8.17.21 Meeting Summary

Last night the Council met and discussed a few significant items:

• We discussed two resolutions that will come before CalCities (formerly the League of California Cities).  
  
  The first was a push to distribute statewide sales tax more evenly throughout the state.  This applies primarily to online retailers where currently sales tax revenue is attributable to the location of fulfillment centers, not where the product is shipped to the end user.  This resolution would encourage the legislature and governor to change the formula on how sales tax revenues are allocated and base it on where products are actually delivered to end users.  If this would come to pass, Clayton would certainly receive greater sales tax revenue than it currently does.
  
  The second resolution was to encourage the legislature and governor to provide funding and direction to address homelessness and related challenges near railways.  Clayton doesn't have any areas that would be impacted by this.
  
  Both resolutions seemed to have garnered wide support and I would expect them to pass.  These are recommendations to the legislature so are not binding but at least stake a policy position.  The Council recommended that our delegate vote in favor of both of these.  Councilmember Diaz is our representative to CalCities and will be casting the votes at the September meeting.
  
  
• We also discussed a General Fund Reserve Policy.  We first discussed this at our July 20 meeting and after that discussion suggested certain changes to the initial draft.  This item was to discuss the various updates.  Overall the edits made were positive, however I felt the policy language was still more permissive than we intended.  I suggested a few substantive changes that would increase the catastrophic reserve amount (from 50% of general fund budget to 75%), and also increasing the approval threshold to spend the reserve from a simple majority to a 4/5 majority.  There were other changes suggested such as updating the policy language to be more precise and the Council decided to have the next draft reviewed by the budget subcommittee before coming back to the full council for approval.
  
  
• Lastly, we discussed the potential uses of American Rescue Plan (ARP) funds, of which the city is slated to receive approximately $2.9M.  There are four major categories of eligible spending:  (A) Costs incurred as direct result of responding to COVID-19 and / or addressing the negative economic impact, (B) Premium Pay For Eligible Workers, (C) Government Services to the Extent of Lost Revenue, (D) Infrastructure Investments in Broadband, Water, Sewer and Storm Drainage.  Each of these has various requirements and limits that we'll have to navigate.  The Council all agreed that prioritizing those people who live in Clayton and work at our Clayton businesses, Clayton businesses themselves, and those people who live in Clayton who may work outside of the city, but were negatively impacted by the pandemic.  These were the folks most impacted and we want to do as much as we can to provide relief and assist those who were impacted.
  
  The Council agreed with the recommendation that we engage a consultant to help design and administer a program to allocate ARP funds.  This would involve establishing criteria, managing the day to day activities, and ultimately distributing funds.  Program administration is an eligible use of the ARP funds as well so this would be covered by our share of ARP receipts.  We expect to bring on a consultant soon to help facilitate community outreach soliciting input on how best to design the program.