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HomeMy WebLinkAbout09.22.22 Finance Committee Agenda PacketCity Council Finance Committee Agenda September 22, 2022 Page 1 SARATOGA CITY COUNCIL FINANCE COMMITTEE September 22, 2022 3:30 P.M. REGULAR MEETING Teleconference/Public Participation Information to Mitigate the Spread of COVID-19 This meeting will be held entirely by teleconference. All members of the Committee and staff will only participate via the Zoom platform using the process described below. The meeting is being conducted pursuant to recent amendments to the teleconference rules required by the Ralph M. Brown Act allowing teleconferencing during a proclaimed state of emergency when local officials have recommended social distancing. The purpose of the amendments is to provide the safest environment for the public, elected officials, and staff while allowing for continued operation of the government and public participation during the COVID-19 pandemic. Members of the public can view and participate in the meeting by: 1. Using the Zoom website https://us02web.zoom.us/j/83183289258 Webinar ID: 831 8328 9258 and raising their hand to speak on an agenda item when directed by the Mayor. 2. Calling 1.669.900.6833 or 1.408.638.0968 and pressing *9 to raise their hand to speak on an agenda item when directed by the Mayor. The public will not be able to participate in the meeting in person. Written Communication Members of the public can send written comments prior to the meeting by commenting online at www.saratoga.ca.us/fc prior to the start of the meeting. These emails will be provided to the members of the Council and will become part of the official record of the meeting. Public Comment Members of the public may comment on any item for up to three (3) minutes. The amount of time for public comment may be reduced by the Mayor. Meeting Recording Information In accordance with the Saratoga City Council’s Meeting Recording Policy, the City Council Finance Committee Meetings are recorded and made available to the public following the meeting on the City website. City Council Finance Committee Agenda September 22, 2022 Page 2 CALL TO ORDER ROLL CALL ORAL COMMUNICATIONS ON NON-AGENDIZED ITEMS Any member of the public may address the Committee about any matter not on the agenda for this meeting for up to three (3) minutes. The law generally prohibits the Committee from discussing or taking action on such items. The Committee may choose to place the topic on a future agenda. AGENDA ITEMS 1. Finance Committee Minutes Recommended Action: Review and approve the minutes for the May 26, 2022 meeting Finance Committee Minutes 2. 2022 Comprehensive Fee Study Project Overview Recommended Action: Receive Report – No action required Comprehensive Fee Study Overview 3. 2022 Finance Committee Meeting Schedule & Topics Recommended Action: Review meeting schedule and agenda topics Finance Committee Meeting Schedule & Topics 4. 2023-24 Budget Indicators Recommended Action: Receive Report – No Action required 2023-24 Budget Indicators ADJOURNMENT CERTIFICATE OF POSTING OF THE AGENDA, DISTRIBUTION OF THE AGENDA PACKET, COMPLIANCE WITH AMERICANS WITH DISABILITIES ACT I, Gina Scott, Administrative Analyst for the City of Saratoga, declare that the foregoing agenda for the meeting of the City Council Finance Committee of the City of Saratoga was posted and available for public review on September 19, 2022, at the City of Saratoga, 13777 Fruitvale Ave., Saratoga, CA 95070, and on the City’s website at www.saratoga.ca.us. Signed this 19th day of September 2022 at Saratoga, California. City Council Finance Committee Agenda September 22, 2022 Page 3 Gina Scott, Administrative Analyst In accordance with the Ralph M. Brown Act, copies of the staff reports and other materials provided to the Committee by City staff in connection with this agenda, copies of materials distributed to the Committee concurrently with the posting of the agenda, and materials distributed to the Committee by staff after the posting of the agenda are available on the City website at www.saratoga.ca.us and are available for review in the office of the City Clerk at 13777 Fruitvale Avenue, Saratoga, California. In compliance with the Americans with Disabilities Act and the Governor’s Executive Order, if you need assistance to participate in this meeting, please contact the City Clerk at bavrit@saratoga.ca.us or call 408.868.1216 as soon as possible before the meeting. The City will use its best efforts to provide reasonable accommodations to provide as much accessibility as possible while also maintaining public safety. [28 CFR 35.102-35.104 ADA title II] City Council Finance Committee Minutes – May 26, 2022 Page 1 MINUTES SARATOGA CITY COUNCIL FINANCE COMMITTEE REGULAR MEETING MAY 26, 2022 CALL TO ORDER The meeting was called to order at 3:30 p.m. via Zoom. ROLL CALL Present: Mayor Tina Walia, Vice Mayor Kookie Fitzsimmons Also Present: James Lindsay, City Manager Nick Pegueros, Administrative Services Director Agnes Pabis, Finance Manager Gina Scott, Administrative Analyst ORAL COMMUNICATIONS ON NON-AGENDIZED ITEMS None AGENDA ITEMS 1. Finance Committee Minutes Recommended Action: Review and approve the minutes for the April 28, 2022 meeting. FITZSIMMONS/WALIA MOVED TO APPROVE THE MINUTES FOR THE APRIL 28, 2022 MEETING. MOTION PASSED BY VERBAL ROLL CALL. AYES: FITZSIMMONS, WALIA. NOES: NONE. ABSTAIN: NONE. 2. Fiscal Year 2023 Enabling Resolutions Recommended Action: Receive reports. Administrative Services Director Nick Pegueros presented a review of the four enabling resolutions expected to go to City Council on June 15, 2022. 3. Summer Meeting Schedule Recommended Action: Approve meeting schedule for the summer months. Administrative Services Director Nick Pegueros presented the option of canceling the summer Finance Committee meetings. 3 City Council Finance Committee Minutes – May 26, 2022 Page 2 FITZSIMMONS/WALIA MOVED TO APPROVE A SUMMER MEETING SCHEDULE CANCELING THE FINANCE COMMITTEE MEETINGS FOR JUNE, JULY, AND AUGUST 2022. MOTION PASSED BY VERBAL ROLL CALL. AYES: FITZSIMMONS, WALIA. NOES: NONE. ADJOURNMENT The meeting was adjourned at 3:40 p.m. Minutes respectfully submitted: Gina Scott, Administrative Analyst City of Saratoga 4 ADMINISTRATIVE SERVICES Memorandum To: City Council Finance Committee From: Nick Pegueros Date: September 22, 2022 Subject: 2022 Comprehensive Fee Schedule Project Overview At their September 7th meeting, City Council approved the staff’s recommendation to select Matrix Consulting for the City’s 2022 Comprehensive Fee Study project. The purpose of the study is to document the full cost to perform services listed in our current fee schedule and identify any opportunities to increase or expand fee-based cost recovery. Matrix will give the Finance Committee a presentation on their methodology, project scope, and preliminary project timeline. 5 ADMINISTRATIVE SERVICES Memorandum To: City Council Finance Committee From: Nick Pegueros Date: September 22, 2022 Subject: Finance Committee’s Meeting Schedule and Agenda Topics City staff seeks Finance Committee direction on meeting dates and agenda items through the end of 2022. Our proposal, listed below, corresponds with work underway in the finance division. October 27, 2022: • Presentation by actuarial firm Foster & Foster (formerly Bartel & Associates) – Implementation of Governmental Accounting Standards Board Statement No. 75 (GASB 75) - Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions (retiree medical) • Meeting minutes – September 22, 2022 November 29, 2022*: • Presentation by independent auditor Chavan & Associates, LLP - Transmittal of the Annual Comprehensive Financial Report (ACFR) • Meeting minutes – October 27, 2022 *November’s regular meeting schedule is November 24th, Thanksgiving Day. We recommend scheduling a special meeting for November 29th. 6 ADMINISTRATIVE SERVICES Memorandum To: City Council Finance Committee From: Nick Pegueros Date: September 22, 2022 Subject: 2023-24 Budget Indicators As presented in the budget adoption process, City staff is monitoring data points that will influence forecasts as the City Council commences their 2023-24 budget deliberations in January. Estimated dollar impacts on 2022-23 have yet to be quantified, given limited data. The following data points are now available: Item Description Estimated 2022-23 Budget Impact Property taxes Santa Clara County Treasurer-Controller’s Office has updated its property tax estimate for Saratoga in 2022-23. The update shows a 5.08% increase year-over-year in core property taxes, in line with budget estimates of $17.1 million. Core property taxes lag current real estate transactions by up to a year. We continue to monitor property transfer taxes, budgeted at $0.4 million, which more quickly incorporates growth/reductions in real estate activity. Positive. We anticipate receiving the full amount budgeted for property taxes. 2022-23 Pavement Management Program (PMP) The CalTrans Statewide Crude Oil Price Index for September 2022 is down approximately 16% from its 5-year high in July 2022. This Index is used for calculating payment adjustments for paving asphalt under the special provisions section "Payment Adjustments for Price Index Fluctuations" in the 2022-23 PMP contract awarded in July for a not-to-exceed amount of $3.6 million. If the Index remains below the July 2022 high, the PMP will experience budget savings allowing for additional PMP work. Finance Committee's recommendation to add roads to the existing facility replacement reserve augmented PMP funding in 2022-23 by $1 million. The projected Road and Facility Replacement Reserve is $3.7 million at fiscal year-end. Positive. We anticipate additional funds available for the PMP. 7 Item Description Estimated 2022-23 Budget Impact Interest earnings The City's investment earnings in the Local Agency Investment Fund (LAIF) increased from 0.32% in 2022 Q1 to 0.75% in 2022 Q2, yielding an extra $42,000 in quarterly earnings. We anticipate continued increases in investment earnings as the Federal Reserve works to tame inflation. Positive. We anticipate higher than budgeted investment earnings. Cost Recovery Study (fees, licenses, and permits) City Council awarded a contract to Matrix Consulting on September 7 for the 2022 Comprehensive Fee Study Project. The consultant’s work will substantially wrap up at the beginning of January, with the Finance Committee discussing the results and policy recommendations to the City occurring in February and early March 2023. Fees, licenses, and permits account for $2.6 million in General Fund revenue, or approximately ten percent (10%.) Positive. Project commences in October with the wrap-up in early January. Unfunded Pension Liability California Public Employees’ Retirement System (CalPERS) announced that preliminary investment return recorded a 6.1% loss for the fiscal year ended June 30, 2022. We are working with CalPERS to calculate the estimated impact on Saratoga’s unfunded pension liability. Neutral. The unfunded liability will not impact required pension contributions for fiscal years 2022-23 or 2023- 24. Overall, however, CalPERS’ loss is Negative for the City’s long-term financial health. Inflation (CPI-U) The CPI-U for the San Francisco region increased 5.7% from August 2021 to August 2022. The CPI-U increase exceeds property tax growth for the same period. Uncertain. Staff continues to monitor the impacts of inflation on City costs. 8