A 20-page, close-up view of Piedmont’s fiscal health will be presented to the City Council on Monday, June 3, by its Budget Advisory and Financial Planning Committee (BAFPC).

The five-member committee, made up of Piedmont residents with diverse fiscal expertise, focused its analysis on the City’s financial outlook for the next five years, potential financial risks regarding employee healthcare and retirement costs, the Sewer Fund, and some specific steps the Council can take to save money and reduce risks.

Here are a few of the report’s highlights.

First the good news: “Overall, the City looks to be in improving financial shape,” the report states,  “recovering as expected from the recent recession, and appears able financially to continue to provide exceptional basic public services.  However,” it warns, “there are still risks facing the city in retirement costs as well as sewer replacement and operating costs that need to be addressed.”

City Employee Retirement Costs  

In an effort to reduce “uncontrollable retirement benefit costs,” the Committee recommends: 1) the Council refinance the CalPERS pension side fund and negotiate a lower corresponding cap from City employees; 2) compensate employees in ways that do not contribute to their retirement costs, such as giving bonuses instead of salary increases; 3) continue to bargain for caps and sharing on pension retirement costs with new and current employees; 4) reduce current and retiree healthcare cost coverage to 75% of costs or lower, down from 100%, extend vesting of retiree healthcare benefits to 20 years instead of current 5 years;  and investigate putting more burden on “Tier 1 retirement employees” (current, long-time employees), if possible.

The report notes the importance of controlling these costs in light of the fact that, “The City faces the likelihood of substantial turnover in the next 5-10 years, as 23 employees have over 20 years of service and an additional 28 have over 10 years of service. We estimate that approximately 40 of the City employees are likely to retire over the next 10 years, with a significant portion in the next 5 years.”

Aquatics

The Committee notes that in FY12/13, expenses of the City-owned pool exceeded revenues by $158,000.  Based on the FY13/14 aquatics budget, the Committee projects pool expenses will cost Piedmont taxpayers $200,000 per year in the next 5 years.  The Committee also points out that the School District currently does not pay for pool use, and the private Piedmont Swim Team pays a below-market rate for pool use of about $17,000 per year.  The Committee “recommends that, regardless of the policy with respect to the School District, proper accounting should reflect the capital/operational costs per user which includes the School District usage as a footnote to the budget.”

Sewer Fund

The Committee recommends the City restart phased sewer replacement of the remaining 93,000 feet of Piedmont’s mainline sewer in order to save substantial costs over the currently planned small-scale, emergency repair/replacement strategy. Committee members unanimously recommend obtaining a low-interest State loan to restart the phased rehab and investigate potential funding sources — either through a temporary sewer surcharge measure or borrowing from the City’s General Fund — in order to address the projected temporary shortfall in the Sewer Fund beginning in 2016-17.

The Committee believes that the total cost to the City of a “logically phased rehabilitation program” would be lower than making incremental repairs because of 1) lower cost per lineal foot of larger-scale projects;  2) low interest State loans, currently at 1% interest; 3) lower risk of costs escalating if the rehab is done sooner rather than over decades; and 4) less risk of not meeting EPA regulatory requirements.

Conclusion

The report concludes that the City is in a “relatively strong financial position compared to the recent past.  However, the risks to the city still exist and Council must stay vigilant to find ways to adequately compensate employees in a controllable way and continue to work to improve the stability of the City’s finances.”

BAFPC REPORT

At the City Council 2013-14 Budget Work Session on May 11, information and questions were presented.

During the public forum, Tim Rood asked when Piedmont Recreational Facilities Organization (PRFO) was going to repay the City for the $125,000 expenses promised in regard to Blair Park.  He also wanted to know when the City planned to spend its $500,000 portion of the Measure WW Park Bond funds.   And he inquired when the Piedmont Hills Utilities Undergrounding District (PHUUD) Board was going to pay their pledged amount of $1o0,000 to the City.  The City had contracted for the undergrounding project and allowed the risk and unexpected cost of  approximately $2.5 million to fall to all City taxpayers rather than the property owners in the PHUUD benefiting from the project.

City Administrator Geoff Grote, in his overview of the budget, emphasized the generally strong financial condition of the City.  Much of the City’s improved fiscal condition can be attributed to increased property tax revenues, the passage of the City parcel tax measure, and revenues from the property transfer tax.  As properties change hands, the City reaps a benefit of new valuations of property, plus the transfer tax.

The Police Department is proposing a new civilian position to handle administrative and Information Technology (IT) functions.  On June 3, a comprehensive Facilities Maintenance Inventory and Implementation Plan is due and will allow assessment of future needs.

Employee benefits and compensation costs continue to require control and monitoring. The City Sewer Fund, long a source of  funding for the Public Works Department and implementation of federally required improvements related to water quality, is experiencing a decreasing balance.  More information on the fund will be developed to allow the Council to consider further steps to remain in compliance with federal laws.

During the budget review, the Council directed staff to provide the following information:

• Recreation Department — include on a City Council agenda for next October, a report detailing: the impacts of the proposed increases in aquatic fees;  swim lesson revenue; a breakdown of aquatic City Council Budget Work Session related expenses; the cost associated with having the pool open for so many hours/days during the year; and how many lap swimmers utilize the pool on a regular basis.  The Schoolmates program does not pay for itself, consequently consideration will be given to increasing the hourly charge to users.

• Police Department  — consider for next fiscal year (FY 14-15) increasing Animal Control Officer fees for the City of Emeryville.

• Fire Department  – determine the cost effectiveness of modifying the
Department’s apparatus bay doors and driveway in order to increase the number of manufacturers that would be able to supply a fire ladder truck to the City and, as a consequence, generate more and potentially lower bids for fire truck purchase.  The fire house doors are lower than standard thus requiring custom built ladder trucks.

• Public Works Department – provide the number of miles of paved streets in town and how many of these streets were paved over the last 10 years.  Residents have frequently wondered when streets in disrepair would be repaved.

• Administration-- provide: historical data regarding full and parttime employee positions; a list of staffing positions that are currently vacant; cost estimates for: a City “mail-in ballot” process for municipal elections; and consolidating the City’s municipal election with the State’s general election; check with the County Registrar’s office if the City could have both a “mail-in” ballot process along with one polling place within the City.

• Non-Departmental — determine if: the proposed 5% increase in Workers Comp. Insurance premiums is sufficient for FY 13-14; whether the City has the option of being self-insured for Unemployment Insurance; and re-examine if the FY 11/12 figure
of $352,841 for Library is correct (page 2-a under Tab 1)

The Council appointed Budget Advisory and Financial Planning Committee (BAFPC) has held several meetings to examine budget details.   CalPERS side fund, sewer fund, license plate readers, and other issues are being examined.  The BAFPC will make a formal recommendation to the City Council to be considered at the budget public hearings.  The Council’s first hearing is scheduled for June 3 and second June 17, at which time the budget is expected to be approved.

Comments on budget considerations can be sent to the City Council at:

Or email the entire City Council via the City Clerk at: tulloch@ci.piedmont.ca.us

Click here to view the proposed budget.

Learn How the Money Comes and Goes-

The five-member Budget Advisory and Financial Planning Committee (BAFPC) will hold its third meeting on Wednesday, May 8, at 7:00 p.m. in the Police Department Emergency Operations Center to continue their analysis of City revenues, expenditures and five-year financial planning.

May 8, BAFPC meeting:

1. Presentations on refinancing the Side Fund
2. Update on the Sewer Fund

The BAFPC will then meet jointly with the Capital Improvement Program (CIP) Committee on Thursday, May 9 at 7:00 p.m. in the Council Chambers, City Hall to discuss the proposed installation of License Plate Readers at City access points.

On Saturday, May 11, at 9:00 a.m. the City Council will hold its annual budget work session in the Police Department Emergency Operations Center.

All of the meetings are open to the public. However, meetings held in the Police Emergency Room historically have not been broadcast on KCOM or recorded. Those interested may attend and participate.

These tests involve blowing harmless smoke into parts of the City sanitary sewer system to find damage, improper connections, and where unwanted storm water may be entering the City’s sanitary sewer system. As a result, smoke may be seen coming from roof vents, building foundations, catch basins, clean-outs, downspouts, broken sewer laterals or manhole covers. The smoke will not enter your home or business, if it is properly plumbed, vented, and the water traps contain water.

Click to read the Notice and Map regarding smoke testing.

For further information contact the Piedmont Public Works Department at 510/420-3070.

The report and recommendations from the Budget Advisory and Financial Planning Committee (BAFPC) look at the City’s primary financial risks and ways to reduce them.  The report will be presented to the City Council on Monday, June 4.    The nine recommendations, covering the Sewer Fund, Pay, Pensions and Benefits, Capital Transfers and Other Items, can be read below.

Piedmont General Fund no longer has annual surpluses -

A few short years ago, Piedmont enjoyed a $4.5 million annual operating budget surplus.  With expenses of $13.5 million and revenues of $18 million, the City’s expenses represented only 75% of revenues in FY 05-06.  It enjoyed a surplus that was 25% of its budget.  City monies, not just private funds, were allocated annually to capital improvement projects such as the purchase of 801 Magnolia Avenue, installing play fields, and more. > Click to read more…

What is fact?   What is fiction?  -  

Without a commonly shared base of information on Piedmont’s sewer requirements, community discussion becomes difficult and informed decisions cannot be made by voters or Council members.  In the interest of creating a shared factual basis within the community on sewer issues, excerpts from the Piedmont Post article of February 15, 2012 are followed by facts.

_________

1. Intended Purpose of the Sewer Surcharge?
2. The EPA Mandate
3. The Vactor Truck Required – Yes or No?
4. Enough Money to do Mains Replacement:  Now or Future
5. Sewer Work Halted?
6. Budget Authority:  First Yes, Then No
7. Sewer Mains Remaining:  33% or 40%?
8. Possible EPA Waivers?
9. MTRC Sewer Recommendation – Why Not Unanimous?
10. Use of Sewer Fund Revenues
11. The History of Sewer Replacement
12. A Choice of Future Time Frames

> Click to read more…

The following open letter to the community was sent to the Piedmont Civic Association and the City Council on March 16, 2011 -

Dear Mayor, Vice Mayor and Council Members:

Re: Draft Sewer Asset Management Implementation Plan (AMIP) on City Council’s April 16, 2012 Meeting Agenda

This letter contains my detailed written comments on the City Council Agenda Report and attached AMIP for the Council’s Monday, April 16, 2012 meeting. (City Council Agenda Report from Chester Nakahara, Public Works Director, “Subject: Review an advanced copy of City’s Sewer Asset Management Implementation Plan prepared in response to the EPA [sic] Stipulated Order Compliance Requirement, Section XI, Subsection 73”. (The subject Stipulated Order is not, as incorrectly stated in the agenda report, an “EPA Stipulated Order”, but it is, instead, a Stipulated Order for Preliminary Relief > Click to read more…

Monday, April 16 City Council Meeting -

The City Council will consider a variety of issues on their Monday, April 16 meeting starting a 7:30 p.m. in the Council Chambers, 120 Vista Avenue.

The Council will review Piedmont’s newly revised Draft Sanitary Sewer Asset Implementation Plan dated 4/16/12, which is due to be submitted to the EPA in July 2012.  It will lay out Piedmont’s plan for rehabilitating, monitoring, and reporting on the city’s sewers during the next 10 year period. It must include new reporting and monitoring requirements (at a cost of $164,000 per year). The plan does not require the replacement of all sewer mains within the ten year plan period. > Click to read more…

 Measure A Opponent Explains its Defeat -

The Measure A Sewer Surcharge Tax failed by the largest margin anyone can recall. Remarkably, no one at the City and not a single Measure A proponent has ever publicly countered the objections that led to the voters’ rejection.

> Click to read more…