Lawsuits –

On February 19, Piedmont’s City Clerk announced resolution of the second of two lawsuits arising from the excessive cost overruns of the Piedmont Hills Undergrounding District, and the Hampton-Seaview Undergrounding District.  The City recouped $667,000 from over $2 million of excess costs.  The bottom line is that Piedmont’s taxpayers are stuck covering a $1.3 million debacle.

Now it’s over.  It’s time to move on.  We must accept the penalty and see that such gross mismanagement is never repeated again.   True enough.  But there are consequences from this financial fiasco.  Future proposals for tax increases or bond funding for big projects will have to meet higher standards of review.  And if there is any doubt at all about the veracity of new proposals, or the competence of their sponsors, Piedmont’s citizens will probably reject them.  Once bitten, twice shy.

Bruce Joffe, Piedmont Resident
3-4-16

 Editors’ Note:  Opinions expressed are those of the author.

Since 2010, 13 top Piedmont administration positions have undergone a turnover.  

The turned over positions are:

City Administrator

Fire Chief

Police Chief

Public Works Director

Finance and Human Resources Director

Recreation Director

City Clerk

Planning Director

Parks and Project Manager, Public Works 

City Attorney (Outside Contract)

City Engineer (Outside Contract)

Recording Secretary (No replacement)

Building Official

Current  > City Directory 

Personnel Changes and a New Position –

Recently announced personnel changes include the retirement of Mark Feldkamp, Parks and Project Manager in the Public Works Department, Kate Black, Planning Director, and Erick Cheung, Finance and Human Resources Director, who was hired March 6, 2013.   Feldkamp, a 20-year employee, will be replaced by Nancy Kent. Black, a 17 year employee, will be replaced on an interim basis by Kevin Jackson, Senior Planner. Cheung’s replacement has not been announced. 

The latest personnel changes come as the City is faced with renewing the Municipal Services Parcel Tax, considering new planning laws, completing Hampton Field improvements, funding employee pension and health care costs, improving IT systems, maintaining facilities, and evaluating recreational needs.

City Administrator Paul Benoit has recommended splitting the position of Finance and Human Resources Director.   A personnel search for Cheung’s replacement has been noted as a priority and is scheduled to be considered on the November  2 Council agenda.

Recommendation from City Administrator Benoit:

“Change in Responsibilities of the Position To ensure that the City attracts a broad and strong pool of municipal finance professionals, I would propose, with City Council authorization, to redefine the job description of the Finance / Human Resources Director position to eliminate the focus on human resources (HR). As such, I would propose recruiting for the position of Finance Director. At the same time, I would propose creating a new classification to absorb some of the duties currently handled by the Finance/HR Director. The exact title, duties, and reporting structure of this new classification will be determined as the process moves forward and will be brought to the Civil Service Commission for approval. I would assign Stacy Jennings, who currently serves much of the day to day human resources work to the new classification.

“Should the City Council approve this direction, I would suggest that we actively pursue recruitment for a Finance Director and, on a parallel track, make the necessary adjustments to the affected position descriptions. Also, Mr. Cheung and I have been meeting with a retired municipal Finance Director who is interested in and capable of serving the City in an interim role while the recruitment is in process. I will conduct additional background research on the individual and, depending on the results of that research, will propose a professional services contract for Council consideration.”

Read the staff report.

The Council has not yet addressed the long term financial impact of adding an additional administrative position.

Allocation of $500,000 at November 2 Council meeting. – 

In 2009 and 2010 revelations from the staff showed costly overruns for the private underground utility district that became a $2.5 million City expense.  Lawsuits ensued with the City recently receiving a settlement of $500,000 for the engineering work of Robert Gray and Associates. City legal action against the engineering firm Harris and Associates continues.

There has been no mention of returning the $450,000 taken from the PG&E Piedmont 20A undergrounding reserves. (Read PCA articles explaining 20A funds  here and Council candidate positions on the $450,000 taken from the 20A PG&E reserves here. Read all PCA articles on undergrounding here.

“20A Districts: 20A funds are provided by PG&E to the City of Piedmont through a requirement in the Public Utility Code which annually sets aside a portion of PG&E revenue for each utility jurisdiction. 20A funds are restricted in use and intended for undergrounding arterial streets. Primary arterial streets such as Highland Avenue, Grand Avenue, and the Civic Center block of Vista were completed using 20A funds.   In the 1980’s the Piedmont City Council designated all of the City’s 20A funds for undergrounding Grand, Moraga, and Oakland Avenues. The undergrounding of Grand Avenue was completed and paid for using 20A funds.  The undergrounding of Moraga and Oakland Avenues has not yet been accomplished.  After 2002, the City Council changed its policy and began the practice of using 20A funds to assist private undergrounding (20B) projects – specifically, the Piedmont Hills, Central Piedmont, and Sea View Avenue Undergrounding Districts.” PCA article 

Details: July 2, 2007 minutes, at page 3-4; July 7, 2007 staff Report, p. 3. May 7, 2007 staff report, p. 3; May 7, 2007 minutes;

Staff report on $500,00 allocation:

“On July 6, 2015 the City Council executed a settlement agreement with Robert Gray & Associates (RGA) for $500K to settle claims related to the creation and construction of the Piedmont Hills Underground Assessment District. The payment was received by the City in August and credited to the City’s General Fund reserves. In keeping with the Council’s prior decision to allocate one-time excess reserves to address needs, staff is recommending that the funds be transferred to the Facilities Maintenance Fund. This does not appropriate the funds in the Facilities Maintenance Fund to any specific project or use, which the Council can do at a future meeting or during the budget process.”  Read the staff report.

Council – 

Mayor Margaret Fujioka started her service as a council member in 2008 and Vice Mayor Jeff Wieler returned to the Council early in 2010. Newer members of the Council are Teddy King, Bob McBain, and Tim Rood.  At the next municipal election in November of 2016, Fujioka’s seat will become vacant when she will be termed out. McBain can run for re-election in 2016 for another four year term.  Wieler will have two more years remaining in his second term; in 2018 his seat will become vacant.  Rood and King’s terms expire in 2018.  Both can seek re-election.

By City Charter, a regular Council term last four years.  Individuals can serve for two consecutive terms, and may seek re-election to additional terms after retiring for 4 years.

The November 2, 2015, Council meeting begins at 7:30 p.m. in the Council Chambers City Hall. The meeting will be broadcast on Channel 27, KCOM and on the City website.  Agenda.

On Monday, July 6, the Council will consider a full release of all claims against the engineering firm Robert Gray and Associates in exchange for $500,000.

Michelle Kenyon, Piedmont’s City Attorney recommends that the City Council authorize the settlement agreement with Robert Gray and Associates (RGA) in the amount $500,000. The City’s lawsuit originated in 2011 in connection with the Piedmont Hills Undergrounding project.

Agreement with RGA by the City Council is not the final step, as it would still have to be approved by the Superior Court of Contra Costa County.

Read the full report here

The City’s litigation against the additional engineering firm, Harris and Associates will continue.

Arriving in March of 2014 from Astoria, Oregon, Piedmont’s new City Administrator Paul Benoit has put in motion changes to some City procedures, programs, and policies. 

Piedmont’s long forgotten Conflict of Interest Code was updated to include new and well-established staff positions. Additionally, the Police and Fire Pension Board members were added to the list of those covered by the Code.

Elected and appointed officials as well as staff members were presented with a training program on the Brown Act, California’s sunshine law.  Adherence to the Act has been an issue in prior years; yet no program had been presented to inform individuals of their responsibilities such as not acting in private excluding the public and their right to know public business.

City contracts are being more carefully defined and scrutinized. The 2007 contract with a previous City Attorney did not contain a requirement for Errors and Omissions insurance, perhaps a problem when he approved and signed the costly undergrounding contract placing risks on all Piedmont taxpayers rather than property owners in the private project.

Top City employees are now encouraged to attend Council meetings, to provide background information and answer questions about agenda items. 

The Piedmont City Council reached agreement with the Piedmont Center for the Arts for an expanded lease to allow construction of a lift to give disabled users of the Center access to the newly renovated restrooms.

Blair Park has benefited from an expedited safety plan of removing dangerous, diseased Monterey Pines from the park.

Use of the approximate $500,000 in East Bay Regional Park District WW Bonds is on a fast track to assure timely application and use of Piedmont’s entitlement. Hampton Field and surrounds have been designated for safety and cost-saving improvements.

To spare taxpayers additional costs for sanitary sewer improvements, Benoit devised a temporary loan plan utilizing windfall property transfer taxes at essentially no interest to provide needed funds.  An expeditious program to replace poorly functioning pipes is now in place. In 2011 City Hall asked taxpayers for $11 million for the sewer update, later budgeted at a corrected cost of $1 million.

Other policies have changed.  Apartments will be allowed above commercial buildings.  Body cameras will be standard on police officers.  The Bike and Pedestrian Plan was approved.  The Annual Piedmont Turkey Trot will be providing the City of Piedmont Athletic Facilities Preservation Fund with revenue.
Voters approved an election date change to synchronized Piedmont’s election with the State General Election. Public smoking will be further restricted in Piedmont. The revised Housing Element of the General Plan met the State deadline.

Benoit will be faced with new and continuing challenges in 2015.  The law suit over the undergrounding debacle has yet to be resolved.  Prioritizing expenditures and implementing approved programs and policies will be ongoing.

At the November 17 City Council meeting, Piedmont came into compliance with State of California conflict of interest laws.  All council members present voted to approve the revised policy.  Although a biannual Council review is required by State law, the Council had not reviewed the City policy since 1988.

After considerable discussion, the Piedmont Police and Fire Pension Board members and the City Engineer were added to the list of those required to provide personal economic disclosure on Form 700.  Vice Mayor Jeff Weiler objected to Council member Tim Rood’s suggestion of requiring Piedmont’s consulting City Engineer to be named on the list, because he felt it was unnecessary and an invasion of privacy. When the votes were cast, Weiler voted aye along with the other approving council members, while noting his objections.

The consulting City Engineer has previously been voluntarily providing his financial disclosure information to the City. The City Engineer is charged with the evaluation and oversight of public works projects including contracts, design and construction.

Newly added to the list was the Piedmont Police and Fire Pension Board, responsible for overseeing distribution of retiree benefits, investment of pension fund assets and post employment benefits investments by Osterweis Capital Management.  The assets are valued at tens of millions of dollars.

A question arose regarding application of economic disclosure requirements for specific appointed committees and commissions who interview and advise on auditors, contractors, consultants, bond underwriters, etc. The Acting City Attorney provided advice that the disclosure was not necessary as those appointed bodies did not make the final decision on selection of providers.  In recent years, it has been the practice of the City Council to approve committee and commission recommendations on various providers.

The City Council and Planning Commission along with certain employees have historically been complying with State economic disclosure laws in filing Form 700.

Financial disclosure is intended to alert the public, legal authorities and Fair Political Practices boards to personal interests that might be affected while appointed or elected officials are performing their official duties (i.e., making governmental decisions). Government Code 87500 identifies elected and appointed officials who are required to file Form 700, the Statement of Economic Interests.

Information disclosed can include:

• Investments in business entities (e.g., stock holdings, owning a business, a partnership)
• Interests in real estate (real property)
• Sources of personal income, including gifts, loans and travel payments
• Positions of management or employment with business entities

The form is required to be filed annually. Filed forms are public documents, available to anyone who requests them.

Read more about Form 700 here.

After the failed private undergrounding utility project costing Piedmont taxpayers over $2 million, the City Council in an attempt to avoid conflicts of interests adopted new policies and procedures for large public works projects.

Legal resolution to determine fault of the costly undergrounding debacle has yet to be resolved despite years of litigation.   Fault is pivoting around the City Council, City employees, contractors, engineers, and legal counsel. The majority of the participating Piedmont employees and City Council members involved in the problematic private utility project are no longer in their positions. There has been no announcement regarding final resolution of the pending litigation.

On October 6 the City Council will consider transferring funds into the Sewer Fund to move forward with completing the mainline sewer rehabilitation. This is a significant first in Piedmont, to have funds transferred into the Sewer Fund rather than taken out. The Sewer Fund has essentially operated as a City slush fund.

In 2011, City Hall asked for an additional $11 Million dollars from taxpayers which would have added an additional 50% tax burden on top of an already expensive sewer tax. That 2011 tax failed, and earlier this year staff estimated only $1 Million was needed to complete the previously stated $11M compliance and construction work.

Piedmont has always maintained compliance with all EPA and Water Resources Quality Board legal requirements. A fair question is why $11 Million was needed 3 years ago, and is now down to $1M? Fortuitously, a real estate transfer tax windfall of an additional $1M, and other cost cuts, means no additional taxpayer money is needed to complete the mainline sewer system. Most of the Council also recognized when rescinding Mr. Wieler’s transfer tax plan earlier this year that taxpayers want more accountability of where their tax dollars will go, and an efficient use of their funds.

During the very troubled Piedmont Hill Underground Utility District debacle, with taxpayers paying in excess of two million dollars for private benefit, the Crest Road utility trench collapsed on Oct. 13 2009. The trench would not have existed but for the private benefit undergrounding project. Staff recommended on Nov. 16 2009 that $296,000 be taken from the Sewer Fund for repairs; the sewer fund is a publicly funded source. Council agreed. Staff stated a month after the collapse that installation of trench dams was the necessary repair. On Oct. 14 2009, the City Engineer directed that the trench be filled with low-pressure concrete; by Nov. 16 this was largely completed. The installation of the trench dams, standard construction practice on a steep slope and missing in the original construction, would have required that hundreds of cubic yards of the freshly poured cement be excavated. No trench dams were ever installed and the $296,000 was paid by general tax revenue and not taken from the private undergrounding district’s contingency funds.

Perhaps just a coincidence, but at the time the 2011 sewer tax failed the Blair Park project was pulled. The actual expenses for that project were never fully disclosed and I question how the sewer fund would have been further used had the additional tax passed. I speculate that the overflowing sewer fund may have been a source of funding for the new 25 home sewer line and 24 inch EBMUD transmission line relocation.

The current temporary transfer into the Sewer Fund makes sense; it is essentially a near zero interest loan. Hopefully, when the sewer rehabilitation is completed, the same spirit as now prevails in City Hall will remain and the sewer tax enacted in 2000 will be eliminated. Other prudent accounting practices have recently been undertaken with a closer look at the $900,000 automatically appropriated annually from the Sewer Fund and moved into the General Fund.

Moving ahead now with Phase V of the sewer rehabilitation is smart. Finally under Mayor Fujioka’s forward looking leadership and coupled with the transparent professionalism of City Administrator Benoit, we are taking financially prudent proactive measures.

Rich Schiller, Piedmont Resident

Editors’ Note: The opinions expressed are those of the author and not necessarily those of the Piedmont Civic Association.

Council might back off of a tax measure for new money to fix sewers.

Recent information from Alameda County  shows an unprecedented increase in the Real Property Transfer Tax flowing into Piedmont’s budget causing the City Administrator and Council to take another look at placing a sewer tax measure on the November 2014 ballot.  The City has been considering a ballot measure to generate new money derived from an increase in the tax on real estate transfers. For cost effectiveness and water quality, the City seeks to expedite the 30% remaining of the sanitary sewer rehabilitation  program.

The matter will be considered at a Special Meeting of the City Council in the Council Chambers on Tuesday, June 24 starting at 7:30 p.m. The meeting, open to the public, will be broadcast on KCOM Channel 27 and available live streamed from the City’s website.

“At the June 2nd meeting, the staff report for the first public hearing on the 2014-15 Budget included an update to Real Property Transfer Tax (RPTT) receipts. Based on the information provided by Alameda County through May 15, 2014, the City was estimated to receive
approximately $2.95 million and on pace to have a record year. At that time, staff continued to propose that funds in excess of budgeted amounts be allocated for unfunded retiree medical liabilities, facilities maintenance, and equipment replacement.

Based upon receipt of new data provided by the Alameda County Assessor’s Office, FY 2013-14 will be unprecedented, with RPTT receipts through June 9th at $3.78 million. This is largely due
to an historic total of approximately $972,000 for the month of May. The total for May is only $43,000 less than what the City received for April through June combined for Fiscal Year 2012-13. The previous record for a single month of transfer tax was June 2006, with receipts of $694,840.”

City Administrator Paul Benoit’s Report to the Council

The voter approved Sewer Fund originally was intended to rebuild and maintain Piedmont’s sanitary sewer system, however it was soon changed to include the City’s storm drain system. Both systems are recognized as important to protecting waterways from damaging effluent.

Historically, the City has used excess General Funds for purposes other than sewers: beautification projects, recreation facilities, employee compensation,  $2.5 million for private undergrounding problems, etc.

The City Council offered a 2011 ballot measure to complete the remaining 30% of the aged sanitary sewers. The tax proposed would have essentially doubled property owners ‘ Sewer Fund Taxes from $471 to $849  and $707 to $1,274 depending on lot size. Piedmont voters rejected the tax increase when they learned of errors in the City’s cost estimates and incorrect statements on Environmental Protection Agency (EPA) requirements.  Supporters of the sewer tax were undeterred by the new information and continued to support the sewer ballot measure that would have provided the City with new funds of approximately $11 million.

In a recent turn around on how much money was needed to accomplish EPA requirements, the City reduced the needed amount from approximately $11 million to approximately $1 million. City explanations of the dramatic change in needed funds to complete the sewer rehabilitation included overstated and incorrect calculations.

For years records were not kept by the Public Works Department on specific work hours or various projects charged to the Sewer Fund.  Council members did not have information on the actual work charged the Sewer Fund.

A priority list weighing various uses, including sewers, with available City funds has not been produced by the Council.

Former Mayor Al Peters stated in an opinion:

“The City has an annual general fund budget of approximately $22 million.  Allocating two percent a year to this project for three years would produce over $1.3 million.  As of June 30, 2013, the City had over $10 million in reserves, including over $4 million undesignated and an additional $4 million set aside for capital improvements and equipment replacement.  Why not use a portion of these funds to loan to the Sewer Fund rather than requesting an additional tax?  If reserves are inadequate, the Council should address that issue in a comprehensive way, not by this piecemeal approach.”

As the City looks for new money for sewers, it places other projects ahead of sewers.

Capital Improve Project (CIP) funds are generally used for special projects. There is no information indicating the City  prioritizes projects based on unavoidable expenses such as the completion of EPA required sewer work.

Although CIP funds and General Funds can be used for sewers, it is unknown if CIP allocations for sewer projects will be considered by the City Council.  As of this writing, the significant infusion of funds supplied by the Real Estate Transfer Tax changes the budget numbers. Without a new sewer tax, it appears special projects could be implemented and the Sewer Fund could be provided with the funds necessary for renovation of the remaining sanitary sewers in a cost effective, expeditious manner.

To read detailed analysis on Piedmont’s Sewer Fund, go to the left side of this page and click on “Sewer Fund”.

Read the City Administrator’s Report to the Council

– Public access is limited when some School and City meetings on finances, budgets, zoning, planning, education, and others are held away from cameras and recording devices leaving only hearty individuals viewing important civic matters. –

Citizens, who want to know first hand how and why some civic decisions are formulated, will need to personally go to the many unrecorded, out of the way meetings.  Some are noted below. 

Transparency has been a great interest in Piedmont.

From the undergrounding of utilities, Blair Park development, sewer costs, Alan Harvey Theater design, parcel taxes, and so on, Piedmonters have expressed concern over the lack of access and transparency of underlying pivotal civic decisions.

During a recent Council Budget session, it was noted that hundreds of viewers have gone to the City’s website to view live streamed and prerecorded meetings on their home computers. Home viewers can also watch broadcasted meetings on their televisions via Comcast Channel 27. The City does not know how many home viewers use the service and, according to Comcast, data is not collected. Piedmont’s public broadcasting station, KCOM, generally reruns recorded meetings on Channel 27 and makes them available through the City website. 

Despite the availability of space and broadcasting equipment, meetings are often scheduled where public access is difficult and home viewing is impossible. 

Frequent locations of the less accessible meetings are: Piedmont Emergency Operations Center (EOC) in the Police Department, the Council Conference Room in City Hall and the School District Executive Offices below Millennium High School. These locations do not have broadcast equipment. 

Noted below are some of the City and School meetings that are only available to those present at the meetings, not home viewers.  

Examples of non-broadcasted meetings are:

– Piedmont Unified School District-

Budget Advisory Committee: The committee, under the direction of the School Superintendent and officially designated in the recent parcel tax ballot measure, makes recommendations through the Piedmont Unified School District Superintendent to the School Board on budgets and taxation.  The committee is an amorphous group ranging from teachers, school staff, parents, Board members, community members, and others who attend the publicly announced meetings.  School District staff members present to the committee information on the fiscal condition of the District and educational programs.  A member of the Board of Education is typically present at the Budget Advisory Committee meetings. The meetings are open to the public and are usually held in the School District Executive Offices.  There are no electronic recordings or broadcasts of the meetings.

  Measure A School Support Tax Subcommittee:  The members of the subcommittee are selected from the Budget Advisory Committee attendees.  Three residents are selected for the Subcommittee. The voter approved Measure A parcel tax requires the Subcommittee to review the fiscal condition of the School District and advise the School Board annually on the need and range of the Measure A parcel tax levy having a base of $2,406 per parcel. This year the Subcommittee recommended that the Board levy the maximum tax, a 2% increase on the base.  The Subcommittee provides the School Board with a written report on their recommendations. The Subcommittee meetings are not publicly noticed and are not open to the public. There are no recordings or broadcast of their meetings. 

– City of Piedmont –

Budget Advisory and Financial Planning Committee:  The committee members are appointed by the City Council and make recommendations to the City Council. Staff presents the fiscal condition of the City and the committee makes wide ranging recommendations to the Council on pensions, bond measures, budgeting, employee compensation, capital expenditures, fund reserves, taxes, and maintenance.  The committee has recently suggested a tax increase for sewers. Meetings are publicly noticed and open to the public. At the City’s recent Brown Act training seminar, the Acting City attorney instructed attendees that the Committee is a Brown Act body requiring notice and minutes. The meetings are generally held in the Police Department Emergency Operations Center (EOC) with no broadcasts or recordings.

City Council Budget Work Sessions:  The City Council annually meets to hear presentations from City staff on the upcoming fiscal year budget. The meetings are publicly announced and open to the public. The meetings are held in the Police Department Emergency Operations Center using a round table format. The sessions are pivotal to budget decisions.  No video recordings or broadcast of the meetings are produced.

Piedmont Planning Commission:  The Planning Commission will hold a “Community Meeting on the Housing Element” in a location known for close quarters and no cameras, the Emergency Operations Center (EOC) in the Police Department. The Planning Director and planning consultant announced that an “opportunity” for the community to voice their opinions on Piedmont’s proposed Housing Element was set for June 26 in the EOC.  The Housing Element could be controversial as it presents new regulations regarding increasing second units, adding affordable housing, building apartments on top of commercial buildings, assessing multiple unit zoning, and reducing taxes on affordable units.  There will be no broadcast or recordings of this meeting.

Capital Improvement Projects (CIP) Review Committee:  The CIP committee provides advice on how to spend millions of capital dollars.  The City Council appoints five members of the committee.  The other three members are: one, selected by and from the Piedmont Garden Club’s Piedmont Beautification Foundation; one, from the Recreation Commission; and one, from the Park Commission.   Money reserved by the City in the CIP fund has been used for numerous purposes including beautification projects, street and sidewalk improvements, recreational facilities, landscaping, and $2 million for underground utility problems. The meetings are publicly noticed.  An upcoming meeting on how to allocate $500,000 of WW Bond funds is to be held in the Council Conference Room.  There will be no broadcast of the meetings.

City Council Interviews of Applicants for Appointed City Positions, such as Commissions and Committees:  Annually, the City Council makes appointments to fill open positions on commissions and committees.  Although not specifically designated as financial positions, many of the members of the City’s various appointed committees and commissions routinely make recommendations with financial implications.  The sessions are publicly noticed and open to the public. The meetings have been held in the small City Council Conference Room. Public records do not include the names of applicants, and only those applicants who are appointed are publicly announced.  The Council’s interviews are not broadcast or otherwise recorded.

City Seminars on the Brown Act and Rules of Procedure: Two meetings in May to “train” elected and appointed officials on factors governing Piedmont meetings were held.  Notice was not provided of the meetings, and the meetings were not open to the public.   Councilmembers, commissioners, and appointed committee members were invited to the meetings held in the Council Chambers. During one of the meetings, a video was produced by the City and is available here.  No live broadcasts of the meetings were produced.

Meetings that can regularly be viewed by Comcast subscribers on Channel 27 and on home computers via live streaming are: City Council, Park, Planning, and Recreation Commissions, School Board, and from time to time various ad hoc committees.

  To view live and previously broadcast meetings, go to the City website at:

http://www.ci.piedmont.ca.us/video/

Former Council Member Garrett Keating comments on the City Council’s May 19 consideration of funding for sewers, maintaining recreational facilities, employee health benefits, the Budget and General Fund Reserves.

Sewers:

Council chose not to go forward with the “no tax”option and will likely choose one of the two tax options at the next Council meeting, June 2.

 The Budget Advisory and Financial Planning Committee (BAFPC) had no issues with the no tax option, so it is odd that Council felt there was some risk associated with it.   Other reasons were offered to accelerate the replacement program by adopting a tax rather than draw from the General Fund.  Environmental stewardship?

Sewer emergencies are declining and honestly, those concerned with Bay water quality would do better to contribute to the repair programs of other cities that are far greater polluters than Piedmont.

Maintain recreational facilities?  The biggest recreational need for Piedmont is field space and hours of use, not maintenance, but there are no proposals for that before City Council.

Increased contributions for retiree health benefits? A definite problem for the city.   Staff suggested Council would not address this need until 2021.

The Sewer Fund only needs $1M within the next 3 years, after which it is quite stable and an accelerated replacement program can likely be achieved. Piedmont has historically maintained high reserves, 20% of the General Fund. The current reserve for 2014-2015 is estimated at 21.5% and this would decline to 15% with the $1M loan from the General Fund.

The General Fund dropped $1M between 2006-2007 and 2007-2008 with virtually no impact on city services and $2M was found in city accounts to address undergrounding over-runs. There are more than adequate reserves to address this short-term loan. And Council could lower that need even more when year end transfer tax receipts come in. Transfer tax receipts are headed for $3.4M and Council has budgeted for $2.8. That $0.4 – 0.6 excess could be transferred to the Sewer Fund and offset a loan from the General Fund. That excess will manage to find its way into city balance sheets, no doubt, but Council could help that “15%” by using it to reduce this new tax.

Editors’ Note:  The opinions expressed are those of the author and not necessarily those of the Piedmont Civic Association.  Comments are welcomed below.

Prior PCA article.