City of Sacramento
Racial Equity Committee Report
915 I Street Sacramento, CA 95814
www.cityofsacramento.org
File ID: 2024-01836 10/29/2024 Consent Item 2.
Update on Development and Application of a Budget Equity Tool to Assess Budget Expense Reductions
File ID: 2024-01836
Location: Citywide
Recommendation: Receive and file.
Contact: Aimée Zenzele Barnes, Diversity & Equity Manager, (916) 808-1174, [email protected], Human Resources Department Presenter: Aimée Zenzele Barnes, Diversity & Equity Manager, (916) 808-1174, [email protected], Human Resources Department Attachments:
1-Description/Analysis
2-Budget Equity Tool Fiscal Year (FY) 2025/26 (BET)
Description/Analysis
Issue Detail: During the fiscal year (FY) 2024/25 Budget development process, the Racial Equity Committee (Committee) directed the Office of Diversity & Equity (ODE) and City Manager’s Office (CMO) to develop a tool to analyze the equity impacts of City budget decisions. ODE developed and the City has utilized the Budget Equity Resource Guide and Tool (BERG/T). The BERG/T utilized the framework and principles articulated in the April 2021 Cutting the Operating Budget and Instituting an Equitable Decision-Marking Report, and is a decision support tool to assist in evaluating the local and geographic impacts of potential budget reductions. The BERG/T utilizes data to identify unintentional adverse impacts on underserved groups or neighborhoods. During the FY2024/25 budget process, the BERG/T was applied to portions of the Fire Department, Office of Innovation & Economic Development, and Department of Convention & Cultural Services budget reductions.
Background Fiscal Year (FY) 2024/25 Budget Balancing Strategies In February 2024, the City released its updated financial forecast which projected a $66 million budget deficit for FY2024/25 with deficits increasing annually throughout the forecast period. The forecast assumed continued economic growth and revealed a fundamental imbalance in the City’s budget with expenses outpacing revenues. This imbalance is known as a structural deficit. The City’s
File ID: 2024-01836 10/29/2024 Consent Item 2.
strategy for addressing the structural deficit was to take a strategic approach to revenue increases and expenditure reductions instead of pursuing across-the-board cuts.
To balance the FY2024/25 Budget and address projected deficits in subsequent years, departments under the purview of the City Manager were instructed to submit reduction plans that totaled 15% of their G/MU discretionary funding and were given a framework designed to protect core services and Council priorities. Departmental reduction strategies were categorized on a one through four scale based on impact to residents and communities, with one being a low impact and four resulting in a severe impact.
In addition, staff analyzed “citywide” strategies to identify previously allocated funding for projects and citywide programs that could be redirected for budget balancing. Overall, staff identified 276 one-time and ongoing revenue-enhancement and expenditure-reduction strategies totaling more than $130 million in savings. A description of each reduction strategy can be found in the City’s FY2024/25 Approved Budget.
As part of the budget development process, City staff conducted a community survey to receive input on public budget priorities and held three community meetings across the City to inform the public of the City’s budget deficit, answer questions, and receive feedback. From February 27, 2024, through March 24, 2024, a nine-question survey regarding budget priorities and potential reduction strategies was open to the public via the City’s website. The survey was translated into five languages (Spanish, Hmong, Vietnamese, Chinese and Dari). The survey results were presented at the Budget & Audit Committee Meeting on April 9, 2024.
The City utilized a combination of one-time and ongoing strategies to balance the FY2024/25 Budget but is projecting deficits in FY2025/26 and beyond, as the structural deficit was not fully resolved.
Budgeting for Racial Equity - FY2025/26 Process Update
Throughout the FY2024/25 budget development process, the CMO and ODE supported and provided guidance to the Fire Department, Office of Innovation & Economic Development, and the Department of Convention & Cultural Services implementing the BERG/T to provide an equity analysis of proposed budget reductions. At the April 30, 2024, Committee meeting and the May 14, 2024, City Council Meeting, City staff presented and provided information on the application of the BERG/T, how the analysis had informed their understanding of the local and geographic impacts of potential budget reductions, and recommendations for future application including the application of the tool earlier in the budget development process.
On April 30, 2024, the Committee provided direction to City staff to develop a timeline/work plan on expanding equity analysis into the review of budget proposals over the next three to five years. CMO and ODE are seeking to build on the successes in incorporating an equity analysis into the budget process that was launched last year, while improving the analysis tool based on lessons learned and
File ID: 2024-01836 10/29/2024 Consent Item 2.
Council feedback. CMO and ODE are also expanding the use of an equity analysis tool to additional areas of the budget - phasing in additional departments annually over the next three to five years.
To those ends, CMO and ODE have engaged the Department of Finance prior to the beginning of the FY2025/26 Budget development process and have accomplished the following:
· Reviewed and drafted a revised Budget Equity Tool (BET) from the BERG/T based on feedback from departments that had utilized the initial tool. · Reviewed and drafted the BET Instructions and Guide.
· Updated IT infrastructure to support use of the BET.
· Scheduled capacity building trainings for department staff.
CMO and ODE are also engaging with departments to assess additional departments to utilize the tool.
Policy Considerations: This report is consistent with the Committee’s direction to keep informed on the expansion of the application of a racial equity lens on the discrete parts of the FY2025/26 budget.
Economic Impacts: Not applicable.
Environmental Considerations: Not applicable.
Sustainability: Not applicable.
Commission/Committee Action: Not applicable.
Rationale for Recommendation: Not applicable.
Financial Considerations: The BET will be used to inform the FY2025/26 Proposed Budget.
Local Business Enterprise (LBE): No goods or services are being purchased under this report.
1 BUDGET EQUITY TOOL (BET) FY 2025-2026
Section 1: Goal Setting, Budget Classification, & Project Outcomes To get started, identify goals and project outcomes of the service or project being reduced or cut. Consider explaining how the service or project connects to the City’s goals and helps to define the potential reduction/cut’s impact on different communities.
Purpose of Budget Reductions
1. Is this reduction tied to other BCPs? If so, which ones? If grouped, please share which BCPs (tie to BCP numbers) and why they are grouped together.
2. What are/were the desired program or service outcomes?
3. How did you approach the equity analysis?
2 Section 2: Service Impacts
A spending cut could reduce the quality and quantity of service that the City delivers. Collecting data allows to identify synergies with existing work and unearth opportunities to reduce the perpetuation of historical and present injustice faced by certain communities. Explore the potential impacts of spending cuts by identifying demographics of community members.
What is the potential for reduced access to services? Will the quality be measurably lower? Ex: This includes fewer places to receive service, fewer hours of service delivered, fewer employees to provide a service or longer response times existing programs or policies are working to achieve the same outcomes of this project?
Impacts By Demographics
Identify the demographics of residents who may be impacted by the service or program reduction.
Race/Ethnicity
☐ Asian
☐ Black or African American
☐ Filipino
☐ Hispanic or Latino/a/e/x
☐ Middle Eastern or North African
☐ Native American or Alaska Native
☐ Native Hawaiian or other Pacific Islander
☐ White
☐ Other:
☐ All
☐ No impact in this area
Level of Vulnerability (based on
Sacramento County Social Vulnerability
Index)
Percentile ranking values range from 0 to 1, with
higher values indicating greater vulnerability.
☐ 0.00-0.24
☐ 0.25-0.49
☐ 0.50-0.74
☐ 0.75-1.00
Other Indicators
☐
3 Section 3: Location Impacts
This section is designed to help understand the geographic character of budget cuts and their potential impacts on vulnerable and already underserved neighborhoods and communities.
Utilize the Sacramento Equity Explore Design GIS Tool to help identify.
Location Impacts Please check those that apply. Please be sure to describe each geographic character
☐ Citywide – Programs or services that are “geography neutral” usually pose the least risk to equity but could still serve a vulnerable population.
☐ Central Location - Programs or services delivered at locations distributed throughout the city with a service population local to the site.
☐ Mobile Program or Service - These are services where the staff are mobile.
List any specific geographic areas the program or service impacts below.
Examples: Districts, Opportunity/Promise Zones, Neighborhoods, Service Districts
4 Program or Service Geography: Citywide
Services that are “geography neutral” usually pose the least risk to equity but could still serve a vulnerable population.
If this is a program or service provided to the entire city with little variance by neighborhood, could vulnerable populations be hurt by the cut?
Program or Service from a Central Location
These are programs or services delivered at locations distributed throughout the city with a service population local to the site. Program examples include community and recreations centers, public parks, fire stations. Service examples include building permits and licensing. If the program or service is delivered from a central location and available to the community at- large, but is more commonly used by specific segments of the community, are those segments a vulnerable population? Would a decreased level of service adversely impact any of the equity considerations from our definition of equity?
5 Mobile Program or Service
These are services where the staff are mobile. Examples include EMS units, code enforcement, road patching crews, and litter abatement teams. Cuts in these services could also pose greater risks of inequitable impact.
If this is a mobile program or service that serves a specific community or specific neighborhoods, are those neighborhoods vulnerable?