 Can you hear me? Hello? Can you hear me? Yes, we can. Loud and clear. Thank you very much. Thank you. For those just joining the meeting, I'd like to let you know that Spanish translation is being offered today. For those wishing to join the Spanish channel, you can click on the interpretation icon on the Zoom toolbar. It looks like a globe. Once you join the Spanish channel, we recommend you shut off the main audio so you only hear the Spanish translation. Charles, one of our interpreters, can you please restate this in Spanish? For those who want to hear this in Spanish, please click on the icon below the globe. Please press the button and you will hear the option in Spanish. Please put your speaker in silence so you can hear the interpreter. Thank you. Thank you, Paloma. Madam City Clerk, are we ready to start? Yes, we are. Perfect. I recognize a quorum. Let's go ahead and call the roll. Thank you. Council Member Schwedhelm. Here. Council Member Sawyer. Here. Council Member Rogers. Present. Council Member McDonald. Here. Council Member Fleming. Vice Mayor Alvarez. Present. Present. Is that you, Council Member Fleming? Indeed. Thank you. Vice Mayor, you are here and Mayor Rogers. Here. Let the record show that all council members are present. Excellent. As is noted on our agenda, we'll hold closed session at the end of the day, which is not our normal practice, but we felt with budget that that was more prudent. So we'll jump in on item number three. That's our study session. Madam City Manager. Thank you, Mayor Rogers. So item 3.1 is review of fiscal year 2122, Operations and Maintenance and Capital Improvement Budget. So I first want to begin by thanking all the staff who participated in this process. Just way too many to name, but it takes a lot of time, preparation and meetings to put this budget together. And a big thank you to my right hand individual over here, Assistant City Manager Jason Knutt, for helping me through my first process. So thank you to all of my colleagues. So what you have before you today is the proposed 2223 balanced budget. This budget represents what I would consider a flat allocation. There is only a 7% increase in expenditures, which reflects current MOUs and some staff training, which we believe is critical for ongoing retention. So for the last several months, each of you have consistently heard the theme getting back to basics. For several years, staff has focused much of their attention on emergencies and emergency recovery. While staff has performed each of these tasks to the level of excellence, which I don't think many people can hold a candle to, we must now pivot back to what I consider basic services. That is creating parks that allow people to recreate, maintaining and investing in our infrastructure, buildings, roads, sewers and garages, just to name a few. Investing in economic development, creating consistent processes for the development community, creating processes and funding mechanisms that allow turnkey solutions for successful staff implementation, such as the short-term rental ordinance. Giving public safety the tools and support needed to provide a safe community for individuals who live, work and recreate in the city and truly becoming a people's government. And last but not least, a focus on recruitment and retention so that we are the employer of choice. Submitting a structurally balanced budget takes into account the first tenant of this organization, physical stability. While I would like to have given more funding and more resources to each department, it would only add to the structural imbalance that is expected in future years. Once one-time funding funds are expended for programs such as in response, the general fund must absorb and sustain these expenditures. In addition, we must continue to be mindful of one-time expenses that reflect negatively on our rating agencies. Communicating with our rating agencies that we are prepared to fully fund these valuable programs will continue to shine a favorable light on the city. Today, each department will provide an overview of its budget, core services, accomplishments and challenges. We welcome any feedback and suggestions for inclusion into the final budget. At this time, I would like to turn this over to our CFO, Alan Alton. Thank you. Thanks very much. So we'll kick off this session. I'll go through the agenda here. We have some opening comments. Not only did you just heard from the city manager, I'll have some in a few minutes. And then Veronica Connor, our budget and financial analysis manager, will take us through the slides showing an overview of the city budget, the general fund budget in particular, and the summary of city-wide staff. And then we'll move on to the department budgets where those departments will walk through a high-level review of their program budget, identifying major changes to budget compared to the prior year, and then discuss their accomplishments and challenges going forward. So at today's meeting, we'll go through the administrative department, which includes the city council, city manager, the city attorney's office, communications and intergovernmental relations, human resources, finance, and the non-departmental department. Next slide, please. On day two, we will go through the remainder of the departments that are shown here and then conclude the day with our capital improvement program budget. So in past years, and I think it may work best for the flow of the presentation would be for the council to, as we finish each department, or in terms of the overall budget, if there's natural breaks to have the questions there, but definitely at the end of each department presentation, if council would like to ask questions at that point, that would probably work best. And next slide. So, and we'll go the next one and the next one. There we go. So, as I kick off here, a quick note on the process. So the city begin its budget process around November, December, when we start developing the assumption to make up our salaries and benefits for all city employees. During that time, we also work to finalize our cost allocation plan, IT rates, fleet rates, and all of those other things that go into each departmental budget. Budget staff, refine revenue estimates for the general fund. And at that point, we get a good sense of what we can afford for the upcoming year. For this year, we made a concerted effort to build back training and other support budgets that were cut over the past two years. These are typically small dollar items, but they go a long way to helping staff development. The departments develop the remainder of their budget, basically what's needed to maintain their current operations. In addition, departments submit additional needs requests should they have any. These are typically larger dollar items, typically position requests to be most anything. And they allow the department to either enhance existing operations or restore larger cuts that occurred in the past. The city manager, assistant city manager, budget team, and representatives from human resources department meet with each department. Over a several week period to review their requests and ultimately finalize the budget you have reporting now. So over the last two budget cycles, the data leads have been challenged. Budgetarily, we were uncertain how hard the general fund and other funds would be impacted by the pandemic and how long we could sustain losses while still providing high level service to the community. Fortunately, in most cases, revenue impact to the general fund will minimal. And as we begin to open back up fully, we can start planning our operations with a sense of normalcy and you'll hear many examples of that over today and tomorrow. But there's still uncertainty as we emerge from the pandemic, including what the long term economics effect economic effects could be to not only the general funds on all budgets. In the general fund, we're moving away from the conservative posture of the last two years and proposing revenues that lean toward a most likely scenario. In February, we adjusted our revenue budget to be more reflective of how revenues ended the prior fiscal year and in line with trends we were seeing at the time. Moving into this budget, we continue these trends sales and property taxes continue to be strong. The tourism industry continues to rebound and is reflective and increases in transient or to keep. These for planning and economic development permits, especially the building related. These are coming in strong and in some cases higher than our expectation. So, while uncomfortable with our revenue estimates that we're proposing for you today, I do think that they're at the limit of what we can reasonably expect. While these items are positive and allow us to propose a balanced budget, while still adding some ongoing cost. We do echo the city manager's comment in that this reflects what we can actually afford. There were a lot of additional needs that were not approved to move forward because doing so would have put about the budget out of balance. So as I conclude my comments, I want to touch on a couple of things where we're headed moving forward. The council set aside PG&E funds with the goal of providing fiscal stability to the general fund and staff working with the long term financial policy and audit committee have been working on key strategies to develop that ability. One of which is a report item that's later on this agenda that proposes the establishment of a trust to pre-fund our CalPERS pension obligation, specifically the unfunded liability. Another, which is addressed as a part of this budget, and Veronica will hit on this a little bit later, will move Fire Department large capital equipment items into the city's equipment replacement fund. And I highlight this because it's significant in that it will allow us to not only set aside funds on a agreed upon replacement schedule, but it also will show within the budget what the full cost of that operation is. In the past, we would come to you as equipment was ready to go out of service and then ask for funds. This is a more proactive approach, and I think it's a more transparent approach. And finally, we know that we have significant deferred maintenance in general, but specifically to city facilities. We're currently assessing and prioritizing the needs and we'll work with the LTFPA in the summer on a plan that to address this using one-time funds should they exist and when we close the book each year. So unless there are any other questions at this time, I'll turn it over to Veronica Connor, our budget and financial analysis manager to view her portion of this slide. I really appreciate that, Alan, and really fast before we go to Veronica. If you are listening at home and interested in providing comment on today's budget, you do have the opportunity to both email the council, as well as once all of the presentations are done tomorrow, we'll take public comment from folks responding back to what they heard before the council ends up making any decisions. Go ahead, Veronica. Okay, thank you. Can we please go to the next slide? So we will start out with our citywide budget overview and we'll go to the next slide, please. So I'd like to start out this discussion by starting at a very high level. We start looking at citywide. This includes all funds, all entities, and we will gradually narrow in then down to the general fund and to departments. So looking at our citywide revenues by fund, this top line is our general fund and we're showing you the year over year change. We're going to have the opportunity to dive into the general fund in a lot of detail in the next section. So I'm not going to touch on these changes here. So our enterprise fund line item, next one down, this includes all of our enterprise funds such as water, wastewater, some regional, this also includes golf course and parking, and the revenues increased by just about 4.2%. Special revenue funds, this includes our measure O fund, gas tax, those are the two primary ones. This increase of about 25.9% can mostly be attributed to some one time revenue that we're recognizing in an ARPA fund there. So we're obviously getting in ARPA funds for special things that Council has appropriated. Within this budget, we are budgeting the transfer to the homeless services fund of about 3.3 million. So to budget that transfer, we also have to budget the 3.3 million in revenue. So that's contributing to that $7.1 million increase in our special revenue funds. I'm sorry, $7.9 million increase. And also an increase in gas tax and an increase in our measure O special revenue funds of about a million and a half each, which are contributing to that variance. Other funds, this is our special tax districts as well as our debt service and pooled investment funds. The housing authority, which is its own entity, this experience to $7.1 million year over year increase due to some additional grant funds, there's going to be more of an opportunity to talk about that in the housing and community services section of this presentation. And then finally our successor agency, which is also its own entity, this remains flat in revenue. So these are our citywide expenditures, the other half of the equation. And this is a visual to show everyone that our general fund is 40% of our citywide expenditures. It's the most substantial portion, followed by the operating portion of our enterprise funds. CIP comes out to be about 14%. So enterprise CIP is 8% and non-enterprise CIP is 6%. The housing authority is about 11% of our citywide operations. And then special revenue funds, other funds in the successor agency are just those tiny little pie wedges. And next slide please. So this table shows a lot more detail on that previous pie chart. These are the same numbers, but just broken out into a financial table to show you some year over year changes. Our general fund expenditures this year are at 190.3 million. And again, we're going to get into more detail in the next section. So we'll save that discussion for a little later. Our enterprise operating expenditures increased by about 6.4%. And the majority of that since this is the operating size of enterprise funds are salaries and benefits, just the costs of people. Our enterprise CIP, this line item sticks out with a dramatic change of a negative 28.5 million. You may recall that last year in fiscal year 21-22, the water department appropriated about $30 million of bond funding for their UV disinfection project at the Laguna treatment plant. That was a one-time thing last year so that expenditure is not being appropriated again in 22-23, which is why we're seeing that big year over year decrease. Non-enterprise CIP increased by about 22%. And again, the CIP portion of this presentation is going to get into more detail on that. Our special revenue fund expenditures remain flat. Our other funds, which again is debt service and special tax districts, those remain flat. Housing authority had an increase in expenditures. As I mentioned, a couple slides back, they had some grant funding this year, so they had to appropriate the expenditure side as well. And they'll have the opportunity to discuss more of that in the coming sections. And our successor agency remained flat as well. So the total expenditure budget citywide is $478.8 million. This is pretty flat at only an increase of 0.8%. But when you back out CIP and that large reduction of costs due to that water project last year, that's line items second to the bottom line item that says operations net of CIP. You can see that citywide we are increasing at about 7% or 26.8 million. And CIP only is showing a reduction in appropriations year over year. One thing to note a couple slides back when we were showing revenue, our revenues did total $467 million. And here we're showing expenditures of $478.8 million. So citywide our expenditures do exceed our revenues. And that's mostly due to our enterprise funds. The water funds and our parking funds are all planning to use some spending of their reserves this year. So their expenditures are exceeding their revenues. And we will again hear more from the enterprise funds in the department budget sections. So that concludes our overview of the citywide budget we'll be looking in much more detail into the general fund budget. If I can take any questions on the citywide budget I'm happy to answer them now before we move forward. Otherwise we'll go on to the next slide please. Next question we're going to take a deep dive into our general fund budget for fiscal year 2223. We'll go to next slide. Thank you. So just a high level look at our budget this year as the city manager mentioned. We're proposing to you a flat budget this year, which we are excited to do so our total revenues and transfers in our 199.8 million and expenditures and transfers out our 199.8 million so we have a balanced budget. Next slide. So this pie chart is showing you our general fund revenues by category. And we like to show you this to give a visual of what's funding our general fund operations. Sales tax is the largest piece of the pie there at 74.7 million which is about 38%. And sales tax doubles nearly or more than doubles our property tax which is about 34.7 million. And sales tax and property tax we have other taxes at 27.9 million and that piece of the pie includes our transient occupancy tax, cannabis industry tax, franchise fees, real property transfer tax among others, a lot of other smaller little groups in there. And local license fees is a big one at 8% utility users tax at 10.7 million. And then we have these other smaller pieces of the pie there permits fines and charges that's mostly our pet revenues, inner fund charges, recreational recreation revenues, and then our intergovernmental interest and other, which is at 4%. And we're going to take a much more detailed look at these in the next slide please. These categories listed in this first column are the same categories you saw in the previous slide in the pie chart. We're just going to take a more detailed look and kind of walk through these and our assumptions for the current year. So starting at the top property tax. You'll see an increase of 2.8 million or 8.7%. And as CFO Alan Alton mentioned in his comments, we came back to council back in February and appropriated additional revenue. So this 2122 adopted budget column, when this was these numbers were being put together this time last year we're in the midst of a pandemic. And as the year has gone on we discovered that a lot of these numbers were too conservative and those conservative growth estimates that we were anticipating just to materialize. So this is the mid year and we appropriated additional property tax. So while we're showing a year over year change of adopted budget to propose budget of 8.7%. If you were to include what we appropriated mid year that's really we're projecting growth rate of more like 4%. So it's as Alan mentioned earlier, it is a growth rate that we are comfortable with and we're doing our best to be aggressive and realistic we want these revenue numbers to really support the operations of the general community. But we got about as high as we could while still being comfortable we did not want to be too aggressive or too careless and we really do it did spend a lot of time looking at past trends and where we think it's going to go and this is just about where we think it's as high as we can get still being comfortable. The sales tax also shows a substantial increase at 19.6% or 12.2 million. And this is also one that we appropriated additional funds at mid year. So year over year, it is a substantial change. But when you include that mid year appropriation figure, it's a total change of about 5.4% as opposed to 19.6%. So the sales tax growth rate is in line with what our consultants believe is the most likely scenario. This is not aggressive nor conservative and we do think this is right on target. Our UUT shows a modest increase our vehicle license fees these tend to grow with our property tax so we're expecting about an increase in about the 4.7% range. Other taxes this includes our franchise fees, cannabis taxes, RPTT. So those are growing as well by 11.6%. The largest growth rate in this category is probably TOT with the short term rental fee we're seeing some substantial growth in that area and we're also seeing some substantial growth in RPTT. And we'll have a chance to get into RPTT a few slides down because I know that's a topic that we talk about usually during budget. Moving down the line. Permits, fines and charges these are our PED revenues. They are contributing to the bulk of that .6 million dollar increase there. Interfund charges has a decrease of $4 million or 28%. And this brings up a topic that we're going to be touching on again and again as the presentation continues. So mid year, we had a move of water billing that came out of the general fund and into the water enterprise fund. This happened back in January. So the operations that used to take place in finance now take place in the water department. So the water department prior to taking on this operation used to pay the general fund for these expenditures. So when the function moved to the enterprise funds, we also had to reduce the revenue. So while you see a reduction of $4 million in revenue, there's also going to be a reduction of expenditures on the expenditure side. And that other $10 million in there, that is the revenue that the general fund collects from other departments for overhead charges from non-general fund departments. Recreation revenues are expecting an increase of about 12.6% in a post COVID summer. They're looking at opening up most of their programs, which is exciting to see. And then finally, in our governmental interest and other, we do have an increase in this light item for a one time revenue of a grant that we are going to be receiving this year. Back in October, Council had an item regarding the Highway 101 pedestrian over crossing a grant that our public works will be, they were applying for. So while the grant was approved, the actual revenue and expenditure were not appropriated at that time. So we're going to be doing it with the annual budget here. So there's a one time revenue amount in that 8.4 million of $3 million and that's what's contributing to that increase. So total revenues are 197.5 million of what we're proposing for 2223. And we'll go to the next slide please. So in addition to revenues, the general fund also has money transferred in from other funds. We get about 2.13 million from special revenue funds. This is the operational component of our gas tax and measure M funding. We get a small amount from our special assessment funds. This is to pay some administrative costs. And also a small amount from our parking fund to this is the parking funds contribution for the downtown benefit downtown community benefit district excuse me. And there have been no year over year changes to these items. And next slide please. So switching gears to general fund expenditures. This is a visual showing you where all of our general fund expenditures go and the obvious message on this slide is that salaries and benefits are the bulk of our expenditures. We have numerous categories of our services and supplies, but with departments such as police and fire and administration, our general fund operations are very heavy in personnel costs. So next slide please. So these categories on the left hand side, these are the categories that you just saw on the pie chart on the previous slide. And we're showing you the year over year changes occurring in the general fund. So salaries and benefits are top two line items as I mentioned these are by far the most substantial costs in the general fund. Salaries increased year over year by 2.9 million or 3.4%, which is a little misleading because we do have between these two years. Cost of living adjustments that occurred for our labor agreements. And we also have the addition of one full time equivalent within the general fund. So while there was a net increase of one FTE, there was a lot of movement of FTEs that happened behind the scenes and we'll also get into that in the future section. But the point I want to make here is that what happened is several good handful of FTEs within the general fund were able to be funded by outside funding sources such as one time funds for ARPA and PG&E or grant funds. So while we actually increased in FTEs, our mix of staffing, the cost was favorable. So this increase of 2.9 million is less than we might expect to see year over year. And in our benefits line item, same thing with a lot of staff getting outside funding to support some positions. It didn't increase quite as much as we would expect, but most of that 3.3 million we can attribute to our PERS unfunded liability. So moving down the line, professional services did decrease in the general fund by 1.3 million. We can pinpoint what that mostly was due to in 21-22. We had a one time professional services expenditure of a million dollars in response. The general fund kicked in I believe a million or 1.1 million to the police department. In 22-23 we did not repeat that budgeted expenditure because ARPA will be funding that for the next year. Vehicle expenses increased by a million dollars or 18.5%. You're going to be hearing about this in many departments. So we're trying to get that repair fund up to a healthy operating amount. So departments across the board experienced increases from those rates. Operational supplies stayed pretty flat at an increase of 0.2 million or 6.2%. Utilities, this is your gas and electricity costs. Which are going up across the board. Information technology, this is the cost that our IT department disseminates to all other departments. And the increase there at 5.5% can mostly be attributed to salaries and benefits increases of the IT staff. Liability and property insurance increased substantially. The city is not alone in this. This is across the whole industry. Everybody's seeing spikes in liability and property insurance. This also includes fire and earthquake. And in our HR section, our HR and risk management department will be able to speak to you some more about these changes. Other miscellaneous went up by 15%. This can mostly be traced back to a couple increases in our leases. The fire department is leasing to fire engines. And the police department has a radio tower lease. So those were new expenditures this year. Capital outlay. There is a small portion of capital outlay within the general fund. This remained flat. And finally our O&M projects to decrease this year by about half a million dollars. So overall, our general fund expenditures are 190.3 million. And that's about a 4.3% increase overall. We can go to the next slide, please. Okay, so general fund expenditures by department. This pie chart represents that 193.190.3 million once more. But instead of breaking it out by categories, we've broken it out by departments. So the general fund department costs are here. Obviously police and fire are the two biggest pieces. We have a very tiny piece for water and a very tiny piece for housing and community services because while those departments are actually more substantial, their general fund funded portions are very small. And then the remainder of the department's TPW, recreation and community engagement, non-departmental administration and PED make up the rest. Administration consists of city council, city manager, city attorney, finance, HR, and communications and intergovernmental relations. And next slide, please. So this table shows the same categories that we just saw in the previous pie chart. And it shows the year over year change of all the departments. And I'm not going to get into too much detail on this because the departments will have an opportunity to speak to you about their general fund changes and their overall department budgets. But the overall picture we want to show you here is of that 7.8 million dollar increase year over year total in the general fund, how it's distributed amongst the departments. And considering the size of the departments and it's distributed pretty evenly, housing and community services and water are held flat because they're so small. Administration, you're going to see that decrease that is once again that stems from the water billing move. So finance experienced a substantial reduction in their expenditures because that water billing function without the water enterprise funds. And next slide, please. So in addition to expenditures, the general fund also transfers out funds so transfers out and expenditures make up the debit side of our equation here. So year over year, we've transferred out a small amount of the art and Lou. Homeless services. We last year transferred out 3.64 to help fund the homeless services fund. This year we are transferring out $0 because the ARPA special revenue fund is picking up that expenditure for the next two and a half years. Courthouse Square is our lease payment. CIP. We do transfer some funds out for CIP projects that we'll get into more in the CIP section. But as I mentioned earlier, there is also a one time rants that we're receding in the general fund for the Highway 101 over crossing. So then we are transferring that out to the CIP fund as well. So that's why you're seeing that large increase the parking fund. This is a portion of parking violation revenue comes into the general fund. And we receive it in the general fund. And then we transfer it out to the parking fund to pay for their parking enforcement operations. Transit funds we transfer out a small amount to pay for the free rides for veterans program. And then those two bottom lines represent real property transfer tax and the amount that the general fund transfers out to fund fair housing and affordable housing, which we will talk about more on the next slide. Please. So real property transfer tax. The history with this a little history for you is the general fund receives real property transfer tax. And council has a policy that every year we transfer out a certain amount to fund affordable housing and homeless services. Right now we're at 45%. So 45% of our RPTT is being transferred out next year it will be 50%. It's going to continue at 5% annually thereafter until we reach 100%. So as I've mentioned this year, ARPA funding is going to be funding the homeless services operations. So all of that RPTT instead of being split between homeless services and affordable housing, it's all going to affordable housing this year. So next slide please. So this graph shows the breakdown of general fund RPTT transferred out to affordable housing and fair housing and homeless services. That final bar on the right there fiscal year 2223 of 45%. Our overall budget of RPTT this year is 5 million. So 45% of that which is 2.25 million is being transferred out. And the breakdown that we show here is that little blue line down at the bottom 50,000 of that is going to fair housing and 2.2 million is going to affordable housing. So in the previous years you could see in the green section a good amount of our RPTT was going to fund homeless services, but this year instead it's all going to affordable housing and fair housing. One picture that this graph does not totally capture is that the general fund would also fund a portion of homeless services on top of RPTT so that green section is not the total picture of what the homeless services budget is it's much larger than that but this is the portion that our RPTT funds. So next slide please. So switching gears to another main topic in the general fund as Alan Alton mentioned earlier we have been working on a fiscal policy for fire equipment replacement. So the fire department and the finance department and fleet services all work together to develop a schedule for fires capital replacement or fires capital equipment that was not in the replacement fund we're working on getting that into the replacement fund. So the initial funding for the first year of doing that to get some of these assets up to speed is going to equal about 2.7 million, and that is going to be appropriated from fiscal stability funds. So it's important to note that you're not going to see that 2.7 million anywhere in this budget it's not part of the annual budget you won't see it in the fire department section. We are not appropriating it as part of that 190.3 total general fund expenditures it's coming out of general fund reserves that have been set aside specifically for this purpose. However, next year and ongoing it will be part of our annual budget and ongoing it will be about within $1.2 million beginning in fiscal year 2324. And we have built this into our long range financial forecast so if we could please go to the next slide. We will take a look at our forecast. So this slide gives us a few years outlook and we start in fiscal year 2223 where we show a balanced budget. In fiscal year 2324, we do start to get out of balance a little bit because we do have a cost of living adjustment budgeted for our labor unions, our labor contracts that are in place currently. In fiscal year 2425 we start to get back in balance because we do not have any cost assumptions in the out years for any labor negotiations. In fiscal year 2526 and 2627 we do start to get out of balance again due to one time funding expiring for both our homeless services so the general fund is going to need to start picking that cost up again, as well as in response. So the overall message here is that the general fund is not terribly out of balance in the out years. It's not looking as bleak as other forecasts that we've seen. However, in the out years looking forward, if there are additional things that the general fund will need to fund, there isn't excess funding there. We're going to have to get creative with our funding strategies. And next slide please. So then finally we always like to show our general fund baseline measure O calculations so per the measure O ordinance, our general fund departments for police fire and violence prevention have to exceed a certain percentage of the general fund expenditure budget. In this year, all departments are in good shape. Police department is over budget by 3.2 million fire department is over that baseline budget by 4.6 million and violence prevention is over the baseline amount by almost 11,000. The special revenue funds were presented to the measure of subcommittee back in April and voted on and approved for those budgets. So that's my general fund overview. We're going to be talking about the staffing summary next, but I'd be happy to answer any questions on the general fund overview before moving on. Council look to see if there are any questions. Any from our colleagues on zoom council member McDonald. I have a question under the general fund on the five year forecast. I'm assuming you made the assumptions of growth in all our tax revenue. And that will still be what the deficit is is 3.4 by 2627 but I'm wondering if you've appropriated the increase like we've seen in this year and then that doesn't account for any potential grants or anything that we could receive because we don't know what I'm wondering more on the revenue side. How you did those projections. Yes, we did include all growth rates for each different revenue category. We gave an in depth look and we grew out property tax at one rate and sales tax at one rate and other taxes at other rates. So one of the sales taxes we went with our consultant amounts for a most likely scenario. Property tax we went with past trends and we and looking at we're expecting it to grow a little more aggressively in the first two years and then kind of even out a little so we did give this a very in depth look to come up with these revenue projections. We don't have any assumptions in there for grants that could be secured. But we are growing out our expenditures at what we believe are reasonable costs and for anything that is known. And then just as a follow up and items coming before us tonight on a trust account that's going to be for consideration. Has that also been accounted for as far as savings in the general fund, potentially. So we're going to take the amount we went to debt service and instead put into the trust so it won't be putting an extra burden on the general fund. Okay, thanks. Looking for other questions. None. Okay, let's keep moving. All right, so next slide please. We will now take a look at the staffing summary for all city departments. And next slide. So we show you an overview of our authorized FTE staffing summary and the proposed funding for all city departments. So we're going to take the amount we went to debt service and instead put into the trust so it won't be putting an extra burden on the general fund. Okay, thanks. Looking for other questions. None. Okay, let's keep moving. Okay, so the next slide please. So we have the FTE staffing summary and the proposed changes for that come along with this current fiscal year budget. City Attorney's Office and our communications and intergovernmental relations office are remaining flat. Most other departments are receiving increases of positions. I'm going to get into more detail in those in the next few slides. Finance might stick out of showing a loss of 27 FTEs. We're looking at an increase of 31.5 FTEs. And we will get into these details in the next few slides. Next slide. So we've broken out a lot of our staffing changes between the FTE and the FTE. So we're going to take a look at the total overall increases of FTEs and all departments. And water sticks out as having 27 additional FTEs. But again, that's that water billing move. So that's the large one. Overall city wide, we're looking at an increase of 31.5 FTEs. And we're looking at an increase of 21.2 FTEs. So we're looking at a lot of our staffing changes between what's affecting the general fund and what is affecting other enterprise and other funds. So these are all of our general fund organizational and position change detail. There's a lot of detail here. So I'll do my best to be thorough but not drown us in all the information. The pet and TPW departments, so they weren't straight ads. They were movements from one department to another. And finance as discussed, 27 FTEs left the general fund to go to water billing. The fire department mid year had several positions added with in response. They had six limited term firefighters that have since been classified to just be straight paramedics. and they also added a fire captain and those all receive funding through the in response program so the general fund is not paying for those but with this annual budget within the general fund we did add two firefighters human resources had an HR analyst added mid-year next slide please and housing and community services within their general fund portion they did eliminate a deputy director of housing and community services this position had been vacant for a couple years and was no longer needed and then they added a housing and community services technician this is in the homeless services fund so it's not funded by the general fund at the moment because ARPA is funding the homeless services fund but eventually it will pick back up with general fund funding planning and economic development they had their assistant city manager that was previously in that department moved over to the city manager as we talked about on the previous slide and at mid-year they had a number of positions added all of their planners here their senior planner they're I'm sorry they're two senior planners and their city planner are funded by one time funding and grants their development review coordinators civil engineering tech and building plans examiner were added mid-year as well as restoring the director of planning and economic developments they had a total fte change of 6.0 fte's next slide please in the police department we're able to add three police officers with this year's budget recreation and community engagement had a limited term community outreach specialist and this is funded by PG&E funds for the community empowerment plan and DEI spaces and they also added a recreation specialist that's limited term this is funded by a special revenue fund within TPW we added a director of transportation and public works at mid-year and their assistant city manager that was previously in that department moved over to the city manager's office and then we also moved the real estate services function from the water department into TPW this is kind of a confusing one where real estate used to sit in water but they charged most of their time out to the general fund or to projects and it just didn't really serve the function of the program well to have them in the water enterprise fund it didn't make sense we didn't feel it was the most transparent so we've moved that program into TPW where they are now still continuing to be funded by the general fund this is mostly a budget neutral move and then also charge the necessary time out to projects that they work on and next slide please and then finally within the general fund portion of the water department a senior admin assistant was moved from the enterprise fund into their general fund funded part of their department which is their stormwater department and this was also a budget neutral move to the general fund because while this position used to be in the enterprise fund they were funded by the general fund so this was kind of an administrative cleanup so overall the general fund had one FTE edition and next slide please so then these positions are going to summarize the non-general fund position changes so within the housing authority component of housing and community services we added a limited term hcs technician that occurred at mid-year a regular full-time housing and services housing and community services technician and a program specialist within the it fund we have a limited term media technician this is a three-year position that was also funded by one-time funding and then within the water enterprise funds we have added a wastewater operator a senior admin assistant that we talked about on the previous fund was moved to the general fund they had the increase of the water billing function which was 27 people that again they previously paid for but now they just have it under their own umbrella they added two utility systems operators and then they increased they had a civil engineering technician that was a half-time position that they are increasing to be a full-time position so that's why we're seeing an increase of a 0.5 FTE next slide please and we see the move here of real estate services as I talked about a couple slides back in TPW those four FTEs are coming out of water into TPW and then finally they added a supervising lab analyst so the total water change was 26.5 people within their enterprise funds and so the total non-general fund position changes are 30.5 FTEs and next slide please so in addition to all these position additions and deletions the human resources department has reviewed a number of reclassification requests for vacant positions they do these reviews on behalf of the departments throughout the city so the recommendations are listed below for the general fund internal service funds and enterprise funds several of these reclassifications were approved at mid-year as noted I'm not going to read through them all but they are here for your information and this concludes our discussion of the staffing summary so I'm happy to take any questions on position changes if anyone has any questions from council I have just sort of one general question I think it's for Alan we had previously done a staffing study and an analysis of what our forecasted revenues and expenditures should be and one of the data points was to try to keep new positions to about two per year that obviously has changed in our analysis here presenting a balanced budget and an investment in areas where we see a difference can you talk about what variables have changed and why we feel more comfortable adding more positions so I'll do my best you are you're mentioning a study that I am vaguely familiar with so I'm going to try to dust off a little bit of rust as I talk but I guess I would put it this way we're what we are doing is looking at and again when when we budget for positions while we budget them coming in at a at a certain either a a certain range or a certain part within there the various steps that a position might have we do anticipate that that we would be fully staffed and so if we look at things from a fully staffed model and line that up with with our revenues what you get is where we are right now without budget so if we've come out in the past and said that we needed to grow positions by by two a year we would have to have the revenue to be able to support that and I just I would I would have to go back and look at that study to try to to try to understand their methodology to do it now because quite frankly where we're out right now as we've mentioned before we've tried to add revenue or or estimate our revenue in what would be most likely to be able to provide the services that we can and and at at some point you just can't go anywhere beyond that and you have to look at where you are from an expenditure standpoint and I think we're at balance you can tell where we where we are so I don't under where we are right now I don't see that it's possible to add to position a year what I would suggest that we would do is look at our existing operation and see how we can become a little bit more efficient and get the most use out of the positions that we currently have where we fall within budget rather than arbitrarily adding Mayor Rogers let me see if I can help Mr. Alton with that question while I actually have not reviewed the study as I look at the positions that have been added so when we look at fire a lot of these are not general funded positions so when we look at fire most of these positions were added from one-time funds from in response so that was one-time funds when I look at housing and community services those are positions that are paid for by HUD from the money that we receive and pet those expenses should be offset it offset from revenue and one of the things that we would have to continue to look at moving forward is do we need the positions based off the development and the housing that is going to continue to that we're going to continue to see in the city so two is probably accurate for any city especially if you're talking about general funds but as I look at what we have added for this year a lot of it most of it's non-general fund but we need to be mindful of the positions that have been added from one-time funding and they will need to be rolled up into the general fund at some point all right thank you councilmember mcdonald that was actually my question is if we had a number of staff that supported by one-time money or a non-general fund or grant money so that we do have somewhat of a projection on if those monies are to go away um you know where would we be at or is that part of that projection on the deficit do we not count those funds coming in to fund those positions i'm just curious if that's something you may know so positions within in response those are for example those fire positions we do anticipate and built into that five-year forecast that the general fund would be picking up the cost for those other limited term positions such as recreation had a couple and ped had a couple planner positions that are grant funded or funded with one-time funds we specifically make those limited term and intend that when the funding is gone those positions will also be eliminated any other questions okay okay well thank you that concludes our citywide overview and our staffing summary and we are now going to narrow in a little more on the department enterprise funds next slide please so today our schedule is to get you through the administrative departments city council city manager city attorney communications human resources financing non-departmental next slide please and then tomorrow we will start the day off with it work our way through the remainder of the departments and conclude with the capital improvement program and next slide so you're going to continue to hear from me for just a little while longer i'll take you through the department budgets for both city council and city manager and then at that point i will kick it over to the departments and you'll be hearing from them individually to present their own budgets so we'll start with the city council proposed budget for fiscal year 22 23 so city council is 100 funded by the general fund there's three programs within city council events is our community promotions which has been on hold for the last couple years with covid but is expected to start back up again in fiscal year 22 23 and the budget for this next fiscal year is 105 000 no change from the previous fiscal year administration costs show a decrease this is primarily driven by one-time funding last year in 21 22 for redistricting costs which do not need to be repeated in 22 23 but we are including in that administration budget a six thousand dollar amount for the sonoma county mayor and council members association part-time clerk so that's a new funding item and then the elections program we see a substantial increase because we are anticipating it's going to be an election year so we have costs that go along with putting ballots up as well as printing costs and other professional services associated with that for an overall change of 410 000 and next slide please so as discussed the major increases in the general fund are for the elections we also have that year over year decrease in administration for the redistricting costs that are not budgeted in 22 23 council members salaries remain flat this year there was an increase of 18 000 dollars in council members benefits which is about 15 percent and it's represents many small increases on all the different benefit categories and this is a pretty nominal increase but it does stand out in city council's budget because it is one of the smaller departments but it is representative of normal cost increases that we would expect to see in benefits and that concludes the city council budget if I have can take any questions on city council I'm happy to do so before moving into city manager I'm seeing no hands next slide please so the next department up is the city manager's office the proposed budget for fiscal year 22 23 and next slide so the city manager's office has two main funding sources one is the general fund which funds all the operations and the other is the homeless shelter operations this is a special revenue fund that resides in the city manager's office so year over year there's been a substantial increase in the general fund for the cmo but as we discussed in previous slides the two assistant city managers were moved from tpw and ped into the city manager's office along with their support costs so we're seeing this substantial increase but their corresponding decreases in the other departments that's mostly what's driving that change and homeless shelter operations while this is not general fund they did receive a year over year decrease and this is due to um in 21 22 we had about 700 000 budgeted for the sam jones hall annex operational costs it's going to be paid for by the um cdbg funds for the next couple of years it will come back into the homeless shelter operations fund in future years but in 22 23 that funding amount is not or that expenditure amount is not in there next slide please this gives you another look at the city manager's office budget instead of by fund we're splitting it up by program so you can see that the city clerk budget stayed flat homeless services again we're seeing that major decrease for the sam jones hall annexation costs that moved out to a different fund for the year the general administration increased but again that's due to those acms moving in and the cip and onem projects increased and that is also um the homeless services amount so there was an increase in the sam jones hall roof project cip costs next slide please so the major general fund changes that we like to highlight we've touched on these already most of them there was the addition of two fte's assistant city managers that were moved from the pet and tpw departments so homeless services while it sits in city manager the people that work in homeless services actually live in housing and community services it's a little confusing but we like to put this bullet point here because we show the funding for addition of this person within the city manager's office there was an addition of 1.0 fte hcs technician within the housing and community services department and it is paid for 100 percent by the homeless services fund here in the city manager's office so while it's not an fte increased cmo that funding source is paying for it and then finally just to note again that that homeless services budget that we showed on the previous slide this year is being paid for by the arpa fund not by the general fund in the next two and a half year for fiscal year 22 23 23 24 and then part of 24 25 there's going to be arpa funds funding that operation and next slide please the city manager's office major accomplishments for the previous year is that they successfully opened city hall and offices during covid they have appointed the assistant city manager chief financial officer and chief information officer the city manager's office has held two council goal setting sessions in august 2021 and february 2022 as well as an executive retreat in november and they also launched recruitment for police chief chief communications officer and assistant city manager and next slide please so challenges facing the city manager's office will be recruitment and retention for all city departments which is a theme that has been touched on already by the city manager as well as addressing outdated infrastructure and that concludes the city manager's office budget section so we're happy to take any questions for the cmo budget before we move on to the next department any questions from council okay let's keep moving all right next slide so i'm happy to turn it over here to sue gallagher our city attorney she will be presenting her department's budget a good afternoon mayor and council members um sue gallagher city attorney um presenting the budget for our office uh city attorney's office our budget is 100 percent general fund um and this year 2022 23 it is essentially flat less than a 2 percent change from from last year the only if we i'm sorry move to the next slide and now we can go to the next slide the only um addition is very small um 9500 dollars in training services and supply this is restoring us to pre-pandemic levels next slide it has been a very busy year uh this past year and i'll mention just a few of our accomplishments um we led the charter review committee through a careful consideration of a wide range of proposals for revisions to city governance i will note that tomorrow the committee will consider its draft final report to council setting forth the committee's findings and recommendations we do anticipate that that will be the committee's last meeting and then we'll be moving over to work with you the council as that moves forward second the city attorney's office has also worked very closely with the city clerk to guide what was a very successful redistricting process for our council districts following the 2020 federal census a city attorney's office has also been integral in the negotiation of mo use with our city labor groups and that provided really some significant cost savings by bringing that work in house that's the first time that we've done that and it was it went very well and finally we've had great success this past year in defending some very significant lawsuits and resolving litigation um uh matters on terms really most favorable to the city so we're proud of those accomplishments and others next slide what are our challenges um primarily uh we're we're gonna it's a resource challenge we do anticipate that 2022 elections will require significant legal resources we'll guide um completion of the charter review process again as it comes to council we'll be preparing charter ballot measures we'll be providing support for four council member elections again working closely with the city clerk uh and we anticipate at least one additional tax measure that we'll be working with the city team on um we'll also continue to face ongoing pull of the diverse legal needs of the department's city wide um taking us in a variety of directions in support of both essential service city services uh as well as a wide range of new uh and expanding programs policies and initiatives our workloads are increasing significantly and as you hear of the various departments from the various departments this afternoon as to their efforts and their challenges uh know that our office our our attorneys will be working alongside in support um we of course are a service department so we are responsive to the needs of our clients and i'm happy to answer any questions any questions for the city attorney seeing none let's move on then to our communication in intergovernmental relations office thank you and i'm happy to introduce alexa papa will be taking you through this portion good afternoon mayor rogers and council members as mentioned i'm alexa papa well and the interim chief communications officer and today i present to you an overview of the communications and intergovernmental relations office proposed budget for next year um next five please for awareness the communications and intergovernmental relations office also known as zero is a centralized point for public communications supporting the dissemination of public information press releases outreach and marketing and supportive programs for departments across the city as well as coordinating the city's interests in key state and federal government activities and funding opportunities we are proposing a relatively flat year-over-year budget of roughly 1.4 million with an increase of 65 000 over the prior year budget this change is mostly attributed to increases in salaries and benefits next slide please um as for the changes to the general fund there is an additional five thousand dollar increase in printing budget to support bilingual materials there is also a 12 000 um dollar increase in staffing for conferences and training next slide please um while the work of zero is largely dependent upon the projects and initiatives of other departments this past year a few of seros accomplishments include the development and implementation of several bilingual outreach plans focused on equitable communications for safe parking pilot program the in-response mental health support team launch new aquatics and senior membership programs housing choice voucher program zero waste foodware ordinance campaign general plan update redistricting short-term rental urgency ordinance district three council member vacancy and there's quite a bit more but let's let's stick with that today we've provided effective emergency communications for the drought achieving the 20 community wide reduction in water use and COVID-19 communications and updates we also were integral in Santa Rosa transits you are free unlimited rides free for youth pilot program campaign resulting in a 13 percent increase in youth ridership over pre-pandemic rider levels additionally our new intergovernmental relations and legislative officer and team secured two federal earmarks for your response and a new emergency operation center and coordinated the adoption of the city's first ever state legislative platform next slide please we at zero and like many other departments have faced a few challenges most notably we have observed a decrease in engagement and attendance to in-person events and meetings we really believe this is compounded by COVID-19 surges and uncertainty with changing health orders and guidance also like other departments you'll hear from we too have a significant vacancy in our department we look forward to the hiring of a permanent chief communications and intergovernmental relations officer who will help refine our department standard operating procedures as we continue to emerge from emergency focused operations and with that thank you that was the conclusion of my presentation and i'm happy to answer any questions you may have about the zero budget at this time all right thank you so much Alexa let's see if there's any questions from council members and i'll look to zoom okay thank you so much let's go on to our human resources budget thank you and i'm just stepping in to introduce Amy Reeve our director of human resources we'll be taking you through the HR mismanagement budget thank you and good afternoon mayor rogers and members of the city council um i am Amy Reeve i'm the director of human resources and i'm pleased to present our proposed budget for the next year today next slide please so overall the HR and risk management budget reflects an increase of five point six percent and i'll cover these increases in greater detail for both the general fund and the risk management funds in the following slides next slide please our general fund budget reflects a 10.2 percent increase and this increase includes the addition of one full i'm sorry next slide please that's great thank you so our general fund budget includes the addition of one full-time HR analyst which was approved with the mid-year budget adjustment an 11 000 increase for city it services a $4 000 increase in advertising this is primarily to combat the great resignation and to provide additional ad plan resources as we attempt to recruit for a number of positions across the city as well as a $6 000 increase in trainings to restore our training and development for HR staff back to a pre-covid baseline next slide please our risk management budget includes a 5.3 percent increase overall this includes a $70 000 increase due to staffing colas a $1.1 million increase for liability insurance premiums a $70 000 increase for CalPERS health insurance premiums a $418 000 increase in workers compensation claims and costs a $162 000 increase in earthquake insurance and a $286 000 increase in property and fire insurance costs next slide please in terms of our department accomplishments this year we did reach multi-year agreements with most labor groups this year um we were able to transition to virtual training platforms to continue to support remote work throughout COVID we are close to completion of the seed collaborative facilitated citywide equity plan we are expected to have a delivery date in the late summer of this year so summer 2022 and we've successfully implemented a paperless open enrollment process which will be launched in the 2022 open enrollment period and is currently being used for employee self-service when we hire new staff finally we completed a citywide safety program assessment and updated the injury and illness prevention plan as well as the COVID-19 prevention program next slide please in terms of challenges over the past year the greatest was likely the great resignation which created staffing turnover we had up to 155 citywide full-time vacancies as well as vacancies both in our HR and risk departments in fiscal year 2020 and 2021 the department accomplished 98 recruitments and as of last month for fiscal year 2021 through 2022 with several months left in the fiscal year we had already accomplished 127 excuse me recruitments just keep in mind this does not include executive level recruitments temporary or seasonal positions additionally a challenge was adhering to changing state regulations and guidelines particularly those associated with the COVID-19 pandemic response and a pent up citywide demand for staff training and development that was largely put on hold during the pandemic additionally we continue to be challenged with leveraging technology solutions to more efficiently and effectively support HR services throughout the city in closing I'm happy to answer any questions that the council may have related to the HR department budget thank you so much Amy let's see if we have any questions from council seeing a lot of approving nods councilmember mcdonald I just had one question around our workers compensation rate I saw that that had increased about 8.8 percent which resulted in about I think a half a million dollar increase is there any way to work with workers comp insurance on a sort of plan to reduce that rate increase over time I know that's something that I've seen done in the past with prior budgets I've worked on but I'm not sure if that's something that we've we've reached out to them to see if there's like safety plans that you can go through or some way to get that rate down so that it doesn't continue to increase that's a great question um I know that our risk manager Dominique Blankey might be on the call and might be better positioned to answer your question but I do know that she regularly has claims review meetings with our third party administrator as well as sits in with our jpa group who we partner with in terms of our workers compensation plans um my understanding is that rates as a whole went up over the past year um there may be some factors related to coveted and other experiences as a whole but I do think that it is a great idea to continue to monitor our claims and see if there's any preventative mechanisms that we can take to ensure that we have lower rates thank you thank you all right let's go on to our finance non-departmental thanks so for the last two departments of the day um I'll be turning it over to our cfo Alan Alton to take you through finance and non-departmental thank you uh next slide please so the finance department is one of those that has a mixture of different funds the two major ones are the general fund portion of it and parking fund but we also have our pool investment fund uh and the um redevelopment agency uh our successor agency uh which is retiring our our RDA obligations redevelopment agency obligations uh next slide please so the um the bulk change that we had and you've heard it mentioned quite a bit before is the movement of water building to uh the water department I guess I might as well uh uh because we have time I will uh at least go into a slight bit of the methodology behind this this is something that that we as staff that's looked at for a while this is a legacy operation that was within the finance department and even before that the administrative services department the water billing function was completely paid for by the water department however the way that our system was set up the finance department actually became kind of a middleman between the water department and water billing over the last couple years this became just a very challenging situation and it made sense to actually have that operation in a much more direct control by the the department from who the funding was actually coming to uh also what this does is it allows for a more clearer picture of what the finance general fund operation is uh and uh conversely also what what the water department operation so instead of of us going and saying well we have general fund of seven million dollars but you need to back out you know three and a half to four million dollars for water billing because it's not a true general fund operation we change that uh in January to be included within this budget so we see some major fluctuations from that but going forward it'll be a much cleaner picture of what the finance department is uh the services we provide uh our increases uh um overall uh are largely due to uh our uh the changes in the MOU costs we also added back uh some conferences and training uh and a little bit of overtime and some of our operations where we cut them in the past couple of years found that what we really needed to do was to add those back uh it was a very small amount about thirty five-ish thousand dollars so next slide please so our changes as I mentioned the water billing and there was a large amount of folks transferred and we added back some uh some training and overtime supplies we'll shoot to the next slide our accomplishments uh so um one of the things that we did that was uh that I think was important and was the charge of this department um was to figure out how we could best use the financial stability funds that the council set aside and and and to develop measures going forward that would put in uh a more fiscally stable general fund and really just operation in general um when you know obviously we focus on the general fund because it's it's the one that that most of the city services are funded through uh we do look at fiscal stability within all funds um the 115 trust again this is something that will come up later on uh was a was a big move for us to to finally get to the finish line as well as as moving the fire equipment into the equipment replacement fund I've talked about it in so did Veronica so um we'll move forward uh from that and you'll hear more about the 115 later on this evening um another thing that kind of gets lost and in uh where we are uh from a finance department when when we deal with the natural disaster be it um the fires uh or the COVID pandemic the recovery element of that is spread through a number of departments but a uh there's a significant amount of work that's done within the finance department uh uh in our both our financial reporting area and and just uh in general uh so one of the things that we worked at and I wanted to to highlight this because it was a significant amount of work to get uh this money back to the city so we set up non-congregate sheltering at the Sandman hotel we incurred about 4.3 million dollars worth of costs uh as a result of doing that and then uh proceeded to uh work with FEMA over probably a year and a half to try to secure those funds it was it took a lot of work not only from my staff but also from uh Scott Alonzo and and and doing uh um the legislative work working with our legislative partners to be able to move this through for whatever reason it was a very um uh it it was it was I used this word a lot it was a very challenging process to move through it took a lot of work but with a large response back so I wanted to make sure that we highlighted that uh next slide please so in terms of challenges uh I I'm kind of I I'm I'm going to throw on my city-wide hat with this and and what we're looking to do is to maintain the balanced general fund budget over the long term um and that is uh we've we've touched upon it uh you can see that we uh from the our long-range forecast uh uh that we uh are balanced this year and we're reasonably balanced in the out years things can can obviously change but there are things that we know will happen going out and we've started to account for that from where we can again when we do a long-range forecast when we're looking in the out years we try to put in our known cost and our best guess of what our escalators are going to be um but a couple of things that we don't have in there is that uh while we do have a COLA increase for 2324 uh we don't have them going in the in the out years because we quite frankly have no idea what that'll be um uh uh you know as as somebody that is sad at the labor tables and have uh been involved with city for a long time I do know that that cost of living increases are things that will happen so it's something that that I would look at and I would say well yeah there's there's most likely going to be one uh I just don't know what it's going to be and so rather than putting in uh an amount in there we don't have that also as we talked about before we have programs that are right now pilot programs using one-time funding but there's a good chance that some of them are going to come back into the general fund um we've already accounted for those that we think that that are our no doubt will come back into the general fund homeless services being one of them and and uh I believe we have in response funds there as well but these are things that we also need to look at so as we're going in the out years and looking at that forecast um while uh we don't want to make radical assumptions on on inflating costs we do know that there are those things that are out there so that's going to mean that we are going to need to find offsetting revenue sources and other ways to pay for those costs going forward we're currently looking at that and we'll continue to look at that going going forward um we are also looking to identify infrastructure uh ways to fund infrastructure projects but we're preserving our cash flow so right now we we are are in a good position to have a rather healthy fund balance but we know that that that can go away uh uh in a very quick manner and where we are also we don't want to be at this point where we're constantly robbing from our fund balance um so what we are looking to do is find ways to instead of of of just depleting cash to look at at reasonable debt funding that we can do so we have uh folks that we talked to that we try to get information from and line up priorities of projects to go forward so that so that we can go down that plate we know that we have a lot of projects that we need to do with the city we're currently we're constantly looking at what other cities are doing and ways that we can that best meet those needs and also uh do it smartly and then finally um specific to the finance department I think one of the biggest challenges that that we're dealing with is with the parking fund so over the last couple years when COVID came up we we did uh um you know we put in some fee waivers to be able to assist uh our our downtown uh businesses by waiving parking fees in addition COVID impacted us uh the parking enterprise uh does operate off of uh uh uh parking revenue that comes in from garages and from leaders and from lots um and uh so that was coming down anyway and then on top of it we were trying to help out our downtown businesses by providing those wee waivers unfortunately what that did was that ate into our uh uh fund balance so we ran deficits last year we ran adept we're we're projecting to run a deficit uh this year we're budgeting for one actually um as we're looking out in the future what we are what we're seeing as of June 30th uh we will uh those those fee waivers expire at June 30th and uh we are not planning on continuing those however what we will be doing what we've been discussing with the DAO and we'll mention to the uh the long-term financial policy not accepted committee uh uh last week or two weeks ago was to uh do a first hour free for all of our garages to try to help provide consistency in our messaging and consistency in our practice uh within our garages right now we have two that that do uh one hour free um and so we're looking to do that for all of them to provide stability in in in messaging and yes it will cost us a little bit of revenue but uh our hope is is that uh with that little bit of investment that we will hopefully be able to grow more revenue in them the revenues that are shown on this fund summary represent uh the um those fee waivers going away but uh it does also include the first hour free it shows the the transfers in the baronic convention earlier that comes in for parking enforcement in that operation and our our expenditures are really just in line with with what our the mo u increases are we add no significant increases in o and m or any other costs other than our salary and benefit increase relative to those mo u increases and our cip expenditures these are for uh um a garage or an elevator repair in one of the garages uh and adding some extra money to um uh resurfacing one of our surface slots and then uh some other ancillary um uh items and then the transfer out there is uh is for our contribution to the um downtown uh business district so with that we come up with about a 1.8 million dollar 1.9 million dollar use of reserves we have that much to deficit we do think looking forward in the next couple years that um that if we are able to get whatever what our average was and our average in in our in our regular recurring revenue um for the parking fund it's about 4.8 million dollars if we can get in that area we can uh along with the transfers that come in we think that we can get to a where we're operationally fine uh we're not running a deficit from an operation standpoint where we come into challenges is that when we try to do future projects so we're identifying those projects that are uh must-haves we have a couple of garages that are outside of their um of their expected life expectancy so we need there are there are things that we need to do there and we need to make some choices or to find different financing methods in order to do those projects to go forward um and so that's what we're looking at we we are we're looking at a five-year view that that that that does see uh uh drawdowns of reserves beyond uh when when we do add in projects uh operationally we think we can go a few more years but that is uh that is as long as we maintain the revenue or or our pre-covid average revenue comes in so those are things that we will continue to keep the council and subcommittees a price that as we move forward uh but those are things that are definitely a challenge that we're we're looking at and and trying to come up with creative ways to solve those issues I think this was the last slide for finance you nope we do have some other ones so these are the things that I mentioned we do have funding for the sale of lot two is uh it's been there that was about 1.3 million that was a major change that came through uh our estimated reserve as at the end of this fiscal year uh we are expecting at about five million dollars so next slide please okay so if there's any questions on finance I did ask answer those otherwise I'll move into non-departmental let's keep going through the non-departmental okay next slide please so the non-departmental budget is uh it's basically a catch-all for uh those expenditures that don't belong to any one particular department it includes things like the animal shelter and county admin fees and general fund insurance on here you can you can see the different things that we pay for there it's mostly debt obligation and lease payment and then the general fund portion of it next slide and where you see the the major changes in that one Veronica mentioned earlier about the the increase in general fund insurance so that's something that as she noted that is something that we're seeing industry-wide the other two uh deal with um kind of more budget budgeting things so uh we apply a general fund admin cost to all of our non-administrative department so when those departments do their budgets next year you're going to see a line item for those out there basically what that shows is that what it costs for those departments in the general fund for the the service of of the admin department so finance department all of the paid checks that we cut for all of those both city clerk's office city manager's office city attorney's office for the gender review and all of that all of those services that we do we through our cost plan apply those costs to the non-general fund department but several years ago we started showing what that cost would be to the non-general or to the general fund department well so we don't double count we have a credit that exists here in non-departmental so all it is is just a complete offset of the total of all the general fund non-administrative departments that get this admin cost so as uh that budget goes up which is due to largely the mo u increases and i think a couple of position increases you see that the that the general fund credit goes up and as such you get a larger negative amount that's what that 1.2 million for general fund admin cost plan is the non-program part what we do is this relates to a vacancy credit so typically we do a 1.5 million dollar vacancy credit that allows us to um uh take into consideration uh the the vacancy like i mentioned before we try to anticipate that we are going to have all of the positions built but we know that's not going to happen so we put a credit to so we're don't overly inflate our expenditure and that credit like i said was about 1.5 million last year it was removed and so this year we not only are adding a fact but because we have more uh vacancies we've increased uh that vacancy credit to about 2.5 million dollars so i would anticipate for a uh uh a few years at least we will probably see that vacancy rate at that time it's very difficult for us to figure out exactly what it's going to be because it it changes in time we can we're looking at ways that we can we can average from different points of the year and try to come up with with a a vacancy rate we can uh we can feel comfortable with on an ongoing basis but right now we feel that it that it's appropriate to increase that to buy 2.5 million dollars uh to account for all of the additional vacancies that are existing in the general fund so the combination of those two things of where you see the um uh the large negative that's there and most of that is just sort of sausage making if you will from the budget standpoint uh next slide so and this goes through all of this so you can see that i actually did my homework yeah learned what all those changes were and we'll go through the next slide and that should be the end of it so there are any questions i'm happy to answer i think that there are probably other staff members that are still here as well if they can answer the question great thank you so much alan i'll look to my colleagues and see are there any other questions on this or any of the other portions of our our our first day of budget hearings all right i'm saying none thank you so much alan thank you Veronica we really appreciate all of the work and we will recess and come back uh at 9 a.m. tomorrow to finish up our budget discussions uh and we'll be back at four o'clock for our regular council agenda