TO: HONORABLE MAYOR AND FROM: Toni J. Taber, CMC
CITY COUNCIL City Clerk
SUBJECT: SEE BELOW DATE: June 14, 2022
SUBJECT: Third Quarter Financial Reports for Fiscal Year 2021-2022
Recommendation
As recommended by the Public Safety, Finance and Strategic Support Committee on May 19, 2022, accept the Third Quarter (period ended March 31, 2022) Financial Reports for Fiscal Year 2021-2022 for the following programs:
(a) Debt Management;
(b) Investment Management;
(c) Revenue Management; and
(d) Purchasing & Risk Management.
CEQA: Not a Project, File No. PP17-009, Staff Report, Assessments, Annual Reports, and Informational Memos that involve no approvals of any City action. (Finance) [Public Safety, Finance and Strategic Support Committee referral 5/19/2022 - Item (c)1]
COUNCIL AGENDA: 6/14/2022
ITEM: 2.11
FILE NO: 22-892
PSFSS COMMITTEE: 5/19/2022
ITEM: (c)1.
TO: PUBLIC SAFETY, FINANCE, AND
STRATEGIC SUPPORT COMMITTEE
FROM: Julia H. Cooper
SUBJECT: THIRD QUARTER FINANCIAL
REPORTS FOR FISCAL YEAR
2021-2022
DATE: May 4, 2022
Approved Date
RECOMMENDATION
(1) Accept the Third Quarter (period ended March 31, 2022) 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 Third Quarter Financial Reports for Fiscal Year 2021-2022 to the June 14, 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 Third Quarter Financial Reports for Fiscal Year 2021-2022 (quarter ended March 31, 2022) presents the quarterly activity for the City of San José (City) Finance Department Debt Management, Investment Management, Revenue Management and Purchasing and Risk Management programs (Attachment A). Additionally, the Third Quarter Investment Report has been distributed to the City Council via email and is available on the Finance Department web 5/11/2022
PUBLIC SAFETY, FINANCE, AND STRATEGIC SUPPORT COMMITTEE May 4, 2022
Subject: Third Quarter Financial Reports for Fiscal Year 2021-2022
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 referral to the City Council for 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 Third Quarter Debt Report focuses on the City’s debt activities for the period ended March 31, 2022, 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 (April 1, 2022 through June 30, 2022); and
• Current interest rate environment 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 Investment 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
1 https://www.sanjoseca.gov/your-government/departments/finance/reports/-folder-450
PUBLIC SAFETY, FINANCE, AND STRATEGIC SUPPORT COMMITTEE May 4, 2022
Subject: Third Quarter Financial Reports for Fiscal Year 2021-2022
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 third quarter FY 2021-22 Return on Investment is 12.4 to 1.
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 expanded eligibility to include 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 Q2 and Q3 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 (~ 37,300 sent to date; ongoing monthly) • Business Tax emails (total of 58,601 emails sent.)
• Informational fliers posted online and in City Public Libraries, in English, Spanish, Chinese, and Vietnamese.
In Q3 FY 2021-22, a backlog of 75 pending applications from the previous quarter and a total of 1,203 new exemption applications were processed by the end of the third quarter as follows:
• 75 carry over (pre-Q3 FY 2021-22 backlog)
• 1,203 submitted
• 406 approved
• 428 pending customer response
• 24 denied (did not meet program eligibility requirements)
The loss of revenue associated with exemptions for Q3 FY 2021-22 is approximately $84,000.
PUBLIC SAFETY, FINANCE, AND STRATEGIC SUPPORT COMMITTEE May 4, 2022
Subject: Third Quarter Financial Reports for Fiscal Year 2021-2022
Since the inception of the Amnesty Program which covered the tax period beginning October 1, 20162 through March 31, 2022, there has been a cumulative total of $1.34 million in exemptions to date.
Fiscal Year Accounts
Base
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 2021-22 748 $ 206.90 154,761
Total 7,123 $ 1,342,297
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 further described in the attached report. Staff provided a summary of these recommendations to Smart Cities and Service Improvement Committee on April 7, 2022 and will present the same before the City Council on May 10, 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
2 https://sanjose.legistar.com/View.ashx?M=F&ID=7570829&GUID=29D162EE -8731-4047-8B9A- BE045FED1FE9
PUBLIC SAFETY, FINANCE, AND STRATEGIC SUPPORT COMMITTEE May 4, 2022
Subject: Third Quarter Financial Reports for Fiscal Year 2021-2022
Departments including enterprise departments such as the Airport Department and San José – Santa Clara Regional Wastewater Facility.
This quarter, the Risk Management Division implemented a second Owner-Controlled Insurance Program (OCIP) for the Regional Wastewater Facility, as summarized in the attached report.
CONCLUSION
The Financial Reports provide information and transparency of the Finance Department’s management of debt, investment, revenue, purchasing and risk management 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 answer questions on the Third Quarter Financial Reports for Fiscal Year 2021-2022 at the PSFSS Committee meeting on May 19, 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 May 19, 2022 PSFSS Committee meeting and on the June 14, 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 May 4, 2022
Subject: Third 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: Third Quarter (period ended March 31, 2021) Financial Report for Fiscal Year 2021-2022
For questions please contact:
Program Finance Contact
Finance Division
Phone
Debt Management Luz Cofresí-Howe Assistant Director (408) 535-7832 Investment Management Luz Cofresí-Howe Assistant Director (408) 535-7832 Revenue Management John Kachmanian Deputy Director, Revenue Management
(408) 535-7034
Purchasing & Risk
Management
Jennifer Cheng Deputy Director, Purchasing and
Risk Management
(408) 535-7059
THIRD QUARTER FINANCIAL REPORT
FOR FISCALYEAR 2021-2022
Public Safety, Finance and
Strategic Support Committee
Prepared by the Finance Department
May 4, 2022
COMMITTEE AGENDA: 05/19/2022
ITEM: (C)1
FILE: CC22-119
ATTACHMENTA
THIRD QUARTER
DEBT MANAGEMENT REPORT
FOR FISCAL YEAR 2021-2022
2 Outstanding Debt as of March 31, 2022: $4.8 Billion
FY 2021-22 Year to Date Debt Issuance: $661.5 Million
3 OUTSTANDING DEBT ISSUED
(CITY AND ALL AGENCIES)
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
$1,800
$2,000
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
Annual Debt Issuance
($ million)
Outstanding Debt
($ million)
Fiscal Year Ended June 30
City and Related Entity Debt Outstanding Conduit Debt Outstanding Annual Debt Issuance * YTD Debt Issuance
Outstanding Debt as of
March 31, 2022: $4.0 Billion
(Excluding Multifamily Housing
Revenue Bonds)
4 DIRECT OUTSTANDING DEBT
(CITY AND ALL AGENCIES)
DEBT ISSUANCE ACTIVITIES
DURINGTHIRD QUARTER (JANUARY – MARCH 2022)
5 • Debt Issuance
▪ Regional Wastewater Facility (RWF) Credit Facility Draw – $36.5 million Provides interim financing in support of the long-range capital plan for the Regional Wastewater Facility
Initial Credit Capacity $300 million
Remaining Capacity $113.2 million (As of March 31, 2022) ▪ Multi-Family Housing Debt Issuance
Vitalia Apartments (formerly known as Bascom Apartments) – $35.6 million notes were issued in January 2022.
Mariposa Place – $36 million notes were issued in January 2022.
SELECTED DEBT MANAGEMENT ACTIVITIES
DURINGTHIRD QUARTER (JANUARY – MARCH 2022)
6 • Debt Management
▪ RFW Credit Facility Amendment
* Negotiated amendment to existing Wells Fargo Bank credit facility, resulting in lower fees and lower interest costs on variable rate facility
▪ Pre-issuance activities
* CSJFA Taxable Lease Revenue Bonds, Series 2022A (Convention Center Refunding Project)
* 2022 Tax and Revenue Anticipation Notes (TRANs) – to facilitate the prefunding of certain employer retirement contributions in 2022-2023
SELECTED DEBT MANAGEMENT ACTIVITIES
DURINGTHIRD QUARTER (JANUARY - MARCH 2022)
7 • Reporting
▪ CDIAC – Annual Debt Transparency Report (SB 1029) – January 2022 ▪ Annual Continuing Disclosure – SARA / CCFD (Convention Center Facility District) – March 2022
▪ Annual Compliance Certificates – SARA (January 2022) / Airport (February 2022) / Clean Energy (March 2022) / TRAN (March 2022) / RWF Credit Agreement (March 2022) / Commercial Paper (March 2022)
▪ Prepare Successor Agency Recognized Obligation Payment Schedule (ROPS) 22-23 for Santa Clara County review and State Department of Finance submission
SELECTED DEBT MANAGEMENT ACTIVITIES
DURINGTHIRD QUARTER (JANUARY - MARCH 2022)
8 • On March 28, 2022, the City’s Finance Department held a Tax Equity and Fiscal Responsibility Act (TEFRA) hearing approving the issuance of Multi-Family Housing Revenue Bonds (MHRB):
▪ Algarve in the amount of $32.5 million; tentative closing June 2022 ▪ McEvoy in the amount of $64.2 million; tentative closing June 2022
UPCOMING DEBT ISSUANCE AND MANAGEMENT
THROUGH JUNE 30, 2022
9 • Debt Issuance
▪ CSJFA Taxable Lease Revenue Bonds, Series 2022A (Convention Center Refunding Project), closed April 21, 2022
▪ Pre-Issuance Activity
• 2022 TRAN – Retirement Prefunding
• RWF Financing (Revenue Bonds)
• Debt Management
▪ Issuance of RFP for Arbitrage Rebate Services and Continuing Disclosure/Audit Compliance Services
▪ Issuance of RFP for Municipal Advisory Services for various debt programs ▪ Selection of Underwriter(s) for RWF Financing and pools for various credits ▪ Successor Agency ROPS Budget FY22-23 approval from State Department of Finance 10-year history of tax-exempt long-
term (20-year term) interest rates
averaged 3.04% and are currently at
3.52% (as of 4/14/22)
10 TAX-EXEMPT MARKET INDEX
(20-YEAR FIXED RATE)
Taxable LIBOR monthly interest
rates paid by the City averaged
0.09% in Q3. The Taxable SOFR
monthly interest rate is currently
at 0.29% (as of 4/14/2022)
11 VARIABLE INTEREST RATES
(TAXABLE)
GENERAL CREDIT RATINGS
CITY OF SAN JOSÉ
• 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 OBLIGATION 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 the extent of the tax base and other credit fundamentals the City and County share:
13 Entity Moody’s S&P Fitch
City of San José Aa1 AA+ AAA
State of California Aa2 AA- AA
Santa Clara County [1] AAA AA+
[1] Moody’s does not currently rate Santa Clara County’s General Obligation Bonds but maintains an Issuer rating of Aa1.
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)
THIRD QUARTER
INVESTMENT REPORT
FOR FISCAL YEAR 2021-2022
15 INVESTMENT POLICY
(COUNCIL POLICY 1-12)
• Investments meet the requirements of the City’s Investment Policy and conform with California Government Code section 53601 • Authorized investments are only highly-rated fixed income securities • Investment Policy is reviewed annually and was last adopted by resolution of the City Council on March 15, 2022
• Investment Program is audited semi-annually for compliance purposes ▪ Audit for period ended December 31, 2021 is included with the Third Quarter Investment Report
16 INVESTMENT OBJECTIVES & REPORTING
• Manage investments to meet the City’s Investment Policy objectives:
▪ Safety
▪ Liquidity
▪ Yield
• Meet Socially Responsible Investment Goals per Section 22 of the Investment Policy
• Quarterly reports are available to the public
▪ On-line
▪ In PSFSS Committee agenda packets
▪ In City Council agenda packets (for acceptance)
17 PORTFOLIO PERFORMANCE SUMMARY
18 Size of total portfolio $2,333,470,481
Earned interest yield 0.876%
Weighted average maturity 562 days
Fiscal year-to-date net income recognized $14,323,223
Exceptions to the City Investment Policy during this quarter None T otal Investment Portfolio:
$2,333,470,481
19 PORTFOLIO INVESTMENTS
U.S. Treasury $221,500,288
9%
U.S. Agency
$829,958,389 35%
Supranationals
$226,997,469 10%
Negotiable
Certificate of
Deposit (NCD)
$118,910,885 5%
Commercial Paper
$49,932,114 2%
Corporate Notes
$301,445,177 13%
Asset Backed Securities
$15,811,437 1%
Muni Bonds
$224,019,498
10%
Mortgage Backed
Securities
$141,389,053 6%
LAIF
$155,000,000 7%Money Market Fund
$48,506,171 2%
The $554.1 million in the General
Fund presented includes
$508,488,547 of General Fund
monies, as well as $45,622,163 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.
20 INVESTMENTS BY FUND
Internal Services Fund
$17,805,836
Airport
$219,240,391
Capital Projects
$115,826,268
Debt Service
$55,026,752
Development Fees
$51,336,055
General Fund
$554,110,710
Muni Water
$36,172,823
Parking
$42,803,424 Housing $295,817,341
Special Revenue Funds
$432,015,501
Wastewater
$396,751,219
Trust & Agency
$9,248,599 SJ Clean Energy
$41,311,140
GENERAL FUND BALANCE
• General Fund balance decreased by $14.7 million during the quarter, ending at $554.1 million as of March 31, 2022
▪ General Fund balance usually peaks during the months of January and June, when the bulk of property taxes are received; declines in the summer due to retirement prefunding; and declines throughout the rest of the year due to debt service payments and operational expenditures
▪ This quarter included prepayment of half the 2021 TRANs for $142.5 million ▪ Remaining half will be paid as due on June 30, 2022
• Projected investment maturities and revenues are sufficient to cover anticipated expenditures for the next six months
21 The City’s advance receipt of
federal relief and recovery
assistance over the past two
fiscal years has altered the
pattern of cash receipts.
22 COMPARISON OF CASH BALANCES
(BY SELECT FUNDS)
$0
$100
$200
$300
$400
$500
$600
$700
$800
$900
$1000
Mar-20 Jun-20 Sep-20 Dec-20 Mar-21 Jun-21 Sep-21 Dec-21 Mar-22 Dollars in millions
General Fund Wastewater Airport Housing Special Revenue Fund • City refers to City's Fund 3
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.
23 BENCHMARK COMPARISONS
0.00 0.50
1.00 1.50
2.00 2.50
3.00 Mar-20 Jun-20 Sep-20 Dec-20 Mar-21 Jun-21 Sep-21 Dec-21 Mar-22 Yield (%)
City LAIF BAML
Yield WAM
CITY: 0.929% 567
BAML: 0.446% 672
LAIF: 0.365% 310
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 24 THIRD QUARTER
REVENUE MANAGEMENT REPORT
FOR FISCAL YEAR 2021-2022
25 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.
26 T otal Revenue: $4.242B
Source: 2020-21 City Manager’s
Budget Office Annual Report
(Graph is updated annually)
27 REVENUE MANAGEMENT PORTFOLIO
FY 2020-21 REVENUE ($ 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)
28 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
29 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
$100
18-19
Q4
19-20
Q1
19-20
Q2
19-20
Q3
19-20
Q4
20-21
Q1
20-21
Q2
20-21
Q3
20-21
Q4
21-22
Q1
21-22
Q2
21-22
Q3
Quarter to Quarter % Change
Millions
Revenue Management Aging
Total Receivables Delinquent (91+ days) Delinquency Percentage Change 30 DELINQUENT RECEIVABLES
COLLECTION STATUSSUMMARY ($ IN MILLIONS)
*Rounded
COLLECTIONS & RETURN ON INVESTMENT
REVENUE MANAGEMENT COLLECTIONS
Target ROI: 5.5
6.3 4.5
7.5 8.0
5.6 9.7
7.8 12.4
0.00 2.00
4.00 6.00
8.00 10.00
12.00 14.00
$0.0
$0.5
$1.0
$1.5
$2.0
$2.5
$3.0
$3.5
$4.0
$4.5
$5.0
19-20 Q4 20-21 Q1 20-21 Q2 20-21 Q3 20-21 Q4 21-22 Q1 21-22 Q2 21-22 Q3 Return on Investment (ROI)
Millions
Business Tax Accounts Receivable Revenue Compliance & Monitoring Actual ROI 31 BUSINESSTAX COVID-19
HARDSHIP EXEMPTION OUTREACH
• On September 28, 2021, the City Council extended/expanded the COVID-19 Business Tax Hardship Exemption Program.
• During the third quarter of FY 2021-22, Finance performed outreach and hardship exemption application processing as follows:
▪ Hardship Exemption Outreach
* Business Tax invoice inserts sent: 31,581 (~37,300 sent to date; ongoing monthly) * Business Tax emails: 58,601 sent
▪ Hardship Exemption Application Processing
* A total of 1,278 new exemption applications were processed (1,203 new applications and 75 carryover from FY 21-22 Q2)
32 THIRD QUARTER
PURCHASING AND RISK MANAGEMENT
REPORT
FOR FISCAL YEAR 2021-2022
33 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. 34 PURCHASING TRANSACTIONS COMPLETED
FY2021-22, THIRD QUARTER
35 Procurement T ype Transactions
Request for Quote Awarded 17
Request for Bids Awarded 21
Request for Proposals Completed 2
Purchase Orders and Purchase Orders Adjustments Issued 493 New Agreements Negotiated and Executed 7
Amendments, Change Orders, Service Orders, Options Executed 35 Council Memoranda Issued 14
Purchase Order Dollars Procured $80,075,215
PROCUREMENT IMPROVEMENT UPDATE
• Procurement Improvement is a City Roadmap Strategic Support initiative ▪ Finance re-engaged with Procurement Consultant (Guidehouse) in September 2021 ▪ Assessment includes both Finance/Purchasing-managed and department-led procurements.
• This Quarter:
▪ Guidehouse drafted Current State Assessment Report, completed 5 visioning sessions with City leadership, and produced the Future State Assessment Report ▪ Presented initial recommendations to City Senior Leadership T eam on March 16, 2022 • 4th Quarter Activities
▪ Report to Smart Cities and Services Improvement Committee on April 7, 2022 and City Council on May 10, 2022.
• Staff evaluating recommendations and will commence discussions across City on feasibility of implementing the recommendations.
36 RISK MANAGEMENT PROGRAM
The Division is responsible for the procurement and oversight of the City’s property and casualty insurance programs and providing contractual risk management services, property subrogation claims reporting and other key services to City Departments
37 RISK MANAGEMENTTRANSACTIONS COMPLETED
FY2021-22, THIRD QUARTER
38 T ype Transactions
Request for Contract Insurance Specifications 132
Request for Insurance Compliance Review 109
Request for Letters of Self-Insurance 23
Subrogation dollars bills to responsible third parties $201,759
OWNER CONTROLLED INSURANCE PROGRAM
FOR REGIONAL WASTEWATERFACILITY, PHASE 2
• An OCIP is a master insurance program arranged by the City to insure the interests of contractors and subcontractors while working on capital improvement projects at the Regional Wastewater Facility (RWF). ▪ Generates cost savings, improves claims delivery, and provides loss control and safety management resources to the City
• In 2016, City Council approved an OCIP for RWF projects through March 2023 • Finance-Risk Management works with stakeholders to administer the program • This Quarter:
▪ In January 2022, City Council approved implementation of a second OCIP at RWF for CIP projects through January 2028
▪ Second OCIP involves 9 insurers, and 5 insurance product lines 39