 We found you John. I think John and I matched today What what is what is that image on your shirt? It's a it's a it's roses. Oh I'm watermelons So I do see we've got a couple of other Folks in attendee. I'm not sure who who all is supposed to be panelists at this point But I do see Sue. I don't think she's supposed to be a panelist at this time So maybe if we just want to get the meeting started and if she needs to be promoted we can do that at that time Yeah, that sounds good. Let's go ahead and go. Let's take the roll and get started. Okay Here Rogers here Number sweat home here and members Sawyer here Let the order reflect the all subcommittee members are present Great. We'll go ahead and go to item number two, which is our Public comment for non agenda items So if you're interested in speaking on items that are not listed on today's agenda Now is the time to go ahead and hit the raise hand feature on your zoom and I'm saying no live hands Did we have any pre-recorded voicemail? No emails were received Excellent we'll go on to approval of the minutes. We have minutes from May 13th Council members, did we have any amendments to those minutes? No Okay, let's go to the public see if anybody had any amendments that they wanted us to make and Seeing none. We'll adopt those without objection Now we'll go on to item for 4.1 Mrs. Allen. Yes, sir Chairman Rogers The presentation I'm going to provide for you now is is One-on-one time monies We have done a similar presentation before This one we have a couple of other objectives to it first off like we want to you know Be a little bit clearer on what When we talk about one-time monies what are actually there that are Have a broad uses attached to them versus those that are very restrictive in their use I Also want to go a little bit into the American Rescue Plan Act ARPA and what we are Experiencing going through that regular the that lie and those regulations and then go over some next steps on where we are Moving forward with that so with the next slide, please So really the the one source of One-time funds. I know in the past we've shown you a pie chart of 200 and something million dollars worth of one-time funds, but you're looking at in the real sense of One-time broad use Dollars are the PG&E funds that came in and what I have here is just a pie chart that shows what we've done with this before And if we go on to the next slide I've broken out for you in more of a chart fashion here or a table fashion so We received 95 million dollars and that should actually be in July of 2020 Of that The council made certain commitments and certain appropriations. So I'll start with the commitments part. So during the goal setting Sessions in February The council committed 40 million dollars to the general fund reserves for fiscal stability The match to the county commitment to red In the amount of 10 million dollars and then an amount to the Roseland library of 10 million dollars as well In addition the council appropriated in In April the end of April eight million dollars of fire resiliency projects the vegetation management And the wildland resiliency and response to strategic plan. So if you're looking at it from a obligation and Commitment standpoint we have the 40 million dollars in reserves Are our in reserves The eight million dollars of fire resiliency projects are in Projects with the fire department and they are using those funds Fort that in and then we have Items the committed ones for the red and the Roseland library Those Are set aside but they're waiting for a specific appropriation from council and that takes a council action that has a resolution And and and officially appropriates the money into those projects, but they are set aside for that use so when that happens the money is there for that For that specific action and Alan can you remind me to and I apologize. I know I've asked this like four times My recollection is that the one-time funds PG&E settlement funds and others Technically are special fund and then don't count towards our measure O baseline correct, okay And All of this leaves about 27 million dollars of PG&E funds uncommitted. So those are will be An accounting term for that is assigned in the general fund a Way of looking at it is that it's just set aside for use the only Way that they can be used is through Council action so Those funds remain uncommitted to any particular project but set aside waiting for a project should Should one come To the council next slide Alan coming up just jump in and ask a quick question through the mayor Do those so they're uncommitted Do they sit as a line item inside the general fund or do they sit outside of the general fund So they Where they live they live within the general fund but outside of our general fund calculations, okay, so if we were to Which I'm not necessarily expecting but if we were to not Come to agreement or strongly agree to where those funds might be committed. Could they indeed? be committed to our general fund until we In on into our reserves until we found a suitable given where given where we're going fiscally If we were to decide to up that 40 mil and leave more in the reserves would that be a Potential use of those funds to increase that can increase those reserves Yeah, you could do that those funds remain assigned until We receive direction to do something with them otherwise and if otherwise means Putting them just as part of the overall reserves in that and in our our general reserve calculation then then we could do that with with With direction from council the reason I ask is we are moving into a A lot of unknowns with our next budget and I'm just you know that that it would be it would be important for the council to hear that That that is just because we put in 40 million which could go away pretty quickly That that it is not without Benefit to consider Boosting our reserves beyond that 40 million. So it's just it's just as a as a reminder, I guess understood So next slide, please Unless there are any other questions about that all right, so so now we move into the the What we've been calling one-time monies. They are one-time monies, but they really have restricted uses around them and this sharp what I've tried to do is break them into our fire recovery and mitigation grants and Our Response to coded so this chart shows The pie chart that If you look at it most of the fire recovery and mitigation grants are Related to the Tubbs fire and in FEMA PA for both the general fund in the water If you go to the next slide, I kind of break that down a little bit for you so So for FEMA public assistance funds the The cost reimbursement for responding to the fire has been received by By the city and so everything that was that was Allowed by FEMA regulations to receive For an immediate response to the fire in both the first 30 days and then and then 31 plus days We've received those those dollars back and they've been receded back into the general fund And that was a proxy or to the water fund because we did differentiate those two Funding sources and that total was about three point seven million dollars. And then what we have left are a number of projects that are our long-term recovery projects rebuilding from the fire both on the general fund side meaning a lot of Road repairs and and signs and guardrails and and and those types of projects plus Parks projects and the like and then you have your water projects where we're we're rebuilding A lot of our pump stations and reservoirs and things like that So with these the way that they work is that we we received Obligations from the federal government from FEMA of what they are going to pay for these projects and so based on that we develop a budget and then as we go through certain milestones We request money back from FEMA or actually in this case Callaway S flows through the state so we we put in a request for those funds and they They're approved and they send us that reimbursement for it. So basically it's it's a grant it's just like any other type of Grant drawdown for a project that's going on and we have like I said We have those in the general fund and we also have those in the water fund Next slide, please We also have a couple of other sources that Are one thing I will say about the FEMA PA ones and you don't have to go back to the other side But it but it is an important aside While FEMA obligates a certain amount and we budget to that amount if it turns out that at the end of the project We have eligible costs above that obligated amount. We will receive that Through the closeout process So what will happen is that we will Go through a process with FEMA and Callaway S where we will validate all the costs above that which was Obligated and we will Make adjustments to those already obligated projects and then we would receive Those extra funds back What I'm not clear on Because we haven't gone through this yet is whether that amount will be at the end of the closeout of that individual project or the end of the closeout of All of our projects because some of the things that FEMA does is that they will say that yes We will pay you this but we pay you this at the very end when all other projects are done and as you can tell That could take several years from that to happen. If not decades So now we can go on to the next one So we have fire We also have grants through The Hcd which are actually community development block grants that are for disaster recovery infrastructure and mitigation projects we were Allocated What 34 million dollars of Funding for that there are very specific projects with this should go to the lion chair Approved for fire station five The only one that was approved on both the disaster recovery and the mitigation side of that There are other projects, but again they that that Hcd has approved on our behalf as as Eligible for those funds and it's up for the city to then go and Prioritize how we would go use those funds Either from the DR source or the mitigation source that said The the top priority of the city has been to rebuild fire station five with those funds They are very specific as to the use very specific the process that we've gone through just to get to the allocation part has been Boy probably close to a year And we are still Moving through that process. It's very slow and It takes a lot of work on our side and also on the state side Then on top of that we have hazard mitigation grant program. So when a Disaster happens FEMA not only sets aside money for disaster recovery But they also set aside a smaller amount of money for hazard mitigation grants and so we applied for several of those we've received some back and then as just like with the PA projects As we get through certain milestones We will go and request reimbursements back that go specifically for those projects and cannot go back for any other use On top of that those projects are capped in in terms of the dollar amount so if The the cost of the project ends up being more Than than the grant dollars allowed to us the city would be on the hook for that delta Anyway that unless there's any questions I'll move on to The next part which is dealing with COVID. So COVID I broke into three main areas And on the next slide I'll go through that The largest amount is ARPA funding Since this is COVID relief. I thought that it was appropriate to have it there We also have we are doing a FEMA Emergency response project and then we have and have already received and use Coronavirus relief funds which was from the initial CARES Act that flew that Float through the state to us. So next slide please so like I said, we received an allocation of Little more than 2.1 million of coronavirus relief funds that did flow through the state And what we were able to do with that is apply it to our emergency response and then that went into the Then we received the money back from The CRF and we were able to use those general funds into a child care pilot program Which is just currently being used About two million dollars went went to that program The American Rescue Plan Act is the Well, actually, let me let me do the FEMA PA one first and then we'll get into the ARPA So the FEMA PA we've been working with FEMA and Cal OES on this since For a year. I think we put in our request for public assistance in May of last year. So we're over a year And I think I'm on my fourth or fifth FEMA project manager And every time they come in, we kind of go back to square one. So we are still at the point of validating costs just to get the project obligated so that we can go and close it out That's that's where we are. The majority of the costs that we're looking at with that are those for the non-congregate sheltering at the Sandman And our material supplies for PPE and our response, initial response toward COVID that we didn't apply toward the CRF funds So we're using FEMA as kind of the catch-all for those Activities that couldn't be covered either by CRF funds or by CDBG or by any other federal funding source One of the things to keep in mind as we go through all this is that the federal government Looks very Poorly at double dipping and and hitting The same source with or different sources for the same activity coming in so we have to have staff be very careful that we Identify exactly where the funding source is coming in for what activity and keep that segregated out So we've been working closely with Housing and homeless services to make sure that that we are catching those costs that are Solely there that can't be covered by anything else. And that's what we have for the FEMA PA For the ARPA So we are This is a I'll just I'll be Quite frank. It's a It's a challenging piece of legislation to go through and so what we are doing is is Not only attending whatever forums that we can get I have a standing Monday forum with GFO a which is the government finance officers association Where you have folks nationwide and all we're trying to do is solve this particular piece of legislation and understand exactly What we can use it for what we can't how we go through some of the revenue calculations and and wherever possible to try to cobble together some best practices to Ensure that that when we are audited that that our audit risk is minimal It's a fluid law While we do have an interim An interim guidance are It every it seems like weekly we we receive more Uh, or additional guidance on that rule coming from the treasury. So what they're doing is they're hearing from cities and counties and states and they are Adjusting their guidance to either make things more clear for us. Hopefully Allow from more uses of the funds But like I said, it's a fluid thing So we are our consultant that actually is helping us with fire station five and navigating through the cdbg dr and mitigation They also do work in terms of Understanding the eligibility of the programs. So I've reached out to them To see if we can Have them help us, you know, kind of put a third set of eyes that are On it to just to ensure that we're doing things correctly that That we're using the right calculations in that So We also We are working on our revenue. In fact, actually let's go to the next slide So we are looking at our revenue calculations Now, we're currently doing those in finance It's a pretty It's turning out to be a pretty labor-intensive Job one because they are looking off side of our normal Fiscal year and closures. So they are they are looking at uh, December 31st So they're they're kind of taking a calendar year approach as opposed to a fiscal year approach It just makes pulling the records that much more difficult because you're actually kind of crossing fiscal years You have half of it has been audited the other half is not That isn't a problem for treasury, but it does make things a little bit more difficult The importance of doing the revenue calculation is that for those things that If we can certify revenue lost through the pandemic and again What treasury looks at is the city as a whole governing entity. So they're not going Source by source. I can't go to them and say we lost three million dollars in tot So that's our revenue loss. They consider the whole package And that again makes things difficult but we I guess I would look at it this way if The revenue loss that we are able to calculate those funds of all of arpa those funds would have the broadest Uses available to them so To put it this way of the 30 Let's say of the 34 million dollars. Let's say that four million dollars. We we can certify as being lost revenue We could use those funds for virtually any government service. They they're very broad in how they Defined the uses for that. However, the other 30 million would need to be used to the very restrictive Uses as defined by the By the act So we are hoping as we go through we were being very diligent with that revenue calculation because there's the the the potential for us to have some very wide broad use dollars versus some more restrictive dollars Let's see here next slide please so and where we are with the next steps I kind of kind of merged some of that in here, but We do have another study session in front of count the full council on july 13th By that time we will have our calculations done for revenue loss We will hopefully have a consultant on board to be able to look over our shoulders at the programs that The staff is currently coming up with that may be able to fit within the restrictions of arpa We will go through a review process and then be able to Provide that to you in july As I say that I realize that that's what a month away But those are our that's our time frame. We do have some reporting requirements Along with arpa in that I need to present to treasury a interim spending plan By august 31st so while july 13th is a Fastly approaching date The august 31 is also fastly approaching so we have no real choice in the matter other than to Get our ducks in a row as we move forward with that so with that that's the end of my presentation and I can answer Hopefully any questions that we have I like the qualifier there alan That makes sense with some of the complexities of the regulations around each of these fundings Council who wants to start Go for it john I just have a housekeeping issue alan just for the for the edification of the community those that might be watching this presentation ultimately um Sometimes we use m for millions. Sometimes we don't we use Six digits and sometimes we're nine digits and sometimes we don't use it any indicator at all But sometimes we say in millions could we just kind of add that in there make sure that we are consistent In how we identify these amounts of money It's a small thing, but it's as a frustrated editor. I like to be some some let's indicate that what we're talking about millions Let's say we're talking about millions. Yeah, I'll make that more clear. Thanks And otherwise, I don't really have any questions. Just, you know, it's all kind of this is all very it's almost like funny money At times like when we're going to get it how much we're actually going to get and Like shawna we said if we're if we're wrong You know, I mean, there's a good chance of what our expectations are are are off So I don't believe it till I see the check Well, the nice thing with arpa and and I failed to mention this but we have received our first tranche of that So we do have 17.3 million dollars That we have put into a special revenue fund and we will direct all projects out of that special revenue fund And that's that is is largely For reporting. That's kind of a best practice that I'm picking up Of keeping your reporting very separate It's easy for the auditors to come in. It's easy for us to send stuff over the treasury So I should have mentioned that earlier apologize for that And so is those funds are are they fully to To replace funds that we have spent there's no discretionary use of those funds for I mean, how how much how many of these that's 17 three How much of that is really gone because we're recouping what we lost So I would look at this as completely These are funds going forward the intended the law Is to is to get money and really be forward looking with it So the the the small part that's going to be tied to revenue loss And unfortunately, I do think it's going to be a small part in the grand scheme of 34 million dollars That can be used for virtually anything The remaining of it will will need to be used for If we're doing projects, they need to be either Water sewer or broadband projects. They're very tight with their Right now they're tight with their definitions on that But it could be used for things like homeless services for Grant programs Ideally grant programs because you don't want loans. You need to have them off your books by 2024 so At doing a revolving loan does us no good. It's the idea is to get the money out in the economy get get Try to make Either people or the economy whole and that's and so they've really kind of focused Doing that So I appreciate that and I'm not sure if you mentioned did you mention the timeline when you first went over these numbers to us? I you know, I probably glossed over it. I think it was on one of the slides But I don't know that I necessarily mentioned it. So I'll mention it now is that we do have We have the uh, December 31st of 2024 to have the money spent although They will allow for some lag in reporting up to 2026 but I would just take it as You know as best as possible have it off your books and spent by 2024 that's I appreciate that a little bit that is important information because of that Lest the money burn a hole in our pockets Um, I don't expect it to be latin sitting there until 2026, but it would be good to have To indicate the time sensitive nature of these funds It's also important to understand and we did have it in the in on the slide, but I you know a couple more restrictions Is that it cannot go it can't be used to prop up rainy day funds or reserves It can't go toward debt service. It can't go toward pension payments They if you're going to use it in a project, it needs to be a pay go project It needs to be those types of things again, like I'm saying they want They want the money out on the street being done either in construction Or however, they just they they don't want it sitting in city coffers any longer than it needs I think that would be really really important information to impart When showing these funds because it will help the council Understand the nature of the funds and that and the restrictions the conditions that are placed on these Where wherever you can wherever you whether you need to expand the the illustration or however you can do it I think it it is it is well worth mentioning those conditions Um, because it's the time ticks fairly rapidly Yeah, copy that. Thank you Tom any questions Yeah, and some comments just to keep on the same thing that john was just talking and i don't know i'm Using my experience on the continuum of care with some of the money coming in emergency solutions grant where Unfortunately, that board that body has made some decisions that we need to spend it by july of 2021 Right and now we're feeling rushed because now all of a sudden it's going to a non-profit provide these services Oh, we don't have the capacity and now we're kind of okay, then what happens So I would just really support what john was saying if we can have due dates and consequences if we don't meet those timelines as it go back to Whomever that is again, it hasn't been a real warm and fuzzy feeling on this coc board Or we're feeling pressured to make a quick decision versus a good decision um And so with and i'm not sure if this is the appropriate item I'm just going to go forward like with the one time monies. Um, I know we had sought out feedback from community members As to how to expend some of the pgne dollars, right? um I also look at some of the fema requirements and it really seems like some of the things our community members were asking for Might be eligible to be paid for out of fema or these other buckets Is there any way that staff has gone through or looking about the potential funding sources? Other than the pgne settlement dollars, which we have total discretion on In other words, wow, they let me just use that in the coffee part new sidewalks or infrastructure improvements That was all categorized underneath the pgne settlement dollars But i'm thinking some of that may qualify for the fema, but again, I'm not a sub-matter expert So is someone on staff evaluating the potential ability if council chose to actually go that direction? Yeah, and and and we I know we have evaluated that in the in the past and so we can we can pull that up for you pretty quickly Not at this meeting, but we can absolutely get this to the committee I do know that that what we were Focusing on with the pgne money are those things that we either lost an appeal or were not part of Initially approved fema pw projects so Again looking at general fund last so we were trying were I think is what you're saying we are trying to Have those Those dollars Either coming from fema or from whatever Uh Before even the pgne dollars, but there were just there were some projects in copy park and some other areas That just fema just denied and and so we need to try to pick that up in other areas I I would just ask if we could be consistent because at our december 8th council meeting There's actually a slide summary that says projects that could be funded through enterprise fund Another one for potential for state or federal funding projects under appeal with fema they categorize it But I did not see the same analysis When we went out to the community with what some of our community members wanted to break it down to the buckets I would just think I would like that same information if we're going to go that level with Staff evaluation about what our needs are we also ask the community for their feedback I think we should do the same process so that council understands Okay, this bucket that bucket the other bucket may be able to fund these projects I at least some members of our community are interested in completing And those are the only questions I had questions slash comment Right. Thank you. And then alan uh kind of picking backing on that We did have an initial conversation about what the community would like to see from the pgne funds We also have now some other unrestricted or even slightly restricted funds When we have that conversation in july How much of an opportunity is there going to be for council members for department heads and for community members to bring forward ideas for funding? Um, and how is the process going to work? Is it going to be We bring forward an idea and then staff tries to to match it to a pot of money that it could be eligible for Or is it going to be we have this much money? Let's stick to Let's stick to trying to make come up with ideas that work I think to make the best use of our time at that study session would be that we We do that analysis for you and and and include those things. So yes, you're right. There's there's a huge list of of projects that either The community asked for or staff asked for as a part of Of one time dollars. We now know exactly kind of what we're looking at in terms of one time dollars And so you're able to to kind of help prioritize that And and like to say get them in the right buckets and go in there I I think that we need to have that As a review mechanism uh Well, I would suggest that we do that as a review mechanism as the staff Uh staff level and then be able to bring that Uh to the study session Um and go through it that way. We just don't have I I think that's the best way to go about that Yeah, I'm just wondering because uh, it was a while ago that we talked about that There are other ideas that are out there And I'll just you know, I'll tip my hand a little bit one of the ones that I've been thinking about quite a bit For a while was a pilot project or pilot program in santa rosa around universal basic income Uh, which I would never have suggested the pgne funds for because I view those as mostly fire recovery and fire resiliency But then now that we have american rescue plan that specifically wants to push out money into your community for Economic development as well as social safety net. It seems to me like that's a good nexus for conversation Uh, so that's the kind of thing where I'd like to put that on the table for discussion We haven't had a forum to put things on the table for discussion for arpa And so is the study session going to be where we broaden it or do you envision that you'll want from Again department heads and the community and council members those ideas ahead of time to be able to say Here's this idea and here's where it might fit in the funding Does that make sense? Yeah, yeah, I'm I'm pausing because I'm I'm just thinking of the timelines Um While you pause Ellen While you pause can I ask chris? What is that? Sorry john so sounds like a sounds like a black hole to me Uh, it so universal basic income you've got some pilot programs that are going on around the country and basically what they do is they target resources to People who are far far far below the poverty line So like for example, I know marin county is looking at one where They're they're targeting specifically single parents who live at 25 of the area meeting the income or below And guarantee them. I think they're looking at $200 a month That's unrestricted. They can use it on Food for their kids. They can use it on rent that they're behind Just basically a baseline of some form of social assistance and then they're measuring the health outcomes for folks And so obviously it's not the kind of program you roll out with if you haven't tried it It's obviously not the kind of thing where we have enough funding for But given that there are significant categories in ARPA that are both economic development Which I always think of putting money in the hands of of poor folks in our community as economic development As well as social safety net programs It seems like the kind of thing that we could actually talk about whether the council wants to do it or not Given that that's An opportunity that has presented itself to us And it does speak to the this speaks it does speak to the determinants of health So I that's I'm a little curious about that So I I would I would suggest that if there are thoughts like that That and I I made note of it so I can I can Have that I think that those are types of things that if staff knows this in advance Of of that it's it allows us to Be able to vet its Eligibility and be able to then you can have that discussion of yes It's an eligible project And you know Whatever would be needed to put in there that's that's you know, that's a different discussion but I would I I think that it would get to a Uh It would be difficult for us to be able to act on the fly on some projects, especially ones like that At a study session and then we'd have to come back and then You know, you kind of you kind of see that happening. So Um, I think maybe and I have a feeling that after this meeting I'm going to get some notes from the city manager, but Um, maybe maybe it would be best that uh, if Jan and I Reach out to the city manager and really kind of map this out and and be able to You know See how we can solicit that input coming back in prior to The study session Again so we can make the best use of our times during that that session Yeah, I appreciate that alan and I also want that opportunity to be extended to other council members and community members and department heads Uh, you know specifically or staff Uh on what their priorities are what they see are and so I'm wondering and take this back and talk with the city manager I'm wondering if we should uh schedule Almost a public hearing the council meeting before We actually have the study session and the allocation of this just Literally just to take in ideas and listen not to discuss the merits of them But open up and create a forum for for things to be put on the table So that that way you can come to us in the study session say Here was this idea if the council wants to do it it would fit into this bucket Here's this idea. We can't find any particular type of funding that it would qualify for Just so that we have a little bit more clarity In that conversation I will I will absolutely Bring that up, right Uh any other questions john or tom? All right, let's go to public comment and see if we have any Questions or comments on item 4.1 I'm not seeing any hands raised Uh, any perfect for no public emails Love it. Thank you All right. Thanks alan. We'll go on to our next item then and I believe that's jan's taken this one right jan Yes So this is a dense topic and um So you're gonna have to uh Bear with me as we uh talk through this Um next slide please So what we're gonna talk today is um, you know addressing the city's unfunded liability and um I thought it was um really fortuitous that the subject came up on tuesday As we were talking about sort of highest and best uses of monies um, but also sort of in taking care of these really Sort of bigger bigger challenges and um, you know the unfunded liability, I think for impact and financial results um, we've got to Start proactively thinking about it. I've been thinking about it frankly since I got here But um only decided, you know to advance the strategy particularly having gone through the uh budget exercise and um, you know the cost association Every year that's increasing with this if we can go to the next slide, please so, um Let me say that the charts sum up The problem we are attempting to solve and I think we've solved it. Um, at least mathematically so The city has an unfunded liability think of it as a past due bill on pension pensions owed related pensions Ode to CalPERS and so in addition to normal costs and you'll see that on the next slide We have this unfunded liability payment um, that's about 30 million dollars a year and rising and in fact, it's rising from now until 2031 and throughout that period of time, which you'll see on this which This is the carve out beneath that you see of just that portion of the rising Portion of the unfunded liability That total over the next 10 years is 110 million dollars And that's in addition to The funds we pay to CalPERS for current employees So our total unfunded liability Um on the you'll see it on the next slide, which is really the unfunded liability less Let's less assets Is currently 400 million We make that payment We call it a discount rate or the actual area of assumed rate of CalPERS at 7 percent It was 30 million dollars in the coming budget year and like I said, it's increasing each year it peaks in 20 31 And over the next 40, you know over that time period. It's about an additional 14 110 million dollars over the next 14 years So our goal in this financing is how do we levelize that unfunded like that payment stream to CalPERS Um, and so how do we sort of get rid of the rising component of it and just levelize it? So we're not having that increased liability We talked about it during the budget If nothing else happened If the budget were in balance next year It would be out of balance by about four million dollars Just to fund this portion of the liability owned to CalPERS next slide, please So this is sort of the summary of the unfunded we're only talking unfunded liability We're not talking about the normal payments that we make to CalPERS every year so For the unfunded liability there is 63 different amortizations Related just to this It's very confusing. I didn't bother to show the the chart But think of it every year you have the possibility of either A benefit or a loss in CalPERS. Those are all those all become amortizations Um, and so in a current year like ours where CalPERS is expected to have really positive returns Because stock market is having very positive returns That's probably likely that that will be another amortization But it will be on the benefit side of the balance sheet So in the left margin, um, you see the the net unfunded liability We've got an accrued liability of 1.34 billion dollars And market value assets of about 946 million. So the difference between the two is a current unfunded liability Um, as I mentioned before we pay normal benefit costs to CalPERS It's as a percentage of payroll Plus the percentage plus the amount required for the unfunded liability And that's for miscellaneous fire and police Units and so you can see that each of those each of those has a different funding status You know the conversation happened the other the other night You know, how does that is that viewed positively to have better funding status? And of course the answer is yes Next slide, please So how so what we're talking about is Can we do a financing borrowing at a lower rate than our CalPERS discount rate CalPERS discount rate? As I said is about 7% This would be a taxable financing. So it's slightly higher rates than tax exempt financing, but still Um, materially better than the 7% implied rate. We're paying to CalPERS. So one it's issued at a lower rate Um, then the CalPERS assumed earning rates, which is currently seven percent It does it would produce cash flow and budgetary savings We would actually be replacing The unfunded liability with lower cost debt i.e of financing than higher cost debt, which is at seven percent We could sort of call this in the business so to speak You know sort of higher and best uses of money And so when one of the questions was raised should we think about PG&E dollars? That for example, I mean it would require some analyses But of how you could replace higher cost debt with funds that you know, we're Either you're a lower cost of capital or in this particular instance Not a cost of capital So it's the difference between the payment streams of the existing payment stream We now have to CalPERS less some other mechanism Whether it's POBs or other monies that would create debt service payment savings Obviously, it's a financing and and as well possibly budgetary savings Next slide please So here are the potential benefits to the city? I mean clearly it will depend On what actually happens in the market where we to carry out a financing You know we right now the I think our analyses assumed We could finance it at just about 3.2 percent But you know that you know, obviously Will depend on what actually happens on the day of sale or the day we come to market budgetary and cash flow savings as we talked about on the prior page But there are also some market timing considerations It We would expect that it would produce an overall economic effect on the city's program as any investment gains Result in a surplus. I talked about that amortization conversely Any market losses, which is the case now The CalPERS has You know that you know also adds back to the liability and of course the time value of money You know the more we have in the fund the more compounding it is and the more effect it has Towards the overall position of our liability next slide please So here's a summary of the financing scenario with at which we looked Um And I'll talk about for full funding a little bit later because I think we shouldn't do full funding But this was a full funding scenario Here's a par value four hundred and one million dollars Um for a term of 23 years. That's the amount remaining On the CalPERS liabilities. So we wouldn't go past it Um average annual debt service would be materially lower than what we're now paying for the unfunded cost to CalPERS What we the really big benefit out of this is that we have the opportunity to avoid That additional 110 million we talked about by levelizing debt service It also means that debt service would be higher in some years now where it is lower But overall it's not going to have that increasing effect that is usually budgetarily challenging And um on a net present value savings basis. It's about 123 million meaning in today's dollars That's the value of the financing and we would finance it into true or estimated at a tic Of 3.2 percent Next slide please Next So just here's a sketch of how this all works Um, we would make the deposit into the pension system We would all the city would also pay debt service on the bonds POB proceeds go straight into the pension fund. They go out to pay Retirement benefits. This is just a sketch Of what it would look like the process for getting funds to CalPERS Next slide please. I have to disclose risks. There are some Investment risk You know, so For this financing to work There's actually a slide i'm not going to go to it But it'll come up as we get to the end of the presentation That shows what the current returns for CalPERS have been over. I think the past 10 years What the returns have been And some have been higher some have been lower But again, there's always a potential That, you know, investments may not CalPERS investments may not perform But obviously the lower borrowing costs the better chance we have For investment performance given the three point spread Um between the seven percent if we were to borrow Or actually it would be about four and a half percent Or if we were to borrow in the three and a half percent range So if we depending on market timing There are certain impacts to the economics of the overall transaction Clearly, I think putting in a lump sum payment at one time Would be helpful But investment losses if they were to happen on the front end Shortly after funding That might have some detriment effect to the overall Cost benefit of the program Um conversely, you know, one of the discussions we have is when should we fund? So we're in a really good Sort of market cycle right now investment returns are very high And so there's some argument to be made if you do it in tranches Not all at once maybe in a market such as this Maybe in a market that You know, sort of when returns are less then you sort of average into the market over time Loss of flexibility. I don't I don't think, you know, we need to Actuarial assumptions certainly change over time borrowing rates are set for the life of the bonds unless refinanced So, you know, if interest rates were to decline, you know, we might have the opportunity to refund it, but um, yes That would be, um, you know, one of the things for consideration We always advise people that you can never know the true economic outcome outcome of the pension Financing vis-a-vis the liability of CalPERS because it's really sort of a tally over time So in 30 years or in 23 years When, you know, the amortization period should come to an end, you know, that really is through You know, the sort of overall evaluation of the whole program We can do it on a bit-by-bit basis, but it's really sort of at the end sort of looking back, you know How did the program do overall? Next slide please Overfunding is one that I think people learned we learned a lot about after the first generation of pension bonds You know, we put in, you know, sort of those who did full funding they put in pen, you know Fully funded the liability only to have in a, you know, a good performance year from CalPERS That you didn't really get the benefit of anything more And so it creates an actuarial surplus and, you know, I think, you know, we've all that's that's why we've come to the recommendation that perhaps Doing a financing and tranches is sort of better than doing it all at once credit risk, um This is one where, you know, we sort of got this figured out So the rating agencies have different perspectives About pension bonds. Some view it negatively, specifically Moody's and Fitch Standard and PORS doesn't really have an issue. So they're neutral on pension obligation bonds So our answer to that is we'll just go to Cal, we'll just go to Uh, standard and PORS and leave the other two out of it. So I think if you look at most POB's that's what's happened I think we would respond the same um The loss of flexibility I think is an issue that's gone away with gas v 68 You know, it used to be the conversion of what they were seen as a soft liability To a hard liability that is no longer the case because this now has to be um on our financial statements At mark to market, um every year with our financial statements Next slide, please So here are some risk mitigation strategies. Um, I've sort of talked touched on them as we've gone ahead Issuing less than the full amount so we don't You know have that overfunding from an actuarial perspective Multiple tranches that allow us to dollar cost average into the market Perhaps catch the market at you know, also in item three different market cycles low market cycles for equities preferably Um and mitigate credit and market risks by ensuring adequate spread between borrowing and the earnings rates So taxable rates with were much higher during the first generation of POB Um issuance so you had much more chance of sort of budding up against the Actuarial assumed rate Right and if we were to issue today, we're at roughly one half of the CalPERS rate and I think that gives really some margin for error there In terms of the spread between rates I don't think anybody adds complexity to these transactions anymore. It's pretty much plain vanilla fixed rate bonds And you know, my recommendation would be that we sort of if we're going, you know, if there's a decision You know to move forward with a pension financing you tee it up. We've got a Validation process to go through have it ready and you know, wait for you know favorable market conditions Next slide, please Actually, we can skip past this but you know, this is sort of you know, you've seen portions of this, but yeah, we can skip past this Next slide So There there are a variety of strategies budgetary strategies. So the comment about For example, here's a good budget strategy, you know, whether or not PG&E Dollars could be used to make a dent in the unfunded liability. That would be a budgetary approach From a recycling savings, you know as you have savings Assuming they're cash flow savings Could we then recycle it meaning use it to even buy down further the liability Other issuers have gone to the pension stabilization fund. This could be part of what we incorporate into Our general fund policies that perhaps if there is an excess in one year We put it in a pension stabilization fund to buy down the Unfunded liability On the financing side Leverage a leverage refunding is where you take all your savings up front I don't think that that would be a good strategy for us to do either from a credit perspective or otherwise Then there's a whole tax exempt exchange and if this sounds complex Probably sounds more complex than it is one of the questions I asked I think when I you know first was coming in and You know looking at the fire station, for example Which has budgeted with PG&E Dollars was to whether or not, you know Should we take care of higher cost debt and do something else where we can do lower cost? So for example a fire station essential asset financed on a tax exempt basis You know would there be some benefit to looking at that and you know sort of using making alternate use of funds and This particular recommendation which most people have done issuing pens pension obligation bonds Next slide please That's just an example of a leverage refunding. It's up front next slide So we've had the conversation or we've had a few conversations Are we better off using pension obligation bonds or a COP issuance and let me tell you why that is So pension obligation bonds were required to file A validation is required to be filed with the courts It takes about four to six months however There are a lot of recent challenges to validations The most recent is one for the city of Chico Which was sent to us this week just to see it In which it was challenged by the Jarvis group Sometimes they just go away, but many cities choose not to litigate it And so they flip to the alternative with it, which is COP's The issue I'm sorry. I need to interrupt you. What is the validation? What is the validation? I don't understand The validation is whether or not the CalPERS obligation Is an obligation that the city must subscribe to Is it an enforceable obligation or does the city have a choice? and so That and so you can't get So bond councils want to sort of open that in the courts Because they won't issue an unqualified opinion without it. And so It's a lawsuit as evident that's filed essentially And if there are challenges to it then clearly Most are choosing to go with a different strategy But it has to do with whether or not the CalPERS obligation is truly an obligation enforced Or does the city have a choice and that's an answer question and it's a gray area So are they basically so that's such a that's a that's strange to me. I'm trying to process that I thought it was it had something to do with this Can the city prove its need that this is a fiscal need to do pension obligation bonds To help survive this the next 23 years So this is actually this actually is a quite a legal question as to whether or not CalPERS Whether that's really a legal obligation Or do you have a choice To do something different. Oh, wow. Yeah, I can't claim to understand the legal ins and outs of it But my understanding is that's really sort of the substance of where the challenge lies It's it's an answer question and so What I Have talked about With counsel legal counsel that is is You know Clearly the challenge is there are many look, there are lots of pension obligation Bonds that were issued without challenges You know, I there's a whole list in the appendix, which I won't read through the list But you should look at everybody who's done pension obligation bonds So clearly the challenge is still somewhat an exception to the rule having said that They are becoming more frequent Recently just one was filed with against this. I think Chico was is it was in the validation process and there was one filed by the jarvis group so when When the validation is is is filed that take that's about a four to six month process But we actually think it does make for a little bit stronger credit And there's good reason why we would not necessarily Go to first the certificates of participation because if you're doing a big pension financing some of these are really big But let's just say we were doing full funding four hundred million for example That would be a challenge in having an essential asset to serve us collateral for the city and What we've talked about At the city if we were to be able to do this was one regarding using streets As an essential asset It's certainly been done before You know sewers for example another essential asset Let me also say there was a recent article recent in the last year. I'm going to say um You know just an article in the paper about someone being critical about using sort of those Assets or not having anything else. So it does matter um And of course there's a time value of money associated We can just as easily pull the trigger on a certificate of participation Then wait six months to do a pension obligation financing that has an associated cost with it And there are court costs also for filing really the litigation of the The validation So that's really the decision Portion that's represented here on this slide and What most what issuers are beginning to do I can't say most what they're they are doing Is they're paralleling Both processes So they do documents for the pension ops and they do documents at the same time for the c o p's You file the validation And if there is a court challenge most of them will wait it out If there is a court challenge then you immediately flip to the c o p's So that's one way of you know how we might think about approaching it So there is a little bit of the rolling of the dice on the validation. There is there is there is I I wouldn't say it's a lot, but I would say it exists. Yeah, and we would yeah, so next slide please The next slide so look I um I actually have The distinction of being I think the first consultant in california to have done pension obligation bonds When I was at pfm for one of my clients And you know, there's it's really hard to sort of get around the argument of why One should do um, you know Pension obligation bonds first of all, um, they're just a notch below the typical geo level Um, I think there is an argument to be made, you know, we'll reduce our costs budgetary and as well as Financially And that savings relief is really very much needed We also one of the things I really didn't focus on is in addition to the stream of payments Being lesser to calpers We also were able to create about three million dollars in what I call headroom Or sort of budgetary relief. That's above You know Where where the savings to calpers is and that really sort of begins the compelling argument It's it's a smaller part of the two, but it's a big one If you begin to think about how are we going to manage the budget deficit on an ongoing basis The opportunity of both of those things to you know, save money is really substantial I think, you know, the potential impacts for the system Clearly, it's a large would be a large infusion of cash for making new investments It increases the funding funding ratio, which is a plus for bargaining units and it reduces reliance on the city's contributions Going into calpers next slide, please Well, I sort of talked about it on this slide. So I didn't realize I thought I'd slip past it But in the blue in the middle right above the gray, you see it's the budgetary savings part That's the three million dollars created above the savings from levelizing the pension obligation the existing Unfunded liability structure right now. So those are really two good very good outcomes Next slide, please So I think most of us think of of pobs sort of in two generations There was a first generation Of pobs that were done. We talked about, you know, people try to fully fund the liability thinking it would entirely go away Um, that really wasn't the case You know All sorts of structures were done variable rate structures. I think we found that fixed rate makes it simple standalone pobs were As I mentioned, not necessarily viewed as a credit positive particularly by two of the rating agencies But I think they've come a long way since then trisha if we can the second part of the slide so On the in the right hand column, um, you know, it addresses, you know, the risks that were sort of in the left We talked about increasing the debt burden. For example, that's gone away with gasby 68 reporting requirements We use so taxable bonds For municipal issuers used to be Not they don't they didn't have something called Collable bonds in the taxable market, you know, the taxable market is usually made up of, you know, other buyers other than municipal buyers We have the tax exempt market But if it's for operating anything operating then it's taxable and this is partly operating But now there's there's the 10-year call provision. So if there's a refinancing opportunity And these bonds are outstanding. We would have the opportunity to call the bonds and refinance them Um, we're not proposing to extend the term Of the unfunded liability. It would be the same as it is with CalPERS Credit neutral, I think from a standard and poorest perspective Um, and I think part of the strategy needs that we dollar at cost average into the market next site, please And just very quickly this is I got a comment back from bond counsel today. He said, uh, jan this will take you a little bit longer But um, this is, you know, sort of the steps in the process validation being um, the lengthy component of it But we would have to wait until the probably six months today To do that if in fact we're using the pob strategy, which I I do think we should pursue But also think of, you know, some other Risk mitigating strategy next slide, please This is yes, it's sort of the judicial the judicial timeline here and it frankly probably may be a little bit longer But um, I just included it to to show, you know, sort of what the steps in the process are and the next slide Ah Um, Trisha just go the next one. This is the chart. I do want you to see um, CalPERS history over the past 10 years and um CalPERS is is expected to return 18 to 20 percent in 2021 um, I think the one area's sensitivity is for those of us It's been a long time ago since Standard and poors made the comment that the CalPERS actuarial rate Should be in the vicinity of about six and a half percent. Actually that was made right after the financial crisis and so it's been a long time and there's a reason why the um Pen, you know pension funds are reluctant to do that So every time you lower the assumed actuarial rate that increases the liability Because if you're lowering the return rate, you have the expectation that you're going to have not as aggressive um performance on the assets And so but they're very slow to do that. That's been several years since that was talked about I think at the time CalPERS might have been at eight and a half percent or eight for that matter and so I think the discussion is or what we've been hearing is they might also Lower to the rate to six and a half percent. Uh, perhaps, you know after these really positive returns Um, Understandably because the liability is going to grow at that point and it would have been less than under this So anyway, that concludes the presentation. I know it's a lot to take in and um It's it's a difficult topic, but I think it's an important one um For us to think about how we begin to address to address the unfunded liability And jan I used to know this data point off the top of my head Um, I think I'd heard it from one of our previous cfos But every time it was something like every time CalPERS Lowers their assumption rate by half a point It adds I think it was 20 million dollars in cost to us And you know, I know I don't know I used to know it I've sort of lost sight of it and as soon as I made the comment tonight I was like, oh, I should have known that number, but I don't but I'll be happy to circle back with you Yeah, no, that's great. And it's I don't think it's particularly necessary for for this conversation But it was always good to have that that data point to be able to talk to people about external factors having an impact On on our our long-term finances as well I wanted to confirm I think what I saw from you and it's a number that uh, I know that tom and john also tracked It looked like we're at currently at 70 funded for pension obviously Yeah, depending on which system we're in um We just saw it here Yeah, I had uh 73.4 for miscellaneous Actually, it's about 70 funded Yeah, and it we've we've heard that at a certain point um Once the system falls below a percentage of funding that's that's virtually unrecoverable Uh, that once it becomes so underfunded That the financial mechanisms and tools that you have in place to try to recover Uh, are not available to you to to do that um Well, I think So here's the way I would answer the question. I would say that may that's probably true But what if you're at that level of underfunding it also means you're sort of not keeping up with You know the cost the funding costs on an ongoing basis, but that usually That's as a result of other underlying financial issues So they usually or financial and budgetary issues So those things sort of usually converge But I mean that's really the root cause is you know, budgetary stress financial stress That makes it difficult or impossible to keep up with funding strategies so Yeah, we we've also talked in the past about uh the impact that each of the cities As they fall below the risk that it puts on on other cities who are still in the In the marketplace does moving to the pension obligation bonds strategy Does that shield santa rosa a little bit from Fluctuations with cow purrs based on I'll use pedaluma as as an example. I know that they're particularly hurt in their pension system right now well no You know I mean, I I I'm I'm trying to think of why that would be under other than you know, sort of assets under management And how those are allocated But other than that, I mean I would have to ask cow purrs that question specifically To answer your question because each system stands on its own and and has its own amortizations So I can only assume it's sort of an asset management strategy And so perhaps just as we get bigger bang for the buck the more money we have in our own system That sort of you know gives you scale I would think that that might hold hold true as well for others Okay Tom john A quick question. So a number of years ago cow purrs Put into place what they there's a word that I can't think of they referred to it It started to soften the peaks and valleys Of and they they call is it spreading or they they referred to it as something That's kind of stabilized mitigated some of this and turned it into this Does that do the to the pobs in a sense? kind of Soften the given that they are a constant as far as how much we have to pay each year Does it it does it create a predictability? in our obligation Even even taking into consideration the The flow of the of the market because that there will be fluctuations in the market Well, I mean our obligation would stay the same on an annual basis. What do you have your own amortizations? Yes and so I mean attributable to The city of santa rosa is what the city of santa rosa invests having said that You know cow purrs has a range of investment options You know ours are really boring. They got a wide range from equities to all sorts of things they're in I think a lot of that over prior years I don't know if that was I think that was for other investment related strategies, but I think it's seemingly um, you know We I don't know I can't speak to what's different this year except that we've all had if you've got a portfolio I think everybody's had really good returns. So everybody's had 18 to 20 percent So is that out of the range of performance? If you have a portfolio where you haven't had good returns, it might be your own fault Yeah Yeah, we've all had we've all had it so It's an interesting uh strategy I I um I'd be curious to know who How many municipalities are considering this strategy right now a lot. It's in the appendix Okay, I did see a number of those Yeah, I look it's it's hard not to do it with santa rosa already has I forgot to mention you the santa rosa already has Existing pension obligation bonds We're just not touching it now. You already have pobs. Yeah I thought we did Yeah, and I thought the new city manager told me. Yeah, he actually was on his watch that that happened. Yeah And does that impact the offering at all or or the rate that we could get on them? You mean your your other pobs Um, no, no, I mean it'll be driven by market At the time we come to market. Yeah, I mean what we hope it I mean So pobs are just a notch below the geos Um, I would expect, you know, probably if we were doing a pob to come out at a double a double a minus So, yeah And wait, you know, we haven't drawn the eggs Oh, those bonds are non-collable so we can't refinance them. That was a reason Yeah, we're not looking at them because they there were one of the first generation pobs that I talked about sold non-collable So we can't call them. We can't refinance them. They have to remain outstanding Yeah, or a tender. Yeah, I do I do have just sort of a practical question With the bond ratings the you you said you expect us to come out double a minus and I'm looking at the appendix here And I do see some some a plus some triple a's Uh Well, it's off the geo rating Is that what it is? It's off the off of a even if you don't have outstanding geos It's an implied geo rating having said that I'm gonna caveat it away so I don't know um when the last I mean rating agencies no longer require visits For official visits and the rating application, you know, they now do Their own due diligence at usually at the end of a fiscal year and they will and and they're one of the best beneficiaries of You know the information and disclosure documents where we're now required to publish and so You know, I I I would say I think they're I can't predict what the rating is. I can't predict Um, what the response will be one one of the things I Have spoken about that I am concerned about is, you know, sort of our budget deficits Because that becomes part of the You know, the chop, I'll put that in the challenge column. Um, because I would expect it to come up So but on the other hand, you know, if we're at standard and poor as in sort of having a neutral conversation You know part of what it becomes is look We we're working on the budget deficit. This becomes a big, you know part of the helping Conversation particularly if we're restructuring it in a way that doesn't extend it Levelizes it and still, you know gives good funding and you know With some adoption of policies in place that the rating agencies would want to see It's all of the above Okay. Yeah, and it does it does raise an eyebrow that our power our par amount out of everyone who's listed in the uh The 49 that are listed in the appendix and then the it's big No, and I don't think we'll do it. I think the real I think the real issue is we'll do it in a couple of tranches Yeah, okay. Tom any questions Well, it's kind of like what's the next step in the process? So we get all this data Um, and you know, I'm looking for the sound business decision. I like the tranches versus all in Where where do we go from here? What are you looking for from this? Subcommittee and when does the council get to share the joy of this information? um, well actually I'll you know, so I I'll I'll I'll I'll do this. I would love if you'd have some thoughts I'd be you know What I would love to have come out of this meeting is hey jan We'd like to pursue this strategy Can you know, can we do a study session with the council? I'm sorry, would you say john I'm ready for that. Yeah, well, let's let's do uh, let's do public comment on this item first Uh, then we'll bring it back and see if that's the direction we want to give So if anybody has comment on this item going to hit the raise hand feature all right, I'm not seeing any and No public comment was received via email Perfect reading my mind Go ahead bring it back. Uh, john I think I heard a motion From you. Maybe it was from tom well, I'll I'll go ahead and move that we that we um Bring it back as a study session with council and I will and include in that motion that we Do make every effort to simplify the information to make it as digestible as possible and especially when we talk about the Uh, the must minus thin pluses the risks and opportunities Making sure that we that the that the council is really clear On on that because I think that that will That will move them in a particular direction Um, as far as whether they want to go forward, uh, or not Yes, and I'm supportive of that and for me the you know, it's a business decision So if we do this and it jan if you were you know staff could clearly identify If you do this, this is the desired outcome that we plan on having This is the metric that will determine is this course of action Going to be successful. This is what we're looking for and put it in the plain English because I think it's a dollar Not because it was always you know having gone through some of these conversations as has the rest of the council Was some of the refinancing of debt with you know, our enterprise funds Um, what always gets me is that there's someone and I get the cost of money and the people who write all this stuff up There'll be millions of dollars going to someone to do all this work that aren't city staff I get it in the long run and I would just ask that you show by doing this now It's going to save the city of santa rosa x number of dollars those dollars that will be saved if it goes as planned Will enable us to All right, and I'm in complete agreement. Uh, I'll work with you jan and the city manager To bring an item to council for discussion Okay, thank you. Thanks for all your hard work jan All right. Thank you. Thank you All right, let's go on to our next item and our last item. Uh, it's the 4.3 measure o public safety discussion allen Welcome back. Yep. Thanks So I will try to be very brief with this Sorry about that. Um at our last meeting we talked about Uh Measure o and the potential impacts if Uh, if the public safety sales tax is not extended at the end of Of um 2025 next slide please So just as a quick overview measure o was uh As it was known at the time measure o was passed in november of 2004 Just over 70 of the vote generates around 10 million nine to 10 million dollars a year The revenue is for specific purposes. It does not go into general fund. It is a special revenue Tax And it has an ordinance three dash 26 in the city code that governs the The uses and and just the tax in general The ordinance does require the funds to be spent on enhanced services There is a an implementation plan that was developed Back in 2004 and it's maintained today Every year if there are changes to that plan The council votes on that We have permissible uses defined and um in a citizen oversight committee that oversees the uh How the funds are used As long as they are to intend that they meet with the permissible uses of the ordinance The funding Is is split 40 40 20 with 40 percent going to police 40 percent going to fire programs and 20 percent Going to what was done at the time gang prevention and youth services We now just simply call that the violence prevention partnership next slide, please so One of the things that we were talking about on the next slide is that We would what would be the impacts? Thank you of of that If it was to go away well, there are currently Uh for police programs if it funds the traffic in downtown enforcement, and there's also some technical service Uh positions that are that are part of that dispatch uh totaling 16 FTE with the majority of those being sworn officers Fire services, they're all sworn uh And and it covers 10.25 people that allowed us to expand our firefighting personnel We were able to build three fire stations And still save up funds For additional fire stations without and bought special equipment. So while the fire stations If the measure went away to the fire stations, those are capital Assets they would they would remain it would just be Staffing them would be what the issue would be And then in the violence prevention partnership and youth services, this is kind of a combination between community engagement Which is where the partnership lives And uh recreation, which is where our youth services live The two of those groups combine uh the the final area of our Mezzurro It employs uh about uh nine permanent positions. I will say there are a number of Temporary positions seasonal temps that Staff the programs on the youth side This is where our choice grants come from And so not only are we doing youth programs Out in the neighborhoods that are targeted to those neighborhoods and helping folks with a number of different or helping kids Have a number of different activities But we also have the choice grants where we give money out to our nonprofits That also serve those all of those things Because Mezzurro our special funds would The funding source would be lost for that. So what that does is it presents a challenge to the city in that either a They just simply go away with the funding source or uh, they Would merge into the general fund of which there is no Source to do though. So, uh, that is That's just not something that that would work from a financial standpoint. So Um, I think this was the last slide. I did include we can go to the next one Um, uh, oh no, I did have this. So the the revenue collection would cease March 31st 2025 some expenditures may continue as as the balances exist, but ultimately Would go away as there would be no revenue Any positions tied to the program would be eliminated. So kind of illustrates what I was saying before and now I believe The next slide Yes, so community impacts, uh, so Um, I actually included a number of those. I'm just having them as an appendix with this I worked with all the the uh, program managers To know what those were I figured that we would have Limited timing in this one. So I wanted to have it in the the presentation But maybe not something that we necessarily talk about right now um Instead opting to hit to the highlights of what those impacts are of the different programs So with that if you have any questions, um, I would be happy to Answer them John or tom You know for me, I'm not sure what feedback you want. I'm aware of all that we have What I was hoping we could have the discussion. Where do we go from here? Yeah, so, uh, sorry about that I yeah, I blanked on on that. So I have reached out to our polling group I do have a a proposal for contract with them To do the as we talked about the last time The the polling in uh, july august timeframe education informal education starting in january allowing the The the kerfuffle of the recall election to kind of take place But it's still allow us to get going do another set of polling toward june of 2022 to make sure that we're still on track and and then Get to council In july of 2022 To get an item on the ballot for For november of 2022 so From what I heard on the last time Which was there was a priority of having this extended so I'm I'm kind of moving along the area that we want to get our Our polling questions developed and get ready to get in place and eyeing 2022 as the ballot um As our as our goal do you have that on the ballot in 2022? I guess I'm trying to think if this is a question or comment because I get the timing is very important, but also I'm Significantly concerned about what we'll be talking about on june 22nd with the cuts to public safety There was six police officer positions five fire fire positions so If that budget goes as submitted by the city manager in may are these the same impacts specifically talking about You know the first slide that you talked about um Some of those ancillary not just patrol officer, you know motor officers uh downtown enforcement team um Is all of this making the assumption that we're losing those five police officer positions as outlined in the may preliminary budget So well the impacts that i'm talking about here are not in the general fund And I believe the ones that you're talking about that are folded into the budget are simply general fund positions Right. This is an addition Wouldn't exactly that exactly that's what i'm saying is that and having talked to the chief This is just the tip of the iceberg and that's where i'm thinking dependent upon again how the budget goes What we decide on june 22nd But I I guess in chris, I don't know if this is something that the mayor sets up But having some groups to start working on this because I think the message Does need to change what we pass what the voters voted for at the Origination to measure out is going to have to be different and I get the polling I could probably predict what the polling would come out with But having a group of people talking about it and not at the last 15 minutes of a long-term financial planning audit subcommittee meeting To actually start getting the work of this because I think many of us who are engaged in this work Understand the ramifications if measure o does not Pass I think the big things are timing and are we going to make any adjustments Before we choose to go back to the voters and i'm not sure how or when that would occur Yeah, and I think I think that's I think this is intended to start that conversation tom So alan is laying out what the polling looks like And so I think for us as we develop the questions and alan when when was the first poll suggested for was it august in the Mid to late july to mid august time frame Okay, so trying to catch that area before people Go on labor day vacations Yeah, so I think we I think we need to use that as an opportunity tom to test a couple of different messages including What the support level is for a reauthorization in 2022 even though it's more than a year out And then testing to your point about are there changes that need to be made In the measure what are the components of it that that people are supportive of what are the components that people aren't supportive of And and what are the needs of the city to be able to match up to those two conversations? I don't know where and how we do it. So what I do know is Once we determine that we are putting something on the ballot We stop talking about it, right? You've got you've got an external committee that Individuals from the from the city can be involved in but the city can't use any of our resources on But in the preparation of the ballot measure we can And so He I guess I guess my question for you tom is What would you like to see next if we've got this polling that's coming? Would you like to actually see the poll? in july And that could be the main focus item for long-term finances for us to look at that poll And give the thumbs up on the poll on what questions we want to test And then bring those results back and then chart a path from there about what the discussion looks like All right, that's one all what I would like would be more community participation Because I've ventured against some of the choice grant awards over the last 20 years If you told some of those because and again, it's it's part of a marketing issue just from measure Where a lot of people don't know. Oh, I didn't know measure did this Well, if we lose this all that's going to be gone Right and so I'd love to hear the feedback and also hearing from the recipients I'd love to hear some police department staff positions were funded from measure Fire department staff that are funded from this position. What are your thoughts? What questions should we ask and not just have the three of us Come up and give feedback to alan about what questions do we want the pollsters getting more of that total Collaboration from the community because we're going to need all resources to try to Get this reaffirm and so with that and again, that's where I'm a little Unclear as to whether it's you know Another subcommittee for just the measure o to kind of have those conversations on a more regular basis Stand alone or continue with it as part of this Honestly, because I I'm not really clear because we are so early and I know you talked about the timing of it where you know 2024 might be that viable option. I know that scares a lot of people in the community Yeah, one and done, but Yeah, I hear you Perhaps this is a discussion to be had at the council the full council level as well and and to your point Maybe we structure a study session where we can talk about Exactly what alan just laid out in terms of a timeline if we were to go towards 2022 Provides a space for the community to bring forward the stories as well as bring forward any Discussion about whether we need to change what that looks like or if we even want to go And try to try to renew the measure Yeah, I'm open to I'm open to that if we want to have a study session on that at the council level I think it's going to be important to have a conversation about reforms and how in many ways reforms are separate from how many people you have Providing the services to the community you can reforms are not dependent on reducing The number of our officers on the street and having in a sense being able to separate those two conversations because some people may be making an assumption that having that measure oh In for somehow supports a status quo And and we need to so we need to have some conversations about the reality of what's the the benefits of measure oh and they're really Doesn't they're they're not they're connected in a way But they're it doesn't one does not necessarily inform the other You can have reforms without reducing personnel And reforms are important But there may be people that are connecting if we if we reauthorize measure oh then Then somehow we're ignoring reform and I and I I don't believe that but I I think we need there that question that conversations It's going to come up one way or in one form or another. I believe and we need to be able to Answer it and respond to it And it also is obviously tied as well um everything we do with measure oh is tied as well with Our equity diversity and inclusion work that we're trying to bring forward so it that sounds to me like a a potential next step is Hate to keep adding work to the council workload But a study session where we specifically talk through these different components and elements the timeline and start to formulate a discussion around Whether 2022 whether 2024 or whether or not at all But we've got to give an opportunity for people to weigh in I think I think that would be helpful even just as if you go through more of the community impacts with fire A lot of the efforts that council has been talking about Obviously when measure oh first pass we didn't have the tubs fire But just you know in slide seven loss of funding for nine positions Which is the loss of a full-time engine company closure of a station. I you know, I don't know how many members of our Council understand that's the gravity of which if we do not go forward A lot of what we've been asking for even just some of the Advanced life support stuff One of our initiatives everyone's supportive of this coach program that we're working on that's going to have an impact on that too So it's complicated. So I think a study session and starting to educate the community and our council I think would be a good step I'm sorry Alan Yeah, no, it's not a problem. All right and So there's only two there's only two council meetings in July So there's one on the 13th. I believe and one on the 20th if I read the calendar right So Let me let me do this. Let me put this on the list of the things that I need to Reach back with Jeff on city manager and and see Kind of where we fit this in and how we get this going to where we can kind of keep the time flow Going forward and still get that out there plus just on the Abundance of caution I'll make sure what parameters that we have from a legal standpoint of what we're able to actually Do in the study session. I don't think it's a problem. It doesn't sound any different than our than when we present our annual report So I I think that's what we're we're kind of looking at but I just you know I just want to kind of double check there as well Yeah, like I mentioned Sue was watching this meeting. So she'll probably correct us and make sure that we don't overstep I'm sure I'm getting notes from a lot of people after this You know one of the things too that I know having been around Back when it passed there was you know an independent group that actually was forming, you know Many of us know who was in charge of that That takes time to identify because that person is passed that takes time to identify this committee and get the people Are willing a lot of work is going to need it to be done on this type of issue And that's why my concern is we can't wait for the last minute because you know Look at some of the other efforts countywide where there wasn't that United group working to try to get this passed just thinking you know For whatever reason they think it's automatically going to pass without a campaign And I don't think that's going to be the case for us So I don't want to wait too long to get all of our ducks lined up to actually do this in an aggressive fashion Okay, let's go ahead and go to public comment on this And I see uh, I see the chair of the measure o oversight committee Ellen go ahead Sorry, I had to unmute myself Um, can you hear me now? Yep. Okay. I know you've all heard it from me already That I really think we need to act on this sooner than later. So Again, I appreciate all the comments about that John. You're absolutely right that there is already Comments being made um are already comments being made at this The meeting last night the citizens oversight meeting last night about reforms And reducing personnel being totally conflated. So, um, I just hope That I'm really glad to hear you're saying a study session Is something that we could possibly pull together in july and start educating the public about the benefits of what we're doing And possibilities of things that we can change so that there's more of a comfort level With funding the police department with these funds That's really all I needed to say Are you all still there? Thank you, Ellen. That was uh quick. We'll see if there are any other hands that uh are up I'm not seeing any No public comment was received via email Okay Well, I think we've got some direction there. Alan will work with the city manager and bring that forward And then tom you and I could have a conversation too about Some of the stuff that we can't do through council. How do we start to build? some of that that discussion okay With that right at six o'clock Can I make one more the request or recommendation? Yep So when I got the invitation for this it was scheduled for an hour So could we either when the invitation goes out block out the the two hours? Because I don't see the I get the invitation for the agenda. So I have no idea how many items are there um Just for time management. It'd be wonderful either smaller agendas or Tell us to block out longer time frames. So That works. I think uh in the in for the foreseeable future. I think that my uh mantra is going to be planned for more time Uh, just because we've got so much that we're all trying to work on Uh, but we'll make sure that we address that and get that fixed for the next one Yeah, just send the additional hours. I appreciate it. Thank you. Yep uh, and we uh Because yeah, we're we're button up right up against the mayors and council members A selection committee meeting So next meeting Agenda items I'll go ahead and I'll work with with allen on that unless uh, john or tom have anything in particular that is uh Nipping at them I will I will add that I believe on the 24th. There's a special meeting of Of this and I I believe it's for the Red term sheet So just as an apply I don't need to add anything our our plate is full You know All right, great then with that we'll go ahead and adjourn. I'll see you all soon. Okay. Thanks