Fiscal Sustainability Ad Hoc Committee - Regular Meeting

Alright, everyone. Thank you for being here. We will, call this meeting to order. Martin, would you like to take the hold call?

Committee Member Bischala?

Present.

Committee Member Duong? Here.

Committee Member Smith?

Committee member Nguyen?

Here.

And committee member Wilson? Present.

Okay. So we do have four of five, committee members present, with one being virtual. So now our next order of business is to select a chair and a vice chair. So with that, any of the committee members can make a nomination, and I'll make him take a roll call to vote.

I'd like to nominate Lisa Wozab as the chair.

Did you know this number?

Is that made a second?

Yes. Do

you accept that? I the nomination. I am junior based appointee. Do we have appointees with my ex nephews that we've covered as physician? I'm happy to do vice chair. Although, I appreciate the nomination, anyway. Did you hear that?

Yeah.

Yeah. Hear it.

Okay. I think it's totally set.

Let me put it so it's longer.

We can be a little more casual here than probably a normal council meeting, for example. Would you without a second, would you still accept the nomination?

Mr. Grantham is familiar with my leadership style. Do do you recommend that? I I would have no issue. I

with some scaffolding and some training, I guess I accept.

So let's let's take a vote on that. Maya, can you do a roll call vote to see if there's consensus on Lisa Lozab as the chair?

We're just with the council member. Yes. Be able to get that in touch. Member Buscallo?

Yes.

Committee member Duong? Yes. And committee member Smith is absent. So committee member one?

Aye.

And committee member was out.

I I I

Do

we wanna leave it as a just the chair for right now, or do we wanna make a nomination for a vice chair? Okay.

I can.

Please. You are prepared. I I

ask that we please have a vice chair.

K. Sure. And do we have a nomination?

Like to nominate Eric Nguyen as vice chair.

Okay.

You second on that? I'll second it.

Okay.

Alright. Let's take a roll. We've all voted, Molly.

Okay. Committee member Bischala?

Yes.

Committee member Duong? Yes. Committee member Wenz? Aye. And committee member or Chair Bozak? Yes. We have a vice chair.

Remember, now that we have the chair, technically, the agenda is all yours, submitted through, next listed, with the public comments.

Okay. So Please bear with me. This is a new position for me. I'd like to open up a.

I just We don't have

don't have scripts.

We don't have, like, people, you know, signing or anything like that. So I would say, we're not in a better system. If you would like to speak, just raise your hand, and the chair will call you in return. This is only on nonagendized items. Correct? Believe it's on agenda items, is it not?

It's on, matters not appearing on the agenda for general public

comment. That way. Okay. Yep.

Your name, please?

Elijah Manicero, District 5. Okay. I'm not sure if there's anyone here from the city attorney's office, but I wanted to ask about, what when and how many as, that committee is supposed to remain limited in time and scope. And this committee was formed with the express purpose of discussing the budget of twenty five point six, and now it has been reopened again to discuss the budget for 2627. So, I think that this is some issue that shouldn't be addressed because ad hoc committees are exempt from certain disclosure requirements that standard committees are required to make.

Quickly next, I wanted to state my dissatisfaction with the backyard major from a standing contributor is on a body to advise the city on, budget decisions, especially when he can personally benefit from, those decisions. Last year, he was on, this exact committee, and he advocated for a business improvement district in downtown, and he expressly advocated for bars and clubs to pay more. He owns properties in downtown. He does not lease to bars and clubs, so this would benefit his properties and his businesses. And I think that it's inappropriate for him to be appointed, but I think it's more inappropriate with the fact that he made those recommendations.

And, yeah, that's the end of my comments, versus the actual question.

Hi. My name is Steven Jerry. I'm on the Transportation and Circulation Commission, but I'm speaking just as a private resident tonight. I'm also concerned, and just sort of wanted to voice my recommendation to this board, to this council that you, you know, sort of take prudence with one of your, commission members, Mr. Tony Guichala, who, runs a political action committee at Fullerton called Fullerton for Taxpayers Reform.

And he has spent hundreds of thousands of dollars over the last several decades shaping this council, shaping the situation that we're in right now, shaping the fact that we have to have a budget sustain or fiscal sustainability commission and, committee and our committee. You know, he has shaped the fact that we, we don't have increasing revenues and have enough revenue, and and has also shaped much of the council leadership. And therefore, I do think it is slightly inappropriate that someone that has such a large financial, stake in the elections of the city is sitting on such an important commission, particularly when there are issues to easily discuss like they are today. And, you know, I would just caution against the, the motives of of, your fellow commissioner and, and, you know, knowing that his PAC is failed and sort of personal thing with.

Hi. My name is Sylvia Carvalho. I actually have some similar questions to that of the first speaker. A little confused by what exactly the ad hoc ad hoc committee is under the California Brown Act. The ad hoc committee is usually a smaller body or a sub body of a legislative body. Legislative bodies mean a city council or a commission. And so I'm very confused to, see the agenda and see names on the agenda for the lives of the law are not a sub body of a legislative body. So trying to understand how this body was formed, what its purpose is for, and how we actually came about to have this meeting with Sydney.

Joshua Bergstein, 55. I do have pushback on the rhetoric from the, the part the other part of the person's out of the aisle.

I know a couple of commissioners. I know mister Bischalla, and he has a yeah. He has a stake in the city because his family's been here for a long time. He got. Has tenants that will be negatively impacted by the physical instability that this city and in council have had for a very long time. It is funny to see people who work for the partisan rag of being fervor. They're being mad that their side isn't getting the representation that they want. So the reality is that when you have something to lose, you do care. As for the nonfiction about the Business improvement district, the bars that have been pushing for that for more than a decade. I've actually talked to them for a very long time about it.

So it's cute when people don't actually know that history or the reality of a going to the city, like, you will find and try to invigor somebody that's just on the other side of the pharmacy that I'd like to point out you wanted to get really nitpicky about. Mr. Kuntala also donated to their favorite planet, the Mas Azara, back then in 2018. So you want your freedom to get it. We die, but you always pay your way beneficial to their parts of the rhetoric. So I'm glad we have somebody on the commission who actually has faith in the things. Thank you.

We

have two ones now. Okay?

Okay.

I suppose I mean, I to to throw it in here, I I really do find it kind of shocking that that Michelle really is on this. I mean, think therefore, to someone with with this kind of state and starting this kind of money around in the city, then we shouldn't be here. And I feel sad. I honestly could have said it for you that, you know, who's now the chair of this community. It's it's it's a it's a tough thing to be chair of a committee where really somebody else is running, and it's so obvious.

It's a minute. I've seen this I've seen this play out before, twice, you know, for the redistributing, you know, the committee. It was absurd. It was an absurd meeting. We had we had about a 100 people there one after another advocating system that was picked by, you know, meetings and so forth. And Bashallah came in, and then the commissioners just, I mean, literally dance over who can give more praise to Bashallah. You know, it it it was it was he just you know, so I think that he shouldn't be

on the

committee. And I would suggest if you can run, because this is not a good place to be.

Thank you. Yep. Who

are you? Two on Zoom?

Yes.

David Zanger?

Yeah. That's me.

Yeah. That's me. I've been watching this, wasted the first fifteen minutes from political partisans who try to think that they're gonna get someplace by complaining about the membership of the committee. The committee is here to figure out what the hell to do about the City Of Fullerton budget. That's what it's here for. And if you don't like the membership of the committee, that's too bad. And we know why you're there, and it doesn't make any difference. You people have to start thinking about different ways of doing business in the city of Fullerton. And whether or not there's gonna be a sales task or not is is up for debate. But thinking about things in the same old way is not gonna work for you guys anymore.

And certainly complaining about one of the commissioners is a total waste of time. Why don't you come up with some ideas besides just a general sales task that failed four years ago because it was so badly written and so even though it's being advertised by by the city. There are lots of options you can explore. None of them are very good, but there are plenty of options. And Tony brought up one about a business Improvement District.

And then that and first speaker who doesn't know his navel from left field talks about how this is not gonna this is good for Tony somehow. Everyone knows it's the bars downtown that are causing the big cost deficit downtown. It's the people with the saloons and the nightclubs. It's not the people that have small businesses or coffee shops. Right? So, you know, let's throw this partisan crapola out and figure out what you're going to do. And if you you know? And I I I implore the members of this committee to come up with your own ideas. Because if you're waiting to be told something by somebody else, you're gonna be waiting a long

time. Thank you. Wait for what? Yes. We do.

Dominic Moonheart should be unmuted. You have three minutes.

Oh, there. Dominic?

Hello? There you go. Hi. Alright. Hello. Okay. Well, you guys are there's some Internet issue going on. I don't know if it's on my end or it's on your end. But yeah. So just let me know when the timer starts.

Go ahead.

You're good to go.

Alright. Thank you. So, obviously, there's been some public comments discussing Tony Buscallo. Obviously, Tony Buscallo has had ethical problems well within the city of Fullerton. Here's here's here's the real situation. The real situation is that the city and excuse my summer mouth, but this city isn't a shit show right now with its budget.

Okay?

This city has the roads are just as effed up as possible. Obviously, we saw an athlete pass away by the name of Lorne Turner. We saw an athlete pass away on the city's dangerous streets. So my question is this, is what is this commission going to do about the deficit and then that that error, mainly that error, which I'll talk about, later along the line when you guys discuss the budget. Okay.

What do you what what is the city gonna do? Because if we're going down this exact same raft pole of the debt just getting worse and worse and it's gotten worse, this city will face the disincorporation one day. And when that day comes, oh, boy. Who knows who's gonna carve up Fullerton or who knows what's gonna happen after disincorporation? There's only been six cities that have been disincorporated in the in the history of this state, and Fullerton is right up there. Second place. First place, the city of Vernon. So figure this crap out or you can lose your city status or lose your fire department or police department because we were really close to losing that because of the deficit. So y'all better fix it. Alright.

Stop this political bullshit. Okay, Tony? Stop all this crap as well you're the one who started this mess to begin with. So that's all I have. Thank you.

There's a query.

Yeah. No.

No. It's

That's just one comment. I maybe push for a decorum when

public commenters can be making comments to you,

but they should not be making comments on the other people in the audience who are not part of the commission.

So, yeah,

usually inappropriate according to the auditor's,

any sort if they're calling for a commissioner or.

I'm chasing the bill.

Sorry. Yeah. Thanks a lot, Jim.

Do you

enjoy me anyway? It's just it's difficult to control public comments, particularly one that are coming from online, but I do appreciate

your point. So we'll see

what we can do here.

And time goes on. So

Do we wanna bring this back to discussion?

I would. So and we're if we're done with public comments, I'd like to, to get into the first agenda item, which will be the, the Fullerton budget overview. The if you look at the agenda, we do have three items, Fullerton budget overview, city infrastructure conditions and funding, and then review of committee's recommendations from 04/10/2025, the ad hoc committee as it was convened ban. Once we go through each item, then we'll provide opportunity for public comment after each item, but you would see on a normal agenda. So that that's how we'll we'll go through it.

So if it's if it pleases for chair, I will begin.

Yes, please.

Okay. Alright. Good evening, everyone. I'm Eddie Manfro, the, city manager. Tonight, I'm gonna walk through a high level overview of the city's budget and current financial position.

The goal is to provide context, establish a shared understanding of where the city stands financially, and help frame the discussion items that will follow. The purpose of this presentation tonight is to make sure we are all starting, from the same place. Tonight's discussion was not meant to cover every detail of the city's budget. Instead, it is intended to provide a common framework for understanding the city's revenue structure, the current status of the general fund, and the key factors that have influenced the city's financial position. First, I'll explain what the general fund is and why it matters, and then I'll walk through the city's largest revenue sources, primarily property tax and sales tax, and explain some of the structural constraints, associated with those sources.

From there, I'll shift to fund balance, including how it increased in prior years, why it has declined more recently, and what the major drivers were. Fiscal year twenty five, twenty six budget overview. At a high level, the city's total budget for fiscal year twenty five, twenty six is approximately $270,700,000 across all funds. This includes the general fund, enterprise funds such as water and sewer, special revenue funds like gas tax and grants and the capital improvement program. While this reflects the city's full financial picture, today's discussion will primarily focus on the general fund as it is the fund most directly tied to ongoing operations and fiscal sustainability.

For today, the emphasis will be on the revenue side, how the city generates revenue and the constraints associated with those sources. At our next meeting, we will shift the focus to expenditures, including service levels and potential cost containment strategies to address the structural and budget gap. What is the general fund? The general fund is the city's main operating account that supports core services that residents rely on every day, including police, fire, public works, parks, and library services. It is also the most flexible fund the city has.

That flexibility is important because it allows the city to support core municipal operations and respond to changing needs. But it also means the general fund is the first place where structural imbalances show up when ongoing revenues do not keep pace with ongoing expenditures. So when we talk about the city's long term financial sustainability, we're usually talking about the condition of the general fund. So what goes into the general fund? General fund revenues total approximately $137,700,000.

The majority of these revenues come from two main sources, property tax and sales tax, which together make up nearly 70% of the total. The remaining portion is made up of charges for service, other taxes, and smaller revenue categories. That matters because it means the city's financial condition is heavily tied to those revenue streams. If either one slows down or if they do not grow fast enough to keep pace with expenditures, the general fund feels that pressure. So property tax.

Property tax is the city's largest revenue source, totaling approximately $62,700,000 annually or about 46 percent of the general fund revenues. This revenue is generally one of the city's most stable major sources because it is tied to assessed property value and tends to grow over time. In California, with Proposition 13, that growth is capped at 2% annually unless the property is sold and or reassessed. Fullerton also benefits from having a diverse property base, including residential, commercial, and industrial properties. Properties like universities, hospitals, and schools, however, are tax exempt.

They still require city services but do not contribute to the tax base. At the same time, it is important to understand that the city does not receive the full amount of property tax that is paid by the residents within the city. This is a detailed chart that we like to show the property tax, distribution. For every $100 in property tax collected, the city receives approximately $15.64. The remainder goes to schools and other agencies.

So while property tax is a major revenue source, that's a shared revenue source, and the city's share is limited. So you can see it again. City of Fullerton share for $100.15 dollars 64¢. The state's $24.05. Local school districts, $46.67.

Academy, $6.07. Another special districts, $7.57. Sales tax, which is, again, the second largest of the city's revenue sources. Sales tax is applied to retail purchases of goods and certain services, and it plays a key role in funding for city operations in Fullerton. The sales tax generates approximately 31,000,000 annually, which represents about 23% of the general fund.

This revenue is supported by a diverse mix of businesses across the city. On the right, you can see a list of some of the city's largest sales tax generators. Important to note, this is shown in alphabetical order. This is not, in order of actual revenues provided. These businesses generally fall into three broad categories, retail and big box stores, auto and fuel related businesses, and lastly, industrial manufacturer and supplier based businesses.

Together, these categories reflect the diversity of Fullerton's local economy, which helps provide stability in sales tax revenue. At the same time, the amount of revenue the city receives is directly tied to the level of economic activity occurring within the city, which is something we'll explore further in the next slides. However, even with strong local activity, city only receives a small portion of the total sales tax collected, and that's what we'll walk through next. Just another thought, the sales tax is obviously much more sensitive to the overall performance of the economy than in our property taxes. So you see it much more up and down depending on how things go, with sales tax.

So how sales tax works. For a $100 purchase, approximately $7.7.75 in sales tax is collected. Of that amount, the city receives $1 with the remaining $6.75 going to the state, county, and other agencies. This is important because it shows that even though sales tax is one of the city's largest revenue sources, the city again only receives a relatively small share of the total tax paid by the customer. Although sales tax matters a great deal to the general fund, It is still a little bit local share of a broader tax structure.

Little more on the sales tax. Not everything that is sold is taxed. So what is not, subject to the sales tax, because this is important to understand the limitations of the revenue source. In California, basic groceries, items you buy at the store to prepare at home are generally not taxed. Prescription medications are also not taxed.

A simple way to think about this with as far as food is the difference between raw food and prepared food. For example, if you buy raw chicken at the store, it is not taxed. If you buy a prepared rotisserie chicken, something that's ready to eat, that item is subject to sales tax. Same applies to restaurant meals and takeout. You can see on the slide, on the screen just a few examples of what's taxed, what's not taxed.

So, again, only certain types of spending actually generates sales tax revenue for the city. And, groceries are not taxable, which limits how much sales tax revenue so we can generate. A little bit about online sales. When it comes to online sales, the way sales tax is allocated becomes more complex. There are three locations that can come into play.

First is the seller or retailer location, first is the seller or retailer location where the business is based. Second and most important is the fulfillment center. This is where the order is processed and shipped, and it is typically treated as the place of sale for tax purposes. Third is a distribution center, which is used for storage and logistics. These facilities generally do not determine where tax is allocated.

As a result, for today's sales tax generally follows where the transaction is fulfilled, not necessarily where the buyer lives. This is important because it affects how well local economic activity translates into local revenue. When purchases are made in the store, there is a much more direct connection between the local economy and city revenue. With online sales, that connection can be weaker. Depending on where the order is fulfilled, the city may not receive the base sales tax directly.

That means the city can have stronghold of buying activity but still see less direct local revenue that people might expect. So a little bit about a local sales tax measure. So the local sales tax measure works differently than the base, sales tax that the city currently receives. The base sales tax generally follows the business or the fulfillment location. A local sales tax, by contrast, generally follows the customer, meaning it is based on where the purchase is delivered.

So a Fullerton resident makes an online purchase and is delivered to a Fullerton address, the city would receive that local sales tax. That distinction is important because it means a local measure better aligns city revenue with the actual consumer activity occurring in the community, including online shopping. K. This slide adds a little more context about comparing not just sales tax rates, but also actual revenue and overall general fund size across Fullerton and several nearby cities. Mentioned earlier, the base sales tax rate of 7.75% is consistent across most cities in Orange County, where cities begin to differ is through local voter approved measures and the strength of their local economies.

Fullerton currently remains at the base rate of 7.75% and generally, and generates approximately 31,000,000 annually in sales tax revenue. City's general fund budget is approximately 138,000,000. By comparison, Buena Park, La Habra, and Placentia each have adopted a 1% local sales tax measure, bringing their total rate to 8.75%. That additional percentage allows those cities to capture more revenue from each taxable sale. Local sales tax measures, however, are only one part of the equation.

For example, Brea does not have a local sales tax measure that generates more sales tax revenue than Fullerton due to its strong retail base, primarily from Brea Mall. Anaheim is another example. While it also remains at the base rate, it general generates significantly higher revenue due to its tourism economy and major commercial activities that translates into a much larger larger general fund overall. Key takeaway here is that while sales tax rates matter, the biggest driver of revenue is economic activity, how much retail tourism and spending is happening within the city. Those differences in revenue directly translate into differences in general fund size, which ultimately affects the city's ability to fund services, maintain infrastructure, and respond to community needs.

Different revenue structures lead to different budget capacity, and that directly impacts if cities can deliver. Another type of tax, fancy and occupancy tax, also called TOT, that becomes Fed tax, hotel tax. TOT is 10% tax applied to hotel and motel stays as well as short term rentals such as Airbnb and VRBO for stays that are less than thirty days. In Fullerton, the 10% TOT generates approximately three to three point four million dollars annually. When we break that down further, the majority of TOT revenue over 90% depends from traditional hotels and motels, which generate 2.9 to 3,150,000.00 annually.

Short term rentals contribute a smaller share, generally about 230,000 to $340,000 a year or roughly 8% to 10% of total TOT revenues. The city benefits from tourism and visitor activity, including our proximity to regional attractions, theme parks, and local colleges and universities, which help support demand for overnight stays. However, I think it's obvious that our, our visitor tourism activity is nowhere near what some nearby cities experience. So when we think about how TOT revenue could grow over time, there are a few potential pathways. One option is new hotel development that can expand the city's long term revenue base, but it typically requires significant time, private investment and favorable market conditions.

It is not something that can be realized quickly. Another option is through short term rentals. Because they utilize existing housing stock, they can generate additional revenues without requiring new development. City currently permits up to 100 short term rental units, and that segment contributes a smaller but growing share of TOT revenue. As part of future policy discussions, this body or the city council could consider adjustments to the current cap on permitted short term rentals depending on community priorities and policy direction.

A third option would be adjusting the TOT rate itself. However, that is not something the city can do on its own. Any increase to the TOT rate would require voter approval through a ballot measure. So while there are ways that TOT revenue can grow, each of these options comes with its own considerations and trade offs. K.

This chart kinda shows us, some recent trends in our, total general fund balance. You'll see it rises, and then it starts to fall. So if you notice the fund balance increased in prior years before declining more recently, That earlier growth was driven primarily by two factors. First, the city received onetime federal funding through the American Rescue Plan Act or ARPA in 2021. Those funds provided temporary financial support and helped stabilize the city's finances during that period.

Second, the city experienced significantly higher vacancy levels during that period. Those vacancies resulted in lower personnel costs and lower overall expenditures than would have existed under normal staffing levels. So what we saw during that period was a combination of onetime revenue and temporarily lower costs. More recently, those conditions have changed. One time federal support is not ongoing.

Vacancy levels have declined, and positions have been filled, normalizing the city's costs of operation. The city also had to use fund balance to support ongoing operations in the face of operating deficits. The next slide provides a few more details. This slide shows the impact of vacancies, at its core, and Citi is a service provider. Services residents rely on police, fire, streets, street maintenance, parks, code enforcement.

It's it's all delivered by people. Because of that, a significant portion of the city's operating costs are personnel related. These are not optional costs. They are directly tied to providing essential services to the community. As shown here, the city did experience significantly higher vacancy rates in earlier years with vacancy levels reaching almost 25% at one point.

And then a large number of positions were unfilled across departments. As a result, personnel costs were lower than they would have been under normal staffing levels, which temporarily reduced overall expenditure. I will add that that also meant lower service levels during that period of time. Over time, those vacancy levels declined as positions were filled, and the city moved closer to normal staffing. As that happened, personnel costs increased accordingly and expenditures began to reflect the true cost of delivering services.

So when we look back at the growth and the fund balance during that period, it's important to understand that it was driven not only by onetime funding like ARPA, but also by temporarily lower costs due to high vacancy levels. Those conditions are not sustainable long term, and they are not what we are seeing today.

Okay.

This next slide is particularly important, based on information that we presented at the last, city council meeting of March 17 where we showed

a significant update in our fund balance. So with that, I'm gonna turn it over to our interim director of administrative services, Steven Avalos. Thanks, Debbie. Following the March 17 city council meeting, staff went back and reviewed the original fiscal year of 2425 budget materials that was presented at budget adoption. So this slide brings all the major pieces together and show how shows how we arrived at the year year end fund balance.

At the time of budget adoption for fiscal year twenty four twenty five, the city had approximately 10,100,000 in unassigned fund balance, and you'll see that in the first column. The fiscal year twenty four, twenty five adopted budget included a planning operating deficit of 9,400,000.0, and that deficit was expected to be covered with unassigned fund balance. As the fiscal year progressed, the actual operating deficit came in lower at approximately $5,700,000 That improvement reflected the city's cost containment efforts initiated during the year as well as active financial management throughout the year. In addition to the operating result, there was a $2,900,000 prior period accounting adjustment, which we just discussed. There is also approximately $2,700,000 in reclassification from unassigned fund balance into assigned or committed categories to more accurately reflect the funds that were tied to those specific purposes.

When taken together, these elements resulted in the full utilization of unassigned fund balance along with an additional 1,200,000.0 use of contingency reserves to close out the fiscal year. So what we are seeing at year end is the combined effect of the adopted budget strategy, improved operating performance, the accounting, correction, and the reclassification of certain funds.

Now back to you.

Thanks, Steve. And just going back, we that $19,800,000 fund balance to end 2425, that now becomes our starting position for the updated fiscal year twenty fivetwenty six budget. So just to make that clear. So as we look ahead to the twenty sixtwenty seven fiscal year, current budget baseline shows a projected budget gap of approximately $13,700,000 if current service levels are maintained and no other changes were made. Based on the current outlook, reserve levels could decline to approximately 2% if no corrective action is taken.

This slide is intended to frame the broader discussion. So I do wanna make a point. The $13,700,000, that is what staff is looking at right now in late March while we're still going through budget production. Obviously, our goal is to knock that number down, hopefully significantly. And that is part of our budget process, which is to look at ways that we can reduce expenditures, possibly come up with revenue enhancement opportunities, or look to just see if there are sources of funds within existing reserves that could somehow be, better realized.

So it is not it is not the ending position of our budget, which is yet to be So just wanna make that better. Next. Well, we still need to do public comment. So that's the, that's the basic budget presentation for tonight. So this would be an appropriate time to address public comments on item number one of the agenda.

Eddie, typically, we'll have comments or questions from committee members Mhmm. Then go public comment

Yeah. And then you can have additional discussion. Yes. Question? Question?

On the, on the TOT tax, just assuming that's gonna be a vastly different calculation for hotels and for short term rentals. Would my assumption be correct that those two could be modified independently?

Like, having a separate TOT rate for a hotel versus short term rental? Yeah. Possibly. It depends on how the TOT measure is written. Like, if the ballot if there was a ballot measure, obviously, there's legal language that goes into it. If that clarifies or specifies it's only for one of the two, you can make that distinction. Typically, it's one rate across the board.

Yeah. Okay. So We'll research that to see if it is possible to have

different rates for different purposes.

That would be helpful to find out what I mean, bring cities with TOT packs. Okay. It's just a flat rate. Any question?

I guess for the short term rental, it was mentioned that we capped at a 100. Do we look in without more than a 100 interested applications for short term rentals?

Yes.

Can everybody hear

Currently, we have a

a moratorium. Speak up because they are not being able to hear you. I can hear you just fine, but

people live out too. So my question was for the short term rentals, we're capped at a 100. Do we have more than a 100 application interests? And the answer is yes.

How many more?

I don't have that number. I just know we've reached the cap, and we get inquiries all the time.

And right now, there's a moratorium. Mhmm.

Yeah.

Our online member does our online member have any questions?

Committee member Bischala, do you have questions from the presentation?

Let me unmute myself.

We can hear you.

Hear me? Okay. Great. Okay. I'm not sure about questions, but I have some comments.

I don't know if this is the appropriate time to just make some general comments. Or I I guess I could frame some of these comments into a question perhaps. Currently, we have a a contract that is being negotiated with a a very large contract worth lots of money with a trash trash haulers. You know, many trash haulers have submitted proposals to to work to, you know, give us a a good bid. I'm just kinda curious as a comment, I guess, perhaps a question is, like, if it if it was up to me, you know, if I was negotiating a contract, a large contract with somebody, and I needed some money in the interim to kinda get my business or get my priorities in order, I would I would go to that contractor that I was thinking about entering into a contract with, and I would say, hey.

You know, kinda short on some cash now. You know, would you be willing to make the city of Fullerton a $10,000,000 loan, you know, at interest at a at a fair interest rate? I mean, not super crazy, but, you know, not usually. It's something fair. That they might say, yeah. Yeah. We'll make that loan. So just just thinking outside the box, you know, these contracts don't come up every now and then. I mean, they come up, like, maybe every ten years. You know?

So this might be a good time to work that into the negotiations with the top three or the well, when you when you get it down, you know, get down to the final three or the final five or whatever. Just, I guess, number one, a comment, a suggestion, and it you know, like, just as as an outsider looking in, I'm I'm trying to help the city of Fullerton, trying to do my best to use all the, you know, the tools that I have that I've been using in my life where, you know, you need some money, you go to the bank, you you borrow the money, you you pay interest, and you pay that loan back when you know, as as you get your projects completed, as you get things coming in, that's just one one item. Another item is, you know, getting back to the bid, and I don't remember who said it earlier that I I'm doing the bid because I want money, money, whoever that bozo was. But, anyways so, you know, Downtown Fullerton has has kind of evolved in the last twenty years, and I've I've seen it happen, maybe twenty five.

And and we've gone to we've gone from what was, you know, antique

Committee member Bufallo?

Yes.

The the recommendations from the committee from the previous meeting are a separate discussion item later in the presentation.

Okay. Is is that bid still on the table?

It's in the presentation.

Oh, okay. Thank you so much. Yeah. Okay. I I won't talk about that then. The other one is a comment question. I don't know how many people in this room were working for the city of Fullerton when we had a redevelopment agency, maybe a handful. But for those that weren't and those that don't know what redevelopment did back in the day is redevelopment agencies, Fullerton, and others, they used to make loans. They made low interest. Actually, they made no interest loans.

Zero interest. So if they you know, it was the whole idea was to was to help the community out of its situation of blight because we determined that we determined that the area was blighted. That's why we needed redevelopment. So the redevelopment funds were siphoned off. The general fund didn't get the money. The schools didn't get the money. The state just was you know, it was a separate entity called redevelopment. Well, I'm just you know, I I don't know how many of these loans that were made during that period of time. Twenty, thirty years, forty years. I don't know how long it was that that we had a redevelopment agency.

And I'm just kinda curious about how much money is out there. No interest, zero interest on on properties that are now not blighted. They've been they use the money to make improvements. And now buildings are leased. Everybody's happy.

But the Fullerton redevelopment agency, which is now called the successor agency, which is still tied to the Fullerton budget, I believe, in some way. I was kinda curious how much of this money is outstanding from redevelopment. And if it, you know, if it was made whole, if it could be made whole, I I I have ideas of how to make it whole. How much of that percentage would gets you know, would would stay in Fullerton versus go to the county, the schools, state? That's just a comment. Yeah. That's that's it. Thank you so much.

I do have a question. The local measures that have been put in place and did look like based on the chart in Buena Park and the Procensia, about when was that put into place? Was that Can you say it louder? Oh, sorry. Hold on. Yeah. So I was on the chart, there was local tax measures that I believe were just and correct me if I'm wrong. I wrote down Buena Park and Placentia. I don't know if it was in another city as well. I'm curious as to when those were put into effect. Is that recently? How long have they had? When was that? When was that voucher, or when was that?

So Sancho was 2018. 2018. Buena Park was in 2024, and La Habra had a half cent, I believe, or 75¢. And they have now gone up to a 1¢ per as of 2024.

Thank you.

Yeah. There was a was a handful of cities there in 2018.

Yeah. It seems to be.

Any other questions or comments from the committee?

Anyone who got a public comment? Yes. Sasuke, board team observer. And I just wanted to know what qualifies as a short term rental. Why is it capped at 100?

And are we thinking about changing that? I know there's lots of people who don't like short term rentals in the neighborhoods that might bulk rent because of wild parties or disrespect for, you know, this the neighborhoods and stuff. Dunlap said something about he was all four of them until one moved across the street at one time. Mhmm. But I think it was him.

Don't quote me on that. So I just wanted to know that. And, also, I lived in a town where there was a small business accelerator that helped businesses. It it's like the SBA, but it's more for us to kind of try to scope out young businesses that might wanna come be up and coming in the area? And, also, why is it that the city maybe the city doesn't have any ordinance downtown as far as the what it looks like.

I know that Moe's is now, you know, a computer room something or other. So it has but it has a whole ton of beautiful street front windows that are just nothing. It looks like you know? They they're not even keeping up with their awnings. One of them's blowing down.

Ray's, I don't know what they do, architecture or something, I think, has beautiful windows, but it's not it's not retail oriented. It's not you know? So we're missing a whole bunch of retail areas in that whole downtown. Not that downtown is the central place where we make all the money, but it is what draws people to unity. And I think if it's not appealing to come down here, unless you want a bar hop or restaurant hop.

I don't know if you can do that. You know, the we're not we're not accentuating our retail availability, it seems to me. So

that's all I have

to say.

Uh-huh.

I just wanted to start by saying that I hope this committee prioritizes voices who live in this city. Everyone at this table, I think, lives in Fullerton. And so I wanna make sure that, anyone who lives in neighboring cities like Anaheim or other cities that, they take a step back from voting voices since we are the ones who have a vested interest in the decisions being made here. And I want my committee members to be people who have a vested interest in, the decisions that are being made. What I don't want is I don't want rent seekers.

And I believe that there are people who are have a long history of the pattern of behavior that looks like rent seeking. So in terms of our budget, I had a question regarding the unassigned funds. The unassigned funds were off by 2,700,000.0 about, and there was a huge jump in downtown parking and general plan adoption. I would like to know why the downtown parking, that was a resolution that came into place in 2019. Why was there such a jump this year?

And, it was not a cost in the previous year. And the general plan, I would also like to know if that is just the open space element or if that is another, something else that seems to

be used by cost.

In terms of the waste contract, I think it needs to be put on the record that, Valley Vista Services made a donation of about 10 to $20,000 to Tony Buchal's PAC. So I think that, that is a concern worth raising. Is, again, an issue with having someone with so many vested personal interests, financial interests, making decisions for our city. I don't think that anyone should be using public policy to, do favors for friends or people who have given them money. In terms of the TOT tax, the TOT tax is not very much money.

I mean, right now, it's only giving up $2,000,000, but that's not really enough. We need a sales tax, and we can't do two dedicated sales tax. This was something that was proposed last time, and it excuse my bluntness, but it's it's a stupid idea. They both require two thirds of they require two thirds voter approval. You put them both on the same ballot. You're gonna split the vote for each of them. It's not going to pass. You have to do a child tax. The percentage doesn't matter. What matters is that it's a general tax that requires 50%, and then you get the city council on board. That's how you fix this issue. There should be nothing no discussion about any debt to the sales tax.

Hello. My name is Jennifer Garcia. I'm the pastor of First Lutheran on Lemon And Wilshire. And I grew up in Fullerton, and I love this city, and I'm sure you all do too. And I I just wanted to, name that your job is really hard. Thank you for doing what you're doing. Thank you for your efforts on this. When I was in seminary in one of my leadership classes, we learned that a budget is a moral document. And, yes, of course, there there are logistics. There I mean, there was a lot of head work too, but our budgets tell our values.

They're a way to to name our values and show what we care about as a community. So I just wanna bring that idea into the room as you're having these discussions, and I will be praying for for this tea. So thank you so much.

Thank you.

As somebody who's living in Florida, I I wanna push back because this whole thing is just a just a charade. This is nonsense. That presentation we could solve was basically a dwarf, like, ways of the sales tax. Look at how much the state gets. Look at how much the pound gets. It doesn't matter. There's so much we get and how we misspend it. The idea that we're like, we need a sales tax. That's just gonna be shoveling more money into the money hole that doesn't get properly accounted for. The idea that the sales that, like, the budget is moral is an interesting concept.

Not to to pick on you, but I made that argument in 2023 in front of council as the only person pushing against a fire funding that we couldn't afford that was completely glossed in this presentation when I said the ethical thing to do was to not spend money we don't have and then run to the taxpayers going, hey. We're broke. We need a sales tax now, which is exactly what's happening. You have to fundamentally look at how to prioritize the city. If you go back to city council agendas from, like, 90 people, why do we come funding?

That we can't have certain businesses because it changes the character of the tower. They were mad that they wanted to put the arcade at the movie theater in the nineties, for god's sake. We have Walmart in, let's see, Raya, La Habra, Notchiefar, Butter Park across the street, Nanteside across the street over here in Brea as well. All the tax money goes to other cities from all of our residents' buildings shopping there. Same thing with Trader Joe's. Why don't we have that? Because it says you screwed over Trader Joe's, and they ran into Brea. You can't prioritize being an education community. And I don't think there's anything wrong with that. But if you make that prioritization, what does that presentation say? They don't pay sales taxes. The reason why Gordon Park goes so well is because they've had to ask Barry for forever. And then that has Disneyland, the convention etcetera, etcetera, etcetera. Brea Mall has I'm sorry. Brea has the Brea Mall.

Orange has the outlet. See, all of these financial incentives that they go places, and we don't do that in. The idea that we need a sales tax is insulting to the taxpayers because we haven't solved the problem. When the city council looked at the sorry. When the city staff looked at the budget, went, oops. We misclassified $3,000,000. I'm sorry. How much April did we dump into people to make the, misallocations? I can count over a million dollars between the city manager's office, the staff there, administrative services. They've been sold for the budgets. And then flipsy, we misclassified, like, $9,000,000. We didn't know this was here. We didn't know that was there. We don't even know what's happening with the budget, and the people we pay millions don't know what's happening with the budget. So but the answer would be, well, you know what?

Let's give them more money to misallocate. Let's give them more money to not study properly. The first thing should be looking at where the money goes and how it goes there. The idea that you have vested interest. Okay. Let's talk about campaign candidates that get money from the fire department that then voted for a fire service increase that we couldn't afford or an ambulance system that we couldn't afford. We never I just asked counsel to put an actuary in front of it. Make sure we can afford this, and they just placed it with, nope. Heroes want what they want. We I've watched it for years and years and years.

I have literally been the only person, like, standing at the at the future going, stop at budgeting after budgeting. There was a long standing joke that I went to a budget meeting on my anniversary with my wife before we went to dinner. I was so mad about the budget here as a joke. So being the o one of the only consistent voices saying that, hey. Why don't we look at where the money's going? Look at how it's actually being funded. Look at what we're actually prioritizing, making sure we're being honest with the tax payers and voters. Everything else is just insulting.

That's that's straight men.

To say to look at your cough.

Hi. My name is Steven Cherry again. I I want to second some things too. I know that this this is a hard thing. I also set an admission, and I I know that's I'd say it's very uncomfortable to have to, know, you sit through public comment, and especially on the issue that I mean, we're dealing with things that are less sort of severe than budget, and big budget issue like this.

I would like to to also say that I am quite concerned that the recommendation by commission member, Bhushala, about the, I'll give an interesting proposal to, shake down the trash hauling service for a $10,000,000 loan. I don't really think that that is a very good idea. It's also very temporary. It's also a loan, and the city would be incurring interest payments on that. I also do think that the, crash home and RFP should remain a separate entity than in than sort of the fiscal crisis we find ourselves in, especially since, Mr.

Dushal has vested interest at one of the trash hauling companies that has submitted for an RFP in Valdosta trash services. They're a very, little known trash service company that provide I think the biggest city is Diamond Bar. And so it would make sense that a company like that would maybe have to get a loan to get a big contract with the city of Florida taking about 144,000 people 140,000 people. So I would caution that. I would also say that the competing sales tax measure, it almost seems like it was planted as an idea so that voting would fail.

If you have two competing sales tax, voting will either maybe choose one of the two. Like, when you're pitting hard for roads against public safety, it's kind of a hard thing for people to pick. And the most likely scenario is it would be that people would pick neither, in my opinion. I would also say that the city is understaffed, which is probably, which better we were better than we were, but it's still slightly understaffed, which has probably led to some of these, to to where we are today. You know, a lot of the staff is under a tremendous amount of pressure having to do multiple, multiple things.

And so, you know, you can't really follow staff when you don't have, proper staffing levels. The other thing I would say is that, housing sales I mean, property tax was clearly the biggest generation of revenue. We're very, very behind on our, housing goals in Fullerton, especially in our arena goals. And if we increase housing stock, while not an immediate solution to this problem, would definitely serve our city, better with a long term, fiscal sustainability. So increased housing, a downtown master plan, and trying to increase sales tax revenues would definitely probably help the city.

And

that's something you've provided. I just wanna say that some of us worked eight or ten hour days today. So we can come to see We pay our branch, our mortgage, buy groceries, contribute to our churches. We come to this meeting, and we see an agenda that says Fullerton budget overview. I was really expecting to get an overview and not necessarily a sales job or this is why we need a sales tax. As a community member of its military since 1924, they really wanted to understand and come to this table

in a smaller environment than the

city council meeting where people are screaming at each other all the time. As a concerned resident, I really came to those meetings so could understand the budget. And what I didn't get was an understanding of budget. What I got was glossed over, hey. This is what sales tax is. This is property taxes. This is what this is. I know that already. I know the local government. What I wanted to know is how we were doing to see what our budget looked like. Like, I had

to go home and tell

my husband I'm not gonna make as much money this year as I did last year. And then we have to make some tough decisions about what we're gonna do. We're fortunate that some of those tough decisions are where we go on vacation or what we're gonna spend on our kids. Other people are are scrambling to pay their rent. These people

in this community don't have food.

That their cars break down. And I came here this evening.

I feel emotional about it because

I can't even understand our budget. But what I think I came here tonight to see was this effort to adopt and to push upon as a sales tax without fixing the very infrastructure, without visiting what's really important to the community. And I think you said that best. It's a reflection of who we are. We're not having that conversation. The nineteen nineties when we had conversations about a utility user tax, we had people that just said no new taxes. That's all they said. They never said or what happens if we don't raise money? You know, if we raise taxes in 1992, we wouldn't be here. Our streets would not look like they look today.

We would not have staff people leaving the city for other jobs. And so I just wanna ask that if we're gonna do this so one of the reasons I don't put a city council meeting is because I don't like the partisan comments. I don't like picking on people. I don't like commenting on a number of commissioners or a staff member or somebody. I really think that if it's gonna fix itself, we have to have an arena where we can have honest and difficult conversations.

And I would say as someone who worked on the infrastructure committee in 02/1920 who supported a sales tax measure, which I'm very disappointed because we worked very hard on it, that I'm not prepared to support sales tax measure. And I think I'd be a person that could really support it. But I'm not ready to support it until we have a permanent finance director. You're telling us we have problems during our interim. Like, what would what this person not good enough. If they're not good enough, then get them out of there and hire someone that is. I'm not gonna support sales tax measures until we have a balanced budget. Because last year, we had city council that knowingly adopted a budget that was $9,000,000 unbalanced knowingly. That was that was the decision. That stated our values.

Our values went well. We can just adopt mine. We will kick the can down the road. Someone will run off versus another elected office, and we're gonna be stuck here. So we're stuck here in this beautiful home that I that I love, the kids that I raised in this community, and it's so fearful that we might end up like some of these headlines we see of cities that went bankrupt. And I'm telling you that if someone who has worked for cities that have gone bankrupt, they do not recover. They they don't recover. The public safety doesn't recover. Their community doesn't recover. So sorry if

I sound like a little bit of

a nag, but I'm here to really hear. But what can we as citizens do to help address our our budget. And please, staff, tell us what we need to do. Don't just sell us the sales tax. I'm not ready to support it. I have to understand what we're really going to do, and I wanna see a balanced budget. No balanced budget. No tax

So my name is Andrew. I'm a longtime resident here at Fullerton, and you all talked about short term rentals and potentially extending them. Instead, I would like to see maybe fast fast tracking of the interview applications. I was looking at a sample of about 17, maybe over a thousand, permit applications. And out of the it was under review.

There were about 60 that were, waiting on response for over three hundred sixty five days. So, you know, either the data's bad or we're just slow walking some of these ADUs, which can help our our revenue situation because some of that's a part of the property gets reassessed, and, we'll we'll, benefit from increased property taxes. I'm also, pretty a little hesitant about, sales tax measures. You know, for me, it's you know, I I don't trust this council. It's hard for me to trust some of the people on this team's committee.

So, I understand you guys are trying to sell us on this on this, but I wanna see a little bit more in terms of revenue generation ideas, potential, you know, expense expense reduction. So I think you guys really have to sell the public that you're taking the city in the right direction before putting some

of these sales tax measures

on there. And I have one last comment that I got. But, that's it. Thank you.

Is there another chair? Oops.

We can get Alexa.

There's two speakers on Zoom.

Ready? Oh, we got speakers on Zoom. Yes.

Dominic Moonfort. Can I mute?

I I

didn't request to speak on this item. I'll speak next item.

Okay. Thank you.

Mhmm.

K.

David, you may unmute.

Thank you very much. Yeah. I've been listening to these comments, and I must say that lady down at the end of the table, I wish you were on the city council of Fullerton because she actually seems to have her head screwed on straight. So thank you for your comments. I would make one correction. The utility tax, back in '19, '93 was, temporary. It was to sunset, it would still not be in effect today. It was only gonna be a temporary measure. But, otherwise, I think your comments were were are well taken. Joshua Ferguson, man, he said it like it is.

The city of Fulton went out and hired a bunch of, new firefighters based on a one time grant from FEMA, and the city's gonna have to take over those those payment those salaries and pensions in a couple of years. I mean, this is just reckless stuff. And taking the ambulance service in house, that's a recipe for more economic disaster. I mean, the first thing you have to do if you're sick is is recognize you have an illness. And right now, I don't see anybody around the table even talking about that stuff.

Because Joshua's not sitting at the table, I don't think. But, mean, that that's just, like, fundamental stuff. The police department is a huge part of this budget. Is anybody talking about using the sheriff, the Orange County Sheriff's Department, the police? There's tens of millions of dollars over a few years.

I I don't I I don't understand this. I one thing I think that the city should consider at least is a part time, borrowing from, other reserve funds. And it may not strike people here as being, the smart way to go, but, there are fund balances available. And from the water fund, which is an enterprise fund that may be available to the city. You know, when you're in triage, the first thing they try to do is stop the bleeding.

Before they try to figure out what the hell is wrong with the patient. So, you know, how many gunshot wounds he has, you gotta start start snatching the holes. And, from what I've heard here, the idea of, like, a small business development, that's just a waste of money and staff time. That's ridiculous. Building more housing, you're not gonna dig your way out of a hole by cramming more people into Fullerton. Who cares if the arena numbers are met or not? Except you're gonna get sued by the people who wanna ruin your town. And one of the the guy down there Yeah. The guy down there in the in the white hat who said somebody from Anaheim shouldn't be able to speak. He was talking to me because he he googled me on his phone there.

I see he's texting, and he realizes I live in Anaheim. I lived in Fullerton for twenty years, probably longer than you've been alive. I know the city better than you do. So, you know, I do business in Fullerton almost every day. Shot. Who I work for is none of your business. And if a reporter asks me not to to to say something and then say, oh, well, don't quote me on that. I find that a little on the irresponsible side, don't you? I do. Alright. Anyway, there are lots of options out there. But raising taxes is the first thing that comes to mind, and that's the first thing that everybody invariably goes for.

Thank you. That's your three minutes.

Thank you very much.

Okay. No further?

Yeah. Any

more

comments on this, or can you go on to the?

I

just wanna thank I wanna thank everyone for providing your comments, and we are all taking notes. And this is being recorded, so I appreciate all of the input. We are gonna go on to a presentation from our city engineer, David Grantham, about the city's infrastructure, its conditions, and funding sources. And then just to look ahead, when we when we go to item number three and review the prior committee's recommendations, I think that might shed a little bit of light as to why the committee was formed, what it is, and then why there has been a discussion of sales tax tonight because that was kind of the culmination of the work done by this committee in its prior incarnation. But that said, I'm gonna turn it over to, David Grantham.

Thank you. I prefer to stand up.

Stand up and. Well, the people who I've seen a lot of people here before. Dave Grantham, senior engineer. I've been with the city for ten years. Two years as a senior engineer. Before that, I spent all my time managing the capital improvement project. Also a forty year resident of the city, crowned for a high grad. So I basically live and breathe infrastructure every day. Alright. Presentation agenda.

Six items I wanna get through. It's quite a lot, but I'm gonna keep it play level. Really, the intent here is to the you guys gonna have a conversation and discussion about infrastructure as part of this budget. So I wanna give you as much information as background as I can so, you understand where we stand with our infrastructure. Slide 50. So let's try, start with what is our infrastructure. Most people focus on streets. Obviously, it's visuals, what you drive on every day. But as you can see, as far as we're concerned, there's a lot more to it. We got the airport.

We got a water system, parking lots, parks, and trails. One thing I do wanna kinda add in here is up for discussion a little bit is information technology systems. I think that now cities and agencies and even every day, you know, you're relying on your IT so much more to do business. And I think that's important that it be part of our infrastructure now. If you lose or Internet goes down, our systems go down, we can't do any work. We can't provide services. So I think it's important that that's part of the discussion nowadays. Next slide, please. So I'm just gonna do there's a lot of history here. I'm not gonna go into details.

You guys already talked about the 1993 utility tax. Stole my thunder. But, basically, what you can see from, you know, 1999, 2001, there's a

lot of talk. Next slide, please.

Continuing through 2018, there's a lot of the public works department brought this to the attention to the council many, many times. There was talk about it, but there was limited action for many different reasons and, probably more than I even know about. But then in next slide, please. Then twenty eighteen, twenty nineteen, Interact was formed and that's my commission or committee rather. And we did a deep dive into our infrastructure, all our issues, our challenges, our conditions, our infrastructure.

And that presentation was made to council in 2020. And out of that presentation, one of the reason one of the items that came out was the establishment of the infrastructure funds. And I'll go into that a little more detail later on. But from a public work standpoint, that was fantastic. Not so good was the ballot measure that was talked about, but then, also, it was the COVID pandemic where we got the ARPA funds. Excuse me. Sorry. We were allocated third Public Works was allocated 13.1 that was put entirely on the streets. So the last few years, you've seen streets get a little better. That was a big reason why it became a little better.

Yes, please. Alright.

Let's talk about how we fund our or just funding in general. We have six different funding sources. I know a lot of people think there's one big pot of money. You guys know that's not the case, but a lot of the public doesn't think that. So slide, please.

Pretty much all of these funds except the general fund are restricted, which means we can't use it for anything we want. We have to use it in a specific way. That's good and bad. Right? Checks, public, governments have checks and balances. They are frustrating and good at the same time. It can slow us down to do things, but they make sure we use the money in the correct way. So that's why we have all these different funding sources to make sure the funds are used the way they're intended to be. Next slide. So for infrastructure, we typically use these funds, general funds, special revenue funds, enterprise funds, internal funds.

And, occasionally, we get grants. Grants definitely cannot be counted on on an annual basis, and and, typically, that they are only used for big, big projects. Next slide. So I did talk about funding restrictions, talking about infrastructure with the funding. You can see the different funds we typically use and how the restrictions they are used.

Again, general fund can be used anywhere, but you'll notice typically we only use it in the streets or street related items. Next slide, please. Source of funds to back up. Measure M2 and gas tax and SB1, they come from the county and the state respectively. Pretty much everything else we have is somewhat of what we consider a local fund. Infrastructure fund, again, I'll get into that in a little bit later. Park dwelling and traffic mitigation can fluctuate greatly. Depends on development. If you've got a bunch of housing going in, park dwelling will go up. If you're not building anything, there is no park dwell.

Traffic mitigation could be even less. It's depending on the type of development as to how much impact, to how much money they'll pay into the system. That we don't get too much of at the moment. Next slide. Strange Capital is a percentage of the sanitation filmed, the fees you see on your utility bill.

Upside and downside to that is it's great. We got some sort of revenue downside as people have been saving or, you know, not using as much water, which is great from that perspective. It's not so good for our revenue. So our revenue drainage capital is going down. Facility capital is an internal service fund where each department during the year, each budget cycle, they put in certain amount of money to help maintain the buildings that they run.

And then finally, enterprise funds. These funds are basically self supporting for the, the infrastructure that they are serving. So airports, project fees for people using the airport. They use those fees to run the airport, same thing for sewer and water. Alright. Let's talk about some challenges. Look. This whole this whole conversation today is about money. It's same thing with infrastructure. We just what we need to do, we don't have the money available.

And it's pretty obvious when it comes to the streets. Right? The available unrestricted general funds on the minimal, We there just isn't enough extra or available over the last few years to help supplement the needs for the infrastructure. A lot of our fees are not at market rate. All of our costs have gone up.

We do get a lot of regulations from the state, and but they don't give us any money to address those regulations, so we that's an additional fee we gotta deal with. Big one lately has been construction. The material cost during COVID, our water pipe cost went through the roof, and now we're seeing the oil prices go up. Chances are, at the moment, the asphalt prices haven't gone up too much. I'm not holding my breath. We have a lot of street projects we're planning to do this on. And I talked about the reduction of water usage.

It's like,

what are priorities?

Over a little since I've been managing it, there have been the the CIP. There have been projects we started out where there were big projects, redeveloping parks, blowing things up, and restarting. But because I'm, you know, looking at our funding, it's shrinking, shrinking. We changed it to just maintaining, repairing, and renovating what we have unless we get a big grant. So if we're using our typical funding, we're just maintaining, repairing, renovating what we've got.

Yeah. Let's see. What else to say other than that? Excellent, please. So how we distribute our funding? General fund goes to streets and, of course, IT. The amount we get for streets is pretty minimal. The infrastructure fund has been great. And next slide, we'll actually get into that in more detail. M2 gas tax, they supplement.

They do not replace. They only they cannot replace existing local funding that we have to use on our streets. They have very limited funding, as I talked about, for park dwelling, traffic mitigation. And then following the the loss through the enterprise funds, they fund themselves. And it can only be used on those systems.

Alright. Let's talk about the infrastructure fund. So from my perspective, this was brilliant because I got more money to the CIP to budget and do work with. It was established by council, back in 2020. And what it said is there's a a specific baseline And once you go above that revenue, a minimum of 50% of that revenue has to go to infrastructure. So as you can see, it fluctuates, but it's been rising quite a bit. And there was a big jump here, and that was, Eddie mentioned that our our property taxes jumped recently. So our revenue here has jumped. This is next year. So it's a pretty big jump between this year and next year.

So what do I do with the infrastructure funds? Well, excuse me, what I recommend the council approves? The primary use is on the streets. Everyone needs the streets. Everyone's complaining on the streets. Hey. I complain about the streets. So we put 65 or 67, two thirds to three quarters of the of the available funding towards streets, and that's been fantastic. That that's really helped us out over the last few years to get more work done. You may not think we've done a lot of work, but we've done more work than you would than than we would have been able to before, obviously.

The remaining money is is our other infrastructure, which we cannot ignore, our buildings and definitely ADA improvements. The federal ADA plan of 1992 requires us to continue to improve our facilities, to ADA. You cannot ignore it. So purposely, I always recommend every year we put a little bit of money towards doing ADA work, to show that we are still doing that. Obviously, street projects, do curb ramps, fix sidewalks, but there's other work we need to do.

So I put that money there. Building new facilities. We've got 31 buildings we saw before and and a bunch of parks and restrooms and play structures and things like that. It's all infrastructure. Put some money towards that to try and address the bigger items that the typical routine maintenance can't address. So it's it's been helpful. Been using the money, to do parking lot repairs. About to do some work on in the downtown area on the parking lot on two of the parking lots. One was going construction, and other one's already designed. The use of this fund is discussed every year with INREC.

And when we first got the fund, there was a discussion with INREC of how to distribute this funding. And, essentially, we followed pretty close. INREC suggested and preferred that we put a minimum of 75% of infrastructure fund on streets, but I recommend usually between sixty seven and seventy five because of our other infrastructure needs. Alright. In place, everyone's lovely topic are streets.

I'll go through this relatively quickly because I'm sure you've all heard this before many times. We have about 300 miles of streets. We inspect them using a consultant every two years as a requirement to receive our MT funding. And we get a rating on each street, score PCI, a pavement condition index, from zero to 100. Pretty straightforward. It's 100. You got an A. It's fantastic. You just built the road. No one's driven on it yet.

Once you get down here, then it's we haven't touched it for fifty odd years, and it looks like a bombsite. Different ways the roads can deteriorate, and it's not one size fits all here. Obviously, truck traffic makes a difference. The thickness of your pavement makes a difference, so your underlying soil condition makes a difference. So, again, it's not one size fits all to address our streets, unfortunately.

Here's our update. It's draft update for 2025. It's hard to see. We were doing pretty well with our PCI. So the blue is our arterials, main streets, so they had a big jump. Our locals, residentials, one drive on, it's had a little jump. So our overall took a jump. A lot of this in here had to do with that 13.1 of ARPA funds that were allocated to us. We put it to good use. What we're seeing here is we don't have that money anymore, so we're starting to plateau.

Quite frankly, we're gonna start dropping off again because the money that's made available, for streets every year is just not enough to keep up or to even increase our our conditions. So, unfortunately, we're starting on the drop down again. Next slide, please. So just out of interest is the latest and greatest how we compare to other cities. I was a little disappointed that we're in bottom again.

Last couple of years, we were actually fifth from bottom, but we're holding up the county again. Very unfortunate. But our neighboring cities, you can see Anaheim is kinda holding steady. They're right next to us. Buena Park is actually trending down in their payment conditions.

I think that's one of the reasons Buena Park went off for sales measure because part of that money goes towards infrastructure. Flocentia is definitely on the rise. They've put their money, from this the sales to good use there, and Brea is is moving up slightly as well. One thing to know is the county average is almost 80, and most of the highest rating scores or PCIs in the county are South County cities, cities that are relatively young compared to Fullerton. Alright.

Next slide. So very quickly, just to show you the good, bad, and the ugly spread out through the entire city. These are generally the locations of our good good to very good streets. Next slide. These are our good streets, not so many of them.

Keep going. Fair. Oh, four. Alright. And then very poor. Yeah. A lot of them. And what I wanna point out is you noticed how there was quite a lot of very good and a lot of very poor? That makes us very unbalanced. It makes it very hard to catch up.

But one

thing I do wanna point out is just to say there's a lot of neighborhoods, you know, over the last five, six, seven years. I've tried to tackle some of the outline because of limited funds. Now we're down to actual neighborhoods, and we're trying to tackle the entire neighborhood at a time we do the work now. Alright. Next slide.

A lot of people have seen this, costs for us to do our work. Obviously, it's a lot cheaper when the road's good. You just need to do a slurry seal achievement. When it's bad, costs a lot more. You have to dig it all up. Next slide. This is our current, this year's funding. It's about $8,000,000. $8,000,000, unfortunately, barely gets us to keep the conditions we have now. So what that means is if we fix a really bad neighborhood, another neighborhood is gonna keep sliding back.

We just cannot keep up. And you can see the street funding talked about the 13,100,000.0 that was over this time. So the funding went up, fund that extra that onetime funds stopped, and now we've dropped back down again. Slide. Alright.

So if we get additional revenue, what would we suggest doing with it? Basically, our recommendation well, let's be honest, my recommendation at this point is to treat it the same way we're treating the infrastructure fund right now. Minimum majority of the funding coming in would be allocated to streets. It's obvious. That that is what everybody wants to I wanna drive on a nice street street going home.

So we definitely need to put the vast majority of it onto the streets. However, we can't be and we would do it we would take it I think the idea is to take it out of council's or staff's hands as to how we allocate that funds. We need to keep allocating until we hit a certain parameter, and that parameter would be if we get a PCI of 80. You know, PCI of 80 is like driving through Glocentia, driving through Brighton. Right?

Once you get that, then we can maybe start backing off on the level of funding that goes directly to streets. Obviously, we have to keep enough to maintain it, but you can back down on it. And we would do that by using the PMP as our guide, which is a consultant, third party consultant certified by the county to tell us what our PCI is at. Again, the remaining funds, we have other infrastructure. Streets is not the only infrastructure we have.

So we'd put it put some remaining funds on the other infrastructure needs. And this is likely the items that need more attention than the others. Alright. Next slide. And then when we have more money to do streets, we could actually expand the limits of our street projects. Right now, we are somewhat limited in how we can expand or the limits of the scope of work. On our streets. We're typically just following utility projects. We try to expand where we can. If we get extra money, we could really expand the limits of work.

Multiple pavement treatment methods. Over the last few years, I have piloted a few or the city has piloted a few different pavement products. They've actually worked out really well and actually beyond my expectations. So I would definitely be recommending that we increase the use of these. I think we can get a little work done in a shorter amount of time by using them, and they're very economical in the big scheme of things. And it will allow us to a rapid increase of the citywide PCI score. And just to show an example of how quickly you can increase your PCI, this is placenta.

Can you read it? I just can't write.

Well, in 2018, they had a PCI citywide of 67, very similar to what we have. Eight years later bear in mind they're a small city. Eight years later, they're at 80.1. I think we can get there in about ten years if we did it. It's not overnight. I'm not even gonna try to tell you it's gonna be overnight, but we would get we you you would see work and get it done, getting work getting done. Alright. Slide. So summary because you're tired of me talking. As you know, infrastructure is unfunded, has been for numerous years.

We need significant revenue designated or dedicated specifically infrastructure. If we don't have it, you you see what's happening. You see what's happening to the street. We've fallen off. So that's what seeing.

I think the infrastructure shows that we can manage additional funding in a responsible way. The staff and I'm very proud of the engineering and public work stuff, actually everyone in the city, to be honest. You know, we put in programs and methods over the last few years that I think are we can expand on and and effectively allocate and use those funds. And as I mentioned, we've piloted different programs or different methods that I think we can expand and thus that we can get a high quality product at an economical cost. Alright. Any questions, comments?

Happy to take

Any other questions?

Here, the next presentation is only 10 slides. Can we combine those and then do all the questions

and public comments at once? Is that is that? Okay. They're

related, so well. One second.

Is this in the backup material? All of these sites?

Yeah. Everything will be uploaded online.

One second. Almost there. K.

Okay. I'll now walk you through a brief review of the fiscal sustainability add on committee's prior recommendation, and this will help explain the background of the add on committee along with steps taken by the city since that time and what we've learned from the recent polling effort. The goal here tonight is to reconnect today's discussion with the work that has already been done and help frame the potential next steps. We'll cover four items. First, a recap of the ad hoc committee's work and recommendations.

Second, actions taken by the city following that work. Third, a summary of the polling data and key takeaways. And finally, a high level overview of potential next steps and timeline. As a reminder, this ad hoc committee was formed by the city council in August 2024 to help identify long term strategies for fiscal sustainability. So the committee met six times between October 2024 through April 2025.

During that time, the committee reviewed the city's financial position, the adopted budget, and a range of potential budget balancing options. So those included, those included revenue strategies such as an add on sales tax sales tax as well as TOT measures in addition to expenditure reductions and other financing options. At the conclusion of that process, the the committee forwarded two primary options to city council for consideration. The first was two dedicated half cent sales tax measures, one for infrastructure and one for public safety, which would require two thirds voter approval. The second was a single 1% general sales tax measure for general city purposes, which would require a simple majority vote.

These recommendations were split and reflecting the complexity of this issue. Following the committee's recommendations, staff presented those options to city council in May 2025. At that time, the city council directed staff to further explore the two dedicated half cent sales tax measures, one for infrastructure and one for public safety. As part of that direction, the city engaged a polling company to conduct a citywide polling effort. The purpose of that polling was to evaluate voter sentiment, test the viability of different measure types, and better understand the community's priorities.

And now I will pass it over to the deputy city manager of reasons.

So now I'll walk through some of the key findings from that polling effort. The intent here is not to go into every detail, but to highlight the major themes that are most relevant to today's discussion, some of the subsequent discussions we'll have after today. So one of the first consistent findings from the polling was that infrastructure related measures, particularly streets, ranked among the highest priority for residents at 88% citing very important or extremely important to them. Maintaining and repairing streets, sidewalks, and storm drains all ranked very high along with core public safety services. This reinforces what we typically hear from the community.

Residents place a high value on basic city services, but especially on infrastructure improvements. There were two key takeaways from the polling that are important to highlight. First, approximately two thirds of voters indicated that they believe the city needs additional funding. Second, when it comes to specific measures, a dedicated public safety measure did not test as viable. However, a streets focused or infrastructure focused measure showed stronger potential support with levels approaching the two thirds threshold, particularly with additional public education.

So the data suggest that while there is general awareness of the need, support vary significantly depending on how a measure is structured and what it is intended to fund. So based on those results, staff recommends evaluating I'm sorry. Staff is recommending that the committee consider further evaluating an infrastructure focused measure. Specifically, one approach that would would be to tie the use of those funds to measurable outcomes, such as improvements in pavement conditions. Under this concept, the majority of funding would be directed towards streets until the city reaches a defined pavement condition target, such as a PCI of 80 as mentioned by our city engineer.

Once that target would be reached, funding could be more broadly distributed with a minimum percentage continuing to support street maintenance. So we have to maintain it, or we're gonna be right back where we started. So this framework this type of framework is intended to provide both accountability and flexibility over time. And we would, right now, we conduct the PCI review every two years. We recommend we would do it every year.

Every year, everybody would know what our PCI is. And once that PCI reaches 80, then we would allocate that would drop down, but not less than one third of that would still be allocated or dedicated for streets. And, again, if that PCI falls below 80, the majority requirement would be reinstated where we've have to prior reprioritize majority of funding towards streets.

So

in terms of next steps, timeline is relatively tight. Over the next few months, staff will continue exploring revenue options and cost containment strategies, and those will be discussed at subsequent meeting. The goal would be for the committee to finalize its recommendations in May, which would then be presented to the city council during budget study sessions. City council would need to take formal action by July in order to place any potential measure should they wish to pursue one on the November ballot. In parallel, there would also be a need for community outreach and education.

Then the last thing I have, and we can talk at the end after the comments, is just dates for future meetings. So with that, we can turn it over to the committee for questions.

Yes. So for your polling, did you, have any data as far as general tax measure as well? Like, what the means looked like?

So when we presented the item to city council, city council's direction was to move forward with evaluating the two specific taxes. So that's what was pulled at that time is a half cent for streets and a half cent for public safety.

And then if we do end up doing a general tax measure for the ordinance that we have in place already, any revenue would also be applied to that 50%. Right?

Yeah. So if there's a general sales tax that's passed, we already have the infrastructure fund, which has already established that baseline. So we just increase the baseline and automatically shift at least 50% of any additional sales tax to the infrastructure fund.

And that PCI 88 would that be an update to the ordinance, or would that Yes.

Yeah. So the the the recommendation you had was I'm sorry. We're kinda repeating the previous question a little bit. Is it essentially a general sales tax for the voters that functions somewhat like a special sales tax? Not And that and that's it's most of my is supposed to specifically give me the procedure.

There's a couple options. I think we've talked about how anything that's viable, the priority has to be streets. The the way you can guarantee the priority of streets specifically is with a specific tax because that would be set by the voters. A general tax, ultimately, it's general fund, and that's up to council to decide how that's allocated. The infrastructure fund was established by city council and can be modified with forfeits vote of city council.

Okay. I

just wanna give you time. It's a lot

to process. It's a lot to begin. Couple questions. Could you give me the timeline of when this polling data was collected, like, approximate window? Right?

Yes. So the polling was conducted late January. Okay. And then we received the results late February, I believe.

Okay. Okay. Also, in the polling questions, was there any question regarding the public's feeling on Sunset Clause or did or understanding what a Sunset Clause is and what it does.

I'm not sure, but we can check and bring that back at the next okay.

And then I'd like to go back to infrastructure. Having served on in in RAC, I 'm reflecting on some of the things that we worked on with capital improvement projects that regards to I mean, the the beauty, so many of us love the fact that we live in a beautiful city that has a lot of our buildings have historical designations. We love that infrastructure. We are not a newer South County city, and many of us just really want to make sure that we retain the architectural integrity of this community and add to it, not detract from it with certain developments. In regards to can you talk a little bit about that trial?

If I believe if I remember correctly, it was on Brookhurst where you did that trial with the slurry, and it was could you just Yeah. So a little bit on what

that was. Brookhurst

let's back up a little bit. So the old school, so to speak, or the method was when you reconstructed a road, you'd remove everything and put new in. We now use methods where we're reusing the existing materials that we have it's good. It's old, good quality materials. Takes a lot less time. It is a lot less trucking, and it is it is cheaper. On Brookhurst, because it was a straight shot, we actually rejuvenated the existing asphalt. So we just basically ground it up and then put it back in place as the truck went over. And that's worked out fantastic. It's worked out really well.

On other streets where the streets are a little bit better condition, I'm using a more, an upgraded slurry seal for lack of a better term. It's it comes premixed from the plant, you know, mixing on-site so the controls are better. They guarantee the color, which I think a lot of times is people look at the color of the street. They think it look a lot nicer. I've also done two level two layers of slurry on streets that are borderline, and they're actually holding eighteen months to two years later.

They look like they're just done. So those are the type of things that we've implemented. A lot of cities are still hesitant. I kinda stuck my neck out, but I'm glad I did. It's worked out pretty well.

It's quite sustainable as well. Yeah. Also, in regards to the condition of our ADA, in regards to our sidewalks and our curb cuts and things like that, I know that there's so much that needs to be done. And also to lighting and safety, that's another thing that, you know, we have different areas that Right. With without lighting. Some of them cannot even be retrofitted.

So

Yeah. I mean, we certainly got areas

in the city that have no lighting and people like that, but we have about 6,000 lights throughout the city. Half of them are on system electrical systems are good. You You can probably explain that better than me. And half of them are on the old antiquated high voltage, which, like, is Edison cannot maintain anymore. So if those systems go down, there's a fifty fifty chance that we can get them back up using the technology the system uses right now. So we need to replace all that. It's very, very, very expensive.

I'm also concerned that this is a really tight timeline. We've had we've tried, and I know that, you know, the council chambers are being elevated. But I know that we've tried probably three times to try and make this meeting work. I'm just really concerned that we're in a tight timeline now. So especially if there's gonna be a potential ballot measure.

It takes time to debate what the meeting is is when we start to get into, you know, the semantics of what a ballot measure would take place I mean, to put together. I'm just about that. We have a hand on this. You wanna go to public comment? Can we go to public comment? Because he's his hand done

for quite a while. I'm sorry. I

I just had it. No. He's had it. Yeah. He's had it up for

If I could ask that.

Oh, yes. That's first. Sorry.

I'm I'm surprised by the polling results, and I I kinda wanna see more about what the questions were and how that was framed. Reason being the the 2023 survey that was done, I think it was, like, the top the top three and maybe the top four. All the concerns were about the cost of living, and those didn't show up anywhere on this one. So I'm I'm assuming they're vastly different questions, and maybe there's maybe there's a a reason for that. But it it seems to me like at that point, the survey results were, hey.

It's too expensive to live in Fullerton. And, you know, one of the one of the shocking things from that survey for me too was 47% of people didn't consider a budget shortfall to be important. Right. So to have to have that survey taken and say, we need a sales tax measure, that made absolutely no sense to me. I kinda don't know how we got from there to here with the focus on this being a sales tax measure and almost no talk about you know, and there's future meetings where we discuss.

You know, I I mean, to some extent, I get that. But it's like there's no talk on here about cost controls or efficiencies or or anything of that matter. It's just sales tax. And then the survey that's kind of pushing that seems totally the opposite of the previous survey.

And also in light of the lack of success of the last, which we probably measured it went into. They're the general not general fund. Yeah.

That was general fund. Yeah. Do

you wanna go to public comment?

Yes, please.

The room or online first?

I

remember seeing you, David, at another meeting a long time ago, a couple years ago. Maybe it was on Zoom even during pandemic where you said it was $1,000,000 approximately $1,000,000 a mile to to fix the streets. Is that number higher now?

It depends on what you're doing. Yeah. I mean, possibly going up. To fully reconstruct the roads, remove it and replace it, it's about 2,000,000 for a local road, up to 4,000,000 if we're not through. But we're probably still within the you know, where we're looking at and the work we're doing, we're probably looking at a million to 1,000,001 half per mile of a of a local road.

Okay. And so if we're just talking just roads to within ten years, you would be able to replace all of the roads if you had optimal funding? No. So how does that work?

So it is based on the PCI. So the PCI just means that your average score throughout the city is 80. So you're gonna have what we're looking for is is a small amount of streets that are still bad, small amount that are very good, and a big group that's in good condition to fair condition. That gets you to 80. So you're never gonna replace everything. You're never gonna have all your streets that are fantastic at one time. It's just it it never works that way.

Well, once we get rid of all the people and cars and everything else. Right. Good. So if if we were to just hypothetically, if we were to have the one sense go strictly to road infrastructure, not anything else, not lighting or herbs or sidewalks or anything else, just streets, which is the main crux of everybody's woes, and possibly put in an ordinance that said giant trucks can't grow on these streets anymore. How do you do it?

What how how long would be be how much money would it take, and how long would it take before people started going, okay. I like Fullerton's roads now.

I think I think I've always said is if we have a significant increase in nightlife, people will see work going long. They only care about the streets they drive on.

Yeah.

Right? But I think they will see work getting done. Hopefully, build some trust in the fact that we're using them.

Alright. But, like, how much how long do you think it would take in the letter state before they started going, okay. Anaheim to Fullerton, and then, like, Fullerton's a pothole, and then Anaheim's not.

Or I That's a hard one. I mean, I I just honestly be guessing. It'll be a couple of years, and I think everyone's attitude is changing.

So five years or something? So would I and then how long before we'll be at 80%? PCI. PCI.

I'm thinking it's around ten years.

Ten years. So ten years. Okay.

And Okay. It

so I don't think the public trusts the city council. Obviously, they've gotten this into a a rather bit of a pickle with finances. Maybe it's been their fault, maybe not their fault. I wouldn't I'm not blaming anybody. But I think that that if you were going to do any kind of taxes at all, you would have to make some assurances that money may be taken out of the general funds, which the the infrastructure uses and that the city would be using the taxes specifically for roads so that they couldn't they wouldn't be do you know what I mean?

Like, they wouldn't have, like, funding. The the taxes go to roads, and then none of the taxes, none of the budget would be, allocated to roads. Do you know what I mean? So I think the only way I don't know why I'm asking questions. Sorry. Brought out some public comments instead of but I I think that that that would be the only way that you could possibly ensure that people would even consider attacks. Take it away.

So, Placentia that was brought up, I was speaking to a department head over there, a few months back, And I was confused with how they were able to pass that tax measure, which sounded like it was a general tax, but it was a lot of it was allocated to Joe's from what I understand. So I'm wondering if maybe they can do something similar to what they did because they had, major issues with, public opinion in 2016 with that huge corruption case that happened. And they were still able to get a tax manager funds, which I thought was a bit impressive. So, I would like to know, more about what they did specifically, how they structured that. I also saw that in this poll, it looks like people care about, our infrastructure.

They care about our roads, but they also care about, public safety, response times, and, they care about clean sidewalks. So, I think this is just further explained it's further evidence of why we need a sales tax because people do not want cuts to services. And we would have to do cuts to services if we don't do this sales tax. And I think it's obvious from the poll that people do not want cuts to services. We can make things more efficient.

I think everyone here is in support of that, but, we're not gonna be able to make up this budget shortfall just through, efficiency improvements. Another huge reason are I think that our streets I understand that we're prioritizing residential over arterials. I'd be curious to know if there's any, active transportation grants or, public transit grants, anything like that that could be used to improve the roads. Because I think if we're gonna be tearing up these major arterials, we need to make alternative forms of transportation better because roads need to be thought of as supply and demand. If roads are the only driving is the only way to get around the city, everyone is gonna drive, and everyone's gonna put wear and tear on our roads.

So we need to make alternatives better. And I would like to know if there's grants available in the future to do that, especially when we're doing major arterials like, Commonwealth and and, and state colleges, the Haitian roads of. One more thing, I agree with what said about the, timeline meeting type. We had just passed the budget in June, and it seemed like they're gonna move in May. So I I agree that that is a concern.

It seems like maybe we

could fit in, like, one, maybe two meetings before then, or I don't know. Seems a bit tight. And lastly, housing, have a university, Burridge University Town. We don't have enough housing for the students at that university. So you have people coming in, driving in from other cities, using our roads, not paying taxes, really, and putting wear and tear on our infrastructure. So, I think housing near the university is a huge it should be a huge priority if we're going to be improving our roads. I think that our roads are not, it's not just fixing them, but it's also being smart with how we're fixing them.

That's your three minutes.

Roger?

I, my name is Steven Cherry again, and I I really wanna say thank staff, because I think that you did a really, really good job of presenting sort of the issue at Anzler, which is that the city doesn't have enough revenue. That's, like, the biggest thing.

Could you

Oh, no. No. No. I was just No. No. No. No. Oh.

Just to make sure everybody gets the case.

That, you know, we have a lack of revenue. You know, austerity is we sort of try and have have tried austerity. It's sort of killing us right now. We're a really large city. We're 140,000 people. We're the size of Pasadena. Pasadena's general fund is maybe three times larger than ours. Mean, I we can't think of ourselves as like a tiny little city anymore. We have a lot of demands. And you can see the cities around us have realized that in past tax increases.

You know? Other cities that don't have that around us have other dynamics as that was mentioned, such as the mall or increased, tourism. And, you know, I know that other comments have sort of mentioned that things can get partisan in these meetings, and they can be. They're really tough issues. You know, Tony has spent hundreds of thousands of dollars over the last several decades shaming this council. And Zheng has been mayor Fred mayor Fred Zheng has been the mayor like, four out of the last five years, I think. And we're in this situation. I think the last time we had this measure come up, no one really wanted it. No one campaigned for it.

And I feel like we're sort

of in a position now where I think maybe we're sort of realizing we need to do this, but there's nobody who wants to be the salesman for this tax measure. And I think it's gonna be really hard. I think there's an opportunity. Right? I think there's some clever ways to Yeah. Totally. To to have campaign folks figure out how to pass a ballot measure or, you know, a sales tax. You know, like, Congress several years ago passed the Inflation Reduction Act. I don't think it really had very much to do with inflation, but it was it was something that was, popular, and it got through Congress. And I think if we can shape it based on infrastructure or something like that on roads specifically and kind of tie it to PCI like some of his staff had mentioned.

I think that's a really, really clever way. Tie it to PCI until PCI gets to a certain score, and then it goes to the general fund or at Sunsets or something like that. But, I I do agree. I think it's gonna be hard. But I and you have to campaign for it. Somebody has to be in charge and want it. And I'm not sure if the council can agree that this is the right thing to do. I I don't think austerity is going to help us in this situation. I really think we have a remedy problem, and it's time that Fullerton sort of understands that it's it's a fairly large city from has large means.

That's your three minutes.

I'll I'll push back on all

of that.

We we have spending problems. We have literally no cost containment in this city at all. I remember what the the city when we were I forgot how to do it. We had a $5,000 door that was really hanging a door in a place that a door already existed, and staff wanted to build, like, twenty eight man hours to replace a door. We have things like that all over the city.

I went through a year's worth of consent counter rides where every single item the city was paying more than neighboring cities for the exact same items, the exact same things. I'm the reason why they didn't do the booch part, you know, myself and, actually, commissioner Wade over here, because we saw that it went from the parts commission, which was, like, $300,000 to, like, eight ninety one consent calendar of 1,200,000.0, and there was no cost containment. It was like, oh, well, that's what people want. The idea that you do not have the survey questions here or this commission is insulting because you're hiding the vault. We don't know what was asked.

We don't know how it was asked. We don't know how people were manipulated in answering the questions they were given. The idea that we've done austerity is absolute nonsense. And we wanna poke fun at council members. I'll talk about it, Mohsaro, who told me in front of city council or city hall one day after me that the reason he voted multiple times to sue me, my friend, and 20 jar nos is because it will stop the staff from being held accountable.

You mentioned, mister Graham, no offense, but you mentioned the IT budget. Yeah. The lawsuit where they sued me because they stopped it or the city attorney office didn't know how to use Dropbox. They leveraged that into, like, over a million dollar contract of Blackbaud Digital and push that into the sleep department's budget, and they just kept throwing everybody after that on an idea that was like, maybe use a password on your drop off. That would have solved the problem.

The city spent hundreds of thousands of dollars on IT professionals and didn't have a secure server setup. The entire premise of this meeting is just an example of perverse incentives. The city manager is behold of the council. Staff is all behold of the city manager. You all have perverse incentives to give them what they want and not care about the taxpayers and not care about the fact that if things are harder for us, you all still get your pensions. You all still get your budgets. It doesn't matter if there's not or not. We had literally years in a row where council dedicated zero general fund money to fixing the roads. Zero. Absolutely none.

And then we got got one time money from the government and went, yay. We can help break the now we're putting money that wasn't ours in the roads, and now that's dried up and it's going away. Placentia was brought up. Yeah. But what's interesting about Placentia that wasn't brought up is that they changed and separated their police and fire apparatus, which changed the way they were allowed to allocate money and the way they were do things. The idea that you're gonna pass a general fund and be like, we swear that she's been totally promised that council will allocate a certain amount to the votes. Promise. Promise. Promise. You can't do that because you're gonna be accountable.

We have 2,000 members out this year. We have three more upkeepers after that, and events cycle repeats, and they can change at any time. Whether it's a general fund and it's a general tax and it's semi ordinance, every time that they just decide they wanna change it, it all goes by the waste time. You cannot you cannot control a future counsel

Yeah. Just here at three minutes. Thank you.

So the comment I wanna make is from what I understand. If we do a 1% sales tax from just the numbers that I saw in the 07/02/2024 report was it would generate about $30,000,000 if that's if I'm understanding correctly. And and when I looked at the five year general fund financial forecast, which is all it's all messed up now because of the errors which were in this recent press release. But even if you even if for argument's sake, we were to rely on what was presented back in the year before. If you pass a sales tax of $30,000,000 based on this forecast, you really only have about $6,000,000 to do anything with.

Why is that? Because the beginning fund balance, the assumptions that were in this five year forecast were for $26.27, $14,000,000. We know that we don't have $14,000,000 that was just presented to us in the very first part of this discussion. We know that we then have to fund the contingency, the reserve fund, the fiscal policies were adopted by the city, which according to this forecast says that's about a 17% contingency of fund amount. That's 24,000,000.

So let me go back to the comment that I made at that very beginning. You can't keep doing the same thing, and it's a pain for results. And I think if this city council, based on the recommendation from a very highly experienced city manager, will not come forward to the council and say we must adopt a balanced budget this year. There are conversations in April and May. If they cannot do that, we cannot have sales tax.

Because if they don't fix the the essential problems, the systemic problems, then our sales tax just gets fed into getting us back to where this five year assumption was that we published in 2024. We're two years later. We're two we're we're all we're not even full two years later, and this full assumption's blown out of the water. Right? We have errors. We don't have reason. No one will no one will say, well, you know what? It was the auditor's fault. If it was the auditor's fault, then please please go recommend that they give us back our money as we have an auditor for. I've not heard that conversation from anybody.

That's called accountability. If it was the staff member's fault, you know what? I'm a staff member chief for cities, and I've made mistakes before. And my favorite saying is, if you mess up, you fess up. We haven't we haven't seen you fess up. We saw this great, you know, pretty old breast release, which is really what caused me to be here because I kinda watched from the side, and I'm just done with it. And I don't see any accountability. What I see is the same the same approach that has failed us over and over again. And I think if we're gonna put Fullerton back in in the right track, like, essentially two years ago, do what in my opinion, a great city manager who said, I gotta be bold. I gotta think outside the box.

I gotta fix things. But what I'm afraid of is that we pass the sales tax measure, and we have weak staff again who let the buyer department come in and bully them. And by the way, I know that they bullied them and kept saying, we want 2,000,000. You want 2,000,000, 2,000,000. And then get 2,000,000 here and 4,000,000 there and 6,000,000 there, and there's over $3,000,000 gone. So I think that's the biggest problems problems with the general sales tax measure. And when we looked at that infrastructure fund David, do you remember this? Because we had a conversation. We used to get up at 06:00 in the morning to get these meetings. And one of the reasons we talked about that infrastructure fund was to build trust in the community that we were gonna put the

money to be able to

be born from the right place. Now that infrastructure fund was supposed to be married to the sales tax

measure.

And I don't know what decision is gonna need, but they created it. I thought that was a great idea to set the money aside. But I think the problem

with the general tax is that

you only need three votes to change an ordinance. So and we did put those work as vote requirement in there, and I remember working on that. That was the ordinance I had drafted and helped help Cindy work on. But but at any given time, seriously, you know, you get you get four people that undo it. So my point here today is please don't ask me to support a sales tax measure if you're not willing to make hard, difficult choices, huge changes to show that that you're gonna meet us.

Because if the only thing you're gonna do is we got four council members that are scared to death that the city's gone bankrupt under their watch because all this stuff that they've tied for years, you know, they're gonna fix it is is use a sales tax measure. I don't think that's gonna apply in this community. And I think for married people like me who sat on the infrastructure, and I wanted a general sales tax, Spent a year and a half maybe working on the sales tech, but it didn't happen. And so now you're coming back to us, and, like, timing is everything. And this error that happened, I really hope that staff will just explain to us what happened. And if it was the auditor's error, please ask them to

do what they got. And if it

was a staff error, then, you know, please fess up so that at least that bills them. Trust, you know, with us. We can say people are human. We make mistakes. I made mistakes before.

I have one comment, which I don't know if it really fits in here. I think the thing where the city council isn't trusted is when a decision is made, like, to sell a mega church property not at its value where it's less than a $100,000 and we paying out the fees when it could have been maybe, I don't know what it should have been, $2,000,000. And so nothing against the church, but those are decisions that the council has made that lessens the amount of money we have in our budget and also that makes people not trust the decisions they So

Thank you.

There's two speakers on Zoom. Thank you. Andrew, are

you hearing any yet?

Oh, one second, Tony. There's two speakers. Public.

We're gonna

hold on one.

Very good. Hello?

Andrew, you can speak.

Hi. So I just wanna, speak about the the $2,700,000, error that was made. So I understand, you know, somebody made a mistake. Okay? But I think we need to figure out what happened there.

And I don't even care who, you know, who it was, but there must have been a failure of internal controls. So if the money came from a fund and was not supposed to be placed in an, you know, in in another fund, then can you can that still be done? And has anything any measures that's taken place to prevent that from happening again in the future? I also think that the city's other internal controls should be reviewed so that any funds moving from a bucket that can't go into another bucket are controls in place from preventing that from happening because I think it's it's very basic. And I think even the most basic accounting software or just general software should be able to add any any controls any controls like that.

So I just wanna know what has been done. It's not about blame. It's just about preventing this from happening again and figuring out where the error was. Thank you.

Thank you. Do have a second? Cool. One more.

Dominic Moonheart, you may unmute.

Alright. Can you guys

Yes. Your time has started. Dominic?

Alright. Okay. Well, excuse me. Yes.

Can you hear me?

Yes. Okay.

Alright. Well, excuse me. I'm sorry. What's going on?

You may speak.

Okay. Okay. Well, excuse my potty mouth for a second, but I am really upset the fact that bike lanes weren't discussed in this whole situation when it comes to the infrastructure, especially since we see death in a student at Cal State Fullerton. And that happened right in front of my apartment complex, which is really, really, really frustrating to I understand that we our city is in a deficit, and the city's made so many errors.

But at

Dominic, we're having trouble hearing you. Wait.

I I really don't care. You guys gotta figure out a way and you

I think we lost him.

That was, yeah, that was the last figure. Okay.

Go back to our committee member.

K. The committee member, Bashalla.

Yes. Thank you. Daisy, you mentioned earlier that when I was talking about the bid, that it was gonna be part of the agenda, and I I was just wondering if are you gonna get back to that?

So that was on slide three of the recap for the OnHop fiscal sustainability. So that's where we talked about the different options that the committee had discussed and where the committee had discussed other options, including the business improvement district. But that wasn't something that actually was voted on for us to pursue at that time. Now if you'd like us to pursue it now, that's certainly something that can be brought up for future discussion.

Yeah. If I'm not mistaken, the first committee that I was that included most of us plus, I think, one other person, I believe that was a a vote that was maybe either unanimous. I think it was unanimous that we were recommending that bid to the city council, but it it never I don't think it ever matured into anything on the council level. I feel passionate about that because the Fullerton Police Department spends captain had mentioned over close to $800,000 a year on the echo unit, and that comes out of and so the taxpayers of Fullerton are all paying for the police to basically police the the nightclubs in Downtown Fullerton. And I think the nightclubs should be able to with a business improvement district based off of a use.

So if you're a flower shop or a coffee shop or an attorney's office, you're you have a low your your intensity is a very low intense use. Right? If you have a nightclub and you got, you know, 600 people in there at once, yeah, you're gonna have a higher intense use. There's gonna be needs for pulse for service. So that being the case, I really don't think that the taxpayers of Fullerton, should be footing that bill.

And I think the downtown business improvement dis a downtown business improvement district can be the vehicle to at least eliminate that hemorrhaging. So somebody called in earlier talking about, hey. You know, I I got shot. What what are you gonna do? You gotta find out where you got shot first and try to stop the bleeding, stop the hemorrhaging.

So that that's one one thing I wanted to bring up. The other thing is, David Grantham, thank you so much. You gave an excellent presentation about the state of affairs. And, unfortunately, we got here because all the prior city councils I've been following Fullerton politics since 1985. And all the councils, they were no nobody took an interest in the roads because, like, in '85, the roads were okay. '95, they were getting worse. 02/2015, oh my god. They just you know, that's what happens when you don't maintain something. It, you know, it it everything needs maintenance. Everything.

And then the last thing I wanted to thank or the last person I wanna thank is the woman at the end of the table. I don't know your name, but you had some excellent comments. And and I like the way you think and how you approach this today, and thank you for coming to this meeting. And I wanna also thank all the people from the public that came out of their house, come to the meeting, and apologize for not being there. Woke up this morning, not feeling too good, so I didn't want anybody to get sick. So thank you so much for allowing this meeting to take place. I look forward to the next one, and I'll I'll leave it at that.

Can I ask another question, mister Grantham? One of the things that I remember is that, measure m two funding requires some matching funds. Can you maybe discuss that a little bit?

It does not require well,

it requires a city to fulfill seven two nine requirements to maintain the funding. One of them is a maintenance of effort, MOE, which requires based on our general fund revenue. So there's a this year, we have to spend a minimum of $5,000,000 of general funds on the street. And that can be street improvements. That can be street maintenance. It can be our maintenance guys' efforts on the streets. But you have to spend that x amount of dollars to maintain, receiving the supplement finally.

We foresee that we see this to be sustainable

with the current situation?

It's tougher and tougher and tougher.

Mister chair, I I understand I'm speaking of order, but I am not a single room. Can I ask you brushly about that? Because I think it's an excellent judgment on the maintenance of effort. As I remember, there were conversations during a budget conversation, the contract budget process, you know, there was a recommendation to take our maintenance of effort dollars, about 5,200,000.0 to 5,600,000.0, but to actually make sure that we were gonna set them aside from the fund balance or from the reserves. Mhmm.

And so I have to put on a table that was one the comments I was gonna make today, so thank you for reminding me. But I really hope that that issue has been resolved because I think we could have a bigger budget deficit than we actually. Meaning that if our staff had done what they told the public they were going to do, which is set aside that 5.2 to ensure that we were to get those dollars managed in the future, then we don't have, like, a $10,000,000 problem. We have a $15,000,000 problem. So I that would be really interesting to get that addressed as well just so that so that I have confidence of that. So if I'm telling stories at school, then I tell people to my mom that I think they couldn't write about that.

Yeah. Mhmm. Do you have a quick question? I didn't go to the any other thoughts from.

I I would I would be interested first to have to answer that question. Another missing binaural note or something.

I don't think it's very missing. It's just that it's valid. Well, valid. So it so it shouldn't be counted in that button backwards that they're saying.

Maybe on the

Maybe on the the pavement treatment, there was that that kinda struck out during the infrastructure portion. And on Fern Drive was probably two years ago between Euclid and Woods. The city tried something. I'm not sure what it was. They tried something. Uh-huh. Yeah. That one didn't work.

It didn't work. What was that? That was. Yeah.

That's still something.

It was, like, pilot project that we tried, and I failed miserably, and I will never use a ducan.

Okay. Gotcha. Yeah. To

to the to to your defense, I think that got taken care of really quickly.

Yeah. We went ahead and did it with regular slurry to to cover it up. But, yeah, it was we thought it was a good product for the application, and turns out not so much.

And was that because the road was too deteriorated at that point? Maybe there's other places that

would No. I think I think the, the product itself was not as it said it was supposed to be. So we were unupselled. We did our due diligence with other agencies. They said it was okay. Our experience was not. So I am not going back to it.

And infrastructure, it's kind of anecdotal, but I feel like ten years ago, like, there was kind of, like, a crisis with water main breaks.

Mhmm.

And I feel like that has kind of reduced to some extent. Am am I feeling that right?

Or Generally, we have less water main breaks than we had in the past, but we we have those situations where we may get five in three days. Sure. But in general, the volume over the year has generally decreased. And a lot of it has to do with the fact that we replaced a lot of mains where we were getting a lot of breaks.

Okay. I have a

question in regards to that.