CITY OF SAN MATEO
City Council Special Meeting
April 17, 2023
5:30 PM
Council Chambers
Entrance is on O’Farrell Street
COUNCIL MEMBERS
Amourence Lee, Mayor
Lisa Diaz Nash, Deputy Mayor
Rich Hedges
Adam Loraine
Rob Newsom Jr.
AGENDA
THIS MEETING CAN BE ATTENDED IN PERSON OR REMOTE BY JOINING ZOOM – SEE CODES BELOW.
PUBLIC COMMENTS WILL BE ACCEPTED BOTH IN PERSON AND REMOTEL Y.
SEE END OF AGENDA FOR OPTIONS AND INSTRUCTIONS ON HOW TO PARTICIPATE IN THE MEETING.
To join via Zoom – click here:
April 17, 2023 Zoom Meeting
To join via telephone: (408) 638-0968
Webinar ID: 860 5908 5715 Passcode: 770344
CALL TO ORDER
Roll Call
CLOSED SESSION
The public will have an opportunity to comment before the consideration of these items. Following the meeting a report of action from Closed Session will be provided if required.
1. Conference with Labor Negotiators (Government Code Section 54957.6) City designated representatives: Stacey Cue, Teresa Abrahamsohn, Rich Lee, and Yumi Maeda Employee Organization: Service Employees International Union (SEIU) Local 521 Library Merit and SEIU Local 521 Per Diem, and San Mateo Safety Management
NEW BUSINESS
The public will have an opportunity to comment during the consideration of these items.
2. 2022-23 Budget Update, 2023-24 Operating Budget, and 2023-28 Capital Improvement Plan Preview Receive the 2022-23 budget update and provide feedback and direction on the 2023-24 operating budget and 2023-28 Capital Improvement Plan.
CEQA: This budget update and budget preview is not a project subject to CEQA, because it is a government fiscal activity which does not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment. (CEQA Guidelines Section 15378(b)(4).)
ADJOURNMENT
----------------------------------------------------------------------------------------------------------------------------- AGENDAS:
Agendas and material are posted on the City’s website on the Friday preceding each Council Meeting and can be viewed on the City's website at
www.cityofsanmateo.org
. Any supplemental material distributed to the Council after the posting of the agenda will be made part of the official record.
WATCHING A MEETING ON TV:
City Council meetings are broadcast live on Comcast/channel 27, Wave/channel 26, or AT&T/channel 99.
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For transmission problems during the broadcast, please call (650) 522-7099. For all other broadcast comments, call (650) 522-7040, Monday-Friday, 8 a.m. - 5 p.m.
WATCHING A MEETING ON A COMPUTER:
There are three ways to stream.
1) Public Meeting Portal
www.cityofsanmateo.org/publicmeetings
2) City YouTube channel and stream it on YouTube:
http://youtube.com/CityofSanMateo
3) Watch TV live stream:
https://www.cityofsanmateo.org/193/Channel-San-Mateo-Live-Stream
PUBLIC COMMENTS/REQUEST TO SPEAK
Prior to the Meeting
Send comments to:
[email protected]
until 4 p.m. the day of the meeting.
During the meeting
By Zoom:
Click the link at the top of the agenda and you’ll be added to the meeting. All attendees are muted by default. When the item of interest is open for consideration, select the “Raise Your Hand” icon and you will be called on at the appropriate time.
By telephone:
Call (408) 638-0968 and enter the conference ID found at the top of the meeting agenda. When the item of interest is open for consideration, select *9 to raise your hand. When called upon, press *6 to unmute, state your name and provide your comments.
In Person:
At the meeting complete a “Request to Speak” form, submit a request at the speaker kiosk or scan the QR code.
ACCESSIBILITY:
In compliance with the Americans with Disabilities Act, those with disabilities requiring special accommodations to participate in this meeting may contact the City Clerk’s Office at (650) 522-7040 or [email protected]
. Notification 48 hours prior to the meeting will
enable the City to make reasonable arrangements to ensure accessibility to this meeting.
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CITY OF SAN MATEO
Agenda Report
City Hall
330 W. 20th Avenue
San Mateo CA 94403
www.cityofsanmateo.org
Agenda Number: 2 Section Name: NEW BUSINESS Account Number: 10-2031 File ID: 23-7342 TO: City Council
FROM: Drew Corbett, City Manager
PREPARED BY: Finance Department
MEETING DATE: April 17, 2023
SUBJECT:
2022-23 Budget Update, 2023-24 Operating Budget, and 2023-28 Capital Improvement Plan Preview RECOMMENDATION:
Receive the 2022-23 budget update and provide feedback and direction on the 2023-24 operating budget and 2023-28 Capital Improvement Plan.
BACKGROUND:
Operating Budget
The focus of the operating budget section of this agenda report is on the General Fund, which is the City of San Mateo's chief fund, as it accounts for all major tax revenues and pays for core services, including police, fire, library, parks and recreation, and city administration.
2022-23 BUDGET UPDATE
The 2022-23 mid-year budget update presented to the City Council on February 6, 2023 estimated General Fund total revenues of $163.8 million and total expenditures of $164.0 million. Based on February 2023 year-to-date trends, total revenues are expected to be $157.5 million, and total expenditures are projected to be $164.6 million.
GENERAL FUND REVENUES
The $6.3 million reduction of total revenues compared to the previous mid-year budget estimate reflects expected revenue estimate changes for property tax in lieu of vehicle license fees and real property transfer tax.
Property Tax In-Lieu of Vehicle License Fees (VLF)
The previous VLF estimate of $19.8 million was greater than what was assumed in the adopted 2022-23 budget, which anticipated that the VLF shortfall would be greater than what was estimated at the time of the previous mid-year budget.
However, based on a recent presentation by the San Mateo County Controller’s Office, the San Carlos School District and the Ravenswood School District are only $100,000 and $45,000 below the basic aid threshold, respectively. The lower VLF estimate of $16.4 million presumes that both school districts will shift to basic aid status, which will increase the county- wide VLF shortfall to $70 million, of which the City’s projected share would be $4.1 million. The difference between the previous estimate and the revised estimate is a reduction of $3.4 million. Consistent with prior practice, the County of San Mateo, on behalf of itself and all the municipalities within the county, will file a claim with the State of California in August 2023 for the $70 million VLF shortfall, which the State will consider as a part of its 2024-25 budget for appropriation. As a matter of reference, the State’s proposed 2023-24 budget that was released in January 2023 does not include any appropriations for the 2021-22 VLF county-wide shortfall of $32.9 million (of which the City’s share is $1.9 million). The City Council approved a letter that was signed by Mayor Lee which was addressed to state representatives to address this matter.
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Real Property Transfer Tax
The remaining revenue reduction is directly related to the continued escalation of the federal funds rate, the direct nexus to the mortgage interest rate, and the resultant impact on the City's real property transfer tax (RPTT) revenues. Through the collection period of February 2023, the City has received $4.9 million in RPTT. During the months of November, December, January, and February, RPTT revenues were 43% of the average of what was received in fiscal years 2020-21 and 2021-22 for the same months. Assuming the remainder of fiscal year (FY) 2022-23 will be consistent with this recent trend, the collection period of March through June will account for $1.4 million in RPTT, and result in a revised year-end estimate of $6.3 million, which is a reduction of $2.7 million from the previous year-end estimate of $9.0 million.
GENERAL FUND EXPENDITURES
The additional $0.6 million in expenditures reflects subsequent supplemental budget appropriations that have been approved by the City Council since the last mid-year budget review in February 2023, which include but are not limited to the following:
•Police Department Headquarters roof design - $150,000
•Community Fund contribution for winter storm relief - $150,000 •Pedestrian Mall Design Project - $130,766
If the updated year-end estimates come to fruition, the General Fund will realize a net loss of $7.1 million, which is an unfavorable variance of $2.5 million from what was assumed in the 2022-23 adopted budget. 2023-24 BUDGET PREVIEW
Since 1984, the City of San Mateo's practice has been to prepare a two-year business plan. Year one of the business plan focuses on the operating budget, in which the cost to provide core services to the community is scrutinized to ensure that resources are allocated appropriately. Year two focuses on the capital improvement plan (CIP), providing more detail in the CIP section of the budget document than is provided in year one. The five-year CIP is updated on an annual basis, reviewing assumptions and availability of funding sources and the prioritization of capital needs. FY 2023-24 represents year two of the two-year business plan. As such, requested changes to the operating budget are relatively modest, and the information provided for the CIP is more robust.
Based on preliminary operating budget assumptions, General Fund total revenues are projected to be $160.7 million and total expenditures are projected to be $172.2 million. If these preliminary budget assumptions come to fruition, the General Fund would realize a net loss of $11.5 million. The narratives below articulate the budget assumptions for major General Fund revenues and expenditures that contribute to the projected net loss.
GENERAL FUND REVENUES
Property tax
Property tax revenues are the City’s top revenue source, and are projected to be $79.6 million in FY 2023-24, which is expected to constitute half of total General Fund revenues. The FY 2023-24 estimate is a decrease of $3.8 million compared to the FY 2022-23 year-end estimate, as the latter includes funds from the State of California for the City’s share of the property tax in-lieu of vehicle license fees (VLF) shortfall from fiscal year 2020-21 of $5.7 million. Current year secured property taxes, which constitute 61% of total property tax revenues, is assumed to increase 4%, which reflects the change in assessed value (AV). The change in AV is the lesser of the change in the California Consumer Price Index (CCPI) which was 7.27%, or 2% in accordance with Article XIII of the California Constitution. The remaining 2% increase in AV reflects:
1) Properties that have sold, which triggers recapture of fair market value, as the AV is reassessed based on the sales price of the property; and
2) New development that has been added to the City’s property tax roll or properties that have had significant improvements that trigger an increase in AV.
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Sales Tax
Sales tax revenues are projected to continue slow and steady growth in the wake of completing the recovery from the pandemic-driven recession that reduced sales tax revenues by 20% compared to the 2018-19 baseline. The Local 1%, known as the Bradley-Burns Uniform Sales and Use Tax (Bradley-Burns), is projected to account for $23.9 million while the local ¼%, known as Measure S, is projected to account for $7.3 million. The slow and steady growth is anticipated to continue throughout the General Fund Long-Term Plan.
Real Property Transfer Tax
While the 2022-23 results are unfavorable compared to the adopted budget due to the high interest rate environment, if the projections from the Federal Open Market Committee (FOMC) for the Federal Funds Rate (FFR) come to fruition, the FFR will decline from the current range of 4.75% to 5% (which reflects the 0.25% increase from March 2023) to a range of
3.0% to 3.25% by 2025. This scenario should provide a more favorable real estate market, especially for first-time homebuyers. Rather than try to determine the year-over-year trend, the General Fund Long-Term Plan uses an average of $8.0 million, including fiscal year 2023-24. Finance staff will continue to monitor market trends at the local and national level and adjust assumptions accordingly.
Transient Occupancy Tax
Transient Occupancy Tax (TOT) revenues are the only tax revenue that has not recovered from the COVID-19 pandemic.
Compared to the 2018-19 baseline of $7.0 million (in addition to a projected $1.0 million due to the voter-approved 2% increase in TOT rate in November 2020), TOT revenues are projected to be $6.0 million in 2023-24. However, based on projections from Tourism Economics and Visit California, business travel is projected to return to the 2018-19 baseline by 2024-25, which is reflected in the General Fund Long-Term Plan.
GENERAL FUND EXPENDITURES
Salaries and Benefits
Total employee compensation, including salaries, wages, overtime, healthcare, and pension, are projected to be $89.8 million. As a full-service city, in order to provide core services, over half of total General Fund expenditures are for employee compensation. The projected cost reflects negotiated increases in employee compensation, increases in the cost of healthcare, and increases in pension contributions. The latter of which will begin increasing significantly in fiscal year 2024-25 as a result of the California Public Employees’ Retirement System (CalPERS) investment loss of negative 7.5% in fiscal year 2021-22. As noted during the previous mid-year budget update, the investment loss will cost the City $177 million in additional pension costs over the next 20 years starting in fiscal year 2024-25, and by fiscal year 2028-29, an additional $10 million per year, which has been folded into the General Fund Long-Term Plan.
While the focus of fiscal year 2023-24 is on the CIP, as 2023-24 represents Year 2 of the 2-year business plan, the proposed 2023-24 operating budget includes $1.2 million in personnel additions; $0.4 million of which is attributable to the General Fund.
New staff positions are listed below with total compensation and cost allocation:
Community Development Department
•1.0 full-time equivalent (FTE) Principal Planner - $213,000; Allocated 25% to Advance Planning Fund and 75% Construction Services Fund
oThis position is needed to ensure the timely handling of the increased number of planning applications in accordance with State law, ensure the City achieves and remains in compliance with the high volume of new State land use laws, which expedite processing times and require policy and code changes, assist with and lead Housing Element and General Plan implementation tasks, including the comprehensive Zoning Code update, and assist the Planning Manager with streamlining permit processing and supporting staff with handing current planning tasks.
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•1.0 FTE Deputy Building Official - $197,000; Allocated 10% to General Fund and 90% to Construction Services Fund oThis position is needed to assist the Building Official with process improvements and help support staff on technical matters and complex customer service issues related to the approximately 4,000 permits processed each year, and which is increasing in volume and turnaround times commensurately with planning applications. The Building Division comprises approximately half of the Department’s staff and has not had a proportional amount of management support. Adding back this previously funded position into the organizational structure would provide the support needed to channel some of CDD’s resources toward staff mentorship and operational improvements to improve customer service and shorten permit processing and response times.
•1.0 FTE Development Review Technician - $120,000; Allocated 100% to Construction Services Fund oThis position is needed to field the high volume of building and planning inquiries we experience daily and process the intake of building and planning permits submitted, which continue to increase. Development Review Technicians are difficult to attract and retain, as compensation in nearby cities is competitive, while work volumes often appear to be lower. Further, firms that offer professional services often do not have staff available to fill this role, making if difficult to obtain help when there are unexpected vacancies in our DRT pool. Adding this position would provide for a more balanced workload when fully staffed, allowing us to focus on process improvements, and help to ensure customer levels can be maintained when we experience staffing shortages, which is not unusual for this position.
Parks & Recreation Department
The Recreation Division is reorganizing based on current programming needs. With recent vacancies, the department has an opportunity to reallocate resources into more front-line support positions and reduce overhead management positions.
With this proposed reorganization, the department will eliminate vacancies in the following areas: the community services manager, two supervisor positions, and two lead teacher positions.
In addition, a section manager position in the Police Activity League (PAL), will be downgraded to a supervisor role. This change is due to elimination of funding from PAL for the additional cost of the section manager.
Those vacancies will allow the addition of four new coordinator positions and one new senior program assistant position and the reclassification of a program assistant position to a senior program assistant position. This structure will allow the department to create better workflow, delegation and oversight of work projects and daily tasks, along with creating a more streamlined succession plan for long-term outlook and recruitment. This will allow for better service to the public and for streamlining of business operations. Funding for these changes will be close to budget neutral. These changes are subject to Bargaining Unit approval which will be in process shortly.
Public Works Department
•1.0 FTE Traffic and Lighting Technician - $138,000; Allocated 100% to General Fund oThe City has 90 traffic signals and 6,700 streetlights that are currently maintained by one Traffic and Lighting Technician and one Traffic Safety Worker. For traffic infrastructure of this size, the Federal Highway Administration (FHWA) recommends a staff of three Traffic and Lighting Technicians and two Traffic Safety Workers. While still short of the FHWA recommendations, an additional Traffic and Lighting Technician would help address the maintenance requirements to ensure the safe operation of the traffic infrastructure.
•1.0 FTE Associate Engineer - $168,000; Allocated 65% to General Fund and 35% to Construction Services Fund oThe Traffic Engineering group within Public Works is responsible for improving the operation of the City’s traffic infrastructure through the optimization of traffic signal timing for congestion relief; addressing safety concerns through the development of speed studies and the implementation of traffic calming projects; review of collision data for the development of traffic safety improvements; development of capital improvement projects such as the 101/Peninsula Interchange, Speed Limit Zone Reductions, High Voltage, and 19th Ave. / Fashion Island Traffic Improvements; and review of traffic impact analyses for new development. In addition, the group is responsible for leading studies, such as the Local Roadway Safety Plan, Traffic Signal Master Plan, and the Circulation Element of the General Plan. The group consists of one
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Senior Engineer, two Associate Engineers, an Engineering Technician and is resource limited, unable to address resident requests and the implementation of critical safety projects in a timely and efficient manner. Additional resources are needed to implement critical traffic calming and safety projects. •1.0 FTE Pump Station Mechanic - $134,000; Allocated 70% to Sewer Fund and 30% to General Fund oThe City has a total of 27 sewer and 10 storm pump stations that are currently operated and maintained by three Pump Station Mechanics and a Laborer. Ensuring that these critical facilities are properly maintained and operated requires additional staff, particularly during wet weather events. Many facilities do not have backup power and require the use of portable generators, which are rotated between stations to maintain the sewer system from backing up and creating sanitary sewer overflows. The storm pump stations require constant clearing of trash to avoid malfunction and flooding. With an additional staff, preventive maintenance measures can be more effectively implemented and response times during emergencies greatly improved.
•1.0 FTE Wastewater Treatment Plant (WWTP) Operator I/II - $139,000; Allocated 100% to Sewer Fund oWith the expansion of the WWTP, a staff derivation study was conducted to determine the adequate number of staff needed to operate the facility. An additional operator is needed to ensure that the facility is well monitored and operated to meet regulatory requirements.
Operating
Operating expenditures are projected to be $66.7 million and primarily consist of other operating costs besides employee compensation. These costs primarily reflect (but are not limited to):
•Operating contribution to the San Mateo Consolidated Fire Department - $27.5 million •Contractual services - $7.7 million
•Gas, electric, and water utility costs - $3.0 million
•General liability insurance - $2.5 million
The proposed 2023-24 budget includes $1.5 million in addition to the operating budget; $1.0 million of which is attributable to the General Fund. New additions of $50,000 or more to the operating budget are noted below by department:
Police Department
•Security improvements to property and evidence room - $60,000 oFunding is intended to address security and organizational concerns identified through a recent audit of the Police Department property and evidence room. The purpose is to enhance the digital locker system, upgrade storage systems for firearms and currency, as well as replace out of date non-ergonomic stations and evidence processing tables. Funds will also be designated for implementation of a more uniform storage system for existing evidence, reducing the chance of lost or damaged items stored for an extended period.
•Additional cost for digital evidence software - $93,000 oWith the ever-evolving world of technology, upgrades to forensic tools and equipment are necessary. This funding will be used to enhance the San Mateo Digital Forensic Extraction Team’s ability to perform full- file system and physical extractions from computers and cellular phones with the Cellebrite Premium Service. This new software will assist in accessing highly protected areas such as the iOS Keychain or the Secure Folder. Accessing third party application data, stored passwords and tokens, chat conversations, location data, email attachments, system logs, as well as deleted content, will increase the unit’s chances of finding the incriminating evidence.
•Police Department staffing study - $100,000 (one-time) oThe study is expected to result in the creation of a report outlining current capabilities and future needs of the Police Department based on growth and development within the City. The report will include the current status of the agency and actionable steps to improve, remodel, build or increase; facilities, personnel, and infrastructure.
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Public Works Department
•Additional street sweeper to address downtime associated with ongoing vehicle problems and reliability - $410,000 (one-time)
•Additional Marina Lagoon maintenance expenses for algae harvesting and other contract adjustments - $528,500 •Maintenance improvements for storm water pump stations, including pump replacements, instrumentation, monitoring and control modifications, diagnostics, and other general needs - $80,000 •Increase in software costs associated with Maintenance Connection and Supervisory Control and Data Acquisition (SCADA)/Wonderware - $50,000
•Anticipated increases to cleaning/sweeping services for the Downtown Kiku garage; current contract budgeted at $500k/yr - $81,000
Transfers Out
From an accounting perspective, the General Fund supports other needs by transferring resources out to other funds. For fiscal year 2023-24, total transfers out are projected to be $14.3 million:
•$7.3 million to support the City’s Capital Improvement Plan (CIP), which is $3.0 million more than the General Fund has historically contributed to the CIP;
•$3.8 million of Measure S funds to support the CIP;
•$2.7 million from Measure S to transfer out for debt service related to flood control and street rehabilitation; •$0.4 million building maintenance needs
•$0.1 million to support the 2% TOT Fund
GENERAL FUND LONG-TERM PLAN
Over the next 10 years, the General Fund is projected to draw down Rainy Day Reserves to as low as $16 million in 2030-31 and recover to $30 million by 2032-33. Key revenue and expenditure assumptions are noted below:
GENERAL FUND REVENUES:
•The State of California will continue to honor the escalating VLF shortfall claims. As the number of non-basic aid school districts continues to reduce, the VLF shortfall will continue to grow. If every school district reaches basic aid status in 10 years, the county-wide VLF shortfall could reach upwards of $370 million by 2032-33, of which the City’s share would be over $20 million.
•Inflation and the Federal Fund Rate will reach 3.0% by 2025-26. These metrics have a direct nexus to the interest rates available for purchasing homes, and by extension, the City’s real property transfer tax. •The majority of the City’s TOT base is from business travel, which is expected to return to the 2018-19 baseline by 2025-26. If the projections for General Fund revenues and expenditures come to fruition, the General Fund would realize a net loss of $11.5 million for 2023-24. As shown in the General Fund Long-Term Plan, based on revenue and expenditure assumptions, the City’s Rainy Day Reserve is projected to reach a low of $16.0 million in 2031 before recovering to the target reserve policy goal of $30.0 million by $30.0 million by 2033. •Policy H1.2 of the City’s Housing Element calls for the City to resume contributing 20% of the property tax that the City receives as a taxing entity from the former Redevelopment Agency (RDA), also known as ”boomerang funds” to the housing set aside in fiscal year 2023-24, which the City can use for affordable housing developments. The City suspended its practice due to the immediate and severe financial impact of COVID-19 in 2020. For 2023-24, this would result in $1.0 million shifting from the Rainy Day Reserve to the housing set aside.
GENERAL FUND EXPENDITURES
•Employee cost of living adjustments (COLA) will keep pace with long-term inflation at 2%. •Pension contributions will increase sharply starting in 2024-25 due to CalPERS’ investment losses from 2021-22.
Over the 20-year amortization period starting in 2024-25, the City will pay $177 million more in pension contributions. The General Fund Long-Term Plan assumes that CalPERS will meet its target rate of return (discount rate) for the remainder of the 10-year forecast.
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NET REDUCTIONS
Net Reductions reflect potential favorable deviations from revenue or expenditure assumptions. For example, the City’s long-term assumption for the increase in AV for property tax is 4%. In any given year, if the AV is greater than the long- term assumption, the City would recognize additional revenue. Conversely, the City’s vacancy assumption for non-safety positions is 2%. If the actual vacancy rate is greater in a fiscal year, then the expenditures would be less than projected.
The General Fund Long-Term Plan assumes net reductions of $3.1 million to $3.7 million each year.
The chart below illustrates the budget to actual deviations that have come to fruition over the past five fiscal years:
Capital Improvement Plan for 2023-28
The total Capital Improvement Plan (CIP) for 2023-28 is projected to be $290.0 million. The chart below illustrates the project type by fiscal year:
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Fiscal years 2023-24 and 2024-25 are projected to have $82.8 million and $75.7 million in CIP, which represents 54.7% of the 2023-28 CIP. The majority of 2023-24 and 2024-25 CIP is for Sanitary Sewer, primarily reflecting the remainder of the Clean Water Program.
The funding sources for the 5-year CIP are shown below. Commensurate with the Sanitary Sewer constituting the majority of project types, the Sewer Fund is the majority of the funding sources:
$-
$10
$20
$30
$40
$50
$60
$70
$80
$90
Sum of 2023-24 Sum of 2024-25 Sum of 2025-26 Sum of 2026-27 Sum of 2027-28 Utility Underground
Traffic
Streets
Street Lights
Stormwater
Sanitary Sewer
Parks
Miscellaneous
Buildings
Bridges
Bikeway/Pedestrian
Millions
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Transportation Improvement Fee and The General Plan
The City’s Municipal Code Chapter 27.13 established a transportation improvement fee (TIF) for new development to help fund transportation improvements necessary to maintain intersection improvements that will accommodate future growth. The TIF currently funds transportation improvement projects that are necessary to maintain consistency with the General Plan Policy (C2.1), which requires that intersections not exceed a vehicle-specific level of service or a certain amount of delay. Policy C2.1 is changing with the forthcoming General Plan Update. As such, the list of projects that are required to accommodate future growth will change in order to be consistent with the new General Plan policy. Once the General Plan is adopted, staff will develop a new list of traffic improvements that aligns with the updated General Plan policy, and then update the TIF. Future transportation improvement projects will be programmed into the Capital Improvement Plan once this effort is completed.
The narratives below list each project type, the total CIP cost over the five-year period, and major projects within each project type for the 2023-28 CIP:
Bikeway/Pedestrian - $12.4 million
1. 101/92 Multi-model (Fashion Island Boulevard) Class IV Bike Lane - $5.8 million
2. Bike San Mateo Program - $2.1 million
3. Delaware Safe Routes to School Corridor - $1.7 million $-
$10
$20
$30
$40
$50
$60
$70
$80
$90
Sum of 2023-24 Sum of 2024-25 Sum of 2025-26 Sum of 2026-27 Sum of 2027-28 Tree Replacement Fee
Traffic Impact Fee
Taxes, Fees & Charges
Sewer
RMRA
Private Contributions
Parks and Recreation Tax and Fees
Parking In-Lieu
Other Agencies
Miscellaneous
Measure W
Measure S
Measure A
Grants
General Fund
Gas Tax
Millions
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Bridges - $14.2 million
1. Bermuda Drive Bridge Replacement - $11.0 million
2. Citywide Bridge Maintenance - $3.3 million
3. Downtown Grade Separation Study - $1.1 million
Buildings - $37.5 million
1. New Central Park Parking Garage - $18.0 million (would require the City to issue debt)
2. Parking Facility Structural Repairs - $7.2 million
3. City Hall Projects - $3.2 million
Miscellaneous - $13.3 million
1. King Pool Assessment and Improvements - $6.1 million
2. Art in Public Places - $1.0 million
3. External Radio Infrastructure - $0.9 million
Parks - $26.3 million
1. Central Park - $10.0 million
2. Citywide Park Play Area Upgrade - $9.0 million
3. Synthetic Field Replacement - $2.0 million
Sanitary Sewer - $123.0 million
1. Clean Water Program Annual Citywide Sewer Rehabilitation - $27.6 million
2. Wastewater Treatment Plant and Flow Management Upgrade and Expansion - $26.6 million
3. Sanitary Sewer Pump Station Upgrades - $16.0 million Stormwater - $5.5 million
1. Small Trash Capture Devices - $3.8 million
2. Columbia Drive and Crystal Springs Road Storm Drain Channel - $1.4 million
3. Stormwater System Management and Improvement Program - $0.4 million Street Lights - $5.0 million
1. High Voltage Street Light Conversion - $5.0 million
Streets - $41.0 million
1. Citywide Street Rehabilitation Program - $33.2 million
2. Citywide Street Reconstruction - $7.1 million
3. Citywide Sign Inventory and Replacement - $0.5 million Traffic - $9.1 million
1. Grammercy Drive Retaining Wall - $2.4 million
2. Hillsdale Corridor Improvements – $1.9 million
3. Norfolk Street and Fashion Island Boulevard Intersection Reconstruction - $1.4 million Utility Underground - $2.7 million
1. 25 th Avenue Undergrounding – Phase II - $2.7 million Pavement Management and Smooth Streets Program
On February 6, 2023, the City Council received an informational update on the City’s Pavement Management and Smooth Streets Programs. In order to achieve the Council’s goal of eliminating all failed streets, Public Works staff articulated the need to maintain the annual investment in its streets at the status quo of $8.1 million. The Council discussed funding for street capital improvements, but desired to better understand what unfunded capital improvement projects could be
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funded if it reconsidered funding for streets. The table below demonstrates the impacts of various funding levels:
Funding sources for Streets CIP for 2023-28 are shown in the chart below:
Restricted reflects funding sources where use of the funds is restricted for specific purposes. For example, use of Gas Tax revenues is generally limited to public streets and highways. Other restricted funding sources include Measure W and Measure A; the latter of which is typically the City’s sole non-General Fund grant matching funding source.
Discretionary reflects funding sources that can be used for any valid governmental purpose – the General Fund and $4.7
$5.5
$6.6
$7.3 $7.3
$2.8
$2.6
$1.7
$1.0
$1.6
2 0 2 3 - 2 4 2 0 2 4 - 2 5 2 0 2 5 - 2 6 2 0 2 6 - 2 7 2 0 2 7 - 2 8 Restricted Discretionary
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Measure S, the latter of which was approved by San Mateo voters as a general tax in 2015. Over the five year CIP, there are $9.7 million in discretionary funding sources that represent the City Council’s capacity for redirecting CIP funding to address the City’s unfunded CIP.
Unfunded CIP
The 2023-28 CIP has $234.3 million of unfunded CIP of which $96.4 million has been evaluated as high or medium priority as shown in the chart below:
Focusing on the high and medium priority unfunded CIP projects, over $78.3 million could be funded by discretionary funding sources:
High/Medium
Priority
$96.4
41%
Low & All Else
$138.0
59%
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CITY OF SAN MATEO
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The chart below provides greater detail for unfunded CIP projects that could be funded with discretionary funding sources:
Discretionary
$78,327,000
81%
Restricted
$18,028,724
19%
Central Park
$23.5
Marina Lagoon Dredging
$15.7
19th Avenue Drainage
Area
$12.0
Laurel Creek Drainage Area
$9.6
16th Avenue Drainage
Area
$9.5
San Mateo Creek Drainage
Area
$2.6
All Other
$5.5
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CITY OF SAN MATEO
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As a simple example of a tradeoff, if the Council chose to redirect the $9.7 million in discretionary funding from Streets CIP for 2023-28, it could alternatively fund the Laurel Creek Drainage Area CIP project. The impact to the Streets CIP would reduce the funding for Streets CIP from the status quo amount of $8.1 million per year to $6.3 million per year. which would lower the average Pavement Condition Index (PCI) from the status quo of 67.
BUDGET IMPACT:
The revised mid-year budget update for 2022-23 projects General Fund total revenues to be $157.5 million and total expenditures to be $164.6 million. If the updated estimates come to fruition, the General Fund will realize a net loss of $7.1 million.
The projected 2023-24 budget for the General Fund estimates $160.7 million in total revenues and $172.2 million in total expenditures. If these preliminary budget estimates come to fruition, the General Fund would realize a net loss of $11.5 million.
The 2023-28 CIP projects $290 million in capital costs, predominantly reflecting the completion of the Clean Water Program, funded by the Sewer Fund.
ENVIRONMENTAL DETERMINATION:
This budget update and budget preview is not a project subject to CEQA, because it is a government fiscal activity which does not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment. (CEQA Guidelines Section 15378(b)(4).)
NOTICE PROVIDED
All meeting noticing requirements were met.
ATTACHMENTS
None
STAFF CONTACT
Rich Lee, Director, Finance
[email protected]
(650) 522-7102
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THE FOLLOWING PUBLIC
COMMENTS WERE SUBMITTED
FOLLOWING THE PUBLICATION
OF THE AGENDA PACKET
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From: Skye Nygaard
To: City Council (San Mateo)
Subject: Budget shortfall
Date: Monday, April 17, 2023 1:06:26 PM
I was alerted there will be a budget shortfall. I want to make sure that important bike and pedestrian improvements are not cut as a result. We cannot afford to delay our response to climate change.
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From: Kristie Eglsaer
To: City Council (San Mateo); Clerk; Amourence Lee; Lisa Diaz Nash; Adam Loraine; Rob Newsom; Richard Hedges; Azalea Mitch; Rich Lee
Subject: Comments for special study session (April 17 at 5:30) on the Budget and CIP Date: Sunday, April 16, 2023 5:10:31 PM
Dear Council and Staff,
The packet for the Study Session on the Budget and Capital Improvement Plan discusses project trade-offs when considering funding for streets (p.12/16). The trade-off example given was one example of one unfunded item (Laurel Creek Drainage project) that would reduce paving from $8.1M/yr to $6.3M/yr in order to fund that project (p.16/16). Beyond this one example, what other projects could be funded? It looks like the unfunded items listed were mostly drainage projects, but could, for example, pedestrian safety improvements also potentially be implemented?
In the FY 2023-24 Council Priority document, for the ped/bike priority, item 32, it says this priority will not require any additional resources above current budget baseline. But what could be done if more was spent on this priority than has been before?
The work plan for this item 32 in the Priority document lists:
- Delaware SRTS (also listed in this budget session's packet), - Fashion Island (also listed in this budget session's packet), - refining the bike programmatic timeline (maybe the Bike San Mateo Program listed in this packet?), and
- creating a ped plan implementation plan (there is nothing in this budget packet that talks about implementing the ped plans).
In considering budget trade-offs, what other infrastructure projects from ped/bike/transit/green infrastructure plans could get implemented this year if the City reduced the paving from status quo of $8.1M/yr to a lower amount, like the lowest paving funding option of $3M/year presented at the last study session? Could funds instead be spent on implementing ped/bike/transit/green infrastructure plans, like the 2012 Ped Plan Implementation Plan or the short-term projects in the TOD PAP Improvement Project List? Thank you for considering these trade-offs.
Sincerely,
Kristie Eglsaer
https://sanmateo.primegov.com/Portal/Meeting?meetingTemplateId=6820 https://sanmateo.primegov.com/meeting/attachment/8125.pdf?name=Att%201- %20Draft%20Priority%20List%202023-2024
https://www.cityofsanmateo.org/DocumentCenter/View/10061/10---Implementation?bidId= https://www.cityofsanmateo.org/DocumentCenter/View/89707/TOD-Pedestrian-Access-Plan-
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Recommended-Improvements-List?bidId=
On Feb 4, 2023, at 10:25 PM, Kristie Eglsaer <[email protected]> wrote:
Dear City Council,
I am writing to provide comments ahead of the Pavement Management and Smooth Streets Programs at Monday's special study session (Feb 6 at 5:30).
As reported at the January 2021 study session, paving funding is over 50 percent of the capital budget, higher than all other infrastructure capital projects combined, including trash, stormwater, ped/bike, bridges, facilities and more.
The City should rebalance the budget to align with
the City’s priority for complete
and sustainable streets.
The explanation given in the past for the high investment in repaving (50-60% of capital budget) is that if you repave a road while it's still good it costs a lot less than if you wait and then have to repave a road from poor quality up to good. The costs rise the longer you wait. But cost of deferred maintenance is just one cost to examine in a thorough cost-benefit analysis. A more thorough
cost-benefit analysis would include the total costs of our streets, with a review of climate change, health, travel time, costs of not investing in safety or stormwater management. At this very study session, the Council will consider a Winter Storm Damage Relief Fund
.
Permeable surfaces should be considered for bikeways, parking lanes, and streets with lower vehicle traffic volumes and limited heavy vehicles, which was recently adopted by New Orleans, another community that faces severe flooding exacerbated by climate change.
Paving can be approached through the lens of safety, sustainability and financial resource alignment opportunities. The city has already started heading in that direction to find opportunities to combine paving with ped/bike and stormwater and that trend should continue in a bold way - deprioritize projects that only repave
roads with no other safety or stormwater management improvements and prioritize paving projects that can be leveraged to also bring ped/bike safety and green infrastructure. Also, reducing the paving portion to fund stormwater and ped/bike safety outside the Paving budget bucket, like reducing
paving down to
even just 40 percent the city could fund the entire Rapid Implementation Network ($4M) of the Bike Master Plan over 3 years.
Thank you for your time and consideration and for all the city is doing to prioritize
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complete and sustainable streets!
Sincerely,
Kristie Eglsaer
https://www.sciencedirect.com/science/article/abs/pii/S0921800915000907? via%3Dihub
https://www.bankrate.com/insurance/car/car-crash-statistics/#the-impact-of-car- crashes
https://nacto.org/publication/urban-street-stormwater-guide/stormwater- elements/green-stormwater-elements/permeable-pavement/
https://www-nola-
com.cdn.ampproject.org/c/s/www.nola.com/news/politics/article_0f047728- 9bbb-11ea-91ea-5f1f267d28bf.amp.html
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From: Maggie Trinh
To: City Council (San Mateo)
Subject: Please KEEP Bike/Ped Improvements In The Budget! Date: Monday, April 17, 2023 3:19:44 PM
Good afternoon,
I am writing to urge that bike and pedestrian improvements plans remain in place (no deferral/delay). Just this morning, a student was injured by a driver when crossing the street to attend Borel Middle School. I have seen a number of complaints that drivers are going too fast down Barneson and sometimes don't stop at the crosswalk. Protected bike lanes will help with bicyclist and pedestrian safety by creating more visibility for cars as well as causing drivers to drive more carefully. We should prioritize bicyclist and pedestrian safety across the city as this will make our roads safer for everyone.
Thank you for your consideration.
Maggie Trinh
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From: Mark Eliot
To: City Council (San Mateo)
Subject: Proposed Capital Improvement Program budget, study session item 2 Date: Sunday, April 16, 2023 3:29:10 PM
Dear City Council,
One of the City Council priorities this year is to research a community budget process that would make it easier for the public to be involved in yearly budgeting. Unfortunately, the last two years the City has taken a step back in terms of budget transparency and detail
As recently as FY22 , the CIP budget included one-page summaries of new projects that included a description — project charter — of what work would be done, how they would be funded, and how much would be spent each year. Tables of funding sources for all projects estimated over five years were also included as were how each funding source was disbursed This year, new projects are not explained and the their funding profiles are not included. Instead, the top three project expenditures in general categories are listed and a stacked bar chart shows the sums of these categories per year. These summaries hide important details.
As someone who advocates for improved bicycle infrastructure, I find the way projects are presented in this CIP very opaque. For example, the CIP includes a project called the “Bike San Mateo Program” for $2.1 million over five years. On first glance, this appears promising but, without a project description, I really don’t know. If this program will accelerate the construction of infrastructure, I’m all for it. If it is an outreach, education, or planning program, I would not support it, because, for me, spending on quick-build infrastructure is the key. If this program will be supported by new discretionary funding, then I’m for it. If it reallocates money from other bike programs such that overall spending spending stays the same or declines, then I wouldn’t support it.
The CIP specifically discusses the Pavement Management and Smooth Streets Program and how it relates to funding sources (pages 13-15). While it is true the Gas Tax and Measure A are restricted, their restrictions are to street projects. Both could certainly be used for bicycle infrastructure. If they are not, that is the City’s decision and not some external restriction. Any decision to the reserve Measure A funding exclusively for matching grants is also an important strategic decision for the City Council. It should not be buried in a single sentence in the CIP and happen by default. Measure A can and, in the past, has been used for more than grant matching. For example, as of FY22 $650,000 of Measure A money has been spent on the US101/Peninsula Ave Interchange project. Again, the issue is that this year's CIP doesn’t show how Measure A (or the Gas Tax, Measure W, etc) will be spent.
The problem with this condensed budget is that the public just can’t see enough to have an educated opinion on what is proposed. I suspect that you, as City Council members, can’t either.
Please ask staff to again provide the charters for all new projects and each fund’s disbursement in this CIP. Please include these with the June final budget. Transparency and detail are especially important when you are spending public money.
Sincerely,
Mark Eliot
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From: Lisa Rayle
To: City Council (San Mateo)
Subject: Tonight"s meeting: please continue to fund bike and ped projects Date: Monday, April 17, 2023 12:05:31 PM
Dear council,
I'm a City of San Mateo resident writing about the study session in tonight's meeting. I understand the city has a projected budget shortfall. I urge you to preserve funding for all bicycle and pedestrian projects/programs currently in the draft CIP.
Implementing the bike and ped master plans ASAP should be a city priority. Improving the environment for biking and walking is one of the most important things we can do to improve safety, reduce traffic congestion, and meet our climate goals.
Thank you,
Lisa Rayle
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Dear City Council,
I am emailing as a parent of a Borel Middle School student. Another student got hit by a car this morning on the way to school. It occurred in front of Borel Middle School as the child crossed Barneson Avenue. I urge you to do whatever it takes to prioritize budget for safer and slower streets throughout the city, particularly along the routes that our children walk and bike to get to and from school.
Over 1,000 San Mateo students attend Borel Middle School. The block where it is located also contains a one-acre park that opened in 2022. The amount of foot and bicycle traffic in this area is beyond what is described in either of the existing Bicycle or Pedestrian Master Plans.
As President of the Borel Neighborhood Association since 2022, I have listened to many residents complain about cars speeding in the area around the school. I have personally witnessed cars failing to stop at crosswalks near the school even as pedestrians were in the middle of the street.
The packet for the Study Session on the Budget and Capital Improvement Plan includes a project called the “Bike San Mateo Program” for $2.1 million over five years. It is not clear what this program entails. If this program will accelerate the construction of infrastructure, I’m all for it. Spending on quick-build infrastructure is needed.
The CIP discusses the Pavement Management and Smooth Streets Program and how it relates to funding sources (pages 13-15). While it is true the Gas Tax and Measure A are restricted, their restrictions are to street projects. Both could certainly be used for bicycle infrastructure. If they are not, that is the City’s decision and not some external restriction.
There is nothing in this budget packet that talks about implementing the Pedestrian Plan. In considering budget trade-offs, what infrastructure projects from ped/bike/transit/green infrastructure plans could get implemented this coming year if the City reduced paving from the status quo of $8.1M/yr to a lower amount, like the lowest paving funding option of $3M/year presented at the last study session? Could funds instead be spent on implementing ped/bike/transit/green infrastructure plans, like the middle and lower priority Bicycle Master Plan projects and the 2012 Pedestrian Plan (with an update reflecting current number of students and traffic conditions at Borel Middle School and Borel Park!)?
Thank you for your consideration.
Sincerely,
Pam Rittelmeyer
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