Council Budget and Finance Committee - Regular Meeting

Great. Okay. Welcome, everyone, to our council budget and finance committee. Today is Wednesday, 03/08/2026. We're starting to see these at 05:34PM. Let's go ahead and but upon speaking to order and roll call.

Council member Zaire?

Present.

A chance meet

Perfect. Thank you. And the mayor adopted it. We'll move on to public comments. This is limited only to items on the agenda and submitted prior to the meeting. We did receive public comment via email without being reflected in the agenda packet afterwards.

Yeah. And it's record set of two. Okay. Great.

So we can speak to that when we tied up two. Okay. Great. Are there any public comments online? Mm-mm. That's a zero. Okay. And then first, I will close public comment and move on to approval of the minutes. Seconds and third objections will pass unanimously, and we'll move on to item two, reports and action items beginning with investment portfolio review and fiscal year twenty twenty six statement of investment policies update. And I'll turn it over to you, director Hilde.

Great. And I will introduce who is our investment adviser management, and she'll give an overview of current trends and Once we hear that. Yeah.

Yeah. Welcome.

Thank you. It's a pleasure as being here me, and I appreciate I can have control the cooker or just ask on to enhance this. Yeah. I know that. Okay. Alright. Great. So I'm gonna spend, the time I have with you this evening just to provide a brief, market update and talk a bit about the portfolio that we manage off of city at Get The Math of Management. My name again is Monique Spike. I've actually been working with the city of Hayward for a number of years.

I'm really proud to help steward this relationship and ensure that your assets are invested in accordance to your policy and your focus on safety, liquidity, yield. With that said, I'll advance to the first couple slides. We're gonna start within a brief economic and market update. And I always think it's helpful just to have some context for, you know, the environment in which we are investing the assets. So the first thing that I wanna talk about, of course, is the, you know, big elephant in the room, which is the matter of what's going on with the Strait Of Promise and the impact that's having.

That's important for a number of reasons. One, the Fed kept their benchmark interest rate unchanged today. You may have heard this in the market that there was hope that they may lower that rate, but they still had a current range of 3.5 to 3.75 because of the uncertainty in the market. Looking at this chart, you can see that the price of oil has jumped significantly. As of the time this was printed as of March 6, oil prices were 87 and 61¢ a barrel.

They since jumped us to as much as a $120 a barrel, which is a 40% increase in price. Now both the, administration and the Fed have suggested this could be a temporary jump in prices, but we know it takes things a little bit longer to come down. And so what we're what we're dealing with in the interim is essentially higher prices for lots of things. Inputs, oil, the industry or produce being, you know, blocked or, you know, something when there are things like fertilizer, crops. All of those things are just getting more expensive.

And so that is something that market is certainly watching and some of the the Fed chair Powell mentioned in his comments today. On the next slide, we wanna talk about, both CPI. CPI number also came out very high recently. And that, you know, the oil and the oak war slash conflict aside, that also suggests that just general price pressure from existing tariffs and the cost that's going up has also crept back into the numbers. We saw a headline CPI number most recently of 3.9% in some instances.

It's definitely hitting a lot of folks like the residents, like folks in the public. The jobs picture is is consistently it has been getting worse. We saw a 92,000 job loss in February. The unemployment rate stands at 4%. You're gonna start hearing the term stagflation again.

That is where inflation gets higher, but the economy is still solved. I think just given what's going on now, I think, you know, economists, commentators are starting to take a stagflation a little bit more seriously. Now what does that mean for us in the investment market that we utilize? It just means that, you know, interest rates are going to probably be held steady. The Fed has talked about, waiting and see, and I think we've been in wait and see mode for a while.

But with the war in Iran, with, you know, oil prices, with, you know, the jobs market, They really just want to give the data some time to rest before they make big decisions. Other things with the Fed that are pertinent to our discussion, of course, is whether or not Charlie Powell is leaving. The person that president Trump has nominated to replace him is having some trouble getting through his nomination process. Chair Powell has stated that if that man is not confirmed and timed, then he would simply stay on until chair is. The justice department is also trying to indict chair Powell, for that acts that has not gone anywhere so far.

Jeanine Carroll is is offering to appeal, that decision. But right now, we're still in a a fairly comfortable spot where chair Powell is likely gonna keep the seat at least in his term, and the final will continue to be independent. Moving on to the next page, I do wanna talk about GDP. This chart is very colorful, and it's it's meant to show in black what the sort of across the board GDP GDP figures have been, and then the individual components to show you what makes up each of those. The far is fourth quarter twenty twenty five, and you can see that the GDP just fell, dramatically.

You can see that where a lot of that's coming from. You don't see a lot of net exports in the number. There's some concern that GDP will continue to get worse as we enter into the first quarter. That's where we get that sort of stagflation concept as GDP falls. Now the Fed, in their most recent prediction, did lower their expectation for growth for this year.

So I think it just goes to show that, you know, they're taking this data and agree that the economy may not move as much as we would like it to in '26. Moving forward, I wanna talk about interest rates, for a moment. Another portfolio report that I'll go over with you all today is as of December 2025, so as of the last quarter. And we compare on this chart the yield curve at the end of the year, which is the light blue, to the yield curve at yield a year prior in the yellow, and the dark blue is just where current rates are. So big picture here, yields have fallen dramatically since 2024.

That means a couple of things with Citi. One, because we've been managing your portfolio over time, we were buying investments in 2024 when yields were higher. So you do have some of those higher earning, higher yielding securities in your portfolio. You'll see that when we talk about portfolio yields. But it also suggests that today, and that's the dark blue on the chart. And when you compare the dark blue to the light blue, we are in a much lower yielding rate environment. And so the investments we're buying today are lower yielding than what we were buying yesterday, so to speak. Now our strategy has been consistency for the city. We're not trying to guess where interest rates are going. We're not, you know, playing the field or taking bets, so to speak.

We have a very clear investment strategy that we're implementing for the city. And we ensure that investments are made across the yield curve with maturities between one and five years and also short term portfolio. So at any given time, you are mitigating any risk of interest rate changes. Because we keep that consistent investment ladder going, you always have investments in one, two, three, four, and five. And that's been really helpful for you.

I'll touch on that again when we get to the portfolio. On the next page, I wanna talk briefly about so one thing to keep in mind, the portfolio yield, the interest that you earn is based on what we're buying in the market. We don't buy negative yielding securities for the city. Everything we purchase for you has a positive income. The concept of total return takes that income and adds to it any price changes in the investment.

And so as interest rates rise, generally, values fall or the value of your securities fall. As interest rates fall, the value of your securities rise. And so if we take a look at your portfolio, we're gonna add the income to that market value change, that's and what gets you total return. So your total return figure will be different from your income figures. Good news is that total returns were very high over the past year, and that means that in addition addition to to the the income, market values rose.

So the value of the investments in your portfolio, rose. The reason for that is because everything we bought last year in 2024, when we bought it at that higher yield, people who wanna buy those investments from us are gonna pay us more for them because we're giving them a higher yielding security than they can. So just wanna keep that in mind and level set before we get to the portfolio. Any questions on the market before we turn to the portfolio snapshot?

That on the right side. Sorry. The one year return. So you hold different kinds of investments Mhmm. In four different categories. So I'm seeing the for the the return percentage of the accounts.

That's a great question. So the one to five year ends I want you to think of as the market. Okay. And so the market at large. Okay. And so using I'm gonna go with the US treasury to start. The US treasury represents all of the US treasuries in the global market where that have maturities. So you were a general investor and you wanted to know, well, how did treasuries work? This gives you the one year return. I see. The yellow is corporates with ratings from a to triple a. Okay. And so this gives us a sense of the market and the general categories that we would invest in for the states. And so takeaways from this is corporate and treasuries were the winners at large last year.

Gotcha. Okay. And this is just generally speaking, not specific to the city?

Just generally speaking, not specific.

Okay. Thank you. Yeah. But and then for what accounts for the in the price index? If you're looking at the appointment number Can you go back to slides? One more? I have one more. Yeah. What's kind of what accounts for, you know, like, a 120,000 new jobs and the 92 like, I guess, those swings, like That's

a great question. So the the jobs report, the change in non farm payrolls, there's a lot that goes into those numbers. And we've we've sort of been going through a bit of correction. Like, each month, they sort of dive deep into, like, what makes up the numbers. There have been layoffs as corporations sort of restructure their workforce.

AI has had some influence on that. Retail, agriculture, other sectors, we've been seeing sort of a net job loss. But a lot of it just has to do with companies and corporations hiking their belts in the base of, you know, the angst and stress of the economy. And so we are seeing very wild swings in the unemployment number month to month. Another thing that's been happening is a lot of these have been being revised.

We had a situation where the Bureau of Labor Statistics put out these numbers. There were some changes there. There's questions about how the numbers are being put together now. But, you know, I think, generally, the expectation the number is not against expectations for what's going on given the trends we've seen in various

follow-up question on this, on the right side as well is, I was reading that because of unfavorable administration was reducing staff in their bureau bureau of labor statistics. So I guess my question is is how are you making sure that you have uptake down to this?

Unfortunately and this is what the the market has been tasked with. There are a number of different places you can get data. It used to be that the Bureau of Labor's sort of the, you know you know, just a nonpartisan number that came out every think the administration cares more about this. And so there has been some concern about the numbers that we're getting. There was a change in the leadership in that office.

I think the market is waiting and seeing Okay. The quality of the numbers. That leadership change just been fairly recently. And so we're sort of digesting things that aligns up with individual, like, for example, ADP, the payroll. They they also put together. Okay. So far, we haven't seen, you know, too much difference between the two, but I think right now, folks are offering benefits now.

Okay. I understand that, you know, ADP role is a comparable. We can look at to gut check these numbers. It's helpful because, you know, you're making really complex decisions on what to invest in based off these numbers. So if we're investing a lot, I wanna make sure we're based off real information. Okay. Great. Thank you.

Right. So let's turn to the portfolio snapshot. So I wanna start with the certificate of compliance. It's really just emphasizing that we can see these new have very strong compliance controls on the investments that we think that the our needs, investment policy, and we have multiple systems to ensure that we are not going against your investment. I'm sure I'll start there.

Now into the actual portfolio itself. For me, there's about $295,000,000 in the portfolio. And as I mentioned, there are two portfolios that we manage on behalf of the city. There's a long term portfolio, which has an average maturity very close to three years. If you take a look at the maturity distribution chart in the bottom right, you can see the dark blue.

That's where long term portfolio is essentially invested across the curve. So, again, assets in pretty much all of the maturity buckets. The short term portfolios, $2,000,000 approximately, and that is invested generally in the short year yield curve, and it's about a little less than a half year on average. This diversification of maturity structure ensures that Citi's assets are optimally invested to take advantage of longer term yields to sort of protect some of that income over a long period of time, but also protects your liquidity. So if there are short term liquidity needs, they're already assets in the portfolio.

The yield that cost your portfolio is 4.16. That's fairly attractive. I would like you to look at the yield at market at 3.76. That tells you, know, a a hands off investor wanted to buy your portfolio, the market would only provide 3.76%. And that's why your portfolio is gonna yield a higher price because your portfolio is is earning a higher yield than the market.

In terms of the sector allocation, we're very diversified, healthy allocation to US treasury securities, so really keeping that quality double a on average rating across the board. And we do have some investments in other asset classes like post risk assets, municipal bonds.

Can you say a little bit more about that in the S and P rating, the 74 double a?

Yes. So there are three general rating categories for SS and B. There there's triple a. Double a includes, bonds rated a plus, double a, and double a minus. And then there's single a, which is a plus a and a minus. 74 of your portfolio is in the double a category. So that could include bonds rated double a plus, double a, or double a minus. US treasury bonds, for reference, are rated double a plus. So that that category is a good portion of your US Treasury bonds. I'll also note that these ratings might be rating in there.

I wanna assure you that that bond is likely rated, a in the a category by Moody's. The SMP rating scale is just a bit off for Moody's in that regard.

So the question I wanna ask here, so 4.16 of $295,000,000 roughly is an $11,000,000 plus $12,000,000 yield annual. Fee. Mhmm. And then maybe this is a question for the c management, but I guess this is something that we're factoring into our annual revenue. Is that correct? Or is this Yes. Quickly deployed?

On the general fund. Not in general. Doesn't have any actually distribute the funds with cash.

I see. Okay.

So The, like, the water and fuel funds.

Okay. So, yeah, I I guess I just wanna pause for a second for the folks that are watching. We say we have this dataset that we're trying to combat, and then we say, oh, well, we actually have $295,000,000 invest. Can you help me understand and put it help the public understand the relationship between these investments, the revenue we generate from that, and then where the

Sure. Yeah. The this these funds are held by all funds of the city. So we what we it's called pool cash. So we pull all the funds in the city together and invest on what we don't need right away into these in these portfolios. And then as interest is earned, we distribute it based on the share

of each fund with cash.

So it goes to the funds that the that the cash is talking about? Yes. I see. Okay.

That is primarily enterprise funds, so on bonds with funds. But but some small funds. Okay.

And do we have any general fund revenue invested in?

There's very little. At this time, no, because there's zero cash. But it's all the time, the funds are changing. Nice. So as the general fund recovers, it has reserves to address, you know, with a some day, you know, a favorable one or two months. Yeah. As there's more funds in the general fund, generally, it would, like, private lenders.

What we have

is right. Had some, yeah, had some investment earnings and private investment earnings. This is it's very uncommon for the general fund not to benefit from interest earnings.

So we bake in the revenue from these investments into, like, the enterprises that are coming from, for example. Yes. Okay. So this is one of the ways the enterprise can sum afloat. Well, the only way that we would have general fund returns is if we had money sitting in the reserves, and because the reserve is zero. Yeah. Mean, that's stock. It's like these are the reserves of those funds that are actually sitting there making money. So if we had general fund research, we might be able to yield something back. Yes. There's zero in there.

Yeah. So we had the 20%.

It was $40,000,000.

Oh, okay.

And then you would make presumably some, yeah, around 4%, it looks like. Morning. There's in the model, which shows the interesting timeline,

which typically, you would have, but it's zero up there by itself. Okay. Do you wanna add more?

I think that's that's I hope that that No.

That was very helpful. And then for enterprise funds in our city, which run at their own separate Yeah. But as a business entity, that's sustainable operations, it treats its investment income as revenue as part of its general budget. Right? Okay. And we would too generate interest income. Understood. Okay. Thank you for clarifying.

But you'd see a revenue line form. In fact, if there is a revenue line form, think that's zero. Okay.

So I just wanted to make clear that there's not a piggy bank on that mistake. I can make sure. Okay. Thank you. Good point.

Briefly on the next slide, I just wanted to give you all a snapshot of the transactions that occurred over the last year. This is very summary level, but I think it does a good job of showing where the asset and and, you know, activity flow. And so, essentially, we moved money out of treasuries into other asset classes over the years over the year. Agency, commercial mortgage backed securities, the multifamily housing, asset backed securities. So, you know, that's sort of backed by things like equipment leases, etcetera, and.

It is typical for us to move assets out of the treasury category into other categories. As you saw, we have about 55% portfolio for in treasuries. That tends to be our holding pattern until we find other asset classes that make sense that match our very strict credit review process, and we will add value to the portfolio. In summary, the portfolio performance has been fantastic. At the top, we show the, you know, interest earning the portfolio.

This is a great graphic because it it also shows that change in market value. And when I talked about total perform total return performance, I mentioned that there's interest on it, but there's also the market value component. And so these total return figures will will speak to that. Over the past year, we performed in line with your portfolio benchmark, which is the one to five year US Treasury Index. You can see gross, you know, very significant outperformance over the longer run periods, over the past year of 6.08% versus 5.74%.

So we're really happy with that. On the bottom, we have the portfolio realized earnings, which are sort of the the the dollar earnings, ignoring the. And so we have both the long term portfolio and the short term portfolio there. So really healthy earnings across the board for the city. We think the strategy that we put in has been a good one.

And the last slide that I have is word of things that you're viewing. We have a great relationship. It's been, you know, really phenomenal in communicating needs. You know, we work really hard to remain in communication with them about the activity that we're doing. So really great partnership with the city staff.

As we look to manage some of the volatility in the market, we expect to be fairly neutral as it relates to duration. So, you know, again, we're not trying to guess which way the market's going. We think being consistent to study with the portfolio assets is most Our goal is to manage for us to maintain really high fire quality for the city, and that's been consistent with what we have been doing and what the investment committee has been talking. So that concludes my report on the I'll answer any additional questions.

Who's served on our?

Alex, Mary, myself, me, and.

I'm happy. Thank you for this presentation. It was informative and helpful. Slides and making the work. I do have one question. When we were looking at do orders in a row. Right? Is that that's I guess I just wonder

I I I wanna say, know, technical definition aside, feel like the last time we were at we met the technical definition, there was, like, oh, well, maybe not. I believe it was three no. It's a little bit more than three quarters in a row of negative growth, but I don't think you need it.

Okay. I saw it was, two or more. Yes.

But it's I mean, I'm telling you that that, like, in there was all the hemming and hawing on the house. It's not really inflation. It's COVID. It's supply chain.

I see.

But feel like we've, know, we've gone new normal a couple of times with that discussion.

That's what I'm wondering. I I guess, how would you define it towards just more of, a optics thing?

I mean, I think you have to have this negative growth, and we haven't had negative growth yet. I mean, it's been declining, but

it hasn't been. I see. Okay. Negative growth. Mhmm. Okay. Got it. Does staff have any questions or do have to come back?

We're gonna be investing. Okay. Thank you again. So it's not a complex thing. We're gonna do some You need time for you to be presenting all of this. Or if not some of the wealthy. Yeah. Return return to these firms are great. Really happy with our returns. We'll take it. Really great for their support. We respond to things very quickly. We have moved some items out of longer term. So in addition to the investments held by yeah. Then we have some in the local investment fund managed by the stakeholder and, of course, in our basic.

In case of fact, it's because we have to we're what we're managing

our cash flow. So we need to make

sure we the other place we have money other than here is in our bank. We need to make sure we have enough money Mhmm. Out of invest out

of long term investments But right now, we're we're low on the six.

Great. Thank you. And I guess my follow-up question before we move on to the investment policy is we received a public comment around, an ethical investment policy that should our investments align with the city's values. And this is something we've been discussed with quite a bit of quality before. They had mentioned there were different ESG type portfolios, but it didn't seem like the the right time for us to pursue that option. In the past, you said you had to invest in those specific corporations. Yeah. I guess I just wanted to hear your thoughts on, you know, PFM's offerings around that. Prohibits you for your investment still currently? Yes.

We have very specific language at their policy that, essentially requires us to restrict from purchasing looking at Minogue Chevron and Caterpillar, which is purchasing issuers related to nuclear weapons and restricted from purchasing from McDonald's, Walmart, and General Electric. And those are very specific

When was that? McDonald's, Walmart, and Electric.

That was between '23 Okay. So those still live in our investment restriction.

So McDonald's? McDonald's, Walmart, and General Electric. Okay. Mhmm.

And Chevron, Intel, Hyundai. Okay. That was 2020. Got it. You know, I I will say in in you know, we have a great team that sustainable investing and ensuring that we, you know, protectors.

The challenge with sustainable investing is the subjectiveness there. You know, the way I may interpret a policy may be very different from the way you may interpret from the way ultimately, you may interpret. Mhmm. And so we really work to get very specific about what the restrictions are. ESG strategies are one way to align your objectives with sustainable investment goals, it allows us as a portfolio manager to be able to remain Mhmm.

With that. Mhmm. Because, like, all things, we wanna make sure that we point to the call. We are following the policy. And so that's why it's really get that very specific language Yeah. Details. Yeah.

That's Okay. That's helpful. And I think, you know, I I don't have any recommendations for changes in portfolio, but I think knowing who the investment committee is is helpful. I think if there were corporations that we had issues with, we could bring back to the committee's attention to the community to get them on how to best approach it. I think, you know, rather than being hasty around certain investments, we can also look at when does that investment expire and then have a conversation about whether or one of the investments. There's a lot of approaches to achieving, you know, creating a more ethical investment portfolio, but just wanted to acknowledge that someone spent some time writing a nice letter to the city about it in relation to this item. But thank you for your okay. Great. And then I think we're gonna stay on the same item that we have on this policy update. Is that right?

Yes. And I can take a lead on it, but it was support item from the account. So they yeah. For their support, we're giving up the government codes. So there are four codes that have that affect investments this year. Two aren't related to the policy. The first is enhancement training requirements. We'll be working on that with the court. There is now a requirement for two hours of financial training program to the website and some staff. Excuse me. And that will be again, we have to do that by.

To be clear, is that what as I I know we had talked about how to manage the next based off this dataset, but at the same time, it happened that same level of cash usage. So good timing. But just for the sake of the public's knowledge, that is going go with that by 2028. Correct. So anyone who is elected let's say, you know, we have an election coming up this year, we're not subject to that requirement, or would they be subject to that?

I think they would be required to have I looked at the legislation. They would be required to have the training before.

Before? Okay. So everyone must have the board. Yeah. Okay.

So we'll be looking at what the options are to do that.

And then anyone who'd like it afterwards, have to go. Yeah. See what it's like.

And I think within the first time, you know, in the office. Okay. Okay. There's also some changes related to filing or f that PPC filing. So, again, we'll work with that and Kirk to see if there's any changes. We may already be doing those types of files.

Can you share little summary of what what's the change in that file?

Just those officials who manage public investment, so maybe I we believe they've got the right priorities already filing Okay. Some of their other employees anyway, but we would both

Okay.

And then the next two are the ones that you will see reflected in the strat policy, which was extending the maturity for of the March paper from two seventy to two ninety seven days.

Does that sound?

Pardon? We are What?

And can you just help justify the the challenge?

Only variable can help measures to provide something. Right? Yeah. It's a change to the definition of commercial paper. In the past, most commercial paper was two hundred and seventy days.

Now we've seen commercial paper maturities extend to three hundred and ninety seven days. So that would basically allow cities to take advantage of those additional invest. This would be an appropriate investment, for example, for the short term portfolio that we manage, which is that, you know, generally, I'm, like, about eighteen months average maturity or the longest maturity in the short term portfolio. We think it's a great way to just extend its system with California government code. We are buying longer term corporate obligations, and so it's not necessarily increasing our total there. As huge credit confirms the maturity rates, it's just exposing that category to longer.

And so there's two changes for those changes.

The second change is around investments in I'm be on page. So investments in US Army Securities that might be able to zero interest accrual. So that was extended from 2026 to 2035. Then And then the

I'm sorry.

Third change was around the maximum that could be invested in commercial paper, which is 40% of the rework to '25 and 33.

31. That's One moment on page twelve one. So we're six testing this spot expired January. We're just trying to extend Correct. The date. Okay. And then sorry.

For one

to 31. What was the next one?

The next one, there's no change in the policy, but there is a change law around maximum investment. So paper goes 40% until 2031. Okay. And then it'll revert. Okay. If we update the standard. Got it. Yeah. So two changes in the policy and just one kind of really quick feature. Okay. No more legal change.

Should you guys take action to recommend this to the council? Yes. Okay. So second, if there's objections, you will recommend it. And I think that would close the eye from us.

That's it. Thank you so much. Thank you. Okay.

Fiscal year twenty twenty five, twenty six, monthly debit update period ending 02/28/2026. I noticed we're sharing this to the public. Okay. Thank you.

This is our ongoing monthly update. We've made some changes in the line of this request. And, also, I can just make it a little bit simpler to really work out the FCs, the Dom page. So for vitamins, kind of that red, yellow, green. For green and red, we use that, basically, color of oh, it's not showing up on the screen. Is it it's not the do you have the impression? Yeah. We have.

What was this?

You could just be the It's a Oh, the screen the color of the screen is terrible. So we So or something. Yeah. So I'll just. So right on the top, our top three of sources are performing as we anticipate. Again, we're having to use a little bit of consultant assessment versus the straight line forecast. You know, sales tech will be seeing a decline.

Oh, well, those colors are those colors there.

Yeah. The the red's not

showing up. Oh, I I can kinda see it. Yeah.

Trust you, though. Why don't we just read out the red?

There's only one red. Yeah.

So let's just do that. That's fine. Yeah. When we get to that, we'll we'll do that. Yeah.

We can pull it up for two. Oh, small. Last slide.

You're you're on it quick. Yeah. Right. And the only red is the other stuff.

The the 37%.

Sorry about it. Okay. So, again, top three revenue sources are as anticipated. We are using consultants estimate when we're looking at that forecast because, for example, in sales tax, we're expecting a decline based on, you said, straight line forecast. You know, straight line forecast takes what we have, divides it by a number of months, multiplies it by 12.

But we're using that consultant assessment to see where we are. Utility users tax just says the brief update, we are working with our consultant on UBT for streaming. There there is a bit of a wait for the the conference report if I don't hear that item. But in the meantime, we will start so we're working closely on that. Don't think we'll see any revenue for that this year, but we get each year's. I've note today, we did receive one payment that did say slash for me. So maybe sending it without needing to see the nurse. She

was invited.

They heard me. They're gonna just send the tickets. But at this point, there's no optimism that this will will go forward, and we think that we're better start start the process of getting them notified and because they may have some actions they need to take to purchase a to send those statements. Branches fees are trending below budget, so that's garbage, electric, and cable, I believe it is. So we're we're monitoring to see if it's payment timings or hosting timings, so we'll we'll work on that. Real property is is a little bit concerning as well. It's slightly below budget, and we haven't had that larger payment already this year. So You mean Southland?

You say larger payment?

The large payment was Southland. Yeah. That's So since that large one has already come in, we're we're not quite where we would expect to be. We'll we'll launch or get it modern closely. It's it's not several million. It's, you know, potentially a few 100,000, but we're we're we're yellow for that. Our business tax is is yellow, but it's just the way it goes. So we build business sites. In January, we are still working for the audit that was suspended for about $400,000. So optimistic just, again, payments coming in.

TOT, we did go back and double check, and we are closer to 50%, which is what we would expect Okay. In this time based on when the payments are due. So we've been able to to learn that today and further.

I I anticipate that. I don't know if we've got the numbers in this way of, like, when you can see spikes across each of these different revenue sources, but as we get towards, like, graduation and, like, summer months, like, in this state, that's where we make the bulk of our TOG. Does that sound correct? I'm just trying to understand, like, when we should expect see the job in certain

Yeah. I don't know if we've evaluated it that way yet. Okay. We're just focused on the budget. But, certainly, I think in two years, we will I mean, this isn't one of our top revenue sources, so we haven't given it a slash connections. It's like

Oh, yes. No rush. That's what I meant. It's a good AI, especially if we have, like, a World Cup and things like that coming up too. But, also, I just wanna say, like, this format is great, like, for us to be able to look at this and have a bird's eye view for the long time. Yeah. Here's I really appreciate like, this might seem like a simple spreadsheet, but, like, for the public understanding

as well.

Yeah. This is significant. Yeah.

Canvas revenue, we we think we'll make the forecasters signing They they have trended down in the most recent period. So we we would call it agreed, but it is something we need to keep in mind. Other taxes is something trending pretty well below our budget, so we're we're going back into those budget items and work with the teams to understand what might be, you know, departments that receive that revenue. These are charges as as trending to be above budget. That's, you know, for example, about the fees, maybe fees like that.

So that's that's doing very well. And, hopefully, that if there are shortfalls, that access would cover the walls. Permits, pretty slightly below, but there is, again, some delays in posting that work.

So so with permits in particular, you know, looking at what Daniel Murray is gonna go around trying to see the economic growth, there's a lot of creativity around the ways of waiving permits or streamlining permits. And so I I guess I just named that one because we're getting a significant revenue from permits, but also wanted to find to be able to have the flexibility. Doesn't speak to you know, for example, that business family member initiative. Mhmm. We made the feature evolve, you know, modifying how we approach certain permitting.

So I guess I just I just wanna name that. While I recognize we are a big revenue company, it's important that we are forming up other sources of revenues. We have the flexibility to put permitting to achieve others' objectives. I I think I just want to put the idea on the table so we don't get too committed into, let's say, you know, burdensome processes only because we're I guess, do you have any impressions on that?

Well, I I guess one thought is that we definitely like, it pays for salaries. So Yeah. Too. So to waive fees

that are related to cost recovery.

I'd be very hesitant to do because that's

just putting extra burden on the general fund. Mhmm.

If you're talking about, like, impact fees or other things that you know, technically, those goes for infrastructure,

other things that aren't bodies or operating revenues.

I mean, those are things I think we could look at. I do think it's just not hasn't made it to

the top of my work. We've talked about it, but, like, whether or we could do some expediting or other things like that where that might be something we've talked about.

So I I would just want us to be careful

about because, also, if we can't cover and we're because for you'll see some of the restructuring ideas that we're talking about in development services, maybe we hire some additional staff that are essentially covered Mhmm. By fees, and that might actually allow us to be back for a better service.

Yeah. Right?

Yeah. So I see. So, usually, we'll we're thinking about it.

Yeah. But it is it is all complicated because we do Yeah. We're having a good time. Yeah. Don't think it's always take back or kind of, like, an expense line.

So there's there's there's other ways to do that. But as Jenna said, this does cover the salaries. You'll see a piece of coming up in the next month or so. We'll have council call. We'll get it here first. And so you'll kind of you know, these need to be based on actual cost of services. They can charge less than a process, but we can't charge more than a process on an average basis. So that's that's the

basis of so much of this. That kind of insight's helpful. Understand the ways we're producing.

Yeah. I mean, the things and I know this is sustainable. Yep. It might

not be politically or policy wise or wherever we wanna go, but, like, anything impact fees that cover infrastructure or, honestly, affordable housing fees or percentages do impact the cost of housing.

The other hand, if you don't do that, then Yeah.

So it's the but those go straight to the developer's

bottom

line in terms of feasibility. So I

know San Francisco, for instance,

has looked at lowering some of their affordable housing requirements to incentivize more housing. But,

you know, everything comes with kind of a

trade off. Yeah. Great. Thank you.

Our revenue was performing well, but we do know, for example, a big chunk over half is in fairly buyer. So we're recognizing that's kind of a feedback. And so we're it's it's great, but definitely we're we're monitoring. Finds and bar pictures comes in after the fact, so it's a little bit below based on the straight line forecast. And other revenue, this has this is where the trust when we actually got that yesterday. This one no. Last couple of days. About 1,300,000.0 to the general fund. A little bit more than 1.5, let's see what we need to close it back to where was paid out of. So that will bring that.

Most of the way, it's where it goes. And we'll have another 1.5 right at the end of the year. It's actually based on. Did you see this tiny bit of investment income? That's, you know, really the investment report, but these happen to be the employee housing loans. They're not actually I think we're just closer together.

This is fantastic. I really Yeah. That's been before. The. You know, some things being I mean, I just really appreciate the strength.

Yeah. You've done a great job. And and you do have to explain it,

right, because the different sources are Yeah. That's what's April, July. Yep. Some of this

Was it circulated to the full council?

I believe so. If not, it won't be circulated after tonight. Yeah.

I think we usually do it after early July.

So transfer saying that's something we do in Toronto. We should keep it up monthly. There are a couple of the transfers that we're just bringing money available funds. If we don't need them, we'll need them where they are. Makes sense. For example, technology fund and for they should bring them in just the balance. But if we don't have to, we may need them. Future cost. Expenses. So salary and benefits, it appears slightly high, but we're really get a lot of changes, and you'll see that next slide.

And so we expect, you know, it's above where it should be in budget, which I think is 2%. We expect that to come in. But a lot of work maintain that from our. Maintenance and utilities, again, these payments come in after the fact, they go after the fact. So we still think that these are green along with the services supplies and the actual the capital is very high, but there was one single purchase, and then it's a small

So so, basically, we've spent 33% of our supplies and services. Mean, it's due by Yeah.

But what happens is, you know, you buy something, and you get the bill in there and you pay it. So they know you at the end of the month So if we do a net $30 crisis, we bill you at the end of month, we're gonna get the bill and pay it in March. So that's why that takes set that to trend low where payroll trends kinda brought on. And utility is a little bit closer, but not significantly. So Adriana, you know what might be helpful too? Just somewhere to put the, like, what percentage is. The chart We have it in the next one. No. Sorry. I'm sorry. I think these are

But this is test.

I'm gonna look at her.

Yeah. Oh my god.

Because you do that a lot. Yeah. Five weeks. Weeks. Yeah. So and transfers are just something we do internally. They're budgeted, and they're done pretty much monthly unless they're a fixed transfer of course. That's why you'll see that just right around the right on the market where we are. So that's, for example, a second move for information technology, please. So there's some general liability. Right?

Just on this page, shoot for salaries and benefits, given that something like overtime is a hot topic issue right in the day? Or, I I guess, what are the big breakouts from salary benefits given that, you know, all these numbers, you grab your head around, but a 108,000,000 is, like, significant lion's share of I guess, what would your recommendation be to, like, pull out in this view if you were to add three more rows so you can get some insight.

It was Peter, I'm a chunk. Yeah. Good segue. I would just queue you up. Yeah. So measure c in terms of what's in the system is shows 22.79. The consultant forecast is 19.8. That said, the presentation made on the 28 reflects that correct number so that unbalanced reflects it correctly. So we'll likely make this update in the system, but we wanted to just be transparent as to where it stands today. So as we projected measure seat, use that 19,000,000 number, we're not familiar sure. It just isn't in the system correctly. Okay.

How are we tracking on the 19,000,000?

Keep the eleven point eleven point five, and this is It's a sales tax. We're using, again, a consultant forecast of the 19 because the the exact.

So you so the 11,000,000 feel like it's on track with the 19. Yeah. Got it. Okay.

And that and there is some investment income here, so 200,000. So because there's cash in measure c, then it does receive something.

And that goes to the general fund?

It goes to measure c. Stays with measure c.

It stays with measure c.

Transfer. I just

wanna be okay.

But we tend to keep the investment income monthly. Again, salary benefits, we identified some lines were not budgeted. So we are working through that to see if we need to transfer them from somewhere else or what adjustments we can make in the salary benefits area. It's not a number of issue. It is a just kind of a budgeting issue in how this was budgeted last year.

And so the pipe and services, we're looking with the or we're doing both in the departments to see if there's some items we can close or purchase in another area because that's that's higher than you expect. So, again, we'll just keep working through measure c. We've been really focused on general probably working through measure c so that closes the bid balance. Okay. This is kind of best.

What you were looking for, I'm sure, because of salary and benefits. So, again, we've done this month by month. Backwards, even November was a three month. Three payrolls posted since we're paid every other week. But what you'll see really is in the overtime report, I saying our average serving always here because you'll see that diet. So we were all over a half million every month up until January or December even with a lot of extra, you know, holidays. And and then we just just dropped way down to January, February. We start to continue to see that. Apartments are really working, you know, in particular to keep those numbers

Well, so you're looking at, a $200,000 drop for where is that fire? Mhmm. From December to January, it went up a little bit. Thanks.

Yeah. The fire did go up a bit, but from the overall perspective, it's down significantly. I think they might have had some separations as well. Yeah. So it's not the chief service. They've got in staffing.

So we should have corresponding salaries.

Okay. Okay. So if you'd like to see more if you'd like to see more of the, for example, the base salaries Mhmm. In on these categories, we could bring in some more of those items. We did find, you know, we do the budget, something that was, like, on they were on unbudgeted lines that were just covered by salary savings. We mentioned that on February 28 with the eighth. And so we're really working to that just to budget those lines up.

So it seems like fire and other are currently trending pretty well, and then we just want to wait and see.

Employees is trending up.

He's trending well, but his number is I see. Because he's had such a big dip. I see. So he he maintains that dip over the

to close the year. Okay. Well, Okay. Yeah. Those are huge dips. I mean, like, he cut his overtime just from December to now in half. Yeah. And then from November to February.

November's, like, three people. So no. Yeah. November's a outlier.

I see.

But if you think, you know, yeah, October to February is Yeah. It's great.

Or even September to February.

Yeah.

It's

like A lot. Not because there's gonna be every because the

the shift changed, and then the.

That's right.

And, also, I mean, PA is

not yeah. Was PA is not They're making other changes the way that they're, like, doing trainings instead of having people come in on overtime. Like, so they made not just the shift change, but their policy changes.

It's having a pretty good outcome.

Sorry. Last question is do we have a general number to I'm thinking, like, about the the highlight. So if we're communicating to the public, we can understand how serious we're taking this, like, slash over time by, you know, 40% across the city, you know, for compared to last year. Do we have, like, like, top level number like that? Can

share we've on

we can. Yeah. Think, like, at

some point. But The flash number. Yeah.

Yeah. That should be helpful. Yeah. It might also Maybe we might be here about slash. But anyway Yeah.

Maybe Mike, you might wanna wait on what she'd say.

Okay. Okay. K. Whenever he gets right to present.

Yes. Okay. We'll we'll talk about It sounds like we've done you know, Paul, we were doing something talking with Mike. Sounds like you definitely Yeah. Again. Just like, yeah. What are some good talking points?

Yeah. Well, I just want people to understand. I mean, like, not everyone's gonna I mean, like, a 100 people are gonna be that most people want to be. Right? But this is a significant piece of financial risk on that.

And that's really taking the whole team. Yeah. And so yeah. I know I was nervous about this, but he's working staff at one level the time before and and see it in this way. Was really Yes.

And that's fine. Yeah. I like, even the top chart, you know, we started the year and see how quickly these expenses were starting to kind of, like, sync us. Right? Like, we went from 500,000 to 1,300,000.0 to 2,200,000.0 to 3 you know, and then, like, finally see it stabilizing, you know, and get 4.4, four point four point Five minutes.

You so much, Dianna. And for the a 100 or so people that are listening. Excuse me. You wanna say thank you,

We are preparing for the future data items right now.

Okay. Are there additional questions I have? Thank you for the yeah. I just can't say enough. I know how much work has gone. I'm just looking at couple of simple plots and tables. But for us to actually be here, it'll be a test always been testing along and see again. So just for this to become a regular practice again, it feels like it reaffirms the purpose of this committee. Like, I I was joking with couple of 48, but it's not funny for the various situation that it's like, what was the committee prior? No. Real wicked happy with the Deepgram's

Yeah. So Yeah. Okay. And so with that, we'll

post the item, and we'll move on to number. We forgot that.

So we just brought forward our calendar a few updates. So, again, we'll do the monthly year to date budget. We are anticipating that we study on council on the twenty first twenty first, so we we were at the New Year. Mhmm. We did hope to have the audit for you in April. It looks like May at the soonest, Our auditor was unable to start their next set of work until the March. So we're we're gonna push as hard as we can. We've checked to double check and double check what we've seen them. And so we will be post test at that time and then get them there as soon as possible. And we're working we'll be working on a very solid timeline on the budgets.

We'll review those items as available. Not much has changed since our last discussion, but a a huge amount of work in the background. And, you know, departments are turning around things in, like, ten days Yeah. Without complaint, lots of good questions, and we're kinda delivered. So really acknowledge the the full executive team for that.

So I want Please.

I'm just gonna say we have a like, May 12 is when we're thinking of doing our first budget work session. Okay. So if and the budget quote goes out beginning.

K.

So if there are some policy you know, we'll just be monitoring the budget process, but there might be some policy questions that may have been on a pre with you on April 15 or some restructuring. You I don't know. We'll just see how that process is happening so fast. We wanna bring you some kind of delays, especially on the restructuring because it is departments are all doing different things, staying other than that cost neutral, but there

might be something we wanna preview that. Yes.

So you're you're suggesting that you both

Yeah. I'm just not telling you

that that is something we

might add something with. If there's

some budget. Yeah. Schedule or something. Yeah. I think that last bullet in May, we bring that up to April as well just as if it's needed.

Okay.

So we'll bring that. We'll bring that up.

Okay. That's a good idea. Yeah.

Go ahead.

Okay. So I was gonna ask you, given that you're also, you in know, the middle of having a conversation with our labor partners altogether, whether you felt, in the spirit of our last holiday meeting, you talked about having some reductions in meetings to help staff do their work. My question would be, what's more valuable to staff specifically in this Is it having people Did you tell me? Variations on Yeah.

It's a good question. Are you okay if we kinda make that

judgment call?

Calls here. It might help us

to get There's just some monthly grants we could just set up on.

Please Yeah. Okay? Yeah. I'm okay with

I think that's a good idea. I mean, if there's some real b budget items or the fee study

we wanna get before you,

then let's keep it. If we don't feel like we're ready for that, then maybe we cancel and

we'll just sign up. Okay. So we can defer to SaaS.

Appreciate it. Alright. Thank you. It

is gonna be the busiest month.

Yeah. Yeah. I believe it.

Congratulations.

K. So they will they will put it as a we'll keep it on the calendar. You'll cancel it. Yeah.

Yeah. Yeah. Think so. Okay. It is nice to talk to you. Think suits what they want to do that. Got it. Thank you. Of course. Thank you.

And do have any other thoughts on that? Alright. We'll move on to committee member and staff announcements. Anybody have announcements? K. Seeing none, we'll be calling you with. This meeting is over at Yeah. Next meeting is Wednesday.