Loading...
2022-06-21 Special CC SACIC MinutesSpecial Joint Meeting Alameda City Council and Successor Agency to the Community Improvement Commission June 21, 2022 1 MINUTES OF THE SPECIAL JOINT MEETING OF THE CITY COUNCIL AND SUCCESSOR AGENCY TO THE COMMUNITY IMPROVEMENT COMMISSION (SACIC) TUESDAY- -JUNE 21, 2022- -6:59 P.M. Mayor/Chair Ezzy Ashcraft convened the meeting at 7:10 p.m. Councilmember/Commissioner Daysog led the Pledge of Allegiance. ROLL CALL - Present: Councilmembers/Commissioners Daysog, Herrera Spencer, Knox White, Vella and Mayor/Chair Ezzy Ashcraft – 5. [Note: The meeting was held via Zoom.] Absent: None. CONSENT CALENDAR Councilmember/Commissioner Knox White moved approval of the Consent Calendar. Vice Mayor/Commissioner Vella seconded the motion, which carried by the following roll call vote: Councilmembers/Commissioners Daysog: Aye; Knox White: Aye; Spencer: Aye; Vella: Aye; and Mayor/Chair Ezzy Ashcraft: Aye. Ayes: 5. [Items so enacted or adopted are indicated by an asterisk preceding the paragraph number.] (*22-395 CC/22-09 SACIC) Minutes of the Special Joint City Council and SACIC Meeting Held on May 17, 2022. Approved. AGENDA ITEM (22-396 CC) Public Hearing to Establish the Proposition 4 (Appropriations) Limit for Fiscal Year 2022-23; and (22-396A CC) Resolution No. 15917, “Establishing the Appropriations Limit for Fiscal Year 2022-23.” Adopted. The Budget Manager gave a brief presentation. Councilmember Herrera Spencer inquired the highest percentage allowable by law. The Budget Manager responded the City needs to be under 100% of the appropriations limit. Councilmember Herrera Spencer inquired the amount of the last p ercentage, to which the Budget Manager responded 69% of the limit. Councilmember Knox White moved approval of the staff recommendation [including adoption of the resolution]. Special Joint Meeting Alameda City Council and Successor Agency to the Community Improvement Commission June 21, 2022 2 Vice Mayor Vella seconded the motion, which carried by the following roll call vote: Councilmembers/Commissioners Daysog: Aye; Knox White: Aye; Spencer: Aye; Vella: Aye; and Mayor/Chair Ezzy Ashcraft: Aye. Ayes: 5. (22-397CC) Resolution No. 15918, “Approving and Adopting the Budget for Fiscal Year 2022-23.” Adopted; and (22-010 SACIC) Resolution No. 22-15, “Approving and Adopting the Budget for Fiscal Year 2022-23.” Adopted; and (22-397A CC) Resolution No. 15919, “Approving Workforce Changes and Amending the Salary Schedules for the Alameda City Employees Association (ACEA) and Management and Confidential Employees Association (MCEA) in Fiscal Year 2022 -23, Effective July 3, 2022.” Adopted. The Budget Manager gave a Power Point presentation. Councilmember/Commissioner Daysog stated the amount is reasonable; there is a transfer in amount of $9.9 million; inquired the elements of the transfers in which comprise the $9.9 million amount. The Budget Manager responded the $9.9 million amount are the actuals from fiscal year 2020-2021 and is comprised of $4 million from Alameda Municipal Power’s (AMP) franchise fee, $3.1 million from the capital program closing about a dozen projects. Councilmember/Commissioner Herrera Spencer stated correspondence has been received from the business districts requesting funding; inquired whether the request is being considered. The Finance Director responded the request has not been included; Council may add the request to the budget as part of adoption if desired; staff would have to identify a funding source to cover the request; the amount would likely come out of fund balance. Councilmember/Commissioner Herrera Spencer stated Council should consider funding a City swimming pool; inquired whether there will be funds for a City swimming pool. Mayor Ezzy Ashcraft stated the recent Alameda Unified School District (AUSD) bond measure passed; the measure includes funding for half of the amount of a swimming pool. The Finance Director responded the funding for a City swimming pool is part of a larger question than the current budget; stated the Finance Department will need to work with the Recreation and Parks Department should Council provides direction; staff could return with a study session and proposed funding options. Special Joint Meeting Alameda City Council and Successor Agency to the Community Improvement Commission June 21, 2022 3 In response to Councilmember/Commissioner Herrera Spencer, the Budget Manager stated information is included in the presentation under the five -year balancing forecast; the forecast is not an actual budget; forecasts look at what has happened in the past; the current long-term financial model looks back at what has happen ed in the past 10 years in order to forecast future estimates; staff uses the estimates to increase revenue and expenditure factors; forecasts show higher expenditures than revenues; the forecast does not take into account other potential funding sources o r reductions in expenditures; as staff comes back in the future, a balanced budget will be presented. Councilmember/Commissioner Herrera Spencer stated the five year forecast shows the difference between revenues and expenditures; inquired whether staff has made any modifications in the five year forecast related to a possible recession; stated the net annual activity is a negative amount; inquired whether the City anticipates increasing revenue. The Budget Manager responded in the affirmative; stated th e circumstance can vary; certain revenue sources have more volatility; the City’s largest general revenue source is property tax, which is stable even in a recession; staff expects the revenue source to remain stable or continue to increase modestly; the increase can help offset reductions in other areas that are more volatile during a recession. Councilmember/Commissioner Daysog moved approval of the staff recommendation [including adoption of the resolutions]. Councilmember/Commissioner Knox White seconded the motion. Under discussion, Councilmember/Commissioner Daysog stated there are many things to fix within the budget; he supports the current matter; a bold step is being taken to try to set aside funds for a municipal swimming pool; expressed suppo rt for having a municipal swimming pool; stated the location can change. Councilmember/Commissioner Knox White stated the pool commitment is to hold funds until needed. Councilmember/Commissioner Herrera Spencer stated the pool item is described as the Emma Hood Swim Center ear mark, not a municipal swim center; she understands the funding is not for a City swimming pool. Mayor/Chair Ezzy Ashcraft requested Councilmember/Commissioner Knox White to provide clarification; stated the Finance Director noted the City swimming pool would be a larger discussion. Councilmember/Commissioner Knox White stated Council directed a $7.5 million match be ear marked for rebuilding Emma Hood swimming pool, which is an AUSD-owned facility that the City jointly operates and uses; the amount does not include funding for a Special Joint Meeting Alameda City Council and Successor Agency to the Community Improvement Commission June 21, 2022 4 City-operated pool built in another part of the City. On the call for the question, the motion carried by the following roll call vote: Councilmembers/Commissioners Daysog: Aye; Knox White: Aye; Spencer: No; Vella: Aye; and Mayor/Chair Ezzy Ashcraft: Aye. Ayes: 4. Noes: 1. (22-398 CC) Adoption of Resolution Adopting the One-Time Revenue, Excess Property Transfer Tax, and General Fund Surplus Policy. Not adopted. The Finance Director gave a Power Point presentation. Councilmember Daysog stated the idea behind the 2017 formula was spot on; expressed concern about the formula driving too many dollars to help pay down the other post-employment benefits (OPEB) and CalPERS liabilities; stated the City has many challenges; Council must make decisions about how to fund capital and other City improvements and services; Council could have addressed ongoing , annual issues by modifying the 2017 formula; the City has spent roughly $45 million in five years; any time the City spends that amount of money, the citizens should be included and approve the expenditure; he does not have an issue with the 2017 formula; however, there are concerns with the mechanics of the formula driving too much money into paying down OPEB liabilities; a lot of the excess revenues have not been as a result of the revenue windfalls, but are due to the City budgeting a certain amount for municipal services and the actual spending amount being far less than what was budgeted; discussed constant revenues with lower expenditures causing the General Fund balance to be larger; stated $15 million was budgeted for government services and roughly $9 million was spent; underspending has caused excess revenues; eventually, the City will spend the full amount on municipal services; the excess revenues have allowed the City to pay down unfunded OPEB liabilities due to proposed services not being providing; he has put together data from audited statements; expressed support for revenue; stated the City needs to address how to deal with reserves; the City should make an effort to pay down the unfunded liabilities; the City should reign in the formula; he does not think the current formula will result in enough excess revenues to come close to paying the unfunded liabilities; he is not sure revenue adjustments are sufficient; expressed support for the matter returning to Council to determine how to deal with expenditures and excess fund balance. Mayor Ezzy Ashcraft stated that she agrees with Councilmembe r Daysog in-part; discussed a 2017 League of California Cities presentation; stated the formula made sense at the time; all City policies should be revisited; she is not wedded to the current formula; she is intrigued by the proposal. Councilmember Knox White stated the proposal is on the conservative side; expressed support for the Council decision to address the long-term, significant issue; stated Council decided to pay down unfunded liabilities in response to concerns; the current Council has been implementing a policy adopted by a past Council incorrectly; there is a Special Joint Meeting Alameda City Council and Successor Agency to the Community Improvement Commission June 21, 2022 5 middle ground that is simpler than the proposal; expressed support for 50% of any excess, unspent funds being spent to pay down OPEB liabilities; stated budgeting for 88 Police Officers when all positions are not filled results in a budget savings; the budget savings can help go towards paying down long-term pensions; the original intent of the 2017 formula was to utilize excess budget savings; surplus was added to reserves; the large reserve yielded large OPEB liability payments; expressed support for Council going with an approach that is easier to understand and based on annual budget actuals; stated percentages of the excess and reserve can be put toward s wherever Council decides; the formula moved $37 million towards the City’s long-term liability during the first five year; stated the staff proposal would have resulted in $16 million; his proposed approach would have yielded roughly $25 million and is between the current approach and the new proposal. Vice Mayor Vella inquired whether the language in labor contracts related to OPEB is a factor f; stated agreements bind the City relative to the liabilities; expressed support for the City going beyond OPEB portion of the matter; stated the agreements touch on ensuring the City is paying down the liability; the City has taken responsible actions; she understands the concept of wanting to ensure the City’s dollars go toward s funding different projects; however, OPEB liabilities are an investment in staff who provide the services; the City is already on the hook; actions taken over the years were needed; Council needs to figure out and change the current policy a little; expressed concern about too many changes to the policy; stated the City should continue to pay down the OPEB liability; she would like to see more funding set aside to pay down the liability; the City has been a leader in its approach ; other cities have looked towards Alameda; inquired the impact labor agreements have on the policy proposal; stated the information is helpful to provide perspective on constraints. The Human Resource Director responded in 2016, the City set up the OPEB trust and made an initial deposit of $5 million; stated the agreement includes a contribution of $250,000 per year through 2025; the City will meet with labor in 2025 to discuss continuing the contribution; the City’s public safety group members contribute 4% to the OPEB trust if hired prior to 2011 and anyone hired after 2011, contributes 2%. Vice Mayor Vella stated that she is supportive of changing the policy; however, she does not want to move too much in the opposite direction where the City is not putting money aside; the City has minimal amounts that must be put into the OPEB trust; the City has been focused on paying down the CalPERS obligations , which saves the City a tremendous amount of money in the long run; the investment is smart; the vote to establish the pay down happened prior to her being on Council; however, she is supportive of the policy; minor adjustments to the policy can be made without getting too technical or convoluted; expressed concern about moving in a direction where the amount would be split by 50%. Mayor Ezzy Ashcraft inquired whether Vice Mayor Vella is looking f or middle ground between what has previously been done and what is being proposed, to which Vice Special Joint Meeting Alameda City Council and Successor Agency to the Community Improvement Commission June 21, 2022 6 Mayor Vella responded in the affirmative. Councilmember Daysog stated there appears to be consensus that Council should have greater say in terms of the amount that is set aside for liabilities instead of having a policy that runs on its own; the approach is about changing the policy; expressed support for seeing a better explanation as to what is driving the fund balances; stated the fund balance can either be driven by the revenue side due to gathering more dollars or be driven by the expenditure side due to not spending as much; the public needs to know what the City put $45 million towards and any projects the differential could have funded; ultimately, the public needs to sign-off on funding the liabilities; expressed support for asking the public to vote on the matter. Councilmember Herrera Spencer stated the staff report shows $204.4 million in unfunded pension liability for public safety and another $92.4 million for miscellaneous and all other employees; there is $296.8 million in unfunded pension liabilities; inquired whether the amount is correct, to which the Finance Director responded in the affirmative. Councilmember Herrera Spencer discussed a League of California Cities meeting indicting Alameda had the highest unfunded pension liabilities on a per capita basis; stated it is important to underscore the total amount of unfunded pension liability, as well as how much liability is accrued on an annual basis; the amount should be required to be disclosed; inquired whether the report shows the amount of unfunded liability. The Controller responded in the affirmative; stated the amount is shown on financial statements; the amount includes the total OPEB liability and the total liability of pension. Councilmember Herrera Spencer stated the City owes $296.8 million in unfunded pension liabilities; the five year projection has an ending fund balance that goes down from $65.1 million in 2022 to $50 million; the roughly $300 million is significantly higher than the $50 million in reserves; the reserve amount is not a real number when unfunded pension liabilities are added; inquired whether the liability amount is being subtracted. The Controller responded the accounting method is different; stated most long-term liabilities and assets are excluded in the fund liability report; staff focuses on the current budget and excludes anything that is over one year away; the long-term assets and liabilities, including OPEB and pensions, are not included in the fund balance amount. Councilmember Herrera Spencer stated the City would end up with a deficit of about $250 million if staff included the roughly $300 million pension liability amount; the deficit is a problem; she did not vote in favor of the budget; the AUSD swimming pool is not sufficient for the community due to greater demand; discussed correspondence related to high charges for park usage; stated benefits to the people who pay taxes are not able to be enjoyed as much as possible; numbers presented are not real; the City has Special Joint Meeting Alameda City Council and Successor Agency to the Community Improvement Commission June 21, 2022 7 unfunded pension liabilities; the reports should include a notation about the $300 million unfunded pension liability; expressed concern about continuing to incur additional unfunded pension liabilities; stated the liabilities are a current and long -term problem for the City; expressed support for the City spending money to benefit community members; stated the City does not have enough funding; the City is $250 million short going into a recession; typically, the City has a tax measure every couple of years to try to appear as though the City is bringing in more money; the approach is not fair to many of the community members who cannot afford the increase; it is important to recogn ize those who pay taxes; expressed support for looking at other formulas; stated that she appreciates the chart showing the City has not been honoring the agreement; it is up to each Council to reflect and figure out the amount to spend on the liabilities; expressed support for Council having flexibility to determine how much to spend; stated that she supports the proposal. Councilmember Knox White inquired the time period when unfunded liability payments are due and whether the amount is due in the next year. The Controller responded in the negative; stated the amount is the current value of all future payments to be made to retirees at any given moment. Councilmember Knox White inquired the time period to pay a $300 million liability. The Controller responded the current value is to be paid over time . The Finance Director stated the analysis is actuarial and happens annually; the analysis projects out the current payroll; the $300 million amount will not be due next year; the amount will be due over time as people retire. Councilmember Knox White stated the City arrived at the $300 million amount as projected 25 to 30 years out; inquired whether the City’s budget includes an annual payment for the liability; stated Council is working on ways to g et the $300 million amount decreased quicker than the 30 year time frame; expressed concern about increased interest rates and liability payment amounts. The Finance Director stated the analysis is correct. Councilmember Knox White inquired whether the re could be an instance of adding the 30 year liability to the annual budget, to which the Controller responded in the negative. Councilmember Knox White expressed concern about people fearing a $300 million unfunded liability that needs to be paid in the next two years; stated paying down the liability faster and earlier is better; he would like to find a formula that is more ambitious than what has been proposed; expressed support for the proposed formula’s smoothing and reasoning and for Council finding something that brings the City closer to 50% of the annual surplus; stated the simpler the formula, the easier it will be to implement; he Special Joint Meeting Alameda City Council and Successor Agency to the Community Improvement Commission June 21, 2022 8 would like the matter to come before Council sometime in the fall. Councilmember Knox White moved approval of directing staff to bring back the matter sometime in the fall with additional work to bring the number up, based on the conversation. Councilmember Daysog seconded the motion. Under discussion, Mayor Ezzy Ashcraft stated that she appreciates the comments provided; the liabilities are a problem and a responsibility the City has; the City’s largest expense is personnel; the City needs to expect salary and benefit costs; the City is always concerned about attracting and retaining employees; part of attracting a nd retaining employees includes salaries and benefits; expressed support for the City looking the problem in the eye; stated the City cannot look the other way and hope that the problem will solve itself; discussed her 2017 proposal that the then Council adopted; expressed support for the motion. On the call for the question, the motion carried by the following roll call vote: Councilmembers/Commissioners Daysog: Aye; Knox White: Aye; Herrera Spencer: No; Vella: Aye; and Mayor/Chair Ezzy Ashcraft: Aye. A yes: 4. Noes: 1. ADJOURNMENT There being no further business, Mayor/Chair Ezzy Ashcraft adjourned the meeting at 8:20 p.m. Respectfully submitted, Lara Weisiger, City Clerk Secretary, SACIC The agenda for this meeting was posted in accordance with the Sunshine Ordinance.