City of San Juan Bautista
The “City of History”
www.san-juan-bautista.ca.us
CITY COUNCIL
SPECIAL BUDGET WORKSHOP
MONDAY, JUNE 3, 2024, 5:30 P.M.
HYBRID MEETING
City Hall, Council Chambers
311 Second Street, San Juan Bautista, California
AGENDA
ZOOM WEBINAR PARTICIPATION
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PUBLIC COMMENT - ADVISEMENT
Public comments are limited to items on this special meeting agenda pursuant to California Government Code section § 54954.3(b). Public comments are generally limited to three (3) minutes per speaker; the Mayor may further limit the time for public comments depending on the agenda schedule.
1. CALL TO ORDER
A. Pledge of Allegiance
B. Roll Call
2. DISCUSSION ITEMS
A. Budget Update for Workshop
Recommendation: Discuss the Proposed Budget for Fiscal Year 2024/25, Share its Questions or Concerns with the Original Draft Provided May 21, 2024, and Consider Additional Details Provided.
Page | 2 City Council June 4, 2024
3. ADJOURNMENT
______________________________
Elizabeth Soto, Acting City Clerk
AGENDA MATERIAL / ADDENDUM
Any addendums will be posted not later than 72-hours before regular meetings or 24-hours of special meetings, unless otherwise allowed under the Brown Act. City Council reports may be viewed at the City of San Juan Bautista City Hall at 311 Second Street San Juan Bautista, and are posted on the City website www.san-juan-bautista.ca.us subject to Staff’s ability to post the documents before the meeting, or Acting City Clerk Elizabeth Soto at [email protected] or calling (831) 623-4661 during normal business hours.
In compliance with the Americans with Disabilities Act, and Govt. Code 54953(a), the City will make reasonable arrangements to ensure accessibility to this meeting. If you need special assistance to participate in this meeting, please contact the City Clerk, a minimum of 48 hours prior to the meeting at (831) 623-4661.
If you challenge any planning or land use decision made at this meeting in court, you may be limited to raising only those issues you or someone else raised at the public hearing held at this meeting, or in written correspondence delivered to the City Council at, or prior to, the public hearing. Please take notice that the time within which to seek judicial review of any final administrative determination reached at this meeting is governed by Section 1094.6 of the California Code of Civil Procedure.
A Closed Session may be called during this meeting pursuant to Government Code §54956.9 (d)(2) if a point has been reached where, in the opinion of the legislative body of the City on the advice of its legal counsel, based on existing facts and circumstances, there is a significant exposure to litigation against the City.
PUBLIC COMMENT PROCEDURES
If you wish to make a general public comment and are attending in person, please fill out a speaker card. If you are attending via Zoom, join the Zoom Webinar, and use the "Raise Hand" or if joining by telephone, press *9 on your telephone keypad icon.
SUBMISSION OF PUBLIC COMMENTS
Written comments may be submitted via mail to the City Clerk at City Hall (P.O. Box 1420, San Juan Bautista, CA 95045), or emailed to [email protected] no later than 3:00 p.m. on the day of the meeting. Written comments will be read into the record provided that the reading does not exceed three (3) minutes.
PUBLIC NOTIFICATION
This agenda was posted on Friday, May 30, 2024, on the bulletin board at City Hall, 311 Second Street, the bulletin board at the City Library, 801 Second Street, the bulletin board at the entrance to the United States Post Office, 301 The Alameda, and the City’s website.
Meetings are streamed live at https://www.facebook.com/cityofsanjuanbautista/.
Item: 2.A
City Council Meeting
Date: June 3, 2024
Page | 1
CITY OF SAN JUAN BAUTISTA
CITY COUNCIL STAFF REPORT
DATE: JUNE 3, 2024
DEPARTMENT: CITY MANAGER
FROM: DON REYNOLDS
BY: DON REYNOLDS
TITLE: BUDGET UPDATE FOR WORKSHOP
RECOMMENDED MOTION:
It is recommended that the City Council discuss the proposed budget for Fiscal Year 2024/25, share its questions or concerns with the original draft provided May 21, 2024, and consider additional details provided herein.
BACKGROUND:
At its regular City Council meeting May 21, 2024, the City approved 4 recommendations:
1. Receive the Fiscal Year 2024/25 Draft Budget, (ClearGov)
2. Set dates for a budget work shop in June, (the 6th or 11th of June?)
3. Schedule the budget for adoption at its regular June 18, 2024 City Council meeting, and
4. Request the Mayor to appoint two members of the City Council to a special “Public Safety Contract Negotiating Team,” focusing on the Fire Services contract as an immediate priority.
• The draft Budget was received by the City Council, posted on the website and made available in hard copy to the public. It includes details about the City Manager’s proposed personnel changes, and a two-page summary of the City’s priorities and issues.
The list of accomplishments is plentiful and has been published in the City Manager’s June Village Voice article. The May 4 2024 workshop to update the 5-year Strategic Plan now one-year old. The Council considered the remaining 63 objectives and prioritized 25 of them to be addressed in the next Fiscal Year. These have been integrated into the draft Budget.
• A workshop date was not decided until Thursday the 30th of May, to be Monday June 3, at 5:30.
• The Budget was scheduled for adoption at its regular meeting June 18, 2024.
Page | 2
• Mayor Freels and Mayor Pro-Tempore were appointed to review the Public Safety contracts starting with Fire.
DISCUSSION
The draft Budget presents stable expenditures in the light of having “stable” flat revenues.
Personnel changes proposed do not increase expenses when compared to the prior year. There would be a net savings of $7,000, with a slight increase after adding a 3.3% cost of living adjustment. Issues outlined in the report include reconsidering economic vitality, and the underpriced services of public safety contracts.
PUBLIC SAFETY CONSIDERATIONS
The implementation of the Public Safety re-organization is underway. The Public Safety Coordinator has been hired with interview for the new full-time Officer position being held this week. The private security firm is on notice that their contract will end June 30, 2024. The Sheriff’s request to add an additional position for San Juan Bautista was recently denied by the Board of Supervisors. The $150,000 set aside for this has been removed from the budget.
The City’s fire contract cost is equal to $188 per-capita, while Hollister is paying $215 per capita. This is an important vulnerability according to a review from a retired fire chief from CityGate. The City’s annual contract of $260,000 could be adjusted twice this amount if the City of Hollister wished to fully recover its costs. However, there are a lot of variables to consider including the use of the City’s fire station to serve the western unincorporated County. The City did request additional data from Hollister that has not been received. For now, it is recommended that the City start a new “Disaster Preparedness” reserve account as recommended by Citygate. The intent is to have sufficient cash-on hand in the event of a large natural disaster, so response time is not lost liquidating assets to pay for urgent health and safety needs.
GENERAL FINDINGS
Following the May 21, 2024 budget discussion, staff had an impactful conversation with CityGate’s Andy Green. His suggestions are attached. He agrees with Wendy Cummings, the City’s CPA that the City’s finances are very healthy, even healthier than they were when he first analyzed them before COVID hit in 2020. He writes in his attached summary, that the City has time to take the necessary steps to bolster its revenues considering the vulnerabilities it has identified in its public safety contracts.
If the City is called upon to come up with a sizable cost increase, it has two resources it can rely on the current General Fund Reserve of more than $1.5 million, and the debt owed to the General Fund from the Water Enterprise Fund ($800,000). The Water Enterprise fund balance is estimated to be over $2 million by June 30, 2025. These resources can carry the City for more than a year if necessary while it considers options to increase revenues.
In Andy Greens’ letter, he recognized that the City has the potential its State sales tax limit to add another .5%. Even a .25% increase could increase the General Fund by $250,000. But Item: 2.A
City Council Meeting
Date: June 3, 2024
Page | 3
before a tax measure is considered, the City should first evaluate its current percent received of .75%. This began in 2022, and should have begun sooner. It should also be 1% not .75%. The City has a little less than a year to consider a sales tax measure on the November 2025 ballot.
Staff needs more time to consider these ideas and return to the Council in mid-summer with firm recommendations. For now it is comforting to know that City resources are secure, and sustainable for the near future, but it has to plan soon for the five-year horizon.
RECREATION
Also on May 21, 2024, the City received a presentation from its Recreation Assistant Caitlan Brady. The Personnel changes recommends that this position become a full-time position. Extra hours can be dedicated to serving local nonprofits to provide services in the City. A grant award of $50,000 is recommended this first year, to be award amongst several local non-profits that participate in an annual solicitation and award process.
No decision was made concerning charging for recreation programs. Staff is therefore recommending that $50,000 be added to the Revenues as “Recreation Program Income,” and that the Operational Budget for Recreation be increased equally. The City can then begin charging a nominal fee for its programs and use these revenues as leverage to increase capacities of a local non-profits ability to serve its youth and seniors. Maybe enough revenue can be raised to pay for a part-time position.
CAPITAL IMPROVEMENTS
The City is still working on its Capital Improvement Plan (“CIP”) budget with the help of MNS Engineering. On Thursday May 30th, 2024 a rigorous review resulted in a blue-print that will move the City into the next several years.
Streets
The City will be embarking on a new Street Improvement program (Pavement Management Plan or PMP) valued at $2 million, a sidewalk program, and submitting a grant for new bike lanes on a north-south route through town (Active Transportation Planning “ATP” grant). It should learn this month about the $350,000 grant submitted to Cal Trans for the Third Street Transformation and multi-model transportation hub for the Alameda. The Right Turn Lane on Highway 156 should be built in conjunction with the new gas station this coming fiscal year. This is being paid for by the developer.
Utilities
Upgrades to the Rancho Vista Lift Station and the Diaz Lift Station are on the schedule again this year. These improvements will be paid in part by developer contributions and sewer enterprise funds.
The sewer force main to Hollister will have spent $7 million of its $17 million construction budget as it heads into its third year ($20 million total including design CEQA mitigation, and Page | 4
ROW Acquisition) . It will not be completed until 2025. Last week the City received State approval to extend its deadline for its compliance with the Settlement Agreement consistent with this estimate. Also last week, staff met for an hour with the Vice President of Operations for Taylor Foods to discuss permit limits, and changing their entry into the new force main, rather than pumping into the City. Some of their wells are older than ours.
The Microvi program is being bid and installed this fiscal year. This will use $250,000 of the Water Enterprise fund balance.
The import of drinking water is budgeted this fiscal year, to be completed by June 2024. Staff has already received warm welcomes from legislators regarding state and federal funding in support this $15 million project. The rate increase appears to be sufficient cover the debt service of a $10 million low interest loan if necerssary, and the USDA is in a favorable position to help.
Congresswomen Lofgren has been very supportive of her new city! (thank you).
Parks Projects
Abbe Ball Filed lights are the number 1 priority. The City needs to be certain that its new lights are complaint with the Dark Sky requirements in its municipal code and is seeking a consultant to help with and to develop specifications. This project relies on $150,000 from the General Fund Reserve.
The Track and Field contribution of $50,000 remains in the Budget but may not be used until the seismic retrofit is completed at Anzar School. The Luck Park historical improvements remain budgeted at $100,000. Design for these improvements is underway and a structural engineer evaluation is being scheduled.
Facilities
HVAC system for City Hall is being estimated for the budget. A new flat-roof for the Fire Station is being budgeted as well.
A kennel is planned for placement at Well 6 to provide for overnight emergency animal storage, to act as a transfer station to an animal control facility or return to the owner. Meetings are underway with Hollister PD to provide services. The Hollister City Manager has request a proposal for SJB from the Chief.
Equipment
“Fleet Electrification and Replacement” was budgeted last year at $250,000, but the 3CE grant arrived at $14,000. The current plan conceived by the City Engineer includes two charging stations; one private at the City Yard and one public at City Hall to be shared between the City and the public. For the Yard, this 5-year program is looking at 2 mid-size electric or hybrid utility trucks, and one full-size utility truck. For City Hall one sedan is being priced at less than $40,000. This would be a fleet vehicle. A second is needed to replace the current enforcement vehicle.
Item: 2.A
City Council Meeting
Date: June 3, 2024
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Special Projects
A Fee and Impact study was budgeted last year, but action was not taken. It remains budgeted for this fiscal year.
Citygate studies and homeless programs have been removed. The City is able to use its PLHA Grant funds to contribute to homeless services in San Jaun Bautista and the region. The Citygate studies have been exhausted for now. The City may want to eh budget for sales tax initiative feasibility study- looking at the five-year revenue enhancement plan.
The UGB and Housing Element programs must be continued into the new fiscal year and these balances will carry forward. They were both originally funded in part by the American Rescue Plan. So was the Third Street Master Plan.
Direction is needed for the Public Safety Initiative. The security cameras have been installed and are working now. This project spent only half of the $200,000 budget. Staff recommends that the balance remain in reserves, until such a time that the newly formed Public Safety Department reconvenes its Committee.
SUMMARY
The City’s draft budget presents healthy fund balances in the critical accounts. The General Fund, and Sewer balances exceed $1.5 million. The Water Fund Balance exceeds $2 million.
Some of the sewer and water fund balances are needed to support the Utility CIP described above. As represented May 21, 2024, the General Fund expenses are 5.6% higher than last year, while revenues are 8% higher. This results in an anticipated excess of $143,591.
This report suggest the City use $50,000 of that for nonprofit grant program, and $7,000 to help absorb the cost-of-living increase. It is recommended that the proposed $100,000 increase to the fire contract be removed and instead be used to start a disaster reserve fund. If approved, this would net $87,000 to be added to the General Fund Reserve.
The City may want to budget a sales tax feasibility study with $40,000 of this amount to prepare for revenue enhancements in the form of a sales tax initiative for the November 2025 ballot.
FISCAL IMPACT:
Feedback received at this workshop will be integrated into the final draft budget presented June 18, 2024.
ATTACHMENTS:
May 21, 2024 Budget Transmittal
Citygate’s (Andy Green’s) updated fiscal assessment
Item: 2.A
City Council Meeting
Date June 3, 2024
Page | 1
CITY OF SAN JUAN BAUTISTA
CITY COUNCIL STAFF REPORT
DATE: MAY 21, 2024
DEPARTMENT: CITY MANAGER
FROM: DON REYNOLDS
BY: DON REYNOLDS
TITLE: FISCAL YEAR 2024/25 DRAFT BUDGET
RECOMMENDED MOTION:
Four recommendations are before the City Council:
1. Receive the Fiscal Year 2024/25 Draft Budget, (ClearGov)
2. Set dates for a budget work shop in June, (the 6th or 11th of June?)
3. Schedule the budget for adoption at its regular June 18, 2024 City Council meeting, and
4. Request the Mayor to appoint two members of the City Council to a special “Public Safety Contract Negotiating Team,” focusing on the Fire Services contract as an immediate priority.
RECOMMENDATION:
It is recommended that the City circulate the draft Budget for public comment and feedback, and appoint a City Council Ad-Hoc Committee to weigh the City’s options for fire services.
EXECUTIVE SUMMARY:
Following the acceptance of the Audit (Resolution 2024-04), the Budget “cadence” considered the need for mid-year adjustments which were handled without cost increases to the General Fund using savings accumulated from vacancies primarily the cost of the second dedicated deputy that is not been filled.
This year the revenues are stable and in line with the predictions made in June 13, 2023 when the Budget was adopted. For FY 2024/25, and for the second straight year, the General fund is projected to grow less than 1%. As presented, expenses are currently budgeted lower than in previous years. Sales Tax is projected to decrease ten percent.
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This year the expenses are also in line with anticipated costs, with one exception; the fire services contract. On May 6, 2024 the Hollister City Council directed staff to re-evaluate this contract with the City. This may impact the City's General Fund Balance.
BACKGROUND:
The Mid-Year budget staff report reviewed the status of the various City initiatives. All are progressing except Economic Development. Recreation has been very popular and is continuing to grow without stretching the General Fund beyond capacity. The reorganization of the Public Safety function is also underway as the City prepares to hire its second FTE Community Service Code Compliance Officer position and can terminate its contract for private security. The City is almost fully staffed with two recruitments closing in May.
The City has an ambitious Capital Improvement Plan. Street improvements are more costeffective on larger scales. Funds have been saved now since 3 fiscal years, and have been accumulating sufficient funds have been accumulated to plan for large projects next fiscal year.
The Pavement Management Plan will be used to determine which streets get the attention next.
Several building improvements were completed this fiscal as shared at Mid-Year. Luck Park historic improvements are in a design mode, and the Library is completing its rain gutters and new door. Abbe Park ball field lights are in the cue.
The most critical infrastructure improvements are the water and wastewater systems. The wastewater project is under construction with an updated completion date of June 2025. The water project stalled while the GM leadership was in flux, but design is again underway. The City is working hard to pay for the project with grant and low interest loan financing like it was successful doing for the sewer project.
DISCUSSION
Attached to this report are several narratives that are part of the “Cleargov” Budget Book. The link to the ClearGov budget book is here:
https://city-san-juan-bautista-ca-budget-book.cleargov.com/16341 Attached this report and embedded in the draft Budget is the updated Strategic Plan discussed at the May 4 workshop. This includes a list of accomplishments from Fiscal Year 2023/24, a summary of the newly considered Strategic Plan, and an 11-page list of 63 goals for the City to complete. These are prioritized, and 25-of the goals are part next year’s focus.
Following that is a two-page summary of Budget Issues and Priorities. It describes the Hollister’s City Council decision Monday May 6, 2024, to re-open the fire services contract for discussion.
Without a growing source of General Fund Revenue, this appears to be the biggest threat to a “business as usual” approach for FY 24/25. The City pays $130 per capita for fire services.
Hollister’s $14 million budget serving the County is closer to $215 per capita. Hollister could come back with a suggested increase of more than $100,000. This why staff is seeking the Mayor’s appointment of a 2-Councilmember Ad Hoc Committee to help monitor the fire services contract Item: ___
City Council Meeting
Date
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should it fall into negotiations before it expires December 31, 2025. It also describes the low cost of law enforcement, and how that may pose a threat to the general fund is the contact is reopened.
The fourth attachment is the proposed personnel changes for FY 2024/25. These changes are significant in that they reduce the cost for community development services by eliminating the Assistant City Manager/Director of Community Development position, and replace it with an Associate Planner position. It expands Recreation from 30-hours per week to full-time. A net savings of $7,000. A Cost of Living Allowance (“COLA”) increase of 3.3% is also recommended.
The City has received two requests for funding; one from a not-for-profit and a second local artisan. These include $5,000 to support the re-establishment of the San Benito Leadership Academy and $1,500 for the Credo Mandala project. They total of $6,500 can be funded from the current “General Government” Department Budget (45). 2-more have been received since the MidYear budget review. It is proposed that if the Recreation position becomes full-time, that it establish a non-profit funding program that allows all interested parties an equal playing field, governed by City Council Ad-Hoc Committee. There will be an annual application process, deadline and funding recommendation.
As stated at Mid-Year, The City needs to revisit Economic Development. The cities and County strategies have to be in alignment. At its last meeting October 18, 2023, the EDCAC was to consider the need for an Economic Development Strategic Plan. Simply put, “if you do not have a plan, you might wind-up somewhere you don’t want to be.” The packet for the October 18 meeting includes a San Juan Bautista Economic Development Strategy completed by a Cal Poly student in 2014. It is interesting and perhaps a good place to start.
One more issue for consideration is fostering leadership in the City Council and appointed committees. Currently there is no compensation for these positions. Perhaps the City would consider offering health benefits for those that service 4-year appointed or elected terms. Maybe that could attract more interest people to consider the work involved.
CAPITAL IMPROVEMENTS
Street improvements are turning in Fiscal Year 2024/25 using the Pavement Management Plan to guide priorities. The City recommends adding the drinking water CIP to this year’s CIP, the Microvi water treatment program, and heating air conditioning for City Hall and the Chambers. It looks to electrify the fleet and includes an electric vehicle, and charging stations. It will also include a budget for replacement of the City's fire engine to be leased, rather than bought.
FUND BALANCES IN THE DRAFT BUDGET
The draft Budget includes $100,000 additional funding for Fire Services, reduces the Law Enforcement contract by $150,000 for the second deputy, and removes the private security contract. It is currently projected for the City to have an extra $143,591 of revenue above costs by June 30, 2025. Also to be noted is that two of the assessment districts will rely on a transfer from their fund balances to keep these budgets in check. They have sufficient reserves to handle this.
The landscape contract was awarded last fall for three years, and is secure for another two years.
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As noted every year, the General Fund subsidizes Community Development, because planning fees do not cover 100% of the costs. The costs that are not being recovered are for advanced planning to include the Housing Element and changes to the zoning code.
Fund Revenues Expenditures Surplus
General Fund 2,480,525 2,336,934 143,591
Sewer Enterprise 1,960,000 1,051,569 908,431
Water Enterprise 1,718,000 862,288 855,712
Community Development 124,150 678,912 (554,762)
COPS 100,000 100,000 -
Perm. Local Housing 71,585 71,585 -
CFD Z2 Rancho Vista 67,512 42,718 24,794
Valle Vista Lighting Dist. 23,889 28,244 (4,355)
CFD Z1 Copperleaf 16,645 22,197 (5,552)
Gas Tax 108,000 21,000 87,000
Parking & Restroom Fund 28,000 - 28,000
TOTAL 6,698,306 5,215,447 1,482,859
FISCAL IMPACT:
This report summarizes the proposed impacts of the draft Operations Budget and Capital Improvements. The City’s revenues and expenses are in line. The proposed re-negotiation of the Fire Budget remains the biggest concern moving a head into the new Fiscal Year.
ATTACHMENTS:
Budget Narratives from the Cleagov Digital Budget Book
Strategic Plan
Priorities and Issues
Recommended Personnel Changes
2023/24 Organizational Chart
From: Andy Green
To: Don Reynolds
Cc: Wendy Cumming
Subject: Public safety cost discussion
Date: Wednesday, May 29, 2024 7:03:22 PM
Don
Per your request, the following is a summation of our conversation relating to potential increased public safety costs. Some things to consider regarding the public safety issues include.
Ensuring that a deeper dive on what SJB’s actual cost is for Hollister providing the services. Using calls for service is one measure but shouldn’t be the only measure because things such as travel time, severity of call, type of call, population served, actual location of service call, etc. also drive the identification of cost of providing service.
SBJ is only receiving .75% of the 1% Bradley Burns sales tax allocation per the information on salestaxhandbook.com. You need to find out if that is truly the case and if so why. Given the confidential nature of sales tax info with the State, an authorized representative from the city will have to contact them to get an explanation. I have contacted Wendy and she told me that she will contact the State when she returns from vacation. Per the reviewed sales tax website SJB didn’t receive any Bradley Burns until February 2022 when it was set at .75%. But the city has been receiving sales tax revenues prior to 2022 so I assume SJB’s allocation is included in the special tax allocation reflected on the website. If this is correct, an additional .25% would generate approximately $250k for SJB per year based on FY24 budget estimates for sales tax. A .25% increase in SJB would bring its total sales tax rate to 9.25%, which is the same as Hollister’s.
I would also recommend stressing the financial stability that SJB has due to forward thinking and early identification of issues and the early development of action plans to address issues. As a result, SJB has built up significant reserves that can be used to allow time to implement long-term solutions to public safety and other issues through strategically planned actions. These reserves could be used as a stop gap to allow time to develop and implement a long-term solution such as a sales/transaction tax measure, which would also allow for the planned replenishment of reserves.
As you know getting a successful sales/transaction tax measure requires a strategically planned process that usually takes time, so some additional items to consider in the shortterm include:
Review of SJB cost allocation to other funds to ensure that the General Fund is receiving full cost recovery from those funds.
Review outstanding loans due the General Fund to ensure that an appropriate repayment plan is in place.
Determine if lease of fire station amount is at market rate to help offset potential increases in fire services contract.
Work with Hollister to develop a phasing approach of any additional costs associated with public safety services identified after true cost of service amounts have been identified.
Let me know if you have questions or need something else. Thanks Andy
Andy Green, MBA
Senior Associate
Citygate Associates, LLC
P: (916) 458-5100
C: (626) 497-6490
[email protected]
www.citygateassociates.com
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