projects with this one-time funding. In preparation of the Fiscal Year 2022/2023 Budget, staff is seeking direction on the use of the recovery funds to bolster the General Fund, advance projects identified in the Capital Improvement Program (CIP) and focus on priorities set forth in the City’s adopted Strategic Plan.
Pandemic Response and Recovery Expenditures
Since the beginning of the pandemic in March 2020, the City put forth mitigation efforts to continue services and respond to the health emergency. This included the purchase of supplies and equipment to prevent further spread of the disease, as well as adapting City buildings for social distancing and advancing technology to conduct public services and meetings remotely. Staff has kept record of all incurred and ongoing costs directly related to the City’s COVID-19 response.
Expenditures included on the COVID-19 cost tracker include:
• Personal Protective Equipment (PPEs) such as face masks • Plexi- glass for work stations and public counters
• Sanitization of City facilities and vehicles
• Space planning for social distancing compliance
• Improvements to the Heating Ventilation and Air Conditioning • Technology improvements to allow for virtual meetings and electronic communications with the public
• Broadcasting services of public information and meetings • Cybersecurity software for increased threats to the network • Laptops and mobile devices for remote work capabilities • Overtime for public safety personnel
The City approximates $1 million in expenditures for ongoing protective measures.
These unanticipated expenditures were not included in previous City budgets, and have directly impacted the General Fund. Prior to the SLFRF funding, the City received $314,333 from the Coronavirus Relief Fund (CRF). These dollars will serve to offset a portion of the $1 million spent in response to the pandemic, and staff recommends the balance be covered by a portion of SLFRF funding.
Recommended Uses for SLFRF
SLFRF is a unique, one-time resource for state and local governments to both facilitate emergency responses to the COVID-19 pandemic as well as to address strategic initiatives and goals, such as investment in infrastructure improvements, technology, affordable housing, employee retention and business assistance.
In alignment with the annual budget process, the City is developing a Capital Improvement Program (CIP), which identifies many unfunded projects requiring use of General Funds. Fully funding the CIP would put the overall General Fund in a negative status for the upcoming budget, and as such, staff is recommending that SLFRF funding be considered to implement projects that would otherwise be funded with the General Fund. CIP projects include the Voice over Internet Protocol phone system installation, electric vehicle charging stations for the Civic Center, City Hall and the Arroyo Park, 6 - 2
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April 27, 2022
software for permitting management and digital record scanning and document management. In sum, the projected costs of these CIP projects total $795,000.
A Strategic Plan goal includes planning for affordable housing in compliance with state mandates and in response to community interest and needs. Housing laws in California continue to evolve at a rapid speed, and in many respects limit local control, but the City remains committed to furthering affordable housing opportunities and availability, as evidenced by discussions to develop a new Housing Division in the Community Development Department. Once certified, implementing the Housing Element will be a top priority for the Housing Division. The City Council may consider using SLFRF funds to provide initial funding for affordable housing development, including potential purchase of unoccupied Caltrans surplus properties and/or to establish a Community Land Trust, among other housing opportunities.
Staff is developing a comprehensive Information Technology (IT) Master Plan to introduce or upgrade technologies citywide for operational efficiency and to enhance services to the community. Government agencies have made it a priority to future-proof organizations to sustain service levels, positively impact productivity and public experience through technology innovations. Implementing the IT Master Plan will require investment of funds for hardware and software needs, as well as safeguards to protect the network infrastructure from cyberattacks. Currently, the City only budgets for routine maintenance and equipment replacement, and SLFRF funds are an opportunity to enhance these efforts and to fund technology projects with a source other than the General Fund.
The employment crisis brought on by the pandemic has created a talent shortage and difficulties in attracting qualified candidates, and has challenged every sector of the labor market. In particular, the public sector is experiencing challenges with high turnover due to retirements and resignation for more competitive markets that offer higher pay, flexibility, remote work options and other incentives. Commonly referred to as the “Great Resignation,” this ongoing trend in the labor market anticipates 55% of the workforce will change jobs within the next year. As part of recruitment and retention efforts, the City is looking at initiatives to develop the organization's employer brand and enhance the employee experience. The City is making concentrated efforts to attract and retain top qualified candidates, including reviewing compensation and benefits, training and career development opportunities, and promoting a positive workplace culture, with a focus on employee wellness and engagement. SLFRF funds could be used toward these efforts.
When the federal funding was first made available to agencies as the American Rescue Fund Act, eligible uses included business recovery efforts. Many municipalities utilized the funds to roll out various business assistance grants or funding mechanisms. The City of South Pasadena has not previously discussed business assistance grants or programming, and this is an opportunity for consideration. 6 - 3
COVID Federal Relief Funding Discussion
April 27, 2022
In addition, staff recommends City Council consider SLFRF to fund immediate needs identified by Departments for the 2022/2023 Fiscal Year Budget.
Potential Uses of SLFRF Funding in City FY 22/23 Budget Golf Course LED Lighting $16,000
First Department Air Utility Apparatus $600,000
Rescue Ambulance $250,000
Self-Contained Breathing Apparatus (SCBA) $150,000
Public Works Utility Truck $300,000
Total: $1,316,000
Other Potential Funding Sources
Staff is exploring a variety of potential funding sources that may help offset the impact to the General Fund by the COVID-19 Pandemic. Among these funding sources are Federal Emergency Management Agency (FEMA) and the Infrastructure Investment and Jobs Act.
In November 2021, FEMA published a Press Release stating that all “COVID-19 work” would be eligible for 100% reimbursement. The deadline to submit a Request for Public Assistance (RPA) under FEMA is July 1, 2022, with a deadline of December 31, 2022 for actual project submissions for reimbursement. Reimbursable expenditures under FEMA include emergency operations center costs, disinfection of public facilities, purchase of Personal Protective Equipment (PPE), law enforcement and communications of general health and safety to the public.
In November 2021, Congress passed the $1.2 trillion bipartisan Infrastructure Investment and Jobs Act. The federal spending package includes money for roads, bridges, and public transportation infrastructure, with a strong focus on climate change mitigation, resilience, and equity. For California, the bipartisan infrastructure bill will provide approximately $50 billion over five years to assist local economic recovery and keep goods and services moving. The funds will allow cities to address infrastructure needs including transportation and water systems, ensure access to reliable broadband, invest in clean energy, create jobs and restore communities. Cal Cities along with the National League of Cities and state and federal partners is working on behalf of cities to ensure access to critical funding and maximize the benefits for local communities. Staff will continue to monitor these efforts to leverage funds as they become available to cities.
Recommendation
It is recommended that the City Council provide direction on potential uses of the Coronavirus State and Local Fiscal Recovery Funds (SLFRF), as established through the American Rescue Plan Act (ARPA) of 2021.
City Council may consider the following opportunities:
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COVID Federal Relief Funding Discussion
April 27, 2022
• COVID-19 Expense Recovery
• Capital Improvement Program (CIP) Projects, such as:
o Voice over Internal Protocol system
o Electric Vehicle Charging stations
o Software for permitting management and digital record scanning and document management
• Affordable Housing
• Information and Technology Master Plan
• Employee Retention
• Business Assistance
Fiscal Impact
There will be no impact on the General Fund as this funding have been set aside for City Council discussion and direction. Once a decision is made as to how the funds will be spent, there is a possible positive impact to the General Fund, as it will reimburse the Fund for COVID-related expenditures and relieve the General Fund of CIP costs. 6 - 5
Memo
Date: April 27, 2022
To: The Honorable City Council
City of South Pasadena
Finance Department
Via: Armine Chaparyan, City Manager 1;),v,11'(} -fi,'V A{_.,,, From: Ken Louie, Interim Finance Director
Re: April 27, 2022, City Council Special Meeting Item No. 7 - Budget Calendar
Staff will provide an overview of the Budget Process and Budget Calendar.
Attachment: 2022-2023 Budget Calendar
Item No. 7
7 - 1
2022 BUDGET CALENDAR
Jan 4 CIP planning meeting (continuous through adoption) Feb 16 Mid-year Budget Report to Council
Feb 22 Budget Kickoff meeting for budget reps
Feb 22 Budget request forms distributed to departments
Feb 28 Revenue/Expenditure projections (21-22) to Finance Mar 3 Budget request forms due in to Finance
Mar 15 Finance delivers dept. budget requests to CM
Mar 17 Narratives and Performance Indicators due in
Mar 21-31 Dept. review with CM and FD
Apr 1-21 Finance prepares Proposed Operating and CIP budgets Apr 18-19 Citywide Budget Presentation for employees
Apr 25-28 Executive Team Budget Balancing (if necessary) Apr 25-28 Individual Councilmember meetings with CM and FD Apr 27 Budget Workshop Prep and ARPA Discussion
May 5 Preliminary Budget to Finance Commission
May 10 Planning Commission Approval
May 16 Notice of PH published for Budget, CIP, GANN
May 17 Gann Limit Calculated
May 25 Budget Workshop (overview budgets/no decisions)
Jun 1 Public Hearing/Adoption of Budget, CIP, Fees, GANN Jun 15 Continuation of Budget Hearing (if nec.)/Adoption 7 - 2