Item 3.1 - Proposed FY 19-20 Comp Financial Plan and Fiscal ForecastAPPROVED D
City of Poway
COUNCIL AGENDA REPORT
APPROVED AS AMENDED □
(SEE MINUTES)
DENIED
REMOVED
D D
CONTINUED _____ _
RESOLUTION NO. 19-035
DATE:
TO:
FROM:
CONTACT:
SUBJECT:
Summary:
June 18, 2019 RESOLUTION NO.
Honorable Mayor and Members of the City Council
Honorable Chairman and Members of the Housing Authority
Honorable Chairman and Members of the Successor Agency
to the Poway Redevelopment Agency
Chris Hazeltine, City Manager/Executive Direct<@
Wendy Kaserman, Assistant City Manager 0k
(858) 668-4502 or wkaserman@poway.Q .Ji Donna Goldsmith, Director of Finance b '
(858)668-4411 or dgoldsmith@poway.org u
Alex Castanares, Budget Administrator ,,A '--""'(858)668-4415 or acastanares@poway.org
Proposed Fiscal Year (FY) 2019-20 Comprehensive Financial Plan and
Fiscal Forecast for the General Fund
This report presents the Proposed Comprehensive Financial Plan (Budget) for FY 2019-20. The
budget as proposed results in a balanced General Fund and maintains reserves at the level
identified in the City's Financial Policy. Also included with this report is an updated General Fund
Summary and Fiscal Forecast for the General Fund through FY 2020-21 (Attachment A), the
major Department Goals and Objectives supported by the proposed expenditures (Attachment
B), and the report of recommendations by the City Council appointed Budget Review Committee
(Attachment C).
Recommended Action:
It is recommended that the City Council/Housing Authority/Successor Agency:
1.Receive public input regarding the FY 2019-20 Proposed Budget;
2.Receive the Report of the Budget Review Committee and consider their
recommendations;
3.Adopt the attached resolutions authorizing the Comprehensive Financial Plan for
FY 2019-20, establishing the updated reserve levels.
Discussion:
The FY 2019-20 Proposed Budget consists of revenues across all funds totaling $102.77 million.
Projected revenues are anticipated to be sufficient to cover city-wide expenses of $98.78 million
across all funds including $91.63 million for department operations (including law enforcement,
fire protection, parks and recreation, streets, drainage, stormwater, and water and sewer utilities),
$5.76 million for capital project and program expenditures, and $1.36 million for debt service. The
remaining differe ntial between the projected revenues and expenditures funds the required
additional contribution to the General Fund Reserves ($437 ,208) to maintain the Council adopted
policy of 45% of the operating budget, an increase to the Sewer Fund Balance in continued
preparation for a major regional project described later in the report and for future City sewer
capital projects ($1.15 million), and lastly, an increase in the Capital Replacement Fund balance
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June 18, 2019, Item #3.1
of $679,100, resulting from the need to continue setting aside additional funding for projects
identified in the recently completed facility needs assessment study.
The proposed budget is balanced, but as has been noted in prior budget reports, the growth in
General Fund revenues is not keeping pace with the growth in expenditures. This is due in large
part to rising pension costs, as well as rising law enforcement costs. City staff was conservative
in new requests for FY 2019-20. The budget highlights described below for each department
reflect only necessary operating expenditures. Additionally, there are several projects and issues
on the horizon that have the potential to significantly impact the budget. These are described later
in the report. While the City Council only adopts a single year budget, staff is always looking
ahead to future fiscal years. Early numbers for FY 2020-21 indicate that even with modest growth
to General Fund operating expenditures, expenditures will likely exceed revenues. Staff is
anticipating that difficult decisions may need to be made in the development of the FY 2020-21
budget.
FY 2019-20 Proposed Budget -Program Highlights
City Staffing
Labor budgets proposed for FY 2019-20 total $32.15 million, or 35% of the overall budget across
all funds. The memoranda of understanding between the City and the Poway Firefighters'
Association (Safety) and the Teamsters Local 911 (Non-Safety) are both due to expire on June
30, 2019. As of the writing of this report, labor negotiations are underway. Since new agreements
have not been approved, the proposed budget does not include any across the board salary
increases for either the represented (Safety and Non-Safety) employees or unrepresented
(Management/Confidential) employees.
There are no new positions included in the proposed budget. However, the manner in which part-
time temporary/seasonal positions are reflected has changed. Rather than displaying a full-time
equivalent (FTE) for the funds allocated for temporary staffing, only the dollar amount will be
displayed, thus causing a decrease in FTEs. The current adopted level (FY 2018-19) includes
adjustments approved by the City Council following adoption of the budget. The table below
shows 3 years of FTE count:
Le islative and Administrative Services
Finance
Human Resources and Risk
Mana ement
FY 2019-20
FY 2017-18 FY 2018-19 Proposed
8.96 9.48 9.00
17.25 20.50 20.50
5.00 6.00 6.00
The proposed budget does include step increases for those employees who are not already at
top step in their respective salary ranges. It also includes increases to the employer's CalPERS
(PERS) pension contributions, increases to the City's supplemental retirement benefit (PARS)
contributions, as well as projected increases to the employer's portion of health care costs. The
PARS supplemental retirement benefit is a closed plan, meaning that employees hired after 2012,
are not eligible for this benefit. Employer-paid PERS contributions are increasing effective July
2019, from 23.3% of base salary to 34.4% for Non-Safety/Management/Confidential classic
members and from 39.4% to 55.5% for Safety classic members. These rates are composed of
two parts, Normal Cost and Unfunded Liability. Currently all classic employees (Safety,
Management/Confidential, and Non-Safety) are contributing an additional one percent toward the
Normal Cost, thereby reducing the City's contribution by this amount. The cumulative percentages
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June 18, 2019, Item #3.1
shown above reflect these employee contributions. The City bears the full cost of the Unfunded
Liability, as well as any increases to the Normal Cost resulting from changes determined by
PERS. Overall, PERS costs are projected to increase by $677,358 in FY 2019-20. Rising costs
are primarily attributed to decreases to the PERS discount rate (the rate of return on investments)
and other changes in actuarial assumptions.
In FY 2018-19, the City hired a specialized actuary to analyze projected growth in PERS rates
and develop recommendations for mitigating the impact of future increases on the City's operating
budget. The final report, presented to the City Council on September 18, 2018, indicates that
employer rates will continue to increase annually for the foreseeable future and there will be little
relief until the late 2030s or earlier 2040s at which point it is anticipated the entire City workforce
will be comprised of Public Employee Pension Reform Act (PEPRA) employees who have a less
generous pension formula and pay significantly more toward the costs of their pension benefit.
The consultant did make recommendations for mitigating the future impact on the operating
budget, however the City has not yet identified funding to implement the recommendations which
include making additional payments to PERS to reduce the City's unfunded liability and/or
establishing an IRS Section 115 Trust that would in essence establish a dedicated savings
account for pension costs that could be drawn on in future years to offset the impact of pension
costs on the operating budget.
Program Highlights -Operating Expenditures
Legislative and Administrative: The City Clerk's budget has decreased due to the fact that election
expenses have been removed from the budget for FY 2019-20. These costs will need to be
budgeted again in the FY 2020-21 budget for the election in 2020. The City Attorney budget
reflects the annual inflationary adjustment of 2.6% to the agreement for legal services.
Finance: The Finance Division's budget for contractual services saw a decrease of $50,980 due
to the elimination of Banner software maintenance, the City's previous financial software. The
Information Technology Division's contractual services were also reduced for lower consulting
fees. A new item initiated by the Finance Department is annual "rental charges" for the
replacement of major software applications, such as Enterprise Resource Planning software
(Munis), TRAKiT in Development Services and Cartegraph in Public Works. By collecting rent
each year, the City will be better prepared for a major software purchase when the time comes to
replace or upgrade. These costs are spread across four departments; Finance, Human
Resources & Risk Management, Public Works and Development Services.
Community Services: Throughout the Community Services Department there are increases to
various contractual services to account for consumer price index (CPI) adjustments, per written
agreements. In the Community Services Director division, $50,000 has been added to the budget
for the City to provide ongoing support for the Poway Valley Senior Citizens Corporation at their
temporary location during construction of the Mickey Cafagna Community Center. The Poway
Center for the Performing Arts (PCPA) budget reflects an increase of $91,436 in Gas and
Electricity since savings from the solar project have been less than anticipated. This increase to
the budget makes the PCPA whole in this account, which was also done at midyear during FY
2018-19. Staff is currently working with an outside consultant to analyze the PCPA solar system
to determine why the system is not performing as it was projected to.
Development Services: As discussed in the Finance section, "rental charges" in the amount of
$46,500 have been budgeted in Development Services for major software purchases and
upgrades in the future. In the Traffic Engineering Division, $40,000 is being added for a city-wide
speed survey, which occurs every seven years. The Development Services Department
requested, and City Management is recommending approval, of a specialized project
management software that is specifically designed for managing large scale capital projects and
will assist with tracking Requests for Information (RFls) and change orders. The budget includes
$12,000 for this software purchase. The Stormwater Division will again see an increase in shared
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June 18, 2019, Item #3.1
costs for both the Los Penasquitos and San Dieguito Water Quality Improvement Plans (WQIPs).
Shared costs are levied and tiered for participating jurisdictions every five years. Per the WQIPs
and related cost share agreements, the City is expected to participate in a major lagoon
restoration project in the next few years. This is one of the issues on the horizon that the City
currently does not have funding set aside for. The projected and estimated costs will be described
later in this report. On the revenue side in Development Services, current development activity
was reviewed and revenue adjusted downward by $200,000 to better reflect the current activity
level.
Public Works: Proposed expenditures to continue the City's high standard for streets
maintenance total $4.47 million, including $1.10 million in General Fund support. Under SB 1,
the statewide 12-cent and 20-cent tax on regular and diesel fuel, the City's annual revenue from
Gas Tax is projected to be supplemented by $836,010 for FY 2019-20, allowing the City to hold
its current General Fund contribution for streets maintenance to $1.10 million. A statewide effort
to repeal the gas tax was unsuccessful on the November 2018 ballot, therefore no additional
General Fund support is needed to continue the City's street maintenance program.
Proposed increases in expenditures in the Public Works Department relate to increased
wastewater costs as a result of the City of San Diego's Pure Water Program and prior fiscal years'
true up of metro system expenses, increased gas and electricity costs, as well as inflationary
adjustments included in previously approved agreements. Additionally, the Public Works division
budgets include increased costs associated with the quantity of hazardous waste removal and
new and increased regulatory fees to agencies.
City Management is recommending approval of four new budget items requested by the Public
Works Department. These include the SeeClickFix mobile resident report application. This will
replace the current tool the City is using (YourGov) which is no longer being supported. This
application will provide a better mechanism for residents to report issues to the City. Additionally,
requests were submitted to send a Stormwater employee to new regulatory compliance training,
as well as to replace the aging Heavy Duty Tire Changer used by the City's Fleet Division. The
final item, which is reflected in the Water Enterprise Fund budget described later in this report, is
a Water Information Management System that will be used by staff to track data that the City is
required to report to regional and state agencies.
The Capital Facilities Replacement/Refurbishment program, jointly administered by Public Works
Facilities and Development Services Capital Projects, incorporates projects identified by the
facility maintenance needs assessment study completed in FY 2016-17. To address an increased
volume of necessary maintenance projects, beginning in FY 2017-18 staff recommended
increasing the General Fund contribution for capital facilities maintenance by 20 percent annually
for five or more years to prevent depletion of the Capital Facilities Fund. For FY 2019-20, a
proposal was submitted for $430,000 to pay for design of several items identified in the facility
maintenance needs assessment study for the PCPA. It is estimated the actual costs of the project
will exceed $4 million and the comprehensive nature of the work itself would likely result in the
need for an extended closure of the facility. City Management is not recommending approval of
the design funds at this time. Rather it is suggested that a separate City Council Workshop be
held to provide an opportunity for a holistic discussion on operating, maintenance, and capital
expenses at this facility.
Safety Services: The City's contract with the County of San Diego for Law Enforcement Services
for FY 2019-20 continues in its third year at a cost of $13.49 million. The City, along with the eight
other cities in San Diego County that contract with the County for law enforcement services, is
currently in a 5-year contract with the County of San Diego. Costs have risen by $825,351
compared to the current year, after applying a 5.5 percent contract increase as well as restoring
one detective position. There are several reasons for restoring the position including increased
team efficiency, better customer service, officer safety, and increased flexibility. Individual
caseloads have become two to three times what other contract city detectives handle with each
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June 18, 2019, Item #3.1
handling in excess of 50-60 cases routinely. This number of cases is not manageable in terms of
conducting reasonable investigations in a timely manner. Decreased respective caseloads allow
for better efficiency and better customer service as detectives can give more attention to individual
cases. Officer safety is increased. Detectives go into the field in pairs at minimum when contacting
suspects. Having an odd number (3) detectives decreases efficiency when more than one contact
needs to be made. To offset some of the costs of the new detective, the Sheriff's Captain is
recommending eliminating a non-sworn Community Services Officer (CSO). The CSO position
will be absorbed by the department in another location, so the individual will still be employed.
The CSO position can only perform a limited number of duties. Both CSO positions perform the
same function, so eliminating one position will not eliminate a particular service to the city. The
proposed FY 2019-20 budget does include the recommendation to restore the detective position
and eliminate a CSO position, this change adds additional $120,000 to the law enforcement
contract.
There are two significant capital equipment purchases included in the Fire portion of the Safety
Services budget. In FY 2019-20, the City will begin the NextGen Regional Communication
System (RCS) Radio Upgrade. The RCS system provides for seamless communication between
all regional agencies in San Diego and Imperial Counties. The RCS infrastructure is currently in
the process of being upgraded, the City of Poway is a financial partner in that upgrade. It is now
time to begin replacing the RCS radios to operate on the new system. The radios will be
purchased over a three year period for a total cost to the City of approximately $335,000. The
majority of the costs will be borne by the General Fund, as they are in the Safety Services budget,
however some costs will also be shared by the Water and Sewer Enterprise funds depending
upon which division has the radios.
The second significant project is the replacement of the Self Contained Breathing Apparatus
(SCBAs) used by Fire Personnel. Staff is in the process of applying for a grant to cover the
majority of the $355,000 replacement costs, the proposed Safety Services budget includes the
10% grant match. However, if the City is unsuccessful in obtaining the grant funds, the General
Fund will need to pay for the full replacement costs as the equipment is at the end of its lifecycle.
Human Resources and Risk Management: There are no notable changes in the Human
Resources and Risk Management budgets.
Capital Improvement Program (GIP): The City's CIP division is fully staffed with the addition of an
Associate Civil Engineer and a limited term Construction Project Manager in FY 2018-19. The
division will oversee 36 active and proposed projects in the coming year, with $5.32 million
appropriated in FY 2019-20 for a total of $46.32 million in appropriations for these projects.
In 2014, assessments of the City's water distribution system and water treatment plant were
completed. A ten-year water CIP was developed from the assessments. The projects identified
in the ten-year CIP are incorporated into the annual water rate setting process and are also being
incorporated into the new water and sewer rate study which will be presented to the City Council
in fall 2019. Previously funded projects currently under design include the Clearwell Upgrades
(design previously funded), Annual Water Valve Replacement, and Water Treatment Plant
Clearwell Distribution Flow Meters. The Buehler Reservoir Rehabilitation and Treatment Plant
Washwater Tank Upgrades are under construction. The Boulder Mountain Reservoir I & II
Rehabilitation has been fully designed but construction is not scheduled to occur until FY 2020-
21. The project was previously delayed due to staff workload and the requirements for
construction during winter months. The Chemical Building and Tank Farm Upgrades project is
scheduled to be awarded at the June 18, 2019 City Council meeting. Several other water projects
were previously funded and are on-going and in various stages of completion. Water funding in
the amount of $2.31 million is being requested this year and will be used for construction of the
Clearwell Upgrades project along with continued annual funding for the Water Valve Replacement
project.
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June 18, 2019, Item #3.1
In 2013, an assessment was completed for the City's sanitary sewer distribution system. A ten-
year sewer CIP was developed and included both capacity increasing projects and maintenance
projects. The projects identified in the ten-year CIP are incorporated into the annual sewer rate
setting process, as well as the new water and sewer rate study that is currently being developed.
The proposed FY 2019-20 budget requests sewer funding in the amount of $1.15 million to be
used for construction of the Exposed Sewer East of Martincoit project, a sewer replacement
project, and the Annual Manhole Rehabilitation project, which is ongoing maintenance of the
City's sewer manholes. Previously funded projects include the Martincoit Road Sewer Upsize,
Butterfield Trail Sewer Upsize, and the Annual Sewer Line Repair/Replace projects. The
Martincoit Road Sewer Upsize project will be under construction this summer and the Annual
Sewer Line Repair/Replace project is currently under construction for replacement of a sewer line
on Pomerado Road at Stone Canyon Road. The Butterfield Trail Sewer Upsize project design
has not yet started. It was placed on hold due to potential development of the former Stoneridge
Golf Course.
FY 2019-20 street projects include funding in the amount of $1.01 million for the construction
phase of the Espola Road Bike Lanes project which will install bike lanes on Espola Road between
Poway Road and Range Park Road, the Neighborhood Sidewalks project, which will add
sidewalks in the Powers Road and Garden Road areas, and the Traffic Signal Controller
Upgrades project which is an ongoing program to upgrade the City's aging signal controllers. On-
going, previously funded projects include the Espola Road Safety Improvements, Poway Road
Turn Pocket Extension, and LED Street & Safety Lighting Conversion projects. The Espola Road
Safety Improvements project is in the utility undergrounding phase. The Poway Road Turn Pocket
Extension project was recently awarded and is expected to be constructed this summer. The
LED Street & Safety Lighting Conversion project is being completed under a design-build method
and the award of contract will be presented to City Council at an upcoming Council meeting.
Drainage funding in the amount of $580,000 will be used for the City's Annual Corrugated Metal
Piping Replacement and for the Sebago Avenue Channel Repairs projects. It will also be used
for the Annual Trash Capture Program, which is an unfunded mandate by the Regional Water
Quality Control Board to capture all trash greater than 5mm, essentially anything larger than a
cigarette butt, in Priority Land Use areas (PLUs). PLUs include areas classified as commercial,
industrial, and high density residential as well as transit stops. The City has 10 years to comply
with the mandate and will be requesting funding for this project each year until the City is
compliant. The Rattlesnake Creek Integrity Study, which is previously funded, is in preliminary
design and a Request for Proposals for design services has been issued.
The Americans with Disabilities Act (ADA) Barrier Removal project will address accessibility
issues at Lake Poway Park in accordance with the ADA. The project is funded with Community
Development Block Grant (CDBG) grant funds in the amount of $83,362. Other previously funded
park projects include the Valle Verde Playground Renovation and Blue Sky Amphitheater
Improvements, both of which are currently under design.
In FY 2019-20, $177,480 is being requested for Public Facilities Renovation. This is a series of
maintenance projects that are typically managed by the Public Works Department. This year's
maintenance includes painting at various City facilities, such as the Kumeyaay building exterior,
Train Depot exterior, and the Library Courtyard among several others. It also includes general
maintenance of the City's monument signs, repairs at the Old Poway Park Gazebo, and other
facility repairs as needed. Finally, the pumps and flocculators at the Water Treatment Plant will
be prepped and painted. Other previously funded Government Buildings projects include the
PCPA Fire Curtain/Smoke Vent (smoke hatch winch modification) project which was recently
awarded by City Council and the Photovoltaic Systems project, located adjacent to Fire Station
3, which is in design and will be the subject of a future City Council Workshop. The Mickey
Cafagna Community Center is currently out to bid with construction scheduled to start in
September.
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June 18, 2019, Item #3.1
General Fund Summary
As depicted in the following table, total General Fund sources (revenues) for FY 2019-20 are
projected to be $49.53 million, representing an increase of 0.24% over the FY 2018-19 midyear
projection. Property Tax and Sales Tax revenue, combined, represent approximately 7 4.1 % of
all General Fund sources.
General Fund Sources (in millions)
Property Tax
Sales Tax
Franchise Fees/Interest Income/Rent
Community Services Fees
Development Fees
Fire Protection/Safety Fees
All Other Sources/Transfers
$22.65
$14.05
$4.49
$2.56
$1.98
$2.28
$1.52
General Fund Total $49.53
In FY 2019-20, the City's revenue from Property Tax is expected to increase by $447,134 over
the FY 18-19 midyear projection to $22.9 million. Although there is an overall increase, the
distribution the City receives from the Successor Agency Redevelopment Property Tax Trust
Fund (RPTTF) is included in this amount and that revenue is expected to decline slightly in FY
2019-20. The decrease is a contrary to previous years' growth in this revenue source. Revenue
from RPTTF distributions remains challenging to project, given the complexity of the required
calculation method, and the City's reliance on the County for determination of distribution to
agencies. Additionally, Poway, along with other cities, continues to be part of an ongoing lawsuit
against the County of San Diego challenging the County's calculation for the distribution for this
revenue.
Sales Tax revenue is projected at $14.05 million, a slight decline from the FY 2018-19 midyear
projection of $14.2 million. The decline in revenue can be attributed to a slightly slowing economy,
as well as potential reporting issues associated with the recent transfer of the State Sales Tax
reporting function from the State Board of Equalization to the California Department of Tax and
Fee Administration (CDTFA).
As depicted in the following table, General Fund operating uses (expenditures) coupled with
allocations for capital projects, debt service and other non-operating obligations, total $48.97
million for FY 2019-20.
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General Fund Uses (in millions)
Law Enforcement
Fire
Community Services, Parks Maintenance*
Development Services
Public Works, Street Maintenance
Administrative and Legislative, Finance, Human
Resources & Risk Management
CIP/Other Non-Operating
$13.49
$12.91
$8.96
$4.95
$3.29
$4.04
$1.33
General Fund Total $48.97
*Parks Maintenance is included in the Public Works Department
June 18, 2019, Item #3.1
Consistent with the City's Reserve Policy, which calls for maintaining a General Fund reserve
equivalent to 45% of the annual operating budget, the Proposed Budget for FY 2019-20 results
in an updated reserve level of $20.87 million, as follows:
Risk-Based Reserves (in millions) FY 2017-18 FY 2018-19 FY 2019-20
Revenue Volatility Reserve Fund
Expenditure Volatility Reserve Fund
Extreme Events Reserve Fund
$4.32
$2.16
$12.97
$4.65
$2.33
$13.95
$4.64
$2.32
$13.91
TOTAL $19.45 $20.93 $20.87
In order to meet the updated reserve requirement of $20.87 million, the adopting resolution
commits $437,208 to the Revenue/ Expenditure Volatility and Extreme Events Reserve funds. A
one-time reduction in typical reserve funding requirements is being displayed below due to a
refinement of the definition of operating expenditures. After careful analysis, it was determined
that the total amount budgeted for capital equipment replacement (which is designated in a
separate fund for the purchase of equipment) can be backed out of the amount upon which the
45% is calculated. This is due to the fact that through rental payments built in to the operating
budget for capital equipment and vehicle replacement, as well as capital facilities costs, the City
is saving for these purchases and it did not make sense to also include the rental payments in the
calculation of the General Fund reserves. Because of this change, there is positive impact to the
General Fund this upcoming year as the "surplus" reserve amount is credited with the necessary
funding in FY 2019-20. After accounting for all General Fund operating expenditure and revenue
activity, non-recurring/one-time sources and uses, and the additional contribution for reserves,
$3.49 million in undesignated funds remain.
General Fund Uses (in millions)
Estimated Undesignated Fund Balance at June 30, 2019
Fiscal Year 2019-20 Projected Change to Fund Balance from
Operations
Reserve Requirement Funding
One-time Reserve Calculation Refinement
Net Fiscal Year 2019-20 Projected Change to Fund Balance
$2,876,024
553,951
(437,208)
499,636
$116,743
Estimated Undesignated Fund Balance at June 30, 2020 $3,492,403
Fiscal Forecast for the General Fund
Staff has updated the fiscal forecast for the General Fund, using the FY 2019-20 Proposed Budget
as the base year. As staff looks at the national, state, and local economy, and confers with the
City's sales tax consultant, there are signs of the economy slowing. Recent budget reports
included concerns that revenue growth was being outpaced by expenditure growth. This trend
continues in FY 2019-20 and beyond as we see sales tax projected to dip slightly over the FY
2018-19 approved budget and one of the few revenue sources that the City had seen growth in
beyond inflationary type increases, RPTTF revenue, is projected to decrease for FY 2019-20.
Looking ahead to FY 2020-21, staff is projecting little more than cost of living type of adjustment
to revenues. Poway is a mature city with little new growth which creates limited opportunity to
generate new revenues to fund General Fund operating expenditures. However, efforts are
underway to implement the Poway Road Specific Plan which was adopted in 2017. In FY 2018-
19, The Outpost project broke ground on Poway Road. This is a mixed-use development project
that will include retail uses, as well as new housing units. The City also recently entered into a
Purchase, Sale, and Development Agreement, with Poway Commons, LLC for another mixed-
use development project on several City and Housing Authority owned properties on Poway
Road. Together The Outpost project, and the Poway Commons project present opportunities to
revitalize the Poway Road Corridor to attract new businesses which will create new housing
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June 18, 2019, Item #3.1
options, as well as new retail and dining opportunities for Poway residents and visitors to the city.
It is also anticipated the projects will generate new sales tax revenue, as well as higher property
tax revenue as a result of higher assessed property valuations.
The fiscal forecast for FY 2020-21 at this point reflects a 1 % growth in operating expenditures
beyond known PERS increases and law enforcement contract increases. As noted earlier in this
report, at this time labor negotiations are still underway and neither the proposed FY 2019-20
budget or the early numbers presented for FY 2020-21 reflect any type of across the board salary
increases. There is an assumption that the City will provide some funding to new GIP projects
that will be funded by the General Fund in FY 2020-21. Even with these very modest assumptions,
the General Fund budget appears to be out of balance after accounting for the additional
contribution to maintain the General Fund Reserves at the 45% policy level and that is with using
the refined definition of operating expenditures that significantly reduced the contribution in FY
2019-20. The growth in expenditures is again largely driven by increased pension costs, that are
projected to continue to growth every year with no real relief until the late 2030s/early 2040s. As
described in the actuary report presented to the City Council in September 2018, there is little
opportunity to pass the employer costs on to employees and offering a different retirement benefit
to new employees is not an option unless the City were to completely buy out of the PERS. The
projected cost to buy out of PERS was between $170 million and $203 million at the time the
report was presented to Council in 2018 and the City would still need to develop and fund an
alternative retirement program for employees. In FY 2020-21 the City will enter its fourth year of
a five year contract with the County for law enforcement services. While the contract increase is
lower for FY 2020-21 than the prior three fiscal years, it still represents an increased cost to the
General Fund.
In addition to the projected increases in operating expenditures, there are several projects and
issues on the horizon that are not built in to the fiscal forecast but have the potential to significantly
impact the budget. While it is possible that the undesignated fund balance described in the prior
section could be utilized to fund some of the items described below, the totality of these items
exceeds the projected undesignated fund balance reflected in the fiscal forecast. Short-term
issues include the opening of bids for the Mickey Cafagna Community Center. While a
professional construction cost estimator was hired during the development of the plans, until bids
are open, the City will not know how close the estimates are to actual costs. The City Council is
planning a follow up workshop on Landscape Maintenance Districts (LMD) 83-1 and 86-1 in July
2019 and could make decisions that involve General Fund dollars. The City does plan to go back
out to bid for the remainder of the Espola Road Safety Improvements project and additional funds
may be needed for the project depending upon where bids come in. While the majority of the
details are confidential since they involve a specific taxpayer, the City is activity appealing a recent
decision by the State to redistribute sales tax dollars received by the City in 2005. The outcome
of the appeal may not be known in FY 2019-20.
The National Pollution Discharge Elimination System (NPDES) permit from the San Diego
Regional Water Quality Control Board (RWQCB) requires municipalities and agencies to
participate in the development and implementation of Water Quality Improvement Plans (WQIP)
for each watershed in their jurisdiction. Poway is a part of the San Dieguito and Los Penasquitos
Watersheds. In 2014, the City Council approved the WQIP Development and Cost Sharing
Agreements for the Los Penasquitos and San Dieguito watersheds. As part of the WQI Ps
copermittees are required to participate jointly in projects. Since the WQIP agreements were last
in front of the City Council, a major lagoon restoration project has been developed to address
sediment issues in the Los Penasquitos Lagoon. Poway's estimated share of Phase I of the
project is in excess of $6 million, which the City currently has no funding set-aside for. City staff
is actively working with our stormwater consultant to confirm Poway's appropriate share of the
project and evaluate potential alternative projects within City of Poway limits. The proposed
project has not yet come to Council for consideration, as the City of San Diego (the lead agency),
is developing a memorandum of understanding that all participating agencies will need to
approve.
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June 18, 2019, Item #3.1
Landscape Maintenance Districts (LMDs)
The proposed FY 2019-20 budget includes changes to LMD 86-2A and 86-3A to reduce
maintenance to a Service Level "C". The service level reduction will not decrease the frequency
of watering days in these landscaped areas, which is currently set for three days a
week. However, the frequency of certain routine maintenance performed by the City's landscape
contractor will be reduced. Decreases in proposed operating expenditures have been made due
to insufficient revenues in those districts. Assessments in LMD 86-28 are increasing by 3. 7% to
replenish the district reserves.
Decreases in proposed operating expenditures have been made due to insufficient revenues in
those districts. Assessments in LMD 86-28 are increasing by 3. 7% to replenish the district
reserves.
The City recently completed a Proposition 218 ballot measure to split off a portion of LMD 87-1
and form a new LMD 19-1. The ballot measure was successful therefore the proposed FY 2019-
20 budget reflects the new LMD.
The City Council will be holding a workshop on July 16, 2019 to further discuss the
recommendations of the citizen LMD Advisory Group regarding LMD 83-1 and 86-1. The
proposed budget does not include any changes to either of these LMDs.
Water and Sewer Utilities
The FY 2019-20 Budget includes $27.6 million in expenditures for water utilities. Revenue from
customer charges and fees is used to recover water operating expenditures and the annual
ongoing contribution for system rehabilitation. The drought recovery surcharge of $0.75 per unit
(748 gallons) was discontinued in December 2018. The surcharge was originally adopted
effective January 2016 to address the loss of revenue resulting from State imposed water
conservation, to restore the City's Water Fund to the policy goal and ensure the City's ability to
recover the cost and operation and maintenance of the City's water system. Additionally, Staff
is concerned about future pressure on water rates including new legislation signed by the
Governor that establishes a 55 gallons per capita daily (GPCD) indoor water use standard, that
decreases to 50 GPCD beginning January 1, 2030. Additional state regulations, as well as future
usage patterns within Poway, will have an impact on water rates going forward.
During the 2019 water and sewer rate setting process, the City Council directed staff to initiate a
new water and sewer rate study. The contract for completing the study was awarded in FY 2018-
19, the study is in progress. Staff is planning to hold a series of public workshops this fall during
which the City Council and members of the public will have an opportunity to review and comment
on different rate structure options prior to the City Council making a final selection for the 2020
rate setting process.
The proposed budget also includes $10.7 million in expenditures for sewer utility operations,
ongoing maintenance, administration, and capital projects. The FY 2018-19 sewer rates do not
fully recover the operating and capital costs of sewer operations. Additionally, as a member of
the Metro Wastewater Joint Powers Authority, it is expected that the majority of the Sewer Fund's
current fund balance will be needed for Poway's share of the Pure Water Program. One of the
benefits of the Pure Water Program is to divert sewage flow from the Point Loma Treatment Plant
which should lower the City's sewer treatment costs. It is also hoped that the Pure Water Program
obviates the need for the Point Loma Sewer Treatment Plant to upgrade to secondary treatment.
Budget Review Committee
The Budget Review Committee completed a comprehensive review of the proposed FY 2019-20
Budget at multiple meetings held in April and May. Their report of recommendations is attached
to this report as Attachment C. The Committee Chair, Brian Pepin, plans to be present at the
public hearing to comment on the Committee's report and respond to any questions from the City
Council.
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June 18, 2019, Item #3.1
Adopting Resolution
Attached to this report (Attachment D) is a resolution to adopt the FY 2019 -20 Comprehensive
Financial Plan, and authorize all necessary appropriations.
Environmental Review:
This item is not subject to CEQA review.
Fiscal Impact:
As stated throughout the report.
Public Notification:
Public Notice was published in the Poway News Chieftain on June 6 and 13, 2019.
Attachments:
A General Fund Budget Summary and Fiscal Forecast
B. Goals and Objectives for FY 2019-20
C. Report of Recommendations by the Budget Review Committee
D. FY 2019-20 City Budget Adoption Resolution
E. FY 2019-20 Proposed Comprehensive Financial Plan (on file with the Office of the City
Clerk)
Reviewed/Approved By :
Wend Kase rm an
Assistant City Manager
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Reviewed By :
Alan Fenstermacher
City Attorney
Approved By:
c ~
City Manager
June 18, 2019, Item #3.1
General Fund
Sources & Uses Summary FY 2017-18 FY 2018-19 FY 2018-19 FY 2019-20 FY2020-21 !
REVENUES: Actual Adopted Midyear Proposed Forecast
Operating
Property Tax 15,500,915 15,784,960 16,035,924 16,641,960 17,141,220 3.00%
Property Tax-Allocation ABXI 26 Trust 5,738,588 6,072,970 6,168,982 6,010,080 6,220,430 3.50%
Admin. Allowance ABXI 26 Trust 432,838 250,000 250,000 250,000 250,000 0.00%
Sales Tax 13,981,478 14,105,860 14,200,000 14,050,000 14,331,000 2.00%
Interest Income/Rental of Property 1,985,571 1,862,220 2,103,933 2,098,418 2,044,970 1.00%
Franchise Fees 2,419,022 2,351,990 2,422,753 2,394,250 2,442,140 2.00%
Development Fees 2,108,350 2,132,410 1,753,661 1,975,012 2,014,510 2.00%
Community Services Fees 2,403,709 2,458,330 2,493,038 2,561,798 2,613,030 2.00%
Safety Services Fees 2,043,234 1,567,700 2,041,739 1,643,832 1,676,710 2.00%
Transient Occupancy Tax 654,235 680,230 680,405 700,820 714,840 2.00%
All Other Revenue Items 545,786 485,650 480,536 460,560 469,770 2.00%
Subtotal Operating Revenues 47,813,726 47,752,320 48,630,971 48,786,730 49,918,620 2.32%
Non-Operating Sources:
Fire Protection Fees 636,178 633,000 633,000 635,700 635,700 0.00%
COPPS Grant 129,324 100,000 139,416 100,000 100,000 0.00%
Library Fund Interest Income 2,856 2,430 3,427 4,110 4,110 0.00%
Grand Total Revenues 48,582,084 48,487,750 49,406,814 49,526,540 50,658,430
EXPENDITURES:
Legislative & Administrative 1,085,043 1,214,968 1,240,642 1,152,894 1,181,218 2.46%
Finance 1,612,560 1,823,262 1,842,722 1,772,646 1,807,959 1.99%
Human Resources & Risk Management 1,019,145 1,116,376 1,133,721 1,109,862 1,132,116 2.01%
Community Services 5,750,689 6,205,480 6,022,631 6,150,127 6,285,030 2.19%
Development Services 4,468,523 4,920,905 4,378,982 4,949,799 5,052,428 2.07%
Public Works 4,343,424 4,931,363 4,857,151 5,009,188 5,048,638 0.79%
Safety Services -Fire 12,207,895 12,566,870 13,005,357 12,908,303 13,206,172 2.31%
Safetv Services -Law Enforcement 11,976,275 12,666,410 12,727,066 13,491,761 14,165,680 5.00%
Subtotal General Fund Oper. Expen. 42,463,554 45,445,634 45,208,272 46,544,580 47,879,240 2.87%
Street Maintenance 1,100,000 1,067,000 1,067,000 1,100,000 1,100,000 0.00%
Allowance for Savinos -{491,688 -{495,792) {505,703) 2.00%
General Fund Operating Expenditures 43,563,554 46,020,946 46,275,272 47,148,788 48,473,537 2.81%
Ongoing Non-Operating Expenditures
City Office Building Debt Service 661,232 661,910 631,407 631,407 631,410 0.00%
Facilities Replacement 477,432 565,920 565,920 679,100 814,920 20.00%
General Fund Share-LMDs & Street Lights 375,529 386,920 386,920 410,794 421,060 2.50%
Grand Total Expenditures 45,0TT,747 47,635,696 47,859,519 48,870,089 50,340,927 3.01%
Net Operating/Ongoing Non-Operating 3,504,337 852,054 1,547,295 656,451 317,503
CIP/Programs/Transfer to Trusts {1,376,335) (527,500) (527,500) (2,500) (250,000)
Transfer to Capital Improvement Fund (502,950)
Transfer to Expenditure Reserve (LMDs) (265,530)
Transfer to Cafagna Comm. Center (1,765,624)
Transfer to Litigation Contingency (100,000) (100,000)
Transfer to Hazard Mit Program (500,000)
Surcharge Loan to Water Fund 401,250 537,620 537,620 -
Limited Term Transfers-in/Misc 88,268 56,160 56,160 -
Net Change to General Fund Balance 2,114,570 918,334 (1,017,579) 553,951 67,503
Fund Balance Before One-Time Items 5,113,462 7,528,127 5,592,214 3,429,976 2,909,594 !
Reserve Designation (additional) (669,430) (1,477,210) (1,477,21 O) (43-cn7} i
!Total Undesignated II 4,444,032 11 6,050,917 II 4,115,004 I 2,992,100 2,.>uo,,,,11 I
One-Time Revenues:
RPTTF 83,901
Auto Storage Lot
Sale Big Stone Lodge Property 820,000
RPTTF -Poway Rd Property 138,291
Poinsettia Note 1,023,958
Park & Street Loan Repayment 569,220
Reduction in Reserves due to new calc 499,636
Other One-Time Revenues 99,611
Net Change to General Fund Balance 2,165,761 569,220 499,636
-0.00%
!Fund Balance II 6,609,793 11 6,050,917 II 4,684,224 I 3,492,404 2,308,997 0.00% I
One-Time Anticipated Expenditures: □ Litigation 1,808,200
Fire Equip. -SCBA 319,500
RCS Radios 330,812
Estimated Fund Balance I 6,609,793 I ~ 2,842,092 2,308,997 0.00% !
12 of 37 ATTACHMENT A
June 18, 2019, Item #3.1
CITY OF POWAY
Goals and Objectives
July 1, 2019 -June 30, 2020
13 of 37 ATTACHMENT B
June 18, 2019, Item #3.1
City Council
LEGISLATIVE & ADMINISTRATIVE DEPARTMENT
Goals and Objectives
July 1, 2019 -June 30, 2020
1. Oversee Legislation and Services
Provide legislative guidance and direction for the establishment and maintenance of City
programs and services. Provide an open forum for direct public input and an avenue for
resolving community issues .
2. Ensure the City's Continued Fiscal Health
Uphold the City's commitment to the Council's Financial Policy and its principles.
City Clerk
1. Implement the Newly Revised Records Management Program Citywide
Conduct employee training on records management policies and procedures ensuring
compliance with all applicable state and federal laws.
2. Comprehensive Review of Records Stored Off and On-site
Implement a systematic review of City records stored off-site and apply adopted retention policy
to the documents while imaging those records identified as permanent into the City's electronic
records document management system. Provide each department with a Departmental Records
Action Plan to follow and ensure that they are meeting the outlined scheduled benchmarks.
City Attorney
1. Provide Legal Review and Advice
Assist the City Council in developing policies based on sound legal principles that enable the
City to accomplish its goals and objectives .
2. Remain Accessible and Responsive to City Officials and Staff
Keep the City Council and staff apprised of legislative and legal developments that may affect
the City . Continue to provide timely responses to requests and maintaining appropriate office
hou rs and as -needed availability.
3. Conduct an Incremental Review of the Poway Municipal Code
In collaboration with the City Manager's Office conduct an incremental and comprehensive
review of the Poway Municipal Code , amending chapters and sections as needed.
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June 18, 2019, Item #3.1
C ity Manager
1. Ensure Effective and Efficient Delivery of Municipal Services
Ensure that municipal services are provided in the most efficient, effective, and responsive
manner possible to meet the needs and desired service levels of the community.
2. Continued Emphasis on Strong Financial Planning and Fiscal Health of the City
Continue emphasis on strong financial planning by maintaining a balanced budget , reducing the
cost of City services, using precise cost allocation to City funds, and improving cost recovery user
fees.
3. Mickey Cafagna Community Center
Continue to ensure efficient, timely and cost-effective capital project management of the Mickey
Cafagna Community Center including the commencement of construction in August 2019 .
4. Legislative Advocacy
Research and monitor state legislation. Promote the interests of the Poway community by
influencing policy decisions that affect cities and preserve local control and local funding.
Economic Development
1. Strengthen the Business Community
Assist businesses by facilitating business workshops , providing online resources and referrals to
business services and financing resources , conducting business site visits , giving assistance to
accessing City Hall services , and facilitating business networking opportunities .
Coordinate business attraction efforts by utilizing targeted marketing strategies, promoting Poway's
exceptional quality of life , disseminating customized market and trade area data (site specific labor
force , consumer spending , wage , businesses , and demographic data), attending trade shows ,
giving tours , providing land use and zoning information, and identifying ava ilable sites for business
growth and expansion.
2. Coordinate the Development of a Mixed-Use Project in the Town Center
Staff will work with the developer to ensure all project milestones are met in accordance with the
Schedule of Performance. Major milestones for the FY 20 including the developer bringing the
project entitlements to the City Council in the third quarter of FY 20 and the close of escrow on the
former Redevelopment Agency and Housing Authority properties in the fourth quarter of FY20.
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June 18, 2019, Item #3.1
FINANCE DEPARTMENT
Goals and Objectives
July 1, 2019 -June 30, 2020
1. Enterprise Resource Planning (ERP) System -CAFR Builder Implementation
In conjunction with the transition to Munis, the City purchased a CAFR (Comprehensive Annual
Financial Report) builder program to automate the production of the document. With assistance
from the City's audit firm , initial setup will occur in FY 2019-20 and it is anticipated the FY 2019-
20 CAFR will be developed utilizing this program.
Managed by: Donna Goldsmith, Director of Finance
Brad Rosen, Information Technology Manager
2. Utility Billing System Customer Web-Portal Implementation
I.T. and Customer Services will work together on the conversion to a new customer web-portal ,
including a public information campaign and the implementation of improved online payments ,
consumption information, and account management.
Managed by: Brad Rosen, Information Technology Manager
Nicole Murphy, Acting Customer Services Supervisor
3. Water and Sewer Rate Cost of Service Study
A Cost of Service Study (COSS) will assess and evaluate the City's current water and sewer
rates and potentially establish new rate structure(s) that will adequately balance the short and
long-term financial sustainability of the City's water and sewer enterprises. The proposed rate
structure(s) should demonstrate that each ratepayer class is paying its proportionate share of
costs and also meeting each utility's ongoing operating expenditures, capital improvement
needs, fund reserve policies, and regulatory requirements.
Managed by: Wendy Kaserman, Assistant City Manager
Donna Goldsmith, Director of Finance
Jessica Parks , Senior Management Analyst
4. Implementation of SB 998
On September 28 , 2018 , SB998 was signed into law and will go into effect on Feb ruary 1, 2020 ,
placing new restrictions on Residential Water Service Discontinuation in California. This will
require evaluation of existing policies and procedures relating to delinquent accounts and
discontinuation of water service , and possible updates to ensure compliance with the new
requirements .
Managed by: Nicole Murphy, Acting Customer Services Supervisor
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June 18, 2019, Item #3.1
HUMAN RESOURCES & RISK MANAGEMENT DEPARTMENT
Goals and Objectives
July 1, 2019 -June 30, 2020
1. Complete Labor Negotiations with the City's Bargaining Groups
Negotiations with non-safety employees represented by Teamsters and safety
employees represented by the Poway Firefighters' Association will occur in Spring
2019 , with the goal of implementing agreements in July of the new fiscal year.
Should agreements be reached in June, Human Resources will work with Finance
to implement any new terms of the Memorandum of Understanding in July.
Managed by : Jodene Dunphy , Director of HR & Risk Management
Emily Wolf, Management Analyst
2. Update and Provide Training on the City's Drug & Alcohol Free Workplace
Policy
The City's current policy is from 1996 and in need of significant revisions to
establish consistent processes for the various types of workplace testing along
with clear criteria necessary to support testing. Citywide training will be conducted
once the policy is updated with the ultimate goal of creating a safer work
environment and reducing the City's exposure to liability .
Managed by: Jodene Dunphy , Director of HR & Risk Management
Emily Wolf, Management Analyst
3. Update Personnel Policies and Procedures
Conduct a comprehensive update to the City 's Personnel Rules , including
researching and inco rporating best practices. Lead meet and confer process on
the proposed changes to the Pe rsonnel Rules w ith the bargaining groups .
Managed by: Jodene Dunphy , Director of HR & R isk Management
Emily Wolf, Management Ana lyst
4. Enterprise Resource Planning (ERP) System Implementation -Risk
Management Modules
Implement the liability , workers ' compensation and third party (subrogation) claims
management tracking modules in the City 's new ERP system . This will allow for
up to date reporting , timely responses to public records requests and greater
access to claims information.
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June 18, 2019, Item #3.1
Managed by : Jodene Dunphy, Director of HR & Risk Man ag e ment
Linda Shields , Senio r Management Analyst
5. Create a Violence Free Workplace Policy and Provide Citywide Training
Create procedures and protocols for how to handle potential workplace threats.
Train all employees on communication protocols as well as what to do when faced
with varying levels of threats in the workplace.
Managed by:
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Jodene Dunphy, Director of HR & Risk Management
Linda Shields , Senior Management Analyst
June 18, 2019, Item #3.1
COMMUNITY SERVICES DEPARTMENT
1. Review of Operations
Goals and Objectives
July 1, 2019 -June 30, 2020
Conduct trend and market research, and evaluation of existing service deliveries
so that we may continue to create enriching opportunities in the most economical
and effectual way. Bring forward improvement recommendations for City Council
consideration .
Managed by: Brenda Sylvia, Director of Community Services
Belinda Romero, Community Services Manager
2. Facility Improvements and Maintenance
Work collaboratively with other departments and organizations to foster a safe and
welcoming community by appropriately maintaining facilities and minimizing public
impact during projects.
Managed by: Brenda Sylvia, Director of Community Services
Belinda Romero, Community Services Manager
3. Collaborations and Agreements
Review and update/develop agreements with volunteer and other organizations
that help the department to provide valuable programs, which connect people in
meaningful ways.
Managed by: Brenda Sylvia , Director of Community Services
Roger Morrison, Senior Management Analyst
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June 18, 2019, Item #3.1
DEVELOPMENT SERVICES DEPARTMENT
Goals and Objectiv es
July 1, 2019 -June 30, 2020
1. Mickey Cafagna Community Center
The City Council approved the design for a new community center building at Community
Park. The building is 18,335 square feet and has the option to be expanded to 22,763
square feet. The construction documents are complete and building permits are almost
ready to be issued . The project will be out to bid in May with bid opening scheduled for
July 15 . After contract award on August 6 , construction will begin by August 26. City staff
will monitor the construction closely to ensure that the project stays on schedule and
within budget. To help achieve this goal, the City has hired a Construction Project
Manager for the duration of construction.
Managed by: Tom Frank , City Engineer
2. Espola Road Pedestrian Safety Improvements & Utility Undergrounding
This project includes the construction of a pedestrian walkway and undergrounding of
overhead utility lines. Construction began in April 2018 on the walkway improvements.
After multiple delays, the City cancelled its construction contract and plans to re-bid the
remaining walkway improvements. The 20A utility undergrounding, from Mountain Road
to Jerome Drive, began in March 2019. SDG&E has indicated that the utility
undergrounding will take 15-17 months to complete. The 208 utility undergrounding ,
from Jerome Drive to north of Northcrest Lane, is being re-designed due to gas line
conflicts. Upon completion of the re-design , City staff will evaluate the remaining
construction activities to determine the least impactful order of construction. Staff
continues to use the project webpage on the City's website , Facebook , and Twitter
accounts to communicate project updates.
Managed by: Melody Rocco , Senior Civil Engineer
3. "The Farm" at Stoneridge Golf Course
"The Farm" is a 118-acre specific plan to redevelop the former Stoneridge Golf Course .
Development Services staff will work with the developer to process entitlements for the
project including managing the Environmental Impact Report (EIR). The Farm 's Specific
Plan and EIR will be presented to City Council for consideration by Spring of 2020. The
developer desires to have City voters consider the project on the November 2020 ballot.
Managed by: David De Vries, City Planner
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June 18, 2019, Item #3.1
4. Housing Element
Objectives for the coming year include amending the City's Zoning and General Plan to
place Affordable Housing Overlay Zones on properties that were identified for such
designation in the City 's current Housing Element. This objective should be completed
by the end of the 2019 -2020 fiscal year. The Regional Housing Needs Assessment
(RHNA) Plan for the period of June 2020 through April 2029 is anticipated to be adopted
by the SANDAG Board of Director 's in October 2019 and Housing Elements are due to
the State Department of Housing and Community Development from local jurisdictions
by April 2021. The Housing Element update will begin after the RHNA plan is adopted
and an update to the Safety Element is required prior to Housing Element adoption. Staff
will conduct community workshops and draft existing conditions reports for the housing
and safety element updates during the 2019 -2020 fiscal year.
Managed by: David De Vries, City Planner
5. Traffic Safety Committee Procedures
Development Services staff will revisit the procedures for the Traffic Safety Committee .
The updated procedures will address how the public can propose agenda items, staff
report preparation, topics to be considered by the Committee and overall meeting
structure. Traffic Safety Committee meetings will be scheduled quarterly to address the
trend of increased requests for traffic calming, parking prohibitions and other traffic
related issues . The committee is comprised of City staff, representatives from the
Sheriffs Department and Poway Unified School District. The meetings are open to the
public, and the schedule and agendas will be posted on the City 's website.
Managed by: Tom Frank, City Engineer
6 . Records Management Action Plan
The City Clerk's Office and Development Services Department are working towards
reducing the burden of physical storage for City documents and restructuring current
electronic filing systems. Staff will determine eligibility for destruction of files stored with
Corodata and onsite. In addition, staff will develop standards for electronic records
storage (e.g. creating naming conventions, deleting draft documents , and developing
project closure procedures).
Managed by: Marie Sanders , Senior Management Analyst
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June 18, 2019, Item #3.1
PUBLIC WORKS DEPARTMENT
Goals and Objectives
July 1, 2019 -June 30, 2020
1. Remain engaged in local/state/federal regulatory requirements and continue
to meet or exceed existing ones.
In Fiscal Year 2018-19 several new regulatory requirements were enacted that will
be included in the Department's Fiscal Year 2019-20 work plan . New regulations
include the mandatory reporting of water loss, water-use efficiencies, dam
inundation maps and dam emergency operations. Staff will identify and develop
changes to the municipal code and operational procedures/ policies to align with
currents regulations and best management practices . Continue engagement with
the region/state over long -term water efficiency regulations, earthen channel
cleaning permit costs, and water quality monitoring.
Managed by: Eric Heidemann and Rudy Guzman
2. Safe, reliable, and efficient operation of utilities
Maintain water treatment/distribution/wastewater collection infrastructure and a
trained staff to meet regulatory requirements and ensure uninterrupted services.
Coordinate with the City of San Diego , the City's wastewater treatment provider,
to ensure fair cost allocation and implementation of the Pure Water Program. Allow
for timely adjustments in water treatment/distribution maintenance processes to
maintain water quality. Continue efforts to advocate for the equitable and fair
distribution of costs between all members of wholesale agencies.
Managed by: Rudy Guzman
3. Enhance safety equipment, practices and programs
Continue a multi -year program to provide comprehensive updates to the Cal-
OSHA written safety programs . Additionally , staff will participate in Crane
Operations and Rigging training and specialized Hazardous Waste Operations and
Emergency Response (HAZWOPER) training, designed for identifying hazards at
homeless encampments . Enhance safety practices with compliant Personal
Protective Equipment (PPE), equipment , practices and training opportunities.
Managed by: Eric Heidemann and Rudy Guzman
4. Execute high priority infrastructure maintenance
Protect public health and safety through proactive maintenance and repair of City
infrastructure . Complete the Zone 4 pavement program to maintain high roadway
infrastructure standards . Perform annual inspection and maintenance programs
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June 18, 2019, Item #3.1
on facilities , signs , storm water channels , trees , and traffic signals/street lighting.
Enhance lighting in neighborhoods by implementing the LED streetlight conversion
project City-wide .
Managed by: Eric Heidemann and Rudy Guzman
5. Proactive asset management
Utilize and enhance asset management programs and long-range facilities
planning to support maintenance and repair of the City's facilities, equipment ,
parks, open space , and trails . Ensure that vehicles and equipment are in a state
of readiness for both routine operational requirements and emergencies .
Managed by: Eric Heidemann and Rudy Guzman
6. Modernize the collection and management of utilities data
Explore electronic data collection for real-time analysis and reporting of the water
and wastewater systems .
Managed by: Rudy Guzman
7 . LMD cost recovery
Continue to maintain landscaped areas with cost effective water and maintenance
strategies. Develop long-range contingency plans for service level reductions to
meet revenue projections and unexpected repairs, based on City Council direction.
Managed by: Eric Heidemann
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June 18, 2019, Item #3.1
SAFETY SERVICES DEPARTMENT
Goals and Objectives
July 1, 2019 -June 30, 2020
1. Prevent, Reduce and Disrupt Crime in the Community
a. Hold monthly Information Managed Policing Addressing Community
Threats (IMPACT) meetings to identify, target and address prolific and
repeat offenders.
b. Conduct monthly meetings and frequent liaison with the City Manager and
Director of Safety Services to analyze crime trends and set priorities .
c. Aggressively target those engaged in drug and gang-related activities as
well as persons driving under the influence of drugs and alcohol.
d. Maintain a close and effective working relationship with all schools located
in the City of Poway and work to provide a safe environment for our youth.
e. Continue liaison with surrounding agencies to best leverage resources and
intelligence sharing.
Managed by: Jeff Duckworth, Captain, Poway Sheriff's Station
2. Provide the Highest Level of Public Safety Service to the Community
a. Utilize the Poway Criminal Apprehension Team (PCAT) and station
detectives to effectively address crime issues.
b. Continue to implement new and developing technologies and provide
advanced training and outreach to prevent and reduce crime.
c. Continue to target repeat offenders in the community through use of
intelligence and information analysis, and regular probation, parole and
compliance checks.
Managed by: Jeff Duckworth, Captain , Poway Sheriff's Station
3. Enhance Emergency Preparedness and Foster Community Engagement
a. Develop capacity, provide training and engagement opportunities for
Community Emergency Response Team (CERT) and Poway Auxiliary
Communications Team (PACT) members.
b. Provide preparedness education and safety training to community
members.
c. Seek opportunities to ensure that City staff is well-trained and prepared to
function following the City 's Emergency Operations Plan.
d. Participate in regional trainings , exercises and engagement.
Managed by: Susy Turnbull, Management Analyst
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June 18, 2019, Item #3.1
4. Maintain a High Level of Emergency Response Readiness and Service
a. Actively manage emergency response resources, service delivery and
record management systems.
b. Utilize the department's Annual Training Plan to maintain a highly trained,
well-prepared workforce of first responders .
c. Participate with regional organizations focused on emergency operations
and response to maintain awareness of issues, industry trends and
opportunities for regional service enhancement.
d. Coordinate facility and apparatus maintenance and repair activities with the
Public Works Department to ensure response readiness and employee
safety .
Managed by: Ray Fried, Fire Battalion Chief
Brian Mitchell, Fire Battalion Chief
Scott Post, Fire Battalion Chief
5. Invest in New and Updated Technologies Used in the Delivery of Safe and
Efficient Fire, Rescue and Medical Response
a. Replace the Fire Department's aging self-contained breathing apparatus
with the latest in new technology and enhanced respiratory protection.
b. Coordinate the replacement of telecommunications radio equipment
ensuring uninterrupted use on the countywide NextGen Regional
Communication System (RCS).
c. Increase the number of first responders equipped with ballistic personal
protective equipment (PPE) used during active shooter incidents .
d. Replace aging extrication rescue equipment.
Managed by: Ray Fried, Fire Battalion Chief
Brian Mitchell, Fire Battalion Chief
Scott Post, Fire Battalion Chief
6. Deliver Effective Fire and Life Safety Prevention Services
a. Deliver a high level of customer service through responsive consultations
with applicants and project coordination with the Development Services
Department.
b. Complete project review, plan check and inspection services within
established timelines.
c. Maintain a high level of community safety by performing annual fire and life
safety inspections of businesses, apartment complexes and institutions.
d. Invest in technologies to enhance the delivery of fire and life safety
inspections of businesses.
Managed by: Jon Canavan, Deputy Fire Chief
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Date:
To:
From:
Subject:
June 3, 2019
Honorable Mayor and Members of the City Council
Honorable Chairman and Members of the Housing Authority/Successor Agency
Budget Review Committee
Committee Input and Recommendations for FY 2019-2020 Proposed Budget
Honorable Mayor and Members of the City Council, we, the Members of the City of Poway's
Budget Review Committee (BRC), report our observations, findings and recommendations from
our review of the Proposed Budget for Fiscal Year 2019-2020.
I) INTRODUCTION
The City of Poway is a well-governed and well-managed city. The budget is built on good
accounting procedures and a long history of efficient, focused, and conservative revenue
application. However, despite good leadership, proficient management, and a strong local
economy providing solid tax revenues, the City of Poway is experiencing what almost every other
California public agency is experiencing: an extremely troubling financial forecast in coming
years.
The FY 2019-20 budget is balanced, but with little room to spare. It is clear that, as early as next
year, City management will be faced with difficult decisions in order to balance the budget. In as
little as two years the City may need to look at more drastic measures to balance the General Fund
budget. It is the view of this BRC that aggressive moves be made by the City, sooner rather than
later, to avoid future service cuts for Poway residents.
Ever-rising personnel costs are the largest contributing factor to the City's budget woes, driven
largely by the California Public Employees Retirement System (CalPERS), which manages the
defined-benefit pension plans of all City employees. The City Council has done a good job in
attempting to control these costs and we commend previous actions by City leadership to adopt
early pension reform efforts including establishing a Tier 2 for Classic members that carries a less
generous retirement benefit. However, it must be noted that, like any other company or
organization, personnel costs are by far the City's largest expense; those costs must be controlled
as much as possible.
This, and other factors contributing to the City's budget challenges, will be detailed in this report.
In accordance with the BRC Charter, this document details the largest issues facing the City and
provides potential solutions that can enhance Poway's financial solvency going forward.
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2) COMMENDATION OF CITY STAFF & THE BUDGET REVIEW PROCESS
As previous BRCs have noted: we, the Committee, would like to recognize the superior
competence and dedication of the City's management team. It should be noted that, during the
course of this BRC's meetings, the City transitioned between two City Managers. We commend
outgoing City Manager Tina White for her dedication to the City of Poway over the last 17 years
and recognize what appears to be a seamless transition to the new management of incoming City
Manager Chris Hazeltine.
This year's meetings of the BRC would not have been smooth or productive without the leadership
of Assistant City Manager Wendy Kaserman, Director of Finance Donna Goldsmith, and Budget
Administrator Alex Castanares. They are incredibly proficient, intelligent, and talented
professionals and Poway is fortunate to have them at the helm of our city.
We would also like to thank the City Council for maintaining the BRC's important process of
volunteer citizen review by members of the community. We believe it is a beneficial and
worthwhile endeavor for the City. The members of this committee appreciate the opportunity to
be a part of the budget process.
One additional note: We would also like to thank the members of the public who attended this
year's BRC meetings: Daniel Krall, Chris Olps and Torrey Powers. As engaged Poway residents
and former members of past BR Cs, their experience and knowledge were duly noted.
3)SUMMARY
Poway has the following challenges facing its budget:
a) High personnel costs
a. Note: The problem does not appear to be the number of employees; rather, as
mentioned above, it is the cost of total compensation per employee driven by
pensions, healthcare, and other benefits.
b) Slow revenue growth. A very high percentage of the city's revenue sources are only
projected to grow in the 2-3% range, and some not at all.
c) Unfunded state mandates such as prevailing wage requirements.
d) Unfunded regional mandates such as the looming cost of the Los Pefiasquitos Lagoon
project.
e) A number of costly items currently being funded in an unsustainable manner, primarily the
Poway Center for the Performing Arts.
These challenges can generally be classified as internal or external.
The solutions to any public agency's budget challenges can be classified into three broad
categories:
a) Cost efficiencies
a. Control and reduce personnel costs.
b. Don't fill unneeded vacancies.
c. Pursue creative "outside the box" solutions.
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June 18, 2019, Item #3.1
b) Revenue growth
a. "Growing the pie"
1. The City Council's support for the revitalization of Poway Road is
commendable and will help provide additional economic activity.
11. Other areas where economic revitalization and revenue growth can be
accomplished should be examined.
b. Examine fees
1. Cost recovery for non-Poway residents using city services is one option.
c) Service cuts
a. This is an undesirable way to address budget challenges that should be avoided if
possible. Like any city, Poway is a service-providing organization. Therefore, any
cuts to the number of personnel or operations will likely present a decrease in
service levels for Poway residents.
Additionally, it must be noted that the City's reserve level of 45% is, in reality, a smaller dollar
amount than last year because of a modification to the way that 45% is calculated. The new
calculation, which removes "rent" paid toward capital funding from the General Fund reserve,
makes sense and removes a "double-counting" toward capital replacement. However, the Council
should be aware that this revised calculation has provided additional funds (~$500k) available for
the FY 2019-2020 budget that will not be repeatable in future years.
4) CHALLENGES
Poway faces a series of internal financial challenges which can be addressed by management and
policymakers. In addition, the City faces a number of external financial challenges which are
largely outside of the city's control yet should be mitigated to the extent possible.
Internal Budget Challenges
In short, despite relatively conservative fiscal policies, Poway's budget has a structural deficiency
with the rate of increasing personnel costs exceeding the rate of revenue growth, which is
essentially flat and may decrease in the mid-term. In addition, the return rate of Poway's financial
reserves is underperforming compared to inflation and the city is effectively losing purchasing
power over time.
Internal challenges include the following:
• Rising personnel costs.
• Flat revenue increases.
• Possible inter-fund charging inefficiencies.
• Fund reserves that, while adequate under normal circumstances, may not be ample in the
event of a major emergency.
To address these challenges, the city must both reduce expenditures and increase revenues. The
expenditure reduction should be primarily through the reduction in the rate of increase in
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June 18, 2019, Item #3.1
personnel-related costs and secondarily through improvements in both fund allocation efficiency,
as well as longer-term planning to extricate Poway from regional exposure to uncontrolled
expenditure risk.
Revenue increases should be primarily through increasing the size of the property tax base and
secondarily by examining the City's user-fee structure. One avenue the Council may consider
would be the goal of a neutral net impact on the General Fund balance from some user fees,
especially for non-Poway residents.
External Budget Challenges
Public agencies, including the State of California and regional entities, are growing more
aggressive in their efforts to acquire funds from Poway. Moving forward, the City must be
increasingly aware of its exposure to external financial entanglements with which Poway has little
budgetary control. Near and mid-term examples of note are as follows:
• State-mandated regional environmental cost assignments.
• Phase one of the Los Pefiasquitos lagoon silt reduction project.
• CalPERS pension contributions.
• Unfunded mandates from the State, County, and regional agencies.
• Increasing permitting costs from the State, County, and regional agencies.
5) RECOMMENDATIONS
In addition to the specific recommendations listed below, this BRC recommends the City consider
working groups or forums on some of the biggest challenges facing the budget, such as the Poway
Center for the Performing Arts and the Planning Division.
Budget Readability
• Separate pension costs from other benefit costs in the general fund summary section to
provide a better idea of the cost fraction of personnel expenditures.
• Add percent change per reporting period to more easily display trends for each budget
reporting line.
• Incorporate visual comparators for line item numbers across years to allow for an at-a-
glance understanding of relative performance.
• Each line item needs a notation of its percent contribution to the total within its group to
quickly assess if the line-item is relatively large or small.
• Where possible, on charts and graphs, use color schemes appropriate for individuals with
color blindness.
City Management Unit (CMU) Personnel Management
City management must be extremely diligent to hire and retain only the number of personnel
needed in a given department. The BRC noticed a number of current vacancies while examining
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June 18, 2019, Item #3.1
the budget and would recommend that management start there in closely examining how many
personnel are needed for any given task.
Hiring and Vacancies
Because personnel costs are the main driver of the City's rising costs the BRC recommends that
current vacancies should be left unfilled and no new positions be created, unless absolutely
necessary for health or safety.
We also recommend that the City examine the use of seasonal and part-time staff as well as an
increased use of volunteers.
Given the current budget constraints, a committee member believes the addition of a detective to
the Sheriffs station should be reviewed.
Planning Division
To achieve cost neutrality, the BRC recommends that the Planning Division of the Development
Services Department take a close look at improving efficiencies and streamlining processes, with
the goal in mind to reduce complexity, reduce the length of time to gain project approval, and to
operate in a cost-neutral fashion. Planning should aim to be 'easy to do business with' as a means
of expediting new development and the resulting increase in property tax revenues. As an
example, two BRC members have direct experience with delays in the planning-approval process.
These have resulted in project abandonment and a loss of revenue to the General Fund.
Additionally, the BRC recommends the City Council ask the City Attorney to explore the viability
of shifting compliance responsibility for regional and state mandates to developers as a potential
way to streamline the development process and reduce costs.
When looking at expense vs fee revenue, the Planning Division continues to operate significantly
in the red ( ~$1 million per year for the last several years) and the needed improvements may be
too challenging to overcome in the required short-term time frame. Within the Development
Services Department, the City currently contracts out for traffic engineering services, as well as
building plan review and inspection services. The BRC recommends the City evaluate whether
there are opportunities for contracting out other services within the Development Services
Department.
Community Services Fees
The BRC recommends that user fees for non-Poway residents be set at a full cost-recovery level.
We recognize that this may require an updated fee study, which would carry its own associated
costs. We recommend that the Community Services Department work with the City Attorney to
determine if similar fee studies from neighboring agencies, like the City of San Diego, can be used
to expedite this process while reducing costs.
We also recommend that the Community Services Department simplify and consolidate their
multi-tier rate structure.
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June 18, 2019, Item #3.1
Poway Center for the Performing Arts
The Poway Center for the Performing Arts (PCPA) brings reputational benefits to the City of
Poway, high-quality entertainment, as well as other intangibles. However, since its inception, it
has operated significantly in the red and continues to require substantial subsidization from the
General Fund.
Given the budget crisis facing the City in coming years, the institution must be cost-neutral and
operate within its revenue stream. The City Council should provide appropriate guidance to PCP A
to eliminate its operational dependency on the general fund. Any changes in management or
programming must include capital replacement allocations for future repairs and upgrades within
its budgetary model planning forecasts. Costs appear to be coming largely from personnel costs;
those should be evaluated immediately.
In addition to an immediate look at personnel costs, the BRC is supportive of a PCP A workshop
so that the Council, staff, and members of the public can look at operating expenditures and capital
needs in order to chart a path forward to address this unsustainable drain on the general fund. This
year's budget has the Center running a budget deficiency of about $700,000.
Safety Services
Poway is fortunate to have a first-in-class fire department which provides fire protection and
emergency medical response. This great level of service includes a price tag that is second only to
the City's contract with the San Diego County Sheriffs Department.
It must be pointed out that one in every five dollars spent on employee compensation within this
department is spent on overtime, which is far and above any other department. In the past, this
large expense has been rationalized by pointing to the high pension costs and other benefits offered
to each new employee of the department, thereby making overtime for existing employees more
cost-effective. However, as more employees are hired under CalPERS Tier 3, also referred to as
PEPRA employees, overtime will not be as cost-effective as it once was. We recommend that the
City Council examine the department's overtime costs, especially once PEPRA employees
represent 50% of the Fire Department payroll. Currently, approximately 40% of Fire Department
is under PEPRA.
Mitigation of Unexpected Financial Risk
The City should make every attempt to extricate itself from financial responsibility within regional
projects where the city lacks sufficient financial oversight and control. Additionally, the City
should undertake projects, where possible, to mitigate unexpected financial risk, such as the Los
Pefiasquitos Lagoon silt reduction project, explained in more detail below.
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June 18, 2019, Item #3.1
Phase One of the Los Pefiasquitos Lagoon Silt Reduction Project
This is a regional project based on newly-decreed environmental criteria, for which Poway is
currently responsible for between $6 to $8 million and only represents the first phase of a project
with an unknown total cost. If possible, Poway must think outside the box and, if needed, undertake
local projects to reduce this massive financial liability. Wherever possible, capital expenditures
and projects should be planned in such a way as to reduce Poway's financial and legal exposures
to regional agreements or state mandates, or to reduce continuing operating expenses. Outside-the-
box solutions should be considered given the high cost of this liability.
LED Streetlight Retrofit
One approach to mitigate the risk of unexpected project cost increases with regards to the
conversion of the current LPS street lights to LEDs would be to utilize design considerations that,
to the extent possible, mirror current streetlight color profile and intensity. This would reduce the
likelihood of extensive shielding retrofit requests that may occur in a project that interfaces with
such a large segment of Poway' s population.
Information Technology (IT)
Poway has a well-funded and well-managed IT division that provides enhanced service and
efficiency across all City departments. Cybersecurity threats are an ongoing concern, particularly
with the relatively recent rise of weaponized MilSpec grade computer exploit tools becoming
available to civilian criminal enterprises. The results of these are seen on a daily or weekly basis
through "ransomware" attacks upon public agencies and specific departments. While Poway does
maintain JPIA liability insurance against these types of incidents, reputational damage can be
incalculable if the City falls victim to such an assault and is unable to quickly recover through the
use of offsite backups.
A public observer informed in this field detailed the need for a series of staggered computer
information backup types, one of which would be "cold" storage, which generally refers to
backups that are very challenging to alter once made. We encourage management to consider this
proposal and recognize that, because of the quality of the IT department, that the skill needed to
implement such a system is within their internal capabilities.
Also, we recommend that the City limit the allocation of cell phones and consider removing
payment toward employees' professional licenses as ways to trim the budget.
Recurrent Project Expenses
City staff should explore operational means to reduce the frequency for which it needs to use
externally granted permits or engage in larger scale maintenance operations. These permits
represent a tool by which outside agencies can extract money from Poway's general fund.
Reducing the need for these permits can potentially save the general fund thousands of dollars.
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June 18, 2019, Item #3.1
As an example, a study could be undertaken to determine if, instead of manually cutting down and
removing excessive plant growth in the storm drainage channels, other means of invasive plant
control within the storm drainage channels would reduce overall costs. These costs analyses should
include an understanding if silt related costs would change with the process alteration. Similarly,
a study could be undertaken to determine if there exist storm channel lining options that would
reduce the frequency of the need to perform dredging operations. As in all cases, the overall cost
impacts should be considered prior to undertaking any operational changes to current practices.
Expanding the Tax Base
Beyond cost efficiencies, the single best way for the City of Poway to address the tightening budget
situation is to increase tax revenues by encouraging economic activity and encouraging businesses
to thrive in our city.
We commend the Mayor and Council for their support of revitalization projects along Poway
Road, one of the best areas in the city to support existing businesses, provide much-needed
amenities for residents, and encourage new economic activity. This will boost sales tax revenue,
property tax revenue, and help alleviate the budget problems facing Poway. As mentioned
previously, permits to support these efforts should be encouraged and streamlined.
In addition to Poway Road, we encourage the City Council to look at additional areas where
economic revitalization can be pursued in order that Poway can retain its fantastic quality-of-life
while increasing revenue growth to ensure that Powegians can enjoy a high level of city services
for many years to come.
Additionally, regulatory hurdles for the encouragement of Accessory Dwelling Units (ADU)
should be minimized to the extent possible. In addition to helping Poway's lack of affordable
market-rate housing, by definition ADUs will only occur in areas where existing infrastructure and
city services will make their relative impact upon city services minimal.
Develop a Longer-Range Financial Forecast
The BRC recommends that Finance Department consider an annual long-term look at the budget.
We believe that a five-year financial outlook (updated annually) would be a reasonable approach
to help better inform and guide the budget process each year.
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June 18, 2019, Item #3.1
RESOLUTION NO. 19-
A RESOLUTION OF THE CITY COUNCIL, HOUSING
AUTHORITY, AND SUCCESSOR AGENCY TO THE POWAY
REDEVELOPMENT AGENCY OF THE CITY OF POWAY,
CALIFORNIA, APPROVING AND ADOPTING THE ANNUAL
BUDGET FOR THE FISCAL YEAR 2019-20 AND
APPROPRIATING THE FUNDS NECESSARY TO MEET THE
EXPENDITURE SET FORTH THEREIN
I. ADOPTION OF ANNUAL BUDGET
WHEREAS, the City Manager of the City of Poway has submitted to the City Council of
the City of Poway a Fiscal Year 2019-20 Financial Plan consisting of:
• An Allocated Operating Budget in the amount of $92,138,824
• An Unallocated Operating Budget in the amount of $141,200
• A Capital Improvement Program Budget of $5,323,642
• A Multi-Year Project/Program Budget of $102,500
• Bond and Debt Redemption of $1,361,570
• Loan/Transfer net activity of $296,410
• Estimated General Fund operating revenues of $48,786,730 and other sources of
$649,810
• Proposed General Fund operating expenditures of $47,148,789, other uses of
$1,721,301, and capital improvement and program expenditures of $102,500;
WHEREAS, the City Council of the City of Poway has heretofore considered said budget
and fixed the date of June 18, 2019 as the date for holding public hearings relative to its
adoption; and
WHEREAS, following duly given notice, the City Council of the City of Poway did hold
such public hearing, receiving, considering and evaluating all public comments.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Poway as
follows:
SECTION 1: The City Manager's proposed 2019-20 Budget for general and special City
purposes is approved and adopted in the amount of $93,641,594 for expenditures (composed of
allocated expenditures of $92,138,824; unallocated expenditures of $141,200; and debt service
of $1,361,570), $5,426,142 for capital project and program expenditures; $296,410 for net City
loans and transfers; and $102,766,415 in revenues.
SECTION 2: The monies necessary to offset the expenses incurred as detailed in the
2019-20 Budget document, as adopted by the City Council for the City of Poway pursuant to
Section 2 hereof, are authorized by this section to be appropriated out of the funds available to
the City during the 2019-20 Fiscal Year.
SECTION 3: The City Manager is authorized to make such changes in department
operating, program, and capital improvement budget totals during the 2019-20 Fiscal Year as
may be, from time to time, deemed desirable and necessary in order to meet the City's needs.
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June 18, 2019, Item #3.1
Resolution No. 19-
Page 2
SECTION 4: The City Manager is authorized to reappropriate prior year's unexpended
encumbered funds as of June 30, 2019 for work in progress.
SECTION 5: Unencumbered balances remaining at June 30, 2019 for operating accounts,
excluding salaries/benefits, may be carried forward at the discretion of the City Manager to the
subsequent fiscal year.
SECTION :6 The Capital Improvement Projects of the City of Poway are in conformance
with the City of Poway Comprehensive Plan as governed by Section 65402 of the California
Government Code.
II. APPROPRIATIONS OF FUND BALANCES
WHEREAS, it has been determined that appropriating unappropriated reserve monies in
various funds in a manner corresponding to the operational mode of the City is reasonable and
proper; and
WHEREAS, funds established and monies appropriated shall not be considered as
restricted totally in their availability and use and amounts may be adjusted between funds as
necessary to serve the future needs of the City of Poway.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Poway as
follows:
SECTION 1: Any unappropriated balance in the General Fund as of June 30, 2019, shall
be automatically appropriated into the Contingency Fund therein.
SECTION 2: Any unappropriated balance in the Water Fund as of June 30, 2019, shall
be automatically appropriated into the Contingency Fund therein.
SECTION 3: Any unappropriated balance in the Sewer Fund as of June 30, 2019, shall
be automatically appropriated into the Contingency Fund therein.
Ill. COLLECTION AND EXPENDITURE OF DEVELOPER DEPOSITS
WHEREAS, deposits will be accepted in the Developer Deposit Funds (Fund 7610-7630)
during the fiscal year based upon the levels of development activity; and
WHEREAS, the City is responsible for administering these deposits, including collection
and disbursement of funds as necessary to pay for development services.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Poway as
follows:
SECTION 1: The City Council hereby authorizes expenditures of developer deposit
funds on hand on July 1, 2019, together with any funds collected during Fiscal Year 2019-20.
IV. CAPITAL IMPROVEMENT PROGRAM APPROPRIATIONS
WHEREAS, the financial plan provides for the appropriation of monies for Capital
Improvement Projects; and
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June 18, 2019, Item #3.1
WHEREAS, these projects may span multiple fiscal years.
Resolution No. 19-
Page 3
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Poway as
follows:
SECTION 1: The City Council hereby authorizes a continuing appropriation for the
balances remaining in Capital Improvement Projects active as of June 30, 2019, and directs that
the authorized appropriation shall be brought forward to be used in the Fiscal Year 2019-20
Capital Improvement Project program or until the completion of these projects.
V. COLLECTION AND EXPENDITURE OF BUILDING AND FIRE INSPECTION FEES
WHEREAS, fees collected by the City for building and fire inspection services offset the
City's contractual expenditures to provide inspection services.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Poway as
follows:
SECTION 1: The City Council hereby authorizes the expenditure of all such fees
collected during Fiscal Year 2019-20, at the discretion of the City Manager, provided that these
fees be spent for the provision of said contractual building and fire inspection services.
VI. COLLECTION AND EXPENDITURE OF DONATIONS TO TRUST FUND
WHEREAS, donations are accepted by the City for deposit to donor specified City Trust
Funds for the purpose of supporting associated programs.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Poway as
follows:
SECTION 1: The City Council hereby authorizes expenditures of donations to trust
funds on hand on July 1, 2019, together with any funds collected during Fiscal Year 2019-20, at
the discretion of the City Manager, provided that these expenditures be spent in accordance with
the purposes of the individual Trust Funds.
PASSED, ADOPTED AND APPROVED at a Regular Meeting of the City Council of the
City of Poway, California on the 18th day of June, 2019 by the following vote, to wit:
AYES:
NOES:
ABSENT:
DISQUALIFIED:
Steve Vaus, Mayor
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June 18, 2019, Item #3.1
ATTEST:
Faviola Medina, CMC, City Clerk
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Resolution No. 19-
Page 4