City Council - Regular Meeting

And I say, you know,

Jennifer Thompson, can you please check your mic?

Yes, can you hear me?

Yes, it's just a little low. We'll turn it up on our end. Thank you.

We're going to have to have a discussion. I am following orders from the boss and no catch. Maybe the conversation will change since then. I didn't always like to listen to them. Well, that's a good lesson. Absolutely. We'll have to learn from her and ask her. Why don't you pick that chair? Okay, I think we're ready. Are we ready?

We are. Okay, welcome everyone. Tonight, we're here for a regular meeting of Hollister City Council. Today is June 15, 2026. It's 530. Can we get a roll call, please?

Council Member Pache.

Present.

Dr. Resendez. Council Member Morales. Vice Mayor DeAnda. Here. Mayor Stevens.

Here.

Thank you.

Vice-Chair Deanda, can you lead us in the Pledge of Allegiance, please?

Yes.

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, with liberty and justice for all. Thank you.

Okay, thank you for that. Okay, so we are going into public input section of the agenda. So this is a time for anyone in the audience to speak on any item that is not on the agenda but falls within the jurisdiction of this council. Please complete a speaker card from the back and bring it to the city clerk. When your name's called, come to the podium, state your name and city for the record, and then speak to the council. If you're joining via Zoom, then press the asterisk and the nine. If you, I'm sorry, if you were joining us via Zoom, use the raise hand icon and you will be called upon. And then if you're joining us by cell phone, it's asterisk nine. Each speaker will be limited to three minutes with a maximum of 30 minutes per subject. So please note that law prohibits us from speaking to any item that is not on the agenda. Do we have any comments for this section, City Clerk?

Yes, Mayor. John Casey?

Step on your toes. Hold it.

Well, that fell into the call there. Good evening, Mayor and Council. I want to speak tonight about something very simple but very important, the credibility of the City's own rules. The City of Hollister has adopted a Code of Ethics and Conduct along with Municipal Code 2.04.020, which sets expectations for how elected officials conduct themselves, not just legally, but ethically and professionally. These are not symbolic standards. They involve how you treat the public, how you interact with staff, how you engage with one another, and how that authority is exercised. And importantly, these standards are meant to be acknowledged that officials have received them, read them, and understand them. I recently submitted a Public Records Act request asking for copies of those signed acknowledgements. As of what is publicly available today, I've not been able to locate records showing that some current officials, including the mayor and certain council members, have signed such acknowledgements. If those records exist, I would welcome their release. This matters because accountability starts with acceptance of the rules. These same rules create a self-regulating system. They allow the council to assign or remove committee roles, determine leadership positions, including the vice mayor, impose sanctions, and enforce standards of conduct. Those are significant powers, but they depend on a basic premise that those enforcing the rules have first agreed to be bound by them. When that foundation is unclear, the public is left asking a simple question. If the city's own rules are not clearly followed at the top, why should the public have confidence in those rules? There are also broader concerns about process and transparency. For example, there have been reports that compliance with oversight efforts, including grand jury processes, have not always been straightforward as the public might expect. Whether those issues are resolved or clarified is important, but they underscore the same point. Process matters. Now, to be clear, this is not about alleged illegality. It's an oath of office that established that authority. It's self-governing. These XX rules exist for a reason. To guide conduct with a law alone is not enough, especially in situations involving judgment, discretion, and public trust. We've already seen situations in this community where those gray areas matter. This is precisely when ethical commitments should be clear, documented, and consistently applied. So tonight, I'm asking for something straightforward. Transparency, make those records publicly available if they exist. Consistency, apply the same standards internally that they are applied publicly. Accountability, either follow the rules that have been adopted or reconsider them openly. I don't trust that the council member that's not here would ever abide by those rules, but I had hope that the new members of the council would. Because in the end, public confidence is built not just on authority, but whether that authority is exercised within clearly accepted, consistently followed standards. Thank you for your time.

Thank you, Mr. Casey. No more speakers? I have no more speaker cards. Okay. Thank you. Okay, so we're going to move on to the consent agenda. And there is one item that we are moving to open session. Is that correct, City Clerk?

Yeah, we will be holding a public hearing for item 5.3.

Okay, so 5.3, which actually is a resolution adopting the 2025 San Benito Urban Water Management Plan will be moved to open session. Okay, great, thank you for that. Okay, so other than that item, do any members of the council have any brief questions or comments on the consent agenda? Okay, not seeing any. Let's go to public comment on the consent agenda items.

I have no speaker cards for consent.

Okay, so I'll bring it back to the council. Can I get a motion or any further discussion?

Motion to approve consent agenda items.

Second.

Second.

All those in favor?

Aye.

Aye. Aye. Excuse me. Any opposed? Okay, so consent agenda items have been adopted. So we're going, let me check with you. Are we going to go right into the first public hearing? That's what we're going to do first.

Yes, we can do item 5.3.

Okay, so we're going to go right into 5.3. So can we have a staff report, please?

This item was prepared from our public works team. Are they in attendance?

I'll go ahead and present, Madam Clerk. Thank you. Yes, so this is an administrative step that is taken to make sure that all the jurisdictions that work with San Benito are aware of their urban water management plan. These are the long-range strategic plans that various utilities prepare for us, for the city of Hollister, with the water, with the sewer. And so this is part of that administrative process. This is an opportunity for the public to speak up if they have concerns about the master plan that is being presented to us in other member communities.

Okay, thank you for that quick staff report. Any questions from the DIAS? Okay, not seeing any, let's go to public comment. Do we have any speakers on this item?

Can we open the public hearing?

Oh, we'll open the public hearing. Thank you. Any speakers for this item?

And I have no speakers for this item.

Okay, so I'm going to close the public hearing on this one and then come back to the dais. Any other quick questions or comments on this item?

I have some questions since we pulled it, basically. So the source for our water, can we remind the public where the source of our water originates from? How do we get it? Where do we store it? And when we test the water, where are we testing the water? So where do we get it? And... Just take us through that flow, if you will.

Sure. Council members, Madam Mayor, members of the public, thank you for asking. Utilities is one of those things we don't think about until there is a problem, and yet it's a fascinating process. For the young people who are here, it is the career of the future, especially in California, because water is more valuable than gold. So where do we get our water? There are two sources. There's surface water and there's groundwater. Surface water comes from the Central Valley Project, CBP. The Central Valley Project is, for all purposes, the blood of the state of California, given that water is not the Pacific Northwest. Let's just put it that way. So our water directly comes from the Central Valley, and it resides at the San Luis Dam. So it sits there until we're ready to use it. When the water is pulled, then water is treated because obviously the water is not clean and needs to be treated. The water is managed or owned just for the purposes of this conversation by the San Benito Water District. then it is treated, and it is treated by our partners at Sunny Slope Water District. Once the water is treated, the water then is conveyed through our systems to, when you open the faucet, the water comes out. It is treated so when you open the faucet, you can drink it. Contrary to some belief that our water is not safe, it is safe. If it weren't safe, we wouldn't be able to provide it. So that's the majority of our water. We also have groundwater, which comes from our wells. It comes from the ground here in the city of Hollister. Groundwater is much cheaper because it doesn't require a dam. It doesn't require the movement of the water from the Central Valley to our area. It is here. And we get it through wells as part of regulatory conditions. And we have specific tests that we have to do on water on a daily and or periodic basis. When I first arrived, I think it was probably February, March, we had received a letter from the state indicating that we had too much chromium. The context that I think got lost is that the levels accepted by the state of California had been reduced significantly. So Mother Nature had it changed. And please understand that chromium comes from Mother Nature. This is not here in Hollister, not in other places, but here in Hollister, we don't have an industrial problem. We have Mother Nature creates chromium. And unfortunately, the state of California lower what it considers safe. And so suddenly we went from being normal to now being under a watch from the state of California because of mother nature. So how we deal with that is through a blend. We try to blend, obviously, the more Central Valley water you have, the better because you don't need as much groundwater, which does have chromium 6. And I think that that was the question. So generally speaking, when our rate payers pay for water, they are paying for the water that is purchased from the Central Valley. They are paying for the water that we have here in Hollister through our wells. They are paying for the water treatment of that water. They are paying for the conveyance of that water.

And you mentioned the blend of the surface to groundwater. Do you know what that blend is?

Currently, if a member starts me right, it was 70-30. So 70% Central Valley, 30% groundwater. For Sunny Slope, it's 80-20. 80% Central Valley, 20% groundwater. And the difference, quite frankly, is price. If you think about any commodity, the better the quality, the more expensive it is. That does not mean, so let me be as clear as I possibly can, it does not mean that our water is dangerous. You can drink from the water faucet. I drink from the water faucet on a daily basis.

Well, happy day. It seems like, you know, it's good to hear that the what chromium six that we do have in our groundwater is not coming from an industrial site. It's coming from Mother Nature. When we test it though, are we testing it closer to the underground storage facilities or are we testing it downrange when we do that 70-30 mix? Does it make a difference?

We test from the source because that's where the water is. One could claim that it does make a difference because if you test farther from the source, potentially you could have diluted the chemical, which is why it's important to test as close as you can from the source.

okay and i i guess probably my last question but it begs to be asked like who made the decision to uh i mean you said something about cost and we don't have a ton of nickels to rub together here in this uh city of hollister um took a lot of years to get to this point and it's going to take us a while to get out of the financial situation we're in but uh It sounds like it was due to cost, but do we know why or who approved the 70% surface water, 30% ground that's resulting in slightly higher C6 levels that occur naturally?

Indeed. I mean, a lot of it deals with historical practice. But let me put a price tag. It is expensive. So right now, given our blend, we are spending $4.6 million purchasing water. Let me repeat that, $4.6 million purchasing water.

And that's annually?

Yes, sir. Every year. It could go up, it could go down, but you're looking at four mil.

Okay. Okay. And we're going to talk about rates later, but it seems like the rates have been going up for the Rotter that we've been purchasing. I mean, $4.6 million sounds like a lot to me. I'm just a simple guy. $4.6 million, I really feel like putting my pinky to the cheek of my mouth here when I hear numbers like that. But has that been going up over the last, you know, since 2018, 2017? Yeah.

So San Bernardino, San Benito Water District is no different than any other utility district in the sense that they have rates, and the rates are supposed to capture the costs, all the costs, personnel, O&M, debt, CIP, reserves, admin, and I think I have them all. So it is those rates that determine how much is going to be. This year, we actually saw a decrease. Believe it or not, the 4.6 is at a discount because last year was a little bit higher. And so each year, they have to take into consideration many factors, but one of them is the availability of water. If we were to have one of the dry spells that we tend to have here in California, I've been gone for a while, but I do know that in 2015, I think was our last dry, dry, dry year, rates went through the roof, as you may recall. And so, again, if we were to have another drought, official drought, then the pricing would go up accordingly.

Okay. Well, that's all I have for now. Thank you.

Okay. Thank you. Questions? Council Member Morales, go ahead.

Yes. So this report... And I because I don't I don't want to miss anything. And a lot of this information is really technical, not my area of expertise. So this report, or what it what it does, it basically updates the codes, right? So it updates the codes, it includes San Juan Bautista, and it talks about the conservation efforts. What I think, what I'm also wondering is, did we do an analysis of, since we're looking at statutory or code updates, are we, how does that impact the city of Hollister? And, How does this report and the conservation or the building of the storage, to store water? Is that the wells? No, it's not the wells. The dam. The dam. And how does that play into this?

So the urban water management plan is supposed to manage the utility. And this could easily be sewer. This could easily be integrated waste and so on. These are the regional efforts that ensure that planning that is done around the utility, that they are consistent, that they are relevant. And so it serves as a glue. for the different activities that the utility has to do. Especially because in our particular case, we have three main partners. Us, because we do produce water through our wells. We also convey the water through wells. Sunny Slope, because they do treat it. And then Benito County, because they are the ones who have the water. They're the ones who have the water rights in the state of California to secure the water that we need.

So will there be a later analysis in terms of kind of how does this impact the city of Hollister with kind of all the other elements that are on like separate tracks, but hopefully towards the goal? Because we're talking about, I mean, the report talks about not only the codes, right, but the conservation efforts. Yes.

This document is, is part, should be part, and again, historically, I'm not sure how we've used it, but it should be part of our own master plan. The master plan documents are often put in shelves, but the reality is that they do serve a very important role. The master plan is what sets the tone, it's the blueprint for what a jurisdiction is doing with a utility. So in this particular case, we have to incorporate the changes that are at the regional level to make sure that our plans are consistent. If you think about it from this perspective, our zoning. Our zoning is at the microscopic level of a much larger discussion, which is the general plan. The general plan sets the tone. The zoning is very specific. So this is no different. You have a regional plan that tells you the big picture for the region. And again, especially here in California because of water. And then the utility master plan is the specifics on how you go about reaching those goals and deploying your resources.

I guess my question is, are we going to get that level of analysis at some point later on? With the water master plan, yes. Okay. Thank you.

Go ahead.

I just have one last question. Hey, you mentioned that the water rate is an enterprise fund. Can you explain to the public what an enterprise fund is and how this one's doing?

Thank you, Council Member. Yes, and I do think it is important to emphasize and repeat some information because we deal with it every day, but members of the public, not necessarily so, and so I do think it is important. In the state of California, again, this is not the city, this is not the county, this is the state. In the state of California, we have a very specific way of doing accounting, and one of them is the creation of what we call enterprise funds. The best way to think about an enterprise fund is that it pays for itself. So if you produce a widget and the widget is an enterprise fund, that widget and all the process that goes into making the widget should pay for itself, meaning no property taxes, no sales taxes, and so on. So water, right now we pay $17 base, base water rate. That base rate is supposed to take care of all the elements involved in From the moment we purchase the water to the moment you open the faucet and all the steps in between, as we said before, one, we have to buy the water. We have to store the water. We have to treat the water. We have to convey the water. And so all of those steps require resources. They are not free. And so the rate is supposed to capture those costs. That's an enterprise fund. It pays for itself. The second question is, how are we doing with water? Not well. Since 2018, we have been running a deficit in the water fund. This is not unique to Hollister. Many communities have the same problem. Nobody wants to increase rates, especially for water. Water is life. So it is very difficult. for elected officials and staff to sometimes make those decisions. However, water is a commodity. It started this. It's like gold, especially here in California. So if the rate payer doesn't pay for that widget, in this case water, then the general fund pays for it, which means that, for example, a resident that is paying Sunny Slope for the water, because in the city we have two districts, City of Hollister and Sunny Slope, two different conversations. We, you, I, only have jurisdiction over City of Hollister water. So if you live in a Sunny Slope district, you are paying for your water directly to Sunny Slope. But if water is not being compensated accordingly by other uses, it impacts your rate. So going back to your question, how are we doing? Not too well.

So I've heard you throw out like dollar figures per year of like 1.5, 1.6, 1.8. million dollars per year of general fund monies being spent to cover how under operated, we're not operating as an enterprise fund. And you said something where 1.5 to 1.8, am I close on those numbers per year we're taking out of the general fund to make this fund whole?

Yeah, so in fact, let me, you had asked about the enterprise fund. When the auditors came to the office, six weeks ago i would say two months ago something like that um as you know we're late in our audit so we have an audit team that is meeting downstairs i had a conversation with the lead auditor who quickly corrected me and said anna in the city of hollister water is not a utility it's not an enterprise fund because an enterprise fund brings money and your water doesn't bring money so you can call it an enterprise fund if you want but from an accounting perspective it is not So one rule in government is someone always pays. Even when you hear, oh, going to the library is free. Actually, it is not. It is covered through property taxes that the county assesses and collects. Anything and everything the government does, somebody always pays. So then the question becomes, all right, so if we are not charging the proper rates for water, then who's paying for the difference? And the answer is the general fund and or other funds that have to lend the money in order for us to continue buying, storing, conveying, distributing the water.

Okay, so I'm not going to beat people up about this.

Can I just check in really quick? So the urban, this plan that we're talking about does not include the rates, right? Rates are separate. So I just want to be really clear. I just want to check in with Council Member Pichet because the rates are separate. I mean, I think this is just really about looking at the resource and the reliability of that source for five years to come, 10 years to come. Remind me what the number was. I can't remember. I think it's 10 years, right? So I think that's what this plan is. I just want to just clarify that, that the cost is something separate, something that we will be addressing on another agenda item on a later date.

Copy that.

Okay. Okay. With that, any other questions? Any questions on this side? Any questions over here? Okay. And that was just my own. I just wanted you to remind us, like, I think it was every 10 years that this happens. And I think part of this is just really to look at what are... what is what does our water source look like like how abundant what kinds of things that we need to be worrying about in the next several years so that we're sure that we have sufficient supplies of water and reliable supplies of water for years to come and then they re they reevaluate this periodically so that's really what this is about okay having said that um let me bring it back to the dais this is uh calling for a motion to approve So can I get a motion from someone?

I move to approve.

All those in favor? Aye. Any opposed? None? Okay, so then we'll move on to our next item. Okay, so we're going to go to 6.1, resolution approving a two-year renewal of cannabis regulatory permit, current conditional use permit, and waiver of fees for Monterey Bay Alternative Medicine Hollister Incorporated. Can we get a staff report, please?

Yes, Madam Mayor, we have different members of staff who will provide information. Okay.

Good evening, Madam Mayor and members of the City Council and members of the public. My name is Leah. I'm the Administrative Analyst. And I will be presenting based on the report tonight. And with me, I have a couple of gentlemen here who would like to stand up with me as well. They would be open to questions as well. And I will continue. I am here this evening to present the staff report regarding MBAM Monterey Alternative Medicine Hollister Incorporated. As reflected in the report before you, The permit renewal for this operator has remained unresolved and in administrative limbo for several years due to a combination of procedural and operational circumstances. Tonight, staff is pleased to present a path forward in recognition of the extreme and unique circumstances surrounding this matter. Staff is suggesting approval of a two-year renewal, the cannabis regulatory permit, along with a concurrent conditional use permit, and a waiver of fees as outlined in the staff report. Staff believes this suggestion provides a fair and practical resolution that allows the city to maintain appropriate regulatory oversight and compliance moving forward. So we are available for questions if you all have any.

Okay, thank you for that, Leah. Any questions from Dice? Questions on this side? No. Okay, and then can you just clarify for us and for the public the reasoning behind the waiver of the fees? And maybe I will, it doesn't really matter to me who answers that question, the city manager, Leah.

Sure. So we are recommending that the fees be waived in light of a number of complications that have occurred for a number of years. The applicant has been paying his fees since 2020, if my research is right, you can correct me, even though he was not able to open up the business. And the obstacles for that opening were... in our hands. There were some things that we could have done to facilitate, to better understand the problem. And we finally realized how to fix something that, in fact, did not need to be fixed. Mr. Barriessa got caught in the middle of a couple of other discussions that actually had nothing to do with him. And so now we're just trying to provide some good customer service by owning the fact that there were some, that there have been a number of delays that were completely on the hands of our city.

And to clarify, he's been paying since 2018. Okay.

Okay. Thank you for that clarification. Okay. Any other? Okay, let's go to public comment. Do we have any speaker cards on this item?

We can open the public hearing for this one.

The public hearing? Any speaker cards on this item?

I have no speaker cards for this item. Okay.

A close of public hearing on this item. Then I'm bringing it back to the diets for action.

I'd just like to make mention of one thing. People have come up here and said we need to have ethics and transparency. I couldn't agree more. Ethics and transparency in local government is absolutely key. And community involvement is massive as well. But admitting when you're wrong or you've made a mistake or you've delayed somebody from opening up a business that could help people. that's a really honorable thing to do so i think it's kind of in line with what mr casey was talking about but um i'm in favor of waiving this person's fees because seems like we might have made a mistake and we'd like to own up to it that's all i've got okay okay

I think for in the spirit of can you just share between 2018 to now what the fees have been versus what the fee waiver amount is just so that there's clarity in that understanding? Sure.

I can speak as to the waiver amount. So that would be $7,636. So those are the permits that would be waived. And if you all would like to speak to the past.

So fees every year. So is the $7,636, is that what is paid every year?

Yes. So I have the schedule actually here. That is for the regulatory permit renewal. It is seven. So it's $7,103 plus $533. Okay. So...

Occupant has been paying 50, almost $50,000 and we are approving a waiver of $7,636 like in good faith, right? Correct. Okay. Just want it to be clear that it's not 100%. It's a small fraction of that.

Correct. Okay. Any other questions or comments on the days? Okay. So I'm looking for a motion.

Can I ask one more question? Are we close to opening up this business? Is this getting close? The things that we've owned up to, we're fixing, we're waiving the fees. You paid the 50, we're going to waive the 76. How close are we? This is going to be the second one. There's the one on San Felipe. Is it higher levels? There's one that we've got. Is this going to be the second one?

This is specifically for MBAM, so Monterey Bay Alternative Medicine. And they are looking to open September of 2026, so in a couple of months. And it is the second one.

We only have two licenses. This is the second.

Is this the one at the old Fastenal site off of San Felipe? Yes. Oh, okay. Yeah.

And if I'll just remind the rest of my council, we heard a presentation on this several meetings ago where there was concern that we have the ability to authorize two permits. One was being taken up by this and the delay, because of the delay, they weren't able to open up, but we also were unable to authorize a permit for anybody else. Therefore, the delay not only cost the the owner the operator some stuff and some issue there was some issues but also the city because it was not being utilized we weren't able to take advantage of any sales tax because we only have two permits that are allowed so this will be a benefit it'll be a win-win basically the city will then be able to begin to uh recoup some sales tax from this and the owner operator will be able to open their business and operate as a business owner. So yeah, just a reminder of that. Okay, so now any last minute questions, comments? If not, I call for an action from the dais.

Move to approve.

I'll second.

I'll second.

All those in favor?

Aye.

Any opposed? Okay, thank you. Thank you, gentlemen. Appreciate you. Okay, so we're gonna move on to item 6.2, status of vacant positions as required by AB2561. So can we get a staff report, please?

Yes, good evening, Madam Mayor and council members. My name is Stephanie Brown. I am the Human Resources Officer here with the city, and I'm here to give a presentation on Assembly Bill AB2561. You may remember this presentation from last year, but as a quick refresher, Assembly Bill 2561 requires local government agencies in California to publicly report on workforce vacancies, recruitment efforts, and retention challenges prior to budget adoption. The purpose is to increase transparency in public sector employment, identify and address staffing gaps and critical services, and promote public awareness of recruitment and retention efforts. So these are our recognized labor units. Service Employees International Union, also known as SEIU, is here first. They are made up of professional, paraprofessional, technical, clerical support staff positions. Currently for this fiscal year that we're just about to wrap up, we have 53 budgeted full-time positions, two vacancies with a rate of 3.77%. Our Hollister Firefighter Union, also known as HFFU, is made up of fire battalion chiefs, captains, engineers, firefighters, fire inspector, and a deputy fire marshal. Currently, we have 44 budgeted FTEs, two vacancies with a rate of 4.55%. And we also have the Hollister Police Officers Association, also known as HPOA. This is made up of sworn police sergeants, police officers, non-sworn clerical records and support staff, and animal control staff. This is currently budgeted at 52 FTEs with 10 vacancies with a 19.23% vacancy rate. Also noted on the chart or below the chart, rather, is the city total. So we do have 189 budgeted FTEs currently, 22 total vacancies, and that gives the city a total vacancy rate of 11.64%. So recruitment and retention efforts, just to name a few, recruitment efforts, we have equivalency ratings that we use as needed. We have regular job postings on city social media platforms and website. Recruitment software, we use NeoGov, which was implemented in 2023. This has continued to improve efficiency for not only HR, but our applicants and our departmental hiring managers. We have job-specific career boards that we utilize. A lot of them are at no cost to the city. We send out email blasts to other agencies, also at no cost. Job interest cards are available to applicants where they can actually subscribe to positions or to areas of work where they'd receive an email. Once a position opens up, it's automatically received, which is a nice benefit to NeoGov. We do have customized job flyers for positions. And then we do also have sworn police officer specific recruitment and retention bonuses that are captured in their MOU. And then retention efforts. We do have competitive compensation and benefits benefits. Our education and career development is offered through tuition reimbursement, professional certification pay, special assignment opportunities, flexibly staffed positions, longevity pay for long-term service, market salary studies and adjustments when necessary. And then we also offer exit interviews to all of our departing employees so that we can enhance the experience of current and future employees here at the city. New hires and promotions since July 1st of 2025 has been 19 full-time staff. So some recruitment obstacles and challenges, we also have to notate these as well in this report. So we do obviously receive candidates that apply for positions with us, but don't necessarily meet the minimum qualifications of the position. Also, sometimes we have non-responsiveness from those candidates. Voluntarily, candidates will withdraw from time to time or fail to pass required pre-employment testing. Maybe they're incompatible with city or department standards. They might fail to pass the pre-employment background check process. And then sometimes also we do experience a lack of capacity here in the HR department. And then the time to fill is influenced by sometimes open competitive, or I'm sorry, open continuous recruitments. So those are just open until filled. We do have multi-step testing processes for some specialized positions, such as our fire positions are pretty specialized in the testing process. Applicant availability to complete pre-employment processes, the time needed to negotiate hiring terms, time needed for them to give a resignation to their current employer. If we utilize the active eligibility list for a position that, you know, shortens the period to fill. And then also the academy start date when hiring police officer trainee new hires because they only offer the academy twice a year. And that I'll leave with questions.

Okay, thank you, Stefan. You're welcome. Questions? Questions on this side. Go ahead, Council Member Morales.

Yes, thanks for the report. Sure. I just have two questions. Can you tell us, I know last year we eliminated a lot of vacant positions.

Yes, 31 positions.

Can you tell us if we look at the vacant positions and the vacant positions now, what the percentage will be? And then are there any statutory requirements in terms of ratios that we also need to be mindful of?

Yes, so last year I do have the number. We had 222 budgeted FTE this time last year, which included 39 vacancies. We did cut, sorry, let me first tell you, the vacancy rate at that time was 17.5% for the full city. We did, right shortly after the presentation, with budget adoption, we eliminated 31 vacant positions, which left us with eight vacancies at the beginning of this fiscal year. And then again, just to recap, 189 currently budgeted full-time positions, 22 vacancies with a vacancy rate of 11.64%. There are additional requirements if a represented group has a vacancy rate of 20% or higher, we do have to give additional details on our efforts to recruit for those positions. And then also, we do open up the presentation to those groups to come up and present on their own as well.

So last year, we had just about every single group come and present, which tells, or I don't remember the exact numbers, but then it would be that every single group had 20%. I think where I'm getting is if we, as attrition, as people retire or separate from the city, and we're holding those vacant positions, and we're not analyzing statutory or requirements to do the job function, Then if you have an organization or division that has five people and then through separation, you have one person left, it doesn't necessarily mean that you're going to eliminate the four, right? Hopefully there'll be an analysis of like what the work entails or the statutory or legal requirements, what positions you're going to fill.

So I will say last year we did have the HPOA was at a 20.7% vacancy rate. They had 12 vacancies last year. So they, I'm not sure if they presented, but we did have higher numbers. I will also say that historically, a lot of agencies have used vacant positions to help balance their budget when going through the budgeting process. And that is one of the points of AB 2561 is to kind of help clean house and be more transparent and have a budget actually reflect what it is meant to reflect and not just kind of lean on those vacancies. So that did happen last year with the 31 vacant positions that were eliminated. A couple positions were added, as you are aware, because they went through either consent or public hearing items. But that is kind of more so the point of this assembly bill is to create more transparency.

So I guess my question is, if last year, and I'm just going to use HPOA, was at 20% or close to it, and this year we have another vacancy rate, right, of 19.23%, so for two years in a row, we're looking at, from what this tells me, is significant. You don't have enough people to do their job, right? And so what is...

Yeah.

What's going on?

A lot of their vacancies. So right now we have 52 budgeted positions, 10 vacancies. A majority of those 10 vacancies are made up by sworn police officer vacancies. That is a difficult recruitment to run. It's a difficult position to hire for. We did hire a academy grad police officer. Actually, today was his first day. So we are continuously making efforts to hire more sworn police officers. That is, we have two open continuous recruitments and we're actively trying. We have one trainee that's in the academy right now. He's set to graduate at the end of the year and then he'll actually be going to FTO and being sworn in and We'll be able to be on the streets as well. But yeah, that's a real issue that's not just the city of Hollister's issue. It's kind of an industry problem right now. A lot of agencies are having a hard time hiring sworn police officers.

I think what I'd like to see moving forward is on numbers that are this large, that we have a quarterly report back on the recruitment efforts.

Sure. So Councilwoman, members of the Council, Madam Mayor, recruitment has, we've been able to identify that as a major problem in public safety. Let me be very specific. Both for police and for fire, both department leaders have been very eloquent and very clear that recruitment is a problem. In the slide, it shows that lack of capacity in our human resources department is important. The human resources department, please let me say, is two and a half people, and this is a large city. So it's not a reflection of people's competence, not at all. I know that, for example, Stephanie sends emails at 11 o'clock at night, so I know she works the long hours. But we definitely have challenges when it comes to recruiting. The city does very traditional recruitings. I would say outdated type of recruiting. And we need to just think differently about how we do this. There are very specific things that recruiters do. This is why we pay recruiters $40,000 or so a year. I know the city has not paid me one penny to recruit anybody because that would be illegal. But there's a reason why there's an industry called executive recruiters. It's the manner in which you do it is where you actually recruit. You don't just put it in the universe and hope for a response. You have to literally have a network and you pick from those people. And so those are the types of steps that we just simply do not have the capacity to do. Having said that, we do have an HR director. So it is my pleasure to announce that July 1st, we would be joined by our new human resources director and IT director, who's... Number one priority will be recruitment in public safety. We have many priorities, but that has to be one. Tomorrow, we will be joined by our interim fire chief, whose number one priority is to bring six new firefighters between now and December. Those are actual numbers. This is not a pie in the sky. I hope you get there, chief. These are requirements. These are conditions of employment. In order for you to be here, you need to deliver certain things. And so recruitment is one of them. I'm working very closely with Chief Reynoso. and trying to figure out how we can start attracting new blood to the department, but also how to retain the people that we have. And so it is an effort, and yes, indeed, we should be bringing to you a report, because these two departments, it is a priority for us to increase their capacity, along with the capacity of human resources.

Okay. Okay, so let's go to let's open the public hearing on this one.

Yes, Frank Garcia. Any comments? Yeah, Frank Garcia.

Sorry, Mr. Garcia, go ahead.

Robbie, can I get my four seconds back? Good evening, Mayor of City Council. My name is Frank Garcia. After reviewing the staffing plan, I have more questions than answers. I understand the City's goal is to avoid layoffs, and we appreciate that. However, when I review this document, I see multiple positions listed at 0.00, and I no longer see storm and streets departments shown the way they have been for years. That concerns me. My concern is not consolidation. Departments can be reorganized. Operations can change. My concern is understanding what these changes actually mean. Let me give you an example. Storm and sewer have worked side by side for years. Sewer assists storm, storm assists sewer. The two groups understand each other's work. They have developed expertise and experience to support one another and have built a system that already works. That is why I'm struggling to understand how these changes improve what is already working. When employees see positions at 0.00, departments that no longer appear the way they have historically, and functions being moved around, questions naturally follow. Are positions being moved? Are they being vacant? Are they being eliminated? How do storming streets fit into the future? The document does not make that clear. What makes this especially difficult is that employees have already experienced months of restructuring and uncertainty. Because of that, many of us are trying to understand not only what is changing today, but what these changes mean for the future. Many of us plan to be here for years. Many of us hope to retire from the city of Hollister. We care about this city, the work we do, and the departments we serve. Some of these departments perform bargaining unit work. Some of these positions are represented positions. That's why this matters. Employees are not just looking at numbers on the chart. We are trying to understand what these changes mean for the future of the work we perform and the positions that provide community service to this community. That's why understanding these changes matter. I'm not asking for speculation. I'm asking for clarity. Before this budget is adopted, I would appreciate a clear explanation of what the positions listed at 0.00 represent, where storm and streets departments fit into this plan, and what these changes mean moving forward. Thank you.

Thank you, Mr. Garcia.

Other speakers? I have no more speakers for this item.

Okay. I'm going to close the public hearing, and I will bring it back to the dais for any other questions or comments.

I do have a question. Go ahead, Council Member. Was it Stephanie Brown had mentioned that Compensation is competitive. I mean, I probably shouldn't be on there, but when people have birthdays, I chime in on social media and wish people happy birthday. And while I'm scrolling around, it's floating around out there that in public safety specifically, we're not that competitive with other jurisdictions as far as our compensation. I could be wrong. This is all speculative and it's all in social media. But like what percentage of like, do we have a comparable city? Do we compare with other cities like also so unique? Yes.

So council member, Madam Mayor, members of the council. Yes, indeed. We actually did do a study. The city commissioned a compensation study probably last year because we received you all received it. Not sure exactly how that was communicated to you in January. So we have a compensation study, which we then use to further analyze our multiple classifications The seat of Hollister struggles with lack of a salary philosophy. And so that's why we have multiple, for example, for directors. Instead of having a director classification, we have a classification for every director. So you have salaries all over the places. So we did a study. We used the same compensation study that you commissioned from Avery. Ralph Anderson? Oh, from Anderson. Yes, from Anderson. And we looked into the specific comparisons to other cities around here. So we produced that table just to kind of see where we are. We're not bad. Some positions are a little bit less. Some positions are a little bit more. But the statement that we are not competitive, that is simply not true. Our salaries are competitive. Our benefits are more than competitive. So overall, if it's just money that you're looking at, we are an employer of choice.

I would like to add to really quick that if you compare base salary to base salary with other agencies, there might be times where it looks like our agency pays less. That's when HR encourages applicants or candidates that have already applied with us to look into the MOUs of the position that they're applying. applying for and see the other incentives that would kind of, you know, stack on top of their base salary. And then yes, our health benefits are very generous in this region.

Okay, when was that study or the compensation study? When did that come out?

The study has January 2026 on it. I'm not sure, Stephanie, if that was ever shared with the council. I have no idea.

Was it 26 or 25? 26, I want to say. It was January this year.

I would have to look.

Okay, other questions? Thank you. Okay, do we need to take an action on this or are we just receiving the report? We're just receiving the report, is that right?

Just the report, correct.

Okay, great. Okay, I think we're good then. Thank you, Stephanie, appreciate that. We're going to move on. Okay, so next item, let's see, we're at 6.3, a resolution for the city council of the city of Hollister adopting fiscal year 26 to 27 fee schedule and delegating authority to the city manager to make minor modifications to the fee schedule as necessary throughout the fiscal year. Can we get a staff report?

Yes, I will be brief. My understanding is that the city has historical handle fee increases in this manner, in which we ask the council to delegate that authority to the city manager to make changes to fees according to the inflationary rates that we have in our regions. So once you provide me with that authority, we will look at our fees and adjust them accordingly due to inflation. Now, one particular set of fees does need to be highlighted. As you know, our construction partners have been telling us that it's very expensive to do business in the city of Hollister. And so we had asked a couple of team members to look into this, and I will just let Mr. White speak to the fees that our construction people have to pay, which indeed are higher than they should be. Mr. White.

Eric White, Finance and Special Projects. Good evening, Madam Mayor and members of City Council. Primary changes before tonight is adjustment of city's building permit fees. If we can pull up that please. As can be seen in the permit comparative analysis, City of Hollister is 62% to 85% higher than cities within the regional area, which shows how high current building permit fees are. I now also ask you to look at the user fee schedule, which you should all have in front of you. which will show you the changes in the comparative analysis that was done. So with the assistance of the current building official and finance staff, a cost comparison analysis was completed comparing Halsar's building fees to those of neighboring cities. And similarly situated jurisdictions, staff also reviewed city's current fee structure and the costs associated with providing those building services. Based on that analysis, staff identified opportunities to realign building permits to better position the city within the regional market while maintaining appropriate level cost recovery. The recommended changes are intended to make Hollister more competitive and encourage continued investment and development within the community instead of having them go to our regional partner cities. The fee schedule also includes a 3.8% CPI adjustment to applicable city fees to account for inflation and maintain the city's overall cost recovery efforts. I am available for any questions.

Just to give you an example, if I can bring your attention to the fee schedule, there's one in particular that I really like. We are in California, so the reality is the million dollars is jump change in California. If you look at number 75, it says... fee summary for a building permit for an asset that goes from half a million to a million currently is $18,000 plus $24 for every thousand. The proposed fee is $4,236. plus $5.80 for every $1,000. Let me repeat, we've gone from $18,000 to $4,000. That gives you a sense of how not competitive we have been. When we have fees that are that high, of course people would rather go somewhere else or simply not do anything at all. Now, this is probably one of the better examples. Make no mistake, our fees are going up for the most part. We are, however, making adjustments. So as you can see in those graphs, we can be more competitive with the other cities, with the city of Marina and Monterey and Salinas and Gilroy. Clearly, we are not anywhere in the vicinity of those cities, which is... makes folks go somewhere else instead of coming here. We want to be competitive. We want people to do business with us. We want to increase the number of customers that go through the door and make sure that they feel that the money that they're paying is fair.

Okay, thank you for that. Questions, comments, questions from the side? Questions, go ahead, Council Member Morales.

Well, you know, I appreciate the analysis. Did this go? So is this a hearing? Is this a public hearing? Okay.

And then are we going to have two public hearings or this is it? This is the only hearing that I'm aware we have. So if you would allow me, this is somewhat of an unusual way to do business. I will tell you what I'm used to when it comes to fees. I'm used to bringing a book of fees to the council after we've gone through the Chamber of Commerce, who gives us input, then we bring it to the council, we have at least two to three conversations, and then we adopt. I'm not used to receiving the delegation of power. But I want to be respectful of the way we do things in-house.

So the reason why I ask is because we've had many town hall, many conversations with business, with contractors, with community on the fees and the cost of the fees. The city in the past has talked about cost recovery. And so... I haven't seen the analysis, like I see a chart, but it would be nice to look at the source documents. And my main concern is like Borleaf. And I don't know if we still contract with Kimberly Horn, but those are extremely expensive contracts. I'm not sure where our staffing level is. I know we've made some changes. So I see some fees are a little bit higher, but not significantly higher. I would like to just check in with our community because this has been an ongoing issue, at least for me, for the last five years. The other area of interest for me is the accessory dwelling units. We've had many... Clusters of folks really want to look at that streamlining process, which includes the fees. And so I see an increase in that versus a decrease. So, you know, those are at least some of my concerns. I kind of want to see the analysis to make sure that the fees are somewhat cost neutral.

So to answer a few questions, yes, 4Leaf is still here. And in fact, Nick is from 4Leaf and he is our building official. Nick, you can address the item.

Just to answer your question, ma'am, is when I first got here, I recognized the costs were just enormous for what we were trying to do. The ADU fees and stuff, were somewhere in the range of $17,000 to $20,000 to put an ADU in with existing fees. So when I went to work to try to find an analysis to find the fees that were going to be more fitting, the fees now for an ADU are going to go from $17,000 down to $4,000 or $5,000. So it's going to be more in range of what they should be with our communities, with Gilroy and anybody else out there so that people will actually come here and live with us versus go to other cities. So we've really worked really hard to try to get these to where they're very competitive, where we still are making our cost recovery on top of not charging 86% higher than anybody else.

Correct. Thank you. Okay. Thank you. Yeah. And I think I was maybe, I think maybe thinking along the lines, I was just wondering if you could give an explanation, a city manager or the gentleman from Fort Lee, what do these fees pay for? So when we're asking for a permit fee to be paid, what, what is, what is, what are those dollars used to purchase or to pay for?

So a little later, we're going to talk about what a rate, but it's in reality the same conversation. Our fees, just like a rate, should be capturing specific costs. Who's working at it? Whether it's two people, whether it's one person, how long they're working. So let's just say my hourly rate is $50. And for a given permit, let's just assume that we made a analysis indicating that I'll need two hours. So that fee should have $100 just paid for me. And then let's say Jeff is also involved in that process and we need three hours of his time. That's 150. So we do capture personnel. We do capture the use of technology, any types of contracts and so on and so forth. We're trying to capture inflation now. And we're trying to also be competitive. So it's a mix. Whereas in water, we're not trying to be competitive. Utilities are utilities. But with this, we do have to be competitive. cognizant over the fact that people have choices and they can go to another city to build. And we would like them to come here instead. So we do try to do, we try to capture personnel costs in our allocations, our cost allocations for administrative. For example, the clerk's time, even as we're having this conversation about development, that is something that should be captured by our fees.

So with the reduction in these particular fees, because the overall resolution is more general, but with these particular fees, then is there gonna be a streamlining process so that then those costs, they won't be so high and so they won't be covered barely? I mean, what is the thinking behind that? I mean, I think I'm sort of thinking along the same line as Council Member Malice, I'm not sure, but I think so. I mean, it's just like this idea that we're asking for that, that particular fee to be lowered, but do we have some, like, justification for how we will pay for the costs that are related to that?

It is cost recovery. So let me start by saying that we are not, somebody always pays. We don't want the general fund to be paying for anything. So it is cost recovery, but it also includes a competition part of it, you know, competition, a competitive element to it. We can, if the council wishes, we can bring the book of fees back with actual, because right now we're not even presenting you that. We only have the development fees per the request of the council. But we don't have a book of fees in front of you. So as I said, I would love to get a book of fees in front of you because that is what I'm used to. So I'm not saying that what we do is not right. It's just different. But I'm used to bringing book of fees to the council and the council adopting those fees instead of delegating that authority to the city manager. It is your pleasure.

And for this particular item, your request is simply to adjust them based on inflation. Correct. That's it.

Correct. And in this case for development fees, as a response to what the community had asked, we did study them with too many people, Mr. Weiss and Nick studied these. And so they came up with a schedule that was more competitive. So right now, all we're saying is give me the authority to then execute the fees. That's how you've done it in the past. And for the record, that is not how I'm used to doing that. But I'm trying to be respectful to the City of Hollister's procedures.

Okay. Okay. Any... Council Member Pacheco, did you have a question?

I just have kind of a statement. When I look at these graphs, like, it doesn't look like we're... comparable at all. Like we're not even competitive in any way whatsoever. And I love Hollister. In my heart, I'd like to kind of keep us a small town, but I know it's, we've got a great climate. We've got a lot to offer. There's a lot of reasons why people would want to build an ADU in the back of their house. Maybe they want to have their kids close by. Maybe they want to move into it and the kids move up in front and everybody lives together. I think multi-generational households are great. Anyway, Hollister's fantastic. It's just when I look at these comparisons, they're just not really comparable at all. So I guess my question is this. Is this graph before these fees are modified or after? Before. Okay. So how do you see these bar graphs becoming a little more competitive after we...

ratify these or approve them or whatever so this is the current graph of where we're at right now when miss anna was talking about the the rates it's it's not just about the hourly rate but it's the fully burden it's your rate plus all of your benefits and everything was what we base our cost on for making permits how much time do we spend doing inspections how much time do we do doing Plan review. We're not for profit. We're supposed to be able to be 100% recovering all of our costs for the duties that we do. At the current time, we are... for profit. And we need to be able to reduce that back down to where we're within line with Gilroy. If you look at the fee structure that we're looking at right now, it's quite similar to Gilroy's, which is our neighbor, which makes us competitive and in the same play. And we still are covering all of the cost of all the employees that are working. It's fully 100% recovery. Where the other one, we were three to 400% over recovery.

so and remember this is this is just for the building permit fees but the resolution is is general uh authority so that the city manager can raise based on the rate of inflation raise the fees just accordingly okay yeah i just was okay how are we that much more expensive i mean just in this one department like how did we get to the point where we're that much more expensive but

Councilman, if I could. That's what happens when councils don't review book of fees. This is why it's important to bring the book of fees to you for your review versus you delegating that authority to me. That's exactly why. Because in this case, four heads are better than one.

Okay. Thank you for that. Thank you. Okay. I'm going to open the public hearing now. Do we have any speaker cards on this item?

Yes. John Coulter.

I just wanted to speak about the fees again. And also, before I start, I'd like to say Nick is doing a great job and along with Dana. And I really appreciate the changes that you've made. And, you know, it's really impacting the community in a positive way. And so with that said, I want to bring attention to you heard examples where it shows that you know, 80% more than what someone would be charged somewhere else. How about something that's like 500% more? Okay. I have a friend of mine. He just pulled a permit for a 700 square foot addition to an existing house. Got any idea how much they charged him? $26,000. This is an addition to a house. There should be no traffic impact fees. There should be none of that stuff going on. But they charged him. You heard the price. An ADU is going to be about $5,000 to be in line with other cities, okay? For an addition in any other city that I would deal with, that's 700, 800 square feet. You're talking about maybe eight grand, okay? He was charged $26,000. So I just want to bring that to your attention. And because he didn't know any better and he just paid it, you know, and I was like, man, that's crazy. And it looks like they're trying to charge him traffic impact fees and stuff like that. So I just wanted to kind of speak up for him. Because, you know, he's not here to do it. So, and this was about fees. So I thought I'd bring that up. But that's an example that you could look at and say, hey, there's no way that, I mean, that's like the permit price for a new house. You know, that's crazy. And all he's doing is an addition. So there should be no misapplying traffic impact fees because an addition doesn't incur traffic impact fees. to his permit costs. And I believe that's what they did. And you're talking about 17,000 right there. So anyways, I just want to bring that up since we're talking about fees. Thanks.

Thank you, Mr. Poulter. More speakers?

I have no more speakers for this item.

Okay, so I'm going to close the public hearing now. So I'm going to bring it back to the dais for an action. And I guess we can move. To adopt the resolution, we can also ask for a different thing to resolve, I guess, a different resolution. So let me just bring it back to the diaries. What do you think? Council Member Morales, go ahead.

So I'd like to amend the resolution so that these fees can be adopted to address inflation and make some of our fees more competitive. However, based on the information and based what I think should happen is instead of delegation of authority, I would like the fees to just come back to council as they're being considered for increase or decrease. I also believe that if there's going to be, if it's more than cost recovery or cost neutral, then we need to have a public hearing for those fees. Government is not supposed to have revenue on any of these fees. So in light of that, I just want to make sure that, again, The past practice doesn't mean that we have to do it. I would like for the fees to come back when they're adjusted.

So do you want to suggest like verbiage for the change in the resolution? Because if this is just simply asking for authority based on the rate of inflation, then we can always change that to just have it come back every time. Or if it goes above the rate of inflation, I think that's already kind of understood in this resolution. So in what way would we...

anytime there are fees increased or decreased, and unless there's the analysis attached, government is not supposed to, it's not for profit. And so there's has to be a public hearing anytime there's fees discussed and a public hearing. So even if it is for inflation, unless there's that analysis for those fees, then there should be a public hearing for the fees. So what, what I'm, what, what I'm trying to replace is adopt these fees and not, so eliminate the word delegation of authority and just modify the policy to bring back fees anytime there's any changes. That's the replacement language for the resolution.

Okay, let me check in with Jennifer. Jennifer, I see you on Zoom. Do we have to have more specific language or can we go with that as a motion?

Well, as Council Member Morales was explaining, the City cannot charge more than it would cost to provide a service. And in addition, when fees are adopted, it's by public hearing by the City Council. So what the City Manager is referring to is that every For example, five years, you might do a fee study that sets the fees. Those fees are adopted by the city council. And then within that resolution, there may be a delegation of authority to the city manager simply to raise fees by CPI each year, but not to establish new fees. So it's my opinion that she could raise the fees by CPI as suggested in the resolution. But any other changes to the fees need to come back to the city council for approval along with data demonstrating that those fees don't exceed the cost to provide the service.

Okay. Okay. So. With that council member Morales, I think I think I'm. I think this resolution, the way that it's written, covers what our city attorney just said. So are you okay with that? Or did you want to further amend it and make a motion? Okay, okay. So do you want to make a motion on that, for this resolution?

So if the resolution, so Jennifer, if what you're saying is adoption of these fees And then to provide election authority for just inflation increase, then there's no need for an amendment. On the same page.

Yeah, so it's my understanding that there and correct me if I'm wrong, because I did not have the opportunity to review the resolution in advance. But it's my understanding that the, the building and planning fees that were discussed and I aren't included in that resolution. So, if that's the case, then, yes, all you would be doing by adopting the resolution is is approving the increase to all of the other fees. If you'd like, I can take a quick look at the resolution and see if that understanding is correct.

Yeah, yeah. So the permitting fees are, the proposition for the permitting fees is to bring them down so that they're more in line with other, so we're more competitive. However, other than that, the only authority that we're giving the city manager is to increase based on inflation. That's it. Anything above and beyond that still has to come to the city council. That's what the law says. Yeah, that's the resolution. Okay, so with that, let me ask again, do you want to make... There's a comment.

Jessica, did you have a comment? Go ahead. Good evening, Jessica, Director of Finance. I believe the resolution states that if there are minor... changes to the fees, then we would delegate the authority to the city manager to go ahead and make those changes. And Jennifer, I don't know if you want to take a quick look at the resolution, but it does include minor changes in addition to the CPI adjustment.

What could a minor change, what would that be? What's an example of that?

The resolution doesn't state what those minor changes are. Yeah, I think, yeah. Ambiguous.

And just to understand, Ms. O'Connell, this is the resolution that the city has adopted historically. Historically. So these are not the new nuts.

Yes, correct. Okay. Okay, I hear what you're saying. Okay. However, okay, with that, thanks for that clarification. Okay. So I think that we could make the motion that simply says based on the rate of inflation, that's fine. Anything other than that then needs to come to the dice because that will be a change from past practice.

So if we are just to eliminate, to make minor modifications and then just leave delegation of authority for inflation.

Yes.

Okay, so we'll make that. Okay. Sorry to interrupt. The resolution does include the change to the building, the building fees. So, if you don't want to do that tonight, then you should just amend the resolution to not include that.

Okay, wait, I'm sorry, Jennifer, we are having a little bit of trouble hearing you. So say that again.

So, the resolution does include revision to the building permit fees.

Okay.

So, if you don't want to include that tonight in your approval, then that you would want to amend the resolution to remove that piece. However, if you're comfortable moving forward with the revision of those building permit fees, then you can adopt the resolution as drafted.

I think the question within, correct me if I'm wrong, Council Member Morales, is could we make the language more specific so that it doesn't say minor changes, but in fact says that if it changes based on the rate of inflation or something to that effect, CPI, for example, if we can include that specific language in the resolution,

It does include that. So it does say that the city managers authorized to increase fees by CPI 3.8% also authorized to make minor adjustments and also revise the building permit fee. So it includes all three of those components as drafted.

Okay. So if we, we could make it specific, but we could make it specific simply to include CPI.

Yeah. Yes.

Okay.

So I'm going to bring you back for a motion.

All right. So my motion is to approve the revised fees and on the resolution to... I think we need to work on the resolution because if I'm looking at the where as, the first one is to... to collect the fees. Two is user fees based on the necessary nexus methodologies and calculations. Authorized to make changes user fees based on CPI. Cost recovery, which is what the previous CD managers have done, where that leads us to that chart. And then the next where as is looking at a very specific CPI rate of 3.8 that changes every year. So then it would be to eliminate just about every whereas except for authorized to make changes based on the CPI. Yeah, yeah.

Okay, yeah.

Because anything else authorized as a city manager to change the rates based on cost recovery, cost recovery could include anything without analysis, without having it to come back to council.

I'm thinking city manager that maybe, I think I'm in agreement with Council Member Morales. If we could rewrite the resolution and bring it back to reflect the discussion. And let me check in with Council Member Bichet and Vice Mayor Gianna to see if you two generally agree with the discussion and like kind of going back and forth between Council Member Morales and myself.

I'm in agreement with you two, and I just would like to see this more often. So if we could just see it four times a year, I would be much happier.

Okay.

Vice Mayor? We're changing the verbiage, essentially.

Well, I think what we're asking is for them to go back and rewrite the resolution so that it's more specific and that it reflects what we just talked about. And I think it would be any time there's a change, Council Member Pichet, unless it falls within CPI. If it's within CPI, we're saying we all agree that's fine, that the change can occur. But other than that, we're feeling like it needs to come back. um to to the city council and we'd maybe like to see that language on the resolution just be cleaned up and then brought back so just so it's a clean it's cleaner and and so are you okay so manager let me take vacation um the at the next meeting which could be either the 22nd or the 29th or august because in july we take a break

we will bring to you, imagine if you will, the same resolution with an emphasis without most of the whereas, except for where it says recommendation to increase fees based on CPI.

I mean, I think yes, unless there is further analysis, justification for something else. I think the thing that's making us, and I'm going to just, correct me if I'm wrong, making us a little bit uncomfortable is this idea of minor changes. It just seems like that's very subjective. Maybe we want something that's more specific. Rate of inflation, we know what that is. It's clear, specific, right? And so I think anything else that's minor, if there's another way to define that so that it's clear on the resolution and you can bring that back with that language, I mean, obviously we would welcome seeing that as well.

Yes. May I? Go ahead. Jessica O'Connell, Director of Finance. I just want to caution the board members. There are minor fees on that schedule, like, say, copies, things like that, that are very minimal. And if we make a change to that, if we change the resolution to every change, then if we change the fee on copying documents, then we would have to bring it to council. One thought is maybe putting in language regarding fees that should have a cost analysis associated with it and maybe put a clause or a statement in the resolution for things like building or development fees that every five years we do a cost study or something like that so that we're not hanging up All the fee changes and having to come to counsel for every single change. That's just a thought.

Yeah. Yeah. And I think, Jessica, that's exactly what I mean. Just what we're proposing is that based on the discussion that you just heard, if you could include that kind of language to reflect that, then then, yeah, we'd like to see that and then we can have further discussion about it.

We'll bring it at the meeting next Monday.

Okay. Okay. Sounds good. Okay. So we're going to, we're going to go ahead.

I'd like to move forward at least with the piece that are presented. I think there would be a benefit to the community to adopt them today if possible, and then come back with the modified resolution.

So we need a motion for that, Jennifer, right? So we need a motion just for that then. So I'll make a motion to approve the... Let me just check with Jennifer and make sure it's okay for us to do that. Is that okay for us to just go with that and then put the resolution on for a later date, but just the fees that were showed today?

Yeah, as long as there was a comprehensive... fee schedule included in the agenda packet as something that can be referenced.

Okay, so as long as the motion reflects that and then the broader resolution can be brought back. Okay, go ahead, Council Member Morales.

I make a motion to approve the fee schedule presented.

Can I get a second?

I'll second.

All those in favor? Aye. Any opposed? No. Okay. So we're moving forward and then we will have the resolution brought back. Okay. Thank you. Okay, so we're gonna move forward with the agenda 6.4, a presentation adoption of the 2627 recommended budget, 2627 authorized position summary and fiscal year 2627 appropriations limit. Can we get a staff report, please?

Yes, good evening, Madam Mayor, council members, members of the public. Today is the continuation of a very important discussion. So the context that I think it's important to know is the methodology that we have used to prepare the budget. On April 20th, I asked the council for direction on a framework, not the specifics of the budget, but a framework. Why? Because a framework is a policy. And at that point, on April the 20th, you gave me two very important pieces of, two very important elements. One was that we would use the general fund, we would balance the general fund by respecting the equation of revenues equals expenditures. If we make $1, we spend $1. We don't spend $1 in one penny. We don't spend $1.50. If we have $1, we spend $1. The other element was that we would maintain 20% of our expenditures in reserves for a rainy day, and that was for the general fund. Last week, on June 9th, we were able to... have conversations about the reserve. And I indicated how I brought back a reserve of 20%. However, it was not feasible. It was simply the numbers aren't there. As you may recall, what we had were deficits from here until the next 10 years. I did a 10-year projection. And at that point, I asked for direction to zero that out, zero reserves, which you gave me. In addition to that, last Monday, you said that as far as union obligations, we would remain at status quo until a new MOUs were negotiated with the unions. So the framework on the 20th is inconsistent with the framework from the 9th. The approach tonight is exactly the same as last week. First, I'm going to present you the directive that you gave me on the 20th of April, and then I'll present you with a budget that reflects the directive from a week ago. So in your packets, you have what we call R and S, just for the sake of putting titles to things. So the budget that we're calling R is the one consistent with the April 20th framework, which was a fiscally conservative framework that, for the general fund, it balanced the general fund through workforce reductions and other cost-saving measures. It also, by doing that, supports long-term financial sustainability. As you may recall in the 10-year projection that I showed you, we had some hard decisions year one, which is the incoming year, year two, year three. But after that, we started to balance off. And we would reach a 20% reserve by year number eight. Our budget does not include any COLAs. Our budget reserves are zero. As far as the water fund, staffing is reduced to reflect utilities of similar size and complexity. The water rates, therefore, are based on lean operations. Why? Because we want to limit the impact on the rate payers. And the water fund receives a $10 million loan from the sewer fund. Let me repeat that. Even under the most fiscally conservative scenario, we need to swipe the credit card yet again. And in this case, we're swiping the card of the Bank of Sewer so that we can use $16 million. for the water fund. Therefore, the sewer fund is not used for general fund. It provides a $16 million loan to the water fund, which represents about 30% of the current balance for the sewer fund. That's scenario number one. Before I jump to scenario number two, are there any questions? All right. So now, I'm bringing to you the scenario based on the framework from a week ago. It is a service preservation model that avoids workforce reductions this year. The general fund balanced through an inter-fund loan of $5.5 million from the sewer fund. It avoids reductions in staffing and employee benefits. It does not have COLAs, and the reserves are zeroed out. The Water Fund is balanced through an Interfund loan of $17.3 million from the Sewer Fund. So I swiped the credit card the first time with $5.5 million to help the general fund. I swiped the credit card second time for $17.3 million. Staffing levels are maintained at 14 full-time positions in Water Fund in Stormwater. Water rates reflect the full cost of expanding the staffing structure. Since we have more people working, then obviously the rates will increase. sewer fund it serves as a line of credit to support both the general fund and the water fund provides an estimated 23 million dollars in loans to the general into the water fund representing about 46 percent of the sewer fund So I'm depleting the sewer fund. I'm calling it a line of credit. I'm depleting almost half its assets so that I can lend it to the general fund and to water this year. So next year, once again, I'll be in front of you. Basically, I'll recycle the report, except that this time we will not have a line of credit with the sewer fund. The reality of this city is that workforce reductions are necessary, whether it's this year or next year. The question frankly is, do you want to swipe the credit card twice this year or once this year? It's a bad situation. I wish we did not have to swipe credit cards. But there you have it. There's only one fund that can help us meet payroll, and that is the sewer fund. In order to do that, I'm asking for a formal action of something we have already been doing. That's how we've been meeting our obligations. So whether we do status quo, whether you decide to do a more conservative budget, it's a policy decision 100%. Again, my role is to give you the data, and your decision is to indicate which direction we should go. I cannot in any way, shape, or form recommend the second scenario in which we swipe credit card and deplete one of the few funds that we have that are actually healthy so that next year I can come back and ask for even more layoffs. I just cannot support that. But again, the good news is you make the policy, I follow it. So whatever your decision is, it will be implemented. Any questions?

Do you have questions? Catherine Ramirez, do you have a question? Go ahead.

Thank you. Thank you, Anna, for the high-level overview. I'm wondering with the budget, I mean, both scenarios are bad, right? One scenario is worse than the other. But we're not... we're not really talking about specifics. And I think, at least for me, it would be really helpful to talk specifically. What are we talking about layoffs? How many people are we talking about? What divisions are we talking about? What revenue sources are we seeking this year versus next year? What are cost saving measures that we can implement this year and next year? Any way you look at the budget situation, it is doom and gloom regardless. But I think for folks or for me to understand from a policy or from a budgetary directive, let's talk actuals. Sure.

So the revenue levels are the same regardless of which scenario you're looking at. So whether you look at your S or your R document, one was, I think I put a green marker and the other one I used a pink marker, the revenues are the same. And again, what we said also, what we said is that we were going to use predictable, consistent taxes, right? So we're looking at our property taxes. We're looking at sales taxes. We're looking at hotel tax. Now, if let's just say Home Depot moves here next month and it opens by the end of the year, it's a game changer. But right now we're assuming that things are exactly the way they are right now, that nothing major is going to happen overnight. So the revenues are, as expected, around $50 million in change. So that's for revenues. Then you asked for where would the work reductions be? So let's start with where the funds are problematic. The Water Fund does not have funds. So that's the first fund that we would take and start doing workforce reduction. The other fund that does not have any resources is the stormwater. Now, stormwater is slightly different in that we never created the utility. So it is completely up to you if we want to go to the taxpayers and ask them to form the utility. I don't know. I don't have a sense for the tolerance of this community to impose another rate, another tax. And then also let me mention that the creation of the fire district is imperative above anything else that we do for the sustainability of the city. So there's some capital, some political capital that you may have to think about. But the creation of the stormwater utility is a must. Right now we have expenses. We have a cost center, but we don't have a revenue center. You asked, of course, the general fund is another area that we would need to talk about. And as far as the positions, the general fund touches everything. So we would look, instead of looking at positions because, for example, let's just say my position, I'm 30% general fund, 30% water, 30% stormwater. You can't really lay me off for 30% of the time, right? So we have a different approach. And what it is, is looking at classifications where the work is essential. Obviously, anything and everything that we do here is essential. Let me reassure the taxpayers that no one here spends time playing solitaire. Nobody spends time here talking to family and friends. Everybody's quite busy. And so we would have to look at some of the positions where the work can be transferred to other positions. With that said, there's a great deal of care that has to be taken to ensure that no union task goes to a non-union member. That is a no-no. So a union task goes to a union member. A non-union task goes to a non-union member. It means that we would have to look at every single classification beginning with the very top all the way to the very bottom. Everybody will be impacted. All classifications will be impacted in one way or another. So let's pretend that we decide to eliminate classification A. Well, that work is going to classification B. So they are impacted. Good news, you keep your job. Bad news is you have a lot more work. Everyone is impacted. So that's the only thing that's really on the table because the council did give direction that the MOUs would stay the same. We are no longer really able to go beyond the actual positions.

So when I'm looking at, when we provide direction, it needs to translate into something usable. Are we looking at, so based on what you shared, We're looking at eliminating stormwater, water and stormwater positions. So are we looking 80%, 50%, 20%?

Currently, we have 14 positions between stormwater and water. We will go down to five.

And what does that translate to in terms of what are services that are going to be What's going to be covered?

Level of service would decrease. As to where the number comes from, the number came from an analysis done within the department, which was then shared with other jurisdictions of operations of similar sizes. And that's what we have, five to six individuals. That is not what we're used to. Thank you.

So I would like more information. So what does that mean to our residents? What are they going to see? How are we feeling it?

They're going to see a decrease in the level of services. It would be a lie to say that we're going to stay at the same level.

What does that mean? Somebody that doesn't know government, doesn't understand water, what does that mean?

If there is a water problem in the middle of the night, let's say at 2 o'clock in the morning, whereas right now we could deploy somebody to take care of that under the new scenario, we might be able to send one person. This is real. So again, I mean, the comments that we're hearing from the audience, these are real. This is the moment of truth, council members. This situation wasn't created last week or last year even. This has been going on, well, for a while since 2018, as for the practices of swiping credit cards for a long time. So there is no happy news that I'm going to give you. I could swipe the credit card again because it's so much easier to do that. And then next year, by next year, I'll probably move on to another job. So there you go. My commitment is to stay here to fix the situation. That's the commitment that I made to you. It is hard. And if someone has other suggestions, we've said it from day one, please find a mistake. Look at our numbers and find a mistake. We want to be wrong.

So that's the first one or the second scenario? Because we're looking at 5.5 in the first. The second one, we're looking at $17.3 million or 46% of the sewer fund. It's either we do it this year or we do it next year. But it looks like unless we get a $10 million revenue source, it's going to happen this year or next year.

And let's just say that we're able to secure a grant from the state, let's just say that, or from a local foundation, or it doesn't matter. It's a one-off. What we need are funds that are here year after year after year. There goes the problem with the ARPA money. The ARPA money was a one-off. Unfortunately, we went ahead and bought things with a one-off. I'm sure there were good reasons for it, and it's very easy to criticize after the fact, but that didn't help us. So council members, like I said, I do not envy your position. It's one bad option versus the other bad option. The scenario S does not lay anybody off this year. We preserve the current workforce. Next year, where is my credit card? I have nothing else to swipe. What's worse, if I've already used about 43% of the sewer fund, So if the sewer fund needs that money, I don't have it. We have a sustainability problem here. Now, are the numbers audited? We continue to say, no, they are not. And at that point, it's a question really of how the policy direction that you want to take when you are not sure how much money you have in the bank. There are folks that go to Las Vegas and gamble, and there are folks who stay in their home and do not spend any money. I'm with the latter. If I'm not sure what I have in the bank, if I don't have audits, I look at the worst case scenario and I stick to it because I'd rather jump for joy that I was too conservative than go to Las Vegas and spend what I don't have.

Okay. Other questions or comments? Go ahead, Council Member Boucher.

Ma'am. After just having a conversation about recruitment and retention, we're confronted with how do we pay for all of these things? Because when the community speaks, we all are listening. If we were in a scenario where we had abundance in Hollister, and the decisions made before us were different, or maybe they had better information than we have right now, because we're still operating on imperfect information. We just passed the first audit was what, 2019, 2020, and we are still like five years behind. So we're still operating on imperfect information, but we can't go back in time. We don't have a flux capacitor. We can't put plutonium in the macar, the, DeLorean and go back in time. But I do want to know, is there somewhere in Potentially in between the R and the S scenarios where we lose the least amount of workforce, the least amount of knowledge and ingenuity and working together between stormwater and the other departments where we've gotten these operational efficiencies. We're always talking about Kaizen. Well, I am. And continuously improving. Is there something in between these two? That will get us to the 20% reserves in eight years, or is it one or the other?

No, I mean, it's not one or the other. One of the conversations you all had a week ago was this idea of a six-month amendment. So the idea of adopting a budget, making some assumptions, and then receiving additional information. And for the record, I sincerely doubt that we'll have audited reports, but let's pretend we do. And then after six months, you could decide to Either go a little bit easier on the pedal or full pedal. It depends. What makes all of this very difficult is the fact that we don't have hard numbers. And I totally understand that we're talking about people's livelihoods, but we are also talking about the taxpayers. The taxpayers are not necessarily here. The taxpayers watch. If we're lucky, they watch what's going on. They may ask questions or not. It is about the sustainability of the city. Now, Vallejo is still around. Stockton is still around. They're filed for bankruptcy. It's at the end of the world. No, it's not. It has some impacts, clearly. But it is, at the end, completely a policy decision. It's very easy for me to stand in front of you and say, oh, I recommend this one. I recommend that one. They're both bad options. There's no one good option.

And if we don't go with, I'm going to call it the responsible approach. I am a fiscal conservative, and I'm with you in a sense that if I don't know how much money I have in the bank, I'm not spending money, right? Yeah.

Please also understand that it's not a decision that we make alone. You give me direction, and then we have two types of employees. We have those who are represented, which means that we have to work with the unions. They speak through the unions, and we have contracts with those unions. Those are obligations. So, again, the direction was status quo. Therefore, those MOUs are not changing. Now we have the non-represented. I take a stance that if one gets something, the other one gets the same. So if the union members are not to see a decrease in their benefits, I think it's unfair for the unrepresented to see a decrease in their benefits. But again, at the end, it's about the direction you give me as to how much money we need to borrow. Because at this point, that's what it is. We need to borrow.

So we're talking about paying our debt with a credit card.

With debt. Pay with debt with debt.

How long did it take us to get to this point?

Well, let's start with, I mean, water.

I don't want to dig into the past, but it had to take a while. Like we had to make a lot of decisions to get to this point.

2018, we've been running a deficit. Why is taking this long? I'm not sure. And then the general fund, COVID didn't help. It gave us a false sense of stability because we got a chunk of change, except that it was a one-off. And so we made decisions based on, you know, we bought a home. We bought a $10 million home, assuming that you were going to win the lottery every year and that doesn't happen.

Didn't we buy a gym off of the hospital or something? We bought a gym museum off the hospital. Anyway, I was like, can we sell anything? Do we have anything that we can sell? We're doing that. A fire truck. I mean, not like one that we're actually operating and using, but that killer truck. Is that something that we could possibly... So we're looking at the value. I just don't know how many four story buildings we're going to be saving in the next.

We are looking at every scenario and we're trying to collect funds. What we're finding is that we're trying to collect funds from poverty itself. Folks don't necessarily have the ability to pay us. But one point of clarification, though, I have not made this point before. Public safety. We are protecting public safety. We are, in the budget, we are proposing more firefighters. Why? Because we're below the numbers. Same thing for police. We are proposing to make those two departments whole. Right, burnout. Burnout, injuries, workers' comp, the list goes on. For fire, let me be more specific. It is important for us to capture the true cost of fire because that's what's going to help us with the creation of the district. We cannot go into the district with a low-ball budget. It has to be a sound budget. So we are seeking to create 11 more positions in the fire department and to continue to recruit for the seven that we currently have under police. So on the one hand, we are reducing costs in some areas. We are increasing costs in different areas, but there is a logic to them. The district is imperative and it cannot be underfunded. If it's underfunded, it will fail. That's what we're learning. Districts are failing as we speak. And it all comes down to the baseline that was used when the district was created.

And I mean, I don't know if this is even a good question, but if we do, you know, the status quo, is there... a high, medium, or low chance that we default on our debt? Is there a chance that we go into some sort of brain-corruptcy reorganization if we don't make the right call?

Based on the numbers right now, if we go through S a year from now, I would have depleted the sewer fund, and I would still have to do a bunch of layoffs. I have no way of expressing how significant labor costs are for all the right reasons. California is an expensive place. Therefore, salaries have to reflect that. It is expensive to cover people with health insurance, and the list goes on. That's where the money goes, our O&M. I think it's 22 million, if memory serves me right. It's personnel. That's in the general fund. It's personnel we spend, which is therefore where we have to figure something out. Regardless of which direction you decide to go, we will look at realignments. If there are departments that we can consolidate, even though not necessarily lose people, but consolidate for the purposes of creating more efficient departments, we will. But efficiencies are not going to produce the funds that we require. We spend more than what we make. It's almost as simple as that. We make, we expand way more than the income that we receive through taxes. We're not, we're not Gilroy. Gilroy has sales taxes up to the yin yang. That's not us.

Okay.

OK, so let me just state this as gently as I can. The direction was to take a step back, give us a pause so we would have more time to really reflect on what's the best way to do this. I mean, the scenario that you gave of the, was it 14 positions? Is that what you said, 14 to 5? We go from 14 to 5. Is there a way, I mean, kind of going along the lines of what Council Member Pesce was just saying, if we eased into that, because my, so I guess my concern is if you gave the scenario where in the middle of the night something happens, we can't send somebody out there, will that end up costing the city more money because we aren't responding. Will that, in fact, in the long run cost us more money? Is there a way to do the swiping the credit card for part of it and then moving forward with trying to find other ways to find cost savings and then swipe the credit card maybe if we have to again next year um as as a way for us to take a step back and and provide us more time i mean we're talking about trying to fix something, I guess, that's been long, it's been a long term, long time coming. It's not something that just happened overnight, right? It was just a long time coming. We're here. And so we have to make some corrections. Is there a more gradual way to make those corrections?

So let's, I mean, again, S is status quo, so there's no correction to be made. So R, the R option is would be one where we would gradually reduce the workforce, which was the plan all along. Please understand that workforce reductions don't happen overnight. For the represented employees, those are meetings we have to have with the union. We have to figure out a way to save positions if possible. We had talked about incentives. The incentives do apply for everyone. For the folks who are not union, we have to talk about among the management team to see what positions make sense, which ones don't make sense. The expectation that the city will be the same once, regardless which one you assume, the city is changing. The city has to change, and it's very painful for everyone involved. Whether you do it gradually, whether it's three months, six months, I mean, the way we calculated the budget once upon a time, we assumed that it will be at least two months before we know exactly what we need to do. Why? Because we're hoping that the incentive may just make sense for some people, and then they'll... do a voluntary layoff. We want voluntary to the degree that we can. Again, we have no way of controlling that. We can't ask how many people expect to do this. So it is a negotiation. But to think that we're not going to do anything between now and December, I mean, that could be your directive. That would be problematic. And now we won't deplete the sewer fund by 43%. We'll do half of that by 27%. Please understand, there's no, we looked for the money and the money is in the sewer fund. And that's the new credit card.

Okay. Okay. Any other questions?

How about Mayor? I have a process question. So I noticed that we only have one hearing for the budget. And this is, sorry for the word, but this is like a bomb, right? As we're kind of figuring out the details and what it really means and the impact, you know, I don't, for fairness and transparency, I don't know that whoever's watching or community members have had the opportunity to digest. And even myself, I'm digesting the actual impact as the mayor stated, you know, can we afford to not respond to, because our infrastructure is, I want to say not stable, but it's not stable. It's, has significant issues. What is our liability if we don't go out and repair it? What does this mean for our businesses, our community? I know the options seem easy, but really they're not. And I'd like to even consider just even thinking about is there an option three, right? Or is there a combination or... I'm wondering if we can add another meeting to just really think about what the decision will be. If there are no other options and if you say that this is it, we don't have anything else to add, there isn't anything else, I'd like at least a moment to really think about The direction I'd like to give, it is a lot to digest and the impacts are significant. I would not like to just take a few minutes to just say option A or option B. I really have to think about the consequences and even see if there's any other options available to us.

We were prepared to have this conversation every Monday of June. I agree. This is a complex issue. It has major impacts on real people. We're happy to come back as many times as possible if that leads to a better solution.

It's not going to make the decision any easier for sure. As you said, city manager, there's just simply no good options here. So one way or another, it's going to hurt. It's going to hurt. It's going to hurt no matter what we do. But I do think that an opportunity to... process more is okay. But let me check in with, I'm not sure if it's city clerk or if it's the city attorney. Should we proceed with the public hearing and then continue the item for the next hearing, the next meeting? Or do we not open the public hearing and wait for the public hearing next? I mean, I'm just checking process. If we were to just like... I'll give it another week to process.

Yeah, I would recommend opening the public hearing so that you can hear from the public that came tonight to speak on this issue and then. Leave the public hearing open until you're ready to make your decision. So at the next meeting, it would just remain open. Okay. Okay.

okay so let me check in um are you guys like comes up okay with sort of that option are you guys okay with that okay I think we're all kind of feeling like okay we need a breath here but let me go ahead then open the public hearing and ask for speaker cards Mia followed by John Casey

Thanks, fell asleep.

Sitting there so long. All right. So good evening. You know, I'm here tonight because there's been many false claims directed at me that somehow as former mayor.

I'm sorry, Ms. Casey, I apologize. Just want to make sure that where the timer is going off, it's not showing up on the, I want to make sure that we can see that everybody can see the timer on the, I apologize for that, Ms. Casey. I just want to make sure that we can see that. Okay, but it's not going off on the monitor is my point. Okay, let's just make sure that it's working on the monitor as well. And we want to make sure that we give her the full three minutes, but let's make sure that the timer is in fact working on the monitor. Okay, if not, then let's just make sure that we're using the one here, but I just want to make sure that that you can see it because I know it's easier to look at the monitor and not. Over here on the desk.

we could go ahead and start with the one here and then he'll keep working on.

Okay. Okay. Go ahead, Ms. Casey. I apologize for that.

Okay. All right. So as I was saying that the last couple of budget meetings, there's been some claims about me from a certain council members that I somehow bankrupted the city single-handed. But I think what's ridiculous about this is that the people that have been making those claims, namely Mr. Resendez and former Mayor Velazquez, they are the ones whose decisions actually led to this financial crisis. It's laughable to hear Mr. Resendez talk about previous council as though he wasn't on that council or the council before that or the council before that. So I wanted to talk about facts. in june 2021 and 2022 prior to my taking office city council approved over 30 new staff positions those were permanent ongoing costs salary benefits pensions that don't go away at that same time as the city manager mentioned the city received over 20 million in one-time funding from arpa and other grants It made the city appear as though they had a strong balance sheet with a surplus. But as city manager Cortez explained to all of you, hiring permanent staff with one-time funds is not sustainable. And that's exactly how a structural deficit is created. Again, the largest expansion occurred in June 2022. I didn't take office until December, and by then that financial trajectory had been set. In 2023, our new council also uncovered something else pretty awful, that in those same two years under Mayor Velasquez and Mr. Resendez, the city failed to complete those financial audits. When it was discovered and audits undertaken, it took months due to missing information and significant issues were uncovered. There were misstatements, corrections, and accounting problems that changed the understanding of our financial position. And in 2024, as one-time funds began to run out and real numbers emerged, the results exactly what you'd expect, a structural deficit and financial crisis. The city has had long-term financial issues, the fee structures that weren't kept current, the structural imbalance in the water fund, negative balances carried in other funds. Mr. Resendez has been on the council seven years, and in those seven years, none of these things were addressed. It's ironic hearing from him talk about the city's finances being ruined as though he was not front and center when it happened. Let me be blunt, Mr. Resendez didn't inherit this problem, he helped to create it. And while he does owe me an apology for all of these lies... I know better than to expect anything from him, but I do expect every council member here, now that you have a clear picture of where the source of the structural deficit came from, that you correct Mr. Resendez every time he lies about this on the dais, because if you don't, it makes you complicit in his lies. Thank you.

Thank you, Ms. Casey. Next speaker.

John Casey, followed by Frank Garcia.

Good evening again, Mayor and City Council. Okay, I'd like to ask about the legality of using the sewer-related funds to support the general fund in the budget. Both scenarios rely on millions of dollars from the sewer funds, but the budget contains no inter-fund loan agreement. no repayment schedule, no interest rate, no term, and no authorizing resolution. The Sewer Enterprise Fund is a Prop 218 Enterprise Fund and its revenues are restricted under Article 8 Section 6 of the California Constitution. These funds can only be used for sewer operations, maintenance, capital projects, and debt service. They cannot be transferred to the general fund unless the transfer is either a documented cost of service reimbursement or a temporary interfund loan that complies with state law. The lawful interfund loan requires a written loan agreement, a repayment schedule, an interest rate, a finding that that loan will not impair the sewer's ability and utility's ability to provide the service, and it has to be approved in an open meeting. You're talking about about probably 4% in a fund. So that's 70 on the smaller one, that's 78 million. So that's 23 million you need to refund. In the bigger one, it's 10 to 11 million with 33 to $35 million repayment to the sewer fund. That's big numbers. These requirements come from California Code 53790-53799, state controller guidance, and multiple Prop 218 compliance rulings. Look them up if you don't believe me. None of these elements appear anywhere in the budget. If the city intends to use the developer impact fees, those are governed under the Mitigation Fee Act Code, Government Code 66000-66025. and must be used for the capacity increasing capital projects, not the general fund support. We've been talking about how much the sewer needs repairs and things like that. So robbing it does not make sense to me at all. If the city intends to use CFD or bond related sewer funds, those are restricted by bond covenants and cannot be diverted to unrelated purposes. So I have four questions. One, which sewer-related fund is being used? The Prop 218 Enterprise Fund, the Development Impact Fee Fund, or the CFD Bond Fund? Is this a temporary inter-fund loan where it is required a written agreement, repayment schedule, interest rate, and non-impairment and non-impairment finding, making sure we've taken care of the sewer. If the agreement is coming later, why is the budget being adopted without the legally required documentation? And if this is not a loan, how is the city legally transferring restricted sewer revenues to the general fund without violating Prop 218 and the government code? I'm requesting a clear explanation on the record. I don't think we can kick this can halfway. We're going to kick it right off a cliff if we're not careful.

Thank you, Mr. Casey. Next speaker.

Frank Garcia followed by Rodrigo Aguilera.

Good evening, Mayor, City Council. I just want to speak on the storm employees. We have one street sweeper and three boots on the ground. So that's a total of four employees, but one just sweeps the city. And I believe we charge the residents $2 and change for it. So there is some revenue. um so the 14 i am assuming miss cortez is combining the water and storm employees um we have an and i i did mention earlier that the sewer and storm work together they've been working together for eight years to cover the entire city because we have three boots on the ground for the storm department which, if you remember my public comment last week. I'll pull that up here. We maintain and inspect more than 1,681 storm manholes, 2,634 storm train inlets, 38 outfalls, approximately 87 miles of storm pipe, 47 acres of storm basins, 58 acres of industrial ponds throughout the city, between three of us with the assistance of the sewer department. We don't complain. We do our job because we understand the task at hand. I understand that the fund was never created seven years ago, eight years ago, whatever the case may be. The city is obligated under the MS4 permit and the Clean Water Act to have these inspections done yearly, quarterly. We report them. We document them. Just a few weeks ago, I found oil in a storm drain on South and East Street. You don't have boots on the ground, that ends up in the river, right? We assist sewer. You have a sewer overflow. You don't contain it in time, where does that go? In the storm drains. Where does that end up? In the creeks. If you search April 6th, city of Mountain View and the city of Sunnyvale, we'll find a combined $3 million for negligence. Our own city, back in 2020, the tomato, same thing. We've paid over a million dollars. I understand people can look at a storm and say, huh, it's just a storm. But it's important. And again, it's three boots on the ground and a street sweeper. That's all we have. Thank you and have a great night.

Thank you, Mr. Garcia. Next speaker.

Well, Mayor, Council Member Steele. Today, I just wanted to ask a little bit of transparency coming from city manager. I looked at the agenda, I looked at the report, but I was confused. I couldn't understand why are we hiring more people when we have no money? So we're trying to retain people and we're trying to approve these positions to hire new people and As I said at the same time, we're trying to lay off people. So I work for the water department and reducing the water department or whatever's gonna be left over. Five people, it's just not feasible. You won't be able to meet compliance. There's programs, there's a lot of stuff needs to be done. In addition to that, if you have an emergency and Nobody's available, like city manager said, well, I'll send one of the guys out. And you end up contracting it out, you're going to pay prevailing wages. Not just that. I'm not sure how we looked into the shout-outs. Where is the money? There's like $2 million or $3 million that we haven't recovered. So that's another option. There's money sitting there somewhere. The 218 process. Do we have a contingency plan for that? If it doesn't pass, then what are we gonna do with bankruptcy? Whatever's left over that people that still standing here is gonna get laid off and everything will be contracted out. There'll be no fee. So all I want is a little bit more transparency. I looked at the budgeted positions chart that she had and some of the departments are disappearing. And the street department is disappearing, the stolen department is disappearing, but then the parks department has 16 employees now, or 22 employees, when in reality, they only have three employees. So I don't know, I'm confused as of where these budget positions are coming from. Got some papers saying that they're there, but in reality, they're not there. So if we could get more transparency with the members and council, I think that will help us in the future. Thank you.

Thank you, Mr. Aguilera. Next speaker.

Carolyn, followed by Christine Camarillo.

Hi. Carolyn Roderick with SEIU. I was just here last week and another employee just resigned. So I guess I'm going to say that every week. I kind of was going to share some stuff that previous speakers before me had said. I want the council to look at the authorized positions S list. There was no authorized position R list that was something that we can compare. So for The Stephanie Brown's presentation reflected that we have 189 positions currently in the city of Hollister. The city manager said that S, which is the status quo service model, is status quo. However, if you look at the presentation, there's 200 positions. So somehow 11 positions were added for status quo. And it's not clear to me where that is coming from. And then for the R restructuring or resilient approach, It says currently the city manager's department has four positions, but in the R approach, which is supposed to be slimmed down, it says the city manager's department has 10 positions. So where did those six come from? And then... So there's just not, again, there's transparency. Rodrigo talked about how positions were being moved. None of that has been met and conferred over. The first time we saw this was on Friday when the agenda was posted. So I don't know how union positions are moving without... meeting and conferring. And then last, I know the city council has already approved $300,000 for early retirement incentive. We encourage that we continue to explore that. There are employees here that are willing to retire earlier than planned because of their desire to help save jobs. Thank you.

Thank you, Carolyn. Next speaker.

Christine Camarillo.

I wasn't actually planning on speaking this evening, but when I heard the number that our city manager, current city manager, is reflecting that we could conduct work as normal on a daily basis was absolutely ridiculous. You have to be out of touch with reality if you think that a city of over 40,000 people can be managed with five people in a department. Five. It is not acceptable to the community for the city manager to stand up here and say, well, if you have a water break, we might send somebody out if we have time or if we have staff. That is beyond a disconnection with reality. to say the least, because when you have a water break, when you have a backup, water is one of the most damaging things that can cause so much damage so quickly. I guarantee you, if there was a water break in front of city manager's house, there would be staff there. It's not even doable. I think our real problem here on top of a financial issues is the reality check that our city manager needs to be reeled in. And you guys sitting up there need to ask her hard questions on why she thinks it's okay to stand in front of you and think that you can conduct business on a day-to-day basis like this. We've been a part of the city for over 40 years. And there is no way that business can be conducted as usual. When these guys are out at the mountains in Cienega Hills, you're going to send one person by themselves? If you send two, there's 50% of your staff. It's not doable. And you guys need to ask her not only why, how the best budget looks, but what are we doing for revenue to fix it? Because that's one thing out of every city council member that are sitting meeting that I've been to. I have not heard anything of what is the increase of rates going to do to help offset the budget? You know, we talk about tax revenue and tourism. I just read on your page that contractors are getting 70% of our tax revenue for 10 years and we're getting 30. Whoever made that deal really needed to be, a discussion needed to be with them. 70% is on your website that tax revenue from hotels is being paid to the developer for 10 years. And we're only getting 30%. And then we want to conduct our business on a day-to-day basis with five people. She said herself, my last comment, that she won't be here in a year. These people have been here 30, 20, 15 years. You don't think that they can't get a job somewhere else. Thank you.

Thank you, Ms. Camarillo. Appreciate your comment. Next speaker. I'm going to ask you to please hold your applause. We get it that you agree, but let's just hold the applause. We're going to just ask for the next speaker, please.

I have no more speakers for this.

Okay. Okay. So we're going to leave the hearing open as we continue to process this presentation. And then we are going to leave it open for our next city council meeting. So Jennifer, I'm just looking at you. Is that all we need to do just to continue this and leave the hearing open until then?

Yes, that's all. Did you hear me?

Did you say yes, that's all we need to do?

Yes, that's all.

Okay. Thank you, Jennifer. Okay, so we're going to move on to the next item on the agenda.

For the record, are we continuing it to a date certain of June 22nd?

Yes. Yeah. Okay. I'm just looking to make sure that we're able to accommodate that. Okay. Yes, June 22nd. Okay, so we're gonna move on to 7.1, fiscal year 26-27, capital improvement program update. Can we get a staff report, please?

Yes, Madam Mayor, members of the council. So as part of our budget process, we wanted to make sure that we had the capital improvement program in front of you. These, of course, are the large projects. And let me just find it so I can pull the list. These are the large projects that the city has to do. Here we go. For example, streets, main replacements. Here we go. And so what we did this year is slightly different. Instead of having a laundry list of projects, we had a number of conversations with staff trying to understand what the logic, what the philosophy behind the CIPs. Again, these are the very expensive projects. And so we identified basically three, three umbrellas. that help us prioritize the project, especially in light of our situation. CIP projects more often than not have grants. So that's the good news. One thing that you may remember from previous years is that CIP funds run in deficits. And the only reason why that is okay is because nine out of 10 times, we're just waiting for the state, in this case, or the federal government to pay us. So it runs on deficits, but the money has been secured. So what's the logic of our CIPs? Number one, public safety and regulatory compliance. We wanna make sure the public safety is something that we continue to prioritize and that we are complying with every regulation that is relevant to our projects. The second bucket is enhancing community and quality of life, mostly around park improvement. The third bucket is maintenance and rehabilitation of existing structures and facilities. This is the one area, as you may recall, that we have pretty much put on hold under our current situation. Yes, there are a lot of things that we would like to do, but in reality, it will be emergency-based. unless, of course, we can secure a grant for those particular projects. Staff has been very, very effective of engaging with community. I'd like to remind you that maybe about a month and a half ago, we had a town hall meeting right here in the chambers in which we invited people to come and hear about the different CIP programs. It was not well attended. However, the people that did attend had a lot to say and very, very good input. And so we were able to rethink the kind of how we look at capital improvement programs. And in our staff, the capital improvement staff is mostly our engineers. What's good about it is this year, for example, what we're doing to try to help the budget out is these positions in the past have been funded through the general fund for the new fiscal year, regardless of which of which position. option you decide to go with, those positions will be self-sustaining. Think of it as like an attorney. An attorney has to have billable hours. So our CIP engineers will be the same. We will have billable hours to make sure that their positions are fully covered through their grants, through their CIP grants. One of the practices that we've had is we get a large grant say from the state, we get a consultant and hand it over to them. We're going to stop doing that and instead try to keep those funds in-house so that we can hire and retain people. Yes, there will be times for consultants, but those should be around the $30,000 range, not around the million-dollar range. And so that's the CIP. Do you have any questions?

Questions? Questions? Okay. I'm not seeing any hands raised. So we're moving on then to public comment. Do we have any public speakers on this item?

Not for this item, Mayor.

Okay. So I'm going to bring it back. Did you have a question, Council Member Boucher?

I just want to make sure I'm on the right track here. I mean, are we talking about not doing any capital improvement projects until we can afford to do so? And just... hoping that we don't have a broken water main, that we don't have too many potholes developing?

So let me separate. It's a great question, and it's important for the community to understand. The same way that a dollar is not a dollar, a dollar that comes from the general fund is not the same as a dollar that comes from a sewer fund. And as one of the speakers indicated, indeed, if we are to take that $1, there's a whole bunch of steps that we have to take in order to do that legally. The same thing applies to large projects. Water Main that breaks is a capital improvement project because it's large. They take money, but it is a maintenance activity as well. And so we have money for maintenance. The CIP plan is based on grants that we have. Now, it does not preclude us from seeking more grants. So if we know we have to do X, Y, and Z and that there are funding sources out there, then we will pursue those so that we have funds to do it. Again, think of it just like a law firm with billable hours. You seek out clients so that you have billable hours, right? So we will seek out grants for projects that are outside the maintenance plan.

Thank you.

Okay, any other questions from the desk? Okay, and then so on this one, I'm just looking at my notes. Are we just discussing and deliberating on this? Are we giving direction? Are we just receiving a report?

Receiving a report.

We're just receiving a report.

The final text and list will be part of the budget. You're just receiving reports right now.

Okay, great. Thank you for that. Okay, so we're going to move on to 7.2, a resolution approving an out-of-jurisdiction sewer service agreement for the property at 340 Bridgevale. Staff report, please.

Ms. Thompson, are you going to start the report? Do you want me to jump in first? Sure.

I'm happy to just jump right in unless you have something you'd like to start with.

Can we do something about her audio? It is really low. It's really, really hard to hear her.

Is this better?

No, I don't think it is. Just yell.

Can you check your output level on your microphone?

Yeah, we're going to see the output feed from your speaker. It's at maximum level over here.

Okay.

Yeah, it says that it's as high as it goes is is

Let me jump in, and then I'm sure I'll leave some details behind. Council members, Madame Mayor, this is a historical project. This is something that has been in the making for some time. What it is is the creation of 54, I believe is the number, 54 affordable units. There it is, 340 Bridgevale. And they need, of course, as part of this project is connections to utilities. This is close to the sewer plant. And in the past, some of the concerns have included the fact that we as a city seem to be concentrating low-income households to one particular part of town that happens to also be close to the sewer plant. That is an unacceptable practice, but here we are. So we have a developer who is interested in creating 53 affordable rental units. It's not ownership, it's rental. 53 rental units, and they are seeking your approval so that this... this agreement can move forward. The city will provide water and sewer as well as stormwater services. The owners will, in the interest of connecting additional family structure, they will work with us to come up with an agreement that actually makes sense. The property shall be annexed to the city as part of receiving the utilities. And upon annexation, the city community facilities district four and five will consider integration into those districts. One item that is new to this, because again, I believe this has come to you before. As you may recall, we've entered a stipulated agreement with HCD, the Housing Community Development Department of the State of California. As part of that stipulated agreement, We cannot simply reject the construction of affordable housing, even though I don't think anybody would argue that there is a pattern of concentrating low-income individuals in this particular part of town, which is close to the sewer plant. But even though that's the case, because of the stipulated agreement, we would have to make specific findings in order for the city to deny this particular request. That's a wrinkle that we didn't have three months ago. We enter into the stipulated agreement about March, April, something like that. So from then on, The whole point of a stipulated agreement is to force cities into accepting affordable housing. So this is the first test. This is the first application that we have of affordable housing under the stipulated agreement at this point. And I tend not to recommend, because again, my role is simply to bring you data. But in this particular case, I do recommend approval of this permit, as we don't want to give HCD more reasons to have us under a microscope. Jen, did I forget any important details?

No. No, I don't think so.

Okay, thanks. Remind me again, I think, how many units did you say this was? 53. Okay. Okay, that's what I thought. Okay.

Questions? Comments?

Questions? Go ahead, Councilmember Morales.

um so did the project go through all the appropriate channels before coming to us all that the city council is approving tonight is is providing the utility service outside of its jurisdiction the project will be approved by the county because it is within the county's jurisdiction

Did you hear that?

Yeah, that it was, it's going to go through the county. We're just.

Okay. Okay. I'm not seeing any other gestures for questions. Or did you, did you have a question? Okay. Public comment. Let's go to public comment on this one.

I have no speaker cards for this item.

Okay. Do you have a question? Comment? Oh, sorry.

One just went up online.

Okay. Let's go ahead and just get that person.

Russell Morse.

I'm sorry. Who was it? Say the name again. Russell Morse. Mr. Morse.

Good evening, Madam Mayor. Can you hear me all right? I know there's been some audio.

Yeah, we can hear you.

Fantastic. All right. Well, good evening. My name is Russell Morse. As was said, I'm with Myers-Naveh and we represent CRP Affordable Housing and Community Development regarding this project. going to keep my comments short because i think the city manager did a good job explaining it um but as mentioned i we will request that the council approve this agreement for four reasons number one as the city manager miss cortez um had indicated this is sort of a historic project and so it's different um it was approved back in 2015 with a resolution and with LAFCO approval. And moreover, staff is recommending approval based on the staff report. Number two, this approval is intended to be fiscally neutral, even beneficial to the city. And hopefully, as city manager said, will be the first step towards an annexation project and CRP will provide all capacity and impact fees to the city. Hopefully replenish that sewer fund. And moreover, hopefully we'll be annexed into the CFD four and five and we'll pay all fees and costs associated with all of these processes here. Number three, we request the city approve this project pursuant to government code 65589.7, as this is an affordable housing project and none of the conditions in that subsection C have been made. And lastly, as pointed out by the City Manager, this approval allows the city to affirmatively further fair housing as provided in that stipulated agreement. What we have here is a 100% affordable housing project by a reputable developer who adds to communities and will help provide housing to essential workers, hopefully those young, scrappy, and hungry potential city employees that you guys need. So for these reasons, we request the council approve this agreement, and I'm available to answer any questions as well. So thank you very much.

Okay, thank you, Mr. Morris. Okay. Other speakers? Okay.

Question for Mr. Russell Morris. So the city has entered into some agreements with some other developers with regard to low-income housing and We were told that it was going to be income-based, and then we were going to look at it on a case-by-case basis. And then we were starting to look into it, and we were like, when are these going to get rented out? And we figured out on the back end, did we not, that... we were noticing that water was actually entering the unit. We had to look at the water meter to figure out if those were actually... Can you fill me back in on that? Because I only have a cursory understanding of what we were discussing. I believe it was the city manager and I, and it was all of us, actually. And it was like, I just want to know how we're going to... being agreement like how are we gonna like manage this low-income housing thing because we literally we we found out that some of the low-income housing units in other uh you know developments we didn't know they were even being rented until we looked at the water rates do you remember that

I think it might have been my predecessor, but I can answer the first question.

Maybe it was Pia.

But I can answer the question.

But that's how we figured it out. We're like, oh, they're actually being rented, these low-income units. Well, what happened with all that? Like, are they doing income-based? Is it...

So the city does have a housing coordinator. Ms. Jamila Saka came to you maybe about two months ago and gave a report back in April, made a report to the council of all the assets that we have, mostly through the successor agency. But that is the person. That is the person that makes sure that if we say that we have 100 affordable units, that in fact, we are meeting eligibility for those. She works mostly with the nonprofits that manage those homes, because we do have to check from time to time to make sure that the individuals that we thought live there are still living there. That is on the city. We need to monitor our our assets and we have to work with partners that are willing to help us to do that because we have to ensure that's the case.

OK, and I got a second question, this isn't for Mr. Morris, but who actually owns the wastewater treatment facility? Like who bought it?

So the waste treatment facility belongs to the city of Hollister. There are narratives out there that are cute and fictitious. So let's start with the first one. The city of Hollister, the residents, the wastewater facility is ours.

Yes.

It belongs to us. Now, it belongs to us. However, we receive sewer from other places. It's a public health issue. Think about it this way. I have a facility. I have a sewer plant. Jeff needs to use the sewer plant. I can say no, but then that waste may end up in the bay. We all want to protect the environment, which is even though I don't want to share my facility with Jeff, chances are that I'm going to have to because he can go to then the state and say, Ana doesn't want to help me out. I'm afraid I'm going to pollute the bay and kill some whales. So then the state is going to come and say, open up your plant. Again, plants... are expensive. It's not as simple as saying, Jeff, build your own plant. It's nice to think that we can do that, but we cannot. You have to think about the larger purpose of a treatment plant, which is to protect the environment. It is not about cleaning the water for the sake of cleaning the water. It's about protecting the bay and the animals and the fauna that live in the waters surrounding us. That's what a sewer plant is about.

And I just want to make sure that we're staying within this item. So whatever the discussion, I think it's okay to ask questions about the sewer because that will impact us. Obviously, we're going to have to share the sewer, but I just want to make sure that we're talking about this item and not going off topic. Okay, so let's just make sure that we stay within this discussion.

Okay. So this is a good opportunity to help the, you know, communities that need places to live here in Hollister. We have given sewer service out to various other non-emergency based communities. Areas all around the town and the county. We've literally added thousands of users. And some of them are, as you say, the city of San Juan Bautista definitely needed the help. But did we need to build houses all the way to the east side, the west side, the north side, and the south side of San Juan? of our entire town and connect all of these other users up to the wastewater treatment facility. No. What I do want to say is I'd like to protect that asset and use it for the ways that you are just describing, which is if it's an emergency, we'll hook them up. This instance, because I do have a bleeding heart and I really do believe people want to live here and they want to live next to their family. They want to be a part of this community. Yeah. I'm for this because it is low income based. I just want to make sure that we're managing it correctly. That's all I have to say.

Okay. And, and having with that, with that just last comment from council members, I just want to be very clear. Because on the resolution, it does not speak to low-income housing. It talks about affordable, and that's a very different term. I just want to make sure that we're very clear when we're talking about affordable. affordable rental housing projects are very different than low income rental units. So I just want to make sure. And if it is in fact low income, then we need to change the word affordable to low income. So I just want to be very clear what we're talking about here.

Madam Mayor, if we could ask Mr. Morse, I assume you're still in Zoom.

I am here.

Yes. Would you be so kind to please define affordable?

Absolutely. So at So Madam Mayor, you're correct. I believe it was you speaking. It's a small screen. Yes, it was me. Thank you. Indeed. And so you're correct in that affordable housing as a general term encompasses more than just low income. Low income is but a category of affordable housing. So moderate income housing, for example, could be considered affordable housing. Here in this project, it is low income housing. It is housing for 60%. area media income as well as 30% area media income. So it is for low-income housing or lower-income housing, depending on how you want to define it. And I should make clear, I guess, that there is one, I believe, one manager's unit that is not low-income that will be market rate because that's how generally these are set up for managers.

Okay. Well, thank you for that clarification because... affordable is very different than low income. And I am worried about the term here that says affordable, even though Mr. Morris said these will be moderate to low income. I think that's what you said, right? So anyway, I'm just wondering why are we using the word affordable? Why aren't we just being specific about what it actually is?

Madame Mayor, I would recommend that you make that amendment. So right now it reads, I just saw it.

I think it's on my first line, the first whereas. I'm looking at the first whereas, right?

Construct a 53-unit affordable rental. So instead of saying that, construct a 53-unit rental project that includes 60% AMI and 30% AMI, with one unit being market rate.

Market rate. Okay. Yeah. Yeah. I mean, because if that is in fact what it is, then let's make sure because affordable is very different. That is very different. The term is... Anyway, the definition. Okay. So then I will ask for that to be changed when we are... making a motion for this resolution to reflect what the city manager just stated. So I don't wanna repeat what you just said because I'm gonna say the wrong words. So we know that there's one market rate and then there's, say it again, city manager.

The rest of the units are 60% AMI and 30% AMI. Madame Clerk, you're good with that? Okay.

Okay. Okay. So it just puts them in the different categories because affordable encompasses a bunch of different categories. This puts it in a very specific category so that we're clear that, in fact, we're talking about the 30%. Let me make sure that I'm saying this right. 30% is the ones that are more the most affordable 60% is kind of in the middle. And then the one market rate is just whatever it's going to go at market rate. And it's just that could be whatever it is, depending on the market.

That is correct. Okay.

Okay, so with that, I mean, I'm in agreement that I think we should and we must approve this, but I do wanna make sure that we have that clarification because otherwise the affordable can be anything that is under market rate. And we know that even though it says affordable, it's not generally affordable because California is very expensive. okay okay so i wanna i so i wanna i mean i'm seeing everybody's head nod okay go ahead that's the vice mayor thank you i i just want to ask a question um how does this benefit the city approving this project how would it benefit the city

So it benefits the city in that we are able to show the Housing Community Development Department of the state of California that we are aggressively pursuing affordable housing. In this case, 60% AMI, 30% AMI. Individuals. need to qualify for this. So technically, someone that is making, I don't know the AMI here in our area, but let's just pretend that if you make $50,000, you qualify for 30% AMI. Now you have a rental unit that would be in good condition that will be monitored by the city on a somewhat ongoing basis. in a safe place, et cetera, et cetera. So it gives dignity to individuals who are low income.

Would this put more strain on the current issue that we're having already in terms of our budget and providing resources, or will this have any impact negatively?

Well, Not, I mean, you know, we will have to provide water and sewer, but folks are paying for it. Again, we'll have better rates, rates that are capturing the true cost of those two utilities. The sewer plant... has capacity. That's a non-issue. Our capacity is 4.08 on a good day. We're about 3.2, so we still have plenty of room. Streets, well, there are 53. Let's pretend that there's one vehicle for each unit. We have 53 new vehicles in the city. So on the one hand, yes, there's more traffic. On the other hand, there's 53 new vehicles, hopefully putting gas in the city and not at Gilroy's Costco. So

It would strain in terms of our existing infrastructure minus the water. Because we have space in our water, right? Correct? Our sewer to expand. We have space in water and sewer.

Both. I would add, can I just add to that? Here's the other way that it's going to benefit us, Vice Mayor. This is my own opinion. We entered into an agreement. We have to meet the terms of those agreements. This helps us to meet it. If we don't meet the terms of those agreements, it does not benefit the city. So I mean, I would add that to the list of how does this benefit the city. If we were talking about fair market rate housing, it would not help us towards the agreement that we made. right so that's why it's very important that we distinguish between some of the other types of housing because those other types of houses are not going to help us to meet the terms of the agreement that we made so okay so then lastly thank you uh but lastly would this apply to our arena numbers or no because it's county it's county so no it doesn't go towards rena's numbers

Thank you.

But remember, for RHNA, we have to plan, not build.

Yeah. OK. Just for that. Yeah. No.

I mean, but no, it's true. We have to plan. And then if they build, they build, right? So this is, anyway, but OK. however however the other i think the other benefit is that we know that we have a very very um low inventory of rental units we just do we have a very low inventory and there's a lot of people especially younger people who need to rent and not buy so that's another way that it might help us And I hear your concerns, Vice Mayor, and they're valid. They are valid. But I think it's really about balancing those burdens to the city with some of these other things that in the past, when we have just built these enormous fair market rate housing developments, those burden the city without the additional benefits that this kind of a project may add to for our residents. but your concerns are valid. Okay, I'm gonna go to this side. Any questions or comments on this side? Okay, so city clerk remind me, did we go to public comment on this one? I think we did, right? Okay, so I need a motion and just know that whatever motion includes the change to be more specific about what the 53 units really are. with that change. So if I could get a motion from someone.

I'm just going to say approve resolution as amended by the mayor, as instructed by the mayor.

Okay. Can I get a second?

I'll second.

Okay. And then I'm going to ask for a roll call vote on this one. Okay. Go ahead. City Clerk.

Council Member Pache.

Aye.

Council Member Morales. Vice Mayor DeAnda.

No.

Mayor Stevens.

Yes.

That passes 3-1. Okay.

Thank you. Okay. Let's move on. So we are now at... Let me find my space here. 7.3, so we're at a resolution approving a policy regarding disruption of telephonic or internet service during city council meetings. So can we get a quick staff report on this one?

Yes, good evening, mayor and council members. Angie Gonzalez, acting city clerk. Just one sec. First one. Okay, so SB 707 was enacted in 2025 and it amends the Brown Act. Its intention is to diversify and increase public engagement during local government meetings. It requires a hybrid public meeting and adoption of a meeting disruption policy and it's effective July 1st, 26th through January 1st, 2030. So for the requirements, slide two, three. The requirements is to provide opportunities for public participation via telephonic or video conference, live translation and captioning during the meetings, translated agendas, and physical location where members of the public could post their own translated agendas and the adoption of the disruption policy. So for the first bullet here, the city of Hollister is already providing the hybrid approach through Zoom. We're already compliant in that. We already do the live captioning and we provide wordly translation. We're already compliant with that. The meeting translated agendas for our city, we would have to translate it into Spanish. So it's any language where the population of the city speaks English. English less than very well by 20%. So the only language that falls into that category for Hollister is Spanish. So we will begin providing the Spanish agendas after July 1st. And then the physical location, we worked with our maintenance team and they had retrofitted a public display board right outside that we could unlock and members of the public can now access to provide their own meeting translated agendas. And it could be in any language they want to provide them in. And then the translation policy is before you today to review. So the policy is required by SB 707. It establishes the procedures when remote access is interrupted. So an interruption to our Zoom platform or the internet, where it prohibits members of the public to comment online. And then it helps maintain transparency and accessibility. So the policy overview. This policy explains what the city will do if the remote access fails during the city council meeting. Again, disruption is failure of telephonic or an internet service, which prevents members of the public from attending, observing, or providing public comment remotely. And the city council is to recess the open session and make good faith efforts to restore the service for at least one hour, unless the service is restored sooner. And then if the service cannot be restored within the above described parameters, the City Council may continue the meeting after finding through roll call vote that good faith efforts were made to restore the service and that the public interest in continuing the meeting outweighs the public interest in remote public access. Disruption and related actions must be documented in the meeting minutes.

Is there any questions? Okay, thank you for that report. Questions, please. Questions on this side? No. Okay, let's go to public comment.

I have no public speakers for this item.

Okay, thank you. So we'll bring it back. So can any further discussion or questions or an action? Motion to approve. Can I have a second, please? One second. All those in favor? Aye. Any opposed? Okay, resolution passes. We move on to the next item. And now we're at 7.4, water rate discussion and adjustment to water rates. Let me get a separate one.

Madam Mayor, council members, I'm very excited to bring this to you. As you may recall, my first day here, we got to talk about water rates. And we indicated that we wanted to 100% make sure that the numbers were sound. And so in light of our difficulties with the budget, it brought this particular item way up in the priority list. Originally, we thought we would come to you in September. First in December, then the mayor asked for September, but here we are. Because we need to start making our water fund an enterprise fund. So the good news is this. The numbers that Raftel has produced are good numbers. They're better than the ones I produce. So we're going with it. And so what we have right now, bottom line is this. We're going from the base for 5 and 8th was $13.29. You approved a 30% bridge fund. rate that brought us to 17 and change. And now we're going to 33.33. So the rate, if you look at the tables in your documents, look at where it says proposed, I'm looking at the one in Spanish, proposed fiscal year 27. So it's the $33.33 rate. And we've included, just to remind you, we've included the presentation that the consultant brought to you in October last year and also in January this year. Same analysis, nothing's changed. This was part of the 218 process. We have 218 notifications included there as well. What legal counsel had indicated was as long as we stay within the tables, the rates that we had published, we are okay using the same 218, which is exactly where we are. So to cut a long story short, I'm asking you to please adopt the rates that were presented to you originally in October, then again in January, as we need to start making this fund sustainable.

Okay, thank you for that report. Questions or comments?

Yeah, yeah. Go ahead, Council Member. You know, I was never excited to raise rates on any townsperson, especially, you know, people on fixed incomes, people who know their income doesn't fluctuate throughout the year. It's the same constant, you know, and then any increase in price hit the hardest. So I'm never excited to raise rates. But I was excited. comfortable when Raftalis put this forward to us because it really did sound like an enterprise fund needed to operate like an enterprise fund. I do have a question. Sunny Slope Water operates on the east side of town. And then effectively, if you look at it, the city of Hollister and Hollister Water is on the west side of town. Which side of town would you say is older and might need more capital improvement project monies moving forward?

Our side.

The Hollister water side?

Yeah, the city of Hollister. We have the historical community. The historical district is on our end.

So do we know when Sunny Slope Water raised their rates to the rate that effectively we're looking to kind of put it right next to theirs?

I don't know, Councilman.

It's got to be something.

I can tell you as a Sunny Slope customer that it's been gradually over the years. I've lived in my home for almost 25 years and it's been gradually, we've seen increases gradually over the entire time that I've lived there. So it's been definitely little by little over the years. And so it's not wind, it's just, it's sort of like an ongoing, we know it's going to likely happen every year.

That seems like a really much better way to do this sort of thing is just 2% to 3% per year since 2018. And just, it's a cost of doing business. The cost of getting the water is more expensive. The cost of, you know, Sunny Slope is actually conditioning the water. It's just getting more expensive and cost... Believe what you will about inflation. It's technically the devaluation of the dollar. It's not the general slowly creeping up of prices. It's the fact that you need to spend more dollars because each dollar has less purchasing power. It does. It is more expensive. So I just wanted to throw that out that we are on an older side. We're going to have more capital improvement projects on this side than they are on the east side. And they raise the rates slowly over time, which does seem to be a much better way to do business. It doesn't make it so expensive. ham-fisted, so I'm hoping that we can follow suit and keep a keen eye on what Sunny Slope Water is doing with their rates and we potentially follow suit.

Okay, thank you for that. Other questions or comments? Council Member Morrell, let's go ahead.

So I understand that this falls within the previous 218 notice. However, I don't think it's on it. three days to kind of revive a previous notice for our community in the spirit of, of, of two 18. So I, I'd like to defer this to our next council meeting for final approval, just so that the community is aware that we're going to be voting to increase the rates. Community members already know that like the garbage rates are going to increase. This is going to be another increase. We talked about the impact to the community. So at least our, our residents can come here and, and, voice out any type of protests if they wish with one more meeting.

Okay.

Yeah, I'm not really sure. I mean, it was on our agenda, so I'm not really sure what a week is going to, I mean, I'm not sure.

It's only a week. It's more, for me and for my rest, I can tell you this. I can at least say, hey, this is on the agenda. Three days is not, first of all, people don't look at the agenda as often as we do. Two, I think if three days for them to look at this, I think with the budget, it's a lot. And one more week, at least we'll say, we acknowledge that three days might've not been enough. If you really wanted to come in and protest, you have Monday to come and do so. And then we can say we at least attempted to give people a little bit more time. It's not ideal.

Okay. I think we should move forward with this tonight. I'm okay with deferring the rest of the council. If you guys want to move it to next week, I'm okay either way. I'm going to just go with the majority of them.

I'll second that. You'll second what? That we defer it till... It sounds like we're having a meeting on the 22nd. I'm assuming it's at 5.30 or 6 o'clock. I'm...

So you want to wait until next week? You want to wait?

You want to wait? Okay.

Okay. So I'm okay with that. I'm okay with that. And if the rest of you are, then we can do that. But I mean, ultimately, it's going to be the same information. It's really about changing the base rate. It's from... Tell me again, remind us again, from 17 to 33, is that right? From 17 to 33, and then obviously the more water you use, the more you pay, the less water you use, because your water will go up based on how much water you use, but the base is the one, is the rate that we are talking about for the increase. Okay, with that said, let's go to public comment, and then knowing that we will be coming back next week. So do we have speakers for tonight?

We do.

Okay, let's hear the speakers that we have here tonight.

Victoria Montoya, followed by Rodrigo Aguilar.

Yes, my name is Victoria and I live on 1671 Central. And I think I came and spoke at the last meeting you guys had about the water rates. And my concern is that what I understood in the last meeting was that not every part of the county was paying the same price. And what I got here is what's going to happen in July. Now, I live on the west side. Are we going to be able to be paying the same thing as the people that are on Fairview Road or the one in San Juan Oaks or the central part of Hollister? I think that's my only concern because I think there's more of us that are senior citizens on low income. And even if it's under $200, when you pay your house tax and whatever, we are broke. So any penny that we can save would be good. But again, I don't understand the politics, so I'm here to learn.

Thank you, Ms. Montoya. Next speaker. I'm back again.

Council members, very quick. I know there's a lot of writing on this water rate increase. Pretty much. And what I wanted to know is do we have a contingency plan in case the rates don't increase? Because this has to be put to a vote. And All you need is one vote over 50% of all the parcels that are available to vote, and it won't pass. If they protest, they oppose it, one vote over the 50%, that's all it's gonna take. So if we're counting on this money, water and rain rate increase, where is that gonna put us if it doesn't pass? Because we already seems like we're at our bones. but I'm trying to be optimistic and I'm hoping it will pass. And now SEIU would like to lend a helping hand and if we can educate the community, help do outreach, however we can, SEAU is available. I personally live in the other side of town. So for them, it's a little bit different. Their district's a little bit because it's a private company. And I don't know if this will help, but they're kind of exempt in a way. Municipalities, they do need to put it to a vote. As long as private companies don't need to put it to a vote, as long as they don't exceed the cost or the water rate doesn't increase the cost of the water purchase, they'll be good. So they are increasing their rates every year. And that is what it is. I live on the other side of town, so I got to pay. Last year, I think it was 4%. So it's been gradually increased every year. We fell behind the curve. And we all did. We all fell asleep on the wheel. And we can't blame, it's too late to put the blame, play the blame game. So I think at this point, we just got to move forward and then see how can we fix the problem. And however we can do, whatever we can do to help, we're here. I see how you'll see it for you guys. All right.

Thank you, Mr. Aguilera. Mariam? More speakers?

The last year.

Anyway, my name is Miriam. Hello, everyone. I'm not too happy about the increase of this because I am a single person trying to deal with a lot of things. And I try to save water as much as possible. I keep a bucket in my bathroom, in my tower, in my bedroom. And I try to save my water. keep it in the plants, keep it in the toilet, trying to save money, trying to help everybody. But the price continues increasing, so I don't understand why. They build many mansions in here, and I only have one bathroom. That's it, I have. And more than $200 in water. So what is that? When do they help us? I'm a senior. And when is this going to end? Do you have any understanding how we survive? Everything increases? And where do we go with all of this? I hear all my neighbors complaining. There is no end to this. What can we do? Can you help us? We are seniors. So what is the thing of the big houses are being built in here? Two, three bathrooms. And yet what is for them and what is for us? Is there anything that can be done? Can you give me an answer? Can you help us? Can I hear something today from you about something that can help us? And I'm here in the name of many seniors and many people in my community. We are low-income housing. And yet, we struggle every single day. And everybody complains about increasing this and this and this and that. They didn't go into it. They just built a, what do you call it, Starbucks across the street. And they're going to have a lot of water that's going to be needed in there. They're going to have a cruise from Starbucks. They're having a place that is going to have 84 townhouses open. Somebody is going to buy that land and build more on top of me, on top of all the neighbors. Where is the water? Where is the oil? Everything is going to come. When is it going to end? Can you help us? Can you do something? Can you give me an answer tonight? Because I'm really desperate. I'm trying to figure a way to survive and I can't.

Thank you. Thank you. Yeah, I mean, it's a very difficult situation. Ultimately, the only answer that I can give is that, like everything else, our costs are going up and the only way to pay for this is... That's the only way to pay. And if we don't, then I guess the concern is that we will not have a water system to provide because we won't be able to pay for it at all as a city. So I hear what you're saying, but I will guarantee you that Starbucks is having to pay their water bill Any townhouse, they're going to pay their water bill. Everybody has to pay their water bill. And we hear you. But we are asking that there be information about supports, like supports for seniors and other people who are struggling with paying some of the water and other costs that are going up. Those are the kind of things that we're going to have to look into and look for help for seniors and others that are struggling. But ultimately, the concern is that we will not be able to sustain a water system if we aren't able to pay for it. And that's where we're at right now, unfortunately. It's a very difficult, another very, very difficult situation to be in. Yeah, really sorry. Okay, but because the majority of the council wants to move this on to next week, then we will go ahead and move this, finish this to give the public a little bit more time to chime in and we will put this over for next week and we will finish. Can I just make one quick comment? Yes, because it's getting really late and then we have a few more items.

Just real quick, Victoria and Miriam, we did discuss that as uncomfortable as raising your rates are, especially on a fixed income, the PG&E has a California alternate rate for energy. It's called a CARE program. It's a 25%. I don't know what it is on the PG&E side, but if you were on the CARE program with PG&E, California alternate rates for energy, you get a 25% discount off your Hollister water. So if you haven't already done so, I would go through and get, you know, all the documentation over to PG&E so you can get your 25% off of your Hollister water bill. Does that make sense? It's a little something.

Okay. Okay. Okay, so we're not going to, we can't have the discussion back and forth here. So we do, I think we did provide this information. And maybe we should, we can provide it again, to make sure that the residents will continue, we'll get that information. And then we're gonna move this item to finalize the item next week at our meeting.

Okay.

This is for SEIU. Point of clarification, this is not going to the voters. This is just a city council vote.

Right. Yeah, yeah. So I wasn't, yeah, I wasn't really, I assumed he was talking about majority here, but it won't go to the voters. It will be decided here at the dais.

Yeah.

okay so we're going to go on to 7.5 consideration of participation in amicus litigation opposing the proposed federal detention facility in south santa clara county coming through monterey county council can we get a quick staff report on this item

All right. Mayor, members of the council, and members of the public. So, City of Hollister was presented with an opportunity through Monterey County Deputy Council reached out to us, and they are giving us an opportunity, as well as other agencies and surrounding... interested parties to participate in an amicus brief where we would be able to state our opposition against the proposed detention facility that has been generating concerns among local governments and community organizations regarding the potential impacts on immigrant families, community wellbeing, and regional resources. So this federal facility is proposed for construction in Gilroy. And so this is we are looking for council's direction, whether we should take the opportunity to state our concerns as an agency against the proposed construction of the federal facility in Gilroy. And this would be direction for us to participate with Monterey County. And so as the staff report indicates, So yeah, we would be. We basically just sign on our. What our position is on the federal. Facility and then. At this point we would participate in coordinate with the Murray County Council and with our city attorney as appropriate regarding this participation. So.

OK, thank you. Questions, comments from any of us, if there is?

I'll just make a comment. So I think the state just joined Santa Clara. Monterey and Santa Cruz also joined just recently for the amicus. I'm tired. Amicus. I mean, I think.

So I fully support it. The ways that you might have heard this, it's like friends of the brief, like you're joining a group saying, we support the opposition of Santa Clara County to this detention, federal detention center, which It's an ICE detention center, so we can call it a federal detention center, but it's ICE. And I agree with Councilor Morales. The fact that we have so many immigrant families, it seems like an effort to just spread fear among our immigrant community. So I worry that it's right in our backyard. It's essentially proposed for a lot, a piece of land behind the outlets. So basically, it's like literally, like, like just over the fence of our backyard. So I, yeah, makes me makes me really nervous as well. So I support I'm looking supported this too.

Mayor, do you have any questions or comments? Thank you, Mayor. Yes, there's absolutely no hesitation, no question, 100%. And I just want to say the residents in Gilroy that are impacted by this, you know, just my heart goes out to you. And it's just really unfortunate that essentially you're... being pushed up against the wall and because when it comes to the federal government there's not so many decisions so if we can all build a coalition and come together with neighboring jurisdictions to provide that support and possibly have something you start you know basically fight together essentially to combat this. It's, I mean, yeah, it's an ICE detention center, but it's all, I look at it as like human warehousing. It's absolutely atrocious and I can't, I cannot support that. So yes, absolutely. A hundred percent support this. Thank you. Thank you for bringing it forward too, Jeff. Thank you.

Okay. Let's go to public comment on this item and then we'll bring it back.

I have no public comment for this item.

OK, so bring it back. And further questions, comments, a motion?

I'd like to make a motion to support the amicus litigation.

I have a second on this one.

I'll second.

All those in favor?

Aye.

Any opposed? No opposed? OK. Thank you for that, Jeff. Appreciate it. And we're going to move on to committee assignments. So is there anything that anybody has to report on any ad hoc, any standing committee, anything to report? Council Member Morales? You say no, right? Council Member Fischier?

Yeah. On June 10th, I went to the Association of the Monterey Bay Area Governments, and they've been working on it for years. This is the culmination of years of effort, the final 2050 Metropolitan Transportation Plan. We've discussed it in here at this exact same time of every just about most meetings. I go once a month. And the sustainable community strategy is in its final leg. It's been up on their website for many a moon. And the recommended action was that we move forward with the plan. It looks good. It's gone through all the approvals and we were mentioned in it. We've got, you know, our transportation woes, but we've got some good things going on. So yeah. It's moving forward. So that's all I have. That's effectively the nuts and bolts of the meetings. They're moving forward with that. And if you want to check it out, because the pub comment period is over, check it out on the AMBAG website.

Great. Thank you for that report. I don't have anything to report. Do I have anything to report? No, I don't either. Okay. So we're going to move on to city manager's report.

Very brief, council members. Director Hernandez tendered his resignation today. So I will be in the process of bringing an interim director for the public works department who will help while I recruit for a permanent public works director. It is my intention to bring a public works director with a very strong background in utilities. More and more, it becomes apparent that utilities is... a potential Achilles heel for the city. So I wanna make sure that we bring an individual that has that background and we'll be able to think about new ways of structuring the utility so that we can do truly more with less in this particular case. So that would leave us with a new HR director coming in July 1st with a interim chief of fire coming in tomorrow. And then hopefully an interim public works director in the next few weeks. I've made a lot of phone calls. I've gotten some replies as we were sitting here. So I like to think I'll have someone sooner rather than later. And with that said, that person will have to get caught up quickly on our sewer plant woes and some of the challenges that we have with the notices of violation. And then with water, the main priority will be, of course, the rates and making sure that the rates are implemented accordingly to make sure that we're keeping an eye on costs. And on work plans, I think that one of the challenges that we have had in the public works department is that we do not have work plans for our operations. And I hope that the next interim director will help put those in place and it would help make our operations a lot more efficient. So with that said, thank you so much.

Okay, thank you for that. If there aren't any questions or comments for the city manager, I will adjourn the meeting. Thank you. Thanks for your patience with this meeting. Long, difficult meeting, but we have more to come.