Budget and Audit Committee Reviews FY2023-24 Budget and Advances Public Bank Exploration - May 30, 2023
STREAMING COPY IN PREPARATION — RECORDING AVAILABLE FROM THE ORIGINAL SOURCE
Budget and Audit Committee Meeting - May 30, 2023
The Sacramento City Council's Budget and Audit Committee met on Tuesday, May 30, 2023 at City Hall Council Chamber. The committee considered the 3rd quarter city auditor's report, budget adjustment authority, the FY2023/24 operating budget and capital improvement plan, Measure U community recommendations, and a proposal to explore a municipal public bank. All votes were 4-0 with members Guerra, Talamantes, Vang, and Mayor Steinberg present. The open session was called to order at 3:32 p.m. and adjourned at 4:57 p.m.
Consent Calendar
- Item 1 – City Auditor's Activity Report (Q3 FY2022/23): Approved and forwarded to City Council for final approval. Motion by Member Guerra, second by Member Talamantes. Passed 4-0. Public commenter Mac Worthy raised concerns about audit transparency, tax revenue tracking, and bond debt.
Public Comments & Testimony
- Items 2 & 3 – Budget adjustments and FY2023/24 budget: Public commenters included:
- Mac Worthy: questioned budget terminology and public works employment.
- Ralph Proper (Environmental Council of Sacramento / Breathe California): supported the new climate staff position, urged more staffing to compete for state/federal climate funds, and argued climate leadership would boost the local economy.
- Jesse Tienchen (CEO, Opening Doors): urged renewed funding for the FUEL immigrant/refugee network; noted immigrants made up 27% of California's population in 2019, with $291 billion in spending power; Sacramento immigrants paid over $300 million in state/local taxes with $2.4 billion in spending power.
- Marcus Tang (FUEL): described the network of over 80 organizations and pressing needs related to Title 42, DACA, and public benefit disenrollment.
- Nicole Zanardi (immigration attorney): noted over 12,000 pending cases at the Sacramento Immigration Court.
- Lambert Davis: opposed pay raises for remote city workers, calling for termination of remote employees.
- Item 4 – Measure U recommendations: Public commenters included Measure U committee members Marbela Salah (District 3) and Nikki Paschal, plus Lambert Davis. Salah stressed the need for outcome data and supported expanding violence intervention programs. Paschal objected to the draft budget reducing Measure U funds for homelessness due to state money supplanting, and urged prompt funding for participatory budgeting round two. Davis criticized participatory budgeting outreach and questioned grants to organizations that canceled meetings.
- Item 5 – Public bank consultant: Public commenters included:
- Chris Brown (Sacramento Climate Coalition): supported the proposal, citing $54 million in interest costs paid to commercial banks.
- Ralph Proper (ECOS): supported the concept for climate and housing.
- Mac Worthy: cautioned about financial risks and lack of local banking expertise.
- Glale Saba (Sacramento Climate Coalition): supported option 2, citing the Bank of North Dakota's 18.5% return on equity (roughly 70% higher than Goldman Sachs/JPMorgan).
- Douglas McPherson: announced support from several organizations, including ECOS, Sierra Club, and 350 Sacramento.
- Sally Callahan: thanked the committee for its leadership.
Discussion Items
- Item 2 – FY2022/23 Recommended Budgetary Adjustment Authority: Staff (Budget Manager Mirthala Santizo) presented a resolution to adjust budget authority and add multi-year operating projects (MYOPs). The committee forwarded the resolution to City Council for adoption.
- Item 3 – FY2023/24 Operating Budget and 2023-2028 Capital Improvement Plan: Staff walked through proposed changes, including:
- $1.1 million to address a homeless services shortfall.
- Small labor adjustments: ~$27,000 (general fund/Measure U), $13,000 (water), $3,000 (community center), -$3,000 (storm drainage), and net-zero Delta Shores.
- Council-recommended additions: a program specialist for climate; $250,000 MYOP for a language access plan with an admin analyst; $432,000 MYOP for two park safety rangers and equipment/vehicles; $450,000 reallocated for Southside Park Pool renovations.
- Budget resolution changes: authority for city manager to adjust MYOPs in cannabis division and utilities; removal of obsolete language; authority to extend 10 police grant agreements for violence/gang prevention.
- Five-year forecast: FY24 ending fund balance decreased by $181,000 to $919,000; out-year deficits grow by an average of $1.6 million per year.
- Vice Mayor Guerra moved to forward the budget and adjustment authority, proposing an amendment to include $500,000 for the FUEL network, contingent on administrative compliance and seeking additional resources. Mayor Pro Tem Vang seconded and the motion passed 4-0.
- Councilmember Talamantes asked about the additional $1 million for the Office of Violence Prevention; staff confirmed it was in addition to the $1 million already included, funded from current-year resources, with out-year costs making the deficit worse by $1 million.
- Item 4 – Measure U Community Advisory Committee Recommendations: Chair Dickinson presented recommendations: robust district-level outcome metrics for Measure U spending; renewing and increasing participatory budgeting support ($5 million in FY2023/24); prioritizing homelessness prevention, rapid rehousing, shelter beds, mobile showers/restrooms, respite centers, and transitional/permanent housing; and funding community-based crisis response and violence prevention. Dickinson also expressed concern that recommendations were heard after the committee had already forwarded the budget. The committee voted to forward the recommendations to City Council and directed staff to hold a September workshop on participatory budgeting. (Note: The draft minutes attribute the motion to Member Guerra with second by Member Talamantes, while the transcript appears to show Mayor Pro Tem Vang offering the motion; the vote was unanimous.)
- Item 5 – Councilmember Proposal: Public Bank Consultant Funding: The committee reviewed Councilmember Valenzuela's proposal to hire a consultant (up to $250,000) for a feasibility study under AB 857. City Treasurer John Colville explained that a full feasibility/business plan study was the cost driver; a feasibility-only study could cost around $35,000. The committee adopted option 2, directing the City Treasurer to commence work with committee members and forward to City Council without further review. Councilmember Talamantes raised concerns about the $250,000 cap; a suggestion was made to report back if costs exceed $50,000. The committee also encouraged partnering with local credit unions (the City holds nearly $100 million on deposit with credit unions). The motion passed 4-0. Mayor Steinberg cited a $10 million loan from the risk management fund in 2022 for affordable housing along Stockton Boulevard as an example of the concept's potential.
Key Outcomes
- Approved Q3 FY2022/23 City Auditor's Activity Report and forwarded to Council (4-0).
- Forwarded FY2022/23 Budgetary Adjustment Authority resolution to Council (4-0).
- Forwarded FY2023/24 Operating Budget and 2023-2028 Capital Improvement Plan to Council, including conditional support for up to $500,000 in FUEL network funding (4-0).
- Forwarded Measure U Community Advisory Committee recommendations to Council and directed staff to schedule a September participatory budgeting workshop (4-0).
- Directed the City Treasurer to proceed with a public bank feasibility study (funding up to $250,000, report back if over $50,000) and to forward the proposal to Council without further committee review (4-0).
- Adjourned at 4:57 p.m.; public comments on matters not on the agenda were deferred to the concurrent City Council meeting.
Meeting Transcript
Thank you. Good afternoon, everyone. The City Council's budget and audit committee will please come to order. Would the clerk please call the role to establish a quorum? Thank you. Councilmember Talamantes. Here. Mayor Pro Tem Vang. Here. Vice Mayor Gaddha. And Mayor Steinberg. Here. Good afternoon, everyone. Councilmember Jennings isn't here yet. Vice Mayor, would you mind leading us in the land acknowledgement and the Pledge of Allegiance, please? Please rise for the opening acknowledgement in honor of Sacramento's indigenous people and the tribal lands. To the original people of this land, the Nissanon people, the Southern Maidu, the Valley and Plains of Miwok, and the Putwin Wintune people, and the people of the Wilton Rancheria, Sacramento's only federally recognized tribe. May we acknowledge and honor the native people who came before us and still walk beside us today on these ancestral lands by choosing to gather together today in the act of practice of acknowledgement and the appreciation for Sacramento's indigenous people's history, contribution, and lives. Thank you. If everyone can uh face the flag, please join me in the Pledge of Allegiance. Salute, pledge. I pledge allegiance to the flag of the United States of America and to the Republic for which it stands. One nation under God, indivisible, with liberty and justice for all. Thank you, Vice Mayor. And good afternoon to everyone. Today is uh an important meeting of the budget and archemy. They're all important, of course, but today we take the recommendations that we heard from the community and from uh the full city council in each of the separate subject matter hearings, and we try to incorporate them into specific budget recommendations beyond the base budget presented by the city manager to the full city council. And of course, this year is different. I just want to remind people. Um in prior years where we've had significant surpluses, the managers presented a budget. The mayor, uh the previous mayor and this mayor have uh written lengthy uh but very articulate uh but well written uh budget budget memos in which the mayor is recommended to the council um in ways that are mostly consistent, by the way, with the manager's budget, but what the mayor uh uh recommends in terms of the expenditure of some of those surplus dollars. This year is different. It's different because um the economy is in a different place, not as good as it was. We don't have the large surpluses to the degree that we do have some additional money. There is a clear consensus among the city council that with collective bargaining uh uh around the corner are actually beginning that uh we want to invest uh in uh in attracting and retaining uh our city workforce across the board. And so that's where most of the money uh is proposed to go. Now there is some or there's always some things we can do, quote on the margins, and as I said at previous meetings, the back and forth between external investment uh and internal investment. We're always this city council, the next city council, the next mayor. We're always gonna try to achieve the imperfect balance. Um, and it is imperfect, but we have a responsibility to both to build up the organization so that it is strong, and at the same time to invest directly in our community, affordable housing, youth, um, commercial corridors, workforce development, art and culture, you name it. So here we are. This is a season for investing uh in our workforce and properly so. So that's just a little bit of a context. Today we're gonna be talking about those additional items that came up during uh the hearing. So let us begin with the consent calendar. Uh is there a motion on the consent calendar? I'll move the consent calendar. Vice Mayor, second by councilmember Talamantes. Thank you. Beat you to it.
openpublica.com