AGENDA and NOTICE
Special Meeting
Thursday, March 10, 2022
5:00 P.M
HYBRID IN-PERSON/VIRTUAL MEETING
REFER TO THE END OF THE AGENDA TO REVIEW
OPTIONS FOR PARTICIPATING IN THE MEETING
REMOTELY OR IN-PERSON.
IF YOU ATTEND THE MEETING IN PERSON, A FACE COVERING
IS RECOMMENDED BUT NOT REQUIRED. LIMITED PUBLIC SEATING
WILL BE AVAILABLE IN THE CITY COUNCIL CHAMBERS
CONSISTENT WITH CDC GUIDELINES.
A. ROLL CALL
B. CITY MANAGER REPORTS
1. Work Session for 2022-2024 Biennial Budget
C. ADJOURNMENT
HYBRID IN-PERSON/VIRTUAL MEETING NOTICE
This meeting is being conducted utilizing teleconferencing and electronic means consistent with Assembly Bill 361.
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Mayor Nagy, Vice Mayor Hannon, and Council Members Bucci, Collazo, and Freitas may be attending this meeting via teleconference. Teleconference locations are not open to the public. In the event that any members of the City Council elect to attend this meeting via teleconference, all votes conducted during the teleconferencing session will be conducted by roll call vote.
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Item B. 1.
DATE 03/10/2022
TO Honorable Mayor and City Council Members
FROM David Benoun, City Manager
SUBJECT Work Session for 2022-2024 Biennial Budget
The City is currently in the process of developing the 2022-2024 Biennial Budget and Capital Improvement Plan, which will include hosting multiple work sessions to discuss the budgetary needs of the City.
During this first session, staff will present to the Council an overview of the City's budget process, summarize issues that affect the City's budget, provide a review of various revenue trends and projections, present draft policy objectives and goals, and discuss recommended prioritization of various specific projects. A PowerPoint containing the most up-to-date financial information will be uploaded to the City's website as we get closer to the work session.
The work session will focus on the operating budget. The related Capital Improvement Plan will be discussed at a future Newark City Council meeting, tentatively scheduled for Thursday, March 24.
Attachments
Presentation
2022-2024 Biennial
Budget Work Session
March 10, 2022
2134 Economic Trends & Inflation 5 Financial Updates & Five-Year Forecast 678 CalPERS
Department Priorities for 2022-2024
Next Steps
Agenda
1 COVID-19
Pandemic’s Impact on
Budget
1 ARPA
Recovery Plan
ADDITIONAL ISSUES
Impacting the City’s Budget
Additional Issues
Impacting the City’s Budget
2 Utility Users Tax
Labor
Agreements Measure GG
Expansion of
residential
construction
BUDGET PROCESS
JAN - FEB
OCTOBER
NOVEMBER
DECEMBER
MARCH
APRIL
MAY -
JUNE
JUNE
JULY 1
JUNE
(Year 1)
JULY 1
(Year 2)
Internal
Review
Revenue &
Expenditure Estimates
Five-Year Financial
Forecast
Baseline Budgets to
Finance
Capital Improvement
Plan
Proposed Biennial
Budget
New Fiscal Year
Year 2 Review & MidYear Adjustments
New Fiscal Year
Budget Adoption
Biennial Budget Review
& Work Session
Biennial Budget Cycle
JANUARY -
FEBRUARY
ECONOMIC TRENDS
And INFLATION
4.0 3.5
3.0 2.5
2.0 1.5
Economic Trends
Housing Inventory Shortage
Economic Trends
15 10
5 0
Unemployment
Economic Trends
Inflation
Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec Jan
10%
8%
6%
4%
2%
0%
1.4%
2.6%
5%
4.2%
1.7%
5.4% 5.4% 5.3% 5.4%
6.2%
6.8% 7%
7.5%
Monthly 12-month Inflation Rate in the United States
January 2021 to January 2022
FINANCIAL UPDATES
And FIVE-YEAR FORECAST
Overview of Revenue & Expenditures
$68.8 M
Projected Year-End
General Fund
Revenues
Projected
Expenditures
$65.2 M
Estimated Surplus $1.9 M
Projected FY 2022
Sales Tax 22%
Licenses, Permits, and
Fees 13%
Other Taxes 3%
Utility Users Tax
5%
Transient
Occupancy Tax 6%
Measure GG 8%
General Fund Revenues by Category
Property Tax 38%
Charges for
Services 2%
Miscellaneous
3%
Property Tax
Sales Tax
Measure GG
Transient
Occupancy Tax
Utility Users Tax
Other Taxes
Licenses, Permits,
and Fees
Charges for Services
Miscellaneous
General Fund – Revenues
Projection
General Fund
Revenues
$68.8M
Excludes
Transfer to fund
ADP to CalPERS
Increase
21% from
Adopted Budget
Increase
7% compared to
last Fiscal Year
Projected FY 2022
Pension 15%
Non-Personnel
11%
ACFD Fire Contract
17%
ADP 8%
General Fund Expenditures by Category
Benefits 5%
Debt Service
4%
ISF Allocations
10%
Salaries
Benefits
Pension
ADP
ACFD Fire Contract
Non-Personnel
Debt Service
ISF Allocations
Salaries 30%
General Fund - Expenditures
Projected
$65.15M
End of FY
Includes
$5.57
million
ADP to
CalPERS
Projected
$65.15M
expenditures
for FY 2022 is
$5.3 million
higher
9% above
Adopted
Budget –
result of
ADP
Includes
$1.5M
increase for
non-
personnel
expenditures
Five Year Forecast
Property &
Sales Tax
Show growth
Revenues
Conservatively
forecasted
with increases
Expenditures
Forecasted
with average
increases
Fiscal Year Fiscal Year Projected Fiscal Year
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 Property Tax
Property Tax – VLF
Total Property Tax
Financial Update
Millions
$26.3M Estimated
$4M (14%) higher than adopted budget
$1.8M (7%) higher than last fiscal year
Property Tax
Assessed Value – FY 2022 tax roll
Increased a net 5.5%
Financial Update
Sales Tax & Measure GG
Projected Fiscal Year
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 Millions
Fiscal Year
Sales Tax
Measure GG
Total Sales Tax
34% higher than the Adopted
Budget but 1% over the FY
$5.7M Measure GG revenues earmarked for debt service
payments and residual Civic Center Project expenditures. $20.7M
Financial Update
Fiscal Year
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 Fiscal Year
Transient Occupancy Tax
Projected Fiscal Year
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 Fiscal Year
Millions $3.9M $1.4M (56%) higher than the Adopted Budget Almost $1M (33%) higher
compared to last fiscal year
Utility Users Tax
Financial Update
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2014 2025 2026 2027
3.5 3.0
2.5 2.0
1.5 1.0
0.5 0.0
Change bar color
Millions
Fiscal Year Projected Fiscal Year
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 Generates about 5% of the General Fund revenues
$3.4M
TAX RATE
3.25%
$3.3M
FY 2021 FY 2022
Other Taxes
Financial Update Category includes:
Business License Tax Property Transfer Tax
Business License Tax = $1.6M
46% above Adopted Budget
7% above FY 2021
Property Transfer Tax = $732K
70% above Adopted Budget
15% above FY 2021
Fines and Forfeitures
Financial Update
Category includes:
Municipal Code Violations Parking Citations Vehicle Code Fines Revenue
Somewhat unpredictable
Current year-end projection = $537K
39% below Adopted Budget
42% above FY 2021
Financial Update
Fiscal Year Fiscal Year
License, Permits, and Fees
Projected Fiscal Year
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 Fiscal Year
Millions
License, Permits, & Fees Recreation Program Fees Total
Financial Update
RESERVE FUND
Emergency
Fiscal Uncertainty
Pension and OPEB
Equipment Replacement
Balance as of June 30,
2021 (millions)
$16.8 - $10.0 = $6.8M
$6.0
ADP Transfer
General Fund
Reserves and Unallocated Fund Balance
$10.7M
$11.4M
17.4%
FY 2021 Operating
Expenditures
16.3%
FY 2021 Operating
Expenditures
CalPERS
CalPERS Updates
CalPERS
Year Action Affect on Calculation
FY 2021 Investment Gain
Impact to UAL
2021 $10 million ADP to fund
Unfunded Accrued Liability
Decreased the UAL
by $10 million
Projected to decrease
UAL by $44 million
2022 Discount Rate Reduction to
6.8% (Rate Year 2024)
Projected to increase
UAL by $12.8 million
Year Action Affect on Calculation
CalPERS Updates
CalPERS
Leading Up to the Discount Rate Decision
2021
Began the
ALM review
Conducted
every 4 years
21.3%
Return for
fiscal year
2020 - 2021
Funding Risk
Mitigation
Policy
triggered
Discount Rate
Automatically
lowered to
6.8% on
July 1, 2021
New Capital
Market
Assumptions
adopted
6.5%, 6.8%, & 7.0%
discount rates with
varying degrees of
leverage.
Board
considered
portfolios
Current portfolio
has projected
returns of 6.2%
over next 20 years.
Year-End Summary
FY 2022 PROJECTED YEAR-END
$68.8 M
Projected
Expenditures $65.2 M
General Fund
Projected Revenues
Budget
Work
Session
Net Operating Results Before Transfers
$1.9 after transfers $ 3.6 M
DEPARTMENT PRIORITIES
2022 - 2024
Police Department
Department Priorities
Operations
Train
using less
lethal devices
and
technologies
to facilitate
de-escalation
strategies
Address
complaints
Unregistered
and
non-operating
vehicles on
public/private
property
Recruit and
train
New Crime
Analyst
Assigns
officers to
areas of
increased
crime
Based on
Crime Analyst
recommendations
Police Department
Department Priorities
Support Services
Ensure current
practices are
consistent with
department
policy through a
policy
compliance
audit
Explore new
ways to
Increase # of
candidates for
entry
level/lateral
police officers
Expand # of
residents &
businesses
currently
opted-in to
AC ALERT
mass notification
& evacuation
platform
Prioritize
professional
development &
succession
planning
Include adoption
Acting Sergeant
in Training
Program
Alameda County
Department Priorities
Fire Services
Review and
support
City’s
CEMP
and
LHMP
Collaborate
with the City’s
Emergency
Preparedness
Coordinator
Provide
Emergency
Preparedness
Training
programs
Continue to
meet
obligations in
delivery of
emergency
response
services
Including
Listos
PEP
CERT
Newark
residents
Public Works
Department Priorities
Engineering
Complete
Citywide
Facilities Master
Plan
(Determine
buildings’ future
needs/evaluate
existing
buildings)
Railroad Quiet
Zones Study
Complete
Lakeshore
Park
Landscape
Restoration
project in
2022
Support
Residential
and
commercial
construction
Oversee
construction
of
Central
Avenue
Railroad
Overpass
Start Summer
2023 - 2025
Public Works
Department Priorities
Building Inspections
Evaluate
Permit
tracking
software and
internal
processes for
permit review
streaming
Support
Residential
and
commercial
construction
Develop
options
Electronic or
“paperless”
Public Works
Department Priorities
Maintenance
Maintain and
Improve
City’s urban
forest
Emphasizing
street tree
and park
safety for the
community
Maintain
City
landscaping
Parks-Streets
Streets
Public
buildings
Equipment
assets
Explore
Opportunities
To improve
service levels
Invest in more
efficient
equipment
and advanced
technology
Identify
opportunities
for
Improving safety
conditions in all
Streets
Parks
Buildings
Public Works
Department Priorities
Environmental Services
Research
opportunities
for collaborative
efforts to
address climate
protection
measures
Implement
water
conservation
efforts in
partnership
with Alameda
County Water
District
Address
drought
Implement
City’s
Stormwater
Program in
coordination
with regional
partners
Work with
franchise
hauler on
garbage
related issues
Promote
diversion of
solid waste
from landfills
Community Development
Department Priorities
Planning
Update
Housing
Element and
Environmental
Hazards
Element of
the General
Plan
Implement
Specific
Plans for
Areas 3 & 4
Old Town
Bayside
Newark
NewPark
Mall
Implement
Affordable
Housing Work
Plan
Community Development
Department Priorities
Economic Development
Market
Newark to
Businesses
and
Real Estate
Brokers
Attract
New
Businesses
Retail
Hotel
High
Technology
Businesses
Employment
Use ARPA
funds to
Support the
Chamber of
Commerce
and small
businesses
ENF
Community Development
Department Priorities
Community Preservation
Analyze and
implement
New
strategies and
procedures
and revisit
City’s
ordinances
Hiring of a
new
Community
Preservation
Division
Manager
Expand and
revitalize the
City’s
Community
Preservation
Program
Utilize
receiverships
and other
aggressive
enforcement
methods
When necessary
and appropriate
Recreation & Community
Department Priorities
Services
Provide
community
special events
and recreation
opportunities
Offer
Scholarships
recreational
and fitness
opportunities
Develop
Programming
at Newark
Family
Resource
Center
Establish
partnerships
Offer human
services
Promote
Human
Services
available at
Fremont
Family
Resource
Center
211 Alameda
County
Offer
empowering
leadership and
educational
programs
Financial
Department Priorities
Services
Provide
Leadership in
Development
Implementation
Update financial
policies
Complete
replacement of
Financial mgmt.
H.R. & Asset
Mgmt. modules
ERP system
Monitor/
Evaluate
City Revenues
National &
State
Economies
Fiscal policies
Other
economic
trends
Develop
Biennial
Budget & 5-
Year Forecast
Monitor
Spending
Advise
Council with
budget
amendments
Maintain
ERP system for
systematic
updates and
enhancements
Continue to
Evaluate
additional
modules
Human Resources
Department Priorities
Department
Support
employee
wellness &
Safety
Protect
Resources
Limiting liability
& property
claims
Ensure
departments
have tools
and resources
to provide
timely,
accurate,
relevant
performance
evaluations
Implement
professional
development
opportunities
to enhance
employees’
success
Develop
innovative
Measures
Attract and
retain a
talented
workforce
Information Systems
Department Priorities
Department
Implement
Information
Systems
Division
Strategic
Framework
Support
Department
Initiatives
Enhance
customer
experience
Develop
Information
Technology
Business
Continuity and
Disaster
Recovery Plan
Recovers
Technology
services from
major disaster
Customer
Focused
Technology
Solutions
Anticipate
City’s
current/future
needs
City Manager’s Office
Department Priorities
City Manager, City Clerk, City Attorney
Implement
City of
Newark ARPA
Recovery
Plan
Facilitate
Selection of
ARPA-funded
community
engagement
and outreach
platform
Administer
Municipal
Election
11/8/2022
Coordinate w/
Alameda County
Registrar of
Voters
Implement
City
Council
Priorities
and
Projects
ARPA
Next Steps
Next Steps
Department Priorities
Budget Work
Session
May
Draft Biennial
Budget
Document
Presentation
May
Capital
Improvement
Plan Discussion
March 24th
Capital
Improvement
Plan Draft
Presentation
May
Adoption of
Biennial Budget
& Capital
Improvement
Plan
May - June