City Council - Regular Meeting

I'd like to call the meeting of the City Council Public Finance and Authority to order. Madam Clerk, may I have the roll call, please?

Councilman Grewal?

Here.

Councilman Kennedy?

Here.

Mayor Pro Tem Twiney?

Here.

Mayor McKeon?

Here.

Councilman Burns? Here. Councilwoman Vandermark? Here. Councilman Williams?

Here.

All present.

Madam Clerk, do we have any supplemental communications?

Yes, we do have supplemental communication for closed session, a new item. for number 26-776, one email received regarding litigation, Clayton Tarvin, the City of Huntington Beach.

All right, do we have any public comments for closed session items?

No, we do not.

Okay. So including the closed session, we have a conference with labor negotiators, government code section 54957.6, agency designated representatives, Travis Hopkins, city manager, Also in attendance, Marissa Sir, Assistant City Manager, Mike Fagliata, City Attorney, and Zach Zee, Chief Financial Officer. Employee Organizations, the Police Management Association, the Huntington Beach Firefighters Association, and the Fire Management Association. Conference of the Real Property Negotiators, Government Code Section 54956.8. Property is 60 Main Street, Huntington Beach, California, 92648. Agency negotiators, Travis Hopkins, Marissa Sur, Chris Casanova, Economic Development Manager, Jennifer Villasenor, Director of Community Development, William Krill, Real Estate Project Manager. Negotiating parties, Tina Varey and Nelson Westcott, DBA of the Sur City Store. Not present under negotiation price in terms of lease. Conference with real property negotiators, Government Code Section 54956.8, Property 61, Main Street, 100 Beach, California, 92648. Agents and negotiators, Travis Hopkins, Marissa Sir, Chris Casanova, Jennifer Villasenor, William Krill. Negotiating parties, Dave Shankman, DBA, Kite Connection, International Incorporated, not present under negotiation price in terms of lease. Conference with real property negotiators, Government Code Section 54956.8. Property 21091, Pacific Coast Highway, Huntington Beach, 92648, APN 024, 281-16. Agency negotiators, Travis Hopkins, Marissa Serr, Ashley Wysocki, Director of Community and Library Services, Chris Cole, Community and Library Service Manager, William Krill, Negotiating parties, Puyo Hanare, Pacific City Hotel, LLC, doing business as the Paseo Hotel and Spa, not present under negotiation, price in terms of payment. Conference with real property negotiators, government code section 54956.8, property 17732 Golden West Street, Huntington Beach, 92647, APN 111-010-69. Agency negotiators, Travis Hopkins, Marissa Sir, Ashley Wysocki, Chris Cole, William Krill. Negotiating parties, Michael and Christine Bartusik doing business as Park Bench Cafe and Rory Bevins, not present. Our negotiation price in terms of payment. Lastly, conference with real property negotiators, government code section 54956.8. Property 411 Olive Avenue, Huntington Beach, California, 92648. Agency negotiators, Travis Hopkins, Marissa Serr, Chris Casanova, Jennifer Villasenor, William Currell. Negotiating parties, Max Daffron, INTV's Chamber of Commerce, not present. Under negotiation, price and terms of lease. Council to have a motion and a second to recess to close session.

Second.

All right, motion and second. Recess to close session. In the meeting of the City Council of Public Finance and Authority, Madam Clerk, may I have the roll call, please?

Councilman Gruhl?

Here.

Councilman Kennedy?

Here.

Mayor Pro Tem Twiney?

Here.

Mayor McKeon? Here. Councilman Burns?

Present.

Councilwoman Vandermark? Here. Councilman Williams?

Here.

All present.

Tonight's invocation will be given by Huntington Beach Police Chaplain Bob Ewing.

Would you bow with me, please? Gracious God, we come before you with gratitude for the city of Huntington Beach, for the people who call this community home, and for the opportunity to serve others. We thank you for our mayor, members of the city council, city managers, staff, and all those who give their time and talents to make our city a better place. We ask that you grant them wisdom, discernment, patience, and humility as they consider the important matters before them tonight. Help each decision to be guided by what is best for the entire community, not by personal interests, but by a genuine desire to serve the residents and strengthen our city. We pray for our police officers, firefighters, lifeguards, and all first responders. Protect them and their families as they serve and protect our community. We pray for Chiefs Parra and McCoy and ask for wisdom as they lead. May tonight's meeting be conducted with respect, understanding, and a spirit of cooperation. And may we leave this evening committed to working together for the good of our city and all who call it home. We offer this prayer with gratitude and humility. In your most holy name, Lord Jesus, amen.

Thank you, Bob. Tonight's Pledge of Allegiance will be led by Dennis Bauer of American Legion, Post 133. Dennis was born in Englewood, California in 1947 and raised in Southern California in a military family. An Eagle Scout, competitive swimmer, water polo player, surfer, and motorcyclist, he attended UCLA before being drafted into the U.S. Army, where he served as a preventative medicine specialist, including an assignment in Korea. After completing his military service, Dennis returned to UCLA and earned both a Bachelor of Science in Public Health and a Master of Public Health. He then spent 31 years with the Los Angeles County Department of Health Services before retiring in 2004. Dennis and his wife, Tina, have lived in Huntington Beach since 1981. He's a longtime member of American Legion Post 133, where he has served as vice commander, finance officer, and currently adjutant. He's a proud father of two children and in retirement enjoys traveling the world with Tina. And at 78 years old, Dennis remains active in the community and committed to serving fellow veterans. Thank you for your service, Dennis.

Actually, I just turned 79. 79! Ready, begin. I pledge allegiance to the flag of the United States of America and to the Republic for which it stands, one nation under God, indivisible, with liberty and justice for all.

Thank you, Dennis. Closed session report. City Attorney, do you have anything to report from closed session?

Nothing tonight, Mayor.

All right. City council member comments council members would anyone like to make a comment?

Yeah, just again with the upcoming elections I just want to remind everybody that communism never Has done the people favors at all. We don't need communism in this country, nor do we need it in Huntington Beach? Socialism isn't any different By practice, the only people that benefit from it are about the top two people, and they start with their friends, taking them out first, so keep that in mind. But vote American, be proud to be an American, and live American. Thank you.

Any other comments? Yeah, Gracie, go ahead.

I just wanted to thank our community in Huntington Beach who stepped forward to raise funds for Nepal who had that tragedy where thousands of people were hurt and over a thousand are missing. So thank you to Huntington Beach and the restaurants that are having events and they're sending all the proceeds out to Nepal to help those families. Several Americans were out there as well and they have not been able to be located.

We talked about it last meeting about e-bike safety, getting into school season, so I highly encourage parents, grandparents, anybody, neighbors who have children to attend the free hands-on e-bike rider training which is on September the 12th. There's two sessions, 9 a.m. to 11.30 a.m. and 12 p.m. to 2.30 p.m. It is a wonderful resource provided by the city, and it's elements like this that obviously make us one of the leaders when it comes to e-bike safety, but there's still a lot of work to be done. So spread the word on that great event. It's up on the HBPD website as well as the city Facebook and social media pages.

Anybody else? Okay. All right, moving to the Mayor's Spotlight portion of the meeting. Sorry about that. The last two months, we honored a lot of people in our Surf City community. So starting in July, We honored Dang Chow Pham, who does all the creative graphic design for the city. And Dang is approachable and extremely liked by all our city coworkers. He volunteered to work on Team Power, showcasing his team spirit and collaborative ethic. Dang and his creativity is unmatched, and he makes us all look very good. So thanks, Dang. He had an amazing celebration speech, by the way.

Next, Fred's Mexican Restaurant came by to give our HB Junior Guards a check for $10,000 as part of their commitment to giving back to the community for their 25th anniversary.

So thank you to Fred's. Thanks, Pat. Then we had the Marina High School Youth Theater stop by as they won the prestigious Spirit of the Macy Award for the production of Xanadu, and they were named a top 10 finalist out of 56 participating schools. They consistently produce award-winning large-scale community productions and develop standout young performers. Go Vikings. Next, we proudly recognize the NHB Boys Youth 13 Black Soccer Team for an exceptional 2026 spring season and their outstanding representation of our community through excellence in youth athletics. Competing against the top Flight 1 teams in Orange County, the team completed the SoCal Spring League season with an undefeated record of 7-0-1, allowing only six goals while scoring 22. Their remarkable accomplishments also include winning the Copa Del Mar Winter Classic and earning finalist honors at the 2026 Aliso Cup. Congrats, boys. Lastly, we celebrated the winners of the City Celebrations America 250 Coloring Contest. That was awesome, a lot of great finalists and winners. So congratulations to everyone. And then last week in August, we honored Scott Adams, the lead water utility worker in Public Works, who actually knows where all 50 plus thousand water meters are located in the city. It's pretty impressive. He's been with the city more than 40 years, so it's about time that he earned his due honor. So thank you, Scott. Next, we proclaimed September as Hunger Action Month with Melina Carey from Second Harvest Food Bank for coming by to tell us about the needs in Orange County. We then honor three code enforcement officers for helping reunite children with the parents at the U.S. Open. It's a really scary moment for these families. And Principal Code Enforcement Officer Eric and Senior Code Enforcement Officer Vin Vo and Court Enforcement Technician Jose Beltran handled these situations well under pressure with professionalism and an unwavering commitment to public safety and return the child to their parents. Next, we honored a group of volunteers that generously gave their time and talents to restore and revitalize the viewfinders on the Huntington Beach Pier. So thanks to Rachel, Jennifer, Mary, Kelsey, Sean, Steven, Chris, Terry, and Ed for their efforts as an example of community pride and service. If you haven't been on the pier recently, it's great. They cleaned up those viewfinders and they work perfectly for free. Next up, we recognize Christina Qualters, who is a Special Education Program Director at Ocean View School District with the Mayor Spotlight Award. Christina is an incredible resource for families of children with special needs. She goes far beyond simply overseeing programs. She helps parents understand the special education process, answers questions, explains available services, helps resolve concerns, and makes sure families do not feel lost or ignored while trying to advocate for their children. Thank you, Christina. Then Max, Marie, and Mike from Don Jose's Mexican restaurant stop by as they celebrate 60 years here in Surf City. Yeah, give it up. Quite the accomplishment for them to have been here for six decades, so thank you so much. It's my neighbor's favorite Mexican restaurant. Next up, we recognize staff members at Central Library that responded to a very scary and serious dog attack near the Central Library loading dock involving three dogs that exited a vehicle through a car window and attacked a young resident who was just sitting beneath a tree. The quick thinking of library staffers Marissa Rodriguez, Michelle Rosner, Lina Zubkoff, and Marina Eterbeid possibly saved a life by their quick actions. So thank you so much for your quick response under pressure. And then lastly, we honored the people who participated in the city celebration committee's Independence Day photo competition. Just great photos that really captured our spirit and community celebrating America's 250th birthday. Job well done. All right, next up is the business highlight presentation. So tonight we continue to celebrate the businesses that invest in Huntington Beach and strengthen our local economy. We'll highlight two recent ribbon-cuttings with the Chamber, share a reminder about our upcoming State of Surf City, which is free, and that's in partnership with the Huntington Beach Chamber of Commerce, and feature three local businesses through our Minute with the Mayor series. So this week we're highlighting two recent ribbon cuttings. First, Waves Market and Spirits. So Saul, thank you always for all you do for the community and for choosing to grow here in Huntington Beach. We're happy to have you as part of our business family. So thank you, Saul. And then Pizza Factory, which recently opened on Beach Boulevard in Adams. And we're very excited to welcome them to Huntington Beach as well. As I touched on, there's a reminder about our newly adapted State of Surf City this year, which will be presented in partnership with the Huntington Beach Chamber of Commerce. This year's event will take place for free at Pure Plaza with a built-in HB expo beginning at 4 p.m. featuring local businesses, nonprofits, and community partners. And then from 5 to 6, the program will include a year-end review from the Chamber of Commerce. My state of the city address and an abbreviated fireside chat moderated by the Orange County Business Council Following the program the chamber will host a ticketed VIP reception at Sandy's Beach Shack So we hope to see everyone there as we celebrate our community and those who continue to invest in Huntington Beach Should be good

Continuing with the Minute with the Mayor series, tonight we're highlighting three local businesses and organizations making a difference in Huntington Beach.

So at first, meet Current Surf, a surf forecasting app that gives surfers a more detailed look at conditions along the coastline before they hit the water. In this episode, I talk with founder Colin Weaver about how Current Surf uses hyperlocal data to analyze swells, currents, peakness, and other conditions to help surfers better understand their home break and other surf spots. I'm Mayor Casey McKeon. Today's episode of Minute with the Mayor takes us down to the U.S. Open of surfing. We're going to meet a young local kid named Colin Weaver who while at MIT created a really cool new surf report app called Current Surf. So let's go meet Colin to learn about it.

All right, Colin, so tell us about Current Surf. Yeah, so Current Surf is a surf forecasting app, and we're focused on just bringing you more accurate and more interpretable forecasts. What made you want to create that app? Surfers are smart, right? They know that if you want to get a reliable forecast, you have to weigh so many different factors to understand what's going on. whether it's looking at the tides, figuring out what direction the swell is coming from, the wind, it's like so much to figure out and oftentimes the forecast is just wrong. And so I've taken the time to really look into the data and surfing my whole life and hunting the beach to just say like, let's create a physics model that's more accurate and can tell you things that are more relevant to your surf session. Like what's the side current gonna be like? Or how long do I have to wait in between sets? And so that way you can just know better before you go. And then what do you just love about bringing this product to the Huntington Beach community? Everything that Huntington Beach has done for me. I grew up doing junior guards. I love nothing more than going out and surfing and then grabbing a wet burrito at Fiesta Grill on 17th Street. And so, yeah, that's like, it's everything to me to just be here and bring you. Thank you so much. Yeah, thank you.

That's another local entrepreneur right here from Surf City, USA. So remember to get your surf report local and keep Surf City thriving.

See you at the next stop. What's up, HB?

All right. Next we have, I'm joined by Councilman Burns to meet Elizabeth Mitchell. Executive Director of Orange County Speech Services, which is a Huntington Beach pediatric therapy provider serving children from birth to up to 21. The organization provides speech, occupational, physical, behavioral, feeding, and social skills services with a family-centered approach. So Elizabeth, thank you to you and your team for the important work you do to support Huntington Beach families. HB, I'm Mayor Casey McKeon with previous Mayor Pat Burns. Today's episode of Minute with the Mayor takes us to OC Speech Services right at Beeching Energy in the new Vision Building. Let's go meet the owner, Elizabeth. Elizabeth, tell us about OC Speech Services.

Yeah, OC Speech Services started with me providing speech and language screenings to preschools, daycares, and then grew over the last 15 years to 42 staff offering speech, OT, PT, ABA, in-center and in-home.

Tell us about this room. This one's interesting. Yeah.

So when kids come for specifically occupational therapy, they might have some sensory needs. So they might need to be in a swing before or moving their body, climbing, deep pressure. But also that's not isolated to just OT. So you could have a speech session in a swing or a physical therapy session in here as well.

Elizabeth, tell us about this space.

Yeah, so I mean kiddos might need to have a sensory break. It could be a break in between harder work if they're doing more academic type tasks or if they need to work on all kinds of different motor skills.

What ages are you serving in this facility?

Yeah, so we work with birth to 21. So we'll see an infant maybe who has like PT needs or feeding needs all the way up to age 21.

So what makes you guys so unique amongst this profession?

We are a multidisciplinary clinic under one roof. So we have OT, PT, speech, ABA, where you can get all the services your child needs in one space. We're family-centered, so we're making unique treatment plans based on what your child needs and then working to make sure you understand what to do at home.

That's another local gem right here in Huntington Beach. So remember to support our local businesses that help our community thrive. See you at the next stop. What's up? And then finally, Chief McCoy and I highlight How's the Weather, which is founded by Aaron Clark. Born from grief and grounded in love, How's the Weather encourages honest conversations and meaningful connections by giving people a simple way to ask how someone is really doing. In just five months, it has grown from an idea into a movement reaching 25 states and three countries. Through schools, businesses, and everyday interactions, Aaron is helping people feel seen, supported, and connected. What's up, HB? I'm Mayor Casey McKeon with special guest, Fire Chief Eric McCoy. Today we're at Gibbs Park to meet with Erin to talk about our non-profit, How's the Weather? So Erin, tell us about How's the Weather?

How's the Weather is a non-profit company that I started 10 months ago in honor of my husband. Okay. And it's a mental wellness check-in to ask really what's going on inside of us, right? Mental health is so important. And in my grief, when people would say, how are you? Fine was a lie. And I created a language that we could not lie and be more intimate and... open with each other and really support mental health.

Tell us a little bit about the book and the schools.

Yeah, it's been amazing because you're right, grief was so debilitating to me. I actually had to retire from my job that I loved. I worked at the school district for... 15 years in special ed and I loved it but I created this book in this language so I could get back and talk to those kids that I love so much and I always say that from like 8 to 80 we're all kids inside and we need a language other than fine to answer how are you.

And tell us how the movement's grown. I mean, it's not just local anymore, right?

I have reached 28 states and three countries just by really the logo. So many people have reached out through my website. And here I am 10 months later, most importantly in my hometown. But 28 states is pretty cool.

That's another local nonprofit right here in Huntington Beach giving back to our community. So always remember, how's the weather, HB? Thank you to all the businesses and organizations that continue to invest in Huntington Beach and contribute to our local economy. We appreciate your partnership, your investment, and your commitment to our community. We're proud to continue highlighting the people and businesses that make Huntington Beach such a special place to live, work, and visit. Thank you. Up next, we have community events announcements. Madam Clerk, please call for community events announcements.

The City Council will now receive announcement for community events only. community events announcements are accepted in person. Please queue in the designated area along the stairs and use either podium. State your name and organization for the record. Each organization is allotted two minutes for its announcement. Please come to the podium.

My name is Kelly Frankowitz. I'm the president of the Greater Huntington Beach Interfaith Council. which is a nonprofit that our intention is to create unity in Huntington Beach among people of all faiths for the benefit of all of us. And tonight I am here to invite you to the Blessing of the Waves, which happens every year on the second Sunday in September. Contrary to what this T-shirt says, it's on September 13th this year. beginning at 5 o'clock with music by the B-52 lifeguard band, which is really cool. And they play Beach Boys-style music. At 5.30, the actual program will begin. We will have the blowing of the conch, the blowing of the shofar. There will be Polynesian dancers. We'll be giving away Frisbees. We'll... have interfaith leaders giving reflections from Muslim, Jewish, Sikh, Zoroastrian, Baha'i, Christian points of view, and all in the spirit of unity and caring for one another. The keynote speaker will be Duke Aipa, who was named for Duke Kahanamoku, our, the gentleman that we honor right there at PCH and Main with the statue there. So over here right now is a huge banner that welcomes everyone to come to this event. We hope to see you there. Come right down to the grass. Come prepared with a chair or a blanket or something to sit on the grass and... All right, well, shalom, aloha, and y'all come.

Thank you.

Good evening. Alan Zimmer. I just wanted to share with the citizens that on Saturday, September 12th, for the first time in the history of Huntington Beach, there will be a golf tournament between Meadowlark Golf Course and the Huntington Club to play for this trophy, the championship of Huntington Beach, and this is called the Surf City Cup. So myself and Scott Duran have been working with Eric Fouquier of the Huntington Club to make this happen. 24 players from each side will be participating. Everybody's welcome to come down, walk, go say hi to Reuben in the morning. Have a great day and we'll see if the Muny can beat the country club. Good night. Thanks.

All right, now supplemental communications. Madam Clerk, do we have any supplemental communications?

Yes, we do. From the consent calendar, item number 19, nine emails received regarding the proposed Edison Park reconfiguration and execution of amendment number one with RRM Design Group. Item number 20, one email received regarding the approval of the language design donation and installation of the Sons of the American Revolution America 250 Memorial Bench on City Hall property as approved by the Community and Library Services Commission. Under the administrative items, number 25, one email received regarding the approval of the design and language for the America 250 plaque at Pierre Plaza memo. Number 26, one email received and memo from Chief Financial Officer Zach Zee Pertaining to the Finance Commission Subcommittee Report, Financial Impact of the Police Officers Association MOU and Options to Avoid Bankruptcy. Item number 27, one email received regarding resolution number 2026-37, approving and implementing the Memorandum of Understanding between the City of Huntington Beach and the Huntington Beach Police Officers Association for July 1st, 2026 through June 30th, 2029. All right.

Moving on to public comments. Before we begin public comments, I'd like to announce that pursuant to new state legislation SB707, public comments will be accepted both in person and remotely via Zoom. The city clerk will not read profane, obscene, or otherwise inappropriate Zoom display names or identifiers. Instructions for providing comments in Zoom can be found on the agenda cover page and on the city clerk webpage. City Clerk will provide instructions for participating in public comment. Madam Clerk, how many speakers do we have?

30.

Please call them up.

The City Council will now receive public comments for any topic, including items on the open session agenda. If you are here to provide in-person comments for open session, your number will be called. Once your number is called, queue in the designated area along the stairs. Use either podium and state your name if you would like it reflected in the minutes. If you would like to provide comments for open session items via Zoom use the raise your hand feature in Zoom and you will be called to speak by your Zoom identifier. Once called be prepared to unmute your microphone to speak. We'll begin with the Zoom callers and numbers 70 through 80 can queue at the stairs and we will follow with the in-person speakers. Sean McDonough, it is your turn to speak. Please unmute yourself. Your time begins now.

Thank you. Good evening, Mr. Mayor and council members. My name is Sean McDonough. I'm a patrol sergeant for HVPD and the president of the Huntington Beach Police Office Association. I want to talk about something that affects every single one of you in the room, the safety of our community. Huntington Beach is home to nearly 200,000 residents, and we welcome about 14 million visitors each year. That's a vibrant, thriving city, but to keep it safe, we need a police force that is adequately staffed and resourced and properly. Here's the reality. Based on comparable Orange County cities, Huntington Beach should have approximately 245 officers. Instead, our police department has gone from 224 funded positions down to 211 after 13 were defunded. With only about 188 officers currently working, that's a serious concern and one that demands our immediate attention. When we don't have enough officers on the street, something must give. Our police department has increasingly relied on overtime to fill the gaps and maintain service levels, then we are blamed for working overtime. Mass overtime to maintain basic service levels is not a long term solution. I want to recognize the council members who stood firmly behind our police officers and made public safety a genuine priority. But I also want to be direct. Public safety should never be the subject of political games or attempt to political sabotage as we've seen in the recent weeks. Not only do we have to fight crime for this wonderful city, now we have to fight against some of our city leadership to support public safety. Here's where we stand. We have negotiated with the city for 10 months. We've reached a tentative agreement, good faith. We didn't have time for political posturing or gimmicks. The reality is stark. We are understaffed. We're out of contract. We're at the bottom of the competitive market. Every day this drags on, our ability to recruit suffers, our ability to staff suffers, public safety and the community suffer. Every day our reputation takes another hit. The delay and lack of leadership and decisive action from some is costing us experienced officers and qualified candidates who are taking jobs elsewhere. Let's move on this agreement. Let's stop the delay. Our residents and the millions of visitors who come here every day deserve a properly staffed police department and world-class public safety. They deserve officers who aren't burned out from endless overtime. The officers who risk their lives every day deserve your support. The community deserves safe schools, neighborhoods, and thriving businesses. We cannot afford to wait any longer. I ask you to support our successor, MOU, and thank you for your time.

Good evening, Mayor and members of the City Council. I'm Sergeant William Brownlee and I oversee the Huntington Beach Police Department's Background and Recruitment Unit. I'm here tonight to support the proposed POA contract and speak about the importance of remaining competitive in today's law enforcement job market. I see firsthand how difficult it is to hire qualified police officers. We conduct police recruit testing every two months. On average, 85 applicants show up, roughly 43 advance to an oral interview, about 10 make it into a full background investigation, and ultimately, we're lucky if we hire two or three qualified police recruits. We're looking for a very small number of qualified individuals from a much larger applicant pool who meet HPPD's standards and expectations. However, hiring a recruit does not immediately impact staffing. Between our hiring process, pre-academy, six and a half months in the police academy, and six to seven months of field training, it takes roughly 18 months before that recruit is fully trained. An experienced lateral officer can complete our hiring process and field training in six months, about a year sooner. Unfortunately, we aren't attracting as many highly qualified lateral applicants as we should be. Compensation and benefits matter when experienced officers decide where to work. Newport Beach and Anaheim are among the highest paying police departments in Orange County, and both currently have few or no vacancies. Prior to the decision to defund vacant HPPD positions, we had approximately 30 officer vacancies. We need to ask ourselves, why is that? Many of our officers live in Riverside County and spend two to three hours a day commuting. Ontario Police Department offers a more competitive pay and benefits package than HPPD. An officer living in that area could receive better compensation and benefits while reducing that commute to as little as 15 minutes. And this isn't hypothetical. This week we will lose one of our most experienced officers to the Ontario Police Department. Better compensation, better benefits, and a significantly shorter commute drove their decision. We cannot ignore this reality. Our current compensation ranks 12th among Orange County law enforcement agencies. Remaining competitive means attracting qualified recruits and experienced lateral officers while retaining the experienced officers we've already invested in. Lowering our hiring standards cannot be the solution. Doing so compromises the quality of service we provide and exposes the city to unnecessary liability. A competitive compensation package allows us to maintain those standards while competing for the best people. For those reasons, I respectfully ask the City Council to support ratification of the proposed POA contract and help ensure HBPD remains competitive in recruiting and retaining the high quality police officers Huntington Beach residents expect and deserve. Thank you.

Good evening, Mayor and members of the City Council. My name is Bernard Atkins. I'm a personnel officer and background investigator for the Huntington Beach Police Department. We're about 30 people short and are struggling to find quality people. I'm here tonight to address the importance of remaining competitive when recruiting lateral police officers. Nearly every agency in Orange County is competing for the same limited pool of experienced officers. These candidates compare salary, incentives, schedules, specialty pay, workload, department culture, and career opportunities before deciding where to apply. Many laterals are already established at their current agencies. They may have seniority, preferred days off, specialty assignments, vacation time, and promotional opportunities. Leaving could mean giving up those benefits and starting over at the bottom. Laterals want a department where their experience is respected, their family life is protected, and they can build a future attracting them ability future. Attracting requires competitive compensation, an efficient hiring process, a positive culture, and meaningful career opportunities. Hiring qualified ladders provides immediate benefits. They have already completed a post-academy field training and probation. They know how to handle calls, conduct investigation, make arrests, write reports, testify in court, manage stressful situations, Many also bring specialized experience in areas such as investigations, traffic, canines, SWAT, gangs, narcotics, mate, and field training. Ladders can fill patrol vacancies faster, reduce force over time, relieve pressure on current officers and become future detectives, field training officers, and corporals and sergeants. Entry-level recruits remain essential to our department's future. However, they must complete the academy, field training, and probation before becoming fully functioning officers. A successful recruiting strategy requires both recruits build our future while laterals provide immediate experience and help stabilize staffing. If HBPD is not competitive, experienced officers will choose surrounding agencies, vacancy will remain open longer, costs may increase, and staffing surges can contribute to burnout and denied time off. I respectfully ask the City Council to support the ratification of this proposed contract and help ensure HPPD remains competitive in recruiting and retaining high-quality police officers Huntington Beach residents expect and deserve. Thank you. Thank you.

Thank you. Next speaker, please.

Mayor, members of the City Council, thank you for your time once again today. My name is Reid Parker. I'm a detective here at the Huntington Beach Police Department. The landscape of modern law enforcement recruitment has not gotten any easier. We are operating in an environment where qualified candidates are scarce and the competition among regional agencies for top tier talent is fierce. When surrounding agencies offer superior compensation and benefit packages, our officers take notice. Without a truly competitive structure, we risk losing the hard-earned experience of our veterans either to neighboring departments or out of this profession entirely. This successor agreement isn't just a document. It's a strategic investment in the future of our department. It sends an unmistakable message that Huntington Beach stands behind its officers and recognizes the realities of today's market. By closing the pay gap, this contract gives HBPD the leverage to attract high-caliber recruits while ensuring our seasoned, highly trained officers stay right here where they belong. Now, how does this benefit our community, a community I not only live in, but I raise my family here? First, it reduces burnout and strengthens public trust. Proper staffing levels eliminate constant forced overtime. Sharp, rested officers build meaningful community relationships. They communicate better, and they handle complex situations safely and effectively. They can take the time to really listen to our residents when they call, rather than rushing off to clear the next backed-up call and holding. Second, it enables proactive public safety. Fully staffing moves our force out of a purely reactive posture. Instead of racing from emergency to emergency, from call to call, officers have the bandwidth to stay ahead of crime and keep neighborhoods genuinely safe. Investing in competitive compensation directly yields a safer city, a higher quality life for all of us, and a department operating at peak potential. I respectfully ask for your vote to approve this contract. Thank you for your time and continued support of our officers. Good evening.

Good evening. Thank you. Next speaker, please.

Good evening, ladies and gentlemen. My name is Zach Pricer, and I'm a detective with the Huntington Beach Police Department, currently serving in the Major Crimes Unit as a robbery homicide detective. Almost 24 years ago, the city of Huntington Beach took a chance on a young Marine by taking me in and allowing me to become a policeman in one of the greatest cities in America. And for this, I'm forever grateful. I've always said that the best part about being a cop in HB are the people that live and work here. They absolutely love us, and we love them. These are our people, and we are their cops. This was evident in 2020 during the protests when thousands of our people lined Main Street in support of our city and our police department. That was a feeling I will never forget. As my career winds down, I'm faced with the realization that my beloved department is not better than when I found it. Forced overtime is at a higher rate than I've ever seen it. Seasoned officers are leaving for other Orange County agencies, and burnout is more common than not. But with all that, we still come in every day to provide the best service we can with resources available to us at the time. But we can't do this alone. We need a solid backing from our city leadership. In addition to our primary assignments, we handle a heavy load of critical ancillary roles such as SWAT, crisis negotiation, drone operators, and teaching and instructing assignments. This is not sustainable with the officer shortage we currently are experiencing and creates the perfect storm for burnout. Several studies regarding overworked officers have shown this can lead to fatigue that almost always transitions to burnout. Carelessness becomes common, which leads to mistakes, and tragically, mistakes in our business can be fatal. In short, we need cops, but our people deserve the best. Like other industries, public safety is competing for talent. Without competitive compensation and benefits, we will not recruit new talent, nor will we retain what we have. In my first 20 years here, it was virtually unheard of to see HBCOPS lateral to other Orange County agencies. Now it is not so unusual. To prevent this, we must be competitive in our pay, our staffing, and our resources. Investing in equipment and technology is imperative, but we often ignore the most essential of all police equipment. What's the point of investing in the latest and greatest piece of gear if we don't invest in the most important element to that equation, which is the individual cop who is tasked to be perfect all the time? We as a rank and file police officers have proven time and time again our willingness to serve both our nation and our community. We need our city leaders to stand not just with us, but with the beloved people, our people, that we proudly serve and love. Thank you for listening, and God bless. Thank you.

Next speaker, please.

Good evening, counsel. My name is Cole Swain. I'm a lateral police officer here with the Huntington Beach Police Department. I wanted to share something with you because I've walked this path before at my previous department, and I'm seeing the same warning signs here at HBPD. When I arrived in my last department, it seemed fine on the surface. We had a functioning police force. We were providing service to the community, but underneath there were cracks. We weren't competitive in the recruiting market. So with that, we weren't recruiting the officers that we needed. That meant we had staffing shortages. Staffing shortages were handled by services to the city with much fewer officers. The morale started to decline. Experienced officers started looking elsewhere to departments that were better staffed, better compensated, departments where they wouldn't be worked to exhaustion. And when experienced officers left, we lost institutional knowledge and leadership. That made the remaining officers' jobs harder, which made it more likely for them to leave too. And I'm seeing those early signs here that we're on the same path. I'm seeing tight staffing. I'm seeing overtime becoming a regular expectation. I'm seeing experienced officers expressing frustration about workload and sustainability. I'm seeing the kind of strain that if left unaddressed leads to the exact same spiral I experienced before at my last agency. City leadership has the opportunity to intervene now before it gets as bad as it was at my previous department. The successor contract is that intervention. It makes us competitive so that we can stabilize staffing and break the cycle before it gains momentum. I'm asking this council, support the contract. Don't let HBPD walk the same painful path I watched another department walk. Be proactive. Invest in stability now. That's what's right for your officers and for your community. Thank you.

Thank you. Next speaker, please.

Good evening, Mayor and council members. My name is Tony. I'm an officer here with HBPD. The contract that is being discussed this evening is an investment in the department's future. Police departments run on experience, stability, and institutional knowledge. You can't buy those things cheaply, and you can't build them quickly. When we're not competitive in the market, we lose experienced officers to other departments and to retirement. staffing shortages will continue. And because we still have to provide the same level of service to our community, we immediately feel it in our overtime as remaining officers scramble to cover the gaps. This successor contract is an action which can help prevent that from happening. It makes us competitive in the market, keeps the people who make HBPD work here, attracts the next generation of quality officers, and signals to the community that city leadership is serious about maintaining a professional, stable police force that doesn't rely on burning out its workforce with unsustainable overtime. I can tell you personally, when I started my career here, I only applied to one department, and that's because HBPD had the reputation of being the department where the best officers in the county worked. Yes, it costs money up front, but consider the full financial picture. Overtime costs will continue growing with every officer vacancy, and we cannot fill those vacancies because we are not competitive in the free market, which we do not control. We're essentially paying more to cover fewer positions while still trying to provide the same level of world-class service that the citizens of Huntington Beach deserve. The successor contract reverses that trend by making us competitive, stabilizing our staffing, reducing overtime expense, improving retention, and protecting our officers' well-being. It's an investment that improves service and protects the people who are dedicated to this profession. This is an investment in the department we want, one that's properly staffed, competitive in the recruiting market, and sustainable for the long term. Thank you for your time and good night.

Thank you. Next speaker, please.

Good evening, Mayor and the members of City Council. My name is Danny Evans, and I am a police officer with Huntington Beach PD, one of our downtown Flippies officers. I want to talk about the choice in front of you because I've already watched one department make the wrong choice, and I don't want to watch it happen again. At my previous department, we faced a moment very similar to this one. Leadership knew we weren't competitive in the market. They could see staffing was tight. They could see officers were working overtime. They could feel the strain in the department's culture, and they faced a choice, take action or hope the problem would resolve itself. They chose to hope. They thought, maybe it won't get that bad. Maybe we can manage with tight staffing. Maybe officers will stick with us anyway. Well, they delayed, they waited, They looked for cheaper solutions, and the department paid the price. Over time, we lost experienced officers to departments that were more competitive, staffing got worse, overtime got worse, officer burnout accelerated, morale declined. The department became less effective, and eventually, the problem became critical. But by then, they had already lost years of institutional knowledge, years of leadership, and years of stability. I don't want that to happen, correction, I don't want that to be HPD's story. Right now, you have a choice, just like my previous department did. You can invest in the successor contract and stabilize your department before the crisis deepens, or you can hope the problem resolves itself and watch the same deterioration happen here. The evidence from my previous department is clear. The path forward requires investment. You have to be competitive. You have to maintain adequate staffing. You have to show officers that you value them and won't work them to exhaustion. The successor contract is a choice to be proactive instead of reactive. It's the choice to invest in stability and sustainability. It's the choice to do what's right for your officers and your community. I'm respectfully asking this council to make that choice. Support the contract. Please support your officers. Do what's right for public safety and for Huntington Beach PD's future. Thank you very much for your time.

Next speaker, please.

Good evening, Huntington Beach. My name is Luis Castillo, and I came to this department from a neighboring agency because that agency faced the same issues we're discussing tonight. I came to the Huntington Beach Police Department because I believed in its values and its future. I still believe in this agency and the work we do to provide the level of public safety this community deserves. But I am concerned about where we are going and the path we are currently headed down. The contract situation we are facing right now is a crossroads. City leadership can choose to value officers who have committed to Huntington Beach, who show up every day, who take on extra duties, who care deeply about this community, or they can choose a different path. But if you choose that different path, you shouldn't be surprised when experienced officers are lost to retirement or start looking at other departments. I'm telling you what I have learned from my past and what I have seen, It leads to difficulty recruiting new talented officers because word gets out. All of us have friends at other agencies and officers talk amongst each other about what's going on at their departments and what they're experiencing. That's not the reputation I want for the Huntington Beach Police Department. I am asking you to support this contract. We cannot risk losing officers and continue going down this road. Your support matters and I hope that you use it tonight. Thank you for your time. Thank you.

Next speaker, please.

Thank you, Mr. Mayor. My name is Mr. Amory Hanson. I'm speaking tonight in support of item 25, the Mayor and Councilman Burns and Kennedy's item, plaque to honor America's semi-concentennial. This plaque honors a unique moment, not just in America's history, but in Huntington Beach's history. It will make permanent the remembrance of America's semiconstantial and the reminder that freedom is not free. I urge the council to continue to celebrate America. Once again, I urge a yes vote on I am 27. Thank you.

Thank you.

Good evening, Mayor McKeon and Council, Pat Goodman. And I want to thank the Finance Commission and the staff for their work in explaining the impact of the Police Officers Association, MOU, on the city's budget and its ten year forecast. I hope council takes that analysis to heart and imposes real fiscal discipline going forward. As our elected leaders, you owe your constituents a clear explanation of where things stand and what options exist to change course. I can point to a few council decisions in the last few years with negative budget impacts. First, the May 2023 agreement that gave millions of dollars and gave up future revenue and took on some of the costs to the Code 4 Pacific Air Show. Second, the attempt to impose library book censorship, which includes refusing an 850,000 donation from the Friends of the Library for book purchases over three years. Funding that would have freed up city dollars for other expenses. like air conditioning at the Main Street Library. That scheme also mischaracterized our librarians as groomers and predators and helped trigger a failed special election that cost the city at least a million dollars. Third, the EIR and legal costs tied to the Symphony of Flowers, months long takeover of Central Park. We can't forget the ongoing lawsuits with the state over housing mandates and voter identification. At a minimum, avoiding these unforced errors would have postponed our structural deficit by a couple years, possibly. We all know public safety is a core council responsibility, and it's the largest expenditure category in the budget. Those funds must be managed responsibly, which means cautiously. That means a top-tier police, fire, water safety operation, but it also means adequately resourcing public works, community services, and our library system. Every one of these departments needs strong personnel IT and financial reporting support to function. You're threading a very fine needle tonight, and I hope that you take the position to err on prudence over favoritism. Any council member who receives a campaign contribution or plans to from any of the labor unions, including police and fire, prior to the election should recuse themselves from a vote on this matter. Thank you.

Thank you. Please call up the next speakers.

Next speakers, numbers 80 through 90, please come to the podium.

Go ahead, sir.

Good evening, Mayor, city council members, You might have a copy. I provided one to the clerk titled Supplemental Communication by John Riddell. I hope you remember me from all my recent advocacy to include four bocce ball courts as part of the Edison Park design. Thank you so much for your approval. On Tuesday, March 3rd of this year, that included four bocce ball courses. as part of Plan Option 2. Subsequently, on Wednesday, April 1st, I sent all of you an email that contained a link to my comprehensive 60-plus page report at Google Docs, best practices, contractors, outside synthetic bungee cords, and more. In that same email, I also sent it to Ashley, Kristen Martinez and Steve Barnes. Days later, I personally handed Ashley two hard copies. I hope you thought enough of this report, which was mostly born from the avoidable, costly mistakes made with the Bajiball courts at Murdy Park, that you might consider including it in any material sent to RRM Design Group for their review and consideration as part of the Edison Park design. Thank you so much. In fact, I shared a few words with Ashley here earlier, and she thought of a brilliant idea. One of the contractors that was in my book, Michael Grasser, Da Vinci Bocce in Michigan, would be perfect for the redo at Murdy Park because the material is only so thick, less than half an inch. So if Michael Grass or Da Vinci Bochy could somehow do Edison and then do Murdy, think about all the money that we could possibly save. And aren't we thinking about that more and more these days? Anyway, I hope you might consider that. And, of course, I'm with the Edison Park Community Group, and we would appreciate consideration for the following. Funds already allocated for Edison Park should remain dedicated to the park's redevelopment, even as the city faces serious financial constraints. The city should continue communicating and engaging directly with the surrounding community throughout the design process. And you can read the last request there. Thank you so much.

Thank you. Bocce. Next speaker, please.

Greetings, Tim Geddes in the house. Many fateful decisions will be made this month regarding not only the solvency of our city but the future of our community. We can no longer duck the hard choices which need to be made or put off the pain this city council has caused in its manifest mismanagement of our local government over the past four years. No more focusing on vanity projects like your esteemed mega leader. No more taking on losing legal fights with ideological idiocy and running up the meter on our debts in the process. No more dysfunctional leadership which is dismissive of our citizenry. It is time to get real and real fast. All of you on the dais are running out of time to turn this city around. For some of you, it may be too late. Speaking of the need for leadership, the second meritorious minute in my five-part series focuses on Surf City 4 candidate Erin Spivey. Erin is a former teacher and librarian with administrative smarts and experience who achieved civic fame in helping to defend our library system from assault by the Magas and their partisan extremist followers. She is running to restore our city's reputation and serve the real needs of our community. She wants to focus on infrastructure instead of ideology, leadership instead of lawsuits, and services instead of special interests. Erin is an HB native, a wife, a mother, and a dedicated volunteer, and she is committed to fixing problems instead of creating them. Her leadership skills and commitment to service will greatly enhance the decision-making abilities of our new City Council majority. This City Council seems intent on blowing another multi-million dollar hole in the budget with its MOU rating of our reserves, but also it has failed to come up with matching cuts or additional revenue sources. Does the sweetheart deal with Code 4, which is costing us millions now and in the future, look less inviting? Do the millions of dollars in potential lawsuit losses and possible penalties phase you at all? It is not your money, it is our money, and we don't want you squandering it. That is why we need change. Thank you.

Next speaker, please.

Good evening, Mayor and members of the City Council. My name is Nancy Bucos. I am a longtime resident of Southeast Hennington Beach and the coordinator for the Friends of Edison Park Community Group. We have about 300 neighbors and Edison High School students who currently work and try to beautify the Edison Community Center on a monthly basis. We're about six years strong now. I'm here tonight to express our full support for Agenda Item 19, approving and funding the initial design phase for Edison Park with the RRM Group. We are thrilled that RRM is being considered tonight, and they're a highly regarded firm that we've been following along and are especially grateful for the inclusion of Max Moriyama, who is a resident of the Southeast Area and Edison High School. a graduate landscape architect designer. He's very, very talented and he's gonna be part of the plan from what I see. And I fully support that along with everybody in the group that I represent. We just want to thank everybody, all of you that have participated in the talks over the years, because while it has taken a long time to get to this point, I believe that through that time we've really been able to come together and identify the true needs. That's a very special area, Edison Park. There are landfill constraints. It's a big old park, 38 acres, but only nine acres are usable. And so while the public may not know that, we've managed to come together, community residents, longtime advocates, and designers, as well as the city leadership. And I think we've come up with something really special here, and I really look forward to moving forward the same way we got here, together, keeping the stakeholders, keeping the communication open, and just working together to make that area, that second largest park that we have, exceptional. And there is just so much excitement down there for what's coming and so we just want to say thank you I want to say thank you and I hope to stay and be able to be part of the discussion moving forward so thank you very much thank you

Next speaker, please. Tony Riccobono, Huntington Beach resident for 29 years. Mayor McKinnon and City Council, thanks for letting me speak. I'm here to speak in support of Agenda Item 19 regarding Edison Park and the selection of RRM to go to the design phase. As Nancy mentioned, this has taken a long time, but we've got some momentum now, and we want to keep that going. We want to keep this process going. RRM is a very well-regarded design firms, so I was very pleased to see this process continue to move forward. As part of the Edison Park community group, I just want to urge you to continue to keep our group involved, continue to keep the community involved, continue to keep community informed, and especially continue to keep Max Moriyama involved. He's got the skills and talent that are really unmatched in this space, and he knows the community and what the community is looking for more than anybody else. So it's just very important that you keep the community and Max involved in this process. Thank you.

Thank you. Next speaker, please.

Mayor McKinnon, members of the City Council, I'm Ding Jo Curry. I'm speaking tonight as a member of the Edison Park Community Group, which has worked closely with our community neighbors, city council members, and staff for the past few years now. From the city's councils, not all of you were on that council back in 2021, now in 2026. We have reached, I think, at a very important juncture because of two things, and that is the solidarity and the persistence of our community, and also the willingness of the city leadership to listen, engage, and contribute to conversations. So tonight, I'm not here to make a complaint. I'm here, on the contrary, to thank you. the city leaders. I especially want to acknowledge our Mayor Casey McKeon for his leadership in keeping the dialogues going with me and with many members of the community since he came on board. He led that charge. Thank you, Mayor. And thank you also to city council members, all of you, and city staff that to recognize that when you engage in the community, I know it takes a lot of time, effort, extra time that maybe you don't want to spend. But I can tell you that based on this case studies, that ultimately what you have done to allow the time to engage the community, we produce a better win-win outcome for our community. So our Edison Park Community Group, fully support the selection of RRM design group for this next phase of the design for the Edison Park. Moving forward, we trust that the design elements of the community that were submitted to you before will be included as integral part of the park design. I want to also echo some of the comments and they said our group wants to recognize Max Moriyama, He's world-class architect who has been the community's hero throughout this process from day one. Max has contributed countless of hours of his professional expertise entirely, entirely pro bono. More importantly, he listened to the community and he helped us translate those needs into very thoughtful design elements and solutions to present to you To the city as alternative. So we're very pleased that max will continue to work pro bono with our RM so and He will continue to work with our community work with the city into the next phase. I Think that I speak to the group that his continue and this is max of course continue Involvement will help the park to be a beautiful park that we will be proud of. Thank you. I

Thank you, Dean Joe. Next speaker, please.

Yes, my name is Clayton King. I've lived in Huntington Beach since 1978 and southeast Huntington Beach since 1988. I'm concerned about a recent public records request act filed by Gina Clayton-Tarvin, that the city rejected, failed to comply with, which necessitated, well, not necessitated, but caused her to file a civil lawsuit requesting that the court issue a peremptory writ or mandate to force the response and disclosure under the Public Records Act. What I want, and as a lawyer, I can tell you, she's going to win. on that peremptory writ. So you are going to disclose and respond to that. That's a guarantee in my legal judgment. You had a closed session earlier today. I don't know what your acting city attorney advised you regarding that. I hope he advised you, as I'm saying, that you're going to lose on that. But what I want to know right now, and what I think the public would like to know, is what are you hiding? This is a simple thing. It should have been done. You talk about transparency, and what are you hiding? Could you please answer that question? I'd like to hear an answer from any member who'd like to respond.

Sir, as an attorney, I know you understand that we cannot communicate during public comments. It violates the Brown Act.

Well, it's not, in terms of you explaining, let me put it another way. Why did you choose to fight this? It shouldn't have been done.

So again, we cannot communicate with the public during public comments that violates the Brown Act. Okay.

All right. Well, I guess that answers that. So then, in that case, Mr. McKeon, since you and I have discussed this a couple times, are we ever going to get some signs up on Le Monde across from Ralph Bauer Park? Is that a yes? You're not going to answer?

Sir, again, we can't respond during public comments. So, but...

Okay, well, I'll take that.

I'll come to your house tomorrow and talk to you. We live on the same street, so I'll come and talk to you.

Yeah, I know that.

You live just down the corner.

Give me a time frame on that. If you're not home, I'll come by again the next day.

Pardon me? If you're not home, I'll come by the next day. I'll come talk to you.

All right.

Thank you. All right. Thank you.

Next speaker, please. Good evening. My name is Tommy Higgs, and I'm a police officer assigned to patrol with the Huntington Beach Police Department. About nine years ago, I lateraled to Huntington Beach Police Department along with many other officers. I chose Huntington Beach because I wanted to work for a city that valued its officers, offered competitive pay and benefits, and provided a positive working environment. Having personally gone through the lateral process, I know firsthand how much compensation, benefits, and working conditions factor into an officer's decision to leave one agency to join another. I also came to the Huntington Beach because of the reputation of this department. HBPD was known as an agency that had its support from this community and city leadership. Those things mattered to me because I came from an agency where that support was lacking, and I saw firsthand the effect that can have on morale, retention, and overall working environment. I do not want to see HBPD move in that direction, especially knowing what it looks like. The successor contract being considered tonight is important to the future of this department. Recruiting qualified police officers has become incredibly difficult and increasingly competitive. Law enforcement has changed dramatically, and agencies throughout California are competing for the same shrinking pool of qualified candidates. If we are not offering competitive pay and benefits, Huntington Beach risks being left behind. That means fewer officers, greater staffing challenges, and potentially losing quality candidates to other agencies. That is not what this department needs and is certainly not what this community deserves. Officers today have more options than ever. We constantly see advertisements from competing agencies offering higher pay, better benefits, hiring incentives, and substantial bonuses. At the same time, experienced officers have the option of leaving for other agencies, retiring, or walking away from law enforcement altogether. Without keeping HPPD competitive, we risk losing not only prospective officers, but also experienced officers who have spent years, and in some cases decades, developing that knowledge, leadership, and experience that makes this department successful. This contract helps change that. It makes HBPD more competitive in attracting laterals and new recruits while also helping us retain the experienced officers we already have. It sends a message to our officers that the city understands the challenges facing law enforcement today and is willing to invest in keeping Huntington Beach competitive. That investment allows us to retain invaluable experience and leadership while attracting quality candidates who might otherwise choose another department. This contract is about more than recruitment and retention. It is about positioning HBPD for long-term success. It is about maintaining the quality of police service that the residents of Huntington Beach expect and deserve. And it shows our officers that their careers, their families, and their futures matter to the city leadership. You have said that you support this police department. Tonight, I respectfully ask you to demonstrate that by voting to ratify this contract and invest in the future of HPPD. Thank you for your time and consideration.

Thank you.

Next speaker, please.

My name is Peggy Hepler. I'm a 30-year homeowner resident of Huntington Beach. And I'm here to speak about the proposed pay raise for our city's police force. And I support and highly commend the work that they do to keep us safe. That being said, I cannot abide by this proposal in light of our current fiscal situation. Promising 17% pay raise over three years given our current fiscal deficit of now over $15 million. due in large part to endless lawsuits that have nothing to do with good city governance and everything to do with extreme ideologies that do not improve the lives of residents and only hurt our city's reputation, I fear that we cannot afford this pay raise commitment at this time. If things had been managed fiscally properly and we had it in our budget, I would be fully in support of this. But I can't see that we can do this. My understanding is adopting this plan may well drive Huntington Beach off a fiscal cliff and put us in bankruptcy. Playing to the wishes of the Police Officers Association by members of this board for campaign contributions and endorsements in the upcoming election is not in the best interest of this city's residents. Thank you for your time.

Thank you. Next speaker, please.

I want to be very clear about the difference between operational expenses and reserves, so I'm going to tell a short story about something that happened to an HOA where I'm a board member. Running an HOA is a lot like running a city, only on a much smaller scale. The Homeowners Association is responsible for the maintenance of the common areas, things like pools, clubhouses, driveways, and parking areas, and for a common condominium complex, the external structures of all the buildings. Operational expenses are those that get paid regularly, like gas and water bills, landscape maintenance costs, and insurance. Other expenses, like re-roofing, repainting, repaving the streets, are long-term projects that are done once every 10 to 20 years. And for those projects, the HOA saves up by annually depositing money into what's called a reserve fund to save up over time. Several years ago, we had a fire that damaged two units in our complex. Although we had not made any claims in years, our insurer tripled our premium, and no other insurer would even give us a quote. We had not budgeted for an insurance premium that was triple the prior year's costs, but we could not responsibly go without insurance. So we did the only thing we could do. We borrowed the money from our roofing reserve to pay the insurance premium. Under California law, when an HOA borrows from reserves to pay for operational expense, that money must be repaid within one year. And there's a good reason for that. When we borrowed from our roofing reserves to pay the insurance, that meant we weren't on track to have the money necessary to re-roof the complex when it would be needed. So we had to find a way to replenish the roof reserve fund within a year, both to comply with the law and to make sure we'd have the necessary funds when needed. Unfortunately, California law does not impose the same restrictions regarding reserves on city councils. This city council keeps stealing from the reserve funds to balance the operational budget, but they never pay it back. What does that mean for me and you? It means that long-term projects like repaving roads, fixing storm drains and lift stations, and upgrading the water distribution system are underfunded. It means that eventually the city will have to choose between breaking those projects into numerous partial sub-projects, which will cost more over time, or delaying each project until the reserves recover. Either way, it means that some or all of the city's infrastructure will not be replaced before its predicted failure date. In the meantime, they just hope and pray the systems don't fail at their predicted end of life. Maybe they're hoping to be out of office before the bill comes due so it'll be somebody else's problem. It's kind of like playing Russian roulette. They're gambling that something catastrophic doesn't happen, except that the gun is pointed at your head.

Yeah, hello, well I've mentioned one of these topics before. I'm very concerned about making sure that we do not participate in any new, new oil drilling off of our coast. Because the last time that that happened, 10 years ago, 25,000 barrels of oil spilled onto our beaches and it cost us millions of dollars. So I hope we're not gonna do any new oil drilling here. Secondly, in terms of revenue, yes, we certainly are in a fiscal deficit, and I recommend selling the police helicopters. They're worth a lot of money, and replacing them with modern day, 21st century drones. They're much more significant and successful in crime fighting. We could make a lot of money off of selling our helicopters. The drones can go in all kinds of areas where the police can, the helicopters can never see crime. They can go in between alleys and houses. And so I think we would make very good money if we sold off the preceding century or whatever, preceding 10 years of success with our helicopters. That's it, thank you.

Thank you. Next speaker, please.

Hello, fellow council members. Oh, come on, guys. First, the police department getting more. They get over $100 million a year. Over $100 million a year, and now you guys want to give them 17%? This is insane. This is insane. About the drones, we already pay $20,000 a year for drone batteries. That's a lot of drones. Okay, I mean, listening and looking for, I mean, for things that they don't need to look for, and also our privacy is completely invaded as it is. And let me tell you something, but these cops that show up here and they say that they moved laterally over here, they moved laterally over here without the raises. Okay, so they didn't need the raises. Now they just want a bonus. And I bet you when they were talking and then making all the speeches, I mean, writing their speeches today, it was in our time. Because they only work three days a week. Three days a week, come on. And then now they want to raise? They're stealing us blind. This is insane. And we have to pay for it. We have to pay for it. And it stays forever. 25 years. After 25 years, they get paid 100% for their retirement. 100%. Who, small businessmen, who gets a retirement of 100% for the rest of their lives? And then if they die, if they're married, guess how much the wife makes after they die? 50%? No. It's 100%. Okay, so adding more things. By the way, oh, there he is. Chief Perra. Chief Perra used to be the city manager. Everybody said how great he was when he was in both positions, even though he wasn't allowed to because his contract says that he's not allowed to do anything else except for 40 hours of work over here unless the city manager allows him to. Not you guys, but in the contract it says unless the city manager allows him to. The city manager left. before. And then he took two jobs and he got paid full pay until everybody discovered it. For both positions. And everybody said how great he was. Well, that was four years ago, three years ago. Hey, if that happened, if that happened three years ago, then how great he was. And he was only working part-time and then part-time over at the city manager's office. I mean, the percentage, the people that left, they didn't leave immediately. They left slowly, slowly, and he didn't notice it. He paid more attention to bringing the library, which is one of our most important resources, to defund, privatize the library. That's what the city manager did, because you guys can bring it up for a vote, and so can the city manager. And he wanted to defund the library. They only get $3 million a year. $3 million a year, and it costs a million dollars to have a vote for it. I mean, something's... Eric, I love you, but... So, come on, guys. This is crazy. Give me any more money, please. Please, please, reconsider. You don't have to do it now. The guys that are already hired, they came in here laterally. Well, either they're stupid enough to come over here. They were sold. They were sold on us because we don't have crime. We don't have crime over here, so it's safer. So why do we have to pay them? Thanks, Roger.

Next 10 speakers, numbers 90 through 98, or 90 through 100. Go ahead, sir.

Pat, we all know how much you idolize this statue. I have not heard you disagree with this statue a single time. So I have to assume that you fully support his actions. You fully support RFK Jr. and the recent outbreaks of measles and explosive diarrhea. You fully support the destruction of the east wing of the White House, so symbolic to everything that the statue does. You fully support a sole source contract to paint the reflecting pool. That's why you support sole source contracts in Huntington Beach. You fully support the war in Iran, the resultant increase in gas prices, and the staggering depletion of our defense arsenal. You fully support ICE. Pat, you said something about how you have visited many countries where people disappear, but you do not see people disappearing in California. You do not see people disappearing in Orange County. You do not see people disappearing in Huntington Beach. Open your eyes. Stop fascism. Pat, we all know how much you idolize this statue. I have even heard that you want to make a full-sized version near City Hall. You have limited flags that can be flown over City Hall to those that you think are supported by all voters in Huntington Beach, but somehow your statue would be okay. The statue is so weak that he renames lakes and puts his names on buildings. I bet you would like to see the Huntington Beach City Hall to be named after the statue. George Washington could not tell a lie and admitted to chopping down a cherry tree. But the statue always tells a lie and won't admit to chopping down 60 cherry trees. Pat, we all know how much you idolize the statue. I just want to set the record straight.

You're welcome. Next speaker, please.

Good evening. First off, I recognize the police officers advocating for themselves. My nonprofit had to cut payroll by 75% to stay solvent, so I understand having to do more with a lot less. Now, tonight we invoke Jesus' name in the spirit of cooperation, but council actions are anything but cooperative. Council members have slandered public servants, turned on each other at council meetings, and made unacceptable comments about public speakers. You've made backroom deals of questionable merit and then were so untransparent that you were sued in order for the public to access public records. Honestly, why are you trying to hide the Ayrshire settlement? What's so bad? Now, how much money have you lost in lawsuits against the state of California while increasing the city attorney's budget? Maybe it's time to cooperate. When it comes to promoting public welfare versus MAGA culture wars, you've picked culture wars every time. You've ignored the budget shortfall to put your name on plaques. When thousands of residents signed a petition to support the public library, you ignored them and spent 1.4 million on an unnecessary special election, which you lost. Try cooperating with the rest of us, not just the people who pay for campaign signs. Meanwhile, there are opportunities that are being ignored. You're turning down over $800,000 in grant money while giving a sweetheart rent to a private collection, which is encroaching on public space, so their rent really should go up. It's only fair for business. Now, what solutions have been floated for our budget problems? There's been a deal with the bankrupt Canadian light show, renting out billboard space on lifeguard towers, and upgrading the sports complex so that out-of-towners will use it more. Honestly, you can do better. And I just have to say, calling something communism is a boogeyman. It's a convenient slur for when you don't like something and don't have a better rebuttal. It's a fear tactic from the 1950s called the Red Scare, and it failed then and it will fail now. Again, do better. We all deserve it.

Next speaker. Russell Neil, Huntington Beach. In the Bible, God tells his people, I have set before you life and death, blessings and curses. Now choose life so that you and your children may live. The choice of death and rejection of the life God gives characterizes today's political left. Speakers mocked the killing of Charlie Kirk to clapping and cheering crowds. The murder of United Healthcare CEO Brian Thompson is a hero. Hordes of women rally in support of Lindsay Clancy, and elective abortion is their holy sacrament. Socialism itself just offers a living death, a cradle to grave hospice system, keeping people barely alive in a system where nothing they can do can result in either success or failure. Yet it is preferred by the left over a vital life of overcoming challenges. Ultimately, the left regards humanity itself as a problem, as a cancer on the planet. They regard each baby as just another carbon footprint, as if they are pursuing not zero population growth, but zero population. Every blue city and state is in a death spiral, losing population and businesses. This is true of California and was true of Huntington Beach before the election of the current council. Since then, the city has been revived with crime and homelessness down and business up in what is acknowledged as the best managed city in California. Therefore, the rejection of the four leftist ideologues and the election of Casey McKeon, Pat Burns, Andrew Gruhl, and Brian Theanis This November is a matter of choosing life over death for our city. Thank you, and may God bless and preserve Huntington Beach.

Thank you. Next speaker, please.

Good evening, Mayor and Council. My name is Brennan Laraba. I've been with the Huntington Beach Police Department for five years. In the time I've been here, I've watched the department evolve, and I've also watched what happens when we don't stay competitive in the recruiting market. Over the years, I've seen how competitive the market is for policing. It's hard to recruit and retain the best qualified offers this community deserves, and we lose good, experienced officers to retirement. Experienced people who train new recruits, who carried institutional knowledge, and who made this department stronger. Every time someone like that walks out the door, we lose something irreplaceable. leadership, mentorship, and the kind of stability that takes years to build. Right now, I'm concerned. We're heading down that path again. Staffing is tight, and I have personally felt the strain. I do not want to see us lose officers to other neighboring agencies. I do not want us to continue down this path of being understaffed at some of the lowest staffing numbers in years. I know from my time here that if we don't address the issues we are facing and make HPPD competitive now, we'll see more experienced officers leave. We will see quality recruits go to neighboring agencies who are positioned at the top of the police market. We should be focused on retaining the people who should be training the next generation and leading this department forward. The successor contract is a move in the right direction. It signals to our officers, to me, to my peers, and to the younger officers coming up that this city values us and invests in us. It keeps experienced people here where they belong and where they can mentor and where they can lead. That's what's best for our community, and that's what's best for public safety. I'm asking you to support it. Thank you for your time.

Good evening, Mayor and city council members. My name is Aaron Etchity. I have been with the Huntington Beach Police Department for nine years, and I am currently assigned as a detective. A successful community starts with the public safety. It's essential to our economic health. Businesses won't invest in areas where they don't feel secure. Tourists won't return to unsafe destinations, and residents won't stay in neighborhoods where crime is a concern. When we invest in safety, we are directly investing in Huntington Beach's economic future and the well-being of everyone who lives, works and visits here. A thriving community needs officers who can respond quickly to emergencies, build relationships with residents, engage in community policing and create the visible presence that deters crime and builds public confidence. When officers are stretched too thin, response times suffer, community connections weaken, and the department struggles to address quality of life issues that make our schools, parks, and neighborhoods safer. This successor contract acknowledges the reality and demonstrates a commitment to public safety as a fundamental investment in our community's success by our city leaders. By properly supporting our police department, we're choosing to invest in the safety, security, and prosperity that every resident of Huntington Beach deserves. This contract is an investment to just us. It's an investment to the community because it creates a department that is properly staffed and sustainable for the people who work in this field. It's one where officers aren't working unsustainable overtime. It's one where experienced veteran officers stay mentor the next generation instead of burning out and leaving. It's one where we attract quality people who want to build careers here because they know are supported by the city and the city leadership. That is an investment worth making for our community, for our officers, for the future and reputation of not just the Huntington Beach Police Department but the city of Huntington Beach. I respectfully ask that you guys support this contract. Thank you for your time.

Thank you. Next speaker, please.

Good evening, members of City Council. My name is Jason. I'm a police officer at Huntington Beach PD. First of all, God bless and thank you for your service. It's much appreciated. As you heard this evening, this contract is going in the right direction for the community, for public safety, the well-being of our employees, and the investment in the future of Huntington Beach. A competitive contract attracts and retains the quality officers we desperately need, quality officers that are the foundation for a successful public safety program, and that also limit liability to the city. Right now, police recruiting is incredibly difficult. and without competitive payment benefits, Huntington Beach falls behind. In today's environment, officers are faced with opportunistic and unprecedented choices. Move to better paying departments or leave policing altogether. Both of which have happened and are currently happening here in Huntington Beach. Without this contract, we will continue to run the risk of losing more experienced officers And when seasoned veterans leave, we lose decades of tacit knowledge, training and experience that not only took years to build, but took money to build. The more we delay in this market, the gap widens. We don't dictate the labor market, it dictates us. Other departments in the region offer more competitive packages, and that gap is only growing larger. The longer we wait, the harder it becomes to attract quality candidates, and the more difficult it is to retain the experienced officers who know our community, who are experts in the current public safety issues here in Huntington Beach, and who have also developed solid relationships with our residents. This isn't about catching up with one or two agencies. It's about making sure that we can compete at all. A police workforce that is understaffed and burned out on overtime not only is personally dangerous, but it also doesn't serve the citizens of Huntington Beach well. It leads to slower response times, less proactive policing, weaker community relationships, and fosters a department that is always reactive and only trying to ever catch up. I ask a question. If being competitive and hiring quality personnel is too expensive, what is the cost of a mishap? What is the cost of police work-related lawsuits? What is the cost of making bad case law? I assure you the cost of the latter is substantially greater. Lastly, Huntington Beach deserves quality officers who have the time, energy, and experience to be effective and appropriately combat crime. This contract is the investment that keeps us relevant in the market, protects public safety, and ensures Huntington Beach remains the great city that it is, where residents and visitors feel secure, and a place where businesses want to thrive. Thank you. Thank you.

All right. Thank you, everyone, for speaking. Up next is council committee appointment announcements. Council members, does anyone have any council committee appointment announcements?

Yes. I'd like to announce I'm appointing Austin Edsel to my planning commission.

Okay. Anybody else? Seeing none. AB 1234 reporting. Does anyone have anything to report? Seeing none. Openness and negotiation disclosures. Does anyone have anything to disclose?

Spoke with police and fire. Okay.

I spoke with police, fire, and that's it. Okay.

Anybody else?

I spoke with POA.

Okay. Up next, we have the city manager's report. City manager, do you have anything to report?

Nothing is a nightmare.

Thanks, Travis. Up next is the city treasurer's report. City treasurer, please introduce the report.

Good evening, council members. Just over a year ago, I took the oath of office as your city treasurer. I laid out an aggressive agenda for our treasurer's office. My team teased me at the time that if we accomplished a fraction of that agenda, it would be the death of all of us. I'm pleased to report tonight that over the last year, we achieved that agenda and then doubled down on it. Let's review the results for Q4 FY2026 and discuss the progress that has been made in the city treasurer's office over the last year. Quick reminder that, as always, our investment priorities for our portfolio are safety, liquidity, and yield, in that order. Q4 was another record quarter for investment returns on both a percentage and an absolute dollar basis. This is the fourth straight record since I stepped in as the treasurer. Q4 returns were just shy of 4%, bringing our total annual return for FY25-26 to 3.74%, right in line with our 18-month Treasury benchmark. I anticipate that returns should continue to slowly inch higher over the next few quarters as we finish rolling off lower interest rate bonds. We continued the progress against our diversification strategy this quarter, increasing municipal bonds from 5% of our portfolio to 14% of our total portfolio. These bonds are all AA rated, equal to the rating of US Treasuries, but trading at roughly 10 to 20 basis points of investment premium to them. This quarterly record lifted our full-year interest income to a record $16.4 million. That amount exceeded our initial forecast by nearly $1.5 million, and last year's results by $3.4 million. Over the last five years, we have seen our investment rate of return more than triple and our interest income nearly quintuple. This extra income was a key ingredient in helping balance our budget this past fiscal year and ensuring that we have the financial resources necessary to keep our city safe. We have materially shifted the overall composition of our portfolio and aggressively managed our cash flow over the last year. We shifted roughly 20% of the portfolio from short-term to long-term bonds and 40% into higher yielding sectors. These decisions are allowing us to capture an incremental 10 to 40 basis points of premium on each investment on nearly half of the portfolio. This premium translates into a couple million dollars of additional investment income across the next few years. The cash and holdings in our portfolio were fully compliant this quarter with our investment policy and the California General Code. 87% of our portfolio is held in AAA or AA rated securities. That is the highest share since I took office last year. We are taking strategic risks in areas like bond duration and category, while intentionally avoiding unnecessary risks like holding lower rated securities with a higher potential of default. We are also making innovative choices that produce concrete results for our residents. We plan to move $2.5 million of investment funds from our West Orange County Water Board JPA back into Huntington Beach's enterprise funds. This move allows us to generate at least 50 basis points of incremental return on those funds until we eventually spend that $2.5 million on other critical capital improvements to our city's aging water infrastructure. We are also returning $2 million to our neighboring cities so they can do the same for their water infrastructure. A very special thanks to Council Members Burns and Vandermark for co-championing this initiative with me that puts our residents' needs first. The agenda I laid out a year ago for our Treasurer's Office was simple. Focus on the basics of good government in a Treasurer's Office. That agenda had three fundamental tenets. detailed transparency for residents and how we operate, accountability for our activities and the outcomes we generate, and a commitment to learning about and then delivering against our community's most salient needs. Transparency began with simplifying how we communicate. a clear investment policy, and results that every resident can understand, and a simple guide to our city taxes so that every resident can understand their assessments. It meant changing how we're structured as a city, putting all the taxes back under the treasurer as the city charter intended in 1966. Most importantly, it meant directly empowering our residents. We have provided them with easier ways to pay their bills online while putting real information at their fingertips that helps them keep their costs down. More access is coming over the next few months, seamless online payments for nearly every city tax, and kiosks and city halls so you no longer have to wait in line to pay a bill. Real solutions that makes every resident's life better while saving our city money in the process. Transparency means nothing without accountability for results, so that is what we have done. Record investment returns putting over $16 million back into our city coffers to balance our budget without higher taxes. A diverse portfolio bought at lower prices due to better broker networks to keep our money safe and stretch our dollars further. We're turning millions in funds back to our city and audits with teeth, reclaiming tax dollars that belong to our city while ensuring that everyone plays by the same rules. Harnessing the power of cutting edge technology like AI to clean up the manual processes so we can reallocate city employees to other departments where they are most needed to keep our city safe and strong. More overdue audits and sophisticated cash flow models are around the corner. Results are about dollars and cents, but they're also about listening to residents and providing tools that help them achieve their American dream. This is why we fielded online surveys and hosted coffees with residents and local businesses. They told us about their struggles to afford living here and hiring staff to keep their businesses going. We addressed affordability by helping expand the police department's investment scams program, offering financial literacy classes, and providing free tax prep services to keep money in residents' pockets. We created innovative partnerships to help residents build skills and get jobs. We're in the process of launching a $500,000 grant program with our economic development team to ease the burden for small businesses to make their offices ADA accessible at no cost to our city. And exploring a portal for businesses to locate state and county grant opportunities so they can secure more funds and hire more employees. Being proactive and innovative in addressing resident and business needs is exactly what we need to keep Huntington Beach a thriving community for the next generation. We've made much progress over the last year, but we're just getting started in building the transparent, accountable, and community-driven Treasurer's Office that our residents deserve, and the next chapter of the journey is going to be even more exciting, so please stay tuned. Thank you.

Thank you, Jason. Great work as always. Any questions from anybody? Yeah, Don? Thanks for the report, Jason.

A quick question on the general fund reserves, you know, great returns there. Do any of those returns go into the general fund reserve?

The return, so the investment income that we generate goes back into the general fund. The funds themselves sit separate, so we have roughly $500 million cash balance. That's across all forms of funds. That's not just the general fund. Our general fund balance is the act for the end of last year. I think it was $147 million, but I might be wrong about that. We can ask Zach.

So in the general fund reserve on the slide that Zach's going to present, it says there's $99 million. It's labeled general fund reserve. Is that the reserve we're talking about? correct okay so you told me there's two ways that you can build that reserve spend less or earn more do our returns on these investments feed this general fund reserve bucket the 99 million they do they go towards our general fund expenses well do they land i mean will that will this budget go or the reserve go from 99 will there be an allocation of funds to add it to that

Will there be an allocation? It depends on how we ultimately land for the year from a budget perspective in terms of revenues versus expenses. So it's not just the investment income by itself.

Well, okay, so I need some clarity. So you were talking about what the different funds can pay for, and when we have a deficit here, you have to go into the general fund reserve to cover budget deficits. You can't go into additional pockets of money that are allocated for other areas of the city. Is that correct?

Yeah, each pocket of each of the funds funds a different There's restraints around each of the sets of funds.

They all have different constraints a lot of them are driven either by state law or by Vote of the people or other choices that have been made over time right in the general in the what's labeled Here is the general fund reserve is designed for what time expenses maybe an allocation towards budget deficits that type of thing That's what you've articulated to me. Is that correct?

I think that's a reasonable presupposition, but I think that Zach will be able to answer that question probably better as we cover his presentation later on today.

Okay, I'll hold the questions for then.

Any other questions? Thank you, Jason. Appreciate the returns. All right. Moving to consent calendar, items 16 through 24. Would anyone like to pull an item?

I'd like to pull number 22.

22? Yep.

We'll pull number 17.

Number 19. Hold on.

19, Butch?

Yes, 19.

Okay. Anybody else?

All right. All right.

So make a motion to move item 16, 18, 19, 20, I'm sorry, 16, 18, 20, 21, 23, 24.

Second.

Was 22 on there? No. I pulled 22 as well.

I pulled it.

Gracie pulled it already.

Oh, okay, got it. You pulled 17, right? Yeah, yeah. Okay. Did you get that, Madam Clerk?

We've pulled 22, 17, and 19. We're passing the rest.

Correct.

Okay. First by McKeon, second by Vandermark. Councilman Grohl.

Yes.

Councilman Kennedy.

Yes.

Mayor Pro Tem Twiney.

Yes.

Mayor McKeon.

Yes.

Councilman Burns.

Aye.

Councilwoman Vandermark. Yes. Councilman Williams.

Yes.

Consent items pass 7-0.

All right. Item 17, Councilmember Grohl.

Yeah, I just wanted to start. I don't know if this would be Travis, just to give us an overview on the relationship with the Intergovernmental Relationships Committee and some of these lobbying groups and kind of what they do, generally speaking.

Yes, we utilize these both state and federal advocacy services for or refer to lobbying and you know what I will do is I will have Shannon provide some of the background information on these two contracts.

Sure, so we partner with legislative advocacy firms to help advance the city's positions in the California legislature. or to seek federal funding. So we have a federal advocacy service that goes out and helps us approach our state senators, our congressmen, and forthcoming to you soon will be $850,000 in community project funding from our Congressman Dave Minn. And then similarly, in our state legislature, we've got lobbyists that help us advance the city's position, helps us with our legislative platform, and helps us draft any language that we might be sponsoring or supporting or even taking an opposition on legislation. And so then they help us monitor the bills, but then they also forge the relationships in the capital. So they're out there taking Huntington Beach's position and advocating on our behalf in Sacramento and in DC. So I can answer any other questions you have.

Councilman Grewal, I might just add, you mentioned the Intergovernmental Relations Committee. That's a subcommittee of council members, the mayor, the mayor pro tem, and the past mayor typically sit on that committee.

Yeah, yeah. So I was just curious as to the relationship. I mean, I know generally speaking, but more for the public, right? So they understand kind of the relationship between the two. And I know they also go, or I'll let you describe kind of...

Right. And these... Advocacy groups the they meet monthly with our City Council or excuse me the IRC Intergovernmental Relations Committee to provide input and and then also when We are looking for funding at the federal level They help us set that up help us develop good cases for projects within Huntington Beach Do they help with the grant writing? They will support grant writing. They're not typically grant writers, but they help us support grant writing. They work with the agencies within the federal government and state government to help us advocate for our grants as we're applying for them at both levels. Got it.

And then you mentioned $850,000. So really, I kind of just wanted to, that was, you anticipated my question, just deliverables for the expense, right? So you said $850,000 that was brought in specifically from this firm. And then are there any other, you know, benchmarks?

Well, we're constantly trying to find outside funding. So we'll approach it again this next year to get some more community project funding from our congressmen or our senators, hopefully offset some of these costs. And then we do, you know, if they have just at a moment's notice, we can ask them to act or advocate on our behalf. So they're always kind of on call for us as well.

Okay, thank you.

Thanks, Shannon. So when I talked to you today, when I first saw this item, I said to myself, if we're paying a lot of money for people to read bills, the 2,000 bills a year that come out of Sacramento, that may have been something needed many years ago with AI. My first thought was we could be plugging all those things into an AI system. But in talking to you, you did shine a little bit of light. Number one, when I asked you what the rate was, you said it's $90,000. It's not an hourly rate. It's basically a fee schedule. We can use them for as little or as many hours as we so choose, correct?

Sure. It's a flat rate each month. And when they invoice us, they give us a list of deliverables that they've provided for that month. They attend the Intergovernmental Relations Committee meetings. They'll attend committee hearings, committee meetings. They'll meet with legislators on our behalf at any point during the month. So they do provide services aside from just looking at those 2,000, 3,000 bills that are on the roster.

Right, so that kind of taking that one aspect out of it really wouldn't give us any savings. It may be a little bit more efficient, although I know they're using AI as well. The other thing that you pointed out was that, I was pretty happy to hear that you actually negotiated actually a lower price with one of the agencies, the federal one or the state one?

Last year we brought forth the council amendment for an additional year of services and our federal Lobbyist did bring down his price during that time and and in this proposal today that you have in front of you that price is Still lower than the original price that we saw in that original two-year term. So He does he did respect that That cost savings again

appreciate that I mean similar to councilman gruel I was going to pull the item as well because after speaking with you today and getting clarity I thought it was important that the residents know we're not just shelling out you know five hundred thousand six hundred thousand whatever the sum total is for people to sit there and crunch through some bills there's a lot more they go with that and I like the fact that it's not an hourly rate I like the fact that it's a price point hopefully we're getting full utility out of them so good job on the contract negotiations.

I got some questions. So when we look at the statement issue, it looks like there's two recommended actions. And so two separate contracts, $270,000 and $234,000. So it's a little north of $500,000 for the three-year term. I'm wondering, with the return on investment, when it comes to, say, that money that was coming from our congressman, the $850,000. Do you think that that is money we could not have gotten otherwise if we were not contracting with them?

I do believe it positions the city, it puts us in a better position to get funding from our congressmen. It helps to have their experience and guide us through that process, absolutely.

But do you think that any staff or internally, we could have applied for that grant without dishing out over $500,000 to contract with this group?

Can I give a little background on that one in particular? We went out to D.C. and we actually met with him. There was a group of us, and we talked to him directly in his office about that. And it was set up by TJ, the contract. So that's how that... Helped us get it.

He connected us and we all spoke to him and that's it worked through the channels that way So the funding for this is just coming out of the general fund Yes, and that grant money does that go back into the general fund or does that go into restricted funds?

so that grant goes to support the navigation center and work on the navigation center and So it's a grant that's specifically used for that?

So we are spending general fund money to contract this out, right? And then the return isn't coming back to our general fund, so it's actually kind of putting a dent, if you will, in our ongoing expenses, and we're not seeing a return come back into our revenue. Is that a fair framing?

I would say it doesn't come back to the general fund, but it funds other things. We pay for the navigation center with general fund funds unless we can otherwise find a grant or something to provide that.

And how long have we been working with these lobbyists? How far back do we go with them?

the city' s had lobbyists for many years more than 10 years on my research we' ve had these lobbyists for three years each we had a two-year agreement and then we had an additional one-year amendment for each of them.

prior to them was there somebody that was actually in their slot what was the previous group before?

yes it was townsend public affairs.

do you think we could get by without them because I' m looking at north of $500,000 in savings out of our general fund

I think that's a policy decision for the council to make.

I'm of the mindset I think we can get by without them, and we're looking for ways to save money. There's a half a million dollars right there, so I won't be supporting this item.

I'll say something. So I've actually worked both with ConSource and Conway as well as, sorry, I can't see without my glasses. Getting old sucks. As well as with Stapleton. Pat Burns over here, myself, and Tony Strickland, we have flown out to D.C. They not only advocated for us, but they also guided us on how to best advocate for ourselves. I do believe that their services have helped us significantly. We've been out to Sacramento as well with consorts in Conway. They meet us there all the time. They sit at meetings for us. They keep us informed as to what bills are going to affect us here in Huntington Beach, and they go and advocate for us. I do see a Significant value in them as well. And we've also tried more affordable options like the League of Cities who was much more affordable They also advocate but they also supported bills that went against the interest of Huntington Beach Which is where we left them and decided to just focus solely on the actual lobbyists The former lobbyist group is a much larger group who was not as focused in Huntington Beach as consorts in Conway and Stapleton so we felt as Senator Strickland myself and Pat Burns felt that this was the best option for the city so in my opinion they've been extremely helpful and I will be supporting them.

Is there any way to why does it have to be three years I guess is a question are they always three years can we limit it to one can we do one year and see what they return on that investment three years you know it's a lot of money it is a big pill to swallow but if they're bringing in the $850,000 Right? Which I know then with the general fund kind of, you know, the movement of money from the general fund to the reserve funds, can we do a one year and then assess the return?

I think we probably could do that. And then maybe we could build in options for amendments after that so we could automatically renew if we wanted to do that. So we don't have to come back necessarily or we could do a report back. I think I would.

defer to Travis to see what his... Yeah, we could talk to the two firms and see if the council chooses to see if they're willing to do a one-year. And with or without extensions, what the council would prefer.

I mean, I would be in favor of something like that if, you know, I'd make a motion to adjust it to one year and put some deliverables in there. Because if it's one year and there's no return and there's no... We don't end up... getting any grants and et cetera, then we're not sitting on another two-year tail.

So maybe a motion to table it, go back, confer with them, see if it's agreeable, and possibly bring it back to council?

Well, one thing I'd like to point out, Andrew, this grant that they helped us get from Congressman Min, it took longer than a year, so you can have a whole year where nothing's going to happen, and then the second or third year, it finally comes to fruition.

No, I understand that. So, I mean, I think that if we look at it on a one-year basis, but there is some traction and we've got good things happening, then we can review it to extend it. If they just assume they've got three years built into it and they can kind of bag one big apple in three years, then it's going to be less of an incentive, right? This kind of incentivizes them to really bring in more when it comes to getting money federally and from the state perspective. I mean, it doesn't hurt if they're doing a good job and we just renew the contract after one year. I don't think that...

You know, it's really the same process at least we get a review after one year I've been part of this for the last three years and I definitely see kind of it is a slow-turning wheel especially at the federal level and federal levels really slow, of course the state levels a little goofy given it being Sacramento and but I definitely see the benefits of just the three-year contract.

Pat, if I could just ask, maybe, you know, I understand there's some benefits. You might call them pragmatic benefits, but can you really see how it's benefiting our general fund? So we're going to be dishing out north of $500,000 towards them. Are we going to get a return on investment back into the general fund? And I just kind of say that in light of the sort of the milieu of, you know, we're looking at, you know, the structural deficit and where we can start cutting and saving. And I think this might be one of those areas where, you know, we're not really seeing that return on investment coming back to the general fund.

Travis, can you please elaborate? If we have to spend money out of the general fund for the navigation center, which is later supplanted with the grant money, it is eventually not taken out of our general fund, which does benefit our general fund in the long run. That money does supplant the general fund money and benefits us in that manner, right?

Right. This grant is for infrastructure for the navigation center, which would otherwise be spent with general fund.

So correct me if I'm wrong, but our city charter has us dedicate 15% of our general fund already to infrastructure. And a lot of times we're just looking for places to put that money just so that we hit that 15%. And so why don't we just include this in that 15%.

So I guess I wouldn't characterize it as that I think we have much more infrastructure needs than the 15% provides and so So I don't think we're, I guess I wouldn't say, you know, we have a long list of projects. This would be one of them. So we do end up spending infrastructure. This would be a general fund, which infrastructure comes out of the general fund. Infrastructure fund is funded by general funds.

If I may ask a question, is that the only thing that's come out of the last three-year term was the Dave Min money?

As far as funding from the federal government, yes, that's wealth. I take that back. As far as our federal lobbyists was able to obtain for us.

And what about the state?

So the state, we pursue a lot of state grants. However, our lobbyists has done more of the legislative side of it. A couple years ago, we went to Sacramento for the joint legislative audit hearing. That was a previous city attorney Michael gates and a couple others of us We went out and consorts and Conway advocated and helped us prepare for that Jay lack hearing they also helped prepare language for SB 979 which the city helped sponsor that was senator Tony Strickland's bill regarding the arena hearing in the judiciary review so they do they don't necessarily bring in money, but they do do a lot of advocacy on on our behalf that we are not able to do.

So quantifiable value. You know, I see both sides of it. I wouldn't be opposed to a one-year contract with a fairly easy renewal if they could, both entities could say, we have something we're working on that we could actually see real results in the wheelhouse. It would be a very easy, you know, extension granted, year two, whatever the case may be. But, you know, I'm not opposed to putting some pressure on any of these agencies to, you know, make sure that... They don't sit back and bring us one deliverable over a three-year period. And I get it on the state side. You know, those aren't necessarily monetary, but there's real value there. But having a one-year deal with the ability to renew with council approval is going to put a little bit of pressure on them to say, here's what we're doing right now. We're not done, but we need time. And we perceive it to be this much money or this big of an initiative. So I can see both sides of that equation. So we may want to contemplate that one-year deal.

I sit on the IRC with Councilman Burns and Mayor McCann. It's an education to listen to these lobbyists, things I've never even considered. I get a lot of valuable information from them, especially on legislation that directly affects the city of Huntington Beach. I think it's good to know. I know some others up here have mentioned we could probably find out a lot of that through AI or whatever. During my agenda review last week. This caught my eye, $504,000, and we're all looking for ways to cut expenses. And so after my meeting, I walked into Shannon Levin's office, and I said, how important are these things to you? Now, I've sat through those meetings, and again, they're very educational meetings. things, like I say, legislation that's going to affect Huntington Beach, and we learn it there. So what I would suggest, and I could go along with Councilman Gruhl's one-year plan, but I would also encourage both Councilman Williams and Councilman Gruhl to come to an IRC meeting, and actually, I think they can do that. They can't? It has to be us? Correct.

It's a Brown Act meeting.

Well, I won't go. I'll give up my seat. But I think you guys would recognize that there is a lot of value there. But I do understand both your positions on this. And I would support a one-year... so that they can see that and we can measure what our lobbyists are doing. Because it is a lot of money. $504,000 today is big. So I just want to say that. But I think it would be really good if you guys sat in an IRC meeting and I'll give up my seat so you guys can go and it won't be a Brown Act. Thank you.

Well, and to your point, Butch, those of us who have worked with these lobbyists, who have learned so much about all of these bills that are affecting our city, before they even hit the floor, see the value in what they do, not just in bringing in money, but in constantly monitoring what's going through Sacramento. There's so much that goes, so many bills that go through that floor that we don't know about, and they sit there and they advocate in our interest, and they scan through those bills, and they tell us, hey, this is coming. Let's say we hire them for a year. Maybe a bill will come through that will affect us. Maybe it won't. We don't know. So then we don't renew them. Next year something else comes up. By then we don't have them because somebody doesn't see the value. And then we miss a bill. I do believe that their experience and their expertise and their connections in Sacramento have helped us advocate better for our city and it's just a continuous cesspool over there so I know I just don't want to take eyes away from what's going on in case something doesn't happen the first year then we drop them the next anyway that's just my opinion most of us who have worked with them see the value I do agree that you guys might change your mind if you worked with them and you saw them we've traveled like I said to Washington DC and Sacramento with them and they were extremely helpful. I would not want to give up on a resource that helps us advocate for our residents here in Huntington Beach. We don't know what that expense will be, but those are just my two cents.

sorry, no, okay, I was gonna say those are valid points and 850 that they've yielded even if it took all three years and we paid them five hundred and four thousand or whatever the aggregate was Would be money well spent because we would have spent it out of the general fund Anyway, all I'm saying is in kind of caveating on these two council members here. I You know at the end of one year if there was progress or if they could say there's really been nothing Viable that's come down the pipe I don't think that we would reasonably withhold any additional Year for them, but I would think by the end of a year They say he were working on this and I think it would come back and but on the other hand maybe another council if there's a new seated members might not see the value. So there is that dynamic. What would you think of, you know, you've seen the value of a two year deal, you know, instead of three kind of a compromise. So it gives them, you know, two full years to really have something mature. And that takes it out of the hands of maybe if there's a change in the guard here that at the end of one year, somebody says, I don't like that project. And then we do lose it.

Or even, you know, to both of your points, we talked about the speed with which the federal government work, which we know, and that's not, you know, an insult, but the federal government is going to work slower. So maybe two years on the federal program, one year on the state. And I'm not, by the way, the value clearly goes beyond even just the dollar amount. I recognize that. But what I was thinking is that If we're coming up on one year and they know that there's a contract and we haven't gotten a specific monetary deliverable, but they do have things in the pipeline, we can say, okay, well, how much time do you think you're going to spend it on the second year? And perhaps we can amend the agreement at that point based on what they've delivered to say, well, maybe we move into an hourly program as opposed to a retainer, right? So then you can kind of work based on what they've delivered in one year. into modifying an agreement for the second year, if anything, even on the state level of Sacramento. We're going to have some representation up there, so.

Well, see, that's where my concern is in not doing this. Like, if it was another firm that would be watching, okay, we got a great deal, that'd be fine. Sacramento has a bullseye in Huntington Beach. I do not feel comfortable not having somebody out there in Sacramento watching out for us all the time. We all know... We are being targeted. We all know the governor hates us. We all know that we are the target. I just don't feel comfortable not leaving Huntington Beach protected. Maybe if things were to mellow down and we had somebody who wasn't... Targeting us. I'd feel more comfortable I just don't I feel it's just safer to have eyes and ears out there for us who are constantly letting us know what's happening and Then it prepares us to be ready and attack and or I don't know what I just do not feel comfortable Not having eyes out there for us. We don't have time to go out there There are times that when we went to DC we went and we advocated for several projects how many was it like five or six different projects lighting the erosion on the beach and We came back home and the lobbyist was out there continuing the process. We can't keep going over there. So in my opinion, there are eyes and our ears out there. And I think with the way Sacramento is looking at us, we need to keep an eye on them too.

You brought up a good project, the eroding sand. Was those interactions with the lobbyists the driving force when we started to refeed the sand?

It was actually the bluffs. The bluffs, the eroding bluffs. They were going to give us, there was $10 million that it looked pretty solid that we were going to get. And then all of a sudden, man, budget cuts, and that was axed right off it. We thought we were going to get that. Am I wrong, Shannon? That was like we were looking forward to that, a federal deal. and that fell through with a budget cut.

It was for the blessed by the bypath of the beaches, just eating that up.

I mean, you made some good points about Huntington Beach being the target of Sacramento.

I mean, if I make it up there, I'll be the eyes and ears, but we need all the help we can get. I would be a terrible lobbyist.

What if we had a two-year contract with a unilateral right to exit the contract if there was not satisfactory milestones met? If we were reviewing the contract at the end of two years, we could terminate the three-year contract unilaterally because we're not happy with zero results at the end of two years. I highly doubt that would be the case, but what if we did something like that?

I don't know how you can measure some of the state-level benefits. It's very educational in participation. It puts us in the playing field with legislators, in a sense. But federal level, there is, I think, but it's hard to read the tea leaves with all the different budget cuts and changing tides.

Yeah, they're earning their value proposition, even with you, Pat, because you're... advocating for them. So they've shown you what they're doing at a state level and you can quantify it and you can stand behind it. So I think it could be done. I do want to support the initiative. I do believe we need this type of stuff. If there's a combination where we could have a two-year contract with a unilateral right to exit if we weren't happy. I would vote for that. A one-year deal, that's a little iffy. We have a change in the guard. These people have a project in the works. New members come on. They go, we don't like it. Cut the contract. And then something that could have manifest, but purely for whatever reason, ideologies, they say no. And then that terminates a contract. I think that is a little short-sighted.

so i wouldn't even though i brought it up i wouldn't vote for that would you have to you'd have to go back and you can negotiate the does it does it's not like it may be uh divided by three times two if we go with the two deal you know just two-thirds of the contract price it might be totally different well they have a proposal per year and then the totals so we could go back and ask them if they're amenable to a two-year contract and then

We could do a two-year plus a one optional amendment. Yeah, that's what I was thinking. A one-year amendment, an optional amendment. So that would be your two plus one.

Well, I think it might be better to get a three-year contract for the best possible pricing with a unilateral right to quit at the end of two. So we get the best of everything, best pricing and the control.

Do you know of any other navigation centers that didn't receive that grant money because they didn't have lobbyists?

Well, other navigation centers, the council members who were there when they opened, those council members advocated to have funding for those navigation centers. The council who was here before us, while that navigation center was being negotiated, did not advocate for that. So we're one of the only cities who does not get funding for the navigation centers. So a lot do, but they get it from the county. We don't. So we'll take the money wherever we can. We'll take the help wherever we can get it.

I mean, my hope would be to save half a million dollars here. I don't know why we need lobbyists. We have a state senator, Tony Strickland. I don't know why we need lobbyists. We have, you know, future assemblywoman, you know, Lord willing, to be that representation, to be the eyes and ears when we're up there. And again, you know, just...

But the senator also relies on the lobbyists to keep us informed. So, you know, the senator doesn't do everything by himself. He has contacts, relationships, and connections with some of these people who advocate. So... It's help, and I do think, you know, we're at DEFCON 5 here. Maybe we have a new governor. Yeah, we have a new governor who doesn't hate us, a new AG who doesn't hate us. I'd feel okay with it, but I just do not feel comfortable with not having someone to keep an eye out for us out there. I'm sure Senator Strickland does his best, but if you saw what his day looks like over there, the guy barely has time to eat, so...

But he has a staff, he has a team, right? He's got, you know, contacts. I just, I don't personally like this idea of like pay to play.

Yes, which also covers a much larger district, a much larger district. This would be eyes and ears for Huntington Beach. I'm focused on Huntington Beach. Even when, you know, after this election, whether I'm out there or not, I would be representing other cities. These people would be focused on Huntington Beach. So that's just my concern. You know, I like your idea that let's try to get the best deal possible for the three years. And if you want to put something on there, some stipulation that if after two years nothing happens and, you know, we can quit.

Re-evaluate. Yep. Make the motion, Tom.

Go for it. No, you do it. You're the man.

No, I'm not the man. I'd like to make a motion for a three-year pricing contract with a two-year out unilateral right to exit the contract with no penalty or consequence so that at the end of year two or as it approaches, we can evaluate the merits of the contract and the accomplishments and make a decision to exercise the third year or exercise the right to exit the contract.

Second.

Okay, Jen, are you going to have to get that approved and then bring it back?

Yeah, we'll have to get it approved by the potential vendors, and we'll have conversations with the city attorney's office on the way that that contract is structured. We can bring it back to council. If everybody works on it and the vendor says yes, they're okay with it, we can bring it back in two weeks. Otherwise, we can bring it back in the next meeting. Okay.

Madam Clerk. Second.

Oh, she did?

I beat you to it.

Oh. You were asleep.

Madam Clerk, please call the roll.

Councilman Grohl?

Yes.

Councilman Kennedy?

Yes.

Mayor Rotem Twiney?

Yes.

Mayor McKeon? Yes. Councilman Burns?

Aye.

Councilwoman Vandermark? Yes. Councilman Williams?

No.

Item passes 7-6-1.

All right. Item 19, Butch.

Okay, item 19, the only reason I wanted to pull that is because as I read the issue statement, RRM has a million dollar contract right now and they're asking for a $500,000 amendment to that contract. And being that my professional life, I played in the architectural engineering, construction sandbox. I have some questions because this is just a park, but I look at a million five in architecture fees for a park, for just a park. And so I question that because I happen to know architects that design schools for a million five and we're not building a school there. However, I need to understand the contract a little bit more to understand whether the architects are going to assume responsibility, which they often do for such things as project management, geotechnical engineering, irrigation, watershed, structural engineering, just to name a few. So I would like to be able to talk to the RRM and ask me if are all those services included in their $1.5 million? Because then it would make a little bit more sense. But just to do a design of a park, I think $1.5 is probably a little bit out of line. I had written in my notes that I'd be willing to cut that to $1,250,000 until we find out if they're including all these extra engineering services and project management in their contract.

Can we ask Ashley if she knows? Is she here? Yes.

Hey, Ashley, do you know that?

Yes, I do. So the services that will be provided in that contract include the project initiation and feasibility phase, which is also an updated arborist report. The last one was conducted in 2022. And then there's design and development services, which also include additional community input at each 30, 60, and 90% design phases. so that we're going back to the community and making sure that their voices are being heard through the design phase. And so there's construction document services, construction support services, project coordination services. To your point, there will be engineering studies on hydrology and hydraulic reports. So there's a lot encompassing the dollar amount that's being requested, and there already are funds available Through diff Quimby and AES funds. We have right now a balance of 4.3 million dollars Allocated towards Edison Park. So this would cover the full design and construction document phase I Should have talked to you before tonight.

Yes. I just had one clarification. So this is one of those on-call contracts and The the cost is submitted and actually I'll make sure we're getting this correct from Ashley is The cost for this work is $1,366,772. It' s 1.37 roughly for the work. If they don' t perform, if we don' t use them on something else they won' t spend the total 1.5 million. Just a clarification.

From what I learned in the council briefing, there's been a million dollars allocated and the other $500,000 they're talking about, is that coming from the Quimby fund and not the general fund?

Correct. Those are all coming from Quimby AES and DIF funds, which are all dedicated capital project funds for parks.

For the sake of the public, can you just give a brief description of how money lands in the Quimby fund and what it is?

Sure, so Quimby funds are development funds that are allocated within a certain radius of a project. So when there's development, Quimby funds are essentially used within a two-mile radius of that particular development. So as development occurs near Edison Park, we're looking at are there opportunities through development impact fees to allocate funds towards Edison.

So it doesn't come out of the general fund. It's a separate fund that's actually paid for or built upon or accrued by development fees? That is correct, yes.

Just to sum it up, this takes it all the way through ready to break ground and build?

Correct. This would be the full design and construction document so that we can break ground.

Engineering, the whole... Correct. Everything in. Yes.

Including... as the community asks additional community involvement.

points that was gonna be my next question is is that there's obviously you know the good news is the community is so involved in this the bad news is is that that leaves a lot of steps along the way where perhaps they could be left behind so this would be they would have we had actually memorialized that list in the very beginning recall when we when we approved the Edison Park plan and the the the RRM will obviously not just take that into consideration but they will execute based on that list correct

We will share that list with them, yes. And then before the 30% design is complete, there will be a stakeholder meeting after the 60% phase is complete, and then additionally at one other time where there's like a study session to make sure that we've met all of the needs of the community and what council has approved.

Okay, and then at what point throughout that process will it come before council, either in a public study session or...

So the actual project itself, once we're ready to break ground, we would come back to City Council for a request for an additional allocation of funds. The full project is estimated in today's dollars at $14 million, so we are continuing to look for additional funding sources outside of the Quimby and the DIF funds through grants or whatever else we may be able to find. So when we are ready to break ground, either in a phased approach, which City Council did approve as well, or for the full project, which is $14 million, then we would come back and request an allocation.

And then is part of this plan, are we having an arborist re-look at the trees, the health of the trees, and the potential liability or non-liability of the trees, specifically the eucalyptus?

Correct. There is monies allocated about $52,000 in the initial feasibility phase to re-up the arborist funds. report from 2022. Okay.

And the report from 2022, is it the same arborist or a different arborist?

We haven't gone through that yet. So this is just to allocate the funds towards RRM. And then if they have a subcontractor that they use, then they would be able to do that.

Okay. All right. Thank you.

Good. Move it then.

I'd make a motion to move that item. Second. Madam Clerk, please call the roll.

Rule?

Yes.

Councilman Kennedy?

Yes.

Mayor Pro Tem Twiney?

Yes.

Mayor McKeon?

Yes.

Councilman Burns?

Aye.

Councilwoman Vandermark? Yes. Councilman Williams?

Yes.

Item passed is 7-0.

All right. Item 22, Councilwoman Vandermark.

So I'm pulling this item just to clarify exactly what it is that This auditor does what the scope of their responsibilities are. There was a post on social media that kind of made it. The wording created some confusion, making it seem like we were auditing the city in order to increase the sales tax. We went ahead, asked questions. We were told that was not the case. So could you please explain exactly what it is this item does?

Yes, Zach.

Either Shannon or Zach.

I could do that. So the usage of HDL in the past for sales tax is really related to sales tax monitoring and forecasting and audit services. And so we have quarterly meetings with the HDL team to take a look at and help us forecast going forward, taking a look at industry trends, different sectors, and how City of Huntington Beach businesses compare to HDL. other cities within the state and countywide. And so that's part of the core services that we're looking for on the finance team. And the auditing services is really on a contingent basis that if they look... essentially is happening is that they're looking for under reporting of sales tax to the city and so when that happens they go after those sales tax and help generate revenue for the city that the city would not have been able to receive before and so they charge a percentage that which is why I have a high dollar limit because they have been finding Approximately last year they found about over $200,000 and so they would take about sixteen and a half percent of that But they would only charge us if they actually found Additional revenues that should be coming to the city.

So this is auditing the businesses whether the city is Being that the tax that we're whether we're they're reporting the taxes that they say Correct fake actually collected. Correct Now, do you see this organization as a benefit for us financially? Is it helping us? Has it helped us?

I do. I mean, I think the contract and the audit services pays for itself, especially when they find additional sales tax revenues that otherwise the city wouldn't collect. And so it actually covers both the services for their normal baseline services and the audit services.

And to clarify, this has absolutely nothing to do with a tax increase on our ballot on any election whatsoever? No. That was just poor wording?

Correct. Yes, I apologize for that.

Okay. And can we change that, fix it, remove it, that one line I sent you earlier?

Yes. If the council would like to vote, I think we could strike that one line within the contract.

You want to make a motion to strike that language?

Yep. I'd like to go ahead and if anybody... I don't know if anyone has questions, but if not, I'll make them all. I appreciate it.

One real quick question. Zach, do you ever find, are there penalties imposed upon these companies or groups, whomever, that you find have shorted us in sales tax. Maybe we can recover some of the costs that we pay this group to find these funds. Is there a way to penalize them?

So that part I'm not particularly sure of, but what happens is that they look for not just under reporting, they also look for misreporting, and maybe the allocation went to, instead of going to our county, maybe it went to a different county, or maybe it went to, it's just a lot of different factors that ends up maybe the revenues went to the wrong place. And so it's not all that one businesses or businesses misreported, it's just maybe the CDTFA misallocated the fundings and they went to somewhere else. So they look at the trends and analyze that too. So as far as how do we penalize, I'm not sure that would be a great question for some further research on.

I could probably talk about that because everything does go through the California Department of Sales and Tax Use, right? So one question I have is that is this all – because we're doing the work for the state. Ultimately, if we find somebody that underreported, then that 7.75%, the lion's share of it is going to go back through the state and then distill back down to us for our share that we get as a city, correct?

Right.

So I think it's important to mention as people understand the function of this, and I'm not trying to poke holes in the agreement or even the function of what they do, but that we are going out and finding the underreported tax money and we are giving... it all back to the state, and then the state is giving us our portion of that back. So we're doing the work for Sacramento. The cities are doing the work for Sacramento, which is surprising to me because it almost seems like it's a duplicative effort, but from the sounds of things, it pays itself back. So I'm not going to get into that granular detail. However, I just want to ensure that with this agreement, basically the only monetary compensation is a percentage. They kind of eat what they kill. It's what they bring in, they get that percentage. Is there more on top of that?

So the base contract is $14,000 a year for forecasting and consulting services. So that's the normal baseline. They help us look at financial trends and to help identify what is currently going on within the city for our businesses.

Got it, got it. And so the point I was making, Pat, is that it would be the California Department of Sales and Tax Use, formerly Department of Tax and Fee Administration, that then would have to put the penalty. We don't have that jurisdiction over that. But it's just really interesting how all of this kind of works and then trickles down into the city. But if they get a cut of what they bring in, then those are the types of contracts I like. Great.

Anybody else? If not, I'll just make a motion to move the item if we strike that language.

Yes, and if I may, that's section 3.1.2 of the contract.

Yes. Did you second? Oh, Pat Burns second.

Okay, Councilman Grohl?

Yes.

Councilman Kennedy?

Yes.

Mayor Pro Tem Twiney?

Yes.

Mayor McKeon?

Yes.

Councilman Burns?

Aye.

Councilwoman Vandermark? Yes. Councilman Williams.

Yes.

Item passes with amendment 7-0.

All right, moving on to item 25, approval of design and language for the America 250 plaque at the Pier Plaza. Staff, please introduce the report.

Good evening, Mayor and members of the City Council. This evening, we are bringing back the recommendation for the proposed America 250 plaque at Pierre Plaza. As you're aware, at the July 21, 2026 meeting, city council approved council member item 26638, setting aside resolution 2017-25, and directed staff to create an engraving plaque memorializing Huntington Beach America's semi-quincentennial celebration on one of the black granite panels in the Pier Plaza Monument. We were also directed to collect input from the Historic Resources Board and the Community and Library Services Commission. And so this is the first iteration that was designed working with the authors of the council member item. Following that was the edits from the historic resources board who held a special meeting on August 10th. The community library services saw the item on August 12th and also provided their edits. And then at the last meeting for city council you all provided edits as well. And so what we also received was supplemental communication from city council for an additional iteration to consider. And so what the two different, right now, one, we're collecting additional input from city council, but also the primary difference between the August 18th iteration and what was provided as supplemental communication is really what the company is capable of being able to do. because there's two different methods to be able to produce this plaque. One is sandblasting the plaque, and that would have to be done on site, and that would be the rendering that you see on the right. If the company is able to take the granite out of the monument sign, and take it off site, then they're able to laser, which gives us a better fine detail, which is the iteration that you see on the left. So this evening, staff is looking for input on both items, and then the company should know by next council meeting which pathway we can take as far as the design elements and inscriptions go. And there is a financial impact for the plaque. The design of the plaque and production is $12,000, and then up to $3,000 would be needed to produce the plaque If on-site, it will be $3,000. If they can take the plaque off-site and laser it, it would be a lesser amount. And so the not-to-exceed allocation would be $15,000. And so at this time, staff are seeking your input and approval of moving forward with one of the plaque iterations. And so at this time, I'm happy to take any questions or feedback you have.

Ashley, thank you so much. So obviously, last meeting brought up the one on the left. I think everyone agreed that one looks the best. And talking with you earlier today, we won't know if we can do that laser engraving until probably next week, if they can physically remove the stone to do that. So I just think looking at the... the cannons themselves, if we can do that, I think we go with the version on the left. If we can't do that, I think the cannons on the right either, in my opinion, don't have the cannon blasting, and or Don, I think you mentioned something kind of cool, having like a Revolutionary War soldier on maybe the left side, if they can do that, and leave the cannon on the right without the blast. So that's if they can't do the laser engraving. So that's one piece for me. On the one on the right, the wording is not, like, symmetrical as it is on the left. I know there's a few veterans on there on the bottom. For me personally, I like to have an all-encapsulating text because I just... There's so many veterans that we honor and we appreciate. And to pick only a couple, me personally, I just... It doesn't really sit right with me, so potential we could just enhance the wording in the middle to be more encapsulated to honor every single veteran and their sacrifice for the city. The one on the left seems like it provides more spacing for that with the HP logo smaller. So those are just my kind of thoughts and what I would see as it comes back. It sounds like for one more crack at the next meeting, but I'll defer to some colleagues to see their thoughts as well.

Would you guys like to offer up maybe your space, your name, to a veteran that's meaningful to you?

I just think there's so many veterans in the city. We have all the memorials right here at City Hall. Down at the pier, there's the American Legion. Ashley, has their plaque coming up to honor their veterans as well?

Correct. That plaque will be dedicated on Veterans Day.

Yep. So, go ahead, Don.

Well, I was going to say, Because I you know I brought up that point when Councilman Williams said Carr and Baca That if you were just there's so many War heroes veterans that have served here in Huntington Beach were very patriotic city There's no way we can list them all. If we can't list every name, then there's going to be a family member somewhere who's going to say, well, what about my dad, my brother, my uncle, my sister? So I think we're setting ourself up to disappoint somebody or multiple people. And I actually saw some comments on the forum that said, you know, you picked two. Well, what about everybody else? So I know you guys were willing to give up your names. And if you still wanted to do that, You know, some language like America's veterans, past, present, and future, forever America's heroes, basically covers every aspect of a veteran, past, present, and future. It lets them all know that they'll forever be America's heroes, so it's centric to the United States of America, not just Huntington Beach. And it starts by saying America's veterans, so I think it encompasses everybody. Nobody's left out. It's patriotic. It's America-centric, and it makes sure that everybody, past, present, and future, knows that they're admired, cherished, and loved and will forever be so.

That's my thoughts. So I guess my thought process is that one of these veterans, American heroes, their name will always go before my name on a plaque. And my thinking is that I don't really want to be putting my name on a plaque. If my name should ever go on a plaque, I'll allow some future council to make that decision but I'm not really a fan of putting my name before a veteran's name so granted we only could pick one I think that is the superior choice though to put a name before ourselves that's my take I like that idea Casey of just having an inclusive message for all veterans we'll just add that line at the bottom okay actually can you either add at the bottom or in the middle somehow if you can get the spacing right

We would likely add it to the middle of the plaque. Right now we have a limitation on the height of the text and we're just at the cusp of that. So adding additional text I don't know would be possible unless we shrink other imagery in the plaque. So I would leave that to council and we can definitely work through that.

So do you have enough guidance at this point to go back, okay, and then once, if it's possible for them to do the laser engraving, they don't know? Correct. Okay, thank you.

So are you guys talking about removing those names now, Chris Carr and Mike Ali, so that you can just get kind of a general sweeping statement, thank you, veterans?

Yeah, a statement honoring all veterans, not just two. And that's okay, you don't have to agree. I mean...

Like I said, I'd rather my name not go on there. I'd rather have a veteran's name go on in my place. We're talking about wiping out the Medal of Honor recipient Chris Carr's name off of that plaque just to throw a broad sweeping statement that thank you veterans. Could we at least honor the wishes of the count? Like I'd rather somebody else's name go on that plaque.

Well, if there's not room for all, we're celebrating America, 250 years of America. And to get to the freedoms that we enjoy, It's been a cumulative effort of veterans past, present, and future. So to delineate one name, although he's an incredible war hero, we have codified a park in his name and also Mr. Baca, but there's many war heroes here that have served that maybe aren't Medal of Honor recipients. That doesn't mean that their service has been diminished or should ever be looked upon as you or less than. So if we can't put every name of every veteran that have ever served from the city of Huntington Beach on a plaque that we've done families that have sacrificed their family members and don't get any recognition. So the only prudent thing to do is celebrate Americana and all American veterans because we're not celebrating just the Huntington Beach veterans. We're celebrating, as it says, 250th anniversary of Americana, of America. So I think it's prudent to be cognizant of not alienating veterans any veteran who served who doesn't land on our plaque and disappointing family members.

I'm asking you guys not to remove Chris Carr's name. I don't want my name on there. I'd rather his name be on there.

What if we just remove, like we're getting into arguments over the names, what if we just remove all the council names and then it just gives more space for the plaque? I kind of feel weird voting on a plaque for my own name. I'd second a motion like that.

Do you You understand what an honor and privilege it has been to be on City Council on the 250th birthday of our nation. We're not being egocentric or egotistical or selfish by wanting to commemorate the fact that we were honored to sit on this dais on the 250th anniversary of our country. If you don't want your name on there, you don't want your name on there, that's okay. But I have no problem with having my kids and my grandkids come by one day and see it and say, hey, you know what? My grandma, my great grandma was part of this on the 250th birthday of my nation. And I'm not going to be ashamed to say that. I'm okay with that.

No, and that's fine. But I think that then we should, by that similar logic, then we should have the ability to put a venerate in place of our name. Because it doesn't busy it up. And I mean, if we're talking about choosing people, I mean, by that same argument, I could say, well, you know, by not putting, you know, there's a lot of people in this city that are also just as honorable in the work that they've put in on the 250th anniversary. So we should also put city employees' names up there. We could always get into this name debate. So I think the simple solution that we presented last week was to use the veteran names. And I think that the alternative solution is that we don't pick and choose.

Well, that's exactly what they're trying to do. They're trying to not pick and choose. That's why they want a statement that honors all veterans. Huntington Beach is one of the most patriotic cities in California. And we honor our veterans more than any other city. And we have the largest number of veterans in Orange County. We honor and love our veterans. I'm not understanding why you're making such a big deal about it. There are plaques all over our city with people's names on them. I can't imagine any other council was having, wasting so much time talking about this. If you don't want your name on it, that's okay. But trying to make us look like we're just horrible people for being proud to represent Huntington Beach on this special anniversary, it's kind of weird, I don't know.

But you guys are saying it's not okay. I'm saying I don't want my name on it. I want Chris Carr's name on it. You just said if you want, that's okay, but I'm being told it's not okay.

Well, to Gracie's point, when we're commemorating American veterans, the last thing we need is is someone saying, I see Chris Carr, but what about Baca? Well, Baca's on there now, too, but what about Mike Ali? Well, Mike Ali's on there. The list can go on and on and on, so I'm 100% with Gracie. I know the left, they've been very vocal. There's plenty of plaques with Shirley Detlof's name on it.

Well, that's what I was going to say. If you don't mind, this commemorates a moment in history. If you just go down to Pierre Plaza, where this is going to be, Right in the middle, City of Huntington Beach Pier Plaza dedicated to the citizens of Surf City, Huntington Beach, you know, city council, project leaders, it's the biggest stone on there. Right next to it, 100th anniversary of the 1914 Huntington Beach City Pier. Commemoration ceremony, June 22nd, 2014. This marks the 100th anniversary of the 1914 Huntington Beach City Pier. Huntington Beach City Council, Matthew Harper, Mayor, Joe Shaw, Mayor Potem, Connie Borman, Joe Carcio, Jill Hardy, Jim Katapotis, Dave Sullivan, City Manager Fred A. Wilson. So this commemorates a moment in history. And so I second what Council Member Vandermark and Councilman Kennedy said. I mean, so...

I would just suggest let somebody else put your name on a plaque one day. You don't need to vote to put your own name on a plaque. Where was that mindset when you voted on the MAGA plaque for the library? Your name was on it. Well, for the record, that's probably one of my greatest regrets from those days. And where is that MAGA plaque anyway?

Well, it's nowhere, but you know what? The bottom line is if we were to do a 50th anniversary for the library right now, I'd be proud to have my name on it if it was language that people didn't freak on. I would love to be part of it. Councilwoman Vandermark said so, you know part of the brain damage It'd be nice that my grandkids someday could go look grandpa was part of the 50th anniversary of the library By the way, I've been here for 62 years so I wouldn't mind putting one on the the original library because I think they're celebrating their 75th anniversary and And I went to story time when I was two years old, so I think it'd be an honor to have a plaque there as well. So I have no problem putting my name on it. It's not egotistical. And celebrating America's veterans, we're celebrating America. Not one or two, not five or six, not the SEALs, not the Airmen, not the Navy. American veterans encompasses everybody. And to your point, Councilman Gruhl, let's celebrate the city. Well, if a city employee is a veteran... They're on there too. They're part of America's veterans. So it's the most broad brush statement you can make. It's the most least attackable. What is somebody going to say? You celebrated the veterans, but you didn't say, you know, Bob Jones, my dad, sorry, he's a veteran, so he's on. Why do we care so much if our names are on a plaque?

Why do we care? Why are you making a big deal about it? You're wasting everybody's time. Everybody's tired. They want to go home. Why are you arguing about a plaque? We get it. You don't want your name on it. That's okay. That's okay.

So there's a motion. I plead with you guys not to remove Chris Carr's name off the plaque.

What was your motion, Casey?

Councilman Kennedy might repeat it.

What? The motion? Yeah.

You got enough direction, Ashley? Okay. Okay.

So I make a motion to take the recommended direction, come back with another iteration, utilizing America's veterans, past, present, and future, forever America's heroes, fit it, make it prominent, and bring it back for council vote. Okay.

Second.

Well, you can second it, Casey.

Second.

Councilman Gerold.

I still just like to see a veteran in place of my name, so no.

Councilman Kennedy.

Yes.

Mayor Pro Tem Twiney.

Yes.

Mayor McKeon.

Yes.

Councilman Burns.

Aye.

Councilwoman Vandermark. Yes. Councilman Williams.

I'd like to see Chris Carr's name in place of my name. He means something to me, so no.

Item passes, 5-2.

All right, item number 26, the presentation of the Finance Commission Subcommittee's review of the financial impact of the proposed Police Officers Association Memorandum of Understanding to the General Fund and recommendations and staff review of long-range financial projections, including labor contracts, unfunded pension liabilities, and reserve levels.

thank you mayor. As you just read on August 18 the council directed two things one is the finance commission to have a subcommittee to review the And that was completed by the Finance Commission last week, and that is a memo that is attached to your agenda on this item. And then the other item was for staff to come back and provide a report on the long-range financial plan, including projections for labor contracts, unfunded pension liabilities, and reserve levels. we have our CFO Zach Z and Robert Zagletti I'm so sorry Robert to provide that staff report.

All right, thank you, Travis. And good evening, Mayor and City Council. Before we get into the details, I want to walk through what we'll be covering tonight. We'll begin with the city's 10-year financial forecast and what the forecast tells us about our long-term financial outlook. From there, we'll provide some context around the different stages and financial pressures, following by a closer look at CalPERS, our unfunded actuarial liability, and our pension obligation bonds. We'll then look at the city's general fund reserve positions and conclude with the tools available to manage projected deficits, including potential revenue options. So now I'll pass it over to Robert to present our 10-year forecast.

Thank you, Zach. Good evening, Mayor, council members, and residents. Before diving into the numbers, I want to clarify what a long-range financial forecast is and is not. A 10-year forecast is a dynamic planning model. It is not a budget. It is not a crystal ball. It is a reflection of an organization's financial trajectory using policy, actuarial, and economic data captured at a single point in time. It is not a measure of immediate fiscal liquidity or short-term solvency. The appropriate tool for that measurement is the ACFER book. It is a fluid framework that allows us to identify multi-year trends and course correct before numbers are finalized. It is a strategic tool to evaluate structural revenue and expenditure variances. It is not a mechanism for establishing operational spending limits. The appropriate tool for that is the adopted budget book. In summary, first, a 10-year forecast model models passive assumptions, showing what happens if policy remains unchanged to trigger early policy adjustments before years any cash flow crisis occurs. Second, because long-term output compounds, minor shifts in inflation or discount rates, especially in the out-year numbers, evaluate long-term structural trends rather than immediate liquidity. Therefore, projected long term deficits serve as a tool for proactive course correction, not evidence of fiscal insolvency. Next, we'll look at the modeling methodology we used. We used two analytical approaches. Both are represented and combined on this slide. First, a comprehensive baseline update. This is when we refresh all inputs at once when major multivariable data sets change. For example, property tax and sales tax are collected, actuarial reports are updated, and other revenues or expenses are up to date and realized within our actuals. Second, a single variable sensitivity analysis. This is when we isolate a single variable holding all other assumptions flat to provide a true apple-to-apple look at long-term impact of a single decision. Now let's look at the comprehensive assumptions that were used for the fiscal year 26-27 and out years. Fiscal year 26-27 is a combination of multiple data points. It's anchored using five years of historical actuals analysis along with multiple data points, then aligned with a trend analysis. Other data points include a 3% growth baseline revenues and operating expenses and a 6% growth for personnel and benefits. along with actuarial reports that drive sales tax, UAL, EMS, and health benefits. The personnel is fully funded. All authorized positions are modeled at 100%. We do not build arbitrary vacancy savings into the baseline. Why? It provides structural protection against sudden deficits. It eliminates financial incentives to delay hiring, protecting public services. It gives departments immediate recruitment agility. and aligns with the GFOA best practices and rating agency standards, Moody's, S&P, and Fitch. The out years, fiscal year 27, 28, through 35, 36. The top four revenues use a growth based on a multi-year averages. Property tax is set at 4.46%. vehicle license tax 4.77%, transient occupancy tax 1.09%, and sales tax at 2.39%. All other general revenues are 3%. Operating costs escalate at 3%, while personnel associated benefits range from 6 to 6.7%. Actuary reports are also included, such as our debt service schedule and the UAL actuarial report. Finally, we have our single variable analysis. Holding every baseline assumption identical, we isolate one variable. In this example, the proposed Police Officer Association tentative agreement is isolated to conduct a single variable analysis. The red line is the baseline scenario. The general fund deficit starts at approximately 14 million in fiscal year 26-27 and reaches approximately 83 million by fiscal year 35-36. The blue line adds the single variable that includes the police officer association tentative agreement scenario, while keeping all other assumptions static. The general fund deficit then grows to approximately $17 million in 26-27 and to approximately $91 million by 35-36. The key takeaway is by isolating this single decision, we reveal that the Police Officer Association tentative agreement has approximately a 2.7 million variance in year one compared to the baseline scenario and compounds to approximately 7.5 million annual difference by year 10 compared to the baseline scenario. While the baseline scenario shows a conservative full-cost view, real-world turnover exists. On the next slide, we'll layer in an operational adjustment applying a 5% salary attrition factor across our salary budget. On this chart, we kept every revenue and expenditure assumption, escalator, and actuarial baseline identical to the previous slide. The only change is layering in a 5% salary attrition factor across salary costs. We used our last four years average vacancy savings of $10 million, subtracted that by the value of the positions that were eliminated during the adopted budget, approximately $5 million. This data provided us with a conservative starting point to build in a 5% salary attrition that is approximately $5 million. The impact of the 5% attrition on the deficit applying 5% attrition resets the projected curve across the entire 10-year horizon. For the baseline, the fiscal year 26-27 general fund deficit drops approximately $14 million to approximately $10 million. 35-36, the year 10 general fund deficit decreases from approximately $83 million to $75 million. For the Police Officers Association tentative agreement, the fiscal year 26-27, the general fund deficit drops from approximately $17 million to approximately $12 million, the $5 million reduction. In 35-36, it decreases from approximately $91 million to $82 million, which is approximately $8 million gap. The variance, the gap between the two scenarios from this chart and the previous chart are the same and consistent. And they're approximately 2.7 million in the first year and 7.5 million annually by year 10. The bottom line is under both models, long-term expenditure growth outpaces revenue growth, driving compounding structural deficits. Even with a 5% attrition, this trajectory shows the organization needs careful managing and a course correction. To discuss more on this topic, I'll hand the presentation back to our Chief Financial Officer.

Thank you, Robert. One point of emphasis I want to make on the 10-year forecast is this. As we move further out into the forecast, the projection naturally becomes a little bit more speculative because we're making assumptions about future events based on today's assumptions. So the range of possible outcomes widens over time and more variables can differ from our assumptions. That doesn't diminish the value of the forecast, it simply just means that the forecast is best used to identify direction and magnitude of the potential financial pressures that the city experiences. So what our forecast is identifying today is a structural imbalance. Recurring expenditures projected to exceed recurring revenues. But a projected structural imbalance is not the same thing as insolvency. and it is not indicated that instability is a predetermined outcome. Nothing in the financial information being presented tonight establishes that the city, that Chapter 9 is imminent or inevitable. What the forecast establishes is that the city has some projected structural imbalances that will require financial management and future policy decisions. This continuum is intended to show that there are several stages between identifying a projected structural imbalance and reaching chapter nine status. Taking corrective action is very different from experiencing actual liquidity pressure or an inability to meet our financial obligations. With the broader financial context in mind, I'd like to turn it back over to Robert so he could talk over about one of our obligations, which is CalPERS. Next one, Shannon.

CalPERS is a defined benefit plan that is calculated using years of service times the benefit factor percentage times final compensation. The benefit payouts are guaranteed for life. We have legally binding options. CalPERS is governed by the California Public Employee Retirement Law. Our contract cannot be unilaterally modified, paused, or easily exited. Exiting triggers an immediate termination liability. CalPERS actuarial valuation dictates our mandatory baseline that we must fund every year. Recruitment and retention parity. CalPERS is critical to remaining competitive with neighboring Orange County agencies. Cutting or reducing parity severely hurts our ability to recruit and retain police officers, firefighters, and key staff. CalPERS has a two-tier structure, Classic and PEPRA. Classic is pre-January 1, 2013, and is the legacy plan that has more costly benefits formula. PEPRA, the post-January 1, 2013, is a plan that uses capped formulas. As Classic members retire and PEPRA staff increases, baselines, normal costs, and assumptions will stabilize over time. Board control and Social Security integration. CalPERS central board administration plans, designs, and discounts rates and investment policies that the city has no direct control over. Social Security integration. CalPERS coordinates with or replaces Social Security. So for public employee personnel, it's their primary retirement safety net. So now let's look at the specific variables driving our pension costs. CalPERS uses economic assumptions that includes a 6.8% discount rate, 2.3% inflation, payroll and wage growth. This evaluation includes our FTE count and models, a 3% merit step increase and a 3% baseline salary growth. CalPERS also uses demographic assumptions, life expectancy and mortality. Calculations increase the total lifelong payout obligation with longer lifespans. Retirement and turnover rates includes retirement ages and pre-vesting employee departures. CalPERS also uses actuarial policies. Smoothing and amortization is a policy that structures multi-year gains or losses through a defined smoothing process and incorporates a pepper tier blending. The key takeaway, pension obligations are not static. They depend on a complex web of market returns, demographic trends, local wage decisions, and actuarial policies. Shifts in any single variable directly alter our annual employer contribution and long-term unfunded balance. With these underlying assumptions established, I'll pass the presentation back to the CFO to present the city's specific unfunded accrual actuarial liability.

Great, thank you. So this slide is intended to show the conceptual framework surrounding how UAL is created, how it is amortized, and how those individual bases ultimately stack together to create the city's annual UAL payment. First, CalPERS compares actual experiences against actuarial assumptions. Differences in investment performance, demographic experience, and changes in assumptions can create either actuarial gains or losses. So if you have, let's say, CalPERS is at, their discount rate is at 6.8%, if the investment returns come in any higher than that, we would experience investment gains, and that would help offset the overall annual payment for the city. Second each gain and losses generally becomes its own amortization base rather than recognizing the entire impact in one year that base is paid and credited over a period of 20 years and Third multiple bases can be active at the same time Some may represent losses and increases our payment while others may represent gains and reduces the payment the net effect of all those overlapping base ultimately determines the city overall annual UAL payment and Now with that conceptual framework in mind, the next slide shows how these overlapping bases translate to the Huntington Beach Actual and Projected UAL payments. This chart shows the city's combined CalPERS UAL payments for our miscellaneous plan as well as the safety plan. The first thing I want to point out is that the distinction between required and projected payments through Fiscal Year 27-28, these are known factors and these are required UAL payments and they're part of the actual report that's presented to us by CalPERS. Beginning of fiscal year 28-29, the amount becomes CalPERS projection base and is current at 6.8% investment returns assumptions and other actual assumptions. And you can see the combined payment increases to approximately 21 million in fiscal year 28-29 before the current projection begins to decline. That movement goes back to stacking concept from previous slide. Different amortization bases are overlapping and moving through their respective payment schedules. So the decline shown in later years is based on the amortization bases and assumptions that are known today. So future actuarial experiences can still be created for gains and losses and the projected payments will continue to update throughout future CalPERS evaluation reports. For the purpose of long-term forecasts, these CalPERS projections are the best information that we have available to us today, so they are appropriate to use for financial planning. But similar to our general fund forecast, our 10-year forecast, the projected years should be interpreted as projections rather than predetermined outcomes. So that explains the CalPERS side of the pension obligation. There's another component to this, which is the pension obligation bond that was issued back in 2021, so we'll move on to that. The pension obligation bonds are important because they help explain what happened to the city's UAL back in 2021 and why we now have two separate pension-related obligations. In 2021, the city issued approximately $341 million, which is approximately 85% of the total unfunded liability that existed at the time. So conceptually, the transaction was just a refinancing. The environment at the time had significantly low interest rates for financing bond debt. And so it was a positive and favorable to the city that we refinanced our pension obligation bond, our UAL payments into the pension obligation bond. So it is important to note that the... Bonds addressed the UAL that existed in 2021, they did not prevent new UAL from being created through subsequent actuarial valuation, which is why today we have both remaining pension obligation bonds and CalPERS UAL. And as of June 30, 2026, approximately $279 million of pension obligation bond remains outstanding. And after discussing our long-term pension obligations, I want to shift to the city's current general fund reserve position because reserves are another important... component of evaluating our financial conditions. For fiscal year 26-27, general fund expenditures approximate around $327 million. We currently have approximately about $100 million in available reserves, which represents about 3.64 months of general fund expenditures. And as a comparison, GFOA benchmark is shown to recommend approximately two months' worth of expenditures. And one way to put that measure into perspective is to think of it as a liquidity or a stress measure test. If the city experiences severe disruption in its revenue stream, the months of expenditures calculation gives us an indication of how long our existing reserve will actually be able to carry us through those turmoils. And of course, that's just a test of stress, and it's just an illustration. Under normal circumstances, the city doesn't stop collecting revenues. We don't stop collecting property tax or sales tax or fees. Those things will continue to flow into the city. And at the same time, reserves are not recurring revenues. They provide financial flexibility and give city times to respond to fiscal distress, but they are not by themselves a permanent solutions to recurring structural imbalances. And I'll turn it back over to Robert.

Managing a budget or forecasted deficit. The City has been managing our budgeted deficit for the past three years through revenue enhancements and expense controls. Although we budgeted a deficit, we end the year with a surplus. Here are some of the implemented and managed strategies that are used. Revenue enhancement levers. An annual 3% master fee adjustment. A standard escalator is added annually on municipal service fees to keep pace with inflation and ensures cost recovery. Parking rate increases. Modernized rate structures have been increased across high demand assets to generate additional steady general fund revenue. New advertising revenue. The city unlocked non-tax revenue streams through corporate sponsorship and ads on city property and digital platforms. Uniform bail schedules. The city updated our civil fines and code violation schedules to maximize enforcement cost recovery. Next is expense control and structural reductions. Position management. The city conducts an annual analysis of FTE allocations to maintain a right-sized workforce. Operational audits. The city trims non-essential line items, optimizes vendor contracts, and reduces appropriate operational costs. Reduced transfer outs. The city scaled back general fund subsidies and internal service transfers to protect core cash reserves. Managed hiring practices. The city's top executive management team strategically holds and delays recruitment cycles for non-essential roles to generate salary savings. Strategic reserve management. The city approved a fund balance policy that will allow us to bridge temporary timing gaps while permanent structural solutions take effect. while preserving prior year's reserves. The core takeaway. Closing multi-million dollar structural gaps requires this balanced, two-pronged approach. Maximizing cost recovery revenues while enforcing strict operational spending controls. These management strategies have been proven to be effective as the city, for the past three years, budgeted a deficit and ended with a surplus. With our baseline operational framework established, now let's turn to prospective revenue enhancements and new local funding options. This slide shows some additional revenue options for the city. Most of these options require voter approval. That concludes our presentation and we're happy to answer any questions.

Thank you, Zach and Bob. I appreciate that. A lot to unpack there. Any questions from my colleagues? Don, go ahead.

All right, well, appreciate the presentation. So let me preface everything by saying, you know, I don't slight law enforcement for lobbying for their team. It's human nature. We always lobby for our teams. As a city council member, I'm doing the exact same thing, but my team is the residents. So, you know, everything that I look at has to be looked at through that lens. So just some questions, Zach, or for Robert. So you used the last three years scenario. We started with a budget deficit projection and we ended up with a surplus. My recollection is last year it was $8 million and we ended up with roughly a $1 million surplus. Is that correct? Yes, I believe so. Okay, so when I look at your slides here with the 5% attrition rate, Are these deficits based on your modeling, based on your inputs, based on your variances, everything you said, it's not a budget, but you can stand behind these deficit projections as to be fairly accurate utilizing your tools. Is that a fair statement?

Yes, that's fair. Okay. On which slide are you talking about?

Well, I'm talking about, yeah, if you want to pull it up. So, talking about that. So, when I look at the 10-year trend. Is that on the screen at home? Yeah, when I look at the 10-year trend, the aggregate deficit based on these numbers using the attrition is $484 million. So, that was great work when we had to reduce $8 million down to a $1 million surplus. Our first deficit, and these are independent deficits, these are not compounding, so using this slide, the first deficit is 12,257,000, fiscal year 27-28. It's not 21-4 because we added nine to the deficit. If we paid off the 12-2 deficit in fiscal year 26-27, in 28-27-28, we would be forecasting a $21.4 million. In 28, 29, a $36.9 million. So these are independent pockets of deficit that, to the best of your ability, utilizing attrition, using tools and levers, you're able to stand behind these as forecasts. And they could be wrong to a certain extent. They could be higher. They could be lower. But these are not wild, just out-of-the-air numbers. So what I did, just to see how we could manage this, I used the scenario of we started with an $8 million deficit and we ended up with a $1 million surplus. So we're talking about... much larger numbers, so year one, $12 million, two. What I've done here is every one of these budget deficits, I've discounted them or divided them by two. In other words, let's use fiscal year 28, 29. $36.9 million. Let's just round that to $37 million. If I cut that in half, that's basically $18.5 million. So if we started that year with basically a $37 million deficit, and somehow we had an incredible banner year, And we swallowed up $18 million of deficit with revenue generation, managed hiring, sales tax up, property taxes up. And somehow we clawed back $18 million, which would be unheard of. We still are faced with another $18 million deficit. So what I did is I discounted every one of those deficits up through one, two, three, four, five years, up through fiscal year 3031. And the five-year... using 50% of the projected deficit, if we clawed back 50% of the money, year one, we clawed back 6 million, year two, 10 million, year three, 18 million, year four, 21 million, year five, 22 million. We claw all that back, it would be absolutely enormous. We are still coming out of our reserve fund, $77 million, utilizing a 50% clawback rate on the budget deficit projection. I don't believe that that's feasible. I wish it was, but even if it was feasible, we're still tapping our budget, our reserve fund for $77 million based on that scenario alone. So that to me seems highly unlikely. The question I asked, and I'll ask you now, Zach, the $99 million, so if we took out $55 million. Once we get below $54 million in that reserve fund, which is the two-month carryover using a 27.4, $54.8, once we drop below that and we can't forecast that we have two months' worth of reserves, what happens?

So, again, the GFOA recommendation for the two months is really a recommendation. We are actually in a pretty good financial position as compared to other cities as far as reserve goes. So the city actually has a... a pretty healthy reserve balance at this point.

And so I want to... For clarity, not to interrupt you, just so we're all on the same page, and you mean the reserve balance of $99 million? Correct. Okay. So by year four, if we've utilized 50% clawback on these budget deficits, we've now spent $55 million, so we're now left with $44 million. So the 99 goes to 44. And for point of clarity, then I'll let you talk again. You know, I was told the only way we can grow the general fund reserve is to spend less than you budget, but we're in a deficit spending pattern, or earn more revenue than you forecast. Are those factual statements?

I think there's some clarification points in there that needs to be made. When you look at 10-year projections, there's a lot of assumptions that go within the 10-year projections. You're assuming future expenditures and revenues based off today's assumptions.

Before we get there, and I'll let you talk, the question I asked you was, what I was told, maybe I'm wrong, The only way you can grow the general fund reserve is to spend less than you budget, but we're in a deficit spending pattern, or earn more than you forecast. Is there any other way to add to the general fund reserve?

Well, you don't have to technically spend more than you forecast. You could just spend more than what is actually... I mean, earn more than what's actually expended, not what's budgeted.

Okay, but is there any other way to build the balance of that reserve fund other than earning more than you spent? No. Okay, so we would have to earn basically... you know, 55 million more than we spent just to cover 50% over five years of the budget deficit payback. Does that sound likely?

Again, these are projected numbers, so I think it's important to get into a little bit of the assumptions and also some of the flaws that has to do with, you know, looking at long-term financial forecasts. So if you're looking at it in isolation, that's something that you... It's a detriment. You have to look at it in conjunction with the ACFER. You have to also look at it in conjunction with the budget book and... just to get a full picture of what is actually going on.

Zach, just to clarify, it's a calculated best guess. Is that pretty accurate? Based on today's assumptions, yes.

Let's speak in simple terms. Is your best guess that the future plays out like this chart?

Looking in conjunction with the budget document as well as the ACFER, which is the annual comprehensive financial report, those are audited numbers. Looking at past trends, these again are projections. If any of the assumptions change, the line can significantly shift up or down.

It would seem to be the case that there's a preposition or an assumption in here that the compound annual growth rate on expenses is 5% and the compound annual growth rate on revenue is 3%. If you close that gap by decreasing the expenses by 1% down to 4% and you got the revenue up by 1% from 3% to 4%, that would flatten the line. Let's speak in simple terms for everybody. That's a 1% drop on expenses, a 1% increase on revenue. Flattens the line. Is that correct?

That is the correct assumption, yes.

Thank you.

Does flatten the line mean eradicate the $484 million 10-year deficit forecast? Is that what flatten the line means, Zach?

Sorry, I apologize. Could you elaborate on how you got the $400 million?

Well, I just took the 10-year deficit off your 5% attrition rate slide, added them together, and the aggregate was $484 million over 10 years budget deficit forecast on your slide using the attrition rate.

I mean, in theory, if you were able to lower the expenditures by 1% and increase the revenue by the other 1%, you would essentially flatten this line.

Thank you. You would eradicate $484 million in forecasted deficit?

Again, it's a projection based on today's assumptions. If the assumption changed, whether if it's 1% up or down, it's going to significantly change over the course of the years. It's a multiplier that's applied to a 10-year period.

Zach, thank you for clarifying that. Zach, real quick. Appreciate it. Current slide, 5%. You obviously put these numbers on here for a reason, correct? Correct. Okay, so you've talked about assumptions. What are the assumptions you're using in terms of revenue, annual revenue increases and annual expense increases?

I'll have Robert go over that one.

Okay.

Isn't that the 5% and 3% I just mentioned?

That's close to the average, but I had read it off earlier. Maybe you missed it.

If you could repeat it, there was quite a bit of information you guys went through.

So let me get to the assumptions. Okay, so first of all, fiscal year 26-27 is a combination of multiple data points. And then it's anchored using five years of historical actual analysis along with multiple data points. Then it's aligned with a trend analysis. And that's for each object within our city. We go through every single one. There's hundreds of them. Other data points, so then that's just one set of data points. Other data points include a 3% growth for baseline revenues and operating expenses and a 6% growth for personnel and benefits along with actuarial reports that drives sales tax, UAL, EMS, and health benefits. So what we do is we take all those data points, and it's probably about 10 or 11 of them, and then we go through each and every single object, and then we put all of those data points into a trend analysis to give us our very first year, fiscal year 26-27. Now, that is dependent on you do nothing. You don't make any business. managing of the deficit or forecast move that I portrayed on the second to last slide, then that is where you would land. But once you do something like you implement managed hiring, alter the entire forecast gets altered. So that's if you do absolutely nothing, you use those assumptions.

Thank you. That's an important point to make. So at the current slide we're all looking at on the screen here, current conditions, as Council Member Kennedy touched on, With the blue line, by year 28-29, we've accrued $70 million in deficit. Is that a correct statement? If you just add those first three years up, it equates $70 million. And we have $99 million in reserves. So then by the next year, that deficit number now adds... up to $111 million. So that obviously depletes your reserves by that point. Is that a correct statement?

It's incorrect because you can't measure liquidity or solvency with a 10-year forecast. If you want to measure liquidity or solvency, and maybe you missed it in the first part when I was presenting it, I did say a lot, you have to look at the ACFER book. That's the appropriate tool to use for that. If you want to look how to manage your current year, you look at your adopted budget. budget book if you want to look at the trend of what your expenses and revenues are doing as far as comparison of your Organizational trend that's where a 10-year forecast comes into play.

I'm just saying we were going off your assumptions revenue at 3% Operational at 3% on expenses personnel 6% you guys put this chart together you just said a minute ago by year three and Those three years of deficit projections equate to $70 million. I'm saying the four-year deficit projections equate to $111 million. That's not a correct statement?

That's correct.

Okay. So how else, based on current conditions, how would you pay that $111 million deficit? How would that be paid to balance the budget?

When you look at the 10-year forecast, you wouldn't look at that as the liquidity required for the solvency. The first step you would say is that you have a structural imbalance. Right. And then you would work to deal with it.

I'm not saying that. So it would be impossible to answer that question. Well, sure.

I think it is, actually, because if you did nothing, right? If we go to the ACFER book, and this was your actual financials that came in on your ACFER book, now you're talking a different story. Then the statement you're making could fall into place, right? But this is just a 10-year forecast that just puts the trending of your organizational structure.

Well, that's what I'm getting, like... I think we're saying the same thing, like current conditions if we do nothing, the actual trajection is this, unless you guys have said on an earlier slide, significant corrective action. Can you give us an example of what significant corrective action is?

Sure. The hired management team. Excuse me, the managed hiring team, they've held 6 million, 8 million, 9 million, and I believe the number this year is going to be either 14 or 15 million dollars of working through and managing the deficit that they're facing. On top of that... Good. On top of that, we've come up with strategies to reduce carryovers. We've come up with strategies to reduce transfers out to other funds. So, just implementing some of those strategies is how you go from a deficit to a surplus. But this, with the purpose of a 10-year model tool, is to show what is your trend. So we are trending, our expenses are growing at a faster rate than our revenues. That is correct. But at this level, it would be inaccurate to say, because you would have to look at the ACFRA book to determine what the actual level is.

Okay. I know you did this analysis with the 5% attrition rate, right? And I know those comments earlier that we have 100 employees that we're budgeting for that at the end of the year we don't fill. So it chews up. So one thing is we could just, to be safe, we could delete those positions. Because I think you said 100 employees is about, what, $12 million? And that's roughly? Yeah.

Probably a little more than that. To your point, Casey, so it's what, 95 positions currently that we're carrying that are not filled? Currently 98.25. Okay, so let's go with that, 98.25. And then when we talked today, you came up with a number, an average cost per employee. I came up with 225, and you guys independently came up with about 220. So let's go with 220. So that's the average cost to the city, 220, $220,000. That's excluding overtime when I did the calculations and severance pay. Is that fully loaded too? Just fully loaded.

Fully loaded without the overtime.

Okay, so that's $21 million in one year. Now, go times 10 over the course of this long-term financial projection. That's how you find $216 million like that. So that's why this isn't a crystal ball into the future. Is that correct?

Yes. While we're on this topic, this is one of the questions I was going to have, and I think everybody needs to understand this. This includes fully funded vacant positions, right? So these projections, as they are just projections, just a crystal ball, but then when you go through and you have your ACFA report, that's when you actually reconcile it based on the positions that haven't been filled, which brings me to the point that For four years, we projected a deficit, and then for four years, we ended up with a surplus. You know, even looking back three years, right? Deficit, surplus, deficit, surplus. The primary tool by which that happened was managed hiring based on leadership, and then obviously delays and some capital improvement projects, et cetera. So if you look out at this year based on that mechanism, just this current year, 26-27, and you see, I can't read it because... I'm getting old. But, you know, $12.257 million. If you were gambling right now, do you think that we're coming in with a surplus or we're hitting $12 million in deficit?

Well, I'm not a gambling man, but if I look at how our actuals have come in, we've identified and up higher level management has identified more savings than that.

So I would say that this year they will overcome that deficit. So we feel confident that this year, again, another year of projecting large deficits, by my measure, we're going to end up with a surplus. But obviously, that structural imbalance based upon the decisions that we're making today is increasing. Chad had mentioned 3% and 5%, so to simplify it in his words as well is that if we have a delta between expenses and revenue of 2%, then we need to increase revenue by 1% and decrease expenses by 1%. Results in a flat line, which was really kind of the point that was made there. Is that correct?

Yes.

Okay, and the other piece that I wanna mention here is that do you believe, and you can see it here, because this is all in conjunction with the politics of the police MOU. That was really the driver, the trigger, the catalyst behind all of this. But as I look at these slides, they're similar numbers. Do you believe that the proposed MOU contract has a significant financial impact that's leading us towards these crazy numbers?

If you look at the trend line, regardless of which two graphs you're looking at, whether with the 5% or without the 5%, you'll see that the problem and the projection exists regardless of whether the tentative agreement is given to them, the POA or not.

So we're conflating two issues. We have a financial issue that we obviously need to address. We have been addressing and clearly we need to address on a go-forward basis to make immediate decisions. And then we have an MOU with a labor group that we're conflating into the overall financial issues. You just stated that one is not the catalyst for the other. So if we remove politics, which is really what this is, and we just focus on basic arithmetic here, we need to decrease expenses by 1% and increase revenue by 1%.

Ideally, you want to do more on their revenues, but I'll take 1%.

So what does that equate to, a 1% increase in revenue?

If we're specifically talking about the general fund, you're looking at $30 million.

Okay. And then how much do we have to reduce expenses by? What does 1% equal? Same amount.

And that's 1% revenue increase over what baseline? Every single year, right? 1% over what baseline? What growth rate are we increasing by 1%? 1% over 3%, what is it?

Based on the general fund budget numbers.

I mean, what are you budgeting for growth, revenue, percentage?

Budgeting 3% average, but it's a little more detailed than that.

Okay, so what was the growth over the last three years of revenue? Wasn't it like in the basis points? Not even 1%, in other words? Wasn't it like 0.57? Or 1.5 total over three years in revenue growth?

Yeah, I have it, let me. And Robert, while you're pulling that out, If anyone goes online, they can go to the Huntington Beach website, they could go to the departments and check out the finance department, and they can pull up these annual comprehensive financial reports. And what they'll see, it's a historical fact, is that every year over the past nine years you can pull up, the revenue has outpaced the expenses. There's some type of anomaly that's happening, I guess, if we just use a three-year sample, where now revenue has essentially dropped to about 2.9 or 3% in terms of crystal ball forecasting. Historically, it has outpaced the expenses without fail, and anyone can go and look that information up. I don't

So the last three years, it was 1.92%, then 24, 25, 4.13, and then it's going to be 0.43 this year. Can I break in here?

Item 26 in the agenda tonight states that this is gonna be a finance commission subcommittee review of the financial impact of the proposed police officer's MOU. then we look at the graphs, and it's got POA all over it. So my first question is, is all that attributable to POA MOU contract there, the 400 and something odd million dollars that Councilman Kennedy brought up? Is that all attributable to the POA contract?

No, as I answered earlier.

That's right, you answered Councilman Grohl's question. Yeah, so if you look at the two trend lines. I just wanted to clarify that. Did you guys use, and you've already answered this question once, but I want to ask it again. In your projections here, did you use approximately 100 FTE employees that will never hire to come up with the expense projections?

Will never hire? What do you mean?

Well, we're not going to hire those positions. We haven't hired them in the past few years.

They have a 5% attrition rate of fully funded people taken already into consideration on the slide. These are fully funded.

So let's delete them, Butch. So we're still including about 50 on the 5% attrition rate. We're still including about 50 FTE employees that we don't have. Is that correct?

That's the slide right in front of you. That's what it says right there.

Vacant positions, yes. Vacant positions. And can you just tell us what the effect of just the MOU has on this deficit? Is it 2 million, 4 million, 3 million? You can do the math, right? Well, I'm just asking him because he's got that stuff.

Let's be polite, guys. Let's talk. The first year, it's approximately $2.7 million above what we've allocated in our budget, and then it escalates to approximately $7 million by year 10.

By year 10. And that's assuming that in year 4, which this MOU doesn't even go through, what did you use as the increase in hourly rates in years 4 through 10?

You just used 3%? 3% with our 3% merit step. So it's a total of 6%, but it's an actual 3% COLA increase.

But just to add a little footnote to this, the $2.7 million in year one is because it's front-loaded, right? So it's 8% in year one, and then in year two it should drop to about $1.8 million, $1.7 million.

Above budget. A little bit less.

Even a little bit less. So it would be 2.7 and then 1.6 million above budget in the second year and then 1.8 or 9 maybe in the third year.

I think it's a little less than that. It's a little less than that, yeah.