Regular City Council Meeting September 15, 2020

0:07:05Council finale.

0:07:06Hi I thank you for the quick sound check.

0:07:09I'm going to put you on mute for now.

0:07:11OK thank you.

0:07:12Thank you.

0:07:40And some member I do chemo did you

0:07:41want to do a quick sound check.

0:07:46Sure but I'm trying to fix my video.

0:07:51OK well I can see you would just can't we can't

0:07:54see you but we can't hear you.

0:07:55OK thanks.

0:07:56Thanks a council member came to if you wanted

0:10:31to do a quick sound check.

0:10:32Just kidding I mean I'm doing great.

0:10:35I can't hear you we cannot yet see you

0:10:37but we can hear you clearly.

0:10:38OK good luck.

0:10:40I am looking at the camera right now it's on.

0:10:43Oh OK.

0:10:45Here you are.

0:10:46Perfect thank you.

0:10:47I'm going to meet you for now.

0:10:48OK that was an ordeal.

0:10:50I'm sorry about that.

0:10:51Thank you for being patient.

0:11:11Good evening, everyone.

0:11:14Getting means guy.

0:12:36Thank you.

0:12:37I don't know why I have to do this OK.

0:13:06It can mean council member Abel sin.

0:13:08Hello I had a problem as usual.

0:13:12Well we can see you and hear you hear you well.

0:13:16We're not on yet are we.

0:13:18We are but we have not started yet.

0:13:20We're still waiting for me I'd like to join me.

0:13:23Yes OK.

0:13:24Because I wanted to say something

0:13:25to you that I can't really say this way that I don't want to.

0:13:30But I can reach out.

0:13:31I can give you a call tomorrow if you'd like.

0:13:33No not right now.

0:13:36OK well why don't you let me put you on mute.

0:13:39OK I'll give you a call just a moment.

0:13:41OK town jack getting me may.

0:15:14Lyman did you want to do a quick soundcheck.

0:15:17Yeah I said soundcheck earlier.

0:15:33Were you able hearing.

0:15:36Yes you sound good.

0:15:37And we do believe.

0:15:39Have all of the council members yes.

0:15:46We have all the council members.

0:15:47And we've done sound checks and everybody here is an accountant

0:15:50here and accounted for.

0:15:51So whenever you're ready, you can go ahead and start

0:15:53the meeting all right.

0:16:05I just finished pinning everybody to my calendars

0:16:12so I can see them.

0:16:15And so we will.

0:16:18This is the September 15 regular city council meeting

0:16:21is called to order at 702.

0:16:25Will the city clerk please call roll.

0:16:28Mayor Lyman.

0:16:29Present mayor purdum finale.

0:16:33Council member April saying here council member I. Meadow

0:16:38present and some member keen to council member

0:16:43can don't get a member keen to either.

0:16:55Council member King 2 can you hear me.

0:17:00K looks like council member King just having some audio problems

0:17:03I can confirm he's very visually here.

0:17:05We can go ahead and proceed and then

0:17:06I will have him work with a team to make

0:17:09sure he gets his sound fixed.

0:17:24Item 1 which is a teleconference and public comment.

0:17:30Instructions the clerk will now provide us with instructions

0:17:36and announcements Thank you.

0:17:39Mayor for city council members and staff who

0:17:42are participating as panelists.

0:17:44Please remember to keep your microphone muted whenever you

0:17:46are not speaking for all participants on the call today

0:17:50except for direct chat to the host for technical questions.

0:17:53The chat feature has been disabled if you wish to speak.

0:17:56Please use the hand icon to raise your hand.

0:17:59This icon is found on the participant panel.

0:18:01If you cannot locate the island icon please refer

0:18:04to the document link on page one of the agenda

0:18:07for the raise hand feature.

0:18:09Please note this feature is not available for those calling

0:18:11in the phone only for members of the public who wish to provide

0:18:15oral testimony today.

0:18:17The mayor will announce the time to raise your hands

0:18:19and request to speak for each applicable item.

0:18:22If a member of the public has joined by phone only a request

0:18:26to speak can be submitted to city or at sea El dash

0:18:31so Cerrito c a but us the email must contain in the subject

0:18:37line requests to speak followed by the agenda item number

0:18:42and provide a name and phone number that is used to call

0:18:45in for identification purposes.

0:18:47Written comments received by the posted deadline today have been

0:18:50provided to the city council and posted online

0:18:53with supplemental materials.

0:18:55Any written comments submitted after the deadline will

0:18:57be provided to the city council and included

0:18:59with supplemental materials.

0:19:01After the meeting no written comments

0:19:03will be read into the record.

0:19:05Mayor Lyman were ready to move on to the next item.

0:19:11My you to know I'm not.

0:19:13OK that concludes.

0:19:15Item 1 teleconference and public comment instructions.

0:19:19Item 2 is counsel and staff communications.

0:19:23This is reports from any meetings that have occurred

0:19:28that council members want to give us reports

0:19:32on Janet your own muted.

0:19:34So I see that you potentially want to go.

0:19:37No I was just trying to find the chat feature which

0:19:40is problematic in all eyes.

0:19:44But I found it right.

0:19:45So let me mute it myself then.

0:19:49Unless you have something to announce

0:19:50there's the city staff and elsewhere.

0:19:52OK Anybody else have staff in our city

0:19:55or council announcements.

0:19:59Rochelle you guys I just wanted to quickly

0:20:04give an update on the human relations commission.

0:20:07They have indeed set a date for raising

0:20:12the Black Lives Matters lag and it will be September '20.

0:20:18There will be more information online

0:20:20it looks like there will be a Zoom meeting that the public

0:20:24will be able to help join in as we're trying

0:20:28to keep the crowd size down.

0:20:30For covered reasons.

0:20:32But we are going to have a little ceremony that

0:20:34day on September 26 and the flag I believe is either coming

0:20:41or already there and we're ready to raise it up.

0:20:46That's my report.

0:20:49Excellent and in Gabe you were off mute.

0:20:55Do you want to do a sound check.

0:20:56Can you hear us now.

0:21:00Council member King 2 is having some audio challenges

0:21:03and he's trying to connect with our I.t. right now.

0:21:06Go ahead Janet strewn about.

0:21:11Rochelle was announcing and that was over.

0:21:14Stay in that that's the Saturday the 26

0:21:18according to my calendar.

0:21:20What kind of degree.

0:21:22I believe.

0:21:25I don't believe the exact time has been set,

0:21:28but it looks like it will be in the morning.

0:21:35OK could we find out when you find out.

0:21:42I believe they're having a meeting tomorrow

0:21:44evening to solidify things.

0:21:48I actually will be working at the hospital

0:21:50so I won't be making it but they did

0:21:52say that they will be updating their site

0:21:56their page web page on the city council.

0:22:01So if you go to the city council I'm

0:22:02sorry not the city but the city web page

0:22:05and go to the human relations commission.

0:22:07That information will be posted on there

0:22:09about the ceremony in line with approximately

0:22:12day after tomorrow.

0:22:15I suppose as soon as Yeah.

0:22:17So tomorrow night would be the meeting ever.

0:22:21It can be updated by the city staff

0:22:23so maybe another day or two after that.

0:22:25And so would we.

0:22:28Would council members who wanted to participate.

0:22:30How would we do it buys them or some other way.

0:22:33I believe that the council members definitely can come

0:22:36and I don't think we're prohibiting

0:22:38anybody from coming.

0:22:40We're just being sensitive to the fact that there is coded

0:22:43and we're not trying to draw a large crowd the other people

0:22:50who don't travel in cars.

0:22:53It's very problematic to get to a place right

0:22:56now because of language right.

0:22:58So it just gives me an extra option for people

0:23:02to be able to participate without having

0:23:04to actually be there in person.

0:23:06But we do anticipate there will be a lot of interest

0:23:09and hopefully people will participate.

0:23:13So some folks in person and then also people online.

0:23:17OK thank you.

0:23:21OK so I want to give a quick shout out

0:23:26to some of our fire fighters that are out there

0:23:30at a peak in the last month.

0:23:33We had 11 personnel assigned and two engines that

0:23:37serviced four different fires.

0:23:41Right now we've got a battalion chief Kevin Janes is

0:23:45on an incident management team in the north complex fire

0:23:48and battalion chief Joe Garoppolo is

0:23:52working logistics for the Basecamp X

0:23:54the August Complex Fires.

0:23:56So one of our engines engine 372 this is our large diameter tire

0:24:03for off road driving was on fires

0:24:08for 21 days in the last month.

0:24:11And our oh yes engine oh yes 4 1 3

0:24:14it's the yellow engine has been on a fire

0:24:19now since the 16th of August.

0:24:21So it's on its 29th and 30th day.

0:24:26We've had firefighters on those trucks

0:24:30continuously while they've been deployed.

0:24:33And so we've had one crew was out on one

0:24:38of the engines for 14 days.

0:24:41So this is just sort of a quick update.

0:24:45We do have all of our staff are currently safe

0:24:51but that represents I think I have it in here it's something

0:24:56to the effect of 8,000 personnel hours committed

0:25:02to the fires in the last month and those 8,000 hours that's

0:25:07four FTD will be reimbursed to the city at overtime rates

0:25:13so that we can pay for backup staff

0:25:16to cover those missed shifts and we will also be compensated.

0:25:21Oh yes State owned engine.

0:25:25So we won't necessarily be compensated

0:25:26for that particular engine but we will be compensated

0:25:29for 372 that was deployed and any other vehicles

0:25:33that were deployed.

0:25:34So you know this is a shout out to how hard

0:25:39our firefighters are working.

0:25:41And also that it is something that is not a financial drain

0:25:46on our city and I don't know if the fire chief has any words

0:25:52that that he wants to add.

0:25:54It was a thank you.

0:25:56Keep it going.

0:25:57It was a long update and hopefully

0:25:58I've simply summarized it.

0:26:01But thank you for that update.

0:26:04He's been brought in I don't know

0:26:05Michael if you have any additional thoughts now I'm on.

0:26:12Good evening their counsel and staff.

0:26:16Mike Abigania your fire chief.

0:26:18I appreciate the shout out for our guys and gals

0:26:21that have been out there as you said, for almost 30 days now

0:26:27on various fires.

0:26:29There's I think as of the day besides the four fires

0:26:35or there actually we've been on 11 different fires

0:26:37are different crews since the beginning of this

0:26:41you know getting released from one

0:26:43and going to another daring.

0:26:46Right now we're on three different fires helping out.

0:26:50And as you indicated we've been swapping out crews when we were

0:26:56at the peak with 11 people out.

0:26:58That's over a third of our staff.

0:27:00You know the rest of the staff was having to backfill

0:27:04and keep the city covered.

0:27:06And as you indicated you know the city

0:27:08was totally covered 24/7.

0:27:11We never had a lapse in coverage for.

0:27:14But anyway.

0:27:15But you know the crews are doing really good.

0:27:19They are getting tired.

0:27:21We just relieved crew today on the oas

0:27:24and just put in for brand new or for fresh people on it.

0:27:29And you know the big thing we're hoping for is that you

0:27:32know this this weather calms down

0:27:34and we can get everybody home.

0:27:36But today, as you said everybody's doing well

0:27:40no covert exposures nobody has got sick.

0:27:44So that's a good sign for.

0:27:46And again, thank you for acknowledging

0:27:49the fire department's personnel they are doing a fantastic job.

0:27:54Thank you chief.

0:27:56I mean if I may I wanted to do a quick sound

0:27:58check to make sure council member control could hear us.

0:28:01I was going to get this thing your.

0:28:02Go ahead I can hear you.

0:28:05OK as we can.

0:28:07Thank you so much.

0:28:08OK good.

0:28:09Thank you Eric.

0:28:11All Nike.

0:28:13Gabe do you have any council announcements.

0:28:18Yes I do.

0:28:19I just wanted to let our residents know that regarding

0:28:25future meetings that we will get the mayors conference

0:28:31and you'll be joining us.

0:28:32So we will have our county supervisor speak.

0:28:37John Joyner on the measure x tax.

0:28:41That's a county tax and that will be there.

0:28:45We will have John speak on that.

0:28:48He will also speak at a future council meeting.

0:28:50Our council meeting here in eldorado on October 6

0:28:57thank you mayor correct.

0:29:01He's scheduled for presenting on October 6th

0:29:05on that local ballot measure which reminds me

0:29:09that we should be reminding people that November

0:29:123 is election day.

0:29:14You will be getting ballots by mail

0:29:18and the city hall is a designated

0:29:21ballot drop off point.

0:29:23So if you do vote and you want to make sure

0:29:29that it's delivered without costing postage

0:29:32you can take it to city hall and it can be dropped off there.

0:29:38There there's a ballot box on the inside during regular hours

0:29:42Monday through Thursday and there

0:29:44is a ballot box on the outside south side of the building

0:29:48or a 24 hour service.

0:29:52And I mean, if I could just chime in very briefly

0:29:55and we will actually not be having an internal ballot drop

0:29:58off this year because of the closure of city hall

0:30:01that we will have the external box in which

0:30:03is available 24 hours a day.

0:30:05That box will be unlocked on October 5

0:30:07when the vote by mail ballots are mailed to our voters

0:30:11and city hall will still have a polling

0:30:13location on election day.

0:30:16Right thank you for that correction.

0:30:18So the drop off location is only external on the south side

0:30:21of the building 24 hours a day.

0:30:23And we will be a drop off location in a ballot location

0:30:28on Tuesday, November 3.

0:30:33And that concludes my thoughts on this matter.

0:30:38I will move on to agenda item 3 at this time.

0:30:42That concludes item two which is council

0:30:43staff and communications.

0:30:45We will now move on to item three which is communications

0:30:48from the public are typically limited

0:30:51to three minutes per person.

0:30:53I may reduce the time depending on the number of speakers.

0:30:58This is the time for comments on non agenda items presentations

0:31:03and consent calendar items.

0:31:05So if you are interested in speaking on those matters

0:31:11please use the raise hand feature to request

0:31:14to speak and to click.

0:31:18Will you provide us with the display of the comments

0:31:23that we received prior and distributed to us

0:31:26in advance of the meeting.

0:31:29Certainly mayor up on the screen now

0:31:30is the public comments that were received by the advance

0:31:33deadline of 4:00 PM today.

0:31:35These were provided directly to the council members in advance

0:31:38of the meeting as was posted online

0:31:40and supplemental materials and comments

0:31:42were received from the following individuals

0:31:45for items not on the agenda.

0:31:47Cordell Handler Kathy Daniela and Donald Simon unconcern item

0:31:51for us and for h.

0:31:53We receive comments from Donald Simon as well

0:31:56and the remaining are on the budget item.

0:32:00I will put up on the display here for those

0:32:02on the call with us now the instructions on how to raise

0:32:04your hand and we do have at least one member who

0:32:07has requested to speak if you can confirm

0:32:10the 3 minute time limit.

0:32:11I will go ahead and get him started.

0:32:15B Let's go ahead and do three please.

0:32:17Mr. Miller is usually pretty sick.

0:32:18So Mr. Miller you can start your time now.

0:32:24Thank you.

0:32:25All Miller else resident I just wanted to give

0:32:29a shout out to Mayor mine too.

0:32:32Michael Fisher the city appointed library commissioner

0:32:36for the city of El Chicharito when the other one too well.

0:32:40Heidi Goldstein our senior community library manager

0:32:44for the time and the effort they are preparing their reports

0:32:48that they have submitted for you to review and accept

0:32:54in quite some detail.

0:32:56They both are trying to inform you and the residents

0:33:02and their community that the library is back in business as

0:33:07much as they are allowed to be.

0:33:09And they're up and serving the community quite well.

0:33:14And it should be no surprise to us after the library was closed

0:33:18for some time that even those front door service only there

0:33:24is an amazing number of books, DVDs, and other items

0:33:29going in and out front door.

0:33:31I just wanted to acknowledge them for their reports.

0:33:36Thank you.

0:33:40Reconnect us.

0:33:42That does conclude our public comment request at this time.

0:33:46Excellent and I want to thank those

0:33:50that did provide their comments in writing in advance.

0:33:54Thank you for some of those comments.

0:33:57That will conclude item 3 communications from the public.

0:34:01We will now move on to item for adoption

0:34:03of the consent calendar.

0:34:05We do have 7 8 items on the consent calendar.

0:34:11These are items for approval of the minutes

0:34:14from May 19th June 2nd June 9th to 16th and July 14.

0:34:20Item 4 be suicide prevention awareness proclamation item 4c

0:34:27Hispanic Heritage Month proclamation item 4D contra

0:34:32Costa county library commission update as just

0:34:36stated in the public comment.

0:34:38We do have a quarterly update from Michael

0:34:40Fisher on the library.

0:34:42Additionally, for e is the library annual report.

0:34:47Goldstein has provided us an annual report item

0:34:51for f approval of letter requesting governor's signature

0:34:54on the bill or Senate Bill 1 3 4G bi update

0:35:02of agency conflict of interest code and item for h.

0:35:07Serino Del norte a transit oriented development

0:35:09complete streets improvement project cooperative agreement

0:35:13with Caltrans.

0:35:22Looking at my fellow council members

0:35:24I'll move that second motion by Pardue Okimoto seconded by fdle

0:35:35for those consent items.

0:35:38Mayor I mean if I may before we take a vote

0:35:40there was one correction that needs

0:35:42to be read into the record for our consent.

0:35:44Item a on approval of minutes on page 20

0:35:47of the packet for the June 2nd regular meeting.

0:35:50Item seven B was missing the extension

0:35:53of mayor pro tem fiddling.

0:35:54So if that motion can include that addition,

0:35:58I would appreciate it to produce Okimoto.

0:36:03Would you like to amend your motion

0:36:05to accept the modification to the June 2nd meetings minutes.

0:36:10Yes I accept the amendment and Mr. fidelity

0:36:13you approved the second to include your motion

0:36:16of extension on June 2.

0:36:19I do.

0:36:19Thank you right.

0:36:23With that if we could please have a roll call me lining.

0:36:28Yes mayor pro tem fdle.

0:36:30I can't member email.

0:36:33Yes council member do you Okimoto.

0:36:36Yes council member came tell.

0:36:38I motion carries.

0:36:42And for those that Janet will know what I'm talking about.

0:36:46Mr. Jones used to like to talk about items

0:36:48after they were voted.

0:36:50And so I just want to make sure the public is aware that we do

0:36:53know the action we just took with regards to the letter

0:36:56to the governor.

0:36:58We do understand that it is a increase in our local taxes

0:37:04and we do know that it is something

0:37:07that's a long standing solution hopefully for.

0:37:12And as Mr. Keating suggested we measure actual

0:37:15come before us hopefully for funding

0:37:17that we can use to address mental health

0:37:21issues in our community.

0:37:23So that concludes by looking like Bill Jones.

0:37:27Good afternoon.

0:37:28I'm glad you like it.

0:37:30I want anything.

0:37:33I know I know we have no presentations to that concludes

0:37:37item for our consent calendar.

0:37:39We'll now move item five is presentations there are

0:37:41no presentations this evening we'll move to item

0:37:43six which is public hearing.

0:37:45We have no public hearings this evening so

0:37:47that concludes item six which brings us to item seven.

0:37:50We have two items on item seven tonight 7 and 7b.

0:37:57They are both related to the budget.

0:37:59A is the fiscal year 2020 2021 general fund budget update

0:38:05for July and August 2020.

0:38:10At this time we will receive a staff report.

0:38:16Good evening ma'am.

0:38:17Council members Marquis I find instructive here and here

0:38:22to present to you the financial statements

0:38:25for July and August 2020.

0:38:27And I ask that the council receive and file it

0:38:30to the end of this presentation and I will

0:38:32take your questions as well.

0:38:35I have two statements to present to you.

0:38:38I mean income statement from the general fund the balance sheet

0:38:41for the general fund and a cash flow

0:38:43statement for the general fund.

0:38:47I'm good for you too.

0:38:48The first of these budget the general fund income statement

0:38:51in attachment 1 and I'm assuming that he did in fact they're

0:39:00not making a shot at it No go.

0:39:04I mean yes it can be shared.

0:39:06That would be useful for the public

0:39:07so that as you're talking about it

0:39:09we can focus on various areas that you're talking to.

0:39:14OK so we do that.

0:39:28And my Sarah merry go period.

0:39:54I might even come to Evan in front of you.

0:39:57Why do we only see a blank black screen.

0:40:01Oh well restructuring for a second.

0:40:12So I to get mark I do have the agenda.

0:40:21Pick it up if it's just attachments in the packet

0:40:23that you'd like to display it can screen share for you.

0:40:26OK that'll be fine.

0:40:27I was actually looking like him just Justin.

0:40:31To do that I just give you stuff.

0:40:44There you go.

0:40:46Thank you.

0:40:50So here we have the general fund income statement

0:40:55through July and August through the end of August of 2020

0:41:00and the screen shows us an income statement for revenues

0:41:06and expenses at the high levels the revenues at the top

0:41:10of the statement the expenditures are

0:41:12the bottom half of the statement we have a couple of years

0:41:16for comparison as well as the 19 audited fiscal year

0:41:23and the recently concluded 19 20.

0:41:26I'm not into fiscal year and right next to that we have

0:41:32the July, August actual July and August 2020 any actuals

0:41:37we adopted budget is the next column probably

0:41:41and then the last column is the percentage earned spend

0:41:46through the end of August.

0:41:49So for example, the first line is property taxes.

0:41:53We receive 10.1 million in 2018 19.

0:41:569.7 in '20 20.

0:41:59I think in July and August stuff 2020 because property taxes are

0:42:03generally collected in December and in April

0:42:07and get up in budget for the fiscal year was 10.4 million.

0:42:10So 0% was like so that's something

0:42:12you read this statement across the same thing

0:42:15applies to sales taxes the major taxes sales taxes

0:42:19transfer taxes, and so on.

0:42:20So total taxes to date, we've received 1.7 million,

0:42:26which is approximately 7% of the budget

0:42:2817% of it being complete.

0:42:32And I might point out to that sales taxes are typically

0:42:34received a month in he is.

0:42:36So the number that you're licking your

0:42:38the 585,000 is sales taxes for July that were

0:42:42received at the end of August.

0:42:44So we haven't not received the August allocation as yet

0:42:47doesn't come up at the end of September

0:42:51and then we have licenses and fines use of money and property

0:42:55and a gunman for revenue and so on but our total revenue

0:42:59received to date to the end of August of $2.2 million

0:43:03off a budget of 39.3 which amounts to 6% of the budget

0:43:11and again to remind you a majority of the property

0:43:14taxes show up in December and in April

0:43:17amongst those come in that number

0:43:19would jump pretty sharply.

0:43:21Our sales taxes are pretty uniform throughout the year.

0:43:24So we continue to receive that amount.

0:43:26You know he is and the other revenue

0:43:28sources as we appear in each of these months,

0:43:32we are going to expel him.

0:43:34So that's the broad revenue side of b incomes

0:43:37to general fund income statement that I have here.

0:43:40Mark before you move on.

0:43:42This is two months.

0:43:43So that's one sixth which is roughly 16% to 17%

0:43:48of expectation of our.

0:43:51If something with straight line it

0:43:53which should have a 17% or 16% in the far right column.

0:43:58Clearly you UT they used the sorry the user utility tax

0:44:03and the sales taxes are not at 16 or 17%

0:44:08yet you would expect those to be a straight line for the year.

0:44:13Any thoughts on that initial shortfall.

0:44:17It's on timing.

0:44:19We typically receive things Monthly Notices

0:44:22and typically the second half of the following month.

0:44:25So by the time we capture the August numbers

0:44:28they probably come up at the end of September so that's

0:44:31part of the reason for that.

0:44:33Right OK.

0:44:34So you're saying there's a one month lag in that data roughly

0:44:38that is one to two months in some cases.

0:44:42OK great.

0:44:42Thank you dish.

0:44:45Richel and Janet or Janet you're a muted

0:44:48so we'll go with you first.

0:44:49Janet in a nutshell.

0:44:52First of all, I want to thank you for this report.

0:44:54This is one of the reports that I requested back

0:44:59and we were working on an earlier session

0:45:05and that it lacks the thing that I think

0:45:08would make it really helpful.

0:45:10And that is rather than you're saying it's one

0:45:14sixth of the year's budget or whatever

0:45:18and having these little explanations that go along

0:45:20with all these numbers because you can't really tell anything

0:45:23from these numbers what would be really more helpful

0:45:27would be that no expected cash at that point

0:45:35another is expected revenues expected expenditures

0:45:43at that point in time.

0:45:45Right so if this is the second month and in the first month

0:45:49we expect to receive this sales tax certain amount

0:45:53of sales tax revenue.

0:45:56Then it would be interesting to know that we have

0:45:58or haven't to know what's going to happen for the full year is

0:46:01not all that interesting at this in the beginning

0:46:05part of the year, especially.

0:46:07Is it possible that we could have something

0:46:09like that on the report.

0:46:11Yes In fact the report is being developed as we speak.

0:46:15And it's a new report that will be presented to council

0:46:19beginning corporate back we could have be a year to date

0:46:23budget, which is two months that we've had rather

0:46:27than the full annual budget to isn't just a matter of dividing

0:46:30the annual budget on a monthly basis

0:46:32and putting right back next.

0:46:33That's coming up.

0:46:35Except that I think the point is that it isn't necessarily

0:46:38a matter of taking 12 and dividing it by whatever number

0:46:42it's because when things come in you know in a certain month

0:46:47maybe they let's say that there's something that comes

0:46:49in four times a year, then knowing

0:46:54the monthly share of that is it's

0:46:57like not exactly in line with anything.

0:47:01And what would be helpful would be to know that everything that

0:47:06was supposed to come in in this particular month did come in

0:47:10or didn't come in.

0:47:12That would be what would be helpful is attachment.

0:47:16Excuse me mark is attachment 3 the document that comes memory

0:47:21ableton is talking about.

0:47:23I was just about to say that because an attachment leave

0:47:26break of the budget on a monthly basis

0:47:29across the entire fiscal year.

0:47:31And that shows you exactly how much we expect to reside.

0:47:34But look what's this attachment there is attachment right.

0:47:42But it's on a different report.

0:47:44So it's not it's not helpful.

0:47:49I don't want to have to go look at another record.

0:47:52Right so I can look at the record.

0:47:55I'm trying to look at right side.

0:47:57I would actually take your income statement and index

0:48:00as you said discussion for example property taxes

0:48:04he chose 0 for the first six months

0:48:06as we present the reports and then for each

0:48:09of the month everything else.

0:48:10But he did follow as a monthly business of dividing those by.

0:48:13Is not unreasonable.

0:48:15So for example, sales taxes utilities taxes, and so on.

0:48:19Bs I'll get a free press at a frequent uniform

0:48:22rate throughout the year.

0:48:23So that's a fact.

0:48:24The only thing that pops out twice a year

0:48:27is sales taxes property taxes and that.

0:48:29We can take off from this report.

0:48:32Did we get to December for example

0:48:34and then pop it right back in.

0:48:36So it gives you an estimate of how much got there were seasons

0:48:39for sales tax at higher rates.

0:48:43But given what we've seen in the last few months

0:48:47it's very difficult to predict exactly how sales taxes would

0:48:49fall based on seasonality I mean you have no real information

0:48:55on capital flow where they.

0:48:57What happened in the past happened in the past.

0:49:00So you're just getting on the basis of the assumption

0:49:02that you get an average sales tax each month

0:49:04at this point so that's one of the challenges

0:49:08in taking sales taxes.

0:49:10Given the co-lead 19 janabi that we've had

0:49:12for the last six months right.

0:49:14I don't think that the last column on the report

0:49:17we're looking at is very.

0:49:20I don't trust it to actually present

0:49:22information that I might want.

0:49:24I would rather know what would be

0:49:26expected by this point of time.

0:49:30You know in other words year to date would be helpful.

0:49:34Right so we will fill that into the next report.

0:49:37Let me come back to you so that we can compare two things.

0:49:43And just to know that it theoretically an especially

0:49:48in a time in a time like now or where things are

0:49:51so unpredictable in terms of revenues

0:49:54in particular the issues it isn't very meaningful to know

0:50:01that this is one sixth or one whatever of a year's worth

0:50:07of data it doesn't provide.

0:50:10You know what I'm thinking is that we could take

0:50:12that column and more useful data and it's

0:50:15right underneath numbers on that report.

0:50:19Thank you Jeff.

0:50:21Any other questions on the show.

0:50:24Yes I just wanted to clarify once again what

0:50:27you said about the sales taxes.

0:50:29Did you say that was only what we see there

0:50:32the 585 was only for July.

0:50:35That is correct.

0:50:36OK so then because I was disturbed by the 9%

0:50:42because as mayor Wyman said it looks like we want to shoot

0:50:45for more like 17% to be on track that correct yes

0:50:5217% of the year being complete.

0:50:54We'd like to see 17% at least the sales taxes for August

0:50:59will come in around the last couple of weeks of September.

0:51:03So that's not been there yet.

0:51:05So if by chance this were to repeat itself.

0:51:09We would theoretically be on track.

0:51:12We've got another 585.

0:51:16Right but at which point Dave would be looking at three

0:51:18months and not just two months.

0:51:19Right so you'd be looking at 25% of the year being complete

0:51:23and having receipts you'd always have one

0:51:24month lagging in sales taxes.

0:51:27And he's the council member ever since Colin comes in useful

0:51:31because he put to the attack as exactly how

0:51:35much you expect for two months.

0:51:36And that would mirror exactly what you've got.

0:51:41OK, so are you saying that there's a lag time for this one

0:51:43report but all reports going forward we'll

0:51:46have two months worth of sales tax in one month

0:51:50less than the month that they're looking at.

0:51:52So that would account for the lag in sales tax.

0:51:56That would be missing if there for example

0:51:58let's say if you were looking at the December report

0:52:02we'd have five months worth of sales tax in Baltimore.

0:52:08And we're not just doing two months at a time.

0:52:11No the first time a few months at a time

0:52:13because we've missed the July meeting which was prepared

0:52:16for July and then we combined it with the August meeting

0:52:18and that's only a few months OK.

0:52:22Yeah I mean I guess overall the data is then

0:52:26it's hard to say whether we're on track or not in terms

0:52:31of sales tax that is correct.

0:52:35And again, keep in mind that this report

0:52:37would be cumulative.

0:52:39So each month would be added to the previous month and so on

0:52:41and we will make the adjustment to the comparative column,

0:52:44which is the budget column just to reflect what we think should

0:52:47have been sales taxes at that point

0:52:49in time, which accounts for the one month lag

0:52:52that we would have on that.

0:52:54OK thank you.

0:52:56Triple hadn't approached the bottom half of this table.

0:53:07Yes meet me if I may have fdle has his hand raised.

0:53:12I didn't see it before.

0:53:13Go ahead Paul.

0:53:14Thank you.

0:53:15So just a quick question on the business license tax.

0:53:18The reason it's so high is because that is a timed the

0:53:23beginning I see on the other memo

0:53:26attachment 3 that we only have what, four months when business

0:53:29licenses come into the city.

0:53:32So there I was wondering why that

0:53:35was so higher that number that 611

0:53:40when there's usually 959 for all year.

0:53:44Right right.

0:53:45So the budget is a dime 50,000 for the current year

0:53:48and typically business licenses are run through the fiscal year

0:53:52starting July 1 and in most instances

0:53:55we collect more stuff within the first couple of months

0:53:59and that's part of the reason why the number is high.

0:54:01It should have been approved maybe 750,000

0:54:03under normal circumstances just being licenses

0:54:07and we expect to make that number by the end of October

0:54:10because there's no penalty for operating

0:54:13licenses later this point.

0:54:14So we would expect some folks to up

0:54:16closer to the final days before they make the payment on that.

0:54:20So a majority of the business to answer your question

0:54:22the majority the business licenses

0:54:24are collected within the first month

0:54:26of the fiscal year itself.

0:54:27Right but again we can't tell if this is higher than normal.

0:54:32We were kind of hoping it might be higher because

0:54:34of our rental registry but this doesn't

0:54:36indicate a higher than normal input

0:54:40or signing up for business licenses.

0:54:43Is that correct.

0:54:44That's possible because there's no way of saying,

0:54:47how many of the businesses are actually going out

0:54:48of business for that matter.

0:54:50So this is an unusual number.

0:54:52It's an unusual you typically do to get most of it

0:54:55in the first month itself.

0:54:57So we'll have to see over the next four months

0:54:59whether or not that number gets higher

0:55:01and compare it to last year.

0:55:04That is correct.

0:55:06Thank you.

0:55:11I just jump down to the bottom half of that report.

0:55:14How do people just move it out.

0:55:16So here you have the expenditure side of the income statement.

0:55:19Again high level summaries personnel

0:55:22professional service and so on.

0:55:24The biggest item of expenditure as you know

0:55:26is the salaries and benefits section of it.

0:55:30The budget is 29.8 million with 17% of a year complete.

0:55:36We have incurred 15% of salaries and benefits

0:55:41for the month of July and August and this typically follows

0:55:45they've been flow off payrolls.

0:55:47So we have to payroll each year each month and in some months

0:55:50we have three in the last couple of months, we've just had two

0:55:53and therefore it's well within the 17% range and not too far

0:55:58from it.

0:55:58So that's what we see out there as the payroll

0:56:01cost benefits and salaries cost of 4.4 million dollars.

0:56:05And then the other items are professional services

0:56:08other services and financing costs for a total

0:56:12of $5.5 million dollars in expenses.

0:56:15And he's got a train comes in because the train

0:56:18had just bridge that be friends between revenues and expenses.

0:56:21It's a cash flow tool that helps us manage our cash

0:56:25flows to date been for cash flow and so we have a next deficit

0:56:31of 3.3 million of those we have brand money that supports

0:56:35this income statement for the first half of the year

0:56:39and that commits us to continue to make

0:56:41the payments while the revenues come in slowly naturally

0:56:45to the fiscal year.

0:56:47So that's pretty much what it is 14% of total expenses

0:56:50have been expended as a budget was

0:56:53a 17% of the fiscal year being complete any questions on that.

0:57:04Seeing them when you move on to attachment to whom

0:57:11you have the balance sheet.

0:57:12Again, it's a graph.

0:57:13I'm not in that balance sheet a balance sheet

0:57:15is just a snapshot in time at a specific point in time

0:57:19unlike the income statement, which tracks

0:57:21two months July and August.

0:57:23This fund is specific to the month of August

0:57:25after the end of August and it gives us

0:57:28the assets and liabilities in the system as

0:57:31of that the first column is the audited 2019 balance sheet.

0:57:37The second column is 2020.

0:57:39June 30th.

0:57:40I'm not he did balance sheet just for comparison

0:57:42and have a look for June 30th and the I know

0:57:45you did last column is for the balance sheet for the month

0:57:49or the period as of 30 1st of August

0:57:53and you'll note that we have total assets of 4.9 million

0:57:57again.

0:57:57Remember that was to file revenues for the fiscal year

0:58:00have not come in there would automatically go into cash

0:58:04and eventually become assets at some point

0:58:06you have liabilities of 10.6 million.

0:58:10And holly can I told you I'm just a bit and the chart

0:58:15the big chunk of liabilities the short term north that we have

0:58:18over 8.65 million, which is the trend

0:58:22and then the net difference is what we call the difference

0:58:25in fund balance of 5.7 million at this point in time

0:58:29the fund balance is a moving target.

0:58:30It changes every day and depending how much

0:58:33cash you have and what liabilities

0:58:35you have at any point in time.

0:58:37So for example, if you were to bring in a lot of revenue

0:58:39and not spend a penny of it that's

0:58:41going to cash and immediately wipe out

0:58:43lot of fun balanced deficit.

0:58:45But then again expenses continue to accrue

0:58:48and therefore the balance between expenses and revenue

0:58:51impact that fund balance.

0:58:52No so even though he chose 5.7 he

0:58:56would continue to see a growth in fund negative fund balance

0:58:58as long as cash lags expenses.

0:59:01The moment cash starts catching up with the expenses

0:59:04that thing starts getting back so that didn't summaries

0:59:08of balance sheet is just a snapshot

0:59:10of our assets and liabilities at any point in time.

0:59:13And I'll take some questions on that

0:59:16and this is just the general fund.

0:59:17This does not speak to any of the other special funds.

0:59:21That is correct.

0:59:28Janet you're still muted.

0:59:33Janet go.

0:59:34No you're not.

0:59:35Now you're muted again there you know that speak I hope

0:59:39somebody is helping me mute.

0:59:40Yes that's the problem.

0:59:42OK it's on mute it again.

0:59:44No I hear you.

0:59:46OK OK.

0:59:48So looking at this report.

0:59:52This is kind of like the checkbook at a point in time

0:59:58at the end of the month.

0:59:59I think I guess in this particular case.

1:00:02And so this would be if you looked at your checkbook

1:00:05if you had such a thing for the general fund

1:00:10then this is it would reflect this information as a balance.

1:00:16All right.

1:00:19The checkbook plus the checkbook is just a balance

1:00:22of how much cash you have.

1:00:23But you might have cash statutory and other assets

1:00:25and things which might agree assets.

1:00:29And then again you might be owing money to others

1:00:32and that might be reflected in your liabilities.

1:00:35So these are essentially a balance between a net position

1:00:39your total assets.

1:00:40How much you have and how much you

1:00:41owe OK so this isn't getting at the cat a true cash flow then.

1:00:50That's cash flow.

1:00:52Yes and so if assets are tied up in something,

1:01:00then they're not can't be used to.

1:01:02For example, pay salaries easily.

1:01:05Yes and I guess I was thinking of the cash flow

1:01:11as being a reflection of cash.

1:01:14So that we could tell when we were going to be short on cash.

1:01:18That's your next step, which is your cash flow statement.

1:01:21Believe that.

1:01:22OK OK.

1:01:22So this one this one says cash flow on it though.

1:01:26I'm looking I'm looking at attachment 3 to 2.

1:01:31Oh you're on to it still.

1:01:33Yes OK.

1:01:34I'm sorry.

1:01:36OK never never mind what I was saying.

1:01:41Yeah I'm just I'm on attachment to Mark.

1:01:44Where did you say the train was registered.

1:01:47Where this Sunday liabilities insurance short term loan.

1:01:53Eight 5 4 5.

1:01:56That's your friend right there.

1:01:58So that's the amount the amount we pay on it

1:02:03is in the next chart.

1:02:07So the amount we owe on the train

1:02:10is on budget excluding interest.

1:02:13It's the principle that we owe.

1:02:15And the next shot would tell us how

1:02:17we would pay that thing back at the end of the fiscal year.

1:02:22And this amount is only for not the most recent trend

1:02:25but the previous trend the previous trend is under the I

1:02:29know he did call them for 2012 needs the nine million dollars

1:02:32and the prior year we had a 6 million dollar trend.

1:02:35So at the close of the fiscal year

1:02:37he had it four out of six and nine.

1:02:39And at the close of this fiscal year

1:02:40we'll have a trend of 8.659 OK.

1:02:46Thank you.

1:02:51All right.

1:02:52Let's go out to attachment 3 the last attachment here

1:02:56that is also reflected in the other

1:02:58the next 3 attachment for July is the cash flow forecast.

1:03:03It's the general fund cash flow forecast and what we do here

1:03:06is we take the budget that we've adopted

1:03:10for the current fiscal year and break it out

1:03:12in terms of each of the revenue and expenditure line items

1:03:16and track how that thing moves in relation to how

1:03:19cash is received and spent.

1:03:22So for example, you take property taxes

1:03:25into the top line item there the budget

1:03:27for the current fiscal year is 10.4 million.

1:03:31We expect to receive a majority of it

1:03:33in December approximately 4.9 or even five million

1:03:36in December and other 5 million in April

1:03:39and a few amounts in October and June as the key.

1:03:42So that's how we expect to see that revenue source coming in

1:03:47and we apply that same technique to all the other revenue

1:03:50sources but actually sales taxes we assume they are coming

1:03:53at a uniform rate to end that but what's been going on let's

1:03:56call it that Nouriel view of reflecting

1:03:58the seasonality just yet.

1:04:00And the other revenue sources that

1:04:02have been allocated equally among the months

1:04:06and likewise on the expense side which reflects family personnel

1:04:10costs the budget is 29.89 million

1:04:13broken out among the throughout the year

1:04:16and in some months you would see a little bit more

1:04:18because there are team payrolls in that particular month

1:04:21for example in December and in June next year

1:04:23So making those adjustments you have revenues and expenses.

1:04:28And then every side is your net cash flow

1:04:31our surplus on a monthly basis and the very bottom line

1:04:35tells you what do you carry forward balances as it

1:04:38rolls over from month to month.

1:04:40And the one but the last column, which is June of 2021 shows

1:04:45that we have we expect to have an ending balance

1:04:48of 8.9 million in cash one step that

1:04:52should be used to Buildertrend off

1:04:54the first part of July 2021.

1:04:57So this is a forecast in other words,

1:04:59keeping in mind that the budget is the tool that tells us

1:05:03how much we expect to receive and spend

1:05:04and that drives of cash for gas for us.

1:05:10Besides that there nothing else that I need mentioned here

1:05:13other and to say that the first call in July shows a 9 million

1:05:19pound principal payment and that was the 9 million

1:05:21that it paid off for the previous trend.

1:05:24The next one does not show in June because that'll

1:05:26be paid off in July of 2021 which is the next step that

1:05:30step beyond this cash flow and they

1:05:35have to take questions on that.

1:05:37Janet I think you have questions on this holly can

1:05:43you unmute her please.

1:05:43Thank you.

1:05:44Go ahead Jane.

1:05:45Oh you're me.

1:05:46OK thanks.

1:05:48I think I was just confused about what attachment you

1:05:51were talking about at the time.

1:05:56I think I got that was cleared up already.

1:05:59I believe I think this is the.

1:06:02This is the true cash flow report I need your checkbook.

1:06:08Miscue right.

1:06:09The checkbook is right at the end of the month right.

1:06:14Right it doesn't show up.

1:06:17It's if the high point of need for cash

1:06:21we're in the middle of the month say relative to the anything

1:06:28else then it wouldn't show that actually would miss that it

1:06:35would not be a 30 day month.

1:06:37But the advantage that we have is

1:06:38that we have we can exploit the party payment rule almost

1:06:43no one takes a full salary.

1:06:46We can always push things around move things around.

1:06:48We have to meet any shortfall during the course of the month.

1:06:51And that's one of the advantages I

1:06:53would assume of your what I'll now call still

1:06:56new payroll system or accounting system that you

1:07:02touted to us a while back.

1:07:04Yes you can be like that.

1:07:07Yes you could.

1:07:08OK thank you So Mark I have a few questions on this one.

1:07:16Can you.

1:07:18First of all this is the August 1

1:07:22and yet there's nothing on here that indicates August.

1:07:25And when I compare it to July that July

1:07:271 is equally nondescript as to which month it is.

1:07:31So they're indistinguishable.

1:07:35Once you look at them except for the attachment number.

1:07:38So it would be wonderful if there was something

1:07:41other than the attachment number to identify which

1:07:44which monthly report we're looking at when I compare

1:07:48this one to attachment 6.

1:07:51There's a pretty significant change in for example

1:07:54the distribution of sales tax.

1:07:57And so I'm just curious if you could speak to what why there's

1:08:06a change between the July 1 which is attachment 6 which is

1:08:09what's up now and the August 1.

1:08:12With regards to the numbers.

1:08:13So for example even the payroll for example, is another one.

1:08:17This one has a three payroll in July

1:08:20and three payroll in December and three payroll in it.

1:08:24Actually no three payroll in June.

1:08:26So we're just curious as well we constantly

1:08:30see changes month to month or will some of these things

1:08:35settle down.

1:08:37I'll answer the second question first.

1:08:38You'll be seeing changes from month to month

1:08:40but that's a casual sort of casual forecast

1:08:43does reflect what we think we would receive based

1:08:46on what we have already received and therefore

1:08:48make changes to it.

1:08:50Important thing to note is as you quite correctly point

1:08:52out the July cash flow statement shows you a higher payroll

1:08:56which was three point for five million

1:08:58because we actually made panels in July.

1:09:02That was a payroll on 3rd of July on the 17th of July

1:09:05and I'm pretty close of July I think.

1:09:07So that was prior to the accounting

1:09:09adjustments that be made ready to back the payroll that was

1:09:13paid out on the 3rd of July back into the previous fiscal year

1:09:16which automatically adjusts the cash that comes

1:09:19into this cash flow statement.

1:09:21So the August statement reflects those adjustments already

1:09:24which the July statement did not because it was still fresh

1:09:27in our minds and in our system as well

1:09:28and took to capture that well the starting here

1:09:32on attachment 6 is starting beginning balances 9 million

1:09:36$270,000.

1:09:38And I think when we go back over to attachment 3

1:09:42it's an 8 million dollar number and that's again,

1:09:45reflecting that payroll that's been shifted

1:09:48towards June of 2020 and not.

1:09:53And we can see that the payroll line

1:09:55item is now not a $3 million number it's a two million

1:09:59part number.

1:10:00But again the starting balance is not a 9.3 million

1:10:02dollar number it's an $8.5 million number.

1:10:05So if I get it that there will be changes as you

1:10:09make your accounting modifications.

1:10:15OK that's great.

1:10:15Thank you.

1:10:16That was quite.

1:10:18With regards to the sales tax.

1:10:21It was 584 for the month of July.

1:10:24And then 5 0 NON-English.

1:10:26And in this one you've normalized it to 585 586

1:10:30through the year.

1:10:32That's because you that's at one month

1:10:35lag that we were discussing on the first chart.

1:10:38Is that correct.

1:10:39That is correct and also for the first two or three months

1:10:42of this cash flow I will try and typically attract the budget

1:10:46keeping that as my guide.

1:10:47But once the first three months come in

1:10:49and I realize that raise it significant

1:10:52I would see a difference between what I budgeted for

1:10:54and what's actually coming in then

1:10:56I would make the appropriate adjustments.

1:10:58So you'll notice that I've taken the 6.45 million CEO

1:11:01stacks of them distributed almost equally among the bonds

1:11:03that we have been getting through October, November

1:11:06and is in better change.

1:11:08And I think I made a recommendation at some point

1:11:10that as numbers are actualized on this that potentially you

1:11:15would make them a different color too so that we can

1:11:18quickly reflect four months from now there will be three columns

1:11:23or maybe even four columns that have numbers that reflect

1:11:28actuals and you would potentially

1:11:31have those as a different color as we go through the year.

1:11:34That was a suggestion I don't know how you are going

1:11:37to indicate again going back to the fact

1:11:40that this is the August report.

1:11:42It's difficult to tell this.

1:11:44The August report at this time except

1:11:47for the attachment number that the change to report title

1:11:54I would just shift the columns that represent the months that

1:11:56have passed and so that all of us know exactly what's changed.

1:12:01The great any other one anyone else

1:12:06have questions on this item Rachelle

1:12:13I just wanted to follow up on what you said men or women.

1:12:18With those two numbers in July being different.

1:12:22I know that's where we ran until a lot of trouble

1:12:24before with the auditors.

1:12:25So is there a standard that we're

1:12:27following narrow in terms of what we're accounting

1:12:31for June versus July.

1:12:33I mean I find that using it.

1:12:35Would you explain it one more time visa for me.

1:12:42Yes that's why you ask the question is with regards

1:12:46to the fact that the July 3rd payroll was reallocated

1:12:53to the prior fiscal year.

1:12:56Rochelle is recalling that four years ago when

1:13:0013 of 14 payroll days were in one fiscal year

1:13:06or the other and it.

1:13:08And it caused us quite a bit of heartburn

1:13:11when it got moved from one fiscal year

1:13:13report to the other.

1:13:14So that's what the question is, is there

1:13:18a standard by which we're using to allocate payroll

1:13:22to one fiscal year or another.

1:13:26So keeping in mind that the adjustment that the auditor

1:13:29made four years ago was to be income

1:13:31step one which is not the cash flows

1:13:33to the cash flow statement.

1:13:36It's perfectly all right to have an actual cash

1:13:38flow statement that is sure the t payroll in July.

1:13:41But the corresponding opening balance

1:13:43has to reflect that difference.

1:13:45But we chose to do with this cash flow statement is to show

1:13:48the actual expenses in July meaning the two

1:13:51payrolls in July as opposed to three

1:13:53because the budgeted number is based

1:13:56on 26 and not 27 payrolls.

1:13:59So we move that payroll back in.

1:14:01So it's not an income statement adjustment.

1:14:04The income statement adjustment had not been done prior

1:14:07and that's February to contribute and to help you have

1:14:09to make this accrual in the past which had not been done

1:14:13for a cash flow statement it didn't really matter

1:14:15because it's almost a wash.

1:14:17If you leave the money in there on the expense line

1:14:20you have to bump up your opening balance

1:14:23to take it out of the opening balance,

1:14:24then it takes down expenses.

1:14:26So there's no standard in that sentence and auditing standard

1:14:31on an accounting standard that is one reason or the other

1:14:34is not but that he's not eating the accounting standard that

1:14:37says that you have to accrue expenses in your income

1:14:40statement into the prior year.

1:14:44OK thank you.

1:14:45Jim I'm looking at my fellow council numbers

1:14:51for any additional questions I'm going to take the opportunity

1:14:57at this time to read my script.

1:15:00This is a moment where the public comment if the public

1:15:04wishes to provide comments on this item they should use

1:15:07their raise hand feature to request

1:15:10to speak me and confirm the time limit that you would like to.

1:15:19We're doing well.

1:15:20Let's go ahead and use three minutes.

1:15:22OK so we do have our first speaker is sherry.

1:15:25Nick sherry you are a media and can begin your time now.

1:15:30Thanks I'm not a budget expert by any means

1:15:34but I just curious because it looks like the train

1:15:40because the way you account process

1:15:41works it seems like the train is sort of a permanent fixture

1:15:46in the budget.

1:15:47So as you look at it with cash flow in and out

1:15:53so it looks like one of the attachments whatever

1:15:56is remaining the million goes to pay back

1:15:59the train the following July.

1:16:02So I'm just confused as to whether the goal

1:16:07of the council and the city is to continue

1:16:12with this tool that won't work.

1:16:15Call it a tool I call it something different

1:16:20where to continue with that or is it something just

1:16:25because of how difficult the period is right now we're just

1:16:29sort of washing calling it a wash

1:16:33and continuing with the next year.

1:16:36So I was just dumb it was just taken by that

1:16:40when I was looking at it.

1:16:41But I know hard to say.

1:16:46Does it thank you.

1:16:51And I'll actually build on that.

1:16:53If we could bring up attachment 3 again.

1:16:58Because there was a question that this is trying to reflect

1:17:04our budget for last year and our budget

1:17:07is you know targeted at these numbers 48 million and 47.6.

1:17:16However, if you look at the net net cash flow surplus and slash

1:17:20deficit for the month of June it's only 167,000

1:17:25but our budget is supposed to grow by more than that.

1:17:30So I'm just curious mark that 167 is the incremental

1:17:36that month the month of June's surplus but the annual surplus

1:17:41is the 450 for which in our budget

1:17:43document which we'll get to next.

1:17:45It's like 650 or something.

1:17:48So we're not we're within an order of magnitude

1:17:50but it's not it's not precise in that I'm

1:17:52sure has to do with the modeling that we're doing.

1:17:55So yes that's because some of these numbers for example

1:18:04were reflective of the budget while the others need be.

1:18:10I mean it's a mix of both.

1:18:12We have for example the trend interest payment of 196,000

1:18:18and that was from the previous trend

1:18:22and you'll notice that in the budget for example

1:18:25we had provided something like that in so many 2000

1:18:28for the current trend.

1:18:30So there is a difference, right there.

1:18:31So cash flow statement to keep in mind

1:18:33is a reflection of actual cash that moves in and out.

1:18:37So technically, I should be able to take that 196,000

1:18:41and push it back into the last fiscal year

1:18:42because that pertains to that trend.

1:18:45It's an expense.

1:18:47So yes is a cash flow item as opposed to being moved

1:18:53back into the last fiscal year.

1:18:54So it naturally reduces your balance open just the question.

1:19:00It does again.

1:19:02It goes to the fact that this particular document has a very

1:19:08targeted purpose as Janet has aptly called it

1:19:13it's our checkbook balance report

1:19:15and it really is to tell us whether or not

1:19:17we have a cash flow issue to the speaker's comment.

1:19:23This ultimately ideally would suggest the bottom line

1:19:28the ending balance would grow to the point

1:19:32where we did not need trends on a regular basis.

1:19:37And that is I think the goal of our next item,

1:19:40which is the budget that.

1:19:44Mr. Padilla I was just going to.

1:19:47Mr. may I reiterate what you just

1:19:48said somewhere in the documents in our package

1:19:52is the statement that the train is supposedly based on what

1:19:56we've decided going to be around for two to three

1:19:59more years at least as a tool to pay

1:20:02the bills until we start accruing

1:20:04and building up some reserves and some money.

1:20:07So I. Mark I'm not sure exactly where that statement is but

1:20:10that answer sherry's comment.

1:20:13It's not our wish to continue to have this.

1:20:16That's part of how we get out of the dilemma we're ahead

1:20:19by paying track and cash and hopefully

1:20:24it goes away after three years.

1:20:26Is that right mark.

1:20:29We're moving.

1:20:29So as well.

1:20:31Yeah And notice that the previous time with 9 million

1:20:36begin coming with half a million less on this one.

1:20:39So I'm hoping that we take that road and see us having smaller

1:20:44and want trend as time progresses.

1:20:46Yeah I mean a simple way to look at it

1:20:48is if you look at the five red numbers that occur between July

1:20:54and November cumulatively those are

1:20:58three, 4, five for almost six million of negative balance.

1:21:04We would need to have an ending balance near 13 or $14 million

1:21:13in the month of deal at the end of June

1:21:16in the bank to sustain that cash flow.

1:21:21This cash flow and that would be it would be wonderful to have

1:21:26an additional seven or eight million

1:21:28and that would represent the a target

1:21:34general fund balance of almost 15% to 17% Rochelle

1:21:40I saw your hand.

1:21:43Yes I just wanted to also comment just

1:21:46to let people know that I don't think any of us want to stay on

1:21:53the trend.

1:21:53And I agree with the public criticism

1:21:57that we have not worked hard enough in the past

1:22:01to get ourselves off of it.

1:22:02And I think we should be more aggressive in this time

1:22:07and that's why I do find it a little bit disturbing maybe

1:22:10a lot of it disturbing that our ending cash flow balance to pay

1:22:14off the trend according to this chart

1:22:17doesn't seem to have a very big cushion.

1:22:20I would like to see that cushion widened.

1:22:22So that we can at the very least be able to pay off this trend

1:22:27without having to borrow money from other funds

1:22:30or do anything drastic at the time.

1:22:33I think the time is now to make the necessary cut back so

1:22:37that we have the cash on hand to pay the crown off

1:22:41and to save money at the same time in Janet.

1:22:49Sorry go ahead mark.

1:22:50I had a couple of comments that I

1:22:51make I didn't have any other questions you might have

1:22:57Janet I didn't say anything.

1:22:59OK mark go ahead.

1:23:04Yes so the first thing I want to point out is yes you're right.

1:23:09That number right at the end of June

1:23:10is absolutely critical for us.

1:23:12That's 8.9 million.

1:23:14If you're going to use at this point

1:23:16in time that we expect to have to be

1:23:18able to pay off that trend.

1:23:19And that's predicated upon a number of different things.

1:23:22But on the revenue side property taxes to a large extent

1:23:25is certain.

1:23:26And I would say, a sales tax is still pretty much going

1:23:29to be budgeted at 10% below.

1:23:31And that should come in at that level as well

1:23:32and transfer taxes I said as well.

1:23:35The piece that's uncertain here is charges for services

1:23:39from the recreation programs and things like that

1:23:42that could impact the numbers.

1:23:43It's important for us to keep in mind that we need

1:23:46to keep an eye on that last number

1:23:48the 8.9 year just to make sure that it's moving upwards as

1:23:52opposed to downwards because if you keep the point value drops

1:23:56below eight points five then you'll try

1:23:59and at that point is jeopardy and we need to make

1:24:01sure that whatever happens.

1:24:03That's the first point.

1:24:04The second point I wish to make is,

1:24:06again, I'll make this comment and then to my remarks.

1:24:09The fed has reviewed this document

1:24:11and they're proceeding to document as well

1:24:13at their last meeting and they have

1:24:15unanimously recommended that townsville

1:24:18receive and try this report.

1:24:20Thank you.

1:24:21Call and I'm going to build your comment mark about watching

1:24:26and think we're shell for pointing this out that ending

1:24:30balance for June of 2021 which is currently eight

1:24:35million 924,000 that is the bellwether number that we need

1:24:40to watch as this financial model this cash

1:24:44flow moves through the year.

1:24:47That number is the number it it is the result of all

1:24:50of the columns that precede it and that number as Marcus

1:24:53said and Rachelle has pointed out

1:24:55needs to generously exceed the 8.75

1:25:01million that's the 8.66 million Tran plus the $72,000

1:25:06of financing payments.

1:25:07So 8.75.

1:25:10It needs to exceed 8.75 at all times.

1:25:13And if it doesn't it means that I think customer Keto has said

1:25:18this more than once it means that we would

1:25:20have to make adjustments during the year

1:25:22to protect that number.

1:25:25So I just want to re-emphasize and Gabe I see your hand.

1:25:32Go ahead.

1:25:32Yes thank you America.

1:25:35I appreciate you remembering that.

1:25:37I wanted to ask Mark mark remember back

1:25:40at the end of 2018 when we were celebrating and having

1:25:46not measure B victory you told me to keep

1:25:50it in the bank don't stand it.

1:25:53And here we are spending spending continuing to spend.

1:25:58And then again I ask you at the end of 2018

1:26:03do you believe we need to finally

1:26:05consider austerity measures.

1:26:10What is your take on that.

1:26:11Do you consider what we're dealing with now

1:26:14and what we're dealing with in the future keeping everything

1:26:17in the bank and not spending.

1:26:19Do you consider that austerity measures

1:26:22that we need to work on.

1:26:25Council member I think you'd make a point that in fact

1:26:30we been very busy on the budget side of this conversation

1:26:33as well.

1:26:33There are several onetime sources that have not been

1:26:36factored into this cash flow.

1:26:38And one of these is the Kazakh 300,000 that we get.

1:26:42So that's hopefully going straight to the bank.

1:26:45Me a conservative estimate on the real property

1:26:49transfer tax which is supported by trends of 2.4 million.

1:26:52That is, we actually be given 3.4 million

1:26:55for the past fiscal year.

1:26:56So if anything comes above that that's

1:26:58going directly to the bank.

1:26:59So when I say the number down here 8.9 million

1:27:03it excludes those onetime things.

1:27:06So while it might sound dire it's not totally backed

1:27:10and keeping in mind that we have not completed our 1920 1920

1:27:14fiscal year audit which shows a deficit of 220 million,

1:27:18which is, in my opinion, the worst case scenario that's

1:27:20coming up 2 million for example in which case

1:27:23the savings that would go straight

1:27:24to the bank that has not been factored into this cash

1:27:28flow as well.

1:27:28How do you make that point.

1:27:29Well thank you very much.

1:27:32Great thank you.

1:27:33Mark you bring up the audits and our potential CAFR

1:27:37what are those documents.

1:27:39Do I know the last couple of years we've been getting them

1:27:42in January and February is we hopefully on track to get them

1:27:46to an earlier point this year of being the final audit

1:27:51will happen at the end of October.

1:27:53I point out the auditors will take about a month

1:27:55doing those things around.

1:27:56We should be looking at it.

1:27:57By the meeting due in December this year.

1:28:00So that is the target to at right.

1:28:06Thank you.

1:28:08And as long as you're talking audits Karen can

1:28:12you please give us an update on the state auditor

1:28:17or the lack thereof you bear.

1:28:22Can I pick a city manager and I would go there

1:28:25but I have not heard anything from the state auditor.

1:28:30I reached out to them months ago and they

1:28:32said that you know with Pope that everything was up

1:28:35in the air I have not received any indication that anything is

1:28:39coming from the state auditor at this point we are prepared

1:28:42if they call me tomorrow.

1:28:44But at this point we have no indication sorry great.

1:28:51Thank you.

1:28:53With that I'm going to propose that we

1:28:59could include item 7 a which was actually doing it in action.

1:29:07Sorry yes.

1:29:10Well OK.

1:29:11I saw cut council comments.

1:29:14You want us to receive and file is that correct, ma'am.

1:29:18Yes can I get a motion to receive and file can it.

1:29:24Yeah I make a motion that we receive

1:29:26and file the recommendation of the Financial Advisory Board

1:29:33to do so.

1:29:35Well said a second that motion by Abel

1:29:39sent seconded by part Okimoto.

1:29:41We have a report call please me and I'm in.

1:29:44Yes ma'am pretend fidelity PSI council member Abelson.

1:29:49Yes council member I Okimoto.

1:29:52Yes council member can tell type.

1:29:55Motion carries.

1:29:59All right.

1:30:00That concludes item seven.

1:30:02A general fund to fund with an update for July and August

1:30:06of 2020.

1:30:08We will now move on to item seven b

1:30:10which is fiscal year 2020 20 2021 proposed

1:30:13amended budget tonight.

1:30:16There is no action.

1:30:17However, we are going to have a discussion

1:30:20about the budget presentation and a discussion

1:30:22about the budget.

1:30:24So I believe we have a staff report there

1:30:34and I will be somewhat tag teaming this presentation

1:30:40with mark sire.

1:30:41So thank you mark for your previous budget items.

1:30:46And this is now a discussion of the fiscal 2020 21

1:30:52proposed amended budget a unique process and a unique year.

1:31:00So the proposed budget document.

1:31:04Last week we shared with the city council

1:31:07and with the Financial Advisory Board

1:31:09our first draft of the budget document

1:31:12and I want to emphasize that the first draft

1:31:16part of my statement.

1:31:18We are still diligently working on the next draft which

1:31:20will have include the appendices more information

1:31:24fixed typos that several of you have

1:31:27already pointed out to you.

1:31:28Thank you very much.

1:31:30Any information that we need to correct

1:31:32and we have an eye toward having that

1:31:33ready within the next couple of weeks.

1:31:36But we do have what is OK with you

1:31:39and what we shared online with prevent.

1:31:42But the packet is the first cut of the budget documents.

1:31:47And just to recap, we've been discussing

1:31:49the city's financial position since last year.

1:31:52We've had an item on the city budget

1:31:54at every city council meeting in 2020.

1:31:58We had a town hall meeting in February

1:32:00where we made budget reductions at the mid-year budget.

1:32:03That same same month of February.

1:32:06Then on March 13 2020 we declared our local emergency

1:32:11with respect to the public health crisis for COVID 19,

1:32:14which is still ongoing.

1:32:16The feldspar are placed into effect and to a large degree

1:32:19is still in effect.

1:32:20So this had a further hit to our financial position

1:32:23and we took further action, including

1:32:25hiring freeze furloughs and additional budget reductions.

1:32:29The previous fiscal year the city council

1:32:32directed his staff to prepare a one year budget

1:32:35and we presented a preliminary budget, which was adopted

1:32:38by the city council in June with the intent

1:32:41of delaying the production of the budget document until now.

1:32:44The first quarter of the fiscal year the idea and the intent

1:32:49was that we were hoping by now we

1:32:51would have more clarity on our revenues and expenditures.

1:32:55And unfortunately, because the pandemic

1:32:57has continued to impact the economy that has not occurred.

1:33:01But we are still moving forward.

1:33:03So then this budget document really

1:33:05truly is a snapshot in time.

1:33:09At this point, more than ever.

1:33:10This is a continued work in progress.

1:33:13One of the biggest challenges and I've

1:33:15pointed this out before but this is normally

1:33:18a six month process that begins in the beginning

1:33:22of the calendar year.

1:33:23The budget the department would make their budget requests

1:33:26based on their strategic goals and objectives

1:33:29and then we would add that all up to create the fund totals

1:33:32that would be presented to the city council

1:33:34as our yearly work plan.

1:33:36But this year we adopted the total first

1:33:40and we had to work backwards from there

1:33:42on down into the fine detail line

1:33:44item budgets, which is proven to be very challenging

1:33:48and making sure that our financial system was

1:33:51able to be populated correctly.

1:33:53So there has been a big challenge

1:33:55to particularly our finance team who

1:33:58has had to be working diligently within the financial system

1:34:01software and further we've been working on the budget

1:34:05continuously and we've been bringing this to all

1:34:08to the council and every meeting we did

1:34:11put this document together again.

1:34:13It usually takes five or six months.

1:34:15And we've put it together in less than half that time.

1:34:17So it's been a unique year with unique challenges for roll

1:34:21with the punches as.

1:34:26So while we had intended to update the strategic plans here

1:34:31as we've discussed before we shift

1:34:33our focus to dealing with our financial position and this

1:34:36was pretty comfort.

1:34:38So what that included was shifting the scope that we

1:34:40worked with our consultant team management

1:34:42partners with the assets instead on developing

1:34:46a fiscal response plan.

1:34:47So we hope to complete updating the strategic plan

1:34:50at some point once endemic crisis subsides

1:34:54but until then our current strategic plan is still

1:34:57relevant in our in particular our focus

1:35:00on the strategic goal of achieving long term

1:35:02fiscal financial sustainability.

1:35:05So in my budget message this year

1:35:06I've emphasized that our focus is that we must rebuild

1:35:10our general fund reserve.

1:35:11And just as we were discussing in the prior agenda item

1:35:14there's a whole there's a whole host of factors that have been

1:35:20impacting us in our budget because we have depleted

1:35:22our efforts we can achieve any of our mission

1:35:27or honor any of our values or achieve

1:35:30any of our strategic goals.

1:35:31If we don't have the financial sustainability

1:35:34to provide the services that competes so this has to be

1:35:38our top priority this year.

1:35:40We have incorporated the elements of the fiscal response

1:35:42plan in the budget and in the document,

1:35:45but this alone is not enough.

1:35:46We must maintain these budget strategies

1:35:48for the next few fiscal years.

1:35:51We must be diligent about not adding services not increasing

1:35:55staffing that would negatively impact

1:35:57the general fund reserve.

1:35:58And I'll talk about staffing in a little bit

1:36:01but we are also in a very volatile and uncertain economy

1:36:04right now and for the foreseeable future,

1:36:06we're in a recession.

1:36:08So we are and we will be constantly monitoring

1:36:10our financial position to ensure we continue on the right track.

1:36:14And this will require fiscal discipline from all of us

1:36:17the staff the city council and the community.

1:36:20We know this means that service levels may be impacted.

1:36:23We know this is already having an impact on our employee team.

1:36:27But we have to stay the course so that we can emerge out

1:36:29of this and build back our reserves to appropriate levels

1:36:32and beyond.

1:36:37So this is how we got here.

1:36:38And this is also a recap of the presentation

1:36:42that we gave on September 1st just as a kind of reminder.

1:36:47It bears repeating that the city council and the city staff

1:36:50have diligently been working through this unique budget

1:36:52process since January of this year.

1:36:54So what we presented to you beginning in February

1:36:58was our baseline budget.

1:37:00And so that assumes what we assumed

1:37:02is the 1920 budget with an increase of about 3% 3% to 5%

1:37:08which would have been projected as you see there about 42.7

1:37:11million in general fund revenues of 42.6 million

1:37:15in general fund expenditures.

1:37:16That is if everything had gone forward

1:37:19with the cost of living adjustments

1:37:21and increases as expected.

1:37:22So that was the baseline that we were cutting that we needed

1:37:25to cut from based on our financial position

1:37:29and then COVID 19 happened.

1:37:32We then presented you budget reductions of about $2 million

1:37:36to which was the original direction for the city council.

1:37:41But once we added furloughs as well as the deferrals of cost

1:37:47of living adjustments for every single bargaining unit

1:37:50we gave reductions of about four million

1:37:52from that baseline budget to all of you, which was then which

1:37:57is what was incorporated into the total

1:38:00that you've adopted in June.

1:38:03So again you directed us to prepare this one year

1:38:06proposed budget, which was adopted in on June 16th.

1:38:10That was the spending authority so that we could move

1:38:12forward per our municipal code and poor state

1:38:15law with the gun limit.

1:38:17So now what we are proposing to you as a general fund budget

1:38:20of 39.3 million dollars in revenues and 38.7 million

1:38:25in expenses for one.

1:38:26So you see that decrease from the original baseline budget

1:38:29that we're proposing to you in these amendments.

1:38:34So all funds combined and we'll talk about

1:38:37all funds in a moment as well.

1:38:38The proposed fiscal year 2021 budget

1:38:41recommends total expenditures of 53.2 million

1:38:45and provides funding from all for all city services.

1:38:48So also at the September 1 meeting

1:38:51you heard all of the department directors detailing

1:38:55their own work plans for this year

1:38:56and there the budget impacts on their departments.

1:39:01But they're here on the calls.

1:39:04Should you have any questions from the OK.

1:39:11So this chart again, you've seen this chart before this chart

1:39:15shows the budget strategies in the fiscal response plan

1:39:18that staff was directed by the city council

1:39:20to incorporate into the budget which we have done

1:39:23the council determined the strategies were 1.5 million

1:39:26in structural reductions.

1:39:28So this is based on the recommendations

1:39:31by management partners that take into account

1:39:33the pandemic induced section with an eye toward restoring

1:39:37our reserves to a positive level by fiscal year 2023

1:39:41and then bringing us higher to a reserve level of 17%

1:39:45by fiscal year 2020.

1:39:48And it also bears repeating that these

1:39:50are structural savings and the majority of which

1:39:52is related to personnel.

1:39:54The personnel reductions will be effective on January

1:39:56in January 2021.

1:40:02So this is also a review from the September 1 meeting.

1:40:05These details were provided to you.

1:40:08Do you want to make a note that you know

1:40:10a lot of what we are facing is still

1:40:13volatile and still uncertain.

1:40:16And so these assumptions are continuing and ongoing.

1:40:21Again we've reduced we are expecting

1:40:23reduced programs and services throughout the recreation

1:40:26department.

1:40:26We're really hopeful and we're trying

1:40:28to I have to give a shout out to Chris Jones

1:40:31and his team have been trying diligently and really

1:40:35creatively to work within the county health order

1:40:38and try to come up with creative programs for people

1:40:42and trying to come up with a way that we can still provide

1:40:45those services and not lose too much revenue

1:40:48but that's still just it remains to be seen.

1:40:52So throughout 2020 at least we are expecting this

1:40:55to be reduced and we will be keeping the midtown activity

1:40:58center closed, at least through the end of this fiscal

1:41:00or at the end of this calendar year.

1:41:03That include elimination of three full time positions

1:41:06and two part time positions in city

1:41:09management and recreation departments.

1:41:12We are considering filling vacant positions

1:41:14in committee development to it.

1:41:16We have unfortunately had some people on medical leave.

1:41:21We have had.

1:41:22We have.

1:41:22We expect someone to go on medical leave

1:41:24at the end of the year or family leave.

1:41:26I'm sorry at the end of the year.

1:41:28And we've had a vacant position and so

1:41:31we are looking at our increased temp costs Cerner creased

1:41:36contract costs versus temporary staff versus trying

1:41:41to fill those positions.

1:41:42So that is something that we're actually

1:41:43going to look we're looking at within the next month or two

1:41:47actually make a decision on that production over time

1:41:51from the fire department.

1:41:52And I wanted to point out that this is one of the items that

1:41:56was noted by the state auditor and we they were wanted

1:42:01us to do a deeper analysis of staff's salary savings

1:42:06over time.

1:42:07The chief is on is on the call as you heard from him earlier.

1:42:12So we also see if you have questions on this

1:42:15but what what I'm showing there are our numbers

1:42:19that our staff put together.

1:42:21So the cost of an overtime shift averages about $1,750 a day.

1:42:27And the cost of hiring three firefighters.

1:42:31And again this is assuming we're making assumptions on entry

1:42:35level and whatever their benefit range ends up

1:42:39being based on the people who are actually hired we're

1:42:42looking at about $400,000 at a minimum

1:42:46but what we're expecting is that firing those three firefighters

1:42:51will eliminate at least were an estimated 325

1:42:55overtime shifts which as you can see is about $568,000.

1:43:00And so right away we're looking at about 100.

1:43:04I'm going to just say $150,000 savings

1:43:07between the salaries, the salaries and overtime

1:43:09just at that level.

1:43:12That would be starting essentially

1:43:13for the full fiscal year.

1:43:15I mean, this also depends on once those firefighters get

1:43:18hired and when they start to be able to reduce

1:43:20the overtime that are better.

1:43:25Threw out the full department but what we will be doing

1:43:29is we are again looking tan to fill these positions actually

1:43:33sooner rather than later if we can but certainly

1:43:35by the end of the calendar year we are

1:43:39in the process of looking at exact costs

1:43:41so we can have I know that we wanted to have

1:43:45an analysis that we did want to share with the state auditor

1:43:48once they ask for it because I do

1:43:50expect that they will come to us at some point

1:43:53but we'll also be including that information in the budget

1:43:56and we will also be sharing this information

1:43:58with that next careless.

1:44:01Let's take a minute to discuss this

1:44:02because this is obviously a good calculation that we've

1:44:07been asking for weeks.

1:44:10And I just want to go back four years or five years.

1:44:15The overtime shifts the aggregate cost of the oversight

1:44:17time shift would have been less and the therefore the cost

1:44:23of the overtime shifts would have been less

1:44:26and the cost of firefighters would have been slightly higher

1:44:29as a result of pre pepper.

1:44:32So you know certainly in a pre pepper analysis

1:44:36that this analysis would be the other way around,

1:44:39where the cost of the three firefighters

1:44:40with their benefits would potentially exceed the overtime

1:44:45and some time in the last five years

1:44:48the equation would change.

1:44:50And that's what we're reflecting now

1:44:52is that the equation changes as the cost of the person doing

1:44:57the overtime has ended up being senior people

1:45:00more often than not.

1:45:01So our actual costs of filling the shifts with

1:45:04was higher than what potentially we anticipated.

1:45:07And as a result of pepper the cost of the three firefighters

1:45:12has gone down because their benefits

1:45:15have gone down so their pension benefits have gone down.

1:45:18So I know I've summarized it potentially too quickly

1:45:23but that's my understanding of what we used

1:45:26to have as an equation that does not necessarily compute

1:45:30and that's what the auditor was essentially picking out

1:45:34was that the historical analysis was not needed some dusting off

1:45:39with actual data about who was filling the overtime

1:45:43and what the pepper costs would be

1:45:47you know what the cost of the three firefighters are.

1:45:50Gabe go ahead.

1:45:51Thank you for mentioning that.

1:45:53I want people to know I want our residents

1:45:56to know how important it is to have staff

1:45:59either firefighters or staff.

1:46:02So looking at our fire season in a wildfire season and the city

1:46:09the majority of the city is in a high fire danger No.

1:46:13The importance of making sure that we cover these shifts.

1:46:19I appreciate the care and making sure that

1:46:23and I'm there making sure important stuff.

1:46:26And I did get an email from a relative

1:46:28as I'm service You got it Let's see about this

1:46:30about the importance and we see California

1:46:33up in smoke just to the south of us and just to the east of us.

1:46:38And to the north of us sent to the west of us

1:46:41in Warren county.

1:46:42So I know how important it is.

1:46:46But I also know the importance of saving

1:46:48lives and saving property.

1:46:50And so this was one of our fire and police.

1:46:54And you know when and we're not going to tell looking at how

1:47:01many fires that we have now.

1:47:03And it's not even we're just at the beginning of the season.

1:47:08So we are going to see costs and overtime higher.

1:47:14So looking at the cost of the 30 firefighters new firefighters

1:47:19we will be able to save money hiring new firefighters who

1:47:25don't have the seniority and and the benefits

1:47:29that are our senior firefighters have Thank you.

1:47:33Mayor Thank you.

1:47:35I mean I I certainly want to reiterate the numbers

1:47:40that the chief gave us at the beginning of the meeting

1:47:42that we've had 8,000 hours of our firefighters

1:47:48working on state wide fires these extra firefighters it

1:47:55could be because it's financially because there's

1:47:58this envelope back the envelope calculation shows that it's

1:48:02financially feasible to hire them

1:48:05those extra firefighters will mean less fatigue less wear

1:48:09and tear on our staff more firefighters available for four

1:48:14fighting fires locally as well as regionally in just in my

1:48:19I don't know why my street has fires but some guy in the town

1:48:23has fires in the last month there have been two house

1:48:25fires within a block of me.

1:48:28So certainly we are very we've been staffed properly.

1:48:35We've been able to save these structures

1:48:38to just having kitchen damage.

1:48:40So you know this this additional filling these positions

1:48:45is actually a cost savings and will

1:48:49provide us with the resources to protect

1:48:51our city as well as the state.

1:48:52So I wanted to make sure that we covered this because we've

1:48:57gotten a lot of comments over the last year

1:49:00ever since the audit came out about this

1:49:04and here is our first glimpse of the calculation

1:49:07and I just want to stop and take a moment to look at it.

1:49:11Paul you've Paul is muted and so is Janet.

1:49:13You guys both raised your hands I don't

1:49:15know which first ladies first.

1:49:16Janet OK.

1:49:18And the question I had was on the calculation of the cost

1:49:23of a firefighter versus a so-called seasoned firefighter

1:49:32because I would assume there are something like five pay gaps

1:49:36that they can be paid at.

1:49:39Am I correct.

1:49:40And they can be either before the retirements.

1:49:47They could be the older the new retirement system.

1:49:50You can say those are the variables aren't they.

1:49:53First of all these are the variables.

1:49:55However, what we are expecting to hire are entry level

1:49:59positions about firefighters to be

1:50:02is only an entry level person for what a year know what

1:50:08I mean by that is that what I mean by that is that they would

1:50:11be subject to cap rates so their pension as that

1:50:17is an entry level firefighter.

1:50:19I already mentioned that.

1:50:20Right right.

1:50:21And so I had a question.

1:50:24OK my question has to do not with that will stand up

1:50:29but rather to the part of it that is about being

1:50:33a new firefighter so new firefighter to me

1:50:36means step 1 if they're truly new that in year two

1:50:42or whenever they will be not a entry level step one,

1:50:47they will become step two and pretty soon

1:50:49they'll make their way up to step

1:50:51five unless they get promoted.

1:50:54Am I correct first.

1:50:55That is correct.

1:50:56And that is what this calculation in calculation

1:51:00needs to say something other than step 1 is cheaper.

1:51:04No right.

1:51:06You're absolutely correct.

1:51:07And no this calculation I'm sorry.

1:51:11We start over.

1:51:12This calculation assumes that someone starts in an entry

1:51:16level position and would receive their first step

1:51:18increase in this fiscal year.

1:51:20This is the cost of a firefighter at the beginning

1:51:24of their career.

1:51:25So yes, it will continue to increase over time

1:51:28when they get raises and all of that stuff

1:51:30in their step increases.

1:51:31But this is the initial cost that we're assuming

1:51:35for this fiscal year to bring these three firefighters on OK

1:51:40but in year two it will increase.

1:51:43Correct it'll change in the year 3 it'll change in new year

1:51:47for it'll change and in year five it'll change.

1:51:49Theoretically probably unless that person gets

1:51:53promoted to the next level.

1:51:56Yes is it being an engineer.

1:52:00So it would seem to me that changing doing a change

1:52:07in the system so that you have one year of really cheap

1:52:11and then you start losing that year isn't getting too far.

1:52:17Because then eventually you're all

1:52:18the way back up to where you were anyway

1:52:22that is true to what we do.

1:52:26But we do expect is that as the attrition will continue to roll

1:52:32along as these firefighters continue along in their careers

1:52:36then we will have some retirements

1:52:38and then they'll be replaced.

1:52:39So this is all part of making sure

1:52:41that what we're trying to do with this

1:52:43is really a short term look at it.

1:52:48We've looked at short term versus long term

1:52:50I mean long term we are hiring these people

1:52:52and we're taking on all of their benefits and their pension.

1:52:54That's a long term cost that will continue.

1:52:57Absolutely right.

1:52:58The short term effect is that we will cut our overtime pass

1:53:03immediately and that once we keep

1:53:06those positions filled the overtime

1:53:08should stay at that same level.

1:53:11So once these it's true these people will go through

1:53:14and they will get they'll get promoted they'll get more money

1:53:16but then the people who are older now

1:53:19and a few years will retire and will.

1:53:22The idea is that we will keep these positions filled so

1:53:24that the old timers right the older people retiring

1:53:29will happen regardless.

1:53:31Exactly it's not a function of either retaining or not

1:53:39retaining but not.

1:53:41It's not a function of whether or not you hire new people.

1:53:44The older people are going to be retiring at some point.

1:53:48Exactly as they age out in the system.

1:53:49So the variable is actually it would seem to me

1:53:56the their variable and I say because the new people floating

1:54:03through their system will occur regardless of what

1:54:08you do and the new people are going to float out of step 1

1:54:15maybe in a year or so.

1:54:18So it's not a permanent solution.

1:54:25It's a temporary solution but it helps for one year in year 2.

1:54:31You don't get the same benefit assuming they get it.

1:54:36I'm assuming that they get a raise every year.

1:54:39Yes yes.

1:54:41The I. And that is true.

1:54:43That is the long term cost that we will have

1:54:46with bringing on new people.

1:54:48That's absolutely.

1:54:49And then how much does it cost to hire somebody the $400,000

1:54:54assumes the cost of hiring everybody.

1:54:58There's we have to outfit them.

1:55:00We have to bring that we have to train them.

1:55:02All of that that's all included.

1:55:04It's one of the thousands of trained for the 3 firefighters

1:55:09and Mike I think it's cheap if you're on you

1:55:11can correct me if I'm wrong.

1:55:13Or is this just salaries hi.

1:55:17The 400,000 is basically the salaries

1:55:21and it also includes the first step increase

1:55:25that the firefighters get in after their six

1:55:28months of being here.

1:55:29So it's pretty much an.

1:55:32And it's also based on what a full year would cost obviously

1:55:38since we're in the hiring process right

1:55:40now it's not going to be a full year cost outfit are to outfit

1:55:45the three firefighters with their protective equipment

1:55:49and with the training that's involved

1:55:52during their first couple of months

1:55:54is going for the 3M is going to run about $50,000.

1:55:58That's a one time cost and that actually is figured in to

1:56:03not into the labor side of it but into the rest

1:56:08of our budget for this year.

1:56:11You know the turnout's alone there

1:56:13they're protective let alone it per person

1:56:18is a little over $10,000 for both their

1:56:22structural and wildland gear.

1:56:24So you know it's an expensive little deal.

1:56:27We have to do any academy training

1:56:32we do we do in-house training.

1:56:35I mean we require we set the bar higher.

1:56:38We're not bringing in.

1:56:40I know Karen talked about it being entry level it's entry

1:56:42level as far as our pay is concerned our requirements are

1:56:47that they are that they borrowed through an academy

1:56:50that they already are certified to the state

1:56:53level of firefighter 1 and that they depending on which one

1:56:58we're hiring that they're either already a certified paramedic

1:57:02or licensed paramedic or that they are an EMT

1:57:06that they've been certified in that.

1:57:08And so we've trained them and we put them

1:57:10through a fairly extensive training on the El Sarita

1:57:15way of doing things but we already

1:57:18expect that we're already looking at people that have

1:57:20experienced these are not just right out of school candidates

1:57:26that we're doing because that's what it takes for us

1:57:29to save to save costs as opposed to putting

1:57:32them through an academy.

1:57:35Just real quick and I will try to keep

1:57:37this really quick because we have talked about sending

1:57:39people to an academy an academy as a team is 18 weeks long

1:57:44and so by the time you get everything done you know we're

1:57:47going to be talking five months academy alone depending where

1:57:51we go is about between 15 and 18 $1,000 plus 5 months of salary

1:57:57because we do have to pay him for that.

1:58:01And so that money on top of the protective equipment

1:58:06is what the city is.

1:58:07It would be out for one person and that's to take

1:58:11somebody fresh out of school.

1:58:14And then there's no guarantee they're

1:58:15going to work out for us that they're

1:58:17going to pass probation.

1:58:18So we're looking for people that have experience

1:58:21you know that are in the fire service or in the medical field

1:58:25and you know and we can basically

1:58:28do the rest of the training to get them

1:58:29to the next level, which is the state certification

1:58:33of firefighter to change this.

1:58:36So this is Greg Lyman.

1:58:38Yes if this 5% steps like this the difference

1:58:44means to a one and step two is a 5% increase.

1:58:47Matt that is correct.

1:58:49So if we had five steps these three firefighters

1:58:52would be just over 500,000.

1:58:55And the overtime would potentially

1:58:58be more as a result of their base they being more

1:59:00but in essence even if all the three firefighters were

1:59:04its top five, it would be $5,000 or $10,000

1:59:07in salary versus the estimated overtime of 568.

1:59:10So even if even if they were even

1:59:13if you ran this calculation out multiple years

1:59:16it would still work.

1:59:17What's our what's our attrition on an annual basis

1:59:20what's your turnover.

1:59:22It varies.

1:59:23You know we are looking in this fiscal year we're looking

1:59:27at one retirement right now.

1:59:30And then going down probably the next retirements

1:59:35are going to be about two years, maybe

1:59:37three years from now we're looking at two or three more.

1:59:41You know we have.

1:59:42I mean as you are well aware on the last two

1:59:45or three years we've had a number of retirements.

1:59:48So we have a fairly we have a fairly young crew right now.

1:59:55I especially considering that the majority.

1:59:58Well, I think what we're up to 12 now in the pepper program.

2:00:01You know retirement for that is at 57 as opposed to 50.

2:00:06So they're going to have to work longer.

2:00:10But you know aside from the one that we're looking at now

2:00:13and planning on which is in a management position

2:00:17that we're planning on doing a little rearranging there

2:00:20for cost savings temporarily.

2:00:23As far as line personnel are concerned

2:00:26know I'm looking probably two years before we're

2:00:29looking at a retirement.

2:00:30Card go ahead question.

2:00:37And along the way it just real quick on the step

2:00:42increase mayor.

2:00:44As I said before the first they get their first step increase

2:00:466 six months into their 18 month probation

2:00:49from that point to make top stamp it'll

2:00:53be another three years before they make top simpler

2:00:56or firefighter paramedic.

2:00:59So it's 4 and 1/2 years into their employment

2:01:03here before they hit the top steps.

2:01:07And yes their wages do go up.

2:01:09But keep in mind you say is it better.

2:01:12And we do closer union negotiated raises everybody's

2:01:16wages will eventually go up.

2:01:22Paul and then Gabe.

2:01:25Yeah I'm I'm I'm sure there are details

2:01:27that need to be worked out.

2:01:29But to put into context of a horrific fire

2:01:31year with our residents having been fined or wary

2:01:36and reading the news I think this is a great direction.

2:01:40And especially with the city where

2:01:42overtime has been a problem.

2:01:44We're trying to move in directions that will not

2:01:46only give us three more firefighters

2:01:48but reduce our budget costs.

2:01:50And this assumes keeping station 72

2:01:54unlike what some people might want and don't close it often.

2:01:58So we need to know that our city will be protected.

2:02:01It's a direction we can do we will work out the problems.

2:02:05But I'm saying this as a positive direction

2:02:07and it puts me a little.

2:02:08Lets me sleep a little bit better at night.

2:02:11Thank you chief.

2:02:12Yeah Gabe and Rachelle thank you.

2:02:16I want to let everyone know that the next six years are going

2:02:21to be difficult because baby boomers are retiring

2:02:24and now and again it was our past president John Chubb who

2:02:31spoke in our out about the difficulty cities

2:02:35are going to have.

2:02:36And unfortunately, the city never prepared for it.

2:02:40But knowing that we have a lot that we need to work on

2:02:45in the future, especially with our baby boomers

2:02:48retiring someday.

2:02:50We will pay for all of that.

2:02:52But we need to make sure that we're prepared for this

2:02:58and that we set money aside in the future.

2:03:01Every city in the county has done it

2:03:04except for ours and Baraka and possibly Richmond.

2:03:08So while we need to play catch up and we will do that.

2:03:11So what do smart folks know we were never prepared to do this

2:03:15even though we were warned.

2:03:20Rochelle yes a question about the fire and the budget,

2:03:30which is on page 87.

2:03:36It is a fire department position listings.

2:03:42And I see that it's been a consistent 37 across the board,

2:03:49including for 2021.

2:03:53And I was just wondering is that 37 that number 37 is

2:03:56that now going to be including the new three

2:04:01positions totaling 37.

2:04:04Are we going up to 40.

2:04:05No 30 37 is what has always been budgeted for.

2:04:11If you remember that.

2:04:12And the city manager talked about it earlier

2:04:15is we used to budget for all the positions

2:04:19and then because we had the three vacancies we always

2:04:22had that little credit at the end

2:04:24that we called salary savings.

2:04:26So 37 has always been our number which is on the normal budget

2:04:33it is 10 firefighters or firefighter engineer

2:04:36captains per shift times 3.

2:04:38So there's I'm sorry.

2:04:40Well Yeah.

2:04:41Times 10 which is 30 and then you have the one fire

2:04:47prevention officer which is 31 and the four battalion chiefs

2:04:53makes you 35.

2:04:55Myself and the admin at the executive administrative

2:04:58assistant brings you up to 37.

2:05:04Does that mean you will now have 43 more.

2:05:09The three vacancies were part of the 37 approved.

2:05:13That was part of the 30 that you spoke about.

2:05:15OK we budgeted for it but then we always put a credit

2:05:18in the pay the last line item on the payroll on the salary

2:05:24section of the budget.

2:05:26There was always a credit for the three positions.

2:05:29OK so now it says 37.

2:05:31And then when you're hired we will actually be at 37.

2:05:35Correct OK.

2:05:37Thank you.

2:05:37That answers my question and I will think about it

2:05:43about something as well.

2:05:51So if there are no more questions for keep it going.

2:05:55Thank you chief.

2:05:57He's here in case we have any further questions

2:06:00or we have questions later.

2:06:03But I did.

2:06:03I just I thank you.

2:06:06Mayor for taking a pause there.

2:06:08I think that you're absolutely right.

2:06:10I mean this is something that in the past

2:06:13we had we when it came to prior to pepper.

2:06:17And when it came to all of the various all of the variables

2:06:21that we had at that time that salary savings

2:06:24was a much greater number.

2:06:25And it made more sense at the time.

2:06:28But you're absolutely right as well these past couple of years

2:06:31with the fires that we've seen and the crews that we've been

2:06:34able to site that out and the increased and heightened

2:06:38awareness and making sure that we are fully staffed

2:06:43this takes a lot more sense.

2:06:45And so I'm grateful to the council for being able being

2:06:48supportive of this and I'm grateful to the chief

2:06:51for working with us on this.

2:06:54And we're looking forward to those positions for a number

2:06:59of reasons, not just to save money continuing on

2:07:04with this last slide just to also We had we last week

2:07:09or I'm sorry last council meeting when Keith had

2:07:13discussed in detail their department

2:07:16and what is happening with their department

2:07:18and what they've been looking to.

2:07:20We are going to continue to discuss that

2:07:22and we will be providing an update on the police department

2:07:28and their annual their annual report

2:07:31at the October 22 city council meeting.

2:07:36And again, just that last bullet there

2:07:38is that all of these personnel reductions and savings

2:07:40are budgeted as to be effective as of January 1st.

2:07:51All right.

2:07:52And this is just a snapshot of the city organization again,

2:07:55this is in the budget document as well.

2:07:58This is the same as previous years

2:08:00we have not made any structural changes as far as department

2:08:07and staffing and this actually reflects just what

2:08:10we were talking about with respect to the fire department

2:08:14when it comes to vacant positions.

2:08:16So this table shows the number of authorized full time

2:08:20positions in the budget and the number of vacant positions

2:08:24that are assumed in the budget.

2:08:25So the staffing reductions that we've

2:08:28had as a result of the fiscal response plan

2:08:30are noted in the column that says 21 authorize the positions

2:08:34that will be left vacant at this point in time

2:08:36is the vacant column.

2:08:38Again if there are additional retirements or resignations

2:08:41at this time we're going to evaluate

2:08:43those and likely likely keep the vacant at least at some point.

2:08:46But we're continuing to evaluate again if other people

2:08:50leave the organization.

2:08:52But just as we described before I

2:08:54want to note that the vacancy shown are included

2:08:56in this year's budget and these are vacancies that you see,

2:09:00particularly in community development

2:09:02and in the police department.

2:09:03Those vacancies have been in place already.

2:09:06They haven't been filled in the past few fiscal years.

2:09:08But as the chief pointed out what we used to do

2:09:11is we had a line item that was a credit for salary savings

2:09:14within each budget so that the overall budget

2:09:18would show the authorized positions

2:09:21minus the vacant positions.

2:09:23And this year instead the budget reflects

2:09:27the vacant positions we have taken out the salary

2:09:29savings line item.

2:09:31So this is the budget reflects the funding for 169 full time

2:09:36positions so that is a shift that we are making sure

2:09:40that we include in the budget document this year

2:09:47so moving on to city wide revenues

2:09:53and at this point I'd like to ask

2:09:55Mark to jump in and help me discuss

2:09:57the next several slides.

2:09:59So kicking it off.

2:10:00These are the falls.

2:10:01This is the full city wide revenue

2:10:03picture including all funds.

2:10:06So we've been focusing a lot on over the past several months

2:10:09on the general fund because that is our biggest fund.

2:10:12That's our least restricted fund and

2:10:14that's the fund that the vast majority of our budget

2:10:18comes from.

2:10:19Or it can be spent we can spend it on anything as opposed

2:10:23to several special funds, which are restricted in what they can

2:10:27be what they can be funded on.

2:10:29So our city wide budget is 52.8 million dollars.

2:10:34It is actually much more than the general fund

2:10:36and it actually helps provide a lot of the services

2:10:39that we depend on particularly when

2:10:41it comes to things like our cycling center

2:10:44our storm drains are our streets and roads

2:10:47and the projects associated with those.

2:10:51So mark if you'd like to jump in and talk a little bit

2:10:53about some of these assumptions you've been looking at

2:11:04is approximately 80% of what you have in front of you here.

2:11:10Right so general fund is 38 39 million dollars

2:11:13and these 52 plus 52 million or so 80%

2:11:16so it's not surprising that some of these line items

2:11:19that you see up there for revenues

2:11:22I exactly what's in the general fund property taxes.

2:11:25And so on because some of these other funds

2:11:28don't attract property taxes or for that matter a franchise tax

2:11:32so it's almost entirely general fund business license

2:11:35taxes intelligent fund.

2:11:37And so on fines and forfeitures and dollar general sign.

2:11:41So that is a little bit of a little happens

2:11:43on the other areas.

2:11:44But by and large 80% of this budget

2:11:49is here is us overshadowed by the general fund.

2:11:55And I'll be happy to take any questions on that.

2:11:58It's just that we have a whole bunch

2:12:00of other funds in our budget book

2:12:02in addition to the general fund.

2:12:03We have a measure to fund measure h funds.

2:12:07We have Measure J. Funds gas tax funds and so on.

2:12:12And they'll all get rolled up in these

2:12:14in some of the subsequent slides to show you

2:12:16how they add up to the numbers 52 million 837,251

2:12:23at the bottom right hand corner of that little chart

2:12:27that we have in front of us.

2:12:28So this is just the highest possible summarized level

2:12:32of revenues across all sources for the city.

2:12:36So mark dismissed Greg we're hoping that you can take,

2:12:39this is the first slide where inter fund transfer shows up

2:12:42and I was hoping that you could take

2:12:44a minute to describe in our fund transfers

2:12:47on some of your charts.

2:12:48You actually have totals before transfers

2:12:52the total before transfer would be 50 million

2:12:54300,000 roughly 50.3 million and that actually represents

2:13:00the amount of income will get there

2:13:02is fund inter fund transfers is not necessarily new revenue.

2:13:08And so I just was hoping that you could help explain

2:13:12what an entire fund transfer is and why we added into that 52.8

2:13:17number and not focus on the pre transfer

2:13:22number of 50 million 0.3.

2:13:25Right so part of that is on transfers

2:13:28essentially come out of cost allocation

2:13:32as we call that which is we the general fund supports a number

2:13:36of these funds with overhead support and management support

2:13:41and so on.

2:13:42So overhead costs are allocated to some

2:13:45of these other funds that have their own dedicated revenue

2:13:48sources.

2:13:49So that's one of the ways of recouping for the general fund

2:13:53some of the expenses of general funding cause for on behalf

2:13:57of some of those of the fund.

2:13:58So male Ivan was right.

2:14:00It's not a new source of revenue it is revenue that comes

2:14:04in through the channels from other dedicated sources that

2:14:08are now being captured here as cost

2:14:12recovery for the general fund.

2:14:14So to that extent repeat that as you know fund transfers.

2:14:17And so for example the capital projects fund

2:14:20build have enough fund transfers as the gas tax fund of data

2:14:25database management fund.

2:14:27And so on.

2:14:28So for example even have a risk management fund

2:14:31has its own revenue source.

2:14:32But the general fund supports it up

2:14:35to senior management services city clerk services finance

2:14:38services, legal services that are paid

2:14:41for by the general fund on point and on behalf

2:14:45of the base management fund.

2:14:47So at the end of the fiscal year we figure

2:14:49out exactly how much that is.

2:14:51And we make an estimate.

2:14:52And that has grown over the year from approximately $350,000

2:14:56each year.

2:14:57And inflated by chief percent inflation

2:15:00and that's what the integrated base management fund

2:15:03sends back to the general fund.

2:15:05Having in those revenue sources from its fees and other beings

2:15:09that it levies on.

2:15:11That pretty good program that we offer.

2:15:13So that's just.

2:15:14It's just a support and a cost recovery effort.

2:15:18To be clear for example that dollar that's

2:15:21coming into the integrated waste management fund

2:15:23is probably coming in through franchise

2:15:26taxes or one or the other like charges for services.

2:15:31For example.

2:15:32And then when it goes from the fund to where it was

2:15:37where it came into the city.

2:15:38The integrated waste management fund

2:15:40due to the general fund to pay for a jar pay for city

2:15:44management oversight it.

2:15:48You have to account for it moving from one source

2:15:52or fund source to another.

2:15:55And that's the interphone transfer.

2:15:56But it doesn't become new revenue

2:15:59so that the real revenue to the city is 50.3 million question.

2:16:13No no.

2:16:15I mean, I'm hoping that the other.

2:16:16Yes because I will tell you, the first five years

2:16:21I was on the council that the fund transfers get me hiccups

2:16:24and it took me a long time to realize that we do have

2:16:26to account for them we do report them we

2:16:29report them both as an expenditure and as a revenue.

2:16:32But it's essentially just accounting for the movement

2:16:35of money to pay for the overhead associated with cost

2:16:40recovery of providing services.

2:16:43I see Janet's hand is up.

2:16:45Yeah and I think you'll be second.

2:16:48My hand was up has been up for a long time but the.

2:16:53So it goes back to a different item

2:16:55and so I'll just ask the general question

2:16:58about where are we here.

2:17:00And are we supposed to be asking questions along the way.

2:17:03I know at this point we are but in the beginning,

2:17:06we didn't and I had some had a question

2:17:07about that something earlier when should I

2:17:10ask a Karen how do you want to.

2:17:15I mean we are addressing comments as we go.

2:17:18I mean that to me that's always proven

2:17:20to be more successful because we're it's fresh in our minds.

2:17:23But would you prefer it to.

2:17:26I would want your presentation.

2:17:27Ask him then I can sort of put it to rest OK.

2:17:33Pardon absolutely.

2:17:35OK and it was it was back under I don't know which category

2:17:39but it was.

2:17:40My question was about the senior center

2:17:43and some of the functions of the senior center

2:17:47and the particular one I was thinking about

2:17:49was para transit.

2:17:51Now I know that parent transit at least in general

2:17:53is not paid out of the general fund

2:17:56is paid out of Measure J. S CTA that it

2:18:06operates an environment.

2:18:07It takes people to for example the lunchtime program

2:18:10or it did.

2:18:12And that sort of thing.

2:18:14And I was wondering in this environment that would exist

2:18:19after January 1st of next year.

2:18:23What would happen there.

2:18:27Thank you.

2:18:28Thank you Phoebe I'm sorry what do you mean as far

2:18:31as continued service is Yeah.

2:18:35Or what would it look like.

2:18:36Yeah we.

2:18:37So what we're expecting is that those services have been

2:18:41continuing and at this point we don't it's

2:18:45where we're just that we expect the status quo because we have

2:18:49not learned anything different.

2:18:52The only thing that we're really work that we're really making

2:18:56a you know that we're firming up is that the actual center is

2:19:01going to remain closed but the services that we're currently

2:19:04providing including like you said

2:19:06the lunches and the para transit which

2:19:08are art which are continuing.

2:19:11We expect those to continue.

2:19:12It's just that the actual center right now is not open.

2:19:17So thing I haven't seen described anywhere

2:19:20is what are we doing right now.

2:19:24I know that I've run into some of the things

2:19:26that we are doing right now the meals

2:19:29program has changed from the people who

2:19:34eat lunch at the senior center.

2:19:37It's now delivered once a week, I

2:19:39believe that I get that right.

2:19:42And I think grace is on the call and I can have him.

2:19:46I he's still he's available.

2:19:50I can jump in.

2:19:53So that I mean I know the basics but areas like thanks

2:20:01for joining us.

2:20:09I can't see you but I can hear you now.

2:20:11There you are.

2:20:12OK so specifically are you asking specifically

2:20:17at the midtown activity center what's happening in China

2:20:22with some of the programs that I know that in some form

2:20:25or so there and one of them is meals

2:20:29and one of them is parent transit

2:20:30and they interface with each other.

2:20:32I was like maybe that's it and that but that's all I

2:20:37come across.

2:20:38So yeah that's correct.

2:20:39We deliver five meals on Wednesdays we deliver

2:20:44five meals for the week two.

2:20:49It's been as many as a little over 90 different people

2:20:53every week It started off as being seven meals

2:20:56and now it's five meals and that's

2:20:59through the county's program.

2:21:01We also open up so that we can be a pickup

2:21:04and drop off point for meals on wheels on Mondays.

2:21:07But we don't actually operate that program

2:21:10and then we do offer para transit

2:21:12rides and our easy sir easy ride service

2:21:16for essential appointments.

2:21:18So going to like dialysis or the grocery store

2:21:23or things of that nature.

2:21:27A doctor in El Cerrito we don't we're not we

2:21:31don't really operate outside of El Sarita.

2:21:33We'll go to maybe you know 99 ranch or the Albany target

2:21:39or something like that.

2:21:40But basically, it's all appointments with an El Cerrito

2:21:42and east Bay Area transit.

2:21:44As for the more regional appointments

2:21:50so how are people to know this.

2:21:56Well we have been certainly keeping in contact with kind

2:22:02of our typical clientele.

2:22:04Everybody our van drivers as well as our other adult

2:22:11programs and services staff has made

2:22:14has basically called everybody and has

2:22:16makes bonus calls often.

2:22:18And you know some you know need more

2:22:21checking in on than others.

2:22:24And then and all the lunches we generally

2:22:26provide kind of like a newsletter update

2:22:29of things that are going on.

2:22:31For example.

2:22:31Other things that we're offering our connections

2:22:34to fitness classes over Zoom.

2:22:39We actually have a member of our committee on aging

2:22:42that's offering Zoom tutoring to help kind of help seniors

2:22:49get over the digital divide.

2:22:51As long as they can connect to zoom to help

2:22:54them learn how to do that.

2:22:55And then they can participate in a number of other things

2:22:58that are going on virtually right now so so is that.

2:23:06So is the senior center open for that.

2:23:10No the building itself is closed to the public.

2:23:12We only have employees working at it.

2:23:15There is no way to actually it was

2:23:18employees working on it there.

2:23:19I was wondering about so Yeah.

2:23:21So it's being used.

2:23:24Yeah the office is being used.

2:23:25The administrative functions are going on the warrant.

2:23:29The kitchen is being used for the meal program.

2:23:33It's just a warming kitchen.

2:23:34So I mean, essentially, it's being used

2:23:36to store cold and frozen items and to assemble and to assemble

2:23:43the lunches and these are just script written description

2:23:47that's given out to people about all of this

2:23:50Yeah we make regular updates actually in our rec news that

2:23:55came out just today we have a chart of everything that's open

2:24:00open open and modified and everything that's closed

2:24:05is that the quarterly well we have we

2:24:10it's our monthly updated newsletter

2:24:12but we've also included it in the city manager's update,

2:24:16as well as I think it's online or it's going to be this thing

2:24:21year so a document that I've gotten for forever

2:24:27is one for seniors is it going out.

2:24:31Is that going out at all.

2:24:33No we're not mailing out the way we have this the 60

2:24:36plus newsletter, we're that all of our printed publications

2:24:40are on hold right now mainly because there's just not a lot

2:24:45going on.

2:24:45Now the one that you sent out today

2:24:48doesn't include the mailing list for the senior one

2:24:54the senior public and it does for everyone who received that

2:25:01through email, through email.

2:25:06Yeah it's not we're not mailing anything.

2:25:08We're not producing or mailing any written material right now.

2:25:12OK So if you were getting it by in print like I for example

2:25:18I did then I'm not getting it anymore.

2:25:22Correct which is probably corresponds to why

2:25:24I don't know what's happening.

2:25:29Yeah we push things out through whatever means

2:25:33we can certainly.

2:25:34I think at the last council meeting

2:25:36we are last few council meetings we try to give

2:25:41updates on what's happening.

2:25:42And like I said we are certainly as

2:25:44far as it comes to the lunch program

2:25:47and the air transit program.

2:25:49We're physically calling people but yes,

2:25:52there may be some people that weren't a normal customer

2:25:57of ours that don't have access to that information

2:26:04unless they call midtown activity center

2:26:06or they go on a website.

2:26:09And there are some that are physically people there

2:26:12that that's kind of what I was wondering there there

2:26:15but that they're not there to necessarily serve anybody.

2:26:20There's like knocking on the door you know.

2:26:23Can you help me.

2:26:24But they can write all.

2:26:26No but I was wondering more about was

2:26:28how did they do the meal.

2:26:29I know that they do the mail programs so that I couldn't

2:26:32figure out how if the building was closed

2:26:37it's closed to the public.

2:26:38But the staff as well is that it's open for the provision

2:26:42of service yes.

2:26:46OK so anybody who wants information

2:26:50about this senior program needs to do

2:26:53what they give their email address to whom they can call.

2:26:59They can call the botanic TV center

2:27:01or they can email us are the department's

2:27:07email address is recreation at c.I.

2:27:10El dash Serino dot s.a. dot us.

2:27:15I do know that we were having.

2:27:18I'm not quite sure if it's been resolved.

2:27:19We having an issue with the main line at midtown.

2:27:23And so if they call the recreation

2:27:24numbers main line at 5 10 by 7 1,000 we can get them help.

2:27:32OK is that your budget question.

2:27:38I thought that was partly a description

2:27:40of the services being provided.

2:27:42So then the lead.

2:27:44No then the last part it gets back to the main part

2:27:48of the question.

2:27:49So the something like the power transit service

2:27:53won't show up on this report because it's

2:27:56not funded out of here right.

2:27:58Well this this shows off funds and so on apart from funds.

2:28:03But the other part we have we have a charter that we do have

2:28:08a chart that coming up that shows all

2:28:11of the different funds but nobody I mean the but

2:28:17it's in that other fun part the intergovernmental revenues

2:28:23right there the funding for it comes from

2:28:26intergovernmental revenues.

2:28:28Right Well I guess I would ask market that's it's classified

2:28:36but where do you put major j mark.

2:28:43Mark you know where.

2:28:44Yes her transit funds.

2:28:46Yes if I can just jump ahead a couple of slides

2:28:51or a quick peek at that.

2:28:56And one more maybe go.

2:29:00So down here is measured.

2:29:06I can't see it because I have this other dream

2:29:10I ever get rid of.

2:29:12Here we go.

2:29:12OK all right.

2:29:14So Measure G better trends.

2:29:18What am I looking at now.

2:29:20It's not just say we have a chance Measure J returned

2:29:24to stores Measure J could be returned our source now

2:29:32that's about right on that Yeah but the line that sees that.

2:29:37So was driven to tr 84,000 expenditures to 84,000 on back

2:29:44like I say it's a part of total revenues to be combined

2:29:50total of 52.87 million.

2:29:53Actually you know if it is returned

2:29:54to source if it's not one but it's an it'll

2:29:57be somewhere like in one of.

2:29:58So that's OK.

2:29:59So that's the tax where it is.

2:30:01It's not.

2:30:02And I'm just wondering because it just

2:30:04seems like it disappeared it's because I don't see

2:30:09the word pure transit anywhere.

2:30:11Right we have a section in the back of that

2:30:17at the very bottom of that power transit

2:30:21where they don't hear there go.

2:30:24Very Yeah.

2:30:26Yes the last line in this section special

2:30:31funds better transit.

2:30:37Tell me it's major James Harris chances.

2:30:42That was part of my question.

2:30:44OK that's 1 2 1 4 and flooding is described in detail

2:30:51on modifying section 2 1 for us to comment in detail on page 50

2:30:59or Pitt page 50 for Measure J return

2:31:02to source para transit fund 2 1 for example

2:31:05that that is the paratransit fund that's

2:31:11a portion of Measure J OK so now you see right on page 54

2:31:19the number on that line seems a little high

2:31:25actually that because it's the sales tax

2:31:31is expected to be really low.

2:31:37Where are you getting that 150 from that number 150,000

2:31:47at the end.

2:31:48It's the fine balance.

2:31:49So the proposed revenue this year is we're

2:31:52looking at a pair of transit line

2:31:56that is that would be the fund balance at the end of the year.

2:31:58We're expecting we are.

2:32:00We did adjust revenues downward because of the sales tax.

2:32:05So the proposed revenue is 116,000.

2:32:09OK the close expenditures there's 106,000.

2:32:13OK, that's better.

2:32:14Yeah Yeah.

2:32:16Yeah OK.

2:32:17So oh so it's a different proposal.

2:32:21OK so it's a different column.

2:32:23I see.

2:32:23OK so I can.

2:32:26I just wanted to be able to trace it through the path

2:32:30that it takes.

2:32:32And I can do that now.

2:32:34Thank you.

2:32:37Thank you, Karen there mark my.

2:32:40My question is can you explain to residents what

2:32:44unfunded liability is and then through the years

2:32:48all the years that I've been subscribing to the newspaper

2:32:53we've been attacked time and time

2:32:54again because of unfunded liabilities.

2:32:58And again, looking at what has transpired

2:33:01and seeing our budget now it ends up being true.

2:33:06So Karen and mark can you please explain the definition

2:33:11of unfunded liabilities.

2:33:13Thank you I'll take a shot at it.

2:33:18So my unfunded liabilities the cumulative impact to pension

2:33:24costs is related pension costs that

2:33:30have to be funded over time so as to make I'm

2:33:35just a start to keep it simple make pension plan whole so

2:33:41in other words and never leave if they make a required

2:33:45contribution towards pensions.

2:33:47And the actuary takes a look at our census meaning

2:33:50our population of employees and says

2:33:53if you were to make if these folks were to retire tomorrow

2:33:56these the amount of money that you would need to have

2:33:58in total and annual contributions

2:34:03might be insufficient to make that payment possible.

2:34:07So that difference is often referred

2:34:08to as the unfunded liability.

2:34:11And b use a fairly arcane method of establishing that number.

2:34:17It's based on the number of years

2:34:20that people forecast into the future for retirement

2:34:23payments and also a unique track to call the discount rate

2:34:27or interest rate that they use to discount all of it

2:34:29back to the present and the discount rate in some ways

2:34:33is also a measure of the interest

2:34:37rate on the earnings of best sign

2:34:39that they used to make me the down payment Trump.

2:34:41So if the discount rate is small,

2:34:43then the unfunded liability tends to be much higher.

2:34:47Currently the city has an unfunded liability

2:34:50of approximately 60 million across all brands

2:34:54which is 50 miscellaneous and everybody else.

2:34:58That number could be as low as 45 or as high

2:35:02as 85 depending on the discount rate that they use.

2:35:05Again, it's a number that they calculate annually

2:35:07based on the employee profile the age profile

2:35:11the center as they call that and they forecast

2:35:14their retirement timeframe.

2:35:16And then they break that down to what a 20 year or 25 year

2:35:21amortization and that's the unfunded annual unfunded

2:35:24liability for us.

2:35:25I hope that answers the question.

2:35:27If it's infrastructure how does that affect our forecast.

2:35:30Mechanical Bob.

2:35:32Right so be required to contribute towards a pension

2:35:37plan required that the required other normal contribution

2:35:40annually.

2:35:41And then we are also required to contribute towards paying

2:35:45down the unfunded liability.

2:35:47So for example, the annual the monthly payment on the unfunded

2:35:51liability in the current fiscal year is about $260,000

2:35:55a month just on the unfunded alone.

2:35:58And that has nothing to do with the required payment, which is

2:36:01a different number altogether.

2:36:03So these unfunded liability tends to go up based on what

2:36:07we've estimated for the next five years

2:36:09is to go up by about 40,000 per month.

2:36:12So the next animal to pay him on a monthly payment

2:36:15would be 400,000 and then the following year would be 440,000

2:36:19and they would continue to draw this down from us

2:36:21for the next five years.

2:36:23And then that starts tapering off or coming down

2:36:26because that's the profile.

2:36:27They have used to amortize this unfunded liability over time

2:36:31a number of ways to invest this big good bye to a flat payment

2:36:34plan for example by paying something upfront

2:36:37and like a house payment to fixed Spearman

2:36:40he would forever pay the exact same amount every year

2:36:43but that's an option that we have.

2:36:46But my question is I find out from other cities

2:36:51and other mayors and city managers

2:36:53and they've been preparing for this.

2:36:55Has this city prepared for this.

2:36:59So the city budget has been operating on a pay

2:37:02as you go basis.

2:37:04In other words revenues have been

2:37:05used to pay for all costs including retirement costs

2:37:10as well.

2:37:11So that's part of the challenge here because as the retirement

2:37:15costs increase at a faster rate than the revenues

2:37:18that puts the squeeze on the city's budget bottom line.

2:37:21So that's a challenge for us really.

2:37:23As you pointed out several other cities with substantial fund

2:37:27balances have set aside what they call 1 1,

2:37:305 bands and other forms of providing

2:37:33for retirement benefits.

2:37:37So I'm wondering why now.

2:37:39Can you explain to me why also Rita

2:37:42has never prepared for this.

2:37:44While you look at Pleasant Hill San Remo

2:37:47even San Pablo wants to know they're prepared

2:37:51and they have rainy day funds.

2:37:53What's going on.

2:37:54Telling it is exactly why we need to build

2:37:58back on our conference.

2:38:01This is exactly why we need to make

2:38:03sure that this is our focus because we need to be there.

2:38:07There's a whole host of impacts on our city budget

2:38:11because we have depleted our reserves.

2:38:13And so what we need to do is we need to move forward

2:38:16with this budget with the fiscal response plan

2:38:19that the council has already told us to implement.

2:38:22We need to move forward and once we

2:38:24continue to build our reserves back

2:38:26that we have to ensure that we are accounting for all of this.

2:38:31I have you know I think that in the past I

2:38:36I know that what we have tried to do in this city

2:38:39is that we have tried to make score that we are providing

2:38:42services to our residents and in doing so we have to be have

2:38:46in the past the city and the city council

2:38:48has chosen to dip into its reserves

2:38:51in order to continue to provide those services.

2:38:54And we find ourselves now in a position

2:38:56where we can't do that anymore.

2:38:59We're in an emergency, which is impacting us.

2:39:01So I think that this is a very good example and a good reason

2:39:06for us to ensure that what we're doing

2:39:09is moving forward with fiscal discipline.

2:39:11You know, I think that what we need to make sure we're doing

2:39:14now is looking forward and that we are taking steps to ensure

2:39:18that moving forward we are putting ourselves in a better

2:39:22position so that we can indeed make sure we're took

2:39:26because the year 2011 12 13 and 14

2:39:31I learned from the city of Pleasant Hill panel

2:39:35made government smaller.

2:39:37My god.

2:39:37We were able to hire some of the people that like be let go

2:39:41and all you know now they had 7.5 million dollars in reserves

2:39:46and we have plus until has $10 million in reserve.

2:39:51We have zero.

2:39:53And this is not acceptable that we're

2:39:55spending spending spending.

2:39:57I did not want to deal with this.

2:40:01You know every time I heard from previous administrations of

2:40:06this newspaper writer is lying.

2:40:08She was telling the truth.

2:40:10The contra Costa Taxpayers Association said oh

2:40:14they're lying.

2:40:15They are telling the truth.

2:40:16So why not residents to know the contra

2:40:21Costa times has been telling the truth all the time.

2:40:24And while my colleagues are saying,

2:40:26don't pay any attention he's lying.

2:40:28Previous administrations have told me that they don't know

2:40:32what they're talking about.

2:40:33This is the truth.

2:40:35And I want people to know how sorry I

2:40:38am that previous administrations in this city

2:40:42let this go to a point where we are

2:40:45in a desperate desperate shape.

2:40:48Well I have used the word austerity three years dad

2:40:53and this is not acceptable.

2:40:55We need to make these changes be more aggressive.

2:40:58And I encourage this council before they leave in November.

2:41:04Please help me do this because the next council will

2:41:08have to clean up this mess.

2:41:11So we need to prepare.

2:41:13I do not want to use the bankruptcy word.

2:41:16And we need to be serious about this.

2:41:18Please we need to let people know

2:41:22that things are different here.

2:41:23We're trying to unload right now.

2:41:25Here we go.

2:41:26You don't remember.

2:41:27There's no counterpart.

2:41:30We're trying to get rid of that senior center.

2:41:33We asked John join us and let's let the residents know we

2:41:38should have never about that.

2:41:40That was our reserves.

2:41:42The biggest mistake I ever did.

2:41:44Let's agree with the city manager on that.

2:41:47Now we're trying to get rid of it.

2:41:48We're not going to give it a.

2:41:49We're wasting it.

2:41:51Please mayor.

2:41:52I encourage everyone let's be serious about this

2:41:55and let's to go on and move forward and prepare.

2:42:00This is going to be difficult. This is

2:42:01going to hurt you a little bit.

2:42:03Stop taking their calls member do you have to wait six years.

2:42:08And now I has the truth but I can't tell you

2:42:11how disappointing and how sad it is that people in this city

2:42:16lie Thank you.

2:42:25Karen you were back on slide 9 if I recall mayor.

2:42:35There was a council member Pardue

2:42:36Okimoto go ahead Rochelle.

2:42:41Yes Karen Eric do you have just a follow up question from what.

2:42:46Council member Clinton was saying I agree with you

2:42:51and that we were in the mess that we're in now

2:42:53and we need to move on and we need to make good plans.

2:42:57But I think that the point that council member Quintana was

2:43:02making roughly is that I think that when I'm reading

2:43:08this budget I'm not necessarily seeing the pension liability

2:43:13that we have or the projected.

2:43:19What mark had just explained.

2:43:22I feel like that's kind of missing from the dialogue

2:43:24that we're discussing here.

2:43:26And so I think it would give us a clearer picture if we had

2:43:29a little more understanding of where we're going

2:43:33with the pensions and what the actual costs

2:43:35are in those year to year.

2:43:39It's a fair point.

2:43:40I think that what we have done is in each of the US personnel

2:43:47when we put the categories for expenses.

2:43:53We do include those costs within the line that says personnel.

2:43:57Right so when we talk about as an employee that's fully loaded

2:44:02that includes there with their annual cost

2:44:05is not just their salary not just their benefits

2:44:08but what their pension costs the city.

2:44:11And so that is when we were referring earlier to Petra

2:44:14Petra is the pension reform act that the state passed

2:44:19that took effect that 2013.

2:44:22Now the pension system for anyone

2:44:24who comes in after that date is it's a higher.

2:44:29It's a higher retirement age as well as a fixed normal cost.

2:44:34And so that is why when we say like for example

2:44:37we used the example earlier about what a firefighter whose

2:44:41paper would be cheaper it's because their pension is

2:44:44a lower cost to the city all included.

2:44:46But that's a very good point.

2:44:48And we could certainly add some of that something

2:44:52in the narrative of the budget to discuss the you know what we

2:44:57need maybe a paragraph or two or a charter or something

2:45:00that's a really good really good thought

2:45:02and we can work on that.

2:45:05Absolutely thank you.

2:45:07I think that would help give us a clearer understanding of our

2:45:11what it is we need to do on an ongoing basis

2:45:14and maybe it could even be included in Mark's

2:45:16monthly updates until we all get a better clearer sense

2:45:21of exactly what we're paying in pensions

2:45:23or what we're looking at in maybe

2:45:25in like one year versus the next and paying

2:45:28specifically towards that and my unfunded liabilities.

2:45:32Sure and in the past we've actually even

2:45:35had our financial consultants prepare

2:45:40something for the council.

2:45:41So that's something we could also do in the coming months

2:45:44as well we can take a look at where we're at

2:45:46and what we're expecting our costs to be and do

2:45:48a specific presentation on pensions

2:45:52that would be something that we can absolutely look into.

2:45:56Thank you and what's on page 1 123

2:46:00is that the information there.

2:46:03The draft budget employees pension fund.

2:46:07Page 123 it'd be nice to have a paragraph.

2:46:11So the pension the employees pension fund is actually

2:46:14separate on the employees pension fund of the city

2:46:17is the previous fund was to when the city entered purchase.

2:46:23And so there's only one person left that

2:46:26is that right in that fund.

2:46:27Yes so that is actually a whole other page may.

2:46:30Great thanks.

2:46:31Sure however the unfunded liability

2:46:34was in the fiscal model that we looked at in August.

2:46:38So that's I do want to echo Rochelle and Gabe

2:46:45in making sure that the unfunded liability is not just swept in.

2:46:49So certainly making sure that we know where it's

2:46:52accounted for in the budget.

2:46:53Because if I recall the August 11th meeting

2:46:56we were looking at something on the order of like 2 and 1/2

2:46:59million a year in payments.

2:47:02And that's consistent with what mark is saying when

2:47:06Mark says it's $400,000 a month that's almost $5 million

2:47:12a year.

2:47:13So it's a real number.

2:47:15It's in our personnel line.

2:47:17So it is a significant portion of our personal budget.

2:47:23So when our personal budget is 80% of our overall cost

2:47:28you know the unfunded liabilities a pretty

2:47:31substantial portion of that.

2:47:32And to be clear it's the unfunded liability

2:47:35is for employees that worked for us.

2:47:37Some still work for us but many worked for us 20 years ago

2:47:41and they the contributions to calipers

2:47:45at that time was not adequate for the outlay

2:47:49of investments as needed.

2:47:51Now to sustain the fund and CalPERS

2:47:53is coming to us because those were our employees

2:47:57to essentially make calipers whole part of that

2:48:00has to do with CalPERS not necessarily taking

2:48:05money from us in the 90s.

2:48:08And part of it is the assumptions of their investment

2:48:11rates over time have changed.

2:48:13So that's what creates the unfunded liability.

2:48:18It's an obligation we have to some current and many past

2:48:23employees and I'm happy to.

2:48:27I'm happy 2.

2:48:27Add 2.

2:48:29Add something with an explanation in the narrative

2:48:32in the budget document.

2:48:34Great thank you.

2:48:41Mayor I do see council member able since hand up again.

2:48:45Go ahead Janet.

2:48:47Just a very small comment.

2:48:49Karen said that there was one person left

2:48:51in the old retirement system.

2:48:54There is somewhere in this document something that

2:48:56says it's three I'll fix that.

2:49:00I don't know if it's this document or the main budget

2:49:03but I was I read it today.

2:49:06If that's true, then that's the type of animal fix.

2:49:08Thank you.

2:49:09I have noticed a lot of typos.

2:49:12I apologize for that.

2:49:14We're we're getting there.

2:49:15It's a work in progress so thank you.

2:49:17Thank you.

2:49:18So this chart just essentially shows

2:49:22you know the categories in a chart to show the percentages.

2:49:28Obviously, we are heavily reliant on the taxes

2:49:30of all categories and the one the volatility

2:49:35that we've seen particularly in the general fund.

2:49:37As mark indicated our taxes and then

2:49:40the charges first so this is city wide expenditures again

2:49:46all funds.

2:49:47This does and again, it's showing

2:49:50the category of personnel professional services.

2:49:54And mark you can jump in on this as well.

2:49:56This does include the fiscal response

2:49:58plan and the vacant position.

2:50:00Again, this is all funds.

2:50:02So one of the things that we pointed out before for example

2:50:05is that the public works department is an example

2:50:08of a department that doesn't just rely on the general fund

2:50:12for all of its services.

2:50:15This also assumes and this as well as the general fund

2:50:19expenditures which is coming up in a future slide

2:50:22it does anticipate the hard part may be fully staffed.

2:50:25And I do want to make a note that particularly because I

2:50:29don't even know if you can say there's such a thing as fire

2:50:31season anymore but certainly earlier this week

2:50:34started earlier earlier every year

2:50:37as we've already described.

2:50:38We have crews that are out through this

2:50:41that are helping out the state.

2:50:45All of those expenditures will be reimbursed

2:50:49and all of the overtime that deals with any

2:50:52of those assignments will also be

2:50:54reimbursed including any of the backfill

2:50:57for people who are out.

2:50:58So all of that gets fully fully reimbursed.

2:51:01But we do expect that at midyear we will likely have to adjust

2:51:05both the revenues and expenditures upward

2:51:07considering we're already out there.

2:51:10So we will expect to do that at midyear we have not included

2:51:14any increases at this time but once we do

2:51:17make those increases they will.

2:51:19They will cancel each other out.

2:51:21But we will make them more accurate once we

2:51:24get to the end of the quarter.

2:51:28So professional services the increase there

2:51:31is mainly due to an increase in capital projects.

2:51:36And you know mark we thought that could

2:51:38actually we'll talk about on capital projects later on.

2:51:42And then the property and capital

2:51:44that does include the payments for the midtown activity center

2:51:47capital projects and utilities.

2:51:50So mark I don't know if you have any additional interest.

2:51:54I might just add to that what you said kind

2:51:56was as a council member body.

2:51:59If you want to point it out.

2:52:01I see this chart as a possible home for the unfunded liability

2:52:05pension payment.

2:52:06I would break out the personality line I'd about.

2:52:09So if we have an additional line that says pension pension costs

2:52:16taken out of the personnel that should be going back to 17 18

2:52:19and going forward to the proposed budget as well.

2:52:21So that would be good.

2:52:23The other point I wanted to point out

2:52:24was that again, a significant part of this chart

2:52:27is from the general fund.

2:52:29And if you take the other financing

2:52:30uses you will find that there is a significant jump in that

2:52:33and that's primarily debt service from the other funds

2:52:37that are non general fund.

2:52:38So it's like measuring the streets fund.

2:52:40And so on.

2:52:41So that's part of the reason why that particular line item chose

2:52:45jump above what you have in the general fund

2:52:47financing users line again 53.2 million here

2:52:53and it includes all funds to the capital project funds

2:52:57as Karen pointed out is captured in this particular table.

2:53:03And so that adds a significant important to the expenditure

2:53:06side of the balance sheet.

2:53:18Let to go back.

2:53:21Peter for was to move forward sorry.

2:53:25So this is just the same Citywide expenditures

2:53:30but this is their distribution.

2:53:34And you know the thing that we've pointed

2:53:36out you know over the years.

2:53:39And we continue to point out is that people equal services

2:53:42services equal people as you can see sex

2:53:4460% of our entire budget is personnel

2:53:48because they are the ones who provide those services.

2:53:51And so that is reflective that is consistent

2:53:54and that is consistent I would say pretty

2:53:56much in every municipality are our personnel

2:53:59costs are the main we can cut all

2:54:03of those other little pieces of the pie.

2:54:05They don't make as much of a difference

2:54:07as if we cut the personnel.

2:54:09Is and so this is all funds by department.

2:54:17This is just shuffling all the various pieces of the pie

2:54:23that all of the funds go to and where

2:54:26all of the different functions happen

2:54:30so more evenly distributed.

2:54:32But certainly as we have done over the years

2:54:36and has been prioritized over the years by my city councils

2:54:40previous and and I wouldn't you know again this

2:54:43is all up to you at this point.

2:54:44But certainly at this point, looking at public safety

2:54:48both police and fire at the majority of our budget

2:54:51and the highest priorities priority

2:54:53I already identified in our budget.

2:55:00So we are back to this chart.

2:55:01And again this is the full picture of the city budget

2:55:04so you can see the general fund at the top that is again

2:55:08as Mark said the majority of what we spend

2:55:10our money on but all of those other funds we do utilize

2:55:14and we utilize them for the purposes

2:55:16that they are restricted to.

2:55:19And again we've sort of looked at this chart

2:55:22already so I don't know Mark if you have anything additional

2:55:24that you want to add to that.

2:55:25But I do want to point out that the very you look absolutely

2:55:28at the bottom the total of funds and the fund

2:55:31balances that we have for everything that is where you

2:55:37know that the ending balance.

2:55:39The ending fund balance it ends up in all of those

2:55:41so you can see that several of our funds do have Fund

2:55:44balances that you need to move those forward.

2:55:48Again, back to the previous five I

2:55:50just saw your comment on that the fighters

2:55:55have just struck him.

2:55:56So the key thing to notice is that this combines

2:56:00all the funds which includes the capital project trying

2:56:03to provide approximately 10% And if you notice

2:56:08that public safety on this amounts stolen 47

2:56:12percent of this pie, but in fact, public safety is

2:56:17almost entirely general fund.

2:56:19And when we get to general fund well why

2:56:20do you find that public safety to jump up to 60% of that pie

2:56:25as opposed to 47% OK so capital projects actually

2:56:29dilutes the public safety.

2:56:30Important on this.

2:56:32So I thought I just mentioned that in passing.

2:56:34So if we get the funding notice that the combined fire

2:56:36PD is 60% of the general fund budget back to the next slide,

2:56:41please.

2:56:43And so just to point out to you that the projected June

2:56:4830th train training fund balances

2:56:51were updated and the visa as of August 31

2:56:56first these are June 30.

2:56:58Numbers as f August 31 folks they have been up there.

2:57:03I know you did but that's the best

2:57:05we could do it at this point.

2:57:06So those updated.

2:57:08And then we have proposed revenues proposed expenditures.

2:57:11The core does reflect but proceed previously

2:57:13in the previous tables you have been a fund transfers

2:57:17from 2.517 million received from and given to the general fund

2:57:22and other funds as well.

2:57:24And the net change is the difference between revenues

2:57:28and expenses are approximately 400 1,000

2:57:32which is a deficit give and that will be funded

2:57:34from fund balance in many of these funds

2:57:37that have a positive surplus.

2:57:40So that is leads to an instrumented fund balance of

2:57:4411.91 million across all funds.

2:57:48Again these are simple summary.

2:57:51These are apples and oranges.

2:57:52Technically we wouldn't have these together

2:57:54because some of these are highly restricted funds

2:57:56by the general fund is totally unrestricted.

2:57:58So how much can be a point of view yes

2:58:00if as well but the purposes of each of these funds

2:58:04are totally different.

2:58:05I mean these are significantly restricted and cannot be used

2:58:08for other purposes like for example the debt service fund

2:58:12just for that service alone and they amount to about 1.5

2:58:15million dollars in payments for various city hall the state

2:58:20improvement fund and the same center funding authority

2:58:24just to point out to you.

2:58:25That's the honest payment for the scheme senate measure

2:58:27funding to have $87,000 and that payment would be it was made

2:58:32at the beginning of September.

2:58:33So that could be done and that would be gone.

2:58:36So that is the final payment typically

2:58:38that's about twice that amount.

2:58:39And since this was the last payment

2:58:41we just paid off the end of August

2:58:44and that's you have a $7,000 on that Simpson a fund.

2:58:49You notice that the enterprise fund is the integrated waste

2:58:51management fund brings in revenues of about 2.7 million,

2:58:55which is a significant increase over prior years, given

2:58:58the fact that there was a rate increase back

2:59:00in December that competition approved last year.

2:59:03So that does come to a positive fund balance for the integrated

2:59:06waste management fund.

2:59:08The employees pension trust fund as cannon

2:59:10pointed out that just one employee retired

2:59:12he left in that napkin reads from being back in 1982,

2:59:16he was a of the police chief and he he's

2:59:18the last one left him that fund.

2:59:20So that's the provision for that.

2:59:23And that's just a snapshot of what's in mixed like revenues.

2:59:36Now this is typically where the budget

2:59:40strategies and reductions concentrated

2:59:42isn't that drop off.

2:59:44But at this point we have an assumption table

2:59:48at the next fund and the next slide.

2:59:51But I don't know Mark if you want to before we move

2:59:54to the next slide if you wanted to point anything out

2:59:56as far as these assumptions these are pretty

2:59:59much the general fund exactly to see if the marketing that we

3:00:01presented to council on the 1st of September by

3:00:04means I had some questions on the special funds near they

3:00:16could go back to where we're looking at the lights up here.

3:00:19The gas tax fund in the budget on age 44.

3:00:27Here's a overview of the gas tax fund and propose.

3:00:38So I'm looking at proposed revenue is 610,000 her

3:00:46and what I'm wondering is that's a higher

3:00:49number than previous years.

3:00:52And I was wondering why it was projected as higher

3:00:58despite the fact that covered a lot of people

3:01:00were using less gas would get their first age 40

3:01:12or getting it ready as she can do that.

3:01:18But I'm trying to take my shot at it.

3:01:19So the revenues and the price of 528,000

3:01:26and in the current year.

3:01:28It has been projected at 6'7 and 10,000.

3:01:33Would you be on this call.

3:01:39I'm sorry Mike.

3:01:40Can you repeat.

3:01:41Who who are you.

3:01:43Probably expected David Ortiz.

3:01:51Yes did you guys hear me.

3:01:55Yes good evening council members.

3:01:57I bet the city's public works director

3:02:01the rep proposed revenue for fiscal year

3:02:042021 is based on the most recent information

3:02:08that we received from the League of California cities

3:02:12which is that they have a financial consultant who's

3:02:15estimated but gas tax revenues will look like it includes

3:02:20decreases in revenues due to clothing in general gas tax

3:02:27was projected to be much higher much higher than what you see

3:02:29now but they have been decreased due to Tobin

3:02:34the financial consultant releases

3:02:38updated information every few months so we'll definitely

3:02:42revisit that revenue number at the next check in with council.

3:02:48Regarding the budget.

3:02:50OK and then my next my follow up question.

3:02:53And then on the slide that we're looking at the.

3:03:00Amended budget senate race died on the same line.

3:03:04The gas tax funds go all the way to the end.

3:03:08Actually does show a negative number for it.

3:03:12End of June 30th 20.

3:03:14I was wondering what does that negative numbers mean exactly

3:03:19what we're talking about.

3:03:21Does that thing of the general fine.

3:03:25What have you got.

3:03:26No that I'm a market can correct that but

3:03:34we could adjust the expenditures and reduce them by that.

3:03:37I'd have to double check what the estimated fiscal year 19 20

3:03:44balance is so we'll double check that

3:03:48and we can come from what not.

3:03:50We have to reduce the expenditures by four to $5,000

3:03:55to make sure we're not exceeding the available revenue

3:03:59and fund balance rate.

3:04:03And then I think her question.

3:04:06Or C or D. The guy gets yes the street improvement.

3:04:25Fine on page 51 of the budget it has this within India

3:04:35a balanced deficit of 168,000 approximately

3:04:43and I have basically the same question for that

3:04:47is that happens do we just adjust and not

3:04:50do as many projects to make that balance.

3:04:54Let me take that event.

3:04:58So in all fairness to Iraq and everybody else council member

3:05:03body Okimoto you're probably looking

3:05:05at the hard copy of the budget that was shared with the right

3:05:10yes right.

3:05:11And this document that's slide for the public as I pointed out

3:05:15was updated with fund balances for June 30th

3:05:19as at the end of all.

3:05:20That is the one you are looking at me is a slightly dated

3:05:23opening fund balance so you should be looking at is

3:05:27this fund balance to show you that it

3:05:28has a positive in being fund balance of 695,000 or 88 OK.

3:05:35Yeah I think that makes sense.

3:05:37Remember this whole process has been a fast moving one meeting

3:05:41the six month budget in three months

3:05:42and be shared with council.

3:05:44A rough draft which is the first draft of the document, which

3:05:48is second to being revised and reviewed when in the background

3:05:51we've made the best possible estimate of fund balance

3:05:54before we published it for the council package.

3:05:58OK I think that answers the rest of my special funding

3:06:02questions because that was mostly

3:06:03asking about deficits that I see from the in line

3:06:07there that you only saw positive.

3:06:10Yeah yes for the gas tax.

3:06:13And that too was an estimate at this point.

3:06:15The this time I do good.

3:06:17June 30th as of August 31.

3:06:20So once the audit is done that final number

3:06:22will be nailed down are you down with an estimated bounce

3:06:33market.

3:06:34That's a good point that this table that's

3:06:35being on the screen is different than table 2 to 7,

3:06:39which is the table on page 31 of the hard copy

3:06:42that we got and you've stated that this is a reflects changes

3:06:47that are as you are going through that as you go

3:06:53through the document and you go through the what actually comes

3:06:56in it there will be changes you mentioned on the about

3:07:00the seventh line down measure a partial tax swim center

3:07:04and the projected balance for June is positive for 85.

3:07:11The proposed expenditure is 637 which brings it

3:07:17to a negative balance of 151.

3:07:19I'm assuming that the debt that a balance will be zero

3:07:24that negative balance is not a problem

3:07:25is that that's why I'm trying to ask again.

3:07:29The estimate was made with a higher opening

3:07:32balance as of June 30th.

3:07:34It was high by 151,000.

3:07:37Down before you fight to see that.

3:07:39So I'd be into the day once you get back to the next version

3:07:42of this draft.

3:07:43These negative balances would be adjusted

3:07:46by either reducing expenses or changing the opening balance.

3:07:50So these would disappear in the final draft document.

3:07:54Great thank you chairman.

3:07:56Well, it's because it is completed.

3:08:05Karen your microphone is not picking you up.

3:08:08Very well.

3:08:08So I don't know if you.

3:08:11Because I'm not sure I heard what you just said.

3:08:15I said that that will eventually be meeting.

3:08:21Were you able to hear me experiments.

3:08:25It's either depleted or completed

3:08:27but I don't know which completed.

3:08:32I'll try to tackle it perhaps I'm having to d.

3:08:41All right.

3:08:42These are the assumptions and again this

3:08:44is similar to the chart are similar to the slide

3:08:49that we showed on September one that we have cut property taxes

3:08:55a level that we're expecting a 10% reduction in South tax

3:09:00is that we have updated the real property

3:09:03transfer tax revenue number to 2.4 million

3:09:07based again on trend data.

3:09:11And then the others the UT franchise taxes

3:09:14business license taxes are also based on trends

3:09:18or also the possibility that we might have some closures.

3:09:25But we're hopeful that you know but we're

3:09:27trying to be as conservative as we can in our revenues.

3:09:30So they have you know they they've even decreased

3:09:34over what we had presented in June

3:09:38but we're just trying to be as thoughtful as possible.

3:09:42Consider this is absolutely the most volatile portion

3:09:47of our budget is our general fund

3:09:49revenues particularly again when it

3:09:52comes to recreation programs.

3:09:55Since we are in such a reduced state right now.

3:09:59If restrictions ease on shelter in place orders

3:10:02and we're able to expand our services back to anywhere

3:10:05near what we used to be able to do on a normal basis

3:10:08throughout the year we're hopeful about that.

3:10:10But at this point we're sort of it

3:10:12we're just kind of keeping very, very tight tabs

3:10:16on what this might look like.

3:10:21Karen on this slide the second bullet down sales

3:10:24tax at 10% reduction.

3:10:27The discussion on page 33 suggested

3:10:30that we had a 10% decline in sales tax in one quarter

3:10:35last fiscal year and the year goes on the sentence says

3:10:39that it's basically a decline of approximately 13%

3:10:42over the entire year.

3:10:45Your slide here says 10% over the year 13

3:10:50doesn't seem like enough of a cut in in projection

3:10:55much less 10% so I'm just curious what if similar

3:10:59to the answer to the first question

3:11:03where are we getting this number this number doesn't

3:11:06seem to reflect the actual potential

3:11:11that we're seeing out there.

3:11:14We have Mark you can jump in too I

3:11:16know that we are supposed to if we

3:11:18haven't this week we might even get updated numbers from HDL.

3:11:23Mark is that true.

3:11:26Now this week perhaps even the month at the other end.

3:11:30OK I knew it was coming soon.

3:11:32They're continuing to update us our sales

3:11:34tax consultant male alignment if I may just add to that beef.

3:11:41Page 33 report is what was provided by management

3:11:44Bachman's but mentioned Bachman's themselves

3:11:47had pointed out that be expected a 10% reduction in sales taxes

3:11:50for 2021 which is the kind of fiscal year

3:11:54we anticipated reduction of about 30% to 40%

3:11:59in just the last quarter of last fiscal year

3:12:02and so that would be principal numbers just

3:12:06to bring that in perspective.

3:12:08Yeah I mean I don't want to.

3:12:12I think this is.

3:12:14I mean I hear the words conservative

3:12:16and I understand that we've said it a couple times tonight one

3:12:20time revenue that may come in from real property tax

3:12:23or tax or some other onetime sources

3:12:27would not necessarily go to the budget.

3:12:30I guess my question is have we.

3:12:34I know we looked at a full spectrum of budget cutting

3:12:39options that we presented on the table back in June

3:12:42and in August we picked 1.5 million of those.

3:12:47If we see a bad trend in one of these revenue numbers

3:12:54I'm assuming that you're going to bring to us some type

3:12:57of immediate response to those bad trends

3:13:03and we'll be looking at reductions in expenditures

3:13:07to reflect reductions in revenues.

3:13:09Is that a safe assumption because I mean,

3:13:13we've seen you you TV bad in other years,

3:13:16and this seems to be for you.

3:13:19Ts I would say that this might be correct

3:13:22but the utility could go down because people are canceling

3:13:26their cable that is an absolute safe assumption

3:13:31and that it's something that we've said this in the document

3:13:36we've said this all along that this may not

3:13:40be the end of the reductions that we see we have to continue

3:13:43to make sure that we're monitoring these revenues

3:13:46respond accordingly.

3:13:48You know the city council took action

3:13:50to cut 1.5 million dollars in structural cuts

3:13:55and we've implemented those.

3:13:56But there could be immediate issues that we have to deal

3:14:00with or further structural cuts that we may have to deal with

3:14:03and that is exactly why we're continuously monitoring this

3:14:06as biko and we are trying to prepare for that

3:14:10that should the need occur.

3:14:14I mean I know.

3:14:15Council member Abel sand asked for a

3:14:18what do you expect what's the revenue

3:14:20you expect on this date.

3:14:22And that's the improvement that we want

3:14:24to see in the monthly reports.

3:14:27We know it.

3:14:29We're told that there's a one month

3:14:31lag on certain revenue items.

3:14:35But I know we need to be nimble and responsive

3:14:40as revenue change.

3:14:43The revenue assumptions need to change.

3:14:45And if we're not seeing if we're seeing a 15% reduction in sales

3:14:51tax we certainly need to be correspondingly

3:14:54responsive to that.

3:14:57Yes I'm seeing hands from Janet and Paul

3:15:01we'll go to Janet first.

3:15:03This is just a quick comment on the cable reduction.

3:15:08I was thinking maybe it would be the other way

3:15:10around because people are staying in their homes

3:15:16and that might cause them to actually use

3:15:18their came on more as opposed to say going out to eat

3:15:24or something.

3:15:27I could be wrong but it could be we will be watching that.

3:15:31And that's also not only utilities or taxes

3:15:34but also the franchise fees from cable company to that was it.

3:15:45Oh Yeah.

3:15:47I just want to concur with what the mayor said

3:15:50because in revealing most of this material

3:15:53I kept having a process question in my head.

3:15:57You know if we do better.

3:15:58That's great.

3:15:58We move forward if we don't.

3:16:02What is the process and how much will it take to trigger

3:16:05action by the council.

3:16:07I just want to read a couple places where there was

3:16:10with our contractors that helped us get through this budget

3:16:15process and in our budget document

3:16:18we really locking ourselves up locking

3:16:21ourselves into a process over the next four years.

3:16:24And this is what it says and this is what our residents need

3:16:27to hear to that this budget assumes that the city maintains

3:16:32the existing budget reductions as well as the newly identified

3:16:36budget strategy through fiscal year 20 26

3:16:40and does not add new services or increased staffing levels that

3:16:44would negatively impact the general funds reserve

3:16:47levels during that time.

3:16:49So whatever we come up with we intend

3:16:52to hopefully lock ourselves into something

3:16:54that can't be touched.

3:16:55But if we're having greater negative news as the mayors

3:16:59mentioned I just want to ask city manager what do you think

3:17:03will trigger how we come back and how we deal with it.

3:17:08The locking in part is for adding this city council to

3:17:15right now if you wanted to direct me to go cut

3:17:17another 1.5 million dollars.

3:17:19Mayor pro tem fdle tell me three of you

3:17:21told me to do that we will go back and do that then

3:17:24at the end of the day that is you

3:17:26know that is what you know the city

3:17:28council I have to implement what you all want me to do.

3:17:32And so at this point this is what we have come to over time.

3:17:37And if the city council is interested in adding more

3:17:42reduction adding more reductions that sounds

3:17:44that sounds like an oxymoron.

3:17:46If the city council is interested in reducing more

3:17:48from the budget and that direction.

3:17:53You can provide me that direction.

3:17:55And I want to say well that wasn't really your question.

3:17:57My question is I'm for locking this

3:17:59in for things that are good.

3:18:01I think that's a good thing.

3:18:02I just think our residents need to know that we

3:18:04can't be expected to be adding.

3:18:07My question is as the mayor was talking

3:18:09about when we see more negativity than what's

3:18:12projected here.

3:18:14What is the process of us reopening and coming

3:18:18back and changing that.

3:18:19Is that a step by step ad hoc process or are

3:18:23we going to wait for a certain time

3:18:25and add up a variety of things or is

3:18:26that yet to be determined.

3:18:29If there is if we are seeing if we are seeing revenue trends

3:18:32happen like we for example what happened

3:18:35last fiscal year over it we in April, may,

3:18:38June when we took that massive hit right away

3:18:41and everything locked down and quickly shut.

3:18:44And we I implemented you know we implemented the local emergency

3:18:47I implemented furloughs I cut a car allowances

3:18:52I did all it took all of those actions

3:18:54and brought those to you immediately

3:18:56and we would do the same thing.

3:18:58We that's why again we're continuously

3:19:00monitoring and making sure that we are

3:19:02staying on top of all of this.

3:19:04We will make recommendations to you if necessary

3:19:07and at any time the city council can certainly direct

3:19:10me in a different direction.

3:19:13So it is know it's certainly something

3:19:16that I am keeping an eye on and I have every intention

3:19:18of bringing back to you particularly if it's something

3:19:21urgent I would do that immediately

3:19:24I would ask you for a special meeting if necessary.

3:19:27Those are things that we just have to make

3:19:29sure that we're relying on.

3:19:30But you know again if the city council you know

3:19:34want you know if you have concerns you know

3:19:38please make sure that we have a conversation about it.

3:19:41You can tell me about it you can do that.

3:19:44That is absolutely Yeah I guess there's some judgment calls

3:19:49because sure sure we can open this up

3:19:51whenever we determine there is a real issue.

3:19:54But like on sales if it gets to 13% versus 10% that

3:19:59may not be the point where we need to come back

3:20:02and open it up.

3:20:02Right but where we will be notified on the monthly basis

3:20:06of that concern.

3:20:08So that our continuing monitoring.

3:20:10OK certainly.

3:20:11And again, we will be back at after

3:20:15the after the second quarter of the fiscal year

3:20:17ends at midyear we will be back for more adjustments as well.

3:20:21And I'm going to hope that we adjust some of those revenues

3:20:24up that would be wonderful.

3:20:25Let's keep our fingers crossed.

3:20:27But I'm not I'm trying not to have over.

3:20:32I'm not trying to increase those expectations

3:20:34but we will be coming back to you

3:20:35at the end of next quarter for adjustments as well.

3:20:38But if we need to come before that we will come before that.

3:20:41Thanks Janet.

3:20:44What's being said here in the reports

3:20:48that we're going to be getting at the council that

3:20:49will not be on the consent calendar every month.

3:20:55Know that the cash flow analysis and the profit

3:21:01and loss statement.

3:21:04Those are the opportunity every month

3:21:06for the council to weigh in on any changes

3:21:10they see that are undesirable.

3:21:12And in fact, I would say that it's our responsibility

3:21:16to do that now.

3:21:20That's my comment.

3:21:23I'm not in my head.

3:21:24I see Gabe nodding his as well.

3:21:28This slide this up slide 16 is certainly

3:21:31one that is as Janet has talked about

3:21:36and Rachelle has talked about.

3:21:38We see things like a reduction in vehicle miles traveled.

3:21:42We see things we see changes and we are not necessarily

3:21:47the experts in in tax in sales tax

3:21:50or the experts in utility use or tax.

3:21:53But what we're here to say we have great concern

3:21:57for the assumptions and we need to see these assumptions

3:22:00verified on a routine basis and Janet's most recent comment

3:22:03is accurate monthly.

3:22:05We need to see these monthly so that we know whether the facts

3:22:11are bearing out that the assumptions that were made now

3:22:16Rachelle.

3:22:20Yes I just wanted to follow up on a couple of concerns

3:22:25that I had since council member fidelity brought it up

3:22:30and going over the general budget

3:22:33just there were a couple of things in the budget

3:22:36and I don't know if things have changed.

3:22:39This hard copy that I'm looking at

3:22:41might be different than what has been worked

3:22:43on since this was handed to me.

3:22:46But what are the things I was wondering about

3:22:49was something that married women had commented on early on.

3:22:53It's on page 32 the our fiscal response for land

3:22:59and recession forecast of the hard copy budget

3:23:14and just because everyone caught up with me.

3:23:16Yes OK.

3:23:19What I was concerned about here was the furloughs

3:23:24of the managers an additional 13 days as opposed

3:23:28to an ongoing Furlough of which had been started.

3:23:34I think especially in light of what we were talking about

3:23:36earlier in terms of how hard the money that we're going to have

3:23:41available to pay the trend off seems to be such so close

3:23:45to the amount that we owe.

3:23:47It just seems like we're leaving you know potentially,

3:23:51if this number is correct $359,000

3:23:54on the table that could be utilized

3:23:57by continuing the Furlough.

3:24:01This assumes furloughs through the end of the fiscal year

3:24:04for managers.

3:24:05That's an additional 300 $1,000.

3:24:08OK So that's the managers.

3:24:14But isn't it the full staff we at this point

3:24:19we have assumed furloughs through the end

3:24:22of the calendar year for non sworn non-public safety staff.

3:24:28Any additional furloughs would need to be negotiated.

3:24:33So what we have been trying to do

3:24:35is at this point we've been trying

3:24:36to see where we go with that.

3:24:41We will as we're monitoring the revenues if we need

3:24:44to add furloughs if we need to increase our scope

3:24:47of what that looks like.

3:24:48If we need to make further reductions

3:24:51or proposed further reductions that would

3:24:53all be subject to negotiation.

3:24:55And that's what we're keeping an eye on at this point.

3:24:58But this is what's been implemented as of now OK.

3:25:02So what I was wondering then was from the rest of my council

3:25:06members as if they thought that further furloughs were

3:25:11necessary or if we just accept what's in that budget

3:25:18but for me I mean, that's part of the reason

3:25:23why I'm bringing up the constant monitoring of our revenues.

3:25:27And to me we need to have some first actions ready to take

3:25:36in our in our tool box for quivers in your arrows

3:25:43in your quiver whatever analogy you want

3:25:46and you're pointing to one that is very responsive

3:25:50that we could take action on.

3:25:53I'm not prepared to take that action tonight.

3:25:57I think you know if I think we have another month or two

3:26:02of watching the revenues and seeing what goes on but we

3:26:05definitely need to have whether it's, you know continuing

3:26:08the furloughs or reducing staff and further or other types

3:26:14of layoffs we definitely need to have ready solutions.

3:26:19And I and I you've given the report

3:26:23we got tonight in item 7 a where we

3:26:26were told that revenue is a base a month

3:26:29behind in certain categories.

3:26:31I'm nervous.

3:26:34And so for me you know I'm much more inclined to say we need

3:26:39to have ready solutions to pull out and implement

3:26:44as we see revenue not meet the assumptions that

3:26:47are on this list.

3:26:49But what you've pointed to is one of those solutions

3:26:52readily available that we would implement.

3:26:55We can implement that in December if necessary.

3:26:59So for me I think we need to potentially put a continuing

3:27:04agenda item on a monthly basis that talks about as Janet said

3:27:09talks about the fiscal report and then

3:27:12as part of that if we're seeing trends go the wrong way

3:27:15we need to start talking about response actions

3:27:18that we put in place to meet it.

3:27:20We respond to that.

3:27:21Gabe I saw your hand take what you said and what.

3:27:26Council member.

3:27:27Part of what you've said and I agree with both of you looking

3:27:32at what we need to deal with and the possibility

3:27:37of continuing with this recession

3:27:41and covenants most likely.

3:27:43So we need to be prepared.

3:27:45And then.

3:27:47So definitely I agree with both of you.

3:27:50We need to make sure that you have

3:27:53a plan B when we need to do it.

3:27:56And just do it when we have to.

3:27:57And then we have to.

3:28:00I suggest that we talk to the other mayors and council

3:28:04members in the other cities and this is now, unfortunately,

3:28:08because if open we're not able to talk to them then like we

3:28:11usually do and this is how I was able to find out

3:28:15what other cities are doing and when they did it

3:28:17and how they did it then.

3:28:19And so I encourage my colleagues here

3:28:22you know call the different cities

3:28:25and call your colleagues call the league cities

3:28:28and they will tell you that we need

3:28:31to do a lot more in cutting.

3:28:33We need to prepare for a rainy day fund.

3:28:36And so in order to prepare for that we do

3:28:39need to make these cuts and we need

3:28:42to make the cuts even more.

3:28:44And then this is something that we see the state is grappling.

3:28:49And the county is grappling with the huge deficit.

3:28:53All cities are going through deficits.

3:28:55So looking at that and with CalPERS the stakes also Cerrito

3:29:00towards the top of the list.

3:29:02That's in trouble.

3:29:03So I want to make sure that we're aggressive when it

3:29:05comes to making these changes.

3:29:08It's so important to do and we have the responsibility now

3:29:14that we know that all this is true we need to work on this

3:29:19and work on this.

3:29:20Now we can't say you know he was lying the whole time.

3:29:24You know the whole world knows that we reform.

3:29:28So I encourage everyone to make sure that we don't go

3:29:34through this town ever again.

3:29:36This is embarrassing I have spent

3:29:38six years to bring the city to what we have to deal with.

3:29:44Now you know can you.

3:29:45Can you imagine what every other city knew

3:29:48what we were going through.

3:29:50But our colleagues are not talking to our colleagues

3:29:53there.

3:29:54Let's attempt a league of cities and you will find

3:29:57out more what we're not doing.

3:30:03You Paul, you've been muted or you raise your hands or go.

3:30:07I just wanted to say something that squeezes in between what

3:30:11everyone else has just said.

3:30:12I think it gets back to my process question

3:30:15I've been saying all along that everything needs

3:30:18to just remain on the table.

3:30:20Everything needs to be an option.

3:30:22And as the mayor said about Michelle's comments

3:30:25this is a great option.

3:30:26But I'm not prepared tonight to say we should do that now.

3:30:29I liked the monthly process and my question

3:30:33was, when do we kicking the making those changes necessary.

3:30:36Because I think going forward is what we're

3:30:38going to need to be doing.

3:30:39And this is a good way to do it managers salaries other things

3:30:43are on the table and we need just

3:30:45need to remember that and be ready to act with a plan B

3:30:48as Gabe Tinto has mentioned.

3:30:54Karen you're on slide 17 of like 30 something right.

3:31:00I think we have 25 flights so we can actually

3:31:03do that double and deterrence.

3:31:08We could maybe move through some of these

3:31:11and perhaps go along with questions.

3:31:14But I do want to point out it's 10 17

3:31:16and shortly we'll need the council to take action on that.

3:31:21Unless you wanted to take action right now because we're

3:31:23not done and we won't be done by June 30.

3:31:26Yeah I know we will be done by 30.

3:31:27Janet has her hand up I make a motion

3:31:34that we extend the meeting by 15 minutes to 10 45.

3:31:39Is that what I'm hearing.

3:31:40Yes what I'm saying Marty.

3:31:42Yeah you think we needed to get raised.

3:31:45Great dancers can call saying more or shows doing what.

3:31:50I'll take your word for it.

3:31:5411 11:00 we don't have to use it people

3:31:57don't have to repeat themselves.

3:31:58We've already said something.

3:32:01Once you don't need to say it again.

3:32:02Exactly OK.

3:32:04So we're.

3:32:05So the motions to 11 by ableton do have a second by Pardue

3:32:11Okimoto roll call please.

3:32:13And I mean yes ma'am.

3:32:15Pretend finale.

3:32:17Yes cancel member Wilson.

3:32:19Yes council member I do.

3:32:20Komodo yes.

3:32:22Council member King.

3:32:24I mentioned Chris so again back to general fund expenditures

3:32:33and as we've been discussing.

3:32:35And this is where the major reductions have been taken.

3:32:39And as you can see we're at lower than two years ago.

3:32:462018 2019 levels at this point.

3:32:50And that is, again with the fiscal response spending plan

3:32:53included the furloughs the deferred colas

3:32:57and everything else that increase in the reductions.

3:33:01And mark I don't know if you have any other notes

3:33:03on this one just to say that none of these numbers

3:33:09have changed, except for the fact that I think

3:33:10at the present first meeting I said that we might be reducing

3:33:15police department costs by 260,000 which has been factored

3:33:19into the personnel line item.

3:33:21So that's why you see a slight low of 38.7 million

3:33:25total cost and then again this.

3:33:30You have seen this.

3:33:31You have seen this before as well.

3:33:33These are what all of the bargaining units

3:33:35have done to date.

3:33:39And I'm sorry.

3:33:40There are still stars in there.

3:33:42That was from a previous version where those

3:33:44were still under negotiation.

3:33:45Those have all been completed and those are all

3:33:48factored all of those personnel bargaining unit negotiations

3:33:54have been completed and factored into the personnel budget

3:33:59and the non personnel again is about 8.7 million dollars

3:34:04and those reductions have also been included

3:34:08from the original set of reductions

3:34:10that were given to the council back in April 20.

3:34:17So this is a pie chart once.

3:34:19As mark pointed out this is a very

3:34:21different looking pie chart than the one with all funds.

3:34:23You could see that personnel is once more.

3:34:2676 percent of the general fund budget

3:34:31and so most if reductions need to happen in the general fund

3:34:35budget it needs to happen in personnel as we have been

3:34:38discussing and then by departments you can see again

3:34:44as market pointed out in the for the all funds

3:34:46this shifts a bit.

3:34:48Looking into the way that all of the various departments

3:34:53are distribute the general fund expenditure cuts

3:34:55are distributed throughout the various departments

3:35:00any additional thoughts on this mark.

3:35:03No I don't.

3:35:06All right.

3:35:08Here's the ugly chart says my least favorite chart

3:35:14for very obvious reasons.

3:35:18This is the ugly truth that we're facing

3:35:22and that we have been discussing all evening long.

3:35:26But this is what we need to be real remain vigilant in turning

3:35:29all of this around.

3:35:30And obviously this is dependent not just

3:35:33on maintaining the reductions in expenditure

3:35:35but because we are uncertain in our revenues.

3:35:39So once again, this is a snapshot in time.

3:35:42We're trying to be hopeful that our revenue picture will

3:35:44improve but we are by no means even considering

3:35:47that and counting on it.

3:35:48So as we are continuing to prepare ourselves to face

3:35:51this deficit head on so that we are

3:35:53building back our reserves being responsive to emergencies.

3:35:58And yes so that we're not dependent on trained

3:36:00financing in the future as we had discussed

3:36:02in the previous agenda item.

3:36:03That is all due to making sure that we build our reserves back

3:36:09so we can do that to provide the services that our residents

3:36:13and businesses expect on a consistent basis

3:36:17and without impacts to our residents and businesses.

3:36:20So again we've implemented the fiscal response plan.

3:36:23This includes the $1.5 million in structural reductions.

3:36:28But as we've just been saying we must

3:36:31be prepared to make further adjustments

3:36:32in reductions if necessary.

3:36:35We will be doing that as we're continuously monitoring we will

3:36:38again, bring back any recommendations

3:36:40or cut you with any urgent issues that we need to do that.

3:36:45But at the very least again we know

3:36:46we will be coming back to you at midyear

3:36:49and we will be continuously working with the city council

3:36:54and working with staff to make sure that we're toeing

3:36:59the line on everything that we've

3:37:01been talking about this evening and as we go forward.

3:37:04I think the council has made themselves incredibly clear.

3:37:07We hear you and this is exactly what we are making

3:37:10sure that we bring back to you.

3:37:13Mark any thoughts on this ugly cart just

3:37:18to point out to you that the restricted fund balance

3:37:22that many top line item there includes about 1.3 million

3:37:26that we have from the Department of finance

3:37:29will be settlement with the county on the idea.

3:37:32So that's still pending.

3:37:33It's being treated as non spendable that's 1.3.

3:37:37And so if I were to factor that into the proposed budget column

3:37:40the undersigned fund balance would drop to about 1.2 million

3:37:44again as opposed to the negative 1 3, 6, 7.

3:37:47You see that.

3:37:48So that's just a slight point here that I want to point out

3:37:51to you to keep in mind that the column assumes the worst case,

3:37:56in my opinion a worst case scenario a negative 2.3

3:38:00deficit in the year just ended.

3:38:03Now if that number were to be less than negative 2 1 2

3:38:06let's say negative 2 million that 2 out 1,000

3:38:10would directly go to the bottom line

3:38:12and would be a safety net because 1.6 million

3:38:14for example in that 700,000 would

3:38:17go straight to the bottom line.

3:38:18So this is the worst case scenario

3:38:21that we assume and the numbers and once the audit

3:38:25is concluded you'd know exactly what that number should be.

3:38:30Karen, the personnel line that's here that goes 25 point

3:38:34to 29.930 0.329 0.929 0.5.

3:38:43This is it looking at your presentation.

3:38:45This is the best place for me to bring up this question

3:38:49does the 29.5 budget the vacant you said earlier that

3:38:54if the vacant positions are not funded

3:39:00by this 29.5 when I compare all of our vacant positions

3:39:05to the 30.3.

3:39:08It seems like that doesn't reflect enough of a savings.

3:39:12So I was wondering if you could speak to you

3:39:15know why is our personnel.

3:39:19We've got these positions vacant positions the reduction

3:39:22in speed and workforce yet we're not