May 21 2019

Piedmont Budget Advisory & Financial Planning Committee

Thursday, May 23, 2019

6:00 p.m.  

Emergency Operations Center, Police Department, 403 Highland Avenue

The meeting is open to the public. The meeting will not be broadcast or recorded.

Regular Agenda

1. Update on FY 18-19 General Fund Revenue and Expenditures: Projected Actual vs Budget
2. Overview of FY 19-20 Budget
3. Review of Ten Year Projections and Long Term Pension and General Fund Projections
4. Review of Facilities Maintenance Fund Projections
5. Discuss FY 18-19 Year End General Fund Transfers
6. Discuss the Process for Reviewing Parcel Tax Renewal

Meeting back up materials have not been publicly distributed. 

The City Council on May 20, 2019 held the first of the two Public Hearings on the FY 2019-20 Budget.  There were no comments from the public at that Hearing.

Presentation by Finance Director Michael Szczech at the May 20, 2019 Council Public Hearing.  >Budget_Council_MTG_May 20_2019_PP

Contacts and Members of the Piedmont Budget Advisory and Financial Planning Committee

Roster *

Council Liaison: Mayor Robert McBain – rmcbain@piedmont.ca.gov – (VM) 420-3048
Staff Liaison: Finance Director Michael Szczech – mszczech@piedmont.ca.gov – (W) 420-3045

Committee Members:

Cathie Geddeis

Bill Hosler

Deborah Leland

Christina Paul

Maya Rath

Michael Reese

Frank Ryan

Alternate:

Chris Kwei

*Updated: May 22, 2019

May 18 2019

May 20, 2019 – City Council consideration.

The original concept of funding a School Resource Officer (SRO) to accomplish the goals and objectives of the grant was fully supported by the Piedmont Unified School District (PUSD) Superintendent. Significant public concern arose during the public process of bringing the matter of an SRO program, which would have been “housed” on the school campuses, to the School Board. The concerns were primarily focused on the SRO being armed on campus, a concern about the criminalization for school disciplinary issues, concern over possible targeting of minority students, and the lack of a Health Educator component aligned with the school districts strategic plan.

On February 24, 2019, the PUSD Board of Education voted 4-1 against the SRO model where the position would be housed on a campus. Board President Amal Smith provided direction to Superintendent Booker to continue discussions with Chief Bowers to determine the feasibility of an alternative model which addressed the concerns raised. Acknowledging the concerns and also understanding the challenges and opportunities which exist, Chief Bowers in collaboration with Superintendent Booker agreed to propose the following modifications:

• Instead of an SRO, the Department would establish a Juvenile Officer position which would be “housed” within the police department rather than on the PUSD campus.

On May 8, 2019, the PUSD Board of Education met to consider acceptance of the grant funds available through the modification. Superintendent Booker presented a 2-year plan which contained specific goals and accompanying actions to accomplish the goals (see Attachment #4). The plan included several actions which would be implemented in partnership and collaboration with the police department and specifically, the Juvenile Officer.

Examples of the specific actions include:

• The establishment of a diversion program for youth caught vaping, using drugs or alcohol on campus

• Analysis and implementation of vaping mitigation efforts such as possibly installing sensors which detect when someone is vaping

• Partner in the delivery of classroom lessons identified to meet the California Health Standards in PUSD

Read the full report for the May 20, 2019 Council meeting by clicking below:

05/20/19 – Consideration of the Acceptance of a State of California Tobacco Grant to Fund a Juvenile Officer in the Police Department for Three Years in Cooperation with the Piedmont Unified School District

For questions, contact Jeremy Bowers, Chief of Police Piedmont Police Department 403 Highland Avenue Piedmont, CA 94611 (510)420-3010 jbowers@piedmont.ca.gov

READ the entire agenda by clicking below:

http://www.ci.piedmont.ca.us/html/govern/agendas/2019-05-20.pdf

May 18 2019

ECONOMIC FACTORS AND NEXT BUDGET 

General Fund

Over 60 percent of the City’s general revenue sources are property related. One of the critical sources of General Fund revenue is the voter approved parcel tax which represents approximately 7% of the General Fund revenues and provides discretionary funding to maintain essential services.

In November 2016, Piedmont voters approved a four year extension and increase of the parcel tax, which will run from July 1, 2017 through June 30, 2021. The additional funds will assist with facilities maintenance and the modernization of information technology systems.

Another critical source of General Fund revenue is the real property transfer tax, which is realized when homes are sold. During this fiscal year, real property transfer tax represents approximately 12% of General Fund revenues, the same as compared to last fiscal year. Real property transfer tax is an area to be monitored as tax receipts will fluctuate as they are dependent on the strength of the real estate market in Piedmont.

In FY 2017-18, revenues in excess of the budgeted amount was transferred to the Facilities Maintenance and the Pension Rate Stabilization Funds.

The City’s salary and benefit costs represent approximately 69% of the General Fund and the employee agreements from 2017 provided for salary increases, but required employees to continue contribution to pension and medical costs.

Sewer Fund

On August 4, 2014, the United States Environmental Protection Agency (EPA) issuing a negotiated Consent Decree (CD). The CD is intended to provide an expanded period of time (21 years) to allow the City to rehabilitate the sewer systems in order to substantially reduce the amount of infiltration and inflow (I&I) in the EBMUD system.

The City restarted Phase V preliminary work and has completed the 100% design documents and has submitted State Water Resources Control Board (SWRCB) loan documents since the State provides funding with low interest rates. The SWRCB granted the loan and construction began in the summer of 2017 and was completed in the fall of 2018.

READ the entire Audit by clicking below:

05/20/19 – Receipt of the FY 2017-2018 Audited Financial Statements

READ the May 20, 2019 agenda by clicking below:

http://www.ci.piedmont.ca.us/html/govern/agendas/2019-05-20.pdf

May 18 2019

General Fund and Sewer Taxes along with fees proposed to move upward.

The City Charter requires that a public hearing be held prior to adoption of the budget, the levy of the Municipal Services Special Tax, and the proposed levy for the Special Municipal Sewer Tax. This is the first of two scheduled public hearings, with the second hearing to be held on June 3, 2019. Following the June 3, 2019 public hearing, staff is recommending that the City Council consider adoption of the budget and levying the taxes.

READ the entire budget proposal for the May 20, 2019 FY 2019-20 and view proposed taxes and fees by clicking below:

05/20/19 – PUBLIC HEARING Regarding the Proposed Budget and Fee Proposals for FY 19-20 and the Levy of the Municipal Services Tax and Sewer Tax

READ the agenda for the May 20, 2019 Council meeting by clicking below:

http://www.ci.piedmont.ca.us/html/govern/agendas/2019-05-20.pdf

May 18 2019

READ the staff report to view the plans and funding by clicking below:

05/20/19 – Consideration of a Resolution Dedicating SB-1 Funding for FY 19-20 to the Oakland Avenue Pavement Project

READ the May 20, 2019 Council agenda by clicking below:

http://www.ci.piedmont.ca.us/html/govern/agendas/2019-05-20.pdf

May 16 2019

City Administrator Paul Benoit describes Piedmont’s financial state.

“Piedmont’s financial position, year over year, can be described as ‘STABLE’ at best.”

Maintaining stability requires significant discipline and focus and we have done a good job of it. In recent years we have been working hard to look beyond simply maintaining stable services, and have been exploring opportunities to meet the needs of the future and to improve both the quality and delivery of services. Piedmont is facing, and will continue to face, significant and costly challenges that will need to be addressed – and most are related to the condition of public facilities and infrastructure.

Relative to the City Budget and our ability to make needed investments, it is important to recognize that Piedmont’s General Fund is dominated by property-related taxes, which make up nearly 70% of total revenue. Property based taxes are fairly predictable, with the exception of the Real Estate Transfer Tax.

Because City revenue is derived primarily from property related taxes we are able to make long-term budget projections with a good degree of confidence; additionally, it limits our exposure to the risks associated with significant swings in revenue, such as those experienced by cities heavily reliant on sales taxes.

On the downside we have little ability to increase revenue to the City’s General Fund in any meaningful way — absent voter-approved increases in the rate of the Municipal Services Special Tax, also known as the Parcel Tax, or in the Transfer Tax.

For these reasons, we very purposely:

  •  focus on the delivery of basic services and core programs;
  •  budget carefully and conservatively; and
  •  work diligently to safeguard our financial position by mitigating, to the extent possible, the impact of rising expenses which the City has little control over – particularly CalPERS related benefit costs which constitute an unfunded liability of just over $25 million.

On this latter point, the Council has proactively established a program of pension cost-sharing with employees and has curtailed retiree medical benefits for new hires.  These two initiatives, taken together, slowed the growth rate of our Underfunded Liabilities and will save the City millions of dollars in benefit-related expenses over the years to come.

Another significant action to buffer the effects of rising pension costs was the establishment of a Pension Rate Stabilization Fund, also known as a Section 115 Irrevocable Trust Fund, with the Public Agency Retirement Services – or PARS.

To date, the City Council has approved a total transfer of $2.75 million to PARS from the General Fund. One key benefit of this initiative is that funds deposited with PARS may achieve higher earnings due to less restrictive investment policies than apply to City funds invested in Local Agency Investment Fund.

As a result of the CalPERS decision to reduce the planned rate of return (Discount Rate), the City’s annual pension contributions are projected to increase from the current $2.2 million (7.5% of City revenue) to $5.5 million (13.3 % of City revenue) by 2029. This equates to a cost increase of approximately 132%, while City revenue over this same 10 year period is estimated to increase by only 35%.

As soon as 2023, and potentially continuing through 2031, the increase in mandatory pension contributions is projected to result in General Fund expenses exceeding revenue. When we face these net-negative revenue years, the City will be in a position to stabilize the General Fund by drawing down on its PARS account to pay pension costs.

Overall, prior City Councils and the current Council, working together with staff, have applied wisdom in managing the City’s limited financial resources. Piedmont now has a modest Reserve of just under $5 million, which represents 17% of our operating budget. Absent a catastrophic event, that amount should be of significant help in responding to an emergency or addressing unforeseen circumstances.

While there are no established policies to guide what constitutes “reasonable”, the reserve for the City of Piedmont is restricted by the City Charter to no more than 25% of the Operating Budget.

To put our City’s reserve in perspective, at the end of last fiscal year Emeryville, with a population similar to Piedmont’s, maintained a reserve of $30.3 million, which equates to approximately 76% of their General Fund; Albany’s was $8.8 million, which is 45% of their General Fund; Berkeley had a reserve of $84 million or 55% of their General Fund; and Oakland’s was approximately $150 million or 24% of their General Fund.

In addition to maintaining a modest reserve, the City has been making consistent, long-needed transfers to the Facilities Maintenance and Equipment Replacement Funds, and has also made much needed investments in our IT Systems, with a goal of bringing our use of technology into the modern era.

At the start of this Fiscal Year the Equipment Replacement Fund is projected to have a balance of $2.75 million – which, assuming we continue to make the planned annual transfers from the General Fund, should be sufficient to address the schedule for equipment replacement into the future.

The Facilities Maintenance Fund is projected to have a balance at the start of the year of only $4.8 million. This amount is far short of what is required to address accessibility, life-safety, life- cycle, and efficiency issues of our city’s facilities and property.

Piedmont’s facilities, like so many of the homes in Piedmont, are old and expensive to maintain. While aesthetically pleasing, most of our facilities are in need of significant repair and renovation.

On the whole, our community facilities and infrastructure have been kept largely functional, but it is time to devote the attention and investment necessary to meet community needs, let alone current safety or accessibility standards.

  •  Miles of sidewalks and pathways are in poor condition, and our City Engineer has estimated that we could spend on the order of $11 million on sidewalk and trail repair alone.
  •  To keep the Pavement Condition Index of our streets from deteriorating will require an estimated annual paving expenditure of approximately $1.5 million – up from the current $1 million – and this is assuming a competitive bid environment. As you know, the Engineer’s estimate for the repaving of Magnolia Avenue was $1.3 million. The sole bid submitted was for $1.7 million. So, the estimated $1.5 million required to maintain the condition of our streets could actually have increased to $2 million or more.
  •  The Veterans Hall and Recreation Building are virtually in the same condition and configuration as when they were originally built 50 to 100 years ago. Bringing them to where they should be would require an estimated investment of $6 to 7 million.
  •  The Community Pool cannot remain open much longer without substantial investment. While short-term fixes may postpone the eventual closing, safety issues are significant and the pool is losing an estimated 1 million gallons of water per year via unidentified leaks. Based on the recently completed Aquatics Master Plan, the cost of a modern and safe facility that meets community needs is estimated at between $12 million and $15 million.

Our beloved City Hall has significant needs rarely seen by the public. Low, open ceilings with exposed wires, water intrusion during storms, fire safety and accessibility issues are just a few of the problems.

At times, I hear comments asserting that the City does not have the space needed to support our programs. The fact is we have the “space”. We just need to make the investment needed to address the efficiency, functionality and accessibility issues that limit program opportunities as well as use by staff, the very young, and seniors.

The bottom line fact is that many of our facilities and amenities are inefficient, have significant condition issues limiting usage, and are not where they should be relative to life, safety, and accessibility standards – let alone to where they should be for a community like Piedmont.

Like the School District’s initiatives to invest in modernizing the Elementary Schools and High School to meet 21st Century needs, it is time to apply a similar focus to improving our City facilities and infrastructure.

In recent years, under the leadership of the City Council and with the support of city staff, there has been the political and organizational will to take a fresh and realistic look at our facilities and systems and to make the initial investment needed to develop a clear understanding of the issues and the opportunities for improvement.

While we have been doing the work necessary to develop that understanding—- the reality is that the City’s financial position, in the best of times, will only support an incremental approach to completing the work that needs to be done.

Unfortunately, for many facilities, an incremental approach will not get us to where we need to be.

To summarize:

Maintaining the current condition of our street paving, addressing unsafe sidewalks and pathways, and implementing priority pedestrian and bicycle safety projects will cost an estimated $23 million.

Factoring in the Recreation Building and the basement of City Hall adds up to $7 million. To address the pool and Veterans Hall, add another $17 million. Linda Beach Park improvements are estimated to cost $7 million. Improving Coaches Field could cost up to $4 million. All together these projects total $58 million.

Looking to the future, barring a natural disaster, bringing our facilities and civic infrastructure into the 21st century will be the City’s biggest challenge and greatest opportunity for the betterment of the Piedmont community.

With attention and investment our facilities can continue to serve the community for another 100 years. Doing what has to be done will take time, focus, persistence, vision and leadership. To our good fortune, we have all the right people in place, with the right mix of vision and talent, to meet these challenges.

Paul Benoit, Piedmont City Administrator

Editors Note: Opinions expressed are those of the author.
May 13 2019

Although not listed, as such, on the agenda, the public will have a right to address the Council at their two meetings agendized for interviews and selection of Piedmont’s new City Administrator. The Council will adjourn to Closed Sessions after hearing from any public speakers addressing the appointment.  

Public discussions have not been held at Council meetings regarding the qualifications of a new City Administrator, who will be replacing retiring City Administrator Paul Benoit.  Voters recently approved Piedmont City Charter change  providing the City Administrator with sole authority over retention of Piedmont employees including the Police Chief, Fire Chief, Finance Director, Public Works Director, etc.

Special City Council Meetings

Thursday, May 16, 2019 8:15 a.m. 

Friday, May 17, 2019 11:30 a.m.

City Council Chambers, 120 Vista Avenue, Piedmont, CA

Agenda:

Call to Order
Adjourn to a Closed Session in the Conference Room

a. Public Employee Appointment – Interview of Applicants (Government Code Sec. 54957) Title: City Administrator

For additional information, contact the Piedmont City Clerk at 420-3040.

May 12 2019

On Saturday, May 18, at 10:00 a.m., the Public Works Department will host a walk on Magnolia Avenue to discuss the 47 liquidambar trees which are slated to be removed as a part of the 2018 Pavement Project.

The walk will begin at 10:00 am at the intersection of Hillside and Magnolia Avenues and will move down the length of the street. Neighbors and interested residents are invited to attend and join in conversation with city staff, the City Engineer, and the independent arborist who evaluated the trees.

When approving the 2018 Pavement Project, the City Council directed staff to, “…work with neighbors on Magnolia Avenue who are impacted by street tree removal to consider whether engineering and/or other accommodations can be made to preserve additional trees on this street.” This walk-through is being conducted to provide neighbors with an opportunity to share their feedback, which will be reviewed by staff and the City Engineer.

Below is a plan that identifies the trees reviewed in the arborist report and the trees proposed to be removed. 


For further information, contact Director of Public Works Chester Nakahara at 420-3061 or via email at cnakahara@piedmont.ca.gov.

~~~~~~~

READ the detailed staff and Arborist report on tree removal for Magnolia Avenue by clicking below:

http://www.ci.piedmont.ca.us/publicworks/docs/2019-05-01-magnolia-tree-report.pdf

May 12 2019

Recreation Commission Meeting Agenda Wednesday, May 15, 2019 7:30 p.m.

Open to the public and broadcast live.

City Council Chambers, 120 Vista Avenue, Piedmont, CA

  1. Approval of Minutes – April 25, 2019
  2. Chair’s Report
  3. Director’s Report
  4. Report from Subcommittee on Skateboarding and Scootering
  5. Update on PMS PE Court Renovation Project
  6. Update on Recreation Center Tennis Court Renovations and PRFO Fundraising
  7. Update on Capital Improvement Projects Review Committee (CIP)
  8. Update on City Website
  9. Betty C. Howard Award – June 4th 6:30pm

READ THE AGENDA, SUBCOMMITTEE REPORT, AND  PRIOR MEETING DRAFT MINUTES > May 2019 Recreation Commission Packet

May 10 2019

CIP Recommendations: Yes to improvements for Piedmont Middle School courts for pickleball usage, license plate readers at all Piedmont entrances, drinking fountain in Piedmont Main Park for dogs and people – No to Blair Park and Witter Field improvements. 

The CIP Review Committee recommendations will be discussed as part of the Piedmont Proposed FY 19-20 Budget Presentation and Workshop Saturday, May 11,  9 am Piedmont Police Department Emergency Operations Center (EOC).

CIP Review Committee recommendations with respect to the 9 new 2019-20 resident proposals can be summarized as follows:

The following 3 proposals can move forward with City Council support:

-Renovation of PMS Hard-courts
-Installation of ALPRs at Piedmont Entrances
-Installation of a drinking fountain (for humans and dogs) in Piedmont Park

The following 3 proposals are recommended as meritorious but requiring additional study from public safety and/or public works:

-Two related Wildwood Gardens proposals
-Development of a landscape triangle at Blair and Calvert Court

The following 3 proposals are determined to need direction from City Council:

 – Blair Park proposals for donated fencing and parking improvements

 – Two related Witter Field proposals

READ the agenda below for the Council Budget Work Session when the Council will consider all CIP proposals and department budgets:

http://www.ci.piedmont.ca.us/html/govern/agendas/2019-05-11_special.pdf

READ the full CIP Review Report for 2019 below:

CIPreviewreport 2019

Minutes, broadcasts, and recordings were not made of any of the CIP Review meetings.  Staff reports were not publicized. 

Recordings and broadcast will not be made of the Saturday, May 11, 2019 Council Budget Workshop held at 403 Highland Avenue in the Emergency Operations Center of the Piedmont Police Department.  The public is welcome to attend and participate.

 

READ the full staff 2019-20 Budget recommendations including fees, permits, salaries, benefits, use of City property, tax rates, personnel, etc. – http://www.ci.piedmont.ca.us/finance/budget/19-20/19-20_budget.shtml