Budget and Government Efficiency Committee Meeting - May 25, 2016
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Budget and Government Efficiency Committee Meeting - May 25, 2016
The Budget and Government Efficiency Committee of the San Diego City Council met on May 25, 2016, at 9:00 a.m. (local time) with Chair Gloria, and members Cole, Kate, and Sherman present. The meeting was called to order with a quorum. The committee approved the minutes of the April 13, 2016 meeting by unanimous consent.
Consent Calendar
- Approval of the committee record of actions for the April 13, 2016 meeting.
Public Comments & Testimony
- James R. Lee (retired firefighter, City of San Diego) proposed an amendment to the municipal code to allow reimbursement of medical benefits through a cost-sharing program (SD SERS). He noted that the current reimbursement is $1,000/month, but the program only provides $165/month, resulting in a net savings of $880/month to SD SERS. He stated that the program is recognized under the Affordable Care Act and that he had been reimbursed since 2014, but the city reversed that decision.
- Martha Welch (public) criticized the city's budget priorities, questioning the use of funds for housing, libraries, and water. She expressed distrust in the city's financial management and referenced historical budget figures.
Discussion Items
Development Services Department (DSD) and Planning Department – User Fee Updates
- Afsani Amadi, Chief Building Official and Deputy Director of DSD, and Jeff Murphy, Planning Director, presented a request to approve DSD's user fee update and General Plan Maintenance Fee (GPMF) changes.
- DSD Fees: The last update was in 2009. A comprehensive fee study determined a 13% revenue increase ($5.3 million) is needed to achieve full cost recovery. The proposal consolidates 538 fees into 313, converts 62 deposit accounts to flat fees, and includes one-time costs for technology upgrades, permit center improvements, and digitization. The fee for a single-family addition (320 sq ft) would increase from $1,311 to $1,379, while a drive-thru restaurant (2,058 sq ft) would increase from $5,642 to $10,000. Stakeholder outreach (BIA, Chamber of Commerce, NAOP) resulted in a letter of support.
- General Plan Maintenance Fee: Originally set in 1991 at a flat $275 per permit, the proposal changes the methodology to a surcharge of 8.6% of building and plan check permit fees (if DSD fees are approved) or 9.1% otherwise. This would reduce the number of permit types subject to the fee from 31 to 7, and be revenue neutral. The proposal also creates a special fund for GPMF revenues. The Technical Advisory Committee (TAC) recommended maintaining the flat fee, but staff recommended the surcharge. NAOP supported the surcharge with a $10,000 cap. The chair noted that a $10,000 cap would have minimal revenue impact and no legal issues.
- Committee Action: Motion by Sherman to approve the staff recommendation with a $10,000 cap on the GPMF surcharge, seconded by Kate. Passed unanimously.
Airports Division – User Fee Adjustments
- Rod Probst (Deputy Director, Real Estate Assets) and Wayne Ryder (Program Manager) presented a request to increase fuel flowage fees and transient aircraft parking fees at Montgomery-Gibbs Executive Airport and Brown Field.
- Fuel Flowage Fees: Last updated in 2003. Current fees: aviation oil $0.09/gal, Avgas $0.07/gal, jet fuel $0.07/gal. Proposed increase to industry average over two fiscal years: FY2017 – oil $0.095, Avgas $0.08, jet fuel $0.085; FY2018 – oil $0.10, Avgas $0.09, jet fuel $0.10. FY2015 revenue was $323,000; projected FY2017 increase of $58,000; FY2018 increase of $57,000.
- Transient Parking Fees: Last updated in 1991. Current: $5/night for aircraft <10,000 lbs, weight-based for larger. Proposed increase to industry average over two years: FY2017 – single engine $6, multi-engine $7; FY2018 – single engine $7, multi-engine $9. FY2015 revenue $28,400; projected FY2017 increase of $7,000; FY2018 increase of $6,747.
- The Airports Advisory Committee took no action on the proposal. The committee noted that monthly tie-down fees and hangar leases will be addressed separately through long-term leases.
- Committee Action: Motion by Sherman to approve the staff recommendation, seconded by Cole. Passed unanimously.
Convention Center Corporation – Loan for Sales Pavilion and CIP Improvements
- Mary Lewis (CFO), Baku Patel (DET Coordinator), and Gil Cabrera (Chair, Convention Center Budget Committee) presented a request to approve a $25.5 million loan from the California Infrastructure and Economic Development Bank (I-Bank) for improvements at the San Diego Convention Center, including sales pavilion fabric replacement, escalator modernization, cooling tower replacement, and fire/life safety system replacement.
- The loan is structured as a 25-year lease agreement with a projected interest rate of 3.59%. The city and the convention center corporation are co-lessees. Annual payments are approximately $1.6 million (FY2018-2042), with a FY2017 impact of $154,000. The city would backstop payments if the corporation defaults. The corporation prioritizes this debt payment, but may need city assistance for other maintenance obligations. The naming rights dispute with the port was discussed as a potential revenue source.
- Committee Action: Motion by Kate to approve the staff recommendation, seconded by Sherman. Passed unanimously.
Financial Management – Amendment to Council Policies
- Michael Clark and Lisa Salaya (Financial Management) presented a request to repeal two obsolete council policies related to special revenue funds (safety sales tax and gas tax) as recommended by a city auditor performance audit (report 16-100). State law provides sufficient guidance. Additionally, a technical adjustment to the budget policy allows budgeting of capital lease proceeds to improve transparency.
- Committee Action: Motion by Sherman to approve the staff recommendation, seconded by Kate. Passed unanimously.
Financial Management – Agreement with Muni Services for Sales and Use Tax Audit
- Lisa Sly (Budget Coordinator) and David Onate (Senior Budget Analyst) presented a request to authorize a contract with Muni Services LLC for sales and use tax audit and recovery services. The city has used this service for 25 years, alternating between Muni Services and HDL Companies. The new contract piggybacks on the City of San Jose’s competitive selection process (2015) and offers a reduced fee of 14% (down from 15%) of recovered revenue. The term is two years with two optional one-year renewals.
- Committee Action: Motion by Kate to approve the staff recommendation, seconded by Cole. Passed unanimously.
Key Outcomes
- All agenda items were approved unanimously by the committee and will be forwarded to the full City Council.
- The committee adjourned until its next meeting on Wednesday, June 22, 2016, at 9:00 a.m.
Meeting Transcript
Good morning, everyone. Welcome to the budget and government efficiency committee meeting of May 25th, 2016. I'll call the meeting to order and note that we have a quorum now present consisting of committee members Cole, Kate Sherman, and myself. We'll hop in right along as we normally do. The committee to the committee record of actions for the April 13, 2016 meeting. These minutes will be approved by unanimous consent unless pulled for discussion. Any requests? Seeing none, they will stand approved. We'll move on to non-agenda public comment. This is an opportunity to discuss something not on today's agenda, but within the purview of this committee's responsibilities. We have two speakers this morning, James R. Lee, followed by Martha Welch. Both of you will please come forward, and you'll have two minutes to speak. Thank you for the committee's consideration. What I'm proposing is a amendment or a wording change to municipal code that uh allows reimbursement of medical benefits by SD SERS. I'm retired firefighters, City of San Diego. Currently, and as you receive these documents that are being passed out. Um the current medical reimbursement for me is a little over a thousand dollars per month. The reimbursement program that I would like to or that I actually am involved with $165 per month. This is a nationwide program. And the net savings to SD SERS, as you can see in bold print there is $880 per month approximately. It varies slightly depending on the um there's a huge uh trust fund that's drawn from that's national. And it varies some quarters. This last quarter was $17. There was over a million uh million and a quarter dollars uh that was taken out of that trust fund to share medical expenses for people throughout the 50 states. And to reimburse that trust fund for the quarter, it cost me $17. Currently, under the municipal code, the section is cited there. Only insurance can be reimbursed. This is a cost sharing program that is not allowed currently. I was uh SD SERS was actually reimbursing me since 2014. And then through the recent amendment that I'm you're probably aware of, they reverse that. Now I'm um refunding that money to SD SERS on a monthly basis. And I might specifically say that this is recognized nationally in the Affordable Care Act, or commonly known as Obamacare. You'll see that on the second sheet that you have in front of you. It is specifically included in the Affordable Care Act nationally. In other words, I do not have to pay a penalty. Mr. Lee. It is it is addressed in there. Your time is expired. Okay. Thank you for sharing our view. Thank you, sir, and thank you for your service to our city. Uh Martha Welch. Good morning. I watched the debate last night. 1952 is our nine cents that were sip. That's how old it is. Last year in the budget, nine million five million to the cat. And then see if this is reported to um uh um what's going on right now?
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