CityCouncil_SpecialSession_Attachments_05_10_2022 — Milpitas City Council, May 10, 2022 (part 2 of 2)

Appendix
274 City of Milpitas
308
Item # 1.

Land
Land – Purchase price plus legal and title fees, professional fees, surveying fees, site preparation cost, and/or any cost incurred to place land in condition for its intended use.

Land Improvements
Land Improvements – Permanent improvements, other than buildings, that add value or useful life to land.

Examples are parking lot, fence and gates, retaining walls, fountains, swimming pools, tennis courts, trails and paths.

Buildings and Improvements
Buildings and Improvements – Permanent structures purchased or otherwise acquired by the City. Includes the principal amount of capital lease payments resulting in the acquisition of the building. Payments to building authorities or similar agencies are not to be included in the acquisition cost. The category includes improvements to buildings owned by the City of Milpitas. Examples are additional installation of heating and ventilating systems, and installation of fire protection system.

Infrastructure
Infrastructure – Public domain capital assets includes roads, curbs and gutters, streets and sidewalks, drainage systems, lighting systems, landscape systems, storm systems and traffic systems.

Vehicles
Vehicles – Equipment used to transport persons or objects. Cost includes transportation charges, sales tax, installation costs and extended maintenance or warranty contracts, if purchased at the same time of the equipment. Examples are police cars, fire trucks, and maintenance trucks. Accessories and installation costs can be included if done during the purchase or within 30 days after the purchase of the vehicle.

Capitalized Leases
Capitalized Leases – Principal lease payments for land, building, and/or equipment that will be acquired or subject for ownership within the term of the lease or at the end of the lease. Once acquired, it will be reclassified as land, building, or equipment. Lease contract usually has a clause indicating the option to buy.

Machinery and Equipment
Machinery and Equipment – Any single machinery or equipment except vehicles and computer hardware and software, with an acquisition cost of $5,000 or more per unit and have a useful life of two or more years.

Examples of machinery and equipment are printing press, lathe machines, drill presses and movable generators.

Computer Hardware – Example is a server.

Computer Software – Examples are the Accounting Software being utilized by the City of Milpitas Finance Department and the Best Fixed Assets system.

Furniture and Fixtures
Furniture and Fixtures – Office furniture and building fixtures.

Adjustments - Capital Improvement Program (CIP)
Adjustments - CIP – Account being used to record year-end CIP adjustments in accordance to the Generally Accepted Accounting Principles (GAAP) to reclassify CIP capital expenditures to the Fixed Assets.

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Item # 1.

Capital Outlay < $5,000
Capital Outlay < $5,000
In addition to the fixed asset categories above, the City of Milpitas performs a risk assessment on City assets to identify those at risk or vulnerable to loss. Items that have a unit acquisition cost of less than $5,000 but are vulnerable to loss is to be recorded to the following detail codes. Items that are not falling under the categories below should be charged to supplies categories.

Office Furniture and Fixtures
Office Furniture and Fixtures – Examples are chair, table, dividers and workstations.

Machinery and Equipment
Machinery and Equipment – Examples are fax machines, firearms, weapons, and defibrillators.

Computer Hardware – Examples are desktop computers, laptops, printers, and scanners.

Computer Software – Examples are application and utility programs such as Microsoft Windows programs.

Electronic Equipment – Examples are cell phones, radios, PDAs, digital cameras, and televisions.

Hydrants and Meters
Hydrants and Meters – Cost of fire hydrants and water meters.

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Item # 1.

List of Funds
100 General Fund 300 Capital Projects Funds (cont)
100 General Fund 314 Vehicle Registration Fee
103 1452 S. Main 315 Calaveras Widening Impact Fee
104 Cable Rebate 316 Montague Widening Impact Fee
105 Abandon Vehicle Abatement 317 Milpitas Business Pk Impact Fe 106 Short Term Disability 320 Park Improvement Fund
109 Utility Rate Assistance 321 Park Improvement CIP
130 Private Jobs Developer Deposit 322 Midtown Park Fund 150 Redevelopment Administration 330 General Government 180 American Rescue Plan Act 331 General Government CIP 199 Allocation Fund 334 2020 Fire Station Bonds
200 Special Revenue Funds 340 Storm Drain Development CIP 211 Hetch Hetchy Ground Lease 341 Storm Drain Project Fund 213 Public Art Fund-Nonrestricted 342 Storm Drain General Fund 214 Community Planning Fund 350 Transit Area Impact Fee Fund 215 Community Benefit Fund 351 Transit Area CIP
216 Affordable Hsng Community Benefit 352 Piper Montague Infrastructure 217 Affordable Hsng Unrestricted Fund
221 Gas Tax Fund 400 Enterprise Funds
222 Measure B 400 Water M & O Fund
225 SB1 Road Maintenance & Rehabilitation 401 Water CIP 235 95-1 Light & Landscape Maint Dist. 402 Water Line Extension Fund 236 98-1 Light & Landscape Maint Dist. 403 2019 Water Bonds 237 2005 Community Facility Dist 405 Water Infrastructure Replacement 238 2008 Community Facility Dist 406 Recycled Water Fund 250 HCD Fund 450 Sewer M & O Fund
251 HCD Loan 451 Sewer CIP
261 Supplemental Law Enforcement S 452 Treatment Plant Construction Fund 262 State Asset Seizure 453 2017 Sewer Refunding Bonds
263 Federal Asset Seizure 454 2019 Sewer Bonds
267 Federal Grant Police 455 Sewer Infrastructure Replacement 268 State Grant Police
269 Fire Grant 500 Internal Service Funds
280 Solid Waste Services 500 Equipment Replacement Fund 295 Housing Authority Fund 505 Information Technology Replacement 506 Permit Automation Fund
300 Capital Projects Funds
310 Street Improvement Fund 930 Successor Agency
311 Street CIP 930 Successor Agency
312 Traffic Impact Fees
313 Traffic Congestion Relief
Appendix
City of Milpitas 277
311
Item # 1.

List of Departments / Divisions / Functions
1 City Manager 6 Recreation and Community Services
10 City Council 45 Recreation and Community Services
100 City Council 161 Recreation Administration
11 City Manager 162 Senior Services
111 City Manager 164 Youth Program
114 City Clerk 167 Special Events
116 Economic Development 168 Marketing
169 Performing Arts
2 City Attorney 170 General Classes
12 City Attorney 171 Aquatics
120 City Attorney 172 Sports & Fitness
175 Social Services
3 Finance
30 Finance Administration 7 Police
300 Finance Administration 70 Police Administration
31 Finance Operations 700 Police Administration
310 Finance Operations 71 Technical Services
323 Fiscal Services 711 Records
712 Personnel & Training
4 Public Works 713 Communications
42 Public Works 72 Field Services
400 Public Works Administration 721 Patrol Services
421 Street Maintenance 722 Traffic
422 Utility Engineering 723 Crossing Guards
423 Utility Maintenance 73 Special Operations
424 Park Maintenance 714 Community Relations
425 Trees & Landscape Maintenance 724 Investigations
426 Fleet Maintenance
427 Facilities Maintenance 8 Fire
428 Compliance 80 Fire Administration
430 Solid Waste 801 Fire Administration
81 Operations Division
5 Planning 812 Operations
51 Planning 82 Prevention Division
512 Planning 821 Fire Prevention Administration
513 Long Range Planning 822 Fire Prevention
83 Training, Emergency Medical Services, & Safety
801 Fire Administration
814 EMS Transport Services
84 Office of Emergency Services
840 Office of Emergency Management
Appendix
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Item # 1.

List of Departments / Divisions / Functions
11 Information Technology 9 Non-Departmental
14 Information Technology 91 Non-Departmental
112 Information Technology 910 Non-Departmental
92 Debt Service
12 Human Resources 920 Debt Service
15 Human Resources 93 Equipment to be Depreciated
115 Human Resources 930 Equipment to be Depreciated
94 Properties Management
13 Building Safety and Housing 941 1432 S. Main
53 Building Safety and Housing 942 1452 S. Main
531 Building Inspection 95 Other Functions
532 Plan Review 951 Capital Improvement Projects
533 Building Safety and Housing
Administration 99 Transfers
534 Permit Center 991 Transfers
536 Housing and Neighborhood Svcs 992 Transfers (Intrafund) 551 Housing
14 Engineering
41 Engineering
411 Engineering Administration
412 Design & Construction
413 Land Development
415 Traffic Engineering
Appendix
City of Milpitas 279
313
Item # 1.

List of Revenues
300 Property Taxes 3150 Transient Occupancy Tax (cont)
3010 Secured & Unsecured 3168 Sonesta Silicon Valley
3011 Current- Secured Property Taxes 3169 Residence Inn by Marriott 3012 Current-Unsecured Property Tax 3170 Best Value Inn 3020 Property Taxes-Prior 3171 Towneplace
3021 Prior-Secured Property Taxes 3172 Stay Bridge Suites 3022 Prior-Unsecured Property Taxes 3173 Synergy Corporate Housing 3521 Homeowners Property Tax Relief 3174 Holiday Inn
3531 Property Tax, Supplemental 3175 Short Term Rentals (STRs) 3013 Property Tax-VLF 3176 Spring Hill Milpitas
3013 Property Tax-VLF 3177 Element Milpitas
3014 Property Tax-ERAF
3014 Property Tax-ERAF 313 Franchise Fees
3051 RPTTF Distribution 3131 Electric Franchise
3051 RPTTF Distribution 3131 Electric
3132 Gas Franchise
305 Sales Taxes 3132 Gas
3110 Sales and Use Tax 3137 Nitrogen Gas
3110 Sales and Use Tax 3133 Garbage Franchise
3111 Public Safety Sales and Use Tax 3133 Garbage - Commercial 3113 Sales Tax - Measure F 3134 Garbage - NonComm - Resi 3135 Garbage - Multi Family
310 Transient Occupancy Tax 3136 Garbage - Debris Box
3150 Transient Occupancy Tax 3139 County-wide AB 939 Fee 3151 Holiday Inn & Suite 3138 Cable TV Franchise
3152 Embassy Suites 3138 Cable TV
3153 Crowne Plaza
3154 Sheraton
3155 Best Western Brookside 315 Other Taxes
3156 Larkspur Landing 3120 Other Taxes
3157 Park Inn 3120 Real Estate Transfer Tax
3158 Audited T O T 3140 Business License Tax
3160 Executive Inn 3511 Motor Vehicle in-Lieu
3161 Days Inn 3549 Sec 2032 - RM&R
3162 Extended Stay of America 3540 Gas Tax
3163 Hampton Inn - Milpitas 3543 Sec 2103-Gas Tax
3164 Hilton Garden Inn 3545 Sec 2105-Gas Tax
3165 Homestead Village 3547 Sec 2107-Gas Tax
3166 Marriott Courtyard 3548 Sec 2107.5-Gas Tax
3167 Milpitas Travelodge
Appendix
280 City of Milpitas
314
Item # 1.

List of Revenues
320 Licenses, Permits & Fines 340 Use of Money & Property 3210 Building Permit & Inspection Fees 3430 Investment Interest 3210 Building Permits 3431 Pooled Interest (nonallocation) 3213 After Hours Inspection 3432 Cash with Fiscal Agents 3214 Re-Inspection 3433 Other Interest Income
3215 Dedicated Building Services 3434 Pooled Interest (allocation) 3216 Mobile Home Inspections 3435 Gain/Loss on Investments 3218 Building Investigation 3435 Gain/Loss on Sale of Investments 3219 Building Misc Fees & Permits 3437 Gain on Bond Refunding 3217 Building Plan Review Fees 3436 Year End Market Value Adj 3211 Plan Review Revisions 3436 Market Value Gain/Loss on Inv 3212 After Hours Plan Review 3770 Sale of Property, Plant and Equipment 3217 Plan Review 3770 Sale of Property, Plant and Equip. 3220 Fire Permit & Inspection Fees 3771 Fire Safe Program 3220 Haz. Materials Const Permit/In 3772 Police Abandon Properties 3221 Life Safety Const. Permit/Insp
3250 Fire Inspections 350 Intergovernmental Revenue
3251 Building Standards/Life Safety 3550 Federal Contributions 3252 Fire Expedited PC/Inspections 3551 Federal Contri-General Gov 3240 Fire Annual Permit & Inspection Fees 3553 Federal Contri-Building 3222 Haz. Materials Annual Permit/I 3554 Federal Contri-Public Works 3223 Fire Penalties 3555 Federal Contri-Engineering
3240 Life Safety Annual Permits/Ins 3556 Federal Contri-Recreation 3260 Other Licenses & Permits 3557 Federal Contributions-Police 3261 Animal Licenses 3558 Federal Contributions-Fire
3300 Fines & Forfeits 3559 Federal Contri - Planning
3301 Vehicle Code Fines 3560 State Contributions
3302 Other Court Fines 3561 State Contr-General Government 3304 Hazardous Materials Fines 3562 POST Grant
3305 Booking Fees 3563 State Contributions-Building
3306 NBO Violation Fees 3564 State Contri-Public Works
3307 Impound Fees 3565 State Contri-Engineering
3308 Animal Violations 3566 State Contribution-Recreation 3309 False Alarm Fee 3567 State Contribution-Police
3310 Fire Administrative Citation 3568 State Contribution-Fire 3311 Building Admin Citation 3569 State Contributions - Planning 3312 Planning Admin Citation 3570 County Contributions
3313 PW Municipal Code Fines 3571 County Con-General Government 3321 Urban Runoff Fines 3572 South Bay Water Recycling Prog Appendix
City of Milpitas 281
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Item # 1.

List of Revenues
3570 County Contributions (cont) 3630 Fire Services
3573 County Contribution-Building 3631 PJ Overhead Charges - Fire 3574 County Contribution-PW 3632 PJ Labor Reimb - Fire
3575 County Cont-Engineering 3633 Fire Cost Recovery
3576 County Contribution-Recreation 3634 Fire Unwanted Alarms 3577 County Contribution-Police 3635 Fire Enforcement Penalties 3578 County Contribution-Fire 3636 Fire Enforcement-Training 3579 County Contributions-Planning 3637 Fire Service Charges 3580 Other Restricted Grants 3638 Fire Sales of Maps & Document 3581 Other Res Grants-General Govt. 3639 Fire Electronic Archive Chg 3582 SB90 Grant 3691 Fire GIS Mapping
3583 Other Res Grants-Building 3692 Fire Automation Fee 3584 Other Res Grant -PW 3693 Fire-Rent, Lease & Concess 3585 Other Res Grant-Engineering 3694 Ambulance Services 3586 Other Restri Grants-Recreation 3640 Police Services 3587 Other Restri Grants-Police 3641 Police Service Charges 3588 Other Restri Grants-Fire 3643 Fingerprints
3589 Other Restri Grants-Planning 3644 Sales of Maps and Document-Pol 3590 Misc. Unrestricted Intergovernmental 3645 Police Cost Recovery 3591 Mis Unrestricted Intergovernmental 3646 Rent, Lease and Concession-Pol 3647 DUI-Police Cost Recovery
360 Charges For Services 3648 PJ Overhead Charges - Police 3600 General Government 3649 PJ Labor Reimb - Police
3601 General Govern Service Charges 3650 Recreation Services 3602 Sale of Maps and Documents-GG 3651 Rent,Lease and Concession-Recr 3603 Rent, Lease & Concession-GG 3652 Recreation Fees
3604 Business License Procng Fee 3653 Senior Nutrition Fees 3608 PJ Legal Overhead Charges 3654 Contract Classes
3609 PJ Legal Reimbursement 3655 Sales of Merchandise Rec 3610 Engineering Services 3656 Recreation Transaction Fee 3611 PJ Overhead Charges-Eng 3657 Special Event Fees
3612 PJ Labor Reimbursement-Eng 3658 Sale of Food
3613 PJ Vendor Reimbursement-Eng 3660 Building Services 3615 Engineering Fees 3661 Sales of Documents-Building
3616 Engr Plan Check Fees 3662 Records Retention Fee-Building 3618 Sales of Maps and Doc-Engr 3663 Building Service Charges 3619 Rent,Lease & Concession-Engr 3664 Overhead Charges Reimbursement
3620 Public Works Services 3665 PJ Overhead Charges - Building 3621 Public Works Service Charges 3666 PJ Labor Reimb - Building 3622 Public Works Cost Recovery 3667 Building State Mndatd Stds Fee Appendix
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Item # 1.

List of Revenues
3670 Utility Charges 3720 Special Assessments
3671 Water Meter Charge 3720 Special Assessments
3672 Water Consumption 3721 Special Assessments Pre-Pmt 3673 Irrigation Meter Charge 3730 Recycling
3674 Irrigation Consumption 3730 Recycling
3675 Fire Line Meter Charge 3740 Reimbursements
3676 Fire Line Consumption 3741 Repayment
3677 Recycle Meter Charge 3742 Principal
3678 Recycle Consumption 3743 Interest Income
3680 Planning Services 3744 Advance-Principal Repayment 3617 Planning Fees 3745 Advance-Interest Earnings
3681 PJ Overhead Charges - Planning 3746 HAZMAT Incidents 3682 PJ Labor Reimb - Planning 3750 Donations
3683 PJ Vendor Reimb - Planning 3750 Donations
3684 Sales of Maps and Doc-Planning 3790 Miscellaneous Other Revenue 3685 Housing & Neighborhood Svcs 3791 Cash Over/(Short) 3686 Planning Plan Check Fee 3792 Clearing, Various
3687 Animal Control Services Fee 3799 Miscellaneous Other Revenue 370 Miscellaneous Revenue 390 Other Financing Sources
3710 Development 3970 Bond Proceeds
3710 Development 3970 Bond Proceeds
3711 Storm Drain Connection Fees 3980 Other Financing Sources 3712 Park Development Fees 3980 Other Financing Sources 3713 Sewer Permit Fees 3981 Contributions-Proprietary Fund 3714 Treatment Plant Fees 3982 Capital Leases
3715 Connection Fees 3983 Pmnt to Refunded Bond Escrow A 3716 Fire Hydrant Fees 3985 Extraordinary Item
3717 Encroachment Permit Fees 3982 Capital Leases
3718 Impact Fees 3983 Pmnt to Refunded Bond Escrow A
3760 Developer Contribution 3985 Extraordinary Item
3761 Contribution-Equipment
Appendix
City of Milpitas 283
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Item # 1.

List of Expenditures
410 Personnel Services 420 Services and Supplies
4110 Wages 4200 Community Promotion, Grant/Loan
4111 Permanent 4201 Community Promotions
4112 Temporary 4202 Com Promotions-CC Allocated
4113 Overtime 4203 Com Prom-CC Unallocated
4114 Reimbursable Overtime 4204 Cultural Arts Grants
4143 Charged to CIPs 4205 Miscellaneous Grants
4120 Allowances/Leaves 4206 Sports Grants
4121 Allowances 4207 Housing Loans
4122 Standby Pay MEA 4208 CDBG Grants
4124 Leave Cashout 4209 Miscellaneous Loans
4125 Accrued Leave 4210 Department Allocations
4126 Meal Stipend MEA 4211 Equipment Replacement
Amortization
4130 Benefits 4212 Vehicle Lease Charges
4131 PERS 4220 Supplies
4132 Group Insurance 4221 Office Supplies
4133 Medicare-Employer's Contributi 4223 Departmental Supplies 4135 Worker's Compensation 4224 Maintenance Supplies
4136 Unemployment 4225 Health & Safety Supplies
4137 MOU Contractual Agreements 4226 Senior Nutrition Food Supplies 4138 Deferred Comp-Employer Contrib 4230 Services
4139 PARS 4231 Advertising
4140 Adjustments - Payroll 4232 Blueprinting
4141 Adjustments-Payroll 4237 Contractual Services
4142 Vacancy Factor 4238 Contractual Servs-PJ's Labor
4146 Short Term Disability 4239 Audit Fees
4151 Compensation Reduction 4244 Senior Nutrition Non-Food 4152 Employee Pay PERS Contribution 4240 Repair & Maintenance 4198 Overhead-PJ's Contractual Labo 4241 Repair & Maintenance 4199 Overhead-Payroll 4242 Rents & Leases
4160 Retiree Benefits 4250 Legal Services
4161 Retiree Medical Reserve 4252 Retainers & Fees
4162 Retiree Medical Payment 4253 Plan JPA Attorney's Fees 4163 Retiree Medical Reimbursement 4254 Plan JPA Settlements 4170 Pension Expense 4255 Litigation
4171 Pension/OPEB Expense 4256 Liability IBNR Adjustment 4172 OPEB Expense 4280 Elections
4280 Elections
Appendix
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Item # 1.

List of Expenditures
4410 Communications 4600 Insurance, Settlements & Miscellaneous (cont)
4411 Phone-Local 4650 Loss on Sale
4412 Computer Data Lines 4660 Other Miscellaneous and Correc 4415 Pagers 4630 Depreciation & Amortization
4416 Cellular Phones 4630 Depreciation & Amortization
4417 Fire Alarms
4418 Police Alarms 470 Debt Service
4420 Utilities 4700 Principal
4421 Utilities-Gas 4701 Retirement of Principal
4422 Utilities-Electric 4702 Principal - COP
4423 Utilities - Water 4703 Principal - Advance
4426 Utilities - Solid Waste 4710 Interest
4430 Utilities - Water Purchase 4711 Interest Expense
4424 SFWD, Wholesale Water Purch. 4712 Interest - COP
4425 SCVWD, Wholesale Water Purch. 4713 Interest - Advance 4427 Recycled Water Purchase 4720 Contractual Obligation 4440 Treatment Plant 4720 Contractual Obligation
4428 Treatment Plant, Capital 4721 Cost of Issuance
4429 Treatment Plant, M & O 4730 Premium-Bond Prepayment 4500 Training, Travel, & Memberships 4730 Premium-Bond Prepayment 4501 Memberships & Dues
4502 Professional Licensing 480 Capital Improvements
4503 Training and Registration 4800 Capital Improvements 4505 Lodging/Travel 4800 Capital Improvements
4506 Meals for Meetings
4507 Per Diem 485 Capital Outlay > $5,000
4508 Mileage Reimbursement/Parking 4810 Land
4509 Tuition Reimbursement 4811 Land
4520 Commissions & Boards 4820 Land Improvements
4521 Conference Expenses 4821 Land Improvements
4522 Non-Conference Expenses 4830 Buildings and Improvements 4600 Insurance, Settlements & Miscellaneous 4831 Buildings and Improvements 4602 Liability Insurance 4840 Infrastructure
4603 Settlements 4841 Infrastructure
4610 Uncollectible Accounts 4850 Vehicles
4611 Collection Fees 4851 Vehicles
4640 Unanticipated Expenditure Reserve
Appendix
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319
Item # 1.

List of Expenditures
4860 Capitalized Leases 490 Capital Outlay < $5,000
4864 Capitalized Leases 4910 Office Furniture & Fixtures 4865 Capital Lease Interest 4911 Office Furniture & Fixtures 4870 Machinery & Equipment 4920 Machinery, Tools & Equipment 4873 Machinery & Equipment 4921 Machinery, Tools & Equipment 4874 Computer Hardware 4922 Computer Hardware
4875 Computer Software 4923 Computer Software
4880 Furniture and Fixtures 4924 Electronic Equipment
4881 Furniture and Fixtures 4930 Hydrants & Meters
4890 Adjustments CIP 4931 Hydrants
4891 Adjustments-CIP-Addition 4932 Meters
4892 Adjustments-CIP-Deletion
4893 Adjustments-CIP-Transfer
4894 Adjustments-CIP-LTD
Appendix
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Item # 1.

Abbreviations and
Acronyms
AB Assembly Bill
ABAG Association of Bay Area Governments
ADA Americans with Disabilities Act
ALS Advanced Life Support
AMR American Medical Response
AP Accounts Payable
AR Accounts Receivable
ARRA American Recovery and Reinvestment
Act
AuthFTE Authorized Full-Time Equivalent
positions
AVASA Abandoned Vehicle Abatement Service
Authority
A / V Audio/Visual Equipment
BAAQMD Bay Area Air Quality Management
District
BART Bay Area Rapid Transit
CAD Computer Aided Dispatch
CSA City Service Area
Caltrans California Department of Transportation
CAPER Consolidated Annual Plan &
Performance Eval Rpt
CATV Cable Television
CCPI California Consumer Price Index
CDBG Community Development Block Grant
CEQA California Environmental Quality Act
CERBT California Employers' Retiree Benefit
Trust
CIP Capital Improvement Program
CIT Counselor in Training Program
CMAS California Multiple Awards Schedule
CMO City Manager’s Office
CO Certificate of Occupancy
COBRA Consolidated Omnibus Budget
Reconciliation Act
COMPST Computerized Statistics
COPs Certificates of Participation
COPS Community Oriented Policing Services
CPI Consumer Price Index
CPR Cardio-Pulmonary Resuscitation
CRS Community Rating System
CSA City Service Area
EMD Emergency Medical Dispatch
EMS Emergency Medical Service
EMT Emergency Medical Technician
EOC Emergency Operations Center
EPA Environmental Protection Agency
EPC Emergency Preparedness Commission
ERAF Educational Revenue Augmentation
Fund
FBI Federal Bureau of Investigation
FEHA Fair Employment and Housing Act
FEMA Federal Emergency Management
Admin
FICA Federal Insurance Contributions Act
FMLA Family Medical Leave Act
FPPC Fair Political Practices Commission
FTA Federal Transit Authority
FTE Full-Time Equivalent
FY Fiscal Year
GAAP Generally Accepted Accounting
Principles
GASB Governmental Accounting Standards
Board
GFOA Government Finance Officers
Association
GIS Geographic Information System
GPS Global Positioning System
Haz Mat Hazardous Materials
HCD Housing and Community Development
HMO Health Maintenance Organization
HR Human Resources
HUD U.S. Housing and Urban Development
HVAC Heating8 Ventilating and Air
Conditioning
I Interstate
ICMA Intern’l City/County Mgmt Association
IT Information Technology
IVR Integrated Voice Recognition
JPA Joint Power Authority
Appendix
City of Milpitas 287
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Item # 1.

LAFCO Local Agency Formation Commission
LED Light-Emitting Diode
LIUNA Laborers’ International Union of N.

America
LID Local Improvement District
LLEBG Local Law Enforcement Block Grant
LLMD Light & Landscape Maintenance District
M & O Maintenance and Operation
MEA Milpitas Employees Association
MLS Major League Soccer
MOU Memorandum of Understanding
MUSD Milpitas Unified School District
MVP Milpitas Volunteer Program
NAIOP Nat Assoc of Industrial & Office
Properties
MLS Major League Soccer
MOU Memorandum of Understanding
MUSD Milpitas Unified School District
MVP Milpitas Volunteer Program
NAIOP Nat Assoc of Industrial & Office
Properties
NBO Neighborhood Beautification Ordinance
NOVA North Valley Private Industry Council
O&M Operating and Maintenance
OES Office of Environmental Services
OPA Owner Participation Agreement
OPEB Other Post-Employment Benefits
OSHA Occupational Safety and Health Admin
PAL Police Athletic League
PAR Performance Appraisal Report
PC Planning Commission
PCR Police Community Relations
PERS Public Employees Retirement System
PLAN Pooled Liability Assurance Network
POST Peace Officers Standards and Training
PPO Preferred Provider Organization
PRV Pressure Reducing Valves
PUC Public Utility Commission
RAP Recreation Assistance Program
R & D Research and Development
RDA Redevelopment Agency
RFP Request for Proposal
RPTT Redevelopment Property Tax Trust
Fund
RMS Records Management System
RWQCB Regional Water Quality Control Board
SB Senate Bill
SBDC Small Business Development Center
SBWRP South Bay Water Recycling Program
SAFE Strategic Actions For Emergencies
SCVWD Santa Clara Valley Water District
SEMS Standardized Emergency Management
SERAF Supplmntl Educ. Rev. Augmentation
Fund
SFPUC San Francisco Public Utilities
Commission
SLETS Sheriff’s Law Enforcement Telecom
System
SOP Standard Operating Procedure
SV-ITS Silicon Valley Intelligent Transportation
SVU Silicon Valley Unwired
SWAT Special Weapons and Tactics
TABs Tax Allocation Bonds
TAG Technology Application Group
TIA Traffic Impact Analysis
TDM Transportation Demand Management
TOT Transient Occupancy Tax
UBC Uniform Building Code
UCR Uniform Crime Reports
UFC Uniform Fire Code
VLF Vehicle License Fee
VTA Santa Clara Valley Transportation
Authority
WMD Weapons of Mass Destruction
WPCP Water Pollution Control Plant
YBA Youth Basketball Association
YSB Youth Services Bureau
YTD Year to Date
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Item # 1.

Glossary of Terms
Accrual Basis – A basis of accounting in which transactions are recognized at the time they are incurred, as opposed to when cash is received and spent.

Accomplishment – Programs and activities successfully completed in the prior fiscal year.

Agency Funds – One of four types of fiduciary funds. Agency funds are used to report resources held by the reporting government in a purely custodial capacity (assets equal liabilities).

Appropriation – An authorization made by the City Council that permits officials to incur obligations against and to make expenditures of resources. Appropriations are usually made for fixed amounts and are typically granted for a one-year period.

Appropriations Limit – Proposition 4 approved by the voters in 1980 limits the amount of money that cities may spend each year. This limit is set each year based on the amount that was appropriated in 1978-79 and adjusted each year for population growth and a cost-of-living factor.

Assessed Valuation – The value of real property and improvements, as determined by the County Assessor, against which the property tax levy is assessed.

Asset – Resources owned or held by a government that have a monetary value.

Balanced Budget – A balanced budget is defined as a budget where the anticipated operating revenues and other financing resources including carryover of outstanding encumbrances from prior year are equal to or exceed operating expenditures.

Bond – A financial obligation for which the issuer promises to pay the bondholder a specified stream of future cash flows, including periodic interest payments and a principal repayment.

Budget – A plan of financial operation embodying an estimate of proposed expenditures for a given period of time and the proposed means of financing them.

Budgetary Basis – This refers to the basis of accounting used to estimate financing sources and uses in the budget. This generally takes one of three forms: GAAP, cash, or modified accrual.

Budget Calendar – The schedule of key dates which government follows in preparation and adoption of the budget.

Budgetary Integration – The control or management of a government in accordance with the approved budget for the purpose of keeping expenditures within the limitations of the available appropriations and resources. A system of controls to ensure and demonstrate budgetary compliance with uncommitted balance of appropriations (avoid overspending or over committing budget) and unrealized revenues (monitor on an ongoing basis to determine whether spending reductions are needed to keep the budget in balance).

Building Permit Fee – Fee required for new construction or for any alteration or addition to a residence or commercial building. The fee is based on valuation. Electrical or plumbing/mechanical work also requires a similar permit with an itemized fee schedule.

Business License Tax – A tax imposed upon businesses in the community. The fee is a flat rate plus a minimal charge per employee.

California Employers' Retiree Benefit Trust (CERBT) – A Section 115 trust fund dedicated to prefunding Other Post-Employment Benefits (OPEB) for all eligible California public agencies.

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Item # 1.

Capital Assets – Assets of significant value and having a useful life of several years (the term fixed assets is also used).

Capital Budget – A plan of proposed capital expenditures and the appropriations to finance them. The capital budget is usually enacted as part of the complete annual budget that includes both an operating component and a capital component. The capital budget should be based on a capital improvement program (CIP) and is typically the first year of a multi-year CIP.

Capital Improvement – Projects which purchase or construct capital assets. Typically capital improvements include new street improvements, park development, the acquisition of land, major construction of public facilities, and major maintenance/repair projects such as street resurfacing or modifications to public facilities.

Capital Improvement Program – A comprehensive five-year plan of implementing proposed capital projects which identifies priorities as to need, cost, and method of financing during the next five years. The first year of the CIP is typically adopted as the current capital budget.

Capital Projects Fund – Fund type used to account for financial resources to be used for the acquisition or construction of major capital facilities (other than those financed by proprietary funds).

Capital Outlay – Expenditure for the acquisition of equipment for direct services with a useful life of two or more years and an acquisition cost of $5,000 or more per unit (i.e. police vehicles, riding mowers, etc.). Capital Outlay is budgeted in the operating budget.

Comprehensive Annual Financial Report – The official annual financial report for the City. A Comprehensive Annual Financial Report is compiled by a state, municipal or other governmental accounting staff and audited by an external American Institute of Certified Public Accountants (AICPA) certified accounting firm utilizing Governmental Accounting Standards Board (GASB) requirements. It is composed of three sections: Introductory, Financial and Statistical. It combines the financial information of fund accounting and Enterprise Authorities accounting.

Contractual Services – Services rendered to a government by private firms, individuals, or other governmental agencies. Examples include utilities, rent, maintenance agreements and professional consulting services.

Debt Service – Payment of interest and repayment of principal to holders of the City's debt instruments.

Defeasance – The legal release of a debtor from being the primary obligor under the debt, either by the courts or by the creditor.

Department – An organizational unit of government which is functionally unique in its delivery of services.

Discount – The difference between the cost of a security and its value at maturity when quoted at lower than face value.

Effectiveness – The degree to which an entity, program or procedure is successful at achieving its goals and objectives.

Efficiency – The degree to which an entity, program or procedure is successful at achieving its goals and objectives with the least use of scarce resources. Efficiency necessarily presupposes effectiveness.

Encumbrances – Commitments against an approved budget for unperformed (executed) contracts for goods and services. They cease to be encumbrances when the obligations are paid or otherwise terminated.

Enterprise Fund – Used to account for specific services, i.e. water and sewer, which are funded directly by fees and charges to external users.

Equipment Charges – Charges or "rental fees" charged to user departments to defray the cost of maintaining the equipment used and to replace the equipment when it exceeds its useful life.

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Expenditure – The payment of cash on the transfer of property or services for the purpose of acquiring an asset, service or settling a loss.

Expense – Charges incurred for operations, maintenance, interest or other charges.

Fiduciary Fund – The term is used when a governmental unit acts in a fiduciary capacity such as a trustee or agent. The government unit is responsible for handling the assets placed under its control.

Final Budget – The budget document adopted by resolution following the budget hearings in June of each year.

The document formally incorporates any Council changes to the preliminary budget, resulting from the budget hearings.

Fiscal Year – The financial year for the City of Milpitas is July 1 through June 30 of the subsequent year.

Fixed Assets – Assets of long-term character that are intended to continue to be held or used, such as land, buildings, machinery, furniture or other equipment.

Franchise Fee – A regulatory fee charged to utility companies for the privilege of doing business in the City of Milpitas, i.e. garbage franchise fee, gas and electric franchise fee, and nitrogen gas franchise fee.

Function – A discrete entity such as an organizational unit or groupings of interrelated programs within a department or division whose appropriations for salaries, services and supplies, and capital outlay can easily be subjected to analysis in the budget process.

Fund – An independent fiscal and accounting entity used to record all financial transactions related to the specific purpose for which the fund was created.

Fund Balance – Also know as financial position, fund balance is the excess of current assets over current liabilities, and represents the cumulative effect of revenues and other financing sources over expenditures and other uses.

Gas Tax – Share of revenue derived from the State taxes on gasoline.

Generally Accepted Accounting Principles (GAAP) – The standard framework of guidelines for financial accounting used in any given jurisdiction; generally known as Accounting Standards. GAAP includes the standards, conventions, and rules accountants follow in recording and summarizing, and in the preparation of financial statement.

General Fund – The main operating fund of the City.

Government Accounting Standards Board (GASB) – A standard-setting body, associated with the Financial Accounting Foundation, which prescribes standard accounting practices for governmental units.

Governmental Funds – Funds generally used to account for tax-supported activities. There are five different types of governmental funds: the general fund, special revenue funds, debt service funds, capital projects funds and permanent funds.

Hotel/Motel Tax – A transient occupancy (less than 30 days at a hotel or motel) tax imposed for general purposes. The tax is currently 14% of receipts.

Infrastructure – The physical assets of a government (i.e. streets, water and sewer systems, public buildings and parks).

Interest – Income resulting from the prudent investment of idle cash. The types of investments are controlled by the City's Investment Policy in accordance with the California Government Code.

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Item # 1.

Internal Service Funds – Proprietary fund type that may be used to report any activity that provides goods or services to other funds, departments or agencies of the primary government and its component units or to other governments on a cost-reimbursement basis.

Legal Level of Budgetary Control – The lowest level at which a government’s management may not reallocate resources without special approval from the legislative body.

Level of Service – A description of the services provided, or activities performed, and the cost and personnel requirements.

Line Item – The description of an object of expenditure, i.e. salaries, supplies, contract services, etc.

Materiality – The magnitude of an omission or misstatement of accounting information that, in the light of surrounding circumstance, makes it probable that the judgment of a reasonable person relying on the information would have been changed or influenced by the omission or misstatement. The objective of accountability in governmental financial reporting requires materiality to be judged in both a quantitative and qualitative manner (involves such issues as legal and contractual compliance).

Modified Accrual Basis – A basis of accounting in which revenues are recognized when measurable and available and expenditures are recorded when the related fund liability is incurred, except for principal and interest on general long-term debt, claims and judgments, and accumulated unpaid vacation, sick pay and other employee benefit amounts, which are recognized as expenditures to the extent they have matured.

Motor Vehicle In Lieu – A share of the revenue derived from registration fees charged by the State.

Objective – Program or activity intended to be implemented in the ensuing fiscal year.

Operating Budget – A financial plan for the provision of direct services and support functions.

Overhead Charges – A charge made to a developer account or the Redevelopment Agency to defray the direct and indirect overhead costs associated with an employee performing duties or providing services to the fund or account.

Park Development Fee – The fee paid by a developer or sub-developer for park or recreation purposes in lieu of the dedication of land.

Performance Indicators – Quantitative measures of accomplishments and objectives, sometimes known as workload/performance measures.

Personnel Services – Expenditures for salaries, wages and fringe benefits of a government’s employees.

Personnel Allotment – List of full-time and part-time employees required to support a division or function, listed by their classification or title.

Personnel Analysis - Changes to personnel allotment from the previous fiscal year. Reorganizations, reclassifications and reallocation of resources are highlighted in this section.

Prior-Year Encumbrances – Obligations from previous fiscal years in the form of purchase orders, contracts or salary commitments which are chargeable to an appropriation, and for which a part of the appropriation is reserved. They cease to be an encumbrance when the obligations are paid or otherwise terminated.

Property Tax – A tax imposed on real property (land and permanently attached improvements) based upon the assessed value of the property. The tax rate may not exceed 1% of assessed value.

Proposed Budget – The budget document recommended by the City Manager that is approved as may be amended by the City Council during budget hearings. The hearings are held in May or June, and the approval of the Preliminary Budget gives spending authority effective each July 1st for the subsequent fiscal year.

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Proprietary Funds – Funds that focus on the determination of operating income, changes in net assets (or cost recovery), financial position, and cash flows. There are two different types of proprietary funds: enterprise funds and internal service funds.

Recreation Fees – Charges for services provided to participants of Community and Recreation Services' classes, activities, and recreational sports.

Redevelopment – The planning, development, replanning, redesign, clearance, reconstruction, or rehabilitation of real property, and the provision of such residential, commercial, industrial, public, or other structures appropriate to the general welfare of the City.

Redevelopment Property Tax Trust Fund – residual distributions of property tax revenue from dissolved Redevelopment Agency. The Redevelopment Agency is dissolved on 1/31/2012 due to ABX126.

Rents and Concessions – Charges for group rentals of City facilities.

Reserves – A savings account maintained for restricted use, i.e. self-insurance programs, capital improvement projects, or for unrestricted use to protect the City from emergencies or unanticipated expenditures.

Revenue Analysis – Departmental revenue sources are described. Revenue increases, decreases and strategies are highlighted in this section.

Sales Tax – The City receives one percent of the County’s nine percent sales tax, and a ¼ cent Transaction & Use Tax (Measure F). Sales tax is one of the City’s major general fund revenue sources.

Section 115 Trust – A grantor trust established by a governmental unit to set aside funds for paying future employee benefits such as pensions and Other Post-Employment Benefits (OPEB).

Supplies and Contractual Services – The category of line items that describe non-salary and non-capital outlay expenditures.

Special Revenue Fund – Used to account for revenue that is set aside for restricted use, e.g. gas tax receipts are set aside in such a fund to be used solely for street improvements.

Supplemental Appropriation – An additional appropriation made by the governing body after the budget year has started.

Taxes – Compulsory charges levied by a government for the purposes of financing services performed for the common benefit of the people. This term does not include specific charges made against particular persons or property for current or permanent benefit, such as special assessments.

Transfers In/Out – Amounts transferred from one fund to another to assist in financing the services for the recipient fund.

Unanticipated Expenditures Reserve – A specific line item appropriation from which to distribute additional funds to decision units for salary increases resulting from employee contract negotiations and to pay for emergencies or unanticipated expenditures that from time to time arise during the course of a fiscal year.

Unassigned Unrestricted Fund Balance – Available expendable financial resources in a governmental fund that are not the object of tentative management plans.

Working Capital – Working Capital is a financial metric which represents operating liquidity available to a business, organization, or other entity, including governmental entity. Along with fixed assets such as plant and equipment, working capital is considered a part of operating capital.

Workload/Performance Measures – Quantitative measures of services provided, or activities performed, by an organizational unit.

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City of Milpitas 293
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Item # 1.

Index
A
Abbreviations and Acronyms ............................ 287 Appendix .............................................................. 263 Awards ................................................................. 34 B
Budget Guidelines .............................................. 24 Budget Development and Document .............. 29
Budget Process, FY 2020-21 ........................... 28 Budget Summary ................................................ 38 Building Safety and Housing ............................ 123 C
Capital Improvement Program Overview ........ 259
Capital Improvement Program Summary ....... 262
City Attorney ....................................................... 115 City Clerk ............................................................. 99 City Council ......................................................... 83 City Council: Elected Officials ........................... iii City Manager ....................................................... 89 Council Priority Areas ........................................ iv D
Demographic Profile .......................................... 3

E
Economic Development .................................... 107 Engineering ......................................................... 137 Expenditure Descriptions .................................. 269 Expenditures by Function .................................. 68 Expenditures by Fund (Detail) ........................... 58 Expenditures by Fund ......................................... 56 F
Finance ................................................................. 149 Financial Information .......................................... 37 Fire ......................................................................... 161 Fiscal Policies ...................................................... 19 Fund Descriptions .............................................. 263 Fund Structure .................................................... 37 Funded Permanent Positions by Department 42
G
Glossary of Terms ............................................... 289 H
History .................................................................. 2 Human Resources .............................................. 175 I
Information Technology ...................................... 185 Internal Cost Allocation ....................................... 70 L
Letter of Transmittal ........................................... v List of Departments/Divisions/Functions ........ 278 Appendix
294 City of Milpitas
328
Item # 1.

List of Expenditures ............................................ 284 List of Funds ........................................................ 277 List of Revenues ................................................. 280 M
Map ....................................................................... 7 N
Non-Departmental .............................................. 255 O
Operating Transfers Statement ........................ 72 Organization Chart ............................................. 1

P
Planning ............................................................... 197 Police .................................................................... 209 Public Works ....................................................... 223 R
Recreation and Community Services .............. 243 Revenues and Expenditures (All Funds) ........ 40
Revenues by Fund (Detail) ............................... 46 Revenues by Fund ............................................. 44 Revenue Descriptions ........................................ 266 V
Vision, Values and Goals ................................... ii Appendix
City of Milpitas 295
329
Item # 1.

330
Item # 1.
331
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Fiscal Policies and Budget Process

City of Milpitas 1

Fiscal Policies
General Financial Goals

1. To maintain a financially viable City that can maintain an adequate level of municipal services.

2. To maintain financial flexibility in order to be able to continually adapt to local, regional, and national economic change.

3. To maintain and enhance long-term the sound fiscal condition of the City.

Operating Budget Policies

4. The City will adopt a balanced budget by June 30th of each year.

5. An annual base operating budget will be developed by accurately and realistically projecting r evenues and expenditures for the current and forthcoming fiscal year.

6. During the annual budget development process, the existing base budget will be thoroughly examined to assure cost effectiveness and need of the services or programs provided.

7. Once the City Council has adopted the budget, the Administration will track revenues and expenditures closely and will bring forward budget adjustment recommendations at Mid-Year, as needed.

8. Annual operating budgets will include the cost of operations of capital proj ects.

9. The City will avoid balancing the current budget at the expense of future budgets, unless the use of reserves is expressly authorized by the City Council.

10. The City’s operating budget will be prepared on a basis consistent with generally accepted acco unting principles (GAAP) except that encumbrances are considered budgetary expenditures in the year of the commitment to purchase and capital project expenditures are budgeted on a project length basis.

Revenue Policies

11. The City will try to maintain a diversified and stable revenue system to avoid over-reliance on any one revenue source.

12. Revenue estimates are to be accurate and realistic, sensitive to local, regional, and national economic conditions.

13. The City will estimate its annual revenues by an objective, analytical process utilizing trend, judgmental, and statistical analysis, as appropriate.

14. User fees will be reviewed annually for potential adjustments to recover the full cost of services provided, except when the City Council determines that a subsidy is in the public interest. To maintain cost recovery, annually, staff shall bring forward the Master Fee Schedule as part of the budget process with an escalation to reflect increases in staff cost.

15. The City will actively pursue federal, state, and other grant opportunities when deemed appropriate. Before accepting any grant, the City will thoroughly consider the implications in terms of ongoing obligations that will be required in connection with acceptance of said grant. 332
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16. One-time revenues will be used for one-time expenditures only including capital outlay and reserves.

Expenditures Policies

17. The City will maintain levels of service, as approved by the City Council, to provide for the public well -being and safety of the residents of the community.

18. Employee benefits and salaries will be maintained at competitive levels.

19. Fixed assets will be maintained and replaced as necessary, minimizing deferred maintenance.

20. The City will develop and use technology and productivity enhancements that are cost effect ive in reducing or avoiding increased personnel costs.

Utility Rates and Fees

21. Water and sewer utility customer rates and fees will be reviewed annually as part of the budget process and adjusted as needed to ensure full cost recovery.

22. All utility enterprise funds will be operated in a manner similar to private enterprise. As such, the City will set fees and user charges for each utility fund at a level that fully supports the total direct and indirect cost of the activity, including depreciation of assets, overhead charges, and reserves for unanticipated expenses and capital projects.

Capital Budget Policies

23. The City will develop an annual Five-Year Capital Improvement Program (CIP) with the goal to develop and maintain infrastructure in support of existing residences and businesses and future anticipated development.

24. The CIP will identify the estimated full cost of each project which includes administration, design, development and implementation, and operating costs once the projects are completed.

25. The CIP will identify potential funding sources for each proposed capital project, prior to submitting proposed projects to the City Council for approval. When appropriate, the CIP will seek other funding sources such as State and Federal funds, private funds and leverage these funding sources with public money to help meet the highest priority community needs.

26. The City Council will provide funding for the first year of the Five-Year CIP as a component of the annual operating budget and appropriate funding at the project level. Funding for future projects identified in the Five-Year CIP may not have been secured and/or legally authorized and is therefore subject to change.

27. Each CIP project will be assigned to a project manager whose responsibilities are to monitor all phases of the project to ensure timely completion of the project and compliance with the project budget and all regulations and laws.

Debt Policies

28. The City will limit long-term debt to only those capital improvements or long-term liabilities that cannot be financed from current revenue sources.
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29. The City will utilize debt financing for projects which have a useful life that can reasonably be expected to exceed the period of debt service for the project.

30. The City will utilize conservative financing methods and techniques so as to obtain the highest practical credit ratings (if applicable) and the lowest practical borrowing costs.

31. The City may utilize inter-fund loans rather than outside debt to meet short-term cash flow needs.

32. The City will not issue long-term debt to finance operating expenses and routine maintenance expenses.

Investment Policies

33. The Finance Director/City Treasurer will annually render an investment policy for the City’s cash pool for City Council’s review no later than the beginning of the Fiscal Year and recommend modifications as appropriate. The review will take place at a public meeting and the policy shall be adopted by resolution of the City Council.

34. City funds and investment portfolio will be managed in a prudent and diligent manner with emphasis on safety, liquidity, and yield, in that order.

35. Reports on the City’s investment portfolio and cash position shall be developed by the Finance Director/City Treasurer and reviewed by the City Council quarterly.

36. Generally Accepted Accounting Principles require that differences between the costs of the investment portfolio and the fair value of the securities be recognized as income or losses in a government ’s annual financial report. These variances shall not be considered as budgetary resources or uses of resources unless the securities are sold before maturity or the values of the investments are permanently impaired.

37. The City has set up an Other Post Employment Benefits (OPEB) Trust Fund to prefund its retiree medical benefit to eligible former employees with the California Employers' Retiree Benefit Trust (CERBT). Bi- annually, the City shall engage an actuary to provide the City with an actuarial valuation. Working with the actuary, staff shall review the assumed interest earnings, investment strategy, and other factors to ensure the long-term health of the fund.

38. Per the pension valuation provided by the City’s actuary, the City’s pension costs will continue to rise during the next ten plus years. The City set aside and invested the CalPERS Rate Stabilization Reserve funds in the City of Milpitas Section 115 Pension Trust Fund in order to invest funds with moderate risk achieving a 3% to 6% investment earnings goal during the next 5 to 10 years to mitigate the ris ing pension costs. The City may use the trust funds to fund either the annual actuarially determined pension contribution amounts, pay down unfunded pension liabilities with CalPERS, or reduce the length of pension cost amortization schedules with CalPERS.

Reserve Policies

39. The City will fund the following reserves as follows with any General Fund audited year end operating surplus after the General Fund Contingency Reserve and General Fund Budget Stabilization Reserve requirements are met and pension budgetary surplus are allocated to the PERS Rate Stabilization Reserve. • Part I
◦ Contingency Reserve (Policy Statement #41)
◦ General Fund Budget Stabilization Reserve (Policy Statement #42) • Part II (any remaining balance)
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◦ If confirmed by actuary, 20% to PERS Rate Stabilization Reserve (Policy Statement #43) ◦ If not confirmed by actuary, 0% to PERS Rate Stabilization Reserve (Policy Statement #43); • Part III (any remaining balance)
◦ Artificial Turf Replacement ($230,000) (Policy Statement #54) • Part IV (any remaining balance)
◦ 20% to the General Government Capital Improvement Fund (Policy Statement #56); ◦ 30% to Storm Drain Fund
◦ 10% to the Affordable Housing Community Benefit Fund (Fund 216); ◦ 10% to Transportation/Transit (Fund 310)
◦ 20% to Technology Replacement Fund; and
◦ 10% Unassigned

40. The City will periodically review and update reserve guidelines, to ensure that the City has sufficient reserve balances to adequately provide for emergencies, economic uncertainties, unforeseen operating or capital needs, economic development opportunities, and cash flow requirements.

41. The City will maintain a Contingency Reserve of at least 16.67% or two months of the annual operating expenditures in the General Fund to be used only in the case of dire need as a result of physical or fi nancial emergencies and disasters as determined by the City Council. Any use of the General Fund Contingency Reserve shall require a majority vote by the City Council through the adoption of the Operating Budget or by appropriation action during the fiscal year. The City Council will set the reserve amount annually after the results of the prior fiscal year’s Comprehensive Annual Financial Report are known. The replenishment of this reserve may also be incorporated into the annual Adopted Operating Budget if resources are available to replenish the reserve.

42. The City will maintain a General Fund Budget Stabilization Reserve with a target of 16.67%, or two months, of annual operating expenditures. The purpose of this reserve is to provide budget stability when there are fluctuations that result in lower than projected revenues and/or higher than projected expenditures that cannot be rebalanced within existing budget resources in any given fiscal year. This reserve is intended to provide a buffer, or bridge funding, to protect against reducing service levels when these fluctuations occur.

This reserve will be funded only after General Fund Contingency Reserve requirements have been met.

Any use of the General Fund Budget Stabilization Reserve shall require a majo rity vote by the City Council through the adoption of the Operating Budget or by appropriation action during the fiscal year. The City Council will set the reserve amount annually after the results of the prior fiscal year ’s Comprehensive Annual Financial Report are known. The replenishment of this reserve may also be incorporated into the annual Adopted Operating Budget if resources are available to replenish the reserve.

43. The City will maintain in the General Fund and the Water and Sewer Utility Enterprise Funds or in a Section 115 Trust a Public Employees Retirement (PERS) Rate Stabilization Reserve. The City’s actuary has determined that the General Fund portion of the Unfunded Actuarial Liability for the Miscellaneous Retirement Plan is 84.9% and for the Water and Sewer Utility Enterprise Funds portion of the Unfunded Actuarial Liability for the Miscellaneous Retirement Plan is 8.5% and 6.6%, respectively. The contributions to the PERS Rate Stabilization Reserve from the Utility Funds shall be consistent with the General Fund contributions. If confirmed by City’s actuary that contributions are advised for that respective year, then any 335
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savings resulting from the pension budgeting methodologies shall be contributed to the PERS Rate Stabilization Reserve. However, the General Fund portion of any pension savings shall only be allocated to the PERS Rate Stabilization Reserve after the General Fund Contingency Reserve and the General Fund Budget Stabilization Reserve requirements have been met. The Utility Funds’ portion of any pension savings shall only be allocated to the PERS Rate Stabilization Reserve after the Capital Reserve and Rate Stabilization Reserve (RSR) requirements in the Water and Sewer utility funds have been met. If confirmed by City’s actuary that contributions are advised for that respective year, then additionally, 20% of any General Fund or Enterprise Funds annual operating surpluses shall be allocated to the PERS Rate Stabilization Reserve.

44. Annually, the City will endeavor to transfer $500,000 from the General Fund to the Storm Drain Fund to replace and repair storm drain infrastructure.

45. The City will maintain a retiree medical benefits account established by an irrevocable trust and fund the annual actuarially determined contribution. Any savings resulting from the budgeting methodologies shall be used to pay off the actuarial unfunded liability.

46. The City will maintain a General Liability and Workers’ Compensation Claims Reserve of at least $2 million in the General Fund, which will be reviewed for adjustments annually. As part of closing out a fiscal year, any Workers' Compensation savings in the General Fund may be allocated to this General Fund reserve and any Workers' Compensation savings in the Utility Funds may be allocated to a Workers' Compensation Claims Reserve established for each utility fund.

47. The City will maintain a Rate Stabilization Reserve (RSR) in the Water and Sewer utility enterprise funds with a goal of at least 16.67% or two months of the respective annual operating expend itures after the Capital Reserve requirements have been met. The RSR shall be used to mitigate the effects of occasional shortfalls in revenue or unanticipated expenditures that cannot be rebalanced within existing budgeted resources in any given fiscal year. Revenue shortfalls may result from a number of events such as weather factors (wet weather or drought events and natural disasters), increased water conservation, and poor regional economic conditions. The Rate Stabilization Reserves should be used to assist in smoothing out revenue variability resulting from these factors and ensure that adequate resources are available during such times that might otherwise require large rate increases to utility customers. The City Council will set the reserve amounts annually after the results of the prior fiscal year’s Comprehensive Annual Financial Report are known. The RSR funding will be phased within five years, or sooner, as part of the fiscal year- end closing process. Thereafter, the replenishment of these reserves may also be incorporated into the annual Adopted Operating Budget if resources are available to replenish the reserves.

48. The City will maintain capital reserves in the Water and Sewer utility enterprise funds to provide for future capital projects and unanticipated emergencies, such as water main break repairs, pump station repairs.

The City will attempt to maintain a capital reserve of approximately 30% of the annual operating and maintenance expenses for the Water utility fund and 25% of the annual operating and maintenance expenses for the Sewer utility fund. The City Council will set the reserve amounts annually after the results of the prior fiscal year’s Comprehensive Annual Financial Report are known.

49. In addition, the City will maintain Infrastructure Replacement Funds for both water and sewer utilities. The goal is to accumulate at least $2 million a year from each utility fund to set-aside for replacement of infrastructure as the infrastructure reaches the end of its useful life after Capital Reserve, the Rate Stabilization Reserve, and CalPERS Rate Stabilization Reserve requirements have been met. 336
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6 City of Milpitas

50. Reserve levels for Debt Service Funds will be established and maintained as prescribed by the bond covenants authorized at the time of debt issuance.

51. The City will maintain a capital reserve in an Equipment Replacement Fund, set up as an internal service fund, to enable the timely replacement of vehicles and depreciable equipment as cost. The City will maintain a minimum fund balance of at least 30% of the replacement costs for equipment accounted for in this fund.

52. Annually, the City will endeavor to transfer $300,000 from the General Fund to the Technology Replacement Fund set aside in a reserve with a target of $5 million. This reserve shall be used to accrue funding for technology projects such as the major rehabilitation or replacement of the City’s technology infrastructure or new technology initiatives.

53. The City will maintain a capital reserve for Facilities Replacement with a target of $1 0 million. This reserve shall be used to accrue funding for major rehabilitation or replacement of City facilities (buildings/structures). Eligible uses of this reserve may include both the direct funding of public facility improvements and the servicing of related debt. The City Council will set the reserve amount annually after the results of the prior fiscal year’s Comprehensive Annual Financial Report are known. The replenishment of this reserve may also be incorporated into the annual Adopted Operating Budget as resources are available to replenish the reserve.

54. The City will maintain a capital reserve for Artificial Turf Replacement with a target of $2 million and an annual set-aside amount of at least $230,000 until the target is reached. This reserve shall be used to accrue funding for the normal depreciation expense of the City’s artificial turf fields over their useful life.

Eligible uses of this reserve may include the replacement of the City’s artificial turf fields so as to eliminate large spikes in capital expenses and normalize annual costs. The City Council will set the reserve amount annually after the results of the prior fiscal year’s Comprehensive Annual Financial Report are known. The replenishment of this reserve may also be incorporated into the annual Adopted Operating Budget as resources are available to replenish the reserve.

55. The City may direct any loan repayments from the former Redevelopment Agency and residual property tax distributions from the Redevelopment Property Tax Trust Fund to a General Government Capital Improvement Fund to address the funding needs of capital improvement projects.

56. The City may direct 20% of any General Fund audited year end operating surplus after General Fund Contingency and General Fund Budget Stabilization reserve requirements have been met to a General Government Capital Improvement Fund to address the funding needs of capital improvement projects.

Accounting, Auditing, and Financial Reporting Policies

57. The City’s accounting and financial reporting systems will be maintained in conformance with generally accepted accounting principles as they apply to governmental accounting.

58. An annual audit will be performed by an independent public accounting firm with the subsequent issuance of a Comprehensive Annual Financial Report, within six months of the close of the previous fiscal year.

59. Quarterly financial reports and status reports will be submitted to the City Council within six weeks after the end of each Quarter and be made available to the public. The report will provide an analysis of budgeted versus actual revenues and expenditures, on a year-to-date basis. At the minimum, the report shall include the status of the General Fund and Water and Sewer utility fund revenues and expenditures . 337
Item # 1.

338
Item # 1.

Fiscal Policies and Budget Process

City of Milpitas 1

Fiscal Policies
General Financial Goals

1. To maintain a financially viable City that can maintain an adequate level of municipal services.

2. To maintain financial flexibility in order to be able to continually adapt to local, regional, and national economic change.

3. To maintain and enhance long-term the sound fiscal condition of the City.

Operating Budget Policies

4. The City will adopt a balanced budget by June 30th of each year.

5. An annual base operating budget will be developed by accurately and realistically projecting revenues and expenditures for the current and forthcoming fiscal year.

6. During the annual budget development process, the existing base budget will be thoroughly examined to assure cost effectiveness and need of the services or programs provided.

7. Once the City Council has adopted the budget, the Administration will track revenues and expenditures closely and will bring forward budget adjustment recommendations at Mid-Year, as needed.

8. Annual operating budgets will include the cost of operations of capital projects.

9. The City will avoid balancing the current budget at the expense of future budgets, unless the use of reserves is expressly authorized by the City Council.

10. The City’s operating budget will be prepared on a basis consistent with generally accepted accounting principles (GAAP) except that encumbrances are considered budgetary expenditures in the year of the commitment to purchase and capital project expenditures are budgeted on a project length basis.

Revenue Policies

11. The City will try to maintain a diversified and stable revenue system to avoid over-reliance on any one revenue source.

12. Revenue estimates are to be accurate and realistic, sensitive to local, regional, and national economic conditions.

13. The City will estimate its annual revenues by an objective, analytical process utilizing trend, judgmental, and statistical analysis, as appropriate.

Fiscal Policies and Budget Process

2 City of Milpitas

16. One-time revenues will be used for one-time expenditures only including capital outlay and reserves.

Expenditures Policies

17. The City will maintain levels of service, as approved by the City Council, to provide for the public well -being and safety of the residents of the community.

18. Employee benefits and salaries will be maintained at competitive levels.

19. Fixed assets will be maintained and replaced as necessary, minimizing deferred maintenance.

20. The City will develop and use technology and productivity enhancements that are cost effective in reducing or avoiding increased personnel costs.

Utility Rates and Fees

21. Water and sewer utility customer rates and fees will be reviewed annually as part of the budget process and adjusted as needed to ensure full cost recovery.

Capital Budget Policies

24. The CIP will identify the estimated full cost of each project which includes administration, design, development and implementation, and operating costs once the projects are completed.

Debt Policies

28. The City will limit long-term debt to only those capital improvements or long-term liabilities that cannot be financed from current revenue sources.
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29. The City will utilize debt financing for projects which have a useful life that can reasonably be expected to exceed the period of debt service for the project.

30. The City will utilize conservative financing methods and techniques so as to obtain the highest practical credit ratings (if applicable) and the lowest practical borrowing costs.

31. The City may utilize inter-fund loans rather than outside debt to meet short-term cash flow needs.

32. The City will not issue long-term debt to finance operating expenses and routine maintenance expenses.

Investment Policies

34. City funds and investment portfolio will be managed in a prudent and diligent manner with emphasis on safety, liquidity, and yield, in that order.

35. Reports on the City’s investment portfolio and cash position shall be developed by the Finance Director/City Treasurer and reviewed by the City Council quarterly.

36. Generally Accepted Accounting Principles require that differences between the costs of the investment portfolio and the fair value of the securities be recognized as income or losses in a government’s annual financial report. These variances shall not be considered as budgetary resources or uses of resources unless the securities are sold before maturity or the values of the investments are permanently impaired.

38. Per the pension valuation provided by the City’s actuary, the City’s pension costs will continue to rise during the next ten plus years. The City set aside and invested the CalPERS Rate Stabilization Reserve funds in the City of Milpitas Section 115 Pension Trust Fund in order to invest funds with moderate risk achieving a 3% to 6% investment earnings goal during the next 5 to 10 years to mitigate the rising pension costs. The City may use the trust funds to fund either the annual actuarially determined pension contribution amounts, pay down unfunded pension liabilities with CalPERS, or reduce the length of pension cost amortiza tion schedules with CalPERS.

Reserve Policies

Fiscal Policies and Budget Process

4 City of Milpitas

◦ If confirmed by actuary, 20% to the PERS Rate Stabilization Reserve (see Policy Statement #43);)
◦ If not confirmed by actuary, 0% to PERS Rate Stabilization Reserve (Policy Statement #43); • Part III (any remaining balance)
◦ Artificial Turf Replacement ($230,000) (Policy Statement #54) • Part IV (any remaining balance)
◦ 20% to the General Government Capital Improvement Fund (see Policy Statement #56); ◦ 30% to Storm Drain Fund
◦ 10% to the Affordable Housing Community Benefit Fund (Fund 216); ◦ 10% to Transportation/Transit (Fund 310); and)
◦ 4020% to theTechnology Replacement Fund; and
◦ 10% Unassigned General Fund Reserve.

41. The City will maintain a Contingency Reserve of at least 16.67% or two months of the annual o perating expenditures in the General Fund to be used only in the case of dire need as a result of physical or financial emergencies and disasters as determined by the City Council. Any use of the General Fund Contingency Reserve shall require a majority vote by the City Council through the adoption of the Operating Budget or by appropriation action during the fiscal year. The City Council will set the reserve amount annually after the results of the prior fiscal year’s Comprehensive Annual Financial Report are known. The replenishment of this reserve may also be incorporated into the annual Adopted Operating Budget if resources are available to replenish the reserve.

This reserve will be funded only after General Fund Contingency Reserve requirements have been met.

Any use of the General Fund Budget Stabilization Reserve shall require a majority vote by the City Council through the adoption of the Operating Budget or by appropriation action during the fiscal year. The City Council will set the reserve amount annually after the results of the prior fiscal year’s Comprehensive Annual Financial Report are known. The replenishment of this reserve may also be incorporated into the annual Adopted Operating Budget if resources are available to replenish the reserve.

43. The City will maintain in the General Fund and the Water and Sewer Utility Enterprise Funds or in a Section 115 Trust a Public Employees Retirement (PERS) Rate Stabilization Reserve. The City’s actuary has determined that the General Fund portion of the Unfunded Actuarial Liability for the Miscellaneous Retirement Plan is 84.9% and for the Water and Sewer Utility Enterprise Funds portion of the Unfunded Actuarial Liability for the Miscellaneous Retirement Plan is 8.5% and 6.6%, respectively. The contributions to the PERS Rate Stabilization Reserve from the Utility Funds shall be consistent with the General Fund contributions. AnyIf confirmed by City’s actuary that contributions are advised for that respective year, then 342
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any savings or additional costs resulting from the pension budgeting methodologies shall benefit or be adjusted frombe contributed to the PERS Rate Stabilization Reserve. However, the General Fund portion of any pension savings shall only be allocated to the PERS Rate Stabilization Reserve after the General Fund Contingency Reserve and the General Fund Budget Stabilization Reserve requirements have been met.

The Utility Funds’ portion of any pension savings shall only be allocated to the PERS Rate Stabilization Reserve after the Capital Reserve and Rate Stabilization Reserve (RSR) requirements in the Water and Sewer utility funds have been met. AdditionallyIf confirmed by City’s actuary that contributions are advised for that respective year, then additionally, 20% of any General Fund or Enterprise Funds annual operating surpluses shall be allocated to the PERS Rate Stabilization Reserve.

44. Annually, the City will endeavor to transfer $500,000 from the General Fund to the Storm Drain Fund to replace and repair storm drain infrastructure.

47. The City will maintain a Rate Stabilization Reserve (RSR) in the Water and Sewer utility enterprise funds with a goal of at least 16.67% or two months of the respective annual operating expenditures after the Capital Reserve requirements have been met. The RSR shall be used to mitigate the effects of occasional shortfalls in revenue or unanticipated expenditures that cannot be rebalanced within existing budgeted resources in any given fiscal year. Revenue shortfalls may result from a number of events such as weather factors (wet weather or drought events and natural disasters), increased water conservation, and poor regional economic conditions. The Rate Stabilization Reserves should be used to assist in smoothing out revenue variability resulting from these factors and ensure that adequate resources are available during such times that might otherwise require large rate increases to utility customers. The City Council will set the reserve amounts annually after the results of the prior fiscal year’s Comprehensive Annual F inancial Report are known. The RSR funding will be phased within five years, or sooner, as part of the fiscal year- end closing process. Thereafter, the replenishment of these reserves may also be incorporated into the annual Adopted Operating Budget if resources are available to replenish the reserves.

Fiscal Policies and Budget Process

6 City of Milpitas

50. Reserve levels for Debt Service Funds will be established and maintained as prescribed by the bond covenants authorized at the time of debt issuance.

53. The City will maintain a capital reserve for Facilities Replacement with a target of $10 million. This reserve shall be used to accrue funding for major rehabilitation or replacement of City facilities (buildings/structures). Eligible uses of this reserve may include both the direct funding of public facility improvements and the servicing of related debt. The City Council will set the reserve amount annually after the results of the prior fiscal year’s Comprehensive Annual Financial Report are known. The replenishment of this reserve may also be incorporated into the annual Adopted Operating Budget as resources are available to replenish the reserve.

Accounting, Auditing, and Financial Reporting Policies

57. The City’s accounting and financial reporting systems will be maintained in conformance with generally accepted accounting principles as they apply to governmental accounting.

Fiscal Policies and Budget Process

City of Milpitas 1

Summary of Budget Guidelines

1. Basis of Budgeting
City budgets are adopted on a basis consistent with generally accepted accounting principles (GAAP) except that encumbrances are considered budgetary expenditures in the year of the commitment to purchase, and capital project expenditures are budgeted on a project length basis rather than a fiscal year. For all governmental funds, revenues and expenditures are budgeted on a modified accrual basis. For all proprietary funds, revenues and expenditures are budgeted on an accrual basis.

2. Budget Calendar
The Finance Director publishes a budget preparation calendar to the Department Heads and to the City Council at the beginning of the budget process each year. The calendar sets forth, at a minimum, dates for the following:
• Review of service level priorities by the City Council at an annual Planning Session. • Review and update of the Master Fee Schedule.
• Community Engagement and Outreach.
• Engagement and Outreach for City employees.
• Capital Improvement Projects Budget.
• Presentation of the City Manager's Proposed Budget to the City Council, which shall be no later than the second week in May.

3. Form and Content of the City Manager's Proposed Budget The Ten-Year General Fund Financial Forecast and the City Manager's Proposed Budget shall be presented in a form which facilitates the City Council to determine and review, as applicable:
• Alignment of the proposed service level changes to City Council priorities as established at the annual Planning Session.
• Projected revenues by major category; based on an updated Master Fee Schedule. • Operating expenditures by major category.
• Historical and proposed authorized staffing levels.
• Department and Office Proposed budgets as follows:
◦ Service level descriptions.
◦ Summary of accomplishments and initiatives.
◦ Performance and workload measures.
◦ Expenditure comparison with the preceding year's budget and two years of actual results. ◦ Authorized staffing comparison with the preceding three years. ◦ Budget reconciliation from the prior fiscal year to the Proposed Budget. ◦ Recommendations for service level changes with a detailed description, performance outcome, and impact statement if the recommendation is not funded.
• Capital improvement appropriations by project.
• A schedule showing General Fund Revenue and Expenditure projection for the next nine years. 345
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4. Adoption of the Budget
The City Council will adopt the budget by resolution no later than June 30th of the previous fiscal year, setting forth the amount of appropriations and authority of the City Manager to administer the adopted budget. Unless otherwise directed, all funds that are presented in the operating budget document are subject to Council approval of appropriations.

5. Budget Authority of the City Manager
The City Manager shall have the authority to make revisions involving transfers from the appropriated Unanticipated Expenditure Reserve account less than or equal to the aggregate amount of amount adopted within the budget in any one fiscal year ($1,140,000 in FY 2022-23, or 1% of total General Fund appropriations), provided that the Council is notified in writing of the revision, giving the reason, the amount of the revision and the year-to-date total amount of revisions as part of the quarterly financial reports.

Additionally, the City Manager shall have the authority to:
• Amend and/or transfer appropriations among departments and projects within any one fund, provided that the amount of the amended appropriation is $100,000 or less; • Accept grants or donations up to $100,000 or less, increase department revenues and appropriations accordingly and execute related agreements as long as no matching funds are required, and/or departments do not require additional funding for ongoing maintenance costs or future replacem ent costs. • Reasonably deviate from the budgeted personnel allocation schedule provided that at no time the number of permanent funded positions or personnel cost appropriations authorized by the City Council is exceeded; • Hire full-time employees in overstrength positions for no more than one year as long as appropriations are not exceeded to ensure adequate staffing levels for sworn positions, to facilitate training of new employees in critical positions by the outgoing incumbents, or to respond to urgent staffing needs; and • Add/delete positions or to move positions between departments to respond to organizational needs, as long as the number of permanent funded positions and the approved personnel cost appropriations remain the same.

Prior approval of the City Council is required for changes that:
• Increase the overall appropriation level within any one Fund. • Transfer or reallocate appropriations between different Funds. • Cause an increase or decrease in funded authorized position counts in the Adopted Budget. • Cause the aggregate amount of contract change orders to exceed 15 percent of the contract amount and/or exceed prior approved appropriation levels for the subject contract. • Cause transfers from unanticipated expenditure reserve to exceed the aggreg ate amount of $1,140,000 during the fiscal year.
• Result in changes not consistent with the purpose and intent of the Budget as adopted. • Require an appropriation action from any unassigned fund balances or reserves.

Pertaining to ARPA:
• On August 9, 2021 wherein for ARPA funding, the City Council delegated authority to the City Manager including appropriation and contract approval authority up to the approved amount for each program 346
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approved by Council, once compliance with ARPA procurement, contracting and reporting requirements. For budget monitoring and reporting, it includes a quarterly ARPA report for program updates to the City Council.

6. Budget Amendments by the City Council
At City Council meetings, the City Council may from time to time approve expenditures and identify funding sources not provided for in the adopted budget including those expenditures funded through unassigned fund balances or reserves.

7. Budget Transfers and Modification Procedures
Procedures to implement budget transfers or budget modifications are detailed in Standard Operating Procedure No. 21-1, subject to any changes by the Budget Resolution.

8. Automatic Adjustments and Reappropriations
Outstanding encumbrances at prior fiscal year-end will automatically be carried over to current year’s budgets.

Unspent appropriations that are authorized and funded by grant revenues or donations from prior fiscal year will automatically be carried over to current year’s budgets. Unspent City funded grant appropriations from prior fiscal year will automatically be carried over to the current year’s budgets.

Incomplete multiple year project (capital improvement project) balances will automatically be appropriated.

Any unused non-salary and benefits-related appropriations, subject to the approval of the City Manager, at the end of the fiscal year may be re-appropriated for continued use in the subsequent fiscal year. Furthermore, any outstanding contract and/or purchase order obligations (or encumbrances) remaining at the end of FY 2021-22 are subject to carry over into FY 2022-23.

9. Budget Monitoring and Reporting
Monthly Financial Reports - The Director of Finance will prepare and make available a monthly budget report including actual expenditures and encumbrances for distribution to the City Manager and Department Heads, to facilitate monitoring of the budget.

Quarterly Financial Status Reports - The Director of Finance will periodically prepare financial status reports for presentation to the City Council. At the minimum, the report shall include the status of the General Fund revenues and expenditures; Water and Sewer utility fund revenues and expenditures; and document any use of the appropriated Unanticipated Expenditure Reserve; and report the acceptance of any gra nts and donations as authorized in these budget guidelines.

Annually, as part of the 4th Quarter Financial Status Report, the Director of Finance shall report on all active grants and grants closed out during the fiscal year including the purpose of the gr ant, the granting agency, the grant amount awarded, remaining grant funds, and grant activities completed or underway.

10. Reserves
Various unallocated reserves are desired in each of the City's funds to protect the City in emergencies, economic uncertainties, and to finance unforeseen opportunities and/or requirements. Key reserve policies for various funds are described in detail in the document entitled "City of Milpitas Fiscal Policies". 347
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Summary of Budget Guidelines

Fiscal Policies and Budget Process

2 City of Milpitas

• A schedule showing General Fund Revenue and Expenditure projection for the next nine years.

5. Budget Authority of the City Manager
The City Manager shall have the authority to make revisions involving transfers from the appropriated Unanticipated Expenditure Reserve account less than or equal to the aggregate amount of amount adopted within the budget in any one fiscal year ($1,100140,000 in FY 2021-222022-23, or 1% of total General Fund appropriations), provided that the Council is notified in writing of the revision, giving the reason, the amount of the revision and the year-to-date total amount of revisions as part of the quarterly financial reports.

Additionally, the City Manager shall have the authority to:
• Amend and/or transfer appropriations among departments and projects within any one fund, provided that the amount of the amended appropriation is $100,000 or less; • Accept grants or donations up to $100,000 or less, increase department revenues and appropriations accordingly and execute related agreements as long as no matching funds are required, and/or departments do not require additional funding for ongoing maintenance costs or future replacement costs. • Reasonably deviate from the budgeted personnel allocation schedule provided that at no time the number of permanent funded positions or personnel cost appropriations authorized by the City Council is exceeded; • Hire full-time employees in overstrength positions for no more than one year as long as appropriations are not exceeded to ensure adequate staffing levels for sworn positions, to facilitate training of new employees in critical positions by the outgoing incumbents, or to respond to urgent staffing needs; and • Add/delete positions or to move positions between departments to respond to organizational needs, as long as the number of permanent funded positions and the approved personnel cost appropriations remain the same.

Prior approval of the City Council is required for changes that:
• Increase the overall appropriation level within any one Fund. • Transfer or reallocate appropriations between different Funds. • Cause an increase or decrease in funded authorized position counts in the Adopted Budget. • Cause the aggregate amount of contract change orders to exceed 15 percent of the contract amount and/or exceed prior approved appropriation levels for the subject contract. • Cause transfers from unanticipated expenditure reserve to exceed the aggregate amount of $1, 100140,000 during the fiscal year.
• Result in changes not consistent with the purpose and intent of the Budget as adopted. • Require an appropriation action from any unassigned fund balances or reserves.

Pertaining to ARPA:
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• On August 9, 2021 wherein for ARPA funding, the City Council delegated authority to the City Manager including appropriation and contract approval authority up to the approved amount for each program approved by Council, once compliance with ARPA procurement, contracting and reporting requirements. For budget monitoring and reporting, it includes a quarterly ARPA report for program updates to the City Council.

8. Automatic Adjustments and Reappropriations
Outstanding encumbrances at prior fiscal year-end will automatically be carried over to current year’s budgets.

Incomplete multiple year project (capital improvement project) balances will automatically be appropriated.

Any unused non-salary and benefits-related appropriations, subject to the approval of the City Manager, at the end of the fiscal year may be reappropriatedre-appropriated for continued use in the subsequent fiscal year.

Furthermore, any outstanding contract and/or purchase order obligations (or encumbrances) remaining at the end of FY 2020-212021-22 are subject to carry over into FY 2021-222022-23.

Quarterly Financial Status Reports - The Director of Finance will periodically prepare financial status reports for presentation to the City Council. At the minimum, the report shall include the status of the General Fund revenues and expenditures; Water and Sewer utility fund revenues and expenditures; and document any use of the appropriated Unanticipated Expenditure Reserve; and report the acceptance of any grants and donations as authorized in these budget guidelines.

Annually, as part of the 4th Quarter Financial Status Report, the Director of Finance shall report on all active grants and grants closed out during the fiscal year including the purpose of the grant, the granting agency, the grant amount awarded, remaining grant funds, and grant activities completed or underway.

10. Reserves
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Various unallocated reserves are desired in each of the City's funds to protect the City in emergencies, economic uncertainties, and to finance unforeseen opportunities and/or requirements. Key reserve policies for various funds are described in detail in the document entitled "City of Milpitas Fiscal Policies". 351
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City of Milpitas
Open Townhall Online Survey – Written Responses (2022)
Is there anything else that you would want the City to consider in the development of the FY 2022-2023 budget?
 Please put in a traffic light at Kennedy and North Park Victoria. That has been a dangerous intersecton for years! The VTA bus hit my van there years ago.

We live near there and see many people run the stop sign on North Park Victoria. About nine months ago, I was stopped at Kennedy wanting to make a right hand turn onto North Park Victora. A car came barreling southbound down North Park Victoria, I thought I better wait to see if she was going to run the stop sign or not. She ran the stop sign! If I had pulled out, after stopping, she would have hit my car for sure and probably killed me. Please help us!!!  Paint the corners red in the pines.

Help our unhoused residents obtain housing. Build parking so Main Street can become a true downtown
 Cleaning up run down parts of the city and prioritizing improving the "Milpitas smell" or whatever it actually is that causes it. It's been a problem for too long with no action.
 No Smoking within City Limits. Reduce speed limits. Cite noisy vehicles and reckless drivers doing donuts. Cite speeders & tailgaters! Moritorium on new building construction. More park restrooms with daily upkeep. Cite shopping cart theft. Cite trespassers, panhandlers, public intoxication and illegal camping. Increase parking lot patrols to hinder car break-ins. Require businesses to clear their properties of litter and graffiti. Restore green-space by not renewing superfluous business permits and building expansion.

Reduce BART noise. Restore natural hillsides to undeveloped state. Reverse asphalt areas back to indigenous flora. More community Gardens! Go Big on 4thFireworks!!
 Remarking streets. Can barely see lines etc on busy streets.  Put more lights in the parks. They are dark in the night and shady characters lurk when it is dark.
352
Item # 1.
 Traffic light needed in Kennedy and Park Victoria, and a4 way stop sign at Kennedy and Fanyon.
 I am a strong advocate of Public Safety. That however does not mean inflated salaries and benefits. It seems every PS union bargains to be in the top X% when compared to other cities. This is a never-ending spiral that is out of control. I would hope that elected officials would get the best bang for the taxpayers' dollars.
 Upgrade and make useable the community TV station that’s in City Hall already.
 Reducing the number of high level administrators at City Hall.  Yes , please consider a traffic light at the intersection of Kennedy and Park Victoria , it is a very dangerous intersection. The length from calaveras to jacklin is too long. Also a 4 way stop sign on Kennedy and Fanyon. It’s a school crossing and vehicles don’t stop
 Please Allocate 2 milluon to Milpitas Humane Society of Silicone Valley for Milpitas TNR program for Non-profit Organization in Milpitas For Milpitas Citizens.
 Speed bumps in the streets of high parent/child traffic to and from 2 schools.

Example: Randall ES/Rose ES, Carnegie to Roswell on Edsel Drive. Stop sign to stop sign- cars are driving so fast to be able to avoid hitting ANY pedestrian.
 Please do something effective to get rid of bad smell in Milpitas. It’s really bad for health. This is due to landfill site and Milpitas should hire some attorneys to get rid of it.
 It’s not a safe neighborhood any more. One of my cars were parked on the street parking and it got broken in multiple times. The last time it was broken in the thief cut the wires and took lots of parts away, and we had to donate it since it’s not drivable any more. My Prius was parked on the street too. The transmitter was repeatedly stolen. And after I installed a steel pad to present it from happening again, my car window was smashed. It’s becoming more and more scary to live here.
353
Item # 1.
 Increase staffing!
 Provide more discount for seniors on water utility bill, and incentive for homeowners to build tiny home in their backyard for very low income and section 8 people.
 Not just affordable housing. ALL HOUSING PROJECTS. LET COMPANIES BUILD.
 Schools need to be more skilled and willed to be inclusive of marginalized community especially special needs children. Right now, there is much more lip service than actually benefiting programs and actions for children.

Inclusivity in action should be a top mandate.
 Concentrate on affordable housing, and facilities for our homeless community
 Do not keep converting hotels into homeless shelters.  More Parks and green areas for natural Living with good security system  Housing unhoused people must be a priority. If you can't solve this our city ends up looking like a slum.
 No more housing. Preserve space for gardens. Get rid off biohazards in our community. Clean railroad ave and many other encampments like the city if santa barbara
 Invest in our education system, pay our teachers and improve our schools.

354
Item # 1.

Milpitas Special
City Council Meeting
Item #1:

FY2022-23 Proposed Budget
May 10, 2022
2 Key FY 21-22 Accomplishments
3 Key FY 2021-22 Accomplishments
Led on various COVID related programs and policies including EOC management, mobile vaccination clinics, vaccine mandate, business assistance, rent relief, and social services.

Approved the $16.7 M Milpitas American Rescue Plan Act (ARPA) Investment Plan to provide much needed assistance to businesses and vulnerable community members and to fund City infrastructure and programs.

Completed study on fiscal benefits on employment lands in the Metro area.

Implemented major components of the Smart City Infrastructure project.

Implemented Council approved water conservation measures and programs.

Implemented a comprehensive Accessory Dwelling Unit (ADU) strategy to incentivize ADUs and provide more affordable housing options. 4 Key FY 2021-22 Accomplishments
Adopted the Updated Parks and Recreation Master Plan.

Completed 4 CIP projects, began construction of 4 projects, began design of 9 projects.

Continued to leverage existing and new technology systems and improve City processes and systems.

Began implementation of the Milpitas OnDemand shuttle with the $1.2 M grant from Valley Transportation Authority (VTA).

Continued to work with County and non-profits to address affordable housing and homelessness prevention.

Began implementation of a Community Identification and Branding Strategy.

Adoption of utility master plans (Water, Wastewater, & Stormwater) and Climate Action Plan Update scheduled for June 2022.
5 Key FY 22-23 Workplan Items
6 Key FY 2022-23 Workplan Items
Complete construction of Fire Station 2 and begin operations.

Initiate seven CIP projects.

Adoption and implementation of Milpitas Metro Plan; continue work on Main Street/Gateway Specific Plan.

Initiate a comprehensive update of the City’s zoning ordinance.

Implement long-term infrastructure and utility strategies.

Approve the updated City’s 2023-2031 Housing Element.

Continue implementation of the approved Emergency Management Plan.

Begin implementation of the Trails, Bikeway, and Pedestrian Master Plan and Climate Action Plan based on forthcoming Council approval and direction.

Complete disposition of City owned Parcel 1 on South Main Street. 7 Key FY 2022-23 Workplan Items
Continue implementation of the ARPA Investment Plan.

Continue to maximize grant opportunities to fund City programs and infrastructure.

Continue to maximize FEMA reimbursements related to COVID-19 expenditures.

Host Police and Fire community engagement events and enhance social media presence.

Enhance landscape and parks maintenance services.

Initiate modernization of the City’s website, implement a PRA system, begin evaluation of Human Resources and Financial Management systems.

Initiate the Public Art Master Plan and the Historic Resources Master Plan Update.

Continue to support policies and programs that promote equity, diversity, and inclusion.

Update the Personnel Rules and Regulations; negotiate MOUs with 2 groups. 8 Agenda
High-Level Presentation
Budget Calendar
Community Survey Feedback
Economic Outlook – transitional, tempered optimism, balanced approach Citywide Budget
Balanced General Fund Budget & 10-Year Forecast
Positions & City Service Areas
Utility Funds and Developer Impact Fees
Debt Management and CalPERS
Reserves, Policies & Guidelines
Council Referrals
Feedback
9 Survey Specifications

10 Top Line Survey Results
83% are satisfied with the overall quality of life
in Milpitas
91% describe Milpitas as “accepting”
86% believe Milpitas is safe
84% feel that different cultures are celebrated
in Milpitas
86% are proud to live in Milpitas
68% trust the City to plan for Milpitas’ future

11 Given a hypothetical $100 budget, residents
would prioritize public safety with the largest
share of their funds.

Next, I am going to ask you to image you are in charge of Milpitas’ City budget. Every year, the City needs to prioritize funding various services. For this exercise, assume you have $100 to spend on six priority areas.

After I read you all of the priority areas, please tell me how many dollars out of 100 you would spend on each one, keeping in mind that the total must add up to $100.

Public Safety Neighborhoods
and
Housing
Economic
Development
Environment Community
Wellness &
Open Space
Transportation/
Transit
12 Council Priority Areas

Budget Calendar and Process
13 Date Milestone
January 2022 Statistically-valid Community Survey
March through April 2022 Open Town Hall Budget Survey
January 25, 2022 Preliminary Budget Study Session
February 8, 2022 Capitol Improvement Program Study Session March 10, 2022 Community Engagement Meeting #1
April 7, 2022 Community Engagement Meeting #2
April 19, 2022 Master Fee Schedule Adoption
May 3, 2022 Capital Improvement Program Adoption
May 10, 2022 Operating Budget Study Session
June 7, 2022 Public Hearing and Budget Adoption
COVID Impact of Revenue Loss –
General Fund ($30 Million)
14 Variety of strategies: Measure F, defund CIP, use of reserves, interfund transfers, deferred maintenance, defund positions (23.75), employee concessions, and one-time revenues

Fiscal Outlook – Economic Big Picture
15 Period of economic recovery from COVID pandemic
COVID – 6th wave, BA-2 variant, test positivity at 5% Santa Clara County January 2022 Release - State of California proposed FY23 budget correlates with growth of nearly 30% from 2019-20 to 2020-21, estimates average year-over-year growth rate of 3.7% through 2025-26 Milpitas unemployment at 2.9% Feb. 2022 from peak of 12.9% April 2020 U.S. Gross Domestic Product (GDP) unexpected decline at 1.4% annualized in Q1 2022. Dow Jones estimated 1% gain.

CPI increased 8.5% All items before seasonal adjustment, 12-months ending March 2022 CPI- increased 6.5% Excludes food & energy for 12-month ending March 2022 Federal Reserve strategy and rate hikes  mortgage rate and borrowing costs increase Inflation, rising fuel, labor shortage and supply chain challenges Ukraine War and unrest impact on macro-economics, fuel, costs and impacts locally Continue to assess and monitor the situation
16 City Budget

17 FY2022-23
Citywide
All Funds
Revenues
$207.7M
Property Taxes
$42.6
19%
Intergovernmental
Revenue
$3.6
1%
Sales Taxes
$33.9
15%
Transient Occupancy
Tax
$8.3
4%Licenses, Permits &
Fines
$11.5
5%
Use of Money &
Property
$3.0
1%
Other Taxes
$5.0
2%
Charges For Services
$72.1
31%
Franchise Fees
$6.1
3%
Other Revenue
$32.0
14%
Operating Transfers In
$10.9
5%
$207.7 million revenue excludes changes in fund balance and/or CIP reserve of $21.5 million and interfund transfers of $18.7 million.
($ in million)
18 FY2022-23
Citywide
All Funds
Expenditures
$207.7M
City Manager
$2.2
1%
Building Safety and
Housing
$8.8
4% Fire
$28.4
14%
Recreation
$5.9
3%
City Attorney
$1.3
1%
Finance
$6.3
3%
Information
Technology
$4.7
2%
Police
$38.2
18%
Planning
$2.4
1%
Economic
Development
$1.0
0%
Public Works
$23.2
11%
City Clerk
$0.6
0%
Non-Departmental
$43.4
21%
Engineering
$4.1
2%
City Council
$0.6
0%
Capital
Improvement
Projects
$23.9
12%
Human Resources
$1.9
1%
Transfers Out
$10.9
5%
($ in million)
General Fund – 10-Year Forecast ($million)
19 Measure F Expires

20 General Fund –
Proposed
FY23 Revenues
Estimated 6% improvement
Property Tax per County, continue to
monitor ERAF (with 30% reduction)
Sales Tax per HdL consultant
TOT/hotel slow recovery
Charges for services – esp recr
License & permits – esp bdg permits
FEMA (reimbursement $340k)
Financial Reserves are preserved

21 General Fund – Proposed
FY23 Expenditures
Estimated 6% increase
Leverages ARPA
Diverse strategies – contract services,
limited term staffing, systems for
operational efficiency
Risk management – PLAN JPA $650k
premium increase. (General Fund 69%
and Others 21%)
Replacing 11 vehicles
Transfer – defer till FY24 $500k budget
transfer to storm water fund

22 FY2022-23
General Fund
Revenues
$117.7M

42.6 27.5

11.5 8.3

7.2 6.4

5.4 5.9

1.1 1.0

0.4 0.4
0 5 10 15 20 25 30 35 40 45
Property Taxes
Sales & Use Tax
Licenses, Permits & Fines
Transient Occupancy Tax
Operating Transfers In
Sales Tax - Measure F
Franchise Fees
Charges for Services
Other Taxes
Intergovernmental
Use of Money and Property
Other Revenues
FY22-23 Revenues By Category ($ Millions)
Total Sales Tax
$34M
Measure F
$6.4M
1% Bradley
Burns
$27.5M
23 FY2022-23
General Fund
Services/
Expenditures
$117.7M

37.9 28.2

9.7 7.8

6.2 5.8

4.4 4.1

4.0 2.1

1.9 1.9

1.2 1.0

0.6 0.6

0.3 0 5 10 15 20 25 30 35 40
Police
Fire
Public Works
Non-Departmental
Building Safety & Housing
Recreation & Community Services
Finance
Information Technology
Engineering
City Manager
Human Resources
Planning
City Attorney
Economic Development
City Clerk
City Council
Transfers (Regular)
FY22-23 Department Budget Allocation ($ Millions)
24 FY2022-23
General Fund
Services
Expenditures
$117.7M
Police
32%
Fire
24%
Public Works
8%
Non-Departmental
7%
Building
Safety &
Housing
5%
Recreation &
Community
Services
5%
Finance
4% Information
Technology
3%
Engineering
3% City Manager
2%
Human
Resources
2% Planning
2% City
Attorney
1%
Economic
Development
1%
City Clerk
0% City Council
0% Transfers (Regular)
0%
25 Measure F

0.25% Sales
Tax
Oversight
Committee
• 0.25% “sales tax” (transaction & use tax), 8 Years, Effective April 1, 2021 through April 1, 2029
• FY2022-23 $6.4M Estimated Revenues
• Measure F Oversight Committee (Committee) –
• On March 17, Committee reviewed and confirmed that the services recommended to be maintained with Measure F are allowable expenditure consistent with Measure F.
• While advisory in nature, Committee asked Council to consider:
• Milpitas Fire Department to cease funding and operation of a dedicated EMS vehicle
• Double the square footage available for community gardens • City to work with school district to enable community use of tennis courts • City to fund a grant of $2,000 towards the Calaveras Hills High School Garden Club to maintain a fruit orchard within their compounds 26 Service Level & Positions
Restored & Enhanced Services – especially public safety, public works, infrastructure and risk management Bring back services with ARPA and fiscal recovery
Public Works +7 positions
• 4 Maintenance Assistants (limited term)
• 2 Maintenance Workers I/II
• 1 Equipment Maintenance Worker III (Storm Water)
Public Safety +2 positions
• Fire – Administrative Analyst II
• Police – Police Evidence Technician
Infrastructure +2 positions
• Engineering/CIP – Principal Engineer & Junior/Assistant Engineer Others +2 positions & swap from contract services
• Risk – Financial Analyst
• Recreation and Community Services – Assistant III – Community Engagement • City Attorney – 3 positions (CAO, Asst CAO, Legal Secretary) – organization and positions preliminary FY22 Restored 9 FTE of which 7 FTE funded by ARPA. Continued Defunding 9.75 FTE through FY23 Staffing – Changes from prior year
27 Restored Positions
3 FTEs
• (PW) Equipment Maint. Worker III -
Storm
• (Finance) Financial Analyst – Risk
• (Recr) Assistant III – Community
Engagement
Added Positions
7 FTEs
• (Fire) Admin Analyst I/II
• (Police) Evidence Technician
• (Engr) Principal Engineer
• (Engr) Junior/Assistant Engineer
• (PW) 2 Maint Worker I/II –
Streetscape
• (PW) Maint Assistant - Streetscape
Swap from
Contract Services
7 FTEs
• (PW) Maint Worker III - Parks
• (PW) 3 Maint Assistant – parks
• City Attorney
• Assistant City Attorney
• Legal Secretary
28 FY23 Funded Positions by
City Service Areas

29 City Service Area (CSA)
Steven G. McHarris
City Manager
Walter C. Rossmann
Deputy City Manager
Ashwini Kantak
Assistant City Manager
Community
Development
Building Safety and
Housing
Economic Development
Engineering (Land Dev.,
Traffic)
Fire Prevention
Planning
Leadership &
Strategic Support
City Clerk
City Manager’s Office
Finance
Human Resources
Information
Technology
Public Safety
Police
Fire (Operations)
Community
Services &
Sustainable
Infrastructure
Engineering (Design
and Construction;
Traffic)
Public Works
Recreation and
Community Services
30 Public Safety CSA Proposals & Services

1. Fire Administrative Support Staffing ($152,913)

2. Police Evidence Unit Staffing ($136,855)

3. Fire Fleet Enhancement ($200,000 one-time) – 2 command/deployment vehicles (model F250s)

4. Axon Taser Upgrade ($39,235)

5. Lifepak for Ambulance Program ($37,728 one-time)

6. Interra Operations Module Enhancement ($33,000, one-time)

7. Police Wellness Services Enhancement ($30,000)
Community Development CSA
Proposals & Services
31 1. Housing Administrative Enhancement – limited term staffing ($172,302)

2. Professional Services Enhancement – Building Safety ($200,000 one-time, net $0)

3. Special Project Associate for Zoning Ordinance Update ($93,142)

4. Part-time Staffing for Planning Admin Support ($72,147 one-time)

5. Property Asset Management Services ($50,000 one-time)

6. Accessibility Training ($20,000)

7. Granicus Annual Subscription Fees (STR) ($10,000)
Community Services & Sustainable
Infrastructure CSA Proposals & Services
32 1. CIP Design and Construction Principal Engineer ($69,358)

2. CIP Design and Construction Junior Staffing ($63,203)

3. Parks Maintenance Staffing ($12,362)

4. Landscape/Streetscape Maintenance Staffing ($134,046)

5. Storm Water Facility – Equipment Maintenance Staffing ($164,802)

6. Utility Maintenance Fleet Addition ($37,356 one-time)

7. Organic Waste Diversion Program (SB1383) and Solid Waste Contract Administration Funding ($400,000)

8. Common Interest Group Legal Services Contribution ($1,000,000 one-time)

9. Supervisory Control and Data Acquisition (SCADA) Contract Service ($150,000)

10. Recreation & Community Services Organizational Study ($50,000 one-time)

11. Community Engagement Program Staffing ($77,551)

12. Part-time Staff Salary Alignment (RCS) ($27,423)
Leadership & Strategic Support CSA
Proposals & Services
33 1. Risk Management Staffing ($145,893)

2. Part-time staff enhancement ($32,264)

3. Reclassification of Information Technology Manager ($28,752)

4. Labor Negotiations Survey ($35,000)

5. Enhanced Cellular Services ($37,533)

6. Public Records Act (PRA) Management Software ($9,500)

7. Office 365 Feature Enhancement ($37,533)
ARPA Investment Areas
$16.7M Federal COVID Stimulus
34 Water Utility Fund
• Water Utility Fund
• Sources ($34.1M) & Uses ($34.1M)
• Reserves $68.3M
• CIP $53M, PERS $1M,
• Contingency $8.7M, Budget stabilization $5M
• Long-term planning with master & financial plans
• Rate increases will be needed in future years
dependent on master plan and financial utility plan
discussions
• Continue to monitor wholesale rate increases
35 Waste Water Utility Fund
36 Waste Water Utility Fund
• Sources ($23.7M) & Uses ($23.7M)
• Reserves $56.6M
• CIP $46M, PERS $4M,
• Contingency $3.5M, Budget stabilization $2.7M
• Long-term planning with master & financial plans
• Rate increases will be needed in future years
dependent on master plan and financial utility plan
discussions
• Continue to monitor the SJ/SC Regional Treatment
Facility costs and litigation

Storm Water Drain Funds
(#340-341)
37 Storm Water Fund
• Sources - only Development Fees ($300k) and
General Fund
• Costs – direct, indirect and facilities (13 pump
station facilities)
• Add Equipment Maintenance III - Storm
• Dependent on master plan and financial utility
plan discussions
• Need to become a utility enterprise and become
financially sustainable

Solid Waste Fund (#280)
38 Solid Waste Fund
• Sources $0.6M ($0.2M AB939 Fees, $0.4M Admin Fee)
• Uses ($0.9M)
• $400k Administrative Fee to MSI
• Approx. 2% rate increase effective July 1, 2022
• $0.87 per month or $10.50 annually charged for the typical residential household
• Organic Waste Diversion Program and Solid Waste
Contract Administration Funding
• This implements SB1383 organic waste and Phase 1
of addressing the fund’s structural deficit.

Debt Management
39 2020 General Fund Lease Revenue Bonds (fire station
2, energy improvement projects)
Wastewater Revenue Refunding Bonds,
2017 Series (refund 2006 COPs)
Wastewater Revenue Bonds, 2019
Series (certain wastewater system improvements)
Water Revenue Bonds, 2019 Series (certain water
system improvements)
FY2022-23 Principal & Interest = $3.7M

Developer Impact Fees
40 Metro Specific Plan Update
• Policy Guidance: community, jobs, transportation, housing, affordable housing
• Funding: Impact fee update
Gateway - Main Street Specific Plan
• Policy Guidance: mixed-use community , including entertainment, retail, civic, cultural, office, and high-density mixed-use • residential in a compact, walkable, and unique centralized setting. • Funding: New impact fee

CalPERS – Liability, costs & reserve
41 Reserves $37.7M ($34.9M Section 115 and $2.8M balance sheet), Ranks top at #3 amongst Santa Clara Cities
Plans: Classic, Tier 1, Tier 2  Reduced benefit and employer cost over time FY21 established Section 115 Pension Trust – improvement investments and pension cost management
Conduct annual review with independent actuary to analyze City’s pension obligations & strategies
Pension costs are included in the FY23 budget and forecast FY2022-23 and forecast does not propose to use any of the Section 115 Pension trust or pension balance sheet reserves.
42 General
Fund
Reserves
$85 million -
consistent
with policies
Plus $33.9M
115 Trust

Budget Policies & Guidelines
43 FY22-23 Proposed –
• Does NOT use reserves
• Retains $1.45M Future Year Deficit Reserve
• $2.8M Pension Stabilization Balance Sheet NOT used
Budget Policies Proposed changes:
• Contingency & Budget Stabilization @ policy 33.34% total • Pension Stabilization Reserve – contribute additional to reserve as confirmed by actuary (Bartel & Associates)
• More for infrastructure, storm system, and technology (Artificial Turf reserve, and remaining 20% to Gen Gov CIP; Housing 10%, Transportation & Transit 10%, Storm 30%, Technology 20% and Unassigned 10%)
Budget Guidelines include the Council designated City Manager authority for ARPA procurement, contract and appropriation
Council Referrals
44 No General Fund Needed
• Homelessness Task Force – feasibility study of Tiny Homes village ($130,000 Housing Authority Fund 295)
• Senior Center Mural ($20,000 Public Art Fund)
General Fund Needed ($200,000 total estimated costs)
• 3-Day Roller skate summer event ($100,000)
• Ferris Wheel – 4th of July ($55,000) ** no vendor response thus far ** • Solar Panels at City facilities ($25,000 for financial feasibility analysis) • Address on City Hall façade ($20,000 for design cost) Council Referrals
45 Funding is TBD (To Be Determined)
• Ballot Measure(s), if any, may be funded with Unanticipated Expenditure Appropriation.
• Childcare Center Initial Assessment – initial assessment will be handled by staff and no funding is requested at this time.
• Third-party food delivery fee caps – estimated fiscal impact cannot be determined at this time. Additional legal analysis required. • Lease 230 N. Main St. – No additional funding is needed at this time. After multiple City reached outreach to the owner, no response thus far.

Council Referrals
46 Council Clarification/Confirmation Requested
• Murals on VTA (Great Mall) and CalTrans (Main Street) Pillars – • # of murals, prioritize location and funding level
• 1 site, $100,000 suspend 2 years of the annual mural program • 2 sites, $200,000 suspend 4 years of the annual mural program • Homelessness Encampment Response Team Funding –
• March 15, 2022 approved ARPA funding for the SC County HEAT (Homeless Engagement and Access Team) which provides specialized services and integrates with County programs.
• Seeking confirmation that this action is responsive to Council’s goal of conducting outreach and providing referrals to unhoused community to Countywide network of services One-time General Funding Available ($245,000)
• SCC Library District voted on May 4 the City’s FY23 library funding $54,842 vs. budget of $300,000.

PROPOSED BUDGET FY2022-23
• Reflective of information gathered, Council priorities, transitional City finances
• Balanced and tempered cautious approach to City
services, especially with limited funding for
additional projects or programs
• Continue strategic, innovative and financial
prudence.
• Seek clarification, confirmation especially with
Council referrals
• Tremendous Thanks to the City Council, City
Management and Staff, and Community Members.
47 City of Milpitas
455 E. Calaveras Blvd., Milpitas, CA 95035
www.ci.milpitas.ca.gov 408-586-3000
49 BACKUP SLIDES
50 Projected Fund Balance

51 Santa Clara Cities
Reserve Comparison ($ Million)
51 General Fund Reserve
as of
June 30, 2020
FY2020 Actual General
Fund Expenditure
Percent as of General
Fund Expenditure
Los Altos Hills $11.9 $10.0 119%
Cupertino 66.3 95.5 69%
Milpitas 68.3 111.3 61%
Morgan Hill 21.3 39.4 54%
Sunnyvale 85.1 187.8 45%
Santa Clara 115.6 264.7 44%
Mountain View 67.4 171.7 39%
Saratoga 7.5 21.4 35%
Los Gatos 16.1 50.4 32%
Campbell 15.6 54.4 29%
Gilroy 14.7 64.1 23%
Los Altos 12.9 58.3 22%
Palo Alto 35.9 214.3 17%
San Jose 79.4 1,103.8 7%
Monte Sereno No data No data No data
52 ARPA -
Programs
52 53
Santa Clara Cities
UAL and Reserve Comparison ($ Million)
53 Total UAL Reserve for Pension Ratio of Reserve to
UAL
Los Altos Hills $3.0 $2.6 87%
Cupertino 53.8 12.7 24%
Milpitas 229.4 33.9 15%
Los Altos 45.6 5.0 11%
Morgan Hill 57.4 6.1 11%
Santa Clara 639.5 21.6 3%
Campbell 67.6 2.3 3%
Los Gatos 61.9 0.7 1%
Gilroy 99.0 2.0 2%
Monte Sereno 0.9 No Data -
Mountain View 249.4 - -
Palo Alto 510.4 17.8 3%
San Jose 3,484.5 - -
Saratoga 10.0 No Data -
Sunnyvale 421.9 4.8 1%
54 Cities Amount of
Reserves*
Percent of
General Fund**
Purpose
Cupertino $66.3 69% Economic Uncertainty ($19M); PERS ($12M); Sustainability ($123k); Unassigned ($34.5)
Milpitas $68.3 61% PERS Stabilization ($33.9M); Contingency ($17.3M); Budget Stabilization ($17.1M)
Sunnyvale $85.1 45% Budget Stabilization ($59.9M); Contingency ($25.2M)
Santa Clara $115.6 44% Budget Stabilization ($80M); Pension Stabilization ($21.6M); Unassigned ($14M)
Mountain View $67.4 39% Budget Contingency ($8.0M); Unassigned ($19.3M) Pleasanton $36.8 31% Unassigned
Redwood City $42.9 27% Unassigned
Fremont $44.5 21% Unassigned
Palo Alto $35.9 17% Budget Stabilization
*Amounts in millions. Taken from Fiscal 19-20 Annual Reports and only showing Contingency, Budget Stabilization, Pension, and Unassigned Reserves.
**Percent of General Fund Expenditures and Transfers Out of Fiscal 19-20.

Reserve Survey - FY2019-20 Audited Financial Statements Debt Management – per audit statement (note 9)
55 Description
Original
Principal
Balance
Outstanding
Principal
Balance
6/30/2021
Effective
Period
(issuance
year and
maturity)
Source of
Funding
FY2022-23
Principal &
Interest
2020 General Fund Lease
Revenue Bonds
(fire station 2,
energy improvement projects)
$18,445,000 $18,445,000 2020 due
June 1, 2041
General Fund $1,196,800
Wastewater Revenue
Refunding Bonds, 2017
Series
(refund 2006 COPs)
$4,725,000 $3,310,000 2017 due
Nov. 1, 2026
Net Revenues
from Wastewater
System
$649,900
Wastewater Revenue
Bonds, 2019 Series
(certain
wastewater system improvements)
$29,840,000 $29,395,000 2019 due
Nov. 1, 2049
Net Revenues
from Wastewater
System
$1,154,475
Water Revenue Bonds,
2019 Series
(certain water system
improvements)
$17,210,000 $16,765,000 2019 due
June 1, 2049
Net Revenues
from Water
System
$672,025
Totals $70,220,000 $67,915,000 $3,673,200
56 FY2022-23
10 Parks
Streetscape
Medians
Brightview $446,791
Parks (10 parks including skate park) = 1Maint Worker III, 3 Maint Asst Streetscape/Landscape = 2 Maint Worker I, 1 Maint Asst
57 Staffing – Continued Defunded Positions
Continued Defunded Positions
Department Title FTE
City Manager Office Specialist 1
Recreation Rec Supervisor 1
Recreation Public Services Assistant I/II 1
Recreation Rec Service Assistant IV 1
Recreation Office Assistant I/II 0.75
Engineering Associate Civil Engineer – Land Development 1 Public Works Equipment Maintenance Worker II (Facilities) 1 BSH Building/NP Inspector 1
BSH Plan Checker 1
Fire Entry Level Fire Inspector 1
Grand Total 9.75
58 Staffing – Continued Defunded Positions
*positions which were only defunded partially as approved in the FY 2021-22 Adopted Budget or authorized to be funded with ARPA funds.
59 Salaries & Benefits – $5.2M increase

60 MOU Contracts
Employee Group 1/1/2021 7/1/2021 7/1/2022 1/1/2023 7/1/2023 1/1/2024 7/1/2024 MidCon Original 3% 3%
MidCon Updated 0% 2% 2% 3%
MPOA Original 5%
MPOA Updated 0% 2.5% 2.5%
Unrep Original 3% 3%
Unrep Updated 0% 2%
IAFF Original 4%
IAFF Updated 0% 2% 2%
Protech No Change 3% 3%
MEA No Change 3% 3%
61 Utility Outstanding Balance - Support
• California Water Arrearages Program
• Total $148,000, 207 Accounts
• 194 residents $115,000; 13 commercial $28,000)
• Service Period: March 2020-June 2021
• California Wastewater Arrearages Program
• Total $100,000, 176 Accounts
• 163 residents $72,400; 13 commercial $24,800)
• Service Period: March 2020-June 2021
• California Low Income Household Water Assistance Program (LIHWAP) – available June 2022 https://www.csd.ca.gov/waterbill; • City payment plans
• City water shutoff notices sent in Feb. 2022 and posted online March 62 Low Income Housing Water Assistnace Program
https://www.csd.ca.gov/waterbill
63 Budget Policies

64 Water Fees
(Ord. 120.48, 2019)

65 Waste Water Fees
(Ord. 208.53, 2019)

66 Water Fees

67 Wastewater Fees

68 Solid Waste Fees

69 FY2022-23 Fleet
Department Description
Police 2023 Ford Interceptor
Police Marked Patrol Vehicle
Police Marked Patrol Vehicle
Police Marked Patrol Vehicle
Police Marked Patrol Vehicle
Police Unmarked Detective Vehicle
Public Works Concrete Saw
Public Works Flatbed Crane
Public Works F250 Truck
Fire Command Vehicle
Fire Command Vehicle
Grand Total
70 Measure F Oversight Committee

71 Revenue Projection
Data-driven, historical growth rates, working with consultants and City Departments, judgement
Property Tax (FY23 +4%), contingencies:
• Property Tax ERAF less 30%, caution ($2.3M total)
• Backlog of Property Tax Assessed Valuation Appeals
Sales Tax (HdL & Assoc.)
• Improving for FY22, leveling in FY23, significant shift to online shopping and county pool
TOT (FY23 +8%), TOT July – Nov 2021 weaker than estimated Includes Fire SAFER Grant ($800k FY22, $221k FY23)
72 Sales Tax –
1% Bradley
Burns
• FY19 $28M actual
• FY20 $24.2M actual
• FY21 $22.8M actual
• FY22 $25.7M estimated (12% improvement)
• FY23 $26.0M +3% Forecast
• FY24 $27.1M +3.5% Forecast
July-Oct
73 TOT Hotel Tax
FY22 Amended Budget $7.5M with two new
hotels go-live
FY22 5 months of revenues is less than
budget
• Strong growth May – July 2021
• Flat and reductions Aug – Sept – Oct 2021
• Assumes 5% increase to achieve FY22
$7.5M Amended Budget
FY23 Assumes 8% Increase
ARPA economic development & hotel
assistance
Continue to monitor

74 TOT Hotel Tax – Revenue Trend
Only 5
periods
75 Expenditures Projections
Personnel cost budgeting based
upon current MOUs
Contract scheduled increase(s) or
CPI% estimate
Pension costs based upon Bartel
Actuary Report
• Includes the payment of unfunded
liability (UAL) in the forecast
• CalPERS FY21 21% investment
return reduces unfunded liability
Staffing – Defunded and Restored
Funding (FTE = full time equivalent
Covid Budget Impacts
to Staffing
FTE Comments
Defunded 23.75 13.75 @ FY21
Mid-Year
10 (net) @
FY22 Adopted
Restored Funding 9 FY23 Proposed:

ARPA = 6 public
safety
Gen Fund = 3
non-safety
Net Defunded 14.75
76 Expenditure Projections (cont’d)
Higher General Liability & Property Insurance Premiums
• FY22 Board approved 3-year phase-in, saved Gen Fund ~ $300k • Assumes +40%, $647k total to All Funds or $448k to Gen Fund, yr2 of 3yr phase-in • PLAN JPA FY22 strategy by joining CARMA Risk Pool
Allocated worker’s comp premium to other funds (saving $105k Gen Fund ) Utility Costs
• Innovation >> Environmental Sustainability & Cost Savings >> City Services • Includes the electricity utility savings from the senior & community center energy CIP projects ($770k FY23, $800k FY24, avg $1.2M avg per year over 20 years) • +6% estimated increase for water and gas utility costs Includes $211k vehicles – program includes leasing & vehicle auctions Transfer – FY23 excludes $500k budget transfer to storm water fund • Included in FY24 and beyond
77 Potential Impacts Not
Included
Unfunded aging or new infrastructure (e.g.
performing arts center, public safety buildings,
storm drain system)
Operational costs of new/expanded
infrastructure
Any pension costs due to future CalPERS
Board decisions
COVID continues to improve

78 Potential Budget Strategies – 1/25/2022
Date $ Million Source & Consideration
Future Deficit Reserve $1.4M General Fund prior year savings FEMA Reimbursement $0.6M FEMA COVID Reimbursement. 6 claims pending final review ($0.6M), all projects ($1.2M)
$2.0M Subtotal One-Time Sources
General Fund PERS Balance $0.9M General Fund FY21 surplus ~ 50% of Bartel actuarial recommendation. Uses Gen. Fund balance for 3 years, then use Pension 115 Trust
Property Tax $0.1M Enhance 4% assumption given high $ transaction Gas Tax Offset to General Fund $0.1M Offset General Fund eligible costs to Gas Tax Fund $1.1M Subtotal On-going
Master Fee Study TBD Update and new fees, review billing and overhead rates, review costs allocation to enterprise funds
Fiscal Policies & Strategies TBD Enhance data-driven and responsiveness ARPA TBD Consider program re-allocation in budget development 79 Pension Trust & General Fund PERS
Balance
Possible Strategy includes 3 main components:

Pension Section 115 Trust – “115 Trust”
• Established irrevocable trust on June 30, 2021@ $33.9M • FY22 First full year investment, with moderate risk strategy of 5-years, 3%-6% earnings goal General Fund PERS Balance – on the balance sheet
• FY21 Surplus, City set aside another $2.8M on the balance sheet Bartel Actuary enlisted to conduct City pension actuarial reports and develop funding strategies • CalPERS FY21 investment return 21% versus 6.8% assumed (discount rate) • January 2022 Bartel published City report with the CalPERS 21% investment return, 6.8% discount rate and 115 trust at 4%
• Determines that the 115 Trust will stabilize future City pension impacts on the budget • Recommends withdrawing from the 115 Trust starting in FY23 and aligns withdrawals with Milpitas unfunded liability payments through 2037
Proposal
Conservatively implement 50% of actuarially determined funding Use the Gen Fund PERS Balance ($2.8M) over 3 years (or $0.9M/yr) prior to using 115 Trust Advantages: allows 115 Trust to accrue investments earnings for 4 years, then begin withdrawal in year 5 80 CalPERS Pension – FY2022-23 Costs

81 Bartel Report – Misc Pension Unfunded
Liability

82 Bartel Report – Safety Pension
Unfunded Liability

83 Bartel Report – Misc Funded Status -
Improving

84 Bartel Report – Safety Funded Status -
Improving

85 Bartel Report – Misc % of Payroll – peak
2030

86 Bartel Report – Safety % of Payroll –
peak 2032

87 Bartel Report – 115 Trust Misc Balance –
through 2042

88 Bartel Report – 115 Trust Safety Balance
– through 2042

89 Community & Employee Engagements
Surveys
• Statistically valid Community survey
• Open Town Hall survey
• Employee budget meetings
• Employee engagement survey
Community budget meetings
• Two sessions
Multiple Budget Study Sessions
Public Hearing – Adoption of the Budget

90 Community Engagements
Engagement Tools
• Dedicated page at
www.ci.Milpitas.ca.gov/budget
• Social media channels (Facebook,
NextDoor, Twitter)
• City Website
Meeting broadcasts (YouTube,
Facebook)
Newsletters (Milpitas Matters and
Connected)
Virtual Webinars

91 Prelim FY2023-32 General Fund
Forecast ($million)
FY 21-22
Amended
FY 22-23
Forecast
FY 23-24
Forecast
FY24-25
Forecast
FY 25-26
Forecast
FY 26-27
Forecast
Total Sources $111.3 $116.8 $123.2 $129.1 $133.4 $137.9 Total Uses 110.8 116.5 121.6 125.8 129.4 134.0
Annual
Surplus/Deficits
$0.5 $0.30 $1.6 $3.3 $4.0 $3.9
FY22 Surplus will
be offset with
encumbrance
budget
carryforward
FY 27-28
Forecast
FY 28-29
Forecast
FY 29-30
Forecast
FY 30-31
Forecast
FY 31-32
Forecast
Total Sources $142.3 $145.0 $144.0 $148.0 $152.7
Total Uses 138.3 144.6 150.7 157.6 163.4
Annual
Surplus/Deficits
$4.0 $0.4 $(6.7) $(9.5) $(10.26
Measure F Expires
April 1, 2029
FY23 Forecast v4
92 2023-2027 CIP Cost Summary
Community
8% Parks
9%
Streets
43%
Water
21%
Sewer
17%
Storm
2%
Project
Category
No. of
Projects
Project Cost
Estimates
Community
Improvements 41 $16,174,000
Parks 19 $18,805,000
Streets 41 $87,334,000
Water 20 $43,960,000
Sewer 10 $35,362,000
Storm 8 $3,105,000
Total 139 $204,740,000
• Includes Projects with Insufficient or No Funding
in the amount of $82,920,000
93 FY 2022–23 Cost Summary
Community
21%
Parks
7%
Streets
36%
Water
7%
Sewer
29%
Storm
0%
Project
Category
No. of
Projects Cost Estimates
Community
Improvements 15 $ 5,094,000
Parks 5 $1,580,000
Streets 9 $8,540,000
Water 7 $1,815,000
Sewer 4 $6,947,000
Storm 0 $0
Total 40 $23,976,000
94 FY 2022-23 Community Projects
Project No. Description
Rec. Funding
Amount Funding Source
2010 Land/Right-of-Way Value Determination $9,000 TASP
3403 Fire Station Improvement $200,000 Gen. Gov’t CIP
3406 City Building Improvement $800,000 Gen. Gov’t CIP
3438 Annual Tree Replacement Program $125,000 Gen. Gov’t CIP 3460 Comprehensive Zoning Ordinance Update $200,000 Comm. Planning Fee 3462 On-Call Facilities Maintenance & Repairs $330,000 Gen. Gov’t CIP 3489 Public Art Project $130,000 Public Art Fund
3490 Capital Improvement Program Administration $720,000 Gen. Gov’t CIP, Sewer, TASP, Water 3716 City Parking Lot Rehab. Program $200,000 Gen. Gov’t CIP New Fire Station No. 1 Modular Building $550,000 Gen. Gov’t CIP New GIS Development & Data Collection $350,000 Permit Auto. Fund, Sewer, Water New Public Safety Mobile Computer Terminals $360,000 Gen. Gov’t CIP New HVAC Repairs and Upgrades $620,000 Gen. Gov’t CIP
New Historic Resources Master Plan Update $200,000 Gen. Gov’t CIP New Railroad Quiet Zone Feasibility Study $300,000 Gen. Gov’t CIP Total $5,094,000
95 FY 2022-23 Parks Projects
Project
No. Description
Rec. Funding
Amount Funding Source
3463 On-Call Parks & Landscaping Services $200,000 Gen. Gov’t CIP, CDF 3491 Cardoza Park Softball Fields
Improvement $500,000 Park Improvement
5108 Sports Fields Turf Rehabilitation
Program $225,000 Midtown Park
5113 Minor Sports Courts Rehabilitation $355,000 Park Improvement, Midtown Park
New Rose Garden with Children’s
Memorial $300,000 Gen. Gov’t CIP, Midtown
Park
Total $1,580,000
96 FY 2022-23 Streets Projects
Project
No. Description Rec. Funding Amount Funding Source
2016 S. Milpitas Blvd. Veh. Bridge at Penitencia $700,000 TASP 2018 Montague Pedestrian Overcrossing at
Penitencia
$2,490,000 TASP
3411 Sinclair LLMD Improvement 98-1 $11,000 LLMD
3426 Annual Sidewalk, Curb & Gutter Repair $220,000 Midtown Park Fund & Park Improvement Fund
3440 Annual Street Light, signal and Signage $375,000 Gas Tax 3449 Street Landscape Irrigation Repair $360,000 Gen. Gov’t CIP 4267 Soundwall and Barrier Repair & Renovation $300,000 Street Improvement Fund 4304 Street Resurfacing Project 2021-22 $4,000,000 Gas Tax, Measure B, SB1, VRF 4306 Bike and Pedestrian Outreach $84,000 Measure B
Total $8,540,000
97 FY 2022-23 Water & Sewer Projects
Project No. Description Rec. Funding Amount Funding Source 6118 SJ/SC Regional Waster Water Facility $6,630,000 Sewer Infrastructure & Treatment 6124 Sewer Pump Station Rehab. Program $200,000 Sewer Infrastructure 6126 Minor Sewer Projects $50,000 Sewer Infrastructure
6134 On-Call Sewer Maintenance & Repair Services $67,000 Sewer Infrastructure Total $6,947,000
Project No. Description Rec. Funding Amount Funding Source 2019 (Rmb) Metro Recycled Water Distribution $300,000 TASP 7076 Well Upgrade Project $515,000 Water Capital
7110 Hydrant Replacement Program $90,000 Water Capital
7112 Reservoir Clearing $60,000 Water Capital
7126 Water Conservation Program $160,000 Water Capital
7133 Minor Water Projects $390,000 Water Capital
7137 On-Call Water Maintenance & Repair Services $300,000 Water Capital Total $1,815,000
98 FY 2022 – 23 Funding Summary
CIP Category
Description
General
Gov’t CIP TASP Sewer Fund
Streets
Funds** Water Fund
Other
Funds* Total
Community
Improvements $3,937,000 $153,000 $262,000 $0 $262,000 $480,000 $5,094,000 Parks $300,000 $0 $0 $0 $0 $1,280,000 $1,580,000
Streets $360,000 $3,190,000 $0 $4,979,000 $0 $11,000 $8,540,000 Water $0 $300,000 $0 $0 $1,515,000 $0 $1,815,000
Sewer $0 $0 $6,947,000 $0 $0 $0 $6,947,000
Storm Drain $0 $0 $0 $0 $0 $0 $0
Total $4,597,000 $3,643,000 $7,209,000 $4,979,000 $1,777,000 $1,771,000 $23,976,000 *Includes Community Facilities District, Community Planning Fees, Light and Landscape Maintenance District, Midtown Park, Park Improvement, Permit Automation, and Public Art Funds **Includes Gas Tax Fund, Measure B, SB1 RMRA, Street Improvement Fund, and Vehicle Registration Fee.

City of Milpitas
455 E. Calaveras Blvd., Milpitas, CA 95035
www.ci.milpitas.ca.gov 408-586-3000

Milpitas City CouncilMay 10, 2022

Milpitas City Council
May 10, 2022