City Council
Study Session
Mission City Memorial Park
RTC#23-1633
April 4, 2023
• Background
• Operations Summary
• Challenges & Policy Options
• Alternate Policy Direction
• Council Input
• Next Steps
Agenda
2 3
Background
3 • Operating Model
• Video Tour
• Facilities
• Services & Hours
• Personnel & Record Keeping
• Rules & Regulations
• Components of Burial
Background
4 • Operating Model
• Video Tour -- Mission City Memorial Park
Fox
Mausoleum
Background
5 Mission City Memorial Park
• 420 N. Winchester Drive
• In operation since 1850
• 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
6 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
Background
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 Operations
7 Background
8 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.
Facilities
9 Indoor Mausoleum Outdoor Garden Mausoleum
• Above ground interment sites – mausoleum burial crypts, niche banks, communal niche,
• Historic family plots, roadways, pathways
Sarah Fox Mausoleum
Facilities
10 Upright monument sections Flat marker sections
• In ground interment sites – single/double casket (body), urn (cremains)
Facilities
11 • Administration office
• Chapel
• Maintenance yard & building
• 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
Hours
12 Personnel
13 • 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
• 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
Components of Burial
14 • 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) Components of Burial
15 16
Operations Summary
16 • Budget
• Operations Summary
Operations Summary
17 Category FY2019/20 FY2020/21 FY2021/22 Avg
Purchases
Burial Right Recording Fees 12 20 25 19
Cremation Niche (AG) 9 30 32 24
Cremation Plot 13 24 29 22
Casket/Crypt (AG) 2 1 0 1
Casket/Plot 19 22 33 25
Burial
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
18 Budget
Revenues
• Total: $1.9 M per year
• About half from fees, interment
rights, labor charges
• About half from General Fund
subsidy of $870k per year
Expenditures
• Total: $1.9 M per year
• Salaries $508,000
• Benefits $312,000
• Materials & Supplies $383,000
• Interfund charges $342,000
Cemetery Enterprise Fund
Operating Budget
19 10 year trends
• Revenues not keeping up with expenses
• Annual General Fund subsidy
20 Cemetery Challenges
• Subsidized Services & Fees
• Aged Infrastructure
• Capital Budget
• Endowment Fund
Policy Options
20 Operating Budget
21 • 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 • 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 22 Capital Budget
• Perpetual / Endowed Care
– Purpose: generate income to cover
cemetery maintenance in perpetuity
– Assures long term funding source for
maintenance, repair & facility renewal
– Currently placed in City cash pool
– Many states require a perpetual care or
endowment care trust
• Impacts – short & long term
– Current practice NOT providing enough
revenue to support future cost of
maintenance at current service levels
– Need to protect & grow principal
– Need to increase rate of return
Endowment Fund
23 • 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 Perpetual Care
24 • 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 Perpetual Care – City of San Diego
25 • 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
Perpetual Care – City of Santa Monica
26 27
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
27 • 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 Alternate Policy Direction
28 29
Policy Direction
29 1. Should the City of Santa Clara continue with the current operating model of a city owned, operated and maintained cemetery facility? A) 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.
Council Input
30 31
Operating Program
Enhancements
31 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.
Council Input
32 33
Next Steps
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 34