Memorandum
Office of the City Manager
TO: City Council
FROM: Kevin S. Woodhouse, City Manager
DATE: March 21, 2022
SUBJECT: FY2022-23 Environmental Scan and Staff-Identified Priorities in Response to Scan Results
This Environmental Scan provides information about external and internal conditions, data, and factors that are being experienced by the City, or anticipated to be experienced. While not an exhaustive list, these factors are intended to provide context and background information for the City Council’s discussion of goals and priorities for the goal-setting workshop for Fiscal Year 2022-23 on March 25-26, 2022. In addition, numerous staff-identified priorities are highlighted that are currently underway or are staff recommended priorities in response to high-priority environmental scan results. Most of these staff-identified priorities will need to be pursued (unless otherwise directed by the Council) in the normal course of improving organizational management practices, fiscal sustainability, or day-to-day functions, in addition to the Council’s priorities for FY2022-23.
Economic/Financial Factors:
● Economic impacts from COVID-19 are still being experienced and will need to be monitored, although recovery has begun.
● Construction costs rose by 6% in 2021 and are expected to grow another 4% to 7% in 2022. Although building contractors have remained busy with residential construction work through the pandemic, supply chain delays and high construction cost affect project execution and delivery and are expected to increase bidding prices received on City projects. In addition, Public Works infrastructure projects will receive higher bid prices due to increasing oil prices. These higher costs will increase costs of asphalt, construction equipment fuel, and travel to and from job sites. ● CalPERS pension system and Other Post-Employment Benefits (OPEB) financial obligations continue to be a major stressor on the City’s budget. ● California’s minimum wage increased to $15/hour in January of 2022. There is a proposed initiative that would raise the minimum wage to $18 by 2025. The City’s part- Environmental Scan, FY2022-23 2
time salary schedule will continue to be updated for those positions impacted by any future minimum wage increase. Potential increases to federal minimum wage may be on the horizon, which may continue to increase state minimum wage. ● For Vehicle License Fee In-lieu funding from the state, there is an anticipated significant shortfall for FY2020-21 (currently estimated at $1.2 million), and likely in FY2021-22 as well. The County and all cities in San Mateo County are advocating a fix to this shortfall that would have the State more promptly backfill the shortfall. However, the State may try to tap into Returned (Excess) ERAF funding to address the VLF In-lieu shortfall, a concept the County and cities are vigorously opposing. This topic is a major financial concern to Pacifica.
● County Measure W and Measure A funds for streets projects are projected to increase by 10% for FY22-23.
● As infrastructure (e.g., roads, facilities, playgrounds) conditions continue to decline in quality due to lack of funding, reconstruction and ongoing maintenance becomes more and more expensive.
● The City has experienced a number of extraordinary and unexpected demands for legal services that have caused overages in the legal services budget. The City Attorney budget was increased in a mid-year budget adjustment for FY2021-22. ● The volume and complexity of Public Records Requests continues to increase:
2020: 169 requests
2019: 143
2018: 89
2017: 78
2016: 59
The City’s electronic portal, Next Request, is helping with efficiencies in responding, but this trend (which other cities are experiencing too) is a difficult workload to manage, and the complexity of some requests have resulted in increased City Attorney costs. ● The amount of revenue from the Cannabis Business Program has not normalized yet and continues to be closely tracked as more shops open. The 2021-22 Adopted Budget estimated revenues of $910,295 including license fees and local operations tax; however midyear-projected revenues for the full year are projected at slightly under $800,000.
Pacifica’s potential cannabis program revenue may decrease as more cities are begin allowing retail cannabis businesses.
● Senior Services was named as a beneficiary in a will in 2019 and has now received over $2.1 million. This money is for the sole purpose of supporting Senior Services and may not be used for existing wages or salaries, except in the case where expanded services are provided. Council approved this funding to be used for the Senior Transportation Connect a Ride (CaR) program and 1/4 of a full-time Transportation Specialist (on hold for two years due to COVID, but is anticipated to be filled in the third quarter of FY 21- 22). This trust was also used to offer the Sirkka Niukkanen Swim Program which helps offset the cost of swimming for seniors in Pacifica, many of whom are on fixed incomes.
During COVID, the program helped offset the cost of swimming for 173 seniors for a total of 5,454 swims.
● The City is facing a significant structural deficit forecast in coming years. In the shortterm, American Rescue Plan Act funds are helping to maintain funding of essential City services. However, these federal assistance funds are limited-term funding band-aids to help economic recovery and delivery of essential services, and do not address future ongoing financial sustainability challenges.
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Staff-Identified Priorities related to Economic/Financial Factors:
The Vision 2025 & Beyond Financial Sustainability Study launched this winter and will continue into FY2022-23 with a focus on long-term financial sustainability for the City.
Continue to plan for ARPA funding priorities and track and report expenditures as required for compliance.
Conduct a comprehensive review of the City’s unfunded pension and OPEB liability and create a financial model to test and identify the most reasonable solution and develop a funding policy to manage these obligations. Continue to ensure internal control through financial accountability, compliance with new GASB requirements, timely financial reporting (including additional mandated reporting related to ARPA and CARES Act), audits, and improvements to internal processes and procedures.
Conduct a Cost Allocation Plan and User Fee Study to identify adequate costs, fees, overhead and adequate cost-recovery of the City’s General Fund. Complete a series of Development and Construction Impact Fee studies and implement fees to address impacts to City infrastructure. Property negotiations and development of the Crespi property adjacent to the Community Center is continuing and presents a one-time land sale and public improvements/community benefits opportunity.
On-going operational impacts from COVID-19, such as extra regular cleaning of facilities and playground equipment, has become standard over the last two years, such as increased janitorial service at Child Care sites and the pool, and extra cleaning in facilities/offices following positive COVID cases. Frequency of extra cleanings has been able to decrease recently post-Omicron variant.
Local, State or Federal Political and Legislative Factors:
● Numerous complex City studies and issues – e.g., General Plan , Sharp Park Specific Plan, Housing Element Update, wireless ordinance update, Quarry Specific Plan, and processing the Local Coastal Plan update through the Coastal Commission – will continue to require significant staff resources during the implementation phases of these studies/issues. For example, beginning the comprehensive zoning ordinance update to implement the General Plan/LCP/Specific Plan, and continued work with the Coastal Commission regarding the LCP certification.
● In addition to complex City initiated studies, non-discretionary processing of land use applications is anticipated to continue to need a significant amount of staff and City Attorney resources, especially with the trend of project appeals. ● Complex Code Enforcement issues are expected and will continue to require a large amount of staff and City Attorney resources.
● The legislative landscape regarding housing continues to be fluid, with each session seeing many bills related to how cities review proposed development. More recently bills have also impacted local control regarding housing (such as SB 9). ● The Regional Housing Needs Assessment (RHNA) for the 6th Housing Element Cycle has assigned Pacifica 1,892 units. Work on identifying suitable sites to meet the City’s RHNA goals will begin in Spring 2022. LEAP and ABAG administered REAP grant funding will assist with the cost of these efforts.
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● Older American Act (OAA) funding for the City’s Congregate Lunch program has shifted during COVID-19. OAA funding for Meals on Wheels has continued during the pandemic. Meal production has increased. In-person dining has restarted, with a setback during the holidays due to the Omicron variant. Grab and Go (drive thru) continues. ● Under the local emergency order related to COVID, the City has been able to accommodate outdoor activities for impacted business. Staff anticipates that outdoor activities may continue to be in high demand after the emergency order is lifted. The Council has provided direction regarding establishing an on-going post-COVID-19 outdoor activity (parklet) program. Staff is preparing an ordinance for consideration. ● The Police Department has prepared policy and procedures to comply with AB953, the Racial Identity and Profiling Act (RIPA), which requires officers to collect specific information on all stops and self-initiated contacts with community members. RIPA has significantly changed the way staff documents and reports its contacts with the public, impacting staff resources.
● The Police Department has migrated from mandated data reporting from the Uniform Crime Reporting System (UCR) to the California Incident Based Reporting System (CIBRS) and National Incident Based Reporting System (NIBRS). This mandated change has impacted staff resources to implement and normalize. ● The tri-annual building code update is due by the end of 2022. City Council usually adopts the codes and local amendments in November. If the City Council is going to consider additional Reach Codes, staff will need to plan and prepare for much earlier in FY2022-23 for this analysis.
Staff-Identified Priorities related to Local, State or Federal Political and Legislative Factors:
The City’s Housing Element is required to be updated by January 31, 2023. Staff is working closely with consultants to evaluate the City’s existing Housing Element and update needs, develop a work plan, facilitate HCD conversations, engage the community, conduct outreach efforts and community workshops, and develop the Draft Housing Element.
Continue efforts on adoption of an Affordable Housing Impact Fee. This effort has been delayed due to other Planning Department priorities and various ordinance amendments.
Adopt a Park In-lieu Fee to ensure that developers are paying an appropriate impact fee for local parks. Adoption of a fee will also provide some surety to developers related to cost as the municipal code requires payment of the park inlieu fee, but the amount has not been set by resolution. For Senior Services, meal production has increased due to need during COVID.
The City has applied for and received emergency funding from the federal government to meet the costs related to this need, and have continued to be able to offer all forms of meal programs: Congregate (in person dining), Grab and Go (take out), and Meals on Wheels (home delivered).
Prepare for tri-annual building code update, including a Council study session to determine City Council interest in additional Reach Codes.
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Before January 1, 2023, sections of the Pacifica Municipal Code will need to be amended to comply with permit streamlining requirements for electric vehicle charging stations pursuant to SB 970.
Develop solutions, for City Council consideration during FY2022-23 budget development, for Police Department Records Division staffing impacts due to the increased state and federal reporting requirements.
Technology Factors:
● Due to perennial funding and staffing limitations, the City lags in a variety of Information Services and Technology tools that could improve organizational efficiency and delivery of services. However, in recent years, the organization has undertaken numerous technology improvements, and is either in the process of implementing new ones, preparing for implementation, or managing through the learning curve of new systems.
These include:
- Q-Alert Citizen Request Management System
- Next Request Online Public Records Request Portal
- Lucity Asset Management System for Public Works
- ESRI Geographic Information System
- Document Management and Digitization Systems
- Microsoft Office 365 Roll-out
- FlashVote Community Survey System
- ProcureNow Electronic Bidding and Public Procurement System - Enterprise Resource Planning System
● Çybersecurity is becoming an increasingly critical concern, with new threats being discovered every day, in addition to more and more local government agencies becoming targeted and hit with ransomware attacks. Additional efforts for staff training and resources to combat this will be in the forefront of the IT division’s focus. ● COVID-19 has changed how City staff interacts with each other and the public. The City needs to continue researching, testing, and implementing new tools and software to improve efficiencies and reduce redundancies as much as possible. A periodic review of existing tools must be done to ensure things are still working at an optimal level, or if opportunities for improvement exists.
● With the new Civic Center project, the IT division will need to continue to work with the Public Works department and the City’s architect to recommend and refine cost-effective technology solutions including but not limited to the new server room, security cameras, access control systems, and other related technologies. ● Critical systems to track compliance with Pacifica Municipal Code requirements for Short-term Rentals, Business Licenses, and Transient Occupancy Tax are insufficient and need to be modernized.
● The PB&R Department implemented new online registration and payment options during COVID. Child Care on-line payments became accessible on the City web site during the pandemic and are continuing. Due to State COVID-19 health restrictions, the aquatics programs have had to implement an online reservation system for pool use (limited number of people allowed in each lane/facility). With loosening restrictions, this system Environmental Scan, FY2022-23 6
is no longer needed for lap swimming; however, it is being used for water polo participant registration.
● Internet/Wi-Fi limitations at Brink Pool have limited the point-of-sale system (POS). The Community Center, as well as some of the Child Care centers have experienced internet deficiencies. The jet packs/hot spots that IT has now installed at all of the Child Care sites has improved internet/WiFi service. The Information Technology Division continues to assess internet speeds and seek solutions so staff are able to do transactions in a more timely and efficient manner.
● Evolving digital communications options and social media platforms present enhanced opportunities for public engagement strategies, but require new and on-going training of employees to effectively utilize these opportunities.
● The City needs to continue working on its IST strategic plan and finalize it during the coming year, to lay out the long-term advances, systems, and opportunities the City needs to stay technologically current and sustainable.
Staff-Identified Priorities related to Technology Factors:
The City is currently in the process of implementing numerous significant Citywide IST projects. As new IST systems come on-line, staff resources will be impacted for start-up and training.
A major IST improvement underway is the Enterprise Resource Planning (ERP) system, which will include implementation of a new Human Resources Management System (HRMS) and will replace the antiquated Financial Management system.
New on-line systems for management of Business Licenses, Short-term Rentals and Transient Occupancy Tax registration, collection, and compliance are being implemented and staff is working through the start-up curve. Continued investment in remote work tools and services will be critical for staff efficiency and general safety, including increased online and digital service options for staff and the public.
The City is planning to roll out multi-factor authentication security as part of best practices to help prevent and mitigate cyber-attacks, threats, and incidents of account compromise. This involves staff receiving a code via text or email before they can log into secure City resources. This is an additional factor besides the standard username and password and is currently already in use in many other industries, such as banking, finance, and many other online services. Staff will continue to pursue improved communications strategies and social media usage to enhance the City’s public engagement strategies. Public Works implemented the Lucity System for infrastucture management and ProcureNow, an on-line bidding process, to address COVID-19 concerns during the bid opening process. Additionally, a new fuel management program will start to track City fuel usage.
The Police Department is working with the South San Francisco Police Department on a project to switch to an encrypted radio system per DOJ mandate.
Target completion date is December 2023. The project involves updating and/or replacing radio infrastructure.
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Environmental Factors
● Coastal bluff erosion and Beach Boulevard Seawall breaches due to storms, and exacerbated by sea level rise and climate change, continue to pose infrastructure and financial challenges to Pacifica. Planning for solutions takes multiple years due to political, legal, regulatory, and financial constraints. ● Plans and studies, such as the General Plan, Local Coastal Plan Update and the Climate Action Plan, are important to strategically plan for adaptation to environmental challenges.
● City funding for implementation of expensive coastal adaptation measures is limited, therefore staff will need to continue to actively pursue grants and other governmental funding sources. These grants can take years to materialize and are staff time intensive to manage.
● Testing for lead in water at all Child Care sites was scheduled to begin in January of 2020. The program will also be required to provide information upon enrollment regarding the risks of lead exposure. After being put on hold for a couple years, per State Licensing, water lead testing at Child Care sites must be completed by January 1, 2023. ● The City prepared a Green Infrastructure Plan, addressing the installation and construction of green infrastructure from private and City projects. The Green Infrastructure Plan demonstrates how projects will gradually shift from traditional “gray” storm drain infrastructure—which channels runoff directly into receiving waters without treatment—to a more resilient and sustainable storm drain system comprised of “green” infrastructure, which captures, stores and treats stormwater using specially designed landscape systems.
● The Linda Mar sewer pump station upgrade project is currently in process and will improve environmental health in Pacifica by providing more reliable operation and therefore minimizing sanitary sewer overflow risks during large storms. ● The Calera Creek Water Recycling Plant will begin design for the Ultraviolet Disinfection System, Headworks Improvements and SCADA system to improve Plant operations and maintain continuity of sewer service.
● Continuing code violations at various private sites continue to require attention of codeenforcement and the City Attorney’s Office. ● The Water Infrastructure Finance and Innovation Act (WIFIA) may be a source of low interest funding for upcoming Wastewater infrastructure projects. ● The City must implement the requirements of SB 1383 (Lara, Chapter 395, Statutes of 2016) which requires jurisdictions to reduce emissions of short-lived climate pollutants (SLCP).
Staff-Identified Priorities related to Environmental Factors:
Efforts to identify funding sources for sea level rise adaptation strategies will continue.
Code Enforcement program efforts will continue to enforce code violations. Staff efforts, in cooperation with the Coastal Conservancy, San Mateo County, and Caltrans, to study a connection of the Coastal Trail through Pedro Point Headlands is continuing.
Staff will be pursuing funding for electric vehicle charging stations throughout the City and will research EV Fast Charge programs. The City is pursuing grant Environmental Scan, FY2022-23 8
applications with the CALeVIP program for City Hall, Rockaway Beach parking lot on Dondee Way, the EQ Basin/Community Center parking lot, the Civic Center Campus, and wastewater treatment plant locations. Staff is currently in the initial development stage of an Industrial Pre-Treatment program for Pacifica to address breweries and a growing number of new businesses and the influx of more Fat, Oil, and Grease (F.O.G.) in the City’s sewer collection system.
For SB 1383 implementation, the City is partnering with the County of San Mateo on an edible food recovery program that recovers edible food from the waste stream and is managed by the County. The City and Recology of the Coast will conduct outreach and education and the City is discussing outreach related to compost with the County. The City recently applied for a grant to provide funding to address a portion of the renewable purchasing targets required by the bill and will continue to work with both the County and CalRecycle on meeting these targets.
Continue to refine the annual process for maintenance review of the City’s aging coastal infrastructure prior to the onset of storm season. Implementation of a compostables collection program at the Community Center, beginning with the kitchen and dining areas, will begin spring of 2022, to reduce the impact to landfills and the environment.
Organization Factors
● Proactive succession planning efforts and building HR recruitment efficiency to address current vacancies and prepare for numerous anticipated retirements is critical to the City’s delivery of services. Currently, approximately 20% of the workforce is eligible for retirement. Human Resource efforts must focus on upgrading the applicant tracking system, updating classifications, modernizing facilities and technology to enhance employee capacity and experience, and enhance employee wellness efforts. In addition, staff training and development should remain a priority through offering workshops, educational sessions, trainings and conference opportunities to staff as much as time and budget will allow.
● The PB&R Department has had as many as five full time vacancies over the last 6 months. An emphasis on organizational structure, recruitment, retention and succession planning will continue to be a major priority.
● The Planning Department has seen an increase in larger development project applications. Typically, residential entitlement projects have been fairly small (single family homes, occasional small multi-unit developments). Recently, the department has several larger projects (70-125 units) which take considerably more staff time. Even when project applications are incomplete, they can garner a significant amount of community interest.
● As programs reopen post-COVID, the PB&R Department anticipates challenges in recruiting new and/or hiring back former part-time employees. PB&R is experiencing increased challenges in recruiting part-time employees – many are accepting other jobs, there are often not enough applicants, and retention has also been a challenge. This has been particularly difficult in the Child Care division. Aquatics and Recreation Divisions Environmental Scan, FY2022-23 9
are currently in the process of hiring more part-time staff as COVID mandates and restrictions loosen.
● The current MOUs with labor groups expire June 30, 2023. A new round of labor negotiations will begin towards the end of 2022 and continue into the first half of 2023. ● The high cost of living, including housing costs, continue to generally affect public sector employment recruitment and retention efforts where salaries are typically lower than the private sector. Additionally, the current high price of gas is factoring into current or prospective staff decisions to stay or take a new position with the City, as many staff cannot afford to live locally, and therefore commute from other locations in the Bay Area.
● Post-COVID remote work policies need to be assessed and implemented. ● The City’s decaying facilities continue to pose challenges for public accessibility, employee effectiveness, and employee morale. Dry rot, inadequate heating, rodents, broken hardware, air quality concerns and energy inefficiency are unsustainable conditions to effectively serving the public safely.
● COVID-19 created a surge in the number of clients serviced with Meals On Wheels.
During COVID, PB&R was able to increase routes and obtain additional volunteer drivers, as many of the people working from home could take an hour off to deliver meals. With the change back to more normal daily life schedules of volunteers, PB&R is seeing a decline in volunteers, but not in the number of clients served. ● The Child Care program experienced an unprecedented demand for services in FY 2019- 20, as most sites reached capacity, leading to waiting lists for service and resulting in an even greater need for more staff at the centers. As we have returned to pre-pandemic ratios, the need for services is returning. The Pacifica School District enrollment lottery has been completed and has increased the number of waiting list applications on file.
Child Care will enroll more children but will need to hire additional part-time staff. ● Departmental assessments to identify potential organizational changes to improve services, staff effectiveness and enhance succession planning are continuing. In recent years, assessments were completed in PB&R, Public Works, and the Building Division.
An assessment of the Motor Pool Division is underway and is currently reviewing utilization of City vehicles to determine staff vehicle needs. ● Staff support to Council Advisory Commissions and Committees can be time-intensive, especially if the Commission/Committee workplan is not clearly defined and in alignment with and supporting City Council prioritized projects/initiatives. Staff is working to create alignment as much as possible and ensure the Council is informed of Commission/Committee work.
Staff-Identified Priorities related to Organizational Factors:
Continue identifying and funding professional development opportunities for staff to enhance service delivery and improve succession planning successes. The Civic Center Campus Facilities Project is slated for construction in Spring 2022 with a completion of June 2023. The renovated Civic Center facilities will provide employees with updated and improved areas to properly service the community.
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Continue to expand Council review and approval of Commission/Committee workplans, helping alignment with Council prioritized projects/initiatives, leverage project/program implementation energy and action that Commission/Committee volunteers bring to the table, and improve staff’s effectiveness in supporting Commissions/Committees.
As a result of the pandemic, the City has prepared, and will need to maintain, a COVID Prevention Plan.
Evaluate and implement post-COVID-19 remote work policies. Human Resources has been moving forward with the implementation of the document retention policy with the assistance of RCS, Inc., and have completed the secure digitization of all active employee records and files. HR is currently working on the digitization of all other records and files.
Social, Safety, and Health Factors
• Pacifica, as well as region- and state-wide, continues to be challenged by increasing numbers of unhoused population.
• Massive fire disasters in other parts of the state, and general concerns about climate change, have heightened public attention on and importance of Disaster Preparedness efforts at the local level.
• In addition to the Organization impact factors as described in the previous section, the City’s decaying facilities also present potential health and safety concerns and need to be addressed.
• In addition to the Coronavirus (COVID-19) impacts to economic and organization factors, this pandemic is first and foremost a threat to the health of the community and employees.
• Due to COVID-19 most of the programs run by the PB&R department were either canceled or had to be scaled back dramatically to align with State and County guidelines.
As these guidelines have changed and progressed, the department has responded appropriately.
• The COVID-related indoor activity restrictions resulted in new interest and appreciation for Pacifica open spaces that is anticipated to continue past the end of the pandemic. This brings both economic development opportunity to the City, as well as concern from neighborhoods near popular open space attractions regarding issues related to parking impacts, litter, noise, sanitation, and pedestrian safety.
Staff-Identified Priorities related to Social, Safety, & Health Factors:
The Pacifica Police Department and North County Fire Authority are continuing to work with allied agencies and the San Mateo County Department of Emergency Management in implementing Zonehaven, an online program that has been developed to electronically share evacuation information between jurisdictions and with community members. Both are participating in countywide disaster preparation exercises utilizing Zonehaven.
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North County Fire Authority is continuing grant applications for vegetation management programs, education about home hardening preparation and ReadySet-Go preparedness. As indicated under Organization priorities, the Civic Center remediation/restoration project is underway.
Staff will continue to work collaboratively with GGNRA to identify solutions for high visitation to Mori Point.
The PB&R Commission created the Pacifica Surf Camp/School Advisory Task Force that will make recommended changes to the current policy including the creation of a permanent Community Access Partner Permit (CAPP) program criteria and requirements – equitable access for underrepresented groups and integration with the current policy. Coastal Commission permitting, creating the RFP, reviewing and selecting of applicants and overall administration of the program will be added to PB&R’s administrative workload to begin this program in 2023.
The City of Pacifica was one of the first three cities in San Mateo County to be certified as an Age Friendly Community by the World Health Organization (WHO). The Age Friendly Coalition is continuing in its efforts to bring attention to issues that many seniors deal with. One major problem that is currently being assessed is the shortage of affordable senior housing The coalition also is working on fostering age friendly businesses in the community.