City Council - Special Meeting

Will the meeting please come to order. This is the 05/05/2026 special meeting of the Irvine City Council. Would the clerk please call the roll.

Councilmember Carroll. Here. Councilmember Goh. Here. Councilmember Lu. Here. Councilmember Martinez Franco. Here. Councilmember Schussieder. Here. Vice Mayor May. Here. And Mayor Egren.

Here. At this time Mr. Peterson our city clerk would you please let folks know how they can participate in today's special meeting, both those who are present here and those who may wish to participate remotely.

Thank you, mayor. Members of our audience who wish to speak may submit their name into one of the speaker kiosks next to the city clerk or in the main lobby. We also offer the ability to provide live comments via Zoom and submit written comments through our e comment system. For those who wish to participate virtually, visit zoom.us using any web browser

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the Zoom app on smartphones or tablets and enter meeting ID 100060444.

The passcode is 272906. You may also dial in by calling (669) 254-5252 or (669) 216-1590 and entering the same meeting ID and passcode. Those who wish to provide comments via Zoom are asked to enter the speaker queue by raising their hand electronically. The city clerk will call your name and allow you to unmute your microphone at the appropriate time. Those dialing by telephone will be identified by the last three digits of their telephone number.

We ask that you please state your name for the record. The time limits per speaker are noted in the posted agenda and are established based on the number of requests submitted. All requests submitted after the first speaker is called shall receive ninety seconds. Those who wish to provide written comments may do so by clicking e comment on the City Council meeting agenda webpage at cityofirvine.org/ictv. All comments will be provided to the city council as part of the meeting record and will be uploaded to the city's website.

For technical assistance with zoom before or during the meeting, call (949) 724-6078. For any other questions or assistance, contact the city clerk's office at (949) 724-6205 or via email at clerkcityofirvine dot org. Thank you, mayor.

Thank you, Mr. Peterson, and welcome to all those who are here in the council chamber as well as those who may be partaking in this meeting remotely. I' going to at this time ask the city clerk to identify item 1.1 on the agenda this is the sole item. Mr. Peterson would you identify item 1.1 by title and subject.

Thank you mayor. Item 1.1 is consideration of a request by mayor a grant to discuss the mid cycle budget review and a fiscal briefing.

Thank you. Let me just take a minute or two by way of introduction. I called this special meeting to see if we can get a little bit of a jump on the budgeting process including our June meeting Mr. Crumby when is our June meeting schedule?

I believe it's June 9.

Do we have other items on that agenda as well? We do. June 9 will be our major meeting on the budget. However, I think great interest has been expressed by a number of people here, my colleagues, others in the community on questions arising in connection with the run up to that budget. I thought holding this special meeting would serve as kind of a work session a study session of sorts and would give our staff an opportunity to explain to all of us what the budgeting process is.

We now work on a two year budget process and we are mid cycle here kind of wrapping up things in this fiscal year and of course adopting an appropriate budget for the next fiscal year. My thought was for this meeting to, by the way I had a chance the finance commission met last night and we scheduled this deliberately to be after the finance commission had its meeting which I watched from beginning to end. Three hour meeting. Very thorough, frankly impressive presentation by our staff. Followed by one or two public comments but the questions and guidance given from the finance commissioners to staff were very impressive as well.

I think five of the seven finance commissioners were present. Each and every one of them posed some good questions, offered some useful insights. I think based on that I'm expecting that our session here will be equally productive. I' going to before calling on staff to come forward suggest this process that we have a presentation by staff I assume it' basically going to be the same presentation as was offered to the finance commission. Followed by one round of five minutes each here at the dais for questions comments responses then maybe take some public comment.

Mr. Peterson how many have requested to be heard so far?

So far mayor in person we have six requests and one on zoom.

We will keep that queue open we will take some public comments then and then it will be back to the council one more time. With that at this time Mr. Crumby do you want to introduce staff do you have something to say or should we just turn directly.

I do I'd like to kick off the presentation if that's okay mayor.

Please do. City manager Sean Crumby.

Good afternoon, Mayor Eagan City Council. Item 1.1 on the agenda tonight, as was discussed, includes a presentation regarding our mid cycle budget and overall fiscal update. I'll introduce the item real quickly, and then the majority of the presentation will be done by our Chief Financial Officer, Dale Bulasan. Our Deputy Director of Administrative Services, Jonathan Nee is also up for questions and support for the presentation. Next slide, please.

Okay. So, as we begin the mid cycle budget and fiscal update, I want to start by discussing what continues to guide our city. At the heart of Irvine's success are our strategic priorities. This is the framework that shapes how we make decisions every day. We remain focused on preserving and enhancing quality of life for our residents, maintaining safe, vibrant and well planned neighborhoods.

We continue to prioritize traffic and mobility as this is very important to Irvine residents. We are committed to protecting our natural environment, defining part of Irvine's character and long term sustainability, while at the same time being responsible stewards of public resources. And finally, organizational excellence defines how we operate. This slide discusses the balancing principles that guide our approach to the budget. These principles are especially important in a mid cycle context where we're assessing changes and proposing thoughtful measured adjustments.

This has shown a commitment to high service levels, aligning expenditures with our revenues, and ensuring that any actions that we take today support the city's long term financial stability. As we look at our fiscal position, it's important to recognize Irvine's growth over the past. During our recent past, the city has welcomed approximately 40,000 new residents. And to put that into perspective, 40,000 is larger than nine cities in Orange County. So in essence, we've added a city to our city.

With that growth comes expansion to both programs and services. We've established and strengthened key areas of our city such as communications and engagement, a new public library system, economic development department, a delivery team for the Great Park, council offices, and a health and wellness department. These investments reflect our commitment to maintaining the high quality of life that our residents expect as our community continues to grow. At the same time, this growth brings real costs, ongoing costs, new and expanded facilities require maintenance and operations. As our population increases, so does the demand on our public safety and overall city service delivery.

The last two slides I'm going to quickly talk about are just a sampling of the projects and measures that are coming forward that this council has championed over the last few years. These are real and visible outcomes that reflect the things that we've had in progress and speak directly to our priorities. They enhance quality of life, improved connectivity, and continue to shape Irvine as a well planned and desirable community. A monthly food distribution, bridge housing, Irvine's library system, We Ride, economic development are all new services and departments that have been added. In addition to those great investments, there's also a series of large capital improvements and facilities that are being brought forward.

Projects such as the Fieldhouse Gym, our Gateway Village project, grade separation at Marine Way, large bridge projects at Jeffrey Open Space Trail and Jamboree Michelson are in construction, as well as the Canopy project in the Great Park is on schedule. Each of these represent thoughtful investment in our community. And at the same time, they come with operational and ongoing maintenance responsibilities. As we transition to the main part of the presentation tonight, our Chief Financial Officer Dale Bouluson is going to present the rest of the deck. Thank you Dale.

Thank you.

Thank you. Welcome.

Thank you. Good afternoon. Dale Bullison, Director of Administrative Services. Great to be here, to be able to go through the budget update. There's going to be a lot of slides coming up.

And I did want to start off by before we dive into the meat of the presentation provide a bit of an overview of our budget process. I think it's important that the community understands some key concepts as part of the budget process, key terminologies that we're going to be talking about, different funds that we work with, I think it'll give good context as we move forward. So first of all, the city's budget process. First of all, we do have a biennial budget. Our fiscal year is July to June.

The biennial budget is adopted every two years. The last budget, biennial budget that we adopted was in July, last July. And it's a long process. I'll talk a little bit more about that in the following slide. But a 500 page document is put together.

It has detailed plans of each and every department, all the services that we provide to the public. In addition, it has all the priorities that Sean talked about and how we built the budget. The next item that I want to talk about our budget process is our quarterly budget update. And these are check ins with counsel, with the finance commission, our way of having transparency. What we do share in our quarterly updates are budget versus actuals, where are we, What's happening in the economy?

How do we need to adjust? And then finally is the mid cycle budget review, which is what we're here today. We're also talking about our quarterly budget as well. As we're approaching year two, we're ending out year one, we need to plan for the next year. Of course there's been a lot of that has happened since we've adopted the budget and new information comes out and we need to adjust for those things.

If there's additional funds, we would allocate those funds. If there's challenges that we need to face, this is a time to adjust. To the right of the slide is the two main budget categories. I think this is important for us to understand is that there's a general fund and I liken that to the city's checking account, it's all the operations of the city, it's paying for our public safety, our community programs, our events, our support services that equates to 35% of our budget or $300,000,000 And a lot of what I'm going to be talking about today addresses our operating budget because those are ongoing operations. To the right in blue is our special funds.

Those are our capital funds, our restricted funds. A lot of those funds can only be used for particular purposes like our Great Park, our capital projects, our grants. That's $850,000 of our budget. As you can see, we do have a large budget and there's a significant portion of our budget that's special funds that are restricted for particular purposes. So this is our biannual cycle.

And just to help folks understand our two year budget cycle, where it starts, what we go through during that process. Our standard process starts in October. If we start on the top of this picture here is where our budget cycle begins. At this point in time, we actually accelerated looking at our biannual budget, looking forward about fourteen months ahead. So we have a little bit more of a ramping up time to be able to plan for next biennial budget.

But typically we start in October, November, January. We're looking at estimates, we're updating our revenue estimates, what is our baseline expenditures, what are some balancing measures if need be. Then in March we have our community meetings. We're going to adjust that timeline a bit and I'll talk about the full timeline later on in the presentation. And then we go to finance commission and some of the other commissions in the city in April and May and then ultimately in June we provide council with a proposed budget to adopt before a new fiscal year starts in July.

And then on the left side of this slide it shows our mid cycle. That's kind of where we're at now as the year has elapsed and we're planning out for year two. We look to bring to counsel finance commission any sort of adjustments that we need to make for year two of our budget. This is another graphic of our map of where we're at. In addition, it expands it to a five year term and this is our way of looking at long term, are we structurally balanced?

How do we look in the long term? Right now where we're at, we're at the end of year one and we're planning out year two. So there's going to be a lot of slides that I share, a lot of content. We wanted to break that up into digestible sections. So we broke it up into number one, our prior fiscal year, which includes our fiscal year twenty four, twenty five financial reports and also our latest audit results.

Number two, our current fiscal review which includes our the current biennial budget that we're in today. So that's our fiscal year twenty five-twenty six third quarter budget update. In addition, our fiscal year twenty six-twenty seven mid cycle budget review. And in addition, we wanted to show what is our financial position as of today. So what's our balance sheet?

Well, I'm going to talk a little bit about our investment portfolio. What are our reserves? Number three, the future, our fiscal outlook for fiscal year twenty twenty seven and 2028 and beyond. And then we're going to provide some optional solutions and open things up for questions and feedback. So before diving into each of the different sections that I talked about, I wanted to give an overall overview of our city's financial position.

We are in a very, very fortunate situation, very strong financial position. We have $1,700,000,000 in investment portfolio and over $130,000,000 in reserves. We do have a minor shortfall that we're contending with, a 2%, 3% deficit in the current fiscal period and next fiscal period. And this is due to a lot of external factors as and we'll go more deeper into this in the following slides. Also costs have risen.

Number three, our goal is to really have a long term view of our budget. We want to balance things structurally in the long term. And really that's ensuring that our ongoing revenues is can support our ongoing expenses. And four, know we're all about fiscal responsibility and transparency. All these check ins with counsel, the quarterly reports, the mid cycle budget updates And we want to have a long term view of things and we want to address the issues today.

And know that the city will always adopt a balanced budget. As we're going through it, we're struggling through it, we're going to balance it together. So first looking at prior fiscal year review, that's our fiscal year twenty four-twenty five financial reports and our audit. Fiscal year twenty four-twenty five financial report consists of four different reports that we prepare. The largest piece of it is our annual comprehensive financial report and the three other reports Air Quality Improvement Special Revenue Fund, Single Audit, federal assistance grants programs, great park funds, financial statements, all those, four funds, four financial statements are prepared in compliance with our government accounting standards board.

And they're also audited by a third party independent auditor to verify the accuracy, ensure that it's meeting regulation requirements, and also ensuring that we're following best practice. And it's a long process. The audit process takes approximately six months. They're performed by certified public accountants to perform audits like this to ensure that we're in compliance. The auditors use government accounting or auditing standards as they're going through the audit.

Some of the key principles that they have, independence, professional judgment, competence, quality control and assurance. And I'm happy to report that our audit results showed a clean audit opinion, no audit findings, no deficiencies in internal controls and no issues of non compliance. Now shifting to our current fiscal review. So this is our current biennial budget that we're in today. That includes our year one that we're in today and our year two.

So fiscal year 2025, 2026 budget and then also our fiscal year twenty twenty six, twenty twenty seven mid cycle budget. And also I mentioned that I'm going to share about our investment portfolio and our reserves. So to start, our investment portfolio, we're in great financial position to have 1,700,000,000 of investments in our portfolios. And our portfolios is broken up into three different portfolios. First is the pooled investment portfolio of $1,100,000,000 This is where our general fund resides, all of our operating funds.

In addition, it includes our reserves that I talked about, the $130,000,000 It also includes CIP, all the special funds, restricted and unrestricted. Our special districts funds, $624,000,000. That's the Great Park. So all the monies received from the Great Park CFDs, the Mello Roos which is restricted, that's that portfolio. And then we have our gateway preserve of $6,000,000 which actually we just received another our first deposit of $52,000,000 so that actually is more as of today.

So like I shared, a majority of our funding here is in restricted dollars, but it also has our unrestricted general fund in it as well. What does this all mean? It really demonstrates that we have capacity with our balance sheet to meet both of our current needs and our future capital obligations. So wanted to talk about our reserves. So we have two different pots that we have access to our contingency reserve.

And the purposes of our contingency reserve is basically our emergency fund. And this is to help us to mitigate any sort of economic downturns, any unanticipated situations that we may encounter. In addition, it helps us with our liquidity needs. Our reserve balance is $66,000,000 which is a level of 22%. Our city policy is to have at least 20% with that includes a 5% ready reserve.

And the GFOA, the Government Finance Officers Association has a national recommended reserve requirement level of two months which is equivalent to 16.7% which you can see we're above that level. The other reserve balance that we have is our asset management plan fund and that's an inadvertent fund that provides us funding sources for with our interest to support operational and also infrastructure needs. Our current fund balance there is 65,000,000 And of course, if need be, are because they are unrestricted dollars, we can tap into the principal to meet any sort of unexpected needs as well. So fiscal year twenty five-twenty six, that's the year end right now. Wanted to provide you a third quarter budget update.

This is the period from January 26 to March 26. And then typically what we shared during our quarterly budget updates is budget versus actuals. What's the current economic conditions, any sort of adjustments that we need to make to our budget, right. If there's good times, can allocate budget. If there's challenges in our situation today, we can make adjustments as well.

If you remember in our 2Q update, we did report there were some unanticipated expenditure increases. I'll go into more detail on that. Signs of revenue decline. 3Q, what we're reporting on today, we have responded to some weaknesses that we saw last quarter and already implemented some budget balancing measures. But those budget balancing measures unfortunately are not enough to overcome the deficit that we see today.

Currently, we project in twenty five-twenty six a projected deficit of $6,000,000 or 2%. So looking at the expenditure sides, what are some of the pressures that we've been seeing on the expenditure side? There's been multiple unexpected cost impacts that we've been seeing. We've been hearing it on the news. You guys have been probably hearing it as well. Rising inflation, interest rate volatility, tariffs, geopolitical tensions. They're all increasing cost. Not just for us in the city of Irvine, but we're seeing it in other cities as well. Increased labor costs. Medical insurance costs have gone up by 12% this year due to new state requirements.

Lower vacancy rates due to service demands. As Sean shared, the city has grown tremendously over the last number of years, which is a good thing that we've been able to fill in the positions to meet those demands. In the past, our vacancy has been typically 8%, 10%. As of today, it's 8%. Sorry, it's 4%.

So it has gone down tremendously because of the service needs and we're having to contend with that. There's been increased operating costs with our contracts as we're going out to bid for landscape maintenance, street maintenance contracts, materials, costs for construction supplies. All the bids have been coming in a lot higher. There's been some stability of late, but there's been a big jump up in the last year or so. Our insurance premium as well, we're seeing it go above what we expected, anticipated workers comp and claims.

On the revenue side, we've had pressures on both sides. There's a broader concern that we will have lower growth in our revenues in the future years as we're maturing as a city. There's been more pressure on the city as far as revenues. We've had to reduce our projections particularly for sales tax, especially with volatility in economy. It's prevented folks from going out from buying cars and sales tax is very dependent on consumer behavior.

You know we've seen this in other cities where they've actually had to increase taxes. Cities like Fullerton and Orange and Santa Ana are feeling the pinch and so are we. There's a decrease in the tax transfer revenue due to slowing home sales. This is primarily because of high interest rates. Also there's inventory continues to remain low.

The good thing is in other revenue categories, it's been doing a bit better, but not enough to offset the downward pressure that we've been seeing on sales tax and our transfer tax revenue categories such as program fees. So for fiscal year twenty five-twenty six, we've developed a balancing measure. As you know, we're kind of in the tail end of year one. We've made some adjustments already, but we still have a deficit of $6,000,000 which is 2%. Our recommendation is that we utilize our asset management plan fund to and have a plan to replenish that in future years with future year surpluses.

The great thing about that is that it can ensure that there's no service interruptions moving forward. Know that the balancing measures that we're putting in place today, we're going to continue it throughout the rest of this fiscal year and also continuing into the future. The thing that it will help us, it could minimize the amount that we tap into the asset management plan fund. We'll still continue to work on it to ensure that we're doing our best possible effort to be able to balance. So looking at year two, fiscal year twenty six-twenty seven, this is the year two of the biennial budget.

Like I shared again, when times are good, we can allocate funds. When we're faced with economic challenges, The mid cycle process is to make that adjustment. And in addition, as part of our mid cycle budget, we look at our operating budget, but we also look at our capital improvement program. So as projects are completed in our capital improvement program, we can close that out. We can allocate additional funds to new projects.

The other part of it is our fees. We look to adjust our fees as well. Currently, our fiscal year twenty twenty six-twenty twenty seven projected deficit is $9,000,000 or 3%. So our recommendation in order to bridge that gap for fiscal year twenty six-twenty seven, there's two components. The first is expenditures.

We've identified $6,100,000 in savings. First is to adjust our fleet vehicle replacement schedule and that would equate to $2,600,000 We see an opportunity to adjust our fleet maintenance schedule. We've invested very aggressively in shortening that and replacing the vehicles. We believe we can extend it a little bit longer, defer it for a year and still have working vehicles. The second piece of it is department cost reductions.

We've identified $3,500,000 for next year and that's primarily going to be realized through holding vacant positions and of course we're going have an exception for emergency personnel. Next is to reduce expenses and supplies, training and contracts and then shift contract work to staff. There's a number of work that we can do in house like having training in house. As we're implementing our ERP, our new ERP system, we can accelerate the phase out of our consultants that we're using to backfill temporarily as we're going live with our Workday system in July. Also we see opportunities with our permitting services that we can have that in house as well.

The other side of it is our revenues, 2,900,000 in revenues. As you might remember, council approved the WISE agreement. This increases our revenues by $1,900,000 The other piece of it is that we believe that we can adjust our fees to recover cost by a million dollars. These fees, just to give some examples of these fees, they're the program fees, developer permit fees, our facility rentals. We believe there's opportunity to adjust for that.

And I'll go more in detail on that point. So the future, this is our fiscal outlook for years three, four and beyond. So fiscal year '27 and '28 and beyond. This slide gives a very good depiction of kind of where we've been and where we're going ahead. So the solid line, the green line shows our revenues, our historical revenues.

The solid red line shows our expenses. And as you can see, traditionally in the past, the green line is above the red line. And that's where we want to be. There was a dip in 2020. As you all can remember, there were some challenges financially during that time. There was a ramp up subsequent to that. And then today, we're at an inflection point. That's where you see the dotted line. The future. And the dotted line, the red dotted line is above the green dotted line.

And that's the challenge, right? We want to make sure that the green line is above the red line. And that shows that we need to make a course correction. And that's why we're here today is to provide a pathway for us to have a course correction to ensure that we're sustainable in the long term. So we look at our current period, that's step one to balance our current period.

And these two tables show before our recommended actions for 2527 and after our recommended actions. So as you can see, if you look at the first two columns twenty five, twenty six, twenty six, twenty seven, we initially had a $6,000,000 deficit and a $9,000,000 deficit. And on the table on the bottom, both those years are balanced due to the balancing measures that we've recommended. But as you can see in the out years, year three, year four, year five, there's still work to do. The great thing is that we have fourteen months to work on that.

We do have a pathway like I shared to be able to balance that moving forward and then we're going to share that today in the next number of slides. So step two, fiscal year 2728 and beyond. The big thing is to really recalibrate. We have to recalibrate our expenditures, our revenues so that we can balance on the long term. Big question you probably ask, might ask, be asking is from 2627 to 2728 there was a big uptick in our deficit from $9,000,000 to $37,000,000 Those two, there's two things that really contribute to that big uptick.

Number one, we want to remove our reliance on one time funding for ongoing expenditures. There's been a long standing practice for almost a decade to use one time funds. And the staff identified this and we want to change that practice because I talked about one time revenues going towards one time cost. And ongoing revenue should be going towards ongoing expenses. So we want to be able to do that.

I have a next slide that will go more in-depth on that. The second thing is rightsizing our Great Park cost allocation. So in the past we've allocated cost to the Great Park and we're going to make some rightsizing of that expenditure allocation. And I'll talk more about that in a couple of slides as well. So one time funding.

So since 2017, the budgets have included the use of one time funds. And this is not uncommon. Other cities do tap into one times occasionally to use for operating. But we believe it's fiscally prudent that we utilize again one time revenues for one time cost. In the past, we've been fortunate to get a lot of one time development fees.

We've been able to get surpluses that we've been able to utilize. But I think as we're growing as a city, and at some point we're going to get built out. And we want to plan ahead before that happens when we're built out to be able to make that adjustment ahead of time. One times again primarily comes from prior fiscal year surplus and also unrestricted developer fees. And the goal really is to have a sustainable budget that we can rely on.

The other side is really rightsizing our cost allocation. And before I go into the details and the numbers, did want to explain kind of how our Great Park budget works. So we have multiple revenue sources with our Great Park. They come in form of our Department of Finance settlement and that's when the redevelopment agency dissolved a number of years ago. There was settlement money that went into the Great Park.

Those are unrestricted dollars. In addition, there's the Great Park CFD proceeds. And that's what we're all familiar with. Folks that live there actually have to pay taxes for the maintenance of the park and for the development of the park. In addition, there's program fees, developer fees and rent.

So all the sports events that you see there, attendees that go there, there are fees that are going to the park to be able to support the operations there. So what are the expenditures, recreational classes, the landscape, facility maintenance and also the development. So we've been doing a lot in the park lately as you know. We've gone from a planning phase to more of a development phase of the park. And we've been learning a lot of things as we've been going along, building up our great park operating budget.

And as we've been taking a closer look under the hood of our allocations, we go staff member by staff member to see what's allocated to the park. And we want to make sure that the allocation for the people that work on the park are actually are correct. And we've been evaluating that and ensuring that that happens. Currently, on average we have 8% of all our city staff that's allocated to the park currently. And we want to right size that.

We believe it should be 2% less as we move forward. Could it change in the future? Yes, it could change in the future. But at this time we believe the right amount to allocate to the Great Park is 6%. That ensures that we're balanced in our Great Park budget.

That ensures that we're allocating the correct amount to the Great Park and also allocating the correct amount to our general fund. And I also wanted to make a note that our Great Park CFD funds, the Mello Roos payments are not used for staff allocations. So what are our long term strategies? The first one, and I've been sharing about this already, it's not anything different than what we have been doing is to hold vacant positions. Currently we have 40 vacant non sworn positions so that doesn't include our officers.

We plan on holding vacant positions with that exception of emergency personnel. And as we're holding positions, have to think differently in how we do things. We want to utilize the technology that we had to make things more efficient with our workday system. I think there's a lot of opportunities for us to do things more efficiently. In addition, to reduce our expenses and renegotiate contracts, reducing our supplies and training expenses, renegotiating our contracts with vendors, shifting contract service work to staff and I talked a little bit about that before.

Evaluating also our city contributions. I think it's important to take a look at that to agencies and nonprofit and community events. I'll make that available today as well. To initiate discussion with labor unions, we want to do this collaboratively. We want to do it collaboratively with our unions that we can work together on finding a solution to our budget challenges.

And four, Sean talked a lot about our city priorities. We want to focus on our core services like public safety, our public works team that works on our infrastructure, upkeeps our parks. And five, lower general fund subsidy on user fees. So like I shared user fees benefit a particular person or a particular group. We want to bring that up a bit to current market so that we're competitive.

Anecdotally I hear that the parks are beautiful. People come to our parks and play sports on it. I heard that in one instance someone said that they feel like they're playing an Angel Stadium. That's the kind of quality of services and quality of facilities that we have. We need to make sure that we charge what's adequate and what's fair and what's in market.

And the sixth is tax measures. And this is more for information only. I know that there was some mention of tax measures. We just wanted to provide it to counsel for your information purposes only. So this slide shows all the different departments in the city, the makeup, the percentages.

But more than that, we wanted to provide this slide just to show that all of our departments are working on this together. We're looking to see how we can do things more efficiently. We're looking to see how we can generate revenue. Think outside the box, everyone's chipping in. This slide again just for information purposes only.

This is our city contributions to agencies and nonprofits. We have a total of almost 16,000,000 that contribute to agencies and nonprofits. And again as Sean shared, the city has been growing. We have a very diverse community. There's been increased demand for different events.

Our city events that's hosted by and planned by our communication and engagement team, that has more than doubled since 2020. The current annual production cost for these events is $2,300,000 I talked a lot about user fees already. I think the long term strategy is that we are proactive and that we keep up with market and that we're competitive with other cities. And again, user fees are for benefiting a particular person or group rather than for general public. And this is just wanted to make a note that this is not a tax.

Our estimated cost recovery, so the amount of cost that we spend on providing the service, we only recover 62% and the general public is subsidizing 38% of the users fees. There are cases where it might make sense, but we just want to make sure that we bring this to your attention. We want to ensure that the cost of providing the services are covered from those who use it. So again for information purposes only, this where we stand with our transient occupancy tax. Another way of saying that this is a hotel tax.

So when somebody visits the city stays at a hotel that person pays a hotel tax and it comes to the city. We are the lowest in Orange County at 8% and you can see in this graph it goes up to as high as 15% in Orange County. So business license tax. So this varies from city to city. There's as you can see on the right, a number of cities that do have business license tax and it can be assessed multiple ways based on employees, based on gross receipts.

So there's that. There's the city of Irvine which only collects a user fee. So this is capped by the amount of work or time that the staff spends on registering people in business license. There's also a number of cities on the bottom that don't pay a tax or a fee. But you can note as you look through the list of cities, most of these are primarily bedroom communities.

So we talked about step two being balancing the budget on the long term. And I'm happy to say we've done a lot of work. We've looked at our expenses. We've looked to our revenues. And this is just summarizing all the things that I've been already talking about, holding vacant positions, evaluating our part time, overtime needs, decreasing our contract staffing, consulting and our recruitment contracts.

Also strategically reducing our contracts, events, programs, supplies, hardware, software training and business expense. We've been going through, combing through all of our expenses. We've been looking at our operations very closely and we believe that there's opportunities to balance our budget from our expenses, but also our revenues. We see opportunities to lower our general fund subsidy on user fees. We also have offered the agreement for the solid waste revenue as part of that solution as well.

With all those things that I've talked about, we're confident that we're able to balance the budget in the long term. Their executive team met in length in a few weeks back. We've gone through with a fine tuned comb to be able to come up with these and offer these solutions. Although we still have a lot of work to implement them. And that's where we need council support.

That's where we need the community support to be able to do that. So ultimately, as you can see in the end, we've balanced the budget from the current period and also in the future years. And again for the future years we still need a lot of support as we lead into our next biennial budget as in 2027. The good thing is that we have a good runway in order to be able to do that. So I wanted to talk about and map out our calendar where we're at.

So you can see that yellow bubble there, that's where we're at today pointing downwards. Last December through April, we've been, the city manager has been reviewing it with council. We've been doing updates and briefings. We've done updates in our Q2 budget. We've had meetings to discuss this larger issue that we're talking about today.

In June, we plan on coming back with detailed recommendations, detailed actions for counsel to adopt to balance our current year budget and also balance year two, which is our mid cycle budget review. July through August, we plan on accelerating our community outreach, our community workshops. Instead of planning on doing it later on the year, we're accelerating that to July to August. In September, we'll provide an update from the feedback we get on those workshops in September. And in November, we have our normal Q4 budget update.

And then in April and May, presentations to our commissions and then come back again to finalize our budget for the next biennial budget. So I know that's a lot of information. So we summarized all of the balancing measures that I shared today. So fiscal year twenty five-twenty six, this is the immediate need is to balance our current year's budget, utilize AmpFund to balance the $6,000,000 deficit. The other immediate need is looking at our next year two budget, fiscal year twenty six-twenty seven.

I talked about adjusting our fleet vehicle replacement schedule $2,600,000 department cost reductions holding vacant positions, reducing our contracts $3,500,000 in savings, solid waste revenue increase $1,900,000 and adjusting our fees to recover cost $1,000,000 These are very high level. We're prepared to bring all the details of the fees, all the details of our cost reductions in June so that council can dig deep into that. We'll have a staff report prepared to

be

able to address our immediate need. Looking forward to twenty seventwenty eight and beyond. Our plan is to continue those cost reduction measures and our user fee adjustments. We're going to do a comprehensive fee study that's going to be presented to counsel and the finance commission as part of our next biennial budget. So that's to come.

Again, we have a fourteen month period where we can be able to do that. So the recommendation for tonight is that council, there's council discussion and direction to proceed with budget balancing measures and return on June 9 with formal action. And before I close out, I just want to share we had a productive meeting last night like the mayor shared. Their action was to recommend to city council as well to continue with the budget balancing measures. They did make a note that they wanted to see the details and that's what we were prepared to do in the June meeting for formal actions of counsel, another review by Finance Commission as well.

So that concludes my presentations. I'm more than happy to take any questions you may have and receive any feedback that we can take and incorporate as part of the formal actions that we plan on bringing back to Finance Commission and back to counsel in June.

Well thank you very much Dale and Jonathan as well. Thanks to our city manager and executive management staff. It's obvious that a lot of time, effort and preparation was involved and I having heard this presentation now twice I'm very appreciative. I think probably folks who are somewhat unfamiliar with the budget know a lot more now. So, thank you.

I'm going to first turn to our city clerk and ask how many have requested to be heard public?

Thank you mayor we have a total of nine requests to speak seven in person and 10. We have seven in person and three on zoom.

All right, we'll just keep the queue open for now. I'm going to suggest that we have one round of questions and responses. I'm going to suggest we limit the first round to our normal five minutes. That doesn't obviously preclude a second or even a third round if time permits. And I will call on those at the dais in the order that they request to be heard.

So council member Carol, you'll be first. Council member Mai will follow. At the end of five minutes, I'll gently remind you that your time is up and we'll allow for your question to be answered and then move on to the next person. With that councilmember Carroll.

Thank you, mayor, and thank you, Dale, for this comprehensive presentation. I just have a couple clarifying questions, and I'm sure there'll be more to say after we hear from the public and the rest of the council. One thing I didn't see on the slide, I may have missed it, is looking really closely at the Great Park with regard to something that I know is conducted really at every other major park in The United States, and certainly at all the parks where, you know, my kids play club sports around the state of California, and that's parking fees. We have a massive, massive opportunity, which is not one time, which I don't think was mentioned in your deck, which is that we need to charge the people, and I would just say in parentheses, the people that do not live in Irvine, parking. I pay $20 to $30 a day to go to lacrosse tournaments in San Diego County, Riverside County, San Bernadino County, Los Angeles County.

I think I paid $30 a day at the Polo Grounds in Santa Barbara. And I'm having a real core problem, unless this council wants to vote not to do it, why the Irvine Municipal Park, known as the Great Park, does not charge for parking. And, you know, I'm well aware of being the chair of the Great Park for years that it is a CFD project paid for by the residents in the area, so that's something that has to be navigated around. But I think you I would like to add to your you know, your list there, parking at the Great Park. And it might there might be some initial challenges with how to take parking fees and that kind of thing, but there's absolutely no reason why the Great Park should not be charging for parking, and there's probably millions of dollars that are on the table on that one.

When you talk about the CFDs not being used for staff allocations, is that just sort of based on the rules of the community's facilities districts or because it's only used for backbone infrastructure? Could you just explain that?

Yeah, sure. So there's different revenue sources like I shared. The reason being is that there's overhead that's charged to the park to manage the park. There's been a lot of work to plan development. We don't believe some of those cost is directly related or could be directly charged. I believe that we wanted to just right size the amount. So if we allocate, let's say, somebody spends a quarter of their time in the past, maybe now they spend 10% of their time.

But the CFD funds themselves are not able to be used for staff allocations?

It can be used for staff allocation if they're working on the park. So the correction and the right sizing is to make sure that we're charging the correct amount to the park.

Help me understand that a little better. I heard you say that the proposal would be to reduce the staff allocations.

Correct.

So that means that the CFD would pick up more of that? I mean assuming the dollars Yes, are

me just clarify. So there's the direct charge. It's obvious that somebody's working on the park. There's overhead. We have more than enough unrestricted dollars to be able to pay for additional staff allocations that might be questionable. But we just wanted to right size the total amount just to make sure that the taxpayers in the Great Park are ensured that this allocation change is not something that they're paying for.

How much is that allocation currently? Like sort of on an annual basis?

Let me just look to my partner here. Think he has that information.

Good afternoon.

So out of the total city wide staff, about 8% is charged there, about $20,000,000 total staff costs. But, out of the whole entire $200,000,000 for city services, for salary and benefits, total city wide.

Okay. Well, that's good to know. I mean, I've learned a lot, but what I particularly learned that I didn't notice in the deck is, and I know District 2, obviously my colleague here is fond of this, it's a little deeper than that. Because there are interests in Districts 1345, And 6, to the extent that we are charging staff allocations. Not saying it's bad, it's just kind of funny. I've been running around as Great Park Chair for years thinking that the entire park is paid for by the residents. It is not, because apparently 20 plus million is being subsidized by the rest of the residents of Irvine and their taxpayer dollars. And in addition to, it's sort of a double charge on behalf of Great Park Neighborhoods and Altair.

So just to clarify, we do have other program fees that come to the park. So we're talking about what people pay for the sports events.

Yeah. Let me weigh in on that, because that was my next point. I'm running low on time. So, I just want to finish that point and we can come back, Mayor. And that is that, from my experience as a community services commissioner, the chair of the community services commission, and a city council member since 2019, I've been pretty consistent over the fact that we don't charge anywhere near as much as we need to charge for non Irvine resident organizations and for profit sports clubs.

And I say that with a lot of very strong self interest in two daughters that play on that great park in sports clubs, and in clubs that wouldn't even follow along in that rubric. So, yes, it is kept like Angel Stadium because that is the Irvine Way, and I'm proud of this team that I'm honored to be a council member helping to lead of Sean and you and the rest of the staff in doing it. However, I think that there is a massive imbalance, and I think massive could be the word. I think that, again, me state this clearly, the out of town sports teams and the non Irvine resident majority sports clubs need to pay a much substantially larger amount of fees for the use of the great park. We don't charge anywhere near enough for that park as we should or any other Diana Manning Stadium and Barber and every other park.

So, my time is up and know I'll circle back, but I hope you put that in your notes too.

Thank you. You. If I

might follow-up on one of the points. The parking analysis, the city is in process of doing a parking analysis and we'll be ready to bring that back for council approval this summer.

Very well. Thank you, Councilmember Carroll, Vice Mayor and Councilmember James Wye.

Thank you Mayor and thank you Dale for that presentation. I'm glad that we're here talking about this is what I expected somewhat. Also watched the finance commission lively discussion last night. I thought this was going to be a little different. I came here today.

I was going to go either direction here, either asking a bunch of questions or, you know, asking a little bit more. And I appreciate the presentation and the detail of it, but I really wanted to dig deeper into what we're talking about. And I know you mentioned that, I believe it's June 9 that you're going to come back here, but I want to give a little bit more direction as you've mentioned. And I want to do that in a formal motion. Carl, if you could help me distribute this here. I'm going to pass this out to my colleagues as well while I read it.

Mr.

Councilmember Mai. I'm going to read this right now mayor actually.

All right. Part of your five minutes?

Yes absolutely. Will try to get it in five minutes here it's a little detailed. If I get cut off I get cut off and I'll come back again. Do the motion here. I move that the city council direct the city manager and staff to return within sixty days at a special City Council meeting or budget study session devoted exclusively to the general fund structural deficit five year forecast and long term budget balancing options before the city before the council considers any new taxes tax increases or broad fee increases the full staff report and all supporting materials shall be released publicly and provided to the council at least fourteen calendar days before the meeting The report shall use numerical detail throughout and shall not substitute broad narrative for data.

The staff report shall include the following. Number one, structural deficit diagnosis, forecast assumptions, and sensitivity analysis. Staff shall provide a dollar based explanation of the projected deficit, identifying major drivers by dollar amount across revenues, expenditures, labor, benefits pensions contracts great park cost allocations deferred costs and exhaustion of one time funding and shall disclose all key assumptions underlying the five year forecast staff shall also present a base case optimistic case, a pessimistic case showing the forecast impact if revenues underperform, cost exceeds projections, or development related revenues decline faster than assumed. Number two one time funds audit staff shall provide a year by year accounting for fiscal year twenty seventeen twenty eighteen through fiscal year twenty twenty six twenty seven of all one time funds used to support the general fund including amount source purposes and what deficit would have existed without them. Each proposed balance measure shall be classified as permanent ongoing savings temporary savings deferred cost one time funds new revenue fee increase or cost allocation shift.

No cost allocation change shall be counted as structural savings without identification of its legal basis affected funds and recurring fiscal impact. Three, fund balance and available resources staff shall provide a reserve schedule identifying each fund each which funds are legally policy and practically available for ongoing general fund operations and which are restricted to capital special districts the Great Park and other dedicated purposes for staffing labor and development right sizing staff shall provide a general fund staffing and labor cost report showing authorized, filled, and vacant positions by department, salary, benefits costs of each vacant position. Positions added or eliminated since fiscal year twenty nineteen-twenty twenty five year projected labor costs under existing agreements and the cost for each 1% citywide compensation increase. Each general fund department shall provide 510% ongoing reduction scenarios identifying specific positions, programs, contracts, and spending categories affected, dollar savings, service impact, and whether council action is required. Responses using broad terms such as efficiencies and cost controls without line items details shall not satisfy this requirement.

Five discretionary spending contracts and cost allocation staff shall classify all general fund services and programs as legally mandated Core municipal, important but adjustable, or discretionary. Staff shall provide a full inventory of discretionary spending, including grants, subsidies, sponsorships, memberships, travel, communication programs, and nonessential contracts, identifying for each identifying for each item the annual cost and whether it can be reduced, paused, or eliminated. Staff shall list all general fund contracts of 250,000 or more annually and all consulting contracts of $100,000 or more annually including whether each can be reduced rebid bought brought in house or eliminated staff shall also confirm whether the general fund is properly reimbursed for services provided to restricted funds, special districts, and great park activities, and shall fully explain any proposed great park cost allocation change and the dollar impact on the general fund. Six deferred maintenance staff shall identify whether any proposed balance budget balance measures permanently reduces the cost or merely defers fleet facilities technology and infrastructure maintenance to a future year. Seven no new taxes no broad fees scenario increases scenarios staff shall present a five year balancing scenario for fiscal year twenty twenty seven twenty eight through fiscal year twenty twenty nine -twenty thirty.

Assuming no new taxes, no tax increases, no TOT increases, no broad user fee increases, no one time funds for ongoing operations, and no cost allocation shifts that do not produce actual ongoing savings. This scenario should identify the specific spending reductions, cost eliminations, and service level changes necessary to structurally imbalance the general fund. Number eight, revenue options separately presented revenue options shall be presented separately for expenditure reductions and shall not be described as spending reductions for each option staff shall identify who pays estimated annual revenue legal authority voter improvement requirements, and what spending reductions could eliminate the need for the measure. Nine, staff recommended structural balancing plans. Staff shall present three specific actionable balancing plans for fiscal year twenty twenty seven-twenty twenty eight fiscal year twenty twenty nine-two thousand and thirty, not a menu of options.

Each plan shall identify each proposed action by department, dollar amount, and fiscal year, and shall demonstrate that the cumulative impact closes the projected deficit in each forecasted year. No plan shall rely on one time funds, reserve draws, or cost allocation shifts that do not produce actual ongoing savings without explicit written justification. Plan A shall assume no new taxes, no tax increases, no TOT increase, and no broad user fee increases. If structural balance is not achievable, staff shall state the remaining gap and identify which further cuts would be required to close it. Plan B shall combine maximum feasibility spending reductions with a limited amount of new recurring revenue.

Staff shall propose and justify the revenue cap, show what spending reductions were applied before each before reaching for revenue, and explain why the spending side alone is insufficient. The council reserves the right to adjust the cap and direct a revised plan B following the special meeting. Plan C shall reflect staff's own professional judgment, identifying the specific mix of reductions and, if applicable, revenue measures they recommend, why that mix is preferable to alternatives, and what the council would need to direct to implement it. These three plans shall be presented in a side by side comparison table showing total deficit closed, spending reduction by department, revenue, measures by type, service impacts, and implementation timeline. And the final one, number 10, council decision points.

The report shall include specific council decision points identifying which actions require council direction which can be completed administratively which require which require labor negotiations or contract renegotiations negotiations and the earliest fiscal year each savings measure can be realized. The staff report shall not presume that new taxes or broad fee increases are necessary until the council has first reviewed all spending side options department reductions labor costs discretionary spending one time funds and the no new taxes scenario. And the motion I ask for a second.

I''ll just ask for a second at this time and then we''ll move on I''ll just make a comment after that is there a second? I''ll second it for courtesy purposes here. Obviously a motion of this sort will require a lot of give and take which might be at the end of this meeting after everyone has had an opportunity to use their five minutes I granted you basically an extra five minutes. You mayor. Vice mayor and it is now on the record it's seconded we'll come back to it later if you don't mind okay

thank you mayor

thank you with that well I don't see, on this first round, I don't see any other requests from my colleagues, so I'll just direct a few questions if I might. Well you'd be on the second round. Okay. Let me just get a few thoughts in here. First of all, again, thank you for the presentation.

You touched on something in describing our property tax revenues which are robust, very stable, they grow year by year sales tax on the other hand much more volatile and to some extent we're at the mercy of the state in that regard and the more general economy. You mentioned tariffs let me just ask you are is there anything for which we're in line to get a recovery of tariffs that we have paid?

I'm not aware of any sort of recovery. It's blended in our cost if we're buying supplies from elsewhere. It's driving the economy.

So it's those business people who are going to get the recovery on the tariffs. There's nothing that we import directly. Is Right. That

yes. So the things that we purchase is mainly we've made

in the Senate. Just didn't want to overlook that. As you know I've asked you over and over for months, are we anticipating in our projections a recession? Which seems to me is very much in the cards. And obviously that affects us tremendously at the local level. Can you just respond to that?

Sure. We did just adjust our revenue projections based on what we know today. We are not anticipating a recession in our long term budget. We certainly would have to make adjustments if there's any sort of deep recession that's in the cards for us or quite honestly any municipality would have to make that adjustment if that happens. Like again I shared, we do have a very robust reserve reserve balance to help us through that time of course we would make additional adjustments if that does happen.

I think going forward I know your assumptions are conservative and that's as it should be. I always ask people to imagine best case, worst case in terms of the economy and so forth. And I do think you should take that into account. We're going into a period of, it seems to me, stagflation. And that may require us to be more thoughtful about the projections even if it means bad news.

Okay? Let me, I put this question to you I think before. The Gateway Project, the takedown of the All American Asphalt Plant, the Gateway Project projected various times to bring us perhaps 150, maybe even $200,000,000 assuming the project goes forward as we expect it will. That is not included in your calculations and projections. Is that correct?

That is correct. We don't include it as well because it is one time funding that we wouldn't appropriate unless we do set it up as an endowment and we pull earnings from it. I think rightfully so, we have not included it in our numbers.

So that was going to be my next suggestion. If indeed we realize 150,000,200 million dollars starting in 3031, 3132, and so forth, if we do and create a fund and it generates let's say $10,000,000 a year in interest that could be used for ongoing revenue projections correct?

That is correct.

Thank you for what you talked about in terms of the reserves. When I refer to the strong position of our city, the fact that we have a ready reserve, a contingency reserve, an asset management fund, I think puts us in very good shape to weather modest adjustments going forward. Obviously, if worst case scenarios begin to unfold, we'll have to certainly give attention to other measures beyond that. One final thing. As I recall, it wasn't part of your presentation, but salaries, as I recall, are basically about 70 percent of our operations budget.

Is that correct?

It's approximately 65%.

65%. So that's a big amount of money. And so to the extent that in the management of our workforce you can effectuate efficiencies so we don't have to hire somebody to do something we were expecting we can leave a vacancy open or through efficiencies realize that we don't actually need an additional person. I just want you to reassure me you have maximum flexibility in that regard. Do you not?

Yes, the city manager has flexibility to utilize the technology and reshuffle things internally that we can leverage the efficiencies that we get from technology. Like I shared Workday is coming online in July. We have a three decade old software currently. We believe as we're holding positions vacant that we can rethink our operations, how we provide analysis, do work. We're also looking at other software, different departments, enterprise land management, that's their work order system to replace our trees, to modernize a lot of our technology, to do the things that we do much more quickly and much more efficiently.

Thank you. I've exhausted my time. We'll turn now to council member Martinez Franco.

Thank you. And thank you for that presentation. I wanted to also address something. I mean, we create a panic with this forecast. But I want to start by asking you what is the definition of a forecast?

Thank you for the question. So forecast is basically looking ahead to later years. We talked about what we're looking at in the current period, right, in the first the biannual budget. But then we're looking at three year three, year four, year five. So we forecast the out years based on the best information that we have today. So we work with our staff works with our consultants. Two big main revenue sources that we have, property tax, sales tax. Again, property tax is very stable. That's predictable. We have a very strong property tax base.

So we help, we get help from our consultants because they work with agencies across The U. S, particularly in California. They understand the market. So we have a certain estimate or percentage of increase that we're going to see based on our development in it as well. And we input that as revenue.

So that's the property tax sales tax. We also have a consultant that helps us with looking at our sales tax. Again, they have expertise in this area and we utilize those forecast of our sales tax in the future to be able to have a baseline of how much money do we have coming in to help us help guide us in how much we need to budget moving forward. And if the expenditures are over the revenues, then there's an issue like we saw here. Again, we want to have our revenues over our expenditures.

Well, I'm going to make it simple. I just wanna know the definition, pure definition of forecast. The word forecast, it's a prediction.

Prediction.

Something that can change in the future. It's not something as a matter of fact, I think there's an article in the University of Berkeley that says that economists had usually a level of 53 of confidence in accuracy, but they end up in 23% of these forecasts being accurate. Things can change. You can be overly pessimistic or overly optimistic, and things can change in the future. Example in point, we have in 2021 with the COVID-nineteen that nobody predicted, there was a deficit of I believe 11 oh, let me see here.

In 2021, it was $1,010,502,308 dollars of deficit. And it was projected by 2026 we were going to have an $11,000,000 or so. Back then, we have only reserves of $47,000,000 As you can see, I mean, this is a forecast. And we are not in 11,000,000 on their own number of reds. And that's what I want the audience to be clear, that forecasts can change depending on the moves that we do right now.

Right? And I'm glad that we are going to be taking steps to fix this so it doesn't get to the forecast that you are predicting. Of course, if we continue in this trend, we will. But I want to make sure that we do the right things as well to fix this. It's nothing to be panic.

It's just something that we need to be aware that we need to fix our spending and making sure that we have other ways of revenue, right? Now, I wanted also to consider other proposals that have been proposed while I've been in city council. Just a year ago well, last year, the staff proposed advertising alcohol at selected Great Park events. And that was gonna be a good source of revenue. And I think we should bring back that to consider in city council because I think that would be a good source of revenue.

The last question that I wanted to ask you, can you remind me when the amphitheater is going to get completed and how much if we consider that revenue in the future as part of the forecast?

I can take that one, Dale. So quick status on the amphitheater is that the design is nearly complete. And the project is waiting and could move forward as soon as we have consensus council.

When is it going to be completed and functional to bring revenue?

So the proposal from the current vendor has a revenue that's estimated to go up to $12,000,000 by year three per year.

Which will be approximately what year?

So it would start at $9,000,000 in year one and escalate to $12,000,000 by year three. So if the amphitheater were, say, to move forward, there's a construction window. And so we could target a opening of 2030 or 2031. And by year three after that, we will be at full revenue. Thank you so much.

Thank you, Council Member Martinez Franco. We appreciate your staying within the parameters of our time. Thank you. Next, council member Melinda Lou.

Thank you. I guess this is more a basic question just for the benefit of me and maybe whoever is not aware of how these budgets come about, I think you touched on that. How we will have a revenue projection? Can you explain a little more on how we approach and who's doing our projection consulting?

Sure. We work with HDL for our property tax estimates and they do it for many other agencies like I share. Those are fairly predictable. On the sales tax side, we do contract out with Numo, our sales tax numbers. Again, they're formerly known as muni services, widely used in the industry when finance directors, finance departments put together their forecast.

So we use that as a base. Of course there's things that we know about in the economy locally. We provide input to the consultants, make adjustments accordingly to the forecast and we input that into our long term current long term forecast. Of course there can be changes like council member Martinez Franco shared. They are just forecasts right And they're variable.

We meet with them throughout the year to see if there needs to be updates based on actual data that actually comes in, actual monies that come in. Sometimes business for sales tax, some businesses move out. Sometimes businesses move in. We account for that. We're very connected with our economic development team here.

They're part of those meetings with our consultants so that we factor in that with our sales tax. On the property tax side as well, we have a lot of development going on in the city. We want to factor in new property tax, new homes that come online to make sure we make adjustments accordingly to those property tax. So we do our best to push it as far as we can to have the most confidence that we can to have a very educated data backed basis of our projection. Again, those are estimates.

Things could change. Interest rates, there's macroeconomic conditions that could impact what we see today. Interest rates could go up. Interest rates could go down. People's appetite to go out to eat. Maybe there's just uncertainty in the economy and people don't want to go out to eat. And that could change things, right? We get hit by COVID, recession like the mayor talked about. So lots of variables, but based on the conditions we know today, these that's that's how we forecast our revenue.

And, I agree with mayor that sales tax could be volatile and depending on the economy. So do we usually lean on the more conservative side for our estimate?

So we look to do realistic, right? So based on the current conditions, maybe a little slightly conservative, but I wouldn't say fully conservative cause that wouldn't be right as well. So we want to toe the line there just to make sure that we have educated guests and it comes from years industry experience. We have our consultants that have been doing it for many, many years. And you know again those are forecast, right? And we try to adjust it you know as we go. But I believe those educated forecasts that inform us how we need to build their budget.

Right. I believe that none of the economists will predict a pandemic that will basically shut down the entire world. So I just have a few questions about the presentation. When we talked about the city's investment, can you maybe explain or elaborate on what the average interest that we can count on like bringing in for our different investment in our portfolio and how you're monitoring that?

Sure. We do have our city treasurer, Don Collins that helps us manage our investments. For our pooled investment portfolio, it's subject to state requirements. Investments can exceed a five year period, so it's fairly conservative investments. We're not investing in stocks.

We're not investing in more aggressive investments. So the investment return is fairly modest. The average term for our investments in our pooled investment account is around two and a half years. So it's blended, it's tiered out over the life cycle of that five years. Because one thing that's primary for governments is liquidity, having that cash available in hand to ensure that we are able to provide for the capital needs, operating needs, the liquidity needs of the city and provides stability.

We won't see the huge up and downs that you see in the stock market. Current rates fluctuate, right? We're tied to what's happening in the market, what's the Fed rates. I can say right now we're at about three ish percentage return on our investment portfolio. So, but that's something that's being evaluated as those bonds mature, they're reinvested accordingly.

But one thing that our treasurer looks out for with input from our staff is what are some of the liquidity needs. If there's capital needs, big capital needs like purchasing the field house, we make sure we have adequate cash available. So that changes you know, kind of our mix, investment mix, how long is the duration on our portfolio, do we hold things, hold a little bit more cash because we have an anticipated expense coming up that's big.

Speaking of the field house, there are a lot of questions about where that money is coming from.

Thank you for that question. So, it does come from Park Funds, they're restricted monies. They don't come from our general fund. They come from development. It has to specifically be used for park park like amenities like the field house.

So no general fund money?

No general fund money.

Thank you, Councilmember Liu. Thank you. Councilmember Carroll, what I'd like to do is maybe before we go to another round, I'd like to take public comment at this time. How many do we have, Mr. Peterson? Thank you, mayor.

We have 13 requests to speak, eight in person and five on Zoom.

All right. Let's limit it to two minutes each. And let's close the queue at this time, all right?

Thank you, mayor. If I could call forward Suki Kang, Sandy L, Doug Elliot, Carol L, Heidi, Mona, Russ Van Vong, and Alan Meyerson. And we'll start with Suki King.

Welcome Mr. King, former council member and mayor. No, let's get it set up. Hold

on. Can you fix it? Oh, now it's on. There we are. Good afternoon mayor and city council member and staff and Irvine residents.

My name is Suki Kang, former mayor and city council member and I'd like to offer some comments on this particular item. Budget has been one of my pet peeves and always you know put a lot of emphasis on this item. So going back to 2008 when I was first elected, as you can imagine 2008 Irvine faced one of the most difficult economic crises in its history. But working together, we balanced the budget for four consecutive years, building strong reserves without a single furlough and without cutting core city services. More recently, as a presidential candidate appointee serving as a CSA regional administrator, I oversaw 1,800 federal buildings and billions in capital projects across eight states.

So, I know what it takes to run government efficiently and responsibly. So what we are facing today is not just a project deficit, it is a warning. And before we look years down the road, we must address what is directly within our control today. Before asking residents to pay more or sacrifice more, this council must first demonstrate discipline within its own house. One specific area I'd like to mention, bring it to your attention, is each council office now operates with a budget of over $600,000 for staffing and discretionary expenses.

At a time of fiscal uncertainty, that level of spending May

I just have 30 Yes. I'll grant you other Just speakers as conclude your thought if you will.

Fiscal leadership starts at the top. It requires making tough choices and leading by example. Every dollar we say within city hall is a dollar we don't have to take from our residents. So this is our moment to act now before the problem grows larger and the choices become far more difficult. Thank you for the opportunity.

Thank you for your comment. Sandy? Welcome. Thank you.

As you consider the city's fiscal outlook, including possible fee increases or new taxes, this is a moment to ensure full transparency in how public funds are planned and used. When residents may be asked to pay more, the standard must be higher. One of the most effective ways to provide that confidence is through a third party audit. An audit is not an accusation it's a verification tool it answers essential questions are expenditures aligned with council approved budgets are programs implemented only after formal authorization Are projected costs fully reflected in our financial outlook? And are there gaps between what is presented publicly and what is happening operationally?

These are not policy questions. They are financial governance questions. I have one such example that raises these concerns, but are there more? I don't know. Public records reference cost estimates that has been described as Office of Inclusive Excellence, with staffing approaching $1,000,000 annually.

Yet there appears to be no clear council action establishing that office, no fully adopted staffing plan, no confirmation that prior council directed steps have been completed, and conflicting descriptions of its scope. This is exactly where an audit provides clarity and increases public confidence. I respectfully ask the council to direct an independent audit to ensure full transparency. That is your fiduciary responsibility and a key part of responsible stewardship of public funds. If everything in his order is in order an audit will confirm it if not it will correct it.

Either way it strengthens trust. And I just want to add that I appreciate councilman Mai's detailed motion because we need to find out the details and not broad brushes about what's going on.

Thank you for your comments. Doug Eldian. Welcome sir.

Thank you mayor and good afternoon council members I' Doug Elliot city commissioner speaking only for myself. I want to thank staff for an informative presentation but I'd like to focus a bit on maybe part of how we got here and that regards some time travel back to 2015 when the state auditor made a rather scathing report saying irvine needed to take some remedial actions and how it does things one of the central findings was that a city Irvine size needs a central needs a permanent internal audit function city came back and said nah we don' think we need to do that state auditor said we really think you do and we encourage you to reconsider and implement it. City, to my knowledge, never did anything more with that. And that situation was kind of the inspiration for an article I wrote for Irvine watchdog last week suggesting that it' time for irvine to establish the office of city auditor as an independent agency serving the public to keep track of not only spending but to do performance audits to see if programs are being run efficiently and as effectively as possible. I looked at other cities that have done this they' had tremendous savings and I think the council really should take a look at that and I hope you will in the weeks to come thank you.

Thank you for your comment.

So the city math's not mathing and I really appreciate council member my highlighting the fact that we deserve to see the numbers I listened yesterday I listened today we're getting a lot of verbiage I'm sure your presentation took a lot of effort but I'd really like to see the math and the deep dive that's what taxpayers deserve is to understand the math behind this growth is not a liability it's a revenue generator so something is eating up that revenue because all those people who moved into the city they're creating revenue for the city So what's eating it up? It seems like city positions were added with compensation costs, new offices and programs were added, and ongoing expenses were funded. We have a public record that is in front of you right now that shows a DEI related office with a staffing model that has almost a million dollars assigned to it. That office has no formal record of being established by this council. It was supposed to be researched, supposed to be sent back to the DEI committee, none of those things happened, and yet you can see there through a public records request, a million dollars is being assigned to staff here.

That might just be one example. It could be that there's larger questions here of how many other things exist like that. Is this isolated or are there other city council offices that have staff assigned to them that haven't been investigated properly and for that reason we need to have an audit. It needs to be a third party audit so that everything is investigated thoroughly and that there if there's nothing to hide then there should be no reason why we aren't transparent. Regarding the cost of that audit which I'm sure mayor agron will bring up the city has already received covet funds that we learned through council member franco were going to be used to establish the d e I office so instead of establishing the d e I office let's use those funds to audit and make sure that we're using our first of all I'm not even sure we should be using COVID funds for something like that.

They are federally governed funds But and they have strict the truth is you need an auditor, a third party auditor.

Thank you for your comment. Heidi? Welcome.

I like all this idea and hearing all this stuff about auditing. Okay. I do need a little over two minutes. Good afternoon members of the council my name is Heidi and I'm the founder of save oak creek save Irvine. The city's budget has been surviving on one time money since 2017 we're heading towards deficits that balloon from 9,000,000 to nearly 47,000,000 by 2030.

And what could possibly fix this perhaps a new large development. The Irvine companies Oak Creek proposal puts the budget in a whole new light. The very first sentence of the community benefits section reads over the past several months the city council has identified several funding priorities then it lists Irvine connect libraries food security trail improvements so let's do a quick review of these programs Over the past year empty Irvine connect shuttles were upgraded to larger empty Irvine connect buses. The great park library concept is filled with extravagant amenities while children's study needs are an afterthought. And during the Oak Creek zone amendment discussion Mary agran's only inquiry was about the Jeffrey open space trail not city attorney melchings compromise of resolution 81 which protected Oak Creek in the first place those are the exact same priorities this budget says the city can't afford to fund and the payments are timed out conveniently over the exact years this budget is bleeding red and yet to balance these books the proposed solutions are cutting empty buses or dismissing extravagant library amenities they're cutting community programs and services and floating a new business tax on the very residents and small businesses that make the city run.

I'm just going to say it looks like a deal was made. Voter protected land that our own mayor admitted was designed to be tamper proof was rezoned twice unanimously in the past month and in exchange the city gets 96,000,000 from the Irvine company. So I have to ask was Oak Creek a backroom deal? Who called who first and when did this deal actually begin?

Thank you for your comments.

Mona.

Welcome.

Hi. Good afternoon. I just sit here and I think about everything that's going on. First of all, Mike, yes, you have a good idea. To do that, we could always provide Irviners with a sticker or a pass that tells the great park parking here. This is a freebie. And then make some kind of a membership type thing for also for the clubs to participate if they're Irvine based versus outside of Irvine. So I agree with that. James, I don't know why we start with motions. You literally did what some people do up here.

And, I don't know if you get turned off by it or not. And then what? You just spouted out a whole bunch of things that was the word salad. You want us to know what you're saying? Please attach it so that when we go on the city we can see it part of this meeting and see the document that you created. Because just spouting words that sound good doesn't do it. Yes, I agree. We need to have complete accounting. Yes, I want to see the balance sheets. I want to see expenses.

I want to see revenues. Absolutely. Because we can't have a budget created, want to include people but you don't give them all the information. So, we need to have that information. Everybody needs to and you guys have been privy to it. It's really cute. I'm gonna repeat this, James. You're the one who wanted to spend, or did, it was approved, $250,000

on

flags. What about the maintenance? What about all of that stuff? We have to start looking at what you guys are passing. All of you are passing all these projects. Look at yourself first.

Thank you. Your time is up.

Thank you for your comments. Russ? Welcome.

Good afternoon, counsel. My name is Russ Panavong. I'm vice chair of the Finance Commission. Normally, Chair Geller would be presenting the update, but he is not available this afternoon, so the honor is bestowed upon me. So last night, we were given the first privilege to see the deck by the director and deputy director. Great deck, by the way. Kudos to city staff. 39 pages. That's a large deck. One of the things I want to kind of let everyone know is our commission meetings normally cover about two items and we go normally about ninety minutes.

So one item is at forty five minutes and normally we don't have public discussions. I want to get perspective on how long we talked. So we had one measure. We normally talk about forty five minutes on bond issuance. We talked for twenty minutes because everyone knew how important this entire mid budget cycle update was. And for the rest of that, for almost three hours, we went through the deck. We had a lot of questions. One of the most important things that the commission wanted was detail. As you saw in the recommended action, we actually added that caveat of wanting more detail. So I just want everyone to know that all the commissioners, everyone that seems on board are wanting more detail in what we are planning to do.

So that's pretty much the update but I personally want to thank the council members for all your appointees. Work they are very professional I really enjoy working with all of them and I look forward to the next budget cycle with all them. Thank you very much.

Thank you and let me just take a moment to thank you as well as your colleagues for the extensive work you did last night. And all that as I understand that is intended to funnel into the more formal budgeting process here we have another thirty days or more until we undertake that particular budgeting process so presumably the detail that you're searching for will be made available to you well in advance of the finance commission's review as well as our own. So I think the request as I heard it last night and you repeating it today, I think that's being met with an affirmative, a responsive

Correct.

So that's going to happen, all right? And thank you again for your comments today and for the commission's good work last night.

Thank you mayor.

Thank you. Alan myerson.

Welcome sir.

Good afternoon councilmembers. I just wanted to say what I've heard today so far. During the presentation I heard that there were going to be four different audits if I'm mistaken that I heard wrong. I think some people are under the assumption that there are not any audits going on in the city and there are actually audits going on all of the time. I've been here forty years.

The city has a track record of handling their money in an appropriate way. I don't really think micromanaging them, Vice Mayor Mai, is really the way to go. From what I could hear from your motion, it was really strongly heavy on micromanaging the finance people. I'm not sure that's the right answer. I'm not sure that creates a high morale in city employees either.

Worked for the phone company one of the things they did when they got new software for training was they would send a couple of people for training and then they would have those people those employees train the rest of the employees thereby saving a lot of money on training. I don't know if that's what the city plans on doing but that's one thing they might want to consider it doesn't save a lot of money but it does save a little bit of money and every bit of money that saved helps. I appreciate councilmember carol's approach on the parking thing. I totally agree and I agree that our facilities are of high quality and we don't charge enough we should at least be charging enough to cover our own costs we shouldn't be subsidizing people that come from out of town to use our facilities that doesn't make any logical sense to me business wise. So that's about all I have to say.

Thanks.

Thank you for your comments.

Our next speaker is Joanne Slobodian. Joanne you may unmute your mic.

Hello, everyone. We don't trust this budget because we don't know what's behind it. There have been 17 budget related public record requests and several are still not completed. These numbers come from the city's own records. I requested a log of all public record requests for the past year. Noah Bischada with Voice of City filed three budget requests. None have been fulfilled. That's not just the public waiting. That's a reporter waiting. The city's own log shows 3,991 requests.

Only 92 are marked high priority. And when you look at the high priority requests, they are still open. Most of them are tied to Oak Creek easement and the budget. I filed one of my requests on 08/04/2025. It is still not complete. That's nine months. That's not the issue though. The issue is what is behind the delay? People are asking for information about this and not getting it. So you're moving forward without letting the public see what's really there, and that's what's behind the Oak Creek deal.

We're talking about a 176 acres at around $6,000,000 an acre that's over $1,000,000,000 in land value. Instead, we're looking at a value of 42,000,000 from the Irvine company coming back to the city. Those numbers don't add up. And that gap doesn't just sit on paper. It hits the budget. That's money the city loses and the public pays for, and we can't get the information to understand why. So, yes, something is very off. And when it looks like this, you don't guess. You follow the money. In Long Beach, the elected auditor undercover uncovered over 22,000,000 in errors, more than enough to justify the position itself.

I know people will say we can't afford an order. We can't afford not to have one. That's why we need an independent elected order, someone who answers to the public, not the system to review it. Because right now, we're being asked to approve decisions without being allowed to see the full financial picture. Something is wrong here. Thank you so much.

Our next speaker is Mikaela Montaner. Mikaela, you may unmute your mic.

Can you hear me?

We can hear you.

Thank you. You, mayor council, for this special meeting and for the opportunity to speak. Thank you also to the finance commission for the preliminary discussion last night and staff, of course, for all the work you've done to get us all looped in here. A couple of times it's come up in passing that the libraries are sort of a new expenditure that may be able to explain some of the numbers that we're seeing. And I'd like to request that in the discussions that come, we might dedicate some time to clarifying the financial position of our new library system, and specifically how our actual costs are comparing to the original transition projections.

I ask because when the budget shortfall was originally raised on April 14, we learned the new library system is only 65% funded. And then last night at the finance commission, it was briefly mentioned that existing funds had been maxed out to cover staffing and would not cover, quote unquote, additional libraries. This seems to be a stark departure from projections that were made around this time last year. With this being the case, I'm hoping the discussion to come might offer a bit more detail on IPL's financial position. Specific questions include whether IPL spending has exceeded its original projections, and if so, by how much?

What's driving the cost overruns? Were these overruns anticipated? And if not, why? Will our costs next year fall within the 9,000,000 allocation from the county? And if not, what is the updated projection? And further, what kind of balancing measures are anticipated for IPL in the short and long term? And if that level of detail is a bit greedy, I'm not available.

Thank you. Your time is up. Our next speaker is Michelle Johnson. Michelle, you may unmute your mic.

Mayor Egren and council members, I do think it is difficult to understand the full impact of these revenue and expense items without more detail, including a full variance analysis of last year to this year. I didn't see the fiscal year end 2025 audit on the city website. I know that the 2024 was posted 02/21/2025, but I don't understand why the current year is not posted. Stepping back, I think we need a full review of our internal controls, specifically as it relates to project management and budgets and cost overruns. So as the council approves items, the budget is established, if that project exceeds budget, when and how are these items monitored and reported back to council?

Well, I encourage the long view of matching revenues to expenses, I am not convinced putting what you're terming one time fees or items to be separated and sequestered. For example, development fees have both direct and indirect costs And there are timing differences on both the receipt of funds and expenses and the same thing with the Gateway project. A full outside cost allocation analysis should have been done prior to adopting any forward plan like that. And finally, as I recommended to the Finance Commission yesterday, this city needs to engage with their existing auditor, Clifton Larson, for a management letter to identify operational weaknesses, internal control issues, and focus on process enhancements, risk mitigation,

as

well as review any other items as requested by the council. This is done all the time in private sector, in public companies, and I think it would be the best next step for the city. Thank you.

Our next speaker is Ryan Dac. Ryan, you may unmute your mic.

Good afternoon. My name is Ryan Dac, Providing resident and vice president of the South Orange County Community College District Board of Trustees. I'm speaking this afternoon only as a concerned resident. As someone who provides oversight of $1,000,000 plus budget at the College District, I would like

to direct the council and the public to

the fiscal year twenty five-twenty seven budget, was released almost exactly a year ago. The budget summary in this document shows for the twenty four-twenty five adjusted budget shows a line at the very bottom that reads prior year surplus adjustment with a negative $4,700,000 in that line. This is the city spending $4,700,000 more than a drawn in and plugging the hole with the prior year's surplus as a one time solution to make the bottom line read exactly zero. No deficit, no surplus. This was likely done so that council members wouldn't bother the city manager's office.

When your budget lands out at exact zero, that is not a balanced budget. It is evidence of a shell game and part of why we're here today. I raised a specific issue with a member of this council over a year ago. The response I received was, and I quote, there is a zero at the bottom, so the budget must be balanced. When I followed up, I was repeatedly told it was a one time issue and not to worry. This is not how a world class city should be run. The residents of Irvine deserve a council that reads important documents, listens to stakeholders, and plans ahead, not one that defers hard decisions until they become harder ones. I hope today is a turning point. Thank you.

Our next speaker is Mari. Mari, you may unmute your mic.

Hi. Thank you. Thank you, mayor. Thank you, council members. Thank you for all you do as I know that sometimes this is a thankless job.

I also appreciate it. And also thank you to our finance commissioners as I know that they are hardworking as well. Thank you for the detailed informative slide presentation In that it appears that there were several sensible solutions that have been proposed by staff, so I really appreciate that and answered some of my questions on the budget. I do like the idea by council member Carol for the paid parking for, say, special events at the Great Park, especially events that attract outside visitors. There may be concerns perhaps by the Great Park residents that they'll see increased street parking but perhaps that could be solved as other neighborhoods in Irvine do with a parking permit program.

I do like the idea of increased user fees for sports facilities, especially by outside groups, travel ball groups who are usually coming in from outside of Irvine to use our facilities. And then I'll just bring up alcohol events. I know that there were some discussion in the past by counsel on this, But perhaps consider the type of event. I hate to stereotype here, but maybe for the more formal events like the Pacific Symphony where patrons are likely to want to enjoy a glass of chardonnay and not misbehave at the event. So perhaps that could be revisited as a revenue generator. Okay, thank you.

Mr. Mayor, that was all of the original speakers. It was one slightly late request. I'll defer to you as to whether or not to allow them to speak.

All right, let's, I guess, give that person ninety seconds, right? That'll and that's it.

That's it.

Alright. Thank you.

Thank you, mayor. And our last speaker is Vicki Johnson. Vicki, you may unmute your mic. You have ninety seconds.

Good afternoon. Every category of city spending and more cost of alternatives should be open to discussion to inform the public and improve decision making. It's very unfortunate that your vice president council voted to delete on March 20 the agenda item five four 5.5 that would have presented how an estimated $760,000 per year could be saved by moving the city's municipal electricity from OCPA to SCE. That's about an 8% savings on Irvine's municipal electric bills. There's many categories of streetlights, including AL dash two dash f that OCPA charges far more than SCE.

For example, an average of $250 for that type of streetlight per month, SCE charges only $190 That's a $60 savings every month for that type of streetlight. So thank you for considering this. Please don't cancel such discussions in the future.

And that is all Mr. Mayor.

Thank you. We thank the members of the public for their comments. There were a number of good suggestions. Looking at Dale and Jonathan here. Know you take notes.

There were a lot of questions asked that and suggestions made that no doubt enter into your further considerations as you prepare to present to the finance commission and to us as part of the formal budgeting process. Incidentally that hearing in June, if for some reason that runs along and we can't get that done, we would no doubt schedule a second meeting if that's required. Am I right Mr. Crumby? That's correct.

All right. With that, I'm going to defer to my colleagues for a second round here. Holding in abeyance for the time being the motion that was made by Vice Mayor Mai on the first go around. With that I'll recognize councilmember Carol first, followed by councilmember Treseder.

Great, thank you mayor. I just wanted to go back to a couple of quick questions and then make some comments. Dale, you also talked about two things I wanted to raise. You said that the staff would consider freezing certain positions, but not with respect to emergency personnel. Can you if you don't have that built out, can obviously, we're going to go deeper as the weeks go on and we come back. But what do you mean by emergency personnel? Who exactly?

So, those are our sworn officers, our police officers.

Okay. So, anyone in public safety that's a sworn officer is emergency personnel, is that what you mean? Okay. And the other thing that kind of went pretty fast and no one picked up on it was our negotiated our bargaining units agreements. Did you say that staff's proposing that we reopen those agreements?

Right now it's just initial conversations to start. Any sort of negotiation, of course, we would bring it to counsel.

Are you having conversations to reopen the bargaining unit agreements?

Not to reopen, just

Okay, because I just think only I could be wrong, not to interrupt you, but I think that's within our purview to tell you to do that. Correct. I could be wrong, but my vote is not to do that, and the bargaining unit should not be disturbed at this time. And I'm happy to evaluate everything, but those were agreements that were made at the time that they were made. So I will not be in favor of that.

My remarks with regard to the motion, I just want to thank by thanking you Dale and your team and our city manager Sean Crumby. You know, the work that went in today's presentation shows plain and simple, and that deserves to be said out loud from here to you. Irvine is in a strong fiscal position. That is the truth. It didn't happen by accident. It happened because the city's been managed carefully, year after year, by a lot of people here in this room and elsewhere that take that job very, very seriously. And we should say that plainly. But a strong house today is not the same as a strong house ten years from now. There's a projected structural deficit in the outlying years. It's real.

I looked at it. It's not a rounding error. It's not a forecast that we can shrug off. It's basically a bunch of COVID money from the Biden administration that was the city here took and ramped up and spun up a lot of different bureaucracies, and now that money goes away. And that's what Dale's chart shows, you didn't miss if you missed that.

This is a light on a dashboard, and you don't ignore a light on a dashboard, and the time to look under the hood is now, while the engine is still running well. And let me repeat, the engine is still running quite well. Here's the thing, the worst decisions in government are the ones that are going to be made late, late when the numbers are worse, late when the options are never, or fewer, or late when the options are painful instead of prudent. We are not late. We are early.

And early is going to be the whole ballgame here. So, I fully support the Vice Mayor's motion. A lot of work went into that. It's very detailed. These are the types of things that the city can run and get us the information on, bring it to this council, on schedule, bring it to the public. Residents of Irvine pay the bills, and they deserve the full picture. And we're always learning, always learning. I will plainly admit that I did not realize that we do a staff allocation and I've been the chair of the Great Park for years. So when I go around saying that the Great Park neighborhoods pay for all the park, I'm wrong. Because $20,000,000 of that is paid by my neighbors in Chuttle Rock too.

And that's an important fact, no one was hiding it, I'm just saying it's, we're all in a learning process. We were elected to understand that driving this long term imbalance and to make the choices on sound footing are for the long haul, not the next budget cycle. This has to be for the long haul. Given the health of our finances, given the affordability crisis that squeezed families and small businesses in this town, raising taxes, or broadly increasing fees on our residents are not on the table for this council member. They are not.

Not a first move, not a second move, not any move. Before we ask the people of Irvine to pay more, we have an obligation to live within our means. And that's it. When these budget conversations came up, my first concern was what the city is here to do. Not the special council member ideas and events we've all voted for and we put through and we spent a lot of money on it. We're going talk about that in-depth next Tuesday. And not the council events that we have, like the one last weekend, or the next one coming up, or the one after that, the '20 something events that we have. They're wonderful events. I love them. I love them.

But this city is here, first and foremost, to protect the 318,000 men and women that live, and children that live here. My first concern is the public safety of every person that lives and works and those that come in here and have recreation here in the city. I do wish that they would pay a little more at the Great Park, but we'll work on that. But I would not support ever laying off anyone wearing a uniform and protecting Irvine. Not one.

The men and women of the Irvine Police Department have kept this community the safest state in America for over twenty years, and that's going to continue. That is not luck. I think, and I could be guilty of this too, I think that that's something that many of us take for granted. And tonight reminds me that we are not going to take that for granted. That's the first thing that this city needs to do.

It's the first priority as a fiduciary of the city that I have to be here thinking about. The second are the public works of the city. We don't think about the roads, do we? Do we think about the traffic lights, the timing, the amazing traffic center we have upstairs? All the AI work that's gone into those boxes that sit there, those intersectors that none of us think about trying to get one additional half car through the left pocket intersection and the turn, and the protected left hand pocket. No. But that's what we're supposed to do here because traffic's a major concern. It gets pulled years and years and years. People need to there's a lot of people here. It's pretty dense.

We need to move people and cars and other modes of transportation through our city. So, that's number two, the public works. That's right. And number three? Number three is the recreation as our parks, starting with the Great Park and every other park in this city.

And after that, we can talk about the other stuff. So, let's do the work. Let's get the facts. Let's get the long term numbers. Let's get clear eyes. Let's protect what matters most. Let's add to the fiscal audit that three of my colleagues want to have, and Sandy and Carol, looking at you, I will be asking for the Office of Inclusive Excellence to be listed on a list of about 10 things that Council Members Lou, Goh, and Tresider were asking to have a fiscal audit on. That office will be on that list. It wasn't, I have about seven or eight other things myself, so thank you for bringing that up. We'll see if they agree to put that on their list.

Let's get those facts, let's protect what matters most, let's make the responsible call now, while we still have the room to make that call, and not in a crisis. And I just want to point out finally that this city has millions and millions and millions of dollars in reserves. And the asset account and the city reserves that were put together when the former mayor was here and the current mayor was here, before before any of the rest of us were here. Those reserves are still there. And I do agree with the vice mayor, I think those things can be chewed up in an instant if we're not responsible. And I look forward to that process as unravels and unwinds and rewinds and all that good stuff. You know, I fully support this. Thank you, mayor.

Thank you councilmember Carroll. Councilmember Treseder.

Thank you.

Yeah I appreciate all the work that you put into this presentation and appreciate the information. I agree with council member Carol that this is a very important moment for us to be looking ahead and making sure that we have a balanced budget even a few years out. I recognize that the finance commission wanted more detail, which is what we heard from the representative here about the budget. And I do appreciate there was some detail in this presentation. I was particularly interested in the details for how we would close that projected deficit of the 30,000,000 and up to 47,000,000 up to five years out.

That is what I really want to see. And I actually I'm a bit curious for the I know that you had your executive team meeting Mr. Crombie and you all were discussing how to cut back on expenditures and I really appreciate that. Did anything come out of that of substance that you could share?

Thank you for the question. Yes, a lot of work has gone into from the staff. And I'd like to say a thank you to all of the staff for the work that they've done over the past few weeks. Since the April 14 direction from councils, that's three weeks ago. During those three weeks, we did have an executive team retreat on April 22.

And coming out of the April 14 meeting, each department was directed by me to come up with scenarios on budget cuts. And so those scenarios were basically 51015%. And we as a group collectively went through those scenarios and came up with the plan that is in front of you tonight to bridge the $9,000,000 for this upcoming year because that is what's on our plate for June 9 to get through. In terms of the $37,000,000 yes, we talked about a lot of ideas. And I apologize that there's not a lot more detail.

However, I think the strategy was to come up with those ideas and then flesh out the details both with the public and counsel as we enter into our upcoming budget season rather than sort of make those just in vacuum at one session. I also followed that up with conversations between the city manager and the entire city team. We had sessions with the city manager where we openly talked about the budget so that they know as well. So it's been a lot in the last few weeks, and we will continue to work to provide definition to bringing forward a balanced budget in the future.

Thank you. I appreciate these actions. And I think it's very wise to ask your department heads how they would cut the money. It's easy for me to sit up here and think about things to cut. But you all are, you know, the boots on the ground and you know where you need the money and where you have the money.

And so I want to consider strongly what the staff are recommending, especially for these longer term deficits. In terms of myself and the council, yes, we do have our own sort of passion projects that we bring forward. And I think that in addition to asking the staff to cut back on their budgets, I think it might be wise for us to cut back on some of our own spending as well. I would hope that we would each volunteer to cut certain things that we have in the past promoted. I have, for instance, promoted an event or two that I really appreciate.

But if we don't have the money for it, we don't have the money for it. And so I'm certainly willing to reconsider that for myself. And I'm hoping that other council members might be willing to do that too. I also also want to emphasize that I agree with councilmember Carroll about not cutting any public safety positions. I think for our residents, if you ask them what they value about Irvine, a lot of times safety is the very top of the list.

And it is also important to me to have public safety. And my guess is that that also would be a priority for most or all of the members of this council. I think it would be a good idea for us to have more conversations about what each of our priorities are for the budget. I'm sure that we agree on a lot of things. Some of the top things that council member Carroll is mentioning, I agree with too. I think that's an important exercise to go through. And I'm out of time, so I will continue later.

If you'd like to take a couple more minutes now, this would be appropriate to do so.

Oh, you're kind to offer that. Thank you. But I'll let councilmember Go first.

Okay. Next is councilmember William Go.

Quick question for dale I just want to clarify the 8% allocation for city staff towards the Great Park budget and coming down to 6% that it is a payment Is it charged like a management fee? How does it get transferred over?

So there's a couple ways. So there's the actual allocation of bodies, right? So there's direct charge. People actually work in the parks. But then there's a component of that that's overhead.

So there's certain staff members that put some time into helping plan the park, planning and helping support the management of the park. That's changed a lot of late when we've gone from transition from the planning stage to the development stage. We've developed a great park team in the process where there's a lot more direct charges to the park. So we had to reshuffle how we allocate it because we have people now allocated to the park directly and exclusively are being paid out of the great park because they spend 100% of their time. So we had to right size the allocation for those maybe administrative positions where in the past they had a percentage allocation.

Some of them would be 100% dedicated. Some of them some others folks we had to ratchet it down. Maybe they were spending 50% of their time before. Now it's 20% of the time. The other component of it is now we're engaged in development phase, right?

So there's some staff even that are committing their time to project management. It's capital work in the park. And those get charged to the actual projects that are done, which is rightfully charged to the development. It does come from bonding that we get when they come to counsel and they ask, okay, here we're bonding for development of the heart of the park. Now it's transitioning to be reimbursed from the bond.

So just short to say that there's a lot of complexity in the allocation and the right sizing is just to make sure that we're charging the right percentage of people if somebody's 100% allocated a park now now that's moving there's a lot of moving parts if somebody's working on the project part of the park or certain other areas, the cultural terrace, that we're charging them to appropriate projects because they're project based.

Is council member Carroll's statement that the general fund does pay into the Great Park accurate? Or is it a?

So it's slightly nuance so we do have other unrestricted dollars that gets generated from the park so it's not per se tax dollars that's from the general public it's it's revenues that are produced from running the programs. It's revenues generated from

Jayla, if I might interrupt. Yes. The answer is no. There is no general fund monies that are being transferred to the park.

Correct. Yep. In short. But, yes, just to have that nuance is that there is unrestricted dollars that are generated from the park.

Yeah. Thank you for that. You know, we appreciate for all the science you guys did to try to balance this. As you guys know, the Great Park's a little bit complicated because the CFD funds pay for the development, but in exchange, the whole city does get to use it as well as the county and the nation. So really appreciate you guys trying to balance that as much as possible and the second comment I had was with parking so the issues with parking is it becomes cumbersome to start administering so as you guys have heard I believe OC vibe Honda Center and a lot of these concert venues they just charge the parking kind of inlay with the ticket and that really prevents of the administrative hassles and I live at the Great Park and the last thing I want is people parking in my neighborhoods just to avoid the parking fee I think eventually some of those homes comes pretty close to those fields and events that people will start parking in the streets and then we get into chief over here and have a nightmare of trafficking and policing so I think there's going to be a good balance somewhere but I'm more of a proponent that we inlay the parking fees to the usage fees or whatever special events that might be a clear method.

Thank you. Next up we have councilmember lu.

Again, we're all talking about parking. I know that that's coming up. I think that's a great idea to include that. And obviously, we're trying to balance out whether it's fair for the residents at the Great Park and also Irvine residents versus somebody coming in. Speaking of that, I had asked the question, I believe the initial cost will be quite substantial, right, to implement charging for parking, or whether we build a structure or something like that. Is that still the case? And do we have that kind of funding?

So, staff is in process of doing a parking analysis that, yes, we'll charge for parking. And we're looking at different models to represent the interests of our residents and great park residents. It's also there to manage parking and how people get around the park. At Build Out, the park will have almost 14,000 parking spaces without a structure. So I think at our initial phases, there's no plan for a structure yet. I think if the development ever got dense enough, we may be able to look at that in the future.

I want to echo what my council colleagues have already mentioned. Obviously, we're looking at public safety. We're looking at public benefits. Also, what was the other one? I believe Carroll has very succinctly.

Okay, recreation and public works. Yes, so all quality of life issues and safety. So thank you for looking into that. But long term structurally, my question, I guess, will be it is hard to do like a long term impact prediction, obviously. But would it be possible for us, if when we're looking into it, to do like a five year, three year, five year, ten year, or something like that, that will make it a little more not predictable, but obviously like, you know, just something that we will look into long term just to see what our policies will decide on.

It will impact our future expenses since we're looking into a structural change. That's just a suggestion. And I am not writing out any other sources of revenues, especially with, I think, with some of those who have been brought up that we are subsidizing things quite a bit in user fees. And I do think that we could at least get to a cost recovery if that is possible, especially like councilmember Carroll had mentioned, that for profit or outside nonresident users could probably share a little more of that. That will be something that I would look to see, if that is all at all possible.

But I do agree that I don't want to overburden the staff and micromanage in any way. So I guess the other question is, can you explain a little more on the audit part of that? I mean, I know we're doing audits, but I guess we're not all familiar with what the process is or has been.

Thanks for the question. So we do have an annual audit that comes in every year. They comply with the government accounting standards to review our records. Again, they're here for upwards to six months going through transaction detail with our staff. A lot of my staff are committed to providing those records. So they're pulling invoices. They're looking at our GL, our transaction data. They're looking at our internal controls. There's a statement about our internal controls. There's no weaknesses in our internal controls from our finding that's been strong for many, many, many decades.

And we're very proud about that. They issued a clean opinion, like I shared earlier. And these are there are certain standards that they have to comply with. They have professional licenses that are authorized to be able to provide those opinions. Not anyone can just provide those opinions.

They have a professional code of conduct in order to be able to provide that opinion. And that's something that we do every single year. And we take that audit seriously. We have a large amount of our staff resources that are spending countless hours being able to provide them the information that they need to provide that independent third party opinion about our financial situation that was presented fairly, it's presented accurately.

So I guess councilmember Carroll had already alluded to the fact that councilmember Trusieder, councilmember Gowen, I had recently just submitted, I mean, that not come to ask for an audit, a targeted audit, which I think will make more sense. That be I mean, obviously, I see the benefit of that. But that will be something that will be in addition to the general audit that we're already doing.

Correct. If there's specific interest to look into a particular area, diving deep, that would be a separate engagement. There was multiple ideas, areas of review that were mentioned. That would definitely be an additional cost in order to do that.

Yeah, and obviously we're not going to discuss that at this meeting. But I just want to, I guess, reiterate the fact that that is coming up and that is not something that is unusual. And that's all. Thank you.

Thank you, Councilmember Lu. Think councilmember tresidder did you want to be heard now or should we. I' happy to wait. Should we just turn to councilmember martinez franco I don' think she's had another opportunity to speak. Why don't we call on councilmember Martinez Franco and then councilmember Tresidder.

Yes thank you. I wanted to ask a question that occurred to me that we're having union negotiations for 2030. And we are starting those union negotiations usually 2028. Right? Am I correct?

Conversations would start prior to the expiration of the contract, correct?

Okay. So with that said, in your forecast, I want to make sure that those unions are not shorthanded because of the budgets. I think we need to work around their needs and whatever the cost of life is not going to go any lower in the future. And I think we need to be working with them and need to be anticipating all the rise in cost of life for all the unions that work for our city. And I feel like the unions is what make our city a very functional and a better city, including from all the unions that the other council members have mentioned from public safety to parks and recs, public works, and the city workers in here.

So I just want to make sure that they are well taken care for the union negotiations coming up. Thank you.

Thank you councilmember Martinez Franco. Councilmember mi somehow this is showing you as heavy bump down councilmember traceders that by request?

I'd like to speak. Right.

It'll be quick, it'll be quick.

I'll turn to you at this time. Take your time and then council member Treseder.

Thank you, thank you. And I want to address the staff, Dale in particular. You know, my motion is not to micromanage you in any way, shape, form. It's just to get answers that many of us have asked and many of us are questioning is how we got here and a little more details on it. Don't want you to feel that you're being micromanaged in any way. You guys are doing a wonderful job. We just need a little more details. So I just want to be clear about that. That's the first point. The second point is that as council member Trusieder mentioned, if we knew that we were in some sort of deficit or we were facing some sort of budget issues, I think most of us here would have scaled back on a lot of things.

I definitely would have. When I learned about this, I actually did make a call and tried to, one of my initiatives was a Flags initiative, I tried to pull that back. But unfortunately, everything had been ordered and was being placed in there. So I just know that we can do better. And I know that there's a lot of restraint that will be placed upon a lot of us and we'll place the restraint on ourselves to scale back as Councilmember Birchasieder mentioned too. So I just wanted to mention that to everyone we should be, we will be working together and resolving this along with the staff as well.

Thank you Vice Mayor Mai, Council Member Treseder.

Thank you. Just to follow-up on the motion, I support the motion and the reason is that I do want more detail about how we got here, where we're going. I think that that is aligned with the remarks we've heard from the public. I also want to ask on behalf of one of the commenters about the financial situation with the library. If Mr. Cumbie wouldn't mind please sharing. To what extent do we have funding for our new library system?

So the library system, the deal has been made with the county is that we take over three libraries, which we've successfully opened at this point. And out of the property tax funds that are received, the city receives, I believe, half of those funds, which I believe was $9,000,000 this year and next year goes up to $12,000,000 Those funds, and feel free to jump in if Chris Lam is here or Dale, but those funds are enough to operationally pay for the staff, the utilities, the lights, all of the costs at those three libraries. There isn't a lot of funds left over to accommodate expansion, both capital and operation wise for the system.

Okay. So just to make sure I understand correctly, I think at some earlier meeting we had you said that the library was only about 65 funded. Has that changed?

I don't recall that number. I apologize. I don't know where that came from. Maybe I said that and didn't realize it was talking about the libraries or something.

Okay. All right. So I agree with these, the motion. And I do want to say that I want to talk a little bit about our last discussion about the budget. It does concern me in sort of a more systemic way and that as I'm listening to the remarks, the presentation here from the staff, I do have in the back of my head a question of is this what the staff is really recommending or is it have they been instructed or influenced to present it in a certain way to us.

And the reason that I am concerned about that is because we found last time, our last meeting, that the mayor had unfortunately directed our city manager in how to brief the rest of us about the budget issue. He also directed the city manager to move ahead with a survey of the residents about whether they would like new taxes and so forth. He did say that he talks to the city manager five to 10 times a week. And so it does really make me wonder how much of this, what we're hearing, is really from the staff or if it is indirectly from the mayor. And I do want to point out our city law, if Mr.

Melching could please help me, section one-three-one 109 council manager relations, what's that from?

Sorry about that. Council member Treseder, that's a section in title one of the municipal code.

Okay, municipal code. Okay, so part of this section says that the city manager shall take his or her orders and instructions from the city council only when sitting in a duly convened meeting of the city council and no individual council member shall give any orders or instructions to the city manager. And I believe the idea behind that is that these discussions need to be held out in the open and in full view of the public in general the city has a council manager governance framework which means that the council as a body directs the city manager to do certain things and it's the city manager's job to execute. Now if you have individual council members coming in and directing the staff on particular things then that essentially is like a backroom deal. It's being done out of the view of the public and out of the view, in this case, of at least some of the council members, including me.

And I want to emphasize that I don't hold the staff at fault at all for following what the mayor may ask of them. I just know from my personal experience with the mayor, He can be pretty harsh with people. And we've seen that here on the council dais. And I would be surprised if that didn't happen with the staff. And so I don't think it should be the staff's job to try to push back and hold off individual council members who are giving the staff instructions.

I think it should be incumbent on the council members to follow the law and respect that it is the council as a body that gives instructions to the city manager. And when that is usurped, then that does put me in a position where I have a hard time knowing whether what the staff is saying is what they really want. And that is not a good situation to be in. So I just want to let the public know that this is going on behind the scenes and that I'm very concerned about it. And that is also one of the reasons that I'm supporting the vice mayor's motion. Thank you.

Mayor? If I might have a moment, to address a few things. I wish you would. There was conversation a few weeks ago regarding how this item came to be. And I do have a timeline of briefings to the council regarding the finances in my entire time as the city manager.

And the shortcomings that I've had, I've owned. And I continue to don't hide from that. I continue to own that. I just would like to say that the deck that was presented tonight is 100%, 1000% mine. And everything in it I stand behind. I would say that none of the council members got to see this deck in advance of the meeting. It was sent out to the commission and the entire council all at the same moment last Thursday. We'll continue to work on all these items.

Thank you. Appreciate that.

Thank you. Let me offer a few comments at this time councilmember lew if I might. I' not going to dignify totally unsupported accusations with a point by point response. I do pride myself on having a good relationship with the city manager as I hope and trust each of you do. And I do take every opportunity to pose questions, make suggestions regarding this entire budget matter.

I've just urged Mr. Crumby and through him Dale and Jonathan and others to consider this, consider that. I've asked endless numbers of questions about the economy, recession, inflation, what's in, what's out, what's accounted for, what's not, and so forth. I have staff that' involved in that as well and I would suggest that each and every council member avail themselves of every opportunity they have to speak with the city manager and through the city manager speak with staff regarding the budget or any other matters of interest. I do not issue directives.

Mr. Crumby I think can vouch for that. I don't go around Mr. Crumby and go to subordinate staff. That's not how

I

roll. That's not how any of us rolls here. So these unsupported accusations, I think, detract from what is otherwise been a useful constructive process here. Let me say a couple of things about the budget. I think, well I'll speak to the motion in a moment, but I want to make it clear while we talk about not filling vacancies and managing the staff and doing certain work with other people and so forth.

I want to make it absolutely clear as far as I can recall it has always been the position in our city. We don't lay off people. In the best plan city in The United States Of America, we plan for our workforce so that they don' come to work in fear of being laid off. Do we sometimes ask them to move over, fill another position, do this, do that, that's different. It's not just the police who shouldn't be subject to any layoffs.

It's the rest of the employees as well. And I think it's a source of great pride should be for all of us throughout the fifty five, fifty six year history of this city we have never had a workforce layoff. We've organized ourselves accordingly. Regarding audits I do think you ought to give us back some specific information about all the audits that are conducted routinely multiple audits at every stage. There was talk and I guess it will be on our next council agenda talk about a forensic audit suggesting malfeasance or whatever.

I think that proposal fails to understand all the audits and measures that we undertake to see that there are no unappropriated expenditures. There are no unaccounted for funds. We win awards year after year for our financial management. That's not to say we should relax in our vigilance, but I think it's important for people to understand we don't win those awards because we're not doing enough audits. We win them because we have all the mechanisms in place.

Might there be a request for specific targeted auditing of this or that or the other? Absolutely, those are appropriate. As far as the motion goes, listening to it and reading it, it seems to me about sixty, seventy, 80% of this is being done as a matter of procedure by our staff as things exist now. And, it does have all kinds of things in here. The request for more detail is great.

But, the this, the that, the other, within a certain timeframe, sixty days, it is micromanaging. In matters of budgeting over the years I've learned we've had such a success with our budgeting process over the years because to tell you the truth we're kind of led in the budgeting by our city manager and our staff, our finance staff, they take the lead. And we respond to that historically as a practical matter. The idea that we can give all kinds of directives here as kind of a substitute for what you're already doing just seems to me to be misplaced. What I would suggest is that each of us avail ourselves of the time the opportunity perhaps accompanied by our respective finance commissioners and our own staff our own city council staff, mayoral staff, and sit down with our budgeting folks here and tell them what you want and when and so forth and I'm sure they will be responsive.

That's the way we work on a budget together rather than give directives from on high as I say much of it in ignorance of what we're already doing. So I don't support this motion. I do think this is a good working document for the vice mayor or anyone else to meet with you about. We have weeks ahead of us when a lot of these details and specifics can be addressed. And that's the way we put together a budget that reflects all of our respective views.

So those are my comments. Whether this motion passes or not, my fear is if it passes, it is so directive in its nature, it's going to take both of you and a lot of others a lot more time rather than just sitting down with you and talking with you. That's my view. All right. Councilmember Lou, then councilmember Tresidder, and then let' wrap things up at that point. Councilmember lu.

Thank you mayor yes I would love to wrap it up it' my daughter' birthday so she' waiting for me to have dinner with her. And yeah, I agree that we should probably just sit down and listen, which I did request. And thank you for coming on a date that you're not even supposed to be here to educate me on the budget a little more. And so I just have a few points to make. Well, I think councilmember Carroll made a good point about not recommending to renegotiate the workers' contract right now, the employees' contract right now.

One of the things that I want to consider is when do our current contracts expire? And are there any issues with the city being exposed to any additional liability if we want to renegotiate early?

I'm going to call up our assistant city manager, Brian King, to address that question. Okay. Thank you.

Hi. Thank you. Mary Grinn, members of city council. Brian King, assistant city manager. Our contracts expire in June 2029. So we'd be negotiating with our labor associations a few months prior. So, we'd probably be reaching out to you for direction on that in, I'd say, February 2029.

Okay. And the current contract, don't remember now, but can you remind us if there is any early negotiating penalty for the city?

There's no penalty or reopen or that's triggered unless the labor association or the city council as councilmember Carroll indicated earlier gives us direction to reopen we won't be reopening.

Guess that will be something that we need to consider. Don't want to just give directions without information. Thank you. Think councilmember Tracino made a good point. I would highly encourage all of our colleagues to consider the cost when we're introducing items, which we tend to ask for a lot of these.

But I want to mention that this current budget most of us on the diocese here have no input. We inherited that but that' just the nature of the city council when we get elected and people get turned out. Do want to also remind myself that whenever we do that we' consider councilmember montina sprenkel mentioned look for sponsorship. Yeah, and again, I would like to say that I don't want to write anything out yet, but obviously with the current economic situation, it's probably not a great idea to ask our residents to put in more things are already very unaffordable as it is. That is one of the things that I want to consider when we have options come back to us and that' all I want to say thank you.

Thank you councilmember lu Councilmember Treseder, and then I see Councilmember Martinez Franco wishes to be heard as well. Councilmember Treseder.

Thank you very much. So I do appreciate the mayor's response to my comments. He did say, as he often does, that what I'm saying is unfounded. So I anticipated that he would do that. So we put together a video that you can find on YouTube, the channel Irvine Council Member Moments.

And it does have a video of all the actions that I was talking about. It shows our city manager saying that yes, indeed, the mayor did direct him on how to brief other council members. It has the clip of the mayor saying that he calls a city manager five to 10 times per week, which I think is a sign that there's some overreach there because, again, we're not supposed to give direction outside of this body. The mayor does have some extra responsibilities. Like he has to preside at ceremonial functions and put together the agenda.

But it's hard for me to imagine that that requires five to 10 calls per week. You can imagine if all seven of us did that, the city manager would have to be fielding 70 calls per week. He wouldn't have time to do his work. But I think the rest of us don't do that. I do try to respect the city's law in this respect.

So definitely, if you're not sure about whether what I said was true or not, check out the video and you can see it yourself. Now, we have mentioned, some folks up here have mentioned the agenda item that Councilmember Go and Councilmember Liu and I submitted today. And this is for the next meeting next week. And we are going to talk about doing an independent audit of specific city projects. We want it to be targeted.

So just to give you a preview, the proposed projects we would like to evaluate in more detail is how the federal COVID money was spent from 2021 to 2025, city hall renovations, including the parking lot and 3rd Floor from 2022 to 2025, the six month severance packages offered to city staff in 2022, the cost of the 2025 state Of The Great Park, the proposed Swift Cities gondola project, the purchase of the All American Asphalt Plant, the transition from the Orange County Library System to the establishment of the Irvine Library System, the failed purchase of 17,572 and 17,622 Armstrong Avenue. That is in the agenda. And I'm also happy to add the DEI committee, as council member Carol suggested. And I'll just say that, yeah, this is just really uncomfortable. I don't want to have to be talking about concerns that I have that are systemic that might be going on behind the scenes.

It would be so much easier just to let it go. And I just think it's really important for the public to know about it so that we can try to air this out and make sure that if there's anything that was happening in the past that may have put us in a situation that we correct it going forward. Thank you.

Councilmember Martinez Franco I think we'll be able to end the various rounds with your comments. And then if there's a go forward on the motion, we'll do so after you have a chance to speak, all right?

Right. Thank you. Wanted just to address I haven't addressed the motion. I do appreciate the length of the motion to Vice Mayor Mike, all the effort that you put into that. But I'm concerned that this is something that city manager, should be doing already.

And the only thing that I do appreciate the most is the fact that now you are going to be teaching us for to be the newest council member. I know that all these procedures that Vice Mayor Mai listed in his motion probably stay behind doors. Probably those are procedures that you already do with your staff, and you just bring us the digestive information so we can just process it faster. I actually am curious to learn about all these things. And it's going to be a great I see it as a great opportunity.

But to the point to the mayor, I feel like this is the work that you've already done. I would like to make a friendly amendment to the maker of the motion, if that's Okay, that instead of sixty days, we'll give them ninety days.

Thank you for those comments. So just to be clear, you're just changing it from sixty days to ninety days? That acceptable?

Was there a second who seconded the motion?

Mayor you did.

I

did. It' all right with me. Yes, I did.

All right.

I think that does it there' a motion. I just want to declare for the public to hear that I' going to be voting against the motion I don' think there' a need for a formal motion I would just encourage my colleagues instead to use the vice mayor' submission and any of their own time and staff and finance commissioners to interact directly with the city manager and with dale and jonathan and others in finance. That' why I will be voting against this. With that would the clerk please call the roll.

Councilmember carol yes councilmember go yes councilmember lu no councilmember martinez franco yes councilmember trussieder

yes

vice mayor mye yes mayor agrin no carries five to two with councilmember lu and mayor agrin voting no

thank you I want to again thank everybody for their participation this afternoon I think we learned a lot there were some creative and useful suggestions many of them made. I know our staff will be taking all this into account as we continue to work through the budget process. With that the meeting is adjourned.

We don't need a motion, do we? By consensus, unless anyone agrees or disagrees. Anybody want to stay?

I want to keep going.