the City into eig h t z o n e s t o m a t c h t h e number of budgeted maintenance workers. Each worker is expected to drive through the assigned zone at least once during the calendar month to identi fy potholes, faded pavement markings and street signs, graffiti, and any other pot ential issues. The zones are rotated each month so that there is a fresh set of eyes loo king for items in need of repair or replacement.
x The Division does not formally track completed or outstanding work, resulting in the lack of a potential work backlog. However, Division staff members we re consistent in the belief that there were no outstanding items or projects in need of immediate attention.

That belief is partially supported by the following:
ƒ In the last two years, the Division had the entire sewer collection system cleaned and video inspected by contract. Per the Public Works Superintenden t, the City only experiences, on average, one sanitary sewer overflow per year; ƒ In the last two years, all street name signs were replaced by staff; ƒ T h e v a s t m a j o r i t y o f t h e C i t y ’ s s t r e e t l i g h t s a r e n e w e r L E D f i x tures, which have an anticipated service life of at least 15 years, thereby minimizi ng the number of bulb replacements needed as compared to the older high-pressure sodium streetlights that require replacement every three to five years; and
ƒ None of the interviewed staff or Council members highlighted serious issues with the City’s facilities or infrastructure, except for concerns with t he condition of the City’s roadways and a perceived long lag time to perform necessary repairs. x Maintenance staff’s perception that there is no work backlog su ggests that the Maintenance & Operations Division is adequately staffed for the amount of work that it performs in relation to the amount of work that is contracted o ut. A widely accepted standard is that properly functioning maintenance organizations should have a work order backlog of approximately four weeks.

The backlog allows for proper planning and procurement of neces sary contractors, equipment, or supplies prior to the start of work. Longer backlogs lead to poor employee morale due to overwork, loss of confidence that work will be do ne, and the slow degradation of infrastructure. Shorter backlogs lead to difficulty in keeping maintenance staff focused on priority work, increase unplanned work, and result in falling productivity.

However, the lack of a work order system and historic work and performance data does not allow for quantitative verification that the Division is properly resourced. x Under the City’s Memorandum of Understanding with Local 315, “t wo Public Works Maintenance Workers will be designated as "Lead Workers" and will receive 5% additional duties pay.” The MOU does not define the expected duties and responsibilities 132
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of the “Lead Worker.” The Department practice has been to give lead pay to one Maintenance Worker II to assist the Public Works Superintendent in overseeing the landscape contract and for another Maintenance Worker II to ass ist the Public Works Superintendent in overseeing the street lighting system and sewer lift stations. The actual authorities and expectations of the two maintenance workers des ignated as “Lead Workers,” both in terms of contract oversight and providing dir ection or technical and functional supervision to other maintenance workers, is not clearly defined or understood by staff. Typically, a Lead Worker, consistent with position c lassification standards, is d e f i n e d a s a n e m p l o y e e w h o h a s o n e o r m o r e e m p l o y e e s a s s i g n e d to their area of expertise and who directs, plans, schedules, assigns, and reviews the work of assigned employee(s). Lead Workers do not have supervisory authority. x In the absence of the Public Works Superintendent (vacations, e tc.), it has been the practice to assign one of the two “Lead Workers” to assume some of the duties of the Public Works Superintendent. The acting assignments do not typi cally come with additional pay unless the absence is for two weeks or more. Add itionally, there appears t o b e in c on sist e n t c o m m u n ic a t io n t o m a in t e n a n c e st a f f w h e n an acting assignment is made. This results in a lack of clarity about assigned duties and reporting expectations during the acting assignment.
x T h e D i v i s i o n h a s n o t i n s t i t u t e d a n e m p l o y e e s t a n d b y p r o c e d u r e for after-hours emergencies. The current practice is for Police Dispatch to fir s t c o n t a c t t h e Superintendent for after-hours emergencies. The Superintendent is expected to be available for requests for service or assistance. When the Superintendent is not available, Police Dispatch works down the list of maintenance workers, and if no staff are contacted, the issue goes unaddressed. One exception are sewer overflow calls, where Dispatch has the option to call the City of Pinole collection staff for assistance. x T h e D ivi sio n p r o vid e s w e e k e n d c o ve r a ge f or p a rk s a n d f a c il it ie s with full-time staff by assigning two Maintenance Workers a Wednesday through Saturday shift and two Maintenance Workers a Sunday through Wednesday shift. All othe r maintenance staff work Monday through Thursday, except for the Superintendent, wh o works Tuesday through Friday to ensure adequate staffing and oversight on Friday. x All maintenance staff have credit cards and procure necessary p arts by driving to hardware stores and other suppliers. The maintenance yard does not have a central storeroom, nor does there appear to be a system to minimize the number of visits to retail outlets or to procure and store commonly used parts and supplie s at the maintenance yard.
x T h e D i v i s i o n h a s n o t m a p p e d o r i n v e n t o r i e d m a n y o f t h e a s s e t s that it operates and maintains, such as pavement markings, street signs, and trees. The City, as a whole, does not have a Geographical Information System (GIS).
x There currently are staff that have been in the entry-level Mai ntenance Worker I classification for over 10 years, even though they may have the requisite experience and qualifications to function as a Maintenance Worker II. Operati onally, there is no clear distinction between the duties and responsibilities performed b y the Maintenance 133
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Worker I or II. While the Maintenance Worker I/II classification could function as a flexible staff classification, the Department is not managing the classification in that way.

COMPARATIVE MUNICIPALITIES
MRG conducted a desk review of the organizational structure and functions of public works- related functions in four selected comparable California munici palities. The four selected municipalities are all small cities or towns in Contra Costa Co unty that rely heavily on contract support to deliver services. All four deliver a range of services similar to the services provided by Hercules, with one exception. Pinole is the only other municipa lity that operates and maintains a sewer collection system. Pinole is additionally unique in that it is the only selected municipality that operates a wastewater treatment plant, which coincidentally also serves Hercules. Copies of the organizational charts for the four comparative municipalities are provided in Attachments C- 1 through C-4.

All the comparable municipalities are structured differently, w ith some assigning park maintenance, facility maintenance, janitorial, and median maint enance to their parks and recreation departments. MRG accounted for all positions performing services matching those of Hercules’ Public Works Department, regardless of department. Po sitions performing functions not found in Hercules, such as wastewater treatment plant staff in Pinole, or recycling center staff in El Cerrito, were excluded from employee counts. The key data are referenced in Table 1, below:

Table 1 – Comparative Municipalities Public Works-Related Functions Agency Population1
Public Roads
(maintained
miles)2
Collection
System
(miles)
Engineering
Staff
O&M
Staff
Total
Public
Works
Employees
Total PW
Employees
/10,000
Population
Pinole 19,500 53 49 3 10 13 6.7
El Cerrito 25,000 72 NA 5 14 19 7.6
Orinda 19,000 92 NA 7 53 12 6.3
Moraga 16,900 63 NA 5 6 11 6.5
Comp
City Avg 20,100 70 49 5 9 14 6.8
Hercules 25,500 55 63 2.54 8.54 11 4.3
1 California Department of Finance Population Estimates - May 2020. 2 Caltrans California Public Road Data - December 2020. 3 O&M staffing reduced to 5 from 7 in FY 2020-2021 to address COVID financial impact. 4 The Public Works Superintendent position was estimated to split time equally between Engineering and Maintenance & Operations.

A review of the organizational charts of the comparable municipalities indicates that each of the four organizations have more management and supervisory positions allocated to oversee public works-related functions relative to Hercules. The higher level of management and supervisory positions allow for increased levels of staff supervision and contract oversight, additional capacity for strategic planning and implementation of workload and performance measurement systems, and improved succession planning.
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As shown in Table 1, above, the data suggests that the Department, as a whole, is understaffed in comparison to the other municipalities, especially after normalizing the number of employees per 10,000 population. When combined with the key findings and observations, MRG believes that the Engineering Division, more specifically, requires additional resources. The primary areas of need are public works inspection and oversight and coordination of outside consultants.

The municipality comparison suggests that the Operations & Main tenance Division is also understaffed. However, the key findings and observations indica te that the Division could be a d e q u a t e l y s t a f f e d a n d t h a t t h e existing Maintenance Worker vac ancy could be partially reallocated to areas of greater need and priority. A more meaningful assessment of the resource needs of the Department would require at least a year’s worth o f workload and performance measurement data performed at the desired level of service. The Department could then more accurately ascertain the work that can and needs to be done as opposed to the work that is being done with existing staff and contract support levels.

RECOMMENDATIONS
While it is tempting to assume that increases in staff would so lve most operational issues, the reality is that there are limits on the City’s ability to fund increases in permanent staff. For that reason, it is incumbent upon management to implement operational best practices and systems that create efficiencies and enhance the utilization of current resources; adopt standardized expectations for quality service delivery; and establish proces ses that ensure current personnel are as knowledgeable and widely trained as is practicable. With these considerations in mind, the recommendations in this report are focused on enhancing the ope rations and effectiveness of the Public Works Department.

Our recommendations are organized into three categories to faci litate review and analysis. The recommendations are focused on developing practical and impleme ntable suggestions that will improve the Department’s organizational effectiveness and susta inability. These recommendations are not intended to be implemented all at the s ame time. Some of the personnel recommendations can be considered immediately due to the current vacancy in the Department, while others can be scheduled for implementation over a longer period of time.

A. Staffing
Staffing recommendations are designed to provide options for addressing the findings. They are not described in absolute terms, but may be modified and implem ented in combination with operational modifications. They include responses to address long-term organizational needs and seek to improve employee efficiency.
x Reclassify a vacant Maintenance Worker I/II position and create a new Public Works Specialist (Inspector) classification.

The creation of a dedicated Public Works Specialist (Inspector) position addresses several of the Department’s most pressing issues:
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ƒ By removing the inspection duties from the Superintendent, it frees the Superintendent to provide the necessary oversight and direction to maintenance staff and the time to implement a work order system, performance or workload measures and other management tools.
ƒ A common theme during the interviews was that there was inadequ ate oversight of development projects and encroachment permit-related work in th e City’s right-of- way. A full-time dedicated inspector would ensure a more regula r and consistent set of eyes in the field.
ƒ The new position could assume some of the duties currently perf ormed by the Associate Engineer, such as overseeing the sewer lateral inspec tion program and viewing the sewer lateral CCTV footage, freeing the Associate Engineer to review and coordinate the work of outside consultants.
ƒ The Specialist could be assigned oversight of the City-wide lan dscaping contract, which would partially offset the loss of the Maintenance Worker position by freeing up the Superintendent and Maintenance Worker II currently taske d with overseeing the contractor.
ƒ The City Council and other stakeholders have expressed a desire f o r e n h a n c e d oversight of the landscape contractor. Assigning the new position to an individual who i s t r a i n e d a n d e x p e r i e n c e d i n i n s p e c t i n g c o n t r a c t w o r k a n d e n f orcing contract provisions, would satisfy that goal.
ƒ By titling the new position as a “Specialist” rather than an “I nspector,” the City can add administrative and project management duties to the job spe cification to make the position more versatile and supportive of other Engineering Division functions.

The City of Pinole uses the Public Works Specialist title for its Inspector role. x Consider creating a new Public Works Supervisor classification.

The creation of a working supervisor position addresses several of the Maintenance & Operations Division’s most pressing issues:
ƒ An appropriately classified position to assist in the oversight and management of the City’s numerous outside contractors and vendors.
ƒ A clear line of authority in the absence of the Superintendent. ƒ A path of succession and promotion within the Division. ƒ A position to assist in the development and implementation of n eeded system improvements discussed in the recommendations below.

The City could consider filling this position as additional fun ding becomes available.

Alternatively, this position could be evaluated in anticipation o f a v a c a n c y i n t h e Maintenance & Operations Division.
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x Consider shifting janitorial duties for all City buildings and potentially park restrooms from full-time staff to contract services.

Currently, full-time maintenance workers provide janitorial ser vices to City facilities except for City Hall, which has a janitorial contract. Several maintenance workers spend the first hours of each daily shift cleaning all City facilitie s, including park restrooms.

Interviewed staff believed that janitorial service could be pro vided more efficiently and cost-effectively by a janitorial contractor, with building clea ning occurring after hours in the evenings. The City could consider this transition as additi onal funding becomes available. Alternatively, this transition could be evaluated in anticipation of a vacancy in the Maintenance & Operations Division. In the absence of a work o r d e r s y s t e m , t h e Department would first need to track staff hours spent on janitorial services to verify the staffing currently committed to janitorial services, obtain an estimate of the square footage of all City buildings, determine a potential range of c osts for contract janitorial services, and determine if there are cost savings and service b enefits to replacing staff with contract services.
x Consider creating a Maintenance Aide classification and shifting the weekend parks and facilities duties from two full-time Maintenance Workers to one full-time Maintenance Worker supported by part-time staff.

Two full-time maintenance workers provide janitorial and porter services during the w e e k e n d s t o C i t y p a r k s a n d o t h e r o p e n f a c i l i t i e s . T h e t w o f u l l -time employee configuration is not varied by season or usage, resulting in po tential overstaffing during bad weather or off-season and potential understaffing on holida y or peak usage weekends. Using part-time staff to perform the mostly menial weekend duties would be more cost-efficient and allow greater flexibility in staffing. Greater numbers of staff could be brought in for busy weekends and lower numbers for off-season, low-usage weekends.

The City could consider this transition as additional funding b ecomes available.

Alternatively, this recommendation could be evaluated as part of the recommendation to consider expanding the contract janitorial services in anticipa t i o n o f a v a c a n c y i n t h e Maintenance & Operations Division.
x Consider using the Maintenance Worker I/II as a flexibly staffe d classification and/or better differentiate between the two levels.

Using the Maintenance Worker I/II as a flexibly staffed classification allows qualified staff to progress from Maintenance Worker I to Maintenance Worker II once the employee’s performance, experience, skills, and knowledge clearly demonstr ate a promotion is warranted. Flexible staffing is a commonly used administrative tool that r ecognizes positions where the organizational need for assigning work span s more than one class level. In a flexibly staffed position, an employee may be initially appointed to one class level (e.g., the entry level), and then be promoted to the next level (e.g., the journey level) without a competitive process. The most common flexible staffin g involves entry- and journey-level classifications. Certain positions may be permanently allocated at the lower 137
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level because the duties do not warrant an upgrade to the highe r level no matter how well an incumbent performs the duties. However, this does not appear to be the situation in the Department, since no clear distinction is made between the work performed by the Maintenance Worker I and II classifications. A decision to use the Maintenance Worker I/II classification as a flexibly staffed classification would allow maintenance worker incumbents to promote from the entry-level to the journey-level classification once the employee’s performance clearly demonstrates a promotion is warranted. x Consider creating a Senior Civil Engineer classification.

Adding a Senior Civil Engineer classification gives the Departm ent the flexibility to promote qualified staff from Assistant to Associate to Senior o nce the employee’s performance, experience, skills, and licensing clearly demonstr ate a promotion is warranted. Adding the classification would potentially increase retention, which is critical for the Department, since there is only one Engineer position. Additionally, if the Department hires or promotes to the senior level classification , it provides a more likely potential candidate for Public Works Director/City Engineer for purposes of succession planning and organizational continuity.

B. Organizational Modifications
These recommendations focus on improving the Department’s effec tiveness. The recommendations also include enhancement of support services an d realignment of internal assignments.
x Ensure that Engineering staff coordinates and reviews outside r eviewer comments for development projects prior to forwarding to developers/applicants.

Currently, Engineering staff does not have the capacity to review and coordinate the work of its consultants tasked with reviewing development project plans. If the City creates and f i l l s t h e r e c o m m e n d e d P u b l i c W o r k s S p e c i a l i s t p o s i t i o n a n d r e a ssigns some of the Associate Engineer’s current duties to the Specialist, such as overseeing the sewer lateral inspection program and viewing the sewer lateral CCTV footage, the Associate Engineer will have additional capacity to review and coordinate the work of outside consultants. x Provide enhanced oversight of the City-wide landscape contract.

A s p r e v i o u s l y m e n t i o n e d , t h e p r o p o s e d P u b l i c W o r k s S p e c i a l i s t / Inspector would be a fitting position to oversee the City-wide landscape contractor. The new position would primarily be field oriented and expected to drive throughout th e City inspecting work in the City’s right-of-way. Monitoring the landscape work is a sen sible add-on to the position’s field duties, and provides the City with a higher le vel of oversight, since the Specialist will be trained and experienced in inspecting contra ct work and enforcing contract provisions.
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Alternatively, the proposed Public Works Supervisor position could oversee the City-wide landscape contractor, and the Public Works Specialist/Inspector could be assigned additional duties in the Engineering Division to allow the Associate Engineer to focus more time on outside consultant oversight.
x Relocate the Public Works Superintendent to the Maintenance Yard.

The Public Works Superintendent should be permanently housed at the Maintenance Yard to provide appropriate oversight, coordinate work, and generally be more visible to Maintenance & Operations staff.
x Establish performance or workload measures for the Department.

I t i s i m p o r t a n t t o e s t a b l i s h p e r f o r m a n c e m e a s u r e s a n d g o a l s t o ensure that staff is delivering projects and services within established standards a nd expectations.

Performance and workload measures also provide a meaningful way to justify additional resources, if necessary.

The best measures are derived from the perspective or expectations of the customer. For permits and approvals, that would include residents, contractors, or developers, while for capital projects and maintenance services, that would include e ither residents, other departments, or a combination of both. Performance measures sho uld cover timeliness, quality of services, customer satisfaction and/or cost. A typic a l outcome-based service objective may be to process an encroachment permit within a specified time period. The objective would be confirmed by the public as a desirable level o f se r vic e . T h e a c t u a l performance measure would be the percent of permits over a give n period of time processed within the desired timeline.

The absence of performance measurement does not necessarily mean that the staff does not focus on its customers or is not effective. However, a prop erly implemented performance measurement system ensures that staff understands i ts customers’ needs and can focus on meeting and/or exceeding those expectations. x Establish clear timelines for response to the most common requests for service.

Develop a response matrix for the most common service requests that includes a timeline for response. In setting the timelines, staff should be realist ic with its ability to consistently meet the timeline. Customers typically are understanding in non-emergency situations if they are informed of the expected response time and observe that the issue was addressed in the stated time. Both staff and customers will generally be more satisfied with a 99% response rate for a two workday graffiti a batement timeline rather than a 50% response rate with a one workday graffiti abatement timeline. As a possible enhancement to clearly communicating the response commitment to internal staff, citizens, and the City Council at the time of the request, the response matrix could be posted to the City’s website. If properly tracked and managed, the response matrix could be used as a performance measure.
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x Clarify expectations, standards, and frequency of inspection fo r the Maintenance & Operations Division’s monthly public right-of-way inspection program.

Develop a checklist that clarifies expectations for the Mainten ance Workers assigned to perform the monthly inspections of the City’s infrastructure. This would be a good task to track via the work order system.
x Consider establishing a standby procedure and rotation that inc orporates all qualified maintenance staff.

The current practice of solely relying on the Superintendent fo r after-hours emergency calls is not sustainable. The maintenance staff could be cross trained in the practices and procedures of the most common after hour emergency situations a nd be given the opportunity to be placed on a standby list. The City has an exi sting standby provision in the MOU with Local 315, which may need to be modified to ensure it meets the City’s needs and budget limitations. As it stands now, the City is obligated to pay a cash amount o n t o p o f a n h o u r l y r a t e f o r s t a n d b y , w h i c h i s a f a i r l y g e n e r o us provision. With the proliferation of cell phones, standby is no longer the burden i t was in the past, where a standby employee could not leave his/her house while on call or had to find a phone after being paged. Today, a standby employee is free to leave their h ome, with only the limitation of staying within one hour’s driving distance of the City. Another potential cost saving measure would be to assign weekend standby to employees normally assigned to w o r k w e e k e n d s . A f i n a l c o n s i d e r a t i o n i s t o i n c e n t i v i z e s t a f f t o resolve emergency situations by phone, where appropriate, without having to respo nd in person. A typical provision would be to pay a half-hour minimum for any call resolved by phone. x Ensure performance evaluations are completed consistently and in a timely manner.

The City does not have a formal performance management program. Rather, department heads are expected to complete annual employee performance eval uations for each respective performance evaluation period. While the Public Works Department has done a g o o d j o b o f c o m p l e t i n g p e r f o r m a n c e e v a l u a t i o n s f o r p r o b a t i o n ary staff on a timely basis, performance evaluations have not been completed in a con sistent or timely manner for Department staff who have successfully completed the ir probationary periods. Performance evaluations will be especially important o n c e t h e D e p a r t m e n t implements performance and workload measures. Late performance evaluations send a message that employees are not important enough to set aside sufficient time to conduct evaluations in a timely manner, which can negatively impact morale and productivity. The Public Works Director should ensure that evaluations for all De partment employees are conducted in a timely manner.
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x Establish consistent and well-defined expectations and lines of authority in the Superintendent’s absence and clarify when “Additional Duties” pay will be applied.

Currently, there is a lack of clarity regarding who is in charge when the Superintendent is absent. One of the issues appears to be inconsistent communicat ion about which “Lead Worker” is in charge, especially during absences of a week or less. Another issue appears to be that the “Lead Workers” don’t understand or accept the ex pected responsibilities during brief absences, since it appears they are not given “Add itional Duties” pay. These issues of “Additional Duties” pay and “Lead Worker” assignments would be resolved should the Department adopt the recommendation to establish a P ublic Works Supervisor classification. Typically, the assignment of duties to cover during an absence is assigned to a lower-level classification within the organizatio n’s classification hierarchy.

With the addition of the Public Works Supervisor, any work nece ssitated by the absence of the Public Works Superintendent would be assigned to the Pub lic Works Supervisor.

Nevertheless, the City should develop a policy or procedure that clarifies when either the “Additional Duties” or “work in a higher-class” MOU provisions apply when an employee is requested to assume some or all of the duties of his/her supervisor. x Better define the “lead worker” language in the Local 315 MOU.

The City should clarify the expectations and responsibilities o f those maintenance workers receiving the “Lead Worker” pay. Better definition will help clarify lines of authority, especially in the absence of the Superintendent.

C. Technical and Equipment Enhancements
These recommendations focus on enhancing operational effectiven ess, providing essential systems management and equipment to improve productivity, and providing data to avoid costly repairs or service interruptions.
x Implement a basic work order and tracking system to begin track ing work output and scheduling recurring preventative maintenance activities.

There are numerous off-the-shelf work order systems or computer ized maintenance management systems (CMMS) that the Department could implement f airly quickly and inexpensively. Such a system would allow the Department to start scheduling and tracking work to ensure items are not missed. The system, if properly installed and managed, will assist in establishing appropriate accountability measures, all ow performance measurement of responses to service requests, and reporting wor k output and performance measures to the City Manager, City Council and the public. A work order system will also allow the Maintenance & Operations Division to schedule recurring maintenance items, such as storm and roof drain and gutter clea ning, and ensure they are completed on schedule and documented. Implementation of the system will require a significant up-front effort on the part of the Superintendent or the proposed Public Works Supervisor position.
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x Start mapping and inventorying maintained assets during the mon thly inspection program.

As part of their monthly inspections, assign maintenance staff t o b e g i n m a p p i n g a n d inventorying the inspected assets within their inspection zones. The initial mapping and inventorying could be done on paper. Once mapped and inventoried, an employee should be designated as the keeper of the master inventory list and map to ensure all additions, deletions, or corrections are funneled through one person. Ultimately, the data could be added to a City-wide Geographic Information System.
x Develop an agreement with the City of Pinole or another neighbo ring agency to gain access to pavement patching equipment to improve road maintenance.

Gaining access to an asphalt patch truck on a scheduled basis will allow the Maintenance & Operations Division to make more permanent repairs in-house. This would resolve concerns about the length of time involved in making the repairs via the annual pavement contracts.

PROPOSED ORGANIZATIONAL STRUCTURE
A recommended Department organizational design model is provide d in Attachment D. T h e recommended model is based on an objective analysis of interview input, available data, MRG knowledge of organizational design practices, and where appropr iate, reference to the comparative municipal analysis. The rationale for the recommend ed structural changes is specified throughout the report. The recommended organizational structure provides the following benefits:
x Reallocates Department staff to areas of greatest need – public works inspection, outside engineering consultant oversight, and landscape contract oversight through the creation of a Public Works Specialist position.
x Creates a Public Works Supervisor classification that provides for both staff development opportunities and succession planning.
x Reallocates staff resources and responsibilities to provide ade quate management and supervisory-level staff to develop and implement necessary proc edures and systems for performance and workload management.

CONCLUSION
The Public Works Department provides important services to the community. Our proposed recommendations are intended to provide the Department an unbia sed and objective view of the organization’s current status and potential opportunities t o address the identified areas of improvement. The process to implement the proposed recommendati ons will take time and perseverance, considering current staffing and resource limitations. A measured and incremental approach, combined with strong leadership in the Department, an d a partnership with the City 142
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Council in making budget decisions and setting priorities, can be successful in implementing the proposed recommendations and in ensuring a more efficient and e ffective Public Works Department. The outcome will be enhanced quality services to th e community. We thank the City Councilmembers, City Manager, and participating Department staff for the opportunity to assist in this process.

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City of Hercules - Public Works Department Organizational Review and Analysis ATTACHMENT A Municipal Resource Group, LLC Report

ATTACHMENT A

LIST OF INTERVIEWEES

City Council Members

Chris Kelley, Mayor

Dion Bailey, Vice Mayor

Alexander Walker-Griffin, Councilmember

Dan Romero, Councilmember

Tiffany Grimsley, Councilmember

City Staff

David Biggs, City Manager

Michael Roberts, Public Works Director

Jeff Brown, Public Works Superintendent

Jose Pacheco, Associate Engineer

Eric Wright, Maintenance Worker II

Vergel Botin, Maintenance Worker I

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City of Hercules - Public Works Department Organizational Review and Analysis ATTACHMENT B Municipal Resource Group, LLC Report

ATTACHMENT B

LIST OF INTERVIEW QUESTIONS

City Council Interview Questions

1. Which Public Works Department services – development services, capital projects, and maintenance - are you most familiar with as a Council Member? as a customer?

2. For each of the three broad Public Works areas of responsibility - development services, capital projects, and maintenance – what is your overall experience or impression?

3. What do you believe is working well in the Public Works Department?

4. What do you believe needs improvement in the Public Works Department?

5. Given funding and staffing constraints, which services or responsibilities do you believe deserve the highest priority?

6. Do you have any specific recommendations for service enhancement, efficiency gains, or additional sources of revenue to fund improvements?

7. Is there anything you would like to add that we have not covered today?

City Staff Interview Questions

1. How long have you worked for the City in your current position? overall?

2. What are your key duties and what percentage of your time is spent on each key duty?

3. Are your duties, performance expectations, and work unit goals clearly defined and understood by you?

4. In your absence, who performs your duties?

5. Do you or anyone in your unit manage any outside staff or contracts? a. What is the annual value of each contract and how much time i s spent managing each contract?
b. Do you believe that contracting is the best way to service th ose functions? c. Are there any other functions that you believe could be bette r performed or supported by contract, another department or outside agency?

6. Do you have the appropriate resources and authority to achieve the objectives of your work unit? If not, what do you believe you need?

7. What are the most critical issues facing your work unit right now? Over the next 3 years?

8. What are your unit’s strengths? Its weaknesses?

9. What do you believe your work unit should be doing that it is not? Projects? Tasks?

10. Do you believe your work unit is staffed properly? What changes would you recommend?

11. Do you have any suggestions related to your unit’s or Department’s current organizational structure/assignment of tasks to make it more effective and efficient?

12. What do you feel is working well with the Public Works Department overall?

13. What needs to improve with the Public Works Department overall?

14. Is there anything you would like to add that we have not covered today? 145
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City of Hercules - Public Works Department Organizational Review and Analysis ATTACHMENT C-1 Municipal Resource Group, LLC Report
ATTACHMENT C-1

CITY OF PINOLE
Organizational Chart

Development Services
Director/City Engineer
Public Works Manager
Public Works
Supervisor
Maintenance Worker
(5)
Treatment Plant
Manager
(not counted)
Public Works
Supervisor
(Collections)
Maintenance Worker
(2)
Senior Project
Manager
Public Works Specialist
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City of Hercules - Public Works Department Organizational Review and Analysis ATTACHMENT C-2 Municipal Resource Group, LLC Report
ATTACHMENT C-2

CITY OF ORINDA
Organizational Chart

Assistant City
Manager/Public
Works Director
City Engineer
Senior Civil
Engineer (2)
Public Works
Inspector
Assistant
Engineer
Public Works
Maintenance
Supervisor
Maintenace
Worker III
Maintenance
Worker II
Sr. Admin
Assistant
Director of Parks
& Recreation
(not counted)
Facilities & Parks
Supervisor
Facility
Maintenance
Worker II
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City of Hercules - Public Works Department Organizational Review and Analysis ATTACHMENT C-3 Municipal Resource Group, LLC Report
ATTACHMENT C-3

TOWN OF MORAGA
Organizational Chart

Public Works
Director/Town
Engineer
Senior Civil
Engineer
Associate Civil
Engineer
Engineering
Technician
Manager Public
Works/Parks
Maintenance
Senior
Maitenance
Worker
Lead
Maintenance
Worker
Maintenance
Worker (3)
Administrative
Assistant
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City of Hercules - Public Works Department Organizational Review and Analysis ATTACHMENT C-4 Municipal Resource Group, LLC Report
ATTACHMENT C-4

CITY OF EL CERRITO
Organizational Chart

Public Works
Director/City Engineer
Senior Engineer
Associate Engineer
Engineering Technician
Operations &
Environmental
Services Manager (0.5)
Maintenance
Superintendent
Maintenance
Leadworker (2)
Maintenance Worker
(4)
Management Assistant
Management Assistant
Recreation Director
(not counted)
Aquatics & Facilities
Supervisor (0.5)
Custodial Maintenance
Lead Worker
Custodians (4)
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City of Hercules - Public Works Department Organizational Review and Analysis ATTACHMENT D Municipal Resource Group, LLC Report

ATTACHMENT D

HERCULES PUBLIC WORKS DEPARTMENT
Proposed Organizational Structure

Public Works
Director/City
Engineer
Public Works
Superintendent
Public Works
Supervisor
(New)
Maintenance
Worker I/II (6 or 7)
Associate Engineer
Public Works
Specialist/Inspector
(New)
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SUMMARY OF BUILT AND APPROVED RESIDENTIAL UNITS AS OF FEBRUARY 28, 2022

Since January 1, 2020, the following residential projects have been completed and received certificates of occupancy:

x Bayfront Block N (“The Exchange”): 172 multi-family units (162 apartments, plus 10 townhouses) x Bayfront Blocks Q & R (“The Grand”): 232 apartments

Other projects which have approved entitlements but which have not yet applied for building permits include:
x Bayfront Blocks M & P (“The Mint”): 267 apartments
x Bayfront Block O (“The Harbor House”): 120 apartments x Sycamore Crossing: 120 townhouses
x Hill Town: 598 multi-family units

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Attachment 11 to
3/08/22 staff report
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STAFF REPORT TO THE CITY COUNCIL

DATE: Regular Meeting of June 14, 2022

TO: Members of the City Council

SUBMITTED BY: Dante Hall, City Manager
Edwin Gato, Director of Finance

SUBJECT: Public Hearing on Proposed FY 2022-23 City of Hercules Budget Plan including the First Year of the Five Year 2022–27 Capital Improvement Plan

RECOMMENDED ACTION:

Open the Public Hearing, Receive the Staff Report, Take Public Testimony, and Continue the Public Hearing to June 28, 2022.

COMMISSION/SUBCOMMITTEE ACTION AND RECOMMENDATION:

The Finance Commission reviewed the proposed FY 2022-23 Budget at their regular meeting on May 18, 2022, and special meeting on June 8, 2022, and expressed full support of the budget.

FISCAL IMPACT OF RECOMMENDATION:

Presuming Council approves all of the changes and adopts all of the proposed, the City is projected to end the year with a General Fund balance of $760K, $1.6 million of American Rescue Plan (ARPA) Funds in the revenue loss category, and $4 million in operating reserve, which is equivalent to 25% of the General Fund budget.

DISCUSSION:

The City Council received an introduction of the proposed Five-Year Capital Improvement Plan (CIP) and FY 2022-23 Enterprise and Internal Service Fund Budget at its April 26, 2026, City Council meeting. On May 10, 2022, the second phase of the budget introduction was presented for the proposed FY 22-23 General Fund and other restricted funds budget. This is the first public hearing of the full recommended budget. Based on Council’s concurrence or alternative direction received this evening, the desired changes (if any) will be incorporated into the final FY 2022-23 Budget and recommended for adoption by the Council on June 28, 2022.

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Cautiously Optimistic
The City of Hercules has worked hard to maintain quality services to the public in these trying economic times. Although the City’s finances are stable today, expenses continue to grow, and future challenges associated with pension costs, workforce retention and attraction, and aging infrastructure also loom. Recent expenditures indicate significant future cost increases for goods and services (as a result of high inflation), market disruptions from the war in Ukraine, and supply chain issues (due to the impacts of the COVID-19 pandemic). Additionally, Hercules relies on UUT proceeds to fund a wide range of services including maintenance of public properties, staffing, and providing for public safety. If the UUT is allowed to expire in January 2025 without being continued, the loss of approximately $3.5 million a year in revenue would drastically impair the City’s ability to provide even a minimal level of service. If we are required to make budget cuts that may include police and neighborhood patrols, street maintenance, parks, senior services, youth programs, and economic development, we risk a decline in our quality of life. Given these concerns, the FY 2022-23 Operational Budget is focused on modest to net-neutral operational adjustments to better align public demand with available resources.

Alignment with City Council 2022-2023 and Multi-year Priorities The City of Hercules held a Council goal-setting workshop on Saturday, April 30, 2022, to review and discuss priorities, celebrate recent successes, and strengthen teamwork. City Council members established that substantial progress on the Regional Intermodal Transit Center (RITC), long-term financial sustainability of the organization, and the continuance of quality service delivery to the community as the top priorities for FY 2022-

23. The budget proposal incorporates an overall increase of 3% increase to account for inflation and a few other adjustments to address gaps in organizational efficiency and effectiveness.

The chart below describes the notable changes, along with the economic impact associated with each adjustment.

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Title Fund/Department Description Justification Budget
Impact
Animal Control
Services
General Fund/Public
Works
An increase in Animal Control
and sheltering services provided
through an agreement with the
Contra Costa County Animal
Service Department from
$182,000 to $210,000 annually.

Although the City’s costs will
increase under the proposed
agreement, City staff believes it
is beneficial to the City to
execute the new agreement with
more clarity and commitment
from Animal Services on service
levels and contributes to the
financial sustainability of Animal
Service programs.
$28,000
Associate Planner General
Fund/Community
Development
An Increase in consulting
services cost for an Associate
Planner hourly rate from $95 to
$130 and from 16 to 20 hours a
week from $105,000 to
$125,000 annually.

Consulting services to provide
research and analysis to
develop a suitable plans for a
particular projects, devising
strategies to optimize
procedures.
$20,000
Code Enforcement General
Fund/Community
Development
An Increase in CSG consulting
services cost to provide code
enforcement from $70,000 to
$130,000 annually.

To provide support for all
aspects of code enforcement
programs in identifying code
violations and engaging
stakeholders and responsible
parties to correct violations.
$60,000
Training General Fund/City
Manager
To fund staff team building and
community engagement
training.

To enhance employee
performance, boost employee
productivity, reduce employee
turnover, and improve company
culture.
$16,000
Staffing change General Fund/City
Clerk
To upgrade a part-time to full-
time Senior Clerk I position for
general administration support
managed by the City Clerk's
office.

The proposed change is cost
neutral and comparable to the
salary of the part-time position
paid at a higher class pay.

Furthermore, the City will
evaluate the current level of
staffing to meet City Council’s
strategic directives identified
during its strategic planning
workshop held on April 30, 2022.
$0
Janitorial Services Facilities
Maintenance ISF
Increase in janitorial services
contract from $60,000 to
$150,000.

To enhance commercial
cleaning services.
$90,000
Creation of Facilties
Replacement Fund
Facilities
Replacement ISF
(New)
The City has accumulated a
cash balance in the Facilities
Maintenance fund. Staff
recommends allocating
approximately 50% of the
balance to the newly created
ISF or $279,000.

To ensure the new fund have
adequate balance to provide a
reserve if financial challenges
require a pause in contributions
to the funds.
$0
Creation of IT
Equipment
Replacement Fund
IT Equipment
Replacement ISF
(New)
The City has accumulated a
cash balance in IT operations.

Staff recommends allocating
approximately 50% of the
balance to the newly created
ISF or $659,000
To ensure the new fund have
adequate balance to provide a
reserve if financial challenges
require a pause in contributions
to the funds.
$0
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Proposed Policy Questions
On May 10, 2022, staff recommended approval of several Statements of Financial Principles and Policies (listed below). Approval or disapproval of these policy recommendations has no impact on the budget document presented this evening.

However, staff seeks direction on these policy questions moving forward.

1. Reserve Policy - Does the City Council agree that the reserve policy should be increased from 16% to 25%?

2. Long-Term Capital Improvement Project Funding - Does the City Council agree that a funding model be employed that proactively fund s long- term capital improvement projects from existing resources and operating transfers into capital improvement reserves?

3. General Fund Surplus Allocation –

a. 25% to Contribution to Pension/OPEB - Does the City Council agree that 25% of any available general fund surplus should be put into a Trust Fund or directly into paying off the CalPERS unfunded liability?
b. 25% to Operating Reserve - Does the City Council agree that 25% of the available general fund surplus should be put into Operating Reserves up to 25% of the General Fund?
c. 50% to Contribution to unmet/deferred infrastructure and maintenance needs – Does the City Council agree that 50% of the available general fund surplus should be put into Long -Term Capital Improvement Project Funding?

The proposed FY 2022-23 Budget is a living document that is subject to change until it is finalized and adopted on June 28, 2022.

The entirety of the revised proposed FY 202 2-23 Budget, including the City Manager’s Budget Message, is available online on the City’s website (www.ci.hercules.ca.us) and through the following link: https://www.ci.hercules.ca.us/government/finance/budgets

This evening’s public hearing was noticed in the local newspaper on May 31, 2022. The purpose of the public hearing is to provide a formal opportunity for community input. In addition, additional questions or proposals from the City Council will be incorporated into additional Budget Referrals and brought back for the Continued Public Hearing on June 28, 2022. At the City Council meeting on June 28, 2022, when there will be an opportunity for additional public input, it is anticipated that the City Council will adopt a final budget.

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ATTACHMENTS:

1. FY 22-23 Annual Budget

2. 4/26 Staff Report – Budget Introduction: Five-Year CIP, Sewer Enterprise fund and Internal Service funds.

3. 5/10 Staff Report – Budget Introduction: General Fund and Other Governmental funds
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ANNUAL
BUDGET

CITY OF HERCULES, CALIFORNIA
2022-2023

FISCAL YEAR
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CITY OF HERCULES FY 2022-23 ANNUAL BUDGET

About Hercules .............................................................................................. 1 City Manager’s Message ............................................................................... 3 Budget Awards ............................................................................................ 10 Budget at a Glance ...................................................................................... 11 Budget Process ........................................................................................... 15 Statement of Financial Principles and Policies ........................................ 21 Organization Chart ...................................................................................... 23 Citywide Budget and Departmental Pages ............................................... 24 Authorized Full-Time Positions .................................................................. 25 Labor Allocation ......................................................................................... 27 Fund Summaries by Fund Categories ....................................................... 28 Citywide Expenditures Summary by Fund Type ........................................ 30 Citywide Revenues Summary by Fund Type ............................................. 31 Citywide Transfers by Fund Type .............................................................. 32 Departmental Pages .................................................................................. 34 General Fund ............................................................................................... 64 Special Revenue Funds .............................................................................. 78 Enterprise Fund ......................................................................................... 105 Internal Service Funds .............................................................................. 107 Debt Service Funds ................................................................................... 113 Capital Project Funds ................................................................................ 125 Trust and Agency Funds .......................................................................... 191 Private Purpose Trust Fund ..................................................................... 195 Glossary of Budget Terms ........................................................................ 197 Resolutions .............................................................................................. TBD

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5 Miles
Hercules
Napa
San Francisco Oakland
Richmond
Vallejo
Martinez
4 80
80 San
Pablo
Bay
Welcome: The City of Hercules
Annual Budget FY 2022-2023
About Hercules: Established as
a dynamite factory in the 1800s
and incorporated in 1900, the
City of Hercules is located on the
northeastern shore of San Pablo
Bay, conveniently located along the
I-80 corridor and within minutes of
both San Francisco and Napa. The
over 25,000 residents represent a
diverse mix of many ethnic groups.

Primarily a suburban, family-oriented
community, the City is transforming
into more than a suburban community
with a lively new waterfront, and a
new train and ferry terminal in the
works.

Hercules offers residents a range of
municipal services. The City provides
a full range of recreational programs
including youth/teen and adult
activities, and year-round child care.

BUDGET 2019-21CITY OF HERCULES FY 2022-23 ANNUAL BUDGET ABOUT HERCULES

HERCULES CITY COUNCIL
Mayor
Dion Bailey
Vice Mayor
Alexander Walker-Griffin
Council Members
Dan Romero
Chris Kelley
Tiffany Grimsley

EXECUTIVE

LEADERSHIP TEAM
City Manager
Dante Hall
City Attorney
Patrick Tang
City Clerk/PIO
Lauren Berges
Finance Director
Edwin Gato
Public Works Director
Mike Roberts
Police Chief
William Imboden
Community Development
Director Tim Rood
Parks & Recreation Director
Christopher Roke
80 80
Refugio Valley Rd.

San Pablo Ave.

Syca more Ave.
4 HERCULES
The City of Hercules is a community of 25,864 residents located along the I-80 corridor and within minutes of both San Francisco and Napa. Hercules is in Contra Costa County in the San Francisco Bay Area. 117
BUDGET 2019-21CITY OF HERCULES FY 2022-23 ANNUAL BUDGET ABOUT HERCULES

HERCULES

AT WORK
FY 2020/2021
13,300
Total City Labor Force
3,168
Total Employed by
Top 10 Employers, 2019-20
The City’s Senior Center provides daily senior programs and activities and sponsors special community events and trips.

Hercules maintains an abundance of open space areas and trails throughout the community, providing the opportunity for spotting various types of wildlife and offering dazzling views of the bay. Hercules also has two community and five neighborhood parks. The City also has approximately 950 acres of open space areas and trails distributed throughout the community. Together the open space areas and city parks account for approximately 1/3 of
the total land area within the City.

Future plans include redeveloping
the historic Hercules Point as a
public waterfront park.

Hercules is served by two public
school districts: John Swett Unified
School District and West Contra Costa Unified School District. Private elementary and secondary schools are also available in adjacent communities. At the post-secondary level, both public schools and private schools in the East Bay provide a variety of high-quality educational opportunities. The City Child Care Program provides before- and-after school day care and pre-school programs.

FINANCE
COMMISSIONERS:

Chair
Andrew Gabriel
Vice Chair
Ed Ulle
Commissioners
Lori Risby
Orit Samson
Dennis Esselsagoe
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The COVID-19 Pandemic began to directly
impact the City operations in mid-March
2020 when the initial County Health Order
resulted in a stay-home order for all but
essential services workers. Over time, we
have also had to comply with the Governor’s
Executive Orders as they have evolved. Also,
the City Manager declared a local emergency
in response to the COVID-19 Pandemic
initially on March 15, 2020. That local
emergency declaration was ratified by the
City Council and continued to be extended by
the City Council’s action.

To the credit of our employees, it should be
acknowledged that the City of Hercules is the
only City Hall in the county that did not close
during the COVID event. City employees
continued to work as essential services
workers unless they had COVID-related
health or childcare issues. We were fortunate
that our physical facilities and staffing levels
lent themselves to operate on-site safely with
all reasonable and required precautions taken
to protect our employees and customers.

The Proposed FY 22-23 Budget allocates
resources to a variety of City priorities and
programs to keep our community safe,
maintain our critical infrastructure (like
streets, roads, parks and facilities), and take
steps towards long-term fiscal sustainability.

This budget serves as a policy document
representing our continued commitment to
prudent fiscal management, effective service
delivery, and supporting an affordable quality
of life for our citizens. Once adopted by the
Council, the budget establishes the direction
for all City government programs and
services for the coming year. It represents
the consensus of Council direction and staff
recommendations on accomplishing Council
goals best and responding to the highest
priorities of community needs.

The proposed budget is based on the City
Council’s goals, vision, and priorities, with
many of the goals stretching several more
years into the future. Additionally, many
goals established in previous years fit nicely
with the new goals set this year, so those
efforts continue. The adopted City Council
financial policies and budget principles below
also guided budget preparation:
• Continue to implement the City Council’s
top priorities which includes the following:
• The renewal of the Utility User’s Tax.
• A possible Charter City Measure solely
purpose of increasing the Real Property
Transfer Tax or RPTT.
• Balance current revenues and current
expenses and maintain acceptable reserve
levels;
• Make decisions that continue to reset
the City’s financial plan and create a
foundation to maintain a balanced budget
in future years; and
• Maintain the highest quality of services.

COVID-19 continues to threaten the City
operations, but this budget anticipates the
restoration of services eliminated in the
prior years, as we’ve learned to work in “the
new normal.” So, with the City’s reserve for
Economic Uncertainty remaining at or above
the three-month level and a balanced budget
anticipated for FY 22-23, including some
one-time monies, there are opportunities to
make key investments in infrastructure and a
small amount of ongoing revenues available
to be programmed. Understanding how
ongoing revenues are evolving and the type
and sources of any one-time monies funds
remain a key to a financially sustainable
future for Hercules.

A budget is always a balancing act between
meeting the increasing demands of a growing
community while improving service levels –
within the constraints of our resources. In FY
21-22, despite COVID-19, we still see some
positive economic activity due to growth and
a healthy retail environment. This is reflected
conservatively in our resources across the
organization. We will continue to utilize
these resources to support street operations,
equipment, and replacement reserves, to fund
debt service and centralized General Fund
services, and Council priorities.

As Council is aware, maintaining staffing
levels during the crisis is a continued City
priority. Demand from our constituents
must be met, albeit in a different form of
delivery in certain areas. We prioritized
work to ensure Hercules is a welcoming
and well-maintained City, where streets
and parks are beautiful, sewer services are
delivered, public safety is maintained, and
general governmental services are efficiently
provided.

By doing so, the City “walks the talk” of
putting our community first and continues to
contribute to its economic base.

In the following pages, you will see some
continuing themes from 2022 and some
changes to how the budget was prepared.

Themes include management of the
Council Goals Work Plan, organizational
development, improving efficiencies and
BUDGET 2019-21CITY OF HERCULES FY 2022-23 ANNUAL BUDGET LETTER FROM THE CITY MANAGER

LETTER FROM THE CITY MANAGER
Honorable Mayor and Members of the City Council:

It has been more than two years into a global pandemic and a recessionary economic climate, and we look forward to better times for the 2022-23 fiscal year. For Hercules, most of the economic impact was experienced in our Parks & Recreation Department, where most programming has been suspended. The revenue loss of approximately $1,000,000 caused the City to reduce departmental expenditures through a mandatory furlough of Parks and Recreation Department employees and additional belt-tightening in other programmatic areas.
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LETTER FROM THE CITY MANAGER
CITY OF HERCULES FY 2022-23 ANNUAL BUDGET
community engagement. Going forward,
staff is recommending a process where the
fiscal strategy and the budget are prepared
with due regard to government’s fiscal
policies, strategic plans, and adequate
macroeconomic and fiscal projections.

Unlike the traditional incremental approach
to government budgeting, where the current
year’s budget becomes the basis for the next
year’s spending plan, the innovative process
in budgeting allows for understanding the
community’s core values and then budget
according to these values. Not only does
it allow our City to make better short-term
resource allocation decisions based on the
relative priority of the programs and services
it offers, but it also provides a new way to
link budget decisions to the strategic results
and outcomes that the City wishes to achieve
for the long-term.

This year, the City’s goal is to responsibly
maintain fiscal stability and address revenue
issues caused by an increase in cost. Due to
the impacts of the pandemic, the City reduced
services in prior years, specifically to Parks
& Recreation. Fortunately, the economy
is beginning to rebound from the financial
impacts of the pandemic, and the receipt
of one-time American Rescue Plan Act
(ARPA) funds, in the amount of $6.2 million
will help back-fill some pandemic-related
revenue losses, thereby avoiding reductions
in service. However, one-time funding does
not support long-term planning for adequate
levels of ongoing services.

While the FY 21-22 budget was a relatively
flat budget due to the economic uncertainty
facing effects of the COVID-19 pandemic,
the proposed FY 22-23 budget reflects the
cautious projections for recovery of the local
economy, and incorporates the opportunities
presented by American Recovery Plan Act
(AR PA).

The Financial environment and condition of
Hercules during 2020 was highly volatile,
reflecting the economic impacts of the
COVID-19 pandemic worldwide. The impact
of the pandemic had created a great deal
of uncertainty for local businesses and the
City as a whole. Fortunately – and contrary
to initial projections – the City experienced
relatively stable revenue growth, due in large
part to the increase of online purchasing and
stable business-to-business category, which
increased our sales tax revenues, as well as
a greater focus on local service-based and
food industries, which also increased sales
tax revenues. Finally, because Hercules’
largest retailers are those that experienced
the greatest degree of sales during the height
of the pandemic our sales taxes were largely
stabilized. That being said, we have taken
a cautious approach to the development of
the FY 22-23 budget and have worked to
keep changes to a minimum. The budget
has been developed using conservative but
realistic housing and growth figures based
on the large number of developments and
developable acreage that is currently working
its way through Community Development.

Future phases of the Bayfront development
will be driven by how well the first two
phases lease-up, though the third phase of
397 units is fully entitled and ready to have
permits issued. Some revenues anticipated
to come with new development have been
delayed, like Sycamore Crossing, or have
been slow to lease-up, such as the ground
floor retail in the Exchange. Other new
development is anticipated to proceed in the
near future, with Sycamore Crossing and the
Hilltown residential community. The Auto
Service Center component of the Willow
Avenue project will also be ready to accept
users soon.

The continued conservative approach
to budgeting, together with a focus on
differentiating between one-time and
ongoing revenues and expenditures, has
meant not only is the City on firmer financial
footing than in the past, but it also means
that we are better positioned to manage
through the current difficult circumstances.

Redevelopment dissolution issues continue
with the last payment of $600,000 remaining
on the $3.6 million Due Diligence Review
amount owed to the State. Future lump sum
accelerated repayments of redevelopment
related CalHFA loans are also now in the
foreseeable future.

As the City and nation continue to operate in
uncertainty due to the COVID environment,
a fiscally prudent approach to the FY 22-23
is recommended. The base General Fund
budget presented is a status quo with only
unavoidable or contractually obligated cost
increases built into the expenditure side.

Revenues have been adjusted to reflect
general trends and the new development
coming online. While FY 21-22 has
been a challenging year, it has not been
without several significant and noteworthy
accomplishments as programmed in the
budget or opportunities which have arisen
afterward.

Projects which will expand the City’s tax
base are now or soon will be generating
additional General Fund revenues and
economic activity. The new Safeway, Peets,
and Chase Bank all opened in April. The
235-unit Grand at the Bayfront opened in
May; the Grand will also feature the first
affordable units provided by the Bayfront
development. The Willow Avenue Auto
Service Park & Self Storage is completed
with occupancy on the self-storage. The
developer will be paying the City 10% of the
rental income on the self-storage units as an
in-lieu payment; future auto service units
will also be tax generators.

The future Sycamore Crossing project
continues to work on its site preparation
and utility relocation elements. The Project
was approved by the Planning Commission
and City Council in 2019. Lewis Operating
Companies are developing the 12-acre site
at Sycamore & San Pablo. 2.6-acre site
sold for hotel development – 100-room
Hampton Inn. 27,000-sq.-ft. the retail center
is planned for 3.22 acres on the corner—120
unit townhouse community. The Franklin
Canyon RV Resort, approved by the City
Council in February 2022, the Project will
replace the existing Franklin Canyon Golf
with a destination RV resort, including
spaces for 158 RVs, 22 bungalow tents,
and a new 10,500 square-foot clubhouse/
restaurant. The Project would also dedicate
approximately 70 acres for open space uses
(hiking, biking, and equestrian trails) and
5 acres for a future community garden. A
10% transient occupancy tax on all overnight
visits will generate additional revenue for the
City. Construction is estimated to take 18–24
months, with opening anticipated for the
Summer of 2024.

Also, D.R. Horton has proposed developing
the currently vacant 7-acre former horse
ranch property at the end of Skelly with
40 single-family residences, including
two below-market-rate units. The City is
currently evaluating the project for potential
environmental impacts and expects to be
followed by public hearings at the Planning
Commission and City Council. Pending these
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project approvals, D.R. Horton hopes to begin
demolition and site grading in mid-2023,
with home construction starting in 2024 and
finishing in 2025.

The final design and permitting of the next
phase of the Hercules Regional Intermodal
Transportation Center is underway. This
utility relocation element is shovel-ready
and will proceed once funding is secured.

There appear to be several new funding
opportunities on the horizon. The interim
improvements to allow for the initiation
of bus service, which also provides better
pedestrian connections between the two
segments of the Bay Trail, have been
completed. Further development of the track
and platform design is also underway to set
the stage for the project to move forward
if funding were to be secured. A total of
$46 million of funding has been secured
and applied towards the project, including
the completion of various improvements.

At the same time, an additional estimated
$67 million is needed to complete the
infrastructure for a train to stop. The
City has secured the services of GBS to
develop a funding plan for the remaining
improvements. Currently, 40 potential
funding opportunities have been identified to
be explored in greater depth.

The City also received a clean bill of health in
the 2020-21 fiscal year audit, with the result
encapsulated in a more robust format called
the Comprehensive Annual Financial Report.

The annual audit was completed before the
calendar year-end and was presented to the
City Council in January. In addition, the
Annual Comprehensive Financial Report
(ACFR) and the Budget documents, which
were prepared in an expanded and more
comprehensive format, were recognized by
the Government Finance Officers Association
(GFOA) and the California Society of
Municipal Finance Officers (CSMFO) Award
of Excellence.

In February, as part of the mid-year budget
review, the FY 2021-22 budget was modified
and adjusted as follows:
• Reduction of Parks & Recreation
program budget due to the continued effect
of the pandemic and slow reopening of
programs.
• The receipt of the first tranche of ARPA
funding for $3.2 million.
• Upgraded one part-time to a full-time
position for administrative support.

The ARPA funding has made a big difference
and will continue to do even more to support
our communities. The City’s strategy for
allocating these resources is rooted in equity:
making investments in the community,
especially those businesses that were hit
hardest by the pandemic. On October 20,
2020, the City distributed the Business and
Community needs survey to understand
better the impact of the COVID-19 pandemic
on Hercules’ businesses. On January 11,
2022, the City Council approved the set
of principles to assist staff in developing
the plan for the use of the ARPA funds.

On February 22, 2022, the City Council
approved several priority projects as part of
the FY 21-22 Midyear Update, including the
assistance from HdL for the administration
of the ARPA programs that aligned with the
adopted set of guiding principles. FY 22-23
proposed the Business Assistance and Rental
Assistance Grant programs to help locally-
based businesses.

We continue to be able to accomplish many
things in Hercules to enhance the community
and offer programs and services desired by
our residents due to employees’ efforts daily.

This has been especially true as we have
navigated the COVID-19 Pandemic, and our
employees, as Essential Services Workers,
can be considered heroes in my book. The
above accomplishments were only possible
due to the efforts of our small, but talented
and dedicated staff truly is Hercules’ Team
Dynamic.

Our dedicated and committed elected leaders
also work hard to ensure the City is on a
solid financial footing while at the same time
looking at opportunities to enhance services
and improve the community. They are good
stewards of the public funds entrusted to
them and ensure that our budgeting and
financial operations are done consistently
with the Council’s adopted Financial Policies
& Principles.

In developing the proposed FY 22-23 budget,
we first estimate how we will end the current
FY 21-22, though that is done with just
nine (9) months or so of actual data and
projections as to what we will have in the
final quarter. We continue to actively review
our financial information, especially in the
light of the lingering possibilities of negative
consequences from COVID. As always,
we spend substantial effort to differentiate
between ongoing revenues and those of a
one-time nature to avoid a structural deficit
in the future.

General Fund Operating Budget
The General Fund is projected to end
the 2022-23 fiscal year with an operating
surplus of $740,000, including a $1.6 million
remaining ARPA loss of revenue component.

As usual, the FY 22-23 budget development
began with all Departments undertaking
a detailed examination of prior year
expenditures. An inflationary factor added
to some elements, and unavoidable increases
also being included. For the General
Fund, any proposed changes, other than
unavoidable cost increases, are as follows:

1. Increase in Animal Control Services -
$182,000 to $210,000.

2. Increase in Janitorial Services – $60,000
to $150,000.

3. Increase in Code Enforcement services -
$70,000 to $130,000.

4. Increase in consulting cost for Associate
Planner - $105,000 to $125,000
And the following are the staffing changes:

1. Converting one part-time to full-time
position for departmental administration
support – Cost Neutral.

As noted, better results from the FY 20-21
and some growth in taxes as seen in the FY
21-22 has resulted in additional resources,
despite impacts of COVID. The FY 21-22
General Fund operating budget was adopted
with a projected positive result with the
expectation that this would transition during
the course of the fiscal year to an operating
surplus due to higher than budgeted revenues
and good expenditure control.

The proposed FY 22-23 budget assumes
existing staffing levels, with some
modification to part-time positions and
consultant hours. A greater level of detail
has gone into the labor costs projections to
ensure accuracy and include scheduled step
and merit increases, increasing retirement
costs, higher medical and other insurance
premiums, and a 1% of payroll contribution

LETTER FROM THE CITY MANAGER
CITY OF HERCULES FY 2022-23 ANNUAL BUDGET
121
towards the City’s IRS Section 115 Trust.

The recommended FY 22-23 General Fund
budget will incorporate addition to the
policies. Hercules recently obtained a strong
rating from credit agencies that track the
City’s credit. These high ratings reflect a
variety of factors, including the strength and
diversity of the regional economy, moderate
City debt levels, and current strong fiscal
management, including the provision of
adequate reserves. The City is committed
to implementing and maintaining strong
financial policies and fiscal stewardship. The
City last prepared an update of its financial
policies in December 2015. Since 2015, the
City has established a Fiscal Neutrality Fund
(or Operating Reserve), financial principles,
and policies.

Although the City’s finances are stable
today, expenses continue to grow, and future
challenges associated with pension costs,
workforce retention and attraction, and
aging infrastructure also loom. The Fund
Balance Reserve Policy specifies annual
reserve levels that provide the City with the
flexibility to adapt to local, regional, and
state-wide economic changes and to stabilize
the delivery of City services during periods
of economic recession or disaster response.

Staff is recommending adding the following
to the Statement of Financial Principles and
Policies adopted on December 16, 2015.

The following are staff’s recommended
additions:

1. Service Level Expectations - Defining
the types and levels of services expected
in a given year includes a process of public
engagement, understanding current services,
identifying the City’s mission, long-term
vision, and goals of the community. Based
on the goals established by the City Council,
the City Manager identifies the resources
required to deliver services, how best to
organize those resources to achieve the
City Council’s vision for the community,
and presents those recommendations in the
proposed Budget for the City Council review,
consideration, and direction. In a service-
oriented organization such as a city, it takes
a combination of staff and consultants to
provide services. As important as it is for
a city to invest in its physical capital, it is
just as important for a city to ensure it is
investing appropriately in its human capital
and to determine what is the proper level of
staffing and the necessary skill sets required
to deliver on the city’s mission. City staff
is currently evaluating potential needs for
additional personnel and resources necessary
to accomplish tasks related to the established
priorities.

In FY 2021-2022, services are being provided
by 58 FTE (Full-Time Equivalent) City
employees and equivalent to 28 part-time/
seasonal staff. For the FY 2022-2023
Budget, the City Manager is proposing
upgrading one parttime position to a full-
time Senior Clerk I position for general
administration support managed by the
City Clerk’s Office. The proposed change is
cost neutral and comparable to the salary of
the part-time position paid at a higher class
pay. Furthermore, the City will evaluate
the current level of staffing to meet City
Council’s strategic directives identified
during its strategic planning workshop held
on April 30, 2022.

2. Reserve Policy - The current general fund
reserve policy calls for a 16% limit (equal
to two months of the general fund operating
budget) to be available in a fiscal emergency.

Staff is recommending increasing the
general fund reserve policy limit from 16%
to 25% (equal to three months of the General
Fund Operating Budget) to protect the City
from fluctuations in the economy or other
significant unplanned needs. Once a 25%
funding level is reached, available surplus
funds would be directed to other Council
priorities.

3. Long-Term Capital Improvement
Project Funding – As staff mentioned
during the April 26, 2022, Budget Workshop,
the current funding strategy for capital
projects entails a detailed analysis of the
long-term capital improvement project
funding needs based on a 5-year forecast.

This strategy assumes a “pay as you go”
philosophy that does not anticipate the use of
debt financing.

4. General Fund Surplus Allocation –
A surplus occurs when income exceeds
expenditures. The term is often referred to
in government as savings. A surplus is an
indication that the City’s finances are being
effectively managed. Staff recommends that
Available resources as determined annually
throughthe closing of the financial records
will be used as a basis for the following
allocation:
a. 25% to Contribution to Pension/
OPEB - The City has established an
Internal Revenue Service Code Section 115
irrevocable trust which achieves a higher
rate of return on investments than that
earned on the pooled investment portfolio,
LAIF. Staff recommends that 25% of the
available fund balance shall be put into
a Trust Fund or directly into paying off
the CalPERS unfunded liability for either
pensions or post-employment benefits.
b. 25% to Operating Reserve – As
mentioned above, staff recommends
increasing the general fund reserve policy
limit to 25%. As a means to maintain
this limit, staff recommends that 25%
of the available fund balance be put into
operating reserves up to the 25% policy
limit.

5. 50% to Contribution to unmet/deferred
infrastructure and maintenance needs – A
funding mechanism to fund projects included
in the Long-Term Capital Improvement
Project Funding, as described in section c
above.

These available resources or available fund
balances are generally one-time in nature as
derived from one-time revenues or one-time
expenditure savings. The actual amounts
to be allocated will be based upon the prior
year’s financial statements from the most
recent audit.

General Fund Five-Year Forecast
The five-year forecast is an essential tool that
reflects the City’s commitment to fiscal health
and sustainability. This model is used to
evaluate the immediate impact of budgetary
decisions and the costs of decisions over
multiple years. The tool is updated based on
current revenue and expenditure information.

Though individual variables and assumptions
may change over time, the five-year forecast
provides a consistent model to realistically
forecast the City’s fiscal performance. The
five year forecast includes all aspects of the
General Fund. It models and forecasts all
General Fund revenues (property tax, sales
tax, utility users tax, etc.) and expenditures in
detail. The City updates the five-year forecast
as part of the regular budget update to the

LETTER FROM THE CITY MANAGER
CITY OF HERCULES FY 2022-23 ANNUAL BUDGET
122

LETTER FROM THE CITY MANAGER
CITY OF HERCULES FY 2022-23 ANNUAL BUDGET
Council.

Based on the current information known,
the General Fund will end the fiscal years
with a positive net revenue until year three.

On January 1, 2025, the Utility Users Tax
(UUT) will sunset. Also, per our agreement
with the California Housing Finance Agency
(CalHFA), the remaining loan balances
are due no later than April 11, 2027, and
August 15, 2026, for HELP and RDLP loans,
respectively. Therefore, a structural deficit
will start in FY 24-25 of approximately $3
million annually assuming the same service
level, the UUT is not renewed, and the
accelerated payments on CalHFA loans are
not renegotiated.

The City is a lean organization and has not
fully recovered from the staff and budgetary
cuts necessitated by the Great Recession.

With the dissolution of the redevelopment
agency in 2012 by Sacramento, the City has
lost a significant funding source for funding
capital improvements. In FY 2011, the City
reduced its workforce by 30% and made
significant service cuts to bring expenditures
in line with its revenues. While these changes
saved the City from near bankruptcy, it did
not cure the long-term resource deficit.

The City relies on UUT proceeds to fund a
wide range of services including maintenance
of public properties, staffing, and providing
for public safety. If the UUT is allowed
to expire in January 2025 without being
continued, the loss of approximately $3.5
million a year in revenue would drastically
impair the City’s ability to provide even a
minimal level of service. If we are required to
make budget cuts that may include police and
neighborhood patrols, street maintenance,
parks, senior services, youth programs, and
economic development, we risk a decline in
our quality of life.

Two potential tax measures are considered
on the ballot to close the General Fund
deficit and additional revenues to sustain
population growth. The first is a renewal of
the existing Utility Users Tax (UUT), which,
if not renewed by an affirmative vote of a
majority of voters, will expire on January
1, 2025. The second is increasing the Real
Property Transfer Tax (RPTT). Hercules is a
general law city, and only charter cities can
increase the RPTT beyond the statutorily
mandated amount for general law cities. To
increase the RPTT, the Council must place a
ballot measure before the voters at a general
election to become a charter city for that
limited purpose. The Council has directed
that both options be considered for placement
on the November 8, 2022, ballot.

Special Revenues Fund
Special Revenue Funds are used to account
for specific activities which are credited as
required by law or accounting requirements
and are then utilized to provide those
specified services. These consist primarily
of the City’s Landscape & Lighting District
Funds, the Solid Waste Fund, and the Capital
Improvement Project Fund. The Waste Water
Fund, which provides sewer services, is an
example of an Enterprise Fund. Development
Impact Fee funds collect fees related to the
offset of impacts on infrastructure caused by
new development.

Landscape & Lighting Assessments Districts
are proceeding on a status quo basis with
just a standard inflation factor increase in
progress and incorporated into the Budget
with a few exceptions. Over the last several
years, extreme drought conditions have
required a significant increase in irrigation
watering to keep the landscaping alive
and healthy. Additionally, there have been
significant increases in East Bay Municipal
Utility District (EBMUD) water rates. From
FY 17-18 to date, EBMUD’s water rates
increased 40% compared to an allowable
LLAD assessment rate increase of 16%.

Consequently, water costs have risen
dramatically in the LLADs, especially for
Benefit Zones and districts with large turf,
which have a very high water demand.

Additionally, trees in the new urbanist
developments north of I-80 have matured,
both in height and width, such that they now
need to be pruned regularly by a contract tree
trimming company. This is new, additional
work beyond the scope of the current
landscaping contract and is an additional
LLAD cost. Victoria By The Bay LLAD
No. 2002-1 has been most impacted by these
increases in cost and is now in a deficit.

Staff will be further evaluating how these
emerging costs affect all of the Zones and
Districts and intend to bring this item back to
Council for an in-depth discussion, including
recommendations for FY 23-24, early next
fiscal year. At that time, the year-end costs
for FY 21-22 will be known and evaluated.

The Storm Water Fund continues to see
increased costs due to State mandates which
are expected to further increase under the
next iteration of the Regional Stormwater
Permit. Recycling-related revenue is being
used to offset a portion of this operating
deficit to the extent that the operation of the
garbage and recycling trucks contributes to
the problem, and that has increased this year.

Any remaining operating deficit is covered
by the General Fund ultimately.

Sewer Enterprise Fund
On January 23, 2001, the cities of Hercules
and Pinole entered into a joint power
agreement for the operation and ownership
of the Pinole/Hercules Wastewater Treatment
Plant. The City has an undivided fifty percent
ownership interest in the Plant, and the City
of Pinole has the right and responsibility
to manage and operate the Plant. The City
retains responsibility for operating and
maintaining its wastewater collection system.

Also, the City of Pinole maintains the records
and accounts for all the wastewater treatment
plant transactions.

The City owns and operates the collection
system in Hercules, which includes over
60 miles of underground piping and five
lift stations. The effluent is treated at the
Hercules-Pinole wastewater Treatment Plant
(WWTP), located and operated by the City of
Pinole. Hercules owns half of the WWTP.

The City collects approximately $6 million
a year in service charges from over 8,400
connections charged through the County
tax roll. Developers also pay impact fees to
provide capacity for the wastewater their
project generates. The estimated revenue for
FY 22-23 is $6 million.

The Sewer Enterprise Fund pays for the
sewer system’s operations, maintenance, and
capital improvement and is restricted. The
revenues collected from sewer fees cannot be
used for non-sewer related purposes. FY 22-
23 proposed operating budget is estimated to
be $3.4 million; Capital improvements of $2
million, and debt obligation annual payment
of $2 million.
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LETTER FROM THE CITY MANAGER
CITY OF HERCULES FY 2022-23 ANNUAL BUDGET
Internal Service Funds
City operations require the use of buildings,
vehicles, equipment, and information
technology equipment/infrastructure.

The expenditures for these areas are not
consistent and fluctuate from year to year.

As a result, it is very difficult and not
recommended to budget these costs through
the normal operating budget. Instead, the
standard for municipal governments is to
establish internal service funds to accumulate
capital and address these periodic and
sometimes large expenditures. The use
of internal service funds provides for a
smoothing of the costs over the asset’s useful
life.

This is a better budgeting process because
it does not require large allocations in
one year and smaller allocations in other
years. Instead, the estimate for repairs or
replacement is calculated, and allocations are
made from the operating budget into internal
service funds so that resources are available
when required. The City currently has three
internal service funds, Vehicle replacement,
Information Technology (IT) operating and
replacement, and Facility Maintenance:

Vehicle Replacement ISF
The City will be developing a replacement cycle
plan. The model that the City is developing will
provide for the replacement of vehicles on a
schedule based on age and mileage. There will
typically be some vehicles that need to be replaced
before the targeted age and mileage threshold and
others that can be extended beyond the established
schedule. All vehicles will be evaluated using
these criteria and assessing the maintenance and
gas consumption cost to determine the appropriate
replacement time frame. Currently, the City
replacement is on a “pay-as-you-go” basis. For
FY 22-23, the budget provides for replacing the
following:
•Replace the existing three patrol vehicles that
exceeded the dependable service life of a Police
patrol vehicle. (Estimated cost: $176,000)
•Replace existing two Public Works vehicles,
2008 Ford F250 pick-up trucks (Estimated cost:
$100,000)
Information Technology
Operations ISF
The fund accounts for Information
Technology, which provides various
technology-related services for the city,
including networking and infrastructure
technology, including servers, switching,
security, cyber protection, internet
connectivity, service desk, disaster recovery,
and other data communication technologies.

FY 22-23 proposed IT operating Budget is
estimated to be $955,986 and Equipment
Replacement of $316,000. Resources are from
administrative charges to departments based
upon their proportional share of program
costs.

Facilities Maintenance ISF
The fund accounts for Facility Maintenance
and provides and manages maintenance and
emergency structural repair services for
all City facilities. The source of revenue is
reimbursement from departments for the cost
of providing facility maintenance services.

This internal service fund pays for the
maintenance and repair of the City’s facilities
which include:
• City Hall (including the Police
Department)
• Senior Center
• Library
• Lupin & Hanna Kids Center
• Teen Center
Proposed changes compared to prior year are
as follows:
• Increase in Janitorial Services contract -
$182,000 to $210,000
Facility Replacement ISF
This fund will be used to cover the major
replacement of City buildings and facilities.

There is a significant backlog of large
maintenance projects at City Hall, the Police
Department, etc. For FY 22-23, the City will
be conducting a Citywide Facility study to
address some of these backlogs.

IT Equipment Replacement ISF
Separating the IT Equipment Replacement
Fund - this fund will be used to replace
infrastructure and equipment used to
support City technology needs (servers,
switches, data security, etc.). This model has
not yet been developed, and expenditures
are currently charged together with IT
Operations as “pay-as-you-go.” Another
essential value to creating these internal
service funds is that funds will be available
to ensure facilities are maintained and
equipment replaced during challenging
financial years when allocations to the
funds from the various departments may be
reduced.

The City has accumulated a cash balance for
IT operations and replacement ($1.3 million)
and facilities maintenance funds ($676K).

Staff recommends allocating approximately
50% of these funds to fund the newly created
internal service funds. The staff will develop
vehicles and IT equipment replacement
models to identify the needs projected for
the next 5-10 years. In addition, staff will be
conducting a facilities maintenance study that
looks forward 30 years to identify expected
maintenance needs and improvements. This
analysis will allow the staff to calculate and
program funds sufficient to ensure they are
adequately capitalized. The recommendation
to allocate approximately 50% of the
accumulated fund balance in the Internal
Service funds will ensure the funds have
adequate balances to provide a reserve
if financial challenges require a pause in
contributions to the funds. The contributions
will come from the various department
budgets and will be reassessed annually
based on actual expenditures and re-
evaluation of projected future expenditures.

Capital Improvement Program
Funds
Hercules’ CIP aims to maintain and improve
the City’s aging public infrastructure. This
capital budget emphasizes:
• The unusually large amount of capital
work completed and proposed, especially
in light of the Regional Intermodal Transit
Center (RITC) project solely funded by
grants and locally matched transportation
projects;
• A “fix it first” approach where proper
maintenance of Hercules’ existing
infrastructure is prioritized above requests
for “new” infrastructure; and
• The need for additional revenue
to adequately maintain our existing
infrastructure.

Public infrastructure includes the City’s
streets, sewers, storm drains, transportation,
124
streetlights, trees, buildings, and parks.

While this budget plans for five years, the
City Council will only appropriate funds for
one year or FY 22-23. This CIP and budget
will be proposed, along with the City’s
operating budget, for adoption by the City
Council on June 28, 2022.

The past decade has been a very challenging
financial period for the City. Consistent with
the “fix it first” approach, many key capital
improvement projects were delivered, and
the very most has been made of available
funding. However, it has become increasingly
clear a pay-as-you-go approach and deferring
preventative maintenance work are no longer
sustainable.

With the City’s finances improving, FY
22-23 looks to reintroduce capital planning
and a more robust preventative maintenance
program. With these goals in mind, a modest
Parks Master Plan and Building Facilities
Maintenance Plan are recommended to
be funded. These plans will capture and
prioritize deferred maintenance needs
based upon a comprehensive assessment
and identified desires of the community.

Both plans will include an ADA (American
Disability Act) assessment component.

A 10-year study window will allow this
capital improvement work to be planned and
budgeted well ahead of time. Undertaking
these studies in FY 22-23 will place the
City in a strong position to allocate ARPA
(American Rescue Plan Act) funding in FY
23-24.

The major capital endeavor in FY 22-23 is
the advancement of the Regional Intermodal
Transit Center (RITC); specifically, the
final design of the Utility Relocation Phase
and soliciting for grant funding. Also
programmed is the construction of the Lower
Sycamore Sewer Trunk Main Replacement.

This $13.5 million project is a carryover from
the current year as it has not yet received
permits from the environmental agencies.

A $60K study is proposed to evaluate and
potentially design new modular buildings
to replace the existing ones in front of City
Hall. They will house lockers, bathrooms,
and showers for the Police Department using
Police Development Impact Fee funds, given
they have outgrown their current facilities.

A training room and/or workout area may
also be included. Primary consideration
will be given to expanding the facilities
and enhancing equity and inclusion. Lastly,
Beechnut Park is scheduled to be designed
and constructed using grant funding.

Looking Ahead
Our City continues to assess changing
circumstances and be prepared for the effects
they may have on our ability to deliver
services. While much remains out of our
control, we have a firm grip on what we do
control. This puts the City in a position of
strength that allows us to weather storms
and leverage the opportunities that emerge.

Sound, conservative financial planning is at
the core of our budget development efforts.

Our residents and businesses have been
valuable partners in this ongoing quest,
as have the great people we have on staff
who play an undeniable role in our City’s
success. As we come back together in a
more traditional office-based environment,
we reinvigorate the culture that draws
high performers to our organization. As an
employer of choice, we will remain open to
new ways to support our employees’ success
to continue to ensure the kind of quality of
life our community values so profoundly.

While one of the constants in life is change,
we know that uncertainty is change’s close
companion. Our resiliency lies in our
preparation for uncertain times. Hercules will
effectively forge new paths to remain ready
to deal with whatever else may lie ahead.

The looming expiration of the base Utility
Users tax and the override will need to be
renewed, and the November 2022 ballot looks
like the best initial opportunity to place this
before the voters.

Continuing to be strategic regarding
spending and ensuring that the City lives
within its means is the best path to ongoing
fiscal sustainability. Preserving reserves and
other designations like the Pension and OPEB
Trusts will also serve to sustain services and
the ability to weather downturns in future
years. Without mitigation, pension and OPEB
payment obligations are at risk of “crowding
out” the allocation of General Tax dollars to
current services and programs.

This budget highlights the many
accomplishments made in the 2021-22 fiscal
year and our progress in many areas. This
past year has been remarkable from the
commitment and dedication our employees
and volunteers have shown to the City and
the community. We wouldn’t be in the
position to sustain services
and the safety
of the community without their dedicated
service. I would encourage the City Council
and community to take time to appreciate
these achievements and look forward to
more progress to enhance the quality of
life in Hercules and sustain the City as an
organization.

Conclusion
Many challenges lie ahead, and because
of responsible past decision making and
an emphasis on setting the stage for fiscal
sustainability, we are positioned as well as we
can be as an organization and community to
weather the storm and its aftermath. We will
continue to move key revenue base expanding
development projects forward like the Bayfront,
Sycamore Crossing, Skelly Project, and the
Franklin Canyon RV Resort.

This budget addresses the City’s highest
priorities for service and capital needs for
FY 22-23 and will allow us to achieve our
key goals. Preparation and adoption of the
budget is a team effort involving nearly every
employee in our organization and every City
Council member. Thank you to our staff for
their willingness to submit conservative budget
requests and to develop alternative ways to
meet Council priorities. Finally, thank you
City Council for your leadership in moving
ahead on numerous issues, and for your
adoption of additional financial policies and
prudent financial guidance that resulted in the
foundation for this proposed Budget.

– Dante Hall
City Manager
– Edwin Gato
Finance Director

LETTER FROM THE CITY MANAGER
CITY OF HERCULES FY 2022-23 ANNUAL BUDGET
125
CITY OF HERCULES FY 2022-23 ANNUAL BUDGET BUDGET AWARDS

BUDGET AWARDS
The City of Hercules received the Government Finance Officers Association’s (GFOA) Distinguished Budget Award and the California Society of Municipal Finance Officer’s (CSMFO) Operating Budget Excellence Award for the FY2021-22 budget. These awards represent a significant achievement and reflect a commitment of the governing body and staff to meeting the highest principles of governmental budgeting. In preparing the FY2021-22 budget, staff has once again followed the GFOA and CSMFO criteria as well as made enhancements. This document will be submitted to the GFOA and CSMFO for consideration for the FY2022-23 budget awards.
126
The Budget
is the City’s
Roadmap
The City of Hercules’
annual budget is one of
our most important policy
documents. The Budget at a
Glance is a simplified version
of the comprehensive
budget document that
includes highlights, and an
overview of major revenue
sources and expenditures.

40.2 Median age of residents
$45,744
Per Capita Personal
Income
32,143
Student Enrollment
(Reflects the total number
of students enrolled in
the West Contra Costa
School District)
13,700
Total City Labor Force
Top 10 Employers, 2020-21
Employer Number of Employees

1. Bio-Rad Laboratories Inc, 2,194

2. West Contra Costa Unified School
District, 238

3. Home Depot, 192

4. Safeway, 180

5. Contra Costa County Social
Services, 107

6. Pacific Bio Labs Inc, 93

7. Lucky Supermarkets, 90

8. City of Hercules, 68

9. Benda Tool & Model Works Inc., 44

10. Big Lots, 23

HERCULES

DATA DIGEST
FY 2022-2023
BUDGET

AT A GLANCE
FISCAL YEAR 2022-2023

CITY OF HERCULES, CALIFORNIA
May June
July
Aug.

Sept.

Oct.Nov.Dec.

Jan.

Feb.

March
April

THE BUDGET

DEVELOPMENT

PROCESS
Intro, public hearings
& budget adoption
1 New fiscal
year & year
end review
2 Fiscal
year end
audit &
annual
report
prep
3 Finalize audit & annual
financial report
4Publish annual report
& mid year review
5 Budget
planning
Packages
6 Mid year
review &
department
budget
preparation
7 Funding
allocation
reviews &
budget
preparation
8 How is the budget developed? The City Council adopts the budget in June of each year for the following fiscal year, which runs from July 1 to June 30. The budget development process is continuous and includes public communication throughout the year.

CITY OF HERCULES FY 2022/hyphen.case2023 BUDGET OVERVIEW Citywide Revenue
$33 million
$17 million
General Fund Expense
$17 million
General Fund Revenue
Citywide Expenses
$33 million
Source: CA Department of Finance
2012 2021
24,457
25,864
Population of the
City of Hercules
127
BUDGET 2019-21CITY OF HERCULES FY 2022-23 ANNUAL BUDGET HERCULES BUDGET AT A GLANCE Figures are rounded
FY 2022-23:

Citywide Expenditures by Program
(Excluding Internal Charges)
$33 million total
Police
$8.0
million
Wastewater
Improvements
$7.0
million
Streets & Others
$7.1
million
$4.4 million
$2.0 million
$1.4 million
$3.2 million
Lighting and
Landscaping
Assessment District
Community
Development
Parks & Recreation
Administration
• Strengthen Financial Stability
• Continue to Provide Excellent
Police Services to the Community
• Enhance Economic Development Efforts
• Enhance Transportation Access and Options
• Complete the Vision of the City’s Development
• Provide Outstanding Cultural and
Recreational Services
• Invest in and Enhance Maintenance of
Public Infrastructure and Facilities
• Continue to Provide Exemplary
Governance and City Administration
City of Hercules
Strategic Plan Goals
The City’s Strategic Plan Goals, are focused priorities that guide the day to day work and budgeting process
Based on June 2020 CalPERS actuarial report, The City's funding ratio as of June 30, 2020 was 73%. The Fitch (a credit rating agency) generally considers a funded ratio of 70% to be adequate.

CalPERS Pension Funding Status
Safety/police pension funding
Other staff pension funding
2018
2019
$33.74 million
$20.3 $6.69
$21.54 $7.15
$31.7 million
$26.98 million
$28.7 million
Accrued LiabilityUnfunded
(in $ millions)
Plan Assets
(in $ millions)
Accrued LiabilityUnfunded
(in $ millions)
Plan Assets
(in $ millions)
2018
2019
$22.43 $9.27
$25.09 $8.65
Fund ratio: 71%
Fund ratio: 74%
$36.22 million 2020 $26.34 $9.88
Fund ratio: 73%
Fund ratio: 75%
Fund ratio: 75%
2020 $21.03 $7.87 $28.9 million
Fund ratio: 73%
128
BUDGET 2019-21CITY OF HERCULES FY 2022-23 ANNUAL BUDGET HERCULES BUDGET AT A GLANCE Revenues
by Type
20 22-23
$33.7
million
Expenses
by Major
Category
2022-23
$33.4
million
CITY OF HERCULES BUDGET FY 2022-23:

CITYWIDE BUDGET
Figures are rounded
Figures are rounded
Special
Revenues,
Capital
and Debt
$10.8
million
General Fund
$16.9
million
Enterprise
$6.1
million
Capital
Projects
$5.1
million
Materials,
Supplies &
Services
$15
million
Salaries
and Benefits
$12.1
million
The following is a breakdown of revenues
by fund type and expenditures by major category.

What the
City of
Her
cules
takes
care of
Here is a look at some
of the services the City
provides and facilities
and infrastructure it
maintains:
58 miles
of city streets
1,494
street and
parking lot
features
14 traffic signals
7 miles
of bike lanes
62 miles
of sanitary sewers
13 parks
9 playground
structures
5 Recreation
Centers
Other
expenses
$1.2 million
129
A LOOK
AHEAD
This graphic displays
forecasted the General Fund
revenues and expenditures
for FY 2022-23 to FY 2026-27.

The City’s base 6% Utility User
Tax (UUT) and 2% override will
expire in 2025. The forecast
illustrates the budget gap
if revenues from UUT are
discontinued.

General Fund
Expenditures:

Where does
the money go?
For every dollar
spent on the
general fund:

General Fund
Revenue:

Where does
the money
come from?
Police Administration Parks & Recreation
Community Development 5¢
Public Works 2¢
Transfers Out 2¢ Non Department 2¢
48¢ 27¢ 12¢
BUDGET 2019-21CITY OF HERCULES FY 2022-23 ANNUAL BUDGET HERCULES BUDGET AT A GLANCE CITY OF HERCULES BUDGET FY 2022-23:

GENERAL FUND OPERATING BUDGET
Sales Tax (30%) Utility User
Tax (21%)
Vehicle License
Fees (15%)
Program
Revenues (10%)
$5.0
million
$3.6
million
$2.5
million
$1.7
million$1.6
million
$1.4
million
$1.2 million
Property Taxes (9%)
Other Taxes (9%)
Miscellaneous (7%)
Figures are rounded
Figures are rounded
If the Utility
User Tax is
dicontinued
there wil be
$3 million gap
in FY 2026-27
$25 million
$20 million
$15 million
$10 million
Expenditures Revenues without
Utility User Tax
Revenues
General Fund Five-Year Forecast
FY 2022-23 FY 2023-24 FY 2024-25 FY 2025-26 FY 2026-27
130
CITY OF HERCULES FY 2022-23 ANNUAL BUDGET BUDGET PROCESS

GOVERNMENTAL FUNDS
• General Fund: The General Fund is the general
operating fund of the City. It is used to account for
all financial resources except those required to be
accounted for in another fund.
• Special Revenue Funds: Special Revenue Funds are
used to account for the proceeds of specific revenue
sources (other than special assessments, expendable
trusts, or major capital projects) that are legally
restricted to expenditures for specified purposes.
• Capital Projects Funds: The Capital Projects Funds
are used to account for financial resources to be used
for the acquisition or construction of major capital
facilities (other than those financed by Proprietary
Funds and Trust / Agency Funds).
• Debt Service Funds: Debt Service Funds are used
to account for the accumulation of resources for, and
the payment of, general long-term debt principal,
interest, and related costs.
• Internal Service Funds: Internal Services Funds
are a type of proprietary fund used to report any
activity that provides goods and services on a
cost reimbursement basis to other City funds and
departments of the primary government and its
component units.
• Trust / Agency Funds: Trust Funds are used
to account for assets held by the City in a trustee
capacity for individuals, private organizations, other
governments, and/or other funds.

BUDGET PROCESS

GOVERNING STRUCTURE AND BASIS OF BUDGETING
The City of Hercules is a municipality
incorporated in 1900 under provisions
of the Constitution of the State of
California. The City operates under
a Council Manager general law form
of government and is governed by a
council of five elected members with
staggered four-year terms. Additionally,
City Council members act as the board
of directors of the Hercules Public
Financing Authority (PFA).

BASIS OF BUDGET AND FUND STRUCTURE
Local governments account for revenues and expenditures through separate funds such as General, Special Revenue, Enterprise, Internal Service and Fiduciary funds. The accounts of the City of Hercules are organized on the basis of funds, each of which is considered a separate financial entity. Each fund is comprised of a set of self-balancing accounts for its revenues and expenditures. Government resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled. The various funds are grouped into generic fund types and fund categories as follows:
131

BUSINESS-TYPE FUNDS
Enterprise Funds: Enterprise Funds are used to
account for operations:
(a) that are financed and operated in a manner similar
to private business enterprises where the intent of
the governing body is that the full costs (expenses,
including depreciation) of providing goods or services
to the general public on a continuing basis be recovered primarily through user charges; or (b) where the
governing body has decided that periodic determination
of revenues earned, expenses incurred is appropriate
for capital maintenance, management control or
accountability. Because enterprise funds use the full-
accrual basis of accounting under FASB, all long-term
debt liabilities and debt service payments are recorded within the enterprise fund itself.

For tracking convenience, a separate fund for enterprise debt service payments is shown on the following table
although all transactions are reported together within
an enterprise fund’s financial statements. City budgets contain three major categories - operating, capital and debt. The table on the following page lists the City’s
funds and the categories in which a fund’s financial
transactions contain.

CITY OF HERCULES FY 2022-23 ANNUAL BUDGET BUDGET PROCESS Fund # Operating Capital Debt
GENERAL FUND (100) X X

SPECIAL REVENUE FUNDS
Asset Seizure 101 X
Ab 3229 Cops Program 201 X
Citywide L&L Dist 83-2 220 X X
Victoria By The Bay L&L 221 X X
Hercules Village L&L Dist 222 X X
Baywood Assess 04-1 L&L 223 X X
Bayside Assess Dist L&L 224 X X
Arterial Roadways 225 X
Stormwater Assessment 231 X
Dif-Gen Public Facilities 241 X
Community Development Fnd 242 X
Development Fee Fund 243 X
Dif-Police Facilities 244 X
Dif-Fire Facilities 246 X
Dif-Park & Rec 247 X
Public Benefit Fee 249 X
Dif-Traffic Facilities 261 X X
State Gas Tax Fund 262 X X
Measure "C" Street Fund 263 X X
Stmp Traffic Impact Fund 264 X
Solid Waste And Recycling 291 X
Regional Water Quality 521 X
Bart (Park & Ride) 266 X

CAPITAL PROJECT FUNDS
Street Cip Grants 295 X
City Capital Proj-Single 300, 310, 311 X
Energy Conservation Project 301 X
Grant Fund / Stip / Rip 340s, 350 X
Water Quality Ret Basin 387 X

DEBT SERVICE FUNDS
2003b Debt Service Pfa 672 X
2009 Debt Service Pfa 673 X
Suntrust Lease 383 X
Equipment Lease 388 X

FUND DESCRIPTION

HERCULES FINANCIAL REPORTING FUND STRUCTURE
132
CITY OF HERCULES FY 2022-23 ANNUAL BUDGET BUDGET PROCESS

BASIS OF ACCOUNTING AND

FINANCIAL REPORTING
The basis of accounting refers to when revenues and
expenditures or expenses are recognized in the accounts and reported in the financial statements. The basis of
accounting depends on the purpose for which the fund
has been established and by its measurement focus.

All governmental and expendable trust funds use a
current financial resources measurement focus. With
this measurement focus, only current assets and current liabilities are included on the balance sheet. Operating statements of these funds present increases (i.e.,
revenue/other financing sources) and decreases (i.e.,
expenditures/other financing uses) of net current assets.

All proprietary funds, pension trust and agency funds
are accounted for on a flow of economic resources
measurement focus. With this measurement focus,
all assets and liabilities associated with operation
are included on the balance sheet. Fund equity for
proprietary funds (i.e., net total assets) is segregated into restricted net assets and unrestricted net assets.

Proprietary fund type operating statements present
increases (e.g., revenues) and decreases (e.g., expenses) in net total assets. Interest is capitalized on proprietary fund assets acquired with tax-exempt debt. Agency
and trust funds are custodial in nature (assets equal
liabilities) and do not involve measuring the results of operations.

Modified Accrual Accounting. The modified accrual
basis of accounting is used by all governmental
funds and expendable trust funds, as required by
generally accepted accounting principles (GAAP), the
Governmental Accounting Standards Board (GASB)
and the State of California. Under the modified accrual basis of accounting, revenues are recognized when
they become measurable and available as net current
assets. Property tax and assessments are recognized
as revenues in the fiscal year in which the taxes were
levied. Sales and use taxes are reported as revenue
when collected by the State of California for subsequent remittance to the City. Intergovernmental revenues
and investment earnings are accrued when earned.

Revenues from grants, entitlements, and donations are
recognized in the fiscal year in which all eligibility
requirements are satisfied. Fines and permits revenue
are not susceptible to accrual as they generally are not measurable until received in cash.

Expenditures are generally recognized under the
modified accrual basis of accounting when the related
fund liability is incurred. Exceptions to this general
rule include principal and interest on general longterm debt, recognized when due, and accumulated unpaid
vacation and compensatory pay that is accrued and
reported on the government-wide financial statements
for governmental funds.

Full Accrual Accounting. As mentioned previously,
the full-accrual basis of accounting is used for the
enterprise and proprietary fund types. Under this
method, revenues are recognized when earned and
expenses are recognized at the time liabilities are
incurred. The City has chosen to utilize GASB as
its standard setting body for the accounting in its
proprietary funds, as allowed since November 30, 1989.

Deferred revenues arise when potential revenues
do not meet both the “measurable” and “available”
criteria for recognition in the current period. Deferred revenues also arise when resources are received by
the City before it has a legal claim to them, as when
loans are extended upon agreement for future lease or
loan repayment proceeds. In subsequent periods, when
both revenue recognition criteria are met, or when the
City has a legal claim to the resources, the liability for deferred revenue is removed from the balance sheet and
revenue is recognized.

Past actual data presented in this budget document
reconcile to the City’s financial statements using the
GAAP basis of accounting for governmental funds and
full-accrual basis for enterprise funds.

Basis of Budgeting Method. The budget uses the
basis of budgeting method. The basis of budgeting
and the basis of accounting are the same for all
governmental funds. The budgeting basis for enterprise
and proprietary funds do not include depreciation/
amortization of debt principal and interest payments
or the capitalization of capital construction costs or
donated/contributed capital. Depreciation of capital
assets for enterprise and internal service funds has been budgeted.
133
CITY OF HERCULES FY 2022-23 ANNUAL BUDGET BUDGET PROCESS

1. The City Manager submits to the City
Council a proposed operating budget for
the following fiscal year. This budget includes
proposed expenditures, by fund and department,
and the revenues expected to finance them.

2. Public hearings are conducted to obtain
taxpayer comments.

3. The budget is legally enacted through passage
of a resolution before July 1.

4. The City Manager is authorized to transfer
budgeted amounts between objects within the
same department; however, any revisions, which
alter total expenditures of any fund, must be
approved by the City Council.

5. Formal budgetary integration is employed
as a management control device. Special
Revenue Fund budgets are adopted on a basis
consistent with accounting principles generally
accepted in the United States (USGAAP) and
are consistent with the basis used for financial
reporting.

Accordingly, actual revenues and expenditures
can be compared with related budget amounts
without any reconciliation. The General Fund
budget is adopted on the budgetary basis, which
is not consistent with accounting principles
generally accepted in the United States of
America.

Commitments for material and services, such
as purchase orders and contracts, are recorded
during the year as encumbrances to assist in
controlling expenditures. Appropriations, which
are encumbered at year-end lapse, then are added
to the following year’s budgeted appropriations.

However, encumbrances at year-end are reported
as reservations of fund balance.

6. Under Article XIII B of the California
Constitution (the Gann Spending Limitation
Initiative), the City is restricted as to the
amount of annual appropriations from the
proceeds of taxes, and if proceeds of taxes
exceed allowed appropriations, the excess
must either be refunded to the State Controller,
returned to the taxpayers through revised tax
rates or revised fees schedules, or an excess in
one year may be offset against a deficit in the
following year. For the fiscal year ended June
30, 2018, based on the calculations by City
Management, proceeds of taxes did not exceed
the appropriations limit.

7. Budget revenue amounts represent the
original budget modified by adjustments
authorized during the year. Budgeted
expenditure amounts represent original
appropriations adjusted for supplemental
appropriations during the year, which were
contingent upon new or additional revenue
sources and re-appropriated amounts for prior
year encumbrances. The City Manager must
approve adjustments to departmental budgets;
however, management may amend the budgeted
amounts within departmental expenditure
classifications, with approval of the Finance
Director.

8. Certain appropriations carryover and are re-
appropriated for the subsequent year.

9. Budget appropriations for the various
governmental funds become effective July 1.

The City Council may amend the budget during
the fiscal year. The legal level of budgetary
control has been established at the fund level.

BUDGET PROCESS AND PROCEDURES
The City follows the following procedures in establishing the budgetary data reflected in this document:
134
CITY OF HERCULES FY 2022-23 ANNUAL BUDGET BUDGET PROCESS

BUDGETARY PROCESS
There are two pieces to the budget: an operating
budget and a capital budget. The departmental
operating budgets represent current year operations
whereas the capital budget covers major construction
projects and the purchase of major equipment for
multiple fiscal years. The operating and capital
budgets are concurrently created and adopted in a
similar manner. However the operating budget covers
a one-year period while the capital budget covers a
five-year period with money being appropriated for the
first year along with the current year operating budget and the remaining four years of the capital plan being
approved in concept.

The budget and this document is the culmination of a
process in which the community -- through its elected
leaders, commission/committee members, public
hearings, and the advice of City staff -- decides upon
the services it shall receive from its government under the constraint of resources available to it through
taxes, fees, and transfers from the federal, state, and county governments.

Operating Budget Process
The budget process began in March with the request
by the Finance Department for revenue projections
and an estimation of operating expenditures requests.

City Council / Finance Commission Budget
Meetings. The City Manager and the City’s senior
staff discussed the City’s General Fund budget issues
with the City Council/Finance Commission as first
looks at revenues and expenditures. The Finance
Commission includes five appointed members from
the public. The budget work sessions provided time for
the Commission members to discuss issues related to
the budget.

Citizen Input on the Budget and Final Adoption.

Citizen participation was encouraged during the City
Council / Finance Commission budget work sessions.

Additionally, public notice of Council consideration of the City’s proposed budget resolution was advertised
per state law. A copy of the proposed Budget was
available at the City Clerk’s Office and on-line for
citizen review. Any amendments made by Council
will be incorporated into the final adopted budget.

Mid-Year Budget Review and Revision Process.

After the adoption of the budget, there are scheduled
reviews of the budget’s progress. In March of the fiscal year, there is a major mid-year (second quarter) review in which revenues and expenditures are examined and
adjustments made if necessary. There are also first,
third and fourth quarter reports prepared and reviewed
with the Finance Subcommittee of the City Council.

Any adjustments to the budget must be passed by City
Council resolution.

In addition to these scheduled reviews of the adopted
budget, there is a process for amending the budget
during the year if a department finds that more
money is needed to be spent on a program than was
originally anticipated, or finds that there are new
funded or unfunded needs to be met. In this case, the
department must present to City Council its reasons
for requesting a budget adjustment. As with the
scheduled budget reviews, these budget adjustments
must also be adopted by City Council resolution before
a department can spend money amounting to more
than the original appropriation.

Requests for adjustment to the budget fall into two
categories:
• Pre-Approval - Departments may present to Council
on an individual basis revised funding requests for
approval to proceed with a new initiative, program or
project. Council approval of such requests constitutes
formal budget appropriations authority.
• New Requests - Department requests may be
submitted through the mid-year revision resolution.

Departments submit a memorandum to the City
Manager outlining the cost of the requested item, its
justification, financing sources, whether the request
is a one-time or ongoing cost, and accounting codes
impacted. If approved by the City Manager, these
requests are listed on the subsequent mid-year
revision resolution. City Manager review includes a
determination of the necessity for the request and its
fiscal impact.
135
CITY OF HERCULES FY 2022-23 ANNUAL BUDGET BUDGET PROCESS Capital Improvement Budget
The Capital Improvement Budget is a plan for capital
projects, fixed assets, and infrastructure owned by
the City of Hercules. Requests from senior staff are
reviewed by the City Manager as part of the annual
budget development process to insure that the City’s
assets are maintained in an efficient manner and
that Council long-term goals are met. The capital
budget is organized by the department and/or
fund responsible for the asset. The capital process
starts with departments submitting their requests
for maintenance, replacement, and the addition
of assets under their control. The City Manager
oversees a disciplined process to provide assurance
to citizens that the City’s assets and infrastructure are maintained within the constraints of available funding.

USING THIS BUDGET DOCUMENT
The first section of this document is a general
introduction to the budget and the document itself.

The document covers both the operating and capital
budgets for the City with most of this document being
devoted to the City’s operating budgets. In general, the document is organized by fund type with the majority
of it devoted to the General Fund.

The first section of this document gives a general
overview of the City’s revenues, expenditures, and
fund balances. This section gives a summary of the
fund balances for all of the funds and the resources
available to the City to meet current and future
obligations. Also presented are the detailed account
information of all the City’s revenues, and a list of the City employee positions for all departments.

The General Fund section shows budget expenditure
details of each General Fund department. The sections
following the General Fund are the City’s various
special revenue funds, capital project funds, debt
service funds, enterprise funds, and internal service
and trust funds. The Appendices section includes the
resolutions that adopted the budgets, and a glossary of budgeting and accounting terms.

CITY ORGANIZATIONAL

STRUCTURE
The organizational structure of the City of Hercules’
municipal departments is found in the chart on the
following page. The chart outlines the supervisory
reporting structure of the City’s senior staff. The City Manager reports to and serves at the pleasure of the
City Council, a five-member elected body.

The City Manager holds a weekly Department Head
Meeting to review the occurrences of the prior week
and the upcoming week. This meeting is also held to
discuss any items of special interest or concern.

CITY COMMISSIONS

AND SUB-COMMITTEES
The City has three (3) commissions and three (3) full/
sub committees appointed by the City Council.

Commissions and committees provide advisory
recommendations, counsel and guidelines on their
relevant topic areas.

These commissions and committees include
the following:
• Planning Commission
• Community and Library Services Commission
• Finance Commission
• Education Sub-Committee (Inactive)
• Economic Development Sub-Committee
• Public Safety/Traffic Sub-Committee
136
CITY OF HERCULES FY 2022-23 ANNUAL BUDGET STATEMENT OF FINANCIAL PRINCIPLES AND POLICIES Establishing certain generalized principles governing
the financial affairs of the City is desirable to guide both the financial management and financial planning
for the City. The City of Hercules is accountable to its citizens, employees, and other stakeholders for the use of public funds and the best management of resources.

These Financial Principles will provide City staff
with guidance in preparing and submitting the annual
budget for the City and in the preparation of financial forecasts. The adoption of certain financial policies is necessary and appropriate to implement the financial
principles and to help ensure financial sustainability
and to improve the City’s credit worthiness and bond
rating.

Financial Principles
• Adopt a balanced operating budget by June 30th of
each year for the following fiscal year without using
General Fund undesignated fund balances or reserves.

The budget thus adopted shall include expenditures
necessary to provide for the well-being and safety of
the community subject to available revenues;
• Fees for services shall be updated annually to
recover, as much as possible, the cost of providing the services and to allow for the impacts of inflation, with fees not exceeding the cost of providing the service.

In some instances, the City Council may elect to not
recover the full cost of providing the service and the
City Council shall determine the appropriate cost
recovery level of individual services;
• Revenues in excess of expenditures at the end of a
fiscal year shall be applied on a priority basis to satisfy the general fund reserve requirements, capital projects reserves, capital equipment reserves, and liability
reserves before being appropriated for other uses.
• Current year operating expenditures shall be funded
by current year operating revenues;
• Manage the City’s finances as to ensure repayment
of debt and improvement in the City’s bond rating in
order to minimize future issuance and interest costs to the City.
• Meet all financial reporting requirements in a timely manner and ensure appropriate internal controls are in
place to ensure financial accountability.

General City Financial Policies
• Employees are one of the most important assets of
the City and should be compensated at an appropriate
level and commensurately with the City’s ability to
pay;
• Establish, and then maintain, a “minimum reserve”
for economic uncertainties equal to one month or

8.33% of expenditures of the current year General
Fund budget exclusive of Nonspendable, Restricted,
and Assigned fund balance with a goal of increasing
that to two months or 16.66% of expenditures in the
future.
• The General fund reserve shall provide for meeting
contingency needs, investment earnings, and shall
serve as a cash flow reserve.
• Provide for capital equipment replacement
as necessary to achieve greater efficiency and
effectiveness in the City’s operations;
• One-time revenues shall be utilized for one-
time expenditures or to enhance reserve funds as
appropriate or necessary;
• The City shall maintain, replace, and improve its
infrastructure and the City shall set aside a reasonable and prudent amount of General Fund monies for
capital projects including the repair of various
facilities as part of its annual budget process to the
greatest extent possible.

CITY OF HERCULES

STATEMENT OF FINANCIAL
PRINCIPLES AND POLICIES Adopted December 16, 2015
137
CITY OF HERCULES FY 2022-23 ANNUAL BUDGET STATEMENT OF FINANCIAL PRINCIPLES AND POLICIES Revenue & Expenditure Policies
• Realistic and prudent estimates of revenues shall be
used to maintain financial flexibility;
• Revenue raising alternatives shall be explored as
necessary and the City shall pursue grants available to local government;
• Programs funded through user fees shall be self-
supporting to
the greatest
extent possible
or at a level
proscribed
by the City
Council;
• Full recovery
of overhead
and internal
services
from grant
and special or enterprise funds shall be pursued to
the greatest extent possible and as permitted by the
restrictions associated with each fund.

Special Revenue, Enterprise,
and Internal Service Fund Policies
• The City shall abide by applicable rules and
regulations pertaining to the expenditures of special
revenue funds as required by each funding source;
• Enterprise activities shall be programmed to
generate sufficient revenues to support the enterprise’s operations including overhead and internal services,
debt service requirements, and current and future
capital needs;
• Special Revenue and Enterprise funds shall adhere
to all other applicable fiscal policies of the City.
• Internal Service funds shall be established as
appropriate to ensure cost recovery on a fair and
equitable basis;
• Transfers to the General fund from other funds
for overhead costs shall be reviewed annually and
conform to the Federal Office of Management &
Budget A-97 Guidelines.

Debt Policies
• Debt shall only be incurred for capital improvement
projects and only if the project cannot be funded by
recurring or one-time revenues;
• Proceeds from long-term debt shall not be used for
current on-going expenditures;
• Short-term borrowing shall not be used for operating
expenditures unless it is a Tax & Revenue anticipation
Note or other short-term cash flow borrowing and
shall be limited to repayment in the same fiscal year;
• The use of the City’s General Fund as security for
debt issues should be limited to the greatest extent
possible to capital projects which serve the general
benefit for the City.

Forecasting Policies
• The City shall develop and maintain a five to ten
year Financial Forecast which shall be updated
two times each year with any unexpected changes
in economic conditions or other circumstances
prompting more frequent updates;
• The Financial Forecast should recognize the effects
of economic cycles and shall differentiate between
one-time revenues associated with one-time economic
activities and revenues resulting from base economic
growth;
• Financial Forecasts shall identify the assumptions
used in their preparation and the risks associated with those assumptions;
• Revenue and expenditure estimates should be
prepared on a realistic basis with a target of +/- 2
percent variance from the estimate for revenues and a
+/- 1 percent variance for expenditures;
• On-going revenue increases based upon site specific
development shall be incorporated using a realistic
estimation of timing and shall not exceed the midpoint
of the range of estimated revenues.
138
Tim Rood
Community
Development
Director
*Staff – 2
Functions:
• Long Range
Planning
• Short Range
Planning
• Planning
Counter
• Housing
Element
• General Plan
• Zoning
Ordinance
• CEQA Mgmt.
• Planning
Commission
• Permits
• Building
Inspection
• Plan Checking
• Code
Enforcement

ORGANIZATIONAL CHART
CITY OF HERCULES FY 2022-23 ANNUAL BUDGET
FY 2022-23 CITY OF HERCULES

ORGANIZATION CHART SENIOR MANAGEMENT

CITIZENS OF HERCULES

HERCULES CITY COUNCIL

CITY ATTORNEY
Patrick Tang

CITY MANAGER
Dante Hall

BOARDS, COMMISSIONS
& COMMITTEES
Lauren
Burgess
City Clerk/PIO
*Staff – 2
Functions:
• City Clerk
• Elections
• Agendas
• Council Mtgs.
• Cable/Web
Broadcasts
• Records Admin.
• Contract Mgmt.
• Reception
• Meeting
Coordinate
• PIO
Edwin Gato
Finance Director
*Staff – 4
Functions:
• Accounts
Payable
• Accounts
Receivable
• Payroll
• Budget
• Audits
• Investment
Mgmt.
• Cash Mgmt.

Dante Hall
City Manager
*Staff – 5
1PT
Functions:
• Executive Mgmt.
• Real Estate
(Incl. RITC)
• Franchises
• RDA Successor
• Economic
Development
• Legislative
• Inter-
Governmental
• Human
Resources
• Risk
management
• IT Services
Michael
Roberts
Public Works
Director
*Staff – 11
Functions:
• Engineering
• Streets
• Facility
Maintenance
• Solid Waste
• Wastewater
• Sewer
Maintenance
• Lighting/
Landscaping
• Clean Water
Program
Christopher
Roke
Parks & Rec.

Director
*Staff - 4
55 PT
Functions:
• CLS
Commission
• Facility Rentals
• Child Cares
• Sports
• Rec Classes
• Seniors
• Tiny Tots
• Camps
• Youth/Teen
• Swim Center
• Library
• Rec. Volunteers
William
Imboden
Police Chief
*Staff –
26 Sworn
2 Non-Sworn
1 PT
Functions:
• Patrol and
Special Enforce.
• School Safety
(SRO)
• Criminal/ Int.

Invest
• Records/ Evid
Mgmt.
• Police Reserve
• Explorer
Program
• City Volunteer
Coord.
• Emergency

OPS/SRT
• Crime
Prevention
• Allied agency
Liaison
• Council
Meetings
• Training /
certification
• Grants
• PD Finance
CITY

CLERK &

ADMINISTRATION

PARKS &

RECREATION
POLICE

DEPARTMENT
PUBLIC
WORKS,

ENGINEERING &

MAINTENANCE

OFFICE OF THE
CITY

MANAGER

FINANCE COMMUNITY

DEVELOPMENT
*includes department heads
139
City-wide Budget
& Departmental Pages
140
Authorized Full-Time Positions
By Classification Within Department
FTE Trends
Personnel by Department
FY 18-19 FY 19-20 FY 20-21 FY 21-22
Actuals Actual Budget Adopted
Police
Chief of Police 1 1 1 1 Police Commander 2 2 2 2 Police Sergeant 5 5 5 5 Police Officer 17 17 17 18 Police Officer Trainee 1 1 1 Police Support Specialist 2 2 2 2 Parking Enforcement Officer
Administrative Specialist 1 1 1 1 29 29 29 29 Public Works
Public Works Director 1 1 1 1 Public Works Superintendent 1 1 1 1 Public Works Inspector/Specialist 1
Associate Engineer 1 1 1 1 Maintenance Worker I 4 4 4 4 Maintenance Worker II 4 4 4 3 11 11 11 11 -
10 20
30 40
50 60
FY 18-19
Actual
FY 19-20
Actual
FY 20-21
Budget
FY 21-22
Adopted
Community Development
Parks & Recreation
Administration
Public Works
Police
141
Authorized Full-Time Positions
By Classification Within Department
Community Development
Community Development Director 1 1 1 1 Permit Technician 1 1 1 1 2 2 2 2 Parks & Recreation
Parks & Recreation Director 1 1 1 1 Recreation Manager 1 1 1 1 Recreation/Comm/Adminstr 1
Recreation Coordinator 2 2 2 1 4 4 4 4 Administration
City Manager 1 1 1 1 City Clerk/PIO 1 1 1 1 Finance Director 1 1 1 1 Management Analyst 1 1 1 1 Cable/Communications Technician 1 1 1 Information Systems Administrator 1 1 1 1 Information Systems Specialist 1
Senior Clerk I 1 1 1 1 Human Resources Specialist 1 1 1 1 Senior Accountant 1 1 1 1 Accounting Technician II 1 2 2 2 Accountant 1
Administrative Specialist 1
11 11 11 12 Total City-wide FTE Count 57 57 57 58 142
Labor Allocation
By Fund
Fund No.
=================> 100 232 233 234 235 236 237 238 239 251 253 220 221 222 223 224 225 231 262 263 291 420 460 470 Position Title
Fund Name
===============> General
LLAD
No. 83-2
(Zone 1)
LLAD
No. 83-2
(Zone 2)
LLAD
No. 83-2
(Zone
3&4)
LLAD
No. 83-2
(Zone
5A)
LLAD
No. 83-2
(Zone
5B)
LLAD
No. 83-2
(Zone
5C)
LLAD
No. 83-2
(Zone 6)
LLAD
No. 83-2
(Zone 7)
LLAD
No. 83-2
(Zone 8)
LLAD
No. 83-2
(Zone 9)
LLAD
No. 83-2
(Zone
10)
LLAD
No. 2002-
1 (Victoria
by the
Bay)
LLAD
No.
2002-2
(Hercule
s
Village)
LLAD
No. 2004-
1 (Baywood
)
LLAD
No. 2005-
1 (Bayside)
Arterial
Roadwa
y
Stormwa
ter
State
Gas Tax
Measure
"C"
Street
Fund
AB 939 -
JPA Sewer
IT Ops
and Repl
Facility
Maint Total
Full-Time Department
ADMINISTRATIVE SPECIALIST POLICE 1.00 - - - - - - - - - - - - - - - - - - - - - - - 1 CHIEF OF POLICE POLICE 1.00 - - - - - - - - - - - - - - - - - - - - - - - 1 POLICE COMMANDER POLICE 2.00 - - - - - - - - - - - - - - - - - - - - - - - 2 POLICE OFFICER POLICE 18.00 - - - - - - - - - - - - - - - - - - - - - - - 18 POLICE SERGEANT POLICE 5.00 - - - - - - - - - - - - - - - - - - - - - - - 5 POLICE SUPPORT SPECIALIST POLICE 2.00 2

29.00 - - - - - - - - - - - - - - - - - - - - - - - 29 ASSOCIATE ENGINEER PUBLIC WORKS - - - - - - - - - - - 0.15 - - - - - 0.15 0.20 0.20 - 0.30 - - 1 MAINTENANCE WORKER I PUBLIC WORKS - - - - - - - - - - - 0.83 0.55 0.05 0.10 0.05 0.05 0.10 0.36 0.21 - 0.85 - 0.85 4 MAINTENANCE WORKER II PUBLIC WORKS 0.15 0.06 0.06 0.07 0.02 0.02 0.02 0.07 0.07 0.07 0.07 0.31 0.10 0.05 0.08 0.05 0.05 0.23 0.25 0.22 - 0.75 - 0.24 3 PUBLIC WORKS DIRECTOR PUBLIC WORKS 0.10 - - - - - - - - - - 0.05 - - - - - 0.10 0.20 0.20 - 0.30 - 0.05 1 PUBLIC WORKS SUPERINTENDENT PUBLIC WORKS 0.03 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.01 0.03 0.02 0.02 0.02 0.02 0.02 0.18 0.10 0.10 - 0.25 - 0.02 1 PUBLIC WORKS INSPECTOR/SPECIALIST PUBLIC WORKS - 0.05 0.05 0.05 - - - 0.03 0.02 0.02 0.05 0.21 - 0.05 0.05 - 0.05 0.02 0.18 0.15 - - - 0.02 1

0.28 0.13 0.13 0.14 0.04 0.04 0.04 0.12 0.11 0.11 0.13 1.58 0.67 0.17 0.25 0.12 0.17 0.78 1.29 1.08 - 2.45 - 1.18 11 COMMUNITY DEVELOPMENT DIRECTOR COMMUNITY DEVELOPMENT 1.00 - - - - - - - - - - - - - - - - - - - - - - - 1 PERMIT TECHNICIAN COMMUNITY DEVELOPMENT 0.20 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.13 0.05 0.05 0.05 0.05 0.05 0.03 0.07 0.05 - 0.07 - - 1

1.20 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.13 0.05 0.05 0.05 0.05 0.05 0.03 0.07 0.05 - 0.07 - - 2 PARKS & RECREATION DIRECTOR PARKS & RECREATION 1.00 - - - - - - - - - - - - - - - - - - - - - - - 1 RECREATION COORDINATOR PARKS & RECREATION 1.00 - - - - - - - - - - - - - - - - - - - - - - - 1 RECREATION MANAGER PARKS & RECREATION 1.00 - - - - - - - - - - - - - - - - - - - - - - - 1 RECREATION/COMM/ADMINSTR PARKS & RECREATION 1.00 - - - - - - - - - - - - - - - - - - - - - - - 1

4.00 - - - - - - - - - - - - - - - - - - - - - - - 4 CITY MANAGER ADMINISTRATION 0.59 - - - - - - - - - - 0.12 - - - - - - - - - 0.29 - - 1 CITY CLERK/PIO ADMINISTRATION 0.60 - - - - - - - - - - 0.04 0.02 0.04 - - 0.04 - - - - 0.10 0.16 - 1 FINANCE DIRECTOR ADMINISTRATION 0.80 - - - - - - - - - - 0.10 - - - - - - - - - 0.10 - - 1 MANAGEMENT ANALYST ADMINISTRATION 0.25 - - - - - - - - - - - - - - - - - - 0.25 0.10 0.30 - 0.10 1 INFORMATION SYSTEMS SPECIALIST ADMINISTRATION - - - - - - - - - - - - - - - - - - - - - - 1.00 - 1 INFORMATION SYSTEMS ADMINISTRATOR ADMINISTRATION - - - - - - - - - - - - - - - - - - - - - - 1.00 - 1 SENIOR CLERK I ADMINISTRATION 1.00 - - - - - - - - - - - - - - - - - - - - - - - 1 HUMAN RESOURCES SPECIALIST ADMINISTRATION 0.80 - - - - - - - - - - 0.10 - - - - - - - - - 0.10 - - 1 SENIOR ACCOUNTANT ADMINISTRATION 0.80 - - - - - - - - - - 0.10 - - - - - - - - - 0.10 - - 1 ACCOUNTING TECHNICIAN II ADMINISTRATION 1.60 - - - - - - - - - - 0.20 - - - - - - - - - 0.20 - - 2 ADMINISTRATIVE SPECIALIST ADMINISTRATION 1.00 - - - - - - - - - - - - - - - - - - - - - - - 1

7.44 - - - - - - - - - - 0.66 0.02 0.04 - - 0.04 - - 0.25 0.10 1.19 2.16 0.10 12

41.92 0.15 0.15 0.16 0.06 0.06 0.06 0.14 0.13 0.13 0.15 2.37 0.74 0.26 0.30 0.17 0.26 0.81 1.36 1.38 0.10 3.71 2.16 1.28 58 Part-Time

PARKING ENFORCEMENT OFFICER POLICE

0.50 - - - - - - - - - - - - - - - - - - - - - - - 1 RECORDS CLERK SPECIALIST POLICE 0.50 - - - - - - - - - - - - - - - - - - - - - - - 1 INTERN ADMIN/ENG/PLANNING COMMUNITY DEVELOPMENT 0.50 - - - - - - - - - - - - - - - - - - - - - - - 1 FACILITY ATTENDANT PARKS & RECREATION 2.02 - - - - - - - - - - - - - - - - - - - - - - - 2 LIFEGUARD/SWIM INSTRUCTOR I PARKS & RECREATION 1.52 - - - - - - - - - - - - - - - - - - - - - - - 2 LIFEGUARD/SWIM INSTRUCTOR II PARKS & RECREATION 1.05 - - - - - - - - - - - - - - - - - - - - - - - 1 OFFICE ASSISTANT PARKS & RECREATION 0.02 - - - - - - - - - - - - - - - - - - - - - - - 0 OFFICE ASSISTANT I (PT) PARKS & RECREATION 0.50 - - - - - - - - - - - - - - - - - - - - - - - 1 OFFICE ASSISTANT II (PT) PARKS & RECREATION 2.00 - - - - - - - - - - - - - - - - - - - - - - - 2 RECREATION AIDE PARKS & RECREATION 2.51 - - - - - - - - - - - - - - - - - - - - - - - 3 RECREATION LEADER I PARKS & RECREATION 6.60 - - - - - - - - - - - - - - - - - - - - - - - 7 RECREATION LEADER II PARKS & RECREATION 2.78 - - - - - - - - - - - - - - - - - - - - - - - 3 RECREATION LEADER III PARKS & RECREATION 4.50 - - - - - - - - - - - - - - - - - - - - - - - 5 RECREATION SPECIALIST PARKS & RECREATION 0.56 - - - - - - - - - - - - - - - - - - - - - - - 1 SENIOR LIFEGUARD PARKS & RECREATION 1.70 - - - - - - - - - - - - - - - - - - - - - - - 2 ADMINISTRATIVE SECRETARY ADMINISTRATION 0.50 - - - - - - - - - - - - - - - - - - - - - - - 1

27.75 - - - - - - - - - - - - - - - - - - - - - - - 28 143
City-Wide Budget
All Funds Summary
Projected Projected Changes in Projected Propose d Proposed Changes in Propose d Available Revenues/ Expenses / Commitments/ Available Fund Revenues/ Expenses / Commitments/ Available Fund Fund Balance Transfers In Transfers Out Reserves Balance Transfers In Transfers Out Reserves Balance FY 20-21 FY 21-22 FY 21-22 FY 21-22 FY 21-22 FY 22-23 FY 22-23 FY 22-23 FY 22-23 General Fund
100 GENERAL FUND $2,138,825 $19,819,338 $19,107,300 $2,850,863 $16,916,000 $17,334,447 $2,432,416 401 FISCAL NEUTRALITY 4,209,129 4,209,129 4,209,129 General Fund Total 6,347,954 19,819,338 19,107,300 - 7,059,992 16,916,000 17,334,447 - 6,641,545 Special Revenue Funds
101 ASSET SEIZURE 99,459 - 45,000 54,459 33,000 45,000 42,459 201 AB 3229 COPS Program 6,727 150,000 150,000 6,727 150,000 150,000 6,727 220 CITYWIDE L&L DIST 83-2 423,765 2,022,981 1,884,036 - 562,710 2,150,575 2,079,326 633,959 221 VICTORIA BY THE BAY L&L (85,114) 470,269 538,293 (153,138) 492,971 584,542 (244,709) 222 HERCULES VILLAGE L&L DIST 190,541 162,139 200,794 - 151,886 169,761 206,619 115,028 223 BAYWOOD ASSESS 04-1 L&L 225,839 152,659 290,129 - 88,369 152,757 148,033 - 93,093 224 BAYSIDE ASSESS DIST L&L 115,787 144,902 99,294 161,395 152,362 132,686 181,071 225 ARTERIAL ROADWAYS 131,023 319,600 305,844 144,779 314,000 333,123 125,656 231 STORMWATER ASSESSMENT (131,868) 374,000 421,000 (178,868) 376,000 374,577 - (177,445) 241 DIF-GEN PUBLIC FACILITIES 144,277 2,000 1,000 145,277 - - 145,277 242 COMMUNITY DEVELOPMENT FND 168,094 1,000 - 169,094 - - 169,094 243 DEVELOPMENT FEE FUND 71,714 - 1,000 70,714 - - 70,714 244 DIF-POLICE FACILITIES 265,047 2,000 100,000 167,047 - 60,000 107,047 246
DIF-FIRE FACILITIES - 522,000 522,000 - - - - - 247 DIF-PARK & REC 185,960 1,000 50,000 136,960 - - 136,960 249 PUBLIC BENEFIT FEE 993,323 3,000 - 996,323 - 500,000 496,323 261 DIF-TRAFFIC FACILITIES 246,474 1,000 180,000 67,474 - - 67,474 262 STATE GAS TAX FUND 623,986 1,115,000 1,611,000 127,986 760,593 718,990 169,589 263 MEASURE "C" STREET FUND 4,905 406,000 519,000 450,134 342,039 450,000 423,916 368,123 264 STMP TRAFFIC IMPACT FUND - 1,347,000 1,347,000 - - - - - 291 AB 939 - JPA FUND 867,734 178,000 236,000 809,734 178,000 236,881 750,853 521 REGIONAL WATER QUALITY 51,569 - - 51,569 - - 51,569 266 BART PARK & RIDE 240,737 28,000 16,000 252,737 45,000 17,000 280,737 353 AMERICAN RESCUE PLAN ACT (ARPA) - 3,142,889 2,983,338 159,551 3,142,889 300,000 3,002,440 Special Revenue Funds Total 4,839,979 10,545,439 11,500,728 450,134 4,334,824 8,567,908 6,310,693 - 6,592,039 Capital Projects Funds
300 CITY - CAPITAL PROJECTS 414,019 194,000 194,000 414,019 247,000 247,000 414,019 301 ENERGY CONSERVATION PROJECT 190,926 - - 190,926 - - 190,926 340 HERCULES RAIL STATION PROJECTS - 50,000 50,000 - 360,000 360,000 - 387 WATER QUALITY RETENTION BASIN 166,569 44,000 44,000 166,569 - - 166,569 295 GRANTS - 254,000 254,000 - - - - Capital Projects Funds Total 771,514 542,000 542,000 - 771,514 607,000 607,000 - 771,514 144
City-Wide Budget
All Funds Summary
Projected Projected Changes in Projected Propose d Proposed Changes in Propose d Available Revenues/ Expenses / Commitments/ Available Fund Revenues/ Expenses / Commitments/ Available Fund Fund Balance Transfers In Transfers Out Reserves Balance Transfers In Transfers Out Reserves Balance FY 20-21 FY 21-22 FY 21-22 FY 21-22 FY 21-22 FY 22-23 FY 22-23 FY 22-23 FY 22-23 Debt Service Funds
672 2003B DEBT SERVICE PFA 290,066 - 133,000 157,066 355,934 513,000 - 673 2009 DEBT SERVICE PFA (2,550) 932,000 911,000 18,450 908,000 908,000 18,450 383 SUNTRUST LEASE - 205,000 205,000 - - 103,000 103,000 - 388 EQUIPMENT LEASE - 218,000 218,000 - 227,000 227,000 - Debt Service Funds Total 287,516 1,355,000 1,467,000 175,516 1,593,934 1,751,000 - 18,450 Enterprise Funds
420 SEWER FUND 27,296,000 6,174,000 20,018,000 - 13,452,000 6,053,000 7,417,750 (2,955,000) 9,132,250 Total, Net City Budget 39,542,963 38,435,777 52,635,028 450,134 25,793,846 33,737,842 33,420,890 (2,955,000) 23,155,798 Internal Service Funds
450 VEHICLE REPLACEMENT FUND 642,667 - 55,000 587,667 148,300 276,000 459,967 460 IT OPERATING FUND 658,892 1,506,000 1,602,000 562,892 1,271,986 1,271,686 563,192 470 FACILITY MAINTENANCE FUND 279,391 912,000 794,000 397,391 787,000 787,192 397,199 480 IT EQUIPMENT REPLACEMENT FUND 658,892 - - - 658,892 - - - 658,892 490 FACILITY REPLACEMENT FUND 279,392 - - - 279,392 - 25,000 - 254,392 Internal Service Funds Tota
l 2,519,234 2,418,000 2,451,000 - 2,486,234 2,207,286 2,359,878 - 2,333,642 Agency Funds
382 ASSMT DIST 05-01 DEBT SVC 382,262 282,000 227,000 437,262 232,910 232,910 437,262 501 TAYLOR WOODROW MAINT LMOD 70,035 - - 70,035 - - 70,035 511 OPEB & SOMAR 3,000,208 87,000 60,000 3,027,208 118,000 102,000 3,043,208 730 HERCULES GOLF CLUB - - - - - - - Agency Funds Tota
l 3,452,505 369,000 287,000 3,534,505 350,910 334,910 - 3,550,505 SUCCESSOR AGENCY - 9,406,000 9,406,000 - - 16,935,736 10,822,705 (6,113,031) - Totals $45,514,702 $50,628,777 $64,779,028 $450,134 $31,814,585 $53,231,774 46,938,383 ($9,068,031) $29,039,945 145
City-wide Expenditures
Summary by Fund Type
Expenditure Trends
Expenditures By Department
FY 19-20 FY 20-21 FY 21-22 FY 22-23
Actual Actual Budget Proposed
General Fund Operations by Department
Police 7,409,758$ 7,549,028$ 7,545,685$ 7,924,997$ Public Works 305,464 292,525 374,592 382,985 Community Development 611,297 792,456 725,810 817,965 Parks & Recreation 2,165,547 1,434,988 1,787,803 2,047,122 Administration 3,923,826 3,807,639 4,203,410 4,364,419 Non-Department 874,110 366,938 260,000 615,934 Transfers Out 205,099 205,099 423,000 330,000 15,495,101 14,448,673 15,320,300 16,483,422 One-time 3,046,245 1,873,567 2,766,500 626,025 ARPA (Loss of Revenue Calculation) - - 1,020,500 225,000 18,541,346 16,322,240 19,107,300 17,334,447 Special Revenue, Capital and Debt
Special Revenues 6,686,668 5,546,287 11,500,728 6,310,693 Capital Projects 1,171,858 3,830,064 542,000 607,000 Debt Service 1,685,774 1,320,336 1,467,000 1,751,000 Enterprise
Sewer 7,206,739 6,059,337 20,018,000 7,417,750 Net City Budget 35,292,385 33,078,264 52,635,028 33,420,890 Internal Charges
Internal Service Funds 1,402,215 2,042,511 2,451,000 2,359,878 Total City Budget 36,694,600$ 35,120,775$ 55,086,028$ 35,780,768$ Fiduciary
Successor Agency 6,662,387 7,528,055 9,406,000 10,822,705 Other Agency 594,310 3,709,939 287,000 334,910 Total Organization 43,951,297$ 46,358,769$ 64,779,028$ 46,938,383$ -
10,000,000
20,000,000
30,000,000
40,000,000
50,000,000
60,000,000
FY 19-20
Actual
FY 20-21
Actual
FY 21-22
Budget
FY 22-23
Proposed
Internal Service
Sewer
Debt Service
Capital Projects
Special Revenues
General Fund
146
City-wide Revenues/Transfers In
Summary by Fund Type
Revenue Trends
Revenuess By Fund
FY 19-20 FY 20-21 FY 21-22 FY 22-23
Actual Actual Budget Proposed
General Fund
Taxes 10,461,073$ 11,082,785$ 10,914,675$ 11,597,000$ Intergovernmental 2,151,433 2,285,392 2,418,000 2,511,000 Fines & Forefeitures 62,582 36,586 37,000 38,000 Program Revenues 2,214,782 1,327,618 1,273,000 1,650,000 Use of Money & Property 600,705 511,188 313,000 286,000 Cost allocated to other departments 534,992 619,634 739,325 684,000 Transfers In 227,335 150,000 150,000 150,000 16,252,902 16,013,203 15,845,000 16,916,000 One-time 1,723,486 600,750 1,056,000 - ARPA (Loss of Revenue Calculation) - - 2,918,338 - 17,976,388 16,613,953 19,819,338 16,916,000 Special Revenue, Capital and Debt
Special Revenues 5,615,771 5,476,264 10,545,439 8,567,908 Capital Projects 880,799 4,792,699 542,000 607,000 Debt Service 1,768,324 1,254,278 1,355,000 1,593,934 Enterprise
Sewer 6,220,998 5,773,932 6,174,000 6,053,000 Net City Budget 32,462,280 33,911,126 38,435,777 33,737,842 Internal Charges
Internal Service Funds 2,390,850 2,061,127 2,418,000 2,207,286 Total City Budget 34,853,130$ 35,972,253$ 40,853,777$ 35,945,128$ Fiduciary
Successor Agency 15,065,901 15,944,039 9,406,000 16,935,736 Other Agency 543,292 3,973,269 369,000 350,910 Total Organization 50,462,323$ 55,889,561$ 50,628,777$ 53,231,774$ -
5,000,000
10,000,000
15,000,000
20,000,000
25,000,000
30,000,000
35,000,000
40,000,000
45,000,000
FY 18-19
Actual
FY 19-20
Actual
FY 20-21
Budget
FY 21-22
Adopted
Internal Service
Sewer
Debt Service
Capital Projects
Special Revenues
General Fund
147
City-wide Budget
Transfers
FY 19-20 FY 20-21 FY 21-22 FY 22-23
Actual Actual Budget Proposed
Transferred From (Sender) Transferred To (Receiver)
Fund Name Fund No. Fund Name Fund No.

General Fund 100 Capital Projects 300 $74,361 - $194,000 $22,000 General Fund - ARPA 100 Capital Projects 300 - 1,020,500 225,000 General Fund 100 SunTrust Lease 383 205,099 $205,099 205,000 103,000 General Fund 100 OPEB Liability 511 108,000 60,000 60,000 60,000 General Fund 100 2003B Debt Service PFA 672 566,110 106,938 - 355,934 General Fund 100 2009 Debt Service PFA 673 236,867 1,269,542 - - General Fund 100 Asset Seizure 101 142,740 - - - General Fund 100 Equipment Lease (Solar Project) 388 - - 218,000 227,000 AB 3229 COPS Program 201 General Fund 100 155,948 150,000 150,000 150,000 Landscape & Lighting District 83-2 220 Arterial Roadways 225 - - 26,800 - Landscape & Lighting District Victoria by the Bay 2002-1 221 Arterial Roadways 225 24,960 23,792 26,800 27,200 Landscape & Lighting District Hercules Village 2002-2 222 Arterial Roadways 225 3,524 6,487 7,100 7,500 Landscape & Lighting District Baywood 2004-1 223 Arterial Roadways 225 2,835 2,289 2,400 2,700 Landscape & Lighting District Bayside 2005-1 224 Arterial Roadways 225 13,145 15,587 17,600 18,500 Stormwater Assessment 231 General Fund 100 71,387 - - - Landscape & Lighting District 83-2 (Zone 1) 232 Arterial Roadways 225 23,695 22,770 - 26,100 Landscape & Lighting District 83-2 (Zone 2) 233 Arterial Roadways 225 22,324 18,021 19,500 20,600 Landscape & Lighting District 83-2 (Zone 3&4) 234 Arterial Roadways 225 30,318 24,475 26,500 28,000 Landscape & Lighting District 83-2 (Zone 5A) 235 Arterial Roadways 225 22,273 17,980 19,500 20,600
Landscape & Lighting District 83-2 (Zone 5B) 236 Arterial Roadways 225 5,657 10,030 10,100 11,500 Landscape & Lighting District 83-2 (Zone 5C) 237 Arterial Roadways 225 1,613 9,776 10,600 16,100 Landscape & Lighting District 83-2 (Zone 6) 238 Arterial Roadways 225 26,519 21,408 23,200 24,500 Landscape & Lighting District 83-2 (Zone 7) 239 Arterial Roadways 225 29,773 27,677 30,000 31,700 Landscape & Lighting District 83-2 (Zone 8) 251 Arterial Roadways 225 51,432 45,162 48,900 51,600 Landscape & Lighting District 83-2 (Zone 9) 253 Arterial Roadways 225 25,110 23,913 25,900 27,400 State Gas Tax 262 Landscape & Lighting District 83-2 (Zone 10) 220 - 31,013 21,258 21,952 State Gas Tax 262 Landscape & Lighting District 83-2 (Zone 1) 232 - 1,290 845 871 State Gas Tax 262 Landscape & Lighting District 83-2 (Zone 2) 233 - 704 615 617 State Gas Tax 262 Landscape & Lighting District 83-2 (Zone 3&4) 234 - 772 761 891 State Gas Tax 262 Landscape & Lighting District 83-2 (Zone 5A) 235 - 811 958 1,236 State Gas Tax 262 Landscape & Lighting District 83-2 (Zone 5B) 236 - 252 271 277 State Gas Tax 262 Landscape & Lighting District 83-2 (Zone 5C) 237 - 168 176 261
State Gas Tax 262 Landscape & Lighting District 83-2 (Zone 6) 238 - 235 640 631 State Gas Tax 262 Landscape & Lighting District 83-2 (Zone 7) 239 - 1,313 614 649 State Gas Tax 262 Landscape & Lighting District 83-2 (Zone 8) 251 - 1,939 1,884 1,966 State Gas Tax 262 Landscape & Lighting District 83-2 (Zone 9) 253 - 1,084 1,024 1,077 148
City-wide Budget
Transfers
FY 19-20 FY 20-21 FY 21-22 FY 22-23
Actual Actual Budget Proposed
Transferred From (Sender) Transferred To (Receiver)
Fund Name Fund No. Fund Name Fund No.

State Gas Tax 262 Landscape & Lighting District Victoria by the Bay 2002-1 221 - 7,991 9,230 10,047 State Gas Tax 262 Landscape & Lighting District Hercules Village 2002-2 222 - 3,224 3,874 3,982 State Gas Tax 262 Landscape & Lighting District Baywood 2004-1 223 - 2,750 2,515 2,613 State Gas Tax 262 Landscape & Lighting District Bayside 2005-1 224 - 1,442 1,634 2,284 State Gas Tax 262 Arterial Roadways 225 9,038 - - - Measure "C" Street Fund 263 Arterial Roadways 225 9,038 - - - Solid Waste and Recycling 291 Stormwater Assessment 231 214,000 124,237 125,000 125,000 American Rescue Plan Act (ARPA) 353 General Fund - Loss of Revenue Component 100 - - 2,918,338 - Facility Maintenance 470 BART Park & Ride 266 - 440,643 - - $2,075,766 $2,680,814 $5,232,037 $1,631,288
149

DAN ROMERO
Council Member

CITY COUNCIL

CITY COUNCIL

KEY PRIORITIES
2021-22:
• Preparing Hercules
for the future
• Ensuring effective
and efficient Core
Services
• Continuing on
the path to financial
sustainability
• Enhancing the
quality of life
• Advancing the
next phases of the
Hercules Regional
Intermodal
Transportation
Center
• Expanding the
City’s tax base
through quality
development
The five members of the City Council are elected at-large by the voters of Hercules, with one of the Council Members selected each year to serve as Mayor by their colleagues. Their primary responsibilities are to establish public policy, enact ordinances, adopt an annual budget for each fiscal year, and take other actions which guide and determine how to best provide services and enhance the quality of life in Hercules.

The City Council typically meets the second and fourth Tuesday of for their regular meetings, with special meetings called as needed, and this provides the primary means to hear from the City’s residents and other stakeholders. Another important role is that Council Members represent the City on a number of regional boards and agencies including the WestCAT, the West Contra Costa Transportation Advisory Committee, the West Contra Costa Regional Integrated Waste management Authority, the Contra Costa Mayors Conference, the Association of Bay Area Governments, and the League of California Cities, among others.

As the City’s main policy making body, the City Council is charged with guiding the City towards the realization of the Vision for our community as established in the current Strategic Plan:

The City of Hercules is a richly diverse community, serving as a major transportation hub and a prime destination for the Bay Area.

It is built on a sound economic and physical infrastructure, and its residents enjoy public safety, security, well-maintained parks, streets and public facilities. We conduct our work in an atmosphere of trust and respect. We constantly look for better ways to deliver services and always strive for excellence.

DION BAILEY
Mayor

ALEXANDER

WALKER-GRIFFIN
Vice Mayor
CITY OF HERCULES FY 2022-23 ANNUAL BUDGET

TIFFANY GRIMSLEY
Council Member

CHRIS KELLEY
Council Member
150

CITY COUNCIL
WORKPLAN HIGHLIGHTS:

CITY COUNCIL
• Adopt a balanced budget and utilize
one-time funds prudently, including
ensuring a balanced budget, minimizing
the use of reserves, and target one-
time funds available to topping up
reserves, addressing unfunded pension
obligations, investing in infrastructure.
• Resolve lingering redevelopment
dissolution issues while ensuring
limited to no impact on the City’s
General Fund, including advocating for
a legislation solution to redevelopment
related issues and explore other
mitigation strategies if needed.
• Pursue the continued evolution of
Hercules into a transportation hub and
address local traffic and circulation
concerns, including securing funding
for the next phases of the Hercules
Regional Intermodal Transportation
Center, securing grants for other street
and pedestrian enhancements to the
circulation network, utilize the Council’s
Public Safety & Traffic Committee
as a sounding board for community
concerns.
• Maintain a safe and attractive
community, including ensuring stable
level of Police staffing including adding
officers as the City’s population grows,
utilize volunteers to encourage code
compliance in neighborhoods, invest
in the maintenance and repair of public
facilities and parks, and, ensure new
development adds the overall quality of
the community.
• Enhance the City’s
economic base,
including completing
the build-out of
the Bayfront and
other remaining
development sites
with an emphasis on
uses which also expand the City’s tax
base, while mitigating any impacts from
new development.
• Ensure Hercules operates in a
transparent and open manner,
including meeting and exceeding State
requirements regarding Open Meetings,
Public Records, and Transparency like
with the existing local Anti-Nepotism
and Anti-Cronyism Ordinance, make
expanded use of social media and
other outlets to keep residents and
the broader community informed,
and encourage volunteerism and
community involvement in making
Hercules a better place to live and work.

CITY OF HERCULES FY 2022-23 ANNUAL BUDGET
151
City Council
Department Expenditure Summary
FY 19-20 FY 20-21 FY 21-22 FY 22-23
Actual Actual Budget Proposed
Expenditures By Type
Salaries & Benefits 80,733$ 77,546 $ 69,000 $ 69,645$ Contractual Services 41,174 72,551 41,000 42,000 Other Operating Costs 32,422 26,333 38,000 38,000 Cost Allocation 221,753 231,158 183,114 209,000 Capital Outlay - - - - Debt Service - - - - 376,082$ 407,588 $ 331,114$ 358,645$
Expenditures By Fund/Program
General Fund 376,082$ 407,588$ 331,114$ 358,645$ Expenditure Trends
$0
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
$400,000
$450,000
FY 19-20 FY 20-21 FY 21-22 FY 22-23
Cost Allocation
Other Operating Costs
Contractual Services
Salaries & Benefits
152

CITY MANAGER

CITY MANAGER

KEY PRIORITIES
2022-23:
• Successfully
managing the City’s
finances during the
current economic
climate
• Securing funding
for the next Hercules
RITC phases
• Navigating the
final redevelopment
dissolution issues
• Ensuring successful
implementation
of remaining new
development
opportunities
• Guiding the City’s
recovery from the
COVID-19 pandemic
• Fostering
organizational
enhancements to
better provide services
and programs
The City Manager is appointed by and serves at the pleasure of the City Council and is responsible for implementing the policy direction provided by the City Council as given in City Council meetings based on the recommendations made by the City Manager and his staff, providing leadership to the City organization and employees, fostering a level of community engagement, and keeping the community informed through a variety of means.

The City Manager also works with the City Council in regard to their regional and other agency assignments and support the City Council in the City’s legislative advocacy efforts.

As the City’s Chief Executive Officer, the City Manager responsible for ensuring the City organization is focused on meeting the Mission as defined Strategic Plan:

Our mission is to lead our diverse community and enhance the quality of life in the City of Hercules, now and in the future. We do this by providing effective, efficient, responsive, and innovative services with integrity and a culture of transparency.

CITY OF HERCULES FY 2022-23 ANNUAL BUDGET
153

CITY MANAGER

CITY MANAGER
WORKPLAN HIGHLIGHTS:
• Utilize sound budgeting practices
and recommend a balanced budget,
including using all budgeting tools
in the annual budget cycle to ensure
a fiscally prudent approach which
sets the stage for long term financial
sustainability, strategically utilizes
reserves, and provides enhanced
information to assist decision makers.
• Identify and pursue grant
opportunities for the Hercules
Regional Intermodal Transportation
Center, including working with our
regional partners, advancing the design
of the next phases to ensure they are
shovel ready, and building support for
the project among key constituencies.
• Ensure the successful build-out
of the Waterfront Master Plan and
the Bayfront, including guiding
the construction and entitlement
components of each phase, forming
the Waterfront Parking entity;
developing the required affordable
housing implementation agreement;
and working with the developer
to ensure a vibrant and model
transportation oriented-development
results.
• Expand the City’s Tax Base through
new development, including
completing the Safeway center,
facilitating the start of construction
of the approved Willow Avenue
Auto Service Center and Self-
Storage center, Sycamore Crossing
development including the hotel and
retail components, and the Hilltown
project, and identify and pursue other
opportunities such as the possible reuse
of the Franklin Canyon Golf Course site.
• Encourage improved service delivery
and identify means to preserve or
enhance service levels, including
better tracking service requests,
utilizing volunteers in areas like Code
Compliance, and ensuring full Police
staffing through the over-hire program,
and other efforts.
• Increase focus on organizational
development and training, including
updating the City’s personnel rules,
identifying and providing employees
with relevant training opportunities,
encouraging continuous improvement,
and instilling best practices as resources
allow.

CITY OF HERCULES FY 2022-23 ANNUAL BUDGET
154
City Manager
Department Expenditure Summary
FY 19-20 FY 20-21 FY 21-22 FY 22-23
Actual Actual Budget Proposed
Expenditures By Type
Salaries & Benefits 680,295$ 801,063 $ 905,634 $ 928,702$ Contractual Services 1,416,898 1,407,342 2,177,415 1,803,384 Other Operating Costs 23,756 41,168 79,580 94,440 Cost Allocation 169,363 202,595 221,704 209,000 Capital Outlay 150,855 68,391 232,500 316,000 Debt Service - - - - 2,441,167 $ 2,520,559 $ 3,616,833 $ 3,351,526$
Expenditures By Fund/Program
General Fund
City Manager 385,675$ 360,115$ 454,908$ 491,705$ Risk Management 1,084,650 1,081,116 1,235,837 1,266,049 Information System - - - - Human Resources 219,514 241,725 324,088 322,086 1,689,839 1,682,956 2,014,833 2,079,840
Internal Service Fund
IT Equipment Replacement 751,328 837,603 1,602,000 1,271,686 2,441,167 $ 2,520,559 $ 3,616,833 $ 3,351,526$
Expenditure Trends
$0
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
$4,000,000
FY 19-20 FY 20-21 FY 21-22 FY 22-23
Capital Outlay
Cost Allocation
Other Operating Costs
Contractual Services
Salaries & Benefits
155

ADMINISTRATIVE SERVICES
CITY OF HERCULES FY 2022-23 ANNUAL BUDGET

RISK MANAGEMENT
Risk Management is a unit under the Administrative Services Department. The Administrative Services Director works with Departments to eliminate or mitigate potential risk and preserve public property, as well as manage the City’s Workers’ Compensation Program.

The City is a member of the Municipal Pooling Authority (“MPA”), a joint powers agency that is governed by a board of member municipalities. The City’s deposits with the Municipal Pooling Authority are in accordance with formulas established by the Municipal Pooling Authority. Actual surpluses or losses are shared in accordance with a formula developed from overall loss costs and spread to member entities on a percentage basis after a retrospective rating.

COUNCIL STRATEGIC GOAL
OBJECTIVES:
• Preservation of the
City’s assets and public
service capabilities
from loss, destruction
and depletion.
• Systematized
internal procedures
for identifying and
constantly reassessing
the fluctuating
exposures to risk, and
implementing courses
of action to minimize
or eliminate that risk.
• The establishment,
to the extent possible
of an exposure-free
work and service
environment in which
the City personnel and
members of the public
can enjoy safety and
security in the course
of their daily pursuits.
• Protection against
the financial
consequences of
catastrophic loss
through avoidance,
risk transfer, and/or
purchased insurance.

Reduce exposure to litigation and claims.
• The City has been successful in reducing claims and litigation over the past few years. Efforts to continue this trend include updates to the city’s standard form of contracts and the development of specialty contract models, the investment of monies to address key infrastructure issues like the maintenance of trees and the filling of major potholes. However, the more recent period has seen an uptick in claims and possible litigation.
156

ADMINISTRATIVE SERVICES
CITY OF HERCULES FY 2022-23 ANNUAL BUDGET

HUMAN RESOURCES
In support of the City’s principles, values and vision, it is the goal of the Human Resources Department to support the total operation in meeting its goals through its most valuable resource – its people.

The Human Resources office strives to develop an attitude of teamwork and quality in our day-to-day operations; create an atmosphere that fosters challenges, fun and safety; and commit to doing and to acting openly, equitably and consistently in our pursuit of uncompromising quality.

OBJECTIVES:

To act as a catalyst
to enable all
City of Hercules
employees to contribute
at optimum levels
toward the success of a
greater community by:
• Attract and retain a
highly qualified, diverse
workforce.
• Offering a competitive
salary and benefits
package and developing
the full potential of
our workforce by
providing training and
development for career
enhancement.
• Foster amicable
employee/labor
relations.
• Promote employee
safety, wellness, high
productivity and
performance.
• Ensure compliance
with laws and regulations
• Maintain consistency
and fairness when
implementing and
administering policy
decisions and direction.

COUNCIL STRATEGIC GOAL
Provide a means for employees to report concerns of possible wrong doing (whistle-blowing).
• The City maintains a whistleblower hotline through a third party and regularly makes that information available to employees.

Continue a formal volunteer program to help various departments. • The Police Department makes good use of volunteers in a variety of roles with two volunteers added to the roster recently.

A cadre of Police volunteers is also now working in support of our voluntary code compliance efforts to enhance the community.

Volunteers were utilized in the recent upgrades at the Ohlone and Foxboro community Centers. In Parks & Recreation volunteers support a variety of events and activities.
157

ADMINISTRATIVE SERVICES
CITY OF HERCULES FY 2022-23 ANNUAL BUDGET

INFORMATION TECHNOLOGY
Information Technology is responsible for overseeing the technology infrastructure and daily needs of the City. Information Technology utilizes information and communications technology to design, select, and implement a variety of technology solutions that assist the City and all City departments with providing services and meeting strategic goals promoting technological and telecommunication growth.

The Information Technology department collaborates with all city departments and provides support for all network users and mobile devices, as well as maintenance of data centers, server networks, switches, routers, and software applications.

COUNCIL STRATEGIC GOAL
OBJECTIVES:
• Provide
technological desktop
computer support to
City staff within four
hours of request.
• Maintain and support
approximately 40
software applications,
including those
specific to public
safety services.
• Implement upgraded
software applications
as required.
• Maintain connectivity
among network
routers, switches,
and devices to
ensure availability
and reliability for City
staff and external
customers.
• Implement and
maintain servers for
new applications.
• Implement
the prioritized
recommendations
from the IT Capital
Project Plan.

Complete an equipment
replacement plan with a rationale,
schedule and budget.
• While equipment replacement
is on-going and considered as
part of the annual budget process
each year, a more formalized
replacement plan still needs to be
developed.

Evaluate IT Systems, especially
financial management to determine
possible improvements.
• A new web site was launched.

Improvements needed to
recommence cable broadcasets
was also completed. Software
upgrades to the cloud will be
completed in FY20-21 to the City’s
financial software application as well
as software upgrades to the cloud
for the RecTrak software application.

New citywide computer and
hardware upgrades are scheduled
for completion in FY20-21 as well.

Consider new ways to deliver
municipal services in more cost-
effective ways.
• The city looks for opportunities
on an on-going basis. In February
2019 the City recommenced cable
broadcast of City Council and
Planning Commission meetings
through the County CCTV services.
158
The Office of the City Clerk provides legislative support to the Mayor and City Council and standing committees; conducts all municipal elections; administers the citywide records retention schedule and off-site storage contract; administers the board/ commission process. The City
Clerk is the information resource
for the community, City Council,
and City Staff. As the Clerk
to the City Council, the City
Clerk prepares and distributes
the agendas for the City Council
and Successor Agency to
the Redevelopment Agency
meetings. The City Clerk is the
local official who administers
democratic processes such as municipal elections, access to city records, and all legislative actions ensuring transparency to the public.

The City Clerk acts as a compliance officer for federal, state, and local statutes including the Political Reform Act, the Brown Act, and the Public Records Act. The City Clerk manages public inquiries and relationships and arranges for ceremonial and official functions.

CITY CLERK/PIO
CITY OF HERCULES FY 2022-23 ANNUAL BUDGET

CITY CLERK/PIO

COUNCIL STRATEGIC GOAL
OBJECTIVES:
• To ensure open
access to information,
documents, and the
legislative process.
• To ensure fair and
impartial elections.
• To maintain the official
record of all City Council
proceedings.
• To develop and maintain
on-going efforts that
increase transparency in
city government.
• Perform other State and
municipal statutory duties.

Continue to enhance transparency
and open government.
• The city has resumed cable
broadcast of City Council and
Planning Commission meetings.

The City also now has a presence
on Facebook and Nextdoor and
posts regularly.

Foster an ethical environment free
from conflicts of interest.
• The City Council has adopted
a Code of Ethics which is
reviewed annually and an annual
acknowledgment of the policy is
required for City Council Members,
Commission Members and staff.

Enhance access to information
(sunshine provision).
• The City’s website is a key vehicle
for enhanced access to information;
together with our increased social
media presence.

Conduct annual review and update
of anti-nepotism, anti-cronyism,
conflict of interest, and Code of
Ethics.
• The City Council conducts an
annual review of these policies
every January. The last review was
completed on January 28, 2020.

Provide training to Commissions.
• The City Clerk & City Attorney
undertake annual training for Boards
and Commissions, with that having
taken place in February 2020. In
addition a leadership coffee was
launched in 2018, and conducted in
February each year with the Mayor
and Vice Mayor meeting with the
Chair and Vice Chair of each of the
Commissions in a joint session to
exchange ideas and information.
159
City Clerk/Public Information Officer (PIO)
Department Expenditure Summary
FY 19-20 FY 20-21 FY 21-22 FY 22-23
Actual Actual Budget Proposed
Expenditures By Type
Salaries & Benefits 259,046$ 258,156 $ 208,329 $ 205,654$ Contractual Services 94,219 61,531 68,000 120,300 Other Operating Costs 17,075 13,823 73,650 33,350 Cost Allocation 98,632 104,147 76,876 81,000 Capital Outlay 12,123 - 10,000 10,000 Debt Service - - - - 481,095$ 437,657 $ 436,855$ 450,304$
Expenditures By Fund/Program
General Fund
City Clerk 352,885$ 396,495 $ 401,355 $ 413,004$ Outreach 301 355 - 300 Cable TV 127,909 40,807 35,500 37,000 481,095$ 437,657 $ 436,855$ 450,304$
Expenditure Trends
-
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
500,000
FY 19-20 FY 20-21 FY 21-22 FY 22-23
Capital Outlay
Cost Allocation
Other Operating Costs
Contractual Services
Salaries & Benefits
160

FINANCE

FINANCE

KEY PRIORITIES
2022-23:
• Restructure debt
where possible to
reduce near term debt
payments
• Ensure on-going
revenues support on-
going costs
• Provide timely budget
and financial reports
to City departments
to assist in meeting
departmental missions
• Improve and
update the Long-
Range Financial Plan
and its underlying
assumptions
• Update or establish
written documentation
for various finance
policies and
procedures.

The Finance Department is responsible for providing the City, and its agencies (including the Successor Agency and the Public Financing Authority), with the fiscal oversight and controls necessary to ensure sound financial management. The Department oversees budgeting, accounting, revenue collection, and protection of city-wide assets. The Department is responsible for managing the City’s fiscal resources in a prudent and effective manner and undergoes an external audit every year. The Department also provides internal support for all city departments and reporting services to enhance accountability and assist with strategic planning and decision-making. The Department is committed to providing financial information in a timely manner and to providing positive customer service to both external and internal customers.

The Department is also responsible for the coordination and completion of the annual audit for all City funds, and related audits for Hercules’ Public Financing Authority, Wastewater fund, and federal funds, Measure B and C.

CITY OF HERCULES FY 2022-23 ANNUAL BUDGET
664647614
941
734 665 819 995 971

OPERATING INDICATORS
Number of Business Licenses Issued
2015201420132012 2016 2017 2018 2019 2020 2021
City of Hercules, Last Ten Fiscal Years
1,103
161

FINANCE
• The Budget document has been
awarded the Distinguished Budget
Presentation Award from Government
Finance Officers Association (GFOA).

This award is the highest form of
recognition in governmental budgeting.
• Enforces and monitors the General
Fund Reserve and Fund Balance
Policy that reflects best practices and
prudently protects the fiscal solvency of
the City. At the close of last fiscal year,
the working capital reserve (3 months
of expenditures) was fully funded.
• Timeliness, accuracy, and
transparency in financial reporting
is an important City goal. The
Department continues to provide
timely delivery of the Basic Financial
Statements, in which the independent
auditor issued a clean opinion last fiscal
year. The Department continues to
promptly deliver budget, financial and
investment updates to the City Council,
Finance Committee, and the public.
• The Department continues to
proactively address delinquent
accounts through its audit and
collection efforts to maximize City
collections and cash flow.
• The Department continues to focus
on the City Council strategic goal of
fiscal sustainability. The Long-Range
Financial Plan is one of those efforts
that enables the City to understand the
long-term fiscal effects of its decisions
and to plan for future challenges like
CalPERS cost increases and recessions.

FINANCE
WORKPLAN HIGHLIGHTS:

CITY OF HERCULES FY 2022-23 ANNUAL BUDGET
162
Finance
Department Expenditure Summary
FY 19-20 FY 20-21 FY 21-22 FY 22-23
Actual Actual Budget Proposed
Expenditures By Type
Salaries & Benefits 521,803 $ 551,713 $ 566,000$ 585,630$ Contractual Services 185,643 231,660 223,000 235,000 Other Operating Costs 218,423 196,264 219,000 221,000 Cost Allocation 119,062 126,387 147,608 161,000 Capital Outlay - - - - Debt Service - - - - 1,044,931 $ 1,106,024 $ 1,155,608$ 1,202,630$
Expenditures By Fund/Program
General Fund $1,044,931 $1,106,024 $1,155,608 $1,202,630 Expenditure Trends
$0
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
$1,400,000
FY 19-20 FY 20-21 FY 21-22 FY 22-23
Debt Service
Capital Outlay
Cost Allocation
Other Operating Costs
Contractual Services
Salaries & Benefits
163

CITY ATTORNEY

CITY ATTORNEY

KEY PRIORITIES
2021-22:
• Provide high-
quality legal services
in a cost-effective
manner
• Develop and
recommend
strategies to reduce
legal risk and
exposure to liability
• Work to minimize
litigation exposure
and resolve litigation
in an effective
manner
• Effectively manage
special counsel
contracts and
services
Appointed by the City Council as the City’s chief legal advisor, the City Attorney provides all legal services and advice to the City Council, Commissions, and staff. The City Attorney represents the City in all litigation, and manages any special counsel services, including when used for litigation. Elements of the City’s risk management efforts and claims administration are also handled by the City Attorney.

Serving as the City’s legal counsel, the City Attorney contributes to the City’s overall operation in a multiplicity of service areas and in support of all Strategic Plan goals, and in particular Goal H and two related strategies:

Continue to Provide Exemplary Governance and City
Administration
Strategy 1: Improve administrative processes and overall quality of executive and administrative management.

Strategy 3: Provide and enhance exemplary governance.

CITY OF HERCULES FY 2022-23 ANNUAL BUDGET
164
• Perform all requested legal work
and review and prepare required
documents and contracts in a
timely manner, including ordinances,
resolutions, legal opinions, and contracts
and agreements.
• Provide the City Council with regular
litigation and claims updates, including
assessment of success, liability, and
advise as to how to best manage and
respond to pending or active litigation
and claims.
• Review all agenda items, staff
reports, and related attachments for
consideration by the City Council, and
Commissions as needed, including
assessing and ensuring compliance
with law and best practices from a
legal perspective, approving required
documents as to form, advising staff and
the City Council on those matters.
• Facilitate the City’s public
improvements and private
development projects through on-
going support of these activities,
including consideration by the Planning
Commission and City Council of private
development, preparation and award
of bids for public projects, assisting
with contract award and management,
resolution of legal issues which may
arise, and close-out of completed
projects and assisting with any claims
which may arise.
• Identify on a pro-active basis any
opportunities to avoid exposure to
legal risk or concerns and take steps to
do so, including regularly consulting with
the City Council, City Manager, and staff
on up-coming projects and activities,
monitoring the changing legal landscape
and new case law, and engaging with a
variety of stakeholders to better assess
areas of possible concern.

CITY ATTORNEY

CITY ATTORNEY
WORKPLAN HIGHLIGHTS:

CITY OF HERCULES FY 2022-23 ANNUAL BUDGET
165
City Attorney
Department Expenditure Summary
FY 19-20 FY 20-21 FY 21-22 FY 22-23
Actual Actual Budget Proposed
Expenditures By Type
Salaries & Benefits -$ - $ - $ - $ Contractual Services 284,709 154,562 265,000 273,000 Other Operating Costs - - - - Cost Allocation - - - - Capital Outlay - - - - Debt Service - - - - 284,709$ 154,562 $ 265,000$ 273,000$
Expenditures By Fund/Program
General Fund 284,709$ 154,562 265,000$ 273,000$ Expenditure Trends
$0
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
FY 19-20 FY 20-21 FY 21-22 FY 22-23
Contractual Services
166
POLICE
POLICE

COMMUNITY

SERVICE
With a commitment to
ethical policing and building
community relationships,
our mission is to provide
consistent service with
integrity and equality to all.

Our vision is to create
community partnerships
though positive and
transparent engagement by
adhering strictly to our core
values of Integrity, Equality,
and Consistency.

We strive to meet
this challenge while
safeguarding the rights of
all individuals we come into
contact with.

We maintain a caring
attitude and empathize
with those we serve. We
welcome and seek an
active partnership with the
community in carrying
out our responsibilities.

We recognize that to be an
effective law enforcement
agency we must have the
support, confidence, and
trust of our community. We
work diligently to be a part
of this community and not
apart from it.

The Hercules Police Department has
26 sworn officers and 3 non-sworn
full-time positions within numerous
operating units and Divisions, including
Patrol, Investigations, Traffic, Records
and Property and Evidence.

The HPD is responsible for protecting
the City’s residents, property owners,
and businesses by patrolling 10.6 square
miles of Hercules using cars, bicycles,
and motorcycles.

The Department fosters a problem-
solving, community policing philosophy,
and works collaboratively with policy
makers, the City Manager’s Office and
the community to address problems of
crime and property damage.

CITY OF HERCULES FY 2022-23 ANNUAL BUDGET

OPERATING INDICATORS
Calls for Service Hercules Police Department Last Ten Fiscal Years 2011 2020 2011 2020 2011 2020
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
15,984 12,960 12,309 12,550 1,843 7,707 13,142 16,245 16,918 23,924 0 500
1000
1500
2000
2500
Part 1 & 2
Crimes
Arrests Traffic
Violations
1,000 636
573 620
2,100
588

CONTACT INFORMATION
Phone: (510) 799 8260
Office Address:
111 Civic Drive,
Hercules CA, 94547
Office Hours: M-F, 8 AM-5
PM
Website: ci.hercules.ca.us
Facebook: Hercules Police
Department
167
POLICE
POLICE

RESPOND TO PRIORITY ONE
and non emergency calls for service within
designated time frames.

INCREASE EFFORTS
in traffic enforcement to reduce the number of
pedestrian-related accidents

RESPOND QUICKLY
and effectively to community generated complaints.

PROVIDE EFFICIENT COMMUNICATION
through the use of technology and social media

RE-START THE CITIZENS POLICE ACADEMY
to provide transparency into policy and procedure,
and engender confidence in service levels.

CITY OF HERCULES FY 2022-23 ANNUAL BUDGET
• We will continue to provide traffic
safety, enforcement, and education
services to the community
• We will continue to
coordinate disaster
preparedness with
Fire, Emergency Medical
Services and the County
and State Office of
Emergency Services.
• Critical training for all Department
personnel will continue to be provided
including Crisis Intervention Team
(CIT), De-Escalation Tactics, Procedural
Justice, and Racial Profiling.
• Parolees, probationers, and
registered sex offenders living within
Hercules will continue to be strictly
monitored.
• We will continue to seek Federal,
State, and other funding to enhance
staffing and equipment.

WORKPLAN HIGHLIGHTS:
1 2
3 4
6 RECRUIT, HIRE AND DEVELOP
qualified men and women from a diverse community
to maintain high levels of service to the community.
5 168
Police
Department Expenditure Summary
FY 19-20 FY 20-21 FY 21-22 FY 22-23
Actual Actual Budget Proposed
Expenditures By Type
Salaries & Benefits 5,876,171$ 5,716,011 $ 5,809,077 $ 6,198,997$ Contractual Services 748,554 876,397 724,000 674,000 Other Operating Costs 256,622 480,512 308,000 284,000 Cost Allocation 756,518 702,012 724,608 813,000 Capital Outlay - - 25,000 - Debt Service - - - - 7,637,865 $ 7,774,932 $ 7,590,685 $ 7,969,997$
Expenditures By Fund/Program
General Fund
Administration/Inspection/Support 3,376,778$ 3,913,658 $ 3,381,248 $ 3,370,800$ Patrol 4,188,147 3,635,370 4,164,437$ 4,554,197
7,564,925 7,549,028 7,545,685$ 7,924,997
Asset Forfeiture 72,940 225,904 45,000$ 45,000 7,637,865$ 7,774,932$ 7,590,685$ 7,969,997$
Expenditure Trends
$0
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
$7,000,000
$8,000,000
FY 19-20 FY 20-21 FY 21-22 FY 22-23
Cost Allocation
Other Operating Costs
Contractual Services
Salaries & Benefits
169

COMMUNITY DEVELOPMENT

COMMUNITY DEVELOPMENT

KEY PRIORITIES
2022-23:
• Providing effective and
efficient Core Services,
including processing of
development applications
and building permits.
• Advancing the next
phases of the Hercules
Regional Intermodal
Transportation Center.
• Completing the update
of the City’s Housing
Element of the General
Plan.
• Expanding the City’s
tax base through quality
development, including
the Bayfront project and
the North Shore Business
Park.
• Revisiting the City’s
sign ordinance and other
policies and updating as
needed.
• Ensuring successful
implementation
of remaining new
development
opportunities, including
establishing long-term
plans for managing shared
parking and affordable
housing for the Bayfront
project.

The Community Development Department provides
information and advisory services to decision makers and the public regarding the growth and development of the community to ensure balanced and appropriate land use. The Community Development Department processes current and long-range development applications in accordance with the City’s adopted General Plan and zoning ordinance and provides staff support to the City Council and Planning Commission. In addition, the Community Development Department responds to public inquiries regarding zoning, land use, use permits, and development standards. The Community Development Department is also responsible for preservation of the City’s historic structures.

Community Development includes the Building Division which ensures the safety of the citizens of Hercules through enforcement of state and local codes, standards, and regulations. The Division works diligently to ensure that all new construction meets the standard of construction required by the codes, and that all existing structures are maintained in a safe condition.

CITY OF HERCULES FY 2022-23 ANNUAL BUDGET

OPERATING INDICATORS
Number of Building Permits issued
622631672661 782 778 756 811
675
1,016
2015201420132012 2016 2017 2018 2019
City of Hercules, Last Ten Fiscal Years
2020 2021
170

COMMUNITY DEVELOPMENT
• Pursue the continued evolution of
Hercules into a transportation hub
and address local traffic and circulation
concerns, including securing funding
for the next phases of the Hercules
Regional Intermodal Transportation
Center, securing grants for other
street and pedestrian enhancements
to the circulation network, utilize
the Planning Commission and the
Council’s Public Safety & Traffic
Committee as sounding boards for
community concerns.
• Maintain a safe and attractive
community, including ensuring
new development adds the overall
quality of the community.
• Enhance the City’s economic base,
including completing the build-out
of the Bayfront and other remaining
development sites with an emphasis
on uses which also expand the
City’s tax base, while mitigating any
impacts from new development.
• Identify and pursue grant
opportunities for the
Hercules Regional Intermodal
Transportation Center, including
working with our regional partners,
advancing the design of the next
phases to ensure they are shovel ready,
and building support for the project
among key constituencies.
• Ensure the successful build-out
of the Waterfront Master Plan and
the Bayfront, including: guiding
the construction and entitlement
components of each phase, forming
the Waterfront Parking entity;
developing the required affordable
housing implementation agreement;
and working with the developer
to ensure a vibrant and model
transportation oriented-development
results.
• Expand the City’s Tax Base through
new development, including
completing the Safeway center,
facilitating the start of construction
of the approved Willow Avenue
Auto Service Center and Self-
Storage center, Sycamore Crossing
development including the hotel and
retail components, and the Hilltown
project, and identify and pursue other
opportunities such as the possible
reuse of the Franklin Canyon Golf
Course site.

COMMUNITY DEVELOPMENT
WORKPLAN HIGHLIGHTS:

CITY OF HERCULES FY 2022-23 ANNUAL BUDGET
171
Community Development
Department Expenditure Summary
FY 19-20 FY 20-21 FY 21-22 FY 22-23
Actual Actual Budget Proposed
Expenditures By Type
Salaries & Benefits 467,056$ 348,918 $ 391,606 $ 384,965$ Contractual Services 115,272 73,011 2,254,000 330,000 Other Operating Costs 10,048 287,052 46,000 16,000 Cost Allocation 88,714 87,478 85,204 87,000 Capital Outlay 39,050 2,444 150,000 560,000 Debt Service - - - - 720,140$ 798,903 $ 2,926,810 $ 1,377,965$
Expenditures By Fund/Program
General Fund 611,296 792,456 725,810 817,965 DIF-Public Facilities 35,142 (1,285) 1,000 - Community Development Fund - - - - Development Fee 34,652 (1,285) 1,000 - DIF-Police Facilities 39,050 2,444 100,000 60,000 DIF-Fire Facilities - 829 522,000 - DIF-Park & Recreation - - 50,000 - Public Benefit Fee - - - 500,000 DIF-Traffic Facilities - - 180,000 - STMP Traffic Impact - 5,744 1,347,000 - 720,140$ 798,903$ 2,926,810$ 1,377,965$
Expenditure Trends
$0
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
FY 19-20 FY 20-21 FY 21-22 FY 22-23
Capital Outlay
Cost Allocation
Other Operating Costs
Contractual Services
Salaries & Benefits
172

PUBLIC WORKS

PUBLIC WORKS

KEY PRIORITIES
2021-22:
• Continue to
aggressively pursue
grant funding for the
City’s CIP projects
• Advance the Hercules
RITC
• Effectively manage
day-to-day operations
to ensure Hercules
keeps its reputation as a
well-maintained City
• Expedite processing
of private development
projects
• Implement COVID-19
pandemic best
management practices
for public infrastructure
• Increase oversight
of City-wide public
facilities
The Public Works Department constructs, maintains, and operates the City’s public infrastructure including streets, sidewalks, traffic signals, bridges, streetlights, storm drain system, stormwater basins, creeks, sewer collection system, landscaping, parks, and public buildings. The Department is staffed with 11 employees and is organized into two Division overseen by the Public Works Director/City Engineer who reports to the City Manager.

The Engineering Division administers the City’s Capital Improvement Program including grant funding, reviews and inspects grading and public improvements on private development projects, reviews traffic engineering, and administers the City’s Clean Water Program. The Division also responds to public inquiries, administers the sewer lateral certification program, and issues encroachment permits, grading permits, wide-load permits. The Division consists of 1 employee, an Assistant Engineer, in addition to the City Engineer.

The Maintenance & Operations Division maintains the City’s public parks, landscape medians, streets, sidewalks, infrastructure and public facilities. This division makes certain that the stormwater and wastewater discharged into San Pablo Bay is clean through the City’s Creek Maintenance Program, Storm Drain Maintenance Program, Street Sweeping Program and Sanitary Sewer Program. In addition, the Public Works Division eliminates safety hazards with the City’s Fire Break Program in open spaces, Tree Trimming Program in parks and streets, and maintains an ongoing hazard abatement program. The Division also administers the City-wide Lighting and Landscaping Assessment Districts, abates graffiti, and cleans up illegal dumping. It is staffed with a Maintenance Superintendent and 8 Maintenance Workers.

CITY OF HERCULES FY 2022-23 ANNUAL BUDGET
173

PUBLIC WORKS

PUBLIC WORKS
CITY OF HERCULES FY 2022-23 ANNUAL BUDGET
The Public Works Department supports the
achievement of all Strategic Plan goals, and in
particular:

Goal D: Enhance Transportation Access and
Options
Strategy 1: Promote Alternative Forms of Transit
Goal G: Invest In and Enhance Maintenance of
Public Infrastructure and Facilities
Strategy 1: Re-evaluate and Make
Recommendations to Improve the City’s Capital
Improvement Programs, Clean Water Programs and
all Lighting and Landscaping Assessment Districts.
• Formalize Maintenance & Operations
oversight of public infrastructure,
including assignment of a geographic
zone to each
staff member
collectively
encompassing
the entire City
to identify and
respond to
trash, illegal
dumping of
dirt and debris,
deceased
animals, sign and striping replacement
needs, tripping hazards, etc.
• Advance the Capital Improvement
Program, including the $12.9M Sycamore
Sewer Trunk Main Replacement Project,
$1.4M Willow/Palm Sidewalk Installation,
and Pedestrian Enhancement Projects at
Sycamore/Civic & San Pablo/Sycamore,
and $1.15M Design Contract for the RITC.
• Facilitate the successful completion
of the Safeway Project and Sycamore
Crossing Project with Hotel, including
roadway improvements and utility
relocations.
• Complete the Sewer Fund Financial
Model, including incorporating
recommendations from the 2020 Master
Plan Update, projected expenditures from
the upgraded Waste Water Treatment
Project, and recommendations from the
Citywide CCTV of sewer mains.
• Increase focus on Maintenance &
Operations organizational development
and training, including cross training on
core equipment such as the backhoe and
basket truck and operation of sewer lift
stations and HVAC systems in buildings.

WORKPLAN HIGHLIGHTS:

The Public Works inventory includes:
58 miles
of city streets
1,494
street and
parking lot
features
14 traffic signals
7 miles
of bike lanes
62 miles
of sanitary sewers
174
Public Works
Department Expenditure Summary
FY 19-20 FY 20-21 FY 21-22 FY 22-23
Actual Actual Budget Proposed
Expenditures By Type
Salaries & Benefits 2,086,371$ 2,133,274$ 2,325,332$ 2,293,235$ Contractual Services 2,798,994 3,230,653 2,568,072 3,008,440 Other Operating Costs 2,385,291 2,784,678 3,400,044 3,734,800 Cost Allocation 778,390 808,601 1,035,263 971,091 Capital Outlay 6,324,569 5,510,529 15,865,947 2,208,000 Debt Service 723,631 1,193,797 2,244,125 2,047,700 15,097,246$ 15,661,532$ 27,438,783$ 14,263,266$ Expenditures By Fund/Program
General Fund 305,464 292,525 374,592 382,985 Citywide L&L 83-2 2,206,042 1,668,019 1,643,036 1,821,226 Victoria By The Bay L&L 2002-1 549,975 569,426 511,493 557,342 Hercules Village L&L 2002-2 197,357 176,205 193,694 199,119 Baywood L&L 2004-1 178,012 117,753 287,729 145,333 Bayside L&L 2005-1 68,900 138,721 81,694 114,186 Arterial Roadways 237,233 286,301 305,844 333,123 Stormwater 372,913 373,638 421,000 374,577 State Gas Tax 1,223,234 668,907 1,564,701 669,636 Measure "C" Street Fund 620,283 478,345 519,000 423,916 BART Park & Ride 227,849 16,000 17,000 Solid Waste and Recycling 108,350 10,179 111,000 111,881 Grants - - 254,000 - City Capital Project 930,974 - 194,000 247,000 Energy Conservation Project 3,398,240 - - CCTA MEAS J EXP PLAN 148,666 135,020 50,000 60,000 CCTA TLC GRANT 70,135 250,954 - - SAFETEA LU - - - 300,000 Water Quality Retention Basin 22,083 20,802 44,000 - STMP-SUB REG TRANS PROJ - 25,047 - - Sewer 7,206,739 6,059,336 20,018,000 7,417,750 ISF - Equipment Replacement 146,762 206,373 55,000 276,000 ISF - Facilities Maintenance 504,124 557,892 794,000 787,192 ISF - Facilities Replacement 25,000
15,097,246$ 15,661,532$ 27,438,783$ 14,263,266$ Expenditure Trends
$0 $5,000,000 $10,000,000 $15,000,000 $20,000,000 $25,000,000 $30,000,000 FY 19-20
FY 20-21
FY 21-22
FY 22-23
Salaries & Benefits
Contractual Services
Other Operating Costs
Cost Allocation
Capital Outlay
Debt Service
175
To illustrate this point, we
offer our “High-Five” list for
the community…

5. Fantastic Parks and Trails:

great parks, miles of trails to walk,
ride, roll, exercise

4. Great amenities:

Hercules Swim Center, Refugio Valley
Tennis Courts, Senior Center

3. Outstanding Recreation
Programs and Services:

Camp Dynamite, TinyTots, RAP,
Senior Services

2. Caring staff: motivated and
dedicated to serving the community

1. Full circle of life services:

Programs for all ages from
preschool to seniors with a
“families first” pledge
The Hercules Parks and Recreation
department held many special events
this past year. And we have been
encouraged by the tremendous showings
of community members at these events.

And we are
now seeing
more and more
families return
to a variety of
programs. We
are also seeing
an increase in
Facility Rentals.

The Hercules Parks and Recreation
Department is proud to continue to offer
essential services to the community. We
have a fantastic mixture of camps for
children from preschool through teens,
as well as a plethora of independent
contractor camps and programs offered
both in-person and virtual this summer.

We also have several special events
coming up this summer featuring a return

PARKS AND RECREATION

PARKS AND RECREATION
GOALS:
• Return all programs
and facility rentals to pre-
pandemic levels
• Create new programs/
modify existing programs
based on the trends to meet
the changing needs of the
community.
• Complete CIP projects,
decision packages/budget
referrals, and other important
projects:

Wrap up projects like the
All-Abilities Swing
Gym Floor refurbishment
at the Community Swim
Center
Replace safety fencing
around swimming pool
Identify and enter into
contract for Prop 68 (Clean
Water and Parks Act) project
by end of FY23
CITY OF HERCULES FY 2022-23 ANNUAL BUDGET
As Dorothy (Judy Garland) once said, in the 1939 classic film - The Wizard of Oz, “There’s no place like home”.

After 2 years of pandemic and restrictions, the time has come for us to collectively click our heels and repeat those 5 magical words; say it with me…“There’s no place like home”. Home is where the heart is, and the heart of Hercules can be found here in Parks and Recreation Department. 176
13 Parks
9 Playground
Structures
8 Picnic Areas
8 Tennis Courts
5 Swings
5 Recreation
Centers (including
a Teen Center and
Senior Center)
4 Outdoor
Basketball Courts
3 Childcare Facilities
3 Multi-Use Fields
2 Baseball/Softball
Fields
2 Soccer Fields
2 Horseshoe Pits
2 Bocce Ball Courts
2 Gazebos
2 Pools
1 Gymnasium
1 Dog Park
1 Outdoor Fitness
Par Course
and miles of trails
to walk, hike, bike,
skate
to FREE movies in the park, National Night
Out, and of course the Fireworks Celebration
on July 4. In addition, staff is currently
working on fall programs, and will be bringing
a new twist to Trunk or Treat with our first
annual “Pump-Ka-Taaz” (pumpkin carving
contest). More information will be in the 2022
Fall Activity Guide coming mid-July.

Parks and recreation programs and services
contribute to the health of the participants
with a variety of opportunities that enrich
lives. Not only do parks and recreation
improve health but they improve economic
value. Quality Parks and Recreation programs
are often credited as a top reason for families
and businesses when relocating. Increasing
property values help raise the local tax base.

Homes closer to parks ultimately improve
the local economy. Parks and recreation
services are one of the most important factors
in surveys of “how livable” communities are.

Parks provide gathering places for families
and social groups for all ages, abilities, and
economic status, and they are often linked to a
reduction in crime.

PARKS AND RECREATION

PARKS AND RECREATION
CITY OF HERCULES FY 2022-23 ANNUAL BUDGET
• Adapt, be
flexible, be
nimble, re-create
programs based
on community
needs
• Create Parks
Master Plan
and Facilities
Assessment in
FY22-23
• Look for
opportunities
to expand parks
through grants
and other
avenues

WORKPLAN
HIGHLIGHTS:

ACCOMPLISHMENTS
(examples, not all encompassing)

FACILITIES
• Printed & Mailed 2022 Summer Activity Guide – first printed guide since the start of the pandemic
• Replaced diving boards at the Community Swim Center
• Replaced main pool heater pump
• Youth Program staff participated in Summer Leader Institute Training at Cal State East Bay
• Completed Renovation of the Sycamore Mural
EVENTS:

Looking forward to the return
of events like…
• Community Clean-up Day
(Sa 5/7/22)
• Fireworks Celebration (M 7/4/22)
• Movie Nights (7/22, 8/19 and
9/16/22)
• National Night Out (Tu 8/2/22)
• Unity Day (W 10/19/22)
• Pump-Ka-Taaz (October 2022)
NEW!

• Trunk or Treat (F 10/28/22)
• Holiday Tree Lighting (Su
12/4/22)
• Breakfast with Santa (Sa 12/10/22)
• EGGstravaganza, Splash-A-
Palooza & Rec Expo (Spring 2023)
• And more…
177
Parks & Recreation
Department Expenditure Summary
FY 19-20 FY 20-21 FY 21-22 FY 22-23
Actual Actual Budget Proposed
Expenditures By Type
Salaries & Benefits 1,568,686$ 1,009,714 $ 922,193$ 1,448,422 $ Contractual Services 277,242 164,242 444,792 195,800 Other Operating Costs 85,165 27,543 121,615 42,600 Cost Allocation 234,453 233,486 298,203 360,300 Capital Outlay - - - - Debt Service - - - - 2,165,546 $ 1,434,985 $ 1,786,803 $ 2,047,122$
Expenditures By Fund/Program
General Fund
Library 111,937 98,059 118,941 113,800 Administration 37,377 12,094 28,615 33,200 Facility Rentals 156,993 74,100 81,050 135,403 Lupine Day Camp 139,577 49,142 137,995 139,891 Ohlone Day Camp 4,935 5,006 3,604 6,041 Ohlone Child Care 207,673 137,380 146,363 199,741 Hanna Child Care 216,183 152,936 165,343 222,216 Lupine School Child Care 207,859 154,298 160,020 213,653 Recreation Classes 74,239 60,722 101,237 87,433 Senior Citizens 67,959 50,997 54,283 62,167 Tiny Tots 279,429 132,627 224,055 265,668 Swim Center 402,179 300,382 329,389 283,469 Sport Program 91,716 77,741 86,149 108,181 Teen Program 16,514 15,862 21,824 25,348 Community Center-Concession Stand 372 436 - - Youth/Teen Resource Center 150,604 113,203 127,935 150,911 2,165,546$ 1,434,985$ 1,786,803$ 2,047,122$
Expenditure Trends
$0 $500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000 FY 19-20
FY 20-21
FY 21-22
FY 22-23
Salaries & Benefits
Contractual Services
Other Operating Costs
Cost Allocation
178
Non-Departmental
Department Expenditure Summary
FY 19-20 FY 20-21 FY 21-22 FY 22-23
Actual Actual Budget Proposed
Expenditures By Type
Contractual Services 147,170 8,975 275,000 300,000 Reserve and Pension Contribution 525,034 9,877 1,758,475 - Settlement Payment 1,812,075 604,025 604,025 604,025 Debt Service 1,885,774 1,520,336 1,667,000 1,951,000 Transfers 2,075,766 2,680,814 5,232,037 1,631,288 6,445,819$ 4,824,027$ 9,536,537$ 4,486,313$ Expenditures By Fund/Program
General Fund 2,684,279$ 822,877$ 2, 772,500$ 804,025$ American Rescue Plan Act (ARPA) - - 65,000 300,000 2,684,279 822,877 2,837,500 1,104,025 Debt Service
Suntrust Lease 205,099 205,099 205,000 103,000 Equipment Lease - - 218,000 227,000 2003B PFA Lease Revenue Bonds 566,010 205,522 133,000 513,000 2009 PFA Taxable Lease Revenue Bonds 914,665 909,715 911,000 908,000 1,685,774 1,320,336 1,467,000 1,751,000 Transfers
General Fund 1,333,177 1,641,579 1,697,500 992,934 AB3229 COPS Program 155,948 150,000 150,000 150,000 Citywide L&L 83-2 238,714 221,212 241,000 258,100 Victoria By The Bay L&L 2002-1 24,960 23,792 26,800 27,200 Hercules Village L&L 2002-2 3,524 6,487 7,100 7,500 Baywood L&L 2004-1 2,835 2,289 2,400 2,700 Bayside L&L 2005-1 13,145 15,587 17,600 18,500 Stormwater 71,387 - - - State Gas Tax 9,038 54,988 46,299 49,354 Measure "C" Street Fund 9,038 - - - Solid Waste and Recycling 214,000 124,237 125,000 125,000 American Rescue Plan Act (ARPA) - - 2,918,338 - ISF - Facilities Maintenance - 440,643 - - 2,075,766 2,680,814 5,232,037 1,631,288 6,445,819$ 4,824,027$ 9,536,537$ 4,486,313$ Expenditure Trends
$0 $2,000,000 $4,000,000 $6,000,000 $8,000,000 $10,000,000 FY 19-20
FY 20-21
FY 21-22
FY 22-23 Contractual Services
Reserve and Pension
Contribution
Settlement Payment
Debt Service
Transfers
179

GENERAL FUND
180
CITY OF HERCULES FY 2022-23 ANNUAL BUDGET GENERAL FUND OVERVIEW

GENERAL FUND OVERVIEW
The General Fund is the chief operating fund of the City. This fund is used to record all resource inflows and outflows that are not associated with special-purpose funds. The activities being paid for through the general fund constitute the core administrative and operational tasks of the City.

MAJOR REVENUE
The City relies on several major revenue sources to support the General Fund budget. As shown in the graph below, General Fund revenues in FY 22-23 are projected to increase by approximately 6% compared to FY 20-21 actual receipts. The revenue increase is substantially driven by proceeds from sales tax and the program fees from the re-opening of the Parks & Recreation programs. The bulk of General Fund revenues come from taxes Utility User’s Tax (UUT), Sales Tax, Property Tax, Real Property Transfer Tax (RPTT), Transient Occupancy Tax (TOT) and other taxes). 0 5
10 15
$ 20 million
FY 22-23
Projection
FY 21-22
Budget
FY 20-21
Actual
FY 19-20
Actual
FY 18-19
Actual
FY 17-18
Actual
$16.62
million
$16.98
million $16.25
million
$16.01
million
$15.85
million
$16.92
million
16,976,707 16,013,203
General Fund Revenue
Misc.

Major
Revenue
Sources:

Interfund
Program
Revenue
Taxes
$14.11
million
$1.65 million
$0.83 million
$0.32 million
$13.33
million
$1.27 million
$0.89 million
$0.35 million
$13.37
million
$1.33 million
$0.77 million
$0.55 million
$12.61
million
$2.21 million
$0.76 million
$0.66 million
$12.13
million
$3.1 million
$1.01 million
$0.73 million
$11.81
million
$3.82 million
$0.44 million
$0.54 million
181
CITY OF HERCULES FY 2022-23 ANNUAL BUDGET GENERAL FUND OVERVIEW Sales and Use Tax
The largest revenue source for the City’s
General Fund is remitted to the City from
the State monthly. Sales Tax revenues are
conservatively estimated to increase by
5% compared to FY 20-21 actual receipts
based on the quarter three analysis
generated from the data received from
California Department of Tax and Fee
Administration (CDTFA). Total sales tax
revenues are highly concentrated within
a few major operators. Hercules sales
tax revenue is substantially generated
from business-to-business sources. Its
top 3 producers generate over 50% of
the City’s sales tax. The following chart
depicts the source of the City’s sales tax
revenues by industry group.

Utility User’s Tax
Utility User’s Tax (UUT) are revenues
collected from the consumption of utility
services, including (but not limited to)
electric, gas, water, sewer, telephone
(including cell phone and long-distance),
sanitation, and cable television. The City
determines the tax rate and the use of its
revenues. UUT revenues are estimated to
stay relatively flat compared to FY 20-21
actual receipts. Based on the trend and
its consumption rate, the City continues
to see erosion in Wireless Telecom’s UUT
revenues due to the update in allocations
of the bundled packages from the
respective providers. These updated
allocations shifted a more significant
percentage towards data, which is not
taxable.

On June 4, 2013, the voters approved
Ordinance #475, increasing the 6%
to 8%. The Utility User’s Tax
will automatically sunset, and
its provisions shall become
ineffective on January 1, 2025,
unless extended by a vote of
the electorate. The City’s UUT
revenue makes up $3.6 Million or
approximately 20% of the general
fund budget. If the UUT we’re
not renewed, this would cause
a significant decrease in general
fund revenue needed to continue
to provide vital services to the
community.

Gas
Cable
Water
Telephone
Electricity
20212020201920182017 FY 22-23
Projection
FY 21-22
Budget
Utility User’s Tax (UUT), Annual Per Capita
(Based on Actual Receipts)
$137 $140 $134 $134 $137 $134 $139
$17
$20
$30
$22
$53
$15
$21
$26
$20
$50
$20
$20
$29
$23
$48
$15
$21
$27
$26
$48
$15
$21
$24
$28
$46
$14
$22
$22
$34
$48
$16
$19
$18
$37
$47
General Retail
Transportation
Food Products
Construction
County Pool
Business
to Business
20212020201920182017
Sales Tax, Annual Per Capita
(Based on Actual Receipts)
$82
$4
$9
$12
$15
$12
$30
$4
$10
$12
$15
$13
$33
$4
$10
$12
$16
$17
$42
$4
$7
$11
$18
$25
$36
$4
$8
$20
$19
$26
$42
$87
$101 $101
$119
182
CITY OF HERCULES FY 2022-23 ANNUAL BUDGET GENERAL FUND OVERVIEW Property Tax
The City of Hercules has been classified as a low-
to-no property tax jurisdiction. The City’s share
of the base 1% property tax rate is lower than
most other jurisdictions at just a little over 5% of
Hercules’s total base property taxes. This year the
Assessor’s office applied a CPI factor of 2% to non-
Prop 8 parcels. It is estimated that the City share of
1% assessed property value tax is calculated to be
$1.5 million for FY 22-23.

Transient Occupancy Tax (TOT) – For
the privilege of occupancy, each transient is subject
to a 10% of the rent charged by operator. The TOT
is a general tax which is deposited into the City’s
General Fund. TOT revenue is expected to increase
by approximately $100,000 in FY 22-23 due to new
development.

Parks & Recreation Program
Revenues
During the COVID-19 pandemic and mandatory
closure, the Parks & Recreation program was heavily
impacted. The revenues from this program were
significantly reduced in the prior year due to the
suspension of programs and offerings and facility
rentals. The FY 22-23 revenue estimates reflect the
re-opening of suspended programs, and revenues
are projected conservatively equal to approximately
75% of total pre-pandemic actual receipts ($1.1
million).

Fees for Service
The City charges fees to the community based
on the costs of services provided. These fees are
documented in the City’s Master Fees & Charges
Schedule. The Master Fees & Charges schedule
is approved periodically by the City Council, and
individual fees may be amended from time to time
during a fiscal year. However, there must be a nexus
to the costs of the provision of those services.
183
Indirect Cost
The City of Hercules General
Fund includes expenses for all
administrative services (e.g.,
finance, human resources, attorney
services, etc.). A portion of these
services support the enterprise
funds, and other restricted funds.

The City uses a fair and equitable
indirect cost allocation process to
allocate departmental costs from
the General Fund to all funds that
benefit from the services that the
General Fund departments provide.

The plan is completed under
generally accepted accounting
principles (GAAP) as recognized
by the Governmental Accounting
Standards Board (GASB). The
primary principles used to develop
the plan are: 1) the allocated cost
is necessary and reasonable for
the proper performance of a
department, division, unit, and
program; 2) the allocated cost is
charged to departments, divisions,
units, and programs relative to the
benefits received; and 3) costs are
consistently treated as direct or
indirect. Those costs that cannot
reasonably be directly charged are
included in the Cost Plan.

Capital and Debt
Expenditures
The General Fund includes
Capital Improvement Projects
(CIPs) related to public buildings,
general improvements, street
improvements, drainage
improvements, and park
improvements.

The detail for each CIP that includes
additional funding in the upcoming
budget year can be found in the
Capital Improvement Program
section of this document. Debt
in the General Fund includes the
principal payments on outstanding
loans that are the obligation of the
General Fund.

Transfers Out
Funds are transferred out of the
General Fund for debt service,
loan repayments, and capital
projects. Future budgets will
include a transfer Capital Reserve
Fund for future capital needs,
Pension Reserve Trust Fund to
assist in funding future pension
contributions and Operating
Reserve up to the reserve limit.

Non-Recurring
Expenditures
These include projects that are
related to special studies. For
example, full cost projects related
to future developments and
engineering projects, such as traffic
studies, all of which are pass-
through expenses that are funded
by developer contributions.

GENERAL FUND EXPENSES
The General Fund includes expenses for operations, debt, capital, and transfers out.

The operating costs are for departments that provide services to the Hercules community, including Police, Public Works, Community Development, Parks & Recreation, and the general government departments. Operating expenses include retirement, health insurance, and one-time expenditures include the Department of Finance (DOF) settlement, and other capital projects.

CITY OF HERCULES FY 2022-23 ANNUAL BUDGET GENERAL FUND OVERVIEW 184
CITY OF HERCULES FY 2022-23 ANNUAL BUDGET GENERAL FUND OVERVIEW

FIVE-YEAR GENERAL FUND FORECAST
Although the economic outlook is blurred by uncertainty, with the Federal Reserve attempting to control inflation without another recession, the City remains optimistic about the future. Hercules’s financial condition is expected to improve in FY2022-23 as the City increases its General Fund reserves up to the City Council’s policy target levels of 25% and continues to pay down long-term obligations to create future budget capacity. The City’s FY2022-23 General Fund budget is driven mainly by revenues received from sales tax, including revenues from Measure B (half-cent sales tax). Measure B sales tax revenue has helped stabilize General Fund services, protect Hercules’ quality of life, and build additional reserves to weather future economic downturns.

The graph shows forecasted General Fund revenues and expenditures for FY2022-23 to FY2027-28 based on the City’s conservative forecast. The General Fund’s five-year forecast is based on maintaining the same service levels included in the FY2022-23 budget over the next five years. The City’s sales tax forecast assumes taxable sales return to an expected growth rate between 2.5 percent and 4.1 percent. Property tax revenue is forecast to continue to grow at 2% annually. The City assumes modest salary increases in the forecast based on negotiated labor agreements and its general pay philosophy. Pension costs are forecasted based on the latest information from the CalPERS actuaries. Other Post Employee Benefits (OPEB) costs are based on the City’s funding policy and information from the City’s OPEB actuary.

The City’s forecast also includes revenues from future new developments and expenses based on current law and policy. Still, it does not have events or changes that may or may not happen in the future. Because the five-year forecast is based on many assumptions that are not expected to be 100 percent accurate, staff will continue to monitor the changes in the economy. It will report to the City Council annually with updated projections.

If the Utility
User Tax is
dicontinued
there wil be
$3 million gap
in FY 2026-27
$25 million
$20 million
$15 million
$10 million
Expenditures Revenues without
Utility User Tax
Revenues
General Fund Five-Year Forecast
FY 2022-23 FY 2023-24 FY 2024-25 FY 2025-26 FY 2026-27
185
General Fund
Budget Balancing Spreadsheet

TOTAL ON-GOING ONE-TIME ARPA
Estimated Beginning Working Cash July 1, 2021 General Fund and Fiscal Neutrality 8,228,684 Reserve for Earthquake Insurance Deductible (500,000)
Reserve for Capital Projects (450,000)
Reserve for Planning (825,000)
Reserve for Building (21,800)
Reserve for Reusable Bags (remaining) (13,930)
Reserve for PEG Fees (70,000)
Subtotal, Reserves (1,880,730)
Estimated Beginning Available Working Cash July 1, 2021, Before Fiscal Nueutrality Fund 6,347,954 Reserve for Fiscal Neutrality (4,209,129)
Estimated Beginning Available Working Cash July 1, 2021, After Fiscal Nueutrality Fund 2,138,825 2,138,825 FY 21-22 Projected Surplus from baseline operations 524,700 524,700 FY 21-22 Net of One-time Revenues and Expenditures (1,710,500) (1,710,500) American Rescue Plan Act (ARPA) Loss of Revenue Component 2,918,338 2,918,338 FY 21-22 Priority ARPA Projects (1,020,500) (1,020,500) 2,850,863 - 953,025 1,897,838 Add: Revenues 16,916,000 16,916,000
One-Time Revenues:

Total Revenues 16,916,000 16,916,000 - - Subtract: Expenses (16,133,422) (16,133,422)
One-Time Expenses:
(1) Employee Labor Agreements (3% COLA and 3% Retention Bonus) (350,000) (190,000) (160,000) (2) Village Parkway Traffic Calming (CIP) (626,025) (626,025) (3) Building Facilities Plan (75,000) (75,000)
(4) Parks Master Plan (150,000) (150,000)
Total Expenses (17,334,447) (16,323,422) (786,025) (225,000) Surplus/(Deficit) (418,447) 592,578 (786,025) (225,000) 2,432,416 592,578 167,000 1,672,838 Estimated Beginning Available Working Cash July 1, 2022 Estimated Available Working Cash, June 30, 2023
186
General Fund
Budget Summary
FY 19-20 FY 20-21 FY 21-22 FY 22-23
Actual Actual Budget Proposed
Beginning Available Balance 2,412,068 $ 1,847,112 $ 2,138,825 2,850,863$ Revenues
Taxes
Utility User Tax 3,483,843 3,590,649 3,509,000 3,589,000 Sales Tax 4,212,285 4,775,496 4,654,675 4,998,000 Property Taxes 1,415,995 1,451,716 1,520,000 1,571,000 Franchise Fees 948,503 862,104 896,000 905,000 Business Licenses 251,418 268,697 198,000 274,000 Transfer Tax 142,850 126,488 132,000 146,000 Transient Occupancy Tax 6,179 7,635 5,000 114,000 Intergovernmental 2,151,433 2,285,392 2,418,000 2,511,000 Fines & Forefeitures 62,582 36,586 37,000 38,000 Program Revenues
Community Development 675,556 824,891 242,000 306,000 Parks and Recreation 1,020,758 396,290 753,000 1,156,000 Police 483,110 48,958 219,000 139,000 Public Works 28,588 46,908 48,000 38,000 Other 6,770 10,571 11,000 11,000 Use of Money & Property 600,707 511,188 313,000 286,000 Cost allocated to other funds 534,992 619,634 739,325 684,000 Transfers In 227,335 150,000 150,000 150,000 16,252,904 16,013,203 15,845,000 16,916,000 Expenditures
Police 7,409,758 7,549,028 7,545,685 7,821,727 Public Works 305,464 292,525 374,592 382,857
Community Development 611,297 792,456 725,810 810,561 Parks and Recreation 2,165,547 1,434,988 1,787,803 2,017,537 City Council 376,082 407,588 331,114 358,645 City Manager 385,675 360,115 454,908 490,186 Workers Comp/General Liability 1,084,650 1,081,116 1,235,837 1,265,554 Human Resources 219,514 241,725 324,088 319,689 Legal 284,709 154,562 265,000 273,000 City Clerk/PIO 481,094 437,657 436,855 446,610 Finance 1,092,102 1,124,876 1,155,608 1,191,122 Non-Department 874,110 366,938 260,000 615,934 Transfers Out 205,099 205,099 423,000 330,000 15,495,101 14,448,673 15,320,300 16,323,422 Net Annual Activity
Baseline Operations 757,803 1,564,530$ 524,700$ 592,578$ One-Time Revenues 1,723,486 600,750 1,056,000 - One-Time Expenditures (3,046,245) (1,873,567) (2,766,500) (786,025) Ending Available Balance (Before ARPA) 1,847,112 2,138,825 953,025 2,657,416 One-Time ARPA (Loss of Revenue) 2,918,338 -
One-Time ARPA Expenditures (1,020,500) (225,000) Ending Available Balance (Including ARPA) 1,847,112$ 2,138,825$ 2,850,863$ 2,432,416$ Operating Reserve:

Beginning Balance 3,797,650 2,764,975 $ 4,209,129 $ 4,209,129 $ Current Year Contribution 236,867 -
Interest Earned 174,612 -
Return/(Draw) - reserve (1,269,542) 1,269,542 - Ending Balance 2,764,975 4,209,129$ 4,209,129$ 4,209,129$ % of Projected Operating Expenditures 18% 29% 27% 26%
187
General Fund
Expenditure by Category
FY 19-20
Actual
FY 20-21
Actual
FY 21-22
Budget
FY 22-23
Proposed
Expenditures by Category
Police
Salaries & Benefits 5,876,171 5,716,011 5,809,077 6,095,727 Contractual Services 748,554 876,397 724,000 719,000 Other Operating Expenditures 28,514 254,608 263,000 257,000 Capital Outlay - - 25,000 - Cost Allocation 756,519 702,012 724,608 750,000 7,409,758 7,549,028 7,545,685 7,821,727
Public Works
Salaries & Benefits 13,898 6,487 26,769 11,857 Contractual Services 191,303 194,224 206,000 224,000 Other Operating Expenditures 50,543 70,404 22,000 22,000 Cost Allocation 49,720 21,410 119,823 125,000 305,464 292,525 374,592 382,857 Community Development
Salaries & Benefits 403,688 351,488 391,000 377,561 Contractual Services 115,272 66,438 235,000 330,000 Other Operating Expenditures 10,049 287,052 16,000 16,000 Cost Allocation 82,288 87,478 83,810 87,000 611,297 792,456 725,810 810,561 Parks & Recreation
Salaries & Benefits 1,568,686 1,009,714 923,193 1,418,837 Contractual Services 277,242 164,242 444,792 245,800 Other Operating Expenditures 85,166 27,546 121,615 42,600 Cost Allocation 234,453 233,486 298,203 310,300 2,165,547 1,434,988 1,787,803 2,017,537
City Council
Salaries & Benefits 80,733 77,546 69,000 69,645 Contractual Services 41,174 72,551 41,000 42,000 Other Operating Expenditures 32,422 26,333 38,000 38,000 Cost Allocation 221,753 231,158 183,114 209,000 376,082 407,588 331,114 358,645 City Manager
Salaries & Benefits 264,087 263,946 311,000 314,186 Contractual Services 41,261 10,567 54,000 64,000 Other Operating Expenditures 11,697 12,520 15,000 33,000 Cost Allocation 68,630 73,082 74,908 79,000 385,675 360,115 454,908 490,186 188
General Fund
Expenditure by Category
FY 19-20
Actual
FY 20-21
Actual
FY 21-22
Budget
FY 22-23
Proposed
Expenditures by Category
Worker's Compensation/General Liability
Salaries & Benefits 36,187 46,990 41,000 38,920 Contractual Services 1,048,463 1,034,126 1,194,837 1,226,634 1,084,650 1,081,116 1,235,837 1,265,554 Human Resources
Salaries & Benefits 141,106 152,925 188,671 181,289 Contractual Services 36,724 24,788 45,409 46,000 Other Operating Expenditures 6,371 25,667 47,250 48,400 Cost Allocation 35,313 38,345 42,758 44,000 219,514 241,725 324,088 319,689 Legal
Contractual Services 284,709 154,562 265,000 273,000 284,709 154,562 265,000 273,000 City Clerk/PIO
Salaries & Benefits 259,046 258,156 208,329 211,960 Contractual Services 94,219 61,531 68,000 70,300 Other Operating Expenditures 17,074 13,823 73,650 73,350 Capital Outlay 12,123 - 10,000 10,000 Cost Allocation 98,632 104,147 76,876 81,000 481,094 437,657 436,855 446,610 Finance
Salaries & Benefits 521,803 551,713 566,000 582,122 Contractual Services 232,814 240,635 223,000 230,000 Other Operating Expenditures 218,423 206,141 219,000 226,000 Cost Allocation 119,062 126,387 147,608 153,000 1,092,102 1,124,876 1,155,608 1,191,122
Non-Departmental
Debt Service - CalHFA 200,000 200,000 200,000 200,000 Debt Service - Library Bonds 674,110 166,938 60,000 415,934 874,110 366,938 260,000 615,934 Transfers Out
SunTrust Loan (Final Payment) 205,099 205,099 205,000 103,000 Engie Equipment Lease - - 218,000 227,000 205,099 205,099 423,000 330,000 Total, On-going Expenditures 15,495,101 14,448,673 15,320,300 16,323,422 189
FY 20-21 General Fund Available Balance Calculation
Audited
Available Fund
Balance
Ending fund balance, as reported in Audited Financial Statements 45,958,422$ Non-spendable (Due from Private Purpose Trust Fund) (27,787,637) Pension Section Trust (2,237,248)
Prepaid items (10,112)
Exclude Current Year Assets other than cash (4,183,016) Negative Cash (3,600,000)
Reserve for Earthquake Insurance Deductible (500,000)
Reserve for Capital Projects (450,000)
Reserve for Planning (825,000)
Reserve for Building (21,800)
Reserve for Reusable Bags (remaining) (13,930)
Reserve for PEG Fees (70,000)
Reserve for Encumbrances/Project Carryover (86,337)
Beginning available cash balance 6,173,342 $
Reserve for Economic Uncertainty (25% target) (4,034,517) Beginning cash balance, FY 21-22 2,138,825 $
190
General Fund
Summary of One-Time Activities
FY 19-20 FY 20-21 FY 21-22 FY 22-23
Actual Actual Budget Proposed
Coronavirus Relief Fund 351,747
RPTTF Pass Through 453,944 249,003 6,000 Projected Draw on Reserve 1,269,542
Planning: LEAP Grant 150,000
900,000
1,723,486 600,750 1,056,000 -
Increase in Planning Reserve 125,826
Increase in Fiscal Neutrality Reserve 236,867
Contribution to OPEB Trust 100,000
Contribution to Pension Trust 250,000
Encumbrances and Carryovers 521,477
Settlement Payment to DOF 1,812,075 604,025 604,000 604,025 Return of Unused Reserve 1,269,542
Planning: LEAP Grant 150,000
CAD/RMS System 198,000
Interfund Loan to LLAD 850,000
DP #22-1: Police Overhire 65,000
DP #22-2: One-time Retention Bonus 102,000
ADP #22-1: Sycamore Ave Mural Restoration 20,000
FBDP #22-1: Reserve for Restricted Planning Funds 107,000 FBDP #22-2: Contribution to IRS Section 115 Pension Trust 500,000 FBDP #22-4: Utility User Tax Renewal 40,000
BR #22-1: Special Event 175,000
BR #22-3: Repair the Community Pool Diving Board 12,000 BR #22-4: Corp Yard Landscaping 62,000
BR #22-5: Add Flock Cameras 2,500
BR #22-6: Add UUT Renewal 20,000
BR #22-7: Village Parkway Traffic Calming 100,000
BR #22-8: Elminate Contribution to Vehicle Replacement Fund (241,000) Employee Labor Agreements (3% Retention Bonus) 160,000
Village Parkway Traffic Calming (CIP) 22,000
3,046,245 1,873,567 2,766,500 786,025
Release Reserve for ROPS approval of RPTTF for
Emmerich and Montoya Lease
191
General Fund
Five-Year Financial Forecast (Assuming renewal of UUT)
Year 1 Year 2 Year 3 Year 4 Year 5
FY 19-20 FY 20-21 FY 21-22 FY 22-23 FY 23-24 FY 24-25 FY 25-26 FY 26-27 FY 27-28 Audited
Actuals
Audited
Actuals Budget Proposed Forecast Forecast Forecast Forecast Forecast Beginning Available Balance $ 2,412,068 $ 1,847,112 2,138,825 $ 2,850,863 2,432,416 2,986,416 3,747,886$ 1,020,207$ 850,693$ Revenues
Taxes
Utility User Tax 3,483,843 3,590,649 3,509,000 3,589,000 3,555,000 3,597,000 3,641,000 3,688,000 3,738,000 Sales Tax 4,212,285 4,775,496 4,654,675 4,998,000 5,269,000 5,501,000 5,736,000 5,973,000 6,214,000 Property Taxes 1,415,995 1,451,716 1,520,000 1,571,000 1,629,000 1,689,000 1,751,000 1,815,000 1,851,000 Franchise Fees 948,503 862,104 896,000 905,000 923,000 942,000 961,000 980,000 1,000,000 Business Licenses 251,418 268,697 198,000 274,000 279,000 285,000 291,000 297,000 303,000 Transfer Tax 142,850 126,488 132,000 146,000 149,000 152,000 155,000 158,000 161,000 Transient Occupancy Tax 6,179 7,635 5,000 114,000 116,000 118,000 120,000 122,000 124,000 Intergovernmental 2,151,433 2,285,392 2,418,000 2,511,000 2,576,000 2,675,000 2,777,000 2,883,000 2,941,000 Fines & Forefeitures 62,582 36,586 37,000 38,000 39,000 40,000 41,000 42,000 43,000 Revenues from New Developments 926,000 1,247,000 1,516,000 1,516,000 1,516,000 Program Revenues
Community Development 675,556 824,891 242,000 306,000 169,000 173,000 177,000 181,000 185,000 Parks and Recreation 1,020,758 396,290 753,000 1,156,000 1,180,000 1,204,000 1,228,000 1,252,000 1,276,000 Police 483,110 48,958 219,000 139,000 142,000 145,000 148,000 151,000 154,000 Public Works 28,588 46,908 48,000 38,000 39,000 40,000 41,000 42,000 43,000 Other 6,770 10,571 11,000 11,000 11,000 11,000 11,000 11,000 11,000 Use of Money & Property 600,707 511,188 313,000 286,000 292,000 298,000 304,000 310,000 316,000 Cost allocated to other funds 534,992 619,634 739,325 684,000 698,000 713,000 728,000 743,000 758,000 Transfers In 227,335 150,000 150,000 150,000 150,000 150,000 150,000 150,000 150,000 16,252,904 16,013,203 15,845,000 16,916,000 18,142,000 18,980,000 19,776,000 20,314,000 20,784,000 Expenditures
Police 7,564,927 7,549,028 7,545,685 7,821,727 8,173,000 8,509,738 8,806,151 9,098,009 9,363,654 Public Works 305,464 292,525 374,592 382,857 394,000 405,367 417,597 429,830 442,052 Community Development 611,297 792,456 725,810 810,561 842,000 875,225 900,517 926,193 951,941 Parks and Recreation 2,165,547 1,434,988 1,787,803 2,017,537 2,615,000 2,714,043 2,805,449 2,897,696 2,986,356 City Council 376,082 407,588 331,114 358,645 367,000 375,276 384,606 393,946 403,296 City Manager 385,675 360,115 454,908 490,186 518,000 536,485 552,028 567,883 584,018 Workers Comp/General Liability 1,084,650 1,081,116 1,235,837 1,265,554 1,304,000 1,342,597 1,382,907 1,423,265 1,465,573 Human Resources 219,514 241,725 324,088 319,689 334,000 347,484 361,233 370,719 379,221 Legal 284,709 154,562 265,000 273,000 281,000 290,000 299,000 308,000 317,000 City Clerk/PIO 481,094 437,657 436,855 446,610 458,000 475,791 493,847 512,522 529,470 Finance 1,044,931 1,124,876 1,155,608 1,191,122 1,239,000 1,282,524 1,326,344 1,367,451 1,407,142 Non-Department 766,112 366,938 260,000 615,934 827,000 828,000 628,000 632,000 635,000 Transfers Out 205,099 205,099 423,000 330,000 236,000 236,000 246,000 256,000 267,000 15,495,101 14,448,673 15,320,300 16,323,422 17,588,000 18,218,530 18,603,679 19,183,514 19,731,723 Net Annual Activity
Baseline Operations 757,803$ 1,564,530 $ 524,700 592,578 554,000 761,470 1,172,321 1,130,486 1,052,277 One-Time Revenues 453,944 600,750 1,056,000 - - - - - - One-Time Expenditures (1,234,170) - (2,162,475) (182,000) - DOF Settlement (1,812,075) (604,025) (604,025) (604,025) - CalHFA Loan Repayments - (3,900,000) (1,300,000) Draw/(Return) from Reserve 1,269,542 (1,269,542) - Ending Available Balance, Before
ARPA 1,847,112 2,138,825 953,025 759,578 1,313,578 2,075,048 (652,631) (822,145) 230,132 One-Time ARPA (Loss of Revenue) 2,918,338 -
One-Time ARPA Expenditures (1,020,500) (225,000)
Ending Available Balance, ARPA - - 1,897,838 1,672,838 1,672,838 1,672,838 1,672,838 1,672,838 1,672,838 Ending Available Balance 1,847,112 $ 2,138,825 $ 2,850,863 $ 2,432,416$ 2,986,416$ 3,747,886 1,020,207 850,693 1,902,970 - - - - - - - - - Operating Reserve:

Beginning Balance 3,797,650 $ 2,764,975 $ 4,209,129 $ 4,209,129 4,209,129 4,209,129 4,209,129$ 4,209,129$ 4,209,129$ Current Year Contribution 236,867 -
Interest Earned 174,612 -
Return/(Draw) - reserve (1,269,542) 1,269,542 - - - - - - Ending Balance 2,764,975 $ 4,209,129 $ 4,209,129 $ 4,209,129 4,209,129 4,209,129 4,209,129$ 4,209,129$ 4,209,129$ % of Projected Operating
Expenditures
18% 29% 27% 26% 24% 23% 23% 22% 21%
* Assumed continuation of voter-approved Utility User Tax due to expire on January 1, 2025 per ordinance. ** Include accellerate payment to CalHFA.
*** Include COLA increases as follows: 3% (FY 22-23); 3% (FY 23-24); and 3% (FY 24-25) **** Assumed Parks & Recreation at 100% opened.
192
General Fund
Assumptions used for the 5-Year General Fund Projections (New Developments) Revenue Assumptions for the General Fund

2.0% revenue increase from year-to-year for revenues as set forth below: 102% Year 1 Year 2 Year 3 Year 4 Year 5
Residential Unit Impact - Average 2.5 people per unit 25,864 Forecast
FY23-24
Forecast FY
24-25
Forecast FY
25-26
Forecast FY
26-27
Forecast FY
27-28
FY 20-21 Per Capita 869 40 40
Actual Average
Franchise Fee Gas 49,853$ 1.93$ 4,271$ 197$ 197$ - $ - $ Electric 77,866$ 3.01$ 6,671$ 307$ 307$ - $ - $ Cable 338,524$ 13.09$ 29,004$ 1,335$ 1,335$ - $ - $ Garbage 328,022$ 12.68$ 28,104$ 1,294$ 1,294$ - $ - $ Total Franchise Fee 794,265$ 30.71$ 68,050$ 3,132$ 3,132$ - $ - $ UUT Gas 530,463$ 20.51$ 45,448$ 2,092$ 2,092$ - $ - $ Electric 1,258,342$ 48.65$ 107,811$ 4,963$ 4,963$ - $ - $ Telephone 528,509$ 20.43$ 45,281$ 2,084$ 2,084$ - $ - $ Cable 753,301$ 29.13$ 64,541$ 2,971$ 2,971$ - $ - $ Water 520,034$ 20.11$ 44,555$ 2,051$ 2,051$ - $ - $ Total UUT Fee 3,590,649$ 138.83$ 307,636$ 14,160$ 14,160$ - $ - $ -$
Total VLF 2,220,252$ 85.84$ 190,225$ 8,7 56$ 8,756$ - $ - $
Sales & Use Tax Sales Tax 3,054,885$ 118.11$ 65,433$ 12,048$ 12,048$ - $ - $ (25% Indirect) Measure O 1,587,963$ 61.40$ 34,013$ 6,262$ 6,262$ - $ - $ Total Sales & Use Tax 4,642,848$ 179.51$ 99,446$ 18,310$ 18,310$ - $ - $ Bayfront - 1st Phase 14,000 sq feet retail Sales tax 23,000$ 23,000$ Bayfront - 2nd Phase 232 units 232 units
Bayfront - 3rd Phase 397 units 397 units
Sycamore Crossing 120 units 40 units 40 units 40 units
28,000 sq feet retail Sales tax 66,398$ 40,000$ 26,398$ 105 hotel rooms TOT 450,000$ 160,000$ 160,000$ 130,000$ Willow Auto Site 28,000 sq feet commercial Sales tax 22,500$ 11,250$ 11,250$ Self Storage In-Lieu In-Lieu 200,000$ 66,000$ 66,000$ 68,000$ Hilltown - 1st Phase 200 units 200 units
Total, Additional Estimated GF Revenue 925,607$ 321,608$ 268,756$ - $ - $ Annual, Additional General Fund Revenues from New Developments (Rounded 000) 926,000$ 1,247,000$ 1,516,000$ 1,516,000$ 1,516,000$ 193

SPECIAL REVENUE FUNDS
194
Asset Seizure
Fund Summary - Fund 101
Fund Description / Budget Highlights
Fund Activity
FY 19-20 FY 20-21 FY 21-22 FY 22-23
Actual Actual Budget Proposed
Beginning Available Fund Balance 99,459 $ 54,459 $ Revenues
Intergovernmental 17,615 $ 234,514 $ - 33,000 Interest Income 1,510 1,924 - - Miscellaneous Revenues - - - - 19,125 236,438 - 33,000
Transfers In 142,740 - - - 161,865 236,438 - 33,000
Expenditures
Salaries and Benefits - - - - Contractual Services - - - - Utilities - - - - Other Expenses 72,940 225,904 45,000 45,000 Cost Allocation - - - - Capital Outlay - - - - Debt Service - - - - 72,940 225,904 45,000 45,000
Transfer Out - - - - 72,940 225,904 45,000 45,000
Changes in restricted reserves
Net Annual Activity 88,925 10,534 (45,000) (12,000) Ending Available Fund Balance 99,459 $ 54,459 $ 42,459 $ The purpose of this fund is to account for monies received from Police confiscated drug money and property.

Funds are held until final court disposition is received. The funds are then restricted for police related activities only.
195
AB 3229 COPS Program
Fund Summary - Fund 201
Fund Description / Budget Highlights
Fund Activity
FY 19-20 FY 20-21 FY 21-22 FY 22-23
Actual Actual Budget Proposed
Beginning Available Fund Balance 6,727 $ 6,727 $ Revenues
Intergovernmental 155,948 $ 156,727 $ 150,000 150,000 Interest Income - - - - Miscellaneous Revenues - - - - 155,948 156,727 150,000 150,000
Transfers In - $ - - - 155,948 156,727 150,000 150,000
Expenditures
Salaries and Benefits - - - - Contractual Services - - - - Utilities - - - - Other Expenses - - - - Cost Allocation - - - - Capital Outlay - - - - Debt Service - - - - - - - -
Transfer Out 155,948 150,000 150,000 150,000 155,948 150,000 150,000 150,000
Changes in restricted reserves
Net Annual Activity - 6,727 - - Ending Available Fund Balance 6,727 $ 6,727 $ 6,727 $ California state legislation (AB 3229) created the Citizens Options for Public Safety (COPS) program. These funds are used for front line law enforcement services. 196
Lighting and Landscape District 83-2
Fund Summary - Fund 220
Fund Description / Budget Highlights
Fund Activity
FY 19-20 FY 20-21 FY 21-22 FY 22-23
Actual Actual Budget Proposed
Beginning Available Fund Balance 423,765 $ 562,710 $ Revenues
Assessment 1,800,832 $ 1,852,313 $ 1,993,935 1,915,597 Interest Income 24,327 10,054 - 204,550 Miscellaneous Revenues - 54,126 - - 1,825,159 1,916,493 1,993,935 2,120,147
Transfers In - 39,581 29,046 30,428 1,825,159 1,956,074 2,022,981 2,150,575
Expenditures
Salary and Benefits 439,557 459,061 527,688 539,815 Contractual Services 319,915 44,278 338,746 415,620 Utilities 335,833 330,333 263,800 242,100 Maintenance & Repairs 74,040 478,208 135,500 108,222 Other Expenses 12,893 2,801 18,816 22,517 Cost Allocation 188,867 187,851 217,734 213,123 Capital Outlay 834,937 111,362 50,000 220,000 Loan Repayment (10 years) - 54,126 90,752 59,829 2,206,042 1,668,020 1,643,036 1,821,226
Transfer Out 238,714 221,212 241,000 258,100 2,444,756 1,889,232 1,884,036 2,079,326
Changes in restricted reserves
Net Annual Activity (619,597)$ 66,842 138,945 71,249 Ending Available Fund Balance 423,765 562,710$ 633,959 $ The purpose of this fund is to account for Zone #1 to 10 Lighting and Lanscaping District No. 83-2 to finance the costs of landscaping and lighting public areas. The 1972 Act provides that the total cost of installation, construction, operations, maintenance and servicing of landscaping, street lighting and park and recreational facilities can be recovered by the District. Refer to the Engineer's Report. 197
Landscaping and Lighting Assessment District No. 83-2
Summary by Zone
Zone 1 Zone 2 Zone 3 & 4 Zone 5A Zone 5B Zone 5C Zone 6 Zone 7 Zone 8 Zo ne 9 Zone 10 Hercules by
the Bay Foxboro
The
Gems/Birds
Business
Park Commercial
Development
Parcels
Village
Parkway Heights
Trees and
Flowers
Birds and
Country
Run City-Wide Total
Revenues
Assessments 92,014 84,736 113,943 90,607 50,879 31,840 94,607 113,424 194,835 89,275 1,163,987 2,120,147 General Benefit Contribution 871 617 891 1,236 277 261 631 649 1,966 1,077 21,952 30,428 92,885 85,353 114,834 91,843 51,156 32,101 95,238 114,073 196,801 90,352 1,185,939 2,150,575 Expenditures By Type
Salaries & Benefits 21,375 21,375 21,781 9,824 10,566 9,824 20,037 20,309 20,340 21,201 363,183 539,815 Contractual Services 21,242 8,742 21,864 46,642 1,000 942 20,542 11,042 76,642 31,742 525,542 765,942 Other Operating Costs 21,205 750 43,075 310 267 290 18,619 34,969 1,299 925 (39,363) 82,346 Cost Allocation - - - 5,000 2,000 2,000 - - - - 204,123 213,123 Capital Outlay - - - - - - - - - - 220,000 220,000 Loan
Repayment - - - - - - - - - - - - 63,822 30,867 86,720 61,776 13,833 13,056 59,198 66,320 98,281 53,868 1,273,485 1,821,226 Transfers Out 26,100 20,600 28,000 20,600 11,500 16,100 24,500 31,700 51,600 27,400 - 258,100 89,922 51,467 114,720 82,376 25,333 29,156 83,698 98,020 149,881 81,268 1,273,485 2,079,326 Net Annual Results 2,963 33,886 114 9,467 25,823 2,945 11,540 16,053 46,920 9,084 (87,546) 71,249 Beginning Balance (23,341) 28,352 58,658 92,705 170,285 (17,526) (167,302) 113,820 242,070 (28,374) 93,363 562,710 Ending Balance (20,378) 62,238 58,772 102,172 196,108 (14,581) (155,762) 129,873 288,990 (19,290) 5,817 633,959 198
Victoria by the bay Lighting and Landscape District
Fund Summary - Fund 221
Fund Description / Budget Highlights
Fund Activity
FY 19-20 FY 20-21 FY 21-22 FY 22-23
Actual Actual Budget Proposed
Beginning Available Fund Balance (85,114)$ (153,138)$ Revenues
Assessment 439,238 $ 452,011 $ 461,039 482,924 Interest Income 1,829 (206) - - Miscellaneous Revenues - - - - 441,067 451,805 461,039 482,924
Transfers In - $ 7,991 9,230 10,047 441,067 459,796 470,269 492,971
Expenditures
Salary and Benefits 94,395 84,408 82,652 92,214 Contractual Services 135,743 12,611 4,795 168,074 Utilities 223,939 280,692 158,500 175,000 Maintenance & Repairs 18,775 162,146 185,000 25,000 Other Expenses 509 3,114 2,854 14,054 Cost Allocation 25,487 26,455 27,692 28,000 Capital Outlay 51,127 - 50,000 55,000 Debt Service - - - - 549,975 569,426 511,493 557,342
Transfer Out 24,960 23,792 26,800 27,200 574,935 593,218 538,293 584,542
Changes in restricted reserves
Net Annual Activity (133,868)$ (133,422) (68,024) (91,571) Fund Balance
Ending Available Fund Balance (85,114)$ (153,138)$ (244,709)$ Rounded (000)
The purpose of this fund is to account for Victoria by the bay Lighting and Lanscaping District No. 2002-1 to finance the costs of landscaping and lighting public areas. The 1972 Act provides that the total cost of installation, construction, operations, maintenance and servicing of landscaping, street lighting and park and recreational facilities can be recovered by the District. 199
Hercules Village Lighting and Landscape District
Fund Summary - Fund 222
Fund Description / Budget Highlights
Fund Activity
FY 19-20 FY 20-21 FY 21-22 FY 22-23
Actual Actual Projection Proposed
Beginning Available Fund Balance 190,541 $ 151,886 $ Revenues
Assessment 150,780 $ 155,164 $ 158,265 165,779 Interest Income 4,954 (138) - - Miscellaneous Revenues - - - - 155,734 155,026 158,265 165,779
Transfers In - $ 3,224 3,874 3,982 155,734 158,250 162,139 169,761
Expenditures
Salary and Benefits 29,608 30,249 39,764 40,624 Contractual Services 52,475 4,296 4,795 56,574 Utilities 54,805 60,278 56,800 60,000 Maintenance & Repairs 49,261 64,160 78,500 20,000 Other Expenses 242 - 1,921 9,921 Cost Allocation 10,966 11,382 11,914 12,000 Capital Outlay - 5,840 - - Debt Service - - - - 197,357 176,205 193,694 199,119
Transfer Out 3,524 6,487 7,100 7,500 200,881 182,692 200,794 206,619
Changes in restricted reserves
Net Annual Activity (45,147)$ (24,442) (38,655) (36,858) Ending Available Fund Balance 190,541 $ 151,886$ 115,028 $ The purpose of this fund is to account for Hercules Village Lighting and Lanscaping District No. 2002-2 to finance the costs of landscaping and lighting public areas. The 1972 Act provides that the total cost of installation, construction, operations, maintenance and servicing of landscaping, street lighting and park and recreational facilities can be recovered by the District. 200
Baywood Lighting and Landscape District
Fund Summary - Fund 223
Fund Description / Budget Highlights
Fund Activity
FY 19-20 FY 20-21 FY 21-22 FY 22-23
Actual Actual Budget Proposed
Beginning Available Fund Balance 225,839 $ 88,369 $ Revenues
Assessment 137,970 $ 137,970 $ 150,144 150,144 Interest Income 1,396 50 - - Miscellaneous Revenues - - - - 139,366 138,020 150,144 150,144
Transfers In - 2,750 2,515 2,613 139,366 140,770 152,659 152,757
Expenditures
Salary and Benefits 61,544 40,579 38,763 40,448 Contractual Services 42,623 2,971 4,795 44,074 Utilities 33,330 22,162 27,400 30,000 Maintenance & Repairs 7,486 40,242 40,000 1,500 Other Expenses 175 - 1,810 3,611 Cost Allocation 10,549 10,949 11,461 11,000 Capital Outlay 22,305 850 163,500 - Debt Service - - - 14,700 178,012 117,753 287,729 145,333
Transfer Out 2,835 2,289 2,400 2,700 180,847 120,042 290,129 148,033
Changes in restricted reserves
Net Annual Activity (41,481)$ 20,728 (137,470) 4,724 Ending Available Fund Balance 225,839 $ 88,369$ 93,093 $ The purpose of this fund is to account for Baywood Lighting and Lanscaping District No. 2004-1 to finance the costs of landscaping and lighting public areas. The 1972 Act provides that the total cost of installation, construction, operations, maintenance and servicing of landscaping, street lighting and park and recreational facilities can be recovered by the District.
201
Bayside Lighting and Landscape District
Fund Summary - Fund 224
Fund Description / Budget Highlights
Fund Activity
FY 19-20 FY 20-21 FY 21-22 FY 22-23
Actual Actual Budget Proposed
Beginning Available Fund Balance 115,787 $ 161,395 $ Revenues
Assessment 132,022 $ 140,467 $ 143,268 150,078 Interest Income 3,375 (476) - - Miscellaneous Revenues - - - - 135,397 139,991 143,268 150,078
Transfers In - 1,442 1,634 2,284 135,397 141,433 144,902 152,362
Expenditures
Salary and Benefits 23,047 28,923 21,909 24,396 Contractual Services 7,173 2,971 4,795 4,074 Utilities 11,703 58,213 22,300 20,000 Maintenance & Repairs 19,092 40,805 22,400 47,500 Other Expenses 362 - 2,116 10,216 Cost Allocation 7,523 7,809 8,174 8,000 Capital Outlay - - - - Debt Service - - - - 68,900 138,721 81,694 114,186
Transfer Out 13,145 15,587 17,600 18,500 82,045 154,308 99,294 132,686
Changes in restricted reserves
Net Annual Activity 53,352 $ (12,875) 45,608 19,676 Ending Available Fund Balance 115,787 $ 161,395$ 181,071 $ The purpose of this fund is to account for Bayside Lighting and Lanscaping District No. 2005-1 to finance the costs of landscaping and lighting public areas. The 1972 Act provides that the total cost of installation, construction, operations, maintenance and servicing of landscaping, street lighting and park and recreational facilities can be recovered by the District.
202
Arterial Roadways
Fund Summary - Fund 225
Fund Description / Budget Highlights
Fund Activity
FY 19-20 FY 20-21 FY 21-22 FY 22-23
Actual Actual Budget Proposed
Beginning Available Fund Balance 131,023 $ 144,779 $ Revenues
Assessment - $ - $ - - Interest Income 4,249 2,520 - - Miscellaneous Revenues - - - - 4,249 2,520 - -
Transfers In 301,254 269,367 319,600 314,000 305,503 271,887 319,600 314,000
Expenditures
Salary and Benefits - 22,238 39,764 40,623 Contractual Services - - - - Utilities 182,262 225,058 161,600 231,300 Maintenance & Repairs 49,467 33,292 98,500 55,200 Other Expenses - - - - Cost Allocation 5,504 5,713 5,980 6,000 Capital Outlay - - - - Debt Service - - - - 237,233 286,301 305,844 333,123
Transfer Out - - - - 237,233 286,301 305,844 333,123
Changes in restricted reserves
Net Annual Activity 68,270 $ (14,414) 13,756 (19,123) Ending Available Fund Balance 131,023 $ 144,779$ 125,656 $ The purpose of this fund is to account for Arterial Roadways Lighting and Lanscaping District to finance the costs of landscaping and lighting public areas.
203
Stormwater Assessment
Fund Summary - Fund 231
Fund Description / Budget Highlights
Fund Activity
FY 19-20 FY 20-21 FY 21-22 FY 22-23
Actual Actual Budget Proposed
Beginning Available Fund Balance (131,868)$ (178,868)$ Revenues
Assessment 242,532 $ 245,628 $ 249,000 251,000 Interest Income 996 (201) - - Miscellaneous Revenues - - - - 243,528 245,427 249,000 251,000
Transfers In/Solid Waste 214,000 124,237 125,000 125,000 457,528 369,664 374,000 376,000
Expenditures
Salary and Benefits 184,210 178,262 189,767 158,472 Contractual Services 117,460 110,863 131,645 126,000 Utilities 1,622 1,915 1,724 2,000 Maintenance & Repairs 15,621 27,294 28,855 25,000 Other Expenses 2,385 2,172 2,652 3,000 Cost Allocation 51,616 53,131 66,357 60,105 Capital Outlay - - - - Debt Service - - - - 372,914 373,637 421,000 374,577
Transfer Out/General Fund 71,387 - - - 444,301 373,637 421,000 374,577
Changes in restricted reserves
Net Annual Activity 13,227 $ (3,973) (47,000) 1,423 Ending Available Fund Balance (131,868)$ (178,868)$ (177,445)$ To account for activities associated with the acquisition or construction, and operation and maintenance of stormwater facilities for drainage and disposal of stormwater, and operations related to the provision of services. 204
Development Impact Fee - Public Facilities
Fund Summary - Fund 241
Fund Description / Budget Highlights
Fund Activity
FY 19-20 FY 20-21 FY 21-22 FY 22-23
Actual Actual Budget Proposed
Beginning Available Fund Balance 144,277 $ 145,277 $ Revenues
Fees - $ 766 $ - - Interest Income 2,796 (10) 2,000 - Miscellaneous Revenues - - - - 2,796 756 2,000 -
Transfers In - - - - 2,796 756 2,000 -
Expenditures
Salary and Benefits 31,684 (1,285) 303 - Contractual Services - - - - Utilities - - - - Maintenance & Repairs - - - - Other Expenses - - - - Cost Allocation 3,458 - 697 - Capital Outlay - - - - Debt Service - - - - 35,142 (1,285) 1,000 -
Transfer Out - - - - 35,142 (1,285) 1,000 -
Changes in restricted reserves
Net Annual Activity (32,346)$ 2,041 1,000 - Ending Available Fund Balance 144,277 $ 145,277$ 145,277 $ To account for the collection of and expenditure of fees imposed as a condition of new development within the City, in compliance with California Government Code Section 66006 (AB 1600) 205
Community Development Tax
Fund Summary - Fund 242
Fund Description / Budget Highlights
Fund Activity
FY 19-20 FY 20-21 FY 21-22 FY 22-23
Actual Actual Budget Proposed
Beginning Available Fund Balance 168,094 $ 169,094
Revenues
Fees - $ 1,500 $ - - Interest Income 3,304 (9) 1,000 - Miscellaneous Revenues - - - - 3,304 1,491 1,000 -
Transfers In - - - - 3,304 1,491 1,000 -
Expenditures
Salary and Benefits - - - - Contractual Services - - - - Utilities - - - - Maintenance & Repairs - - - - Other Expenses - - - - Cost Allocation - - - - Capital Outlay - - - - Debt Service - - - - - - - -
Transfer Out - - - - - - - -
Changes in restricted reserves
Net Annual Activity 3,304 $ 1,491 1,000 - Ending Available Fund Balance 168,094 $ 169,094$ 169,094 $ Accounts for the activities and services of the Community Development Department. Revenues are derived from fees, licenses, and fines collected in conjunction with the planning, permitting and enforcement activities of the department in accordance with state law, requiring fees not to exceed the cost of providing services. 206
Development Fee Fund
Fund Summary - Fund 243
Fund Description / Budget Highlights
Fund Activity
FY 19-20 FY 20-21 FY 21-22 FY 22-23
Actual Actual Budget Proposed
Beginning Available Fund Balance 71,714 $ 70,714 $ Revenues
Fees - $ - $ - - Interest Income 1,373 (7) - - Miscellaneous Revenues - - - - 1,373 (7) - - Transfers In - - - - 1,373 (7) - - Expenditures
Salary and Benefits 31,684 (1,285) 303 - Contractual Services - - - - Utilities - - - - Maintenance & Repairs - - - - Other Expenses - - - - Cost Allocation 2,968 - 697 - Capital Outlay - - - - Debt Service - - - - 34,652 (1,285) 1,000 -
Transfer Out - - - - 34,652 (1,285) 1,000 -
Changes in restricted reserves
Net Annual Activity (33,279)$ 1,278 (1,000) - Ending Available Fund Balance 71,714$ 70,714 $ 70,714 $ This fund accounts for revenues from citywide development impact fees required from certain new developments. Funds are used to mitigate the impacts on availabilty and condition of public facilities caused by these developments.
207
Development Impact Fee - Police Facilities
Fund Summary - Fund 244
Fund Description / Budget Highlights
Fund Activity
FY 19-20 FY 20-21 FY 21-22 FY 22-23
Actual Actual Budget Proposed
Beginning Available Fund Balance 265,047 $ 167,047 $ Revenues
Fees - $ 1,357 $ - - Interest Income 5,224 (29) 2,000 - Miscellaneous Revenues - - - - 5,224 1,328 2,000 -
Transfers In - - - - 5,224 1,328 2,000 -
Expenditures
Salary and Benefits - - - - Contractual Services - - - - Utilities - - - - Maintenance & Repairs - - - - Other Expenses - - - - Cost Allocation - - - - Capital Outlay 39,050 2,444 100,000 60,000 Debt Service - - - - 39,050 2,444 100,000 60,000
Transfer Out - - - - 39,050 2,444 100,000 60,000
Changes in restricted reserves
Net Annual Activity (33,826)$ (1,116) (98,000) (60,000) Ending Available Fund Balance 265,047 $ 167,047$ 107,047 $ To account for the collection of and expenditure of fees imposed as a condition of new development within the City, in compliance with California Government Code Section 66006 (AB 1600). Police Facilities needs through 2035 to be funded by this fee include: a waterfront police substation; an expansion of the existing station; an auditorium/emergency operations center; equipment and additional patrol vehicles for ten new police officers; needed to serve new development.
208
Development Impact Fee - Fire Facilities
Fund Summary - Fund 246
Fund Description / Budget Highlights
Fund Activity
FY 19-20 FY 20-21 FY 21-22 FY 22-23
Actual Actual Projection Proposed
Beginning Available Fund Balance - $ - $
Revenues
Fees - $ 1,716 $ 522,000 -
Interest Income (156) - - - Miscellaneous Revenues - - - - (156) 1,716 522,000 -
Transfers In - - - - (156) 1,716 522,000 -
Expenditures
Salary and Benefits - - - - Contractual Services - 829 522,000 - Utilities - - - - Maintenance & Repairs - - - - Other Expenses - - - - Cost Allocation - - - - Capital Outlay - - - - Debt Service - - - - - 829 522,000 -
Transfer Out - - - - - 829 522,000 -
Changes in restricted reserves
Net Annual Activity (156)$ 887 - - Ending Available Fund Balance - $ -$ - $ To account for the collection of and expenditure of fees imposed as a condition of new development within the City, in compliance with California Government Code Section 66006 (AB 1600) - Fire Facilities. The City collects these fees and remits to various governmental entities, organizations or trusts. 209
Development Impact Fee - Parks & Recreation
Fund Summary - Fund 247
Fund Description / Budget Highlights
Fund Activity
FY 19-20 FY 20-21 FY 21-22 FY 22-23
Actual Actual Budget Proposed
Beginning Available Fund Balance 185,960 $ 136,960 $ Revenues
Fees - $ 1,577 $ - - Interest Income 3,656 (10) 1,000 - Miscellaneous Revenues - - - - 3,656 1,567 1,000 -
Transfers In - - - - 3,656 1,567 1,000 -
Expenditures
Salary and Benefits - - - - Contractual Services - - - - Utilities - - - - Maintenance & Repairs - - - - Other Expenses - - - - Cost Allocation - - - - Capital Outlay - - 50,000 - Debt Service - - - - - - 50,000 -
Transfer Out - - - - - - 50,000 -
Changes in restricted reserves
Net Annual Activity 3,656 $ 1,567 (49,000) - Ending Available Fund Balance 185,960 $ 136,960$ 136,960 $ To account for the collection of and expenditure of fees imposed as a condition of new development within the City, in compliance with California Government Code Section 66006 (AB 1600). Assessed only on new residential development, the Parks & Recreation impacts fees are based on the costs to the City of providing new facilities defined in the 2001 Nexus study, including a 4,000-sq.-ft. teen center, a 4,240-sq.-ft. child care center, and a 10,000-sq.-ft. community cultural arts center, as well as acquiring 46.72 acres of land and improving 59.52 acres for neighborhood and community parks.
210
Public Benefit Fee
Fund Summary - Fund 249
Fund Description / Budget Highlights
Fund Activity
FY 19-20 FY 20-21 FY 21-22 FY 22-23
Actual Actual Budget Proposed
Beginning Available Fund Balance 993,323 $ 996,323 $ Revenues
Fees - $ - $ - - Interest Income 20,654 20,474 3,000 - Miscellaneous Revenues - - - - 20,654 20,474 3,000 -
Transfers In - - - - 20,654 20,474 3,000 -
Expenditures
Salary and Benefits - - - - Contractual Services - - - - Utilities - - - - Maintenance & Repairs - - - - Other Expenses - - - - Cost Allocation - - - - Capital Outlay - - - 500,000 Debt Service - - - - - - - 500,000 Transfer Out - - - - - - - 500,000 Changes in restricted reserves
Net Annual Activity 20,654 $ 20,474 3,000 (500,000) Ending Available Fund Balance 993,323 $ 996,323$ 496,323 $ The purpose of this fund is to account for fees charged by City to Owner in the amount specified under the line item, "New Public Benefit Fee" on the Schedule of Exactions. 211
Development Impact Fee - Transporation Facilities
Fund Summary - Fund 261
Fund Description / Budget Highlights
Fund Activity
FY 19-20 FY 20-21 FY 21-22 FY 22-23
Actual Actual Budget Proposed
Beginning Available Fund Balance 246,474 $ 67,474 $ Revenues
Fees - $ (158,450)$ - -
Interest Income 8,043 (710) 1,000 - Miscellaneous Revenues - - - - 8,043 (159,160) 1,000 -
Transfers In - - - - 8,043 (159,160) 1,000 -
Expenditures
Salary and Benefits - - - - Contractual Services - - 150,000 - Utilities - - - - Maintenance & Repairs - - - - Other Expenses - - 30,000 - Cost Allocation - - - - Capital Outlay - - - - Debt Service - - - - - - 180,000 -
Transfer Out - - - - - - 180,000 -
Changes in restricted reserves
Net Annual Activity 8,043 $ (159,160) (179,000) - Ending Available Fund Balance 246,474 $ 67,474$ 67,474 $ To account for the collection of and expenditure of fees imposed as a condition of new development within the City, in compliance with California Government Code Section 66006 (AB 1600). The purpose of the transportation impact fee program is to fund improvements to the City’s major roadway, bicycle, and pedestrian facilities needed to accommodate travel demand generated by new land development within the City over the next 22 years (through 2040).
212
State Gas Tax
Fund Summary - Fund 262
Fund Description / Budget Highlights
Fund Activity
FY 19-20 FY 20-21 FY 21-22 FY 22-23
Actual Actual Budget Proposed
Beginning Available Fund Balance 623,986 $ 127,986 $ Revenues
Gas Tax 1,078,252 $ 1,023,113 $ 1,113,948 759,593 Interest Income 9,825 1,661 1,052 1,000 Miscellaneous Revenues - 43,566 - - 1,088,077 1,068,340 1,115,000 760,593
Transfers In - - - - 1,088,077 1,068,340 1,115,000 760,593
Expenditures
Salary and Benefits 211,621 170,017 236,444 237,650 Contractual Services 140,089 242,915 75,000 100,000 Utilities 10,938 10,884 12,200 12,000 Maintenance & Repairs 49,162 67,762 58,072 66,000 Other Expenses 21,768 3,155 18,566 19,000 Cost Allocation 92,098 96,140 116,624 109,986 Capital Outlay 697,558 78,034 1,047,795 125,000 Debt Service - - - - 1,223,234 668,907 1,564,701 669,636
Transfer Out 9,038 54,988 46,299 49,354 1,232,272 723,895 1,611,000 718,990
Changes in restricted reserves
Net Annual Activity (144,195)$ 344,445 (496,000) 41,603 Ending Available Fund Balance 623,986 $ 127,986$ 169,589 $ This fund accounts for revenues received from the State of California under Street and Highways Code Sections 2015, 2106, 2107, and 2107.5 and 7360. Expenditures support the street maintenance and construction projects in comformance with the Streets and Highways Code requirements. 213
Measure "C" Street Fund
Fund Summary - Fund 263
Fund Description / Budget Highlights
Fund Activity
FY 19-20 FY 20-21 FY 21-22 FY 22-23
Actual Actual Budget Proposed
Beginning Available Fund Balance 4,905 $ 342,039 $ Revenues
Gas Tax 468,246 $ - $ 405,000 450,000 Interest Income 9,986 (2,128) 1,000 - Miscellaneous Revenues - - - - 478,232 (2,128) 406,000 450,000
Transfers In - - - - 478,232 (2,128) 406,000 450,000
Expenditures
Salary and Benefits 228,304 282,260 235,681 238,516 Contractual Services 136,218 25,146 25,000 55,000 Utilities 6,102 - - - Maintenance & Repairs - - - - Other Expenses - - - - Cost Allocation 39,755 39,363 64,319 65,400 Capital Outlay 209,904 131,576 194,000 65,000 Debt Service - - - - 620,283 478,345 519,000 423,916
Transfer Out 9,038 - - - 629,321 478,345 519,000 423,916
Changes in restricted reserves 450,134
Net Annual Activity (151,089)$ (480,473) 337,134 26,084 Ending Available Fund Balance 4,905$ 342,039 $ 368,123 $ This fund accounts for revenue allocated by the Contra Costa County Transportation Authority to the City from the State collected sales tax to be expended for growth management planning and local street maintenance and improvement.
214
STMP Traffic Impact Fee
Fund Summary - Fund 264
Fund Description / Budget Highlights
Fund Activity
FY 19-20 FY 20-21 FY 21-22 FY 22-23
Actual Actual Budget Proposed
Beginning Available Fund Balance - $ - $
Revenues
Fees - $ 5,744 $ 1,347,000 -
Interest Income (1,124) 24 - - Miscellaneous Revenues - 156 - - (1,124) 5,924 1,347,000 -
Transfers In - - - - (1,124) 5,924 1,347,000 -
Expenditures
Salary and Benefits - - - - Pass through to other agency - 5,744 1,347,000 - Utilities - - - - Maintenance & Repairs - - - - Other Expenses - - - - Cost Allocation - - - - Capital Outlay - - - - Debt Service - - - - - 5,744 1,347,000 -
Transfer Out - - - - - 5,744 1,347,000 -
Changes in restricted reserves
Net Annual Activity (1,124)$ 180 - - Ending Available Fund Balance - $ -$ - $ The West Contra Costa Sub-regional Transportation Mitigation Program (STMP) is a regional development impact fee program covering the West Contra Costa transportation Advisory Committee (WCCTAC) planning area. The City collects the STMP fees and remits them to WCCTAC in accordance with a Master Cooperative Agreement. This Nexus fee study and regional project list was updated in 2019 with the new fees put in place effective July 1, 2019.
215
Solid Waste and Recycling
Fund Summary - Fund 291
Fund Description / Budget Highlights
Fund Activity
FY 19-20 FY 20-21 FY 21-22 FY 22-23
Actual Actual Budget Proposed
Beginning Available Fund Balance 867,734 $ 809,734 $ Revenues
Fees - $ - $ - - Interest Income 16,777 623 3,000 3,000 Miscellaneous Revenues 210,325 175,722 175,000 175,000 227,102 176,345 178,000 178,000
Transfers In - - - - 227,102 176,345 178,000 178,000
Expenditures
Salary and Benefits 8,316 10,179 11,000 11,881 Contractual Services - - - - Utilities - - - - Maintenance & Repairs - - - - Other Expenses - - - - Cost Allocation 34 - - - Capital Outlay 100,000 - 100,000 100,000 Debt Service - - - - 108,350 10,179 111,000 111,881
Transfer Out 214,000 124,237 125,000 125,000 322,350 134,416 236,000 236,881
Changes in restricted reserves
Net Annual Activity (95,248)$ 41,929 (58,000) (58,881) Ending Available Fund Balance 867,734 $ 809,734$ 750,853 $ This fund is supplied by percentage of the waste haulers gross rate revenues and is called the AB 939 fee because it was created to fund compliance with the recycling and diversion programs required by State legislation (AB 939). The City uses this fund for various recycling and compliance initiatives. 216
Regional Water Quality
Fund Summary - Fund 521
Fund Description / Budget Highlights
Fund Activity
FY 19-20 FY 20-21 FY 21-22 FY 22-23
Actual Actual Budget Proposed
Beginning Available Fund Balance 51,569 $ 51,569 $ Revenues
Fees - - - - Interest Income 1,023 (5) - - Miscellaneous Revenues - - - - 1,023 (5) - - Transfers In - - - - 1,023 (5) - - Expenditures
Salary and Benefits - - - - Contractual Services - - - - Utilities - - - - Maintenance & Repairs - - - - Other Expenses - - - - Cost Allocation - - - - Capital Outlay - - - - Debt Service - - - - - - - -
Transfer Out - - - - - - - -
Changes in restricted reserves
Net Annual Activity 1,023 $ (5) - - Fund Balance
Ending Available Fund Balance 51,569 $ 51,569 $ 51,569 $ This fund accounts for the Regional Water Quality. Created by the State Legislature in 1967, the Board protects water quality by setting statewide policy, coordinating and supporting the Regional Water Board efforts, and reviewing petitions that contest Regional Board actions. There are nine regional water quality control boards tha t
exercise rulemaking and regulatory activities by basins. 217
BART Park & Ride
Fund Summary - Fund 266
Fund Description / Budget Highlights
Fund Activity
FY 19-20 FY 20-21 FY 21-22 FY 22-23
Actual Actual Budget Proposed
Beginning Available Fund Balance 240,737 $ 252,737 $ Revenues
Fees - $ - $ - - Interest Income - - - - Miscellaneous Revenues - 27,943 28,000 45,000 - 27,943 28,000 45,000 Transfers In - 440,643 - - - 468,586 28,000 45,000
Expenditures
Salary and Benefits - - - - Contractual Services - 219,724 - 1,100 Utilities - 8,125 6,000 3,200 Maintenance & Repairs - - 10,000 12,700 Other Expenses - - - - Cost Allocation - - - - Capital Outlay - - - - Debt Service - - - - - 227,849 16,000 17,000
Transfer Out - - - - - 227,849 16,000 17,000
Changes in restricted reserves
Net Annual Activity - $ 240,737 12,000 28,000 Fund Balance
Ending Available Fund Balance 240,737 $ 252,737 $ 280,737 $ To account for BART Park & Ride fees and maintenance of the parking lot. 218
American Recovery Plan Act ("ARPA")
Fund Summary - Fund 353
Fund Description / Budget Highlights
Fund Activity
FY 19-20 FY 20-21 FY 21-22 FY 22-23
Actual Actual Budget Proposed
Beginning Available Fund Balance - $ 159,551 $ Revenues
ARPA (Non-Entitlement) - $ - $ 3,142,889 3,142,889 Interest Income - - - - Miscellaneous Revenues - - - - - - 3,142,889 3,142,889 Transfers In - - - - - - 3,142,889 3,142,889 Expenditures
Salary and Benefits - - - - Contractual Services - - 65,000 300,000 Utilities - - - - Maintenance & Repairs - - - - Other Expenses - - - - Cost Allocation - - - - Capital Outlay - - - - Debt Service - - - - - - 65,000 300,000 Transfer Out - General Fund (Loss of Revenue) - - 2,918,338 - - - 2,983,338 300,000 Changes in restricted reserves
Net Annual Activity - $ - $ 159,551 2,842,889 Ending Available Fund Balance - $ 159,551 $ 3,002,440 $ This fund accounts for revenues from the American Recovery Plan Act ("ARPA"). On March 11, 2021, the American Rescue Plan Act (ARPA) was signed into law by the President. Fiscal Recovery Funds are intended to provide support to state, local, and tribal governments in responding to the impact of COVID-19 and in their efforts to contain the negative impacts of COVID-19 on their communities, residents, and businesses. The Fiscal Recovery Funds build on and expand the support provided to governments over the last year, including through the Coronavirus Relief Fund (CRF).
219
FY 22-23 Proposed Budget
American Rescue Plan Act (ARPA)
Eligible Expense List
General Fund ARPA General Fund ARPA General Fund ARPA
Revenue Eligible Revenue Eligible Revenue Eligible
Loss Projects Total Loss Projects Total Loss Projects Total Fund #100 Fund #353 Fund #100 Fund #353 Fund #100 Fund #353 $2,918,338 $224,551 $3,142,889 $3,142,889 $3,142,889 $2,918,338 $3,367,440 $6,285,778 Proposed Uses of Fund (FY 21-22):

Strategic Communication Plan 50,000 50,000 - 50,000 - 50,000 Willow/Palm Sidewalk Installation (Transit Center) 250,000 250,000 - 250,000 - 250,000 Refugio Tennis Court Tree Maintenance 6,000 6,000 - 6,000 - 6,000 Sidewalk and Safe Walkways 100,000 100,000 - 100,000 - 100,000 Community Swim Center Safety Fence Replacement 100,000 100,000 - 100,000 - 100,000 Community Swim Center Gym Floor Replacement &
Other Building and Deferred Maintenance
250,000 250,000 - 250,000 - 250,000 Increase appropriation on All Abilities Swing Set 50,000 50,000 50,000 - 50,000 Reserve for COVID related expenses 50,000 50,000 50,000 - 50,000 E-Gift Card Program 65,000 65,000 - - 65,000 65,000 HdL Contract - ARPA Administration 164,500 164,500 164,500 - 164,500 - - - - Total, Use of Fund 1,020,500 65,000 1,085,500 - - - 1,020,500 65,000 1,085,500 $1,897,838 $159,551 $2,057,389 $0 $3,142,889 $3,142,889 $1,897,838 $3,302,440 $5,200,278 Proposed Uses of Fund (FY 22-23):

Building Facilities Plan 75,000 75,000 - 75,000 - 75,000 Parks Master Plan 150,000 150,000 - 150,000 - 150,000 Business Assistance Program 150,000 150,000 - - 150,000 150,000 Business Rental Assistance Grants 9,551 9,551 140,449 140,449 - 150,000 150,000 - - - - Total, Use of Fund 225,000 159,551 384,551 - 140,449 140,449 225,000 300,000 525,000 $1,672,838 $0 $1,672,838 $0 $3,002,440 $3,002,440 $1,672,838 $3,002,440 $4,675,278 Total
FY 22-23 Ending Balance
First Tranche
ARPA funding received
Remaining Balance Available for Appropriation in FY
22-23 Budget
Second Tranche
220

ENTERPRISE FUND
221
Wastewater
Fund Summary - Fund 420
Fund Description / Budget Highlights
Fund Activity
FY 19-20 FY 20-21 FY 21-22 FY 22-23
Actual Actual Projection Proposed
Beginning Available Fund Balance 27,296,000 $ 13,452,000 $ Revenues
Charges for Services 5,719,257$ 5,769,396$ 6,054,000 6,013,000 Interest Income 501,741 4,537 120,000 40,000 Bond Proceeds - - - - Miscellaneous Revenues - - - - 6,220,998 5,773,933 6,174,000 6,053,000
Transfers In - - - - 6,220,998 5,773,933 6,174,000 6,053,000
Expenditures
Salary and Benefits 668,089 662,073 711,000 686,419 Contractual Services 535,157 546,102 400,000 570,000 Utilities 80,528 85,647 85,000 85,343 Maintenance & Repairs 42,883 43,627 46,000 48,638 Sewer Plant Operating Expenses 1,761,811 2,075,082 1,760,000 1,919,743 Other Expenses 12,584 8,559 14,000 6,130 Cost Allocation 287,445 280,371 313,000 291,477 Capital Outlay 3,010,075 5,596 5,000 6,000 Capital Projects 84,536 1,158,482 13,700,000 751,000 Capital Outlay - Pinole (Hercules' Share) 740,000 1,020,000 Debt Service 723,631 1,193,797 2,244,000 2,033,000 7,206,739 6,059,336 20,018,000 7,417,750
Transfer Out - - - - 7,206,739
6,059,336 20,018,000 7,417,750
Changes in restricted reserves (3,031,000)
Net Annual Activity (985,741) (285,403) (13,844,000) (4,395,750) Ending Available Fund Balance 27,296,000$ 13,452,000$ 9,056,250$ Debt Service Coverage Ratio 1.45 1.74 1.27 1.20 Operating & Maintenance Reserve (180 days) 902,000
Capital Reserve (Equal to annual system depreciation) 529,000 Debt Service Reserve (Equivalent to 1-year of debt service) 1,600,000 This fund accounts for wastewater treatment to the cities of Hercules and Pinole and for the maintenance of the City's sewer lines and related facilities. It is a self-supporting activity which provides services on a user charge basis to residences and businesses.
222

INTERNAL SERVICE FUNDS
223
Vehicle Replacement
Fund Summary - Fund 450
Fund Description / Budget Highlights
Fund Activity
FY 19-20 FY 20-21 FY 21-22 FY 22-23
Actual Actual Budget Proposed
Beginning Available Fund Balance 642,667 $ 587,667 $ Revenues
Charges for Services 165,489 $ 159,000 $ - 148,300 Interest Income 18,041 700 - - Miscellaneous Revenues 20,637 - - - 204,167 159,700 - 148,300
Transfers In - - - - 204,167 159,700 - 148,300
Expenditures
Salary and Benefits - - - - Contractual Services - - - - Utilities - - - - Maintenance & Repairs - - - - Other Expenses - - - - Cost Allocation - - - - Capital Outlay 146,762 206,373 55,000 276,000 Debt Service - - - - 146,762 206,373 55,000 276,000
Transfer Out - - - - 146,762 206,373 55,000 276,000
Changes in restricted reserves
Net Annual Activity 57,405 $ (46,673) (55,000) (127,700) Ending Available Fund Balance 642,667 587,667 $ 459,967 $ By Department
Police 264,598
Public Works 122,613
Parks & Recreation 72,756
459,967 $
To account for the financing, operations, servicing and maintenance of fleet vehicles and major equipment utilized by City departments, of which the services are rendered on a cost reimbursement basis. 224
Information Technology (IT) Operations
Fund Summary - Fund 460
Fund Description / Budget Highlights
Fund Activity
FY 19-20 FY 20-21 FY 21-22 FY 22-23
Actual Actual Budget Proposed
Beginning Available Fund Balance 658,892 $ 562,892 $ Revenues
Charges for Services 981,207 $ 1,010,200 $ 1,051,000 $ 1,271,986 Interest Income 16,985 - - - Miscellaneous Revenues 6,517 8,077 455,000 - 1,004,709 1,018,277 1,506,000 1,271,986
Transfers In - - - - 1,004,709 1,018,277 1,506,000 1,271,986
Expenditures
Salary and Benefits 238,914 337,202 364,963 386,896 Contractual Services 11,120 18,800 525,000 30,000 Utilities 43,536 45,450 47,200 50,200 Maintenance & Repairs 235,794 273,612 310,969 386,550 Other Expenses 5,689 2,981 17,330 13,040 Cost Allocation 65,420 91,168 104,038 89,000 Capital Outlay 150,855 68,391 232,500 316,000 751,328 837,604 1,602,000 1,271,686
Transfer Out - - - - 751,328 837,604 1,602,000 1,271,686
Changes in restricted reserves
Net Annual Activity 253,381 $ 180,673 (96,000) 300 Ending Available Fund Balance 1,317,784 $ 562,892 $ 563,192 $ Allocate 50% to Facility Replacement Fund (658,892)
Ending Available Fund Balance, as adjusted 658,892 $
This fund accounts for Information Technology who provide a variety of technology related services for the city, including networking and infrastructure technology including servers, switching, security, cyber protection, internet connectivity, service desk, disaster recovery and other data communication technologies.

Resources are from administrative charges to departments based upon their proportional share of program costs. 225
Facility Maintenance
Fund Summary - Fund 470
Fund Description / Budget Highlights
Fund Activity
FY 19-20 FY 20-21 FY 21-22 FY 22-23
Actual Actual Budget Proposed
Beginning Available Fund Balance 279,391 $ 397,391 $ Revenues
Charges for Services 987,430 $ 883,150 $ 912,000 787,000 Interest Income 11,754 - - - Miscellaneous Revenues 182,790 (2) - - 1,181,974 883,148 912,000 787,000
Transfers In - - - - 1,181,974 883,148 912,000 787,000
Expenditures
Salary and Benefits 123,782 158,539 164,167 170,192 Contractual Services 46,045 13,883 60,000 180,000 Utilities 133,745 228,671 331,194 172,000 Maintenance & Repairs 181,866 68,043 140,500 169,000 Other Expenses 9,827 20,727 26,100 24,000 Cost Allocation 8,860 68,027 72,039 72,000 Capital Outlay - - - - Debt Service - - - - 504,125 557,890 794,000 787,192
Transfer Out - 440,643 - - 504,125 998,533 794,000 787,192
Changes in restricted reserves
Net Annual Activity 677,849 $ (115,385) 118,000 (192) Ending Available Fund Balance 558,783 $ 397,391 $ 397,199 $ Allocate 50% to Facility Replacement Fund (279,392)
Ending Available Fund Balance, as adjusted 279,391 $
This fund accounts for Facility Maintenance provides and manages maintenance and emergency structural repair services for all City facilities. The source of revenue is reimbursement from departments for the cost of providing facility maintenance services.
226
Information Technology (IT) Equipment Replacement
Fund Summary - Fund 480
Fund Description / Budget Highlights
Fund Activity
FY 19-20 FY 20-21 FY 21-22 FY 22-23
Actual Actual Budget Proposed
Beginning Available Fund Balance 658,892 $ 658,892 $ Revenues
Charges for Services - $ - $ - - Interest Income - - - - Miscellaneous Revenues - - - - - - - -
Transfers In - - - - - - - -
Expenditures
Salary and Benefits - - - - Contractual Services - - - - Utilities - - - - Maintenance & Repairs - - - - Other Expenses - - - - Cost Allocation - - - - Capital Outlay - - - - Debt Service - - - - - - - -
Transfer Out - - - - - - - -
Changes in restricted reserves
Net Annual Activity - $ - - - Ending Available Fund Balance - $ 658,892 $ 658,892 $ Allocate 50% to IT Operations 658,892
Ending Available Fund Balance, as adjusted 658,892 $
This fund provides for the replacement of government technology infrastructure and equipment used to support City's departmental needs (servers, switches, data security, etc.). The source of revenue is contributions from various departments for future replacement of computer and related technology equipment included in the program.
227
Facilities Replacement
Fund Summary - Fund 490
Fund Description / Budget Highlights
Fund Activity
FY 19-20 FY 20-21 FY 21-22 FY 22-23
Actual Actual Budget Proposed
Beginning Available Fund Balance 279,392 $ 279,392 $ Revenues
Charges for Services - $ - $ - - Interest Income - - - - Miscellaneous Revenues - - - - - - - -
Transfers In - - - - - - - -
Expenditures
Salary and Benefits - - - - Contractual Services - - - 25,000 Utilities - - - - Maintenance & Repairs - - - - Other Expenses - - - - Cost Allocation - - - - Capital Outlay - - - - Debt Service - - - - - - - 25,000 Transfer Out - - - - - - - 25,000 Changes in restricted reserves
Net Annual Activity - $ - - (25,000) Ending Available Fund Balance - $ 279,392 $ 254,392 $ Allocate 50% from Facility Maintenance Fund 279,392
Ending Available Fund Balance, as adjusted 279,392 $
This fund will be used to cover the major replacement of City buildings and facilities. The source of revenue is an annual contribution from various departments based on the square footage occupied. 228

DEBT SERVICE FUNDS
229
2020 DEBT SERVICE PFA
Fund Summary - Fund 672
Fund Description / Budget Highlights
Fund Activity
FY 19-20 FY 20-21 FY 21-22 FY 22-23
Actual Actual Budget Proposed
Beginning Available Fund Balance 290,066 $ 157,066 $ Revenues
Property Lease Revenue - - - - Interest Income 2,735 103,455 - - Miscellaneous Revenues - - - - 2,735 103,455 - -
Transfers In/General Fund 566,110 106,938 - 355,934 568,845 210,393 - 355,934
Expenditures
Salary and Benefits - - - - Contractual Services - - - - Utilities - - - - Maintenance & Repairs - - - - Other Expenses 2,420 - 3,000 - Cost Allocation - - - - Capital Outlay - - - - Debt Service 563,590 205,522 130,000 513,000 566,010 205,522 133,000 513,000
Transfer Out - - - - 566,010 205,522 133,000 513,000
Changes in restricted reserves
Net Annual Activity 2,835 $ 4,871 (133,000) (157,066) Fund Balance
Ending Available Fund Balance 290,066 $ 157,066 $ - $ (Restricted for Debt Service)
This fund accounts for the 2020 Public Financing Authority (PFA) Lease Revenue Refunding Bond. The City and the Authority refinance a portion of the costs of the acquisition, contruction and installation of various public improvements of the City, including the City Library, that were originally financed and refinanced from the proceeds of the Lease Revenue Bonds, Series 2003B.
230
2009 DEBT SERVICE PFA
Fund Summary - Fund 673
Fund Description / Budget Highlights
Fund Activity
FY 19-20 FY 20-21 FY 21-22 FY 22-23
Actual Actual Budget Proposed
Beginning Available Fund Balance (2,550)$ 18,450 $ Revenues
Property Lease Revenue 970,721 837,889 908,000 908,000 Interest Income 23,660 897 24,000 - 994,381 838,786 932,000 908,000
Transfers In - - - - 994,381 838,786 932,000 908,000
Expenditures
Salary and Benefits - - - - Contractual Services - - - - Utilities - - - - Maintenance & Repairs - - - - Other Expenses - - - - Cost Allocation - - - - Capital Outlay - - - - Debt Service 914,665 909,715 911,000 908,000 914,665 909,715 911,000 908,000
Transfer Out - - - - 914,665 909,715 911,000 908,000
Changes in restricted reserves
Net Annual Activity 79,716 $ (70,929) 21,000 - Ending Available Fund Balance (2,550) 18,450 $ 18,450 $ (Restricted for Debt Service)
This fund accounts for the 2009 Public Financing Authority (PFA) Taxable Lease Revenue Bonds (Bio-Rad Project). The purpose of the bonds was to finance the acquisition of certain commercial condominium properties, consisting of approximately 96,847 square feet located at 203-295 Linus Pauling Drive. The bonds is secured by revenues consisting primarily of the base rental payments of the property lease, Principal is due annually and will mature on July 1, 2038.
231
SunTrust Lease
Fund Summary - Fund 383
Fund Description / Budget Highlights
Fund Activity
FY 19-20 FY 20-21 FY 21-22 FY 22-23
Actual Actual Budget Proposed
Beginning Available Fund Balance - $ - $
Revenues
Charges for Services - $ - $ - - Interest Income - - - - Property Lease Revenue - - - - - - - -
Transfers In 205,099 205,099 205,000 103,000 205,099 205,099 205,000 103,000
Expenditures
Salary and Benefits - - - - Contractual Services - - - - Utilities - - - - Maintenance & Repairs - - - - Other Expenses - - - - Cost Allocation - - - - Capital Outlay - - - - Debt Service 205,099 205,099 205,000 103,000 205,099 205,099 205,000 103,000
Transfer Out - - - - 205,099 205,099 205,000 103,000
Changes in restricted reserves
Net Annual Activity - $ - - - Ending Available Fund Balance - $ - $ - $ This fund accounts for SunTrust Lease. On September 27, 2007, the City entered into master lease agreements with Sun Trust Leasing Corporation in order to provide funds for the financing of the EMS Project performed by Siemens Building Technologies. Payments are due semiannually. The Master Lease Agreement matures on September 27, 2022.
232
Equipment Lease
Fund Summary - Fund 388
Fund Description / Budget Highlights
Fund Activity
FY 19-20 FY 20-21 FY 21-22 FY 22-23
Actual Actual Budget Proposed
Beginning Available Fund Balance - $ - $
Revenues
Charges for Services - $ - $ - - Interest Income - - - - Property Lease Revenue - - - - - - - -
Transfers In - - 218,000 227,000 - - 218,000 227,000 Expenditures
Salary and Benefits - - - - Contractual Services - - - - Utilities - - - - Maintenance & Repairs - - - - Other Expenses - - - - Cost Allocation - - - - Capital Outlay - - - - Debt Service - - 218,000 227,000 - - 218,000 227,000 Transfer Out - - - - - - 218,000 227,000 Changes in restricted reserves
Net Annual Activity - $ - - - Ending Available Fund Balance - $ - $ - $ This fund accounts for Engie Solar Project Lease. On August 14, 2020, the City entered into master lease agreements with Sterling National Bank in order to provide funds for the financing of the Solar Energy Project by ENGIE Services U.S. Inc. Payments are due annually. The Master Lease Agreement matures on September 14, 2040.
233
CITY OF HERCULES FY 2022-23 ANNUAL BUDGET DEBT LIMITS
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
$2,538,649,012 $2,386,706,268 $2,432,853,667 $2,823,697,070 $3,035,240,481 $3,279,761,098 $3,505,792,898 $3,655,023,232 $3,873,427,943 $4,107,894,266 25% 25% 25% 25% 25% 25% 25% 25% 25% 25%
$634,662,253 $596,676,567 $608,213,417 $705,924,268 $758,810,120 $819,940,275 $876,448,225 $913,755,808 $968,356,986 $1,026,973,567 15% 15% 15% 15% 15% 15% 15% 15% 15% 15%
$95,199,338 $89,501,485 $91,232,013 $105,888,640 $113,821,518 $122,991,041 $131,467,234 $137,063,371 $145,253,548 $154,046,035 - - - - - - - - - -
$95,199,338 $89,501,485 $91,232,013 $105,888,640 $113,821,518 $122,991,041 $131,467,234 $137,063,371 $145,253,548 $154,046,035 Assessed Valuation
Conversion
Percentage
Adjusted Assessed
Valuation
Debt Limit
Percentage
Debt Limit
Legal Debt Margin
Total debt applicable to
the limit as a percent-
age of debt limit 1
1 Section 43605 of the California Government Code for General Obligation Bonds.

For the Fiscal Year Ended June 30
Total Net Debt:
applicable to limit:

General
Obligation Bonds
Sources: City Finance Department
County Tax Assessor’s Office

CITY OF HERCULES

LEGAL DEBT MARGIN INFORMATION

LAST TEN FISCAL YEARS
Under State law, the City may not issue debt in excess of 15% of the total assessed valuation of taxable property within its boundaries.

In accordance with California Governmental Code Section 43605, only the City’s general obligation bonds are subject to that legal debt limit.

The Government Code of the State of California provides for a legal debt limit of 15% of gross assessed valuation. However, this provision was enacted when assessed valuation was based upon 25% of market value. Effective with the 1981-82 fiscal year, each parcel is now assessed at 100% of market value (as of the most recent change in ownership for that parcel). The computations shown above reflect a conversion of assessed valuation data for each fiscal year from the current full valuation perspective to the 25% level that was in effect at the time that the legal debt margin was enacted by the State of California for local governments located within the state.
234
CITY OF HERCULES FY 2022-23 ANNUAL BUDGET DEBT DETAIL

DEBT DETAIL
2020 PFA Lease Revenue Refunding Bondss
On August 1, 2020, the Hercules Public Financing Authority refinanced the proceeds of the Lease Revenue Bonds, Series 2003B, in the aggregate principal amount of $5,876,843. The interest rateof 2.21% with a final maturity due on December 1, 2023. The debt service payments are scheduled semi-annually at amounts that ranges from $106,428 to $560,249.

The City is obligated to pay only its Base Rental Payments and Additional Payments under the Lease.

The obligation of the City to pay Base Rental Payments or Additional Payments does not constitute an obligation of the city for which the City is obligated to levy or pledge any form of taxation or for which the City has levied or pledged any form of taxation.

The annual debt service requirements to maturity for the 2020 Public Financing Authority Lease Revenue Refunding bonds are as follows:

Year Ending June 30 Principal Interest Total
FY 2022-23 $386,663 $125,606 $512,269
FY 2023-24 $448,561 $116,376 $564,937
FY 2024-25 $457,061 $106,369 $563,430
FY 2025-26 $465,032 $96,180 $561,212
FY 2026-27 $477,396 $85,766 $563,162
FY 2027-28 $489,075 $75,087 $564,162
FY 2028-29 $500,055 $64,157 $564,212
FY 2029-30 $509,751 $52,999 $562,750
FY 2030-31 $518,109 $41,641 $559,750
FY 2031-32 $530,572 $30,053 $560,625
FY 2032-33 $542,049 $18,200 $560,249
FY 2033-34 $552,519 $6,105 $558,624
Total $5,876,843 $818,539 $6,695,382
235
CITY OF HERCULES FY 2022-23 ANNUAL BUDGET DEBT DETAIL

DEBT DETAIL
2009 Public Financing Authority Taxable Lease Revenue Bonds (Bio-Rad Project) The Authority issued taxable lease revenue bonds, series 2009, dated July 29, 2009, totaling $10,080,000.

The purpose of the bonds was to finance the acquisition of certain commercial condominium properties, consisting of approximately 96,847 square feet located at 203-295 Linus Pauling Drive within the City from the City, funding a reserve fund for the Bonds and to paying the costs of issuance of the Bonds. The interest rates on the bonds range from 6.00% to 8.40%. The interest is payable semiannually on January 1 and July 1, commencing January 1, 2010. The bonds are subject to optional special mandatory redemption, and mandatory sinking account redemption provisions. The bonds are payable from and secured by revenues consisting primarily of the base rental payments of the property lease, Principal is due annually beginning on July 1, 2010, in amounts ranging from$165,000 to $845,000. The bonds mature on July 1, 2038.

The Bonds constitute limited obligations of the Authority payable solely from Revenues. The Authority has no taxing power. The obligation of the City to make City Advances does not constitute an obligation of the City which the City is obligated to levy or pledge any form of taxation or for which the City has levied or pledged any form of taxation.

Future debt service requirements on the 2009 Public Financing Authority Taxable Lease Revenue bonds are as follows:

Year Ending June 30 Principal Interest Total
FY 2022-23 $235,000 $672,371 $907,371
FY 2023-24 $255,000 $652,159 $907,159
FY 2024-25 $275,000 $630,296 $905,296
FY 2025-26 $300,000 $606,578 $906,578
FY 2026-27 $325,000 $580,796 $905,796
FY 2027-28 $350,000 $552,953 $902,953
FY 2028-29 $380,000 $522,840 $902,840
FY 2029-30 $410,000 $490,253 $900,253
FY 2030-31 $445,000 $454,650 $899,650
FY 2031-32 $480,000 $415,800 $895,800
FY 2032-33 $520,000 $373,800 $893,800
FY 2033-34 $565,000 $328,230 $893,230
FY 2034-35 $615,000 $278,670 $893,670
FY 2035-36 $665,000 $224,910 $889,910
FY 2036-37 $720,000 $166,740 $886,740
FY 2037-38 $780,000 $103,740 $883,740
FY 2038-39 $845,000 $35,490 $880,490
Total $8,165,000 $7,090,275 $15,255,275
236
CITY OF HERCULES FY 2022-23 ANNUAL BUDGET DEBT DETAIL

DEBT DETAIL
H.E.L.P . Loan
In April 2005 the City entered into an agreement with the California Housing Finance Agency (Agency), a public instrumentality and political subdivision of the state of California to develop a 50-unit multifamily rental project that is a component to a mixed-used development, also consisting of 26,825 square feet of ground-floor commercial space. The Agency has authorized the making of a loan in the amount of $1,600,000 known as the Housing Enabled by Local Partnerships (H.E.L.P.) to the City for the purpose of assisting in operating a local housing program. Under the terms of this original agreement the City of Hercules agreed to reimburse the Agency
$1,600,000, 10 years from April 11, 2005 at a 3% simple per annum interest. Interest is to be charged only on funds disbursed. In October 2013, the City and Agency amended the agreement to extend the due date of the loan and accumulated interest until April 2027 and to reduce the interest rate to 1.5% simple interest effective October 31, 2013.

The annual debt service requirements to maturity for the H.E.L.P. Loan as of June 30, 2020 are as follows:

Year Ending June 30 Principal Interest Total
FY 2022-23 $76,067 $23,933 $100,000
FY 2023-24 $75,933 $24,067 $100,000
FY 2024-25 $76,133 $23,867 $100,000
FY 2025-26 $1,371,867 $18,733 $1,390,600
Total $1,600,000 $90,600 $1,690,600
237
CITY OF HERCULES FY 2022-23 ANNUAL BUDGET DEBT DETAIL

DEBT DETAIL
R.D.L.P . Loan
In February 2007, the City entered into a loan agreement with the California Housing Finance Agency (Agency) in the amount of $3,750,000 ($1,750,000 for predevelopment costs and $2,000,000 for construction costs). The funds will be used to assist with site acquisition, predevelopment, and construction costs for 23 affordable ownership units within a 52-unit condominium project, which is a component to the Sycamore Downtown Street project, a mixed-use, mixed-income development. Under the terms of the original agreement, the City agreed to repay the Agency $3,750,000, four years from February 2007 at 3% simple per annum interest. In October 2013, the City and Agency amended the agreement to extend the due date of the loan and accumulated interest until August 2026 and to reduce the interest rate to 1.5% simple interest effective October 31, 2013.

The annual debt service requirements to maturity for the R.D.L.P. Loan as of June 30, 2020 are as follows:

Year Ending June 30 Principal Interest Total
FY 2022-23 - $100,000 $100,000
FY 2023-24 - $100,000 $100,000
FY 2024-25 - $100,000 $100,000
FY 2025-26 - $113,572 $3,863,572
FY 2026-27 $3,750,000 $213,572 $3,963,572
Total $3,750,000 $513,572 $4,263,572
SunTrust Lease
On September 27, 2007, the City entered into master lease agreements with SunTrust Leasing Corporation in order to provide funds for the financing of the EMS Project performed by Siemens Building Technologies in the amount of $2,185,538. Payments are due semiannually on September 27 and March 27, at an interest rate of 4.73%. The Master Lease Agreement matures on September 27, 2022.

The annual debt service requirements to maturity for the SunTrust master lease agreement as of June 30, 2020 are as follows:

Year Ending June 30 Principal Interest Total
FY 2022-23 $100,180 $2,369 $102,549
Total $100,180 $2,369 $102,549
238
2010 PFA Wastewater Revenue Bonds
The Public Financing Authority issued revenue bonds, series 2010, dated August 1, 2010, totaling $11,765,000. The purpose of the bonds was to finance improvements to the City’s wastewater system, fund a reserve fund for the bonds, and pay the costs of issuances of the bonds. The interest rates on the bonds range from 2.00% to 5.130%. Principal and interest payment are due annually beginning August 1, 2011, in amounts ranging from $230,000 to $700,000. The bonds mature on August 1, 2040.

The Bonds are limited obligations of the Authority and are not secured by a legal or equitable pledge of, or charge or lien upon, any property of the Authority or any of its income or receipts, except the Revenues. The full faith and credit of the Authority and the Agency and the City, which are parties to the agreement creating the Authority, are not pledged for the payment of the principal of, or interest on, the Bonds and no tax or other source of funds, other than the Revenues, is pledged to pay the principal and interest on the Bonds.

The annual debt service requirements to maturity for the 2010 PFA Wastewater Revenue Bonds as of June 30, 2020 are as follows:

Year Ending June 30 Principal Interest Total
FY 2022-23 $305,000 $426,288 $731,288
FY 2023-24 $315,000 $413,691 $728,691
FY 2024-25 $330,000 $400,181 $730,181
FY 2025-26 $345,000 $385,622 $730,622
FY 2026-27 $360,000 $369,525 $729,525
FY 2027-28 $375,000 $352,069 $727,069
FY 2028-29 $395,000 $333,781 $728,781
FY 2029-30 $410,000 $314,663 $724,663
FY 2030-31 $430,000 $294,713 $724,713
FY 2031-32 $455,000 $273,125 $728,125
FY 2032-33 $475,000 $249,875 $724,875
FY 2033-34 $500,000 $225,500 $725,500
FY 2034-35 $525,000 $199,875 $724,875
FY 2035-36 $550,000 $173,000 $723,000
FY 2036-37 $575,000 $144,875 $719,875
FY 2037-38 $605,000 $115,375 $720,375
FY 2038-39 $635,000 $84,375 $719,375
FY 2039-40 $670,000 $51,750 $721,750
FY 2040-41 $700,000 $17,500 $717,500
Total $8,955,000 $4,825,781 $13,780,781
CITY OF HERCULES FY 2022-23 ANNUAL BUDGET DEBT DETAIL

DEBT DETAIL
239
Publicly Owned Treatment Works Construction Loan
In June 2016, the City entered into an installment sale agreement with the California State Water Resources Control Board in the amount of $26,500,000. The funds are for construction costs for the Pinole-Hercules Wastewater Pollution Control Plant Improvement Project. The interest rate on the loan is 1.7%. The first principal and interest payment are due August 31, 2019, and is contingent on the total drawdowns at project completion. The loan matures on August 31, 2038.

The annual debt service requirements to maturity for the Publicly Owned Treatment Works Construction Loan as of June 30, 2020 are as follows:

Year Ending June 30 Principal Interest Total
FY 2022-23 $1,115,425 $395,412 $1,510,837
FY 2023-24 $1,134,388 $376,450 $1,510,837
FY 2024-25 $1,153,672 $357,165 $1,510,837
FY 2025-26 $1,173,285 $337,553 $1,510,837
FY 2026-27 $1,193,230 $317,607 $1,510,837
FY 2027-28 $1,213,515 $297,322 $1,510,837
FY 2028-29 $1,234,145 $276,692 $1,510,837
FY 2029-30 $1,255,126 $255,712 $1,510,837
FY 2030-31 $1,276,463 $234,374 $1,510,837
FY 2031-32 $1,298,163 $212,675 $1,510,837
FY 2032-33 $1,320,231 $190,606 $1,510,837
FY 2033-34 $1,342,675 $168,162 $1,510,837
FY 2034-35 $1,365,501 $145,336 $1,510,837
FY 2035-36 $1,388,714 $122,123 $1,510,837
FY 2036-37 $1,412,322 $98,515 $1,510,837
FY 2037-38 $1,436,332 $74,505 $1,510,837
FY 2038-39 $1,460,749 $50,088 $1,510,837
FY 2039-40 $1,485,582 $25,255 $1,510,837
FY 2040-41 -
Total $23,259,518 $3,935,550 $27,195,067
CITY OF HERCULES FY 2022-23 ANNUAL BUDGET DEBT DETAIL

DEBT DETAIL
240

CAPITAL PROJECT FUNDS
241
Miscellaneous Grants
Fund Summary - Fund 295
Fund Description / Budget Highlights
Fund Activity
FY 19-20 FY 20-21 FY 21-22 FY 22-23
Actual Actual Budget Proposed
Beginning Available Fund Balance - $ - $
Revenues
Capital Grant - $ - $ 254,000 - Interest Income (597) - - - Miscellaneous Revenues - - - - (597) - 254,000 -
Transfers In - - - - (597) - 254,000 -
Expenditures
Salary and Benefits - - - - Contractual Services - - - - Utilities - - - - Maintenance & Repairs - - - - Other Expenses - - - - Cost Allocation - - - - Capital Outlay - - 254,000 - Debt Service - - - - - - 254,000 -
Transfer Out - - - - - - 254,000 -
Changes in restricted reserves
Net Annual Activity (597)$ - - - Ending Available Fund Balance - $ - $ - $ These fund accounts for funds expended for Projects funded by grants. The project is funded by multiple funding sources, including but not limited to, Federal, State, and Local grants. 242
City - Capital Projects
Fund Summary - Fund 300, 311, 310
Fund Description / Budget Highlights
Fund Activity
FY 19-20 FY 20-21 FY 21-22 FY 22-23
Actual Actual Budget Proposed
Beginning Available Fund Balance 414,019 $ 414,019 $ Revenues
Fees - $ - - - Interest Income - - - - Miscellaneous Revenues 537,896 - - - 537,896 - - -
Transfers In 74,361 - 194,000 247,000 612,257 - 194,000 247,000
Expenditures
Salary and Benefits - - - - Contractual Services - - - - Utilities - - - - Maintenance & Repairs - - - - Other Expenses - - - - Cost Allocation - - - - Capital Outlay 930,974 - 194,000 247,000 Debt Service - - - - 930,974 - 194,000 247,000
Transfer Out - - - - 930,974 - 194,000 247,000
Changes in restricted reserves
Net Annual Activity (318,717)$ - - - Ending Available Fund Balance 414,019 $ 414,019 $ 414,019 $ This fund accounts for funds expended for major capital improvement projects associated with City-owned facilities including police, parks, community centers, and city buildings. This fund is funded primarily by General Fund.
243
Energy Conservation Project
Fund Summary - Fund 301
Fund Description / Budget Highlights
Fund Activity
FY 19-20 FY 20-21 FY 21-22 FY 22-23
Actual Actual Budget Proposed
Beginning Available Fund Balance 190,926 $ 190,926 $ Revenues
Loan Proceeds - $ - $ - - Interest Income - - - - Miscellaneous Revenues - - - - - - - -
Transfers In - - - - - - - -
Expenditures
Salary and Benefits - - - - Contractual Services - - - - Utilities - - - - Maintenance & Repairs - - - - Other Expenses - - - - Cost Allocation - - - - Capital Outlay - - - - Debt Service - - - - - - - -
Transfer Out - - - - - - - -
Changes in restricted reserves
Net Annual Activity - - - - Ending Available Fund Balance 190,926$ 190,926 $ 190,926 $ This fund accounts for funds expended for the energy conservation project by Engie Services. This fund is funded by proceeds from the Equipment Lease Purchase Agreement with Sterling National Bank. 244
Hercules Rail Station Project
Fund Summary - Fund 340s & 350
Fund Description / Budget Highlights
Fund Activity
FY 19-20 FY 20-21 FY 21-22 FY 22-23
Actual Actual Budget Proposed
Beginning Available Fund Balance - $ - $
Revenues
Capital Grant 202,226 $ 527,817 $ 50,000 360,000 Interest Income - - - - Miscellaneous Revenues - - - - 202,226 527,817 50,000 360,000
Transfers In - - - - 202,226 527,817 50,000 360,000
Expenditures
Salary and Benefits - - - - Contractual Services 74,838 283,563 - - Utilities - - - - Maintenance & Repairs - - - - Other Expenses - - - - Cost Allocation - - - - Capital Outlay 127,458 50,000 360,000
Debt Service - - - - 74,838 411,021 50,000 360,000
Transfer Out - - - - 74,838 411,021 50,000 360,000
Changes in restricted reserves
Net Annual Activity 127,388 116,796 - - Ending Available Fund Balance - $ -$ - $ These fund accounts for funds expended for the Hercules Rail Station Projects. The project is funded by multiple funding sources, including but not limited to, Federal, State, and Local grants. 245
Water Quality Retention Basin
Fund Summary - Fund 387
Fund Description / Budget Highlights
Fund Activity
FY 19-20 FY 20-21 FY 21-22 FY 22-23
Actual Actual Budget Proposed
Beginning Available Fund Balance 166,569 $ 166,569 $ Revenues
Property Tax 64,093 $ 51,416 $ 44,000 - Interest Income 2,821 3,057 - - Miscellaneous Revenues - - - - 66,914 54,473 44,000 -
Transfers In - - - - 66,914 54,473 44,000 -
Expenditures
Salary and Benefits - - - - Contractual Services 22,083 20,802 44,000 - Utilities - - - - Maintenance & Repairs - - - - Other Expenses - - - - Cost Allocation - - - - Capital Outlay - - - - Debt Service - - - - 22,083 20,802 44,000 -
Transfer Out - - - - 22,083 20,802 44,000 -
Changes in restricted reserves
Net Annual Activity 44,831 $ 33,671 $ - - Ending Available Fund Balance 166,569 $ 166,569 $ 166,569 $ This fund accounts for revenues from Property Tax Special Assessment for the formation of City of Hercules Community Facilities District No. 2017-01 on April 11, 2017. Development of the Bayfront and Muir Pointe created the need for construction of water quality detention basin for runoff generared by the improvements constructed to support the developments. The CFD was formed to create a funding mechanism for the maintenance costs associated with the water quality detention basin. 246
CITY OF HERCULES FY 2022-23 ANNUAL BUDGET CIP SPENDING PLAN

CITY OF HERCULES

CAPITAL PROJECTS

SUMMARY OF COMPLETED PROJECTS AND PRIOR YEAR CARRYOVERS Capital Projects
Summary of Completed Projects and Prior Year Carryovers Project Name Budget To Date
Actual
Expenditures
To Date
Outstanding
Encumbrances
PY Carryover/
Remaining
Balance
Police Locker Room and Restroom Remodel 100,000 100,000 Corporation Yard Landscaping 62,000 62,000 Energy Conservation Measures 4,209,354 4,091,950 117,404 - Total, Facilities 4,371,354 4,091,950 117,404 162,000 Resurface Refugio Park Tennis Court 162,300 162,300 - Refugio Valley Lake Dredging 50,000 50,000 Baywood Tree Replacement 162,000 162,000 Beachnut Park 254,000 254,000
Victoria Linear Park 50,000 50,000
Trash Cans Replacement 20,000 20,000 - Children with Disabilities Swingset 100,000 100,000 Refugio Tennis Court Tree Maintenance 6,000 6,000 Community Swim Center Safety Fence
Replacement
100,000 100,000
Community Swim Center Gym Floor
Repacement & Misc Other
250,000 250,000
Replace the Community Pool Diving Board 12,000 12,000 Total, Parks and Open Space 1,166,300 182,300 - 984,000 Annual Sidewalk Repair Program 65,000 65,000 - Annual Restriping Project 50,000 50,000 - Annual Street Rehabilitation Project -
Turquoise Drive
630,000 630,000 -
Pedestrian Sidewalk Improvement Willow &
Palm
1,434,140 1,434,140 -
2022 Annual Street Rehabilitation Sycamore
Avenue
1,803,716 1,803,716 -
ADA Transition Plan Implementation 15,000 15,000 Village Parkway Traffic Calming 100,000 100,000 Sidewalk and Safe Walkways 100,000 100,000 Total, Streets 4,197,856 3,982,856 - 215,000 Regional Intermodal Transit Center (RITC) 46,017,537 43,541,765 1,348,315 1,127,457 Total, RITC 46,017,537 43,541,765 1,348,315 1,127,457 Sycamore Ave (Lower Trunk Main) 13,700,000 13,700,000 Foxboro Sewer Access Road 88,000 88,000 - Total, Sewer 13,788,000 88,000 - 13,700,000 Total, CIP 69,541,047 51,886,871 1,465,719 16,188,457 Summary by Funding Source:

General Fund 414,000 140,000 - 274,000 General Fund/ARPA (Loss of Revenue) 456,000 - - 456,000 DIF-Police 100,000 - - 100,000 Equipment Lease Agreement 4,209,354 4,091,950 117,404 - LLAD 83-2 (Zone 10) 92,300 42,300 - 50,000 LLAD 2004-1 Baywood 162,000 - - 162,000 LLAD 2002-1 Victoria by the Bay 50,000 - - 50,000 State Gas Tax 1,953,467 1,938,467 - 15,000 Measure J 1,272,389 1,272,389 - - Solid Waste 200,000 200,000 - - Sewer 13,788,000 88,000 - 13,700,000 Grants 46,843,537 44,113,765 1,348,315 1,381,457 Total, CIP 69,541,047 51,886,871 1,465,719 16,188,457 247
CITY OF HERCULES FY 2022-23 ANNUAL BUDGET CIP SPENDING PLAN

CITY OF HERCULES

FIVE-YEAR CAPITAL IMPROVEMENT
PROGRAM SPENDING PLAN FY 2023-2027
Five-Year Capital Improvement PRogram
City of Hercules Spending Plan FY 2023-2027
Total General Fund/ARPA Loss of Revenue Component (Fund #100) FY 22-23 FY 23-24 FY 24-25 FY 25-26 FY 26-27
Proposed Forecast Forecast Forecast Forecast
BBEEGGIINNNNIINNGG FFUUNNDD BBAALLAANNCCEESS $11,960,577 10,129,266 $8,753,690 $2,822,683 $2,539,697 Revenue Projections 3,427,503 25,576,174 36,824,761 20,276,752 7,235,000 Operating Cost (2,715,814) (2,797,000) (2,869,000) (2,944,000) (3,020,000) AVAILABLE FUNDS 12,672,266 32,908,440 42,709,451 20,155,435 6,754,697 Facilities
Police Locker Room and Restroom Remodel 60,000 550,000 - - - Corporation Yard Landscaping - - - - -
Business Facilities Plan 75,000 - - - - ADA Assessment Improvement 25,000 25,000 25,000 25,000 25,000 Energy Conservation Measures - - - - -
Subtotal 160,000 575,000 25,000 25,000 25,000 Parks and Open Space
Parks Master Plan 150,000 - - - -
ADA Assessment Improvement 25,000 25,000 25,000 25,000 25,000 Victoria By The Bay - Refurbish Gazzebo & Railing 55,000 - - - - Ohlone Dog Park Tree Removal & Pruning 85,000 - - - - Tree Planting & Removal Open Space 50,000 50,000 50,000 50,000 50,000 Aerator Reugio Valley Parks 60,000 - - - -
Trash Cans Replacement - - - - -
Subtotal 425,000 75,000 75,000 75,000 75,000 Streets
Annual Sidewalk Repair Program 50,000 50,000 50,000 50,000 50,000 Annual Restriping Project 50,000 50,000 50,000 50,000 50,000 Annual Street Rehabilitation Project - Turquoise &
Future Years 100,000 950,000 950,000 950,000 950,000 Pedestrian Sidewalk Improvement Willow & Palm - - - - - ADA Transition Plan Implementation 25,000 25,000 25,000 25,000 25,000 Village Parkway Traffic Calming 22,000 - - - -
Sidewalk and Safe Walkways - - - - -
Subtotal 247,000 1,075,000 1,075,000 1,075,000 1,075,000 Regional Transit Intermodal Center
Path To Transit - Conservation Easement 500,000 - - - - Environmental Monitoring 60,000 60,000 60,000 - -
Utility Relocation - 21,769,750 - - -
Track and Signal Work - - 32,776,768 - -
Initial Rail Station - - - 10,640,738 -
Trails, Parks, Plazas - - - -
Parking Garage - - - 5,000,000 -
Design Utility Relocation 300,000 - - - -
Subtotal 860,000 21,829,750 32,836,768 15,640,738 Sewer
Inspect & Repair Sewer - - 700,000 - -
Sycamore Ave (Lower Trunk Main) 751,000 - - - - Sycamore Ave (Upper Truck Main) 100,000 400,000 4,078,000 - - Promenade Lift Station - 100,000 867,000 - - SR-4 & Along Willow Ave. - 100,000 230,000 800,000 - Foxboro Sewer Access Road - - - - -
Subtotal 851,000 600,000 5,875,000 800,000 - TOTAL CAPITAL EXPENDITURES 2,543,000 24,154,750 39,886,768 17,615,738 4,355,000 Remaining Fund Balance 10,129,266 8,753,690 2,822,683 2,539,697 2,399,697 TOTAL
FY 22-23
Proposed
FY 23-24
Forecast
FY 24-25
Forecast
FY 25-26
Forecast
FY 26-27
Forecast
-
-
248
CITY OF HERCULES FY 2022-23 ANNUAL BUDGET CIP SPENDING PLAN

CITY OF HERCULES

FIVE-YEAR CAPITAL IMPROVEMENT
PROGRAM SPENDING PLAN FY 2023-2027
Five-Year Capital Improvement PRogram
City of Hercules Spending Plan FY 2023-2027
Total

BBEEGGIINNNNIINNGG FFUUNNDD BBAALLAANNCCEESS
Revenue Projections
Operating Cost

AVAILABLE FUNDS
Facilities
Police Locker Room and Restroom Remodel
Corporation Yard Landscaping
Business Facilities Plan
ADA Assessment Improvement
Energy Conservation Measures
Subtotal
Parks and Open Space
Parks Master Plan
ADA Assessment Improvement
Victoria By The Bay - Refurbish Gazzebo & Railing
Ohlone Dog Park Tree Removal & Pruning
Tree Planting & Removal Open Space
Aerator Reugio Valley Parks
Trash Cans Replacement
Subtotal
Streets
Annual Sidewalk Repair Program
Annual Restriping Project
Annual Street Rehabilitation Project - Turquoise &
Future Years
Pedestrian Sidewalk Improvement Willow & Palm
ADA Transition Plan Implementation
Village Parkway Traffic Calming
Sidewalk and Safe Walkways
Subtotal
Regional Transit Intermodal Center
Path To Transit - Conservation Easement
Environmental Monitoring
Utility Relocation
Track and Signal Work
Initial Rail Station
Trails, Parks, Plazas
Parking Garage
Design Utility Relocation
Subtotal
Sewer
Inspect & Repair Sewer
Sycamore Ave (Lower Trunk Main)
Sycamore Ave (Upper Truck Main)
Promenade Lift Station
SR-4 & Along Willow Ave.

Foxboro Sewer Access Road
Subtotal

TOTAL CAPITAL EXPENDITURES
Remaining Fund Balance
General Fund/ARPA Loss of Revenue Component (Fund #100) FY 22-23 FY 23-24 FY 24-25 FY 25-26 FY 26-27
Proposed Forecast Forecast Forecast Forecast
$1,897,838 1,672,838 $1,672,838 $1,672,838 $1,672,838 1,897,838 1,672,838 1,672,838 1,672,838 1,672,838 75,000
75,000 - - - - 150,000
150,000 - - - - - - - - - - - - - - - - - - - 225,000 - - - - 1,672,838 1,672,838 1,672,838 1,672,838 1,672,838 General Fund/ARPA Loss of Revenue Component (Fund #100) FY 22-23
Proposed
FY 23-24
Forecast
FY 24-25
Forecast
FY 25-26
Forecast
FY 26-27
Forecast
249
CITY OF HERCULES FY 2022-23 ANNUAL BUDGET CIP SPENDING PLAN

CITY OF HERCULES

FIVE-YEAR CAPITAL IMPROVEMENT
PROGRAM SPENDING PLAN FY 2023-2027
Five-Year Capital Improvement PRogram
City of Hercules Spending Plan FY 2023-2027
Total

BBEEGGIINNNNIINNGG FFUUNNDD BBAALLAANNCCEESS
Revenue Projections
Operating Cost

AVAILABLE FUNDS
Facilities
Police Locker Room and Restroom Remodel
Corporation Yard Landscaping
Business Facilities Plan
ADA Assessment Improvement
Energy Conservation Measures
Subtotal
Parks and Open Space
Parks Master Plan
ADA Assessment Improvement
Victoria By The Bay - Refurbish Gazzebo & Railing
Ohlone Dog Park Tree Removal & Pruning
Tree Planting & Removal Open Space
Aerator Reugio Valley Parks
Trash Cans Replacement
Subtotal
Streets
Annual Sidewalk Repair Program
Annual Restriping Project
Annual Street Rehabilitation Project - Turquoise &
Future Years
Pedestrian Sidewalk Improvement Willow & Palm
ADA Transition Plan Implementation
Village Parkway Traffic Calming
Sidewalk and Safe Walkways
Subtotal
Regional Transit Intermodal Center
Path To Transit - Conservation Easement
Environmental Monitoring
Utility Relocation
Track and Signal Work
Initial Rail Station
Trails, Parks, Plazas
Parking Garage
Design Utility Relocation
Subtotal
Sewer
Inspect & Repair Sewer
Sycamore Ave (Lower Trunk Main)
Sycamore Ave (Upper Truck Main)
Promenade Lift Station
SR-4 & Along Willow Ave.

Foxboro Sewer Access Road
Subtotal

TOTAL CAPITAL EXPENDITURES
Remaining Fund Balance
Sewer (Fund #420)
FY 22-23 FY 23-24 FY 24-25 FY 25-26 FY 26-27
Proposed Forecast Forecast Forecast Forecast
$7,399,993 6,548,993 $5,948,993 $147,986 $0
73,993 652,014
7,399,993 6,548,993 6,022,986 800,000 - - - - - - - - - - - - - - - - - - - - - 700,000
751,000
100,000 400,000 4,078,000
100,000 867,000
100,000 230,000 800,000
851,000 600,000 5,875,000 800,000 - 851,000 600,000 5,875,000 800,000 - 6,548,993 5,948,993 147,986 - - Sewer (Fund #420)
FY 22-23
Proposed
FY 23-24
Forecast
FY 24-25
Forecast
FY 25-26
Forecast
FY 26-27
Forecast
250
CITY OF HERCULES FY 2022-23 ANNUAL BUDGET CIP SPENDING PLAN

CITY OF HERCULES

FIVE-YEAR CAPITAL IMPROVEMENT
PROGRAM SPENDING PLAN FY 2023-2027
Five-Year Capital Improvement PRogram
City of Hercules Spending Plan FY 2023-2027
Total

BBEEGGIINNNNIINNGG FFUUNNDD BBAALLAANNCCEESS
Revenue Projections
Operating Cost

AVAILABLE FUNDS
Facilities
Police Locker Room and Restroom Remodel
Corporation Yard Landscaping
Business Facilities Plan
ADA Assessment Improvement
Energy Conservation Measures
Subtotal
Parks and Open Space
Parks Master Plan
ADA Assessment Improvement
Victoria By The Bay - Refurbish Gazzebo & Railing
Ohlone Dog Park Tree Removal & Pruning
Tree Planting & Removal Open Space
Aerator Reugio Valley Parks
Trash Cans Replacement
Subtotal
Streets
Annual Sidewalk Repair Program
Annual Restriping Project
Annual Street Rehabilitation Project - Turquoise &
Future Years
Pedestrian Sidewalk Improvement Willow & Palm
ADA Transition Plan Implementation
Village Parkway Traffic Calming
Sidewalk and Safe Walkways
Subtotal
Regional Transit Intermodal Center
Path To Transit - Conservation Easement
Environmental Monitoring
Utility Relocation
Track and Signal Work
Initial Rail Station
Trails, Parks, Plazas
Parking Garage
Design Utility Relocation
Subtotal
Sewer
Inspect & Repair Sewer
Sycamore Ave (Lower Trunk Main)
Sycamore Ave (Upper Truck Main)
Promenade Lift Station
SR-4 & Along Willow Ave.

Foxboro Sewer Access Road
Subtotal

TOTAL CAPITAL EXPENDITURES
Remaining Fund Balance
Facilities ISF (Fund #490)
FY 22-23 FY 23-24 FY 24-25 FY 25-26 FY 26-27
Proposed Forecast Forecast Forecast Forecast
$279,392 254,392 $229,392 $204,392 $179,392
279,392 254,392 229,392 204,392 179,392 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 - - - - - - - - - - - - - - - - - - - - 25,000 25,000 25,000 25,000 25,000 254,392 229,392 204,392 179,392 154,392 Facilities ISF (Fund #490)
FY 22-23
Proposed
FY 23-24
Forecast
FY 24-25
Forecast
FY 25-26
Forecast
FY 26-27
Forecast
251
CITY OF HERCULES FY 2022-23 ANNUAL BUDGET CIP SPENDING PLAN

CITY OF HERCULES

FIVE-YEAR CAPITAL IMPROVEMENT
PROGRAM SPENDING PLAN FY 2023-2027
Five-Year Capital Improvement PRogram
City of Hercules Spending Plan FY 2023-2027
Total

BBEEGGIINNNNIINNGG FFUUNNDD BBAALLAANNCCEESS
Revenue Projections
Operating Cost

AVAILABLE FUNDS
Facilities
Police Locker Room and Restroom Remodel
Corporation Yard Landscaping
Business Facilities Plan
ADA Assessment Improvement
Energy Conservation Measures
Subtotal
Parks and Open Space
Parks Master Plan
ADA Assessment Improvement
Victoria By The Bay - Refurbish Gazzebo & Railing
Ohlone Dog Park Tree Removal & Pruning
Tree Planting & Removal Open Space
Aerator Reugio Valley Parks
Trash Cans Replacement
Subtotal
Streets
Annual Sidewalk Repair Program
Annual Restriping Project
Annual Street Rehabilitation Project - Turquoise &
Future Years
Pedestrian Sidewalk Improvement Willow & Palm
ADA Transition Plan Implementation
Village Parkway Traffic Calming
Sidewalk and Safe Walkways
Subtotal
Regional Transit Intermodal Center
Path To Transit - Conservation Easement
Environmental Monitoring
Utility Relocation
Track and Signal Work
Initial Rail Station
Trails, Parks, Plazas
Parking Garage
Design Utility Relocation
Subtotal
Sewer
Inspect & Repair Sewer
Sycamore Ave (Lower Trunk Main)
Sycamore Ave (Upper Truck Main)
Promenade Lift Station
SR-4 & Along Willow Ave.