Special City Council Meeting (Budget Study Session)

103 we will call this to order please no talking my idea that you got a chalkboard jungle ready blackboard jungle all right. It is the call to order for budget study session is 103. We will begin with the pledge of allegiance by councilmember acoustic park that is in the pledge allegiance to the flag of the united states of america and which stands one nation under GOD, indivisible with liberty and justice for all . MADAM Court, do we need to call the roll? I invite you to do so. Councilmember valbuena here. Councilmember hear, hear. Mayor pro tem here. Mayor boyle running late. Up very well. And with that we will open for the public communications. Do we have any amount of quick money ? Hello? Paul lanier, PRESIDENT Of the board of pakistan. As you know, we have approximately $3 million worth of projects that have been identified in the city reserves to be accomplished by 2031 2.3 million in 2027 in the park vista in the city, the senior housing fund there's approximately $900,000. Those are dollars that can be allocated should be allocated to pakistan. We have a $1.6 million approximate pipe replacement project that is underway and I believe that joe is recommending the city is recommending that $8,000 be moved over so that pakistan can accomplish this project. So that's request one. Request two is in buried within your documents is that the city takes $30,000 out of the general fund and move it over to the five or four fund moving forward in the future with joe's departure we want to make sure that this is something that you are all cognizant of and will work with whoever attempts to replace to move forward with in the future. So those are my two requests today. My second thing is I just want to say to joe he's been an amazing partner with pakistan the years. We're very sad that he's leaving. He has been exceptional in working with us and talking about scenarios and how can we do what can we do to ensure that park vista moves forward in a healthy manner. So thank you to joe. We'll MISS You. You. Thank you. It's millennium jim vulgarities . Hi, jim. Greetings. I want to start with something just a little different. First of all, I don't plan on making a habit of making your lives difficult or a gadfly or anything. I think by and large you guys and do a fantastic job. I don't know if that gets recognized that's why mostly I'm just silent and did my time and I think by and large I think the city is exceptionally well run. There's one thing that I've kind of been thinking about and I want to give you just a little bit of a different perspective on the plunge rehab that you've got going and want to maybe throw a little bit of a red flag on off on a train that's got a lot of momentum right now and. Give you maybe a little cover to look at it a different way and what I see MAY not be hugely popular with a lot of people but so I'm looking at I looked at the budget, I looked over and it says by 20 2425 you're hoping to have 10.7 million in the plunge reserve project and you want to rehab that put a lot of money into it and I just want to make sure you guys know what you have over there on the east side of town with the el segundo weissberg pool you guys have literally a world class facility over there. I mean it is the best pool pepperdine and long beach and maybe inland to commerce. I know councilmember jiro, your family's an aquatic so I know they're over there. What I want you to ask yourself is what need is not being met now the the plant has been closed about four years give or take right. Is there any aquatic need in this city that is not being met? And I don't think you can say yes when was swimming at the plunge when they were both open and there was only a short while they were both open both i was very often swimming laps swimming over there in the plunge by myself me and the lifeguard. Okay. I goes in the plunge today you know I do my I do my 3000 yards. This is supposed to be my naptime by the way. So this is tough stuff for you guys to I can see you're all fortified. You've all got your copies these are long dry meetings but my is you have more capacity this city than you need I have not had to wait for I have not had to share a elaine in six months I'm swimming myself there were 15 empty lanes I counted them you can go online and look let's ask what you can do for $10.7 million in this city. That's a lot money now I get it. I get the nostalgia and I get the the the deep heartfelt attachment. I started swimming in the plunge when I was eight years old. So it's not that I don't appreciate that building I do. But nostalgia is not a fiscal and here's the thing that people don't understand if you spend $10.7 million and if that's the reserve it'll be more people think once you build a pool you fill it with water and you don't you fill it up with money and then you refill it every year so. I don't know what you're I'm guessing from back when I had to do it operating budget is 100 200 $300,000 a year if nothing breaks and we've just seen even new pools break so ask yourself do we need it? Things get to the end of their useful life and this MAY be an unpopular minority opinion but we don't need that pool. It's been empty for years. Nobody's not getting in the water. They want to just see you know the other thing is we couldn't staff that pool before we had staffing nightmare issues. I remember we were having to cut hours and when I say we I mean as a user in both facilities because you couldn't you couldn't staff in with lifeguards so I don't know I don't know how you're going to deal with that the other thing just just an anecdote nearby culver city also had a nice outdoor 50 or 50 meter pool not as good as ours. They also had a beautiful indoor high school pool beautiful. I swim on opening day that's a city with four times the population of ours. They had to tear it down. It just became too expensive. Okay if you want to save the facade which is the historic part everybody's attached to do that you can do that but. Take a minute and let me try and give you a little cover. Ask some hard questions so that it doesn't come from you guys and then stop and let you get going. But just ask yourselves and you're trying to run a fiscally responsive and I hear the term like a business. I want to know what need is not being met that we need to spend million dollars to meet because there is no shortage of aquatic possibilities in el segundo. Thank you for your time. I do I do appreciate guys service. I want you to know that. Thank you. Thank you for this and it would further very well get to a motion for you to read according to the resolutions by agenda and only so moved for six second all in favor I any poser abstentions? No all right but passes all right staff presentations we will now begin the budget study session city manager who present on this item yes MR. Mayor pro tem outgoing finance director will in 2 minutes I just want to have a few opening remarks before turning it in turning it over to joe the the 2023 24 budget process actually in late JANUARY. So obviously a lot has gone into what you have before you this afternoon. I want to thank the council for being available for this special budget study session. I want to thank the department heads in their staffs for working through this this lengthy process as they said since the end of JANUARY and then in particular to to joe his final budget here in el segundo. He was kind enough to to hold off on his new to departure until we completed this budget process which I want to personally thank you as the not so new city manager now but still almost a little over a year. so thank you for that what you do have is a balanced budget roughly on the general side about $88 million budget both revenues and expenses see we've been fortunate though to put back a number of in this in this forthcoming budget that I wanted highlight just briefly and then joe will get into more details you'll see items such as employee engagement as you know one of the tasks and I've been charged with is to work with the entire el segundo staff on on engaging them as staff in and as a team and working together to to continue to pursue the goals and objectives of the council so you'll some employee engagement items in the budget we we have put significant amount of dollars in capital budget to the tune of almost $34 million in this coming year which is a carryover from the previous year as well as upcoming for a city our size that's a pretty significant addition to the budget but thankfully a lot of exciting projects lie ahead in next fiscal year we're bringing back our emergency management and everything that goes with that within the fire department. We also put in $1,000,000 of kind of set aside money for the police to deal with technology issues employee that have come up at the recent council meetings in dealing with some the new technological advances in policing. I'm happy to say too that on the expense side really the difference being last year in this year's budget is less than 1%. so we've all departments have really held the line and want to for the most part I want to thank them for that. And then finally this the end of this fiscal year or this calendar year measure, betty, which was passed by the voters last NOVEMBER will will begin to kick off as we move forward. So those are just a of the highlights. Joe will go into department by department items and with that I'll turn it over to you. I good afternoon mayor pro tem MR. Pimentel, city councilmember so I do want to start off with, you know, staff spent a significant amount of time and energy putting this budget together so as the city manager mission we began in late JANUARY and there's been a series of numerous meetings between finance and all the other departments with the director and their budget development team of five kind of fine tuned things and then we went and presented the city manager with each of the departments along with finance and then here we are today for a first budget study for the 2324 budget and you know the proposed budget incorporates city strategic goals into the development of the proposed budget and just to highlight what those goals are. So there's five goals number one is enhance customer service equity inclusion and communication. Number two support community safety preparedness. Number three promote quality workforce through teamwork, organizational efficiencies. Goal number four develop and maintain quality infrastructure and technology. And goal number five champion economic development and fiscal . So there's funds being used to accomplish each one of these goals and we'll go through some of the details here. So I put this slide in there for those in the audience at home that MAY not be familiar with so commonly used budget lingo. So this is just there so anybody wants to refer back to that they can get what I want to start off with first is an update council where anticipate ending this year so where we anticipate ending JUNE 30th 2023. So I came before you in FEBRUARY the mid-year presentation and there's been some adjustment since so this is the revenue so the original adopted budget was 81.7 million mid-year we came before you adjusting it upward to 83.9 million. Now we're doing another adjustment. We're anticipating ending it $88.5 million mainly three categories here that are impacting this one is the business license tax, one is the business license tax. We had assumed that there would be a slight decrease we're actually coming in at 11.9 million right now as we speak. So that's been bumped back up to its original budget utility user. I'm sure we all know from our personal utility bills at home that natural gas went through the roof. I know when I received mine in JANUARY it was triple what it was the prior year FEBRUARY went down a little bit but it was still almost double what it was the prior year and such is the same with businesses are util the user tax is 3% of the total utility bills for businesses so we don't have a utility for residents only businesses and both natural gas and the cogen utility came in much higher than we anticipated by $4.2 million. That's primarily due to chevron but it is all the businesses combined. Another line item there that's significantly increased is the franchise franchise tax that's we get a large payment once a year from so gas and also edison so every APRIL and bill the check received from socal gas was almost $2 million higher than what we anticipated and that has to do with the higher natural gas prices, commodity prices. Now this we're not assuming that those high prices going to stay in existence through next year. They will still stay but not at the same level they are right now and I'll get into that in a minute and then one thing I did want to point out is that chevron tax resolution agreement the true up payment shows a decrease so I'll move on to the subs the next slide here it gets into details. It's actually a decrease so the purpose of the slides help break down the various components of the carbon tax resolution agreement and identify the ultimate payment due to the city. So we can begin with the far left. It does categorize the various revenue taxes that chevron pays per the agreement. So starting with the gas duty cogen and all the way down to sales and use tax and you have total taxes so the far left 2223 they paid 8.7 million in total taxes. The three which is what I highlighted in yellow at the bottom there that's what they owe per the tax resolution just a little over 14.5. So the difference in total taxes they paid point seven and what the total for the agreement is that true up payment and that was our go back of slide that's that $5.8 million that they paid. But in totality again they are paying 14.5 million and if we can look at that number as highlighted in yellow move all the way across you can see they go it has increased over the years. So 2223 is 14.5 and if we go all the way to the far right under 2019 2020 you can see that all the payment to the city was 12.8 million so it is increasing each year by annual DECEMBER cpi factor and that's the factor that's highlighted in the square box so I wanted to point that out. Any questions on this? Yes, sir. Yeah. Can you spend it? The property tax increase I'm sorry just look at the numbers 2122 to 22, 23 now go down the slide. You you're just on. Yes if am oh I'm sorry. Yeah it went from 1.6 last year to 1.3 this year. Correct. So they chevron did what's called a prop eight appeal assessment appeal and they were successful on having some of their assessed value reassessed at a lower rate which again doesn't have an impact to us because we're made whole per this tax resolution agreement. Gotcha. I just looking at all the numbers that was the one that just kind of stood up for the decrease that's all. Thank you. Well and this just highlights exactly what I just went over. One thing I do want to point out is that last bullet point the total payment that chevron pays per the tax resolution agreement represents about 16 to 17% of our total general fund revenues . So now we're moving to 2323 23 general fund appropriations. So major, I had anticipate an increase going from 85.9 million which was the original adopted budget to 87.4 million and that's where we anticipate ending this year. So no no further adjustments from what I brought to you at midyear . Okay. The 2324 revenue assumptions for all funds. So we do have various funds general fund which is our largest as always capital improvement projects, so on so total revenue is $163.5 million. Here's a breakdown of all the funds that exist within the city. So this slide depicts the city's proposed 2324 revenues for other funds at 163.5 million general fund being the largest which 54% of total revenues followed by the enterprise fund at 23% of total revenues. Any specific questions? I will get into details in subsequent slides ? Okay. So starting with the general fund, the proposed 2324 general fund revenues the city's projected amount $88.3 million this is six and a half million above last year's originally adopted budget in 159,000 less than the estimated year end revenue. So if we go to the of the slide here this is we're comparing 20 to 23 year and estimates of 88.5 million to our projected 22 sorry 2324 of it 8.3 so it's almost a wash and just touch on some of the categories with significant variances line item number two which is the business license tax measure betty, which passed this past NOVEMBER becomes effective with the JANUARY 24 renewal business license renewals now that that tax measure was anticipated to bring in an extra $3 million the city has been receiving written notifications approval various businesses within el segundo that they have been doing some tightening of the belt and doing some layoffs. So my numbers project are those anticipated because part of our business license tax is based headcount. So this does anticipate the amount of reduction in headcount that we will have citywide but still an increase because of measure b team item number four property tax. All we're doing here is re categorizing revenue that used to be in line item number 11. So if you go number 11 and are governmental revenue that has decreased and we just shifted it up here to the property tax so it's just realigning that category line item number six t natural gas prices they did peak in DECEMBER 22 JANUARY 23. So we are anticipating at those gas prices have a leveling off are still going to be much higher than what we were used to prior to DECEMBER 22 and then the total for that we're anticipating for 2324 that 10.6 million that's significantly higher than what we have traditionally received in the past. We're anywhere 7 to 7 and a half million. So it does anticipate the elevated prices of commodities but not quite as high as where we were this year. And then line item number eight the transformers in in 2223 we received our last federal arpa dollars just under $2 million so 2324 that we are no longer receiving those arpa dollars. Any questions on the projected joe on the uut and the gas is pretty speculative right? I mean that's a that's a pretty soft number depending ukraine pipelines and in those if we have we had a warm winter in europe this year we have a cold winter that could spike but are we treating those as sort of one off revenues? Are we baking inflation and saying those are going to stay high so we work with a third party to estimate those called avenue insights and they do this across the U.S. But they specialize here in california with municipalities they have unity and they provide a pessimistic scenario, the most relevant scenario and then aggressive outlook in line with the middle of the road and this is kind of in line where we're at right now. I think the prices have kind of leveled off. I would say that number is sat at about six and a half million for years. Right. And in the last two we've had this spike and spike in both the edison prices have continued to increase and I don't know if you heard that they're anticipating shutting down the last nuclear power plant up in northern california that more than likely will have continued pressures on edison to increase prices the apple beach because they've got a life extension three or five year life extension. Yeah, there was a lawsuit that went before judicial court and I think having pressure on the state close that down so that could have you know that could further have those pressures on edison to increase prices but to answer your question we've seen increases in edison over the last few years and definitely in natural gas prices thank you. And just you know what's going on in the political environment in sacramento and possibly in washington. There is push to get away from natural gas usage and appliances that could have an impact negative impact on prices. Well, any other questions on the revenues ? So this pie chart represents the 88.3 million and projected revenue and it really depicts we have a diverse tax base. Most cities will have at least 50 to 60% of their general fund revenues just two categories property tax and sales tax that's the vast majority we have a very this depicts this a very diverse tax so this graph the top five general fund taxes so we have pre-covid going back to 1819 and then you can see dips particularly in the blue line which is tlt and as well as the orange line sales tax those in the tax revenues during covid and then the recovery and we're anticipating I know that these tax revenues are heading in a positive direction direction. I did want to bring us up to the topgolf revenue estimates for 2324. So we do have the groundlings at 1.3 million and in per city policy that was adopted 70% of that will be dedicated to annual pension contribution and then percent dedicated to the repayment of the loan to the equipment replacement fund there's an annual $200,000 community benefit contribution that's dedicated to american per capital improvement projects and then the recurring 3% beverage fee payment at the driving range and golf course with a minimum guarantee of 200,000. So we have not received that first payment yet per the agreement they have one year after originally opening and so after year anniversary they have 90 days to remit that payment and reconciliation to the city so that first payment is due by JULY 15th of 2023 and they have not given any indication yet of what that's coming in it. So we have no idea how much that payment is going to be not yet is known to be more than 200,000 a to minimum is 200,000 huh? Interesting. Yeah. I'll continue to work with my counterpart over at topgolf and see if we can get some idea but as of today they have not provided anything and then there's an annual $20,000 golf course grant lease payment . All right. This slide depicts the city's proposed 20 to 2324 appropriations for all funds at $184.6 million. General fund is the largest at 88.2 million with just under 48% of all appropriations again followed by the waterfront. So very similar to the revenues general fund and water make up the bulk of the activity is that wastewater does that account for overreach that we detected from hyperion that we collected more money than so this is the for next year and it it takes what we paid this year to hyperion we pay quarterly and increases it I believe it's 5% but that original estimated amount which was significantly higher yeah that that's not in here okay and then the revenue is as far as the revenue that we've that's sitting in the wastewater fund balance I know council has asked a couple of things. One can we refund that or we reduced rates? I think there probably has to be a separate staff report brought the council on how to achieve that. I know there's MR. Hensley's office is going to have to be involved but there's going to be certain legal parameters on how we can refund that or reduce rates . 2324 general fund appropriation ,the proposed appropriations $88.2 million lines with the revenues for general and overall this is less than a 1% increase from the year end estimate for 223. Now there's some departments that have increases, some have decreases but overall pretty in line with where we ended in 2023 some of the departments was large variations from the prior year. One is a police department 4% increase. This is due to contractually in the south bay regional public communications authority dispatch. So we contract out the dispatch center and some other contractual costs like the hawthorne police, the hawthorne jail contract. There's an increase in our quantum replacement charges so due to obviously the nature of buying new vehicles those inflationary costs have increased so there's some costs of impacted the equipment replacement fund cost as well. A number for public works that's double digit increases in costs of utilities the city. So just like everyone else and residents businesses, the city is also experiencing higher costs in utilities. This is for city buildings and infrastructure an increase in materials and supplies for maintaining run pools significant increases there in other contractual service costs for instance like maintenance of facilities. We had a new contractor that also did have a large increase in line number which is are there there was a 28% increase this is due to recruitments, labor negotiations, professional development employees we have a $100,000 line item there for employee engagement. So that was there pre-covid. That's something that council approved as initiatives to meet one of their strategic goals that will be there the city manager to pull from and have a citywide events throughout the year or other promotional events for for employees. We also have funding of a new position that council approved during midyear. So there's a brand new fte in that our budget. Any specific questions on the proposed okay just some facts here budget appropriation assumption so again 88.2 million 53.9 54 million is personnel related salary and benefits 23.8 million is for operations and maintenance costs 130,000 for capital outlay and then 10.3 million for transfers out. That's primarily the pension obligation bond payment 9.7 of that public safety represents about 48.7% at $42.9 million. And there's a breakdown between police and fire in the miscellaneous employees at $24.9 million and maybe just one point to point out here public safety being 50% of the general fund that's typical could be anywhere from 45 to about 60% of city's general funds. Okay. Salaries and benefits. So are assuming a 5% you said 45 to 66. Some cities have many cities where it's 60% yes. Yeah. And that that's you know we're talking full cities budget appropriations some assumptions so salary and benefits we did assume 5% vacancy rate in this budget that's approximately $2.2 million reduction in salaries and benefits where it's equivalent to 14 vacant full time positions so there's not frozen positions again, we're just assuming a 5% vacancy rate which is what we did for the 2223 budget as well. And put that in perspective on average there's been about 30 vacancies at any given point in time we're about 11% vacancy rate so a 5% vacancy rate is a very realistic minimum wage did increase from $15 to 1550 JANUARY 1st, 2023. So of that has some pressures on the expenditure overall expenses for utilities subscriptions, goods, maintenance dues fees, consultants those have all increased due to inflationary cost . So the 2324 general fund transfers out this is included in the proposed budget. We do have a half million dollars earmarked to go out general fund into equipment replacement reserve for our erp reserve. So we currently have approximately $400,000 this 500 bring it up to 900,000 that we have in our erp reserve. So our our current an erp enterprise resource processing system that's what we use for our billing finance. We use it for our utility billing and we also use it for multiple accounts receivable billings so that end of life that system is SEPTEMBER 30th of 2027. So we have about four years left and it will no longer be so we installed this back in the early 2000s so that's like equivalent of imagine using a cell phone from the early 2000. It's just it's outdated. The technology that we're using really is not serving the city words constituents in a manner that think it's expected. So this erp replacement will definitely bring a great enhancement to the customer user experience, bring much needed business efficiencies the city as well that is about a two year process from start to finish transfer from the general fund to the solid waste one. So we are still subsidizing our solid waste, our trash our subsidy is about 300,000 a year so that will continue to increase each year until something done to address that gap in those rates transferred from the general fund to the senior housing fund. Historically the city had spent $600,000 total on solid waste and then when the new contract came to that code to adjust for the new cal recycle rules, we thought that would go to 1.6 million for the first year of the contract residents would pay approximately a million. We would be 600,000 and now is it 300,000? Is that reflecting be over estimate back then or am I misremembering know you know those are those specific dollars they're not standing up at the percentage so what council decided to do is continue to subsidize 25% of the of what the cost of the residents are and that 25% originally that was about 260 $70,000 and so that has risen to about 300,000 today. So the 600,000 that you're talking about I'm not sure that could inclusive of city owned property. Yeah that card that piece of the contract which we can't pass that on that would be coming out of the general fund so transfer the senior housing fund from five of four so as MR. Lanier mentioned on the public comments we have about just under 900,000 sitting there. We are earmark proposing to earmark that towards the plumbing project at park vista. So that will use all those funds up and the know ultimately park vista is a city facility it was built with general fund dollars and ultimately the general fund is financially responsible for any financial shortfalls and this is where it is $200,000 will help per year help subsidize the rents collected. The difference between the capital reserve that the senior housing board has and what is needed and there was a study done back in 2018 by the city public works director ken bergman did the study and identified about $9 million in capital repairs that park vista needs within the next 20 years and. So this $200,000 will help with the delta what's collected and rents and what is needed for this $9 million not included the proposed budget is a transfer out to our trust so we started with the pension trust back in 2017. There's just under $5 million in there today. We have not it since 2019 calpers last missed their mark so their benchmark last year was point eight and they had a negative point four return this year it's possible they might hit their 6.8 but looks like you know they're going to be slightly under. So my recommendation is to continue put money in the pension trust fund we do have a new pension down the road. We can address it and deal with it immediately than having it sit there and then having interest accrue and then just ballooning into an amount that is hard to deal with down the road. Joe wasn't that giving me a claim that fully funded two years ago? We did and as we speak today we're 107% funded. This does not include last year's loss so they will be issuing a report in JULY. So the issue every JULY report on their funding status the prior year's return. So this JULY when they issued that report will have that -6.4% return and we'll know we're going from 107% funded to whatever that amount is. Well, it could be that we go down to 98% funded so there would be a short new unfunded accrued liability that we can either, you know, use the pension, trust the us or you know, amortize it over x amount of years. But we are not we don't have an allocation included in this budget but you would recommend we include one is that what you're saying. Correct. And even if we don't use it for a new pension liability we can use that we do every payroll we have what's called normal cost a pension cost that pay the corporation that's about four and a half million a year. So we can always withdraw those funds to pay for that. So it's not you know, we would talk that way in this pension trust and it could only be used for unfunded liabilities. We can also use it for every payroll costs that we send to the person if you know that's what was needed. Thank you . Okay. Getting into some of the departmental requests we and if I don't cover everything that the department head would like to talk about I would encourage them to come up here and let me know you know if you want to talk to on your particular department. So the first one is the city manager's office and city council budget. So city managers comprised of the city manager's office communications department, the el segundo media and the economic development department. It includes a proposed state federal lobbyist at $40,000 there's a new layout and built into the budget. It also includes $45,000 in prior chevron donations. It's in the economic development trust to be utilized for special event champions of so that's what the anticipation is and I recently heard that chevron anticipating on providing the city with a new donation for those continued economic development promotion and also a management analyst position repro graham to a special projects coordinator so that's also in the budget to jump the line item on the proposed state and federal lobbyist. what does that come from actually that be on tomorrow night's agenda? So I just put it in here just in case it be said proposed it that's a proposed oh yeah I'm sorry I just okay I know but it's coming from your office. Yes, that will be on the agenda okay tomorrow city council. Okay. Thank you. Yeah so I'll go to the ask here . It came from the departments and then we work they worked with finance city manager's office to include it . Okay, the next department I just want to say, you know, after a lot of conversations I had with or the city manager, you know, I was really pushing for that special projects person I just wanted to reiterate that it's really as a result of us really wanting to ensure that our projects especially our capital improvement projects are being have a been proactively managed to try to shorten the time frame not that our current staff is able to do it it's just that they are so large and there's so many of them we want to ensure that we are getting done as quickly as possible and as cost effectively possible. So that's a result of that conversation and I just want to make sure everyone understands that that move is to really just we have a lot of big projects we have planned. We have the teen center, we have the park itself. We have we have the there's a number of projects too sizes like $33 million in capital projects. So that's what that headcount is looking at. So the isg budget now includes ongoing technology and costs citywide. So we started this effort last year trying to capture all the technology. There was further pieces of software technology that were identified that were still an individual department's budget. So we are included that we believe we've captured pretty much all all software renewals, maintenance technology in the it budget now also it recently aligned department rules and responsibilities to a major department reorganization and that's included in this budget as well. So do I just have one question. So you were saying that last year's because it's only $100,000 delta 100 and something change delta on that year is this proposed so that captured last year also captured all activity I t to be we're not yeah 100,000 is not that's just the net so there there were several individuals that previously worked for the city I.T left move on those individuals being replaced with pepper members so salary and benefit costs of decreased and then you know the delta is a little bit larger than the 100,000 for the increase in software and then in that because I know we're in the process doing the building and planning system and then we are looking at doing a complete erp system is have is that budget proposed budget in part encapsulate that as well and the project that would be we would need to do that because that's a huge undertaking we would need to bring in project management staff to help us accomplish that and I just make sure that is sufficient for that huge project. Yes. So some of that which you referred to some of those costs will be actually charged for the project itself. But yes, when when a director call the room develop the budget he kept the professional services contractual services an elevated level even though anticipating that he'll have vacancies as vacant positions filled so keeping those professional services at a higher request to help out with all these projects that are ongoing because I just want to make sure that you know there's no in instituting these projects and that we move you know, some of the some of the issues that we've had historically is we haven't had the resources to help us expedite process. So I want to make sure that that resource is there and so that we can get some of these bigger projects. I know one of the other things the mayor had brought up about looking at technology for our safety for both police and fire and I want to make sure that we have put money in there to also ,you know, accomplish those those projects as well. Yes. So when we get to the police budget you'll see it there's a line item that discusses would you referring to for the for the police department. You know, the only comment I have is some of the larger projects for instance this use the erp that does take about two years to fully implement from start to finish and it's almost a phase in approach turning on pieces of the module at a time. Okay so some of the I.T initiatives are listed here I'm not going to go through all of them but these these are definitely key things and that top one research and plan replacement the enterprise resource planning system in conjunction finance department so that's a huge project and as I mentioned we have 400,000 already in there we're asking for a matter of 500,000 but this is probably going to be two and a half maybe up to three and a half million dollar project for a new erp system. You know, maybe another one that I mention is number three demo on open data portals. Number six came on to upgrade network infrastructure and cybersecurity systems something that's key make sure that we're on top of joe did we just do a record retention policy? We just approved the timelines on a in a meeting six weeks ago too. Is there something new is that a new initiative? Um and a couple of years ago we had the email retention go in which I thought was digital records because we lost emails after years or something. Good afternoon city council mayor pro-tem this we discussed this a few weeks ago about the retention policy about the emails you to correct and that's one that apparently it's been okay then it should take emails that's a banner on my part so but that's one that I believe that the previous two director is working on with uh with the city clerk on how I see that's it's here again very well for the piece. So to be clear we discussed our overall record retention policy. This program is specifically about emails click just to make sure everyone's um same page thanks. Thank you . Okay next one is human resources to budget increase to provide core h.R services so some of these services classes classroom comp studies that's something that has not been done in a long time that needs to be done through engagement initiative already mentioned that $100,000 city manager will oversee how that's utilized implementing additional staff approved that mid years that's new analyst H.R. Analyst and then some items reflective of specific current needs are employee investigations executive recruitment testing and improvements for public safety and then training and coaching for staff and just for clarification on the class series and class status really encapsulate the management development courses because one of the things we'd recognized is that we need to ensure that we're developing a bench within our core departments a bench of you know, worker for succession planning. So that's degree that we had recognized as being a little anemic. So one of the things that we have asked our department to do is to continue to offer classes in management training or support personnel to should be promoted for upwork. Yeah, director reddick has done a wonderful job of that. There's been numerous classes over the last months that staff has been attending. I know there's a lot more coming up in the pipeline but. Yes. So that bottom bullet, the very bottom of training and coaching that's inclusive in that category . Okay. Finance and treasury so first bullet point the half million dollars which are already mentioned for the erp system continued implementation of gasb requirements. So the government accounting standards board continues to issue new accounting guidelines for government. The report their financials more and more like the private sector. So there's new pronouncements coming out that will be effective for next year that we'll have to implement recruitment of a new cfo implementation of major beatty. So in here and then measure t I just wanted to put that in there even though it's not for 2324 it is coming up that's where it was a change from an elected treasurer to an appointed treasurer measure t went before on the ballot I believe it was in MARCH of 20 and that was passed joe at the time we had speculated that that role would be combined with the cfo. Do we dissipate that being a separate post now or do we still just be to being combined? You know a lot of cities that's what they do they combine that role with the cfo. So for instance you know I've managed the portfolios, numerous agencies I've been adequately of the staff that's doing all the labor work. But you know my my so she and his staff you know they're doing the day to day and then matt you know oversees the overall direction and gives guidance and that's what whether it's the cfo or whomever it is they provide guidance to the D.A. And his staff. I would ask because I would probably be as a significantly well-compensated position. So if we're combining the two that saves us a significant amount of money in 2024. You know, as far as the compensation that that would probably be more of an H.R. Related question but it typically is combined with with the cfo I will then I just have one question to joe so for the implementation the measure b t I'm what we did in that measure is try streamline some operations so hopefully once it's implemented this the the the application to important to to gather the taxes will be streamlined going forward right yes so dino dino actually reached out to the software firm that we use when measure beatie passed in working with them then on you know can you program in your system is it capable they're all ready to go okay so it's all you know we have it ready to the because well it's just unfortunate that we have to do the timing work because we're doing this at the same time we're looking at in europe system so it's it's good that we don't have to create a lot of changes in our currencies right that we're going to be scrapping in the year after that. Right. So okay, the next department recreation parks and library so the budget of proposed budget for 2324 services returning to pre-pandemic status of course inflationary increases particularly since a lot of those positions in rec park and are part time and minimum wage increase it does have an impact there in restoring items previously and some of those are deferred maintenance for facilities replacement of park trash cans that is in the budget downtown of hanging baskets. So it's in the budget new decorative lighting in downtown includes candy lane events security so we last year was the first year that you know the city really picked a lot of costs for candy cane lane there were some components it in the budget but definitely not enough to cover the total castle. Now we're capturing what costs truly are added laser grading of the the athletic fields this service is needed annually until the fields are redone increase the farmers market to help reinvigorate the program increase the teen center activities and increase to minor ongoing repairs and maintenance at wiseman aquatics center joe yes sir. Any more detail on the teen center activities that that facility might change for the also the farmers market what are we doing exactly to reinvigorate that ongoing event? Sure. A director mancini to come up and speak to them. Good afternoon mayor and council members. So I think your first question was about the teen center so during the pandemic we dropped those the programs down significantly and so the budget dropped as well and we're we're trying to get back to to pre-pandemic times programing. I think that's been a discussion we've had here at the dyess is just really getting more activities and things for the kids to do you recently allocated $10,000 for us to get some new furniture and equipment so I think that's all part of that plan. Of course as we undertake this renovation of the teen center perhaps they would come back at some point and need additional funding but this should get us at least the next year or so. And then as far as the farmers markets, we're really trying to bring out activities that will get the community to just want to come out every week and and either it's live music or activities for kids and things like that. But that's something that the commission had asked us to a look at bringing in new vendors and then also a bunch of activities on that last one have we ever studied the cost benefit of a farmers market? Not since I have been. I just I ask because know considerable labor goes into it across multiple departments the bollards alone pulling those out I see people do that and feels like it's been dwindling over the years. I'm just wondering what benefit if it makes sense to continue right? I mean I think that's something we should probably look at given that we're going to try and bring these kind of activities back year and see if we can get some of that excitement going again. But perhaps that's something we really look at during this year and really figure out sorry I second the mayors on that because in the end if you don't get the vendors to come in and what what if they're not seeing it as an advantageous business proposition than us putting up more kitty rides is not going to help out overall business plan. Right? So I think in general we need figure out either a why they're not coming or why they're not making any money when they're here. Yeah we can definitely and I'm pretty sure we're upside down on this. we are. Yeah. So the throw more money good after bad doesn't make a lot of sense in my opinion. We can look at that. I know one of the issues that that the vendors or that we have in getting vendors is that it's on a weeknight and a lot of people that do this as their side business they're not available the evening so most of the vendors that we go out and try and recruit say you know I can really only do it if it's on a weekend. So I know that's one of our challenges but that's something we're going to keep looking at this year. Okay. Thank you . Okay continue with rick parks and library, two big projects that are in here the plunge in the rec park phase one so for the plunge construction to begin in 2324, the current amount in the plunge reserve is $4.7 million. We're proposing an additional two and a half million for the current budget and then two and a half million in 2425 plus there's $1,000,000 pending from chargers our ventures and that would bring the total available to $10.7 million significant amount they have to reserve for the plunge. I'm not sure if now's the to talk through that but I do think that at some point in time I know with isaac there was obviously a delta between what we had to spend and what it actually cost and it was raised independently. Ah we probably should be considering what is the cap that we're willing to go to from a general fund perspective because that 10.7 is a big number and it's going to go up it's going to be 1213 by that time. So do we start the other piece of that to fill that delta now how do we go about that because I do think to be that we need to kind of set a cap on what we're comfortable with that would come out of the general and 10.7 is a big number event discussion out of that the agenda as I was I work out I because I know you're going I guess for the budget for this year it doesn't matter just go one of the 2.5 okay chose the 2.5 inclusive of what we already were accruing because we already had c ip money allocated to this I think $800,000 a year going forward. So is that inclusive that so kind of at the top versus current designated reserve the 4.7 million is what we have today at we had we had program money for 23 2425 previously earmarked for this so where is that money in the 2.5 or 2023 2424 25 yes. And that we when we increase that the two and a half. Okay so yeah so it's not 3.3 it's to have total correct grade and then the 4.7 also includes half million from chevron and 2 million from the chargers. Yeah. Is it a million from the chargers or is it 2 million and what is it pending on the completion of their facility when they have the obligation to make that payment. So they already made two payments of $1,000,000 each so we have 2 million that's included in the 4.7 million that we have in the bank today and then there is an additional $1 million. You know, I don't I don't know what the point is by now it is anticipated to come in in 2324. Okay . Okay. And then plunge reserves again 10.7 million by 2425. So the next discussion is rec park phase one. So currently we have 1.7 million in the bank today for rec park phase we're recommending $3 million for 2324 again that would be a transfer out from the general fund reserves into the cap and then an additional $2 million each year for 2425 and 2526 bringing the total reserve for rec park phase 1 to $8.7 million. Do we know the price tag for all of phase one? I have an estimate of what that's going to take I believe was estimated right around eight and a half point seven of it was estimated around eight. Now another item on tomorrow night's agenda will the contract with lpa design firm who retaining to help us design the entire phase one project so part of their scope of work will be to help us zero and more specifically how much we can anticipate that phase one cost to be. Okay we'll talk about that tomorrow. okay. So police budget to next overall there is very few changes. Administrative charges did decrease despite inflation due to some cost comparisons. So they've been very thrifty I guess is a best word at negotiating with their vendors . Save the city quite a bit of money. There is a half million dollar charge included in pd department to recoup liability insurance claims and that was at counsel's direction we've been doing this is the third year that we're doing this now increase to personnel background charges resulting from a hiring and then a $1 million reserve for short term additional staffing needs anticipated technology upgrades for policing from safety development impact fees and special revenue or non general fund sources and this was the recommendation from the public safety task force. So this this is not in general fund budget. This if council approves this would be included in the special revenue funds like development impact fees and other special police revenue funds. Okay there'll be another discussion about this million dollars we're not necessarily deciding you're earmarking this because of a proposal that we haven't seen yet. Yes. Okay. That's correct. Okay. police department continue. So as of APRIL, a department has 50 of the 62 authorized sworn personnel. I know that that's changing so I don't know if that's accurate as of what we're speaking right now but it's going to be pretty close. Previous fiscal years budget included frozen and vacant positions which again there are no more frozen positions and we are applying 5% vacancy rate to the pd as well. Overtime numbers increase when training increased or crime spikes. But one thing I do want to point out here that last bullet point 40 was historically about 1.3 million per year prior to covid in after covid has been running about 1 million a year and police department continued . So some of the annual support that police provides is outside of you know, the police. So I've still got a unified school district two resource officers a city of el segundo special events which have increased post-pandemic private business security patrol and some of that is topgolf chevron lakers. We do bill each of these entities for the fully burdened rate which will be you know, recoup all the costs both hard and soft cost. So just for clarification even the resource officers are not just for african unified also for the weissman district. Yes ma'am. So I just want to make sure we should add to that so it's clear that those two resource officers are actually covering the for el segundo unified school districts, the weisbrod high school and the davinci high school and the vista ma high school and then the thing I know we talked about securing include putting some of the the staffing for special events to take it from the arts and culture fund the you know with some of the some of the new events that the arts and culture fund that the college and culture committee have proposed require staff time so we were saying that we should be looking at capturing some of that money from the fund to cover some of these increased overtime. I guess it would depend on the event. So a lot of these events I know you didn't you didn't list the other ones like festival holidays and but we just need to make sure we are fully burdening those programs, those festivals through the arts and culture that we're capturing that as well. I know the arts and culture budget will be coming before you the first meeting in MAY so that would be MAY 2nd you'll see that budget and we can include discussion of that right. Just want to make sure you know like the other one is the art walk that takes up a lot of you know we have street closures there's a lot of work behind the scenes that the city has to provide that money if they're going to if that's under under the arts and culture budget then that those fees should really be accounted for for both our public safety as well as our public works because street closures and in managing the streets from the police perspective it we need to really when we look at these festivals we need to look at them holistically and see the complete costs not just you know, the short term the you know like the tents and the van. We need to look at the full cost. So on on any events we build the applicant know some of these events the council has chosen to subsidize and that's where the costs comes back to us. I just want to make sure we're we all are of the ones we're actually subsidizing and it's clear and that everything is really spelled out especially on the panels after know for one of the things that we talked to the arts and culture committee was that we really need to we really need to see detailed panels for each of these events that we're putting on so that we can make an assessment if it's if they're worthwhile to move forward with . Okay, okay okay. Another part of the police department budget is the south bay regional public communications authority dispatch center so that contract has significantly increased over the last several years. Hey joe, any idea what when we did dispatch internally I don't remember when that was but you know what the cost was for us and as an internal department, you know, I so when I came on in 2016 we didn't have the dispatch I don't know if chief bermudez or anybody from I know when we approved the new pricing a couple of years ago for. The dispatch it's admittedly just you know, wateringly expensive at the time that staff report they laid the previous dispatch and the loss maker it was so it still made more sense to do this but it's I mean this is just excruciating. It's crazy. Okay chief yeah yeah I was telling joe I don't remember the cost but I was involved with the transition from going from our internal dispatch center to going rtc and I can tell you it was it was a big undertaking but it's so much more than just the expense it's also the staffing and the management of it and the ongoing maintenance and so that very quickly can spiral thanks in general you're happy with that. I know there is a couple of snafus but I don't think that's related dispatch that's related to cell tower information. Yeah I'm I'm happy with rtc okay because if this continues to escalate we're going to see this this balloons up through 2025. I think this put the pricing on this more levels out I don't know exactly when it what the structure is but I can tell you there's very few options for police dispatch. So it would either require us to reopen our own dispatch or trying to get a couple of of cities to join with us because our actively recruit you know, areas to join. Yeah. It's going to be tough. Yes. Thank you. Yup. One of the positives about having an outside contract you don't have liabilities that come with in-house staff so that's also a plus . Okay. The fire department so the fire department is comprised of administration prevention koopa suppression, paramedic and emergency management and it's the city manager mentioned we are bringing back the emergency management budget so that frozen for 20 to 23 fire prevention will be staffed with five. Fte is historically vacancies have incurred costs to backfill staff so that's something the council has talked about in the past as well is the overtime costs and in the constant staffing model fire department continued us urban search rescue that you saw costs increase due to previous funding that has ended in implementation of new software for reporting requirements also that has increased and will overlap with last year reporting software. So one question it says per print and division to be staffed with five at ease what is the current if we can't now I don't know you guys have an answer to that currently we have four and we were going to propose that plan check position okay and then a lot of times those at these actually bring in revenue. That's correct. We were going to talk about that on the next slide. Do we want to go we want to move on to that. All right. Actually nicole is going to talk about cost recovery programs with the segment . So for 2223 this was the first year we were actually able to fully cost recover for fire prevention. As of now we have collected 194,000 and some change for plan checks 128,000 and some change for new and then for annuals we build for 68,000 but we've only recovered about 17 but that's just because our building was delayed. So we do plan and hope to recover most of that and for after hours inspections recovered 25,000. So as of right now we have recovered about 417,000 and our budget for 2223 was 400 is 463,000 and 206. So we are projected to recover that completely in addition to we just were awarded a fema grant for hundred and $23,000 which we will be coming to council with here hopefully next month and I believe that's it. And so we did as as you recall ,we've got come back with the dennis grubb contract several times and we have budgeted for I believe 150,000 which as the plan checks we've recovered over 194 so this more than pays for a time position so that would be the hope to eliminate that and have that planned if it does slow down and go out and do inspections as well so we can keep our inspections going and recovering. And one of the things on the with the additional empty were you would be able do more proactive outreach about earthquake and you know for the for the residents well as businesses can we because I know one of the things we had I brought up before is that during covid we kind of put earthquakes out of our mindset as we're focused on covid and I think we need to get back into the focus of being prepared