Budget and Government Efficiency Committee Meeting - October 14, 2020
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Budget and Government Efficiency Committee Meeting – October 14, 2020
The Budget and Government Efficiency Committee of the San Diego City Council met on Wednesday, October 14, 2020, via Zoom. The meeting was called to order by Chair Bree. Councilmembers Campbell, Montgomery Steppe, and Vice Chair Kate were present. The committee approved the minutes from September 16, 2020 unanimously, and then took up four agenda items: the annual treasurer's investment policy, two cooperative procurement agreements for cellular services and radio systems, and the fiscal year 2020 year-end financial performance report.
Consent Calendar
- Approval of committee actions from September 16, 2020. Motion by Councilmember Campbell, seconded, passed unanimously.
Public Comments & Testimony
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Non‑agenda public comment:
- Lewis Rotolico criticized the city for relying on seller‑supplied appraisals for 101 Ash Street and buyer‑supplied valuations for the Mission Valley stadium site, arguing that corporate interests harm taxpayers and that the city needs its own appraisals and criminal prosecutions.
- Martha Wells questioned how a budget could be based on missing Mission Bay funds and absent financial audits, asserting that the city cannot claim to have balanced numbers without those audits.
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Item 1 (Investment Policy):
- Laura Walsh (Surf Rider Foundation) strongly encouraged the committee to consider fossil fuel divestment and a socially responsible investment policy. She noted that the city tripled its investments in Chevron and Exxon from $30 million to almost $90 million within three months of a city council request for divestment, and pointed to actions by other entities.
- Martha Wells (again) urged paying off bonds rather than rolling them over, and called for a state audit.
- Marie Chen (San Diego 350) supported fossil fuel divestment, stating that it reduces greenhouse gas emissions, lowers investment risk, and aligns with the city's climate action plan. She advocated for ESG strategies.
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Item 4 (FY2020 Financial Report):
- Martha Wells expressed disbelief in the city's financial reporting without audited financial statements, alleging hidden issues.
- Michael Zutet (San Diego Municipal Employees Association) noted that the city routinely finds roughly $20 million more than projected between May and October (this year $27 million), and argued that withdrawing a 3% cost‑of‑living adjustment for employees was unnecessary. He urged addressing the 15% vacancy rate.
Discussion Items
Item 1 – Annual Presentation of the City Treasurer's Investment Policy and Delegation of Authority to Invest Funds Kent Morris (Chief Investment Officer) and Manny Labrinus (Senior Investment Officer) presented the annual update. As of August 31, 2020, the pooled fund had a market value of $2.33 billion and an annualized yield of 1.76%. Two minor policy changes were proposed: updating benchmarks to Bloomberg‑Barclays indices (equivalent to previous ones) and removing the prohibition against investing in U.S. government securities that could result in zero or negative interest rates, in compliance with SB 988. The Investment Advisory Committee had unanimously approved the changes. Staff requested a one‑year delegation of investment authority beginning January 1, 2021. Public comment raised calls for fossil fuel divestment. Councilmember Campbell made a motion to approve, seconded by Councilmember Montgomery Steppe. The motion passed unanimously.
Item 2 – Authorization for As‑Needed Citywide Cooperative Agreements with AT&T, Verizon, and T‑Mobile for Cellular Equipment and Services Jonathan Banke (CIO) and Denise McConnelli (Deputy Director, Department of IT) requested approval of a resolution for cooperative agreements not to exceed $20 million through June 30, 2024. The contracts allow departments to select carriers based on coverage and reliability, support digital transformation (e.g., Get It Done app), and provide public safety communications. The COVID‑19 pandemic increased reliance on cellular services. The contract was selected after evaluating 14 cooperative options. No public comment was received. Councilmember Campbell made a motion to approve, seconded by Councilmember Montgomery Steppe. The motion passed unanimously.
Item 3 – Cooperative Procurement Agreement with Motorola Solutions for Radio Systems Infrastructure Network, Equipment, and Support Services Jonathan Banke and Denise McConnelli requested approval of a five‑year cooperative agreement not to exceed $25 million. The city’s radio system supports public safety and regional interoperability. The new contract aligns with the County of San Diego's network and includes an appropriation adjustment of $1.575 million for water‑damaged radios and FCC compliance. No public comment was received. Councilmember Campbell made a motion to approve, seconded by Councilmember Montgomery Steppe. The motion passed unanimously.
Item 4 – Fiscal Year 2020 Year‑End Financial Performance Report (Informational) Rolanda Trevell (CFO), Matt Fetsky (Finance Director), Nikki Shalfont, and Sarah Mayen presented the report. FY2020 general fund revenues (excluding CARES Act) were $1.45 billion, a $38 million (2.5%) decrease from FY2019, driven entirely by COVID‑19 impacts in the last four months. Compared to the May revised projections, actual revenues were $23.8 million (1.6%) higher and expenditures were $3.5 million (0.3%) lower, resulting in a net improvement of $27.3 million. Key revenue variances: property tax lower by $1.6 million (collection rate dropped to 98.6%), sales tax higher by $6.7 million (due to business sector volatility and state deferrals), TOT higher by $1.8 million (partial reopening), franchise fees higher by $2.2 million (increased trash tonnage), and departmental revenues higher by $16 million (largely from Mission Bay properties ($4.4 million) and cannabis taxes). Expenditure variances included $5.8 million in police overtime due to civil unrest. After achieving the reserve target of 15.5% (contributing $5 million to emergency reserve and $7.8 million to the stability reserve), $14.5 million in excess equity remains available for FY2021‑22. Staff noted that CARES Act funds provided $84.8 million to the general fund. The IBA supported using the excess equity for future shortfalls. Councilmembers praised the accuracy of projections given uncertainty, but acknowledged ongoing challenges (pension cost increases, unknown federal stimulus, reopening pace). Michael Zutet’s concerns about conservative revenue estimates and lack of employee raises were discussed. No vote was required; the item was received as information.
Key Outcomes
- Unanimous approval of the city treasurer's investment policy and delegation of authority for 2021 (Item 1).
- Unanimous approval of the cellular equipment and services cooperative agreements up to $20 million (Item 2).
- Unanimous approval of the Motorola radio systems cooperative agreement up to $25 million (Item 3).
- FY2020 year‑end financial report presented and discussed; $27.3 million favorable variance vs. projections, with $14.5 million held as excess equity for future budgets. No formal action required (Item 4).
- The committee will next meet on Friday, November 13, 2020 at 9:00 a.m.
Meeting Transcript
A lover of the lights with a chase turn down the alley in older the hill to steal her will she was hot as Georgia When the eight crowd came to adore her brain Save a Jenny alone Leave Virginia Lone She's not like you she's not like you should see back in the city poetry and jewels broke all the she was high end the Georgia pantry makeup and use over to build the genuine law she's not like you're not like you some sunny day when the hands of time is that the way you understand why it was so hard to run away she's a loser she's a good giver and she still finds good where no one could you are the woman more of the money cattle and rust diamonds and dust So leave Virginia alone Leave Virginia Lord She's not like you and me she's not like you Virginia alone Virginia Lord, she's not like you, she's not like you told me she was hollow It's far from what I see She's more than just the daughter of a broken mind to me She told me she was shallow Ever Swan Softly I could only be the boat that leads her to the sea Lonely is her favorite place when she feels hurt she let's get sometimes she's alone sometimes she's broken sometimes she's closed sometimes she's open lonely is a She told me she was hollow It's far from what I see She's more than just the daughter of a broken mind to me She told me she was shallow A rivers run so deep If I could only be the boat that leads her to the sea Lonely is a favorite place to be When she feels hurt she let's get sometimes she's a loss Sometimes she's broken Sometimes she's closed Sometimes she's open Lonely is a favorite place to be She told me she was falling I offered her my heart But she only finds a comfort in no knowing just how hard she's gonna lie I told her she was special She almost let me in But she couldn't bear the thought of digging up the heart that she'd been buried Lonely is a favorite place to be When she feels a hurt she lets leave Sometimes she's alone Sometimes she's broken Sometimes she's closed Sometimes she's open Lonely is a faith place to be Lonely is a fan only I could change it If I could only save her Lonely is a fate Only I could change it If I could only save her Sometimes she's alone Sometimes she's broken Sometimes she's closed Sometimes she's open Sometimes she's slow time she's on fire Mostly she's everything I decide Lonely is a favorite place to be Lonely is a favorite place to be She told me she was hollow We've been testing you and you fail To see how long that you could say was the truth but you bail And I don't think you even recognize the loss of control I don't think you even see it in yourself See every one of us is counting by some we didn't roll and the loser is the last ask for help be afraid very do anyway Stage belongs to you and you feel like a star you can bark and snap like a dog man who just tuned your guitar I don't think you even recognize a kid in the wings and I don't think you even see her in yourself to look to you for what you do with all her delicate dreams But you're too terrified to be of any hell be afraid very afraid to anyway to anyway Be afraid very afraid to anyway To anyway We don't take the quest we won't shut up and sing Travel truth enough you'll find around We've been testing you And you fail to see how long that you could hold it in before you scream But you only exhale I don't think you even recognize the sound of your voice When it's blasting to the speakers in the sky And if you were add up to nothing and you're making a choice to sing a cover when we need a battle cry Be afraid be very afraid To anyway Do anyway Be afraid be very afraid To anyway Do anyway Do it anyway. Do it anyway. Do it anyway. Do it anyway. I heard them calling in the distance. So I'll pass my same center and all the trouble. I cuts with my two hands. Alone we traveled on with nothing but a shadow. We fell far away. Oh this now to the sun goes down. So it's not just made me wonder about their facts. And as I let's around I began to notice that we were not safe like the host is that sun goes down. Hold your host is now until the sun goes down. We sleep up to the sun goes down electronically. We appreciate the public's cooperation. I will now call the budget and government efficiency committee meeting of Wednesday, October 14th, 2020 to order. Each council member is attending virtually via Zoom. Those on teleconference include Council, myself, Council President Pro Tambree, Council Member and Vice Chair Kate, Councilmember Montgomery Step, and Councilmember Campbell. Also on the Zoom call is independent budget analyst Andrea Tevlin, Brett Bartalata from the Office of the City Attorney, Rolanda Charvel, our chief financial officer. I also saw Matt Vespie from our finance department, Angela Colton from the office of the IBA, and am I missing anybody? The public may call in following the instructions posted on the agenda by calling 619-541-6310 and entering conference ID 877-861 pounds to be placed in the queue for public comment. You should do this when the item you wish to speak to is introduced. Please do not call in prior to that time. Our consultant of the committee will announce when the public comment period is open for an item, and a slide will go up on City TV. When the phone queue is empty, the public comment period will be closed. This same process will be used for each agendized item. When you are in the queue, you will be able to hear the meeting and all others that are providing comment. Well, you will know that it is your turn to speak when you hear the system prompt saying your phone has been unmuted. When you hear the prompt, immediately state your name and make your comment. Then hang up. Each speaker will have one minute. Also, please mute the volume on your TV or computer before you begin to speak. If you call in during a non-comment period, your call will not be taken. Please monitor the meeting and ensure you are calling at the appropriate time. The public may view the meetings on public television on City TV channel 24 for Cox Communication and Time Warner Cable or Channel 99 for ATT or view the meeting online by going to the City Council Committee's home page at Sandiego.gov and selecting the T City TV Live Webcast blue button on the right side of the page. A quorum is now present. We will now dispense with the approval of the committee. Active the actions before you for approval are for the meeting of September 16th, 2020. Do I have a motion to approve the actions? Moved. Okay. Great. I have a motion by Councilmember Campbell. I will second it. We will now have each council member register their vote. Councilmember Campbell. Yes. Councilmember Montgomery Step.
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