Item 29 - Fiscal Year 2021-22 Proposed Operating Budget and Capital Improvement ProgramJune 15, 2021, Item #29DATE: TO: FROM: CONTACT: SUBJECT: Summary: AGENDA RE PO RT City of Poway June 15, 2021 Honorable Mayor and Members of the City Council Aaron Beanan, Director of Finance _;ft> Aaron Beanan, Director of Finance (858) 668-4411 or abeanan@poway.org CITY COUNCIL Proposed Fiscal Year 2021-22 Operating Budget and Capital Improvement Program This report presents the Proposed Operating Budget and Capital Improvement Program (Budget) for Fiscal Year (FY) 2021-22 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 2021-22 operating revenues across all funds are projected at approximately $125 million while operating expenses across all funds are requested at $98 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 2021-22 Budget also includes $462 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 2021-22 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 2021-22 includes just under $16 million in new requests bringing the overall appropriation total for active projects to just under $65 million. Included in this total is the construction of the Mickey Cafagna Community Center. The Mickey Cafagna Community 1 of30
June 15, 2021, Item #29Center is currently scheduled to open to the public on June 21, 2021 and will provide a shared-use multi-generational facility for the community. This new state of the art facility affords the opportunity to charge market rate fees helping offset the facility's operating costs. Additional Water Infrastructure Improvement Program funding is being proposed for FY 2021-22 for the design and construction of the San Diego County Water Authority (SDCWA) Treated Water Connection, Clearwell Upgrades, and Clearwell Bypass. These projects represent the single largest set of capital improvement projects in the City's history. They will increase the water system's safety, reliability, and resiliency by providing a redundant water source and opportunities for enhanced maintenance. Impacts of the Pandemic on the Budget Process To understand where we are going with the FY 2021-22 Budget, we should look at where we have been. 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. 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. 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 included various retrenchment techniques to reduce expenditures, preserve cash and increase liquidity. Consistent with staff's 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 City of Poway is such a lean organization, the identified expenditure retrenchment techniques did not threaten health and safety, reduce service levels, or eliminate existing staff. In addition, staff recommended 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 allowed 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. At the FY 2021-22 internal Budget kick-off meeting in December 2020 staff presented an economic outlook to departments that suggested an improving economy would begin in the Spring of 2021 as governmental interventions and vaccinations progressed. This was consistent with other economic outlooks such as the UCLA Anderson forecast. At the internal Budget kick-off staff was directed to maintain the retrenched budget from the prior year unless something was a threat to health and safety or contractually obligated to increase. This gave staff more time to watch Federal economic interventions unfold as well as monitor the overall economic health of the country and City. By March, data supported significant progress on an intensive vaccination effort which would be important to re-opening the economy along with economic data that continued to improve overall. Poway was generally seeing similar trends as sales tax projections by the City's consultant, HDL, projected a 4.7 percent increase in sales tax revenues. Some revenue categories such as Community Service fees and Transient Occupancy Taxes are projected to remain depressed for a portion of the upcoming fiscal year. Additionally, in March of 2021 the Federal government passed the American Rescue Plan Act of 2021 ("ARP") to provide economic relief to local governments, the largest economic 2 of 30
June 15, 2021, Item #29intervention of the pandemic. Poway's estimated share of the ARP is approximately $6.1 million. This progress across multiple fronts helped guide the Budget being proposed for FY 2021-22. Proposed FY 2021-22 Budget Considering the economic impacts of the pandemic described in the previous section, for FY 2021-22, staff projects a General Fund surplus of almost $700 thousand. This is primarily driven by Poway's anticipated second disbursement of ARP funding, half of Poway's estimated $6.1 million allocation or approximately $3.0 million. The anticipated ARP funding is helping the City return to full operations amidst a volatile economic environment for the FY 2021-22 Budget earlier than would have been possible without the Federal government's economic support. As a result of the anticipated ARP support, funding for capital replacement charges of almost $2.3 million as well as funding for most of the unfunded vacant positions of approximately $431 thousand is proposed. The vacant Management Analyst position in the City Manager's office is proposed to remain unfunded for the FY 2021-22 Budget. Since Poway is such a lean organization, funding the un-funded vacant positions helps ensure service levels are not impacted as staff covering duties of the un-funded positions is not sustainable long term. Funding capital replacement charges helps ensure the City has the funding to replace assets as needed to ensure the health and safety of our community and organization as well as the uninterrupted provision of services. Additionally, most General Fund CIP projects deferred during the FY 2020-21 budget, just under $600 thousand, are being proposed for the FY 2021-22 Budget. Most of these CIP projects are ensuring the General Fund's assets are appropriately maintained which helps reduce costs over the long-term. General Fund The proposed General Fund budget is balanced. A summary of the FY 2020-21 adopted budget and the FY 2021-22 request is shown below: Operating Revenues Non-Operating Revenues1 Total Revenues Operating Expenditures Non-Operating Expenditures1 Total Expenditures FY 2020-21 A~opted $47,804,586 2,294,754 50,099,340 48,427,651 1,660,228 50,087,879 . FY 2021-22 Request $53,438,386 795,977 54,234,363 50,499,788 3,074,337 53,574,125 Net Activity $11,461 $660,238 1. Non-operating revenues and expenditures are a combination of Programs/Capital Projects and Total Transfers/Loans in Attachment A. While staff continues to provide services at historical levels, it is becoming more challenging to do so. Consistent with the last four budget cycles, General Fund revenue streams are not keeping pace with the growth in expenditures. Based on an analysis of the Fiscal Year 2021-22 initial expenditure requests compared to the prior year's adopted budget, many of the expenditure increases not related to eliminating staff's retrenchment techniques from the Fiscal year 2020-21 budget are outside of the City's control. Examples of these are increases in the Law Enforcement contract, rising pension costs, and increases to insurance premiums. 3 of30
June 15, 2021, Item #29The City, along with the eight other cities in San Diego County that contract with the County for law enforcement services, is currently in the last year of a 5-year contract with the County of San Diego. Per the contract approved on June 20, 2017, the increase for the fifth year of the contract is 4.5 percent. Based on the contractual increase and adjusting the budget to reflect spending patterns, the budget for Law Enforcement increased approximately $520 thousand. Pension costs are projected to increase almost $425 thousand in FY 2021-22 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 7.0 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 7.0 percent return would reflect a June 30, 2020 market value of $398.68 billion. As of June 30, 2020, the PERF market value recovered from its pandemic trough to 392.5 billion, a 4.7 percent return. While better than initially anticipated, the 2.3 percent shortfall from the 7.0 percent target return will materialize in Poway's upcoming actuarials. Conversely, when the PERF investment performance exceeds the targeted 7.0 percent return in a given fiscal year, the surplus is distributed 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, 2020 of $392.5 billion, a 7.0 percent return would reflect a June 30, 2021 market value of just under $420.0 billion. As of June 1, 2021 the PERF market value was $464.4 billion, or a return of 18.3 percent. This will positively benefit the City's pension payments in two years by helping to lower them, all else being equal. While year over year payments to Cal PERS fluctuate, they will continue their upward trend. However, 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. While the rates are projected to peak, the City's overall payments may continue to increase for a while after. This can occur when salary increases are larger than the reduction in employer rates. The California Public Employees' Pension Reform Act (PEPRA) that took effect in January 2013 along with Cal PERS 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 $40,000 for FY 2021-22 partially due to recent claims experience and a hard insurance market. As mentioned previously, Poway's anticipated share of ARP funding is helping the City return to full operations for the FY 2021-22 Budget earlier than would have been possible without the Federal government's economic support. While there are not significant increases to the proposed Budget outside of unwinding the FY 2020-21 retrenchment, there are several General Fund projects of note taking place during the upcoming fiscal year. Staff is replacing software used to process permits, projects, code compliance, and business certificates, among other things, with an enterprise application called EnerGov. This new enterprise application is expected to go live in November 2021 and has the possibility to increase efficiencies, promote a better customer experience, and improve integration with the City's financial system Munis. Staff is excited about the potential community and internal process benefits from this new software. 4of30
June 15, 2021, Item #29Based on direction provided at the Poway Center for the Performing Arts (PCPA) workshop held on April 6, 2021, staff is also working on a multi-faceted strategy during the coming fiscal year to achieve greater cost recovery while still supporting the arts. This includes, but is not limited to, a fee study to ensure costs are more appropriately being recovered, discussions with the user groups to negotiate new agreements, and a feasibility study to determine the potential benefits of an endowment and/or capital campaign. On May 18, 2021, a generous $1 million grant provided by the McCarthy Family Foundation was accepted by the City Council to be used towards the feasibility study and to establish an endowment to help financially support the PCPA. Staff will return to Council with updates on this project as applicable. 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 2021-22 $648 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 $49.0 million. The information below shows the calculated reserve balances in compliance with the policy: FY 2020-21 FY 2021-22 Change Revenue Volatility Reserve $4,761,404 $4,905,400 $143,996 Expenditure Volatility Reserve 2,380,703 2,452,700 71,997 Extreme Events Reserve 14,284,213 14,716,201 431,989 -----------------------Tot a I $21,426,320 $22,074,301 $647,982 To help Poway's local economy, $2 million from the Extreme Events Reserve was used to fund the Poway Emergency Assistance Recovery Loan (PEARL) Program for small businesses. This amount is not reflected as a reduction in the reserve for the purposes of the FY 2021-22 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. Additionally, $1.5 million was proposed 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 during the FY 2020-21 budget. This transfer was not made due to an improving economic environment as well as the anticipated Federal economic aid through the ARP. As such, no repayment is necessary to comply with the General Fund Reserve Policy. Appropriations Limit Government Code Section 791 O 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 government's 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. 5 of 30
June 15, 2021, Item #29The 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 SB-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 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. For the FY 2021-22 Appropriations Limit, the City compared the growth in San Diego County's population from January 1, 2020 to January 1, 2021 of -0.37 (i.e. negative) percent to the growth in the City's population of -0.33 (i.e. negative) percent. The City then compared the growth in the California Per Capita Personal Income of 5.73 percent to the growth in Assessed Valuation of Nonresidential New Construction within the City of Poway of 0.33 percent. Choosing the growth in the City'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 2021-22 is $59,045,405. The City's FY 2021-22 Appropriations Subject to Limitation is $41,891,032, which is $17,154,373 below the Appropriations Limit. The attached Resolution (Attachment E) establishes the City of Poway's Appropriations Limit for FY 2021-22. Staffing: FY 2021-22 Changes Staffing costs represent approximately 36 percent of the total FY 2021-22 operating budget at $35.5 million. Staff is currently in negotiations between the City and its two bargaining units, the Poway Firefighters' Association (PFA) and the Teamsters Local 911 (Non-Safety). The Salary and Benefit Plan for unrepresented employees (Management-Confidential) is also being looked at. As such, the proposed FY 2021-22 Budget does not include any potential impacts that arise from the negotiating process or as a result of the unrepresented employee analysis. As shown below, a total increase of 3.02 regular full-time equivalents (FTE) is being requested for FY 2021-22: FY 2020-21 Adopted FY 2021-22 Request Legislative and Administrative Services 9.00 9.00 Finance 20.75 20.75 Human Resources and Risk Management 6.00 6.00 Community Services 24.10 23.12 Development Services 25.50 25.50 Public Works 83.00 87.00 Fire 57.00 57.00 Total 225.35 228.37 The 0.98 FTE decrease in Community Services is a combination of two things. First, a 0.2 FTE increase in Community Services is taking a 0.48 FTE part-time Administrative Assistant II position and making it a 0.50 FTE. Second, the elimination of a 1.0 FTE Recreation Supervisor position at PCPA is proposed as part of a larger reorganization in the Community Services Department. The reorganization for centralized oversight by the Community Services Director will provide a greater level of on-site 6 of30
June 15, 2021, Item #29management at each of Poway's unique community facilities spread across the City by reclassifying 4.0 FTE Recreation Supervisors at the Poway Swim Center, Community Park, Old Poway Park and the Lake Poway Recreation Area to Recreation Area Managers and reclassifying the Community Services Manager to a Recreation Area Manager at the Poway Center for the Performing Arts. These changes will ensure each one of Poway's community jewels has the highest level recreation manager responsible for and present at each site. The 4.00 FTE change in Public Works is the combination of two things. First, an additional 3.0 FTE Water Treatment Plant Operator Ill positions are being requested to ensure at least two State certified water treatment plant operators are on duty twenty-four hours a day. This will help ensure the safety of staff working at the plant in case of an emergency and help ensure the safety of the water supply. The estimated annual impact to the Water Fund for these three positions is approximately $377 thousand. Second, an additional 1.0 FTE Utility Systems Mechanic is being requested to increase the frequency of site inspections at critical remote asset sites and to have an appropriate number of State certified staff available to respond to emergency after hours call-outs. The estimated annual impact to the Water Fund for this position is approximately $126 thousand. Staff is requesting the salary grades of Senior Administrative Assistants -Confidential in the Management/Confidential group who have access to or support the work of employee and employer relations, including labor negotiations, be adjusted to 2.5% above non-confidential Senior Administrative Assistants to acknowledge the responsibility and accountability of keeping such sensitive matters confidential. The change affects 3.75 FTEs in the Finance, Fire, Human Resources and Public Works departments. There are also several reclassifications based on the changing needs of the organization included within the proposed budget as detailed below: • Finance o Reclassify two 0.50 FTE Water Meter Readers to Customer Services Field Workers • Community Services o Reclassify 4.0 FTE Recreation Supervisors to Recreation Area Managers o Reclassify 1.0 FTE Community Services Manager to Recreation Area Manager Y-Rated • Public Works • Fire o Reclassify 1.0 FTE Water Treatment Plant Supervisor to Water Treatment Plant Manager o Reclassify 1.0 FTE Parks Maintenance Supervisor to Parks and Trails Area Manager o Reclassify 1.0 FTE Lead Facilities Maintenance Technician to Senior Facilities Maintenance Technician (title change only; no change in salary grade) o Reclassify 1.0 FTE Management Analyst to Senior Management Analyst As discussed in the economic impacts section above, the FY 2020-21 Budget request included the un-funding of seven vacant positions. Un-funding a vacant position eliminates the budget but preserves the authorized FTE. The FTE is preserved because the position is still needed to support City operations. Some positions were unfunded 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 unfunded for half the fiscal year such as the Senior Administrative Assistant in Development Services. As mentioned, all unfunded vacant positions are being proposed for funding in the FY 2021-22 Budget, with the exception of the City Manager's Management Analyst and the Recreation Supervisor as the latter is proposed to be eliminated as part 7 of30
June 15, 2021, Item #29of the Community Services Department reorganization. The cost of funding the unfunded positions is approximately $431 thousand. A separate wage schedule is proposed for designated part-time, temporary/seasonal classifications and is fully compliant with California minimum wage requirements, which increased to $14.00 per hour effective January 1, 2021. Capital Improvement Program Similar to the operating budget, staff reviewed the Capital Improvement Program (CIP) budget requests during last year's budget 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 could preserve its cash on hand and help improve liquidity; both of which are important to help the City weather a recession. Some projects that were deferred in last year's budget to help mitigate the economic impacts of the COVI D-19 pandemic are no longer being deferred due to improving economic conditions. One example is the Upper Lake Poway Playground Renovation project. A few projects, however, continue to be deferred such as 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 46 active and proposed projects in the coming year, with $15.74 million appropriated in FY 2021-22 for a total of $64.77 million in appropriations for these projects. FY 2021-22 street projects include additional funding in the amount of $663,000 for the construction of phase 2 of the Espola Road Safety Improvements project and $250,000 for the Traffic Signal Controller Upgrades project, which is an ongoing program to upgrade the City's aging signal controllers. Also included is $2. 74 million in funding for the Pavement Management Program projects, which include FY 2021-22 Street Maintenance, FY 2021-22 Street Overlay, and FY 2021-22 Street Striping. These three projects have previously been in the Public Works Operating Budget but will be budgeted as CIP projects starting with this year's budget. On-going, previously funded projects include the Espola Road Safety Improvements, Espola Road Bike Lanes, Neighborhood Sidewalks, Traffic Signal Controller Upgrades, FY 2020-21 Street Overlay, and LED Street & Safety Lighting Conversion projects. The Espola Road Safety Improvements project is nearing completion of the utility undergrounding phase while the remaining pathway improvements are currently being advertised for construction. The Espola Road Bike Lanes project remains in design due to continued ongoing coordination with the San Diego County Water Authority for a portion of the project that crosses one of their easements. The LED Street & Safety Lighting Conversion project has completed conversion of all standard streetlights and all decorative lighting in the Civic Center area, within the public right-of-way. Staff has selected a manufacturer for the conversion of the Old Poway Park area lights and is coordinating the final costs for that portion of the conversion prior to the installation. The FY 2020-21 Street Overlay project is currently under construction. A consultant agreement was recently approved by the City Council for the Local Road Safety Plan. Drainage funding in the amount of $730,000 is being requested. This includes $130,000 for the third 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. The Corrugated 8 of 30
June 15, 2021, Item #29Metal Pipe (CMP) Annual Repair/Replace project is proposed to receive $300,000 in funding for repair and or replacement of deteriorating CMP pipes throughout the City. The Channel Rehabilitation -Carlson & Springvale and Rattlesnake Creek Streambank Stabilization are newly proposed projects. The Channel Rehabilitation -Carlson & Springvale will repair existing deteriorated concrete drainage channels. The Rattlesnake Creek Streambank Stabilization project includes $150,000 in design funds for a project to stabilize the creek and reduce flooding potential between Budwin Lane and Midland Road. Staff is currently pursuing grant funds to cover construction for this project. Previously funded projects include the second year of the Annual Trash Capture Program which is currently in design. Funding for Public Facilities projects includes $157,663 for ADA Barrier Removal projects that will address accessibility issues at Community Park in accordance with the Americans with Disabilities Act (ADA). The project is funded with Community Development Block Grant (CDBG) grant funds and is reimbursed through the grant funding upon completion of the work. Funding also includes $589,000 in Public Facilities Renovation projects for roofing repairs, general maintenance, HVAC replacements, and painting. This is a series of maintenance projects that are typically managed by the Public Works Department but may also be managed by CIP staff. Funding is also proposed for the Upper Lake Poway Playground Renovation, Vehicle Maintenance Monument Sign Replacement, and PCPA Facility Maintenance Design projects. The Upper Lake Poway Playground Renovation project was originally programmed with the FY 2020-21 CIP budget but was deferred. Total proposed funding for Public Facilities projects is $1.76 million. Other previously funded buildings projects include the Mickey Cafagna Community Center which is substantially complete, the City Hall HVAC Controls project which is under construction, and the Blue Sky Amphitheater Shade Structure project which is on hold pending future funding. 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, Clearwell Bypass, SDCWA Treated Water Connection, and Annual Water Valve Replacement (FY 2020-21 ). The Annual Water Valve Replacement (FY 2019-20) project was recently accepted by the City Council as complete. The Chemical Building and Tank Farm Upgrades project is complete and scheduled for acceptance at the June 15, 2021 City Council meeting. The Boulder Mountain Reservoir I & II Rehabilitation project is 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 $6.5 million is being requested for three ongoing projects: Clearwell Replacement, SDCWA Treated Water Connection, and Clearwell Bypass. These projects are being managed by the Public Works Department and are at various stages of design. Funding for seven new projects and one annual program project in the amount of $2.1 million is also being requested. These projects include the Caustic Tank Rehabilitation, R-4 Reservoir Upgrades, R-7 Reservoir Rehabilitation, Reservoir Overflow Modifications, Washwater Tank No. 2 Upgrades, WTP Upgrade Filters 1-8 (design only}, WTP Security Upgrades, and the annual Water Valve Replacement (FY 2021-22). 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 $999,000 will be used for design and construction of the Sagewood Drive 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 Bowron Road Sewer Upsize, Butterfield Trail Sewer Upsize, Exposed Sewer East of Martincoit, and the Annual Sewer Line Repair/Replace projects. Construction contracts for the Bowron Road Sewer Upsize and Exposed Sewer East of Martincoit projects were recently awarded and construction is expected to begin soon on both projects. The Annual Sewer 9 of30
June 15, 2021, Item #29Line Repair/Replace project was originally a project to replace a sewer line on Pomerado Road at Stone Canyon Road. Based on the challenges with this project, staff completed a redesign to repair the existing line. The award of this project is scheduled for the June 15 City Council meeting. The Butterfield Trail Sewer Upsize project design has not yet started. It was placed on hold due to development of the former Stoneridge Golf Course. Water, Recycled Water and Wastewater The FY 2021-22 Budget includes the operating and capital requests that are generally 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. Those adopted rates are effective through calendar year 2021. However, one notable difference is the FY 2021-22 Budget includes more costs associated with the Water Infrastructure Improvement Program. This program is comprised of the Clearwell Bypass, the Clearwell Replacement, and the San Diego County Water Authority (SDCWA) Treated Water Connection projects. The goal of these projects is to improve the reliability, redundancy, and resiliency of Poway's water system and represents the single largest set of capital improvement projects in the City's history. These projects are currently estimated to cost $69.5 million in total. Based on the critical importance of these projects and in anticipation that a viable funding structure can be developed, the FY 2021-22 Budget includes Phase 1 costs. Phase 1 costs are comprised of the Clearwell Bypass project costs as well as planning and design costs for the Clearwell Replacement and SDCWA Treated Water Connection projects. Revenue associated with those costs totaling $15.5 million has also been included in the Budget. This amount represents the anticipated revenue needed to fund the Phase 1 costs. The estimated revenue may be pay-go funded, debt financed, financed with grants, or some combination thereof. Each funding approach has benefits and drawbacks. For example, pay-go funding avoids debt costs such as interest which helps lower costs to ratepayers. However, raising an estimated $69.5 million for these projects over the next five years through increased rates would put a large burden on current ratepayers. Debt financing does increase total costs to ratepayers. However, it significantly reduces the annual impact to ratepayers and provides intergenerational equity. Intergenerational equity helps align the costs of the projects to the ratepayers benefiting from them. As the assets constructed from these projects are anticipated to last between 50 and 100 years, it makes sense that the people benefiting from them should help pay for them. While grant money is free money, it can add costs to the projects through additional grant-specific requirements or significantly impact timelines. Staff's goal is to develop a funding structure that balances the benefits and drawbacks of each approach while minimizing the impacts to ratepayers helping ensure the long-term sustainability of the water enterprise. Staff has not yet presented a funding structure for Phase 1 costs to Council for their consideration. Additionally, the rate setting process for rates effective beginningJanuary 1, 2022 needs to occur prior to the calendar year end. Staff anticipates presenting a funding structure and proposed rates early this fall as both components are intertwined. Should a viable funding structure or the rate setting process encounter challenges, staff would return to Council to discuss options for Phase 1 costs. 10 of 30
June 15, 2021, Item #29Long Range Forecast Staff presented the first version of the long-range forecast for the General Fund to Council on March 2, 2021. A long-range forecast does not predict the future; actuals results will differ from the forecast. Forecasts are inherently uncertain and the degree of uncertainty increases the longer the time horizon of the forecast is. However, a long-range forecast does help identify future challenges and opportunities, causes of fiscal imbalances, and strategies to secure financial sustainability. Long-range forecasts help examine the long-range financial implications of current decision making, take a broader look at the financial position and requirements, and highlight potential issues ahead of time to provide opportunities for proactive versus reactive solutions. They also reinforce the need to follow sounds financial management practices and help communicate to people in a format other than the annual budget. A long-range forecast also helps demonstrate a dedication to sound financial management to credit rating agencies. A long-range forecast for the City of Poway will help continue the City's tradition of proactive financial management to help ensure the City can provide a consistent and sustainable level of essential services into the future. Since presentation of the first version to Council in March, staff has updated the long-range forecast to include the projections for FY 2020-21 and the Budget for FY 2021-22. The following two charts present the updated forecast for revenues and expenditures as well as the projected change in General Fund balance over the forecast period. VJ (1,) './) C (1,) Q. >< u.J ~ •.r, a., ::J C a., > (1,) 0:: 75,000,000.00 70,000,000.00 65,000,000.00 60,C.XJ0, 000 .00 55,000,000.00 50,000,000.00 45,000,000.00 40,000,000.00 35,000.,000.00 11 of 30 General Fund Revenues and Expenses (FY 21-22 Budget as of 5/24/21) ~--~--"' , \ , fl ...... Total Revenues ...... Total Expenses _ .. -----· ,,,,. ----
June 15, 2021, Item #294,000,000.00 S35M 3,000,000.00 VJ ll) 1./) 2,000,000.00 C ll) 0.. X u.J ~ 1,000,000.00 VJ ll) ::, ,.. ll) > S09M I Q,,) a:: (1,000,000.00) (2,000,000.00) General Fund Surplus/(Deficit) (FY 21-22 Budget as of 5/24/21) S0.8M S00M I I I ( 1W) ( 161.1) S3.6M S1.0M I I I I (SO~J,1) (SO 4M{~05J,1) (SO Br,1) S1.8M The current long-range forecast looks generally similar to the long-range forecast presented to Council in March with two exceptions. First, the projections for FY 2020-21 and FY 2021-22 are materially higher than they were in March. This is solely driven by the ARP funds discussed earlier in this report. In each of those two years, approximately $3.0 million in the ARP revenue is included in the numbers. This one-time Federal economic support will help the City's General Fund return to normal operations earlier than originally projected. Second, the anticipated deficits in FY 2022-23 through FY 2025-26 have shrunk. This is partially a result of the FY 2021-22 Budget being lower than forecast in March and some minor changes to Community Services revenue assumptions. Overall, and based on the current data, the next few years will be challenging to maintain the status quo for the City's General Fund, let alone fund increases in personnel, services, or capital spending. Expenses continue to increase more quickly than revenues. As CalPERS pension reform begins to show results and the City's current development projects come online, maintaining the status quo will become more feasible with the possibility to fund increases in personnel, services, or capital spending becoming significantly more feasible towards the late 2020's. Staff is currently pursuing a couple potential opportunities to help address the anticipated near-term deficits. These opportunities will be presented to Council for their consideration later this year. Budget Review Committee The Budget Review Committee completed a review of the proposed FY 2021-22 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. 12 of 30
June 15, 2021, Item #29Environmental 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 3 and Thursday, June 10, 2021. Attachments: A. General Fund Budget Summary B. Report of Recommendations by the Budget Review Committee C. Resolution Approving Changes to the City of Poway Position Classification Plan and the City of Poway Salary Schedule for Management/Confidential Employees D. Resolution Approving the Part-Time Temporary/Seasonal Wage Schedule E. Resolution Approving and Adopting the Annual Operating Budget and Capital Improvement Program for Fiscal Year 2021-22 and Appropriating Funds F. Resolution Adopting an Appropriations Limit as Required by Article XIIIB of the California Constitution for the Fiscal Year Ending June 30, 2021 G. FY 2021-22 Proposed Operating Budget and Capital Improvement Program (on file with the Office of the City Clerk) Reviewed/ Approved By: ·~~~ Wend~aserman Assistant City Manager 13 of 30 Reviewed By: Alan Fenstermacher City Attorney Approved By: c~ City Manager https://docs.poway.org/WebLink/Browse.aspx?id=151670&dbid=1&repo=CityofPoway
June 15, 2021, Item #29GENERAL FUND Fund Number: 1000 2017-18 2018-19 2019-20 2020-21 2020-21 2021-22 Actual Actual Actual Budget Estimated Budget FUNDS AVAILABLE Beginning Fund Balance (July 1) $2,998,892 $6,609,793 $7,507,427 $8,600,755 $8,600,755 $11,903,168 REVENUES Taxes & Franchises Property Tax 22,347,362 21,976,204 22,362,155 22,543,000 22,901,668 23,915,349 Sales Tax 13,981,478 14,774,047 14,185,047 13,105,318 14,564,656 15,249,195 Franchise Fees, TOT 3,073,257 3,074,257 2,890,708 3,006,000 2,693,770 2,982,500 Fees, Permits & Services 7,139,869 6,792,990 6,089,210 6,604,166 5,429,520 5,823,031 Use of Property, Grants, Other 3,437,521 2,713,213 3,014,340 2,546,102 5,456,732 5,468,311 Total General Fund Revenues 49,979,487 49,330,712 48,541,459 47,804,586 51,046,346 53,438,386 TOTAL FUNDS AVAILABLE 52,978,379 55,940,505 56,048,886 56,405,341 59,647,101 65,341,554 EXPENDITURES Operating Expenses Legislative and Admin. Services 1,085,043 1,091,726 1,052,212 1,107,317 1,089,887 1,006,937 Finance 1,612,560 1,811,502 1,793,891 1,650,532 1,662,706 1,789,862 Human Resources 1,019,145 1,097,501 1,119,226 1,158,635 1,218,689 1,117,409 Community Services 5,750,689 5,810,116 5,583,546 5,547,593 5,074,006 6,291,602 Development Services 4,468,523 4,287,155 4,996,920 4,851,951 3,800,373 4,895,297 Public Works 5,443,424 5,407,439 5,833,641 6,370,123 6,478,402 6,922,415 Fire 12,207,895 12,404,543 13,175,004 13,447,219 13,290,480 13,658,574 Law Enforcement 11,976,275 12,720,762 13,512,329 14,294,281 14,263,916 14,817,692 Total Operating Expenses 43,563,554 44,630,744 47,066,769 48,427,651 46,878,460 50,499,788 Capital Projects 1,165,949 2,243,758 60,070 60,070 583,000 Programs 210,386 102,500 62,886 2,500 2,500 2,500 Total Capital Projects/Programs 1,376,335 2,346,258 62,886 62,570 62,570 585,500 TOTAL EXPENDITURES 44,939,889 46,977,002 47,129,655 48,490,221 46,941,030 51,085,288 TRANSFERS/LOANS Water Fund Loan 401,250 537,622 Street Loan Repayment/Write-Off 261,054 Park Fund Loan Repayment 307,228 Reserve Funds Transfers ln/(Out) (669,430) (1,742,740) 62,428 941,936 (558,064) (647,982) All Other Transfers ln/(Out) (1,197,139) (781,340) (623,851) (244,840) (244,840) (1,044,878) Encumbrance Roll Forward Other Fund Balance Activity 36,622 (37,900) 242,947 TOTAL TRANSFERS/LOANS {1,428,697} {1,456,076} (318,476} 697,096 (802,904} {1,692,860} NET FUND ACTIVITY 3,610,901 897,634 1,093,328 11,461 3,302,412 660,238 ENDING FUND BALANCE $6,609,793 $7,507,427 $8,600,755 $8,612,216 $11,903,168 $12,563,406 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. 14 of 30 ATTACHMENT A
June 15, 2021, Item #29Date: To: From: Subject: June 1, 2021 Honorable Mayor and Members of the City Council Budget Review Committee Committee Input and Recommendations for FY 2021-22 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 2021-2022. Introduction The City of Poway faced an unprecedented budget outlook when this committee met last year as the Covid-19 pandemic was early in its onset. Worldwide, 160 million people were infected and over 3 million perished due to the virus in the ensuing twelve months. In Poway, lives were upended, schools were closed, and state-mandated closures brought unprecedented hardships for Poway businesses and families. At this time last year, the City of Poway proposed a plan of "retrenchment," leaving vacancies unfilled and foregoing almost $2 million in regularly scheduled asset maintenance. Fortunately, tax revenues were higher than expected and retrenchment proved to be a smart move, given the uncertainty of the situation. While the BRC has numerous concerns, which will be addressed in this memo, we support the City returning to a normal state of staffing and asset maintenance, which creates some cost increases in the proposed FY 2021-22 budget compared to last year. We thank the City's staff, especially City Manager Chris Hazeltine, Assistant City Manager Wendy Kaserman, Director of Finance Aaron Beanan, and Senior Administrative Assistant Jenny Paglinawan for their support for the BRC. We also thank all of the members of the public who spoke, submitted comments, and tuned into the meetings. This Committee is an important means of transparency, accountability, and accessibility for the public. We are thankful for the opportunity to have served and look forward to the City's continued support of the BRC. A Summary of Poway's FY 2021-22 Proposed Budget Despite being a generally well-governed and well-managed city with a long history of good accounting procedures and fiscally responsible revenue application, the forecast has been troubling for years, largely due to large increases in personnel costs. Simply put: The costs of operating the city are not keeping up with revenue. The concerns raised from recent BRC sessions remain relevant today. To recall a statement in the 2019 BRC memo: "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." General Fund Overview As the Budget states, the General Fund is the City's principal source for fire protection, law enforcement, parks and recreation, planning and engineering and other operations. The primary source of revenues for the General Fund are property taxes, sales tax, and fees for services. While the budget is balanced, it is important for the Mayor and Council to understand that this is only because of $3 million in federal stimulus dollars in the coming fiscal year. With those federal dollars, the City of Poway is able to maintain a normal level of service for Poway residents; without it, service levels would be reduced. 15 of 30 ATTACHMENT B
June 15, 2021, Item #29In the current proposed budget, General Fund revenue is forecast to be $53 million in FY 2021-22, which is an increase from an estimated $51 million received in the previous FY 2020-21 fiscal year. General Fund expenditures are budgeted at just over $51 million, up from an estimated $47 million in the previous fiscal year during retrenchment. Due to dramatic cutbacks on spending under retrenchment in FY 2020-21, the City is expected to have an increase in fund balance, from $8.6 million last year to an estimated $11.9 million at the end of the FY 2020-21 fiscal year in June. This is largely due to the land sale to Poway Commons, as well as funds from the American Rescue Plan Act. This will prove helpful in addressing significant one-time costs facing the city in the near-term, like the Penasquitos Lagoon Project. The City's non-General Fund operating budget is over $47 million. The capital budget includes $16 million in new requests; half a million of that is related to General Fund projects. Expenditures Expenditures are budgeted to increase $4.1 million from the prior year's projections. This is largely due to bringing back items previously retrenched, notably capital asset management of $1.5 million, reserve transfers of $700,000, law enforcement contract increases of more than $500,000, increase in retirement-related costs of $500,000 paid to the California Public Employees Retirement System (CalPERS), restoring the budget for unfunded positions at a cost of $350,000, and catching up on deferred capital projects of $500,000. Ever-rising personnel costs are the largest contributing factor to the City's expenditures, driven largely by 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 costly retirement benefit. Despite this, it must be noted that personnel costs are both the City's largest expense and, due to CalPERS pension obligations, they are ongoing operating expenses. Those costs must be controlled as much as possible. Although it is tempting to expand the range of available services when there are indications of additional budgetary solvency, it is important that the city continue to maintain focus on supporting the primary core values of public safety, good roads, and clean water. One area that could be addressed by the City Council in the future is employee compensation, especially the City's contribution toward employee health insurance costs. 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. In that vein and where possible, the BRC recommends that the city consider totality of compensation strategies to retain talent within the staffing ranks. This would generally consist of compensatory options outside of traditional regular pay increases. Specific Items of Note The City of Poway is a service-providing organization that relies on tax and fee 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. Some of the primary means of achieving that goal are below: Budget readability The BRC commends Aaron Beanan and his staff for producing a much more readable and transparent budget than we have seen from the City of Poway. Many previous BRC recommendations have been incorporated into the budget, including highlighting personnel costs, even separating pension and healthcare costs as their own line-item. The inclusion of a running fund balance in an easy-to-view chart 16 of 30 2
June 15, 2021, Item #29is also a great improvement. Additionally, the "About" sections in the proposed budget are a helpful, clear, and concise addition for the public. The BRC also recognizes the City Manager and Director of Finance for their inclusion of a longer view of the City's financial forecast in this year's budget, as recommended in recent BRC memos. Revenue growth Revenue increases should be accomplished primarily through increasing the size of the property tax base rather than increasing the tax rate. This type of revenue generation without tax increases can only occur through a continuation of redevelopment in areas where it is currently permitted and by encouraging and streamlining the ability of Poway residents to improve their own properties. It is critical that the city not impede this type of growth through excessive or unnecessary regulatory burdens and costs, and rather should act as a partner and facilitator in these activities. Tax increases on Powegians should not be an option. Development Services Department An efficient and well managed Development Services Department (DSD) is central to the efforts of increasing the rate of revenue growth to the point that it exceeds the growth in expenses. This department operates in a deficit and efforts should be taken to increase permitting throughput to achieve cost neutrality. The BRC recommends that City management push for the maximum level of efficiencies, streamlining, and customer service at DSD. The better the Department gets at moving projects through the pipeline quickly, the more direct and recurring revenue the City can generate. The BRC recommends the Department continue to streamline their processes and simplify requirements in order to reduce permit time and reduce City costs on project approvals. We are hopeful that the City's adoption of the EnerGov software will help improve these efficiencies. For background, the City's current software to manage and track permits, projects, code compliance, and business/regulatory licensing is over a decade old. With the exception of business certificates, the current system does not provide an online interface to submit, pay and interact with City staff for these civic services. Implementation of EnerGov and the associated Blue beam plan review software will allow the City to provide these services online, including the option of online submittal and real-time project tracking. Additionally, the City should employ trackable metrics to identify key regulatory or process pain points that increase turnaround time from project start to final inspection signoff. Key performance indicators, such as the percentage of projects completed in fewer than three eligible review cycles, the percentage of projects completed within the established departmental deadlines, and the percentage of inspections performed within next day would provide the City Council and upper management with good overall relative metrics for the department. More granular metrics, such as the frequency of the class of regulation that requires additional review, and the general types of questions that low volume and high volume users ask can guide the city management towards targeted regulatory streamlining that can smooth the process of development from concept to completion. It is critical that DSD clearly, proactively, and in a timely manner, communicate with prospective developers and business owners about the bounds of what and where structures can be built to ensure efficient use of capital for development and growth. Finally, this committee supports recent actions by the city to ensure that outdoor dining and other uses that have seen success over the last year remain a continued option for Poway residents and businesses. 17 of 30 3
June 15, 2021, Item #29Poway Center for the Performing Arts Over the past several years multiple BRCs have highlighted the need for the City to look closely at the Poway Center for the Performing Arts (PCPA) operating model and budget. PCPA represents a financial drain on the City of over $1 million in the proposed budget and consistently runs at a deficit. Negotiations with Poway Unified School District (PUSD) for a district purchase of the facility were not fruitful and therefore a combination of decreased direct subsidies and increased external funding partnerships should be pursued. Increasing the flexibility of booking partners to set prices to maximize profitably, coupled with a more robust revenue sharing agreement may enable the facility to come closer to cost neutral operations. Additionally, occupancy and profit/loss metrics should be kept allowing accurate, timely, and helpful feedback amongst all partners. Third party management and/or booking servicers should be considered if they are found to be more suitable. The City Council held a PCP A workshop on April 6, 2021 during which the City Council provided staff with direction on a number of items geared toward improving the long-term financial sustainability of the PCPA. Options discussed included eliminating the direct cash subsidy provided to Poway OnStage ($93,350 in the current fiscal year), evaluating other options for booking services to schedule the professional performance series at the PCPA to potentially generate new revenue for the City, renegotiating the City's cost sharing agreement with PUSD, completing a feasibility study to explore the potential for creating a new endowment to support the PCPA, completing a fee study with the intention to move toward greater cost recovery in the fee structure, evaluating operations to potentially have the facility open for more dates throughout the year, and conducting research to implement best practices from other venues to potentially improve efficiencies and reduce costs. Recognizing that many of these items will take time for staff to complete and user groups need advance notice on fee and operational changes, Council set a goal for staff to reduce the overall subsidy of the facility by 50% beginning in FY 2022-23. The BRC supports this and other efforts to reduce the significant costs associated with the facility. Overtime Poway is fortunate to have built 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. One in every five dollars spent on employee compensation within the Fire 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 the PEPRA retirement plan, overtime will not be cost-effective like it once was. We once again recommend that the City Council examine the department's overtime costs, especially once 50% of PEPRA employees are on the Fire Department payroll. Capital Expenditures to Reduce Operational Expenses Where possible and timely, the city should consider capital improvement projects to reduce ongoing operational expenses. Of note, the utility costs required to treat and move the water and sewage run to nearly $800,000/year. During the large scale water improvement/reliability projects currently in the planning stage, it may be worth exploring if locally generated and controlled power sources, such as solar 4 18 of 30
June 15, 2021, Item #29and/or battery storage options, are cost effective at reducing or eliminating this ongoing operational expense. Additionally, as California approaches state-mandated requirements for electric vehicles, the city should consider a long-term approach to transition the fleet before other agencies in the state do the same. Mitigation of unexpected financial risk The city should make every attempt to extricate itself from financial risk 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 Phase II of the Los Penasquitos Lagoon silt reduction project. The thoughtful negotiation efforts of the Development Services Department to spread the Phase I payments out over eight years has reduced the sting of this unfunded external environmental decree. However, the time to understand the requirements to avoid financial entanglement in Phase II of this project is now. 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 these types of liabilities. Water Revenues It's important for the City Council to understand that water revenues are budgeted to increase by $16 million in FY 2021-22. This increase is much higher than previous budgets. This major budget increase is due to the city's pursuit of significant capital improvement projects for the city's water supply including a connection to treated water and the removal of the outdated clearwell and replacement with modern water storage tanks. If adopted, this revenue increase will likely have to come from one or a variety of sources. Other agencies have pursued increased water usage fees, grants, and bond financing in similar instances. The City Council must do everything in its power to keep water rates low for Poway residents. Reserves The BRC notes that the city is fully funding the General Fund reserve at the Council-mandated level of 45% of General Fund operating expenses. BRC Format Finally, we thank the Mayor and City Council for continuing to support the mission of the Budget Review Committee (BRC). This committee provides an important extra review of the proposed city budget before it is brought before the City Council each year. Indeed, we appreciate not only the support of the committee but the willingness of the City Council to adjust and improve the format of the committee over time as needed. The City Council's decision earlier this year to stagger terms on the BRC will be an important improvement of the process by allowing continuity of experience year-over-year. The most significant challenge facing this committee since its inception has been the need to get a completely new committee up-to-speed on municipal finance and the basics of the organization every two years. We commend staff and the elected officials for their support of this wise improvement to the process. 5 19 of 30
June 15, 2021, Item #29N ~ Brian Pepin, Chairman Bob McKeon, Vice Chairman Nick Carruthers 6 20 of 30
June 15, 2021, Item #29RESOLUTION NO. 21-A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF POWAY, CALIFORNIA, APPROVING CHANGES TO THE CITY OF POWAY POSITION CLASSIFICATION PLAN AND THE CITY OF POWAY SALARY SCHEDULE FOR MANAGEMENT / CONFIDENTIAL EMPLOYEES WHEREAS, classification systems are fluid and dynamic and should be updated periodically based on changing needs of and the public services provided to the community; WHEREAS, the City of Poway's Community Services Department oversees unique recreation facilities with distinct and diverse community character that are spread across the Poway community in various locations; WHEREAS, each unique facility is considered a community jewel, best served with oversight from the highest level of on-site recreation management; WHEREAS, the classification identified to provide the highest level of on-site oversight and management at each facility is a Recreation Area Manager; WHEREAS, each Recreation Supervisor classification is reclassified to a new Recreation Area Manager setting the salary range for the new classification at grade 560 as an Exempt At-Will position in Group 2A on the Management/Confidential Salary Schedule, attached hereto as Exhibit B, and adding the classification to the Position Classification Plan, attached hereto as Exhibit A; WHEREAS, the new Recreation Area Manager position is classified as an at-will position but current employees who are reclassified from Recreation Supervisor to Recreation Area Manager will not be considered at will employees and will remain in the classified service; when an incumbent of the Recreation Area Manager position leaves employment, the incoming employee will hold an at-will classification; WHEREAS, the current Community Services Manager is reclassified as a Recreation Area Manager with a Y-Rated salary; WHEREAS, it is also necessary for the City to maintain over 16 City parks, 78 miles of trails, and over 2,400 acres of City-owned designated open space; WHEREAS, the City must ensure public parks and spaces are maintained in a safe and accessible manner to all City residents and visitors, in compliance with regulatory requirements; WHEREAS, the City has determined the Parks Maintenance Supervisor position should be reclassified to a Parks and Trails Area Manager to reflect the appropriate level management oversight provided for the City's beloved parks, trails and open space; WHEREAS, the salary grade for the Parks and Trails Area Manager will be set at Grade 560, and the position will be classified as an Exempt At-Will position in Group 2A on the Management/Confidential Salary Schedule, attached hereto as Exhibit B, and adding the classification to the Position Classification Plan, attached hereto as Exhibit A; 21 of 30 ATTACHMENT C
June 15, 2021, Item #29WHEREAS, the new Parks and Trails Area Manager position is classified as an at-will position but the current employee who will be reclassified from Parks Maintenance Supervisor to Parks and Trails Area Manager will not be considered at an will employee and will remain in the classified service; when the incumbent of the Parks and Trails Area Manager position leaves employment, the incoming employee will hold an at-will classification; WHEREAS, the City of Poway operates a modern water treatment and distribution system, whereby approximately 3 billion gallons of drinking water are treated every year at the Lester J. Berglund (LJB) Water Treatment Plant before being distributed to the Poway community; WHEREAS, the City has also determined that a Water Treatment Plant Manager is the appropriate level for a position that is responsible for the day to day management, operations and safety of the LJB Water Treatment Plant and the position bears a significant responsibility of ensuring clean and reliable drinking water enters a system of pipes, pump stations, and reservoirs for delivery to customer's homes and businesses; WHEREAS, the salary grade for the Water Treatment Plant Manager will be set at Grade 681, and the position will be classified as an Exempt At-Will position in Group 2A on the ManagemenUConfidential Salary Schedule, attached hereto as Exhibit B, and adding the classification to the Position Classification Plan, attached hereto as Exhibit A; WHEREAS, the Water Treatment Plant Manager position is classified as an at-will position but the current employee who will be reclassified from Water Treatment Plant Supervisor to Water Treatment Plant Manager will not be considered at an will employee and will remain in the classified service; when the incumbent of the Water Treatment Plant Manager position leaves employment, the incoming employee will hold an at-will classification; WHEREAS, the Senior Administrative Assistant -Confidential classification in the ManagemenUConfidential Group is privy to and provides administrative support on matters involving employee and employer relations, including labor negotiations; WHEREAS, the employees in the Senior Administrative Assistant -Confidential positions must maintain a high level of confidentiality in the course of work which bears significant responsibility and increased accountability; WHEREAS, the salary grade of Senior Administrative Assistant -Confidential classification in the ManagemenUConfidential Group salary is changed to Grade 380, which is 2.5% above the Senior Administrative Assistant classification that is not in the ManagemenUConfidential group, to acknowledge the significant responsibility of having access to and supporting the City's employee and employer relations functions; and WHEREAS, the City Council must approve new classifications added to the City's Classification Plan, Salary Range Adjustments, and changes to the Salary Schedule. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Poway that the following personnel changes are authorized effective the first day of the first full pay period in July and the City's Position Classification Plan and Management/Confidential Salary Schedule are approved with the following changes reflected: 22 of 30
June 15, 2021, Item #29SECTION 1: Reclassify 4.0 Full Time Equivalent (FTE) Recreation Supervisors at Grade 441 in Group 3 Non-Exempt of the Management/Confidential Salary Schedule with a monthly salary range of $4,844 to $5,888 to a new position on the City's Position Classification Plan of Recreation Area Manager at Grade 560 in Group 2A Exempt At-Will of the Management/Confidential Salary Schedule with a monthly salary range of $6,470 to $7,865. SECTION 2: Reclassify the Community Services Manager classification at Grade 681 with a monthly salary range of $8,778 to $10,670 to Recreation Area Supervisor Y-Rated at the same salary and grade. SECTION 3: Reclassify the Parks Maintenance Supervisor classification at Grade 521 in Group 3 Non-Exempt of the Management/Confidential Salary Schedule with a monthly salary range of $5,902 to $7,174 to a new position on the City's Position Classification Plan of Parks and Trails Area Manager at Grade 560 in Group 2A Exempt At-Will of the Management/Confidential Salary Schedule with a monthly salary range of $6,470 to $7,865. SECTION 4: Adjust the salary range for the position of Water Treatment Plant Supervisor to Water Treatment Plant Manager from Grade 630 with a monthly range of $7,691 to $9,349 to Grade 681 with a monthly range of $8,778 -$10,670. SECTION 5: Adjust the salary range for the position of the Confidential Senior Administrative Assistant from Grade 371 with a monthly range of $4,075 to $4,954 to Grade 380 with a monthly range of $4,148 to $5,042. SECTION 6: The proposed classification specifications for Recreation Area Manager, Parks and Trails Area Manager, and Water Treatment Plant Manager are on file in the Human Resources and Risk Management Department and available on the City's website. PASSED, ADOPTED AND APPROVED at a Regular Meeting of the City Council of the City of Poway, California on the 15th day of June, 2021 by the following vote, to wit: AYES: NOES: ABSENT: DISQUALIFIED: Steve Vaus, Mayor ATTEST: Vaida Pavolas, CMC, City Clerk 23 of 30
June 15, 2021, Item #29Classification Accountant Accounting Technician I Accounting Technician II Administrative Assistant I Administrative Assistant II Administrative Assistant III Aquatics Coordinator Assistant City Manager Assistant Director of Finance Operations Assistant Director of Public Works for Maintenance Operations Assistant Director of Public Works for Utilities Assistant Engineer Assistant Planner Associate Civil Engineer Associate Planner Box Office Attendant Box Office Coordinator City Clerk City Engineer City Manager City Planner Code Compliance Officer Community Outreach Coordinator Construction Maintenance Crew Leader Construction Maintenance Supervisor Construction Maintenance Worker I Construction Maintenance Worker II Contract Specialist/Inspector Cross-Connection Specialist Customer Services Field Worker Customer Services Technician I Customer Services Technician II Deputy Fire Chief Development Services Aide Director of Community Services Director of Development Services Director of Finance Director of Human Resources & Risk Management Director of Public Works Dock Attendant Economic Development Administrator Engineering Inspector Engineering Technician I 24 of 30 EXHIBIT A City of Poway Position Classification Plan Classification Engineering Technician II Equipment Mechanic Executive Assistant to the City Manager Facilities Maintenance and Special Districts Supervisor Facilities Maintenance Technician I Facilities Maintenance Technician II Finance Manager Fire Battalion Chief Fire Captain/Paramedic Fire Chief Fire Engineer/Paramedic Fire Safety Inspector Firefighter/Paramedic Fleet Maintenance Supervisor Front of House Assistant Front of House Coordinator GIS Analyst GIS Technician I GIS Technician II Human Resources Technician I Human Resources Technician II Information Technology Analyst Intern Lead Customer Services Field Worker Lead Customer Services Technician Lead Engineering Inspector Lifeguard Management Analyst Management Assistant Network and Computer Systems Administrator Park Ranger Parks and Trails Area Manager Parks Maintenance Crew Leader Parks Maintenance Worker I Parks Maintenance Worker II Principal Engineer -Utilities Public Works Operations Manager Records Technician Recreation Area Manager Recreation Coordinator Recreation Leader I Recreation Leader II Revenue and Operations Manager Classification Seasonal Parks Maintenance Worker Senior Accountant Senior Accounting Technician Senior Administrative Assistant Senior Administrative Assistant -Confidential Senior Civil Engineer Senior Code Compliance Officer Senior Dock Attendant Senior Equipment Mechanic Senior Facilities Maintenance Technician Senior Fire Safety Inspector Senior Human Resources Analyst Senior Lifeguard Senior Management Analyst Senior Park Ranger Senior Parks Maintenance Crew Leader Senior Planner Senior Utility Systems Mechanic Senior Utility Systems Technician Special Projects Engineer Stage Technician Stormwater Maintenance & Construction Worker I Stormwater Maintenance & Construction Worker II Technical Theater Coordinator Utilities Administrator Utility Systems Mechanic Utility Systems Supervisor Utility Systems Technician Ware house Associate Wastewater Utilities Crew Leader Wastewater Utilities Supervisor Wastewater Utilities Worker I Wastewater Utilities Worker II Water Meter Reader Water Treatment Plant Manager Water Treatment Plant Operator I Water Treatment Plant Operator II Water Treatment Plant Operator III Water Utilities Crew Leader Water Utilities Distribution Supervisor Water Utilities Worker I Water Utilities Worker II Approved at the June 15, 2021 Poway City Council Meeting
June 15, 2021, Item #29EXHIBIT B City of Poway Management I Confidential Salary Schedule Effective ul 12, 2021 (The First Full Pa ) Classification Title Grade Approx. Monthly Step 3 Step4 Step 5 Sala Rane City Manager 999 20,604 Assistant City Manager 871 13,981 -16,994 80.6623 84.6955 88.9300 93.3767 98.0420 Director of Communitv Services 791 11.612-14.115 66.9951 70.3449 73.8622 77.5553 81.4331 Director of Develooment Services 831 12.665 -15.393 73.0694 76.7229 80.5591 84.5869 88.8056 Director of Finance 831 12.665 -15.393 73.0694 76.7229 80.5591 84.5869 88.8056 Director of Human Resources & Risk Management 771 11.060 -13.443 63.8049 66.9951 70.3450 73.8622 77.5553 Director of Public Works 831 12.665 -15.393 73.0694 76.7229 80.5591 84.5869 88.8056 7 . 4 7 7 1 4 Assistant Director of Public Works Utilities 731 9.937 -12.080 57.3277 60.1939 63.2037 66.3639 69.6909 Assistant Director of Public Works Ooerations 731 9.937 -12.080 57.3277 60.1939 63.2037 66.3639 69.6909 Assistant Director of Finance Ooerations 731 9.937 -12.080 57.3277 60.1939 63.2037 66.3639 69.6909 Citv Clerk 681 8.778 -10.670 50.6411 53.1732 55.8319 58.6235 61.5582 City Engineer 751 10,436 -12,687 60.2097 63.2202 66.3812 69.7002 73.1918 Citv Planner 731 9.937 -12.080 57.3277 60.1939 63.2037 66.3639 69.6909 Deoutv Fire Chief 751 1 0.436 -12.687 60.2097 63.2202 66.3812 69.7002 73.1918 Finance Manager 681 8,778 -10,670 50.6411 53.1732 55.8319 58.6235 61.5582 Fire Battalion Chief (not at-will/2912 hrs/vr) 542 8.778 -10.670 36.1722 37.9809 39.8799 41.8739 43.9701 Parks and Trails Area Manager 560 6.470 -7.865 37.3303 39.1968 41.1567 43.2145 45.3752 Principal Engineer -Utilities 731 9,937 -12,080 57.3277 60.1939 63.2037 66.3639 69.6909 Public Works Ooerations Manager 681 8.778 -10.670 50.6411 53.1732 55.8319 58.6235 61.5582 Recreation Area Manager 560 6,470 -7,865 37.3303 39.1968 41.1567 43.2145 45.3752 Recreation Area Manager (Y-rated) 681 8,778 -10,670 50.6411 53.1732 55.8319 58.6235 61.5582 Revenue and Operations Manager 681 8,778 -10,670 50.6411 53.1732 55.8319 58.6235 61.5582 Water Treatment Plant Mana er 681 8,778 -10,670 50.6411 53.1732 55.8319 58.6235 61.5582 Accountant 481 5.326 -6.475 30.7255 32.2616 33.8747 35.5684 37.3547 Associate Civil Engineer 602 7.261 -8.826 41.8893 43.9837 46.1827 48.4920 50.9165 Associate Planner 521 5.902-7.174 34.0517 35.7528 37.5413 39.4178 41.3896 Communitv Outreach Coordinator 571 6.678 -8.117 38.5265 40.4510 42.4745 44.5975 46.8285 Economic Develooment Administrator 631 7.744-9.413 44.6789 46.9109 49.2574 51.7195 54.3067 GIS Analvst 531 6.050 -7.354 34.9030 36.6466 38.4798 40.4032 42.4243 Information Technology Analyst 531 6,050 -7,354 34.9030 36.6466 38.4798 40.4032 42.4243 Management Analvst 531 6.050 -7.354 34.9030 36.6466 38.4798 40.4032 42.4243 Network & Comouter Svstems Administrator 631 7.744-9.413 44.6789 46.9109 49.2574 51.7195 54.3067 Senior Accountant 561 6.515-7.919 37.5868 39.4644 41.4385 43.5098 45.6863 Senior Civil Engineer 682 8,871 -10. 782 51.1773 53.7360 56.4230 59.2440 62.2062 Senior Code Comoliance Officer 501 5.618 -6.829 32.4109 34.0300 35.7324 37.5184 39.3952 Senior Fire Safetv lnsoector 541 6.201 -7.537 35.7756 37.5628 39.4418 41.4133 43.4849 Senior Human Resources Analvst 571 6.678 -8.117 38.5265 40.4510 42.4745 44.5975 46.8285 Senior Management Analvst 571 6.678 -8.117 38.5265 40.4510 42.4745 44.5975 46.8285 Senior Planner 581 6.845 -8.320 39.4897 41.4623 43.5364 45.7124 47.9992 Soecial Proiects Engineer 571 6.678-8.117 38.5265 40.4510 42.4745 44.5975 46.8285 Utilities Administrator 631 7,744-9.413 44.6789 46.9109 49.2574 51.7195 54.3067 4 .4 14 4 2. 2 Assistant Engineer 531 6.050 -7.354 34.9030 36.6466 38.4798 40.4032 42.4243 Assistant Planner 491 5.481 -6.662 31.6204 33.2000 34.8609 36.6033 38.4343 Code Comoliance Officer 461 5.090 -6.186 29.3627 30.8295 32.3718 33.9898 35.6900 Construction Maintenance Suoervisor 501 5.618 -6.829 32.4109 34.0300 35.7324 37.5184 39.3952 Facilities Maintenance and Soecial Districts Suoervisor 501 5.618 -6.829 32.4109 34.0300 35.7324 37.5184 39.3952 Fire Safetv lnsoector 461 5.090 -6.186 29.3627 30.8295 32.3718 33.9898 35.6900 Fleet Maintenance Suoervisor 521 5.902 -7.174 34.0517 35.7528 37.5413 39.4178 41.3896 Management Assistant 491 5,481 -6,662 31.6204 33.2000 34.8609 36.6033 38.4343 Senior Accounting Technician 460 5,054 -6, 144 29.1623 30.6206 33.7587 35.4464 Senior Parks Maintenance Crew Leader 441 4.844 -5.888 29.3440 32.3520 33.9702 Utilitv Svstems Suoervisor 650 8.081 -9.822 48.9514 53.9690 56.6674 4 .4 333 3,721 -4,523 21.4659 22.5393 23.6662 24.8498 26.0919 331 3.692 -4.488 21.3002 22.3643 23.4831 24.6570 25.8903 451 4.965 -6.035 28.6465 30.0776 31.5822 33.1608 34.8195 412 4.498 -5.468 25.9523 27.2488 28.6119 30.0420 31.5448 451 4.965 -6.035 28.6465 30.0776 31.5822 33.1608 34.8195 2 2 .1 1 2 7 27.7 7 2 Approved at the June 15, 2021 Poway City Council Meeting 25 of 30
June 15, 2021, Item #29RESOLUTION NO. 21-A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF POWAY, APPROVING THE PART-TIME TEMPORARY/SEASONAL WAGE SCHEDULE WHEREAS, a separate wage schedule is established for designated part-time, temporary/ seasonal classifications; WHEREAS, public agencies are required to publicly adopt and make available salary and wage schedules; WHEREAS, the minimum wage for the State of California increased to $14.00 per hour, effective January 1, 2021; WHEREAS, the wage schedule adopted by this resolution is compliant with the State of California minimum wage requirements; NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Poway as follows: Section 1: Section 2: The above recitals are true and correct. The wage schedule for employees designated as Part-Time Temporary/Seasonal, attached hereto as Exhibit A, is hereby adopted, effective July 1, 2021. PASSED, ADOPTED AND APPROVED at a Regular Meeting of the City Council of the City of Poway, California at a regular meeting this 15th day of June 2021 by the following vote, to wit: AYES: NOES: ABSENT: DISQUALIFIED: Steve Vaus, Mayor ATTEST: Vaida Pavolas, CMC, City Clerk 26 of 30 ATTACHMENT D
June 15, 2021, Item #29EXHIBIT A City of Poway Part-Time Temporary/Seasonal Wage Schedule Effective July 1, 2021 Classification Title (In alphabetical order) Grade Step 1 Step 2 Box Office Attendant 240 16.9394 17.7863 Dock Attendant 170 14.2504 14.9631 Front of House Assistant 240 16.9394 17.7863 Intern 240 16.9394 17.7863 Lifeguard 170 14.2504 14.9631 Recreation Leader I 170 14.2504 14.9631 Recreation Leader II 210 15.7299 16.5164 Seasonal Parks Maintenance Worker 190 14.9719 15.7206 Stage Technician 280 18.6979 19.6329 27 of 30 Step 3 18.6759 15.7113 18.6759 18.6759 15.7113 15.7113 17.3424 16.5067 20.6147 Step 4 Step 5 19.6093 20.5896 16.4967 17.3213 19.6093 20.5896 19.6093 20.5896 16.4967 17.3213 16.4967 17.3213 18.2092 19.1195 17.3318 18.1982 21.6450 22.7270 Approved at the June 15, 2021 Poway City Council Meeting
June 15, 2021, Item #29RESOLUTION NO. 21-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 2021-22 AND APPROPRIATING FUNDS WHEREAS, the City Council of the City of Poway has considered the proposed Fiscal Year (FY) 2021-22 Operating Budget and Capital Improvement Program and noticed the public hearings relative to its adoption for June 15, 2021; 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 2021-22 Proposed Operating Budget & Capital Improvement Program" (Budget), as amended if necessary, is hereby adopted as the FY 2021-22 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 15, 2021. SECTION 2: That the estimated revenues for FY 2021-22 as shown in the Budget are hereby adopted. SECTION 3: That the requested expenditures for FY 2021-22 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 2021-22 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. 28 of 30 ATTACHMENT E
June 15, 2021, Item #29Resolution No. 21-Page 2 SECTION 7: That the City Manager is authorized to continue all appropriations for encumbrances outstanding as of June 30, 2021 into FY 2021-22 as may be necessary. SECTION 8: That the City Manager is authorized to carry forward and appropriate unencumbered balances remaining at June 30, 2021 into FY 2021-22 as may be necessary. SECTION 9: That the City Manager is authorized to temporarily over-staff positions for succession planning purposes as may be necessary. SECTION 10: That the City Manager is authorized to increase the budget for under-filled positions to the approved position level as may be necessary. SECTION 11: 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 12: That the City Manager is authorized to increase the estimated budget for the City of Poway's share of the San Diego Metro Industrial Waste Control Program and Penasquitos Sewer System based on the City's actual share of costs. SECTION 13: That all appropriations in the Capital Improvement Program, Programs and grants in the operating budget remaining unspent at June 30, 2021 are hereby carried forward and appropriated to FY 2021-22. SECTION 14: 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 15th day of June, 2021 by the following vote, to wit: AYES: NOES: ABSENT: DISQUALIFIED: Steve Vaus, Mayor ATTEST: Vaida Pavolas, CMC, City Clerk 29 of 30
June 15, 2021, Item #29RESOLUTION NO. 21-A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF POWAY, CALIFORNIA, ADOPTING AN APPROPRIATIONS LIMIT FOR FISCAL YEAR ENDING JUNE 30, 2022 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 2021-22 is $59,045,405. PASSED, ADOPTED AND APPROVED at a Regular Meeting of the City Council of the City of Poway, California on the 15th day of June, 2021 by the following vote, to wit: AYES: NOES: ABSENT: DISQUALIFIED: Steve Vaus, Mayor ATTEST: Vaida Pavolas, CMC, City Clerk 30 of 30 ATTACHMENT F