“The Salinas Plan”
Refresh
Presentation to the City Council
March 21, 2023
The Salinas Plan Refresh
Overview
▪ Review and “refresh” of 2018 The Salinas Plan
▪ Status of TSP recommendations – What has been completed, in -progress, and what has been rejected as feasible
▪ Addition of updated/new recommendations reflecting current economic and service challenges faced by the City
Process
▪ Updated budget forecast model
▪ Review of current departmental plans and studies
▪ Interviews with department leaders and line -staff
▪ Review of updated historical metrics – budget, services, service results RBConsulting
2 Status of The Salinas Plan (TSP)
▪ The City has been working
diligently on implementing the TSP
2018 Recommendations
▪ Over 1/3 of the original
recommendations have been
implemented or rejected
▪ The remaining recommendations
are in progress or recommended to
remain as active
RBConsulting
3 0
2 4
6 8
10 12
Implemented In Progress Continued Rejected New (Tent.)
Status of The Salinas Plan Initiatives
Revenues & Expenses
RBConsulting
4 Recent General Government Revenues
RBConsulting
5 Property Taxes,
35,792,585,
25%
Sales Tax
86,839,000
60%
Utility Taxes
11,900,000
8%
Transient
Occupancy
Tax
3,500,000
3%
Business
License
Tax
5,700,000
4%
General Fund Tax Revenue
by Type
Property Taxes Sales Tax Utility Taxes
Transient Occupancy Tax Business License Tax
▪ General Government revenues grew 4.6%
per year from FY17-FY22, led by sales taxes
at 5.6% per year
Property Taxes
Sales Tax
Utility Taxes
Other Taxes
Franchise Fees
Charges for Service
Transfers
Other
0 20,000,000
40,000,000
60,000,000
80,000,000
100,000,000
120,000,000
140,000,000
160,000,000
180,000,000
FY17 FY18 FY19 FY20 FY21 FY22
City of Salinas General Government Revenues
Actual FY17-FY22
General Government Expenses
General Government Salaries grew at 1.7%
per year since FY17-FY22, led by lower FTEs,
limited wage increases
Total General Government expenses
grew 4.7% per year (FY17-FY23), led by
Transfers and Benefits
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6CAGR = Compound Annual Growth Rate
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%
0 10,000,000
20,000,000
30,000,000
40,000,000
50,000,000
60,000,000
70,000,000
FY17
Actual
FY18
Actual
FY19
Actual
FY20
Actual
FY21
Actual
FY22
Actual
Wage & Benefit Growth
FY17-FY22
Salaries Overtime Wage CAGR (FY17-22) OT CAGR (FY17-FY22) 0 20,000,000
40,000,000
60,000,000
80,000,000
100,000,000
120,000,000
140,000,000
160,000,000
FY17
Actual
FY18
Actual
FY19
Actual
FY20
Actual
FY21
Actual
FY22
Actual
Expenses by Category
FY17 to FY22
Salaries Overtime Benefits Outside Services
Other Charges Other Expenditures Transfers
Change in FTE
FY09 To FY23
No Recovery from Great Recession
0 100
200
300
400
500
600
700
FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 General Operations FTE
FY09 to FY23
Public Safety Other Total
FY18 to FY23
Limited Investment in New Staff
546.4
543.7 545.9 540.7 529.9
559.0
0 100
200
300
400
500
600
FY18 FY19 FY20 FY21 FY22 FY23
Staffing By Department
FY18-FY23
Police Fire Public Works Community Services CDD Administrative RBConsulting 7
Budget Forecast
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8 Baseline Forecast Net GF Revenue
▪ Needs to increase wages, add staff, maintain infrastructure and invest in new projects could upend this fragile balance even with an extended Measure G RBConsulting
9 ($40,000,000)
($30,000,000)
($20,000,000)
($10,000,000)
$0
$10,000,000
$20,000,000
$30,000,000
FY22 FY23 FY24 FY25 FY26 FY27 FY28 FY29 FY30 FY31 FY32
City of Salinas Baseline
General Government Budget Forecast
General Fund Measure E Measure G
Measure G to Sunset on
April 1, 2030
Alternative Forecasts | General Gov’t
▪ Alt. 1 – Measure G extended +
salaries up add’l 1% per year *
▪ Alt. 2 – Alt. 1 + 10% revenue set-
aside for capital funding **
▪ Alt. 3 – Alt. 2 + Property and Sales
Tax add’l 1% per year
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10* Includes both wage increases and additional hiring ** Total funding, including current expecting CIP funding ($5,000,000)
$0
$5,000,000
$10,000,000
$15,000,000
$20,000,000
FY22 FY23 FY24 FY25 FY26 FY27 FY28 FY29 FY30 FY31 FY32
Alternative No. 1 Net Revenue
Extend Measure G & Inc. Salaries + 1%
($10,000,000)
($5,000,000)
$0
$5,000,000
$10,000,000
$15,000,000
$20,000,000
FY22 FY23 FY24 FY25 FY26 FY27 FY28 FY29 FY30 FY31 FY32
Alternative No. 2 Net Revenue
Alt No. 1. + Fund Capital at 10% of Net Revenue
($10,000,000)
($5,000,000)
$0
$5,000,000
$10,000,000
$15,000,000
$20,000,000
FY22 FY23 FY24 FY25 FY26 FY27 FY28 FY29 FY30 FY31 FY32
Alternative No. 3 Net Revenue
Alt No. 2 + Property Tax and Sales Tax Add'l 1% Growth
General Fund
A Future of
Trade Offs
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11 Recommendation Groupings
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12 Managing the
Organization
City Facilities
&
Infrastructure
Housing
Investments
for a healthy
City
Coming Issues
▪ Measure G Sunset in April 2030
▪ Expanding fire to new growth areas
▪ Staffing – FTEs and pay has been stagnant. Define the needs in each along with funding consequences
▪ Deferred Maintenance – Creating budget space to address No estimate of the breadth and cost across the City
PW identified roads, storm drainage, and utility systems with major (cost unknown) deferred maint. No estimate on buildings, but implementing an asset management program More investment in IT
Fire indicated deferred maintenance on fire stations and apparatus ▪ Continued community investment
▪ Funding Reserves
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13 Measure G
▪ The Measure G sunset looms large for the City
▪ If not extended, the City will lose over $32 million in total funding annually RBConsulting
14 Measure G Supported FTE
Function FTE
Police & Fire 41.50
Public Works 36.30
Recreation 13.00
Code Enforcement 10.00
Youth Services 3.00
Support 7.00
CDD 1.10
Total FTE 111.90
Significant Capital Investment
▪ Over $530 million in road, parks, new
development, and IT needs identified in
recent studies
New development impacts include Borondo Road
and new Fire Station
▪ Deferred maintenance for buildings is
not currently known but will be calculated
using a new asset management program.
Need will likely be significant
RBConsulting
15 $0
$50,000,000
$100,000,000
$150,000,000
$200,000,000
$250,000,000
$300,000,000
$350,000,000
$400,000,000
$450,000,000
Road Maintenance Parks Master Plan IT Master Plan New Development Identified Funding Needs
for Select Funds
Maintain
current 56
PCI*
Reach 75
PCI
PCI = Pavement Condition Index. A PCI of 55 is “fair” and 75 is “good”. Current funding levels will drop the City’s PCI to 48, or “poor”
Salinas has significant
unfunded capital and
maintenance needs
Additional Needs to Consider
▪ Capital Investments (~$500 Million)
▪ Deferred maintenance (amount
unknown)
▪ Investments in Sherwood Hall and
other City facilities
▪ Housing and Homelessness programs
▪ Employee compensation study
implementation
▪ Fully fund policy reserves
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16 City of Salinas
Reserve Policy Target Vs. Fund Balances -- As of June 30, 2021 Reserve Requirement Target Working Capital
Over/(Under)
Target
General Funds - Unassigned 16,685,000 (16,685,000)
GF Economic Contingency 16,685,000 16,685,000 0
Facility Maintenace 3,154,000 3,154,000 0
Infrastructure Maintenance 7,368,000 3,684,000 (3,684,000) Vehicle Replacement 13,671,000 9,000,000 (4,671,000)
WC Self-Insurance 4 25,337,000 8,800,000 (16,537,000)
General Liability1 4,510,000 (4,510,000)
Retiree Health (OPEB) 3 11,832,000 1,000,000
Debt Service
Total Reserves 99,242,000 42,323,000 (46,087,000)
Pension Trust 2 162,408,690 6,000,000 (156,408,690)
1 From page 4 of Bickmore Actuarial report, October 19, 2022 2 From CalPERS acutarial reports as of June 30, 2021
3 From slide 55 of the Bartel Associates actuarial report, October 31, 2022 4 From page 3 or the October 2022 Worker's Comp. Actuarial 5 From City's Financial Audit for year ended June 30, 2021 Held Separately
Recommendations
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17 Summary of Recommendations
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18 Managing the
Organization
Healthcare Cost Cont.
Improve Base Pay
Workers’ Compensation
Police Civilianization
Improve Budget Process
Multi-Year Financial Planning
Leave Accruals in Comp. Study
Parking Functions
Implement Comp Study
City Facilities &
Infrastructure
Preventive Maint. Program
Fleet Strategy
Eliminate Golf Subsidy
Eliminate Sherwood Hall Deficits
Fund Most Pressing City Needs
Investments for a
Healthy City
Enact Storm Sewer Utility Fee
Increase Hotel Tax
Extend Measure G
Dedicate Savings to Capital
Evaluate GO Bonds for Key Projects
Housing &
Homelessness
Develop Strategic Housing Plan
Establish Housing Trust Fund
Develop Land Strategy
Regulate Rental Housing
Fund Housing Trust Fund
Expand SORT Team
New Recommendations in the Refresh
Managing the Organization
▪ Include leave accruals and cash outs in current compensation study ▪ Evaluate the parking function within the City
▪ Evaluate impact of implementing City’s coming compensation study City Facilities & Infrastructure
▪ Develop an implementation approach to fund capital needs Investments for a Healthy City
▪ Evaluate a General Obligation (“GO”) Bond to Fund Key City Projects Homelessness and Housing
▪ Expand SORT team to include Public Safety members
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19 Questions?
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20