RESPONSES TO COUNCIL QUESTIONS FROM THE FY 2022/23 BUDGET WORKSHOP
1. Council Question: What is the underemployment rate in Sunnyvale? Staff Response: Underemployment is not a formal metric tracked by the Department of Labor at the national level or by the Employment Development Department at the state, county, or municipal level. The U.S. Bureau of Labor Statistics informally describes it as the difference between two formal measures of "employment underutilization," but this is only available at the national and state level.
Fo
r the most recent data available (a rolling 4-quarter average from 2021Q2 through 2022Q1), this underemployment metric was 4.0% for California, which was second highest only to Nevada. [BLS:
https://www.bls.gov/lau/stalt.htm] (The difference between Columns U-6 and U-5)
2. Council Question: How is access to the internet at home addressed to support remote work in the community?
Staff Response: The Federal Workforce Innovation and Opportunity Act has restricted "work supports" or "support services." However, NOVA is piloting a "Whole Person" program with San Mateo County ARPA funding ($400,000) that would provide assistance to help with almost all other potential barriers to employment, including internet access, clothing, housing, and transportation.
Additionally, Santa Clara County is in discussion to implement a similar pilot through NOVA (also using ARPA funds) this year, which would add $250,000 in funding for this program.
3. Council Question: Does it still make sense to treat golf and tennis operations as a separate enterprise fund?
Staff Response: Yes. Isolating golf and tennis operations provides transparency into how these services are performing financially. However, treating these services as an enterprise fund is not required by the Governmental Accounting Standards Board (GASB) and other cities often incorporate these services into the general fund.
4. Council Question: Provide last year vs. this year pension projections for comparison.
Staff Response: Please see Exhibit A, “Pension Projections Comparison”.
5. Council Question: What are the projected utility rate increases? Staff Response: The proposed increases for FY 2022/23 are 3% for water, 3% for wastewater, and 5% for the solid waste utilities. Please note that there were cost of service studies completed this year for both the water and solid waste utilities, so individual rates will increase/decrease as a result of the study. Cost of service studies recalibrate the rates to reflect current costs of providing the service to each customer class.
6. Council Question: How many telecom companies remit Utility Users Tax? Staff Response: Currently, there are 80 telecom entities that remit Utility Users Tax to the City of Sunnyvale.
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7. Co
uncil Question: How long do property tax appeals typically take to process? Staff Response: The typical timeline for the appeals process depends on the property type being appealed and the issues involved. Most appeals on single family residences tend to be resolved in about 12-18 months. Commercial Real Property appeals often take significantly longer and are usually resolved within about 4 years.
8. Counc
il Question: Identify the amount unfunded for Cleanwater Phase II for the Adopted Budget.
Staff Response: Total costs to build the Cleanwater Center are $56,053,000. This number is comprised of soft costs for re-start up of design, readying of construction package for bidding, and architectural services during construction ($2,810,000); construction costs plus construction change order contingency and temp facilities for the WPCP staff ($53,243,000). Note that in order to take full advantage of WIFIA low interest loan funding, re-startup of design would need to occur Spring 2023, therefore, funding for design is shown in FY2022/23 and construction starting in FY 2024/25.
9. Co
uncil Question: Are additional resources needed for low-income utility customers? Please provide an update on the State funded assistance program and usage.
Staff Response: Sunnyvale has multiple resources available to customers who need assistance with their utility bill. The City has partnered with Sunnyvale Community Services to provide support for our utility customers since 2011. Typically, the program allows a customer to apply for assistance with one bill per year, and that bill would typically be fully paid through Sunnyvale Community Services (SCS). We worked with SCS to expand that program to offer a COVID-19 Utility Bill Assistance Program. SCS helps to screen customers who have fallen behind on their bills during the pandemic. Customers can be eligible to have up to 100% of their balance removed from their account, which will ultimately be written off once any other support program payments have been applied. The City as well as Sunnyvale Community Services provide direct noticing to eligible customers regarding available assistance.
Staff has also applied for support from the State Water Resources Control Board’s Water and Wastewater Arrearage Programs. Sunnyvale has been approved for reimbursement of 100% of the requested balances, which covered delinquent water and wastewater charges billed from the start of the pandemic in March 2020 through June 15, 2021. Water arrearage funds of $324,563 have been received and credits have been applied to 592 eligible customer utility accounts. We have been approved to receive $101,836 in wastewater arrearage funds for 173 eligible customer utility accounts.
The City has recently enrolled in the State’s Low Income Household Water Assistance Program (LIHWAP).
Customers can apply to the State for assistance with their utility bill, and if approved, the State will make a direct payment to the City to apply to the customer’s utility account.
Lastly, staff works with customers on a regular basis to enter payment arrangements if a customer is having difficulty making their payment by the due date. No fees or interest are charged to customers who enter into a payment plan unless they default on the payment arrangement.
10. Council Question: How well does Valley Water district project long term water rates? Staff Response: Staff went back ten years to review projections for e ach budget year. The table below shows the projections for each of the ten budget years to the current year. For example, the 2014 budget year shows what Valley Water projected for 2015 and the 2015 budget year then shows
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the actual rate for 2015 as well as updated projections for the future years. The chart can be read in this same way all the way through to the current budget year.
Projected Wholesale Water Costs per Acre Foot for the Previous Ten Budget Years
11. Council Question: Please explain the change in how SMaRT Station Funds flow and are presented under the new MOU and contract.
Staff Response: The change relates to how the SMaRT Station revenues are recorded. The SMaRT Station operators share of the revenues were not previously included in the financial plan. Prior to FY 2022/23, the revenues listed in the financial plan current resources referred only to the share of revenues kept by the partner cities. In the new financial plan, the revenues reflect 100% of the revenues brought into the SMaRT Station (including both partners as well as the operator share).
Under current requirements, there is a new line item called “Operator Share of Revenue” that removes the operator share, with the remaining revenues to be allocated to the two partner cities.
12. Council Question: What are the assumptions for annual change in medical costs? Staff Response: Medical costs are based on estimated enrollment using historical coverage selection and turnover data. FY22/23 compared to FY21/22 increased 2.6%, then increases at 5% annually for the remainder of the twenty-year plan. The five-year medical premium average increase is 4.4%, so 5% is used as the long-term assumption.
13. Council Question: What are the assumptions for annual change in total compensation? Staff Response: The average change in the cost for total compensation is 3% annually across the first ten years of the 20-yr financial plan. However, staff changed the costing methodology to better reflect actual experience regarding actual productive hours worked from the current year budget.
Excluding this change, the pure total comp costs rise by 5% in the first year.
14. Council Question: Update the Green Prime costs in budget supplement No. 2.
Budget Year 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2014 680 $ 744$ 814$ 890$ 974$ 1,066$ 1,162$ 1,222$ 1,282$ 1,344$ 2015 747$ 820$ 901$ 990$ 1,087$ 1,193$ 1,293$ 1,368$ 1,445$ 2016 894$ 1,008$ 1,131$ 1,251$ 1,330$ 1,404$ 1,522$ 1,600$ 2017 1,072$ 1,263$ 1,442$ 1,646$ 1,821$ 1,988$ 2,120$ 2018 1,178$ 1,306$ 1,449$ 1,607$ 1,782$ 1,976$ 2019 1,291$ 1,417$ 1,554$ 1,705$ 1,870$ 2020 1,374$ 1,465$ 1,562$ 1,665$
2021 1,492$ 1,620$ 1,760$
2022 1,506$ 1,650$
2023 1,724$
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Staff Response: It is estimated that the cost to upgrade to Green Prime would be approximately $94,000 annually and about $2.4 million over twenty years. However, with the new City Hall being a net zero building, staff will need to revisit this question upon opening of the new civic center and provide a revised cost during the next budget cycle.
15. Council Question: Can the golf irrigation improvements be constructed to accept recycled water in the future?
Staff Response: Yes, the portions of the courses where the vegetation will accept recycled water can be designed for recycled water. However, certain areas of the courses such as the greens, may not take well to the salt content in recycled water, and may need to be designed for domestic water only.
16. Council Question: Add population to the Sales Tax per Capita Chart.
Staff Response: In future presentations of this graphic, staff will include total population for each City.
17. Council Question: Can a trust be established for insurance costs along the lines of Pension or Retiree Medical Trusts?
Staff Response: A tax exempt trust is used to pre-fund future known liabilities that are earned now but paid later. For example, with pensions, the City is pre-funding future payments for benefits being earned now. For ongoing insurance costs, there is no liability being accrued, however the Recommended Budget does already include (and has for many years) an Insurance Rate Uncertainty Reserve (pg. 187), which is used to absorb large swings in insurance costs.
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1City of Sunnyvale – FY 2022/23 Budget Workshop, May 19, 2022 FY 2022/23 vs. 2021/22 Pension Projections Comparison
28.7 38.4
32.4 20.8
28.6 40.7
29.7 12.5
$0
$5
$10
$15
$20
$25
$30
$35
$40
$45
Miscellaneous Plan
6/30/20 Projection: Misc.
6/30/19 Projectoin: Misc.
27.5 42.0
33.6 26.8
39.9 24.2
$0
$5
$10
$15
$20
$25
$30
$35
$40
$45
Safety Plan
6/30/20 Projection: Safety
6/30/19 Projection: Safety
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Exhibit A