TO: HONORABLE MAYOR AND FROM: Toni J. Taber, CMC
CITY COUNCIL City Clerk
SUBJECT: SEE BELOW DATE: March 8, 2022
SUBJECT: Second Quarter Financial Reports for Fiscal Year 2021-2022
Recommendation
As recommended by the Public Safety, Finance and Strategic Support Committee on February 17, 2022, accept the Second Quarter (period ending December 31, 2021) Financial Reports for Fiscal Year 2021-2022 for the following programs:
(a) Debt Management;
(b) Investment Management;
(c) Revenue Management; and
(d) Purchasing and Risk Management.
CEQA: Not a Project, File No. PP17-009, Staff Reports, Assessments, Annual Reports, and Informational Memos that involve no approvals of any City action. (Finance) [Public Safety, Finance and Strategic Support Committee referral 2/17/2022 - Item (d)2]
COUNCIL AGENDA: 3/15/2022
ITEM: 2.9
FILE NO: 22-302
PSFSS COMMITTEE: 02/17/22
ITEM: (d)2.
TO: PUBLIC SAFETY, FINANCE, AND
STRATEGIC SUPPORT COMMITTEE
FROM: Julia H. Cooper
SUBJECT: SECOND QUARTER FINANCIAL
REPORTS FOR FISCAL YEAR
2021-2022
DATE: February 3, 2022
Approved Date
RECOMMENDATION
(1) Accept the Second Quarter (period ending December 31, 2021) Financial Reports for Fiscal Year 2021-2022 for the following programs:
(a) Debt Management
(b) Investment Management
(c) Revenue Management
(d) Purchasing & Risk Management; and
(2) Refer and cross-reference the Second Quarter Financial Reports for Fiscal Year 2021-2022 to the March 15, 2022 City Council Meeting for full adoption.
OUTCOME
Provide the quarterly update on debt management, investment management, revenue management, purchasing and risk management work efforts.
BACKGROUND
The attached Second Quarter Financial Reports for Fiscal Year 2021-2022 (quarter ended December 31, 2021) presents the Finance Department’s quarterly activity for the City of San José (“City”) Debt Management, Investment Management, Revenue Management and Purchasing and Risk Management programs (Attachment A). Additionally, the Second Quarter Investment Report has been distributed to the City Council via email and is available on the 2/8/2022
PUBLIC SAFETY, FINANCE, AND STRATEGIC SUPPORT COMMITTEE February 3, 2022
Subject: Second Quarter Financial Reports for Fiscal Year 2021-2022
Finance Department web page1. As part of the ongoing effort to streamline work efforts within the Finance Department, these reports on four programs are combined into a single report for submission to the Public Safety, Finance, and Strategic Support Committee (“PSFSS Committee”) for its review and acceptance.
ANALYSIS
A brief narrative discussion is provided below for all four components of this quarterly report:
• Debt Management
• Investment Management
• Revenue Management
• Purchasing & Risk Management
Debt Management Program
This Second Quarter Debt Report focuses on the City’s debt activities for the period ended December 31, 2021, and relates to the following elements of the City’s Debt Management Program:
• Completed financings and current debt portfolio;
• Debt issuance and management activities completed and anticipated during the next quarter (January 1, 2022 through March 31, 2022); and
• Current interest rate environments and credit ratings.
Investment Management Program
Pursuant to the City’s Investment Policy, verbal presentations in addition to the written reports are provided to the Public Safety Finance Strategic Services Committee for the Second and Fourth Quarter Reports. The materials presented in this consolidated report provide a “snapshot” of the investment portfolio. The report will be agendized for acceptance by the City Council pursuant to the Investment Policy.
Revenue Management Program
The Revenue Management report highlights key aspects of the City’s ongoing collection efforts.
These efforts focus on collecting all outstanding receivables, with an emphasis on reducing delinquent accounts and enhancing revenue compliance through four primary collection programs: Accounts Receivable, Business Tax, Revenue Compliance and Monitoring, and Utility Billing. This report highlights the Revenue Management Division’s collection efforts and summarizes the progress towards maintaining a Return on Investment ratio of 5.5 to 1. The second quarter FY 2021-22 Return on Investment is 7.8 to 1.
1 https://www.sanjoseca.gov/your-government/departments/finance/reports/-folder-450
PUBLIC SAFETY, FINANCE, AND STRATEGIC SUPPORT COMMITTEE February 3, 2022
Subject: Second Quarter Financial Reports for Fiscal Year 2021-2022
Business Tax COVID-19 Assistance and Outreach
On September 28, 2021, the City Council voted to amend Chapter 4.76 of Title 4 of the San José Municipal Code to extend the current COVID-19 Business Tax Hardship Exemption Program to June 30, 2022, with eligibility now including all businesses where Gross Receipts do not exceed $25,760 or where the combined Adjusted Gross Income of the business owner and their spouse/partner does not exceed $51,520. Businesses may apply for this financial hardship exemption based upon anticipated 2021 income instead of actual 2020 tax returns. Verification of 2021 actual income, as reported to the IRS, is required to be reported by exempted businesses for the following (2022) business tax renewal period.
In the second quarter of FY 2021-22, the Finance Department partnered with the City Manager’s Office and Office of Economic Development to perform and track outreach on the updated business tax exemption program, including:
• Flash Reports (#181, 10/6/21; #190, 12/8/21; ~ 14,000 subscribers) • Social Media (Nextdoor, Facebook, Twitter, Instagram; ~ 8,000 total impressions) • Media Advisory (12/2/21, sent to 12,331 recipients)
• Emails sent to Mayor and all City Council members
• Emails sent to various business associations (e.g., Business Owners Space, San Jose Downtown Association, Japantown Business Association)
• Business Tax invoice inserts (~ 24,000 sent to date; ongoing monthly) • Business Tax emails (ongoing, will reach ~ 31,000 businesses in January) • Informational fliers posted online and in City Public Libraries, in English, Spanish, Chinese, and Vietnamese.
In the second quarter of FY 2021-22, a backlog of 623 pending applications from the previous quarter and a total of 897 new exemption applications were processed by the end of the second quarter as follows:
• 623 carryover (pre-second quarter FY 2021-22 backlog) • 488 submitted
• 212 approved
• 150 pending customer response
• 27 denied (did not meet program eligibility requirements) • 19 duplicates
• 1 invalid account
The loss of revenue associated with exemptions for the second quarter of FY 2021-22 is approximately $45,000.
PUBLIC SAFETY, FINANCE, AND STRATEGIC SUPPORT COMMITTEE February 3, 2022
Subject: Second Quarter Financial Reports for Fiscal Year 2021-2022
Since its October 1, 2016 effective date2, through December 31, 2021, the Business Tax Program has granted business tax hardship relief to 6,717 unique business accounts, for an estimated total of $1.3 million in exemptions.
Fiscal Year Accounts Business Rate
Total Foregone
Revenue (Estimated)
FY 2016-17 1,646 $ 150.00 $ 246,900
FY 2017-18 1,680 $ 195.00 327,600
FY 2018-19 881 $ 197.90 174,350
FY 2019-20 1,087 $ 200.85 218,324
FY 2020-21 1,081 $ 203.85 220,362
FY 2021-22 342 $ 206.90 70,760
Total 6,717 $ 1,258,296
It is estimated that up to 5,500 businesses may be eligible for the October 1, 2021 expanded/extended Business Tax Hardship Exemption Program. Given the anticipated participation, an estimated $500,000 in general business tax revenues may be foregone over the nine (9) month program extension period (October 1, 2021 - June 30, 2022).
Purchasing Program
The Purchasing report highlights the key aspects of the City’s purchasing operations. The Purchasing Division of the Finance Department is responsible for the centralized procurement of equipment, supplies, materials, information technology , and non-consulting services, pursuant the Chapter 4.12 of Title 4 of the San José Municipal Code. The Purchasing Division’s mission is to deliver procurement and contracting services pursuant to public procurement best practices.
This quarter, the Purchasing Division also continued to make headway on the detailed assessment of Purchasing Division’s procurement processes (“Procurement Improvement”), in accordance with the City Roadmap workplan. As reported in the previous quarter, the scope of this work was expanded to also include the assessment of department-led procurements. The City’s consulting firm, Guidehouse Inc. conducted 76 interviews with City stakeholders to understand strengths, weaknesses and pain points of current process, and completed significant work in reviewing, analyzing and documenting the current state of the City’s procurement process. Next steps include completing visioning sessions with City leadership and stakeholders to envision the future of procurement at the City, by which to develop future state recommendations. Staff expects to bring recommendations to Smart Cities and Service Improvement Committee and the City Council in April 2022.
2 https://sanjose.legistar.com/View.ashx?M=F&ID=7570829&GUID=29D162EE -8731-4047-8B9A- BE045FED1FE9
PUBLIC SAFETY, FINANCE, AND STRATEGIC SUPPORT COMMITTEE February 3, 2022
Subject: Second Quarter Financial Reports for Fiscal Year 2021-2022
Risk Management Program
The Risk Management report highlights the key aspects of the City’s risk management program.
The Risk Management Program is responsible for procurement and oversight of the City’s property and casualty insurance programs. The Program also provides contractual risk management services, property subrogation claims reporting and other key services to City Departments including enterprise departments such as the Airport Department and San José – Santa Clara Regional Wastewater Facility.
CONCLUSION
The Financial Reports provide information and transparency of the Finance Department’s management of debt, investment, revenue, purchasing and risk activities for the quarter.
EVALUATION AND FOLLOW-UP
The Finance Department prepares this report on a quarterly basis for review and approval by the PSFSS Committee. The Finance Department staff will be available to make a presentation and answer questions on the Second Quarter Financial Reports for Fiscal Year 2021-2022 at the PSFSS Committee meeting on February 17, 2022.
CLIMATE SMART SAN JOSE
The recommendation in this memo has no effect on Climate Smart San José energy, water, or mobility goals.
PUBLIC OUTREACH/INTEREST
This memorandum will be posted on the City's website for the February 17, 2022 PSFSS Committee meeting and on the March 15, 2022 City Council agenda.
COORDINATION
This memorandum has been coordinated with the City Attorney’s Office and City Manager’s Budget Office.
PUBLIC SAFETY, FINANCE, AND STRATEGIC SUPPORT COMMITTEE February 3, 2022
Subject: Second Quarter Financial Reports for Fiscal Year 2021-2022
COMMISSION RECOMMENDATION/INPUT
No commission recommendation or input is associated with this action.
/s/
JULIA H. COOPER
Director of Finance
Attachment A: Second Quarter (period ended December 31, 2021) Financial Report for Fiscal Year 2021-2022
For questions please contact:
Program
Deputy
Finance Director
Finance Division
Phone
Debt Management Nikolai J. Sklaroff Debt & Treasury Management (408) 535-7832 Investment Management Nikolai J. Sklaroff Debt & Treasury Management (408) 535-7832 Revenue Management John Kachmanian Revenue Management (408) 535-7034 Purchasing Jennifer Cheng Purchasing and Risk Management (408) 535-7059 Risk Management Jennifer Cheng Purchasing and Risk Management (408) 535-7059
SECOND QUARTER FINANCIAL REPORT
FOR FISCALYEAR 2021-2022
Public Safety, Finance and
Strategic Support Committee
Prepared by the Finance Department
February 3, 2022
COMMITTEE AGENDA: 02/17/2022
ITEM: D(2)
FILE: CC 22-021
ATTACHMENTA
SECOND QUARTER
DEBT MANAGEMENT REPORT
FOR FISCAL YEAR 2021-2022
2 Outstanding Debt as of December 31, 2021: $4.9 Billion FY 2021-22 Year to Date Debt Issuance: $553.4 Million
3 OUTSTANDING DEBT ISSUED
(CITY AND ALL AGENCIES)
Outstanding Debt as of
December 31, 2021: $4.2 Billion
(Excluding Multifamily Housing
Revenue Bonds)
4 DIRECT OUTSTANDING DEBT
(CITY AND ALL AGENCIES)
DEBT ISSUANCE ACTIVITIES
DURING SECOND QUARTER (OCTOBER - DECEMBER 2021)
• Debt Issuance
▪ CSJFA Lease Revenue Bonds
Fire Department Training Center and Central Service Yard Projects, Series 2021A $22.8 million closed November 2, 2021
• CSJFA Lease Revenue Commercial Paper Notes
▪ San José Clean Energy (SJCE) - $23.9 million
$5.0 million October
$9.8 million November
$9.1 million in December
5 SELECTED DEBT MANAGEMENT ACTIVITIES
DURING SECOND QUARTER (OCTOBER - DECEMBER 2021)
• Debt Management - Pre-issuance activities for:
▪ 2022A Convention Center Facility District Refinancing ▪ Regional Wastewater Facility (RWF) Financings
* Credit Facility repricing
* Revenue Bonds
• Debt Administrative Activities
▪ Selection of Municipal Advisor for Convention Center Facilities District (CCFD) Refinancing Solutions
▪ Early redemption proceedings for Community Facility District #1 (Capital Expressway Auto Mall) and Assessment District #24 (Hellyer-Piercy) 6 SELECTED DEBT MANAGEMENT ACTIVITIES
DURING SECOND QUARTER (OCTOBER - DECEMBER 2021)
• Reporting
▪ State Reports – Mello-Roos and Marks-Roos Annual Reports (October 2021) ▪ Annual Continuing Disclosure (December 2021)
* Community Facility Districts
* General Obligation Bonds
* Lease Revenue Bonds
* Airport Bonds
▪ 2021 Comprehensive Annual Debt Report (CADR)
• Tax Equity and Fiscal Responsibility Act (“TEFRA”) hearing approving the issuance of Multi-Family Housing Revenue Bonds:
▪ Vitalia for $35.7 million. Closing January 2022
▪ Mariposa Place for $31.3 million. Closing January 2022 7 UPCOMING DEBT ISSUANCE AND MANAGEMENT
THROUGH JUNE 30, 2022
• Debt Issuance
▪ CSJFA Commercial Paper issuance for SJCE (January-February) ▪ CSJFA CCFD/Special Hotel Tax Refunding Bonds (Convention Center) (May) ▪ TEFRA hearing – Multifamily Housing Revenue Bonds
* Algarve ($36 million) and McEvoy ($70.6 million) housing projects scheduled for issuance Summer 2022
▪ Pre-Issuance Activity
* Regional Wastewater Facility - Credit Facility repricing/Revenue Bonds * 2022 Tax and Revenue Anticipation Note (TRAN) – Retirement Prefunding 8 UPCOMING DEBT ISSUANCE AND MANAGEMENT
THROUGH JUNE 30, 2022
• Debt Management
▪ Issue RFP and Select Firm(s) for Post-Issuance Compliance Services ▪ Issue RFQ/RFP and Establish Underwriter Services Pool for various bond programs
▪ Select underwriters for CCFD Refunding Bonds and RWF Wastewater Revenue Bonds (RFP)
▪ Issue RFP and Establish Municipal Advisor Pool for various services including selection of General Municipal Advisor(s)
▪ Successor Agency ROPS Budget FY 2022-23 approval by Countywide Oversight Board and submission to State Department of Finance (January/February 2022)
9 10-year history averaged 3.08%
and, as of January 13, 2022, at
1.72%
10 TAX-EXEMPT MARKET INDEX
(20-YEAR FIXED RATE)
Taxable LIBOR monthly interest
rates paid by the City averaged
0.09% in Q2 and as of January
13, 2022, at 0.11%
11 VARIABLE INTEREST RATES
(TAXABLE)
GENERAL CREDIT RATINGS
• City continues to maintain very high credit ratings
12 Type of Rating Moody’s S&P Fitch
Issuer Rating Aa1
(stable)
AA+
(stable)
AA+
(stable)
General Obligation
Bonds
Aa1
(stable)
AA+
(stable)
AAA
(stable)
Lease Revenue Bonds
(Essential Assets)
Aa2
(stable)
AA
(stable)
AA
(stable)
Lease Revenue Bonds
(Less Essential Assets)
Aa3
(stable)
AA
(stable)
AA-
(stable)
GENERAL CREDIT RATINGS
• City GO Ratings are higher than the State of California’s ratings and similar to Santa Clara County’s ratings, which is not surprising given their shared tax base and other credit fundamentals:
13 Entity Moody’s S&P Fitch
City of San José Aa1 AA+ AAA
State of California Aa2 AA- AA
Santa Clara County Aa1 AAA AA+
OTHER CITY CREDIT RATINGS
14 T ype of Rating Moody’s S&P Fitch
San José Airport Bonds A2
(stable)
A-
(stable)
A
(stable)
SARA Senior Tax
Allocation Bonds
Not Rated
N/A
AA
(stable)
AA-
(stable)
Special Hotel Tax Revenue
Bonds, Series 2011
A2
(stable)
A
(stable)
Not Rated
N/A
RESULTS OF FY 2021-22 BOND SALE
15 CSJFA LEASE REVENUE BONDS SERIES 2021A
FIRE DEPARTMENTTRAINING CENTER & CENTRAL SERVICEYARD
• Issued $22,825,000 tax-exempt Lease Revenue Bonds
• Series 2021A Bonds closed on November 2, 2021:
▪ Fixed rate bonds with an All-in True Interest Cost (“TIC”) of 1.57% ▪ Refunded Lease Revenue Bonds, Series 2003A (Central Service Yard Refunding Project), freeing up debt service capacity to borrow new funds
▪ Refinanced Central Service Yard Commercial Paper Notes ▪ Provided funds to acquire, construct, and equip a portion of the City’s Fire Department Training Center and improvements to the Central Service Yard
▪ Funded issuance costs of the Series 2021A Bonds
• RBC Capital Markets underwrote the bonds after being selected through a competitive procurement process.
• Series 2021A Bonds received ratings of:
16 Moody’s S&P Fitch
Rating Aa2 AA AA
Outlook Stable Stable Stable
SECOND QUARTER
INVESTMENT MANAGEMENT REPORT
FOR FISCAL YEAR 2021-2022
17 INVESTMENT POLICY
(COUNCIL POLICY 1-12)
• Investments in the portfolio meet the requirements of the City’s Investment Policy and conform with California Government Code section 53601
• Authorized investments only include highly-rated fixed income securities (long-term rating A category or better; short-term rating A1 category or equivalent only)
• Policy is reviewed annually and shall be adopted by resolution of the City Council
▪ Policy is reviewed during this February PSFSS Meeting • Investment Program is audited semi-annually for compliance purposes 18 INVESTMENT OBJECTIVES & REPORTING
• Manage investments to meet the City’s Investment Policy objectives:
▪ Safety
▪ Liquidity
▪ Yield
• Quarterly reports are available to the public on-line, placed on PSFSS Committee agenda and separately agendized for City Council’s acceptance
19 SOCIALLY RESPONSIBLE INVESTMENT GOALS
Section 22 of the Investment Policy articulates the Social Responsibility Investment Goals:
• Support community well-being through:
▪ safe and environmentally sound practices
▪ fair labor practices
• Support equality of rights
• Serve all members of local community and promote community economic development
20 PORTFOLIO PERFORMANCE SUMMARY
21 Size of total portfolio $2,156,557,599
Earned interest yield 0.859%
Weighted average maturity 520 days
Fiscal year-to-date net income recognized $9,310,538
Exceptions to the City Investment
Policy during this quarter None
T otal Investment Portfolio:
$2,156,557,599
22 PORTFOLIO INVESTMENTS
U.S. Treasury
$56,157,483
3%
U.S. Agency
$546,702,171
25%
Supranationals
$249,400,619
12%
Negotiable Certificate
of Deposit (NCD)
$178,910,885
8% Commercial Paper
$34,979,756
2%
Corporate Notes
$308,933,091
14%
Asset Backed Securities
$20,170,292
1%
Muni Bonds
$220,316,985
10%
Mortgage Backed
Securities
$142,959,882
7%
LAIF
$225,000,000
10%
Money Market Fund
$173,026,435
8%
The $568.9 million in the General
Fund presented includes
$437,194,188 of General Fund
monies, as well as $131,666,347 in
other, separately tracked general
funds, such as the Emergency Reserve
Fund, the Coronavirus Aid, Relief, and
Economic Security (“CARES”) Act,
the American Rescue Plan (“ARP”)
Act of 2021 and other smaller funds
and reserves.
23 INVESTMENTS BY FUND
Internal Services Fund
$9,153,089
Airport
$208,802,572
Capital Projects
$74,711,909
Debt Service
$39,599,985
Development
Fees $42,964,891
General Fund
$568,860,535
Muni Water
$34,485,049 Parking
$41,953,650
Housing
$298,807,000
Special Revenue
Funds
$347,410,499
Wastewater
$363,398,422
Trust & Agency
$12,194,232
SJ Clean Energy
$42,971,341
GENERAL FUND BALANCE
• General Fund balance increased by $11.9 million during the quarter and ended at $568.9 million as of December 31, 2021
▪ General Fund balance usually peaks during the months of January and June, when the bulk of property taxes are received, and declines in the summer months due to retirement prefunding, debt service payments, and operational expenditures
• Projected investment maturities and revenues are sufficient to cover anticipated expenditures for the next six months
24 The City’s receipt of advanced
federal relief and recovery
assistance over the past two
fiscal years has altered the
pattern of cash receipts.
25 COMPARISON OF CASH BALANCES
(BY SELECT FUNDS)
$0
$100
$200
$300
$400
$500
$600
$700
Dec-19 Mar-20 Jun-20 Sep-20 Dec-20 Mar-21 Jun-21 Sep-21 Dec-21 Dollars in millions
General Fund Wastewater Airport Housing Special Revenue Fund • City refers to City's Fund 1
Portfolio, and the yield data are
month-end weighted average
yields.
• LAIF refers to the State of CA
Local Agency Investment Fund and
yield data are average monthly
effective yields.
• BAML refers to Bank of America
Merrill Lynch 1-3 Year AAA-A US
Corporate & Government Index
and yield data are rolling 2-year
effective yield.
26 BENCHMARK COMPARISONS
0.00 0.50
1.00 1.50
2.00 2.50
3.00 Dec-19 Mar-20 Jun-20 Sep-20 Dec-20 Mar-21 Jun-21 Sep-21 Dec-21 Yield (%)
City LAIF BAML
Yield WAM
CITY: 0.871% 525
BAML: 0.425% 679
LAIF: 0.212% 340
INVESTMENT STRATEGY
• Continue matching known expenditures with suitable investments within the 24-month horizon
• Extend a portion of the portfolio beyond two-year term, when appropriate, to provide income and structure to the portfolio • Maintain the diversification of the portfolio
• Focus on core objectives of safety, liquidity, and yield 27 SECOND QUARTER
REVENUE MANAGEMENT REPORT
FOR FISCAL YEAR 2021-2022
28 REVENUE MANAGEMENT PROGRAMS
• Finance Department Revenue Management focuses on collecting all outstanding receivables, with an emphasis on reducing delinquent accounts and enhancing revenue compliance, through four primary collection programs:
▪ Accounts Receivable
▪ Business Tax
▪ Compliance and Monitoring
▪ Utility Billing
• Efforts may span several reporting periods, and actual collections are reported as funds are received by the City
29 T otal Revenue: $4.242B
Source: 2020-21 City Manager’s
Budget Office Annual Report
(Graph is updated annually)
30 REVENUE MANAGEMENT PORTFOLIO
FY 2020-21 REVENUE ($ IN MILLIONS)
Lodging T axes and
Fees
$27.8
2.4%
Franchise Fees
$45.6
4.0%
Utility Users T ax
$107.0
9.3%
T elephone Line T ax
$20.9
1.8%
Real Property Transfer
T ax
$50.5
4.4%
Utility Billing
$405.5
35.2%
Sales T ax
$284.0
24.6%
Misc. Billing
$154.8
13.4%
Business T axes
$56.3
4.9%
Revenue Management
1,152
City-Wide Revenue
(excluding Revenue Management)
3,090
Includes invoices billed through the
Business Tax System, the centralized
Accounts Receivable system (RevQ),
and the Utility Billing System.
(Graph is updated annually)
31 INVOICING AND PAYMENTS
(5-YEAR HISTORY)
99.4% 99.5% 99.3% 99.1% 96.1%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
$-
$100
$200
$300
$400
$500
$600
$700
$800
FY 16-17 FY 17-18 FY 18-19 FY 19-20 FY 20-21
In Millions
Payments Outstanding Percentage Collected
32 OUTSTANDING RECEIVABLES
(3-YEAR HISTORY)
-50%
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
50%
$-
$10
$20
$30
$40
$50
$60
$70
$80
$90
$100
18-19
Q3
18-19
Q4
19-20
Q1
19-20
Q2
19-20
Q3
19-20
Q4
20-21
Q1
20-21
Q2
20-21
Q3
20-21
Q4
21-22
Q1
21-22
Q2
Quarter to Quarter % Change
Millions
Revenue Management Aging
Total Receivables Delinquent (91+ days) Delinquency Percentage Change 33 DELINQUENT RECEIVABLES COLLECTION STATUS
($ IN MILLIONS) AS OF DECEMBER 31, 2021
COLLECTIONS & RETURN ON INVESTMENT
34 7.9
6.3 4.5
7.5 8.0
5.6 9.7
7.8 -1.00
1.00 3.00
5.00 7.00
9.00 11.00
$0.0
$0.5
$1.0
$1.5
$2.0
$2.5
$3.0
$3.5
$4.0
$4.5
$5.0
19-20 Q3 19-20 Q4 20-21 Q1 20-21 Q2 20-21 Q3 20-21 Q4 21-22 Q1 21-22 Q2 Return on Investment (ROI)
Millions
Revenue Management Collections
Business Tax Accounts Receivable Revenue Compliance & Monitoring Actual ROI TARGET
ROI
5.5 BUSINESSTAX COVID-19 OUTREACH
• On September 28, 2021, the City Council extended/expanded the COVID-19 Business Tax Hardship Exemption Program.
• During the second quarter of FY 2021-22, Finance, the City Manager’s Office, and Economic Development collaborated on related outreach:
▪ Flash Reports (#181, 10/6/21; #190, 12/8/21; ~14,000 subscribers) ▪ Social Media (Nextdoor, Facebook, T witter, Instagram; ~8,000 total impressions) ▪ Media Advisory (12/2/21, sent to 12,331 recipients)
▪ Emails sent to Mayor and City Council members
▪ Emails sent to various business associations (e.g., Business Owners Space, San José Downtown Association, Japantown Business Association)
▪ Business Tax invoice inserts (~24,000 sent to date; ongoing monthly) ▪ Business Tax emails (ongoing, will reach ~31,000 businesses in January) ▪ Informational fliers posted online and in City Public Libraries, in English, Spanish, Chinese, and Vietnamese.
35 SECOND QUARTER
PURCHASING AND
RISK MANAGEMENT REPORT
FOR FISCAL YEAR 2021-2022
36 PURCHASING PROGRAM
The Purchasing Division of the Finance Department is responsible for the centralized procurement of equipment, supplies, materials, Information T echnology (IT), and non-consulting services, pursuant to the City of San José Municipal Code Title 4, Chapter 4.12. 37 PURCHASINGTRANSACTIONS COMPLETED
FY2021-22, SECOND QUARTER
38 Procurement T ype Transactions
Request for Quote Awarded 7
Request for Bids Awarded 21
Request for Proposals Completed 1
Purchase Orders and Purchase Orders Adjustments Issued 463 New Agreements Negotiated and Executed 6
Amendments, Change Orders, Service Orders, Options Executed 37 Council Memoranda Issued 11
Purchase Order Dollars Procured $77,917,893
PROCUREMENT IMPROVEMENT UPDATE
• Procurement Improvement is a Strategic Support initiative under the City Roadmap
▪ Finance re-engaged with Procurement Consultant (Guidehouse) in September 2021 ▪ Assessment includes both Finance/Purchasing-managed and department-led procurements.
• This Quarter:
▪ Guidehouse completed 76 City stakeholder interviews and made significant headway in the current state assessment of City’s procurement process ▪ Next steps include visioning sessions and developing future state recommendations • Report to Smart Cities and Services Improvement Committee – April 2022 39