Folsom City Council Special Workshop on Closing Future Funding Gap and Strategic Planning – March 8, 2022
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Folsom City Council Special Workshop on Closing Future Funding Gap and Strategic Planning – March 8, 2022
The Folsom City Council convened a special workshop on March 8, 2022, to continue discussions on developing a strategy to close the city's projected future funding gap and to initiate strategic planning for the next five years. The meeting included financial updates, compensation reviews, public safety overtime analysis, and two strategic planning exercises (goal-setting and SWOT analysis). No public comments were made. Council gave staff direction to proceed with community engagement and to return with a set of visionary statements for the strategic plan.
Consent Calendar
- None. The meeting was a workshop with no consent items.
Public Comments & Testimony
- No members of the public addressed the council.
Discussion Items
Financial Overview and Funding Gap
- Stacey Tamani, CFO, provided a recap of the city's fiscal picture. Key points:
- The city faces a projected future funding gap because revenues (especially sales tax) are growing slower than expenses.
- Current obligations are met, but there are millions in unfunded/underfunded deferred needs. For the upcoming FY 22-23 budget, departments submitted $25 million in additional requests, including 53 new positions, but typically less than 20% of top requests can be funded.
- Property tax and sales tax together account for 61% of general fund revenue. Sales tax growth is flattening due to shifts in consumer behavior (e-commerce, services, digital goods), and property tax growth is modest and accounted for in projections.
- Over the next five years, the gap between projected revenues and the cost of current service levels is expected to grow, potentially requiring service reductions by 2027.
- Of the projected $39 million in one-time needs and $20 million in annual needs (within 5 years), $233 million in needs beyond 5 years; 102 new positions are requested. Blue-highlighted items relate to the Folsom Plan Area south of Highway 50.
- Tom Adams, sales tax consultant (via phone), explained that nationwide trends (shift to services/digital, e-commerce, and reduced buying power) are affecting sales tax. Folsom's sales tax mix leans toward retail and transportation, and online sales allocation changes (e.g., Amazon via county pool) have reduced local receipts.
- Council members asked about strategies to increase sales tax, including land use rezoning, focusing on existing strengths, and targeting businesses with higher sales tax generation. Staff agreed to provide data by business category to inform recruitment.
Employee Compensation
- Alison Garcia, HR Manager, reviewed how compensation packages are established via regional surveys, targeting middle to high-middle range. Benefits include education incentives, tuition reimbursement, uniform allowances, deferred compensation, and car allowances for executive management. Employee retirement contributions are fully paid by employees; retiree health benefits and longevity pay have been eliminated for new hires.
- Council requested a detailed breakdown of vehicle, tech, and cell allowances with annual cost totals, to be provided later.
Fire Department Overtime and Response Times
- Chief Ken Cassano explained that overtime often exceeds budget due to:
- COVID-related absences (contact tracing, family leave). At one point, over half of personnel were off.
- MOU provision allowing 15% of shift to be off (3 positions per day), requiring mandatory overtime to fill.
- Mutual aid (OES) deployments, which are partially reimbursed but still net cost to city.
- In FY 2021, overtime hours reached 30,994 at a cost of $3.49 million; $1.1 million was OES-related. Reimbursements are less than full cost.
- Average personnel off daily was 4.88 in FY 2021. To maintain staffing, a medic unit was temporarily closed twice.
- Three limited-term firefighter positions were added to provide relief; neighboring agencies often overstaff to cover leave.
- Response times: average turnout+travel for emergency calls is consistent, but total incidents are rising. From October 2019 onward (new software), data shows increasing call volume.
- Council discussed the changing culture (younger firefighters seeking work-life balance) and the challenge of recruitment/retention (resignations to Roseville, Oakland, Contra Costa).
Police Department Overtime and Response Times
- Chief Rick Hillman reported that the department has 79 sworn positions, with 62% in patrol. Current vacancy rate ~13% (10 positions). Overtime budget is $510,000 for FY 21-22; as of the meeting, $810,000 had been spent, but $474,000 is reimbursable through grants and mutual aid (Dixie and Caldor fires).
- Average response time for all calls is ~12 minutes; for emergency calls, ~7 minutes. Response times have increased over recent years.
- Staffing: optimal patrol is 5 officers per shift, but often only 4 are available, leaving the South of 50 area uncovered. Officer per thousand residents ratio is ~0.9, compared to regional average of 1.4.
- The department is hiring laterals to fill vacancies and hopes to implement an online reporting system to reduce non-emergency calls.
Strategic Planning Exercises
- City Manager Elaine Andersen led two exercises:
- Five-Year Goals: Each council member provided up to five desired accomplishments by 2027. Common themes included financial stability (15%+ reserves), public safety staffing, river district master plan, Folsom Boulevard revitalization, economic development (especially tech/healthcare), public-private partnerships, a new events center, and enhanced bicycle/pedestrian infrastructure. Council Member Kozlowski's submissions were read in absentia.
- SWOT Analysis: Council identified strengths (safe community, skilled staff, engaged residents, lakes/history), weaknesses (affordable housing lack, risk of complacency, understaffing, aging facilities), opportunities (river district, vacant land, technology, state parks partnerships), and threats (budget deficit trajectory, unfunded mandates, recruitment/retention, climate change). Staff also shared their SWOT input.
Key Outcomes
- Council gave consensus direction to staff to:
- Incorporate community feedback (via polling/engagement) into the strategic planning process.
- From council and community input, distill a set of visionary statements to become a policy agenda.
- Develop specific, measurable, attainable, relevant, time-bound (SMART) goals and objectives, subject to available resources.
- Council also agreed to discuss potential sales tax measure for the 2022 ballot in a future meeting (within 30 days). City Attorney clarified the deadline for council adoption of a revenue measure is August 9, 2022, with submission to the county elections office by July 18–August 1. Some council members suggested aligning with a presidential election year (2024) for higher success, but no decision was made.
- Staff will provide a detailed breakdown of vehicle/tech/cell allowance costs by the next meeting.
- The meeting adjourned at 3:58 PM.
Meeting Transcript
We will call to order the special meeting of the special workshop of the Folsom City Council for Tuesday, March 8th, 2022. The clerk would call the rule, please. Council members Aquino. Here. Rodriguez here. Howl? Here. And Chalem Cherla and Kozlowski are both absent. Okay, if you guys will join me in the Pledge of Allegiance. And to the Republic for the United States. For which it stands. One nation under God. And we can start with our first item. You have no agenda updates this evening or this afternoon. So that takes us into workshop item number one. This is a council workshop on developing a strategy to close the city's future funding gap. Introduction to strategic planning and direction to staff. All right. Good afternoon, everyone. As you will remember, on February 8th, you convened in a special meeting format to discuss strategies for closing the city's future potential budget shortfall. I appreciate your time today to continue that very important discussion. And just a reminder, these are all very important steps and underpinnings for developing the city's strategic plan. As we shared with you last month, we are not bringing this to you because there is an immediate budget problem. We can hold our own in our current constrained state in the current fiscal year, and we can do the same again, still in that very constrained state into the next fiscal year. But looking out farther, we know the trajectories are showing that this is not sustainable, not only in terms of meeting current needs, but also in terms of making sure that we are meeting and ideally exceeding that very warranted community expectation pace we're facing. We spent quite a bit of time with you providing detail as to our fiscal picture and future funding gap last time around, and we also discussed a suite of possible solutions that could be deployed, including uh using one-time ARPA funding as a you know crutch was the word I used, um, potential revenue enhancements, including a sales tax increase, potential cuts, and economic development strategies. At that meeting, we sought direction from you to move forward with a community engagement uh process, and you gave us the green light on that, and we are looking forward to bringing you results that hopefully will help inform your decisions about closing the city's future shortfall and also your strategic planning process that we will discuss later this afternoon. At that February 8th meeting, you also asked that we return to you with an item for your consideration to establish council subcommittees focused on economic development. And we did just that at the next meeting on February 22nd. And I want to extend my thanks for your direction and to uh council member Aquino and Vice Mayor Rodriguez and members of our community uh for serving on that ad hoc committee, which is examining opportunities as to um the uh underutilized or or unutilized city properties and opportunities that could be created there. Um I believe they're hosting their first meeting this week, so that's very exciting. Um today, just so you know the flow of the conversation. You're first gonna hear from Stacey Tamani, who is our chief financial officer and director of finance, who's gonna provide a brief overview, a recap of the financial information that she presented on February on February 8th, just in case anyone is just now joining the conversation and wants to be caught up. And from there, um, you all made great comments and asked great questions last time around, many of which we addressed, but some of which we wanted to come back to you with more information, and so we'll move from there into a series of report backs about um issues that you brought up last time. And then we'll conclude with a couple of exercises that are designed to further inform your strategic planning process and assist us in our ongoing community uh engagement efforts. So at this point, I'm gonna turn it over to Stacy for that brief recap. Um Stacy will address um at the conclusion of her kind of summary. She's gonna talk about report backs related to cost control measures we've already taken, uh, sales tax revenue, property tax revenue as it relates to South of 50 development, uh differentiating South of 50 costs from others, and the extreme and growing level of unmet um needs in our major operational departments. So I'll turn it over to you, Stacey. Thank you. Good afternoon, Mayor, Council members, Stacey Tamani, Chief Financial Officer. As we went over in last month's presentation, the city has a projected future funding gap. That means that our revenues are growing at a slower pace than expenses, and that creates a gap in the future. It means we won't be able to balance future budgets unless we take proactive action now. Although we're meeting all of our current obligations, there are millions of dollars of unfunded or underfunded needs that the city has been deferring year after year. And these are deferred needs, not wish list items. And unfortunately, these needs don't go away when they're deferred. They continue to accumulate, and the cost to pay for them has continued to grow. And on a related note, we're we're currently working on the fiscal year 22-23 budget. And in preliminary meetings with the department heads, we've received about 25 million dollars in additional requests for next year's budget, including 53 requested new positions.
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