RESPONSE TO COUNCIL QUESTIONS RE: 8/16/22 AGENDA
Agenda Item 3A Action on April 5, 2022 Council and Authorities Concurrent & Special Stadium Authority Meeting, April 19, 2022 Council Authorities Concurrent & Special Stadium Authority and Planning Commission Meeting, and April 28, 2022 Special City Council Meeting Minutes
Council Question:
I see from the April 19th minutes the following which is correct to my recollection but I don’t recall staff ever getting back to Council on other methods to enhance revenue from the properties at Franklin Mall.
The clock tower is broken but I have no interest in fixing until we resolve the issue of the maintenance district financing:
A motion was then made by Councilmember Park, seconded by Councilmember Chahal, to (1) adopt Resolution No. 22-9084 of Intention to order that the alternative method for the levy of benefit assessment be made applicable to the City of Santa Clara Parking Maintenance District No. 122; (2) Set a hearing date of June 7, 2022 to approve the Director’s Report FY 2022/23; and (3) authorize the publication, mailing, and posting of the Notice of Public Hearing as stated in the Resolution of Intention; and (4) direct staff to return within 60 days detailing how to recover costs or other methods to enhance revenue for the City from the properties.
Staff Response:
The follow up was provided to Council on June 21, 2022, Item 4R: Informational Report Regarding Council's Request to Explore Alternatives to Fund Operations and Maintenance Costs for Parking Maintenance District No. 122 - Franklin Square linked here
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Agenda Item 3C Action on Monthly Financial Status Report for May 2022 and Monthly Investment Reports for May 2022 and June 2022, and Approve the Related Budget Amendments
First of I’m pleased to see: “Overall, the General Fund is expected to end the year with additional ending fund balance.”
Council Question:
Now that the FY is over, do we have an estimated number?
Staff Response:
We do not yet have a number on the additional ending fund balance as year-end accruals/adjustments are still in progress. For instance, the Sales Tax data for the last quarter of FY 2021/22 will not be received until August 23 rd. Staff also has to analyze whether any of the revenues need to be allocated to restricted uses (such as the Advanced Planning Reserve). Staff anticipates bringing the FY 2021/22 Year-End Report to Council before the end of the calendar year.
Council Question:
I’m curious about why all the revenues from permits and licenses are now bundled into the “Building Development Services Fund” for which the actual revenues of $16.4M are higher than budgeted $13.6M. Why the change?
2 Staff Response:
The building development-related permits (Building, Electrical, Plumbing, and Mechanical permits) were moved to the new Building Development Services Fund (Fund 155) to more efficiently track the Building Division’s revenue and expenditures and provide greater transparency. This change was approved with the Council adoption of the FY 2021/22 and FY 2022/23 Biennial Operating Budget. These revenues must be used to support the development-related activity and remain within the dedicated fund. Development-related revenues fluctuate each year and exceeded the budgeted estimate in FY 2021/22 based on the higher than expected level of development activity.
Council Question:
Also I seem to have forgotten how/why the Housing Successor Fund Adopted budget of $915K went to $18M in the Amended Budget.
Staff Response:
The increase to the amended budget in the Housing Successor Agency Fund was a result of three budget amendments approved during FY 2021/22. As part of the FY 2020/21 Year-End Report approved in December 2021, two $5.0 million developer loan agreements were carried over (one for Corvin Dr and one for Monroe St).
The other amendment was approved as part of the February/March Monthly Financial Report that reallocated a $6.7 million developer loan agreement from the Housing Authority Fund to the Housing Successor Agency Fund.
This reallocation was to consolidate all developer loan agreements into the same fund.
Council Question:
Also why are Parks and Rec and Library Capital Improvement actual expenses (Percentage Used) only about 8% of Amended Budget? Does this mean that our total Carryforward to 2022/23 is now $110M ($135M - $25M)?
Staff Response:
As part of the FY 2022/23 budget adoption, approximately $83.3 million was carried over in the governmental capital improvement funds (of which $20.7 million was the Library and Parks CIP carryover). Additional carryover actions will be brought forward as part of the FY 2021/22 Year-End Report based on the actual FY 2021/22 year- end expenditures.
3 Council Question:
I’m slightly confused about the Gain/Loss for Corporate Notes. Is that the unrealized gain/loss if we were to sell them now (before the Maturity Date). Why are the losses so large?:
Staff Response:
When interest rates rise, the value of fixed rate investments at lower rates declines resulting in an unrealized loss. These are paper losses only, until securities are sold. Since interest rates are expected to continue to rise throughout the year, the portfolio is expected to continue to show unrealized losses. Note that when interest rates fall, the portfolio will see unrealized gains (City last had unrealized gains in December 2021). The good news as interest rates continue to rise is that our financial advisor, PFM Asset Management, has been able to purchase new investments at much higher yields than we saw a year and even a quarter ago. Given the current environment, PFM may take advantage of the dramatic increase in interest rates by occasionally selling lower yielding investments and realize some losses in order to purchase securities with much higher yields in order to strategically improve the portfolio’s earnings potential for the long-term financial benefit of the City, using their proprietary analytics.
4 Agenda Item 3G Action on an Agreement with Kyle Groundwater, Inc. for Well Condition Assessment and Engineering Services During Rehabilitation
Council Questions:
1. Are these 6 wells being rehabilitated as a backup strategy or is the intent to actively start pumping once the wells are rehabilitated?
Staff Response:
The goal is to actively start pumping once the rehabilitation of the well is completed.
2. What is the backup power scheme for the pumps if the grid goes down? Are we considering batteries?
Staff Response:
We have generators at strategic well sites; we continue to research the use of batteries with SVP (Silicon Valley Power and DPW (Department of Public Works)
3. Is the well at the parking lot at the Santa Clara train station included in the six wells: Well 5-02, 16-02, 21, 26, 32, and 34?
Staff Response:
Well 3-02 at the train station is an active well, was recently rehabilitated, and is therefore not on the rehabilitation list.
4. If not what is the status of the well at the train station? We were expecting the developer of that parking lot to rehabilitate the well but that development is on hold.
Staff Response:
Well 3-02 at the train station is a productive active well and does not require any rehabilitation.
During the last proposed development, the current well location conflicted with the development and the intent was to abandon the existing well and construct a new well on the property.
Agenda Item 3R Actions on a Resolution Adopting the Updated Sanitary Sewer Outlet Charge - Conveyance Fee Report and List of Improvements, and a Resolution Accepting the Amended AB1600 Report on Development Impact Fees for Fiscal Year Ended June 30, 2021
Council Question:
1. My understanding is that the difference between PDWF and PWWF is due to infiltration. Does this mean that infiltration will be greatly reduced in the future?
5 Staff Response:
The difference between PDWF (Peak Dry Weather Flow) and PWWF (Peak Wet Weather Flow) includes both inflow and infiltration. Inflow comes into the system from storms and infiltration comes in from groundwater. The dynamic model utilizes factors to forecast the future flows. The changes in the percentages referenced in the question are mainly due to increased dry weather flow and the inflow and infiltration projections do not change significantly. However, as existing sanitary sewer pipelines are replaced and/or upsized, we do know that the infiltration for these upgraded segments will be reduced.
2. I see the Woodard&Curran estimate of up to $34 million for all projects. I’m not clear on what we are approving. “Approving the updated Sanitary Sewer Outlet Charge – Conveyance Fee” What is the fee and who’s paying? I couldn’t find that in the document
Staff Response:
Council is only approving the updated report which slightly modifies the list of existing projects included In the conveyance fee which is based on the current Sanitary Sewer Model. Developers are responsible for paying the fees that fund the projects; the fee is not changing at this point.
There will be a separate, future effort that updates the Sanitary Sewer Model which may identify additional future projects that are needed. Part of that effort will include evaluating the existing fee to determine if it needs to be increased or not to fund the additional future projects.
3. I see the following alternative for ECR. There is currently no purple pipe on ECR. While we have the streets open, does it make sense to try to add purple pipe at the same time for future ECR projects?
Staff Response:
If sanitary sewer improvements are made along ECR staff can look to see if there are any other projects including recycled water, that are ready to be constructed and see if there is an opportunity to coordinate schedules. The funding for recycled water pipelines is separate from conveyance fee.
6 Agenda Item 6 Consideration of Action on a Resolution to Remove Ron Patrick from the Planning Commission in Accordance with Council Policy 032; and to Appoint First Eligible Appointee Mario Bouza to the Planning Commission
Council Questions:
1. What was the late date to accept applications for Planning Commissioner vacancies?
Staff Response:
April 27, 2022 at 5:00 p.m.
2. At the time of application or before the last day of application to be accepted was Mr Ron Patrick registered voter of the city of Santa Clara?
Staff Response:
No, he was not. He later updated his registration to the Lafayette address on May 3, 2022. He was informed that he needed to have that completed if he wanted to be considered.
Council Comment:
I see in the report the following. It seems to me that if the City doesn’t cite Ron Patrick for living illegally at 5191 Lafayette then it would have two knock-on effects:
1. It would be hard to enforce these rules on anyone else in the City due to precedence, especially in such a high profile situation
2. It would be hypocritical for Ron Patrick to enforce any zoning violations as a Planning Commissioner
The Finance Department verified that the property is using City utilities (electric, water), so it is likely occupied in some fashion. However, the establishment of a residential use on the property is also a violation of the California Building Code, as Mr. Patrick has not secured a residential certificate of occupancy. After consulting with the Building Re: Planning Commission Appointment of Mr. Ron Patrick
July 7, 2022
Division and Fire Department, it was determined that a B-2 (business) certificate of occupancy was issued in 1979. An application to change the occupancy to S-3 (storage) was received in 2008, but the application was never completed. There has
7 never been an application to change the occupancy to a residential use. As such, Mr.
Patrick could be cited for occupying the property illegally.
Nevertheless, Mr. Patrick’s illegal residential occupancy of the Lafayette Street property does not, by itself, disqualify him from being a Planning Commissioner (if he is in fact living there).
Staff Response:
Noted.
Agenda Item 11 Action on a Written Petition (Council Policy 030), Submitted by Thomas Calvello Requesting to Place an Agenda Item on a Future Council Meeting for Council to Discuss an Admission Tax of 6% be added to the Ticket Price or other Charge that Attendees Pay to Enter Entertainment Venues or Events in Santa Clara
Council Comment:
I’m very much in favor of an admission tax since the money would flow directly to the general fund NOW rather than the case with all the existing fees/taxes that first go to pay off all our loans before money flows to the GF.
But given that this is a 030, we’re not allowed to discuss the matter. Please do the research and consult with staff. The applicant seems to have gotten this idea from a stadium in Seattle. I have a big beef with the current change by ManCo from $4 to $7 on non-NFL tickets without informing staff or City Council.
Staff Response:
Staff is evaluating several potential revenue sources for the Stadium, including this proposal from the community member. A separate report on this subject will be brought to Council at a future meeting.