City Council - Regular Meeting

All right. Good evening, everyone. Thank you for joining our regular city council open. The The meeting is is jurisdiction, and members of the public may provide comments as follows. In person speakers will be called first.

Speaker cards are located at the back table in the council chambers and must be turned into the city clerk here at the dais. Please be sure to indicate the agenda item number which you wish to speak on. Attendees who have joined us by Zoom will be called to speak after the in person comments have been given. Detailed instructions for public comment will be provided on the screen when the time for public comment begins. And if there is a high volume of public comment this evening, we may decrease the time allotted for each comment or limit the total time for public comment.

In the event this occurs, please feel free to send your full comments to the citycouncil@councilatredwoodcity.org. Written comments are not read aloud, but will be made part of the final meeting record. And I will now turn it over to our city clerk to call the roll.

Good evening. Council member Chu. Here. Council member G. Present. Council member Howard. Here. Council member Padilla. Here. Council member Sterkin.

Here.

Vice mayor Aiken. Here. Mayor Martinez Tobias. Here.

Thank you.

Great. Thank you, everyone. And we'll go to the pledge of allegiance. Councilmember Padilla, can you lead us? Thank you, council member.

We'll move on to item four. And item four is not applicable tonight, so we'll move on to the next agenda item, which is item number five, presentations and acknowledgments. And our first recognition this evening is to honor Women's History Month in annual observance to highlight women's roles and contributions in securing equity, equality, economic, and social justice. And whereas excuse me. And I'll read a few of the whereases of the proclamation.

Whereas the city of Redwood City designates the month of March as women's history month, American women of every race, class, and ethnic background have made historic contributions to the growth and strength of our nation in countless recorded and unrecorded ways. And whereas American women were particularly important in the establishment of early charitable, philanthropic, and cultural institutions in our nation and served as early leaders in the forefront of every major progressive social change movement. And whereas we commemorate all of the wonderful women of Redwood City, both past and present, their lasting impact and influence will forever be a staple in our community. Now, therefore, be it resolved that I, Elmer Martinez Caballos, mayor of Redwood City, on behalf of the city council and the people of the city of Redwood City, do hereby proclaim March 2026 as Women's History Month in Redwood City and encourage all residents to observe this month in honor of the history made by American women. And it's now my honor to invite Andrea Jones, inductee of the twenty twenty six San Mateo County Women's Hall of Fame to the podium to accept the proclamation and share some remarks.

Welcome, and congratulations.

Good evening everyone. Thank you, Mayor Svios and the City Council. I am just it is such a privilege to accept this honour in honour of Women's History Month. We've been residents of Redwood City since 2008 and I'm so happy and just work really hard to try and make our community a better place. And I know that there are so many fabulous women tonight here in the chambers that lead their lives in the same way and also on the city council and city staff. So once again, thank you so much. And, yeah, I appreciate the honor.

Thank you, Andrea. We have a proclamation, so it'd be great to get a photo. Thank you, Andre, again for being here, and congratulations. And please extend our congratulations to the other inductees who couldn't be here. I know Terry Nagel, Allison Suzuki, Danica Gonzales Johnston, and Amani Schroff are all being inducted with you.

So please extend our congratulations and thank you for all your great work in the community. With that, we will now move on. Excuse me. Item five b. We are celebrating Lunar New Year, which began Tuesday, February 17, and honors ancestors welcomes spring and signifies turning away the old to embrace a prosperous New Year.

I'll read a few excerpts of the proclamation. Whereas the city of Redwood City joins people around the globe in celebrating Lunar New Year, ushering good fortune and warm wishes with the New Year, and lifting up the diverse and dynamic communities that make our community excuse me, our city, state, and country what they are today. And whereas Asian American and Pacific Islander or AAPI communities have shaped our communities through foundational contributions to our past, present, and future. As we celebrate this rich heritage with its many amazing leaders and accomplishments, we also recognize the unfortunate history of violence and discrimination against these communities and reaffirm for the sake of our neighbors and loved ones, all of us must confront racism in all its forms. And whereas the city of Redwood City is a proud is proud to partner with Redwood City International for the last fifteen years to celebrate one of the most important holidays in Asian heritage with festive performances, symbolic foods, and traditional decorations, all focused on bringing back bringing good luck for 2026, the year of the horse.

Now, therefore, be it resolved that I, Elmer Martinez Caballos, mayor of Redwood City, on behalf of the city council and the people of Redwood City, do hereby celebrate Lunar New Year twenty twenty six and show support and solidarity today and every day for our AAPI brothers and sisters for their irreplaceable contributions to our American story. And as the year of the horse begins, we wish happiness and good fortune to all. And I'm delighted to welcome members of the Redwood City International Board of Directors, Ernie Schmidt, former mayor Barbara Pierce, and director Raymond Kong to the podium to accept the proclamation and tell us more about the upcoming Lunar New Year celebration this coming Saturday.

Good evening, Mayor Ciballos, Vice Mayor, council members. Sinyan Kwai Lo, Happy Lunar New Year. My name is Ernie Schmidt, current President of Redwood City International, and thank you so much for that proclamation. Chinese New Year is about celebrating one's traditions and heritage as well as bringing families together and renew bonds that matter most to us. Across San Mateo County, families will be wearing red to invite luck and prosperity and gather over many, many great meals and look forward to the hope and renewal of spring.

This year marks the end of the year of the snake and the beginning of the year of the horse, which is my year. Got to go get that lottery ticket, which is associated with boldness, courage and transformation. At this time, we also wish to thank Councilmember G for spearheading this very important cultural event year after year, where community members from all over the county come out and celebrate these important traditions as well as allowing them to continue to share a part of their own heritage with their own children. Thank you, Councilmember Jane. In this spirit, we want to wish everyone celebrating this Lunar New Year courage and your convictions, optimism in the face of diversity and spirit of inclusion and goodwill to all.

Redwood RCI would also be amiss if we did not continue to encourage the city to continue to find ways to become more involved with RCI as well as letting our fellow community members know that they are here tonight and those that are watching at home this evening wishing you prosperity as well. If you're curious about Redwood City International, we invite you to check us out at our website, redwoodcityinternational.org. And if you don't know yet, Lunar Festival is happening this weekend, Saturday, on the twenty eighth from eleven to four p. M. It's a lot of fun, a lot of food and a good time for all families. So we are definitely looking forward to seeing everybody there and enjoy this wonderful cultural event. Thank you.

Thank you again for putting on this great event, Ernie. If we can get a quick photo. Great. Thank you, everyone. Our final presentation this evening is from San Mateo County Executive Mike Alleghy and Assistant County Executive Justin Mates, who will be giving us a presentation on the recent developments related to the revenue from the state's vehicle license fee or VLF.

As I welcome them to the podium, I'll pass things over quickly to our city manager.

Thank you. Thank you, mayor. On February 12, the Mayor, Vice Mayor and myself attended a briefing that the county had for various elected officials and city and other officials. Talking about a myriad of topics, one of which was this topic here tonight about the vehicle license fee. It was such a powerful presentation in that I like many who've worked in this county now going on six or seven years have constantly heard about VLF and this that and the other and you know for the most part until last year had always been quote made whole.

But after hearing Mike and Justin's presentation, it became clear that that this year is different. And so the mayor and I cornered Mike. He said, hey, please reach out for you and said, hey, we have the mid year budget coming on the on the twenty third, so would you you gentlemen mind coming to present? He never batted eyes and said, absolutely. So that would be great to hear directly from the county tonight. And then it really tees up some of the discussion that we'll have here later time when we talk about mid year budget and more importantly, the forecast for next year. So thank you, Mayor.

Thank you, Patrick. And we'll pass things over to Mike.

Great. Thank you, Mr. Mayor and Honourable Board members and staff. Thank you for having us here tonight. We are faced with one of the most daunting situations to ever, ever face this county. And that is literally the taking, and I'm going to call this a taking of potentially over 1,000,000,000 in county funds. And when I say county, I mean county and city funds. This is unprecedented. As you know, for the last several years, we have had to go to Sacramento, hat in hand begging for money that was owed this county, our vehicle license fees that are owed this county. The Department of Finance believes that they do not owe us those funds.

So those funds were generated in this county, and certainly they've been paying those to this county for many, many years. In fact, we are only one of three counties that are being treated out of the 58 counties differently in this state. This is serious because it will impact everyone. And just to give you an idea of the magnitude, this will eclipse our entire Measure K funding this coming year, which supports housing and certainly homelessness and mental health and foster kids and parks and everything that we're used to. This will fundamentally change the county as we know it, if we do not receive these funds from the state.

As you know or aware, last year we filed a law suit in that. We only received two thirds of the VLF funding last year. We were shorted some $30,000,000 And we filed suit on that, that suit is pending. In the governor's budget, there was no funding for Viela for San Mateo County, and we don't expect it in the May revise. Therefore, it is important that we get the message out to everyone in this county.

We're going be doing a study session tomorrow in front of the Board to make sure that they're fully aware of that. Have committed to keeping the board and every council updated on this. We have a subcommittee of the board that is joined by city managers, superintendents of schools. Certainly Diane Pappen, our assembly member, and all our members in the legislature have done an incredible job representing us and trying to get this funding for us, but they're out of time and they've gone to the well too many times. So we don't believe it's going to be funded through the normal process.

It's a complicated issue, but Assistant County Executive Justin Mates has done a very good job in distilling this information down. So hopefully, you all have a deep understanding of how this came about. And with that, I'll turn it over to Mr. Mates.

Thanks, Mike. Good evening, everyone. Mr. Mayor, Honorable Council members, thanks for having us here tonight. Happy to go through this in a little bit of detail.

It is a very complicated issue, but I think it helps to have a little bit more of the background to understand why it is such a tricky issue for us to solve and why it is only San Mateo County and two other very small counties that have this issue across the state. Alright. You don't have to read every word on this screen, but this is sort of if you take nothing else from the presentation, this is the bottom line. There is a payment mechanism that every city and county in the state of California depends on for an important source of general funds, that is VLF. Through this mechanism in the statute passed in 2004, over $12,000,000,000 goes from the state to the local jurisdictions.

That payment mechanism broke in our county through no fault of our own, through no policy decision of any local official, and for the last five years we have not been made whole through this process. The state has been making us whole, Mr. Heisinger mentioned it, through an appropriation through the budget process until recently they stopped doing that. And the shortfall this year is $119,000,000 countywide and there's nothing in the Governor's recommended budget to make us whole on that. That's the bottom line. Why don't I take just a few minutes to talk about what that means and how we got here?

Maybe I'll just

okay. By way of additional background, we call this the VLF statute. Right off the bat, I want to be clear, vehicle license fee statute has nothing to do with vehicle license fees. Historically, local jurisdictions did get a portion of the amounts that residents would pay to the DMV to register their vehicles. In 2004, this became a campaign issue or 2003.

In 2004, as part of the budget compromise, which involved a whole set of exchanges between the local governments and the state that we don't need to go into. But as part of that 2004 budget compromise to solve the state budget crisis, the VLF statute was completely rewritten and the mechanism and framework was completely redesigned. Next slide please. So what did it do? First of all, it disconnected the VLF from actual vehicle license fees paid by folks to register their vehicles.

Instead, it promised the local governments who had historically depended on these vehicle license fees something called the in lieu VLF amount or the VLF adjustment amount. It's got a lot of different names, none of them intuitive, And essentially it was a promise of a payment, a base year amount that all the counties and cities were promised with a growth factor that was based on local assessed value growth. The statute so in addition to then making this promise disconnected from actual vehicle license fees paid, the statute also created a local payment mechanism, right? So instead of actually coming from those revenues, it had to come from somewhere, and this payment mechanism is where you have to set aside all intuition, all things that you think would try to make this make sense. It doesn't.

They just picked a payment mechanism and it was tied to the local property tax distribution system and specifically the distribution to locally funded schools or excuse me, state funded schools locally. I'll get into that. This whole statute's called the VLF swap. Next slide please. Okay, so what does it do?

The VLF statute piggybacks the state's Prop 98 obligation to backfill schools. How does it do that? The in lieu VLF amounts that are owed to all counties and cities are calculated by a local auditor controller and those amounts annually are paid in the first instance from the local revenues of state funded school districts. Just stick with me on this. There's a of state funded school districts where the state has an obligation to make sure that they reach minimum funding levels and from those districts the local auditor controller takes the amounts owed for the cities and counties and shifts that over to the cities and counties.

All over the state, but this happens at the county level. The state then reimburses those state funded school districts for every dollar that was used for the VLF payment so that the school districts are held harmless as a matter of their total revenues. Through this two step process, the state pays every single dollar of the VLF obligation owed to the cities and counties, but does so through the backfill of the state funded local school districts. As I mentioned earlier, through this funding mechanism over $12,000,000,000 was distributed to cities and counties across the state last year. This happens as a matter of course, it happens as a matter of the local property tax distribution system.

Next slide, please. So just real quick, this is a visual representation of what I just said. The world of school districts is divided into two groups. The basic aid side on the right side of this slide are those districts that get enough in local property taxes to meet the minimum funding per student funding guarantee from the state. We call those basic aid districts.

The districts on the left, and this is a hypothetical representation, are those districts that do not get enough in local property taxes to satisfy their minimum funding guarantee. So they also get something called ERAP, which is another complicated property tax feature. But the state then has the obligation to fill those districts up further to have them reach their minimum funding guarantee also known as the local control funding formula. Animation please? It's a simple animation.

There you go. The state comes through and backfills everyone up to that minimum funding line. Okay, next slide and let's see how the VLF statute is an overlay on this. What the VLF statute says is in the first instance first animation please you pay the VLF from those local revenues of those state funded districts or non basic aid districts, you can take them down to dollar 0 as needed to pay the VLF obligation owed to the county and cities, and then the state still has this obligation under Prop 98 next animation please and so the state backfills them. Whatever dollars were taken, the state backfills them up to their minimum funding guarantee per student.

So again, the districts are held harmless in this, the state pays every dollar VLF, but it's all a piggyback to this local property tax distribution system. Next slide please. VLF funds is an important part of every local government's budget. You all know your budget and know its role in the city's budget, but in terms of across the county, the VLF obligation was $283,000,000 in twenty four-twenty five. That's the last complete year we have numbers for.

And this funds everything basically that cities and counties do with general funds, all of the things listed on this slide: public safety, health care and mental health services, local libraries and parks, homelessness prevention, everything. Next slide please. So why do we have a shortfall in this county? Well if you remember the slide that depicted the school districts, you need non basic aid school districts to be able to pay the VLF payment. In our county we are having fewer and fewer non basic aid districts.

More of our districts are locally funded, not state funded. And in fact in the last ten years there has been a large number of districts which have termed basic aid, if you will, have gone from being state funded to being locally funded. Just as a matter of statistics, 10 ago there were 12 out of 23 non basic aid excuse me, 12 out of 23 total districts were non basic aid. Now there are only four left. So we have a shrinking number of non basic aid districts.

Now there's all sorts of complicated reasons why districts have gone basic aid. That could be the topic of a whole other presentation. For now I'll just say it's not as simple as rich property tax area means locally funded schools. Ravenswood School District, which serves Belle Haven and East Palo Alto, is a basic aid district, a locally funded district. Burlingame Elementary School District is a non basic aid district, a state funded district.

So it's just a complicated story, but the bottom line is it's no policy decision by any city or county official that has facilitated this phenomenon, it's just what has happened. And as a result there simply aren't enough non basic aid districts to fund the VLF obligation that we're entitled to under the statute. Next slide please. Hopefully you can see this. This is a depiction of the VLF shortfall and its history.

This came up as a blip in 'eleven-'twelve, fiscal year 'eleven-'twelve and then went away, but then came back consistently in fiscal year 'nineteen-'twenty. You can see the county wide shortfall numbers on the left side of this slide. And what's clear is early on the state recognized this is not what's supposed to happen, this is not what the statute ever intended. Only in San Mateo County and the two other counties are Alpine and Mono Counties does this happen. Basically very small counties with essentially one school district or very few number of school districts, so when those districts go basic aid, there's nothing left to pay the VLF shortfall.

And so in recognition that this is not how things are supposed to work, the governor and the DOF was putting put in the governor's recommended budget, a reimbursement for the cities and the county every year. Then as the numbers got higher and as the state and the DOF had other issues they wanted to address, they stopped putting it in the governor's recommended budget. And as Mike mentioned earlier, our legislative delegation worked very hard to get the full reimbursement into the legislature's adopted budget by the end of the budget cycle for the state. Last year was the first year where the state did not make us whole for this VLF shortfall. We only got two thirds of our claim.

Our full claim for county wide VLF was $114,000,000 and we only got 76,000,000 still a lot of money, still through the heroic efforts of our legislative delegation, but not a full amount of the amounts that we were owed under the statute. As you know, the county with all the cities in partnership sued the state for this failure to fund the VLF shortfall. That legislation litigation is still pending. Next slide please. So the current shortfall that was last year the current shortfall for this year is 119,000,000.

Remember I said there was $283,000,000 of the VLF obligation? We have a shortfall of $119,000,000 this year. We have filed a claim in August, as is the practice for the last many years, for that $119,000,000 but the Governor's latest recommended budget last month did not have any money for the VLF shortfall reimbursement. To give a sense of the scale of what $119,000,000 in general fund dollars means, it can be difficult to really think about these things, especially when you're talking about the distinction of general funds versus more specific revenues. But 119,000,000 in terms of scale is more than the county's annual funding of the homelessness system, all of our investments in affordable housing, the Big Lift Literacy Program, and our foster youth support system combined.

Dollars 119,000,000 in general fund is a very significant loss of funding. Next slide please. Is going to be a little hard for you. Your number this is how the 119,000,000 spreads out among all of the jurisdictions. Sometimes we just say the county shortfall, but of course every one of our cities is affected by this shortfall as is the county and as significant as the county's is with respect to, as Mike mentioned, Measure K, these numbers are obviously very significant for our cities.

In many cases the VLF shortfall is greater than recently passed business license taxes, sales taxes, a lot of local efforts to raise funds essentially are going to be wiped if this shortfall does not go reimbursed or goes unreimbursed. Next slide please. So what are we doing about it? What do you want to talk about tonight? We have the lawsuit, as we mentioned previously, for the failure to fully fund VLF shortfall last year.

We are working with our legislative delegation with our city partners on potential solutions both for this year's shortfall and ideally for future shortfalls as well for a permanent solution. We are in the process, as Mr. Heisinger mentioned earlier, doing outreach to all of our stakeholders, to locally elected officials to spread the word, to educate about this issue. We have been made whole up to this point and there wasn't a need for everyone to understand this problem, but it feels that this is a turning point and we are not going to be made whole from this point on. And so it's very important that all of our city councils, our schools, everyone understands the impacts of an unreimbursed shortfall on the cities and the county.

And then we are also doing our own planning, encouraging our city partners to do planning for what service impacts will be necessary as a result of these VLF cuts, VLF shortfall unreimbursed. And with that, I'm happy to take any questions that you may have.

Justin, thank you for the great presentation and that chart is so sobering. 5.4 almost $5,400,000 lost in Robe City. That is our business license tax that we had just passed. So colleagues who has questions. We'll go to council member Howard.

Thank you. Mr. Mates, who initiated the lawsuit? Was it San Mateo County or the three counties together?

We initiated the lawsuit and then very shortly worked with all of our city partners and the other counties to join the lawsuit. So that lawsuit now includes all of the affected cities and the other two counties.

Have any other counties who receive funding been there for you or signed on to support something like this?

I will say the other counties are sympathetic, but there are no other counties other than the three who see this as a real threat to them. It's the uniqueness of these three counties and our mix of school districts that makes us uniquely vulnerable to this shortfall. And as far as we know no other counties see this shortfall imminently. There may be some in five or ten years, but for now we're being told no other county is seeing this as an imminent problem.

Is there any benefit to working with the schools to change the way that they are reimbursed? I mean this trend we're talking about seems to be getting worse and worse. Is this for their benefit? I mean, I know it's a complicated issue, but is there a benefit in talking to them about trying to help by staying a, not basic aid, but Non basic aid? Yeah.

So we have engaged in the last month or so our school partners to talk about those kinds of things, opportunities to partner, opportunities where they're seeing that they might like to see how Prop 98 is administered a little differently and how that might affect the VLF shortfall. We don't have any concrete proposals from that, but we have we ask the superintendents to form a subcommittee of their own to work with us on these issues and as Mike mentioned we have already had a meeting with that subcommittee and with a larger group to strategize how we can address this issue. But certainly there's a lot of attention on the Prop 98 system right now and certainly a lot of districts in our county who might like to see some changes to that system as well.

And if I can just add to that. During those conversations we learned that Prop 98 is not as stable to the school districts that we once thought. So it would be difficult to use that mechanism to move forward to secure VLF. Even though everyone will be made whole, it would just be a difficult vehicle to move forward on. But it's a really good question. It's something that we actually tried to go down that path and met with our superintendents and got a lot of feedback on that.

And my last question, are we planning another lawsuit? Or are we going to wait for?

So we certainly have our current lawsuit. If we are to be unfunded again this year, I imagine we would be amending that lawsuit to add the losses from this year as well.

Thank you.

Thank you, councilmember. We'll go to councilmember G next.

Thank you, Mayor. Mike and Justin, thank you for coming here and giving us this update. I mean, this is not a new battle. It's been going on for years. And thanks to our Bay Area Delegation, we have been successful most of the time until last year. And the prognosis isn't very favorable to the county or in our cities going forward. So anytime we do litigation, the question always is, what do you think our chances are of succeeding? Would you, you know, do you think it's fiftyfifty? Do you what are your thoughts about our ability to be successful in this litigation?

Sure. As a former attorney for the county, certainly have experience in how you try to estimate your likelihood of success in a lawsuit. I will say it's always uncertain when you have a statute that simply doesn't address the issue. We certainly think we have good arguments for why the statute should be read to require the state to make us whole, but it's always uncertain when the statute just doesn't speak to the issue and you're asking the court to interpret the statute as you want it interpreted. So always hard to know for sure.

What is the status of the lawsuit?

It is still in early days. The state did not try to get it kicked out initially. They actually answered, which is a good sign and it'll continue to move on, but there's no trial dates to it. It's still in early days.

And do you to Councilmember Howard's question, if we are not successful in this current fiscal year, will we do an amended complaint if the trial has not been heard yet or set date yet?

That would be the plan, yes.

And then going forward, we have kind of the midyear budget, should we assume any money from VLF going forward? From a financial standpoint what would you advise the city?

It is highly uncertain. I would say that the VLF reimbursement has never been so uncertain as it is now. As you mentioned, this is not a new battle, but we were reimbursed for every time we fought that battle until last year. And every signal we've received from the Department of Finance, from the Governor's Office, from our legislative delegation is that the fight that we barely eked out two thirds of last year would be harder this year. So I would say it's highly uncertain. Mike, you want to put a final point on it?

Yes, thank you. And I can talk to what we're doing. These are cuts that we simply can't sustain. The Board has formed a subcommittee to start looking at what services we're going to have to discontinue in order to make up for these cuts. This is a painful, painful process that we will go through in doing this because every dime of this money that is spent are on serious public issues that are necessary. And that's why I'm not being dramatic when I say it will change the face of this county if we lose this money. We're talking billions of dollars over the next decade.

Mike, thank you for the sobering news. It's even more amplified with the changes in the federal funding formulas and the money we received from Washington, D. C. So the cuts we're talking about or the cuts at least the county is talking about are amplified with both the VLF and the federal changes in funding.

Yes. Thank you, Councilman, for putting that fine point on it. Actually, they're magnified incredibly with the cuts on HR1 and what we're seeing at the state level right now. This is like I said, it's going be very painful to try to get through this.

Thank you for the update. Hopefully, next time, if they set a trial date or something, can give us an update or give our city manager update so we know where we're at Because we're like the county, we're going through our budget process, and we need to make assumptions on what we do next year. Thank you.

Thank you, council member. And we'll go to council member Chu, and council member Sterling.

Thank you for the presentation and and for the clarification. I I think I know the answer to this, but as I understand it, this the schools are made whole. So this doesn't impact the funding of the schools. It's just sort of a spillover effect on the county and the cities. Is that a correct correct understanding? Understanding?

So the VLF payment framework, which has been in place for over twenty years, holds the non basic aid districts harmless. So our shortfall doesn't have anything to do with the schools and how they're funded. They're not impacted by our shortfall. It's just because our mix of types of school districts we have locally no longer has enough for us to shift the payment over. So for those that remain non basic aid, they continue to have to be in the system, the system they've been in for over twenty years. And so they're not extra affected in some way by the shortfall.

And then a follow-up question. Obviously, our hope is that we'll prevail in the lawsuit. But in the event that we don't, are we in conversation with the school districts about this? Or is it just dealt as completely separate? The school districts are going do what they do. We will deal with whatever the consequences of that are. And those remain entirely separate issues.

Yeah, in our discussions with the school they're very sympathetic to where we're at, and they simply don't think Prop 98 is a vehicle that we could pursue. If we lose a lawsuit, it would effectively end the controversy here and we would be out this money. We have incredible attorneys working on this. And as Mr Maitz said, we feel that they have put forth a very good argument, but it's really the interpretation of the statute that we're asking the court to make that's going to be difficult. So but we're open.

If the state came to us and we collectively, as the county and cities, want to sit down and come up with some solution, I think that we would we'd be amenable to that. We'd have to really talk about that and see if there's a path forward that we haven't thought through. And if one of the legislators came up with that idea, one of the things that we're asking some member PAPAN to move forward with again is just a straight legislation that reimburses us. It's been shut down before, but we'd like to take another shot at it.

Thank you, council member. We'll go to council member sorry, council member Serkan Sliphon, and then we'll go to council member Padilla.

Thank you, mayor. Thank you, mister Callaghy. Thank you, mister Mates, for your advocacy on this front alongside our our delegation. One question for you and then a question for staff as well, and then a couple of quick comments. Firstly, with the amended complaint that you mentioned that could possibly be filed, that would be an opportunity for additional plaintiffs to join potentially. Ray?

Sure. I mean, that wasn't the only opportunity. Another plaintiff could join if there's another affected party. They could join at any time, actually.

At any time. Okay. And what do you anticipate the timeline being on that if we know?

It is so difficult to say, but I what I would say is for something like this, that's a matter of statutory interpretation that would whatever happens at the trial level would be appealed. It's probably years before we get a final judicial decision on this.

Seeing that it was for the 2023, 2024 fiscal year, that, yeah, that makes sense. Okay. So we have time. Thank you. And then for city staff, well, firstly, county had mentioned that the board has has appointed a subcommittee to look at this very issue. Right? So has this come up in finance and audit? Will it come up in finance and audit?

So it hasn't come up yet. What I would say is is the meeting on the twelfth really planted to me that we got to start moving on this. Now the county definitely is in a leadership role with pulling folks together. So I do think it would be good to ask ourselves is how do we want to respond? You know, obviously, we we wanna be aligned with the county and other other partners. But but, no, I would say this is kinda like step one tonight, and then we can take it from there. Mhmm.

Thank you, city manager. Definitely, I'm interested in it going to finance and audit subcommittee. And then just as two quick comments for staff, appreciate and echo request to have an update. When you get the chance, county manager, on if and when the trial date gets set so that we can be kept in the loop. And if there is any way that we can partner on the legislation front that Pappin is championing, please do keep our our legislative advocate aware. Thank you. Absolutely.

Thank you, councilmember. We'll go to councilmember Padilla.

Thank you both for your presentation. I guess this is so frustrating for me because these funds were generated here, so I'm just so confused why we have to fight so hard for monies that are owed to us. And I think I see to me, I wanna know I I everything I read and I see your presentations, and I went on the county website, and it's everyone describes these funds, and I highlighted, and all the words are used as critical, vital. So these and these are all words that are true for all of us. These are huge pots of money.

I mean, I feel I look at our finance director. We do forecasting that is hugely dependent on this number. And to to to go to them and say, one day, you know, plan everything that we have it. And now say, oh, now we don't. I mean, it's these are these are huge pots of money that take care of groups throughout our community.

And I just wanna make sure that, you know, it's great that we have small groups and we have a lawsuit and there's legislation, but is there anything else we can do? I saw I think it's great that you said, you know, before you mentioned in the past, it was to me, I've never understood this. I've could you just have thought maybe I'm so green, but this has always sounded like a broken system. Like, we used to get this money directly, and then we decided that we wanted someone else to hold our money and decide to give it to us. Like, that I'm not fond of that.

So I just wanna know what we can do as a community because to me, I'm at a point where I want it I think more than our electeds, more than community leaders need to know, this is the people's money. This is this is money, like you said, that takes care of our children. So maybe, you know to me, it's shocking. You know, we see our governor on social media memes championing all these groups that this money is not there for now. So I wonder if we shouldn't be taking a different type of action or engagement because this is not a small amount of money.

And we need this money. It's ours and it's owed to us. So I don't understand. I think we should maybe be doing more. I don't know if it's just legislation, maybe it's engaging our community. I think this is a really big deal, and I think more people should know about it. Thank you.

Absolutely, all great points. And I can tell you within the next several weeks, we'll be working through the city managers on a unified strategy, on a unified front to address this holistically. And you were so correct when you talked about the just not understanding how this can happen. Our governor always talks about this being California being a donor state to the rest of the country. We are a donor county to the state of California. In other words, we give them a lot more money than we receive from the state. So for them to come in and take, this is an absolute taking, county vital resources is just unconscionable.

Thank you. County Executive, we'll go to the Vice Mayor.

I'll be very brief because my colleagues in this presentation have done such a good job. Just emphasize what Ms. Padilla said, that it is our money. And so we it's too bad we have to fight for it, but so be it. I would it sounds like in two weeks you'll have a more strategic vision of how your partners like Redwood City can, you know, pull the oar of the boat toward getting the money. So how can we help? It sounds like we'll hear in two weeks or what can we do to help you get us all our money?

You all will play a vital role, I promise you, in that process. We have formed a subcommittee of those city managers and of school districts and of our legislators and others to help us come together as a community, as a county to address this from Daly City to East Palo Alto. And we will do that and certainly we'll keep your very capable senior manager who's involved in this process involved so he can keep all of you informed. And we're happy to come back at any time and update you as to what we're doing.

Thank you. And in the meantime, we will just make sure our city and community is aware of this. And this tonight is a big step. Thank you.

Thank you, Vice Mayor. Not seeing any other lights on, I'll add my thanks, Mike and Justin, for the great presentation and just your level of partnership around this. Like our city manager mentioned, this is the crucial first step in just educating the rest of our colleagues and also sharing this information out with the community. So please keep us informed, and you know where to find the seven of us when it's time to start knocking on doors and hitting the ground. So thank you again.

Thank you. Thank you. And with that, we will move on to item number six, which is our public comment section of the agenda. We'll take public comment on the consent calendar, matters of council interest, as well as items that are not listed on tonight's agenda. We welcome speakers providing public comment, but please be advised that this is a limited public forum.

As such, speakers must address matters within the subject matter jurisdiction of the city. If speakers do not, they will be warned, and if they continue to disregard city rules, their opportunity to speak will be limited. If you are attending in person, please fill out a speaker card and submit it to the clerk here at the dais. And if you're attending virtually, please feel free to raise your hand on Zoom at this time, or press 9 if you've joined by phone. Once we've gathered all the speaker cards and raised hands and have begun public comment, no additional speakers will be allowed to queue up to speak. And I will now turn it over to our city clerk to facilitate public comment.

Thank you, mayor. At this time, we only have one in person speaker and one raised hand on Zoom. So if you joined us virtually, please raise your hand at this time. As the mayor said, once we begin public comment, we will close the speakers list. So last call to the audience or folks on Zoom.

You

are for item 9a. Yeah. Not this item. And for those who are joining us for the first time, we have a timer on the top of the podium. It's a series of lights. Yellow blinking light means you're you have a thirty second warning, and the red light with a beep means your time is up. Mhmm. I'll close the speakers list. We will begin with Bill Johnson, our in person speaker. Welcome, Bill, who will be followed by Jason Solomon on Zoom.

Hi, my name is Bill Johnson. I'm the owner of Demagillon Johnson. I own apartment complexes here in Redwood City, about 17 complexes, six duplexes, about 300 doors. Been fortunate since 1997 to never have a fire, but on January 30, I had a fire here on Rawlison Road. And what I'm here for is the response.

That happened on a Friday. On a Sunday, there was a meeting of over 25 people, county and city, to be able to put together a way in which to house the 18 families that were dislo displaced. By Monday, I had a permit to be able to do construction within the building to get things started. I was got building department, Thomas Sillipin, was a great deal of help. A place that was the most help in putting everything together was Fair Oaks Community Center.

And Miguel Andrade there worked with me from seven in the morning until 10:00 at night for ten days in which to move those people around, house them, and take care of the community. And what I'm here for is to thank thank you for what the city has done and how quickly the response was in getting everything done and helping those people find a place temporarily. We moved some back into my units. We moved others to other, you know, units complexes of mine. We moved others to other, you know, people's, you know, units.

But it was all coordinated by Miguel, and he was fantastic. The city was fantastic. The county jumped in. Everybody was a great deal of help. And I'm just saying, you know, a lot of times you get nothing but negative, but I'm just saying, you know, thank you for what everybody did.

Thank you, Bill. We'll turn now to our folks online. We have Jason Solomon. Jason, not sure if you still wanted to give public comment. I think you're Yes. Hand one to

do. Hopefully,

you can hear me now.

We can hear you just fine. Thank you.

Terrific. Thanks so much. I will be brief. I want to talk about the issue of ICE and how it's affecting our communities. I I want to also just start by recognizing that you're dealing with some very difficult local issues that I just heard in the prior discussion.

And I want to thank you for that and recognize that this is a subject, which you might think, hey, we have nothing to do with this. But I think we all want to do what we can, both to protect our communities and also to send a message to the nation that communities don't support what ICE is doing. I understand that most of what's been happening in terms of sanctuary city and noncooperation has been happening at the county level, and that's fine. What I want to raise is something different, something that's happening in other communities, and that is the possibility of different kinds of employment bans on people who are currently working for ICE. So the Los Angeles City Council, as you may know, voted unanimously late last year to draft an ordinance prohibiting city employees, including police officers, from taking secondary employment with ICE, CBP or any entity engaged in immigration enforcement.

This is a declaration of that community's values, and I hope it can be a declaration of our values as well. There's a bill in the state assembly that's been introduced to ban people who have worked for ICE in this administration from ever getting any jobs in the public sector, in public education or law enforcement in the state. That's something that Redwood City can do as well. So what I would ask you is, at this time, when, of course, you're dealing with so many issues, that you stand up and take a stand and consider one of these ordinances, particularly the secondary employment ban, that will demonstrate to folks that there is a cost in participating with ICE and take the stand to protect our communities. Thanks so much.

Thank you, Jason. And that concludes public comment, Mayor.

Great. Thank you, everybody, for making public comment this evening. We will now move on to item seven, which is our consent calendar. Items on the consent calendar are routine in nature and approved by one motion. Are there any items on the consent calendar from which council members are recused? Not seeing any. Are there any items on the consent calendar that council members would like to pull for discussion? We'll go to council member Sturkey.

Thank you, mayor. Just more polling at seven b as in boy for comment and question. Thank you.

Great. Councilmember Serkan pulled item seven b. Do we have a motion for all other items on the consent calendar?

So moved.

Second. Okay. That

was a motion from council member Chu, a second from council member g for all items on consent except for seven b. And could we get electronic vote, please?

Motion passes unanimously.

Thank you. And we will now turn it over to council member circle.

Thank you, mayor. Alrighty. Firstly, thank you to staff for preparing this report and appreciate the information. I wanted to just draw our attention to page two, specifically option one, and just express how much I appreciate the the detail in the explanation of the process. So my concern here is that we are making a a concession by going with option two because in option one that gives us the opportunity to negotiate pricing to estimate the full potential cost of additional time and materials.

Whereas in option two, I see that there's no estimate of the additional cost. And let me back up for a second here. Apologies. Okay. So with option two, we know it's 8% on top of the 10% contingency.

That is what proposed and recommended by staff. With option one, we do not know what the additional contingency would be on top of the 10% that's currently approved. And so that is the kind of information and detail that I would like to see when we are voting on options that cost the taxpayers money. And again, as is mentioned in option one, I do see that we have the opportunity to estimate the to get a conservative estimate for the full potential cost of additional time and materials and negotiate pricing, whereas we do we forego that with option two and just eat the additional cost of 8% in total 18% contingency over the initial cost of this project. So hopefully that makes sense to my colleagues, but I can't imagine we have the support to go with option one tonight.

However, I did wanna just ask staff for feedback as to why we didn't include the same level of detail in option one and if maybe going forward we could have an apples to apples comparison, please.

Great. I'm gonna ask our director of engineering transportation, Tanisha Warner, to provide a little bit more color, but noted on providing additional information in the future.

Yes. Thank you so much for the question. So I'm Tanisha Warner, Director of Engineering and Transportation. When we uncover unforeseen circumstances in the field, we really have only a few options available to us. One is to stop the work that's impacted, to work with the contractor to negotiate a price upfront, and then once we both agree to terms and a cost, proceed.

The other option is what's called a force account. So we proceed with the work because the cost of not proceeding outweighs the cost of getting a conservative estimate for the price of the work. And so we track really closely the labor, the materials, the days that are out there. We have our contract inspector out there watching the contractor to make sure that we can agree upon how much time it actually took them to do the work, how much material was removed, and what material was put in. The 8% is the total amount of what that estimate would have been.

And typically, when you're doing forced accounts, it it doesn't always come out more expensive than it would have if you would have, prenegotiated the price.

Thank you very much, director Warner. That is really helpful context that even in my four years on council, like, I just don't have. And I know some of my colleagues are more experienced up here and and may know that. But, you know, for some of us there, we don't know. And so I really do appreciate you adding some color to this. And I'm glad to hear that there is a potential that this would be cheaper alternative than option one.

Well, even when you look at the cost of so we we encountered a high groundwater table. So water is filling in to the trench, and we have to consistently dewater or take that water out. That element is going to be there whether we proceed immediately with forced account or if we stop the work, stabilize the trench, water is still gonna be filling it up. We still have the cost of dewatering the trench. So that cost only increases as we're negotiating with the contractor. So there there are pros and cons.

Thank you very much. That's also helpful context. So with that, I'm happy to make a recommendation to approve 7b, and then it looks like there might be a comment.

Thank you. You, council member Serkan. We'll go to council member Serkan.

Thank you. Tanisha, thank you. I'll second council member Serkan's motion, but this is exactly what I teach in construction management twice a year about a cardinal change. And when that happens, the documentation you put together in the staff report is exactly what's needed to make sure that the delay cost does not exceed the actual cost and force account work for unforeseen conditions is exactly what you need to do. Because when we talk about construction, as soon as we snap the ball and say go forward, what I always say is the meter's running every day.

So every day delay is money being spent for if we were to do option one for no work other than dewatering, staff, porta potties, safety barricades, all that stuff. And so the forced account work is a very good way of doing work. You have staff there full time documenting yards of soil being moved out, yards of water fill being brought in. The 8% is just the way it turned out, but it's all based on work tags, daily work tags of number of staff, quantities, materials and things like that. And it's not unusual.

And to keep a 20 foot deep open trench open would have cost probably tens of thousands dollars per day to do all the things that you listed in the staff report. So as I shared with the city manager, this is exactly what needs to be happened when you encounter things like this and the documentation needed so that a cardinal change accusation can be easily defended. So thank you for doing that and the entire team.

Thank you.

Great. Thank you both. I heard a motion from council member Serkan, a second from council member Chi. Could we get an electronic vote, please?

Motion passes unanimously.

Great. Thank you everyone. We will now move on to item eight, our public hearings beginning with eight a. And we have our city consultant Leo Scott with Gray Bowen Scott, who's joined us virtually and will give us a presentation. And we also have staff available for any council questions.

Good evening, mayor and members of the council. I will jump through the slide deck as we did just two weeks ago. So let's jump to the next slide. We've gone through most of the details in this. So what I'm going to do tonight is just highlight a few of the uniquenesses relative to tonight's hearing.

So with that, let's go to the next slide. Stop here for a moment. Before the council tonight is a proposed resolution that would authorize the use of eminent domain to acquire property located between 1101 and 1185 Broadway that is needed for the state 84 Woodside Road US 101 interchange reimagined project. The project is designed to enhance traffic safety, reduce congestion and pollution, and provide safer bicycle and pedestrian facilities. Next slide.

So tonight, the council is being asked to find the following, that the public interest and necessity require the project, that the project is planned and located and or located in a manner that will be most compatible with the greatest public good and leave private injure and least private injury, that the property interest sought to be acquired is necessary for the project, and that the offer required by government code section 7,267.2 has been made to the owner of record. The issue of compensation for the necessary property interest is not before counsel tonight, but will be determined through the eminent domain litigation process. So with that, we'll jump to the next series of slides. These are slides that we've talked through. There's certainly no change to these over the last two weeks.

I'll look at the exit interchanges exist today, and then the next slide shows the conditions that we are working to improve through the project. Next slide. And the next slide. The project purpose as recorded in the environmental documents here, we've covered this. I just wanna reiterate that it is straight from the environmental document. So what's being considered tonight is consistent with that. The next slide, a view of the interchange and its future condition. And then the next slide shows a cross section at Broadway. So the particular parcel that we're looking at is to the right here off the just off the page along Broadway. Next slide.

Project status we've covered. I wanna just highlight here for the record that the environmental document was approved back in December 2016, that the project is now currently fully funded, and we're proceeding to final design and then ultimately construction in early twenty twenty seven. Next slide. We've covered that, so we'll pass that to the next slide. This is the larger picture of partial acquisition, which we've also covered.

If there were questions, we can come back to this. Next slide. And then the overview of all the parcels impacted by the project, which we also discussed in previous meetings. So then we get to the focus of tonight's Ron hearing on the next slide. So portions of the property located on the South Side Of Broadway between Woodside Road and Charter Street, also known as the Rinker Development Corporation property.

The next slide shows the location just to the East of Woodside Road along Broadway on the South South Side Of Broadway. Next slide. Parcel description is a 25 foot wide roadway and public utility easement located on the South Side Of Broadway between Woodside Road and Charter Street. The need, a fee acquisition of 141 square feet, a temporary construction easement of an additional 125 square feet. The purpose is the accommodation of improvements to Broadway near the SR 84 intersection.

This necessitates widening of Broadway adjacent to the subject parcel to accommodate six total lanes of vehicular traffic, including two turning lanes. It also accommodates eastbound and westbound class two bikeways and eastbound and westbound sidewalks. Next slide shows the actual parcel subject of the hearing. In green here, you can see the area is it's a it's a driveway to a parcel that is, as you can see along the upper left here, right between two other parcels. Alright.

Next slide. So next steps. Discussion with the property owner will continue while the team proceeds with eminent domain steps as was true for the hearing two weeks ago. Tonight's action will not prohibit continued negotiations. Upon approval tonight, the team will file eminent domain law the eminent domain lawsuit that's necessary, pursue court proceedings, and seek the order of prejudgment possession from the court.

The eminent domain litigation can be resolved through a negotiated settlement between the parties. If the parties are unable to negotiate a settlement, just compensation will be determined through a jury trial. The final slide. So adoption adopt a resolution. The the staff and team recommend adoption adoption of the resolution to determine the public interest and necessity require the project, determine the project is planned and or located in a manner that will be most compatible with the greatest public good and least private injury, Determine the property interests sought to be acquired or necessary for the project.

Determine the offer required is required by government code seventy two sixty seven point two and has been made to the owner of record. Determine that the actions authorized by this resolution are adequately analyzed by a previous CEQA action for the subject property, authorize commencement of imminent domain litigation, and seek an order of possession consistent with civil procedure section twelve forty five point two twenty. And with that, that concludes my presentation, and I'm happy to take questions.

Great. Thank you, Leo, for the wonderful presentation again. Before we bring it back to the City Council for questions, we'll open the public hearing, and I'll ask the city clerk for help taking public comment.

We don't have any speaker cards at this time, so I'll give a last call to the audience for any folks in the room or on Zoom who would like to give public comment. Seeing none, I'll turn it back to you, mayor.

Thank you, city clerk, and I'll bring it back to my council colleagues for any questions. We have Leo online and staff available. We'll go to council member Mayor,

if there are not any comments from council and with the city attorney's permission, this is just one action. So we can just make one motion. If there aren't any other comments, I'll make the motion to approve the staff recommendation to adopt a resolution of necessity as recommended in the staff report related to properties or the access located between 1185 Broadway and 1101 Broadway, more commonly known as the Rinker Development Corporation property as indicated in the staff report.

Second.

That's a motion from Council Member G, a second from Council Member Howard. Could we get a electronic vote please?

Motion passes unanimously.

Thank you, everyone. And with that, we'll move on to Item nine, our staff reports beginning with 9A. Our city manager, Patrick Heisinger, will provide a brief introduction before turning the presentation over to our Deputy City Manager, Jennifer Yamaguma and our Finance Director, Beth Goldberg.

Great. Thank you, Mayor. This is a brief introduction before I turn it over to Beth. But first, I just want to express a lot of gratitude. Takes a lot to get to the mid year budget really when you're looking at a lot of the work that's been done by departments all departments, including the City Attorney's Office, as well as the budget forecast. About a month ago, the forecast was baked for that specific period of time, and then we heard about the VLF or whatnot. So Beth has been doing a lot of Excel, rerunning numbers, rerunning figures. You'll see certain elements of that on presentation. So again, I just want to give a lot of kudos. Thank you, Beth, for helping to coordinate it and get it together.

But really, the whole organization is part of what you'll see tonight and part of what you'll see when we come back in June on the two times when we come back. So with that, I will turn it over to Beth. And just a heads up, there is one slide I'll be tackling later, but Beth will be doing a lion's share of it. So appreciate it.

Good evening, everyone. I'm Beth Goldberg, Finance Director. It's nice to be with you this evening, Mayor, Vice Mayor, Council members and the public. So we do have a presentation for you this evening. Can you do the honors for me?

Thank you. So first, the presentation outline. We're going to give a brief overview of the midyear budget adjustments that council considers at this time of the year. We will give an update on our progress our midyear progress on our goals for fiscal year 'twenty five-'twenty six. And then we'll go into the meat of the forecast, which will include an overview of the economic and financial landscape, our 'twenty four'twenty five results, our midyear outlook for fiscal year twenty five-twenty six, and then our forecast for the next fiscal year twenty six-twenty seven.

And then we'll turn it over to our city manager to discuss briefly the framework for our budget development process this year, and then I'll wrap it up before turning it over to the City Council for questions. And certainly feel free to interrupt as we make our way through the presentation as well. So if we can go ahead two slides. The next one. There.

Okay, perfect. Thank you. So this is slide provides an overview of the midyear budget adjustments that we are recommending for Council consideration this evening. Total impact across all funds is nearly $5,900,000 To the general fund, it results in a net change to fund balance of $2,300,000 $2,400,000 And some of the highlights that contribute to that are some technical adjustments related to our recently negotiated labor contracts. The time there were some timing issues.

So this factors in those some of those costs related to those agreements. In addition, there are some modest FTE changes through a few reclassification position reclassifications. There's funding to support a comprehensive facilities assessment study in the upcoming year, and this will go in support of the city's work to develop capital funding strategies, which is a council priority. There's funding for the city cybersecurity program, changes to reflect receipt of grants, including the CDBG grant, Federal Highway Infrastructure Program, and Project Read, and then some equipment purchases for police and fire, including portable radios and purchase of a fire engine. So that covers the highlights of the mid year budget adjustment.

There are more details in your packet. And with that, I'll turn the next section of this report over to Deputy City Manager, Jennifer Young Guma.

Thank you, Beth, and good evening, Mayor and Council and the community and staff. So I get the pleasure of walking through the progress on our current goals, which is Attachment C to the staff report. And then I'm going to do a quick recap of the community satisfaction survey results that you heard last month. So this is a chart that is a comparison between the mid year status, which is the inner ring, and the semi transparent portion of this pie chart, that shows the current status of all of our SMART E goals that are in the budget book. The outer ring, which is a little darker, is the expected status of the goals at the end of the fiscal year, so at the end of June.

So as the chart displayed, at midyear, thirty three percent of the goals are completed, 48% are in progress, and 19% are delayed. So this, again, reflects the work that where departments are currently at with the implementation across all of the goals. The outer is, again, expected to go up. So you'll see the dark green component is represents those that will be completed by the end of the fiscal year, which is 74%. The yellow is 22%, which really represents significant progress on the goals.

So even if they were not completed at the original time frame that may have been identified when you adopted the budget, significant progress has been made. So that has been accounted for in the yellow section. And the red is 4%, which really just equates to a couple of projects, just to put it into perspective, as you go through all of the different updates in the attachment. So just to provide a little a few examples behind this data, A completed goal that has already happened through midyear is the tenant protection ordinance. So that is something that is already being implemented and completed with council's approval.

An example of something that's in progress is the Greater Downtown Area Plan engagement strategy, which you've heard lots about, where most of the outreach milestones have already been achieved, but there will be additional engagement continued throughout the rest of the fiscal year, so that would be in the yellow. And a red example would be the tree ordinance update, which is just taking a little additional time as we expand the review and community engagement options. So that's now one that is expected to be completed in spring of twenty twenty seven. Work is underway on it, so don't think that nothing is being done. But because of some of the extra additional components to it, it's delayed the original time frame.

But again, completion is expected in spring of twenty twenty seven. So as you can see, this reflects an overall strong trajectory of being able to complete or make significant progress on the goals that support the council's strategic plan. Next slide, please. Thank you. So following last month's comprehensive presentation that we had for the 2025 Community Satisfaction Survey, again, community feedback continues to reinforce several key priorities, including housing affordability, support for our youth and families, neighborhood safety and mobility, and the importance of communication and community connection.

So housing definitely continues to emerge as a major theme with residents expressing ongoing concern around affordability and the ability to meet housing needs across all different income levels. Survey results show strong support for creating safe, healthy places where children and youth can grow, learn, and play. Residents generally report feeling safe in their neighborhoods while continuing to identify traffic flow, pedestrian safety, sidewalks, and ease of travel as important quality of life issues. And finally, residents continue to emphasize the importance of clear communications, transparency and staying connected to city decision making. So these themes are familiar to you from the last presentation, but wanted to highlight them here as a refresher As we balance that with the goals that have already been set for fiscal year 'twenty five, 'twenty six, you can see where there's lots of integration, and this will continue to help with the setting of the 'twenty six, 'twenty seven goals and budget recommendations through the city manager to the city council.

I'm going turn it back over to Beth, and I will highlight if you have specific questions on any of the individual goals, all of our department heads are available for that later. Thank you so much.

Thank you, Jennifer. If we can go ahead to the next slide, this next section, I'm going to give an overview of the economic and financial landscape that we find ourselves in. With regards to the economic landscape, I've put up here a quote, May you live in interesting times. I worked for a budget director for many years that used to invoke this quote regularly, and it seems like a good time to bring it up here. And boy, do we have interesting.

We have tariffs. We have people watching GDP growth that was maybe tempered by the federal shutdown, but maybe not. We have inflation that is sometimes going up, sometimes tempering, sometimes back to going up. We have a job market that is changing in front of us. We heard from the county representatives about the VLF shortfall money, and then on a positive side, there is a clip from early January that said San Mateo County's economy is stable.

So there's all sorts of things going on out there, ups, downs. And so this forecast is being prepared in the midst of all of that. If we could go to the next slide, please. So in terms of the financial landscape, I want to just ground everyone in how we got here and a little bit of history over the last year or so. So in fiscal year 'twenty four, 'twenty five and then continuing into 'twenty five, 'twenty six, the city has been working to refine its revenue and projection or expenditure projections to more closely reflect recent trends.

So that work is in progress. In fiscal year or for fiscal year 'twenty five-'twenty six, we introduced staff introduced and the council adopted a multiyear budget balancing plan that would deploy our onetime balances that have accumulated and the money that we proactively, thanks to council leadership, reserve to offset future CalPERS obligations in the Section 115 trust to balance the budget through fiscal year 'twenty eight-'twenty nine. We also in the 'twenty five, 'twenty six budget, thanks to passage of Measure BB as well as just refined forecasts, we were able to add funding to add point six FTEs. And the council may recall that there were many years where we didn't have sufficient funding to expand our employment base and our service offerings. And so fiscal year 'twenty five-'twenty six, with the passage of Measure BB, was an important milestone in allowing us to start to make some headway in those much needed investments.

Next slide, please. The city's outlook for fiscal year 'twenty five, 'twenty six and 'twenty six, 'twenty seven is now indicating that we have less flexibility than we've had in past years, and some of this we planned for. So as I mentioned on the previous slide, with having more precise forecasts, it allowed us to invest ongoing revenues to meet ongoing needs and would temper the unexpected onetime fund balances that we're accumulating in recent years. But we've also seen some revenue weakness since the budget was adopted in June and lower unassigned fund balances that we were relying on to balance future year budgets. So I will talk about how all of that impacts the forecast as we go on tonight.

While we're not anticipating any budget reductions this year, we don't have a lot of resources in both fiscal year 'twenty five'twenty six and 'twenty six'twenty seven to make significant additions to the budget unless they are essential or come with matching revenues. And these changes that I will talk about throughout the evening will mean that we will need to start drawing down the funds that was set aside in the Section 115 trust earlier and faster than anticipated, and I'll get to that at the end this evening. If we could go to the next slide. So we, starting last year, have taken a new approach to budgeting. And that new approach, as I mentioned in the previous slide, is to get more precise with our revenue expenditure forecasts so that we could minimize the level of budget variances that we were seeing at the end of the year.

And we were seeing in some years and there are numbers up here. Was a little dramatic. Sorry about that. I talk with my hands, so maybe I should move that out of the way. So the numbers on this slide are less important than the concept, which is we were getting to the end of the fiscal year, and we were seeing fairly sizable variances in our expenditure and revenue projections, which was putting onetime money on the table some years in excess of 15%.

By way of example, the $45,000,000 at the end of fiscal year twenty three-twenty four represented about 20% of the general fund budget. So while that presents an opportunity at the end of the year to deploy those one time resources, it also means because this pattern has been fairly consistent that we haven't been able to allocate those on the ongoing aspects of these to meet our ongoing needs. So that kind of encompasses the new approach that we're taking to budgeting, which is how do we get more precise so that we can deploy ongoing resources to meet ongoing needs. But it does come with then less flexibility with onetime monies. In terms of next slide, please.

In terms of revenue trends, since we were here with all of you in June, we are seeing, and I'll expand on this, weakness in some of our revenues. You heard this evening from the county about the VLF shortfall. We in city vernacular, frequently refer to that as the VLF pack fill money. So, that obviously is is a source of weakness that we were not anticipating. We're seeing modest weakness in our sales tax revenues, not hugely significant, but there is some weakness there.

Our business license tax revenue has not been performing as well as forecast. And then our utility user tax is performing slightly worse and is not forecast to grow significantly in the out years. And I'm bringing that up here because I know capital infrastructure funding is a priority for this council, and utility user tax is one of our key dedicated revenues support those capital investments. So want some awareness there. In terms of sources of strength, transient occupancy tax, the TOT, is continuing to recover from the post COVID years, which is fantastic, and we're expecting another hotel to come online.

So hopefully, that helps boost those numbers. We're seeing some strength in charges for services, that revenue category. And then certain department revenues, department driven revenues are performing better than expected. And this is fantastic news, but also with the new approach to budgeting, we were focusing on those more now and making sure at the outset of the budget process, we're aligning those forecasts to what the recent trends have been. So looking to capitalize on those revenues as well through the process.

If we could go to the next slide. So this is another slide. Don't want you to pay attention to the numbers here in part because you can't really read them, but more conceptually as a preview of where we are going. So the light blue to the left is the results for the last fiscal year twenty four-twenty five. The medium blue in the middle is twenty five-twenty six, and the darker blue on the right is 2627, and I'm going to go through each of those sections now through the rest of the presentation.

Next slide, please. So before we do that, I want to just give a preview of our unassigned fund balance levels. So again, this was an important component of our budget balancing strategy last year because we were going to deploy the unassigned fund balance to help balance future budget years along with the Section 115 trust. Unfortunately, with the changes that I'm going to be talking about, we are seeing a more rapid depletion of that unassigned fund balance than what we forecasted in June. So the dotted line, the dotted green line is what we were forecasting in June.

And the darker line that happens to be the lower line, unfortunately, is what we're forecasting now. So in June, we were forecasting to have unassigned fund balance through fiscal year twenty twenty six, twenty twenty seven. And now we're seeing that based on this forecast depleted in the current fiscal year twenty twenty five, twenty twenty six. So if we could go forward to the next slide. So I'm going to jump now into an overview of our results from the last fiscal year.

So the two columns I would like everyone to focus on are the last two columns to the right. So the column second from the right is what we had forecast for revenues and expenditures and fund balance when we came to the council with the adopted budget. We were forecasting to end with $31,800,000 in ending unassigned fund balance. We now have our preliminary results for fiscal year twenty twenty five twenty twenty four-twenty twenty five. And a couple of things have changed since June.

First, revenues performed a little bit better. And this is thanks to what had been our strategy for budgeting VLF backfill prior to this year, which is we weren't budgeting for it, it would come in at the end. So that is that's contributing to some of that. There was strength in a variety of other revenues. So it ended about $33,500,000 $4,000,000 better than we anticipated.

Expenditures did finish higher than what we anticipated in June. And so that and higher to an extent that negates the improved revenue performance. So when you look at the bottom line, we ended twenty fourtwenty five with 2,600,000 unassigned fund balance than what we had assumed when the budget was adopted. And this number is going to be important when I move on to 24 I'm sorry, 2526 momentarily. Next slide, please.

So this chart provides an overview of how our revenues performed in 2425 compared to what we had forecast in June. And one of the things that stands out is that there are is not a lot of space between the blue bars and the green bars, which suggests that the forecasting was fairly reasonable. But there are some signs there. So property tax performed slightly weaker. Sales tax was pretty much right on par.

And then you can see some strength in charges for services and recreation revenues. And this is fantastic and this is a signal to me as I'm looking at the forecast of like, okay, let's look at past year's trends, let's look at current year's trends, and then let's update the forecast to reflect those trends. So, there are opportunities and we have capitalized on this in 'twenty five, 'twenty four I'm sorry, 'twenty five, 'twenty six, too many years, and 'twenty six, 'twenty seven of we're easing that up a little bit to reflect those trends. With regards to the VLF backfill, so that is captured in the property tax bars. And last year, we were due to receive $5,300,000 and there's a year lag on this.

So the amounts that the county was talking about this evening, that $5,300,000 would have been the amount we would have been owed this year. It just happens to be the amount we were owed last year also. So we were owed $5,300,000 but only received $3,500,000 So that's about a $1,300,000 difference that impacted our property tax performance last year. Next slide, please. So here's a visual of VLF backfill revenue as a percent of our property tax revenues.

And you will see variation in this, which is one reason why it was difficult to predict. But, last year, the $3,500,000 we received represents about 4.3% of our property tax revenues. So not an insignificant amount. If we had gotten the full backfill amount that we were owed, it would have been closer to 6% of our property tax revenues. Next slide, please.

So now I'm going to look ahead to where we are in the current fiscal year, twenty twenty five-twenty twenty six. So there are three columns on this chart. First was where we were when the budget was adopted in June. And when the budget was adopted in June, we were forecasting that we were going to end with a $9,100,000 ending unassigned fund balance. That was contingent if you look at the top of that column on ending of having a beginning fund balance, meaning ending twenty four-twenty five with $31,800,000 I mentioned earlier that fund balance ended a little bit worse in twenty fourtwenty five.

So that starts to feed through, if you look at the far column on the right, that we're starting with lower fund balance. So right there, that serves as a negative. We are forecasting some modest improvements in overall revenues. In June, we were at $2.00 $6,000,000 $2.00 $7,000,000 and we're projecting that to be about $500,000 higher, which is fantastic. We're also projecting that expenditures are going to end higher, than what was anticipated in June.

And that's fairly normal for us. So we just walked through some mid year changes. We also roll over multiyear contracts and things of that nature so that that increases expenditures. And then, want to point out, also on the far right column, the economic stability reserve. There's a circle there with nothing in it, and that is because as part of the VLF backfill strategy last year, we had set up the economic stability to reserve to act as a hedge.

And now that we are forecasting based on the information from the county that we will no longer receive that VLF backfill, we are zeroing that out, meaning we won't make a contribution so that will help balance the budget. And I should I realize as I'm talking very fast right now. I should remind everyone that 'twenty five'twenty six was the first year that we built the VLF backfill revenues into our base budget, that we had consistently received it year after year after year with our new approach to budgeting, trying to minimize the one time balances. This seemed like the year to build it in and we built that reserve in as a hedge and Murphy's Law comes into play. The year you do that is the year maybe something happens.

So anyway, is it's a big game changer for us. And what we are now forecasting is rather than ending with a positive fund balance of $9,100,000 we're projecting a negative fund balance of 1,200,000 And I'll talk at the end about how we're going to we're recommending closing that gap. If we could go to the next slide. So revenue performance, again, the green bars are pretty close to the blue bars. Property tax is down primarily because of the VLF backfill.

Sales tax is down modestly, and that's based on the latest forecast from our consultants. BLT, which I will business license tax, which I will talk about a little bit more momentarily, is not performing quite as we had forecasted when the budget was adopted. And then again, we're seeing some strength in department driven revenues that we have captured in this forecast, including the recreation revenues that I spoke about earlier. And I wanna just pause here for one minute. One of finance's goals for 2526 was to generate budget to actuals reporting to allow us to better monitor our budget position.

And the inaugural budget to actuals report is in your packet. I believe it is Attachment B. And so I encourage everyone to read includes data through January, and we'll be updating the data for February shortly. So I encourage you all to take a look at that. Next slide, please.

Okay. So business license tax. Measure BB was forecast to generate about 3,850,000 in additional business license tax revenue for twenty fivetwenty six. And so that was going to bring our total BLT collections up to $7,400,000 And that represents about 124% increase over what we would have collected had Measure BB not passed. We are seeing some weakness in this revenue.

We're taking the forecast down by about $1,900,000 And that is because the collection trends have just have not matched what we had projected. So the middle bars there show actual collections through September. And business license tax is paid primarily at the beginning of the fiscal year. So we get most of those payments in June, July, and then it tapers off. So what we were seeing in the performance through September was not a collection rate that was matching 124 percent increase.

Rather it was more like a 52% increase. So that was causing concern. And so you might recall that we came to the council in September or October, I can't remember exactly when. And council approved an expanded contract with HDL to take a more active role in compliance with our business license tax more so than what we were capable of with existing staff. And so I'm pleased to report that the two bars on the right hand side of this chart, while smaller, are starting to yield results.

So since October when, HDL expanded their responsibilities on our behalf, we have seen collections exceed last year's rate by 143%. And this is through January. I can also report that, we are expecting a very significant increase in our February collections based on HDL's work. So hopefully, is an area that when we lead into June, we might be able to take this revenue up a little bit, which would help not only with this year, but also next year's projection. So I wanted to make sure I touched on that for all of you.

Next slide. Okay. So now looking ahead. So when we presented the ten year forecast to the city council in June with the adopted budget, we were projecting, a positive ending unassigned fund balance, a modest, small, positive ending unassigned fund balance. But with the various changes that I've talked through, this evening, including the loss of the VLF backfill monies, we are now projecting to end with a negative ending unassigned fund balance of about $14,000,000.

As I said at the outset, we are not expecting, to need budget reductions this year, that we, are recommending a strategy where we start using our reserves a little bit earlier than anticipated. But it does create concern as we look to the out years about our ability to sustain services at these funding levels. So want to talk very briefly again about our revenue outlook, and then I will talk about the strategies that we will use to ensure we do not end the next fiscal year with a negative fund balance. So if we could go to the next slide, please. Again, here is the chart that you're familiar with on revenues.

You will see property tax is down, and this is a result primarily of the VLF the loss of the VLF backfill money. Sales tax, again modestly weaker. Other taxes modestly weaker. This is where the BLT revenues are captured. So if we could get that to boost up, that would help.

And then the other bars are one less significant contributors to our revenue picture, but they're all kind of very much in line with what we had projected in June overall. So if we could go to the next slide please. So this is where, and again the numbers on this are less important, but this is where I want to display for everyone the impact of these changes and what it means for use of reserves, in balancing the budget. So when we were here in June, we were anticipating, starting to use the Section 115 and trust starting in fiscal year twenty seven, twenty eight and that, the balance in that trust would carry us through fiscal year twenty twenty nine, thirty and that there would be a need for modest reductions or identification of revenues beginning in fiscal year twenty ninethirty and then continuing through the balance of the ten year forecast. With the changes I've gone through this evening, you will see that that has now been accelerated by by two years that, or we would start to draw down, a modest amount of the Section 115 trust, in the current fiscal year to bring fund balance up to zero, and then, deploy it and exhaust it in fiscal year twenty eight-twenty nine, at which point that would be when we would need to start seeing reductions and more significant reductions than what we had anticipated in June.

So the take home message is that we have balances to sustain us. Current course and speed, forecast can change, but current course and speed, have resources to sustain us over the next couple of fiscal years. But, we're digging into our reserves earlier than anticipated. And, certainly, the year numbers, are looking, a little bit more bleak than what we had anticipated in June. And with that, I'll turn the next part of the presentation over to our city manager.

Great. Thank you, Beth. Next slide, please. And I just have one slide that really tries to sum up what the proposed framework would be. And the word that really comes to mind for me is a measured approach. Diana and I Councilman Power and I were talking earlier, I'm trying to get to cautiously optimistic, but for now, we're gonna stay measured. So hopefully, by the time we get back in June, we'll be we'll be a little bit more optimistic. But really what you're seeing is is almost like a, you know, I don't wanna use the word status quo budget, but we're really gonna try to focus on our core services. You know, police, fire, so public safety, our work we do at the counters, supporting our neighborhoods. But also within core services is really making sure that we're supporting our most vulnerable residents as well.

So the values are definitely part of our core services. Something that we've been talking a lot about at City Hall is really focusing on modernization and efficiency. So as part of the budget process, I've asked each department to identify multiple modernization and efficiency activities that will be brought forward as part of the budget process that when we talk the way I've defined modernization is things that benefit the community from a cost perspective or processing perspective, making things quicker, whether it's building permits or inspections or other things. But modernization, really thinking about the end users. Efficiencies are things internal.

How can we process our work faster, better, more streamlined? I'm really trying to say is can we do more with equal to or less if we have to? So the departments are actively doing that. So in June, we'll bring forward a plethora of recommendations for that. Being future ready to be being future ready is really about if it is a status quo budget, what are we doing to prepare for the future?

You see a lot of language in the report about really starting to make a dent into our infrastructure planning and how are we going to fund for this infrastructure, not just building the new infrastructure, but the maintenance of said infrastructure. What is the total cost of doing the business of delivering great infrastructure and utilities? And as you heard earlier tonight, it's also combining our facilities with that. You know, we've built and we have really nice facilities, but we don't have any money to make sure that we are operating and maintaining those facilities. So really want to do some comprehensive studies to figure out, you know, in a couple of years, how are we positioned to really, make sure that we are funding those activities.

Economic development, this is something that we do. We have a great economic development manager, which you'll hear from soon on another item. But I would say now is the time to get real serious about economic development. I do think this community, this council is supportive of economic development. But we could do things like the digital billboard that will bring in a couple $100,000 potentially.

But with the deficits that Beth has posed here is we need to make a real big dent in economic development. You'll see some language that I inserted into the report about some property owners have came to us about potential rezoning options. Normally, we would not even entertain those. But when you look at the cost basis of a property tax by a Class C or Class B office that's not filled, and if it were to be converted to housing or something like that, you're probably like a 50 x return on property tax. So however, you don't want to just convert everything to housing and have no job producing land. Right? So there's some policy work that we'd like to explore and explore rather quickly because without a significant increase in economic development, without cutting a bunch of staff, it's gonna be really hard to make those revenues

work.

The final thing I'll say, and folks might be saying inter government relations, what's that? In years when might not be adding a lot more things to do, I think it's really important for staff to start focusing, and staff does, but really making sure that the city of Redwood City has a seat at every single table around the area with the different boards and commissions that the council sits on. And we we know you all you all go, but we wanna make sure that we're paying attention to what One Shoreline is doing, but actively talking with One Shoreline. How can we help you move your progress forward as well as ours? Silicon Valley Clean Water reached out to us.

They want to start talking about what the next JPA looks like. Still in discussion with the port about the fire training facility, but all of this to me comes down to intergovernmental relations. A lot of times that gets kind of pushed off to the wayside because we're we're trying to focus on how do we get those permits through, how do we make sure the library has what they need, how do we make sure to place a fire. But a real big emphasis on making sure that if we're not adding a lot of new, you know, activity as part of the budget process that we are well equipped to make sure that we are at the staff level influencing, you know, what we can for the city of Redwood City. So that will become a big focus for my administration partnering with the rest of the department heads. So there are seven items in there, but I think I tried to lump a few in there, but I'm happy to answer any questions after. I'll turn it back to Beth to wrap it up. Thank you.

All right. Thank you. So here is our budgets calendar. We're at that point of the presentation where we get to look ahead to the budget calendar. So we're here tonight presenting the midyear budget update.

On April 13, we will be back to present the capital improvement plan at a study session. There will be a study session in May on the CDBG and home grants. And then June 8, we will be back to submit or present the recommended budget to the city council for consideration with, final adoption and a public hearing coming on June 22. So, that is what we are looking at in the months ahead. In terms of questions for the city council to consider this evening, first is, are there any changes that the city council would like to make to the midyear budget amendments?

Does the city council have any questions about the forecast? Does the city council support the overall strategy for development of the fiscal year 2627 budget? And is there any other feedback that the council would like to give us as we develop the recommended budget? And then in terms of staff recommendations, we recommend that the city council accept the update on on the year end results for 2526, Accept the update on the midyear goals for 2526. Adopt a resolution appropriating and transferring certain funds related to the midyear budget amendment.

Except the economic update and budget outlook that we presented this evening, provide direction on the recommended framework for developing the fiscal year twenty six twenty seven budget. And then, by motion, approve the dates for the city counts for city council action on the fiscal year twenty six twenty seven budget is set forth in, in the staff report. And so with that, I'll stop talking.

Beth, thank you so much for the very thorough presentation, Jennifer as well. I know it takes a village just to get this presentation ready and all of the work that went into the staff report. So thank you so much for for that great work. Before we bring it back to the council, we'll take public comments. So pass it over to our city clerk.

Thank you, mayor. We have one in person speaker and one hand currently raised on Zoom. So I'll give it a few more moment moments for folks to submit a speaker card or raise their hand virtually. Okay. So we'll close the list now. We have Aaron Coleman and followed by Clara Jackal on Zoom.

So I just wanted to chime in on how much it costs to close Doc Town Marina. Last estimate was $29,000,000 As some of you might know, my I bought a floating home at the auction, and it was not built to code. It had no handrail on a spiral staircase, and my daughter subsequently, 11 year old, fell and died in that floating home. It's been traumatic for my son and I to lose her. She she was our whole world. And at the time I asked Terrence Codd just to buy us out at fair market value, and we would leave. He refused. He said that the city didn't have the funds to do that. At the time they spent $11,000,000 Now it's at $29,000,000 and nothing's really been done there. They just closed down the marina.

I've taken pictures of every bit of work that's ever occurred there. There's no justification for that extra money. So I mean, just recently my floating home has now gone up for auction again with everything I own still inside, including my daughter's cremated remains. The city will not grant me access to go inside and I don't know what to do. I have an attorney that wants me to sue because it was not built to code. The city sold it to me. They're talking like a $10,000,000 lawsuit, and I don't wanna sue. I've never wanted to sue. I was always told that they would take care of me. They never have.

A judge even told the city attorney to go to negotiations with me. He offered me $750 The floating home has a fair market value of $750,000 The city put me in a homeless shelter where I still remain. It's been five months and no one will work with me. The city attorney, Maxwell Blum, will not work with me at all. So I need help. If there's anything that the city council can do, I really appreciate their time. Thank you.

Thank you, Aaron. Our next speaker is Clara Jekyll. Welcome, Clara.

Hi, thank you. I want to start with the disclaimer that I'm a member of the police advisory committee, but I'm making this comment just as an individual resident. I'm concerned about the police department's proposal to allocate funds for a new five year agreement for body worn camera services. The reason for having police wear cameras is to increase officers' accountability for their own actions, and that's why body worn cameras have been touted over the last decade as part of a more modern policing philosophy. But ProPublica reported in 2024 that using the cameras did not make officers change their behavior in cities where the police department itself controls who can review and release the footage.

It takes an independent civilian oversight board with power to review the footage and determine if any should be made public to really make an impact on police use of force. Since

we

do not have a body with independent oversight authority here in Redwood City, we're not getting the intended accountability benefit from the body worn cameras. And consequently, it's just not useful to make a further investment in a new big contract for them. I would urge you instead to look at ways that we could use our communal funds to meet residents' needs in ways that are proven to reduce crime. For example, crime rates are lower in neighborhoods with lower eviction rates, when funds are available to respond to calls to housing emergency hotlines, among youth who participate in summer employment programs, and near libraries. Among the police department's own plans, there were discussion in the last PAC meeting of proposals to hire another clinician for the community wellness and crisis response program and to create more youth programs, both of which would also have more immediate benefit for Redwood City residents.

So let's put our investment into services that truly serve long term community stability and public safety. Thank you.

Thank you, Clara. And that wraps up public comment, mayor. Thank

you, city clerk. And before we bring it back to the council, I'd like to ask staff if we can reach out to Mr. Coleman on his situation. I know this is, I think, the the second time he's been here, but I know we can't address his concerns.

Happy to do that. Thank you. I do want to let the council know this isn't relevant to this agenda item, but the city attorney's office has been in contact and has been responsive at every opportunity. We just haven't been able to reach resolution. This already did get litigated in court, and the city is just proceeding per its judgment. Thank you so much.

Thank you, city attorney. And with that, I'll bring it back to the full council for any questions or opening comments. No. Sorry. We're going to take public comment from the council sorry. Comments from the council members on the agenda item now. Thank you. And we'll go to looks like council member Howard is reaching. Thank you for getting us started.

I'll do my best here. First of all, Beth, thank you, Jennifer, Beth, and of course our city manager. Thank you all and everyone who helped put this together. I had to go over it a couple of times. There's just it's like information overload, but it's so important. And so I really wanted to feel like I had a grasp on it. So I really appreciate that. But I do have a couple of just clarifying questions that would be helpful for me and maybe for others before we start in the conversation. Really like the fact that you identified our source of weaknesses. That was really so helpful.

Just, you know, you put it out there and then you explain what it is, And I think that's going to be very useful going forward. But could you help me understand why the utility user tax and any others that are just not producing? You explained the business license tax. Now we have a responsible group doing the delinquency and things, and I think that money will go up. So I was real happy to hear that. But things like the utility user tax or sales tax or even property tax, anything any plans in the works to counteract the negativity that the negative direction it seems to be going in?

For utility user tax in particular, that is a tax on utility bills. So for example, PG and E and solid waste. And an important variable in this, and Redwood City is not unique to this, but there's utility tax on telephone usage, for example, and cable usage. And one of the challenges that has been facing utility user tax entities, like Redwood City over the years, is that people are moving away from some of those utilities that had been taxed. So that is a cause for it's not that it's going down per se, but it's stagnating.

And it's not growing at the rate that it was anticipated for. So for example, in 'twenty four, 'twenty five, we were forecasting about $12,000,000 We ended the year with, I think, 11,800,000 11,900,000 So pretty darn close to the forecast. But what we're seeing this year and had continued that $12,000,000 out, we're seeing some weakness there. So it's at about 11,500,000 is what we're projecting now. Not a huge difference, but our utility I'm sorry, our infrastructure needs that that revenue source has been tied to is is so critical, and we just it's it's an added pressure that the utility user tax was never enough to support all of our capital needs, and the fact that it is not growing at a particularly rapid rate or not really growing at all just puts that much more pressure on it.

So that's why I wanted to highlight that. In terms of delinquencies, you know, we are stepping up our efforts on the business license tax, and that is starting to generate some some results. We also were here in January to strengthen our transient transient occupancy tax ordinance to allow a stronger follow-up there. And we're working on that as well. The team also is looking at our utility billing in general, which is separate from the utility user tax, and focusing more on how do we get that delinquency rate down as well.

So it's we're approaching this from multiple fronts, and hopefully it will start yielding like business license tax some results for us.

Oh, I certainly hope so, but I'm glad that you're looking at it from many different angles to see how we can make this a better situation. Many people may not realize, but one great example is Stafford Park. In the nineties, we were able to build Stafford Park. It was totally trashed. I mean, it was old equipment.

I wouldn't say it was trash. It was old equipment, unsafe equipment for children. And we rebuilt that entire park with utility user tax as we have done with many other park structures and many other infrastructure in Redwood City. And I hope that we're hope that we can make it robust again somehow, someway, but studying is certainly a good way to start. And hopefully we can do that.

But thank you. So you have a plan of action with that. Let me see. I wanted to thank you for really utilizing the customer satisfaction survey. I felt that was an amazing survey.

I mean, it really dug in deep and really brought up some very wonderful I don't know. I just feel good about our city right now with what what came out of that survey was honest, but it was hopeful and optimistic in many ways. The community feels optimistic and hopeful about the future of Redwood City. Everything else may be flying around, but I got the sense from our city because the majority of people felt very optimistic and hope that we will continue to grow the city in the way that we have been proceeding. So I'm this advanced planning should give everyone comfort.

We're not going to wait till the last second and start doing things on the fly. You're really planning ahead and hopefully we'll get community input along the way, which I know we will. If anyone has any ideas on what else we can be doing, because we don't have all the answers. This vehicle license fee, I just felt like I was kicked in the stomach. I mean, knew it was bad. I just didn't know how bad. And now we do. And it could be worse than We're hopeful that we'll get something, but it could even get worse. So

And it's the cumulative impact. So, you know, 4,000,000, 5,000,000 in a year, it's you know, that's not it's not an insignificant sum of money. But when you start looking at 5,000,000 after year year, you know, takes the toll, which is why you're seeing those out year shortfalls increase significantly. And here

we are trying to talk about infrastructure needs and building on our future. This is we'll get there. I mean, we've been in worse spots before, I think. I hope not, but I mean but we've come through because we always plan ahead, keep working and looking for new ideas. So anything we can do to help in that area, that's what we're going to do.

So you have accounted for the backfill crisis. I can see that. And thank you for highlighting that again because it's kind of hidden in some of the small charts. I had to really look for that. So thank you for highlighting that, that we are addressing it and we are planning for the lack of funds that may be coming or not coming at all. Let me see here. I'm glad we were able to do the hiring that we did. That was money well spent. We've been working lean for years and people know it. We haven't had enough police.

We haven't had enough fire. We haven't had enough staff in Park and Rec. There's so many I named so many, almost every department. Human resources was so short staffed that we couldn't get regular work done within the house. And I'm so glad that we have made the hires and let's really work hard to make sure we don't have to have anything like a layoff in our future because we need these people. We need these employees. At the moment, I don't think I have other questions, but I'll give it all I'll hand it off to my other colleagues. Thanks again. Thank

you for getting us started, council member Howard. Who would like to go next? I see council member Chu reaching. We'll turn it over to her.

Great. So thank you for this presentation. I know this was a huge amount of work. And, you know, this isn't you know, we've seen this kind of all all along the way. And I think I'm just reminded how how much the prudence and the thoughtfulness and the foresight of of your team and and the city manager's office has put us in a good position even as, you know, we've lost the vehicle license tax, even as, you know, revenues have dropped off, even as we're heading into uncertain times.

And so I really just wanna appreciate not just this presentation, but the thinking that led to us being in a good place. I I do think that we are headed into a lot of uncertainty. I mean, I'm you know, I wouldn't presume to know what's going to happen, but I do think we can confidently say things will be are uncertain. So I do really appreciate, you know, you continuing to sort of have that mindset about our city's finances. You know, I work in you know, I I'm on soft money in in research, the NIH has had a saying for a long time flat is the new new growth.

And, you know, there has been a little bit of an uptick. But I think there's been pressure on on the profession I'm in to constantly innovate and learn to do more with the same amount. And so to manager Heisinger's comment about innovation and modernization, I have a robot that allows me to offload a really, really boring tedious task. The robot does it 10 times better than I do. And the use of that robot has not only freed up, you know, a ton of my time, but it has resulted in many grant in in in quite a sizable grant.

So, you know, you never know. When you innovate, when you modernize, there can be really out good outcomes with that. And, also, you can offload really boring tedious tasks onto robots. That's another benefit. I I really appreciated the comment about maintenance.

You know, if you think about buying a car, you would never buy a car without being able to pay for gas insurance and oil changes. And so as our city moves forward, I I'd really love to see us continue in that vein of of being conservative and thoughtful and and the foresight you've shown. And also appreciated the sort of thoughtfulness around land use, and it's one of the things we actually control is what, you know, what things are zoned for. And and looking forward, we may need to to be more creative there depending on how crazy things do get. So overall, terrific job.

I really appreciate the presentation and the budget, and looking forward to the future.

Thank you, council member. Who would like to go next? You want me to go next? Thank you, council member G.

Break the silence. Thank you mayor. That number one, thank you. Thank you and the entire team. This is so critical for us as a council to take a look at where we're headed financially.

Mean, know, as council member Howard shared and as Jennifer shared the importance of the community survey, but just as important of potholes and affordable housing is the financial sustainability of the city, not just for one year at a time or two years, but five and ten years. And doing the work you and your team have done over the last two years have gotten us to a place, I believe, where we now kinda know with a pretty good degree of certainty, at least from a number standpoint. The numbers have a face to it. There are staff, there are organization, and the people we serve. So those two things, three things all go together to see what do we want to do as a council for the communities that we are elected in to serve here in Redwood City.

So I'm gonna kinda weave a couple different themes both in questions and my comments. And so number one, I wanna thank you and our city manager for the including our facility condition assessment as a priority. I believe that's a liability waiting to blow up in our face right now. And to illustrate, we are getting ready to open a new senior center. The Veterans Memorial Senior Center is gorgeous from what I hear that people have seen it. But to our city manager, how much money are we going to set aside every year for a capital reserve? What do we have in the budget for it?

At this time, we don't have any.

That's the The building is going to age over time. The mechanical system needs to replace the electrical, and we do not do that. And we're not the only ones here in Redwood City. I can say that to every single public institution along the West Coast, they don't do that. And so we have sewer lines.

Well, I can't say that because Terrence and Adrian and the team do a pretty good job of water, sewer, vehicles. But when it comes to the buildings, we just wait till everything fails and we find a way to to pay for it. And that's not the right way to to take care of our assets and our libraries or police stations and things like that. So knowing where we are and then looking to the finance and audit committees, how do we do we plan for this financially is gonna be really really critical. Beth, I wanna go to your slide 10.

You don't need to go there, Crystal, but it's the slide that says, may you live in interesting times, And we talked about that earlier today. There's nothing new on it six months later, eight months later, is there?

Variations of themes.

There's variations, but there's nothing new. It's still uncertain. And and, you know, maybe the job market's up. Maybe AI's hiring. Maybe Meta's laying off.

Maybe but it's still uncertain times. So I think that is gonna be the new normal for, at least from my perspective, the next five to ten years, or let's just call it five years, that we're gonna continue to live in interesting times. And there's an interesting comment that you made that you start to include some of VLF where before we didn't, so we might have jinxed ourselves by including it in in the budget because I think we knew it was gonna be a fight last year as the budget set up, and it's gonna be even bigger fight given the budget deficit that the state's forecasting right now. So the probability of getting anything at least from politically is probably gonna be remote, and it's gonna take either a court decision or something else to get us some money back. But I I think we kinda knew that.

We knew the play last year. And and, you know, I think you and and the city manager at the time recommended an economic stability reserve that the council kind of cut in half because I think the comments were that we should spend the money not save it, and the results are showing on your analysis right now. If I understood your slide right, our ramp on the one hundred fifteen Trust is four years and then it's emptied. Is that correct? Think that was slide 28.

Yes. There's about 30,000,000.

So once we start and we do this four year plan, it's zero at the end of well, starting 2930, there's nothing left in the one fifteen trust.

Correct. Correct.

I'm not too crazy about that, but I I understand what you're doing because there's you know, the government's had a committee. We've heard legislation about changing some PERS retirement ages that would just only increase our PERS liability. And that's legislation that's been introduced. It's got to go through its legislative process, and that's only gonna just increase our PERS liability, which then it will manifest itself on the top line because there's no middle line, the white line anymore. So I appreciate the planning, but I don't know if I want to empty the 115 trust or plan on emptying the 115 trust as a way to solve our budget.

If I remember correctly, slide 13 was, you know, now you know exactly what our one time fund availability is where we were kind of sort of know, but now we know. Is that did I hear that correctly? Higher degree of accuracy now.

Yeah. Higher degree of higher degree of accuracy. You're never gonna have a forecast that is gonna be spot on. And if you do, go buy a lottery ticket. But but the idea is through looking at past trends, looking at current trends, and then regular monitoring that the results become more known and you can proactively respond to them is the idea behind it.

Very good. And then as you talk about the increase in business license tax collections, I think we got an email the other day. How do we deal with I don't think it comes from the city of Redwood City. It comes from, like, some weird email address, like HDL. How do we make sure that stuff doesn't get caught in a spam filter? It How do we legitimize that email address?

That that HDL is is sending?

It doesn't come from the city of Redwood City for business license tax.

That is something I could follow-up with with HDL on. I I don't know the answer this evening, but I can follow-up.

I think that needs to be followed up on because, you know, if we rely on technology to give people invoices and it's a weird address and not the city of Redwood City, I'm not gonna pay a hell of a lot of attention to it. I mean, I did this the city manager of it. Go, is this a legit email? I mean, that just with our cybersecurity training, that's what we need to do is question these emails we get before we open them, which leads me to the cybersecurity. I think we're not spending enough on cybersecurity.

I'm really worried given the sophistication. I think we have a new CISO, you know, security officer. I don't think we're spending enough on cybersecurity, and I think we need to make sure we are budgeting correctly for that. And then I'm going to loop back. Well, maybe I can just summarize what I think I heard in your report.

Basically, the midyear budget presentation this evening, there's no money available for onetime expenditures for whatever our priorities are based on where we are today. Expenditures are going up, and revenues are either nominally going up or staying flat. VLF probably shouldn't count on anything for the foreseeable future. And then to our city manager and city attorney, we have a project that's gonna wind up in some sort of settlement and litigation. So where does that money come from?

Yeah, it's a great question. So here in Redwood City, we don't have a like a litigation reserve or whatnot. So we essentially cash flow these activities. And so we have had internal discussions about how to set that up next year. But essentially, of the money that Beth had talked about has gone towards some of these efforts around litigation and whatnot.

I mean, we know we're gonna spend legal fees, and we know this project that, you know, staff has been working on trying to get across the finish line is late. We know there's probably gonna be a claim, and so we're just gonna cash flow from general funds at this point. Unless

we structure something dramatically different for next fiscal year, correct?

Yes. And that's the and so as we take a look at the facility condition assessment and capital, we need to figure out how to have a reserve for some of this stuff because we're not doing a good job of planning for these things financially. And then I just want to go back to your slide, Patrick, on I think it's Slide 22 and asked that as we study what we need to do going into the future, my polite request is that take a look at any policies that council has put in place that are barriers to economic development. You know, we've talked about when we brought green infrastructure back to reconsider that, that we've lost five employers who went to someplace else because we're not competitive. So if we have policies in place that are making it making Rebate Sea not competitive, we should look at it as a council and say, do we wanna change it or are we okay with that?

Because we we want the community benefits. We've been provided with the community benefits. But if we put barriers in place that property owners who develop can't fill their office buildings, we should be aware of that. And so council can decide what we wanna do, if that's okay or wanna make a change. But if there are policies like that, we we should take a look at that.

And then as as we modernize, as council member Chu mentioned, time is money. And so if there are things that we can do that can speed up processing or speed up adjudicating. I'm not saying everything needs to be said yes, but if we say no more quickly, then people can move on and free up staff resources to do something else. So those are the things that I'd like to see us take a look at and that you and your team take a look at. Very sobering presentation, but I think it's really, really critical because while potholes are really important to our community, so is financial viability and sustainability.

And I think I feel like we're at a place now, Beth, that we can really dig into and plan in detail rather than at a 10,000 foot level. And so again, thank you and your entire team for this hard work, and there's just more work we have to do together. But thank you.

Thank you, council member G. We'll go to council member Padilla.

Hi, Beth. Thank you for your presentation. So I went through the numbers, and I know that I appreciate the optimistic tone, and I hate to go back to it. But I just wanna acknowledge that when that the money that we take out of the section one fifteen trust will help us now. But as council member g, we are still responsible for this.

So this is something that will help us in the short term, but there are still these are still responsibilities that we have. So we may kick this can a little bit further down, but these responsibilities won't go away. I'm very excited about the budget to actuals reporting. I that I think is going to be extremely helpful, and I'm very excited about it. I also think about when I think about ways that we could be bringing in more revenue, is there low hanging fruit how we can make permit processes easier?

I hear friends and neighbors who live in other cities talking about kiosks that they have are easy just experiences that were easy for them to facilitate whatever paperwork that they needed? Is there low hanging fruit that we can have? Are there programs or softwares or just ways that we can incentivize people to build things and get things done in their home and keep them in our city, whether that's through licenses or permits? I did know that, you know, when we do use these funds that I even though there are no budget cuts suggested now, you know, 02/2829 is fast approaching. And after our presentation from the county, it doesn't look like we can count or should be even forecasting with VLF money anymore.

So I think we should just keep in mind alternative forms of revenue. I know that we've mentioned things like billboards, but I would also look into just like to look into alternatives such as solar or maybe generating energy. So I would like just to keep all kinds of opportunities to welcome new ideas. And some other notes here. Yes.

Streamlighting services, helping get filling our vacant buildings, and partnerships, I think. Anything that we can do with the county and helping would be great. I think this I think the VLF is something that we're all going to need to rally around together. I think that we need to be a united front in a much bigger group around this because it will add up and it is a big number and we didn't get as much of we didn't get a lot of it last year. And I did have a question that I wanted to pose about just the way we use monies in terms of funding things, and I don't know if this is necessarily for you, Beth, in terms of when we fund projects with unused monies from vacant positions.

Is that is that something we do as as a one off, or is that part of our philosophy? I just wanna make sure, and maybe this is more for the city manager, Beth, because there are certain things where I looked and it said, you know, vacant positions were monies from vacant positions were used to fill projects. So if you could speak to that city manager.

Yeah. I would say there's no hard and fast rule, but it is fairly common at mid year budget if a department has funds because maybe hiring is taking too long is they'll try rather than ask for a new budget ask, they will try to utilize monies that are already pre budgeted. So but the reason why say there's no hard and fast rules is some departments do it, some departments have longstanding history of doing it. And this gets into some of the policy work we have to do is we have to come up with, are we going to do that or not? Sometimes it can be a disincentive to hire positions that are vacant because folks like to have I'm not saying we have that problem, but I've seen it in other organizations where you kind of have a not a slush fund, but you know what I mean, you can really build and then use some one time.

Yes, so we're aware some departments do it, but typically at midyear is when and maybe the very end of the fiscal year after there's a little bit money left over.

And maybe if I could add that in building the forecast for the current year, we are assuming some level of underspend because that has been typically our practice, and it takes a heck of a lot of planning to get it down to zero. So inherent inherent in our forecast is is a level of underspend. Sometimes that is achieved through salary savings. Sometimes it's achieved through through other mechanisms. And with reallocating salary savings through a mid year or a year end process.

We're looking at that on an individual basis of what are the requests and how is it being allocated.

I appreciate that. I just think that it is something for us maybe just to think about in the bigger picture when how certain monies are used. There are different ramifications. Thank you.

Yeah. And you can say, no we're not using salary savings, but you you will see that in the mid year list in those instances where salary savings is being used, it's not it's not being used. I would suggest for kind of the nice to haves of let's let's kind of have something, you know, fancy and new that it is meeting its meeting, needs that were it not for the the salary savings, there might, as the city manager pointed out, be a separate ask. So for example, I'm going to pick on my friends in parks a little bit. There is some reallocation of salary savings to help offset some capital costs.

And so we need those to keep the project moving. Similarly, I'll pick on my friends in police using some of those vacant positions for example, for overtime, which is needed because we've got positions vacant. So I would say, generally speaking, where you're seeing that happen in the mid year budget adjustment is to address not

kind of

the nice to haves necessarily, but things that costs that would be before us. And we would need to figure out a way to cover it were it not for that salary savings. Thank you, Beth.

Thank you, Council Member Bedia. Who would like to go next? If there aren't any other comments. Thank you. Councilmember Stoecken.

I'm just waiting for the vice mayor to go. Likes to go after me, seems. Alright. So firstly, thank you so much very much for your presentation, for all the work that's been done to get us to this point. Firstly, I wanted to mention outreach.

I I was very pleased as we discussed at a previous meeting with the results of the community satisfaction survey, but I do wanna remind folks that only about 800 people completed that survey. So it is a good data set to reference, but it can't be the only source that we're basing this how many million dollar budget on? Gosh. Well,

the general fund is roughly over $200,000,000 And then when you add in the other funds, we're at, like, I think, $9.85 or anyway.

$200,000,000

Yeah.

No. Well, that's a general fund. But yes.

Versus the midyear budget updates. Thank you. Yes. But so I just wanna reiterate that there are additional opportunities for the community to participate. And if possible, could we return to that slide that included the timeline, please, for the making of the budget? Just for as a reminder. I should have written down which slide it was. Sorry.

It's towards the end. It's slide 31, I believe. 31. Thank you.

Right. So there are still additional opportunities to weigh in as members of the community on the budget. And you can also email the city council following the discussion, publiccomment@RebateCity.org. And then to council member Padilla's question earlier, you're looking at page five of attachment d. That was the well, anyhow, the resolutions.

And so we see that in response to one of the public commenters that there's a proposal to reallocate 1,500,000 in unspent regular salary wages to secure five years of uninterrupted service without requiring additional funding for the body worn cameras. And I think contracts of this magnitude and size should be subject to further review. In this case, we had a member of the police advisory committee mention that the use of body worn cameras is not proven. But then in this line item here, states that they are. So just making sure that we are engaging the very board commissions and committees that we appoint as city council to inform us on the on contracts of this magnitude and size would be important.

And and what I wanted to mention in echoing customer video's comments was more about the use of ongoing funding for from vacant positions to fund one time expenses like a contract such as this, in my opinion, isn't best practice or sustainable. I understand it's one of the ways one of the few ways that we are able to be nimble and ensure that we're paying for overtime, as you mentioned, you know, with our police officers, for example. But it does go against one of our principles in the staff report that is using ongoing revenue to fund ongoing expenses and conversely using one time revenues for one time expenses. So I just wanna make sure that going forward, we keep that into consideration. Not to say that I am not supportive of body worn cameras.

I am, and it naturally is supported as well. We see polling on that. But just so that just jumped out as me to me as an example since I'm member of the public. I named it. And and then also, again, it if we're having vacant positions, when we've heard from the community satisfaction survey that we the community wants us to continue investing in public safety, then we should be filling these positions wherever possible versus diverting those funds for onetime expenses.

And we also heard loud and clear from voters with the passage to measure b b that they want us to continue investing in essential services, including public safety. So these are just the things that are coming up for me that I wanted to name. But moving on, I do agree with council member g that the drawing down of the pension, one fifteen pension trust fund, and with council member Padilla that that is, in a sense, kicking the can down the road. I understand why it's necessary. However, meanwhile, our pension liability will continue to balloon. I also don't want to see that zeroed out either. And I

Yeah. So maybe a little bit of a reminder on the origin of this section 115 trust. And I was not here for all of this, so I'm going to go based on what I know. But if I'm going to look at Michelle Flaherty, if she wants to jump in on this, is that so we have our ongoing pension obligations, and then we we CalPERS requires us to pay down this unfunded liability. My my understanding of the situation is that those the unfunded liability costs were expected to peak sometime around now.

And that when the city adopted its 8020 strategy for use of one time monies, and would put some of the one time monies to pay down future obligations, it was put into the Section 115 trust. We had a choice of do you pay it to CalPERS now, or do you put it in the trust where it's going to earn interest? We benefit from the interest, and then it's going to grow more. And during those peak years, we could then draw that down. So the proposal to use the Section 115 trust that was part of the twenty five-twenty six adopted budget was part of that long term vision.

So it was my understanding was that it was never intended to sustain us over time. It was to get us through those peak years when the unfunded liabilities were higher. It does not affect our ability to pay our ongoing obligations. That that is that is is baked into the budget. Now certainly counsel could say, okay, we want to stretch those funds out longer and maybe not spend them down in four years or the three years that was proposed when the twenty five-twenty six budget was adopted.

And that's certainly an option. But, you know, the underlying point of this is that we are using one time resources, which the Section 115 Trust is also to sustain us for a period of time. And that period of time is important because it also gives us time to plan of, okay, what are you going to do when it gets there? But it's certainly counsel's prerogative to say we want to use less of it, but it will accelerate depending on how that's structured and depending how future years end up looking. It could accelerate the need to make reductions to the budget or identify new revenue. So it's just it's a trade off.

I'll just reaffirm everything she said was absolutely right on. And when the plan to set up the trust was developed, it was developed in conjunction with the Finance and Audit Committee and brought to the full council on several times around. So there were several discussions about it, and it was intended to be used exactly as Beth has described.

Thank you. I forgot to ask some of my questions. Just going back to the body worn cameras there. Do we know which positions would be affected by the diversion of funds from vacant positions to that contract? Thank you, Cheek Bell.

Yeah. And my understanding just from a high level is that it's taking time to get people through the academy. So these will be filled, and so this really is kind of redeploying in that way. But that was the 30,000 foot view, and now we'll get down to road level. The five two view.

That's how tall I am. So if I understand your question correctly, you're worried about the vacancies?

Yes. How many of those positions that are vacant are the funds being reappropriated for? And are they sworn officers? Are they community service officers? And did this go to the police advisory committee?

So okay. That's a lot. Hold on. Let me break it down. So we averaged about eight to 10 officer vacancies through the last calendar year. We've hired a lot. We've had a lot of retirements. Currently, we have six vacancies, and we have six or seven in the pipeline to get hired. So the intention is always to be at zero for vacancies, and that's been my goal since I've been here. So it's hard to say exactly because we'll have

an

officer be in a position, they'll retire, and then it takes you know, it will be vacant for a certain amount of time, then we'll fill it. Right? Same thing with CSOs, for example. So that does that make sense? A little bit. It's hard to say. It's very fluid, I guess, is the best way to say that.

No worries. And I'm assuming those are sworn officer positions?

It's not just sworn officer because we have vacancy we have dispatch vacancies. We had a lot of dispatch vacancies in the early part of the fiscal year, if you guys remember our crisis that we had. So we're looking great in that arena. Same with CSO, took a minute to get those positions on the books and get them hired. So we're actively going through another CSO recruitment right now. So if anyone has someone, tell them to put in. But yep. And thank you to HR for all the work that they've done to get those recruitments because that does take a lot of time. Mhmm. And it takes a long time to get people hired and fully trained. So

I'll just imagine it's third, third, and third dispatchers sworn in CSO roughly.

I wouldn't even be able to say that. Like, I I don't know exactly because it changes every month. And I report out on our vacancies to the pack every time we meet.

Thank you. And did the did this reappropriation go before the pack?

Reappropriation?

Of the funds from the Okay. Vacant

To to the chair, if I may. One thing, we might be getting a little bit caught in in definition. To me, body worn cameras, unless we the city are gonna decide not to have them, are totally baseline operating costs. And so and so far as thinking of it's like one time, either we're gonna have to fund it this year or we're gonna have to fund it next year. Right? And so so it's not like money shifting from positions or or whatnot. Those those positions are are fully funded. They're there. So I just wanna articulate that it's it's totally part of the baseline operating cost for the department just like computers are, just like vehicles are. Unless we, the city, decide that we're no longer gonna have them, then it would be, you know, looked at differently. But just wanna clarify that.

Thank you, city manager. Thank you, chief Bell.

Thank you.

I'll pause there. It's been quite a few minutes.

You. Council member Serkin, the vice mayor.

Thank you so much. I'm just going to say I'm glad that last year we had 26 hires, and we've needed them for a long time. And I hope that we can stay stable with that. I support this budget. I support all of the assumptions.

And I think it's a good it's a sustainable budget for the unknowns that we have and for this VLF lack of funds. I just have some things. So the sales tax weakness, I would like us to redouble our vigilance. And I see Amanda there, and I know you're doing amazing work. And hopefully, some of these 26 full time hires can help.

But we really need more of our ground floor retail in our downtown and all over Redwood City. And so maybe if we get some of these vacancies, I was happy to see that the vacancy rent for office went down from 36% to 28%. 28% is still a lot, so I do I really do support this idea if there's stranded class two office, class three office that are kind of just, I don't know, just stranded out there, and then we can repurpose that for housing. That's a great idea if possible. That was in the report.

But if we get if the vacancies are down, which it sounds like the trend is, which is exciting, partly because more back to work, you know, more requirements of people being back to working in the office. So maybe if the vacancy rate is down on office, maybe that will turbocharge our ground floor retail. And then maybe that will increase our sales tax revenue. That's a hope. So now I'm going to Chief Bell, you didn't go far.

Come back up. What what I want to something that's exciting to me every year is the budget, you know, it it tells us and it tells the public what we do. And it's not just $200,000,000 that we stare at in the bank. And so I wanna ask you about where am I? Oh, the student intern program that's in our that was funded and it's tell me about that. With the police department, you have a student intern program that's in the budget. Can you tell me a little bit about that?

We have a contract with Year Up, and it is a program that gets brings in youth, and they train them for six months, and then they place them with us based on the match and based on our needs. So we're currently trying to place someone in the program because the first individual didn't work out. So but again, we're that's something we're committed to to bring in youth and allow opportunity and exposure to government work, but also with the police department. And once we have the intern, not only we don't just silo them in the police department. We have them look at different departments as well, they're exposed to the potential of landing a job when they're done with their internship within the city.

I mean, that's just fantastic. Really great work. Very, very proud of it. I also I know this is I just want to give you kudos because I know that the community wellness crisis response team clinician is now an employee of Redwood City. They were contacted through the contracted through the county, and this is a woman with a PhD in psychology.

And when we have crisis, mental health crises out in the community, she goes out with the police and tries to de escalate. Can you I saw her get pinned last month or earlier this month, But could you I mean, it's just fantastic that we have a community wellness PhD gal who goes out on these calls. Could you just talk about that for a little bit?

Yes. So having her on board as a city employee has allowed us more flexibility with her ability to adjust her hours based on our needs in our community and also the department. We didn't have that before. So bringing her on as a part of the city, we we really have that upper hand, and she's been allowed to do more. She wanted to do more before, but she wasn't allowed to because of the contract. So it's just really elevated our service.

Well, and it's a feather in our cap that a woman of her caliber is interested in working as an employee for us, and it's due to your leadership and many others in the city. And I'd I'd just like to thank you for that. I'll go on now. See Tiara. Go up, please.

And when you all are here, I'm I wanted to notice that we have an increase of, what is it, 37% in our parks fee income. And Patrick told me it's because COVID is kind of winding down and now folks are really coming out and actually really getting more activated with our park programs. Can you just tell me a little bit about our park programs or about that increase?

Yeah, absolutely. I mean, now that it's more safe to be outside, programs are being impacted with increases in participation numbers so that's really great. Our youth and teens for instance for our summer camps we're seeing an increase in demand for spots in our summer camps. So we're making some of those adjustments for the next year also because we don't want to see giant waiting lists. We want to see as many kids as possible in our programs. So yeah, people are outside and they want to be in our parks and our programs and recreating which is a really great benefit to the community.

Well, thank you. Thank you. Thank you. Let's see. Where am I?

Well, this is to you, Patrick, and to Melissa before you that our Community Building Academy participation I'm really glad that we brought back the Community Building Academy last fall, and I hope that we keep it. We we have a 100% of the people who took the survey said they loved it. And that's a real great pipeline for us to get community volunteers and future planning commission, future boards and commissions, future city council members. We need a a really robust pipeline, and so I'm really glad we we didn't have it for about eight years, and I'm thrilled that we brought it back. And I hope that we I'm glad to see that it's in the budget.

Let's see. And then I I just you know, also in this, you know, it may sound prosaic or whatever, but we we have a plan to prevent illegal dumping. It's a huge problem in our neighborhoods where folks go in the middle of the night and just dump stuff in a neighborhood that isn't theirs. And we're working on a plan, you know, with recology and so forth to get it get our arms around it, and I'm really proud of us for doing that. And the same with this, again, may sound like who cares, but, you know, we have a plan for proper disposal of fats, oils, and grease, which is a real problem because it goes out into the bay, and restaurants make a lot of it, and we have a lot of restaurants.

So I'm really happy that we have a plan, an outreach plan. I know you're working on that, Amanda. And just a couple more cleanup things. I'm okay with the one hundred fifteen trust because it was addressing that peak. I'm really glad you asked that question.

So it's addressing a peak in people retiring that's so I feel pretty comfortable about the plan of spending it a little early, but it was never meant to be there forever anyway. So I really like our hazard mitigation plan, and when we talk about building new projects and red tape, if you have a lot of green stuff, the other side of that is if you build something where you haven't planned for sea level rise and you haven't planned for ground level rise, which is required that we do by the hazard mitigation plan that the state of California requires we do, and it's in our budget to work on it this year also. So it's very important that we do plan for these things because businesses can go out of business if they if if we don't. And to to Marcella's point and Isabella's point, So Marcella was talking about, oh, let's do more solar. Let's do more green stuff, and to Isabella's point about innovation, innovation, innovation, I just want us to keep a really good look on, you know, battery battery batteries are becoming cheaper and cheaper, that technology, highly technical, highly expensive, but the prices are coming down every month, and that's a real linchpin to solar.

That's a real linchpin to electrical. That can save us money, and that can be good for our budget. So with innovation and green, I'm excited for us to keep looking at that. So libraries, I'm amazed with some of your projects. Thank you. HR, fire, I'm really happy you're all here, and we want to sustain this budget for you guys. I I approve I approve the budget we have here.

Thank you, vice mayor. We'll go to council member Padilla. Sorry.

Just thank you. Vice mayor, you reminded me when you said the fog, the the fats, oils, and grease. I was reminded in college, I learned about a a big campaign that went on during the war about encouraging people to collect this and save. It was a kind of it was a campaign to collect your grease. I'm not saying we suggest that kind of campaign, But I do think that I I see that we're at 50%, and I always wanna find ways that we can engage our community, whether it's through, I don't know, Girl Scouts or organizations.

We have so many I think of when we get these kids come in and they are so enthusiastic and passionate about conserving water, I think, how can we get a great community outreach or a campaign, a social media campaign? Because I I don't think many people know about about the fats, oils, and grease outreach and, you know, getting these food scrapers out. Maybe we engage our schools. Maybe this is something we can do with the schools in partnership. I mean, the reason I have my mug here is because my daughter told me to stop using paper cups.

So I think if there's a way that we can engage the youth on this and maybe a partnership with the library to a lot of these. I mean, it's for the fog or mean, it's also for the as the smart eagle for the flume. I I think we we have two people using this. I personally think I know one of the people, and he tells me how awesome it is. But we have so many great opportunities. Let's just get the information to the people. Let's let them know that we'll the city will come, give you this awesome tool, help you install it so you know if you have any leaks in your water. So we have so many great resources. I just wanna make sure we're doing whatever we can to get the information out to the people. Thank you.

Thank you, council member. We'll go to council member Sturka.

Thank you, mayor. I just wanted to wrap up my comments. I agree with council member Gee about looking at processes to keep us competitive and with council member of the to make our permit processes easier. Just looking at, you know, page nine of attachment c, one of the items is implementing 75% of the priority one and two recommendations in the engineering transportation matrix organization and operations assessment. And so, you know, the question I had asked Patrick was, well, what are those recommendations just to, you know, remind us here?

And city manager, do you mind if I highlight a couple from the listing, Sherry? Okay. So it was item 40 was the development process analysis, and item 56 was expanding to get a permit web page on a city's website, a home home page. And so I just wanna elevate those two. They're you know, we they're in priority level three, so we haven't got to them or finished them yet.

But if we can, in any way, kind of accelerate the process to make planning application submittals digitized, reviewed, and integrated with our permitting software system as soon as possible and update that get a permit web page just so that it is easier for the community to go through that process, open their business, get a permit, etcetera, that would be really helpful. And then you mentioned economic development, city manager. And I I saw one of the item items was just discussed AI, and specifically AI using government and coming up with a a government use policy, which is very important. But in addition to that, one thing it made me think of is our economic development, economic mobility action plan and how we we didn't quite discuss AI and the impact of AI on the workforce in River City. And so going forward, if we can discuss, you know, as you had mentioned, to about, you know, robots taking on tedious tasks.

Right? How are we reskilling and retooling our residents to adapt this changing economy in the AI future? So just wanna make sure that we address that, and that is the end of my comments. Thank you.

Thank you, council member Stirkin. We'll go to council member Howard.

One quick comment. This has been a great robust conversation, and I'm really glad we've had it now, and we'll have it more in the future. But I one thing I want to add that I haven't heard, but I know our city manager is going to be all over this and probably tell me it's probably in the works. And that is I'm concerned that going forward, let's make sure our staff is totally in the loop, that they're part of these difficult conversations that we're having, that they feel they can make suggestions if they may have ideas we haven't even thought of. I'm just making sure, and I guess you're going to tell me you probably are already doing it.

So I just wanted to because I hadn't heard that, and I see all these wonderful staff people sitting here, and they all want to do they want to make Redwood City very successful. So let's make sure they stay actively engaged and in the conversation. Thank you.

No problem. Thank you.

Being future ready.

Thank you, council member. Not seeing anybody's hands up, I'll go ahead and add my thanks to staff, Beth, the whole team for the great presentation. You know, my colleagues have talked about this tonight that we've we've been here before. We have been in uncertain financial times, and so we know that we could persevere as a community. We can get through this.

Right? I think the the difference is that we can't expect or we can't rely on, you know, any extra help from either the county, the state, right, or the federal government. Everyone is hemorrhaging to be able to get through their own financial crisis. So I'm really happy that we're we're looking at what the weaknesses that staff has identified. I thought that was really helpful.

So knowing that the BLT hasn't fully collected what we projected it to, but we're using HDL to help with that collection is is super valuable. But also, I think it's such a a huge value add to use economic development as the other lever here. You know, I thought some of the ideas around just modernization and and increasing efficiency was super helpful. The land use review as a a concept, I thought really stood out. I thought that would be a really great way to identify some some revenue drivers, but also planning applications, right, and how long it takes for SAP to process that.

In governance last week, we heard about a state bill that was gonna make that process a little bit streamlined, right, and kind of bring us in line with what bigger cities are doing and the timelines that their residents expect. So, you know, that's an area that we could be looking into. You know, policies acting as a barrier, and we absolutely saw that happen last year. And so I think that would be an interesting thing for us to reconsider as as we start to get creative. Right?

Something that, you know, I was curious about as a a young planning commissioner was just around what the economic impact of proposed projects look like. Right? What does a completed project do for a certain neighborhood and the economic impact of having that building completely full, what that does to the businesses that are nearby. It's something that we haven't fully captured that I think would help us in our decision making over the next couple of years. And, you know, I also wanted to just mention some of some of the things that I saw that was really great in here.

The the citywide plan, the master plan for facilities. We've been talking about that for a while, and so that $100,000 is gonna really get stretched right when we start talking about what the needs are currently and also the new buildings, how we best take care of them. You know, something else that stood out to me was just our our parks programs are bringing in the money. It is incredible to see how much revenue is being generated by these community events. I hear from our staff all the time that really just we have the cream of the crop that folks wanna be in our downtown, and and we see that.

And it also feels like that could be an opportunity for us to maybe develop a a community events that we haven't had before to help seed funds, either, you know, the economic resilience fund that we just spent out or, you know, help us replenish the one fifteen trust account, right, so that we could just build the local resiliency and be prepared for whatever comes next. But having that question mark is something that I think we should be answering or coming up with a plan of answers. So, you know, I don't know what what that trigger would be, but absolutely having that dedicated to the services that have been ID'd in the community survey would just be so important. And as I wrap up, I also want us to think carefully about what downstream costs we might see. I know the county our county partners mentioned that in two weeks, they'll have a better idea of what they're expecting.

And so as we sort of get that information, we should think about the Fair Oaks Community Center and what services that the county helps provide that they might not in a couple of months. Right? I wanna make sure that we're preserving the things that are keeping people above water because it's just gonna be that much more expensive for us to take care of them if something were to happen or even worse if there isn't that service to be provided anymore. We're leaving neighbors in a vulnerable situation. So that is just something that I think should be our our guiding light in the next couple of months.

But with that, will go ahead and hoping I can make just one motion for all of staff's recommendations. Getting the head nod, so I will move staff's recommendations. Is there a second?

Second.

Great. That was motion from myself. A second from council member Howard. Could we get a electronic vote, please?

Motion passes unanimously.

Great. Thank you everyone again for the robust discussion. Thank you to staff for all the great work. And we will move to item 10, our study session, beginning with ten a. We'll hold a study session regarding potential updates to Redwood City's municipal code regulations for mobile and sidewalk vending. As a reminder, city sessions are to receive feedback from the public and the city council, and no formal action will be taken on this item this evening. And with that, we also have Spanish interpretation for this item, and I'll turn it over to our interpreter to give instructions for hearing the meeting in Spanish.

Thank you,

Gonzalo. And I will pass it over to our Deputy City Manager, Jennifer Jan Magumma, who will introduce the item. And we also have economic development manager, Amanda Anthony, who will give us the presentation. Thank you both.

Thank you, mayor, and thanks for having me up again. Two times in one night. It's a pleasure. So tonight, we are bringing forward a study session on street vending to help frame the current landscape and support council discussion as staff continues this work. As you'll hear this evening, there are two types of vending, motorized and non motorized, each governed by different sections of state law and providing different levels of local authority.

So I just wanted to call out to help orient you throughout the presentation, we have come up with two icons. So as Amanda goes through the presentation, when you see an icon in the subject line that looks like a food truck, we're talking about motorized. And when you see an icon that looks like a push cart, we're talking about non motorized. So these icons maybe can help you remember where we're at throughout the presentation. It is different for each of them, and so just visual cue there. So, again, as mayor mentioned, we are not seeking council action tonight. Our goal is just to clarify what is currently allowed, identify where there are policy gaps and opportunities, and then better understand where the Council would like us to focus as we move forward. So I'm going

to turn it over to Amanda Anthony, our economic development manager. Thank you. Hello. Amanda Anthony, economic development manager. I am a little bit under the weather, so if I have to stop and cough, I really apologize. I will try not to, but I have lemon water. We also have a number of business owners in the audience who I think are here to make public comment. So I just I know that we'll get to that after the presentation and that you guys have received a lot of public comments on this item. And so hopefully that can this will put this all in context. So I'll start with our there we go.

I want me to type on the slide. Our guiding principles, I'm going to provide an overview of existing sidewalk and street vending regulations. I'm going to clarify what's allowed, where and under what authority. I'm going to identify policy gaps and enforcement challenges and receive counsel and public feedback on potential next steps. I do have two colleagues from San Mateo County Environmental Health online.

Thank you so much to Deputy Director Weymond Wong and Head of our Food Program, Bogarte Marquez, for joining us. So if you do have any sort of questions about SMC Health stuff, they are online. As we go through this, you'll see that there are some restrictions we have from state law, but there are a lot of things that we can do. Think about policy direction within the limits of state law. Are there any regulatory approaches that City Council would like to prioritize, modify or exclude in future ordinance development?

How do you want to approach enforcement for vendors operating without permits? And then other considerations, things that you've been seeing, observing, thinking about that you want to make sure that we address, for example, fats, oil and grease. Our guiding principles are these: We really do want to we have to align with state and county laws and regulations. We want to respond to concerns from our community and from our business community and identify ways to support our mobile and sidewalk vendors in meeting the regulatory requirements. So as Jennifer was saying, there are two types of vending, and this is sort of an awkward phrasing.

But when we think about mobile vending, mobile vending is sort of like all things that move, right? And so that's why we've split it into sort of motorized vending. Motorized vending is food trucks, it's food trailers, ice cream trucks, like driving trucks and service vans. These are vehicles that are on the street. And then we have non motorized vendors.

These are our sidewalk vendors, what you think of a sidewalk. These are hand carts, wagons, push carts, stands. And you can think of them as people powered. So if people are pushing things around or standing things up, that's what we're calling non motorized or sidewalk vending. This is primarily it's important to note that motorized vending is on public streets, like either driven by or pulled by a truck, and non motorized is on sidewalks, plazas and parks.

And like I said, not powered by a motor, but by a person. This is like hot dog carts, fruit stands, flower sellers. I'll go into motorized vendors first. Motorized vendors are allowed on public streets under the California Vehicle Code. And the food vendors need permits from San Mateo County Health that verify their compliance with the California Retail Food Code.

So the Retail Food Code tells you how you can prepare food, how you need to set up your kitchen. Every restaurant and every food vendor in Redwood City and beyond in California needs to be meeting these requirements. It's ensuring food safety. The city can establish permitting, time, place and manner regulations really with a focus on public safety. So making sure that our roads are safe, our sidewalks are safe, and that people can get around.

Our current city ordinance is almost forty years old and it does have to be aligned updated to align with state law because our current mobile vending ordinance lumps both motorized and non motorized vending altogether. And so this is something that we have to do to update and address that. Just to give a kind of overview of the different types of things that can fall under motorized vending. It's a lot of food. I think that's what most people think of when they think of motorized vending is food trucks.

It's the ice cream truck, it's food trailers. And this is regulated by San Mateo County Health and our RCPD. Our Redwood City Police Department gives out a mobile vending permit. In order to get your food truck permit and become a licensed food truck operator, you have to get a seller's permit from the State of California. You have to have a mobile food facility permit from San Mateo County Health, a mobile vendor permit from Redwood City Police Department, and a business license from our finance department.

If you're selling goods that are not food, for example, when I worked at Renaissance Entrepreneurship Center, there was a flower truck and she drove around and sold flowers or a clothing boutique truck. This is only regulated by Redwood City Police Department. They issue a mobile vending permit. You do have to get a seller's permit because you're selling something that has sales tax and then a business license. And then finally you've got a sort of non food and service.

And so you've probably seen a proliferation of our pet grooming vans or auto detailing vans. Right now we don't really have any regulations around those. You don't have to get a mobile vending permit, but you do need a business license and so that's something we do require. As I said, the mobile vending permit applies to food and to goods. So it's the sale of actual products but not services.

And when you apply for this, even though obviously they are mobile vehicles, the permit can be denied. We do ask where you're going to be vending. If it's unsafe or if it's improperly zoned, then we can deny it. If they don't have the required county health permits, if the operation would disrupt nearby residents that That doesn't have a great definition in the code, so that's something to be thinking about. Or the vehicle is not mobile, right? You can't actually move it. It has flat tire. It's sitting there. That's not something that we would permit. And right now our code doesn't have any sort of administrative citations explicitly.

If you are in violation you can get an infraction, which is a criminal citation for operating without a permit or violating operating standards. That's So another reason that we are really looking to update this code. Locations are subject to traffic safety, pedestrian and ADA, and temporary use. So this is not meant to be the permanent home of a business on the public street. And so that's, I think, really important to keep in mind.

And our enforcement is looking at permitted vendors who are violating operating standards, which we don't have a ton of operating standards right now, and unpermitted vendors, vendors who don't have their health permits or their Redwood City permits. Our biggest operating standard besides the location, traffic safety considerations and ADA is our hours of operation. So motorized food vendors in our code are only allowed to operate from six a. M. Till ten p.

M. This enforcement challenges are many. When we receive complaints about motorized vendors, our Redwood City law enforcement and code enforcement work primarily to get the unpermitted vendor to get their permit. We have really stopped short of issuing infractions because we don't we just have. We don't have any administrative fine levels outlined in the ordinance or resolution, which means that we're also not issuing administrative citations.

And you might be thinking to yourself right now, well why is Redwood City responsible for this? Why isn't San Mateo County Health responsible for enforcing on unpermitted vendors? And that's because the county really has administrative authority and really the power of permitting. So if a business is permitting is permitted and they're not maintaining food safety standards, we get a complaint. They can go out and investigate that and revoke their permit.

But otherwise, enforcing aspects of the permit and local operating standards falls to Redwood City, and so unpermitted vending falls to Redwood City for enforcement. Secondly, both Redwood City and San Mateo County Health operate on complaint based enforcement, and so response is dependent on staffing and prioritization. And just a few other things on this. Our current penalties are limited in addressing repeat violations. We have permit revocation for those who have permits and then criminal infractions which we haven't used.

The criminal infraction penalties do increase over each violation. So again the takeaway here is that we have some outdated regulations that we have to update to align with state laws and some that we get to update. So as we go I'll come back to this slide and so you can put it aside or you can keep it. As we're thinking about this, these are some of the key changes and considerations that I want you to think about with regards to motorized vending, okay, the food trucks. We cannot ban food trucks from operating on public streets, but we are able to enact time, place and manner regulations that protect public safety, health and welfare.

So like I said, we'll come back to these. So now we move to sidewalk vending. I think this has been a little bit more distressing for many of our folks because it has proliferated a lot in the last few years. So sidewalk vending and what we're calling non motorized vending includes wagons and push carts and similar non motorized devices. Again these are people powered.

They're not considered vehicles under the California Vehicle Code. Our current code is outdated and does not reflect changes in state law. And the penalties are actually also defined primarily by the state law without much local authority. So that's something really important. We do retain authority over certain time, place and manner restrictions.

The most important thing that I want you guys to take away from this is that recent state law has significantly changed to decriminalize sidewalk vending. So many codes, including parts of ours, say that if there's a violation it's a criminal violation or it's a misdemeanor. Ours is not a misdemeanor, sort of. But the law has changed at the state to say that this is no longer a crime, this is an administrative penalty. But we can set objective time, place and manner standards that address real, defensible health and safety concerns.

Just like I did for food from motorized vendors, I just want to talk a little bit about the non motorized vendors. Again, we have three different buckets. We have roaming food vendors. These are vendors who move to sell their food. You can imagine things like ice cream or hot dogs.

These are regulated by San Mateo County Health and the Redwood City Police Department. Like our motorized vendors, they have to get a seller's permit. They are selling something that requires them to remit sales tax and that's what a seller's permit does. San Mateo County Health issues what is called a compact mobile food operation permit. This is a new permit from about five years ago that reflected changes that came along with the state law changes.

Redwood City Police Department issues a peddler permit and then you still have to get a business license. We also have stationary food vendors. By and large these are selling prepackaged food at a stand. It can also be it's mostly prepackaged food, okay? In this case you may need to get a compact mobile food operation permit San Mateo County Health would work with you on that.

You still would get a peddler permit from Redwood City Police Department, and you have to get a seller's permit because again it's a sales tax bearing item. And then non food, so like there's like jewelry and flowers. I'll hit this a number of times, but again one of the biggest issues is enforcing on vendors. San Mateo County Health has limited authority if a vendor doesn't have a health permit. Mostly it falls to Redwood City.

So as I wanted to mention, our peddler permit right now requires applicants to get a live scan, and that's no longer allowed under state law. And so we definitely need to adjust our permitting regulations to address that. And there are not a lot of other regulations around operating standards. We can ask vendors to accommodate pedestrian access, but there's not going to be a penalty if they don't really. And they are supposed to wear their ID badge to identify them as permitted.

I think it's really interesting this code was adopted really to address sort of door to door sales, if you can imagine. It was really it was adopted in like 1971. And so it was like an encyclopedia and vacuum cleaner salesman. And so it was from 9AM to 6PM. And if you made an appointment, then you could go there after 6PM.

But otherwise, you were not allowed to go and knock on somebody's door to sell them a vacuum cleaner after 6PM. And so this is also a fairly outdated regulation because it's not we can't have regulations for these vendors that are more restrictive than for other types of similar businesses. Right? If we say that something can be open twenty four hours nearby, this can be open twenty four hours nearby too, and we can only enforce it in the interest of public safety. So again, very similar enforcement challenges.

State sidewalk vending law does restrict us quite a bit more. State sidewalk vending law says, kind of says what we can prohibit. We can't prohibit vending. We can say only these kinds of things can be required for a permit, what kind of penalties can be levied. Our city's admin fines for peddlers right now are also not in compliance with state law, so this is also something we'll have to update when we bring back a potential ordinance.

And it's also important to remember that we can only enforce on the laws that we have, and so those laws have to directly address health, safety, and welfare concerns. I'll come back to that a lot. And so these are the key questions for non motorized vending. Again we'll keep this kind of slide to the side. We'll come back to these questions.

I do want to talk about two other things that are really critical, and I think you've received several pictures in your mailboxes and you'll probably hear about some of these tonight from our public commenters. A lot of the complaints that we get are about unpermitted food vendors, and I talked a little bit about what you have to do to get permitted as a food vendor. A vendor selling food needs a permit from San Mateo County Health. And there are some permits, some setups that are out there right now that are not permitted by the health department, and they cannot get permitted by the health department. And I show one example here, and I just tried to zoom in on, like the worst part, which is the open flame under a tent with unsecured propane tanks and no water and no toilet, and those are the kinds of things that San Mateo County Health won't permit.

This is something that could get permitted as part of a special event like our Lunar New Year night market. We, the city guaranteed a lot of things to make that happen, including you had to be checked for running water, you had to be checked for hot water, you had to have toilets within a 100 feet of the booth, etc. So this is really an important distinction. SMC will not permit this for regular operations, and yet they also have limited authority to enforce on these unpermitted vendors. They will come out with us and help explain, but they're not going to be signing or fining.

So the main option available to us for this is education and enforcement. This is another example where folks are preparing food at home and keeping it in a cooler. Again, this, as it is being sold, cannot get permitted, but there are ways to legally sell food made at home through microenterprise home kitchen operations and cottage food operations. So it's not unequivocally impossible, but this setup is impossible. And so again, our city regulations have to focus on enforcement, not permitting.

We haven't done a ton of outreach to vendors at this point. We did do some in July to understand kind of what the landscape was. After getting direction tonight we will do more educational outreach and talk with them about some of the things that you guys are considering before we bring back any sort of ordinance to consider. We also want to identify funding for after hours bilingual support with educational outreach to vendors. My Spanish is not great and I'm already working a lot, and so I really I'm looking forward to having support in redoing the outreach to our vendors.

We also, if we come back with an ordinance, may need to think about enforcement and having funding for enforcement. Right now a lot of these things are happening after six p. M. And so our code enforcement is not there and I think we're all aware of what it looks like in the evenings for PD. It's busy and so what does that look like if we want to come back?

That's kind of down the line. So we're hoping to come back in early summer with a draft ordinance for your consideration and tonight I really want to gather input from you on some of the parameters that you want to have in the code. Everything that you suggest tonight will be considered by me and our city attorneys to make sure that it is defensible and meets the parameters of state law. But I just I'm looking forward to getting your feedback. I did put some example regulations in.

These are some things that other cities have looked at that you may want to consider as well. This is for motorized mobile vending. You can keep this together with a question slide from earlier. We have non motorized mobile vending. This is the sidewalk vending again where you might want to think about. And so I really look forward to hearing more. I've got my pen ready to hear some more feedback on these questions and more. And happy to answer any questions.

Thank you, Amanda, for the great presentation. Before we bring it back to council, we'll open it up for any public comment.

Thank you, mayor. At this time, I have two speaker cards. So if you are in the audience and wish to speak on this item and have not given a speaker card, please do so at this time. And that includes our folks on Zoom. If you do wish to give public comment this evening, go ahead and raise your hand.

Thank you. At this time, I will ask our interpreter, Gonzalo, again, if you could please make the announcement on how to check out a listening device for Spanish interpretation this evening. And I do want to let the audience know that interpretation will also be offered if public comment is to be given in Spanish. Thank you. You so much, Gonzalo.

We will begin with our in person speakers. We have three, four cards. And we have one speaker on Zoom. That's Timothy Russell. And I'll be closing the speakers list once we begin public comment. Thank you. Our first speaker will be Fergal Oboil, who will be followed by Dylan Finch.

Good evening. Thank you for giving me the time here to speak. My concern is more neighborhood related and food truck related. Born and raised in Redwood City, Stafford Park was my hometown community park. I moved back, and I live right across the street from it now. And what I've noticed recently is a kind of a creep that's happened. Love Music in the Park, so it's not about Music in the Park. But what has happened is Music in the Park started with a small tent by the council to help support youth organizations. One food truck, what I've noticed the last couple of years, two food trucks, three food trucks. Last year, there was as many as eight or nine food trucks.

They pretty much take up all the parking on Hopkins and majority of the parking on Lowell. I sent a video in that shows you the noise level, huge noise level. I can I have to leave to go two blocks away to actually hear the music because the noise is so loud from the generators? Safety concerns with this as well. What has happened, it's not just eight days a week anymore. We now have somebody who parks at the park five days a week, usually gets there around 10:30, eleven in the morning, and will stay till dark. There's a sight line issue. They park on Hopkins. It's a huge truck. As we all know, food trucks aren't small.

They're medium sized RVs. Coming off of Lowell or King, many drivers aren't paying attention to the flashing white lights. I've seen several small children almost get hit by these cars because this food truck is blocking sidelines. We've also seen several cars try to pull out on Lowell And Hopkins, which has caused the same issue, very close near accidents that have happened. They're putting a generator on the street.

The generator is emitting gas and fumes all day long and while also opening up onto the sidewalk where if there's a line could obstruct the sidewalk to people passing by. My issue is similar to what happened with music in the park where you have you start off as a great idea, who doing it. Doing lot of cream. They come in, they blast their music for two minutes, turn it down and move on. These people are sitting there all day and creating a business from it.

If you can allow one, the next thing you know, we could have eight, nine, ten, twelve every single day at a community neighborhood park. With that, I think my time is up. So thank you very much.

Thank you, Mr. Obwell. Our next speaker is Dylan Finch, who will be followed by Edwin R. G.

Hello council. My name is Dylan Finch. I'm on the Planning Commission but I'm just speaking for myself today. I went to this is very interesting because I have a different perspective on the issue I feel like living in downtown which is much more of

a commercial

district. I went to Santa Cruz a while ago for a trip and they had a lot of sidewalk vendors there. It seemed like they gave them like designated spots on the sidewalk. I saw like numbers painted on the sidewalk. But there were a lot of vendors there, they were selling a lot of different things.

I felt like it really made the atmosphere of the downtown a lot more vibrant seeing all those different sellers there. Just added like some vibrancy and some dynamism there. I also think that the sidewalk vending opportunities are really great for small businesses and very small like local businesses because you don't have to pay the rent for a storefront, very low like startup costs. So I think there's some good things about it. And again I'm mainly talking about this mainly non motorized, non food vendors in downtown that's kind of what I'm thinking about.

But I actually think it'd be nice to encourage more of that in the downtown just so we could increase the variety of retail that we have there and again give those opportunities to those very small, very local businesses to sell their wares there. And it might be nice to have those designated spots or maybe designating an area of downtown maybe around the public plazas or parks that we have. It seems like state law kind of ties your hands a little bit unfortunately but yeah that'd be nice. And that's it. Thank you.

Our next speaker is Edwin R. G, who will be followed by Anthony Persons.

All right. Good evening, everyone, and council members. And yes, we are indeed living in interesting times, especially regarding financials and permits. Essentially, permits are the talk of the night. I do want to emphasize I'm actually happy for all the entrepreneurs who do provide great products in Railroad City. It showcases smarter goals that Railroad City has been emphasizing for economic mobility. We're experiencing that great economic mobility shift that we have been working so hard for, and it's growing at a rate that we wish to continue. But what does continuing trend lead to? More permits, right? So it's definitely talking tonight.

I'm not leading to either strict or loose regulations. I'm here to provide another perspective. We're not too different. I own the cafe, and I pay my fair shares of taxes. And it may be with a forced smile, but I know for a fact that it returns back to the community for core services like modernization and of course economic development in River City.

And in River City, and especially for me, we love the little friendly competition. But who are we competing against? I can tell you from a restaurant perspective, we're actually competing a bit more than other restaurants, other food businesses. I can tell you it's the business price inflated materials and maintenance, repairs, rents, utilities, employees, insurance, which by the way has been doubled compared to the previous years, which is none of fault, just throwing it out there, but these costs continue to rise, especially for a storefront like myself. And yet, we continue to provide that Redwood City smile to everybody.

But that does lead into the question, has previous regulations favored specific group of people that have a little bit more money, a little dough? Do the previous regulation prevent any mobility besides those who have that money? Did the city mask that favoritism behind the term public safety? We're making great progress, but we finally develop perspective that we have opened our eyes to different ignorances in society.

Thank you, Edwin. Our next speaker is Anthony Persons, who will be followed by Olivia Bracamontes.

Excuse me. Good evening, everyone. Thanks for your time. I live where that picture was taken. So I can speak on we have a problem.

If we wanna support small businesses, can we please move them out of the residential areas, and please not have them like on the side of my house, where they use the bathroom, and they litter, and all this other stuff. I'm all about people getting their hustle on and making money, but with some freaking tact and some respect for everybody who lives there. So since I live off Hudson and Redwood City, why don't we move all the people who can set up in residential areas and put them by the school? Instead of because I don't feel comfortable. It's a fire hazard, there's an open flame, they block my driveway, they're late, the out the quiet hours aren't even enforced, they're there till midnight half the time selling their wares.

And that's fine. Sell your wares. But have some respect, and don't take it out on the people that work just as hard as people with trucks, if not harder, to own a house and to finally find the American dream. So all I'm asking is, can we please move this around away from outside of my house where there's fire hazards? You saw the picture. That is my house. They're defecating. They're urinating. They're leaving all kind of plates and stuff all over my house. It's a pain. So please, I'm just here to advocate. Move them somewhere else. They're just not in residential areas. Please don't. That's all I ask. Pretty pleased with sugar on top. I'm done.

Thank you, Anthony. Our final in person speaker is Olivia Bracamontes. Welcome. Thank you. And at this time, I'll ask our interpreter to give the translation of the public comment.

Good night. My name is Olivia, and my husband and I have a business, Las Chiquitas in Redwood City. And the problem is what they were saying before that there are a lot of street vendors, a lot of them without permit, especially with me in that corner because we are at Broadway And Maple. And there is a club right there. And Thursday, Friday, Saturday, Sunday, they have events and things like that.

And there are a lot just like the picture, a lot of people outside, vendors, they start from 6PM, and we're open all the way outside. I have a lot of pictures that I can show, and they sell tacos. Same thing. At our Mexican restaurant, we do sell tacos as well, but we have other dishes and a variety of dishes. But there all those days, Thursday, Friday, Saturday, Sunday, they have the same.

They they're selling all the way to eleven or midnight. And many times when we go the next day to open our business, there's a lot of trash. They throw oil, fat everywhere. I have two planters for decoration. They they throw them. They kick them. And that's what's what I'm asking. I don't know how can you help me in that regard. We are doing whatever it takes for to pay our permits, the requirements of insurance. And like the other person mentioned, prices are rising, and we cannot compete with those people.

We don't know even how to you know, the health department requires refrigerators, freezers, and for us to have the adequate cooling, and we have to have different, ways to wash our hands every time we touch food and to have our permits current. And we require all those things. So that's the way in which I hope that you can help us somehow. Thank you very much.

Thank you, Gonzalo. We'll now turn to our Zoom speakers. And Timothy Russell, welcome. You can unmute and begin your comments.

City council members, the mayor, vice mayor, and the members of the council. I'm Timothy Russell, regional director for Renaissance Entrepreneurship Center and longtime contractor and partner, Redwood City, on small business development, working within the economic development division, of your funding. And, you know, I think that this is not only an awesome opportunity for small businesses that are in need to, make a living for themselves and, have a sustainable living for themselves. I think this is an awesome program or opportunity for them. However, I do understand that in order for these individuals to really be legal and sustainable, they have to have the not only the technical assistance, not only the training, but the understanding of how to be legal sustainable.

And organizations like Renaissance and others would love to be a part of this process. I'm familiar with some of your staff and one that spoke in general, Amanda Anthony. And she knows the importance of the training, how they need to be trained to be legal and sustainable and have that ongoing support. And then there's programs that we have that could align with this opportunity so that these small businesses and these entrepreneurs can get the necessary training and support to be successful and understand their neighbors, understand the importance of this isn't just your yard, it's everyone's yard, and how can we make sure that we're doing the right thing. So we're available.

Just wanted to say that and wanted to chime in and look forward to hearing more about this opportunity. Thank you.

Thank you, Timothy. And that concludes public comment, mayor.

Thank you, city clerk. And thank you to all of our community members who joined us tonight and and start around so that we could get to this item. So thank you for your patience. With that, I will bring it back to my council colleagues for any questions, any feedback. Thank you, council member G.

Ouch. My arm hurts, mayor. We'll get us going. Amanda, thank you for the conversation and the discussion. I know this is a study session, so just providing feedback.

I think I'll approach this kind of in a macro bucket and then, I guess, motorized and non motorized. So number one, I mean, not touching our ordinance for forty years is probably not the right answer. I think state law has changed a little bit over this forty years, and so number one we need to update to comply with state or county law. I mean that's that's sort of a given from both both categories. With regard to the motorized, this sort of again the macro bucket, while we are supportive of entrepreneurship, the entrepreneurs still need a permit.

I mean, it be a health permit or a business license, they need to operate just like any other business in Redwood City. And and so that's still the macro bucket. Number one, update, and they need to have a health permit, and they need to have a business license. When we look at our neighborhoods, and we had several speakers talk about neighborhoods, I think it's really important that we engage our neighborhood associations, and that we get input from our neighborhoods about what is tolerable or acceptable and what isn't, and the shape and updated ordinance around input from our neighborhood associations. What we heard this evening about, you know, not being a high neighbor in the residential neighbors is not acceptable.

Leaving trash, leaving you know, we talked earlier about fog, fats, oils, grease in somebody's planter, using somebody's bushes as their restroom, and they're just not not acceptable. And so those are things that need to be shaped in an ordinance. And when I saw your presentation about hours, we don't even align the hours because we haven't touched it for forty years with our noise ordinance. And so that's sort of the baseline. We don't let contractors start at AM.

Why do we let a food vendor start at 6AM? We need to start with number one aligning our ordinances across the city like do with contractors and then based on what the neighborhoods if we do allow them in neighborhoods, what's acceptable in our neighborhoods. I'm not I'm not even supposed pretending they're going to be acceptable, but I think having the neighborhood associations weigh in on that is important. And every part of the city is different. You know, as council member Circum said earlier or as Dylan said earlier, downtown is different than other parts of the residential parts of River City.

So maybe there needs to be some flexibility in that, know. I I would think the downtown district would have a higher tolerance for different hours versus the residential neighborhood. When we talk about the non motorized, I think it's the same thing. They need to be have to have a permit. They need to have a health permit.

They need to have a business license. The problem I have though is as someone who hosts events downtown, and I'm gonna walk into this one I know because our city attorney knows, When you're hosting as a nonprofit, you mentioned the lunar night market or we can talk about Dia de los Muertos or Lunar New Year. That nonprofit and you had others listed in the staff report. Number one, they have to pay for a permit. Number two, they've got to provide insurance.

And so I'm not too interested in the individuals that bring the push carts with the hot dogs and other things. I'm more interested in the master operator who brings all the push carts in their vans and drops them off and then has people independent contractors, I'll use the polite term sell goods because they're not paying for the permit and they're not paying for the insurance. And and it's hard enough right now and we talk about the economic climate earlier as a nonprofit trying to get sponsorships for the events by having competition as many speakers talked about this evening. It's hard already to get sponsorships. If we, you know, sponsors have stopped sponsoring events because of those non motorized operators, it makes it really difficult to continue to host events in Redwood City downtown when it's even harder to get sponsorships and people are leaving or not willing to write a check because we allow others who aren't participating paying their fair share to participate.

Whether that means we have to designate a special area for them or whatever, but we need to do something because it's just not acceptable to look to our nonprofits to do something on these festivals and let others who aren't paying their fair share participate. So we've got to figure that one out within the legal realms that we can. And I think there is a way to do it, but we need to update our policies accordingly. Did I make sense, City Attorney?

You did. Thank you so much. I did want to mention for the rest of the council, I know Councilmember Gee, we've spoken about this, that the state law does allow for prohibitions of sidewalk vending in the immediate vicinity of special event areas. And so that is definitely something that city staff is looking at and that we'd be happy to entertain depending on what we hear from the rest of the council. Thank you.

And thank you for that update. The other part you know about health and welfare. I mean they you know, vendors can't block sidewalks. They can't inhibit ADA access. I mean, there's just a number of basic health and welfare things that all of us, whatever our businesses, we can't do. And so everybody needs to play by the same rules. And so I think those are kind of the updates. And again, we shouldn't be updating ordinances every forty years. It should be a little bit more frequent than that. Thank you, mayor, for letting me get things started.

Thank you, council member. Council member Chu, I see you reaching again. We'll go to you.

Alright. So thank you. I'm this is a tough one. So I just wondered if you could let me know. So if you think about a brick and mortar restaurant, a food truck, and a push cart, for those three business types, what is the total? You listed all the different licenses and permits and everything they need. Can you give me a sense of how much for a brick and mortar, how much

for a truck, and how much

for a food cart would the total be per year?

I do have SMC Health staff on here because there's different levels for the different types of vehicles. Bogart or Wehman?

Yeah, I can chime in and speak to that. And I hope you all can hear me okay.

We can.

So if we're talking about, for example, a prepackaged food truck, which would be the most basic, just a produce or ice cream truck, that might be $489 for an annual permit. K. If we're talking about a larger food truck that does, for example, tacos, larger risk category, that would be $1,804 for an annual permit. And now if we are talking about a brick and mortar, that will take me one second to pull up. Sorry. The very largest restaurants would be just under $3,000 for an annual permit.

Great. And then how much for a cart?

For a prepackaged cart, which would be the most simple, would be something like $439 a year.

K.

Yes.

Great. And then, you know, if you bundle that with the business license tax and everything else, do we have a sense of how much that adds over and above these costs?

So our business license tax is a $90 base on a for a registration fee plus I'm so sorry.

No worries.

And this year, we've got a discounted rate. So it's $5 per employee. Next year, it will be $10 per employee for the first 10 employees, and then it kind of goes up from there. We don't have a special permit for allowing restaurants to operate, but they do typically have to do building permits. And those are expensive because it's based on what you're doing and how much square footage you're doing. Thank you. That was so good the first round. Yeah. You're doing The carts and the peddler permits, so this is the non motorized. Thank you so much.

The non motorized vendors, our peddler permit costs $33 a year.

Okay.

And our food our mobile vendor permit costs $2.00 $5 a year. So Wow, should have put that down before

I started coughing.

Okay. Should be good now. So all told, it obviously depends quite a bit on what you're doing, but it sounds like a cart would be approximately $5,055,600 a year. A food truck would be around Burhat, you said the food truck, like mobile food facility permit is around 1,000?

A mobile food facility permit is just under 2,000.

Just under 2,000. Okay. So then we would be looking at around 2,200 probably because you probably have three employees. And then a restaurant would be just under 3,000 plus the building permit and any sort of other work. If you had a lot of employees, the biggest health permit is for a 51 person employee or 51 seating, is it 51 seats?

51 plus seating, risk category three, yes.

Okay. So I mean, you can imagine that probably be fifteen, twenty employees at a time.

Right. So thank you so much. That's really helpful. So and again, I don't run any of these kinds of businesses. None of these sound particularly onerous.

You know, as the gentleman shared, I think the key drivers of costs are you know, land, you know, the the building, the rent, staff, you know, labor, and and materials. That's really the key drivers of of the cost of operating a business. And so, you know, I do note that as a percent of the likely revenue of any of these kinds of businesses, this how can I say it? The fees do seem to be higher for carts versus trucks versus a brick and mortar, but but I do understand brick and mortars carry a lot of these other costs like, you know, they pay property tax and they have much higher overhead costs. So so I do think it it kind of balances out.

Yeah. I I think council member g made a really good point. And then I think the thing I've I've heard a lot of people express is, you know, what I would call the the the free rider problem that you always have a problem where, you know, if there's sort of an interstitial space where people can operate without permitting, without, you know, sort of oversight, they're they're you know, it's easy and and there's a tendency to wanna do that. So I do agree that, you know, especially in the case where you have like nonprofits and things like that doing events that, you know, everyone should have to have a permit or we could have, you know, Off Broadway and the carts could be at, you know, at some location further away from the event or, you know, a certain perimeter from the event. So so that's one thing.

I mean, to me, the the fees do seem reasonable. But again, I I don't have this kind of business. I would really love to understand, you know, what does what are the what do people find onerous? Is it the permitting? Is it the is it just the overhead overhead of of land labor and and materials? And and there's very little what we can do to make it easier. So I think better understanding, like, kind of what are the barriers to the our restaurants succeeding. I want all of us, you know, all of the restaurants to succeed. I want the brick and mortar to succeed. I want every cart to succeed, and I want every truck to succeed.

And so what is a way that we can make sure we provide an environment where each of those types of businesses can do well? I mean, to the extent we can. We don't have control over everything. I do think the issue of of being bad neighbors, it it is somewhat I mean, obviously, if somebody's pouring grease into your plant or leaving trash or not cleaning up after, that's that's an issue that we need to address. But I do know that, you know, for example, the the president of the neighbor the chair of the neighborhood association in my neighborhood implored us, please make sure that the food trucks can stay.

Please make sure that when you plan, you know, the new Broadway corridor that you provide places for the food trucks. And so I think each neighborhood is very different. I know in my community, it's a very big part of our our vibe. Know, it's a lot of what makes our our neighborhood wonderful, and they're very popular. And so there are sort of differing views on this.

Think even in in the situation if food trucks are doing well, that's kind of a revealed preference. I mean there's a really powerful mechanism to shut down these businesses if they're not popular and and that's if they don't get business. So you know, if if the food trucks are doing well, that that is kind of a revealed preference that some people want them there. So the question is how do we accommodate that without, you know, driving the neighbors crazy? I'm probably not I'm just kind of these are the the conflicting goals that I'm, you know, trying to figure out how do we make everyone happy.

I don't know that we can do that, but how could we kind of balance these competing interests and needs. Something I've been thinking a lot about you know you said we can regulate when where you know time time manner and place I think it was. One thing I'd love to see us think about is parking lots or designated areas where, you know, nominal fees, really encouraged. There's a thrown bathroom. You have everything you need.

You know, prosper. So maybe something like that. I think something else I'm really interested in. I know, you know, I walk downtown quite often, and on my way, there are several vendors that do block the sidewalk. And, you know, I can go around.

But I keep thinking, you know, we have 6 and a half billion dollars worth of parking in the city. And I would love to be able for these vendors to be able to kind of move into available parking spots. I I know that there's clear laws. But, you know, if we had little platforms or tables or things like that, if somehow we could leverage that space as well. If if there's a way to do that, that might help with the ADA compliance because, you know, little business is usually about the size of a parking spot.

I I think I do wanna make sure that whatever boundaries we set really are providing a pathway to success. Know, and I realize the ethos has been, you know, try to help people get compliant. Try to help educate. You know, don't be punitive. But I'd really love to see these little carts become little storefronts, you know, and have this kind of smooth on ramp to prosperity, really.

So I'll leave it there. I don't have brilliant ideas on how to do that, but very supportive. Oh, sorry. One more thing, the hours. Yes. Absolutely. I don't think we need vacuum cleaner salesman hours. And I agree that it probably should correspond with the noise ordinance. That makes, I think, a lot of sense to me.

I just want to say one thing that Patrick would be upset with me if I didn't mention is that our regulations can cover the city right of way. So if it's a city parking lot, we could probably think about something. But private parking lots would be under our temporary use permit ordinance. It would be a zoning thing. So this is really about city right of way. Just want to make sure that's clear.

And I would imagine a parking a private parking lot could say, okay, it's vendor night, and they that's something they could already do, right?