City Council - Special Meeting

Thank you. recording in progress.

Okay, let's do that. Um, let's see. All right. Good morning everybody. Um, today is uh Saturday, February 28th, 2026. Um, this is a special city council meeting. This is a budget work session. Like to call this meeting to order and if I can call upon council members Armenia to please do I can't believe. Ready. Begin. I pledge allegiance. To the flag of the United States of America and to the republic for which it stands, one nation under God, indivisible and liberty and justice for all. Thank you.

Thank you. Next, madame city clerk, you can please take morning. Council member present. Council member Munia Jr. present. Council member Goldstein present. Council member present. Council member Sire president

present. Thank you. Uh next is public comments. This is reserved for anybody in the audience that would like to make a public comment on something uh on the agenda. Not on the well in this case uh on the agenda. U I I believe this will probably be the one public comment that we have of the afternoon. So um if um if you have a public comment I do have one card. Um, this is from uh Teresa Rosendez. I guess you can walk up here. Hi, good morning everyone. Um, Teresa,

thank you. Thank you. Okay, so um so glad to see all these people here today. Um, so with the slide deck of the last budget meeting, there is a projected budget deficit in 2027 of $32.5 million. And with the funding of measure C, if we take all of that projected funding, that's about $20 million. That still leaves us with a $12.5 million shortfall in 2027, anticipating that all of the budgeted income comes in as projected. And what has happened in 2026 is the anticipated budgeted income has fallen short. So with that in mind, um consider, you know, consider other ways to make up that 12 minimum 12.5 million shortfall. And that may be I'm just throwing ideas out there. um more cuts, lows, temporary um salary cuts with the idea of adjustments being made. And I know these are not popular ideas, but um I know property tax increases is not a popular idea, especially with Hayward Unified School District putting up a bond referendum to raise money um that will affect homeowners. So, thank you for your time.

Thank you. Uh our next speaker is TJ from Haywood Concerned Citizens online. Go ahead, TJ. Hi, this is TJ of H Concern sitting on behalf of myself this morning because it's important to me that at this desperate time you keep the needs of our H residents at the center of everything that's on the table. How will you earn back trust? You weren't being transparent about your your budget situation the last three years yet. Y yet you got us to pass K1 and now you're banking on the magic fix of the quadruple business license tax to help sustain our city. While over at HUSD, as Teresa mentioned, they're looking at a parcel tax measure on the upcoming ballot to help them out of their debt. And now you want to cut back on the very meetings that give the greatest opportunities for sharing information, increasing civic engagement from the public, and gaining that trust back. How many ways are you going to burden our Hayward taxpayers to help fix what your governing body has neglected? And yet at the same time, you strive to be attentive to the request for more bike lanes and a redress fund, which Hayward should have no financial responsibility for whatsoever. Maybe our council seriously needs to look at their 67% raises and redirect them toward the redress fund. No more funds spent on excess consultants. No more borrowing to close your budget. Those measure C funds that all the hopes and dreams were built on, they were never going to get replenished. That's the sad reality. I'd like to see a list of city staff positions and services that have already been cut so we have a realistic understanding of what to expect on various uh departmental response times going forward. And finally, ICU proposed

eliminating jail operations. I seem to remember from the November 14th, 2023 meeting that our chief said if the jail was downgraded or eliminated, officers would have to transfer arrestes to Sanorita jail and it would have significant impact on HPD's ability to staff the streets because they'd have to down a unit. So, please consider that before making this decision. And those are my comments for now. Thank you.

Thank you. Uh that is it that I have for public comment online and I don't have any more cards. So, I'd like to close public comment and then uh return to uh the room. Uh and and before I kick it off to uh the city manager uh to open up the work session, um I wanted just to open up um the the morning by saying uh thank you to uh to staff. Um uh you know uh I can only imagine uh the difficulties it is to put together uh what is it an 87 slide deck. Um I am not holding to the five uh seven slide rule uh today. Um but you know there um I know that you know it is uh this moment in time uh it is really moving us in this position to really think about our core services and think about um how to um uh continue to provide the highquality service uh that we are really responsible for and that we uh have to do as a city. Um but I also I also want to be um you know I also want to be careful on uh how we frame uh some you know of our conversation today. You know uh it is no secret that we are in this budget situation. We're here and we're moving through this and and you know based on my reading of the of of the of the slide deck I think we're on a path to recovery. It's going to take some time but we're we're going to get there. Um but I also want to be careful and um uh and not frame this as while we

are in this position that we are going to be compromising highquality service services that we are responsible to deliver every day to people in the city of Hayward. We can do two things. we can be in this situation work to get out of it and simultaneously we can continue to deser to deliver highquality service. There might be some changes there be some tweaks and I mean and that's you know that is part of what we're trying to do here. Um, but I don't want uh what I don't want is uh to project a message from the council uh and particularly for me, you'll never hear me project this message that because we are in this situation that we are uh that the entire city is um is uh is compromising service and quality. And so um um and so I just want to sort of say that because uh over the last uh you know several months uh there has been this sort of tone and tenor that you know um that I wanted to uh that's been out there that I wanted to sort of respond to. Um one thing that I have to uh I also want to add is that um today uh I have full faith in uh our executive team. Uh I have full faith uh in the council. Uh I think um the executive team and the council uh uh we have been transparent, we have been open, we have been honest and um and uh and we have been you know available. Um you know we have um uh all you have to do is uh look at past council meetings when we uh addressed this issue. Uh we addressed it quickly. we addressed it openly and honestly. Uh and um and so uh to

uh to say anything otherwise uh I think is uh just not paying attention to what uh our council meetings have been. Uh this council I think has been um uh uh accountable, responsible and and we have been addressing this uh openly uh every day uh in the public. And so, um, with that, I, uh, wanted to turn this over to our, uh, city manager, Janu, but I, uh, did not want to start the meeting without saying thank you, uh, to, um, uh, our city manager, to our director of finance and her staff that have been really over the last, you know, few months, uh, that have really been able to sort of, uh, make the pivot and turn this city in a in a place where we can have this conversation uh and also uh of course the uh the work of Mary Thomas uh over the last several months uh to uh you know really sort of usher us uh to get to this point. Uh and so uh with that it's going to be a long day today. Uh I see there's a lot of uh snacks outside. There's a lot of coffee and I saw gummy bears. And just for the record to close this up, um, uh, Chuck Finny and I, uh, sent each other an email to make sure we wore the same shirt, uh, today. So, this is our, this is our good luck shirt. And so, uh, with that, uh, madam, city manager, take it, please.

Now, you're going to have to wear that every budget. Good luck budget shirt.

Thank you, Mayor, Council, um, Jennifer, city manager. And I just would like to take a moment before we get into the details, which is kind of where my mind is, but I do want to take a second to follow up on your comments, mayor, about just thanking staff. Um, this is, you're right, this was a lot of work and a lot of that occurred in our finance department and and Mary Thomas, but also all the executive team engaged and got involved. And so, this is a real the result culmination of a lot of teamwork. So, I just want to thank all of them, um, especially Diana and her staff. So, thank you. Um, and we've tried to set this up where we'll be able to, you know, this and I guess even in line with some of the comments that we just heard, like you're not approving anything tonight. Um, this is just because of where we are financially and how big the issues are that we're facing over the next several years. We before we get into the budget like true budget where we're actually talking about very specific budget work sessions in May like we would normally do we felt like we needed to get you know we really need to get ahead of it and start to put some numbers and ideas and thoughts out there. We do have some recommendations for you but none of this is set in stone. This is a chance for you to tell us course correct us or give us your ideas. So we're not you're not approving anything. more direction you give. Obviously, the closer we can get the budget when we get to the budget one session.

Um, but there are still items that we're researching, but we we're we're kind of honing in on them, but we might need some more time. And so, I just want to acknowledge this is also kind of a working effort. So, these numbers, we think order of magnitude are correct, but they might, you know, shift here and there a little bit as we start to really hone in on things. So, I just kind of want to acknowledge that this is the first step towards balancing the budget for next fiscal year, but also looking beyond and really start to think about what we need to do to get us back on track over time. Um, so I won't say much more, but you can see we've got a packed agenda, so we'll keep moving here, but um, the first part is really to set the stage. We got a financial forecast. We have our consultant here on business license tag, modernization. We do have some proposals, a recommendation there, too, to start heading in certain direction. We want to get your feedback on that. Other revenue options, cost savings and efficiency measures. And then I do we we will show you a recommended approach um to the fiscal year 2027 budget beyond. I want to get some feedback from you and then we'll take lunch. We do have um since you all have your laptops or iPads, that's great. We will be sending out the recommended approach. You'll see we'll call up a spreadsheet for you that has a bunch of toggles and ways. So at lunch if you want to work on that a little bit and work on you know while we're at lunch kind of look at different scenarios and come back and give you plenty of time to give us additional feedback and thoughts. So, and then last is accountability and next step, which really delves into some um policies, draft policies the finance director put out there. If for whatever reason we don't have time, we can always bring that part back to council um work session or you know, so if we if mayor of you feel like we're in good discussions and we don't have time, we can always take that one off and bring it back another time. So, it just gives us a little wiggle room at the end. All right, I'm going to jump in um setting the stage then. Next slide. We thought we would start Oh, you want to go to Yeah. One more? Yeah. Um start with just what caused Hayward's fiscal challenge? We

get this question a lot. We get it from labor partners, employees, like just really being again in the interest of trying to be transparent. I mean, there's a lot of information here. We've tried to go the extra mile just being as transparent as possible. Um and so just want to acknowledge what our team, you know, what we believe caused our challenges. Um there were increased staffing uh and programs that were dependent on one-time ARPA and grant funding that got built into our operating budget um without kind of a long-term plan for how to fund those. Then we've entered into labor contracts that weren't aligned with our market and fiscal realities. We faced and this is happening everywhere uh not just here in H. We faced slowing and declining real estate and market related revenues. there's very little real estate development that's occurring anywhere in the barrier right now um across all kind of types of development and and we're cities are dependent primarily on property related tax revenue. So the fact that even though our property taxes don't goes down they slow down they do slow and if they slow that means they're not and our expenses are going up faster there's there is this kind of misalignment. So it was kind of a perfect storm in terms of um some of these other changes that we made at the same time that revenues were were declining or slowing down. And then you know to be really honest and transparent we don't think we adhere to financial best practices. So we didn't maintain realistic financial projections. We weren't budgeting accurately for overtime contract increases lead payouts. We were using salary savings especially in the police department as kind of a crutch. And that is that is typical across all cities is that oh yeah we have that money in police we're just gonna that'll just work itself out at the end of the budget, right? Like it'll all kind of work out. We'll have enough savings most usually in police department but across other departments too and that'll kind of there'll be enough there to balance whatever. Um and obviously that didn't work out for us. So you know we need to make sure we're budgeting salary savings, yes, but also all of the things that we were using to

kind of likely payouts and other things. So now we're trying to budget those things and then we did purchase a risky real estate asset that was budgeted as a non-liquid reserve. So some things that we wouldn't we are not recommending doing moving forward and we'll have policies in fact put in place to try to avoid that in the future. And then again, no, it's just that there was also leadership transitions which just inevitably is makes it hard in an organization when you have those transitions and sometimes there is a delusion of authority and responsibility and not sure who's doing what and when you have that at the same time you have these other things. Um, and I don't need to say this, but you know, we all know what happened where we did um end the fiscal year 25 with a overspending $30 million leaving our reserves. So everything we have balanced that and director uh Hillbrand is going to talk about that. Um but I did want to start out with just acknowledging the problem. Um next slide.

And to the mayor's comment, we absolutely this team worked super hard and our staff work super hard. We are continuing to provide a high level of service, but we do want to acknowledge that there are some impacts that we've had to have based on services. So, also trying to level set some expectations that we're going to try to do more with less, but there also you hit a point where you can't do more with less. Um, and there may be technology or other things we can do to try to continue to provide a high level of service, but there have been some impacts and just wanting I think the council had asked for some of that. So, I just wanted to be explicit about what some of those are that we think have happened. We've reduced library hours u and programs, eliminating some community grants. We have a reduction of two fire companies right now. Uh we do have some longer response time for illegal dumping removal. Um and then some longer response time for permit review and inspections. So these are all things we're we're watching and you'll hear later some technology things we're trying to do to kind of mitigate for some of this. Um but also wanting to acknowledge that we know there have been some impacts. Next slide. I'm going to turn this over to Mary um and who's going to I think the council had asked for kind of just a larger reset of what are our core services? What are our priorities? So as you go into this conversation, you're keeping these higher level priorities in mind when you're giving us direction of how to move forward. Turn over Mary.

Yeah. And so just just I'll be very very high level this we did last April was the last time that you saw the strategic road map, we did go through a voting exercise, a ranking effort at the time. Um and I'll show on the next slide some of the higher rank projects. But just staff is keeping in mind these priorities. Um right now we have limited uh in terms of special projects or special initiative funded out of the general fund. We've more or less reduced almost all of those. However, for grant funded projects um we have some of those going on. So I will I will move to the next slide on that. Um so we do still you know have these are some of the highest rank these are the highest ranked projects that council had last year and many of most these are all ones that are continuing. So for example the bike distribution is grant funded. So that is continuing. Um and then some of them are just part of our normal um work uh like you guys have seen the zoning amendments to remove barriers to businesses. So that work is continuing that has been absorbed uh in the DSD workload. So just wanting to say that even though we have had reductions to core services, some of these the these projects that were all high ranked were we're were focused on and we will be coming um in the next budget session this this spring. There'll be an opportunity for department heads to speak more specifically about service impacts from cuts, talk about their core services, and for us to return to the the highly ranked projects that you guys had from last year and make sure that we're being clear about which ones are continuing or which ones we've had to pause so we can include in the budget document and happy answer any questions about that at the end of the section. And then in addition, just wanted to return back. Um, Miriam, is there Oh, can we move that um that thing? Can we just Is there a way to just get it off the screen entirely or move it to the bottom and move it off? Yeah.

Um, so we wanted to remind you about the resident satisfaction survey. I believe council asked for this that happened about a year ago, last uh March and April. Um in general overall the satisfaction with quality of life was the highest point in more than a decade. So that was good news. Um so overall services have been going really well. We have had some impacts. We'll continue to monitor that. The greatest concerns just to remind everyone were cost of housing. These are similar to regional homelessness, crime, traffic con congestion, street maintenance and litter and graffiti. So those are the ones that came up. And then the service priorities are actually very uh match our core services very well. So emergency response, safe neighborhoods, streets and sidewalks, um supporting local businesses, and then a clean and maintained city and preparation for disasters. Those were out of the the the long list, those were the top ranked ones from the community. So just as you're reviewing today, I just wanted to ground us in in that. And I will now have hand it up back to Jen.

Yeah. Great. And I think um so we did put here I'm not going to go through all these. These are very detailed and the council has comments but we there was a request for kind of lessons learned. So we as an executive team you know put some of these together. Some of them are very specific. We're using these to really drive our policies and make sure that our policies kind of address these um and I'm not going to go into all of them but just broadly one is you know maybe adhere to financial best practices. So making sure that we're doing that and the um finance director looking at our policies, making sure we're incorporating those improve transparency and accountability. So making sure we are being transparent. Um that's where a lot of the trust comes with employees, with you, with the council and executive leadership is making sure we're being transparent and accountable to the things that we say. So there's a whole set of some ideas and lessons learned there. Practice strong leadership at all levels. So, um, you know, not just at the executive team, but throughout the city and at the council, too. Like all of us being prepared to make difficult decisions, raising and vocalizing issues if we see them and questioning and and so, and then lastly, financially constrained labor negotiations and contracts. And there's a number of suggestions that I did there's lessons learned from where we got here. So, I'm not going to go into all them, but they these were fully attached in even more detail to the staff report. So folks are welcome to look at this in more detail, but wanting to acknowledge that we we are learning our lessons. So I'm sure that's the beginning here. Now I'm going to turn it over to Diana who's going to tell you how we closed the gaps. Good news. Close the gap. I think everyone knows that. But just to walk through a little bit what we did and then we'll we'll get into the meat of moving forward. Um like like mayor and um city manager I wanted to also acknowledge the work of staff um and the budget team and and they are here and you'll be hearing from both of them today. Um so Fran and Nick and and Michael who's stepped up he's our revenue manager and stepped in some other areas as well. Um so for example

in closing the gap it's not just figuring out what things we're doing which we'll talk about a little bit but exactly which of the hundreds of line items in the budget has to be adjusted. So um you know the recommendation is X and where does that for example a vacancy change where does that actually happen in our many lines of budget. So that's that detailed work that the team has taken a lot of time to do in order for us to come from what we plan in November to a fully balanced budget in our financial system so that then the department heads can manage to that and of course all of their work as well. So of course we did workforce reductions um and it's not just um the uh VIP and the layoffs and the terminations but also management of the vacancies and understanding where the salary savings is being used so that we don't we still account for that cost. Um so salary savings is being used to cover another cost. We don't want to reduce that officially in the budget. Um we'll be working on that for next year so that we're we have more transparency and ability to see that. Um we did use some fund balances that includes funds from our um OKAP trust, our other post funded benefit trust um set aside for um primarily uh retired medical. So that is available. It's meant to be used uh further in the future as that uh liability continues to grow, but it is available to us and so we took that action. Um and then some measure C funds and then um we did do some concessions and um and for nonrepresented members some changes. So fire department made some changes to the minimum staffing. Uh there were some changes in the police department and furlows and pay reductions for council and unrepresented groups. So we wanted to acknowledge those those changes and those staff that have accepted that. Um we did take some other costs saving measures eliminating travel um looking at CIP for unspent balances reducing and cancelling non-essential contracts uh reducing all departments went in and look for opportunities to reduce service and

supplies uh we're in the midst of a business license tax audit to bring in some additional revenue um and we are work working with hard to reduce our um event spending and again this was a partnership of all the departments really looking deep into the budget for some opportunities for savings and again employees directly as well. So with that, we'll bring it back to Mayor Senz. Okay, Council Member Roach.

Thank you. Yeah, and thank you to everyone for everything you've done to do this. It was great going through the um staff report and the um and the slide presentation. Um I I wanted to ask one thing about um the OPED trust. Can you explain a little bit more about how we can reduce that payment and still meet the obligations out of the trust?

Yes. So basically we um we take a set of money every year and transfer it into the trust, but in the operating budget is where we're actually making the payments out. So there's about a 1.5 million transfer into the trust, but still within the operating budget, we're spending $3 million. So what we're able to do, we we have about a $40 million balance in that trust. So we're able to take the amount back from the trust uh to reimburse ourselves for payments we've made to employees during this fiscal year. We can't go back any prior years, so we can't use that to help build the reserves back, but we can do that for this year. And of course, we'll be looking at it in future years. And is the balance enough that we we're not playing like that's this isn't a risky situation to be doing?

It's not a risky situation, but again, in the future, as that liability grows, you have more people retired and and anticipating that benefit, you'll you'll have some potential risk of needing to use more operating funds to cover it. Okay? But but we think in the near term as a one-time use and you'll see it into the out year of the forecast. So again um this year we we had already put money in so we can't undo that. Um but in the future years you'll see both us not recommending not to put money in and also drawing money out.

Okay. And then um on um the one and maybe I guess we'll talk about this in the future but just you know the the um what what our strategy is going forward for one-time funds. you know that that you maybe the Bart car situation maybe other funds but where that goes so that we don't rely on it for new positions which is I think a practice that we did in the past and then those positions just got transferred back to the general fund right without funding so what what is our so within the budget policy that would those one-time funds would be sourced towards one-time projects onetime needs or building reserves okay

I I think it'll take us some time to get all the way to there um but you know in the future as we see for example if we were for they have something again like that barcore situation, you would see us looking for those projects that maybe have been deferred and to bring those forward um versus you know a long-term salary change that has the ongoing impact both in the salary itself but you know person liabilities and that type or restoring our reserves. Yeah, I would research, but once your reserves are at your status that you need, you look at some of those other projects. When we get into the recommended budget, I'm happy to share a little more about my thinking about why I'm recommending using continuing to use some one-time funding and because I know there's a desire to try to get structurally balanced possible, which we have too, but so I'll talk a little bit more about kind of my thinking about why I'm not recommending that for next fiscal year and that kind of doing it over time as opposed to all at once.

Okay. And then I just two more concern. Um the other thing is around salary savings. So like it sounds like there was a lot of back of the napkin hoping in a wish that the salary savings were going to cover all sorts of things. Like it seemed like they were potentially you know maybe feasibly double counted at times and so so how how are we calculating now each position so every department knows exactly what their budget is and then if we're going to borrow from that budget for something else in the city like how is that now being tracked? So what was happening in the past if there was a vacancy then 25% of all those vacancies were set in another account as like a negative. So you had $10 million in vacancies and we would take 2.5 million out. So you had 7.5 million and but then that money would get there's some use of that. So for the PD for example where the vacancies change a lot there's some reasonable use of that for um overtime cost because they have more vacancies. Uh but it was also costs that we would know better. We would know for example leave payouts there's an ongoing cost of you know people separate or retire there's a payout amount or some other special pays education pays. So what we're going to do differently is actually budget those items and so maybe we'll bring up the salary savings number higher because we actually are budgeting those items but we'll be looking at the actuals and and then also expected. So if we expected an extra high number of retirements we might bump that number up of of lead payouts a little bit higher. So, we'll be looking at more transactions. That's getting into the the weeds a bit, but that's how we will be looking at it. I like the Right. I think the weeds I'm glad you're working on the weeds because, you know, I think that's what didn't happen before and that's what we need. And then and speaking of that, the other thing is I I want to thank you for the lessons learned because I think we owe it to our workforce and to the community to understand that we are looking hard at what went wrong and what the lessons learned are. And and one thing I did want to see because we were asking for it. So when this started to reel itself that we wanted sort of a quarterly actuals update and I mean and I know maybe I know revenue comes in at different times so it's not always easy to do that to see what that looks like but I think for all of us to be doing that you know maybe I would like to see

that you know at least for the next couple of years right so that we all are aware of where we have to pivot really quickly and I know you'll be doing it internally now like I think that that's going on but I would like to see that so we don't get to the midyear or the final year and we're like oh whoops you know here we are we did see the monthly out recently with the after the CBSC meeting, council budget and finance committee meeting. So I believe that got sent out to the rest of council and is that the plan going forward that we get monthly actual you'll get monthly at some point we may draw them back if we're more stable but for now we're fine with the monthly again understanding some things change like tax and and I think that the one we sent will get improved on over time um we're we're still still in the kind of early phases but it won't change a lot just in general

just a reminder on that one in particular is that we all a lot of the changes for this fiscal year were kind of implemented at the end of January So February, I think it'll be really interesting to see how we're doing after February because that'll be the first full month of like all of these changes. So I think just be aware too there's a lot on the cost side that we adjusted in January. So it is a moving, you know, be aware that there is kind of a narrative associated with it and it's not Yeah. As long as you kind of give the caveat with things to report that maybe that would be helpful. Yeah. So as as there were separations due to layoffs or or voluntary separation, January had a higher salary cost than what then expected and you should see that go down. Thank you guys. And if we don't see a go down ceory, well then now now that's our little yellow flag of leg.

Yeah, those are things we'll be looking at. Council,

thank you mayor and thank you guys so much for pulling this together. I can't imagine how much work it been to prepare for today. Um but just a couple of quick questions. So when we talked about, you know, kind of core services up front and examples of impact to core services, I know that we're also working really hard to make sure that we're maintaining core services and we're finding a way to be much more, I would say, purposeful in how we delineate core services from discretionary services. So I do want to maybe see a future double click of what core services are to the city because I don't think that they were clearly defined here today. So um and then maybe even prioritizing those core services so that as we look you know based off of the data that you have here you know the resident satisfaction survey the strategic priorities of council but those driving what will then become our list of core services that we can then align to and then that can start to be our north star for how we start to look at making decisions around reducing services or whatever it is. Right? So just wanted to kind of throw that out there.

Yeah. So yeah, and we it was mostly just a matter of task capacity to get um that, but that's the goal for the next budget work session that you guys would see is so in the budget document. Historically, we just haven't spent time on this in the past because we haven't, you know, this hasn't come up. Each department has a list uh at the beginning of their description to the department of their programs. Um those could probably those could be used to be updated. I think this is a year is a great year to do it. So these are our core programs and there's usually some metrics that are associated with each of those. So I think that is probably slightly what you're asking for is for each department when they're talking about their budget, what are their core programs? What are some metrics they know that they're

and maybe highlight what's discretionary because I can see someone saying everything is core services and it's like well here are the guidelines for how we're going into this activity and here's where your line is right like you can't have more than 30% of whatever it is. I don't want to be arbitrary with that, but you know, just being really disciplined in how we define that. I think it's going to be a good activity.

Just as a I do think though, I mean, and I'm not trying to take an easy way out. I I do think that we believe as a team that we have reduced anything that wasn't. I mean, I do think we feel like we're probably down to what the core services are. Um, and that most things that we thought were kind of discretionary have been eliminated. Um, that might not be entirely true. We'll look at it more. I'm not trying to say that, but I do think we feel like we're down to our core services right now. Um, and I do think some of what we're recommending, you'll see, is to not cut certain things or other things. And so part of what I'd love to hear today is like, did we thread that needle correctly? Do you want, you know, like I think I'd love to have some of that conversation today when we recommend budget.

We're we, you know, I mean, not to jump, you know, but like keep, you know, not eliminating the entire NAV center, for instance, but trying to keep it and some of those things. We've made some judgment calls here and so it would be good to have some of those conversations today. Yeah, that Yeah, because you know and then I think that would be especially as we think about kind because if we're thinking about kind of core services and this resident satisfaction survey, where does homelessness sit in terms of core services that we need to provide and where does that rank up compared to other services? Because I don't think today's the conversation to say this one's more important than this one. But I do think that at some point if we're going to really talk about, you know, austerity and a budget, perhaps we're going to have to get to that point, right?

Yes. And we're going to have some of those conversations later, right? Like if we aren't because you'll see when we get to the end is like how do we fill that final gap and it's either, you know, through concession bargaining or it's going to be additional cuts and then we're going to have to I think in order if we have to do a 2% cut, it's going to be it's going to be a lot harder and there are going to be some of those harder conversations. And it sounds like it would be useful. I mean this organization already went through a 5% um supplies and services cut during COVID and then additional to to understand historically what are these discretion what you're calling discretionary have already been cut. And I would say discretionary services not spend and I don't want to like you know I mean there's I think some controversial things that we can debate. Are they discretionary or not?

And I'm not talking about spend though because I get the spend. I'm talking about services like what services does the city provide that aren't legally contractually or regulatory obligated for us to have to provide that we might say because we don't have you know a budget to support it we're not going to be able to even though it may not be popular like we heard from the callers this morning we might have to get to a point of saying we just can't afford it and is it the library is it the animal services right and or the jail

or the jail right and of those three are any of those considered core depending on you know so anyways I mean I know that those are the tougher discussions but I think we're going to have to eventually move there and then when we think about the core services like the library that we saw cut uh you know library hours community grants the fire department the question that I then have is what are we doing to create partnerships or to create grant opportunities so that we don't see such big service impacts because and I'm sure that the money is not just freely out there right but where can we go and find money to keep our library open through grants because I'm sure there's grants out there that would be very supportive of library, you know, or even the fire companies, right? like is there money that so is there also short-term investment that we can be making now to help us kind of create more long-term health and stability with our budget just as a consideration of protecting our core services within the context I guess within the the duality of we're faced with some budget issues we have to maintain core services as the mayor said how do we do both at the same time right

well you'll hear a lot so yes and you'll here. We'll talk about some grants specifically for the items that we're looking at actively for some items that you mentioned and so we can talk more when we get into other revenue options. Um and then on the technology side there are some things that could help us. So we're we are looking at some of those things. We're open to other suggestions. That's it. Thank you so much. Okay. Um

and just a couple of points um uh impacted services today. Let's be careful with the longer response times for permit review and inspections just because it'll harm our academic economic load. So be careful with that. And as far as priorities, the and the survey uh our residents feel that the high cost of housing is is their major concern, but we can't do anything about that. So, let's concentrate on the other priorities and leave the um high cost of living to the fact that we live in the Bay Area. It's the most expensive area in the United States. Um uh and if their other priority is crime, uh if we were to eventually talk about a getting rid of our jail, that's going to harm the crime aspect of it. So that's something that we should not be considering at the moment. Okay. Very good job. Thank you. Council member,

I want to thank staff for the presentation and I want to personally thank Jennifer, Mary Thomas, Diana Hill, Todd Roman, Nick Lens, Chief Henry, Chief Matthews, Michael Wson, and Mariam Lind. If I miss anyone, apologies, but I know specifically a lot of those folks worked on getting us here today. So, I just wanted to acknowledge that. Um, I also want to thank the residents and labor partners and businesses who called in and reached out. And I think the presentation is showing the cold hard truth of where we're at. And um, I know folks are demanding transparency. The slide is saying it right there. It is is showing where how we got here. And I think we've also said that in multiple presentations. We communicated that directly to folks and I I think we are looking at a new team as well and I think that is part of the accountability that we have and I just want to make sure that team that's working on this now to let them know that I'm finally getting to a level of comfort as we're trying to work through the situation of seeing the the slides show exactly what we needed to see in order to make more informed decision-m. Um, I want to also reiterate the need for 10ear projections. I know we're not there yet, but I do think that is something that's one of those practices that we've gotten away from that we need to return back to sooner rather than later. Um, and I appreciate the uh the expenditure tracking and uh real time tracking of what's happening with payroll and overtime. And I do appreciate our workers in understanding that uh there is a balance of uh needing to have the core services. Yes. But there I don't want overtime to be demonized. There are

times where you we may need overtime, but we also have to keep the butt city's budget in mind when we're we're thinking about that. So I want to thank the the staff because I know that's that's a huge adjustment for for folks. Um, I I also agree with the mayor that um some of the items that were listed as our priorities, those are those were what we were responding to. And yes, we used ARPA dollars to respond to those community needs, those community requests. And and I will say the community includes more than people who call in every week, but it also includes more than people who are reacting to the latest incident that is happening on the news. There's other folks who we were responding to into those community needs. And I feel like the ARPA dollars was an opportunity to respond to issues that were bubbling up in our community and we were responding to it. And I do think that the adjustments that needed to be made, we're making now and it's happening now. Uh so I will say that a lot of the programs I do agree with council member Bonia that we need to have these core services looked at, but we also still need to be innovative. We still need to be creative. And I don't want to I don't want to just look at cutting programs. I want to look at us being innovative and making sure we're being efficient and looking at the tools that we have that uh that are out there in the in the latest technology that can help supports that have been doing their their work more efficiently. Uh I also want to call out how we got here really is also on the backs of workers. We relied on salary savings but also on the backs of

workers. And I understand that the workers saw the market changing and we weren't keeping pace with that. And it it and this was us doing these catchups. Um and I think that staff and and we're trying to respond to to that need as well. Um so I just wanted to just acknowledge that as well. Um the question I have is and you touched on it a little bit and I think we're going to go over it a little bit today uh is that we took on a risky investment with the send place but we also have a lot of risky investments that have sat on the books as assets for a very long time and just wanted to know more about what our approach to that is um in the future. So if you want to respond to that part of it now or we can respond later. We do have a slide and our real property manager Tracy Irvin is going to join and we could talk have a more you know but we are we are looking at that we're prioritizing properties and we are trying to sell at least one or two this year and and but we'll get into more of that if you're okay waiting till that slide but we're actively working on that and I would suggest to get to your point it's not just money that we can sell a property for that helps us restore reserves but we're actually spending our maintenance services folks are going out there maintaining So there's actually costs

um and then some of them present risk where if right now they might be performing okay but if you know they don't if something changes then we might be on the hook have to pay more right so there's the risk factor too that we just we shouldn't be support we can't afford to support right now so you'll you'll hear more later about that too great um and yeah I'll have more questions later thank

thank you um okay just two fine thanks Going to what council member Andrews was saying, it would also be useful just to have guidelines going forward for how we make informed purchasing decisions, right? Not just how do we do these, you know, sell and do divestatures, but because, you know, now it's saying, you know, we purchased a risky real estate asset, which I agree, you know, but at the time I didn't really see it as that risky and maybe I just didn't see it that way. But is there like guidelines that we should be or a set of questions we should be asking ourselves before we make the and I'm sure we should have asked this that question before we did this but just saying going forward if something like this comes up what should we be asking ourselves to make more informed decisions and then as it relates to the lessons learned I really do like those but the other thing I was wondering is can can we just kind of also make sure that all of those are tied to some sort of concrete action that we're taking cuz some of them seem like, you know, pretty lofted like, you know, attain attain uh retract uh retain wait attract, retain and train qualified staff, you know, I'm like, okay, like that's great, but like what does that actually mean? And who's going to do that? Sometimes I see like these after actions or lessons learned almost like as a hot wash, right? Like here's all the things we learned. Here's the person who's going to take the action. Here's when it's going to be close. Here's how we're going to make sure we're not going to repeat. And I know we're not doing that here, but if there's things that are actually tied to actions, so we know that these things aren't going to be repetitive. Even when we talk about training for council, like is that going to be coming up soon? You know, is that just going to be for new? Like, what does this actually mean and how do we operationalize it? I think would be useful. But I definitely think this is incredible. So, thank you again for pulling this together. Okay.

Thank you. And yeah, I just wanted to just one last little comment. Um, uh, Councilman Andrews mentioned, um, sort of the external forces that sort of, you know, lessons learned and a lot of what you have here are internal dynamics and internal decisions. Um but you know um we were also uh you know not only you know 2020 2021 22 but we were also responding to external forces and you know and what I had said you know uh uh some time ago at a council meeting um I think to the council's credit we never said no to and so and I mean to programs and services that we had to get off the ground to respond to community needs. Anyway, that that was one of the things I caught last night that a lot of the lessons learned were internal internal lessons um that were coming from internal forces, not necessarily external.

But do you mind because I don't necessarily mean it was I I in fact think it was the right thing, right? Like we I mean I was here when we made the decision nav center and that was a reaction to the fact that homeless were it was a huge problem and I remember the staff report said this is we're using onetime money to stand up a program like so even though we disclo like the decision was probably the right decision to try to get people off the streets just and now we're having adjust to you know what what can we afford longer term so it's not I just want to be clear we're not saying it was a bad thing you know I mean I think it was the right those are probably the right decisions it's Just now we have to kind of reckon with how much of that one those one time things can we really afford to continue right long term.

Yeah absolutely right. Okay. Should we keep going this now this is like getting into the details

with the great lead in from council bonia. One of the things that is important is uh in terms of retaining and attracting staff and and training them is giving them opportunities to present and share with you their knowledge and what they've done to bring us to here. So, with that, um, Nick will be presenting our, um, five-year baseline forecast. And again, when you do a forecast, you're looking at large items. We're looking at the revenue items, the salary, benefits. There's a lot of work still to do and the margins and the details. Um, but Nick's done a fantastic job of bringing this to this point. A lot of back and forth. Try this, move that, add the wanted to acknowledge that and um, turn it over to a five-year forecast is a best that is a best practice. So here we are operational editing.

We don't have 10 just yet. Ready for every time I saw Mr. Mullins walk around the halls, you know, he was very intent, very quiet, very focused.

Um, so what you guys see in a few slides is your forecast looks like. Um, I'll go over some of the assumptions that we have for revenues and expenditures in that forecast. for the revenue piece, which we've kind of touched on a little bit, is that we are making sure for what we do have assumed it's something that we already have or that we've seen. Um there are things that as uh city manager has mentioned that are in the works such as our business license types that we're working to get uh hopefully passed, but um right now we can't that's not something that we can count on. So you'll see that in the assumptions that anything that we don't have is not included. our big three uh revenue generators are property tax, sales tax and uh unut until the unit tax. We receive projections uh from our consultants for those and that's how we project out um the finance team meets with the consultant the consultants for both of those quarterly. So as we receive updates we update we can update the forecast based on that information. Again, uh there are people that we work with. That's not something that we make up internally um to update those numbers. As for our other revenues, you'll there's a very large list of them that we kind of have bunched up um in the projection that you'll see, but we base uh those numbers on our actuals and what we receive each fiscal year. Um, so again, not counting anything that we haven't received and also not bumping up any revenues that we think may come in or anything like that. We want to base it on the actuals that we get each fiscal year. We do have some escalators in there knowing that the price of services and goods go up. So, we do want to adjust our revenues a bit for that. Um, most of them are jumped up conservatively between 1 and 3% um listed out for all our different revenue types. And then lastly, what you'll see in the baseline forecast is we don't

have any of the one-time transfers that council has previously approved um during budget adoption last June. Uh council approved a few uh transfers from other funds along with the November 18th. We don't have any of those included. That would require again council approval to move forward with those. Um so when you see the revenues, none of those are included will be in there. Next slide. um expense assumptions. We we have all the code is kind of built out for all the different bargaining groups for what we know uh are coming in for any of the outears that that will show u that don't have an approved contract. We conserely budget a 2% increase. That is generally industry standard. You'll see across other cities uh colas for bargaining groups that currently aren't under contract in their out years. You'll see about a 2 to 3% increase. Historically, we have budgeted for a 2% increase in those out years, which is what we've uh uh continued for for this for this forecast. Um the only exception is for is that 4% for local 1909 and 2028. And then lastly for our expense assumptions, we have included the uh the reductions based on the approved local 1909 and HBO HBA side um which we reduced out for this fiscal year. Those are only in effect for six months of the fiscal year. Um so you will see that included in the baseline uh forecast. Um the vacancy savings also included. It's rolled up. Um I believe there's a a separate line that you'll see in the forecast as well that shows what that amount is. Um and that also includes the

voluntary separation program and layoffs which is combined. Um, as the mentioned earlier, we are trying to accurately budget for other items that historically we haven't. So, we have included lead payouts, uh, cash outs for other incentive pays and similar to what we did this year, we are accurately uh, calculating what our overtime is expected based on our actuals with the colas applied as well. Um,

so we have that kind of taken into account to hopefully get a true real life savings for our vacancy savings. Uh, our Cal our Calers retirement costs will go into in about two slides I believe, but we receive an actuary report each fiscal year and CalPERS tells us what we need to pay them. So you'll see the jump there. We don't really have a choice in that. Um similarly for our workers compensation fund uh to maintain an 80% confidence level we receive an actuarial report that will tell us the amount that we need to spend each fiscal year to maintain that level. So in the baseline forecast you'll see an increase an increase to that that portion as well to maintain that 80% confidence level. And then the last three listed for maintenance, utilities, supplies and services and capital projects. We have assumed uh small increases or conservative increases year-over-year again based on our actual spend. Um we set those amounts based on our baseline for this fiscal year which was adjusted to u incorporate what departments were actually spending. Uh Mary mentioned earlier that we've had some fairly significant cuts to some of those areas. Since 2020, we've dropped supplies and services about 17 and a half percent. We know departments each year we're going over that amount. So we what we what we took to all of you in November was to say, hey, here is what we're actually spending in these areas. We know departments aren't necessarily going to hit those cuts. Let's start at a realistic number and then work our way back. Um, and you'll see that in the in the 5-year model that we pull up. Again, this is where we're at. If we don't make any changes, um, with all of these assumptions that we'll be working back back from to bring you guys back next. And with that, here's here's where we're at. That $32.5 million deficit that was

mentioned earlier for next year. Uh, again, that number is based on those on those assumptions as well as the out years. uh director uh Hillbrand will get into more detail about again why we're seeing that that increase. And um I did send or we sent this morning to all of you an email that has a spreadsheet that goes over this and then a year year-over-year um comparisons and you can follow along the spreadsheet or you can do this here.

I'll go over and we can bring up a spreadsheet. So, um, why is there, you know, we've did all these things this year. We had $26.5 million out of the budget and we still have $30 million deficit. Again, part of balancing this year was some onetime money that 1.8 or almost $19 million. Um, there's still some projected reductions in sales tax and property transfer tax. Um, still it's still going to define a little bit more. Um, there's an increase in colas. Mentioned the increase in coffers and workers compensation costs. Um there was an increase in utility costs. Some of that is just again things not budgeted accurately especially looking at our internal service funds. So we're working in those areas. That's some of that increase. And then again we've added some line items uh for new payouts and special pay just to better that. We've got that all up in a spreadsheet to see things kind of connect to each other. Yeah. So do you want to walk through this or should we walk through it?

I can I can I can do that from here. So again property tax we will see an increase which is typic% is the the permitted increase and then you'll get some other increase due to transfers. So as a property is transfer and it's reassessed. Um sales tax continued to come down just a little bit. And I do want to acknowledge when our consultants do a report in the the section there's portions that are confidential, but you'll see the actual math they're doing. They're saying, "Hey, this business is leaving or um and so there's a reduction of their sales tax or uh this one's going to be coming up and there'll be an increase, you know, an incremental increase." So we we do see that level of increase.

Um yeah, just highlight. So um in the real property transfer tax, we had increased it a little bit extra this year because we had the sale of Southland Mall. So bringing it back down to reflect kind of what we've been seeing in the market. And um yeah, our charges for services. Again, we had had some increases based on bringing over some deposits. Um and we've realigned that to be based on based on expected. So we took out these one-time items. So measure C, OPED, and um transfers in where we were just bringing money from other funds where they had available. it' be increased by

and I don't there any yeah salaries and benefits went up 7% that's based on what Nick was saying and then workers cost contribution and u so the way that you're getting from year to year it looks like expenses went up 17 million and revenues went down 15 million so that gets you to the 32 so there you go if you want to follow along you can go so again this has been shared with you and we have some toggles and some and then you know later in the day we'll be looking at you know what those opportunities are to close the gap um again at a high level but wanted to help you understand how we got to here that'll be a big question how we did all these things and it's still the same has been shared with the labor partners

we did do a similar presentation for labor partners um with the forecast and and um they have seen and they've got their own spreadsheet and things the bottom line in that spreadsheet you said was cost went up 17 million between the two years u and it's partly here let me go back to you can if you summarize that it's it's I was looking at um revenues so it's becau so um expenditures what

the revenue side is to take it away of the one time that's that's really the bulk of it there's some small small other items but the bulk of it is is taking out all of those things that were one time so revenue decreased. Yeah, because you can see here revenue decrease because we didn't have the transfers in from these these transfers. Yeah. And then the expenses go up. Um, one of the big ones here is the Kalpers retirement cost is 6.4 million increase and one of them is the workers compensation contribution of that 3.6 million and that's partly because we did have employee costs go up previous years. So that this is kind of mean later and that helped. And then with the colas that helped you get to a $17 million increase, but you can go line by line and again we're bumping up internal service charges. That's where we just had things not budgeted accurately in the past. Um so that's another that's another big area. So you've got internal service and liability insurance behind

behind. Okay. real quick real quick. Um will you um sort of maybe just summarize what's being done to sort of curb overtime and and like council member Brancher said like I don't want to demon demonize overtime and clearly in public safety there is a need for overtime. So I I get it but what's being done to sort of control it now? Are we are we going to be appropriately budgeting it in the future so that we don't end up with this big sort of you know unbudgeted you know amount that wasn't what was there so it can be consumed so what over time in ter yeah like how how are we controlling it now overtime okay overtime yeah so

we had the twoou items one was a shift change in the police department that um is expected to save a million dollars in overtime and in the fire department a change in the minimum staffing anticipated to save and this is over six months months. So a million in six months and two million in six months for the fire department. And then I think unrelated to that overtime, the chiefs are closely monitoring other overtime that occurs just to be sure that it is, you know, based on meeting needs. Um there's optionality there if there's room for that. So those were two big tanches again through our labor groups. Uh but there's other again in the weeds and the margins that the chiefs are also looking at more closely as well. So hopefully even for some additional savings beyond the the three million inside labor.

And are these long-term? Well, I guess the I guess the shift change thing is not longterm. Yeah, both of those are currently shortterm. We're hoping to to get the labor partners to consider extending those, but they're currently short-term. And then meanwhile, are we projecting out like in that five-year budget that if those are shortterm where we go back to on what a reasonable overtime number is? Yes, we've projected that those to lose that savings. So you'll see that in the longer projections you you know I think we went up another 10 million into the next the 27 28. So that's part of it amongst other things but putting that 6 million in savings back in as a cost is is a a chunk of that. Okay.

Um and wait so okay and then the other thing about you know projections I think Nikki you said that um that you use the consultant to come up with the projections for our revenue. Um, and when we do that, are we using, you know, I know that like because we've seen some of these projections, are we using like a conservative or a middle road approach or optimistic? Because I know in the past those sort of numbers were kind of tweaked and adjusted willy-nilly it seems like in order to get to a balanced budget. So, what what how are we accepting that consultant's input?

For the big three, which is what we use our consultants for, property and sales, we use most likely uh for our our projections. You'll see on their sheet, they'll have conservative, most likely, and optimistic. This year, we are transitioning to maintaining a most likely approach for our revenue projections. Okay. For our other revenues, again, those are based on the actuals that we receive. We can look year-over-year and understand what we're bringing in and what may change um in the economy to adjust that. But for the big three, we use the most likely projection as we as they come in.

All right. Thanks. And my my last question is about the Kalpers, right? It seems like we were Were we unaware of that number coming through? Was that not projected or coughed out with the labor contracts that we agreed to at that point? Because it seems like that number has popped in and just wondering and then yeah what we do about that sort of projecting that into the future and what will that go up? I mean I guess you are projecting that to go up again the next season.

So Kelpers gives us a report annually and it projects it out I think for the 10 years but that's based on what were our salaries today and so that's typically what we program in. So I think you know as we do future increases we'll likely want to figure out kind of what is a 4% due to that number it's always off. There's also the way Calpers projects their interest and that shows up in the unfunded extra liability the U that you hear about. So so we we'll never get it spot on and so they'll tell us a number that programmed in for the next five years and then we'll get a new next year and it'll be up another two million. I mean we can't get it quite right. Kalpers is doing much better in terms of investments, but that's because the world is doing better. So, um, you know, it's it's always something that can't be performed. Exactly. But we there's things we can do to kind of better address that if we do labor negotiations in terms of just at least some kind of factor say hey throw another 2% into the cow's number if we do this labor exchange

because I mean you know I know I've heard this and I just want to sort of ask that does did we not properly project out the full cost of the contracts that we agreed to last let's say I mean I wasn't here when well I wasn't sure what was showing to council. So I don't I don't know and I don't know if you've gone back and done.

Yeah, we've been really focused forward. Um, you know, it's it's hard for me to to understand how they were projected in that way when there was so much one-time revenue happening. So if I if I had to guess without doing all the homework, it would be that we weren't really treating the onetime revenue as one time and maybe even saying, "Oh, this one time thing will grow or something like that." So um there's definitely some odd budget practices we've had um that we'll we'll break out of. So um Oh, thanks. I just asked because I it's a lesson learned, right? Like okay, so we need to remember like ask about the helpers and sound being projected and all the other things so that we know that when we make you know significant increases to agree to that they were in those increases plus four that wasn't actually being you know

yeah overtime itself is notable. So so having higher overtime isn't affecting pensions but salary increases. I think you usually usually when you do projections for contract they shouldn't be the fully loaded right total compensation which would include a calper contribution associated with those salary increases. So we we should be using a total comparison but those will be things we'll make sure to do in the future. And I just want to thank NY's been such a constant finance department. So thanks for being here.

Uh council thank you. Um similar to council member Andrews and council member Roach's point. So it seems like with the increase in a colola cost, we're also seeing uh an increase in initial overtime costs as well as an increase in uh what was the other item we were talking about? Calers costs and then I mean the other thing I just want to make sure that get gets costed when we talk about any kinds of uh future contracts is combaction costs as well. There's these cascading costs that we're unaware of that start to scale out and we're unaware of you know how much it's going to cost us total at the city. Um I am curious. So I mean when we look at a $30 million deficit and we're seeing 10 million of that coming from calipers and workers comp combined uh what is the amount that we're seeing from overtime as well. Let me just get a rough number on that too. I just want to understand what the biggest buckets are deficits. We understand what exactly it is that we're targeting or trying to drive down.

Well one thing so in November and correct me we re readjusted our the overtime to match what felt what was realistic and there and it's tracking on budget. Yeah, we are tracking on budget. Uh Francesca Hatfield, the another analyst in the finance department, yeah, runs our our payroll monthly to see where we're trending. Great. So, one, trending on target and two, yeah, should something come up in finance where we're over budget in those areas, departments are expected to speak on it and uh address like how they can rectify it. So yeah, we are keeping track of that and hopefully maintaining for it's about 16 million 16 million. It's not

15.7 million in this fiscal year and we're projecting a slight increase about so to about 16 million. Got it. So even if we're budgeting for it, the number is still quite large. It's as a chunk of our overall budgets and I know we're starting to try to practice stronger overtime controls. Um, just wanted to point that out like while it is a necessary part of our city and we shouldn't be budgeting for overtime, is 16 million the number that makes the most sense or strategically is there a better number to help us drive down overall cost spending in the general fund too? I think we'll know more after a couple more months of this fiscal year once with these different changes and things are going on and even through the end of this fiscal year. Yeah,

I think our experience over the next couple months will help us inform and fine-tune these numbers for next fiscal year. Like we're on track and maybe yeah, let's confirm yes, those are good numbers to use for next year. If we're not and we're not able to stay within that, then maybe we'll have to adjust more. Yeah, partly we need to see what the new changes need a couple more months to see the new changes that we're doing.

Understood. Yeah. So this idea of total compensation when we're having these conversations in the future, I just want to make sure we don't miss out on action as a part of that. I think something uh again I agree with my colleagues this presentation is very comprehensive. Uh just hoping that we can uh uh factor also our compensation philosophy into future discussions as well but I understand the 10% is the kind of industry standard for compact rules. Is that something in times of emergency that we need to adjust as a matter of policy as we have future discussions? These are dependents are uncomfortable conversations to have but uh you have to put everything on the table for trying to protect as many jobs as possible. Uh and yes also want to echo my gratitude to the budget team. Thank you so much. Thank you Fran as well. Uh this is not an easy undertaking and I think that this presentation as we'll see today takes you know six months of feedback and really condenses it into some actionable steps. So uh great work everybody involved.

We still yeah we still had

okay I'll I'll be brief too here. Okay. So, um, going to overtime and to kind council member Andrew's point earlier, it would be good just to level set on what is it best practice around overtime? Because when I'm hearing $16 million of overtime on a $200 million budget, that's like 6% was what we're budgeting for overtime. Like, that doesn't seem unrealistic to me, right? I can see double digit overtime being unrealistic. But when you're talking 16 million on a $180 million budget, that's, you know, I don't I guess I just want to understand from a benchmarking perspective, are we on the benchmark? Are we beating the benchmark or are we lagging? Because it seems like we've tightened up overtime in a very strong way. And I think I do want, you know, us and the public to acknowledge that because like even when I was meeting with the POA, like they've shared directly how overtime has been much more tightened up than it's ever been in the past, right? So I do think that that narrative around the discipline and the rigor that we're putting into our operations and how that's resulting in true financial, you know, results is is a narrative that we need to start leading because there's a lot of hard work that's being done in the city that I think we need to make sure that the narrative is aligned with that.

I think that's great. We can look into benchmarking. Um, and over time, I just want to say it's something you I mean, you need to have I mean, it's not a bad thing to have some levels over time, right? Um, you need that flexibility with people are sick or they're hurt and especially in our

um, you know, our public safety or in police when you have a when you're recruiting and it takes a long time to recruit, you've got a number of retirements, like you're going to need to have some flexibility to to be able to cover that, right? You should also have, you know, if there's fewer people hired, then you should have some salary savings. And if, you know, we're trying to budget all this, but I can tell you, especially police, it's very complicated uh because it changes the staffing changes so frequently. So, we're really trying to drill in and get a calculator and think about that more. But

yeah, I mean, I know just in our hospital system, you know, if we were to ever if we were able to drive, you know, 6% OT budget, that would be great. But it's just very hard to do when you're running a 247 operation. But I think that context is helpful so that we're not looking at $6 million is us I mean 16 million is this being unreasonable and hemorrhaging but this is really how like you know to council member Andrew's point we're an organization that requires overtime as a part of how we do things and if this is meeting the benchmark then maybe we need to stop harping on overtime and look at that we need to be going after I think it's a great idea to benchmark we haven't done that since yeah we can do that I haven't these guys Okay.

Thank you. Just that one point is that we were we were uh budgeting $92,000 for overtime and it certainly was very unrealistic and that's what led us to all this hassle. Um uh my one quick question is do we still have any frozen positions and if so can they be taken off the books?

Well let me let me start and then I can we absolutely do. In fact, we uh have in the model that we were showing, we're assuming um vacancy savings of about $10 million for this. So, and those are because of the vacancy management. Um and then we'll get to this later, but then we also um have another 8 million 8.2 two million. So almost $18 million of vacancy savings that we're projecting for ne for approximately for this fiscal year and next fiscal year. To get to your point, this kind of came up last Tuesday and that's why that staff report a little bit when the state law was to try to reduce vacancies and and that was part of the confusion is because we're actually trying to maintain our vacancies to save money. So what part of the budget exercise will be and then we're not ready to show you tonight but is to work with all the departments to kind of figure out what is your new normal and to start to decide which positions do we eliminate permanently. Are there some that we just want to keep on the books but keep vacant? You know, there might be some strategic reasons since we are going to have departments are individually looking at this and we're having meetings after this today, you know, the next couple weeks to really look at this. What is the new normal for the department and that will mean eliminating some positions permanently. It may we may want to hold on to some too just to give us a little more a couple more years to figure out what the right structure of a department is. So we're we're in that exercise right now and we're not ready tonight or today to tell you all that.

But what I've told them is that we need to stay costneutral. So like if you want to for at least for the next couple years and until we can get more stable. So you want to move positions around to be strategic. Um that's fine, but stay within the departmental budget that they have. Does that make sense? We'll talk more about that. Want to go? Should we go to Yeah. Measure C? Yeah.

So um looking at measure C, I know there's a lot of conversation there. you know, we've been making transfers to the general fund. So, 9.77 million this year and 10 million over the next the next year is is proposed. Um, we our five-year progress does plan on a reduced dependence on measure C. Recognize there are operating expenses and debt service on measure C. So, there is ongoing expenses within forecasted revenue generally in the $20 million range. So, if we're able to reduce the general fund dependence on measure C while maintaining the same operating operations in Measure C that we have today, you will see um $710 million available in the future uh that you could set aside for future capital projects. And that's in the 2031 timeline, which is about the time that um measure K1 comes into play. Um so, we'll still be looking at those longerterm projects um in the future. This hasn't eliminated um you know any plans for measure K1. um you know there this this uh longerterm forecast does have a plan to to uh to get on track for for the K1.

We will be talking about the recommendation to use measure C. So if you're okay as part of the recommended budget just to keep it moving if it's okay if we talk about that as part of the recommended approach. Yeah. Okay. But we just wanted to have this baseline. We can go back to it. K1 starts 35 35. Yeah. to 5.5 sorry 51.

Um so again we we're working to balance the budget but we still have no reserve funds and so we want to talk to you about the recommended approach. So again, until we can reser reach a 16% reserve, ideally we're going to get to 20%. But um in the meantime, we want to hold that the available fund balance in measure C that we've left there so that overall there's some cash available in the general fund. Um so it's about $18 million that percentage. Um we all proceeds we're recommended all proceeds from property sales or basis go into the reserve into the general fund reserve again to to restabilize it, build it back up. if we get higher than budget revenue or onetime revenue, we want to place that into reserves. Um, you know, I think we're our budget's really tight. We wanted to recognize um, you know, we don't want to come out with a with a bunch of excess revenue while we've had to to u ask the labor partners for so much. So, it's it's a very tight budget. Um, you know, optimistic. We talked about it earlier, but this is, you know, we will need at some point to to continue to focus on the reserves.

Um, before I hold on cancel. Yeah, I I uh I know we're going to talk about those later, but I think you know building up the reserves I you know it gives us a little bit of um stability, but it also you know I think it's the north star too. I think it also gives us a goal to sort of achieve and and hit that way you know little wins little wins. I wanted to know if if it was um any kind of support to look at our reserve percentage as a range versus a target percentage. We could talk about that within the budget policy. Okay.

So the budget policy recommends and just like city manager said earlier, this is this is us recommending to you and and taking in your feedback. So I think in the budget policy we're recommended 20 um but certainly we can we can look at that as a range and that's the last portion of today is the budget. Okay. That's where we're going.

Thank you. So um if we can just go back one quick slide. So would our reserve policy hold to this too because the way that I'm thinking about this and you can correct me if I'm thinking about this wrong is the starting balance. I kind of think of that as sort of what's in the reserve of measure C if you want to call it that right. So would we have something that says we don't want to deplete that minus 15%. Because when you start looking at outer years it's like wow our spending keeps going up our you know our revenue our expenses are going up. Our revenue is very modestly going up. So every year we're needing to dip into that measure C reserve. And then you see you get to 23 I mean 31 and you go from a $21 million reserve to a $3 million reserve. So would we say I mean I know maybe I shouldn't call it a reserve but

I think what's missing is those two uh are that line of available for future capital. So that's until we oops sorry apply that to capital 3 million7 and 10. I I had the same kind of first response to this but but if you look at FY29 million that's unallocating like I missed that it's totally missed and I guess the goal here is that during this time period we're building back the general fund reserve. So we're reducing our reliance on the measure C reserve because there's no we don't have to hold the fund balance in measure C and if we have a general fund reserve right now we're using it as our general. So we we essentially start to realize that reduction at 29 at like at at 3 million and then it goes to seven and then the full 10 comes back. Yeah,

I see how that's right. I miss you doing some planning some studies for future capital projects or you may just hold it knowing hey this big project I want to kick it off in 32. Yeah, it's not currently budgeted. So that's for you guys as policy makers to sit. Yeah. And ideally you are spending this money, right? Yeah. So that you can do

you know that you can do the capital project. But I think we've been saying don't do that yet. Right now we don't have any general fund reserves. So I think the hope we're trying to show there's a relationship between building up your reserves and then being able to spend the measure C on the on the capital. An added thing is that in those years where we're starting this makes this even more complicated and I'm hoping to but when we start weaning ourselves off of measures see we still have deficits that are projected in those years in the general fund. So you know what I mean our work isn't done in those future years. So this is what we're trying we're shooting for aspirationally is to start to like free ourselves from the measure C. But it still means we got we have decisions we've got to make and structural balancing we have to do general fund. Um and you'll see that a little more when we get into some of the other projections. So this is just kind of we're just kind of wanted to I think it helps you understand that relationship but it's all very complicated and

it makes more sense now than it used to. I know I just think yeah just so we're on this slide just so everyone understands can you tell us so this is operating expenses just out of the measure C account. So what what are what are the operating expenses out of measure C? Yeah, we have um we and we always have since the the first passage of measure C, we've always had police officers funded out of this maintenance services workers because that was one of the priorities of measure C was streets and public safety. Okay. Um and then there is some um minimal like supplies and services for those operations. Okay. And that was my question that like those services those expenses are still within the line of the original mission. Yes, that was that's been there since the very beginning of no change, right? No change, right? Yes.

And then um and then the debt services that's to pay off the debt of the um all the infrastructure building

that we already built. Yeah. That's the ones we've already completed. And then in in theory that's is the idea here is you could start you know spending this actually spend $3 million on a project in 29 or you could put that towards future debt service if you want to take out a loan for a large project like a great and I and I appreciate the protection because yeah I mean it seems like it is our only like actual um reserve right now for the city but you know doing what we can to sort of as quickly as possible ourselves off in order to get to right the sunsetting measure C the beginning of K1 and that we're actually sort of you know building towards of buildings that we need in the future. Um, yeah, as soon as we can do that forecast, another question I just I had that I just want to make sure the forecasted revenues are also from our consultant. Okay. Sales tax consult

on the sales tax. Okay. Yeah. And then because and I would also like to put into place, you know, if we end up realizing higher revenues than obviously projected that those numbers continue to, right? So that we're winning ourselves off. It's a good idea as um as like maybe as a first, you know, tiering ourselves off things. Um I would like to see that. So, we need to get back to the protection, you know, the um I'll look for potentially public safety. So, thank you. Yeah, that's you know, that's why I've heard it here before. I don't know where I've heard it, but that's why it's important to shop Hayward.

I just had a question about the Measure C projects and services that were identified. Were they prioritized or ranked in the original Measure C? and is that something that we want to do in the future? I mean, I know that I know the highest project was this going to be the most expensive, but just to have an idea of why did we choose certain projects in that original trunch of measure C and how should we go forward? Yeah, I I don't think I don't and maybe maybe we can definitely do a work session on this because there probably are people back here who have some of that historic knowledge of why we did what we did for the first for the first section of measure C. for K1 moving forward. I think definitely do a Ricky and doing some sort of exercise.

I think that would be helpful for the public because I think they're thinking, well, I we voted for this for this reason. Well, that was part of that. Well, that wasn't the most prioritized for them when they voted for it. So, I'm just curious to see if we can do that for K1. I agree with that. I just think we should have a conversation on the priorities for that funding rather than just assuming right off the bat. Yeah. Not wait till 29 when we But wait, do it now. Yeah. I think also to the extent we we'll want to debt finance the pace that at which we're able to restore our reserves and reduce this reliance is going to affect our bond rating and our interest rates

and be able to afford lease payments if we are to do certain building but also uh I'm I'm just also looking at the buildings that we did build were we tracking on budget for those buildings and did that ate up more measure C funding and but that was our but that was a priority So then the other then we have to go back and rep prioritize. We have Tracy Irvin, our real property manager. I don't know. Miriam, can you just speak? You want to unmute him or Tracy? Are you able to? Yes. Hi. Can you guys hear me? Can you just talk a little louder? Tracy. Yeah, not a problem. Um, good morning.

Less loud. Less loud.

Less loud. All right. Good morning. Um so here on this first slide um I know you guys have seen my presentation um and I've talked about this at different points in time but just real quick summary of of those presentations. This is our these are our top three priorities and um part of the reason these are our top three priorities kind of what Jen already talked about earlier and is the the money the revenue that these can draw for the city also some of the risk and financial um potential risk down the road. So, uh, City Center, CN Main, those are and the Cinema Place, they're all attractive properties where they're located and how they're set up financially structured in the city. We can probably get some of both um most revenue to replenish the reserves and help us out. Um, these are the action steps that we've talked about where where we're at. um moving forward as I evaluate and come back and bring you the options and make the recommendations whether it is to sell uh to hold or um maybe a ground lease to create a long-term kind of revenue source. You know, we're going to get those appraisals, do some more market analysis, talking to brokers, getting a feel for the market to really help us make those right decisions. And some of these sales, you know, as not just that onetime revenue, you know, there's going to be those ongoing revenue sources through like sales tax, property um tax, and all those type of things. So, those are the things to think about as we evaluate properties. And these are just three. Um, I got a long list. You know, there's all the 238 former Calrans properties, which we talked about. Those are carrying costs, heavy carry costs for us in that regard. So, we're looking at getting those off the books. We're looking at opportunities to lease them out to other folks to help carry those costs. Um, uh, other properties, uh, facility maintenance has brought a lot of properties. I've worked with them that are help hurting, you know, their budgets. They're carrying a lot of weight where they're spending a lot of money and time. So, we're looking at evaluating those and getting those off our books as fast as possible to help uh ease the pressure on the rest of the budget. And we can move to the next slide.

And this is this is a summary of what is currently happening, where I've been, what I've been doing, and what I will be doing as we move forward. So, right now, we we've taken an evaluation, found some identified some key properties because we also just don't want to put everything up on the market. that that's not a good approach either. So, we've identified these three properties and some others. We're going to move them. We're moving them through the surplus lands act, which is a a process we're required. It's not that simple where we could go out, put it on the market, and sell it. We have to go through these steps, and it was created by the state. And we're moving very quickly through all these things. The goal is by June to be bringing stuff back to you with those decisions on whether we sell it or do we look at a ground lease or is it a holding pattern kind of situation. Um and below is some rough timelines based on the surplus lands act uh in that process as we move through each of these properties.

Trace, can I just add one thing? I I will say my instinct is going to be my my I'm leaning towards I would like us to sell these properties. I just want to be transparent about that because that's how we'll be able to restore the reserves. I think we're keeping other options on the table. So, let's say we get a proposal and it comes in really low and it just it doesn't make sense to sell now because of the market where it is then we might look at holding. But I just want I think my first reaction will be to try to sell so that we could start restoring the reserves. So, I just wanted to be clear about that. I mean Tracy's doing a great job.

Yeah, 100% 100%. like their only reason my instinct you know I've been doing this for over 20 years is leaning that we probably need to sell these that that's the best approach it would only be these outside factors that we can't control or offers are just coming in so low where and a ground lease uh you know through the appraisal process at least you know I want to do something not just leave it open in vacant land like it has been you know for for that time period figure out ways to create revenue so that would be that's the that's the emergency boat if we can't sell it. The goal is to sell these properties and help create that long-term, you know, you know, res replenish the uh the reserve.

Thank you, Tracy. You're doing a great job on all this. Any questions for Tracy before we Yeah, I was just not to be overly technical, but I don't have that last slide in my slide deck here. Oh. Oh, um, it was updated. Yes, we can we can get you that. It's on it's on legar, but yes, we made it that change. That's fine.

Okay. Yes. Um I'm really happy to see us colesing around a real estate strategy together as as a city. I I just want to give us a little bit of grace around projects like the movie theater. You know, there's opinions whether it was a good idea or a bad idea. Like council member Bonia said, at the time when we had made the purchase, we had a different understanding what our reserves actually were. Uh when we look at what the service provisions that our residents expect out of us as a city from our own c our own resident satisfaction survey, one of the items up there in the top five is uh you know protecting local here businesses. And we as a city made a bold decision to make sure we didn't have a big gaping vacant hole at the mouth of our downtown whether that was build or all the businesses in the theater across from it. And so that decision wasn't one of trying to buy the biggest classiest thing we could find downtown. It was really trying to respond to the resident satisfaction survey and said, "We want you to protect local businesses uh in in Hayward." And we were able to when we bought that building, there were empty vacant lots and now every single unit in that theater building is leased up. Uh Buffalo Bills is active across the street from it. Uh, so I just, you know, whether or not we move forward with selling it, you know, I I understand we're in a a difficult fiscal position and I'm open to the idea of it, but uh I just don't want to harp on the council so much for making that decision because I think that was us being very bold, very responsive, and it has had positive results for the downtown corridor for the last two years or year and a half. Um, if we have to sell it, you know, that so be it. But I just I want to give us a little bit of grace there because it wasn't uh sometimes I feel like it's framed as a uh like a kind of knee-jerk or half-hazard decision, but I think it was very deliberate. Uh and if we were in a better fiscal position, I would be very opposed to selling it because I think that, you know, with the funding we get from owning that property or the ability to leverage it for financing, there are very interesting economic development plays we can make with a property that size in our back in our back pocket. uh and I I'm a little bit sad that if we do end up selling it,

we'll be unable to get that creative uh with with that real estate asset. So anyways, I just wanted to share those thoughts because I you know there's a lot of mixed opinions around it, but I do think it's an example of bold leaders innovative thinking. Yeah, I I just wanted to agree with what councelor Cyrus said because um if that building had been sold and had been empty, uh we would be having a very different conversation about how blighted downtown would have been.

Um secondly, we would have also been having a very different conversation because um there would have been key buildings in downtown empty. Buffalo Bills would have been empty. um the uh Arthur Mack uh empty. Um you know, there would have been no enhancements or improvements to that building. Um and you know so you know we um you know we we did what we did um because one we had you know we had the money but two we were responding specifically to what people uh to what not only the neighborhood was asking for but what a lot of folks were asking for and that was making Hayward a destination. Downtown Hayward a destination. And um and so you know I um you know we had this conversation at budget finance where you know we said listen you know there's going to if we need to sell it yes we'll sell it. Um but you know um I you know I don't want the original intent what our original intent was and that was uh that is the largest economic development site in the downtown and if that would have been empty uh I can only imagine the conversation we would have been having and um you know and at least we were we've been able to sort of define the trajectory of that building in the you know, in the in you know, we filled it up. Right now, it's nearly all, you know, I know we have that one coffee shop that's going to fill it that that that's um waiting to get in, but or it's just almost open. However, it's 100% occupied right now. Um when and when we bought it, it wasn't, you know, and so we still see people coming to downtown. The the the restaurant upstairs, uh they went through enhancements. our economic

development team has been uh supporting that and um so anyway I I'm I appreciate you saying that because um you know we we didn't just go out and spend money on it but that was another danger and the other one was that the church could have taken it over. Sure. I mean yeah absolutely that was that and we and we have seen that happening right and the theater so we I we did the right move. Did you want Oh, no. I was gonna I was gonna time check on the next step. Go ahead. Come. Oh, that's okay. Right.

Well, here's So, we I've been doing this for a long time and I always get the times wrong, so I apologize, but try you try to anticipate how everything's going to go. We are about 36 minutes kind of off. Um, so we could take a 10-minute break. Now we do have our the next part is to have our consultant go business license tax modernization. We could take a five minute break and then come back and really dig into business license and we do we have a we have almost what is we have an hour and 10 minutes at the end that was your discussion and feedback. So, we're maybe using it as we go, which is totally fine. And I'm not trying. So, the I was going to ask, should we I mean, during break, let's talk about it, but let's take a break. Uh, what' you say? Five minute break.

Should we do a five minute break? Trying to get back on. I guess it's fine. We have very much

Happy baby.

Heat. Heat. I know. I know. Heat. Heat. Yeah, we are.

We're good. Okay, we're good.

Um, one of the ideas that actually came through our labor partners and um others in the community was to look at our business license tax modernization. We're super very bful because when we did look at it that it is very upgraded and there's a lot of potential for us to um put something on the ballot if that's the council's direction and um but so we want to we've hired a consultant u Matt Newman is here from Blue Sky Consulting has and he'll tell you a little more about himself and who you know all all the different cities he's helped do this. So we've got great experts helping us holding our hand. Next slide. The next slide is really just to show you all of our different revenues and how they you know you can um you can just helps you get a sense of all the relative importance of different revenues and how much and then our business lines text that little blue line up there at the top and looking to see if we can expand that to help us struct this would be a structural change at the general tax. So would it allow us to really um offset some of our structural deficit on an ongoing basis. So next slide I think is Oh great. So Eden oh is up there Eden Perez in the city manager's office is kind of our project lead on this. So she's going to start and then she's been working with Matt and so Matt will get into some of the details. So go ahead Eden.

Can you guys hear me? Okay. Yes.

Okay. Good. Good morning mayor and council. I'm going to be providing you with a brief overview of what our current business license tax structure looks like. Our city's tax structure has remained the same for decades, if we want to be exact, since 1978, and in fiscal year 25, it generated approximately 3.3 million in revenue and apply to nearly 10,000 fee payers. The current system is primarily based on a mix of flat annual fees, employee counts, and limited gross receipts categories. and and within most categories, businesses are taxed using the same rate structure regardless of their size, which raises important questions about whether that tax structure reflects today's business environment and why now may be the appropriate time to revisit it. Next slide, please. So, why modernize now? So, not only does it provide an opportunity to improve revenue, but it also helps us update the structure thoughtfully without unneeded complexity by adding more categories or rate tiers. So, in other words, we're looking at a way to modernize it and also keep it simple. Council has also expressed interest in exploring what a more progressive rate structure should look like. And to do that, the city has engaged with Blue Sky Consulting Group, who has extensive experience assisting cities with business license tax modernization. And with that, I do want to introduce Matt Newman with Blue Sky, and he's going to be walking you through the comparative analysis and the proposal that we're bringing forward to council this morning.

Okay. Thank you. Um, so I'm Matt Newman. I met you all on Zoom a month or so ago, right? I think the first day I had started all this work, but we've had some some actual analysis and worked with your staff to um put together some neighborhood. Um and as Jen said, we um helped the city of Oakland with their uh 2022 changes business license tax and we've also worked with city of LA, San Francisco, others on business license taxes and other taxes. Um so what this slide shows is how Hayward compares on a on a per thousand taxable sales basis um to other cities in the region. You could also look at it on a per capita basis. Um this one sort of controls for the size of the economy there, but the story is the same. Hayward's not collecting as much revenue as virtually any of its neighbors. Um and there's sort of maybe three tiers or three ways to think about it. There's cities that really just don't collect very much revenue from business license taxes. And that's kind of the category I'm the pay word in. There's sort of the middle tier which includes, you know, Union City, San Leandro, Alamita, Pleasanton, Liverour that are in that kind of bill group with, you know, $2 to $3 per thousand taxable sales. Um, and then there's there's um the four cities on the right here, Richmond, Emeryville, Berth, and Oakland that really collect a lot of money in in business license taxes. I think Oakland collects uh about as much in business license taxes as it does in sales taxes. Um, just sort of by way of comparison. So it's it's a lot of money for those cities. Um so that's sort of some context setting. On the next slide, um what we've done is we put together um the staff and I a proposal for you know one thing that we think would make sense. Um this is sort of called matching the neighbors. It would move Hayward from that lower tier to the kind of middle tier close to what your

neighbors are in kind of $3 per thousand taxical sales range. So about three times more revenue than what you're collecting now. Um and the proposal has a more progressive structure so that the larger businesses would pay higher rates than the smaller businesses do. Um one thing we tried to do in putting the proposal together is to keep the the uh rates for the smallest businesses the same but put in place higher or suggest putting in place higher rates for the larger businesses. Um this is the structure that Richmond and Oakland have adopted. Um it's worth pointing out that uh a progressive structure for gross receipts taxes which is just per dollar total revenue for a business isn't connected to profitability. So unlike a progressive income tax where richer people pay a higher tax rate or that's the idea behind the system with a gross receipts tax it's just bigger businesses paying a higher rate. They may or may not be more profitable per dollar. So, um I do think it's important not to get um sort of too out of whack with trying to charge the the bigger businesses too much more because then you can encourage those more sophisticated larger businesses to move because they have the wherewithal to do that or to expand to in a different location. But I think some progressivity is in line with what others are doing if it makes sense. Um so anyway, we'll show you in a minute the scenario that I think uh we're proposing the staff and I and then also um a scenario that would raise about seven times as much revenue. That's uh Richmond collects about seven times as much revenue per dollar in taxable sales as Hayward does. So that was sort of the genesis for this 7x proposal just by comparing. So the next slide shows this is for some example categories. This isn't every great category.

I just want to say we have handouts for you because we know this is small if um maybe hard to see for those online that this is in um presentation that's online and uploaded so you can look at it and zoom in on your laptop but we did also provide um handouts. Thank you. Yeah. So so lots of numbers here and please at any point uh stop and ask me questions. Um the whole point of this is to get human is uh understanding what what we've done and what we're doing here. Yes.

Um maybe through your presentation you can thanks for this by the way but can you also maybe just share what the positive or adverse impacts of Richmond raising their seven times because I mean in a lot of ways they're sort of a comparable city to us when you look at kind of Oakland you know just in terms of population size and other things. So I mean is that working for them? Is that not because I know the recommendation is don't do that because it's going to have some adverse impact but what's your perspective?

Um we h we haven't done any studies of the economic impact of what Richmond's done. Um we met with the city finance department there and asked them they haven't done any studies either. They didn't report any mass exodus of businesses but they also haven't studied it. So we don't know what would have happened otherwise or or even really what has happened because it hasn't been studied. Um I will say these things do take some time to happen. So a city will pay the tax or probably pay a higher tax for a while but and it's when the opportunity to expand comes along when the opportunity to move to a neighboring jurisdiction comes along when a lease or whatever. So you you you may see these changes take place somewhat slowly. So you might not see something immediately even if there was going to be a big impact. But that said, the city of Richmond, not person we spoke to didn't know of any specific distances that had left. It wasn't any dire consequence the day of either. So a little uncertain I guess is how I would say Richmond's been um Oakland also raised their business license tax not by it collects a lot of money more than Richmond. um they had a big increase in 2022, but they already collected a lot of money from business license. Um and I don't think Oakland studied it either, but the story there is the same. They're not a mass exodus, but there but we don't know for sure.

And can I just add also, you know, it's hard to measure who's not coming to the city because of this, right? Like there are decision a lot of decisions that a business makes in terms of where they locate and it's hard to track whether or not they're not going somewhere because of this. Um, so just another thing that makes it hard to pinpoint. And then I know that one says seven times. Is the matching neighbors is that like roughly two or three times? It's about three and a half 3.4 times as much revenue as what you're collecting now is what we would collect or what we anticipate you to collect under the um the green line here is the matching reverse scenario.

Can you just go back one? It's about $ 8.8 million of additional revenue. fourth. Thank you.

So, um I I won't go through all of these. Again, this isn't even this is not every rate category or every type of business, but it's it's an example of some of the businesses that I think are of interest. And so, you can see that the yellow line is is what uh is being collected on these example businesses today. So, for example, the first column is a large retailer uh with about 200 employees and 400 million in revenue. So, think about like a cost bill or something like that. They're currently paying about $107,000. Um, under the proposal, um, they would go the the match neighbors proposal, they'd go up to almost $200,000 and then under the 7X proposal, uh, to over $900,000. And then you can see how that compares to the comparable city. of that if you did 7X proposal for example uh it would still be lower than Richmond um roughly similar to Oakland less than everyone else is sort of how to read this table. Um the next two small restaurant and re and uh sorry small retail and restaurant um those are your smaller businesses you can see right now small retailer would is paying about $400 per year that would go up a little bit to $450. So, so a small change um or 1,500 if you adopted the 7X proposal. Um one category to I think um take a look at is if you go all the way over to the from the right is the residential landlords. So um right now a 50 unit building would pay about $566 per year. Under the proposal that would go up to about $3,400. Um still a lot less. you can see at the bottom than what Berkeley, Oakland or Richmond are charging um a couple of the principles that the staff and I discussed and are embedded in this um proposal. One to try to keep

the rates on the smaller businesses low or the same. Uh and two to try to raise rates on the sectors that are less mobile. So landlords is a good example. No one wants housing to be more expensive, but the landlords also can't pick up their apartment buildings and move them to a neighboring jurisdiction. And that's why a lot of other cities charge much higher rates uh even than what's embedded in the proposal landlords, commercial and residential u because those are the kinds of businesses that that can't leave. Um that same applies to things like retail actually. Retailers want to be near their customers and so a restaurant in downtown here isn't just going to move to another city if its customers are here. And no one wants to for any business that especially non- small retail but it is one of the sectors that that isn't as mobile. Um so again the proposal envisions a higher rate for certain retail for larger businesses relatively modest increase for small. Um maybe I should just stop there. Are there questions about how to read this or what the proposal would involve or any of the specific rates? There's a lot more detail on each each of the two. So, it's up to you want to ask questions now or the question section. So, I'm happy to stop.

I think Yeah. There's only a few more questions. So, why don't you want us to get through the next couple? No, I just wanted to know on the manufacturing and auto dealership. I mean, large contractor and manufacturer, can you kind of just quickly explain your rationale there because those look like pretty significant jumps, too. Is that sort of the same thing? Like they're stationary. they're not going to move their customers around.

Um, yes and no. So, on the contractors, and a good question, the contractors, um, revenue is a function of the, uh, economic climate in the city, right? They they they go where the business is. And even if you're an out of Hayward contractor, if you're doing a project in Hayward, you pay business license tax. So, if there's demand for services of contractors, they're going to pay. They can't they can't leave or avoid the tax just by moving their, you know, headquarters operation to another city. So that's a relatively, you know, I'll say good place to to raise a little extra revenue because they're not as

um manufacturing is a bit different. Manufacturing um competes typically globally or statewide in a region outside favorite, right? They're selling their products beyond city limits. So you do want to be careful about raising the taxes on manufacturers too much. However, the rate for manufacturers was so low, $133 a year on a $30 million business in this example. So, I mean, really sort of a trivial amount. So, even going up to what we're proposing here, I guess $8700. Um, still a relatively modest amount of tax in my opinion, not enough to encourage a business with 30 million in revenue to try to relocate. And even if they did, there's not a place nearby to go to save a lot of money. So, um, the proposal involves some increase there because we're trying to get more money and everyone has to pay a little bit, um, but not a lot more and I don't think enough to really distort a location decision. Again, the percent increase looks big. The dollar increase isn't very big, I guess, is how to think about it.

Should we keep going? Yeah.

Um, so the next slide is the this is the specifics of the rate categories. Um, and you can see the way this works is that it shows the the dollars per thousand of revenue. So the first row is retail sales. And if you go over to tax rates by bracket, it says if you're a business between zero and $5 million a year, you pay 30 cents per dollar of revenue. And then as you get bigger, if you had 25 million or revenue, you'd pay 50 cents per thousand of revenue um on all your revenue over 25 million. Um so this is just a different way of presenting the information on the previous slide. Um this is uh a list of rate categories but every business would fit into one and when the ordinance is written they write it such that every business would fit into one of these categories. The other details here to quickly look at are the minimum tax amount is $60. Um, so every business would pay at least $60. Um, which is an increase from some of the categories now are smaller, maybe $ 15 or $20. Um, but still dollar amounts that are relatively small. Um, and then there's a payroll tax alternative. So if you're a company with no revenue, you're the back office function of another business. You don't have any revenue. We still want you to pay your fair share and so you pay based on your payroll even if you don't have sales in Hayward. Um so again I'm happy to come back to this. The next slide shows the same table but for the 7x revenues you can see all the uh rates that are embedded here with raised almost $6 million. So about seven times more than being collected right now. Um this proposal I think um particularly for the the largest businesses with highest increases does result in a higher risk of some of these businesses

reconsidering their choice to be in Hayward um at least more so than the than the initial proposal that match your neighbor. Next slide. This is just for me. You know, we talked a lot about this. This isn't just my recommendation, but listening to our consultants and our finance and economic development folks and looked at this carefully is think what are staff's recommending the match the neighborhood scenario. Of course, there's some questions we want to hear from you about. But I think there is we believe there is risk that if we go too high and we get closer to that seven times that we might we would have a hard time attracting new businesses or jeopardize kind of longer term with when a business's lease is up they might start looking outside I think where that we could see some distortional kind of impacts and I know that a big part of what we want is long-term economic development um and business a robust business sector. So I think our recommendation is to to move forward with something similar to the match neighborhood scenario not risk kind of undermining the the economic sector but um we have some specific Oh wait we're going to do polling and then specific question is that okay or do you want to

I'll wait for this wait for the okay so so just hold that we can come back to the recommendation and then Chucks wants to we do want to poll so you want to talk a little bit more and then we'll have

yeah so while we've been working with um blue sky on the modernization of the measure. We've been working with our uh public our public opinion researcher FM3 uh to help us prepare to um survey a representative sample of likely voters in November to see how they would feel about this modernization measure. And what we'll be doing in that poll is testing this ballot question. So, you work still got to fill in the numbers about the low range and the high range, how much the tax would bring in each year. Um, but that's that's the point of the survey to see where the see where voters land on that. Um, the way the poll is structured, we will test that question four different times. At the beginning, right at the top, we'll test it and and see where voters are. Then we'll provide the interviewers who are doing the survey will provide a brief explanation of what a business license tax is and how it's changing just to get a little bit more informed opinion of what we're doing. We'll ask the question again and see how it comes back. And then the last two times we'll test the question is after a battery of arguments that might be presented if there were campaigns uh run in favor and or against the measure. So, we'll test it after they hear a battery of positive messages and then test it again after a battery of opposing messages and see where we land. And so, that's sort of the the nature of it. We we expect to be able to be done with this in March uh before the end of March. Be back to well before the March with Um so, that that's the story here. I, you know, I have some information on how we've done on on pass since the last since 2014. We've had five of them. Um, our median median yes vote on those five measures has been 71%. So, as you think about this decision, you know, you're in a community where

voters have strongly supported their their city government when it comes to budgetary finance measures. Um,

true. The last thing I'll say about the poll, um, you'll see that, you know, we we're thinking about a 400 or 600 uh, uh, size sample. Um, one of the things that the 600 sample would allow us to do more readily would be if we wanted to test two different ballot measures with say the the 3.4x version and the seven times measure. And we would do that by doing a split sample. we would ask 300 of the folks surveyed the first question and then the other 300 and be able to test um test what that means. That's what I have on that. Is there any questions?

Okay. Any questions at the end, mayor, or No, no. Is are is there another slide? We have two slide one. I just saw the timeline. So, okay. This is Yeah, I I saw Yeah, go ahead and do the two last slides. Okay. Depending on the feedback obviously from today, we um our hope would be to conduct the polls starting next week so we can get some polling results as quickly as possible. Um and then hold additional we've already talked to the chamber on a pretty I think there were how many people like 40 yeah there's about 40 people there and we need to do more. Yeah.

Yeah. We had about 40 businesses that attended an initial discussion about this. We showed them some of the graphs. So we didn't have all the proposals yet because we weren't ready but we showed the graph of where we stand relative to other cities. So we would do some additional outreach um in March with business labor partners and then targeting a April 7th council work session to come back with the polling um come back with the results of that additional outreach and come back to you. um hopefully getting more concrete direction to come back um with a you know I think our our we we are recommending that we try to put this on uh depend unless the polling comes back terrible which we don't anticipate but unless that changes something dramatically but I think we would recommend coming back to you um pull the work session finalize the rates and then if the ordinance the draft ordinance and then late April early May come to you to put this on the ball about one of the reasons we were doing it you could wait all the way into June to do this But given where we are with our labor partners, I think really wanting to be proactive about showing that we're taking action to make structural changes to the budget that aren't just on the cost side and and so really focusing on the roads, try to bring it back as soon as we can for a council recommendation or direction to put it on the ballot in November. And then the last slide is really um just some questions. Did you agree with our recommendation? Are there specific sectors that should pay higher or lower tax rates? The question of residential landlords, should we continue to Right now, this the numbers that are in here assume that we do tax all landlords including those that have one to three units. So that would be a change from our current ordinance which exempts them. So should we continue to exempt them? Uh we have the numbers here how much that is about 300,000 or 350,000. Um 326,000 for the match neighbor scenario. Um and then any feedback any other feedback you have on the polling the polling language. Um but we'd like to get some direction on the

polling today and then any other information you have about where what you're thinking so that we can start taking those next steps. Um when you talked to the chamber was there were there small medium large businesses in that meeting? Yeah, it was mostly I would say the um leaned towards smaller in restaurants. Um but there were a couple of larger like I there were a couple larger and I think there are different considerations to both those

um can can you explain just in very an elevator speech the difference between the the difference between match neighbors and seven times? uh seven times just higher tax rates and raises more money. It's not Can you just Is it less progressive as well or is it The 7X proposal is is more progressive in that it has higher rates on the larger businesses. Um but it also has higher rates on the smaller businesses. So it's not dramatically more progressive. It's mostly just higher rates.

Yeah. So even though they might structure it with the higher rates on those higher businesses, it's still doing a lot more than what they're paying now or what we're proposing to the match neighbors. The reason why I ask is because um you know there's you know nationally or even here statea state level there's another conversation that's sort of ongoing that's happening right now and that's you know this you know tax billionaires conversation and and I guess the you know when I saw this you know it'll be interesting to see how those two things are going to you know how they might sort of conflate with each other um you know, will this be considered sort of Hayward's tax, you know, taxing the rich, you know, uh measure and and and so you know, I just um and depending on how that plays out in the media, you know, I mean, that's what people are going to see. And I'm just I was just curious that we

Yeah, I can speak to that. I mean, we we have an opportunity um to simply, you know, to to um kind of execute just a public a public information campaign. uh not a political campaign, not something that's intended to argue in favor of one or the other to explain what the business t business license tax does today and and why we want to modernize it. Because another way to look at it today is right now we're not asking businesses to pay their share of the uh costs of city government through this through this uh you know boat of of taxing because it's really really low. And so we're we are trying to um address that in either measures.

Um so just to kind of respond to this, you know, does council agree staff recommending I mean I would you know I think the um the match neighbors is is is appropriate. Um you know are there specific sectors that should pay higher than lowers? you know, I my my my gut right now tells me, you know, I just want to be as as equal as possible when it comes to this. You know, I know I understand there's going to be some, you know, some deviation, but um, you know, I just like what was said earlier. I mean, I'd like to see everybody feel something and and that we can, you know, and that everyone feels that they're contributing to this, but um, you know, I don't want to target certain, you know, certain compan certain businesses, larger businesses, and really spike them. Um, I just, you know, as long as it's just, you know, I'm not even going to say equitable because that's not what equity means, but I I just, as long as it's, you know, you know, as equal as possible, uh, to get to what we need to to achieve, that's that's what my gut tells me right now. Um, you know, should landlords, uh, with one to three units continue to be exempt? Uh, yeah, I think so. I mean there there's still small small units you know I think some of the bigger units perhaps uh should um you know well maybe that's just answers my other question right I guess we are sort of targeting them but um but anyway when it comes to residential landlords you know I think uh one to three should be you know exam but um you know in terms of the polling language uh as long as the polling language is Um, you know, I looked at the language here. I mean, it just sounds really wonkyish.

Yeah. I mean, I do have to part part of what we're dealing with in the state of California is there's Yeah, has to go in there. Yeah, I know. And we, you know, what is the part you think is wonky? Just so well, you know, um clause in the beginning probably. Yeah. shall measure update hers business license tax to create a progressive structure that imposes the highest rates on the highest grossing. I mean it's yeah wordy.

Yeah, it I mean it just as long as it's clear and you know and and we know what we're doing. Um and then um yeah the the the tax rate you know I think the the you know certainly don't want to drive away businesses and we you know we we certainly you know we just passed a you know a Hayward friendly you know businessfriendly you know uh plan and so um you know I just want to match this as closely to that. So, it looks like we're supporting them, right? And and the other the other thing, too, just and you know, I'll just sort of say this out loud and um you know, as we to do this, um you know, we should have a very serious conversation here as a council and as staff as to what are we, you know, what is it that businesses are going to benefit by raising taxes,

right? And um and you know uh we should take a very hard look at uh practices and processes right now and how can we you know either promise them or change um processes and functions now so that we can you know have something very concrete uh as to providing value for them. you know, I mean, I get it. We haven't changed it since 1978. And, you know, for the record, you know, I was eight years old, uh, the last time, but, um, you know, I think right now, you know, people want to see value and, you know, and and that's something that I've heard and, you know, I think the council's heard that over the years when we talk about, you know, turning to business for any anything, right? What are we, you know, what are we going to get in return? So anyways, I I just want us to be mindful of that and um you know this isn't just taxing to tax to to raise money. Um we want to provide value and what is it that we're delivering.

Yeah, thank you. Thank you for the work that's gone into this. I'm really excited that we're discussing this topic and I I'm sure our labor partners are being rolled out. The city's been moving on this as quickly as it has been. So uh I want to keep that momentum going. Um, can we let's see. Can we go to the match neighbor scenario on the slides? Thanks. Okay, great. So, uh, forward one.

Thank you. Okay. Uh, so just so I like the overall framework of this. I'm I'm more so leaning towards the match neighbor scenario. Uh, but I want to push us to make this juice really work the squeeze. And that doesn't necessarily mean jacking up the rates as high as they can go. But what I mean by that is right now I'm seeing three brackets 0 to 5, 5 to 25, 25 mil plus. Do we want an additional bracket for uh 15 to 25 in the middle and something above 100 million for example those exists or would that be ill advised? Find a way to generate more revenue with businesses. is just that you can end up with one they can be mobile although in some cases it depends on what the businesses are they might not be um you also can end up with a circumstance where you're very reliant on just a tiny handful of tax payers when we did the work for open there they had very high rates on very large businesses and we spent a lot of time just looking at what those actual businesses were and making sure that if you know one business left it wasn't a 10% cut in the revenues

yeah um the way this one's laid out there there is no business I don't think that accounts for more than 3 or 4% of the revenue. So, you know, I wouldn't want to go a lot past that, but I think that's the risk of very high rates on very large business. Okay, so let's drop the 100 million plus, but why not introduce a 15 to 25 million bracket here just to add an additional opportunity for us to drive a bit more revenue from this scenario.

Again, it's uh there's no reason you can't do that. And you um could have, you know, higher rates on, you know, above 15 million, I guess, is what you're suggesting. between the 15 and 25, correct? Yeah. Okay. I mean, if if there's not an extreme risk to it and it wouldn't affect too many businesses, I would be curious to see how that might change the numbers a bit there. um you know as we approach this uh scenario or we put it on the ballot I am curious and I guess the direction I want to give to Chuck specifically is I would want to do a split poll because if we can take this to the voters for a 7x potential but not necessarily levy that the same way with the toot we did 14% but we held it at 8% for a very long time I wouldn't want to limit our ability in a very dynamic budget situation and budget crisis to say okay maybe we give ourselves the authority to go 7x because we have the wind behind our backs right Everybody wants to resolve this budget deficit, but we don't necessarily rush to implement 7x across everything. But that gives us as a city the tools to be able to like start to tweak and say, you know, okay, we're finding that revenue is down in this sector or this is discouraging business in this sector. So maybe we decrease here, we increase here. But I just want to want to go through all this effort just to limit ourselves and not generate a bunch of revenue that we I mean we're talking about a difference between 8 million to 21 million. And if really it's just a matter of how we ask the voters to do this that prevents us from realizing that gap between 8 to 21. I just don't want to limit ourselves if we're going to go through all the effort to to do this. I I I guess it just I don't want us to be afraid of pursuing the 7x scenario. It doesn't mean we have to do the 7x scenario the same way we did with with Toot. Does that does that make sense?

Does make sense. And I think I think the council would have to give us the direction. Yeah. Data. Although I would say if you want to go that way, I think we should pull I did do think we need to do the split sample then may you'd want to know how you pulled it this time and whether or not that pulled differently. So I I if you think that's how the council might want to go then I would suggest doing a split sample.

Yeah. So I guess I encourage my council colleagues to think about if we want to do a split sample because Yeah. I just we did so well with K1. I don't want to limit our authority right off the bat. like if we're going to do this and we're going to update this for the first time in 50 years. Like let's give ourselves the authority to really get creative with our budget. Um so just some food for thought. And then on the ballot question itself, I agree with the mayor that there's a little bit of wonkiness around the way it's written. I'm wondering if we want to use language like uh restore library services as something to help motivate folks as well as add a line that says for the first time since 1978 so voters also understand that this is like doesn't happen very often. get you know say it feels a little bit less like oh this is a last ditch desperation thing but more so modernization like the word modernize I think really plays a strong role here like that's what we're trying to do is we've left money on the table for like half a century and we're trying to get up to speed here I mean like my parents hadn't even met yet but when this thing was first passed right like that that's how long ago it's been so I I like I think we just got to

the framing is going to be important here um and while I you know I'm all for progressive taxation of large businesses the way it reads is like a little too lefty in my opinion where I just think we're here to modernize it. We're here to restore services and improve emergency response times and it's the first time we're doing this in like 50 years. Like that to me is just like, oh, okay, that's pretty reasonable. Um, so that's my feedback there. Uh, on the question of uh, you know, taxing uh, smaller landlords. So when I look at pro, that's the the bottom right here. Oh yeah, go to the questions. Uh, next one. Yeah. So on the question of tax when I look at uh, property records, there's a lot of smaller trusts that are created as a result. people trying to get around the the the tax related to four plus units. Unless you're a big apartment owner, uh uh you can make smaller trusts with family members to buy one to three properties and avoid the the taxation. And so when you do the math of let's say 300 uh sorry, I'm going to have you jump back to match neighbors really quick.

Okay. So 326,000 divided by 4,858 comes out to about $67 per landlord. It's really not that much to ask. And when we talk to our housing staff, what they tell us is that the small landlords actually require the most staff time because they're not experts at compliance. And I just think if we're trying to support our staff and re, you know, reinforce our city services, uh the the inexperienced landlords that are the large, I mean, look at how many there are 4,850 compared to 515. majority of landlords that our staff are dealing with are the small mom and pops and I think they should be paying into helping us provide the services that assist them with housing provision. So I I'm not I'm not here to say like go after all the landlords today. I'm just saying like they should be paying their fair share like everybody else. And I don't want there to be an incentive to uh take advantage of a loophole to avoid paying your fair share for the resources we provide as a city. So I just wanted to be really clear on that. To me it's just like the cost of compliance. Um, and then for commercial rental, I'm wondering like in the same way we have a distinction between residential 1 to three to residential 4 plus, can we distinguish between like commercial rental occupied versus commercial rental vacant? Because I like I would love to have a higher minimum tax rate, for example, for someone that's leaving their unit emptier that for like one and a half years, 18 months plus, for example. So, is that like a realistic thing we could bake into our rewritten or modernized business license tax is like maybe a little bit of a stick for commercial vacancies?

I mean, I think that would be it's maybe that's a legal question, but it's a different tax. It's a vacancy tax gross receipt tax. Obviously, it's vacant. You're not paying receipts. Yeah. Um you could perhaps think about a minimum amount. Um although I don't know if you do that across maybe there's a minimum amount per square foot even if you're not making any money. Oh okay. Um I guess that's okay. Yeah. I mean this just an opportunity to to activate these spaces through this tax. So it's not just they're paying this this simple tax of being commercial but there you know you get what I'm saying. We're pushing them to to activate their Yeah.

Yeah. There I will say um city of Los Angeles considered but did not adopt as far as I recall vacancy tax. Oakland and San Francisco both have them and I think San Francisco might have had to try to pull back a little bit on their okay um in the current like downtown postco changes. So I do think it's worth looking at carefully. Okay. Discussing and we it was on one of the revenue ideas we're not recommending. My understanding from Oakland at least the finance director or finance revenue manager at the time was that it was extremely administratively burdensome. Um

so we're not recommending where we feel like if you're going to put something on the ballot we'd rather you put this on the ballot now. It doesn't mean you can't think about that in the future. Um, but we'll look at this question of the minimum. Okay. Maybe there's a way we can address it that way.

Great. And my last note here is is just, you know, on behalf of the smaller landlords, like I don't think the rate that there in this current match neighbor scenario, it's lower than the larger player. Um, I would want to see that reverse. I would want to see us charging more for the larger players than the smaller players. So, right now it's 21 $21 for one to three unit boulders and then it's 208 for the larger players. Um, I I think you know where I would be open to seeing specific rates go up is for the larger residential unit layers. So like that 208 to me could be higher or closer to what we're looking at for the data center which is like 250. Um, when I'm looking at the revenue amounts that you're showing here, uh, where was it? Sorry one second. Yeah, when I was looking at the first page here, this comparison of neighboring jurisdictions for residential rental units, if you're saying that they're paying $3,400 a year in business license tax, I just want to put that into perspective. That's if they own 50 units, that's probably one, if not one and a half units worth of rent that's going to the tax. And then you multiply that by the 50 units they own for the rest of the year, it's really not asking that much. So, I just don't want I don't I don't want to see afraid to dice that number of four plus units up a bit more or create a category for, you know, 10 plus units. I don't know. But, um I just want to put that into perspective. Does that make sense?

Yes. Okay. Um so, just to really quickly summarize my comments here. Um interested in seeing the creation of potentially a fourth bracket between 15 to 25 million just to see if we can extract some more value there. Uh interested in exploring the split pooling so that we can see if we can get more authority to leverage higher taxes if needed. I think that saved us with the toot tax. Um, wanting to update the ballot question language just to be a bit more even keeled and communicate uh reasoning a bit better with modernization uh restoration of services first time since 1978. Um, and then yeah, I think you heard all my comments from landlords. So I think that that's different.

So like what I think you heard all my comments on landlords. Oh yeah. But just to be clear because one of the specific questions you would say don't exempt the one to three any further. I would say don't accept them. So I think we spend a lot of money in the city trying to help them buy for that. And I I when I review property records I see a lot of small trusts formed to not never exceed that three cap and I want to disincentivize that kind of behavior so we can do a better job tracking who actually owns what. Okay. Thanks. Thanks Council Member R. Thanks.

Yeah, thanks for all this analysis. It's so interesting to look at like knowing how long it's been since we've updated this tax. I know when we went into this one, it became clear that we were going to have to pay the deficit. I was really determined not to do this taxes since we just passed K1 and K1 was a flat tax. That was not an increase in tax. And yes, it passed and yes, our measures have passed before, but everyone's going into terrible headwinds. Everyone's looking at bond measures and the school districts like neighboring cities, um you know, regional transportation taxes. There's a lot that's going to hit people and so I am nervous about going too high. I mean, it sounds like it doesn't hurt to do the split sort of polling, right? To at least find out, you know, to Syra's point, but my gut right now is to go with the recommendation, the staff recommendation on the match neighbors. So, we aren't tracking people. We aren't creating a narrative like they have a deficit and now they're going to do it on, you know, the background. They're going to go extremely high in the backs of of our neighbors given that we just did K1. And even though I think we know it's flat tax, people know that they just approved another tax measure, whatever that looks like. Um but I do I do think we owe it to our labor force everything we can reason over the end. So I am on board with asking forward with the with business tax um you know to to see what to see what it's going to look like and then and then at what point in the polling are we getting the sort of likely to pass given that we're heading into regional

the the the art of it there is just the questions we ask to try and gauge it. I mean I one of the questions we will ask is just our usual tracking questions about how people are feeling about living in Hayward and how they're feeling about how we're doing. Okay. Um so if we see a change in that we'll know there's there's ways to gauge

and then to the B about language you know comments I I mean it does look very similar to K1. It feels like it's a regretation of K1. I would like to see it maybe specifically address the benefit of business license tax to the city coffers and what that does. I don't know how you add a line like that that it's like we haven't updated since 1978. We think to get in line with what businesses, you know, what the services they get from the city, whether that's road maintenance, public safety, you know, code enforcement, all of it, like that there's some connection to businesses in this so that people understand that it's not just a money grab that we're actually trying to come back in line with um what services the city provides to businesses and why that why this license tax might be, you know, might be helpful.

Um I let me go back to the question. I think that was everything. Um Lord exemption. Yeah. Um um I just want to move back to my question. Um yeah. So I I'm much okay with the landlord adding that in. You know, again, I mean, I think to the point, you know, we know a lot a lot of the code enforcement is going to these one to three landlords and that's a city burden. Um and so I think that we definitely need to be looking at that. I mean it especially if it's kept like I think to George's point, you know, that it's lower than the larger unit one. I think that needs to maybe be in fact did what what was the justification for the rate being a little bit higher than the four plus units?

It's basically the same rate I think just in the average amount per unit it end up being um I mean it's just you know of any higher um part of it is that most landlords are in that kind of medium category like even if you own multiple buildings you're paying based on you know a 12 unit building or a 30 unit building or whatever. Um so again you can see the structure is the same for all of them $2 million and then 225. Um a lot of it might have to do with the brackets. There's you know five million ends up being our largest landlords and we consider a different bracket the very small ones.

All right. But in general I mean I think I I mean my gut right now is to do match the mercenary because it just feels like a bigger cell to go into the Berkeley Oakland level of business license tech. That sounds like something we'll get resistance on. Um, but I'm happy to pull about it and and see what that Thank you. Okay. Um, council member Andrew. Yeah. And I lunch is like on on it. It's in route and so about to hit the table. Yes. What are not that's a rush but I think we had talked about just looking at the calendar stopping for lunch at like 11 or not until 12:20 but we can move that around too

this here. So I guess we could if we wanted to take like a 10-minute break after this we could get lunch and continue or not or you guys let's finish this. Yeah, I think we should definitely finish let's finish this this then we could we could break let's and then we can um go grab lunch and eat it here at the table. Yep. While we keep Yeah. Okay. Yeah. Let's work for the lunch. Okay.

Okay. I'll be very brief. Uh I'm interested in the match neighbor scenario. Uh I am lukewarm on the split pulling but the 7x scenario as a person that works in Richmond, you should really talk to Richmond, see how um the businesses are doing there. So I would really have a good conversation with the economic development team. Um, I am a little a little concerned on some of the retail sales because they are receiving kind of an onslaught, right, of issues that are happening nationwide. This there's a major transition happening

of items that are being purchased online versus in person. So, I really want us to be very sensitive to that compared to others um on this tax form category list. Um I know that there was a discussion we had in previous meetings about the balance of hotel sales versus professional services and maybe that one is is is something that we can revisit because we are starting to see more wellness self service related um businesses that are opening here versus actual sale of goods. So I'm interested in looking at that. Um and then also that we are hearing a lot of things like from the restaurants and um I do want to be sensitive to that when we are looking at um that category as well. So um I know that is also in the area of transition where there's street vendors versus restaurants. So maybe there's some sensitivities we can look at before we um look there. And then um um as we just raised taxes on the hotel and motel so I just want us to be sensitive to as well but also don't want to discourage more hotel from coming here. So, um I agree with the mayor in terms of what are they getting with this new business license tax and how are we going to support them when they are here and let's see what else um contractors interested in looking at that one as well given that the market has slowed down. So I'm just want to be sensitive to that as well. If you're taxing our contractors and they're seeing less commercial development, less residential development, are we going to encourage them to stay here? So what are what are some things that we can do to support them in this? And then as far as the the residential, I'm interested in seeing if we can do a deeper dive on the on the

smaller residential units as well and being sensitive to that. Um because uh they're even though they might be one to three units, uh it might be a lot more labor intensive on our staff, but if if there is single owner uh residential, sometimes it's tougher for them to actually manage a a resident when they only have one unit. So, um, if we can look at that a little bit, I don't know if it's I don't know how we can compare the different LLC's versus someone that just has a granny flat. Um, I think I think we should be sensitive to that as well because that it's it is um time intensive with them as well.

So, are you leaning towards keeping exemption or not? I look I want a little straw poll as we go. I want to do a straw poll on that one. Well, I mean, yeah, I mean, keeping track of where you guys are. Oh, I I was just wondering if we can get more information on someone that actually owns just a granny flat versus an LLC that of a group of homes that own a bunch of different two to three. I'm not sure yet. Yeah. Okay. You can ask for a housing staff, too, if you want to like understand their experience of working with them. I mean, yeah, I would I would bring back more information. Sure. Um, okay. That's all for me. Thanks. Council member Bonia.

Well, thank you so much for this update. I'll I'll also be brief. So, yeah, I agree with most likely as well. I was kind of wondering why Union City wasn't listed on here because I know that they went through a business tax update recently. Um, you know, we just tried to pick reasonable neighbors. No, no reason or not.

I was just thinking, you know, if I'm in any of these categories, Union City is such an easy city to move to right next door. So kind of I mean comparisons would have been helpful but water under the bridge there. Um okay. So what I'm concerned about related to I guess I just want to know you know I'm I'm open to the split polling but I'm I really don't want this to drive too much opposition. Right. And I'm thinking if we're going to start saying we're going to raise something but we do have city on this slide here. Okay. So, we're going to still be lower than them in this new is that current or is that new? This is that's the current.

What about what what are we going to look like in because you know how all these other on a Mac current, but we'd be a little higher overall in terms of revenue. Yeah, we'd be I'd say around a little over $3 per thousand of taxable sales compared to $1. Be kind of in between Alama and a little more around. So, it' be more than that, but we could we also we're coming back in a more session. So we're going to add union but yeah.

Okay. And then um yeah so I am concerned about kind of just the 7X. I totally get why we'd want to do that but you know one of the things that we heard about was what can we do related to cost of living. This is a real way that we can impact cost of living in our community is how we decide to tax people and businesses and how that tax then trickles down because you know your businesses have ways of passing through cost. So, um I'm also more on the, you know, kind of match match our neighbors in most of the categories because, you know, I see these as being modest increases, right? Like going from 44 to 450, going from 512 to 7 to 570.

Where I start to get concerned is like in the grocery category because that hits us every day when we're in the grocery store. So, we're looking at like doubling the business tax on groceries going from 1,100 to 3500 like how how I guess can you just talk a little bit about how you see that manifesting in terms of like impact in in the community? Like would those costs be passed down to you know people of the groceries? Because I mean I'm just I think we're very price sensitive in Hayward and if we're going to kind of go after groceries which is something we all have to be able to afford. I I don't know if I like the way that that is currently being doubled.

We talked about this once. So, do you do you want to talk about it? You want to continue? Yeah. I mean, the grocery category is set to be half the retail rate. So, lower than other retailers. And if you look at the other slide where you can compare to other jurisdictions, it wouldn't be um you know much higher be around what what others are charging. Um the thing about grocery stores is it sort of cuts two ways. One, grocery stores are unlikely to to close down or leave. They need to be near their customers. On the other hand, they operate on thin margins, so they are relatively likely to pass on an extra cost to the customers.

Um, this is only $3,000 on a whatever rates of, you know, many million. So, it's it's not a large percent increase in grocery prices. Probably imperceptible would be my expectation. I think when we looked at this because we did we anticipated that there would be some sensitivity around this and I think when you look at the neighbors I think that's what made me feel okay about this was that we in line with the neighbors on this one um and our and our rates overall are just low because they in place for so long. So it but it is one that we were watching carefully too.

All right. And then, you know, the the residential, you know, um, tax, I think it's it's, you know, 208 and 211. It's kind of negligible on fine leaving it as it is without kind of the carve out because, you know, I'm sort of thinking a lot of this is going to be passed down anyways. The reality of it is going to be passed down. So, if I'm a resident in Hayward and I'm choosing to live somewhere, just because the owner has eight properties versus one property shouldn't necessarily impact my rate of rent or whatever I'm going to have to pay. And I think it is if we're going to start to try to create too much separation between one to three units of ownership and larger things unless, you know, so I'm just I I appreciate how we're looking at this through the lens of how the city is going to get money. I'm looking at it through the lens of how this cost is going to be passed down to the average person in Hayward who's already cash strapped and now we're going to be looking at all of these other things to go and increase taxes when we don't have any discretionary money already just like the city doesn't right so now we're going to have to go and look at are we going to go and pay this tax measure for Bard and for this and for that and then we're going to go and do the same thing in Hayward so I'm just really sensitive to any additional taxes and I do think that we're going to have to really be clear on what is like the mayor and like council member Andrew said, what is the benefit that these businesses are going to get by this increase, you know, overnight increase three and a half times their current tax rate. So, um I'm I'm I'm okay with the split polling. I don't think I'm going to agree with the seven times because I'm concerned about the residents saying go for it and then there being all kinds of opposition that comes with it from the chamber and from other businesses like that. So I think three and a half% seems much more reasonable but I am open to hearing you know what we have to say but and then the other thing is I also agree on the language the language feels really very much like the t like what we just did with K1 right so I think we do

need to kind of broaden it a bit to put in other services that the community cares about like libraries right or you know I'm not I don't think that this is going to necessarily impact the cost of housing but you know there any ways that we could tie it back to the concern concerns that they have broader than just public safety because I feel like everything is pinned on public safety and at some point that narrative is going to be like how much more money are we giving public safety and I I think it's probably mischaracterized too if we just say all this is going to public safety. So those are my comments.

Thank you mayor and thank you for the support. Um uh because the increase is going to go down to US residents. I I I support the match neighbor as opposed to the 7%. So that that we're not hurt that much. Uh so that's important. The uh survey language needs to be um uh business and resident friendlier so that they can be uh convinced that what increase there may come there will also be benefits to the residents and to the businesses. And that's important. And it's good to use the word modernization as opposed to increase. Uh so that's important. Um uh in my mind, everybody needs to everybody needs to contribute to what we're doing. So no exceptions in my mind. Um uh because we only and that's it. So the match neighbor is what I support.

You um how do you fill out a split sample? No. Thank you. Council member Goldstein, thank you. I understand about the split holeing it was to I think gauge the temperature for the match versus the 7%.

So, I'm okay with that. Uh I actually like the idea of getting approval for 7%. I don't see us moving there right away. Um but it would be good not to have to revisit this again if polling shows that we're going to get acceptance for that. Um, of course I am concerned about the cost of living impact, groceries, stuff like that, but the the numbers are actually so small. I don't really see this being a big impact. Um, so, uh, I'm actually okay with it. I'm also okay with taxing smaller residential units for the same reason. It's there the burden's there. We want people to share, uh, you know, the cost of actually doing business here in Gayward. I think it's okay to do that. Um, of course, completely separate from that, I hope that we're going to continue to pursue ways to keep people in their homes, ways to do shallow subsidies. That's a completely different conversation, but um I'm sure we're going to continue to pursue that. Uh the uh aggressive sounding language I think needs to go. Uh I'm in favor of uh modernize first time in 50 years comparable to nearby cities and then also adding the benefits roads safety of course you know benefits the business community as much as everybody but then there's also infrastructure and permits and code enforcement and uh I I think those things you know our businesses know that it takes a lot out of the business to do those things and make sure not only are they operating correctly but the ones that they complain about also are and so uh I think we need to call that out.

Thank you. Great. Okay. So, can I summarize? Yeah, go ahead. All right. Just to make sure. So, I'm trying to do a little So, what I think our direction is, it sounds like generally or most support for the match neighbor, although you know, a couple that may want to put into the ballot a potential to do up to the sometimes. That sounds like an outstanding issue that we're we're going to do the polling and then the council can make a decision on that. That's okay. Well, um, but there is consensus to do the split polling. So, we will do that that we have that information. I think there's more the majority to not exempt is what I'm hear. Um, again, you still you're going to plenty of time to make this. Did I say exempt? I meant not exempt.

Okay. Well, now we're now we're 100%. Okay.

So, not exempt. So, that's I'm glad. Feel free to change. Um, and then definitely to rework the polling language will take some that that's a little bit more of an art than a science. So give us a little bit of license to try to tweak it, but I think we understand some of your changes and other thoughts on that. So we'll try to do that work with the city attorney's office, work with our polling consultant that sometimes has strong feelings about how to word things. So we'll we'll do our best to kind of incorporate as much of that. You'll that'll be for the poll and then you'll still have a chance to tweak it further before the ultimate going on the ballot. Um, and I think that's it. So, and there's a couple you guys have other thoughts. So, we'll be looking at some other details when we come back with like a more detailed rate structure, but for now, I think getting direction on the polling. It sounds like you're in support with us moving forward next week with some changes to language, doing split poll, getting that data, making some tweaks a little bit here and there, and then coming back to you in April 7th with a fully based a little more fully based kind of proposal. Is that

Yeah. And I just just one thing to clarify. My my only concern and I I see what what you guys are saying about the the polling at the you know upwards the seven times. My my only uh my only concern is this is that um you know down the line down the road um councils you know we councils uh you know when you know in in in tough negotiations people are going to say well you can pull from that pot. you can pull from that pot and and and and I and and what I'm and so what I'm I want us to be very you know um you know I I want us to be very mindful of the pressures

that you know if we're talking about you know being you know responsible and we're talking about being prudent we're you know we have to be very careful and in pressures of like the triggers like well you got that pot you got that pot because it's happening to us right now and um and So we just, you know, that's my concern is that let's say we do poll at seven. Let's say, you know, people say, "Yeah, it's 700 or 7% or seven times." Seven times, you know, we're going to start getting pressure to go seven times, you know, and and so I just I just want us to be mindful. Oh, yeah. I'm aware. Thank you.

Mayor, I want a little more time. I hadn't thought about it. So, I'm happy to I don't have a recommendation for you, but if you want to think one of the things that I think may council member Bon said, I do worry a little bit on the opposition than if you push it too hard and then if there's more opposition, we'll get some of that data through the polling as to how sensitive voters are to oppositional language, but it just creates a different risk for you and whether or not you want to take the risks. But, let me think about it more. We'll talk about it more. We can give you a better thought when we come back at the polling results, too. Yeah. Okay. Oh, just um so let's pivot to lunch, but let's let's do this. Let's do this cuz like you know the the second half is basically

um options and discussion and stuff. Let's do this. Let's let's eat and let's enjoy lunch and and then um as we're enjoying lunch um just think about being more concise, more precise amongst our questions and and uh does it? Yeah. No, no, no. Uh, Council Member Roach, can you please be more precise and better? But no, let's um you know, let's let's spend the second half. Um, you know, um, let's see if we can get it done by the time. So, what time are you wanting to come back? So, let's come back. What? Uh, uh, 1210. 12:10. We had, originally, we had said going coming back from lunch at 12:20 is what we' said. We're at 11.

1210. Okay. 1210. 1210. And then we had this big catch all. We had an hour and 10 minutes which was just going to be discussion. So we're kind of assume that you're gonna have less time there. Um but you're kind of doing it as you go more. So I think we're going to be okay. So 1210 is what 1210 you 1210. Yeah. 1210. Eat fast. No, I'm kidding.

Thanks. Recording stopped.

Heat. Hey, Heat.

Heat. Hey, heat. Hey, heat. Happy. I feel

Heat. Heat. You are home.

Heat. Heat. Are you feeling

Happy. Ready for that? Yeah, we're ready for that. Okay, get started. Yep, you're ready. Let's go. Let's go. Recording in progress.

Um before uh before we get started, wanted to thank staff for um for lunch. Lunch's good. And um thumbs up on the chicken avocado BLT. Um so we are back from uh from lunch. So uh city manager let's take

so our next section is to talk about other revenue options know under every rock on both the revenue and expensive bud. Before we do that again chatting with our consultant blue sky and before of you as well just wanting to kind of revisit briefly the split pole whether or not that's something that you want to do. I think our consultant felt like if if that's something are really not going to be and probably kind of advised against putting it in the poll or just but it's again ultimately your choice what you want to do but um I just wanted to kind of revisit that just see if there's any additional thoughts on that.

Can we make the decision once we see the updated language? U anyway um just because we just have that conversation because we're Yeah. Um because we are we won't I mean we could bring it back and do the poll later, but that wouldn't be coming back on the 17th and revisiting. We were going to try to start the poll next week. Oh. Um and you were going to give us kind of the discretion to speak the polling language based on the feedback you've given to us. We can wait on that and we could come back on the 17th with an item to finalize. If you want to think about it some more or do you want to go now?

We're all you know we're all here. I want to I want to sort of seize this moment but and I I mean if uh you know if there are no objections I know there Sarup and and council bolstein has sort of talked about it um you know I'd like to make a plea if we can just sure if yeah I'll defer to the rest of the council because I believe councelor Roach was also open to it as well. I don't know if we necessarily have to do the split poll, but I am interested in seeing how we can tweak our match scenario to see if there's more revenue we can generate out of it. And so whether or not we're pulling on that language, I still think the math neighbors scenario has some work to be done to potentially realize some more revenue. I agree. That's my interest. I'll

So So we'll Oh, yeah. Go ahead. Yeah. I mean because I was open to and then the discussion was so helpful you know just hearing from everyone because I do think some of the points of you know um what you know once we put it out there like when does that trigger get pulled in the future and I feel like certainty over what the business tax might look like is probably better and given that my recommendation is to stick with the um staff information which is the match one I think at this point I I'm worried about us doing the split polling I'd like to stick with the polling for just the three of the percent and you know understanding what you're saying, but I am nervous about that. I think in a committee like that, I think you need to try to do this um match. Yeah. Okay. And then I don't want to do a split pole.

We're not going to do a split poll. We're going to definitely tweak the lang if you're giving us discretion to tweak the language based on the feedback you've given us. Still go out with a polling next week.

And in the meantime, I think the amounts that we'll have in there will be sufficiently like so even if we're able to, we will try to extract as much from the match neighbor scenario as we can. We'll go back and look at some of those suggestions, but I think we're probably don't know where Chuck is like yet, but I think whatever numbers and range we put into the poll is probably going to be close enough that we'll be able to get a good handle on the results from pulling the excuse me, if the language basically says we're going for a number, we're not specifying a percentage. We're just saying business taxes first time 50 years modernize blah blah blah and this is the amount of additional revenue that will go towards the benefits. I would like to see us use the number that is the seven times factor and then if we're not getting polling numbers that we need to perhaps redo with different

Yeah. And I guess I disagree with that. I don't know what this was because I'm worried about that. Dan, the 7% worries me, but I don't know if 7% or seven times. Sorry. Seven times. Yes. Yeah. Council member.

Yeah. You know, I I agree too, especially kind of in light of some of the comments that we've recently heard and how the conversation has progressed. I'm wanting to do the match too. I think that seven times is not going to give the certainty to our business community that I would want if I was a business leader in Hayward. I get the discretion of going up to seven times, but we're already potentially saying we're about to go three and a half times higher and oh by the way, we can also then turn around and double that to go seven if we so chose. I think leaves too much uncertainty for the business community and I think for me it's just too high. So I would want to see us just pull on the matching as well.

And I and I do want to be clear and I I agree and I want to be clear that the ballot language does have a range of tax rates. So you you know in order that's why I would want to say the match. Yeah. And I would want to put that we do need enough specificity about question to do get a good read on the voters. So we have we do need talk to our pollster. We do need to put a range of tax rates and a range of revenue. Sure. And I think that whatever align with the matching neighborhoods throughout country. Great. Okay. I'm I'm okay with that. Okay. Although I do caution against us taking decisions that our business community will have thoughts on because they may be thinking differently that the poll may expose.

Well, the poll will most likely be going to voters all voters. Yeah. Well, we will do additional outreach on them. But I do agree with third that we should advance at this moment. So let us look at the structures and within the kind of neighbor match neighbor kind of context to try to get as much money out of this as we can. I think that's really valid. Let us look at that. Yeah. I just wanted to follow up on that point like at the end of the day we're pursuing this not we're trying to close this deficit, right? And so we're doing all this work to only maybe get a third of that deficit down versus getting half the deficit down. Then making the most of the moment is really the core guideline there. Okay. You got what you need? Okay,

so we're gonna shift to other revenues. We have our um revenue manager, Michael Farms, who's also, I think, doing some added duties. So, he's really stepped up and helped us through all of this. And so, he's going to do some presenting on kind of all the different revenue blocks we're doing. And I'm going to step in a little bit because there's a couple of kind of questions that we're trying to get direction from the council, but we're kind of tagging the audience, but Michael. All right. So, we're going to talk about a few. There's a big revenue idea list that's in the exhibits for this meeting. So, a whole big list. So, we're just going to talk about kind of the big ones right now. Maybe the big six or seven. Um, start with some of the more likely.

Michael, could you introduce yourself just in case the whole couch I know I know you're sort of a new face the table. Sure. Sure. My name is Michael Barnes. I'm the revenue manager downstairs. I'm currently working with Vienna as the uh deputy director of finance. So, hard to see. Been with the city for a while.

Um first of all, some likely items. Um we're working on an update to the user fee schedule and the cost recovery schedule. That's happening right now. Estimated about a million dollars in in some additional revenue there. There's some new data centers being opened up. Um, two of them are in the works and we're pretty certain that those will be open. They're in the process. The revenue, we hired a consultant to estimate some of the additional revenue. And think about this is utility users tax can be some property tax increases, some sales tax increases in the initial some sales tax increase. Um, and they're estimating about 900,000 to 200,000 or 2 million, pardon me, within with that to continue to increase. I think the highest I saw was maybe 4 million or so in four or five years from now. And that does not include think about any of the potential increases within the business license tax if if and when that wins. Um also the use of bag C some OPED trust funds and uh CDG funds will help those will be more one-time items but some party time some of those falling off as we go into later years. some more of the uncertain slashimprogress either uncertain as to the amount um or uncertain if it's going to happen at all. Uh we're working on some changes to the utility users tax code for uh to collect from streaming companies. There was a a recent um court case that allows for cities to collect UUT from streaming companies. It's being challenged right now in the courts, but um we're optimistic that uh the state supreme court won't hear it and we're moving forward and as an estimated maybe about 750 to a million building up to maybe a million and a half, but again, this is uncertain whether or not it's going to happen and uncertain as to the

amount. So, those are some estimated amounts. Additional cannabis revenue, we're looking at about 400,000. That's that one new additional spot. But again, that could be delayed. There's some litigation happening. So, none of these we're really putting into the budget for next year. A lot of these uncertain ones like these. Um updates to the internal cost allocation plan that's happening right now,

estimating about 500,000 for an additional revenue into the general fund. And then illegal cannabis grow fines in searching for some grants. Those would be one-time things. And that's really unpredictable, really uncertain amounts there. So again, there's a lot more in the list. Continuing on, we So then talking about some first responder fee.

Yeah. Oh, go ahead. So working with the fire chief, the fire chief really took the lead on looking at preparing this. I I work with these fees in other cities, too. But um so I'll start you have a lot of questions on this and pull the fire chief up so he can help. um answer some of your questions, but we we did have a first responder advanced life support reimbursement that was phased out in 2013, resulted in a loss of about almost $500,000 annually in revenue. Um uh seven Alam County jurisdictions have passed nine EMS crop public safety tax measures over the last 30 years and a lot of our surrounding cities rely on these revenues pretty significantly for their for their to fund public safety services. We don't have one of those. They do.

Um, also there are Alama County transport agencies, and this is I've experienced in Alama that do have first responder fees. So, it's much more common to have cities that actually provide their own transports or have an EMS resp or first responder fee. That's very common. Um, these rates are bundled with the others and and it does generate pretty significant or you know, not significant can be misconstrued, but generate ongoing revenue that um, cities rely on. We are a transport agency. So we're a non-transport agency. So cities like us, it's not very common that you have a first responder fee. Although there are some examples um and they have kind of varied results because um in the case of transport we're actually getting a service all you know cities at least in Alamina we were pretty um proactive about going after um having all whether or not you um have private insurance or not like everyone has to pay and part because we have to offset the cost of transport for non-ransport agencies like Hayward it's um right now it looks like in the chief can correct me, but that you know a lot of the even private insurance companies are choosing not to pay this. And so right now most of the um payments for these non-transport agencies are coming from Kaiser but all the other kind of private insurance aren't making these payments and so there aren't so the results of the revenue is kind of varied and uncertain and um so I think this is one where I don't I'm kind of it's based on the Valo comparable which we're similar kind of thinks we there's a lot of reasons why we would be comparable to them and they generate in the higher end that 350,000 but they're able to you the billing is done through their ambulance contract but it's kind of a small ambulance contract and um we would have to go through folk we've had initial conversations with folk that they might

do the billing for us um that said it's a little uncertain as to how what our payer mix is a little different although you know the chief thinks it's probably comparable to Valo in terms of our payer mix like where people have their insurance or not um if fault does wouldn't manage this for us, the billing for us. I would we are I think the chief and I agree. Well, we should we would not want to move forward with this because it just means a big administrative burden and could end up and it's just not a ton of money. Um if you know they agree to do it, you know, we get 30 maybe we get 350 on the high end. So it's this one's we're kind of on the fence. If I I think if we can get folk to bill it for us, then we're kind of on the fence. Would you want us to We would have to come. there would be a lot of work pre-work like to get the ordinances and I'll ask the council take this on and it looks like some cities that are doing this are phasing them out or they're having very anyway it's just kind of a little bit lukewarm on this one so we want to get your thoughts on that the next one is one that came up um um short-term rental ban enforcements and so we did some research and some help from mayor prom too and but we did our own kind of research Granicus, who has a software that they would charge $25,000 annually for. We talked to them directly. They had their kind of sales people, but they also had their policy people online. And we have Granid products like Lifear. And so we talked to them for a while, asked a lot of questions. U Michael and Diana joined that conversation and Sarah. Um, yeah. And the idea would be that, you know, using that 25,000 annually, what they do is comb all of the like short-term rental companies and they download and get like uh because right now we effectively have a ban. Um, and so they find, oh, it turns out we have about 272 on average um, listings on the on like Airbnb or

VBO or all these things. And then they um he could essentially enforce and say, "Hey, send out letters and say you not only owe us toot, but you also owe us a fine because you violated our ban." Um so we think that's a possibility. We've run some numbers. Um and that was just on an annual basis. I think somewhere around 452,000 assuming that $1,000 fine amount and about 60% collection. There are some heartburn around this and a little bit because a lot of our listings are rooms for rent which could mean that tenants are listing a room in their unit without their landlord knowing.

Um in which case um you know we would send letters to the property owner and so is the tenant going to get into trouble or is there going to be potential kind of impact tenants that this is their way of trying to pay their rent. So I'm a little nervous about that. Um, I think if you excluded rooms to rent just did single family homes, I think we would be fine with that. That would obviously reduce the 452,000 because you'd only be doing it on the other u 58%. Um, the other thing to think about is once you start forcing if the goal is to essentially have people comply with the ban, the revenue will go down, right? So, and we're not sure how much more that would go down as you start to enforce more strictly. And then also how much do you want us to like actively enforce? We don't have a lot of resources, right? We're so if the intent is for staff to like follow up. I mean we just do the initial letter. A lot of people comply they say granicus just because we literally attach the advertisement like we caught you like pick the money and this whole lot do comply. But if you wanted us to send follow-up letters and really kind or have code enforcement go out, then I think we'd be then I'd be probably a little less um supportive of this because I just don't think we have the resources to enforce that that strictly given the amount of money we would generate. So there's just some policy questions. I'm not opposed to this. It's something we could do. We could try a pilot could just focus on single family. Um, so we'd love at the end or now, however you want to do it, mayor, but get direction on these two fees that are we're just kind of on the fence about a little bit and get your thoughts on it. I want to the next slide I just want to say because these have come up is that we are not recommending at this time. Meerus Community Facilities District is a land secured financing. You have to get twothirds voter approval for anything. Um, I've used these for land sale, public land sales. They're great because then you as a landlord are saying if you want to buy our land, you've got to pay this tax. We vote you,

the council votes to put it in. We don't have to do the twothirds of voters. Typically, it's used for infrastructure. You can use it for services. So, this could be something if we're selling large parcels of land. It might not be worth to set something up on a small parcel, but let's say partial group six or something like that is larger, you might want to look at this as a way to defay some of the cost of new development. Um,

but it's not something that I think we would recommend. It's not going to be a way that we think will solve our current budget deficit. An enhanced infrastructure financing district is essentially kind of a redevelopment 2.0 where you're redirecting future property tax revenues to fund infrastructure. This is great if we want to some big project that we want to, you know, catalytic project and you want to invest your future property tax revenue um into this parcel or potentially even new development. But it does mean forgoing property tax growth. So in this case, it actually has a would have a negative impact on um on our general fund or on future general fund because taking properties act and using it to finance infrastructure. So

I just want to explain those. Um and then last just you know I just want to acknowledge we've heard this from you. We talked with our I talked with our economic development officer and just ways that we can be trying to attract uh new developer or new development and new businesses. And so a lot of things that he's doing and his team are doing to try to expedite and concierge and fasttrack approvals for businesses and working with our other departments to try to do that. I'll just stop there and then I think you know obviously any questions and comments about this especially wanted to get your direction on the EMS responder short. So I guess the the one question I have is uh the emergency the EMS fee.

Yeah. Um and you know I know the chief's in the room but you know I mean what is the appetite in the in the fire department? I mean is it is it pursuit? I think I hear the same manager where that if the billing's done either internally or we're paying for a company to do billing, most of the revenue generated because the payer mix is so small. Yeah.

Um will get absorbed in the billing. So you're basically just processing Kaiser insurance and putting in billing and as a for us helping us right now in effect. Um if we went the Vallejo model, you would see potentially optimistically see like 3 350 a year going forward every year. you know that someone you know we all saw the same news last January when San Jose letting do it across the state you're seeing million more people do it appetite in the station we're riding pro showing up and never collecting insurance but in today's reality and when you look back in 2013 where we used to have money that was passed through through transport we don't have that it is harder and harder to provide services

and and what happens in the event let's say uh contracts, ambulance service contracts changed. Is there is that sort of a is this a a program that ambulance companies know and could adopt? So yeah, our current transporter for the next three and two and a half three and a half years again. So there is potential of some new provider coming into the county. We would have to sit down and renegotiate the billing and sort that out. had some you know initial conversation f nothing official think there's there was room there and obviously Malleo would be the best proof of concept they were able to

are other ambulance companies do they have these systems in place that could that could do that or is or let's say let's just say hypothetically we went through to another contract another company would they have to build out from scratch a whole system to do this I I think that the willingness just the transport company comes from. They're billing anyway. It's an added line to their bill. And that's where you see like Alama City and Berkeley be able to collect that fee. Um versus departments like us in Fremont that haven't because we're not billing already. So for the transport provider, if you're already providing a bill, you add a first responder fee on the bottom. Okay. Okay.

Just to kind of follow up on that line of questioning. Just for myself and for anyone who's watching, can you like let's say somebody calls 911, needs a paramedic to pick them up. In practice, when we look at this EMS fee, really follow would be like what you're saying is just adding a line saying we're adding this additional fee to the insurer if they have one. That what it looks like in practice or you're asking the person you're picking up, do you have insurance? Now, it's definitely one of the advantages of having the transport company collect that information because they're already

Okay. Um for us as a fire department, we have not been collecting people's insurance because we're we're already providing that service. Yeah. Transport agency does. And one key point is that all the agencies that are doing this, they call it compassionate billing. They're basically sending a bill to to everyone's insurance, whether it's health insurance or this traffic accident, the auto insurance. Nobody without insurance is receiving a bill. Okay?

So they're, you know, they might reach out and say, "Hey, do you have insurance?" We don't. Okay. There's no bill that goes out. Unfortunately, all the insurance companies pay for transport. I think city manager pointed out only one of the insurance companies currently paying for the EMS first responder fee. So, the payer makes it smaller.

Yeah. Okay. So, I guess my concern is I wouldn't want to invest staff time into something that the corporations are just going to ignore, but it sounds like even with the reality that we're currently in, we could still potentially yield 300K. Is is that correct? It's what we think, right? I mean, it's an estimate. We don't we won't know until we start to do it. But based on Balo that has a similar kind of demographic and calls for service, the chief did some analysis. That's why we use that 300 350 as an upper limit. This is exclusively from Kaiser paying. Okay. So, what we're saying is we're hoping we get 350K from Kaiser on an annual basis. And if Kaiser decides they're not doing this anymore, then there's the bang worth I mean, yeah. But

I think it's really for me I think it's not I'm not sure because we have to you know his fire staff will have to put together the ordinances come to you. I mean this one that's why we'd left to you know kind of a little hedging you know another thing is that we could well it's barely worth it I'll say I mean we get 350 I think we'll barely end up getting 50 you know I don't think it's worth it. Yeah, we don't know until we start doing it. And um it will take some, you know, some concerted staff time to get this on the agendas and get it all ordinances and our attorney's office to do all that. And I see I'm pretty pretty lukewarm on this. Okay.

I would defer to my colleagues here, especially council has more experience, I think, in the crisis response space. I'm curious to hear your thoughts on this. Um on the top, so yeah, I'm neutral to hear on on the and thank you for the feedback on the topic of the short-term rental ban enforcement. Can we just jump to the slide? Uh, perfect.

Um, yeah, I think $25,000 is a small investment to make to yield uh 452 in potential revenue. I mean, we're looking at one to two positions that we're able to preserve as a result of a small a small investment. I think the pilot makes the most sense just because we don't want to target or hurt our housing stock. What's not spelled out here is the revenue we generate by pushing folks towards hotels, which is also one of the reasons I'm interested in pursuing this personally is, you know, we just increased the TOT on our hotel ears by cracking down on what's already illegal in HA, which is short-term rentals and Airbnbs. We're telling those customers to go to hotels. So, this to me is one of the ways that we're driving folks to the businesses that we've just increased taxes on and one of the ways I think as a city we can be supportive of our our hotel and motel ears. Um, I'm supportive of uh the pilot just to get a sense of how much revenue we could possibly generate through this process. Even if it's half of that, like if we're generating 250k, that to me feels a lot more like a that's the gamble I want to make. As long as it's not super strenuous on staff time, then you know the the firefighters time on potentially 50k. Um, I feel like there's a higher likelihood of success here and revenue recovery. And as long as you know this is uh cash positive, like if there's a four time ROI, even if we're bringing in $100,000 annually, I would say that 25K to bring in 100,000 annually, still feels like cashable spent to me as a city because not only are we driving up business for a hotel years and the taxes that we get from that, but we're also taking, you know, let's say um I don't know what 58 uh 58% of 272 is, but that's adding over a hundred new units of housing back into the housing market. So, at a time where we're unable to build new housing, I do want to increase the rental stock in our city. So, I also see this as a way of us hitting one of our strategic priorities, which is to like produce more housing supply for our residents. Um, so I still am supportive of this. Um, I guess Director Bowser, if I could just borrow your time for just a second, like in your conversations

around this topic, can and I know your especially your department's been hit recently with with uh workforce reduction. Could you speak a little bit to your perspective on this program before I charge ahead? Yeah, I think a lot probably does depend on what exactly it is that we move forward with. I think our biggest concern is that a majority of the units that we're seeing are rooms for rent, right? And so how is that going to disproportionately impact 42% folks that how is that going to impact, you know, the folks that are renting out a room and they're where they're living, right? And so you get rid of that and what are we where are we pushing those individuals to, right? So that could be

it's an unknown, right? So that's one concern. I think some of the initial proposals uh were that there was going to be some uh a lot of this would be done and was part of that uh cost the the uh the outputting of the money to like grant us or whoever we would work with us on this um that they would take care of a lot of the letters that would go. So there wouldn't be a lot of I think it's more in the ongoing the enforcement as a city manager indicating if it's if it's just do the one time see what we can get wonderful but if we then have to go out multiple times to do the enforcement

without recovering anything back or again over time the thought is that they go away so it's not going to be a sustainable funding source right um this again is could be more one time or for a couple of years but the idea is that once you have compliance you don't have any more of this. Like you're not getting anything from this in the long term assuming we have compliance. Okay. So I don't I mean I I think in a pilot it might be it could be worth it as long as it isn't a lot of staff time but I think in an ongoing it's going to be a lot of staff time with an unknown amount of money and it certainly wouldn't be sustainable if we achieve what we're looking to achieve.

Yeah. I mean the compliance is a good thing. We are getting a bunch of heat all the time around non-compliance for sidewalk vendors, right? like I don't see why we would let this class of folks who are breaking our code enforcement laws off the hook when I would argue this compliance is significantly easier to to manage. Uh but to your point around, you know, not wanting to impact folks who are doing things for rent. Yeah. I think what I'm just advocating for is support for the 20-year pilot for single family homes. Uh because I also just want to get a sense of like how much will this increase compliance across the city? Um how much toot revenue will this help generate? How much housing stock will this add back to Hayward? think there's like I just think that we we've had this rule on the books for a while. I'd like to see some bias. I think there's a dashion effects that support our revenue objectives too. So those are my thoughts.

Thank you. Um so I'll start with the emergency medical service fee. Um what's interesting about that is I think the issue is sort of how that's being built. than I get right now that Kaiser might be the only one paying for that now, but this is kind of like prehosp care that is actually billable. So, I know that health plans are doing this state by state, but when I just left Anthem, we were paying this in other states outside of California. So, I get that Kaiser might be the only one paying it now, but I'm wondering if we're looking at 350 just based off of one insurer. I'm not sure about the legal obligation for them to have to pay this or not or how discretionary this is, but if we're saying 350 just from Kaiser, if other insurers were obligated to do this, like and if we have this in place, that can be easily over a million dollars, right? If we're just saying that this projection is off of one insurer voluntarily paying this fee. But I'm wondering how this fee gets charged almost as like critical prehosp care that's provided by our first responders because they pay for it from EMS all the time, right? So if our firefighters are coming out and providing the service before EMS get I mean if we were only providing firefighter services then this advanced life support or this medical care would be provided by EM by an ambulance provider, right? And then that's totally billable. So, I mean, I'm just wondering if it's just working, and I agree only if it's billable through an ambulance company where it's just one more line that they add to the insurance. The insurance pays it back and if they don't, then we're done with it, right? But if they do, then I don't really see any administrative overhead and I would say maybe we should pilot it, right? But I think if we have to do any of this inhouse for 350,000, I don't think the juice is worth the squeeze, right? But if the if these if the if EMS

is already billing for transport and if we can tag our little piece on there because we were there providing you know care before they got there then I think it's just one and then it's it's a pass through right so I would be open to seeing that and then I would also just be open to seeing how we as maybe an EF fire or public safety community can start to apply more pressure to some of these large health insurers who make a lot of money to be able to provide this, you know. So maybe if this and I'm not saying that this, but if there's a collective way of maybe even leveraging some of our lobbyists to go and lobby other health insurers to say, "Hey, we have this out here. It's something that you'd be paying for already. If it was built directly through an ambulance company, why wouldn't you take the bill from a city that's providing the same services?" Is just something that would be interested in exploring. Um, but again, if any of this needs to be done in-house and isn't just build through fault, then I would say just be done with this whole idea for now.

Um, okay. And then I mean, I'm just so I guess I'm even more intrigued that Kaiser is the only one paying for this right now. I mean, that's so crazy because Anthem is paying for it in other states. I'm wondering why they're not paying for it in California. I think they are. Oh, I think they are. That's my experience. All right. I could be wrong. I think um we reached out to the agencies that are collecting the fee um and the billing companies that are billing uh which my understanding is the first responder fee goes down as a miscellaneous versus the transport goes down as transport.

Oh yeah. They're required to pay the transport values also one they value that as we play their system universally everyone we reached out to is basically said yeah we're down to pretty much Kaiser well I mean it comes out to about 5 to 8% here when it makes sense if it's miscellaneous I'm almost wondering if the conversation can be how it can be built as some sort like green hospital. I don't I don't think we have any

the if the majority of the council wants us to look at this further then we'll affirm that our fault will do it for us first because that's like if everyone agrees that would be the make or break you know decision and then beyond that if if they will then try to work with them to have the fee show up in a way that maximizes their chance of getting a return right and we can try to work with them on that but I want to you know hear the rest of their council and that would Medicare and Medicaid medical and that would be my agreement too which is the make or break is about being able to do this work for us

and then I also agree to the point that was made if the insurance isn't going to pay for this we're never going to pass this cost on down to the person in the community who's getting the services is going to be only strictly billable to insurance companies. Yeah. Yeah.

Okay. And then the short-term rental enforcement band. I think going after that, you know, at least for this big bulk the first time, excluding the one, you know, the the rooms or whatever is for me. Yes. You know, even if we're only able to get $300,000 the first time, that's fine. Maybe we do this on an annual basis. And I don't know if we need to really be going out there and using a lot of code enforcement. It's like, what if we bill them once? If we see it again three months later, we bill them again. And then can't we just attach this to like their property fees so that they have to pay? It's like, you know, hey, you're being fined and you're not paying your fines so we don't need to keep sending code enforcement out there. We're going to levy this onto your whatever bill you have to pay.

I think this we'd have to work with the city attorneys. That's I think it is because it's a property based fine. I think we do have that ability, but I don't know. City attorney also matching the fine for not complying with the short-term rental ban to their tax assessment. Is that possible? I'll have board to move on. Okay.

So, yeah. So, I just I really like this idea and I don't want us to spend too much staff time or code enforcement out there, but it's like, hey, if we do this sweep every 3 months and we see them out here, we have this company send out these, you know, things, these, you know, uh, these fines. If they don't pay the fine, then we just administratively, I mean, maybe I'm oversimplifying this. No, I mean I think that we would because I I mean again I if the we want to get 100% compliant a lot closer I that would take code of force and resources that I don't want to redirect but I think we're sending a letter what they said what what Granica has said their policy person but like a lot of people comply we're literally attaching and we're like we got you like it's right here you advertise to notice so that's why you get a 60 typically a 60% compliance and then we could maybe follow up with a second letter then we'll work with the city attorney's I want to see we could roll it into our other property based.

But I would agree and let's not let's not bank, well this is ongoing revenue. Let's maybe count this as a one or two timer and then start kind of and then see where we are. Exactly. Exactly. Okay. Thank you. Yeah. Because my my concern my concern with this is enforcement. And I mean I agree with you and we it goes back to the comment I made you know a week or so ago. I mean we're having a hard time right now enforcing other things. Yeah. And I just don't want to start piling on more things to enforce because we we're not going to get to them, you know. And so anyways, I think it's Yeah.

Uh I know today is just a pulse check, but I think as part of our financial policies, I think we need to have an economic impact analysis. If it's software, what is the implementation cost breakout? What is the estimated staff time hours? I just need a little bit more of u context and background before I say yes go. Um because I know we're I know I want to continue to be innovative, but I'm very cautious of starting any new programs even if they say they're going to be revenue generators because they cannot be. Um I'm also very cautious when I hear like just in general, no offense, but when software companies say they can make things easier, I'm just always cautious about that because of the cost of implementation. And then that's an annual cost now that we're we're adding to our budget. And I know it's going to be offset, but it could be diminishing returns if like you said with the enforcement. Um I think that's also another skill set that we're going to be having to train someone on. So what is the cost of training um as well on software? So, uh, I just I I was I would need more information on this one. And then for 217 rental units, how did we find that information out? Did Granus give that information to us? Just like it.

Yeah. And we looked at it before and that's the range of what we had tracked before. So, it's an average, right? Because sometimes there's fewer, sometimes there's more. But so, you just go on here, you be looking. I mean, that's what their software does. that that is essentially what they sell is the ability to like comb those websites, download the kind of ads that fall out outside of or inside Hayward and um and so that's that's what their software does is kind of gets you those listings. Okay. Yeah. So, and I want to ask about administrative burn of us doing that internally. Well, I asked about that. Okay.

I think you know talking to um Michael um Barnes um you know we think if we structure it this way without allocating enforcement resources you know we and we try and we do it for a year and we try the software we think it's probably pretty minimal administrative. Okay. Obviously, we do it and it ends up being a ton of work and other things and we come back to you after the pilot and be like, "Well, this is not worth it." But we think we can incorporate it into our current workload as long as we're using the software and as long as we're not adding enforce as long as we all go into it. No way we're not going to enforce beyond these letters. Right. Yeah.

Um and then for the um the ambulance as well, um same thing. I need more of a consistent lens of how we add new programs and then we can't we can weigh in a little bit more. Um I don't I don't want us to give the picture of now we're going to be taxing every time you need a response because that's what that's what it sounds like from the outside. We just want to make sure that we're we're also accounting for the photo safety sections of our budget is the most expensive and this is a way to bring the cost down. So, how we frame it is really important to me as well. Um, and I do want to list up all of the insurance companies that mix that you were talking about. I would like their names because right now we're here in Kaiser, but I don't I don't know all the other insurance companies that that are out there and who we should be approaching directly if if we were to know that we're not charging the fee. Like in Alamita we had this fee but we were a transport agency so we knew who how the parame

directly but we're also billing them for transport so we knew what our parix was there um and how it broke it like how many Medicaid versus private versus uninsured but I don't do you don't have a range because we're not billing no we've been trying to get it honestly the billing company their estimate conflicts with the what the ambulance provider provided okay so unfortunately my goal was to have like a solid number best we could get with a range and what I know some other agencies too is what consultants the billing companies have projected is not what those departments are seeing is a it's a it's definitely a gray area that we're trying to whip down and get an exact number.

Oh yeah. Okay. And then yes at three if we hear back from Paul that would be the key for me. Okay. Or we can send the bill on a red envelope with Michael's face on it. He's coming after you. Love a special assessment. Council member Roach.

Uh, thanks. Yeah, I mean, so for both items, I of these items, I feel like as long as it's not going to be a burden on staff so we'll do the the end because on the um on the short-term rental, is that is that a a fee we pay the grants to do the work or is there still going to be staff time that has to get to know the software and and do this? the fir we could the first mailing would be on them included in the 25,000 and then I don't know what the second mailing so these are things again we didn't want to spend a ton like if you all told us no like we didn't want to spend a ton more time exploring this so we wanted enough information and direction from you to so we can do that second round but the it the 25,000 we did confirm includes a first mailing so that wouldn't take it would just be here's the fee you're going to do the first round

and then we could kind of see how much money we get we could also I can talk with Michael about what would it take we did one more mailing and then the time it would take to put them on our lean. Um, okay. So, that would those those are not included in the 25,000. So, we'd have to assess that. Okay. I mean, I don't mind the one time I mean for me, not even a year, but like a one time to give them the 25,000 and see what comes back in the revenue to see what that looks like because, you know, we have a ban the idea of us enforcing our laws is not a bad thing, right? I guess sort of like the idea of exploring how to enforce, you know, things that we already have in our books. But that one just it's 25,000 for the software and then we get the software. They'll pay the first milling.

Then every other milling we have to do and then we just pay 25,000 for the software over and over. Yeah. And I said they were fine with us just buying it for one year because I asked that I was like we just do this for a year license. Okay. Yeah. Because I mean my big concern about any pilot project right now is it just eventually balloons and becomes part of our general fund fund burden. And so I am really concerned about that. Right. So if we can sort of keep this strict sort of one milling first and then anal an analyze before we head into another year of it before we even put staff time on I like so I'm sorry to get to know the software and learn it and all that um because you know it is it may not be that much but but I do I like the idea of enforcement law in this way so um and then is 60% really likely without any amount of enforcement are they that's just what they're saying that's their sales pitch

was their policy guy I mean it wasn't their sales guy I mean he seemed I mean you know it was one conversation So I'm not trying but you have a you get a sense like what someone's kind of I mean that was kind of on average what he's seeing in terms of clients and we I didn't drill in but we can drill down more is does that was that just one mailing was that two mailings was that you know and so but he said on average they're seeing a 60% compliance because most people he said are paying because you're attaching yeah the ad they're like caught you right like here it is. So most people are like, "Yeah, write the check." Yeah. I mean, so right, if we could even get like 300,000, right, out of a $25,000 investment, I'm okay to just one pilot, right?

Yeah. Really strict to that one pilot. I just don't want anything sort of folding back into the general fund. And then on the um EMS responder fee, um yeah, I mean that gets lower, right, what the return is on that. But um if Faulk is doing it, then I don't have a huge issue with it. But yeah, I mean, you're right. I think people feel like, you know, well, I pay my property tax and all these other taxes to get these services and now you're sort of actually going to blow my insurance and then what does that do to the insurance in that community that what does it do for their insurance raised? Do we have any idea? Because it seems like a lot of insurance like property insurance every they're getting smart about what they're excluding from their policies and I assume eventually they would just start excluding from policies, right? Is that what we're hearing? That besides Kaiser, other companies have excluded this fee.

Well, it sounds like it's like a miscellaneous fee. They're just like, "Hey, that is a We don't pay those. They just don't. Yeah. And San Jose, for instance, is the one the most recently. Then they're just not enforcing that. So then it doesn't revert back to the person to pay out of pocket, right? They just go, "Okay, we wouldn't do that." Okay. I mean, yeah, it seems like there's a little more information that's needed there. Feel a little lukewarm about it. But um yeah, I mean, I don't I don't know. I don't know what to say about that because you seem lukewarm about it. I know. And if you want me, I can make it to I just love it. I know this is something that came up, but I just want to get some additional thoughts from you. Well, with the ERG session, I'm curious. I probably wouldn't go forward with that one. Yeah,

I feel like I feel like we should be aiming for like slant dubs. You know, the thing is like if we know it's there and high yield, let's do it. Yeah. Like maybe maybe take on one exploratory like the B like a law we already have in our books that says, you know, ban on these things. Let's try that. And then maybe since this is because I mean I do worry about the staff time, right? I mean, this is going to take the department, you know, a bunch of a concerted effort to get this going by July 1. And so will take admin fire administration will have to and city attorney's office it will take some time.

Yeah. Then in that case I don't think I mentioned to move forward in that one. Let's move forward on that rental ban again. Um but there you have other goals right like in the EMS respond is just like a money right we're not whereas in the short-term rental ban you are potentially enforcing your own ordinances. So you at least have another public benefit and goal which is to have people comply with ordinances. Maybe you push them into hotels. Maybe you push them into longer term like maybe the people are single family homes. Maybe now they decide to rent beyond 30 days in which views now someone has a long-term home, right? So I think there are other public benefits.

Yeah. It feels more justifiable somehow. But the other one Yeah. So I guess yeah, I mean given you know that you have so many other things to be doing, I'm not sure this is worth the time. Well, I know I brought this one up too. So basically I mean I I appreciate the research that's went into it. So, I mean, if if we need to park this and wait a couple years to see how it rolls out, I am totally fine with that. And I just want to say thank you guys so much for doing this research, but I am perfectly fine going with your recommendation and letting this one go for a minute. Councilman,

thank you, Mayor. And thank you. In my mind, we all need to contribute. So, I think go for it as much as you can. This is hanging fruit. Let's pick it. We have a need for it. So uh uh the need for personnel hopefully that can be done uh later on when we start looking or start having some money and we need to start looking to what kind of folks we need to hire. We can look to hiring two or three new code enforcers because I keep hearing code enforcers are needed and then of course and next to that officers. So, um, and then I did see that grants would be on time. So, I suggest that grant hunting should be ongoing

every day, every month, every hour. Um, those are my comments. Go for it. Council member Goldstein.

So, please um, with the EMS, I do agree with that. I we should go forward with that. If you start to run into it and decide that it's too much of a burden, I'm okay dropping it. Um, but if it looks like it's low hanging fruit, I think we ought to pursue it. Uh, again, only if it's charged to the insurance and then also taking advant advantage of fault. Um, uh, couple of questions though. By, by the way, I want to backtrack a little bit on when when I said um I got a bill. Um it was it was in California. It's for my daughter. It was in South Lake Tahoe and it was initially rejected by Anthem Blue Cross because it didn't have the right uh coding, right? Building coding. Uh,

and so when I tried to ask what that coding needs to be with the insurance company, they wouldn't give me any answers. And so I just called back the bill and I said, "If you want to get paid on this, you need to call their billing support line and work it out." So that's how you're going to get paid and that's the end of it. And I didn't hear anything back from them. So it may be they couldn't figure it out and they just dropped it. That may be what happened. So I think it might be important to figure out what coding is required for insurance and maybe as uh council member Bonia said maybe we need to talk to our state legislators and ask them to u make that uh happen. Uh but another question is what if EMS responds but they don't actually provide a service. So was it the intent to bill just because the chart rolled? All right. So again, Cody, I think it's going to be what what has to happen there on the short-term rentals. Uh I agree only send letters. Again, if it's low hanging fruit, if you start to get into it now and it looks like it's way too complicated, uh I I'd say we just abandon it. Don't want this to turn into a multi-year unfunded project because we thought it was a good idea. So pilot it. Let us know how it's working. I do have a couple of concerns. So, one of them is I I think people are looking for ways to attract tenants and advertising on Airbnb, even though the intent may be to expand that into a long-term rental, whether it's a room or a single family residence. So, I think we need to have some way to adjust for that.

They did um address that in our call. They what they've done is told people in other communities that if you're over 30 days, you're fine. They said to people as long as those Airbnbs are 31 days or more. Oh, okay. That's true in our ordinance as well. Yeah. So, they're within the ordinance. So, instead of just going out to get somebody for two nights or whatever, you can still book an Airbnb. Uh you just need to be over 30 days.

I see. Okay. All right. I got you. Okay. Good. And then uh I I do I do agree if we can find a way to attach it to property tax that might increase our revenue collection. So anything we can do on on those lines? I understand if we try to apply the lean that's going to be more costly and more burdensome I think. So if we can do it as a property tax u then then I think that would be probably better. Yeah. We'll look into what we're already doing and then we if we can fold it into our other process for other leans and things that it might not be but we'd have to look at that. We haven't let back to get back to us on that. Okay, good. Thank you.

Okay. Oh, yeah. As with other fines and penalties uh for which there's a due process including an opportunity for council hearing confirmation of the fine and penalty. it can be attached to the property tax. So there is a methodology uh to to make that happen. Um yes, just did some quick analysis. So the answer is yes. Excellent. Thank you.

Mayor, just to summarize, I think I know not it wasn't unanimous, but what I'm hearing is the majority of the council would like to put the EMS responder fee on hold for now. Start with a short-term rental ban. What is also easier about that is we literally just have to buy the subscription. I don't have to come to council. It's within my authority. I try it, pilot it for one time, see how much money we get, see what kind of burden there is on staff. Um, and so we move forward with that one. We would not for now, we can always revisit the EMS responder fee. Um and then um we will not and just to be clear on the short-term moment we will not be using code enforcement resources for this but just kind of administrative process to the extent we have the capacity to do that back

red envelopes and I guess any part that may have to council we want to strengthen the the compliance we may also bring forward council approval to attach them to a tax assessment. Is that correct? Yeah. And I think we every year and I can look at Sarah. I think every year we do we have a lean process for code forcement fees and things like that. So the extent we can I'm sorry you too. No no you know better. Yeah there's so there's lean the lean process which actually puts it on the title and then there's special assessment process which happens for things like sewer bills. Okay. Um and does that have to come before the council? It does. It does.

It does normally. We always every year we come we bring you a list of all of the unpaid fines and um unpaid fees and get council's buying and authorization for us to turn them into special assessments to counties. I just want to clarify that because I'm not just looking for the funds. I'm also looking for the compliance here too. And I I didn't want to just say on the record like we're just going to send out letters and then people that are Airbnb like they're just going to send out letters and they ignore it. Like I mean to the extent we can just wrap it into our current process and it's not a big deal to add this program then I think we'll plan on doing that. If it gets on more time that I'm not anticipating, then we'll let you know. Okay, perfect. Okay. Um,

um, for the Mel's tax is, have we talked to fire just to conf I mean just to share our thinking with them because I know that they had a lot of passion around this because I know you justified it so well, but just to bring the two if they're not already listening, I'm not sure, but if they are, I will have a conversation about it. Thank you so much. Okay. Uh, you were Oh, I'm sorry. No, no. I was I'm glad you're moving on because Okay. Uh so uh just do a time check. It's 1:10. Um and we have like

30 section sections each about 30 minutes. So, let's, you know, um, you know, just let's keep powering powering through this and and and just, you know, I'm just going to say it again just to say it more concise and, you know, and and just a little bit, you know, I mean, I understand we're having a conversation and we're sort of taking temperature, but, you know, let's just be a little bit more precise and and concise and and and intentional. If you want, maybe we combine the next two into one and maybe we roll into the recommended approach along with cost savings and then we and then we kind of stop open it up and then we'll decide if we don't have time we'll bring back the policies as a separate agenda item. Is that okay?

Let's let's let's just see how far we get. But yeah, just and we used to go till 5. So this is me. Okay. See you Jen. Who's supposed to go?

Okay. So these are things that we have all the things you've given us direction on that we've went and spent a lot of time working on to try to access county funds look at economies of scale and so without reducing our anticipated outcomes on the NAB center we were able through a reduction with our contract with backs because we have economy scales with re regis village now moving those spent there and then some county grant funding and some offsets um we think we can actually reduce our overall $2.1 million T price tag to the general fund down. We can reduce it by $1.6 million which gets it down to about what is one 1.4 or about.5 or about 500,000 that we'd still be covering through the general fund that we're we're recommending that you continue to fund to get the full amount but that you do reduce. So these reductions are kind of easy in my mind easy reduction without any impacts to outcomes. Um then the other is that we really we do have functions in the fire department. Oh, I'm sorry.

Sorry. Go ahead.

Yeah, I was going too fast. Um that are development related. So, our fire prevention program and we're we're not set up right now to know how whether or not those are being fully cost recovered. And so, the chief is is one of fun fun new exercise as the new chief is trying to make sure we're tracking the revenues that we're getting, that their salaries are being build out, that we're as close to 100% cost recovery on those fire prevention functions as possible. There could be things legally that we literally can't bill, in which case that might not be 100%, but we're trying to get as close to 100% cost recovery as possible. So, that's ongoing. Um, and we're definitely doing that. And then police department savings. We are talking with the police department about um potential a number of different options. And this is one that we're not quite sure. We think we can achieve a $ 1.7 million savings either through some pausing of hiring or potentially downsizing the jail operations. We're not suggesting eliminating in this item. We're not well, you'll see like under, you know, we're not recommending eliminating it, but potentially looking at some sort of restructuring of it during hours where we don't see a lot of activity. Um, so that's still a little bit up in the air, but we do think between we're looking at one of these options, um, and the police departments sharpening their pencils and trying to figure out what their recommendation is. But either way, trying to save about $1.7 million that are likely um, as we move into next year's budget. Next slide. Um and then this is very long but what this basically means is that we were assuming this 80% confidence level of workers comp by just taking the actuarial that was given to us applying the 80% transferring now about 9.75 million instead of what we did this year which is about 6.1 and we're suggesting just keep it at the 6.1 level and save about 3.7 going in next fiscal year budget. There is over $20 million in the fund. So we do have a fund balance in this particular fund. Does it increase risk? Sure. I mean, there could be risk

that if there's some really big workers compa, you know, claim or other thing that but we think that risk is relatively low compared to the the benefit of um reducing that obligation by 3.7 million um into next year essentially m again maintaining how much we're putting into it this so it's not like we're de we're not we're still putting $6.1 million into it. So we're still adding to it covering our workers comp liabilities just not to that 80% confidence level. Um and then we were able to find some um CIP transfer that 850,000 that we think we'll be able to postpone um for next fiscal year. Next slide. So these are all uncertain in progress because mainly these are all subject to our labor partnership. Um some of them are essentially continuing the minimum staffing and the fire. we have six months of that already and we would extend that full through the end of the fiscal year would require um a change to the current side letter with local 1909 and then the shift schedule change with POA be an additional million dollar. So that would save us between those two you know we're you'll see these will be in my recommended approach that there's about three additional $3 million from next fiscal year that we could save by continuing those through the end of the fiscal year and then concession bargaining with labor partners. We'll get to this end. these or other ideas are uncertain where potent other concessions that we potentially negotiate with labor partners all because all of our labor partners are in closed contracts right now. So I just want to make sure everyone knows that for the public. So you know if they're open contracts and you're negotiating but when they're closed contract you have a contract that says something and so in order to change those both parties have to agree to change them. So it's just a diff makes it a little more challenging. Next slide. And then the other thing we always have is the ability to look again and look at potentially reducing our expenses by 1 to 2%. I can say like we already talked about we you know any sort of kind of fat so to speak has been trimmed already. So this would these would be

almost certainly uh reductions in workforce uh or the majority of them we might be able to save on some supplies and services but but not to get to two and a half to five million. So this would would require additional layoffs. Uh we're hoping to try to to avoid that and we'll talk a little more about that. Next slide center. Oh yeah, sure.

Yeah. So this so as Jen said um through before um Amy Col left us left us for the county was able to negotiate some great terms with back. So we are getting that $1.6 million reduction. We also have some grants. So remaining is about $650,000 that goes from the general fund to the NAV center. Um we are recommending keeping that in place. uh if if we were to shut that nav center down entirely, that's about 25 to 30 additional unhoused um individuals on the street each day and um we have a lot of we have really good um outcomes from the nav center about 80 83% of exits go to permanent housing. So I won't speak more to that but we are recommending not cutting this and then on the next slide here um I know there's been some back and forth about the heart program. So the we already did as you guys remember reduced a portion of the heart program that was the Mihoo program and the fire that the fire department was on at that time there was a large analysis and really found that link which is a newer it's a new program in the last four years was was one of the most effective parts of the program um and that is basically um for clinician civilian physicians that are on call. So when for example you call us or a community member calls us and says that there's an encampment that's who we call to go out there and do those reference points. It's also a way and then they help us get coordinate entry into the county system. So it has staff on site from the city um that allow us to respond. So we do not recommend eliminating this at this time. It's about $700,000.

But this is one that we are actively looking for grants that came up. We're actively looking and there's a lot of potential grants and Emily Young who oversees this is she's very good at looking for grants. So, we're hopeful that we might even be able to offset this going forward. Great. Next slide. Oh. Oh, Nathaniel, come on up. Sorry. Should have given me warning.

He's got a tie on. So, yes, it's okay. He's ready today. Thank you, Mayor Council, for the opportunity to come talk a little bit about efficiencies through technology. I'm really happy to hear of all the technology solutions that have been proposed today. This is really an opportunity to kind of dig in to look at some of the research that we're already doing, some of the things we've already built. So, some of the things I'm going to share are going to sound a little bit sci-fi, but just we have to acknowledge reality that we're quickly approaching a world where sci-fi is our reality. So that being said, uh some things we're looking at when it comes to efficiencies is document review and creation using AI tools. One of the more exciting ones in my opinion is plan review and pre-checks. So rather than submitting a plan and permit and having to back and forth with the human, uh this would actually take place with a computer um where you submit the plan and permit, you get some feedback and it goes back and forth a number of times until you get an 80 to 90% confidence level, then it actually hits a person uh to deal with the public. So I think that's a really neat technology. Of course, staff report generation. Imagine a world where 90% of our staff reports are created for us using document creation rather than having to go into research. There are some companies that are doing that now, which I think is a really neat application of that technology. Finally, automated note-taking and meeting minute creation. Again, just taking rather than having a human do it, spend time doing it, freeing those folks up to do higher level work, whether it's analysis, research, etc. This can all be done for you through technology. Next slide, please. Again, this is kind of putting that sci-fi hat on a little bit. Uh, but imagine a world where the drone is a first responder for public safety. Rather than send resources, which puts public safety at risk and arrival uh to a scene, you actually have a drone on site doing that for you. Uh, in some cases, it can actually get there faster. And the faster you can see what's going on, the better you can assess the situation. Again, you've probably seen this in TV, may see it in movies. Just know this is fast becoming a reality for public.

City of Fremont does it now.

City of Fremont, San Francisco just went live. Um, if you want to see a real world very specific example, they have some examples on their social media platforms that they're sharing. Next slide, please. So, what I want to highlight here is a permit center virtual dashboard for virtual queue. This is something we actually built inhouse. Uh and the best way to describe it is it was built in partnership with DSD to streamline the customer experience through a selfcheck-in solution. We use existing in-house tools uh creating a cost-effective system that provides real-time visibility into visitor activity. What the dashboard's done so far, it's helped with coordination uh reduce manual tracking and centralizing information to enhance the customer service experience. So for those of you that haven't had a chance to go down to the permit center, it's live. It's a pilot project. Go and check it out. what you're what they're presented with when you first walk in are these options here. Uh and it's a very efficient way to get information to those folks uh right there as soon as you arrive. So again, just highlighting some things, low code, very little time to build uh and focus on customer service. Next slide, please. I'm really happy to announce the next kind of the next iteration of it. When you think of it, we want to also focus on core operations, but we also want to be that strategic partner. So in March, uh in response to what we built with DSD uh as well as opportunities we have with other departments, we're launching the innovation assistance program. Uh with this program, again, we have in-house well consultants, solution experts using internal cases that we already talked about um to really to really enhance what we're already doing with some of the departments. So again, this this program is something that we're excited to launch. It's in-house. It's ready to go and I can't wait to bring it share it again the future.

Just to go a little more, I mean, is this encourages people in other departments if they have an idea or something to reach out, explore, and have kind of a conversation with our IT department to see if there's a way to take an idea they have about being more efficient and then help them turn it into reality. So it's almost like a in-house consulting services for other departments to be able to explore innovative new ideas. So super cool.

So these are these are for me just quickly other things that we would need direction on that we've talked about and I've heard different conversations about one is already mentioned the cost neutral departmental restructuring. So just acknowledge that we will be wanting to try to be more strategic. what we did in the fall and I don't mean this in a negative way which wasn't as very strategic. It was vacancy management whole positions crisis mode and we kind of out of the immediate crisis mode. We're still kind of in a crisis but to just be more thoughtful now about what are hey department heads what what structure do you need now that we have less resources to manage those resources more effectively. So, I just want to make acknowledge that you're going to see maybe either some new positions, but other positions may be being changed and we're we don't know what those are yet. We're working with them on that, but we're but they'll have to be cost neutral so that we're not adding expense. And then it just something that you know for you to think about. I mean, in terms of um right now our agendas are not very full because we're not and because of the budget situation, but also when a lot of cities around us do two meetings per month where they want you want to do that. I don't feel strongly. I will say that every time there's an agenda packet that goes out the city and clerk's office, all of us are focused on that and it does detract from other our finance department director has to read all those and having fewer of deadlines per month will have some a marginal it's not huge but a marginal impact. Um so maybe going to two per month and then also just putting out there we've talked about maybe reducing the number maybe council sustainability committee um maybe eliminating that one maybe going to quarterly for CDC maybe quarterly for public safety or some other ideas but just wanted to put that out there to try to be a little more efficient with our resources since we're we did reduce our workforce by about 15%. So um I think that's

did have a question here but do we want to you want us to keep going on recommend or do you want to comment on these let's um since it's these two things and then they're directly impacting us let's just comment on these kind of quick okay so uh actually council member one side

so I am fine with um the first one you know the cost neutral leaning budget I I love that idea second one you know going to two meetings. I'm fine with that. You know, knowing that if there's something that's hot, we can call an emergency third meeting, right? So, I'm fine with that. Um to see how that goes. And then just to kind of leave the scheduling flexibility for that third meeting to pop back on if we need to. And then as far as creating more efficiencies around those committees, I'll speak for the two that I'm on, which is economic development and public safety. And I am comfortable with those going quarterly. Thank you, Mayor. for interest.

I I'll stay on this SP for now. I am interested in the reduction of the council meetings being consistent with um two meetings per month. And if we need closed sessions to be that third meeting or we don't want to drop all the way down to two, that is also something I'm interested in because if we do have closed session, that still gives the opportunity for public comment. Uh but uh I am more interested in potentially merging economic development committee with another committee or uh drop down on the economic development committee. I think we've been getting a lot of report out only items versus actual giving direction for specific projects which I think is more important than hearing a lot about the great work that economic devel but I think we had those opportunities at the full council um sustainability committee I don't sit on that committee anymore but I felt like when I was on that committee a lot of that information did go to infrastructure as well

or directly to the council or directly to the full council. Um I I didn't see a lot of uh report outs where we had to get um staff direction in terms of public potential policies. Um but I'm not on that committee anymore. Public safety was part of infrastructure. So I did have some heartburn about when that was removed. But um I'm just wondering if that is also something that we can look at in terms of report out to the full council. Uh, but if we want to keep that as a separate space, I'm fine with that. But I would like that to be dropped down because a lot of the public safety information does come to full counsel anyway. When you say dropped down, even down to quarterly. Quarterly. Yes. Okay. Uh, council member Z.

Thanks. Um, I agree with Council Member Andrews on the reduction of meetings. I live with two a month. I mean, if the last two meetings show us how short they can be, what is it worth getting all staff to come out for a 30-minute meeting, getting all the visuals set up? You get it? So I also agree with what council member Andrew said though if we need to meet we need to meet and so I'm okay you know I just kind of want to set an expectation if there is business for us to conduct the city I don't want us to be so afraid of having three meetings a month uh especially as we move into difficult conversations negotiations we may have to have a lot of post sessions just to stay up to date uh so I would like to I would like necessity to drive the frequency of our meetings but right now it feels like two as a baseline is reasonable. Um I'm not on these committees in particular, but just as a member of uh infrastructure, um a lot of what we talked about around things like AC transit or bicycling I think does touch on sustainability. So I wouldn't mind either taking on some of that work if folks on that committee are open to that or just coming before the full council if they feel like it's better suited there. Um and uh you know based I'll defer my colleagues on this committee specifically as to what direction they think that you should take. But I just want to say as someone that's on infrastructure, I see a lot of overlap between sustainability and infrastructure. So I'm not opposed to including that there as well. And then can you just go one slide back? I just wanted there's one thought I had. Um okay was it? Yeah below one second. Um

going back one more towards innovation since I think you wanted

oh yes I remember. Uh so I think the separate from the internal tools that we use is the website primarily under the CIO's perview is is or is the website managed primarily? Yeah. Okay. Got it. Just curious about the relationship between what are the service requests we get by a frequency and then thinking like okay we're getting a lot of questions around this maybe we prioritize updating that web page to better help residents self-service so we reduce the impact on staff time so trying to make datadriven decisions around improve our website to mitigate staff response I think could yield some savings and efficiencies there and I would trust you all to to coordinate on that that's the last thing I wanted to mention thanks

yeah thank you So, thank you for stepping up into this role and looking at innovation as a way to impact the quality of life for our residents and for staff like the initiatives that you brought forward and and I hope you'll continue down that path as well as continuing to encourage staff to bring their ideas forward. So, I like the initiative she brought forward on terms of the uh reduction of meetings and so forth. I concur with my colleagues. I think we're okay with that and if we have a need to meet, we'll pull it together. Thank you. Okay, council member Ro.

Thanks. Just going back a little bit earlier and some of the lengthy costs saving measures um specifically around the jail. Um I mean I understand the argument for not getting rid of the jail, but I think you know finding a way to downsize said reduce cost there, you know, might be one way to to cost there. Um, and then let's see. And I'm really glad about the navigation center cost that we were able to keep that and yeah, could significantly reduce the cost. That's awesome. Um,

and then on the um on the technology stuff, like it's awesome and sad, right? You know, because it means, right, like it does it always worries me that, you know, if if the AI plan checker can do sort of 80% of the work until it gets to um, you know, a person, then you would presume the person has to be somebody that's maybe a little bit more knowledgeable. Most of them do get plan checkers don't necessarily get that early sort of experience. And I do worry about that. How do you get to be a master plan checker if you don't get the early pledge, but that's that is a societal issue, right? That's a complete societal. And so what what we have to do to keep a service level with the reduction in workforce, which is what we're looking at, we obviously have to look at technology. And so I appreciate that you're doing that. Sort of just recognizing what the what this market is for all of us, right? To do that is um is nerve-wracking. Um and I'm so glad to hear about linking in there. I know we're all trying to balance like where we're spending our money, but knowing that I think the cost recovery from the link work is probably um it totally pays for itself, right? And and what we're not doing by sending out um you know like sworn right sworn officer um and then potentially out. So really glad about that. And then um on the last questions, I um yeah, I'm I'm fine with going two per month, but I think too I think it was Angela and George and I both said it that I think we should keep the third date as a close session meeting and then if we don't need it, we can cancel it. But um but it's not I think once we all get that off our calendar, you know, we're only done two. It's going to be hard to sort of like get back to everybody for that third meeting. So I think it might be a good idea. I mean, maybe you guys will disagree, but keep a third one on the books for a potential um close session because that wouldn't be staff time, right? If it was a class I know you guys don't agree, but um

Okay. All right. Well, that is my just try to avoid that one, but we'll Yeah, I think there's a difference between keeping it on the official city calendar, in which case we have to do we have to declare a cancellation versus keeping it on your calendar as a whole, which we absolutely, you know, can't do. No need I do. I know this is a concern, but I am like short's point like if we have lab negotiations, if something big comes up like that, we have a consistent Tuesday in case that happens. But disagree with me. I'm fine, my colleagues.

My my my only concern is I don't want to go back to if we had less meetings. All that means is when I have longer meetings and I don't want to be, you know, I don't want to be here until midnight, you know, and have, you know, agendas that are, you know, packed even if it's, you know, so you got to keep three meetings. I thought you

I mean I mean you know three meetings you know I I I understand it takes prep and you know and and it's like it's a it's an orchestra when when we have a meeting. I get that. I get all that. I mean I don't know you know I'm sure there's a cost analysis to it and I'm sure you know there'll be some money saved. Um my concern is particularly when we get to you know my experience over the years uh April, May, June those meetings are packed you know and we're here late and so mainly May and June you know and um so anyway I just um you know I I can you know I can go either way. I don't mind going to two meetings. Um, you know, I just my only caution is I don't want to be here till, you know, one o'clock in the morning, you know. Um,

let me finish my Yeah. No, no, I mean, you can go. Um,

yeah. So, I I'm I'm open to that. I mean, you know, maybe maybe staff can sort of do some projections that, okay, guys, in April, May, and June, we're going to have we really need that third meeting, so count on that, but for these two months, maybe it's only two. So, maybe it can be more of a sort of some compromise along the way. Now, I'm I'm fine. Whatever. um that one. Um and then on the council direction for committees, you know, I would be sad to see the sustainable committee go, but if it was it was brought into infrastructure, we already have a sustainability lens for our entire right for everything that happens in the city. So I feel like the work that started on sustainability committee in a way has kind of enveloped the whole you know every every department of city when we're talking about building things and um and creating policy. So to me that that committee has totally become a reporting committee. we just get reports right on everything like when we rarely are asked to make actual policy guidance on that one and um and so I I wouldn't mind seeing that. I mean I don't know what infrastructure committee feels like about that part but if it was like maybe twice a year the sustainable um the sustainability items come before infrastructure um I would you know I would sacrifice that even though I love that committee you might have a different opinion

or if it was a really big sustainability item like you get to bring it to come bring it to the council like a big report or something on you know we bring it to the council. Yeah, because I know it's a lot of work for them to bring in, you know, guests on that one. I mean, it is and, you know, I would feel bad some of the I think our agencies that do this work in the community, it is their opportunity to come and present before us, but maybe they come to a council meeting and present. Um, on the public safety one, what we're already every other month is that what I understand. So, I I wouldn't mind quarterly. I I think we need to keep that one. We just created that. I know there are some community members that really rely on being able to see data in that one specific setting. So, I think quarterly on that one. And the economic develop committee, I totally defer to the people that are on that. Uh, council member Julio,

that was me. Yeah, thank you. Uh, let's see. Um, you probably are aware that whenever an officer needs to take somebody's center, they depend up 4 hours. So, we just fire uh we police officer about four hours, two or three criminals and we lose power police for these officers. So I'm very lary of any talks of decreasing jails or anything. So that that said, thank you for the good report, the good work on the it. That's fantastic. Um uh my wife and the Smeno family know that Tuesdays I do not belong to them. I belong to the city of Hayward.

Yeah. So I'm open to whatever happens. Uh I even have met LAS in Europe. Uh so anyway, so if we need to go to no problem three or four or five, no problem. Okay, my two are yours. Uh let's see. Uh uh quarterly uh sustainability committee meets quarterly. So we are already at quarterly. The minute that you reduce it or you get rid of it, we become less green and we already have a good healthy climate action plan. I don't want us to loosen the greenness of the city of Hayward. Um the other uh major concern of our residents was police safety or crime. So if we reduce uh public safety committee were not answering their needs and also our economy needs to grow because uh our mayor mentioned a little while ago Hayward first okay economic development needs to be completely stable and healthy. So I would leave them as squarely. I would not reduce or kill any one of them. I am sure that uh the green team of the city of H will agree with that.

Okay. My last point just on the council meetings, you know, I guess I would I don't want us to come all the way over here for like a 1-hour meeting. I think that that's inefficient, right? Um it takes a lot for us to get here. It takes a lot for us to prepare if and I think it's a lot for staff if it means that we need to stay an hour longer and you know and prevent a whole another meeting and you know talking about being green all the carbon emissions we're using to drive here and all this other stuff. You know I think we should find a way to be more disciplined and I think it's going to require us to be more disciplined if we go down to two times a month. And it's not saying that we're not going to do the work of the city because to council member Rosh's point, at any point we can always call another another meeting, right? Um but I don't think that we should do that as a way of practice. I think we should be self-disciplined to try to get this done in two meetings. And then I also think, you know, around the close session, if we're going to do a third meeting that's a close session, then I would argue let's not have close session the other meetings. and let's get here at 7 on every night and then let's have one night of full 3 hours or four hours of close session. But I just want us to think about sort of the impact that it takes to and I know we're all committed to this. So it's not a commitment issue. It's an efficiency issue. If we're all trying to make the biggest impact, how do we do so in the most efficient way possible? And I think these recommendations are helping us drive towards more discipline and efficiency. to try to summarize, mayor, or did you

just just real quick on um you know, the council meetings? Um did I say more meetings? What I meant to say is two of them.

And um you know, the the committees, I'm good. You know, I think as I looked at this um I started thinking about why these committees uh uh came into existence and you know, public safety committee um you know it came into existence after a very specific you know episode that happened in the US. Um and you know the sustainability committee that came in existence um from a mayor who was here and it was you know the green sort of focus and then you had a few council members with that focus. Um so you know I think uh you know less frequency quarterly is fine. I'm I'm okay with that and um so yeah.

Okay. So I think what I'm hearing is go to two per month. Why don't we let's do that and then let me let me play with agendas a little on the close. Let's try to keep it to the two and then let's just see how it goes. I agree there's a lot going on in the next months. So, we may need to use that third close session. Let's try to keep it to the two and then let we can reevaluate whether or not we need to use that third one for close session. So, I'll try to manage the agendas. It's hard when there's a lot going on. I mean, for instance, we know in May we have budget work like where the real budget budget, right? Um so, we may need to use that in May. we may need to use that third meeting to just do the budget, right? So, it kind of anticipates. So, we'll look at things over the next couple months. Let's see how it goes. Um, so we'll bring that back if you're okay right away then. And

so, it starts with March. Well, I don't we'll have next week start does it start Tuesday? She would say, but I do want to like for instance, you know, Miriam lost a position in the layoffs and her department's like four people, right? So for her I mean just as an example of a small department office have one last meeting to have to produce um and the AI for the minutes for her to be able to do things like that. I mean it it is that's just an example how we can a smaller department can be more efficient and we can help her kind of manage her workload. I'm not she didn't ask me to say that. I'm just

Yeah. And and I you know and I just want to say I think uh I forget who said it but um I just want to repeat the the it takes a lot to get a meeting off the ground you know behind the scenes and I mean just the you know even if the agenda is 50 pages you know that's the the amount of technology and people and everything. So you know um for people watching us at home talking about you know reducing to two meetings um you know like what was said you know it's efficiency it's managing our time better and um you know and being leaner um but so

can I just add that to you it's for some of the college it's not about the council doing less work or us not being as transparent it's really about getting more work done and being fiscally responsible with public tax dollars and the resources available to Yeah,

correct. And we would do first and third. March is going to be different because we canceled that March 3rd, but starting in April, it' be 1 and 3. Um, and we'll bring that in March to for you to take a vote on. We'll see how it goes and you can, you know, if it's not working and you want to change it in July one, we could do something different. And then what I'm hearing is going out to quarterly for public safety and CDC. When the if the development market starts to come back, I talked to to our economic development officer. We can always add one if there's a lot of development going on because we just don't have a lot of development right now, but we can always add. We've got a really important development project. We need your review. Um, and then I was a little mixed, but it sounds like we're eliminating or consolidating sustainability with infrastructure or if there's really big

I think we better mix. I think it was we're okay without consolidating with infrastructure committee or keeping it going. Go ahead. We are quarterly. Why do we have quarterly? We are quarterly already. Sustainability is quarterly. Or we can have all sustainability on the council question. Why do we have all sustainability just go to the full council? Or what if we do two two a year? Two a year. I'll Is it worth bringing staff out for a few updates? We meet here. We don't meet J. Let's do about Wait, wait. What's the vote? That's okay. We doing Currently, we're doing only three meetings. Three meetings per year. Yeah. Someone consolidated infrastructure or just have everything go to council. I'm not gonna die on this hill.

Okay. So here I'm not even on the ask Alex about this. Alex, can you sort of at least you know it has become a big reporting committee in my opinion, but you know I know there are also a lot of community partners that come into those committees. So can you sort of at least give us some information about how important that is with community partners being part of that committee

and what what would we lose if we like rubbed in infrastructure or went two to year two So it is true that uh we have some people that come to CSC and make comments. It is also true that most of those items are informationational now and the committee has commented that how can we get you know a lot of information on that and not action we can consolidate that and bring it as part of CA infrastructure but some of those items that don't get a chance to have a public meeting beforehand will have to have a public hearing before council not too any of them but some of them.

So, so my proposal would be just so we do a quick straw pull and move forward is that sustainability items get brought before the full council. That way everyone has a chance to hear them and if there's a vote that needs to be taken, we can take it. I I know you may be opposed to this. That would be my proposal to move on. George, we need to be greener. I I agree. Which is why I think the whole the full council

and what's more green what's more green than saving time and energy, right? Because we want to take out strong. Sorry, I just want to ask my question. So when we started this sustainability committee a long time ago, did we have the sustainability lens for the whole like strategic plan? Was that part of it or did that work come out of that? And has the sustainability committee become a little bit less um instructive to the rest of what's happening in in

So it has evolved. When we started that I would say about 30 years ago, it was a commission and it had some public members on it and three council members on it and then later evolved into a council subcommittee and no public members. Um at that time as it was mentioned we have a mail that had a green lens and since then we've been incorporating all of the initiatives. One of the big deals at that time was inclusion of recycling and composting and all of that in garbage and that is uh you know uh how that was done under the opaces of the sustainability committee

because I think that's what I'm concerned about that sustainability is a core value of the city now and I feel like that work is happening in every department and so I am concerned you know that that but I am it is I like you and I I am concerned that that's But because it's a core value of the city now, the work is happening all over the place and I'm not sure that this the I'm not sure that good work is coming out of the committee to guide us anymore. And so I wonder if it should become maybe we just have it come to quarterly or every twice a year to three a year council. I I'm I'm in yeah like bring it to the full council. Bring the because you know like Southwest likes to come and you know they like to come

which is what should what should people do? Okay. All right. All right. We got a Let's draw a whole um Sure. So, uh my proposal is sustainability items will come to the full council three times a year at most minimum two times a year. And this is because you don't want to you want to do away with the committee itself to save staff time. Correct. Because everything we Oh, not can we just say pause the committee. Okay. Sure. Pause. And then we're not going to get rid of it. It's makes a difference to me. That's the proposal is to pause the committee and maybe have two to three reports on sustainability. No. Okay. I'm gonna I'm gonna say yes on this one so other people think. Yes. Yes. I don't know. I'm so torn. Um

we got three swing votes because how many I mean Alex's team has to prepare for how many committees, right? Infrastructure like how many committees are you preparing for? So right now we'll do two of them. Okay. Alex, do you have a recommendation? Not to hush it off on you, but do you have what do you say? Whatever we want. Good answer. Okay. What if we go to two time What if we do two two meetings a year for sustain and that way all of these people like self- waste and Cal State programs and all that like is so I'm I'm I'm go at the moment. I'm being in a substitute motion. Let's finish this one now. We got to get to our recommended bump. Yeah. Sorry.

Two minutes a year. We can't get rid of the committee. We need to be green. Let me take off my shirt. Green. Um I'm going to go with Council Member Roach. Right. Right. I'll go with two here. Yeah. Is that okay? We got one sustainability committee meeting. Good job everyone. 20 minutes. Okay, let's get to the now the real hard.

Okay, we're gonna keep the next slides Diana's gonna do. I'll jump in and try not to too much, but the this is kind of taking everything you've seen and kind of putting it into a recommended approach for fiscal year budget 26, 27 and beyond. We can make some recommendations, too. But so we want to show this to you. This is really the we really would love some feedback on this because then we're going to run and put put our bud start to put our budget together. Okay.

Yeah. Great. So this is probably some time saving as well. You we've talked about some of this already. So I'll go a little more quickly. Go to the next slide. So um our approach is going to use revenue items that are likely conservative and not dependent on var. So we're not going to put a business license tax revenue in the budget. Um we are um we are going to propose using onetime funding. We'll spell that out for you in a future slide. Um you know if we get some clarity on the business license modernization if we get that ballot and we see the money come in then we can talk about it for future years. Um looking at you know cover the real estate market property tax and revenue from data center. So those will be future. We won't program anymore. We put a little bit into this year. Um we'll assume we'll have some costs savings measures that are likely um that minimize service impacts and avoid across the board cuts until we get greater clarity. That said, there are still to balance we'll still need to take some measures and then we'll do cost neutral department restructuring. So going back to where we were where we start this year, no next slide where we start this year. So again, our revenues are about 32 million below our expenses. That's again before any one-time measures um or other activities. So these are kind of the first set of measures, the ones we're very comfortable with that we feel um are going to come in. So So of course transfer of measure C money, use of op trust, again that's two pieces. One we won't transfer into the trust about a million and a half dollars and two is we'll recover three million from the trust based on what we spent during the year. use of the community development block grant at a half million. Um some data center revenue and um almost a million dollars and then municipal fee increases. We're still working on that. Um you know maybe we've got a little bit of a higher number as we go through that but um that's that's an area for us to look at. Can I just step because I know there's some questions about wanting to get use less one time and I guess you know and then also desire to not make some structural changes like the jail

and so I think what the reason I'm recommending using some one time again next year is because there are a lot of unknowns in terms of the ballot measure real estate market data centers and so what and I've talked about this with the police chief to the extent that you eliminate tire programs like the jail or something like that it's very difficult to restart them right so I would rather take a little more incremental approach approach in terms of some of our services and we can get to more of that. But if you know then you can scale them back up again if we do have the money but it's really hard once you eliminate them to get them back. So that's why I kind of want to use them one time next year, see how our revenues start to come in and then we can start to decide how much we have to scale. If it if it's still really terrible then we yeah we're back here unfortunately again having to talk about eliminating programs. But I don't want to do that dramatically and then end up being like oh we were wrong and we have more revenue than we thought and now it's really hard to get those services back. So I just wanted to give you my kind of larger thought on that.

So next just a graph showing kind of those comparisons. So now if we if we take the actions from the last slide our deficits a little over 15 million I think close to 17 um is is where we've gone so far. So then we apply some additional measures. So um talked about cost reductions of the nav center um reducing that transfer amount for workers compensation. So it won't match the uh actuarial report. We do have some fund balance, some cash balance available. The fund balance may go negative if we book the liability as we as we're required to. We're working on that with our actuarian and auditor, but the cash will be available. Um so that's the risk downstream. Um some overtime reductions and public safety. This is the second half, so it's not been negotiated yet. Um we're we're optimistic in that labor negotiations. It can't it can't be confirmed until we get those signed letters. um additional police department savings. Again, that could be the jail or modifications operations or other items that they identify and the that reduction in CIP transfers. So then we we've brought this deficit down to 5 million. So um that's bringing us closer. Um and I'm going to turn it back to Jen for that difference. So then you know how do you make up that last gap? And really in the interest of the feedback we've heard from council of having that be structural that we really start to make progress on the structural. So our choices are things that some things we don't have control over which is concession bargaining and asking our labor partners to participate in some way. We are actively commencing that those discussions starting next week. Um our hope would be we achieve savings structural savings of about $3.5 million. If we can't do that, then we would be looking again at some overall reductions um 1 to 2% which uh given all that we cut before would be would have some impacts on services and so pretty significant. So just putting that out there and would result in additional

layoffs. Um so that we're trying to avoid that and we'll see how this goes. But that's how we would and and we would really want to prioritize structural changes. So, not just onetime fixes in departments, but things that we'd have to scale down um or eliminate, unfortunately, if we're trying to make up a 2% there probably we will probably have to come back with some elimination and kind of bigger measures. Um I don't think we need to get into that right now, but I just want to put that out there. That's how we would close that gap and have it really focus on structural. So, that's you know, you see that's the next slide. Uh that's how we kind of get very very close to balancing our budget um for next fiscal year considerations for future budgets and we can we'll pull we can pull up the model if we have time or depending on what you want to spend the time is but that we do think over and again in 2728 about $14.2 $2 million of additional revenue that could come in depending on what happens in business license tax. By then the lawsuit for cannabis could be resolved, you know, so there'd be some revenue that would start to come in. Um, and we could probably if we use those onetime funds for another year, get our deficit down to about 2 million in 2728. Um, and that we would start to have as futures um, you know, future deficits start to grow as you reduce your measure C contributions. But that would be our goal is over the next couple years to try to figure out ways to kind of structurally balance this. We could start drawing or draw down less on measure C. Um but that's really going to depend on how structural these changes are. So the the cuts or some of the concession bargaining and really trying to focus not on one-time fixes but on structural changes over the next couple years. Um, and if we're ever if we are going to address some of those longstanding public safety or corpyard or other capital needs, we will need to free up more money. We don't have enough money right now measure C to enter into large debt financing of any sort to fund major capital without kind of reducing

our dependency on measure C going forward. And then other since we're going fast, other budget priorities, we already talked about building reserves. That's these are just things we just don't want to lose sight of, but we need to build up reserves. Um if we were to hit the 20% which is what we're proposing in our policies that's $46 million right now we have 1 million zero essentially um we have these a lot of priorities for measure C funded capital projects already talked about that and then something we haven't talked about as much but we do have negative cash fund balances in several funds um which we need to eventually start paying put and that would be through onetime funding and other stuff is start to fund those negative cash balances and get kind of get us back on track. So, a lot of other things that we want to try to accomplish and so just don't want to lose sight of some of these other budget priorities. Next slide. Oh, that's it. That and so our questions, you know, for you um obviously anything we're talking about here, but do you agree with staff's re recommended approach for next fiscal year? Do you have other ideas for balancing the budget? What are your thoughts about how to approach future budget shortfalls? And then any other direction that you've already given us that you might want to amend or change or just rethink given now that you have the whole picture. and we're all here to answer the question.

Uh see um just I think the you know I think that the road map that we have right here you know I mean I'm I'm going to just stay really high level. I think the road map we have here is it it makes sense. It I think it's easily explainable. Um you know my you know I do see uh you know restraint around one uet one-time funding. I I see that. Um I just want to just emphasize and I and I know you've been working towards this and I know um you know the message has been getting to the executive team. I you know and I've said it from the deis uh before and I'll and I'll say it again here just so that you know it's it's emphasized and and it's repeated. Um, you know, I think given lessons learned, what I'm going to be looking for this point forward, uh, probably more strainously is structural and ongoing. I mean, those are going to be the two questions, you know, when we go into 27 26 27 27 28

27.

Yeah, 26 27. when we go into 26 27 budget um that's what I'm going to be looking for. That's what I'm going to be um sort of tweaking and and and really pushing. And you know when you know and when we talk about having hard discussions um with with everyone in the organization um you know I'm going to lead and I'm going to end with that with that comment of is it structural and is it ongoing. Um you know I I do agree that once you close something down it's very hard to get the open. So I, you know, I I I do appreciate sort of the incremental winding down just in case something changes, then we can sort of, you know, uh, get it back, get it up again. But anyways, I think um, you know, so for me, it's structural and ongoing. So, you know, other ideas for balancing the budget is just stay focused on structural and ongoing. And I know, you know, we're in the we're in the throws of negotiating with our labor groups, our labor partners, and you know, um, when, you know, if and when they talk to me, I'm, you know, my the theme I'm going to be hitting is structural and ongoing and and hopefully we can, you know, we can get there. And um you know uh you know u the other the other comment I want to make is um you know uh reserve you know when I first got on the council in 2010 you know we were we were in some very very heavy times and um and even in the midst of all of that um then the council um we did take on a heavy uh we we took on, you know, a um a goal um that had, you know, that was pretty heavy and that was to get our reserves at 20%. And um

and I thought I read somewhere in here that sort of there was a recommendation or I don't know maybe I'm I I didn't see it, but there was like a between 16 and 20%. We that recommendation was around how much we keep in measure wet level before we stop cash measure

C. Well, I I would I would just keep that number at 20%. You know, we may not hit it right at 20, but at least, you know, uh given the size and the the the the things that happen in the city, you know. Anyways, I um I would just really um when it comes to number three, you know, future budgeting shortfalls, just I just want to make sure we have a sub a substantive and a substantial reserve. Um and um you know I think um you know number four you know for me is you know I'm going to go right back and look at the beginning of this presentation today about lessons learned and and you know um and and and I think we have learned lessons and I think um you know moving forward and you those are the things we're going to be looking at those are the things I'm going to be looking at but um anyways those are sort of high have a little wrap up that I just wanted to put on the table, but I council sire.

Thank you. Um, so for the first item, uh, I agree with the overall approach. I know a lot of thought has gone into this. I think that we need to be a little bit more mindful of our rhetoric, which sounds, you know, not important, but the word one-time carries a lot of weight, and we're going into a zone now where one time is not actually one time, right? And so I don't know if that means short-term or temporary, but we're we're just saw earlier in the previous section, we're going to need to rely on measure C for a few years. And so I don't want to keep saying to the public, oh, this is one time when as of this conversation today, it's clearly not. Um, and I think we owe that level of honesty to the public. Um, you know, you presented two options. It's the the reduction in costs uh which could lead to workforce reduction or negotiations with our labor partners. Of course, uh any negotiations to our labor partners is really on their own terms because they're in closed contract. And so, I mean, to the degree that anyone stuck with us online that's uh with our labor groups, I I invite you to join us at the table. We uh need your partnership now more than ever. Uh I want to communicate that there exists a configuration of all the contracts that allows us to protect as many jobs as possible. And I'm hoping that we can find that balance and not find ourselves in a position that we found ourselves in with this fiscal year. Um, is this a good time for us to talk a little bit about, you know, just a budget, uh, a breakdown per department or is that better discussed later? I'm just curious.

I think now would be a good time if you want to do it. Okay. Are we able to pull up just the slides of just spending by department so we can get a sense of, you know, where the general funds are being spent. I know it's those in like our additional slides. Yeah. Yeah. So, I I mean, I think it's just helpful for us to have this bird's eye view. I think some of us have asked for a visual and the public should have visual of just the total dollar cost and I think the next slide is like growth in spending too. Is that the next slide? This is the employee. Yeah. Employee only. This is not new supplies and services.

Yeah. So we're also looking at the dollar increase after the contracts have gone into effect and of course fires are quintessential to the city and each of these departments has several different bargaining units inside of it as well. But I just wanted to highlight this because uh you know I I want to make sure that us and our labor partners are all operating off the same information. And I would actually request that maybe we make a version of this and give it to our labor partners of this kind of visual broken down by labor group too so that we have an understanding of just what each contract is contributing to the overall growth and the deficit. Uh I'm hoping we can work together as a team to find a collaborative way of when the mayor says structural ongoing thinking through you know you're requesting three to 5% in these concessions but concession negotiations if the if our partners are willing to come

and half million

three and a half million sorry what I would like to put on the table is to say I don't think any of us want to be in this deficit crisis longer than we need to be and so if we're really trying to do structural ongoing you know my invitation is if is if our labor partners have the appetite for it if the the the the larger and harder we can negotiate with each other, the sooner we can get out of this mess. So, while you're requesting three and a half million, if you I've heard from some Libra partners like, let's just rip the band-aid off and figure out what contracts or what conversations you need to have to not be in this deficit anymore. I would love to have that conversation with them, too. But, of course, our partners have to be open to it. But, I just wanted to express my willingness to rip off the band-aid and try to figure out, you know, how can we balance this uh budget fairly? How can we address this deficit fairly? I think the last round of layoffs disproportionately impacted members that weren't the largest drivers to the increase in budget, which didn't feel quite fair to me. Um, and so, yeah, I'm just I'm I'm just want to have a a collaborative, thoughtful partnership in the next few months with our with our labor partners moving forward. But, um, thanks for pulling together this information. I know it wasn't easy to produce this kind of graphic, but I hope this is helpful to not just us as the council, but to uh our staff, to our labor partners, and to the members as well. Um, and I think those are my comments. Thanks, Mayor.

Yeah. council over. Um, thanks. Yeah. Um, yeah, I mean, I agree with Steph's approach. Like, we've all been having conversations along the way that went into that. So, I appreciate the hard work that you've brought to us along the way so we can understand these choices that you that you're presenting to us. So, I am okay with it. I mean, because of course I want structural ongoing, but I think, you know, to your point of we're going to continue to use one time while we realize some of these like maybe UT comes in earlier, sooner or bigger or or not. And then the cannabis, you know, I know there's the lawsuit, but Oh, but I did want to ask, you know, there's another cannabis dispenser that's supposed to come on where the old like fishery was. Where where are we on that one? Because that Where are we on that one, sir? Uh, so we're just waiting for them to come in with their permit for building permit. But there's a timeline,

okay, that we put on the extension request they had. So, if they don't come in within that certain period of time, then we'll be back to council to say, "Hey, what do you want to do? Do you want to give them more time or we want to cut bait and provide an opportunity for another operator to potentially take that third or maybe council decides we don't want any more than the two that we've already approved and maybe you make an adjustment but we would bring that back to council but it's still part of the lawsuit right so that more likely and what whated revenue from that I have no idea okay I was just wondering because I mean that could be it's definitely because it's it's going to be much smaller I mean it's it's a much more sort of boutique it's probably smaller than cookies so Okay. Okay.

Yeah. Just I mean so there's some unknowns that you know I'm fine with us waiting and maybe using you know another chunk of one time one time funding 400,000 we're projecting. I mean there were projections that showed a lot more. We're trying to be conservative so that too once we start getting revenue could be more. We can adjust from there. Okay. Okay. Um and then oh I also wanted to ask about um the fire training center. You know there was a lot of talk along the way about about potential revenue coming out of the training center. Is there is that happening? Is that you know I think sort of early days in the training center there was this idea that it might be slightly revenue generating and wondering

yeah I don't it's a question to answer um it's not the revenue generator that I think it was rejected to be honest and we share a facility with us and Shabbo it's a heavily impacted facility so when we try to classroom a lot of times Shabbo is there we're there there's a limit to how much we can fill those spots Okay. So, no future like you know it's not Yeah, I think we're the funds that we are generating for it are basically first maintenance and back it's not a massive generator.

Okay. Thank you. Um okay. In other words, yeah, I mean thank in other Thank you for all the work that you've done here. Like these are obviously a list of no easy decisions, right? and um and you know the the 2% or concessions I mean that's really hard and that's going to be up to our labor partners and you know and I hope um you know I hope they will come to the table with us. I know these are not easy asks because everybody's you know understaffed right now and um you know to think of sort of taking less potentially um is a really difficult decision. So um those are going to be hard discussions going forward. So thank you to staff for what you're going to have to do with to have those hard discussions. Thank you. Who's next? No, they'll be here.

Oh, thank you. Um, I just cannot thank you enough for how comprehensive all of this material is today and just the strategic nature of how the conversation has rolled out, how the data has been presented, I think is spot on because like we're able to go back and almost rebuild everything and start to answer our own deep questions about sort of how it is we can move forward. And I think the transparency in these numbers are really good and it's just the reality of what it is right when I was just looking at that last chart that you were showing related to the increases by department. You know, we can clearly see that these increases are not sustainable in one year. If we go to one other slide, we increase salaries in PD by 16 million and in fire by 15 million just as an example in two years. It's like that there's so when we think about structural and ongoing and then we have the data in the slides say we have another 7% increase in PD coming up and then we have another 7% later coming up. So, it really does start to paint a very clear picture in the only way we're going to be able to get through this in a structural way is by dealing with the structural cost of 90s something% of our city, which is these contracts, right? So, I do think that it's important for all of us just to come to the reality that unless if we're going to continue to hold on to these very expensive salaries, it's going to come at the cost of jobs, right? we're going to have to find a way to get into these contracts to be more realistic and pragmatic with what these costs are and kind of just I guess that reality is going to be hard to face because it is going to require us to make some concessions. But I think seeing black and white how exponential these raises were really does drive a call to action to rebalance what we're looking at because I know we talked

about this in the past, but had we not I mean if if we just add up everything around that circle, I wonder how that's like $40 million we gave in raises over a two-year period and we're talking about a third, you know. I mean, I know we talked about before, can't we just like reverse all of that and come to the table more realistically with what we have, but I know we can't do that. So now we're in this situation, but I think it does really call to action the partnership we need from our labor partners to be able to address this in the most collaborative way possible that does preserve jobs and services because if they don't then there's going to be a different approach and that approach is going to not I don't think benefit the community or our workers. Um so I think you know staying disciplined is going to be you know really important. Um I appreciate the fact that you know not every idea is going to be a good idea and going to be able to move forward. So even the way we have the conversations today around these different revenue generators right and we're like well guess what this one may not work. Like there's no we brought up an idea. We have to be willing to live with all ideas aren't good ideas because I think in the past maybe we were afraid to say something wasn't a good idea. So, we just kind of went along with it, funded it, and moved it forward. I think now the discipline we have to say maybe not right now or maybe not at all is going to be a muscle that we're going to continue to need to build as we manage our way through this into more longer term fiscal sustainability. Um, and I do agree with the recommendations that have been put forward. I also appreciate Council Member Cyrus's point. you know, if some of these measures are going to be you shortterm measures versus one time, just kind of ripping off that band-aid and putting that out there, I think would be good. And then, um, yep, anything, you know, like like I said, kind of getting to the structural and ongoing discussions is is going to require labor partners to be at the table. So, I just really hope that they

hear that call to action because we're not going to be able to revenue our way out of this solely. even though we thought about a lot of great ideas today and I'm very excited about the energy behind those revenue ideas. So, thank you again for this and I just wanted to say really really appreciate all the hard work that went into today because you can see how I mean meticulous this conversation was laid out to get us to our own points of deeper understanding related to this. So, thank you so much for that great leadership. Thank you, Council Member Andrews.

Thank you for the presentation. I'll be brief. Um I just want to remind us of the beginning of the the presentation where the greatest concerns were cost housing crime traffic litter u a lot of those core services we do need to make sure we have a focus on that and I would like to go back to the pie chart as well because you see how much we are spending in public safety but a lot of the greatest concerns are also in maintenance. So, I do want to make sure we're we're we're in public works. So, I want to make sure we're looking at the dollars and costs there as well. And um for service priorities, uh when people ask where did the money go, it's right here. It's it's right here. It's it's very plain that police and fire is your greatest concern. It is your service priority and this is where it it is going. But we also do need to maintain these other services in order to support a lot of what public safety is doing. Folks need to get paid. Folks need HR. We need all of all of these organizations within an organization intact in order to support the priorities of the city. Um, but we also need the folks to come to the table. If you if you want us to retain as many people as possible, we need you to come to the table. So, I I hope that you're saying that clearly. I hope that happens. Um, and I agree with uh, Council Member Bonia, and we've heard this before. We cannot revenue ourselves out of this, but we also cannot forget that the folks working here also have to live here or live in the Bay Area, and it's very expensive to do that. So, how do we balance service levels with incomes that going to be able to support the work here? Um, I

agree with their approach. I uh also agree with um what was it? So, I agree with um a lot of the ideas here that balance the budget, but one one of the service priorities that we don't talk about enough, I think, is healthy local businesses that stay in Hayward was listed as a priority and we need to spend more time and energy on economic development. And I don't mean that in a way where we have a meeting about it like we all every be supportive of that. And I feel like a lot of the permit talk that we heard today, a lot of the work that development services is doing, uh, they're they are trying to do that, but we also need businesses to want to come here. That means shoppers need to shop here. We we need folks in the community to support us in order to drive that economic development. So, uh, I am interested to see if there's any other ideas that we can look at for driving more economic development. Um, I didn't see a lot of that in the presentation today, but I think u I think there needs to be a stronger focus on that.

Um, thank you. Um, I am in agreement with your recommended approach. Um the only other idea about balancing the budget is is I'm not sure how much of an impact this will be but at one time maybe a year a year year and a half ago we we talked about how much um purchasing leaks from our community over in some other communities. I don't know how much research we've done on that but if there's a way to recapture so to figure out why those people are leaving our community. You're talking about sales tax leagues. Yeah. Sales tax. Yeah. Okay.

And and so for example, I know when I've spoken with the folks that live up in the Fairview area, they just say it's easier for them to avoid all the traffic down here if they just go into Caster Valley. That might be something we can look at in terms of our roadway improvement. I realize it's a longer term thing. Um but if we can make changes like that and find out what other drivers are, you know, causing people to leave our community to go shop somewhere else, maybe there are certain stores we don't have in here people are leaving for. But I don't know.

That is something we look at with our sales tax consultant as we can with um development. I know he requested at the last meeting. So we'll take we've lost we've lost some leakage, meaning that it's we've brought more in, but we'll look at that. Okay, good. All right. And then uh I know this is just going to take us continually looking at how to approach future budget shortfalls and uh looking at u other related revenue and cost saving and efficiency measures. I know that's top of mind for all of us and for you and staff. So we just need to keep going with that. Thank you. Uh council member.

Thank you mayor. Uh I thank Kendall Sofa. Thanks to the staff from city manager all the way down to Gerald who make sure that the uh computers are working. Yeah, I think you mean all the way up toald.

Well, yeah, I think badly worded. Uh we do leak we do leak dollars. uh Trader Joe's and Castro Valley 70% of their uh customers are from Hamburg. Um so I do agree with the mayor structural ongoing from now on forever and ever until we uh um have attain a 40% reserve. um our unions. We do have nine unions. Somehow or other we need to convince our union that stability of our city is the most important of all aspects of it because it would mean them not losing any more of their union members. And I think they need to take that up and take it seriously because if they don't come to the table and help us solve this, they will be losing some members and that's something that nobody really wants to do. Um when I was on the firing line back in 1982 at Jabal College, 17 of uh 17 of the newly hired faculty members at Chabbo College were being rifted. And it was our union that came together and said you will not be riffed. We will come together and we will take a percentage off of our cola and we will then offer some cost-saving measures to uh the city to the administration and 17 faculty members were saved at Chub College. Um and I think that's very important. I am not seeing that from our unions and that's something that's a little bit sad. Um so uh what you all did today is fantastic. I my heads off to every one of you. I I really have

nothing else to add as far as any other ideas because you have done them all. So um keep going at it. Uh-huh. Yeah. And uh as we say in Mexico, thank you. Um before um the city manager, um we go to the city manager. Um there is another um there's another part to this that we're going to do which is the policy piece. And that was the question they asked us at the beginning. Do we want to press forward and do the policy piece or do we want to do that separately at another time? Um, and you know it is 2:30.

Yeah. And you know um you know I don't mind doing it separately at another time personally but separate. Yeah. If we include this with like the next presentation of the budget as a way of explaining updates we've made to the budget. And also just we attached the draft policies the council budget and finance committee. you'll see their comments have already. So, feel free to send us stuff and if you have other comments, you know, we could do it that way and then we can just bring it back as part of maybe the budget work session or we could bring it out another agenda that's kind of light or but feel free to send us any thoughts you have in the meantime. The comment regarding the target as well.

Oh, okay. And and the other thing that I uh I just did a quick Google Google check uh city of Oakland city council meets twice a month and if they need it and and if they need to have a third meeting they do have a third meeting but and they do it on the second and fourth Tuesday. There's some cities with no committee so we can Yeah. And there are some cities with no committees. Usually it would be the third Tuesday, right? because Tuesday is already a sort of we would do one and three is what I would recommend because we're already doing we're already doing one three and four. So I think it that way we're not adding one on tonight. We don't already have one. We're just going to and if we have another meeting it would be the third. The fourth sorry

um I do have next steps. You want me to just quickly close it out or Well before Well yeah go ahead and do this and then I'll I'll I want to make some concluding remarks and then

Great. So we've gotten a lot of direction. We are gonna gas and work implementing all of our next steps that we've heard. Some of them we'll do sooner rather than later like some of the council meeting things and other things. We'll just really go forward and getting our budget together for 2627. We'll be doing concession bargaining. We'll be moving forward on the business license tags full speed ahead. So, a lot of great direction. Thank you so much. We really appreciate how um how productive this was and we got a lot of clear great feedback. So, thank you. Um we will be briefing all employees on this meeting. So a similar kind of little slightly condensed version of this um next week. So I'll do an all staff presentation on this and we'll share some of the feedback we received from the council there and then we will be kicking off with our labor partners and as part of an initial session be giving them some budget updates based on they've seen most of this but we'll give them some additional updates. So, um, concent, like I said, concession bargaining, we'll continue to brief you in close session on that, and we'll continue to move forward on efforts to sell the city's property, restore reserves, um, brief you in close session as needed on that. And then we'll be holding some budget work sessions in May. And those might be on that fourth Tuesday, or we'll kind of try to schedule those out so that you can plan them into your lives. Um, and then continue to do the monthly briefings with council, budget, and finance committee. And then if there are any concessions that we um negotiate with labor partners, we'll do those in May and then adopt a fiscal year budget in June. So just those are our next steps.

Thank you so much. Thank you everybody, all the executive team, all the staff that worked on this. So thank you. Yeah, I just wanted to thank everybody uh of course uh the all the staff that have been here um including Gerald Dean. She helps me all the time. And um and you know ju just two things the next time we all meet. One um I don't think tie should be a requirement. Uh your predecessor your predecessor never wore tie.

I don't even think I I don't even think he owned a pair of I think it was all tenny shoes but that's neither here nor there. Uh uh but um but congratulations though on on your new on your new appointment. Thank you so much. And uh but I just you know on behalf of council, thank you everybody. Thank you for all of your work on this. Um I am I personally am leaving here with a great deal of hope

uh and um and confidence quite frankly. Uh and um and so with that have a great afternoon. Happy Saturday and make sure Diane gets all of the documents that he uh had today from Jennifer and everything on the budget. Yes. I'm going to try to triple it. I'm going to check it. Triple it.

Triple it. Excellent. One thing Diane before before we move on. Ladies and gentlemen, meeting the journey.

Francisco.

Recording stopped. I agree.