Title
Adoption of Resolutions Approving and Adopting the City of Alameda Operating and Capital Budget for Fiscal Years 2023-24 and 2024-25 and Approving and Adopting the Successor Agency to the Community Improvement Commission Budget for Fiscal Years 2023-24 and 2024-25 [City Council and SACIC];
Adoption of Resolution Approving Workforce Changes and Amending the Management and Confidential Employees Association and Alameda City Employees Association Salary Schedule in Fiscal Years 2023-24 and 2024-25 Effective July 1, 2023 [City Council]; and
Adoption of Resolution Authorizing the City Manager to Execute All Necessary Documents with the Alameda County Transportation Commission to Accept $567,000 in Grant Funding to Design the Lincoln Avenue/Marshall Way/Pacific Avenue Corridor Improvement Project [City Council]. (Finance 10024054)
Body
To: Honorable Mayor and Members of the City Council
EXECUTIVE SUMMARY
Every two years, staff presents to City Council the citywide biennial budget for adoption. The budget outlines the City of Alameda’s (City) fiscal plan for the two upcoming years, Fiscal Year (FY) 2023-24 and 2024-25, as well as the level and type of services to be provided. Staff and City Council received a budget presentation (see File 2023-3014) at the May 2, 2023 City Council meeting and held a budget workshop on May 4, 2023, during which staff presented the City Manager Proposed Budget and the proposed Capital Improvement Program (CIP) Budget and solicited input and direction from City Council, staff, and community members on the upcoming two-year budget. The budget presented to City Council for adoption incorporates direction provided during the May budget workshop.
The Proposed Biennial Operating Budget for FYs 2023-25 (Proposed Budget), inclusive of City Council direction, totals $375,298,083 in FY 2023-24 and $312,464,148 in FY 2024-25, including all City funds and transfers (except Alameda Municipal Power). The General Fund budget is $152,596,823 in FY 2023-24 and $140,330,794 in FY 2024-25. The Proposed Budget includes the use of $23.8 million of residual fund balance from the General Fund in FY 2023-24 and $6.0 million in FY 2024-25 to fund one-time investment in operational and capital one-time requests discussed at the May 2 City Council meeting and May 4 budget workshop. The Proposed Budget maintains the City’s required reserves above 25% of the City’s General Fund operating expenditure budget.
Additionally, the Proposed Budget includes key investments in City Council identified priority areas including:
○ House all Alamedans/Expand Housing and Human Services: shifting resources currently housed in the Community Development Department (now the Base Reuse and Economic Development Department) to the City Manager’s Office for improved program management and addition of 1 full-time-equivalent (FTE) Management Analyst to improve service delivery capacity.
○ Build Resilience to Climate Change and Water Level Rise: allocating $200,000 to update the Climate Action & Resiliency Plan (CARP) and groundwater analysis plus significant capital projects funded by grants; and transferring the Climate Action & Resiliency division from the City Manager’s Office to the Planning, Building & Transportation Department to consolidate grant funding sources and facilitate project delivery.
○ Enhance Community Safety and Services: expending $4.6 million for public safety vehicle replacement and outdated communications and rescue equipment replacement.
○ Invest in Transportation and Infrastructure: appropriating a $1.25 million investment to implement the Americans with Disabilities Act (ADA) project plan, $1 million in Civic Center Garage safety improvements, and City building safety improvements in the amounts of $2.5 million in FY 2023-24 and $2.7 million in FY 2024-25.
○ Practice Fiscally Responsible and Inclusive Governance: creating a Municipal Fiscal Resilience Plan to help weather financial challenges and remain fiscally stable over the long term; expanding business economic development activities, including at Alameda Point; and beginning implementation of the Diversity, Equity, Inclusion and Belonging plan once approved by City Council.
BACKGROUND
At the May 2, 2023 City Council meeting, staff presented an overview of the Proposed Budget. On May 4, 2023, City Council held a budget workshop on the Proposed Budget, including the Capital Improvement Program (CIP) budget for FYs 2023-24 and 2024-25. These workshops were intended to provide both City Council and the community an opportunity to review and comment on the factors that make up the overall City budget. During these workshops the City Manager, Department Heads, and staff provided information and answered questions about departmental operations and FYs 2023-25 funding requests. City Council and the community provided input to staff regarding allocation of funding beyond the baseline budget.
The direction from City Council on additional funding changes have been incorporated into the Proposed Budget. The City Manager’s draft budget transmittal letter is attached to this report as Exhibit 1.
Final versions of the operating budget and CIP budget documents will be available in electronic format and posted to the City’s website. The documents are expected to be completed in August 2023.
DISCUSSION
Based on the discussions held during the May budget workshops, the Proposed Budget intends to meet the City’s mission and City Council’s stated goals for the upcoming two fiscal years. A summary of the Proposed Budget for the City for FYs 2023-24 and 2024-25 is attached in Exhibit 2, and a summary of the proposed CIP budget for FYs 2023-24 and 2024-25 is attached in Exhibit 3.
General Fund Revenues
The General Fund is the City’s main operating fund and typically accounts for approximately 40% of total City revenues.
General Fund revenues in the Proposed Budget, including transfers in, are estimated to decrease by $3.3 million, from $132.1 million in FY 2022-23 to $128.8 million in FY 2023-24, and increase by $5.5 million in FY 2024-25, to $134.3 million (see Exhibit 2). The decrease in the first year of the biennial budget is due to the one-time receipt of $7.5 million in American Rescue Plan Act of 2021 (ARPA) revenue replacement funds in FY 2022-23. The City’s largest source of General Fund revenue, Property Tax, remained stable and grew steadily through the COVID-19 pandemic, with modest growth expected over FY 2023-24 and 2024-25 despite an anticipated continued decrease in real estate activity. Transient Occupancy Tax is expected to increase due to both the recovery of travel activity to pre-pandemic levels and the voter-approved increase in the tax rate.
Expectations for General Fund revenues over the next two years are summarized below:
• Property Tax is the largest single source of revenue for the General Fund and represents approximately 44% of General Fund revenues. FY 2023-24 property tax is expected to increase an estimated 3.5% from the FY 2022-23 projection of $54.8 million to $56.7 million, and by 4.2% to $59.1 million in FY 2024-25.
• Sales Tax/Transaction and Use Tax revenue is dependent on consumer spending and on the economy overall, as these taxes apply to retail sales or the use of “tangible personal property.” The two main revenue streams in this aggregated category are the 1% Bradley Burns sales tax and the 0.5% Measure F (2018) transaction and use tax. The City’s sales, transactions and use taxes are approximately 17% of the City’s General Fund revenues. After briefly being impacted by the pandemic in FY 2019-20, this aggregate revenue stream has seen steady year-over-year growth through FY 2021-22. However, the possibility of a recession is impacting this revenue source with receipts in FY 2022-23 forecasted to dip slightly, to $21.4 million from $22.8 million in FY 2021-22, before recovering to projected $22.5 million in FY 2023-24 and $23.0 million in FY 2024-25.
• Property Transfer Tax, which is triggered by the transfer of property ownership, is conservatively estimated at $13 million for each year of the Proposed Budget. Although actual transfer tax receipts have been as high as $ 21.9 million in FY 2021-22, the fluctuation in revenues was due to the sale of large commercial properties that cannot be predicted. Additionally, with the increase in mortgage interest rates, the City has seen the transfer of real property slow considerably and prices decrease in FY 2022-23. The proposed budget assumes that the real property markets will continue to remain slow during both budget years.
• The City imposes a Utility Users Tax (UUT) of 7.5% on all residential and commercial utility bills for properties within the City. The UUT is generated from the use of cable television, telephone services, natural gas and electricity. UUT is expected to decrease by 4% from the FY 2022-23 projection of $9.6 million to $9.2 million in FY 2023-24 and FY 2024-25. The decrease is due to expected stabilization in natural gas prices, which hit record high prices in late 2022, and the trend in declining cable subscriptions. UUT from cable subscriptions surged to $1.5 million in FY 2020-21 due to the rapid shift to remote work and remote schooling during the pandemic, and this revenue source has been decreasing each year since that peak and is expected to generate $1.0 million in FY 2023-24 and FY 2024-25.
• Franchise Fees are projected to increase by 3% from $3.1 million in FY 2022-23 to $3.2 million in both years of the Proposed Budget to reflect trends in the Cable TV and Natural Gas franchises.
• Business License Tax is projected to increase by 2% from $2.7 million in FY 2022-23 to $2.8 million in both years of the biennial budget. As part of the Proposed Budget, the Finance Department is recommending implementation of a new business license collection system to increase the rate of collections.
• Transient Occupancy Tax (TOT) is imposed on occupants for the privilege of occupying room(s) in a hotel, motel, short-term residential rental, etc. TOT decreased briefly during the pandemic. In November 2022, the Alameda electorate approved an increase to the TOT rate from 10% to 14% that went into effect in January 2023. Thus, TOT is forecasted to be $3.3 million in both years of the Proposed Budget, a $500,000 increase from the FY 2022-23 projection of $2.8 million.
• Departmental Fees and Charges for Services are expected to increase 15%, to $8.3 million, in FY 2023-24 due to increased collection of ambulance fees and increased recreation program activity. In the second year, departmental fee revenue is expected to further increase by 2% due to inflation adjustments.
Citywide Expenditures and General Fund Expenditures
The City’s operating budget is comprised of a variety of funding sources. The General Fund is the largest single fund and represents the resources over which City Council has the most discretion. Prior to consideration of any program or service improvements, the Proposed Budget absorbed ongoing expenditure increases of approximately $7.4 million in FY 2023-24, and $9.4 million in FY 2024-25, mostly in the General Fund, compared to the FY 2022-23 budget. Specifically:
● Increased general liability insurance costs of $2 million in both years;
● Increased CalPERS retirement contributions of $2 million in Year 2;
● Absorbed CARE Team, $2.4 million in Year 1 and $2.5 million in Year 2, partially offset by $1.8 million in one-time grant funding;
● Economic Development moved from the Fleet Industrial Service Center Fund into the General Fund, estimated at $1 million in both years, partially offset by one-time revenues of $675,000;
● Aquatic Center financing debt service of an estimated $900,000 in both years;
● Alameda Police Department hiring initiative reducing vacancy savings in both years; and
● Ongoing funding of the Safe Parking, Day Center, and Overnight Shelter programs at $1.1 million in both years, partially offset by approximately $250,000 in annual grant funds.
The City’s total Proposed Budget for expenditures for all funds including transfers out is $375.3 million in FY 2023-24 and $312.5 million in FY 2024-25, both exclusive of Alameda Municipal Power (AMP). The General Fund represents approximately $152.6 million, or 41%, of the total in FY 2023-24 Proposed Budget and $140.3 million, or 45%, of the FY 2024-25 Proposed Budget, as shown in Table 1 below. General Fund expenditures by department are shown in Exhibit 2.
Table 1
|
|
FY 2021-22 Actual |
FY 2022-23 Revised Budget |
FY 2023-24 Proposed |
Change |
FY 2024-25 Proposed |
Change |
|
General Fund |
$113,361,444 |
$133,955,160 |
$152,596,823* |
13.9% |
$140,330,794 |
(8.0)% |
|
All Other Funds |
$164,558,086 |
$243,839,421 |
$222,701,261 |
(8.7)% |
$172,133,353 |
(22.7)% |
|
Total |
$277,919,530 |
$377,794,581 |
$375,298,084* |
(0.7)% |
$312,464,146 |
(16.7)% |
* Includes a one-time appropriation of $15 million from General Fund residual fund balance for construction of the Aquatic Center.
Operating Budget Changes Since the May Budget Workshops
Based on direction provided by City Council, the Proposed Budget incorporates the following changes (Table 2). City Council also directed staff to expand operating hours at the libraries and staff are preparing cost estimates and community input for City Council to consider at a later date. Additional changes are incorporated in the capital budget, noted further below.
Table 2
|
Department |
Description |
Funding Source |
FY 2023-24 Budget |
FY 2024-25 Budget |
|
Base Reuse & Economic Development |
Increase funding to the West Alameda Business Association (WABA) and the Downtown Alameda Business Association (DABA) for outdoor community spaces |
General Fund |
$40,000 |
$40,000 |
|
Base Reuse & Economic Development |
Wayfinding signage |
Alameda Point |
|
$50,000 |
|
Rec & Park |
Reduce reimbursement to Alameda Swimming Pool Association |
General Fund |
$(15,000) |
$(15,000) |
|
Rec & Park |
Increase funding for Financial Assistance Program |
General Fund |
$15,000 |
$15,000 |
|
Rec & Park |
Maintenance of additional grass area at Bohol Circle Immigrant Park |
Alameda Landing |
$4,800 |
$4,800 |
|
|
Total Operating Budget Additions per Council Direction |
$44,800 |
$94,800 |
The Proposed Budget incorporates the following technical corrections to the budget presented at the May budget workshops (Table 3).
Table 3
|
Department |
Description |
Funding Source |
FY 2023-24 Budget |
FY 2024-25 Budget |
|
Fire |
Add Alameda Health Care District Funding for CARE Team |
General Fund |
$(250,000) |
|
|
Fire |
Correct contributions needed from unexpended FY 2022-23 General Fund budget for Fire engine replacements |
General Fund |
$(577,500) |
$(577,500) |
|
Public Works |
Correct general benefit contributions to the Landscape and Lighting Districts according to the Engineer’s Report |
General Fund |
$51,909 |
$27,660 |
|
|
|
General Fund Subtotal |
$(775,591) |
$(549,840) |
|
Planning, Building & Transportation |
Correct staffing allocations for the re-allocated Senior Transportation Coordinator and new Transportation Manager |
Measure BB |
$25,000 (net) |
$25,000 (net) |
|
Public Works |
Correct California Beverage Container Grant budget per award letter |
Integrated Waste |
$(1,344) |
|
|
Library |
Shift funding source for Library lending laptops and mobile wi-fi hotspots from operating fund to capital fund |
Library |
$(150,000) |
|
|
|
|
Capital Projects |
$150,000 |
|
|
Public Works |
Correct general benefit contribution to the Landscape and Lighting Districts according to the Engineer’s Report |
Measure BB |
$25,550 |
$25,550 |
|
Public Works |
Urban Forest operating budget corrections |
Construction Improvement Tax |
$50,000 |
$50,000 |
|
|
|
Non-General Fund Subtotal |
$99,206 |
$100,550 |
|
|
Total Operating Budget Technical Corrections |
$(676,385) |
$(449,290) |
Capital Budget Allocations from the General Fund
The City Manager reviews the proposed capital project allocations, including projects that require allocations from the General Fund. The projects listed below include regularly occurring or “ongoing” projects that typically are in the capital budget. Also included are proposed one-time investments that emphasize improving safety, security, and accessibility at public facilities. Projects listed below are recommended for General Fund allocations from existing residual General Fund balance over the two-year period. The proposed General Fund allocations to capital projects total approximately $21.8 million for FY 2023-24 and $4.6 million for FY 2024-25 (Table 4).
Table 4
|
Department |
Project |
FY 2023-24 |
FY 2024-25 |
Ongoing |
|
Public Works |
Street, Park and Parking Lot Lighting |
$600,000 |
$300,000 |
Y |
|
Recreation & Parks |
Park Pathway Repair & Replacement |
$300,000 |
$300,000 |
Y |
|
Recreation & Parks |
Park Maintenance |
$335,000 |
$325,000 |
Y |
|
Recreation & Parks |
Playground Replacement |
$285,000 |
$325,000 |
Y |
|
Public Works |
ADA Transition Plan Implementation |
$625,000 |
$625,000 |
Y |
|
Public Works |
AMP Undergrounding (streetlights cost sharing) |
$691,000 |
|
Y |
|
Public Works |
City Buildings - Additional Projects |
$306,250 |
|
N |
|
Public Works |
City Hall Workspace Assessment and Improvements |
$100,000 |
|
N |
|
Public Works |
Civic Center Garage Improvements |
$1,000,000 |
|
N |
|
Public Works |
City Building Security and Card Reader Access |
$2,465,000 |
$2,742,750 |
N |
|
Recreation & Parks |
De-Pave Park grant match |
$50,000 |
|
N |
|
Recreation & Parks |
City Aquatic Center |
$15,000,000 |
|
N |
|
|
Total |
$21,757,250 |
$4,617,750 |
|
Capital Budget Allocations from Other Fund Sources
The full list of the projects proposed in the current budget are included in the Capital Improvement Program Budget Summary (Exhibit 3). Highlights include the following:
• Pavement Management: Resurface and repair local streets and roads; incorporate new signage and traffic striping to improve safety for all users.
• Sidewalks: Remove trip hazards and replace sidewalks damaged by City-owned trees.
• Traffic Signals and Systems: Replace obsolete equipment and improve safety and multimodal operations at key intersections and corridors.
• Sanitary Sewer Rehabilitation: Replace sewer lines, lower laterals, and pump stations according to the City’s Sewer Master Plan.
• Stormwater Management: Provide improved performance at City-owned pump stations; replace critical storm water infrastructure; prevent trash and pollutants from entering the Bay.
• Buildings and Facilities: Maintain and improve City-owned buildings, including at Alameda Point.
• Parks: In addition to park and pathway maintenance across various parks and playground replacement at McKinley Park (due to storm damage), the under-5 structure at Tillman Park and partial funding for the Krusi Park playground, projects include constructing Phase 2 of Estuary Park, design and construction of the City Aquatic Center, Master Plan and design of De-Pave Park and improvements for Marina Village Park.
• Transportation: Construct the Clement Avenue, Central Avenue, and Clement/Tilden Safety Improvement major corridor projects; design and install infrastructure for active transportation, street safety, safe routes to school, and transit stop enhancements.
• Sea Level Rise Adaptation: Projects that prevent flooding and address sea level rise, such as design of seawall and other improvements at Veteran’s Court and coordination and design of improvements behind the Webster/Posey Tubes.
It should be noted that Urban Forest has been moved from the capital budget to a separate operating budget (Fund 269) with the same level of funding as the previous capital budget. Once the Urban Forest Plan is updated, staff will bring recommendations to City Council for consideration.
Capital Budget Changes Since the May Budget Workshops
Based on direction provided by City Council at the May budget workshops, the proposed capital budget incorporates the following changes (Table 5). Maps of the City’s proposed capital investments are available to explore at:
<https://storymaps.arcgis.com/stories/5ef56aaca7034f188107642a8b50864c>
Table 5
|
Project |
Description |
Funding Source |
FY 2023-24 |
FY 2024-25 |
|
City Buildings - Veterans’ Building HVAC Improvements |
Add funding to expedite planned facility improvements at the Veterans’ Building |
General Fund |
$101,250 |
|
|
Parks Maintenance - Bohol Circle Immigrant Park New Grass Space |
Add funding for conversion of hardscape to lawn |
General Fund |
$50,000 |
|
|
Pavement Management - Pothole Repairs |
Increase funding for expediting pothole repairs |
RMRA |
$300,000 |
|
|
Total Capital Budget Additions per Council Direction |
$451,250 |
|
The proposed capital budget also incorporates the following technical corrections and grant award funding updates (Table 6). Staff recommends adopting a resolution authorizing the City Manager to execute all necessary documents with the Alameda County Transportation Commission to accept $567,000 in grant funding to design the Lincoln Avenue/Marshall Way/Pacific Avenue Corridor Improvement Project. On April 18, 2023, City Council endorsed the design concept for the Lincoln Avenue/Marshall Way/Pacific Avenue Corridor Improvement Project (see File 2023-2920), and the proposed grant funding was awarded after the May budget workshops.
Table 6
|
Project |
Description |
Funding Source |
FY 2023-24 |
FY 2024-25 |
|
Clement/Tilden Complete Streets Project |
Correct funding allocations to match available grant funding |
Measure BB, DIF Transportation |
$2,126,000 re-allocated from ACTC grant |
|
|
|
|
|
(net neutral) |
|
|
City Buildings - Additional Projects |
Correct double-budgeting for Fire Training facility improvements from General Fund and Tidelands |
Tidelands |
$100,000; savings of $100,000 for General Fund |
|
|
|
|
|
(net neutral) |
|
|
Lincoln/Marshall/Pacific Safety Improvements |
Increase budget to incorporate May 2023 grant award from Alameda County Transportation Commission (ACTC) |
ACTC Grant |
$567,000 |
|
|
Total Capital Budget Technical Corrections |
$567,000 |
|
Workforce Changes
The City Manager recommends increasing the authorized position count (excluding AMP) from the 492.2 FTE positions approved in the FY 2022-23 Mid-Year Budget Update to a total of 505.0 FTEs in FY 2023-24, and 506.0 FTEs in FY 2024-25 (Table 7). Funding for the authorized and proposed positions is incorporated in the Proposed Budget.
Table 7
|
Department |
FY 2022-23 Authorized |
FY 2023-24 Proposed |
Change |
FY 2024-25 Proposed |
Change |
|
City Attorney |
21.0 |
21.0 |
- |
21.0 |
- |
|
City Clerk |
3.0 |
4.0 |
+1.0 |
4.0 |
- |
|
City Manager* |
6.0 |
10.0 |
+4.0 |
10.0 |
- |
|
Base Reuse and Economic Development |
13.0 |
11.0 |
(3.0) |
11.0 |
- |
|
Finance |
16.2 |
16.0 |
(0.2) |
16.0 |
- |
|
Fire |
124.0 |
126.0 |
+2.0 |
126.0 |
- |
|
Human Resources |
9.0 |
10.0 |
+1.0 |
10.0 |
- |
|
Information Technology |
8.0 |
8.0 |
- |
9.0 |
+1.0 |
|
Library |
21.0 |
22.0 |
+1.0 |
22.0 |
- |
|
Planning, Building & Transportation |
32.0 |
34.0 |
+2.0 |
34.0 |
- |
|
Police |
124.0 |
124.0 |
- |
124.0 |
- |
|
Public Works |
83.0 |
86.0 |
+3.0 |
86.0 |
- |
|
Recreation & Parks |
32.0 |
33.0 |
+1.0 |
33.0 |
- |
|
Total |
492.2 |
505.0 |
+12.8 |
506.0 |
+1.0 |
* To better deliver certain programmatic services, the City Manager proposes to reorganize four existing authorized positions from the Community Development Department (being renamed as the Base Reuse and Economic Development Department) to the City Manager’s Office and re-organize one existing authorized position from the City Manager’s Office to the Planning, Building & Transportation Department. See “Organizational Changes” section below.
Departments requested a total of 13 new authorized positions and an upgrade of 8 existing positions, detailed in Exhibit 4. The City Manager recommends adding 12 new authorized positions in FY 2023-24 and the remaining one new authorized position in FY 2024-25, pending available resources. Seven of the eight requested position upgrades are recommended, with one upgrade in the Police Department pending the results of a classification study. If the position is recommended for upgrade, staff will return to City Council for approval of an additional workforce change resolution.
It is also recommended to amend the Management and Confidential Association (MCEA) Salary Schedule to add the Code Enforcement Supervisor, Permit Center Supervisor, Permit Center Manager, Transportation Manager, and the Housing and Human Services Manager (renaming the existing Community Development Manager) classifications. These new positions are included in the number of new positions listed above. The Code Enforcement Supervisor, Permit Center Supervisor, and Permit Center Manager will support the Planning, Building & Transportation Department and create better response and efficiency. The Housing and Human Services Manager will head the new Housing and Human Services division of the City Manager’s Office. The salary ranges are listed below in Table 8.
Table 8
|
|
Annual Salary |
|
Weekly Hours |
Classification (FLSA Exempt) |
Step 1 |
Step 2 |
Step 3 |
Step 4 |
Step 5 |
|
36 |
Code Enforcement Supervisor |
$112,820 |
$118,462 |
$124,385 |
$130,605 |
$137,134 |
|
36 |
Permit Center Supervisor |
$112,820 |
$118,462 |
$124,385 |
$130,605 |
$137,134 |
|
36 |
Permit Center Manager |
$135,369 |
$142,140 |
$149,245 |
$156,706 |
$164,543 |
|
36 |
Transportation Manager |
$135,369 |
$142,140 |
$149,245 |
$156,706 |
$164,543 |
|
36 |
Housing and Human Services Manger |
$149,686 |
$157,169 |
$165,030 |
$173,280 |
$181,943 |
It is also recommended to amend the Alameda City Employees Association (ACEA) Salary Schedule to add the Fleet Services Coordinator classification. This position is included in the number of positions listed above. The Fleet Services Coordinator will support the City’s Fleet Services ensuring efficient and effective service to City vehicles. The salary range is listed below in Table 9.
Table 9
|
|
Hourly Rate |
|
Weekly Hours |
Classification FLSA Non-Exempt |
Step 1 |
Step 2 |
Step 3 |
Step 4 |
Step 5 |
Step 6 |
Step 7 |
Step 8 |
|
40 |
Fleet Services Coordinator |
$28.17 |
$29.58 |
$31.06 |
$32.61 |
$34.24 |
$35.95 |
$37.75 |
$39.64 |
Organizational Changes
As part of the Proposed Budget, the City Manager recommends creating the Division of Housing and Human Services within the City Manager’s Office. The Housing function will support development of new affordable housing in coordination with Planning and further the preservation, rehabilitation, or construction of affordable housing. The Human Services function will support programs for low-income and unhoused residents with housing and safety net services based on goals set in the City’s Five-Year Strategic Plan to Prevent and Respond to Homelessness in Alameda including:
• Secure a housing future for all Alamedans,
• Increase access to homeless emergency response services, and
• Mobilize the citywide response to homelessness.
The above programs were previously housed in the Community Development Department. The City Manager recommends renaming the Community Development Department to the Base Reuse and Economic Development Department, as it will continue to focus on Alameda Point development and Citywide economic development.
The City Manager also recommends transferring the Climate Action & Resiliency division from the City Manager’s Office to the Planning, Building & Transportation Department to increase coordination on climate action and resiliency planning, land use planning, building regulation and transportation planning.
Potential Impacts of the Taxpayer Protection and Government Accountability Act on the FY 2023-25 Biennial Budget
A statewide ballot initiative sponsored by the California Business Roundtable recently qualified for the November 2024 ballot, and was presented to City Council on April 4, 2023 (see File 2023-2905). City Council adopted a resolution opposing the initiative, which would severely limit the ability of voters and local governments to raise revenues for government services. At the budget workshop on May 4, City Council directed staff to provide an analysis of the impact of the proposed ballot initiative on City programs, if the proposed ballot initiative were to pass.
Specific changes to taxes and fees under the initiative would include the following:
• Taxes and fees adopted after January 1, 2022, that do not comply with the new rules are void unless reenacted, with the new language including a sunset date.
• All new or increased taxes adopted after January 1, 2022 must include a sunset date.
• Invalidates the Upland decision that allows a majority of local voters to pass special taxes (instead of two-thirds).
• Expressly prohibits local advisory measures which allow local voters to express a preference for how to spend local general tax dollars.
• Requires voter approval to expand existing taxes (e.g., UUT or TOT) to a newly annexed territory (e.g., annexations) or expand the tax base (e.g., new utility service).
• No tax can be imposed by city charter amendment.
If the initiative were to pass, the following City programs and ongoing funding sources could potentially be impacted in the second half of FY 2024-25, or the second year of the biennial budget.
Table 10
|
Program |
Funding Source |
FY 2024-25 Annual Budget |
|
Public Works - Storm Maintenance |
Water Quality/Flood Fees |
$3,128,000 |
|
Public Works - Parking |
Parking Fees |
$1,138,000 |
|
Public Works - Sewer Maintenance |
Sewer Service Fees |
$500,000 |
|
Public Works - Waste Management |
Franchise Fees |
$475,000 |
|
Fire Emergency Services |
Ambulance Billing Fees |
$4,250,000 |
|
Fire Prevention |
Inspection Fees |
$444,000 |
|
Planning |
Community Planning Fees, Plan Check Fees |
$2,225,000 |
|
Building Services |
Building Inspection Fees, Plan Check Fees, Permit Filing Fees, Technology Fees |
$1,507,000 |
|
Recreation Programs |
Recreation Program Fees |
$3,437,500 |
|
City Manager - Housing |
Affordable Housing Fees |
$1,382,500 |
|
Police - Patrol/Traffic |
Admin Tow Fees, Traffic School Fees |
$25,000 |
|
City Attorney - Rent Stabilization |
Rent Review Fees |
$2,004,000 |
|
City Attorney - General Liability |
Permit Review Fees |
$500,000 |
|
Economic Development - Public Art |
Public Art Fees |
$250,000 |
|
City Clerk |
Passport and Wedding Processing Fees |
$116,500 |
|
General Fund Operating Revenues |
Transient Occupancy Tax |
$900,000 |
|
|
Total |
$22,282,500 |
Due to the possibility of future legal challenges should the proposed ballot initiative pass, it is difficult to project the extent to which these fee-funded programs would be impacted by the initiative. However, the ongoing funding for these programs, which covers full-time and part-time staffing in the Public Works; Planning, Building & Transportation; Fire; Recreation & Parks; City Manager; City Attorney; City Clerk; and Police departments could be challenged, and the burden for defending the fees and taxes against legal challenge would fall on the City, which could result in significant legal costs.
ALTERNATIVES
• Alternative 1 - Approve and adopt the budget and workforce changes as proposed in the staff report.
• Alternative 2 - Approve and adopt the proposed budget and workforce changes with any amendments made during tonight’s City Council meeting.
FINANCIAL IMPACT
Staff recommends adoption of the City’s FYs 2023-24 and 2024-25 biennial budget totaling $375,298,083 and $312,464,148, respectively, including all City funds and transfers (except for AMP). With the proposed budget, it is projected that the City will maintain an available fund balance (above the 25% operating and economic uncertainty reserves) in its General Fund of approximately $27.7 million at the end of the FY 2023-24 and $21.7 million at the end of FY 2024-25.
Included in the City’s FYs 2023-24 and 2024-25 biennial budget is the Successor Agency FYs 2023-24 and 2024-25 biennial budget totaling $9,812,420 and $10,351,930, respectively. The Successor Agency will fund its expenditures with Redevelopment Property Tax Trust Fund (RPTTF) revenues received in June and January of each year. Any other revenues received by the Successor Agency will be used to pay debt service and enforceable obligations.
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
This action is in conformance with the Alameda Municipal Code and all policy documents.
ENVIRONMENTAL REVIEW
This action does not constitute a “project” as defined in California Environmental Quality Act (CEQA) Guidelines Section 15378 and therefore no further CEQA analysis is required.
CLIMATE IMPACT
There are no climate impacts associated with this action. However, the Capital Improvement Program Budget includes appropriations for implementation of the Climate Action and Resiliency Plan.
RECOMMENDATION
Adopt Resolutions approving and adopting the City of Alameda Operating and Capital Budget for Fiscal Years 2023-24 and 2024-25; and approving and adopting the Successor Agency to the Community Improvement Commission Budget for Fiscal Years 2023-24 and 2024-25;
Adopt a Resolution approving workforce changes and amending the MCEA and ACEA Salary Schedules in FYs 2023-24 and 2024-25 Effective July 1, 2023; and
Adopt a Resolution authorizing the City Manager to execute all necessary documents with the Alameda County Transportation Commission to Accept $567,000 in grant funding to design the Lincoln Avenue/Marshall Way/Pacific Avenue Corridor Improvement Project.
Respectfully submitted,
Margaret L. O’Brien, Finance Director
Erin Smith, Public Works Director
By,
Jennifer Tell, Budget Manager
Robert Vance, Deputy Public Works Director
Exhibits:
1. Draft Budget Transmittal Letter
2. Proposed Budget Summary
3. Capital Improvement Program Budget Summary
4. Recommended Workforce Changes