San Diego Budget Committee Meeting: FY2022 Appropriation and Utility Rate Hearings - June 23, 2021
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San Diego Budget Committee Meeting: FY2022 Appropriation and Utility Rate Hearings - June 23, 2021
The Budget and Government Efficiency Committee met virtually on June 23, 2021, via Zoom due to the COVID-19 state of emergency. The committee approved the consent agenda, authorized a fleet parts procurement contract, advanced the Fiscal Year 2022 Appropriation Ordinance, set a public hearing for wastewater and water rate adjustments under Proposition 218, and received an informational report on prevailing wage compliance.
Consent Calendar
- The committee approved the consent agenda (including minutes from May 26, 2021) unanimously (3-0).
Public Comments & Testimony
- Item 5 (Wastewater rate adjustments): Sean Porter (San Diego Industrial Environmental Association) opposed the proposed rate adjustments, citing compressed timeframe, disproportionate impact on significant industrial users (SIUs), and inequitable stormwater fee treatment. Michael Dwyer (Claremont resident) requested public utilities staff be available at district forums, asked for clear language in the Prop 218 notice, and proposed phasing the single-family increase over four years. Wayne Rosenbaum (UCAN) opposed the increases, arguing that single-family rates would rise by ~48% and industrial rates by over 1400%, which would harm small businesses and environmental justice. Kevin Keppen (Otay Water District) requested a zonal rate structure for recycled water to avoid violating constitutional provisions.
- Non-agenda public comment: No callers.
- Public comment on consent agenda: No callers.
- Public comment on items 3, 4, and 6: No callers.
Discussion Items
- Authorization of Cooperative Procurement Contract with Genuine Parts Company (DBA NAPA Integrated Business Solutions): Donnie Wynn (Fleet Operations Program Manager) presented the request for a contract not to exceed $29 million over 3.5 years plus a one-year option, to supply OEM and refurbished parts for the city's fleet. The contract leverages a cooperative procurement from Sourcewell. The Independent Budget Analyst (IBA) found the item reasonable. Councilmember Montgomery Step asked about cost analysis; staff noted ongoing price monitoring and a negotiated reduction in overhead from 25% to 20%. The motion passed unanimously.
- Fiscal Year 2022 Appropriation Ordinance (AO): Rolando and Nikki (Department of Finance) presented the AO, which finalizes the FY2022 budget. Technical adjustments included removing restrictions on police overtime (per City Attorney opinion), reclassifying recreation center funds, adding the energy conservation program fund, expanding capital lease financing options to allow notes and bonds, and cleaning up language for new departments. A new delegated authority was added to expedite development impact fee refunds. IBA reviewed with no issues. Councilmember Montgomery Step raised concerns about the interaction with the community equity fund; staff and City Attorney agreed to further discuss. Councilmember Campillo noted police overtime has stayed within budget recently. Motion passed unanimously.
- Wastewater and Water Rate Adjustments, Cost of Service Study, and Proposition 218 Notice and Hearing: Adam Jones and Lisa Salaya (Public Utilities Department) presented proposed rate adjustments based on a cost-of-service study. The system revenue requirement increases by 5% in year one, then 4%, 4%, and 3% over four years. Single-family residential volume charges would increase ~33% in the first year. Fixed charges decrease for all classes. Recycled water rates, capacity fees, and industrial wastewater control program (IWCP) fees are also proposed. IBA and Stantec made six recommendations; PUD incorporated four (reallocating costs, revising inflow/infiltration allocation, etc.) but declined to update residential strength assumptions or use rate stabilization funds for further smoothing. The committee voted 3-1 to forward the item to City Council with a public hearing date in September. Chair voted against the pass-through of county water authority costs (Item 1E).
- Fiscal Years 2019 and 2020 Prevailing Wage Reports (Informational): Angel Bustos (Prevailing Wage Unit) reported on compliance activities. The unit monitors over 750 public works projects. In FY19 and FY20, $261,000 and $152,000 in underpayments were assessed, with $193,000 and $82,000 recovered respectively. Violations include failure to pay prevailing wage, falsification of payroll, and apprenticeship non-compliance. The unit is filling six vacancies. The team will transfer to the new Office of Labor Standards Enforcement in FY22. Councilmembers praised the work and asked about contractor pre-qualification, workforce diversity data, and enforcement of repeat violators.
Key Outcomes
- Authorization of fleet parts contract (Item 3): Motion passed unanimously (3-0).
- Fiscal Year 2022 Appropriation Ordinance (Item 4): Motion to adopt staff recommendation passed unanimously (3-0).
- Wastewater rate adjustment public hearing (Item 5): The committee voted 3-1 to set a public hearing for September 2021, with a separate 3-1 vote on the pass-through of water wholesaler costs (Chair opposed). Staff will finalize Prop 218 notices by July 30, 2021, and conduct district outreach through September. Industrial wastewater control program fees will be phased in at 25% cost recovery starting July 2022.
- Prevailing wage report (Item 6): No action required; received as information.
The meeting adjourned to the special meeting on July 21, 2021, at 9 a.m.
Meeting Transcript
8-21, which suspends certain requirements of the Brown Act. The committee members will be participating via Zoom and no members of the public will be in attendance at the meeting in the interest of public health and safety. In addition, this meeting is being televised and live streamed on the city's website, and the committee liaison has made arrangements for the public to comment using the Zoom webinar platform. We appreciate the public's cooperation. I will now go over the specifics of how to join the webinar and we'll give details on how the public can offer their public testimony. Vice Chair Whitburn. Okay. Councilmember Campio? Here. And I am also here. Each committee member is attending virtually. Also on the virtual meeting is Andrea Tevlin, our IBA, Charles Monica of the of the IBA, Matthew Vespy, our CFO, Brittany Bailey from the mayor's office, and Brett Bartolotta from the City Attorney's Office. 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 homepage at San Diego.gov and selecting the City TV Live Webcast blue button on the right-hand side of the page. The committee meetings will be held virtually using the Zoom webinar platform. Members of the public can offer public comment on items by accessing the Zoom webinar online using a desktop computer, laptop, tablet, or smartphone, or by calling into the meeting using a smartphone, cellular phone, or landline. The link to join the committee meeting webinar by computer, tablet, or smartphone is listed on the agenda on how to join by iPhone one tap. To join the web the Zoom webinar by telephone, you may dial 1669-254-5252 and prompted input webinar ID 161-771-9874 pound. This information is also available on the agenda and will appear on the screen during the public comment period for each item. You'll be taken in the order in which you raise your hand. If you've joined the webinar by computer, tablet, or smartphone, you will receive a pop-up notice to select the unmute your device. If you've called into the meeting by cell phone or landline, press star six on your phone to unmute yourself. We will review these instructions briefly again when the public comment period is open on an item is open. Please wait until the item you wish to speak to has been called before raising your hand to speak. If you raise your hand during a non-comment period, your hand will be lowered. When you are announced as the next speaker, please unmute yourself and offer your comments. Also, please mute the volume on your TV or computer before you begin to speak. A quorum is now present. We will now dispense with approval of the committee actions of May 26, 2021. So I have a motion to approve those actions. So moved. Motion by Vice Chair Whitburn. I will second here. And a second by Councilmember Montgomery Step. Thank you. We'll take comments and questions and have each council member register their votes, beginning with Vice Chair Whitburn. I vote yes. Councilmember Montgomery Step. Yes. Councilmember Campillo. Yes. And I am also yes. That passes unanimously. We'll now take up non-agenda public comment per temporary rule 2.6. Non-agenda public comment is an opportunity for members of the public to comment on items that are not on the agenda but within the subject matter jurisdiction of the committee. Each speaker will have two minutes. Please note per the rules of council, a maximum of eight callers is permitted per single issue. The public comment period for non-agenda public comment is now open. If you've already joined the Zoom webinar online or by phone, please raise your hand if you wish to speak. If you're watching on City TV or the live stream and would like to call into the meeting, please call 1669-254-5252 and input webinar ID 161-771-9874 pound.
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