St. Helena City Council
February 28, 2023

City of St. Helena
Regular City Council Meeting
Tuesday, February 28, 2023 @ 6:00 PM
Vintage Hall Board Room - Second Floor
465 Main Street, St. Helena

PLEASE NOTE: Any person who wishes to speak regarding an item on the agenda or make a comment under the "Oral Communication" portion of the agenda may do so, but please observe the time limit of four minutes.

The City Council meeting will be live-streamed on Comcast Channel 28 and on the City’s website. Public comment for City Council meetings will be accepted via email to [email protected]. All public comments must be emailed three hours prior to the meeting. Emailed public comments will not be read out loud but will be publicly available and attached to the on-line City Council agenda.

The schedule of upcoming meetings and published meeting agendas can be found on the City of St. Helena website at https://sthelena.civicweb.net/portal/.

Simultaneous Spanish interpretation services during meetings can be scheduled upon request.

To ensure interpreters are available, requests must be made at least 72 hours in advance by calling the Office of the City Clerk at (707) 968-2640 or emailing [email protected].

The schedule of upcoming meetings and published meeting agendas can be found on the City of St. Helena website at https://sthelena.civicweb.net/portal/.

Servicios de interpretación en español durante la reunión pueden ser solicitados por el público.

Para asegurar que los intérpretes estén disponibles, los servicios tienen que ser solicitados al menos 72 horas antes de la reunión llamando a la oficina de la Secretaria de la Ciudad al (707) 968-2640 o por correo electrónico a [email protected] .

El horario de las reuniones publicadas y próximas puede ser localizado en el sitio de web de la Ciudad en https://sthelena.civicweb.net/portal/ .

Page

1. CALL TO ORDER

2. ROLL CALL
Mayor: Paul Dohring, Vice Mayor Eric Hall:, City Council Members: Anna Chouteau, Lester Hardy, Billy Summers

3. PLEDGE OF ALLEGIANCE

4. ADOPTION OF THE AGENDA

5. PUBLIC FORUM:

Members of the public are entitled to speak on matters of municipal concern not on the agenda during Public Forum. Each person’s comments shall be limited to 4 minutes. Each person is entitled to speak on any non-agendized item only once at any meeting. Brief questions by Council Members for clarifications may be posed and answered, and Council Members may make requests that items be placed on future agendas, but in accordance with state law, no substantive

discussion or action may take place unless and until the matter properly appears on the agenda.

6. REPORTS BY STAFF AND CITY COUNCIL, FUTURE AGENDA ITEMS, AND AB 1234 REPORTS:

Reports by staff and/or Council Members on items of general interest. Brief questions for clarification may be posed and answered, and Council Members may request that items be placed on a future agenda. Except under certain circumstances, the Brown Act prohibits any other discussion or action by the City Council.

7. PRESENTATIONS AND PUBLIC RECOGNITIONS

7.1. Proclamation in honor of the life of David A. Garden, Sr.

Proclamation
5 8. STAFF BRIEFING
None

9. CONSENT ITEMS
Members of the Council or the public may ask that any items be considered individually for purposes of considering alternative action, for extended discussion, or for public comment. Unless that is done, one motion may be used to adopt all recommended actions. (Roll Call Vote)

9.1. January 2023 Review and Forecasting of City Water Supply Availability CEQA Determination: Exempt
Prepared By: Ian Dale, Environmental Services Tech
Recommendation:

Receive and File
Water Supply and Forecasting - January 2023 - Pdf
7 - 12

9.2. Adopt Resolution of the City Council of the City of St. Helena Approving Construction of a “Quick-Build” Traffic Calming Project at the Intersection of Kearney Street and Madrona Avenue.

CEQA Determination: Exempt
Prepared By: Eric Janzen, Assistant Public Works Director Recommendation:

Approve the attached resolution.

Staff Report - Pdf
13 - 30

9.3. Recommended approval of a resolution authorizing (1) the City Manager to execute a change order with North Bay Office Furniture for purchase of furniture and installation services as part of the Napa Valley College move (Project C22-001) in the amount of $10,000 for a total not-toexceed $33,385 (2) a budget increase of $10,000 to 101-4000-2145 and use of general fund balance of the same.

CEQA Determination: Not a CEQA project
Prepared By: Martin Beltran, Senior Management Analyst
Recommendation:
31 - 34

Staff recommends adoption of the attached resolution.

Staff Report - Pdf

10. PUBLIC HEARINGS
None

11. OLD BUSINESS

11.1. Presentation by Raftelis on Water & Wastewater Rate Study CEQA Determination: Not a CEQA project
Prepared By: Mandy Kellogg, Administrative Services Director Recommendation:

Receive and File.

Staff Report - Pdf
35 - 58

12. NEW BUSINESS

12.1. Presentation by Baker Tilly on Long Range Financial Plan Options and Council Discussion and Direction
CEQA Determination: Not a CEQA project
Prepared By: April Mitts, Assistant City Manager
Staff Report - Pdf
59 - 89

13. ADJOURNMENT
The next Regular City Council meeting is scheduled for March 14, 2023, at 6:00 p.m.

This agenda was posted at City Hall, 1572 Railroad Avenue, and at Vintage Hall, 465 Main Street, St. Helena, California on February 24, 2023.

Cindy Tzafopoulos, City Clerk
In Compliance with the Americans with Disabilities Act, if you need special assistance to participate in this meeting, please call the City Clerk’s Office (707) 967-2792. Notification 72 hours prior to the meeting as required by Section 202 of the Americans with Disabilities Act will enable the City to make reasonable arrangements to ensure accessibility to this meeting.

CHALLENGING DECISIONS OF CITY ENTITIES
The time limit within which to commence any lawsuit or legal challenge to any quasi-adjudicative decision made by the City of St. Helena is governed by Section 1094.6 of the Code of Civil Procedure, unless a shorter limitation period is specified by any other provision, including without limitation Government Code section 65009 applicable to many land use and zoning decisions, Government Code section 66499.37 applicable to the Subdivision Map Act, and Public Resources Code section 21167 applicable to the California Environmental Quality Act (CEQA). Under Section 1094.6, any lawsuit or legal challenge to any

quasi-adjudicative decision made by the City must be filed no later than the 90th day following the date on which such decision becomes final. Any lawsuit or legal challenge, which is not filed within that 90-day period, will be barred.

Government Code section 65009 and 66499.37, and Public Resources Code section 21167, impose shorter limitations periods and requirements, including timely service in addition to filing.

If a person wishes to challenge the above actions in court, they may be limited to raising only those issues they or someone else raised at the meeting described in this notice, or in written correspondence delivered to the City of St.

Helena, at or prior to the meeting. In addition, judicial challenge may be limited or barred where the interested party has not sought and exhausted all available administrative remedies.

SUPPLEMENTAL MATERIAL RECEIVED AFTER THE POSTING OF THE AGENDA
Any supplemental writings or documents distributed to a majority of the City Council regarding any item on this Agenda, after the posting of the Agenda, will be available for public review in the City Clerk’s Office located at 1572 Railroad Avenue, St. Helena, California, during normal business hours and by appointment. In addition, such writings or documents will be made available on the City’s web site at https://sthelena.civicweb.net and will be available for public review at the respective meeting.

CITY OF ST. HELENA PROCLAMATION
IN HONOR OF THE LIFE OF DAVID A. GARDEN, SR.

WHEREAS, David Garden was a civic-minded, philanthropic, engaged member of the St.

Helena community for 50 years; and
WHEREAS, Mr. Garden’s resolute leadership and determined voice were always used for the good, and his character and commitment continue to serve as a model for us all; and WHEREAS, beginning in 1988, Mr. Garden facilitated the development of 20 acres of his land for the common good, allowing for the Stonebridge Affordable Apartments, the Upper Napa Valley College campus and Wappo Park; and
WHEREAS, Mr. Garden was the driving force who brought together several community partners, including Ecumenical Association for Housing (EAH), Napa Valley Community Housing and the City of St. Helena, to make the 80-unit Stonebridge Apartments complex a reality for many hard-working families; and
WHEREAS, in September 2012, upon the dedication of the Stonebridge community room as the David Garden Community Room, Mr. Garden was duly recognized by Congressmember Mike Thompson, Assemblymember Michael Allen and Napa County Supervisor Diane Dillon; and WHEREAS, with his beloved wife, Nancy, in 1985 he converted the 1872 carriage house on Rancho Otranto to The White Barn, providing an historic and wonderful venue for the arts, theater and music for the benefit of residents and visitors alike; and WHEREAS, Mr. Garden generously created a conservation easement through the Land Trust of Napa County which will preserve and protect in perpetuity 600 acres in the western hills of St.

Helena; and
WHEREAS, our fond and cherished memories of Mr. Garden -- particularly his love for family, church, community, cattle, corn, and bow ties-- will endure forever; and WHEREAS, the City of St. Helena and its citizens wish to record our deep sorrow over his passing on January 17, 2023 and honor him for his highly impactful philanthropy and unwavering commitment to St. Helena and the surrounding community.

NOW, THEREFORE, I, Paul Dohring, Mayor of the City of St. Helena, on behalf of the entire City Council, in recognition of David Garden’s many contributions to our City and its citizens, do hereby express our deep appreciation for his dedication to the progress of our community and extend to his family our sincere sympathy upon his passing.

Dated: February 28, 2023
______________________________
Paul Jamison Dohring, Mayor
City of St. Helena
Agenda Item #7.1.

Report to the City Council
Regular City Council - 28 Feb 2023
Agenda Section: CONSENT ITEMS
Subject: January 2023 Review and Forecasting of City Water Supply Availability
CEQA
Determination:

Exempt
Prepared By: Ian Dale, Environmental Services Tech
Reviewed By: Joseph Leach, Public Works Director and City Engineer Approved By: April Mitts, Assistant City Manager

BACKGROUND
The City of St. Helena publishes a monthly water report on the City website (www.cityofsthelena.org/publicworks/page/water-reports). The report includes the amount of water produced at the Louis Stralla Water Treatment Plant and the Stonebridge Potable Water Wells, and potable water delivered from the City of Napa. In addition to presenting data on the amount delivered monthly, the report includes year-to-date information and prior year data. Water elevation and capacity at the Bell Canyon Reservoir is included as well as information on rain and temperatures.

At the City Council meeting of July 27, 2021, the City Council requested City staff enhance the monthly water report to include a forecast of available water supply, consistent with the adopted Urgency Ordinance. This request is consistent with the City's Fiscal Year 2021-22 Council Goal to develop a Comprehensive Water Security Framework, and the recently developed Framework that includes a goal to "Maximize Conservation During Water Emergency" and subtask 1C to "provide customers with comparison of actual vs. projected water demand" as well as Framework Goal Improve Consumer Satisfaction and Confidence" and subtask 3C to "additional analytical tools to improve consumer confidence."
Agenda Item #9.1.

DISCUSSION
City staff has developed a forecasting tool to facilitate its ability to optimize water use and track water availability. Included as Attachment 1 is the Monthly Water Report for January 2023. The water produced for January 2023 is down by -34% when compared to January 2022 and is down -9% compared to the average of January 2018-2020. Below is a chart summarizing the water produced per source:

Water Produced per Source
Source
Average (2018 -
2020)
(Acre-Feet)
January 2022
(Acre-Feet)
January 2023
(Acre-Feet)
Bell Canyon 41 74 14
Stonebridge Wells 4 40 16
Napa Water 37 0 45
Total 82 114 75
Percent change from January 2022: -34%
Percent change from average of January 2019 - 2021: -9% Bell Canyon Reservoir
The City is still in drought conditions. Bell Canyon Reservoir has adequate water to support the City's needs through this calendar year with Phase I conservation measures in effect. The storage in Bell Canyon graph (Attachment 2) has been revised to include historic reservoir supply levels since July 2021. It also shows the water availability forecast through June 2024 based on the highest water usage during a non-drought year (FY 2019/20) and 10 inches of rainfall (lowest recorded).

As of February 1, 2023, Bell Canyon Reservoir elevation was at 421.77 feet representing approximately 2,366.25 acre feet (AF) and 99.27% capacity. Bell Canyon spillway level is 422 feet representing 2,383.69 acre feet in water supply volume. Below is a chart comparing Bell Canyon elevation levels, water supply availability in acre feet, and percent capacity of the reservoir on February 1st in 2021, 2022, and 2023.

Year 2021 2022 2023
Bell Canyon Elevation Level 399 Ft. 420.89 Ft. 421.77 Ft.

Acre Feet 896 AF 2,289 AF 2,366 AF
Percent Capacity 37.6% 96.4% 99.27%
As a follow up to the May 24th City Council meeting, staff developed a graph (Attachment 3) highlighting the relationship between the reservoir elevation level and water supply availability in acre feet. The graph shows the current status of the reservoir. Furthermore, the graph also displays the points where City Council decided to implement Phase I and Phase II drought restrictions in 2020.

Agenda Item #9.1.

Continued Water Conservation
California experienced two consecutive dry years 2020 and 2021 and drought conditions state-wide persist. Due to the combination of warmer-than-average temperatures and minimal precipitation in the state, the Department of Water Resources (DWR) declared 2021 as the fourth-driest year on record statewide. The record-breaking dry period in January and February 2022, and the absence of significant rains in March, have required DWR to reduce anticipated deliveries from the State Water Project (SWP). However, the reduction does not affect St. Helena as the City has multiple robust water sources not affected by the executive order. Water availability from the Bell Canyon reservoir is based on the City's State Water Rights permit and not the SWP. The City has not received any curtailment order from DWR nor does the City anticipate receiving one.

Due to the ongoing drought conditions, Phase I Water Emergency remains in effect, even though Bell Canyon Reservoir level is above the level when Council initially called for Phase I conservation. Staff will monitor State-wide and local drought conditions, weather conditions, and provide updates on a monthly basis.

City of Napa Water Supply
Normal operations continue at Rutherford Pump Station (RPS) and the City is taking delivery of the allotment purchased from City of Napa. During the month of January 2023, Rutherford Pump Station was producing an average of 0.479 MG/day for a total of 45.60 acre feet (AF) for the month.

FISCAL IMPACT
None

RECOMMENDED ACTION
Receive and File

ATTACHMENTS
MWR January 1-31 2023
Attachement 2 - January Bell Canyon Reservoir Storage with Phase I II Attachement 3 - Bell Canyon Water Storage Forecast
Agenda Item #9.1.

CITY OF ST. HELENA

MONTHLY WATER REPORT
CC: CC __X__ PC__X__ FILE _____
RECEIVED: _____ BY: __
LOUIS

STRALLA

WATER PLANT
TK #1 & #2
ADJUST

13.97 4.55 -0.14

18.6% -0.6%

24.59 MG MG

1.23 MG MG

0.67 MG MG

0.79 MG MG
% %
321.53 AF 39.6% 243.26 AF 30.9%

90.33 MG 79.24 MG
328.31 AF 40.4% 219.24 AF 27.9%
106.94 MG 71.41 MG
161.87 AF 19.9% 324.66 AF 41.2%

52.72 MG 105.75 MG
TOTAL WATER PRODUCED 811.71 AF 100.0% 787.16 AF 100.0%

DELIVERY (ALL)

0.00 0.00
421.77 FT. FT.
-0.50 FT. FT.
2366.25 AF AF

99.3 % %

9.82 IN IN

21.64 IN IN
DISCLAIMER: The data presented in this report is approximate and for informational purposes only. -0.44

January 1-31, 2023

STONEBRIDGE

POTABLE
WELLS
SBW

IRRIGATION
WATER

NAPA WATER

THIS YEAR LAST YEAR
AMOUNT PRODUCED in AF 15.93 0.01 45.60
AMOUNT PRODUCED in MG 5.19 0.00 14.85
PERCENT 21.2% 60.7%

WATER PRODUCED DELIVERY (AGGREGATE)
TOTAL PRODUCED THIS PERIOD 37.20
MAXIMUM DAILY PRODUCED 1.05
MINIMUM DAILY PRODUCED 0.26
AVERAGE DAILY PRODUCED 0.72

WATER YEAR TOTALS

THIS FISCAL YEAR LAST FISCAL YEAR

LOUIS STRALLA WATER PLANT

NAPA WATER

STONEBRIDGE POTABLE WELLS

SBW IRRIGATION WATER
THIS MONTH THIS MONTH, LAST YR.

ELEVATION BELL CANYON RESERVOIR 420.89
STONEBRIDGE APARTMENTS MG/Jan 1 -31 0.00 MG/Jan 1-31

WATER ELEVATION, CAPACITY & RAINFALL

THIS FISCAL YEAR LAST FISCAL YEAR
NAPA VALLEY COLLEGE MG/Jan 1 -31 0.00 MG/Jan 1-31

TEMPERATURES
MONTHLY RISE OR DROP -1.39
CAPACITY AT END OF PERIOD 2289.00
PERCENT OF FULL CAPACITY 96.4
RAINFALL IN THIS PERIOD 1.32
TOTAL RAINFALL SEASON TO DATE 23.36
THIS MONTH, THIS YEAR THIS MONTH, LAST YR.

DEGREES IN FAHRENHEIT 30-71 34-70
Updates will be provided if any errors are identified.

AVERAGE 50 52

REMARKS
City of Napa Water Delivery: RPS producing an average of 0.479 MG/day during January 2023.

Agenda Item #9.1.

Bell Canyon Reservoir Stage-Storage Relationship
430
2383.69 AF, 422 WSE
420
410
-
C � 400 0 QJ
+-'
cu > QJ QJ V1
UJ C 390
QJ cu
u QJ
cu E I...
::J QJ 380 V) >
I... 0
QJ ..c
+-' cu
cu
QJ
QJ 370
360
350
340
0 500 1000 1500 2000 2500
Reservoir Storage (acre-feet)
Agenda Item #9.1.

Agenda Item #9.1.

Report to the City Council
Regular City Council - 28 Feb 2023
Agenda Section: CONSENT ITEMS
Subject: Adopt Resolution of the City Council of the City of St. Helena Approving Construction of a “Quick-Build” Traffic Calming Project at the Intersection of Kearney Street and Madrona Avenue.

CEQA
Determination:

Exempt
Prepared By: Eric Janzen, Assistant Public Works Director Reviewed By: Joseph Leach, Public Works Director and City Engineer Approved By: Anil Comelo, City Manager

BACKGROUND
The City has partnered with the Blue Zones Project and the Napa County Bicycle Coalition to improve quality of life for our citizens.

Our partnership has identified a “quick-build” demonstration project that promotes active transportation, improves safety for students walking to school and offers the potential to beautify our streets.

This project was presented to the Active Transportation and Sustainability Committee (ATSC) on December 6, 2022 and the ATSC voted to recommend the project to the City Council.

DISCUSSION
The uncontrolled intersection of Madrona Avenue and Kearney Street has been identified as a priority intersection for crosswalk improvements in the Safe Routes Napa County Walk Audit Report. Recommended improvements included increasing the visibility of pedestrians to drivers, reducing crosswalk length, and reducing vehicle speed through the intersection.

Agenda Item #9.2.

This intersection is frequently used by school-aged children to walk to St. Helena Elementary School and Robert Louis Stevenson Middle School.

Public Works (PW), in coordination with Blue Zones Project and the Napa County Bicycle Coalition, identified sidewalk bulb-outs as the best method to achieve the above-stated results. Since bulb-outs have not been used extensively within the City, Public Works recommended that a “quick-build” demonstration project be completed to evaluate this traffic-calming measure and elicit public response.

This “quick-build” project will be temporary (about 3 months) and include installation of traffic control equipment that mimics the function of sidewalk bulb-outs. This would allow the City to test the benefits of this type of intersection improvement and determine if this measure is the best choice of for this particular intersection. At the end of the demonstration, the temporary traffic controls will be removed and only the high-visibility crosswalk striping will remain.

Blue Zones Project and the Napa County Bicycle Coalition were in favor of this project.

The Blue Zones Project offered to supply the materials needed to implement the demonstration project and coordinate volunteers to assist in the installation.

The City would contribute staff and the encroachment permit to implement the project.

PW Staff also recommend that additional time be allocated to conduct informal “before”, “during”, and “after” speed studies on Madrona Avenue.

FISCAL IMPACT
A minimal expense of City staff time to coordinate and install the temporary traffic controls.

Staff time will be supplemented by volunteers coordinated by Blue Zones.

Staff also recommend that additional staff time be allocated to conduct informal “before”, “during”, and “after” speed studies on Madrona Avenue.

RECOMMENDED ACTION
Approve the attached resolution.

ATTACHMENTS
Resolution.Quick Build Traffic Calming Project.2023
Madrona and Kearney Quick Build
Agenda Item #9.2.

CITY OF ST. HELENA
RESOLUTION NO. 2023-
Resolution of the City Council of the City of St. Helena Approving Construction of a “Quick-Build” Traffic
Calming Project at the Intersection of Kearney Street
and Madrona Avenue.

WHEREAS, The City has partnered with the Blue Zones Project and the Napa County Bicycle Coalition to improve quality of life for the citizens of St. Helena; and WHEREAS, this partnership has identified a “Quick-Build” Traffic Calming Project that promotes active transportation, improves safety for students walking to school and offers the potential to beautify our streets; and
WHEREAS, the “Quick-Build” Traffic Calming Project will be temporary and include installation of traffic control equipment that mimics the function of sidewalk bulbouts at the intersection of Kearney Street and Madrona Avenue; and WHEREAS, the “Quick-Build” Traffic Calming Project was presented to the Active Transportation and Sustainability Committee (ATSC) on December 6, 2022 and the ATSC voted to recommend the project.

NOW, THEREFORE BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ST. HELENA AS FOLLOWS:

SECTION 1. The above recitals are true and correct and are incorporated herein by this reference.

SECTION 2. The City Council approves the “Quick-Build” Traffic Calming Project and authorizes the Director of Public Works to implement the project.

SECTION 3. The City Council authorizes the Director of Public Works to allocate Staff time to assist in the installation of this project and to issue an encroachment permit without fee.

SECTION 4. The City Council further authorizes the Director of Public Works to allocate Staff time to conduct a speed study on Madrona Avenue to test the effectiveness of the project.

Approved at a Regular Meeting of the St. Helena City Council on _________, 2023, by the following vote:

Mayor Paul Dohring: _____
Agenda Item #9.2.

Vice Mayor Eric Hall: _____
Council Member Anna Chouteau: _____
Council Member Lester Hardy: _____
Council Member Billy Summers: _____
APPROVED: ATTEST:
______________________ ________________________
Paul Jamison Dohring, Mayor Cindy Tzafopoulos, City Clerk Agenda Item #9.2.

Madrona and Kearney
Demonstration Project
December 6, 2022
ATSC Meeting
Agenda Item #9.2.

Project Site
◦ Intersection of Madrona and Kearney
◦ Between RLS Middle School and St. Helena
Elementary School campuses
◦ Madrona Ave uncontrolled; Kearney stopcontrolled
◦ Red curb on northeast curb only; three yellow
school zone crosswalks (two across Kearney, one
across Madrona)
◦ Madrona - recommended Class II bike lanes in
Bike Plan
Agenda Item #9.2.

Agenda Item #9.2.

Agenda Item #9.2.

Project Site Background
● RLS SRTS Walk Audit Report:
○ Barriers: long crossing distance on north leg, wide curb radii facilitates fast turns, speeding/lack of traffic control, low pedestrian visibility
○ Recommendations (high priority): curb extensions on NW, NE, SE corners; high-visibility crosswalk across Madrona
● City SRTS/Active Transportation Plan - GHD Work
○ Inspired by community concerns re: speeding, including a young student who felt unable to cross Madrona/Kearney to walk to SHES
○ Phase 1 focused on Madrona & Spring St specifically
○ GHD recommendations included Madrona/Kearney crossing improvements
○ Madrona/Kearney one of four intersections selected by ATSC in 2021 as priority location for a pilot project
Agenda Item #9.2.

Proposed
Temporary
Changes
Bulb-outs
What are bulb-outs?
Bulb-outs (also called curb extensions) extend
the sidewalk into the parking lane to narrow the
roadway and provide additional pedestrian
space and visibility at key locations. They can
be placed at corners or midblock. (SFMTA)
Agenda Item #9.2.

Agenda Item #9.2.

Agenda Item #9.2.

Agenda Item #9.2.

Agenda Item #9.2.

Agenda Item #9.2.

Agenda Item #9.2.

Proposed Timeline
Implement Spring 2023
(around rain)
Maintain for 90 days
(monitoring speed,
gathering community
feedback)
Determine next steps
based on community
feedback
transition to permanent, alter
installation, or remove
Agenda Item #9.2.

ASK FOR TODAY
Recommendation
supporting the
project, including
the proposed
installation
timeline (90 days)
Agenda Item #9.2.

Report to the City Council
Regular City Council - 28 Feb 2023
Agenda Section: CONSENT ITEMS
Subject: Recommended approval of a resolution authorizing (1) the City Manager to execute a change order with North Bay Office Furniture for purchase of furniture and installation services as part of the Napa Valley College move (Project C22-001) in the amount of $10,000 for a total not-to-exceed $33,385 (2) a budget increase of $10,000 to 101-4000-2145 and use of
general fund balance of the same.

CEQA
Determination:

Not a CEQA project
Prepared By: Martin Beltran, Senior Management Analyst
Reviewed By: Mandy Kellogg, Administrative Services Director Approved By: Anil Comelo, City Manager

BACKGROUND
Recognizing the deterioration of the City’s assets, the City Council set in motion a series of studies, working committees, and reports to categorize assets, provide costs estimates for replacement/repair, and develop funding strategies for the replacement/repair of assets. In particular, the work of the SHAPE Committee and the Financing Civic Infrastructure Taskforce provided resources and recommendations that still have merit and may provide to be direction for future or permanent efforts for municipal faculties.

In December of 2019, a near fire broke out in City Hall located at 1480 Main Street, resulting in smoke damage throughout the building. On January 6, 2020, a Special City Council Meeting was held to discuss the cost and anticipated timing of repairs necessary for City Hall (1480 Main Street) and the City's then Public Works Administration Building (1572 Railroad Avenue). On May 25, 2021, the City Council approved a Resolution 2021- 73 authorizing the City Manager, or designee, to execute a lease for a portion of the Napa Valley Community College District Upper Valley Campus for space to serve as a City Hall and Police facility. The initial term of the lease is for five years with the option to extend Agenda Item #9.3.

the lease for an additional two-year term. Tenant Improvements (TI's) are necessary in order to facilitate the specific needs of the City.

On January 4, 2023, the City executed a purchase order with North Bay Office Furniture for the purchase of furniture and services related to dismantling four existing cubicles and moving and reinstalling the cubicles at 1088 College Avenue. The original agreement was for an amount of $16,768.

On February 3, 2023 a change order was executed for $6,617.32 for a total not to exceed of $23,386.

DISCUSSION
During the course of the move to Napa Valley College the need was identified for repurposing the cubicles currently in use at City Hall as well as the purchase of new furniture. After the initial furniture was ordered and cubicles were dismantled, moved, and reinstalled, staff recognized the need for additional items including for the reception area.

The need to procure additional items results in the purchase order being greater than $25,000, which is the City Manager's signatory level. The additional funds will allow North Bay Office Furniture to dismantle, move, and reinstall the remaining cubicles as well as complete the furnishing the offices and provide furniture for the reception area.

Staff is recommending the approval of the change order for an additional $10,000 for a total not to exceed $33,386.

FISCAL IMPACT
The fiscal impact of the change order is $10,000 for a total not-to-exceed amount of $33,386, resulting in a budget increase to 101-4000-2145 of $10,000 and use of General Fund balance of the same.

RECOMMENDED ACTION
Staff recommends adoption of the attached resolution.

ATTACHMENTS
Attachment 1: Resolution
Agenda Item #9.3.

CITY OF ST. HELENA
RESOLUTION NO. 2023 –
Authorizing (1) the City Manager to execute a change
order with North Bay Office Furniture for purchase of
furniture and installation services as part of the Napa Valley College move (Project C22-001) in the amount of
$10,000 for a total not-to-exceed $33,385.46 (2) a budget increase of $10,000 to 101-4000-2145 and use of general fund balance of the same
A. It has been determined that current City Hall and Police Department facilities have exceeded their functional life, and;
B. On May 25, 2021, the City Council approved a Resolution 2021-73 authorizing the City Manager, or designee, to execute a lease for a portion of the Napa Valley Community College District Upper Valley Campus for space to serve as a City Hall and Police facility, and;
C. On August 6, 2021, a formal lease agreement between the City and the Napa Valley Community College Upper Valley Campus was executed, and; D. On January 4, 2023, the City executed a purchase order with North Bay Office Furniture for the purchase of furniture and services related to dismantling four existing cubicles and moving and reinstalling the cubicles at 1088 College Avenue.

The original agreement was for an amount of $16,768.14, and; E. On February 3, 2023, a change order was executed for $6,617.32 for a total not to exceed of $23,385.46.

F. There is a need for the purchase of additional furniture and installation, and; G. The additional requests results in the purchase order being greater than $25,000, which is the City Manager's signatory level, and;
H. The City of St. Helena and North Bay Office Furniture now desire to execute a change order to expand the scope of the services provided to include the purchase of additional furniture and installation services in the amount of $10,000 for a total not to exceed amount of $33,385.46.

Agenda Item #9.3.

RESOLUTION
The City Council of the City of St. Helena hereby resolves as follows:

1. Authorizing the City Manager to execute a change order with North Bay Office Furniture for purchase of furniture and installation services as part of the Napa Valley College move (Project C22-001) in the amount of $10,000 for a total not-to-exceed $33,385.46;

2. Authorizing a budget increase of $10,000 to 101-4000-2145 and use of general fund balance of the same.

Approved at a Regular Meeting of the St. Helena City Council on February 28, 2023, by the following vote:

Mayor Paul Dohring: ____ _
Vice Mayor Eric Hall: ___ __
Council Member Anna Chouteau: ___ __
Council Member Lester Hardy: ___ __
Council Member Billy Summers: _ ____
APPROVED: ATTEST:
__________________________ __________________________
Paul Jamison Dohring, Mayor Cindy Tzafopoulos, City Clerk Agenda Item #9.3.

Report to the City Council
Regular City Council - 28 Feb 2023
Agenda Section: OLD BUSINESS
Subject: Presentation by Raftelis on Water & Wastewater Rate Study CEQA
Determination:

Not a CEQA project
Prepared By: Mandy Kellogg, Administrative Services Director Reviewed By: April Mitts, Assistant City Manager
Approved By: Anil Comelo, City Manager

BACKGROUND
The purpose of a water and wastewater rate study is to determine the level of funding required over the next five years to ensure that each utility is meeting financial obligations for ongoing operations and maintenance, debt service, and capital improvements while maintaining prudent reserves. Updating the water and wastewater rates to keep up with the rising costs of providing safe and high-quality drinking water and wastewater services is a key component of maintaining the financial viability of the utilities, including maintaining healthy fund balances/reserves for emergencies and applicable bond covenants, and debt coverage ratios for bond covenants, and strong credit ratings.

Updates to the rate study are also necessary to fund investments in infrastructure maintenance and improvements which are mandated or otherwise necessary for safe and efficient operation of the utilities.

California's Proposition 218 requires that rates be equitably apportioned and proportional to the cost of providing services. The water and wastewater rate study conducts a Cost of-Service analysis, which evaluates the cost of providing water and wastewater and allocates those costs to rate structure components to ensure the proposed rates are aligned with the costs to provide service and that all customer classes are subject to the equitable cost recovery whether they are located inside or outside of City limits.

On March 25, 2022, the City Council approved a resolution authorizing the City Manager to execute a Professional Services Agreement with Raftelis Financial Consultants to Agenda Item #11.1.

provide services associated with a Water and Wastewater Rate Study based on their experience as one of the largest firms in California and the country specializing in financial, rate, and management consulting for water, wastewater, and stormwater utilities. In addition, Raftelis has assisted numerous agencies in California implementing conservation-based rate structures, with special consideration for climate variation, cyclical drought conditions, and long-term passive conservation.

The scope of service for Water and Wastewater Rate Study project included the following tasks:
• Task 1: Project Initiation, Management, and Data Collection. Public input and engagement will be sought at this initial stage, as well as throughout the rate study process during public outreach and workshops identified in the project tasks. • Task 2: Financial Plan Development for Water and Wastewater Services - This will include creation of a model to examine the utilities' 10-year financial plan to determine additional revenue required to ensure the financial integrity of the City's water and wastewater enterprise funds.
• Task 3: Cost-of-Service Analysis - This analysis will determine updated cost allocations to the City's utility systems to ensure costs are fairly recovered across user classes.
• Task 4: Rate Survey - This survey will provide a comparative rate analysis of comparable communities.
• Task 5: Rate Design - Rate models will be developed with flexibility to compare the current rate structures with proposed alternatives.
• Task 6: Capital Renewal & Replacement (R&R) Considerations and Scenarios - Alternative capital financing strategies will be developed to allow the City to best meet its fiscal and public policy objectives.
• Task 7: Rate Study Report - This report will document the methodology used to calculate the City's water rates and demonstrate conformance with cost-of-service principles, developed with the legal requirements of Proposition 218, and guidance from the City's legal counsel.
• Task 8: Customer Impacts and Sensitivity Analysis - The customer impact analysis will include data that shows projected rate impacts by customer class at various levels of usage.
• Task 9: City Council Workshops - This task will include three Rate Workshops. • Task 10: Proposition 218 Noticing and Public Hearing
• Task 11: Community Engagement and Stakeholder Information Sessions - This task will include four community meetings conducted in an Open House format and one virtual community meeting.

The City's key objective of the current rate study is to minimize the growth of the rates while ensuring that sufficient funds are generated to provide for a stable and wellfunctioning water and wastewater system.

Agenda Item #11.1.

DISCUSSION
As part of the rate study, the City engaged a Water and Wastewater Rate Study Advisory Committee to collaborate in the following:
• Reviewing and confirming financing assumptions and options presented by staff and the consultant for CIP projects in the first five years of the Rate Study, giving due consideration to project prioritization (immediate need, and estimated cost) and the proper balance of using cash versus debt.
• Reviewing and confirming significant financial assumptions in the Study, such as reserves, adequacy of sinking funds, and designated and undesignated fund balances in accordance with generally accepted municipal financial principles. • Review findings and recommendations to ensure equitable allocation of costs related to industrial, commercial, and residential users, rate models, and recommend appropriate rates and changes with consideration given to location, setting, special demands or unique conditions.

The Water & Wastewater Rate Study Advisory Committee has participated in ten meetings to date and is scheduled for an additional meeting on March 7, 2023. The meetings included the following:
• June 14, 2022: Presentation from Raftelis on Water and Wastewater rate setting, review of different rate structures, and outline of proposed rate study process and schedule.
• June 28, 2022: An overview of policy objectives impacting the rate study. • August 25, 2022: Discussion pertaining to results of policy objectives exercise, discussion on reserve policies, and review of proposed Capital Improvement Program to be included in the rate study.
• September 13, 2022: Continued discussion pertaining to results of policy objectives exercise, continued discussion on reserve policies, and recommendations to the proposed Capital Improvement Program to be included in the rate study.
• November 9, 2022: Review of the Water and Wastewater Rate Study Financial plan scenarios and assumptions and evaluate rate structure modifications. • December 8, 2022: Continued discussion regarding updates to the financial plan scenarios and extensive review of the Capital Improvement Program. • December 29, 2022: Provided input and recommendations to the Water and Wastewater Financial Plan scenarios and assumptions and reviewed Proposition 218 compliance as it applies to tiered rate structures. • January 12, 2023: Reviewed amendments to the Financial Plan options and discussed preliminary Water and Wastewater rate structures. • February 9, 2023: Discussion pertaining to questions submitted by the Committee, approval of the proposed Water and Wastewater Capital Improvement Program, and approval of the proposed Water Financial Plan Agenda Item #11.1.

Scenario 2 and proposed Wastewater Financial Plan Scenario 2, which omits $6.1 million in recycled water projects from the Water and Wastewater CIP. • February 16, 2023: Reviewed Proposition 218 impacts and reviewed various drought rate models.

As a result of the collaboration and dedication of the committee members several important decisions were made to further the progress of the rate study, which consist of the following:

1. Recommendation for the Water and Wastewater Capital Improvement Program to be included in the rate study (Attachment A).

2. Recommendation for the Water and Wastewater Financial Plan scenarios (Attachment B).

At the remaining meeting scheduled on March 7th, the committee will be reviewing committee requested rate models.

The timeline for the outstanding tasks to complete the rate study is as follows:

Task Description Date
Community Open House Water and Wastewater
Rate Study Q&A March 6, 2023
Water and Wastewater
Rate Study Advisory
Committee Meeting
Review of Rate Models
and recommendation to
City Council
March 7, 2023
City Council Meeting Final Rate Study
Presentation March 14, 2023
Water and Wastewater
Rate Study Report
Complete Report for
Presentation to City
Council
March 28, 2023
City Council Meeting Rate Authorization and
First Hearing March 28, 2023
Customer Noticing Mail Proposition 218
Notices March 31, 2023
City Council Meeting Second Hearing and
Adoption of Rates May 23, 2023
Customer Outreach
Customer Education,
Conservation, and
Compliance
April - June 2023
Rate Implementation Effective Date of Adopted
Rates July 1, 2023

FISCAL IMPACT
There is no financial impact associated with this report.

Agenda Item #11.1.

RECOMMENDED ACTION
Receive and File.

ATTACHMENTS
Attachment A - Recommended Water and Wastewater CIP
Attachment B - Recommendation for the Water and Wastewater Financial Plan scenarios
St. Helena Water and Wastewater Rate Study Update Presentation Agenda Item #11.1.

City of St. Helena 10-Year Water Capital Improvement Program Project Funding Source FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031 FY 2032 W‐109 Bell Canyon Intake Tower Replacement Unrestricted $329,323 $2,963,904W‐80 Dwyer Road Booster Pump Station Unrestricted $900,000W18‐113 SCADA Improvements ‐ Offsite Communications Unrestricted $160,000 $320,000 $320,000W‐86 Spring Mountain Pressure Zone Improvements (Holmes Tank Upgrade) Unrestricted $304,494 $1,370,221 $1,370,221PWTM‐1 Napa Intertie Pipeline Replacement Unrestricted $1,143,000 $2,286,000 $2,286,000Smart Water Meters Unrestricted $394,000 $788,000 $788,000W21‐01 Kearney & Andrea Water Main Replacement Unrestricted $875,705W‐101 Rehabilitate Tank 2 at Lower Reservoir Unrestricted $940,000W18‐111 WTP Condition Assessment Unrestricted $200,000Napa Intertie Pump Station Replacement (Construction) Unrestricted $200,000 $100,000 $500,000 $10,000,000Napa Intertie Pump Station Replacement (DESIGN) Unrestricted $400,000 $1,900,000Water Treatment Plant (Water Treatment Plant Rehabilitation) Unrestricted $400,000 $4,000,000 $4,000,000PWTM‐2 Water Treatment Plant Transmission Main Replacement Unrestricted $1,590,800 $3,181,600 $3,181,600W18‐118 Water Main Annual Replacement Program Allowance Go-Bond $288,000 $288,000 $288,000 $288,000 $288,000PWRR‐1 Yr 6‐10 ‐ Water Main Annual Replacement Program allowance (not funded by GO Bond) Unrestricted $197,350 $197,350 $197,350 $197,350PWRR‐1 Future Allowance for Pipeline R/R (Years 11‐15) UnrestrictedPFAS Sampling Project Unrestricted $25,000Disinfection By Products Project Unrestricted $50,000 $323,000 $323,000 Risk and Resilience Assessment Report dated January 2022 ‐ Additional recommended items Unrestricted $75,000 $75,000Cyber‐Security Implementation Unrestricted $25,000 $25,000Asset Management Program Development Unrestricted $50,000 Asset Management Software Assessment & Optimization planning Unrestricted $15,000CMMS Purchase & Setup Unrestricted $50,000ArCommercialIS Purchase & Setup Unrestricted $35,000 $15,000Allocated RW CIP Unrestricted $250,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 $3,163,705 $6,820,123 $10,396,998 $8,706,821 $2,481,221 $10,597,350 $4,197,350 $4,197,350 $197,350

ATTACHMENT A
Agenda Item #11.1.

City of St. Helena 10-Year Wastewater Capital Improvement Program Project Funding Source FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031 FY 2032 S‐52 WWTP Phase I Upgrades USDA $12,061,800 $1,340,200S23‐01 Recycled Water ‐ Deliver Recycled Water to Crane Park's Irrigation (Design only) Unrestricted $50,000WWTP Pond Cleaning, Decommissioning, and Repurpose Unrestricted $500,000 $500,000W‐86 Spring Mountain Pressure Zone Improvements (Holmes Tank Upgrade) Go Bond $248,000 $248,000 $248,000 $248,000 $248,000PWTM‐1 Napa Intertie Pipeline Replacement Go Bond $570,000 $570,000WWGM‐6 Del Campo Curt Go Bond $608,000W21‐01 Kearney & Andrea Water Main Replacement Go Bond $222,000W‐101 Rehabilitate Tank 2 at Lower Reservoir Unrestricted $60,000W18‐111 WTP Condition Assessment Unrestricted $669,600 $669,600 $669,600 $669,600 $669,600WWRR‐4 Model Update and System Analysis Unrestricted $50,000WWRR‐5 CCTV Inspection Phase 2 Unrestricted $328,500 $328,500WWRR‐6 Address R/R needs from Phase 1 CCTV Program Years 6‐10 & 11‐20 Unrestricted $357,350 $357,350 $357,350 $357,350Asset Management Program Development Unrestricted $50,000W18‐118 Water Main Annual Replacement Program Allowance Unrestricted $15,000CMMS Purchase & Setup Unrestricted $50,000PWRR‐1 Future Allowance for Pipeline R/R (Years 11‐15) Unrestricted $35,000 $15,000 $0 $0 $0 $0 $0 $0 $0S21‐01 WWTP Recycled Pipeline and Pump Station (design only) Unrestricted $0 $250,000 $0 $0 $0 $0 $0 $0 $0 $12,061,800 $2,814,800 $2,170,600 $1,602,600 $1,467,600 $1,417,600 $685,850 $685,850 $357,350 $357,350 Agenda Item #11.1.

Scenario 2 (Hybrid CIP)
7 Fiscal Year Revenue Adjustment Proposed Debt
FY 2024 28% $10,500,000FY 2025 8% $0FY 2026 8% $23,000,000FY 2027 8% $0FY 2028 8% $0FY 2029 3% $24,000,000FY 2030 3% $0FY 2031 3% $0FY 2032 3% $0

ATTACHMENT B
Agenda Item #11.1.

Scenario 2 (Hybrid CIP)
10 Fiscal
Yearas
Revenue
Adjustment Proposed Debt Proposed Interfund Loan
FY 2023 0% $0 $873,610FY 2024 50% $3,000,000 $1,000,000FY 2025 4% $0 $0FY 2026 4% $0 $0FY 2027 4% $0 $0FY 2028 4% $0 $0FY 2029 3% $0 -$873,610FY 2030 3% $0 $0FY 2031 3% $0 -$1,000,000FY 2032 3% $0 $0 Agenda Item #11.1.

1 CITY OF ST. HELENAWater and Wastewater Rate Study
February 28, 2023City Council Presentation – February 28, 2023 Agenda Item #11.1.

Agenda
2 Background Rate Study Advisory Committee
Recommendation• Water Financial Plan• Wastewater Financial Plan
Upcoming Dates
Agenda Item #11.1.

3 Start
Step 1: Rate Setting Framework• Financial goals and policies• Pricing objectives• Alternative rate structures for evaluation
Step 1: Rate Setting Framework• Financial goals and policies• Pricing objectives• Alternative rate structures for evaluation
Step 2: Financial Plan• Evaluation of operating
and capital costs
• Cash flow analysis for
financial sufficiency
• Scenario AnalysisStep 2: Financial Plan• Evaluation of operating and capital costs
• Cash flow analysis for
financial sufficiency
• Scenario Analysis
Step 3: Rate Design• Cost of Service Analyses
(Cost allocations)
• Alternative rates design• Rate calculations &
customer impact analyses
Step 3: Rate Design• Cost of Service Analyses
(Cost allocations)
• Alternative rates design• Rate calculations &
customer impact analyses
Step 4: Rate Adoption• Documentation• Study Report • Review by legal counsel
Step 4: Rate Adoption• Documentation• Study Report • Review by legal counsel
Completion
Step 5: Rate Adoption –218 Procedures• Notice to DWP
customers
• Public HearingStep 5: Rate Adoption –218 Procedures• Notice to DWP customers
• Public Hearing
We Are
Here!
Rate Study Steps
Agenda Item #11.1.

4 Rate Study Advisory
Committee
Recommendation
(Financial Plans)
Agenda Item #11.1.

5 CAPITAL PROJECT FUNDING
Funding Mix
(Cash vs. Debt)
Debt
Covenants

ANNUAL CASH FLOW

FISCAL POLICIES AND TARGETS
Cash
Reserves
Debt Service
Coverage

FINANCIAL PLAN
INPUTS
• Customer connections• Billed water use• Revenues• Operating expenses• Capital plan• Beginning cash position

ANNUAL REVENUE

REQUIREMENTS
Financial Plan Elements
Agenda Item #11.1.

6 Scenario 1: • “Recommended CIP”• CIP start adjusted by one-year (FY 2023-24 start year)
• Full recycled water distribution
costs
• 30% revenue adjustment in FY
2024, followed by 8% revenue adjustments in FY 2025 – FY 2028, and 5% for each remaining year • Assumes proposed debt of $20M
in FY 24, $15M in FY 26, and $24M in FY 29
Scenario 1: • “Recommended CIP”• CIP start adjusted by one-year (FY 2023-24 start year)
• Full recycled water distribution
costs
• 30% revenue adjustment in FY
2024, followed by 8% revenue adjustments in FY 2025 – FY 2028, and 5% for each remaining year • Assumes proposed debt of $20M
in FY 24, $15M in FY 26, and $24M in FY 29
Scenario 3:• “Hybrid CIP”• Scenario 1 CIP with reduced
recycled water costs from Scenario 2
• 18% revenue adjustment in FY
2024, 14% revenue adjustment in FY 2025, 12% revenue adjustment in FY 2026, 8% revenue adjustments in FY 2027 – FY 2028, and 5% for each remaining year • Assumes proposed debt of
$8M in FY 24, $25M in FY 26, and $24M in FY 29
Scenario 3:• “Hybrid CIP”• Scenario 1 CIP with reduced
recycled water costs from Scenario 2
• 18% revenue adjustment in FY
2024, 14% revenue adjustment in FY 2025, 12% revenue adjustment in FY 2026, 8% revenue adjustments in FY 2027 – FY 2028, and 5% for each remaining year • Assumes proposed debt of
$8M in FY 24, $25M in FY 26, and $24M in FY 29
Scenario 2:• “Hybrid CIP”• Scenario 1 CIP with
reduced recycled water costs from Scenario 2
• 28% revenue adjustment in
FY 2024, followed by 8% revenue adjustments in FY 2025 – FY 2028, and 3% for each remaining years • Assumes proposed debt of
$10.5M in FY 24, $23M in FY 26, and $24M in FY 29
Scenario 2:• “Hybrid CIP”• Scenario 1 CIP with
reduced recycled water costs from Scenario 2
• 28% revenue adjustment in
FY 2024, followed by 8% revenue adjustments in FY 2025 – FY 2028, and 3% for each remaining years • Assumes proposed debt of
$10.5M in FY 24, $23M in FY 26, and $24M in FY 29
Water Financial Plan – Final Scenarios Evaluated
Agenda Item #11.1.

Scenario 2 (Hybrid CIP)
7 Fiscal Year Revenue Adjustment Proposed Debt
FY 2024 28% $10,500,000FY 2025 8% $0FY 2026 8% $23,000,000FY 2027 8% $0FY 2028 8% $0FY 2029 3% $24,000,000FY 2030 3% $0FY 2031 3% $0FY 2032 3% $0 Agenda Item #11.1.

Water Financial Plan Discussion
• The selected financial plan:
› Fully funds the recommended Capital Improvement Program (CIP) › Omits most recycled water pumping and distribution capital until a more detailed recycled water study can be completed
› Maintains the existing reserves policy (10-14 months of operating expenses) › Maximizes the use of borrowing to accomplish the CIP› Assumes 1,300 acre-feet per year (AFY) of water demands – Prior study/historical baseline of 1,500 AFY
• The primary financial driver to the water utility is the long-term CIP › Approximately $6M per year
8 Agenda Item #11.1.

Wastewater Financial Plan –
Final Scenarios Evaluated
9 Scenario 1: • “Recommended CIP”• CIP start adjusted by one-year (FY 2023-24 start year)
• Full recycled water distribution
costs
• 55% Revenue adjustment in
FY 2024, followed by 4% in FY 2025 – FY 2028, and 3% for each remaining year • Assumes internal fund loans
in FY 2023 of $873,610, and $1,000,000 in FY 2024
• Assumes proposed debt of
$5M in FY 2024, and $4M in FY 2026
Scenario 1: • “Recommended CIP”• CIP start adjusted by one-year (FY 2023-24 start year)
• Full recycled water distribution
costs
• 55% Revenue adjustment in
FY 2024, followed by 4% in FY 2025 – FY 2028, and 3% for each remaining year • Assumes internal fund loans
in FY 2023 of $873,610, and $1,000,000 in FY 2024
• Assumes proposed debt of
$5M in FY 2024, and $4M in FY 2026
Scenario 2:• “Hybrid CIP”• Scenario 1 CIP with reduced
recycled water costs
• 50% revenue adjustment in
FY 2024, followed by 4% in FY 2025 – FY 2028, and 3% for each remaining year • Assumes internal fund loans
in FY 2023 of $873,610, and $1,000,000 in FY 2024
• Assumes proposed debt of
$3M in FY 2024
Scenario 2:• “Hybrid CIP”• Scenario 1 CIP with reduced
recycled water costs
• 50% revenue adjustment in
FY 2024, followed by 4% in FY 2025 – FY 2028, and 3% for each remaining year • Assumes internal fund loans
in FY 2023 of $873,610, and $1,000,000 in FY 2024
• Assumes proposed debt of
$3M in FY 2024
Agenda Item #11.1.

Scenario 2 (Hybrid CIP)
10 Fiscal
Yearas
Revenue
Adjustment Proposed Debt Proposed Interfund Loan
FY 2023 0% $0 $873,610FY 2024 50% $3,000,000 $1,000,000FY 2025 4% $0 $0FY 2026 4% $0 $0FY 2027 4% $0 $0FY 2028 4% $0 $0FY 2029 3% $0 -$873,610FY 2030 3% $0 $0FY 2031 3% $0 -$1,000,000FY 2032 3% $0 $0 Agenda Item #11.1.

Wastewater Financial Plan Discussion
• The selected financial plan:
› Fully funds the recommended Capital Improvement Program (CIP) › Omits most recycled water pumping and distribution capital until a more detailed recycled water study can be completed
› Maintains the existing reserves policy (6-8 months of operating expenses) › Requires a $1M internal loan in FY 2024 to buffer a low cash balance› Maintains strong debt capacity, should borrowing be required in the future • The primary financial driver to the wastewater utility is the operating cost environment.
› The CIP program is a secondary driver
11 Agenda Item #11.1.

Rate Study Advisory Committee Meetings –
Water Rates Discussion
12 Rates 10114 June 2022
Community Priorities Open House12 Sep. 2022
Demand Pattern Analysis by Class8 Nov. 2022
Baseline Demand / New Normal Discussion8 Dec. 2022
Preliminary Alternative Rates Presented12 Jan. 2023
Conceptual Discussion on Additional Alternatives & Drought Rates16 Feb. 2023 Rates Recommendations Open House6 March 2023
Revised Rate Options and Additional Alternatives7 March 2023 Agenda Item #11.1.

13 Financial Stability
• Maintain a high level of fixed
charges
• Evaluate tiered water rates with
few tiers
• Evaluate a fixed wastewater
charge for Residential users
Financial Stability
• Maintain a high level of fixed
charges
• Evaluate tiered water rates with
few tiers
• Evaluate a fixed wastewater
charge for Residential users
Conservation
• Aggressive tier breakpoints
(smaller allocation in the lower tier(s))
• Maximize tiered rate differential
to the greatest degree possible
• Higher level of variable rate
revenues
Conservation
• Aggressive tier breakpoints
(smaller allocation in the lower tier(s))
• Maximize tiered rate differential
to the greatest degree possible
• Higher level of variable rate
revenues
Equity
• Evaluate several water rate
classes (e.g., Residential, MFR, Irrigation, Commercial, etc.) • Maintain numerous nonresidential wastewater strength classes
• Follow-through evaluation of
Inside/Outside City rates and elevation surcharges
Equity
• Evaluate several water rate
classes (e.g., Residential, MFR, Irrigation, Commercial, etc.) • Maintain numerous nonresidential wastewater strength classes
• Follow-through evaluation of
Inside/Outside City rates and elevation surcharges
Key Objectives – Rate Structures
Agenda Item #11.1.

Upcoming Dates
14 Community Open HouseShow Committee Recommendations to date and Final Rate Options March 6Final Rate Structure AlternativesDrought Rate Alternatives March 7Committee Recommendation/Options for Water and Wastewater RatesWater Drought Rates March 14
City Council Meeting
Final Rate Study Presentation (w/Draft Report)Customer Notice Authorization Request March 28
City Council Meeting
Agenda Item #11.1.

Thank you
15 Kevin Kostiuk
213.262.9309 / [email protected]
Jim Armstrong
805.395.1674 / [email protected]
Nancy Phan
206.707.9150 / [email protected]
Agenda Item #11.1.

Report to the City Council
Regular City Council - 28 Feb 2023
Agenda Section: NEW BUSINESS
Subject: Presentation on Long Range Financial Plan Options and Council Discussion and Direction
CEQA
Determination:

Not a CEQA project
Prepared By: April Mitts, Assistant City Manager
Reviewed By: Anil Comelo, City Manager
Approved By: Anil Comelo, City Manager

BACKGROUND
Recognizing the deterioration of the City's assets, the City Council set in motion a series of studies, working committees, and reports to categorize assets, provide cost estimates for replacement/repair, and develop funding strategies for the replacement/repair of assets/infrastructure. Combined, there is an estimated $155 million in Capital Improvement Plan (CIP) projects identified over the next 30-years in the following categories: Streets, Storm-drain, Water, Wastewater, and Civic facilities.

Similar to infrastructure, there has been underfunding over several years as it relates to City staffing which has resulted in reduced staffing and compensation being below market. The reduced level of staffing has resulted in delays in responding to customer calls/service requests, the inability of staff to complete projects in a timely fashion, high employee turnover, and low staff morale. While monetary compensation is a factor, another challenge includes right-sizing the organization to provide excellent customer service and having the appropriately skilled staff in place to accomplish the City Council directed goals and accumulated workplan. The pent-up work plan includes staffing to oversee the many infrastructure projects noted above. As a first step in addressing compensation deficiencies, City Council recently approved three year agreements with SHEA, POA, and the unrepresented executive and management employees affording for salary increases to get employees to 95% of market median. Executive staff had believed the this benchmark which included a guaranteed increase of 5% in FY 2022 plus an equity Agenda Item #12.1.

adjustment for classifications that were below the target, would be sufficient to achieve competitive parity with other agencies. Unfortunately, other agencies, responding to surging inflation, have given even higher increases, thus effectively negating the impact of the City's base salary increases. Without sufficient numbers of staff who receive competitive compensation, there will continue to be staff turnover, lack of progress on projects, and other service impacts. So, while the base salary increases were a great first step, further compensation enhancement, as well as increases in the number of employees, will need to be part of the long-term strategy to retain staff, recruit qualified employees, and ensure staffing stability. Therefore, additional investment is needed to address both infrastructure and staffing deficiencies.

On May 31, 2022, the City's Long-Range Financial Forecast (LRFF) was presented to the City Council. The LRFF provides current and long-range financial assessment of General Fund revenues, expenditures, fund balance, and emergency reserves. The objective is provide early financial assessment, identify any significant issues to be addressed, is updated annually, and illustrates trends over the next 10 years based on a series of assumptions.

As a follow-up/next step to the LRFF, staff committed to the development of a LongRange Financial Plan (LRFP). The LRFP is intended to manage the City's financial integrity, including through a recession, while maintaining the high level of services and providing funding towards critical infrastructure. It will assist in aligning financial capacity with long-term service objectives and will address key financial strategy areas including:
• Ensure adequate funding for designed services
• Manage ongoing operating expenditures
• Provide for pensions and other long-term obligations
• Provide for contingencies
• Provide for capital improvements
• Maintain sufficient cash flow
Long-Range Financial Plan considerations include:
• Staffing and employment costs
• Efficiencies achieved by shared services agreements
• Potential public/private partnerships
• Revenue increases
To that end, on October 25, 2022, City Council authorized a Professional Services Agreement (PSA) with Baker Tilly to: (1) provide an independent review of the existing LRFF; (2) make recommendations to expand the existing LRFF to encompass the City's long-range capital investment needs and address future operational needs; and (3) identify budget strategies, such as revenue enhancements and cost efficiency options, that will support the City's fiscal sustainability efforts to ensure that its operational and long-term capital infrastructure investment needs are funded.

Agenda Item #12.1.

DISCUSSION
Since October 2022, Baker Tilly has completed the following:

1. Reviewed the current Long Range Financial Forecast (LRFF) and made recommendations to expand the existing forecast to encompass the City's longrange capital investment needs and current and future operations needs; and

2. Identified budget shortfalls in response to compensation, staffing needs, and capital improvement projects; and

3. Identified strategies that could be employed to ensure the long-term solvency of the City.

Each of these items are briefly summarized below and are addressed in greater detail in the attached report (Attachment 1).

Independent review of the existing LRFF
Baker Tilly reviewed the City's current General Fund LRFF to determine the basis and magnitude of the decisions to address any long-range gaps.

Working with City staff, Baker Tilly updated the forecast based on current trends, updated FY 2022 estimates, FY 2023 projections, and updated budget figures. Baker Tilly then reviewed the assumptions used in the original forecast and revised them based on current trends using historical City results and economic trends in the United States, California, and in the Napa Region. The key assumptions used in the original baseline forecast and the revised assumptions used to update the model are summarized in Attachment 1,

Using the revised assumptions, the baseline forecast indicates an annual deficit from FY 2023 to FY 2028 that would reduce General Fund reserves by $5.1 million without corrective action. Starting in FY 2029, it is estimated the General Fund would experience annual surpluses that could grow to $1.7 million per year due to the inclusion of the Farmstead property revenues and reductions in the CalPERS unfunded actuarial liability due to transition of employees established through the Public Employees' Pension Reform Act of 2012 (PEPRA) and the paydown of the unfunded liability through Additional Discretionary Payments (ADPs) through 2035 (Attachment 1, Page 8, Figure 2).

With the baseline forecast updated, Baker Tilly reviewed the City's identified unfunded or underfunded needs and capacity to meet the service delivery expectations of the community. These primarily include: deferred capital improvement projects, compensation adjustments to remain competitive in the marketplace, and appropriate staffing levels to meet the community's desired service levels and City Council's established priorities.

The total of unfunded/underfunded needs, including compensation adjustments, ideal staffing, and infrastructure in Year 1 is $5.3 million for the General Fund with a total deficit of $6.5 million (Table 1). If those needs were addressed starting in FY 2024, the impact on the General Fund is profound, increasing the City's annual deficit to $5.8 million in FY 2024 with the annual deficit reducing to $4.4 million per year by FY 2032 (Attachment 1,

Agenda Item #12.1.

action, the city's reserves would be depleted below the City's minimum reserve level in FY 2024, and would be fully depleted by FY 2023. This deficit demonstrates the need for budget strategies to address the City's long-range operational and capital needs.

Table 1: Estimated Annual Budget Shortfall (Year 1)
Category Estimated Annual Shortfall
General Fund
CIP - Streets* $1,787,000
CIP - Stormwater $ 324,000
CIP - Civic** $ 413,000
Staffing*** $2,776,000
General Fund Estimated Shortfall $5,300,000
Other Funds
CIP - Water**** $ 25,000
CIP - Wastewater**** $ 11,100
Staffing*** $1,154,000
Other Funds Estimated Shortfall $1,190,100
Total Estimated Annual Shortfall $6,487,751
* Costs to increase CPI to 80% based on 2021 study
** Includes annual maintenance and larger CIP projects, excludes: 1572 Railroad, Scout Hall, New City Hall *** Ideal staffing at market
**** Assumes adoption of new water and wastewater utility rates The estimated annual shortfall represents 20% of the current budget for all funds, excluding CIP.

Identify Budget Strategies to Address Deficits
Based on the updated Long Range Financial Forecast, Baker Tilly conducted an independent analysis of the City's revenues and costs of service delivery relative to the General Fund to develop options, or strategies, for addressing the challenge. The strategies were developed along a continuum and are broken down into four categories:

1. Expenditure Controls and Cost Shifts - Reducing expenses or shifting the cost burden away from the General Fund.

2. Service Delivery Changes - Changing the way that services are delivered, either through contracting for services, insourcing services from other agencies, or through public-private partnerships.

3. Revenue Enhancements - Increasing the resources available to pay for services through new or increased revenues.

4. Service Level Reductions - Service level reductions that must be implemented to the extent that the items above are not able to be implemented or do not sufficiently address the fiscal gap.

The strategies were developed based on a combination of factors, including Baker Tilly's experience and approaches used by other cities through California and in other parts of Agenda Item #12.1.

the country as they consider options to address structural deficits. Baker Tilly also identified ideas through conversations with the City's leadership team and department directors. Several dozen potential strategies were identified and Baker Tilly conducted a high-level analysis of those strategies that were determined to have a moderate to high fiscal impact (greater than $350,000) as shown in Attachment 1, Pages 12-16, Tables 4, 5, and 6.

Based on the foregoing, Baker Tilly has prepared four scenarios for Council's consideration that address the identified fiscal gaps. Each of these scenarios would allow the General Fund to maintain an appropriate level of reserves, eliminate identified structural gaps (deficits), address capital improvement needs, and ensure the viability of the City's operations throughout the period included in the fiscal model.

The scenarios described in the report do not include any service level or expenditure reductions. St. Helena elected officials and appointed leadership have indicated a desire to not only maintain service levels, but to enhance the level of service provided by the City. Suggesting service level reductions would run counter to that desire. Rather, the scenarios described are designed to either maintain or enhance service delivery, especially as it relates to unfunded/underfunded capital needs. Attachment 1, Pages 18- 21, Table 7 and Figures 4 through 7.

These budget scenarios are provided as examples of the types of strategies that the Council could consider to address the long-term fiscal gap. The Council could choose any of these scenarios or develop alternative scenarios that include varying types of strategies to resolve the fiscal gap.

Recommended Action
Council Discussion and Direction Related to the Presentation by Baker Tilly on Long Range Financial Plan Options.

FISCAL IMPACT
There is no fiscal impact for the receipt of this report.

Depending on Council feedback and direction, the City may engage Baker Tilly in an additional optional activity that will prepare detailed analysis on Council selected budget strategies. If it is determined the additional activity is desired, a contract amendment and budget adjustment will be brought to City Council for approval.

ATTACHMENTS
Baker Tilly Long Range Financial Plan SH Memo 022423
Agenda Item #12.1.

BAKER TILLY • 1730 MADISON ROAD • CINCINNATI, OH 45206 • 513 861 5400 • FAX 513 861 3480 • BAKERTILLLY.COM To: Anil Comelo, City Manager
April Mitts, Assistant City Manager
Mandy Kellogg, Administrative Services Director
City of St. Helena
From: Steve Toler, Director
Sam Lieberman, Senior Manager
Steve Mermell, Special Advisor
Jessica Oliphant, Consultant
Subject: Long Range Financial Forecast Budget Strategies Date: February 21, 2023
Contents
Executive Summary............................................................................................................................2 Long-Range Financial Forecast............................................................................................................4 Original Baseline Forecast................................................................................................................... 4 Key Assumptions Used in Developing the Original and Updated Forecasts....................................... 4 Updated Baseline Forecast ................................................................................................................. 7 Providing Capacity by Addressing Impacts from Unfunded/Underfunded Needs..................................9 Budget Strategies.............................................................................................................................11 A. Expenditure Controls and Cost Shifts ...........................................................................................12 B. Service Delivery Changes..............................................................................................................12 C. Revenue Enhancements................................................................................................................12 D. Service Level Reductions...............................................................................................................15 Budget Scenario Packages................................................................................................................17 Scenario 1 – Business license tax with additional capacity in future years......................................19 Scenario 2 – Providing capacity: business license tax; local transactions and use (sales) tax..........19 Scenario 3 – Providing capacity: business license tax; Charter City; real property transfer tax; sell surplus property................................................................................................................................20 Scenario 4 – Providing capacity: TOT rate increase; local sales tax; library parcel tax; sell surplus property ............................................................................................................................................21 Concluding Remarks.........................................................................................................................22 Attachment A – List of Additional Budget Strategies .........................................................................23 Attachment B – Presentation Slides on Propositions 218 and 26........................................................25 Agenda Item #12.1.

Long Range Financial Forecast Budget Strategies Page 2
Executive Summary
Baker Tilly has been working with the City of St. Helena during the past several months to identify potential budget strategies to address the anticipated structural deficit in the City’s General Fund and identify sources of funding for much needed reinvestment in capital projects. This report details actions City leaders can take to ensure that reserves stay at or near the reserve goal of 30% of annual operating expenditures. It provides a variety of strategies that could be employed to ensure the long-term solvency of the City.

The City’s current baseline General Fund Financial Forecast, presented on May 31, 2022, projects that through Fiscal Year (FY) 2032, the General Fund will have sufficient resources to meet operating expenses and maintain an ending fund balance in excess of the adopted policy reserve. However, the City’s more realistic scenario, presented as Scenario 3, showed a stark contrast which included modest investment in civic and streets infrastructure. After carefully analyzing these projections, several factors indicate that the more likely scenario is that the General Fund will face increasing financial stress, more so than indicated in Scenario 3.

The current baseline model projects that over the next four fiscal years, the General Fund will suffer an annual loss in net income. Beginning in FY 2027 the projections in the current model improve. However, this is based on the following assumptions: General Fund revenues will grow at a rate of 5% annually, General Fund expenses grow at a rate of only 4% overall, the Farmstead Hotel Development begins generating revenue for the City in FY 2027, and no additional investment in civic and streets infrastructure. Given what is known about upward pressure on personnel and other operating costs, the 4% projected growth rate is not realistic. Moreover, the current model did not anticipate any sort of economic downturn or recession.

Baker Tilly collaborated with City staff to revise the assumptions on which the current model is based.

The revised forecast indicates an annual deficit from FY 2023 to FY 2028 that would deplete General Fund reserves without corrective action. Starting in FY 2029, the General Fund would experience annual surpluses however, as stated above the surplus is on the baseline only and does not include staffing needs and infrastructure – discussed below.

In addition, over the past few years, numerous capital improvement and infrastructure needs have been identified totaling into the tens of millions of dollars for which General Fund support will be needed. In the past, these additional expenses were not incorporated into the forecast because of the magnitude of the costs on an already burdened General Fund operation.

Furthermore, City leaders have identified the need to increase staffing levels to support service delivery and, due to a number of factors including location and high cost of living, the City has become less attractive as an employer and therefore needs to ensure compensation is competitive to attract and retain staff. The total costs to improve capital infrastructure, increase staffing, and ensure compensation is competitive are estimated at nearly $5.3 million per year.

To address the fiscal gap and support efforts to improve capital infrastructure, Baker Tilly has identified 15 budget strategies that would have an ongoing fiscal impact on the General Fund of $300,000 or Agenda Item #12.1.

Long Range Financial Forecast Budget Strategies Page 3
more. These strategies are presented in four budget scenario packages for Council’s consideration. The first scenario would strive to maintain existing service levels while addressing the need to make employee compensation and benefits more competitive in today’s marketplace. The other three scenarios would build on the competitive compensation adjustments and allow City leaders to address capital needs and provide additional staffing capacity to meet service delivery expectations of the community. The four scenarios are shown in Table 1 with additional detail provided throughout the remainder of this memo.

Table 1. Potential Budget Strategy Scenarios
Scenario Budget Strategies
Ongoing
Financial
Impact
One-time
Financial
Impact Service Level Impact
1 • Implement a gross receiptsbased business license tax at

0.8%.
$2.5 million N/A • Maintains current service levels
while providing additional capacity
in future years
2 • Implement a gross receiptsbased business license tax at 1%. • Increase the local transactions
and use (sales) tax by 0.5%.
$5.5 million N/A • Maintains current service levels
while providing additional capacity
in future years
• Provides capacity to address
unfunded/underfunded needs
3 • Implement a gross receiptsbased business license tax model at 1%.
• Implement a real property
transfer tax of 1.5% and create a
City Charter.
• Sell surplus property.
$4.7 million $8 million • Maintains current service levels while providing additional capacity
in future years
• Provides capacity to address
unfunded/underfunded needs
4 • Increase the transient occupancy
tax by 1%.
• Increase the local transactions
and use (sales) tax by 0.5%.
• Implement a library parcel tax of
$313.
• Sell surplus property.
$4 million $8 million • Maintains current service levels while providing additional capacity
in future years
• Provides capacity to address
unfunded/underfunded needs
Agenda Item #12.1.

Long Range Financial Forecast Budget Strategies Page 4
Long-Range Financial Forecast
Baker Tilly reviewed the City’s existing long-range General Fund Financial Forecast to determine the basis and magnitude of the decisions to address any long-range gaps.

Original Baseline Forecast
The original baseline forecast provided by staff showed that General Fund operations were expected to largely break even over the 10-year period with modest (less than $200,000) deficits from FY 2023 to 2026, followed by years of surpluses that increased to $1.8 million by FY 2032, as depicted in Figure 1.

The forecast assumed that the Farmstead hotel property would be developed and start operations in FY 2027, which would generate an estimated additional $950,000 in transient occupancy (hotel) tax (TOT), property tax and sales tax in the first full year.

Figure 1. Original Long-Range General Fund Forecast – dated August 29, 2022 Key Assumptions Used in Developing the Original and Updated Forecasts Working with City staff, Baker Tilly updated the forecast based on current trends, updated FY 2022 unaudited financials, and FY 2023 projections and updated budget figures. We then reviewed the assumptions used in the original forecast and revised them based on current trends using historical City results and economic trends in the United States, California, and in the Napa Valley region. The key assumptions used in the original forecast and the revised assumptions used to update the model are summarized in Table 2 below.
-1,000,000
-500,000
0 500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
FY 18 FY 19 FY 20 FY 21 FY 22 FY 23 FY 24 FY 25 FY 26 FY 27 FY 28 FY 29 FY 30 FY 31 FY 32 St. Helena General Fund Annual Surplus (Deficit)
Agenda Item #12.1.

Long Range Financial Forecast Budget Strategies Page 5
Table 2. Key Assumptions Used in Developing the Original and Revised General Fund Forecast Category Original Forecast Revised Forecast Comments

RESERVES
General Fund
Balance at June 30,
2022
$10.42 million
based on
estimated FY 2022
results
$12.1 million based on
updated unaudited estimated
FY 2022 results
N/A
Reserve target Minimum target
reserve policy of
30% of annual
operating
expenditures
Same as Original Forecast City policy is 30% of annual operating expenditures plus transfers. GFOA
minimum is 17% (two months). We
concur with the City’s higher threshold
based on a higher mix of economically
volatile revenue sources on which the
City relies (e.g., sales tax, TOT).

REVENUES
Property tax 4% growth based
on FY 2023
projections

4.5% growth based on FY
2023 projections and
historical results
A higher property tax growth is consistent
with expectations in other communities
and continued strong real estate market
in Northern California, in spite of higher
interest rates, which are expected to
taper down in the coming years.

Sales tax 5% growth based
on FY 2023
projections
Same N/A
Transient
Occupancy Tax
(TOT)
5% growth based
on FY 2023
projections;
addition of
Farmstead hotel
development in FY
2027
Same City staff indicate that the new hotel
development is a realistic assumption to
include in the baseline forecast.

Other revenues
(e.g., franchise fees,
licenses and
permits, charges for
services, etc.)

7.1% growth
based on FY 2023
projections and
historical averages
4% growth based on FY 2023
projections
Baker Tilly believes that a lower
assumption is prudent because historical
averages included some one-time
increases that will not be sustainable year
over year in the future.

Recessionary
assumptions
None Moderate recession primarily
impacting sales tax, TOT,
charges for services and
development fees starting in
FY 2027 with a three-year
recovery period
It is prudent to incorporate recessionary
impacts in long-range forecasts. California
averages one moderate recession every
seven years, which has an overall impact
on City revenues of approximately 10%,
with a three-year recovery period.

Agenda Item #12.1.

Long Range Financial Forecast Budget Strategies Page 6
Category Original Forecast Revised Forecast Comments

EXPENDITURES
Staffing levels Existing levels
based on
approved
positions
Same N/A
Salaries and salarybased benefits5% placeholder
COLA increases
Same Given this inflationary market and
existing MOUs, a 5% placeholder is
prudent. Note that this category also
includes the CalPERS normal cost
assumptions based on the revised
discount rate assumptions of 6.8%
investment return.

Health insurance 5% growth based
on FY 2023
projections and
existing staff
benefit elections
Same A 5% assumption is reasonable based on
latest information from the CalPERS
Public Employees' Medical and Hospital
Care Act (PEMHCA) program.

CalPERS unfunded
actuarial liability
(UAL)
6% growth in FY
2025, and 3%
growth thereafter
based on FY 2023
UAL amount, with
annual
discretionary
payments (ADP)
totaling $450,000
per year through
FY 2035
Based on latest actuarial
analysis including the 6.1%
investment portfolio loss in FY
2022, and 6.8% long-term
investment returns, including
ADPs of $450,000 per year
through FY 2035
We used the CalPERS Pension Outlook
Tool on the CalPERS actuarial website to
run the analysis for UAL for future years.

Services and
supplies
5% growth based
on FY 2023 budget
5% growth in FY 2024 and
2025; 4% growth per year
thereafter
The inflationary pressures are expected
to ease by FY 2026 based on most
economist expectations, returning to a
normal inflationary index of
approximately 4% in the long-term.

Maintenance 1% growth based
on FY 2023 budget
5% growth in FY 2024 and
2025; 4% growth per year
thereafter
Due to increase in labor costs, we believe
that the long-term assumptions should
match those of the services and supplies
category.

Agenda Item #12.1.

Long Range Financial Forecast Budget Strategies Page 7
Category Original Forecast Revised Forecast Comments
Taxes, insurance,
and other
contributions
3% growth based
on FY 2023 budget
10% growth in FY 2024; 7%
growth in FY 2025, 6% growth
in FY 2026, 5% growth in FY
2027, and 4% growth in FY
2028 and thereafter
Insurance premiums are a large part of
this line item. Due to increases in
insurance premiums resulting from
wildfire losses and cybersecurity threats,
the assumptions are increased through FY
2027. Thereafter, increases are based on
long-term inflationary expectations
discussed above.

Debt service Projected based
on known debt
service costs; no
new debt
obligations
Same N/A
Capital outlay 2% growth based
on FY 2023
budget; only
includes capital
equipment
acquisition costs;
no additional
capital
improvement
project (CIP)
funding
5% growth in FY 2024 and
2025 based on FY 2023
budget; 4% growth thereafter
Inflationary growth expectations mirror
the services and supplies category.

Transfers to other
funds
Various transfers
based on ongoing
expectations
Same Ongoing transfers include transfers to
Flood Control Capital Reserve, Fourth of
July Fund, Streets CIP for maintenance of
effort for Measure T, Measure T Class 1
Trails, and retiree medical funding.

Updated Baseline Forecast
Using the revised assumptions provided in Table 2, Baker Tilly updated the City’s forecast. The baseline forecast indicates an annual deficit from FY 2023 to FY 2028 that would reduce General Fund reserves by $5.1 million without corrective action. Starting in FY 2029, however, the General Fund would experience annual surpluses that could grow to $1.7 million per year. This is due to the inclusion of the Farmstead property revenues (as was the case in the original forecast) and reductions in the CalPERS unfunded actuarial liability due to transition of employees to the reduced benefits established in the Public Employees’ Pension Reform Act of 2012 (PEPRA) and the paydown of the liability through ADPs through 2035. Figure 2 displays the projected impacts of the updated baseline forecast on reserves and the annual surplus (deficit) in each year. Reserves stay above the City’s 30% minimum reserve throughout the forecast period. It is important to note, however, that the updated baseline forecast presented in Figure 2 does not address unfunded/underfunded infrastructure and staffing which is discussed further in the next section of this memo.

Agenda Item #12.1.

Long Range Financial Forecast Budget Strategies Page 8
Figure 2. Updated Baseline General Fund Forecast
Agenda Item #12.1.

Long Range Financial Forecast Budget Strategies Page 9
Providing Capacity by Addressing Impacts from Unfunded/Underfunded Needs With the baseline forecast updated, Baker Tilly reviewed the City’s identified unfunded or underfunded needs and capacity to meet the service delivery expectations of the community. These needs are summarized in the three areas discussed below.

1. Compensation adjustments. The City is challenged with recruiting and retaining talent to fill necessary positions for basic service delivery. Initial estimates indicate that current compensation and benefits are well below market. Addressing this would require additional General Fund resources totaling $1.7 million per year if implemented in FY 2024, which would bring City positions to within 75% of the variance between existing compensation levels and the median based on the compensation survey.

2. Ideal staffing levels. City staff conducted an assessment of necessary positions to meet the community’s desired service levels and the City Council’s established priorities. These positions include a grants coordinator, code compliance staff, administrative assistants/analysts, one additional police officer, and maintenance workers. The cost of the eight new positions and the unfreezing of one position to address these staffing needs would be approximately $1 million per year to the General Fund.

3. Capital funding needs. The City has assessed its unmet capital funding needs in five areas:
streets, stormwater, civic facilities, water, and wastewater. Water and wastewater capital projects are funded by utility charges with the City Council having the authority to establish rates that cover both operational and capital costs. The other three capital areas could require General Fund sources. Based on the needs to address these three infrastructure areas, the City staff anticipates unfunded obligations totaling over $2.5 million per year through FY 2028, tapering down to over $2 million per year starting in FY 2029 and beyond. The unfunded capital and staffing needs are presented in Table 3 below.

Table 3. Summary of Underfunded Capital and Staffing Needs – Year 1 Category
Estimated
Annual Shortfall
Year 1
Streets CIP $1,787,000
Stormwater CIP $324,000
Civic CIP $413,000
Staffing $2,776,000
Total Shortfall –General Fund $5,300,000
Water CIP $25,000
Wastewater CIP $11,000
Staffing – Other Funds $1,154,000
Total Shortfall – All Funds $6,490,000
Agenda Item #12.1.

Long Range Financial Forecast Budget Strategies Page 10 As indicated in Table 3, the total General Fund unfunded/underfunded needs including compensation adjustments, ideal staffing, and infrastructure in Year 1 is $5.3 million. If those needs were addressed starting in FY 2024, the impact on the General Fund is profound, increasing the City’s annual deficit to $5.8 million in FY 2024 with the annual deficit reducing to $4.4 million per year by FY 2032. Without corrective action, the City’s reserves would be depleted below the City’s minimum reserve level in FY 2024, and would be fully depleted by FY 2025, as displayed in Figure 3. Clearly these are not sustainable options without corrective action and demonstrate the need for budget strategies to address the City’s long-range operational and capital needs.

Figure 3. Revised General Fund Forecast Including Additional Capacity and Addressing Unfunded/ Underfunded Needs
Agenda Item #12.1.

Long Range Financial Forecast Budget Strategies Page 11 Budget Strategies
To address the deficit noted in the previous section, Baker Tilly conducted an independent analysis of the City’s revenues and costs of service delivery relative to the General Fund to develop options, or strategies, for addressing the challenge. The strategies are provided herein. They were developed along a continuum that included:

A. Expenditure controls and cost shifts
Reducing expenses or shifting the cost burden away from the General Fund B. Service delivery changes
Changing the way that services are delivered, either through contracting for services, insourcing services from other agencies, or through public-private partnerships C. Revenue enhancements
Increasing the resources available to pay for services through new or increased revenues D. Service level reductions
Service level reductions that must be implemented to the extent that the items above are not able to be implemented or do not sufficiently address the fiscal gap Arraying ideas along such a continuum reflects the priority any organization would have for preserving service delivery to the maximum extent possible consistent with maintaining solvency.

The strategies were developed based on a combination of factors, including Baker Tilly’s experience about approaches used by other cities throughout California and in other parts of the country as they consider options to address structural deficits. Baker Tilly also identified ideas through conversations with the City’s leadership team and department directors. Several dozen potential strategies were identified.

Baker Tilly conducted a high-level analysis of those strategies that were determined to have a moderate to high fiscal impact (greater than $350,000) as shown in the sections below. A list of additional strategies that were contemplated but not analyzed because of unknown or minimal fiscal impact are shown in Attachment A.

Strategies within the continuum are presented in tables that show the identified budget strategy, a short description of the strategy, the estimated fiscal impact, and considerations the City leadership will have to take into account when determining implementation feasibility.

Agenda Item #12.1.

Long Range Financial Forecast Budget Strategies Page 12 A. Expenditure Controls and Cost Shifts
Table 4 details the expenditure control and cost shift strategy.

Table 4. Expenditure Control and Cost Shift Strategy
Budget
Strategy Description
Fiscal
Impact Implementation Considerations
Shift a portion
of health
insurance
costs to
employees
The City provides full medical coverage to employees
and their spouses. An option would be to share a
portion of the health care costs with employees
through either 1) percentage cost allocation to the
employee, or 2) limitation on coverage level
(employee only vs. full family) or a cap on amount the
City will cover. The estimate is based on 20% cost
sharing with employees.
$260,000 • Requires meet and confer
obligation with affected labor
groups.
• May erode competitive
compensation and benefits
compared to other local
government agencies to recruit
and retain qualified workers.
• Cost sharing is not uncommon
among other agencies and
private sector employers.

B. Service Delivery Changes
During the course of our work, we identified 12 potential budget strategies for consideration that would have allowed for service delivery changes while maintaining existing service levels. However, based on our initial analysis, it did not appear that most of the 12 potential budget strategies would have yielded a moderate or significant level of cost savings and other strategies such as how law enforcement and fire services were provided to the community have an unknown fiscal impact which would be determined depending on desired services levels. These items are listed in Attachment A.

C. Revenue Enhancements
Table 5 outlines the revenue enhancement strategies that were identified and analyzed.

Table 5. Revenue Enhancement Strategies
Budget Strategy Description
Fiscal
Impact Implementation Considerations
Allow
development of
new hotels to
increase
transient
occupancy tax
(TOT) revenue
St. Helena currently has one established hotel
and approval for one additional hotel
(Farmstead). The current TOT rate in St. Helena is
15% (12% TOT, 1% Affordable Housing, and 2%
Tourism Improvement District (TID)). Estimate of
increased revenues are for building an additional
hotel with 100 rooms at 80% occupancy and a
rate of $350 per night.
$1,300,000 • Developers may seek tax
incentives for building a new
hotel.

Agenda Item #12.1.

Long Range Financial Forecast Budget Strategies Page 13 Budget Strategy Description
Fiscal
Impact Implementation Considerations
Increase TOT
rate by 1%
St. Helena visitors staying in the local hotel pay
TOT based on a total rate of 15% (12% TOT, 1%
Affordable Housing, and 2% Tourism
Improvement District (TID)). An increase in the
TOT rate of 1% would yield additional revenues
totaling $450,000 based on current long-term
TOT projections.
$450,000 • A general purpose TOT increase
requires majority voter
approval at an election where
Council seats are on the ballot
unless a fiscal emergency is
declared whereby the measure
can proceed during a nonelection season.
• Pushback from local hotels
• TOT rate increases are
generally supported by voters.

Establish a Parks
Maintenance
District
Forming a Maintenance Assessment District
would enable the City to shift a portion of parks
maintenance costs to property owners and
provide a source of funding to enhance service
levels.
$300,000 to
$500,000
• Requires approval of property
owners to be assessed. May
take a year or more to
implement. City would still be
required to provide “general
benefit” financial contributions
Increase local
transactions and
use (sales) tax by

0.5%
The City currently levies a 0.5% local sales tax. For
every 0.5% increase to the local sales tax, St.

Helena would realize an additional $2.3 million in
revenue.
$2,300,000 • A general purpose sales tax
increase requires majority
voter approval at an election
where Council seats are on the
ballot unless a fiscal emergency
is declared whereby the
measure can proceed during a
non-election season. A specific
purpose sales tax increase
requires two-thirds voter
approval and may be taken to
voters at any time.
• City leadership will need to act
before other overlapping
jurisdictions add additional
local sales taxes that would
reach the cap of 2% of local
sales taxes in any one
jurisdiction. Otherwise, the City
might be required to seek
legislative relief to be allowed
to exceed the cap.

Agenda Item #12.1.

Long Range Financial Forecast Budget Strategies Page 14 Budget Strategy Description
Fiscal
Impact Implementation Considerations
Implement a
utility user tax
The Utility User Tax (UUT) may be imposed by a
city on the consumption of utility services,
including (but not limited to) electricity, gas,
water, sewer, telephone (including cell phone
and long distance), sanitation and cable
television. Approximately, 160 cities in California
have some form of UUT in place.
$450,000 to
$787,500
(Varies based
on rate and
affected
utilities. Range
is based on per
capita rates of
$100 to $175.)
• A general purpose UUT
requires majority voter
approval at an election where
Council seats are on the ballot
unless a fiscal emergency is
declared whereby the measure
can proceed during a nonelection season.

Implement a
Library parcel tax
The Library in St. Helena is currently funded by
the General Fund. A parcel tax could be put
before the voters to support Library operations
and remove the burden from the General Fund.

St. Helena has 3,836 parcels. General Fund
expenditures for the Library are just over $1.2M.

To generate that amount from a parcel tax would
require a $313 parcel tax.
$1,200,000 • A parcel tax would need to be
approved by two-thirds of
voters and may be taken to
voters at any time.

Review and
update business
license tax (BLT)
The City’s current BLT model is based on a “perunit” basis for various business categories (e.g., employees, rental units, etc) or a flat rate for
other business categories. Some cities use a gross
receipts model based on sales attributable to the
jurisdiction. Current annual revenues total
$101,000. Using a gross-receipts model, a tax rate
of 0.1% would yield approximately $320,000 in
additional net revenues to the City, which might
actually be higher when including non-sales
taxable business (e.g., professional services, food
products, etc.).
$3,200,000
based on 1%
tax rate (net of
annual
enforcement
costs)
• Modeling the tax to generate
the appropriate revenues and
to address equity and fairness
across business sizes and
sectors will be important.

Changes in the BLT model
require a majority vote where
Council seats are on the ballot
unless a fiscal emergency is
declared whereby the measure
can proceed during a nonelection season.
• City would need to consider
administrative support to assist
with public information and
education during the transition,
and enforcement, the latter of
which can be outsourced
through a tax consulting firm
that might cost $50,000 per
year for enforcement costs.

Agenda Item #12.1.

Long Range Financial Forecast Budget Strategies Page 15 Budget Strategy Description
Fiscal
Impact Implementation Considerations
Implement real
property transfer
tax
Charter cities have the authority to implement a
real property transfer tax at whatever rate the
local jurisdiction wants to implement, subject to
voter approval. Napa County Assessor’s Office
currently assesses the tax at a rate of 0.11%. The
City could implement this option only if it were to
change from a general law city to a charter city.

Based on current tax revenues received by the
City through the County, a 1% tax rate would
yield $1.5 million in additional annual revenues,
but those revenues will vary based on trends in
the housing market and property turnover.
$2,250,000
based on a

1.5% tax rate.

One-time costs
approaching
$500,000
might be
incurred to
draft a Charter
and
accompanying
ballot
measures for
voter
consideration.
• Requires an election and
majority vote to change from a
general law city to a Charter
city. This would be taken to
voters during a general election
where Council seats are also up
for election.
• Charter measure would be
accompanied by a real property
transfer tax measure, that is a
general law tax subject to
majority voter approval.

Sell surplus
property
The City has several parcels of land that are
vacant and could be sold for private
development. Staff estimates potential property
values of over $8 million.
$8,000,000 as a
one-time
revenue source
• Sale of surplus property must
fulfill the provisions required
under the Surplus Land Act.
• This is a one-time revenue
source that should only be
used to restore General Fund
reserves until which time
ongoing revenues sources are
found to address the gap.
• Future decisions could be made
to use the funds for one-time
needs.

As indicated in Table 5, most of the revenue enhancement strategies that would have a moderate or high level of fiscal impact require new or increased tax revenues. Every one of those items would be subject to the provisions of Proposition 218 and Proposition 26 that govern the requirements to impose, extend or increase a tax within a jurisdiction. Attachment B provides slides from a presentation that Baker Tilly has used in the past with cities to educate them about the requirements of Propositions 218 and 26. Baker Tilly encourages the City to learn more about the provisions of these regulations by consulting legal counsel as well as the information provided in the League of California Cities’ Propositions 26 and 218 Implementation Guide1
.

D. Service Level Reductions
Service level reduction options are detailed in Table 6. 1 The League of California Cities’ Propositions 26 and 218 Implementation Guide may be found on the League’s website at the following location: https://www.calcities.org/resource/propositions-26-and-218-implementation-guide Agenda Item #12.1.

Long Range Financial Forecast Budget Strategies Page 16 Table 6. Service Level Reduction Strategies
Budget Strategy Description Fiscal Impact Implementation Considerations Reduce normal
work hours
Reduce all non-public safety staff to 35
hours per week.
$550,000 to
$700,000 based on
how many positions
can truly be
reduced
• Will likely increase staff turnover
and difficulty in hiring.

Eliminate library
and repurpose
facilities
Closure of the library would reduce
General Fund expenses by approximately
5% and result in the elimination of 5.98
FTE. Closing the library would result in the
City forgoing revenues received from the
Friends of the Library and Library
Foundation, state grants and trust funds.

If this were implemented, the City would
need to determine how to repurpose the
library facilities for other uses, which
could include a permanent City Hall
location, lease, or considered surplus
property for sale/disposition.
$900,000 • The library is popular with
residents, and this would be a
politically difficult reduction. If
closed, people seeking library
services would need to visit one
of the other area libraries. The
City leaders would need to
determine what to do with the
facility.

General Fund
expenditure
reductions of
10% of annual
operating costs
This strategy would require a careful
analysis and prioritization of services to
determine where services may be cut. A
$1.8 million reduction in General Fund
expenditures based on FY 2024 projected
expenditures, if implemented through
staff reductions, would require a nearly
16% reduction in workforce. Such
reductions might include significant
reduction in police services requiring
additional mutual aid for Type 1 calls,
significant decreases to library hours,
reduced street and parks maintenance,
and reduced administration.
$1,800,000 based
on FY 2024
projected
expenditures
• Impacts of workforce reduction
would require notice to labor
groups and layoffs in accordance
with MOUs and personnel rules.
• Unemployment costs will increase
and would need to be factored
into the determination of fiscal
impact in earlier years based on
implementation date.

Agenda Item #12.1.

Long Range Financial Forecast Budget Strategies Page 17 Budget Scenario Packages
As indicated earlier, the baseline forecast, which excludes any of the items to provide additional capacity to enhance services and/or address unfunded/underfunded needs, would not require any new budget strategies, as long as the City Council were willing to waive its minimum target reserve threshold policy of 30% of annual expenditures during FY 2027 to FY 2030. Baker Tilly believes this would be a reasonable approach to maintain existing service levels.

However, infrastructure needs, additional staffing to address unfunded/underfunded needs, and staff vacancies and recruitment challenges will continue to threaten the City organization’s ability to deliver the existing services and meet the demand for expanded service unless addressed. As indicated earlier, these adjustments would impact the baseline forecast by increasing annual General Fund costs by $5.3 million per year, which will grow based on cost-of-living adjustments (COLAs) and benefit increases.

Based on the foregoing, Baker Tilly has prepared four scenarios for Council’s consideration that address the identified fiscal gaps. Each of the scenarios would allow the General Fund to maintain an appropriate level of reserves, eliminate identified structural gaps (deficits), and ensure the viability of the City’s operations throughout the period included in the fiscal model.

The scenarios described below do not include any service level or expenditure reductions. St. Helena elected officials and appointed leadership have indicated a desire to not only maintain service levels, but to enhance the level of service provided by the City. Suggesting service level reductions would run counter to that desire. Rather, the scenarios described below are designed to either maintain or enhance service delivery, especially as it relates to unfunded/underfunded capital needs.

These budget scenarios are provided as examples of the types of strategies that Council members could consider addressing the long-term fiscal gap. The Council could choose any of these scenarios or develop alternative scenarios that include varying types of strategies to resolve the fiscal gap. The scenarios included in this report employ different strategies and make assumptions with respect to the timing of implementing each strategy.

As a reminder, the updated baseline forecast projected annual deficits from FY 2024 to 2028, with reserves staying above the City’s minimum reserve target of 30%.

Table 7 summarizes the four scenarios provided for consideration as the Council determines the approaches it wants to take to address the indicated fiscal gaps.

Agenda Item #12.1.

Long Range Financial Forecast Budget Strategies Page 18 Table 7. Budget Scenarios to Address Fiscal Gaps
Scenario Description

ADDRESSING COMPETITIVE COMPENSATION ADJUSTMENTS ONLY
Scenario 1 – Business license tax with additional
capacity in future years
$2.5 million in annual additional resources
• Include funding for compensation adjustments ($1.7 million) in FY 2024. • Implement gross receipts-based business license tax model with a tax rate of 0.8% generating $2.5 million annually starting in FY 2025. • Provides additional annual capacity of over $2 million by FY 2031 to address other unfunded/underfunded needs.

PROVIDING CAPACITY IN ALL UNFUNDED/UNDERFUNDED NEED AREAS Scenario 2 – Providing capacity: business license
tax; local transactions and use (sales) tax
$5.5 million in annual additional resources
• Include funding for compensation adjustments ($1.7 million) in FY 2024. • Implement gross receipts-based business license tax model with a tax rate of 1.0% generating $3.2 million annually starting in FY 2025. • Increase local transactions and use (sales) tax rate from 0.5% to 1.0% generating $2.3 million annually in FY 2025.
• Include funding for all capital funding need requirements ($2.5 million) in FY 2025 upon passage of business license and local sales tax measures.
• Include funding for ideal staffing levels ($1 million) in FY 2026. • Provides additional annual capacity of approximately $2.8 million in FY 2031 to address other unfunded/underfunded needs.
• Waive City’s minimum reserve target policy of 30% for FY 2027 to 2029 and implement the GFOA recommended minimum 17% reserve policy during this period.

Scenario 3 – Providing capacity: business license
tax; Charter City; real property transfer tax; sell
surplus property
$4.7 million in annual additional resources
$8 million one-time additional resources
• Include funding for compensation adjustments ($1.7 million) in FY 2024. • Implement gross receipts-based business license tax model with a tax rate of 1.0% generating $3.2 million annually starting in FY 2025. • Include funding for all capital funding need requirements ($2.5 million) in FY 2025 upon passage of business license tax measure • Include funding for ideal staffing levels ($1 million) in FY 2025 upon passage of real property transfer tax.
• Implement real property transfer tax rate of 1.0% totaling $1.5 million in annual revenues, subject to creation of a City Charter, by FY 2026. • Sell surplus property totaling $8 million in FY 2027
• Provides additional annual capacity of approximately $2 million in FY 2031 to address other unfunded/underfunded needs.
• Waive City’s minimum reserve target policy of 30% for FY 2026 to 2029 • and implement the GFOA recommended minimum 17% reserve policy during this period.

Scenario 4 – Providing capacity: TOT rate
increase; local sales tax; library parcel tax; sell
surplus property
$4 million in annual additional resources
$8 million one-time additional resources
• Include funding for compensation adjustments ($1.7 million) in FY 2024. • Increase the TOT rate from 12% to 13% generating $450,000 annually in FY 2025.
• Increase local transactions and use (sales) tax rate from 0.5% to 1.0% generating $2.3 million annually in FY 2025.
• Implement library parcel tax of $313 per parcel generating $1.2 million in ongoing revenues by FY 2026.
• Include funding for ideal staffing levels ($1 million) in FY 2026. • Sell surplus property totaling $8 million by FY 2027. • Include funding for all capital funding needs ($2.5 million) in FY 2027.

Agenda Item #12.1.

Long Range Financial Forecast Budget Strategies Page 19 Figures 4 to 7 below present the before and after impacts on General Fund reserves and the annual surplus (deficit) if the strategies identified in Table 8 were implemented.

Scenario 1 – Business license tax with additional capacity in future years Figure 4. Scenario 1 – Before and After Graphs of Reserves and Annual Surplus (Deficit) Before
After
Scenario 2 – Providing capacity: business license tax; local transactions and use (sales) tax
Figure 5. Scenario 2 – Before and After Graphs of Reserves and Annual Surplus (Deficit) Before
Agenda Item #12.1.

Long Range Financial Forecast Budget Strategies Page 20 After
Scenario 3 – Providing capacity: business license tax; Charter City; real property transfer tax; sell surplus property
Figure 6. Scenario 3 – Before and After Graphs of Reserves and Annual Surplus (Deficit) Before
After
Agenda Item #12.1.

Long Range Financial Forecast Budget Strategies Page 21 Scenario 4 – Providing capacity: TOT rate increase; local sales tax; library parcel tax; sell surplus property
Figure 7. Scenario 4 – Before and After Graphs of Reserves and Annual Surplus (Deficit) Before
After
Agenda Item #12.1.

Long Range Financial Forecast Budget Strategies Page 22 Concluding Remarks
The City’s updated financial forecast indicates that there is fiscal capacity to provide services at existing levels. However, there are several unfunded or underfunded needs. The City organization is currently struggling to provide services and meeting the expectations of the community. The City is also having difficulty recruiting and retaining its employees due to compensation and benefits that are not considered competitive in the marketplace. This post-pandemic environment adds significant challenges to the City’s ability to recruit staff even if compensation was competitive. The cost of housing in the geographic region, coupled with long commutes, makes the City less attractive as an employer.

Competitive compensation is needed to attract and retain talent. The City leadership needs to address that issue as quickly as it can.

The magnitude of the costs associated with the City’s underfunded needs which total $5.3 million per year will not be affordable without additional financial resources – in other words, the City will need some form of revenue enhancement in order to continue providing the levels of service the community expects while also addressing deteriorating capital assets.

We look forward to discussing this matter with the City as the City Council and the leadership team work together with the community to address its operational and capital financing needs.

Agenda Item #12.1.

Long Range Financial Forecast Budget Strategies Page 23 Attachment A – List of Additional Budget Strategies
The following table shows additional budget strategies that were identified but that did not meet a moderate or high fiscal impact threshold. A low fiscal impact budget strategy would have an estimated $100,000 to $350,000 impact to the general fund while minimal fiscal impact strategies are less than $100,000.

Budget Strategy Fiscal Impact

EXPENDITURE CONTROLS AND COST SHIFTS
Review cost allocation methodology and update to ensure cost recovery Low Shift costs for roadway maintenance to solid waste provider Low Eliminate special pays Low
Eliminate City contribution to deferred compensation plan Minimal

SERVICE DELIVERY CHANGES
Contract Police Services TBD
Depending
on Desired
Service
Levels
Contract Fire Services
Contract Parks and Recreation services with another jurisdiction (e.g., NPOSD, Calistoga, Santa Rosa)
Low
Contract parks maintenance services Low
Consolidate code enforcement so that one officer can perform multiple inspections. Minimal Implement online permitting Minimal
Implement adopt-a-spot volunteers in Parks and Recreation Minimal Increase partnerships Minimal
Contract with County to Provide Library Minimal
Contract with another agency to provide water and wastewater services Minimal Share Chief Building Official duties with neighboring jurisdictions Minimal Contract fleet maintenance Minimal

SERVICE REDUCTIONS
Reduce library hours Low
Reduce tree maintenance Low
Reduce frequency and/or level of service for Parks and Recreation Low Rely on part time staff at the library Low
Reduce number of special events Minimal

REVENUE ENHANCEMENTS
Fully recover costs for fire inspections Low
Agenda Item #12.1.

Long Range Financial Forecast Budget Strategies Page 24 Budget Strategy Fiscal Impact
Start charging for vegetation inspections Low
Relax regulations on short term rentals to increase TOT Low Hire a hearing officer for parking citations to address appeals Low Increase solid waste franchise fees Low
Increase Parks and Recreation fees to achieve cost recovery Low Review and update master fee schedule to achieve cost recovery goals Low Implement street impact fee Low
Implement real property transfer tax Low
Implement results of development fee study Minimal
Establish a Business Improvement District Minimal
Implement a water and wastewater rate study Minimal
Implement a Friends of Parks and Recreations group Minimal Rent out library rooms Minimal
Agenda Item #12.1.

Long Range Financial Forecast Budget Strategies Page 25 Attachment B – Presentation Slides on Propositions 218 and 26 The following slides are excerpts from presentations provided by Baker Tilly to other California cities describing the provisions of Propositions 218 and 26 and the impact on the ability of cities to impose, extend or increase taxes in their communities. More guidance can be found in the League of California Cities’ Propositions 26 and 218 Implementation Guide on the League’s website. 3 Specific benefit • zoning permits, parking permits
Government service or product • recrea�on classes, u�li�es Permits and inspec�ons • building permits, police background checks Local government property • facility rentals, park rentals Penalty for illegal ac�vity • parking fines, code enforcement fees Property development • planning fees, grading permits, development impact fees Proposi�on 218 excep�ons • fees imposed on a property owner, fees for property related service Proposition 26 - Defining a Tax by What it is NOT
4 Imposed
• When a local
tax ordinance is
adopted
Extended
• A decision to
extend the
effec�ve period
for the tax
Increased
• Increase the
rate of the tax
• Revising the
methodology
by which the
tax is calculated
Proposition 218 – When is a Tax Imposed,
Increased or Extended
Agenda Item #12.1.

Long Range Financial Forecast Budget Strategies Page 26 5 General Tax Special Tax
Use of Revenues • Unrestricted • Specific purpose
Governing Body
Approval
• General law ci�es – 2/3 of
Councilmembers
• Transac�ons and use tax– 2/3 of
Councilmembers
• Majority of Councilmembers
Voter Approval • Majority of voters vo�ng on the
measure
• 2/3 of the voters vo�ng on the measure
Other Rules • Must be consolidated with a
regularly scheduled general elec�on
of member of the governing body,
unless a fiscal emergency is declared
by unanimous vote
• Must be deposited into a separate fund
• Must publish an annual report including
• Tax rate
• Amounts collected and expended
• Status of projects funded by the tax
Taxes Require Voter Approval
Source: The California Municipal Revenue Sources Handbook (5 th Edition), Michael Coleman Agenda Item #12.1.