Item 20 - Proposed Fiscal Year 2020-21 Operating Budget and Capital Improvement ProgramDATE: TO: FROM: CONTACT: SUBJECT: Summary: June 16, 2020 Honorable Mayor and Members of the City Council Aaron Beanan, Director of Finance~ Aaron Beanan, Director of Finance (858) 668-4411 or abeanan@poway.org City of Poway CITY COUNCIL Proposed Fiscal Year 2020-21 Operating Budget and Capital Improvement Program This report presents the Proposed Operating Budget and Capital Improvement Program (Budget) for Fiscal Year (FY) 2020-21 along with the Appropriations Limit. The Budget presents a balanced General Fund and maintains reserves at the level identified in the City's General Fund Reserve Policy. Also included with this report is the City Council-appointed Budget Review Committee's report of recommendations. Recommended Action: It is recommended that the City Council take public input, close the public hearing, receive the Budget Review Committee Report, consider their recommendations and adopt the Resolutions. Discussion: The annual budget provides the financial mechanism to carry out the City's work plan and provide services to residents. For FY 2020-21 operating revenues across all funds are projected at just under $100 million while operating expenses across all funds are requested at $93 million. This operating budget supports public services such as law enforcement, fire protection, community services, streets, water and wastewater, among others. Excerpts from the City Manager's Budget Transmittal Letter are included throughout this report for the benefit of people who read this staff report but may not read the full budget document. The FY 2020-21 Budget also includes $390 thousand in program requests. Programs reflect the allocation of resources to provide specialized services. Funding for programs is often from grants or donations. The mix of program requests for FY 2020-21 is designed to provide a broad range of community services such as park maintenance, social services, recycling services, and safety services. The Capital Improvement Program (CIP) for FY 2020-21 includes just under $11 million in new requests bringing the overall appropriation total for active projects to just under $54 million. Included in this total is the construction of the Mickey Cafagna Community Center. This project is on schedule to open 1 of 25 June 16, 2020, Item #20
in May 2021 and once complete will provide a shared-use multi-generational facility for the community. Several new strategic water projects are proposed for FY 2020-21 including the initial stages of the San Diego County Water Authority (SDCWA) Treated Water Connection, Clearwell Upgrades, and Clearwell Bypass. These projects will increase the water system's safety, reliability, and resiliency by providing a redundant water source and opportunities for enhanced maintenance. Projected Economic Impacts of the Pandemic At the FY 2020-21 internal Budget kick-off meeting in January 2020 staff presented an economic outlook to departments that was positive overall. A few sectors of the economy were being watched more closely to understand their evolution overtime, but in and of themselves didn't pose a recession threat. This was consistent with other economic outlooks such as the UCLA Anderson forecast. The FY 2019-20 mid-year budget update presented to Council on March 17, 2020 projected a fiscal year end General Fund surplus of approximately $950 thousand. This was largely driven by increased revenue estimates for sales taxes, interest earnings, Successor Agency administrative reimbursements, and leases. These generally positive economic outlooks quickly changed. The Novel Coronavirus (COVID-19) global pandemic was declared a public health emergency by the World Health Organization on January 30, 2020. National, state, and local emergencies were soon declared with the City of Poway declaring an emergency on March 13, 2020. On March 18, 2020 the City Council approved Resolution 20-013 ratifying the City Manager's Declaration of Emergency. This pandemic has created an economic shock to all levels of the United States economy. As a result, staff revised revenue projections for FY 2019-20 downwards by $1.6 million. The reductions were related to decreases in sales tax ($1.4 million}, transient occupancy taxes (TOT, $0.2 million) and interest earnings ($0.07 million). This revised projection created an estimated FY 2019-20 General Fund deficit of over $600 thousand. To help mitigate the projected deficit, almost $1.7 million in retrenchment (reducing costs/spending in response to economic difficulty) was identified including holding certain positions vacant, deferring planned contracts such as the Cost Allocation Plan and deferring capital replacement charges. Additionally, the General Fund received approximately $3 million in one-time funds related to The Poway Commons Project in April 2020. This retrenchment activity will likely result in a General Fund surplus for FY 2019-20, further enhanced by the one-time revenue, which is an intentional part of staffs strategy to financially position the City so it's better able to mitigate the effects of the recession. For FY 2020-21 staff developed four potential recession scenarios, from mild to severe, to help frame the potential continuum of economic impacts to the City of Poway. Of the four scenarios, staff believes the data currently supports a moderate "V" recession. The "V" refers to the shape of the recovery when the economic data is graphed. A "V" shape occurs when the economy suffers a sharp, but brief, period of economic decline followed by a strong recovery. The moderate "V" assumes a sharp decline in economic activity followed by a moderately paced recovery. Staffs moderate 'V" scenario projects annual revenue losses between $1.5 million and $2.5 million with an anticipated duration of two years. A moderate "V" recession scenario is consistent with national and state projections by Oxford Economics, UCLA Anderson, Beacon Economics, SAN DAG and research from Harvard. Staff believes the current data still supports the moderate scenario for several reasons. First, the economic data and projections by economic houses such as UCLA Anderson and Beacon Economics in early 2020 indicated a structural recession was unlikely in the near-term. A structural recession 2 of25 June 16, 2020, Item #20
occurs from 'structural' issues in the economy, such as when the subprime mortgage crisis that created high household debt and a real estate bubble led to the 2008 Great Recession. Second, the cause of the current recession is a global pandemic that led to a widespread lockdown intended to help slow the spread of the virus. Businesses across all sectors shut down to comply with the stay at home orders which led to less consumer spending and, therefore, less business income. To mitigate reduced revenues, businesses have furloughed or laid off employees. This created an initial supply-side shock to the economy. Supply side economic shocks are typically less severe than demand side economic shocks. While the high weekly unemployment claims are concerning, there has been a massive policy response to minimize the severity of the recession, which is the third reason a moderate scenario is still likely. Research conducted by Harvard has demonstrated how impactful strong policy responses are to minimize the severity of a recession. There has been swift and significant policy action taken at the federal, state, and local levels in response to the COVID-19 pandemic. For example, the federal government provided over $2 trillion in economic assistance to individuals and businesses under the CARES Act. The Federal Reserve has employed a range of monetary actions representing trillions of dollars such as lowering its Federal Funds rate to help encourage lending, initiating quantitative easing to encourage smooth credit flows, and directly lending to banks. California is providing an extra $600 on top of the normal weekly unemployment amount as part of its Pandemic Additional Compensation program initiated under the CARES Act, among other actions. Locally, the City of Poway created the Poway Emergency Assistance Recovery Loan (PEARL) Program. PEARL set aside $2 million for loans to small businesses. This program helps complement existing state and federal loan programs and provides a financial bridge to help small businesses survive in the current economic environment. Additionally, the City has taken actions like suspending sign enforcement to allow businesses more advertising opportunities, relaxing standards for exterior dining to increase the number of people that can be served and deferring certain fees. Proposed FY 2020-21 Budget Taking into account the economic impacts of the pandemic described in the previous section, for FY 2020-21, staff projects a General Fund shortfall of almost $4.7 million. This is a combination of $2.3 million in projected revenue shortfalls and increases in expenditure requests of $2.4 million. Projected decreases in revenues were largely driven by reduced sales taxes projections from the City's sales tax consultant HDL of almost $1.5 million, lower property taxes of $445 thousand, reduced TOT of $115 thousand and lower interest earnings of $100 thousand. In conjunction with staffs economic analysis, staff developed an adaptable retrenchment strategy to help the City mitigate the range of potential recession scenarios. As such, the FY 2020-21 Budget includes various retrenchment techniques to reduce expenditures, preserve cash and increase liquidity. Each technique has a cost to the City. For example, un-funding vacant positions puts strain on existing staff and may delay certain projects due to limited staff resources, but is preferable to layoffs. Both have costs, but one is greater than the other. The retrenchment techniques staff is pursuing try to align the relative costs of the retrenchment technique against the severity of the recession, preserving existing staffing and service levels for as long as possible. Poway is a lean organization so reductions in staffing equate to reductions in services to the community. Consistent with staffs strategy, almost $3.2 million in expenditures were reduced from the budget including un-funding vacant positions (eliminating the budget but preserving the position authorization), deferring capital replacement charges, and reducing operating expenses. Since the 3 of 25 June 16, 2020, Item #20
City of Poway is such a lean organization, the identified expenditure retrenchment techniques do not threaten health and safety, reduce service levels, or eliminate existing staff. In addition, staff is recommending using $1.5 million from the General Fund Revenue Volatility Reserve in compliance with the General Fund Reserve Policy to stabilize anticipated shortfalls in revenue categories like sales taxes and property taxes. These recommendations allow staff to present a balanced budget amidst a volatile economic environment and continue to provide services to residents at the levels they have come to enjoy. As the economic environment continues to evolve, so too will staff's techniques for adapting to it. While the data still supports a moderate recession scenario several near-term factors could lead to a worsening economic environment. For example, as the economy reopens will there be a virus resurgence sufficient to cause another economic shutdown and loss of consumer confidence? Will employees that have been furloughed or laid off around the country be quickly rehired? Will travel and entertainment resume quickly? Will supply chain disruptions, such as people failing to pay mortgages, lead to structural demand side economic issues? Staff will continue to monitor the economic environment, economists' projections, and Poway's revenue experiences compared to current projections to understand if the City should adapt its response to help further mitigate the economic impacts from the COVID-19 pandemic. Staff will return to Council with updated information as appropriate. General Fund The proposed General Fund budget is balanced. A summary of the FY 2019-20 adopted budget and the FY 2020-21 request is shown below: F~ _2_~19-20 ~~<?p~e~--_ __ _ F_Y 202~-_2_~ ~~9u~~ __ Operating Revenues $48,786,730 $47,804,586 Non-Operating Revenues 1 802,238 2,294,754 ------------------------Tot a I Revenues 49,588,968 50,099,340 Operating Expenditures 47,644,581 48,427,651 Non-Operating Expenditures1 1,823,801 1,660,228 ------------------------Tot a I Expenditures 49,468,382 50,087,879 Net Activity $120,586 $11,461 1. Non-operating revenues and expenditures are a combination of Programs/Capital Projects and Total Transfers/Loans in Attachment A. While staff is continuing to provide services at historical levels, it is becoming more challenging to do so. Consistent with the last three budget cycles, General Fund revenue streams are not keeping pace with the growth in expenditures. Based on an analysis of the Fiscal Year 2020-21 initial expenditure requests compared to the prior year's adopted budget, much of the $2.4 million in initial expenditure increase is outside of the City's control. Over 80 percent of the increases to the Fiscal Year 2020-21 General Fund budget are outside the City's control with 56 percent being attributable to increases in the Law Enforcement contract, rising pension costs, and increases to insurance premiums. 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. Per the contract approved on June 20, 2017, the increase for the fourth year of the contract is 5 percent. Based on the contractual increase and adjusting the budget to reflect spending patterns, the budget for Law Enforcement increased approximately $800 thousand. 4 of25 June 16, 2020, Item #20
Pension costs are projected to increase almost $400 thousand in FY 2020-21 based on the latest actuarial valuations and will continue to do so for the near future. Additionally, CalPERS Public Employees' Retirement Fund (PERF) investment performance will play a factor in near-term pension costs to the City. If the PERF investment returns do not achieve seven percent in a given fiscal year, the shortfall is made up via increased charges to plan members, like the City, starting two years later. For reference and based on the PERF market value for fiscal year ended June 30, 2019 of $372.6 billion, a seven percent return would reflect a June 30, 2020 market value of $398.68 billion. As of December 31, 2019, the PERF market value stood at $394.17 billion, just under a six percent return. In March the PERF market value dropped to around $335 billion, a 10 percent loss. As of June 4, 2020, the PERF market value has recovered to 389.69 billion, a 4.6 percent return. The higher the PERF return at June 30, 2020 the less adversely impacted the City of Poway will be. A recent modeling tool created by Cal PERS indicates employer rates will peak within the next five years and then begin declining with steep declines in rates projected to start occurring by 2030. The California Public Employees' Pension Reform Act (PEPRA) that took effect in January 2013 along with CalPERS actions to ensure fund sustainability, such as shortening the amortization period for unfunded liability payments, contribute to this projected decline in employer rates. The City participates in a pooled insurance plan that calculates the annual contribution based on each member's share of losses and share of payroll relative to other member agencies. The City's general liability, property and environmental coverages are increasing approximately $160,000 for FY 2020-21 partially due to recent claims experience and a hard insurance market. As noted above, Sheriffs contract, retirement and insurance costs represent over half of the increases to the initial General Fund budget request. To address projected General Fund revenue reductions and increases in operating costs, almost $3.2 million in expenditures were reduced from the Budget as discussed in the economic impacts section above. Of this amount, over $260 thousand was reduced from operations and maintenance expenses, almost $1.8 million in asset management charges were deferred, and over $500 thousand was saved from a reserve adjustment due to decreased operating expenditures. Personnel cost reductions are further described in the staffing section of this report. Given the focus of this year's Budget became retrenchment and preserving services to the community during adverse economic conditions, several projects were not included in the operating budget submittal. For example, staff planned on including budget to replace software used to process permits, projects, code compliance, and business certificates, among other things, with an enterprise application. A new enterprise application has the possibility to increase efficiencies, promote a better customer experience, and improve integration with the City's financial system Munis. Staff is optimistic that an investment to expand the City's enterprise applications will afford the same type of benefits seen from the investment in Munis. While the request for budget was delayed, staff will continue with the planned timeline targeting early 2021 to issue a request for proposals. This approach will give the City information needed to make an informed decision without increasing budget costs upfront. Per City Council direction at the November 4, 2019 PCPA workshop, the City and Poway Unified School District (PUSD) continue to discuss the future of the Poway Center for the Performing Arts (PCPA). Due to COVID-19 the PCPA has been closed since mid-March. It is unclear when the facility will be able to re-open and how operations will be impacted by changes resulting from COVID-19. The City's annual subsidy to Poway Onstage (POS) is included in the proposed budget and by agreement PUSD will continue to pay 35% of specific costs. A second fee increase for rental clients took effect in FY 2019-20 and a third increase, approve by the City Council in 2016, is slated to take effect in FY 2021-22. 5 of25 June 16, 2020, Item #20
General Fund Reserve Pursuant to the General Fund Reserve Policy, the "City of Poway will maintain a General Fund reserve equivalent to 45 percent of budgeted annual General Fund operating expenditures." This 45 percent is sub-divided into three categories: 1. Revenue Volatility Reserve (10%); 2. Expenditure Volatility Reserve (5%); and 3. Extreme Events Reserve (30%). For Fiscal Year 2020-21 $558 thousand is being transferred from the General Fund to the three reserves to maintain compliance with the policy. The transfer amount is based on net General Fund operating expenses of approximately $47.7 million. The stipends discussed in more detail in the staffing section below are being paid from unassigned fund balance but are currently reflected as part of the operating budget. These have been adjusted out for the purposes of the reserve calculation. The information below shows the calculated reserve balances in compliance with the policy: FY 2019-20 FY 2020-21 __ Chan_g~ Revenue Volatility Reserve $4,651,262 $4,775,277 $124,015 Expenditure Volatility Reserve 2,325,626 2,387,639 62,013 Extreme Events Reserve 13,953,796 14,325,832 372,036 ----------------~------Tot a I $20,930,684 $21,488,748 $558,064 As discussed above in the economic impacts section, $2 million from the Extreme Events Reserve was used to fund the PEARL program. This amount is not reflected as a reduction in the reserve for the purposes of the FY 2020-21 reserve calculation because the loans to small businesses represent the repayment mechanism. All PEARL program loans must be repaid within three years three months after the City rescinds the local state of emergency declaration which complies with the five-year payback period of the reserve policy. Also discussed in the economic impact section, $1.5 million is being used from the General Fund Revenue Volatility Reserve in compliance with the General Fund Reserve Policy to stabilize anticipated shortfalls in revenue categories like sales taxes and property taxes. Staff will return to Council in the near-term with a repayment plan in compliance with the reserve policy. Appropriations Limit Government Code Section 791 0 requires each local government to establish its Proposition 4 Appropriations Limit by resolution annually at a regularly scheduled meeting or a noticed special meeting. Proposition 4 was adopted by the voters on November 6, 1979 and became Article XIIIB of the California Constitution. The goal of this legislation was to keep real (inflation adjusted) per person government spending under 1978-79 levels. Under Article XIIIB, known as the Gann Initiative, a maximum amount is established for tax-funded government appropriations each fiscal year based on the governments proceeds of taxes subject to the limitation calculation. Proceeds of taxes are things like property taxes and sales taxes and does not include other revenue sources such as rental and franchise fees. The City of Poway, as part of its Articles of Incorporation, established the base year Appropriations Limit at $7,047,200 for Fiscal Year (FY) 1981-82. Article XIIIB provided that the base limit be increased each year using specified population and inflationary growth factors. For the inflationary growth factors, Article XIIIB required the lower of the change in either the U.S. Consumer Price Index or the California Per Capita Personal Income be used. Beginning with the FY 1990-91 Appropriations Limit, Article XIIIB was modified by Proposition 111 and 58-88 (Chapter 60/90) to allow cities to choose: 1) their city's population growth or the county's population growth as the population factor, and 2) the growth in the California Per Capita Personal Income or the growth in Assessed Valuation of 6 of 25 June 16, 2020, Item #20
Nonresidential New Construction within the city as the inflation factor. Consequently, each year the City chooses the more beneficial of the two population and inflation measures for the Appropriations Limit calculation. During FY 2019-20, the City discovered its method of calculating the growth in Assessed Valuation of Nonresidential New Construction within the city factor was incorrect and needed to be corrected beginning with the FY 1990-91 Appropriations Limit, the year that factor was implemented. The correction resulted in a lower Appropriations Limit for each of the recalculated years. Comparing the corrected Appropriations Limits from FY 1990-91 through FY 2019-20 to the City's Appropriations Subject to Limitation for those years confirmed those Appropriations Subject to Limitation remained within the Appropriations Limit for each of those years. For the FY 2020-21 Appropriations Limit, the City compared the growth in San Diego County's population from January 1, 2019 to January 1, 2020 of 0.27 percent to the growth in the City's population of 0.08 percent. The City then compared the growth in the California Per Capita Personal Income of 3.73 percent to the growth in Assessed Valuation of Nonresidential New Construction within the City of Poway of 0.03 percent. Choosing the growth in San Diego County's population and the growth in the California Per Capita Personal Income as its population and inflation factors, respectively, the City's Appropriations Limit for FY 2020-21 is $56,028,051. The City's FY 2020-21 Appropriations Subject to Limitation is $38,699,300, which is $17,328,751 below the Appropriations Limit. The attached Resolution (Attachment E) establishes the City of Poway's Appropriations Limit for FY 2020-21. Staffing: FY 2020-21 Changes Staffing costs represent approximately 36 percent of the total FY 2020-21 operating budget at $33.7 million. During FY 2019-20 successor labor agreements between the City and its two bargaining units, the Poway Firefighters' Association (PFA) and the Teamsters Local 911 (Non-Safety), were approved. Importantly for the financial sustainability of the City, the MOUs included stipends using one-time funds from General Fund unassigned fund balance. The Salary and Benefit Plan for unrepresented employees (Management-Confidential) also included stipends. This approach allowed the City to provide a salary and benefit adjustment to remain competitive with surrounding agencies without increasing the ongoing costs to the City. Increasing the ongoing costs to the City would have increased the possibility for service or staffing reductions in the current economic environment. The second year of the Non-Safety ($210 thousand) and Management-Confidential ($183 thousand) stipends along with the first and second year stipends and educational incentive ($280 thousand) for the PFA are included in the FY 2020-21 operating budget. The stipends will be paid to employees during the first full pay-period in July. As shown below, a total increase of 1.04 regular full-time equivalents (FTE) is being requested for FY 2020-21: FY 20'!_~-~~_AdOJ?t!!~-FY _?°-20-2~ Request Legislative and Administrative Services 9.00 9.00 Finance 20.50 20.50 Human Resources and Risk Management 6.00 6.00 Community Services 24.1 O 24.10 Development Services 26.50 25.50 Public Works 80.96 83.00 Fire 57.00 57.00 -------------------Tot a I 224.06 225.10 7 of 25 June 16, 2020, Item #20
The 1.0 FTE decrease in Development Services is the elimination of the Construction Project Manager (Limited Term) position due to a change in needs for the Mickey Cafagna Community Center project. The 2.04 FTE change in Public Works is the combination of two things. First, the 0.04 FTE increase is the result of a prior year administrative error. A 1.0 FTE was filled using two part-time employees which were inadvertently reflected as two 0.48 FTEs instead of two 0.50 FTEs. This correction is being addressed with the FY 2020-21 Budget request and will create a budget impact of approximately $2 thousand. As mentioned in the FY 2019-20 mid-year budget update, Public Works indicated there was a need for 2.0 FTE additional Water Utilities Worker I positions and that staff would be requesting these positions as part of the FY 2020-21 budget process. The estimated annual impact to the Water Fund for these two positions is approximately $183 thousand. These positions are needed to focus on water quality monitoring within the potable water distribution system and reservoirs. Tasks would include increased dead-end flushing and water quality monitoring as required by the Regional Water Quality Control Board (RWQCB}, reservoir inspections including water quality sampling and required treatment, and water system monitoring, sampling and testing to be conducted at the water treatment plant by trained operators. The increase in water quality monitoring has been mandated by the State's Division of Drinking Water. With additional water quality tasks assigned to the two requested Water Utilities Workers, Water Transmission and Distribution division staff will be able to address valve replacements, meter replacements and increase the frequency of exercising critical valves in the distribution system. Currently, internal water quality monitoring, sampling and testing duties of the reservoirs and distribution system are completed by Utility Systems Mechanics in the Utility Systems Operations and Maintenance Division. A State Certified lab conducts routine sampling and water quality monitoring as required by State drinking water regulations (weekly). These specific duties and responsibilities would be transferred to the Water Transmission and Distribution division and performed by the two additional Water Utilities Worker I positions. As discussed in the economic impacts section above, the FY 2020-21 Budget request includes the un-funding of seven vacant positions. Un-funding a vacant position eliminates the budget but preserves the FTE. The FTE is preserved because the position is still needed to support City operations. Some positions were un-funded for the entire fiscal year such as the City Manager's Management Analyst, Director of Community Services, and Recreation Supervisor at the Poway Center for the Performing Arts. Other positions were un-funded for half the fiscal year such as the Senior Administrative Assistant in Development Services. In addition to un-funding several vacant positions, two positions will be under-filled. Under-filling a position employs a person in a classification lower than the approved level. Additionally, some other personnel costs like overtime were reduced. These are short-term retrenchment techniques to help mitigate the economic impacts of the current recession and helped reduce the General Fund operating budget by almost $640 thousand. Staffing: PFA Tentative Agreement The Memorandum of Understanding (MOU) between the City of Poway and the Poway Firefighters' Association expired on June 30, 2019. After thirteen months of negotiations, staff has reached a Tentative Agreement with the Poway Firefighters' Association which includes a two-year term for the new MOU retroactive to July 1, 2019 through June 30, 2021. The Tentative Agreement (TA) with the PFA uses undesignated one-time funds to provide one-time stipends in the amount of $3,000 for Fiscal Year 2019-20 and $2,000 for Fiscal Year 2020-21. The one-time funds are available from savings in prior year budgets. The TA demonstrates a strong 8 of25 June 16, 2020, Item #20
commitment by the City to provide its fire safety employees with salary and benefit adjustments in an effort to remain competitive among other fire agencies in the San Diego market, without implementing financial management strategies that could lead to service reductions. The City Council approved the same stipend amounts for Management/Confidential employees in September 2019 and for Teamsters employees in December 2019. Due to the timeline of PFA negotiations, the stipends for PFA employees will be combined into one stipend and paid during the first full pay period in FY 2020-21. As discussed above, funds to pay the stipends have been included in the FY 2020-21 operating budget. PFA members will have the choice to take the stipend as a cash payment, deposit the stipend into their ICMA 457 account, or a combination of both. The stipends will be reported to CalPERS for employees considered CalPERS "classic" employees in the City's Tier 1 and Tier 2 retirement groups. Pursuant to the California Code of Regulations section 571.1, the stipends are not reportable as compensation for employees in Tier 3, commonly referred to as "PEPRA" employees hired after January 1, 2013 when the Public Employees' Pension Reform Act (PEPRA) took effect. Employees must be employed on the date the one-time stipend is distributed. The other key economic item approved in the TA is an education incentive in the form of a one-time payment in the amount of $250 or $500 to fire safety employees who earn an Associate's degree or a Bachelor's degree, respectively. Fourteen out of the eighteen cities in San Diego County have an education incentive for firefighters to support and acknowledge the increased demands of the fire service on fire safety employees who demonstrate critical thinking and excellent communication skills, as well as the need to support internal advancement through succession planning efforts. Firefighters are currently eligible for reimbursement up to $1,500 per fiscal year for education and training with a maximum reimbursement of $10,000 combined for all PFA members. The amount of individual reimbursement will be increasing to $2,500 per employee per fiscal year on a first come first serve basis, up to the current maximum budgeted amount of $10,000. The current MOU expired on June 30, 2019. A new MOU will be generated, finalized and executed with the City Council's approval of the attached Resolution (Attachment C). The MOU will be effective retroactively to July 1, 2019 through June 30, 2021, and will incorporate the terms listed in the Resolution (Attachment C). Capital Improvement Program Similar to the operating budget, staff reviewed the Capital Improvement Program (CIP) budget requests to identify projects which could be deferred. In order to be a candidate for deferral, a project could not cause health or safety issues from its delay, should not increase future costs from its delay, and should be funded by the General Fund. By deferring the projects, the City can preserve its cash on hand and help improve liquidity; both of which are important to help the City weather a recession. Staff identified six CIP projects totaling $1.8 million that could be deferred. Some examples include the Blue Sky Shade Structure and the Civic Center Fiber Optic projects. While staff did defer several projects, the City's CIP division will oversee 39 active and proposed projects in the coming year, with $10.86 million appropriated in FY 2020-21 for a total of $53.86 million in appropriations for these projects. FY 2020-21 street projects include funding in the amount of $504,000 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 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, Neighborhood Sidewalks, and LED Street & Safety Lighting Conversion 9 of25 June 16, 2020, Item #20
projects. The Espola Road Safety Improvements project continues to be in the utility undergrounding phase while design of the remaining pathway improvements is being finalized. The Neighborhood Sidewalks and Espola Road Bike Lanes projects are in design. The LED Street & Safety Lighting Conversion project has completed conversion of all standard streetlights in the public right-of-way. Staff is in negotiations with the design-build team to potentially add conversion of the decorative lighting in the Old Poway Park and Civic Center areas to the contract. The FY 2020-21 streets projects include $2.47 million in operating budget funding for the Pavement Management Program projects, which include FY 2020-21 Street Maintenance, FY 2020-21 Street Overlay, and FY 2020-21 Street Striping. The FY 2019-20 Street Overlay project, which was previously funded, is currently under construction. Drainage funding in the amount of $130,000 will be used for the second year of 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 1 O years to comply with the mandate and will be requesting funding for this project each year until the City is compliant. Previously funded projects include the Corrugated Metal Pipe Replacement project which is currently being advertised for construction, the Sebago Avenue Channel Repair and Annual Trash Capture Program projects which are being finalized and will be advertised for construction this summer, and the Rattlesnake Creek Integrity Study which is nearly complete. Funding for Public Facilities projects includes $135,676 for ADA Barrier Removal projects that will address accessibility issues at Lake Poway Park in accordance with the Americans with Disabilities Act (ADA). The projects are funded with Community Development Block Grant (CDBG) grant funds and are reimbursed through the grant funding upon completion of the work. Previously funded park projects include the Valle Verde Playground Renovation, which is substantially complete and will be scheduled for acceptance at a future City Council meeting, and Blue Sky Amphitheater Improvements, which is on hold pending future additional funding. FY 2019-20 Public Facilities Renovation projects are ongoing. This is a series of maintenance projects that are typically managed by the Public Works Department. Other previously funded buildings projects include the Mickey Cafagna Community Center which is currently under construction and two projects at the Swim Center, Swim Center Valve and Strainer Replacement and Swim Center Deck Coating, which will be completed during the annual winter pool closure. 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. Previously funded projects currently under design include the Clearwell Upgrades and Water Treatment Plant Clearwell Distribution Flow Meters. The Boulder Mountain Reservoir I & II Rehabilitation project has been fully designed but construction is not scheduled to occur until FY 2020-21 and additional funding is being requested for inflation for the years since the project funding was originally appropriated. The project was previously delayed due to staff workload and the requirements for construction during winter months. The Chemical Building and Tank Farm Upgrades and Water Valve Replacement projects are currently under construction. Several other water projects were previously funded and are on-going in various stages of completion. Water funding in the amount of $6.76 million is being requested this year and will be used for design of four new projects: SDCWA Treated Water Connection, Clearwell Overflow Structure Modifications, PRV Station Access Assessment, and WTP Electrical System Assessment. Funding also includes an additional appropriation for construction of the Clearwell Upgrades project for adding replacement of the clearwell liner (staff is evaluating options and will provide Council and update in the near future), and construction of the Clearwell Bypass, which is 10 of 25 June 16, 2020, Item #20
piping that must be installed to take the clearwell offline during the Clearwell Upgrades project. The annual Water Valve Replacement project is also being funded. 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. This fiscal year, sewer funding in the amount of $850,000 will be used for design and construction of the Bowron Road Sewer Upsize project, Annual Sewer Line Repair/Replace 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 is under construction and is expected to be substantially complete in the next few weeks. The Annual Sewer Line Repair/Replace project is currently in the construction phase for replacement of a sewer line on Pomerado Road at Stone Canyon Road. Based on the challenges with this project, staff is evaluating options for moving forward. The Butterfield Trail Sewer Upsize project design has not yet started. It was placed on hold due to potential development of the former Stone Ridge Golf Course. Water, Recycled Water and Wastewater The FY 2020-21 Budget includes operating and capital requests consistent with those presented during the Public Hearing for the approval of new rate structures and two-year water, recycled water and wastewater rates on March 3, 2020. Staff does not anticipate a change to the previously adopted rates that go into effect January 1, 2021 as a result of the FY 2020-21 Budget. An update on the water initiatives and programs will be provided to Council in the fall. Budget Review Committee The Budget Review Committee completed a review of the proposed FY 2020-21 Budget at multiple meetings held in April and May. Their report of recommendations is attached to this report as Attachment B. The Committee Chair, Brian Pepin, plans to participate at the public hearing to comment on the Committee's report and respond to any questions from the City Council. Environmental Review: This action is not subject to review under the California Environmental Quality Act (CEQA). Fiscal Impact: The fiscal impact is outlined throughout this report. Public Notification: A Notice of Public Hearing was published in the Poway News Chieftain on Thursday, June 4 and Thursday, June 11, 2020. 11 of 25 June 16, 2020, Item #20
Attachments: A. General Fund Budget Summary B. Report of Recommendations by the Budget Review Committee C. Resolution authorizing the execution of a two-year Memorandum of Understanding between the City of Poway and the Poway Firefighters' Association for the period of July 1, 2019 through June 30, 2021 D. Resolution approving and adopting the annual operating budget and capital improvement program for Fiscal Year 2020-21 and appropriating funds E. Resolution adopting an Appropriations Limit as required by Article XIIIB of the California Constitution for the fiscal year ending June 30, 2021 F. FY 2020-21 Proposed Operating Budget and Capital Improvement Program (on file with the Office of the City Clerk) Reviewed/ Approved By: Wendy serman Assistant City Manager 12 of 25 Reviewed By: Alan Fenstermacher City Attorney Approved By: June 16, 2020, Item #20https://docs.poway.org/WebLink/Browse.aspx?id=147662&dbid=0&repo=CityofPoway
GENERAL FUND Fund Number: 7000 2016-17 2017-18 2018-19 2019-20 2019-20 2020-21 Actual Actual Actual Adopted Estimated Request FUNDS AVAILABLE Beginning Fund Balance Ouly 1) $1,348,281 $2,998,892 $6,609,793 $7,507,427 $7,507,427 $9,875,571 REVENUES Taxes & Franchises Property Tax 19,877,300 21,239,503 21,976,204 22,652,040 22,750,001 22,543,000 Sales Tax 13,774,763 13,981,478 14,774,047 14,050,000 13,135,648 13,105,318 Franchise Fees, TOT 2,850,754 3,073,257 3,074,257 3,095,070 2,883,083 3,006,000 Fees, Permits & Services 6,261,687 6,555,293 6,376,096 6,180,642 6,046,289 6,041,215 Use of Property, Grants, Other 3,872,879 5,129,956 3,130,108 2,808,978 6,126,502 3,109,053 Total General Fund Revenues 46,637,383 49,979,487 49,330,712 48,786,730 50,941,523 47,804,586 TOTAL FUNDS AVAILABLE 47,985,664 52,978,379 55,940,505 56,294,157 58,448,950 57,680,157 EXPENDITURES Operating Expenses Legislative and Admin. Services 1,160,510 1,085,043 1,091,726 1,152,894 1,062,431 1,107,317 Finance 1,599,126 1,612,560 1,811,502 1,772,647 1,818,463 1,650,532 Human Resources 812,138 1,019,145 1,097,501 1,109,862 1,111,268 1,158,635 Community Services 5,794,972 5,750,689 5,810,116 6,150,127 6,083,434 5,547,593 Development Services 4,290,319 4,468,523 4,287,155 4,949,799 4,861,669 4,851,951 Public Works 4,668,435 5,443,424 5,407,439 6,109,188 6,083,876 6,370,123 Fire 11,164,732 12,207,895 12,404,543 12,908,303 13,026,391 13,447,219 Law Enforcement 11,468,067 11,976,275 12,720,762 13,491,761 13,504,284 14,294,281 Total Operating Expenses 40,958,299 43,563,554 ' 44,630,744 47,644,581 47,551,816 48,427,651 Capital Projects 1,140,933 1,165,949 2,243,758 60,070 Program Expenses 546,390 210,386 102,500 102,500 102,500 2,500 Total Programs/Capital Projects 1,687,323 1,376,335 2,346,258 102,500 102,500 62,570 TOTAL EXPENDITURES 42,645,622 44,939,889 46,977,002 47,747,081 47,654,316 48,490,221 TRANSFERS/LOANS Water Fund Loan (537,622) 401,250 537,622 Street Loan Repayment/Write-Off 261,054 Park Fund Loan Repayment 307,228 Reserve Funds Transfers ln/(Out) (766,183) (669,430) (1,742,740) 62,428 62,428 941,936 All Other Transfers ln/(Out) (1,055,919) (1,197,139) (781,340) (981,491) (981,491) (244,840) Encumbrance Roll Forward Other Fund Balance Activity 18,574 36,622 (37,900) TOTAL TRANSFERS/LOANS (2,341,150) (1,428,697) (1,456,076) (919,063) (919,063) 697,096 NET FUND ACTIVITY 1,650,611 3,610,901 897,634 120,586 2,368,144 11,461 ENDING FUND BALANCE $2,998,892 $6,609,793 $7,507,427 $7,628,013 $9,875,571 $9,887,032 ABOUT The General Fund is the City's principal source for fire protection, law enforcement, parks and recreation, planning and engineering and other operations that are not funded by dedicated or restricted sources. The primary source of revenues for the General Fund are property taxes, sales tax, and fees for services. 13 of 25 ATTACHMENT A June 16, 2020, Item #20
Date: To: From: Subject: May 13, 2020 Honorable Mayor and Members of the City Council Budget Review Committee Committee Input and Recommendations for FY 2020-2021 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 2020-2021. Introduction The City of Poway is facing an unprecedented budget situation as the effects of the 2020 corona virus pandemic become apparent. As of today, over 4 million cases of Covid-19 have been reported worldwide causing 300,000 deaths. San Diego County has reported 5,000 cases and over 200 deaths. The associated state-and county-ordered closures of public spaces and businesses has upended daily life in Poway and will have significant impacts on tax revenue in the 2020-2021 fiscal year. Most striking is the skyrocketing unemployment rate; in April alone over 20 million Americans abruptly lost their jobs, wiping out a decade of employment gains in a single month. The speed and magnitude of the loss defies comparison; it is roughly double what the nation experienced during the entire financial crisis from 2007 to 2009. Amid this still-developing crisis, the Budget Review Committee embarked on a review of the City of Poway's 2020-2021 proposed budget. We commend the city's staff, especially City Manager Chris Hazeltine, Assistant City Manager Wendy Kaserman, Director of Finance Aaron Beanan, and Budget Administrator Alex Castanares; there is no playbook for such a rapid and dramatic upending of revenue projections. Despite the shock of this crisis our city staff have kept focused and calm and adjusted in real-time to the changing landscape. The BRC was glad to have the opportunity to review the adjusting revenue projections and understand the City's efforts to control expenditures. It is important to note that our briefings (and this report) are based on a quickly-changing moment-in-time amid this rapidly-changing fiscal situation in Poway. Final budget numbers will undoubtably be adjusted and may need to be throughout the fiscal year as the situation unfolds. A Summary of Poway's FY 2020-2021 Proposed Budg;et It's important to preface this BRC report with a reminder that, even under normal financial conditions, the City of Poway was facing budget challenges like every other public agency in California. Despite being a well-governed and well-managed city with a long history of good accounting procedures and efficient, focused, and conservative revenue application, the forecast was troubling in the near-and mid-term, as noted in our BRC report for fiscal year 2019-2020. 14 of 25 ATTACHMENT B 1 June 16, 2020, Item #20
Our warning from last year takes on even greater urgency given the rapid onset of the current financial situation: "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." Revenue The proposed FY 2020-2021 budget would have projected a deficit of $4. 7 million due to the impacts of corona virus if city staff had not made efforts to retrench. (While this is clearly a hugely significant impact to the City, it should be noted that it may be worse if this financial crisis deepens.) Tax revenue is projected to decrease by $2.5 million due to impacts to the following categories: • $1.5 million less in sales tax revenue • $800,000 less in property tax revenue • $100,000 less in hotel tax (TOT) revenue • $100,000 interest reduction Expenditures Unfortunately, due to a number of increasing costs largely outside of policymakers' immediate control the city is facing $2.4 million in increased costs over last year. (These include insurance premium increases, contract increases like the Sheriffs Department, and a larger water bill.) While these costs can't immediately be addressed, the BRC encourages the City Council to pursue long-term actions to address these bills, such as pushing for more cost-effective contracts in the future and partnering with other cities to push for efficiencies from regional agencies that pass along their costs to municipalities. At the City of Poway, ever-rising personnel costs are the largest contributing factor to the City's expenditures, 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. Despite this 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. One area that could be addressed by the City Council in FY 2020-2021 is employee compensation, especially the generous healthcare coverage currently provided to city employees. The BRC calls on the City Council to do whatever is necessary to limit personnel costs, including no compensation increases during the current fiscal crisis and the pursuit of contract renegotiations if the situation becomes worse. Retrenchment The Finance Department is commended for identifying $2.9 million in cost reductions that can be implemented in short order, primarily by leaving some current vacancies unfilled, trimming professional and contract services, and identifying $1.8 million in asset maintenance and 15 of 25 2 June 16, 2020, Item #20
replacement to be placed on hold during this current crisis. While this is a sensical way to address the current budget situation, the BRC cautions the City against deferring too much maintenance and replacement of assets for too long, lest it impact service delivery and ultimately increase future costs. It should be noted that street maintenance and repair is not included in the assets being deferred, which is very positive. After these retrenchment techniques are included, the City still faces a $1. 7 million budget deficit, which Finance staff recommends addressing with unassigned fund balance; essentially funds above what was anticipated in previous fiscal years. While this will (hopefully) cover the deficit due to the impact of Covid-19, the BRC must make clear that this is not a long-term measure to address Poway's long-term budget challenges. Specific Items of Note The City of Poway is a service-providing organization that relies on tax revenue from residents and businesses in order to provide services to the people of Poway. Therefore, the BRC encourages city staff and policymakers to deliver services as efficiently as possible while keeping taxes and fees at a minimum. After two years of BRC hearings and analysis of the budget, some of the primary means of achieving that goal are explained below. Personnel costs As detailed in the summary above, Poway has experienced years of rising personnel costs like every other public agency in California. As the primary driver of costs for the City, keeping personnel costs low should be a top concern for the City Council and management. As noted last year, the City has done a good job controlling the number of employees on payroll but should evaluate compensation. While the challenges to compensation reform are numerous due to California labor regulations and competition with other public agencies, (not to mention a number of contracted employees with compensation outside of the control of the City of Poway,) the BRC maintains this as a primary budgetary concern now and in the future. Revenue growth Revenue increases should be accomplished primarily through increasing the size of the property tax base and secondarily by examining the City's user fee structure. Tax increases should not be an option. We commend the Mayor and Council for their support for 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 3 16 of 25 June 16, 2020, Item #20
while increasing revenue growth to ensure that Powegians can enjoy a high level of city services for many years to come. The BRC also recommends that city staff continue to look closely at user fees across all departments to ensure they strike an appropriate balance between cost recovery and delivering accessible services to the community. Budget readability The BRC recommends that Finance staff strive to make the budget as readable as possible, including separating pension costs from other benefit costs in the general fund summary section to provide a better idea of the cost fraction of personnel expenditures, adding percent change per reporting period to more easily display trends for each budget reporting line, incorporating visual comparators for line item numbers across years to allow for an at-a-glance understanding of relative performance, placing a notation on each line item with its percent contribution to the total within its group to quickly assess if the line-item is relatively large or small, and, where possible, use color schemes appropriate for individuals with color blindness on charts and graphs. Vacancies, hiring, and volunteers Because personnel costs are the main driver of the City's rising costs the BRC commends city staff for leaving a number of vacancies unfilled in the proposed budget, as recommended in last year's BRC memo, and recommends that no new positions be created. We also recommend that the City examine the use of seasonal and part-time staff as well as an increased use of volunteers where possible. The BRC thanks the Mayor and City Council, especially Councilmembers Dave Grosch and Barry Leonard, for organizing large and successful community volunteer cleanups to address the budget challenges facing Poway's Landscape Maintenance Districts; this model should be pursued in other areas where possible. Planning Division The BRC continues to recommend that the Planning Division of the Development Services Department take a close look at improving efficiencies, with the goal to operate in a cost-neutral fashion. The BRC recommends the Division continue to streamline their processes and simplify requirements in order to reduce permit time and reduce City costs on project approvals. Poway Center for the Performing Arts The Poway Center for the Performing Arts (PCP A) 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. The BRC strongly supports the City Council's current evaluation of a sale of the property to Poway Unified School District, given the facility's location on the campus of Poway High 17 of 25 4 June 16, 2020, Item #20
School and its frequent utilization by PUSD students. If mutually beneficial terms can be reached between the City of Poway and the school district, especially a continued high level of community access, the BRC recommends the sale of the property to Poway Unified School District to address this serious and escalating financial problem for the city; if not a sale of the property to PUSD, then measures must be implemented to make the operation of the facility cost-neutral ( or as close to cost-neutral as possible). Fire 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. As highlighted last year, 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 cost-effective like it once was. We again recommend that the City Council examine the department's overtime costs, especially once 50% of PEP RA employees are on the Fire Department payroll. Currently, 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 Penasquitos Lagoon silt reduction project. This is a regional project based on recently-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 at all possible, Poway must think creatively 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. Develop a long-range financial forecast The BRC commends the City Manager and Director of Finance for their support of a long-range financial forecast, as recommended in last year's BRC memo. 18 of 25 5 June 16, 2020, Item #20
~ f?:._. -Brian Pepin, Cha? < Peter DeHoff, Vice Cl) i 1Z/2 / BernieG~ Bob McKeon 6 19 of 25 June 16, 2020, Item #20
20 of 25 ATTACHMENT C June 16, 2020, Item #20
RESOLUTION NO. 20-
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
POWAY, CALIFORNIA, AUTHORIZING THE EXECUTION OF A
TWO-YEAR MEMORANDUM OF UNDERSTANDING BETWEEN
THE CITY OF POWAY AND THE POWAY FIREFIGHTERS’
ASSOCIATION FOR THE PERIOD OF JULY 1, 2019 THROUGH
JUNE 30, 2021
WHEREAS, the City of Poway, through its management representatives, has met and
conferred in good faith with the Poway Firefighters’ Association (PFA);
WHEREAS, the representatives of the City and the PFA each have exchanged freely
information, opinions and proposals on matters regarding wages, hours and other terms and
conditions of employment for employees in the PFA Bargaining Group;
WHEREAS, the City and the PFA representatives have agreed on the term of a new
Memorandum of Understanding retroactive to July 1, 2019 through June 30, 2021; and
WHEREAS, the City and the PFA representatives have agreed upon the items as
described below.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Poway that
the City Manager is hereby directed and authorized to implement all provisions listed below
which are to be incorporated into the Memorandum for Understanding for Poway Firefighters’
Association employees without further specific actions by the City Council. No additional
financial terms will be assumed beyond the terms included herein when finalizing and executing
the Memorandum of Understanding for the Poway Firefighters’ Association effective July 1,
2019.
Stipends: One-time stipends equivalent to the amounts below for regular,
full-time employees. All PFA employees shall receive the Year 1
and Year 2 cash stipends combined into one cash stipend of Five
Thousand Dollars ($5,000) to be paid in the first full pay period in
July 2020 (July 31, 2020). To be eligible to receive the stipend
payment, employees must be covered by this MOU and employed
on the date the stipend is paid.
Year 1: $3,000 Stipend (reportable to PERS)*
Year 2: $2,000 Stipend (reportable to PERS)*
* PFA employees will have the choice to take the stipend as a
one-time cash payment, to make a one-time deposit into the
employee’s ICMA 457 account or split the amount into a one-time
cash payment and a one-time deposit into the employee’s ICMA
457 account. Any part of the stipends which equates to six percent
(6%) or less of the employee’s salary paid to Classic employees of
Tier 1 & 2 will be reported to CalPERS. Pursuant to the California
Code of Regulations section 571.1, the stipends are not reportable
as compensation for employees in Tier 3, commonly referred to as
21 of 25 June 16, 2020, Item #20
“PEPRA” employees hired after January 1, 2013 when the Public
Employees’ Pension Reform Act (PEPRA) took effect.
Tuition Reimbursement: The maximum amount of tuition reimbursement shall increase
from $1,500 per fiscal year per employee to $2,500 per fiscal year
per employee on a first-come, first-serve basis. The total funds
available to the PFA will remain at $10,000 each fiscal year.
Funds remaining in any one fiscal year cannot be carried over to a
future year.
Educational Incentive: Bachelor’s degree - Employees who earn a Bachelor’s degree will
receive a one-time payment of $500 at the time the degree is
earned. The City will provide the $500 one-time payment to
current PFA employees who have already achieved a Bachelor’s
degree. If an Associate’s degree is achieved first and $250 is
provided at the time the Associate’s degree is earned, an
additional $250 will be provided if the employee goes on to earn a
Bachelor’s degree.
Associate’s degree – Employees who earn an Associate’s degree
will receive a one-time payment of $250 at the time the degree is
earned. The City will provide the $250 one-time payment to
current PFA employees who already have achieved a stand-alone
Associate’s degree.
New employees will be eligible for this benefit upon completion of
probation.
Clean up Language: Housekeeping revisions or non-substantive, clarifying changes to
outdated language may be made to the Memorandum of
Understanding for the Poway Firefighters’ Association in
coordination with the PFA.
22 of 25 June 16, 2020, Item #20
PASSED, ADOPTED AND APPROVED at a Regular Meeting of the City Council of the
City of Poway, California on the 16th day of June, 2020, by the following vote, to wit:
AYES:
NOES:
ABSENT:
DISQUALIFIED:
______________________________
Steve Vaus, Mayor
ATTEST:
________________________________
Faviola Medina, CMC, City Clerk
23 of 25 ATTACHMENT D June 16, 2020 Item #20
RESOLUTION NO. 20-
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
OPERATING BUDGET AND CAPITAL IMPROVEMENT
PROGRAM FOR THE FISCAL YEAR 2020-21 AND
APPROPRIATING FUNDS
WHEREAS, the City Council of the City of Poway has considered the proposed Fiscal
Year (FY) 2020-21 Operating Budget and Capital Improvement Program and noticed the public
hearing relative to its adoption for June 16, 2020; 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: That certain documents now on file in the Office of the City Clerk of the City
of Poway titled “City of Poway, California FY 2020-2021 Proposed Operating Budget & Capital
Improvement Program” (Budget), as amended if necessary, is hereby adopted as the FY 2020-
2021 Operating Budget & Capital Improvement Program for the City of Poway along with the
adjustments, if any, determined by the City Council as set forth in the minutes of the Council
meeting of June 16, 2020.
SECTION 2: That the estimated revenues for FY 2020-21 as shown in the Budget are
hereby adopted.
SECTION 3: That the requested expenditures for FY 2020-21 as shown in the Budget
are hereby appropriated to the fund, department, or division for which they are designated, and
such appropriations shall not be increased except as provided herein.
SECTION 4: That the legal level of budgetary control is the fund level. Budgets may not
be exceeded at the fund level without appropriate authorization by the City Council except as
provided for herein.
SECTION 5: That the City Manager may delegate any of the authority provided them
under this Resolution.
SECTION 6: That the City Manager is authorized to make such changes in department
operating, program, and capital improvement budget totals during the FY 2020-21 as may be,
from time to time, deemed desirable and necessary in order to meet the City's needs in amounts
not to exceed $100,000 per adjustment.
SECTION 7: That the City Manager may authorize all transfers of funds from account to
account within any department.
SECTION 8: That the City Manager may authorize transfers of funds between
departments within the same fund as may be necessary.
Resolution No. 20-
Page 2
24 of 25 June 16, 2020, Item #20
SECTION 9: That the City Manager is authorized to continue all appropriations for
encumbrances outstanding as of June 30, 2020 into FY 2020-21 as may be necessary.
SECTION 10: That the City Manager is authorized to carry forward and appropriate
unencumbered balances remaining at June 30, 2020 into FY 2020-21 as may be necessary.
SECTION 11: That the City Manager is authorized to temporarily over-staff positions for
succession planning purposes as may be necessary.
SECTION 12: That the City Manager is authorized to increase the budget for under-filled
positions to the approved position level as may be necessary.
SECTION 13: That the City Manager is authorized to increase the budget for a specific
purpose when there are offsetting unbudgeted revenues designated for said purpose.
SECTION 14: That all appropriations in the Capital Improvement Program, Programs and
grants in the operating budget remaining unspent at June 30, 2020 are hereby carried forward
and appropriated to FY 2020-21.
SECTION 15: The Capital Improvement Program projects of the City of Poway are in
conformance with the City of Poway Comprehensive Plan (General Plan) as governed by Section
65402 of the California Government Code.
PASSED, ADOPTED AND APPROVED at a Regular Meeting of the City Council of the
City of Poway, California on the 16th day of June, 2020 by the following vote, to wit:
AYES:
NOES:
ABSENT:
DISQUALIFIED:
______________________________
Steve Vaus, Mayor
ATTEST:
________________________________
Faviola Medina, CMC, City Clerk
25 of 25 ATTACHMENT E June 16, 2020, Item #20
RESOLUTION NO. 20-
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
POWAY, CALIFORNIA, ADOPTING AN APPROPRIATIONS LIMIT
AS REQUIRED BY ARTICLE XIIIB OF THE CALIFORNIA
CONSTITUTION FOR FISCAL YEAR ENDING JUNE 30, 2021
WHEREAS, the Gann Initiative or Proposition 4 hereby referred to as Article XIIIB of the
Constitution of the State of California, was passed by the people;
WHEREAS, Article XIIIB mandated an appropriations limit on various units of government,
including the City of Poway;
WHEREAS, that limit has been calculated by the Finance Department of the City of Poway
using current guidelines provided by the League of California Cities; and
WHEREAS, the City Council of the City of Poway desires to formally adopt that
appropriations limit for the City of Poway.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Poway as
follows:
SECTION 1: In accordance with Article XIIIB of the Constitution of the State of California,
the appropriations limit for the City of Poway for Fiscal Year 2020-21 is $56,028,051.
PASSED, ADOPTED AND APPROVED at a Regular Meeting of the City Council of the
City of Poway, California on the 16th day of June, 2020 by the following vote, to wit:
AYES:
NOES:
ABSENT:
DISQUALIFIED:
______________________________
Steve Vaus, Mayor
ATTEST:
________________________________
Faviola Medina, CMC, City Clerk