Budget and Audit Committee Meeting Summary - May 31, 2022

The Sacramento Budget and Audit Committee met on Tuesday, May 31, 2022, from 3:01 p.m. to 4:15 p.m. via teleconference. The committee reviewed and approved the consent calendar, received the Measure U Community Advisory Committee's recommendations, and forwarded the Fiscal Year (FY) 2022/23 Operating Budget and 2022–2027 Capital Improvement Plan (CIP) to the full City Council for final adoption on June 14, 2022.

Consent Calendar

• Approved the Budget and Audit Committee meeting minutes of April 5, 2022, and May 6, 2022 (File ID: 2022-01109).
• Accepted the City Auditor’s Whistleblower Hotline Activity Report for October 2021 through March 2022 (File ID: 2022-00513) and forwarded it to the City Council.
• Accepted the City Auditor’s Activity Report for the 3rd Quarter of FY 2021/22 (File ID: 2022-00958) and forwarded it to the City Council.
• Accepted the FY 2020/21 Single Audit Report (File ID: 2022-01014) and forwarded it to the City Council.
• Accepted the FY 2020/21 Sacramento City Employees’ Retirement System Annual Financial Report (File ID: 2022-01031) and forwarded it to the City Council.
• All consent calendar items were passed unanimously (4-0).

Public Comments & Testimony

• Item 6 – Measure U Recommendations:
  • Lambert Davis (phone 4366) expressed concern about the use of the word “trust” in Measure U materials, stating that trust should be based on merit and performance metrics. He also noted that Measure U is a tax, not a one-time funding source, and urged the committee to listen to community ideas.
  • Barry Boyd supported the mayor’s offer to help with outreach but cautioned against any council member participation that could influence outcomes. He also requested that ad hoc committees be retained for boards and commissions.
• Item 7 – Budget Adoption:
  • Kate Wilkins, representing 350 Sacramento, thanked the committee for the accelerated climate action plan timeline and requested additional permanent staffing and resources for the climate office.
  • Nancy McKeever (District 7) echoed the need for two more full-time climate staff and urged the city to set aside matching funds for state and federal climate grants. She highlighted the multiple benefits of shade trees and other climate investments.
  • Glayol Saba, Sacramento Climate Coalition, reiterated the request for more climate staff and suggested revenue-generating ideas such as a business license surcharge already used in Portland, Oregon, which generates $54–71 million annually.
  • Jason Preto, landscape designer for Merritton, supported the $425,000 one-time funding request for Oak Park open space improvements, including irrigation and electrical work. He noted the project includes a native grassland restoration, an urban farm, and community science events, and would be a catalyst for further state funding.

Discussion Items

• Item 6: Measure U Community Advisory Committee Recommendations Regarding FY 2022/23 Proposed Budget
  • Dr. Flo Jean Cofer, Chair of the Measure U Community Advisory Committee, presented an update on the participatory budgeting (PB) pilot. Key statistics: 383 digital ideas, over 100 paper ideas (more than 500 total), 30 outreach events over 4–6 weeks, and 60 applications for proposal delegates. The committee requested $5.5 million for PB (up from $1 million in the pilot) and $800,000 for small business support. Dr. Cofer highlighted lessons learned, including the need for deeper city staff engagement, pre-launch planning, and measurable outreach goals. The voting phase is scheduled for August 1–31, with funding decisions expected in the fall.
  • Mayor Steinberg noted that the city has invested $170 million in inclusive economic development, youth, and neighborhoods since the passage of Measure U in November 2018 (excluding federal CARES/ARP funds). He suggested that the PB process could be applied citywide, but emphasized that elected officials must retain ultimate fiscal stewardship.
  • Councilmember Vang praised the PB update and expressed interest in adopting similar community engagement strategies for the overall budget. She stressed the need for benchmarks to demonstrate success.
  • Councilmember Guerra supported the PB approach but noted that one-time funding limits multi-year commitments. He also highlighted the importance of addressing housing affordability through both supply and wage growth.
  • Councilmember Jennings acknowledged that the pilot has proven the process works, and that mid-year budget discussions would be the appropriate time to consider increasing PB funding to $5.5 million or more.
  • The committee received and filed the report without a vote.
• Item 7: Adoption of the FY 2022/23 Operating Budget and 2022–2027 Capital Improvement Plan
  • Finance Director Emily Combs presented the budget overview, including recommended changes since the April 25 release. Notable adjustments: $2.2 million in additional revenue from the storm drainage property fee, $16.6 million in revenue to support the storm drainage capital program, and net-zero adjustments for property/business improvement districts. The budget resolution was modified to end Measure U realignment activities after FY 2022/23 and to allow year-end surplus for two riverfront project grants. Language providing general fund backfill for the 4th R program was removed as the program’s fund balance is sufficient.
  • Councilmember Guerra requested that the city manager explore reallocating capital projects within District 6 to fund $425,000 for Oak Park open space improvements and $16,000 for soccer goal improvements at Mayphong Park. He also moved to include $250,000 in ongoing funding to restore the free transit for youth program to $1 million annually, noting its climate and equity benefits.
  • Councilmember Vang asked for confirmation that the SURE program gap is fully covered by the $1 million increase; Assistant City Manager Leyne Milstein confirmed the gap is filled.
  • Councilmember Jennings raised concerns about fire department overtime and the need to add five FTEs back to the field. City Manager Howard Chan indicated that the budget package to be presented on June 14 would include strategies to reduce overtime, including putting five FTEs back into the field.
  • Mayor Steinberg announced that the climate action plan draft will be completed by July 1, 2022, thanks to additional resources for contracts. He urged the committee to support the full $1 million for free transit for youth.
  • A motion to forward the budget to the full City Council with the three funding requests ($250k ongoing for transit, $425k one-time for Oak Park, $16k for soccer goals) and direction to explore CIP adjustments passed unanimously (4-0).

Key Outcomes

• Consent Calendar approved unanimously (4-0).
• Measure U Community Advisory Committee Recommendations received and filed; no formal action taken.
• FY 2022/23 Operating Budget and 2022–2027 CIP forwarded to the City Council for final adoption on June 14, 2022, with the following directions:
  • Include $250,000 in ongoing funding to restore the free transit for youth program to $1 million annually.
  • Include $425,000 in one-time funding for Oak Park open space improvements.
  • Include $16,000 in one-time funding for soccer goal improvements at Mayphong Park.
  • The city manager will explore reallocating capital projects within District 6 to offset the $425,000.
• The committee committed to further discussions on fire department staffing and overtime reduction.
• The city manager confirmed that the climate action plan draft will be released by July 1, 2022.