Budget and Government Efficiency Committee Meeting - November 17, 2023
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Budget and Government Efficiency Committee Meeting - November 17, 2023
The Budget and Government Efficiency Committee met on November 17, 2023, to review the Fiscal Year 2024 First Quarter Budget Monitoring Report, the Fiscal Year 2025-2029 Five-Year Financial Outlook for the General Fund, and the Public Utilities Five-Year Financial Outlook. The committee also heard public comments on non-agenda items and approved consent agenda items. The meeting highlighted significant structural deficits, rising personnel costs, and concerns about transparency in budget decisions.
Consent Calendar
- Approval of Committee Actions of October 18, 2023: The committee approved the minutes of the previous meeting with a vote of 3 in favor, 1 absent. No public comments were made on the consent agenda.
Public Comments & Testimony
- Item 1 (Consent Agenda): A speaker expressed concern about cybersecurity and data security, noting that data can always be hacked. Another speaker raised issues about worker rights with subcontractors for Zenzar Technologies, which was previously discussed.
- Non-Agenda Public Comment: Several speakers addressed homelessness, police overtime, surveillance technology, and the city's fiscal policies. One speaker urged better use of vouchers for housing and case management. Another criticized the city's spending on homelessness, arguing it has not been effective due to underlying drug use. A third speaker expressed concern about the city's reliance on overtime and the need for fiscal responsibility. A fourth speaker noted the importance of cybersecurity and reducing surveillance technology.
- Item 2 (First Quarter Budget Report): Speakers commented on police overtime, water rate increases, and the need for subsidy programs for low-income residents. One speaker argued that the city is overspending and not protecting citizens effectively.
- Item 3 (Five-Year Financial Outlook): A speaker suggested putting future employees on Social Security and leasing Balboa Park land for affordable housing. Another speaker criticized the use of ARPA funds and salary increases, arguing they are not sustainable. A third speaker objected to the outlook's presentation, suggesting that the city should not project spending on new facilities without funding.
- Item 4 (Public Utilities Outlook): A speaker criticized the presentation for hiding costs and called for cumulative cost projections. Another speaker raised concerns about water fluoridation and chemical additives. A third speaker asked about the cost neutrality of transferring street restoration work from Transportation to Public Utilities.
Discussion Items
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Fiscal Year 2024 First Quarter Budget Monitoring Report (Item 2): The Department of Finance presented revenue projections below budget by $4.4 million, driven by lower sales tax and TOT, offset by higher property tax receipts. Public safety overtime is projected to exceed budget: Fire Rescue by $1.7 million and Police by $7.8 million (adjusted to $5.2 million due to salary increases not factored in). The IBA noted that the city is changing OPEB funding methodology, which will save $10.2 million in FY24 but increase long-term costs. Councilmember Moreno expressed frustration that the OPEB changes and ARPA interest earnings ($3.2 million) were not communicated to the council during the budget process. Councilmember LaCava stressed the need for confidence in budget numbers and the importance of public safety. The committee took no action as this was an information item.
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Fiscal Year 2025-2029 Five-Year Financial Outlook (Item 3): The outlook projects a baseline shortfall of $136.8 million in FY25, increasing to $171.9 million when including new facilities and planned commitments. The deficit is driven by the end of one-time ARPA funding ($52 million in FY24) and rising personnel costs. Mitigation options include using $56.5 million in excess equity, suspending infrastructure or reserve fund contributions, and potential revenue from Measure C (litigation) and a future trash fee. The IBA noted that the city faces a structural imbalance and will need to consider new revenue or service cuts. Committee members discussed the timeline for implementing the People's Ordinance (trash fee) and the need to address the deficit. No action taken.
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Public Utilities Fiscal Year 2025-2029 Five-Year Financial Outlook (Item 4): The outlook anticipates rate increases 1-2% higher than previously forecasted, starting in FY26, driven by personnel costs, regulatory requirements, and capital needs. Water rates are projected to increase by 11.8% in FY26, and wastewater by 7%. The department noted that the increases are necessary to maintain financial stability and meet state mandates. The IBA highlighted that financial indicators like cash on hand and debt service coverage are below targets even with the proposed rate hikes. Councilmember LaCava asked about mitigation options; the department stated that the only lever would be to reduce services or delay capital projects. No action taken.
Key Outcomes
- Approval of Consent Agenda: The committee unanimously approved the minutes of the October 18, 2023 meeting (3-0, one absent).
- No votes taken on information items: Items 2, 3, and 4 were informational only; no motions were made.
- Upcoming Reports: The IBA will release detailed analyses of the first quarter report, five-year outlook, and public utilities outlook on December 5, 2023.
- Next Meeting: The committee will next meet on December 6, 2023, at 9 a.m.
Meeting Transcript
Good morning, everyone. Welcome to the budget and government efficiency committee meeting of November 17th, twenty twenty-three. Our committee's manager, Ty Birch will go over instructions for today's meeting. Thank you very much, Council President Pro Tem Montgomery Step. While members of the public are able to attend today's 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 hand 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 bare meeting management between the two platforms and ensure the committee is able to manage and conduct safe business. We appreciate the public's cooperation. Vice Chair Marino. Council Member Lakava. Present. Council Member Lee. And Chair of Council President Pro Tem Montgomery Step. I am here. Also attending the meeting today, Charles Monica and Lisa Byrne from the Independent Budget Analyst Office. Uh, Brett Bardolata from the City Attorney's Office, Matt Besby, Chief Financial Officer, and Matt Yagan, Deputy Director of Policy. Um, I'm sure he's walking in today for Mayor Todd Gloria. Uh, 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 the speaker's electron at the front of the room. Please do so in a timely manner to ensure proper main 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 web page. If you need to participate by phone, you may dial 1669-254-5252 and input webinar ID one six zero three five six nine eight five five pounds. This information is also available on the agenda and 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 queue closes. The queue will close when the last virtual speaker finishes speaking or five minutes after in-person testimony concludes, whichever occurs first. Please note that if you're watching via C TV 24 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 tapping the raise your hand icon. Or if you're a call-in participant, star nine on your cell phone or landline. If you raise your hand during a non-comment period, your hand will be lowered. Chair. Thank you, Tyler, for reviewing those instructions for the benefit of the public. A quorum is now present. We will now dispense with the approval of the committee actions of October 18th, 2023. Tyler, please proceed. Thank you very much, Chair. The public comment period for the past committee actions of October 18, 2023 is now open for individuals that would like to speak on the past committee actions. Chair, we do not have any individuals that have submitted slips and chambers for the past actions, but we have one individual in the virtual queue. Again, this is for the past committee actions of October 18th, 2023. Each speaker will have one minute, and we will begin with the original and I'll begin the five-minute timer for other individuals if they want to raise their hand for the past actions. And you may unmute yourself. You'll have one minute. Sorry, the um the pro um Zenzar technologies and whatnot. Um, with all the stuff that's happening with the Cardinus and Whitburn and just the city and um other areas, it's kind of you know, um seeming though that you know all the money that we tend to spend or projects that we tend to um, you know, or or I can't even talk right now. Um money given out to different entities for different things, seem to be doing it in abusive manner. Um, and so I mean, even you know, uh the mayor putting things in the budget that shouldn't be there until they're approved and different things, but you know, it's just it's showing that a lot of the things you guys are doing is you know abusing your authority and the power that you have there.
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