4/4123 Itemt2.B
City Council
Study Session
Mission City Memorial Park
RTC#23-1633
1852
THE MISSION cirt
April 4, 2023
1 Agenda
• Background
• Operations Summary
• Challenges & Policy Options
• Alternate Policy Direction
• Council Input
• Next Steps
City of
Santa Clara
The Centerol What's Potsiste
2 POST MEETING MATERIAL
Background
• Operating Model
Video Tour
Facilities
Services & Hours
Personnel & Record Keeping
Rules & Regulations
Components of Burial
City of
Santa Clara
3 Background
• Operating Model
• Video Tour -- Mission City Memorial Park
City of
Santa Clara
Tha Contro uma
4 Background
Notes:
Shop & Carsos
* Garden Court Niche Bar
Mission City Memorial Park nside the Garden Mausch
Radwood
• 420 N. Winchester Drive
Crestview Dr.
• In operation since 1850
North
• Owned by City of Santa Clara
• Maintained by Parks & Recreation
• Over 35,000 interments
• Over 500 trees & 70 bird species
• Showcases history of Santa Clara
Fox
City of
Santa Clara
5 Background
MCMP - history
• 1850 Town purchased a two-acre plot
• Land added for stray animals & town dump
• September 13, 1864 - First documented
burial Walter S. McDonald
• 1864 plots ranged from $20 to $25;
Potter's Field for indigents $2 to $5
• 1937 Federal Work Projects Administration
(WPA) employed 175 men which built the
Indoor Mausoleum for $100,000
City of
Santa Clara
The Centerof Whats Possible
Operations
Current Operating Model:
• City owned, operated, maintained
- City sets Biennial Operating Budget, Capital Improvement Program, & Fees (Municipal Fee Schedule) to determine level of service, cost recovery/subsidy levels - City Code applies, adopts own Rules & Regulations
• Pros:
- Local control, On-site staff, one stop shop
- High touch/continuity of City service, lower resident fees - Other City divisions and General Fund support for grounds maintenance/admin functions • Cons:
- Fees and policies impact level of service, assets, maintenance, investment strategy City of
Santa Clara
7 Background
Agnews Historic Cemetery & Museum
• 1250 Hope Drive, Santa Clara
• Closed to new burials - There are no 1906
earthquake burials
• Visitor Center - run by volunteer docents
• Grounds - Maintained by Cemetery staff &
volunteers
• Museum remembers workers and residents
of the Agnews State Hospital and the Agnews
Developmental Center from 1888 to 2009.
City of
Santa Clara
The Centero! Whats Possible
8 Facilities
• Above ground interment sites - mausoleum burial crypts, niche banks, communal niche,
• Historic family plots, roadways, pathways
Sarah Fox Mausoleum Indoor Mausoleum Outdoor Garden Mausoleum City of
Santa Clara
9 Facilities
• In ground interment sites - single/double casket (body), urn (cremains) DRAPER
Upright monument sections Flat marker sections
City of
Santa Clara
The Center of Whists Possible
10 Facilities
• Administration office
• Chapel
• Maintenance yard & building
City of
Santa Clara
The Center of What's Possible
11 Hours
• Office Hours
» Monday - Friday 8 a.m. -12 p.m., 1 - 5 p.m.
» Pre-need and at-need Consultation & Sales
» Cemetery administration & maintenance
• Visiting hours
» Monday - Friday 8:00 a.m. - 5:00 p.m.
» Saturday 9:00 a.m. - 5:00 p.m.
• Burials
» By appointment
City of
Santa Clara
12 Personnel
• Total staff: 6 FTE
- Cemetery Operations Manager (1 FT)
- Office Specialist II (1 FT)
- Grounds Maintenance Workers I, II, III (3 FT)
- Laborer 1000 hours (2 AN)
- Supplemented by volunteers
• Paper records, old software
- Need - efficiency, access, data security
• Code, Rules & Regulations
- Need - update
City of
Santa Clara
The Center of What's Potsible
13 Components of Burial
• Interment Right
• The right to place a loved one at MCMP
• For immediate or future need, for two persons in one grave or niche • Outer Burial Container (Burial Vault)
• For below ground burial
• Protects contents from weight of earth or equipment moving over grave • Opening & Closing Service
• Physical act of preparing the site for burial
• Occurs each time a site is accessed (second burial, disinterment) • Paid at time of Need
City of
Santa Clara
14 7
Components of Burial
• Grave Marker Setting
• Optional for graves, required for niche or crypt
• Guidelines for type & size based on section; markers provided by others • Administration & Maintenance
• Free of charge (currently subsidized)
• Perpetual Endowment Care
• One-time, per capita charge, for future grounds & building maintenance • Funds placed in City cash pool (not invested long term) City of
Santa Clara
15 Operations Summary
• Budget
Operations Summary
City of
Santa Clara
16 16
Operations Summary
Category FY2019/20 FY2020/21 FY2021/22 Avg
Burial Right Recording Fees 12 20 25 19
Cremation Niche (AG) 9 30 32 24
Purchases
Cremation Plot 13 24 29 22
Casket/Crypt (AG) 2 1 0 1
Casket/Plot 19 22 33 25
Cremation Burial 29 35 46 37
Casket Burial 59 57 70 62
Cremation Placement (AG) 16 28 27 24
Casket Placement (AG) 0 1 1 1
City of
Santa Clara 17
The Centerof What's Possible
17 Budget
Cemetery Enterprise Fund
Revenues Expenditures
• Total: $1.9 M per year • Total: $1.9 M per year
• About half from fees, interment • Salaries $508,000
rights, labor charges • Benefits $312,000
• About half from General Fund • Materials & Supplies $383,000 subsidy of $870k per year • Interfund charges $342,000
City of 18
Santa Clara
18 9
Operating Budget
10 year trends
• Revenues not keeping up with expenses
• Annual General Fund subsidy
Revenue vs. Expenditures General Fund Subsidy
$1,000,000
$1,600,000
$1,400,000 $900,000
$1,200,000 $800,000
$1,000,000
$800,000
$600,000 $500,000
$400,000 $400,000
$200,000 $300,000
$200,000
$100,000
FY 2011/12 FY 2012/13 FY 2013/14 FY 2014/15 FY 2015/16 FY 2016/17 FY 2017/18 FY 2018/19 FY 2019/20 FY 2020/21 FY 2021/22 $-
2011/12 2012/13
-Sales/labor/Materials - Expenditures
City of
Santa Clara 19
The Casterof Whats Posite
19 Cemetery Challenges
• Subsidized Services & Fees
Aged Infrastructure
• Capital Budget
Endowment Fund
Policy Options
City of
20 Santa Clara
20 10
Operating Budget
• Subsidized Fees Constrain Budget Available for Services & Facilities - Office hours (pre-need & at-need appointments)
- Visiting hours & supervision of grounds/facilities
- Funeral times
- Maintenance frequency
- Staff Training, knowledge transfer
- Delays in Capital Project implementation
• Policy Options to Improve Service, Reduce Expense
- Increase existing fees to full cost recovery/market rate - Eliminate resident subsidies for components of burial - Introduce new fees, new services, reduce utility costs - Cemetery management software to improve efficiency, security, access City of
Santa Clara 21
21 Capital Budget
• Aged Infrastructure
Facility Condition Assessment (Kitchell, 2017)
- Cemetery Grounds
» Needs = $1,173,683.
» Grade: 23 (Poor)
- Cemetery Buildings
» Needs = $772,945. not including cost escalation
» Grade: 9 (Fair)
• Construction Cost Escalation
• Limited Capital Funding
- No dedicated, ongoing source(s)
» Limits/delays lifecycle replacement, major rehabilitation » Limits acquisition and development/expansion of grounds and facilities City of
Santa Clara 22
The Center of Whats Possible
22 11
Endowment Fund
• Perpetual / Endowed Care
- Purpose: generate income to cover
cemetery maintenance in perpetuity
- Assures long term funding source for
Endowment
maintenance, repair & facility renewal
$2,500,000
- Currently placed in City cash pool
- Many states require a perpetual care or $2,000,000
endowment care trust
$1,500,000
• Impacts - short & long term
$1,000,000
- Current practice NOT providing enough
$500,000
revenue to support future cost of
maintenance at current service levels S-
- Need to protect & grow principal 2019/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2027/22 - Need to increase rate of return
City of
Santa Clara 23
The Centerot Whats Possible
23 Perpetual Care
• Perpetual Care/Endowment Care Trust
- Assure long term source of funding for perpetual maintenance, repair and renewal - Insulate funds from current general operating revenues, changes in demographics, and cemetery market trends
- Establish a perpetual care endowment Trust, Commission, or Committee - Develop an Endowment Fund Trust & Investment Policy
- Have fiduciary invest funds_according to policy goals and principles - Actuarial conducts Perpetual Care Adequacy Study to model 100-year income/expenses • Uniform Prudent Management of Institutional Funds Act (UPMIFA) - Law enacted 2006. Provides guidance on investment decisions & endowment expenditures - Adopted by California and the vast majority of US states - "Endowment funds" are a subset of "institutional funds" that are not wholly expendable by the institution on a current basis;
- Have spending rule requirements; must follow UPMIFA guidelines regarding prudent mgmt City of
Santa Clara
24 12
Perpetual Care - City of San Diego
• Established a "Funds Commission" responsible for managing all trust, perpetuity, and investment funds
• Established a Cemetery Perpetuity Fund (Fund) and placed in Funds Commission's custody by Charter
• San Diego City Charter requires
- the Fund be invested in income-producing securities
- the principal of the Fund shall not be available for distribution - all income derived from the investment is to be expended for the cemetery care • Engaged a Fund Manager (fiduciary investment firm)
• Developed an Investment Policy Statement (IPS) for the Fund to guides investments • Fund Manager provides quarterly investment updates to the Funds Commission • Conducted an RFP for the Fund's investment management and custody services City of
Santa Clara 25
he contero one
25 Perpetual Care - City of Santa Monica
• Established a Cemetery Perpetual Care Fund and a Mausoleum Perpetual Care Fund (Funds)
• Funds are managed and accounted separately per City of Santa Monica Municipal Code • Funds held in trust by the City on behalf of the owners of the plots, crypts, niches • The principal portion of the Funds can only be used for investment and reinvestment purposes • Income from Funds is used for perpetual care costs
• Investment guidelines for the Funds established by City Council - protecting the principal value
- maximize portfolio income
- comply with legal guidelines
• The nature and structure of the portfolio require the retention of an investment manager - 60% of Funds are invested in equities
- remainder invested in fixed income instruments
City of
Santa Clara
26 The Centerof Whats Possible
26 13
Mission City Memorial Park
Policy Questions
Operating Model
• Adjust Fees to Market Rate, Eliminate
subsidies
Endowment Care Trust
• Update Rules & Regulations
Council Feedback
Next Steps
City of
27 Santa Clara
27 Alternate Policy Direction
• Formation of a Cemetery Special District
- Over 250 in California
- Created by local petition or through popular election - Independent special districts are separate, local agencies directly accountable to constituents
» revenue may be enterprise (fee-based) or non-enterprise (tax-based); have slower rates of spending growth, are independently audited, and subject to public scrutiny, reporting annually to the State Controller
- Dependent special districts are administrative extensions of cities (or counties) and accountable to that unit of government
» funded through property taxes which provide the means to publicly finance the improvement, expansion and operation of public cemeteries and provision of interment services • Districts are governed by boards of directors, elected or appointed to terms, and accountable to the public
- Boards subject to initiative, referendum, recall, Brown Act & related public agency statutes City of
Santa Clara 28
28 14
Policy Direction
City of
Santa Clara
29 29
Council Input
1. Should the City of Santa Clara continue with the current operating model of a city owned, operated and maintained cemetery facility? If yes, what actions should be taken to better position the Cemetery for future short and long-term viability and fiscal solvency? B) If no, which alternative operating model would the Council like staff to explore further, an independent cemetery district, and/or private management agreement, closure.
City of
Santa Clara 30
The Centerof Whats Possible
30 15
Operating Program
Enhancements
City of
31 Santa Clara
31 Council Input
2. In order to better position the Cemetery for future financial viability, which operating budget enhancements does Council support:
A) Adjust existing fees for all Components of Burial to 100% Cost Recovery (market rate) for residents and non-residents. This action eliminates resident subsidies. The resident interment rights fee would increase by 25%, resulting in an estimated $36,000 per year additional revenue. the endowment care fee for residents would increase by approximately 50% (depending upon various factors) and result in an estimated $100,000 additional Endowment principal per year.
B) Add an Administrative Fee to cover current year operations and maintenance. Currently no fee is charged and adds to the City's level of subsidy. A proposed fee of $440 (based on the estimated cost of the service) would result in approximately $55,000 of new operating revenue to offset the expenses.
C) Formation of an Endowment Care Trust and related actions. This would direct staff to develop a Perpetual Care Investment Trust (Committee, Commission, or other body), development of draft Investment Policy, actuarial to conduct Perpetual Care Adequacy Study, and a fiduciary to invest funds according to Council established policy goals and principles, quarterly reports to Council, City Finance Dept. & Auditor oversight. May result in investment interest on the Endowed Care Funds above cash pool rate of return.
City of
Santa Clara
32 TACAMAAMAMANA
32 16
Next Steps
City of
33 Santa Clara
33 Next Steps
• As appropriate, staff to return at future meeting with:
- Rules & Regulations update
- Additional Information/Clarifications Requested by Council - Actions to Adjust Fee Schedules
- Actions Related to Perpetual Care Trust
» Perpetual Care Adequacy Study
» Formation of a Council Committee, appointed Commission, Other (Council/Staff)
» Development of an Investment Policy
» Selection Process to Hire Fiduciary/Consultant for Investments City of
Santa Clara
The Centerol Whats Possible
34 17