6.23.22 Meeting Summary

Last night the Council met in special session to discuss the initial submission of the Housing Element (HE) to CA Housing and Community Development (HCD).  Clayton is required to increase zoning for 570 additional housing units across various income levels.  While Clayton is required to zone for these units, there is no requirement that the units actually be built as cities are typically not the ones who engage in development.

The submission of the HE contains some significant changes to the zoning within Clayton:

• Increase allowable density to 40 units per acre at St. John's Parish, Clayton Valley Presbyterian Church, and the Oakhurst overflow parking lot.  These changes were consistent with the desire of of the property owners.
• Maintain overall density of 20 units per acre in the Town Center, with the exception of two sites near the Olivia project which requested to increase to 30 units per acre.
• Work with the owners of Oakhurst to include parcels that are partially used for the driving range at a similar density to the overflow parking lot

There were other changes as well mostly focusing on streamlining process and adjusting minimum densities.

With these changes, the city will likely be able to meet its 570 unit allocation requirement while minimizing the impact to most neighborhoods and be consistent with the intent and desire of property owners.  After this submission, HCD will have 90 days to review and provide comment back if necessary.  Final adoption is required by January 31, 2023.

6.21.22 Meeting Summary

Tonight we discussed a few significant items:

- We interviewed four candidates for three open positions for the Planning Commission.  After discussion, the Council unanimously nominated three candidates - two who had previous Planning Commission experience either here in Clayton or in other CA cities, and one for whom this is their third application.  I want to thank the outgoing Planning Commissioners and wish the new Planning Commissioners, Richard Enea, Maria Shulman, and Daniel Richardson the best of luck.

- We discussed the latest budget proposal which offers no cuts and uses reserve fund dollars to cover operational expenses.  I reiterated my view that taking this action is unsustainable and irresponsible especially given that we can make small cuts to have a balanced budget.  The money that the city received goes into our reserves and while other members of the Council want to characterize these dollars as separate from our reserves, the fact is that the restrictions over use of these funds are the same as for our reserves.  Money is fungible and trying to distinguish ARPA money from our reserves is a fool's errand.

While the cuts I suggested were relatively minor (cut City Council stipends, defer contributions to vehicle replacement scheduled for next year, etc.), they would be sufficient to balance the budget, and simultaneously not impact any city operations in the current year.  There were zero other suggestions or ideas from my fellow Councilmembers regarding any potential cuts.  So while lip service may be paid to the idea of not kicking the can down the road, or the desire to make more meaningful cuts, the dearth of ideas or suggestions belies that desire.

What using reserve funds and engaging in deficit spending means is that the city is betting that the people of Clayton will vote to increase their own taxes when the city itself is unwilling to make any cuts.  They are gambling that in 2024, the residents of Clayton will acquiesce and agree to tighten their belt and pay more in taxes.  In the interim, the City will go further into structural deficits but until they take real action to make cuts, I would encourage everyone to reject any increase in taxes without meaningful and substantial cuts first.  This will be challenging for the city, but raising taxes should be a last resort.  Unfortunately this Council has treated it like it's the only option.

The budget that started to spend down our reserves passed 4-1 with only myself voting no.

- We discussed updating the master fee schedule for the city.  This schedule includes user-benefit, regulatory, and rental fees.  Fins and penalties are meant in part to be a deterrent and are considered separately.  The city hasn't updated or examined its fee structure in some time, and the city does plan to do so during FY23.  Instead, staff proposed a CPI based increase to the fees to capture both the current year CPI, as well as the prior year CPI that wasn't incorporated due to staff shortages.  The total increase in fees was 8.8% which was approved unanimously.

- We then discussed the proposed salary schedule for staff during FY23.  Having an approved salary schedule is a requirement of CalPERS.  What was proposed was reflected in the budget that was approved in the prior item.  While I opposed the overall budget, staff compensation, especially given the demands on our staff and inflationary environment, this is an area that we should not skimp on.  The Council voted unanimously to approve the updated salary schedule.

Upcoming Council Meeting 6.21.22 and Special Meeting 6.23.22

There are two meetings scheduled this week.  The first is the regular meeting on Tuesday 6.21.22  where we will be discussing a few significant items.  The first is interviewing candidates for the Planning Commission which will begin at 6pm.  At 7 our regularly scheduled meeting will discuss a few significant items:

- Adoption of the annual budget for Fiscal Year 2023 (ending June 30, 2023).  This budget is based on recommendations from Council to not make any cuts and instead utilize reserves to make up for budget shortfalls.  In addition, this budget is proposing for additional reserve spending on various items.  At our last meeting I was opposed to the idea of using reserves to cover ongoing operations however on a 4-1 vote the Council gave direction to staff to spend down reserves.  I voted no.  The budget being proposed is largely the same as was discussed at our last meeting.

- Discussion of the City's master fee schedule and proposed increases.  We haven't updated the fees in two years whereas normally this is done each year.  The current proposal recommends increasing the fees to capture CPI for the last two years.

- A resolution adopting the City's salary schedule for FY23.

The next is a special meeting on Thursday 6.23.22:

- We will discuss the transmittal of the city's draft housing element for the 6th cycle to CA HCD.

If you have any thoughts or questions on the above please let me know.

6.7.22 Meeting Summary

 Last night the Council had a rather long meeting (ended around 11:30pm) where several significant items were discussed.

 - On the consent calendar was a a service agreement with Contra Costa County Animal Services Department for animal control services.  The agreement was for an initial 2 year term with auto renewal terms built in unless cancelled.  The discussion centered around the cost of services, and the level of services provided.  The agreement represented multiple 15% year over year increases and in a time of a constrained budget we discussed alternatives and gained an understanding of the services provided.  

As animal services as provided by the County are required, if we were to forego contracting with the County we would be responsible for providing these services ourselves.  Antioch is the only city in Contra Costa County that chooses to do this and their internal cost is substantially higher than what is being offered by the County.  So while services offered have been reduced and the cost is significant, it seemed like our best option to meet this requirement.

- We discussed a conceptual framework for allocation of ARPA funds.  With the rules surrounding uses of ARPA funds, they are equivalent to general fund reserve dollars.  I emphasized the importance of using reserves for one time costs rather than for ongoing operational needs.  Without a source of revenue to replenish reserves, spending down reserves on ongoing operations is not sustainable and poor public policy.

We discussed at length the need to overcome certain technical debt that has built up over time.  These things include digitization of records which would enable overall more efficient work, reviewing and enhancing cyber security which has become more complex and costly over time, and a limited duration employee to shore up and stabilize certain financial processes.  In our first tranche of funding the city prioritized direct community support and I am hoping we can continue to do so through the Clayton Cares grant program.  We also considered the value of an overall organizational audit to determine what our needs were vs. our capacity, and our organizational structure.  All of these things are one time in nature and seem appropriate for reserve spending.

Other items, such as maintenance of City Hall and the Library, and general budget stabilization for shortfalls in things like the streetlight special assessment district and other ongoing operational activity are not one time in nature.  I expressed opposition to this type of spending though this view was not shared by the other Councilmembers.

- We then moved on to discuss the latest proposal for the FY23 (ending June 30, 2023) budget.  The budget draft reflected a general fund deficit of approximately $107K.  The neighborhood streetlights special assessment district budget reflected a deficit of approximately $20K and unless we turned off the lights in certain areas, this would be made up from the general fund - meaning the actual deficit was approximately $127K.

While several items were identified as potential ways to cut costs and actually balance the budget, ultimately the other Councilmembers did not support any cuts and instead gave direction to staff to rely on reserve spending to not only make up any deficits, but to also fund other wish list items.  Given the challenging fiscal situation the city is in, and the forecast that this will continue for as many years as can be projected out, I thought it was irresponsible to spend down reserves while not making a single cut in spending.  

This was a missed opportunity to start down the path of fiscal sustainability. We could have made cuts this round that would not have impacted city services (eliminate stipends to Councilmembers, defer acquisition of a police vehicle) that would have balanced the budget but instead the Council kicked the can down the road again.  This Council is making a bet that voters will eventually accept a tax increase forcing every resident to tighten their belt, while not taking any action to tighten the city's belt.  I find that to be an unsupportable position and would be opposed to any additional tax if the city does not take serious action to cut spending first.

- The Master Fee schedule was tabled until our next regularly scheduled meeting due to the meeting running late.

We also had a meeting of the Oakhurst Geological Hazard Abatement District (GHAD) where I again, for approximately 3 years running, requested that the City create a schedule of work, completion dates, and specify areas of responsibility of the district.  By doing this, we add to transparency so residents can know what to expect, and we enable accountability to ensure what needs to be done actually gets done.  I made this same request for the landscaping services as well.  Without a schedule of work, there is no way to assess if what should be done is actually getting done.

Upcoming Council Meeting 6.7.22

With the rising COVID numbers, the next Council meeting will be back to fully remote.  Hopefully things improve soon, but for now given the circumstances and an abundance of caution, the meeting will be back to Zoom only.  There are a few significant items on the agenda for the meeting:

- We will discuss a conceptual framework for the ARPA (Pandemic Recovery Reserve Funds) funds.  Of the total $2.9M that we will receive over the course of two tranches, we have spent or appropriated approximately $1.46M.  This means that while the remainder approximately $1.4M is tracked separately, it is treated in the same way our general fund reserve is - it can be spent or not spent for any general purpose.  This agenda item is to discuss a framework of how to spend down these reserves.

- We will discuss the proposed budget for FY23 (ending June 30, 2023).  The current itteration of the budget shows a general fund deficit of $107K.  The budget proposal suggests possible options for addressing the deficit including:

- Deferring contribution for police vehicle replacement (this would save approximately $70K).  Each year a contribution is made to fund vehicle replacement where in the normal course the oldest vehicle is replaced.  We would still be able to purchase a vehicle this year using the prior year contribution, however next year we would be behind in our scheduled vehicle refresh.  The oldest vehicle in the police fleet is approximately 9 years old.

- Eliminate the stipend for City Councilmembers and Planning Commissioners.  This could save approximately $40K.

- Cap the costs of the outsourced City Engineer to $12K/month.  This could save, however it would mean that work for the City Engineer would be prioritized and those with the lowest priority may not be accomplished.

Other potential actions could include rolling back the salary of the city manager and/or reducing or eliminating COLA increases for miscellaneous employees.

Staff is recommending however that the entirety of the deficit be covered from reserve spending.

- We will also be discussing the FY23 proposed master fee schedule.  Staff is recommending an increase to all fees by CPI for an increase of 8.8% (to the extent allowable by law).  Part of the larger increase is because this was not done last year as a result of COVID and staff turnover.

If you have any thoughts or questions on the above please let me know.

5.31.22 Special Meeting Summary

Last night the Council held a special session and discussed three items:

- We introduced a first reading of a new ordinance relating to solid waste collection.  Due to recently effective state legislation, the lids of the garbage bins (trash, refuse, green waste) will need to be modified to align with statewide mandated colors.  There will be a process administered by Republic Services to replace the bins currently being used later this year.  Our franchise agreement which grants trash pickup services to Republic Services will also be up for renewal later this year and there will likely be a fee hike associated with that.

- We discussed the results of engagement effort regarding the city owned downtown lot.  Back in Jan-21, the city agreed to engage MIG consultants to conduct community outreach regarding what residents wanted to see the space used for.  Given it was during 2021, most of the information gathering was done online.  The website received about 450 hits, and approximately 100 responses were recorded.  When asked, "What would you like to see at the Downtown Site?", the responses were as follows:

• 30% selected entertainment (e.g. restaurants and/or recreational activities)
• 20% selected arts and cultural uses
• 18% selected commercial uses (e.g. services, retail and/or restaurants)
• 13% selected mixed use project with housing and commercial uses
• 12% other
• 7% housing

The consultant also discouraged that the city from conducting further outreach give the options that people were interested in were not feasible.  For example, certain commercial endeavors would only be possible if there were a larger amount of housing, which was not a preferred option.

We also discussed the logistics of developing the downtown property for what was called "non-agency" use.  Non-agency use was essentially non-public purposes.  An agency use could be something like a park, or recreation center.  A non-agency use could be a commercial use like retail or a restaurant, an office building, or a housing development.  If the city were to sell land it owns for the purposes of a non-agency use, the state law for surplus land kicks in and we would be required to first offer the land for sale to be used for affordable housing.  

There doesn't appear to be any immediate need to take action on the land right now.  We are not required to sell it, and there is no cost or penalty beyond routine maintenance for having it remain as is.  Currently the land is included within the updated housing element.  If it remains there, it does constrain further uses however since the city is the owner of the property ultimately it will be up to the Council to determine how it should be used.

Because of the Surplus Land Act that I mentioned above, I suggested that we as a city craft more rigor around what needs to be done should the city ever decide to sell the land for non-agency use.  Currently that decision could be made with a simple majority vote by the Council.  I suggested we add additional process to ensure that whatever decision is made has full community support.  This could take the form of required public information sessions, increasing the vote threshold to a supermajority or even require a unanimous vote prior to selling assets of the city.  I asked city staff to craft a proposal to be brought back to the Council.

- The last item we discussed was the current draft of the Housing Element.  Currently the draft has the city at 891 units, where the required number is 570.  A small buffer seems desirable should the State HCD disallow any of the units we've designated.  The 891 figure includes an additional 123 units downtown, and also includes units already approved for Diablo Meadows (21 units near Mitchell Canyon), Oak Creek Canyon (7 units near Diablo Parkway), and The Olivia (81 units downtown).

ADUs represent a small portion of what is included in our Housing Element, currently at 16.  The method for including ADUs comes from HCD, and is based on past experience.

This session was to receive public comment, and input from Council to be incorporated into the next draft.  I asked staff to prepare a timeline of touchpoints that the public may be engaged - meetings with the Planning Commission, City Council meetings, and other methods to send feedback to the city.  Part of the feedback was the results of the Balancing Act survey asking residents to designate where they would want to see the required 570 units allocated.  Unfortunately the survey had limited options for people to select and instead relied on free-form comments if there were interest outside of the pre-selected areas.  That combined with the overall low response rate (only 44 submissions) and the lack of clear direction, means that the survey seems to have limited probative value.

As for feedback on this draft, I asked that we pursue inquiry with the owners of Clayton Station to determine if it is possible to add units to that location.  This is consistent with feedback received from the earlier Planning Commission meeting. I also expressed interest in increasing the maximum density where it makes sense and consistent with what property owners are interested in, perhaps at some of the institutional sites.  The draft did contain language that would increase the maximum building height from 35 to 50 feet which I asked to be removed.