Budget and Government Efficiency Committee Meeting - November 14, 2018

The Budget and Government Efficiency Committee convened on November 14, 2018, with Chair Bree and members Vice Chair Ward, Councilmember Kate, and Councilmember Gomez present. The committee reviewed the first quarter budget monitoring report, the five-year financial outlook for FY2020-2024, several procurement contracts, and annual reports on the Living Wage Ordinance, business diversity, and prevailing wage compliance.

Consent Calendar

• The committee approved the minutes from the October 17, 2018 hearing.

Public Comments & Testimony

• Ann Feige, Chair of the Community Forest Advisory Board, urged the city to address climate change evidence in the five-year outlook, highlighting the low cost and high effectiveness of tree investment for cooling, stormwater management, and community benefits. She noted the city needs more forestry staff (currently 8 positions vs. a recommended 15) to manage proactive tree care.
• Beth Cransberger, representing the Citizens Equal Opportunity Commission, called for an updated disparity study, noting the last one was in 1996. She argued it could be done for less than previously discussed and that it is essential for effective equal opportunity contracting.
• Mr. Lemon, a construction industry representative, commended staff for increasing apprenticeship violations flagged but warned of widespread prevailing wage cheating. He offered partnership with building trades to help enforce compliance, noting the city’s exposure to losing state funding if violations are found.

Discussion Items

• Items 10 & 11: First Quarter Budget Monitoring Report and FY2020-2024 Five-Year Financial Outlook
  • Finance staff reported general fund major revenues exceeding budget by $24.9 million, driven by property tax ($8.7M above) and sales tax ($15.7M above, partly due to delayed FY18 revenue). Public safety overtime projections showed fire rescue exceeding by $6.9M (vacancies, strike teams, unbudgeted academy) and police exceeding by $9.3M (extension of shift overtime, neighborhood policing, transitional storage center security). The five-year outlook projected a $74 million revenue shortfall for FY2020, largely due to pension cost increases, police recruitment/retention investments, infrastructure fund transfers, and reserve funding. Staff noted that the outlook includes $35.8 million in critical strategic expenditures for FY2020, including public safety positions, infrastructure maintenance, and new facilities.
  • Councilmember Kate questioned the connection between FY18 unaudited ending fund balance ($227.4M vs. $225.6M in year-end report) and the $12.5M excess equity estimate. She also asked about the sales tax increase being one-time or baseline; staff clarified large amount is one-time and will contribute to excess equity. She inquired about the breakdown of police overtime for the transitional storage facility ($2M), riverbed ($500k), and patrol staffing ($2.5M). Councilmember Gomez asked about the grant writer position, firefighter attrition (steady at ~60/year), and requested more granular data for Clean SD and tree trimming schedules. Vice Chair Ward asked about the relationship between revenue variance and excess equity, and how police overtime savings from vacancies offset overtime costs. The IBA noted they are drafting a report and asked about the fiscal impact of new responsibilities at the Navigation Center; staff said it is being evaluated and will be in the mid-year report.
  • Councilmember Bree requested a consolidated view of all general fund homeless service costs for FY19 and FY20, including funds taken from the Housing Commission.
• Items 5, 6, 7: Fleet Vehicle Purchase Agreements – Fleet Operations presented three cooperative contracts for sedans/SUVs/trucks ($72M through FY21), heavy-duty chassis ($55.4M through FY22), and sewer/drain cleaning vehicles ($20.5M through FY23). The items support replacement of vehicles beyond lifecycle and advance climate action plan goals. The committee approved all three.
• Item 8: First Amendment to Insight Public Sector Technology Contract – Staff requested a $7.6 million increase (total not to exceed $10.6M) for commodity IT hardware and software. The IBA recommended splitting the increase contingent on the County of Fairfax extending the underlying cooperative contract. Councilmember Kate moved to adopt the IBA recommendation, which was approved.
• Item 12: Living Wage Ordinance FY18 Annual Report – Staff reported 352 active contracts subject to living wage, an increase from 128 in FY17. $113,900 in remedies were assessed on behalf of 23 employees for violations. A new electronic payroll reporting system was piloted to improve compliance efficiency. Goals for FY19 include mandatory contractor training, educational materials, and implementing an administrative enforcement process. Councilmembers commended the work and emphasized the importance of proactive monitoring.
• Item 13: Business Diversity Annual Report – Staff reported that FY18 SLBE participation on construction contracts reached 23%, exceeding the 20% goal. Awards to non-white firms were $77M (16% of total), the highest in recent years. Awards to female-owned businesses also increased. Staff noted ongoing outreach and proposed future policy changes (income cap increase, shelter competition, good faith effort revisions). Multiple councilmembers called for an updated disparity study, with the Chair committing to include it in budget priorities and schedule a future discussion. Councilmember Ward suggested exploring philanthropic funding for the study.
• Item 14: Prevailing Wage FY18 Annual Report – Staff reported monitoring 356 projects valued at $1.4 billion. One audit found $51,000 in underpayments, which was referred to the Department of Industrial Relations (DIR); $690 recovered so far. Apprenticeship violations increased significantly. Staff noted challenges with capacity (two vacancies, one remaining) leading to fewer site visits. The prevailing wage compliance team was transferred to Public Works for better integration. Councilmember Gomez and Vice Chair Ward asked about partnership with construction trades to enhance enforcement; staff agreed to meet with Mr. Lemon.

Key Outcomes

• The committee approved consent calendar, all recommended action items (1-4, 5-7, 9) and item 8 with the IBA’s contingent amendment.
• Chair Bree instructed staff to provide a consolidated report of all general fund homeless service expenditures and funding taken from the Housing Commission.
• The Chair committed to including funding for a disparity study in her budget priorities and placing it on the committee agenda for future discussion.
• Staff agreed to meet with Mr. Lemon to discuss prevailing wage enforcement partnerships.
• The meeting adjourned; the committee will reconvene in 2019.