Budget and Government Efficiency Committee Meeting - May 24, 2023
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Budget and Government Efficiency Committee Meeting - May 24, 2023
The Budget and Government Efficiency Committee met on May 24, 2023, to discuss water rate adjustments and a biannual update to the city's debt policy. The committee approved the consent agenda with one dissenting vote on a benefits consulting contract, forwarded water rate proposals to the full council, and approved the debt policy update after amending variable rate language.
Consent Calendar
- Item 1: Extension of securities clearance and safekeeping services contract with U.S. Bank – approved unanimously after public testimony.
- Item 2: Third amendment to benefits consulting, brokerage, and actuarial services contract with Buck Global LLC – approved with Councilmember Lacava registering a no vote; motion passed unanimously otherwise.
Public Comments & Testimony
- Non-Agenda Public Comment: Blair Beekman spoke about reducing new surveillance technology (ALPRs) in the FY24 budget and called for smaller, clearer tech questions around street repairs and Vision Zero. He emphasized civil protections and reimagining public safety.
- Item 3 – Water Rates: Michael Dwyer expressed frustration that the rate proposal increased 1% over five months from the December presentation. He calculated a two-dollar difference in monthly bills under the new structure. Blair Beekman asked about subsidies for low-income community members.
- Item 4 – Debt Policy: Lori Soldania argued that $3.3 billion in debt is "outrageous" and urged the city to focus on good debt like public power rather than bad debt such as the Ash Street building. Blair Beekman mentioned San Jose’s balanced budget efforts.
Discussion Items
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Item 3 – Water Rate Adjustments, Cost of Service Study, and Proposition 218 Notice:
- Public Utilities Department (Juan Guerrero, Lisa Salaya, Chris Ojeda) presented proposed water rate increases for FY 24-25 to fund infrastructure, operations, and the Pure Water program. The City’s water rates would remain below regional average ($93.67/month vs. $91.83). Tiers reduced from four to three for single-family residential to reflect conservation.
- The Independent Budget Analyst (Jordan Moore) and Stantec presented their review, noting the cost of service study was consistent with industry standards. Recommendations included updating peaking factors and allocation methodologies, most of which were incorporated.
- Committee discussion covered conservation efforts, impacts of the Pure Water program, low-income assistance (572 customers helped through LIWAP, plus over 20,000 through COVID relief), and tier structure. Councilmember Lee asked about household size assumptions and economic impacts on middle-income residents.
- Staff requested forwarding to city council to set a public hearing date; no rate approval at this stage.
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Item 4 – Biannual Update of the City Debt Policy:
- Department of Finance (Richard Eyre, Marisol Velden Vinos) presented updates including merger of debt management into Finance, clarifications on interfund loans, and language allowing variable rate debt under special circumstances.
- IBA (Charles Modica) supported additional disclosure but suggested clarifying that variable rate debt be short-term only and requesting a summary of interfund loans.
- Debate centered on Section 5.4 (variable interest rate financing). Councilmember Moreno opposed the language, fearing it would encourage future reliance on variable rate debt. Councilmember Lacava moved to strike all amendments to Section 5.4, preserving existing policy. Councilmember Lee preferred clarifying language rather than striking.
- Motion to remove Section 5.4 changes passed 3-1 (Moreno, Lacava, Montgomery Step in favor; Lee dissenting). The amended debt policy was then approved on that motion.
Key Outcomes
- Consent Agenda: Items 1 and 2 approved; Item 2 with Councilmember Lacava’s no vote.
- Water Rate Adjustments: Committee voted unanimously to forward the item to full city council to set a Proposition 218 public hearing date (anticipated in September 2023) and to authorize the notice. Public outreach will precede the hearing.
- Debt Policy Update: Committee approved forwarding the biannual debt policy update to full city council with all proposed changes except for the amendments to Section 5.4 (variable interest rate language). The motion passed 3-1. Staff will provide a summary of interfund loans from the past year for full council consideration.
Meeting Transcript
Good morning and welcome to the budget and government efficiency committee meeting of May 24th, 2023. Our committee's manager Ty Birch will go over instructions for today's meeting. Thank you very much, Council President Proto Montgomery Step. While members of the public are able to attend the meeting in person, this meeting is being televised and live streamed on the city's website, and council administration will continue to make arrangements for the public to comment using the Zoom webinar platform. Members of the public who wish to provide virtual testimony must enter the virtual speaking queue by raising their hands before the virtual queue closes. The queue will close when the last virtual speaker finishes speaking or five minutes after in-person testimony concludes, whichever occurs first. This will allow for better meeting management between the two platforms and ensure the committee is able to manage and conduct city business. We appreciate the public's cooperation. Thank you. I will now call the budget and government efficiency committee meeting of Wednesday, May 24th, 2023 to order. Tyler, please call the roll. Vice Chair Moreno. Councilmember Lacava. Present. Councilmember Lee. And our chair, Council President Pro Tem Montgomery Step. Here. Also attending the meeting today. We have Charles Monica and Lisa Byrne from the Independent Budget Analyst Office. We have Brett Bardelata from the City Attorney's Office. We have Matt Yagan from uh the deputy director of policy for uh mayor Todd Gloria. We also have Matt Besby, our chief financial officer here. Tyler, please continue with public comment instructions. Thank you very much, Chair. If you are in person, please complete a speaker slip located at the entrance of chambers and place it on top of the box indicated at the speaker's lecture and at the front of the room. Please do so in a timely manner to ensure proper meaning management. In-person testimony will conclude before virtual testimony begins. Members of the public can also join the webinar by computer tablet or smartphone by accessing the link, which is listed online in the preamble language of the agenda on the city's webpage. If you need to participate by phone, you may dial 1669-254-5252 and input webinar ID 160356-9855 pound. This information will appear on the screen during the public comment period for each agenda item. Members of the public who wish to provide virtual testimony must enter the virtual speaking queue by raising their hand before the QQ before the queue closes. The queue will close when the last virtual speaker finishes speaking or five minutes after in-person testimony. It concludes whichever occurs first. Please note that if you're watching on C T V 24 or online, there may be a delay, so please participate via the audio on your phone and mute your TV or computer when it's your turn to speak. If you wish to speak on a particular item, please wait for that item to be called and then raise your hand to speak by selecting the raise your hand icon, or if you're a calling participant, press star nine on your cell phone or landline. If you raise your hand during a non-comment period, your hand will be lowered. Thank you, Tyler, for reviewing those instructions for the benefit of benefit of the public. Tyler, please proceed. If you're watching on C T B or the live stream, would like to call in, please dial 1669-2545252. Input webinar ID 1603569855 pound. Chair, we don't have any individuals that have indicated that they wish to speak on the committee actions, so that'll conclude public testimony. Okay, we will now vote on the approval of the committee actions of uh April 12th, 2023. If there is no discussion, do I have a motion to approve the committee actions? Great. We have our Vice Chair Moreno that has moved uh the committee actions. Do I have a second? Councilmember Lee. Uh we will now take the roll. Councilmember Lee, if you could use your voting screen. Okay.
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