San Diego Budget & Government Efficiency Committee Meeting – November 2, 2021
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San Diego Budget & Government Efficiency Committee Meeting – November 2, 2021
The Budget and Government Efficiency Committee met virtually on November 2, 2021, to review the fiscal year 2021 year-end financial performance, approve financing measures for water and sewer utilities, and authorize a major contract for public safety radio modernization. All agenda items passed unanimously.
Consent Calendar
- Approval of Committee Actions (September 15, 2021): Unanimously approved.
- Consent Agenda Items:
- Annual presentation of city treasurer’s investment policy and delegation of authority to invest funds.
- First amendment to 72 Hour LLC DBA National Auto Fleet Group Cooperative Contract.
Public Comments & Testimony
No members of the public provided testimony on any agenda item. Zero callers were in the queue for each public comment period.
Discussion Items
Fiscal Year 2021 Year-End Financial Performance Report (Information Item)
Rolando Charvel, Director of Finance and City Controller, and Chris Purcell presented the unaudited year-end results compared to third-quarter projections.
- Revenues: $45.3 million higher than projected, driven by property tax ($6.6M increase to $641.4M), sales tax ($19.8M increase to $303.7M), transient occupancy tax (TOT) ($9.2M increase to $68.1M), and departmental revenue ($11.7M increase to $422.1M).
- Expenditures: $22.1 million lower than projected, largely due to $17.9M savings in contracts (including a $3M voter registration reimbursement, $2.2M in corporate master leases, and a $4.9M technical adjustment for fleet charges).
- Net Effect: A projected $52.2M deficit turned into $15.2M in excess equity.
- Reserves: Combined emergency and stability reserves at $2,045.6 million (FY2020 levels). No additional contributions were budgeted for FY21.
- COVID-19 Impact: $148 million in federal coronavirus relief funds were used to cover pandemic-generated revenue shortfalls.
- Future Risks: Ongoing uncertainty from the Delta variant, potential impact of Proposition B, and reliance on leisure TOT recovery until group travel and conventions return.
The Independent Budget Analyst (IBA) noted the positive variances but cautioned about ongoing uncertainty, adding that the year-end report frees up American Rescue Plan Act (ARPA) funds for future years. The IBA will release a detailed analysis on October 21.
Water Revenue Commercial Paper Program Extension and Letter of Credit Extension
- Action: Approved an ordinance to extend the water utility‑backed commercial paper (CP) program for three years.
- Details: The program supports timely funding of the water capital improvement program (CIP). The current letter of credit (LOC) with Bank of America expires December 2021; the new three‑year LOC costs approximately $880,000 annually ($2.7 million total). The authorized capacity remains $250 million.
- Legal Support: Extended the as‑needed contract with Hawkins Delafield & Wood for CP legal counsel (not to exceed $30,000 per fiscal year).
- IBA: Supported the extension as a continuation of an existing program.
Sewer Utility FY2022‑23 Financing Measures
- Action: Approved a financing plan to issue long‑term sewer revenue bonds for the sewer utility’s capital improvement program (CIP), excluding Pure Water.
- Bond Issuance: First issuance expected in Q3 of FY2022; second issuance 8–12 months later. Total borrowing up to $230 million at an estimated 3% interest over 30 years, with annual debt service of approximately $12 million.
- Pure Water Project: The sewer utility’s share of Phase 1 is $674 million (45% of total cost). $660 million in State Revolving Fund (SRF) loans are secured, with two loans totaling ~$400 million expected to be executed by end of 2021. All eight loan agreements are anticipated within 6–8 months.
- Cash Flow Risk: If SRF loan reimbursements are delayed, the utility may need interim cash‑flow financing of $100–$300 million, likely in FY2023 or FY2024. Debt management will return to council if needed.
- IBA: Noted consistency with the cost‑of‑service study used for recent sewer rate approval.
Agreement with Motorola Solutions Inc. for Public Safety Radio Modernization
- Action: Approved a 10‑year contract with Motorola Solutions (not to exceed $51.05 million) to replace end‑of‑life public safety radios and provide maintenance and support.
- Scope: Replacement of 5,000 portable radios and 35 dispatch stations in FY2022 ($28.5M) and 2,100 mobile radios in FY2023 ($14M). The system currently handles ~20,000 911 calls per week with a uptime standard of <6 minutes downtime per year.
- Procurement: Selected via competitive RFP (issued Nov 3, 2020) including field and bench testing by first responders.
- Regional Interoperability: Modern radios are required to maintain compatibility with county, school district, healthcare, and other regional partners.
- Funding: City Council authorized up to $56.4 million for priority capital needs (Aug 2, 2021). Spending is contingent on budget availability.
- IBA: No comments; acknowledged department briefings.
Key Outcomes
- Consent Agenda: Approved unanimously (Vice Chair Whitburn motion, Councilmember Campillo second).
- FY2021 Year-End Report: Received as information; no action required.
- Water CP Program Extension: Approved unanimously (Vice Chair Whitburn motion, Councilmember Campillo second).
- Sewer Financing Plan: Approved unanimously (Vice Chair Whitburn motion, Councilmember Campillo second).
- Motorola Radio Contract: Approved unanimously (Councilmember Campillo motion, Chair Kate second).
Meeting Adjourned: The next meeting is scheduled for Wednesday, November 3, 2021 at 9:00 a.m.
Meeting Transcript
Chair, we do have a quorum if you're right. Perfect thank you. Mary Ann. Good morning. Per California government code section 54953G, added by Assembly Bill 361, which allows the city to use teleconferencing and to provide the public an opportunity to address the city council committee via call-in option or an internet-based service option. The Q member 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'll go over the specifics of how to join the webinar and we'll give details on how the public can offer their public testimony. I will now call the budget and government efficiency committee meeting of August October 13th, 2021 to order. And I will now call the role, starting with Vice Chair Whitburn. Sure. Councilmember Campillo. Here. And I am also here, and Councilmember Montgomery Steph will not be in attendance today. Each committee member is attending virtually. Also on the virtual meeting is Andrea Tellin, our independent budget analyst, Charles Monica from the IBA, Matthew Vespie, our chief financial officer, Brittany Bailey from the mayor's office, and Brett Bartelotta from the City Attorney's Office. The public may view the meeting on public television on City TV channel 24 for Cox Communication and Spectrum or Channel 99 for ATT Uverse. Or view the meeting online by going to the City Council Committee's homepage at Sandieago.gov and selecting the City TV Live webcast 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, cell 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 tab. To join the Zoom webinar by telephone, you may dial 1669-254-5252. When 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. When I introduce the item you'd like to comment on, you will raise your hand by either tapping the raise your hand button on your computer, tablet, or smartphone, or by pressing star nine on your phone. You'll be taken in the order in which you raise your hand. You may only speak once on a particular item. When our committee consultant Anthony George indicates it is your turn to speak, he will call you by your name as appears on the Zoom webinar attendee list, or he will read out the last four digits of your phone number if you've called into the meeting. That is how you will know it is your turn to speak. If you've joined the webinar by computer, tablet, or smartphone, you will receive a pop-up notice to select to 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 for 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 announced as the next speaker, please 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 the approval of the committee actions of September 15th, 2021. So I have a motion to approve those actions. So moved. We have a motion by Vice Chair Whitburn. Do you have a second? Oh second. Second by Council Member Campia will now take each individual councilmember's vote, starting with Vice Chair Whitburn. Yes. Councilmember Campillo. Yes. And I am also yes.
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