City of San Bruno MSR, 05-08-2024

Item 5 May 8, 2024 To: LAFCo Commissioners From: Rob Bartoli, Executive Officer Subject: Consideration of Final Municipal Service Review for the City of San Bruno Summary and Background LAFCo prepared comprehensive Sphere of Influence (SOI) studies and adopted SOIs for cities and special districts in 1985 and has subsequently reviewed and updated spheres on a three- year cycle. Updates focused on changes in service demand within the boundaries of cities and special districts. After enactment of the Cortese-Knox-Hertzberg Local Government Reorganization Act of 2000 (CKH Act) and the new requirement to prepare MSRs in conjunction with or prior to SOI updates, LAFCo began the process of preparing Municipal Service Review (MSR) and SOI updates in late 2003. This Circulation Draft Municipal Service Review is the first MSR for the City of San Bruno. The City of San Bruno (the City or San Bruno) was incorporated on December 23, 1914. As of 2020, the population of San Bruno was 43,908. The City’s Sphere of Influence (SOI) includes approximately 260 acres of unincorporated San Mateo County, including the San Francisco County Jail and San Francisco International Airport lands west of US 101. Since 1979, the SOI for the City has also included a recommendation to detach Capuchino High School from the City of San Bruno and annex the property to the City of Millbrae. The High School is connected to San Bruno by a narrow corridor with irregular boundaries and is largely surrounded by the City of Millbrae. Currently, the City of Millbrae provides water and sewer to the property. The City provides the following municipal services: law enforcement, structural fire protection, parks and recreation, library, streets, lighting, water, wastewater and storm drain and flood control. The City’s revenue was impacted by the COVID-19 pandemic and is slowly recovering. Although the City has needed to draw down on its reserves over the past three years, it has been able to maintain a healthy reserve and continue to meet service demands. Updates to Final Circulation MSR COMMISSIONERS: KATI MARTIN, CHAIR, SPECIAL DISTRICT ▪ RAY MUELLER, VICE CHAIR, COUNTY ▪ VIRGINIA CHANG-KIRALY, SPECIAL DISTRICT ▪ HARVEY RARBACK, CITY▪ TYGARJAS BIGSTYCK, CITY ▪ WARREN SLOCUM, COUNTY ▪ ANN DRAPER, PUBLIC ALTERNATES: CHRIS MICKELSEN, SPECIAL DISTRICT ▪ ANN SCHNEIDER, CITY ▪ JAMES O’NEILL, PUBLIC ▪ NOELIA CORZO, COUNTY STAFF: ROB BARTOLI, EXECUTIVE OFFICER ▪ VACANT, MANAGEMENT ANALYST ▪ TIM FOX, LEGAL COUNSEL▪ DIANE ESTIPONA, CLERK May 8, 2024 San Bruno MSR Page 2 San Mateo LAFCo received one comment during the comment period for the draft MSR. The comment related to water and sewer services to Capuchino High School. The draft MSR misstated that the City of San Bruno provides these services. The City of Millbrae provides water and sewer to the High School property. Other edits to the MSR include: • Clarification that while the City’s budget process is transparent and has highlight many financial issues, the City is facing a structural deficit. • The addition of a recommendation that the City prepare LAFCo contingency plans should the City lose the litigation regarding the allocation of sales tax. • Minor typographical corrections. Current Key Issues Key issues identified in compiling information on the City of San Bruno include the following: • While LAFCo staff has not identified any issues with the City’s budgeting practices, the City has not adopted a balanced budget in the last five fiscal years, it has been able to reduce some general fund expenditures and draw from its reserves to fund ongoing operations while maintaining a positive fund balance. • Although the City is financially healthy and is anticipated to be able to meet service demands of foreseeable growth with planned infrastructure improvements, capital the CityNet, the City’s cable and internet service, and Stormwater Enterprise funds are operating at a deficit. The City is exploring ways to create new revenue so that it is able to continue delivering services. • Like many cities and agencies throughout the Country, San Bruno’s revenue was impacted the COVID-19 pandemic, with as much as a 75% reduction in the City’s transient occupancy tax (TOT), one of the most important sources of revenue for the City. • The City is engaged in ongoing litigation with the State regarding the allocation of sales tax to the City. If the City was to lose the litigation, the City would owe up to approximately $15.3 million to the State, which would impact the City’s General Fund. • The City’s adopted Housing Element proposes to increase its housing stock by 22% over the next eight years. The City’s General Plan, coupled with the Transit Corridor and Bayhill Specific Plans, have largely evaluated the impacts of the potential growth and determined that the potential growth will not have a significant impact on the adequacy and delivery of municipal services. Proposed MSR Recommendations As required by State law, there are seven areas of determination, including local policies as set forth in Section 56430. 1. Growth and population projections for the affected area. May 8, 2024 San Bruno MSR Page 3 2. The location and characteristics of any disadvantaged unincorporated communities1 within or contiguous to the SOI. 3. Present and planned capacity of public facilities, adequacy of public services, and infrastructure needs or deficiencies including needs or deficiencies related to sewers, municipal and industrial water, and structural fire protection in any disadvantaged, unincorporated communities within or contiguous to the SOI. 4. Financial ability of agencies to provide services. 5. Status of, and opportunities for, shared facilities. 6. Accountability for community service needs, including governmental structure and operational efficiencies. 7. Any other matter related to effective or efficient service delivery, as required by LAFCo policy. a. Water Resiliency and Climate Change b. Impact of Natural Hazards and Mitigation Planning For the Circulation Draft, LAFCo has the following determinations and recommendations: 1. Growth and Population Determination As of 2020, the City of San Bruno is home to 43,908 residents and contains 16,622 housing units. The City’s adopted Housing Element proposes to increase its housing stock by 22% over the next eight years. The City’s General Plan, coupled with the Transit Corridor and Bayhill Specific Plans, has largely evaluated the impacts of the potential growth and determined that the potential growth will not have a significant impact on the adequacy and delivery of municipal services. 2. Disadvantaged Unincorporated Communities Determination The City’s sphere of influence and municipal boundaries are nearly contiguous with the exception of the undeveloped San Francisco International Airport Lands and San Francisco County Jail #3. Neither unincorporated area meets the definition of a disadvantaged unincorporated community 3. Capacity and Adequacy of Public Facilities and Services Determination and Recommendations LAFCo staff is not aware of any deficiencies in agency capacity to meet existing service needs for which the City of San Bruno does not have a plan in place to resolve. The City is aware that the CityNet and Stormwater Enterprise funds are operating at a deficit and is exploring ways to create new revenue so that it is able to continue delivering services. 1 “Disadvantaged community” means a community with an annual median household income that is less than 80 percent of the statewide annual median household income. This area of determination does not apply to the study area. May 8, 2024 San Bruno MSR Page 4 The City routinely adopts a multi-year capital improvement plan for city-owned infrastructure and facilities; however, the City is unable to make multi-year funding commitments for CIP projects related to the Stormwater or CityNet Enterprise funds due to their budget shortfalls. Recommendations - 1. LAFCo encourages the City to continue explore options regarding CityNet, including potential revenue increases or the transfer of the service to another operator. 2. LAFCo encourages the City to continue to review potential revenue increases or the creation of the dedicated revenue source for stormwater projects. 4. Financial Ability Determination and Recommendations LAFCo staff has not identified any issues with the City’s budgeting practices regarding process. The City of San Bruno prepares an annual operating and capital improvement program (CIP) budget for the upcoming fiscal year that gets adopted by the City Council at a noticed public hearing before June 30th. The City also produces an Annual Comprehensive Financial Report (ACFR) that is reviewed by City Council. The City has not adopted a balanced budget in the last five fiscal years, it has been able to reduce some general fund expenditures and draw from its reserves to fund ongoing operations while maintaining a positive fund balance. The City is currently facing a structural deficit. Looking ahead, the City intends to make additional adjustments and look for opportunities to address its structural deficits. City staff intends to present a long-range forecast to City Council in FY 23-24 that explores new revenue opportunities. The City has not met its annual General Fund reserve goal in four of the last five fiscal years by as little as 1% and as much as 6%. The City has not achieved its target for the Emergency Disaster Fund in the past five fiscal years by less than $200K in the past 3 fiscal years. Enterprise funds such as the Wastewater Enterprise Fund, Stormwater Enterprise Fund, and CityNet Fund have experiences shortfalls in revenue over the last few years. In the case of the Stormwater Enterprise Fund and CityNet Fund, these funds have had to utilize fund from the City’s General Fund in order to sustain operation and capital costs. The City is engaged in ongoing litigation with the State regarding the allocation of sales tax to the City. If the City was to lose the litigation, the City would owe up to approximately $15.3 million to the State, which would impact the City’s General Fund. The City of San Bruno has maintained high ratings on debt issuances. Recommendations - 1. LAFCo encourages the City to continue to explore options regarding CityNet, including potential revenue increases or the transfer of the service to another operator. 2. LAFCo encourages the City to continue to review potential revenue increases or the creation of a dedicated revenue source for stormwater projects. 3. LAFCo encourages the City to continue to explore revenue and expenditure options related to the City’s General Fund in order to adopt a balanced annual budget. May 8, 2024 San Bruno MSR Page 5 4. LAFCo encourages the City to prepare contingency plans should the City lose the litigation regarding the allocation of sales tax. 5. Shared Service and Facilities Determination and Recommendations The City of San Bruno partners with several agencies to share resources and reduce costs. LAFCo staff has not identified other opportunities that the City could engage in to share costs and/or reduce duplication of resources, facilities or infrastructure. 6. Accountability, Structure, and Efficiencies Determination The City of San Bruno ensures that public meetings are accessible and well-publicized. LAFCo staff is not aware of any failures to comply with disclosure laws or the Brown Act. The City has experienced staff turnover in recent years but there are no issues related to operational efficiencies. The City prepares and adopts and annual budget, and annual independent audits are reviewed at a City Council meeting. LAFCo staff does not recommend any changes to the City’s governmental structure or operations that will increase accountability and efficiency. Recommendation: 1. LAFCo staff recommends publishing and posting City Council meeting minutes on the City’s website more frequently and/or in a more consistent manner so that the public can easily locate information on the actions taken at city Council meetings. 7. Other Issues Determinations and Recommendations The City of San Bruno is engaged in activities to address hazard mitigation, wildfire prevention, and sea level rise for City residents and businesses, including engagement with One Shoreline. While not a service delivery issue, Monte Verde Elementary School, part of the South San Francisco Unified School District is split by the City of San Bruno – City of South San Francisco city boundary line In the future, the cities may wish to consider submitting an application to LAFCo to adjust the boundary so that the city boundary no longer splits the school site. Recommendation - 1. LAFCo encourages the City of San Bruno to continue its work in the areas of natural hazard mitigation and sea level rise and continue to coordinate with partner agencies. 2. In the future, the City of San Bruno and the City of South San Francisco may wish to consider submitting an application to LAFCo to adjust the city boundary so that this line follows property boundaries of the Monte Verde Elementary School site. Sphere of Influence Determination LAFCo is required to make five written determinations when establishing, amending, or updating an SOI for any local agency that addresses the following (§56425(e)): 1. The present and planned land uses in the area, including agricultural and open-space lands. San Bruno’s SOI spans approximately 6.1 square miles, including the San Francisco County Jail and the San Francisco International Airport. The City’s land use is primary May 8, 2024 San Bruno MSR Page 6 residential with some open space, office, commercial, and industrial uses. There is no agricultural land within the City’s SOI. 2. The present and probable need for public facilities and services in the area. The City of San Bruno’s facilities and services meet the needs of its residents and businesses, and the City anticipates that it will be able to provide adequate facilities and services for the anticipated growth within its service area. 3. The present capacity of public facilities and adequacy of public services that the agency provides or is authorized to provide. The City currently provides adequate public services to its residents, including fire and police protection, water, sanitary sewer, and stormwater services. In addition, the City routinely adopts a Capital Improvement Program to fund critical repairs, replacements, and improvements to the City’s infrastructure and facilities. 4. The existence of any social or economic communities of interest in the area if the Commission determines that they are relevant to the agency. There are no social or economic communities of interest within the City of San Bruno SOI. 5. For an update of a SOI of a city or special district that provides public facilities or services related to sewers, municipal and industrial water, or structural fire protection, that occurs pursuant to Section 56425(g) on or after July 1, 2012, the present and probable need for those public facilities and services of any disadvantaged unincorporated communities within the existing sphere of influence. No change to the Sphere of Influence of the City of San Bruno is proposed at this time. Public/Agency Involvement The primary source of information used in this MSR has been information collected from agency staff and adopted plans, budgets, reports, policies, etc. On April 28, 2024, a Notice of Public Hearing for the Draft MSR was released by LAFCo and published in the San Mateo County Times. In addition, notices were sent to every “affected agency”, meaning all other agencies and school districts with overlapping service areas. One comment was provided to LAFCo during the public review period related to utility services to Capuchino High School. Environmental Review/CEQA The MSR is categorically exempt from the environmental review requirements of the California Environmental Quality Act (CEQA) under Section 15303, Class 6, which allows for the basic data collection, research, experimental management, and resource evaluation activities that do not result in a serious or major disturbance to an environmental resource. The MSR collects data for the purpose of evaluating municipal services provided by an agency. There are no land use changes or environmental impacts created by this study. The MSR is also exempt from CEQA under section 15061(b)(3), the common sense provision, which states that CEQA applies only to projects which have the potential to cause a significant effect on the environment and where it is certain that the activity will have no possible significant effect on the environment, the activity is exempt from CEQA. May 8, 2024 San Bruno MSR Page 7 The MSR and SOI update will not have a significant effect on the environment as there are no land use changes associated with the documents. Recommendation 1. Open the public hearing and accept public comment. 2. Accept the Final Municipal Service Review for the City of San Bruno 3. Adopt the Municipal Service Review Determinations and Recommendations contained in this report. Attachment A. Municipal Service Review for the City of San Bruno B. Resolution No. 1320 for the City of San Bruno Municipal Service Review C. MSR Areas of Determinations and Recommendations for the City of San Bruno Municipal Service Review and Sphere of Influence Review for the City of San Bruno Final Adopted May 15, 2024 Municipal Service Review and Sphere of Influence Review for the City of San Bruno SUBJECT AGENCY: City of San Bruno 567 El Camino Real San Bruno, CA 94066 Contact: Alex D. McIntyre, City Manager CONDUCTED BY: San Mateo Local Agency Formation Commission 455 County Center, 2nd Floor Redwood City, CA 94063 (650) 363-4224 Commissioners: Commission Alternates: Kati Martin, Chair, Special District Member Chris Mickelsen, Special District Member Ray Muller, Vice Chair, County Member James O’Neill, Public Member Tygarjas Bigstyck, City Member Noelia Corzo, County Member Virginia Chang-Kiraly, Special District Member Ann Schneider, City Member Harvey Rarback, City Member Warren Slocum, County Member Ann Draper, Public Member Staff: Rob Bartoli, Executive Officer Diane Estipona, Commission Clerk Tim Fox, Legal Counsel LAFCo Municipal Service Review and Sphere of Influence Update City of San Bruno Table of Contents EXECUTIVE SUMMARY ........................................................................................................... 2 Section 1: MSR Overview ....................................................................................................... 2 San Mateo Local Agency Formation Commission .................................................................................... 2 Local Government in San Mateo County .................................................................................................. 3 Purpose of a Municipal Service Review/Sphere of Influence Update ...................................................... 3 Section 2. Summary of Key Issues ......................................................................................... 4 Section 3: Affected Agencies .................................................................................................. 5 Section 4: City of San Bruno ................................................................................................... 5 Background & Overview, .......................................................................................................................... 5 1) Growth and Population .................................................................................................................... 7 2) Disadvantaged Unincorporated Communities .............................................................................. 11 3) Capacity and Adequacy of Public Facilities and Services ............................................................... 12 5) Shared Service and Facilities .......................................................................................................... 29 6) Accountability, Structure, and Efficiencies .................................................................................... 30 7) Other .............................................................................................................................................. 32 Section 5. Sphere of Influence Review and Update .............................................................. 34 Determinations ....................................................................................................................................... 34 Appendix A. City of San Bruno Fact Sheet ........................................................................ 36 Appendix B. References .................................................................................................. 37 Final MSR─ City of San Bruno EXECUTIVE SUMMARY Section 1: MSR Overview This report is a Municipal Service Review (MSR) and Sphere of Influence (SOI) update for the City of San Bruno (City). California Government Code Section 56430 requires that the Local Agency Formation Commissions (LAFCos) complete MSRs and SOI reviews on all cities and special districts. LAFCo is an independent entity with jurisdiction over the boundaries of cities and special districts. An SOI is a plan for the boundaries of a city or special district. The MSR and SOI update do not represent a proposal1 for the reorganization of agencies, but rather a State- mandated study of service provisions of an agency. Once adopted, the service review determinations are considered in reviewing and updating the SOI pursuant to Section 56425. The SOI, which serves as the plan for the boundaries of a special district, is discussed in the second part of this report. This State-mandated study is intended to identify municipal service delivery challenges and opportunities and provides an opportunity for the public and affected agencies to comment on city, county, or special district services and finance; and opportunities to share resources prior to LAFCo adoption of required determinations. San Mateo Local Agency Formation Commission San Mateo Local Agency Formation Commission (LAFCo or “the Commission”) is a State- mandated, independent commission with county-wide jurisdiction over the boundaries and organization of cities and special districts including annexations, detachments, incorporations, formations, and dissolutions. LAFCo also has authority over the extension of service outside city or district boundaries and activation or divestiture of special district powers. Among the purposes of the Commission are discouraging urban sprawl, preserving open space and prime agricultural lands, planning for the efficient provision of government services, and encouraging the orderly formation and development of local agencies based upon local conditions and circumstances. LAFCo operates pursuant to The Cortese-Knox-Hertzberg Local Government Reorganization Act of 2000 (CKH Act) contained in Government Code Sections 56000 and 57000. The Commission includes two members of the County Board of Supervisors, two members of city councils from the 20 cities, two board members of 21 of the 22 independent special districts, a public member, and four alternate members (county, city, special district, and public). LAFCo prepared comprehensive SOI studies and adopted SOIs for cities and special districts in 1985 and has subsequently reviewed and updated spheres on a three-year cycle. Updates focused on changes in service demand within the boundaries of cities and special districts. After the enactment of the CKH Act and the new requirement to prepare MSRs in conjunction with or prior to SOI updates, LAFCo began the process of preparing MSR and SOI updates in late 2003. 1 An application for annexation may be submitted by 5 percent of the voters or landowners of territory proposed for annexation or by resolution of the District. 2 Final MSR─ City of San Bruno Studies were first prepared on sub-regional and County-wide independent special districts, followed by South County cities and special districts. Local Government in San Mateo County Municipal service providers in San Mateo County include the County, 20 cities, 22 independent special districts, five subsidiary districts governed by city councils, and 33 County-governed special districts. It merits emphasis that the County plays a dual role that differs from cities or districts. Districts provide a limited set of services based on enabling legislation, while cities generally provide basic services such as police and fire protection, sanitation, recreation programs, planning, street repair, and building inspection. The County, as a subdivision of the State, provides a vast array of services for all residents, including social services, public health protection, housing programs, property tax assessments, tax collection, elections, and public safety. Along with independent water, sewer, and fire districts, the County also provides basic municipal services for residents who live in unincorporated areas. According to Census 2020 data, 63,205 of the County’s total 765,417 residents live in unincorporated areas. Purpose of a Municipal Service Review/Sphere of Influence Update This MSR/SOI Update examines the City of San Bruno. LAFCo prepares the MSR and SOI update based on source documents that include Adopted Budgets, Basic Financial Reports and Audits, Capital Plans, Urban Water Management Plans, and Planning Documents, including the General Plan. Draft MSRs and SOI updates are then circulated to the agencies under study, interested individuals, and groups. The Final MSR and SOI update will include comments on the circulation draft and recommended determinations for Commission consideration. MSR determinations must be adopted before the Commission updates or amends an SOI. Per Section 56430, the areas of MSR determination include: 1. Growth and population projections for the affected area. 2. The location and characteristics of any disadvantaged unincorporated communities2 within or contiguous to the SOI. 3. Present and planned capacity of public facilities, adequacy of public services, and infrastructure needs or deficiencies including needs or deficiencies related to sewers, municipal and industrial water, and structural fire protection in any disadvantaged, unincorporated communities within or contiguous to the SOI. 4. Financial ability of agencies to provide services. 5. Status of, and opportunities for, shared facilities. 6. Accountability for community service needs, including governmental structure and operational efficiencies. 2 “Disadvantaged community” means a community with an annual median household income that is less than 80 percent of the statewide annual median household income. This area of determination does not apply to the study area. 3 Final MSR─ City of San Bruno 7. Any other matter related to effective or efficient service delivery, as required by LAFCo policy. a. Water Resiliency and Climate Change b. Impact of Natural Hazards and Mitigation Planning Sphere of Influence Determinations: LAFCo is required to make five written determinations when establishing, amending, or updating an SOI for any local agency that addresses the following (§56425): 1. The present and planned land uses in the area, including agricultural and open-space lands. 2. The present and probable need for public facilities and services in the area. 3. The present capacity of public facilities and adequacy of public services that the agency provides or is authorized to provide. 4. The existence of any social or economic communities of interest in the area if the Commission determines that they are relevant to the agency. 5. For an update of a sphere of influence of a city or special district that provides public facilities or services related to sewers, municipal and industrial water, or structural fire protection, that occurs pursuant to Section 56425(g) on or after July 1, 2012, the present and probable need for those public facilities and services of any disadvantaged unincorporated communities within the existing sphere of influence. Disadvantaged Unincorporated Communities SB 244 (Chapter 513, Statutes of 2011) made changes to the CKH Act related to “disadvantaged unincorporated communities,” including the addition of MSR determination #35 and SOI determination #5 listed above. Disadvantaged unincorporated communities, or “DUCs,” are inhabited, unincorporated territories (containing 12 or more registered voters) where the annual median household income is less than 80 percent of the statewide annual median household income. City of San Mateo does not have any disadvantaged unincorporated communities within its SOI. Section 2. Summary of Key Issues • The City has not adopted a balanced budget in the last five fiscal years. During this fiscal years the City has been able to reduce some general fund expenditures and draw from its reserves to fund ongoing operations while maintaining a positive fund balance. • Although the City is anticipated to be able to meet service demands of foreseeable growth with planned infrastructure improvements, capital the CityNet, the City’s cable and internet service, and Stormwater Enterprise funds are operating at a deficit. The City is exploring ways to create new revenue so that it is able to continue delivering services. 4 Final MSR─ City of San Bruno • Like many cities and agencies throughout the Country, San Bruno’s revenue was impacted by the COVID-19 pandemic, with as much as a 75% reduction in the City’s transient occupancy tax (TOT), one of the most important sources of revenue for the City. The City is also currently facing a structural deficit with loses in three of the last four budget years. • The City is engaged in ongoing litigation with the State regarding the allocation of sales tax to the City. If the City was to lose the litigation, the City would owe up to approximately $15.3 million to the State, which would impact the City’s General Fund. • The City’s adopted Housing Element proposes to increase its housing stock by 22% over the next eight years. The City’s General Plan, coupled with the Transit Corridor and Bayhill Specific Plans, has largely evaluated the impacts of the potential growth and determined that the potential growth will not have a significant impact on the adequacy and delivery of municipal services. Section 3: Affected Agencies County and Cities: City of San Bruno and San Mateo County School Districts: San Bruno Park School District, South San Francisco Unified School District, San Mateo Union High School District, San Mateo County Community College District, Independent Special Districts: Peninsula Health Care District, San Mateo County Harbor District, San Mateo County Mosquito & Vector Control District Dependent Special Districts: None Section 4: City of San Bruno Background & Overview3,4 Twelve miles south of the City of San Francisco, the City of San Bruno is located at the crossroads of two main paths around the San Bruno Mountains, Bayshore Road and Mission Road/Railroad. The City is bordered by the City of South San Francisco to the north, Millbrae to the south, Pacifica and the San Francisco County Jail to the west, and San Francisco International Airport to the east. The City of San Bruno was incorporated on December 23, 1914, and was home to approximately 1,400 residents and remained rural in nature until the 1940s. During World War II, the United States government established a military presence in the City and used the Tanforan horseracing track for the internment of Americans of Japanese descent during the war. Additionally, the City experienced a housing boom which increased the population to over 35,000 by the mid-1960s. In 2000, the Bay Area Rapid Transit (BART) opened a station in San Bruno that connected the City to San Francisco and East Bay. That same year, the US government sold a majority of the 3 City of San Bruno FY 23-Budget 4 U.S. Census Bureau, City of San Bruno 2020 U.S. Census Bureau Profile 5 Final MSR─ City of San Bruno naval base to a private developer. Over the next 20 years, the old naval base was transformed into The Crossing, a transit-oriented mixed-use development. In 2010, a PG&E pipeline exploded and caused a fire in the Crestmoor neighborhood that destroyed 38 homes and damaged many others. The City completed the Crestmoor neighborhood rebuild in 2020, including the new Earl-Glenview Park. As of 2020, the population of San Bruno is 43,908. San Bruno is a general law city governed by a mayor and four City Council members. The mayor is elected to a 2-year term, and city council members serve overlapping 4-year terms. Starting in 2022 City Councilmembers are now elected by district. The City Council sets policies and carries out legislative activities. The City Manager, appointed by the City Council, is tasked with overseeing the City’s daily operations and appointing other City officials. City Council meetings are held on the second and fourth Tuesdays of every month. The City encompasses a little more than 6 square miles and is primarily a low-density residential community with high-density residential housing located near the central business district, offices, and commercial areas. Existing Sphere of Influence The City’s Sphere of Influence (SOI) includes approximately 260 acres of unincorporated San Mateo County, including the San Francisco County Jail and San Francisco International Airport lands west of US 101. Since 1979, the SOI for the City has included a recommendation to detach Capuchino High School from the City of San Bruno and annex the property to the City of Millbrae. The High School is connected to San Bruno by a narrow corridor with irregular boundaries and is largely surrounded by the City of Millbrae. Currently, the City of Millbrae provides water and sewer to the property. Municipal Services SERVICE RESPONSIBLE AGENCY Public Safety Police protection San Bruno Fire protection San Bruno Emergency Medical Service San Bruno Animal Control San Mateo County Animal Control Utilities Water distribution San Bruno Wastewater collection San Bruno Wastewater treatment San Bruno/South San Francisco Electricity Pacific Gas & Electric Natural Gas Pacific Gas & Electric Cable television & broadband internet City of San Bruno (CityNet) Earthlink Optimum Hughesnet Xfinity Always On Astound Verizon Sonic Raw Bandwidth 6 Final MSR─ City of San Bruno Sail Internet Unwired Viasat Starlink AT&T T-Mobile Solid Waste Collection & Disposal Recology San Bruno Stormwater San Bruno Street Maintenance San Bruno Street Lighting San Bruno Community Services Parks and recreation San Bruno Library San Bruno Mosquito abatement and vector control San Mateo Mosquito and Vector Control Planning, Building, Code Enforcement San Bruno Public transportation Bay Area Rapid Transit SamTrans Caltrain The MSR determinations checked below are potentially significant, as indicated by “yes” or “maybe” answers to the key policy questions in the checklist and corresponding discussion on the following pages. If most or all of the determinations are not significant, as indicated by “no” answers, the Commission may find that an MSR update is not warranted. X Growth and Population Disadvantaged Unincorporated Communities X Capacity, Adequacy & Infrastructure X Financial Ability to Provide Services Shared Services Accountability, Structure, and Efficiencies Other 1) Growth and Population Growth and population projections for the affected area. Yes Maybe No X a) Is the agency’s territory or surrounding area expected to experience any significant population change or development over the next 5-10 years? X b) Will population changes have an impact on the subject agency’s service needs and demands? X c) Will projected growth require a change in the agency’s service boundary? 7 Final MSR─ City of San Bruno Discussion5,6 As of 2020 the City of San Bruno is home to approximately 43,908, representing 6% of the population in San Mateo County. Between 1990 and 2020, population increased steadily, but slower than the County overall, with the fastest rate occurring between 2010 and 2016. Housing production during this time was also lower than the rest of the County and Bay Area, only adding a little over 1,200 units to its housing stock between 2010 and 20207. As of 2020, San Bruno has 16,622 housing units, of which approximately 56% were single-family detached homes, 4% were single-family attached buildings, 35% were multi-family buildings with 5 or more units and 6% were multi-family buildings with 2-4 units. Residential uses account for 53% of the City’s land use, commercial, auto, office and industrial make up 10%, parks and open space account for 13%, and the remainder is public or quasi- public land use (e.g., the Civic Center complex, the Federal Archives, elementary and high school sites, the Golden Gate National Cemetery, and Skyline Community College8). The Association of Bay Area Governments (ABAG), the agency responsible for forecasting population, housing and economic trends in the nine Bay Area counties, in coordination with the California Department of Housing and Community Development (HCD) estimates the housing need for the region and allocates a portion of projected need to every jurisdiction. In collaboration with Bay Area partner agencies, non-profit organizations and residents, ABAG developed Plan Bay Area 2050, a long-range regional plan that, among other activities, projects the population growth of each region throughout the Bay Area. Plan Bay Area 2050 anticipates that North San Mateo County, which includes the City of San Bruno, will increase its population by 70% from 98,000 households in 2015 to 166,000 households in 2050. To accommodate the projected growth, cities and counties throughout the State are updating their housing elements every eight years to accommodate the regional housing need assessment (RHNA) allocation for the upcoming cycle. The County and the cities in San Mateo County are currently in the process of updating their Housing Elements to be consistent with the RHNA allocations. The Housing Element is a required component of a city’s or county’s General Plan, and the RHNA allocations for each cycle may require an update to zoning ordinances to demonstrate how it plans to meet the housing needs in its community. During the fifth RHNA cycle (2015-2023), the City issued building permits for 331 out of the 1,155 housing units allocated to the City. Although the City did not meet its RHNA obligations, it entitled an additional 521 new residential units during that cycle and made several policy changes to its zoning ordinance to remove future housing production constraints. 5 U.S. Census Bureau, City of San Bruno 2020 U.S. Census Bureau Profile 6 City of San Bruno Housing Element submitted January 2023 7 U.S. Census Bureau, H1- Housing Unit Table (2010: DEC Summary File) 8 City of San Bruno General Plan 8 Final MSR─ City of San Bruno For the sixth RHNA cycle, ABAG tasked the City of San Bruno with identifying appropriately zoned or re-developable land to accommodate 3,165 housing units by 2031. The City’s submission to HCD includes buffer to ensure that the City is prepared to meet its RHNAs obligations through projects that are currently in the pipeline (670), accessory dwelling units (240), recently constructed housing units (43) and developable property included in the sites inventory (2,709). The City of San Bruno adopted its sixth cycle Housing Element in January 2023 and is continuing to make amendments with the expectation of receiving HCD certification by the end of 20249. Distribution of RHNA allocation for the City of San Bruno Housing Element RHNA Building permits RHNA Remaining Income Level Credits 2015-2023 issued 2015-2023 2023-2031 RHNA Very Low Income (50% 358 34 704 54 583 Average Median Income [AMI]) Low Income (60% AMI) 161 110 405 461 0 Moderate Income 205 82 573 27 479 (80% AMI) Above Moderate 431 105 1,483 364 1,096 Income (120% AMI) Total: 1,155 331 3,165 906 2,158 a) Is the agency’s territory or surrounding area expected to experience any significant population change or development over the next 5-10 years? If San Bruno were to achieve its RHNA goal of producing over 3,100 housing units, the City ‘s housing stock would increase 22% to nearly 20,000 units over the next eight years. The San Bruno 2025 General Plan, adopted in 2009, plans for a total buildout of 17,780 housing units. However, the City believes that the draft housing element is consistent with the General Plan when paired with the City’s adopted Transit Corridors Specific Plan (2014) and the Bayhill Specific Plan. The Transit Corridor Specific Plan proposes an additional 1,610 residential units in three areas near transit that would result in a net increase of 890 housing units over the General Plan. The Bayhill Specific Plan for the existing Bayhill Office Park area plans for an additional 573 housing units and over four million square feet of commercial, hotel and office development. Housing Production planned for in the San Bruno General and Specific Plans 2025 General Transit Bayhill Total Plan Corridors Plan Specific Plan Housing Planned Housing Units 17,780 +890 +573 19,243 9 Correspondence from the City of San Bruno, received 1/31/2024. 9 Final MSR─ City of San Bruno In addition to this planned housing, the City anticipates at least 1,000 new housing units being added through the redevelopment of The Shops at Tanforan, which is currently a large 44-acre shopping mall. On July 27, 2021, the City Council approved the Reimagining Tanforan Land Use Fact Sheet. This provides a comprehensive guide for future owners of the Tanforan property to realize the City’s vision. On October 5, 2022, the City received a preliminary project application from Alexandria for a transit-focused mixed-use village comprised of approximately 1,000 housing units, a life science campus, and retail space, including an upgraded Target and Century Theatres (“project”). The project seeks to retain and upgrade Target and refresh the movie theater to accommodate the modern movie-going experience. A revised preliminary project application was received in November 2023, which includes a Flex-Use Strategy with two “flex zones” that remain designated primarily for commercial/life science uses in the base case and would alternatively allow a broader range of potential uses including possibly more residential uses and a hotel. The purpose of these flex zones is to allow flexibility in a multi-year project to respond to changing market conditions while remaining committed to the core imperatives of creating a mixed-use transit village. This approach, shown in the Proposed Tanforan Land Use Summary, will be analyzed in the project California Environmental Quality Act (CEQA) assessment that is currently being prepared by the City. The Tanforan site was formally designated as a Bay Area Priority Site by the Association of Bay Area Governments (ABAG) Executive Board10 on November 16, 2023, which makes the site eligible for current and potential future funding and technical assistance and will be integrated into relevant Plan Bay Area 2050+ strategies. The site was recognized as a regionally significant transit-oriented development site within an ABAG Priority Development Area. Proposed Tanforan Land Use Summary Land Use Programmed Scenario A Scenario B Area Flex Zone Total Flex Zone Total Retail1 328,000 sf 0 sf 328,000 sf 0 sf 328,000 sf Residential 1,000 DU 0 DU 1,000 DU 500 DU 1,500 DU Life Science Lab & Office 711,000 sf 1,289,000 sf 2,000,000 sf 0 sf 711,000 sf Hotel 0 keys 0 keys 0 keys 170 keys 170 keys Amenity 14,500 sf 14,500 sf 29,000 sf 0 sf 14,500 sf Notes: Square footages and unit/room/parking counts are approximate and do not account for the demolition of existing uses. 1 Includes 86,250 square feet of new retail uses, 160,000 square feet of relocated retail uses (i.e., Target), and 81,500 square feet of existing uses to be retained (i.e., theater). b) Will the population changes have an impact on the subject agency’s service needs and demands? 10 https://abag.ca.gov/sites/default/files/meetings/agendas/_basename__47.pdf 10 Final MSR─ City of San Bruno Although the City is preparing to increase its housing stock by over 20% over the next eight years to ensure compliance with the RHNA allocation, the City does not foresee that this growth will have a significant impact on municipal services and demands. New housing is planned to occur along major corridors through redevelopment and will be located in areas that already have access to municipal services. In addition, the City has adopted development impact fees for new development to address public infrastructure improvements needed to serve new growth in the city. Furthermore, the environmental analysis of the recent Housing Element did not identify any significant, unavoidable impact on municipal services from the housing growth11. The City’s 2020 Urban Water Management Plan determined that, based on SFPUC water allocations and the City’s projected growth and water demand, San Bruno is not expected to exceed its available water supply by 203512. c) Will projected growth require a change in the agency’s service boundary? The projected growth will occur within the City’s boundaries and will not require a change in the agency’s service boundary. Growth and Population MSR Determination As of 2020, the City of San Bruno is home to 43,908 residents and contains 16,622 housing units. The City’s adopted Housing Element proposes to increase its housing stock by 22% over the next eight years. The City’s General Plan, coupled with the Transit Corridor and Bayhill Specific Plans, has largely evaluated the impacts of the potential growth and determined that the potential growth will not have a significant impact on the adequacy and delivery of municipal services. 2) Disadvantaged Unincorporated Communities The location and characteristics of any disadvantaged unincorporated communities within or contiguous to the sphere of influence. Yes Maybe No a) Does the subject agency provide public services related to X sewers, municipal and industrial water, or structural fire protection? b) Are there any “inhabited unincorporated communities” within or adjacent to the subject agency’s sphere of X influence that are considered “disadvantaged” (80% or less of the statewide median household income)? 11 Correspondence from the City of San Bruno received 1/31/2024. 12 2020 Urban Water Management Plan, City of San Bruno 11 Final MSR─ City of San Bruno c) If “yes” to both a) and b), it is feasible for the agency to be reorganized such that it can extend service to the X disadvantaged unincorporated community (if “no” to either a) or b), this question may be skipped)? Discussion: a) Does the subject agency provide public services related to sewers and municipal and industrial water, and structural fire protection? Yes. The City of San Bruno provides public services related to sewers, municipal and industrial water, and structural fire protection to City residences and businesses. b) Are there any inhabited unincorporated communities within or adjacent to the subject agency’s sphere of influence that are considered disadvantaged (80% or less of the statewide median household income)? No. There are two unincorporated areas that are within the City of San Bruno’s SOI. The first area is the San Francisco International (SFO) Airport Lands, located along the City’s eastern border and west of Highway 101. The SFO Airport lands are uninhabited and under the jurisdiction of the City and County of San Francisco. The second unincorporated area is the San Francisco County Jail #3 site, located on the western border of San Bruno along Highway 35. The County Jail is under the jurisdiction of the City and County of San Francisco and houses up to 768 people. Water to the Jail is provided by the San Francisco Public Utility Commission. Sewer service is provided by the North San Mateo County Sanitation District. c) If yes to both, is it feasible for the agency to be reorganized such that it can extend service to the disadvantaged unincorporated community? Not applicable. Disadvantaged Unincorporated Communities MSR Determination The City’s sphere of influence and municipal boundaries are nearly contiguous with the exception of the undeveloped San Francisco International Airport Lands and San Francisco County Jail #3. Neither unincorporated area meets the definition of a disadvantaged unincorporated community 3) Capacity and Adequacy of Public Facilities and Services Present and planned capacity of public facilities, adequacy of public services, and infrastructure needs or deficiencies including needs or deficiencies related to sewers, municipal and industrial water, and structural fire protection in any disadvantaged, unincorporated communities within or contiguous to the sphere of influence. Yes Maybe No 12 Final MSR─ City of San Bruno a) Are there any deficiencies in agency capacity to meet X service needs of existing development within its existing territory? b) Are there any issues regarding the agency’s capacity to X meet the service demand of reasonably foreseeable future growth? c) Are there any concerns regarding public services provided X by the agency being considered adequate? d) Are there any significant infrastructure needs or deficiencies X to be addressed? e) Are there changes in state regulations on the horizon that X will require significant facility and/or infrastructure upgrades? f) Are there any service needs or deficiencies for disadvantaged unincorporated communities related to X sewers, municipal and industrial water, and structural fire protection within or contiguous to the agency’s sphere of influence? Discussion: Water: The City of San Bruno operates and maintains the City’s water supply, distribution and system, including approximately 116 miles of pipeline, eight pumping stations, four production wells, and eight storage tanks. Water that is distributed to San Bruno residents and businesses is primarily purchased through the San Francisco Public Utilities Commission (SFPUC). Additional water is also purchased from the North Coast County Water District for one apartment complex, and groundwater is pumped from the South Westwside Ground Water Basin13. Water maintenance, operations, and capital improvements are entirely paid for through revenue received through water service fees that fund the Water Enterprise Fund. Water Enterprise Fund revenue is entirely dedicated to the water system and cannot be used for other purposes. Since the Water Enterprise Fund is intended to fully support Water activities, the City evaluates water rates and fees on a routine basis to determine if the forecasted revenue is sufficient for ongoing water operations, maintenance, and capital improvements. San Bruno raised its water rates in 2020 and cancelled a planned rate increase for July 2021 due to the COVID-19 pandemic. In February 2023, the City Council reviewed and accepted a Water and Sewer Rate Study, which recommended annual water rate increases of 6% through) 2028. The study found that an increase is needed to account for the 27% increase in SFPUC wholesale 13 2022 Water System Plan, City of San Bruno 13 Final MSR─ City of San Bruno water rates in the past two years. In addition, the City has identified $98.7M in capital improvement projects in its 5-year plan to replace three aging water storage tanks, install a new water storage tank, rehabilitate pump stations, install a replacement groundwater well, and replace and upgrade deteriorating pipelines and infrastructure. The five-year rate increase was approved by the San Bruno City Council on December 13, 2023, to start on January 1, 2024. City of San Bruno Water Rates Prior to 1/1/24 1/1/24 1/1/25 1/1/26 1/1/27 1/1/28 Overall Rate Increase 6% 6% 6% 6% 6% MONTHLY SERVICE FEES Single Family Residential 25.58 $27.11 $28.73 $30.45 $32.27 $34.22 All other Accounts based on meter size ¾ inch 25.58 $27.11 $28.73 $30.45 $32.27 $34.22 1 inch 42.63 45.18 47.88 50.75 53.78 57.03 1 ½ inch 85.27 90.37 95.77 101.50 107.57 114.07 2-inch 136.43 144.59 153.23 162.40 172.11 182.51 3-inch 255.80 271.10 287.30 304.50 322.70 342.20 4-inch 426.33 451.83 478.83 507.50 537.83 570.33 6-inch 852.67 903.67 957.67 1,015.00 1,075.67 1,140.67 8-inch 1,364.27 1,445.87 1,532.27 1,624.00 1,721.07 1,825.07 10-inch 1,961.13 2,078.43 2,202.63 2,334.50 2,474.03 2,623.53 QUANTITY CHARGES Single Family Residential Tier 1 $9.01 $9.57 $10.16 $10.79 $11.46 $12.18 Tier 2 10.78 11.42 12.09 12.80 13.56 14.36 Tier 3 14.33 15.12 15.95 16.83 17.75 18.72 All other Accounts $10.11 $10.68 $11.28 $11.91 $12.58 $13.27 Priority water system capital projects planned for significant work and delivery during the coming year include the Main Improvement and Replacement Program that will replace Water main lines throughout a large area of the residential neighborhoods east of El Camino Real and Water Tank, Well, Pressure Regulating Station, and Pump Station Improvement and Replacement Programs.14. The 2022 Urban Water Management Plan (UWMP) estimates that the City’s average daily water usage is expected to increase from 3 million gallons per day (MGD) to 4.78 MGD in 2040 due to development that is planned for in the Bayhill and Transit Corridor Specific Plans, a potential extension of water service to the County Jail, and other smaller development projects. The Plan foresees that the City will have a sufficient water supply in normal years to meet existing and projected demand over the next 20 to 25 years. However, the Plan notes that the City may 14 FY 23-24 budget 14 Final MSR─ City of San Bruno experience up to a 19% water shortage during a single dry year period and up to 24% water shortage during a five-year-long dry period. The water supply shortfalls are largely due to significant reductions in purchased water supply. The City can implement its Water Shortage Consistency Plan (WCSP) in water shortage years to reduce demands on the available water supply15. The Water Division is housed within the Public Works Department is budgeted to staff 19.20 full- time equivalent (FTE) employees in FY 23-24. Wastewater: The Wastewater Division of the San Bruno Public Works Department provides sanitary sewer services and is responsible for the operations and maintenance of the wastewater collection system, including all sewer mains, manholes, and six lift stations. All operations, maintenance and capital improvements to the City’s wastewater system, including the City’s share of the cost to operate the South San Francisco/San Bruno Wastewater Treatment Plant in South San Francisco, are funded via revenue collected via sanitary sewer fees that make up the Wastewater Enterprise Fund. Wastewater Enterprise Fund revenue is entirely dedicated to the City’s sanitary sewer system and cannot be used for other purposes. Although wastewater revenue has been sufficient in past years, the City anticipates a shortfall beginning in FY 24-25 and adopted rate increases of approximately 5% annually over five fiscal years beginning July 1, 2023, to ensure adequate funding for ongoing operations and priority capital improvements. City of San Bruno Wastewater Rates Prior to 7/1/23 7/1/23 7/1/24 7/1/25 7/1/26 7/1/27 MONTHLY SERVICE FEES Single Family Residential 32.27 33.96 35.74 37.61 39.59 41.66 All other Accounts based on meter size ¾ inch 32.27 33.96 35.74 37.61 39.59 41.66 1 inch 53.78 59.60 59.57 62.69 65.98 69.43 1 ½ inch 107.57 113.20 119.14 125.38 131.95 138.87 2-inch 172.11 181.13 190.62 200.61 211.12 222.19 3-inch 322.70 339.61 357.41 376.14 395.85 416.60 4-inch & larger 537.83 566.02 595.68 626.90 659.76 694.33 QUANTITY CHARGES Residential 12.37 12.98 13.61 14.28 14.97 15.71 Commercial Light 11.50 12.05 12.63 13.23 13.87 14.53 Commercial Medium 12.37 12.98 13.61 14.28 14.97 15.71 Commercial Heavy 17.61 18.54 19.51 20.54 21.62 22.76 Commercial Special 22.86 24.11 25.42 26.81 28.27 29.82 Government 12.97 12.98 13.61 14.28 14.97 15.71 Industrial Light 12.97 12.98 13.61 14.28 14.97 15.71 15 San Bruno UWMP 15 Final MSR─ City of San Bruno According to the City’s FY 23-24 budget, the Wastewater Enterprise's operating and capital improvement programs have largely been guided by a Cease-and-Desist order from the Regional Water Quality Control Board in 2010 that mandated specific capital improvements and a settlement requirement of a lawsuit brought by the San Francisco Baykeepers in 2011 regarding the high incidence of sanitary sewer overflows (SSOs). Over the past few years, the City has made system improvements and has reduced the incidence of SSOs. In addition, the Wastewater Division has engaged in system maintenance and surveillance so that it can ensure compliance with federal and state regulations and identify repairs and improvements for the Wastewater Enterprise Fund CIP list. The Regional Water Quality Control Board lifted the Cease-and-Desist order in January 2020. Wastewater treatment occurs under a Joint Powers Agreement with the City of South San Francisco. The treatment plant, located on Belle Air Road in South San Francisco, is jointly owned by the Cities of South San Francisco and San Bruno and operated and maintained by staff from the City of South San Francisco. Stormwater: The stormwater component of the Streets & Stormwater Division, funded via the Stormwater Enterprise Fund, is part of the Public Works Departments and is responsible for the maintenance of and capital improvements to the stormwater conveyance system. Most of the revenue for stormwater maintenance comes from an assessment fee that was last updated in 1994 and only generates approximately $600,000 annually. As a result, the Stormwater Enterprise Fund is currently in deficit status and is likely to go further into a deficit in future years. In 2021, the City held a property owner election for a new property-related fee to fund storm drainage and flood protection programs. With 3,310 ballots voting no, the fee failed to meet the majority threshold for the fee to be imposed. . During FY 22-23, the City’s Community Perceptions Survey asked a statistically significant sample of likely voters if they support a bond measure that would fund infrastructure projects that would include stormwater improvements. Survey results indicate that a bond measure would fail to reach the supermajority requirement necessary to issue general obligation bonds. As a result, the City continues to use its General Fund to address any unmet or emergency stormwater system needs. Currently, the City has identified over $350M of stormwater infrastructure improvements16. The City is only able to budget for capital improvements one fiscal year at a time. The City prepared and adopted a Storm Drain Master Plan in 2014, but due to lack of funds, many of the recommended projects remain uncompleted. A partial storm drain system condition assessment was included as part of the City’s FY 23-24 Budget. Telecommunications: Via CityNet Services (CityNet) Enterprise, the City of San Bruno provides a broad range of broadband video, data, and voice services to residential and business customers over a cable network consisting of over one hundred miles of fiber optic and coaxial cable throughout the entire San Bruno community. CityNet also operates local Channel 1 and Channel 16 Proposed Storm Drainage and Floor Protection Fee, April 6, 2021 https://www.sanbruno.ca.gov/DocumentCenter/View/1010/Proposed-Storm-Drainage-and-Flood-Protection-Fee-Presentation- --April-6-2021-PDF 16 Final MSR─ City of San Bruno 10, which airs City Council meetings and informational public service announcements. This is the only type of municipal telecommunication service in San Mateo County. Over the past several years, subscription revenues have not been sufficient to fund the capital improvements needed to ensure CityNet remains a viable service. As a result, the CityNet Enterprise Fund has gradually developed a financial deficit, requiring the use of General Fund revenue to continue delivering service. As of June 30, 2023, the CityNet Fund had a negative equity balance of $21.5 million17. To address the shortfall, the City increased CityNet service rates between 9 and 12% effective August 1, 2023, and is exploring additional increases between 2 and 5% to ensure financial stability. City staff is evaluating whether the rate increases are sufficient to begin repayment of the amounts owed to the General Fund. If the rate increases are insufficient to repay the amounts owed to the General Fund, the City may consider soliciting a private company to acquire CityNet. The City issued a Request for Interest in December 2023 to gauge the private sector’s appetite to acquire CityNet’s customer base and infrastructure as part of a broader strategy to ensure the continuity of services to the community.18 Streets & Sidewalks: The City Public Works Department maintains and repairs the City’s streets and sidewalks, including pothole repairs, removal of trash in public rights-of-way, and maintaining city streetlights for the safety of motorists, bicyclists, and pedestrians. As of 2021, San Bruno’s pavement condition index (PCI) score is 61, or Fair19. Among the Streets Division’s goals for FY 24-25 is to develop a digitized pothole repair reporting process. The CIP for FY 23- 24 is $24.6M, of which over 50% is dedicated to pavement management. Police: The City of San Bruno is a full-service policing agency that provides public safety services twenty-four hours a day, seven days a week. The Police Department is staffed by a team of approximately 70 FTE employees, including 33 police officers, a Chief of Police, a Captain, a Lieutenant, a Sergeant, and 8 Dispatchers. Police expenditures accounted for a little over a third of the general fund budget for FY 23-24.20 Public safety services provided by the San Bruno Police Department include patrol, traffic and parking enforcement, investigations, dispatch, and code enforcement. According to the Police Department’s 2021 Annual Report, the Department responded to nearly 48,000 police incidents in 2021. Of those incidents, 28,701 (60%) were initiated by calls from service from the community, and approximately 660 arrests were made. In 2021, the San Bruno Police Department completed approximately 4,500 formal crime reports, of which 37% were for petty and grand thefts, 18% for drug offenses, 14% for burglaries, and 13% for warrant arrests21. The San Bruno Police Station located at 177 Huntington Avenue was constructed around 2000 and is owned by BART, which leases a portion of the station to the City of San Bruno. 17 Correspondence form the City of San Bruno, received 1/31/24. 18 Correspondence from the City of San Bruno received 1/31/24. 19 ABAG/MTC PCI index 2021 20 FY 23-24 Budget 21 San Bruno Police Department 2021 Annual Report 17 Final MSR─ City of San Bruno Fire Protection: The San Bruno Fire Department provides fire prevention and emergency response services, as well as advanced life support and community preparedness. Services are provided 24 hours a day, every day by 32 operational staff, including 4 Battalion Chiefs, 10 Captains, 20 firefighters, and 2 fire inspectors. The department is supported by 6.5 FTE administrative staff, including the Fire Chief. In FY 21-22, the Fire Department responded to 130 structure and other fire-related incidents, over 2300 medical incidents and responded to over 3,600 calls for service. The Fire Department expenditures account for approximately 22% of the general fund budget for FY 23-24. Fire Station 51 located at 555 El Camino Real was built in 1958, and Fire Station 52 is located at 1999 Earl Avenue and was built in 1957. The San Bruno Fire Department is currently an ISO Class 2 Department, with Class 1 being the highest ranking. The San Bruno Fire Department prepared a Community Risk Assessment in 2022 to assist the City in the planning of a new station to replace Fire Station 52. The Community Risk Assessment also evaluated the department’s performance, facilities and organizational structure and operations, and deployment. The Assessment made several recommendations to the Department, including: • Conducting and analyzing performance and outcome measurements • Replacing Stations 51 and 52 and finding a new location for Station 52. • Building a training facility in San Bruno • Providing more suitable facilities and equipment for the on-duty shift mechanic program. • Hiring additional firefighters to ensure a minimum of 4-person staffing daily on Engine 51 and Engine 52. • Analyzing the need for and ability to hire additional management staff. • Developing and updating standard operating guidelines and all policies and procedures. • Developing a Strategic Plan for the San Bruno Fire Department. • Finding locations for workout exercise areas outside of the apparatus bays at both Station 51 and Station 52. Parks: City-owned parks, facilities and recreation areas are maintained by the Parks Division of the Community Services Department with a staff of approximately 13 FTE. The Parks Division also maintains over 7 miles of street medians, approximately 7,250 street trees, and 128 acres of open space. Between FY 21 and FY 23, Parks planted approximately 100 trees annually. The Parks Division also cares for six soccer fields, two football fields, and the dog park at Commodore Park and collaborates with the Fire Department on fire mitigation for the City’s maintained recreation and open spaces. The Parks budget represents approximately 5% of the general fund budget. 18 Final MSR─ City of San Bruno Recreation22: Recreation services and activities are provided by the Administration and Recreation Division of the Community Services Department. Staffed by 7 full-time staff and additional supportive staff, the budget for Recreation represents 5.7% of the City’s general fund. Recreational programs include a wide range of classes, youth and adult programs, seasonal camps, and special events. A new Recreation and Aquatic Center is currently under construction of the old Veterans Memorial Recreation Center in City Park. Construction began in 2021 and is expected to be completed in 2024. The 49,360 square-foot facility includes an indoor and outdoor pool, two adjacent program rooms, a gymnasium, three classrooms, a large community room with a commercial kitchen, a fitness center with an indoor track and group exercise room. Aquatics programming such as swim lessons, recreation and lap swimming, swim camps, and water aerobics will return when the Recreation and Aquatic Center opens. Library23: The City of San Bruno provides library services and community events at the San Bruno Public Library located at 701 Angus Ave W. The Library is open to the public Monday – Saturday and is staffed by a superintendent, a manager, three librarians, and supportive staff. The Library provides residents and visitors with library materials, Wi-Fi, access to online services and resources, educational programs, and tutorials. In FY 21-22, approximately 211,000 books were checked out, 700 students visited the Homework Center, and 2,100 residents attended Storytime. As a member of the Peninsula Library System, San Bruno residents have borrowing privileges at libraries throughout San Mateo County. Finally, the Division hosts community events like Movies in the Park, Shakespeare in the Park, Art in the Library, and Community Day in the Park Art Project. The budget for Library Services represents 4% of the General Fund budget. Contract Services Animal Control Twenty cities in San Mateo County, including the City of San Bruno, contract with the County to operate a countywide animal control program. The County contracts with the Peninsula Humane Society & SPCA to enforce all animal control laws, shelter homeless animals, and to provide a variety of other related services. Garbage/solid waste/recycling/composting The City of San Bruno contracts with Recology San Bruno to provide collect solid waste, recycling, and compost from residences and businesses. The City recently negotiated a new franchise agreement that includes several rates increases, including two rate increases effective January 1, 2023 (6%) and July 1, 2023 (9.58%), and a third rate increase of 7.65% scheduled to be effective as of July 1, 202424,25. The most recent rate increase in July 2023 was negotiated to 22 FY 23-24 Budget 23 FY 23-24 budget 24 Recology San Bruno Franchise Agreement 2022 25 San Bruno City Council Agenda Packet June 13, 2023 19 Final MSR─ City of San Bruno provide an additional $800,000 per year that would be dedicated to a portion of the street sweeping and catch basin waste removals performed by the City. One percent of the assessed fee on Recology San Bruno bills goes to the City’s Solid Waste Fund which is responsible for compliance with state mandates to achieve the goal of seventy-five percent (75%) diversion (recycling). a) Are there any deficiencies in agency's capacity to meet the service needs of existing development within its existing territory? LAFCo staff has not identified any deficiencies to meet the needs of existing development within the City of San Bruno. b) Are there any issues regarding the agency’s capacity to meet the service demand of reasonably foreseeable future growth? The City of San Bruno is planning for significant growth over the next eight years and expects to have sufficient water supply and resources to fund sewer, police, fire, and emergency response services, as well as administrative services to support administrative and some public works functions. However, two of the City’s Enterprise Funds –Stormwater and CityNet – are either currently operating at a deficit or anticipate future budget shortfalls in the near future. As a result, the City is not able to engage in long-term planning for capital improvements and instead evaluates funding for capital improvements for storm drain and CityNet improvements on an annual basis. The budget shortfall and lack of long-term financial planning may negatively impact the City’s ability to ensure adequate and efficient delivery of services in the future without significant contributions from the General Fund to the Enterprise Funds or rate increases to CityNet or the Stormwater Enterprise. c) Are there any concerns regarding the public services provided by the agency being considered adequate? Over the past decade, San Bruno has made substantial improvements to its wastewater system to reduce the incidence of sanitary sewer overflows and maintain compliance with the State Board. LAFCo staff does not have any concerns regarding the adequacy of the public services being delivered by the City of San Bruno to its residents and businesses. d) Are there any significant infrastructure needs or deficiencies to be addressed? The San Bruno FY 23-24 Operating & Capital Improvements Budget identified several infrastructure needs or deficiencies that need to be addressed, including stormwater improvements. e) Are there changes in state regulations on the horizon that will require significant facility and/or infrastructure upgrades? 20 Final MSR─ City of San Bruno The City anticipates Electric Vehicle (EV) charging infrastructure and solar will require significant facility and/or infrastructure upgrades that may require financial contributions26. f) Are there any service needs or deficiencies for disadvantaged unincorporated communities related to sewers, municipal and industrial water, and structural within or contiguous to the agency’s sphere of influence? Not applicable. There are no disadvantaged unincorporated communities within the City of San Bruno’s sphere of influence. Capacity and Adequacy of Public Facilities and Services MSR Determination LAFCo staff is not aware of any deficiencies in the agency capacity to meet existing service needs for which the City of San Bruno does not have a plan in place to resolve. The City is aware that the CityNet and Stormwater Enterprise funds are operating at a deficit and is exploring ways to create new revenue so that it is able to continue delivering services. The City routinely adopts a multi-year capital improvement plan with funding commitments for the first fiscal year adopted through the annual budget process. With the exception of the Water and Wastewater Enterprises, there is no structural revenue to support the vast majority of future capital funding needs. Recommendations: 1) LAFCo encourages the City to continue to explore options regarding CityNet, including potential revenue increases or the transfer of the service to another operator. 2) LAFCo encourages the City to continue to review potential revenue increases or the creation of a dedicated revenue source for stormwater projects. 4) Financial Ability Financial ability of agencies to provide service Yes Maybe No a) Does the organization routinely engage in budgeting practices that may indicate poor financial management, X such as overspending its revenues, failing to commission independent audits, or adopting its budget late? b) Is the organization lacking adequate reserve to protect X against unexpected events or upcoming significant costs? c) Is the organization’s rate/fee schedule insufficient to fund X an adequate level of service, and/or is the fee inconsistent with the schedules of similar service organizations? 26 Correspondence from the City of San Bruno, received 1/31/2024. 21 Final MSR─ City of San Bruno d) Is the organization unable to fund necessary infrastructure X maintenance, replacement and/or any needed expansion? e) Is the organization lacking financial policies that ensure its X continued financial accountability and stability? X f) Is the organization’s debt at an unmanageable level? Discussion: a) Does the City routinely engage in budgeting practices that may indicate poor financial management such as overspending its revenue, failing to commission independent audits, or adopting its budget late? LAFCo staff has not identified any issues with the City’s budgeting practices related to process. The City of San Bruno prepares an annual operating and capital improvement program (CIP) budget for the upcoming fiscal year that gets adopted by the City Council at a noticed public hearing before June 30th. Prior to adoption, the San Bruno City Council participates in one or more study sessions to review the City’s priorities, agency and department achievements, any financial or service challenges and an overview of the CIP and planned expenditures. Throughout the year, the City Council receives quarterly financial reports to assess and evaluate budget variances during the year.27 The City also produces an Annual Comprehensive Financial Report (ACFR) that is reviewed by the City Council. Although the FY 21-22 ACFR was completed later than is standard for the City due to an unfilled position, there is no indication that the City is failing to complete its audits in a timely manner. Like many cities and agencies throughout the Country, San Bruno’s revenue was impacted the COVID-19 pandemic, with as much as a 75% reduction in the City’s transient occupancy tax (TOT), one of the most important sources of revenue for the City. The City has not adopted a balanced budget in the last five fiscal years and is facing a structural deficit. The City has been able to reduce some general fund expenditures and draw from its reserves to fund ongoing operations while maintaining a positive fund balance. Looking ahead, the City intends to make additional adjustments and look for opportunities to address its structural deficits. City staff intends to present a long-range forecast to City Council in FY 23-24 that explores new revenue opportunities. According to the City, its most significant budget challenges include reductions to the Vehicle License Fee and potential loss of sales tax due to a notice submitted by the State Department of Tax & Fee Administration (CDTFA) to the City and Walmart regarding a reallocation of approximately $27.5M in sales that tax that the State claims should be reallocated to other jurisdictions. The City and Walmart filed a Verified Petition for Writ of Mandate and Complaint 27 City of San Bruno FY 21-22 CAFR 22 Final MSR─ City of San Bruno for Declaratory and Injunctive Relief on October 26, 2023, to find the City's allocation of local sales taxes is proper. If the City and Walmart lose the case, the City would owe up to approximately $15.3 million to the CDTFA to be redistributed28. Furthermore, the City is anticipating a loss in future sales tax due to the forthcoming closure of the Shops at Tanforan due to redevelopment plans for the property. The City’s estimated revenue for FY 23-24 is $64.9M, a 12.6% increase compared to the FY 22- 23 amended budget, which represents 32% of the total operating and Capital Improvement Plan (CIP) budget of $234M for FY 23-24. Personnel accounts for 45% of total general fund expenditures, or $30M. City of San Bruno General Fund Budget FY 2020 - FY 2024 FY 23-24 FY 19-20 FY 20-21 FY 21-22 FY 22-23 Adopted Actuals Actuals Actuals Rev. Budget Budget Revenue Property Tax $11,746,610 $12,097,657 $13,107,710 $12,211,998 $12,564,573 Sales Tax $7,294,691 $13,035,606 $17,730,880 $10,876,105 $12,702,000 Transient Occ. Tax (TOT) $2,617,524 $1,247,467 $2,408,999 $2,772,483 $2,904,214 Vehicle License Fee $5,013,326 $3,180,581 $7,646,019 $6,632,000 $6,050,000 Reg. Cardroom Fee $1,974,980 $2,035,009 $2,200,592 $3,231,075 $4,105,438 Business Tax $1,897,762 $1,974,584 $2,277,785 $2,005,000 $2,615,287 Departmental Revenue $5,437,724 $6,135,177 $10,719,120 $9,748,514 $11,454,315 Franchises $1,861,255 $1,798,674 $1,863,932 $1,827,000 $1,923,912 Other Revenue $10,820,600 $10,938,912 $1,935,355 $7,376,700 $10,602,830 Total Revenue $48,664,472 $52,443,667 $59,890,391 $56,680,875 $64,922,570 Expenditures General Government $5,359,016 $5,615,928 $5,805,249 $7,774,176 $8,352,322 Police $18,738,767 $18,459,942 $18,674,143 $21,130,984 $23,747,763 Fire $11,481,242 $12,647,980 $12,579,946 $13,008,301 $14,253,825 Public Works $4,251,710 $4,123,961 $3,556,489 $4,619,553 $5,759,226 Comm & Econ Devt. $3,589,926 $3,145,919 $2,966,617 $4,951,823 $4,470,775 Community Services $8,790,412 $7,638,163 $7,346,569 $9,148,029 $11,666,217 Non-Dept. Cost Alloc. -$4,684,577 $4,236,201 $1,441,907 $1,955,104 $3,173,718 Transfer out to debt svc $1,361,494 $1,471,197 $1,282,422 $1,484,874 $1,367,118 Total Expenditures $48,887,990 $48,866,889 $50,769,528 $60,162,636 $66,443,527 San Bruno’s primary revenue sources are property tax and sales tax, each of which has accounted for an average of 22% over the last 5 fiscal years. Property within the City of San Bruno has an average assessed value of approximately $856,000 per property, below the average assessed value of the County of $1.3 Million and lower than the City of South San Francisco (assessed value of $1.5 per property) and Millbrae ($1.1 per property)29. Property 28 Correspondence from the City, received 1/31/2024. 29 San Mateo County Assessor’s Office 23 Final MSR─ City of San Bruno taxes are only projected to increase by 3% from FY 22-23. Sales tax, on the other hand, has increased substantially over the past five years, and the City projected a 17% in sales tax from FY 22-23. Departmental revenue and Other Revenue (Use of Money & Property and miscellaneous) have accounted for an average of 15% over, and VLF has accounted for 10%. The City acknowledges that the Excess Educational Revenue Augmentation Fund (ERAF) is an unreliable revenue source and budgets it as one revenue that gets allocated to City reserves. As of June 30, 2022, the City’s overall net position increased $25M (20.1%) from the previous year30. Enterprise Funds The City of San Bruno has four Enterprise Funds – Water, Wastewater, Stormwater, and CityNet. The Enterprise Funds deliver services that are supported by the rates and fees levied by each respective fund. The Water Fund Enterprise has been stable for many years. However, due to increased SFPUC rates and debt issuance over the increased capital cost of water tank construction, the City projects a negative fund balance beginning FY 25-26. The San Bruno City Council approved the annual water rate increases over a five-year period that were recommended in the 2023 Water and Sewer Rate study beginning January 1, 2024, to ensure funding for ongoing operations and capital improvements. The Wastewater Enterprise has typically been balanced, but the City projects a shortfall beginning in FY 24-25. The San Bruno City Council approved the annual sewer rate increases over a five-year period that were recommended in the 2023 Rate Study beginning July 1, 2023 to ensure funding for ongoing operations and capital improvements. CIP projects for the Enterprise Funds, especially for water and wastewater, are large and complex and require multi-million-dollar investments in a short period of time. Capital improvement projects will be evaluated annually, and some may be delayed during the forecast period to sustain the fund’s self-supporting status31. The Stormwater Enterprise has been operating at a deficit for several years. City efforts to increase the $46.16 per parcel assessment fee have been unsuccessful. Planned stormwater system CIP projects have been funded by the General Fund due to lack of funds and are evaluated annually. Despite projecting a slight surplus over operating expenditures in FY 23-24, the City has been operating a deficit for several years. As of June 30, 2023, the CityNet Fund has a negative equity balance of $21.5 million, comprised of negative cash and non-cash liabilities such as unfunded pension liabilities. The negative equity balance includes $16M owed to the General Fund due to multi-year reliance on advances from the General Fund to sustain operating charges, including franchise fees, internal service allocations, and general overhead allocations32. The City has taken several steps to address several steps, including gradually eliminating the equity transfer 30 City of San Bruno FY 21-22 ACFR 31 Correspondence from the City of San Bruno, received 1/31/24. 32 Correspondence with the City of San Bruno, received 1/31/2024. 24 Final MSR─ City of San Bruno the Enterprise has paid toward the General Fund, applying the 5% franchise fee to all Enterprise revenue and increasing subscription rates. CityNet’s operating revenues are expected to yield a slight surplus over operating expenditures in FY2023-24. However, there is no excess funding for debt services and the General Fund will need to cover the payment for this enterprise fund. City of San Bruno Enterprise Funds Revenue & Operating Expenses FY 2020 – FY 2024 Est. Actual Est. Actual Est. Actual Est. Actual Budgeted Enterprise Funds FY 19-20 FY 20-21 FY 21-22 FY 22-23 FY 23-24 Water Revenue $16,359,737 $17,380,923 $15,597,000 $14,792,484 $14,934,850 Operating Expenses $9,044,746 $10,179,828 $9,643,991 $11,021,041 $13,076,418 Wastewater Revenue $18,620,132 $17,816,800 $17,937,000 $17,783,271 $18,551,131 Operating Expenses $8,683,150 $9,101,147 $8,887,812 $10,936,750 $12,950,450 Stormwater Revenue $675,000 $657,009 $642,300 $668,984 $1,453,000 Operating Expenses $1,026,056 $1,084,502 $1,309,434 $1,605,397 $1,967,493 CityNet Revenue $9,591,730 $9,399,434 $8,462,511 $8,058,570 $8,802,500 Operating Expenses $9,512,590 $9,364,066 $8,806,358 $8,701,263 $8,800,449 Capital Improvement Program (CIP) The City of San Bruno prepares and adopts a Capital Improvement Program (CIP) on an annual basis that identifies projects and funding over a five-year period. The FY 2023-28 CIP identified ninety-five projects and programs and $243.9M in funding to be programmed over that time. Half of the CIP funding is to implement infrastructure improvements and repairs to the City’s water and sanitary sewer systems. City of San Bruno Capital Improvement Projects FY 23-28 Est. Carryover New Request Total FY 23-24 Total 5-Year Capital from FY 22-23 for FY 23-24 Funding Improvement Program Water $19,277,173 $1,653,393 $20,930,566 $98,730,566 Sewer $20,191,970 $13,591,434 $33,783,404 $73,483,404 Stormwater $987,804 $1,050,000 $2,037,804 $2,037,804 CityNet $73,157 $0 $73,157 $73,157 Parks $4,441,852 $1,272,946 $5,714,798 $9,961,238 Facilities $6,839,764 $611,695 $7,451,459 $8,229,034 Streets $17,343,604 $7,262,214 $24,605,818 $48,521,818 Technology $1,664,583 $989,946 $2,654,529 $2,904,529 Total $70,819,907 $26,431,629 $97,251,535 $243,941,550 25 Final MSR─ City of San Bruno Pensions & Pension Liability Pensions account for 18%, or $11.5M, of budgeted General Fund Revenues in FY 23-24, which is consistent with prior fiscal years. The only revenue sources to fund employee pensions come from investment earnings, employee contributions and employers’ contributions. Although the City has implemented the reduced pension benefits formula (PEPRA), the City will not see the impact of those changes for several more years. The City reported that their employer's Fiscal Year 2022-23 CalPERS payment totaled $12,810,830 and that employees do not contribute to the employer's CalPERS UAL.33 In January 2013, the City issued a $13 million bond related to the City’s CalPERS unfunded liability obligations. Other Post Employment Benefits (OPEB) The City does not record a net OPEB liability because the benefit provider, Teamster’s Local 856 Health & Welfare Trust (Trust), is the responsible entity for retiree medical, not the City. All employees receiving health and welfare benefits from the City participate in the Trust. b) Is the organization lacking adequate reserves to protect against unexpected events or upcoming significant costs? The City has several reserves, including: • General Fund Reserve with a goal of 25% of the City’s annual budgeted expenditures • General Fund Capital Reserve with a goal of $5M annually • Emergency Disaster Fund with a goal of $3M • Central Garage Reserve with a goal with a goal of 25% of fund expenditures • Building and Facilities Reserve with a goal with a goal of 25% of fund expenditures • Technology Reserve with a goal with a goal of 25% of fund expenditures • Self-Insurance Reserve with a goal with a goal of 25% of fund expenditures The City has not met its annual General Fund reserve goal in four of the last five fiscal years by as little as 1% and as much as 6%. The City has not achieved its target for the Emergency Disaster Fund in the past five fiscal years by less than $200K in the past 3 fiscal years. Conversely, the City has maintained a robust General Fund Capital Reserve over the past five fiscal years and projects a reserve balance that is nearly five times greater than its target. All internal service funds are anticipated to achieve the 25% target by the end of FY 2023-24. c) Is the City’s rate/fee schedule insufficient to fund an adequate level of service, and/or is the fee inconsistent with the schedules of similar service organizations? The City reviews and updates the Master Fee Schedule annually to ensure that rates and fees are reasonable, recover the cost of delivering services and fund capital improvements to ensure 33 Correspondence from the City of San Bruno, received 1/31/24. 26 Final MSR─ City of San Bruno the ongoing adequacy of the infrastructure and municipal services. Per the City, a comprehensive fee study is anticipated in the next two years. The City operates four Enterprise Funds for Water, Wastewater, Stormwater and CityNet. Revenue collected from service fees and charges for each Enterprise are used to fund the operations, maintenance and capital improvements for each respective Enterprise. The City conducted rate studies for water and sewer. The studies noted that the City’s rates for each service were in the median range compared to fees and charges levied by other San Mateo County cities. The City Council adopted rate increases for water and sewer to ensure that revenue would be sufficient to fund ongoing operations, maintenance and capital improvements. The City also amended its franchise agreement with Recology San Bruno 2023 and adopted rate increases to occur on July 1, 2023, and January 1, 2024. As noted previously in this report, the CityNet Enterprise has been operating in a deficit for nearly ten fiscal years as subscription revenue, its only source of revenue, has been insufficient to cover operations or capital improvements. The City increased CityNet service rates between 9 and 12% effective August 1, 2023, and is exploring additional increases between 2 and 5% to ensure financial stability. City staff is evaluating whether the rate increases are sufficient to begin repayment of the amounts owed to the General Fund. If the recent rate increases are insufficient to repay the amounts owed to the General Fund, the City may consider soliciting a private company to acquire CityNet. The City issued a Request for Interest in December 2023 to gauge the private sector’s appetite to acquire CityNet's customer base and infrastructure as part of a broader strategy to ensure continuity of services to the community.34 The City has not had success in increasing the assessment fee for the Stormwater Enterprise Fund, which hasn’t been increased since 1994. In 2021, the City held a property owner election for a new property-related fee to fund storm drainage and flood protection programs. With 3,310 ballots voting no, the fee failed to meet the majority threshold for the fee to be imposed. During FY 22-23, the City’s Community Perceptions Survey asked a statistically significant sample of likely voters if they support a bond measure that would fund infrastructure projects that would include stormwater improvements. Survey results indicate that a bond measure would fail to reach the supermajority requirement necessary to issue general obligation bonds. As a result, the City continues to use its General Fund to address any unmet or emergency stormwater system needs. Currently, the City has identified over $350M of stormwater infrastructure improvements35. d) Is the agency unable to fund necessary infrastructure maintenance, replacement and/or any needed expansion? Since the CityNet and Stormwater Enterprise Fund are not receiving sufficient revenue to fund operations and capital improvements, the City is unable to plan for and fund the necessary 34 Correspondence from the City of San Bruno received 1/31/24. 35 Proposed Storm Drainage and Floor Protection Fee, April 6, 2021 https://www.sanbruno.ca.gov/DocumentCenter/View/1010/Proposed-Storm-Drainage-and-Flood-Protection-Fee-Presentation- --April-6-2021-PDF 27 Final MSR─ City of San Bruno infrastructure maintenance and replacements for these two services. Capital improvements are reviewed annually for priority/urgency and funded when Enterprise and/or General Fund revenue is available. e) Is the agency lacking financial policies that ensure its continued financial accountability and stability? The City of San Bruno has adopted several policies to ensure its continued financial accountability and stability, including policies regarding revenue, capital assets, accounting, budgeting, investments, debt management and reserve funds36. f) Is the agency’s debt at an unmanageable level? The City of San Bruno has maintained high ratings on debt issuances due to the City’s financial management practices (e.g., appropriate reserve levels, plans to reduce liabilities, and fiscal policies)37. The City has a debt management policy that establishes legal debt limits (equal to 15% of the assessed value of all real and personal City property), establishes financial limits and identifying guidelines regarding the structuring of debt. As of June 30, 2022, the City had $51.3M total outstanding debt, which complies with and is under the current policy limits. The FY 2023-24 budget notes that the City of San Bruno’s debt portfolio consists of seven issuances, including debt to support critical capital infrastructure. In addition, the City’s debt portfolio includes pension obligation bonds, the Police Building lease revenue bonds, and leasing for two new fire engines. The City does not intend to issue any new debt or refinance any existing debt in FY 2023-24. Financial Ability MSR Determination LAFCo staff has not identified any issues with the City’s budgeting practices regarding process. The City of San Bruno prepares an annual operating and capital improvement program (CIP) budget for the upcoming fiscal year that gets adopted by the City Council at a noticed public hearing before June 30th. The City also produces an Annual Comprehensive Financial Report (ACFR) that is reviewed by City Council. The City has not adopted a balanced budget in the last five fiscal years, it has been able to reduce some general fund expenditures and draw from its reserves to fund ongoing operations while maintaining a positive fund balance. The City is currently facing a structural deficit. Looking ahead, the City intends to make additional adjustments and look for opportunities to address its structural deficits. City staff intends to present a long-range forecast to the City Council in FY 23-24 that explores new revenue opportunities. The City has not met its annual General Fund reserve goal in four of the last five fiscal years by as little as 1% and as much as 6%. The City has not achieved its target for the Emergency Disaster Fund in the past five fiscal years by less than $200K in the past 3 fiscal years. 36 City of San Bruno FY 23-24 Budget 37 City of San Bruno FY 21-22 ACFR 28 Final MSR─ City of San Bruno Enterprise funds such as the Wastewater Enterprise Fund, Stormwater Enterprise Fund, and CityNet Fund have experienced shortfalls in revenue over the last few years. In the case of the Stormwater Enterprise Fund and CityNet Fund, these funds have had to utilize funds from the City’s General Fund in order to sustain operation and capital costs. The City is engaged in ongoing litigation with the State regarding the allocation of sales tax to the City. If the City was to lose the litigation, the City would owe up to approximately $15.3 million to the State, which would impact the City’s General Fund. The City of San Bruno has maintained high ratings on debt issuances. Recommendations: 1) LAFCo encourages the City to continue to explore options regarding CityNet, including potential revenue increases or the transfer of the service to another operator. 2) LAFCo encourages the City to continue to review potential revenue increases or the creation of a dedicated revenue source for stormwater projects. 3) LAFCo encourages the City to continue explore revenue and expenditure options related to the City’ General Fund in order to adopt a balance annual budget. 4) LAFCo encourages the City to prepare contingency plans should the City lose the litigation regarding the allocation of sales tax. 5) Shared Service and Facilities Status of, and opportunities for, shared facilities Yes Maybe No a) Is the agency currently sharing services or facilities with X other organizations? If so, describe the status of such efforts. b) Are there any opportunities for the organization to share services or facilities with neighboring or overlapping X organizations that are not currently being utilized? c) Are there governance options to allow appropriate facilities and/or resources to be shared, make excess X capacity available to others, avoid the construction of extra or unnecessary infrastructure or eliminate duplicative resources? a) Is the agency currently sharing services or facilities with other organizations? 29 Final MSR─ City of San Bruno Fire Department: The San Bruno Fire Department participates in a shared services agreement with the Central County Fire Department for the training of all fire department personnel.38 Animal Control: Along with 20 other San Mateo County Cites, San Bruno contracts with the County to operate a countywide animal control program. The County contracts with the Peninsula Humane Society & SPCA to enforce all animal control laws, shelter homeless animals and provide a variety of other related services. Wastewater Treatment: San Bruno is part of a Joint Powers Agreement with the City of South San Francisco to treat wastewater at the South San Francisco/San Bruno Water Quality Control Plant. The treatment plant is located in South San Francisco and is operated by the City of South San Francisco. Treated wastewater is discharged into the Bay via an outfall pipe that is shared by San Bruno, South San Francisco, Millbrae, Burlingame, Colma and SFO. Police Department: The San Bruno Police Station located at 177 Huntington Avenue is owned by BART. BART leases a portion of the station to the City of San Bruno. b) Are there any opportunities for the organization to share services or facilities with neighboring or overlapping organizations that are not currently being utilized? Staff has not identified any additional opportunities for the City of San Bruno to share services or facilities with neighboring or overlapping organizations that are not currently being utilized. c) Are there governance options to allow appropriate facilities and/or resources to be shared, make excess capacity available to others, avoid the construction of extra or unnecessary infrastructure or eliminate duplicative resources? Staff has not identified any governance options that would reduce duplication of resources, facilities, or infrastructure. Shared Services MSR Determination The City of San Bruno partners with several agencies to share resources and reduce costs. LAFCo staff has not identified other opportunities that the City could engage in to share costs and/or reduce duplication of resources, facilities, or infrastructure. 6) Accountability, Structure, and Efficiencies Accountability for community service needs, including Yes Maybe No governmental structure and operational efficiencies a) Are there any issues with meetings being accessible and well-publicized? Any failures to comply with disclosure laws X and the Brown Act? 38 Correspondence from the City of San Bruno received 1/31/2024. 30 Final MSR─ City of San Bruno b) Are there any issues with staff turnover or operational X efficiencies? c) Is there a lack of regular audits, adopted budgets and X public access to these documents? d) Are there any recommended changes to the organization’s governance structure that will increase accountability and X efficiency? e) Are there any governance restructuring options to enhance X services and/or eliminate deficiencies or redundancies? f) Are there any opportunities to eliminate overlapping boundaries that confuse the public, cause service inefficiencies, unnecessarily increase the cost of X infrastructure, exacerbate rate issues and/or undermine good planning practices? Discussion: San Bruno is a general law city governed by a Mayor and four City Council members. The Mayor is elected to a 2-year term in accordance with Measure K adopted in 1977. City council members serve overlapping 4-year terms. On March 22, 2022, the San Bruno City Council adopted Ordinance #1907 establishing the City’s first district map for City Council elections. The Ordinance implemented by-district elections of four City Council Members effective November 2022. San Bruno’s first by-district election began with representatives for Districts 1 and 4 during the November 2022 election, with elections for Districts 2 and 3 to occur in November 2024. Each district Council Member serves a four-year term and must live in their respective district. a) Are there any issues with meetings being accessible and well-publicized? Any failures to comply with disclosure laws and the Brown Act? The City Council meets in person at the San Bruno Senior Center located at 1555 Crystal Springs Road on the 2nd and 4th Tuesday of every month, except for the 4th Tuesday in December, at 7 pm. Regular meetings are also accessible for viewing to the public via Zoom, the City of San Bruno YouTube Channel and CityNet Channels 1 and 10. Agendas, agenda packets and meeting presentations are posted to the City website at least 72 hours prior to meeting dates. However, meeting minutes are inconsistently published on the City website and in future agenda packets, which can make it challenging for the public to be aware of actions taken at City Council meetings. Neither the San Bruno City Clerk's Office or LAFCo staff were able to identify any failures by the City to comply with disclosure laws and the Brown Act. 31 Final MSR─ City of San Bruno b) Are there issues with staff turnover or operational efficiencies? In FY 21-22, the City reported a total of 262.5 FTE employees and experienced a turnover rate of 15.63% in calendar year (CY) 2023 and 9.59% in CY 202. In FY 21-22, an unfilled position resulted in the delayed completion of the Annual Comprehensive Financial Report (ACFR)39, which has since been published. The City acknowledges there have been staff turnover issues and is looking at opportunities to improve efficiencies and reduce staff turnovers in the future by streamlining processes, automating when possible and appropriate, improving accountability and focusing on customer service.40 c) Is there a lack of regular audits, adopted budgets and public access to these documents? The City of San Bruno regularly prepares an annual budget and contracts with an accounting firm to conduct an annual ACFR, both of which are presented to the City Council at a public hearing and are published on the City’s website. d-f) Changes in governance structure: LAFCo staff does not recommend any changes to or restructuring options of the City’s governance structure that would increase accountability and efficiencies, enhance services and/or eliminate deficiencies. If the cities of San Bruno and Millbrae so desire, there could be a detachment of Capuchino High School from the City of San Bruno and annex the property to the City of Millbrae to help address irregular boundaries in the southern portion of San Bruno. Accountability, Structure, and Efficiencies MSR Determination The City of San Bruno ensures that public meetings are accessible and well-publicized. LAFCo staff is not aware of any failures to comply with disclosure laws or the Brown Act. The City has experienced staff turnover in recent years but there are no issues related to operational efficiencies. The City prepares and adopts and annual budget, and annual independent audits are reviewed at a City Council meeting. LAFCo staff does not recommend any changes to the City’s governmental structure or operations that will increase accountability and efficiency. Recommendation: 1) LAFCo staff recommends publishing and posting City Council meeting minutes on the City’s website more frequently and/or in a more consistent manner so that the public can easily locate information on the actions taken at City Council meetings. 7) Other Any other matter related to effective or efficient service Yes Maybe No delivery, as required by commission policy. a) Are there any other service delivery issues that can be X resolved by the MSR/SOI process? 39 City of San Bruno FY 21-22 ACFR (Page 11) 40 Correspondence from the City of San Bruno received 1/31/24. 32 Final MSR─ City of San Bruno b) Water Resiliency and Climate Change i) Does the organization support a governance model that enhances and provides a more robust water supply X capacity? ii) Does the organization support multi-agency collaboration and a governance model that provide risk X reduction solutions that address sea level rise and other measures to adapt to climate change? c) Natural Hazards and Mitigation Planning i) Has the agency planned for how natural hazards may X impact service delivery? ii) Does the organization support multi-agency collaboration and a governance model that provides risk X reduction for all natural hazards? a) Other service delivery issues that can be resolved by the MSR/SOI process. While not a service delivery issue, Monte Verde Elementary School, part of the South San Francisco Unified School District is split by the City of San Bruno – City of South San Francisco city boundary line (Attachment B). In the future, the cities may wish to consider submitting an application to LAFCo to adjust the boundary so that the city boundary no longer splits the school site. b) Water Resiliency and Climate Change San Bruno is a partner of One Shoreline, an independent government agency that secures and leverages public and private resources to plan for and build solutions to the climate change impacts of sea level rise, flooding, and coastal erosion. One Shoreline is exploring solutions to address significant flooding issues that occur within the San Bruno Creek Flood Zone, especially during severe weather events. Potential projects that are under consideration include a pump station that would carry excess flows around the existing tide gate where the Creek meets the San Francisco Bay, rehabilitation of two existing pump stations and construction of a new detention basin to increase storm water capacity during intense rainfall.41. The City does not have an adopted Climate Action Plan but has taken recent steps towards reducing greenhouse gas emissions by adopting a Reach Code Ordinance to reduce emissions during construction alongside updates to the 2022 California Building Code. The city recently issued a request for proposal (RFP) for the preparation of a Climate Action Plan. If approved in the 2024/25 budget, preparation of the document will begin in July 2024 and is anticipated to 41 https://oneshoreline.org/projects/san-bruno-creek-flood-zone/ 33 Final MSR─ City of San Bruno take approximately 18 months to complete. In addition, the City adopted a Floodplain Management Requirements Ordinance in 2019.42 c) Natural Hazards and Mitigation Planning Along with the County and other San Mateo County cities, San Bruno participated in the 2021 Local Hazard Mitigation Plan (LHMP) that assessed hazard vulnerabilities and identified opportunities for mitigation to reduce the level of injury, property damage and community disruption that could occur in manmade and natural disasters. In addition to participation in the LHMP, the City reports that it has commissioned a Wildfire Threat Study and is in the process of developing a Crestmoor Canyon Wildfire Mitigation Plan. Along with a few other jurisdictions in San Mateo County, the City is in the process of updating the Safety Element of the General Plan, scheduled for completion in mid-2025. Other Issues MSR Determination The City of San Bruno is engaged in activities to address hazard mitigation, wildfire prevention and sea level rise for City residents and businesses, including engagement with One Shoreline. While not a service delivery issue, Monte Verde Elementary School, part of the South San Francisco Unified School District is split by the City of San Bruno – City of South San Francisco city boundary line In the future, the cities may wish to consider submitting an application to LAFCo to adjust the boundary so that the city boundary no longer splits the school site. Recommendation: 1) LAFCo encourages the City of San Bruno to continue its work in the areas of natural hazard mitigation and sea level rise and continue to coordinate with partner agencies. 2) In the future, the City of San Bruno and the City of South San Francisco may wish to consider submitting an application to LAFCo to adjust the city boundary so that this line follows property boundaries of the Monte Verde Elementary School site. Section 5: Sphere of Influence Review and Update Determinations Section 56425 requires the Commission to make determinations concerning land use, present and probable need for public facilities and services in the area, the capacity of public facilities and adequacy of public services that the agency provides or is authorized to provide, and the existence of any social or economic communities of interest in the area if the Commission determines that they are relevant to the agency. These include the following determinations: 1) The present and planned land uses in the area, including agricultural and open space lands. San Bruno’s SOI spans approximately 6.1 square miles, including the San Francisco County Jail and the San Francisco International Airport. The City’s land use is primarily 42 Correspondence from the City of San Bruno received 1/31/24. 34 Final MSR─ City of San Bruno residential with some open space, office, commercial, and industrial uses. There is no agricultural land within the City’s SOI. 2) The present and probable need for public facilities and services in the area. The City of San Bruno’s facilities and services meet the needs of its residents and businesses, and the City anticipates that it will be able to provide adequate facilities and services for the anticipated growth within its service area. 3) The present capacity of public facilities and adequacy of public services that the agency provides or is authorized to provide. The City currently provides adequate public services to its residents, including fire and police protection, water, sanitary sewer, and storm water services. In addition, the City routinely adopts a Capital Improvement Program to fund critical repairs, replacements and improvements to the City’s infrastructure and facilities. 4) The existence of any social or economic communities of interest in the area if the Commission determines that they are relevant to the agency. There are no disadvantaged unincorporated communities within the City of San Bruno’s SOI. 5) For an update of a sphere of influence of a city or special district that provides public facilities or services related to sewers, municipal and industrial water, or structural fire protection, that occurs pursuant to Section 56425(g) on or after July 1, 2012, the present and probable need for those public facilities and services of any disadvantaged unincorporated communities within the existing sphere of influence. No change to the City of San Bruno’s SOI is proposed at this time. On the basis of the Municipal Service Review: Staff has reviewed the agency’s Sphere of Influence and recommends that a SOI Update is NOT NECESSARY in accordance with Government Code Section 56425(g). Therefore, NO CHANGE to the agency’s SOI is recommended and SOI determinations HAVE NOT been made. Staff has reviewed the agency’s Sphere of Influence and recommends that a SOI Update IS NECESSARY in accordance with Government Code Section 56425(g). Therefore, A CHANGE to the agency’s SOI is recommended and SOI determinations HAVE been made and are included in this MSR/SOI study. 35 Final MSR─ City of San Bruno Appendix A. City of San Bruno Fact Sheet City Manager: Alex D. McIntyre Address: 567 El Camino Real, San Bruno, CA 94066 Phone Number & Email Address: 650-616-7056 Date of Incorporation: December 23, 1914 City Councilmembers: Mayor & Councilmembers Term Expiration Date Rico E. Medina, Mayor December 2024 Tom Hamilton, Vice Mayor December 2024 Sandy Alvarez, District 1 December 2026 Marty Medina, District 4 December 2026 Michael Salazar December 2024 Compensation: The mayor and city council members receive a stipend of $1,166 per month and may elect to receive medical, dental, and life insurance benefits. Public Meetings: Second and fourth Tuesday of every month, except for the 4th December in December, at 7 pm. Services Provided: Police, Fire, Water, Sanitary Sewer, Stormwater Control, Telecommunications, Streets & Sidewalks, Lighting, Parks & Recreation Agency staff: 281 Full-time equivalent employees Area Served: City of San Bruno Population: 43,908 Sphere of Influence: Boundaries of San Bruno and the unincorporated areas of the SFO airport lands and San Francisco County Jail #3 FY 2023-24 Budget: $234M, including $132M for Operating Expenditures and $102M for the Capital Improvement Program 36 Final MSR─ City of San Bruno Appendix B. References City of San Bruno MSR Response Letter 37 « D D V V B L B L C A L L A N B L V D DALY CITY GELLERT BLVD J U N IP E R O S E R R A T B O R O U G H BL V D AI R P O R T S Y L V E S T E R R D G AT E W A Y SOUTH SAN FRANCISCO WESTB B O L V D ROUGH BLVD W E S PONDEROSA RD A L S A H A M B R A R D S H IR P O R T B L V A D W R D SHARP PARK RD B RD W I-380 E N G V A L L R D SAN BRUNO U SAN FRANCISCO S H JAIL W Y 1 0 1 S T H W Y 35 S P RI N G S R D AI L R A P N O D R S T S K Y LIN E A L C O T T R D C R Y S TAL D S T H W Y 82 PACIFICA B LV D K B LV R A P CAPUCHINO HIGH SCHOOL Overview San Bruno IN TER STATE H IG H S TA MILLBRAE TAYLOR BLVD C U i n t O D y i D n S T A B c D B o L o V D r u p n o d ra a t r e y d Area in City Sphere P O R TO LA R D Source: Esri, DigitalGlobe, GeoEye W , A i Y - T 2 E c 8 H 0 u IG b H W e A Y d 3 , 5 EHIaLL rt C h R s E t S a T r B G LV e D ographics, ROBLE RD CNES/Airbus DS, USDA, USGS, AEX, Getmapping, Aerogrid, IGN, IGP, swisstopo, and the GIS User Community SAN BRUNO SPHERE OF INFLUENCE San Mateo County Monte Verde School Site 0.07 0 0.04 0.07 Miles This map is a user generated static output from an Internet mapping site and is for reference only. Data layers that appear on this map may or may not be accurate, 1: 2,257 WGS_1984_Web_Mercator_Auxiliary_Sphere current, or otherwise reliable. © Latitude Geographics Group Ltd. THIS MAP IS NOT TO BE USED FOR NAVIGATION Tygarjas Bigstyck Virginia Chang-Kiraly Ann Draper Ray Mueller Harvey Rarback Warren Slocum Kati Martin None Exhibit B Municipal Service Review (MSR) Areas of Determination and Recommendations for the City of San Bruno Areas of Determinations and Recommendations Growth and population projections for the affected area. Determination As of 2020, the City of San Bruno is home to 43,908 residents and contains 16,622 housing units. The City’s adopted Housing Element proposes to increase its housing stock by 22% over the next eight years. The City’s General Plan, coupled with the Transit Corridor and Bayhill Specific Plans, has largely evaluated the impacts of the potential growth and determined that the potential growth will not have a significant impact on the adequacy and delivery of municipal services. Recommendation • None The location and characteristics of any disadvantaged unincorporated communities within or contiguous to the SOI. Determination The City’s sphere of influence and municipal boundaries are nearly contiguous with the exception of the undeveloped San Francisco International Airport Lands and San Francisco County Jail #3. Neither unincorporated area meets the definition of a disadvantaged unincorporated community Recommendation • None Present and planned capacity of public facilities, adequacy of public services, and infrastructure needs or deficiencies including needs or deficiencies related to sewers, municipal and industrial water, and structural fire protection in any disadvantaged, unincorporated communities within or contiguous to the SOI. Determination LAFCo staff is not aware of any deficiencies in agency capacity to meet existing service needs for which the City of San Bruno does not have a plan in place to resolve. The City is aware that the CityNet and Stormwater Enterprise funds are operating at a deficit and is exploring ways to create new revenue so that it is able to continue delivering services. The City routinely adopts a multi-year capital improvement plan for city-owned infrastructure and facilities; however, the City is unable to make multi-year funding commitments for CIP projects related to the Stormwater or CityNet Enterprise funds due to their budget shortfalls. Recommendations - 1. LAFCo encourages the City to continue explore options regarding CityNet, including potential revenue increases or the transfer of the service to another operator. 2. LAFCo encourages the City to continue to review potential revenue increases or the creation of the dedicated revenue source for stormwater projects Financial ability of agencies to provide services. Determination LAFCo staff has not identified any issues with the City’s budgeting practices regarding process. The City of San Bruno prepares an annual operating and capital improvement program (CIP) budget for the upcoming fiscal year that gets adopted by the City Council at a noticed public hearing before June 30th. The City also produces an Annual Comprehensive Financial Report (ACFR) that is reviewed by City Council. The City has not adopted a balanced budget in the last five fiscal years, it has been able to reduce some general fund expenditures and draw from its reserves to fund ongoing operations while maintaining a positive fund balance. The City is currently facing a structural deficit. Looking ahead, the City intends to make additional adjustments and look for opportunities to address its structural deficits. City staff intends to present a long-range forecast to City Council in FY 23-24 that explores new revenue opportunities. The City has not met its annual General Fund reserve goal in four of the last five fiscal years by as little as 1% and as much as 6%. The City has not achieved its target for the Emergency Disaster Fund in the past five fiscal years by less than $200K in the past 3 fiscal years. Enterprise funds such as the Wastewater Enterprise Fund, Stormwater Enterprise Fund, and CityNet Fund have experiences shortfalls in revenue over the last few years. In the case of the Stormwater Enterprise Fund and CityNet Fund, these funds have had to utilize fund from the City’s General Fund in order to sustain operation and capital costs. The City is engaged in ongoing litigation with the State regarding the allocation of sales tax to the City. If the City was to lose the litigation, the City would owe up to approximately $15.3 million to the State, which would impact the City’s General Fund. The City of San Bruno has maintained high ratings on debt issuances. Recommendations - 1. LAFCo encourages the City to continue to explore options regarding CityNet, including potential revenue increases or the transfer of the service to another operator. 2. LAFCo encourages the City to continue to review potential revenue increases or the creation of a dedicated revenue source for stormwater projects. 3. LAFCo encourages the City to continue to explore revenue and expenditure options related to the City’s General Fund in order to adopt a balanced annual budget. 4. LAFCo encourages the City to prepare contingency plans should the City lose the litigation regarding the allocation of sales tax. Status of, and opportunities for, shared facilities. Determination The City of San Bruno partners with several agencies to share resources and reduce costs. LAFCo staff has not identified other opportunities that the City could engage in to share costs and/or reduce duplication of resources, facilities or infrastructure. Recommendation • None Accountability for community service needs, including governmental structure and operational efficiencies. Determination The City of San Bruno ensures that public meetings are accessible and well-publicized. LAFCo staff is not aware of any failures to comply with disclosure laws or the Brown Act. The City has experienced staff turnover in recent years but there are no issues related to operational efficiencies. The City prepares and adopts and annual budget, and annual independent audits are reviewed at a City Council meeting. LAFCo staff does not recommend any changes to the City’s governmental structure or operations that will increase accountability and efficiency. Recommendation: 1. LAFCo staff recommends publishing and posting City Council meeting minutes on the City’s website more frequently and/or in a more consistent manner so that the public can easily locate information on the actions taken at city Council meetings. Any other matter related to effective or efficient service delivery, as required by LAFCo policy including the following: i. Water Resiliency and Climate Change ii. Impact of Natural Hazards and Mitigation Planning Determination The City of San Bruno is engaged in activities to address hazard mitigation, wildfire prevention, and sea level rise for City residents and businesses, including engagement with One Shoreline. While not a service delivery issue, Monte Verde Elementary School, part of the South San Francisco Unified School District is split by the City of San Bruno – City of South San Francisco city boundary line In the future, the cities may wish to consider submitting an application to LAFCo to adjust the boundary so that the city boundary no longer splits the school site. Recommendation - 1. LAFCo encourages the City of San Bruno to continue its work in the areas of natural hazard mitigation and sea level rise and continue to coordinate with partner agencies. 2. In the future, the City of San Bruno and the City of South San Francisco may wish to consider submitting an application to LAFCo to adjust the city boundary so that this line follows property boundaries of the Monte Verde Elementary School site.