Agenda
SPECIAL COUNCIL MEETING - COUNCIL RETREAT (PART 1 OF 2) 1-18-22.PDF SPECIAL COUNCIL MEETING - COUNCIL RETREAT (PART 2 OF 2) 1-18-22.PDF
1. Documents:
SPECIAL CITY COUNCIL MEETING
COUNCIL RETREAT
Please Note: Per California Executive Order N-29-20, the City Council will meet via Telephone/Video Conference only.
TUESDAY, JANUARY 18, 2022 4:00 P.M.
Members of the Public may join and participate in the Council meeting at https://webinar.ringcentral.com/j/1491560741
And
SATURDAY, JANUARY 22, 2022 9:00 A.M.
Members of the Public may join and participate in the Council meeting at https://webinar.ringcentral.com/j/1463239852
TO COMMENT DURING THE MEETING members of the public will need to join the meeting using the above link and have a working microphone on their device. To request to speak please use the “Raise hand” feature located at the bottom of the screen. Public testimony will be taken at the direction of the Mayor and members of the public may only comment during times allotted for public comments.
TO LISTEN to the City Council Meeting, members of the public may call 1-650-242-4929 (Meeting ID: 1491560741 for Tuesday meeting and 1463239852 for Saturday meeting). Please note that members of the public who call in using the telephone number will NOT be able to provide public comments.
TO SUBMIT WRITTEN COMMENTS, prior to the meeting, on matters listed on the agenda email [email protected] with the subject line in the following format:
PUBLIC COMMENT AGENDA ITEM ## - MEETING DATE.
Correspondence must be received by NOON the day BEFORE of the meeting to ensure it can be distributed prior to the meeting. Emails received prior to the meeting will be included in the public record.
ESTABLISH QUORUM
PLEDGE OF ALLEGIANCE
OPEN RETREAT AND REVIEW PROCESS – City Manager
DISCUSSION ITEMS: It is anticipated that the Council will discuss topics 1-3 on Tuesday, January 18, 2022 and topics 4 and 5 on Saturday January 22, 2022. However any unfinished topics from Tuesday, January 18, 2022 may continue to Saturday, January 22, 2022.
SEE AGENDA ATTACHMENT for detailed description of Agenda Items 1-5 (below)
1. Understanding our Budget and Financial Circumstances
2. Employee Recruitment and Retention
3. Maintenance and Improvement of City Facilities
PUBLIC COMMENTS ON ITEMS ON THE AGENDA
According to State Law (also known as “the Brown Act”), public comments at Special Meetings of the City Council are limited to those items on the agenda.
CLOSING COMENTS – City Manager Wrap Up
ADJOURNMENT TO:
SATURDAY, JANUARY 22, 2022 9:00 A.M.
Members of the Public may join and participate in the Council meeting at https://webinar.ringcentral.com/j/1463239852
ESTABLISH QUORUM
PLEDGE OF ALLEGIANCE
PUBLIC COMMENTS ON ITEMS ON THE AGENDA
According to State Law (also known as “the Brown Act”), public comments at Special Meetings of the City Council are limited to those items on the agenda.
DISCUSSION ITEMS:(Continuation of discussion from January 18, 2022) It is anticipated that the Council will discuss topics 1-3 (listed above) on Tuesday, January 18, 2022 and topics 4 and 5 on Saturday January 22, 2022. However any unfinished topics from Tuesday, January 18, 2022 may continue to Saturday, January 22, 2022.
4. Council Policy Decisions
5. Remaining Decisions: Discuss and provide direction, decide, or agree to a future date for all items deferred during the meeting or topics that came up during conversation for later discussion.
CLOSING COMENTS – City Manager Wrap Up
ADJOURN
SPECIAL NOTICES TO THE PUBLIC
In compliance with the Americans with Disabilities Act, the City of Los Altos will make reasonable arrangements to ensure accessibility to this meeting. If you need special assistance to participate in this meeting, please contact the City Clerk 72 hours prior to the meeting at (650) 947-2720.
Agendas, Staff Reports and some associated documents for City Council items may be viewed on the Internet at http://www.losaltosca.gov/citycouncil/online/index.html..
All public records relating to an open session item on this agenda, which are not exempt from disclosure pursuant to the California Public Records Act, and that are distributed to a majority of the legislative body, will be available for public inspection at the Office of the City Clerk’s Office, City of Los Altos, located at One North San Antonio Road, Los Altos, California at the same time that the public records are distributed or made available to the legislative body.
If you wish to provide written materials please provide the City Clerk with 10 copies of any document that you
AGENDA ATTACHMENT
CITY COUNCIL MEETINGS
January 18, 2022 and January 22, 2022
1 | 13
Day 1: January 18th
Introduction: 4:00-4:15
Call to Order
Opening Presentation, Gabe Engeland
AGENDA ATTACHMENT
CITY COUNCIL MEETINGS
January 18, 2022 and January 22, 2022
2 | 13
Part 1: Understanding our Budget and Financial Circumstances (4:15-5:50) A. Annual Comprehensive Financial Report Fiscal Year 2020-21 (Requested by City Council, John Furtado)
Description: The City of Los Altos received an unmodified opinion on the 2020-21 Annual Comprehensive Financial Report (ACFR). This presentation will provide a high-level overview of how the City ended the fiscal year financially. The presentation will highlight revenues and expenditures, overview the current General Fund balances (reserved and unreserved), and show significant or important changes and corrections that were made in the previous fiscal year.
Action Requested: None. This is a presentation only. The ACFR was presented to the Financial Commission on December 20, 2021 and will be presented to the City Council on January 25, 2022.
B. Topic: Budget Overview (Requested by City Council, John Furtado) Description: The City of Los Altos needs to modernize its budget practices, including how positions are allocated, the charging of personnel to appropriate Funds, the establishment and utilization of Internal Service Funds, strategic utilization of restricted funds or special revenue funds, and a rationale policy for CIP funding. This presentation will provide a comprehensive understanding of how the Los Altos budget works currently and areas that will be improved, updated, and changed moving forward.
Action Requested: None. The following changes have been authorized by the City Manager: Beginning with the next budget cycle, the City will practice a zero-based budget, develop and utilize internal service funds, and create and implement proper cost allocation models. Additionally, the City will budget for known obligations in current and future budgets and make it transparent when fund balances are being reduced to pay for on-going costs.
Policy Question(s): None. Policy questions are included in presentations occurring later in the meeting.
C. Topic: CalPERS & OPEB Funding (John Furtado)
Description: The City of Los Altos pension programs for Safely and Miscellaneous are currently funded at an average of 68.5% (31.5% remains unfunded). Prior to the $5M pre-payment of CalPERS obligations in 01/2022, the City had not been making adequate payments to responsibly fund the pension system. As an example, after making the minimum payment to CalPERS in the previous fiscal year, the City’s pension liability on the ACFR increased by more than $3.2M in the current fiscal year.
This presentation will provide an overview of pension obligations, unfunded accrued liability (UAL), and provide an explanation of the City’s various retirement plans. The overview will include options for annual Additional Discretionary Payments (ADP), the term used by CalPERS to identify payments made in excess of the minimum required amount, as well as the potential to establish a 115 plan.
POLICY QUESTION: Does the City Council wish to authorize the use of ADPs on an annual basis to reduce the long-term liability of its pension plans with CalPERS? POLICY QUESTION: Does the Council wish to receive additional information on the potential creation of a 115 plan?
AGENDA ATTACHMENT
CITY COUNCIL MEETINGS
January 18, 2022 and January 22, 2022
3 | 13
D. Topic: Special Revenue Funds, Internal Service Funds, and Restricted Funds (Gabe Engeland) Description: The City collects revenue in 17 Special Revenues Funds and 1 Restricted Fund. The use of these Funds islimited to what is legally allowable based on State law and/or how the fund was established.
Historically, the City has not utilized these funds to their potential, and instead funded items through the General Fund first, reducing funds available for expenditure on general government needs, including maintenance of assets and city facilities and investments in personnel and parks. The outcome is downward pressure on the General Fund, while balances grow in the restricted and special revenue funds, and City needs are deferred. This type of budgeting has caused General Fund eligible expenditures to be cancelled, delayed, or not requested during the budget process even though sufficient funding existed.
The use of special revenue and restricted funds on eligible expenditures, prior to using General Fund funds, is a recommended practice.
Category: Accounting & Budgeting Changes
1. CIP: Currently, the CIP Fund is funded through the General Fund first, with secondary funding sources coming from restricted funds, special revenue funds, and grant funds. Additionally, the CIP list contains several projects that have no known or identified source of funding or funding that is inadequate to meet the needs of the project. The CIP Fund should be funded as part of overall revenues from the General Fund, with these funds applied after all other eligible funding sources have been used or considered. CIP projects should also have identified sources of funding in the 5- year plan and sufficient funding in the budget when planned.
At the beginning of the current fiscal year, the CIP budget had a $2 million deficit, as shown in the table below.
CIP, General Fund
Current Fund Balance $11.5 Million
Current Obligations (FY 21-22) $13.5 Million
Unfunded Obligations (FY 21-22) ($2,000,000)
Projected Obligations (5-Year CIP) $33.9 Million
Unfunded Obligations (5-Year CIP) ($21.8 Million)
CIP, Non-General Fund
Current Fund Balance $11.1 Million
Current Obligations (FY 21-22) $6.0 Million
Projected Obligations (5-Year CIP) $20.4 Million
Projected Revenue (2-Year CIP) $12.7 Million
Projected Surplus $3.4 Million
Action Taken: The City Manager will accurately budget for the needs and known expenditures for capital projects. The budget will include, when applicable, special, restricted, grant or other funding. Projects will not be included in current year budgets that do not have sufficient funding.
AGENDA ATTACHMENT
CITY COUNCIL MEETINGS
January 18, 2022 and January 22, 2022
4 | 13
2. Benefits (Funds: Dental/Vision; Unemployment; Workers’ Compensation; Liability): The City is not appropriately funding obligations in the funds collectively referred to as “benefits.” The City has chosen to draw down fund balances as opposed to funding known obligations. The underfunding of these Funds has led to expenditures in the General Fund being artificially lowered and a General Fund balance that is artificially increased because it does not consider these known, unbudgeted expenditures in future years. The City will need to fund benefits as the Fund balances are rapidly being depleted and will drop from $2.3M currently to less than $750,000 at the end of the current budget cycle.
Current Fund Balance
(combined) Millions
Opening Fund
Balance
Revenue Expenditure Ending Fund
Balance
Current Year $2.3M $1.06M $1.8M ($794K) $1.56M
FY 22-23 $1.56M $1.08M $1.9M ($892K) $740,000
Category: Establishment of Internal Service Funds (ISF)
3. Technology Reserve (General Fund): IT projects are funded through General Fund Reserves and categorized as an expenditure from the CIP. This should be changed by establishing an IT replacement internal service fund that receives contributions from the general fund as well as the Enterprise funds like Sewer based on use. The current balance in the Technology reserve of around $1.1M can be transferred as the starting balance for this Internal Service Fund.
Current Fund Balance $1.1 Million
Current Obligations (2 years) $800,000
Projected Collections N/A Establishing ISF (Fund Based on Need) Action Taken: The City Manager will create internal service funds to account for technology needs. The establishment of the ISF will be funded by the transfer of the fund balance of $300,000.
4. Equipment Replacement Fund: The Equipment Replacement Fund is anticipated to have a negative fund balance, potentially as high as $900,000, by the end of FY 23. The City will need to change its budget processes to account for the expected deficit while planning for future needs.
Current Fund Balance $400,000
Current Obligations (2 years) $1.3 Million
Unfunded Obligations ($900,000)
Action Taken: The City Manager will plan for equipment replacement as part of the normal budget process.
AGENDA ATTACHMENT
CITY COUNCIL MEETINGS
January 18, 2022 and January 22, 2022
5 | 13
Category: Policy Questions
5. Downtown Parking Fund: The Downtown Parking Fund was originally established in 2003 as the Downtown Maintenance Fund. This fund has transitioned from focusing on the overall maintenance and improvement of the downtown, to being reserved for parking only.
Staff would like to designate this fund as the Downtown Maintenance Fund and use it to upgrade or repair parking, lighting, wayfinding signage, small business grants, downtown wi-fi, beautification, events, and other items that improve the quality of life for residents, including the exploration of the establishment of a business improvement district.
Current Fund Balance $890,000
Current Obligations (2 years) None
Projected Collections (5 Years) $353,500
POLICY QUESTION: Should the City Council designate the Downtown Parking Fund as it was originally intended (Downtown Maintenance Fund) and broaden eligible expenditures?
6. Park in Lieu Funds: Currently the General Fund supports approximately $1 million in annual expenditures that are eligible expenditures from Park in Lieu Funds. The General Fund subsidy of park projects has caused other needs or obligations in the General Fund to be deferred or canceled.
The below chart shows the current fund balance, obligations, and expected revenue collection of Park in Lieu Funds over the next 5 years.
Current Fund Balance $5.8 Million
Current Obligations (5-Year CIP) $6.7 Million
Projected Collections (5 years) $10 Million
POLICY QUESTION: Should the City Council fund current eligible expenditures from Park in Lieu funds as opposed to the General Fund?
BREAK: 5:50-6:00
AGENDA ATTACHMENT
CITY COUNCIL MEETINGS
January 18, 2022 and January 22, 2022
6 | 13
Part 2. Employee Recruitment and Retention 6:00-6:30
Topic: Employee Attraction, Recruitment, and Retention (Irene Barragan Silipin) Description: Discussion of current state of the City’s compensation philosophy, classification system, turnover and separation rates, organizational continuity, and comparison of Los Altos to the marketplace.
Los Altos is a service organization. The City must attract, retain, and develop talented employees to meet the expectations of Los Altos residents and implement the vision of the City Council. The operations of the government depend on the recruitment and retention of highly skilled personnel.
Los Altos has been unable to retain employees, leading to more than 25% of the full-time workforce separating from service each fiscal year in recent years. Currently, less than 50% of all employees have worked in Los Altos for five years. As an example, there is only one full-time employee in the Finance Department with a tenure greater than 9 months. In Engineering Services, positions outside of senior leadership have turned over often. In this position group the median length of service with the City is 27 months, however there are currently multiple vacancies in this classification that when hired will reduce the median tenure substantially. Additionally, 2/3 of professional staff share an office with a co-worker or multiple co-workers and there is currently no dedicated meeting space at City Hall for internal meetings or meetings with the public. Several City employees currently work out of temporary trailers located behind the police station, including the City’s IT Department and the Traffic Division of the Police Department.
Focus Area(s) and Policy Decisions: Does the City Council wish to update its approach to employee compensation and benefits, working conditions, and classification to attempt to attract and retain highly competent employees?
Action Requested: The City Council should develop a compensation philosophy outlining the goals and vision for personnel retention and attraction in Los Altos. If the City Council directs the establishment of a compensation philosophy, City staff will bring back decisions to Council around compensation and benefits, working conditions, and classification that are in line with the adopted compensation philosophy.
AGENDA ATTACHMENT
CITY COUNCIL MEETINGS
January 18, 2022 and January 22, 2022
7 | 13
Part 3. Maintenance and Improvement of City Facilities (6:30 – 7:50) A. (6:30-7:00) Topic: Report from Police Facility Subcommittee (Requested by City Council, Vice Mayor Meadows & Councilmember Weinberg)
Description: The City Council authorized the creation of a subcommittee to review if the City should pursue a bond measure for a new police facility. Vice Mayor Meadows and Councilmember Weinberg will provide an update on the work of the subcommittee.
Action Requested: Determine if further action is necessary based on the report of the subcommittee. If yes, Staff will schedule the topic for further discussion at an upcoming Study Session.
B. (7:00 – 7:50) Topic: City-Owned Facilities, Priorities (Requested by City Council, Manny Hernandez & Gabe Engeland)
Description: The City must continually invest in public safety, public works, parks and recreation, and government facilities. The below list of government-owned facilities is not to be considered exhaustive but does contain assets that need to be scheduled for maintenance, renewal, retirement/demolition, or replacement.
Facilities were placed in the matrix by staff after an assessment of the known condition of the asset. The placement in the matrix is not intended to review or change any Council direction or alter or amend direction received by the City Council. Instead, the matrix outlines what is currently known of the condition of the asset and the suggested timeframe for Council to act.
Facilities in the matrix were determined by Urgency to act (Low, Medium, High), Resource Use (Low = $2M or less, Medium = $2M - $5M, High = $5M+) and potential inclusion in the budget (Immediate = FY22- 23, Near Term = 5 Year CIP Plan, Future = Unscheduled). The facilities are filtered by “Timing” with immediate items listed first, followed by 5-year CIP, and then Unscheduled.
To the extent possible, the inclusion for each category is based on the decisions the City Council has made to date. For example, Halsey House is listed as “Low” in resource needs because the current direction is to mothball the structure, which has an estimated cost of $250,000 this fiscal year, with small outlays in future fiscal years. When the City Council determines to move forward with full rehabilitation (or phased rehabilitation) or adaptive reuse of the Halsey House, the resource use would move to “high” if the cost exceeds $5M or medium if the cost is between $2M and $5M.
The Bus Barn Theater is listed as “unknown” for Resource Use with “5-year CIP” for timing. This is because it has not yet been determined how the Council will handle the current facility with regards to maintenance, renewal, retirement/demolition, or replacement. The timing was listed due to the agreement of an MOU with the Los Altos Stage Company that would not exceed 3 years.
The City Council is not being asked to prioritize specific facilities or assets within the given listed timeframe, but instead determine which projects should be categorized within each timeframe area
AGENDA ATTACHMENT
CITY COUNCIL MEETINGS
January 18, 2022 and January 22, 2022
8 | 13
(Immediate, 5-Year CIP, Unscheduled). Once the projects are categorized appropriately, the City Council will be able to prioritize specific projects as part of the normal budget process.
It is understood more detailed costs and analysis will be necessary to move certain items forward within the timeline and resource allocation outlined below. The matrix is for policy planning purposes. More information will be available as projects are moved from planned to a recommended budget.
Action Requested: Does the City Council agree with timing and urgency of the projects listed? If yes, Staff will plan accordingly in future budget years and return these items to Council for prioritization as part of the normal budget process.
If no, what changes should be made to the timing and/or urgency of these facilities based on their current physical condition?
Facility Urgency Resource Use Timing
Caretaker House High Low Immediate
Halsey House High Low Immediate
Fire Station Almond High Medium Immediate
LAYC/City Hall High Low Immediate
Park/ADA High Low Immediate
Police Facility High High Immediate
Facility Urgency Resource Use Timing
Bus Barn Theater Medium Unknown 5-Year CIP
Fire Station Loyola Medium Medium 5-Year CIP
Garden House Low Medium 5-Year CIP
Grant Park Senior Center High Medium 5-Year CIP
MSC Low Low 5-Year CIP
Facility Urgency Resource Use Timing
999 Fremont Low High Unscheduled
Underground Facilities Low Low Unscheduled
City Facilities, Timing: Immediate
Caretaker House (Redwood Grove): This property is not fit for occupation and is currently used for supply storage for Redwood Grove Summer Camp, Grassroots Ecology, and the archery program. Restrooms in Redwood Grove are currently provided by portable toilets. The property should be restored, replaced, or demolished. The City Council should consider the current uses and determine if restoration or replacement is preferable to demolition. If replacement or demolition is the preferred option, the City should place restroom and storage facilities at the current location.
AGENDA ATTACHMENT
CITY COUNCIL MEETINGS
January 18, 2022 and January 22, 2022
9 | 13
Halsey House: The City Council directed staff to mothball Halsey House until a final decision could be made on the type of rehabilitation of the property. The City Council will need to make a final determination on full rehabilitation (including staged/partial rehabilitation) or adaptive reuse, and how to plan the recommended approach, at a future meeting date.
Fire Station, Almond: Roof (critical), building windows need replacement, facility lighting needs to be updated, and HVAC units and water heaters are nearing end of usable life.
LAYC/City Hall: City Hall, like the police station, needs repair or replacement. Additionally, the offices in City Hall are not sufficient to conduct city business. Two-thirds of all professional employees share office space, there is no longer any dedicated meeting space in City Hall, and the IT Department currently works out of a temporary trailer on City Property. Converting LAYC to staff space would be a cost-effective way to meet some of the needs of the workforce, eliminate working in temporary trailers, and provide dedicated meeting space for staff and residents.
Park/ADA: The playgrounds in Los Altos could provide greater access to residents with physical and cognitive disabilities. Los Altos should incorporate access needs into current playground designs. In addition, several of the playgrounds are nearing the end of their useful life and will need to be replaced soon.
Police Facility: The City Council recently formed a subcommittee to explore the need for a new Police facility. The current building is badly in need of repair or replacement. Vital components of the facility (plumbing, HVAC, and sewer) need major repair or complete replacement. The traffic division of the Police Department currently operates out of a temporary trailer on City property.
City Facilities, Timing: 5 Year CIP
Bus Barn Theater: The City owns the Bus Barn Theater, which is currently operated by the Los Altos Stage Company as a community theater. The building has outlived its useful life and needs to be renewed or replaced. The City Council recently signed an MOU with the Los Altos Stage Company to explore the possibility of moving the theater operations to a downtown location.
Fire Station, Loyola: Emergency generator (replacement), facility lighting needs to be updated, and HVAC units and water heaters are nearing the end of usable life.
Garden House: Interior space is dated and needs updating. Paint, flooring, hot water system, and kitchen appliances have passed useful life and need replacement. Air conditioning is needed in the facility. This building space is listed as separate from the underground as it is currently used by the public.
Grant Park Senior Center: The Grant Park Senior Center is need of repair and upgrades. Currently, there is no hot water system in the plumbing system and the electrical system does not allow for commercial use of the kitchen or an adequate HVAC system for either of the buildings.
MSC: The admin building has an inadequate amount of space for office staff and limited workspace for field crew members to complete necessary reports and work on computers. All warehouse space in the yard is full. Cargo containers are now being added to the yard for additional storage and workspace.
AGENDA ATTACHMENT
CITY COUNCIL MEETINGS
January 18, 2022 and January 22, 2022
10 | 13
City Facilities, Timing: Unscheduled
999 Fremont Ave.: The City purchased this property in 2019 but has yet to prioritize a project. The City Council could consider demolition of the structure that currently sits on the property.
Underground Facilities: The underground is no longer in regular use but is not a desirable location for most users due to lack of HVAC and the general condition of the flooring, walls, and regular issues with the plumbing system. The apartment is no longer occupied and is being used for storage and as the headquarters for Summer Day Camp. This space also has an active lapidary. This building space is listed as separate from the Garden House as it is currently not used by the public.
Public Comment
Wrap-Up: 7:50-8:00 (Gabe Engeland)
Staff will summarize the decisions that have been made during the first day of the work plan and retreat and will outline which items or decisions will be deferred to the second day (or another date in the future).
Staff will also add items that were raised during the first day for discussion on the second day.
AGENDA ATTACHMENT
CITY COUNCIL MEETINGS
January 18, 2022 and January 22, 2022
11 | 13
Day 2: January 22nd
Introduction, Gabe, 9:00 – 9:10
Part 4. Council Policy Decisions (9:10-10:50)
A. Topic: Policy on Fees (Requested by City Council, Jon Maginot):
Description: The City Council should adopt fees annually as part of the budget process. The fees should be set based on City Council policy direction and applicable State laws. During the most recent adoption of the fee schedule, Council raised questions regarding potential subsidies for residents or non-profits or other groups for the use of community facilities. If the Council would like to subsidize these groups, should it be through reduced fees only or should the Council establish a use or fee waiver policy or update the current fee waiver policy?
Policy Question: Does the City Council wish to subsidize certain users and groups of City facilities, and if so, to what extent? Does the City Council wish to update the current fee waiver policy? B. Topic: Fees and Cost Recovery for Services (Laura Simpson) Description: The City of Los Altos is unique in that it has a very low fee structure, including flat fees for staff processing, as well as fees such as housing in-lieu or other fees to be dedicated for special programs.
The flat planning fees do not fully recover the staff time associated with projects and should be considered an hourly fee rate in the next Master Fee Schedule Resolution. If cost recovery is allowed through billable hours, this would support the City’s overall budget and allow for appropriate staffing levels in both planning and building to ensure timely review and responses.
Policy Question: Does the City Council wish to continue subsidizing development through a fee structure that does not recover staff time?
C. Topic: Creation of Policy for Use of City Property or Facilities at Civic Center Site (Requested by City Council, Jon Maginot)
Description: The City Council authorizes the use of certain community groups and non-profits for regular, licensed, or leased use of City properties and facilities on the civic center site. This use is currently completed within the context of the City Code, Council actions, or relevant policies. Council has asked for a discussion on this topic.
Policy Question: Should the City Council put in place a policy to guide the use of the civic center property for continuous or regular use, including licensing, leasing, and other purposes? D. Topic: Below Market Rate (BMR) (requested by City Council, Laura Simpson and Erik Ramakrishnan) Description: The City Council may subsidize the development of Below Market Rate (BMR) units for rental or sale. This can be accomplished through several mechanisms, including the options provided in this report.
Policy Question: Should the City Council put in place a policy to subsidize BMR development? If so, which of the options outlined here would Council like more information on? The options selected could be included as part of the Housing Element process.
AGENDA ATTACHMENT
CITY COUNCIL MEETINGS
January 18, 2022 and January 22, 2022
12 | 13
E. Topic: Tree Protection Policy (Requested by City Council, Emiko Ancheta & Jon Maginot) Description: The current tree protection and tree removal policies of the City can be difficult to apply consistently as part of the development process. As evidenced by a recent development where trees were removed, including some protected species, some areas of the code may be confusing or not reflect the direction of the City Council.
Policy Question: Should the City Council update the tree protection policy currently in place? Break: 10:50-11:00
AGENDA ATTACHMENT
CITY COUNCIL MEETINGS
January 18, 2022 and January 22, 2022
13 | 13
Part 5. Remaining Decisions, Direction, Deferred Items, Mayor 11:00 – 1:00 Topic Remaining Decisions: Discuss and provide direction, decide, or agree to a future date for all items deferred during the meeting or topics that came up during conversation for later discussion.
Public Comment
Adjourn. 1:00
Gabriel Engeland, City Manager
Los Altos City
Council Planning
& Work Session
Los Altos City Council Planning
& Work Session
Expectation: We will not revisit previous
directions given by the City Council
3 This is a process, not an event.
4 Crisis Response
Reinforces what is known
5 Crisis Response
Exposes what is unknown
6 Crisis Response
Reinforces what is known
Exposes what is unknown
7 By the Numbers: ACFR &
Budget
8 $3.98M
($4.0M)
$1.17M Property Tax revenue in excess of
budget (4.3% positive variance). This
trend should continue in the current FY.
To date, one-time revenues received
in Cares Act & ARPA funds to balance
budget.
One-Time mistakes and corrections in
ACFR (largely due to reclassification of
settlement agreement and correction
of unrealized gains).
9 18.7%
$6.6M
($2.0M)
General Fund reserve. Mid-Year was
21.4%, and goal is never less than 20%.
Reduction in General Fund unassigned
reserve, which now stands at $1.2M,
started year at $7.8M.
GF CIP shortfall to begin FY, $13.5M in
need and $11.5M in funding.
10 13.4%
$4.0M Expected ARPA Payment in July of 22.
Percent over budget for sales tax
collection (though actuals were down
$370,000).
11 11.4M Reduction in liability after $5M
prepayment to CalPERS by City
Council. Funded status increased
4.5%.
Quotes & Numbers:
Personnel
12 Q: What is your primary reason for
leaving?
13 Answer: “No stability. Constant
turnover. Volume of work is not
sustainable with the current staffing
structure.”
51%
20%+
Percent of workforce who has been
with Los Altos less than 5 years
Percent of workforce who separates
employment annually
14 14% Percent of full-time positions currently
advertised (not vacant)
Q: Is there anything you would change
about your job?
15 Answer: “This is a totally thankless
job…not enough support or
resources.”
1 Number of full-time employees in Finance
with a tenure longer than 9 months
16 2 Total number of external applications
received for a recent advertised
management position
Q: What was the least satisfying thing
about your job?
17 Answer: “We have been understaffed
for quite some time.”
Infrastructure
18 19
20 21
22 23
24 You can do anything,
but not everything.
25 You can do anything, but not everything.
26 You can do anything,
but not everything.
27 28
29 30
31 Let’s Get Started
32 FY2021 Annual
Comprehensive Financial
Report (ACFR)
City of Los Altos
Council Retreat
January 16, 2022
1 Today’s
Discussion
2 ACFR Document
Sections
Contents
FY2021 Results
Year Over Year Comparison
Next Steps
Receive Report
Refer FY 21 ACFR to City Council
The Audit
Maze & Associates presentation
The ACFR Document
Introductory
Financial
Statistical
3 Financial Section
Government Wide Financial
Statements
Fund Financial Statements
4 Governmental Activities
• All Activities Excluding Business Type
• Includes Internal Service Funds
Business Type Activities
• Charge Customers directly for services
• Enterprise Funds
Fiduciary Funds
• Resources that belong to others, not available to
primary government
Proprietary Funds
• Services that charge a fee to users, Enterprise
funds , internal service funds
Governmental Funds
• Basic Services of Government, Typically Financed
with Taxes, grants, etc.
ACFR
Highlights
5 Independent Auditors Report
•General overview of the City for the past year
•FY21 Initiatives and projects accomplished
•Overall Economic outlook
Transmittal Letter
•Financial highlights
•Variance analysis
Management Discussion & Analysis
•Statement of Net Position
•Notes to Basic Financial Statements
•Budgetary Information
Financial Statements & RSI
FY 2021 Results
6 Commonly known
as an “unmodified”
or “ clean” opinion
The City’s financial
Statements for FY 20-21
are fairly stated in
conformity with
accounting principals
generally accepted in the
United States
Government –Wide :
Financial
Highlights
7 Net Position
$137.9 million
Revenues
$61.5 million .
Expenses
$82.9 million
Governmental
Activities $107.7
Business- Type
Activities $
30.2 Governmental
Activities $53.4
Business- Type
Activities
$8.1
Governmental
Activities $77.2
Business- Type
Activities
$5.7
General Fund Revenue Comparison
8 • Total revenues increased primarily due to
higher property tax receipts and Grant Funds
(ARPA/ CARES)
• Key Revenue loss in TOT and interest income
• Sales tax still below pre pandemic
• Adjusted actuals lower then FY20
General Fund Revenue
Revenue (in Millions) FY 2020
Actual
FY 21
Budget
FY 2021
Actual
Actual
Var %
Budget
Var%
Property Tax 25.79 27.29 28.46 10.4% 4.3%
Sales Tax 3.37 2.64 3.00 -11.2% 13.4%
Transient Occupancy Tax 2.36 0.58 0.66 -71.9% 13.7%
Other Taxes 3.96 3.48 4.41 11.3% 26.6%
Interest Income 1.79 0.41 0.14 -91.9% -64.2%
Grants (ARPA + CARES) - - 3.98 100.0% 100.0%
All other Reveune 8.30 7.76 7.85 -5.4% 1.2%
Total Revenue 45.57 42.16 48.51 6.4% 15.1%
ARPA Adjustment (3.59)
Adjusted Revenue 45.57 42.16 44.92 -1.4% 6.6%
General Fund Expenditure Comparison
9 • Total Expenditures increased YOY, but were lower than Budget
• Public Safely & Public Works & Recreation underspent
• Community Development and Admin/Finance overspent
By Type View
• Personnel costs Increased
• Services and Supplies decreased
General Fund Expenditures - Department View
Expenses (in Millions) FY 2020
Actual
FY 21
Budget
FY 2021
Actual
Actual
Var %
Budget
Var%
Public Safety 18.80 20.34 19.39 3.2% -4.7%
Public Works 5.47 5.77 5.62 2.7% -2.7%
Recreation 2.31 1.80 1.78 -23.0% -1.0%
Community Development 5.52 6.20 6.36 15.1% 2.5%
Adminstration & Finance 8.52 7.35 7.70 -9.5% 4.8%
Total Expenditures 40.61 41.47 40.85 0.6% -1.5%
General Fund Expenditures - By Type
Expenses (in Millions) FY 2020
Actual
FY 21
Budget
FY 2021
Actual
Actual
Var %
Budget
Var%
Personnel Costs 22.81 24.02 23.91 4.8% -0.4%
Services and Supplies 17.51 17.39 16.74 -4.4% -3.7%
Capital Outlay and others 0.30 0.09 0.22 -27.8% 131.5%
Total Expenditures 40.61 41.47 40.85 0.6% -1.5%
Fund Balance : General Fund
10 In Millions FY 21 FY 20 Variance
Non Spendable 1.86 1.84 0.02
Restricted - - -
Committed - - -
Assigned 15.94 25.77 (9.84)
Unassigned 4.93 7.86 (2.93)
Total Fund Balance 22.72 35.47 (12.75)
Unassigned FY 21
ARPA Reserve for FY 22 3.60
Unrealized gain Loss 0.12
Unassigned (Available for prog) 1.21
*Unassigned Fund balance was adjusted by $ 2.86 million to account for the Purchase of 999 Fremont that was recorded as Land for development in FY 20
Reserve Balances
11 Reserve Type FY 20 FY 21 % of FY 21 Exp
Non Spendable
Inventory 60,030 145,196
Notes Receivable 1,767,659 1,704,880
Veterans Memorial 8,615 8,615
Total Non Spendable 1,836,304 1,858,691
Assigned
Emergency and operating reserve 7,206,207 7,649,169 18.7% OPEB 1,500,000 1,500,000
PERS 5,000,000 5,000,000
Technology Reserve 1,412,090 1,108,582
Community Center Reserve 10,654,976 679,110
Total Assigned 25,773,273 15,936,861
Unassigned
ARPA Reserve for FY 22 3,598,964
Unrealized gain Loss 118,905
Unassigned (Available for prog) 7,861,296 1,210,297
Total Unassigned 7,861,296 4,928,166
Total Fund Balance 35,470,873 22,723,718 55.6%
Operating
Reserve has
fallen to below
20% partly
because Council
approved Legal
Settlement of
$1.04M
Unrealized Gain
Should not be
considered
distributable
Other Major Funds
In Lieu Parkland
• Revenues $1.6 million, Transfers to CIP $1.3 million
• Fund Balance $5.8 million
• Commitments to CIP (prior + FY 22)=1.2 million
• Available fund balance = $4.58 million
Capital Projects Fund
• FY 21 Expenditures $22.8 million
• Fund Balance 11.5 million
• Commitments to CIP (prior + FY 22)=13.5 million
• Available fund balance = $-2.0 million
12 Memorandum of Internal Control (MOIC)
• 2021-01: Timely Invoice payments
• 2021-02: Outdated Signature Cards
• 2021-03: Information System Risk Management Policy
13 Questions
14 Requested Action
• Receive report and presentation
•QUESTIONS??
15 Net Position Governmental Activities
16 • Assets increases due to higher revenues, lower
spending and higher capitalization.
• Liabilities increased due to higher accrued
payroll, unearned revenues and ARPA Grant
receivable
• Deferred inflows / Outflows increases /
decreases due to GASB 68 pension related
changes
• Net pension liability increased by $ 3.2 million
to $42.4 primarily due to actuarial assumption
changes
In millions 2021 2020 Variance
Assets 165.7 151.6 14.2
Deferred Outflows 9.5 9.3 0.2
Less:
Liabilities 66.7 56.4 10.2
Deferred Inflows 2.8 2.9 (0.2)
Net Position 105.8 101.5 4.3
Totals Governmental +
Business type
Net pension liability 42.4 39.1 3.2
Net OPEB liability 1.6 1.4 0.2
Change in Net Position : Governmental
Activities
17 • Total revenues increased primarily due to
higher property tax receipts and Grant
Funds (ARPA/ CARES)Recreation program
revenues decreased due to inability to
provide programs & services as a result of
the community center closure
• Expenses lower due to planned spending
restrictions related to the pandemic and
higher vacant positions
• Net Position increased by $ 4.3 million over
FY 20
In Millions 2021 2020 Variance
General Revenues 39.5 40.9 (1.4)
Program Revenues 13.9 8.4 5.5
Total Revenue 53.4 49.2 4.1
Expenses 46.2 48.5 (2.3)
Excess / (Deficit) before Transfers 7.2 0.7 6.5
Transfers (2.8) - (2.8)
Change in Net Position 4.3 0.7 3.7
Change in Unassigned Fund Balances
18 Reconciliation of Unassigned Fund Balance FY 21 FY 20 Unassigned Fund Balance Per ACFR 1.21 7.86
Unused Unassigned balance from FY 19 - (1.08)
Unassigned Balance For the Year only 1.21 6.78
Land Purchase reclassification 2.86 -
Unrealized Gain / Loss 0.66 (0.66)
2020 Encumbrance 0.26 (0.26)
Adjusted Unassigned Fund Balance 4.99 5.87
Additional Debt Service for Community Center 0.70 -
Revenue loss FY 21 0.65 -
Expense Increase FY 21 (0.47) -
Comparative Ending Balance 5.87 5.87
Council Retreat : January 18th, 2022
Budget
overview
BECAUSE IT’S YOUR
MONEY
It’s important to
understand how funds are
allocated…
City Fund Structure
General Fund
Special Revenue
Funds
Capital Improvement
Fund
Debt Service
Funds
General Fund
Equipment
replacement
IT Initiatives /
Technology Reserve
Enterprise Fund
Sewer
Solid Waste
Storm Drain
Special
Revenue Funds
Roadwork
Road Mt. (SB1)
Gas Tax
Prop 1B
Measure B
TDA
Traffic Impact Fee
Traffic Congestion Relief
VRF 80%
Vehicle Impound
Other
CDBG
Grants
Estate Donations
Downtown Parking
In Lieu Parkland
PEG Fees
Public Art
Supplemental Law
Enforcement
Internal Service
Funds
Dental / Vision
Unemployment
Workers
Compensation
General Liability
Enterprise Fund
Capital Projects
Capital
Improvement
Projects
Equipment
Replacement
Debt Service
Funds
COP 2004
Community Center
Loan
Custodial Funds
NCLA
Raymundo Curb &
Gutter
Blue Oak Lane Sewer
Avalon Dr Curb
Current City Fund Structure
General Fund Enterprise
Fund
Sewer
Solid Waste
Storm Drain
Special
Revenue Funds
Roadwork
Road Mt. (SB1)
Gas Tax
Prop 1B
Measure B
TDA
Traffic Impact Fee
Traffic Congestion Relief
VRF 80%
Vehicle Impound
Other
CDBG
Grants
Estate Donations
Downtown Parking
In Lieu Parkland
PEG Fees
Public Art
Supplemental Law
Enforcement
Internal Service
Funds
Dental / Vision
Unemployment
Workers
Compensation
General Liability
Equipment
Replacement
IT / Technology
Replacement Fund
PERS/OPEB
Stabilization
Capital Projects
Capital Investment
Projects
Outside Funding /
Grants
Debt Service
Funds
COP 2004
Community Center
Loan
Custodial
Funds
NCLA
Raymundo Curb &
Gutter
Blue Oak Lane Sewer
City Fund Structure – Going Forward
Personnel
Allocations
General
Fund
Enterprise
Funds
Capital
Projects
Special
Revenue /
Restricted
Funds
Personnel
Currently, all charged to the
General Fund
Allocations Going Forward
All Funds Revenue
All Funds Expenditure
The Big Picture: FY22-23
All Funds
Fiscal Structure - General Fund
• Primary Fund for City’s Operation
• Critical to City’s overall financial
health
• Revenues
• Include Property Tax, Sales Tax,
Permit Fees, Recreation fees,
Franchise Fees, Fines, etc.
• Comprised 79% of all fund revenues
in FY 2021
Fiscal Structure - General Fund
• Supports the following
programs/ Department
Expenses
• Administration
• Public Safety (Police & Fire)
• Community Development
• Public Works
• Recreation
• Debt Service
Fiscal Structure -Enterprise Funds
• Sewer /Solid waste/Storm Drain
• Classified as “Enterprise Funds”
• Must be self-sustaining
• Revenues are collected only to cover
operating expenses
• Cannot be used for any other purpose per
State law
• Sewer comprised $7.1 million 11.6% of
operating revenues in FY 2021
• Solid waste comprised $0.86 million 1.4%
in FY 2021
• Storm Drain Fund has no revenue source
and is supported by GF
• Are not paying their “fair share”
Fiscal Structure - Restricted Funds
Restricted Funds are used for specific
purposes which are regulated by state
law or Council decision.
Some examples are
Park in Lieu Fund
• Funds can only be used on land
designated as park land
Gas Tax Fund
• Restricted for maintenance of City
streets and alleys
• Must have a Maintenance of Effort
component. Current 1.98M
• These funds may supplement
operations in various departments,
although most expenditures are not
used for administrative costs.
Fiscal Structure –Internal Service Funds
• Workers Compensation, Dental, Unemployment, General
Liability
• Classified as “Internal Service Funds”
• Must be funded as part of the budget process
• Revenues are collected from all sources General fund, Enterprise, and others if eligible.
Proposed to create 3 new Funds
• Equipment and Fleet Replacement
• Information technology replacement
• PERS Stabilization
• Currently underfunded
Fiscal Structure –Debt Service Funds
2004 Certificates of participation (COP04)
• Debt raised to build Rosita Park
• Annual debt payment of 167,400
• Interest rate
• Balance payable 880,000
• Payments complete in 6 years (2028)
Community Center Loan
• Debt raised to build complete the community center
• Annual debt payment of 622,090
• Interest rate 2.29%
• Balance payable 9,496,863
• Payments complete in 18 years (June 30,2040)
• Currently Funded from General
Fund
• Can this be eligible for Park in
Lieu?
Fiscal Structure - Capital Improvement
Fund
• Established by City Council to designate funds
earmarked for major Maintenance and
infrastructure projects and others
• Annual Street resurfacing
• Sewer Maintenance and repairs
• Funded through Gas Tax, VRF, and other road
funding sources and General Fund surpluses
• Proposal to allocate an annual amount or
percentage of revenues from the General
fund during the budget process
Capital
Projects
Fund
General
Fund
Gas Tax
and Road
work
Grants
Other
Special
Revenue
Funds
Enterprise
Funds
Fiscal Structure - Capital Improvement
Fund
Fiscal Structure - Capital Improvement
Fund, General Fund Contributions
https://smile.amazon.com/gp/product/B007G83T16
Questions
Fiscal Structure - Equipment Fund
• Established by City Council as a general fund
reserve to designate funds earmarked for
major equipment purchases
• Replacement schedule to be established to
coordinate usage of funds (in conjunction
with other restricted funds, where applicable)
• Proposal is to have it as a dedicated internal
service fund
• Some Cities have tagged along a Technology
fee on permits that can help offset
Technology costs in Community Development
CALPERS UAL
Funding
City of LOS ALTOS COUNCIL RETREAT
January 16, 2022
1 1/19/2022 2
Current UAL Structure, Negative
Amortization
Negative amortization
• Payments are less than the interest
charged
• Difference increases total amount
owed
• Currently we are paying negative
principle
3 $-
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 Negative Amortization: Single Base, $1M Balance, 30 payments What is Unfunded Accrued Liability (UAL)
• The Unfunded Accrued Liability (UAL) obligation represents the market value of the assets, minus the discounted value of the future liabilities. When a plan or pool's Market Value of Assets is less than the Actuarial Accrued Liability, the difference is the plan or pool's UAL. • Major components
• Service Costs
• Interest Costs
• Return on plan assets
• Amortization of Prior Service Cost
• Gains and Losses
4 Background
• Reserves set aside in the General Fund $5M
UAL balances per CALPERS projections (June 30, 2021) $45.1 M Current Discount Rate 6.8%
• Finance Commission (Meeting September 20, 2021)
Recommended transfer of reserve to CALPERS
Directed staff to identify which tiers of UAL to paydown Requested to identify more funds at year-end
Move money prior to the end of the calendar year
• City Council (Meeting December 14, 2021)
Directed staff to Paydown $5 million of UAL
5 Prior Actions 6
Original Benefit
2.7% at age 55
Council Action- Hired after December 31,
2011
2% at age 60
PEPRA Law- Hired after January 1, 2013
2% at age 62 (and pay 50% of normal
cost)
Safety Plan Misc. Plan
Original Benefit
3.0% at age 50
Council Action- Hired after December 31,
2011
3.0% at age 55
PEPRA Law- Hired after January 1, 2013
2.7% at age 62 (and pay 50% of
normal cost)
Staff Analysis
Current Status
UAL 24.7
Funding Ratio 68.4%
Interest paid overtime 17.97M
*Based on CALPERS provided workbook.
Safety Plan Misc. Plan
Current Status
UAL 20.4
Funding Ratio 68.5%
Interest paid overtime 15.67M
7 Post ADP paydown
After ADP paydown
$2.73M
New Funding ratio 73.1%
Savings over time 3.46M
*Based on CALPERS provided workbook.
Safety Plan Misc. Plan
After ADP paydown
$2.27M
New Funding ratio 73.1%
Savings over time 2.92M
8 Combined net savings
9 Annual Operating Budget Savings
Year FY21* FY 22 FY23 FY24 FY25 FY26 FY27 FY28 FY29 FY30 -46 Total Savings 5.00 (0.33) (0.34) (0.36) (0.37) (0.38) (0.39) (0.40) (0.42) (8.38) (6.38) Effect of Payments over time
10 Future Options
1. Set up a PERS Stabilization Internal service Fund
2. Adopt a policy for (annual discretionary payments)ADP
3. Setup a Section 115 Trust
Money set aside can only be used to pay pension costs
City in control of investment & strategy
Up to 2 years of Pension costs can be withdrawn
Returns have ranged from 3% to 10% annually depending on the strategy 11 QUESTIONS
12 OPEB Update
City of Los Altos
Council Retreat January 16, 2022
13 OPEB Valuation Report Summary
OPEB Actuarial Valuation Report by Bartel Associates, LLC Measurement Date 6/30/2019 6/30/2020
Total Participants (Active + Retiree's w/ Benefits + Retiree's w/o Benefits = Total) 132 + 49 + 75 = 256 132 + 49 + 75 = 256 Present Value of Benefits (PVB) $5,032,000 $5,032,000
Total OPEB Liability (TOL) $3,173,000 $3,607,820
Valuation Assets $1,789,000 $1,982,361
Net OPEB Liability (NOL) $1,384,000 $1,625,459
Funded Status 56% 55%
Actuarially Determined Contribution (ADC) $333,000 (fye 2020) $343,000 (fye 2021) Normal Cost $201,000 (fye 2020) $208,000 (fye 2021)
Amortization of Net OPEB Liability $132,000 (fye 2020) $135,000 (fye 2021) Projected Retiree Premiums (Pay-Go Cost) $82,000 (fye 2021) $92,000 (fye 2022) Implicit Rate Subsidy Credit $47,000 (fye 2021) $50,000 (fye 2022) CERBT Asset Allocation Strategy Strategy 1 Strategy 1
Discount Rate 6.75% 6.75%2
CERBT Account Summary
As of October 26, 2021 Strategy 1
Initial contribution (3/24/2016) $1,500,000
Additional contributions $0
Disbursements $0
CERBT expenses ($8,852)
Investment earnings $1,120,554
Total assets $2,611,702
Money-weighted annualized net rate of return (3/24/2016 – 10/26/2021 = 5.59 Years) 10.79% 3 Funded Status Comparison
Measurement Date Total OPEB Liability CERBT Assets Funded Status 6/30/2014 $4,394,000 $0 0%
6/30/2017 $3,097,000 $1,566,000 51%
6/30/2019 $3,173,000 $1,789,000 56%
6/30/2020 $3,607,820 $1,982,361 55%
2/20/2022* $3,607,820 $3,482,361 96.5%
* After Prefunding of $1.5M is complete 4
Pension Contribution Investment Tools
Portfolios CalPERS Pension
CalPERS 115
CEPPT Trust
Strategy 1
CalPERS 115
CEPPT Trust
Strategy 2
LAIF
Expected Return 6.8% 5.0% 4.0% ~1%
Risk 11.4% 8.2% 5.2% Lowest
Optimal Investment Time
Horizon Long-Term 2-10 Years 1-24 Months
Liquidity No Yes Yes
5 CERBT Portfolios
Portfolios CERBT
Strategy 1
CERBT
Strategy 2
CERBT
Strategy 3
Expected Return 7.59% 7.01% 6.22%
Risk 11.83% 9.24% 7.28%
6 QUESTIONS
7 Anthony Carnesecca, Economic Development Administrator June Du, Finance Manager
Manny Hernandez, Maintenance Services Director
Gabriel Engeland, City Manager
Special Revenue Funds,
Internal Service Funds,
and Restricted Funds
CIP, General Fund
CIP, General Fund
Current Fund Balance $11.5M
Current Obligations (FY 21-22) $13.5M
Unfunded Obligations (FY 21-22) ($2M)
Projected Obligations (5-Year CIP) $33.9M
Projected Obligations (5-Year CIP) ($21.8M)
2 Action Taken: The City
Manager will accurately budget
for the needs and known
expenditures capital projects.
The budget will include, when
applicable, special, restricted,
grant or other funding.
CIP, Non-General
Fund
CIP Non-General Fund
Current Fund Balance $11.1 Million
Current Obligations (FY 21-22) $6.0 Million
Projected Obligations (5-Year CIP) $20.4 Million
Projected Revenue (2-Year CIP) $12.7 Million
Projected Surplus $3.4 Million
3 Action Taken: The City
Manager will accurately budget
for the needs and known
expenditures capital projects.
The budget will include, when
applicable, special, restricted,
grant or other funding.
CIP, Combined
CIP, General Fund
Current Fund Balance $11.5M
Current Obligations (FY 21-22) $13.5M
Unfunded Obligations (FY 21-22) ($2M)
Projected Obligations (5-Year CIP) $33.9M
Projected Obligations (5-Year CIP) ($21.8M)
CIP Non-General Fund
Current Fund Balance $11.1 Million
Current Obligations (FY 21-22) $6.0 Million
Projected Obligations (5-Year CIP) $20.4 Million
Projected Revenue (2-Year CIP) $12.7 Million
Projected Surplus $3.4 Million4
Action Taken: The City
Manager will accurately budget
for the needs and known
expenditures capital projects.
The budget will include, when
applicable, special, restricted,
grant or other funding.
Benefit Funds
(Combined)
Action Taken: The City
Manager will accurately budget
for the needs and known
expenditures for the combined
funds referred to as benefits.
Fund balance drawdown and
deficit spending will have to be
eliminated in future budgets.
FY21/22 Fund Balance $2.3M
Revenue Expected $2.1M
Expenditures $3.7M
FY 22/23 Deficit $1.6M
Ending Fund Balance $740k
5 6
Summary of Changes: Accounting & Budgeting
Action Taken: The City Manager will
accurately budget for the needs and
known expenditures for the combined
funds referred to as Benefits.
Action Taken: Fund balance drawdown
and deficit spending will have to be
eliminated in future budgets.
PROJECTED GF ANNUAL
DEFICIT--BENEFITS $800K
Action Taken: The City Manager will
accurately budget for the needs and
known expenditures capital projects.
The budget will include, when
applicable, special, restricted, grant or
other funding.
PROJECTED GF ANNUAL
UNFUNDED CIP $5M
Technology Reserve
(General Fund)
Action Taken: The City
Manager will create internal
service funds to account for
technology needs. The
establishment of the ISF will be
funded by the transfer of the
fund balance of $300,000.
Current Fund Balance $1.1M
Current Obligations $800k
Projected Collections N/A
7 Equipment
Replacement Fund
Action Taken: The City
Manager will create internal
service funds to account for
Equipment Replacement and
Fleet needs. The negative Fund
balance will need to be
planned for.
Additional Presentation:
June Du, Finance Manager
Current Fund Balance $400k
Current Obligations $1.3M
Unfunded Obligations $900k
8 9
Summary of Changes: Establish ISF
Action Taken: The City Manager will
create internal service funds (ISF) to
account for Technology, Equipment
Replacement, and Fleet Needs.
Action Taken: Negative Fund Balance
will need to be planned for and
addressed in future budgets.
PROJECTED GF DEFICIT
(COMBINED) $600K
Park in Lieu Funds
POLICY QUESTION: Should the
City Council fund current
eligible expenditures from Park
in Lieu funds as opposed to the
General Fund?
Additional Presentation:
Manny Hernandez,
Maintenance Services Director
Current Fund Balance $5.8M
Current Obligations (5-Year CIP) $6.7M
Projected Collections (5 years) $10M
10 Downtown Parking
Fund
POLICY QUESTION: Should the City
Council designate the Downtown
Parking Fund as it was originally
intended (Downtown Maintenance
Fund) and broaden eligible
expenditures?
Additional Presentation:
Anthony Carnesecca,
Economic Development Administrator
Current Fund Balance $890k
Current Obligations $0
Projected Collections (5 years) $354k
11 Policy Decisions Park in Lieu
POLICY QUESTION: Should the City Council fund current eligible expenditures from Park in Lieu funds as opposed to the General Fund? Downtown Parking
POLICY QUESTION: Should the City Council designate the Downtown Parking Fund as it was originally intended (Downtown Maintenance Fund) and broaden eligible expenditures?
12 Thank You.
Next: 15 Minute Break
13 Finance
Equipment Replacement Fund
Overview
• City currently has 85 vehicles
and equipment in use.
Aging
• Of the 85 vehicles and equipment in use, 39% are less than 5 years, 30% are between 6 and 10 years, 19% are between 11 and 15 years, and 12% are more than 15 years.
Less than 5 Yrs
39%
6 Yrs to 10 Yrs
30%
11 Yrs to 15 Yrs
19%
More than 15
Yrs.
12%
Less than 5 Yrs
6 Yrs to 10 Yrs
11 Yrs to 15 Yrs
More than 15 Yrs.
Less than 5 Yrs,
1,531,950
6 Yrs to 10 Yrs,
1,579,000
11 Yrs to 15 Yrs,
694,000
More than 15
Yrs., 953,000
Replacement Value
Less than 5 Yrs
6 Yrs to 10 Yrs
11 Yrs to 15 Yrs
More than 15 Yrs.
More Than 15 Years Aging (10)
Active Vehicles &Equipment Year Make Model Useful Life Age Count Replacement Cost Aerial Lift Truck 2001 Ford F750/LRV55 7-10 Years 21 1 140,000 2004 Ford F-350 (Small) 7-10 Years 18 1 65,000
Chipper 1997 N/A Chipper 9-14 Years 25 1 25,000
Emergency Generator 1990 N/A Emergency Generator/ Corp Yard 20 Years 32 1 140,000 1991 N/A Emergency Generator/City Hall 20 Years 31 1 130,000 1998 N/A Emergency Generator/ PD 20 Years 24 1 150,000
Heavy Truck 2006 Ford F-450 7-10 Years 16 1 60,000
Light Truck/ Van 2006 Ford E-350 Club Wagon 7-10 Years 16 1 41,000 Tractor-Backhoe 2001 N/A Diesel powered tractor/backhoe 2000 case 580SL 13-18 Years 21 1 110,000 Tractor-Loader 2001 N/A
Diesel powered tractor/loader 2000 case 570 LXT Turbo w/ Gannon scraper 13-18 Years 21 1 92,000
Grand Total 10 $953,000
All the vehicles and equipment on this list are beyond their useful life and need to be replaced immediately.
More Than 15 Years Aging (10)
Department Active Vehicles &Equipment Year Description Useful Life Age Count Replacement Cost MSC Emergency Generator 1990 Emergency Generator/ Corp Yard 20 Years 32 1 140,000 1991 Emergency Generator/City Hall 20 Years 31 1 130,000 1998 Emergency Generator/ PD 20 Years 24 1 150,000
MSC Total 3 420,000
Parks Aerial Lift Truck 2001 F750/LRV55 7-10 Years 21 1 140,000 Chipper 1997 Chipper 9-14 Years 25 1 25,000
Light Truck/Van 2006 E-350 CLUB WAGON 7-10 Years 16 1 41,000 Parks Total 3 206,000
Streets Aerial Lift Truck 2004 F-350 7-10 Years 18 1 65,000 Tractor-Loader 2001
Diesel powered tractor/loader 2000
case 570 LXT Turbo w/ Gannon scraper 13-18 Years 21 1 92,000 Streets Total 2 157,000
Sewer Heavy Truck 2006 F-450 7-10 Years 16 1 60,000
Tractor-Backhoe 2001
Diesel powered tractor/backhoe
2000 case 580SL 13-18 Years 21 1 110,000
Sewer Total 2 170,000
Grand Total 10 $953,000
MSC $420K; Parks $206k, Streets $157k, and Sewer $170k. Total= $953k Aging Between 11 Years to 15 Years (16)
Active Vehicles
&Equipment Year Make Model Useful Life Age Count Replacement Cost Chipper 2010 N/A Chipper 9-14 Years 12 1 27,000
Heavy Truck 2007 Ford F-450 7-10 Years 15 1 60,000
2008 Ford F-350 7-10 Years 14 1 45,000
F-450 7-10 Years 14 1 60,000
F-550 7-10 Years 14 1 60,000
2009 Ford F-650 7-10 Years 13 1 80,000
Lawn Mower 2010 Tora Mower 9-14 Years 12 1 22,000
Light Truck 2008 Chevrolet Colorado 7-10 Years 14 1 33,000 Ford F-350 7-10 Years 14 2 90,000
2009 Ford F-350 7-10 Years 13 2 90,000
Ranger 7-10 Years 13 2 66,000
Motorcycles/Scooters 2009 BMW Motorcycle 7-10 Years 13 1 28,000 Passenger Car 2008 Ford Fusion 7-10 Years 14 1 33,000
Grand Total 16 $694,000
• 14 out of 16 Vehicles and Equipment
are beyond their useful life with a
replacement value of $645k.
• The Lawn Mower and Chipper need
to be replaced within the next two
years, the replacement cost is $49k.
Aging Between 6 Years to 10 Years (26)
Active Vehicles &Equipment Year Make Model Useful Life Age Count Replacement Cost Aerial Lift Truck 2016 Ford F-550 Powerstroke 7-10 Years 6 1 130,000 Heavy truck-Vac-Con unit 2012 Peterbilt Vac-Con 350LHA 7-10 Years 10 1 425,000 2016 Peterbilt PB348 7-10 Years 6 1 425,000
Light Truck 2016 Nissan Frontier S-Series 7-10 Years 6 3 75,000 Motorcycles/Scooters 2013 BMW R1200RTP 7-10 Years 9 2 77,000 T3 Motion N/A 7-10 Years 9 1 12,000
Passenger Car 2015 Ford Police Interceptor/Sedan 7-10 Years 7 2 78,000 Toyota Prius One 5dr Hatchback 7-10 Years 7 5 165,000
2016 Honda Accord (Black) 7-10 Years 6 1 29,000
Accord (White) 7-10 Years 6 1 36,000
Passenger Car- Patrol 2012 Dodge Charger 5-6 Years 10 1 29,000 Passenger Car-CSO 2016 Ford Explorer 7-10 Years 6 1 38,000 Radar Trailer 2015 Stalker SAM 7 3 30,000
2016 Stalker SAM 6 2 20,000
Waste Corp Water Trailer 2016 Waste Utility: WT-500 Series 525US 10-15 Years 6 1 10,000 Grand Total 26 $1,579,000
• 5 out of 26 Vehicles and
Equipment need to be
replaced in the next year
with a replacement
value of $543k.
Less Than 5 Years (33)
Active Vehicles &Equipment Year Make Model Useful Life Age Count Replacement Cost Crack Trailer 2019 CRACK Trailer 9-14 Years 3 1 65,000
Heavy Truck 2017 Ford F-550 Crew Cab 7-10 Years 5 1 35,000 2018 Ford F-350 Super cab 4x2 7-10 Years 4 2 101,000
2020 Chevrolet Silverado 3500 crew cab 7-10 Years 2 1 61,000 Silverado 3500 crew cab (diesel) 7-10 Years 2 1 43,000
Lawn Mower 2017 John Deere Mower model #Z997R 9-14 Years 5 1 17,500 Light Truck 2017 Ford F-250 7-10 Years 5 1 38,000
2018 Ford F-150 4x2 Super crew 7-10 Years 4 1 55,000
2019 Ford Ranger (P/U)
7-10 Years
3 1 38,000
2020 Chevrolet Silverado
7-10 Years
2 1 36,000
Ford Ranger
7-10 Years
2 1 30,000
2021 Ford Ranger
7-10 Years
1 1 30,450
Motorcycles/Scooters 2017 BMW R1200RTP
7-10 Years
5 1 33,000
2020 BMW R1250RTP
7-10 Years
2 1 37,000
2021 Ford Police Interceptor/SUV
7-10 Years
1 1 62,000
Less Than 5 Years (continued)
Active Vehicles &Equipment Year Make Model Useful Life Age Count Replacement Cost Passenger Car 2017 Dodge Grand Caravan 4d Wagon SE Plus 7-10 Years 5 1 30,000 Ford Edge 7-10 Years 5 1 31,000
Explorer 7-10 Years 5 1 36,000
2019 Ford Fusion Energy 7-10 Years 3 1 36,000
2021 Ford Police Interceptor/Explorer 7-10 Years 1 1 45,000 Police Interceptor/SUV 7-10 Years 1 1 63,000
Passenger Car- Patrol 2018 Ford Police Interceptor/Explorer 5 -6 Years 4 1 55,000 Police Interceptor/SUV 5 -6 Years 4 2 110,000
2019 Chevrolet Tahoe 5 -6 Years 3 1 75,000
Ford Police Interceptor/Explorer 5 -6 Years 3 2 115,000 2020 Chevrolet Tahoe 5 -6 Years 2 1 74,000
Ford Police Interceptor/SUV 5 -6 Years 2 1 62,000
2021 Ford Police Interceptor/SUV 5 -6 Years 1 1 62,000
Police Trailer 2017 CARGO MATE 6x10 Utility trailer (ORCH610SA) N/A 5 1 4,000 Utility Truck 2019 Ford F550 7-10 Years 3 1 80,000
Utility Van 2021 Ford Transit Van 7-10 Years 1 1 34,000 Grand Total 33 $1,531,950
FY21/22 & 22/23 Budget
Beginning Fund Balance 7/1/2021 $389,459
Ending Fund Balance 6/30/2023 ($904,873)
Need Immediate Replacement ( Beyond useful life) (1,627,000) Need to Be Replaced Next Year (918,000)
Budgeted in FY21-23 Remaining 415,000
Funding shortfall for equipment replacement at 6/30/2023 ($3,034,873) Conclusion
• Equipment Replacement Fund audited FY21 year-end balance is $389,459.
The existing commitment for FY22 & FY23 is $1.29 million after which there is a budget deficit is $904k.
• The city has approximately $953k vehicles and equipment over 15 years old.
• Seven major pieces of equipment are more than 20 years old and need immediate attention for safety and efficiency. ($787k)
• Of the above seven, two of the three generators are over 30 years old ($270k). Generators usually have 20 years life span.
• Over $3 Million of replacement funds are needed by June 2023.
Questions?
Anthony Carnesecca
Economic Development Administrator
Los Altos
Downtown
Parking Fund
What is the Los Altos Downtown Parking
Fund?
• Established in 2003 by City Council along with the Downtown Employee Parking Permit Program
• Collects money from annual and quarterly parking permit sales • Two major goals
• Cover the ongoing operating costs
• Address Downtown’s maintenance needs
1/18/2022 2
Fund Balance
• Current Fund Balance: $890,000
• Current Obligations (2 years): None
• Projected Collections (5 years): $353,500
1/18/2022 3
Policy Statement
• City staff plan to utilize the funds to improve business and visitor access and attraction to the downtown.
• These funds will help our current businesses succeed while trying to attract new businesses to our community.
1/18/2022 4
Potential Uses
• Downtown WiFi
• Upgrade or repair parking plazas
• Improve lighting in parking plazas
• Increase wayfinding signage
• Improve electrical outlets for tree lights
• Distribute small business grants
• Beautification
• Events
• Explore the establishment of a Business Improvement District 1/18/2022 5
Policy Question
• Should the City Council designate the Downtown Parking Fund as it was originally intended (Downtown Maintenance Fund) and broaden eligible expenditures?
1/18/2022 6
Manny Hernandez
Maintenance Services Director
Los Altos Park
Equipment
Costs
Playground Replacement Costs
1/18/2022 2
Replacement Year Park (Year Installed) ADA Surface
Installation
Playground Structure
Replacement
Expected Replacement
Cost
Past Replacement Life Shoup (2004) $300,000 $600,000 $900,000 Past Replacement Life Marymeade (2007) $179,000 $300,000 $479,000 McKenzie (2007) $231,000 $400,000 $631,000
Past Replacement Life Grant (2008) $170,000 $300,000 $470,000 Montclaire (2008) $150,000 $250,000 $400,000
Heritage Oaks (2008) $ 92,000 $200,000 $292,000
Past Replacement Life Rosita (2011) $132,000 $200,000 $332,000 Unscheduled (28/29) Los Altos Youth Center (2018) $117,000 $200,000 $317,000 San Antonio Club (2018) $63,000 $ 150,000 $213,000
Total $1,434,000 $2,600,000 $4,034,000
Budgeted Amount $620,000
Percent Budgeted 15.4%
Playground Annual Operating Costs (Grant)
1/18/2022 3
Estimated Annual Cost Grant Park
Supplies PG&E Water
General
Maintenance
Maint, Equip, &
Replacement TOTALS
MP Building, Activity
Rooms, Restrooms $ 49,550 $ 8,000 $ 32,000 $ 22,000 $ 20,000 $ 131,550 Sports Field $ 2,000 N/A N/A $ 15,000 $ 25,000 $ 42,000 Basketball Court $ 100 N/A N/A $ 5,000 $ 4,000 $ 9,100
Playground $ 2,000 N/A N/A $ 5,000 $ 31,000 $ 38,000
Landscape $ 200 N/A N/A $ 15,000 $ 1,000 $ 16,200
Hardscape/
Furniture/Fence $ 500 N/A N/A $ 10,000 $ 5,500 $ 16,000 TOTALS $ 54,350 $ 8,000 $ 32,000 $ 72,000 $ 86,500 $ 252,850 Playground Annual Operating Costs (Rosita)
1/18/2022 4
Estimated Annual Cost Rosita
Supplies PG&E Water
General
Maintenance
Maint, Equip, &
Replacement TOTALS
Snack Shack Building $ 900 $ 1,400 $ 58,500 $ 5,200 $ 3,500 $ 69,500 Sports Field $ 3,000 N/A N/A $ 15,600 $ 37,500 $ 56,100 Tennis Courts $ 500 N/A N/A $ 5,200 $ 6,000 $ 11,700
Playground/ Exercise
equipment $ 2,000 N/A N/A $ 5,200 $ 22,000 $ 29,200
Landscape $ 200 N/A N/A $ 15,600 $ 1,000 $ 16,800
Hardscape/ Furniture/
Fencing $ 500 N/A N/A $ 5,200 $ 5,500 $ 11,200
TOTALS $ 7,100 $ 1,400 $ 58,500 $ 52,000 $ 75,500 $ 194,500 Policy Question
• Should the City Council Should the City Council fund current eligible expenditures from Park in Lieu funds as opposed to the General Fund?
1/18/2022 5
Irene Barragan Silipin, Human Resources Manager
Scott Gerdes, Human Resources Analyst
Employee
Recruitment
and Retention
Objective
Implementation of a compensation philosophy
outlining the goals and vision for personnel
retention and attraction in Los Altos.
Introduction
• Global Labor Challenges Today
• Current State of City of Los Altos Workforce
• Workforce Realignment Considerations
• Compensation Philosophy Implementation
While organizational objectives outline
what you want to get done,
culture defines how you get it done.
Global Labor Challenges Today
• Great Resignation – “The Resignation Tsunami” • 41% of U.S. workers resigning within the next 6 months. • 39% of a survey indicated resignations happening without a new job in hand • 70% of U.S. workers claim to now work on longer hours and weekends • Labor Shortage
• Unemployment Rates at 3.9%
• 30% of U.S. workers actively job hunting
• Talent Exodus
• Employee’s Market
• War of Talent
• Draining of the talent pool
City of Los Altos Employee Workforce
Total FTEs: 123
Total PT: 42
Combined: 165
Engineering Services, 11
Police, 45
Finance, 5 Legislative & Executive, 11
Community Development, 12
Maintenance Services, 29
Recreation & Community Services, 10
City of Los Altos FTE Snapshot
Employee Average Years of Service
0 10
20 30
40 50
60 70
15 - 19 Years of 20+ Years of Service
Service
10 - 14 Years of
Service
0 - 5 Years of Service 5 - 9 Years of Service
15 8 16 21
63 City of Los Altos
FTE Years of Service
Employee Average Years of Service
Example
0 1
2 3
4 5
6 7
8 15 - 19 Years of 20+ Years of Service
Service
10 - 14 Years of
Service
0 - 5 Years of Service 5 - 9 Years of Service
0 0
2 1
8 Engineering Services Department
FTE Years of Service
Current Total Compensation Overview
• Total Compensation Market Comparison
• Under-market in the Overall Salary and Benefits
• Vacation Accrual
• Retiree Medical
• Observed Holidays
• Learning and Development Program
• Educational Assistance Program
• Example
• Observed Holidays and Holiday Closure
The Great Realignment
If we want to be competitive, we must
start with investing in the individuals
that are already part of our workforce.
Workforce Realignment Considerations
• Invest in Our Workforce
• Blend of personal and work life
• Flexibility
• Hybrid Work Schedules
• Talent War
• Prioritize Internal Promotions
• Employee Professional Development
• Offer Perks that Matter
Workforce Realignment Considerations
• Enhance Total Compensation Benefits Package
• Increase Observed Holidays
• Juneteenth, Indigenous People’s Day, Cesar Chavez, Holiday Closure, Floating Holidays • Professional Development/Higher Education Paid Program • Pay for Performance
• Cash-outs
• Vacation and Management Leave
• Wellness Program
Compensation Philosophy
What is a compensation philosophy?
• Formal statement documenting our agencies position about employee compensation and benefits
Compensation Philosophy Importance:
• Provides valuable input and direction.
• Explains the “why” behind employee pay, benefits and creates a framework for consistency.
• Assists with attracting, retaining and motivating employees. • Defines how we plan to pay and reward competitively, based on market conditions, competition and ability to pay.
Conclusion
• Establish a compensation philosophy
• City Staff will develop compensation and benefits package that align with adopted philosophy.
Thank You
Questions?
Police Facility Subcommittee Report to City Council
January 18, 2022
The subcommittee recommends that the Council direct staff to place a bond measure on the November, 2022 ballot. We explored three types of Bond Measures to finance a new police facility:
1. Citizens’ Initiative (requires a majority vote of residents to pass)
2. General Tax (also requires a majority vote)
3. Special Tax (requires a two-thirds vote)
The ballot Measure would either raise an existing tax or create a new one as the source of revenue.
A citizens’ initiative is a Bond Measure placed on the ballot by non-government parties. Although recent court decisions have confirmed that a citizens’ initiative may be approved with a simple majority vote, the subcommittee recommends against this approach due to:
• Potential legal risk (e.g., a challenge if approved by >50% but less than 66.6% of voters) • Process and timelines to qualify the initiative for the ballot (must obtain signatures from 10% of registered Los Altos voters)
• Council and Staff could play no role in helping the process move forward, leaving the city without any input on the measure.
The subcommittee recommends Council consider proposing either a General Tax or a Special Tax, key differences are summarized in the table:
Source: 2016 League of California Cities
(http://www.californiacityfinance.com/WCCaCityRevenuePrimer1612.pdf) In addition, the subcommittee is exploring the scope of the facilities the Council ought to consider improving with the proceeds from the Bond Measure. Most narrowly we could target funding a police facility only (with or without IT), or more broadly include public safety infrastructure (police and fire), or even more broadly include a library (Campbell passed a Bond Measure for Police and Library in 2018, see below). Generally, the larger the financial ask of the voters, the lower the likelihood of achieving voter approval, especially the two-thirds majority required for a Special Tax. On the other hand, expanding the scope of intended investment might attract more constituencies to support the Bond Measure.
As a recent, local example, a bond issue to fund police facilities and a library meeting fire and earthquake codes was on the ballot for Campbell voters in November 2018. It was put on the ballot by the Campbell City Council on June 19, 2018. The Measure asked voters to authorize the city to issue up to $50 million in bonds at an estimated tax rate of $0.019 per $100 in assessed value to fund an emergency police operations center, police station updates, and a library meeting fire and earthquake codes. It required a two-thirds majority to pass and it was approved 69.6% to 30.4%.
Moving forward, we would need to work with an investment banker and bond counsel to facilitate the process; their compensation is based on the Measure passing. The City Manager facilitated a meeting between the subcommittee and Stifel Financial Advisors to understand the investment banker’s role.
Regarding the timeline, the deadline to submit a Measure to the Registrar of Voters is August 12, 2022.
Other options the subcommittee explored but do not recommend that the council consider are:
• Borrowing from an institutional lender. While a commercial loan does not need voter approval, the City would be obligated to put up collateral. Moreover, interest rates for a commercial loan are higher than for a bond, making this option the most expensive. • Do nothing. The subcommittee trusts that the Council agrees that this is not an acceptable option, as the problems with the existing police facility are well known.
The subcommittee seeks the following direction from the Council:
• Confirmation that the subcommittee should explore only a Council-proposed ballot measure (general tax or specific tax)?
• Does Council agree with the Subcommittee that we should continue to explore the size and scope (Police/Public Safety/Library) of a bond measure with outside experts or would the Council prefer to determine the scope of a measure now? • Does Council agree that the subcommittee should start working with appropriate outside advisors (investment bankers, bond counsel, etc.) to identify the best options to place before the voters?
• Approval from Council to work with staff to identify the best sources of revenue to finance the bond measure.
Manny Hernandez, Facilities Director
Gabriel Engeland, City Manager
Prioritization
of City-Owned
Facilitates
City-Owned
Facilities,
Priorities
The City must continually invest in public
safety, public works, parks and recreation,
and personnel.
2 How Were
Assets
Organized?
Urgency
Low
Medium
High
Resource Use
Low ($2M or less)
Medium( $2M-$5M)
High ($5M+)
Potential Schedule
Immediate (FY 22/23)
Near-Term (5 Year CIP)
Future (Unscheduled)
3 Timing:
Immediate
Facility Urgency Resource Use Timing
Caretaker House High Low Immediate
Halsey House High Low Immediate
Fire Station Almond High Medium Immediate
LAYC/City Hall High Low Immediate
Park/ADA High Low Immediate
Police Facility High High Immediate
4 Timing:
5-Year-CIP
Facility Urgency Resource Use Timing
Bus Barn Theater Medium Unknown 5-Year CIP
Fire Station Loyola Medium Medium 5-Year CIP
Garden House Low Medium 5-Year CIP
Grant Park Senior Ctr High Medium 5-Year CIP
MSC Low Low 5-Year CIP
5 Timing:
Unscheduled
6 Facility Urgency Resource Use Timing
999 Fremont Low High Unscheduled
Underground Facilities Low Low Unscheduled
Action
Requested
The City Council is not being asked to prioritize specific facilities or assets within the given listed timeframe, but instead determine which projects should be categorized
within each timeframe area (Immediate, 5-Year CIP,
Unscheduled).
Once the projects are categorized appropriately, the City Council will be able to prioritize specific projects as part of the normal budget process.
7 Action
Requested
Does the City Council agree with timing of
the projects listed?
• If yes, Staff will plan accordingly in future budget years. • If no, what changes should be made to the timing and/or priority of these facilities?
8 Laura Simpson, Interim Planning Director
Steve Golden, Interim Planning Services Manager
Development
Services Cost
Recovery
through Master
Fee Updates
Planning Fees for Development Permits
• Currently, Planning charges a flat fee for processing depending upon the type of development.
• Because the development review process requires a substantial number of committees and hearings—e.g. Complete Streets, Historic, Design Review, Planning Commission, and Council, staff time spent on specific developments is not fully recovered through the flat fee structure. • Staff time varies by project, based upon complexity, size, etc. Some projects may return to a single commission several times.
Recovering Costs Above Flat Fees
• If a development project requires additional time, staff review, or public hearings, staff can track the hours and bill the developer monthly for the actual hours worked on the project.
• Staff costs include salary and benefits, which can be calculated on an hourly basis based upon position, e.g. senior planner or associate planner.
• This will allow the City to recover costs for a significant portion of planning work that is associated with private development that exceeds flat fee amounts.
General Plan Fee
• Currently, there is no fee collected that associated with General Plan Maintenance and Implementation
• Most cities have established a fee collected as a percentage of building permit fee or construction valuation
• A General Plan Maintenance Fee would be used for General Plan Update, City Initiated GP Element Amendments, and Code
Amendments to Implement General Plan
Costs Not Recoverable
• Planning costs include unfunded state mandates, such as SB9, SB330 and others.
• Planning also handles questions from residents in the pre-submittal phase which is not cost recoverable.
• Permit Center counter is open 7:30-4:30 Monday through Thursday and by virtual appointment on Fridays. Most of this time is not billable or recoverable.
Benefits of Cost Recovery
• City is reflecting actual time worked on private development and not subsidizing private sector.
• Fees will be used to assure appropriate staffing levels are achieved when building development cycles are higher or lower.
• A General Plan fee, if approved, could be used for future Long Range Planning for the General Plan update.
Fee Recommendations
1. Include an hourly rate for planning in the fee schedule, based upon the 2019 cost allocation study, to allow planners to track actual time and recover staff costs associated with private development, when it accrues above and beyond the flat fee amount, particularly for large, time intensive projects.
2. Include a 1% of building permit valuation fee for General Plan update.
Funds collected will support the expense of the update. Next General Plan update is imminent.
3. These updates can be incorporated in the Master Fee Schedule update in February.
Affordable Housing Fees
Why Impose Housing Fees?
• To create an affordable housing trust fund to subsidize housing at low- and very low-income levels
• To leverage state and federal funds, as discussed later in the presentation
Types of Fees
• Impact Fees: These are fees imposed on market-rate
units, which are calculated based upon the need for
affordable housing created through the production of
market-rate units.
• In-lieu Fees: These are fees paid as an alternative to constructing affordable units to comply with an
inclusionary ordinance.
Types of Fees (Cont’d)
• It may be difficult to show a nexus between the production of market-rate units and the need for affordable units.
• California Building Industry Assn. v. San Jose: California Supreme Court approved in-lieu fees without proving a nexus • Some agencies also do a nexus study before imposing in-lieu fees.
Notes About Establishing In-lieu fees
• It is recommended to conduct a feasibility study to ensure inlieu fees are reasonable. • Some agencies set in-lieu fees intentionally low (i.e., less than the cost to construct the inclusionary units onsite). This is to prioritize payment of fees.
Why Some Cities Prioritize Inclusionary
• Inclusionary housing result in units on the ground now, not later.
• Inclusionary housing integrates people at all income levels. • Inclusionary housing policies generate affordable for-sale opportunities. Fees are almost always used to generate rental housing.
Why Some Cities Prioritize Fees
• Fees have the potential to generate more overall affordable units in the long-term.
• Fees generate more rental housing opportunities.
• Local subsidies leverage state and federal funds.
• Local agencies have more discretion over projects as lenders than as planning agencies.
Leveraging Federal and State Funds
• Most affordable housing is constructed using a combination of federal tax credit financing and loans.
• These sources cover most, but rarely all, the costs of constructing projects. The additional funding needed is called “gap funding.”
• Local agency housing trust funds are one source of gap funding. • The availability of local gap funding is a criterion used to allocate competitive (9%) tax credits, loans funded through tax exempt bonds, and state gap funding sources.
Notice of Funding Availability (NOFA)
• What does a city do once it has money in its housing trust fund?
• Start by issuing a NOFA.
• A NOFA invites developers to submit proposals for funding.
The agency ranks the choices and funds the best projects.
Grants or Loans
• Loans are more typical because:
• Loans allow affordable developers to choose whether their projects will be prevailing wage projects.
• Loans create more financial incentive for “follow through.” • Repaid loan funds go back to the housing trust fund to pay for future projects.
Residual Receipts Loans
• A common loan structure is a “residual receipts loan.” • Residual receipts are project revenues minus expenses, including debt service on superior financing.
• Rather than requiring a set repayment amount each year, a city might require, for example, that 50% of residual receipts be paid back to the city, with the balance due in 55 years. • Interest is commonly charged, although at a below-market or nominal rate, or sometimes only if the borrower is in default.
Pre-Development Loans
• The riskiest stage of a project at which to lend funds is the predevelopment stage. • Risk at this stage can be minimized, but it cannot be avoided. • Because it can be difficult to obtain financing at this stage, small pre-development loans can be helpful in ensuring that projects materialize.
• For this reason, it is common for city funds to be awarded in the form of pre-development loans.
Questions
Thank You. Next: Wrap-Up
9 Recap
Anita Enander, Mayor
IF YOU DON’T KNOW WHERE
YOU’RE GOING, ANY PATH
WILL TAKE YOU THERE. With apologies to Lewis Carroll
1 FY 20-21 – $4 Million Oops
! Fortunately, CARES/ARPA compensated (we had
planned for these funds)
! Fortunately, property tax and sales tax were above
conservative estimates
! Short $2M for planned CIP
! We are below our 20% Reserve by ~$600K
! A balanced budget is not always a good budget if it
does not include essential expenses
2 FY 21-22
! Will know in a month
! Early indicators we will be ok, thanks to more CARES/ARPA $ and continuing increase in property tax
! As with FY 20-21, some essential expenses were not included 3 Long Term
! Need to budget for pension, fleet, and facilities costs ! Backlog of these expenses
We need a plan to get out of this hole
4 Annual Backlog Requirement
Community Center $ 622,090
UAL 3-4,000,000
Fleet 1,000,000
CIP 4,500,000
Additional upward pressure on salaries and benefits
City CIP funds needed to get certain tax and matching revenue In good years: $3-5 Million (general revenue minus operational expenses) available for other expenses. Not $ 8-10 Million, as above. 5 Looking Forward
! New financial staff is highly competent and has tools to do the job ! Council must be disciplined in our budgeting
! City Manager and E-staff – new / cost-effective ways of doing business ! Excellence in execution
6 Staff Resources
! Establish policies that will allow us to recruit and retain the highly competent staff needed to deliver services our residents expect ! Support City Manager as he rebuilds the staff – make decisions and follow-through
7 Integrating Other Priorities
! Calendar 2021 priorities were: Housing, Land Use, Fiscal Sustainability, Community Safety, Asset Management, Environmental Sustainability, Community Engagement, and Transitioning Through Change. ! How would Council like to revisit and integrate other priorities into the Calendar year 2022 and FY 2022-23 budget planning?
8 Maintaining Discipline
! For the next 2-5 years, we must pursue these objectives and not become distracted.
9 PUBLIC CORRESPONDENCE
The following is public correspondence received by the City Clerk’s Office after the posting of the original agenda. Individual contact information has been redacted for privacy. This may not be a comprehensive collection of the public correspondence, but staff makes its best effort to include all correspondence received to date.
To send correspondence to the City Council, on matters listed on the agenda please email [email protected]
From: Bill Hough
To: City Council; Public Comment
Cc: Andrea Chelemengos
Subject: [External Sender]Public Comment of Agenda Item 1 for January 18, 2022 Date: Monday, January 17, 2022 3:53:40 PM
Regarding this policy question regarding the Downtown Parking Fund: “Should the City Council designate the Downtown Parking Fund as it was originally intended (Downtown Maintenance Fund) and broaden eligible expenditures?”
This is an empathetic NO! “Small business grants, downtown wi-fi, beautification, events, and other items that improve the quality of life for residents” might be “nice to have” things, but at the moment they need to be set aside, given all the pressing demands on the city’s budget. The items listed above should be privately funded, assuming that they should be funded at all.
Keep the Downtown Parking Fund narrowly focused. Going forward, the City should charge rent to restaurants that continue to use street space for dining.
Regarding the question of “Should the City Council fund current eligible expenditures from Park in Lieu funds as opposed to the General Fund?,” the answer is another “yes” because we do not want to spread the general fund too thin.
Bill Hough
Los Altos
From: Joe Beninato
To: Public Comment
Subject: Public Comment - Special City Council Meeting January 18, 2022 Date: Tuesday, January 18, 2022 1:23:47 PM
Hello City Council, City Manager and Staff,
Since I suspect we will have limited time to speak today, I decided to submit my prepared comments via email as well in the hopes that you will see it at some point soon.
I reviewed the meeting materials this weekend, and have to admit I am very concerned about the state of Los Altos right now. From budget shortfalls to unfunded pension obligations to crumbling infrastructure to the taxpayer dollars wasted on unnecessary lawsuits and bad computer software…we’ve obviously got some challenges to tackle.
Without getting into the blame game, I think it’s important to focus on 3 things:
• We need to understand how we got here, so we can avoid more issues like this moving forward.
• We need to understand where we are now.
• We need to have short, medium and long term plans for how to prioritize what matters and fix it.
I commend City Manager Engeland and his staff for identifying these issues for the City Council. I have a few observations that tell me we have our work cut out for us.
Public safety is always top of mind for any city. For us to be in the situation we are in with the police station and to a lesser extent the Almond fire station is unacceptable. Chief Galea and his team put their life on the line every day, and we have decided that having them work in a building that floods with bad wifi and people working out of trailers is OK? It is time for us to stop paying lip service to how important our first responders are, and step up to provide them with not just adequate facilities, but excellent facilities.
One glaring issue in the materials is the turnover rate and morale of the city staff. Again, this is unacceptable. The current staff works incredibly hard to keep up with their limited resources. I think City Manager Engeland was a great hire, and the council now needs to give him the resources and space he needs to add great hires to the team and manage the city. You need to trust the staff and not micromanage them. While we are a small city, we have high expectations for our city services, and we need to match the budget to our high expectations.
Finally, I am very concerned that our infrastructure is in poor condition. I know for a fact that the street I live on has not been resurfaced in at least 15 years, which is as far back as my neighbors and I can remember. While I’d love to have our potholes fixed and our street resurfaced once in a while, it points to a bigger problem that we are not investing in maintaining our infrastructure properly. There should be a minimum expectation that our streets aren’t riddled with potholes, our electricity, water, sewers, Internet and cellular serices work properly, and we’re budgeting appropriately to ensure we don’t have issues in the future.
Thank you for your consideration of these issues.
Joe
…………………………
Joe Beninato
From: Pat Marriot
To: Public Comment
Subject: PUBLIC COMMENT AGENDA ITEM C - January 22, 2022 CITY PROPERTY & FACILITIES Date: Tuesday, January 18, 2022 3:23:56 PM
Council Members:
Just say NO. We don’t have enough city property that we can afford to donate it or rent/lease at low rates to any non-city group that asks.
We already have an issue with Friends of the Library who had an agreement to vacate the civic center, but then asked for more time.
Which worthy groups are entitled to pubic land? Who gets priority? To avoid problems, just make it a hard and fast rule that city property and city facilities are for city uses.
Thank you,
Pat Marriott
From: Pat Marriot
To: Public Comment
Subject: PUBLIC COMMENT AGENDA ITEM E - January 22, 2022 TREE PROTECTION Date: Tuesday, January 18, 2022 3:41:43 PM
Attachments: image003.png
Council Members,
As we add more and denser housing to the city, it will be difficult to keep and maintain our tree canopy, which is one of the things that makes Los Altos special – and contributes to a healthy environment.
An environmental consultant for Los Angeles found major problems with that city’s urban forest. Recommendations were made for “Urban Forest General Plan Element,” which might be over the top, but could be considered. In any case these suggestions were proposed for an Urban Forest Plan:
·Tree selection should emphasize native species because they have evolved to tolerate historical variations in local temperature and rainfall, including heat waves and droughts.
·Tree planting must be followed by watering until trees are fully established, plus trees must be pruned in perpetuity.
Tree planting and maintenance must be properly funded. Comparable cities [to Los Angeles] devote 1 percent of their municipal budget to the urban forest.
The implementation must ensure equitable outcomes for all neighborhoods.
City departments that deal with urban forest issues, whether in public areas or on private parcels, must synchronize their operations.
To assure the proper implementation, policies and programs must be carefully monitored.
See: https://www.citywatchla.com/index.php/cw/los-angeles/23553-la-has-ignored-its-urbanforest-who-will-pay-the-price-for-this-negligence Pat Marriott
SPECIAL CITY COUNCIL MEETING
COUNCIL RETREAT
Please Note: Per California Executive Order N-29-20, the City Council will meet via Telephone/Video Conference only.
TUESDAY, JANUARY 18, 2022 4:00 P.M.
Members of the Public may join and participate in the Council meeting at https://webinar.ringcentral.com/j/1491560741
And
SATURDAY, JANUARY 22, 2022 9:00 A.M.
Members of the Public may join and participate in the Council meeting at https://webinar.ringcentral.com/j/1463239852
TO COMMENT DURING THE MEETING members of the public will need to join the meeting using the above link and have a working microphone on their device. To request to speak please use the “Raise hand” feature located at the bottom of the screen. Public testimony will be taken at the direction of the Mayor and members of the public may only comment during times allotted for public comments.
TO LISTEN to the City Council Meeting, members of the public may call 1-650-242-4929 (Meeting ID: 1491560741 for Tuesday meeting and 1463239852 for Saturday meeting). Please note that members of the public who call in using the telephone number will NOT be able to provide public comments.
TO SUBMIT WRITTEN COMMENTS, prior to the meeting, on matters listed on the agenda email [email protected] with the subject line in the following format:
PUBLIC COMMENT AGENDA ITEM ## - MEETING DATE.
Correspondence must be received by NOON the day BEFORE of the meeting to ensure it can be distributed prior to the meeting. Emails received prior to the meeting will be included in the public record.
ESTABLISH QUORUM
PLEDGE OF ALLEGIANCE
OPEN RETREAT AND REVIEW PROCESS – City Manager
DISCUSSION ITEMS: It is anticipated that the Council will discuss topics 1-3 on Tuesday, January 18, 2022 and topics 4 and 5 on Saturday January 22, 2022. However any unfinished topics from Tuesday, January 18, 2022 may continue to Saturday, January 22, 2022.
SEE AGENDA ATTACHMENT for detailed description of Agenda Items 1-5 (below)
1. Understanding our Budget and Financial Circumstances
2. Employee Recruitment and Retention
3. Maintenance and Improvement of City Facilities
PUBLIC COMMENTS ON ITEMS ON THE AGENDA
According to State Law (also known as “the Brown Act”), public comments at Special Meetings of the City Council are limited to those items on the agenda.
CLOSING COMENTS – City Manager Wrap Up
ADJOURNMENT TO:
SATURDAY, JANUARY 22, 2022 9:00 A.M.
Members of the Public may join and participate in the Council meeting at https://webinar.ringcentral.com/j/1463239852
ESTABLISH QUORUM
PLEDGE OF ALLEGIANCE
PUBLIC COMMENTS ON ITEMS ON THE AGENDA
According to State Law (also known as “the Brown Act”), public comments at Special Meetings of the City Council are limited to those items on the agenda.
DISCUSSION ITEMS:(Continuation of discussion from January 18, 2022) It is anticipated that the Council will discuss topics 1-3 (listed above) on Tuesday, January 18, 2022 and topics 4 and 5 on Saturday January 22, 2022. However any unfinished topics from Tuesday, January 18, 2022 may continue to Saturday, January 22, 2022.
4. Council Policy Decisions
5. Remaining Decisions: Discuss and provide direction, decide, or agree to a future date for all items deferred during the meeting or topics that came up during conversation for later discussion.
CLOSING COMENTS – City Manager Wrap Up
ADJOURN
SPECIAL NOTICES TO THE PUBLIC
In compliance with the Americans with Disabilities Act, the City of Los Altos will make reasonable arrangements to ensure accessibility to this meeting. If you need special assistance to participate in this meeting, please contact the City Clerk 72 hours prior to the meeting at (650) 947-2720.
Agendas, Staff Reports and some associated documents for City Council items may be viewed on the Internet at http://www.losaltosca.gov/citycouncil/online/index.html..
All public records relating to an open session item on this agenda, which are not exempt from disclosure pursuant to the California Public Records Act, and that are distributed to a majority of the legislative body, will be available for public inspection at the Office of the City Clerk’s Office, City of Los Altos, located at One North San Antonio Road, Los Altos, California at the same time that the public records are distributed or made available to the legislative body.
If you wish to provide written materials please provide the City Clerk with 10 copies of any document that you
AGENDA ATTACHMENT
CITY COUNCIL MEETINGS
January 18, 2022 and January 22, 2022
1 | 13
Day 1: January 18th
Introduction: 4:00-4:15
Call to Order
Opening Presentation, Gabe Engeland
AGENDA ATTACHMENT
CITY COUNCIL MEETINGS
January 18, 2022 and January 22, 2022
2 | 13
Part 1: Understanding our Budget and Financial Circumstances (4:15-5:50) A. Annual Comprehensive Financial Report Fiscal Year 2020-21 (Requested by City Council, John Furtado)
Description: The City of Los Altos received an unmodified opinion on the 2020-21 Annual Comprehensive Financial Report (ACFR). This presentation will provide a high-level overview of how the City ended the fiscal year financially. The presentation will highlight revenues and expenditures, overview the current General Fund balances (reserved and unreserved), and show significant or important changes and corrections that were made in the previous fiscal year.
Action Requested: None. This is a presentation only. The ACFR was presented to the Financial Commission on December 20, 2021 and will be presented to the City Council on January 25, 2022.
B. Topic: Budget Overview (Requested by City Council, John Furtado) Description: The City of Los Altos needs to modernize its budget practices, including how positions are allocated, the charging of personnel to appropriate Funds, the establishment and utilization of Internal Service Funds, strategic utilization of restricted funds or special revenue funds, and a rationale policy for CIP funding. This presentation will provide a comprehensive understanding of how the Los Altos budget works currently and areas that will be improved, updated, and changed moving forward.
Action Requested: None. The following changes have been authorized by the City Manager: Beginning with the next budget cycle, the City will practice a zero-based budget, develop and utilize internal service funds, and create and implement proper cost allocation models. Additionally, the City will budget for known obligations in current and future budgets and make it transparent when fund balances are being reduced to pay for on-going costs.
Policy Question(s): None. Policy questions are included in presentations occurring later in the meeting.
C. Topic: CalPERS & OPEB Funding (John Furtado)
Description: The City of Los Altos pension programs for Safely and Miscellaneous are currently funded at an average of 68.5% (31.5% remains unfunded). Prior to the $5M pre-payment of CalPERS obligations in 01/2022, the City had not been making adequate payments to responsibly fund the pension system. As an example, after making the minimum payment to CalPERS in the previous fiscal year, the City’s pension liability on the ACFR increased by more than $3.2M in the current fiscal year.
This presentation will provide an overview of pension obligations, unfunded accrued liability (UAL), and provide an explanation of the City’s various retirement plans. The overview will include options for annual Additional Discretionary Payments (ADP), the term used by CalPERS to identify payments made in excess of the minimum required amount, as well as the potential to establish a 115 plan.
POLICY QUESTION: Does the City Council wish to authorize the use of ADPs on an annual basis to reduce the long-term liability of its pension plans with CalPERS? POLICY QUESTION: Does the Council wish to receive additional information on the potential creation of a 115 plan?
AGENDA ATTACHMENT
CITY COUNCIL MEETINGS
January 18, 2022 and January 22, 2022
3 | 13
D. Topic: Special Revenue Funds, Internal Service Funds, and Restricted Funds (Gabe Engeland) Description: The City collects revenue in 17 Special Revenues Funds and 1 Restricted Fund. The use of these Funds islimited to what is legally allowable based on State law and/or how the fund was established.
Historically, the City has not utilized these funds to their potential, and instead funded items through the General Fund first, reducing funds available for expenditure on general government needs, including maintenance of assets and city facilities and investments in personnel and parks. The outcome is downward pressure on the General Fund, while balances grow in the restricted and special revenue funds, and City needs are deferred. This type of budgeting has caused General Fund eligible expenditures to be cancelled, delayed, or not requested during the budget process even though sufficient funding existed.
The use of special revenue and restricted funds on eligible expenditures, prior to using General Fund funds, is a recommended practice.
Category: Accounting & Budgeting Changes
1. CIP: Currently, the CIP Fund is funded through the General Fund first, with secondary funding sources coming from restricted funds, special revenue funds, and grant funds. Additionally, the CIP list contains several projects that have no known or identified source of funding or funding that is inadequate to meet the needs of the project. The CIP Fund should be funded as part of overall revenues from the General Fund, with these funds applied after all other eligible funding sources have been used or considered. CIP projects should also have identified sources of funding in the 5- year plan and sufficient funding in the budget when planned.
At the beginning of the current fiscal year, the CIP budget had a $2 million deficit, as shown in the table below.
CIP, General Fund
Current Fund Balance $11.5 Million
Current Obligations (FY 21-22) $13.5 Million
Unfunded Obligations (FY 21-22) ($2,000,000)
Projected Obligations (5-Year CIP) $33.9 Million
Unfunded Obligations (5-Year CIP) ($21.8 Million)
CIP, Non-General Fund
Current Fund Balance $11.1 Million
Current Obligations (FY 21-22) $6.0 Million
Projected Obligations (5-Year CIP) $20.4 Million
Projected Revenue (2-Year CIP) $12.7 Million
Projected Surplus $3.4 Million
Action Taken: The City Manager will accurately budget for the needs and known expenditures for capital projects. The budget will include, when applicable, special, restricted, grant or other funding. Projects will not be included in current year budgets that do not have sufficient funding.
AGENDA ATTACHMENT
CITY COUNCIL MEETINGS
January 18, 2022 and January 22, 2022
4 | 13
2. Benefits (Funds: Dental/Vision; Unemployment; Workers’ Compensation; Liability): The City is not appropriately funding obligations in the funds collectively referred to as “benefits.” The City has chosen to draw down fund balances as opposed to funding known obligations. The underfunding of these Funds has led to expenditures in the General Fund being artificially lowered and a General Fund balance that is artificially increased because it does not consider these known, unbudgeted expenditures in future years. The City will need to fund benefits as the Fund balances are rapidly being depleted and will drop from $2.3M currently to less than $750,000 at the end of the current budget cycle.
Current Fund Balance
(combined) Millions
Opening Fund
Balance
Revenue Expenditure Ending Fund
Balance
Current Year $2.3M $1.06M $1.8M ($794K) $1.56M
FY 22-23 $1.56M $1.08M $1.9M ($892K) $740,000
Category: Establishment of Internal Service Funds (ISF)
3. Technology Reserve (General Fund): IT projects are funded through General Fund Reserves and categorized as an expenditure from the CIP. This should be changed by establishing an IT replacement internal service fund that receives contributions from the general fund as well as the Enterprise funds like Sewer based on use. The current balance in the Technology reserve of around $1.1M can be transferred as the starting balance for this Internal Service Fund.
Current Fund Balance $1.1 Million
Current Obligations (2 years) $800,000
Projected Collections N/A Establishing ISF (Fund Based on Need) Action Taken: The City Manager will create internal service funds to account for technology needs. The establishment of the ISF will be funded by the transfer of the fund balance of $300,000.
4. Equipment Replacement Fund: The Equipment Replacement Fund is anticipated to have a negative fund balance, potentially as high as $900,000, by the end of FY 23. The City will need to change its budget processes to account for the expected deficit while planning for future needs.
Current Fund Balance $400,000
Current Obligations (2 years) $1.3 Million
Unfunded Obligations ($900,000)
Action Taken: The City Manager will plan for equipment replacement as part of the normal budget process.
AGENDA ATTACHMENT
CITY COUNCIL MEETINGS
January 18, 2022 and January 22, 2022
5 | 13
Category: Policy Questions
5. Downtown Parking Fund: The Downtown Parking Fund was originally established in 2003 as the Downtown Maintenance Fund. This fund has transitioned from focusing on the overall maintenance and improvement of the downtown, to being reserved for parking only.
Staff would like to designate this fund as the Downtown Maintenance Fund and use it to upgrade or repair parking, lighting, wayfinding signage, small business grants, downtown wi-fi, beautification, events, and other items that improve the quality of life for residents, including the exploration of the establishment of a business improvement district.
Current Fund Balance $890,000
Current Obligations (2 years) None
Projected Collections (5 Years) $353,500
POLICY QUESTION: Should the City Council designate the Downtown Parking Fund as it was originally intended (Downtown Maintenance Fund) and broaden eligible expenditures?
6. Park in Lieu Funds: Currently the General Fund supports approximately $1 million in annual expenditures that are eligible expenditures from Park in Lieu Funds. The General Fund subsidy of park projects has caused other needs or obligations in the General Fund to be deferred or canceled.
The below chart shows the current fund balance, obligations, and expected revenue collection of Park in Lieu Funds over the next 5 years.
Current Fund Balance $5.8 Million
Current Obligations (5-Year CIP) $6.7 Million
Projected Collections (5 years) $10 Million
POLICY QUESTION: Should the City Council fund current eligible expenditures from Park in Lieu funds as opposed to the General Fund?
BREAK: 5:50-6:00
AGENDA ATTACHMENT
CITY COUNCIL MEETINGS
January 18, 2022 and January 22, 2022
6 | 13
Part 2. Employee Recruitment and Retention 6:00-6:30
Topic: Employee Attraction, Recruitment, and Retention (Irene Barragan Silipin) Description: Discussion of current state of the City’s compensation philosophy, classification system, turnover and separation rates, organizational continuity, and comparison of Los Altos to the marketplace.
Los Altos is a service organization. The City must attract, retain, and develop talented employees to meet the expectations of Los Altos residents and implement the vision of the City Council. The operations of the government depend on the recruitment and retention of highly skilled personnel.
Los Altos has been unable to retain employees, leading to more than 25% of the full-time workforce separating from service each fiscal year in recent years. Currently, less than 50% of all employees have worked in Los Altos for five years. As an example, there is only one full-time employee in the Finance Department with a tenure greater than 9 months. In Engineering Services, positions outside of senior leadership have turned over often. In this position group the median length of service with the City is 27 months, however there are currently multiple vacancies in this classification that when hired will reduce the median tenure substantially. Additionally, 2/3 of professional staff share an office with a co-worker or multiple co-workers and there is currently no dedicated meeting space at City Hall for internal meetings or meetings with the public. Several City employees currently work out of temporary trailers located behind the police station, including the City’s IT Department and the Traffic Division of the Police Department.
Focus Area(s) and Policy Decisions: Does the City Council wish to update its approach to employee compensation and benefits, working conditions, and classification to attempt to attract and retain highly competent employees?
Action Requested: The City Council should develop a compensation philosophy outlining the goals and vision for personnel retention and attraction in Los Altos. If the City Council directs the establishment of a compensation philosophy, City staff will bring back decisions to Council around compensation and benefits, working conditions, and classification that are in line with the adopted compensation philosophy.
AGENDA ATTACHMENT
CITY COUNCIL MEETINGS
January 18, 2022 and January 22, 2022
7 | 13
Part 3. Maintenance and Improvement of City Facilities (6:30 – 7:50) A. (6:30-7:00) Topic: Report from Police Facility Subcommittee (Requested by City Council, Vice Mayor Meadows & Councilmember Weinberg)
Description: The City Council authorized the creation of a subcommittee to review if the City should pursue a bond measure for a new police facility. Vice Mayor Meadows and Councilmember Weinberg will provide an update on the work of the subcommittee.
Action Requested: Determine if further action is necessary based on the report of the subcommittee. If yes, Staff will schedule the topic for further discussion at an upcoming Study Session.
B. (7:00 – 7:50) Topic: City-Owned Facilities, Priorities (Requested by City Council, Manny Hernandez & Gabe Engeland)
Description: The City must continually invest in public safety, public works, parks and recreation, and government facilities. The below list of government-owned facilities is not to be considered exhaustive but does contain assets that need to be scheduled for maintenance, renewal, retirement/demolition, or replacement.
Facilities were placed in the matrix by staff after an assessment of the known condition of the asset. The placement in the matrix is not intended to review or change any Council direction or alter or amend direction received by the City Council. Instead, the matrix outlines what is currently known of the condition of the asset and the suggested timeframe for Council to act.
Facilities in the matrix were determined by Urgency to act (Low, Medium, High), Resource Use (Low = $2M or less, Medium = $2M - $5M, High = $5M+) and potential inclusion in the budget (Immediate = FY22- 23, Near Term = 5 Year CIP Plan, Future = Unscheduled). The facilities are filtered by “Timing” with immediate items listed first, followed by 5-year CIP, and then Unscheduled.
To the extent possible, the inclusion for each category is based on the decisions the City Council has made to date. For example, Halsey House is listed as “Low” in resource needs because the current direction is to mothball the structure, which has an estimated cost of $250,000 this fiscal year, with small outlays in future fiscal years. When the City Council determines to move forward with full rehabilitation (or phased rehabilitation) or adaptive reuse of the Halsey House, the resource use would move to “high” if the cost exceeds $5M or medium if the cost is between $2M and $5M.
The Bus Barn Theater is listed as “unknown” for Resource Use with “5-year CIP” for timing. This is because it has not yet been determined how the Council will handle the current facility with regards to maintenance, renewal, retirement/demolition, or replacement. The timing was listed due to the agreement of an MOU with the Los Altos Stage Company that would not exceed 3 years.
The City Council is not being asked to prioritize specific facilities or assets within the given listed timeframe, but instead determine which projects should be categorized within each timeframe area
AGENDA ATTACHMENT
CITY COUNCIL MEETINGS
January 18, 2022 and January 22, 2022
8 | 13
(Immediate, 5-Year CIP, Unscheduled). Once the projects are categorized appropriately, the City Council will be able to prioritize specific projects as part of the normal budget process.
It is understood more detailed costs and analysis will be necessary to move certain items forward within the timeline and resource allocation outlined below. The matrix is for policy planning purposes. More information will be available as projects are moved from planned to a recommended budget.
Action Requested: Does the City Council agree with timing and urgency of the projects listed? If yes, Staff will plan accordingly in future budget years and return these items to Council for prioritization as part of the normal budget process.
If no, what changes should be made to the timing and/or urgency of these facilities based on their current physical condition?
Facility Urgency Resource Use Timing
Caretaker House High Low Immediate
Halsey House High Low Immediate
Fire Station Almond High Medium Immediate
LAYC/City Hall High Low Immediate
Park/ADA High Low Immediate
Police Facility High High Immediate
Facility Urgency Resource Use Timing
Bus Barn Theater Medium Unknown 5-Year CIP
Fire Station Loyola Medium Medium 5-Year CIP
Garden House Low Medium 5-Year CIP
Grant Park Senior Center High Medium 5-Year CIP
MSC Low Low 5-Year CIP
Facility Urgency Resource Use Timing
999 Fremont Low High Unscheduled
Underground Facilities Low Low Unscheduled
City Facilities, Timing: Immediate
Caretaker House (Redwood Grove): This property is not fit for occupation and is currently used for supply storage for Redwood Grove Summer Camp, Grassroots Ecology, and the archery program. Restrooms in Redwood Grove are currently provided by portable toilets. The property should be restored, replaced, or demolished. The City Council should consider the current uses and determine if restoration or replacement is preferable to demolition. If replacement or demolition is the preferred option, the City should place restroom and storage facilities at the current location.
AGENDA ATTACHMENT
CITY COUNCIL MEETINGS
January 18, 2022 and January 22, 2022
9 | 13
Halsey House: The City Council directed staff to mothball Halsey House until a final decision could be made on the type of rehabilitation of the property. The City Council will need to make a final determination on full rehabilitation (including staged/partial rehabilitation) or adaptive reuse, and how to plan the recommended approach, at a future meeting date.
Fire Station, Almond: Roof (critical), building windows need replacement, facility lighting needs to be updated, and HVAC units and water heaters are nearing end of usable life.
LAYC/City Hall: City Hall, like the police station, needs repair or replacement. Additionally, the offices in City Hall are not sufficient to conduct city business. Two-thirds of all professional employees share office space, there is no longer any dedicated meeting space in City Hall, and the IT Department currently works out of a temporary trailer on City Property. Converting LAYC to staff space would be a cost-effective way to meet some of the needs of the workforce, eliminate working in temporary trailers, and provide dedicated meeting space for staff and residents.
Park/ADA: The playgrounds in Los Altos could provide greater access to residents with physical and cognitive disabilities. Los Altos should incorporate access needs into current playground designs. In addition, several of the playgrounds are nearing the end of their useful life and will need to be replaced soon.
Police Facility: The City Council recently formed a subcommittee to explore the need for a new Police facility. The current building is badly in need of repair or replacement. Vital components of the facility (plumbing, HVAC, and sewer) need major repair or complete replacement. The traffic division of the Police Department currently operates out of a temporary trailer on City property.
City Facilities, Timing: 5 Year CIP
Bus Barn Theater: The City owns the Bus Barn Theater, which is currently operated by the Los Altos Stage Company as a community theater. The building has outlived its useful life and needs to be renewed or replaced. The City Council recently signed an MOU with the Los Altos Stage Company to explore the possibility of moving the theater operations to a downtown location.
Fire Station, Loyola: Emergency generator (replacement), facility lighting needs to be updated, and HVAC units and water heaters are nearing the end of usable life.
Garden House: Interior space is dated and needs updating. Paint, flooring, hot water system, and kitchen appliances have passed useful life and need replacement. Air conditioning is needed in the facility. This building space is listed as separate from the underground as it is currently used by the public.
Grant Park Senior Center: The Grant Park Senior Center is need of repair and upgrades. Currently, there is no hot water system in the plumbing system and the electrical system does not allow for commercial use of the kitchen or an adequate HVAC system for either of the buildings.
MSC: The admin building has an inadequate amount of space for office staff and limited workspace for field crew members to complete necessary reports and work on computers. All warehouse space in the yard is full. Cargo containers are now being added to the yard for additional storage and workspace.
AGENDA ATTACHMENT
CITY COUNCIL MEETINGS
January 18, 2022 and January 22, 2022
10 | 13
City Facilities, Timing: Unscheduled
999 Fremont Ave.: The City purchased this property in 2019 but has yet to prioritize a project. The City Council could consider demolition of the structure that currently sits on the property.
Underground Facilities: The underground is no longer in regular use but is not a desirable location for most users due to lack of HVAC and the general condition of the flooring, walls, and regular issues with the plumbing system. The apartment is no longer occupied and is being used for storage and as the headquarters for Summer Day Camp. This space also has an active lapidary. This building space is listed as separate from the Garden House as it is currently not used by the public.
Public Comment
Wrap-Up: 7:50-8:00 (Gabe Engeland)
Staff will summarize the decisions that have been made during the first day of the work plan and retreat and will outline which items or decisions will be deferred to the second day (or another date in the future).
Staff will also add items that were raised during the first day for discussion on the second day.
AGENDA ATTACHMENT
CITY COUNCIL MEETINGS
January 18, 2022 and January 22, 2022
11 | 13
Day 2: January 22nd
Introduction, Gabe, 9:00 – 9:10
Part 4. Council Policy Decisions (9:10-10:50)
A. Topic: Policy on Fees (Requested by City Council, Jon Maginot):
Description: The City Council should adopt fees annually as part of the budget process. The fees should be set based on City Council policy direction and applicable State laws. During the most recent adoption of the fee schedule, Council raised questions regarding potential subsidies for residents or non-profits or other groups for the use of community facilities. If the Council would like to subsidize these groups, should it be through reduced fees only or should the Council establish a use or fee waiver policy or update the current fee waiver policy?
Policy Question: Does the City Council wish to subsidize certain users and groups of City facilities, and if so, to what extent? Does the City Council wish to update the current fee waiver policy? B. Topic: Fees and Cost Recovery for Services (Laura Simpson) Description: The City of Los Altos is unique in that it has a very low fee structure, including flat fees for staff processing, as well as fees such as housing in-lieu or other fees to be dedicated for special programs.
The flat planning fees do not fully recover the staff time associated with projects and should be considered an hourly fee rate in the next Master Fee Schedule Resolution. If cost recovery is allowed through billable hours, this would support the City’s overall budget and allow for appropriate staffing levels in both planning and building to ensure timely review and responses.
Policy Question: Does the City Council wish to continue subsidizing development through a fee structure that does not recover staff time?
C. Topic: Creation of Policy for Use of City Property or Facilities at Civic Center Site (Requested by City Council, Jon Maginot)
Description: The City Council authorizes the use of certain community groups and non-profits for regular, licensed, or leased use of City properties and facilities on the civic center site. This use is currently completed within the context of the City Code, Council actions, or relevant policies. Council has asked for a discussion on this topic.
Policy Question: Should the City Council put in place a policy to guide the use of the civic center property for continuous or regular use, including licensing, leasing, and other purposes? D. Topic: Below Market Rate (BMR) (requested by City Council, Laura Simpson and Erik Ramakrishnan) Description: The City Council may subsidize the development of Below Market Rate (BMR) units for rental or sale. This can be accomplished through several mechanisms, including the options provided in this report.
Policy Question: Should the City Council put in place a policy to subsidize BMR development? If so, which of the options outlined here would Council like more information on? The options selected could be included as part of the Housing Element process.
AGENDA ATTACHMENT
CITY COUNCIL MEETINGS
January 18, 2022 and January 22, 2022
12 | 13
E. Topic: Tree Protection Policy (Requested by City Council, Emiko Ancheta & Jon Maginot) Description: The current tree protection and tree removal policies of the City can be difficult to apply consistently as part of the development process. As evidenced by a recent development where trees were removed, including some protected species, some areas of the code may be confusing or not reflect the direction of the City Council.
Policy Question: Should the City Council update the tree protection policy currently in place? Break: 10:50-11:00
AGENDA ATTACHMENT
CITY COUNCIL MEETINGS
January 18, 2022 and January 22, 2022
13 | 13
Part 5. Remaining Decisions, Direction, Deferred Items, Mayor 11:00 – 1:00 Topic Remaining Decisions: Discuss and provide direction, decide, or agree to a future date for all items deferred during the meeting or topics that came up during conversation for later discussion.
Public Comment
Adjourn. 1:00
Gabriel Engeland, City Manager
Los Altos City
Council Planning
& Work Session
Los Altos City Council Planning
& Work Session
Expectation: We will not revisit previous
directions given by the City Council
3 This is a process, not an event.
4 Crisis Response
Reinforces what is known
5 Crisis Response
Exposes what is unknown
6 Crisis Response
Reinforces what is known
Exposes what is unknown
7 By the Numbers: ACFR &
Budget
8 $3.98M
($4.0M)
$1.17M Property Tax revenue in excess of
budget (4.3% positive variance). This
trend should continue in the current FY.
To date, one-time revenues received
in Cares Act & ARPA funds to balance
budget.
One-Time mistakes and corrections in
ACFR (largely due to reclassification of
settlement agreement and correction
of unrealized gains).
9 18.7%
$6.6M
($2.0M)
General Fund reserve. Mid-Year was
21.4%, and goal is never less than 20%.
Reduction in General Fund unassigned
reserve, which now stands at $1.2M,
started year at $7.8M.
GF CIP shortfall to begin FY, $13.5M in
need and $11.5M in funding.
10 13.4%
$4.0M Expected ARPA Payment in July of 22.
Percent over budget for sales tax
collection (though actuals were down
$370,000).
11 11.4M Reduction in liability after $5M
prepayment to CalPERS by City
Council. Funded status increased
4.5%.
Quotes & Numbers:
Personnel
12 Q: What is your primary reason for
leaving?
13 Answer: “No stability. Constant
turnover. Volume of work is not
sustainable with the current staffing
structure.”
51%
20%+
Percent of workforce who has been
with Los Altos less than 5 years
Percent of workforce who separates
employment annually
14 14% Percent of full-time positions currently
advertised (not vacant)
Q: Is there anything you would change
about your job?
15 Answer: “This is a totally thankless
job…not enough support or
resources.”
1 Number of full-time employees in Finance
with a tenure longer than 9 months
16 2 Total number of external applications
received for a recent advertised
management position
Q: What was the least satisfying thing
about your job?
17 Answer: “We have been understaffed
for quite some time.”
Infrastructure
18 19
20 21
22 23
24 You can do anything,
but not everything.
25 You can do anything, but not everything.
26 You can do anything,
but not everything.
27 28
29 30
31 Let’s Get Started
32 FY2021 Annual
Comprehensive Financial
Report (ACFR)
City of Los Altos
Council Retreat
January 16, 2022
1 Today’s
Discussion
2 ACFR Document
Sections
Contents
FY2021 Results
Year Over Year Comparison
Next Steps
Receive Report
Refer FY 21 ACFR to City Council
The Audit
Maze & Associates presentation
The ACFR Document
Introductory
Financial
Statistical
3 Financial Section
Government Wide Financial
Statements
Fund Financial Statements
4 Governmental Activities
• All Activities Excluding Business Type
• Includes Internal Service Funds
Business Type Activities
• Charge Customers directly for services
• Enterprise Funds
Fiduciary Funds
• Resources that belong to others, not available to
primary government
Proprietary Funds
• Services that charge a fee to users, Enterprise
funds , internal service funds
Governmental Funds
• Basic Services of Government, Typically Financed
with Taxes, grants, etc.
ACFR
Highlights
5 Independent Auditors Report
•General overview of the City for the past year
•FY21 Initiatives and projects accomplished
•Overall Economic outlook
Transmittal Letter
•Financial highlights
•Variance analysis
Management Discussion & Analysis
•Statement of Net Position
•Notes to Basic Financial Statements
•Budgetary Information
Financial Statements & RSI
FY 2021 Results
6 Commonly known
as an “unmodified”
or “ clean” opinion
The City’s financial
Statements for FY 20-21
are fairly stated in
conformity with
accounting principals
generally accepted in the
United States
Government –Wide :
Financial
Highlights
7 Net Position
$137.9 million
Revenues
$61.5 million .
Expenses
$82.9 million
Governmental
Activities $107.7
Business- Type
Activities $
30.2 Governmental
Activities $53.4
Business- Type
Activities
$8.1
Governmental
Activities $77.2
Business- Type
Activities
$5.7
General Fund Revenue Comparison
8 • Total revenues increased primarily due to
higher property tax receipts and Grant Funds
(ARPA/ CARES)
• Key Revenue loss in TOT and interest income
• Sales tax still below pre pandemic
• Adjusted actuals lower then FY20
General Fund Revenue
Revenue (in Millions) FY 2020
Actual
FY 21
Budget
FY 2021
Actual
Actual
Var %
Budget
Var%
Property Tax 25.79 27.29 28.46 10.4% 4.3%
Sales Tax 3.37 2.64 3.00 -11.2% 13.4%
Transient Occupancy Tax 2.36 0.58 0.66 -71.9% 13.7%
Other Taxes 3.96 3.48 4.41 11.3% 26.6%
Interest Income 1.79 0.41 0.14 -91.9% -64.2%
Grants (ARPA + CARES) - - 3.98 100.0% 100.0%
All other Reveune 8.30 7.76 7.85 -5.4% 1.2%
Total Revenue 45.57 42.16 48.51 6.4% 15.1%
ARPA Adjustment (3.59)
Adjusted Revenue 45.57 42.16 44.92 -1.4% 6.6%
General Fund Expenditure Comparison
9 • Total Expenditures increased YOY, but were lower than Budget
• Public Safely & Public Works & Recreation underspent
• Community Development and Admin/Finance overspent
By Type View
• Personnel costs Increased
• Services and Supplies decreased
General Fund Expenditures - Department View
Expenses (in Millions) FY 2020
Actual
FY 21
Budget
FY 2021
Actual
Actual
Var %
Budget
Var%
Public Safety 18.80 20.34 19.39 3.2% -4.7%
Public Works 5.47 5.77 5.62 2.7% -2.7%
Recreation 2.31 1.80 1.78 -23.0% -1.0%
Community Development 5.52 6.20 6.36 15.1% 2.5%
Adminstration & Finance 8.52 7.35 7.70 -9.5% 4.8%
Total Expenditures 40.61 41.47 40.85 0.6% -1.5%
General Fund Expenditures - By Type
Expenses (in Millions) FY 2020
Actual
FY 21
Budget
FY 2021
Actual
Actual
Var %
Budget
Var%
Personnel Costs 22.81 24.02 23.91 4.8% -0.4%
Services and Supplies 17.51 17.39 16.74 -4.4% -3.7%
Capital Outlay and others 0.30 0.09 0.22 -27.8% 131.5%
Total Expenditures 40.61 41.47 40.85 0.6% -1.5%
Fund Balance : General Fund
10 In Millions FY 21 FY 20 Variance
Non Spendable 1.86 1.84 0.02
Restricted - - -
Committed - - -
Assigned 15.94 25.77 (9.84)
Unassigned 4.93 7.86 (2.93)
Total Fund Balance 22.72 35.47 (12.75)
Unassigned FY 21
ARPA Reserve for FY 22 3.60
Unrealized gain Loss 0.12
Unassigned (Available for prog) 1.21
*Unassigned Fund balance was adjusted by $ 2.86 million to account for the Purchase of 999 Fremont that was recorded as Land for development in FY 20
Reserve Balances
11 Reserve Type FY 20 FY 21 % of FY 21 Exp
Non Spendable
Inventory 60,030 145,196
Notes Receivable 1,767,659 1,704,880
Veterans Memorial 8,615 8,615
Total Non Spendable 1,836,304 1,858,691
Assigned
Emergency and operating reserve 7,206,207 7,649,169 18.7% OPEB 1,500,000 1,500,000
PERS 5,000,000 5,000,000
Technology Reserve 1,412,090 1,108,582
Community Center Reserve 10,654,976 679,110
Total Assigned 25,773,273 15,936,861
Unassigned
ARPA Reserve for FY 22 3,598,964
Unrealized gain Loss 118,905
Unassigned (Available for prog) 7,861,296 1,210,297
Total Unassigned 7,861,296 4,928,166
Total Fund Balance 35,470,873 22,723,718 55.6%
Operating
Reserve has
fallen to below
20% partly
because Council
approved Legal
Settlement of
$1.04M
Unrealized Gain
Should not be
considered
distributable
Other Major Funds
In Lieu Parkland
• Revenues $1.6 million, Transfers to CIP $1.3 million
• Fund Balance $5.8 million
• Commitments to CIP (prior + FY 22)=1.2 million
• Available fund balance = $4.58 million
Capital Projects Fund
• FY 21 Expenditures $22.8 million
• Fund Balance 11.5 million
• Commitments to CIP (prior + FY 22)=13.5 million
• Available fund balance = $-2.0 million
12 Memorandum of Internal Control (MOIC)
• 2021-01: Timely Invoice payments
• 2021-02: Outdated Signature Cards
• 2021-03: Information System Risk Management Policy
13 Questions
14 Requested Action
• Receive report and presentation
•QUESTIONS??
15 Net Position Governmental Activities
16 • Assets increases due to higher revenues, lower
spending and higher capitalization.
• Liabilities increased due to higher accrued
payroll, unearned revenues and ARPA Grant
receivable
• Deferred inflows / Outflows increases /
decreases due to GASB 68 pension related
changes
• Net pension liability increased by $ 3.2 million
to $42.4 primarily due to actuarial assumption
changes
In millions 2021 2020 Variance
Assets 165.7 151.6 14.2
Deferred Outflows 9.5 9.3 0.2
Less:
Liabilities 66.7 56.4 10.2
Deferred Inflows 2.8 2.9 (0.2)
Net Position 105.8 101.5 4.3
Totals Governmental +
Business type
Net pension liability 42.4 39.1 3.2
Net OPEB liability 1.6 1.4 0.2
Change in Net Position : Governmental
Activities
17 • Total revenues increased primarily due to
higher property tax receipts and Grant
Funds (ARPA/ CARES)Recreation program
revenues decreased due to inability to
provide programs & services as a result of
the community center closure
• Expenses lower due to planned spending
restrictions related to the pandemic and
higher vacant positions
• Net Position increased by $ 4.3 million over
FY 20
In Millions 2021 2020 Variance
General Revenues 39.5 40.9 (1.4)
Program Revenues 13.9 8.4 5.5
Total Revenue 53.4 49.2 4.1
Expenses 46.2 48.5 (2.3)
Excess / (Deficit) before Transfers 7.2 0.7 6.5
Transfers (2.8) - (2.8)
Change in Net Position 4.3 0.7 3.7
Change in Unassigned Fund Balances
18 Reconciliation of Unassigned Fund Balance FY 21 FY 20 Unassigned Fund Balance Per ACFR 1.21 7.86
Unused Unassigned balance from FY 19 - (1.08)
Unassigned Balance For the Year only 1.21 6.78
Land Purchase reclassification 2.86 -
Unrealized Gain / Loss 0.66 (0.66)
2020 Encumbrance 0.26 (0.26)
Adjusted Unassigned Fund Balance 4.99 5.87
Additional Debt Service for Community Center 0.70 -
Revenue loss FY 21 0.65 -
Expense Increase FY 21 (0.47) -
Comparative Ending Balance 5.87 5.87
Council Retreat : January 18th, 2022
Budget
overview
BECAUSE IT’S YOUR
MONEY
It’s important to
understand how funds are
allocated…
City Fund Structure
General Fund
Special Revenue
Funds
Capital Improvement
Fund
Debt Service
Funds
General Fund
Equipment
replacement
IT Initiatives /
Technology Reserve
Enterprise Fund
Sewer
Solid Waste
Storm Drain
Special
Revenue Funds
Roadwork
Road Mt. (SB1)
Gas Tax
Prop 1B
Measure B
TDA
Traffic Impact Fee
Traffic Congestion Relief
VRF 80%
Vehicle Impound
Other
CDBG
Grants
Estate Donations
Downtown Parking
In Lieu Parkland
PEG Fees
Public Art
Supplemental Law
Enforcement
Internal Service
Funds
Dental / Vision
Unemployment
Workers
Compensation
General Liability
Enterprise Fund
Capital Projects
Capital
Improvement
Projects
Equipment
Replacement
Debt Service
Funds
COP 2004
Community Center
Loan
Custodial Funds
NCLA
Raymundo Curb &
Gutter
Blue Oak Lane Sewer
Avalon Dr Curb
Current City Fund Structure
General Fund Enterprise
Fund
Sewer
Solid Waste
Storm Drain
Special
Revenue Funds
Roadwork
Road Mt. (SB1)
Gas Tax
Prop 1B
Measure B
TDA
Traffic Impact Fee
Traffic Congestion Relief
VRF 80%
Vehicle Impound
Other
CDBG
Grants
Estate Donations
Downtown Parking
In Lieu Parkland
PEG Fees
Public Art
Supplemental Law
Enforcement
Internal Service
Funds
Dental / Vision
Unemployment
Workers
Compensation
General Liability
Equipment
Replacement
IT / Technology
Replacement Fund
PERS/OPEB
Stabilization
Capital Projects
Capital Investment
Projects
Outside Funding /
Grants
Debt Service
Funds
COP 2004
Community Center
Loan
Custodial
Funds
NCLA
Raymundo Curb &
Gutter
Blue Oak Lane Sewer
City Fund Structure – Going Forward
Personnel
Allocations
General
Fund
Enterprise
Funds
Capital
Projects
Special
Revenue /
Restricted
Funds
Personnel
Currently, all charged to the
General Fund
Allocations Going Forward
All Funds Revenue
All Funds Expenditure
The Big Picture: FY22-23
All Funds
Fiscal Structure - General Fund
• Primary Fund for City’s Operation
• Critical to City’s overall financial
health
• Revenues
• Include Property Tax, Sales Tax,
Permit Fees, Recreation fees,
Franchise Fees, Fines, etc.
• Comprised 79% of all fund revenues
in FY 2021
Fiscal Structure - General Fund
• Supports the following
programs/ Department
Expenses
• Administration
• Public Safety (Police & Fire)
• Community Development
• Public Works
• Recreation
• Debt Service
Fiscal Structure -Enterprise Funds
• Sewer /Solid waste/Storm Drain
• Classified as “Enterprise Funds”
• Must be self-sustaining
• Revenues are collected only to cover
operating expenses
• Cannot be used for any other purpose per
State law
• Sewer comprised $7.1 million 11.6% of
operating revenues in FY 2021
• Solid waste comprised $0.86 million 1.4%
in FY 2021
• Storm Drain Fund has no revenue source
and is supported by GF
• Are not paying their “fair share”
Fiscal Structure - Restricted Funds
Restricted Funds are used for specific
purposes which are regulated by state
law or Council decision.
Some examples are
Park in Lieu Fund
• Funds can only be used on land
designated as park land
Gas Tax Fund
• Restricted for maintenance of City
streets and alleys
• Must have a Maintenance of Effort
component. Current 1.98M
• These funds may supplement
operations in various departments,
although most expenditures are not
used for administrative costs.
Fiscal Structure –Internal Service Funds
• Workers Compensation, Dental, Unemployment, General
Liability
• Classified as “Internal Service Funds”
• Must be funded as part of the budget process
• Revenues are collected from all sources General fund, Enterprise, and others if eligible.
Proposed to create 3 new Funds
• Equipment and Fleet Replacement
• Information technology replacement
• PERS Stabilization
• Currently underfunded
Fiscal Structure –Debt Service Funds
2004 Certificates of participation (COP04)
• Debt raised to build Rosita Park
• Annual debt payment of 167,400
• Interest rate
• Balance payable 880,000
• Payments complete in 6 years (2028)
Community Center Loan
• Debt raised to build complete the community center
• Annual debt payment of 622,090
• Interest rate 2.29%
• Balance payable 9,496,863
• Payments complete in 18 years (June 30,2040)
• Currently Funded from General
Fund
• Can this be eligible for Park in
Lieu?
Fiscal Structure - Capital Improvement
Fund
• Established by City Council to designate funds
earmarked for major Maintenance and
infrastructure projects and others
• Annual Street resurfacing
• Sewer Maintenance and repairs
• Funded through Gas Tax, VRF, and other road
funding sources and General Fund surpluses
• Proposal to allocate an annual amount or
percentage of revenues from the General
fund during the budget process
Capital
Projects
Fund
General
Fund
Gas Tax
and Road
work
Grants
Other
Special
Revenue
Funds
Enterprise
Funds
Fiscal Structure - Capital Improvement
Fund
Fiscal Structure - Capital Improvement
Fund, General Fund Contributions
https://smile.amazon.com/gp/product/B007G83T16
Questions
Fiscal Structure - Equipment Fund
• Established by City Council as a general fund
reserve to designate funds earmarked for
major equipment purchases
• Replacement schedule to be established to
coordinate usage of funds (in conjunction
with other restricted funds, where applicable)
• Proposal is to have it as a dedicated internal
service fund
• Some Cities have tagged along a Technology
fee on permits that can help offset
Technology costs in Community Development
CALPERS UAL
Funding
City of LOS ALTOS COUNCIL RETREAT
January 16, 2022
1 1/19/2022 2
Current UAL Structure, Negative
Amortization
Negative amortization
• Payments are less than the interest
charged
• Difference increases total amount
owed
• Currently we are paying negative
principle
3 $-
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 Negative Amortization: Single Base, $1M Balance, 30 payments What is Unfunded Accrued Liability (UAL)
• The Unfunded Accrued Liability (UAL) obligation represents the market value of the assets, minus the discounted value of the future liabilities. When a plan or pool's Market Value of Assets is less than the Actuarial Accrued Liability, the difference is the plan or pool's UAL. • Major components
• Service Costs
• Interest Costs
• Return on plan assets
• Amortization of Prior Service Cost
• Gains and Losses
4 Background
• Reserves set aside in the General Fund $5M
UAL balances per CALPERS projections (June 30, 2021) $45.1 M Current Discount Rate 6.8%
• Finance Commission (Meeting September 20, 2021)
Recommended transfer of reserve to CALPERS
Directed staff to identify which tiers of UAL to paydown Requested to identify more funds at year-end
Move money prior to the end of the calendar year
• City Council (Meeting December 14, 2021)
Directed staff to Paydown $5 million of UAL
5 Prior Actions 6
Original Benefit
2.7% at age 55
Council Action- Hired after December 31,
2011
2% at age 60
PEPRA Law- Hired after January 1, 2013
2% at age 62 (and pay 50% of normal
cost)
Safety Plan Misc. Plan
Original Benefit
3.0% at age 50
Council Action- Hired after December 31,
2011
3.0% at age 55
PEPRA Law- Hired after January 1, 2013
2.7% at age 62 (and pay 50% of
normal cost)
Staff Analysis
Current Status
UAL 24.7
Funding Ratio 68.4%
Interest paid overtime 17.97M
*Based on CALPERS provided workbook.
Safety Plan Misc. Plan
Current Status
UAL 20.4
Funding Ratio 68.5%
Interest paid overtime 15.67M
7 Post ADP paydown
After ADP paydown
$2.73M
New Funding ratio 73.1%
Savings over time 3.46M
*Based on CALPERS provided workbook.
Safety Plan Misc. Plan
After ADP paydown
$2.27M
New Funding ratio 73.1%
Savings over time 2.92M
8 Combined net savings
9 Annual Operating Budget Savings
Year FY21* FY 22 FY23 FY24 FY25 FY26 FY27 FY28 FY29 FY30 -46 Total Savings 5.00 (0.33) (0.34) (0.36) (0.37) (0.38) (0.39) (0.40) (0.42) (8.38) (6.38) Effect of Payments over time
10 Future Options
1. Set up a PERS Stabilization Internal service Fund
2. Adopt a policy for (annual discretionary payments)ADP
3. Setup a Section 115 Trust
Money set aside can only be used to pay pension costs
City in control of investment & strategy
Up to 2 years of Pension costs can be withdrawn
Returns have ranged from 3% to 10% annually depending on the strategy 11 QUESTIONS
12 OPEB Update
City of Los Altos
Council Retreat January 16, 2022
13 OPEB Valuation Report Summary
OPEB Actuarial Valuation Report by Bartel Associates, LLC Measurement Date 6/30/2019 6/30/2020
Total Participants (Active + Retiree's w/ Benefits + Retiree's w/o Benefits = Total) 132 + 49 + 75 = 256 132 + 49 + 75 = 256 Present Value of Benefits (PVB) $5,032,000 $5,032,000
Total OPEB Liability (TOL) $3,173,000 $3,607,820
Valuation Assets $1,789,000 $1,982,361
Net OPEB Liability (NOL) $1,384,000 $1,625,459
Funded Status 56% 55%
Actuarially Determined Contribution (ADC) $333,000 (fye 2020) $343,000 (fye 2021) Normal Cost $201,000 (fye 2020) $208,000 (fye 2021)
Amortization of Net OPEB Liability $132,000 (fye 2020) $135,000 (fye 2021) Projected Retiree Premiums (Pay-Go Cost) $82,000 (fye 2021) $92,000 (fye 2022) Implicit Rate Subsidy Credit $47,000 (fye 2021) $50,000 (fye 2022) CERBT Asset Allocation Strategy Strategy 1 Strategy 1
Discount Rate 6.75% 6.75%2
CERBT Account Summary
As of October 26, 2021 Strategy 1
Initial contribution (3/24/2016) $1,500,000
Additional contributions $0
Disbursements $0
CERBT expenses ($8,852)
Investment earnings $1,120,554
Total assets $2,611,702
Money-weighted annualized net rate of return (3/24/2016 – 10/26/2021 = 5.59 Years) 10.79% 3 Funded Status Comparison
Measurement Date Total OPEB Liability CERBT Assets Funded Status 6/30/2014 $4,394,000 $0 0%
6/30/2017 $3,097,000 $1,566,000 51%
6/30/2019 $3,173,000 $1,789,000 56%
6/30/2020 $3,607,820 $1,982,361 55%
2/20/2022* $3,607,820 $3,482,361 96.5%
* After Prefunding of $1.5M is complete 4
Pension Contribution Investment Tools
Portfolios CalPERS Pension
CalPERS 115
CEPPT Trust
Strategy 1
CalPERS 115
CEPPT Trust
Strategy 2
LAIF
Expected Return 6.8% 5.0% 4.0% ~1%
Risk 11.4% 8.2% 5.2% Lowest
Optimal Investment Time
Horizon Long-Term 2-10 Years 1-24 Months
Liquidity No Yes Yes
5 CERBT Portfolios
Portfolios CERBT
Strategy 1
CERBT
Strategy 2
CERBT
Strategy 3
Expected Return 7.59% 7.01% 6.22%
Risk 11.83% 9.24% 7.28%
6 QUESTIONS
7 Anthony Carnesecca, Economic Development Administrator June Du, Finance Manager
Manny Hernandez, Maintenance Services Director
Gabriel Engeland, City Manager
Special Revenue Funds,
Internal Service Funds,
and Restricted Funds
CIP, General Fund
CIP, General Fund
Current Fund Balance $11.5M
Current Obligations (FY 21-22) $13.5M
Unfunded Obligations (FY 21-22) ($2M)
Projected Obligations (5-Year CIP) $33.9M
Projected Obligations (5-Year CIP) ($21.8M)
2 Action Taken: The City
Manager will accurately budget
for the needs and known
expenditures capital projects.
The budget will include, when
applicable, special, restricted,
grant or other funding.
CIP, Non-General
Fund
CIP Non-General Fund
Current Fund Balance $11.1 Million
Current Obligations (FY 21-22) $6.0 Million
Projected Obligations (5-Year CIP) $20.4 Million
Projected Revenue (2-Year CIP) $12.7 Million
Projected Surplus $3.4 Million
3 Action Taken: The City
Manager will accurately budget
for the needs and known
expenditures capital projects.
The budget will include, when
applicable, special, restricted,
grant or other funding.
CIP, Combined
CIP, General Fund
Current Fund Balance $11.5M
Current Obligations (FY 21-22) $13.5M
Unfunded Obligations (FY 21-22) ($2M)
Projected Obligations (5-Year CIP) $33.9M
Projected Obligations (5-Year CIP) ($21.8M)
CIP Non-General Fund
Current Fund Balance $11.1 Million
Current Obligations (FY 21-22) $6.0 Million
Projected Obligations (5-Year CIP) $20.4 Million
Projected Revenue (2-Year CIP) $12.7 Million
Projected Surplus $3.4 Million4
Action Taken: The City
Manager will accurately budget
for the needs and known
expenditures capital projects.
The budget will include, when
applicable, special, restricted,
grant or other funding.
Benefit Funds
(Combined)
Action Taken: The City
Manager will accurately budget
for the needs and known
expenditures for the combined
funds referred to as benefits.
Fund balance drawdown and
deficit spending will have to be
eliminated in future budgets.
FY21/22 Fund Balance $2.3M
Revenue Expected $2.1M
Expenditures $3.7M
FY 22/23 Deficit $1.6M
Ending Fund Balance $740k
5 6
Summary of Changes: Accounting & Budgeting
Action Taken: The City Manager will
accurately budget for the needs and
known expenditures for the combined
funds referred to as Benefits.
Action Taken: Fund balance drawdown
and deficit spending will have to be
eliminated in future budgets.
PROJECTED GF ANNUAL
DEFICIT--BENEFITS $800K
Action Taken: The City Manager will
accurately budget for the needs and
known expenditures capital projects.
The budget will include, when
applicable, special, restricted, grant or
other funding.
PROJECTED GF ANNUAL
UNFUNDED CIP $5M
Technology Reserve
(General Fund)
Action Taken: The City
Manager will create internal
service funds to account for
technology needs. The
establishment of the ISF will be
funded by the transfer of the
fund balance of $300,000.
Current Fund Balance $1.1M
Current Obligations $800k
Projected Collections N/A
7 Equipment
Replacement Fund
Action Taken: The City
Manager will create internal
service funds to account for
Equipment Replacement and
Fleet needs. The negative Fund
balance will need to be
planned for.
Additional Presentation:
June Du, Finance Manager
Current Fund Balance $400k
Current Obligations $1.3M
Unfunded Obligations $900k
8 9
Summary of Changes: Establish ISF
Action Taken: The City Manager will
create internal service funds (ISF) to
account for Technology, Equipment
Replacement, and Fleet Needs.
Action Taken: Negative Fund Balance
will need to be planned for and
addressed in future budgets.
PROJECTED GF DEFICIT
(COMBINED) $600K
Park in Lieu Funds
POLICY QUESTION: Should the
City Council fund current
eligible expenditures from Park
in Lieu funds as opposed to the
General Fund?
Additional Presentation:
Manny Hernandez,
Maintenance Services Director
Current Fund Balance $5.8M
Current Obligations (5-Year CIP) $6.7M
Projected Collections (5 years) $10M
10 Downtown Parking
Fund
POLICY QUESTION: Should the City
Council designate the Downtown
Parking Fund as it was originally
intended (Downtown Maintenance
Fund) and broaden eligible
expenditures?
Additional Presentation:
Anthony Carnesecca,
Economic Development Administrator
Current Fund Balance $890k
Current Obligations $0
Projected Collections (5 years) $354k
11 Policy Decisions Park in Lieu
POLICY QUESTION: Should the City Council fund current eligible expenditures from Park in Lieu funds as opposed to the General Fund? Downtown Parking
POLICY QUESTION: Should the City Council designate the Downtown Parking Fund as it was originally intended (Downtown Maintenance Fund) and broaden eligible expenditures?
12 Thank You.
Next: 15 Minute Break
13 Finance
Equipment Replacement Fund
Overview
• City currently has 85 vehicles
and equipment in use.
Aging
• Of the 85 vehicles and equipment in use, 39% are less than 5 years, 30% are between 6 and 10 years, 19% are between 11 and 15 years, and 12% are more than 15 years.
Less than 5 Yrs
39%
6 Yrs to 10 Yrs
30%
11 Yrs to 15 Yrs
19%
More than 15
Yrs.
12%
Less than 5 Yrs
6 Yrs to 10 Yrs
11 Yrs to 15 Yrs
More than 15 Yrs.
Less than 5 Yrs,
1,531,950
6 Yrs to 10 Yrs,
1,579,000
11 Yrs to 15 Yrs,
694,000
More than 15
Yrs., 953,000
Replacement Value
Less than 5 Yrs
6 Yrs to 10 Yrs
11 Yrs to 15 Yrs
More than 15 Yrs.
More Than 15 Years Aging (10)
Active Vehicles &Equipment Year Make Model Useful Life Age Count Replacement Cost Aerial Lift Truck 2001 Ford F750/LRV55 7-10 Years 21 1 140,000 2004 Ford F-350 (Small) 7-10 Years 18 1 65,000
Chipper 1997 N/A Chipper 9-14 Years 25 1 25,000
Emergency Generator 1990 N/A Emergency Generator/ Corp Yard 20 Years 32 1 140,000 1991 N/A Emergency Generator/City Hall 20 Years 31 1 130,000 1998 N/A Emergency Generator/ PD 20 Years 24 1 150,000
Heavy Truck 2006 Ford F-450 7-10 Years 16 1 60,000
Light Truck/ Van 2006 Ford E-350 Club Wagon 7-10 Years 16 1 41,000 Tractor-Backhoe 2001 N/A Diesel powered tractor/backhoe 2000 case 580SL 13-18 Years 21 1 110,000 Tractor-Loader 2001 N/A
Diesel powered tractor/loader 2000 case 570 LXT Turbo w/ Gannon scraper 13-18 Years 21 1 92,000
Grand Total 10 $953,000
All the vehicles and equipment on this list are beyond their useful life and need to be replaced immediately.
More Than 15 Years Aging (10)
Department Active Vehicles &Equipment Year Description Useful Life Age Count Replacement Cost MSC Emergency Generator 1990 Emergency Generator/ Corp Yard 20 Years 32 1 140,000 1991 Emergency Generator/City Hall 20 Years 31 1 130,000 1998 Emergency Generator/ PD 20 Years 24 1 150,000
MSC Total 3 420,000
Parks Aerial Lift Truck 2001 F750/LRV55 7-10 Years 21 1 140,000 Chipper 1997 Chipper 9-14 Years 25 1 25,000
Light Truck/Van 2006 E-350 CLUB WAGON 7-10 Years 16 1 41,000 Parks Total 3 206,000
Streets Aerial Lift Truck 2004 F-350 7-10 Years 18 1 65,000 Tractor-Loader 2001
Diesel powered tractor/loader 2000
case 570 LXT Turbo w/ Gannon scraper 13-18 Years 21 1 92,000 Streets Total 2 157,000
Sewer Heavy Truck 2006 F-450 7-10 Years 16 1 60,000
Tractor-Backhoe 2001
Diesel powered tractor/backhoe
2000 case 580SL 13-18 Years 21 1 110,000
Sewer Total 2 170,000
Grand Total 10 $953,000
MSC $420K; Parks $206k, Streets $157k, and Sewer $170k. Total= $953k Aging Between 11 Years to 15 Years (16)
Active Vehicles
&Equipment Year Make Model Useful Life Age Count Replacement Cost Chipper 2010 N/A Chipper 9-14 Years 12 1 27,000
Heavy Truck 2007 Ford F-450 7-10 Years 15 1 60,000
2008 Ford F-350 7-10 Years 14 1 45,000
F-450 7-10 Years 14 1 60,000
F-550 7-10 Years 14 1 60,000
2009 Ford F-650 7-10 Years 13 1 80,000
Lawn Mower 2010 Tora Mower 9-14 Years 12 1 22,000
Light Truck 2008 Chevrolet Colorado 7-10 Years 14 1 33,000 Ford F-350 7-10 Years 14 2 90,000
2009 Ford F-350 7-10 Years 13 2 90,000
Ranger 7-10 Years 13 2 66,000
Motorcycles/Scooters 2009 BMW Motorcycle 7-10 Years 13 1 28,000 Passenger Car 2008 Ford Fusion 7-10 Years 14 1 33,000
Grand Total 16 $694,000
• 14 out of 16 Vehicles and Equipment
are beyond their useful life with a
replacement value of $645k.
• The Lawn Mower and Chipper need
to be replaced within the next two
years, the replacement cost is $49k.
Aging Between 6 Years to 10 Years (26)
Active Vehicles &Equipment Year Make Model Useful Life Age Count Replacement Cost Aerial Lift Truck 2016 Ford F-550 Powerstroke 7-10 Years 6 1 130,000 Heavy truck-Vac-Con unit 2012 Peterbilt Vac-Con 350LHA 7-10 Years 10 1 425,000 2016 Peterbilt PB348 7-10 Years 6 1 425,000
Light Truck 2016 Nissan Frontier S-Series 7-10 Years 6 3 75,000 Motorcycles/Scooters 2013 BMW R1200RTP 7-10 Years 9 2 77,000 T3 Motion N/A 7-10 Years 9 1 12,000
Passenger Car 2015 Ford Police Interceptor/Sedan 7-10 Years 7 2 78,000 Toyota Prius One 5dr Hatchback 7-10 Years 7 5 165,000
2016 Honda Accord (Black) 7-10 Years 6 1 29,000
Accord (White) 7-10 Years 6 1 36,000
Passenger Car- Patrol 2012 Dodge Charger 5-6 Years 10 1 29,000 Passenger Car-CSO 2016 Ford Explorer 7-10 Years 6 1 38,000 Radar Trailer 2015 Stalker SAM 7 3 30,000
2016 Stalker SAM 6 2 20,000
Waste Corp Water Trailer 2016 Waste Utility: WT-500 Series 525US 10-15 Years 6 1 10,000 Grand Total 26 $1,579,000
• 5 out of 26 Vehicles and
Equipment need to be
replaced in the next year
with a replacement
value of $543k.
Less Than 5 Years (33)
Active Vehicles &Equipment Year Make Model Useful Life Age Count Replacement Cost Crack Trailer 2019 CRACK Trailer 9-14 Years 3 1 65,000
Heavy Truck 2017 Ford F-550 Crew Cab 7-10 Years 5 1 35,000 2018 Ford F-350 Super cab 4x2 7-10 Years 4 2 101,000
2020 Chevrolet Silverado 3500 crew cab 7-10 Years 2 1 61,000 Silverado 3500 crew cab (diesel) 7-10 Years 2 1 43,000
Lawn Mower 2017 John Deere Mower model #Z997R 9-14 Years 5 1 17,500 Light Truck 2017 Ford F-250 7-10 Years 5 1 38,000
2018 Ford F-150 4x2 Super crew 7-10 Years 4 1 55,000
2019 Ford Ranger (P/U)
7-10 Years
3 1 38,000
2020 Chevrolet Silverado
7-10 Years
2 1 36,000
Ford Ranger
7-10 Years
2 1 30,000
2021 Ford Ranger
7-10 Years
1 1 30,450
Motorcycles/Scooters 2017 BMW R1200RTP
7-10 Years
5 1 33,000
2020 BMW R1250RTP
7-10 Years
2 1 37,000
2021 Ford Police Interceptor/SUV
7-10 Years
1 1 62,000
Less Than 5 Years (continued)
Active Vehicles &Equipment Year Make Model Useful Life Age Count Replacement Cost Passenger Car 2017 Dodge Grand Caravan 4d Wagon SE Plus 7-10 Years 5 1 30,000 Ford Edge 7-10 Years 5 1 31,000
Explorer 7-10 Years 5 1 36,000
2019 Ford Fusion Energy 7-10 Years 3 1 36,000
2021 Ford Police Interceptor/Explorer 7-10 Years 1 1 45,000 Police Interceptor/SUV 7-10 Years 1 1 63,000
Passenger Car- Patrol 2018 Ford Police Interceptor/Explorer 5 -6 Years 4 1 55,000 Police Interceptor/SUV 5 -6 Years 4 2 110,000
2019 Chevrolet Tahoe 5 -6 Years 3 1 75,000
Ford Police Interceptor/Explorer 5 -6 Years 3 2 115,000 2020 Chevrolet Tahoe 5 -6 Years 2 1 74,000
Ford Police Interceptor/SUV 5 -6 Years 2 1 62,000
2021 Ford Police Interceptor/SUV 5 -6 Years 1 1 62,000
Police Trailer 2017 CARGO MATE 6x10 Utility trailer (ORCH610SA) N/A 5 1 4,000 Utility Truck 2019 Ford F550 7-10 Years 3 1 80,000
Utility Van 2021 Ford Transit Van 7-10 Years 1 1 34,000 Grand Total 33 $1,531,950
FY21/22 & 22/23 Budget
Beginning Fund Balance 7/1/2021 $389,459
Ending Fund Balance 6/30/2023 ($904,873)
Need Immediate Replacement ( Beyond useful life) (1,627,000) Need to Be Replaced Next Year (918,000)
Budgeted in FY21-23 Remaining 415,000
Funding shortfall for equipment replacement at 6/30/2023 ($3,034,873) Conclusion
• Equipment Replacement Fund audited FY21 year-end balance is $389,459.
The existing commitment for FY22 & FY23 is $1.29 million after which there is a budget deficit is $904k.
• The city has approximately $953k vehicles and equipment over 15 years old.
• Seven major pieces of equipment are more than 20 years old and need immediate attention for safety and efficiency. ($787k)
• Of the above seven, two of the three generators are over 30 years old ($270k). Generators usually have 20 years life span.
• Over $3 Million of replacement funds are needed by June 2023.
Questions?
Anthony Carnesecca
Economic Development Administrator
Los Altos
Downtown
Parking Fund
What is the Los Altos Downtown Parking
Fund?
• Established in 2003 by City Council along with the Downtown Employee Parking Permit Program
• Collects money from annual and quarterly parking permit sales • Two major goals
• Cover the ongoing operating costs
• Address Downtown’s maintenance needs
1/18/2022 2
Fund Balance
• Current Fund Balance: $890,000
• Current Obligations (2 years): None
• Projected Collections (5 years): $353,500
1/18/2022 3
Policy Statement
• City staff plan to utilize the funds to improve business and visitor access and attraction to the downtown.
• These funds will help our current businesses succeed while trying to attract new businesses to our community.
1/18/2022 4
Potential Uses
• Downtown WiFi
• Upgrade or repair parking plazas
• Improve lighting in parking plazas
• Increase wayfinding signage
• Improve electrical outlets for tree lights
• Distribute small business grants
• Beautification
• Events
• Explore the establishment of a Business Improvement District 1/18/2022 5
Policy Question
• Should the City Council designate the Downtown Parking Fund as it was originally intended (Downtown Maintenance Fund) and broaden eligible expenditures?
1/18/2022 6
Manny Hernandez
Maintenance Services Director
Los Altos Park
Equipment
Costs
Playground Replacement Costs
1/18/2022 2
Replacement Year Park (Year Installed) ADA Surface
Installation
Playground Structure
Replacement
Expected Replacement
Cost
Past Replacement Life Shoup (2004) $300,000 $600,000 $900,000 Past Replacement Life Marymeade (2007) $179,000 $300,000 $479,000 McKenzie (2007) $231,000 $400,000 $631,000
Past Replacement Life Grant (2008) $170,000 $300,000 $470,000 Montclaire (2008) $150,000 $250,000 $400,000
Heritage Oaks (2008) $ 92,000 $200,000 $292,000
Past Replacement Life Rosita (2011) $132,000 $200,000 $332,000 Unscheduled (28/29) Los Altos Youth Center (2018) $117,000 $200,000 $317,000 San Antonio Club (2018) $63,000 $ 150,000 $213,000
Total $1,434,000 $2,600,000 $4,034,000
Budgeted Amount $620,000
Percent Budgeted 15.4%
Playground Annual Operating Costs (Grant)
1/18/2022 3
Estimated Annual Cost Grant Park
Supplies PG&E Water
General
Maintenance
Maint, Equip, &
Replacement TOTALS
MP Building, Activity
Rooms, Restrooms $ 49,550 $ 8,000 $ 32,000 $ 22,000 $ 20,000 $ 131,550 Sports Field $ 2,000 N/A N/A $ 15,000 $ 25,000 $ 42,000 Basketball Court $ 100 N/A N/A $ 5,000 $ 4,000 $ 9,100
Playground $ 2,000 N/A N/A $ 5,000 $ 31,000 $ 38,000
Landscape $ 200 N/A N/A $ 15,000 $ 1,000 $ 16,200
Hardscape/
Furniture/Fence $ 500 N/A N/A $ 10,000 $ 5,500 $ 16,000 TOTALS $ 54,350 $ 8,000 $ 32,000 $ 72,000 $ 86,500 $ 252,850 Playground Annual Operating Costs (Rosita)
1/18/2022 4
Estimated Annual Cost Rosita
Supplies PG&E Water
General
Maintenance
Maint, Equip, &
Replacement TOTALS
Snack Shack Building $ 900 $ 1,400 $ 58,500 $ 5,200 $ 3,500 $ 69,500 Sports Field $ 3,000 N/A N/A $ 15,600 $ 37,500 $ 56,100 Tennis Courts $ 500 N/A N/A $ 5,200 $ 6,000 $ 11,700
Playground/ Exercise
equipment $ 2,000 N/A N/A $ 5,200 $ 22,000 $ 29,200
Landscape $ 200 N/A N/A $ 15,600 $ 1,000 $ 16,800
Hardscape/ Furniture/
Fencing $ 500 N/A N/A $ 5,200 $ 5,500 $ 11,200
TOTALS $ 7,100 $ 1,400 $ 58,500 $ 52,000 $ 75,500 $ 194,500 Policy Question
• Should the City Council Should the City Council fund current eligible expenditures from Park in Lieu funds as opposed to the General Fund?
1/18/2022 5
Irene Barragan Silipin, Human Resources Manager
Scott Gerdes, Human Resources Analyst
Employee
Recruitment
and Retention
Objective
Implementation of a compensation philosophy
outlining the goals and vision for personnel
retention and attraction in Los Altos.
Introduction
• Global Labor Challenges Today
• Current State of City of Los Altos Workforce
• Workforce Realignment Considerations
• Compensation Philosophy Implementation
While organizational objectives outline
what you want to get done,
culture defines how you get it done.
Global Labor Challenges Today
• Great Resignation – “The Resignation Tsunami” • 41% of U.S. workers resigning within the next 6 months. • 39% of a survey indicated resignations happening without a new job in hand • 70% of U.S. workers claim to now work on longer hours and weekends • Labor Shortage
• Unemployment Rates at 3.9%
• 30% of U.S. workers actively job hunting
• Talent Exodus
• Employee’s Market
• War of Talent
• Draining of the talent pool
City of Los Altos Employee Workforce
Total FTEs: 123
Total PT: 42
Combined: 165
Engineering Services, 11
Police, 45
Finance, 5 Legislative & Executive, 11
Community Development, 12
Maintenance Services, 29
Recreation & Community Services, 10
City of Los Altos FTE Snapshot
Employee Average Years of Service
0 10
20 30
40 50
60 70
15 - 19 Years of 20+ Years of Service
Service
10 - 14 Years of
Service
0 - 5 Years of Service 5 - 9 Years of Service
15 8 16 21
63 City of Los Altos
FTE Years of Service
Employee Average Years of Service
Example
0 1
2 3
4 5
6 7
8 15 - 19 Years of 20+ Years of Service
Service
10 - 14 Years of
Service
0 - 5 Years of Service 5 - 9 Years of Service
0 0
2 1
8 Engineering Services Department
FTE Years of Service
Current Total Compensation Overview
• Total Compensation Market Comparison
• Under-market in the Overall Salary and Benefits
• Vacation Accrual
• Retiree Medical
• Observed Holidays
• Learning and Development Program
• Educational Assistance Program
• Example
• Observed Holidays and Holiday Closure
The Great Realignment
If we want to be competitive, we must
start with investing in the individuals
that are already part of our workforce.
Workforce Realignment Considerations
• Invest in Our Workforce
• Blend of personal and work life
• Flexibility
• Hybrid Work Schedules
• Talent War
• Prioritize Internal Promotions
• Employee Professional Development
• Offer Perks that Matter
Workforce Realignment Considerations
• Enhance Total Compensation Benefits Package
• Increase Observed Holidays
• Juneteenth, Indigenous People’s Day, Cesar Chavez, Holiday Closure, Floating Holidays • Professional Development/Higher Education Paid Program • Pay for Performance
• Cash-outs
• Vacation and Management Leave
• Wellness Program
Compensation Philosophy
What is a compensation philosophy?
• Formal statement documenting our agencies position about employee compensation and benefits
Compensation Philosophy Importance:
• Provides valuable input and direction.
• Explains the “why” behind employee pay, benefits and creates a framework for consistency.
• Assists with attracting, retaining and motivating employees. • Defines how we plan to pay and reward competitively, based on market conditions, competition and ability to pay.
Conclusion
• Establish a compensation philosophy
• City Staff will develop compensation and benefits package that align with adopted philosophy.
Thank You
Questions?
Police Facility Subcommittee Report to City Council
January 18, 2022
The subcommittee recommends that the Council direct staff to place a bond measure on the November, 2022 ballot. We explored three types of Bond Measures to finance a new police facility:
1. Citizens’ Initiative (requires a majority vote of residents to pass)
2. General Tax (also requires a majority vote)
3. Special Tax (requires a two-thirds vote)
The ballot Measure would either raise an existing tax or create a new one as the source of revenue.
A citizens’ initiative is a Bond Measure placed on the ballot by non-government parties. Although recent court decisions have confirmed that a citizens’ initiative may be approved with a simple majority vote, the subcommittee recommends against this approach due to:
• Potential legal risk (e.g., a challenge if approved by >50% but less than 66.6% of voters) • Process and timelines to qualify the initiative for the ballot (must obtain signatures from 10% of registered Los Altos voters)
• Council and Staff could play no role in helping the process move forward, leaving the city without any input on the measure.
The subcommittee recommends Council consider proposing either a General Tax or a Special Tax, key differences are summarized in the table:
Source: 2016 League of California Cities
(http://www.californiacityfinance.com/WCCaCityRevenuePrimer1612.pdf) In addition, the subcommittee is exploring the scope of the facilities the Council ought to consider improving with the proceeds from the Bond Measure. Most narrowly we could target funding a police facility only (with or without IT), or more broadly include public safety infrastructure (police and fire), or even more broadly include a library (Campbell passed a Bond Measure for Police and Library in 2018, see below). Generally, the larger the financial ask of the voters, the lower the likelihood of achieving voter approval, especially the two-thirds majority required for a Special Tax. On the other hand, expanding the scope of intended investment might attract more constituencies to support the Bond Measure.
As a recent, local example, a bond issue to fund police facilities and a library meeting fire and earthquake codes was on the ballot for Campbell voters in November 2018. It was put on the ballot by the Campbell City Council on June 19, 2018. The Measure asked voters to authorize the city to issue up to $50 million in bonds at an estimated tax rate of $0.019 per $100 in assessed value to fund an emergency police operations center, police station updates, and a library meeting fire and earthquake codes. It required a two-thirds majority to pass and it was approved 69.6% to 30.4%.
Moving forward, we would need to work with an investment banker and bond counsel to facilitate the process; their compensation is based on the Measure passing. The City Manager facilitated a meeting between the subcommittee and Stifel Financial Advisors to understand the investment banker’s role.
Regarding the timeline, the deadline to submit a Measure to the Registrar of Voters is August 12, 2022.
Other options the subcommittee explored but do not recommend that the council consider are:
• Borrowing from an institutional lender. While a commercial loan does not need voter approval, the City would be obligated to put up collateral. Moreover, interest rates for a commercial loan are higher than for a bond, making this option the most expensive. • Do nothing. The subcommittee trusts that the Council agrees that this is not an acceptable option, as the problems with the existing police facility are well known.
The subcommittee seeks the following direction from the Council:
• Confirmation that the subcommittee should explore only a Council-proposed ballot measure (general tax or specific tax)?
• Does Council agree with the Subcommittee that we should continue to explore the size and scope (Police/Public Safety/Library) of a bond measure with outside experts or would the Council prefer to determine the scope of a measure now? • Does Council agree that the subcommittee should start working with appropriate outside advisors (investment bankers, bond counsel, etc.) to identify the best options to place before the voters?
• Approval from Council to work with staff to identify the best sources of revenue to finance the bond measure.
Manny Hernandez, Facilities Director
Gabriel Engeland, City Manager
Prioritization
of City-Owned
Facilitates
City-Owned
Facilities,
Priorities
The City must continually invest in public
safety, public works, parks and recreation,
and personnel.
2 How Were
Assets
Organized?
Urgency
Low
Medium
High
Resource Use
Low ($2M or less)
Medium( $2M-$5M)
High ($5M+)
Potential Schedule
Immediate (FY 22/23)
Near-Term (5 Year CIP)
Future (Unscheduled)
3 Timing:
Immediate
Facility Urgency Resource Use Timing
Caretaker House High Low Immediate
Halsey House High Low Immediate
Fire Station Almond High Medium Immediate
LAYC/City Hall High Low Immediate
Park/ADA High Low Immediate
Police Facility High High Immediate
4 Timing:
5-Year-CIP
Facility Urgency Resource Use Timing
Bus Barn Theater Medium Unknown 5-Year CIP
Fire Station Loyola Medium Medium 5-Year CIP
Garden House Low Medium 5-Year CIP
Grant Park Senior Ctr High Medium 5-Year CIP
MSC Low Low 5-Year CIP
5 Timing:
Unscheduled
6 Facility Urgency Resource Use Timing
999 Fremont Low High Unscheduled
Underground Facilities Low Low Unscheduled
Action
Requested
The City Council is not being asked to prioritize specific facilities or assets within the given listed timeframe, but instead determine which projects should be categorized
within each timeframe area (Immediate, 5-Year CIP,
Unscheduled).
Once the projects are categorized appropriately, the City Council will be able to prioritize specific projects as part of the normal budget process.
7 Action
Requested
Does the City Council agree with timing of
the projects listed?
• If yes, Staff will plan accordingly in future budget years. • If no, what changes should be made to the timing and/or priority of these facilities?
8 Laura Simpson, Interim Planning Director
Steve Golden, Interim Planning Services Manager
Development
Services Cost
Recovery
through Master
Fee Updates
Planning Fees for Development Permits
• Currently, Planning charges a flat fee for processing depending upon the type of development.
• Because the development review process requires a substantial number of committees and hearings—e.g. Complete Streets, Historic, Design Review, Planning Commission, and Council, staff time spent on specific developments is not fully recovered through the flat fee structure. • Staff time varies by project, based upon complexity, size, etc. Some projects may return to a single commission several times.
Recovering Costs Above Flat Fees
• If a development project requires additional time, staff review, or public hearings, staff can track the hours and bill the developer monthly for the actual hours worked on the project.
• Staff costs include salary and benefits, which can be calculated on an hourly basis based upon position, e.g. senior planner or associate planner.
• This will allow the City to recover costs for a significant portion of planning work that is associated with private development that exceeds flat fee amounts.
General Plan Fee
• Currently, there is no fee collected that associated with General Plan Maintenance and Implementation
• Most cities have established a fee collected as a percentage of building permit fee or construction valuation
• A General Plan Maintenance Fee would be used for General Plan Update, City Initiated GP Element Amendments, and Code
Amendments to Implement General Plan
Costs Not Recoverable
• Planning costs include unfunded state mandates, such as SB9, SB330 and others.
• Planning also handles questions from residents in the pre-submittal phase which is not cost recoverable.
• Permit Center counter is open 7:30-4:30 Monday through Thursday and by virtual appointment on Fridays. Most of this time is not billable or recoverable.
Benefits of Cost Recovery
• City is reflecting actual time worked on private development and not subsidizing private sector.
• Fees will be used to assure appropriate staffing levels are achieved when building development cycles are higher or lower.
• A General Plan fee, if approved, could be used for future Long Range Planning for the General Plan update.
Fee Recommendations
1. Include an hourly rate for planning in the fee schedule, based upon the 2019 cost allocation study, to allow planners to track actual time and recover staff costs associated with private development, when it accrues above and beyond the flat fee amount, particularly for large, time intensive projects.
2. Include a 1% of building permit valuation fee for General Plan update.
Funds collected will support the expense of the update. Next General Plan update is imminent.
3. These updates can be incorporated in the Master Fee Schedule update in February.
Affordable Housing Fees
Why Impose Housing Fees?
• To create an affordable housing trust fund to subsidize housing at low- and very low-income levels
• To leverage state and federal funds, as discussed later in the presentation
Types of Fees
• Impact Fees: These are fees imposed on market-rate
units, which are calculated based upon the need for
affordable housing created through the production of
market-rate units.
• In-lieu Fees: These are fees paid as an alternative to constructing affordable units to comply with an
inclusionary ordinance.
Types of Fees (Cont’d)
• It may be difficult to show a nexus between the production of market-rate units and the need for affordable units.
• California Building Industry Assn. v. San Jose: California Supreme Court approved in-lieu fees without proving a nexus • Some agencies also do a nexus study before imposing in-lieu fees.
Notes About Establishing In-lieu fees
• It is recommended to conduct a feasibility study to ensure inlieu fees are reasonable. • Some agencies set in-lieu fees intentionally low (i.e., less than the cost to construct the inclusionary units onsite). This is to prioritize payment of fees.
Why Some Cities Prioritize Inclusionary
• Inclusionary housing result in units on the ground now, not later.
• Inclusionary housing integrates people at all income levels. • Inclusionary housing policies generate affordable for-sale opportunities. Fees are almost always used to generate rental housing.
Why Some Cities Prioritize Fees
• Fees have the potential to generate more overall affordable units in the long-term.
• Fees generate more rental housing opportunities.
• Local subsidies leverage state and federal funds.
• Local agencies have more discretion over projects as lenders than as planning agencies.
Leveraging Federal and State Funds
• Most affordable housing is constructed using a combination of federal tax credit financing and loans.
• These sources cover most, but rarely all, the costs of constructing projects. The additional funding needed is called “gap funding.”
• Local agency housing trust funds are one source of gap funding. • The availability of local gap funding is a criterion used to allocate competitive (9%) tax credits, loans funded through tax exempt bonds, and state gap funding sources.
Notice of Funding Availability (NOFA)
• What does a city do once it has money in its housing trust fund?
• Start by issuing a NOFA.
• A NOFA invites developers to submit proposals for funding.
The agency ranks the choices and funds the best projects.
Grants or Loans
• Loans are more typical because:
• Loans allow affordable developers to choose whether their projects will be prevailing wage projects.
• Loans create more financial incentive for “follow through.” • Repaid loan funds go back to the housing trust fund to pay for future projects.
Residual Receipts Loans
• A common loan structure is a “residual receipts loan.” • Residual receipts are project revenues minus expenses, including debt service on superior financing.
• Rather than requiring a set repayment amount each year, a city might require, for example, that 50% of residual receipts be paid back to the city, with the balance due in 55 years. • Interest is commonly charged, although at a below-market or nominal rate, or sometimes only if the borrower is in default.
Pre-Development Loans
• The riskiest stage of a project at which to lend funds is the predevelopment stage. • Risk at this stage can be minimized, but it cannot be avoided. • Because it can be difficult to obtain financing at this stage, small pre-development loans can be helpful in ensuring that projects materialize.
• For this reason, it is common for city funds to be awarded in the form of pre-development loans.
Questions
Thank You. Next: Wrap-Up
9 Recap
Anita Enander, Mayor
IF YOU DON’T KNOW WHERE
YOU’RE GOING, ANY PATH
WILL TAKE YOU THERE. With apologies to Lewis Carroll
1 FY 20-21 – $4 Million Oops
! Fortunately, CARES/ARPA compensated (we had
planned for these funds)
! Fortunately, property tax and sales tax were above
conservative estimates
! Short $2M for planned CIP
! We are below our 20% Reserve by ~$600K
! A balanced budget is not always a good budget if it
does not include essential expenses
2 FY 21-22
! Will know in a month
! Early indicators we will be ok, thanks to more CARES/ARPA $ and continuing increase in property tax
! As with FY 20-21, some essential expenses were not included 3 Long Term
! Need to budget for pension, fleet, and facilities costs ! Backlog of these expenses
We need a plan to get out of this hole
4 Annual Backlog Requirement
Community Center $ 622,090
UAL 3-4,000,000
Fleet 1,000,000
CIP 4,500,000
Additional upward pressure on salaries and benefits
City CIP funds needed to get certain tax and matching revenue In good years: $3-5 Million (general revenue minus operational expenses) available for other expenses. Not $ 8-10 Million, as above. 5 Looking Forward
! New financial staff is highly competent and has tools to do the job ! Council must be disciplined in our budgeting
! City Manager and E-staff – new / cost-effective ways of doing business ! Excellence in execution
6 Staff Resources
! Establish policies that will allow us to recruit and retain the highly competent staff needed to deliver services our residents expect ! Support City Manager as he rebuilds the staff – make decisions and follow-through
7 Integrating Other Priorities
! Calendar 2021 priorities were: Housing, Land Use, Fiscal Sustainability, Community Safety, Asset Management, Environmental Sustainability, Community Engagement, and Transitioning Through Change. ! How would Council like to revisit and integrate other priorities into the Calendar year 2022 and FY 2022-23 budget planning?
8 Maintaining Discipline
! For the next 2-5 years, we must pursue these objectives and not become distracted.
9 PUBLIC CORRESPONDENCE
The following is public correspondence received by the City Clerk’s Office after the posting of the original agenda. Individual contact information has been redacted for privacy. This may not be a comprehensive collection of the public correspondence, but staff makes its best effort to include all correspondence received to date.
To send correspondence to the City Council, on matters listed on the agenda please email [email protected]
From: Bill Hough
To: City Council; Public Comment
Cc: Andrea Chelemengos
Subject: [External Sender]Public Comment of Agenda Item 1 for January 18, 2022 Date: Monday, January 17, 2022 3:53:40 PM
Regarding this policy question regarding the Downtown Parking Fund: “Should the City Council designate the Downtown Parking Fund as it was originally intended (Downtown Maintenance Fund) and broaden eligible expenditures?”
This is an empathetic NO! “Small business grants, downtown wi-fi, beautification, events, and other items that improve the quality of life for residents” might be “nice to have” things, but at the moment they need to be set aside, given all the pressing demands on the city’s budget. The items listed above should be privately funded, assuming that they should be funded at all.
Keep the Downtown Parking Fund narrowly focused. Going forward, the City should charge rent to restaurants that continue to use street space for dining.
Regarding the question of “Should the City Council fund current eligible expenditures from Park in Lieu funds as opposed to the General Fund?,” the answer is another “yes” because we do not want to spread the general fund too thin.
Bill Hough
Los Altos
From: Joe Beninato
To: Public Comment
Subject: Public Comment - Special City Council Meeting January 18, 2022 Date: Tuesday, January 18, 2022 1:23:47 PM
Hello City Council, City Manager and Staff,
Since I suspect we will have limited time to speak today, I decided to submit my prepared comments via email as well in the hopes that you will see it at some point soon.
I reviewed the meeting materials this weekend, and have to admit I am very concerned about the state of Los Altos right now. From budget shortfalls to unfunded pension obligations to crumbling infrastructure to the taxpayer dollars wasted on unnecessary lawsuits and bad computer software…we’ve obviously got some challenges to tackle.
Without getting into the blame game, I think it’s important to focus on 3 things:
• We need to understand how we got here, so we can avoid more issues like this moving forward.
• We need to understand where we are now.
• We need to have short, medium and long term plans for how to prioritize what matters and fix it.
I commend City Manager Engeland and his staff for identifying these issues for the City Council. I have a few observations that tell me we have our work cut out for us.
Public safety is always top of mind for any city. For us to be in the situation we are in with the police station and to a lesser extent the Almond fire station is unacceptable. Chief Galea and his team put their life on the line every day, and we have decided that having them work in a building that floods with bad wifi and people working out of trailers is OK? It is time for us to stop paying lip service to how important our first responders are, and step up to provide them with not just adequate facilities, but excellent facilities.
One glaring issue in the materials is the turnover rate and morale of the city staff. Again, this is unacceptable. The current staff works incredibly hard to keep up with their limited resources. I think City Manager Engeland was a great hire, and the council now needs to give him the resources and space he needs to add great hires to the team and manage the city. You need to trust the staff and not micromanage them. While we are a small city, we have high expectations for our city services, and we need to match the budget to our high expectations.
Finally, I am very concerned that our infrastructure is in poor condition. I know for a fact that the street I live on has not been resurfaced in at least 15 years, which is as far back as my neighbors and I can remember. While I’d love to have our potholes fixed and our street resurfaced once in a while, it points to a bigger problem that we are not investing in maintaining our infrastructure properly. There should be a minimum expectation that our streets aren’t riddled with potholes, our electricity, water, sewers, Internet and cellular serices work properly, and we’re budgeting appropriately to ensure we don’t have issues in the future.
Thank you for your consideration of these issues.
Joe
…………………………
Joe Beninato
From: Pat Marriot
To: Public Comment
Subject: PUBLIC COMMENT AGENDA ITEM C - January 22, 2022 CITY PROPERTY & FACILITIES Date: Tuesday, January 18, 2022 3:23:56 PM
Council Members:
Just say NO. We don’t have enough city property that we can afford to donate it or rent/lease at low rates to any non-city group that asks.
We already have an issue with Friends of the Library who had an agreement to vacate the civic center, but then asked for more time.
Which worthy groups are entitled to pubic land? Who gets priority? To avoid problems, just make it a hard and fast rule that city property and city facilities are for city uses.
Thank you,
Pat Marriott
From: Pat Marriot
To: Public Comment
Subject: PUBLIC COMMENT AGENDA ITEM E - January 22, 2022 TREE PROTECTION Date: Tuesday, January 18, 2022 3:41:43 PM
Attachments: image003.png
Council Members,
As we add more and denser housing to the city, it will be difficult to keep and maintain our tree canopy, which is one of the things that makes Los Altos special – and contributes to a healthy environment.
An environmental consultant for Los Angeles found major problems with that city’s urban forest. Recommendations were made for “Urban Forest General Plan Element,” which might be over the top, but could be considered. In any case these suggestions were proposed for an Urban Forest Plan:
·Tree selection should emphasize native species because they have evolved to tolerate historical variations in local temperature and rainfall, including heat waves and droughts.
·Tree planting must be followed by watering until trees are fully established, plus trees must be pruned in perpetuity.
Tree planting and maintenance must be properly funded. Comparable cities [to Los Angeles] devote 1 percent of their municipal budget to the urban forest.
The implementation must ensure equitable outcomes for all neighborhoods.
City departments that deal with urban forest issues, whether in public areas or on private parcels, must synchronize their operations.
To assure the proper implementation, policies and programs must be carefully monitored.
See: https://www.citywatchla.com/index.php/cw/los-angeles/23553-la-has-ignored-its-urbanforest-who-will-pay-the-price-for-this-negligence Pat Marriott