CC MIN 06212022 - Laserfiche WebLink

In response to Councilmember Balch, Interim Director of Finance Shah confirmed staff recommends not adjusting money in the Rainy Day Fund. In response to Mayor Brown, Interim Director of Finance Shah confirmed the City has been meeting its reserve goals over the past few years. She noted the City typically ends up with a clean audit annually. In response to Mayor Brown, Interim Director of Finance Shah confirmed the new fire alarms and generator added to the CIP by staff were included in the May 31 presentation at a combined cost of $1.4 million. Mayor Brown opened the public hearing. There being no speakers, the public hearing was closed. In response to Councilmember Arkin, Interim Director of Finance Shah confirmed the City's goal is to have a minimum reserve of 20%, a maximum reserve of 30%, and a target reserve of 25%. She confirmed from the May 31 workshop there is 29.2% in reserve. Councilmember Arkin stated having a 29.2% reserve is fiscal responsibility. She stated changing the policy could be a future discussion but does not change anything today. Councilmember Arkin moved to approve the Mid-Term Operating Budget and CIP with an additional allocation of$1 million towards the skatepark. Councilmember Testa seconded the motion. Councilmember Narum stated prior Councils have demonstrated their fiscal conservation and it is what Pleasanton is built upon. She noted inflation and interest rates are rising and expenses will increase with them. Councilmember Narum made a substitute motion to approve the Mid-Term Operating Budget and CIP and not take any money from reserves. She advised there are no economic indicators denying rough times are ahead. Councilmember Balch seconded the substitute motion. He advised if the current budget showed an additional $10 million in costs the reserve would still be deemed sufficient based on policy. He acknowledged the proposed reserve is at the high end of the range but noted they are still facing continued impacts from the pandemic and businesses will need to start to repay loans whenever the Emergency Order is lifted. He advised inflation is being felt all over and noted the City will be taking out some debt on a per- and polyfluoroalkyl substances (PFAS) treatment plant in a period of rising interest rates. He stated reducing the reserve for any CIP project is not in the City's best interests. He advised the original motion would accelerate the reduction of reserves in a period of great uncertainty. SUBSTITUTE MOTION: It was m/s by Narum/Balch to approve the Mid-Term Operating Budget and Capital Improvement Program as recommended by staff and not allocate additional funds from the reserve account. Motion failed by the following vote: Ayes: Councilmembers Balch, Narum Noes: Councilmembers Arkin, Testa, Mayor Brown Absent: None In response to Councilmember Testa, Interim Director of Finance Shah confirmed the City had budget surpluses during the pandemic but noted the City received $8.6 million in federal relief funding and also had cost savings from closed programs. She stated the surplus in the FY 21/22 mid-year update was $5.7 million. City Council Minutes Page 9 of 18 June 21,2022