June 4, 2024
Finance Department
DATE: June 4, 2024
TO: Mayor Martinez and Members of the City Council
FROM:
Shasa Curl, City Manager
Nickie Mastay, Deputy City Manager – Internal Services
Andrea Miller, Director of Finance
Mubeen Qader, Deputy Director of Finance
Antonio Banuelos, Accounting Manager
Subject:
Update Guiding Fiscal Policy and Purchasing Policy
FINANCIAL IMPACT: Adoption of updates to the Guiding Fiscal Policy and Purchasing Policy will not have a financial impact.
PREVIOUS COUNCIL
ACTION:
July 1, 2020
March 2, 2021
April 20, 2021
STATEMENT OF THE
ISSUE:
City Staff is requesting that the City Council review and adopt the updates to the Guiding Fiscal Policy and
Purchasing Policy. On April 20, 2021, the City Council approved the Guiding Fiscal Policies. Updates to the
Guiding Fiscal Policy are reflected in Section E,
Documentary Transfer Tax. The Purchasing Policy
(Administrative Manual, Policy Number: AP 522) was
revised on July 1, 2020. The Update to the Purchasing
Policy reflects the requirement for start and end dates for all contracts, adding terms for multi-year contracts, and to reflect procurement code Section 2.52.370.
AGENDA
REPORT
June 4, 2024
RECOMMENDED ACTION:
REVIEW and ADOPT updates to the Guiding Fiscal
Policy and Purchasing Policy – Finance Department
(Shasa Curl/ Nickie Mastay 510-620-6609/ Andrea Miller
510-620-6790/ Mubeen Qader 510-412-2077/ Antonio
Banuelos 510-620-6741).
DISCUSSION:
On April 20, 2021, the City Council approved the Guiding Fiscal Policies. The update to the Guiding Fiscal Policy is reflected in Section E, Documentary Transfer Tax. This section currently states:
The City will establish a baseline estimate of what portion of the Documentary Transfer Tax is considered recurring by calculating the mean monthly amount collected since the increase to the rate was approved by voters in 2018. The average amount of tax collected from this source will be recalculated in June and January every year to incorporate new data and the new average will be adopted as the baseline amount budgeted each year. Any excess tax collected through this source-amounts collected above the baseline-may be considered non-recurring revenue in that year and the City Council will prioritize how these funds are spent. The Council will prioritize and consider using recurring revenue to address recurring expenditures before non-recurring revenue sources are used to fund recurring expenditures.
Any amount collected since 2018 that is over $10,000,000 will skew the mean/average calculation upward, resulting in an overstatement of the baseline amount budgeted each year. To remedy this, Staff is proposing the following update to the Guiding Fiscal Policy, Section E:
The City will establish a baseline estimate of what portion of the Documentary Transfer Tax is considered recurring by calculating the mean monthly amount collected since the increase to the rate was approved by voters in 2018 excluding any transaction with a valuation over $10,000,000. The average amount of tax collected from this source will be recalculated in April June and January every of each year to incorporate new data and the new average will be adopted as the baseline amount budgeted for the new fiscal each year. This amount will be recalculated in January and adjustments will be included with the midyear budget update to City Council. Any excess tax collected through this source-amounts collected above the baseline-may be considered non- recurring revenue in that year and the City Council will prioritize how these funds are spent. The Council should will prioritize and consider using recurring revenue to address recurring expenditures. BeforeNon-recurring revenue sources should not be areused to fund recurring expenditures.
June 4, 2024
Additional edits were made in the following sections:
II. A. C. D.
III. F.
IV. B. C.
V. C.
VI. B.
IX. A. 3.
The Purchasing Policy (Administrative Manual, Policy Number: AP 522) was revised on July 1, 2020. The Update to the Purchasing Policy reflects the requirement for start and end dates for all contracts, adding term for multi-year contracts, and to reflect procurement code Section 2.52.370
DOCUMENTS ATTACHED:
Attachment 1 – Guiding Fiscal Policy
Attachment 2 – Purchasing Policy (Administrative Manual, Policy Number: AP522)