1652770800 05/17/22

Yes, I did. Town. Already. Good afternoon, everyone I d like to call our meeting to order and we ll our clerk, Please take roll. Yes. Council member Peterson Council member Bolton here, Mayor Pro tem Posey Here Glaze Here Council member car here. Council member Mosher Here Council member comic present. Okay? They could have any speakers. They speak. Yeah, okay. Um, city Manager Joyce. Our chief Financial Officer Dale Bosson will make a presentation. This evening. Oh, is there a public comment? First, I was going to ask. Yeah so just very quickly. I have a power point. I need to announce. Please was received city of Pennington Beach proposed fiscal year 2022 23 budget review submitted by Dale Bullis in our chief financial officer. And. Then I m going to look to see I. Don t have anybody here in person? So let me just check on anybody online. No. We have no one signed up to speak. Okay, then. Thank you. Good evening mayor members of the council. Um it s great to be here today to present to you the budget that Tom her bill, our city engineers here to present with me the sip budget as well. Before I start. I didn t want to. Thank. Um, our budget team They put in a lot of work to put together the proposed budget spent since JANUARY compiling all the numbers. Working with departments, the analyst, they re want to thank all the department head analyst Um, my team Serena boob in Highmore budget manager Glenys Litvack Social here on the corner there and also Serena did an incredible job putting together the Uh, big 500 page document that you all have, Uh so I just want to thank them. All right. So, uh, I ll be going over a number of items is of our presentation or review. Um. Take a look at our current year. Budget are proposed budget for next year. Tom will go over the c, I p, and then we ll talk about the key city policy considerations. For next year s budget and then talk next steps. Alright, so first we re going to talk about This current year s budget before I do that, I would like to just set the stage talking about the larger u. S economy and what we re seeing here locally in Orange Cou. As you all know we ve been recovering from Covid, Um, the last number of years, although there has been a bit of a signal for caution this last quarter we saw strong gdp growth of 2.3% and 6.9%. The latter half of last year, But we did see a Negative 1.4% drop in gdp this first quarter And the reason for the decline this past quarter is because of the armored car on restrictions and some parts of the country. And as you know, there s been a scale back on government, the government assistance programs. Ah! I did. Sit into a u c l a Anderson forecast last month late last month. That s focused specifically on Orange County. They talked about the labor markets and tourism coming back, and we re seeing that here locally actually restored to pre pandemic numbers, and we ve seen that here with our hotels. Um and They say that we re going to actually continue with a strong strong outlook. Moving forward. There s still a strong household balance sheets. People are still healthy. Their unemployment is low. Um 3.1% here in Orange County. Developments continued to surge expected to continue to surge and as you all know, the housing market market has been pretty hot lately. Um Were likely to face some headwinds there. And there s a number of economic items that we re taking a look at as we move forward. We re monitoring closely. As you know, there s been a lot of geopolitical issues. With, The. Russia Ukraine crisis as well as inflation. It s been at a four year high at 8.5%. Supply chain challenges rising interest rates. Feds just increased. The federal rates by half a percent recently and there s late labor shortages. So for our budget for fiscal year 21 22. We re looking at a surplus with modest surpluses over the next four years, and that s largely to do to city councils great decision making. In the last couple of years. Citizen great moving forward in the future. Ah, and I ll talk more about that in the following slides. Fiscal year, 2021 concluded the year with a $5.2 million surplus. We started actually with a 10.9 surplus. Then. We did some urine transfers per councils Direction $4.4 million in capital infrastructure. $1.3 million in essential capital equipment. And then fiscal year 2021 which is this year? We re projecting conclude the year with a $3.4 million surplus. And of course, that s subject to the change as we end this fiscal year. Um, this year. We also have historic infrastructure investments. 130% increase from prior years to 11.5 million cc I p budget increases by 57% to 39.3 million And. Then. We had the assistance from The feds through the American Rescue Plan Act of $29.6 million And Council approved the expenditure plan. For projects for those funds. Alright. So. Now. I m shifting gears. Talk about our proposed budget for next year. So our proposed budget I m happy to say is structurally balanced. We actually have a surplus of $1 million, which consists of revenues. At 253.6 million and expenditures of 252.5 million. With. Like. I said again Surplus of $1 million What s also included in this year s Ah next year s budget is continued Infrastructure investments General fund transfers into infrastructure increasing by 17% to 13.5 million And c I p budget increases 52% to 59.7 million This shows or revenue, so we ll talk about revenues first. Revenues is $253.6 million. And as you can see, we have a very diverse revenue base primarily appropriate tax just under 40% sales tax just above 20%. And. This is a nice graph showing Were. Our. Revenues were before Covid. During covid and recent recovery. Um So you can see there was a decline of 4.6% due to Covid. And then we see a nice recovery in the following years. This next year. We re anticipating a 3.4% Increase in our revenues by $8.3 million to 253.6 million. And just to highlight some major variances. In our revenues, property tax. We see that increasing by 5.7% to 98.3. Million dollars, Uh due to the heated Housing market sales tax increasing 2.1%. Affected by 2 $53.3 million And that s true due to strong consumer demands across all industry groups and due to inflation as well. Prices have increased, which has contributed to our sales tax increase as well. R t o t tax or a hotel tax. Um We see that increasing by 8.2% to 14.5 million And that s actually higher than what it was pre covid. That s due to reductions in our in travel restrictions. And, then revenue from other agencies that s decreasing by 26.7%. This is not something that we typically budget during our adopted budget because it s reimbursement base. It s a strike teams. Um, we typically take it to counsel. During the mid year budget once we have an idea of where we re going to And that And then finally, charges for current services increasing by four point 9% to $26 million, and this is primarily attributed to the emergency medical service transports increasing recently and also the billing rates increasing Also wanted to provide an update on our fee adjustments. Um The budget that we re presenting that s included in the budget does not have any adjustments to potential, Uh, fees fee adjustments. Just a reminder in MARCH. We Um Ask our Council directed staff to review the master fee and charges schedule. Um with the Finance Commission and provide any of those recommendations to sit for City Council consideration. We ve been working on that diligently the last number of months. We expect to take that to the Finance Commission on MAY 25th and provide recommendations for council consideration on JUNE 7th. And. This is a nice summary of all the different, um Revenue sources. Um Again the projected revenues for next year is $253.6 million, which is an increase of 8.3 million. Which is 3.4% increase from what we expect to see this year. And then shifting gears to the expenditure side. Our General fund. Proposed expenditures is $252.5 million. And since we are a service organization, Um Our personnel services consist of over 60% of our budget. And by department over half of our budget is public safety and police and fire. And another 20% for non departmental, which includes our transfers to infrastructure equipment that service such and utilities, things that are not department specific. Staff is proposing for new general fund positions for our budget. In, the city clerk s department, one record specialist to centralize the management of our public records request. Our City Manager Department one executive assistant. This is a restoration of a position eliminated. During covid as to provide administrative support to city manager and assistant city manager. One social worker position to assist in the growing homeless caseload within the homeless and behavioral health division. And, then just to transfer the non sworn, um, home homeless and behavioral staff from police department to the city manager s office. Than for the Finance Department one, Accounting tech two positions. To process accounts, payable invoices and serve as a concierge, so it will be a shared position. One. Full position was eliminated during sip. We re going to Share that position between those two functions. Then for other funds staff is proposing an additional net edition of five Positions in the public Works department. Eliminating three positions due to the implementation of the automated water meter infrastructure. And. Then in turn two Um Meet different needs because of technology. There s an addition of five positions in the water in utility group, two hands water system maintenance. Focus on air quality mandates. Water production, flood control reporting and address high volume of service request. Addition of one traffic maintenance service worker position to to improve traffic signal maintenance response and one Contract administrator to administer construction contracts within p And, Then Finance Department one senior account tech position the Finance Department For, our utility billing group. And. This shows the trend of our positions. As you can see there was a drop due to covid through our restructure plan. And then, um, we re we have we proposing addition of nine fte s for this next budget, which is 2.5 fte s higher than our pre covid fd numbers. I also wanted to provide an update on our pension plan. In MARCH of last year. City Council approved refinancing 85% of our Pre existing pension debt at an incredibly low rate of 2.9 to 5%. Um, able to realize the saving of $167 million during the next 24 years. Great financial decision there. We re expecting annual pension. Ah! Pensions to be up to $17.4 million less than an annual basis. If. We did not refinance, so that s significant savings th. Ah for next year s budget, our pension payment within our budget is $28 million. If we didn t refinance. It would have been $37.7 million, so Just next year alone. We re saving almost $10 million everybody but dancing? Yeah. So, um So last year, Calpers had incredible returns. 21.3%. With that are Calpers funding level increased to 102.8% versus a 76.7%. Funded if we didn t refi And then because of that we do not have a schedule. You l payment to Calpers. In fiscal year 23 24, I ll show you a nice graph of the next slide that illustrates that So. What. Does that mean refinancing is just the better option as long as Calpers is able to achieve and maintain a market rate on the long term. Of greater than 2.9 to 5%, which we certainly expect their target rate is 6.8%. And as part of the pension debt refinancing the city also adopted an unfunded accrued liability pension funding policy. And basically, it s Helping us have disciplined set aside additional funds every year to find if if Market rates or the economy. You know there s volatility in the market as Of course we re seeing this year. So in the budget. We have $1.4 million transfer. In. The proposed budget to pre fund our pension liabilities through our section 1 15 Trust. And. I like this graph. So. This shows a comparison. Between refinancing and no free refi. So the blue line is our payments if we didn t re fly by and the bar chart shows what our payments Are because we did the refi, So as you can see. The bar chart and the amount of payments that we re paying is consistently lower than what we would have paid if we didn t refi so that that s a It s a great graphic showing the great decision of what council did All right, and I did want to point out like I said earlier in fiscal year 23 24. There is actually no. You l payments because of Calpers is 21.3% return. The future u l is dependent on Calpers return. So this year if Calpers ends the year in JUNE. With less than this. This 6.8% that would affect our payments. There s a two year delay so fiscal year 24 25 affected so we still Within our long term financial plan are anticipating that we re going to have a payment just to be Prudent and, you know, planning for the future if we do have to make additional payments. Alright. Here s Our five year financial outlook. As you can see we have a projected surplus. In this current year of 3.4 million And. Then we have modest Surpluses in the next four years of about a million dollars. Alright with that. I m going to turn it over to Tom herbal over c I p Thank you, Gail. You ll hear me, all right? Well. Good afternoon Mayor and council members. It s My extreme pleasure to present the c I p for the next fiscal year, which is really our major planning tool for our infrastructure. Shown here is a picture in your lower right. That s public works. That s all the great people that make this happen. 24 73 65. We got 200 people that make this ship run. And. I want to thank them because the sip is a small piece. It takes everybody to make it happen. There are part of it. Everybody in this room is a part of it, So. It really is a great team effort with everybody. Also. I wanted to give a big thank you to Chris Tonio, principal civil engineer who s sitting up in the peanut gallery up there, And. Also Ken deals are administrative services manager. And Sarah White Cotton are administrative aide there the heart and soul of assembly in the c, I p couldn t do without him. And. Of course, All of this is in line with the city strategic planning goal of enhancing our infrastructure and parks. And this is a slide that s going to tell the tale. All I gotta say is Wow. We had one heck of a year. Not to go into too much detail, but we started or completed 91 of 100 and five projects this last year. Public works has delivered through these unprecedented times and on top, almost tripling our c I p People working remotely covid staff getting covid supply chain issues. Everybody sees it right now, Um. We re all struggling with that, but I couldn t be more proud of being part of the team and also thank all the departments again because again it takes a vill. With all of that it was still super challenging, but thanks to the support of the council and city management that allowed us to hire a bunch of consultants to help us with all of this, and just the super skilled people we have in public Works department. We reinvented our project delivery system. We used to deliver this stuff in house, so we ve gone to consultants to help us deliver what you re going to see today and we couldn t have done it without everybody support. So now I m going to go through the slides just to highlight a few of our accomplishments this year before I get to the actual c I p Mm facilities category. Roger Senior Center, We paved the parking lot a couple of weeks ago so that one is undergoing That s 2.4 million replaced a bunch of lighting. It feels one and two at the sports complex for half a million. And. We replacing a bunch of aged equipment on our facilities. Another project that everybody likes to see. Bluff top under parks and beaches category $3.5 million. We got a great grant. To make that happen. Phase one railing complete. Phase two is underway. You ve seen all the dust and everything going on out there so that is scheduled to be completed by the end of next month. And. You re probably not much like 47 palm trees going up in the last week, too. Also under the Parkinson beaches category. The Central Park restroom, The new one near the library, that one s open and being used. Everybody saw the great playground equipment. We had a great grand opening. Where people are slinging down, you know, Ziplines and all sorts of good stuff. Lake Park clubhouse as well as the beach parking lot where the camping happens. We renovated that Continuing on with a few more accomplishments in our streets. We re currently starting the rehabilitation of two miles of arterials, and everybody sees all the construction going on downtown right now, with zone five. We re going to finish paving by the end of the week. And that s a great one to get off our plate and ready for summer. Some of the bigger cost accomplishments. I like to call our sewer list stations are big digs, so we spent 10 million this year. We did Slater list station and save reckless station and we also lined a bunch of our aging sewer mains for a million dollars. And then finally, in our water category, we did a major water main replacement in the Edwards varsity track for 2.5 million. Now, why are we here today? My size. Um As Dale mentioned for the previous 10 years r c I p was about $25 million. This year 40 million Next year 66 million And. What are our funding sources shown here are the funding sources. The Largest this year is actually are Infrastructure fund, Dale touched o. And. That s a 20 million this year going into the sip. The. Next biggest source is grants and other funds at 15 million. Those are things like park funds, traffic impact fees, things of those Things of that nature. So as I go through the presentation all occasionally provides statistics on our infrastructure with the goal, just letting everybody know. This is a big small city. We have so much infrastructure. We re doing a great job at maintaining it, But I d like to remind everybody how big it is. We have 100 and 14 miles of pipelines 15 flood control stations. Huntington s, unfortunately is flat. 1800 catch basins. And, then onto our drainage category this year budgeted at $12.8 million The big nut on the top. There is the Heil Avenue Storm Water Pump Station at 11 million. We got a $6.5 million hazard mitigation grant to help us out with that. We re also planning to do design for repairs to the one of our aging channels that has some cracks were also continue with our five year program of upgrading our storm drain pump stations, both for based And facilities. And now I m going to move into our infrastructure or facilities So we have 300 plus facilities, community centers, fire stations, restrooms appear you ve probably seen them. They re scraping the pier pilings right now. They re out there getting all the muscles off the piling so we can maintain the pier. We got library senior centers We actually have 16 underground fuel storage tanks in the city, and we have eight fueling islands. Facilities category. 10.4 million is planned for this next year. One of the big ones is we re going to build a joint youth training center. Out of joint powers at two million. We re going to start the design on the Central library child team concept. Which is in the lower end of the library. Another Big one that everybody is involved with is the Oak View. Community Center Rehab for two million Continuing on with facilities were starting the design to rehabilitate the pd heliport hanger for 200,000. We re actually going to start the reconstruction of pds Communications Cen. For 1.2 million. And then also, we re looking at l. A 2028 coming down the pipe. So. We re putting some money into looking into the planning for that. Now on to our neighborhood. I d love to say this. We have 316 miles of residential streets That s from here to Yosemite. So if you were to drive all our residential Yeah, you get to Yosemite. So. You think about that In that scale. It s a lot to maintain and r p m p that I ll talk about in a little bit. Does a great job of getting us there. We have 33 miles of alleys. 632 miles of cytokine, parkways and formula Square feet of parking lots. So in the neighborhood category. $4.2 million are big One is the residential overly, which is Zone two and Zone two is on the east side of our city. Too far. Zone two, is actually bounded by Garfield in the North. The city limits to the East Bouchard to the West. In Hamilton s to the South. And that will actually wrap up our 12 zone program sort of the last zone of our 12 zone program. Then parks and beaches. What. Do we love 3.6 miles of our beautiful beaches. Plus. We also have another 1.5 miles and sunset. And we have 70 plus parks within the city. In, the parks and beaches category plan on spending 3.2 million this next year. Harrington Blessed stabilization project, which is we got some erosion happening at the bless we re putting $400,000 to wrap up the design and start permitting with coastal In addition, We have multiple improvements to, um are playgrounds And to our community centers in the parks. Now onto our sewer infrastructure. We have 52,000 service laterals in the city. 27 sewer lift stations. Remember. Those are about five million each, and we re currently towards the end of the replacement program on those And we have 360 miles of sewer pipeline. And this next coming year or sooner. Improvements 8.2 million. We have sewer lift station improvements. That s actually our Davenport list station on one of the islands at 4.9 Million, and we ll continue on with our annual sewer lining program. And also upgrades to the Edinger and murdered channels. Our sewers. Now I m on the streets and transportation. We have 100 miles of arterials again. We talked about the residential 78 miles of bike lanes in the city. That s actually something to be proud of, and we have 143 signalized intersections. And under the streets and transportation category. Everybody wants to know. How are we doing? Are. We doing so under streets and transportation. Were graded based upon the pavement classification index, the upper right there, you ll see. The ratings that go from very good to poor. Um. The residential inspections are done on a four year rotational program. And a p c. E from 0 to 59 is what we say We re going to rehab the street, So. It s anything that s poor to very poor. We re digging up the whole street where we doing I. And, as you can see our overall pc in the city is good and with the current funding that council has put into place, it will be increasing as we go forward as you see on the Chart there were only at 2020. I know it s 2022. But we do the pmp every two years and we re just about wrapped up with it. And we do see rpc I increasing to about 80. Over the next few years. And then in the future, as long as we maintain that funding, we re gonna keep seeing that inch up. Remember, it s like trying to push an aircraft carrier. We go a little bits at a time. And, then on to the streets and transportation category. Almost $18 million went to invest in our streets this year. Arterial Rehabilitation 6.2 million arterial beautification. A min Our downtown revised revitalization if I can say that, right is 1.8 million, and we also have a bunch of streetlights that we re gonna do in the downtown area. Continuing on with streets and transportation. We re gonna be installing a new signal at Heil Fire station. It needs one so much traffic on Hyo in addition to the traffic signal synchronization on both avenue. And we re actually getting to start into doing some maintenance on our bridges. Just a lot of minor concrete work, but they need a little bit of tlc going forward and we have bridge rehab at 3.8 million. And then onto our water infrastructure. We have 611 miles of large distribution mains, and this is the one I love to say we produce 75% of our own water in the city, and that s with our eight wells that we have going right now. And under the water category. We re planning on spending 3.3 million this year. We need some upgrades to a couple of our water. Well facilities. Another water main replacement project at 1.25 million And that concludes my presentation will save questions to the end. I m going to turn it back over to . Thanks, Tom. So. Um. I would like to talk about some key. City Council policy feedback that would like to get today. Um there s three items. First is the American Rescue Plan Act and some administration changes that would like to do there. Second to review the projects requiring additional funding. And. Lastly, the circuit Rideshare pilot program. So first I wanted to talk about the American Rescue Plan Act just a bit of background again. Um Feds awarded $1.9 Trillion to Aid. During Covid delivered $350 billion to local agencies. Ah of that amount. City 100 Beach is receiving $29.6 million split into two equal payments. We did receive $14.8 million last MAY. We expect to receive the other half of that sometime before the end of the month. We haven t received it yet. On SEPTEMBER 7th of last year council approved the artist spending plan, and under those guidelines, it allows us to report lost revenues. We calculated our lost revenues, according to the aarp guidelines are numbers $52.7 million to that we have more than enough and what that enables us to do is to have broad latitude. To deploy the funds for governmental services. And. If you haven t heard there s been some efforts on the federal level to claw back any sort of unspent. Our public funds. Thankfully, they were unsuccessf. Um staff is recommending to minimize any sort of future clawbacks is to make an administrative teams so that we would fully expand. Those are the funds on police and fire personnel in the next fiscal year. That would free up General fund funding in the same amount. To establish a new hb recovery reserve and we can use that to go towards the same priorities that was approved. On SEPTEMBER 7th. Um some other local agencies in our area are doing the same administrative changes like Long Beach. Tustin and Irvine. So. What is our budget look like with the armpit change, um not too much change. Um In the end, so what it will do is we ll report the arpa. Funds revenue here in the top $29.6 million, increasing our total revenues to 283. $0.2 million. We do have a portion of the rp funds budgeted in fiscal year 22 23 That is the $16.1 million that you see there on the screen. And then, um, the other funding Woods place in a reserve hb recovery reserves of $13.5 million and that would go to council individually by project. For a separate approval. And in the end, we end at the same place with that surplus of $1,000,001 million So. These are the projects that are included. Within the fiscal year 22 23 budget I won t go over all the projects, but those are the are projects that was approved on September 7th of last year Total of $16.1 million And the remaining would be placed in a reserve. Uh $13.5 million and as you can see on the bottom, it totals that $29.6 million. So Um, we re still want to accomplish council s priorities. Its administrative change We reduced the risk of claw back so I would like council feedback. Um on that administrative change. Next. I wanted to talk about, Um The projects and review the projects requiring additional funding. The first seven projects that are listed here are are part funded. The last three that are listed are sip funded. And the projects listed in most cases cover only the planning phases and will require additional funding. So in this chart, you ll see the amount that s currently funded in the third to the last column. And then, um, estimated additional project costs. Ah! We have Preliminary estimates of what the project will cost. So. For example, in downtown revitalization. We already have $1.75 million from arpa. Estimated costs for the project would be between 8.2 million to 17.3 million, depending on what council decides to choose. And possible funding source for that would be General fund. So of all these projects. There s various funding sources that we think we can used to fund these projects. Um First General fund. There s grant opportunities and staff is definitely committed to pursuing all grants. That are available to to fund his projects. Right now. There s Knows, no grants that are available to fund these projects. There s also public and private partnerships that we can use to fund the projects also for the healing center. There s housing funds that we can go towards the projects. Again. We re pursuing grants for that for the park projects. Ah future park development impact fee funds. Would go towards funding those projects. Um And I think that s it as far as funding is concerned, So, um, we wanted to share with council that we do have limited resources and that anything that we don t aren t able to get through grants or public private partnerships. That would be covered by General fund and I ll share with you What we have so far as far as funding in our reserves that it s the next slide here. So possible funding sources for these projects. We do have a strategic initiative reserves. Of $16.5 million That s general fund monies. On allocated funds. Which is originally allocated to the Talbert Channel Trail project. That s rp funding. That project was canceled. s $272,000 that could potentially be allocated, Uh General fund estimated surplus this year, and that s subject to change. But right now we re we re projecting. It s going to be $3.4 Million, and then the $1 million that I share with you on our five year plan. And, then we do have proceeds from the prior city Managers Housing agreement. Of $1.66 million. That s general fund money that we can deploy as well. And then the California Superior Court decision that ruled in favor of the city. Related to this solution. The Former d a. That s $5.2 million that we have 1.5 of that is General fund. The $3.7 million is Housing fund. And, then any state and federal grants opportunities. Definitely work. Continuet Feature park development impact fees. Like I said earlier public private partnerships so adding up all the general fund funding here that s available. We re looking at $23.1 Million in general fund funding. $3.7 million in housing funds. Um annual $1 Million General Fund surplus on an ongoing basis and the $272,000 in hb recovery or our defense. Like I said. We do have a lot of needs that are unfunded. The total estimated cost of the projects I share with you on the slide earlier. Not Is between 78 to $122 million. And, then four of those actually are Costs that are undetermined at this point. So Council feedback is requested to determine the priorities of these required, um these projects that are requiring additional funding and more specifically, we re looking at direction and . On the funding priorities for the General fund. $23.1 million. The $1 Million General Fund surplus. And the $272,000 hp Recovery Fund also Um. We re looking to see if counsel is interested in setting aside $3.7 million of the housing fund that from the d a case For the healing center and then finally to set aside all the current year surpluses that proceeds that I talked about From, the housing agreement and the Arda legal proceeds. Into the strategic initiative reserves to accomplish whatever council decides is your priorities. Deal. Can. I. Add to that for a second respect to the first bullet. It would appear most appropriate for my Perspective only That, the new city manager worked with the City Council and into the fallen early next year. To learn from you what your priorities are and as this group would change so that he can be very familiar with what your priorities are. The Money isn t going anywhere. It will be available for you. And of course, we re optimistic that some new general fund resources might become available for your for your use for important community projects. We certainly do present to you a recommendation on item two to use As the success of the City Council and then city manager Fred Wilson and the City Council at the time to challenge a previous decision concerning the dissolution of the redevelopment agency for you to consider the use of the $3.7 million to make The healing center. Um more of more viable in a very viable and even more competitive project as we would seek additional funds to make that aspiration of reality. Thank you. Thank you okay? Thank you, Dale and thank you so much for the comprehensive, Um I m Sorry. I m Sorry. Okay. Thank you. Okay. Thank you were finished. We got one more excited. I m sorry. We. We got one more. All. Right. Let s get your rhythm back there. You got it. Okay. Very good. We got it. Thank you okay? The final um, item that we would like council. Feedback on is the circuit ride share program that was a pilot program started JULY of last year. Um, Basically, it provides Free rides to visitors in the downtown area. Got a map. They re showing the areas that serviced Um it s a depending on the seasons we had between 4 to 5. All Electric golf courts that were able to transport people around that area. Um. He wanted to provide some stats to to you. The ridership. Um The more people that rode the ride Share program between 7th 1000 to 11,000 per month average Wait time just under eight minutes. We did do a survey from DECEMBER of last year to MARCH. There were 742 riders that responded. 91% of those writers were hb residents. 98% wanted to keep the service and 82% of who use the service visited local restaurants and businesses in the area and the most common response was it s free and it s electric. The total cost of the contract is 744 174,000 total cost of the city s 350,000 and the city would seek to offset the cost. By pursuing grant funding private part sponsorships and advertising revenue. So councils feedback is requested to determine if you would like to allocate 350,000 of the $1 million surplus that we talked about. To be used to fund this ride Share program. And then Just to summarize. We re looking for feedback for three things on the American Rescue Plan Act to make that administrative change. From art but to hp recovery Funds. Their number two to provide feedback about priorities for the general funds. Funding that we we know about setting aside that $3.7 million for the Healing center and said his setting aside on all those ones that I talked about that our general fund into a strategic initiative reserves. And then finally would like feedback on the circuit Rideshare program to allocate that $350,000 of $1 million surplus. And with that, uh, can I thank you now? Yes presentation. Thank you so much. It was very thorough and the best part I think is Things are in the black. And. That s that s really special expectation when you come to budgeting, Actually, I do have a question and I was hoping that maybe Mr crumby could answer this and I don t know if it s Uh, How you can come up with money for the lighting project that we had talked about on the McFadden Bridge. Happy to thank you. So the Lighting on the McMahon bridge over the four or five project is something that s emerged since the preparation of the c, I p. And. So. We ve been discussing that discussions with, um Talked to our transit agencies that s funding the project. They re amenable to adding it to the project. However, it s going to be at the city s cost. We ve run cost estimates and the that estimated cost is $350,000. Ta would like for the ability to finish the freeway project and then let us come in and retrofit. The building is our i m sorry. The Bridge is already set with conduits that make it very, very easy to do that so we can very easy at council s discretion at a capital project to be funded in fiscal year 23 24. For $350,000 to come in and do that. Do. You need a motion from us now to do that, I think just direction from the council, because if I don t need emotion, I d like to put a direction and for that, because It probably won t be able to go till next year. Maybe even the year after, and I won t be here so We would consider it a request that we would honor in light of the study nature of a study session no actions necessary at this time. Thank you. Okay, then, um so council member questions, Mr Comic. Well, he pushed the button first. Look at that. All right. Well. Thank you so much. I had two quick questions. Um And, then. Uh. Yeah. Whatever. Okay. So we went through all the unfunded liabilities with our pension obligation bonds. I remember. Years ago we had a spreadsheet chart that showed are one in five. All of the other end of funded by the unfunded liabilities that we had within the city. Um, whatever unfunded liabilities in that general sense do we have are those are all fully taken care of now effectively through the lobby. So. So, um yes, Most of them are taking care of all the pension related ones are taking care of theirs. The retiree medical plan, which is at this point. Almost at 100%, and then we have the supplemental plan that s almost 100% as well, of course, with the current market. Likely those percentages will be less but the last official reports that we did get There were close to 100%. And that would be if everybody Used them all today, effectively right, So like there s still there still time anything over a certain percentage is effectively fully funded. Correct. Okay awesome and then for the circuit project. Historically, that was potentially funded with measure em to Project v dollars. Um. I know we can t budget for that, and we we do a grant. We got those kicked off with that type of grant. Right? So. What you have in front of you is, um, discussion about 350,000 to fund a portion of the Project. We re looking at advertising sales from circuit to maybe cover the gap. We re also talking about, um, potentially fares to be charged if we can t get there with that. In addition to that, though we ve partnered with visit hb this year to cover part part of the cost, and so we re looking to do that, and we did apply for economic development grants, which were unsuccessful. The to, um, funding stream that you talked about hasn t had a call yet during our pilots, so we haven t been able to do that as soon as they do. We will be very aggressive and apply and try to. Okay, so so they ask is it s basically funder of last resort effectively is what we re saying. Correct. So we made it even though we say Hey 3 50. It MAY not be anywhere near that it MAY not. It MAY be zero if we get grants and visit hp kicks in. Okay that paints a much bigger picture. I appreciate that, Um Ah. And. Then the last piece was, I just want to make sure that we have enough capacity in our public information office to be able to meet our council will go strategic goals. For superior communication with our community, and I know that s been a big factor for council is one of our number one goals and I always wanted to make sure that we Within the budget that we are taking that into account because we got a lot of people to talk to. And we ve obviously, um, you know, had some had some input on what types of communications folks would like to have. We have enhanced our resources for that effort pursuant to your FEBRUARY 4th 2000. 22 Strategic session. We continue continue to evaluate our capacity to meet your expectations within that budget, and I will I will promise you that we will bring forward to you a proposal for additional funding that strategically and thoroughly thought through should the need arise for additional resources Midyear. Okay, Wonderful? Um, yeah. I mean on the points for me, at least when I got the mic, I think number one makes is easy sense right? Like. It s cash for cash and they can take it back. For the funding priorities. I think the healing centers are kind of our number one priority from a resident standpoint, right? We ve We re paving streets galore here right? Like I, We re going to run out. We re having trouble getting asphalt were paid in so many streets. Um, And, So I think that the healing center is the you know, other than that concern is the number one is getting making Sure we ve gotta place for our homeless and to be able to start Getting people through that, combined with some of the new priorities that the state s got the new tools, the states potentially giving us with, um, the ability to to get folks off the street and get them the help they need and the mental health care and drug rehab. So instead of having a cart folks out to orange or Santa Ana. Um, you know if we have a facility here that allows us to Compassionately. Take care of folks. I think that should be the priority, especially since it s seemingly the solve that works from across the country. So stay dynamic. Stay nimble, Stay frosty on what s new in coming out, but I think that should be Our priority for that. Thank you Okay, Mr Posey? I want to bring up a couple quick things. One is the the pension obligation bonds and I m not ready to admit yet that I was wrong. Um But, maybe in a decade or so. I might. Um but what I wanted to I wanted to call attention to, um to it, because a lot of our you know City Council colleagues, we talk to each other and a lot of have asked me about, you know, pension obligation bonds. And I said, if you were going to do it, do it, like Huntington s Beach did and and again, and I said this before. I want to applaud my colleagues for holding back. You know the 85% leaving 15% out to take advantage of that 21% return. Um. So although I m not an adopter of pension obligation bonds, eminent adopter believer of how is executed And. What I would ask is that since there is no one funded accrued liability payment due to pers this year because of those returns that we do not look for ways to spend that money elsewhere, and I would ask that my council colleagues Would take a look at taking that cash savings and pledging it entirely to the trust 1 15 account. Because we know that you know we don t have pension obligation by or we don t have an unfunded accrued liability because of the stock market and other investments. We know that the stock market is taking a real hit Inflation is taking a hit. We re looking at slowdown in growth. We have an inflation. And that if that and I what would be what would be the amount of detail it looks like we saved $9 million this or do we save similarly or more next year? So what we have saved his total $9 million if we didn re five, but within our budget We budget $5 million for the payment. Okay so it wouldn t start until fiscal year 23 24 where we wouldn t have a payment because there s a couple of years. Delay, so that would be the first time that we would not have that $5 million. Obligation, Although we did make adjustments in our long term financial plan on how much is Going towards the u l we did set aside. Um some funds to go towards the u. L payment in fiscal year 23 24. We knew that we re not going to be no payments one week Once we saw that there was a 21.3%. Return, so we adjusted accordingly. There s, you know, definitely needs and within the organization that we had to meet, so we took an opportunity to take down that budget from $5 million to $2.5 million. Um So Yeah, at this time, there s no additional funds that Is there to save during that year in future years. Of course it could be different, depending on the rate of return that Calpers has, um, of course this year is Pretty terrible so we expect in fiscal year 24 25. There s going to be a u l um likely at the five million or maybe more, depending on how we end at JUNE 30th. Okay. Well, then I. I won t be here. Unfortunately, but 33 of us will so I would ask that three of you commit that to memory and maybe look at that, as you know, a rainy day fund for future pension obligations. And then and then the last thing I m going to mention and I going to sound like a broken record here and probably gonna get the hook and throw me out. But, but Edison Park and car Park both, um you had and let me before. I say that when you want to compliment both of you for an excellent presentation, both of you are gracious and recognizing your team members, staff and and how you make this happen? And and Tom. I have to mention Tom Herbal. I was at scag last week and your name came up with I can t remember who it was now, but but I always I said that yet they go so this time still really doing really detailed presentations and I said Yes, I said. You want to ask him how many miles of pipeline there are or how thick the asphalt is or where it comes from. He s your guy, and and you and you lived up to that expectation, and I really do enjoy your presentations with the details and and Dale to for the for the finance, So. I just want to compliment you on that, but getting back to Parks Edison and and car park. Ah, in your presentation. You identified funding from development, impact fees and grants. And You said that there really aren t any grants that you ve identified yet. Um Car Park had $3.6 million in needs, and Edison Park was to be determined. And I would draw attention for my colleagues and staff to page 2 46 of our voluminous budget because I mentioned this every budget meet. Um. It shows the balance of the development impact fees. Um and before I get into that I do want to compliment Chris llama and I. See, Chris call up there and everybody else and community services. For, the judicious use of the funds and the great investments that you ve made in the improvements that are really visible. Um and we get compliments from from our constituents about that. But If you look at 2019 the balance of that fund was $14 million in 20. It was 12 and 21. It was nine in 22. It s 1.3. And next year, June 30th of 2023. It will have a $331,000 balance. And we need we ve already identified $3.6 million in spending for car and Edison to be determined. So it behooves us, um and especially the current Council who is going to be here next year, and incoming council members. To. Really take a look at development impact fees and make a determination if parks make life better. We have to find the funding to actually deliver on that promise, And we know that funding comes from And So before I sound like a broken record again. I ll stop. MISS Carr. Thank you well as somebody who sat on the Public Works Commission for six years and saw the budget always around 25 million to see it at 66 million is just unbelievable. It really is to see how much Um how much of the resources we are now dedicated and we know the need is great that while it s still $66 million, it sounds amazing. But the needs in the city are far exceed that and so we re in a very, um It s a. It s a great place to be and I congratulate all of my colleagues who voted for the pension obligation bonds. So no cookies for you or Eric, but that s okay. Nevertheless. I did have a question about the housing funds. The $3.7 million. What can that be used for on? What are the limitations on that? Right. So so the funds would be in our low income housing funds. So any any sort of restrictions that we have in low income housing funds that would be eligible sources. Such as the healing center. I think maybe Ursula can elaborate a little bit more about that because she manages those funds? Yes Good Evening Council. The funds would need to be used to provide affordable housing units. Okay. So. Basically the restricted this, obviously, that would make the most sense to put it toward the healing center because there s not a whole different Options that we could use that for and that is a priority that the council does have to allocate that 3.7 that said, one of the things that I would like to elevate that was mentioned in this conversation is still the revitalization of downtown, and I Know what? The redevelopment fans that we were able to secure. Thank you to Mr Gates? And. Hopefully there ll be more coming in the future. I really think that that makes the most sense to allocate funding for that? And while the healing center I believe is something that is very it s critical for our city. The price tag is around $50 million is what we re looking at. To do the revitalization of downtown. We re looking at something around eight million to who knows 17 million is on the high end of that and seeing as those redevelopment fans were really for redeveloping these types of areas and downtown is a critical part of our city. Tourism, as we ve mentioned earlier is rebounding. That s coming back. This is really the focus of tourism when people come to Huntington s beach, what do they want to do? They want to go to the pier? They want to go to the beach, and ultimately, they want to go downtown. So. I think as we grow as a city and we look forward. We really do need to make this front and center that downtown is something that we should continue to invest in and move forward with so I am a strong advocate for allocating additional funds. Especially with the aarp of funding that we received to continue to make that front and center. I think again. The return on investment will be huge Forest city, and it s really creating that legacy of Surf City. I did have another question about the arp of funding. And, um so the need to create this special fund, the hb Recovery Reserve fund. Why is that critical? Why wouldn t we just put the money into reserves? So the distinction is what we report to the federal government. So. Um, we would report the rp funds as spending it on public safety, which is the eligible expenditure on the Oppegard guidelines. So. It s just providing a different name. We could put it in reserves. We named the hp. Recovery reserves just so we have some way of calling it right. I m just thinking for future councils. I don t want to have to. You know I don t think it s wise for a current council to tie the hands of future council if they would be limited. Then on where those funds could be spent, would it only be on The plans that were decided two years ago. If You re finally deciding. Okay, we can spend these now in 2024 limited, so that s a great question. It wouldn t be limited because it is just a distinction is a designation. Not that we re hands are tied. Um Future Council could definitely reallocate those into different projects if they wish, Okay. And, then the last comment I wanted. Um. I agree with my colleague, Mayor Pro tem Posey. I would have liked to have seen a little bit more money in reserves for this particular budget. Um, and I appreciate the explanation about in future future councils MAY be able to allocate more money. Into reserves, but I know we re flush with cash, but rainy days are just around the corner. You just can never predict another pandemic. I mean when I got elected in 2018? I had no idea that In 2020. We would be having this incredible pandemic, so I think we need to be thoughtful and just Plan for the worst, but hope for the best, and so I would like to see maybe just a little bit, um, again, using the opportunity to save some money. Thank you. Thank you, Ms Mosher. Thank you. Mayor first wanted to thank Tom and Dale for the excellent presentations and also all of the staff that put so much work into making this happen. So. Thank you very much. I had a couple of questions before I get to the prioritization of everything. First on Slide 10, which was the charges for current services. I was just curious. There was the 4.9% increase in the m s transport services. I was just curious Kind of what the origin. Of. That was what precipitated that. Thank you for the question, So. The reason why we, um, that went up this this next year. We re projecting that it would go up is that because of Covid, there has been an increase in the amount of transport And chief heavily probably can expand on that a little bit more, but we did have a billing rate increase this past year. That Council approved so that that comes into play. There is a delay in the actual revenues coming into the city, So we saw the revenues come in JANUARY, so we didn t full eyes realized. The full annual Year this past year, So there s an actually an increase from what we re going to. We re projecting this year and for that reason, but also for because of the increase in transport. Thank you anything else to fab early? Okay, Cool. Thank you and then the other one was the I think was slider page 13 use of funds. I noted that debt service There was 7.4% and I was just curious if that has remained stable over time, or increased or decreased if you have that information. It was just part of the pie chart. Use of funds. Oh sorry. Okay. Well was sorry was just questioning whether that was kind of a stable number. The 7.4% or if that s increased or decreased over time, so this increase because the pension obligation bonds that s in the General fund is in this number two so that number actually increased because of that, But other than that the other debt service actually decreased. Because. We did pay recently. Um one of our bonds off Great, Thank you. Okay now on to everything else. Let s see. So. The. I also support the hb recovery reserve that proposal. You know it s important that we do make sure that we get to retain the funds that we have, and if the federal government changes their mind on how the funds can be we used. We want to make sure we can reduce the risk of that being caught back. Um I would also support. Um the circuit continuing, especially considering that hopefully we ll get the grants, sponsorships and ad revenue to be able to cover the costs of that program. For me. I. Definitely think that as a council member car mentioned investing in the downtown redesign is very important. Um, I think based upon the dollar amount Required. There definitely makes sense to keep that as a top priority. But. I also believe that the healing center is really the top priority. Um the fact that the money is there the 3.7 Million for housing funds are restricted. I think it makes sense definitely to apply those to the healing center as it s currently being designed with permanent, supportive housing. Um on site that will make use of those funds. Also you know many people talk about the fact that we have you know the tent like structure on Beach Boulevard. That was a temporary structure. Our goal is certainly to have a more permanent structure and not just the structure, but really to provide, um are residents or residents without homes. Um, you know, really the ability to have a flow through the system, so they re not just showing up there and staying there, so we re really being able to provide real wraparound services in new of them through into transitional, permanent, supportive housing. Getting that healing portion of it. We don t have that in a in a really in a real way right now, even though we try as best that we can So. I think it s so important to really make that our priority for this coming year and also with that, just like with some of our other projects, um, you know, I know that staff Is really looking into how to fund this project and with the state decisions over the last year with funding for Calima, etcetera, I think that there is a lot of new opportunities to be able to find this and I applaud staffs. Um, you know, persistence at figuring out how we re going to do that. I know that we can Um, finally. I wanted to just comment. Or maybe question is, you know it was commented on how many we have 70 plus parks, which I think we were talking about? Maybe under just under 80 parks. That s a lot of parks, which we love our parks and open spaces. We ve done so many amazing things this last year. I applaud Public works and also community services as well. Um. But. One thing That always comes up is are we have, you know, putting enough aside for parks and facilities maintenance? I don t know if Sean maybe you can speak a little bit, too, That So. I would say that, um it has been a challenge. Um, um, with all the facilities that we have to keep up with all the maintenance needs that we have, Um. We re very, very fortunate with the aggressive capital program that we have right now, in terms of bringing that up to meet the level of expectations from our residents and will continue to do that. Thank you. Thanks. Mr Bolton. Thanks just a couple of general observations. The first one to thank you for the clarity and detail of the presentation. This is the first time that I ve gone through the entire budget for the city, and I thought it was Very, very helpful the way it was organized for a person who is a municipal budgeting. Neophyte, um, just we were talking about grant funding for the downtown circulator and that just GOD. Reminded me that there are grant funds available for all kinds of things. So, um I appreciate the fact that um, staff is pursuing grants and a lot of different areas because I think you know that s a smart way to try to leverage the funds that are available from the state and the federal government to help us meet some of the priorities that we have so Definitely on board with keeping the downtown circulator and for the first the American, Um, Rescue Plan Act just to, um Clarification. So. If I heard correctly. There are other local municipalities that are establishing, um, of Recovery fund or something like that. Correct? Yes. Long Beach, Irvine and Tustin. Um, some examples of agencies. There are other agencies as well. But. Those are the ones that are kind of close to home here. Okay, so I m always asking about risk. Um and I would assume that if there were any risk that we would be a legal or regulatory risk, um, you know, associated with something like that, Um Silly. We are following all the all the guidelines So, um on eligible use of the rp funds. If. You do have the sufficient revenue loss, which we do. We had $52.7 million. We can use it for governmental services, which includes public safety, would propose using the rp funds for public safety as we reported to the federal government, and then you would free up savings and then you can deploy that whichever way you want. We would like we are doing exactly what we re supposed to do. And while we do exactly what we re supposed to do with that money, we are allocating additional resources that become discretionary funds that allow you to make the policy decisions that you would wish to make in the future. Smart thinking. Thank you. Mr comic. Push the button. Yeah. I just didn t know if I had a follow up question, But, um, uh Park. The Park Discussion spurred something up from a previous budget from several years ago. Um, we ve got a couple of school sites that are potentially going to be coming forward. Um Residents as the school sites come forward and are being sold there as well. Where was the city with the Naylor Act and Um Okay? I know that we we? We have just nearly 80 parks, but just kind of wanna understand like the city s position in acquisition so that we have more of a driver s seat. I m not saying that we want to, but we ll get questions all the time and its budget season. Then we know that a couple. Other school sites are Likely coming on the market at some point, so We don t know if we have had. We ve never had a policy about school sites acquisition or not, t Well, we have cash. So while we have cash, obviously, as a big point of that discussion, there is reference to surplus schools in our 2016 master plan, which we re currently updating with public input as well. So it s certainly something I think a case by case would need to be evaluated. We d probably want to bring it to our commission and council for discussion. Obviously, if there was something that We wanted to pursue. Okay, Thank you. Actually. I have a couple. I think most of the really has been said, but, um I still think how fortunate we