 Can we start with a roll call, please? Yes. Councilmember Bautorf? Here. Councilmember Bertrand? Here. Councilmember Story? Here. Vice Mayor Brooks? And Mayor Peterson? Here. Thank you. Please join us in the Pledge of Allegiance. We're going to screw it up again. I'm sorry. I want to leave this play. To the flag of the United States of America. And to the republic for which it stands. One nation. One nation under God. Indivisible. Indivisible with liberty and justice for all. Making it work, team. Way to go. All right. Are there any additional, excuse me, before I move on to that. In accordance with the current shelter and place order from Santa Cruz County Health Service and Executive Order N2920 from the Executive Department of the State of California, this council meeting is not physically open to the public. As you can see, we have limited council members and staff physically present in the council chambers during this meeting. The rest of council is participating remotely via video call. Members of council can use the reaction choices in zoom to indicate they would like to speak similar to raising a hand. As always, this meeting is cable cast live on charter communications cable TV channel eight and is being recorded to be rebroadcast on the following Wednesday at 8am and on Saturday following the first rebroadcast at 1pm on charter channel 71 and Comcast channel 25. Meetings can also be viewed live from the city's website, www.cityofcapitola.org. Our technician tonight is Benjamin Thompson. Thank you again for being here, Benjamin. Despite being physically close to the public, participation is still possible. Public comment can be emailed to council for their attention during tonight's meeting. Please identify the item you wish to comment on in your email subject line. Email comments will be accepted starting now up until I announce that public comment for an item is closed. Each emailed comment will be read aloud for up to three minutes or displayed on a screen. Emails received by public comment at ci.capitola.ca.us that are received outside of the comment period outlined will not be included in the record. Lastly, we want to thank you for your patience tonight as we adapt to this different way of conducting council meetings for the safety of everyone involved. Moving on, are there any additional materials for tonight's meeting? Yes, there was one email regarding item 6a. Alright, wonderful. Any additions or deletions to the agenda? Staff has no changes. Okay. City council, successor agency or staff comments? Do staff have any comments? I don't think there's any comments tonight. Just a budget presentation. Alrighty. Any members of the council have any comments? If so, please indicate by raising your hand, so to speak, in the reactions. And I don't see anybody. Looks like Councilmember Trann maybe. Oh, there we go. Great. Thanks. Alright, Jock, go ahead and unmute yourself. Or are you going to do that, Jamie, or are we doing that individually? Perfect. Councilmember? There we go. Yeah, go ahead. Okay. Some time ago, I brought up the item that I'd like to have on a future agenda. And I'd like to bring it up again. And that is to reduce or expunge felony marijuana cases. And I noted in newspaper last week that Alameda County just did that. And also Santa Clara County just did that. So I'd also like to note that there is a time element. We have till July 1st because of Proposition 64 to do this. And I understand that we have to take some action. Well, excuse me, it's our district attorney that has to take the action and come up with the list of people to have this action taken for. But what I'd like for us, the help of our city attorney to come up with some strategies that we could use, maybe a letter to the city attorney, contact other cities in the county if this is the will of the city council. I'd like that to be agendized. I did ask for this a year ago. The timeline is coming up. Thank you. All right. Thank you. Any additional council members have any other comments? And seeing none. And I have to go through a couple screens to see everyone. So if I don't notice right away that you've raised your hand, please do unmute yourself and let me know that you're trying to be heard. We're going to move on now to item five, the consent calendar. These items will be enacted by one motion in the form listed, unless any of the members of the public or the city council would like to remove an item for separate discussion. Did we receive any public comment that anyone wants to remove an item from consent? Seeing none, is there any council members that would like to remove an item from consent for separate discussion? Seeing none, we will entertain a motion and a vote. I so move to accept the consent account. We have a motion. Second. Motion and a second. Can we have a roll call vote, please? Of course. Council Member Botwerp? Aye. Council Member Bertrand? Aye. Council Member Story? Yes, aye. Vice Mayor Brooks? Aye. Mayor Peterson? Aye. Thank you. Great. Motion carries unanimously. Let's move on now. Item 6A, presentation of the proposed 2020-2021 fiscal year budget for the City of Capitola General Fund and Capitola Successor Agency. Right. Mayor, members of the council. Let me turn my video. First off, I want to thank you all. This has been thank our finance director, our finance team. This has been probably the most challenging budget cycle I've had the pleasure of being a part of. Obviously, the situation a couple months ago looked like it was going to be a relatively straightforward budgeting process. It turned out to be anything but. I don't think it's any surprise to anyone that the economic implications of the pandemic are being felt in Capitola and will be particularly severe in the City of Capitola, given that so much of our revenue is derived from regional shopping, tourism, hotel stays, things like that. So we've prepared a draft budget. It was included in the packet. And our finance director, Jim Malberg, is going to be making the presentation tonight. If anyone has any questions as we go through it, we're happy to stop and talk about it. Talk about how we got there. Again, I don't think it should be a surprise to anyone that that overall the impacts are severe. And as a result, the budget includes very significant changes from what we've seen in the past. Again, I just want to thank Jim. He's been working very hard on this a lot of late nights. So thank you, Jim, and take it away. Good evening, Mayor and Council. So I'll just start off with a quick summary. So as Jamie just mentioned, the local economy has been and will continue to be heavily impacted by the COVID-19 global pandemic. We're anticipating $4 million revenue shortfall from our prior fiscal year 2021 estimates. And if you recall last year, our planned budget for this year had a about half million dollar gap that we were going to have to address. So the total results in about a four and a half million dollar budget gap that we're trying to close right now. So to do that, nearly all non non essential expenditures have been eliminated and all essential expenditures have been reduced as much as possible. We are still working through logistics of putting together a summer fall 2020 recreation program. So as we bring future drafts before you will hopefully have better information on what that's going to look like. As far as fund balance, our impact to our fund balance this year is going to be around 2.2 million. Again, that's including the 550 or I'm sorry, that includes 550,000 that we were programmed to to use from fund balance, reduce fund balance for three different CIP programs that I'll touch on a little bit later. Right now, without doing anything with the general fund that would bring our fund balance and the general fund at June 30 of this year down to a negative 425 almost 426,000. Additionally, next year right now, as we're projecting out, we see an additional 323,000 negative impact to the fund balance. As you're well aware, and we say this each year, ongoing purse costs continue to be a major threat to the city. And right now we're evaluating, we have the purse trust fund and we're evaluating using a portion of that to pay the UAL payment, which is about 1.7 million this year. Again, heavy reliance on sales and TOT tax is compounding the fiscal impacts for Capitola a little harder than some cities that in the Salinas Valley that don't have the same revenue mix. So as Jamie said, we are feeling it pretty hard here. As far as position of our reserves right now our contingency reserve, which is 15% of general fund expenditures prior to any transfers to like ISF or CIP is sitting at just a little bit over $2 million right now. Our emergency reserve, which is 10% of general fund is just under 1.4 million and the purse contingency. Last time I got a statement was at about $8.55. That one's kind of bouncing around. We were at about $9.10 before the pandemic. We had dropped down to about $8.30. Now we're going back up, my guess is we're probably in the $8.68-70 range right now. So this, I just put up a graph. This came up during our presentation to the FAC last night. And if we were to do nothing other than rely on our contingency reserve to fill this gap in addition to some of the cost in the cost savings that we've already built in. This would be what our reserves would look like at the end of fiscal year 2021, which is very similar to what it looked like after the storm drain pipe as far as contingency reserve in 2011. This is our general fund summary, just the high-level categories of revenues and expenditures. And this is just to show you where revenues are coming in as far as taxes, licenses, how it goes out, personnel, contract services, and then the impacts to the budgetary fund balance that I was talking about a few minutes ago. As far as our revenue forecast, so these are the assumptions that we're working with right now. Property tax is going to go up 4%. That's been pretty consistent for the last several years. If there's any impacts to property tax, the value for this year's tax roll is based on January 1 of 2020. So if property values do go down as a result, we won't see that until January or next fiscal year in the assessed values of January 1 of 2021. Sales tax, we're projecting about a 20% decrease, or just under $1.2 million for our Bradley Burns and then as far as measure O's and F's, 20% there, almost $450,000. TOT, we're projecting a 70% decrease, which is almost $1.2 million also. Parking down 50%, that's just half of what we would normally get. Parking citations will drop, we're projecting about 20%. And then all other revenues, the two primary that are in there are building permits and business license, but there's a whole mix of other revenues in there. On average, they're going to be down about 5% or another half million. And that gets us to the 3.7. And this is looking at last year's budget versus this year's proposed budget. So that's why it's 3.7. Next slide. And as far as revenue notes, again, the expected decrease from year to year is 3.7, expected decrease versus what we were planning for this year is about 4.5 million. Sales tax and TOT represent about 60% of general fund revenues, sales tax being roughly 50%, TOT 10. So our top 25 sales tax generators generate 63% of that revenue, top 5, 35%. So how those top 25 businesses come back as we start to open things back up and specifically those top 5 is going to really impact how we go forward and what we look like over the next few quarters. Property tax, I already touched on that on the previous slide. On the expenditure side, our assumptions right now, our changes that we're making is a 7.3% decrease to personnel. And we're achieving that through frozen positions and other personnel cost reductions. Contract services, we've reduced what we believe is down to only essential contracts, so a little over 23.5% decrease. Training and memberships down to only essential items of almost 39% decrease. Supplies 11%, again only essential items. Grants and subsidies, we have no general fund grants programmed in to this proposed budget as it is right now. Internal service funds, we've reduced down to basically just our insurance premiums for Liability and Workers Comp and a little bit going into our IT. Internal service fund just to maintain a positive balance and other financing uses which is primarily transfers into the CIP. We have a few debt service things in there, but primarily that transfers into our capital improvement program down by almost 84.5% or 1.9 million. On the personnel side, so I had mentioned the 7.3%, it's 716,000. We're getting there by, we have frozen positions right now equaling just under 618,000. Additional personnel savings we're trying to achieve comes out to about 311,000. And those are offset by our increase to the PERS UAL which we have no control over. It went up 212,500 this year. I just wanted to show this, I just wanted to, while we're on personnel, there was an error in the budget that I sent out, the proposed budget. And this table right here was fine, but when you get into the department level, the way it came into the pages, it looked like we were freezing positions this year and eliminating them next year. So I've added a column and you'll see this all the way through. I'll give an example of what it looks like at the department for authorized positions and budgeted positions. So if we go, this is for the city as a whole, so that's the six frozen positions. I just used the police department as an example, but you can see we have authorized 30 and a half positions. Positions were budgeting for 27 and a half with the intent of getting back up to the 30 and a half next year. So I just wanted to be clear with that so that nobody thought we were deleting positions from anything. Contract services. So this is, I kind of highlighted some for their dollar amount and some for just because of what they are. So Beach Festival, $5,000, we've gotten taken that out of the budget down to zero recycling services. And Larry gave me the answer to that and I forgot to send you the email, but I will do that. Sure, no problem. The temporary staffing, 3,000 personnel background checks, 5,000 education reimbursement, 5,600. On this one, I just pause for a second. We will still reimburse employees for their education expenses. What we've done is scaled this down to what we've seen over the last several years. We don't have very many employees utilizing that benefit. So this is more of bringing it down to what we've actually spent over the last few years. Sales tax admin fees, that's just a percentage of what we collect. So since we'll be collecting less, those are going to go down. Lifeguard services. We've taken completely out of the budget at this point. And I believe we'll be discussing that in a little more detail later. The beach shuttle we've taken out. And then Soquel Creek Monitoring and Lagoon Grading. This is if we do not close the Lagoon and we leave the creek open, then we would not need to do these two services. If we determine that we want to close the creek and have the Lagoon and these would come back in to play and we would have to figure out a different place to get that 55 or 60,000 back out of the budget. Next slide. I think one thing I do want to chime in on this one is the lifeguard services. Those services are provided under contract with the city of Santa Cruz. The contract does include a 60 day notice for contract termination clause. I've been in discussions with the city of Santa Cruz about this and both parties, the city and Santa Cruz, we've both been eager to be flexible because we haven't been able to make a firm decision about what was going to happen with the lifeguards. However, the city of Santa Cruz is under a bit of pressure at this point to begin either hiring and training lifeguards if they're going to be utilized or not. And so that is going to be, while this is just intended to be an overview of the budget presentation tonight, that is one item where if I could get some council consensus before we go home this evening about what we're going to do with the lifeguards. That would be helpful because really we need to probably send notice to Santa Cruz to terminate the contract for this year. So continuing on, we've reduced public works engineering services by 30,000, riparian restoration by 13.5, public works temporary staff, 80,000 and hope services, 16,000. We may have a way to bring hope services back in. We're checking on that right now. Esplanade sidewalk cleaning, 13,000, ADA compliance, we've reduced from 50 down to 35, plan checks outsourced. We have staff now doing that, so we are no longer going to be utilizing that contract. Recreation transportation is really, I believe, tied to the junior guard program, possibly some of CAM, but I think it's mostly junior guard program. And then recreation temporary staffing, 8,000, if we have reduced programs, then we'll have reduced need there. Recreation property repair and maintenance 15, museum 8, and art and cultural 35.5. On the museum, that has basically been reduced down to just keeping our storage facilities for where all of our museum stuff is stored. And on the art and cultural events, that's canceling all summer concerts, movies at the beach, and the art and wine Sunday music. Training and memberships decreasing, again, only essential. It's almost 50,000, 39% only essential or reimbursed training. So our police officers do post training and we get reimbursed for that, that will continue. And then other essential training that we need for people to maintain certifications required to perform their job. Supplies are decreasing by almost 11%, again, only essential. Grants and subsidies have been eliminated from the general fund. So this budget suspends the community grant program as far as the general fund portion. Local business groups in early childhood and youth programs would continue to receive the restricted TOT revenues, but that right now is going to be pretty severely impacted as well. We are looking at some CDBG funding, and I'll touch on that on the next slide in a second, as far as maybe being able to get some funding back to some of the nonprofits. ISF charges are decreasing. Again, that's only our insurance liability premium and our workers' comp premium as well as a little bit of IT. Nothing, no funding for our stores ISF and no new equipment purchased or programmed into this budget. Also, there was another typo in the adopted budget that showed the fiscal year 2021 column as adopted. I've corrected that to proposed. It's not adopted until you adopt it. So that's been corrected, and you'll see that in the next version. And again, general fund transfers decreasing by 1.9. So we don't have any general fund transfers to the CIP program, and at this point we've also got measure F funding remaining within the general fund and not transferred over to the CIP program. So this is the CDBG stuff that we're looking at. This is fairly new. Katie just, I think, learned about this within the last few days, possibly last week. There's a little over $174,000 of grant funds that could be utilized for response to, for COVID-19 related issues for low income households. Those we can allocate up to three of the four activities, which include public services, which is food distribution and housing assistance for low income, homeless housing facilities, economic development for micro enterprise loans, which is very small businesses or small businesses, and healthcare facilities, healthcare facilities doesn't at this point really fit into our need unless somehow we convert Jade Street or something into a COVID urgent care. Before we get off of this one, I just wanted to share this item will be on your agenda for the next meeting. And it'll be to identify which of the three or the four activities we may want to consider utilizing the funds for and to adopt a resolution to make us eligible for the funding. So we're in the process of developing more information and getting the information on it, but we wanted to let you know that this is out there and it will be on your next agenda. So as far as a revenue summary, this is just our main category of taxes, license permits, intergovernmental revenues. And this is really showing how last year our adopted budget had a little over 16.6 million of revenues. We think we're going to get somewhere around 14.2 of that. And next year we're probably going to be around the 12.9 range based on our forecast right now. And next year coming back, we probably, based on what we know right now, we'll probably be somewhere around 15 million for next year or fiscal year 21-22. Sales tax. So this just graphically shows kind of the growth that we had seen now kind of dropping off for this year. The budget year that we're talking about as well as fiscal year 21-22. So what I'll say on this for as far as our projections, we do use HDL as our sales tax consultant. This was discussed a little bit last night. I don't think I gave a complete answer. HDL's primary service that we are interested in, if you will, is sales tax reporting and sales tax auditing. So each quarter we get a report from HDL that breaks out our top 100 businesses and we can look at about a three or four year history of what their sales tax performance has been and what trends are. They categorize them into different industries, automotive, restaurants and different categories. So we watch those different categories as well as watching individual businesses, especially in the top 100. The revenue stuff that they do is kind of a bonus service in my opinion. I always check back against their revenue projection just to kind of ground truth mine. I very rarely use their, I'm generally pretty close and I don't generally use their revenue projection. So that's kind of where we landed. We're a little bit higher than what, as far as we're a little bit lower than what HDL is projecting and I just think that's a conservative estimate at this time. Their original projection, I believed had assumptions that thought that the shelter in place orders would end somewhere around May 1st to May 15th. People would start kind of returning back to normal as we got into the fall as far as their spending patterns and by early next year people would kind of be back to somewhat normal spending. I think what I would like to do is reach out to HDL now that the shelter in place orders have changed and see if their assumptions have changed and see what their next revenue projection is. My guess is it'll be closer to what staffs was originally. Property tax, this is just kind of the steady increase that we see. It's been pretty consistent at 4 to 4.5% each year for the last several years. Hopefully that continues. TOT, this is again, this is the biggest hit, which hurts the most because this one we can get 100% of the tax and that's just showing our projection of a 70% decline. I'll have to go through the health order that was modified today. I don't recall seeing hotels in there, but I just quickly glanced at it. If they are able to open back up then we can revisit that or when they are, we can revisit that. I believe the current health order does allow hotels to operate, but only for essential guests. Guests who are either traveling for some sort of essential purpose to take care of a family member who may be ill or who are essential workers who are looking for housing or someone who's quarantining. I think those are all sort of allowed uses for a hotel room at this point, but I don't think there's been an order that opens them up for general travel. And this just shows, kind of breaks out the restricted TOT that's for local business groups and early childhood and youth programming. So you can see kind of the same trend. We just started this program up and it's already taken a pretty big hit, but hopefully it starts coming back, not this fiscal year, but the following. On the expenditure side, this is the same summary just showing the main categories. You can see last year we adopted a expenditure budget in just under $17.2 million. We were projecting that to be somewhere around $17.5 million this year. We're cutting expenditures to try as much as we can in this fiscal year to try to minimize the impact of the general fund and then you'll see as we start getting into a little more details, we've cut our expenditure budget down to a little over $13.2 million at this point. And this just gives a breakout by category. So one of the big challenges we have, and we discussed this a little bit at the FAC last night, is we're taking basically a 22% cut to the general fund and the general fund is made up of almost 71% of personnel costs. So how do we get to 22% and have a minimal impact on employees? And that's been a pretty big challenge that hopefully we're getting close to solving. As far as departments, again, biggest department is police, so no surprise there. We're limited on what we can really do with police. It's a 24-7 operation. So how do we get 22% out of that when half the budget is going to public safety? And I think we've achieved that in this proposed budget. But I did want to show out where kind of the main departments and main expenditures by category are going. So on the general fund balance, our estimated current year again is almost $426,000 to the negative. Staff does have a recommendation to eliminate the negative general fund position to end this year and start the next year. If you recall in 2017, we set up an employee down payment assistance program and designated $300,000. To date, we've had no employees take advantage of that program. So it seems reasonable to temporarily release that money back into the general fund and bring the general fund balance up, make that available for budgeting. Also, since measure F went into place, we've always budgeted. We've always transferred what we budgeted, but we're not that perfect that we can budget exactly what we receive. Our budgets have been slightly higher than what we've received. And in the back of my mind, I've known we've had to do a true up. Now with the expectation that we're going to take a pretty big hit on sales tax revenues, we're going to need to do that true up. So for example, we were projecting for the last half of this year to get about $500,000 more in measure F. We'll probably get somewhere around half of that. So by truing that up, it will reduce the amount of transfers going out, which then leaves that money in the general fund. Before we get off that, it's a little bit of a complicated concept. But basically the notion is that hypothetically, for example, let's say we were anticipating a million dollars of measure F funds. We would budget a million dollars of measure F funds going into the CIP, and we would move a million dollars of measure F funds into the CIP. If the actual receipts in that year ended up being what's happened is they've been under what we've been budgeting in our district taxes. So the actual receipts, let's say in this hypothetical year were $950,000. Effectively, we would have moved over more in measure F than we actually have received. So this is a proposal to true up the amount of money we've moved into the CIP with what we actually received in measure F funding. So those are kind of our staff's recommendations at this point. There are other options out there. We could just transfer from the contingency reserve. I showed that graph earlier. We could do a combination. We could reduce general fund transfers. Again, we transfer everything that's budgeted, but we do half in December, and then we do half in June. So at this point, we've only transferred half over. We could suspend those transfers and just leave them where they are. I don't know that that's a great idea at this point because council always has the ability if we complete these transfers to go back and pull that money back. Also, the capital improvement program, the three CIP projects that we added at the end, we've only transferred half of that money over, so there's still another $275,000 to transfer. We could forego that if that was council's decision. When we discussed this at the FAC last night, the thought was go ahead and make that transfer in, but maybe sit tight a little bit longer before we actually start spending that money on the projects and kind of gather some more data before we actually start letting the cash out. Department highlights. So these are department highlights. I don't know if you want me to read each one of these. There's probably about five slides like this, so I could pause at each one and give everybody a few seconds to read them. It's probably better. I think maybe I would just touch on some of the highlights. The council, I think one of the highlights this year was really taking an opportunity to dive into the community grants program. Obviously, we still have more work to do, and this year maybe it doesn't become as necessary, but that was, I think, a big lift and a big task to take on city attorney. We have the new contract with Burke William Sorensen, which is a big deal, a big change for us. I think from my standpoint, the city manager's department, I think everything has been 24-7 COVID for the last three months. I know we did other things earlier in the year. It's hard to remember some of those things, but I know we did increase the participation in our waste diversion programs and done a fair amount of good work with trying to get more compliance with the plastics ordinances as well. Is there something on this one, Jim? Really, we were just supporting city council and you through the COVID stuff, and then still working with friends of the Capitola Library to wrap up their fundraising campaign. On the police side, they have a vendor now for their county-wide RFP for records management. They completed their critical incident training for all officers. One thing that's really cool, in my opinion, the police department was able to facilitate a donation to support the police canine program for 12 months. So each month we have a donor submitting a monthly check that's paying for our canine program through next April. So I thought that was pretty cool. We also issued our first retail cannabis license to the hook, Capitola. They are open and actually we're inquiring today on how to submit their cannabis tax, so I'm pretty excited about that. We upgraded all our pay stations and removed all the standalone meters in the village. I just also want to just touch on the records management system within the police department. This was actually part of our 911 centers effort and ultimately I think it was more than almost a $2 million contract, if I remember correctly, to update the records management system that all the police departments use. And I know our staff worked hard on the RFP and then the selection process to get the right vendor and it was really time to update that software. Capitola pays a prorated portion of the overall amount based on our overall participation in the 911 center, which is I think around 6% of the overall cost. But that was a big deal and it was a big, big important tool that we were able to get done this year. So on the public work side, obviously the new library building is moving along nicely. A little bit of a delay on the undergrounding but we still anticipate completion of that during this calendar year, probably in the fall. Measure F projects, the flume and jetty project are ready for construction in fall of this year and we've completed all the environmental clearances for the Wharf project. Continue to participate in local and regional stormwater pollution prevention. Completed the Park Avenue sidewalk project. I don't know if you've all had a chance to see that yet but it looks great over there. Awarded the construction contract for Bromer Street as well as awarding a construction for Park Avenue storm damage repair projects. And I'll circle back to those two a little bit later in the presentation as well. I actually think that the Wharf project is going to get environmental clearance tomorrow night at the planning commission. So that's the anticipated accomplishment of this year. On the community development side, continue to work on updating the city's local coastal program. Approved two conditionally used permits for retail cannabis establishments. My understanding is our second retailer, I don't know if they're keeping the name Apothecarium that was who came in, has pulled their permit to start making improvements to this building and I think there's a four to six month build out on that so we should see them open up sometime this fall. Awarded an SB2 grant in the amount of 160,000 for objective planning standards and a new program for pre-approved ADUs. On the museum and art and cultural we opened a new exhibit, Capitola Obscura, a little known facts about Capitola. Received more than 500 donated volunteer hours and welcomed over 6,000 guests into the museum. And we had 13 twilight concerts, 6 Sunday art and wine music events and four movies in 2019. Recreation, they started the new after school program working with the SoCal Unified School District and partnered to provide a scholarship program. So if you recall we have a $8,000 scholarship program where the city's contributing half and the school district's contributing half. Provided diverse class schedules for adults and seniors and began providing classes on the weekends. Held our first food truck event at Monterey Park which was a pretty big success and we had anticipating doing more of those this summer. I think those are on hold for right now. Provided a winter movie series showing family and friends movies and we're able to get community sponsors to donate all the popcorn, candy and pizza and all that stuff. Offered new classes with focus on youth recreation and earned an accreditation from the American Camp Association for Camp Capitola. So as far as funded capital improvement projects, I just wanted to touch on this really quickly. So we have three general fund projects right now that are ready to, I'm sorry, non-general fund projects that are ready to go to the library. And that has general fund component but that's already been funded and that project is far enough along that those funds need to stay there until the end. Bromer Street which I believe is RTC, if I have that correctly, is fully funded and ready to go and Park Avenue Storm Damage. I believe we get reimbursed for almost all of our costs there. So those three projects we should continue to see continuing to move forward. As far as general fund projects right now that are funded, we have the flume rehabilitation project, the jetty rehabilitation project, Claire Street pedestrian crossing. That's on the Claire Street and the Capab sidewalk retaining wall. That's assuming that we make that last transfer of the $275,000 that I mentioned earlier. If we make that transfer, these projects become fully funded and are ready to go. Next slide. So as far as recommendations, Jamie mentioned earlier, we're looking for direction on lifeguard services. If we're not going to contract with City of Santa Cruz, we need to let them know. I believe this week and then identify any budget questions that any of the council has and then some feedback for future budget hearings. Last night we talked about briefly touched on we're going to get about 16,000 of restricted TOT money for early childhood and youth restricted and youth programs. Do we want to program that into our own recreation program was the question last night for consideration. And then again, we need to identify our plan to close the current year general fund gap. At the fact last night, I think I mentioned earlier, they recommended releasing the 300,000 for the employee down payment assistance program and then truing up the measure F transfers. And then lastly on this, we need to identify a plan for those general fund CIP projects that are funded. Do we want to move forward with them now or do we want to pump the brakes a little bit and see as we get more sales tax data and TOT data coming forward. And then our next special meeting is on May 21. And that is the end of my presentation. Be happy to take any questions. All right. Thank you. Let me see if I can adjust the screen here so I can see all the council members at once. Council members any questions on this item. Let's see any reactions. I'm seeing a thumbs up. I'm assuming that's a we're good with this or is that a I have something to say that's I have something to say. Okay, I saw a council member story first so we'll start with you and then we'll go to vice mayor Brooks. Yeah, thank you know that that was meant that I had a question. Okay. Yeah, so my first question and a bit. Maybe a broad question is about what data points were used to do the forecasting are projecting into 2021. You know the reductions in sales tax revenues and and even on a 70% drop in TOT. So I that was one question I had that Jim and Jamie as to how you were what what information you were using to make these forecasts. So I did you want me to ask all my questions now and Yeah, I think that's probably a good way to do it. One time. So that was my first question my second question is on one of the recommendations to I think kind of reduce the amount of this year's fund balance deficit it was moving funds from the contingent reserve and the emergency reserve of the contingency was 12,500 emergency 15,000 and I'm just wondering if how how you write that those numbers and and and whether or not since our budgets are reduced are we currently above our projections at 15% and 10% and therefore we have money freed up to move from those reserves and my final question concerns the the actual 21 to 22 planning budget that and how much you guys are prepared. I know it's listed in this document, but it seems so far out and there seems to be so many unknowns. Is it worthwhile even attempting to jacked out that far into the future with with so many unknowns at this point and whether that's even a worthwhile effort in this document. So those are my questions. Thank you. As far as revenue projections. I mentioned HDL and we kind of listened to what they had to say and they came up with their projection. We've also I also have sat on a couple of webinars with the California society society of municipal finance officers or CSMFO as well as the California League of Cities and kind of listened to what their economic experts are. So outside of sales tax, I'm really relying on some of those projections coming from the league and from CSMFO. And they had sales tax projections that were not as optimistic as HDL's not quite as pessimistic as ours. Again, those were probably three or four weeks ago. They may have changed by now, but we've just I've got some more information from HDL today. I haven't had a chance to read it. Seems like I get something about every 10 days on how to how to kind of navigate this. The problem that we're seeing with some of the big when when you look at the league and CSMFO is they're looking at cities kind of average and each city has a different revenue mix. So we kind of have to take what they're saying and then what we know on our own personal experience and kind of blend those together to come up with our projections. And at this point, honestly, this is the first time any of us have gone through a global pandemic. So we are kind of speculating a little more than we normally would. And what I kind of told the fact last night, our plan, at least my plan going forward is to report back to the council quarterly. We may do quarterly budget amendments this year rather than just one mid year adjustment, just depending on what data we get. If there's big changes in the first quarter one way or the other, then we would definitely be back in front of council and seeing how do we address that either either putting services back in or funding stuff that we didn't fund or further reductions if need be. Hopefully that answer that question. Yeah, thank you. Second question was on the reserve transfers for this year. So yeah, so the the 12,000 and I think it was 25 and those are half of the transfers that we've already budgeted for this year and what I was putting up as an option that is not making that second transfer. And you are absolutely correct council member story that with the general fund expenditures coming down, we are slight going to be slightly overfunded on the emergency reserve. I would caution going to that. I don't think we need to put program more money going in there, but I wouldn't necessarily take that one down on the contingency side. I think that needs to be a measured approach. But those those two amounts that you mentioned were just the second half of the transfers that we've already budgeted for this fiscal year that we're in. And then on the last question for 2122 that yeah that whenever we do that plan second year it it really is kind of going out and and hoping our crystal ball is somewhat accurate. And this year I have it's a lot foggier than it is in most years. So I always kind of take that second year as with the grain of salt because none of us can predict the future that well. And I think this year more so than than usual. So I don't know. I don't want to oversell the value. I would I wouldn't emphasize that we should spend a lot of time worrying about that second year of the budget this year because I think that there is just so many unknowns enough announced for us to deal with just this year. Yeah. And I and I agree with that. And I would I would almost suggest that we remove that column from our budget document because it just it looks so ugly going out. You know those two years and it may totally be an inaccurate reflection of what that budget year will look like. So what thank you for answering my questions. Thank you. The next one that had their hands up I suppose is Vice Mayor Brooks and then followed by Council Member Patron. I thank you. You actually answered my question was about updates and how often we were going to receive those. So you've answered my questions. Thank you. All right. Thank you. Council Member Patron. Well the updates are of concern to me and I'm glad Sam brought that up and he bet equity that concern. So how how often we get those is mostly dependent on HDL. Is that the case Jim. So I think the the relevant data points are going to be we will find it we will get our sales tax numbers for the quarter that we're in right now which is April May and June. We'll receive that information or our final payment in August towards I think the last usually it's between the 20th and 25th of the month. And then my thought was to report back to Council in early to mid September on what those numbers look like. And then if we need to make adjustments at that point. The second data point that I think is going to be critical is for that first quarter of next fiscal year July through September. We'll get our last payment for that or sales tax payment for that at the end of November. And I think we would be back in front of Council and sometime in December depending on the scheduling either December or early January with the mid year update. Little earlier than I think what we would normally do is closer to February. I think we'd want to be a little quicker this year. I think at this point in terms of my questions and maybe everyone else on the Council macro questions. We identify 35 vendors that are largely responsible for our sales tax. I forgot the percentage. Have you looked at those in a more critical eye to see how probable those are in terms of coming up and are they business types that would be easily. I guess turned on. That's a good question. Top 25 are all going to be larger companies. I believe they will return. Jamie, you want to. Yeah, I can chime in a little bit. I mean, I think a lot of them are the large format retailers, the auto dealerships, the folks that you sort of know. The ones that I think are going to have are going to. I mean, I think they're all going to be challenged moving forward. But the ones that I probably think we'll see longer lasting impacts are some of the big restaurants. Obviously with social distancing requirements, even when they are able to open, they're going to have to spread themselves out a fair amount. Gas stations too. Gas stations have actually crept into some of our top 25. And just people are driving less and the price of gases is falling so much that we're going to see lasting impacts to those. So I think the hardest ones to restart in general would be the, you know, in terms of getting back to where they were eventually would be the gas stations and the restaurants. That's just an educated guess, but it's not necessarily right. Okay. My third question has to do with have we contacted the mall, which is a sizable segment of our sales tax. Do we have a sense? Of course, we don't know when they could open, but what's their sense? Obviously they're in the business. So I have been in communication with the mall. You know, I mean, I think they're reeling from this right now and trying to develop a plan and a strategy. I know that Simon's released a plan that they they intended to try to reopen their malls, which was pretty interesting because I think they were trying to. Simon's is the largest mall owner in the nation. Merlin guy is a large one, but they're not as big as Simon's. But I mean, if it's this point, they are waiting to see what the health orders are and what opportunities are afforded to them. Okay. I think we all want to have everything open up as fast as possible. So, you know, our general inclination is to be optimistic. And I don't know how optimistic I am, especially when I look at financial discussions for investments like bonds and, you know, other equity issues. And they're talking about 2023. They're talking about, you know, a year and a half to two years, you know, to come back. So, you know, I'd like to go to those sources to get a better or more clear idea of what, you know, could extend how we feel about our ability to come back. Last meeting, I talked about, you know, what we can do. And I mentioned saw something in the presentation about you're trying to do whatever the city can do to increase business. And so my question is, are we anticipating working with the BIA and the Soquel Chamber, you know, to come up with a plan so that we could put ourselves on the map as best as we can. Thank you. And keeping in mind that a lot of our activities that people have expected are off budget right now, you know, so that's going to be a deterrent that we're going to have to plan to overcome. So that's my question. So at this point, the city hasn't, you know, so here's what I can share is is that I was on a call today earlier with the county and the county is proposing that we sort of form a regional economic recovery task force comprised of about 10. Really, this would be for business owners, not not not bureaucrat types and not not electeds. And so they have asked for suggestions and they are prepared to have that staff and run in conjunction with Dr. Newell and the public health services director as well. So that is something that that we're working on right now. I forwarded the names of a couple prominent capital of business men to them to see and women to see if they might be considered for membership in that in terms of a local effort. It's certainly something we could consider, you know, working with the Chamber of Commerce or with the BIA to try to do something here locally. You know, at this point, it's not in the work plan for next year, but that's why we're having the budget cycles. And so if that becomes a council goal, that's certainly something we can we can do. Yeah, I don't want to put it on the table right now, but I think along those lines would be very beneficial. We have partners with the business community and I think working with them is the first the first avenue to choose from. Thank you, Council Member Bertrand. Council Member Rotor, if you have any questions. I know you hadn't raised your hand, but you're the last in line. Thank you. Thank you, ma'am. Okay, great. Okay, and all of my questions have already been answered, either because other council members asked them or during the fact meeting last night. So if there's no further council questions, we will bring it out to public comments. Have we received any public comment on this item? Let's do a quick send and receive. Doesn't look like we did. Okay. Seeing no public comment, we will bring it back to council members for further discussion. And I believe there's just some direction we need to give to staff at this point, not necessarily a vote. Is that correct or do we need to vote on it? So the key thing that I'm looking for feedback on, just forgive me for a second, I'm trying to drag this. It's not wanting to go. The key thing we're looking for feedback on this evening is on the lifeguards. You know, the lifeguard contract was intended to start on Memorial Day. We have the current beach orders that closes the beach every day between 11 and five. I don't know for a fact, but I believe that those are the orders that we're going to be living with this entire summer. So my recommendation would be that we agree that we're not going to have lifeguards on the beach this summer and we give notice to the city of Santa Cruz. So that's the one thing just because their timing is such that if they need to get going, they need to get going and I'd like to get that direction to them sooner rather than later. Sure. All right. Council Member Bertrand, I see your thumbs up. So let's go to you and let me extend the screen so I can see if anyone else. My question is without lifeguards on the beach, where does that leave us in terms of monitoring the beach activities that we may feel need to be, you know, addressed by either police or by people that would be in the life saving capacity. Sure. So first off, we would not have lifeguards on the beach, so we wouldn't be in the life saving business. With the beach orders of being closed, the police department would be in charge of enforcing that. So I don't think it would make any sense to have lifeguards trying to enforce a closure. I think it would send a really mixed message. I think that there is a scenario where the beach closure orders could be lifted early and whether or not then we could work with the City of Santa Cruz conceivably on busy weekends to have lifeguards on the beach would be something we could research. I don't think that's the case. I do think we're going to be living with these closures through the summer, but there would be the opportunity to revisit it. And in lieu of lifeguards, it definitely would fall on PD to make sure that the health orders are being enforced. So my follow up question is, I think we have some activities, events rather than use the beach. I'm not thinking of junior guards, but other activities with the absence of lifeguards would that be an impact? Are you suggesting the special events? I'm assuming you're asking. Yes, I am. At this point, I don't believe that we are going to be seeing larger special events, certainly not earlier in the year. If we do get to the stage later in the year in the fall and maybe some of the smaller ocean oriented, whether the paddle... I don't think the J-Race is scheduled for this year, but maybe there's a triathlon, the mermaid triathlon. I think that's probably too large an event to plan on holding, but if it were to happen, we would definitely work with the city of Santa Cruz and the event organizers to have lifeguards for that event. Thank you. All right. I believe Council Member Bautour have had his hands up next. Thank you, Mayor. I'm going to go back to the slide that the city manager put up about the items that he wanted to see back on. And I'll just go down the line. With regards to the lifeguards, I concur that the doubtful that we're going to be open at all and maybe the lagoon won't even be formed. So I'm fine with not having any lifeguard service this year. I'm very thankful that we have a great relationship with the Santa Cruz Fire Chief and the city manager so that there was no problems with the guidelines of that. With regards to the $300,000 that the SAC authorized from the housing fund to put back into our budget, I'm fine with that transfer. And with regards to the capital fund projects that have been authorized that haven't been funded this year to use the words of the finance director, I think I just want to pump the brakes on that for right now and not transfer those funds. I think we can do that at any time. So I don't see an urgency in that. And I think that was all the items that, and we are next meeting on May 21. So those are my comments. Thank you. Thank you. Let's see. Council Member Story or Vice Mayor Brooks, do you have any comments? Seeing none. Okay. So it sounds like we don't necessarily need a formal vote. Or would you, do we think it would be easier for this case for us to just go ahead and vote? I'm seeing two more council members. Oh, sorry. Okay, let's go to a council member story first, because Council Member Bertrand has spoken, then we'll come back to you, Council Member Bertrand. Yeah, thank you, Mayor. I did just want to follow up and give input on the items on the list. One first concerning the lifeguards. Yeah, I agree with Council Member Bortoff. I think it's kind of late in the season to be planning on having lifeguards at the beach. You know, when the beach is even going to be open again and the view of our budget struggle, I think we need, we should forego the lifeguards this summer. I also agree that, you know, we should release the employee down payment assistance program back to the general fund, true up the measure at. I would also include toward assisting our, you know, our budget reserve is to free up the available surplus in the contingency reserve of the 12,500 and the facility fund of 54,000. And the CIP that hasn't been funded yet, 275. And then we should use those funds to, you know, help our fund balance. So ideally we could start the 2021 year with, if not a positive, at least as, you know, a zero fund balance. So those are my thoughts on the, on those questions. Great. Thank you. Council, I'm sorry. Did you need to respond or no? That's just comments, correct? Okay. The only question I guess I have is about the fifth facilities fund, the 54,000. I know that we had some expenditures planned out of the facilities fund. Some of those I think are still pending. We'll just have to look and make sure that that keeps us in a decent position. A positive balance in the facilities fund. Okay. And these are all the feedback. These are all feedback for future budget hearings, right? Technically, we can give comment, but these are all, these items are all going to come back to us. Correct? Yeah, you don't have to make a final decision this evening. Just the lifeguard is the one that you want. The lifeguard is the key decision to make the other things that we do need input on before we adopt the budget. Okay, sure. Councilmember Trond, I believe you were next. Yeah, I was. Thank you, Madam Mayor. So I remember the last time we had a big issue with the budget. There was a feedback effort with the city staff and they came up with significant budget items that we could consider to reduce or change. Has that happened? And if it hasn't happened, I think it might be a good idea to do. So, yes, Councilmember Trond, you're correct that during I think the 910 downturn, we did go and talk to employees and took different ideas forward and implemented some of them on budgetary savings. The difference here is, frankly, is that we've cut everything. Previously, when we went through 910, there was a lot of things. We continued to grade the beach. We continued to have lifeguards. We continued to do community grants. So the cuts were far more selective and I think the staff input was useful in that case. I'm not adverse to doing it. I think we certainly could. But I guess, you know, at this point, the budget has been so hollowed out that there really aren't very many other rocks to turn. Now, that said, I don't think asking them would be any harm. So we can do that. Thank you. All right. Vice Mayor Brooks. Yeah, thank you. I guess I'll get help get some input on the positive of the recommend things that's left here about the 16,000 early childhood to T fund. I know there's been some talks about still offering some sort of programming throughout the summer for students. And perhaps this is an opportunity to move those funds into our, our rep department. So maybe it's Nikki can take a look at that and see if there's any need for staffing as we look at social distancing and some other things that will be required in order to run these programs. I'm sure there will be costs associated with that. So that would be my only recommend recommendation for that. And I'm in agreement with the other recommendations from our previous council members. I just did just wanted some clarification on council members stories. The last recommendation about the the other dollars just some more insight. I wasn't piecing that together. Let's go back to that slide. See if I can find it here. Jim, do you know where? Oh, here it is. I went right to it. So very quickly. So we have right now we're estimating that we're going to have a negative fund balance position of about $425,000 in our fund in our general fund this year. And so in general, we don't want to leave that as a negative position. And so there's a couple different options about how to bring that back up to zero. And conceivably, we may want to bring it up further because we do have a further deficit project projected in our 2021 budget. And so what staff had suggested was temporary releasing the employee down payment assistance program, which I believe council member story also mentioned. And then in addition to another option we talked about was this true up between the CIP and the general fund for measure F. And then I heard council member story talk about not making these transfers down here, which were the budgeted the second half of the budgeted transfers into those reserve funds for this fiscal year that we're in and keeping those funds in the general fund. Is that is that correct council member story what you were suggesting. Yeah, that's correct. I was a little bit more I didn't specifically mentioned the emergency reserve fund. Just because I mean that may be needed for other things, but the the other items. That's correct. Great. Thank you that answers my question and that's pretty much what the finance committee suggested last night as well. Thank you. Any additional comments? I don't see any hands up. I think because I believe that the broadcast of this is not showing the zoom of the actual council members so anyone watching can't see the council members faces so otherwise I would have him do just like a hand up or something for consensus. I should probably do a vote instead but before we do I see council member bot works hand is up. We could also ask the camera to show the screen which would show like hand up. Well, yeah, he would be showing it would be broadcasting what's on that screen right now. It's a little chaotic. It is it's showing that screen but not any of the council members. Really? Yeah. That's interesting because I've got it in a split screen right now and saying watching that video because I specifically wanted to see if all the council members faces are on it. Well, that's something for us to fix. Yeah. Okay, but first I think council member bot work had a his hand up. One thing I was trying to do when life mayor Brooks was speaking, because we were doing a consensus thing I was using the thumbs up. What I was trying to do is I was trying to agree with her when she was talking about $14,000 for recreation, as opposed to the clapping hand, which I was using for raising hands. So, I was doing that but anyway, I guess we haven't gotten that level yet, but I was kind of just supporting her recommendation. All right. Thank you. Okay. With no further questions or comments because do we do we need a motion in a second if we're doing an informal vote just to get everyone's on the lifeguards. Yes. Do we still need to motion a second if we're just voting for the sake of consensus. You can take a motion a second alternatively at this point the direction I'm hearing is is that we're prepared to terminate the contract with the city of Santa Cruz for this summer. I'm prepared to issue, you know, give that direction to Santa Cruz unless anyone else has any other anything else. Okay. I saw another hand up council member botch or if is that clapping or is that an actual. Well, I thought the mayor, I thought the city manager made a staff recommendations. I was going to say I make a motion to support staff recommendations and just continue the life. All right, there we go. We have a motion. Do we have a second? All second. All right. We have a motion and a second roll call vote please. Yes. Council member botch or. I council member Bertrand. I council member story. I vice mayor Brooks. I mayor Peterson. I think motion carries unanimously. Thank you very much. And with that, I believe that's the end of tonight's meeting. So thank you so much. Thank you Jim and city manager and all of our staff on all the work on the budget. Thank you council members and everyone watching remotely. I acknowledge this is kind of awkward looking at a this screen and this screen and not always the people that are talking because I'm trying to connect with everybody. Thank you all for all your hard work and please stay safe, stay healthy, take care of yourselves and take care of each other and we'll see you next week. Meeting adjourned.