My 6.26.23 Special Meeting Summary

Yesterday afternoon the Council met for a Special Meeting (off cycle) in order to address questions from Council regarding the Master Fee Schedule proposed update directed towards our consultant who was unable to attend the previous regular meeting when this item was agendized. Approval of the proposed fee schedule was not on the agenda as any change to our Master Fee schedule requires a regularly scheduled publicly noticed hearing at least 14 days in advance with the proposal more fully fleshed out. This meeting was for Council to ask questions, discuss, and provide direction to staff.  We are targeting the approval of the update to the fee schedule to take place on August 15.

Due to time constraints regarding retaining a quorum of the Council, public comment was limited to 1.5 minutes instead of the usual 3 minutes. In addition, because this meeting was off cycle, our regular meeting place was unavailable, therefore we met in City Hall.

Questions posed by Council were largely the same as had been asked previously. During our 6.6.23 meeting when we last discussed this, our City Manager stated multiple times that certain questions being asked were matters of policy that the Council sets, not questions of law or process, and that the consultant would largely give the same answer. That is in fact what happened and rather than focus on the actual policy, a significant amount of time was spent asking questions regarding who asked who to do what and who talked to whom, or why during edits of drafts did certain words change and who asked for those changes.

Ultimately the Council engaged a consultant to assess the adequacy of our Master Fee Schedule and propose changes to do two things:

1. Ensure the fees were based on a full recovery method, including direct costs such as salaries and benefits, indirect costs such as departmental administration costs, and citywide support costs such as accounting, personnel, data processing, vehicle maintenance, and insurance.

2. Bring forward a proposal for fees for Special Events including a discount for Clayton based non-profits. 

The proposed update to the Master Fee Schedule did both of these things.  Fees for various services like a tree removal permit, or a building permit were adjusted to reflect actual costs. In addition, a new category of fees for Special Events was created. This would be applicable for a large event that would require streets to be closed, such as Oktoberfest or a parade. For those types of events with 100 participants or greater, a daily Special Event Fee was proposed that would be based on the number of participants, with the smallest tier at $700 for up to 499 participants, and $10K for events with 5,000 participants or greater.  Based on our last  direction at the 6.6.23 meeting, staff also included in this proposal a Special Event discount suggested at 20% for Clayton based non-profits.

Any discount off of stated rates is a policy decision that Council can make.  Discounts represent taxpayer subsidies and should be made judiciously.  We offer discounts in a variety of ways throughout the fee schedule - typically for those that reside in Clayton vs. those who do not.  Endeavor Hall offers a steep discount as the intent of Endeavor is to be a meeting place of residents, and to support the Arts - the uses of which do not typically generate net income.

For the past 15 years, there has been a Master Use Agreement (MUA) between the City and the CBCA whereby virtually all fees for using public property and facilities were waived during Special Events.  Earlier this year the City terminated this MUA, effective July 1, 2023.  The City's regular practice allows permits and reservations to be made up to 1 year in advance locking in the fee method at that time.  Prior to the expiration of the MUA, the CBCA pulled permits for the next year's worth of events, locking in the waiver of virtually all City fees, as is their prerogative under the City's practice and the MUA that is set to expire in a few days.

As an example of the magnitude of figures that are relevant:  for Art and Wine 2022, BBQ 2022, Oktoberfest 2022, and Art and Wine 2023, this portion of direct staff charges paid to the City were $9,888, $6,676, $10,369, and $9,075, respectively.  The fees waived under the MUA for each event represented approximately $5K - $7K.  In comparison, the revenue for the first three events were $284K, $95K, and $281K, and after associated expenses inclusive of the staff time noted above, net income of $137K, $24K, and $115K.

During discussion, Vice Mayor Diaz suggested a two tier discount methodology offering a greater discount to Clayton based non-profits, and a smaller discount to non-Clayton based non profits.  Councilmember Cloven suggested a 50% discount which the majority of the Council felt was too large.  Councilmember Tillman suggested a 40% discount as a compromise which was higher than the majority of the Council was comfortable with.  Ultimately the Council directed staff to update the proposed fee schedule increasing the discount for Clayton based non-profits from 20% to 30%, and to add a 15% discount for non-Clayton based non-profits.  The vote was 3-2, with Councilmembers Cloven and Tillman voting no.

Upcoming Special Meeting 6.26.23

On Monday, we will be having a Special Meeting to discuss updates to the Master Fee Schedule.  This is a follow up to the discussion that was had at our 6.6.23 meeting.  At that meeting, our consultant was unable to attend so there were questions raised that were not addressed.  This meeting is specifically to address any open questions regarding the proposed update to the Master Fee Schedule.  We will not be approving any update to the Master Fee Schedule at this meeting as that can only be done at a regularly scheduled meeting and requires a 14 day Public Notice.  This meeting is intended to address open questions and give direction to staff in order to prepare the required Public Notice for an expected August 15 meeting date.

This meeting will be different than others in a few ways.  Because it is a Special Meeting that is off schedule, our regular meeting place at Hoyer Hall is not available.  As a result, we will be meeting in the third floor of City Hall and the meeting will start at 4:30pm.  Also due to time constraints, the meeting will end at 6:00pm.  Due to the limited time, and because this meeting is for a specific topic, we will limit public comment to 1.5 minutes rather than the usual 3 minutes.

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

My 6.20.23 Meeting Summary

Last night the Council met to discuss several significant items:

- We conducted interviews for two open Planning Commissioner seats and appointed Bretten Casagrande and Joseph Banchero.  Congratulations to both and thank you to Ed Miller and Justin Cesarin for their service whose terms are ending at the end of the month. 

- We heard a presentation from the City of Concord regarding sewer rate increases.  Clayton utilizes a sewer system administered by Concord, and as a result of increased costs for maintenance and repair, the rates that Clayton residents pay will be increasing.  The Council approved the increase that was already approved at Concord in the amount of 6% per year over the next four years.  The actual amount of increase may vary depending on the needs and actual costs incurred.

- At our last meeting, we discussed the need to appropriate $125K from the City's Pension Rate Stabilization Fund in order to balance the budget.  Pension expense has increased significantly over the past few years and this fund was intended to act as a buffer to the budget when that occurred.  As we also removed $40K from the prior budget proposal, it was expected that that $125K would be reduced to $85K, however it appears that due to certain administrative oversights the actual figure was only reduced to $114K.  

There was discussion regarding whether a revenue assumption of $36K for increased fees related to the Master Fee schedule update should be included in our budget.  This budget is inclusive of assumptions made across multiple revenue and expense categories, including those relating to our Master Fee Schedule that we are set to update in the August timeframe.  It does not however, include any increase related to Special Events as that fee category is net new and we haven't finalized those parameters.  The vast majority of other fees that are being increased are commensurate with the fee schedule that already exists and as such an assumption of increases was appropriate.  Any increased revenue from Special Events fees will have a favorable impact to the budget.

Several of the Special District funds are either in deficit, or are consuming resources from other available funds, or both.  We will need to develop a strategy to address these as we stabilize operations within the City.

We approved the FY24 budget on a vote of 4-0-1 with Councilmember Tillman abstaining.

- We approved the FY24 Capital Improvement Plan and related CIP appropriations.  Some of the projects that were approved were related to ADA curb compliance, street paving, downtown raised pedestrian crosswalks, traffic signal upgrades, and other items.  Each of these are funded by a mix of city funds and grant revenues.

- We approved a new employment agreement with our Miscellaneous Employees, as well as separated the Police Chief's position from this agreement and formed a separate agreement for that role.  As part of the agreement with the Miscellaneous employees, we included a 5% COLA for FY24, and a 3-5% increase for FY25 based on CPI.  In addition, in recognition of much of the staffing vacancy this year, we included a retention incentive of 5% for those that remain employed over the next year.  In part as a result of the current year vacancies, the City experienced favorable results compared to budget and the Council decided to utilize some of that savings to recognize those employees who continued to perform the work required during a time of significant vacancy.

4th of July Parade! Volunteers needed

Come enjoy Clayton's Annual 4th of July Parade on July 4th at 10am!  The Clayton Valley/Concord Sunrise Rotary is holding their annual Pancake Breakfast starting at 7am at Endeavor Hall as well.

For more information, see this link:  https://claytonca.gov/our-city/annual-events/4th-of-july-parade/

If you want to be IN the parade, please fill out a registration form by June 29, 2023:  https://claytonca.gov/fc/community-events/2023%204th%20Of%20July%20Parade%20Reg%20Form%20(003).pdf

If you can volunteer to help guide traffic, monitor a traffic barricade, or have a convertible vehicle to loan that will be featured in the parade for City Council members, please contact Sandy Johnson: sandras110@comcast.net

Upcoming Meeting 6.20.23

There are several items we will discuss at our next meeting:

- Appointment of two Planning Commissioners.  There are three applicants for two available seats.

- An update to the City's annual sewer service charges.  The City of Concord administers a Sewer Enterprise to provide for maintenance, repair, and operation of their sewer collection system, and Clayton utilizes this service.  The update to the annual sewer service charges are a reflection of the rate increase for this service and are approximately 6% per year for the next four years.

- We will discuss an update to the budget proposal as directed from our previous meeting 6.6.23.  At our last meeting, we discussed the need to appropriate $125K from the City's Pension Rate Stabilization Fund in order to balance the budget.  Pension expense has increased significantly over the past few years and this fund was intended to act as a buffer to the budget when that occurred.  As we also removed $40K from the prior budget proposal, it was expected that that $125K would be reduced to $85K, however it appears that due to certain administrative oversights the actual figure was only reduced to $114K. 

In discussion with Staff, it appears that the staff report published had some additional administrative oversights and we will discuss the actual figures during the meeting.

- We will discuss the City's capital improvement program and FY24 CIP appropriations

- We will discuss an update to the terms and conditions of employment for Clayton's Miscellaneous Employees and separating the position of Police Chief into its own employment agreement apart from the Miscellaneous Employees group.

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

Update on Master Fee Schedule (6.6.23 Meeting)

At our marathon meeting on 6.6.23, we discussed the proposed update to the City's Master Fee Schedule.  Any change to the fee schedule requires a public hearing that is properly noticed at least 14 days in advance.  As such at this meeting we were not poised to make any changes, rather the purpose was to give guidance to staff so they could come back with a refined draft that could be properly noticed and acted upon.  Unfortunately our consultant from GovInvest was unavailable at this meeting so several questions regarding the proposal were tabled to our next Special Meeting tentatively scheduled for June 26.

Much has been said about fees and the rules around fees both before and during this meeting.  When Prop 26 and 218 were passed, they created rules around what types of fees could be charged, and how much those fees could be.  Fees for service (those fees that may be charged for a specific service for the benefit of a specific person), like a building or tree removal permit, are limited to the cost of performing that service.  The City has not performed an analysis of its fees in many years, so long that no one can remember when it was last done. We know costs have risen over time in both materials, and the compensation for those performing the work.  Without an actual analysis it is likely that the City was not recouping the full costs of performing various services. 

For certain fees, those for entrance to or use of local government property, or the purchase, rental, or lease of local government property, the same prop 26 and 218 limitations do not apply.  These types of fees are set on a market basis - an agreed upon price between a willing seller and a willing buyer.  Many special events that are held in town would fall in this category.

In order to assess the adequacy of our Master Fee Schedule, the City engaged GovInvest for approximately $15K to assess and make recommendations on any potential updates to the Master Fee Schedule.  In performing this assessment, the Budget and Audit Committee gave direction to GovInvest to review the entire schedule and among other things:

1. Ensure the fees were based on a full recovery method, including direct costs such as salaries and benefits, indirect costs such as departmental administration costs, and citywide support costs such as accounting, personnel, data processing, vehicle maintenance, and insurance.

2. Bring forward a proposal for fees for Special Events.   

The proposed update to the Master Fee Schedule did both of these things.  Fees for various services like a tree removal permit, or a building permit were adjusted to reflect actual costs.  In addition, a new category of fees for Special Events was created.  This would be applicable for a large event that would require streets to be closed, such as Oktoberfest or a parade.  For those types of events with 100 participants or greater, a daily Special Event Fee was proposed that would be based on the number of participants, with the smallest tier at $700 for up to 499 participants, and $10K for events with 5,000 participants or greater.

Historically the majority of events that would be subject to the proposed Special Event Fee were those sponsored by the CBCA.  Under the Master Use Agreement that will end at the beginning of July, the fees for the Grove rental, temporary use permit, noise permit, special event permit, amplified sound equipment use permit, and the street closure fee were all waived, and the only costs recovered by the City were for some but not all direct labor for police and maintenance, and materials usage.  

For Art and Wine 2022, BBQ 2022, Oktoberfest 2022, and Art and Wine 2023, this portion of direct staff charges were $9,888, $6,676, $10,369, and $9,075, respectively.  The fees waived for each event represented approximately $5K - $7K.  In comparison, the revenue for the first three events were $284K, $95K, and $281K, and after associated expenses inclusive of the staff time noted above, net income of $137K, $24K, and $115K.

After an extended discussion, the Council was largely okay with the fees for service.  The Council gave feedback to Staff regarding the Special Events fees and asked them to bring back the following for our next discussion:

- Provide examples of a few common use cases for facility rental and illustrate what that cost would be.

- Define what counts as a participant for Special Events and what would be included in the Special Event fee.

- Include a non-profit rate for Special Events

We are tentatively scheduled to continue our discussion at a Special Meeting on June 26.

Separately there have been questions regarding certain City sponsored events, such as Concerts in the Grove and the Classic Car shows, and why these events pulled permits and fee waivers in the past.  It's unclear why this was our practice but in discussion with Staff and our City Attorney, this was never necessary and as such we will be discontinuing this practice so as to avoid confusion and eliminate unnecessary administrative burden.  City sponsored events do not require permits to use City facilities, and are not subject to any fees.

My 6.6.23 Meeting Summary

Last night the Council meeting started at 6pm and went until about 2am.  There was quite a bit of information presented and discussed:

We received a presentation from Fire Chief Broshard from the Contra Costa County Fire Protection District regarding an update on activities of the District.  There was a lot of useful information, some of which included discussion around changes to fire threat maps as well as a reminder for residents to stay vigilant in steps they could take to help protect against fire risk, and various alert systems available (www.cwsalerts.com).  More information available at www.cccfpd.org.

- We received a presentation from the Clayton Valley/Concord Sunrise Rotary Club regarding the activities of the Club, including an upcoming Inaugural Father's Day Run.  The Club has long held the annual 4th of July Pancake Breakfast at Endeavor Hall, among other fundraising events in order to support their mission, including a recent donation to the City of Clayton to help fund the Clayton Community Park playground equipment refresh.  For more information about the 5k run:  https://runsignup.com/RACE/CA/CLAYTON/FATHERSDAYRUNFORROTARY

- We received the Engineer's report on the Streetlight Assessment District and the proposed assessments for FY24.  We approved the assessment for FY 24 at the same rate as prior year.  This assessment remains flat each year as the City has not pursued an increase in assessments since inception.  While the annual cost of operating streetlights have gone up over time due to rising costs including inflation, with assessments not increasing this special district assessment district is and will continue to be in deficit and subsidized by the General Fund.

- We received the Engineer's report for the Diablo Estates at Clayton Benefit Assessment District and noticed a public hearing to levy the FY24 assessments.  This District operates like an HOA for a limited number of residents and this is an annual process to collect assessments for the following year.

- We had a first reading of an ordinance regarding speed limits in town.  Back in 2019 the City conducted a speed survey and based on the results it was recommended that we increase speed limits at that time.  Myself, and others on the Council were not in agreement with that recommendation and we declined to do so.  The law has since changed and now cities are allowed to preserve their existing speed limits in certain circumstances even if a speed survey would indicate otherwise.  To do so, we need to update our City ordinances to contain certain language and this is what we did last night.  There will be a second reading next meeting before the new ordinance takes effect.  As a result, no speed limit in town will be increasing which is a benefit to traffic and pedestrian safety.

- The GHAD Board also met to discuss the FY24 levy and budget.  Given the shortfalls in the GHAD that I have discussed previously, we discussed what strategic approach for the budget going forward.  The GHAD receives approximately $49K in assessment revenue each year.  Baseline expenses for administering the GHAD is approximately $28K.  There remains existing fund balance from historical legal settlements, but that figure is not large at approximately $76K.

The GHAD Board was presented with three budget approaches ranging from using current and prior funds on multiple inspections to conducting no activity and retaining all funds.  Ultimately we gave direction to the GHAD District Manager to prepare a budget that has some monitoring and inspection, with funds set aside for work necessary to pursue a local ballot measure for residents within the GHAD by mail.  Increasing the GHAD assessments is the only way that the GHAD will be able to be self sufficient and conduct the activities it was intended to do.  If we are unable to increase the assessments of the GHAD, then we will likely modify the actions that are conducted from the GHAD.  We will be discussing the logistics of a potential increase in assessments at a future meeting.

- We adjusted the salary schedules for certain leadership positions, and unleveled one existing position in order to be more competitive in recruitment and retention of talent.  While we recently brought on a new Finance Director, they left employment with the City unexpectedly without notice.  We continue to recruit for this position however it is likely that we increase our chance of attracting talent with this increased salary schedule.

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We discussed the proposed FY24 budget which reflected a surplus in the General Fund of approximately $7K which was inclusive of a transfer from the Pension Rate Stabilization fund in the amount of $125K. Pension expense has increased significantly this year and this fund was established for this purpose. Largely this budget holds the line as the City has a number of complexities primarily around vacant and new staff, and it will take time to work through onboarding before a realistic steady state can be determined.

Several of the specific funds reflect a deficit as well.  Streetlights, Stormwater, LMD, the Grove, and the GHAD all reflect deficits to some degree.  For some of these (Streetlights, Stormwater), we will be repurposing Gas Tax revenues to cover eligible costs within these funds.  For others (LMD, GHAD) we will be rebuilding the budget with the available funds as a constraint so we can assess what that level of service delivery that will look like.

While the current General Fund budget for FY24 reflects a modest surplus of $7K, a few items will add context to this figure.  It does not include any impact of current contract negotiations with the City's Miscellaneous employee group - any increase in compensation will have an unfavorable impact on the General Fund.  It includes $40K of one time spend related to technology projects that have not yet been identified and will be carved out which will have a favorable impact to the General Fund.  It includes additional fee revenue of $36K for user charges, but it does not include any fees that may be earned for special events held in the City.  Any fees earned from special events will have a favorable impact to the General Fund.

When the FY23 budget was approved, it was done so with an approximately $127K deficit.  Based on current projections we will end FY23 with an operating surplus of approximately $408K - representing a favorable swing of $535K.  This is due to a combination of greater than expected revenues, staff vacancies, and other savings.  Much of the discussion leading up to the current budget being adopted was around structural deficits, with negative projections for every year available.  This negative outlook has been utilized to support a narrative that taxes need to be increased.  As we can see with the current fiscal year, this significant deficit did not materialize for a variety of reasons calling into question prior predictions. 

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I will separate discussion of the Master Fee Schedule in its own post.

Upcoming Meeting 6.6.23

There are several significant items we will be discussing at our next meeting:

- We will start early at 6pm with a closed session to discuss labor negotiations with the City's Miscellaneous employees.

- We will receive a presentation on the proposed update to the City's master fee schedule.

- We will be adjusting certain salary ranges in order to be more competitive in recruitment.

- We will receive the City Engineer's report and proposed assessments regarding the Streetlight Assessment District.

- We will receive the City Engineer's report and declare an intent to levy and collect assessments for the Diablo Estates Benefit Assessment District for FY24.

- We will discuss an ordinance amending the Speed Limits section of the Clayton Municipal Code in order to preserve the existing speed limits.

- We will also be having a meeting of the GHAD in order to receive the annual report and set a future public hearing to consider the GHAD levy of assessments.

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