ITEM *2
617/22
City Council Meeting
Item # 2 - Study Session #2:
Review of the Proposed
FY 2022/23 & FY 2023/24
CITY OF Biennial Capital Improvement
Program Budget and FY 2022/23
1852 Operating Budget Changes
THE MISSION CIT
June 7, 2022
Agenda
• Proposed Budget Overview
• General Fund Financial Forecast Update
• May 24th Budget Study Session Follow-Up
• Questions and Answers
• Library Community Room Rental Fees
City of
Santa Clara
The Center of Whats Possible
2 POST MEETING MATERIAL
1 Proposed Budget Overview
City of
Santa Clara
3 Proposed Budget Overview
• Biennial Capital Budget and Five-Year CIP, amendments to the FY 2022/23 Operating Budget ($1.1 B overall budget) • Five-Year CIP project funding of $624 M: utility projects ($509 M) and non-utility projects ($115 M)
• CIP identifies significant unfunded needs totaling $572 M • Ongoing capital funding sources needed to address needs • Limited Capital Projects Reserve (CPR) funds projects in CIP ($7 M) and projects funding in last CIP ($3 M)
• FY 2022/23 Operating Budget balancing strategy remains in place; $20 M projected General Fund shortfall to be
addressed in next Biennial Operating Budget
• Collaboration with all City departments
City of
Santa Clara
2 CIP Projects by Theme
2022/23 2023/24 Biennial Five-Year
Theme Budget Budget Budget CIP
Administrative Facilities $1,320,000 $1,551,000 $2,871,000 $2,871,000 Community Facilities 1,431,000 1,431,000 1,431,000
Convention Center 550,000
Electric Utility 93.832.936 184,175,278 278,008,214 389,769,831 Other Community Projects 9,460,082 6,453,710 15,913,792 34,882,959 Parks and Trails 3,028,920 278,000 3,306,920 7,806,920
Sewer Utility 19,045,006 17,797,655 36,842,661 92,217,360 Solid Waste 743,000 765,000 1,508,000 3,944,000
Storm Drain 761,000 714,000 1,475,000 1,475,000
Technology and Equipment 861,536 1,302,374 2,163,910 4,944,718 Transportation 12,869,832 13,790,232 26,660,064 61,725,510 Water and Recycled Water Utilities 6,715,000 5,215,000 11,930,000 22,835,000 TOTAL $150,068,312 $232,042,249 $382,110,561 $624,453,298 City of
Santa Clara
The Cent-o What Hose
5 CIP Projects - Capital Projects Reserve (CPR)
• Limited CPR funding of $9.9 M: $6.7 M for projects
in this CIP and $3.2 M for projects in last CIP Theme 5-Year Total - Standby generators
Administrative Facilities $2,871,000
- Repairs to City facilities and historic buildings
- Central Park Library concrete sidewalk Community Facilities $273,000 replacement Storm Drain $1,540,000
Storm drain pump Station motor and control
maintenance; slide gate rehabilitation; urban Technology and Equipment $1,270, 133 runoff pollution prevention Transportation $3,909,000
- Fire equipment Total General Fund CPR
- Bridge maintenance; sidewalk, curb and gutter Funding $9,863,133 repair; street tree services; annual curb ramp
installation; safe routes to school
City of
Santa Clara
6 3
Unfunded Capital Needs
Five-Year CIP Unfunded Needs = $571.6 M
• $572 M unfunded needs
over five years Community Convention
Facilities, $ 244.6 , Center,$ 12.7,
- Fire Stations 42.8% 2.2%
- Parks, Outdoor Spaces and Trails
- Community Facilities
Parks and
- International Swim Center Trails,
$ 141.5, 24.8%
- Streets and Roads Pavement
Administrative
- Traffic and Bicycle Safety Facilities, $ 75.5,
13.2%
- Storm Sewer System Storm Drains,
$ 35.3, 6.2%
- City Buildings Transportation, Technology and
$ 58.5, 10.2% Equipment,
- Historical Buildings $ 3.5, 0.6%
City of
Santa Clara
The Contero Whits Post he
General Fund Financial
Forecast Update
City of
Santa Clara
8 4
General Fund Forecast Update
• Continued economic improvement assumed;
uncertainty remains in terms of COVID-19
impacts and changing economic conditions Five-Year Revenues vs. Expenditures Projection Projected $7 M addition based on
(inflation, supply chain, war in Ukraine) $310.0 employee negotiations $19.6 M deficit
• Use of Budget Stabilization and Land Sale $290.0
Reserves to address $23 M shortfall in FY
$270.0
2022/23
Millio
$250.0
• $19.6 M shortfall projected for FY 2023/24
$230.0
• Impacting Factors not included in Forecast: FY 2022/23 FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 -- Projected Revenues - Projected Expenditures
- Higher/lower revenue growth (TOT, sales
- - Projected Expenditures w/Est. Labor
tax, property tax, program fees)
- Success of potential ballot measures
- Negotiated salary/benefits additional
costs of approx. $7 M ongoing
City of
Santa Clara
ine Corker of whats Postice
9 General Fund Budget Balancing Scenario
• Presented scenario in February with a strategy that would solve the deficit • Requires the following to close the $19.6 M gap + $7 M employee negotiations - New revenues ($7 M)
> Business Tax, TOT, New Fees FY 2022/23 General Fund Budget ($264 million)
- Position/Service reductions ($12 M) All Other Non-
Departments Discretionary
Approx. 15%
884 2234
• Approx. 75 non-sworn positions of Non- Public
Safety Depts
- Future Economic Growth ($8 M)
• One-time reserves and hiring controls Public Safety.
S101 MRA
(approx. $20 M - $30 M over 4 years to bridge recovery) City of
Santa Clara
10 5
Budget Balancing and Credit Rating
• S&P assigned the City of Santa Clara's "AA+" Independent Credit Review rating • The ratings reflect S&P's view of the city's:
- Stable tax base with very strong wealth and income indicators - Strong financial management policies/practices and strong institutional framework - Maintenance of a very strong 15% reserve position despite recent draws - Moderate leverage and large unfunded pension liabilities, which could be a source of budgetary pressure as costs continue to rise
• Downside scenario - should operating deficits persist beyond current projections, resulting in a material reduction in reserves, S&P could take a negative rating action, particularly if it is believed that the city is experiencing a sustained structural imbalance without a plan in place to reasonably restore balance City of
Santa Clara
The Center of What's Poss ble
11 Fiscal Sustainability
• Work to identify new ongoing revenue
sources underway
• Potential November 2022 ballot measures
- Modernize business tax
- Outreach underway with public and
business community
• Reduce the level of service disruptions
that may be needed
• Better position the City moving forward
City of
Santa Clara
12 6
General Fund Reserves
FY 2021/22 FY 2022/23
Estimated Proposed
Reserve Type Balance Balance
General Fund Budget Stabilization (BSR) $53.6 M $40.4 M* General Fund Capital Projects $6.7 M $0 M
Land Sale Reserve $22.4 M $12.7 M
Pension Trust (General Fund) $24.0 M $24.0 M
* The BSR reserve dropped to $36.6 million in the FY 2022/23 Adopted Budget; adjustment to $40.4 million to meet the 15% target in FY 2022/23 City of
Santa Clara
The Centero Wasts Foss be
13 Follow-up from May 24th
Budget Study Session
City of
14 Santa Clara
The Centere! What & Peatible
14 7
May 24th Budget Study Session Follow-Up
1. With a General Fund Budget Stabilization (BR) of $40.4 million, is there approximately two years of funding remaining if we drew down the entire BSR to address the General Fund shortfall? Response: Staff does not recommend completely depleting this contingency reserve as it would leave the City without the "rainy day" funds to address unexpected declines in revenues or other disruptions to maintaining essential services, leaving the city in an extremely vulnerable position. As seen with COVID-19, there can be circumstances beyond our control that materially impact the City's finances. For context, the BSR would cover the budgeted payroll costs in the General Fund for a little more than two months if there is a serious disruption in service. This action would also negatively impact the City's credit ratings.
2. There was interest in establishing a committee to handle resident complaints regarding the stadium, similar to the Neighborhood-University Relations Committee (NURC). What would be the ongoing cost to fund this committee and can it be supported by stadium concert revenues? Response: The estimated cost of the Stadium Neighborhood committee is premised on the Measure J requirement that all costs associated with the Stadium not be borne by the General Fund. The cost of this committee would be a Stadium Authority cost to the extent it works on stadium-related issues. The cost of $156k was based on the presumed key staff involved and an estimate of the hours required to support the committee (e.g., agenda preparation, reports, meeting time and follow up) with staff from the City Manager's Office, Police Department, Fire Department and Public Works Department.
City of
Santa Clara
The Center of What's Postbie
15 May 24th Budget Study Session Follow-Up
3. Is there a capital project to redo the entrance to Central Park given that the International Swim Center (ISC) is in such disrepair?
Response: The Central Park Master Plan - New Entrance, Access and Parking project ($2.5 M in FY 2021/22 will be carried over) is included in the budget. This project includes a new signalized entrance and drop off area necessary to complete safe access to the future Magical Bridge All Inclusive Playground, add 25 parking spaces (6 with EV charging stations), and provide recycled water to the large CP meadow and adjacent areas.
4. Council identified several capital priorities (replace fire station 5 and training tower, ISC, central Park lawn bowl, expand Central Park community center) and there was interest expressed in continuing to pursue a bond measure or potentially a targeted bond measure (e.g., fire facilities focused, swim center focused) Response: A bond measure requires two-thirds voter approval. The City polling on potential bond measures has not yet met the two-thirds threshold. Given the City's significant unfunded capital needs, staff will return in early 2023 to seek Council direction and funding to support a community outreach and engagement process to develop priorities for an infrastructure bond in 2024.
City of
Santa Clara
16 8
May 24th Budget Study Session Follow-Up
5. There was a suggestion to potentially add a Youth Activities Commission or explore other options to partner with other organizations/obtain sponsorships to help address needs and deliver services Response: The City has Youth, Parks & Recreation, Senior Advisory, and Cultural Commissions that provide feedback on programs and services as well as existing and proposed goals, priorities and activities. The Parks & Rec Dept. also conducts neighborhood and community surveys on those plans. Partnering with outside organizations is part of how we do business. The Department works with many service providers for special programs/services depending upon the community need and expertise. If additional effort is desired staff resources would be necessary to support this targeted effort and those resources would be determined based on the scope of that work.
6. A member of the public inquired whether any traffic signals were planned for the Cabrillo and San Tomas intersection and the Cabrillo and Scott intersection and/or whether any traffic calming efforts were planned given the accidents in that area.
Response: Staff is studying Cabrillo Ave. between Scott Blvd. and Los Padres Ave. for potential traffic calming improvements and intersection improvements at Cabrillo Ave. and Scott Blvd. including the potential for a signal (est. completion July/August timeframe). The intersection of San Tomas Expwy. and Cabrillo Ave. is within the County of Santa Clara's jurisdiction and has an existing signal. Staff has reached out to the County to see if any improvements are planned for this intersection.
City of
Santa Clara
17 May 24th Budget Study Session Follow-Up
7. Council expressed an interest in restoring the Drug Abuse Resistance Education (D.A.R.E.) Program in the Police Department.
Response: The School Services Unit within the Police Department is responsible for the D.A.R.E. program as well as other programs serving the schools and is assigned three Police Officers. The School Service Unit and the D.A.R.E. program were not reduced or eliminated by the City Council as part of the budget process. The D.A.R.E. program was suspended during COVID and because of other higher priority needs (e.g., patrol and mental health-related responses). Because of recruitment and retention issues, the positions assigned to the D.A.R.E. program remain unfilled. In January 2022, the Police Department launched a 6-month focused hiring initiative that has already resulted in eight new employees hired with 12 additional new hires coming as of the end of June. The Police Department currently has 8 Police Officer vacancies and 3 Police Officers in training that will be street ready by September.
City of
Santa Clara
18 9
May 24th Budget Study Session Follow-Up
8. Several one-time and ongoing funding requests to add or restore services. The balance of $325,000 from the Council Initiatives allocation was identified as a potential funding source Item One-Time Cost Ongoing Cost
Transportation Demand Management $0.2 M
El Camino Real Specific Plan $1.0 M
Homeless Task Force Recommendation Implementation TBD TBD Police Restorations (6.0 sworn positions): 1.0 Sergeant - Drone Program; $1.6 M
1.0 Sergeant - Task Force Unit; and 4.0 Officers - Field Training Officer (FTO) program (Task Force Unit and School Resource Officer impacts) Downtown Task Force/Precise Plan for Downtown $0.3 M
Total $1.5 M $1.6 M
Impacts on Budget Balancing:
- Position/Service reductions of 75 Positions would increase by 10 non-sworn - Would require additional $1.5 M of one-time solutions that are not identified City of
Santa Clara
The Center of Whats Possible
19 General Fund Forecast with Fiscal
Sustainability
• Requires the following to close the Five-Year Revenues vs. Expenditures Projection $19.6 M gap + $7 M employee $310.0 Structural Balance
by Year 5
negotiations $300.0
$290.0
- New revenues ($7M) $280.0
• Business Tax, TOT, New Fees Millions $270.0
$260.0
- Position/Service reductions $250.0
($12 M) $240.0
$230.0
• Approx. 75 non-sworn positions FY 2022/23 FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 - Projected Revenues - Projected Expenditures
- Future Economic Growth ($8
M)
One-time reserves and hiring controls
(approx. $20 M - $30 M over 4 years
to bridge recovery)
City of
Santa Clara
20 20
10 Questions and Answers
City of
21 Santa Clara
Thà Chata ef Whuth Penth
21 FY 2022/23 Library Community
Room Fee Adjustments
City of
22 Santa Clara
22 11
FY 2022/23 Municipal Fee Schedule -
Library Community Room Rental Fees
• ClearSource Financial assisted with FY 2022/23 Municipal Fee Schedule and Parks & Recreation Cost Recovery Policy (adopted by City Council on April 19, 2022) • Study Session held on April 5, 2022 to provide feedback:
- Align library community room rentals with Parks & Recreation - Lower technology fee
- High value on Santa Clara residents and non-profit organizations • Library community room rental fees have been suspended since 2019 out of concern that there was not customer service alignment with Parks & Recreation fee • Based on April 5th Study Session feedback, Library met with the Board of Library Trustees (BOLT) on April 28, 2022; BOLT approved proposed fee changes City of
Santa Clara 23
The Conteronnis Forsoo
23 Library Community Room Rental Fees
Proposed Fee CITY OF SANTA CLARA MUNICIPAL FEE SCHEDULE
SURVID RY OFPARTMENT DIVISKON
LIBRARY RESOLUTION NUMBER: APPROVED:
CHARCON DATE FEE FEE DETAM
• $20 per meeting - Non- DEPT / DILAST CHANGED
Profit or Santa Clara DESCRIPTION OF and COLLECTIO NUMBER & DATE (SEE READER'S CUDE OR REVISED FEE FEE. RATE OR CHARGE PERIOD COMMENTS 2022-23
Overdue Fries for 15.00 CharpedBy. Osie: 8/122012 gecove: Pensty Feels assessed to 15.00 Residents community Fortable Electrol: Devices Ltray
O. No:
Collected By: O. Date: Prop 25 Exception:
events Loran
Full Cost:
• $90/hr. - Non-Resident 10.00 4233011 полуницітує
HANCALUAT
амн
Use
• No processing/set up fee
• $30 hourly staff charges if
Fee for using ibrary
Thing Foo
groups require assistance O. No: Prop 26 Exception:
Residents / Nan-Proce ollected By: O. Date: 20.00
Ful Cost: per meeting
throughout their
Ricoresisert 00.00
per hou
reservation
City of
Santa Clara 24
24 12
Questions and Answers
25 City of
Santa Clara
The Certera Wuts Pestle
25 City Council Meeting
Item # 2 - Study Session #2:
Review of the Proposed
FY 2022/23 & FY 2023/24
CIT RNIA Biennial Capital Improvement
Program Budget and FY 2022/23
1852 Operating Budget Changes
THE MISSION CIT
June 7, 2022
26 13