City Council - Special Meeting

It worked. Good afternoon everyone. Today is Tuesday, March 24th, 2026, and I'd like to call this special meeting of the Carmel by the Sea City Council to order at 4:01 p.m. City Clerk, could you please call the role? Sure. Council member Baron here, Council Member Berter here, Council Member Drama here, Mayor Prom Delves here. Mayor Burn here. All are present.

Thank you very much. This meeting will be held in person and by Zoom if you wish to make a public comment online or you can watch it on the city's YouTube page which allows for a for pausing and that's convenient sometimes when you're at home. Um you can also watch it anytime after the meeting. However, the meeting will proceed as normal even if there are technical difficulties accessing the meeting online. Uh the city will do its best to resolve any technical issues as quickly as possible. Nova, could you please read the public comment guidelines for special meetings? Sure.

During special city council meetings, public comments are permitted on items listed on the agenda. After each item on the agenda is introduced, the mayor will invite public comment on that item. Each speaker has three minutes to speak unless otherwise adjusted by the mayor. While stating your name is optional, it helps identify speakers in the meeting minutes. Remote or in-person participants who do not comply with the requirements of the Brown Act will be muted.

Thank you. We will be taking a short recess for dinner around 6:30 if needed. I keep saying if needed, but I haven't had that happen yet, so we're probably going to take a break at 6:30. Um, we had an extraordinary business place taker on there just in case there was nothing that popped up. Okay, good. So, we don't have to do that. Uh we'll move now into orders of business. These are items that will include presentations, council questions, public comment, and council discussions before any direction or action is taken. Our goal tonight is to review our audit for last year's financials and to hold the opening round in the process to create our budget and capital improvement process for the next fiscal year and also looking out a few years. It's about aligning what we want to do with what we can afford and to have a discussion about our future financial situation. So, we may cover the most critical items on our agenda tonight sooner. I would suggest and ask the council if they would be okay if we rearrange the items to move item two, council strategic priorities to the last item. Is this acceptable, council? Everybody okay with it? It was suggested by a council member. So, we have at least two votes. All right. Great. We're going to do that. Nova, if you could take note of that and keep us on track. Thank you. All right. Let's begin with item one, resolution 202622, receiving the annual comprehensive financial report or ACTUER as they call it around here for the fiscal year ending June 30th, 2025. I'll turn it over to staff to make the presentation. Is that you Jamie?

I'll I'll I'll give a quick introduction. Um that is an audit. Basically, we take our financial microphone The acter is our financial results for the last fiscal year audited. And so what we have here tonight is actually the auditor and the audit firm that provided that service to present those numbers to you and be able to answer your questions so you can have that independent voice to reach out to. They're a great firm. We've used them for a number of years. We had a new partner because they rotate those around. Um and are we ready? All right, here you go. Thank you,

Daniel. Can you show the zoom screen on the projector and the dis, please?

Are we all set? Yes. Go ahead.

All right. Perfect. Thank you. Good evening, council members. appreciate you letting me attend via Zoom. So, I'll try to keep it short because I know you have a lot to discuss tonight. I do want to mention that the the standards that we follow during the audit and of course a little bit on the audit process. I'm going to talk a little bit about the statement and position because you only get to hear about that once a year from the auditor and a little bit about fund balance and pensions and then we'll leave it leave it with the audit results which are the most important part. The audit process is a fourphase audit process which includes audit planning, preparation during our interim fieldwork which also includes testing of controls, documentation of controls and overall understanding the city and how it works so that we can assess risk not only inherently inherent risk over different accounts but also control risk over those significant transaction classes. Phase two is the audit execution, which is essentially when we test your ending balances. So, long-term debt, capital assets, cash and investments, receivables, revenue, accounts payable, expense, expenditures, and expenses, which believe it or not are two different things. We also have phase three, which is what we're doing tonight, which is the audit reporting, and phase four. Uh phase three and phase four essentially work hand inand together. So as we move through and present in reports to management they provide feedback and we have followup and and again at the city council meeting you might have questions that require follow-up. We also uh prepare well actually let me say this differently those phases are provided to us by you like that generally accepted auditing standards. So the standards we follow in audit we follow generally accepted auditing standards in the United States of America. We also follow generally accepted governmental auditing standards. The main difference between the two really has to do with compliance and reporting on compliance and the requirement to report

uh internal controls on internal controls. And one thing to note is that we do not issue an opinion on internal controls. We did not issue an opinion on compliance specifically, but we did test compliance in general. And so that's notated in our independent auditor's report on general except governmental auditing standards. Both of those both of those standards have an explicit requirement and the overall objective is to express an opinion on the financial statements and the financial statements themselves include multiple opinion units. So when you're looking at the ACT firm, it can be very complicated and difficult to understand because you have two different sets of financial statements included in one. There's sometimes three or four different sets included in one, but in this particular case, you're lucky enough to only have two, right? So, that's terrific. So, what those two are is your governmental fund financial statements and your governmentwide financial statements. You're lucky enough at the city of Carmel Vide to have internal service funds as well. So those internal service funds roll up into your governmental activities and they're included in the governmentwide financial statements, but we do have a separate set of statements included just for those internal service funds in the proprietary fund section of the ACA. So if you're not confused enough yet, let me know. We can get into more detail, but I won't do that to you. What I will say is that we provide our opinion right on these multiple different financial statements and opinion units with a reasonable assurance but not absolute. Again, we perform the audit provide using a riskbased methodology as required by the standards. Materiality is a concept that comes into play under these under that methodology and following those standards and it's both a qualitative and quantitative assessment of materiality based on our risk assessment. And of course, I mentioned previously that we document

and test controls as needed to assess risk. Now, with that being said, a couple things to say about the governmentwide financial statements. And again, keep in mind that the governmentwide financial statements are your fund statements converted to include capital assets, long-term debt, long-term liabilities in general, such as your net pension liabilities, total oil liability, claims payable, and compensated absences. So things that you would not normally see in your fund statements. So as of June 30, 2025, just a little financial information, your total net position for the city of Carmel by the sea was 55.6 million versus 2024 where it was 49.6 million. So a $6 million increase from 25 uh from 24 to fiscal year 25. Most of that was included in net investment in capital assets. So it's longterm, right? long-term infrastructure uh which was 36.65 million as of June 30, 2025. Some of that was restricted restricted net position. Keep in mind net position is equity, right? If you're thinking from a commercial standpoint, if you're more involved in public companies or you have been, um net position is really equity. Uh so your restricted net position was 2.4 million as of June 30, 2025 versus 4.6 million June 3024. and the unrestricted net position. And as an auditor, this is where we one of the components we look at when determining financial health and whether or not you have a risk to your growing concern. And so your unrestricted net position as of June 30, 2025 was a nice healthy positive $16.56 million. That's where most of the increase was. You had a $6.5 million increase from 24 to 25 in your unrestricted net position, but good healthy net position. A lot of local governments and a lot of cities in the state of California have a deficit unrestricted net position because of pensions right Kalpers.

The other information I wanted to share share with you would be the funds uh your fund balance. So in your general fund actually had a nice healthy fund balance of $37.5 million as of June 30, 2025. that was up from 20.3 million as of June 30, 2024. And most of that increase is from transfers in. So there's large transfers from the measure C sales tax fund. The revenues did increase by 2.7 million in the general fund. Uh expenditures went up by 1.97 million, but most of that fund balance increase came from those transfers in from the measure C sales tax and some of that from capital projects funds. Um, and with that too, I will say that you met your your reserve fund balance which was required to be at 4675 million at June 3025. So the assigned operational reserve fund balance was 15.997 million at June 30, 2025. So looking back on this history lesson, fund balance looked really good. I'm very happy to report that. And then one last comment will be related to the pension liabilities. And the pension liabilities for the last 3 years have been fairly consistent for most local governments, especially in the CalPERS plan. And for the city of Carmel by the Sea, it's pretty much been the same. And let me pull that up. Lost my page on that. One second. So what we're looking at as of June 30, 2025, the net pion liability for the city was 29.6 million, a slight increase from 2024 where it was 29.2 million. And the great thing about the Acer is it provides you with a lot of detailed information on the net pension liabilities going back to 2016. So you have a 10-year history on these liabilities.

The one outlier, if you want to go back and look at that schedule in the acer, it's the schedule of proportionate share of net pension liability. The one outlier is that in fiscal year 2022, the net pension liability for the city was 15.96 million, so about 16 million. So you can see it's gone up quite a bit since then, but don't be deterred by that because that was the outlying year. The year before that, it was 24.4 million. So there was something going on in the assumptions where the investment returns far exceeded the estimated actuarial investment returns that caused that 22 fiscal year pension liability to drop. So, with that being said, I'll give you the audit results and I will say they're good because we issued an unmodified opinion on the financial statements which means that we did not find any material misstatements or we believe that the presented financial statements are free of material misstatement. We did not have any material weaknesses to report and as such we did not have any disagreements with management and there were not any significant passed on adjustments and the adjustments themselves that we did propose were not significant or material and typically expected during an audit. Uh finally I'll say there were not any significant control deficiencies that were required to be reported. So, I kept it as short as I could for an after presentation. With that, I will leave it open to any questions that you might have.

Thank you, Sheldon. Any questions from the council?

I'm seeing none. So, we'll take it to the public. Are there any public comments, questions?

Hello, Tim. Hey, good afternoon, mayor, council members. Tim Tumi here, resident. This is great. This is I I should have been reading this all, you know, the last couple of years, but all the comparisons are just really phenomenal and um fantastic job to finance and the team. There were a couple of things that I noticed on here that had some questions, but I can't seem to call it up on the document right now. One was a comparison um of it was in the demographics and economic um section and I it talked about um the change in unemployment rate in in Carmel and it went from it had always been like about one one and a half less than two and now it was up by 3%. So I'm wondering what that might just kind of a curiosity thing you know what what that might be attributed to. Um, but that was um that was amazing slide and uh so I just really appreciate it. Just want to say thanks to everybody. There's a lot of good information in there and it's it's very, you know, public facing and easy to understand. So, thanks.

Thank you. Anyone else here? Seeing none. It looks like there's somebody online. Yeah. Um John on Zoom. Go ahead. John, we're ready for you if you could unmute yourself. We can't hear you, John, if you're trying. All right, we'll keep our eyes on him and come back to him if we need to. Uh there's no other hands raised.

Okay, let's bring it back for discussion. I think you had something to say, Bob.

I I surprisingly I don't have a lot to say. Um, you know, a year ago, I think we spent almost an hour and a half on this topic. I I think that was driven heavily by the three of us on this side having never been through a an act for audit report before and trying to understand it, trying to understand what a change in net position really is and what it tells us. Um, and I think we had some good explanations at the time. So, I' I've come to uh understand this document far better than I did a year ago. Um Tim, I agree with you. I I think it's a really good document. Um as I said last year, I I don't necessarily view it as a management document as much as a you know historical artifact. Um but a but a very good one. And if if and if the the the source of information of historical information not just from one ACT for but going back as long as you have them can be really helpful. Um because it really it it it just captures history uh very well and it it has a lot of data um you know it talks about what our debt is. It talks about what it you know what it's been. That's one of the items I I I will pull out of this in a little bit, but I think it's more relevant for our budgeting conversation than uh than anything right now. So, um I have no questions um for you, sir, uh or for staff on the acter and I I thought it was a great report and I'm ready I would be supportive of accepting it. Thank you.

All right. I'll just briefly add and support the comments that have been made so far and I certainly um agree with Tim that actually some of the information like if you really spend the time to go through it there's a lot of little nuggets in the end that are very interesting there's also information on the largest employers in the city and number of employees they have things that you may not have necessarily known that if you do go through there just little things you can pick up and it is a good historical document um as well and I do support it. Thank you, Jeff Hans.

Yeah, I just echo those comments. Um, you know, no news is good news on this type of uh on this type of item. Uh, and yes, the the end in particular, the statistical section is a is a great place to mine. I will highlight one of my favorite statistics. That might not be the right way to put it, but our median age went from 53 in 2016 to 69 in 2025. So, found that very depressing, especially for those that are a little older than you. I was going to say, Hans, I I get young I get younger every year, my friend. So,

all right. Um, did John ever unmute himself? Um, he raised his hand again. Let me try again. John on Zoom, go ahead. Looks like he unmuted himself then. He didn't talk. There you go, John. You're good. Talk. All right, we're patient, but I think we need to move on. Okay. Oh, was that you, John? Issue. All right, I can hear you.

It sounds like you're on a bad cell cell call.

Yeah, John, you're breaking up terribly, so we can't really understand you. I'm afraid we're going to have to move on. If you get to better place, raise your hand again and we'll give you a chance. All right. Um, I just like to say I I echo all the things that was great comments. Um, uh, Jamie, we really appreciate you and your team's incredible efforts as as usual. We've come to expect a pretty high level of excellence out of you and, uh, congratulations on receiving clean bill of health for the for us and the whole city. Good job. All right. I'm looking for a resolution uh a motion to approve resolution number 202622 receiving the annual comprehensive financial report ACFUER for the fiscal year ending June 30th 2025. I think I had one from Bob earlier.

I I'll make I will make that motion. Okay. Second. All right. Second from Hans. Roll call, please. Council member Baron. Yes. Council member Bter. Yes. Mayor Prom Delps. Yes. Council member Germa. Yes. Mayor Burn. Yes. Motion carries. All right. So, we're going to move to item number three, skipping two, which we move to the bottom. Uh, it's a 5-year financial forecast. And, uh, we're going to be giving direction to staff after this. There's no resolution. I think Jamie, are you going to do this? You want to kick it off? I'm going to do a little kickoff, mayor, if that's all right with you. I think that's a good thing.

All right. So, um, in pre, as in previous years, these are going to be combined presentations. So, you have a presentation on your five-year forecast and then we're going to transition right into our CIP presentation. So, just bear with us. It will be a long presentation, but I promise it's riveting and you're going to enjoy it and it's probably one of the most pres important presentations that we will all see throughout the entire year. Um, so I want to start by thanking all of our staff. You already did. You talked about what an incredible staff we have here. I also want to thank our financial stewardship work group made up of Mayor Prom Delves and council member Bter. Uh, they've been excellent to work with throughout this entire year. Um, so we are we're embarking on a series of budgetary discussions between now and April 6th to help us build that first draft of the budget which we come back to you uh within May. Today uh sort of wrap your head around the notion of expenses and on April 6th we're going to be talking more focused on revenues. Um I'm happy to say and excited to say that there's some new approaches you probably noticed this year uh to make our forecast and our budget more meaningful and transparent. Uh we've got details on how the forecasting was done. We've shown our work more. Uh there's new detail within the CIP including adding a tail so you can see when a project has first year cost of design what you're sort of committing yourself to in future years. Uh we've identified and incorporated for really the first time ever a deferred maintenance list. Um and I will I'll pause there for a note uh of apology. So in the staff report we have a rollup of the deferred maintenance list. we did put out on everyone's table today and it's out available for the public as well. This was meant to be included as an attachment, but this is a breakdown uh that basically expands that deferred maintenance list. You can see what all went into it. The numbers the same, the bottom number is the same, but uh that was an omission on our part. So, um but like I said, for the first time ever, we're including that deferred maintenance list that we've all been talking about as a highlighted item. It's called out specifically within the CIP. So some things that we think are really important and going to make the the conversation much more meaningful as

we go forward together. So for tonight, what's the framework? We are hopefully going to be introducing to you the concept of levers. Levers have been around for millions of years. It's how people started moving things. Um and what's important to us is recognizing that the council has a series of levers that they can push and pull on uh that allow you to control and affect our budget destiny. Uh there's three main levers in any budget really. It's operating expenditures, capital expenditures, and revenues. Those are oversimplified with with each in within each of those levers, there's multiple different nuances to how to do that. But for simplified terms, we function with three different levers here. So, tonight we're focused on expenses. Like I said, we'll come back April 6th with revenues. Uh we're here to discuss how we plan for the future. Step one is going to be Jaime's presentation. That's going to be the 5-year forecast, and that's going to go into helping you decide how and if you want to push and pull on levers. The 5-year forecast is our best forecasting tool at the moment in time. It's built largely on assumptions. We have facts that go into it, too. Our current model shows that we run out of fund balance in FY29 and 30. And so, we'll go into that. Why is that? Because expenses outpace revenue. We've talked about that a lot. If we continue down the road of a roughly $10 million CIP with the service levels and staffing where they're at and no new revenue, that's where we end up at based on our forecast right now. So, Jamie's going to go into that level of detail for you on the forecast. And after she's done wowing you with that, um, then Ken and Charie are going to come up and discuss that CIP lever. This is one of those expense levers. Um, again, this can something that can be pulled on and pushed on in order to control your overall budget. You're going to receive the 5-year CIP, but there's going to be more focus detail on next year's CIP because that's the one we'll actually bring back to you uh for approval. That's the one that gets enacted. Uh, so we're going to focus on next year. There's more detail like I talked about. You'll see for the first time ever in there that deferred maintenance is identified. We've got um D's next to deferred maintenance items that pull from this larger list that we're talking about. Interestingly,

deferred maintenance is about 80% of next year's CIP. Um I mentioned that we've passed out the the detail. Uh we've got roughly a 10 plus year catchup plan right now on a hund00 millionish CIP. So, these two discussions, Jaime's presentation and then Ken and Char's presentation are part of the process that's working towards us getting you your draft budget in May. Um, so what are you being asked to do tonight? You're asked to receive the financial forecast and which includes that deferred maintenance list. We want you to ask questions so you have a picture and an understanding. You feel comfortable with what the our future forecast looks like for where our financial health is going. We want you to provide feedback on the CIP list. Do we have the right projects? Are we spending the right amount? And we want any policy direction that could be used as we start crafting that draft budget. Thinking about those levers. What levers should we pull on? An example could be you currently have a policy that is effectively a lever saying 90% of your operating 90% of your revenues go towards operating expenses, 10% go towards CIP. That's an automatic. You guys set that lever in place. One of the things you could do is you could say, "Hey, you know, we know that we've got a deferred maintenance uh issue. Uh maybe we want to take a look at another option on top of that 9010. What is an 8515 budget look like? 85% for operating expenses, 15% for CIP. Those are the kinds of directions we'd appreciate tonight if you want us to bring you back something all working towards that goal of the May first draft of the budget so we can show you um if we're going to go down the road of affecting operating expenses or changing service levels the other direction we would need with that. Are there areas of service within the city? Um I'm not going to say any because I'll I'll scare anybody but you all know what the services we provide around the city are. Are there any areas you would want us to focus on that maybe there could be a way to find some savings? So then when we come back next month in April for the April 6th regular meeting, we're going to be having a similar conversation, but it's going to

be focused on revenues. We're going to be talking about those revenue levers. We're going to have a professional that's going to be coming and talking to you all about revenue options available to the city. You've already pulled on one of those levers a little bit talking about the toot revenue. So that is a lever. Um we have other ones available to us. We'll come back in May uh with your draft budget once we get all that input from you and be able to tell you what your draft budget looks like based on all these great policy inputs that you've given us between today and our April 6th meeting. Um so I've babbled on along enough. I just wanted to kind of set the intention of where we're going today. We're going to have two presentations and we want to get from you some some good policy direction and feedback on where we're headed with our draft budget this year. Jamie, please save me. Good afternoon, mayor and city council. First of all, I want to give a shout out to our accounting team and and Jane uh Hogan in particular. She curates those stats at the back. Table 16 is the one that you all were looking for. Uh she also gathers together all the many threads that it takes to make the budget and the forecast. Um oh, hold on. I kind of have it memorized, but just in case. Um, so the forecast we're looking at today, um, oh, do I have the slide? There it is. Thank you. Got it. The forecast we're looking at today is a tool to help us identify the trends and gaps in our fiscal plans, including their impact on fund balance. It provides a basis for discussion of the government's fis financial health over the next 5 years. It highlights challenges and informs our decision-making. The forecast considers what we know about current and projected economic conditions and for now assumes no changes about interest rates or inflation because we just don't have a clear picture. Um that being said, there are a number of factors that point

towards continuing slow revenue growth. Cities around the state are seeing decreased tax revenues, property tax revenues. Um throughout the county, we're seeing home pricing softening and construction slowing. Historic volatile volatile tourism based revenues uh have seen recent price inflation, but those inflated prices might not be sustainable. particularly in the area of transient occupancy tax. As the number of local available rooms fluctuates, our strongly appreciated prices may not hold up and new rooms are coming online outside of our city. At the same time, we are seeing inflationary pressures continuing to raise operating costs. Health insurance, material costs, and services are all increasing by CPI or more. The pension retirement system has scheduled strong increases to recover past poor performance in investments and it can come back and increase those even more if the the stock market doesn't go the right way. Uh partially offsetting these increases, the model the model for tonight assumes no cost of living increases. So this is kind of a flat to get that noise out of the way. Um other than the the ones that have been contracted for the police. And it's important to note that in past years, we used to put an undiscussed assumption in that forecast, but we left it out so we could really know where we're standing. Finally, the cost of deferred maintenance has grown as projects have been pushed off. Uh, and based on public input, a plan to address deferred maintenance has been created, but it's expensive. So, what are all the numbers? Let's kind of talk through um the information in the package presents both past numbers and projected future numbers. and let's break them down on the following slides. But first, understand the tool a little bit. The first set of lines is revenue. The forecast lists major types of revenue that the city collects. The big three

being property taxes, sales taxes, and transient occupancy taxes. And these are totaled on the revenue line. The next set of lines is operating expenditures. The major type of expenditures are salaries and benefits. the very largest thing we spend our money on uh as a city is staffed to provide a wide variety of services. It includes things like park and bathroom maintenance, filling potholes, reviewing plans, issuing permits, trimming trees in addition to keeping the lights on in the city council. Salaries and benefits is followed closely by services and supplies which largely cost can include or uh c um uh contractors, outside contractors. So again, we're doing a lot with our in-house. We're doing a lot of other services using contractors and they're expensive. That's that's what really most of operating cost is and it has a total on the general fund operating cost line. So then we the difference between revenues that the city collects and its cost of operations is described as revenues net of operating costs. Uh what's important about this is our fiscal policies say that revenues should always be more than operating costs and in our forecast they are. The third section capital expenditures. This is where all the monies are spent on the capital improvement plan and spent is the operative word here. They show up in our numbers when they're spent when the checks are written. It may be a project that's in process but not yet finished. That's when it shows up. Um After those three numbers, we have a surplus or a deficit. So, we had the revenues minus operating costs minus capital expenditures, surplus or deficit. The next thing that's important on this slide though is the available resources. At the end, we are measuring available resources. That's the portion of fund balance that's available to us to use

for operating expenses and capital expenditures. And what we see here, and we'll get into in more detail, is that that number is black for a while, but it turns red. But first, let's keep going on this this tool. Tonight, we talk about two different uh sets of numbers or sets of columns. Uh the first is our historic numbers. These are the amounts of actual revenues collected and expenditures made each year. The second is the forecast. It contains estimates of how we think the current year will end and then makes a forecast based on that ending point for the next 5 years to see what might unfold and the importance of of both of these now looking them side by side is to look at trends. So historic trend the majority of cities revenue sources are volatile as we've seen during past years of economic uncertainty and slowdowns are predicted. The revenue is shown as the red line above. Note, the red line tapers off due to the assumption that significant one-time grants that were recorded in other revenue sources won't be repeated. So, there's a little bit of a slowing on that revenue number. At the same time, trends in expenses are consistently increasing as shown by the blue line. Together, the gap between the revenues and expenses is narrowing a bit. We also see that capital outlay is significant and increasing in recent years causing total expenditures to exceed revenues and that's that orange line. So again operating expenses are less than revenue but when we put the capital projects in we're spending more than we made. Five-year forecast. The five-year forecast helps us to visualize a number of potential impacts to operations. revenue trends. The red line in consider things like flattening property taxes as sales of local homes slow down causing

greater reliance on transfer taxes to bolster revenues. Uh slowing sales and toot taxes as a tour industry is impacted by uncertainties. Decreases in other revenue as onetime grants and funding sources are not repeated. Note there are no new revenue sources considered in these forecasts. These are how things are now. Looking at what the experts we work with are saying about them. Uh expense trends, the blue line, increasing salary and benefit costs due to a minimum of current contract commitments and escalating health insurance. Significant increases to pension obligation expenditures as the defined benefit plans recover from markdowns and services and supplies will increase by a minimum of CPI. Added to this capital expenditures that exceed amounts available uh from the current revenues after expenses leaves us with a forecast of revenues net of operating costs that's showing a crossing trend. That's that orange line as total expenditure growth outpaces revenue forecasts leaving the city with potential deficits. So let's take a look at the measures of these. The council placed two key measures uh to guide the allocation of resources. The first measure says no more than 90% of the revenues in a year can be spent on operating costs including pension and debt service. The second measure says at least 10% of revenue should be spent on capital expenditures. According to these in the forecast we see that most of the years the minimum levels of expenditures forecast in this model operating expenditures forecast in this model do not exceed the 90%. We also see that the forecast uh exceeds the target but of at least 10% of revenue spent on capital expenditures. So great, they're both great. We're we're uh we're meeting both of the

requirements. The challenge is there was a lot of red on those slides. Uh the color red means that expenses are more than revenues. Revenues net of operating costs are black and generally within policy limits, but capital expenditures are more than revenue available to pay for them. And so I want to spend a little bit of time digging into exactly how available resources is calculated. Per the ACFER, we ended the 2425 fiscal year with $44 million in our fund balance, our governmental fund balance. But not all of that fund is available for us to use. 14,000 of that is held in prepaid assets and other things we can't spend. 6 million of that is restricted on how we can spend it, preserving it for debt, service, pension, the library. 15.9 million of that is assigned by the city council as a reserve for uncertainties given the city's volatile revenues. That leaves 4.7 million already reserved for approved but not finished capital projects and 17 million that's been accumulated as a net revenue but has not been restricted or assigned yet. That 4 million plus that 17 million ends up uh 21.7 million that's available for capital projects or other needs. That sounds great. But we do want to touch on deferred maintenance which is something that's been studied uh quite a bit lately. The numbers above are gathered from studies or appraisals done in for various reasons across the last few years. The cost estimates assume the work is done at current or recent costs, not future appreciated costs. The main reason these studies were done was to identify problems and priorities. It wasn't to calculate a perfect estimate, but it does serve to give us an idea of the magnitude of the work that there is

to be done. The current CAP plan, which we'll look at on the next on the agenda, does consider the actual current costs for addressing critical deferred maintenance needs, and those numbers are what's used in the five-year forecast. Um, and I believe you have a detail of what's in this number handed out. If somebody's online, they can ask us, and we'll email it for them. So what does that mean? Available fund balance. Using the forecast revenues, operating costs and CIP expenditures, the available fund balance per the last audit, we then update for the end of this fiscal year and we say that's our starting spot. So our starting spot is 18.6 million. If we employ these are the same numbers you saw in the previous slide, but if we employ the capital projects plan the way it's currently outlined, we will run out of our fund balance in three forecast fiscal years. And that's why we do a forecast to understand trends. So the forecast we've been discussing tonight is not the budget and the future years are not perfect, but it does give us some insights. First, we consider the gap. In this rough forecast, we see that there's a potential gap between revenue sources and expenditure needs over the next 5 years. Then we consider mitigating strategies. What could we have as far as potential budget options? Um expenditure reduction including potential cost cutting by service reductions, personnel reductions, efficiency improvements. Another lever that we have to pull is capital project reductions, including prioritizing deferred maintenance and other capital needs. Another lever is revenue enhancement. And the point is long-term financial planning. That's what we're trying to do tonight. As we work on these numbers, we do need to consider that there's also some risk. Um, we need to understand that that this forecast is just a

forecast based on what we know. were also uh potentially impacted by economic downturns, natural disasters or changes in the state uh of federal funding. So those are the unknowns that we have not quantified. Um lastly, we're looking for policy recommendations and community input. We need to consider the recommendations to address challenges and identify those and make our long-term health um sustainable. So budget options basically what I kind of ran over fast was there's three budget options or levers that we are have talked about here. Uh we can pull any one of those to change the course of this forecast. CIP strategies look at our assumptions and plans for capital projects. Services and service levels discuss potential cost cutting measures including service reductions and eliminations. revenues, exploring strategies to increase revenues such as tax rate adjustments or new revenue sources. We need to pull together the 2627 budget right now and we'll be looking for your direction as we pull that together. So, let's dig a little bit onto these three levers. CIP budget option lever. First of all, this is the biggest. What projects could we prioritize or even consider at all? How should we consider our total needs against the limited resources we currently have? Will we keep these CIP questions in mind as we go to the next agenda item we want? Number two, the second lever we can pull is changes to operating expenses. Operating expenditures of the city are centered around the delivery of services. Whether it's pulling weeds in the park, trimming trees, patching roads and sidewalks, reviewing plans, issuing permits, putting out fires, or catching bad guys, trimming operating expenditures means that we need to look at the services

being provided and at the levels of service. As a city has grown, so too has its staff. And that is because it's taken on an ever growing list of functions and services. The city certainly did not do mail delivery and ambulance services when it started in 1916. The council needs to give direction about what services are are important, what services are less important. The third lever is revenues. The city has strong revenue sources, but its costs have risen faster than those revenues have. The council must give direction about ways to increase revenues, but note that no revenue increase can be instantaneous. At the same time, the city cannot put off developing new sources because they're not instantaneous. And again, right now, the model doesn't make any assumptions about changes or new revenue sources. A discussion of new revenue sources is on the council's next meeting agenda. Conclusion summary of key findings for us to consider is that the forecast shows us volatile revenue sources and steadily rising operating costs are a challenge. The deferred maintenance and resulting high CIP costs are a challenge. The forecast also highlights that we need to make decisions about the three levers we can pull to address these challenges. Capital projects not completed in prior years have left available resources that could be used for new projects. Future capital projects could be prioritized. The city is reviewing operations as a part of the budget process. The city's analyzing revenue will help us to understand better what the next step might be as we discuss it at the next meeting. Our next steps, we're going to have more public hearings, the budget adoption and ongoing monitoring. Basically, tonight we're looking at the forecast and the CIP and we're discussing the projects on the list. Then staff will go back and

review the council's revenue and expense ideas and projections and project and project ideas in more detail as we start to put together the 2627 budget. The draft of the CFP projects and revenue ideas is coming back in April. Then the draft of the citywide budget is coming back in May. And I'd just like to emphasize or reiterate the importance of accounting and transparency in in the governance financial management. So these meetings and everybody that's out there and everybody that's going to hear about it later are key to us making good decisions. That's it for the forecast. Do we want to stop for questions or I think maybe

I think with council's approval I think we should just go straight into the CIP because they are not unrelated from each other. I I have some questions that I'd really like to ask about this before we move on to the CIP if that's all right. I'm okay with that, Jeff.

Yeah, I have a number of questions. Um I'll just go uh from the beginning uh on page five. Uh any one of these pages will do. Um yeah, this that one's fine. So I struggled with uh the derivation of the numbers at the bottom of the page and so I got out my trusty calculator and I think I was able to generate. So I'm going to look at the I'll just look at the the second column the fiscal year 2627 projection just because that's the one I worked on. So I think I was able to generate the 88 12% that's at the bottom. Mhm.

But I was not able to figure out where the 6.1 and the 25.9% came from. So, I was wondering if you could walk me through the calculations so I can understand because I think this is relevant for the next discussion we're going to have. Um, where those num what those numbers mean, especially the 25.9%. But I'd like to make sure that I have a correct understanding of the 88.5% and that I I would like to be able to generate these numbers from the numbers in the column that are above it.

Yep. So, and we could we could always come back with that, but basically it's simple math. If we if we've got all our decimals in the right spots, the total revenue n line here is the key. So, basically, we look at that total revenue n line and the first thing the total I'm sorry, I'm going to make this arrow on it. The one with the re the total revenue line is the one with the red arrow. Correct. And so I think we were talking about 20 fiscal year 2627 which is the first green column in that the the line that we're talking about is 38.6 million. Mhm.

The first policy says you cannot spend more than 90% of the operating cost. We literally take 38.6 times 90 and we say that's the total. We compare that to 34,191,000 and say okay that was underneath. We're good. Then we we say again, okay, the second policy is you've got to spend at least 10% of your revenue on CIP. So we take 38 620 137 times 10%, we get 3.8 million. Well, where is the where's the six? Okay, so I I can do that math.

So you take your 30 your 3.8 million and you compare that to the fact that we budgeted 9.9 million. So the difference between the 3.8 8 that we had to do as a minimum. And the 9.9 that we're actually doing is $6 million of extra or above policy work for CIP. And this is a really I'm glad you highlighted this. What you if you look at the revenues, yeah, pretty much 10% of revenues is 3.8 to $4 million each year of this forecast. If we go down and look at the capital expenditure line, we're looking at 9.9, 9.5, 9.2, 10.7, 10.3. So every year we had a goal of doing 4 million but we're doing uh considerably more than 4 million. Is that

okay? So uh 6.12 so the derivation of the 6.124 million 1 the 6.124 million number is 9.986 million minus 10% of three minus 10% of $38 million. Yeah. So 6.1 is the extra amount of capital projects we're doing in that year above the policy requirement. We could use a couple lines next time we show this to show both.

Yeah. I think um Okay. So I can offer a piece of advice for my own sake. I think it would have been more I think it would have been more helpful for me since that since that 3.86 million since that 10% number doesn't appear on this chart anymore. is it doesn't appear on this chart anywhere would have been if we could have just said that the the total capital budget of $9.98 million is you know 20 it's not whatever the percentage of the revenues is just keep it simple you know our our target is 10% obviously um $10 million over $38 million is like is it is is It is 25.9.

It should be. I don't have my my calculator out, but it should be that 9.9 is 25% of 38 million to 620. Okay. So, so that's probably where Okay. So, the 25 I'm I'm looking at Bob because I saw Bob nodding his head when I was making my comments. Um, so 25.9% I think is the number I'm looking for, right? So, so 9.9686 million is 25.9% of 38,620,000. Yeah. So, I was getting I had gotten out my calculator and I just was not able to figure that out.

Um, so so there's a disconnect between 6.1. So my issue was I was not able to connect $6.124 million to 25.9%. Yeah.

So I think that's a I would say that that's a you know an issue. Um it's not not clear. So on page uh 17 which is the deferred mainten on slide 17 which is the def Thank you for that explanation. Um so I have a couple questions on this. Um, first I don't I'm not sure I understand what undergrounding is or why undergrounding is on this list or you know why it has a place here and so I see that it says unknown but we haven't had any conversations at the council about making this a priority in any like it's nowhere and it seems like uh putting it on this list has sort of established that this is a priority. is am I missing something in terms of its inclusion on this list? Like why am I looking at this?

You're right, sir. It was it was included just as a as a placeholder, but I think you're correct in that it possibly implies that it was approved by council. It was not. So there's no like we have the rule the rule 20 underground. That's a separate project. It's not a that's not that's not on here. That's right. That's why there's no dollars assigned to it, but we should in hindsight we shouldn't have put that on there. Okay. Yeah. Um, the next question is about the $38 million for the police station. Um, I don't I don't understand where this number came from. Um, so I maybe you could like you know I sort of looking at proposals but I don't know

like no no so basically we were asked to come up with the the kind of a theoretical basis so we can understand the total picture. So, I talked to uh construction firms that specialize in these types of uh emergency buildings that with, you know, the first responder part, fire engines, that kind of stuff and police. And they told us a per square foot cost and and and I said, "Well, for this many feet, would it be this much?" And they said, "Yes." So, this is just a side of barn so we can understand what experts are preliminary telling us because you're absolutely right. We have no plans. we have nothing on which to actually price out real materials and and real services. So this is just

so if we go back so now Nova you can bear with me for a second. Can you go back to one of these charts keeping in oh keeping in mind sorry uh go back like uh one more full one full.

Yeah, that one's fine. So on this chart there's a there's a line for capital expenditures which we've see approaches like $9 or $10 million at the end and there's also a line for um debt service which is above in the general fund operating total which is $517,000. I think that's to pay off the Sunset Center funds. So, you know, I'm a little stuck. I'm a little stuck on what like and and Brendan and I had a little bit of a conversation about this the other day. I'm a little stuck on how why, you know, if we if we took the and maybe I'm asking the right person, maybe I'm asking the the CFO here. If we finance some part of the $38 million, which line is it going to go in? Is it going to go in the debt service line into the future or is it going to go into the capital expenditures line?

You know, I actually I think we're gonna have to address that as a policy because the debt service that was in there before is debt service. It wasn't related to capital projects. So, it was just kind of lumped in as a Well, let me let me interrupt you because it is related to a capital project because the debt service was related to the capital project that was the Sunset Center that was rel that was a Sunset Center renovation. So the so the analogy is completely correct and and so you know I'm sort of talking to us

like it's not clear to me like I'm not I'm not clear that the $38 million like I'll phrase this as a question. Does the $38 million belong in deferred maintenance or does it belong in debt service? Like I'm not like it's not clear to me that that question that we're thinking like we're thinking like we've put down some parameters for how we're thinking about it but I don't think that we have established that those parameters that that police station belongs in you know if we're going to finance it with debt then it belongs in I assume it belongs in debt service not not somewhere else. Is that not

No, you're exactly right and and it's it's an interesting conundrum. So right now the cost that's in there is the ongoing cost if we were financing it. So it's loading up our capital projects with an additional cost every year as it sits there. If we if we said this is the way our policy is supposed to work and we did go and issue the bonds in theory it's debt service. At the same time it is consuming it is a capital project that is consuming our resources. Do you think then you know so we have this 10% capital project number that we sort of bandandy about you know above or below however we want to think about that or the 90% limit. Do you think that if we finance so let's say we finance a using your number a $38 million project over 30 years and we come out to a million half dollars a year you know for 30 years million half dollars. Okay. So, $1.7 million or whatever the number is. Um, do you think that that $1.7 million would count as some fraction of the 10%. So if our if our capital expenditures if you know our budget is let's say $40 million a year and $4 million of that is uh dedicated to CIP would we count the $1.7 million as a CIP number or will we count it like does it go to the CIP number? Does it make a dent in what we have to spend or what we can spend or what we shouldn't spend or

I'm going to I'm going to save Jamie for answering that question because you're right. What you initially said was correct that this is largely a policy conversation. I mean the the policy to split 9010 was a council policy that was adopted in our budget. Um so I think that would be a very important conversation to have once we start having a better understanding of how we might fund a project like the police building. Yeah. Okay. But do understand it's very expensive and it will consume our resources. My calculations is 2.9. It's going to consume resources that will then not be available for other things. Okay. I think 2.9 to me is not right, but that's that's a question for another day.

Um and finally, you I think Brandon and you both stated that um there were no changes to revenue sources. Um right. So this budget and I would like to understand where the ambulance revenue changes come in like you know we've had a couple conversations about the contract with AMR about recouping some of the money that we get. So so is that a change to a revenue source?

So I believe you know Jamie can speak more to that but I think that maybe was an overstatement of the truth. The only new revenue source was we we did bake in Jamie, correct me if I'm wrong, but we did bake in uh an assumption for the the new revenue with respect to when our ambulance rolls out of the city. I think we anticipated 350 trips throughout the year at $2,000. So $700,000 is baked in there. So u I think what Jamie was speaking to though was uh revenue initiatives like toot. That's not included in here yet cuz ambulances

but the ambulances. Yes. When when we get the budget, when we get the draft budget next month, we'll be able to sort of have a clear understanding of what we pay Monterey Fire for our ambulance service and what we get back. That money comes to us, not Monterey. Correct. Correct. Okay. Y Thank you. Those are all my questions. Thank you, Jamie. Go ahead, Alexandra.

Thank you, Mayor. Um Jimmy, thank you for your presentation and all the time you've spent on this. Um I've got three questions. Um a couple of them actually touch on things that Jeff has started to bring up. Um, so on any one of these charts, uh, my first question is, so the debt service, it's it's around 500,000 that's left over from the Sunset Center bond if I understand correctly. And how much pay how many more payments do we have left or how many more years do we have with that? I believe it goes to 31. If it doesn't, it goes Oh, well there it is right there. So there's death service to 31. I it may go to 32, but we're just about done. The Afur has it, but I don't have the Aur in front of me right now.

Okay, got it. Thank you. Uh, question number two. Um, on page 17, the deferred maintenance chart. Yeah. Yeah. Yeah. So, here's where my questions are and where I'm not comfortable with one of the figures. Um, so we're looking at 102 million. And the concerns I have is with the parks and facilities. I remember when Bob Hurry left, one of the last meetings he had is he told us that we had probably 80 to 100 million. I know it's a rough number of deferred maintenance on all of our city-owned buildings. So, when we break it down into this handout that we got today, the one that wasn't included, but the detail, um, I'm really disputing the figures because they seem too low. Like, Flanders Mansion is only at $120,000 and Scout House is only at 20,000. Uh, I think those numbers are way off as far as how much maintenance just those two buildings alone need. I'm just pointing out two items. Um, so I'm thinking that that uh parks and facilities number needs to be much much higher. Um, and that's just going through two items. I mean, if we went through each individual item on how much work it actually needs in deferred maintenance, I think it's going to be much higher. Um, and then as Jeff mentioned with the police department building, um, I'm very concerned and I think sooner rather than later, we need to have a discussion as a community. And I will even suggest this at the end of one of our next council meetings that we need to put on the agenda talking to somebody that does municipal bonds and if they can advise us and give us an idea of what that would cost if we were to finance it the same way we did with Sunset Center. um because I really don't even feel comfortable just in good conscience moving forward and here Jeff and I are working on choosing an architect and hiring somebody to start doing plans when we do not know as a community how we're going to pay for it and we have so much other deferred maintenance

including streets and all these other items. So that's just item number two that I'm concerned with. And then my third question and I asked this to Brandon yesterday um is basically and and this is not you know assigning blame to anyone and there's sort of a long answer to this but how did we get to this point with all of this backlog on CIP and with how much we need to catch up and just this situation as a whole and it's and it's been years in the making so just and I know it's multifaceted so either e either one of you is certainly welcome Brandon. Yeah, I'll take that one, Jamie, because I I don't think you've been here for that long, but um you know, part of it I appreciate the question from the council member and I know I know that when we spoke about it, part of it kind of a rhetorical question too, like you know, just how did we get here? You know, there's maybe isn't an exact answer, but you know, you've got a couple years where we saw a downturn because of COVID. Um, I think that in previous years there was emphasis put on, um, on different expenditures, uh, on staffing levels, and really I just don't think that there's been the same level of attention paid to deferred maintenance as this council has put into it. And so, it's really shined a spotlight on what the issue is. Um, for what it's worth, I do believe that, um, Bob Herreri, when he would throw around that 80 to$100 million number, a couple comments on that one, I'm not sure it was the most informed number. I think it was a bit of a a swag. Um, but I do think that his number 80 to $100 million included things like streets, storm drains. It wasn't just the city's buildings. So, I I do I do think that that's right, but I'll go back and double check. I'm I'm pretty certain that's true, though. Yeah.

Anything else? All right, Bob. So, I'll I'll have to figure out how to phrase these in the form of a question. Um, can you go back to any the page? Yeah. Yeah. Any of that's good. Um,

I think Jeff, your your comment about debt service, I think it's spot on. It's like where does that go? Um, and we're not there yet. Um, but I as we're one year into this policy of 9010, I think it's accomplished a lot, but there's holes in it. Um and and my my personal thought is there's two interesting numbers on here. One is the Kalpers's unfunded liability program, right, at 3 million a year. Um essentially 8% of our operating expenditures just go to writing one check to to to the pension fund. Um and that is debt. Um it is $29.5 million of debt as of today. And um if Kalpers performs 1% poorer, if they currently they're getting 6.9%, if they go to 5.9%, 29.5 million goes to 42.5 million. Right? So let's just never lose sight of that. I'm glad we're focused on deferred maintenance. I'm glad we're having an honest conversation about, you know, some of the big challenge we have in front of us. But that hund00 million does not include an enormous number um which is really just paying the pensions of all our employees that were hired u before 2012 for the rest of their lives. And so that's a significant uh thing. I think that one does belong in operating expenditures because that has nothing to do with capital. That's just the cost of employing our employees. Um whereas debt service for a building I think there's an argument that that may end up being in in the 10% my next bre and my next breath I would say but only if you raise the 10% to something that accommodates it because right it's um it can't be a zero some or maybe it

is a zero sum game um because it it is funding capital and it is addressing deferred maintenance but that's I think a conversation for another another day. Um, I didn't phrase that in the form of a question. Is that true, Jamie? That that would be Yes, that would be true. That's all. Thank you, Hans. Uh, I have some comments on the five-year forecast, but I don't have any questions. All right,

I'll let you ask questions even in the discussion. Um, I'm in the same boat as Hans. I've got some things. They could be questions. They could be not. But I have one big question. Did you in any way, shape, or form take this spreadsheet and do any kind of whatifing given the fact that you're telling us these are pretty conservative and maybe even optimistic numbers? I'll discuss it and I have some way to discuss this when we get to that point. I'm just wondering what you did before you got here tonight. You know, we haven't really done any whatifing on the revenue front because it's so uncertain,

but on the expenses. So, we're just trying to figure out kind of what kind of rooms are in there. Um, you know, the challenge is is that salary and benefits is such a huge percentage of our operating costs and that debt service and uh Kalpers are a huge percentage and they can't change. So there's not a lot of levers to pull when we're doing the forecasts and and doing whatifs. But uh you know the main thing we're looking for is is do the blue line and the red line start to cross? We already know that the when you put capital projects in it is you know what's it take for those to cross and they can cross too depending on how much we're putting into expenses and you know what kind of future we have. Remember this has no colas in it.

Okay. So the answer is we haven't really done what I think yet. But what we did we have so we haven't created any spreadsheets but we have done is within our within our finance team with me and Marissa we have sat down and had those conversations like what are the where are the areas that we can we can look at those expenses uh both in services and then CIP projects. So we we have some ideas about where if we need to we can pull those levers but again that's why we're asking the question tonight because it's it's kind of a fruitless exercise to to build out spreadsheets until we know policy direction from from you all. But we're very aware that um we need to run some whatif scenarios, which is kind of why tonight's presentation is framed the way it is that we're we're wanting you to to think about, you know, an 8515 or something like that. So, we're very aware of it. Yes, sir.

Okay. Where's fire services that we're paying to Monterey, which is significant. Oh, and thank you for that. I think we kind of went over that fast. Services and supplies includes fire and ambulance. It's in that line item. Okay. as singing a portion. This sort of touches on Jeff's comments which were good. The 38 million for the the uh police station public works building. Does that filter anywhere in here? Are you putting some of that into the projected capital projects?

Yeah. So, it it's kind of if you put it all in year one when you build it, it it just throws everything off. So, what's actually in there is the cost of debt service. I ran the calculations at 4.7% for 30 years and came up with the number. So, I'm going to give the spreadsheet to you. We'll check it. My calculator, right? Oh, man. I don't have that. So, so but you use $38 million. Uhhuh. So, but I'll double, you know, I I by the way, I haven't done that calculation in about 6 months. So, this is my memory. Um, so we So, that's why I left in capital projects because it's consuming those resources. If you put it up in a debt service on the line above then yeah. Did you include like architecture services of $5 million somewhere?

We didn't capitalize that. We figured that's something we would be paying out of our own capital projects budget if you when we get into that next agenda item. It's in this year as a as a So you're expensing that this year, correct? 5 million because the anticipation is you would be paying for that right now. You got to get it done before you can go do anything else. And then you're putting the 4.7% debt service under capital expenditures each year starting a year or two from now. Yeah. For the next 38 years. 30 years. That that sort of touched on what you were asking.

So So now now I'm a little confused. Um $38 million. So you assume that $38 million did not include what I'm assuming is $5 million in architecture services. So you're assuming that the total cost of the building is $43 million.

Okay. So I I I don't want I like when I have asked people about the cost of projects, it always includes architecture services. So I wonder if your $38 million included included architecture services. Like when people talk about cost of like I'm kind of looking at Hans because Hans has more experience than than I do in this, but when people talk about the cost of a building, it generally includes the architect, right? So I'm assuming that the when you got a $38 million number, that would have included the $5 million architect. That's an interesting question. We'll double check that.

Okay. And and we can talk and we'll like I have some quibbles with the $5 million number, too. So we can talk about that. And that's one reason why Brandon wanted to do the CIP first. Um, so if you take out the $5 million whatever year you put it in, we're getting closer to the 10%. I mean, we're probably at more like 14% instead of 30%. Right. We put 5 million into next year for the architect. Okay. So, we're not spending as much as it appears to catch up on our next our roads and buildings and other kinds. And you're leading into some really awesome stuff because you're going to talk about the time it takes to plan and then when you build and so costs go up after you had a chance to plan. So there's a lot of variability but

okay I guess I'm going to show in a few minutes when I show my projection that this can get way worse fast and Bob just touched on one of them. Okay. All right. Very good work. Thank you. Anybody else before we move on? Okay. I'm going to get public comments. All right. So, we're done with the council for questions. More discussion to come. And uh I'm going to open it up for public comments. I saw NY's hand up.

Nancy Tumi, thank you. This is great work uh by all the participants. Um my I just have two relatively simple questions. Um I Jamie reeled off a bunch of items that were to come out of the unassigned reserved budget dollars. It would be nice to see not not the unassigned, sorry, the reserved budget dollars for future years. Um and it would be nice to see a more granular list of what those items are. Um so I'm requesting that as an item. And then I was under the understanding and it was probably wrong because it's not on this chart that we see on the additional pension mitigation that my assumption was that the 1 million would continue for extended years beyond what is shown here which is shown to end at the end of FY 2627. So again, I was assuming that would be a continued uh reserve uh and would like to see that addressed in as we move forward. Thank you.

Thank you. Anyone else want to come up? Okay, mayor. One quick comment while the public members coming up. Um just as a reminder, so this is as we're starting our budget season right now, if you remember and those that stay with us every year through this, we we start after this meeting, we start a Q&A document that lives on our website. So, we're collecting all these questions. So, anything that we can't answer tonight or need to do more research on, we'll include in that Q&A document that we'll live as we go through the rest of the budget season. Perfect.

Hi, my name is Harry Ross and I I these are kind of questions or clarifications. So, under the contractor line, my question would be if you take out ambulance, fire, um kind of those things like that and supplies, what what's truly left in things that we are contracting or consulting out? And that would lead me to a question of in some cases would it be cheaper to bring it back in house? Um would that actually save us money than spending a lot of money on contractors? So that's just a thought about that line. Um this this comes from a private business kind of point of view, but should the city be considering being self-insured for health insurance? Would that actually uh could someone do an analysis of that that could that save us money instead of um insuring out? And I don't know the answer to that, but um I work for a company where we were self-insured and it did save quite a bit of money. Um there's a risk in that. So it's not anything that doesn't have a risk, but it might be interesting to to look at. And then I don't I didn't go through all the the um information there, but it would be interesting to see headcount from maybe 5 years ago to 10 years ago to now um to understand, you know, have we really added people or people about the same and we're adding salary. That would be just kind of an interesting statistic to understand. So that's it. Thank you, Harry.

Go ahead. No, come up. I'm sorry. We're friendly. Um, guys, so I just have been looking through my old Carmel books and I saw that in the 1960s that the where the police department and everything is up there now. That whole thing was supposed to be like a bicentennial, not a bsentennial, but a a 50th anniversary where they were going to bring the city hall up and it was going to be one giant space for city hall and police. And that was why that is so large up there because it was going to be for everything. So as I was sitting back here trying to think how you know come up with the money I mean just to brainstorm throw it out there idea. What if this city hall was this was once All Saints Church it became city hall. What if this property was sold for the money to go into the city to make that a substantial 38 48 I don't know how many million dollar everything. I mean, the parking's there, too, for everybody. It just sits there all day. And by the way, thank you so much, whoever when I didn't have um Wi-Fi or electricity Christmas Eve, Christmas night, all of those days that I was able to go to the library and all of those things. And I know those people up there in that parking lot building, I think they put it all together, but I was able to have service all throughout that time. And I didn't get to come in January and thank you. But anyway, I can just envision a whole big thing up there and selling this for money for city. Thanks.

Thank you. Laura, you going to come up? No. No. Okay. Trying to get some people up here. It's an important subject, so we'd love to hear from you. Come on in. I'm going to give you plenty of time because this is your one chance at the beginning.

I'll be quick. Um, I really applaud the efforts to get a better handle on the deferred maintenance across the entire city. Um, you can't solve a problem until you define it. And I think there was a really nice start on that today. It feels like there's just two observations. One is that we need, it seems like we probably need a lot more rigor in getting that list together in a way that we feel is kind of bulletproof in terms of what are the costs. And I think there were a number of great questions from council members trying to dig at that deferred maintenance a little bit better. By way of example, one of the things we've been asking on um Forest and Beach, we've had it we're in a process of getting estimates right for some of the deferred maintenance on the reetments, etc. And I noticed there was a line item up there for $8 million on some of that. And we had a presentation that um I kept asking what happened. We we heard that we used to have beach maintenance and we had a presentation at the last meeting and in 2015 so 11 years ago all that stopped and if you look at 2015 all those revetments all the rocks everything was covered there was great effort every year that was sort of almost beach hardening before the winter and a result of that going away it's exposed all those revetments and it's now resulting

are you going to stay for the whole discussion yes I am why don't why don't you hold that question till after the public works folks have a chance to talk about CIP because I think they're going to cover that subject. Correct. I was just going to say you wanted to go ahead now. The cost of deferred maintenance increases if you stop maintaining things. Right. So my point is

getting out in front of this deferred maintenance is really critical because it results in a lot higher expenditures over time when we leave things behind. The other thing is I think we're going to have to have a lot of imagination in the revenues area because clearly the we're looking for funds that don't exist in our current forecast and and there have to be ways that we can come up and and brainstorm together how we increase our revenue and address our deferred maintenance both.

Very good. Stay tuned for the for the discussion about the uh beach. It's coming up. Anybody else? Come on up. Yep. Your turn. Hi, my name is Jim Beck. So, um gosh, I don't even know where to start. If I was running this business, um uh I'm probably the only person that bothered to review the all 214 pages before I came in here. I would, you know, there's a couple of things that uh I'd like to impart. One is in Chip's prior budgets. By the way, I like Chip Raric. But if you look at that 10-year historical forecast picture, what you see is salaries and benefits and services that we've contracted for has gone up well over 50% since the year that my road pavement was approved. That just got paved. That's fiscal year 2122. 50% for salaries and benefits and services and and I'm still picking up the litter on my street. Um so I don't know where all those service improvements have come but I would have liked to see in this next budget a commitment by administration to improve services. We uh the finance manager went through some options in terms of how do we get to a budget balance which is a commitment that's made I think in the annual what what do they call it annual comprehensive financial report says that we'll have a balanced budget. Well in that balanced budget could we also be committing to improving services instead of the council being asked to trade off services to get to lower expenses? Okay. And by the way, um there's a lot of good

data in that annual comprehensive financial report that might provide some uh guidance for you. Um while those revenues were only increasing by 12% over on an annual basis since fiscal year u 2122 and expenses and contract services were going up 50%. That meant that the available revenue for capex or deferred maintenance is down about 75%. So what happened the last five years that we could look at as an opportunity to not just budget off of last year's fiscal year results, but to think about the budget going forward a little differently. Where were we? How did we survive the same level of services back in fiscal year 2122 that didn't require that huge amount of increase in ex in in expenses? And just I'm not going to I don't mean to pick on public works, but the two largest expense categories are administration and public works. And if you look at the the report that you haven't looked at yet tonight for the fiscal year 25 finish in this past year on table 19 there's only a 5% increase in employees in public works. But during that period of time if you look at the rest of the data that's presented and these may not be the best criteria to measure them by but it's what's published and it's all that we we see as citizens here. There's 25% less potholes packed. There's 25% less tree permits provided. There's 10% less calls for service. There's 80% less trees planted. That's in a period of time when the cost per employee is going up regardless of whether or not we're adding people or not. And you would think if those that level of service

requirement is down, we'd be talking about do we need the 15 people that are in that department or can we get by with the number that we had in fiscal year 21 and what would the impact be? Just some uh the the other note I would give you is that since I've spent some time on this, I do think you could look at this and be really distressed. Uh I think it's fixable and I think uh I think the awkwardness is for five disperate minds here to try to provide one single direction. But I think the policy to begin with that you're looking for Brandon should be a balanced budget with available funds for capital improvements. So thank you very much for putting in that that amount of time and for your thoughtful comments. Appreciate it. Anybody else? We have a hand up online.

Atlas, go ahead. Hello. Do you hear me? We can. Uh, I'd like to put my camera, please. No, we don't turn on the camera. No, but we can hear you.

Uh, I really have to show something. You know, if you if you want to show something in the future, you should email it before the meeting so that we can have it ready. We don't turn on the camera or the the uh presentation capability in Zoom during the meeting. Sort of a policy decision. Do you have a point you'd like to make and maybe send the information later? We're going to have another budget meeting in the reasonably near future. All right. Thank you, Atlas. Okay, we've got another one.

George, go ahead.

Yes. Hello. Yes, we can hear you. I just wanted to ask how many DNBs will be imported in the near future. I didn't hear the question. Did anybody hear the question? You know the uh DNBs that we importing from Israel? I'm sorry that's not on the agenda tonight. It's not in our jurisdiction. Oh, okay. Is it not? No, it's not. I thought it was. Oh, all right. Thank you. Thank you.

All right. Last chance. All right. We'll bring it back for discussion. Brandon, you want to Would you like Mayor, would you guys like to discuss or do you want us to move on to the CIP? Let's go ahead and do that now. It's your point's well taken.

Okay. All right. Sh and Ken, please. All right. Good evening, good afternoon, or evening, mayor and council members. So, first off, uh I want to address that sand movement uh that Commissioner Bzowski was bringing up. Uh that's going to be in our operating and maintenance budget. It's not a capital improvement to move sand that we used to do quite a bit every year. So, we worked that into our plan for budget for next year and going forward. So, just letting the council know about that. Um, also one of the things that you talked about the police and and and uh uh public works buildings being built. uh my last organization I was at, I I keep in contact with them cuz they're building a police public safety building which houses lifeguards and they're building a council chamber as well about 65,000 square ft. Uh it's not a new building. It's not a scrape and build. It's a nice building, but they're doing just the insides. And it started out as a $60 million project. They just told me they were going to council this week. It's going to go up to 90 million. And five million of that was design services. just given that concept of cost of uh building uh that type of in infrastructure. So tonight uh we'll be presenting a uh the initial overview uh of the proposed fiscal year 26 and 27 capital improvement program and a five-year capital plan. Before I begin, I want to recognize Car Shi Carllet, our project manager, who has stepped up in significant ways to lead our capital planning efforts. Sherry has played a central role in organizing, refining,

and advancing this CIP, and her leadership has been instrumental in bringing forward a thoughtful, well ststructured program for your consideration. As you know, the capital improvement program is one of the most important tools or as mentioned earlier, levers that the council has in managing and controlling the city's overall budget. It is where long-term priorities, infrastructure needs, and fiscal policy intersect. Through the CIP, the council can strategically guide investments, balance deferred maintenance with new initiatives, and ensure our limited resources are aligned with community priorities. The proposed CIP before you was developed using a datadriven strategic approach. We relied on existing infrastructure assessments, including our storm drain master plan, our pavement management through our street saver program, facility condition assessments, and the environmental and coastal studies, as well as council priorities from our January workshop. We also evaluated ongoing projects, operational needs, and staff capacity to ensure that we are proposing what we are proposing is achievable and align with city's long-term priorities. For the FY2627 CIP specifically, I want to highlight a couple of key assumptions. The cost estimate for the public works police department architectural services is based on the median submitted proposals providing a balance of marketinformed estimates. In addition, the program assumes a fully staffed capacity, a capital delivery team, including a pro a capital program manager and two project managers, which is critical to successfully implement the scope work being proposed. With that, Sheree will walk you through the proposed program, highlight key projects and priorities, and most

importantly seek your direction on how you would like us to refine the CIP before returning with the final budget for adoption. Sorry. Good afternoon, uh, mayor, council members, members of the public, and to my colleagues. So, today I'll be presenting to you the proposed CIP budget and plan. Um, okay, let me just go. So beginning with um the purpose of this um presentation. So today I'll be presenting to you the capital improvement project um programs budget for the fiscal year 2627 as well as the 5-year CIP um program through uh fiscal year 2027 to 2031. The purpose of this initial presentation is to provide high level of overview of the planned capital investments for the upcoming fiscal years. major priority projects included in the five-year outlook and anticipated funding needs, project scheduling, and long-term planning considerations. The CIP uh outlines how the city will maintain essential infrastructures, enhance public safety and accessibility um and meet regulatory and environmental requirements over the next several years. This is going to be the first step for this annual CIP process and we we will be continuing to um refine the project uh scopes, costs and funding sources as we move toward the final budget um adoption. to to iriterate to re reiterate these projects are recommended by staff based on the city council high priority list, condition assessments, infrastructure field evaluations, deferred maintenance projects list, uh

community needs as well as staff capacity. Um just a little bit of a background. So what is a CIP? The capital improvement program is developed annually to guide how the city plans, prioritizes, and funds major infrastructure, facilities, and long-term capital needs. It provides a strategic framework to ensure that essential city assets are maintained, improved, and developed in a coordinated and fiscally responsible way. So, what does the CIP program do for the city and the community? Um, we maintain and rehabilitate aging infrastructures. So we make sure that critical infrastructure such as streets, utilities, buildings, public facilities remain safe, reliable and functional for the community. Um it enhances public safety and improve overall accessibility. So we invest in projects that support roadway networks, accessible public spaces, emergency repairs, and community well-being. Meet regulatory requirements, environmental commitments. We also address state and federal regulations, environmental standards, sustainability goals through responsible capital uh investments. And we also support long-term infrastructure development plans by providing roadmap for growth on aligning future capital projects by adopting city plans, master plans, and community pro um priorities. And lastly, we also coordinate and m manage all the CIP investments in an organized and transparent manner. So moving on, this is going to be the first uh spreadsheet. Um let me start with um discussing the current fiscal year 2526 project status. As you can see in these spreadsheets uh we ident we um put the list of all the uh current adopted CIP projects. And in here it'll show the projects that are completed in

progress may be completed or will be carried over to the next f fiscal year 2627. And we also identify in here the projects which require budget carryovers to the next fiscal year. This the spreadsheet also identifies um budget mid midyear budget requests for ongoing and some of the upcoming projects that may extend to the next fiscal year. And in conjunction with that, I just want to show you a little bit of photos of some of the completed and ongoing CIP projects. So in the next in this slide, um this is one of the completed projects. This is the forest theater stage improvement. So in here you could see the um stage replacement. In addition, this uh facilities division crew also did some supplemental electrical work um in this project. The next completed project is the exterior painting of the fire station. As you can see here, they've completed the painting of the fire station as well as address some leaky repairs in the roof. And then this one is the in sorry in this photo we uh we have the during and then the after of the remodeling of the interior of the fire station. So basically we extended it to accommodate the new fire engine. Um worked on the floors and the turnout tracks were relocated. Another completed project was the rear road median restoration um project. So basically the old landscaping were replaced with native droughtresistant plants and improvement includes irrigation, mulch and boulders. And then now we're um I want to move on to ongoing projects. So this one is the conglomerate paving project. It is one

of the um is basically the largest uh CIP first streets that the city has ever had. So currently we are about we completed uh over 7,000 ft of AC overlay. We work on we did work on streets uh AC overlay street reconstruction. We're do we're going to do the micro seal starting in um April because that's when the plant opens. And then we've done ADA ramp installation as well as drainage improvements. And as part of this project, we will also include another CIP which is uh one improvement on a Sunset Center main parking lot which is also an AC overlay and some restriping work. And in C and in this photo it's just a photo of Taurus Avenue during construction and then after the paving project. So this one is one of the major I guess street improvement project here in the city. This is the gateway into the city. Um it's paving Ocean Avenue from Highway 1 to Carpenter Street. So as you can see in here we have the during and then the after and then there now the rest the striping also has been completed as well. Moving on. Um, so now I've just completed the um the fiscal year 20 2526 project updates and now I'm going to move on with the proposed 5-year CIP plan. The five-year CIP plan is the city's long-term roadmap for planning and and managing major infrastructure and facility investment. So this plan organizes and prioritizes projects based on several key factors including deferred maintenance, infrastructure condition, safety concern and community needs. High priority projects are identified through city council project prioritization workshop, the condition assessments, engineering studies, and operational evaluations. The plan also includes emergency repairs and upgrades that address immediate safety or

operational issues. Each project is sequenced over the 5-year period to show when work is expected to take place and how it fits into the overall city's priorities. The the plan also outlines projected costs for every project within a timeline, providing information on the CIP funding needs uh across the five fiscal years. Um, and this one I just want to give a snapshot of the overall spreadsheet. And I I understand you won't be able to see see this, but just kind of give you a little bit um rund down on what's really included in here. So the columns and the blue ones represent like the project categories. And on your left, it it it's stated in here there's five um public works CIP C categories, streets and sidewalks, drainage, city facilities, forest, beach and parks, and environmental program. And then running across which are um the different fiscal years running from fiscal year 2027 to 2031. And then the blue rows are basically the subtotal for each category for each fiscal year. And then at the bottom will be the grand total um for each fiscal year on all these projects. And before I start uh talking a little bit more about um the the the category projects um I just wanted to give you that the overview for the 5-year CIP spreadsheet. So this this spreadsheet highlights the city's long range planning efforts. So this is more of a planning tool identifying all the major projects with forecasted costs associated with it in the span of the next 5 years. The CIP uh the 5-year CIP serves as the city's primary strategic

uh tool for long-term planning of city-owned infrastructure. It consolidates all capital project needs and funding requirements into the five-year. Okay. So this is the first I guess the first two uh categories of the five-year CIP which includes the drainage in the streets and sidewalks. So I think what I would like to kind of discuss in here is first we have like as an example like drainage as a project category in here. So on year one it for fiscal year 2627 it shows the proposed CIP budget and the projects for the upcoming fiscal year. Um on the third column you would see a letter D and the D is an indicator that's marks if the project was previously identified as a deferred maintenance and you could see there's a lot of D's in here. Um and then on the the next column which is on the fourth is the estimated cost. So it displays the projected or estimated total cost for each project. And then for the rows with each project categories, projects are identified, planned, and organized within the 5-year schedule. So the blue one shows the um subtotals for each category for each fiscal year. And then again later on, the grand totals are going to be summarized at the bottom for each one. Um just a little bit of background. So, the drainage infrastructure includes several drainage improvements intended to address localized fun flooding, improve storm water conveyance, and increase the long-term system resilience. Um, the streets and sidewalk infrastructure funds the repair, maintenance, and improvement of the community's roadways and pedestrian network. This includes resurfacing

streets, repairing or replacing sidewalks, enhancing the safety for people walking and driving, improving traffic flow, and extending the overall life uh span of the transportation uh system. So in the next slide, this uh focuses more on the facilities. So the facilities category comprises of several projects that addresses system maintenance that improve safety and support long-term planning for public facil facilities including buildings such as the city hall fire station, the PDPW building and all the other city-owned buildings and facilities. Next is the forest parks and beach infrastructure. Um this CIP um category includes several projects focused on coastal resilience. There are trees, parks, environmental restoration and park infrastructure. Just to highlight I guess some of the projects in here um that are currently on a high priority list. One is the sand ramp at the 8th Avenue um which includes if you could see it in your spreadsheet which is probably larger. This is um estimated $275,000 currently. So the repair is for storm damage in ramp a sand ramp and restores the real reliable emergency and public access with improvements resilient to coastal erosion and sea level rise. So just an update, we have an upcoming geotechnical investigation happening hopefully by the end of the week do uh doing soil boring and sand redistribution monitoring gauges um at the sand ramp. The next priority project for this uh category is the eroded bluff emergency repair. As you know during December there was a storm and um there was an erosion and just caused some

issues there. So this project will stabilize the eroding coastal bluff to protect and the emergency and public access routes and safeguard nearby infrastructure through geotechnical analysis and targeted repairs. So some updates here. So we have um we have done some temporary and short-term repair using some uh tarps and rip wraps and that's through the advisement of our geotechnical engineer that we are working on on finalizing an agreement with huracage for your geotechnical design as well as to address a longer term um repair for the eroded bluff and and other uh potential permitting requirements. Um and then the the last one would be the scenic pathway improvement. Uh this one would re help reconstruct and stabilize eroded um pathway to ensure emergency again and public access. Um it will be included in the st uh slope stabilization, drainage upgrades and protective barrier. Um so currently for that one we have conducted a field investigation with an engineering firm. A conceptual design has been discussed and we're just waiting for the proposal from the engineering firm to do the survey topo survey and design work get an estimated cost. Okay. And then moving on to the last of that slide for the 5-year CIP plan. So this is for the fleet and equipment and basically these supports are our ongoing municipal operations through the vehicle and equipment replacements. So these are all the replacement um I guess costs for this uh the upcoming fiscal years. In this spreadsheet you will see at the bottom the project subtotal um which is the total cost for the actual project in itself as can be seen in the light blue. So if you could see the um project subtotal highlighted in light blue in in between the solid um

borders that will be the project subtotal for each project. So that includes cost for soft cost and hard cost. Soft cost meaning we have design we can have permitting advertisement public outreach and other preliminary engineering work such as survey work or um I guess a geotechnical analysis. And then the hard hard cost would include the construction cost and some contingency associated with it. So that is the blue one called project subtotal. And then we have staff resources to to be able to carry over carry these projects and that's included in here. Um the yellow is the grant total for each fiscal year. So as you could see here um for fiscal year 2627 and I'll I'll give a discussion more earlier in this uh the current fiscal year it is at 12,41,54 but as Brandon mentioned earlier the letter D's refers to the deferred maintenance. So m all of these deferred maintenance are actually captured in the CIP and the total for that is about 9,860,000. Again, that's about 80% of the that CIP budget for that that fiscal year. Um and then the rest of them are from fiscal year 26 27 to 2031. And you could see all the grant totals for each year and all again the deferred maintenance that's captured in every fiscal year. So now I'm going to move on and refer it to the first column which is the proposed annual fiscal year 2627 CIP budget. And this is really the one that we're asking for expenditure authority and this is the one that's going to have some legal authority um to carry carry these projects. The the annual CIP budget identifies the projects recommended to move forward in

the upcoming fiscal year. In this spreadsheet, it provides again the expenditure authority required to implement these projects. This fiscal year represents the first year of the city's 5-year CIP plan. The budget outlines the all the proposed projects for implementation and it includes again soft cost and construction cost. The proposed uh projects uh spans multiple CIP including as mentioned earlier drainage, streets, sidewalks, public facilities, forest, parks and beach, fleet and equipment and some contingency. Next slide. So again this is the first of the half of the proposed annual CIP budget. Um just kind of give you a little bit of an overview of the spreadsheet. Um so again this fiscal year 2627 outlines priority projects developed from council's um priority workshop deferred maintenance list condition assessment our operational evaluations as well as identified community needs. Um this spreadsheet shows how fiscal year 2627 uh projects are presented with estimated total costs. So the first three columns really is a screenshot of the of the five-year plan. So that is identifying the year one which is fiscal year 2627. As you can see in the third column it states in there estimated total cost and just to kind of mention it the first this first year will be a lot of design because we would need this design to be able to carry construction cost uh construction operation. Um and on the fourth on the fourth column you would see the carryover um the carryover from

the fisc fiscal year 2526 into fiscal year 2627. So basically that's monies from this fiscal year that will be carried over for this upcoming fiscal year. And so the green is basically the difference between estimated estimated total minus the carryover. And the green highlights what we need this year. So that that will be the new monies that we will be needing. Additional columns on the right. um basically show showcases soft costs which include again like I said earlier the design any preliminary engineering advertising um public outreach that are associated with carrying out a CIP or any project and then subsequent columns show um so there's construction costs from several or multiple years and some of those projects after design are actually phased into phase one or phase two in consideration ation of the budget. And then the last um column is ADA requirement. We had to put it in there because a lot of these projects do require some ADA improvement or upgrades as part of um you know doing public works projects. So basically that's the overview for this column uh for this spreadsheet and I just want to highlight under facilities since this is for the fiscal year 2627 that we it was being discussed earlier. So the PW the PWPD architectural design is actually captured in here and as mentioned earlier with a budget of over 12 million 5 million of that is actually coming from the proposed uh PW architectural design and which is really a median cost. It's really it's not really for sure that it's going to be captured. Um but it is 5 million of the

budget and about 40% of the entire CIP budget for this fiscal year. Uh moving on to the next half of the CIP uh budget. Um as you can see in here at the bottom you will see the grand total for the proposed CIP project for this upcoming fiscal year. Again as mentioned earlier the grand total is around 12 million but has a carryover of about 2 million from previous fiscal years. With that, the budget needed for fiscal year 2627 in yellow green is estimated at around 9.986 or around $10 million. And then you would also see the grant total for the soft cost and construction cost for its f fiscal year. Again, some of these projects are phased out in consideration of funding availability. So the next one I just want to highlight and capture it um in one but in one chart is the allocations of the different uh funding for each category. So this this funding distribution shows how funds are assigned across the different categories as mentioned drainage streets sidewalks facilities forestry fleet and equipment and contingency. Um it it's illustrates how resources are planned to support priority infrastructure needs for the upcoming fiscal year. As an example, as you could see in here, the facilities has a total of about 6.85 million funding allocation, which represents approximately about 56% of the total budget for this this upcoming fiscal year. Again, I'd like to reiterate that the reason why this is also 56% because it does include the potential $5 million median cost for architectural services for the PD and PW building.

And then fiscal impact, the city, as mentioned earlier, the CIP is one of the lever of the city's um overall budget used to deliver long-term infrastructure improvements. And the CIP is funded through multiple sources, capital improvement funds, vehicle and equipment funds, grants and external funding and some potential uh funding sources. Um the funding sources support the planning, the design, construction and maintenance of uh capital projects across all categories. So in conclusion, um this five-year CIP plan and proposed fiscal budget represent more than a set of numbers. They reflect our shared priorities, our long-term vision, and our commitment to deliver projects to the community. The CIP lays out planned roadmap for investing in the city's infrastructure and facilities that support safety, mobility, sustainability, and quality of life. As we move forward, staff seeks your guidance and direction to ensure these plans remain responsive, financially sound, and communitydriven. We welcome your questions, your feedback and consideration as we finalize uh the proposed CIP plan and budget before you today. With that, I thank you and we welcome your questions and feedback.

Thank you. Very professional presentation. Appreciate that. Lots of work went into that. And thank you also for the great work that we've done this year on roads and a couple other things. They look beautiful. Appreciate it. Thank you. We appreciate you. All right. um guess questions on the CIP aspect of this. I have I have some Go ahead.

Um first off, thank you. I'll say that again. Thank you. Um this is the I think the seventh fiveear CIP I've looked at. Uh because the planning commission looks at them every year. Um so you know four on the planning commission and then one as a candidate and one last year and then this year. Um and this is the first time I can say it is a meaningful helpful planning document. Um that you've it it's IT'S you got some round of applause and I didn't stop anybody. No, you're Well, you're going to get some from me today.

Maybe you first. Um it it it does an excellent job of a five-year plan. Um it recognizes the fact that capital projects cannot be done in a year. Um that some are ongoing and forever like streets and sidewalks. Um and and the ones that are even more finite still take time. It it recognizes that without a proper design, you can't do a good construction. You know, measure twice, cut once. Um it demonstrates um that you all I'm talking to all of you here um put your heads together and said we got to accomplish a lot of stuff. You know what is you you've given us your best opinion as experts in this area of what we should do and when. Um, and I I value that a lot. Asking asking me, a, you know, a retired software engineer, to talk about what we should do with roads and sidewalks is is absurd. Um, so I appreciate that. Um, and I I have more comments later, but questions. Um, Sheree is like for Oh, um, let's streets and sidewalks for example. Um, you know, we've got streets and sidewalks are forever and um I th this seems to show some cad cadence of we plan one year, we construct the next year and maybe the next year. Can you explain some of that cadence to me um about you thoughts on one year? Are you always doing planning while you're building or are you thinking no one year we're going to plan and then

Yes. So as you know streets and sidewalks and they are always going to be probably an eternal type of project because they you know once you construct it's new and then the PCI goes low and then you do have to maintain it but it will go to a point where you either maintain it to extend the quality or the quality of the condition or you're going to have to reconstruct and replace depending on the budget uh set by the council. So in this I guess in this uh in this uh CIP budget we talked about doing a design on the first year as you could see as as an example here for the street improvement rate and then on the fiscal year the next two fiscal years we're phasing it um into two projects and that's in consideration to just setting it a 1 million 1.5 in consideration of your budget. Um otherwise it can also be put in the next year. um but also addressing you know like our capacity that we have in here. Um so basically that will happen as you could see it's basically a pattern design and then construction design and then construction and that will be most likely that will happen basically sort of eternally um because our PCI number once you prove it after several years it will go down again and so that's something that is a deferred maintenance kind of a forever one

so using um actually we maybe you should just pull up the the five-year plan for these questions. Yeah, on the screen. Oh, shoot. Sorry.

Yeah, great. So, for example, you you just use street improvement project as as an example. So, you're saying let's do some design in 26 27 and then construction of a million and a million5 in the following two years, but then you go blank the year after that. I'm curious, is that real or as opposed to the next line which is you know street rehab where you do planning. Um well maybe so I'll just stick to the first question. Um I assume street improvement doesn't really stop after two years or after three years. Should we assume that that really does keep going? Yes.

Okay.

Yes. Um then my other question because I I really as I said I really appreciate the fact you've put items on here and you've kind of showed me that once we start they have a tail. Um and you know I felt like last year when we were approved putting things into the into the CIP I wasn't entirely sure is is this the whole project or is this this the start and if I do start it what is the tail? Um, and mostly the mostly the answer was we don't know what the tail is until we do the study. And I appreciate again having some estimate um of the tail. Understanding that you might be wrong. A mission trail nature preserve. Um, can you explain this the turned into a big number? Um, and I'm curious what's behind

it's a mistake. We were just discussing that million dollars. I don't know where that came from.

Hold on. So I mean I'll have Mary to discuss because this is also her expertise but basically the mission trail um project there's a proposal to realign the existing um channel at this point and so in the first couple of years as you can see in there those are soft costs. So those are going to be design um most likely preliminary engineering like hydraulic analysis uh survey work and then permitting and that will normally take a couple of years. These are estimated numbers because the city has not done some new um realignment of creek before but having my experience on flood control projects I mean this will probably be a little bit more than a typical expansion of a creek. And so the four million is an projected number because we don't have a specific number at this point. So that's where those numbers came from. Um otherwise if you have more question I think I'll defer them to Mary also if that's okay.

And Mr. Mayor, is is this where you wanted to go with questions? These are pretty specific questions. Well, as Mr. Sounds like a question to me. As Mr. Beck as Mr. Beck said, I don't know where to start. So we have to start somewhere. So uh keep going. There's there's a lot here. There's a lot here. Um and I think we're just starting to absorb it. My main questions were really trying to understand the structure of it. Um I I I'll just put it out there that I I'm on the mission trail. I'm curious um why it has such a large tale.

Mr. Delves, if I could just offer once again a reminder to everyone. So we, you know, we we are taking notes. We'll be producing that question and answers thing. So I I mean I'm taking that as a question of you know how was this $4 million in 2930? How was that constructed? What's that made up of? And so we can make that part of the conversation because again we'll be coming back multiple times with drafts of this budget to you. If we answer that I'll I'll be done.

Go ahead and answer theneneral. It's it's a stream realignment in a nature preserve that is well protected and has a lot of uh compliance. So, not only do we have to do the coastal commission compliance, but we also have uh Army Corps of Engineers compliance. So, there's all this permitting. Those things add up a lot of cost. And so, we're trying to put some number out there. It could be less, could be more, but at least give us some idea of where you're going to go. You're going to pay some money to do something to do a stream realignment in a preserve area that's protected.

Thank you, Brandon. If we could back up a little bit before we get too far into this, clearly we could be here for 8 hours if we do that level of detail. What do you really expect from us tonight practically? So we we're not here for an 8 hour.

It's a great question. So practically, you know, we we want some we want some highle feedback on, you know, the projects. Um, if there if there's glaring things that you think are missing or things that need to be added, um, you know, we can take we can take questions tonight um, without expecting an answer, we can take questions via email both from the council and from members of the public. We take those throughout the budget season and we put them together and come back with answers at the next meeting. Um, I I think you're right. I think you were we're really looking for some some highle feedback, but it's your you know, it's your meeting, sir. we have um we have this on the on the agenda so we can get that feedback and if if we need to go into details we're prepared to do that.

But you're also prepared for us to cover it at at a higher level tonight and go home and we can just keep feeding you questions and that's right at the next meeting you'll come and surface those because we we have to we still have to come back and present you with

essentially the the draft CIB. This is this is our draft but we haven't had any feedback from you or the public on it yet. So we need to come back to you still with with the document that we present that we can fine-tune between now and then. So maybe what we can do is each of us have our areas where we're we're more knowledgeable, right? Maybe we can each cover the areas that we think we have some proficiency in and ask our questions and hopefully with by doing that we'll cover a lot of this area. Some probably aren't going to get covered and we'll just have to do it later. Does that make sense? I'm looking for feedback. It's up to you. looking for feedback from all of you too because some of you have done this more times than I have. Jeff, what do you

That makes sense. I'm sorry. Um I was just going to say it makes sense for us to focus on areas we're more familiar with and then I have a few just very quick questions. It could be Okay. I have some questions and some comments about a few things. Okay. Well, let's just start. Alisandre, why don't you go? Why don't you go? All right. Thank you, Mary. Uh first, Cherry, thank you for all the work you put in. These are just questions, right? Questions, correct? Yeah, we're in questions for uh all the work you put in and it's just so much better and so much more thorough than what we've been used to getting. So, thank you for that. Uh just a couple these are sort of just all over the place. Um really quickly to clarify, so the resurfacing of the Sunset parking lot, you said the main one. So, you're just talking about the north one. Is that correct? The San Carlos one. Yeah. Um the

eighth the sun at 8th as opposed to the one at 10th. Um no. Yes. It's the one along San Carlos. is the one where you enter the theater. Oh, well then that's the that's the one. But but I'm sorry. This is the one we're doing right now. We're trying to do that this year if that's what you mean for for this fiscal year. We're trying to include that this fiscal year. Okay. So the south lot the south one that's the one where you have that added in here. That would be including the eighth as well as the yoga center and then the second parking lot. Okay. Who's everyone? 10th. Yeah.

Okay. Uh next question. I I don't know if this may have been a typo, but on the Sunset Center retaining wall, sidewalk, and fence, it said seventh twice, but I think you meant eighth on that, right? There's Is that eighth? I think that Okay. Is that eighth? I think that's I thought that was seven, but there's a retaining wall along seventh. And there's also a retaining wall. The main one is is eight. I'm sorry. That would be eight. So there's one retaining wall there and there's also another retaining wall between the yoga parking lot and in the second parking lot. So those are going to be the two retaining walls.

Okay. Um let's see. Uh just another question as well is how many pro project managers do we currently have and are we looking to hire anymore? I guess that's a Ken question or yeah

I can take that one. So we we currently have one project manager. We have Shie. Uh we have a a vacant position right now. So we have two planned positions for project managers. Our proposal is uh creating a third position who's essentially a CIP manager. That that's our proposal is that in order to accomplish a $10 million a year CIP in an effective way. We need a CIP manager who is also a project manager, but they are overseeing a team of two city employees who are project managers as well. One focused on vertical and one focused on horizontal construction. So, buildings and infra and structures and roads and and drains and things like that.

Okay, thanks Brandon. Um, just a couple of random questions again. Um, there was something on two of the last charts we had when I went over them over the weekend and it some said something that we are paying for a fire inspector vehicle for 75,000 and I just was asking why we would be doing that. Yeah, there it is. Fire inspector vehicle. I'm going to defer that to Rob, I guess.

The current fire inspector vehicle was formerly a Carmel police car. It was a Charger and the fire inspector took it over and it's at its end of his life. So, it's it needs a they need a new vehicle. But would that be our requirement or would Monterey pay for that? That would be my understanding. It should have been Monteray's Can we Can we get to the bottom of that? Can we find out? We'll add that to our questions list. Thank you.

Um okay, that's okay. Uh so next, uh I was just getting wondering about getting an update on the 10th and the 12th Avenue um shoreline stair repairs, the status on that. Um, and if we're doing like for like, should it be um, moving along or just let us know how it's going?

Yes, I forgot to give you an update for that one. So, uh, when I came in, we didn't have a lot of delivery uh on the plans, but now we are 100%. So, we are now just got actually our building permit. Um, and we're waiting for the final actual permit to be given to us and we're ready. We're going to work with Oono and and we've prepared already the bid package. It's just finalizing it with the changes. So, we're moving along and ready to bid that project soon. Okay. Thank you. Okay. Let's see what else I've got here. Um, so the area I wanted to focus on because this has sort of been my focus is the beach. Oh, wait. I had two other questions before we get to that. I'm sorry. um on fiscal year 2028-29 under streets and sidewalks it says traffic and pedestrian safety study and I'm questioning that year it's 100,000 and then the next year 2930 it's 250,000 um how did we get to this point and and I thought at one point when we were talking about a traffic and safety study we were talking $10,000 so I don't understand how that is um such a huge amount and maybe this is things that we need to just put on our list of questions. I'll give it to Ken.

So, that came to us uh at a request from the traffic safety committee uh to do a traffic safety study uh and then the implementation of that uh traffic safety study that we were a part of. So, we put that in here as something we would wanted to propose. Okay. So, it's a traffic safe uh the traffic safety committee that uh meeting that we had. So, it's been requested. It seems quite thorough if it's at that price range or It seems quite

thorough quite quite a thorough study. I mean, I guess I'm just my impression of when we talked about it with the chief previously when we were talking AB413 and the loss of the parking spaces. Um, it was 10 20,000 maybe. So, I'm just wondering how thorough of a study is that that we haven't even gotten down to that path yet. So that's why it's way out in in consideration like you're marked for a future. We're still working on what it is we want. But that's a very good question.

Okay. Uh just couple quick notes also the Piccadilli Park restroom the costs on that seem to have skyrocketed. Now we've got 150,000 for fiscal year 2728 and then 600,000 uh the next year. Uh, so we're talking about, you know, a $750,000 increase of a existing restroom. That seems like a lot.

Yeah. So, as as you see on fiscal year 26 2728, it it says design. So, that car that has a carryover of 70,000. So, that's included. So, really the ask is 80,000 for that fiscal year. And again, this is for for the design and um helping probably with some soft costs like um hiring a CM to oversee the construction and then some permitting and public outreach and stuff like that because as you know that is like in the middle of the park amongst all these um businesses. So that's just for construction and the restroom cost that is a projected cost. We don't have exactly like the streets and drainage like a hard number and that that I can use you know like per lineal foot or something. So that's just a placeholder for that fiscal year. Uh again, these are not going to be adopted at this point, but we once we get the design, we will give you a little bit more of a hard number, which is yeah, engineer's estimate,

which also just makes me think cuz I I've heard the word public outreach several times today, and it's almost sounding like we're hiring a public relations company to like um get the public to accept some of these items. Uh no actually I I I'm acting as the PR right now but like in some projects um uh in some projects when it requires a little bit more um you know like COD has their own PR but the public outreach is also I mean it's not huge like let's say we send advertisements like project is upcoming we we do public outreach to each of the businesses those postcards and stuff like that those are just some soft costs added to that too but a PR wouldn't And it wouldn't be a bad idea if we're, you know, like doing a restroom that will uh disable the park or something like that. And then the cost on the businesses too. I mean the impact on the businesses, but that's just a minor cost on that one. Okay. I appreciate your explanation on that. I think I'm almost ready to get to the beach. Um, okay. So on the beach, so the sand ramp for example on 8th Avenue. So we've got the fiscal year 2627. We've got it 275,000. So how are we also adding 250,000 the next year and then 2 million the year after that?

Yeah. So I think the intent for this is again we really don't have yet a uh specific contract for this one. So the first year is typically going to be some engineering preliminary engineering or design work. So we have to do some geotechnical studies right survey um and then some design and then the next following year we're anticipating we're going to have to do some work on permitting and that will just kind of you know giving us some money for additional money for permitting and as well as continuing like the design. I don't know how the design's going to be yet at this point if the permitting will change some of the design. Sometimes that happens and so we're just allocating some monies for that but that's basically for design and permitting.

Okay. I'm just basically everything on here that's on the beach I'm questioning because the costs are looking astronomical. The next one with the eroded bluff emergency repair the 26 27 fiscal year it's 200,000 and then the next year 250 and then

300,000 and then 350 and then 400,000. So that's same same type of question. And then on the scenic pathway emergency improvement design on 8th through 11th, you know, uh, fiscal year 26 27, we're at 300,000 and then we're at 1.5 million and then we're at 300,000. Um, same kind of thing with the uh, Carmel Beach climate adaptation and coastal resiliency. Uh, it we don't have anything for 2627 fiscal year, but starting at 2728, we've got 650,000, then 300,000 and 200,000 and 150,000. Uh I agree with Bob on the mission trail that that number is so huge. I don't know why you can we would want to start something if we're going to have that large of a cost coming down down the road. Um also I if you add up the North Dunes habitat, we're talking $500,000 for some planting um over three years. That also seems just exorbitant. Um so I'm just concerned overall if you had a big overall big picture that these numbers are just so high. There's no way we can keep up with that kind of spending.

Yeah. And and I understand again some of these numbers are some are like let's say for streets and drainage that can come from hard numbers because we have like previous bid summaries that we can base it on, right? But some of these projects the city has never done them and so these are projected numbers with a little bit of inflation and again when we're nearing let's say design we can provide a little bit more hard numbers on construction costs. So again, you're looking at this these are projected costs. Um, and the the one that that's going to be adopted, let's say, is what what we're doing now for next fiscal year. We're going to have a little bit more hard numbers or detailed numbers. Okay. So, yes. Thank you again for all your answers. Thank you.

Hans, are you prepared? Sure. Go ahead. So, I had uh first of all, thank you. I' I'd add my my uh voice to the chorus there. Um I had a similar takeaway from kind of what I was just hearing, which is wow, a lot of these numbers, especially in the out years, um are pretty high or they're generally higher than expected. I guess that's typical for construction, but um can you just kind of share your philosophy on projections? I think you were just sort of alluding to the fact that some of this may stem from the fact that we're dealing with incomplete information on some of these, you know, construction projects that happen later on and

um you're trying to bake in inflation, etc. But um would you say that these are conservative in that you're you're airing on the high side or how would you benchmark your projecting? Um so just to give you an example again I I said it earlier for let's say drainage right like the drainage we base that number I base that number from the 2023 master plan so they actually do have pricing in there but again those are you you could see hard numbers in there for perennial foot per manhole and stuff like that but that's based in 2023 numbers so we had to inflate that every year the CPI is typically too small for construction so we would inflate it 5 to 10% each year Um and then those costs also we have to include the soft cost like I said that's why we have the design um and then we have the hard cost which in construction and we we do have to have to be conservative because as you could see um in some areas where fees we consider CPI which is whatever 3 to 5% a year but in construction it just jumps up and down like if we have issues so on gas prices that will impact um you know like driving like the trucks or getting supplies supplies and deliveries here. So again, it can go up and down. So there's some inflation numbers in there, but it's also based on hard numbers, right? But for things like let's say as I mentioned earlier um the mission trail or some of these uh numbers that the city has not done or we don't have um hard numbers based on a condition assessment or a master plan. We project that based from let's say our professional experience or just from other projects like let's say they have done like let's say 400,000 for um the coastal repair and they're doing two projects. So we sort of kind of base on that but again there are projected we try to be conservative but I can't tell you when it's bidded out cuz we do

lowest bid I can't predict that at that point. Um I guess my question is are you sort of consciously are you consciously being conservative? Yes. A little bit cautiously conservative but also kind of a little bit realistic but then it's a projection right? Um if I do an estimate for next fiscal year it's a little bit more closer to sort of reality. But if I'm projecting something from 3 to 5 years it's a little bit hard. So you know it's it's a projection. It can go up and down.

Yeah. And I think I think to answer your your question sir, the answer is yes. We we have these are conservative estimates. I think that they're very some people would use the word safe that we're you know this is you know worst case scenario based on not knowing the reality as already mentioned some of these some of these estimates they're based off of things that we have done in the past and we have numbers that we can build off of and apply factors to. But some of these things are are are just really conservative or safe guesses of what it might cost in the future. having not fully understood what the project is yet.

No, that's helpful and thank you for kind of explaining your process. My next one is relating to roads and um as a council we've actually spent some time on this recently and my specific question is the $575,000 for um micro resurfacing um which is I guess design and construction in the upcoming year's CIP budget. um what are the assumptions underlying that number?

So I don't have my spreadsheet for that one right now but basically half a million is going to be put in for construction costs. So these are projects that um you know the other projects have designed and so some of these projects coming from the PMS the pavement management system and those have identified projects for let's say micro seal and microsurface. So we can do that with a really like small amount of like design and then then we can do construction. It's not like a full-blown reconstruction where we really need to do like the design because a full-blown design would need grading um let's say the ADA stuff we need. I my question is more what is the um you know when when you're going into street saver you run these scenarios and you have sort of different triggers for you know different decision rules about when you're going to do things to certain roads and you know the way it's been described to me is in the past we've basically come up with a budget number and said we've got 1 million or 1.2 2 million a year for roads. And so we're going to break into like a 6040 split where 60% is preventative maintenance. Turns out that's a pretty good that's pretty close to $575,000 on the million dollars that we're spending on roads. Um and then and then we're going to spend 40% on, you know, AC overlays and more extensive reconstruction work. So what like what are the assumptions? you know, we um on these roads, we've we've heard from, you know, NCE that best practices are you're supposed to be doing preventive maintenance every 5 to seven years to maximize the lifespan of the road. So, does this look at our database of roads and say, look, we're going to apply best management practices and we're going to do a preventative maintenance treatment every 5 to seven years. or does it say, "Hey, we're going

to spend $600,000 because that's the amount that we can afford to spend."

Yes. So, I mean, this number is it's I guess sort of what you said. We're dedicating 500,000 and then we have the list of projects um that are based on the reh like a maintenance rehabilitation which is a micro seal microsurface and so we will put as much I guess treats in that with the 500,000 um dollars that we have. So earlier this was actually um put in as 1 million just so you know we can we we're working with the budget and like at the bottom line is 12 million. So we're we're dedicating just half a million and 75,000 would just be mostly for construction cost and hiring also like a CM and inspector on the side.

Okay. Thank you. Um and then quickly on the the Fourth Avenue outfall again, you know, I just tried to focus on things that sort of surprised me on that one. I was just a little bit surprised that construction didn't start until 2030 2031, I believe. Um, and so the the question is basically um it's always been described to me as like a sort of like an imminent safety issue. Like can it can it wait that long? Maybe maybe we have no option, but can it wait that long? Is there any kind of temporary fix needs to happen? You know what? I'll defer that to Ken because I think it's priority. We're dealing with prioritization.

Thanks for that question. First off, I'm trying to think of capacity to implement. Mhm.

I wish we can do all these things now. If we had more people, more resources, more funding, uh then yeah, we can work with uh making things sooner, but I recall from uh January's meeting, this became a number two priority to the council. Um so what we looked at is I we're on the assumption other emergency repairs need to be done first. emergency sand ramp because of capacity and the erosional area. All that that needs to be done to include the scenic pathway to help with that uh needs to be done now and and by the capacity this is what we need to do in the next couple years and then we could take that on. Uh I have a good feeling that that outfall can last uh myself is pretty pretty solid. I think uh uh it could use a future repair, but based on everything else, we have a priority that's even more dangerous.

No, that's perfect. Thank you. That's very helpful. Um and then um on the the sand ramp, and I don't want this to be heresy, but the $2 million number surprised me too. And so my only question was I guess given what our goal is for the use of the sand ramp like is that is that our only option for achieving our goal there? Um you know if this is going to be a recurring problem with with storms are there have you guys looked at other options for achieving our goals or is the sand ramp basically the best option and this is just what it cost?

Uh you mean for emergency access? Um yes. So we looked at several actually location and some of the location are just not feasible in terms of just um being able to drive like heavy equipments like let's say you don't want the Delmare parking to be used for that one and then the sand when you put you know like load in there it it'll just sag. So those were not considered. The other consideration is eight um so that the the ramp is actually the eight and a half street what we call the eight and a half street. The eighth street is actually next to it next to that stair. So that's still under consideration. So those are the two uh locations now for consideration for the sand.

I just want to also add we're looking at the long term of of a product. I don't want to put something out there and in a few years gets washed up. We've already experienced that once before. So, if we want to do it, do it right. And so, it's long-term usability for not only public uh walking down there, but for public safety as well.

Yeah. No, it's great to hear that you guys have you guys clearly thought it through, which is fantastic. Um, the last question is a small one, but one that's near and dear to my heart. Um, we've got uh $450,000 for design and then 1.2 2 million for the sunset center retaining walls and um fences and um I guess sidewalk. So sidewalk is probably a decent chunk of that. But um can you just describe to me kind of what your plan is for the for the fences? My my hope my my deep hope is that we can come up with something better looking than the the gnarly chain link that that uh surrounds the Sunset Center on several sides.

I mean I share your sentiment. I don't like channeling fences. Um, but yes, we are going to be opening that up for options. I mean, if you guys want to present, you want us to present to you different alternatives, we can. Um, but basically for the retaining wall, it's kind of mimicking what's the natural stone is there right now, but making it structural, right? Um, so and then the sidewalks, what currently right now, as you see, it's AC, it's asphalt. So the other alternative is make that permeable paper so it kind of matches I don't know this the color scheme of the sunset center being the biggest one of the biggest asset of the city. So that's in consideration. Um again and we're doing all the um you know the parking lots too. Um again that's something that you you if you want to decide to move forward with that or not and I know you guys are talking about revenue but that's those are the plans that are indicated in here especially primarily it stemmed from the um the failing retaining wall which is a safety issue.

Yeah. And I um a lot of those a lot of those retaining walls it's just like if you didn't have the fence you'd walk clear off the retaining wall and you drop 10 or however many feet. So, you know, with kids around there and stuff, I totally get it. And so, I don't know what the requirements are. I'm sure there's height restrictions. There may be materials restrictions, but um if there's a way to if we're going to pump $1.65 million into the project, if there's a way to come up with something that's more aesthetically pleasing, that would be fantastic. That was a question. Can we Can we do that? Can we do it? Yes, sir.

You're good. Okay. Um, go ahead. Thank you. So, um, thank you for all the work, uh, Shie and Ken and and Brandon. It's, uh, very, very helpful. Um, also, thank you, uh, Brandon, Ken and Brandon. So, I'm going to go back to something that Alisandre flagged at the beginning that I had also written down. So, the proposal, and I assume that you're going to present this in the budget. um as well is to create a new position like a third project manager and that person will have some sort of will be a manager of people in addition to a manager of projects

and that's going to come to us next month or whenever whenever it is that that happens. That's right. So we've had um difficulty hiring project managers. Um, are you sure like that that's a achievable goal?

I never can say I'm 100% sure hiring is difficult. But I will say that we talked a lot about this. You know, Shi came from a larger institution. this structure, this this CIP manager structure with two project managers, it makes the it makes the job it makes the the department more desirable for someone to come and work at because it's a more professional way to structure it rather than just sort of like scattershotting with two project managers. You're kind of going different directions. Um, I feel confident we can we can fill it. We also have the ability uh Ken and I have talked about this. We have the ability to, you know, fill those project manager positions with contracted project managers until we get somebody in to be a permanent employee. The the goal would be to get a permanent employee in there. But the structure is really what's important, having those three, you know, effectively bill it.

But you can't really hire a temporary employee, a contractor to do the boss's, the boss job. That's right. Right. Of the three. That's right. And my understanding of why we have been sort of unable to hire someone is like salary, especially when it relates to housing costs. Um, housing costs in particular. I see Shi narring or nodding her head here. So maybe she needs a raise. Um, and I'm sort of questioning whether like if we're going to create this new position, like have you thought about how much it's going to cost to fill that position? Is he going to be making more than he or she? Sorry. Going to be make are they going to be making more than you? three times more

to to uh fill that job. Like I want to make sure that we have achievable goals and not um goals on paper that we're looking at the agencies that actually have this position because it is it's it is a manager position. Sometimes it's even functions as like a deputy public works director type of position. That's not the vision here, but it does man it does function as like a CIP manager or CIP director. So it' be a step up from these ones. Okay. Yep. And it is it is shown on this. We got three positions here. You know, we factored that in. Yeah. Yeah.

So, um I have some questions about the roads and and the beach. Um I try I'm trying to make most of these things questions. So, I struggled with um I struggled with the if we can go back to the very beginning of this. Um I struggled with the roads and so maybe that's the not the drainage. Um maybe that's the roads. Uh the second slide. Uh streets and sidewalks. So I'm looking at um I'm looking at this other document that uh you were nice enough to provide us with. And this is the five-year this is the five-year um deferred maintenance document that we got

maybe during the last hearing. And I'm trying to reconcile the numbers on the numbers here that you have on the screen with this document. And I'm trying to figure out um I'm trying to figure out where we are. So you know in this do you do you are you familiar with this? I've seen it. Yes. Okay. Who who produced this? So that that's a document that came out of conversations with uh Jamie and myself and Marissa and also out of the financial stewardship work group. Okay. So no one from public works saw this. No, Ken Ken was involved in that with us. He came came to the meetings. Yeah. He gave us the numbers. I've seen these numbers.

Yes.

Okay. So these numbers there are two there are two sets of numbers here. There are two five-year sets of numbers. And the first one is bullet pointed deferred maintenance on streets in poor variable poor condition you know PMS less than 55 and the second set of numbers from years 1 to five is maintain our current overall PCI of 70 and I'm trying to figure out and and I it seems unlikely that you're going to be able to work through this tonight but I'm trying to figure out where these numbers are represented in these first two rows of numbers like and and to give you some background I'm trying to figure out what we're going to do to address the less than 55 streets, which I've complained about a lot. And I'm trying to figure out whether I'm trying to figure out what these street projects in these first two rows here are. And and part of my sort of before I before I part of my confusion is that all these things in this spreadsheet are labeled D like deferred. And the things here like I can't tell like this was a deferred project list but I can't but maintain our current overall PCI of 70. I'm not sure that these are really deferred items are they? Like are these do you know do you know what I'm talking about?

Yeah.

Like I'm not sure that you know the and the year one is $486,769. Very precise by the way. And I'm trying to figure out whether that's really deferred maintenance or whether that's just like ongoing road repair. And I'm trying to figure out how to draw that line. And I'm trying to answer the question of whether this 5-year plan, especially, you know, the thing we're going to vote on, which is 2026 27, begins to address the PCI numbers that are less than 55, the BMESK numbers that are less than uh that are less than 55. And I can't figure that out. And I find this and I I can't and it has something to do with the D's and something to do with this is the way this is laid out. and I I can't um I'm unable to do that.

Let let us take that as a note and we can when we come back next time we can break that out better in the I understand what you're asking. So I would like for us you and I to have this conversation next week. Okay. Um so that it doesn't have to wait until whenever it is that that next meeting is going to be so to make sure that um by the time we get to the next meeting the the stuff is in order.

Got it. and we don't just take another stab at it in order to what I think is my satisfaction. Um, and then to and this is really important to me because I've talked about this a lot. And then to Bob's question, I sort of had the same question about um how I think Bob you were sort of asking Shie about um how her sort of planning and construction process was sort of working on the streets and and I kind of had the same question and I'm going to tell you what my conclusion was Shie and you can tell me if this is right. Um, I'm looking at the first line which is 500,0001 million1.5 million. The first line that you have on the screen,

sorry, the first line under streets, it says street improvement design D, which we'll talk about, we talked about 500K, 1 million, $1.5 million. Um, and it looks to me like it looks to me like that's sort of a conglomerate paving project or something like that. And you're doing $500,000 of planning and then $2 and a half million dollars of construction. Is that right? Yes. Okay. And then the next line. So unfortunately I think you've kind of confused things because there's this micro seal thing on the next line and then at the right hand side of the next line it looks like you start the whole thing again. Is that another conglomerate paving project?

We need another line. Okay. So I think that I think that the first thing needs to be separated out from the next two things to make that clearer. And I think that would have sort of answered Bob's question. But what I would what I would say is it seems like these are three-year projects.

Like you do planning one year and then you do work two years and then in the second year of work you do planning and then you do more work. Right? So you're missing a planning number in the in the 2030 2031. So you have uh you have a first conglomerate paving project and then a second conglomerate paving project. You know, the first one is $3 million and the second one is $2.5 million. And then you're missing in 2030 2031, you need to have another $500,000 design budget. Got it. Yeah. Okay. If that if I'm right, um I think you should I think that I think that that number is missing.

Okay. And this should all be done sort of in the context of um what uh like how it relates to the thing again that I'm interested in is how this relates to the that how it relates to that sheet um that sheet that Brandon has. Okay. So, if we could clear that up uh next week um at least the first part of it and then uh I would be appreciative. um the traffic safety study that Alisandre was talking about um that Alisandre referred to. I'm sort of interested in, you know, Tamy's doing this vision zero work for the whole county for the whole county and we're included in that. And so I'm trying to figure out like I would be interested in like knowing like what that is like how this is going to work. Like it's not a lot of, you know, it's not a big project and I don't I think Tamy is TAMY should be done um I think in the middle of next year. So, I don't um I'm not sure that these dates need to be pushed out um so far, but I think we you know, I always talk about pedestrian safety. So, I think that that's something we should just do if we have a if we have a plan. Um and then I have some comments, some questions and comments on the beach stuff. Um uh the sand ramp, um let's see. the San Ram $2.525 million. So I wanted to make sure I wrote a note to myself. I want to make sure that I'm reading the sheet right. So the 275 So the total cost of the Sandra Ramp project and I think this is on the next probably on the next page. Maybe you could go there. Uh nope next page. Nope. Back back sand. Oh, there it is at

the top. So, the total cost of the San Ram project is $2.525 million, right? And we've allocated, didn't we have money in last year's budget, $275,000? Is this a new allocation of money or is this from last year? It's a carryover. Okay. So, the total cost of the project, just so we're clear, is $2.525 million. Right. That's I'm reading I'm adding these three numbers up together, right? 2.525 275 plus 250 plus. Yeah. Again, it's an estimated cost. So that's right. Yes.

Okay. Okay. Um the second thing is eroded bluff emergency repair design and construction. Um so can you tell me like I walk like admittedly I'm I'm I must be completely out of the loop. I walk on the scenic pathway every day, sometimes twice a day, and I don't know what exactly is the problem right now with the scenic pathway. Okay. So, I think so between 8th and 11th, right?

Yes. So we did walk that say the eroded bluff it started really that project really started from the fl uh the the storm in December and so at 11 street it created um the erosion on the bluff in that area and so that needed to be that needs to be repaired and so that bolstered us to really go there and inspect. So we did go with Harukasunich and also um Sherman from Neil Engineering and you know what we determined is like a couple of things right um there is some erosion happening when it becomes a low point. So that's what happened to that 11th street. So when

so the water let me I'm going to interrupt you because I want to I'm going to rephrase what I think you're saying. So you're saying that the pathway does this and the water accumulates in the bottom of the pathway where the pathway isn't level anymore and then runs out and erodess the bluff. Is that right? Yes. Yes. So that's one. And then the other situation is that some of the storm drain um inlets on the street are high. They're not at low points. So what happened is you know like the alleys has water coming out right and on the street the water jumps. So the water also jumps from the street into the pathway because the catch basins are not trapping all the water coming from the streets. These are the pathways that come down the alleys or

Okay. Some of the Yeah. Some of the alleys in in the street. So it it creates runoff, right? And runoff typically what you do is you you concentrate it into the low point which is the inlet or storm drain inlet. What's happening is those storm drain inlets currently are not really low enough to capture them. So it bypasses it and so when it builds up on the the curb it jumps it also jumps and so that exacerbates the amount of runoff that also goes to these um pathway and then creates the low the low spots and it creates gullies and then now it creates this eroded eroded bluffs.

Okay. So that that was very helpful. So my suggestion so now that I understand what this is I have two comments. Um, one is that I don't, and I'm going to say this again in a minute. Um, I don't understand how we can do emergency how we can plan emergency repairs 5 years into the future. So, there's a wording problem with this chart. Like e like I think of emergencies as something that you that staff is going to do without public input. Like for me, an emergency is fixing a sinkhole or something like that. And these are not like eroded bluff repairs are not like like you you can't predict an emergency that's five years out. So my suggestion is that my suggestion now that I understand what this is is that it gets moved to drainage like because this is a drainage problem. This is not really a scenic pathway problem. If the problem is that the roads aren't draining, like it's a problem that manifests on the scenic pathway, but it's a problem with the drainage. And those are different. And those are different. And and so I think it should be put under there. And I think you should figure out my my my re preference would be that we just figure out what to do when we fix it because those are real live drainage problems unlike the unlike the maybe this maybe I'm not maybe I'm speaking out of turn but unlike like the mission street bypass or the Nibbro bypass and our big drainage system these are things that cause real problems right like because they're going to erode the bluffs and that's going to be a huge disaster if that happens. Mhm.

So, we should figure out like I'm wondering like I think this whole line item if if this if I'm right I think this whole line item should get moved to drainage and it should be prioritized over the other drainage things that we have. If that's what if we if we're thinking about drainage in terms of the city like this is a real life drainage problem that that has the potential to cause a real life to cause millions and millions and millions of dollars of damage like during our next storm. And so I think we should, you know, if we have like a giant storm. So I so I'm I'm not satisfied that these things are five years out. Okay. So those are just those are kind of comments. Um can I Yeah. One clarifying. You're just talking about the eroded bluff.

I haven't I haven't moved to the next line yet. So I'm talking about the eroded bluff emergency repair design and construction. Right. We still need to do work on scenic pathway which should stay in this one as well. Okay. So scenic pathway I'll get to in a second when I when I move down the lines.

I do I do just want to add that the reason why it's added is because now we're seeing the effects of climate change. And so I mean there is that runoff but when we always hear it the the amount of rain that's coming is larger than the amount that the the community has seen. And that's mostly a lot of the comments that I see. But this eroded pathway it's not one spot. when we did the it was several and there's also one in Piscado Creek that we're doing on Second Street. So that's included that and I think the intent was when these things are happening we are scrambling to find funding right now and since this emergency there is no monies for emergency funding or funding to fund projects like this. suppose we have I mean we have like $10 million in the bank that we could I'm not suggesting that we will or will not allocate that money but I think this conversation is sort of leading us to being able to make a more informed decision about whether that is drainage that needs to be prioritized over the other drainage and I would look to you I would look to you for guidance but to me like this is setting up all my red flags

okay um over over like the other drainage stuff that we have and I don't really know how to like give you policy direction or make budget allocations without understanding like what you think about the the impact the implications of this drainage problem. I mean you're you're absolutely right that this stemmed from runoffs. Yeah. Drainage.

Yeah. and and the the the plan, you know, the the drainage master plan that we did however many years ago, five years ago that Bob Harrari's been sort of plowing through that was also all a lot of that was about climate change, too. So, this is just this should just fit in. I'm a little surprised to be to be honest. I'm a little surprised that this is not in there given what you have described to me and I'd be curious to know why this drainage problem is not in that is in that in that drainage plan. Maybe it was just you know it's easy to imagine it was just an oversight. I I think we I think we honestly just identified it. So yeah.

Okay. So let's work on that. Um, on the Fourth Avenue alpha, I'll just say, you know, I'm disappointed to see I heard Ken's comments about pushing it off because of uh priorities. I'm disappointed. You know, it felt like we were finally getting some momentum to fix this thing that nobody wants to look at. And I don't mean I don't want to look at the fourth street outall. I mean, nobody Fourth Avenue alone wants to like really address the problem. And it finally felt like we were sort of inching our way towards fixing it. And I'm a little disappointed to see that it's, you know, been pushed back some some more number of years. And then finally on the scenic pathway emergency improvement design, like I don't know what that is, which is which is okay. Um, but again, a project that like emergency to me means you're going to do something without public improve without public involvement. like your staff is going to take it and just do something. And $2.1 million to make an improvement on two $2.1 million is a lot of money. Like in addition to the in addition to the $1.5 million for the drainage stuff. $2.1 million seems to me like a lot of money for me to just give you to go do whatever it is you're going to do on the scenic pathway without like a review process from either the forest and beach commission or the planning commission or both or us or whatever. Like that to me sounds like a project um based on the scope of it, not an emergency improvement planning and monitoring. And we've sort of been down the road, you know, we went down the road of sort of um uh right when I started um or right when at some point like in 2019, we had a little pro Oh, no. It was when I was on the Forest and Beach Commission. So, it would have been like 2016 or something like that. There

was a program to improve the scenic pathway. There was a program that had like $50,000 and we were going to do some sample some like little trial things and we never really got anywhere. And I think that the the program just got wrapped up in the whole notion that like what you see what what we're going to see with like Mission Trail and Nature Preserve like there are a lot of there are a lot of people that are stakeholders and so we can't do we can't do a $2.1 million program. We can't even do like I don't know what I don't know what the $300,000 the first $300,000 is, but I would like to I would need to see um some definition of like what it is we're doing for that to make it into the budget. Like what is what is it and what's the review what's the review process for that? And then finally, um Hans was and this is this is from Hans and it was something I was thinking about with the with the sidewalks. Hans was talking about what the what the uh what the wall is going to look like around the around Sunset Center like and we have a body that does all that work. We have the planning commission and so I I would view our role as sort of saying yeah you can have $2 million to go do this but all that stuff I think that Hans is talking about needs to go like the planning commission is a review body for all that stuff.

Yeah. Yeah. We intend to do that during

Yeah. I think that um I was a little alarmed, you know, I was a little alarmed at the cost of all the all the sidewalk stuff too and you know just the sort of you know we've done a lot of sidewalk work and now we have another million dollars or whatever it is sorry of more side more sidewalk work to do and part I want to make sure like I'm tempted to tell you to bring that to the planning commission too but I want to make sure that you know part of the DNA of Carmel is that the sidewalks are different like we don't have pavers everywhere like some parts is concrete some parts it's asphalt so there all the pavers look different and I would like to make sure you know as long as we're putting this in the CIP that when we do all this sidewalk work if it's more than just grinding down the the cement you know that we maintain that look and feel and we don't we don't take up a pa sidewalk that's like that looks like this and replace it with a flat asphalt sidewalk because that's not what Carmemell is. So if we take up a pa sidewalk, we should put down a flat paver sidewalk. What? And I don't know what the sidewalk work is, but let's maintain the sort of varied nature of the sort of sidewalks downtown. Um, let's not make it a

questions. Yeah. So, thanks.

All right. I'm going to be brief so we can go to dinner. These numbers are shocking, some of them. I mean, we're talking $3.1 million to spend on scenic pathway, which just a couple I mean, I've been going to the Forest and Beach Commission for six years. And uh that would have been we wouldn't have been able to say it. And so I before I sign off on that, I need to see more details. And I've been asking to do that. We're all busy, but I need to see what you're talking about because none of those the the problems after 20 after 25 years of not doing any maintenance on the bluffs, nothing really happened like this until we did the 11th Avenue paving project in the drainage project. And my theory is we've just directed sort of like that at the Prophetas house on Torres. intended unintended consequences when you start putting BMS and drainage. That's not a question, but I'm questioning the amounts here. Fourth Avenue Pathway, that hasn't even come up. $3 million. It's a lot. So, uh, I'm going to need some more information on all that. The restroom project, I have questions about because there was a firm bid, fixed price from a really high quality prevailing wage construction company to do the whole thing, including design for 200,000. And now it's turned into a $600,000 restroom, which isn't going to happen. We're not going to spend 600,000. I don't think we could get five votes to do that 600,000 restroom. So, which is a shame. So, I think we need to do some value engineering. But I'm going to hold my other thoughts till after we get back from from dinner and when we go into discussion. But thank you. I mean, it's not questioning your work at all. It's about time probably we got some realistic numbers on some of these projects. So, thank you very much. And we'll we're going to take a break till How much time do you guys need? 20 minutes and enough.

Think we could get through this? No. No. We need to go to break. We need to take a break. We need to take a break. So, uh, 20 minutes or you want more? I'm flexible. Give me a number. I don't know what it is. Okay. We're going to be back at 7:25. Thank you everybody.

I kept looking at you when I was off. I was like, you're funny, man. Absolutely funny.

Are we ready? All right, we're back in session. For those of you at home, we now have two people here in the audience the room

plus plus two public work. We lost all of our public works people except for the the two most important ones tonight. All right. So, we're going to get back with it. Um, I was talking to Brandon at the break because this is all about giving direction to uh staff and Brandon in terms of getting ready for the next meeting. Um, he's pretty happy with what we've done so far. If if I could issue a challenge to the five of us that to see if we can be very focused and and maybe work for another hour. And I think we we've decided if it's okay with everybody to push off the the uh strategic council priorities.

I'm I'm okay with that to a future meeting. That was your idea. But okay, so we don't have to do the second item, which is now the fourth item.

And uh let's just try to stay focused so we can get out here at 8:30. I'm also going to just suggest to do what I'm going to do and I think you're already will is there are so many projects on here and I think each of us have some expertise and understanding of different ones. If we could all do what we normally do is just go off and have conversations with the key people on on each of them and uh that way you first of all you're going to be giving them feedback while you're doing that. It's not public but it will become public very quickly in your in your frequently asked questions. Correct. while keeping your city administrator involved in those conversations, please. Yes. Yes. Well, you're going to have to give us direction on how to do that before we leave. Okay. Because

like I think it's important that we really get on the ground and see what these things look like, especially the ones under $3 million. So, I'm I'm going to suggest that so we come back with more information at the next meeting. All right. So, we did a public comment already, right? So, we're we didn't on the questions. Are we done with questions even? No, Jeff. You're not done with questions, are you? I think you ended. I'm just giving you a strategy for But you need to do public comment now. Let's finish the questions. I think Jeff, you were still going. None. Okay, I'm good. Let's do public comment. That's the general strategy for tonight, but if it goes longer, it goes longer.

And thank you for staying, Nancy. I mean, no, we need the microphone on. Yes. Hello. Dan, can you turn on the podium microphone, please? Hello. Hello. Hello. Hello. I'm here. Hello. Are we on? Okay. I think I'm beginning to be on.

Yes, I'm on now. Yes. Um, thank you very much. great information to me macro level. I won't go deep into anything. I might choose to send in email comments as a followup. U and I suppose that goes to Brandon and to Ken. Um so my highle comment is this uh wonderful work um in this list format to me is screaming for prioritization because all of this cannot even in the desired um you know aggressive we all want everything done yesterday. I I get it. Um I'm you know count me on that list. But it's got to be prioritized so that uh work can make progress as incremental staff or approaches can uh therefore become more efficient and executable. So I'll just leave it at that. Thank you.

Thank you, Lance. Nope. Thank you for being here also. All right, gonna bring it back. Nobody's online except for Scott. He doesn't have his hand up. Scott, you've got a a minute here to put your hand up if you want to say something. All right, I'll keep my eye out for you. All right, he did. There you go. Go ahead, Scott. Thank you.

Unmute yourself, Scott. Sorry about that. Yeah, just I just want to give a real quick thank you for uh the discussion and I appreciate the transparency and I know there's going to be some challenges with prioritization as Nancy just mentioned, but uh I I think this is going a good direction for dealing with the situation. Thank you.

Do you have anything to say about the mission trails situation? Uh well uh you know the keeping Sarah Trail from being undermined is important. That's what's on the list. And um but there's a lot of other stuff important for the city. So I I don't know where that lands. All right. Thank you. Thank you. Thank you for being here. All right. Bring it back. Who wants to start the discussion? I just have,

if I may, I just uh I have one comment. I made most obviously most of my comments last time um on the $4 million on the $4 million uh mission trail plan. I think I think Brandon, you might remember this, but we had a long discussion about um last year at this time doing work to facilitate the garnering of grants, which is what happened with the first three uh which is what happened with the first three uh first three of the eight stream stability studies, excuse me, in Mission Trail. And I suspect that this $4 million is a placeholder for some estimation of the cost of the next phases. And we had a discussion last year about doing the preliminary um permit gathering work and design work and all that about which would then put us in the position of being able to get that grant. And so I really suspect that the $4 million is really money that we hope to um we hope to get back from from an agency as as as the grant. So I don't think uh my impression is that that $4 million is not coming is not intended to come out of the city's budget, but some other some other agency's budget. Like we do the upfront work and then and then the for the whatever it's going to cost is coming from someone else. So, I'm pretty sure that that's a I'm 65% sure that that's what the we'll look into that's what the placeholder is. Um the only thing that uh the only thing that I would say to to sort of start the conversation is again I would really like to see I would really like to understand the roads and I would really like to see us make some progress on on the the really terrible roads like we've we put them off and we put them off and they deteriorate and nobody likes it especially the people who live behind them and I think we have some sort of a

duty to get that on the list that would be more important to me, for example, than the Sunset Center retaining wall. Thanks. Let's jump over to you, Hans. I'm sure you have something to say about roads.

Well, Nova, no, I'm sorry, Marissa. Do you uh did Nova I put in a couple slides. Okay, awesome. Um, well, first of all, again, just thank you to Sheree and Ken and the team and then we've seen in the past. So, thank you. Um, and then I guess Marissa, if you could bring up that slide. So, I wanted to see if I could sort of boost the signal to noise ratio here. Um, you know, we've been we've been underinvesting in our infrastructure uh for decades and the bill is finally coming due. Um, we have, as we've seen, hund00 million in deferred maintenance. So, you know, we think we need to be spending $10 million a year on capex to address that. So, for me to step back, like that is the central fact of our financial situation. Um, and if you look at our um, if you look at our the policy that we had, which was a a 9010 split, you know, that basically says, hey, we've got three and a half to$4 million a year, but we need 10. So again, that like that is the ballgame. Um, that's like a six$6.5 million gap. Um, it's not a traditional budget deficit in terms of operating expenses outstripping revenue, but it's still a it's still a a budget gap. And so, you know, the past two years we've been covering um that gap with savings uh which is obviously not sustainable. All right, here we go. if there's a way to just blow that up just a touch.

Thank you. Um, but at the same time, I also don't want to overstate it. Um, you know, I think we've heard we've heard, you know, some columns talking about this in kind of apocalyptic terms. And, you know, the fact is that the city is not going to go bankrupt. Um, that's that's just not the case. Like, the situation is serious. And so we do need to take action, but it's totally manageable. Um, you know, in fact, that's what Bob and I have been working on with with the staff for the past year or so. Um, and so I wanted to start off by looking at this slide. I was trying to simplify it again. And so you know the question I think before us if you step way back from you know we've got a budget meeting tonight we've got a meeting two meetings in beginning of April and then we have a budget sort of meeting when we actually get the budget presented to us in May. And if we step way back I think the key question for us is how do we deal with this deferred maintenance challenge that we've identified and quantified. And so what I tried to do was just a sample path. There's there's a lot of different ways that you could tackle this problem, but I just wanted to show a sample path here. And so if you look at this, you know, our baseline um capital improvement project spending based on 10% of projected revenue for next year would come out to $3.86 million. Um, we're going to be talking in a few minutes about, you know, the FSW is proposing, um, we want to at least take your temperature on moving to an 8515 split where 85% of our revenue would go to operating expenses, 15% to, um, capex.

If you did that, that would be another 1.93 million, almost $2 million. We have um we voted 4 to1 to bring back language for a toot potential toot increase um based on the latest numbers in the projection here that would be again about $2 million. Um and then as we've seen and it was baked into the um the operating uh the operating budget that you saw earlier, we have what I'm calling sort of windfall ambulance revenue. The staff did a great job. You know, Brandon and others identified this opportunity to ring some additional revenue out of our operations and to say, "Hey, we're going to get $2,000 a trip when we're sending the ambulance out of our community." So, that's like found money, right? That's another 700 grand. And so, if you add all this up, we're at like almost $8.5 million right there. And so, you know, I just think it's a serious issue. Um, obviously this assumes a tax increase. It assumes assumes some level of budget cut essentially or reallocation is a better way to put it from uh operating expenses to capital improvement projects, but it's definitely within our grasp. I mean, we have any number of options. we need basically one more revenue source to raise about a million and a half dollars a year and then we would kind of be there. And so um you know there's going to be a presentation of a full menu of revenue options uh in April just in a couple weeks. Um, and so there's a lot of different permutations here about how you could make this work, but I just wanted to kind of frame the discussion like if you step way back, I think this this is the issue that we're trying to

tackle and this is just one sample way to get there. I think what we are our our task here is to try to figure out which pathway we want to take. But it is uh you know there is a way to get there. So, if we move to the the next slide, if there's a way to Can you zoom in just a little bit? Looks like at the top there's a plus sign next to the go to the two at the top. Nope.

Ah, there we go. Perfect. Okay. So, um I think that there were some every year we get the same dripping red uh operating budget projection like every year it's kind of the same the same exercise and everybody freaks out and um the I think the thing in past years what we were seeing was we were being way too conservative in how we were budgeting, right? And so um we would have uh overinflated expenses and we would be sandbagging on what we thought revenues were going to be and so that led to the red ink. Now we have actually I think we fixed that problem. We have more accurate budgeting. I think now the problem is this deferred maintenance, right? We've said, "Hey, we're going to be spending $10 million a year on capex." That's that's where the issue is here. But again, the the the operating budget that Jamie presented and you know, she has to do this she has to present something based on the current situation, not a projection. So, it's understandable, but it it didn't include a few things. It didn't include the direction we've been heading in on toot. um you know it didn't include uh the direction that we might we we could consider on uh reallocating to an 8515 policy. Um and then again I just wanted to throw in there um you know a potential additional revenue source. And so if you add those things to this presentation um and then if you just I just hardcoded $10 million a year for capex spending you'll see that like the budget balances, right? Like it's totally This is sort of the five-year look at what we're looking at before. The red ink is is gone. It balances. And it's not

Look, it sounds like I think Dale's going to come up with some whatif scenarios later where, you know, the economy can tank. And yeah, all those things can happen, but like we have to start with a base case scenario. And so this is I think a realistic base case scenario where there's some shared pain if you will um where we can make it happen. Um and the other thing lastly what I wanted to show on this slide was the kind of balance sheet side of the equation. So at the bottom where you have unassigned and CIP fund balances that it it's just like it's just not intelligible language. But really what it's trying to say is, you know, unassigned fund balance is just past uh budget surpluses essentially that we've, you know, stashed away and then the CIP fund balance is money that we appropriated for CIP projects in the past that we never spent. So it's money that we can actually spend and I I added a line here which is this rainy day fund. you know, it's basically our operating expense reserve, which we have set at a extremely healthy 50% of revenue. And we got a lot of push back saying that's way too high. But just note, not only do we have the money that we're able to spend that's just, you know, unassigned fund balance and money we already said we were going to spend on CAP that we haven't spent. That's that line that's about, you know, $20 million and winds up around 18. On top of that, we also have the reserve which is extremely healthy at 50%. And as you can see in this scenario, it grows into the it grows into the mid50s. So just like stepping way back like it's not it's not a problem that we can't get our arms around. It is serious. And I think that we need to I think what we need to do in this discussion over the

next several meetings with the budget is to come up with what are the pathways what's the pathway we want to take? What's the permutation of these different options that'll get us to um you know kind of the bottom line scenario here that we're looking at. So, and I just wanted I'm not committed to this particular one, but I just wanted to show this as a um as a sample to show that we're, you know, within spitting distance. Um, and just the last couple comments since we've I think we've somehow wrapped two items here together, the operating budget and the CIP. If I move on to the CIP comments, um I like that 80% of the CIP projects go directly to our deferred maintenance. I think that tracking that was a good idea. Um with the D's, for example, I still would love to see like a um a document that has like a clearer reconciliation of our progress against the deferred maintenance, especially over time. Um, and then just kind of a tighter integration between the two documents, which is something I think would be helpful. And then I, um, to, to go back to my comments earlier, and it sounds like Jeff is in align with this. Um, I think we just need a clear strategy on roads. So, I'm concerned that we're kind of sleepwalking on roads. um you know it's 25% of our deferred maintenance total. Um the proposal that I had come up with was to say hey we're going to have no road below a 50 within 5 years and an average PCI of of 80 within 5 years and then best practice preventative maintenance in terms of the interval on you know every 5 to seven years for example. And what I've been trying to get um what I've been trying

to get to is a menu of options like maybe three scenarios so that we can gauge hey it would cost this much to get to this quality of um road maintenance and it would cost this much to do what we're doing now. And we also have the ability as you saw in those graphs before to see accumulating deferred maintenance. And so what we really want is to be able to put together those scenarios. The consultant that gave the presentation to us um you know a few months back is they are not able to do it unless we actually engage them and it would cost us some money. And so um we haven't been able to put that together like to inform this budget process. I think it was going to cost like $15,000 or something. So, you know, the challenge is the um right now everything in street saver is based on data from 2022 when they actually go around and they look at all the streets and get the PCI score and then they project into the future. So everything we look at now as a current PCI score in street saver is like a projection based on assumed deterioration from 2022. So this next year uh in 2026 they are supposed to be coming and doing an update of of a manual inspection of the roads. And so the question was should we wait until that's been done because as part of that included in that cost would be them running these kinds of scenarios. So, um, we were trying to put together in FSW kind of a hack together, you know, staff created menu of options on roads and pricing and, you know, we just didn't quite we just didn't quite get there. But, um, you know, we'll see. We'll see what we can do. It'd be great

to put together something so we could actually I I completely agree with you, Jeff. Like, I think we've spent the time talking about this. Let's put a stake in the ground and say, "Hey, this is the direction we want to go on roads and here are sort of the the decision rules about um you know, which roads will be dealt with when um and how much money we want to spend on it." So, um yeah, and then of course there's this 8515 discussion which um sounds like maybe we're going to have after our comments. I mean, you you're looking at me. You guys can you can throw that out there whenever you want. I mean, that's one of the directions I'd like to leave with here tonight is is the council, you know, came up. Is that something council wants us to do in preparing the draft budget when we come back in May? Do you want to see both our current policy of 9010 and then some other variation, you know, 8515 is the number that's out there right now. I would like that direction.

Our suggestion, you know, I don't want to speak for Bob, but you know, feel free to jump in here. Our suggestion was to have the staff put together a budget at 9010 which is the current policy and then also a budget at 8515 so that we could see you know hey what what did a given department cut? What did we lose to get to that 8515 and are those is that a service reduction or an efficiency or whatever you want to call it that we are comfortable um that we're comfortable with as part of a a solution. Um, so we just thought that that would be a a useful exercise.

I guess that teased me up. Thank you, Hans. Um, so I'll I'll just take the documents as they came at us. Um, first off, the five-year forecast, this document in front of us. Um, again, it's very helpful. Um, Jamie set it up right. This is a tool. Um, and that's all I look at it as. It as as Hans just showed that you can change assumptions and have significant changes in how much read or not read um results. um you know and and I mentioned before the a one the 1% change in the returns at calipers throws the whole thing um into considerable disarray and um then it's a distinct possibility that it could go up or down and uh and that could be a significant number. I don't I don't have a need to model that. I I know that that's real. Um and I think a lot of our other assumptions you can debate. um um and model and you know we'll I I know we'll have different results. Um but I I like I'm I like the rigor of the tool and I appreciate it. Um the five-year CIP, as I said before, I'm quite happy with it um in that it's it really is a useful planning document. You know, whether it's the right content or not is for for ongoing discussion. Um, having heard all my colleagues go through it, I I think the summary of a summary of what I heard um is as we get beyond the current year, there seem to be some big numbers and um those are questioned. Why are they so big? Um is part of it. So I'll just put that out there is that's a challenge is to help us understand why they are so big. they are out there in the future

and to some extent um even if they're not accurate even on the specific line item the fact that we are at least putting placeholders of of significance um into future years for each of these things you know especially for me you know the beach because I think we've ignored it for a long time um that we've got some big numbers out there that are in a plan a five-year plan not that it wouldn't change or that won't change. Um, so I think that's helpful because it just allows us to at least say, "Yeah, it it's kind of on the table for a couple years out to to have some of those things, but most mostly um Hans said, you know, stake in the ground." Um, and that's really what next year's CIP is. We're putting stakes in the ground. Some of them get completed um immediately and, you know, and others, as we said before, they they have a tail. Um, I need time um with the the CIP. This is the beginning of a budget, not the end. Um, but as as as I look at it, the the we we talked about the uh mountain or sorry, the the Mission Trail Nature Preserve, and I I supported that last year for the reasons Jeff is is is saying um that that group is a really good partner and they have a track record of of getting grants. But I I I if and I but I was just talking to to these guys that what I'm hearing is some people that are experts in drainage in parks um especially with Ken's background is you know the the brain damage of re you know of um re relocating or really um rerouting a stream can be significant um and a lot of that is regulatory um that can come

with it. So, I'm I'm cautious on that one to get started if the result is something that's really expensive just because it is not to me as high a priority as a lot of other things um that I think are more important. Um, but when I look at everything else in the current plan in the in the one-year plan in general, um, I I understand what is planned for this year and I understand the tale and the tale doesn't scare me away from um, from doing the work. Um, I agree with what Jeff and Hans said about pave paving. Um, I think we just need to connect the dots to what we're spending to what we're getting um, in terms of PCI score. um because I I I think there's some seriousness about that. Um in terms of levers um that you offered us um I I'm uh Hans, great. Thank you for that presentation. It it's optimistic. I I agree. I think I just think getting started with the 9010 was a big deal. um it just got us in some better um structure and got us talking more about capital and once we started talking more about capital we really started talking about more about deferred maintenance um uh a so on the le on the levers um the first one is what you call service level um and um I'm going to take the opportunity to talk about service level because I think when you use that term you're really saying things that we do um that are in the operations budget and the service level is basically do we do more of them or less of them. Um because if you do more you probably need more money and if you do less you need less. Uh or if you need more you need more people and you do less you need less people. And um I

get that, but and this is building off of what Jim Beck was saying. Um to me, service levels also imply that there's a level of service, that there's a level of quality of service. Um that um our citizens um get a response to their questions within a specific amount of time. um that they that that staff doesn't go dark on them for days, weeks, even months. um which happens today and uh so you know any conversation going forward and Brandon I know you are working on this because I know it's it's part of you um we have to keep that and it's not really a budget conversation but it's a management conversation um and it's not one we can force but we can encourage and I I just think we have a long way to go in terms of figuring out what our service levels are. I think you if you don't measure them I think was basically what Kelly said you you can't change something if you don't measure it first right and you got to make it predictable and by making it predictable you can make it repeatable and um I think we got to get there on a lot of fronts and only by measuring not just how many tree permits we do a year um it's how long does it take to do one um and some of those other metrics so we it's just better planning so I'll I'll leave it there um one thing we haven't talked about, Nancy brought it up, is the um the 115 trust. That's a million dollars a year. It's not an expense, but it's money we can't spend. So, it's money that goes into reserves. Um and um I'll disagree with Nancy. I I don't think we need to be continuing to put a million dollars a year away. Um but some of you may. Um because it's it's it's a it's a ticking time bomb that may explode and it may not. Um and just how much do we reserve? Um, right now I

think I would rather start um saving less for that unknown and taking more of that money and spending it on known needs. Um, and I mean I I I would propose just I think we the previous council said let's spend let's put it away a million away for 5 years. We've done that. This group honored that decision. Um, I'd be okay putting no more in there. And that's probably maybe less than that's maybe going further than some of some of you would like to do. Um but I I'm comfortable going there. Why am I comfortable going there? Because we've got the 5 million in there. But it's also what Hans just said. We have set a policy of um essentially untouchable reserves at 50% of revenue. That's 15.15 million. You know, we got an earful when we did that that the norm in most cities is 30%. And um I don't think we should ever go to 30%, I think we should stay at 50%. But a big reason that I'm a proponent of 50% is that ticking time bomb um of of the pension liability. So um but so if you if you looked at Hans's projection, that could be another million a year. Um I I don't think I think he only included it for one more year. Um but that could even be a million next year depending on where you'd like to go. um because our I think our reserve policy is really um pretty robust. But then you do have to yeah you really have to make sure you stick to uh to ED. Um I'm quite pleased where we've come. I mean there's you know there's a lot of moving parts to this. It's first time through for uh for you guys. You know I know we'll get better um even over the next month. Um, but I think we've got a really good start um, here and um, I look forward to continuing the next couple months and getting to a good

budget. Thanks. Great comments and great work, Hans. That was excellent. It's nice. Nice to sort of jump ahead and see what the next step will look like and that's what you did and it's important. Very good. Great comments. Bob, go ahead.

Thanks, Mayor. Um just once again I want to thank everyone for the tremendous amount of work they've put together um in the presentations and just ongoing with these issues. So thank you everyone. Um once again this always just seems to fall on capacity you know will uh so I I think there's a lot to think about. Um I definitely agree that um with Nancy about some prioritization because it does feel like it's just uh too much and yet all the projects that we've just gone over are all very important. Um, many of them have been put off as deferred maintenance and we really do need to get to them. Um, you know, I agree with Bob. For example, the beach is a perfect example. It's been neglected for quite some time and and we've got a lot to focus on to fix things up over there. Um, I do share Bob's concerns though with the Mission Trail uh nature preserve and starting that project. Um I am supportive of the idea of trying the 85 uh 15 and actually seeing that budget and then being able to compare uh the next time uh we have a a meeting on this um and seeing how much the CIP um would be and um oh is Nova gone. I was going to just ask if we could put Hans's um one of the charts up. Um I was just going to ask something about it. Um, basically if we could be a little bit less ambitious with this CIP. Um, wait till it goes up.

There it is. So the amount that we don't know yet, the TBD, additional revenue service, if we could figure out some calculations, if we subtracted that amount from assuming a 10 million capital expenditure and see how we could get by on that. So maybe the CIP would be something around 8.5 million rather than the 10 to just kind of get a feel for how that would lead us. But I do um support trying out at least comparing the 8515 budget. Um and um I certainly also hear what Jim Beck said and appreciate his comments. Um and once again looking at potentially if there are um uh you know staff reductions on that and just to see how that would look. Um, I like this idea of um with the additional if we did the 85 um 15 um as we saw with Hans's chart that that could bring in um potentially 2 million and then with the toot assuming um if that's approved by the voters um you know approximately 2 million and then of course the ambulance money. Um, so even if we're left with the 8.5 million for um, CIP, that's still a lot and that still would get us um, quite a bit done. So maybe if we just cut it back a bit from the 10 million. Um, so I just I think as Bob said also that we're at the start of this and so let's see more numbers, see how this works, see what the public thinks, uh, see what the rest of us on council think. Um but I'm just so grateful that we are having these discussions and the work that the um finance committee has done and the ongoing work on that because it's just so much further and so much deeper than anything that we've done previously on the council. So um I think that this is all um very positive and and definitely heading in the right direction especially for our future. Um so it's just let's take it to the next step and

and discuss it then. All right. Thank you. Um I have some a few more specific comments and then some uh well I'll start with the 8515. So guys done over there. Excellent. Um and have to separate the two of you. We can do that on the

I used to rearranging the seats again. Maybe you just well whatever. Um 8515. I'm a little skeptical mostly because of the amount of work involved in with uh having staff put together two budgets. And so as an interim perhaps we could agree that you know since we're talking about the revenue since we're basically talking about a a 5% you know 5% million and a half million eight whatever cut in revenue perhaps uh for the meeting in a couple of weeks um staff could bring back one page of one page two column chart which is you know budget category you know approximate amount of you how much money is in each bucket for the items on the left and where you would propose that we cut $1.8 million out of. Um, so rather than having you put together a full-blown budget package for two things, maybe we could take the intermediate step of seeing if that's even realistic. You know, if the council can agree on where that five where those 5% the council and the public, I would add, can agree on where those 5% are where that 5% is going to come from. And I realize that that's a significant amount of like thinking effort to put that together because there are a lot of sacred cows here. Um but you know, maybe that's a good first step rather than just going the fullblown bore of putting together two books and we can kind of see whether we really want to go down that road or not. Um the million dollars I'm I'm completely with Bob. You know, I thought um when we thinking back five years ago, I would have preferred that we had given it the money to Galpers and just paid the money down and not kept it. Um I didn't win that battle, but that that's okay. We have this $5 million. I'm fine with where it is. And I would point out that the housing element, you know, the housing element

we have in place now, I believe Brandon, requires us to establish a housing trust with a million dollars in it. So, I assume that that's going to be part of the budget. Um, since our general plan requires us to do that. So, maybe that's where that million dollars goes to. Um, a couple more just uh comments that have sort of been brought up um brought up. I'm looking at the facilities page on this five-year plan and I notice that the Piccadilli restroom which Allesandre um which Allesandre uh spoke about um I'm thinking about the million-dollar bathroom we have on Scenic which was 10 years ago. Um I'm I fully believe it's going to cost $750,000. Like I don't have any illusions that I don't have any illusions that it's going to be a $100,000 $100,000 or $200,000 project. But I uh I don't know why we just don't get started with it. Um it's clear, you know, it seems clear that we have at least a weekend need. Um you we should make a determination that if this is a project that we're going to do, um to me, you know, it's a two-year project and it's more important than uh like I don't, you know, the city hall shingles could be put off a year, the Vista Lobos EV panel could be put off a year. Um, I would rather see, you know, something to make the town a little better. Like this this this budget that we have here, you know, fixes a lot of um infrastructure things and there's not a lot that makes the town like marketkedly better. Like when I think about fixing things that you can see versus things that you can't see. Um, and you know, that bathroom maybe is a symbol that yeah, we're making the town a little better. And I would I would kind of like to see us uh I would kind of like to see us move forward um move forward move forward with that sooner rather than later since it since that's a project

that will take a couple years to go through review to go through review and everything. And then the fire system alert system upgrade, you know, it shows on this page. I don't have any idea what that is. Um, fire s fire fire station alert system upgrade $200,000. Um, I don't know what I don't really know what that is. Um, you should, you know, we need to kind of deal with that. And then Alisandre and I were talking uh really briefly over the break. Uh, $5 million is too much money for the PD um for two reasons. one um I don't remember all Sandre thinks and and I kind of remember that the highest number we got for architectural services was $4 million. Um

there's an $8 million there's a few Okay. Well, this council's never going to vote to spend $8 million on a $30 million project. So So just being realistic. That's just going to be an expense.

Oh, sure. Sure. I I agree with that. But I don't think, you know, hopefully it's not going to cost $5 million. And I think we should try to be a little bit realistic. Um real this budget, you know, we've we talked about being realistic. And I don't think $5 million is the right number. Uh to be re, you know, if we're if we're trying to be conservative, that's one thing, but we've talked a lot about being realistic. And I don't think $5 million is a realistic. And I know we have a meeting later in the week and maybe we can come back maybe Alandre and I can come back to you with a with you know well you'll be there so maybe you can take a we'll do it together

we'll all do it together so we can come back with a better number and then and then um you know obvious you know I'm not sure that the $5 million is all going to be spent this year. So, you know, if we enter into a contract like, you know, to pull a random number out, $4 million and half of it's this fiscal year and half of it's ne next fiscal year. I'm not sure that the number in this budget should be $5 million. Like, I don't know what the accounting answer to that question is, but I'm not sure that this year's budget should take a $5 million hit. um you know if it's if the if the expense is spread out over over a couple of years especially the way we start projects um yeah I'm good thanks all right thank you go ahead and put up that slide I think it's a good overlay on top of what Hans did if you combine the two so start with the doc file and then you could put up the forecast the one that says forecast. This is also a good example of how to increase staff productivity.

That's not the one. It was a doc file. I'm going to look at this. But did you say file? No, it was a doc file. Word. Yeah, I said it denova. I just think it's more pertinent to what Hans was doing.

That's that one. Slide it up if you can or scroll down. So, what I looked at the numbers and and Jamie had in there intentionally, we're not including this, this, this, this, or this. And it's sort of an optimistic view of things for sure. And this, and I'm not saying these are good realistic assumptions, but they're assumptions. It just shows you what happens. And Bob touched on this with the Kalpers, like that can go up $10 million overnight or at least in two three months if something bad happens. So we forecast over the five years 28.8 million. But if you you would assume, and this could be off. I mean, I did this this took like two minutes with Claude. This is an example of what you can do with clog. So if you take these assumptions and we found out that the cost escalation for CIP is actually about 8%. 6 to 10%. Correct. Sheree

I'm sorry your 6 to 10% was like average at eight for the cost escalation on CIP projects. Yeah. 5 to 10. Okay. So these are not unrealistic things. The number goes from 28.8 million up to 60 million. So these numbers get big fast and we found out today that the police department could go from somehow we came up with 38 million and the people on the project don't know how we got that. I'm not on the project but we heard today that it could go to 60. Right.

Things are just gotten well that's what what he said earlier. Things are getting really expensive and we also assume that there's no cost of living adjustment. We redo our labor contracts every two years. So there will be cost escalations. So maybe it's between 28.8 million and 50 or 40 to 50 million. But these numbers can go big fast and I'm just a little cautious of that when we start talking about these things. So go ahead and go to the forecast thing. I think it's important that we have a tool and this was done in two minutes. I just said make a dashboard using the staff reports fed it in and it made this with five tabs on it. Go to the forecast one. This is just an overview of budgets. Go to the what if scenarios. So click on the what if scenarios. No, this go to that one you were on forecast. Keep go to the next one.

Yeah. And then do the what if scenario tab down below. It's like the fourth tab over. Go down. No, I don't want you to go to the tabs on the top. Go one more over. One more over. And then go down to where it says what if scenarios. Up, up, up, go up. Okay. Go. Yeah. Next one.

Yeah. So, this tool and you have this tool. So, and we can add more tabs and if you want new features, you just say add a new feature. But you can see here that we can start playing. some what if games with some of these things and laying in your things. That would be great, Hans. We could lay in those so that we can start saying we have new revenue sources and I'm not I don't want to talk about revenue sources tonight, but if we have this tool, we can sit in these meetings and really come up with something that we might like and uh so I'm just putting it out there and and Brandon has this tool and he knows how to change it at this point. It's pretty easy to do. It also separate subject. It's also shows you as we get more AI integration and Brandon is working on this. There are some things that we can do to increase the productivity of our staff. So that I mean I'm not saying I want to cut 15% off but or 5% off but you can do some of what Hans was saying without losing capacity if you do this. All right. So now I'll get back into some other more serious things. the uh Piccadilly restroom. We just need value engineering. I'm happy to go look at it with you. The plans already exist. I mean, there's some things that we can do to make that project faster and I'm happy to tell you what they are because I don't think it's a 750,000, but if if the staff if council wants to spend 750,000 on that restaurant, so be it. Um I think I agree with Hans about the road projects and Jeff. I think that personally I think we should spend the $15,000 because they're going to be doing that survey. We're going to have really good data for everything in the city and I think that modeling I know that Hunts can figure this out. We could do some modeling with that that could really optimize and and there's like 10x savings if we put the right money into it over the next 10 years, 20 years. So, I'm all for spending some money to make

sure that we have a good model for our roads. And roads are visible to play to your point, Jeff. I mean, a lot of these things aren't going to be that visible, especially the design side of it. So, I think the more funds we could move over to roads and do it intelligently so we're making long-term decisions, I think that's great. um police station project. If we're going to spend $50, $60 million on a police station, we need to listen to what the woman, I don't know her name, but the woman that came in here, we need to think about this more holistically. Like, we should move this building up there with parking for all employees. We solved the problem. Everybody's in one place. Especially if you're going to make cuts, Hans. I mean, it's much more efficient to have everybody working in the same place than to have to go between two buildings. This building, I don't know how much it needs. I didn't really see the whole thing, but it probably needs a couple million dollars at least to make it liveable. I mean, it's not a particularly safe building for employees to work in. And it's sort of like the police department and the public works building, like people are crammed together and the HVAC isn't very good and so on. But if we're going to spend that kind of money, we really need to have a discussion about making the whole process more efficient and holistic. And we haven't done that. I don't feel comfortable with it. Um, Sunset Center right now, which isn't a popular thing to say, but right now we are committed to do 149 affordable units on those parking lots. And I don't feel comfortable spending any money until we know that we don't need to do that because those projects I mean I I spent a lot of time on this last year. Those projects aren't like none of that stuff is of it's not going to fail. People are going to fall down and get hurt. It's just sort of ugly. But there are a lot of ugly things in this town that we could fix. So, I I don't I don't feel comfortable spending any money on the Sunset Center property till we have a

really solid idea about what's going on with the housing element because it's we're going to pay parking lots that are going to be demoed. I also I also didn't see anything on here. I know parking isn't a popular subject with the council, but we just got a letter today from one of the hotels in town where people came. They couldn't find a place to park. They walked into the hotel and said, "I want my money back." They gave them their money back. It was a two-day stay. They left. They drove all the way here from Connecticut to come here and they left without doing anything. And the letter was not kind. Said, "You should take care of people coming here and have some parking." And that's not good. And that's happening every day whether we like it or not. So, there's nothing in here saying we're going to improve our parking situation. And that's I don't know. That's just questionable. Um, we need to understand what $4 million is going to do on the 4th Avenue pathway. And I'll find out. I think the mission trail, I agree with everything that was said here. We really need to understand that, too. That sounds like it could be even more if you get into it. It's not easy to move a river. Um, sand ramp. I don't know. I've spent a lot of time on city pathway. It's It's not easy. That is just not an easy project. And we could do even if we spend $3 million, it could still have a huge storm come in and knock the whole thing out. And just like with some of the other things I mentioned, I think we need to take a holistic look at all of that. And uh and I will children's library. I didn't even know that was a problem. Is it?

I know, but I've never seen what the problem is. I'm just going with

I understand, but it's it's a it's a $750,000 project now that you spec it out. And thank you for doing that. So, that's my comments. Oh, one other thing. We're not going to talk about revenue sources tonight, but this last week I I had to get involved with all the Espironza projects because they were all stalled and that was causing a problem with the pit and so on. and we at least are making some baby steps to get that moving. But just just to put this out there, those three projects from what I'm seeing are about $80 million in projects. I mean, it's on the scale of city projects, and that's going to increase property taxes. There's retail space involved. That's going to increase sales taxes. it's going to um create housing opportunities for people and so on. So part of improving customer service is getting those kinds of projects done faster, getting them through the system because the sooner we do the more we get out of all the ancillary revenues that are coming in from those. So it's not just increasing productivity so people get their answers fast. There's real money involved in making sure those projects happen. All right. That's all I have.

Brandon, you want to close this out?

So, I the one sort of hanger on question for me, I think we got really good direction on sort of the projects and and where we need to to come back with some more detail. The one thing I want to just kind of go around the room on is the 8515 9010 thing. So, we started off with a proposal by a couple council members. Let's do the 8515 and the 9010. And then it turned into a conversation about possibly let's do a modified version of 8515. And it's more of a list of the of the areas and the costs and where we think where staff thinks we could make some changes. And I saw a couple heads going up and down, but I just want to get the council's consensus direction on what we should do when we come back with the budget.

I I didn't weigh in on it. I'm I'm absolutely supportive of of exploring five more% reduction in um operating costs um because I want to see what it looks like and um I don't know that what Jeff asked for versus what Hans asked for is all that different. I mean, it it starts with a list um of from from day one, what I'd asked Chip and now you to do was um I I just want to know that you've challenged your department heads to do better um and that they take it on take on the responsib I said I'm happy because I think it's happening. So, let's just see what the the outcome was. Maybe we talk about it tomorrow and or or the next time we're in our financial stewardship group kick it around and bring something back. Yeah.

Um for city council, but I don't know how that it has to be a ton of work.

Yeah. I would just say I don't think I don't know what was in your mind's eye, but in my mind's eye was never like that you would create like a full budget book for each of these. Um, you know, I guess the the challenge is you're going to come back, I guess thinking it through, you're going to come back in May and usually what you do is you present a budget book, right? And so that does feel like excessively burdensome like all the pros. What I really care about is I think what Jeff was saying which is basically like show me the numbers, show me a spreadsheet, show me, you know, in the 8515 scenario in public works here are the ways that you would you know make those make those reductions like what what have you know I think that you can do all that um without the full production. Um,

I agree. You know, the I'm trying to think about how you would deal with that because technically usually what you do is you do come back with a full-on Yeah. budget book with all the pros and I Let us wrestle with how to do it. I just I mostly want to hear from you all that that's it sounds like at least that's three that want to see something like that. So for me that's that's direction. I'm for maximum like analytical value for us without duplication of effort for you. Right. I I support what Hans and Bob just said. Okay. I mean, basically what we're saying is we want to know that you're operating as efficiently as you can. I I don't particularly like the idea of putting a hammer on your head and say cut it. Show us cut 5%. Yeah.

I just I'd like to see some what if whatifing about Yeah. what it could look like. But I don't like the idea of changing the giving cutting another 5% right away. Okay. We already did the 90%. I I understand. and I got the direction and you know we've talked about it downstairs. I think that you know being a good city manager means understanding where those those potential areas are and maybe not even for this budget situation but if you know god forbid we have another pandemic or some other disaster happens like I should be prepared for quick answers. So it's it's useful for me too as a as the leader here. So I got that got that direction. Thank you.

What else? I'm good. Anything else? No, I got everything I needed. Um, you know, Ken, Char, you feel good about what we got for to go and do like a refresh now on the CIP? I think we know where uh the questions are that we need answered. Jamie, I'm just going to look at everybody. Do you feel like we got good direction, Marissa? Okay, you're good. Okay. And and now, if we could before we leave, could you give us direction on what we can and can't do without coming to you in terms of going out in the field and

Yeah. Please, please don't please don't invite our staff to go walk around in project without involving me in that conversation. That that would be it would be a little bit inappropriate for a council member to be taking a staff member out and talking about a project and saying what they do and don't want. Like involve me and I'll help you navigate that conversation at the level you want to. I've been very good at not doing that, but I appreciate you continuing to be I'm going to do it. So short email saying I'd like to do this is enough. You can text me, call me, walk into my office, email me. Okay. and give you my home address if you want. I'm hoping that all of us are going to go do this so we can You guys all know how to get a hold of me. Okay. All right. Okay. Very good. Anything else before we close it out? You're good.

All right. Meeting stands adjourned at 8:27.