The breakdown for the current fiscal year 2023-24 and the upcoming fiscal year 2024-25 provides further insight into the distribution of these items, including those carried over into the next fiscal year or scheduled to begin during that period.
Pursue climate change adaptation and mitigation
# Level Indented Name Status Assigned To Start Date Due Date 4 Goal Pursue climate change adaptation and mitigation. On Track Kevin Woodhouse 07/01/2023 06/30/2030
4.1 Strategy Update the Climate Action and Adaptation Plan, including performance targets. On Track Christian Murdock 07/01/2023 06/30/2025
4.1.2 Task Community engagement On Track Elizabeth Brooks 10/01/2023 06/30/2025
4.1.2.3 Sub-Task Carry out planned community outreach activities On Track Elizabeth Brooks 01/01/2024 06/30/2025
4.1.5 Task Draft CAAP document Not Started Elizabeth Brooks 07/01/2024 03/31/2025
4.1.6 Task Adoption hearings Not Started Elizabeth Brooks 01/01/2025 03/31/2025
4.1.6.1 Sub-Task Draft CAAP Public Comment Period Not Started Elizabeth Brooks 01/01/2025 03/31/2025
4.1.6.2 Sub-Task Implement any revisions Not Started Elizabeth Brooks 01/01/2025 03/31/2025
4.1.6.3 Sub-Task Draft CAAP Adoption Not Started Elizabeth Brooks 01/01/2025 03/31/2025
4.2 Strategy Continue the urban forestry plan, tree canopy goals, inventory and projects. On Track Lisa Petersen 07/01/2023 06/30/2027
4.2.1 Task Work on process for streamlined implementation of the Tree Preservation Ordinance On Track Christian Murdock 07/01/2023 09/30/2024
4.2.2 Task Bring Tree Preservation Ordinance Back to the City Council for modifications as necessary Not Started Christian Murdock 10/01/2024 06/30/2025
4.2.2.1 Sub-Task Identify recommended revisions and present to City Council at study session. Not Started Brianne Harkousha
10/01/2024 12/31/2024
4.2.2.2 Sub-Task Stakeholder engagement. Not Started Brianne Harkousha
10/01/2024 12/31/2024
4.2.2.3 Sub-Task Draft revised ordinance. Not Started Brianne Harkousha
01/01/2025 06/30/2025
4.2.2.4 Sub-Task City Council public hearing for adoption. Not Started Brianne Harkousha
05/01/2024 06/30/2025
4.2.3 Task Complete survey of potential tree planting locations to inform future tree canopy goal discussion
Not Started Jon St. Onge 05/01/2024 06/01/2025
10.d
Packet Pg. 248 Attachment: Attachment D: Updated Staff Work Plan [Revision 1] (5648 : City Council Strategic Planning FY2024-2025 Workplan
4.3 Strategy Update Pacifica’s Local Coastal Plan and improve communications and collaboration with the California Coastal Commission.
On Track Christian Murdock 07/01/2023 12/31/2024
4.3.1 Task Continue coordination with Coastal Commission staff regarding their proposed modifications to Certification Draft LCLUP approved by City Council On Track Christian Murdock 01/01/2024 12/31/2024
4.3.2 Task City Council consideration of potential revisions to Certification Draft LCLUP based on CCC staff input
On Track Stefanie
Cervantes
07/01/2023 12/31/2024
4.3.3 Task Coastal Commission approval hearing Not Started Christian Murdock 10/01/2023 06/30/2025
4.4 Strategy Ongoing, non-discretionary or previously initiated projects and services On Track Christian Murdock 07/01/2023 06/30/2030
4.4.1 Task Complete EV Charging Station Strategy Planning document On Track Yulia Carter 07/01/2023 06/30/2025
4.4.1.2 Sub-Task Complete and Adopt the EV Strategic Plan and Develop the Implementation Action Plan for EV Charging
At Risk Yulia Carter 07/01/2023 06/30/2025
4.4.3 Task Day-to-day organizational management, services, reporting, public meeting coordination, and community engagement, responsiveness, and outreach
On Track Elizabeth Brooks 07/01/2023 06/30/2025
4.4.5 Task Solar APP, Implementation (SB 379) On Track Christian Murdock 07/01/2024 12/31/2025
4.4.5.2 Sub-Task City website modifications. On Track Christian Murdock 07/01/2024 12/31/2025
4.4.5.3 Sub-Task Public announcement of implementation. On Track Christian Murdock 07/01/2024 12/31/2025
4.4.6 Task Pursue ways to reduce use of plastics and paper On Track Maria Sarasua 07/01/2023 07/30/2030
10.d
Packet Pg. 249 Attachment: Attachment D: Updated Staff Work Plan [Revision 1] (5648 : City Council Strategic Planning FY2024-2025 Workplan
Goal Five - Broaden public communications and collaboration Goal Five - All Items
Not Started 8 (42%)
On Track 11 (58%)
Goal Five – Broaden Public Communication and Collaboration The City Council’s Goal Five – Broaden Public Communication and Collaboration focuses on leveraging community expertise and volunteers and increasing communication, education, and mental health resources. To achieve this goal, the Council has identified two key strategies, in addition to ongoing non-discretionary or previously initiated projects and services that contribute to this goal.
Across these strategies, tasks, and subtasks, staff has developed a comprehensive work plan encompassing a total of 32 items for the current and upcoming fiscal years. These items are categorized as follows: 3 accomplishments, indicating successful completion; 16 items on track, progressing as planned; and 5 items scheduled to commence within the current or next fiscal years, and 8 items marked off track primarily due to time/capacity or budget constraints.
The breakdown for the current fiscal year 2023-24 and the upcoming fiscal year 2024-25 provides further insight into the distribution of these items, including those carried over into the next fiscal year or scheduled to begin during that period.
Broaden public communications and collaboration
# Level Indented Name Status Assigned To Start Date Due Date 5 Goal Broaden public communications and collaboration. On Track Kevin Woodhouse 07/01/2023 06/30/2030
5.1 Strategy Creatively and appropriately leverage community expertise and volunteers to advance City priorities. On Track Christian Murdock 04/01/2023 06/30/2025
5.1.2 Task Support CAAP task force throughout CAAP update process On Track Elizabeth Brooks 10/01/2023 06/30/2025
5.2 Strategy Increase communications, education, and connections for community mental health resources. On Track Yulia Carter 07/01/2023 06/30/2030
5.2.1 Task Mindfulness and Wellness programs will focus specifically on improving community mental and physical well-being and health as recreational programs are added back to the Community Center (following staff relocation) Not Started Yulia Carter 04/01/2024 06/30/2025
5.3 Strategy Explore possible changes to Council term limits. Not Started Sarah Coffey 07/01/2024 09/30/2024
5.4 Strategy Ongoing, non-discretionary or previously initiated projects and services On Track Yulia Carter 07/01/2023 06/30/2030
5.4.2 Task Complete review and update to Council Advisory Committee/Commission charters On Track Sarah Coffey 03/01/2023 06/30/2025
5.4.2.4 Sub-Task Complete review (with Committee and Public Works staff recommendations) and Council adoption of Resolution to update the charter for Beautification Advisory Committee (BAC) Not Started Sarah Coffey 03/01/2023 12/31/2024
5.4.2.5 Sub-Task Complete review (with Committee and Police Dept staff recommendations) and Council adoption of Resolution to update the charter for Emergency Preparedness & Safety Commission (EPSC) Not Started Sarah Coffey 03/01/2023 03/31/2025
5.4.2.6 Sub-Task Complete review (with Committee and PB&R staff recommendations) and Council adoption of Resolution / Ordinance to update the charter for Parks, Beaches & Recreation Commission (PB&R Commission) Not Started Sarah Coffey 03/01/2023 03/31/2025
5.4.2.8 Sub-Task Following all Committee / Commission individual charter review completion, complete review & recommendations to Council on administrative aspects and documents for Committees & Commissions for the purpose of consistency with updates that were adopted, current procedures and policies and administrative efficiencies (Municipal Code review, Ordinances for code updates as needed, Committee & Commission Handbook update, Administrative Policies update)
Not Started Sarah Coffey 03/01/2023 06/30/2025
5.4.3 Task Continue hybrid Zoom/In-person/streamed meetings for City Council and Planning Commission On Track Sarah Coffey 07/01/2023 06/30/2025
5.4.5 Task Day-to-day organizational management, services, reporting, public meeting coordination, and community engagement, responsiveness, and outreach
On Track Sarah Coffey 07/01/2023 06/30/2025
5.4.6 Task Develop public engagement plans for major Capital Improvement Projects for Council review as requested On Track Roland Yip 07/01/2023 06/30/2030
10.d
Packet Pg. 250 Attachment: Attachment D: Updated Staff Work Plan [Revision 1] (5648 : City Council Strategic Planning FY2024-2025 Workplan
5.4.7 Task Enhance responsiveness to the community and improve service delivery through automation. Not Started Maria Sarasua 07/01/2024 12/31/2024
5.4.7.1 Sub-Task Implement Citizen Rims as a web-based crime-mapping tool to promote transparency and increase community engagement and outreach
On Track Maria Sarasua 01/01/2024 12/31/2024
5.4.7.2 Sub-Task Improve police department website to enhance responsiveness to the community and improve service delivery On Track Maria Sarasua 01/01/2024 12/31/2024
5.4.7.3 Sub-Task Create an electronic monthly newsletter with public safety information Not Started Maria Sarasua 07/01/2024 12/31/2024
10.d
Packet Pg. 251 Attachment: Attachment D: Updated Staff Work Plan [Revision 1] (5648 : City Council Strategic Planning
CITY OF PACIFICA
COUNCIL AGENDA SUMMARY REPORT
5/13/2024
1 SUBJECT:
Fiscal Year 2024-25 Base Budget, Long-Term Financial Outlook, and Introduction of the 2024- 29 Capital Improvement Plan
RECOMMENDED ACTION:
Accept the report and provide feedback and direction on the proposed Fiscal Year 2024-25 Base Budget, long-term financial outlook, and introduction of the FY 2024-29 Capital Improvement Plan.
STAFF CONTACT:
Yulia Carter, Assistant City Manager
[email protected]
650-738-7301
Kevin Woodhouse, City Manager
[email protected]
650-738-7409
BACKGROUND:
Each year, the City of Pacifica adopts an annual operating budget that reflects the planned activities for the next fiscal year based on the best information available at the time of adoption.
Then, at mid-year, staff revisits the projections and reports to the Council any changes needed to reflect new information and keep the City on track.
On April 8, 2024, staff presented the Narrative Budget report outlining the Budget planning process, methodology, timeline, and preliminary budget strategies.
As part of this year’s budget process, the City launched The Pacifica Discussion initiative to gather input from residents and the Pacifica community on specific City service needs and priorities. Over 700 responses were received, highlighting priorities such as maintaining storm drains, ensuring timely emergency response, repairing potholes, and improving street conditions, preserving beach cleanliness and coastal areas, and reducing the risk of flooding and mudslides.
Residents also emphasized the importance of preserving Pacifica's parks, beaches, coastline, trails, and recreation opportunities. Addressing road repair remains a top concern due to the city's backlog of repairs and poor road ratings, which pose safety risks and worsen traffic congestion. Safety improvements at school intersections and enhancing infrastructure such as sidewalks, bike lanes, crosswalks, and lighting were also highlighted, indicating the need for additional funding.
The ongoing discussion will continue to engage the community in shaping the city's long-term budget priorities and planning, as further described in the Capital Improvement Program section of this report.
DISCUSSION:
11 Packet Pg. 252
Pacifica City Council 2
May 13, 2024
This report presents the FY 2024-25 Base Budget reflecting the current level of services and operations and the Introduction of recommended non-discretionary FY 2024-25 Capital Improvement Plan projects included with the Base Budget.
Specific budget options and recommendations will be presented as part of the Recommended Budget at the next budget meeting on June 10th, preceding the final Budget adoption hearing on June 24th.
A summary of the FY 2024-25 budget schedule is presented below:
FY 2024-25 BASE BUDGET
The goal of a budget process is to develop the City's Budget by completing a full analysis of the City's revenue and service level expenditures to identify necessary service increase and/or reduction options, which, when combined, will maintain a balanced and sustainable budget.
Staff formulated various revenue and expenditure assumptions to construct the base budget for FY 2024-25. These assumptions were based on known projections and economic conditions and reflected the budget adjustments made by the Council during the mid-year budget review.
The resulting structural surplus or deficit at the base budget level is critical. It informs discussions about departmental or other program funding beyond the baseline to accomplish identified priorities for the upcoming year.
1. FY 2024-25 GENERAL FUND BASE BUDGET
The General Fund is the City's primary operating fund and is used to account for most day-today activities. It receives unrestricted revenues, and the City's general administrative services, public safety, and community development-related activities such as planning, building, and engineering are budgeted in the General Fund. Revenue sources include but are not limited to property tax, sales tax, transient occupancy tax (TOT), business license tax, and current fees for services. The FY 2024-25 General Fund Base Revenue budget is developed based on the current economic conditions and current projections of the City’s revenue base.
The City's FY 2024-25 General Fund Base Expenditure budget reflects the current level of services and operations. The base budget is not an exact duplication of the prior year's adopted Budget because of actions that the Council may have taken that modified the Budget over the course of the year and, most notably, because of the FY 2024-25 budget assumptions used to 11 Packet Pg. 253
Pacifica City Council 3
May 13, 2024
develop the base budget further described below.
This report presents the FY 2024-25 General Fund Base Revenue Budget of $47.9 million and Base Expense Budget of $45.2 million, resulting in a $2.7 million variance between revenues and expenditures. However, this variance is somewhat misleading, as this base budget does not include what should be an ongoing transfer from the General Fund to the Debt Service Fund. This transfer is not being included this year due to the accumulation of the cash assets in the Debt Service Fund over the past few years, allowing for the FY 2024-25 total debt obligations of $2,037,311 to be paid directly from the available fund balance in Debt Service Fund (fund 40).
Since this debt service transfer relief is one-time in nature, the full debt service payment will be added back as a transfer out of the General Fund and recorded as an ongoing operating expense in the long-term financial outlook in future years. Therefore, after accounting for this expense as a future need, the adjusted General Fund surplus for FY 2024-25 is projected at $0.7 million.
It is important to note that this surplus exists because a salary savings of $1.2 million is also prudently factored in due to the high level of vacant positions the City has been experiencing in recent years due to recruitment and retention challenges. Without factoring in salary savings and the one-time debt service transfer relief, the General Fund would show a deficit of about $428K at the Base Budget level, allowing no room for critical service enhancements to execute the Council’s strategic vision and FY 2024-25 Workplan without corresponding budget cuts.
The summaries of the General Fund Base Budget Revenues and Expenditures are provided in Attachments 1 and 2. In coordination with other city departments, Finance developed the FY 2024-25 Base Budget assumptions to include all items previously approved by the City Council and factor in inflationary conditions.
Below are some key assumptions applied to the FY 2024-25 Base Budget.
FY 2024-25 Base Budget General Fund Revenues Assumptions Revenue estimates have been modified based on the most current information available from department feedback, external sources, and further analysis.
The following revenues are projected to reflect significant changes over FY 2024-25:
• Property Tax is the City's largest revenue source. Historically, Pacifica's property tax base has shown slower growth compared to some other Bay Area cities. For the FY 2024-25 Budget, property taxes comprise approximately 35% of City General Fund revenues. Both secured and unsecured property taxes are levied based on the assessed real property valuation (the basis for property tax levy) as of January 1, 2024. The FY 2024-25 property tax revenues are projected at $16.7 million or $0.5 million (3%) above the FY 2023-24 Mid-Year Revised Budget of $16.2 million based on the information provided by the County and HdL, the City's property tax consultant. • Charges for Services are the second largest revenue category, comprising about 15% of the total General Fund revenue budget. They include building, planning, other permits, recreation revenues, rentals, fines, and reimbursements. This revenue category is projected to decrease by $0.6 million or 7% due to a reduction in cost-reimbursable planning charges. There is a corresponding reduction in the cost-reimbursable planning expenditures to bring these services more in line with the anticipated activity level for cost-reimbursable services and receivables throughout the fiscal year. • Vehicle License Fee (VLF) in Lieu is the third largest revenue category that accounts for 10% of the General Fund revenues. The challenges around the VLF in Lieu revenues have been discussed at length during the mid-year budget review. There has been insufficient ERAF to fund the VLF in Lieu allocation for the past five years, resulting in a shortfall of revenue in the funding source the state traditionally used to cover its in-lieu 11 Packet Pg. 254
Pacifica City Council 4
May 13, 2024
obligations to cities and counties, and this gap is projected to continue going forward. In the past, the State has backfilled the VLF shortfall, but the State's payment lagged two years behind the shortfall year. As of now, however, the governor's current Budget does not include a true-up for FY 2022-23, which for Pacifica translates into $1,452,355 expected to be paid back to the City in FY 2024-25. The San Mateo County City Managers and Finance Officers are working together on a unified response to this economic stability threat. As discussed with Council on April 8th, the City Manager recommended budgeting the full backfill that is due to the City in FY 24-25 and revisiting this strategy at the mid-year budget review if the state does not follow through on its obligations. Therefore, a corresponding increase of $770,900 or 20% is reflected in the base budget in the VLF category to account for this assumption. • Sales Tax is the City's fourth-largest revenue category. At the midyear budget review, staff reported that the sales tax revenues were down, resulting in a nearly $0.2 million reduction. Based on the most recent discussions with HdL, the City's sales tax advisor, and their sales tax projections, the local sales activities forecast is expected to stay flat, projecting only a 1% or $48,200 increase over the already reduced FY2023-24 Budget, leaving the sales tax revenues of $3.3 million essentially at the same level as the Revised FY 2023-24 Budget.
• Measure Y is a ½ cent Transaction & Use Tax that was passed by the voters in the City of Pacifica in November 2022. The tax became effective April 1, 2023, and FY 2024-25 will be the first full year of collections. Consistent with the sales tax category above, HdL projects this revenue to stay flat at $2.5 million in FY 2024-25. • Other Taxes project normal inflationary increases consistent with historical averages, economic trends, and the prior year's returns. This includes the following:
➢ Utility Users Tax (UUT) is projected to increase by 4% or $100,000 to $2.8 million; Transient Occupancy Tax shows a modest increase of 2% or $58,500 to $2.9 million;
➢ Cannabis Operations Tax is estimated to go up by 4% or $37,000 to $0.9 million based on the current activity trends. However, staff will be closely monitoring this assumption due to reported decreases in cannabis sales tax revenues by HdL; ➢ Business License Tax is also projecting a 4% increase to a total of $0.6 million based on continuing compliance efforts provided by HdL; ➢ Other category includes Franchise Tax, which is estimated to increase by 5% or $64,200 to $1.3 million.
• Intergovernmental revenues comprise state and federal government reimbursements for the City’s childcare program, estimated at $2.4 million, which aligns with the prior year’s activity level. However, adjustments to the childcare program are anticipated at the midyear budget review following the completion of the audit and reimbursement filings.
• Operating Transfers In include transfers from the Gas Tax and Street Construction Fund to cover a portion of the Public Works street maintenance staff budgeted in the General Fund. While the position allocation remains consistent with previous years, the increased transfer amount (up by $130,100 from the prior year) represents higher personnel costs due to substantial labor increases per current labor agreements.
FY 2024-25 Base Budget General Fund Expenditures Assumptions Total General Fund Base Budget expenditures are projected at $45.2 million at the Base budget level, $3.4 million, or 7% less than the FY 2023-24 Revised Budget. This decrease is primarily attributed to a one-time relief to the General Fund, which retained the over $2 million debt service transfer this year instead of transferring it to the Debt Service Fund.
Operating expenses are set to remain consistent with the prior year's actuals and mid-year revised budget adjustments. This includes removing one-time budget allocations from last year and accounting for expected inflationary increases.
11 Packet Pg. 255
Pacifica City Council 5
May 13, 2024
Attachment 2 demonstrates the General Fund expenditure estimates for FY 2024-25 at the Base Budget level. Below are the key base budget expenditure assumptions:
• Salary and Benefits projections include funding for 193.25 full-time equivalents (FTE) positions citywide and include all current MOU provisions. Consistent with the budget strategy presented at the last budget meeting, the Base budget includes built-in salary savings in the amount of $1.2 million or 5% of the total salaries and benefits projections.
This is the first time in recent years that the budget does not fully fund salaries and benefits. Underfunding the City’s largest expense category in a full-service city like Pacifica presents some risks, necessitating close monitoring throughout the year and analysis at mid-year. However, current recruitment and retention challenges, coupled with ongoing needs to increase organizational capacity and a lack of available funds to do so, call for this approach, which will likely become an ongoing city strategy moving forward unless the City’s revenue base changes. Funding for part-time positions remains consistent with the prior year's allocation.
• Vacant positions are budgeted at the top step with the "employee family" cafeteria plan assumption for health benefits. Projections also incorporate all Memorandum of Understanding (MOU) provisions, including equity adjustments, as well as merit increases for eligible staff members on their performance anniversary dates. • FY 2024-25 PERS retirement rates are budgeted as provided by CalPERS for classic miscellaneous and safety members and Public Employees' Pension Reform Act (PEPRA) rates for miscellaneous and safety employees without prior municipal experience or those who have had a break in public service. • PERS Unfunded Accrued Liability (UAL) payment is budgeted at $5.7 million for Safety and Miscellaneous employees, which is a $0.9 million or 20% increase from FY2023-24.
The Base Budget continues to allocate a minimum additional contribution of $167,500 to the 115 trust administered by Public Agency Retirement Services (PARS) to help fund the City's pension obligations in accordance with the previously approved Pension Funding Policy. The Base Budget also includes a continuing contribution to PARS in the amount of $283,750, which represents the funding of the Actuarily Determined Contribution (ADC) per the most recent Actuarial Valuation to fund Other Post Employment Benefits (OPEB) unfunded liability, consistent with the Council funding strategy approved in 2022.
• Funding for the summer internship program is included in the Base Budget consistent with the Council-approved budget strategy, and capitalizing on the City’s successful participation in the San Mateo County regional summer internship program last year, during which the City hosted a class of eight interns.
· Most Professional Services contractual obligations were increased by 2% over the FY 2023-24 Revised Budget to account for regular inflationary increases unless further cost increases were noted and factored into the Budget by operating departments. The category also shows a reduction of $0.9 million or 9%, primarily due to the reductions in cost-reimbursable planning services with corresponding reductions in revenues, as mentioned above. Additionally, this reduction includes the elimination of last year’s budget of $50,000 for the Shop Pacifica and Workation programs. These pilot programs were originally funded by ARPA and approved as one-time initiatives but are not part of 11 Packet Pg. 256
Pacifica City Council 6
May 13, 2024
the base budget assumptions.
• Similarly, most of the Material, Supplies, and Maintenance category assumes a modest 1% inflationary increase from the FY 2023-24 Mid-Year Revised Budget, leaving the Base Budget allocation for this category practically unchanged at $3.8 million. • The Operating Transfers Out Category accounts for a transfer to the Debt Service Fund to fund Pension Obligation Bonds and other debt obligations, as well as transfers to the Internal Service Funds to fund General Liability, Motor Pool operations, and Fire Equipment replacements. As described above, over the past few years, the Debt Service Fund accumulated cash assets because Pension Obligation Bonds were paid directly from the General Fund and not from the Debt Service Fund. This allowed for a one-time relief to the General Fund this year, as this year’s total debt service obligations of $2 million will be paid directly from the cash balance of the Debt Service Fund without the need for an additional transfer from the General Fund. It is important to note that this is a one-time relief and cannot be counted towards the surplus of the General Fund to fund any ongoing services, as the ongoing debt service obligations will resume as an ongoing operating transfer out of the General Fund to the Debt Service fund next year. • Capital Transfers Out Category includes an allocation of $75,000 for the City Facility Electric Vehicle Infrastructure project, which is further described in the Capital Improvement Program section of this report. This is the only CIP project that the General Fund contributed to this year. As demonstrated in the attached financial forecast, the General Fund does not have the means to fund an ongoing CIP Program.
Projected Fund Balance Structure - General Fund
After factoring in the Base Budget assumptions and incorporating the built-in salary savings, the Base Budget projects an adjusted surplus of $0.7 million available to fund the FY 2024-25 workplan items. Without budgeting for the salary savings, the budget would have projected a deficit of about $0.4 million.
As described above, factoring in salary savings will likely become an ongoing budget strategy to ensure a positive outlook for a structurally balanced budget for FY 2024-25 and beyond, with $0.7 million available to meet critical Council priorities for the upcoming Budget. 11 Packet Pg. 257
Pacifica City Council 7
May 13, 2024
Again, the numbers presented in this report only reflect the current Base Budget level of services and include funding for non-discretionary capital projects. It does not consider all budget strategies and other recommendations by the City Manager that will be brought forward at future budget meetings for a more in-depth discussion of the proposed budget and the Council's direction on how to reach a balanced and sustainable budget at a desirable level of services.
CAPITAL IMPROVEMENT PROGRAM
As reported previously, the City does not have a designated funding source to fund the robust Capital Improvement Program at the desired level. Due to the City's financial limitations and limited staff capacity to manage major capital projects, the FY 2024-25 CIP Program recommendations are only limited to projects with available grant funding sources, legally mandated projects, or projects that pose an immediate threat to public health and safety. These projects are considered non-discretionary.
Below is a preliminary list of new non-discretionary projects proposed for FY 2024-25 funding included with the Base Budget:
General Capital Projects:
1. Annual Pavement Striping & Marking Refresh Project $75k- This annual project will refresh centerlines, bicycle lanes, edge lines, crosswalks, stop bars, and more striping on City roads.
2. FY 2024-25 Pavement Resurfacing Project $2.86m- Project will rehabilitate the pavement along roads designated in the 5-year paving plan. It will also include pavement grinding for base repair as well as installation of thermoplastic traffic striping, markings and pavement markers. The project was previously approved on April 8th, 2024. In working with Finance on the balancing process the allocation of funds between various street funds have changed as reflected in Attachment 5.
3. FY 2024-25 Concrete and ADA Improvement Project $205k - Improvement of ADA curb ramps in the vicinity of the yearly resurfacing project and associated sidewalk 11 Packet Pg. 258
Pacifica City Council 8
May 13, 2024
sections.
4. Civic Center Generator $300k - The project will install backup power generation infrastructure to ensure uninterrupted electricity supply during emergencies.
5. City Facility Photovoltaic Infrastructure $75k - This project involves installation of solar panels on the rooftops of city facilities to harness renewable energy and reduce electricity cost.
6. City Facility Electric Vehicle Infrastructure $475k - This project involves the installation of electric vehicle charging stations to support sustainable transportation options for visitors and employees at the Civic Center, Community Center, Corp Yard, and Rockaway Beach.
7. Community Center HVAC Upgrade $175k - The Community Center's HVAC air handlers have reached their useful life and are continuing to fail. Upgrades are needed on all air handlers in order to continue operation.
8. Sharp Park Road Slope Erosion Repair $30k - This project will repair slope erosion due to storm damage at Sharp Park Road.
Wastewater Projects
9. CCWRP Headworks Feasibility and Improvements $230k - This Project will evaluate adding bar screening facilities at the Plant, address headworks channel lining degradation, install new grit classifier and demolish existing hypochlorite tank.
10. CCWRP Laboratory Room Improvement $5k - Purchase new equipment and furniture for the laboratory room at the CCWRP. Improve HVAC in the laboratory.
11. CCWRP Security & Gate System $100k - Purchase new security (security cameras), gate systems, and mangate for the CCWRP.
12. Sewer System Master Plan Update Phase 2 (New Development Data) $100k - Perform a flow study and update the existing Sewer System Master Plan. Incorporate in the update new development data.
13. Sharp Park Pump Station R&R Project $80k - Improvements to the Sharp Park Pump Station which include but not limited to odor control, sanitary sewer mainline relocation and wet well improvements
14. Linda Mar Pump Station R&R Project $1.1m- Replace outdated and aging electrical and instrumentation components at the Linda Mar Pump Station. The project includes replacing and upgrading such components as MCC panels, breakers, switches, level control devices, and flow meters. Jockey pumps may be added to more efficiently pump dry weather flows.
15. Collection System Rehabilitation & Replacement Projects: Vallemar and Rockaway Beach Avenue $557k - Work includes the replacement of approximately 26,000 LF sewer main and appurtenant work in the Vallemar neighborhood.
16. Linda Mar Peralta Project $1.55m - Improvements along Linda Mar and Peralta Blvds, including pipe bursting approximately 1000' and open trench replacement (approximately 500 feet) of sanitary sewers.
The following continuing non-discretionary Projects are currently underway and will require additional funding in FY 2024-25:
General Capital Projects
1. Fire Station 71 Roof Project $205k - Re-roof Fire Station 71 to stop leaks in the building and prolong useful life of roof and building. Additional funding is requested in order to award the bids that were opened on April 10, 2024.
2. Old WW Treatment Plant Garage Roof Project $125k - Re-roof garage at old Wastewater Treatment Plant Yard to stop leaks in the building and prolong useful life of roof and building. Additional funding is requested in order to award the bids that were opened on April 10, 2024.
3. Community Center Improvements $100k - On-going maintenance & improvements are needed such as door replacement for security, office remodel to accommodate staff, spalling of exterior, flooring in dining room, hallway area, new baseboard, carpet 11 Packet Pg. 259
Pacifica City Council 9
May 13, 2024
replacement and paint indoor/outdoor of building.
4. Long-Term Trash Load Reduction $50k - This project includes installation of new Trash Capture Devices and additional street sweeping at critical areas citywide.
5. San Pedro Creek and Pacifica State Beach Total Maximum Daily Load (TMDL), Monitoring Plan and Best Management Plan $65k - The San Francisco Regional Water Quality Control Board requires through the Total Maximum Daily Load (TMDL), the development and implementation of a bacteria water quality monitoring and best management plan for San Pedro Creek and Pacifica State Beach bacteria.
6. Lateral Grant Assistance $200k - The City will continue implementation of a voluntary private service lateral replacement program to reduce the addition of I&I from defective private service laterals.
7. Painting of Fire Station 72 $100k - Prepare, prime and paint exterior of Fire Stations
72. Including all necessary repairs/ or replacement of damaged siding, fascia boards and items suffering from extensive rust from 30 years of exposure. Prepare and paint Apparatus Bay/ Ceiling of Station 72.
Wastewater Projects
8. Collection System Projects $100k - Various projects to repair and/or replace the aging sewer mainlines around the City. Location will be determined and evaluated annually.
9. Digesters - ATAD Modification Phase 3 $175k - This Project will upgrade the existing nozzle configuration in each of the 4 ATAD tanks.
10. CCWRP Pump Replacement $50k - On-going purchase to replace aging pumps, valves and motors for the Calera Creek Water Recycling Plant.
11. Calera Creek and Wetlands Maintenance $50k - On-going Maintenance and Monitoring requirements for the restored Calera Creek wetlands and frog ponds.
12. CCWRP SCADA and PLC Upgrade $600k - Upgrade the Supervisory Control And Data Acquisition (SCADA) and Programmable Logic Controller (PLC) Systems at the Calera Creek Water Recycling Plant. Other upgrades needed will be to improve the communication between the Plant and pump stations.
13. CCWRP Blower Replacement $50k - On-going purchase to replace aging blowers and motors for the Calera Creek Water Recycling Plant.
15. CCWRP R&R Project $100k - The CCWRP is more than 20 years old and a Condition Assessment has identified equipment and processes in need of replacement, , rehabilitation or enhancement.
16. Ultraviolet Disinfection System Upgrade $2.88m - CCWRP is now more than 20 years old and the ultraviolet System is nearing the end of its useful lives. This project will perform Feasibility Study of different new technology on Ultra-Violet disinfection system to replace or enhance the existing system at CCWRP. The Project also includes design, UV equipment purchase, construction which will also include temporary UV.
17. CCWRP Electrical Condition Assessment and Improvements $50k - The Plant electrical system has been updated as needed but is aging with some existing replacement parts no longer available. The purpose of the project is to conduct a condition assessment of electrical systems including backup generation to identify improvements for future CIP Projects. Several critical projects were identified and City will proceed with.
18. Lower Linda Mar Rehabilitation and Repair Project (Renamed) $6.3m - Work includes the replacement of approximately 28,000 LF of sewer main and appurtenant work in Lower Linda Mar area.
19. Pump Stations SCADA and PLC Upgrade $250k - Upgrade the Supervisory Control And Data Acquisition (SCADA) and Programmable Logic Controller (PLC) Systems at the Pump Stations. Other upgrades needed will be to improve the communication between the Plant and pump stations.
20. CCWRP Admin Building Elevator Assessment $50k - The building elevator operation has been requiring servicing visits more frequently over the past year. The purpose of this Project is to assess the current condition and determine how to move forward. Since 11 Packet Pg. 260
Pacifica City Council 10 May 13, 2024
it is unclear on what will be recommended, only the assessment is in the CIP for now.
21. Rockaway Pump Station R&R Project (Formerly PS Upgrade) $200k - The existing generator is nearing the end of its useful life and will be replaced with a portable temporary emergency generator.
Staff has identified probable funding sources for these projects as listed in Attachment 4. These include Federal and State Grants, County contributions, Gas Tax, and various other tax measures. Other projects are funded from available fund balances of various capital and special revenue funds, including Measure A, Measure W, Roy Davies, and Disaster Accounting Funds.
All capital transfers and appropriations for projects referenced above and in Attachment 4 have already been included in the Base Budget. However, once the Council provides additional direction regarding this list or other CIP projects, staff will incorporate the final FY 2024-25 CIP Budget recommendations in the complete five-year CIP program.
Other Previously Approved active CIP projects that are non-discretionary ongoing projects not requesting funding, rollover projects that were not started last year due to staffing constraints, unfunded discretionary projects, and projects awaiting FEMA review are included in Attachment
4. Additionally, Attachment 5 provides information on the currently unfunded projects and estimates the funding needed to address the City’s infrastructure needs within the next five years, totaling over $150 million.
The Pacifica Discussion initiative, as mentioned above, serves as an important platform for community engagement and dialogue on various municipal matters, including diverse infrastructure needs. Given the City’s constraints in funding its CIP Program to address these critical infrastructure needs, the City’s limited financial resources and staff capacity limitations for managing major capital projects necessitate a strategic approach to prioritizing the City’s capital needs.
Through the Pacifica Discussion initiative, residents can contribute their input to help inform decision-making processes about essential infrastructure priorities. As the City navigates these challenges, the input from residents becomes invaluable in guiding the allocation of resources towards projects with the greatest impact and urgency, ensuring that the City’s infrastructure remains resilient and responsive to the needs of the community.
OTHER FUNDS - BASE BUDGET
The Base Budget revenue and expenditure for all other funds have also been updated and are summarized in Attachment 3. This includes all the Special Revenue, Debt Service, Enterprise, and Internal Service Funds. The full budget discussion will include "All Funds," which we typically divide into the General Fund (the majority in terms of dollars and completely discretionary) and Other Funds (largely designated for specific purposes) as well as the Capital Budget (significant projects expected to begin or continue in 2024-25). The Base Budget figures include the CIP budget allocations.
Staff used the same basic assumptions for all other funds to factor in a 2% cost of living increase for the contract services category and 1% for material, supplies, and maintenance.
Enterprise Funds consist of Sewer/Wastewater and Beach Parking funds. Enterprise funds are used for services that are financed and operated as a private business enterprise. The FY 2024- 25 total enterprise funds base expense budget is $34.3 million, which is 36% of the City's overall Budget. Sewer funds are used to account for sewage collection, treatment, major replacements, and maintenance and protection improvements to the sewer system. Sewer charges of $19.0 million are based on a 3.5% rate increase in FY 2024-25. The sewer operating expenditures include the same inflationary base budget assumptions. The Salaries and Benefits costs of approximately $6.4 million are based on 15 FTE allocated to the Sewer Fund and include all current MOU provisions, as well as the same salary savings rate of 5%. The Beach Parking Fund is used to account for parking services to residents and visitors. The Enterprise Funds revenues are projected at $20.9 million, which is in line with the FY 2023-24 Revised Budget.
Special Revenue and Capital Funds are used to account for specific revenue sources or 11 Packet Pg. 261
Pacifica City Council 11 May 13, 2024
financial resources for which expenditures are restricted by law or administrative action to specific purposes. This Category includes Gas Tax and Streets Funds, General Capital, Drainage, Housing Successor, Housing in-lieu, Parking in-Lieu, Park in-Lieu, PB&R Special Revenue and Roy Davies Trust, Disaster Accounting, and other funds. The Housing Successor was added to the Special Revenue to match the reporting in the audited financial statements.
The FY 2024-25 expenditures of $8.7 million for this Category represent around 9% of the City's total Budget.
Internal Service Funds serve the City’s needs and are used to account for Citywide services on a cost-reimbursement basis. These funds accommodate the motor pool, employee benefits, and risk management needs of the City and are supported by the funds that receive benefits.
The FY 2024-25 budget for this Category is $5.3 million, which is 6% of the City's Budget.
Debt Service Fund is used to account for long-term debt obligations. The FY 2024-25 budget for the debt service category is based on the updated debt service schedule and paid directly from the cash balance of the Debt Service Fund this year, as described above. The FY 2024-25 budget for this Category is $2.5 million, which is 3% of the City's Budget.
Projected 10-Year Financial Forecast
This report also presents the Long-Term Financial Forecast for FY 2024-25 (Attachment 6).
Staff will further fine-tune and refine the FY 2024-25 forecast before budget adoption and will update it for the FY 2024-25 Proposed Budget. However, this financial forecast provides a general overview of the City's long-term fiscal challenges at the current Base Budget level.
The forecast considers current revenue and expenditure trends at the upcoming base budget and projected forward. It also adjusts for PERS retirement and modest assumptions for future labor contracts and annual debt service obligations. Since the forecast's objective is to demonstrate the City’s long-term financial sustainability rather than attempting to balance a budget deficit, this forecast does not include any built-in salary savings beyond FY 2024-25.
Also, it does not assume any ongoing future general fund contributions toward the capital improvement program because even without any contributions to Capital, the General Fund is projecting an ongoing structural deficit at the existing revenue base and the baseline level of services. It is important to note that this forecast only projects forward the current level of services and does not take into account any future potential revenue measures, service enhancements, or reductions that may be reflected in the final FY2024-25 Budget once it is developed and adopted, as well as future years.
With these preliminary updates, the City's Operating Budget covering ongoing services to the Community will remain in balance during the upcoming 2024-25 and the following fiscal year.
However, it will begin projecting a structural deficit in FY2026-27 and continue until FY 2030-31 (projected payoff of the Pension Obligation Bonds). Additionally, by FY 2028-29, the unassigned fund balance would fall below the GFOA-recommended guidelines of two months of operating expenditures.
It is important to note that the deficit could occur as early as the upcoming year if the state does not follow through on its VLF In-Lieu Backfill obligations. 11 Packet Pg. 262
Pacifica City Council 12 May 13, 2024
*FY2024-25 balance includes a one-time relief to the General Fund for a $2 million debt service obligation payment
NEXT STEPS
At the next budget meeting on June 10, 2024, staff will be presenting the proposed FY 2024-25 Operating budget. All departments are currently working on their budget recommendations for service changes that will be submitted to the City Manager in order of department priorities.
Over the next few weeks, the City Manager will meet with each department to review and discuss their requests and ultimately formulate a plan for the balanced FY 2024-25 budget. FY 2024-25 Budget recommendations will be based on many factors, including the Council's strategic vision and service-level impact on the overall City operations and services provided to the community.
FISCAL IMPACT:
There is no action associated with this item; this is an informational presentation only with Council comments being sought to help guide preparation of the Proposed Budget for future Council consideration.
ORIGINATED BY:
City Manager's Office
ATTACHMENT LIST:
Attachment 1 - FY 2024-25 General Fund Baseline Budget Revenue Summary (PDF) 11 Packet Pg. 263
Pacifica City Council 13 May 13, 2024
Attachment 2 – FY 2024-25 General Fund Baseline Budget Expenditures Summary (PDF) Attachment 3 – FY 2024-25 Fund Balance Summary (PDF)
Attachment 4 – FY 2024-25 Recommended Non-Discretionary CIP Budget (PDF) Attachment 5 – List of Unfunded CIP Projects (PDF)
Attachment 6 -Long-Term Financial Forecast wAssumptions (PDF) Attachment 7 – Unfunded Pension and OPEB Liability Funding Strategy (PDF) 11 Packet Pg. 264
Attachment 1
Description FY 2022-23
Actual
FY 2023-24
Revised
Budget
FY 24-25
Base Budget
5/13/24
% of FY
2024-25
Budget
$ Change
Base over
Prior Year
Revised
% Change
Base over
Prior Year
Revised
Taxes $ 35,046,917 $ 34,162,000 $ 35,819,200 75% $ 1,657,200 44% Property Tax 15,836,463 16,204,900 16,751,000 35% 546,100 3% Vehicle License Fees 6,551,610 3,819,100 4,590,000 10% 770,900 20% Business License Tax 542,974 570,700 591,000 1% 20,300 4% Cannabis tax 993,849 950,000 987,000 2% 37,000 4%
Sales Tax 3,319,862 3,231,000 3,279,200 7% 48,200 1%
Measure Y 557,966 2,500,000 2,512,000 5% 12,000 0%
Transient Occupancy Tax 3,155,960 2,919,500 2,978,000 6% 58,500 2% Utility Users Tax 3,312,376 2,700,000 2,800,000 6% 100,000 4% Other Taxes 775,857 1,266,800 1,331,000 3% 64,200 5%
Intergovernmental 5,390,223 2,431,700 2,440,000 5% 8,300 0% Other Revenue 1,016,539 835,000 875,000 2% 40,000 5%
Charges for Services 7,554,413 7,975,000 7,416,800 15% (558,200) -7% Sub-total $ 49,008,092 $ 45,403,700 $ 46,551,000 97% $ 1,147,300 42% Transfers In 1,130,900 1,291,900 1,422,000 3% 130,100 10% Total $ 50,138,992 $ 46,695,600 $ 47,973,000 100% $ 1,277,400 52% City of Pacifica
General Fund Revenue Detail
FY2024-25 Proposed Base Budget
11.a
Packet Pg. 265 Attachment: Attachment 1 - FY 2024-25 General Fund Baseline Budget Revenue Summary (5652 : FY24-25 Base Budget Study Session) Attachment 2
Expenditure By Category FY 2022-23
Actual
FY 2023-24
Revised
Budget
FY 24-25
Base Budget
5/13/24
% of FY
2024-25
Budget
$ Change
Base over
Prior Year
Revised
% Change
Base over
Prior Year
Revised
Salaries & Benefits $ 30,561,013 $ 31,029,061 $ 32,722,255 72% $ 1,693,194 5% Salary Savings (5%) (1,228,782) -3% (1,228,782)
Contract Services 7,682,998 9,083,400 8,232,100 18% (851,300) -9% Material/Supplies/Maintenance 4,024,354 3,800,100 3,821,800 8% 21,700 1% Sub-Total 42,268,365 43,912,561 43,547,373 96% (365,188) -1% Transfers/Allocations Out 2,305,381 3,376,200 1,587,600 4% (1,788,600) -53% Transfers Out - Capital 655,000 1,338,000 75,000 0% (1,263,000) -94% Total $ 45,228,746 $ 48,626,761 $ 45,209,973 100% $ (3,416,788) -7% City of Pacifica
General Fund Expenditures
FY2024-25 Proposed Base Budget
11.b
Packet Pg. 266 Attachment: Attachment 2 – FY 2024-25 General Fund Baseline Budget Expenditures Summary (5652 : FY24-25 Base Budget Study Session) Fund Name
Projected
Fund Balance
6/30/2024
Revenues &
Transfers In
Revised Budget
Expenditures &
Transfers Out
Revised Budget
Revenue Over
(Under)
Expenditures
Projected
Fund Balance
6/30/2025
01 GENERAL FUND $ 18,616,311 $ 47,973,000 $ 45,209,973 $ 2,763,027 $ 21,379,338
ENTERPRISE FUNDS
18/34 Sewer Fund 24,090,949 20,310,000 33,685,108 (13,375,108) 10,715,841 35 Beach Parking Fund 339,235 592,000 593,632 (1,632) 337,603 Total Enterprise Funds 24,430,184 20,902,000 34,278,740 (13,376,740) 11,053,444
SPECIAL REVENUE FUNDS
07 SLES Fund 320,976 150,000 79,100 70,900 391,876
08 Fire Assessment Fund - -
09 Measure A Fund 539,499 1,400,000 1,938,926 (538,926) 573 10 Gas Tax Maintenance Fund 259,111 2,442,000 2,128,400 313,600 572,711 11 Measure W Fund 302,005 560,000 862,000 (302,000) 5
12 Highway 1 Improvement Fund 573,346 5,000 35,966 (30,966) 542,380 13 Street Improvement Fund 771,053 655,000 832,947 (177,947) 593,106 14 Manor Drive Improvement Fund* (107,947) 107,947 - 107,947 - 16 NPDES Stormwater Fund 149,457 193,000 266,000 (73,000) 76,457 19 Planned Local Drainage Fund 319,773 25,000 2,100 22,900 342,673 22 General Capital Improvement Fund 5,042,981 1,279,800 1,540,180 (260,380) 4,782,601 23 Frontierland Remediation 207,187 75,000 - 75,000 282,187 93 Housing Successor 382,513 - - 382,513
24 Housing In-Lieu Fund 1,916,131 1,700,000 - 1,700,000 3,616,131 25 Parking In-Lieu Fund 119,411 20,000 - 20,000 139,411 26 Park In-Lieu Capital Improvement 195,282 100,000 - 100,000 295,282 27 PB&R Roy Davies Trust 2,695,476 - 100,300 (100,300) 2,595,176 28 PB&R Special Revenue Fund 1,809,638 - 216,474 (216,474) 1,593,164 29 Tree Special Revenue Fund 1,748 - - 1,748
31 Pacifica Library Fund 88,099 - - - 88,099
38 Disaster Accounting Fund 7,056,949 1,700,000 659,800 1,040,200 8,097,149 Total Special Revenue & Capital Funds 22,642,688 10,412,747 8,662,193 1,750,554 24,393,242
INTERNAL SERVICE FUNDS
65 Self Funded Dental Plan 302,701 255,000 184,800 70,200 372,901 66 Self-Insurance Fund W/C 856,648 1,112,000 1,112,000 - 856,648 67 Self-Insurance Fund Liability 333,758 2,808,400 2,808,400 - 333,758 71 Motor Pool Operations Fund 226,588 1,184,459 1,184,459 - 226,588 72 Motor Pool Replacement Fund 1,815,632 25,000 - 25,000 1,840,632 74 Fire Equipment Fund 34,297 133,000 - 133,000 167,297 Total Internal Service Funds 3,569,624 5,517,859 5,289,659 228,200 3,797,824
DEBT SERVICE FUNDS
40 Debt Service Fund 2,699,165 483,226 2,522,941 (2,039,715) 659,450 Total Debt Service Funds 2,699,165 483,226 2,522,941 (2,039,715) 659,450 Total Other Funds 53,341,661 37,315,832 50,753,533 (13,437,701) 39,903,960 Total All Funds $ 71,957,972 $ 85,288,832 $ 95,963,506 $ (10,674,674) $ 61,283,298 Attachement 3
City of Pacifica
FY2024-25 Proposed Base Budget
Summary of Fund Balances
11.c
Packet Pg. 267 Attachment: Attachment 3 – FY 2024-25 Fund Balance Summary (5652 : FY24-25 Base Budget Study Attachment 4
City of Pacifica
Budget numbers in 1000's
Project Project
Number Exp. Fund FY 2024-25 Allocation
FY 24-25
Rollover
Funds
Total
Available
Funding
Source(s)
Notes
Fund 1 -
GF
Fund 9 -
Measure
A
Fund 10 -
SB1
Fund 11 -
Measure
W
Fund 13 -
Street
Improvement
Fund 16 -
NPDES
Fund 22-
Capital
Improvement
Fund 27-
Roy
Davies
Fund 28 -
PB&R
Special
Rev
Fund 34 -
WWTP
Fund 38 -
Disaster
Acct.
Grants,
Revenues,
and
Insurance
Non-Discretionary New/Yearly Projects requesting Funding in FY 24-25 Annual Pavement Striping & Marking Refresh
Project
TBD F13 $75 $75 $150 $75
FY 2024-25 Pavement Resurfacing Project TBD F9, F10,
F11, F13 $2,861 $0 $2,861
SB1,
Measure A,
W, Y
$485 $1,069 $657 $650
FY 2024-2025 Concrete & ADA Improvement
Project
TBD F11 $205 $0 $205
Measure W
4/8/24
approved
$205
Civic Center Generator TBD F22 $300 $0 $300 $300
City Facility Photovoltaic Infrastructure TBD F22 $50 $0 $50 $50 City Facility Electric Vehicle Infrastructure TBD F22 $475 $0 $475 Peninsula
Clean
Energy
Grant
$75 $400
Community Center HVAC Upgrade 294 F28 $175 $350 $525 $175 Sharp Park Road Slope Erosion Repair TBD F22 $30 $0 $30 $30 CCWRP Headworks Feasibility and
Improvements
P040 F34 $230 $0 $230 WW 34 $230
CCWRP Laboratory Room Improvement P020 F34 $5 $0 $5 WW 34 $5 CCWRP Security & Gate System
P045
(Formerly
P022)
F34 $100 $0 $100 WW 34 $100
Sewer System Master Plan Update Phase 2
(New Development Data) C007 F34 $100 $0 $100 WW 34 $100 Sharp Park Pump Station R&R Project
(Formerly Sharp Park PS Facility Improvements
Project)
C008 F34 $80 $0 $80 WW 34 $80
Linda Mar Pump Station R&R Project (Formerly
LMPS Upgrade C004B) C004 F34 $1,115 $0 $1,115 WW 34 $1,115 Collection System Rehabilitation &
Replacement Projects: Vallemar and Rockaway
Beach Avenue
TBD F34 $557 $0 $557 WW 34 $557
Linda Mar Peralta Project TBD F34 $1,550 $0 $1,550 WW 34 $1,550 Proposed Capital Projects 2024-25
11.d
Packet Pg. 268 Attachment: Attachment 4 – FY 2024-25 Recommended Non-Discretionary CIP Budget (5652 : FY24-25 Base Budget Study Session) Non-Discretionary On-going Project Requesting FY 24-25 Allocation Fire Station 71 Roof Project TBD F22 $205 $200 $405 $205 Old WW Treatment Plant Garage
Roof Project TBD F22 $125 $95 $220 $125
Community Center Improvements 333 F27 $100 $190 $290 $100 Long-Term Trash Load Reduction TBD F16 $50 $50 $100 $50 San Pedro Creek and Pacifica State Beach Total
Maximum Daily Load (TMDL), Monitoring Plan
and Best Management Plan
351, P028 F16, F34 $65 $122 $187 NPDES,
WW 34 $45 $20
Lateral Grant Assistance C032 F34 $200 $280 $480 WW 34 $200 Painting of Fire Station 72 346 F22 $120 $50 $170
Fund
Balance of
Fund
22 $100 $20
Collection System Projects C005 F34 $100 $250 $350 WW 34 $100 Digesters - ATAD Modification Phase 3 P002 F34 $175 $150 $325 WW 34 $175 CCWRP Pump Replacement P004 F34 $50 $100 $150 WW 34 $50 Calera Creek and Wetlands Maintenance P011 F34 $50 $100 $150 WW 34 $50 CCWRP SCADA and PLC Upgrade P008A F34 $600 $550 $1,150 WW 34 $600 CCWRP Blower Replacement P024 F34 $50 $50 $100 WW 34 $50 CCWRP R&R Project P033 F34 $100 $100 $200 WW 34 $100
Ultraviolet Disinfection System Upgrade P034 F34 $2,880 $3,538 $6,418 WW 34 $2,880 CCWRP Electrical Condition Assessment and
Improvements
P037 F34 $50 $825 $875 WW 34 $50
Lower Linda Mar Rehabilitation and Repair
Project (Renamed) C044 (Former F34 $6,334 $3,500 $9,834 WW 34 $6,334 Pump Stations SCADA and PLC Upgrade C046 F34 $250 $100 $350 WW 34 $250 CCWRP Admin Building Elevator Assessment P039 F34 $50 $50 $100 WW 34 $50 Rockaway Pump Station R&R Project (Formerly
PS Upgrade) C006 F34 $200 $100 $300 WW 34 $200
$0
Total $ 19,662 $ 10,825 $30,487 $75 $485 $1,069 $862 $725 $95 $100 $100 $175 $14,866 $660 $450
11.d
Packet Pg. 269 Attachment: Attachment 4 – FY 2024-25 Recommended Non-Discretionary CIP Budget (5652 : FY24-25 Base Budget Study Session) ATTACHMENT 4
Other Previously Approved Active CIP Projects:
Non-Discretionary On-going Projects Not Requesting FY 24-25 Funding Manor Drive O/P Improvements
Beach Boulevard Infrastructure Resiliency Project
Corp Yard Vehicle Storage Project
Police Department Radio Infrastructure Improvement
Esplanade & Palmetto Bicycle Lane Project
Pier Handrail Repair Project
School Crosswalk Beacon Replacement Project
Fairmont/Fairmont West Site Improvements
Parks, Beaches and Trail Signage Improvements
Relocation of Sewer Mainline at SF RV Park
The Sharp Park Priority Development Area (PDA) Access Pedestrian Improvement San Pedro Creek Bank Pathway and Bank Repair (Formerly San Pedro Creek Bank Stabilization Project)
Wastewater
CCWRP Centrifuges
CCWRP Roof Improvements
CCWRP Process Optimization Projects
CCWRP Environmental Compliance Project
Linda Mar Stormwater Pump Station Rehabilitation Project Forcemain Condition Assessment
CCWRP Grit System R&R (Renamed)
CCWRP Sand Filter Upgrade (Renamed)
11.d
Packet Pg. 270 Attachment: Attachment 4 – FY 2024-25 Recommended Non-Discretionary CIP Budget (5652 : FY24-25 Base Budget Study Session) Rollover Projects Not Started Last Year Due to Staffing Constraints - Not Started Oddstad Park Building Maintenance
Financial / HR Software
City Facilities WiFi Upgrade
Enterprise Backup Solution
Urban Forest, Land, and Vegetation Management Plans
ADA Transition Plan Update
Needs Assessment for City Facilities
Storm Drain Master Plan Phase II Inspections
Beach Boulevard Public Plaza Project
Projects Waiting on FEMA Review / Funding – May move up on the priority list New Pacifica Library
Lower Linda Mar Storm Drain Design Project
Westline Drive Storm Drain Project
San Pedro Creek Bank Stabilization and Pathway Repair
Misc. Asphalt Repairs
Beach Blvd. Benches and Trash Can replacements/repairs and sand clean-up Landside Repairs (Belfast, Rockaway)
Misc. Storm Drain Repairs
Linda Mar Pump Station Repairs
EQ Basin Repair
CCWRP Sand Filer Assessment and Repair
11.d
Packet Pg. 271 Attachment: Attachment 4 – FY 2024-25 Recommended Non-Discretionary CIP Budget (5652 : FY24-25 Base Budget Study Session) Attachment 5
City of Pacifica
Unfunded Capital Projects
Budget Numbers in 1000's
Project Unfunded
Terra Nova Boulevard and Oddstad Boulevard Pedestrian Crossing Improvements $45 Anza Drive Storm Drain $150
Clarendon Road Drainage Improvements $1,200
Montecito Avenue Storm Drain System Improvements $200
Santa Rosa Avenue Outfall Improvements $250
West Linda Mar Storm Drain Improvement Project $1,920
Crespi Canal Repair Project $100
Monterey Road Drainage Improvements $575
Rockaway Beach Avenue Drainage Improvement $300
Calera Creek Culvert Pipe Replacement $125
Lower Linda Mar Storm Drain project $5,200
Adobe Bridge Reconstruction $1,600
Fire Station 71 and Station 72 Replacement $33,000
Fire Station 71 & 72 Modernization $950
Sharp Park Road Slope Erosion Repair $155
Station 72 Pavement Rehabilitation $250
Palmetto Ave. Street Amenities $1,360
Oddstad Park Parking Rehabilitation & Drainage Improvements $250 Rockaway to Pacifica State Beach Trail Rehabilitation $350 New Pacifica Library $55,000
Rockaway Parking Area $4,330
Rockaway Beach Parking Structure $10,215
400 Esplanade Multi-Purpose Trail $1,250
Fairmont West Field Improvements $1,500
Sanchez Field and Park Improvements $2,500
Ahni (Cattle Hill) Trail Improvements $2,000
San Pedro Headlands Multi-Purpose Trail $8,250
Frontierland Lower Park Expansion $5,000
Frontierland Upper Park Reno/Expansion $2,500
Cattle Hill Trailhead Park Construction $5,000
Beach Boulevard Promenade Park Improvements $2,500
Various City Trail Improvements $4,500
Total $152,525
Unfunded Discretionary Projects
Grace McCarthy Overlook Improvements
11.e
Packet Pg. 272 Attachment: Attachment 5 – List of Unfunded CIP Projects (5652 : FY24-25 Base Budget Study Session) Attachment 6
REVENUE
2024-2025 Base
Budget
2025-2026
Projected
2026-2027
Projected
2027-2028
Projected
2028-2029
Projected
2029-2030
Projected
2030-2031
Projected
2031-2032
Projected
2032-2033
Projected
2033-2034
Projected
Property Tax 16,751,000 $ 17,253,500 $ 17,771,100 $ 18,481,900 $ 19,221,200 $ 19,990,000 $ 20,789,600 $ 21,621,200 $ 22,486,000 $ 23,385,400 $ Vehicle License Fees 4,590,000 4,624,700 4,763,400 4,953,900 5,152,100 5,358,200 5,572,500 5,795,400 6,027,200 6,268,300 Sales Tax 3,279,200 3,344,800 3,411,700 3,497,000 3,584,400 3,674,000 3,765,900 3,860,000 3,956,500 4,055,400 Measure Y 2,512,000 2,562,200 2,613,400 2,678,700 2,745,700 2,814,300 2,884,700 2,956,800 3,030,700 3,106,500 Transient Occupancy Tax 2,978,000 3,052,500 3,128,800 3,222,700 3,319,400 3,419,000 3,521,600 3,627,200 3,736,000 3,848,100 Utility Users Tax 2,800,000 2,870,000 2,941,800 3,015,300 3,090,700 3,168,000 3,247,200 3,328,400 3,411,600 3,496,900 Other Taxes 1,331,000 1,364,300 1,398,400 1,433,400 1,469,200 1,505,900 1,543,500 1,582,100 1,621,700 1,662,200 Department/Program Revenues 12,164,800 12,408,100 12,656,300 13,099,300 13,557,800 14,032,300 14,523,400 15,031,700 15,557,800 16,102,300 Transfers In 1,450,400 1,479,400 1,509,000 1,422,000 1,539,200 1,570,000 1,601,400 1,633,400 1,666,100 1,699,400 Excess ERAF 145,000 145,000 145,000 145,000 145,000 145,000 145,000 145,000 145,000 145,000Total Annual Revenue 47,973,000 $ 49,075,500 $ 50,309,300 $ 52,036,200 $ 53,824,700 $ 55,676,700 $ 57,594,800 $ 59,581,200 $ 61,638,600 $ 63,769,500 $
EXPENDITURES
2024-2025 Base
Budget
2025-2026
Projected
2026-2027
Projected
2027-2028
Projected
2028-2029
Projected
2029-2030
Projected
2030-2031
Projected
2031-2032
Projected
2032-2033
Projected
2033-2034
Projected
Salaries & Benefits 31,493,473 $ 32,989,413 $ 34,556,410 $ 35,938,666 $ 37,376,213 $ 38,871,262 $ 40,426,112 $ 42,043,157 $ 43,724,883 $ 45,473,878 $ Contract Services 8,396,742 8,564,677 8,735,970 8,910,690 9,088,904 9,270,682 9,456,095 9,645,217 9,838,122 8,232,100Material/Supplies/Maintenance 3,879,127 3,937,314 3,996,374 4,056,319 4,117,164 4,178,921 4,241,605 4,305,229 4,369,808 3,821,800Transfers Out - Debt Service 2,316,727 2,105,624 2,379,021 2,406,156 2,237,555 1,136,787 1,126,902 1,127,498 1,096,054 Transfers/Allocations Out 1,627,290 1,587,600 1,667,972 1,709,672 1,752,413 1,796,224 1,841,129 1,887,158 1,934,336 1,982,695 Total Annual Operating Expenditures 45,134,973 $ 48,998,196 $ 51,043,100 $ 52,759,703 $ 54,501,792 $ 56,111,108 $ 56,853,632 $ 58,754,917 $ 60,737,164 $ 62,760,556 $ Transfers Out - Capital 75,000 $ - $ - $ - $ - $ - $ - $ - $ - $ Total General Fund Expenditures 45,209,973 $ 48,998,196 $ 51,043,100 $ 52,759,703 $ 54,501,792 $ 56,111,108 $ 56,853,632 $ 58,754,917 $ 60,737,164 $ 62,760,556 GF Structural Surplus/Deficit* 2,763,027 77,304 (733,800) (723,503) (677,092) (434,408) 741,168 826,283 901,436 1,008,944Surplus/Def as % of GF Revenues 5.76% 0.16% -1.46% -1.39% -1.26% -0.78% 1.29% 1.39% 1.46% 1.58%Projected Ending Fund Balance 21,379,338 $ 21,456,642 $ 20,722,841 $ 19,999,339 $ 19,322,247 $ 18,887,839 $ 19,629,007 $ 20,455,291 $ 21,356,727 $ 22,473,179 Non-Spendable, Restricted & Assigned 10,646,088 $ 10,493,420 $ 10,697,910 $ 10,869,570 $ 11,043,779 $ 11,204,711 $ 11,278,963 $ 11,469,092 $ 11,667,316 $ 10,785,956 Unassigned Fund Balance 10,733,250 $ 10,963,222 $ 10,024,931 $ 9,129,768 $ 8,278,468 $ 7,683,128 $ 8,350,044 $ 8,986,199 $ 9,689,411 $ 11,687,223 $ Unassigned balance as % of Op. Exp. 23.8% 22.4% 19.6% 17.3% 15.2% 13.7% 14.7% 15.3% 16.0% 18.6%GFOA Recommended Reserves 7,522,496 8,166,366 8,507,183 8,793,284 9,083,632 9,351,851 9,475,605 9,792,486 10,122,861 10,460,093Above/(Below) GFOA Guidelines 3,210,754 2,796,856 1,517,748 336,485 (805,164) (1,668,723) (1,125,561) (806,287) (433,450) 1,227,130 City of PacificaLong Term Financial Forecast Table and AssumptionsGeneral Fund *The FY2024-25 structural surplus of $2.7 million is due to a one-time General Fund relief of $2 million for the debt service payment that should be backed out due to the reoccurring nature of these obligations leaving only $0.7 in adjusted structural surplus
11.f
Packet Pg. 273
Attachment: Attachment 6 -Long-Term Financial Forecast wAssumptions (5652 : FY24-25 Base Budget
LONG-TERM FINANCIAL FORECAST ASSUMPTIONS
The long-term financial model features a set of assumptions for revenues and expenditures based on conservative projections. The scenario presented represents conservative revenue estimates based on information available now. These projections are preliminary, and staff will further refine the figures included in this report as part of the FY 2024-25 Recommended Budget.
Revenue Assumptions
1. Property Tax is the City's biggest revenue category. Based on the current collection trends, consistent with the anticipated increases in the assessed market value and information provided by the county and HdL, the City’s property tax consultant, these revenues assume a 3% increase for the upcoming two fiscal years FY2025-26 and FY2026-27 and a 4% increase annually thereafter.
2. Vehicle License Fees (VLF) are tied to property-assessed value growth and a corresponding growth in tax revenue. The total amount due to the City from FY2024 is $2.3 million, but due to a two-year lag in receiving these revenues from the state, the City does not anticipate receiving it until FY 2025-26. The FY2024-25 Base Budget includes the full backfill that is due from the FY2022-23 shortfall (1,452,355) that is due from the State. The normal annual VLF has been reduced by the shortfall expected during FY 2024-25, as we expect a shortfall again each year going forward. This revenue is in constant jeopardy, depending on the state’s budget situation.
There is a possibility that the State will revise its budget in the May 2025 review. Staff will continue monitoring this issue. Similarly to property tax, the VLF revenue assumes a 3% increase for two fiscal years, FY2025-26 and FY2026-27, then a 4% increase annually thereafter.
3. Sales Tax assumes a modest increase of 2% for two years over the FY2024-25 Base Budget based on the most recent projections by HdL (the City’s Sales Tax consultant), followed by a
2.5% increase for the next seven years to consider the cyclical nature of these revenues driven by the local economy.
4. Measure Y is the new ½ % voter-approved Transaction and Use Tax that went into effect on April 1, 2023. The same projection method is applied to Measure Y as the other regular 1% of Bradley Burns Local Sales and Use Tax mentioned above, assuming 2% increase for FY2026 and FY2027 and 2.5% for the future years.
5. The Transient Occupancy Tax assumes a 2.5% increase for FY2026 and FY2027 and a normal inflation change of 3% thereafter for the next seven years. These revenues could be substantially affected by the Council’s future policy changes related to STR regulations.
6. Utility Users' Taxes (UUT) also assume a uniform 2.5% increase for all nine years, consistent with current collections trends. While reviewing our FY2023-24 UUT revenue, the anticipated increase in PG&E rates didn’t seem to have a huge impact on the UUT income. Staff will continue monitoring these revenues.
7. Other Taxes include business license tax, cannabis operations tax, and franchise tax. A modest
2.5% increase is projected for these tax categories in future years.
8. Departmental or Program revenues include building, planning, and other permits, recreation revenues, grants, and rentals. In FY2026 and FY2027, this category includes a 2% increase and a 3.5% increase thereafter based on the anticipated continuation of the current service activity level, plus inflationary adjustments to the Wastewater Fund administrative service fee and an anticipated increase in investment income due to the recently completed renegotiations of the City agreements for banking services.
11.f
Packet Pg. 274 Attachment: Attachment 6 -Long-Term Financial Forecast wAssumptions (5652 : FY24-25 Base Budget Study Session)
9. The Operating Transfer in assumes a 2% increase throughout the years to account for the normal inflationary increase. This category mainly includes the cost recovery reimbursements from Fund 16 (NPDES), Fund 10 (Gas Tax) and Fund 09 (Measure A).
10. The General Fund’s portion of ERAF revenues assumes no changes. Based on the current Council-approved policy, $145K of ERAF revenues are retained in the General Fund and allocated to local non-profits. The rest of the ERAF funding is split 50% each between the Disaster Accounting Fund (Fund 38) and the Housing In lieu Fund (Fund 24).
Expenditures Assumptions
1. Salaries and Benefits (S&B) projections include the same base level full-time equivalent count of 193.25 citywide as listed in the FY2024-25 Base Budget. The future years include a 4.75% increase in FY2026 and FY2027 and a 4.0% increase thereafter to account for increases related to increased cost of medical, dental, and vision benefits, PERS rates, and unfunded pension liability payments, merit, and other labor-related increases.
2. The Contractual Services Category assumes an annual increase of 2.0% for most City contracts to account for inflation and regular CPI increases in existing contracts.
3. Materials, Supplies, and Maintenance Category assumes a modest 1.5% increase each year to account for inflation.
4. Debt Service Expense Category is projected to be in accordance with the City’s updated debt service schedule for each projected year. These are the major debt service obligations included in financing: 2016 COP, 2019 POB, and 2021 Civic Center. The General Fund receives a onetime relief of debt payment transfer to the Debt Service Fund due to the available cash balance in the Debt Service Fund to accommodate the payment without additional transfer from the General Fund that year. Also, a reduction of the debt payment in FY 2029-30 is related to the projected payoff for the Pension Obligation Bond.
5. The Operating Transfer Out Category accounts for transfers to Internal Service Funds, including Risk Management funds for General Liability and Worker's Compensation insurance premiums and Motor Pool funds to cover motor pool operating expenditures. The projection assumed a marginal 2.5% increase each year, which may not be sufficient in the future years, given the highly volatile nature of the insurance market and future vehicle replacement needs.
6. Capital Transfers Category. The Financial Outlook does not include any ongoing funding for the Capital Improvement Program (CIP). The FY2024-25 Budget only includes the General Fund’s contribution to one CIP project at $75K. Given that the City does not have dedicated capital revenue sources, a consistent annual contribution from the General Fund to the CIP program will likely be required every year, competing with the Council’s other strategic priorities.
11.f
Packet Pg. 275 Attachment: Attachment 6 -Long-Term Financial Forecast wAssumptions (5652 : FY24-25 Base Budget Study Session) ATTACHMENT 7
CITY OF PACIFICA UNFUNDED PENSION AND OPEB LIABILITY FUNDING STRATEGY This section of the report aims to provide a refresher and an overview of the City's strategy for managing Pension and Other Post Employment Benefit liabilities. As a best practice in Government finance, it is prudent to develop a funding strategy for pension and OPEB plans.
Over the last few years the City has setup such a structure. The City has pension plans with the California Public Employees Retirement System (Cal PERS) and the trust fund with the Public Agency Retirement Services (PARS). The City also participates in the Cal PERS medical program known as Other Post-Employment Benefits (OPEB) Plan.
CalPERS Pension Plans:
✓ Miscellaneous
✓ Safety Police
✓ PEPRA Safety Police
✓ Safety Fire
✓ PEPRA Safety Fire
CalPERS OBEB
Cal PERS OPEB medical program is an agent multiple employer defined benefit retiree healthcare plan.
PARS Pension Plan
The City has an Agent Multiple-Employer PARS Retirement Enhancement Plan (REP) that was implemented July 1, 2003, and is now closed to new participants hired after January 1, 2012. There are 22 inactive employees or beneficiaries receiving benefits and 2 active employees in the plan. The REP is administered by PARS.
All these plans accumulate assets that will be used to pay future benefits. An actuary prepares a report for each of these plans. They determine the market value of the assets and the accrued liability (present value of the amount needed to pay future benefits). The difference between the plan assets and the plan liability is the Unfunded Accrued Liability (UAL; also known as the Unfunded Actuarily Accrued Liability (UAAL). They determine the amount the City needs to pay each year, which has two components. The Normal cost rate which is a rate to cover current member's future benefits. In addition, they calculate the contribution needed to pay the Unfunded Accrued Liability (UAL) which will fluctuate based on assumptions and market conditions each year. The following is a table of plans Assets, Liability, Unfunded Accrued Liability, and other information taken from the most current actuarial reports.
Both Employee and employer contributions to this plan are required under state law. Required Employer contributions are comprised of two components. The "normal cost" represents the cost Actuarilal Values as of June 30, 2022 Annual Contribution Employer Plan Assets Liability UAL
Funded
Status
Covered
Payroll
FY 2024-25
Normal
Cost Rate
Amortization
of UAL
Miscellaneous $ 94,100,039 $119,322,702 $25,222,663 78.9% $11,093,233 12.60% $ 1,923,242 PEPRA Safety Fire 1,020,868 1,171,877 151,009 87.1% 961,643 13.76% 5,483 PEPRA Safety Police 2,053,888 2,384,040 330,152 86.2% 1,695,546 13.76% 11,434 Safety Fire 35,601,433 52,979,381 17,377,948 67.2% 2,226,262 24.33% 1,382,383 Safety Police 58,130,597 87,881,724 29,751,127 66.1% 2,370,362 27.32% 2,369,381 Total Cal PERS
Pension Plans
$190,906,825 $263,739,724 $72,832,899 72.4% $18,347,046 $ 5,691,923
11.g
Packet Pg. 276 Attachment: Attachment 7 – Unfunded Pension and OPEB Liability Funding Strategy (5652 : FY24-25 Base Budget Study Session) attributable to services earned during the current fiscal period and are expressed as a percentage of pensionable payroll. The second component is a flat dollar amount representing the "UAL Contribution" which is an amortization of outstanding individual UAL bases (layers). The method and maximum term of the UAL amortization is dictated by the CalPERS policy, but the repayment of the UAL can be accelerated and/or restructured at the employer's discretion. Together, the two employer components represent the total required employer contribution. The sum of the required employer and employee contributions is called the Actuarial Determined Contribution (ADC).
Due to the frequent volatility in the total required employer contribution rate, the City has opted to utilize an Internal Revenue Code (IRC) §115 trust as a buffer against future expected volatility investing in a manner consistent with the long-term nature of pension liabilities and the City's tolerance for investment risk.
How Can a 115 Trust Be Structured?
An additional contribution to the 115 Trust of $167,500 is included to help fund the City's pension obligations in accordance to the Pension Funding Policy with the goal to accumulate an amount equal to 1.5% of the City's accrued pension liability over the next 20 years (1.5% x $263,739,724 = $3.96 million). This trust fund account will serve as a "rainy day fund" or buffer against future pension cost volatility.
Similarly, a continuing contribution to the PARS trust is budgeted at $283,750 to fund OPEB unfunded liability, consistent with the Council funding strategy approved in April 2022. This FY 2024-25 allocation will provide additional contributions toward the Actuarial Determined Contribution (ADC) in addition to the pay-as-you-go payment strategy, which was historically the only budget mechanism of this unfunded liability in prior years. Because the City closed the OPEB pool to all new members, unlike pensions, the actuarial liability will gradually go away. By prefunding this liability through PARS, the City will be able to significantly reduce the Net OPEB liability reported annually in the Annual Comprehensive Financial Report (ACFR). The most current actuarial report shows the OBEB unfunded liability balance of $8,998,717 as of June 30, 2022.
11.g
Packet Pg. 277 Attachment: Attachment 7 – Unfunded Pension and OPEB Liability Funding Strategy (5652 : FY24-25 Base Budget Study Session)