Speaker 1: Recommendation to improve the operating and capital budget calendar for fiscal year 2014, 15 and 1617.
Speaker 3: Okay. Good evening, Madam Mayor and members of the Council. Tonight we are kind of kicking off the beginning of our two year fiscal 15, 16 and 1617 budget cycle. We won't have any numbers tonight, but I am going to be going over the schedule. As you know, this is a very important time of year for us as we look back to see how we've done over the past year and then also to project into the future to see what kind of services that we think we can afford to provide to the community. Just as by way of background, I'd like to remind you that the budget is a planning document. It's a work in progress. And as we move through the fiscal year, we make adjustments along the way for things that we don't anticipate, including both on the revenue side and the expenditure side. Tonight, I'd like to go over the schedule with you and then discuss in very general terms some of the assumptions that we're making as we put together the budget. So far, the city manager's office has met with all the departments to set the stage for the development of their individual budgets. To date, the departments have returned their initial requests for the upcoming two years. At the same time, the Finance Department has been reviewing not only our historical revenues, but our anticipated revenues based on research of what's going on in the region as well as locally. Most of our discussion that will that we'll have going forward will be focused on the general fund, which is, as most of you know, is about 71 million, roughly 71 to 75 million. But as some of you also know, our total budget is closer to 190 million. So we typically focus on the general fund because that is our discretionary funding and provides core services like public safety. But I just want to be clear that really the general fund is about 37% of all the funds that the city has uses and needs to conduct its business. That's just kind of a kind of a reminder. So I'd like to move to our schedule. As you see, we've we've got two, four.
Speaker 2: Six.
Speaker 3: Dates that we've already pulled and scheduled meetings, two of which actually three of which are regular meetings, three of which are special meetings. The first meeting, obviously, tonight, which is we'd like to just review the schedule, make sure it's okay with you. Again, I'll talk a little bit about our revenue and expenditure assumptions very briefly. Our next meeting is Tuesday, April 7th. At that time, we are we are intending to introduce the preliminary budget. However, we have that that that schedule may slide. As you know, we have some transitions within the organization, in the finance department, as well as the departments have been fielding quite a few requests for information analysis. So we're a little bit behind schedule, but we are going to try and meet that date. At a minimum, we'll be presenting you our revenues, if not the expenditures. We'll also be talking about this is on April 7th, which is the regular council meeting. Discussion of OPEB and PERS as well as our deferred maintenance and infrastructure. And those three items. In fact, we do that every year or every two years when we do this budget. But this was something obviously that was highlighted by Treasurer Kevin Kennedy. And we want to make sure that that that the council, as well as the community, is aware of those issues in the beginning of the process. And then the last two bullet items, the one time revenues advances, loans and transfers and our reserves. This is in deference to the vice mayor's request, I believe, a couple of meetings ago. And we're just going to go through we'll go through that and talk talk a little bit more in depth about how we treat those in the budget process. Then the next three meetings are special meetings, and those meetings are they were really designed to meet the request of the mayor, which was to essentially kind of have an open house so the departments would explain what they do. And in we've also asked them at that time to explain any major changes in their budget, any initiatives that they might have, and then also to look at how they did compared to last year. And as you'll see, we've tried to limit these presentations and the meetings to no more than 3 hours. So we have kind of we've we've we've bundled large departments with smaller departments. So it's not so heavy on every on every meeting. So we have a meeting on Wednesday, April 29th, Tuesday, May 12th. And then, um. Excuse me. Yes. April 16th is the start of the special meeting. April 29th is the second one. And then Tuesday, May 12th is the third special meeting for the departments. And then hopefully, depending on when we when we introduce our preliminary budget, we will be looking to adopt the budget on June 2nd, and that is generally the schedule. So I'd like to move to sort of some general general discussions about our assumptions, and I'll start off with our expenditures. This is generally kind of the guidance that we give to the departments when they're putting together their budgets. So the first thing that we said to them was no increases to contractual services. This is like the hiring of of of consultants and so forth. So we just said, if you have the need, that's fine, but don't put any escalator clauses in any of your contract. So the idea here is that we're asking folks to hold the line, to negotiate their contracts. We feel like this is an area that our department heads do have some discretion on and they can negotiate with their vendors and hold the line. So we said no increases to contractual services. There are some exceptions, for example, utilities with that's not within the control of the departments, the utility. We cannot negotiate the cost of our utilities. So those those types of services, we've said that's fine. You know, if you're going to have increases there and we already know that we're going to have some increases. We said limiting staff increases. In fact, we said pretty much we said no staff increases unless you can justify why you need additional staffing. I can tell you, for example, we are planning on adding or there's going to be a request to add some folks in the information technology sector of our departments because we have learned that they are woefully understaffed and our infrastructure is woefully inadequate. Labor. So the cost of labor that is not at all within the discretion of the departments because they're completely covered by labor agreements. And so we actually input that the finance department actually inputs that information for the departments. They have no discretion. But we do know, for example, the purse rates are going to go up. Safety will go up 5% in the next two years. Miscellaneous will go up 3%. Same thing with wage increases that's outlined in the in the memo use. And those increases range from zero, which are set to somewhere between two and 5%. It depends on which bargaining unit you're in. And then health premiums there, we're factoring in an increase about between three and 4%. So that kind of takes care of labor and and are essentially our overarching assumptions for expenditures. And on the revenue side. So this is a little bit more of an art. Kind of anticipating what our revenues are going to be this year. We recognize that our finance department was in transition. And so we we contracted with Beacon Economics to help us do our forecasting. We've used them in the past. Our previous finance director did not use them, but we decided this year might be a good, good time to use them again. I don't know if you're familiar with Beacon Economics, but they're an economics research firm that does essentially forecasting into the future. They look at their their specialty is essentially San Francisco East Bay, South Bay. They also do Los Angeles, and they also do forecasting for the state comptroller. They're a very well-respected organization. Their forecasting has been what I've seen so far, a little aggressive. And so we're going to make sure that that is tailored to to to Alameda and make sure and we have provided local information. So hopefully we'll we'll find that strike that balance. Departmental revenues, those are things like police citations, building and plan, check, engineering, fire inspections, those kinds of things. And most of those revenues have escalators already built into them.
Speaker 0: I'd like to interrupt real quick. We're about to hit 1030. And so we need to have a motion to consider the remaining items, six F and nine A, and that requires four votes to approve. We have a motion. You have a second?
Speaker 6: A second?
Speaker 0: All those in favor.
Speaker 2: I.
Speaker 0: Motion passes unanimously. Thank you. You may continue.
Speaker 3: Thank you. I'm almost done, actually. We also on the revenue side, just some things that we do know. For example, with the dissolution of redevelopment we have now, I think I can't remember how many years it's been, but it's now been several years. And we're starting to see some trends about how much the general fund is actually reaping from unfortunately the dissolution of of redevelopment. And it looks like we're going to over the next at least 3 to 4 years, the general fund will receive about $1,000,000 that it hadn't received in the past on a consistent basis, which is a good thing. No, that's our former property to the former tax increment revenue. So it still has to go through what they're calling, you know, the waterfall, all the taxing entities. But the term that they're now using, Miss Potter has informed me, is called boomerang funds. And we can now expect roughly around, give or take, about $1,000,000 annually as a result of the the boomerang funds. Not good news for economic development efforts, but it is good news for the general fund. And that actually was sort of the idea behind one of the reasons why Governor Brown eliminated redevelopment in the first place and then one time funds, I think we'll talk a little bit more about this next time. But we look at the source of those one time funds. And if we think there are spikes in revenue, we look back at that and then we'll take them out. For example, we know last year we had several one time transactions that spiked our transfer tax. That was property that was transferred out of Alameda Landing and VF outdoors also had some some transactions and so we'll back that out. We know that that's one time there are big spikes. We'll take that out of our revenue forecast. And then the other the flip side to that is if we know something's coming, for example, if we know we're going to get a spike in revenue for something, guess I can't think of anything off the top of my head , but if we know for a fact, it's coming. We sort of have an obligation to put that in. That is considered a revenue. So that does go into our budgeted revenues. But again, if it's something that happened in the past that we can't anticipate happening in the future, then we would would we'd back that out? So that actually concludes what I have to offer for you tonight. I thought maybe we could take a look a look back at the schedule. And if you had any questions or if you wanted any revisions, we'd be happy to discuss that with you tonight.
Speaker 6: Amber Ashcraft thank you good presentation is former dam the. Only concern that I have is. When that came up in closed session today that we're wanting to, I think I can say.
Speaker 3: Right, discuss OPEB, OPEB.
Speaker 6: And PERS and devote a meeting, a council meeting to that. And so this is a really ambitious schedule. And I'm just wondering. Do we really need an hour for some of these open house kinds of presentations? I just it's always a toss up between every time we convene a meeting, which means we get staff together and the public I mean, this is a lot of meetings for members of the public to come out to. If they want to come in person, they don't have to come in person. But does anyone see any way that we could maybe consolidate some of this and still manage to get to the real meat.
Speaker 3: Of our.
Speaker 6: Budget deliberations and. Anyway. That's. That's. This concerns me and I know this city. The city clerk does a masterful job of herding cats by getting us out, pulling us. And by the way, these are just budget hearings, folks. These aren't even the transportation planning workshops and other things. This is not the city council's calendars. So any brilliant ideas about how we might manage this?
Speaker 0: Member, de sa.
Speaker 5: Thank you, Madam Chair. I think there seems to be agreement that the unfunded liabilities OPEB pers certainly and perhaps deferred, but especially OPEB. Warrants. Kind of one workshop devoted to that. As I look at the April 7th meeting, it's altogether possible that the bullet point on March 17th of today.
Speaker 2: Tonight.
Speaker 6: No word.
Speaker 3: Well, I mean.
Speaker 0: I swear.
Speaker 5: Oh, well, no. I just want to say that I do think that the issue of open purrs certainly warrants a workshop devoted to these unfunded liabilities.
Speaker 0: I swear.
Speaker 2: I'd like to see us just direct staff to squeeze it into this. The meetings that are set because we do have a meeting. As a council member, Ashcraft mentioned on transportation, that's not on the schedule. And there are also regular city council points. So my suggestion is we put it back. We have the other post-employment benefit and the PERS. The Public Employees Retirement System Workshop is a priority in my opinion, and the show and tell and description of what people do in their departments contributes to the time for that first priority.
Speaker 0: What are you proposing then? I would you like or not like I.
Speaker 2: I propose that we adopt the schedule as written. However. The other post-employment benefit and the public employees retirement system. A move to one of the special meetings. As a priority and the time needed for that is removed from the from the descriptions of what departments do in the other meetings that we have time for. And yet.
Speaker 6: If I recall this one, madam. Did you tell us that we. April 7th might be a little early to bring those two back.
Speaker 3: No, it's actually really the preliminary budget. So, I mean, what we could do. Alternatively, if the vice mayor was amenable, is that we could just have the discussion on April 7th on OPEB and person and we could SLI the preliminary budget.
Speaker 2: Although my objection to that is April 7th is the regular council meeting.
Speaker 3: Okay.
Speaker 2: So there's going to be other other agenda items that we have to go through. And that's why I think it's a special meeting. It's the first up at the special occasion and then we manage the rest of the meetings that are scheduled or you manage the rest of the schedule to get get the departments in front of us. Okay.
Speaker 3: All right. We can ask them to to limit it. Limit the amount of time.
Speaker 0: Member.
Speaker 7: I mean, perhaps if. Yeah. I think I'd be fine with the meeting. I don't like all these extra meetings, but I think we have to do them. Just say that out front. If we had a. Special meeting on the OPEB powers and deferred maintenance in addition to the ones on this schedule, or perhaps starting the April 16th meeting half hour earlier. I don't know how long that conversation may take, you know, an hour or an hour and a half, you know, if with an hour. You think at it. There's a 50 minute presentation, ten speakers at 3 minutes, that's another half hour. You're at 45 minutes. And then we haven't even spoken. So. I think. It's going to go by a lot faster than we think and we think it's going.
Speaker 0: So I think that raises a good question. But does the start time proposed start time for the special meetings? If we restart.
Speaker 3: Uh, 630. 630. Mm hmm.
Speaker 0: I think we could start at six or that be too early. I'd prefer starting at six if possible, because I think that then. Then we'd have a better chance of including the public if. If possible.
Speaker 6: I think sometimes we also get a special closed session thrown in. And I think the city manager was about to say something.
Speaker 2: No, I just I understand. And it's funny to be on the side of arguing for more meetings when I'm usually saying, okay, we only have so much staff. I don't know whether or not it can be done, but I really I feel very strongly that to decant all of the issues, given the complexities of OPEB. I would just really urge the Council to reconsider and do a special meeting for OPEB. It's such a huge number. It's it's a nine figure problem. I think it merits its own meeting because it's so complicated. And in order to explain it in such a way, to have the public understand what is being considered. I think it's worth a separate meeting. I understand very well that it's a lot of meetings and I understand very well that it puts a burden on the council. And it's hard for me to believe I'm arguing this side of the issue. But I think. I just would ask the council to reconsider and think about doing a special meeting at.
Speaker 0: Member, Ashcroft.
Speaker 6: And I, I, I agree that OPEB could have its own special meeting, and I think it would be advantageous to give counsel and the public lots of times for question and answer. I'm wondering if we could take the set number of meetings and just consolidate some of what the vice mayor referred to as the show and tell the open house ones into. Into one. I'm just, you know, I.
Speaker 4: Or two.
Speaker 6: Or two. Well, yeah, but I'm just saying, we've got how many different we've got. One, two, three special meetings just for these departmental open house show and tells if we could move them into two special meetings and then take one of those slots, whichever staff thinks is most logical and assign it OPEB and. I think that might. And then it never hurts to have a, you know, sort of an open agenda because you know how things come up and get added. That would be my suggestion.
Speaker 2: But. I mean, what I would suggest since you have a discussion. Look, since discussion of OPEB. And to understand the direction that staff has been moving and that we will, at direction of counsel, continue to move forward after tonight's discussion. The discussion of OPEB requires a context. Some of that's already set forth here for the meeting of the seven. The only issue with the meeting of the seventh is that it's a regular council meeting. However, if we were to introduce the preliminary budget on the 16. Discuss one time revenues, advances, loans and transfers on the 16. And general fund reserves on the 16. And just highlight and expand that one discussion discussion of OPEB hers. Input, deferred infrastructure and maintenance to the well. If we could do that, I think that would be very helpful. And given where the staff is on the budget, I don't think leaving the preliminary budget introduction to the 60 is going to kill us. We actually probably would like that. So if we can make the meeting to just put an set aside and understand that an open discussion will take at least 2 hours on the night of the seventh and put it in as a regular agenda item. I think that would work for staff and keep the ball rolling for action.
Speaker 0: Everyday suck.
Speaker 5: Either way, I think that's important. Whether it's on a special meeting basis or on a regular meeting basis. I think the key issue is giving it the time that that OPEB warrants, given the magnitude of the issue at hand. Now, just to be clear, though, when we say OPEB, I'm assuming that we're also going to discuss PERS and let me say it, because it would be odd if a member of the public came on one night to talk about OPEB and then comes to another. So from the public's point of view, it's PERS, but it's really OPEB right now.
Speaker 2: That's and that's and that's what I was suggesting is we just we just what is now currently listed for April the seventh. We take it all out except the discussion of OPEB and PERS and similar to the contextual discussion that counsel earlier that see as.
Speaker 0: Right.
Speaker 2: That's good.
Speaker 0: So I. I'm concerned about the agenda item. I mean, the placement on the agenda. I would like it to be early. When it comes the OPEB, but it's one. The budget discussions are part of the regular council meeting. I think it's important to have those items at the beginning of the calendar. I agree. It's possible and we're fresher. I'm ready to do. You have another comment? I'm sorry.
Speaker 7: I mean, I just wanted to hear your thoughts as the person who runs the meeting on and the city manager. Because I, I think your idea of starting at six for some of these special meetings, at least maybe on the first one or the second one, so we could see how long they take them. And maybe they won't take that long.
Speaker 0: But I would I would I would like to see 6 a.m., a six day, 6 a.m. strike. That strike that 6 p.m. starts on the special meetings. We would not normally have any closed session before on a special meeting. I just anticipate that for this. So I don't know if council is agreeable to 6 p.m. start on the special meetings and then on the regular meetings. I'd like to have the discussions on the budget be at the beginning of the agenda so that we address the earlier rather than later. And then I just have a question also. So if someone wants to come and discuss either, for instance, increasing a budget for a department that has previously been cut or for whatever reason they want to increase it, do they come when each department is being discussed? Okay. And then if overall of where? But they have an opportunity towards the end then or where they look at the overall budget and make changes in regards to priorities, things that they think more money should be spent on, things that they think.
Speaker 3: Right. So in the presentations, the departmental presentations, they'll discuss, you know, I call them initiatives, but it's any changes from previous years. So if they're asking for more staff or whatever, they'll be presenting it at that time. And then when we do the, the, the budget, so part of it will be the preliminary budget will be the introduction. So we'll give you sort of a broad overview of what the budget is looking like and all the major categories. Then the departments will go through their information and then you'll see the whole thing put together on the on June 2nd.
Speaker 0: Okay. And over the years, there have been cuts to some departments or ours, for instance, library our public hours. Will that be shared as part of each department's presentation of where there have been cuts in the past? Or would it be up to the public just to remember? I personally would like to have that included. I think that there were some cuts and that so we could have a comprehensive discussion.
Speaker 3: I mean, if that's if the council feels that that's a you know, you'd like them to do that, we can directed departments to include that into their, in their, in their presentations.
Speaker 6: Member Ashraf Well I was going to say, I mean I think that it, it comes up when we're, I guess we could both be asking library staff for example, just using that as an example. And then when we're voting to approve budget items, we have that discussion again. And of course always understanding that it's, you know, you give and you take. So if ours were, say, increased, maybe staff would have to be cut or the budget for purchasing materials would have to be cut. But we have very competent department heads and they know their departments. So, you know, I think we've all learned a lot from listening to them.
Speaker 0: Know what other member Ody.
Speaker 2: Mean.
Speaker 7: In not going through this budget process before and knowing at the top of my head what was cut in the past. I mean, I think the trends of the last budget in the budget before I think would would be helpful for for some of us that haven't gone through this before, at least at least from my perspective
Speaker 0: . It would be helpful to me. I'm also a new member here. Is counsel agreeable to knowing what's happened in the past? Bring us up to speed.
Speaker 7: And take that much.
Speaker 0: And also the public, for that matter. Thank you.
Speaker 3: Mm hmm.
Speaker 2: It's a good idea.
Speaker 0: And then so when the if if there are community members that want to discuss shifting funds, where would that take place?
Speaker 3: You know, that can happen at any time. But that would most likely because you'll have all the information on the second.
Speaker 0: On June 2nd. Mm hmm. Okay, so then. And that's at a regular meeting? Mm hmm. So, can we include enough time on the agenda, then? Have not just a presentation that this is what we're being asked to approve, but actual to allow.
Speaker 4: The.
Speaker 3: Public.
Speaker 0: To have.
Speaker 3: Commonly.
Speaker 0: Any other comments on this item?
Speaker 2: Make a motion. I move that we follow the. Proposal of the city manager to. Of the other post-employment benefits in the first discussion on the meeting of the April 7th and the for the other items listed in the staff report special April 16th. And to also consider a start time of six M or the special meeting.
Speaker 6: A second.
Speaker 0: And I'd like I'd like to add. To have it early. The agenda items on the regular.
Speaker 2: Yes, the mayor's request to have the budget items on the regular and the regular council meetings early in the agenda.
Speaker 0: Thank you. So we have a second. Any discussion. All those in favor I passes unanimously.
Speaker 5: Sorry.
Speaker 2: Sorry. Thank you, Councilman.
Speaker 0: Thank you, Staff. Right. So now we're on six F.
Recommendation to Approve the Operating and Capital Budget Calendar for Fiscal Years 2015-16 and 2016-17.  (City Manager 2110)