City of Piedmont
COUNCIL AGENDA REPORT
DATE: June 5, 2023
TO: Mayor and Council
FROM: Rosanna Bayon Moore, City Administrator
SUBJECT: Public Hearing on the Proposed 2023-24 Budget, Including the Potential Addition of Full Time Personnel, Proposed Levy for the Municipal Services Special Tax, and Proposed Levy for the Special Municipal Sewer Tax
RECOMMENDATION
Conduct the first public hearing on the proposed 2023-24 Budget, including the potential addition of full time personnel, proposed levy of the Municipal Services Special Tax, and proposed levy of the Special Municipal Sewer Tax.
BACKGROUND
The City Charter requires that a public hearing be held prior to adoption of the budget, the proposed levy of the Municipal Services Special Tax, and the proposed levy for the Special Municipal Sewer Tax. This is the first of two scheduled public hearings, with the second hearing to be held on June 20, 2023.
DISCUSSION
GENERAL FUND REVENUES
The City is projecting General Fund revenues in 2023-24 of $37,928,132 compared to the current 2022-23 projection of $35,651,366. Revenue by category is shown in the table on the following page.
The major sources of revenue in each category are as follows:
Property Related Taxes
Property-related taxes are the City’s primary revenue source and account for $25,883,000 or 68% of General Fund revenues. This amount is a decrease of $263,000 over the 2022-23 projected actual.
The 2023-24 Proposed Budget consists of:
• Property Tax revenues, which consists of tax on secured and unsecured property, is budgeted at $18,110,000, an increase of $899,000 or 5.2% as compared to the 2022-23 projection. The increase is due to the following:
o The average sales price of a home reached a record high of $3.2 million, which increased the assessed valuation of those homes approximately 117%. o Properties not subject to an assessment step-up via a change of ownership increased the maximum of 2.0%.
• Parcel Tax revenue, based on the ballot measure approved by 83% of voters in March 2020, is estimated at $2,622,000, an increase of $100,000 or 4.0% over the 2022-23 projection. The tax was approved for four years, and future annual increases are limited to the lower of CPI or 4%.
• Property Tax in lieu of Motor Vehicle License Fee (MVLF) \ Homeowners Tax Relief is budgeted at $1,751,000, a 5.3% increase over the prior year. o In 2004, the State Legislature permanently reduced the MVLF rate from two percent to 0.65 percent and compensated cities and counties for their revenue loss Agenda Report Page 2
with a like amount of property taxes, dollar-for-dollar. Typically, the annual change in this tax corresponds with the change in property tax. • Real Property Transfer Tax revenue is budgeted at $3,400,000. Staff is budgeting this cautiously as the current trend of rising interest rates and high inflation has weakened the real estate market. Transfer tax receipts since January of 2023 are the lowest observed in the last ten years.
Below is a table which summarizes the volatility of the housing market over the last several years (FY 2022-23 is estimated).
Annual Statistics Related to Real Property Transfer Tax Revenue Recreation Related Revenue
Recreation related revenue consists of revenues generated from recreation programs and facility rentals and is budgeted at $3,491,500 in 2023-24, an increase of $223,200 from the prior year.
The major components are:
• Recreation Programs – Revenue is budgeted at $2,390,500, an increase of $97,200, or 4%, over FY 2022-23 projection. Recreation program revenue has returned to a normal state after being severely impacted by cancelled programs and reduced capacity in varying degrees during the COVID-19 pandemic. The FY 2023-24 budget assumes recreation programs will not be affected by COVID-19.
Agenda Report Page 3
• Pre-School Program Revenue is budgeted at $537,000, an increase of approximately $67,000, a 14% increase over FY 2022-23 projection. FY 2022-23 is projected to be 20% below budget as participant withdrawals caused by class location changes due to the new pool construction weakened revenue. Next school year’s programs are currently at full class size and staff expects this to continue throughout FY 2023-24.
Facility Rentals – Staff has budgeted $564,000 for FY 2023-24 which is $59,000 higher than the FY 2022-23 projection. Included in the proposed budget is $36,000 in rentals for 801 Magnolia Avenue.
Utility User Taxes & Franchise Fees
Utility User Taxes are taxes collected from residents for the use of electric, gas, water, and telephone. Franchise Fees are contractual obligations collected from PG&E, Republic Services, and Comcast for the right to operate in the City.
• Utility User Taxes are budgeted at $1,415,000 which is 5% higher than the current year projection. The increase is due to expected rate hikes by PG&E. • Franchise Fees are budgeted at $607,000 slightly higher than the current year projection of $588,000.
Revenue from Other Agencies
Revenues from Other Agencies is budgeted at $2,822,232, an increase of $2,168,275 from the FY 2022-23 projection. The bulk of the increase is due to the American Rescue Plan Act (ARPA) funds which are recognized as revenue when used ($1.8 million) and $225,000 for LEAP and SB2 grants.
Building Permits and Planning Fees
This category consists of the following construction related activities: Building Permits, Planning Fees, Plan Check Fees, General Plan Maintenance Fee, and Records Management Fees.
Proposed Revenue for FY 2023-24 is $1,851,000 compared to a projection of $1,792,425 for the current fiscal year primarily due to proposed fee increases. The proposal is to increase fees consistent with the rise in the Consumer Price Index, and a supplemental increase in the General Plan Maintenance Fee to help offset increased costs due to the 6th Cycle Housing Element. • This category continues to increase as the construction & remodel market has exceeded all expectations. FY 2021-22 was a record year, increasing 12% over the prior year. Staff had budgeted conservatively expecting a slowdown, but the strength has continued into FY 2022-23 and staff is projecting to exceed the annual budget by $300,000 (22%).
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Business and Sales Taxes
Business taxes consist of Business License and Real Estate Rental taxes. Business Licenses were relatively stable over the past several years until FY 2021-22 jumped 18%, and FY 2022-23 is tracking to the same level. Rental taxes were increasing approximately 6% per year until leveling off in FY 2020-21. Sales taxes have hovered around $250,000 for the past three years.
Staff is estimating $941,000 in revenues, an increase of $26,000 or 3%, from the current year for this category.
Other Revenue
The major components of Other Revenue consist of these miscellaneous items: Ambulance Service Charges, Lease Revenue, Reimbursable Services, Interest and Unrealized Investment Results, and other miscellaneous receipts.
Staff is budgeting $917,400 for FY 2023-24 compared to a projection of $937,684 in the current fiscal year, a decrease of $20,284. The primary reason for the variance is FY 2022-23 included an insurance claim received for the Guilford Steps Project and monies received from Republic Services per contract for a performance audit which will not be repeated, offset by higher than expected interest receipts.
GENERAL FUND EXPENDITURES
The City is budgeting $36,696,629 in General Fund expenditures, an increase of 11% from last years projected expenditures. In developing the Proposed Budget, the City continues efforts to control and contain operating costs in all departments. The following is a summary by cost categories.
General Fund Budget by Expenditure Category
Agenda Report Page 5
Personnel Costs
Personnel related costs, which include salaries & wages, benefits, and retirement costs, are the largest overall expenditure in the General Fund at $23,203,987, which is $1,530,725 (7%) higher than the prior year projection. Such costs make up 63% of the total 2023-24 General Fund budget.
The tables below summarize projected personnel costs by department and by type:
Personnel Budget by Department
Personnel Budget by Type
Agenda Report Page 6
In FY 2021-22 the City entered into four-year labor agreements with all City employees including its four unions, as well as all unrepresented employees. With the goal of containing costs and setting total employee compensation to within -3 % of the median of Piedmont’s comparator cities, the City agreed to the following major terms:
• Salary increases in each of the next four years as follows: 3%, 3%, 3.25% 3.25%. • Continue medical benefit cost sharing but reset base to FY 2020-21 level. • Freeze employee cost sharing percentage for CalPERS at FY 2020-21 levels.
Salaries expense for FY 2023-24 is budgeted at $15,975,319 which is a 6% increase compared to the FY 2022-23 projection. The increase is due to the following:
• 3.25% across the board wage increase per labor agreements. • One temporary part-time position in Administration to lead specific records management projects, including digitization of resident’s property files. • One new part-time position in Public Works, Facilities Manager. • Five part time employees in Planning and Building to assist in clearing the backlog of building permits. Assumes employees are needed for nine months. • Assumption of full staffing.
In addition, as compared to the prior year projection (FY 2022-23), the most significant changes in personnel costs are as follows:
• Health Insurance – The proposed budget reflects an increase of $283,556 over last year.
The increase is primarily due to an assumed 6.0% increase in premium rates and the assumption of full staffing.
• Retirement - Employee retirement costs are projected to increase $239,426 over last year.
In FY 2018-19 CalPERS began phasing in the lowering of its discount rate from 7.5% to
7.0%. The full impact of this phase in will be completed in FY 2024-25.
In FY 2020-21, CalPERS experienced a very favorable investment return of 21.3%. The large gain triggered the CalPERS Risk Mitigation Policy which lowered the discount rate to 6.8%.
Then in FY 2021-22, the CalPERS portfolio lost 6.1%. These events will result in a lower Unfunded Accrued Liability (UAL) payment only in FY 2023-24, but higher Normal Cost going forward.
In FY 2023-24, staff is projecting that the Normal Cost, net of employee cost share, will increase by 24%, from $1,364,329 (9.0% of salaries) in FY 2022-23 to $1,698,171 (10.6% of salaries) in FY 2023-24. The Unfunded Liability Payment will decline 4% to $2,496,147.
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• Unfunded liability payments are projected to increase at an average rate of 9% for the next 8 years, then begin to flatten out.
• Normal Cost is projected to increase at the same rate as payroll expense after this year’s jump, which was due to the risk mitigation strategy being triggered. • The Cost Share offset will continue to decline as CalPERS Tier One employees retire.
Maintenance and Operations
Maintenance and Operations costs are budgeted at $9,395,171, amounting to 26% of the FY 2023-24 General Fund budget and an increase of $1,542,808 when compared to the FY 2022-23 projection.
This category includes the following major expenses:
• Employee related – Conferences, travel, training, and memberships • Supplies – Department supplies
• Equipment – Vehicle maintenance and repair, fuel, and rentals • Contract Services – Third party recreational activity providers, legal, consulting, crossing guards
• IT related – Computer Courage contract, Software licenses and Strategic Planning • Other – Public Works services (including street patching, landscaping, and tree pruning) • Utilities
The information on the following pages summarizes maintenance and operations costs by department.
Agenda Report Page 8
Operations and Maintenance Budget by Department
The most significant increases in Maintenance and Operations costs in the FY 2023-24 Proposed Budget as compared to the FY 2022-23 projection are as follows:
• Planning and Building – Staff is budgeting an increase of $1,088,592. This increase consists of the following:
o Approximately $700,000 of unspent FY 2022-2023 funds primarily related to Housing Element related consulting costs in addition to records management projects
o Moraga Canyon Specific Plan ($400,000)
• Administration – Expenses are projected to be $145,950 (8%) higher year over year. The increase is primarily due to:
o IT related expenses – Increase in software costs (+$70,000) primarily due to Cyber Security Services and Microsoft licensing; and Computer Courage staffing (+$27,000).
o Diversity, Equity, Inclusion (+$25,000)
o Election expenses (+$20,000)
• Fire – Staff is projecting an increase of $115,388 over last year primarily due to costs associated with vacant positions being filled (Academy tuition, increased training, turnouts, and supplies).
• Police – Staff is projecting an increase of $98,087 over last year primarily due to internet costs associated with the public safety camera project, increased animal shelter costs, and costs associated with the new Officer Wellness Grant.
A request for two full time dispatchers is under consideration that aims to configure resources in a manner that accomplishes a minimum staffing level of two employees during a greater Agenda Report Page 9
percentage of the 24 hour staffing cycle. Staff’s recommendation is to hire one full time Dispatcher using the State of California Citizens’ Option for Public Safety Program funding source in FY 23-24 and a second full time Dispatcher in FY 24-25 using the same funding source.
Non Departmental
• Insurance costs, which include General Liability and Workers Compensation, comprise $2,472,000 and present a $167,000 increase from the estimated 2022-23 expense. The increase is primarily due to higher General Liability premiums caused by overall actuarial adjustments to the risk pool and increased payroll. In FY 2022-23, the City increased its General Liability self-insured retention from $10,000 to $25,000 per claim, which reduced the premium increase from 20% to 15% year over year. Workers Compensation costs are projected to remain the same as higher premiums are expected to be offset by lower claims.
• Retiree Medical Premiums - Premiums are budgeted at $1,025,000 compared to $900,000 last year. The increase is due to seven retirements in 2022-23, a 6% budgeted increase in premium costs, and an estimated four retirements in FY 2023-24. • Library Services – $350,471 is budgeted as a contribution to the City of Oakland, unchanged from prior years.
GENERAL FUND BALANCE
The 2023-24 Proposed Budget projects an Operating Net Income of approximately $2,162,000.
Capital transfers are proposed for essential capital needs as follows:
• $2,184,000 - Capital Improvements (ARPA & Prop 68 Funds) • $1,500,000 - Facilities Maintenance, including sidewalk replacement\repair After these transfers, the General Fund ending balance will be approximately $6.1 million, or 17% of Operating Expenses. No further transfers are recommended at this time as the City’s goal is to maintain a General Fund reserve of +/- 18% of Operating Expenses.
Agenda Report Page 10
OTHER FUNDS
In addition to the General Fund, the City maintains several major funds to provide for the longterm capital needs of the organization.
Recreation Department \ Schoolmates \ Aquatics
While the Recreation Department is a component of the General Fund, two programs under its purview, Schoolmates and Aquatics, are accounted for in separate funds. Below is a recap of the proposed 2023-24 budget and actual results from the prior four years.
Staff has historically targeted the Recreation Department to be cost neutral. Staff is projecting 97% total department cost recovery in FY 2022-2023 and proposing 97% for FY 2023-2024.
This is after historic pandemic lows of 47% and 73% in FY 2019-20 and FY 2020-21 respectively, which then recovered to 96% in FY 2021-2022.
Agenda Report Page 11
Recreation Department Staffing Adjustments:
• Reclassify the Assistant Childcare Program Coordinator position to a Recreation Coordinator position to reflect the additional administrative responsibility of the position.
In 2022-23, staff is projecting Schoolmates cost recovery to be 190% and proposing a budget of 88% for FY 2023-2024. This cost recovery figure for FY 2023-2024 is well above the target due to the delay of Schoolmates related maintenance and capital projects. Maintenance and Capital projects are budgeted at $177,000 for FY 2023-2024.
Staff is recommending the following staffing changes:
• Schoolmates Site Leads (2) and Assistant Site Leads (4) will remain part-time positions but will work more than 1,000 hours in a fiscal year. As a result, the staff will be enrolled in CalPERS, will be eligible to enroll in the City’s medical insurance plan and be offered the PEMHCA minimum payment for medical benefits as required by law. Site Coordinators (2) will remain part-time, will be enrolled in CalPERS, and will receive full medical benefits. The goal of the additional part-time positions is to establish four core staff positions at each Schoolmates site and two core staff at each Mini-mates program to provide program stability, staff the opportunity to work more hours and access to medical benefits to aide in staff retention.
Aquatics Fund – Staff is planning for a summer 2024 opening. The budget is consistent with the operational analysis prepared by the Isaac Sports Group and presented to City Council December 2022. Included in the Proposed Budget are the following expenses:
• Aquatics Supervisor - hired 8 months prior to opening. • Aquatics Coordinator - hired 4 months prior to opening. • Maintenance Technician (Part-Time) - hired 2 months prior to opening. • Lifeguards – Training.
• Operating expenses - $71,850, of which $40,000 is for site furnishings.
The residual balance in the Aquatics fund plus a General Fund subsidy of $150,000 is proposed to cover these startup costs.
Street Infrastructure Maintenance & Replacement
The City’s FY 2023-24 budget for street infrastructure maintenance and replacement, including sidewalk repair, is $1.6 million. Funding sources include Gas Tax, SB1, Measure BB, and Measure F. These sources are funded by Sales and Gasoline taxes. The budget is based on estimates received from the County. The majority of available funding is dedicated to street resurfacing, with the balance dedicated to important sub-categories such as the implementation of projects prioritized by the approved Pedestrian & Bicycle Master Plan, and those related to the Complete Streets program.
The PCI (Pavement Condition Index) for the streets within the City of Piedmont is currently 63.
This is down from the 65 reported last year and 67 reported in 2019.
This keeps the City’s overall average within the “Good” range.
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In order to maintain a PCI of 67 over the next 5 years, approximately $1.5 million in funding for maintenance and repairs would be needed annually. To increase the PCI to 72 over the next 5 years, approximately $2.2 million in funding for maintenance and repairs would be needed annually.
Piedmont’s sidewalks are increasingly in disrepair. It is especially important to repair sidewalks as soon as possible to reduce the liability associated with accidents caused by unsafe sidewalks.
Staff has proposed a budget of $700,00 for sidewalk repair and replacement, which will be funded from the Facilities Maintenance Fund.
The City currently does not have the tools to adequately track the required maintenance of sidewalks. Staff has included in the IT plan over the next two years, funds for the purchase and implementation of a software program to satisfy this and other maintenance related needs.
Below is a recap of the proposed 2022-23 budget and the prior three years of activity within the street related funds.
Agenda Report Page 13
Facilities Maintenance Fund
The City Council established the Facilities Maintenance Fund in 2013 to provide a long-term plan for addressing City-owned facilities. In 2014, responsibility for facilities was transferred from the Recreation Department to the Public Works Department. Since that time, staff has been working to develop a thorough and well-documented plan that addresses deferred maintenance, ongoing maintenance and repair, and, importantly, the desire to build reserves to address longterm, life-cycle maintenance and replacement costs. The plan will continue to evolve and improve as staff closely monitors City needs.
In 2019-20, staff removed janitorial type expenses from this fund and are now accounting for them in the General Fund. Further, to better identify and quantify long term capital needs as opposed to ongoing maintenance costs, beginning in FY 2022-23 staff split this fund into two separate funds:
• Facilities Maintenance Fund (111) – Repairs and maintenance, scheduled maintenance, and sidewalk replacement\repair is funded annually by transfers from the General and Schoolmates Funds based on need.
• Facilities Capital Projects (112) – Capital projects for all City facilities including parks.
Funding is determined each year based on budget surplus, if any.
Agenda Report Page 14
The following schedule summarizes the current Facilities Maintenance Fund plan. It is a roll up of scheduled maintenance and estimated repairs and maintenance for each City facility, as well as sidewalk replacement\repair.
The following schedule summarizes the current Facilities Capital Fund plan. It is a roll up of capital projects for all city facilities, including parks. Supporting schedules which details each project are included in the Facility Maintenance plan documents. 2022-23 2023-24 2024-25 2025-26 2026-27
FACILITIES MAINTENANCE
Beginning Balance $ 347,583 $ 407,809 $ 264,309 $ 192,909 $ 261,064 General Fund Subsidy $ 1,300,000 $ 1,500,000 $ 1,600,000 $ 1,500,000 $ 1,000,000 Schoolmates Subsidy 66,000 110,000 110,650 34,333 14,906 Contributions \ Other Funding - - - - -
Interest 16,226 19,000 19,000 17,000 13,000
Total Revenue $ 1,382,226 $ 1,629,000 $ 1,729,650 $ 1,551,333 $ 1,027,906 Expenditures:
Sidewalks $ (700,000) $ (700,000) $ (700,000) $ (700,000) $ (500,000) Annual Maintenance (231,000) (231,000) (242,550) (254,678) (264,865) Scheduled Maintenance (391,000) (841,500) (858,500) (528,500) (251,500) Total Expenditures $ (1,322,000) $ (1,772,500) $ (1,801,050) $ (1,483,178) $ (1,016,365) Ending Balance $ 407,809 $ 264,309 $ 192,909 $ 261,064 $ 272,606 City of Piedmont
Five Year Capital Improvement Program
FISCAL YEAR
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The Facilities Capital Fund is estimated to have a Fund balance of approximately $9.1 million as of June 30, 2023. Funding will be primarily from the General and Schoolmates Funds, when available. American Rescue Plan Act (ARPA) funds are being allocated here for use on the Police Dispatch project in accordance with City Council direction with construction to begin later this calendar year.
Annual funding is determined based on available funds in the General Fund after consideration of the needs of the equipment replacement fund, facilities maintenance fund, and a General Fund reserve set aside in the range of +/-18%. Currently, staff is projecting a budget surplus for FY 2022-23 of approximately $1.9 million and is recommending $1.0 million of the surplus be allocated to the Facilities Capital Fund.
The Facilities Capital Fund includes major capital improvements currently being evaluated by the City in the column “FY 2026 & Beyond”. High-level assessments of the Police Department and Fire Department indicate considerable deficiencies in Essential Services Buildings.
Beyond the Essential Services Buildings, City staff anticipates future renovation of the City Hall basement and Recreation Center for accessibility and to address safety issues. Major improvements to Linda Beach and Coaches Field are also being evaluated. The total cost of all Agenda Report Page 16
these projects may be upward of $65 million and is reflected in the column “FY 2026 & Beyond”. Based on ten-year projections for the General Fund, the City does not have adequate funding to complete these projects nor the recreation related conceptual plans developed in recent years.
Equipment Replacement Fund
The Equipment Replacement Fund sets aside funds in anticipation of the orderly replacement of City vehicles, heavy equipment, general equipment, as well as IT infrastructure. A replacement schedule has been developed detailing all equipment including the estimated year of replacement and estimated replacement cost.
The following is the proposed Equipment Replacement expenditures for FY 2023-24 of $2,039,000:
Agenda Report Page 17
Sewer Fund
The Sewer Fund is used to account for costs related to the inspection, maintenance, repair, and replacement of the sanitary sewer system in the City. In July 2014, the City and other East Bay jurisdictions entered into a Consent Decree (CD) mandated by the U.S. Environmental Protection Agency (EPA) which requires the City to complete a rehabilitation of the sewer system and to establish a comprehensive monitoring of system performance. With the CD finalized, and all the mandated improvement measures identified, the City has moved forward with definitive plans to achieve full compliance.
Agenda Report Page 18
To this end, the City Council previously approved loans totaling $800,000 to the Sewer Fund from the Equipment Replacement Fund and the Facilities Maintenance Fund. These loans made the need for increasing the Sewer Tax or Real Property Transfer Tax unnecessary and provided the resources needed to initiate the next phase of required sewer rehabilitation.
With the approval of a low-interest loan by the State Water Resources Control Board (SWRCB), construction of Phase V of the sewer rehabilitation project began in 2017-18 and was completed in the first quarter of FY 2018-19. Thereafter, Phase VI design work began in FY 2018-19 with construction anticipated to begin in FY 23-24. All phases of rehabilitation are projected to be completed over the next decade, ahead of the schedule established under the CD.
A significant benchmark affirming Piedmont’s strategy for compliance to the EPA Consent Decree was reinforced in April of 2018. After the first EPA performance review of all participants, it was determined that Piedmont was complying and would not be assessed any stipulated penalties.
Sewer Fund Recap
In addition to the construction of rehabilitation projects, the Sewer Fund reimburses the General Fund for sewer related expenses charged to the General Fund. Public Works and Finance have refined expense estimates and captured actual costs related to personnel, supplies and services.
Based on the data collected, the proposed transfer for FY 2023-24 is projected at $890,000, an increase of $15,000 over last fiscal year.
Agenda Report Page 19
Pension Rate Stabilization Fund
In 2017-18, the City established a Pension Rate Stabilization Fund. The City partnered with the Public Agency Retirement Services (PARS) to establish a Section 115 Trust. The trust allows for the smoothing of rising pension costs which are expected to more than double over the next ten years. Through the deposit of funds into the Section 115 Trust Program, the City could expect to earn a rate of return greater than what would be attained through the City’s investment with the State of California Local Agency Investment Fund (LAIF). The higher return is made possible because the Section 115 Trust Program is not prohibited by the State law from making purchases of higher yield equities.
In May 2018, the City transferred $2.0 million from the General Fund into the Pension Rate Stabilization Fund with an additional transfer of $750,000 in November 2018. In February 2021, the City engaged actuarial firm Bartel & Associates to refresh the City’s ten-year pension expense projections. The projections increased approximately $3.0 million as compared to the long-range plan. The increase was due to CalPERS lower than expected investment results in FY 2019-20 and the effect of the changes in its amortization policy. Amortization periods for the Unfunded Accrued Liability have been shortened from 30 years to 20 years, which lowers overall liability, but increases annual payments. Due to this change, an additional $1.0 million was transferred to PARS in October 2021.
The City’s long-term plan now indicates that the City may need to draw down on the PARS fund as early as FY 2024-25 to pay annual pension payments and maintain a reasonable General Fund reserve (18%).
MUNICIPAL SERVICES SPECIAL TAX
On March 3, 2020, Piedmont voters approved Measure T (Municipal Services Special Tax), authorizing the City Council to levy a parcel tax for a four-year period beginning with FY 2021-
22. The rate for Fiscal Year 2021-2022 was set by the voters when they passed the tax.
Commencing with FY 2022-23, the rate for Measure T may be adjusted by the lower of 4.0% or the annual percentage change in the Consumer Price Index for all Urban Consumers for San Francisco-Oakland-San Jose, California (December) as published by the United States Department of Labor, Bureau of Labor Statistics. The change in the index for the annual period ending December 2022 was 4.9%. Accordingly, the proposed rate increase for FY 2023-24 is
4.0%. After applying this rate adjustment, the proposed rate was rounded down to the nearest whole dollar for ease of assessment.
Agenda Report Page 20
Municipal Services Special Tax Rate Schedule
SPECIAL MUNICIPAL SEWER TAX
The proposed Sewer Fund budget assumes that revenues increase based on changes in the CPI that are needed to maintain sewer services and rehabilitation of the sewer system. The City Council is authorized (Municipal Code Chapter 20, Section 20E.3) to adjust the rate based upon changes in the Consumer Price Index (CPI) for All Urban Consumers for the San FranciscoOakland-San Jose, California (December) as published by the United States Department of labor, Bureau of Labor Statistics. Based upon the change in this index, the proposed rate adjustment for FY 2023-24 is 4.9%. After applying this rate adjustment, the proposed rate was rounded down to the nearest whole dollar for ease of assessment.
Adopted
Rate
Proposed
Rate
2022-23 2023-24
Single Family Residences
0 to 4,999 $ 573 $ 595
5,000 to 9,999 $ 644 $ 669
10,000 to 14,999 $ 743 $ 772
15,000 to 20,000 $ 849 $ 882
Over 20,000 $ 967 $ 1,005
Commercial Properties
0 to 10,000 $ 967 $ 1,005
Over 10,000 $ 1,450 $ 1,508
Multi-Family Residential: per unit $ 398 $ 413
Dual Jurisdiction Parcels: per unit $ 587 $ 610
Estimated Revenue $ 2,522,000 $ 2,623,000
Agenda Report Page 21
Special Municipal Sewer Tax Rate Schedule
By: Michael Szczech, Finance Director
Adopted Rate Proposed
Rate
2022-23 2023-24
Single Family Residences
0 to 4,999 $ 651 $ 682
5,000 to 9,999 $ 741 $ 777
10,000 to 14,999 $ 855 $ 896
15,000 to 20,000 $ 997 $ 1,045
Over 20,000 $ 1,174 $ 1,231
Commercial Properties
0 to 10,000 $ 1,174 $ 1,231
Over 10,000 $ 1,619 $ 1,698
Multi-Family Residential: per unit $ 542 $ 568
Dual Jurisdiction Parcels: per unit $ 651 $ 682
Estimated Revenue $ 2,919,000 $ 3,062,000
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