Here’s what you need to know:
- The Council (5-0) adopted a list for the Fiscal Year 2022/2023 funded by SB-1, the Road Repair and Accountability Act of 2017
- The Council (5-0) introduced and waived the full reading of the ordinance, adding Chapter 2.53 to Article 2 of the Kerman Municipal Code Relating to adopting a Military Equipment Use Policy.
- The final budget for the Fiscal Year 2022/2023 shows a General Fund deficit of $3,741,109, with revenues estimated at $9,614,895 and expenditures estimated at $13,356,004.
- The Council (5-0) approved Contract No: 22- 0121 APR Title III C1 Congregate Nutrition Site Management with the Fresno-Madera Area Agency on Aging. The $24,372 FMAAA grant funds are used only for in-center meals for those seniors who are in the most need of a nutritious meal.
- The Council (5-0) approved an ordinance establishing a 10% Transient Occupancy Tax Measure for submission to the voters. The city has one 18-room motel that was built in 1970 and a 14-room motel is under construction.
The Scene
According to its website, the City Council serves as the policy-making board of the City. The Kerman City Council has five members, including the Mayor. The City elects its mayor for a two-year term and Council Members for four-year terms.
The City Council meets on the second and fourth Wednesday of each month at 6:00 p.m. at the Kerman City Hall, 850 S. Madera Ave. The meeting is accessible through Zoom.
Officials Present:
- Mayor Gary Yep
- Council Member Bill Nijjer
- Council Member Jennifer Coleman
- Council Member Kevin Nehring
- Mayor Pro Tem Ismael Herrera
Others Present:
- City Attorney Hilda Cantu-Montoy
- City Manager John Jansons
- Public Works Director Michael Barajas
- City Engineer Jerry Jones
- Chief’s Administrative Assistant Mary Rodrigues
- Chief of Staff Marc Benjamin
- Eduardo Ochoa
Discussions/Actions
Eduardo Ochoa requested Council for a vehicle permit. His concerns were directed to staff.
In the consent calendar, the Council (5-0) unanimously approved the items as follows:
A. Minutes
The Council (5-0) approved the minutes of June 8, 2022, as presented.
B. Payroll Report: 05/15/22 – 05/28/22: $177,062.31; Retro Pay & Other: $1,425.60; Overtime: $4,965.74; Standby: $1,279.87; Comp Time Earned: 49.50; Uniform Pay: $7,700.60; Holiday Pay: $25,326.53
The Council (5-0) approved the payroll as presented.
C. Warrants
1. Nos. 24286-24363 $349,843.76 ACH $97,396.13
2. Excepting Nos. 24333 $122.00 Fresno County Sheriff’s
The Council (5-0) approved warrants and electronic bank transfers. (Under Government Code 37208).
D. Monthly Investment Report Ending May 31, 2022 (JA)
The council (5-0) accepted the Monthly Investment Report as presented.
E. Remote City Council Meetings Under New Brown Act Requirements (AB 361) (MR)
Council (5-0) adopted a resolution reauthorizing remote teleconference public meetings by the City Council and all City boards, commissions, and standing committees under Assembly Bill 361.
On September 16, 2021, Governor Gavin Newsom signed AB 361 into law.
AB 361 amends the Brown Act to allow for remote public meetings without having to comply with standard provisions and restrictions for remote meetings under the Brown.
AB 361 temporarily writes into the Brown Act some remote meeting requirements the City has already met and implemented under the Governor’s prior Executive Orders issued during the COVID-19 pandemic.
AB 361 includes additional requirements in the form of an initial authorizing resolution (effective for up to 30 days) and subsequent resolutions to extend the use of remote meetings for additional periods of 30 days after that.
The bill included an urgency provision making the law immediately effective upon signature by the Governor.
F. Resolution Adopting Project List for the Fiscal Year 2022/2023 Funded by SB-1 The Road Repair and Accountability Act of 2017 (JA)
The Council (5-0) adopted a list for the Fiscal Year 2022/2023 funded by SB-1, the Road Repair and Accountability Act of 2017
Senate Bill 1 (SB1), known as the Road Repair and Accountability Act of 2017, was signed into law by the Governor in April 2017 to address basic road maintenance, rehabilitation, and critical safety needs on the state highway and local streets, and road systems.
To receive funding from the Road Maintenance and Rehabilitation Act (RMRA), the City must submit to the California Transportation Commission (CTC) a list of projects proposed to be funded with these funds under an adopted resolution by the City Council at a regular public meeting.
Based on Maintenance of Effort (MOE) established in Streets and Highways Code Section 2036, an annual match of $20,200 (minimum) from the City’s discretionary spending is required.
The purchase and installation of the Solar Light Poles Project on the East Side have been designated for the use of the MOE for Fiscal Year 2019/2020, the Fiscal Year 2020/2021, the Fiscal Year 2021/2022, and Fiscal Year 2022/2023.
The Fiscal Year 2021/2022 Street Rehabilitation project will continue into the Fiscal Year 2022/2023.
The total project cost for this fiscal year is $730,000, and the Fiscal Year 2022/2023 Street Rehabilitation project will start this fiscal year with a total of $750,000.
Annually, the City must submit a completed and an in-progress project report in December.
G. Resolution Approving Contract No: 22-0121 APR Title III C1 Congregate Nutrition Site Management with the Fresno-Madera Area Agency on Aging.
The Council (5-0) approved Contract No: 22- 0121 APR Title III C1 Congregate Nutrition Site Management with the Fresno-Madera Area Agency on Aging.
The City of Kerman has annually received funding for nutrition programs through the Fresno-Madera Area Agency on Aging (FMAAA).
In March 2020, the City suspended the program due to COVID-19 and the risk of infection to older adults.
Two years later, the Fresno-Madera Area Agency on Aging’s Governing Board was approved and awarded $24,372 in American Rescue Plan (APR) funds to reopen the Kerman Senior Center.
The resolution reaffirms the annual execution of the FMAAA Nutrition program contract.
The $24,372 FMAAA grant funds are used only for in-center meals for those seniors who are in the most need of a nutritious meal.
The amount offsets the labor expenditure of the part-time Nutrition Coordinator who manages the program daily.
Funds also help cover nutrition site supplies and other related expenditures.
While this amount has fluctuated over the years, the funds still supplement the operational cost to assure that senior citizens of Kerman have a nutritionally balanced meal.
H. Resolutions Adopting Fiscal Year 2022/2023 Budget, Amending the Fiscal Year 2021/2022 Budget, Establishing Appropriations Limit for the Fiscal Year 2022/2023, and Authorizing Number of Employee Positions and Titles (JA)
The Council (5-0) adopted the following resolutions:
1. City of Kerman Fiscal Year 2022/2023 Operating and Capital Budgets and amending the Fiscal Year 2021/2022 budget; and
2. Appropriations Limit for the Fiscal Year 2022/2023; and
3. Number of Employee Positions and Titles.
The preliminary City of Kerman budget was presented to the City Council on May 23, 2022, at the budget workshop.
The budget showed an estimated decrease of General Fund (GF) cash reserves from $9.74 million to $6.00 million if Measure M designated expenses are completed in the Fiscal Year 2022/2023.
Upon further review, the Measure M transfer for the salaries and benefits of three (3) officers for $226,502 to the General Fund for the Fiscal Year 2021/2022 was not included.
Therefore, staff prepared an updated budget with the GF revenue increase, which will increase GF reserves from $6.00 million to $6.23 million.
The final budget for the Fiscal Year 2022/2023 shows a General Fund deficit of $3,741,109, with revenues estimated at $9,614,895 and expenditures estimated at $13,356,004.
The Enterprise Funds budget showed a combined surplus of $255,857.
However, the City Council presented and approved the FID Agreement for the surface water on March 25, 2022.
Staff prepared an updated budget with the Enterprise Funds surplus decreasing from $255,857 to $199,742.
Thus, the proposed Fiscal Year 2022/2023 budget and amended 2021/2022 budget is presented herein for final adoption.
The total City-wide budget proposed for Fiscal Year 2022/2023 is $43.16 million and includes expenditures to the following funds:
- General Fund ($13,356,004)
- Enterprise Funds ($6,289,940)
- Internal Service Funds ($1,139,246)
- Special Revenue Funds ($ 2,116,463)
- Capital Projects ($20,260,953)
The General Fund is the largest individual fund and accounts for most services associated with municipal government, including parks, recreation, police, building, and planning services.
The General Fund is primarily funded from general tax revenues such as vehicle license fees, sales, and property tax revenues.
The proposed General Fund Budget expenditures of $13.35 million are approximately $3,741,109 more than projected revenues of $9.61 million.
A deficit will occur due to Measure M expenditures/projects and General Fund expenditures (personnel, Operations and Maintenance (O&M), debt service, and small Capital Projects).
The Enterprise Funds include Water, Wastewater, Solid Waste, and Storm Drain funds. These funds are funded primarily from user fees and other charges.
The proposed Enterprise Fund budget revenues of $6.48 million are approximately $199,742 more than the projected expenses of $6.28 million.
The Capital Project funds include local, state, and federal revenues to fund infrastructure projects throughout the City.
The capital projects reflect the City’s ongoing commitment to maintaining, improving, and expanding City facilities, parks, streets, and other major infrastructure.
The resolution approving the Fiscal Year 2022/2023 budget includes some adjustments that were deemed necessary due to unforeseen operational and capital outlay expenditures that were made throughout the year and were presented in the Mid-Year Budget Presentation.
The adoption of the proposed City of Kerman Fiscal Year 2022/2023 budget sets forth the appropriations for the delivery of municipal services.
A transfer from General Fund Reserves will be necessary to cover the projected deficit of $3,741,109 in the General Fund if projections are accurate and all planned expenditures/projects are completed by the end of the fiscal year.
3. Public hearing includes:
A. Introduction and First Reading of Ordinance Adding Chapter 2.53 to Article 2 of the Kerman Municipal Code Relating to Adoption of a Military Equipment Use Policy (JG).
The Council (5-0) introduced and waived the full reading of the ordinance, adding Chapter 2.53 to Article 2 of the Kerman Municipal Code Relating to adopting a Military Equipment Use Policy.
On September 30, 2021, Governor Gavin Newsom signed Assembly Bill 481, relating to law enforcement agencies’ use of military equipment.
Assembly Bill 481 requires law enforcement agencies to obtain approval of the applicable governing body by an ordinance adopting a “military equipment” use policy at a regular meeting.
“Military equipment” is defined in California Government Code section 7070.
In compliance with AB 481, The Military Equipment Use Policy, as outlined in Kerman Police Department Policy Manual, Policy 706 was published on the Kerman Police Department’s internet website on May 4, 2022.
The Kerman Police Department Policy Manual, Policy 706, was presented to the City Council on May 4, 2022. The Military Equipment Use Policy, as outlined in the Kerman Police Department Policy Manual, Policy 706, meets the requirements of California Government Code section 7070, subdivision (d).
Currently, the City of Kerman does not have any military equipment.
4. Department Reports consist of:
A. Establishment of a Transient Occupancy Tax (Hotel Tax) and Submitting Ballot Measure to Voters at November 8, 2022, Election (JAJ)
- The Council (5-0) approved an ordinance establishing a Transient Occupancy Tax Measure for submission to the voters.
- Calling and giving notice of a General Municipal Election to be held on Tuesday, November 8, 2022
- Requesting the Fresno County Clerk/Elections Official to conduct that election
- Requesting the consolidation of that election with the Statewide General Election and City General Municipal Election held on that date and authorizing City Clerk to carry out all necessary procedures.
The Council has held discussions concerning a Transient Occupancy Tax (TOT).
A TOT, also known as a lodging or hotel tax, is charged a percentage of a room rate to persons who occupy a hotel, motel, inn, and similar lodgings (hereafter collectively called “hotels” for 30 days or less.
The lodging operation collects the tax from the hotel guest and remits it to the City. The TOT is not a property tax or a tax on Kerman residents who are not hotel guests.
At the May 21, 2022, meeting, Council directed staff to survey the percentage of Transient Occupancy Tax charged by other cities.
Staff surveyed the surrounding cities and found that the standard TOT ranged from 8 percent to 12 percent.
On June 8, 2022, the Council directed that the City’s TOT percent should be 10%. Potential investors have been interested in building a hotel in Kerman.
Currently, the City has one motel built-in 1970 with 18 rooms and a new motel under construction with 14 rooms.
The establishment of the TOT requires the establishment of an ordinance and requires voter approval.
The ordinance is submitted as a general tax and requires only a majority vote (50 percent plus 1) for approval.
The City may properly use its funds to propose and prepare a measure for the ballot.
Still, campaigning and support for the initiative may be provided by the Council members and staff only in their capacities and not during City time.
However, the City may announce its reason for placing the initiative on the ballot.
No tax initiative passes without some support, but TOTs are frequently successful tax initiatives since the people voting for the TOT are resident voters and are unlikely to pay the tax themselves.
The TOT is calculated as a fixed percentage of the room rate, and the dollars generated increase as room rates increase.
The market rate for accommodations thus serves to regulate the revenue generated, and there is no need for an inflation adjustment.
Establishing a TOT rate of 10 percent would add revenue to the General Fund budget.
The revenue would go into the General Fund, where our greatest expenses are police and recreation services.
A TOT in this range would be consistent with most local cities and would not create a disadvantage for local motel operators.
This amount is added to the room rate. Revenue could range from $40,000 to $45,000 annually and would increase as occupancy and room prices increase.
The initial cost to add the ballot measure to the November general election ballot would be between $8,000 and $12,000.
Once established, there should be a minimal administrative expense to audit affected motel operators’ monthly or quarterly returns.
The Council adjourned at 9 p.m. The next Council meeting will be on Wednesday, July 13, 2022, at 6 p.m. through Zoom.
If you believe anything in these notes is inaccurate, please email us at Documenters-admin@fresnoland.org with “Correction Request” in the subject line.