Budget and Audit Committee Special Meeting – February 8, 2022

The Budget and Audit Committee met via teleconference on Tuesday, February 8, 2022, from 3:02 p.m. to 4:08 p.m., to consider the Fiscal Year (FY) 2021/22 Midyear Review. Committee members present: Mayor Darrell Steinberg (Chair), Eric Guerra (Vice Chair), Rick Jennings, and Mai Vang. The meeting included a presentation by Finance Director Emily Combs on the city's financial status, a supplementary proposal from Mayor Steinberg to invest $27 million in one-time community priorities, 14 public comments (all supportive), and a unanimous vote to forward the midyear review and the mayor's amendments to the full City Council for approval.

Public Comments & Testimony

• David Ben Wellos (member of the public): Expressed strong support for the $200,000 allocation to the Latino Center of Arts and Culture at Wynne Park, citing the importance of arts and cultural spaces for community bridging and tourism.
• Julie Heroda (CEO, St. John's Program for Real Change): Supported the $1 million for women and children shelter resources, reporting that St. John's supported 475 unhoused women and children last year, with 70–75% exiting to stable housing.
• Bassim Alkyra (Executive Director, CARES Sacramento Valley): Supported renewed funding for the FUEL Network, noting its essential role in providing pro bono immigration services to low-income immigrants and refugees, especially amid the Afghan refugee crisis.
• Nia Mooreweather (Community Organizer, Youth Forward and Sacramento Kids First Coalition): Supported the midyear review and the mayor's proposal, emphasizing the importance of inclusive economic development and youth investments.
• Rachel Rios (representing La Familia): Thanked the mayor for the $2 million La Familia Opportunity Center proposal, and supported youth services, homeless projects, the Latino Center, and the FUEL Network.
• Arlen Orchard (representing Sacramento State and SMUD): Advocated for the $1 million to the California Mobility Center, noting that it trained over 500 participants in the past year, resulting in more than 120 job placements and 50 internships.
• Richard Falcone (Community Organizer, United Latinos; Executive Director, Teatro Nahua): Supported the mayor's proposals, particularly for the FUEL Network, La Familia, and the Latino Center of Arts and Culture.
• Lambert (owner, To the Bay and Back Cheesecakes): Thanked the mayor for his vision but requested similar investment in Del Paso Heights and the California Black Chamber of Commerce.
• Brian Lopez (President, Cruz Reynoso Bar Association): Supported continued FUEL Network funding, emphasizing the ongoing need for immigration legal services due to the complexity of immigration law and the persistent threat of deportation.
• Adrian O'Correl (Policy Director, Sacramento Housing Alliance): Thanked the mayor for the $10 million housing trust fund replenishment and urged the council to prioritize a $100 million affordable housing bond to leverage state and federal resources.
• Jeffrey Tardi Gia (Co-Chair, Point-in-Time Count): Appreciated funding for the point-in-time homeless count, which helps quantify the issue.
• Lisa Bates (Sacramento Steps Forward): Expressed support for the $1 million coordinated access system, explaining that Sacramento lacks a streamlined entry point for homeless services, and that over 60% of unsheltered individuals are not in HMIS.
• Carolyn Caballas (Latino Economic Council of Sacramento): Endorsed the mayor's proposals, particularly $2 million for La Familia, $200,000 for the Latino Center, and $500,000 for the FUEL Network, citing that Latino residents represent approximately 28% of the city.
• Jesus Mata (Board member, Latino Center of Art and Culture): Voiced strong support for the $200,000 allocation for the Wynne Park building renovation, hoping his brothers can see Latino contributions reflected in public spaces.
• Dante Williams (Mercy Housing, former resident of Marina Vista): Urged approval of the $2.5 million for Marina Vista and Alder Grove, describing the need for youth programs and community support.

Discussion Items

Fiscal Year 2021/22 Midyear Review
Finance Director Emily Combs presented the midyear review, highlighting key financial changes since budget adoption:

• Revenue and Fund Balance: The city ended the prior year with additional resources due to higher sales tax, Measure U transaction taxes, property transfer taxes, and operational savings from position vacancies. Recommended revenue adjustments total $26.2 million, with $12.3 million allocated to debt service and $20.5 million estimated for pending labor contract costs. A surplus of $49.9 million is reserved for future budget deficits.
• One-Time ARPA Allocations: Includes funding for a citywide equity study, towing fee reform, Sacramento Native American Health Center for COVID-19 services, 19 positions for homeless outreach and code enforcement (alternative response), building inspection positions, after-hour veterinary care, staff additions in the City Clerk's Office and City Manager's Office, and park development for the Sacramento River East Levee project.
• Measure U Funds: Additional costs for Fire 911 dispatch center, solid waste disposal (CPI adjustment), and delinquent account rate payment waiver program.
• Five-Year Forecast: Revised to include $7.2 million for housing trust fund replenishment (including $5 million for labor negotiations and $2.2 million from fire diversity positions).
• Budget Timeline: Proposed budget release week of April 18, 2022; City Council hearings in May and June; final adoption June 14, 2022.

Mayor Steinberg's Proposal to Amend the Midyear Review
Mayor Steinberg presented a letter recommending an additional $27 million in one-time investments (beyond the city manager's foundation), echoing prior midyear practices. The proposal includes:

• Housing and Homelessness ($14.8 million): $10 million to replenish the Affordable Housing Trust Fund (including $7.2 million already owed), $2.8 million for Department of Community Response (DCR) outreach contracts with community-based organizations to have teams in every council district, $1 million for a coordinated access system (contingent on county and Continuum of Care matching funds), $1 million for women and children's shelter resources.
• Economic Development ($3.2 million): $2 million for La Familia Opportunity Center, $1 million for California Mobility Center (workforce training), $200,000 for Latino Center of Arts and Culture at Wynne Park.
• Youth and Community Investment ($5.5 million): Broad youth program investments building on ARPA/CARES funds, plus $2.5 million specifically for Marina Vista and Alder Grove neighborhood initiatives.
• Racial Equity ($500,000): Virtual resource center, racial equity council, grants for trauma-informed mediators and mental health counselors, and exploration of a national reparations policy.
• FUEL Network ($500,000): Continued support for immigrant and refugee legal services.

Key Outcomes

• Motion and Vote: Councilmember Eric Guerra moved to accept the FY2021/22 Midyear Review as amended by the mayor's letter and forward it to the City Council for approval. Councilmember Rick Jennings seconded. The motion passed unanimously (4–0) with all members voting yes.
• Committee Member Requests:
  • Councilmember Vang requested that future reports include performance metrics and outcomes for midyear investments, and asked that a status update on the Measure U participatory budgeting pilot be agendized at a future Budget and Audit Committee meeting.
  • Councilmember Jennings requested a future discussion on deferred maintenance of city ball fields, potentially separate from the midyear review.
  • Councilmember Guerra raised the issue of high ambulance wall times and career pathways for EMTs/paramedics; Mayor Steinberg suggested a full council workshop in April 2022, contingent on the status of labor negotiations with Local 522.
• Next Steps: The midyear review and the mayor's amendments will be presented to the full City Council for final approval at an upcoming meeting.