City Council - Special Meeting

Thank you, sir. Please do so by filling out a speaker slip and handing it to our city clerk. And if we could get a roll call. Council member Garcia here. Council member Pundiff here. Council member Molina. Okay, we're going to excuse council member Molina, Mayor Pro Tim Manley here, and mayor Cervantes

here. And let the record show that our city manager Cobalt is here, city attorney Flower is here, our city clerk Gurtis is here, finance director, Reed, right? Our community uh development director, Lucia, still getting used to that title, is also here. public works director Shakir walking in. Our city engineer Thornton is here. Our deputy fire chief Shaw and our sheriff captain Escoal are here. And if our captain wouldn't mind leading us in the pledge, we would be honored. Thank you.

Allegiance to the flag of America to the republic which stands one nation under God. and justice for all.

Thank you, sir. Madame clerk, do we have any communications from the public? No communications from the public. So, we are going to move on to our one and only item and that is our workshop session, item one. And I am going to hand that off to our city manager as he grabs the clicker. All right, let me make sure that this is connected. Yes. All right, so uh good afternoon, mayor, members of the council. Um, so today I will be going through and I added a lot of um some background information on property taxes today. So that's the main reason that I'm going to be giving the presentation today. Obviously our staff is going to be here to answer any detailed questions about individual departments. Um, obviously, uh, Celeste, our finance director, um, has a lot of information as well because she was very deeply involved and led the process of putting this this document together and, um, the many, many hours, um, of of of coming up with this information. So, with that, we're going to dive right into the presentation. So, we're going to go through some fiscal year 2526 accomplishments, and then we're going to go through the general fund. We're going to focus in on the general fund. Um and then um you know as we go through it if there's questions or comments on things um we certainly want to uh to have that. We don't need to wait for the end. So if you have a question please feel free to stop me at any time and we can answer those questions as we go along. So let's start with our fiscal year 2526 accomplishments. Um so we did a number of things. So we we have our uh Mountain View Park partially open. Um we had our library opening in the fiscal year. Um

we purchased our new city hall. We celebrated our 35th anniversary and we've had a record number of community events um led by uh Yza and Motti um doing a great job with with all of those along with um the work of our public works staff and really our entire team um really comes up and and and comes through big for these these things. That's in addition to their all their day-to-day um jobs. So, this this staff really comes through and um goes above and beyond for the community and I couldn't be more proud of that. Um we completed our strategic plan workshop. We we did a roof replacement of the senior center here. Um we finally completed there's still a little bit of paving along on Cali Line Road, but the the county line road roundabout projects is substantially complete. We did some uh we did a ADA project for the library. Um we're on we're currently undergoing a safety element study. Um we entered into a park security contract um for our cameras which will be start starting installation shortly. Um and then we uh just recently Kelly completed the uh development and capital improvement project story map. So um if you haven't checked that out already, I sent a link in my last report and so uh a lot of great information and that will be continually updated as new information comes along. And then finally, we have our uh new meeting agenda um software and um accounting software. And Celeste, would you be able to tell us when the go live date for our new ERP will be?

Certainly. We're beginning our go live starts May 4th and it's about a 3-week phase in process. So, we're very excited, very pleased to be at this point. And again, that's, you know, they the the staff here, the the finance staff, um, had to, you know, did that in addition to all their duties as well, keeping things, you know, paid up to date. Um, bankruptc, you know, we're we're always updated on that. You hear cities that that fall months, even years behind on their bank wrecks. We're always very current on those things. And so, they were able to do that in addition to um, implementing this new software. Hopefully, it's, you know, short-term pain, long-term gain in terms of the efficiencies that that it creates for them and um accessibility of information for for our staff. Um and and really the staff all also came through with this one too because there was a lot of training that we did to get ready for this um changeover. It's very different because the software we use today um was implemented in 2003. So, the technology has changed quite a bit. This will be a web-based system and so we're as Celeste said we're very excited for for this project. So let's jump into the fiscal year 27 general fund. Um I don't want to focus on this one too much because um there is a bit of a change. So as of right now on this this what is what matches what's in the um your workshop um agenda shows about an $85,000 ongoing surplus. Um and that's really the focus, right? So, that's the focus of of what we we'd look at on a year-to-year basis is are our ongoing revenues covering our ongoing expenditures. That is that is the the um biggest indication of fiscal health. When you start to see um one-time revenues or one-time reserves covering um recurring costs, that's where concerns start to to rise. And we see that in a lot of cities. And I'm going to explain a little bit why that might be why we're seeing that in not just you

know neighboring cities but throughout the state um on a on a more macro basis. We're not seeing it here today obviously and that um is a big you know tribute to not just uh staff and prior city managers our financial director but in our and our entire staff but also the this city council and prior city councils of of maintaining fiscal discipline. Um the one-time expenditures um those and those those are mostly consisting of transfers out to replenish certain reserves. And so those are very strategic in nature, but they overall don't necessarily impact a lot of money going out the door. They're just moving money to other funds that are more appropriate for those particular reserves and making sure that we're hitting our reserve targets. But I do have a res I do have a revised version of this for information we learned recently. Um we got a we got information from our insurance carrier car carrier um Sierra um and they let us know that they moved some of our liability to a different risk pool. So we there is a general risk pool and there's a fire fire risk pool and then they've taken on more and more fire agencies and so what they did was is that they noticed in liability co claim costs uh that the risk level is a little bit different on the fire side. So by moving some of that to a different risk pool, it actually um saved us $90,000 of what we had projected um our insurance cost to be. So now our revised ongoing um surplus is about $175,000. So a decrease in $90,000 of our expenditures um results in that extra um amount in ongoing um uh surplus or net fund balance. So that's just something to keep in mind as we make decisions and things like that as we go forward. So looking at revenues, um

our largest revenue source, um it consists of two two categories. It's the property taxes of just over $5 million and the property tax in lie of VLF of 1,778. So those two together are about $6.9 million. And so because that makes up 61% of our revenue, I felt it was a good idea to take a maybe a deeper dive into kind of the history of how property tax works in California because I think that does represent a a lesson in terms of why a lot of cities are facing some fiscal challenges and why revenues are not keeping up with costs. And no, it's not because of mismanagement or or inefficiencies or anything like that. There actually is a very much more fundamental reason for that. And so we're going to go over that. It's again something that the city of Calama is not concerned with today, but it's something we should be aware of as we go forward so that we as we make decisions, we keep these kind of things in the back of our mind to make sure that we understand the fundamentals of our of our highest our largest revenues. Um, we're also going to have a couple of slides on sales tax because that's also a significant portion of what we do. And governmental revenues, the primary source of that includes CFD1 revenues, which I'll talk about a little bit later as well. And that's about $925,000. So when you take those three revenue sources, property tax, sales sales tax, and CFD1, that makes up about 85% of our general fund revenue. So, and we and by the way, we do have copies. Do we have the copies? Does everyone have a copy of the We do have copies coming of the PowerPoint presentation. So, you you'll have you'll have hard copies of that in just a moment. So, Prop 13 is the basis for property tax in California. It's one of the most famous uh propositions ever passed in California. It was a landmark um

proposition and it continues to carry great popularity and with good reason. Um so I just want to preface this by saying this is not a debate whether Proposition 13 and in subsequent policy is good or bad policy. That's not that's not the issue here. It's just about what is this policy what is the impact on revenues uh for cities in California. That's really what this is about, right? Um, and so Prop 13 did three major things. Um, well, it did four thing major things actually. One of which was not listed. The first thing that's not listed is is that it requires a twothirds majority of the state legislature to pass state laws or state additional state taxes. And so, but again, it doesn't have to go to a vote of twothirds of the the the citizens. It's just twothirds of the both houses legislature and obviously the governor's signature to pass state level taxes. On the local level, it did three things for um property taxes. Number one, it rolled assessed values back two years to the 197576 levels. So this was passed in 1978. It capped increases in assessed value at the lesser of CPI. I said CIP. It's actually CPI a little little dissexy there. apologize or 2% unless sold or substantially improved. So when a when a home sells, the assessed value is reset to whatever that sales price is and vests the power of the to the state legislature to determine how property tax distribution is set. And I'll explain what that means a little bit in in in in a in the next slide. Um, another proposition that was passed just 5 months later was Proposition 8. So this allows for the reduction of assessed value if the market value drops below assessed value. So let's say this this happened a lot during the great recession. People bought at the height of the market and then the prices

crashed and so there was a lot of Prop 8 valuations and I'll talk a little bit of more about Prop 8 in in another slide. Um, and then so remember I said the this the state legislature was the was vested the power to determine the distribution of property tax revenue. And so that was done through AB8 back in 1979. And so what that did was it created the distribution ratio of property taxes because remember it set the rate at 1%. So it doesn't matter what was being paid before. And this will make more sense when we go to the next slide. Um but it also um shifted $2.7 billion dollars from school funding to city and counties and then backfilled that to the schools. So the schools were still made whole because as you're going to see there was about a 60, you know, 50 to 60% reduction in property tax revenue as a result of Prop 13 right off the bat. So um and then in 1982 we're you know most people are familiar with community facilities districts. So SB201 is known as the Melouge Community Facilities Act. So that's created CFDs. And so it helps fund infrastructure and services um that used to be pro would have been funded under Prop 13 or under property taxes before Prop 13, but because of those limitations that revenue went away and so it allows the creation of CFDs and typically those are created um pre-development. So the developer it's goes if there's a certain number of if they certain number of voters don't exist, the land owners can then um vote to put in a CFD and that's usually just one landowner. It's usually the developer that owns all those parcels and they they establish a CFD before anybody ever lives there. And it creates a partial tax, not a property tax, an advalorum tax. So that basically means it's not based on value. It's usually based on some other property

characteristic, whether it's land use type or property size, whether it's lot size or usually with homes, it's the size of the home. Um, and so these are used by all sorts of agencies throughout the state, cities, school districts, counties, special districts, all sorts of of agencies use them. And we'll look at how that impacts Calam a little bit later. So, I talked about how the how what happened with Prop 13 and it capping the the tax 1%. Prior to Prop 13, every taxing entity would set their own rate. They would say, "We're going to charge X amount per $100 of assessed value." and the county assessor would um would assess the value of each property according to its value. So what was happening in the late 1970s was property tax or property values were going up significantly and value in property tax rates vary greatly. So depending on you know the needs like if a city had a large sales tax base for example they would have a lower property tax rate than other cities that maybe rely solely on or very very heavily on property taxes. So each of these entities that you see listed here and this is a hypothetical example. I don't have data that goes back this far. So these are kind of madeup numbers but it just it's just an illustration as to what each entity would charge. So the school district says, "Okay, we're going to charge 59 cents per $100 and fire districts 31 cents and Riverside County is 24 cents." And this is meant to be kind of an illustration of what happened in the city of Calama uh prior to our incorporation. So this is around the 1978 time frame when Prop 13 was passed. And so basically your tax bill would be and it would be all of those different entities added up together multiplied so that you get that total tax rate multiplied by the assessed value and that'd be your property tax bill. So in this case this property was assessed a total of just

under $1,800 based on a value of $113,000 or $114,000 with Prop 13. that same that they what they basically did was so for example if you look at the school district um the ABA basically said okay the school districts uh collected $671 of that $1,800 bucks. So you just take that the 671 divided by the $1,800 to get a percentage of 37.4%. So now going forward the school district will get 37.4% of that property tax. Same thing with the fire district tax, etc., etc. So, all those percentages add up to 100%. So, and the other thing was, remember I told you we rolled back the value of the assessed value. So, now the assessed value of that same property is $104,000 rather than $114,000. So, instead of 1.58% of $114,000, now they're paying 1% of $104,000. So, their property tax bill went down um by, you know, $700 essentially uh per year. Pretty significant percentage. So, because I said each city set their own or each entity set their own tax rate and then Prop 13 basically uniformly said everyone's going to pay 1%. Doesn't matter how much they were paying for, they're going to pay 1% now. So because of that each city has a varies widely in what they charge. So I looked at our city and I looked at banning in Bulmont. So city of Calam's taxes portion of the 1% is 10.06%. And then the Camea fire um district is 19.7%. So Benning and Bulmont you'll you'll notice they don't have their own fire district tax like we do. So at some point in the past

um the county had created a fire district for to pay for fire services in unincorporated areas. So obviously in when when the fire district was created it was pre it predated calamsa but it was after banning and bowont were created because they were created you know in the 1910s and 20s. So that's why they don't have it and we do. So when cities incorporated after those fire tax districts were created they would inherit the fire district tax into those cities. So all the newer cities in Riverside County have a fire district tax. The older ones do not. And so when you combine those, we get about 20 almost 30% of the property tax. Whereas the city of Banning gets about 18% of theirs and the city of Bulmont gets about 12%. You notice that in both cases, the county actually gets a higher percentage of property tax in those cities than the cities themselves do. So what so what were some things that happened after that? So AB8 I I'd mentioned had created a bailout for cities as a result of revenue loss, right? But the legislature began to roll that back is they had started to have budgetary issues because when when Prop 13 passed and it lowered property taxes, remember property tax is a deduction as a tax deduction, right? So what that the the side the side effect of that was income tax went up because deductions went down. So there was more taxable income. So the state got a windfall as a result of that. So it kind of shifted some of the tax burden from the local governments to the state. And so that's how the state funded those bailouts initially. But as as time went on, states started to see budget issues in the mid early and mid 80s. So they started kind of of of you know clawing that back. And then in the early 90s we had the base closures as a result of the end of the cold war and the SNL crisis. So that created a recession and the state had a budget

deficit. So what they did was they created the education revenue augmentation fund or so they did two rounds of this in the early 90s in '92 93 and 9394 shifted money from the cities and the counties to the school districts. And what that effect had was is that it basically lowered the state's obligation to schools. the schools didn't get more money, they just got more money from property tax and less money from the state. So, and and 2 actually is about the same amount that was originally shifted in the AB8 bailout. So, that basically undid that in the early 90s. ERAF 3 was a temporary compromise. So, that was only for two years. So each year they the there was there was $1.3 million billion dollars shifted from cities and counties to school districts but then that was undone after 2006 and that was a that facilitated the passage of Prop 1A. So that project protected future shifts of money away from cities and counties. So basically the state couldn't do budgetary tricks to basically shift money away from cities to plug their own holes. But it did gradfather in RAF 1 and two. So those still exist today. So if you look at the the the impacts of it, on the left is the pre-ERF shift. On the right is the post ERAF shift. And so you see all those on the left that you see the the key down at the bottom. All those that are highlighted in orange are entities that had money shifted from them to the ERF. The biggest ones that were impacted were counties. So they got half of their money, half of their percent, you know, half of their allocation was shifted to the RAF. 25% of the city of Calamas's was went to RAF. So our our percentage goes from

10.06% to 8.8%. But the fire one was not touched. That was not impacted by RAF. So this the larger shift from the counties had a bigger fiscal impact on them obviously. And so when we look at annexations and there's a there's a long-standing agreement when when you when you talk about when this when a city annexes some unincorporated territory, there's a 7525 split, which means that the that the county retains 75% of that revenue from that annexation and the city that it's annexing to only gets 25%. And one of the driving forces of that is that RAF shift because of the impacts that this the county has had because not only the the there's been kind of a double whammy on the counties. Not only did they have that money shifted away from them, but this one of the things that the state has also done is they've shifted responsibility for certain programs, certain social programs from the state to counties without without necessarily enough money to be able to account for those. Some of it does come from sales tax. They do some of the county some of the states share of sales tax goes to the counties to pay for some of those programs but it doesn't cover the cost of them and so that's why the county is so adamant about keeping that 7525 split. I know there's been a lot of talk about um trying to change that trying to change that ratio because obviously cities are taking on the burden of the providing services to those annexed areas. But the county argues, hey, we're already providing we're already subsidizing a lot of programs that have been um shifted to us and that's why they fight so hard for that. So, as a result, it creates about an 8.6% RAF. So, now 8.6% of property taxes in Cal Mesa go to the education revenue augmentation fund even to this day. So I talked about the so we talked about the big property tax but remember I

talked also about the property tax in lie of VLF. So prior to 2004 cities got vehicle license fees. So it's a 65% tax essentially on vehicle on the value of the vehicles, right? It used to be a 2% but what happened was is that the state would only charge the 65% but would would charge would calculate another 1.35% and transfer that to cities. So in 2004 the state decided to do away with that permanently reduce the VLF rate to 65%. And so the way that they made the cities whole by taking that revenue away as a prop 1A was they did what they call a triple flip. And so what that means is that um and again we get about $1,778,000 from this property tax in VLF. So the state cut the VLF and so that obviously stayed with the general fund, right? So what they did was is they shifted $4.3 million to the K4, you know, to um school districts and community colleges. And then in order to make the cities whole for that $4.3 billion, they took $4.3 billion of RAF revenue and gave it to the cities and counties to make up for that. So it's a dollar for-doll swap. So the city still got got the same amount of money, but instead of getting it from the state through VLF, they got it through property tax, additional property tax. So that's where that 1,778 comes from. It used to be VLF that we would get. But the the nice thing about this is that the city is a benefit in the long run. That was the base year and it would grow proportionally with your property tax. So whatever proportional share that the the the a city gets in property tax, they would get that same percentage share of VLF or of property tax from from RAF for the to make up for the VLF. Well, over time that number has

grown more than VLF would. So if V if we had continued to get VLF, that dollar amount would actually be less than what um we get from property tax. So that that was actually a beneficial thing in the long run for cities and counties because remember homes generally appreciate, cars usually depreciate. So your your your VLF will go down a little bit because it's based on the value of the car. So it does actually go down a little bit every year. So, I had said that Prop 1A had eliminated the state's ability to shift revenues away from cities and counties to plug the state's budget wos, right? But they did have one last trick over their sleeves and that was the elimination of redevelopment agencies. So, what this did was it shifted money that previously went to RDA. So redevelopment agencies were agencies that cities could create that would basically freeze the assessed value in these pro what they call project areas and any money that was made from that any incremental amount would go to this RDA. So the property tax. So if you know you go in there and say there's a blighted area and let's say the valuation's a million dollars in that area the million dollars the the base the base valuation the property tax from that would continue to go to the taxing entities. But let's say because of redevelopment, another $2 million in value was created. The the property tax from that additional $2 million would go to the RDA. And the RDA would fund um would spur economic development. It was an economic development tool. Um and it would also fund infrastructure. So that was a major tool that that cities used. Um, you know, UKIPA, for example, a lot of what they did, the revitalization of their downtown and those roundabouts and things like that, that was RDA money. They use that, they use RDA money to do that because you can issue bonds against the RDA, against that tax increment. So, you're making an investment in the infrastructure there to spur economic development, raise

values, and then pay those bonds off. That's how economic that's how redevelopment worked. So, all the money now that was going to RDA's now goes to a trust fund. It pays off the obligations because when when RDAs went away, cities still had oblig RDA still had obligations. They had bonds outsting and things like that and they couldn't just say, "Okay, bond holder, sorry, you're screwed. You're not going to get paid anymore." So, they take that money off the top to pay those obligations and then the rest of it is distributed back to all the taxing entities according to that AB8 formula that we talked about before. So what that what the effect of that was is that it was a windfall for schools except for the fact that the more property tax money schools get the less assistance they get from the state. So the states this most school districts except for very wealthy areas most school districts didn't see a change. It just saw a change in their revenue mix. They got more property tax money less money from the state. Well, lo and behold, shortly after the elimination of RDAs, the state had a big had a big budgetary surplus probably at two about two years after that. And that's what created that because their their expenditures for schools went down by a significant amount. So, when you look at I talked about how Prop 13 there's a cap of 2%. So the assessed value, as long as you hold on to your home, your advalorum tax, that 1% tax can't go up more by more than 2%. It could go up less. And there are 10 examples on here that it does go up less. But out of the last 50, these are there's 50 bars here. 10 of those it was below 2%, the rest were above 2%. And so if it's less than 2%, then they get charged whatever that CPI is. So you can actually see in 2011 actually it was negative. So property taxes actually went down a little bit as a result of that.

So if you look at CPI over the last 50 years, um things cost about 6.6% t 6.6 times more than they did in 1977. That's what the index tells you for Prop 13 property. So those that have been owned for long-term since Prop 13 went into being. There's not a lot of those, but there's, you know, you think about longtime homeowners, things like that. um the assessed value has gone up about 2.5 times um since 1977. So you can see how that that that that difference they're paying 2.5 times more for services that cost essentially 6.6 times more. So that you can see where that can start to create a problem. Now wanted to show a couple of different a little bit of different indicators. So this starts in 1990. This is Riverside County. So the base year is 1990. That's the year that we incorporated. So I just want to look at, okay, since Calama became a city, how's it looked overtime for us? The first line, that gray line is the median house prices. So median house prices are about four times 4.5 times higher now than they were in 1990. But you can see there's great fluctuations. And you can see where those fluctuations are. They they the prices spiked in 2006 then kind of cratered in 2008 2009 through up through about 12 then started to go up again. Um consumer prices are about 2.5 times higher than in 1990 and the Prop 13 index is about 1.8 times higher than it was in 1990. Meaning if you owned a home since 1990 your assessed value is about 1.8 times higher than it was in 1990. Prop 8, Prop 8 had a big impact on homeowners that bought mid 2000. So, we we saw a spike in Prop 8 claims and I'll talk about that in a couple slides. Um, but what this tells us,

um, what has kept the suppression of Prop 13 rates, you know, because the because that that 2% cap from being a bigger issue um, is that real estate has appreciated faster than CPI. But this only helps when there's property turnover, right? So you only see that difference, that spike in value when something sells, right? Whether it's new, whether it's new construction or homes, existing homes that sell, right? So like let's say it's a, you know, someone bought a house in 1990 and their assessed value is at 200,000, but their house is worth 500,000. Someone comes through, buys that house, now it resets up to 500,000. So it's going to be higher than it would have been with CPI. So that kind of counterbalances some of that. um impact of not of keeping the the assess values low. But in times when you don't have a lot of growth, you only see about a two 3% turnover in houses in any one year. Um so and in Cal Mesa, that's even a bigger deal because we do have a high ownership rate. We're about 90% of our homes are homeowner home owner occupied homes. So little so when you see older areas like older cities that have little growth and low home turnover, they struggle more because they're not recovering as much of that of that suppression of of revenue compared to CPI over a longer period because you don't have a lot of that turnover. So they don't they don't get to get the benefit of that uh those spikes and it's it's very unpredictable when those can come through. So another in thing that we talk about with with a C with uh we talked about with CFDs. So again these were a tool brought forward as a direct result of Prop 13. It helps cities pay for a cost of of serving new development. So prior to the Prop 13, you know, you could build in infrastructure cost in your tax

rate, right? You could change your tax rates. It's like we need to we need to pay for more, you know, parks or roads or whatever and you had much more control over that. So we created CFD1 in 2006 to fund the impacts of development on police, fire, including paramedic services and parks. So JP Ranch, Singleton Heights, and Summer are all included in CFD1. And as I stated before, we get about $925,000 for that. So it funds things like the pop officer, the additional firefighter positions that we've added, additional public work staff to pay for park maintenance, things like that. So that's what that goes towards. And we have to be very careful about funding things that are additive, right? We can't just think we can't supplant things that were existing in 2006, which admittedly wasn't a lot anyway, but it does pay for things that are additive like the pop officer is probably the biggest example of that and it takes up about half of that revenue. Then we also have CFDs that are specific to development. So this is Singleton Heights. There's two special taxes, one for facilities, which is like infrastructure, and one's for services. So the facilities tax drops off which you see infrastructure and the 2526 rates when those bonds are paid off for those improvements those will drop off you won't those will fall off your property tax bill but the services are ongoing so developers are responsible for building infrastructure and so the CFD is a funding mechanism for developers to pass those costs or at least a portion of them to the end user the homeowners. So the developer typically will build the infrastructure and then the bonds are issued to reimburse developers for those eligible costs. So some areas you see like you see home new development says oh there's no meerus low property tax rates you see that advertised right but what this usually means is one of two things either the HOA dues are higher because they're having more things funded by the HOA or you'll see a

a higher home price because homes the home prices are usually dictated by the house payments because most people take a mortgage of some some kind out on their homes and so that consists of four things right your your principal your interest your property taxes and homeowners insurance, right? And maybe you could say HOA dues as well, right? Because if you have a really some something some have like $400 or $500 a month. Um, so in areas with CFDs, the property tax will be higher, meaning less is available for principal and interest, which drives down the price. So you'll see you you may see two developments, one with with the MERS, one without, but the ones but the prices in the MERS, the no mess uh area, the house prices will probably be higher because you're not having to pay that extra tax. So this is also why obviously like interest rates for example, like if lower interest rates means higher buying power, it just shifts things from the principal, right? So you can pay for the same you can pay for more house quot quote unquote with the same payment. Um so as you can see the infrastructure rates are prrated according to the house size. So I talked about how it's a parcel tax. So there's different factors that go into determining what that tax is. And then the maintenance CFD is just the same for all homes. Everything's,4953. And those do go up by a CPI every year. that's built. Those are all built in the CFDs that were established prior to home ownership. Um JP Ranch has a similar CFD. They're similar structure um but they have different improvement areas related to different phases um and infrastructure needs. It may have cost may have varied from area to area. Hence the difference in costs. and in Summerwind R summer wind um improvement area one was the residential phase one um parts IA2 is Oak Valley Town Center and improvement area 3 is summer common so they're not paying anything yet because it says

non-res residential developed areas and obviously those are not developed yet so once they start once once development is there they start impacting services they start paying they start paying those bonds off so I talked about Prop eight. So this allows property owners to appeal their assessed value if they feel it's too hot, it's higher than the market value of their property. So we normally see this in commercial development much that's much more common in commercial development because like so I'll give you an example. A developer goes in buys a mall and then they tear down the mall. Now usually when you look at your property tax bill, there's a value for land and value for structures. Well, if they tear down the structure, that basically eliminates that that part of the assessed value. So, they'll do a Prop 8 appeal once that that demolition is done to lower their property tax rate, at least for the time that they're building. And then once it's done, then they'll get reassessed for the for the increased value of the improvements that they did, but they usually want to try to minimize that cost. So, that's where you see Prop E used the most. But we did see a lot of that on on the residential side during the recession. And so people bought at the height of the market and then prices went down. And so you that's the example you see here. So Prop 13 establishes not only what the what the base price is, but also a baseline going forward based on those those increases capped at 2%. So if you have a house that went up in in value in year two, it still only goes up by the 2% allowable under Prop 13, but in year three, the market value drops. you can do a property appeal and then they reassess the value um to that level. But then as long as it stays below that orange line in subsequent years, so year three or year four and five, it actually went up by more than 2%. But it's because it's still below that prop like if you had never done an appeal and kept that Prop 13 value, you'd be paying what's on the

orange line. But once that once the market value reaches and exceeds that orange line, it can't pass it again, right? So then so the green line is actually what the assessed value is and so it doesn't follow the market value anymore. So once the value once the market value exceeds that that prop 13 value that's calculated a year on a year-by-year basis it basically gets capped out at that amount. So that's how prop 8 and 13 work together. So how does this actually look in practical real terms? So this is examples of five different actual Calama property tax bills. So, example one is an older house that was built and occupied since be before Prop 13. Um, no ownership changes. So, um, and by the way, so that means the assessed value is $25,000. If CPI had been used, we I did some analysis. The a the assessed value would be $79,000 instead of $25,000. Example two is a household built in 2004 and was sold in 2020 for $555,000. So now the AV is 95 594. Example three is right next door to example two, but the house was last sold in 2014 for $274,000. So uh sold in for a lesser amount further in the past. So now the net assessed value is about $329,000. Um again if CPI was used that same assessed value be 371 but the value is 562,000 because it's a smaller it's a smaller home. Example four is is is located in Singleton Heights. Um that was built in 2014 and last sold in 2019. And example five is in Summerwind. Sold in 20 built and sold in 2020 and still um held by the original owners for $464,000. So the middle solid column bar for each of these examples, the light green base of each bar is the 1% property tax

portion of their bill. So whatever their assessed value is times 1% that's what that portion is for that for those pe for for for the each house. The olive green above that are school bonds. Um so debt service on school bonds those are also a percentage of value. So they're you know can vary depending on the bond that's issued. Those can be both school district and community college bonds. That yellowish orange that's above that if you see in examples four and five that's the CF those are the city CFDs. So CFD1 and the applicable CFD for that particular development. And then the last two, there's a gray and a grayish blue. It's hard to see those. They're because they're pretty small. Um those are other CFDs and special assessments. So special assessments, for example. Um you know, Metropolitan Water District has a small one. Sonia Hospital District, there's some others, some other entities that do have special assessments on top of that. So then the left hashed column is a is the total property or total bill as a percentage of assessed value and the the right hashed ones the one in red is the property tax as a percentage of or as a percentage of market value. So you can see that there's a big fluctuation between these two. And example two and three show that people on the same block can have very different bills, right? Even though they're paying for the exact same services. And that's kind of one of the dichconomies that are created. It does create a thing. It just depends on when you when you bought your property, when you sold it, those kind of factors. So this all kind of goes into what we see here. And so for you know we obviously it property tax has flattened out over the last few years. So for cities that have had little growth for over a longer period they probably would see flat all the way across.

But this is why you see so many struggle cities struggling and proposing sales tax increases because um you know when you see turnover and no new construction that obviously will give you a nice boost but over time you know th those taxes by design are not going to keep up with inflation. They're just not they're not designed to. So again it's not about whether it's good policy or not. It's about okay this is the policy we've been handed here are the impacts and that's what I think that that's all that's the only reason I want to present this. I know it's a lot of information but I think it's information that's worth sharing because um there's a lot there's a lot more detail to the story than people realize and so it's not it's not an accident that you see so many cities struggling. It's not just all these cities are inefficient. As a matter of fact, um, they've had to do, you know, the the the term doing more with less has been a mantra in city government the last 30 years really. Um, and and we they've had to do that because of these changes and the the last resort usually is asking for tax increases because nobody wants to do that. Staff doesn't like it anymore than than councils do and it's because it's hard and it's hard to ask people to pay more money. But part of it's because you know what benefits were gained from Prop 13 maybe unless taxes burdens on property tax side have maybe been filled by other types of taxes right because there was maybe more capacity to pay those so those been filled by usually by income taxes that's usually been the biggest one and that's a purely a state revenue that's nothing that we get to see at the local level and so when people saying say I pay too much in taxes it's because the the state has taken that excess capacity to, you know, and and appetite and filled it with in with other taxes that go that benefit the

state that don't benefit local services. So, that's the story on property tax. All right. So, any questions on that before we move on to sales tax? Um, I know it's again a lot of information, but Okay, we're good. All right. So sales tax um believe it or not sales city does not get all the sales tax. We get about 14% so 1% of the 7.75%. what's taxed tangible goods um both retail and business business sales but this is sales to the end user right so wholesale things are not so like if I if I'm a wholesaler and I sell to a retailer I don't pay I don't charge property or so I don't charge sales tax to that to that retailer the retailer only charges it so each good only gets taxed once you don't get you don't see t things taxed multiple times in terms of how that distribution works. Maybe an exception to that would be used car sales. So, you pay a sales tax on a news new car. If that car gets sold, there's sales tax paid on on that car again. So, that would probably be the one big exception to that. But, for the most part, if you go from wholesaler, like manufacturer to wholesaler to retailer, only the enduser of that product is charged sales tax. You don't see the sales tax up the chain from that supply chain. That makes sense. But there's a lot of things that are not taxed in California. And so this is just gives you kind of a a list here, but really there is a there's a book that talks about sales tax exemptions. And there's 15 pages of of exemptions like this. So it's about it equates to about $20 billion a year of exemptions on c on sales of certain items, services, both services and and products. So what does that mean? That means when you look at

when you when measured as a percentage of state personal income, California's sales tax base is actually the second smallest in terms of the base of goods that get charged for sales tax in in the United States. So looking at the rate is one thing, but there could be states that charge a lesser rate, but they tax more things. So I'll give you an example. When I was in Texas, um, I went to a museum and I paid a sales tax on my admission to that museum, but you don't pay that here. So, it's things like that. You know, if you go to a bowling alley, you go to a movie theater, there's sales tax assessed on that on that transaction in that in that state. It's not charged here. So, that's just one example, kind of anecdotal, but it's an example of how that can how that can vary from state to state. So looking at the rate only tells you part of the picture, I guess is my is the point. So um again, we've talked about this before. Um you know, despite inflation, our sales tax continues to be pretty flat. We do expect, it's not built in here because we don't want to plan for it, but we do expect to see a little bit of an increase, a little bit of a spike due to the gas prices. It's kind of a again a double-edged sword. On one hand, we don't like to see the the higher prices, but on the other hand, since fuel is their biggest sector, um in terms of of our, you know, sales tax mix, um the city does see a little bit of an increase on the sales tax portion of fuel sales as a result of those higher prices because it's a percentage of the price. Again, gas taxes themselves are based on a per gallon rate, a flat per gallon rate. So the price of of fuel like if you see a price go up the amount of fuel fuel tax the gas tax itself you're paying is still the same because it's just based on it's x x cents per gallon doesn't matter what the price is. So that's the difference between sales tax and gas tax.

So looking at our expenditures um you know again you know this is something that we we've talked about a lot and we see in almost every city um pro usually what what they say is you budget for your priorities and we've talked about how how public safety is a priority and this that's not unique to Calama. I think that in most cities um the number one thing that they they see a city provide is public safety and so your budget reflects that. um almost $7 million in expenditures between our our police and fire um department services. But how do we grow from one year to the next? So, I put this chart together to kind of show kind of some detail as to what happened from the budget the council adopted in 26 to the budget we're proposing in 27. So, there's things that went up, things went down. So, the first thing I did was okay, again, we want to focus in on um ongoing versus ongoing, right? So, we took out the one-time expenditures because those are one those are one-time expenditures. Um, we did grant we subsequent to the adoption of the budget, we granted an increase to our fire department for um salaries benefits. So, that's accounted for here. Um, the council approved healthcare contribution increases um which are accounted for here as well. These 143,000 for employee merit increases. Those are related to um you know the step increases that our employees get um upon completion of a successful year. Usually it's 5%. Um we have several new positions that are being proposed which we'll talk about in a in a couple of slides. That's $230,000 in cost of the general fund. Um for our sheriff's contract, we broke this out between the increase in rates and additional 1 hour per day. So the contract has been running at what we call 107% of the contract. So, basically, we our base rate is for, you know, a 24-hour deputy. Um, but there's occasion where

they send a second deputy into Calamsa and we pay for that. So, um, we're, you know, there's we we've already budgeted for one hour a day and so we're now because of where the contract's been running and trending, we're adding another we're adding another hour a day. So, we're basically paying for 26 hours a day and that's and then in addition to that, we're also paying for the POP officer. the pop officers on top of those 26 hours. The insurance number, $83,000. I'll put a little bit of an asterk next to that one because we had talked about earlier about how our insurance is going down. So, you can basically eliminate that because this is based on the numbers you have in your budget that are presented in the book today. Um, but again, that was some good news. So, that 83,000 essentially goes away. And then we looked at various other increases. These are increase in contract prices. um you know op basically operation maintenance um you know to capture inflation increases in various contracts and so that's what reflect that's what reflected there and there's many different areas where that is too many to list um but it only ends up being you know roughly you know about less than 2% of the overall increase. And then we we we looked at our cost allocation plan and made some changes based on some of the trends that we were seeing and capacity in fund other special funds to um reimburse for costs. So these are costs that are provided to the general fund to those various funds and so we reallocated some of our salaries to our special funds and increased our cost allocation. So that did result in some savings to our general fund as well. And again this is all um this is all originates from our number one our workload mostly related to um public works in terms of the services that they're pro providing to spec special areas and also our our adopted cost allocation plan. So these are all studied very carefully and um

have uh detailed justifications as to what these numbers are. we had been undercharging um according to our cost allocation plan um because of the capacity of some of our funds to be able to fund them and we've went back and re re-evaluated those and they were able to pay and then of course adding in the one-time expenditure of 15,000 to get to our proposed budget. So that's kind of the flow of where we get gives you a good snapshot of how we went from one year to the next. So, when we're talking about um you know RSO increases, our long-term increase over this time was about 5% but more recently 7%. Um we we've talked about this in detail, especially last year. Um there was some contract negotiations that that took place with the sheriff's department, increases in um and salaries, things like that for retention purposes. um about 86% of the overall increase is directly related to um deputy costs which would basically be wages and benefits. So the good news is that most you know the vast majority of those increases are not going into some kind of county bureaucracy. They're going directly into the pockets of our deputies and our sheriff's partners. So you know sometimes you see these increases and sometimes it's sight a lot of it sight siphoned off to other county services to kind of subsidize things. The good news is that, you know, we're it's a very healthy percentage that actually is going to our deputies. And so again, this is the trend line of our of our operations costs. And so the last one, if you were to go back to fiscal year 21, you'd see a drop off there because 22 is when we added the POP officer. And so this just shows the overall trend, mostly reflecting um increases in the rates. Um, but again, we also talked about the increase in hours that we're trying to reflect in the budget based on our actual usage of SER sheriff's department services. So again, that 107% of the contract uh issue.

And then looking at the fire and community risk um bureau, you see that we actually kind of flattened out here a little bit. we're changing. We we we went through we worked with um Chief Shaw and we really wanted to fine-tune some of our um operation maintenance areas um to areas to to to numbers because we had been coming under budget when we look at uh budget actuals. there had been years where we're actually coming in significantly under budget and so I said let's look let's let's sharpen our pencils a little bit and um the fire department we really looked at this and um I do appreciate um Chief Shaw's help on that and coming up with more uh with with realistic numbers that are reasonable for them to operate under and again the the the thought is is that if there's I want them to plan for anticipated normal routine maintenance if there's something extraordinary we can always come back and talk about that because if it's extraordinary that should mean it's one time in nature right if things are happening over and over then it's rout then maybe it is routine but a lot of times we're I think we were budgeting for the just in cases that are that probably really are one time so we really went through and refined those things and we also wanted to make sure we were realistic but not sacrificial on our training budget as well so that was one thing that chief and I looked at very carefully we wanted to make sure there was a good balance of making sure that our our firefighters are well trained ained and we have sufficient budget for that. Um, so we we really we really did a deep dive into that to make sure that the funding available for that is reflected here and we believe it is. And so again, this is prior to the additional information we got on our on our Sierra insurance, but you can see though even if you bring the fiscal year 26 if 27 down to fiscal year 26, you can still see that the the increase is significant. It's over over doubled over the last 5 years from 22 to 26. Uh

significant increases. But this shouldn't be too surprising because we see this in our personal lives, right? We see it in our homeowners insurance, car insurance. We're all all facets of insurance. And so cities are not immune for that. So again, we are, you know, we're not immune from the from the pressures of inflation anymore than anybody else is, whether it's a business or individuals. you know, if prices go up, we have to pay those same prices. It's not like we get a special deal or or anything like that. But, um, again, you know, I do appreciate Sierra's work in making sure that they're putting us in the right risk pools and reflecting our costs that way. So, it does give us a little bit of a of a relief this year, but for fiscal year 28, we're going to probably have to anticipate similar increases. So, it's probably a one-time type of deal in terms of of increases. Um but again it'll be it'll be at least increasing from a lower base. It's not going to be going Act 573 and then beyond that at least we're not having to make up for that. But again um we do anticipate I don't I don't know if there's anything that's going to happen that's going to significantly change that unfortunately anytime soon. So we are um proposing three new positions um and staff is available to discuss these um further if if needed. Um, we are proposing a maintenance worker one or one slash two. Um, and so we're we're we're saying one slash two because we're we want to have a little bit of flexibility. There are pros and cons to hiring a one versus hiring a two. Two is journeyman level has some experience. Um, a a maintenance worker one is an entry- level position, but we've also had a lot of success in hiring at the m maintenance worker one position. us. So get somebody, they may be a little green, but maybe they're very enthusiastic about their job and they can learn the Cal Mesa way and we can train them the right way. Um, and so you usually get some more enthusiasm from from employees like that. So there

are some benefits that maybe you don't you lose on the experience end, but you get on the being able to mold them in their in their um, you know, their drive for the job. And then it also would, you know, we're budgeting in a way that will allow them to work into a two position as well and having that opportunity not only for them but maybe for existing staff as well. So um that's that's the reason we're we're budgeting for it that way. Um we are proposing an associate planner position. What this would do is would largely replace um contract planning. So, we've been using a contract planner two days a week here at the city for Michael Baker and there's been some, you know, fluctuation in that position and people leave and we get reassigned somebody and they we lose institutional knowledge and we're only getting two days a week of of coverage and so we are um we are proposing a new in-house position which will be a full-time position. Um so that will increase our capacity in the planning in the the community development planning department. Um, and it'll also, you know, we we do get some offset from being able to charge to our developer deposits. So, whenever planning is doing work or public works or engineering is doing work specific to a development, we do charge for that. We do charge that development for that. So, that the taxpayers aren't paying for that. They should only pay for more of the general quoteunquote general services or services that we charge a fee for. We have a fixed fee for. Obviously, we incur that cost, but we do make up for that on the revenue side. But anything that has a developer deposit to it, we do charge all of the the of staff time to that. Um and and it's fully burden rate by the way to to those uh different positions. And lastly, a human resources and risk manager position. um we have an impending retirement and so um we're obviously planning for that and that with with the complexity that we've added um with the fire department and the HR challenges and and again with looking at insurance and risk management

um there's just more and more that is done with that function. So um we believe it's time to fill that position. Now this is not the full um cost of a full year of this position. It's only um 7 months of the 12. So we do have some planned ant um some overlap with um with our retire with our future retiree. Um but we we felt we didn't we don't need to hire that position July 1st. Whereas the other two as soon as the budget's adopted, we're going to start recruiting for those positions. But this one we're probably going to hold off a month or two. We still want to do start the recruitment soon, but we don't have to start it up right away. Um, but again, we're gonna we're going to kind of work our way backwards to okay, what is a what is a re reasonable recruitment timeline to get someone on board by December 1st. So, that's our goal. Um, not included in this budget is any uh cola increases. So, again, that's where that $175,000 comes into play, right? So, there is some flexibility for this for the council to consider that um and um any benefit any benefit increases aside from what we've already presented. So, for example, the um increase in health insurance contribution that's already that was already granted and that's that's reflected in the budget, but there's nothing on top of that. So, when you look at a reserve pol, you know, this this is in line with the reserve reserve policy that the council has has approved. And so, we have a number of different reserves for a number of different um of of areas. But what this shows is that we continue to be very fiscally healthy. Um, again, we have just over, you know, when you take out mobile home rent, it probably it's just under $4 million in terms of our unreserved fund balance. Um, but we do have our contingency reserve in there, fully funded, our insurance fund, capital projects fund, vehicle replacement. These are all um these

balances are all in line with your reserve policy. And again by the way this this could change because it'll be reflected um based on final numbers from 26 too right so this assumes certain spending in 26 to for beginning balances and then assumes all spent in 27. So again this is the actual results will differ from the projections just it it's for simple fact that whatever 26 ends up could could um have this fluctuation. Normally we see a little bit more um because we usually come in under budget. Um we just don't know what that number is is. So we we just assume that all of it gets spent. So on the capital side, not a lot to talk about here, but um we did want to highlight a few things. Um we are doing some ADA ramps throughout the city in accordance with our ADA transition plan. Uh we do have $150,000 in park security currently funded through um proposed through diff. Now, there may be some fluctuation to that um when we come to the final budget um because there's some additional um costs that we're looking at for Mountain View Park um that we may incur um with some options that we would share with the council before we move forward with those. But that would probably be that would probably impact the amount available for park security. Um citywide pavement management. This is from various sources, not just, you know, this is from uh measure A and gas tax and SB1 funds. $1.3 million is what we're proposing. And um staff does plan on coming to the council soon with some options as far as what streets to pave. So be on the lookout for that. Um we are proposing um uh personal protective equipment for fire of $125,000 per year in fiscal year 27 and 28. Again, keep in mind that the council when they adopt the budget, even if you're adopting a five-year CIP, the outy years are just estimates. you're not actually adopting those numbers, those hard numbers.

You're only adopting for appropriation the number that you're appropriating for fiscal year 27. So that would obviously be in front of you in 28 again next year. Um a cardiac monitor pulser machine for the fire department 80,000 uh housing element. It's we just got her approved it feels like not too long ago and guess what? We got to start working on it again. Um and it's not cheap. Uh thank you uh HCD. Um we are looking at adding some budget software. So we are just getting through the ERP implementation. We're not sure about when the you know we may we have some uh software fatigue a little bit. So we're looking at at timing on that but um we do believe that would be something beneficial in the long run again for efficiency in in in house and also allowing for more tools for the public to see um get a little bit better sense of reading our budget. Our our budget I will say is very very detailed. We we probably prepare more of a detailed budget than most cities do in terms of we not only have like line item detail like account number account level detail, but we actually have detail underneath that that shows you exactly what we're spending the money on. You don't see that in a lot of places that level of detail. Um but the budget software would help. We do rely on on um Excel spreadsheets that are linked and a lot of those links you've got to make sure that all those files are open to make sure the links work because sometimes they don't and you get reference errors and you have to then close it out and open it again. And so it does take time and energy for that for the finance staff to put that stuff together. But again, they do amazing work with that. Um and lastly, um we our playground equipment is due for some um overhaul at Mountain View Park phase one. So, um, those were installed in, you know, 2014, 2013, 2014 era. So, um, it's those are those are due. So, we do regular, um, inspections of all of our playground equipment. So, um, we want to make sure that our playground equipment

is in tip-top shape for our kids to enjoy. So, looking at ahead again, um, we we expect to see minor revenue increases. um we don't build anticipated um development into our into our projections um for revenue just because you know there's been there there's things that get approved and then they stop right um and you know Celeste and I joke I always joke with Celeste I said I don't believe that I I really don't count on the revenue being there until I see vertical development well now you see what is happening with Dutch Brothers so I don't even believe that so now I probably need to go CFO is probably the time that I really need to look at that. Um it's just it it's you know it's unpredictable and so uh you're we're better off not anticipating that rather than anticipating that it not coming. Um cuz we've seen cities close by that have uh counted big time have have gambled big time on on their development that didn't happen and it and it cost them. So, um, my recommendation is that we don't do that and put ourselves in that in that same the same boat. A salary increases of 5% that accounts for, um, we're we're getting more and more to the point where we have more and more employees getting to that top step, but we still have a significant number that aren't. So, we still have to build that into the budget in terms of those those increases. Um, and then software annual subscriptions. Most softwares are now you don't buy them out of the box and just pay for them once. It's a it's an annual subscription, right? And the the industry standard is 5% increase. Every single contract we see, they always propose 5%. Seems arbitrary to me, but that's that's what they've been. And again, um we're we do um we have had a long-term average of 5% but 7% in the sheriff's department in the next three years. Um the sheriff's department actually will be doing a presentation on

the details of their inc anticipated increases later later this week. Um, so we're going to be, unfortunately, I don't think we're going to be able staff to attend to that, but Captain I will I'll follow up with Captain to kind of go over what that'll look like for Calam Mesa. So, um, our next steps here are, um, to have a discussion. Um, you have had a chance to review the budget details. So, we're, you know, staff is all here to answer your questions and um we will uh we will talk we will any changes that are asked for here or anything that comes up between now and budget adoption, we'll summarize those and so that you can see what's changed from today to that time. And so our anticipation is that we are going to present the budget for final adoption on June 1st. Um so before we we wrap up, I do want to thank a number of people. Um, first our accounting staff led by our our finance director Celeste. Um, Alana Figueroa who um does a lot of the she does a lot of the putting together the document um and a lot of some of the with you know helps with the personnel cost which is a which is a complicated task. So she does a lot with that. um all of our department heads. Um again, I really appreciate that everyone is practical and and um and just very reasonable in terms of their asks. They're they're looking at their needs, not versus their wants. They're not just throwing everything out there, seeing what sticks. We're being everyone's being very realistic in terms of their requests in the budget, and that's very much appreciated. our administrative team. Obviously, they put together our our budget books um with with a lot of care and so we appreciate them their help. And lastly, and certainly not least, our finance committee consisting of Mayor uh Cervantes and Mayor Pro Tim Manley. Um it was a great discussion. Um a lot of um good feedback out of that um

discussion and um so we appreciate you guys' efforts in in helping us out craft this budget. So with that um that will conclude my presentation. Again uh myself, staff were all here available to answer any questions you have. Thank you.

Thank you sir. Very thorough complete review. We appreciate that. And thanks again also to staff for your work on this. Uh a lot of materials to prepare, a lot of numbers to crunch. So thank you. Um, I'm going to open it up for any any questions from council at this point. Um, we'll start with uh, Council Member Mundiff and then just work our way around the table. Thank you, Mayor. Um, I don't specifically have any questions. Um, just more gratitude, I guess, to Celeste and and her team and and to our city manager for how they outline this and the background as far as how the taxes come to us and understanding that. and it's it's dumbed down in a way so we can understand it, you know, very well. And and I don't mean that, you know, disingenuously to you. It's just it's it's nice to have it that way so we can get it. Um but I appreciate that. Um I did speak with Councilwoman U Molina and as she's sick and not able to be here this evening, um she did ask me to bring up a couple points that she had. Um not sure if this is where we will work some of those ideas in, but moving forward um she was hoping that there might be uh some discussion amongst the council for um some promoting of like local arts um and any kind of future sites um such as parks or things of that nature uh facilities where we can have these kind of events and where those revenues may come from. um not necessarily at this part particular time but that we keep that in the forefront of her mind. So I told her that I would share that. Um and the next thing that she asked about uh pertain to and I know this has been brought up a couple of times but travel expenses for the council as it pertains to different events that we can attend that would be beneficial to the city. So as collectively as the council we we have a very limited amount of

funding for that and that's fine. we do with what we can, but there are times where there are events, whether it's a Cal City's event or a sheriff's department event or something, you know, where there's information that uh, you know, we may be able to attend um, where we can gather information and bring that back to us and and we don't necessarily want to always deplete the funding that we have for those travel um, expenses. So, um, something else that, uh, is not just on her mind, but mine as well, uh, as not sure how the rest of the the council feels about that, but when we do evaluate that, the hope is that we would collectively look at that and be able to uh, as a whole approve those things uh, as they come up, right? So we don't just arbitrarily all run off and go spend a ton of money going to these different events, but as a whole decide, hey, um, you know, this council member or this mayor or this mayor pretend may be the best person suited to attend this event. And then we decide collectively, yes, that's the best way to do this. And then send that person and uh and allocate funding for that. Now they say that it does remind me that that was something we had talked about um some I've talked to some of you about having that discussion during budget time and so um it may be too quick. We I don't know if we could put the list together but we pretty much know the events that we attend every year, right? I mean think it's pretty consistent.

Y um you know we do have a light we were just talking about our staff meeting today. We do have a light agenda um for next Monday. I'm not sure if you know Darlene and I can work on this. We might be able to bring this back as soon as May 4th, but may need to wait till the 18th. Um, but we could bring that back for discussion as a separate item. Sure.

Um, I think that would be a good idea. And then maybe we can just, you know, even talk about setting a a calendar for the year saying, "Okay, here's the here are the events we anticipate to attend." And um, you know, if you guys want to talk about amongst yourselves about who we want to designate to go to those events ahead of time. And that way we can set a budget and everyone kind of knows and everyone kind of has an idea of where where everyone's going. And um you know it it it makes it a lot more predictable for us in terms of um costs and things like that cuz right now you know we have an allocation for each of you and some of you use it all and some of you some of you doesn't use it at all and you have to like move we're we're borrowing money from one to the other and it's kind of a it's kind of you know it's kind of gets convoluted a little bit, right? Um, so maybe there's an opportunity to do that. I don't know if that's what the council would maybe want to entertain, but we could certainly bring that back for further discussion.

Absolutely. Sounds good. That's all I have. Thank you. Thank you. Yeah, that's a great idea. Anyone opposed to that? I think that's a fantastic idea. Add the calendar and um council member um expenses to the next agenda. Yeah. Is that something that we'd still work in into the budget? say I was just thinking for simplicity

if there was say we made an adjustment to that like a small increase to that across the board because we do you know share share those funds if it was just if there was a small increase for each person I mean you know larger pot and then ideally we should should be able to cover stuff without trying to make a complicated calendar for the entire year you know I mean it probably hasn't been increased for quite some time I would imagine I don't think it has no right

well I I like the idea of the calendar just for the simple reason that we can know that we're going to have somebody attending that. Now, whether that individual can't make it or not, we can still figure out somebody else. So, if there's an event, for instance, Cal City's event at um you know, is a policy issue, then I'm going to do everything I can to be there, right? Because that's the committee I'm on. But if it's a different thing like the end of the city, end of the year Cal's event, and uh we say, "Okay, we're going to allocate two of us to go and maybe yourself and the mayor are going to do that." and then you can't do it, then okay, now we know we can fill it in with somebody else, but we've already allocated the funding for it, so they budgeted for it. I like that idea. I like that idea, too. But I think I'm jumping ahead. I think probably we need to wait until our next

Yeah. Yeah. That's I think that's something options we can bring back, right? Do we want to do it on a per person basis or I I think that was probably of an era because everybody wanted to go to everything and it's like, okay, well, we can't do that. So, you have to you you're given a budget individually, right? I think we don't really have that as much this year. You know, there's there's varied levels of participation both because of desire and also because of time, right? I mean, not everyone has time to go every to go over everything. We have three of you that work full-time, right, in addition to this. So, um I think that, you know, we do know the big events that we can go to and does again, we can estimate the cost of attending each of those. And so, rather than doing it by per person, we can just do it by event. are going to spend X number for this event, Y for this event, and these are the ones that we plan on attending and and then you guys can designate who those people are going to go. And like you said, you could always we could always make an adjustment for that. But um yeah, or you could even just say two people will attend this and one person will attend this and however we want to do it. There's some some cities, you know, all five go to certain events. You know, I'm not saying we do that here, but you know that if that's what the council wanted, we could certainly do that.

Spirit of it, I think, to try to utilize the funding that we have most appropriately so that we're not just arbitrarily all of us running to one event that it's not necessarily needed. You know, we need to be fiscally sound as well um with these dollars. And I think that's the spirit of the conversation that we need to have on that.

Yeah. So, what we could do is we can look at we can look back at the events that have been attended and the major ones that we you haven't necessarily attended every year, but we can just give you a menu of okay, here's the events, here's the cost to attend those events based on where they're at. And that way you'll know the costs and then you can kind of just add all those up. Maybe because one's up in Northern California, only one person goes, but if it's in Southern California, it's local, then two can go or even three can go because all you have to do is pay a registration, that kind of thing. We can bring all that back for you and then at least you'll have all those dollar amounts and we have the total amount that we still budget for a total amount

for council travel, you know, in the aggregate and then you guys can have all that information and then we can kind of pick and choose how many who go, you know, how many go to which event, which ones we want to do, which ones we don't want to do. We can decide all that stuff. At least you'll have the information to make those decisions.

I got some some input on that. Um I like the idea of increasing the the funds for um for all of us. It's I kind of understand like selecting you know based on more experience and stuff but um just thinking more in the future you know some of us will have less experience like myself I have less experience because I'm a newly elected council member compared to my other colleagues they have been doing it for years even with uh planning commissions and stuff and I don't but um I kind of see like the pros and cons behind it because if the majority will say well um so and so doesn't have experience for example Garcia doesn't have experience for that um meeting or that conference I won't be able to go um those conferences are built for educational reasons because that's where you go to learn and kind of learn the policies and network with other uh city members or uh whoever's out there. So I see the pros and cons behind it even if it's not me but the but whoever's come whoever comes in as well too. We have to kind of treat ourselves equally across the line instead of just selecting the ones with the most experience. Um so that's one of the biggest things that I will definitely push push back if if if um if we go based on the ones with the most experience. Same thing with elected officials with this with the counties and stuff too. um uh um for the newly elected one from last last year and this year as well too, you know, and I'm not saying I'm going to be attending to all of them because of course I have little ones, too. So, I'm very selective of where I'm going to be going and if it's far, I won't be able to go. Um I've been very uh transparent with that. But I think we should probably keep it um the same all the way across for all council members.

Yeah. And again, that's that that's that's definitely up to the the the prerogative the council as a whole and how what you decide. What staff can just do is we can kind of bring, you know, the framework we have today. We can talk about the we can bring, you know, a menu, like I said, of all the events that we normally attend. Um, if there's any out there that we haven't attended that you have interest in that you would want to send to me for us to put on that list just so we can give an estimated cost. Again, it's just about setting, okay, and again, we don't have to. The council doesn't have to set who's going to attend what for the entire year right now. We don't have to do that. You could, but you don't have to. Well, all we're saying is, okay, we're going to attend these events. This is many people are going to we we anticipate this many people will go. Here's the cost. And so, does is it in the budget number that we have? Is it need to be more? However, or if we just want to just increase uh the amount per per, you know, per person across the board, certainly that can be an option, too. So, it's just more of a a form for the council as a whole. We'll put it in the agenda. It'll be a very open um conversation and then we'll just uh ask council or staff will just ask for direction and we'll adjust the budget accordingly.

So, one last question on that topic. So, when we bring it back for for next week, we'll have time to make adjustments before we

Yes. Yeah. I like I said, I'm not sure if I'll be able to bring it back next week or if I have to wait till two weeks because our agenda deadline's upon us already. So, trying to do some of that research in terms of the costs of those what those events are and also giving time for council members if they if there's one's like, hey, there's this other one that, you know, we haven't really attended it before, but it might be beneficial to us for it to consider. That way it allows allows us to a little time to um anticipate that. But even if we were to do the May 18th, all it really ends up being is just adjusting one line item in the budget is really what it comes down to, right? I mean, that's all it really is. And so we could make that we could make that change. Celeste just would need to know, okay, don't print the budget books until that conversation takes place. That's the only thing that that'd be the biggest thing. So, but we're only talking about one line item in the budget when it comes down to it. Didn't uh overpromise free,

right? Good, good feedback on that. Um, Council Member Garcia, any other additional comments about the budget?

Actually, uh, I want to give a big shout out for Kelly. I did saw the GIS uh timeline story. Uh we put a lot of work on it because I created one myself. So I like how um everything was just very straightforward and just catches your eye. And then the people that actually know how to use it, you know, I was playing around with it. So I was like, "Oh, this is nice." Um, and I am happy that the team is going to start growing because I know um a strong team is is strong, but you know, it's time to get bigger and now with the new city hall, you know, uh, but besides that, you guys have been doing a great job and I'm amazed as well too based on all the hard work that you guys put into into today's budget. I know it's been uh months and it's it's a lot of work. So, thank you guys for that.

Thank you, council member. Mayor Pro Tim.

Thank you, Mayor. I said a couple couple quick questions. Uh the first uh I guess probably maybe for Will uh for the maintenance worker. I'm just looking at the the new positions just I know you gave it just a little more in-depth uh explanation of it, but maybe for for the public and for the rest of the council for for that first maintenance worker, can maybe explain kind of your vision for how how they're going to work and operate and the the need for for the added personnel at this time. So, I think in an ideal world, um, first of all, I think we probably and I think our our our goal, you know, is we're going to try to maybe add one more additional, um, you know, maybe in the following year. I think ultimately where we want to end up is having two teams of three. So, we have our superintendent now and then we have two, we'd have two leads, maintenance worker two and maintenance worker one on each team. and that will allow us to expand our hours. But really, it's just a matter right now that the position is about um just adding capacity um and and trying to maybe allow our superintendent not to have to do so much work in the field because he does do a lot right now. you probably still will have to do quite a bit, but um again, it's just another body to be able to respond to more things um around the city um you know, with additional park responsibilities now with the um with Mountain View Park, the expansion there, and also, you know, trying to make sure that we can transfer some of that uh some of their maintenance responsibilities from Summerwood Park back onto city staff as well because um we do have a contract currently with Bulma Cherry Valley, but um I believe they're looking to exit out of that because of staffing capacity that they have. So, uh we will need additional capacity for that. So, that's a big part of that as well. Marty, I don't know if you wanted to add anything additional to that because um you know, you have you know that you're very familiar with

those operations.

Yeah, I think um historically we've been very reactive when it comes to public works and any um you know, maintenance issues that are out around town. Um, and for the past few years, we've been able to get a little bit more uh proactive and be able to, you know, do striping programs, you know, do sidewalk inspections and stuff, but there's still some things that we can improve on and be a little bit more proactive with. And I think this will just help with um us being able to tackle that. And I mean, we do have a new park that just came online. We just spawned the Bank of America building which is another uh maintenance uh or sorry facility that we have to do maintenance on. And then um our uh Summerwind and Singleton Heights, you know, those streets are not going to be new anymore. So, you know, we're going to see a lot more maintenance over there as well. So,

all right. Thank you. Yeah, I appreciate the explanation. And then I just just uh on the associate planner, I can recall um those those costs when we were contracting that workout. I was trying to get a better understanding of what some of those costs we would we would we would save on and what that would look like.

So from my perspective, I think the costs are going to be relatively similar, but what we're going to get is a lot more hours. So, we're currently paying about the same amount, and correct me if I'm wrong on that, but I think it's about the same amount for two days a week part-time versus having an entire full-time position dedicated to not only extended counter hours um in the community development building. Okay. not only just um extended hours, but also being able to sorry over here um being able to focus my time really on other items. I know Will and I are both interested in expanding economic development opportunities in the city um and working on you know some of our large master plan communities while being able to maintain a high level of service for some of the smaller projects. Currently, our senior planner does a phenomenal job. Um, but she does have to kind of man and staff the department on her own when I'm, you know, in um, meetings or doing, you know, other tasks. So, it'll just create a situation where we can provide a better level of service to the community.

Thank you, I appreciate it. That's all I have. Mayor,

great questions. you I think you took most of mine, but I'm going to jump in anyway and ask a couple more questions, follow-up questions about the maintenance worker and um and also the associate planner position. So, the maintenance worker um position one or position two. So, we have here approximate uh at least 75,000 budgeted for this position. Is that uh amount for is that the average between the two whether we hired a one or a two? We're we're budgeting as a two. Um because but we're we're we're leaving flexibility in the recruitment for a one or a two. Again, um as I stated before, um

there are pros and cons with going with a one or going with a two, right? So, um with a with a two, you do bring in some inherent experience. They might be able to hit the ground running a little bit more if you get the right fit. Um, but again, I think that especially with a small team like ours, really it's about fit and our guys don't mind if someone maybe doesn't know everything. They don't mind training and helping out a new a new person that's maybe new to the game, so to speak. Um, and then um but then the the but the initiative that would actually create some budgetary savings because you're you're staffing it as a one. But there that does that does build in some capacity then to have promote somebody to a two whether it's that new person or maybe one of our existing employees you know depending on who you know is is showing that ability to go into a two. Um so it does give us that flexibility there. But as far as the budgetary number it's for a two.

It's for a two. And what would a maintenance worker one what would be the cost for that? It's a I think it's about a 10% difference. I think I can't remember what the differential between the one and the two is. It might be it might be 10 or 15. I'm not sure what the difference is. Okay. I can't I can't recall at the top of my head. And what sort of expertise does a two have over a one or is it just just raw experience that

it's usually it's usually years of experience, maybe some certifications, things like that. But I I know looking at the the job descriptions, typically it just is experience. So it's entry level versus journey journeyman, which means that they do have some municipal um public works experience. and Martia a a one or a two you think could serve the needs that you have or do you have a slight preference for? I think I agree with Will. You know, it gives us some flexibility as well for when we do want to um you know, create that additional lead position. You know, uh having a maintenance worker, hiring a maintenance worker, too. Maybe we could, you know, have a little bit more options for when we want to promote to that. Or I mean, we could always hire outside, but I know we do like to um be able to promote our staff within. So, it does give us a little bit more flexibility with that as well. Um, I mean, not saying that a maintenance worker one wouldn't be able to get there by that time, but yeah, I think it's just kind of leaves it open for us to decide and maybe we get a better applicant pool for the maintenance worker two than we do the maintenance worker one,

right? And so, we go with that or the other way around. And is that the idea just to throw throw out the job applica applications, see what who responds to the applications and then hire accordingly? Exactly. That's right. Okay. And I'd like to clarify that Will was correct is approximately a 15% increase between maintenance worker one and two. Oh, okay. The salary pretty significant. Okay. Thank you for that. Appreciate it. And then I think Kelly, you might have answered my questions about the associate planner, but maybe you can just um speak a little bit more about kind of the the workload you've been under and maybe the backlog we've been seeing in our planning department and how this position is going to really really help maybe that that process.

Sure. Provide example or something of that.

So I think the council knows we have thousands of residential units going through the entitlement or reentitlement process. um significant square footage of industrial land uses being proposed as as well as commercial. Um we have new school sites and future phases proposed and whatnot. And for the larger and more complicated specific plan projects, there's also a level of negotiation that happens right with um the development agreements and that can take as we found several months to get through those processes. Um, I've also recently, um, as you alluded to, um, at the beginning of the the meeting with the new title, I've taken on building and safety and code enforcement. And so my time is now also stretched pretty significantly with having two additional departments underneath me, needing to manage um, personnel, counter coverage um, and issues that come come along with code enforcement and whatnot. Um, and so having another person in the department will help me funnel some of my workload because I still work on active projects. In some cities, directors aren't working uh on the project basis. They're really kind of higher level. They do long range or advanced planning, which I do, but I also do current planning. So, I'm project manager on on quite a few projects. So, I'd be able to funnel some of the uh current planning over to our senior planner who could then funnel uh counter questions, ADUs, patio covers, temporary events, all of those things could be then funneled to the associate planner. So, it would kind of trickle down um and allow my workload to lighten and therefore um just allow a better distribution of of the workloads within the department.

Yeah. And and I also want to say too, I mean, I think this really came into focus when uh when Kelly was out um because of the the the amount of staffing we have and having had to try to count on NBI to step up. And again, it's no knock on them. It's it's just hard. I mean, it's hard for a contract planner. They're not going to be able to give you the same service as somebody that's in house in in terms of of working knowledge of what's going on because our employee is only doing our stuff, whereas we're sharing that resource with with MVI with a number of different clients, right? And so, they're just not going to be able they may have more planning expertise maybe initially, but they're not going to they're going to lose out on the Calama experience that we'd only get with a full-time employee. And the other the other thing Kelly mentioned is something that I've really wanted to emphasize longer term and that is having a have having the ability to focus more on advanced planning because we are so focused on current planning because it's all we can do um that we don't have the capacity to focus on advanced planning as we as much as we do. So advanced planning are things like your general plan updates, your your housing element, that kind of thing, things that we have to do. Um, but we haven't done a general plan a general plan update since 2014, right? A a comprehensive general plan update. So, we're overdue for that. The the the standard is 10 years. Now, granted, most cities don't do 10 years, but you know, we're we're pushing 15, right? And maybe getting close to 20. And so, um, but by the time we actually get there, it probably will be closer to 20. Um, and so I I've wanted to be able to to have Kelly have the ability to do that. And this addition to this this position is a step in that direction. It's not the only step we need to take, but it is a step in that direction. And, you know, event again eventually long-term goal for all of our department

heads are to be troop department heads. Um, I think there's never going to be I don't know. There's really no a place that's effective um and that's efficient that the directors have just no uh they're not working managers so to speak 100%. But here we are um a lot um and I think eventually our goal is to long-term goal is to get away from that. Um that that'll take time um but it's incremental steps like this that allow us to get there um you know over time. Thank you for that. That makes a lot of sense. So, assuming this position gets approved, the timeline would be um after the

after the fiscal year starts. So, um you know, we could start recruiting as soon as the budget adoption. So, we know that the position is formally um approved so that at least um we get it to you know, it probably won't be July one. Um, but we could prepare to get the job flown and then there's, you know, a recruitment time and then, you know, calling for interviews, doing first interviews, second interviews, onboarding, all that stuff. So, they're not going to be able to start July 1, but we do plan on typically when we get new positions approved. We do get to work on the recruitment prior to July 1. It's not like we're just starting July 1 at that process. We're starting usually a little before that.

Yeah. Okay. Well, thank you for that. Any other follow-up questions from council? Anything else? Okay.

I just want to piggy back on that with uh Kelly because you know I I've been there a few times uh with your team and it's hard when they leave and then you have to retrain again and then it's just constantly um they turn over and then it takes time away because you have you got to train that person to build them up and then they leave. So, it's a good investment having um that person there because you're going to build that person up and then now they're going to be consistent there daily and then now you're able to depend and rely on that person. Um and and then they're going to know the KESA way and they're going to know all the codes, all the policies and everything. and they'll be able it's a big support and I agree with uh money too with uh you know um promoting within you know it's always you got to you know you got to uh promote within and then um and then if anything just you know hire from the outside so yeah just just wanted to kind of include that as well too. Okay. Well, that uh did we need a there's no um resolution or anything?

Yeah, this is just receive and file. So, um we got our direction based on our feedback. So, the main the main takeaway um is looking at the the council travel budget and bringing that back for further discussion. I think that's the only action item that I can recall. Other than that, looks like we're in pretty good shape. So, okay. All right. With that, we are going to adjourn this meeting at 6:40 to our next regular city council meeting on May 4th. Whiskey.