Mar 7 2014

OPINION: Progress Is Being Made

City Council Report March 2014

by Ann Chandler, Piedmont League of Women Voters Council Observer

As we greet a new City Administrator, a new mayor, and a new Council in March 2014, we should take a moment to look back at two years of important work by the previous City Council. In November 2011, Council member John Chiang created a matrix of suggestions made by the City Council Audit Subcommittee (which had looked at the utilities undergrounding project that had gone $2 million over budget), The League of Women Voters Task Force on Governance (originally formed following the same utilities undergrounding fiasco), and the Municipal Tax Review Committee (which had concluded that the municipal services parcel tax was important but that there were many policy improvements the Council should make before asking voters to renew the parcel tax). Altogether, there were over 30 suggestions in these 3 reports, many of them overlapping.

In February 2012, John Chiang was elected mayor and the next month the City Council appointed a Budget Advisory and Financial Planning Committee (5 residents) to look at the city’s annual budget, its 5-year projections, and its funding for long-term capital projects, equipment replacement, and facilities maintenance/replacement. The committee also reviews any new commitments in excess of $250,000 in one fiscal year, comments on the Finance Director’s Mid-Year report to the Council in January, and meets again April through June each year as the budget is being finalized for the fiscal year starting in July. As approved, the committee will end on June 30, 2015 unless extended.

In April 2012, the Council rescinded its 2011 approval of the Blair Park project, which ended the suit against the City brought by Friends of Moraga Canyon. (The litigation which the City brought against two engineering companies involved in the Piedmont Hills Utilities Undergrounding is still pending.)

One of the strongest themes in the Municipal Tax Review Committee’s suggestions, taken up by the Budget Advisory and Financial Planning Committee, was a need to gain control over personnel costs, particularly the cost of fringe benefits. The first step in that direction occurred in June 2012 when the Council approved a new “Tier 2” of miscellaneous employees hired after August 3, 2012. We now have 3 Tiers of miscellaneous employees, and 3 Tiers of safety employees, meaning 6 different retirement and benefit packages. Control of personnel costs is still a large issue.

In July 2012, an Athletics Facilities Preservation Fund was established. It charges sports clubs (but not school teams) for use of city and school sports facilities. The income from this fund alone is not enough to maintain or replace athletic facilities, but creation of the fund was one step toward addressing the subject of athletic facilities preservation.

In December 2012, the City contracted with Janae Novotny, a lawyer specializing in public employee negotiations, to represent the city in all labor negotiations beginning in January, 2013. A year later the city completed four-year contracts with all bargaining groups. There were raises for the first time in four years, but also increased deductions for benefits.

In January 2013, the city started development of a long-term Facilities Maintenance Program identifying needs, cost estimates, and potential funding sources. In June the document received final approval.

It is a 5-year plan looking at what needs to be done in fiscal years 2013-2017 to sewers, sidewalks, streets, buildings, parks, fields, etc. Although flexible, the plan gives a priority to each project within each facility, and a suggested time table. The exception to this is the Aquatics Facility. Although there is a list of things that need to be done, there are no cost estimates, no potential funding sources, and no timetable, leaving one to wonder what is next for the pool.

It was also in January 2013 that the first draft of a Risk Management Policy for Major Capital Projects came before the Council. The League of Women Voters Task Force on Governance was one of the groups that had recommended this, and the Task Force and League board members made comments and written suggestions on several drafts of this policy during 2013. In January 2014, Piedmont adopted a Risk Management Policy for Major Capital Projects.

One of the suggestions of the Budget Advisory and Financial Planning Committee was that the city refinance the PERS Side Fund at a lower interest rate. Piedmont’s charter requires a vote of the people to do that. In the February 4, 2014 municipal election, the electorate gave the City Council overwhelming approval (82.6%) to refinance the Side Fund. Final discretion as to whether and when to do such a refinancing rests with the newly elected City Council.

In many ways it seems that an effort has been made to get Piedmont’s fiscal and legal house in order before proceeding with any large, creative new projects. This work has been started but not completed.

Controlling personnel costs is a long-range project, very much influenced by trends in the rest of the Bay Area and the state. But over the past two years, Mayor Chiang and City Administrator Geof Grote, both of whom left their positions in February, took these important steps to put Piedmont on the right path.

Reprinted from the Piedmont League of Women Voters bulletin,“The Voter”, with permission

Editors’ Note:  The opinions expressed are those of the author and not necessarily those of the Piedmont Civic Association.

2 Responses to “OPINION: Progress Is Being Made”

  1. Correction: The Piedmont Middle School sports program charges a facilities fee. The text below is from the PMS Sports Program Parent Handbook for 2013-2014.

    IX. FEES
    Fees are established and collected by the RD prior to the beginning of the season. Prices are set to cover the cost of uniforms, coaches, officials, equipment,transportation, and administrative overhead.

    On July 16, 2012, the Piedmont City Council adopted a Surcharge (the proceeds of which will be deposited into a dedicated fund for facility maintenance and preservation
    and replacement of athletic facilities as needed). For each sports program sign-up with a fee of $50 or higher, a surcharge will be added to the standard program fee effective with the Fall 2012 program registrations.

    Thank you for your understanding and support as we plan for future maintenance and replacement needs. If you have any questions please feel free to contact Mark
    Delventhal, Recreation Director at (510)420-3073


    Editors’ Note: Unlike some public school districts, the Piedmont Unified School District does not administer its own Middle School after school athletic programs; the Piedmont Recreation Department administers the Piedmont Middle School after school athletic programs, which includes competition with schools outside of Piedmont. The Piedmont Unified School District does not pay for the programs; the athletic participants pay fees including the surcharge to the Recreation Department.

    School districts in California are prohibited by the State Education Code from charging user fees to maintain facilities. Districts are allowed to charge user fees for one time use, such as janitorial set up and clean up.

    Following 40 + years in the Recreation Department, Mr. Delventhal has retired as Piedmont’s Recreation Director . Assistance with recreation programs can be obtained by contacting the Recreation Department at 420-3070.

  2. Progress is being made but it is important to understand how many of these reforms do not reduce costs until many years out or not at all. Piedmont has approximately 100 employees yet the cost savings achieved with Tiers 2 and 3 reforms apply only to 10% of that workforce (employees hired since August 2012). Auditors estimate that Piedmont should be contributing $0.9M per year for retiree medical costs; yet the city set aside only $0.3M last year. Many of the recommendations of the MTRC and BAFPC have been implemented, but the fundamental conclusion of both committees was that Piedmont’s fringe benefits be capped and that has yet to be achieved. If reforms are made only during contract negotiations, 4 years off now, progress toward this goal will be slow.
    Regarding capital projects, Council took up the recommendations of the Audit Committee and LWV and approved the Risk Management Policy (RMP) but its application to the Hampton Field Master Plan seems inadequate. The RMP has three core elements – thorough risk analysis, project cost accounting, and public disclosure. The potential effects of bedrock on the project seem not to have been evaluated in light of the PHUUD (Piedmont Hills Underground Utility District) cost overruns. The “determination of balance” meant to document what funds are available to proceed with a project has apparently not been prepared. And the cost escalation of the project was not included in the staff report. The RMP needs to be transparently applied to this and other projects for residents to have confidence that new capital projects are being properly managed.

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