San Diego Budget and Government Efficiency Committee Meeting - November 15, 2017
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San Diego Budget and Government Efficiency Committee Meeting - November 15, 2017
On November 15, 2017, the Budget and Government Efficiency Committee met with Chair Sherman, Councilmember Gomez, and Councilmember Kate present (Councilmember Bree absent). The committee approved the minutes of the October 25, 2017 meeting by unanimous consent and proceeded through a ten-item docket. No public comments were made on any agenda items.
Item 1: Purchase of Sikorsky S-70i Fire Rescue Helicopter
The Fire Rescue Department presented a request for council approval to purchase one Sikorsky S-70i Firehawk helicopter for approximately $20 million. The Chief provided a history of the city's helicopter program, noting the need for larger capacity and the recommendation from a fleet analysis by Conklin & Decker. The new helicopter would deliver 1,000 gallons of water compared to the current 375 gallons. Funding would come from the general fund initially, with reimbursement via lease financing. The committee approved the motion unanimously, with Councilmember Kate and Councilmember Gomez supporting.
Item 2: Restructuring of 2006 Tobacco Settlement Bonds
Debt Management presented a proposal to restructure the 2006 tobacco settlement bonds to generate $23.5 million in tax-exempt proceeds for capital projects. The recommended projects were South Mission Beach Lifeguard Station ($750,000), Police Range phase 2 ($9 million), and Fire Rescue Air Operations facility ($13.7 million). The IBA expressed concerns about prioritization of the fire facility, noting it had not been previously identified as a top priority. Councilmember Gomez moved to approve the restructuring without tying it to specific projects, but the motion to move forward without recommendation passed unanimously after a request from Councilmember Kate to keep the projects. The item will go to full council without a committee recommendation.
Item 3: City Treasurer's Investment Policy and Delegation of Authority
The City Treasurer's Office presented the annual investment policy update and requested delegation of authority to invest funds for one year from January 1, 2018. Changes were minor and grammatical. The committee approved the motion unanimously.
Item 4: Amendment to Remediation Contract with Luth and Turley
Risk Management requested an additional $4.5 million for the as-needed remediation contract due to water main breaks in Little Italy, Morena Boulevard, and Camino de la Costa. An additional $1 million was requested for contract year 6 to cover potential winter losses. All costs are funded by the water enterprise fund, not the general fund. The committee approved the motion unanimously.
Item 5 (mistakenly labeled #6): Corporate Sponsorship Agreement with Sharp Healthcare
The Corporate Partnerships Office presented a three-year agreement with Sharp Healthcare as the city's official health and wellness partner. Terms include an annual cash fee of $100,000 and in-kind services valued at $150,000 (54 community benefit events, employee wellness programs). Renewal options could extend total value to $1.25 million. The committee approved the motion unanimously.
Item 6 (mistakenly labeled #5): Benefits Consulting Contract with Conduent HR Services
Risk Management requested approval of a five-year agreement with Conduent for brokerage, benefit consulting, and actuarial services at $285,000 annually, plus one-time costs totaling $152,000. The contract was competitively bid. The IBA noted an increase in hourly rates and a decrease in estimated hours compared to the prior contract, but staff confirmed no reduction in scope. The committee approved the motion unanimously.
Item 7: FY2018 First Quarter Budget Monitoring Report
Financial Management presented the report, noting major revenues are trending slightly above budget, with property tax and TOT exceeding projections. General fund excess equity is estimated at $17.9 million. Public safety and transportation/stormwater overtime are over budget, primarily due to storm preparation and hepatitis A response. Risk management reserves are above target. The committee considered the report without a vote.
Item 8: FY2019-2023 Five-Year Financial Outlook
Financial Management presented the outlook, projecting short-term deficits of $10 million in FY19, $34 million in FY20, and $20 million in FY21. The baseline includes tentative POA agreement costs, pension payments, and critical strategic expenditures. Mitigation includes 2% budget reduction requests and use of excess equity. Risks include higher pension costs, SB1 repeal, and economic downturn. The committee accepted the report for informational purposes.
Item 9: Key Performance Indicators and Perform SD Dashboard Update
Performance and Analytics presented an update on the city's online performance dashboard, currently containing 64 KPIs. The goal is to reflect 100% of city KPIs by FY2021. Efforts include automation of data collection and development of a performance management mechanism. The committee considered the report.
Item 10: San Diego Convention Center FY2017 Year-End Report
The Convention Center Corporation reported record-breaking results: 149 events, 898,000 attendees, $1.1 billion economic impact, and $25.4 million in TOT and sales tax to the city general fund. Record revenues of $41 million and occupancy of 75.5% were driven by medical conventions and Comic-Con. The center invested $10.1 million in capital improvements and has a 10-year projection of $85 million in reinvestment. Net ROI to the city was 52% ($8.7 million on $16.7 million city investment). The committee considered the report.
Key Outcomes
- Approved purchase of one Sikorsky S-70i Firehawk helicopter (unanimous).
- Forwarded tobacco bond restructuring to council without recommendation (unanimous).
- Approved investment policy and delegation of authority (unanimous).
- Approved additional funding for remediation contract (unanimous).
- Approved Sharp Healthcare sponsorship (unanimous).
- Approved Conduent HR benefits consulting contract (unanimous).
- Informed on first quarter budget monitoring, five-year financial outlook, KPI dashboard, and convention center annual report.
Meeting Transcript
All right. Good morning, everybody. Thank you all for being here. Want to welcome you to the November 15th budget and government efficiency committee meeting. Do the roll call real quick. Looks like we have Councilmember Gomez, Councilmember Kate, and myself. So we have quorum with Councilmember Bree being absent. Also we need to approve the committee actions of our last meeting on October 25th, unless there's any changes or issues with the minutes. Seeing none, those will be approved by unanimous consent. Do we have any non-agenda public comment today? We do not. That's good. We have a ten item docket today, so we'll get through it as quickly as we can. Uh any committee members or mayor's office, city attorney, IBA, any comments to start us off. Good. No re continuance requests on any of the items. Perfect. And we'll move on to move right on to action agenda because we have no consent on items today. Our first item is to review a report from Fire Rescue Department recommending council approval of purchase of Sikorsky S 701i Fire Rescue Helicopter and Aircraft Outfitting. Welcome, Chief. When you're ready. Probably 7.5 minutes. How's that? 7.52. This is an action item seeking council approval to execute an agreement with Sikorsky Aircraft Corporation for the purchase of one Sikorsky S 70i fire rescue helicopter. We thought it important to talk a little bit about the program history, and so we'll walk through it uh with you here uh quickly. In 1997, uh we identified a gap need not only of the city but within the region, uh a need for uh fire helicopter service. Uh there was one helicopter at the time up the Forest Service up in Ramona, it was a national resource, and it just wasn't here when we we had a need. In 1999 and 2000, as we gained a little bit of momentum, uh there was an operator in Orange County that had been following what we're doing at the uh near the end of fire season donated, generously donated uh 30 days of helicopter service and pilots, and so we went on a uh uh mission of exposing you know why the region and why the city needed this level of service. Uh we were successful meeting with a number of elected officials, uh federal, local, uh state, uh so much so that we ended up with another 30 days and we operated in the winter and again demonstrated the need for the service here locally. Uh the city uh at the time was was fiscally constrained and didn't have the ability to buy or contract aircraft, so uh the corporate partnership program was brand new at the time, and so we sought help from the private sector. We're successful in securing significant support, enough so that in 2002 we were able to fund a 90-day program, a contract program that provided a Bell 212-large helicopter, and uh the city's contribution, of course, was the crews. It was so successful in 2002 that in 2003 we did it again, had more money, uh scripts donated, uh, the tribe, some wrote there were a number of large businesses locally that contributed, and we ran it again, and uh lo and behold, the the cedar fire occurred, and uh the contract for the helicopter run out three days before you may remember the story, and there were no aircraft flying over the city uh the initial day or two of the cedar fire. Uh the mayor and council at that time determined that we needed to have a higher level of protection and tasked the fire rescue department with purchasing its first helicopter. Uh in addition, the aircraft consultant Conklin Dedecker was hired to do a fleet analysis, an assessment for the region, really what type of aircraft, a how it was staffed, ours, the a very comprehensive study. They've done those for the few local government fire departments in the state that operate aircraft and determined that uh an early a good first start would be the purchase of a Bell 212 helicopter. Um we began rear-round service upon delivery uh later in 2000 five, and we hired pilots from the private sector high time pilots and uh and contracted for maintenance. Uh wasn't long before everybody figured out that these are pretty maintenance intensive machines, and that if you really wanted to have one helicopter available, you needed two. At the time, uh Mayor Jerry Sanders was working uh with Tracy Jarman, the fire chief, at the time to secure a second one and the 2007 uh which Wajito fire occurred. Uh that all but uh that all but secured it. Uh the one helicopter we operated uh thankfully was in service and operational and flew largely nonstop day and night throughout the first few days of the which Wajito fire. Uh in 2008, Copter 2, brand new Bell helicopter uh 412 was delivered to the City of San Diego, and both those aircraft are still operated today. In 2014, uh we uh experienced another wind-driven fire event in May of 2014. We had the Bernardo fire within the city, and again, thankfully, both aircraft were up and running. Uh the one helicopter uh was not the week before. And in talking with the mayor and and other council members, they also agreed that you know what, if we need to have two helicopters available, you really need to you need to have three. Uh a little bit about the aircraft we operate. Copter one is a Bell 212 twin-engine helicopter, twin-engine for uh what we call one engine inoperative performance. You lose an engine, you've got another one, hopefully to fly away, maybe flutter away, but at least you've got you've got some level of power to carry the crew to safety. Again, purchased in 2005, it was completely refurbished.
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