This administrative report and three items before the City Council are related to the adoption of the Fiscal Year 2021-22 City of Bakersfield operating and capital improvement budgets.

The first item is a resolution adopting the FY 2021-22 budget, totaling $683,220,057. The budget is comprised of the operating budget, including transfers, totaling $582,972,699  and the capital improvement budget totaling $100,247,358. The proposed budget reflects the funding of the City’s operating cost, including $77,977,000 in Bakersfield Public Safety and Vital Services (PSVS) Measure appropriations and the funding of various capital improvements, including street and road resurfacing, park and recreation facilities, and improvements to other City-owned facilities for the 2021-22 fiscal year.

The City released its Proposed Budget for FY 2021-22 on May 5, 2021. On May 10th and June 7th, staff presented department and division proposed budgets to the City Council. A noticed public hearing for the FY 2021-22 budget was held on June 2, 2021. A total of 54 public comments were received as a part of the public hearing. 

The budget proposed for City Council adoption this evening makes significant, sustained investment in action items associated with all City Council Goals. Select highlights of the proposed budget include:

• Proposed addition of 28 new sworn police positions
• Proposed addition of 17 new civilian police positions
• Expansion of private security services
• Continued support of the Class II ISO-rated Bakersfield Fire Department through facility enhancement projects and specialized equipment acquisitions totaling $755,000 across all funds
• Continued operation of the Brundage Lane Navigation Center to address low barrier homeless needs
• Additional allocation of $6 million toward affordable housing construction projects
• Over $6 million allocated across multiple funding sources to Recreation and Parks improvement projects and facility enhancements in all wards of the City
• Six new positions to support Parks Rapid Response Teams and to add one mow team to enhance landscape maintenance efforts within streetscapes
• Six new positions within the Code Enforcement Division to address non-homeless related code activities such as nuisance property abatement
• $1.77 million in PSVS Measure funding to implement elements of the soon to be completed economic development strategic plan
• $500,000 in PSVS Measure funding for innovation lab and workforce development programs
• $1 million in PSVS Measure funding for business assistance tools
• Continued funding of $700,000 in PSVS Measure funds for Economic Opportunity Area program
• Additional allocation of $3 million of PSVS Measure funding for community revitalization projects
• Operating and capital funding for local streets and right-of-way improvements across all funding sources totaling nearly $60 million (excludes proposed landscaping, dedicated multi-use path and non-right-of-way infrastructure projects)
• $16.1 million in federal, state and local funding to construct three multi-use paths
• Continued PSVS Measure funding for the Clean City Teams and Pop-Up Drop Off Events as part of the Clean City Initiative
• Continued PSVS Measure funding for the downtown ambassador litter removal teams
• Continued PSVS Measure funding for the downtown private security and waste clean-up teams
• Additional allocation of $1.2 million of PSVS Measure funding for urban redevelopment projects in the downtown core and east Bakersfield
• Approximately $2 million in new PSVS funding for resources to maintain and enhance the Kern River Parkway multi-use path and adjacent public spaces

As proposed, the budget includes the addition of 97 full time positions throughout the operations, including the addition of 28 sworn police positions in direct response to the City Council priorities of enhancing public safety services. Additional positions included in the budget provide for the expansion of the successful rapid response team within the Recreation and Parks Department and new Code Enforcement positions to address non-homeless related property issues. The budget also includes five positions within the Economic and Community Development Department. Out of the 97 new positions included within this budget, 79 are funded by Public Safety and Vital Services and 9 are proposed to be funded by historical general fund resources. The remaining positions are funded by enterprise or special funding sources.

Changes and Modifications to the Proposed Budget

As compared to the proposal presented to the City Council on May 5, 2021, the budget before the City Council contains several technical and programmatic changes. These programmatic changes outlined in further detail below and are reflected within Exhibit "A" of the budget adoption resolution:

• Kern River Parkway Resources: Based on community feedback and City Council direction received on June 7^th, this revision includes the addition of 11 full time positions to address various issues along the Kern River Parkway multi-use path and adjacent public spaces. This plan includes the addition of a six-person Code Enforcement rapid response team, a four-person Recreation and Parks team and one staff member within the Public Works Department. Additionally, this plan includes funding for contracted litter abatement services and homelessness outreach services. The total cost for this package is approximately $1.94 million and is proposed to be funded by PSVS Measure funds. The PSVS Measure funds for this program are proposed to be redirected from two freeway landscape enhancement projects. The remaining funding in these two freeway projects, after accounting for the Kern River Parkway resources, will be used as potential matching funds for an anticipated state freeway beautification grant program pending final approval within the state’s budget.
  
  
• Convention Center Lobby Remodel Project: Over the past several years, multiple projects have been completed that have modernized and improved areas of the Mechanics Bank Convention Center and Arena. The lobby of the Convention Center has not been subject to substantial remodeling since the late 1980’s. The existing finishes are dated and do not project a welcoming atmosphere for events being held at the venue. At the request of Councilmember Gonzales during the May 10^th budget workshop, staff has added $50,000 of capital outlay funds to the FY 22 capital improvement budget to begin the process of updating and modernizing the lobby space. The FY 22 work will include design and environmental work, with staff anticipating including the construction funding in the FY 23 capital improvement budget.
  
  
• During a prior meeting of the Safe Neighborhoods Committee, Councilmember Parlier requested staff consider doubling the number of motorcycles that are proposed to be added to the Bakersfield Police Department fleet in FY 22. As originally proposed, the FY 22 budget included four new motorcycles to replace sedans for the traffic division. Based on City Council direction provided on June 7, staff is preparing to replace four additional motorcycles in FY 22, for a total of eight motorcycles. This change does not carry any budgetary adjustment, but is noted for the City Council and public’s information.
  
  

Appropriations Limit

The appropriations limitation imposed by Propositions 4 (1979) and later amended by Proposition 111 (1990) creates a restriction on the amount of government revenue which may be appropriated in any fiscal year. The appropriations limit applies only to those revenues defined as “proceeds of taxes,” such as property tax, sales tax and transient occupancy tax. The appropriations limit is based on actual appropriations during the base year (1986-87), and increases each year using specified growth factors. According to the Revenue and Taxation Code, Section 7910, local governments must establish its appropriations limit by resolution each year at a regularly scheduled meeting or a noticed special meeting. During any fiscal year, a government entity may not appropriate any proceeds of taxes received in excess of the appropriations limit.

The appropriations limit is different for each agency and the limit changes each year. For calculations purposes, the appropriations limit from the previous fiscal year is increased based on population growth and inflation factors as provided by the State Department of Finance.

A resolution adopting the Fiscal Year 2021-22 appropriations limit of $483,653,044 is included as part of the budget adoption process for Council consideration. The City’s appropriations which are subject to the limit total are $269,105,300. Therefore, the proposed appropriations are significantly below the maximum limit allowed by State law.

Publicly Available Pay Schedule

CalPERS requires all member agencies have a publicly available pay schedule. The City has historically made this information available within its adopted budget document and on the City's web site. However, CalPERS now requires the governing body of public agencies to approve and adopt this schedule at a regularly scheduled public meeting. Therefore, the approval of this item is necessary to comply with CalPERS regulations. The attached schedule reflects the most current pay schedule for all positions, inclusive of any rate adjustments as a result of previously approved labor agreements effective July 2021.