City Council - Regular Meeting

Go ahead and call the regular meeting of May 6, 2026 to order at 6:18 p.m. Roll call, please. Council member Bregman here. Council member Nakanishi, Council Member Craig Hensley here, and Mayor Prom Hodi here, Mayor Yopez. Thank you. Item C2, announcement of close session. Mr. City attorney.

Yes. You have three items this evening. The first is actual litigation pursuant to government code section 54956.9A one case. People of the state of California and the city of Loi, California versus M&P investments at all. The second matter is actual litigation pursuant to government code section 54956.9 and this is by two applications Christian Kaufman versus uh city of Loi workers compensation case ADJ18033478 and a second case A DJ15158044. The third matter is public employee appointment pursuant to government code section 54957B one position city manager recruitment.

Thank you. Is there any public comment on close session items? No cards and no members um of the public in the audience. Great. Close the close session at 6:19 p.m.

Good to go. We are returning from close session at 7:01 p.m. City attorney, can you please uh do a readout from close session? Uh there are no matters to report this evening. Thank you, Madam City Clerk. Uh, roll call, please. Council member Bregman here. Council member Nanishi here. Council member Craig Hensley here. Mayor Promhothi here. And Mayor Yopez is joining us momentarily.

Thank you. First, we have our invocation by Reverend Betsy McElroy. Thank you. Thank you, Mayor BM, the council members and community members. I am Reverend Betsy Mackbury from the Episcopal Church of St. John the Baptist. Let us pray. Gracious and wise creator, we gather tonight with gratitude for the opportunity to serve the city of Loi. We thank you for bringing these leaders together to represent the diverse voices, cultures, and faiths when within our city. We give thanks for community members here to speak on behalf of those they serve. We ask for wisdom and understanding to guide the discussions and decisions made here tonight. Grant our mayor, our council, and the staff the grace to listen with open hearts, the courage to act with integrity and the strength to serve with compassion. Help us to set aside personal agendas and work in unity, focusing on justice, fairness, and the common good of all our neighbors. May the outcomes of this meeting strengthen our community and bring peace, growth, and hope to all. We trust this meeting to your care. Amen.

Thank you. Please rise for the flag salute. To the flag of the stands, one nation, indivisible, with liberty and justice for all.

First, we have a series of uh proclamations. The first is for National Small Business Week and here to accept is uh Sarai Campos from Mocha as well as Luis Aguilar, our economic development director. if you don't mind coming to the podium as I read through these National Small Business Week. Whereas the city city of Lodai celebrates local small businesses and the contributions that Loi residents, entrepreneurs, and innovators bring to our local economy and our community through creativity, vision, and ingenuity. Whereas, according to the US Small Business Administration, there are more than 34 million small businesses in the United States. They represent 99% of companies with paid employees. Small businesses are responsible for 61% of net new jobs created since 1995. Whereas small businesses employ 45% of the employees in the private sector across the US, almost half of America's workforce. Whereas every $100 spent at a small business in the US, $68 stays in the local community. And every $100 spent at small businesses creates an additional $48 in local business activity as a result of employees and local businesses purchasing local goods and services. Whereas through resources and guidance offered by the city to lowincome minority veteran women and all entrepreneurs, the city of Loi supports our local businesses that create jobs, boost our local economy, and preserves our local neighborhoods. Whereas advocacy groups as well as public and private organizations across the country have endorsed the week of May 3rd to May 9th as National Small Business Week. Now therefore, be it resolved that the city of Lodi does hereby proclaim that week as National Small Business Week here in Lodi and urge the residents of our community and communities across the country to support small businesses and merchants during this week and throughout the year signed this sixth day of May, 2026.

Thank you. Thank you so much. Hello everyone. Thank you for having me tonight. I truly appreciate the invitation. Um I'm so happy to be here. Uh I moved from Mexico actually five years ago. even challenging for me start a business from scratch which I'm so happy because I'm surrounded by nice people and finding support around so I'm in a street w which it been kind of hard to me bring traffic to that way but still I love the challenge and I've been enjoying a lot with the support of the city so this business for me I start from scratch I used to do just shows markets and streets events and I just opened my business nine months ago and something that this room is for me something really important. I've been having a really good support and answer from my people from Loai which I'm happy because it's not just Lorai, it's the surrounded areas which makes me really happy and hopefully I can just keep working along with you guys and we can just keep getting that promote from the chamber which is really good and especially from small businesses that we really need to be here and be outside. So, thank you so much for having me here tonight. Just to let you know guys, my business is located 210 North Sacramento Street here in Lori. So everybody's more than welcome to stop by. I do jewelry. So it's a huge variety, high quality tie tree. You will find really nice stuff. So everybody welcome to stop by. Thank you. Uh, thank you JP Ducet, president, CEO, Loai District Chamber of Commerce. And

perfect for Mother's Day, right Sarai? I mean, if you're a last minute shopper like some of us, not naming any names, but uh uh stop in Sacramento Street and and see Sarai's beautiful shop, but uh as a me president of the chamber, we're 85% of our members are small businesses uh located right here in Loi. Uh it's the life blood of our community. I was a former small business owner and know the challenges uh that they face every single day and the love and commitment it takes uh to run a small business and make it successful. So, thank you for this recognition. Thank you to Luis uh and his support of our business community uh and all you council members uh as well. So, thank you very much.

JP, you want to mention the walk tomorrow? Luis, you want to mention the walk tomorrow? So, tomorrow we're going to be doing our third annual uh small business walk and we will be walking the Kettleman Lane corridor. Uh we're going to visit some of the shopping centers there and really trying to just get in front of businesses and let them know uh that the city's here to help as well as the chamber and other resources. And it's usually a very fun and u great event to for people to volunteer and be part of. So, thank you Up next, we have a proclamation to proclaim the same week, May 3rd and 9th, as National Travel and Tourism Week at Loi. here to accept this proclamation and say some words as Wes Ray if you wanted to come up to the podium as I read this National Travel and Tourism Week whereas the travel industry is essential to the success of every industry and will continue to be a critical part of LA's economy development workforce whereas travel is an economic powerhouse for every state and destination across the country with an economic output of three trillion dollars supporting 15 million American jobs. Whereas traveling spending supports vibrant safe communities in Loi and across the US by generating 92 billion in state and local tax revenue in 2025 to support essential services such as education, emergency response, public safety and more. Whereas travel enables success for all industries including manufacturing, agricultural agriculture, defense,

healthcare and more. Whereas in 2024, direct visitor spending in Loi was $277 million, generating more than 20 million in state and local taxes, supporting over 2100 local jobs. Whereas one in every 11 jobs in the US depends on travel, making it critical a critical driver of the Americans American economy and a force for connection and opportunity. Whereas travel is an essential industry and we must continue to communicate that growing travel that leads to economic growth benefits businesses uh fosters mutual understanding and connects the nation. Now therefore be it resolved that city of Loi does hereby proclaim the week of May 3rd to 926 as national travel and tourism week and urges residents to join me I I urge residents to join me in recognizing the essential role this industry plays in our community. signed the sixth day of May, 2026.

Good evening, Mayor Pro Tim and council members. Um, thank you for recognizing uh National Travel and Tourism Week. And it's no mistake that National Travel and Tourism Week is the same week as National Small Business Week because about 80 85% of businesses involved in travel and tourism are small businesses. And I always like to remind folks that tourism is an economic driver as mentioned in the proclamation. Visitor spending by visitor spending in Loi. So this is visitor spending not economic impact, not any multipliers. Actual dollars in our community from visitors and visitors by this metric are people who come from 50 miles or more. So they're not in our own county. They're farther than that. bring $275 million directly into the Lodai community, supporting over 2100 jobs. As a matter of fact, our latest credit card data shows that 25% of all spending in restaurants and retail is done by people outside of Sanwaqin County here in Lodi. Meaning that if we did not have visitors, I don't think many restaurants or retail could handle a 25% reduction in their revenue. And for us, it also uh is a reminder that visitors also are the front door of economic development is the way we see it. Everybody who decides to relocate here and join our workforce, relocate here as a resident or move a business here is a visitor first. And so we want to make sure that we continue to elevate the tourism product here in Lodi and remind people that um visitation to Lodi is super important and to invite your friends and relatives because that's the number one reason people visit communities is to visit friends and relatives. So it is everybody's job in Lodi to make sure they bring more visitors here because if the visitors aren't here then all that tax money that they bring in has to be filled by the residents themselves. So visitors help bring tax dollars to communities that visitors that residents do not have to

spend. So thank you to the council for recognizing National Travel and Tourism Week. Uh you I think it's no secret that tourism is important to our community with the wine industry and our lodging properties and all the restaurants and our downtown and beyond. Um but thank you for recognizing this week and uh hopefully this will trigger a moment where you'll invite some folks to come and spend a weekend here in Loai. Thank you. Two more proclamations. Next up is National Police Week. And here to accept would be, I believe, our police chief, Rick Garcia. If you don't mind coming up to the podium. National Police Week. Whereas in 1962, President John F. Kennedy signed a proclamation that designated May 15th as police officers memorial day and the week in which that date falls as police week. Whereas National Police Week honors the service and sacrifice of those law enforcement officers killed in the line of duty and more than 800,000 active law enforcement officers and protect our communities and safeguard our democracy across America. Whereas on December 9th, 1998, motor officer Rick Charles Cromwell died as a result of a motorcycle collision that occurred on Kettleman Lane while on duty. Whereas his name has been engraved on the walls of the National Law Enforcement Officers Memorial in Washington DC for the last 27 years. Whereas the safety of our community depends on police for direction and assistance in our most distressed and terrorstricken moments. Whereas Loi's 73 sworn personnel work diligently to leverage available resources and partnerships to enhance their ability to provide top quality service. They build and strengthen relationships with residents to most effectively address crime and social issues in the city of

Loi. Whereas the observance of National Police Week provides an opportunity for members of the community to learn more about the vital work of law enforcement and express gratitude for their service. Now therefore be it resolved that city of Lodi does hereby proclaim the week of May 10th to the 16th 26 as national police week in the city of Lodi in honor of the men and women whose diligence and professionalism keeps our city and our residents safe signed the sixth day of May 2026. Thank you for this proclamation. Today's um just a reminder of the inherent dangers that this job presents and that the men and women of Lai Police Department go out and serve proudly. You know, we serve this community the best of our ability. And this morning, we participated in the county memorial ceremony out at Stockton PD. And you know, again, as you read, this is a inherently a dangerous We have I'm lucky to work alongside such dedicated individuals that make up the Lonai Police Department. We will continue to proudly serve this community. And unfortunately, as you can see, they couldn't be here today because they're out all busy on calls as I walked over and just a reminder of why we need more and why it's important that we have our officers to serve this community. So, thank you again for this proclamation and we appreciate you recognizing the police officers. Thank you. Next is the proclamation for National Public Works Week. Our interim public works director Sean Nathan will accept

um National Public Works Week. Whereas public works services are vital are a vital part of everyday life in the city of Loi. Whereas the public works department plans, designs and builds and maintains the city's water, wastewater drainage and street systems as well as city buildings, fleet, transit and solid waste services. Whereas the health, safety, and comfort of residents and the beauty and cleanliness of our unique city greatly depends on the services and facilities provided by public works professionals. Whereas public works Employees, contractors, and volunteers strive to provide a high level of service that enhances quality of life at a reasonable cost for all LOI residents. Whereas the efficiency of public works personnel is influenced by the community's attitude, support, and understanding of the importance of the work they perform. Whereas public works week is observed to highlight the essential role public works plays in our daily lives. This year's theme is rooted in service powered by community. Now therefore be resolved, city of Loi does hereby proclaim the week of May 17th to 23rd, 2026 as National Public Works Week in the city of Loi and in recognition of the professionals engaged in public works services and activities in our city signed the sixth day of May 2026. Mr. Nathan, would you like to say anything here?

I would. Thank you. Um, so in 1962, uh, President John F. Kennedy also issued a proclamation about National Public Works Week. In that he stated, "It is in the public interest for citizens and civic leaders of this country to gain knowledge of and to maintain a progressive interest in their public works needs and programs of their respective communities. So, kind of with that in mind, uh I just kind of wanted to educate you guys about our department. I'm going to go over kind of what our divisions are and just some real fast stats. So, our department has about 130 uh positions budgeted, which is roughly 30% of the city's workforce. We're broken up into nine divisions which are administration, engineering and construction, streets, water, wastewater, solid works or solid waste facilities, fleet and transition and transit. And so what I'm going to do, I'm just going to kind of throw some stats out so you kind of understand how much um our department takes care of. So we maintain 210 miles of streets, 240 miles of water man, 200 miles of sewer man, uh 165 miles of storm drain. We maintain 12 storm drain basins, 15 storm drain pump stations, 17 river outfalls, nine sewer pump stations. We have 28 groundwater wells. We maintain 2,300 fire hydrants. We operate a We operate an 8.5 million gallon per day wastewater treatment plant, a 10 million gallon per day water treatment plant. We maintain 55 traffic signals, 6,000 road signs, 2 million square feet of landscaping, 12,500 city street city trees. We dispose of over 80,000 tons of trash each year. We remove graffiti from 1500 sites per year. Uh we put out around 30 projects to bid each year. We issue 200 encroachment permits. We respond to 150 traffic complaints per year. We provide

bus transportation for about 200,000 riders per year. We maintain over 430 vehicles in the city's fleet. And we maintain 430,000 square feet of city buildings. U so a lot of big numbers there. And it really it's just a group of men and women that take a lot of pride in their work and they work hard and it's ve very rare that they get recognition for it. So I appreciate the proclamation and giving us a chance to kind of educate the public and and and everyone on what our department does. Thank you. Madame City Clerk, is the request for G1 to be heard right after consent? Yes.

Isn't it already going to be heard after consent? Uh, no. We do have a public hearing and that typically follows consent. Got it. All right. So, we have a request from the mayor who's in DC for SJ COG to have item G1 bumped to immediately after the consent calendar. So, if there are no concerns with that, entertain a motion. Uh, move to move to move G1 to immediately after the consent calendar.

Okay. And due to Mayor Lopez's um joining us through Zoom, I do have to do a roll call vote. So, um Council Member Bregman, Council Member Nanishi, Council Member Craig Hensley, yes. Mayor Prom Hoti, yes. Mayor Yopez, yes. Thank you. Thank you. All right, we'll hear G1 immediately after consent. Okay, city clerk, could you please introduce and submit the consent calendar?

Um, mayor promote healthy uh and members of the council. Uh, we have items C1 to C22 on the consent calendar uh for tonight. Um, I would just like to note that due to a system error, um, item C10 did not print. So this item is not being presented to council tonight for um for uh vote. So it is uh all C1 to C22 with the exclusion of C10 um is presented to council for a motion and a vote.

Thank you. Any members of council like to move an item? Mayor Vice Mayor, sorry. Uh C6, C7, C9, C19. Uh mainly for questions. Any other items to be moved here? Hearing none, would you state your questions? Sure.

Uh for the item C6, I think my comment is really more along the lines of this will be the ninth year of this agreement. I've just got a question as to when we rebid these because it seems to me every five years we should be kind of looking back out uh to the community um of service providers to rebid some of these contracts. So maybe I can get uh some understanding why we have not done that.

Thank you. Brian, mayor, members of city council completely understand and you are absolutely correct. Usually we would rebid this by this point in time. Um we did have some continuations of projects that required labor compliance for our various grant resources and in order to transition from our current labor compliance experts to a new labor compliance. It would be complex and would potentially open us up to some difficulties when we're trying to respond to auditors and things like that because every grant resource does require various labor compliance whether it's state labor compliance or federal labor compliance. that that is requirements for each type of grant resource. So they have to uh look at all the subcontractors and all their files for prevailing wage um rates. And so those are all items that come forth for that. And so once the access center is complete, Main Street is is now nearing completion and they're closing out the project files for that. And that'll probably be complete in July or August once all those project files are complete. Once access center is complete, it'll take a few months for them to close out the project files from that. And so we would anticipate going out for requests for bids probably in January of 2027.

Okay. I appreciate Thank you. No problem. Thank you. And you can stay there.

For C7, um I just kind of want to for the benefit of uh council and the public walk through this because I think we're well aware of the last time we came in for 1.2 million uh change order. It's just uncomfortable to be coming in with these change orders, but I I understand the situation and maybe we can just walk briefly through some of this as to what the need is for the change orders and kind of where we are with our budget on the capital side of this project. You know, how much more we room we actually have. Those are my two issues.

Absolutely. So, with this these change orders, these are um a few different change orders. One of them is for Teraccon and they are uh our special inspection agency, but they were also had to step in during the identification of environmental factors over at the access center. And so with that, they provided an estimate of what they would be required for testing. And unfortunately, um because there were various separate piles, it required additional testing than what was identified. So some of those additional costs were because of the fact that they had provided an estimate initially. And so that that's where some of those additional costs are coming in for that. We identified that we do have a um additional special inspections that will be required because of um the extension of the construction as well. So those are the factors that we're uh doing for the Terracon amendment of the $20,000 to cover those items. With the NJA associates, that is our architectural agreement. And with that, when we brought it back for the last amendment, we did have their costs incurred, but they did not know what their subcontractor costs would be for engineering and and other items like that for the plumbing and the mechanicals for the behavioral health portion of the access center changes. Behavioral health did give us $575,000 strictly for the infrastructure costs for their addition into the access center. the SJ health clinic will be separate and they will be responsible for their own construction documents, their own architectural and their own building of that. So this is just for the behavioral health piece that they did provide funding to us for. In addition to that, we are adding a small amount to their contract to request them to create a video for us in order to be able to seek philanthropy and private dollars for the access center and for operations. when you go in and you um try to present that information, it's good to have a visual to be able to bring that to the table to be able to demonstrate what this program is and what it's going to do. Um so that is

what the additional cost is for that um which is about $12,000. And then the the last aspect of this is for solar. So um electric utility actually said that there was an opportunity to be able to apply for solar a few years ago through uh EECBG. um and that is strictly for um any type of energy efficiency projects. That's the only thing it could be used for. And so we designed a solar platform within that $125,000. And the reason why we would like to add that is so that the overall utility cost does reduce. It is a $24,000t building. So if we could reduce that energy cost a little bit, that that's why we tried to bring that forward as well. And so we're just adding this to the the contract for construction to be able to add those services to the access center.

The energy cost is ours to assume on the project moving forward we're paying for the electrical. Yes. Okay. It is. Um how much money do we have left in the capital for this project? So currently on the construction project there is $6.2 million. That does not include the uh April pay application that um will be submitted probably in the next week or so here. Um, and then that does include uh additional change order authority of $300,000 that's currently approved and it would be$425 if this is approved tonight. Okay. So, we have still an amount of money left for change order. Yes, we do.

Okay. And do we anticipate that we're going to probably use all the funds in our uh capital account for that? We do anticipate utilizing all the funds just because of implications of tariffs that were implemented after the project was unfortunately executed December of 2024 and then the tariffs came in in early 2025 as well as um construction delays due to the environmental and so we anticipate some of those costs be incurred. We did try to mitigate that as best as possible whenever um we talked to our subcontractors and they were able to order the supplies in store and we did try to mitigate those additional u material costs by by doing that if the storage fees outweighed what the the tariff cost increase would be.

So none of this is reducing our operating uh moving forward as we anticipate what we have remaining for operating. Correct. Um are you project managing who is project managing this at this point? It is a team effort for one. Uh we do have a construction manager division one that does a great job. The the owner and operator Paul is actually the one that's spearheading this along with his team. And then we do have our architectural construction management through NJA. Um from the city side, we have myself, Cynthia Marsh, and my program specialist over this project.

Um Mr. City manager, if I might ask that we get a monthly update between now and the completion of the project because I think it helps for us to understand where we are with what potentially the additional change orders and costs are. Um, I prefer to have them come as they come and just be aware of them even if the authority uh extends into your uh your approval. So, um, that that's that's pretty much it. Thank you, Jenn. I appreciate it. Thank you so much. Um

for Jennifer Jennifer I do have a question. When do you anticipate spending all this money the day of completion? So, all of our uh expenditure deadlines are um for the majority of the capital projects December, we do have a million-dollar grant through community project funding that does extend past that, but as of the prior change order authority or sorry, the pri the most recent change order, um it's September 30th of 2026. Anticipate that might go into October, but as of right now, we are on target to meet all of our expenditure deadlines. Yes. So, I assume that your target would be met December, right? spent money you want.

The majority of the dollars are related to the American Rescue Plan Act. Um so those do all expire December 31st, 2026. So all of that will be expended prior to that date. What's what's this $1 million extra or community project funding? It was actually a federal earmark that we received from Mcernney's office a few years ago. So that one actually extends to 2031. That 1 million. Yes. Thank you so much.

But we will also have that expended Okay, nine is just to understand more where I see what we're doing in terms of moving some of the services from A1 over to our uh access center area. Can can anyone address what those additional services or hours? Jennifer, I don't know if this is you again. Um we'll just keep you up there. uh what are they going to be adding to what they're already doing since they're now reducing their time at some of the other city facilities to be over there? What additional services are they going to be providing? I apologize. I missed the first part of that question

for A1 for the um on C9 is basically the service agreement is um to reduce the hours at city hall and apply changes to the safety ambassador program extending the agreement to 31st. So is it just more uh patrol hours there? What is it? So, it's really more about the presence there. And so, we wanted to make sure that we were being good neighbors on that street. And so, it was kind of identified that that really was the area focus that we wanted to have for A1 security um because their patrol area was pretty large. And so, um we wanted to kind of concentrate it a bit. So, while they are at Access Center, they do also patrol all the way up Sacramento Street um between uh Daisy and Louis Avenue um as well, multiple times throughout their their shifts. And then they are also checking in with the access center staff regularly as well. And that just adds an additional presence there for individuals just to maintain the area. We actually had a neighborhood coalition meeting earlier this morning with um we've set up for business owners and community members um that reside on Sacramento Street if they would like to attend. Um we have police department presence, public works, and and our outreach workers as well. and they even said they s they've seen an improvement in that area since not only the neighborhood coalition has been put in place, but the change with the ambassadors at the access center.

I appreciate you doing that because we know that that's been a concern not just with the businesses but the surrounding uh residential uh members. So yeah, thank you very much. I think you're done. So um uh the last item really I'm just looking for better understanding. I know I've gotten some emails from folks concerned about the Hutchinson Street Square pool repair and not being open. So, um I just wanted to get an understanding if the $40,000 we're committing tonight is going to fix it and it can be open to the public and um we're we're good to go.

I can chime in a little bit here and then parks can step up if need. So, um, probably two months ago, uh, our our Hutchin Street Square staff identified some leaks coming through the bottom. For those of you guys that don't know, Hutchinson Street Square is on a second second floor, the pool. And so, you can go down under and that's where some of the equipment is stored. And so, their staff's down there fairly regularly. And so, they identified some some cracks that were on the bottom in the concrete and and they were leaking water and they hadn't really observed water leaking through the cracks before. So, uh, we had our structural engineer go out there and assess it. Um, they also met with, uh, a a kind of a pool specialist that we've used like at Blakeley in the past, and they met out there and they came up with a kind of a a a short-term solution and a long-term recommendation. And so, this is the short-term solution that's that's injecting epoxy into those cracks. And it it goes all the way through. It's from the bottom. And so it's um it's not the 100% fix, but it's the the the short to midterm fix. The expectation and and goal is that the foundation's requested that we um do the the ultimate fix in the near future and I believe they expect to have money raised for that possibly and so that would come at a later date. So this is the um the short to midterm fix that is being paid through a donation from them. Okay, that I just want to acknowledge Hudson Street Square Foundation for stepping up and helping. Uh it helps all of us. Uh and we want to keep that pool active because it is essential. And um I think the $300,000 in the CIP is for the longer term.

That's yeah, that's that's the rough estimate on the ultimate fix. Okay. All right. So, um we'll see if we can all work together to come up with those dollars and stuff. So, thank you very much to the foundation for stepping forward. So, that's it. Thank you, sir. Clarify three $300,000 for the whole the fixed. $300,000 for the fixed uh for the that's the estimate for the ultimate fix. Yeah, the the short to short to midterm length is uh 40,000.

I see. When do you anticipate? We don't know when when that's going to come. So the I think I think in discussions with the foundation the desire is to do that like within the next year or so. Um it's just a matter of identifying and funding. Thank you. I neglected to ask at the beginning would any members of the public like to pull an item from consent. Seeing nobody anybody online. Okay. Um with that I'll entertain a motion. Move to approve the consent calendar. Council member Bregman, yes. Council member Nakani,

yes. Council member Craig Hensley, yes. Mayor Promhodley, yes. Mayor Yopez, yes. Thank you.

Motion passes. And now I'd like to invite our parks director, Christina Jeremy, up to speak about C19 if we're doing that. Good evening, council. C19 is to adopt a resolution approving the specifications for Hudson Street Square Pool Repair and authorizing the interim city manager to award the contract to the lowest responsive bidder and execute change orders and accepting the donations from Hutchinson Street Square Foundation and appropriating the funds. And at this time, I'd like to call up Daffany Feld from Hud Street Square Foundation just to recognize their donation and their help throughout the years for supporting our department and the building.

Just want to say thank you so much. Thank you. Um I didn't come prepared to say anything. Um but the foundation has been place since 1979. So, we're coming up on 50 years. And that's why we started this foundation because the square wasn't going to last forever. It was going to need repairs. And we're prepared to help on these emergency and the longer term projects. Thank you. Thank you so much. G1.

Item G1 is to adopt a resolution appointing Cara Reig to the position of city manager and approving the related employment agreement. And I will turn it over to our interim city attorney to present this item. Um, to government code section 54953, I'm required to give an overview of the compensation that this agreement entails prior to your consideration of it. So, I'm going to do that now. This contract calls for a salary of $285,000, a $300 monthly auto allowance, and um banks of um leave time. 32hour uh a 32-hour bank um uh for um for vacation, a 40hour bank, sorry, 40-hour bank for vacation, a 32-hour bank um for for administrative leave and benefits that are consistent with those for the other executive staff.

Thank you. Does council have any clarifying questions? You have any comments? Dr. Rig, we've had a lot of We had good candidates. I must tell you that. All right. But the thing that impressed me about, she has a good resume, but she's been working for outgo for 22 years. That's something longevity, loyalty, and so forth. We're happy you're here. Thank you, doctor. Seeing no coun.

Well, one thing that I've seen about you is you're very missiondriven and uh we need somebody in thisstead that can get things done and so glad to have you on board. Thank you again.

I'll I'll make a comment. Um we are very pleased to have you on board and as you know apparently we're trends setters as women uh in these leadership positions. As the sixth woman to ever serve since 1906 on the city council, I welcome you not just as a woman, but a strong leader with 25 plus years experience and working your way up the ladder like we all many of us have had to do. So, I look forward to you coming on. I uh uh appreciate your six-month strategy of establishing relationships and getting out there on a road show and hearing what uh our community tells us every day about their priorities and what needs to be done. Uh your obvious ability to work with staff and to create partnerships uh at the um uh policy level with legislators and those who can bring funding to the table for Loi. I think that's something that you learn uh on the ground in Elkrove and we know that you'll work with us to do the same thing for the city of Lodi. So, welcome aboard and I can't wait until June 22nd start. So, thank you.

I'll add I've had the opportunity to work with Cara for over a decade now when I worked at the capital and she was the rep for city of Elkrove and I think we often do look towards Elrove for a lot of you know they've got a great growth mindset and they ed some real impressive businesses and there's just a lot of things happening there that I think we can learn from and so we're so excited to be able to lean on all of your your wealth of knowledge and experience there. Um did the mayor have any have his hand up to say anything here? I

yes so as you guys know I'm in DC but I connected because this is super important. I'm super excited for KA to start and I and so I got so many compliments from other cities saying you guys did the right election and I'm super excited for you to start car. Thank you. So before we vote on item do we have any public comments here?

Mr. Ducet. Thank you uh Mayor Promotei uh council members on behalf of our business community, the Loai Chamber board of directors and our membership like to welcome you to our community. Uh we did do a little of our own due diligence upon hearing it and uh nothing but rave reviews. So uh love to hear the sixmon strategy of going uh coming doing a road show. I know our other uh community partners, Visit Loi uh Wine Grape Commission and others uh are excited to be able to show you around. So, welcome. We look forward to working with you.

Thank you, Mr. Det. Any other public comments? Seeing none, I'll entertain a motion and afterwards we could invite you up to say a few words if you'd like. Entertain a motion. Move to approve car reading as the uh next city manager for the city of Loey. I'll second it. Council member Bregman, yes. Council member Nakani, yes. Council member Craig Hensley, you betcha. Mayor Prom Hoi, yes. Mayor Eupz, yes. Thank you. Congratulations, Miss Reic, if you want to.

Good evening, Mayor, Mayor Prom, and City Council. I am so honored to be here tonight and I thank you for your trust in my leadership and I look forward to working collaboratively with the community, the council, your executive team and staff as well as businesses and your nonprofit organizations to continue the important work of the city. So, thank you.

Thank you. Up next, public hearings F1. Do we want to go to public comment on non-aggenda items? No worries. It's a funky uh first we have item D, comments by the public on non-aggenda items. Madam city clerk, do we have any public comment card? I do. I do have um two comment cards. And the first card I have is from Donna Phillips.

Good evening. I wasn't planning on being here either, but here I am. Um, council person Lisa Craig Hensley texted me re recently about the uh the progress we'd made on Laurel a Avenue with the parking and all that. So, what I wanted to do was to respond I let you know what I responded to her. Um, we are not done with Laurel just yet. Um, she's she just inquired about just checking in. How's it going? Um, and I responded back to her saying, "The number of cars down the north end of of the dead-end street have become unmanageable." Excuse me, I didn't mean to jump ahead on that. Thank you for your inquiry. At the end of Laurel Avenue, we have not witnessed anyone parking on our street anymore, so we can get by. We're still impacted by damage to our property and the and the cars that come down making U-turns, 14point turns on our patio and into my car and flower beds. Um, we do see a great deal of police presence and tickets being written. Um, they're doing a good job at the other end. I know they can't be there 24 hours a day. And then just recently, I texted Lisa to say, Lisa, the number of cars down the north end, the dead end of Laurel Avenue have become unmanageable. It would be helpful if we could swing the small white gate out to deter traffic. We don't have any tools to deal with the issues that come down there. And people are coming down there at all hours of the night. You know, as I can't even tell you the numbers that come down there. Prior to Char prior to Charlie Swimly leaving, he issued us this really nice little note that said if we were to swing this little white metal gate out there anymore to deter people from coming down there, we would receive a series of tickets. And those would be

$1,250 to start with. and then 3,000 or $1,300 after that. So, we cease doing that. But at this point, we don't have any way to deal with that. This is a street that's a dead end. I don't know what the resolution is. I'm asking for any direction that you can give me to come back and solve this problem. Uh it's a street that's received no care, zero care in all the 43 years I've lived there. So, it's basically an abandoned street that catches all the traffic now from Laurel. All those people that are looking for parking places and all the people that didn't take reverse back up in school, they can't back out. They just back up onto my patio. Um, basically, I'm just asking for some direction. What should I do? Uh, we need some help with this. I mean, my dog almost got ran over one day. The other person that shares my house got punched out one day by someone over the parking situation. I know you've done a great deal of energy before. The police have done a lot. Uh the fire department. Our end of the street is now a fire lane and that's very helpful because people have stopped parking on our street so we can sort of get home. So, the fire lane is very helpful, but it still has not stopped the numbers of people that come down there thinking they're going they're going to get to the park and they get to a dead end street. So, I appreciate Lisa checking up on me. She always checks up. That's really good. So, anyway, I'm just leaving this in your lap. I'm just giving you an update. The police are doing great. the south end of Laurel Avenue for the most part the people that live in live there and park in front of their houses. It does pretty good like during the daytime, but on the weekend and the evenings, the issue is still there. The signs are not correct. The signs don't even tell people that there's a change in policy. The signs on one side of the street look just like the signs on the other side of the street. So, people don't know

there's a change and they're all getting these $45 tickets. So to some degree we're moving forward but we are not there yet. But thank you very much Phillips. Did we not change the signs related to the parking alongside Laurel? They don't. Sorry that was directed towards

they don't call people's attention to it. They're both white signs. The signs on both sides of the street just look identical. This one lady said to me, "I've parked here for 20 years." And she said, "I got this ticket for $20. I mean for $45. I didn't know there was a change. We need a different color, a bigger sign, a sign that says resident permit parking only. They don't get it and I I understand that. So, we have brought that up a couple times. The signs don't call attention to that. So, okay. Thank you, M. One step at a time. Thank you. Thank you.

Is that my I just follow up. So, Mr. Nathan, is is there something that and I think the dead end being more apparent like that because I understand what she's saying. I've seen that before in terms of where the gate is located and so is there anything we can do in terms of additional signage? You can take a look at it. Yeah, we'll take a look at the signs. I think the signs I think they're already the larger size, but we can double check that. I know what you're saying. Both sides of the street look the same. They they're no parking at various times or but by various permits, but um there are standards on what the signs need to look like as far as so people are aware that there no parking at a certain time. Um, but we'll take a look at it. Thank you. Thank you.

Next public comment. The next comment card I have is from William Stewart. William Stewart. Not seeing a William Stewart. Okay. Go to the next one. Those were the only two I had. And you're welcome to call up anyone else that would like to come up. Do we have any other public comments? Seeing none, we'll move next to council comments. Do we have any council comments? Council member Bregman,

I got a few of them. Uh, so I recently attended NCPA's federal conference. All of my colleagues ditched me. So, but it was still a fun trip and a worthwhile trip. Uh, one of the many items that we went for was FOA, which is Save the Forestry Act. Um, under that item, we were hoping to increase the footage in which we could remove trees around power lines that NCPA owns. For those of you that don't know, Loi owns our own electricity or what do you call it? Electrical um Jeff help me out here. I am tired as can be.

Thank you. Electric utility and we're in a group JPA called NCPA that has 16 cities total. Um together we serve a little over 700,000 residents. Uh and anyhow, when we were lobbying, uh FO was the main item we were trying to get past, um which has bipartisan support. And so again, increasing the 15t threshold to 150 ft on either side of our power lines helps us protect others and our own assets. Second item that we were trying to approve was a sediment removal from some of our dams. Uh so we have sediment or buildup inside of our waterways which again affects our water storage capability. And so again if we can remove that sediment, put it on forestry property instead of hauling it out uh it saves taxpayer money, rateayer money and it just makes sense because again where is it coming from in the first place? And then the last item was our hydrogen hub funding. Originally, we had gotten around $50 million from the federal and state government um through a program called Arches, and we're still working on clawing some of that back. Um that should be successful, but it sounds like it's going to be a while. So, again, the hydrogen hub in our belief is still going to happen. It's not an if, it's just a when. So, uh very glad to be a part of that. We have some of the brightest minds in the world a part of this group, NCPA. Uh and we were speaking to some of the highest people in our federal government, one of which was the chief of forestry. Um the second item was love Loi. Uh as always, great turnout. Thank you for those who were there. Can you raise your hand if you were there? JP, were you there? What? Well, you have kids. You have a good excuse. Um I was on barbecue duty, so uh feeding people is is a service all by itself. But again, thank

you for those of you that did serve. Great opportunity to get out and meet free people and just again serve. And if you're not doing something on a regular basis, I would entreat you to get involved in a Rotary or Quantis Club. Um and then the last item is, and I just got word of this through our city manager, current city manager for a little more while yet, Aaron. um that I had referred an issue about a uh property that's being sold and I guess the property was halted in the sale because there was a separate building on city property and the realtor called me saying, "Hey, the deceased owner said that he had paperwork on it." And I asked her, "How old is the Eastman?" She's like, "Well, it's from the 80s." I'm like, well, um, don't get your hopes up, but I'll send it to some of our, you know, executive team members, um, including Aaron and Aaron and and Sean and Olivia here who ran with it. And I guess we were able to get a 40some year old document that I don't know how we still have it or was stored. So, um, this is definitely a success story because that's that to me is impressive. So, thank you very much and I do believe in talking about our wins. So, thank you again. Um, that's all I have. Thank you.

Any further comments?

I might. Yeah. Uh, just a couple of things to uh the I had the opportunity to attend in the absence since uh the mayor was gone uh the SenCal meeting. And so, Chief, congratulations on your May one sencal start date and uh uh had our my own personal experience with actually having a SenCal paramedic team come out. So, uh anyway, that senal is all there and prevalent and uh much appreciated. So, uh congratulations on that. um also participated in the level load day with the armory cleanup which is going to be relevant to our discussion on that item later on. Uh and then also I was able to uh along with supervisor Ding and uh health director Genevie Valentine from the county uh SJ Cog uh Jennifer Ryan and other city staff um participated in the ribbon cutting for the re reimagined housing transitional housing. That was a great project. We are analytic project on that block. I uh look to both of the properties on either side and hope that we can work with those property owners to get those buildings uh renovated as well. Um but just so everyone understands the tenants in those buildings are coming on referral only. Um and we'll be there from what I understand from Miss Valentine from a six to ninemonth period where they transition out. So that is transitional housing for those who are um uh referred and come from our access center or other locations where they are an acceptable referral list. So great little project and uh I think we already are full up. Do I understand that we will have enough tenants to go in into that building and I think it's really important for people to understand it will be occupied with 40ome people uh in that property. Yeah, I don't want to speak on behalf of

Behavioral Health, but I know they have been working with our referral agencies on uh developing a wait list for that to be able to get them in. They actually had some of them already transitioned into like hotels and motel in the interim as well. So, um we're excited to get that filled up as soon as possible and and it'll just like you said, it's a great catalyst project. They're working closely with um not only the access center, but Hope Harbor as well as uh Loi House and other referral agencies.

Yeah. So, I appreciate that because that will only drive into the um importance of getting our downtown plan in place because, you know, services for those new 40 or so individuals living on that block is going to be important along with the rest of the block. Um just a note, uh maybe public works is aware of this. I heard from Mr. Bunch the sidewalk is completed at the Loi Academy. So, uh, well done team on, uh, getting that completed. Did Did we do an inspection on that? Uh, I think it's still open permit, but I think it's done. We'll be we'll be coming back to council to accept those improvements and um clear the deferral agreement.

Okay. Talk about longtime agreements that have been in place. Uh, that one now has been completed. So, uh, and and lastly, um, just want a note for all of council. I've been talking to the, uh, to Mr. Bush about, um, approaching a Measure K amendment. We have a number of projects that are identified in the SJCOG strategic plan that came from a 20-year-old uh, renewal of Measure K. And I think in light of what's going on with our downtown plan, our S so SOI area, we need to take a second look at some of the projects that are in line and determine uh what we may want to add or repprioritize because there are some projects there's at least one project on there that we really um probably don't need and others that we need to add. So I think I want to get that at some point Mr. City Manager agendaized for further discussion. So that's it. Thank you,

Mayor Council. I'd like to make a comment and on Erin Bush, interim city manager and one we had before. They've done an excellent job. When people call in to us as city council member problem, uh what we do is we go to city manager and he's taking care of a lot of our problem. I tell you that, right? He's taking a lot of problem with talking about us. So, I appreciate you, but you're done. We still have him for a month and a half. He's not done yet.

Don't kick him out yet. Any other council comments? Seeing none, we will move to the next Oh, unless there's anything online. All good. Okay. Uh F1. Yes. F1 is our public hearing of the night and it's a public hearing to consider waving the first reading and introducing an ordinance to enter into a development agreement with Rogers Media Company to install, maintain, and operate electronic messages message signs on city- owned properties. And I would like to give an opportunity to interim um city attorney Leber Burke to um make a comment before we proceed.

Yes. I just wanted to let the council know I have a conflict on this matter and Mr. Barrett will be sitting in my place.

There we go. Good evening. uh reputian council uh interim deputy uh sorry interim and deputy uh community development director Cynthia Marsh. Uh this item before you tonight is an ordinance to implement uh a development agreement uh or authorize signing of a development agreement with Rogers Media Company uh to install and operate uh three electronic signs on three different city- owned properties. As you probably recall, back in 2021, there was a private company that sought to lease space from the city to construct and operate uh electronic signs on city- owned properties. At that time, there was no mechanism in place to allow such a request. Uh following that request, uh community development spearheaded a code amendment in 2022 that was approved by planning commission and city council. That code amendment uh created uh LOA municipal code section 13 17.34.070 subsection H and that allowed uh community electronic message signs on city-owned facilities. Following uh that uh implementation of the code and adoption of the code amendment, the uh staff was requested to do an RFP to allow signs on city-owned properties. Uh three parcels uh owned by the city were chosen. I'll show those to you in just a moment. Uh there was one uh responsive proposal and that was from Rogers Media Company. Following that, uh in January of 2025, uh this item initially went to the planning commission to approve the development agreement with Rogers Media. Uh at that time, uh the development agreement was for installing two of the three signs. Uh the RFP included three locations. there was some push back um from local citizens who lived nearby at the third location. Uh so they uh withdrew from that location and um that

uh was near the uh city on site near Walmart off of Kettleman. So, uh, the initial agreement that, uh, went to plan commission was for the sign at the, um, Hutchkins and East Harney intersection, and then the second location was at the city's, uh, animal shelter, soon to be former animal shelter at 1345 West Kettleman Lane. Uh subsequently uh when we were in the process of routing uh this on its way to public uh to city council uh public works uh traffic engineer determined that there were some potential safety conflicts with traffic signals at that intersection at Harney and Hutchkins uh which turns into West Lane as you head south of the city. So, as you're coming into the city or at that turn, uh there was some uh concerns about potential light conflicts with the sign and uh red green, you know, traffic lights potentially being misinterpreted by the sign. So, following that, um Rogers Media um met with uh public works and other departments uh electric utility to determine another location for that sign. And um they came to the intersection at uh Hutchkins a little bit north of the uh intersection. So it's in the median uh near where the welcome to Loi sign is that I think was the wood sign that was installed in about the 80s and I'll show you an image in just a moment here. So um the the Lodi municipal code was amended in 2022 as I mentioned. Um it uh has requirements within it. Uh the requirements are that the city receive uh advertising revenue. Um in response to the RFP, the RFP proposer, Rogers Media, um proposed that the city would receive greater of either $25,000 annually or 25% of advertising sales. So whichever is the larger dollar amount of those, uh the city uh in turn will receive free display time for city events, public messages, and

emergencies. So, if there are any um emergencies, say for example, uh flood or evacuation or just uh you know, anything that the city needs to take control of, if the police department or fire department needs to work with Rogers Media, it would take mere minutes to contact them and gain control of the system and uh be able to uh display emergency uh messages onto those uh display boards. Uh otherwise, we will get free display time. So that could include, you know, events in the city, great festival, events at Hust Street Square, parks and wreck, um job postings, any of those things that the city would wish to do, we could coordinate with our PIO and uh we can uh get those posted uh through Rogers Media on a monthly basis. Uh the LOA municipal code does require site plan and architectural re review committee known as spark. It also requires a use permit approved by the planning commission and um those would follow the development agreement before you tonight. Uh if you are to approve it, uh the development agreement um would uh address the design and operation of the sign, but further design review would be uh take place by spark. So the request um is to uh approve the uh signing of the development agreement. Uh and then uh planning commission has already heard this item. They uh voted to recommend approval to city council on March 25th. And um as a result, council uh has the option to either accept, modify, or uh disapprove the recommendation of the planning commission. Here on the right side of the image, you can see an example um of how the sign might look uh in front of the uh current animal shelter on Kettleman. Uh the signs are not that large. Um they're approximately about the size if you went to Home Depot or Lowe's and bought a piece of plywood. That's about visually you if you wanted to, you know, picture in your your mind what it would look like, it's about uh

the size of a piece of plywood. And um they're not that tall. These are not um large signs like the freeway oriented sign that you heard uh a couple months back that's going on Highway 99. These are shorter. Um they're tall enough that u someone can't reach them to uh to damage them, but they're uh they're smaller in size and they're meant to be more of a local scale. So, uh the terms of the development agreement uh state that uh Rogers Media would install, maintain, and operate the signs. It includes standards for operation of the signs. Uh it is uh the agreement has been revised to include the third location uh at the uh southwest corner of uh Westgate and Kettleman. That's over near Walmart on the city own site where uh there will be a future electric substation. Um because of the uh location of the substation and walls and that sort of thing and setbacks, um the applicant worked um with electric utility and public works to make sure that they weren't in any public utility easements and that there would be no conflicting issues with uh landscaping, signage, other signage, uh street lights, uh fencing, that sort of thing. Uh again, the city will receive a financial uh benefit of that, either $25,000 or 25% of the advertising. Um and the signs uh as stated would be used uh potentially to assist in emergencies. And following approval, the an execution of the development agreement, uh the uh projects would go to Spark for approval and use permits uh before stepping forward for building permits uh to allow the applicant to install and maintain these signs. Um the requirement uh in the development agreement states that um any uh maintenance or failure of the signs would be uh required to be removed by Rogers Media uh in the future if there were any issues uh with interference in future development of city- owned properties.

Here are an uh aerials of the three sign locations. You can see in the image on the left where the um center median uh on Hutchkins that's north of the Harney intersection where Westlane turns into Harney as you enter Loi from the south. Uh the um sign would be situated behind the welcome to Loi uh entry point but in front of the pergola arbor that's in the center median that has uh vines growing on it. Uh the middle image here you can see where the current city animal shelter is uh on Kettleman just west of the Hamlane intersection uh and west of the uh Chevron that's on the corner there. Um likewise uh there's been discussions with uh public works and utilities to determine where pees are public utility ements to help the placement of the sign. So those were adjusted slightly uh and moved around. And then uh the third location which is uh included back in the development agreement. The star is sort of in this area on the right u more towards the corner but it's a little bit actually a little bit further west. Uh this site will eventually have an electric substation with a very tall um block fence uh wall around the entire uh parcel here. Uh and we'll have a 10-ft setback that's landscaped and the sign would be uh within that landscape setback area. Here are simulations of what those signs might look like. Uh likewise on the left here, you can see on the center median for Hutchkins uh east north of the Harney uh intersection. Uh the middle one is the city animal shelter. And on the right here, you would see what it could look like at uh Kettleman and Westgate. Uh again, this would be in front of a uh very tall block wall that will eventually be installed uh enclosing uh the city's facility there. uh the facility that will be uh located uh the substation. This is just an example, not exactly what it would look

like, but uh just to let you know uh what it could potentially look like in the future. Um and the sign would be uh removed by the applicant if required by the city and uh before construction uh commences uh on the substation. The project is uh determined to be exempt uh under SQUA common sense exemption 15061B3. Uh the development agreement itself itself is exempt. Uh it may be further evaluated once they proceed with their spark and uh their use permit applications. That concludes my presentation and there's a motion. I'm available for questions if you have any. Thank you.

Any questions from council? Was there any discussion with uh Roberts about like protocol if someone were to hack into the sign and change the messaging? I know that's happened in some other Yes. Yes. Um those concerns were expressed. Uh they um said they operate signs all over u the western states and um they said it would not be an issue. They've uh not had any uh instances of that occurring. They have a pretty secure system that's controlled remotely. Um but if that were uh we could uh we would have our own login so the city PIO could potentially just get in and shut it down or if we just you know give them a call or shoot them an email within seconds they can just shut it down remotely

and then what's the process if uh or like what are restrictions around the types of advertisements? Could you speak to that? Um there there would be uh the city would need to uh not specifically approve advertisements but the standards uh that would apply for any signage in the city um appropriateness uh would apply. Um may I ask more like if uh there meaning if there was anything inappropriate um

I don't there's like a controversial event or something how does how are we going to handle that? I um would probably defer to our city attorney to answer that question because I would assume there there could potentially be some constitutional uh issues there with um signage uh restrictions.

Yeah, there's it's covered under um section 10 of the development agreement under display limitations. There's not really I don't think a constitutional issue so much because it's the contractors voluntarily agreeing to this. It's not something we're imposing in other words. Um but the restrictions are no political messaging, no obscenity. Um nothing illegal can be displayed on there and those are all voluntary concessions from the contractor agreement. I I think I covered everything. Political, religious, sexual, those are the the restrictions on.

Okay. Does that answer your question? Y. All right. Now, I'm going to go ahead and open the public hearing at 8:13 p.m. City clerk, do we have any public comment? I do not have any cards, anything online. No. We have any members of the public like to speak to this item? I'll close the public hearing at 8:14 p.m.

Quick question. Yeah. Who made this recommendation before? Who initiated this idea? I think it was 2021 is what? All of us. You Yeah. 2021. All of us did.

Correct. Yes. the uh recommendation I believe at that time was brought forward to the city manager who suggested a code amendment and that code amendment uh the Lai municipal code was amended and that was approved by both planning commission and city council. Uh and then after the RFP was issued uh this uh process begins with the development agreement first being approved by planning commission which it has been and is now before you tonight for approval of the development agreement. signs are so prevalent. Uh I can't see a downside. Entertain a motion. Move to approve. Second by council member. Council member Bregman.

Yes. Council member Noishi. Yes. Council member Craig Hensley. Yes. Mayor Potmosi. Yes. Thank you. Motion passes. Thank you. Uh, item G2. Item G2 on the regular calendar is to adopt a resolution um, ratifying the interim city manager's employment of Jamie Vandy as the director of administrative services and approving the employment agreement effective May 12th, 2026. I'll turn it over to our intro. Oh, yes.

Hi, James PV, human resources manager. Um, At its uh November 19th, 2025 city council meeting, council approved the adoption of a new classification and salary for the position of director of administrative services. The director of administrative services will be responsible for four divisions: budget, finance, human resources, and information technology. The city engaged the services of an executive recruitment firm to conduct the recruitment with the interimm city manager interviewing the finalists. The interimm city manager elected Jamie Bandy to fill the position. Staff recommends approval of the employment agreement Twin City and Jamie Bandandy effective May 12th, 2026. Thank you.

Thank you. Any council comments on this item? If I might just note that um I appreciated the fact that the staff report indicated the qualifications of the city treasurer and note that I've talked with our city manager about codifying those in some way uh to ensure that we have that description in our ordinance. So very much appreciate welcoming qualified person in the city treasur. Um this individual was chosen by city manager. He gained a process and he's chosen the right person. That's all I say.

Seeing no further council comments that we have disclosure. Yes. Pursuant to government code section 54953 um the salary for this contract is 195,261. Benefits are consistent with executive u members of the city administration and there is an initial vacation bank of 80 hours. Thank you. Thank you. You have any public comment on this item? Seeing none a motion. I'll make a motion. Second motion second by council.

Council member Breman. Yes. Council member Nakani. Yes. Council member Craig Hensley. Yes. Mayor Prom Hodi. Yes. Thank you. Thank you. Motion passes. Miss Bandy, did you want to make any remarks here or

Thank you for the warm welcome and I just wanted to um say I appreciate the opportunity um to join the city of Loi Loi and serve as your administrative services director. Loi is my home. So, it's really, excuse me, um, very meaningful for me to be able to come back and serve um, the community in a professional capacity. So, thank you again and I am ready to get started. Thank you. Great to have you. Next item, G4. G3. G3. Sorry. No worries. No, G3 is G3.

So, G2 was employ her employment agreement and then G3 is to actually appoint her as city treasurer. Okay, got it. Do you want to move to approve? We made two items. Typically, it it's on consent, but it felt a little odd to appoint her as treasurer before you approved her employment agreement. So, Oh, got it. Okay. So, what am I doing? A motion and a vote. What did we just do? We did G3. So, should we go back? I see. Okay. Well, we introduced G2 and G3 kind of got blurred in there. Got it.

You took a formal action on G2. And so, now G3, since I'm here, I'll just mention to you very briefly that um you know, agencies are required to have a city treasurer that handles and manages funds. And we've historically had that position served by either your deputy city manager assistant city manager Christina Jeremy has been wonderfully filling in in that role. But now that you just approved item G2, a contract from Miss Jamie Bandy to serve as your new administrative services director, we feel it appropriate to go ahead and assign those responsibilities and duties to Miss Bandy now that she will be accepting that new role with the city. So we've identified all the roles and responsibilities of that particular position and yes, we have discussed about you know formalizing those. So that will be coming back to um council in some formality way of documenting those roles and responsibilities treasure so everybody knows what that position is up to. So with that we recommend your approval of the council.

Thank you very much for your service Christina. It's appreciated. I'll echo that. Thanks. Any public comments on this item? See? None. Motion. So move. Second. Council member Bregman. Yes. Council member Nishi. Yes. Council member Craig Hensley. Yes. Mayor Proani. Yes. Thank you.

Thank you. Motion passes. Congratulations again, Miss Bandy. Uh G4. G4 is to adopt a resolution approving the exception to the 180day waiting period for appointing a retired annuitant to the economic development department. And I'll turn it over to our economic development director, Luis Aguular.

Good evening, council. Lar economic development director. Um pretty excited about this item. Um so the city proposes to hire Mr. Donald Burrus as a retired militant to assist with the economic development department and specifically the implementation of the strategic plan. Uh the public employees pension reform act of 2013 requires 180 day waiting period before an employee can be hired as a as a new. Um this law also also allows you uh the city to approve an exception to the waiting period via public meeting and um which is why we're uh bringing this to you for your consideration. Um I will want to note a few things about Mr. Burrus. Um he retired from the city of Aville in December 1725 as a director of economic development services. Uh he has an extensive career. Uh he's also worked for cities of San Jose Redwood City and um just recently at the last Kal conference I attended he received the prestigious award of local economic development champion award. So u and that's from the state's uh you know agency for local economic development. So obviously very well qualified and If approved, Mr. Burrus would be hired as a part-time economic development manager at the rate of 67.28 per hour and shall be limited to no more than 960 hours as per fiscal year. is anticipated that he will help us uh serve here uh for about six to nine months and uh staff request that council adopt the resolution approving the exception to the day 80 180day waiting period and appoint Mr. Donald Burus as a retired liant in the position of part-time economic devel effective May 26 2026 and I'm happy to answer any questions

council comments I would just actually Mr. Aguilar has some great uh responsibilities, duties in here. So, I'm sure you'll work with him in his half time, six to nine months to figure out what the priorities would be. But everything that's in here for his duties is something that that we know is necessary. So, between the two of you, I have every confidence he'll keep moving forward our economic development plan. So, thank you for locating him and bringing him on board. Any public comment? Seeing none, entertain motion. I move to approve. Second. Second. Council member Bregman. Yes.

Council member Nichi. Yes. Council member Greg Hensley. Yes. Mayor Bro, yes. Thank you. Passes. G5.

G5 is to um discuss and provide staff direction for the Loi Armory building. And again, I'll turn it over to our economic development director. Uh good evening again. Lisa, economic devel I'll start off by just providing a little bit of background um for the public. Um below that armory is located at 3 333 North Washington Street and is currently owned by the state of California. Um Senate Bill 855 and assembly committee on military and veteran affairs authorized the director of department of general services also known as DGS to transfer, exchange or sell seven specified properties throughout the state of California which includes the uh armory. Um existing law requires that an armory um to first be offered for sale to a local agency before it's being before it gets offered to private entities or individuals. Um if the local agency wants to be considered as a potential buyer, uh there is a 90-day um period that u local agency would need to um submit a letter of interest for. Um and so that date is uh approaching. We learned that recently and so um we're here to uh you know get direction from council whether this is something that we should pursue um and again if there is interest then we could move forward with the letter of interest which is non-binding and they could have any disclaimer that the city feels is necessary. So, um the Loi Armory has been identified in um in the downtown planning area and there there is a map attached to your staff report. Um it's also been identified in the visit LOI sports tourism strategic plan and facility recommendations report and so this site has real potential to be a catalyst for a lot of the planning efforts that we're um trying to focus on as we move forward. Um with that I just

happy to ask any questions and I look forward to your direction if I might just uh it's falling into our lap in some respects. I mean the timing is perfect tied to our tied to the uh sports tourism plan tied to the downtown plan. Um, we've used that facility in the past. Uh, and I think it's a great opportunity for us to start to complete that complex, that sports complex area. So, at this point, all we're really committing to do is to enter into some discussions with them. Correct. So, um, I mean, my feeling is that let's go for it.

So, is the goal to get the property for free and the state gifted to us or is the goal for us to purchase the property or are we hoping for the best that but realistically expect

it the the um conversations that I doing my research have been that it's going to be fair market value so um I don't think free would necessarily be an option that's something that uh again in these conversations going forward if the council does decide to move in that direction we can explor So my I'm not against actually getting in a conversation with the state. What I would state is that our current parks or current facilities are in disrepair. We have plenty of work left to do on what we already do have. And I don't think this city should be purchasing more property when we have too much, you know, back maintenance to begin with. Hutchinson Street Square, do you know how much a roof cost in Hudson Street Square? Um, and I mean, these are all things that we have to do. I also feel like if we were to purchase a sports complex, private I I love everyone in this room, but at the same time, private businesses more efficiently than government does. And whether that's because we all have our hands tied and everything else, so be it. But um I think that would be unless something changes in this equation that is our budget and our current condition of our facilities, then you know I I can't approve another expenditure to buy a facility like this. Um which you mentioned a new tax, right? Um I don't think we're in a position the people of Lo for a new tax either. Um, and I'm going to bring up something tonight which hopefully will add to income into the city. So, I'm not trying to come here to shoot everything down. I'm trying to come with solutions, but

uh among the the top priorities I have, number one is being fiscally conservative. Um, and that doesn't include adding more facilities. So, if we're able to help the conversation from the city standpoint to get a private business owner to purchase the property, great. And do I think we should have the conversation? Absolutely. I think we'd be stupid to be that close-minded. Um, but I would just let the people in this room know I don't want to waste time either and waste staff's time in the sense of getting to an agreement and getting a number and then saying, "Well, we don't want to purchase the property anyhow." So, um, I'm giving you a lot of information here, but a member for district three. That's what I represent.

I follow on um you know, as a city council back in 1910, we decided to buy an electric utility. That turned out to be a pretty good investment. We decided to buy a thousand plus acres for water treatment plant. I think that turned out to be a pretty good investment. We made a lot of risks as a council. This is a building that we haven't even figured out what the negotiated price might be. And to Mr. Bregman's point, the reality is we might enter into a public private partnership for acquisition and development. And so there's a lot of ways that something like this purchase could be financed, but our youth is important. That area of town has become rundown, not for lack of staff's efforts. You don't have the funds to do what you need to, and we will need to work more with private sector in that part of our city on the Great Pole and softball complex. The Legion is already being renovated. We need improvements to Lawrence Park, but we can't turn away from an opportunity like this because it won't come again and we don't know that what could go in there. It could be offered to a private sector. It could be offered to a nonprofit who may want to use it for something that is not a sports or youth oriented facility in that area. So, I think the idea here is that yes, we'll talk with the state, we'll see what they have to say, and then we'll have a big decision to make down the road. And it gives us time. And so, I'm back to the point of we we've got to take some of these issues into our own hands to make sure that we are thinking about the future of our community and our youth. And I think that that's what this project is about. So, I agree with both of you. Um the thing is we have to go forward to find out what the deal is. Right.

Right. What the deal is acres and so forth and how much it's going to cost. And my question to city manager, okay, is we have reserves. Maybe you could answer quite a bit. Can we use a reserve to buy property?

How about I answer that? We're going to be giving you a presentation here tonight and you can see what the condition that we're in. Um, so I appreciate the comments about our, you know, financial health and and what opportunities we may or may not have. Um the fact of the matter is is that based on the government code, the city is being given the first right of refusal and we will you know if directed by council we will go have some dialogue with the state about what opportunities there are for you know acquisition in whatever fa fashion. The the bottom line though is is that staff will not be making any decisions on this. will be giving, you know, um, council regular updates on this and you'll be responsible for making the decision whether to decide go or no go. And so, but I think the opportunity to at least sit down with the state and have a dialogue or discussion about what are the potential opportunities. Um, and you have some pretty creative people on your staff that, you know, will look at ways that, you know, there might be other opportunities than just writing a check. And so I think that, you know, it's it's worthwhile to pursue this and then of course before we you know agree to anything we have to come back to the council to for direction and dec ultimate decision on what to do with it. So, I support pursuing it, see what's happen, see what the cost is and what our options could be.

And I guess I agree with you on the youth portion of it. But, you know, the Grape Festival is a prime example of the point and and narrative that I'm trying to push is we have all these facilities. The Great is a beautiful facility. Has a lot of potential. Okay? If you guys visited the old bath house that they have, it's disgusting. I mean, it's dry rot everywhere that's just been painted over. And God knows I would not take a shower in that thing. Okay? It's not the fault of our city. It's a budget problem. Um, that's one item where I'm literally getting members of our private comm or community together to help fund that andor be the uh uh the leaders to to help head that project. Um, but that's a property that the city already owns and that's also in the area where you're talking about. So, um, again, I don't disagree with your overall thought process about helping spur development and again that area in general, but what I would tell you is spending money on more facilities when we already have a facility that helps youth. That's Loi High's field. They don't have another field. Okay. Um, they even have two sites to sit on. If you go to a typical football game, honestly, I went to one football game for high school in my life. Okay? Um I I was working 40 hours a week. But what I would tell you is on a normal game, in a normal setup, you have two sides of field and you have each seat or each team sit on each side, right? Not the Great Bowl because one side has been shut down because of ADA issues. And so now you have two teams all sitting on the same side and they're known for getting in fights. Okay? And that's that's the predicament that we have in a facility that we already own that's not even ADA compliant. And you know to me it's an embarrassment to our

entire city to have facilities that aren't fully operational. Beautiful facilities, plenty of potential. Um so again I approve and I actually I agree with you. We should look into this. I'm just I'm going to make that statement hold true is I'm not going to vote for us to go in debt with this city and take out dollars that need that have been there for a reason too. Believe me, there's been stuff that I want to buy too from, you know, on as far as fixing up the city, but um taking out our reserves is not is not an option. Um I don't think that's a good fiscal policy at all. So that's it. Thank you. Do we have a sense of what the market value would be for the property?

No, that we that would have to be determined. And then could you speak to what the timeline would be if you engage with the state? How long did this process? I think the letter of interest basically solidifies that uh the beginning of the relationship and um they would be uh talking to us, having discussions with us um and not going out to to the open market. So um and those are questions that I can ask initially like what's the anticipated timeline what they're trying to achieve as well.

Okay. Yeah further dialogue here to move to approve move forward Craig second by council member Bregman. Council member Bregman, yes. Council member Nishi, yes. Council member Craig Hensley, yes. Mayor Promi, yes. Thank you. Motion passes. G6. G6 is to discuss and provide direction to staff regarding data centers in LOI. And this was at the request of council member Bregman, so I'm going to turn it over to him.

Absolutely. Thank you. Um, I'm going to need quite a bit of help from staff as well. So during my trip to NCPa, I was even on Facebook because I sometimes comment to constituents and data centers was one of the items that 411 was on and um people were worried that we're going to get data centers and I assured them no that's there's no data centers coming to Loa anytime soon or that I know of and I don't think Loa is for them and so I'm going to lobby and I'm again with our uh you know everyone that's in an electric utility for our other uh members of NCPA and um really got to learn the situation we are in as a country right now and why data centers are such a big issue and um some of the issues have also happened in their community. Um just to name off a few, infrastructure is an issue. Uh you know, California is not uh a water rich state because of our population and uh some of our infrastructure and um of course who wants to have a data center right next to where they live, right? It's like a a storehouse. It's it it does nothing, okay? Doesn't bring necessarily good jobs to a city. It's a it's a waste of space. And so there's plenty of reasons to not like a data center. Um what I would tell you is I am for actually creating a policy for not having data centers within our city limits that being you know Harney Lane to Lower Sack etc etc. Um but then that's also where I started to think we have an exception to that. Um, for those of you that do not know, we own our own uh power generating facility, LEC, near I5, and that is a 300 megawatt uh power plant as well as another two 50 megawatt

plants. Um, plenty of power and LOI actually owns a piece of that. Okay. Um, it's actually currently the I believe it's one of the most advanced natural gas plants in the state. Um Jeff, can you give us a quick update on the current use of that power generation facility and if that could be increased?

Sure. So, currently uh city of Lodi along with the other uh owners of the Lodi Energy Center uh own and operate the 300 megawatt natural gas plant as well as we're rebuilding a 50 megawatt uh secondary natural gas plant uh with a couple other partners. um that site predominantly the way it's interconnected to the statewide grid is a generating facility. It's not currently modeled in the transmission system as a large commercial or industrial load. Um I know you and I have had a couple discussions about what it would take to provide commercial retail service out there to the property that the city currently owns and uh has within our portfolio. going back to 2021 2022 uh the last feasibility study that was done and I think uh I think Councilman Nakanishi was on the council at the time uh we had basically highlighted for council that NCPA would have to apply and have transmission studies done with the California Independent System operator. one to verify that commercial retail service uh one would not cause undue congestion on the transmission lines where the generation plant currently interconnects. And then the next big piece is that there's not currently the electrical distribution system available for us to offer retail service out there. But that's not to say that that couldn't be developed. So, similar to the estimates where the electric utility is going to be building out our local subtransmission system and three additional distribution substations, we could work potentially on the feasibility with NCPA of building out uh retail capability to provide service to customers out at LEC. Uh but again, there's a lot of steps that would have to be taken to validate. One, that the interconnection agreement that NCPA

currently has to connect to the statewide grid at that point would allow for us to become a net importer of energy consumption and not just be a generator out there.

Thank you, Jeff. Um for those of you that didn't understand that, no. Um Jeff, um thank you very much. Um I would tell you that it is possible. Uh it would take some work to get that area developed. So number one, we have a power gener generation facility near I5 that could be ramped up. Um number two is we have our wastewater treatment center adjacent to that. Um Sean, would you be able to tell us a little bit about that facility?

I can. Um so yeah surrounding that facility is our wastewater treatment plant. We refer to it as white sloohoo because it it distributes into the white slooh um of the delta. So big picture the the entire property is 140 acres um that includes the low energy center and a couple other things in our buildings but um of that 816 acres is for agricultural use. Um so 816 agricultural 726 of that is utilized by our treated water from our waste. So um all the waste in the city goes out there it gets treated to a certain level and then it gets used some of it gets used by the power plants some of it gets used um by the county vector control the mosquito where they grow mosquito fish and then um the majority of the rest of it goes to our crops out there. And so there was a study done back in 2020 or 2022 when we were kind of looking at the hydrogen facility out there and a PG& R&D facility out there and they they they looked at it with a sense of how much do we need uh uh in order to take all our waste, treat it and put it on on our own property. And that number was a minimum of 440 acres. So 440 acres of that uh 726 that takes treated water now is um is what we would still need. We we think having a little bit of a buffer would be prudent, but that was what the study identified um of that kind of farmland that that is is treat a able to be treated by or able to be irrigated by our treated water. We did have about 44 acres earmarked for a hydrogen plant and we also have 21 acres earmarked for the PD training facility. So that kind of leaves us in the ballpark of 220 acres

kind of between that um minimum that the study identified that we needed and what we've already have kind of comfortably earmarked or that we I don't think council would want to get away from those those availability of those properties of that 220. Uh back at this time in 2022 there was discussion of a PG& um research and development facility. They were looking at 130 acres. Um, so I don't know where that sits. That was kind of before my time getting involved in there. I think it kind of um went quiet kind of as the hydrogen plant um got pushed out further. So depending on the kind of the direction on that that property, you'd kind of either have a, you know, between 80 and and 220 acres of current farmland that could be utilized as a different um use while still meeting the minimum requirements of our our treated water being dispersed for irrigation purposes. So So it was a lot of information, but hopefully it kind of kind of tracked with with what you're asking.

No, it did. Thank you very much. is actually information I hadn't heard yet. Um, and what I would tell the council is we do have additional acreage that's not being used next to both of those facilities. Okay. So, among the issues that I do have with the data center, which is does it take power away from our citizens and are we wasting water that we don't really have in California? Well, it's an underutilized plant and it's recycled. Title 22 water that you could not use for consumption anyways. Um and again being next to vacant land, farmland currently. Um I do think this is something the city should look into. I don't think we should have a project like this go through and and not have a hydrogen plant being able to, you know, take place. But um I think there's enough there that we should look into it. So that's why I brought up this item tonight. And again, not really for a new tax, but if there's ways that the city can uh bring in additional funds through long-term leases, then I think, you know, we recently had a a pretty big win also from our uh utility director, Mr. Burkheimer, um with our peaker plant and that plant is really what's keeping Loi afloat when it comes to our budget. So, this is in a way duplicating that. So, thank you very much.

Thank you. So, I I think sounds like there's some potential hurdles that we want to clear with NCPA. I serve as vice chair of NCPA with council member Bregman as our alternate commissioner. And uh on Tuesday is actually hopefully the final round of interviews for the new general manager of NCPA. So hopefully at this next council meeting I'll be able to provide an update of who that GM will be. But I think it's certainly worth to sit down with GM dctor staff and myself kind of talk through what next steps look like here just kind of look at the entire picture there's a lot of things related to data centers some energy prices

I I just want to comment on this you know we do have an economic development plan Mr. Aguilar, do we have data centers in there at all? I I know we have clean energy, which is why I'm an advocate for the hydrogen. I mean, I want to stick in what we have put together for plans, whether it's for the downtown plan or the economic development plan, and not go too far straight. Yeah. So, so there's nothing specific to data centers. We do have a focus area of one of the energy clusters is clean energy.

Okay. And I think that's what we've always hoped for with the hydrogen hub. We put that and attract other clean energy projects and Mr. Nathan was right. PG& had talked to us about an R&D facility there. So I I think that has potential you know where a data center fit fits in with its extreme use of energy of electricity and of water makes me a little hesitant and it doesn't it's not a job creator as Mr. Bregman said. So, you know, we're looking at job creators. That's one of our highest priorities right now in our economic development strategic um imperatives. So, I really we need to focus on the things like that that we said we needed to focus on the downtown plan, the economic development plan, and the priority projects that were already moving forward in that. So I think conversations can be had to get more information, but to me a data center is a back burner item that if we had a private sector entity that wanted to come in and had a really good plan and a really good financing mechanism and you know we thought well this is great. It's going to bring in additional revenue that we need. But I've not seen any of that yet.

So what I would tell you is that data centers right now are being funded like no tomorrow. They're paying $20 million, no problem, for impact fees. I talked to council members and the electric utility director of Santa Clair. They did 60 of these. Okay. Um, that's why I'm bringing it up is this could potentially mean millions. And I don't mean a few. I mean anywhere between five and 20 million depending on the size of these things. So, um, I I am talking about something that could actually revolutionize our budget. Have no doubt about that. Um, this is a serious contender for for what we should be looking at to help our budget.

The city manager comment

educate me. You got no electricity. Where is our closest data center? Palo Alto. That's it, right? Roseville. Roseville. Okay. Okay. My second question is do you want it or you don't want?

So it and it's not that I want it or don't. I don't want it if it's going to take away water from our citizens and increase electrical rates. Okay. But this is why I mentioned the things I mentioned in the order I did was our power facility is underutilized. Okay. This would not increase rates at all. Okay. And if it does, then I say we shouldn't do it. Um, one of the numbers that I had talked to Tony Zimmerman about was anywhere between 7 to 9 cents a kilowatt hour is what it takes to run LEC before you actually pay PG& for transmission prices. Okay. PG& charges their customers 50 cents 40 cents a kilowatt hour. Okay. Um the numbers for what we would charge a data center, they work fantastically and because our natural gas plant is not currently fully in use. We have that availability to ramp up. And again, I'm not saying this is a slam dunk. I'm saying we we need to ask a lot of questions. But what I am telling you is the upside for this is revolutionizing LO ice budget. So right now you're saying this hold up hold up on it.

Yes. But but we should research. Okay. Thank you. We should do a lot of research into this.

Yes. Thank you. So just a couple of clarification comments. Um the item before you tonight is to discuss among you if this is um an effort that you'd like us to spend staff resources on. And clearly um has been shared tonight. There's a lot of intrigue to it. you know, is it is it positive? Is it a negative? And it sounds like it could be a little bit of both depending on where it's located. And so I would just offer to the council that um in order to get that information, we would have to divert resources that we're currently working on some of the other priorities that I'm believe I'm aware of that the council wants us to go into. And if that's the case, that's fine. But I just want to make sure that you're aware that right now in terms of capacity, we're kind of full in terms of those projects. And yet I'm hopeful to come back to council uh end of May, beginning of June with the whole discussion about future growth areas, you know, per our meeting at the strategic plan update discussion. And so, um, just want to put it out there that as you you think about this opportunity and maybe it is a win-win, but we're talking about, um, a lot of unanswered questions as you mentioned that we would have to put a lot of staff time in to explore and then determine whether or not if that is the the right way to go, how do we uh, you know, memorialize that? You know, are we looking at ordinances or something along those lines? amendments, the codes, and that sort of thing. And then there's the actual implementation piece. And so to implement that, how does that relate to your other objectives for those other annexation areas? Because the same group of people that you're talking about working on this are the same group of people that are working on those annexation areas, competing for those same resources, not just staff, but also infrastructure and funding for those things. And so I just want to put that out there that um you know, is it a

worthwhile topic? Absolutely. Because it it is the future and and it's it's um a possibility for for Loi. Um and maybe we can have a better uh discussion and understanding of what all is is necessary. But I would need your consensus to go ahead and explore that more. But I would also like to offer that when I come to the council with the discussion about you know growth areas that you know and and the the plan for that or I should say maybe that's another opportunity for the council to revisit where is your priority in terms of new growth and and revenue opportunities. So I just want to put that out there that um we have a couple of you know potential competing demands. And so as you you know give your input on that that's what we'll be looking for as to what is where you really like us to focus on.

I I do not want to distract what we've already got on our plate. I think that's the biggest priority. Now, if you know our two representatives to NCPA want to have separate discussions with NCPA folks on their time, then I don't have any problem with that. But I think Mr. Ferheimer, I think Mr. Aguilar, um I think Mr. Nathan, I think everyone is kind of up to here with projects that we've already identified as priorities and we need to let you move forward with those because we told them this is we just the whole strategic planning and uh came up with our priorities. So, I want to stick with that. We were here. We focused on it. That's where we're headed. So, I think it's perfectly fine if our two representatives want to have that conversation with NCPA, get more information and come back to us. But I really don't want staff diverted.

My issue is your solution for all these plans is another tax. That is not the solution. Okay. Then why do you keep I don't saying we need to do it.

You just mentioned twice I've heard it at council this year and what I'm telling you is this is a possible solution for funding. So I agree with you things need a change in loi. I'm just I'm not for attacks and this is a possible solution. And what I will tell you is Lisa, you work harder than anyone else on the council. You really do. Um, you're very missiondriven and I think we've set things in motion as far as strategic visions that you are correct on. And do I think this kind of goes outside that box? I do. And can that be unfair? I don't disagree. I apologize for that. Do I think this is a big enough opportunity where we're not even moving forward with it? But just like the American Legion or not American Legion, um the Armory, I don't even necessarily agree with spending the money, but do I think it's worth our time to look at it and hopefully spur some other development? Yes, I approved it. I'm hoping for that same treatment in this.

Well, and that's why I agree. Have a discussion with NCPA. Yeah. So, I don't think we need council direction for necessarily. I'm happy to work with you, Council Member Breman, and GM whoever that is once that's settled and staff time permitting if our utility director is able to jump in pull that together just to get there and perhaps something thank you G7.

Um before we move on we just need public comment on this item sir. council. Uh I'm pretty familiar with this particular topic. I agree. You should do some desktop top analysis on this. If you can generate lease money for land and you can generate power money, I think it could be a good economic driver. You're not going to get any jobs out of this. Um and My understanding is our strategic plan, our economic development plan includes tech sector, does it not? So it is part of your plan. So here's an opportunity where you could bring in a third party. You can bring in a a commercial operation that would that basically cover all the costs and generate long tune long-term revenue streams. I don't know that that's true, but it's probably worth at least taking a look at it and just doing some quick math and bringing it back to council and figure out if if there's this really has an opportunity, how big is that opportunity?

Thank you. Thank you.

Um so, good evening council. There's a lot of concerns. Um the energy drain is a part of it. If you're going to be using what basically the equivalent of about 2,000 homes worth of energy to do a power uh to do a data center. Is that going to hamper growth in other areas? So, it's something to consider. Uh and I get it out at I5 we're not going to worry so much about the noise and the light pollution, but there is other serious pollution causes from the generators and the things that work with these. So, I think the environmental impact is going to be a really important thing to look at here to make sure that we're not uh basically, you know, we love because it's a beautiful place to be and what we don't want to do is have an impact on it that's going to take it away as we already point out there's no jobs here but yes we could probably get something back from leases but is it worth the money if it means it's going to cost us you know quality of life and I just want you to take real serious think about that before you move forward on something like this

thank you any other public comments anything online thanks everybody uh G7 G7

G7 is to receive presentation regarding fiscal year 2526 third quarter budget review and fiscal year 2627 study session number one and I'll turn it over to our budget manager for that presentation. Thank you Olivia and I'm just hoping my presentation pops up. Yay. Okay. Good evening, Mayor Yapz, Mayor Prom Hothi, um when he comes back. And council members, tonight I will be presenting the fiscal year 2526 third quarter budget review along with the fiscal year 2627 general fund budget study session one. Tonight's presentation is divided in two main sections. First, I'll walk through our third quarter financial results, including revenue trends and current projections. Then, I'll transition into the fiscal year 27 budget development process, including key challenges, assumptions, and our five-year forecast. This slide highlights our general fund revenue performance through the third quarter as shown third quarter of fiscal year 26. As shown, we have received 67.9% of our projected annual revenue to date. At first glance, a few categories appear lower than expected, especially given the 75% of the fiscal year has been completed. Um, these included property tax, property tax in lie of vehicle license fee and community facilities district revenue. However, this is largely due to timing. These revenues are typically distributed twice a year with payments arriving about two months after property taxes are remitted to the county. And then the second round of payments is expected by June.

Sales tax and measure L also um are in the rears by two months. They follow a similar pattern. While collections occur monthly, there is generally a two-month lag between the time of sales activity and when the revenue is received. The electric utility payment in lie of tax was transferred as one lump sum at the beginning of the fiscal year which is why it's at 100% actuals. Transfers for internal cost of services are similar and most transfers were completed at the beginning of the fiscal year. And then I want to clarify property tax in lu um BLF is a funding mechanism established by the state of California in 2004. there was a portion of local vehicle license tax revenues that was replaced and increased property tax allocations to cities and counties. So, I just want to explain what that was. And then the other revenue category, this includes items such as rent, investment earnings, licenses and permits, parking fines, and community improvement related fees and fines. So, here is a pie chart to visualize the fisc year 2526 revised budget. And I want to highlight that property taxes comprise of 17% of the overall general fund revenue and combined sales tax is 26%. And I'm going to do an overview here of the property tax. It continues to be one of the city's most stable and reliable revenue sources. Last fiscal year, we received approximately 24.5 million, reflecting modest growth. And although the current year projection shows a slight decrease year-over-year, this is largely a result of conservative forecasting practices, the revenue division typically applies a standard growth factor when building projections. And in this case, the actual fiscal year 25 revenues exceeded those projections, which makes the fiscal year 26 estimate

appear lower by comparison. So based on fiscal year 25 strong performance, we anticipate that fiscal year 26 will also come in above projections. And with that in mind, fiscal year 27 budget has been adjusted upward accordingly. So as shown in the trend line, property tax revenues have grown steadily at an average annual rate of about 4.9% since fiscal year 22, continuing to provide a dependable foundation for the general fund. Sales tax tells a more mixed story. While total revenue remained reflect um related relatively flat year-over-year, we are seeing declines in several key sectors including autos, fuel, and construction. These declines are partially offset by growth in restaurants and hotels, but overall the trend since fiscal year 22 reflects a slight annual decrease of 1.32%. And I just want to let you know that these numbers are um gathered from HTL who um handles our sales tax projections. So now we're going to move into expenditures. This slide shows how expenditures are distributed across departments. Public safety continues to represent the largest share of general fund spending followed by non-EP departmental. The non-EP departmental expenses includes transfers out to parks and um capital parks operations and capital in the amount of 7.7 million and then library operations in the amount of 2.4 million. It also houses our transfers out for replacement funds and our general fund debt or bond obligation. Um so that those are all included in that. Overall expenses, I'm sorry, overall expenses are generally trending as expected at this point in the fiscal year.

So looking at expenditures by category, same expenditures moving from departments to showing it by category. Salaries and benefits make up the largest share of costs and are right on target with 74.2% spent through the third quarter. Supplies and services appear to be trending lower than expected at this point in the year. However, this is primarily due to the timing of ARPA related expenditures which are included in this category. So to date, only 1.2 million of the 5.2 million budgeted for ARPA has been spent. Also, you'll notice that certain categories such as general and property liability insurance as well as transfers out are already at 100% of actuals. Um, and this is very similar to revenue. It's because these costs are processed as a lump sum transfer at the beginning of the fiscal year. So these transfers include funding for parks, um library operations, parks capital replacement funds, and the city's general fund or um debt or bond obligations. So this pie chart reinforces that personnel related costs remain the primary driver of expenditure at 61% of the overall general fund budget. Growth of expenses in this category including Kulpers's retirement benefits and medical benefit costs will continue to be a major factor in future budget decisions. So based on the current trends, we are projecting that expenditures will exceed the original budget primarily due to salary and benefit increases associated with recent approvedus. And this is the revised budget that was approved at midyear. As shown in the table, the fiscical year 26 budget is currently projected to be in a deficit of 3.6 million. However, council's decision to lower the pension

stabilization funding target from 80 to 70% has created additional flexibility. This change is expected to result in an estimate estimated 8.4 million in unreserved fund balance at year end. So, this available fund balance will be critical in helping to offset the increased costs assoc associated with meus over the terms of those agreements. So basically we're going to use general fund um unreserved fund balance to carry us through to the for the costs of the currentus. So that was the overview of the fisc year 26 third quarter budget review. So now I'll be transitioning into the fisc year 27 budget discussion beginning with our overall roadmap and timeline. Before I do that, are there any questions on the third quarter budget review?

Yes. Um, uh, back to your unreserve fund balance. So, in essence, that is taking us through three or four years of two more years. Just two more years of the agreements. Yes, it'll get us through theou expiration dates.

Okay. All right. Thank you. Okay, so the budget road map. This slide outlines the schedule for budget study sessions and adoption. Tonight is the first session focused on challenges and the long-term outlook. Future sessions will go deeper into the enterprise and special funds on May 20th, general fund and replacement funds on June 3, and I will also um give quick synopsis of the balancing act um responses that we're getting for our community outreach and then before the citywide budget adoption um on the June 17th. So um with budget challenges, we've grouped the city's budget challenges into three main categories in this slide, and those are quality of life, foundational, and structural. The quality of life challenges reflect the growing expectations and needs of our community. These include increased demand for services, the need to support economic growth and job creation, improvements and expansion in parks maintenance, enhancements in public safety services, and managing overall city growth and development. Foundational challenges focus on the city's long-term fiscal health. And this includes maintaining fiscal sustainability, growing revenues to keep pace with service demands and addressing ris rising labor and capital costs. The structural challenges are tied to the underlying cost drivers of our organization and these include increasing operational indirect and insurance costs, ongoing maintenance and improvement of city facilities, fleet

replacement needs, and ensuring the community facilities district rates adequately offset the costs associated with growth. While these pressures are not unique, they are significant and require ongoing prioritization and strategic decisionmaking. In developing the fiscal year 27 budget, we incorporated current labor agreements which required programming of 4.3 million in the fund balance to support salary and benefit increases. We also implemented a one-time workers compensation rate holiday to provide almost 1 million in relief to the general fund and 218,000 to other funds. Additionally, we eliminated convenience fees approved by council on April 15th with still the plan on implementing those that pass on um on effective July 1st. In this comparison of fiscal year 27 to 6 ARPA funding has been removed as those funds are allowed to roll over from year to year and are completely reimburseable. So even with the cost cutting measures that we will be highlighting in the following slides, we are projecting an increase of 4.3 million in salaries and benefits. This increase will be balanced by programming an equivalent amount from general fund balance. So breaking down that 4.3 million increase approximately 1 3 million is attributed to salaries, 1.4 million to medical insurance, and 1.3 million to the city's PERS liability. The initial and this is unfunded requests is what we're um moving to and these are initial department requests put the general fund in a projected

deficit of 11.5 million. So when all of the um projections were entered by the departments and we looked at our revenue to our expenses, it we were in a deficit of 11.5 million. So to help close this gap, several requests could not be funded. And these include reductions to the fire department's vehicle replacement fund contribution for an engine, a brush track, and other staff vehicles in the amount of 1.5 million. I do want to note though that the straight line depreciation contribution is still included in the current projection. Um so they will get approxim under $500,000. So there are vehicles that they can still um purchase but just not all of the requests that they had. In addition, the the proposed 132,000 contribution to the fire equipment replacement fund was eliminated. So, the only equipment replacement fund that is um right now going to be funded in fiscal year 27 is for our IT costs. There are no funds available to contribute towards a proposed and needed facility maintenance fund. The fiscal year 27 request identified current need for phys um city facility maintenance and it that was 2.7 million. So that's the current need and the request that was proposed. Above and beyond these cuts, departments were requested to reduce their budgets um in the total amount of 2.8 million. So, in addition to um cutting those, the departments were asked to cut a portion of the 2.8 million out of their budgets and we're still working through that today.

Um it is hard for a lot of departments that have small budgets and not a lot of um excess. So, but that is what we will get to um at the end of these reductions. So far, the reductions that we have received and departments that have been successful in cutting 100% of the ask were achieved through cuts to overtime, part-time staffing, operational expenses, and parks capital. Additional detail regarding these reductions will be presented during the individual department budget presentations in upcoming meetings. Lastly, the budget was not able to accommodate any new general fund positions. And I'll list the positions on the next slides and highlight that these positions are requested to meet strategic plan needs and to meet department production and community needs. So here's the first slide. While these requests are not recommended due to the city's current fiscal constraints, many were submitted to address increasing service demands. operational efficiencies, secession planning, regulatory requirements, and strategic plan priorities. The requested positions and reclassifications span nearly every operational area of the city of the general fund. Mostly, human resources requested a new senior administrative clerk confidential position, while revenue requested a new finance technician position to support growing workload demands. The city attorney's office requested a new parallegal position and a reclassification of the deputy city attorney 2 to assistant city attorney to support organizational needs. The city clerk's office also proposed reclassifying the deputy city clerk position to assistant city clerk. The

city manager's office requested two new economic development analyst positions to advance economic development initiatives and support business growth opportunities within the community. Fire requested a new fire inspector position and a deputy chief of administration position to address operational oversight and administrative responsibilities. Police submitted the largest number of staffing requests, including seven new police officer positions, a realtime information center specialist, a downtown bicycle officer, and that would be an addition to address public safety and community policing needs. Additional requests include converting several part-time positions to full-time status and multiple reclassifications intended to improve operational support, supervision and efficiency within the department and to address expected operational growth when the new animal shelter opens. Parks, recreational, and cultural services requested 11 point.2 two new full-time park maintenance worker positions along with several reclassifications and full-time conversions to support increasing maintenance demands, recreation, recreational programming, and facility operations. Public Works also submitted several new position requests, including engineering, facilities, fleet maintenance, and warehouse support positions, along with a proposed reclassification to support departmental workload and secession planning efforts. Although these positions are not funded in the fiscal year 27 proposed budget, they represent identified operational needs, the departments believe they are necessary to maintain service levels, meet community expectations, and support future city growth.

So that with that, um, finishing up our challenges, I'm going to go into the draft five-year forecast. And this is a draft because again, still manipulating um some of the projection due to the $2.8 million in cuts to departments operational. Um but I wanted to take a pause and see if there was any questions or comments from department staff.

Thanks Janelle. Uh I did want to point out one of our requests I know there's lots of requests on here. Um, one of our requests for engineering technician one two was specifically for our development services team with the intent of trying to reduce our plan checks. Uh, we know that's been a concern for a while. Um, we did request that position at midyear. It also didn't make it in. Um, but I just want want you guys to know that that our engineering technic technician one two that was the specific request for that. Okay. So, now that we resume we reviewed the 27 budget challenges, I'll now move into the five-year forecasts. Um, this provides a longer term view of the city's financial trajectory. So, moving into revenues, the fiscal year 27 forecast reflects modest overall growth, but also highlights some of the economic and structural challenges the city continues to face. Sales tax revenue, which is one of the city's largest discretionary revenue sources, is projected to decline slightly by approximately 6% compared to fiscal year 26. This reflects changing consumer spending patterns and slower taxable sales activity. However, Measure L revenues are projected to increase by 5.3% which helps offset the slight decline in the city's base tax sales tax revenues and provide some additional stability within the general fund. Property tax revenues continue to remain strong and are projected to increase by 4.7 year-over-year. Property tax remains one of the city's most stable and dependable revenue sources and continues to support ongoing city operations and services. We also increased the projection for the property tax in lie of vehicle license

fees by approximately 15.3% to better align the budget with historical actual revenues received in private prior years. And that's something I mentioned before in the property tax that um this year it looks like we're going down. we definitely won't. So, this is a true up for that property tax in lu revenue um to really show to better reflect what we will actually receive next year in that um revenue category. So on the other hand, other revenues are projected to decline primarily due to the expiration of the fire department's assistant to firefighters grant or AFG grant funding that used to be programmed in the general fund and now that that grant has gone away and we don't have that funding to offset training um and overtime costs that has um lowered our revenue overall of revenue. And then overall general fund revenues are expected to grow by approximately 2.6% in fiscal year 27. While this is positive growth, it is important to recognize that revenue growth continues to lag behind the rate of increase in expenditures, particularly in salary, benefits, pension obligations, insurance, and operational needs. And so now I will go into the expenditure side of budget.

Quick question before you turn the page. Yes. for sales tax revenue forecast. Isn't measurel sales tax as well? Yes. Okay. So, how did one go down and one go up if they're both for sales tax?

Yes. And I and it's mostly because of online sales goes into a county pool. And so those can are are brought back to us in the measure L um special tax. And so those were actually higher than just the sales tax regular revenue. But I do want to say and I do have a note in one of the um slides after this that we will have a meeting with measure and a new quarterly meeting um before the general fund presentation where we will have updated projections um with a new quarter's sales. Um so I'm hoping that at that time maybe there'll be a change. We'll see. Um, but we will have brand new information to have a closer estimate to what our fiscal year 27 revenues will be for both sales tax and measure L sales tax. No problem. Okay. So, on the expenditure side of the budget, the city continues to experience significant cost pressures particularly in personnel related expenses. One of the largest increases in fiscal year 27 is related to salaries. These increases are primarily driven by the market median adjustments that were negotiated through the recent rec recentus. These adjustments are important to help the city remain competitive in recruitment retention especially in today's labor market. In addition to salary increases, the city is also seeing higher pension costs through increased pers liabilities associated with theus. Um but like many public agencies throughout California, rising retirement costs continue to um place ongoing pressure on the general fund and long-term financial planning. The city's benefit liabilities are also increasing because of theou changes.

They're including higher medical insurance contributions and related employee benefit costs. So to help offset these rising personnel costs, departments um are having to implement the reductions. So the 2.9 million um is helping to balance the budget. These reductions include cuts to overtime and part-time like I mentioned earlier and operational spending. So lastly, transfers to both um parks and the library are also increasing. So the transfers out for general fund support for both of these funds and or and departments um those are also increasing because of theou negotiations but the offset h with the $4.2 million has taken this into account also. So the $4.2 to fund balance um contribution to help balance the fiscal year 27 budget includes those costs from library and parks. Okay, so here are the assumptions before we get to the um forecast. I want to talk through the key assumptions used in developing the model. These assumptions are critical because they establish the long-term expectations for both revenue growth and expenditure increases that drive the city's financial outlook. Starting with revenues, the forecast assumes secured property tax growth of approximately 4.6% annually beginning um in fiscal year 28. Property tax continues to be one of the city's most stable revenue sources and reflects continued assessed valuation growth throughout the community. sales and use tax revenues are projected to decline. Um but then I we are projecting a

stronger performance in out years and a growth of 3%. This approach reflects continued economic uncertainty and a more conservative long-term outlook for consumer spending activity, but again we should have more information in the middle of May. So the transient occupancy tax or hotel tax revenue is projected to increase in fiscal year 27 with an 8.6% growth before returning to an annual growth assumption of 3%. And we can adjust that when actuals come. Um I actually have been working with Louise on um getting the projection or the actuals and projections of the toot. Um but it is a con you know we have to understand that we have to be conservative and because 8.6 growth is pretty large. Uh property tax in lie of vehicle license fees is projected increase by 15.3% and again that's a one it's a it's a true up of um what we didn't um project this year in fiscal year 27. Um we're going to realign with historical annual receipts followed by ongoing annual growth of approximately 6%. The CFD um revenues continue to show strong growth assumptions and due to housing demand within the city but is conservative in the outy years due to the need for annexation and then measure all revenues are projected to grow by the 5.3% but then um we bring them to the 3% annual growth in future years. So other revenues show declines in fiscal year 27. Again, this is um ma mostly due to the loss of the AFG grant. The and um also the we had one-time funding for rent for the courthouse. It was a true

up for um prior years. So that is included in fiscal year 25, which is why it makes it look like we're decreasing. But we have on the outy years the 2% increase in other revenues. So on the expenditure side, the assumptions reflect continued pressure from personnel and benefit related cost. Salary expenditures are projected to increase by 9.4% in fiscal year 26 due primarily to negotiated increases and market median adjustments. growth then moderates in future years to more sustainable levels of 2.5% and 4.1% both with PERS normal cost and unfunded acrewed liability payments um show significant increases throughout the um forecast period particularly in fiscal year 26 and 27 and again those are because um the city took on the burden uh or took back the burden of the employee employee or cost of PERS. Other employee benefit costs are also projected increased due to rising healthcare and benefit obligations when we took a percentage instead of a flat fee or offered um through the MUS. Operational expenditures fluctuate significantly due due to budget balancing measures and the restoration of operational funding needs before normalizing to approximately 5% annually growth in future years. debt or bond. Our debt or bond service assumptions are based on the actual repayment schedules um which we have to through the life of the bond. Um while transfers remain tenatively stable throughout the forecast period. Overall, these assumptions reflect a conservative long-term outlook and continue to demonstrate the structural imbalance between revenue growth and expenditure

growth that the city will need to do to address in future budget cycles. So now looking now at the five-year general fund revenue forecast. The city is projected to experience mod modest but steady long-term revenue growth over the forecast period. It is important to note in this forecast that we have excluded the 2.8 million in um rental income associated with the peaker plant. Um the pe the this excludes a program Oh. Um, and the reason why is that money is still sitting in a reserved fund um for the possible purchase of the plant um at the end of the um contract period. It also excludes the program use of the 4.2 million in fund balance to offset related increases and also excludes ARPA funding. So the 4.2 2 million is excluded because this isn't an actual revenue. This is programming fund balance that we're lucky to have. Um, so I didn't I don't want it included in this because it's not a true revenue source for our forecast. So for fiscal year 2627, total general fund revenues are projected at approximately 87.5 million. This represents a relatively flat increase of approximately 0.9% compared to the fiscal year 26 estimate. While revenues are still growing, the pace of growth is limited. Beginning in fiscal year 28 and continuing through fiscal year 32, the model projects more normalized annual revenue growth of approximately 3.4% per year. And then by fiscal year 32, total general fund revenues are projected to reach approximately 103.5 million.

Property taxes continue to show growth throughout the forecast period and they're increasing approximately 17.3 million in fiscal year 27 to over 21.6 million by fiscal year 32. And then this reflects continued assess valuation growth in residential development activity within the city. sales and use tax revenues are projected to decline in 27 following um with stronger um they had stronger prior year performance for sales tax. Um and again our sales tax consultant HDL provides the city with these projections and we will have an updated quarterly review in the middle of May to update these changes in projected revenue. um measure elk revenues continue to provide an important and stable funding source for the city and are projected to slightly increase throughout the forecast period. Property tax in lie of vehicle license fees also shows projected growth over the next five years and continues to be a significant general fund revenue source. And then transfers in and CFD revenues continue to slightly trend upward as development activity expands and the 2% increases build year-over-year. So the CFD does have a 2% increase. So those are the five-year forecast in revenues. So next we are going to expenses. The city continues to face significant structural financial challenges driven primarily by rising person personnel related cost. This projection includes 1 million rate reduction from workers comp and excludes 2.8 million in expenditure related to the peaker plant revenue. And again, because that goes to um the

it's not we're not actually spending it. It's going into the fund balance. So of the Oh, I'm sorry. It takes out the 2.8 And then 560 of that is going into parks and wreck. But again, we're not observing that because parks and wreck is not included in this 5-year forecast except for their transfers out in the growth of those transfers out. So per policy, this is set at 8% of revenue. Catastro catastrophic reserves are prioritized, then economic reserves, then unassigned. For fiscal year 27, total general fund expenditures are projected at approximately 93.3 million compared to projection revenues of approximately 87.5 million. This results in an annual operating deficit of approximately 5.8 million before the use of available fund balance. Over the 5-year forecast period, expenditures continue to grow steadily, reaching approximately 110.5 million by fiscal year 32. The largest drivers of this growth continue to be salaries, pension costs, health care benefits, and operational inflationary pressures. Salary expenditures alone are projected to increase from approximately 38.3 million to nearly 43.6 million by fiscal year 32. PERS costs continue to represent one of the city's most significant financial pressures. combined. PER's normal cost and unfunded acred liability payments are projected to grow from approximately 16.5 million in fiscal year 27 to approximately 19 million annually by fiscal year 32. Other employee benefits costs including healthcare and related obligations are also projected to continue increasing throughout the forecast period. Operational expenditures are projected to rise from approximately 20 million in

fiscal year 27 to 25.6 by 32 due to inflationary pressures, rising service costs, and ongoing operational requirements. As a result, the forecast shows ongoing annual structural deficits throughout the entire forecast period. Annual operating deficits are projected to grow from approximately 5.8 million in fiscal year 27 to nearly 7 million annually by fiscal year 32. So although the fi for the five-year forecast shows ongoing structural deficits within the general fund, the city does currently maintain several reserve and stabilization funds that provide short-term financial protection and help support long-term fiscal stability. So the first two categories shown here on the city's catastrophic reserve and economic reserve. The forecast shows these reserve balances remaining relatively stable through fiscal year 29. And again that's because we do have additional fund balance that we're going to draw draw down from for theus. However, beginning in fiscal year 30, the forecast assumes those reserves would be fully depleted if structural deficits continue without corrective action. The city also maintains separate measure L reserves tied specifically to Measure L revenues and so those um are staying stable throughout the sp the pension stabilization fund which serves as an important investment to help offset future pension cost increases and manage long-term PERS liabilities is projected to gradually decline over time as it is utilized to help stabilize the pension related expenditures and support the general fund. So when and again this is in this projection when combining all reserve

and stabilization categories the city's available resources are projected at approximately 46.8 million in fiscal year 27. However, as ongoing annual operating deficits continue throughout the forecast period, those available resources are projected to decline significantly falling a to approximately 18.5 million by fiscal year 32. It is important to note that if the city needed or wanted to start utilizing the pension stabilization fund in fiscal year 28 that the budget and fiscal policy would need to be amended by council to remove the 70% funded threshold. In addition, the PERS actuarial has the annual unfunded liability increasing annually until 2035 where it caps then steadily declines until 45. So that and I put that note because we'd have approximately 18.5 million if we kept on this trajectory and we did um and council did decide to draw down on the pension pension stabilization fund. I wanted to note that our p our unfunded liability payments are going to keep rising until they cap at 2035. Then after 2035 they will they will start declining every year until 2045. So that is PER's projection as of um the current fiscal year. So this chart provides a visual overview of the city's available reserve and stabilization resources throughout the 5-year forecast period. The purple line reflects the combined ending balance of the city's major reserve categories and demonstrates the long-term financial trend if current structural deficits continue. As shown on the chart, available resources are projected to peak at

approximately 47,000 or 47 million in 27 um and then the and then um steady decline throughout the remainder of the forecast. The chart also includes the city's catastrophic and economic reserve shown in orange. The measure L catastrophic and economic reserves are shown in green and they remain uh relatively stable and continue modest growth throughout the period. Um measure L does have their own and I want to explain this to you. Measure L does have their own um fund balance and if we leave the expenses as they are in the measure L fund then they will continue to have a fund balance. Obviously, um we use measurall has a lot of law enforcement, fire, um has parks expense, it has library expense, um and we can always move expenses out of measure L into our general fund. So, we can keep a fund balance in it, but at the end of the day, this model has it staying as is. Um, but we that is fund balance that can be used per the policy if we need it as well. But it's it's ve it's not it's a very low balance. It's 1.6 million.

Janelle, do we have a percentage that needs to stay in that fund balance? It's eight and eight also. It's so it's 16%. Okay.

Of um annual revenues. Got it. So here's a second graph and this one is just depicting the pension stabilization fund. So this actually shows um our stabilization fund and only because obviously we do are still going to get some revenues from um our investment earnings. Um but we reached the peak balance this year. This is actually our balance as of um March of fiscal year 26 and I I update a report every month with our earnings or our losses. Um this growth is primarily driven by the annual investments like I said earnings which continue to generate additional resources within the fund. Um but if council decided if we want to help use the pars fund to help with our structural deficit they can't. You can choose um again to amend the budget policy. So if we started drawing down on it and it assumes you that we will have to in fiscal year 28 um to offset the pension related expenditures within the general fund. So the annual draw draws from the fund are projected to begin um at approximately 4.6 million and gradually increase to approximately 5.2 million annually by fiscal year 31. And then even with these plan drawdowns, the pension stabilization fund is projected to maintain a substantial remaining balance throughout the forecast. Um by fiscal year 31, the projected ending balance remains approximately 16.8 million. Um, so yeah, if council wanted to start drawing down on the stabilization fund to help smooth the impacts of rising PERS costs and reduce pressure on the ongoing city operations and service levels, it is important to recognize that this fund is a limited resource and

is not a permanent solution to the city's long-term structural budget imbalance. So with that, that concludes study session one and I am happy to answer any questions a council may have regarding any of the topics discussed tonight. Um the ARPA funds the they're not programmed in but the expenditures are not programmed in either as to what we're Okay. So that's they're balanced out. Yes. All right. Got one question.

Fiveyear forecast. Would you put that one up where it has revenue, expenses, and minus Okay. Right. This good. Okay. At the end of the fiscal year, uh, our we spent 4.2 million more. Is that correct? Is that right? Yes.

It's interesting. Several years ago, we projected this. It was it would be good right now, but We we must have spent quite a bit of money, haven't we? Huh? During that time, the other question I have is we have reserves. Can't I'm asking this question. I'm not saying we're going to use it, right? You you you stated pension stabilization, but how about the reserves we have? We can use that, can't we? Yes. We are going to use those through the mo to cover theou um escalated expenses that we don't have the revenue to cover as of right now. How long are we going to use the reserves? We have it. We will get through the next two years.

That's what we're going to do. Yes, we'll get through them. Is again is if our projections are correct because the only the thing that could adjust that is let's say our expenses come in way lower than what you know the departments say they needed which is doubtful. Um but we could it could increase our fund balance a little bit. It depends on what the actuals come out to at the end of the year, but as of right now, the projected fund balance that we will have at the end of fiscal year 26 will be 8.2 million. Thank you. Yes. Can you go back to the slide about uh sales tax revenue increases and decreases?

Yep. Nope. Uh I think that was the one. There's enough charts in here, that's for sure. I I know. Um,

this is expense. I think you want this. I think this is the one right here. Yeah. Yeah.

Yep. Right here. Okay. So, one thing that I've seen since being on council is we do put in these even numbers, right, as far as what we're expecting in 27, 28, 29. And um, obviously that's going to change. uh property tax um seven and a half% increase five and a half percent decrease 15 and a half% increase then 66 across the board. Um I I guess what I'm trying to explain to both the public and our you know council members etc. is it's not going to be these exact numbers. Okay, we've seen it before. If you take CO for instance, our largest surplus in the city's history seven or 9 million, right? Why? What? Why did that happen? Well, we didn't expect sales tax to increase, but it did. Okay. In our expenses, we were cutting down. Um, so while I do believe we need to look towards becoming a more efficient city, um, thinking about income, I I will state I've seen these graphs change before. And so, again, uh, property taxes only increasing by 2%. I think that's probably I'd poke a little bit more. Um, in the last three years, we've seen 40% increase, but we're only showing 2% now. And that's because housing prices have plateaued. But again, as people are buying and selling more houses, it's actually not about housing prices increasing right now. It's about how quickly they're getting turned over because that's when you reset your your um tax base for your house. So anyways, um there's a couple things I think we should poke around on this, but what I tell people in the crowd is don't be worried. We've seen this before. So thank you.

I'm going to stay on the same slide. Um the property taxes, CFD growth reflects continued demand for residential housing. So where are we getting those numbers in light of the fact that we didn't see a huge number of permits issued last year? We do have soi areas that we can anticipate future housing development. So how do we knowing where we are with our housing market right now which is you know just fairly flat. I mean we don't have a lot of new housing going in. Where do we get that number? Well it's two years in a rears. So we're taking permits that were pulled in in fiscal year 25.

You're going back another year. Okay. So you're estimating based on permits pulled back in 2425, we're projecting two years ahead. Is that correct then? Okay. So because we don't know what the future holds, we're standing at the 2% 2% 2% until things change because that is allowed. Yeah, we are allowed a 2% increase every year on the CFT fees. Okay. All right. Further council comments. Are there any public comments on this? That's the end of your presentation. Yes, it is. Great. Thank you, Janelle. Thank you.

Yeah. Thank you. Could we, if you haven't already, could we get a copy of this? Of course. Yes. And then for other study sessions, is there any chance we could if we could get it some time in advance? Yes, definitely. Great.