City Council - Regular Meeting

Stephanie Adams, can you test your volume, please?

Can you hear me okay? No, you can't hear me?

Yeah.

Okay, great. Thank you. Mm-hmm.

Thank you for coming, calling this meeting to order at 539. Let's see here. Okay, so this is a special meeting of the Hollister City Council on June 22nd. Call to order again at 539, call to order.

Okay, so Council Member Dr. Resendez, would you lead us in the Pledge of Allegiance, please?

I'm Gary LaPlaz.

So I see that the mayor's joined us. Do I resume?

Okay, Mayor, can you hear us?

You're muted. I can, but I need a minute. So if she can just move forward and then just give me a minute.

Okay, perfect.

Thank you.

So... Do any members of the council have any brief questions or comments on the items from the consent agenda? Oh, roll call. Sorry.

Council Member Pache. Present. Dr. Resendez. Present. Council Member Morales. Here. And Mayor Stephens.

Here.

And Vice Mayor DeAnda. Here. Thank you.

So do any members of the Council have any brief questions or comments on the items from consent agenda?

Madame Vice Mayor, if you would be so kind, we need to remove item 4.3 from the consent agenda and put it on the regular business. This is an item that we are doing through the direction of CalPERS. And CalPERS has indicated they will not accept this item to be in consent. It needs to be in the regular agenda.

Madam vice mayor, question for legal, do we need to make that a motion? Or can we just move forward with a suggestion from the city manager?

Give me just one second.

i think just to be safe i'm going to go ahead and make a recommendation so if you can call for a motion madam vice mayor can i get a motion please all first all second all those in favor aye aye any opposed

All right. And just to clarify, is this to adopt the consent calendar items with the removal of item 4.3 or it's just full item 4.3?

I can make that motion. Sure. So I'll move to adopt the consent as presented by staff and also to move 4.3 to a regular action item.

Perfect. Thank you.

I'll second.

Thank you. Council Member Pichet?

I'll second.

Roll call vote.

Oh, present.

Roll call vote. A, nay.

Yes.

Thank you. Dr. Resendez?

Aye.

Council Member Morales? Yes. Vice Mayor DeAnda? Yes. Mayor Stephens?

Yes.

Thank you.

Thank you. let's see do any do any members of the council have any other items they wish to pull from the consent and we don't have any comic cards or oh one more jamie salinas

Jamie Salinas.

Is this for regular public comment?

I'm sorry. I'm so sorry. If I can get clarification, Madam Vice Mayor. i thought we didn't call for public comment for consent agenda so i was trying to get that typically do call for public comment for consent agenda this one just wasn't labeled for public comment um my other question is i don't see public comment on here and i'm wondering if it's because it's a special meeting we didn't agendize it for public comment However, I would still be willing to take public comment because we have so many members of the public here. I'm just getting clarification on that.

We do not have a public comment for non-agenda items on a special meeting agenda.

Okay. But I would make a motion that we open it up for public comment due to the fact that we have so many members of the public here. And I just want to have that on the record.

For non-agenda items or for consent?

any well i would assume for non-agendized items right yeah so so if you if you want to modify the agenda it would be for for public comment on non-agenda item as long as the city council has jurisdiction over the issue okay so then i will if it's okay i'll make a motion to open up public comment for non-agendized items to allow the public to speak during public comment

Is there a second on that motion?

I'll second.

Okay, I'll do a roll call vote. Council Member Pache.

Aye.

Dr. Resendez. Aye. Council Member Morales. Yes. Vice Mayor DeAnda. Yes. Mayor Stephens.

Yes.

Thank you. Go ahead, Ms. Salinas.

Good evening, Mayor, council members and community leaders. My name is Jamie Salinas and I'm a founder of House of Hope and Healing Hearts, a nonprofit transitional housing and support program serving vulnerable young women ages 18 to 25, including survivors of human trafficking, domestic violence, foster care involvement, homelessness and youth impacted by the juvenile justice system. I am here today to advocate for something that is both urgent and deeply necessary for our community. Safe, accessible support for survivors of sex trafficking and domestic violence. In San Benito County, survivors often face a devastating reality. When they are ready to escape abuse, there are limited local resources available to help them do so safely. Many are focused to leave the county, disconnecting them from jobs, school, family, and critical support systems. Others tragically remain in dangerous situations because they simply have nowhere to go. Today, we are proposing the development of dedicated sanctuary in Halster, a place of safety, healing, and hope for survivors. This program will provide emergency shelter and transitional housing, trauma-informed counseling and mental health support, advocacy and case management, resources for rebuilding independence, including employment and education support. This is not just a shelter, it's a lifeline. Investing in this program is not only the right thing to do morally, it is also fiscally responsible. Survivors who receive stable early support are far less likely to require emergency medical care, law enforcement intervention, or long-term dependency on public systems. In short, this program saves lives and it saves taxpayer dollars. We are asking the city today to partner with us to providing funding to help establish and sustain the sanctuary. Your support will directly impact the lives of some of the most vulnerable members of our community, women, children, and individuals who deserve safety, dignity, and the opportunity to rebuild. Hollister has always been a community that cares. Today, we ask you take a stand and demonstrate that no one here has to suffer in silence or fear. Together, we can create a place where survivors are not just protected, but empowered to thrive. Thank you for your time, your leadership, and commitment to our community.

Thank you. I do not have any more public comment cards. Okay.

Do I continue, Mayor, or are you going to jump in?

Yeah, I can jump in. I can jump in. Thank you for your patience, everyone, as I'm dealing with some technical issues. Okay, so hopefully you all can hear me, and I am going to then move on with... Okay, so we've gone through the consent agenda items. Is that right? Just remind me that we're there.

That's correct, Mayor. And also, if you could announce your remote participation, please.

I'm sorry, say that again.

She's going to need a little help. She could not open.

I was not able to open the document. I'm sorry. The link that I was sent in the document that I was sent, I was just not able to open it. So I'm going to, yeah, I need some help with that.

Okay. Can you confirm that you are joining us remotely under just cause of SB 707?

Yes.

And is there anyone under the age of 18 joining you in the room?

No.

Okay. Thank you.

Okay. Okay. So let's go ahead and get started with our regular agenda, but I think we're going to start with the polled item. So city, I'm not sure, city attorney or city manager, do you want to go ahead? give a report on that one?

Yes, indeed. Madam Mayor, members of the council, this item is administrative in nature. It is a requirement by the CalPERS administration for us to pass a resolution during the regular, in the regular calendar, acknowledging the fact that we are about to bring two annuitants to serve in an interim basis. The first annuitant will be our interim fire chief. And the second one is an interim parks director. The first one is an actual vacancy of which we have to start recruiting. Well, we already started actually, so as soon as possible. And the second one is someone who's on leave and it is undetermined when that director will come back. So at this point, we're just preparing for plan B. The language we got from other agencies that have had to pass the same resolution and against administrative in nature simply acknowledging that these are annuitants. They will not ever become permanent employees and that we are looking for replacements where applicable.

Okay, thank you for that report. Let me check in with the council members to see if anybody has any questions or comments for city manager. You're not seeing any. So I'm thinking, so let me just double check. Are we, we're going to public comment on this item, even though it's pulled?

Yes, please.

Okay, so let's go to public comment.

And we have no speakers for this item.

Okay, let's bring it back. So can I just check in with members of the city council? Do you have any other last minute questions or comments? Or would somebody like to call for a motion?

So I have a quick question, probably for the city manager. So, you know, we're losing two, you know, pretty key people in the city. How are we doing the recruiting? What have we done so far? What can we tell the community?

So let me only address the fire chief as the parks director is to be determined. I don't have much information. So again, we're just preparing a plan B. For the first, on the other hand, we will be doing a full recruitment for a fire chief. It will be a national recruitment. I will certainly be part of that. The new HR director will be part of that. Between the two of us, we would like to think that we can bring anywhere between three to five super qualified individuals. We are not looking for first time fire chiefs. We're looking for experienced fire chiefs. We believe that we are a competitive jurisdiction and therefore we do not need to settle. And so we will go far and wide until we find the right set of candidates. We believe it will take anywhere between three to four months I tend to do recruits fairly quickly. However, this is slightly different in that I'm fully employed. Before I was only doing recruitments, but now that I'm fully employed, I don't have time on my hands to do a full-blown recruitment. But we will bring excellent candidates of which the fire union will be part of the panel that will interview those candidates. Our intention is to make sure that those most impacted by this new hire are part of the recruitment process.

Thank you. Okay, any other questions or comments? Go ahead. Council Member Morales, I believe that is.

Yes, thank you. Since the person, the Parks Director, is still employed and it's unknown when they're coming back, why, and I'm just asking out of curiosity, why not have a work versus going out to recruit? I'm sorry, repeat the question? Working out of class.

Oh, unfortunately, we don't have employees that would fit that requirement.

Not even lateral?

No, not even that. Actually, well, our airport director has been acting as airport director, economic development director, and rally director, and everything in between. So I don't want to lose Jeff.

Okay, any other questions or comments? Okay, so I'm going to call for a motion.

Move to adopt as written.

Second.

Can I get a second?

Second.

Roll call vote, please.

Council Member Pichet.

Aye.

Dr. Resendez. Aye. Council Member Morales. Yes. Vice Mayor DeAnda. Yes. Mayor Stephens.

Yes.

Motion passes.

Okay, thank you for that. So let's go ahead and move on to a public hearing. So this is a continued item from last week, public hearing on adopting the fiscal year 26-27 recommended budget, authorized position summary, and for the fiscal year 26-27 appropriations limit. So can we get a staff report on this one?

uh madam mayor members of the council um before we go into the actual presentation um if the city clerk would be so kind to put it on the screen um let me address it um give you a little bit of context i'm not going to repeat that we have problems in the general fund you know that I'm not going to repeat that we have problems with the water fund. You know that. What I've neglected to share with you is some of the good things that are happening. You had requested for an approach that was sort of in the middle of the two scenarios that we gave you. And that's what I'm prepared to present tonight. I want to emphasize the Council's commitment to long-term financial sustainability and the importance of maintaining financial discipline as we navigate this budget process. The decisions before the Council are not easy. They affect people who have devoted years of service to the city, and we must approach this work with appreciation, honor, respect, and care. We value the employees who serve our communities every day, and we do not take that commitment lightly. We also recognize the important role of our labor unions in our unrepresented employees. The unions have been strong partners and effective advocates for their members in this process. We remain committed to working with them in good faith as we address these financial challenges together. I especially want to thank the leadership and staff representatives of SEIU for their counsel and engagement. Through candid and constructive conversations, we continue to identify honorable paths so that we can move forward. Regarding workforce reductions, we are currently considering only voluntary attrition. Let me repeat that. At this time, we are considering only voluntary attrition. We are prepared to offer retirement incentives to eligible employees and, if necessary, voluntary separation packages for employees who are not yet retirement eligible. We will also facilitate transfers from water and stormwater into other departments wherever opportunities exist and discuss recall provisions for employees who voluntarily separate. Our goal is simple, explore every reasonable option that supports employees while protecting the city's long-term financial health. But tonight is more about balancing a budget. It is about positioning the city for the future. On the revenue side, the proposed budget includes interfund loans from sewer. These interest-bearing transfers will be executed through proper resolutions with full transparency, as it is the law. It is a financial best practice that has not historically been utilized by the city, but one that we fully embrace. We will pursue partnerships with residents, businesses, labor, nonprofits, faith community, and private sector partners as we work towards establishing a sustainable stormwater utility in November. We will ask the voters to approve this utility. We will continue advancing the creation of a fire district that enhances public safety throughout Hollister and throughout the county. We will bring this game-changing option to the voters in 2028. We will continue removing barriers to business creation, expansion, and retention. Our business department's development revenue team has embraced innovation, challenged outdated processes, and worked with urgency because time truly is money. We are encouraged by emerging commercial opportunities along San Felipe Corridor and near the airport that can strengthen our economy and expand future revenue. We will reduce commercial vacancy rate. After all, empty buildings don't create jobs, generate sales taxes, or strengthen our neighborhoods. We will aggressively pursue grants and new revenue opportunities through partnerships with the Chamber of Commerce, Downtown Association, Business Council, San Benito Community Foundation, and our state and federal representatives. We will also leverage the expertise of our highly trained staff to provide services and secure funding opportunities that have historically gone somewhere else. Those efforts reflect our commitment to financial discipline, responsible stewardship of public resources, and respect for all employees, represented and unrepresented alike. We have the opportunity to reinvent local government, challenge assumptions, rethink how services are delivered, and build an organization that is more responsive, resilient, and effective than ever before. Franklin Delano Roosevelt reminded us, the country, he said, in this case, the city, demands, and here's the quote, bold, persistent experimentation. That's the spirit that is guiding the new budget, bold, persistent experimentation. Together, we will lift public services to new heights through innovation, creativity, and yes, disruption. But not disruption for its own sake, but disruption that creates better outcomes for our residents, empowers our employees, and strengthens our community. These are not cliches. They're premonitions. The challenges before us are real, but so are the opportunities. If we remain disciplined, united and willing to embrace new ideas, we will emerge stronger, more capable and better prepared to serve the people of Hollister for generations to come. So please keep this as the context for the presentation that is about to start. So if we can go to the second slide, Madame Clerk. So again, We wish to thank you, union reps, shop stewards, and other allies. I wish to thank the senior leadership team, community members, legal counsel, city council, and mayor. And again, special thanks to SEIU for their persistence, their partnership, and their candor. And we are and I am better because of you. As far as the goals, the next page. The goals for our budget, long-term financial sustainability through economic development and lean operations. Financial discipline, fire, police, and potholes. And it goes back to that, fire, police, and potholes. but also appreciation for those who have been loyal to the city, partnership with the unions and their amazing stewards, retirement incentives as our first option, voluntary separations for those who are not a retirement age, facilitation of transfer from water and stormwater to other departments as needed, adopt recall provisions for employees who voluntarily separate in pursuing the right person for the right job. So in the next page you have a list, and I put a black and white version of that chart because it's hard to read, and there was one page that was missing. I want to make sure that the union reps have that. SCIU, yes, please. Police not hear fire? Oh, okay. So let's make sure that we give you that. I put extra copies out on the table. Okay, thank you. So what we did, per your direction, we have every position that is currently in, so as of today, the positions that exist, plus positions that we're adding. For example, we are adding five firefighters. That's here. We're adding other positions in similar fashion. And at the end, if you look at the very bottom, you will see that at the preliminary of 622, as of today, that brings us to 201 positions. As of 615, we have 182 positions. Where the math gets interesting is a particular position may be filled by two people. So someone who may be leaving a position to be promoted or lateral to another position is counted twice. Because again, there's a process. So I can say that Joe Blow is gonna go from position A to position B. I can't say that because there's a process. Joe may or may not be the one, and so therefore I have to count them twice. So some of the positions are counted twice for that reason. So ultimately, our goal would be to 174, but that is not July 1st. That is not July 15. That is not August 1st. It will be when we get there. Again, the approach here is to start with retirement incentives, then follow by voluntary layoffs, and at that point, determine where we are and Make decisions according so that's the big picture as far as the positions, the finance director will go through the budget with the Council, but before we do that any questions.

Okay. So part of the, you know, becoming whole financially again, either plan, you know, either the Brazilian or the status quo involves loan from a functional fund, the sewer. and loaning it to the water fund. So either way, we're going to borrow from ourselves to get through the year effectively. That is great. And from what I'm hearing, it sounds like we're going to do it the usual and customary way. Is that what I'm hearing? That we're going to do it the legal, usual, and customary way where we have terms, we have repayment schedules, and potential interest payments. We're doing it by the book.

When we borrow from the sewer fund, it's no different than borrowing from Bank of America, Wells Fargo. We have to come to you. There has to be a resolution. We have to pay interest rates according to what the local investment pool is in the state of California. So there's no just moving money around. It doesn't quite work that way, even though in the past that seemed to have been the practice. That's not what we're doing.

Okay.

And as far as the presentation, maybe it's just my own ignorance. I'm still learning up here. I'm not going to hang my hat on being a rookie for too much longer. But number nine, can we go back to that multi-layered? Yes, for that.

Number nine, adopt recall provisions?

I think so. Let's read it again. There was a list.

Where the pan dulce is, madam. There we go.

There we go. That one, adopt recall provisions for employees who voluntarily separate. Can you explain that? Yes.

Yes, indeed. So right now, we have a contractual relationship with the unions, meaning that no different than between a renter and a landlord. You do whatever the lease says. You don't really go outside because it's a contract. So our MOU with the unions is exactly that, a contract. However, the contract does not have any language about recall provisions. So some of the unions asked If that was something that we could consider, I indicated that, of course, we would consider if, for example, we found that, indeed, we were missing a zero in the revenues and we do have money. And let's say five people had taken voluntary layoff in those five positions cannot be reinstated. We do want to provide first right of refusal to the people that we ask. to take the voluntary layoff. We'll have to work out how they give the money back, but that's secondary. But the idea here is if we are wrong, if we were too conservative with the revenues, if we miscalculated anything, and a position can be reopened, then of course we're going to give first right of refusal to the person that was in that position before, even though that's not in the MOU. But it is the just thing to do to folks that have been loyal to the city.

Thank you.

All right, so we'll jump into the financial piece of it.

Good evening, council members. Jessica O'Connell, Director of Finance. I hope everybody had a chance to go through all the documents, but what I thought I'd do tonight is kind of give you a brief overview of all the information provided because it is a lot of information. If I could take your attention to page 137 where it says fund summary. If you look at that page, you will see all the funds listed. And on the variance favorable and unfavorable column, it basically gives you 137. Okay. Okay. The page number well there's two page numbers there's one very small that says 110 and the big print says 137.

The wrong that's the wrong page I have. Yes.

Okay, this page here is your fun summary basically it takes your estimated revenues and your budgeted appropriations for the year and it nets it out. And it gives you the difference either it's favorable or unfavorable so, for instance, if you take the general fun. It is showing under original year-to-date budget, the very first column, that we're negative six. What that means is we have budgeted more expenses than the revenue we're bringing in. And if you follow along all the funds, you'll pretty much... have a general picture of where all the balances are. If you want the detail of that 0.63 million deficit, you would go to page, and I'll just take you to the last page, and that is page 39 or 12 of 110. I'm not sure how it's numbered. it's at the very beginning of the packet. keep going keep going right keep going towards the end of that's page 39 has it on the bottom, the page numbers. Okay, there you go. If you look, you will see under original year-to-date budget, you will have the revenues of 50 mil and expenses of 56, and it nets out to the negative 6.3 mil. And the pages before this page is basically the breakdown by detail in salary and benefits, services and supplies, and other expenses. And i'll pause there in case anybody has any questions and that's pretty much the format of each of these reports for each fund, so if you go to water, you will. Page 71 and I don't think you really need to scroll there, but just as an example, give you the same you know information. So I can open it up to any questions if anybody has any questions. I do want to touch a little bit on the Interfund loan. Interfund loans are acceptable provided that we follow a return of investment interest rate that's comparable to our current investments and the city of hollister has two investment pools one is with lafe the local agency investment pool and also wells fargo investment and they're pretty much at the 3.81 interest rate right now So that's what we would be applying for the Interfund loan as a repayment back to the sewer. And once again, I'll open it up to any questions if anybody has any questions.

Does anyone have any questions?

I'm just going to ask another just, you know, straight off the top of my head. So the $6.3 million in the general fund of us being in the red, this is what is necessitating the inter-fund loan?

Yes. Ideally, when you're generating a budget, you want to stay within your means. In other words, don't exceed your estimated revenues. In this case and in previous years, we've overexceeded that. And thus, that's kind of where we're at right now.

Okay. Thank you.

Okay. Any other questions?

Yes. Thank you, Mayor. So are we going to see the document? Because I know we in previous years, we Or money was taken out of reserves or other funds because we couldn't have going to the audience. We can have negative balances and some accounts. So some money was moved around, but we I didn't see any documents with terms, conditions, outlying payments, outlying interest. Are we going to see those documents?

Yes, good question. Yes, because we are currently completing the audits. If you recall, there was an item that was brought to the dais maybe a month or two ago regarding a resolution that was created from previous administration regarding inter-fund loan from the sewer fund. And that entry has not been reflected in the financials due to the fact that we don't have audited numbers in discussion with the auditor. One of the suggestions was rescinding that resolution and waiting for some final numbers in order to do one aggregate loan. And thus, that's why I didn't come forward with that resolution because once we figure out close to where we might be, I would rather present something that's a little more solid, which I'm hoping that by July we'll probably get a better idea of where things are at, at least for fiscal year 23. Well, for drafted audited financials, we're looking at completing 23 by mid-July.

Okay. Okay.

Go ahead, Council Member Morales.

So, I know our attorney's here. Can you tell us a little bit more about borrowing money from the sewer? I know that there was, there's a source document. I know with like certain bonds or certain things, there are regulations or rules about borrowing against them. Is there, can we, was that analysis done? Is that information that can be shared through the council or through administration?

Yes, I mean, I can address it, Councilwoman. So the transfer of funds from an enterprise fund is no different than us going to the bank. It has to be done through the correct paperwork. It has to be done after a financial analysis supports the interloan borrowing. It has to have interest rates and so on and so forth. So that action has to come to you with the proper um analysis of exactly how much we will need to transfer right now what we're asking is for we're estimating a 20 million dollar line of credit, but we're hoping not to use it all. And one of the reasons, one of the elements that changes numbers is, of course, we don't know how many people will take the incentive. We don't know how many people will have, will accept the voluntary layoff. Those numbers will be coming in as we begin engaging the workforce to determine who may be retiring and so on and so forth. So my goal is to bring to you a position list that is updated after the summer, in the fall, as early as possible. Because the moment that we know exactly what our workforce needs will be, then we can truly calculate payroll. Payroll is the biggest impact to the funds, whether it's the general fund, whether it's any other funds, that is the biggest impact. So knowing exactly what our workforce will be like will help us determine what we actually need.

If I could add to that to answer your question regarding the bonds. If we look at the 22 financial statements there in the net position section, there is a restricted fund balance area. And usually that restricted amount is pursuant to the bond requirements of keeping some monies in reserve to be able to maintain bonds. some type of repayment of debt, outstanding debt that's there. And it's usually kept in a trust. And I believe we keep ours in, it might be U.S. Bank or Union Bank, if I'm not mistaken.

Okay. Any other questions from the dais? Yes. Okay. Can we, can we, um, I don't know if you can see. No, I can't. And I was going to ask if they could, um, close the document. I don't know that we need to look at that right now because I'm not able to. Okay. Go ahead. Dr. Resendez.

Thank you. Okay. So just following up on her questions, um, the council member's question. So she asked, um, Are basically she said when we borrow money from ourselves, we have a requirement to meet that it has to be in the reserves and we're meeting that requirement currently that is that correct. As far as it being invested right.

there's a difference between restricted funds and reserves. I think we've discussed at the dais that we're looking at not having 20% reserve and going down to zero. So that's a variable and it can change. But in order to borrow, you may not borrow against restricted fund balance. And that would be the covenants that the bond requirements require.

And we're currently meeting that?

Yes, correct. Okay.

She had also mentioned that the previous council had borrowed money. So can you tell us more about that?

Correct. There is an Interfund loan transfer resolution, and I believe, I can't remember what it added up to, about $4 million, three or four. So we included that with the $16 million that the Water will be in a deficit for which comes to about 20 million. Okay. Okay. So, um, and that's roughly what we were. Figuring out, but once again, that could change depending on where we end up with a lot of the moving parts, but the 20 million was more of, uh, that would capture everything. And it could be that way. It turns out to be less, um, but we will know more. As we progress.

So one way of looking at this council members is we're consolidating debt. Let's pretend that we're a household and we have a number of loans and credit cards. What we're doing right now is we're accessing the only fund that at this point we can access. There are only a few enterprise funds. They don't have money except for sewer. To do that, it has to be a loan. It has to pay interest rates. It has to be done with all the paperwork. We are consolidating debt. because we're also realigning the organization, which is why we need to take the measures that we have been discussing for the last two to three meetings. So to clarify, the city is not wealthier today than it was two months ago. We still have serious financial difficulties. what we are saying is we will borrow from one the one fund where we can cannot touch restrictive we have no reserves so we're going to the sewer fund so that we can mitigate the impact on the workforce that's what's driving this is mitigating the impact on the workforce but let me be clear there has to be workforce reduction there's no way that the city can continue swiping credit cards and borrowing from loans eventually the sewer loan will run out of money as well and that would be problematic now why because we've been running at a deficit someone always pays in 2018 we ran the water fund into a deficit somebody paid there's no money tree Somebody paid in this case. It could have been the general fund. It could have been sewer. We really don't know. And that was in 2018. So that's eight years of borrowing from various funds. And here we are. We're trying to consolidate debt and doing it right moving forward.

Thank you for that. So the 16 million didn't just happen overnight. You're saying it's been an ongoing issue. And the previous council borrowed $4 million from the same account that we're going to borrow the 16 million to quote unquote, get us even to bridge the gap. Got it. Thank you.

and i just want to add that um and it's not up on the screen but if in when you have a moment later if you look at fund 670 it's called street sweeping fund it's at a negative 4.1 million what i'm doing and restructuring the finances is we have salaries that are hitting these funds but there is no revenue stream So I'm realigning the allocations so that we can, once we do this transfer of inter-fund transfer loan, it will clear these funds and we are no longer hitting those funds to be in the same situation we're in today. And consolidating them and putting those positions where they really need to be expensed is as an example.

So again, as part of our debt consolidation is we are trying to identify every debt, every obligation that we need to meet. If we don't know that, then we don't really know what we're consolidating. And again, council members, this didn't happen last year or two years ago or five years ago. This has been ongoing for a while. In 2015, you had to make some serious decisions as well. The body here had to make serious decisions. And it was unfortunate that Structural corrections were not made. We're trying to make those structural corrections right now. Again, we don't want to be here four years from now, six years from now. That's where the correction is needed. That's where bold experimentation is needed. But also oversight, and we've said it before. We welcome the City Council having a finance committee. We should be reviewing financials every month or at least every other month. We welcome the unions and other members of staff creating a committee to review financials as well. It's our budget. It belongs to all of us. So the more eyes on it, the better off we will be. Monitoring asking question asking the hard question should be welcome, and I believe that with new leadership in the finance department and certainly the city manager's office, we welcome the questions. that's why we have checks and balances you're the legislative where the executive checks and balances.

If I may add, I am tightening up year-end close. I'm accustomed to providing monthly financial reports, and one of them includes a treasury report that gives you a snapshot picture of what our earnings are compared to previous years so that you have that at the ready. And I'm preparing my finance team, who has been working endlessly, We have three things going, year-end, audit, and budget, and they have been doing a fabulous job trying to pick up the speed and keep up with the pace to meet timelines. And so I really want to put out there to the dais that I do want to bring some financial reporting monthly so that we're monitoring where we're headed monthly versus quarterly or annually before it's too late.

And from the city manager's perspective, relevant not only to finance for every department, July 1st is right around the corner, the beginning of our new fiscal year. Every department will have specific outcomes that they are responsible for. And when I say they, I'm talking about the directors. There are specific products that I expect every quarter. That's how we measure our success. It doesn't get measured by showing up to meetings. It doesn't get measured by what people post in Facebook. It gets measured according to impact. And every director in every department will have very specific impacts that they're supposed to achieve every quarter. And my job is to support them, remove barriers, and provide resources as needed. Finance is the perfect example. Again, without a finance director, we haven't had financial reports. There's been no accountability. That's changing.

Okay. Any other questions from city council members?

I have just two comments, if appropriate, Mayor. Go ahead. So one, I would like to encourage the council and Mayor Stephens to actually create a committee made up of the treasurer, city council, unions, interested community members to, one, make sure our audits are done. Two, make sure that there's an understanding of the budget. Three, look at potential revenue options. make sure that the source documents like the loan documents are actually brought to council that people understand what it means the water um the utility for water, that's gonna go on the ballot in the five district, that there's community and labor support because that's ballot that will need campaigns. So this body will have a true understanding of our financials. If things aren't going to the ballot, making sure that the community understands what it's for why we're putting on the ballot why the money is going to be collected what's it what it's going to fund and to make sure that the committee oversees the funds that they're actually going to what we told our community that it's going to go for water and buy um just like the other measure for uh law enforcement to make sure that it goes to where it is and that we don't kind of go back to where we are with transitions of folks that are here We're here today. We're gone tomorrow. So, you know, we've had since I've been here for four city managers, one finance director and then vacancies throughout. So it's really important that a body of individuals that are very concerned about the well-being and the health of our community kind of help oversee that as people transition in and out of these positions. And the second is I really want to make sure for water, water is essential for living. So if we're moving to not having folks that we do a study to make sure that whatever the work is that is done by the people, however many people it needs for that to move forward. So if we need 12, if we need five, if we need eight, we need to make sure that we have an understanding of the work and that we have the folks to do the work because it's not okay or something downtown to fall apart or anywhere to break, and then you have a block of businesses or homes not having water, that's not okay. That is, for me, that's complete failure on every single level. So I think that is a goal that we really need to make sure that we have, is water should be sustainable outside of the general fund, and I appreciate the utility measure going out to the dollar.

if i can mayor go ahead um so i i really appreciate your suggestions especially the one about creating a committee councilmember morales so thank you and i'm just gonna ask if we can to expedite the process to i know we have to have a meeting next week i mean we can create a committee at least or get the ball rolling and i know you got a lot of other things to do But if we can make that, bring it through you so that we don't have to put in a request and whatnot. If we have the consensus of the city council here, then I would make the recommendation to next week, create the committee, at least create the committee that the councilwoman is speaking of.

You got that right.

Yeah. And if I can just, if I can just chime in, because I was going to, I was going to make a suggestion that we spend a little bit of time putting some thought into it so that we're sure that We're really clear on the expectations of the members, who should be a part of the committee, what are some of the bylaws that we want to include in that and be very purposeful about it so that we're just not throwing a body together without a clear purpose and without clear goals and expectations. And I think that's gonna require, I think some, discussion and forethought. So I'm wondering if it might not be better if we put it over to another time when we have some time to really delve into it and also to give staff time to do a little bit of research and provide some supporting documents or information for us about these different kinds of committees. I think if we did it next week, I worry that we might rush through it and that it may lose its intended purpose.

And I support that. And I'm hoping Councilmember Morales will support it too. My only concern is that it falls off and we don't ever bring it back again. So if we can ensure that we're going to bring it back like the first meeting of, I don't know. In August. So I would definitely support that. Councilmember Morales. It looks like you have consensus, Mayor. Thank you. Okay.

So yeah. And then if I would just ask the city manager to just ask staff, during the month of July to do a little bit of research on maybe similar types of committees and some kind of bylaws that we might want to consider as well as some examples of membership, like who would be on it, what would be their role, et cetera, et cetera, just so that we start with some good information and then spur the discussion that way. Okay. Are there any other questions or comments from council members about this item? If not, I want to go to public comment. I'm not going to open the public hearing because we didn't close it. So it's still open. So I just want to put it out there for the public to see if there's any public comment and then bring it back after the public hearing.

Okay. Okay, we could start selling our speakers. John Casey, followed by Mia Casey.

Well, good evening, Mayor and Council. Here I am again. Some good news and some bad news. This is not just a one-year budget issue. It's a structural imbalance that will return next year if it's not directly addressed. 3.1% interest rate is a pretty big interest rate so keep that in mind when you're thinking about the numbers, the goal number one you can't guarantee revenue and so we're going to have to look at the revenue numbers pretty hard. Both of the options have acknowledged that we are effectively buying about a year, the question is not whether that provides relief it's what condition, the city will be and when that year is over. If the city is going to rely on internal funds like the sewer fund, the most important issue is just not how much is used, but how it is governed. There are a few basic structural elements that should be in place first before the funds are used again, there should be a formal inter fund loan structure, I think that agreement should have been in the packet. even if it had some blanks while we're filling things in. What that written agreement is, a defined term, the repayment schedule, which is critical. We already know the interest rate, so we can plug that in. Without those elements, it becomes very difficult to distinguish between a temporary loan and a permanent transfer. And since the city has been burned before by doing that, we ought to make sure we have that agreement. Second, there should be clear council control over the use of those funds. Any draw from the sewer fund should require explicit council approval so that each decision is made intentionally and with full visibility. Third, there needs to be a path for a payment structural balance. If the use of those funds is only buying time, then that time needs to be tied to specific structural actions. Otherwise, the same issue simply returns next year with fewer options available. That also connects to staffing and labor. If the city is relying on internal resources to bridge the gap, then staff and labor groups need to be further included to understand what in the process early and what it all means, and whether that involves benefit cost sharing discussions or other adjustments. I do like the recall provisions. I think that's a really good forward step. This is not about assigning blame. It's about ensuring that the approach is sustainable. Finally, on the water fund, the same principle applies. It needs to move toward alignment between costs and revenue over time. That can include operational improvements, phase rates, adjustments, and pursuing available grant funding to reduce long-term cost pressure, especially on the capital needs. The key point is this. Using internal funds without structure may solve a short-term problem but increases long-term risk. Using them with clear rules to find repayment and the path to structural balance gives the city a way to stabilize while preserving its flexibility. I would encourage the council to focus not just on the amount of borrowing, but on the framework that governs it and the underlying reasons that are driving it. Thank you.

Thank you, Mr. Casey. Next speaker, please.

Mia Casey, followed by Brendan Coyne.

OK, so since my husband said half of what I was going to say, I'm going to spare you the repeat. So first of all, good evening. And I want to say that looking at the presentation tonight, I feel like progress has been made. I like the goals that I'm seeing. Things seem to be starting to gel. But I really was expecting to see actual terms of the proposed loan in this staff report. I don't see anything here. No repayment schedule, interest rate, clear explanation of what the money is going to be used for. And I really would like to see the legal analysis behind this from our city attorney. Sewer funds are restricted. And if they're going to be used to support another fund, even temporarily, every dollar needs to be clearly accounted for, tracked separately and approved by this council in public. The council will be remiss to adopt a budget that still does not appear to quite be fully developed. We keep seeing different scenarios, different numbers and different priorities, but I'm not seeing a comprehensive financial recovery plan fleshed out just yet. If the city's not ready to adopt a full year budget, then consider an interim or operational budget instead. one that funds essential services, limits new spending, and it gives you time to come back by a date certain with complete numbers, cash flow analysis, all the details on that inter-fund loan proposal, fund-by-fund balances, and a complete plan. Approving a full budget while also borrowing millions from a restricted utility without all these written terms would not be responsible, and the council should not approve any requests for a blank check. Council should require all the terms in writing, require public accountability for every dollar before making a decision of this magnitude. Thank you.

Thank you, Ms. Casey. Next speaker.

Brendan Coy, followed by Daniel Pettit.

Good evening. My name is Brendan Coy.

I am your associate planner. First of all, I'd like to thank the council, especially the council members that took time out of their day to meet with us. We really appreciate that. Regardless of the outcome this evening, we know you guys have a tough decision to make, and we just appreciate being heard. I'd also like to thank my colleagues. If it weren't for them, I wouldn't be able to do my job. Like everyone here tonight, we're all here to express concern about the cuts, whatever that means, but especially that it's going to impact our jobs. Over the past few months, every department has been reorganized in some capacity and planning is no exception. I've lost excellent leadership. I've lost fantastic planners and we now operate as a fragment of what we used to. We're essentially a skeleton crew now. While I still have a team of planners, I work with brilliant planners and technicians from Four Leaf. I am essentially the only city employee planner. And as I found out this afternoon, there was a proposal that may eliminate employees from planning altogether. Planning would be 100% staffed by four. That's concerning. I know you've heard all the complaints about planning over the years. But I also know that you guys are aware of all the improvements that we've made over the past year plus. We've worked really hard. applicants are happy, things are moving more efficiently. And cuts to planning, the way they've been proposed, risks us being able to provide those efficient services. It risks planning being able to do their job, and it risks any team being able to do any of their jobs. If we run any leaner, we risk not being able to maintain those promises. So I asked the council to consider the repercussions. I ask you guys to consider what could happen based on all these cuts. Consider that what that is going to do to your colleagues, what it's going to do to your community. We can't provide services and can't keep our promises. I don't know what we can do. We might as well just keep doing things the Hollister way. Thank you.

Thank you, Mr. Coy. Next speaker.

Daniel Perez followed by Cristina Camarillo.

Good evening, Mayor and Council Members. My name is Daniel Perez and I am a Water Operator for the City of Ulster. I have worked for the City of Ulster for the past three years. I am here tonight to speak about the Council's plan to reduce staffing and impact to our infrastructure and residents we serve. Our infrastructure continues to age each year, from water main breaks, service line leaks, failing valves, aging meters, and deteriorating fire hydrants are becoming frequent issues. When considering staff reductions, it is not only the positions that may be eliminated, but also the experience and institutional knowledge. Our union who operates our water systems has spent years learning its unique challenges, and we understand we are incurring issues, areas that require special attention and the history behind past years and improvements. If the city's long-term plan is to continue operating this system, it's not in the public's interest to replace experienced employees with contracted services. The work will still need to be done, but the question is whether it is performed by staff who know and have deep commitment to our systems or by contractors. Once that knowledge is lost, they cannot be quickly replaced in our community and its council carries that risk. Our hands on field experience is not easily replaced by contractors who may not have familiarity, experience and long-term commitment of current employees. The concern is what is lost when experienced staff are no longer here to support the system and the contractor to go home. This decision is not only about long-term reliability, city accountability, and system understanding about how work is performed, how well the system is understood, and how effectively problems are prevented before they occur. Every day we provide safe and reliable drinking water to the people of Olive Street. We take pride in this work because it is essential to health, safety, and quality of life to our community. I would also remind you that the employees affected by these decisions live here. We raise our families here, we support local businesses and part of this community. are part of this community we understand that the city faces financial challenges difficult decisions but we respectfully ask that all options be considered before eliminating staff positions and relying more heavily on contracted service services we ask to be seen not as numbers on a spreadsheet but as public servants with years of experience and commitment to this community thank you for your time and consideration

Thank you, Mr. Perez. Next speaker, please.

Christina Camarillo, followed by Sonia Gonzalez.

Thank you, Council, for allowing me to speak. I wanted to comment on a statement that was made a minute ago that we are going to swipe the credit card or borrow the funds to save jobs. We're not only looking at saving jobs, but we're doing it because we have a commitment to the community. By eliminating these jobs, you will not provide the services that are necessary for the safety and well-being of your constituents who put you in those chairs. So the reason we're here today is because we do have financial problems within the city. But we're taking this loan for the reason that we need to make sure that the community is being taken care of. We can't allow our infrastructure to go down even more than it has already. I think that there's proper steps that we can take to make sure that we can take the budget to a better position with the water rates increases and certain things that have to be done i heard statement that the street sweeper was in the negative while the street sweepers in the negative we charge two dollars and fifty cents per household is that truly enough is that do you know if that's enough have you done your research to make sure that we're covering those expenses We, you know, we're talking about contractors. We're contracting for Lee for contracting Viola. We're contracting all these things. These are for profit businesses. So guess what they do. They make profit on us. Right. Us, the city, the constituents of the city. So the more we contract out, the more expenses that are going to be hitting the community. we have the resources within this team they have the knowledge they have the expertise and they have the discipline to be here every single day to do the job but then we still want to reach out to outside sources to do the job that you've trained and these people have developed and worked for a lot of years I don't understand why we continue to go down that path Today I requested public records. I'd like to know how much we've paid for LEAP over the last two years and how much we've collected in permits for the last two years. And do they balance? There's a lot of things. Biolia, we just apparently signed another contract with them. We've always taken care of our sewer. And now all of a sudden we need Biolia to take care of our sewer at a profit. We can't continue to go down that path. Otherwise we won't have a city. Tanya Gonzalez- Right if we continue to contract everything out so yeah these these people here that stand behind you every day they work for us at the Community. Tanya Gonzalez- They work for you're their boss you're her boss. Tanya Gonzalez- She it's it's contract is not the way, thank you.

Tanya Gonzalez- Thank you, Miss committee oh next speaker.

Tanya Gonzalez- tanya gonzalez followed by Jacob gomer.

good evening mayor and council members my name is daniel gonzalez and i'm a senior support services assistant for the engineering division under the public works department i have proudly served the city of hollister for over 10 years i have lived in hollister for mostly my life i attended high school here and i'm proud to serve the community i call home i am concerned about the possibility of upcoming layoffs and the restructuring of union positions I have respectfully asked the council to recognize that senior support services assistants do more far than answer phones. I was disappointed to hear comments made by the city manager to the union team suggesting that we only answer phones and make coffee because that does not reflect the reality of our work. In engineering, I'm often the first point of contact for residents, developers, contractors, consultants, and outside agencies. I intake applications, permits, projects, and models for development and construction projects before engineers begin to review. I help track projects, maintain records, process payments, calculate and manage invoices, and ensure fees and revenues are properly allocated. We play a key role in keeping projects moving efficiently and supporting both the public and safety staff. Over the years, our responsibilities have grown significantly beyond what is reflected in our job descriptions. We have continued to adapt to meet the City needs. I also ask the Council to ensure transparency in any proposed restructuring or eliminating of positions. These changes are truly driven by budget concerns. Employees and the public deserve a clear explanation. When employees hear that former and former employees are being contacted about returning to field roles while current employees face uncertainty, it raises legitimate questions. Is this truly about budget reductions or is it about replacing employees who have dedicated years of service to the city? The work we do is essential to the city operation and public service. Eliminating these positions may create short-term savings, but it could result in delays, reduce efficiency, and lower services levels for the residents of Hollister. I respectfully ask that you carefully consider the long-term impact these decisions will have on employees, city service, and the community we proudly serve. Thank you for your time.

Thank you, Ms. Gonzalez. Next speaker, please.

All righty. Good evening, members. My name is Jacob Gomer. I'm a water operator for the Water Department here. I just wanted to provide some insight on what the Water Department is responsible for and what these significant staffing reductions could mean for the city. The Water Department maintains over 8,000 water services and meters, approximately 3,000 valves, and more than 1,300 fire hydrants. Much of this infrastructure is, believe it or not, over 60 years old, and some of it's even approaching 100 years old. As infrastructure ages, maintenance demands increase. Older pipes fail more often, older valves require more attention, repairs become more frequent. The reality is that with infrastructure of this age, the question is not if failures will occur, but when. The water department is responsible for maintaining the entire city's water distribution system, responding to main breaks, repairing service lines, maintaining these thousands of valves and hydrants, responding to customer outages, supporting fire protection infrastructure, meeting state regulatory requirements, and handling emergency call-outs. I can tell you from firsthand experience that we already struggle to keep up with the workload at our current staffing levels. And accomplishing these responsibilities with only five employees or whatever is being proposed will not be possible. The work does not disappear because positions are eliminated. The repairs still have to be made. The hydrants still have to be maintained. The valves still have to be exercised, and emergency responses still have to happen. This is work that we do every single day for... you know, the residents of the city of Hollister. Reducing staffing may appear to save money on paper or for the short term, but those costs won't go away. In many cases, the city will pay significantly more for contractors or subcontractors to perform the work or pay more later when deferred maintenance becomes a larger or more expensive problem in the future. uh i encourage the city council to carefully consider the long-term term impacts of reducing staffing in a department that is responsible for providing one of the most essential services to this community thank you for your time thank you mr one more next speaker carolyn followed by frank garcia hi city council um so in the

In the staffing sheet that the was on the agenda. It says that we have a current employees 182 I saw on there that seven non union positions are being added these positions currently do not exist. They're currently not build and a new union position was also added called business support this job classification currently does not exist within the city there is no salary scale so i don't know um where that's coming from or what it means if you guys do approve the budget today does that mean that all these positions the council's approving and it's going to be posted and set for recruitment it's really confusing to to me um and I know that the city manager said that there will be no workforce reductions. However, she also said there has to be workforce reductions in the city report. It says that the goal is to get down to 174 positions. So with the addition of positions to get to 201 from 182, and then to get back down to 174, that's 27 positions being eliminated. The whereas City Council said a couple weeks ago that there will be no union layoffs. They want status quo, but the proposal is not for status quo. There are a bunch of positions being added. So again, Clarity is not being provided. A few months ago, the City Council also approved the creation of the permit tech positions so that I believe the goal was to move planning in-house. This is something that the San Bernardino County is moving towards. I know that San Juan Bautista is also moving towards because again, as a previous speaker said, City services should be not for profit. Four Leaf is a for-profit company. We need employees who are thinking about Hollister and not their profit margin. We spend 20% of our budget, about $11 million on Four Leaf in one year. That is ridiculous. Having in-house permit tax and a building official would not cost $11 million. Thank you for your time.

Thank you, Carolyn. Next speaker.

Frank Garcia, followed by Arthur Hernandez.

Good evening, Mayor, City Council. I'm a public works employee in the stormwater department. My name is Frank Garcia. I WANT TO SPEAK TONIGHT ABOUT THE RECENT RESIGNATION OF PUBLIC WORKS DIRECTOR Javier Hernandez. RECENTLY PUBLIC WORKS EMPLOYEES TOOK AN UNUSUAL STEP OF WRITING A LETTER OF RECOGNITION FOR DIRECTOR HERNANDEZ. WE DID THAT BECAUSE MANY OF US BELIEVED HE WAS IMPROVING COMMUNICATION, PROFESSIONALISM, TRUST, RESPECT WITHIN THE PUBLIC WORKS. IN ALL MY YEARS WITH THE CITY I CANNOT REMEMBER EMPLOYEES COMING TOGETHER TO WRITE A RECOGNITION LETTER LIKE THAT. We wrote that letter because we believed he understood the workforce. We believed he understood the importance of public works. We believe he understood the people who keep this city running every day. Shortly afterward, Director Hernandez resigned. Before leaving he sent a message to public works employees in that message he praised the workforce. He praised the work being done he praised the dedication and professionalism of employees who serve this Community, but he also says something else. He stated that he and the city manager had fundamental different management philosophies and differing views regarding the direction of this organization. He further stated that he reached a point where he could no longer support that direction. Those are not ordinary words. Those are not words of someone simply moving on. Those are words of a department director who believed the organization was heading in a direction he could no longer support. What makes That statement is so significant is that he did not lose faith in public works employees. He praised them. He did not lose faith in the work. He praised it. He did not lose faith in serving the residents of Hollister. He called it a privilege. The issue, according to his words, was a direction. As employees, we cannot ignore that. And I do not believe this council should ignore it either. Because when your own public worker, public works director says he can no longer support the direction, of the organization that should concern every member of this council. And before more positions are eliminated and before more restructuring occurs, before more employees are lost, I believe this council owes it to the employees and the residents of Hollister. A simple question. Why did your public works director believe the direction of this organization had become something he could no longer support?

Thank you.

Thank you, Mr. Garcia.

Next speaker.

Arthur Hernandez, followed by Denise Q.

Good evening, Mayor and City Council. I just want to continue where Frank left off. Director Hernandez didn't simply explain why he was leaving. He also left behind warnings that deserve attention. In his farewell message, he acknowledged that Public Works employees are operating under challenging staffing conditions, increasing demands, and limited resources. Despite that, he stated that employees continue to accomplish the mission and serve the community. He recognized the people who maintain the water system, sewer system, storm drainage system, streets, facilities, fleet operations, the residents depend on every day. He recognized that employees who respond when emergencies happen. He recognized the employees who continue finding ways to get the work done despite limited resources. but he also felt it necessary to clarify something. He explained that bare-bones staffing exercises conducted months earlier was never intended to evaluate all operational maintenance, emergency response service level, or long-term organizational impacts that accompany staffing decisions. He warned that staffing reduction carries consequences. consequences for emergency responses, consequences for maintenance activities, consequences for operational flexibility, consequences for institutional knowledge, consequences for service levels, and even consequences for overall cost. He also warned that operating at minimum staffing levels would likely require increased reliance on contracted services, which we hear about. And you reminded us that public works functions are as integrated department with divisions routinely supporting one another to meet operational demands and respond to emergencies. The statement matters because public works is not just one division. Water supports sewer, sewer supports storm, storm supports environmental compliance, employees support streets, facilities, fleet operations, and one another. When help is needed, employees step up, and that is so true. This is how Public Works has continued to serve in this community despite staffing shortages and increased demands. Director Hannes could have left quietly. He didn't. He chose to leave behind a message. In the message, he praised the employees. He praised the work. He praised the mission. But he also warned about the consequences of the path being taken. Those consequences are not theoretical. They affect emergency services. Response. They affect maintenance. They affect service levels. They affect institutional knowledge. They affect the city's ability to serve its residents. Director Hernandez gave this council a warning before he left. And I hope this council takes the warning seriously. When you go out there and try to say that you're going to do and take care of the main break with one person, no, it's not going to happen. You try to take care of HR. Why don't you take care of each other with one person? Why don't you take care of some of the other jobs here with one person? It's not going to happen. We are a team and that's the way we are. Thank you.

Thank you. Next speaker.

Denise Q.

Good evening, City Council. My name is Denise Quintana. I am a resident of Hollister and the Chief Steward and Vice President for SEIU for San Benito County. We stand united with our union brothers and sisters at the City. We ask Council to approve a budget that keeps our union jobs. The county also has had its budget challenges similar to the city. My coworkers and city employees are my neighbors. We live, work, and raise our children here. We spend our money here, which keeps our money within this community. Thank you.

Thank you, Ms. Quintana. Next speaker.

I have no more speakers for this item.

Okay. Okay, so I'm going to close the public hearing.

I had one hand go up online. For Liz Castillo?

Go ahead, Ms. Castillo.

Liz, if you could unmute.

We cannot hear you if you're speaking.

Liz, can you hear us?

I can hear you. Can you hear me?

Now we can.

Yeah.

Okay, go ahead, Ms. Casillo.

Good evening, mayor and council members. My name is Liz Castillo. I am a senior support service assistant at the airport. I have proudly served the airport for seven years. I am currently on maternity leave and preparing to return to work soon. I should be enjoying these final weeks with my newborn son, but instead I am facing the uncertainty and stress of potential layoffs. The airport is staffed by only four full-time employees, the airport director, myself, and two maintenance employees. Together, we are responsible for keeping airport operations running safely, efficiently, and in compliance with numerous regulations. I play a key role in the city's airport's daily operations, and I'm often the first point of contact for tenants, pilots, businesses, and the public. My responsibilities include managing leases, processing accounts payables and receivables, administering grants, handling billing and payments, maintaining records and supporting the many administrative functions required to keep the airport operating effectively. As more responsibilities continue to be placed on our airport director, it becomes increasingly difficult for one person to address every airport-related matter in a timely manner. Like many senior support service assistants throughout the city, I perform duties well beyond what is what is reflected in my outdated job description. We continue to adapt to changing demands and serve our community with professionalism and dedication. Administrative professionals are sometimes viewed as people who simply answer phones or make coffee. The reality is very different. We manage critical operations, solve problems, coordinate services, support leadership, and help ensure the public receives the services they rely on every day. Without administrative staff, departments cannot function effectively. Unfortunately, the city managed leadership has created a culture of uncertainty, frustration, and declining morale among city employees. Dedicated public servants who have committed years of service to this community feel undervalued, unheard, and increasingly concerned about their futures. The airport also has a unique operational and emergency response responsibilities. In the event of an aircraft accident or other emergencies, airport staff are expected to respond. We receive specialized training in airport operations, emergency procedures, maintenance coordination, regulatory compliance, and public service. This specialized work cannot be simply transferred to other departments without consequences. I understand discussions have taken place regarding restructuring senior support service assistant positions. While we are willing to take on new responsibilities and support the city's needs, I respectfully urge you not to eliminate those positions or remove essential duties from the departments we serve. The work we perform is specialized, necessary, and critical to the success of airport operations. Our jobs matter. Our experience matters. The service we provide matter. I ask that you recognize the value of the employees who work every day to keep the city running and carefully consider the impact these decisions will have on staff, operations, and the community we serve. Thank you for your time and consideration.

My final speaker is Rodrigo Aguilera.

Mayor, council members, Thank you for your time. Um, first of all, I just want to, I would like to thank all the, all my colleagues for all the work that they do. And if I just can make a few comments, um, first of all, the audits, that's the elephant in the room. We're in year 23, 24, 25, 26, three years. We don't know what's in them. It's a ticking bomb. So Instead of, and it's just a suggestion, why are we, and a question, why are we not hiring more auditors instead of hiring all these high-end paying positions? There's a department with four people in it. One of them gets, and two of those positions, they range from $140,000 to $170,000. And let me just put it out there, right? Can we pay a firm with that kind of money to finish the audits? Why are we waiting so long? That's one of the questions I have for you guys. If you guys could look into it. Second of all, I would like to give you quick facts. So without water, water is life. Without water for four days, nobody can exist. Without sewer for three to seven days, you're creating a health hazard. Nobody can flush the toilets. If there's a big emergency, what are we going to do? You're going to contract everything out. You don't have any money. So keeping our people in-house is priority number one to me. Storm, stormwater, you need to be compliant with the state. That's a big one. Not having a storm department. The other members... of this organization that are in the background, they're a key element to the organization. SEIU is the backbone of this organization. We're obviously not a golden child. The golden child is not here. All you see is purple. So we're here because we care about the community. We care about the members of this community. And reducing staff is definitely going to reduce the response time and delay the response time. So I kindly ask you to please consider your decision. Thank you for your time.

I have no more speakers. Mayor, you're muted.

Sorry about that. Okay, with that last speaker, thank you, Mr. Aguilera. I'm going to close the public hearing on this item and then bring it back to the council for additional questions, comments, and an action. Any questions or comments? Okay, so I'm going to ask if somebody is ready to propose a motion or take an action.

Mayor, if I may. Go ahead. Just ask some clarifying questions. So um Thank you city manager and finance director for the budget so based on what you said, I just want to make sure that I understand very clearly. We have 201 positions in the city of pollster seven are duplicate codes. or placements and transfers. Because you said we have positions that are going to be in two places because people can be placed there and you need to hold two spots. I just want to make sure I got this. I wrote down seven. But we don't know where they are. Correct.

So we don't know which vacancies may be taken by a current employee.

Okay. So then I have 194 vacancies. And we're looking at voluntary separation of 20 coats so we're not right now we're not looking at really doing. layoffs we're looking at voluntary separations to eventually eventually get 274 is that accurate. That is accurate. Okay, so for voluntary separation there's going to be incentives. That is correct and there's going to be an analysis of. an understanding of how of the work so water any impacted place mostly water will have an analysis of what it takes to actually do the work so that the community just is not significantly impacted is that accurate at some point we have an analysis and we will continue to analyze

these numbers were not taken from thin air or random there was an internal analysis from director hernandez indicating that we needed five individuals to do water we will however double check that information trust but verify so we will verify that information he provided

Okay, and then I think that's where my concern is is that in doing some research based on the numbers and the deterioration of the infrastructure that five wasn't sufficient, but I would I would like a further analysis. Based on other subject matter experts. To verify that information so right now the budget that we're proving it's it's like um. I don't want to say bridge, but it's a kind of we're on hold looking for transitions or natural separations of our workforce as we see fit. And after the budget, after we approve the budget and we know where people are going to be placed, that will be when we will determine where potentially there'll be further separations.

That is beautifully said, inaccurate.

Okay. I want to make sure that I understood. The second question that I have is I'm hearing that we're going to be contracting a lot of services. Can you share more? Because I didn't hear that or I didn't see that in the budget.

That is correct. We have no money. So that is a myth. It's the grapevine. A lot of the statements that were made were inaccurate. I don't know where that came from.

Okay.

Any other questions? Comments? Okay. Not seeing.

I have one.

Okay. Go ahead.

So as I looked through the information, I was seeing that we were looking through two options. Option R. and potentially voting on that, which is the resilient restructure approach and all that that entails. Option S, which is a status quo service level. We clearly, I think just about everybody in here and on Zoom wants to save all the employees that we can. Losing employees and all of their knowledge and tenure is, you lose a member of the team, you lose what you guys were explaining to us last time, which is being able to anticipate each other's moves. and keeping the city moving the way it needs to. When we have, you know, El Nino-type storms like we did a couple of years ago, cleaning up after all of that stuff, it was weeks before we were able to get back on track. We want to lose the least amount of employees as possible and retain as many as possible. But I thought that there was some sort of a middle ground approach. Did I miss that part of it?

Thank you, Council Member. What we're offering you is the middle approach. So on the one hand, we're saying we're keeping every position. So let me reinstate that. We are not laying, we're not giving anybody pink slips. What we're doing instead is if you want to retire, we'll give you an incentive to retire. If you want to voluntarily separate, we're giving you that incentive as well. So that is consistent with status quo, because status quo is you keep the same positions. Now, with the resilient approach, we were talking about not borrowing from sewer. So we're not doing that. We're actually borrowing from sewer. And we're hoping to... Not borrow as much as $20 million, but that is our estimate at this point in time because we don't know what attrition is going to look like six weeks from now, two months from now. At that point, we will have to evaluate where we are. And there will be another conversation that we will have to have with you. And hopefully by then, we have been able to reach a certain level of stability with our funds. So what we're presenting to you is a little bit of both. On the one hand, we're trying to Respect the sewer fund as much as possible. On the other hand, we are keeping the positions as they are and incentivizing separations. Let me be clear. If, let's just say, that nobody wants to take retirement and nobody wants a voluntary separation, then layoffs will be necessary. There is no money. There is no, we're about to take X amount of money from the sewer fund. That's our line of credit. And if we don't do reductions, the question is, where would the line of credit be next year? There's only so much money in the sewer fund. And that was not an event that happened back in January, back in 25, back in 24. It's been ongoing for almost a decade. So here we are trying to fix a decade loan problem in about a month and a half. So those are the realities. But right now, We are not eliminating any positions. We'll have to see what happens if, in fact, people are interested in the incentives.

OK, so I just want to let everybody know that I did meet with SEIU and we had what I kind of would say was a heart to heart. Right. I got choked up. I got choked up talking with them. It was difficult to hear about, you know, all you know the financials and you know all that the heart and soul you put into keeping this city running being literally unsung heroes like things are going right nobody complains nobody thinks about it but when we have the storms like we had a couple of years ago where leathers lane was all washed down leaves are everywhere it took a couple weeks to clean that place up to clean the town up um so it it it hits me so we're talking about one of the things that you guys had mentioned and i believe that when you said this uh the representatives from sce that i did meet with um you love hollister right you love this town many of you are from this town most of you are from this town you all live in this town and um i know that to be true right i know that to be true i believe every word that you said there um And I do believe that we are in a tough financial time. We have been this whole last year and a half. It's literally been kind of a rocky road. So if those folks who love Hollister are close enough to retirement, and we you know you go through a negotiation that's that's one option and those employees step forward and figure out hey i'm close enough um help the town out i love hollister this will be you know something that i can do to help out that would be very helpful if you can you are close you can uh negotiate with the city we can get some people to potentially own retire And then if you find it that you can find jobs elsewhere and you are willing to commute as much as you love Hollister, find another position somewhere else, maybe some voluntary separations can happen. And then I'm also hearing about lateral moves. We can uptake employees from one department and move them potentially into other. I would like to make sure that paint slips are the absolute last line of defense for us losing any employees and uh i can't remember who said it i took a bunch of notes but somebody said exhaust all options exhaust all up just anything else before losing any employees um that is where i'm coming from and i believe it was a council member resendez dr resendez that said he wouldn't want to lose any at all so um Yeah, I must have missed it, but we are talking about that center of the road. That was my own question.

Thank you.

Thank you, Councilmember Bichet.

Okay, well, I'm going to just make one quick comment, and I just want to thank the city manager and the finance director for bringing us to this point, because we did, in fact, give you that direction last week. We were really concerned about both options, and we asked for something that was more gradual, that was in the middle, that helped us to find other ways that we could reach the goals of a very, very, very difficult budget. And this to me is that, or as close as it is as we can get to that, it's gonna still be very difficult. There's no doubt about it. However, when we have a budget as tight as the one that we have, we don't have any options other than to find ways to reduce costs. So thank you so much for presenting this option to us, because I do think that this was what we asked of you last week. And although it is not ideal by any stretch, it is still something that we have to seriously consider because we are in a very tight budget year. And until we get to a balanced budget, until we get through all of our audits, until we find other ways to increase revenues, then this is how we have to work together is very closely. We have to be very conservative. We have to be very disciplined. And this is one way for us to move in that direction. So I just wanted to make that comment because this was in fact what we asked of our city manager and our finance director last week. So with that, I'm going to see if there's any last minute questions and then I am going to ask for a motion from one of our council members.

When do we any and if we don't have an answer don't have to answer when are we anticipating going out for the utility and fire.

For the stormwater utility, assuming that we have a partnership with SEIU and the other unions, I think it's important for everybody to be unifying this cause, then as early as this November. For the fire district, it's going to require a little bit more time, and we're shooting for March 2028. Thank you.

Okay, so can I get a motion from someone on the council please?

I'm going to make a motion to approve the resolution for the preferred approach for the final appropriation adoption for 2026 2027 with. That we also bring back the agreement for borrowing the funds at the August 3 meeting.

Okay, can I get a second.

I'll second.

Let's see, roll call vote, please.

Council Member Pache.

Aye.

Dr. Resendez.

No.

Council Member Morales. Yes. Vice Mayor DeAnda.

No.

Mayor Stephens.

Yes.

Motion passes 3-2.

Thank you all for coming here tonight. Remember, the power comes from you guys at the bottom. Talk to your neighbors, get involved, and I'm willing to talk to any of you guys anytime. Thank you.

Okay, thanks everyone. And let's move on to Council Business 6.1, Water Rate Discussion and Adjustments to Water Rates.

Council members, Madam Mayor, members of the public. The next item is a continuation from the water rate increase that we presented to you first in October last year, then in January this year, then again in February, and then last Monday. So today's the continuation of that. What we request is that you adopt a new rate. that is consistent with the Prop 218 study that was done by Rashtelas, and that still is consistent with the 218 process that was put in place for the first discussion in February, if memory serves me right. And that would bring us to a level in which we can start making the enterprise fund an actual enterprise fund, meaning that it is self-sustainable. um last monday you wanted to continue this conversation to give opportunities for members of the public to provide any comments i don't know madam clerk if you have received any no ma'am okay and so if you have any questions please

Any questions from anybody from the council?

I'll just make a quick statement. I was watching. I disagree that it should have been continued. I think it was, it should have been done then. It should have been decided on then. And I fully support this moving forward. Of course, we're here now. We're going to open up to the public, but I fully support moving this forward. And I honestly feel like I should have been approved last time we were here. Thank you. Okay, thank you.

Okay, so let's go to public comment. I think the clerk said we have no speakers on this item, do we, or... Do we not?

That's correct. We do not have any public speakers.

Okay, so I'll bring it back. So if there's any further discussion or questions or comments, or if not, I'll entertain a motion. I'll move to adopt. Can I get a second? I'll second. Roll call vote, please.

Council Member Pache.

Aye.

Dr. Resendez. Aye. Council Member Morales. Yes. Vice Mayor DeAnda. Yes. Mayor Stevens.

Yes.

Motion passes 5-0.

Okay, thank you. So let's move on to item 6.2, a resolution confirming and approving the housing trust guidelines and a 2627 budget adjustment of 300,000 from general fund to, I'm sorry, general fund 101 to home program revolving loan fund 809. Can we get a staff report, please?

Good evening, Mayor and Council. I'm Delia Pichardo. I'm the accounting manager for the Finance Department. I'm sorry. This item before you is the Housing Trust Fund administrative guidelines. This action is required pursuant to the city's stipulated judgment with the California Department of Housing and Community Development and the Attorney General's Office. The settlement requires the city to establish a housing trust fund program, submit the program guidelines to HCD for review and approval, and contribute, I'm sorry, I was supposed to, yeah, and contribute 300,000 to the fund following housing element certification. The purpose of the program is to preserve existing affordable housing and maintain long-term affordability for lower income households. The guidelines establish how the Housing Trust Fund will be administered and utilized. The program is focused on preserving existing affordable housing and maintaining long-term affordability for extremely low, very low, and low income households. The Finance Department will administer the program and any future funding recommendations will be presented to the City Council for consideration. funding requirement. The settlement requires the city to contribute $300,000 to the Housing Trust Fund after HCD certifies the housing element. Tonight, Council has been asked to approve the budget adjustment necessary to reserve those funds. The transfer will occur within 30 days after HCD approval and housing element certification, consistent with the settlement requirements. Staff recommends approval of the Draft Housing Trust Fund Administrative Guidelines and authorization to submit them to HCD for review and approval. Staff also recommends approval of the budget adjustment identifying the $300,000 contribution required by the stipulated judgment. Following HCD approval and housing element certification, the City will complete the required fund transfer and implement the program. Um, I'm available for any questions.

Any questions or comments from the council?

I do have a question.

Um, go ahead. Councilman Dr. recent. Just go ahead.

So obviously, we need to prove this. But I have a question. Last week, we approved an affordable housing development on the west side of Hollister. So would that project be eligible for these funds?

That development is new construction. So we purposely have this program be focused on rehabilitation. HCD requested that we develop new housing. I am testing the grounds and offering something, an alternative. I spent about 10 years in housing, so I feel very comfortable with this particular path. I used to have very good working relationships with HCD. $300,000 doesn't build anything. $300,000 fixes a lot of things.

Okay, so let me rephrase my question. If that project was a rehab project, would that project qualify for these funds?

Yes, it could technically, but it's in the county.

That project was in the county, not in the city.

Oh, well, certainly that would be something that we have to take into consideration.

So we, I'm confused here in order for a project to be submitted under the, what's it called builder's remedy. It needs to be within the city limits.

This is not builder's remedy. This is the agreement that we have with HCD.

I know, I know. But this is because of... Builders remedy. So.

This is because we were late with. But I hear what you're asking. Okay. So, so can we use the money for new development? Our position is that no, we would rather use it for rehabilitation. So if the rehab was in the city, that would be the first priority, not the county, not the county.

Okay.

So. To get to that point, we are, in the document, we talk about a notice of funds available, so a NOFA. So we would put in that criteria, and I'll be very specific. Let's say that you wanted to improve housing in District 1. Let's just say that. That's what we get to say in the NOFA, and therefore we would only consider projects in District 1. We can be as specific as we need to be.

Got it.

But we need HDD to approve the framework.

All right. So just so I'm clear, the project that we approved last week was in the county, not the city, right?

That is correct.

Okay.

Any other questions or comments from the council?

Okay, I just have a quick comment. It took us a little while to get the general plan done and the city staff did a great job getting that done and putting all the work into that. We really appreciate all of the time from one council to the next. They already had it almost done and then we effectively, we come in and we ask staff to switch it all around and change it all up. All that work, you know, seemingly, I don't know what that did to morale, but I know that some people might have been like, we just almost had it done. So thank you for keeping your heads up and your noses to the grindstone and getting that done. I feel like this is probably one of the best case scenarios. It did take time to get that done. And with the new council coming in, changing things up, The state of California would have been even more strict with us. At least this is something that helps those communities that, you know, housing is getting really expensive, can't afford it, still want to live in Hollister, still want to live next to their family and their friends and the community that they love. Solves could be framed as good news. So I don't know. Thank you.

And council member, because this has come up before, but just to give you a sense of how much, because the council has been concerned about what does affordability mean? So I'll give you an example. So for extremely low, let's just say that in that NOFA, where we specify district one, and we also say, It has to be extremely low. One person cannot make more than $30,000 a year. Two people cannot make more than $35,000. Three, more than $40,000. Four, more than $44,000. Five people, more than $47,000. You get where I'm headed. This is for extremely low-income families and individuals. This is not for folks who have a job in the Silicon Valley.

HAB-Jacques Juilland, Okay, and yet we have a private business or a private citizen owns a property and it's it's it's been earmarked for extremely low income a very low income. HAB-Jacques Juilland, These funds could be potentially used to help rehabilitate and make sure the plumbing works the sewer you know the electrical avoid a fire potentially in to protect our Community that's what we're talking about here.

That's exactly what we're talking about. Okay, that's all I have. Thank you.

Thank you. Any other questions or comments from the council? Okay, I'm not seeing any. Can we go to public comment? Can we take the visual off of the screen to go to public comment? Thank you.

I have no idea about this item.

Okay, thanks for that. Okay, so let me bring it back. to the council for further discussion or for a motion?

Mayor, if there's no further discussion, I'll move to adopt. I second, please. I'll second.

I roll call vote.

Council Member Pache.

Aye.

Dr. Resendez.

Aye.

Council Member Morales. Yes. Vice Mayor DeAnda. Yes. Mayor Stephens.

Yes.

Thank you. Motion passes 5-0.

Okay, well, that was our final item. I'm going to move to adjourn. So we're adjourning at what? 737. Good night. Good night, everyone.

I couldn't hear what you said. I have a hard time sometimes when people are on Zoom.

Thank you.

Say again? I'll walk with you guys. It's hard of hearing.

Thank you. Yep. Oh, my gosh. What is today, Monday?