City hires NHA Advisors to build five‑year fiscal model; consultant also briefs commission on sales tax and Measure A trends

The South Pasadena Finance Commission on Wednesday previewed a new multi‑year fiscal forecasting project and received a separate, detailed briefing on sales‑tax and Measure A revenues.

John (city staff) introduced the commission to NHA Advisors, a financial advisory firm the city engaged to expand its five‑year projections beyond the general fund. “Mister Hill is the managing partner with the firm. He’s been a professional in public finance since ’89,” staff said in opening remarks, introducing Craig Hill of NHA Advisors. Craig Hill told the commission his firm will build a “sophisticated modeling” platform that uses historical data, stress testing and user‑facing dashboards to let staff and elected officials test assumptions and evaluate scenarios across the general fund, special revenue funds, enterprise funds and the capital improvement program.

“Fiscal sustainability is the key term,” Hill said. He described a process that will begin with a comprehensive data request, then produce iterative model versions and dashboards that staff can operate after the project ends. The forecast will be dynamic and stress‑testable; staff and the commission will be able to change inputs and see multi‑year reserve and structural balance impacts.

The forecast contract will include work to: (1) assemble historical revenue and expenditure data; (2) develop modeling and dashboards for five‑year projections with scenario capability; (3) include enterprise funds such as water, sewer and the golf course; and (4) recommend policy levers such as reserve targets and capital funding strategies. Hill said the firm will emphasize material drivers—line items that move “millions of dollars” in a forecast—rather than spending time on items that produce only modest changes in projections.

Separately, a revenue analyst (Ken) briefed the commission on sales tax and Measure A activity. Ken presented a multi‑year breakdown of local results by business type and explained how destination‑based and delivery (e‑commerce) revenues are pooled at the county level under state administration. He told the commission “there’s no current cap space to raise sales taxes further in South Pasadena, you’re at the cap,” and explained that a local rate increase would require legislative action because Los Angeles County overrides and other voter‑approved measures already push the city’s combined rate to its statutory limits. Ken’s firm provided figures showing the city’s sales tax and Measure A collections were slightly above county and statewide trends in the most recent fiscal year, with restaurant and motor‑vehicle‑related activity prominent among the top revenue segments.

Commissioners asked how the model will treat major development and impact fees; Hill said the model won’t attempt deep economic-development forecasting (for example, predicting a future Costco), but it will allow staff to run alternate assumptions for known or proposed large projects and to analyze impact‑fee approaches that can fund infrastructure costs associated with new development. Hill also said the model will be designed so the city can publish regular public dashboards if it chooses.

Commissioners and staff discussed timing and next steps: staff will deliver the historical data requested by the consultant; NHA Advisors will begin model construction and return iteratively with draft versions; and the commission will hold a budget kickoff (including actuarial and pension cost discussions) in the spring as the model informs the 2024–25 budget cycle. Ken recommended the commission track both sales tax and Measure A receipts separately because Measure A’s destination/delivery capture yields different sector concentration than the city’s 1 percent local sales tax share.

Ending

The commission accepted the presentations and asked staff to prioritize the data request so NHA Advisors can begin building a working model; commissioners emphasized that the work should produce actionable dashboards and policy options the council can use during the next budget cycle.