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HomeMy WebLinkAbout02/05/2021Staff: Committee Members: Chris Huot, Assistant City Manager Councilmember, Andrae Gonzales – Chair Councilmember, Ken Weir Councilmember, Eric Arias SPECIAL MEETING OF THE BUDGET AND FINANCE COMMITTEE of the City Council - City of Bakersfield Friday, February 5, 2021 9:00 a.m. City Hall North 1600 Truxtun Avenue, Bakersfield, CA 93301 First Floor, Conference Room A AGENDA SPECIAL NOTICE Public Participation and Accessibility February 5, 2021 Budget and Finance Committee Meeting On March 18, 2020, Governor Gavin Newsom issued Executive Order N-29-20, which includes a waiver of Brown Act provisions requiring physical presence of the Committee members or the public in light of the COVID-19 pandemic. Based on guidance from the California Governor’s Office and Department of Public Health, as well as the County Health Officer, in order to minimize the potential spread of the COVID-19 virus, the City of Bakersfield hereby provides notice that as a result of the declared federal, state, and local health emergencies, and in light of the Governor’s order, the following adjustments have been made: 1.The meeting scheduled for February 5, 2021 at 9:00 a.m. will have limited public access. 2.Consistent with the Executive Order, Committee members may elect to attend the meeting telephonically and to participate in the meeting to the same extent as if they were physically present. 3.The public may participate in each meeting and address the PSVS Committee as follows: •If you wish to comment on a specific agenda item, submit your comment via email to the City Clerk at City_Clerk@bakersfieldcity.us no later than 5:00 p.m. the Wednesday prior to the Committee meeting. Please clearly indicate which agenda item number your comment pertains to. •If you wish to make a general public comment not related to a specific agenda item, submit your comment via email to the City Clerk at City_Clerk@bakersfieldcity.us no later than 5:00 p.m. the Wednesday prior to the Committee meeting. •Alternatively, you may comment by calling (661) 326-3100 and leaving a voicemail of no more than 3 minutes no later than 5:00 p.m. the Wednesday prior to the Committee meeting. Your message must clearly indicate whether your comment relates to a particular agenda item, or is a general public comment. If your comment meets the foregoing criteria, it will be transcribed as accurately as possible. •If you wish to make a comment on a specific agenda item as it is being heard, please email your written comment to the City Clerk at City_Clerk@bakersfieldcity.us. All comments received during the meeting may not be read, but will be provided to the Committee and included as part of the permanent public record of the meeting. 1.ROLL CALL 2.ADOPT FEBRUARY 18, 2020 AGENDA SUMMARY REPORT 3.PUBLIC STATEMENTS 4.NEW BUSINESS A.Discussion and Committee Recommendation Regarding Recycling Pilot Program – Huot/Fidler B.Discussion and Committee Recommendation Regarding Adoption of the 2021 Committee Meeting Schedule – Huot 5.COMMITTEE COMMENTS 6.ADJOURNMENT     S:\Council Committees\2020\Budget and Finance\02_February Page 1 CH:pa   Committee Members Staff: Chris Huot      Councilmember, Andrae Gonzales – Chair  Assistant City Manager Councilmember, Willie Rivera Councilmember, Ken Weir SPECIAL MEETING OF THE BUDGET AND FINANCE COMMITTEE Tuesday, February 18, 2020 12:00 p.m. City Hall North – Conference Room A 1600 Truxtun Avenue, Bakersfield, CA 93301 AGENDA SUMMARY REPORT The meeting was called to order at 12:00 p.m. 1. ROLL CALL Committee members Present: Councilmember, Andrae Gonzales, Chair Councilmember, Willie Rivera Committee member absent: Councilmember, Ken Weir City Staff Present: Chris Huot, Jacqui Kitchen, Assistant City Managers Joe Conroy, Public Information Officer Brianna Carrier, Anthony Valdez, Administrative Analysts III Nathan Gutierrez, Management Assistant Greg Terry, Interim Chief of Police Joshua Rudnick, Deputy City Attorney Randy McKeegan, Finance Director Tera Loveless Ortiz, Assistant Finance Director Greg Pronovost, Technology Services Director Stuart Patteson, Assistant Public Works Director Rob Voyles, Public Works Operations Manager Sean Cacal, Public Works General Services Superintendent Dianne Hoover, Recreation and Parks Director Fidel Gonzales, Recreation and Parks Park Planner Rajan Mistry, Recreation and parks, Business Manager Christopher Boyle, Development Services Director Nina Carter, Community Development Coordinator Jason Cater, Economic Development Planner Additional Attendees Present: Members of the Public /s/ Chris Huot DRAFT    S:\Council Committees\2020\Budget and Finance\02_February Page 2 CH:mc:pa 2. ADOPT March 26, 2018 AND February 27, 2019 AGENDA SUMMARY REPORT The Reports were adopted as submitted. 3. PUBLIC STATEMENTS Jim Wheeler with Flood Ministries stated he would like to partner with the City’s Code Enforcement Rapid Response Team (RRT) to provide aid to the homeless individuals encountered during the removals of encampments. This will allow for ongoing assistance with individuals they have establish connections with. Alex Vega with Ventura County Community Development Corp. (VCCDC) stated he supported the Home Funding Application for low income families. 4. NEW BUSINESS A. Discussion and Committee Recommendation Regarding Annual Audit Reports Ending FY 2019 Finance Director McKeegan provided a summarization of the audit reports included in the packet and presented the financial statements and associated reports ending FY 2019, noting that there were no findings and recommendations for the year. The reports discussed were:  Comprehensive Annual Financial Report (CAFR);  Agreed Upon Conditions Report for the fiscal year;  Auditor Communication with Those Charged with Governance (SAS 114 Letter);  Independent Auditors Report: Compliance with Contractual Requirements relative to the Bakersfield Subregional Wastewater Management Plan;  Independent Auditors Report: Appropriations Limit Worksheet (GANN Limit) of the City of Bakersfield;  Independent Auditors Report: Rabobank Arena, Theater, Convention Center, Bakersfield Ice Sports Center & Spectrum Amphitheatre; and  Agreed Upon Conditions Report for the Measure N/ Public Safety and Vital Services (PSVS) Measure The Committee unanimously approved to present the annual audit reports to the full City Council for acceptance. B. Discussion and Committee Recommendation Regarding FY 2020-21 CDBG, HOME, ESG Action Plan Development Services Director Boyle introduced Community Development Coordinator Carter who summarized, by way of a PowerPoint presentation, the process of developing a Five-year Consolidated Plan to address the community needs and set priorities to address those needs over a five year period which included holding several community meetings, forums, stakeholder meetings, and a community needs survey to gather input. As a result of the community engagement, the following key goals are: increase and preserve affordable housing for low-and-moderate income households, prevent and reduce homelessness, improve public infrastructure and facilities to promote safe and vibrant communities, foster community and economic development, and enhance facilities and services for the non-homeless special needs population. Community Development Coordinator Carter also summarized the first-year of annual entitlements of the Five-year Consolidation Action Plan. These entitlements help to improve the quality of life of low to moderate income neighborhoods, improve DRAFT    S:\Council Committees\2020\Budget and Finance\02_February Page 3 CH:mc:pa infrastructure in the neighborhoods, and promote job opportunities for low income individuals. The Housing and Urban Development (HUD) Community Development Block Grant Program (CDBG), HOME Investment Partnership (HOME), Emergency Shelter Grant (ESG), and Housing Opportunities for Persons with AIDS (HOPWA) entitlements for FY 20-21 were not available at the time of the meeting; therefore, staff based the proposed budget using the previous year’s entitlements. The total proposed budget for CDBG, HOME, ESG, and HOPWA for FY 2020-21 is $5,840,196. FY 2020/21 Proposed CDBG Budget: The total resources available for FY 2020/21 are $3,610,882. This amount includes the CDBG entitlement of $3,610,882 and project program income of $8,000. Staff proposed the total resources be allocated as follows:  Total Administration – 20% Cap: $720,576  Long Term Obligations – $364,826  Public Services: $540432. Services include Fair Housing Program Services, Bakersfield Senior Center, Flood Ministries Homeless outreach – Designated CE Team, and Mission at Kern (Operations at HEAP Funded Expansion).  Public Improvements Project: $2,070,000 Services include Home Access Rehabilitation; Drainage, Curb, Gutter, Sidewalk, and Accessibility Improvements in the following areas: Madison Area, Castro Area, East Truxtun Area, Oleander Area, East Brundage Area; and Belle Terrace Park Playground Upgrades. FY 2020/21 Home Investment Partnership (HOME) Budget: Based on the previous year’s entitlement, the total resources available for FY 2020-21 is $1,359,869, 10% of which was set aside for administrative cost. This amount includes the HOME Entitlement of $1,259,869 and $100,000 of projected program income. Staff estimates that the total Program/Project Cost and Direct Delivery for FY 2020-21 is $1,359,869. This Program/Project cost includes: $188,980 in HUD mandated Community House Development Organization (CHDO) Set aside and $1,034,901 for New Construction. FY 2020-21 Emergency Solutions Grant (ESG) Budget: Based on the previous year’s entitlement, the total resources available for FY 2020-21 is $308,712, 7.5% of which was set aside for administrative cost. Staff proposed the total resources be allocated as follows:  Emergency Shelter: $308,712, Services include: Flood Ministries Street Outreach ($23,625), Bakersfield Homeless Center – Shelter ($66,719) The Mission of Kern County ($66,719) and Alliance Again Family Violence ($28,164). Homeless Prevention & Rehousing Project: Bakersfield Homeless Center – Rehousing ($100,332). FY 2020-21 Housing Opportunities for Persons with AIDS (HOPWA) Budget: Based on the previous year’s entitlement, the total resources available for FY 2020-21 is $560,733, 3% of which is set aside for administrative costs. Staff proposes allocating $543,911 to Kern County Public Health to administer the program. Committee member Rivera requested the interest rates of the long-term CDBG loans and inquired about the applications submitted by The Mission of Kern County and the Bakersfield Senior Center. DRAFT    S:\Council Committees\2020\Budget and Finance\02_February Page 4 CH:mc:pa Community Development Coordinator Carter stated the interest rate for the first Section 108 loan ($4.1 million) was 1.75% to 4.76% and the second loan ($800,000) was 1.61% to 4.76%. She also stated the Mission of Kern County application for a 40-bed expansion ($35,000) was not recommend due to an alternative funding source allocation from the Homeless Housing, Assistance and Prevention (HHAP) state program. The Bakersfield Senior Center application to demolish all buildings and construct new building ($3.5 million) was not recommend as well. Community Development staff will work the Senior Center to develop a financial plan to fund the project in phases. Breaking down the project into phases will allow the Senior Center to apply for several grants including the Brownfields Grant and through the Transformative Climate Communities Program (TCC). Committee Chair Gonzales requested the remaining balances of the long-term CDBG loans and inquired about the Belle Terrace Park improvements application. Community Development Coordinator Carter stated the remaining balances for both loans were $849,314 and $159,576 respectively. Recreation and Parks Director Hoover stated the park is in need of improvements and a new school is being constructed in the area. There is a working partnership with the County of Kern to improve the park to city standards. Assistant City Manager Kitchen added the full cost of improvements for this project is approximately $1.7 million. The County is expected to allocate approximately $840,000 of their CDBG budget as well as County contingency for the project. The remaining balance needed would come from the city’s allocation of $350,000 and philanthropic contributions. Staff recommends that the funding be contingent upon the County’s action plan being adopted in June. Committee Chair Gonzales made a motion to present the proposed Action Plan to the full City Council with the contingency that the County include and approve funding through their Action Plan for the Belle Terrance Park and that they included a maintenance plan as well. The motion was unanimously approved. C. Discussion and Committee Recommendation Regarding Adoption of the 2020 Committee Meeting Schedule The meeting scheduled was adopted as submitted. 5. COMMITTEE COMMENTS There were no comments made. 6. ADJOURNMENT The meeting adjourned at 12:40 p.m. DRAFT  Budget & Finance Committee Meetings 12:00 p.m.3:30 p.m. Closed Session 5:15 p.m. Public Session Budget Hearing: 06/02, Budget Adoption: 6/16 Holidays - City Hall Closed 12:00 p.m. S M T W TH F S S M T W TH F S S M T W TH F S 1 2 1 2 3 4 5 6 1 2 3 4 5 6 3 4 5 6 7 8 9 7 8 9 10 11 12 13 7 8 9 10 11 12 13 10 11 12 13 14 15 16 14 15 16 17 18 19 20 14 15 16 17 18 19 20 17 18 19 20 21 22 23 21 22 23 24 25 26 27 21 22 23 24 25 26 27 24 25 26 27 28 29 30 28 28 29 30 31 31 S M T W TH F S S M T W TH F S S M T W TH F S 1 2 3 1 1 2 3 4 5 4 5 6 7 8 9 10 2 3 4 5 6 7 8 6 7 8 9 10 11 12 11 12 13 14 15 16 17 9 10 11 12 13 14 15 13 14 15 16 17 18 19 18 19 20 21 22 23 24 16 17 18 19 20 21 22 20 21 22 23 24 25 26 25 26 27 28 29 30 23 24 25 26 27 28 29 27 28 29 30 30 31 S M T W TH F S S M T W TH F S S M T W TH F S 1 2 3 1 2 3 4 5 6 7 1 2 3 4 4 5 6 7 8 9 10 8 9 10 11 12 13 14 5 6 7 8 9 10 11 11 12 13 14 15 16 17 15 16 17 18 19 20 21 12 13 14 15 16 17 18 18 19 20 21 22 23 24 22 23 24 25 26 27 28 19 20 21 22 23 24 25 25 26 27 28 29 30 31 29 30 31 26 27 28 29 30 S M T W TH F S S M T W TH F S S M T W TH F S 1 2 1 2 3 4 5 6 1 2 3 4 3 4 5 6 7 8 9 7 8 9 10 11 12 13 5 6 7 8 9 10 11 10 11 12 13 14 15 16 14 15 16 17 18 19 20 12 13 14 15 16 17 18 17 18 19 20 21 22 23 21 22 23 24 25 26 27 19 20 21 22 23 24 25 24 25 26 27 28 29 30 28 29 30 26 27 28 29 30 31 31 League of California Cities Mayors and Council Members Executive Forum - 2021 Date yet To Be Determined League of California Cities Annual Conference - September 22-24, 2021 Budget Departmental Workshop Budget & Finance Committee Calendar January 2021 Through December 2021 All meetings will be held at City Hall North, First Floor, Conference Room A DRAFT City Council Meetings JANUARY FEBRUARY MARCH APRIL MAY JUNE JULY AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER Documents Presented At The Budget and Finance Committee February 5, 2021 Meeting City of Bakersfield Recycling Program Overview 02/05/2020 Curbside Blue Carts Papers & Cardboard Metals Glass: Clear/Brown/Green Rigid Plastics: 1 -7 Commercial Blue Bins Available in Various Sizes Service 1 –6 Days/Week Recycling History City began curbside recycling collection on a volunteer basis in 2003 By 2012, there were 90,000 residents participating in the recycling program State mandated curbside recycling in 2013; remainder of customers were placed into the program (no fee increase) City historically relied on Metropolitan Recycling, LLC (MRC) and BARC to process recyclable materials City would divert material to each facility based on pricing to keep both facilities competitive Recycling History In June 2012,the City entered into a 20 year land lease with MRCwhichallowedMRCtobuildaMaterialsRecyclingFacility(MRF)for handling commercial and residential recyclable material The MRF is located at the City’s Green Waste Facility MRC is operated by consortium of private haulers Prior to 2017,MRC and BARC would profit from selling therecoveredmaterialandwouldcompensatetheCityfortakingcommercialandresidentialrecyclablematerialstotheirMRF’s Revenue was based on the market value of the recyclablematerial Recycling Markets Shift Up until 2017,China was responsible for importing 60%of the world’s recovered recyclable material In 2017,China began to limit imported recyclable material and rejected lower quality material,fluctuating the market value of recyclable materials Then China enforced a new “national sword”policy that restricted imported recyclable materials,causing the world’s recyclable market to collapse Recycling Rates History -$150 -$100 -$50 $0 $50 $100 Ja n - 1 2 Ap r - 1 2 Ju l - 1 2 Oc t - 1 2 Ja n - 1 3 Ap r - 1 3 Ju l - 1 3 Oc t - 1 3 Ja n - 1 4 Ap r - 1 4 Ju l - 1 4 Oc t - 1 4 Ja n - 1 5 Ap r - 1 5 Ju l - 1 5 Oc t - 1 5 Ja n - 1 6 Ap r - 1 6 Ju l - 1 6 Oc t - 1 6 Ja n - 1 7 Ap r - 1 7 Ju l - 1 7 Oc t - 1 7 Ja n - 1 8 Ap r - 1 8 Ju l - 1 8 Oc t - 1 8 Ja n - 1 9 Ap r - 1 9 Ju l - 1 9 Oc t - 1 9 Ja n - 2 0 Ap r - 2 0 Ju l - 2 0 Oc t - 2 0 Ja n - 2 1 Outsource Recycle Rates $/ton City Begins to Move Forward In 2018,staff came to City Council with a presentation to discuss impacts on the City’s recycling program;direction was given to try and “weather the storm” Costs continued to escalate and were impacting the Refuse Enterprise fund balance;which is a factor in determining rates In an effort to mitigate more significant rate increases to customers,staff began evaluating options to reduce recycling costs Evaluating Recycling Options In early 2020,the City identified a facility in Wasco that recently closed due to the changes in the recyclable market. Staff started reviewing a lease option to begin a pilot program with their MRF At the March 25,2020 Council Meeting -Councilmember Weir submitted a referral to have staff review options and present to Budget and Finance Committee Concurrent to the timing of the referral,BARC announced they would not be able to provide recycling services due to regulatory changes to their funding streams Adjustments to Recycling Evaluations With the closure of BARC,the City would lose one of the two facilities accepting our recyclables,reducing our options moving forward As a local MRF,BARC was a higher priority than the Wasco facility Given the time constraints for the BARC closure and its impacts a local MRF,staff quickly pivoted to work with BARC to form a pilot program Pilot Program was meant to provide the Committee more detailed,real-world data to use in making any recommendations MRF Locations MRC’s MRF BARC MRF CITY AIRPORT BARC Location WHITE LANE SO U T H U N I O N A V E BARC MRF BARC Operation BARC Operation BARC Pilot Program In July 2020,City and BARC executed two department agreements (three-month term)to run a pilot program investigating the costs of operating aMRF One agreement was a lease of the existing facility One agreement was to pay BARC for their labor and supply costs Pilot costs included BARC’s labor,supplies,and equipment;along with Citystaff,equipment,and lease payment In late September,staff determined the need for additional time tomarketthematerialsprocessedattheMRFtodeterminehowmuchtherevenuewouldoffsettheexpenses On October 20th the City Council amended both agreements to increasecompensationandextendthetermstoallowthepilotprogramtocontinueforanadditionalthreemonths BARC Pilot Results After including all the costs,staff determined the following results: BARC pilot program processed an average of 578 tons of materials per month at a rate of $97 per ton in operational costs The materials recovered and sold resulted in revenue of $54 per ton There is additional material that has been processed and not sold as of yet,but staff estimates the value of this at $49 per ton The total net processing cost is -$6 per ton,which means the City will earn $6 per ton to process recyclable materials The current alternative to the City processing recyclable materials is to pay private vendors to process materials;the current per ton rate paid to a private vendor is $90 per ton At 578 tons per month,this difference would save approximately $650,000 per year versus sending the same amount of material to out source vendor Findings/Takeaways Pilot program data shows City can process blue cart material at a lower cost than single remaining option that exists within the current local market Not a new concept,similar to how the City monitors costs for curbside hauling services Provides much needed job training program for BARC clients Reduces future rate increases to customers across the entire City recycling program Continues City’s efforts across all operations to reduce costs,assisting business and residents in economic recovery Complicating Factor -BARC Selling MRF In September 2020,BARC notified the City they would be selling their entire facility due to changes in their overall operations Based on the positive results of the pilot program,staff began to evaluate the feasibility of purchasing BARC’s MRF Staff requested an appraisal of the facility and Public Work’s staff evaluated all the equipment that could be included in the sale BARC now has the property listed publicly and has received 2 letters of interest on the MRF site and has accepted an offer on the remaining property on Union Avenue Alternatives moving forward Outsource all recyclable materials to private contractors; work with contractors to determine most cost effective solutions for the City to address changes in recycling Purchase BARC facility and operate a City owned MRF; recommend contracting with BARC to operate Pursue other MRF facilities as lease or purchase options to continue to have a second MRF to manage capacity and costs resulting from changes in recycling Cost considerations for City Owned MRF At $90 per ton (current cost),assuming 578 tons per month,thecostforoutsourcingtoprivatecontractorswouldcosttheCity/rate payers $6,200,000 over a ten year period Based on pilot data,including the cost to purchase BARC’s MRFandassumingadditionaloperationalexpenses,operating theBARCfacilityasaCityownedMRFwouldcosttheCity/ratepayers$2,500,000 over the same period The savings to the City/ratepayers is estimated at $3.7million This analysis did not account for inflation as recycling marketvalueschangeandeffectsnetrevenue The $3.7 million difference should remain consistent as marketvaluechangesandinflationwouldeffectbothCityandoutsourcevendor Advantages of a City owned MRF Would allow checks and balances between City and private contracting when comparing each other's recycling program while maintaining a competitive rate for recyclable materials This is similar to the rest of the refuse collection system:City and contracted haulers each collect approximately 50%of all material The City can continue to work closely with private contractors to address the impacts of changes to the recycling market while operating a City owned MRF Based off the pilot program and exploring the possibility of owning a MRF,there should be considerable savings that will ensure City refuse rates are one of lowest in the State Overview of City’s Refuse Rates $223 $256 $270 $273 $277 $286 $303 $304 $335 $383 $409 $426 $492 $512 $527 $582 $752 $1,156 $1,588 0 200 400 600 800 1000 1200 1400 1600 1800 City of Bakersfield Palm Springs Kern County Chino Hills Santa Clarita Visalia San Bernardino Fresno Victorville Oxnard Merced Modesto Pasadena Sacramento San Francisco Stockton Fremont Alameda Oakland * Numbers are rounded to the nearest dollar Refuse Rate Survey Annual 2019* Other Factors Impacting the Cost of Recycling California regulations AB 341 and SB 1383 overall intent is to achieve the State’s goal of 75%landfill diversion,and blue cart recycling is a component of those regulations Diverting recyclable material to the landfill is not an option In addition,these laws also mandate changes to green waste and organic food recovery programs that will impact the City’s Refuse rates in the near future Finding savings for processing recyclable material will help offset additional costs for green waste and food waste programs that will be implemented in 2022 Other Considerations for Mitigating Recycling Costs Education campaigns to reduce non-recyclable materials being placed in blue bins Creating local markets for the purchase of recycled materials Other agencies are adding surcharges on top of solid waste rates to account for these shifts in the market Kern County now charges a $12 surcharge to residents for recycling Recommendation Bring forth action items for Council consideration regarding recycling programs that include: Restoring lease and contract with BARC to continue operating BARC’s MRF as a pilot program Submitting a letter of interest to BARC for purchase of their MRF site and authorizing City staff to negotiate sale price Continue to evaluate other considerations for mitigating recycling costs