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CC 05-21-2024 Item No. 11. FY 2024-25 Proposed Budget_Supplemental Report1 CITY COUNCIL STAFF REPORT SUPPLEMENTAL 1 Meeting: May 21, 2024 Agenda Item #11 Subject Initial Study Session on Fiscal Year (FY) 2024-25 Proposed Operating and Capital Improvement Program Budgets Recommended Action Initial Study Session on Fiscal Year (FY) 2024-25 Proposed Operating and Capital Improvement Program Budgets Background: Subsequent to completion of the original report, staff compiled information provided by Baker Tilley in support of the analysis provided on revenue assumptions. This timeliness of this effort given the City’s changing budget allowed for a constructive third-party review to ensure alignment with industry best practices. A report of the findings and recommendations are provided as Attachment W. Staff’s responses to questions received from councilmembers are shown in italics. Q1: a spreadsheet of the adopted work program with the cost and staff resources, similar to the adopted work program from last year and earlier (Council member Chao) Staff Response: This information is included in the Budget Message (Attachment C), which can be viewed here. Q2: a chart of the historic staffing table (since 2013 for example) which is normally in an attachment of the proposed budget. Please include the image in the supplemental report for easy reference (Council member Chao) Staff Response: Attached are the personnel schedules from the FY 2017-18 Final Adopted Budget and the FY 2024-25 Proposed Budget. These schedules combined provide the information requested. 2 Q3: a chart of the historic annual budget, revenue and expenses, which likely could be created from the interactive budget website. Please include the images in the supplemental report for easy reference. (Council member Chao) Staff Response: The following chart and link show historical General Fund revenues and expenses from the annual budget. https://cupertino.opengov.com/transparency#/28184/accountType=revenuesVersusExpenses&emb ed=n&breakdown=types&currentYearAmount=cumulative&currentYearPeriod=years&graph=bar &legendSort=desc&proration=true&saved_view=83836&selection=9C2A43FB322CD4C8B0EBF 19802609C1F&projections=null&projectionType=null&highlighting=null&highlightingVariance =null&year=2025&selectedDataSetIndex=null&fiscal_start=2016&fiscal_end=latest Q4: The proposed staffing level and the number of currently unfilled positions. A timeline of filling those positions. (Council member Chao) Staff Response: The following 27 positions are currently vacant. The list includes the five positions being recommended for elimination as part of the FY 2024-25 Proposed Budget. Position Class Title (working title) Proposed De-funded FY 2024-2025 Recruitment Status (in progress/pending approval) 1 Senior Office Assistant Pending approval 2 Recreation Coordinator Pending approval 3 Senior Planner Pending approval 4 Assistant Planner Pending approval 5 Associate Planner Pending approval 6 Code Enforcement Officer Pending approval 7 Senior Planner Pending approval 8 Planning Manager (Housing Manager) Pending approval 9 Building Inspector Pending approval 10 Senior Housing Coordinator In progress 3 Position Class Title (working title) Proposed De-funded FY 2024-2025 Recruitment Status (in progress/pending approval) 11 Assistant Planner In progress 12 Senior Office Assistant (underfill as Office Asst) Pending approval 13 Special Project Executive Defund NA 14 Management Analyst Pending approval 15 Assistant City Manager Pending approval 16 GIS (IT) Manager Defund NA 17 Senior Management Analyst (underfill Mgt Analyst) In progress 18 Environmental Programs Assistant In progress 19 Assistant Engineer In progress 20 Maintenance Worker II Defund NA 21 Environmental Programs Assistant In progress 22 Public Works Project Manager Defund NA 23 Maintenance Worker I In progress 24 Maintenance Worker I In progress 25 Maintenance Worker I In progress 26 Senior Public Works Project Manager In progress 27 Senior Public Works Project Manager Defund NA Q5: a summary of staffing in the City Manager's Office (Council member Chao) Staff Response: See attachment from question 2. Q6: a chart of the historic budget and expenses for the CIP projects (Council member Chao) Staff Response: This can be found at www.cupertino.org/opengov, select budget vs actuals under reports and then scroll down to views and select “Budget vs. Actual Expenditures for Capital Improvement Program by Project.” Q7: Why did we choose to replace the org chart to remove the "residents" on top? Could we restore it? (Council member Chao) Staff Response: The org chart has been revised in the proposed budget to align the actual staff headcounts with the proposed budget. Staff believes this is a better depiction of overall paid positions. Organizational charts normally show the internal structure of an organization and the relationships between the different people, departments or jobs within the organization. However, it goes without saying that citizens of Cupertino elect the City Council, and the City Manager takes direction from the Council. Ultimately, Council and staff are here to support the community. Q8: Who applied for but did not receive community funding (Mayor Mohan) Staff Response: Below is a list of all applicants. The top 6 are the ones that were recommended. The others with no recommendation were not recommended to award any funding. 4 Applicant Project Commission Score Amount Requested Recommended Award Amount Cupertino Symphonic Band Band Equipment and Materials - Purchase of new sheet music, outdoor uniforms, marketing banners and rental fees 95 $6,063.00 $3,000.00 Cupertino Little League Scoreboard Replacement - Purchase of two new scoreboards at Wilson Park 94 $20,000.00 $16,000.00 West Valley Community Services Gift of Hope 2024 - Provide gifts and food to homeless and low income families during the December holiday season 92 $10,000.00 $3,750.00 AINAK AINAK Eyeglasses - Provide free eye exams and prescription eyeglasses to under resourced students 83 $10,000.00 $2,750.00 STEMBoost Elementary Science Olympiad Summer Workshops - Support in person and online STEM workshops for Cupertino students grades 2-5 82 $4,000.00 $3,000.00 Rotary Club of Cupertino House Renovations - Partner with Rebuilding Together to refurbish two houses or non- profit facilities 41 $4,000.00 $4,000.00 Special Olympics Northern California 2024 Spring Games - Cover expenses related to the 2024 Special Olympics Regional Spring Games event in Cupertino 38 $15,959.00 - Chinese American Coalition for Compassionate Care (CACCC) Loss and Grief Workshop and Starting the Conversation - Provide free workshops to address life, death, grief and loss, mindfully, for the Chinese community, multigenerational Chinese families and family caregivers 36 $15,000.00 - Bay Area Urban Eagles Summer Aviation Academy 2024 - Facilitate a ten-week summer educational program that explores aerospace and careers in the aviation industry 31 $20,000.00 - Omniware Networks Improve Mental Health for Low Income Seniors - 29 $4,000.00 - 5 Applicant Project Commission Score Amount Requested Recommended Award Amount Organize events and outings for seniors Monta Vista High School Speech Boosters Inc Monta Vista Speech Program - Expand speech program and summer camp program, cover coaching workshops and tournament fees 26 $6,500.00 - TOTAL $115,522.00 $32,500.00 Q9: Salary comparison – PW Project Manager vs Contractor (Council member Moore) Staff Response: Consultants are generally used to supplement existing staff for a variety of reasons including, but not limited to, specialized knowledge, staff bandwidth, and limited need for services such as an uptick in workload. Staff is recommending defunding two vacant Project Manager positions based on the following considerations: dollars available for CIP funding will be greatly diminished for the next five years due to the City’s current budget situation and will likely lead to a temporary reduction in the number of projects proposed. CIP currently has over $40 million dollars budgeted toward projects at various stages of completion. Staff estimates that existing budgeted staff positions and consultants will be sufficient to complete these projects. Savings to the City for each Project Manager position eliminated is estimated at $239,000 annually. Q10: Debt service budget, Cupertino’s Public Facilities Corporation, add non profit language (Council member Moore) Staff Response: On Page 623 of the FY 2024-25 Proposed Budget, it states the following: The Debt Service Program accounts for the payment of principal and interest and associated administrative costs incurred with the issuance of debt instruments for the City’s Public Facilities Corporation. In the FY 2024-25 Adopted Budget, the description will be updated to state that the Public Facilities Corporation is a non-profit. Q11: Background on Cost Allocation Plan (CAP) and its recent implementation. Was this part of the Matrix’s study and finding? (Council member Moore) Staff Response: In 2023, Matrix Consulting Group was contracted to conduct a Comprehensive Fee Study and Overhead Cost Allocation Study for the City. Matrix was asked to provide a Cost Allocation Plan (CAP) to help the City appropriately allocate general and administrative costs, and properly identify overhead rates for federal and state grants, user fees, and other funding sources. The updated CAP was incorporated in the FY 2024-25 Proposed Budget. 6 The Fee Study and Cost Allocation Plan reports were presented to Council on February 6, 2024. Q12: Historical background on allowing contingencies to be included in the proposed budget vs contracts that have contingency (normally 10%) already built into the overall funding. (Council member Moore) Staff Response: Historically, program contingencies are budgeted for all contracts and materials within that program. This allows funding to be available within a program to cover unexpected program needs. All public work construction projects and certain Innovation & Technology department projects have approved contingency that varies for each specific contract. Program contingency funds not used are reconciled back to the general fund while project contingency funds are returned to the funding source at project closeout. Q13: This was discussed during the Friday prep session but please provide a confirmation that $160k extra staffing cost has been eliminated from the library budget. If so, why is there a $160K CAP calculated into the proposed budget. (Council member Moore) Staff Response: Extra staffing costs have been eliminated from the Library budget. CAP costs are still budgeted because the CAP uses data from FY 2022-23. The CAP is prepared using the most recent full fiscal year’s data. Attachments Provided with Original Staff Report: A - Table of Contents B - Introduction C - Budget Message D - Budget Guide E - Community Profile F - Financial Policies G - All Funds Financial Schedules H - General Fund Financial Schedules I - Council and Commissions J - Administration K - Law Enforcement L - Innovation and Technology M - Administrative Services N - Parks and Recreation O - Community Development P - Public Works Q - Non-Departmental R - Appendix S - FY 2024-25 CIP new Project Narratives T - FY 2024-25 CIP 5-year Project Info Attachments Provided with this Supplemental Report: U – FY 2017-18 Personnel Schedules 7 V – FY 2024-25 Personnel Schedules W- Report from Baker Tilley on budget assumptions.