HomeMy WebLinkAbout7.2 - 1833 Fiscal Susatinability Task Force Report
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STAFF REPORT
CITY COUNCIL
DATE: February 20, 2018
TO: Honorable Mayor and City Councilmembers
FROM:
Christopher L. Foss, City Manager
SUBJECT:
Report from Fiscal Sustainability Task Force
Prepared by: Jay Baksa, Financial Analyst
EXECUTIVE SUMMARY:
The City Council will receive a report from the Fiscal Sustainability Task Force.
STAFF RECOMMENDATION:
Receive the report.
FINANCIAL IMPACT:
There is no fiscal impact associated with receiving the report. The recommendations
contained within the report include expenditure reductions, revenue increases and
policy statements aimed to provide potential solutions to the City’s structural deficit.
DESCRIPTION:
In March 2015, the City Council identified long-term fiscal sustainability as the City’s key
strategic initiative and directed Staff to ensure that fiscal sustainability becomes a major
factor in future decisions, including future budget proposals. In November 2016, the City
Council approved the formation of the City’s first Fiscal S ustainability Task Force with
the goals of:
a) Educating the public and fostering discussion on the City of Dublin's current
and projected financial status; and
b) Producing an advisory document with future budget options for the City
Council to consider.
The attached report is the product of the Task Force’s work over the last year in
evaluating the City’s financial position and formulating potential solutions to the
structural deficit. The report includes the following sections:
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Executive Summary – information on the formation of and purpose of the Fiscal
Sustainability Task Force.
Background – a discussion of the City’s financial health and assumptions used
in the 10-Year Forecast.
Task Force Meeting Summary – a description of the topics addressed at each
meeting.
Final Recommendations – a list of the recommendations and vote counts,
followed by a discussion of recommendation.
Appendix – handouts provided to the Task Force.
The final recommendations required a majority vote of Task Force Members, excluding
alternates. The three alternates who participated throughout the process voted with the
majority of the Task Force members or abstained, except for one “No” vote on the half -
percent sales tax measure proposal. Once each recommendation was voted upon, the
final overall package was put to a vote. The members voted 6-1 and the alternates
voted 3-0 in support of the full package.
The following table (also included in the report) is a summary of all actions taken:
Recommendation
Estimated Annual
Fiscal Impact
Member
Vote Tally
EXPENDITURE-RELATED PROPOSALS
E-1
(a)
Policy Statement: The CIP planning
process should include a specific
discussion of the future General Fund
obligations due to on-going operational
costs of the CIP. Future CIP budget books
will include an operational impact statement
for all projects. Should a CIP project scope
be revised, or should a new CIP be created
at a time other than the Budget, Adoption,
the Staff Report will include the operating
impact statement.
None –
Policy Statement
Pass: 6-1
E-1
(b)
Policy Statement: As a general policy the
General Fund should only be used to fund
renovation CIPs, not new CIPs. Should it
be determined that the General Fund will
be used to fund in whole or part a new CIP,
a statement of justification must be included
in the project description, indicating why it
is necessary to use the General Fund.
None –
Policy Statement
Pass: 6-1
E-2 Policy Statement: When considering multi-
year maintenance contracts the City must
complete the full Request for
Proposal/Qualification process, including
where applicable comparing like services
with the other Tri-Valley cities. In addition,
contracts should include a review of the
None –
Policy Statement
Pass: 7-0
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performance of the existing service
provider.
E-4 Reduce the General Fund operating
budget, exclusive of Public Safety, by, at
least, $600,000 by (the first year of the
deficit according to the prior 10-Year
Forecast).
Savings –
$600,000
Pass: 7-0
REVENUE-RELATED PROPOSALS
R-1 Do not subsidize the Business License Fee.
Continue fee proration throughout the year.
Revenue Increase –
$91,000
Pass: 7-0
R-2 Parks and Community Services, excluding
the Library, should reach at least a 65%
cost recovery rate department wide, within
five years.
Revenue Increase –
$1,500,000
Pass: 7-0
R-3 Increase non-resident rates to levels
comparable to neighboring cities.
Revenue Increase –
$25,000 - $125,000
Pass: 7-0
R-4
(a)
Evaluate potential efficiencies at The Wave,
once full costs and adjustments are
understood. If after several years, the City
subsidy continues to be $1 million or more,
the Task Force recommends looking into
alternative management and operational
models including outsourcing.
Unknown
Pass: 4-2-1
R-4
(b)
Consider revising/updating City’s current
User Fee Policy
Unknown
Pass: 7-0
R-5 Increase Economic Development resources
to implement activities as detailed in the
Economic Development Strategy.
Potential Revenue
Increase
Pass: 7-0
R-6
(a)
Bring Half-Percent Sales Tax Measure to
Dublin Voters.
Revenue Increase –
$6,200,000
Pass: 5-2
R-6
(b)
Policy Statement: If a Sales Tax measure
goes forward to the voters the ballot
language should include the potential cuts
that the City would have to make if the
Sales Tax measure fails, and the impact of
those cuts.
None –
Policy Statement
Pass: 6-1
NET BENEFIT SOLUTIONS
N-1 Continue to strategically use the Downtown
Public Improvement Reserve to promote
and improve downtown businesses, as
exemplified by work that has been
undertaken on Village Parkway. Consider
replenishing the reserve, as funds are
used, during Year-End when unassigned
fund balance is available.
Increase in costs, funded
from reserve. Potential
revenue increase due to
new businesses /
additional foot traffic.
Pass: 6-1
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PROCESS-RELATED PROPOSALS
P-1 Budget for additional sworn police officers
through buildout and include the officers in
the 10 year forecast.
Increased Cost –
$250,000 per new
position
Pass: 6-1
P-2 Explore the possibility of using non-sworn
volunteers in the Police Department.
Increased Cost - start-up
costs and on-going
operational costs.
Potential savings from
using volunteers in
support of Safety staff.
Pass: 5-2
P-3 Policy Statement: The City should only use
the reserve to balance the budget as a
matter of last resort.
None –
Policy Statement
Pass: 7-0
P-4
(a)
Policy Statement: The City should use one-
time money and reserves to invest in new
ways to reduce future costs and/or in
technologies that create efficiency.
None –
Policy Statement
Pass: 7-0
P-4
(b)
Policy Statement: The City shall, during the
course of the year, minimize budget
adjustments needing Council approval to
those issues that have been deemed
urgent. All other budget adjustments shall
be made as part of the City’s quarterly
financial report to the City Council. All
budget adjustment will include the long-
term impact of any approved budget
adjustments and once approved will be
incorporated in the City’s long-term
financial forecast.
None –
Policy Statement
Pass: 7-0
P-4
(c)
In the event that the Sales Tax measure
doesn’t pass and the City is in a deficit, the
City should explore staffing furloughs at a
projected savings of $40,000 per day.
Cost Savings –
$40,000 per day
Pass: 5-1-1
APPROVE TOTAL PACKAGE OF RECOMMENDATIONS
Pass: 6-1
NOTICING REQUIREMENTS/PUBLIC OUTREACH:
None.
ATTACHMENTS:
1. Fiscal Sustainability Task Force Report
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FISCAL SUSTAINABILITY TASK FORCE REPORT
FEBRUARY 2018
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CITY OVERVIEW
The City of Dublin, incorporated in 1982, is located in the East Bay of the San Francisco Bay Area
approximately 30 miles east of San Francisco and 30 miles northeast of Silicon Valley. Dublin is
one of five communities that comprise the Tri-Valley region. In 2011, the City was named an
“All-America City” by the National Civic League, one of the nation’s oldest and most prestigious
civic organizations. In 2017, the City celebrated its 35th anniversary as an incorporated city.
According to the California Department of Finance, the population in th e City of Dublin is
53,746, excluding group quarters, as of January 1, 2016. The City covers a land area of 14.62
square miles.
City of Dublin
100 Civic Plaza
Dublin, CA 94568
www.ci.dublin.ca.us
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TASK FORCE MEMBERS
Chih Chi Chu
Jean Josey
George Zika
Dan Mendoza
Jason Canapp
Mike Grant
Kristian Reyes
Mathew “Jim” Lopez – alternate
Ravi Banda – alternate
Joe Washington – alternate
CITY STAFF
Linda Smith, Assistant City Manager
Colleen Tribby, Director of Administrative Services
Hazel Wetherford, Assistant to the City Manager
Jay Baksa, Financial Analyst
FACILITATOR
Greg Larson, Management Partners
For more information on the Task Force’s work, please visit the City of Dublin’s Fiscal
Sustainability Task Force Website at:
http://dublinca.gov/1880/Fiscal-Sustainability-Task-Force
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ACKNOWLEDGMENTS
The Task Force wishes to thank the City Council for establishing fiscal sustainability as its top strategic
priority for the last two years. We also want to acknowledge the foresight by this City Council in
working so far in advance of the actual projected deficit through the creation of this Task Force. This
effort is extraordinary, and deserves recognition by municipalities across the state that will also be faced
budgetary challenges over the next several years.
Our work was faced with great discussion, debate, and oftentimes with dissention on matters under
consideration. We respect the views of the members of this Task Force and to that end; some may wish
to express how their personal opinions may differ from the recommendations. However, this report
was unanimously approved by the Task Force.
We want to thank City staff and our facilitator, Greg Larson, for his work, patience and participation.
This effort gave us all a greater appreciation of managing a large group of people with strong
personalities.
Lastly, we strongly believe that the City Council has a real opportunity to create a constructive dialogue
with the community about the long-term fiscal challenges, and prepare them over the next several years
that their levels of service will be impacted.
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EXECUTIVE SUMMARY
While the City of Dublin’s FY 2017-18 Adopted Budget reflects growth in the City’s major
revenue categories resulting in a budgeted surplus of $8.4 million, flattening sales tax revenue,
rising contracted service costs, and the anticipated decline in development revenue as the City
nears build out, are causes for concern. The City’s 10-Year General Fund Forecast projects
deficit spending of $1.5 million in the General Fund by FY 2022 -23, potentially growing to a
deficit of $4.3 million in FY 2024-25, as reflected in the most recent update provided to the City
Council.
In March 2015, the City Council identified long-term fiscal sustainability as the City’s key
strategic initiative and directed Staff to ensure that fiscal sustainability becomes a major factor
in future decisions, including future budget proposals. In November 2016, the City Council
approved the formation of the City’s first Fiscal Sustainability Task Force with the goals of:
a) Educating the public and fostering discussion on the City of Dublin's current and
projected financial status; and
b) Producing an advisory document with future budget options for the City Council to
consider.
This report is the product of the Task Force’s work over the last year in evaluating the City’s
financial position and formulating potential solutions to the structural deficit. Each of the
recommendations contained herein were approved by a majority vote of Task Force Members.
BACKGROUND – FINANCIAL OUTLOOK
Dublin’s short term financial picture reflects a healthy, growing community able to provide a
high level of services and fund large capital projects. Annual growth in the City’s primary
revenue sources of property tax, sales tax, and development revenue, which make up 46%,
24%, and 12% respectively, of total General Fund revenues budgeted in FY 2017 -18, have
allowed for budget surpluses the last few years. In addition, the City has been able to sustain
the rising costs of public safety and maintenance contracts, which make up the majority of
General Fund expenditures, and in the current year Police Services staffing was increased in
response to the community’s needs.
The City’s General Fund reserves are healthy, with $125.3 million in total reserves, $37.2 million
in unassigned cash flow reserves, and a variety of emergency and economic stability reserves.
The City’s pension and retiree health plans ar e well funded, at 73% and 102% respectively, and
the City sets aside annual budgets for additional contributions to long-term liabilities.
Dublin, like most of its neighbors, has rebounded from the recession and entered a rapid
recovery period. Following a 2% loss in overall assessed valuation (AV) during FY 2010-11, the
City has increased total AV from $8.4 billion in FY 2011 -12 to $13.7 billion in FY 2016-17, owing
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to real estate values that have been restored, higher sales prices, and new developments
coming on line. Large projects have also brought in high permit and development services
revenues, which cover City development costs and provide an overhead revenue source. In a
developing City, such continual building activity can sustain and supplement General Fund
operations for many years. In a developed City, operations are focused on maintenance and
ongoing operations, and large spikes in revenue are atypical. As Dublin transitions to a
developed City, it must plan for revenue declines and increased service costs associated with a
larger, mature community.
Furthermore, the City must be ready to weather the next recessionary cycle, the signs of which
are beginning to be seen with recent Sales Tax reports. The City’s second largest revenue
stream is flattening out, particularly in the Autos and Transportation sector – in FY 2016-17
auto sales tax grew only 2.4% over the prior year, adding just $155,815 to Sales Tax revenues,
after three years of average annual growth of 7.8%. For an agency heavily concentrated in the
Auto sector, this is a concern. Moreover, the majority of the total Sales Tax growth in Fiscal
Year 2016-17 occurred in the third quarter of 2016, followed by two quarters of flat revenue,
and a final quarter that reflected a loss of 7.9% ($133,241). The Building and Construction
sector also grew 2.4% ($101,231) for the year, compared to 7.0% the prior year.
Development-related revenue is the third largest revenue stream to the City, but it is the most
volatile. Building permit revenue and development services revenue (planning and engineering
services) increased a combined 17% last year, but the yearly increases since the recession have
been extremely varied: since FY 2010-11, development revenue increased 52%, 18%, 7%, 3%,
1%, and 17% in the respective years. The City anticipates a downward trend as some of the
larger development projects near completion, and continues to maintain a Service Continuity
Reserve in the General Fund to ensure that there are future funds to cover expenditures when
development activity slows.
While FY 2016-17 finished with a General Fund surplus of $17.7 million (before transfers out to
capital projects), it is long-term fiscal sustainability that remains at the forefront of budget
discussions. Even with the continued growth in property and sales tax, declining development
revenues and the rising costs of contracted services could result in deficit spending of $1.5
million in the General Fund by FY 2022-23 up to $4.3 million in FY 2024-25.
10-Year Forecast
The 10-Year Forecast serves as the foundation of the City’s annual budget, in terms of guiding
the City’s use of resources now to prepare for the future. The Forecast is typically updated and
presented with the annual budget adoption, however as major changes occur (e.g., a large
property tax increase), Staff provides an updated Forecast to the City Council.
The current assumptions as revised during the FY 2017-18 1st Quarter Financial Review are
presented below, followed by a graphical representation of revenues and expenditures.
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Revenue
Property Tax 2.0% growth in FY 2018-19, 4.4% annually until FY 21-22,
2.5% growth thereafter.
Sales Tax 2.7% growth in FY 18-19, Flat in FY 19-20 (conservative
recessionary scenario), 2.5% thereafter.
Development Revenue Permit revenue decreasing 48.6% in FY 18-19, then an
average decrease of 6.3% annually until it baselines at
$1.7 million in FY 24-25.
Development Services revenue decreasing in FY 18-19 by
49.7%, then an average decrease of 15.1% annually.
Interest Income Flat interest of $1.1 million (recessionary scenario).
Transient Occupancy Tax and
Franchise Fees
1.0% annual growth.
Recreation Revenue 1.0% annual growth (including The Wave).
Community Benefit Payments None after FY 17-18.
Expenditures
Salaries and Wages 5.0% annual growth. (accounts for COLAs and merit
increases)
Benefits 3.0% annual growth, including $1 million supplemental
pension funding and potential health rate increases.
Services and Supplies Flat in FY 18-19, 1.0% annual growth thereafter.
Internal Services Charges 2.0% annual growth.
Utilities 3.0% annual growth.
Contracted Services 3.0% annual growth on all contracts (development
contracts will be reduced while public safety and
maintenance will increase more than 3.0%).
CIPs No General Fund CIP funding after FY 21-22.
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General Fund 10-Year Forecast (in $ thousands)
Updated November 2017
It is important to note that in years 5-10 of the forecast, Staff uses conservative assumptions, as
projecting long term conditions is challenging. Some recessionary factors have been included,
such as a one-year decrease in Sales Tax and flat interest income. It is important to note that in
the out years, while the numbers fluctuate with new information, the overarching story does
not change. As the City nears build out, the focus will be on maintaining facilities rather than
building them, and development revenue will not come in as high as it has in recent years. This
information was provided to the Task Force to set the stage for its discussions.
TASK FORCE MEETING SUMMARY
The Task Force was originally set to meet bi-monthly for two hours beginning January 25, 2017
for a total of six meetings, culminating in the production of an advisory document to be
presented to the City Council in early 2018. Due to the amount of information that was to be
presented to the Task Force and to give the Task Force adequate time to review and debate the
issues, four meetings were added for a total of 10 meetings lasting three hours each. The first
five meetings were classified as “informational downloads”, in wh ich City Staff presented an
overview of the City’s finances and major functions of each direct-service department.
Following the Staff presentations, Task Force Members were given the opportunity to ask
questions on the information presented.
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Once the “informational downloads” were complete, the next three meetings were dedicated
to decision-making, in which the Task Force worked to develop, review, and revise
recommendations which were ultimately included in this report. During this time, the Task
Force Members had the opportunity to request additional and clarifying information to aid in
the discussion. The November meeting was used for refining the language in the
recommendations and making formal votes on the recommendations. The Januar y 2018
meeting was dedicated to reviewing the draft report and discussing the presentation of the
materials to the City Council.
The following is a description of the work undertaken at the Task Force Meetings.
January 25, 2017 (Mission and City Finance Introduction)
This first meeting served as an introduction of the Task Force, Staff members, and the
Facilitator, Greg Larson of Management Partners. Members discussed their backgrounds and
why they were interested in being on the Task Force. Mr. Larson provided a review of the Task
Force’s objectives and work plan. It became apparent from the on-set that the number of
meetings proposed, as well as the meeting length, would not be sufficient to cover the amount
of material at the depth necessary to fully understand the City’s financial status and formulate
recommendations to the City Council. As a result, the work group added four meetings to the
schedule. The second half of the meeting included a high-level overview of municipal finances
and the City’s General Fund Operating Budget presented by the Administrative Services
Director.
February 23, 2017 (10-Year Forecast and Capital Improvement Plan)
As a continuation of the high-level overview from the first meeting, the Administrative Services
Director provided an overview of the City’s Financial Forecasting, including the 10-year revenue
and expenditure assumptions and the City’s long-term liabilities and reserve funds. The
Assistant Public Works Director/City Engineer then presented an overview of the City’s Capital
Improvement Program (CIP). The presentation included information on the CIP budgeting
process and funding sources, as well as highlighting some of the City’s large parks and streets
projects.
March 22, 2017 (Public Safety and Retirement)
Beginning with the March meeting, City department directors were invited to present to the
Task Force an overview of their departments and discuss current and future challenges. At this
meeting, the Police Chief presented information on the Alameda County Sheriff’s police
services contract with the City, including service levels and operational budgets. Following the
Police Chief, the Assistant City Manager and Assistant Administrative Services Director provided
an overview of Dublin Fire Services. Following the presentations, the Administrative Services
Director provided an overview of the CalPERS pension system , the City’s retirement benefit
provisions and liabilities, and the steps that the City has taken to reduce current costs and
address long term liabilities.
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April 25, 2017 (Public Works, Community Development and Parks and Community Services)
The departmental review sessions continued with Public Works Director, Community
Development Director, and Parks and Community Services Director. Each presenter provided
information on departmental structure, services, and challenges in continuing to provide the
same level of services as the City reaches build-out. The Parks discussion included information
on the City’s park acreage and recreational facilities.
May 25, 2017 (Economic Development and Decision Points)
Assistant City Manager provided an overview of the City’s Economic Development efforts,
including opportunities and challenges, proposed projects and future development sites, and
commercial capacity. After the presentation, Facilitator Larson reviewed the initial Decision
Points, or proposals to address the structural deficit, brought forward by the Task Force
Members. The Decision Points were classified into four categories:
A. Expenditure-Related: proposals to reduce costs
B. Revenue-Related: proposals to raise new revenues or increase existing revenues
C. Net Benefit Solutions: proposals that would have some initial investment but that would
result in cost savings or revenue increases over time
D. Process-Related: proposals that introduce new, or improve existing, processes, that
ultimately will help the City be more proactive in addressing future challenges
The original Decision Points brought forward by the Task Force are listed below. Under each of
these general categories the Task Force identified specific recommendations which were
ultimately voted on. Several categories (shown in italics below) were eliminated or changed in
the Final Recommendations, though they were all discussed in detail.
Expenditure-Related Proposals
E-1 Address General Fund CIPs
E-2 Decrease Park Maintenance Costs (MCE contract)
E-3 Move to Fixed Retirement Contribution for New Hires
E-4 Across the Board Departmental Reductions (1 - 5%)
E-5 Eliminate Cemetery Expansion Plans
Revenue-Related Proposals
R-1 Increase Business License Fees
R-2 Increase Parks Use Fees
R-3 Increase Non-Resident Fees
R-4 Increase Overall Cost Recovery for City Programs
R-5 Increase Commercial Growth
R-6 Increase Sales Tax
R-7 New Public Works Revenues
R-8 Full Cost Recovery for Solar Permits
R-9 Increase "Buy Dublin" Efforts
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Net Benefit Solutions
N-1 Downtown Renovation
N-2 Implement Parking Meters/Enhance Parking Fine Enforcement
Process-Related Proposals
P-1 Plan for Appropriate Police Services Growth
P-2 Consider Non-Sworn Police Support (Reserves, Volunteers)
P-3 Realign Reserve Needs
P-4 Tier Budget Response Based on Forecast
P-5 Require Budget Offsets for New/Increased Services
P-6 Establish Base Year with Annual Inflation Thereafter
August 3, 2017 (Decision Packages and Direction, Part I)
Facilitator Larson began the discussion reminding the Task Force of the current projects which
showed a $530,000 projected deficit in the City’s General Fund operating budget beginning in
FY 2021-22 increasing to $3.7 million in FY 2024 -25. The Administrative Services Director
reviewed the revenue- and expenditure-related Decision Points. Task Force Members discussed
the Decision Points and provided ideas on the best way to move forward, narrowing their focus
on what the recommendations to the City Council will ultimately include.
September 13, 2017 (Decision Packages and Direction, Part II)
Facilitator Larson reviewed the remaining Decision Points to be considered. The Task Force
continued their discussion.
October 19, 2017 (Decision Packages and Direction, Part III)
The Task Force reviewed the remaining points for final discussion and vote during the
November meeting.
November 15, 2017 (Final Decision)
The Administrative Services Director began the meeting by providing an overview of the City’s
most up-to-date financial information including the current 10-year forecast received by the
City Council at its November 7 meeting. She indicated that with an increase in property tax in FY
2017-18, the first year of the projected deficit was pushed out one year to FY 2022-23. She also
stated that while revenue numbers may change in the short term, the eventuality of a
structural deficit still exists: eventually the City will no longer collect development revenue for
large projects, and contracted service costs will rise.
Facilitator Larson then led the Task Force through all Decision Points discussed to date and took
a final vote on each.
FINAL RECOMMENDATIONS
The Task Force’s recommendations, summarized in the table below, are based on the most
current 10-Year Forecast as presented by Staff at the November 7, 2017 City Council meeting,
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and based on a final vote tally taken at the November 15 meeting. Final recommendations
required a majority vote of Task Force Members (excluding alternates). The three alternates
who participated throughout the Task Force process voted with the majority of the Task Force
members or abstained, except for one “No” vote on the half -cent sales tax measure. All three
alternates voted in support of the full package, along with all b ut one regular member of the
Task Force.
The background information presented to the Task Force to aid the discussions is included in
the Appendix to this report.
The Task Force would like to specifically note the following assumptions upon which its
recommendations are made:
Future development revenue and sales tax projections are based only on vested
residential and commercial projects and existing businesses; no assumptions about
potential changes to zoning and/or potential businesses coming to Dubl in have been
incorporated.
Police staffing is held constant at 63 positions (55 sworn, 4 non -sworn, 4 City support
staff).
Recommendation
Estimated Annual
Fiscal Impact
Member Vote
Tally
EXPENDITURE-RELATED PROPOSALS
E-1
(a)
Policy Statement: The CIP planning process
should include a specific discussion of the
future General Fund obligations due to on -
going operational costs of the CIP. Future CIP
budget books will include an operational
impact statement for all projects. Should a CIP
project scope be revised, or should a new CIP
be created at a time other than the Budget,
Adoption, the Staff Report will include the
operating impact statement.
None- Policy Statement Pass: 6-1
E-1
(b)
Policy Statement: As a general policy the
General Fund should only be used to fund
renovation CIPs, not new CIPs. Should it be
determined that the General Fund will be used
to fund in whole or part a new CIP, a statement
of justification must be included in the project
description, indicating why it is necessary to
use the General Fund.
None- Policy Statement Pass: 6-1
E-2 Policy Statement: When considering multi-year
maintenance contracts the City must complete None- Policy Statement Pass: 7-0
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the full Request for Proposal/Qualification
process, including where applicable comparing
like services with the other Tri-Valley cities. In
addition, contracts should include a review of
the performance of the existing service
provider.
E-4
Reduce the General Fund operating budget,
exclusive of Public Safety, by at least, $600,000
by the first year of the deficit according to the
prior 10-Year Forecast.
Savings - $600,000 Pass: 7-0
REVENUE-RELATED PROPOSALS
R-1 Do not subsidize the Business License Fee.
Continue fee proration throughout the year.
Revenue Increase –
$91,000 Pass: 7-0
R-2
Parks and Community Services, excluding the
Library, should reach at least a 65% cost
recovery rate department wide, within five
years.
Revenue Increase -
$1,500,000 Pass: 7-0
R-3 Increase non-resident rates to levels
comparable to neighboring cities.
Revenue Increase –
$25,000 - $125,000 Pass: 7-0
R-4
(a)
Evaluate potential efficiencies at The Wave,
once full costs and adjustments are
understood. If after several years, the City
subsidy continues to be $1 million or more, the
Task Force recommends looking into
alternative management and operational
models including outsourcing.
Unknown Pass: 4-2-1
R-4
(b)
Consider revising/updating City’s current User
Fee Policy Unknown Pass: 7-0
R-5
Increase Economic Development resources to
implement activities as detailed in the
Economic Development Strategy.
Potential Revenue Increase Pass: 7-0
R-6
(a)
Bring Half-Percent Sales Tax Measure to Dublin
Voters.
Revenue Increase -
$6,200,000 Pass: 5-2
R-6
(b)
Policy Statement: If a Sales Tax measure goes
forward to the voters the ballot language
should include the potential cuts that the City
would have to make if the Sales Tax measure
fails, and the impact of those cuts.
None- Policy Statement Pass: 6-1
NET BENEFIT SOLUTIONS
N-1
Continue to strategically use the Downtown
Public Improvement Reserve to promote and
improve downtown businesses, as exemplified
by work that has been undertaken on Village
Increase in costs, funded
from reserve.
Potential revenue increase
due to new businesses /
Pass: 6-1
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Parkway. Consider replenishing the reserve, as
funds are used, during Year-End when
unassigned fund balance is available.
additional foot traffic.
PROCESS-RELATED PROPOSALS
P-1
Budget for additional sworn police officers
through buildout and include the officers in the
10 year forecast.
Increased Cost –
$250,000 per new position Pass: 6-1
P-2 Explore the possibility of using non-sworn
volunteers in the Police Department.
Increased Cost - start-up
costs and on-going
operational costs. Potential
savings from using
volunteers in support of
Safety staff.
Pass: 5-2
P-3
Policy Statement: The City should only use the
reserve to balance the budget as a matter of
last resort.
None-
Policy Statement Pass: 7-0
P-4
(a)
Policy Statement: The City should use one-time
money and reserves to invest in new ways to
reduce future costs and/or in technologies that
create efficiency.
None-
Policy Statement Pass: 7-0
P-4
(b)
Policy Statement: The City shall, during the
course of the year, minimize budget
adjustments needing Council approval to those
issues that have been deemed urgent. All other
budget adjustments shall be made as part of
the City’s quarterly financial report to the City
Council. All budget adjustment will include the
long-term impact of any approved budget
adjustments and once approved will be
incorporated in the City’s long-term financial
forecast.
None-
Policy Statement Pass: 7-0
P-4
(c)
In the event that the Sales Tax measure doesn’t
pass and the City is in a deficit, the City should
explore staffing furloughs at a projected
savings of $40,000 per day.
Cost Savings –
$40,000 per day Pass: 5-1-1
APPROVE TOTAL PACKAGE OF
RECOMMENDATIONS Pass: 6-1
15
The following section provides some context to the Task Force’s Final Recommendations.
Information on all original Decision Points, including those that did not make the final list, is
included in the Appendix.
E-1. Address General Fund CIP’s
The Task Force believes that the full impact of capital improvement projects (CIP s) should be
clear to both the City Council and the public. To that end, they recommend all CIPs should
include a clear statement of their future operational impact on the General Fund. In addition,
the Task Force recommends that as a general policy the General Fund should not be used for
new CIPs, given the projected deficit.
E-2. Decrease Park Maintenance Costs
Initially, the discussion was focused on detailing maintenance costs at City parks and looking for
areas of efficiencies. This proved difficult as the group did not have reliable comparative data
from other agencies and could not responsibly suggest specific service reductions. Instead,
emphasis was placed on the need to conduct a full competitive bid process when the
maintenance contract with MCE Corporation is next up for renewal. The Task Force felt that
long term contracts should not be renewed without a periodic review of performance and a
study of comparable services in other similar organizations to ensure the City is getting the
highest level of service for the best possible price. The Task Force noted that one of the possible
outcomes of such a comparison could be the City’s consideration of multiple contractors to
perform the work currently being provided by MCE, if that makes financial sense.
E-4. Across the Board Reductions
The Task Force sought to balance the need for cost reductions while maintaining a high level of
service. The Task Force discussed in depth the potential for across-the-board cuts on a
percentage basis, but ultimately decided upon a dollar amount that the General Fund should be
reduced. The Task Force recommends leaving the decision of what to cut to City staff , as
opposed to singling out any single function or department. The Task Force agreed on a
minimum reduction of $600,000, exclusive of Public Safety, by the first year of the projected
deficit.
It should be noted that this proposed reduction is in addition to overall cost recovery proposals
discussed in this report.
R-1. Increase the Business License Fee
As part of the City’s 2012 User Fee Study that was used to adopt a Master Fee Schedule, it was
determined that it cost the City $72.85 to issue a business license. During the adoption of the
16
Master Fee schedule, the City Council opted to set the fee at $50.00 and to pro-rate it for
partial year licensing, to encourage compliance and support economic development.
The Task Force discussed this issue and reviewed the business license practices in surrounding
cities, and is recommending that the City charge the full cost of the fee, and that pro-rating the
fee should continue. Using 2012 numbers, the difference is roughly $91,000 per year that the
City could potentially collect.
Note: the City is currently undertaking an update to the User Fee Study, therefore the actual
City cost may will likely change.
R-2. Increase Parks Use Fees
This category focused initially in rental rates for City parks and facilities, and the Task Force
evaluated Dublin’s rates as compared to neighboring cities. There was consideration of the fact
that Dublin’s rates for other public agencies and sports leagues is lower than in surrounding
communities, but it was determined that that category is not a particularly high revenue -
generator.
The Task Force decided that a more holistic approach to the City’s provision of parks and
community services was needed; in particular, in light of at the existing overall cost recovery
rate of 50% the Task Force felt that the larger impact would be felt by achieving a 65% cost
recovery rate over five years for the entire PCS Department (excluding the Library). This is
estimated to generate $1.5 million in additional revenue (or in cost savings) to the General
Fund.
R-3. Increase Non-Resident Rates
The City of Dublin currently charges non-Dublin residents 20% more than Dublin residents for
Parks and Recreation classes. This premium is consistent with the Tri-Valley area, though San
Ramon’s non-resident premium is at 25%.
Based on data from PCS, non-residents make up roughly 15% of total program registrations.
Assuming 15% Non-Residents across all program categories, including the 20% premium, Non -
Resident revenue would be approximately $500,000. For every 1% that Non-Resident rates
were increased, Dublin would receive an additional $25,000 in revenue. Note: this assumes no
reduction in registrations.
R-4. Increase Overall Cost Recovery for City Programs
As an expansion of the PCS cost recovery discussion, the Task Force felt it was important to call
out increased cost recovery at The Wave as a separate item. There was significant interest by
the members in finding ways of reducing the General Fund’s projected subsidy of $1 million per
year for operations at the City’s new aquatics complex. While some members felt that the City
17
does not yet have enough information to make significant changes to the way the facility is run,
the majority determined that contracting the service to an outside entity is a viable option.
In addition, the Task Force concluded that with the next User Fee Study (to be completed in the
next few months), the City should focus on full cost recovery efforts for all services it provides.
R-5. Increase Economic Development Activities
The Task Force emphasized the need for a strong focus on work that supports initiatives
identified in the Economic Development Strategy.
R-6. Increase Sales Tax
Of all Decision Points discussed, the Sales Tax Measure has the greatest immediate positiv e
impact on the General Fund. The Task Force evaluated a quarter -percent measure and a half-
percent measure, deliberated about their impacts on the Dublin consumer, and considered the
potential for another public agency (the County, BART, or a special district) to pass its own sales
tax measure, thus directing those potential funds away from the City. The group looked at
recent similar measures, rates of success, and uses of such funds, and ultimately determined by
majority vote that the City should move forward with a measure on a future ballot.
In addition, the Task Force agreed that any language used to advocate for such a measure
should clearly identify the potential impacts to the City should the measure not pass and the
City is still in a deficit position. This includes identifying service cuts or other budget -balancing
solutions the City would undertake that would impact Dublin residents.
N-1. Downtown Renovation
The Task Force determined that the City should continue to promote and improve Downtown
businesses similar to the work that has been recently done on Village Parkway. The Task Force
also felt that, should the City have one-time funds available, it should consider setting funds
aside for future investment in in the Downtown area. The recommendation is centered on the
idea that the use of use one-time monies and reserves to fund projects may positively impact
the City’s revenues or save the City money in the future.
P-1. Plan for Police Services Growth
The importance of public safety was a consistent and universal theme throughout the Task
Force meetings. The group praised the work of Dublin Police Services, while acknowledging the
rising cost of the contract (the Alameda County Sheriff’s Office contract for police services is the
largest single cost to the City). The Task Force had multiple discussions about the increase in the
cost of the contract and the potential need for additional police staffing as the City continues to
18
grow. To that end, the Task Force recommends a policy stat ement to continue to plan for the
expansion police services in the 10-Year Forecast.
P-2. Consider Non-Sworn Police Support
As part of the discussion around the need to increase public safety support, the Task Force
discussed the use of non-sworn volunteers to supplement enforcement and provide an
additional public safety monitoring presence in the City, as is done in other California cities such
as Lincoln, Newark, Palm Springs, Rancho Cucamonga, Santa Paula, and Walnut Creek. The use
of volunteers is not meant to supplant the hiring of additional sworn officers, but to
supplement them, possibly delaying the need for additional sworn staff. The Task Force
believes this could potentially save money in the future while providing additional service to
Dublin residents. It should be noted that the Task Force recommendation comes with the
understanding that any program such as this would require operational support and guidance
from the Alameda County Sheriff’s Office.
P-3. Realign Reserve Needs
The Task Force discussed the General Fund reserve categories and restrictions of use and
evaluated the potential to use reserves as a budget balancing solution. The Task Force
acknowledged the health of the City’s reserves and agreed with the City’s practice of usin g
budgetary surplus to shore up reserves against future liabilities (such as pension and retiree
health obligations). The group determined that reserves are one -time funding sources that
should only be used for General Fund budgetary solutions as a tempora ry, last resort.
P-4. Tier Budget Response Based on Forecast
The Task Force discussed tiered levels of budget reductions based on changes in the Forecast;
however the group ultimately recommended the consideration of several policy statements to
guide the future budget process. These policies address the following:
1) The use of one-time funds on projects that reduce costs or create revenues over time
(such as investment in new technologies that create operational efficiencies);
2) A more controlled and transparent process for bringing mid-year budget amendments
to the City Council; and
3) The use of furloughs in the event of a deficit and no new sales tax revenue.
CONCLUSION
The recommendations contained in this report represent the good faith work of the Fiscal
Sustainability Task Force over the last year.
19
APPENDIX:
Information Provided to the Fiscal Sustainability Task Force
20
R-1 – Increase Business License
Overview
The topic of business licenses has been brought up on multiple occasions through discussion during Task
Force meetings and in member correspondence asking for more information. The following is an
overview of Dublin’s Business License fee, what flexibility the city has in terms of increases/decreases in
the fee and how Dublin compares to the rest of the Tri-Valley area.
Most Important: The City of Dublin Business License is a fee not a tax.
There have been many inquiries about revenue the City could generate by increasing the cost of
Business Licenses fees to certain benchmarks such as $100 or $200. However, since this is a fee rather
than a tax, the maximum the City can charge is equal to the cost of providing the service (i.e., to issue
licenses and renewals, and to maintain the database) and is determined by a User Fee study. The
current maximum fee the City can charge is $72.85 as determined by the City’s 2012 User Fee study. The
City is currently undertaking a new User Fee Study which will give us an updated cost of this service.
The current fee is $50.00 and is Pro-Rated.
A User Fee Study determines how much it cost for a City to perform a service or task, which per Prop
218, with few exceptions, is the maximum a City may charge. The City does have flexibility when it
comes to charging less than the full fee. During the adoption of the Master Fee Schedule, the City
Council decided to set the Business License Fee at $50.00 “to encourage compliance and support
economic development”. In addition, the fee is prorated at $4.17 per month if a business license is
obtained for a partial year (business licenses must be renewed annually on the Federal Fiscal Year –
October 1 – September 30).
Based on data provided during the last User Fee Study, the average fee paid was $42.50, due to
prorating the fee.
Estimated General Fund Subsidy
Based on the projected revenue for FY 2017-18 generated from Business License Fees, and the $72.85
total cost as calculated in 2012, the City is currently subsidizing this service by $121,400. Approximately
$30,000 of the subsidy is due to prorating.
Items for Consideration
Consider 1) whether the General Fund should subsidize the cost to provide Business Licenses; and 2)
whether to prorate the Business License Fee for a partial year.
21
R-2: Increase Park Use Fees
Overview
In the FY 2015-16 the City spent $2,624,000 on parks and open spaces.
Maintenance $1,923,000
Utilities $701,000
Total $2,624,000
During the same period, the City received $249,300 in revenue for rental of sports fields and picnic
areas.
Sports Field $219,000
Picnic Area $30,330
Total $249,330
The City charges field rental fees based on a tiered system. Note: this does not include all fees such as
lighting and synthetic turf.
Tier Dublin Rates Pleasanton/San Ramon
(Avg)
Tier 1: Public Agencies Serving City $7.00 $14.52
Tier 2: Dublin Sports League
Organizations
$7.00 $14.52
Tier 3: Non-Profit Organizations $16.80 $17.00
Tier 4: Residents $21.00 $15.40
Tier 5: Non-Residents $25.20 $24.75
Tier 6: Commercial Residents $33.60 $23.56
Tier 6: Commercial Non-Residents $40.30 $27.25
Revenue generated in Dublin by each tier is as follows:
Tier % of Field Usage Estimated Revenue
Tier 1 1.45% $3,165
Tier 2 87.63% $191,901
Tier 4 1.66% $3,626
Tier 5 9.14% $20,006
Tier 6: Non-Residents 0.14% $302
Total $219,000
22
Items for Consideration
Based on usage, for every dollar that all fees are increase for all tiers, assuming no reductions in field
rentals, the City would receive an additional $28,883.
Tier $1.00 Increase
Additional Revenue
Tier 1 $459
Tier 2 $27,419
Tier 3 $0
Tier 4 $180
Tier 5 $797
Tier 6 – Resident $0
Tier 6 – Non- Resident $29
Total $28,883
23
R-3: Increase Park Non-Resident Fees
Overview
The City of Dublin currently charges non-Dublin residents 20% more than Dublin residents for Parks and
Recreation classes. This premium is consistent with the Tri-Valley area.
In Fiscal Year 2015-16, the Parks and Community Services Department’s (PCS) program revenue was as
follows:
Revenue Source Amount
Cultural Activities $5,423
Heritage Center Programs $14,364
Family Programs $748,950
Recreational Activities $503,508
Preschool Programs $363,212
Senior Programs $110,463
Sports Programs $849,202
Aquatic Programs $237,369
Total $2,832,495
Based on data from PCS, non-residents make up roughly 15% of total program registrations. Assuming
15% Non-Residents across all program categories, including the 20% premium, Non-Resident revenue
would be approximately $500,000. For every 1% that Non-Resident rates were increased, Dublin would
receive an additional $25,000 in revenue. Note: this assumes no reduction in registrations.
Non-Resident Rate Increased Revenue Estimated Total Revenue
Resident + 20% $0 $500,000
Resident + 21% $25,000 $525,000
Resident + 22% $50,000 $550,000
Resident + 23% $75,000 $575,000
Resident + 24% $100,000 $600,000
Resident + 25% $125,000 $625,000
Local Rec Program Premiums for Non-Residents
City Non-Resident Rate
Pleasanton Non-Resident 10% increase in costs
Danville Non-Resident 20% increase
Dublin Non-Resident 20% increase
San Ramon Non-Resident 25% increase
24
*Does not include the cost associated with the Dublin Library
Items for Consideration
Should the City increase the Non-Resident premium, and if so, to what level?
$5,073,456
$3,833,651
$3,561,035
$1,656,236
50%
46%
41%
39%
0%
10%
20%
30%
40%
50%
60%
$0
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
Dublin Pleasanton San Ramon Danville
Parks General Subsidy*
GF Subsidy % GF Subsidy
$10,140,011
$8,265,162 $8,731,453
$4,237,893
$177.89
$100.46
$115.44
$94.95
$-
$20.00
$40.00
$60.00
$80.00
$100.00
$120.00
$140.00
$160.00
$180.00
$200.00
$0
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
Dublin Pleasanton San Ramon Danville
Per Capita Parks Spending*
Appropriations Cost Per Capita
25
R-4 – Increase overall cost recovery for City Programs
Overview
The City recovers costs for City programs/services through user fees. The City’s User Fee Cost Recovery
Policy requires the completion of a comprehensive User Fee Study every five years to assure that these
user fees reflect the City’s underlying costs. Furthermore, the Policy states that “absent reasons to the
contrary, the City will set user fees at a level to recover the total cost of delivering the related service,
including indirect costs”. To ensure that the fees keep pace with annual increases in City costs, the Policy
includes an automatic annual increase to fees based on the consumer price index. The City is currently
working with consultants on a new study, which is anticipated to be completed by the end of 2017.
After reviewing the 2011 User Fee Study, the City Council approved a fee schedule that included a City
subsidy of 57 fees (including building and solar permits), at an estimated total subsidy of $380,000. The
current dollar figure of the subsidy is unknown, as the new study is not yet complete. However, the
majority of the fees that are subsidized, would net little revenue to the city with the exception of two
fees 1) the Business License 2) Conditional Use Permit.
Parks and Community Services Program Revenue
The above information does not include Parks and Community Services fees, which are set by a separate
pricing policy and are not calculated through the user fee study process. The Parks and Community
Services Pricing Policing (PCS Pricing Policy) was first adopted by the City Council on September 21, 2010
and revised on June 21, 2016. Where the user fee study looks to set rates at full cost recovery the PCS
Pricing policy sets the goal of a 65% cost recovery minus the cost of the Library.
The General Fund Subsidy for Parks and Community Services (minus the Library) for FY 2017 -18 is $5.0
million which represents a cost recovery of 50%.
Items for Consideration
User Fees (Non-PCS):
The current User Fee Cost Recovery Policy already provides for the City to recover the City’s full
underlying costs including departmental and citywide overhead costs, with the exception of fees that
are subsidized for reasons of economic development, resident access to programs/services and health
and safety. In Addition, the Business License fee is being addressed separately and increasing the
Conditional Use Permit fee would directly affect Dublin resident access to service.
PCS Fees:
Does the Task Force want to recommend an adjustment to the current Pricing Policy of 65%?
26
R-5: Increase Commercial Growth / Increase “Buy Dublin” Efforts
Overview
The City of Dublin already employs a robust economic development strategy, which includes a “Buy
Dublin” effort and which was developed with the help of Economic & Planning Systems, Inc. and
stakeholders from all facets of the business community. A copy of the report detailing the economic
development strategy has been distributed to the Task Force. The City believes that any additional
efforts will not result in any new bankable revenue for the City and as such recommends that the
current efforts continue.
Items for Consideration
Staff is providing this as an informational item.
27
R-6: Increase Sales Tax
Overview
The Sales Tax rate in the City of Dublin is 9.25%, allocated to various agencies as follows:
Sales Tax Break Down (Alameda County)
Rate Jurisdiction Purpose
3.6875% State State General Fund
0.25% State State General Fund
0.50% State Local Public Safety Fund (Support Local Criminal Justice)
0.50% State (1991 Realignment) – Support Local Health & Social Services
1.0625% State 2011 Realignment
1.00% Local City Operations
0.25% Local County Transportation
7.25% Total Statewide Rate
0.50% Alameda County Hospital
0.50% Alameda County Transportation
0.50% Alameda County Transportation
0.50% Alameda County Transportation
9.25% Alameda County Rate
Since the passing of Prop 13, the options for cities to generate revenue have continually declined or
become much more difficult. One option agencies have is to seek a voter-approved increase to the Sales
Tax rate, the proceeds from which would belong solely to the agency passing the measure.
Projected Additional Revenue in Dublin from Sales Tax Measure
% Increase Additional Revenue
.25% $3.1 million
.50% $6.2 million
The maximum Sales Tax that can be charged in Alameda County without a legislative waiver is 9.75%.
City Sales Tax Rates in Alameda County
City Rate
Albany 9.75%
Hayward 9.75%
Newark 9.75%
San Leandro 9.75%
Union City 9.75%
Alameda 9.25%
Berkeley 9.25%
Dublin 9.25%
28
Emeryville 9.25%
Fremont 9.25%
Livermore 9.25%
Oakland 9.25%
Piedmont 9.25%
Pleasanton 9.25%
Alameda County Cities with Sales Tax Increases
Albany
Type General Tax
Rate 0.50%
Effective April 1, 2013 – March 31, 2021
Measure Measure F - 79.88% (Pass)
Estimated Revenue $1.1 Million/Annually
Hayward
Type General Tax
Rate 0.50%
Effective October 1, 2014 – September 30, 2035
Measure Measure C – 67.36% (Pass)
Estimated Revenue $10 Million/Annually
Newark
Type General Tax
Rate 0.50%
Effective April 1, 2017 – March 31, 2042
Measure Measure GG – 61% (Pass)
Estimated Revenue $3.5 Million/Annually
San Leandro
Type General Tax
Rate 0.50%
Effective April 1, 2015 - March 31, 2046
Measure Measure HH – 64.45% (Pass)
Estimated Revenue $11 - $13 Million/Annually
Union City
Type General Tax
29
Rate 0.50%
Effective April 1, 2011 – March 31, 2025
Measure Measure JJ – 73.74% (Pass) – JJ extended previously approved (November
2010 m- Measure AA) tax for 10 years.
Estimated Revenue $4.5 Million/Annually
General vs. Special Tax
General Local Sales Taxes cannot be allocated for a specific purpose and must be approved by a majority
(50%+1) of the vote in the city.
Special Local Sales Taxes are for a specific purpose and can only be used for that purposes, these are
most commonly used for Police/Fire and Transportation/Streets/Roads. Special Taxes must be approved
by a supermajority (66%+1).
California Local Sales Tax (Add-Ons)
As of April 1, 2017 California had 176 cities with approved Local Sales Taxes; 27 were Special Taxes.
Rate 0.25% 0.50% 0.75% 1.00% 1.25% 1.50% 1.75%
# 13 84 18 53 2 5 1
From 1995 through November 2016 (537) proposals for local Sales Taxes have been submitted to the
voters (City and County)
General Tax Special Tax
Proposed 324 213
Approved 230 92
% 71% 43%
Cities general purpose taxes have shown a greater rate of success that county measures passing 76%
(224/295) of the submitted measures. Approximately half of the special purpose taxes submitted by
cities have passed 50% (40/79). Sales Taxes structured as a majority vote has and continues to be the
most popular and successful revenue tool for cities, in part to due to the lower threshold for approval.
Sales Tax Recession Impact
The following projection includes what could happen in a mild economic downturn and is similar in scale
to the recession of the early 2000’s. The projection takes into consideration the City’s heavy reliance on
automotive sales. The below figures are already calculated into the City’s 10-year forecast.
2016-17
Projected
2017-18
Budgeted
2018-19
Projected
2019-20
Projected
2020-21
Projected
2021-22
Projected
$20,666,260 $20,296,801 $20,615,327 $20,446,605 $21,742,279 $22,297,711
30
Items for Consideration
Would the Task Force consider recommending a City Sales Tax Measure? If so, what level and type of
Sales Tax increase would best serve the City?
Does the Task Force want Staff to bring back information related to other tax mechanisms? (TOT, UUT)
31
R-7: New Public Works Revenue
Overview
Special Districts are a common tool for agencies to finance the operating cost of maintaining
streetlights, landscaping, general maintenance, and other related items, or the capital cost of
infrastructure, in specific areas.
Types of Funding
Districts are required to be approved by the property/landowners who will benefit from the
improvements, although the voter approval threshold and process vary by district. The following is a list
of the most commonly used forms of Special Districts.
Type Description
Benefit Assessment District
Benefit Assessments are commonly used by local
government to pay for fire suppression, sewer,
sanitation and flood control services. (Government
Code 54710)
Geological Hazard Abatement District
Provides a vehicle for property owners to finance and
share the potentially high costs or preventing and
controlling geologic threats to properties (Public
Resources Code 26500)
Abatement Districts
Created to pay the costs of preventing and
controlling threats to public health and property. Two
most common: 1) Mosquito Abatement District 2)
Vector Control Districts
(California Health and Safety Code 2200)
Business Improvement Districts
Allows business owners to approve an assessment to
pay to increase services and promote their district.
(Streets & Highways Code 36500 & 36600)
Mello-Roos Community Facilities District
Allows for financing of public improvements and
services, including streets, sewer system and basic
infrastructure, police protection, fire protection,
ambulance services, and parks
(Government Code 53311-53368.3)
Community Rehabilitation Districts
Created to finance the rehabilitation, renovation,
repair or restoration of existing public infrastructure,
but cannot be used to pay for maintenance.
(Government Code 53370)
Maintenance District
Create to finance the costs of maintaining open
space, parks, playgrounds and other public areas.
(Government Code 50575)
Landscaping and Lighting Districts
Created to pay the costs of landscaping and lighting
public areas and to finance parks, open space and
community centers
(Streets & Highways 22500)
32
The City currently has the following Special Districts:
Landscape and Lighting
1983-1 Street Lighting
1983-2 Stagecoach Landscape
1986-1 Dougherty Landscape
1997-1 Santa Rita Landscape
1999-1 East Dublin Street Lighting
Geologic Hazard Abatement Districts
Schaefer Ranch
Fallon Village Annex/Jordan Ranch
Fallon Crossing
Mello-Roos Community Facilities Districts
2015-01 Dublin Crossing
2017-01 Dublin Crossing (Public Services)
In addition Dublin Residents reside in one or more Mosquito and Vector control abatement districts,
which are not controlled by the City.
Items for Consideration
Staff is providing this as an informational item.
33
R-8: Full Cost Recovery for Residential Solar Permits
Overview
Residential Solar Permits
The City’s current residential Solar permit fee is $250, for any size system. This fee was set by City
Council as part of the City’s green building program to enhance public health and welfare by
encouraging green building measures in the design, construction and maintenance of buildings. The full
cost as calculated as part of the 2012 User Fee study was $327.
The City’s permit fee is currently below the State maximum as set by SB 1222 which states, residential
rates have a max fee of $500 for a 15Kw system or less and $15 for each KW above the 15KW.
Commercial Solar Permits
SB 1222 set the commercial rate for permit fees at a max of:
Size Amount
Up to 50Kw $1,000
51Kw to 250 Kw $7.00 for each additional Kw
251Kw and above $5.00 for each additional Kw
The City’s Commercial permit fee rate is not subsidized and is as follows, $972 (for one inverter and up
to ten panels); $110 per additional inverter; and $125 per each additional 100 panels. When a permit is
processed in the City system, the database calculates the City fee and the State maximum fee. Should
the City fee by higher, the system will charge the applicant only up to the State maximum.
In FY 2015-16 the City received:
Fee Type Number of Permits Revenue
Commercial 6 $7,820
Residential 524 $131,000
Total 530 $138,820
Estimated General Fund Subsidy
Based on the number of permits, the City is subsidizing this service by $40,348. Please Note: The
subsidizing of the residential solar permit fee is part of the City’s Climate Action Plan which addresses
targets established by SB 350 to reduce greenhouse gas emissions to 40% below 1990 levels by 2030.
Items for Consideration
Would the Task Force like to consider recommending increasing the cost recovery to a level closer to the
maximum allowable?
34
Additional Information: (R-2: Increase Park Use Fees/ R-3 Increase Park Non-Resident Fees)
Overview
At the August 3rd Task Force meeting staff presented information on multiple topics related to Parks and
Community Services (PCS). The Task Force requested that additional information be provided that
showed the expenses and revenue for the whole PCS program, to put the previous information in
context. The prior information/decision points that were presented was
Increase Park Use Fees
Increase Park Non-Resident Fees
The following discussion does not include the cost of the Library, which is a cost placed in the PCS
budget, but which is a City program and City cost and not that of anyone City Department. In addition
the Library costs are not included due to the fact that the City’s PCS pricing policy also excludes the
costs. The City Council has set the cost recovery target for PCS at 65%.
The PCS budget has increased 88% ($4.8 million) since FY 2012-13, while the departments General Fund
subsidy has increased 119% ($2.77 million). During the same time period excluding PCS the City’s
operating budget grew 38%. (Note: The below numbers do not include the cost to maintain the City
parks. These costs are reflected in the Public Works budget)
FY 2012-13
Actuals
FY 2013-14
Actuals
FY 2014-15
Actuals
FY 2015-16
Actuals
FY 2016-17
Actuals
FY 2017-18
Adopted Budget
Expenditures 5,380,103 5,671,310 5,942,186 6,805,690 8,100,787 10,140,011
Revenue 3,073,969 3,426,991 3,738,237 3,747,907 3,731,185 5,066,555
GF Subsidy 2,306,134 2,244,320 2,203,950 3,057,784 4,369,602 5,073,456
Cost Recovery % 57.1% 60.4% 62.9% 55.1% 46.1% 50.0%
As indicated in the chart above the City’s current budgeted Cost Recovery percentage is 50%. To reach
the 65% threshold PCS would need to collect an additional $1.5 million. The following is an overview of
the PCS Cost Recovery by Program area along with the FY 2017-18 Adopted Budget Expenditures.
PCS Program Cost Recovery % FY 2017-18
Adopted Budget
Human Services 2.6% $290,200
Historical Facilities Operations & Rental 42.4% $209,150
Dublin Cemetery 85.0% $7,321
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Heritage Center Programs 11.0% $226,216
Cultural Activities 53.4% $393,835
Community Events & Festivals 26.1% $698,181
Facility Operations& Rentals 34.2% $1,385,602
Parks & Community Services Admin 0.0% $1,821,447
Family Programs 136.2% $544,245
Recreational Activities 103.0% $309,285
Preschool Programs 144.3% $249,413
Senior Programs 21.7% $443,728
Sports Programs 107.1% $720,929
EGRAC 62.0% $2,877,750
Items for Consideration
Create a Policy Statement that requires the Parks and Community Service Department to obtain a 65%
cost recovery within 5 years, with benchmarks for each year leading up until the 65% mark to avoid a
dramatic increase in costs and/or reduction in services.
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E-1: Address General Fund CIP’s / E-5: Eliminate Cemetery Expansion Plans
Note: Items E-1 and E-5 have been combined and replaced as Decision Point E-1
Overview
The majority of the City’s capital improvement projects result in an ongoing operating impact on the
City’s General Fund. The Task Force has discussed the importance of weighing these costs when
determining whether a project should move forward. In addition, specific General Fund reserves have
been set aside to fund capital projects – the Task Force is scrutinizing these uses for relevancy/feasibility
in the current financial climate.
On July 15, 2017, the City Council discussed future capital projects requiring General Fund contributions.
This item was continued to August 15th to allow Staff to provide the City Council with additional
information.
Items for Consideration
These decision points are related to actions the City Council will likely consider in the near future.
Pending City Council action removing the cemetery expansion project, it is recommended that, should
the Task Force wish to address this topic in its final recommendations to the City Council, it should
create a policy statement, such as the following:
“The CIP planning process should include a specific discussion of General Fund obligations, for both
capital funding needs and operational funding needs.”
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E-2: Decrease Park Maintenance Costs (MCE Contract)
Overview
The budget for the MCE contract for FY 2017-18 is $5.6 million. The following is list of the major cost
components of the work performed by MCE, with potential savings and impacts of cost cutting. If all
cost cutting actions are implemented, the City would save approximately $ 656,400 annually.
1. Turf
Cost Cutting Actions
Reduce mowing schedule by 50%
o Parks – 2x a week to 1x a week
o Neighborhood parks – 1x a week to 1x every other week
Impact
The City currently uses recycled water in the major of the parks, which causes grass to grow at a high
rate. Reducing the mow schedule would result in 40% cost savings (longer grass results in longer mow
times). Longer grass could impact user groups.
FY 2017-18 Budget
Task Budget Estimated Savings
Mow Schedule $316,000 $126,400
2. Trees
Cost Cutting Actions
Reduce tree staking and pruning
Eliminate tree replacement (note – the City Council recently re-funded tree replacement)
o Tree pruning and removal will be focused on public safety to accommodate sidewalk
encroachment and vertical pedestrian clearances. Removal will be limited to dangerous
trees.
Impact
The cost cutting actions would result in a reduction of approximately 50% in tree maintenance. Any
reduction in tree pruning service level will result in deferred costs, as the tree will continue to grow and
lack of pruning in any given year will result in one-time maintenance that takes longer and is more
expensive. Additionally, if trees are not pruned, this can become a liability to the City, especially in
winter months, as the unpruned trees become saturated and the risk of tree-related damage increases.
Please note: that the MCE budget in FY 2016-17 was the first year that tree pruning/upkeep was
restored to pre-recession levels. The City has approximately 8,550 trees.
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FY 2017-18 Budget
Task Budget Estimated Savings
Tree Upkeep $301,000 $164,000
3. Shrubs/Bedding/Leaves
Cost Cutting Action
Reduce pruning from 2x a year to 1x a year
o Focus on sidewalks and high traffic areas
Reduce leaf clean up
o Focus on high traffic areas
Impact
As with reduced tree upkeep, the reduction in shrub/bedding pruning will result in a deferred cost as the
pruning will eventually need to occur. A reduction in leaf clean-up may cause additional costs in
maintaining the City’s storm water system as a building in leaves and debris can be costly to clean and
cause street flooding. The City has 220 acres of City parks and 74 landscape acres.
FY 2017-18 Budget
Task Budget Estimated Savings
Shrubs/Bedding $998,000 $300,000
Leaf $165,012 $66,000
4. Park Restrooms Maintenance
The City currently spends approximately $300,000 annually on park restroom maintenance. A
neighborhood park costs the City between $10,000 - $15,000 annually, with heavier-trafficked parks
such as Fallon and Emerald Glen costing $45,000 each annually. MCE has not provided an estimate of
potential cost-cutting measures and impacts of those, although Staff believes a reduction in service or
availability could produce significant savings, should it become necessary.
Items for Consideration
Should the City explore any reduction to the services described above?
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E-3: Alternate Retirement Option
Overview
This paper is meant to address issues brought up by the Task Force regarding alternate retirement
options, available to CALPERs or 1937 Act Retirement systems. The 1937 State County Employees
Retirement Law (CERL), allowed Counties to establish retirement systems for County Employees. The
following is not a legal opinion nor has any legal counsel been sought. The majority of research is from
information available from CALPERs.
Do all California City Government agency participate in a Defined Benefit Plan, such as Calpers?
No, but of the 459 California municipalities identified in a recent study only 10 had no defined benefit
plan with only two of those cities having populations over 24,000 (Danville and Lafayette).
City Population City Population
Danville 43,146 Mendota 11,225
Holtville 6,154 Orinda 18,089
Huron 6,843 Rio Dell 3,347
Lafayette 24,659 San Juan Bautista 1,905
McFarland 13,745 Trinidad 361
Of the non-PERS agencies that could be identified, the average maximum Employer contribution
is between 10% - 15%.
Orinda was the only municipality that could be identified as once having a defined benefit plan
for all employees. The defined benefit plan for non-safety employees was phased out in the late
90’s. Orinda current contracts with Contra Costa Sheriff for Police Services.
Can a CalPERs contracted municipality have a split retirement system that includes both a Defined
Benefit Plan and a Defined Contribution Plan?
No. CalPERs contracted municipalities cannot have a split plan, as this would violate current Public
Employee Retirement Law (PERL). Currently the only way to establish a Defined Contribution plan
would be to place a hard freeze (stopping future service accruals for all (current and future) employees)
on the Defined Benefit plan.
Can a City implement a hard freeze?
Yes, but there would be significant hurdles. Municipalities have in fact approved a hard freeze for their
organizations, but in cases that could be researched, one of two situations occurred: 1) the
organizations no longer had employees eligible to receive pensions; or 2) had themselves been dissolved
(i.e. small special districts absorbed into other municipalities). Another option would be for current
employees of an organization to agree to a hard freeze in exchange for an alternative benefit.
While a City could attempt to unilaterally institute a hard freeze, without employee consent, outside of
bankruptcy, it would in all likelihood be seen as a violation of the “California Rule” which comprises a
series of court decisions ruling that the pension promised on the date of hire becomes a vested right,
protected by contract law, that can only be cut if offset by a new benefit of comparable value.
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In the case of Orinda, a soft freeze was implemented where current employees were allowed to keep
the Defined Benefit plan and new employees were placed into a Defined Contribution plan. This is now
against the law.
What would be the cost for Dublin to get out of CALPERs?
A lot. Assuming all other hurdles were dealt with the cost for the City of Dublin to leave CalPERs would
be between $44,711,069 and $63,641,481 as of the most current valuation. In addition this amount
would be required to be paid immediately upon termination from CALPERs (no multiple year payments
plans are available).
Why is the Termination Liability so much higher than the City’s current unfunded liability?
CALPERs policy is to use a discount rate for “risk-free securities” which is a blended rate of various
Treasury bond maturities, but which is closely aligned with the yield of the 20-year Treasury Bond, which
was approximately 2.75% as of the release of the current actuarial report.
Does the City have any options in terms of CALPERs?
Yes and No. Options to change benefits within CALPERs are available. Prior to 2013 the most common
action was to lower the benefit level for future employees. With the passage of PEPRA (Public
Employees’ Pension Reform Act), the State took that step for all municipalities for anyone hired into the
system after January 2013. The largest impact of PEPRA in terms of employer savings was shifting all
new employees to a new, likely lower, State retirement formula. For the City of Dublin that works out as
follows:
Retirement Age 55 62
Classic PERS Factor 2.7% 2.7%
PEPRA Factor 1.3% 2.0%
EXAMPLE:
Benefit Compensation Years of Svc Benefit Factor
Classic 2.7@55 $100,000 30 .027 x $100,000 x30 =$81,000
PEPRA 1.3@55 $100,000 30 .013 x $100,000 x30 =$39,000
What actions has the City of Dublin taken?
The City of Dublin provides two retirement benefit plans, the City’s pension plan and retiree health care.
Both plans have unfunded liabilities and are long-term liabilities for the City. The following is a list of
actions taken by the City and City Staff to address them:
Retiree Health (OPEB):
Fully funded annual retirement contribution (ARC). In FY 2015-16 Dublin had the highest OPEB
funding percentage in all of Alameda County (Note: Most cities institute a pay-as-you-go
approach to OPEB funding (i.e not setting funds aside). Dublin fully funds the OPEB ARC to help
ensure future benefits are funded.
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Beginning January 1, 2016 all new employee receive the minimum OPEB benefit of $125/month
compared to $1,680/month. Projected savings is $4.4 million over 15 years.
Pre-funded additional $1,000,000 in FY 2015-16, saving $120,000 per year.
CALPERs Pension:
Shifted 7% of the City’s annual pension costs to the employees – saving approximately $700k
annually.
Implemented PEPRA (State Law), reducing pension benefits for new PERS members. It is
estimated that within 20 years of implementation, all active employees will be PEPRA members.
Status Classic PEPRA
Active 80 11
Transferred 47 0
Separated 34 1
Retired 71 0
Total 232 12
Budgeted for lump sum payments against unfunded liabilities (in addition to fully funding the
annual required contribution):
o FY 2015-16 - $250,000, FY 2016-17 - $750,000, FY 2017-18 - $1,000,000.
Created Post-Employment Benefits Trust Program with Public Agency Retirement Services
(PARS) to Pre-Fund Pension Obligations. This allows for greater interest earnings and acts as
protection against potential future budget hits. Any assets invested with this new trust count
against the City’s unfunded liability.
City of San Diego
In 2012 the City of San Diego placed Measure B on the ballot which would create a dual pension system,
in which all new hires would be placed into a new “401 (k) – style” plan, while current members would
remain in the “classic pension” system. Coming out of the great recession left many cities hanging on a
thread trying to balance budgets while seeing pension obligation continue to increase, it was this that
prompted the City of San Diego to act. The measure ultimately passed, was implemented while the City
has simultaneously been defending the Measure in court.
Epilogue
During the time City Staff was writing this paper a court decision was handed down by the State
Appellate Court which found in favor of the City of San Diego and their hybrid retirement system, this
was seen by many as an opening for other municipalities to create similar systems. The case will be
appealed to the State Supreme Court, which many believe will serve as the first test case for cities to
follow to create plans similar to San Diego. How the case will play out at that level is unknown, but what
is known is under the current law San Diego, itself is an outlier, as mentioned above. San Diego is a
charter city, with a retirement system that was created independently of the State’s 1937 Act to allow
counties to create a retirement system similar to “CalPERs” and therefore have different laws pertaining
what that system can or cannot do. Current law as applied to CALPERs cities states that cities/counties
could not independently create a hybrid system, this could only be done by the State Legislator or
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possibly by a Statewide ballot. The State did look into creating the ability for agencies to create a hybrid
system, but this was ultimately not included in the law that would become known as CALPEPRA.
Individual citizens in the past 2016 election attempted to get statewide ballot measures placed, but
ultimately were not able to.
San Diego was not alone in their attempt to create a hybrid plan. Many cities have looked into the
possibility. Around the same time, Ventura County attempted to take a similar measure but was blocked
by a court decision.
Items for Consideration
This option is not feasible under current law. Staff is providing this as an informational item.
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E-4: Across the Board Reductions (1-5%)
Overview
The Task Force is exploring the impact of potential tiered cuts to all operating departments. Please note
that any across the board reduction would include a reduction to the maintenance (MCE) budget and,
therefore (E-4) Across the Board Reduction and (E-2) Decrease Park Maintenance Costs cannot be
considered as separate savings.
The FY 2017-18 General Fund operating budget is $74,786,921. Assuming all things being equal, if every
department were to make a 1% - 5% reduction to their budget, the resulting savings would be:
Operating
Budget (Total) 1% 2% 3% 4% 5%
$74,786,920 747,869 1,495,738 2,243,608 2,991,477 3,3739,346
Due to Dublin’s unique set-up, many of the services and associated costs are contracted out including
Public Safety, the City’s biggest expense. Therefore an across the board reduction to all departments is
not possible and in some cases not practical. Reduction calculations should exclude Public Safety.
Operating Budget
(w/o Public Safety) 1% 2% 3% 4% 5%
$41,101,137 411,011 822,022 1,233,034 1,644,045 2,055,057
The City has three revenue generating Departments: Community Development, Parks and Community
Services and Public Works. While each of these departments has the availability to cut costs, because
they do generate revenue they, as a general rule, would not want to cut a cost that is revenue off set. To
capture this, all costs that have revenue off-sets should be removed from the calculation.
Operating Budget
(w/o Public Safety
or revenue offsets)
1% 2% 3% 4% 5%
$25,713,915 257,139 514,278 771,417 1,028,556 1,285,695
The remaining cost cuts would be borne by supporting departments. Preliminarily, should departments
need to cut 1% or 2% from their budgets, this could be absorbed without reducing staff. Higher than 3%
departmental reductions would require a reduction in Staff.
Items for Consideration
How could a tiered cost-cutting approach be used in actuality?
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N-1: Downtown Renovation
Overview
The City Council set aside $1 million in a General Fund reserve for Downtown Public Improvement
projects. To date, the city has spent a portion of funds on Amador Plaza pedestrian improvements and
Downtown Wi-Fi access.
The City Council recently approved a consultant to being work on a Downtown Streetscape Master Plan.
Funding for the consultant will come from this General Fund reserve. The costs associated with the
public improvements will come from community benefit payments as a result of the Downtown Specific
Plan Development Pool.
Items for Consideration
Recommend reallocating the remaining reserve funds.
Consider alternate uses of/ongoing contributions to this reserve.
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N-2: Implement Parking Meters/Enhance Parking Fine Enforcement
Overview
The City currently does not have parking meters. Parking violation enforcement is currently undertaken
by the Dublin Police. In FY 2017-18 the City received $47,942.50 in Parking fines.
For comparison: the City of Walnut Creek operates a Downtown Parking and Enhancement Enterprise
Fund. All funding is used for operations, parking structure improvements and downtown enhancements.
Includes operations of 1,500 parking meters, 22 city parking lots and garages and the downtown trolley.
Operating Expenditures* $5,353,404
Operating Revenues $5,687,534
+/- $ 334,130
*Includes depreciation of $606,042
Items for Consideration
Staff is providing this as an informational item.
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P-1: Plan for Appropriate Police Services Growth/ P-2: Consider Non-Sworn Support
Overview
As part of the FY 2017-18 Budget, the City of Dublin added two Deputies to the Dublin Police Services,
bring the total allocated positions to 63.
City Support Staff 4
Contracted Positions 59
With the addition of the 2 deputies, the projected General Fund cost for Dublin Police Services over the
next 8 years is:
FY 2017-18 FY 2018-19 FY 2019-20 FY 2020-21
Police Contract 18,259,770 19,333,784 20,397,142 21,518,985
City Support 2,048,625 2,110,084 2,173,386 2,238,588
Total 20,308,395 21,443,868 22,570,528 23,757,573
FY 2021-22 FY 2022-23 FY 2023-24 FY 2024-25
Police Contract 22,702,529 23,951,168 25,268,482 26,658,249
City Support 2,305,745 2,374,918 2,446,165 2,519,550
Total 25,008,275 26,326,086 27,714,648 29,177,799
All costs have been included into the City’s Forecast
The costs are based on the following assumptions
No new staff being added
Contract costs increasing 5.9% in FY 2018-19 and 5.5% annually beginning FY 2019-20
Support staff costs increasing 3% annually
In addition to the projected costs the City has set aside an additional $1 million in a General Fund
Reserve to provide future funding of four officers.
Non-Sworn Support
The City currently does not have Reserve Police or Volunteer Police, although the Sheriff’s Department
does utilize Non-Sworn support at various Dublin events.
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Items for Consideration
Staff is providing this as an informational item.
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P-3 – Realign Reserve Needs
Overview
The Governmental Accounting Standards Boards Statement No. 54 (GASB 54) requires fund balance (City
Reserves) to be classified into different categories depending on the extent to which the use of the
resources is constrained for specific purposes.
Non-Spendable – amounts that cannot be spent because they are either (a) not in spendable form, or
(b) legally or contractually required to be maintained.
Restricted – amounts with constraints placed on the use of the resource which are either (a) externally
imposed by creditors, contributors, or laws and regulations of other agencies or (b) imposed by law
through constitutional provisions or enabling legislation.
Committed – amounts that can only be used for specific purposes pursuant to formal action of the
agency’s governing body.
Assigned – amounts that are constrained by the governing body’s intent to be used for specific
purposes, but are neither restricted nor committed.
Unassigned – used by General Fund for residual classification of positive funds.
The following is a summary of the estimated amounts the City’s will have in each of the Reserve
categories.
Type Amount
Non-Spendable $199,943
Restricted $639,000
Committed $32,825,059
Assigned $43,337,733
Unassigned $33,333,200
Total $110,334,935
Reserves of Note
Catastrophic Facility/Infrastructure Loss & City Business Recovery – City Council target is 15% of the
reported book value of the City-owned buildings. ($11,368,531)
Unassigned for Cash Flow Purposes – Should have a minimum equal to two months of budgeted
operating expenditures with a goal to achieve a maximum of four months. ($35,530,554 – 4 months)
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Allocation of additional residual resources. After maintaining the minimum level of unassigned cash-flow
funding, additional resources shall be allocated as follows – a) 50% to Pension and Other Post-
Employment Benefits; b) 50% to Non-Streets CIP Reserve.
Since the great recession the City’s General Fund reserves have grown 72% from $64 million to $110
million. This growth is not sustainable and as such the City has worked to strategically set aside cash
flow surpluses into reserves that address the City’s current and future liabilities, such as retirement, but
also includes funding for known replacement of City assets and future projects. In addition, the City has
used the surpluses to fund an economic uncertainty reserve as well as setting funds aside for City costs
as development slows down.
Items for Consideration
With the exception of the Non-Spendable and Restricted funds plus the reserves that require a
minimum level of funding, the Task Force can recommend realigning the reserves.
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P-4: Tiered Budget Response Based on Forecast/P-6: Establish Base Year with Annual Inflation
Thereafter
Overview
The following is a high level overview of the City’s Budget process.
1. The City utilizes a baseline budget to start the budget process, in the current year adjusted budget
becomes the new budget. The budget is then adjusted based on the following:
Salary and Benefit increases
Projected contractor workload
Inflationary Factors – (i.e. increase in utility costs)
Contract proposals (Public Safety and MCE)
2. Next City Council initiatives and priorities are included. This can result in a myriad of increases,
(staffing – adding a planner or contracted services – adding a deputy)
3. Departments are then able to request additional funds theat can include both one-time costs and/or
on-going costs.
The City’s current practice for budgeting does not include any single inflationary factor. The Urban
Consumers Price index for the San Francisco area has increased by an average of 2.8% over the past five
years, while City revenues has increased by approximately 5.0%.
Within the Budget Document presents all new costs as well as a detailed description of all the
assumptions and increase/decreases in costs and revenue are provided
Items for Consideration – P-4
Recommend a tiered budget Policy Statement where actions should be taken when benchmarks are hit.
Actions would correlate with the severity of the benchmarks hit.
Items for Consideration – P-6
Recommend the City tie budget increases to a general inflationary factor.
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P-5 – Require Budget offsets for new/increased services
Overview
The City currently does not require new costs to be offset by the reduction of costs in another area. The
City does ensure funding is currently available for any new costs and also incorporates those cost into
the City’s 10-year forecast. The effects of the additional cost in the years in which the City is running a
deficit play a large role in determining whether a new cost is brought forward to the City Council. An
example of this can be seen in the City’s hiring of limited term staff when filling vacancies and the use of
contractors instead of adding City staff.
Items for Consideration
Recommend a Policy Statement requiring new costs are offset with costs reduction.
Recommend a Policy Statement requiring that future cost of new/increased services are clearly
identified for the Council in Staff Reports and the Budget.