City Council - Regular Meeting

Recording in progress

Good evening, everyone. Welcome to the regular meeting of the San Rafael City Council. Today is Monday, May 18th. I could ask the city clerk to call the roll.

Council Member Bushey is absent. Council Member Hill.

Present.

Vice Mayor Kurtz. Present. Council Member Yadon-Zagladi. Present. Mayor Kate.

present so good evening everyone and welcome thank you for joining us tonight whether you're here in the council chambers or watching online we appreciate your participation and engagement in our community before we begin we always like to thank our city staff the work that goes into preparing for these meetings delivering city services and responding every day to the needs of our community is significant and often happens behind the scenes so to all of our staff across every department thank you for your ongoing dedication and continued service to San Rafael. As we head into the summer season, which we are, definitely feels like that today, I want to recognize all the students in our community who are finishing the school year or graduating in the coming weeks. We know this time of year is filled with celebration and a lot of proud families. So congratulations to all of our graduates. Summer is also one of the most vibrant times in San Rafael with so much happening downtown and throughout our community. We have monthly downtown farmers markets. We have an upcoming Marin County Fair and many other local events. We hope to see you all out there enjoying all that San Rafael has to offer. Before we move into our meeting agenda, we also include a land acknowledgement, as this statement complements the ongoing collaboration work we do with the tribe. We thank the original caretakers of this land. San Rafael is traditionally home to the Coast Miwok people, many of whom today are tribal citizens of the Federated Indians of Great and Rancheria, and we honor their continuing involvement in stewardship practices that benefit us all. Thank you for being here. I'll now turn it over to our city clerk to share how the public can participate this evening.

Thank you, Mayor Kate. Tonight's meeting is being recorded and streamed live to YouTube. For members of the public wishing to provide public comment, displayed on the podium and the projector is a timer to help you stay within your two-minute time frame. You're invited, though not required, to introduce yourself and say what part of Centerfell you live in or if you're from outside of the area. Viewers may request a reasonable accommodation to provide public comments virtually. For more information about that or if you're experiencing any technical difficulties, you can email me at city.clerk at cityofcenterfell.org. Thank you.

Thank you. We start with open time for public expressions for 10 minutes. I have two cards, and you are welcome to come on up. So if Neymar Rodas would like to come and speak. And you're welcome, but not required to say what part of San Rafael you live in. Welcome. And then after Neymar is Jake Azenon. Thank you. Yeah, go ahead.

Members of the Santa Fe City Council, my name is Neymar Rodas. I am 12 years old, and I currently attend Davidson Middle School, and I reside in the Canal neighborhood. I am proud to be part of this youth advocacy program at Alcala Justice, located in the Canal neighborhood. In this amazing program, I receive public speaking skills, leadership, and advocacy training, in addition to a healthy lifestyle, such as organic gardening and watering plants with our community members. As youth representatives, we actively engage in on-site community events to work with our community members. It is an honor to stand here before you showcase the skills and dedication for the young people of Santa Fe. Today, I am delighted to introduce my fellow youth advocate, Jake, who will share an important proposal with you.

Thank you. Welcome. Go ahead. Do you want to do this mic over here? It might be easier. Whatever's easiest.

Good evening cities Council members of center fell, my name is Jake as an on and outside result currently at Davidson middle school and I live in the canal and for the past 4 years a car just has been helping me on for community community awareness leadership role and decision making skills. I'm asking if you would consider to have monthly or quarterly a developing platform and can allow San Rafael youth the opportunity to voice concerns and present solutions. Thank you.

Thank you for your comments. You both did an excellent job with public speaking and we look forward to following up and continuing to meet with you. Anyone else have public comment?

I'm Noah Bugbee. I live in San Rafael. I'm sure many of you know recently there was a, in January, there was a terrible flood in the Canal District with millions of dollars in property damage. It was so bad that even the hospital couldn't be reached. I mean, if someone were seriously injured, they wouldn't be able to get the help they need. We've researched three solutions ranging from $500 million to $2 billion. So whichever one we choose, the cost will be astronomical. But it has to happen. We can make this easier on ourselves by applying to things like SB 272, but this has a 2034 deadline. On top of this, sea level will only continue to rise. So we want to choose the best option, but we're also on the clock. So I'm asking if we can get a public report discussing the progress being made to choose a long-term solution. Thank you.

Thank you, and we do have a new technical study that is on the website that talks about it, and we also have a subcommittee meeting that the public is welcome to attend as well. Thank you for your comments. Any other public comment right now? Okay, I don't see any public comments, so we'll move on to city manager and council member reports. I'll turn it over to city manager Navazio.

Thank You madam mayor just a couple of items to report I'll start we do have an item on the consent calendar this evening but just acknowledging that this is National Public Works week and cities proud to join communities across the country in celebrating Public Works Week. This year's theme is Rooted in Service, powered by community, and we really appreciate all the work of our Public Works Department and staff, and we will continue to, these are the folks that, are very visible, but also do a lot of work that is actually not visible to the community on a daily basis, critically important to maintaining our infrastructure and our operations. Also, all month long, the Transportation Authority of Marin This is May in Motion Challenge Month, where they, among other agencies, are all encouraging our commuters and residents to embrace active and sustainable transportation. And folks can sign up and participate, tracking the trips that they're taking and getting prizes for rewards based on taking alternative routes of transportation. Couple of things we have coming up just next couple of days, our homeless subcommittee, council homeless subcommittee is meeting tomorrow morning at 10 a.m. here in City Hall and the Police Advisory and Accountability Commission has its regular meeting on Wednesday at 6 p.m. That's all I have.

Thank you. I'll turn to my colleagues. Vice Mayor Kurtz.

Thank you. I have a couple of things to report out, sort of fall into the categories of past, present, and future. A couple weeks ago, did the ribbon cutting for the Touch the Sky sculpture that is in front of the B Street Community Center. Thank you to everyone who worked on that, the economic development team, the library and rec department, I hope you go by and see it both in the day and at night. It is gorgeous. I'd also like to highlight the Marin Wildfire Prevention Authority budget which is scheduled to be reviewed and it's an action item for approval that will be on Thursday. I will not be attending but Mayor Kate will be there. Please take a look at the agenda which is now posted. There is so much in there that shows the work that's happening to support the community. San Rafael has about three million dollars with a bit of rollover from prior year and This is all the tax dollars from Measure C. And the way the city has worked to identify the projects is incredible on how best to use those dollars to support the community. So thank you to everyone working on that. On the, let's see, sort of on the present side, May Madness, fun, Friday night market, great, and it wasn't as windy as it has been, and the State of the City dinner that was hosted by the Chamber of Commerce. All these events just brought out the community in every way possible, so that was really good. I also attended, through an invitation from Chief Roman of the Fire Department, an event I hadn't really heard of called the Marin County Survivor Celebration. And this is an opportunity to recognize the first responders and all the teams that worked on saving somebody and a young gentleman who actually experienced drowning and was saved. And thanks to the San Rafael police department and the dispatch and San Rafael fire, as well as many others, uh, this gentleman was able to be part of this celebration. And so thank you to everyone. It really is an amazing event. And I was really honored to be included in being able to recognize the work that And it was the crew from Station 57, which is in North San Rafael. So that was really nice. I also attended the Golden Gate Regional Center legislative breakfast, which is an opportunity to talk about the Lanternman's Act, which has been in place to support caregivers and many others in the community who really provide support for residents around individual development disabilities. And important conversation as are many of these services and protections are at risk right now and how we're going to be able to continue them going forward if they are severely cut. So that was actually a good conversation as well.

So thank you.

Thank you, Council Member Micah.

Thank you, Mayor. I attended the 2026 Zero Waste Symposium in Runner Park, and that was featuring community-driven solutions towards a more sustainable and waste-free future. So they have a lot of innovation, like they have these new box made out of seaweed, so that was pretty cool. And then they have really practical tools and services to make sustainability accessible for all. They also have workshops, how to mend your clothes in case you get holes or stains or whatever it is, how to make butter. So if you would like to learn how to make butter, please come to me. I'm actually an expert by now. Also at the end of the May Madness, as Vice Mayor Kurtz mentioned, it was a great success, a great community event. I love to participate every year and I had the pleasure to actually be on the parade with my 1967 Dutch start. car for my husband and my dog. So anyway, I always love to participate at that event. The state of the city as well. I also participated in the Golden Gate Regional Center Legislative Breakfast and as Vice Mayor Kurtz, everything she said is a very important conversation and I just wanted to highlight the speakers were incredible and so inspiring to hear from them. and to really understand what they go through in their daily lives. And they were elected officials, so it really helps making decisions to help them out. Also attended the Rotary Epic Day of Service with lots of clubs all around the country. Here in Marin County, it was around older adults. And I saw Vice Mayor Kurtz in there. We've seen each other. all over the place. And then my last one is my highlight is I attended yesterday the small business marketplace at Canna Alliance. We were supporting small businesses which is investing in the heart of our community and the families as well that help us thrive. They were also introducing the two new murals. So as you know, Canna Alliance on the roof right now, they have a beautiful mural representing Guatemala, which is the residents of the canal. Most of them are from Guatemala, but there are a lot of residents from Mexico and a lot of residents from El Salvador and then a lot of other countries. So the two new panels were actually representing Mexico and El Salvador. Thank you so much to Canal Arts, Rich, for making it happen. The artists, Omar and Vladimir, they do such a beautiful job, and I cannot wait for them to put it up on the roof so you can actually see it from everywhere. And, you know, they have, like, great merchants. I'm kind of, like, wearing some of the treasures I found. And I'm just really grateful for so many people to come together to uplift Latino-owned businesses and honor the culture and celebrate what makes our city so vibrant. So let's continue supporting and celebrating our diversity. Thank you.

Thank you. Council Member Hill.

Thank you, Mayor, I have three events. One was, of course, shared with the Vice Mayor and Council Member Jorns Gulati was May Madness. I can't beat that you had a vehicle that you were in the parade was waving to the cars, so. That was wonderful. very vibrant event for the community. I also attended the State of the City last week and on Tuesday, May 12th, attended the Finance Subcommittee with Mayor Caton's staff in which we had the preview of the fiscal year 26-27 budget and considerations for traffic mitigation fees. That's my report.

Thank you, and I'll just add, so I also was at the State of the City, always honored that the Chamber enables me to give a bit of a speech that talks about all the things that we're working on here in San Rafael. We also honor both the team and individual employee of the year, as well as the community resident, I can't remember the new title. Public Service Award. Public Service Award with Ms. Carla Valdez. So that was fantastic. As Councilmember Bushey is out of town, I attended CMSA, which is the Central Marin Sanitation Agency meeting on her behalf, in which we discussed and approved the chemical supply contracts for the year. We also adjusted and approved FY27 budget. And finally, the CMSA will be issuing 2026 bonds. So we had a discussion of that as well as an approval to move forward. So as always, thank you for what you're doing between all of the meetings. There's a lot going on. Before we move to the consent calendar, I will open up to the public. If you have any comments on the reports that you just heard, now is your opportunity to provide those comments. I don't see any public comments, so I'll bring it back to the consent agenda. Let's see if there are any items that my colleagues would like to hold. I don't see any. I will open up the public comment on the consent calendar. That's item 2A through 2J. If you'd like to comment, we always appreciate knowing which item you are commenting on, and you're invited but not required to say your name and what part of San Rafael you live in.

THANK YOU. MY NAME IS GREGORY ANDREWS. MY NAME IS GREGORY ANDREWS. AND I WANTED TO BRIEFLY COMMENT ON AND I WANTED TO BRIEFLY COMMENT ON ITEM 2B, THE CONTRACT FOR 350 ITEM 2B, THE CONTRACT FOR 350 MERRIDALE DESIGN SERVICES. MERRIDALE DESIGN SERVICES. THIS CONTRACT ADDS $71,000 COST THIS CONTRACT ADDS $71,000 COST TO THE PROJECT FOR DESIGN AND TO THE PROJECT FOR DESIGN AND STRUCTURAL ENGINEERING OF THE STRUCTURAL ENGINEERING OF THE TINY HOMES THAT WILL BE RENTED, I TINY HOMES THAT WILL BE RENTED, I BELIEVE, BY THE CITY FOR THE BELIEVE, BY THE CITY FOR THE SITE. THE CONTRACTOR LCA ASSOCIATES HAD TO BRING IN A SUBCONTRACTOR FIRM BY THE NAME OF DPAE STRUCTURAL FOR THE STRUCTURAL ENGINEERING WHICH WILL ADD ADMINISTRATIVE COSTS FOR LCA TO OVERSEE DPA. TO ME THIS BRINGS INTO QUESTION WHAT OTHER UNFORESEEN COSTS WILL ARISE AS THE CITY SPENDS OUT THE ERF3 FUNDING AND IF THE CITY MAY ACTUALLY RUN OUT OF FUNDING BEFORE THE END OF 2027. IT ALSO TO ME BRINGS INTO QUESTION THE FISCAL RESPONSIBILITY OF THE CITY COUNCIL FOR THIS PROJECT, WHICH I'LL REMIND YOU IS A PROJECT THAT WAS PLANNED, CONCEIVED, PLANNED, AND FULLY SET IN MOTION BEHIND CLOSED DOORS BEFORE THIS PROJECT WAS EVER EVEN BROUGHT TO THE PUBLIC FOR ANY REVIEW AT ALL. THANK YOU VERY MUCH.

ANY OTHER PUBLIC COMMENT ON THE CONSENT AGENDA? Not seeing any, I will bring it back. A motion, please, on this item. I'll make a motion to move our consent agenda.

Second.

Moved and seconded. Roll call, please.

Council Member Hill. Aye. Vice Mayor Kurtz. Aye. Council Member Yaron Galati. Aye. Mayor Kate.

Aye. That motion carries 4-0. Our first public hearing we have this evening is a military equipment annual report and renewal of military equipment funding acquisition and use policy. I see Chief Spiller joining us. Welcome.

Last time I sat here, I spoke too soon, and I had to tap dance a little bit, so I'll wait until we get launched here.

How's it going, Chief? Good. How are you doing?

Good.

All right. Well, good evening, Mayor Kate, members of the City Council. First up in public hearings tonight is our annual report for military equipment use and reporting. This is an annual requirement, and we've been before you a few times, a few years in a row now. So for this year's report, I'm going to introduce Lieutenant Rhonda Cordero, who's going to present the item tonight.

Good evening, Madam Mayor, City Council members, and community members. It is my honor to present to you tonight the 2025 Centerfell Police Department Military Equipment Annual Report. Tonight, we will cover the background on Assembly Bill 41, Military Equipment Defined, an annual review of military equipment and staff recommendation. As a reminder, Assembly Bill 481 was enacted in 2021 and requires local governing bodies to approve and annually review law enforcement policies and procedures regarding the use of military equipment. In 2022, the San Rafael City Council approved the military equipment establishing policy 706 and the framework for transparency and accountability. As required by legislation, the annual report that should be attached to your staff report includes a summary of how the equipment was used, a summary of any complaints, the results of any internal audits, violations of military equipment use policy, and any actions taken in response, the costs associated for each type of military equipment, the quantity of each type of military equipment, and any military equipment the law enforcement agency intends to acquire in the next year. Under AB41, there are 15 different categories that defines military equipment. The San Rafael Police Department possesses military equipment in the following categories, category one, two, seven, 10, 12, and 14. In most instances, the military equipment possessed by the Centerfell Police Department is used at approved training. However, there are instances where it's been utilized or deployed in the field for their routine duties. Most of the funding that comes, um, that most of the funding, uh, that the military equipment, um, that we've acquired comes from our gen comes out of our general fund, except for our armored armored rescue vehicle, which was funded through a state Homeland security grant. And the far right hand corner, you could see, um, when, how long the inventory has been in our possession, um, and each category listed. In 2025, military equipment possessed by the San Rafael Police Department, like I said, was mostly used during approved training. In October of 2025, the San Rafael Police Department introduced the Drone First Responder or DFR program. Between October 30th and December 31st of 2025, the Drone First Responder responded to 113 calls for service. Since then, we have acquired an additional so that we have two drones at the current moment. We have six licensed pilots with several others in the process of getting their license. So ideally, we would like to have a licensed pilot or operator for every shift 24-7. The San Rafael Police Department also shares equipment under category one with the Novato Police Department as part of our Marin Regional Crisis Response Unit. And that UAV was deployed during five crisis response unit operations. And on occasion, we've asked for the assistance of a UAV from the Marin County Sheriff's Office. And during 2025, it was utilized in one crisis response unit operation. The armored rescue vehicle, which falls under category two of military equipment, was used at approved training as well as the five high-risk operations that were listed in the previous slide. We also have military equipment that falls under category 14, which is our less lethal impact devices, which were used at approved training as well as one high-risk situation. I'd also like to add that the police department has not obtained nor does it utilize any equipment procured from the United States Department of Defense through the Law Enforcement Support Program, also known as 1028 or 1033. With regard to our inventory, we cycled out five 870 Remington shotguns that are utilized as less lethal delivery impact systems with five less lethal 40 millimeter impact devices. This is part of a department transition to one less lethal impact device platform. In consideration of the planned destruction of the 870 Remington shotguns, as mentioned, the police department would procure an additional 1840 millimeter less lethal delivery systems under the city council approval. The cost of purchasing the 1840 Less lethal impact delivery systems is estimated to be approximately $21,635.59. This cost will be included in the police department budget for fiscal year 26-27. There are no other equipment recommendations or additional expenditures to the general fund. I'm pleased to announce that the center file police department has received no complaints regarding military equipment in 2025, nor has it in the previous two years listed. And after an internal review, uh, revealed no violations regarding any military equipment and usage. The San Rafael Police Department remains committed to transparency, accountability, and responsible stewardship of specialized public safety equipment. These tools are carefully regulated and intended to protect both community and community members and officers during high risk incidents. Staff recognizes you have different options and respectfully recommends approval of the resolution consistent with AB 41 requirements.

Thank you, Lieutenant Cordero. Great report. I'll see if there are any questions. Council Member Hill, go ahead.

Thank you, Mayor. Thank you, Lieutenant Cordero, for that report. I had a few questions. One is related to the drone. It's somewhat novel for our community. One of the features of the policy for privacy that I recall was that in its operation, camera is aimed forward during flight and then and only when it arrives at an incident will it start to aim down. Can you just confirm that my understanding is correct and that that is actually how the drone has been operated?

Yeah, that's a great question. So, you know, our police department policy 606 specifically covers our drone as a first responder or unmanned aerial units. Part of our policy includes that camera up while in transit. Pilots are also trained that way, so there's an intersection between policy as well as the training and operations. I will offer that the equipment that we have is really pretty sophisticated from a camera perspective. So as soon as the drone leaves the nest, depending on the location that the drone is headed toward, we could actually start focusing right away on the target. So for example, if we were heading to B Street Rec, just as an example, we could clearly have eyes on as soon as the drone is 30 feet above the public safety center. So we typically start zooming in on the target location as soon as practical, as soon as we can, but while responding back to the base or back to the nest, camera is always up and never randomly surveilling.

Thank you. Thank you very much for confirming that. And then my follow-up is, and I know that it's not part of the mandated state law report, but can you elaborate a little further anecdotally as to some of the impacts that the drone has had for officers and for the community?

So far, the report back has been that it's reduced our response time for priority calls. It's also first on scene typically ahead of our ground units and the pilots can assist the incoming units in setting up perimeters or locating suspects. So it's been a game changer for the police department and the community members. increased our response times to priority one, or decreased our response times to priority one calls and is assisted with not only our department but also the fire department. We've gone to structure fires to assist the fire department in incoming units as well.

Thank you. In my recollection, one of the safety features of having a drone was that it might result in what was reported to dispatch might not be the case and that we might have situations where we would be able to turn off lights and sirens and travel in a slower pace. Could you confirm that that has ever happened?

Yes, so typically, like you said, the information coming into dispatch isn't always accurate, so we could be responding to a collision, unknown if there's injuries or something of that nature, and the drone can get there and determine, you know, people are out of the car, walking around, so our response can change from a Code 3 emergency response to a reduced level so that it lowers the risk. of the, not only the community members, but also the officers that are responding to those calls. That's just one example that I can think of at the top of my head where we can reduce our, from it being a prior emergency response to a lower level. Based on the drone's response and operator observations.

If I could just add, the inverse is true as well. So the drone has responded along with ground units to a reported assault. The drone who was first on scene, the drone operator who was first on scene was able to gather specific information to escalate units and increase the officer's response time on the ground. This turned out to be a homicide in one specific case and we were able to use the information that the drone operator was able to provide in conjunction with our automated license plate readers toward a very successful apprehension of the suspects in that case. So both of these situations, both decreasing in a situation where we don't need to go, lights and sirens, as well as expediting when we can validate what's happening at the scene, both of these are true with the drone. As you're all well aware, response times are one of my metrics in terms of Uh, success and efficiency and it's a focus of our strategic plan for the city council. Um, we've had 354 airborne deployments in 2026 and the average response time to eyes on is 66 seconds. And if you, you know, recall. the five minute emergency response time that we have been working to decrease, and that was a decrease from years before, this is really a game changer. So my anecdotal response to your question is this technology is a game changer and it continues to be a success for the police department.

In that light, I might ask a softball question, which is that would the department say that this is worth the investment year over year in the drone program?

Absolutely. We're certainly becoming reliant on it, but it is allowing us to gather more information more quickly. to share situational awareness with the watch commander and others in the field. For example, there's a spectator feature, and I randomly monitor flight operations throughout the day, and you can actually monitor what's going on from, the watch commander can do it from their tablet, from their desk, from the phone, and it's a pretty powerful feature as we gather to make game time decisions in terms of resourcing and responding to events in progress.

Thank you. If you'll indulge, one more question. Among all the equipment, again, this is more anecdotal, I don't intend to make this a data-driven question, but it would seem to me that some of the equipment, every officer we want to make certain has training on, say non-lethal weapons, but some it seems more specialized. Can you confirm, without it being exhaustive, some of the equipment that's been mentioned that every officer would have training with?

Excuse me, were you asking specifically about less lethal? Okay. So currently we have two platforms. We have the 870 Remington shotguns that we deploy for less lethal impact delivery systems, which we use a beanbag round. And we have the 40 millimeter less lethal shotguns. And part of our department transition is to start to cycle out the 870 Remington and replace them with the 40 millimeter less lethal impact system. It's proven to be more effective. We can deploy it at greater distance than the Remington shotgun, which then allows our officers to have time and distance to utilize their deescalation tactics. So it's proven to be, in our opinion, a better, less lethal impact system. It also allows the officers to, they get trained in both, to answer your question. Sorry, Council Member. They get trained in both. They're required to do so every year. But this would allow them, by transitioning to the one platform, more training on the one instead of on both.

Thank you.

Okay.

Thank you. Vice Mayor, questions? No? Council Member Urens-Gulati.

I appreciate Council Member Hill because he has asked a lot of the questions that I had. So I guess my question is one of the features of the drone is that you can use voice when you get to the incident. Is that something that you have been able to utilize or is more like observation?

So our drone equipment does not carry payload at all, including audio speakers. So we cannot communicate with somebody on the ground. There is heavy-duty equipment that you can equip like that, but ours, it's purely video equipment for the operator or a spectator. So there's no two-way communication with the drone in the field.

Okay, thank you. And my other question was, as you are replacing the different tools that you have, what happens with those, the old ones?

They get destroyed. That inventory gets cycled out, and it gets destroyed, and we document that destruction.

Great, thank you. Thank you, and I just have one follow up question. It was in the staff report, but just for folks that are watching in. We do have a police advisory and accountability committee, so could you just speak to the presentation and how it was received?

Absolutely. So the legislation actually requires a community meeting in advance of the governing body considering the matter. So what we have done since the police accountability and police advisory and accountability committee was formed is we present to that body, which is a publicly noticed meeting, Lieutenant Cordero, presented, we addressed community questions. That was accessible to the community, both on Zoom and in real time. There were some questions and comments made, but all of that was captured into the staff report.

Great, thank you. Not seeing any further questions at this time, I'll open up public comment. If you'd like to comment on this agenda item, now is your opportunity. Okay, I don't see anyone coming forward, so I'm gonna close the public comment and bring it back to the council for comments and then ultimately a motion. Vice Mayor, any comments on this item?

Yeah, I'd just like to thank you for the report. I know it's a required, but you make it very easy to understand and year over year to see what the changes are. So I really appreciate that. And thank you for reaching out with the PAC group and using that as an opportunity to share this information. So thank you and happy to make a motion when we're ready.

Thank you. Council Member Irenz-Goularty.

Yes, I also wanted to echo Vice Mayor Kurtz. Thank you so much for the report and for always looking for items that do de-escalate, you know, the situation. So I really appreciate that. And yeah, thank you. I definitely support this. Thank you. Council Member Hill.

Yes, building on my colleagues' comments, AB 841 is... as a law that we are following. But as to the spirit of it, I think that this is really about making sure that our community can have a demystified view into how military equipment as it's defined is used by our department. I think that in the testimony given tonight and at the PAC meeting that We use equipment only when needed and that we're in a position of preparedness if we have to. So I will be very happy to be voting in favor of receiving this annual report.

Thank you, and thank you, Chief Spiller. Thank you, Lieutenant Cadero, for both this evening and for the presentation of the PAC, and I concur with all the compliments that have been given and really appreciate the data-driven approach and how you're able to tie this back to both priority one response times and both the escalation and de-escalation. I think that makes it very tangible for our community how this investment is benefiting all of us, so thank you. I would entertain a motion.

I'd like to adopt a resolution renewing the ordinance approving the San Rafael Police Department Military Equipment Funding Acquisition and Use Policy, Policy 706.

Second.

Moved and seconded. Roll call, please.

Council Member Hill.

Aye.

Vice Mayor Kurtz. Aye. Council Member Yadanz-Gulati. Aye. Mayor Kate.

Aye. That motion carries 4-0. Thank you so much. Our next item under our public hearing is an update to park impact fee programs and nexus study. And I will turn it over to our city manager to make a few comments before the report.

Thank you, Madam Mayor, members of the council. I'll just provide a brief introduction and then hand it over to our staff for Bulk of the presentation. I would just note that You know as agendized this public hearing Focuses specifically on Work being done to update and bring forward our park impact fee. I would note that we have discussed this topic several times at the finance subcommittee and And to provide just a little bit of context, the city has as part of the council strategic goals review and updating of, well, all of our fees across the board, but specifically bringing up to date the category of development impact fees that when taken together is really the means that local government has at our disposal to help ensure that plan development and development that actually comes forward is able to pay its proportionate fair share of the cost of infrastructure required to maintain service level standards as adopted by the council in your various policy documents from the general plan to the park master plan, et cetera. It is a very, can be technical and very complex set of economic analyses and cost allocations matching up with the evolving legal and statutory framework that allows the city to impose the impact fees. In fact, we do have planned at your second meeting in June bringing forward the traffic mitigation fee and work is currently underway on the public safety impact fee. So I do want to just ensure that this is just the first of several conversations that we'll be bringing to the council to put the city in the position we think is most appropriate to help address the impacts of the development that is contemplated. And with that, I think I'll turn it over to staff for the presentation. And I will note that in the presentation, we do have a kind of update to the staff recommendation that we will touch on and make sure that we're clear on that as we get to the public hearing portion of the presentation. Thank you.

Thank you. Welcome.

Thank you, Paul. Good evening, honorable mayor and members of the council. Selena Smith, senior management analyst from the community and economic development department. Joining me today is Debbie Kern with Kaiser Marston Associates, who prepared the Park Impact Fee Nexus Study. Also joining us is Micah Hinkle, director of community and economic development, in addition to Catherine Coffa, our Director of Library and Recreation. Also online, joining us remotely, is our outside legal counsel, Megan Burke with Jarvis Fay, who's been supporting us through this process. So today's item is to receive an update on the park impact fee program. Last year, the city engaged with Kaiser-Martin Associates to prepare a new park impact fee nexus study. The city's park impact fees have not been comprehensively updated in decades. The park impact fees are a key funding mechanism to ensure new development helps offset the cost of park and recreation infrastructure. This is a broader effort to, this effort is part of a broader multi-year initiative to update all of the city's impact fees, including traffic mitigation, housing, and a potential new public safety impact fee. We're also seeing this impact work happening statewide as jurisdictions respond to housing laws that are accelerating residential development. The goal here is to ensure that we remain legally compliant and that the new development contributes its fair share so that we maintain our current service level without relying on the general fund. In addition, this work also aligns with the Park and Recreation Master Plan and supports long-term system sustainability. The City of San Rafael has long required new residential development to contribute to its park and recreation infrastructure. In 1971, the City Council adopted Ordinance 1029, which added Chapter 3.24 to the San Rafael Municipal Code, establishing the city's park and recreation facilities fee. This ordinance authorized the city to impose fees in connection with the construction of dwelling units to fund the acquisition, improvement, and expansion of parks, playgrounds, and recreation facilities. And in 1989, the council adopted Ordinance 1558, establishing the city's park dedication in the program pursuant to the Quimby Act. This ordinance authorizes the city to require the dedication of land for residential subdivision projects upon the acquisition, development, or rehabilitation of park land and related improvements. With that background on the city's existing park impact fee programs and the purpose of this update, I'd like to now turn it over to Debbie Kern with Kaiser Marston Associates to walk through the next study.

Good evening, Madam Mayor, members of the Council. I'm happy to be here tonight to talk about the NEXUS study that we prepared. The NEXUS study is really a cornerstone of the California Mitigation Fee Act, which was initially enacted in 1987. It is periodically updated and most recently it was updated in 2021. And in that update it requires before a city or local jurisdiction adopts an impact fee that you must prepare a nexus study. And the purpose of the nexus study is to, as we have in this slide, is to ensure that growth pays for the impacts of growth. And what that means is that the fee amount that you set is set so that new development pays a fee that fully mitigates the impacts of the demand that it creates for new parks and park facilities. And so the next study establishes the maximum legally supported fee amount. It identifies what you're gonna spend the fee money on. It ensures that the fee amounts that you're setting meets all the requirements of the California Mitigation Fee Act and that they're proportional and that no fees will be levied on new development to mitigate the deficiencies of existing development. So you're not burdening new development on deficiencies of the existing situation. It ensures that fee revenues will be used for capital improvements, not operating costs or maintenance costs. So that's the purpose of the nexus. The methodology. What we have used, under AB 602, there's a variety of methodologies that you can use, but one of the standard methodologies is looking at, well, what is the existing level of service in the city today for parks and recreation facilities, and what would be the cost to replace that and then what is that cost per capita, and then you apply that same per capita cost factor to new development. So basically, new development is just paying its proportional share of what the existing level of service is. You're not increasing the level of service, it's the cost to maintain that level of service. So in San Rafael currently today, there's about 106 acres of parks, of neighborhood parks, community parks, special parks. And in addition to that, you have three community recreation centers and one cultural center. So we have converted that, that level of service into a yield of about 184 square feet per year. per thousand residents is the level of service. And so we have then converted that into a cost per unit of new development and then from that a cost per square foot because one of the requirements of AB 602 is that the new fee be established proportionate to the square footage of new development. And so that this methodology ensures that costs are fairly distributed and that growth pays its fair share and it meets all the requirements of the Mitigation Fee Act. One of the requirements of the Nexus report is to include a capital improvement plan and that identifies what are the types of eligible improvements that the city has planned that would be eligible for funding in part with the fee revenues. And so the city staff has worked to develop that plan based upon the CIP, the citywide CIP, and the cost of the projects included in there are ones that are not, that there isn't other funding already identified, such as Measure P. So those projects have been taken out of the list, and then it identifies the types of, the list of projects for which a portion of those costs will be funded with impact fee revenues. So in addition to the impact fee study, which the Nexus report addresses, the city has also decided at this time, as Selena mentioned, to update the QMB provisions that apply to subdivision projects. So new development that's in subdivisions. And right now the city's requirements are it requires new development to either dedicate or pay it in lieu fee equivalent to the cost of providing three acres of park land per thousand residents. To align that we've decided, the city would like to align the Quimby provisions with the impact fee program and that means reducing the requirement actually on subdivision projects to either a dedication of 1.84 acres per thousand or paying a fee. And so that translates into a dedication requirement of 184 square feet of park land for multifamily units or 206 square feet per single family unit. And we have calculated what that fee amount is based upon the cost of acquiring land and the cost of building new park facilities. And with that, I'll turn it back to Celina.

So as Debbie mentioned, the NEXUS study establishes the maximum fee levels the city can legally adopt based on the projected impacts of new residential development. This slide summarizes those maximum allowable fee levels identified in the study. The NEXUS study evaluates three fee categories. This includes parkland dedication in lieu fees for residential subdivisions, recreation facility development impact fees for residential subdivisions, and parkland and recreation facility development impact fees for non-subdivision units. As shown here, the recreation facility and parkland and recreation facility fees are calculated on a per square foot basis, consistent with state law and the AB 602 methodology, and the parkland dedication in lieu fee, shown at the top of the table, is calculated on a per unit basis for subdivision projects. All fees shown here also include a 2% administrative allowance per the NEXUS study. The city also engaged Kaiser Marston and Associates to prepare a broader development fee burden market comparison to evaluate how San Rafael's total development impact fee is compared to other jurisdictions in Marin County and the Bay Area. So in the first column on the left, the blue text is what the city of San Rafael charges or is going to propose like that. Public safety, we don't charge that right now, but that's something that will be coming to the council in the future. Red is delineated by other charges by agencies. Importantly, this analysis looks at the full fee burden experienced by development projects, not just park fees and isolation. This includes traffic, parks, utilities, schools, and other applicable development fees. This slide shows the comparison for a representative townhome subdivision project. As shown here, if the city were to adopt the maximum allowable park fees identified in the NEXUS study, San Rafael would be modestly above the current regional average for subdivision projects, approximately 12% above average, while still remaining comparable to or below several nearby jurisdictions. The analysis also highlights that park impact fees are only one component of the overall development impact fee burden. Even at the maximum rates, approximately 45 to 50% of the total fee burden is attributable to other agencies and fee categories such as water, sewer, and school district fees. This slide shows the same comparison using a representative mid-rise rental apartment project, which reflects the majority of residential development activity currently occurring in San Rafael. For these non-subdivision projects, adoption of the maximum allowable park impact fees would place San Rafael approximately at the regional average for total development for fee burden. This analysis demonstrates even at the maximum fee level supported by the Nexus study, San Rafael remains competitive within the regional context, particularly as many jurisdictions are actively updating their own development impact fees. The market comparison was prepared to provide additional context for evaluating the proposed fee updates and to help assess how the city's overall fee structure compares regionally across different housing product types. Based on the findings of the NEXUS study and the regional market comparison, staff is recommending adoption of the maximum allowable fees identified in the NEXUS study with an effective date 60 days after adoption. As discussed on the previous slides, the market comparison analysis found that adopting the maximum allowable fees would allow San Rafael would place under approximately at the regional average. For non-subdivision projects, which represents those currently active development in the city, and then for subdivision projects, adoption of the maximum fees would place the city modestly above average market. Staff believes the adoption of the maximum allowable fees ensures that new development contributes its full and proportionate share toward parkland acquisition and recreation facility improvements needed to serve future residents and support continued housing growth. So this slide just summarizes the slide we've seen previously, so the maximum allowable fees with those 2% administrative allowances per the Nexus study. In addition to this, staff is also recommending reduced fees for ADUs and 100% affordable housing projects to support the city's adopted housing policies and the housing element goals. The housing element identifies the preservation and production of affordable housing as a key city priority and includes programs intended to encourage housing affordability and additional housing production. Consistent with state law, ADUs under 750 square feet would remain exempt from park impact fees. Staff is also recommending reduced fee rates for larger ADUs and for 100% deed restricted affordable housing projects across both subdivision and non-subdivision categories. This slide summarizes the proposed reduced fee schedules for ADUs and 100% affordable housing projects. For ADUs, the reduced rates recognize a smaller scale and reduce impact generally associated with accessory dwelling units. For 100% affordable projects, the proposed reduced fee structure is intended to support housing affordability and encourage additional affordable housing production within the city. Even with the reduced rates, these projects would continue to contribute to park and recreation facilities needed to serve future residents. Following tonight's public hearing, staff is requesting that the City Council open the public hearing, keep the public hearing open and continue the public hearing to June 15th, 2026 at 6 p.m. or as soon thereafter that the matter can be heard. In addition to this, staff is requesting that the council direct staff to prepare a written response to public testimony and provide any questions to staff as appropriate. This includes questions relating to any of the public comment that has recently come in. For example, accepting affordable housing projects from the park fees or senior housing reduced rates, things like that. Thank you and this concludes our presentation.

Thank you, Selena. Thank you, Debbie. Appreciate your presentation. I'll start with Vice Mayor. Any questions on this item? Yep, go ahead.

Thank you. It's a really good conversation. It's hard because it pits the need of wanting to improve our parks and have the right fees to the fact that we need to have housing. And it pits those two together, and it pits us, the city, against the developers. And I find that really hard. So I want to try to couch this in terms of... not whether growth should contribute to parks because it should. The question is whether our fee structure is calibrated in a way that still allows housing we say we want to have built actually get built. And so my questions are really looking at trying to step back from some of that and I'm glad we're gonna recommend to continue the public hearing and have this come back because I do think there's a lot to look at. One of the things that I was trying to, like if we took one of our entitled projects now and applied this fee as well as all the other fees, what does that, about to for a developer so you don't have to answer these are these things as we come back I think it would be helpful at least for me to understand what are we talking about in terms of that picture in those in terms of that when I look at the comparison chart so they're moving on from that one when I look at the comparison chart I don't think of San Ramon comparable to San Rafael. I don't see, the development I've seen out in San Ramon is sprawl. There's a lot of sprawl development, not necessarily infill development where we're really focused on infill. And I'm wondering if there's any more apples to apples and some of them were right so so Santa Rosa and Petaluma is probably more infill than San Ramon but I don't know if there's another jurisdiction that would be a feel a little bit more apples to apples around that um and then in terms of Based on where we're at today with the development of projects entitled but nothing being built or slow process in getting projects built, have we seen or have you seen jurisdictions bring in, transition a fee change over a period of time? We are jumping quite a bit from where we are today to the max. And I'm wondering if there's been any examples of gradiation in that process. And I know we're going to be coming back with traffic fees. There's probably other fees. So again, I think we need to see where we're at today with fees against the whole picture of all the fees to where we think we might be going. And again, the phased implementation, if there's a way of phasing it. And then also, we did talk about ADUs. And we've talked about ADUs before. Most of our ADUs are not used for additional new housing, but are used for I don't know you would call it what the term would be in terms of people developing their ADU it's not for outside additional housing so I'm curious in terms of yes we're giving a discount on an ADU those fees but I'd also like to see if that discount be contributed if that ADU was being used for additional housing inventory I guess that's the word I'm looking at because right now the ADUs are not really contributing to housing inventory per se, I'd also like to see if there's, um, any jurisdictions that have looked at senior housing that has a different type of structure or, um, other types of housing, you know, categories, categorizations. And again, this is to come back later. I know we have the 100% affordable housing, but maybe there's, again, zero to 100%. And maybe there's some other qualification in that spectrum of looking at how do we support this. Cause I, I mean, every headline these days in our community is around how housing is not getting built. And, and again, the pit of, of is increasing fees and supporting our parks and knowing that we, yes. And I want to make sure we're not doing anything that impacts our progress on getting more housing. Um, And I don't know if there's, I mean, all of us contribute, have to contribute to our parks. All of us should be contributing to the support of our parks and community and everything else. And I know that that's, again, much bigger than this study and much bigger than this conversation. But again, we're just talking about the developments, but I'm seeing that it is a bigger responsibility across the board. And... This might be something that maybe you could answer tonight, I don't know. If our housing pipeline slows further, I mean right now we have a lot in our pipeline, but again we don't have where we've moved from entitlement to shovel in the ground, so we're delayed there. Do higher fees actually reduce the very revenue Stream we were trying to increase because a lot of a lot of the messaging we've had Around having new housing is the fact that that's going to bring more people into the city More production more economic vitality all those good things But if we don't have the housing they're not coming so again not it's it's more of a hypothetical type of conversation, but this is the only place we can have that conversation. So I know I'm directing these questions to you and it's more of a opportunity for us to think about and to talk about. How do we do both? How do we support the infrastructure that we need to support and at the same time, are there other tools in the toolbox that are being used in other places too that don't impede the housing that we need to have done?

Comments and questions sort of all. There are a lot of questions in there. Commentary too, but that's okay. So I know we're also gonna have a housing study session, so maybe some of those might be answered at that as well, as well as the continued public hearing, but is there anything, Director Henkel, that you would want to respond to right now?

Um, I think in this case there's a bevy of options in there, but I think, uh, it gives us an opportunity to kind of take in, uh, council feedback from that and break those down and writing and also split what's most appropriate to answer. Most of the study session that potentially come because there are some policy, like greater items, uh, compared to the fees and just recognizing the fees. Um, this is a long time coming and, you know, we've spent multiple, almost a year plus on this. working through the council subcommittee meeting. So there's, recognizing there's a lot of process in working with the council economic development subcommittee and the finance subcommittee, just kind of recognizing the backbone on this stuff. So I appreciate your questions. I think we'll have an opportunity to respond to those.

Thank you, and that's a good point, because those meetings are also open to the public as well, so both the housing subcommittee as well as the finance committee. Council Member Micah, go ahead.

Yes, thank you so much for the study and the report. I have actually similar questions from Vice Mayor Kurtz. One of them, I will also be interested to see the total fees that developers are, are paying when they come in. And I'm thinking about the density, like the state density bonus that developers are getting. So how that plays within the balance of their projects to to see what makes it possible and what makes it impossible, I guess, and I don't know how easy that would be, because I understand that each project has its own fees, but it would be really nice to at least understand what are all the different fees that they are seeing, and also the the advantages that they have from the state. I also have, regarding the ADUs, I have the same question. When I know that you mentioned there is an exception if it's under 700, 750 feet, but what about the usage? Because we know that a lot of them are not built to be rented. So some of them are like short-term rentals or some of them are like just to have extra. So I'm curious to see if the size matters versus the usage of the building, of the ADU. And then the other one is I love to see that we have incentives for low-income or very low-income housing. And is it possible to make it even more more attractive, the more you build low income, very low income, the less the fees that you have to pay. And again, not only about the fee that we are talking today, but in general, like the other fees as well as an incentive to bring more low income housing. Yep, I think those are all my questions. Thank you very much.

Thank you. Council Member Hill, any questions?

Thank you, Mayor. I have a few questions with respect to how, because I actually, as much as it was testified that these formulations can be complex, and I'm sure it is, the way you explained it seemed pretty straightforward, which is that there's a proportionality using as a baseline existing assets and services, and then using the math of the per capita allocation and applying that to the units that would create the growth that would be expected for those units. It seems pretty straightforward to me. A, is it pretty much that straightforward? I'm sure there's more to it, but how do other, are other communities using the same formulation to arrive at their nexus study values for different types of development?

Should I answer that? Yes, this is a standard methodology for establishing park fees that we have been doing for communities throughout the state and other firms use the same approach. It's one of the recommended approaches in this report called the Turner Center Report that HCD commissioned for preparing these nexus studies. You have to choose which method, and this is one of the recommended methods.

So I'm hearing your testimony is that there's nothing novel about what is being done here. It's the opposite. This is a standard formulation.

Correct. Exactly.

That's my only question for now that we're continuing. I will defer additional questions to the next chair.

Thank you. And I have one question. I know you touched on it, but just to have clarity, I'm really struck by the comment that growth pays for the impact of growth. And you repeated that several times. So can you talk about how that intersects with the CIP and the projects? You said there's a list of projects. How do you ensure that it's not? I mean, we'd all love more parks. Everyone always wants new parks. We know that. But how does that manifest, I guess, in the real world?

Well, the intersection of that is so that we establish the maximum fee in the report. And then you want to, then we also projected what the revenues would be generated by the application of the fee to the new development. So we have a projection of the population growth through 2040. We converted that into the growth of new residential units. and then using the average unit size, estimated them with the total amount of square footage, and then the application of that per square foot fee to the new square footage, we looked at then what would be the range of new revenues. And one of the requirements of the Nexus report and for the adoption of a fees is you have to demonstrate that the amount of fee revenue that you're going to be generating does not exceed the amount of new projects that you're, the cost of new projects. So your new project cost, fee revenue should just cover a portion of those costs. There are no way you should be generating more fee revenue than the planned projects that you have in the pipeline. So that's how the intersection is. So we have the total CIP, and then a portion of those costs we would anticipate that would be eligible then for funding with the fee revenues, but the fee revenue total will fall short of that total amount of capital improvements to be undertaken, park improvements.

Okay, that's really helpful. And I have one further question just for clarity. So if we have, in one of our developments, 1,500 people coming in, and you're talking about capital improvements, would it ever be to a park acquisition? Like you need more parks. So that's the other part I'm trying to figure out. And then we don't have land just lying around. So if you don't have the space to create a new park, then where does that money go? Or how does that?

Well, in that CIP, the city staff has identified acquisition of additional parkland. And so that's included, as well as the cost of upgrading existing parks for making them, modernizing them and making them more, enhancing their usability, changes that occur over time that you need different kinds of parks. And so there's improvements in that and then as well as the purchase of new land, improving that land, so creating more parks for new developments.

No, that's really helpful, because we're talking about fees, but really, how does it manifest in the real world? So I really appreciate you answering that question. So I don't see any further questions at this time, so I'm going to open up the public hearing on this item. If you would like to speak to it, we'd be interested in your input. You're invited, but not required to say your name.

GOOD EVENING. GOOD EVENING. GOOD EVENING. GOOD EVENING. GOOD EVENING. GOOD EVENING. GOOD EVENING. GOOD EVENING. GOOD EVENING. GOOD EVENING. GOOD EVENING. GOOD EVENING. GOOD EVENING. GOOD EVENING. GOOD EVENING. GOOD EVENING. GOOD EVENING. GOOD EVENING. GOOD EVENING. GOOD EVENING. GOOD EVENING. GOOD EVENING. GOOD EVENING. GOOD EVENING. GOOD EVENING. GOOD EVENING. GOOD EVENING. GOOD EVENING. GOOD EVENING. GOOD EVENING. GOOD EVENING. GOOD EVENING. GOOD EVENING. GOOD EVENING. GOOD EVENING. GOOD EVENING. GOOD EVENING. GOOD EVENING. GOOD EVENING. GOOD EVENING. GOOD EVENING. GOOD EVENING. GOOD EVENING. GOOD EVENING. GOOD EVENING BUT I BELIEVE I HEARD STAFF BUT I BELIEVE I HEARD STAFF RECOMMEND THAT YOU LOWER THE RECOMMEND THAT YOU LOWER THE DEVELOPMENT FEES AND IT BOGGLES DEVELOPMENT FEES AND IT BOGGLES MY MIND THAT YOU WOULD MY MIND THAT YOU WOULD CONSIDER THAT. CONSIDER THAT. WHY ON EARTH WOULD YOU LOWER THE WHY ON EARTH WOULD YOU LOWER THE DEVELOPMENT FEES WHEN WE'VE DEVELOPMENT FEES WHEN WE'VE GOT A CITY THAT'S GETTING RAKED GOT A CITY THAT'S GETTING RAKED OVER THE COALS BY DEVELOPERS and making a windfall. Council member Kurtz said that everybody knows the headlines are all about developments that aren't being built. That's not what the headlines are about. The headlines are about the next tallest building that's coming forward to Sarah Fell, 17, 24 stories. Staff used the term mid-level rise. I'm hearing all about high-rise here, and you are getting threatened to be sued by developers because you're trying to show some restraint. So it seems like lowering the development fees doesn't make any sense. If I heard that right, I believe I did. Okay, I didn't. then I apologize for that, and I encourage you to just keep those fees, because you're gonna need every dollar you can get your hands on. I must have heard something wrong, so excuse me for that, thank you.

Thank you for your public comment. We'll ask for clarity from staff, because there is a lot of information, so it's always good to have questions when there's not clarity.

HELLO, COUNCIL MEMBERS. THANK YOU FOR TAKING THE TIME TO FURTHER LOOK AT THESE FEES AND TO CONTINUE IT TO THE NEXT MEETING. WE THINK THAT'S AN IMPORTANT STEP TO HAVING A GOOD FEE STRUCTURE IN PLACE. PARKS ARE IMPORTANT INFRASTRUCTURE. I'M JENNY SILVA, BY THE WAY, FROM CULL MARIN HOME. SORRY FOR NOT INTRODUCING MYSELF. PARKS ARE IMPORTANT INFRASTRUCTURE AND WE SUPPORT THAT SAM RAFEL INVEST IN ITS PARK. That said, we are very concerned about these fees, and in summary, we do not believe that the fees will generate the projected revenue and that the size of the fee is likely to have a significant negative impact on new development. We don't think it is proportional to the impact that these new residents will have on the city of San Rafael. ESPECIALLY GIVEN THAT SAMERFELD IS CURRENTLY NOT EVEN AT ITS PEAK POPULATION. IT'S HARD TO SEE HOW A NEW UNIT WILL HAVE AN $18,000, $15,000 IMPACT WHEN WE HAVE HOUSED THOSE PEOPLE BEFORE. So we are concerned overall with the size of the fee. I was really heartened to see here Councilmember Kurtz ask for a project analysis for the already entitled projects. I think that will be really helpful. And I also have another suggestion of how we might want to look at this. Sam Raffel used to have a 20% inclusionary requirement. And when that was in place, there weren't projects proposed. It reduced that percentage to 10% and started getting proposals. And from a developer's perspective, that inclusionary percentage works as a fee. It's an additional cost. And I would think the staff would be able to do some analysis of what the reduction in cost on construction was when that was put in place and that would be a very valuable benchmark I would say much more valuable than comparing to other jurisdictions because right now we have no jurisdictions that are building enough housing every jurisdiction is having trouble making things financially pencil so my time is up thank you anyway thank you any other comments on this item

Good evening, council members. My name is Jeff Doherty. I'm a Marin resident. I'm also a small infill lot developer based in Marin and Sonoma County. I don't currently have any projects in Centerfell, although I'd love to, so I'm here to comment on the fee, specifically in opposition to it. I just wanna first say I echo the technical comments that I know have been submitted to staff through the California Housing Defense Fund regarding the flaws in the NEXUS study. I think the issue from a non-lawyer's perspective is the methodology referenced was done in 2023. In 2024, there was a new Supreme Court ruling that changed what's allowable under the law for the impact fees. So I'd encourage us to kind of further discuss and look at that. Also, as discussed earlier, just given the number of impact fees currently under consideration, I just want to focus on how these fees kill projects before they even start. As Council Member Kurtz said, one of the main concerns of at least my community is Projects get approved, but they don't get built a lot of that if you talk to developers People say it doesn't pencil the costs are too high much of that is out of all of our control That's cost construction gas prices go up energy costs things like that the one part that we do control is taxes and fees and To dramatically increase upfront fees and costs on new housing at a moment when we've just approved all these projects We want to see them actually come into our community that just feels counterproductive that said I live in Marin because we love our parks and open spaces like others have said I get the desire to fund parks and I think there's just other ways to do it I think we really need to look at what do as again Councilmember Kurtz you said what do these residents that come into our community They pay property taxes, they support our businesses, they eat at our restaurants, they pay sales taxes. I really think we can think about how all that revenue benefits our community and supports our parks as well. So thank you for your time.

Thank you. Any other comments on this item?

Good evening, Council Members. My name is Ani Gupta, and I am here representing YIMBY Marin, which is a pro-housing organization that operates within the County of Marin and has more than 600 members who would really like for more housing to be built in Marin because we need more housing, we need affordable housing, and we need it right now. And at this point of time, when San Rafael is finally taking steps towards getting some of that housing built, this would absolutely be the wrong time to increase the financial burden on new housing that is going to be developed. We already know that a number of developers will balk at just the site of the fees that are being proposed, and some projects will not even get developed. Furthermore, projects that do get developed will end up passing the cost of those fees to the residents, making the housing even less affordable than it already is. san rafael needs space and needs affordable housing to house its workforce it needs housing to house essential workers and residents many of whom are have difficulty finding housing people like our seniors the large unhoused population that is growing by the day and putting fees in place at such at this juncture would just make it even even more difficult to get things built than they already are I find it absolutely appalling that San Rafael only approved 33 housing units last year. That needs to change, and this would be going in the wrong direction. I hope you will reconsider not necessarily the fees themselves, but the size of the fees. Thank you.

Thank you. Any other comments on this item? OK, I don't see any other comments. So I close the public hearing. I continue the public hearing. But I do want to ask, there was a question asked for clarity around whether the staff was recommending lower fees for developers. That was a question we heard. I don't know if we can answer that.

We can certainly answer that will ultimately be requesting a motion to continue the public hearing to a date certain which is June 15 16 16 to have my date row 15.

Nope. You're right one five. Yep one five and

And we'll have an opportunity for the council deliberation that night after the public hearing is resumed. The staff will have an opportunity to develop responses to the correspondence that we've received and to report further on the matter. And as to that, at this juncture, while it's not time for the council's deliberation, if the members of the council have questions for staff about other possible ways to look at the fees that the council would like staff to evaluate and come back with when the staff reports further on June 15th. We've heard some from council members tonight already, but having heard public comment this evening, if there's any other questions sort of ideas that you'd like to see whether staff can develop for evaluation, this would be a time to ask staff to look into those things. Or staff will just go ahead and proceed with the information that it has, with the matters that come up both during the oral public comment tonight and the written correspondence, which was extensive, as you know, that we received prior to the meeting. Is that clear? It sure is. And then after you conclude this set of questions, as they might be tonight, then we would ask for that motion because then we don't have to re-notice the hearing.

Thank you.

There could be clarification on the... To be clear, we will send out our usual notice, but when we continue a public hearing, we want to have that motion be for the day. Right.

The deliberation is not for this evening, but we did have a question, a clarifying question regarding developer fees. So if you could provide a response to that.

Yes, the fees that were mentioned in the presentation were for To reduce those fees were for affordable housing units that were at a hundred percent and then also accessory dwelling unit So those were the fees that were recommended for reduced rates so clarifying the other fees were in the different categories was a Increase in those fees. Mm-hmm. Yeah, basically Nexus study. I

Okay, so are there any other questions? We're not deliberating this evening, but are there any other questions? Questions, not commentary.

Another question around, we had talked about if you, as Attorney Epstein mentioned, about other things to think about and consideration, and I was wondering if, would it be consideration of reduced fees for already entitled projects What would that look like? Or I think that the way it was already presented is those that have already are entitled this one apply, right? And so when would these be effective?

Thank you. I'll add that question. Any other questions? Okay. Council Member Hill.

It's building on the Vice Mayor's question. It's a confirmation that any of the 18 applications developers that have submitted SB 330 preliminary applications have effectively frozen law and fees as they were when the preliminary application was submitted. It's a request for confirmation on that.

I think that question can be answered this evening.

Confirming, that's the case. So if someone applied for a SB 330 application, those regulations and fees are to the time they had their preliminary or formal, depending on how they applied.

And can you also confirm that 18 developers have taken advantage of the SB 330 preliminary application mechanism?

I'd have to double check on that because that's a growing number that shows in, but it sounds about right. Thank you.

And there's a great webpage on the city of San Rafael that you can look at, major planning projects that will show that. One more question.

One more question, thank you. Are there any examples where fee deferrals have been done until certificate of occupancy? I can see pros and cons on that.

Maybe on that, just the question can be, what can be the timing, because Vice Mayor Kurtz asked about the phasing already, so I think that's part of the phasing.

Yeah, I think that's something we'll probably respond back to, specifically if there's other questions of that nature.

Yeah, that's around phasing. Any other questions? Okay. And I know this group's raring to deliberate, but we are gonna continue for all the reasons that staff already presented this evening. And I will remind folks that there will be a housing study session in addition, and there are lots of places and times to comment as well, especially with the continuing, if it is approved by the council to continue the hearing. So I would request a motion on that item.

I move that we continue the public hearing to June 15th, 2026 at 6 p.m. or as soon as thereafter that the matter can be heard.

Second. Moved and seconded. Roll call, please.

Council Member Hill.

Aye.

Vice Mayor Kurtz. Aye. Council Member Idan Scolati.

Aye.

Mayor Cage.

Aye. That motion carries 4-0. Thank you, Debbie. Thank you, Selena. Thank you, Director Hinkle. The next agenda item we have this evening is our San Rafael Sanitation District Separation Agreement. And I see Assistant City Manager Angela Robinson-Pinho has joined us. We'll give you a moment to get your presentation up.

All right. I'm not seeing it up on the screen. I need to do something. All right, my apologies, thank you. All right. Thank you. All right, thank you Mayor Kate and good evening members of the San Rafael community and as well as the San Rafael City Council. I'm here to provide a brief presentation on a proposed separation agreement between the city of San Rafael and the San Rafael Sanitation District. So just a little bit of background. The San Rafael Sanitation District is actually a separate entity from the city of San Rafael, but the city has historically supported it, primarily through administrative, such as HR services, fiscal services, and things of that sort. the transition is being driven by the sanitation district's decision to operate through a dedicated wastewater service model with the center central moran sanitation agency and the separation agreement is the city side framework that makes the transition orderly so in terms of the operating model today and after transition So today, as I mentioned before, is the longstanding model in which the city supports the San Rafael Sanitation District administratively and operationally. And on the right side is the post-transition model, wherein the Central Marin Sanitation Agency provides operations, the SRSD remains intact, and the city's role is limited to closeout and transition of responsibilities described in the proposed agreement. And so how to propose agreement advances the city's interests. And so it does so in four ways. Um, the first of which is again, continuity of essential services, financial clarity, reduced administrative burden and reduce legal and operational uncertainty. Approval agreement does not dissolve the district, but rather it formalizes the end of the city's administrative support rule and recognizes the district's decision to enter into an operational agreement. with CMSA, and I'll just briefly touch on some of the items on the slide. Again, around the continuity of services, covers good faith coordination, which is required to avoid service disruption, and there's a financial clarity in the agreement. You'll see some mention of regarding pension, leave, overhead, replacement, and fundabilities, responsibilities. Again, in terms of administrative burden, As I mentioned earlier, payroll, HR, digital services, and overhead ends after the effective date except for closeout. So in terms of the effective date and implementation timing, so on February 10th, 2026, the CMSA Board authorized its service agreement with San Rafael Sanitation District. On the 20th of the same month, the SRSD Board authorized, excuse me, its agreement with CMSA and so today the council is considering a separation agreement between the city and the San Rafael Sanitation District. Now there's some question about the effective date. And so the effective date, the terms of that are actually more fully described in the agreement between CMSA and SRSD. However, the SRSD separation agreement from the city references that effective date. And so there are some deliverables and triggers that are in that agreement which need to be accomplished in order to the agreement to become effective. In terms of environmental review, so the city staff has analyzed this and has determined that it's not a project under CEQA insofar as the agreement itself is primarily administrative in nature and doesn't have any physical environmental impact. Additionally, the report references the CEQA exemption under Section 15061 , which is also known as the Common Sense Exemption. which applies when it can be determined with certainty that the action will have no possibility of causing an environmental impact. And so, again, this reinforces that the separations agreement is primarily administrative rather than physical. In terms of community outreach, the agreement itself references some key items in terms of community outreach because, of course, People seeing a separation agreement might be concerned about any potential impacts to their wastewater services. And so both the city and the district will collaborate to inform residents about new service contacts and changes during the transition. There is a division of responsibility where each agency manages its own outreach. And both parties agree to maintaining public confidence through clear communication to prevent misinformation and to ensure service continuity during operational changes. In terms of fiscal impacts, the budget impact will be addressed in the fiscal year 2026-27 budget. It will be the city's responsibility for crude leave payouts under the applicable agreements, reimbursement of certain district-held replacement funds, district payment of unfunded pension liability as determined by the retirement system and administrative support reimbursement by the district through the effective date. One thing I should option that the the I would say impacted labor and bargaining groups have been notified prior to bringing this action forward to council and so as of this date staff has not received any comments from any of those bargaining groups regarding the separation agreement or a request to meet and confer. And so with that, the proposed separation agreement provides a framework for a practical transition of SRSD operations from the city supported model to CMSA. It preserves continuity of essential service, sewer service, excuse me, clarifies financial and administrative responsibilities, reducing the ongoing city burden after the effective date and creates a clear trigger for implementation once CMSA is ready to begin full operations with SRSD. And as a reminder, the action does not dissolve SRSD. The operative date is contingent on readiness and the CEQA review is administrative, excuse me, the CEQA review determined that the actions being taken are administrative and exempt under decided provisions and the budget impacts expected are to be addressed in the proposed fiscal year 2026-27 budget. And so the options today are shown on the screen, and staff's recommendation is that the council approve the separation agreement that's within your packet. And so with that, that concludes my presentation. I'm happy to answer any questions.

Thank you. I'll see if there are any questions. Council Member Hill? Yeah, go ahead.

Thank you, Assistant City Manager. I had sent this question in advance, but I wanted to make sure it was public. I had a question if LAFCO was consulted, and you'll forgive me, I can't recall every part of the initialism, so maybe you can expand it for me. Thank you.

So LAFCO stands for the Local Agency Formation Commission. And so for those of you that may not be familiar with LAFCO, LAFCOs exist in every county within the state, and they have responsibility for issues pertaining to annexations, consolidation and reorganizations of special districts, creations of new forms of government. And so in this case, I believe this was in 2023, there was consultation with by San Rafael Sanitation District staff with LAFCO about the transition, not only moving away from the city as well as moving into an agreement with CMSA and there was a determination that LAFCO approval wasn't needed because the district itself is not being dissolved and it's not being fully consolidated into CMSA. So that's why there wasn't any formal LAFCO action regarding this item at this point.

Thank you and then would you confirm or maybe it's uncertain if that this condition that we would be contemplating puts it in position that at one point the more stable condition might be to consolidate the district into?

I'll jump in. As people know, as mayor, I'm also the chair of San Rafael Sanitation District, and if you've been attending our meetings, which are in public, and we did recently pass a resolution to form a consolidation committee, and all three members of the JPA, which CMSA is part of a joint powers authority, are all passing the same resolution to take the next step to have a conversation around possible future consolidation.

Thank you, Mayor. That was a very informed response. So I'm glad to hear that. And let's see, I had one more question, which is would the board of San Rafael Sanitation District continue to be filled by members of the city council on the other side of the separation?

So again, there isn't any change that's being contemplated, and I would defer to the mayor if she would like to jump back in, into the composition of the San Rafael Sanitation District. Again, the board would remain intact, but there are terms within the CMSA SRSD agreement which speaks to governance. Unfortunately, I'm not prepared to speak on what that governance looks like off the top of my head, but there would still be an SRSD board.

And I'll just add, it'll be comprised as it currently is. So there's no changes in terms of how the board operates and how the budget is put together. The district board would still meet once a quarter and approve the budget. And then CMSA, they would be the ones that would be manifesting and doing the employee part of it. It's really, if you think about it this way, it's moving the employees of San Rafael Sanitation District from this kind of split partly with the city, partly with the district, all with under the CMSA umbrella. And so, but to answer your question, if there were to be full consolidation, which would be a very long conversation, in my comments, I'll tell you that it's taken two years to even get to tonight, but that would be possibly contemplated. But at this point, no, there's no change in the board, in our representation on the board, which is currently, by the way, myself and Council Member Bushy are the two representatives.

All right.

Thank you, Assistant City Manager Robinson-Pinon and Mayor Kate.

Council Member Yvonne Scalati.

Yes, thank you so much. And in addition to the administrative part with a lot of HR, there are some facilities that I guess we are currently using, like the canal community gardens. So can you speak a little bit about that and if there are any future risks around those?

So the separation agreement still contemplates the continuation of the canal community garden. However, there is a provision in the agreement that speaks to a future where SRS may need the space. And so the city would be asked to return it to the condition. And then that's why there's a photographing agreement to document what the condition was prior to the placement of the garden. But there aren't as far as I know, And again, I'm speaking a little bit out of turn because this is San Rafael Sanitation District decision to make. But as far as I know in the conversations that I've had with their team, there aren't any near term actions to remove the community garden at this time.

So I will say that I'm all for this, except for the canal community garden. I don't like the fact that they are mentioning if in the future they are going to need the space, I think is really valuable for our community. And I would love to have a conversation somehow if you can in the agreement to exclude that to have, you know.

Yeah. So we and and I certainly appreciate, you know, the sentiment. And so the staff was very clear about the, the, the, uh, the desire to keep the canal community garden and intact and in place. And so again, because the city doesn't own the land, uh, it's, it's very difficult to dictate, you know, um, that the garden itself wouldn't ever return back to some operational use for the sanitation district. But again, there were, In those conversations, there were no near-term, and so, you know, near-term actions to remove it. Nothing is immediately contemplated, and so to the extent that we still continue to have Sam Raffel representation on the board, I'm sure that that would be a conversation that would be had before any action would be taken as well.

Okay. Not liking that, but okay.

I'll just say comments.

OK. I don't have any questions. But I will open up public comment if you'd like to comment on this item. Now is your opportunity. I'm going to close the public comment and bring it back. And I know that my colleagues are going to comment, but I'll just start off by saying it is a milestone to have this before the council. The district started this conversation in 2023. And we started working with the consultant in 2024. The first operational agreement with CMSA was drafted in 2025. And then as you saw from the slide, it was approved by the district to go forward in February of 2026. So this is not a quick, it's a typical government agency bureaucratic, but it's a big deal. And the district, the San Rafael Sanitation District is considering the same resolution. If the council approves it this evening, the district also approves it. So there's two sides to that. And so we are hearing it, it's on our Wednesday agenda. And what else do I want to mention? As City Manager Robinson-Pinon mentioned, so this board is comprised of two San Rafael council members and one county supervisor. The land is owned by the district and it's one of those we're wearing two hats. And I'll just concur, there are no plans to acquire back this property or in their easements all over the place. I mean, this is the most tangible piece of property that also has another use, but there are easements throughout the city. And so it has, the structure itself, the physical infrastructure has worked really, really well, and the district recognizes this. The whole reason or the big underpinning reason is one to ensure that we continue to, we the district, provide top wastewater collection services and ensure that our employees, our meaning the district employees, are compensated at a level that is competitive with other sanitation employees. And by having the interface with the city, there's not clarity around that because the job structures, don't perfectly line up because we don't have sanitation engineers and et cetera within the city. So there are lots of additionally complex reasons, which I'm happy to go on about because I'm really excited about being at this point, but I will stop there and just put a bow on the comment about the consolidation. I think that's really interesting. It did take Sausalito, they have done a consolidation and I think it took them 10 years. So I'm not gonna get that excited. That was a full consolidation that they recently did. So the operation agreement would be a first step towards combining in terms of a horizontal agreement like assimilation. So I just wanted to jump in and say that. But I would also welcome to hear what your comments are, which I can share with the district as well. Vice Mayor.

Great, thank you. Looking at something else, just coincidentally, I was looking at the grand jury reports and I ran into this grand jury report that was done in 2018 and then I went down the rabbit hole with that. There's a lot in that report. I appreciate this work. The staff report was fairly clear. Um, and I know there's so much more behind that staff report to get to this day. Um, so I really appreciate it. I do see this as a first step, um, and in a bigger conversation. And I think that, um, I appreciate that this is taking that one step forward. So thank you.

Thank you, Council Member Yarenzi-Gulati.

Yes, also appreciate all the work and I know it takes a village, I mean, to get to all the organizations. I actually will be 100% yes, except for that detail and I don't know why it is included on this consolidation. I know that there's not a plan to do anything with that space, that it might be in the future, but I feel very keen on protecting what we currently have and not have the possibility of I mean, it is already theirs, but I think I don't see why it is included on this agreement. So I'm afraid I'm going to vote no on the consolidation just because of this point.

Thank you, and it's actually an operational agreement, not a consolidation, just to be clear. There's a difference. It's an operational, it has to do with the, it's an agreement around the operations of the agencies versus a consolidation of the agencies.

Right, so that's the part that I'm not sure why they included this part on the facilities, you know, but.

Maybe you could further another way to phrase it would be, what would it take to permanently enshrine this in the city and I would imagine it would be the city purchasing the land from the district. So maybe that would be my sense is the only way but that's outside of the purview of the district. I mean that would be the city having to purchase the land.

Yeah. Is there a way to not include these in the agreement? Because this is operational for administration, you know, more than what it is the facility, so.

I think the confusion is the district owns the land, not the city. No, I understand that. So you would be making a unilateral decision about another entity in their property, and that's not... I don't think that there's any precedence for doing that type of action.

Oh, Andrea's coming down.

Assistant City Attorney Vitha Schwarz here. Thank you.

Thank you, Mayor Cate. So as Mayor Cate and Assistant City Manager noted, the property is owned by SRSD. And so if we were to permanently acquire property rights for the community garden, we would have to go through a process of appraising the property and then purchasing the property interests from the district. That is its own process, and the district would have to be willing to sell it as well, which I don't. I can speak for the district, whether they're interested in that.

So I completely understand that we don't own the land. I'm just not understanding why they have decided to add these to this agreement.

So the parties have had, as somebody who came in relatively new to this, there's a lot of history between the parties. And so when we go through this separation proceeding, we can't take for granted what the parties have done, just a matter of practice in years past. And as a matter of practice, the district has allowed the city to have this community garden. But if we don't put it in the agreement, then the district will have the right to remove it without any sort of notice or input from the city. So this is a way to actually preserve the garden going forward post separation. Right.

Unless they need it.

They have, but you know, the agencies as staff has indicated negotiations, we are public agencies. We do cooperate with one another because we serve the same constituents. Right? No, I, I understand. Thank you. Okay.

Thank you for that clarification. Council member Hill.

Thank you, Mayor Kate, and thank you for providing testimony for my questions. And thank you, Assistant City Manager Robinson-Pinon, for the report. As the mayor has testified, this has been an ongoing matter for many years to get to this point. And this is one of those matters that is largely invisible to the community, not because it's behind closed doors, but because these things happen in over multiple years. This on face value is the right thing to do to ensure that assets that are not the major for our staff goes to ensure that the people and the assets are being properly managed. And as to Council Member Yarns-Gulati's concerns, I share that concern and I do see this though as an agreement that has to inventory assets including land and property that has to be contemplated. If there is a moment in the future where it makes sense that there is a concern about what that land might be designated for at that point, I think whichever council is serving at that time, hopefully it's not ours, would contemplate the value and the acquisition if that time ever comes. So I will be moving forward with approving the agreement.

Mayor, can I just ask like a clarification? Of course. Thank you. So I'm reading here in the event that the city no longer desires to continue the canal community gardens so that can you please clarify that that is what it says that is if the city doesn't want to continue versus the agency deciding that they need the space i'm just apologies for just i'm sorry flipping to the page page is page number two um okay thank you so much yeah um so

So yes, so it says, so I'm looking under licenses for paragraph A, and it says in the event the city no longer desires to continue, as you mentioned, the city will remove within one month, and so you are correct.

So I'm just trying to clarify that is in the event that the city no longer desires to continue versus?

Correct, you're correct. It is, and the license will terminate after the removal of the items, and the city would be obligated to restore the lot as described.

Okay, great, thank you. Thank you and I will remind my council colleagues that Councilman Bushy has served for a long time but she won't be serving on the district after November and one of the three of you is more than welcome to join the board and that's part of the conversation that we have. So just putting that out there. Thank you, I've already made my comments. I would entertain a motion on this item please.

Well I'm actually happy to move. To adopt a resolution authorizing the mayor to execute a separation agreement between the City of San Rafael and the San Rafael Sanitation District, establishing terms and conditions related to the transition of district operations from city-supported staffing and administrative services to the Central Marine Sanitation Agency, CMSA. Second.

Second.

Moved and seconded.

Roll call, please.

Council Member Hill. Aye. Vice Mayor Kurtz. Aye. Council Member Yadanz-Gulati. Aye. Mayor Kate.

Aye. That motion carries 4-0. Thank you all. Thank you, Assistant City Manager Robinson-Pinon. And the next item this evening is the preliminary citywide proposed budget for fiscal year 2026 to 2027.

All right. Thank you, Madam Mayor, members of the council. So as noted, this is the presentation of the proposed budget for fiscal year 26-27. There's no formal action associated with this agenda item, but any feedback or direction from the council will inform finalizing the proposed budget that is scheduled to come back to council for reasons that we will touch on. at the meeting of June 15th for formal adoption. Just a little housekeeping. We will be covering here the proposed budget that has several components to it. The presentation will summarize and add maybe a little bit of additional information to the information that's provided in the staff report. Included in this agenda item will also be a presentation aided by our ABLE Public Works staff on the proposed capital improvement program budget, and then we'll kind of bring it back for a wrap-up. So we'll be tag teaming slightly a little bit. i think i just summarized the uh the outline there is a lot to cover i will try to hit the highlights but not um dive into too much detail unless the council wishes to first just a couple of information in the staff report regarding the third quarter results for this fiscal year because as you can imagine preparing for and planning for next year's budget and beyond starts with understanding of where we're at presently and what our updated projections are through the end of the fiscal year. We'll also talk about the baseline budget and update to the baseline budget that We prepared for next fiscal year, and this is the kind of forecast that we had projected that indicated some fiscal challenges, particularly in the general fund going forward, so we're gonna update the problem statement. We'll summarize at a fairly high level the overall proposed budget, but really focus on the budget recommendations that are contemplated in the 26-27 budget to include both the balancing measures proposed to bring the budget to be balanced and well as address maintaining our reserves, et cetera, but also providing some budget flexibility to address some of the priority funding needs that are front and center within the limited resources that we have. There's a summary of some staffing changes that go along with it. We'll talk about the CIP and then a little bit of what comes next on that. So I'll just quickly touch on the information that, again, is in the staff report. At a very high level, we just provided updates on our all funds revenues expenditures through the third quarter, which was the accounting period ending March 31st, 2026. This is useful information. It doesn't shed a whole lot of light. I've said before, when we look at the citywide budget and the all funds budget, it's a little bit of a misnomer because it's really about 80 different budgets that we just add up and look at the all fund expenditures. But the revenues are generally tracking within budget, at least for our operating revenues. Revenues associated with grants and capital funds tend to have different kind of cash flow so that they can typically lag the expenditures. And as is the case with expenditures, the operating expenditures, generally tracking within budget with the exception of some of our personnel costs that we've touched on and we'll provide an update here in this presentation. And then the non-personnel budgets, operating budgets, tracking within budget. And then, again, capital projects and one-time expenditures we'll tend to have more of an ebb and flow. But what we're reporting here is both the expenditure and the encumbrance of funds associated with contracts and purchase orders have been executed. So again, the bottom line is our revenues are just under 67% through the third quarter and expenditures on a citywide basis at about 63% of our budget at 146.5 million. I do want to focus a little bit on the general fund, and this is kind of a two-part chart. What we're sharing at the top of this chart is the general fund forecast that was presented with the council's mid-year report, which actually was presented, I believe, in early March. and we were projecting revenues to be tracking slightly above budget at 107 million, which is about 400,000 over budget. The expenditures at that time were projected to actually be tracking at about 1.7 million over budget, and that was a combination of our personnel costs being actually about 2.7 million over budget in the general fund, offset by non-personnel expenditures, expected to end the year about a million dollars under budget. This chart updates the results through the third quarter. at the bottom of the chart where our revenues in the general fund were about 63,850,000 and expenditures 86.6 million. What's noteworthy here and it goes directly into the thinking in the development of the budget is that our expenditures are continued to be tracking pretty much in line with what we had been projecting. The good news is that the revenues have been In fact, we continue to see really strong results primarily in our sales tax receipts through the third quarter. So this projection actually bumps up our general fund revenue projection for this current fiscal year. by about $2 million in compared to what we had seen in the mid-year report. The end result, if these projections pan out, is it will have a slight increase in our general fund fund balance, albeit under $1 million, so that is certainly better than what we were projecting at mid-year. But again, I'll remind the council that's significantly less than the amount of money that we have been building into our general fund reserves, which is another example of just a general tightening of our overall general fund outlook. So transitioning just to the proposed budget summary, this is a chart that summarizes information that is in exhibit one of the staff report, and it just shows the sources, which is revenues and transfers in in comparison to the expenditures and transfers out the uses. I'll just say that on a citywide total basis, the all funds proposed budget for 2627 near the bottom right totals a total of 209.6 million dollars in appropriations and we note on this chart and that would be the all funds appropriation that if the budget was before you this evening for approval we'd be seeking we do note that included in the all funds expenditure budget are Line items are funds that we actually consider sort of dual appropriation. So this is when the money's being transferred from one fund to another fund for expenditure. That appropriation shows up in both funds. We have internal service funds where we're spending money in one fund and charging other departments. Again, roughly $35.5 million of internal service fund revenue expenditures. They will, by definition, net to zero between revenue expenditures, but it brings the overall true expenditure, kind of one-time expenditure of funds of about $176.1 million in terms of overall magnitude. The next slide also provides a summary of the 26-27 proposed budget. This time we're looking at the appropriations in relation to the adopted budget. For the current fiscal year, we'll touch on a couple of the main themes in here. Bottom line is that the general fund shows here as relatively flat at 113.73 million compared to last year, 113.24. The general plan has the exact same budget. Our special revenue grant and trust funds at 52.3 million. enterprise fund our single enterprise fund which is the parking services fund also staying relatively flat at 4.7 million we do see a increase in our internal service funds from 26 to 33.3 million but as is noted in the staff report and we'll touch on it this also reflects actually a change in how the 26-27 budget is being proposed as it relates to two particular areas, and that is our building maintenance and our fleet maintenance, which have historically just been general funded programs In our public works department In most jurisdictions, I would argue best practice is building maintenance and fleet maintenance It's typically an internal service fund where we're providing services to the operating departments that use those services so that this Increase the internal service funds is largely attributable to that And we'll talk about some of the impacts that it has intended and unintended as we go through this But it's also going to help us going forward to ensure that when we're setting fees and rates that we're actually capturing the full cost of these operations. And then our capital projects funds at $2.7 million. There were four or five slides that got to this bottom line point and I trimmed it down a little bit. We did review this with the finance subcommittee as recently I think last week. So the context for this is when we did the both the mid-year budget and actually concurrent with that we did sort of a fiscal sustainability presentation for the council and what we were showing is a the emergence of the structural deficit within the general fund going into 26 27 so i dated these roughly mid-february so the baseline structural deficit at that time was about two million dollars growing by just under a million dollars a year in the out years. We also, at that time, sort of anticipated that there were a number of factors, but two in particular, that likely were gonna add additional budget pressures to the budget beginning next fiscal year, one of which we've, we actually talked about them recently, the Maroonwood Fire Agreement, and also the suspension of the vehicle license franchise fee revenues. And so that's what led to a baseline projection at that time of about $3.4 million general fund structural deficit. One of the things that I think we're pleased to report is that having updated our revenue assumptions and re-established the baseline budget for 26-27, that structural deficit, at least as presented here, has been trimmed down to a million dollars next year. However, it does continue to grow in the out years. So it definitely helps in what needs to happen to balance our upcoming budget, but it doesn't completely take care of issues that we are gonna continue to be working on. And on the next slide, I'm gonna just summarize some of the main components of essentially the reduction of a million dollars in the baseline. The first one was a little bit of an unexpected, we'll call it a surprise, but when the Marin County Employee Retirements Association provided us with the retirement contribution rates for next year, our baseline assumption had heretofore contemplated that the contribution rates would be essentially remain flat. We actually saw a reduction in the contribution rates, which ends up having a favorable impact of about $1.2 million to the general fund. I just want to note for transparency that that doesn't mean our retirement costs are going down by $1.2 million. That just means that because the payroll has been growing and investment returns and some of the other factors that go into the valuation, the increase in the retirement costs is $1.2 million less than what we had built into the original baseline. The other adjustments that we made in the baseline is these two areas of utility adjustments and some of the intergovernmental charges. These are both areas where in past years, to address increasing costs in these areas. The budget has really contemplated one-time funding year after year to just sort of plug it. And one of the philosophies going into this budget is to actually have the baseline accurately reflect what our ongoing costs are and then solve that problem as opposed to sort of sweep that problem a little bit under the rug. So we did increase the baseline budget for utilities, primarily facilities, street lights. It includes water, sewer, which are going up significantly faster than our revenue growth is going. So there's about $525,000 of utility adjustment increases and another $75,000 to cover the intergovernmental charges that come from some of these other agencies and JPAs that we have agreements with who just tell us what the charge is going to be for the following year. The last one on here does speak to the conversion of the internal service funds. The good news is that when we took the two programs, building maintenance and fleet maintenance, and converted them to an internal service fund, and then through methodology in terms of usage and what it actually costs to maintain facilities and maintain the fleet. The good news is it ended up essentially transferring or reducing the cost to the general fund of about $400,000. The flip side is that this $400,000 in costs ended up impacting other special revenue and other funds. So there's a little bit of a policy call in there, but at least from a straight budget methodology standpoint, it more accurately reflects the costs in the programs and in the funds that are supporting those programs. Next slide, please. So the summary for the general fund budget, this chart attempts to do several things. I'm hoping it can be legible from the dais. It does show the adopted 25-26 budget. It shows the updated, refined baseline for 26-27, and then it shows the about $1.75 million in budget balancing measures, which is a combination of some favorable revenue impacts and transfers into the general fund, and a little over a million dollars of baseline reductions in the general fund. Those balancing measures do two things. They would address the baseline funding gap and provide funding for some of the funding augmentations, the recurring, ongoing funding augmentations that we are proposing in this budget. And so when you... account for in the funding augmentation column, and we'll go through these in a little more detail, 4.1 million that is, again, money that we're proposing, one-time money from the general fund to be transferred to other funds, such as the liability fund and the capital fund. We basically end up with a balanced budget with basically about $80,000 to spare. So it's just balanced sort of right on the dime, literally. So let's go to the next slide where we'll go through quickly There are some, so this summarizes, yes, the funding recommendations. So the first one actually is a net neutral, but we do wanna call out that in the proposal, staff is proposing to reallocate $200,000 that has historically been in the budget in contract services within the general fund for our downtown streets team contract. That contract is terminated. I believe Downtown Street Teams is no longer a viable entity. Staff analyzed sort of this, and the recommendation is effectively to reprogram those dollars to essentially bring the same work in-house, which contemplates, among other things, hiring two park maintenance workers, but this would fund a program that would be essentially dedicated to doing regular maintenance and cleanup in the downtown. well as to continue support some of our encampment cleanups that that occur but I think we're kind of excited to put this forward because it would basically provide funding to a little TLC if you will in our in our downtown through regular and clean up and staff can speak more to that if there's some questions on it. The next one is the Marinwood Shared Services Agreement that was discussed I believe at our last council meeting. This number is both the net of the roughly $350,000 in payment to Marinwood from the city of San Rafael and also the loss or foregoing a little over 110 000 which the district marinwood community services district is currently paying to the city of san rafael so that nets to the 460. the other one is a proposal that is also related to the fire department, less related to the Marinwood Services Agreement, but what this contemplates is adding three firefighter paramedics position to the authorized staffing within the fire department. specifically to serve as the staffing above and beyond the minimum staffing required to staff all our apparatus 24-7 and basically provide some relief literally to the need to ensure that we're maintaining minimum daily staffing Exclusively through overtime so anytime a firefighter paramedic or engineer captain line staff is either sick on vacation in training injury parental leave We are required to backfill via overtime So that can work because over time arguably is a little bit in the current environment, a little bit cheaper than a fully burdened cost of a position. But over time it has some significant consequences and I would argue it's contributing to not only the staff working inordinate amount of extra hours, but also we're starting to see a steep increase in injuries, work-related injuries and claims, and so while this isn't the only The factor behind that, of course, this contemplates basically funding the positions, and we're only showing the $99,000 in cost because that's the incremental marginal difference between a fully burdened firefighter paramedic and the time and a half, the overtime rate. If supported by the council, this will certainly help. It doesn't reduce the overtime cost, it just shifts it to base pay, but we're hopeful that it'll have, start to have a positive impact in terms of managing some of the reasons why we have to expend the level of overtime. And so I should also note that this represents the general fund share because the all of those line positions are funded through a combination of the general fund and the paramedic tax, so there is an additional cost component in the paramedic fund to this recommendation. The other ones are, again, some organizational initiatives to support kind of our internal work that we're doing around the organizational culture work and our Together San Rafael initiative, again, IT'S NOT NECESSARILY INCREASING THE FUNDING BUT WE'VE BEEN DOING THIS WITH ONE-TIME FUNDING AND AT THE END OF THE YEAR KIND OF LEARNING OUT. SO THIS SORT OF PUTS IN FUNDING THAT WE CAN PLAN FOR AND PROGRAM. AND THE LAST ONE I'LL ADD IS The Economic Development Subcommittee has heard a series of presentations that will be coming to the Council here about a special event sponsorship program that will more formalize how we approach supporting special events of different sizes and nature. Typically, when we are sponsoring events or waiving fees for these events, those costs are sort of absorbed by the departments that are needing to, you know, provide the services. This essentially, and I think I checked with staff, we've probably spent about $80,000 to $90,000 this year, so arguably this doesn't Fully fund even our current service level, but it's the recommendation is born out of the idea that we should Start to set aside a budget for this and then as we bring the special events policy framework forward to the council and then see how it lays out we can down the road adjust the amount of funding in there but it it also I think would facilitate kind of having some discussions about these events and the level of city sponsorship at the front end of the planning so you can map out for the quarter the half or the year as opposed to just take these as they come and really it's first come first serve and that's not ideal so now I'm going to switch to the I GUESS THE ONE-TIME FUNDING ALLOCATIONS WHICH WE TOUCHED ON PREVIOUSLY. SO WHAT IS CONTEMPLATED IN THE GENERAL FUND AT THE TOP OF THIS LIST IS $4.1 MILLION IN ONE-TIME GENERAL FUND APPROPRIATIONS. AGAIN, COMING FROM OUR available fund balance and the two main ones that we have been doing consistently over the last several years is 1.6 million dollars recommended to be transferred to the liability fund which is where all of our insurance and claims are paid out of, and it doesn't have a funding source. The only funding source for the liability fund is the transfers from the general fund, and I think this is a little bit less than we transferred last year, but this is an area that I think we're gonna need to have some additional conversations on, starting with the finance subcommittee, just given the trend line on the liability experience with the city. The capital fund transfer also is the ability to put some additional dollars in areas where we have historically been underfunded. So you'll see a bit later in our general fund reserve policy, it lays out that should we end the year with funds in excess of our reserve requirement, that our liabilities and deferred maintenance and capital expenditures are top of that list, particularly because this is one-time funding and not really appropriate to fund additional programs. Also, as it relates to the interim shelter program, we'll actually be reviewing this budget at tomorrow's homeless subcommittee, so there'll be a little bit more explanation there before this comes back to Council for action. But what is contemplated here is consistent with the grant agreement that the city has with Marin County. We're primarily using grant funding, and right now the ERF3 funding, to support both the operations of the sanction encampment, and that's envisioned to also be funding the operations of the 350 Meridel Shelter Once that opens and in that grant agreement it also stipulates that for fiscal year 26 27 When the ERF 3 funds are exhausted the city and county will contribute a equally in a 50-50 towards the operating costs for this coming fiscal year. And this contemplates in this budget both the city and the county allocating a million dollars between the two to cover operations through this fiscal year. Not really germane to the 26-27 budget, but because it's, we'll be talking about it tomorrow. You know, funding of the ongoing operation that sheltered beyond 26-27 is still one of the sort of funding needs. However, we are making, I think, good progress with the county in preparing the year F5 grant application and things I think are, at least we're optimistic and things are looking favorable, that that would be just a key component and would actually reduce the amount that has been contemplated needing to be raised through private philanthropy and other donations in order to do that. But this would get us through the 26-27, essentially year one of the interim shelter project. We're also allocating from the building maintenance fund $200,000 specifically to address ADA improvements to city facilities and specifically I think primarily library facilities among others. I would note that ADA is another area that the city arguably has some catch up to do to ensure that we are investing in ensuring that all of our facilities and all of our programs are accessible to constituents with all different abilities. And so this is one that we're calling out, but I will note that there's also funding as part of our street projects to do ADA work where appropriate on our street projects. There's funding also included for ADA improvements related to our sidewalk maintenance plan, but this is just a specific allocation to deal with city facilities. And we'll be putting a little bit more focus on prioritizing that as we work to update the ADA transition plan for the city. The last one on this list is a one-time allocation from the Fire Equipment Replacement Fund that represents the match that would be required to take advantage of a federal grant that we were successful in receiving specifically to replace the fire boat that is nearing the end of its useful life. This was one, actually this request came in last fiscal year and was not brought forward to the council to include in the budget. I would just say on this that what has made it possible to make this recommendation is YOU MAY RECALL THE CITY WAS SUCCESSFUL AND THANKS TO OUR FIRE DEPARTMENT IN RECEIVING A AFG AND ASSISTANCE TO FIREFIRE GRANT FOR THE SCBA'S SELF-CONTAINED BREATHING APPARATUS WHICH WERE DUE FOR REPLACEMENT. I THINK THAT WAS ON THE ORDER OF $600,000 MORE OR LESS. The funding in the equipment fund that had been set aside for that has been essentially freed up. And there's a significant lead time in being able to procure a vessel like this. And so if approved by the council, the city would be in a position to start the process again, contingent on what the final bids are and that it can all work within the grant, but this at least gets us to the next step in the procurement process for that important piece of equipment. So this brings us to the budget balancing measures totaling 1.75 million that again closes the baseline budget gap and provides the funding to support the recommendations that I just walked through. The first category are listed as citywide budget balancing measures. So these are opportunities to reduce funding within the general fund budget or provide additional support of the general fund that don't quite get into departmental expenditure and programmatic budgets. The first one, again, we covered these briefly at the Finance Subcommittee and we can provide more information on it. The first one is simply stated, the city over a decade ago established a trust fund to pre-fund its other post-employment benefits, which is OPEB, specifically retiree medical benefits that have been committed to in this case both retirees and current employees that are eligible for that benefit although even though we've established the trust fund there is I would say not insignificant. We're still only about 50, 60% funded on this, but there is fund in that trust fund. That said, the city has continued to budget for this benefit on a pay as you go basis, which is sort of the antithesis of why you set up a trust fund. So this merely contemplates going forward that we would budget not based on the Cash requirement to pay for the benefits, but based on the actuarial determined contribution rate so This is a little bit stale because these actuarial reports are done every two years and in the last one that was done and we're still reviewing a draft of the updated one but two years ago and The actuarial report suggested that what we're budgeting on an annual basis is about a half million dollars more than we would be needing to budget if we transitioned to pre-funding. So we are going to take advantage of that and use the trust fund to help fund the benefits that reduces our general fund outlay from current revenues by about a half million dollars. We're also, because we have been, as you saw earlier, making some funding augmentations to the baseline to address some areas that have been chronically underfunded and used by one time. We do maintain an unallocated contingency in the general fund and so we're gonna reduce that contingency because we're actually dealing with some of the issues that we've been using that contingency fund for. So that's a $250,000 reduction. And this last one, though I think the fire department would like to take credit for it, we are putting it in the citywide. The MWPA, the Marin Wildfire Prevention Agency and Measure C, where the city receives significant funding to support these efforts, both our local efforts as well as manage some of the agency-wide efforts. Measure C does allow to charge administrative overhead costs and so I would argue that this is a conservative estimate and we are gonna go ahead and take advantage of that and recover the overhead costs that are associated with managing that program in the same proportion that we're doing it for any other special revenue fund and enterprise fund that we cover. The next category, the $820,000, we broke them out here in terms of about $340,000 in reductions in contract services, primarily in the city manager's office, community economic development on a small contribution from the city clerk's office. There are two positions that are currently vacant that are proposed to be reduced from the budget and that along with about $50,000 of temp hours. That's the $393,000 in personnel and salary savings. I would just say that the position within the finance department, as much as it pains me, is a fixed term position that has been vacant since before I came here as your finance director. We currently do not have any immediate plans to fill that position, and this is not the year to be carrying a position that has not been needed for some time. We're also reducing a vacant position in the city manager's office and we're working with our office and others to see how we can absorb that work within our existing, but we believe that we have capacity to do that. So these really come with minimal to no impacts on services and so that's why they're presented here for your consideration. The last category is the contribution from Public Works Department essentially to offload some general fund costs. And I'm saying this shows $140,000.

I think that should be $90,000 because we reduced one of those.

We've been making some really good progress in ensuring that a lot of the work in our community and economic development department associated with these projects that are coming in for which we're requiring developer deposits to reimburse for those costs are being covered. This basically contemplates a small, ability for Public Works that does do work associated with reviewing and processing development applications to also be included in the cost recovery from developer deposits. And then a small item, well, it's small in the scheme of things, but it's significant. Our sign shop that's operated out of Department of Public Works is also, I believe, 100%, if not primarily general fund supported, so this would essentially transfer some of the costs to our gas tax streets and roads fund for work that they're doing associated with our streets projects. So all told, this gets us to that $1.75 million of balancing measures I shared with the subcommittee that, I'll just say Council Member Hill had a great question, which is where do these proposals come from? I would just note that at the start of the budget process and looking at not just 26, 27, but in the out years, We asked departments to submit proposals to reduce up to, I think, 3% of their general fund budget, which is about 2.6, $2.7 million to just come up with a list, and then we added some of the city-wide measures. So these really came from that exercise. So there are other proposals that were made that arguably would have more direct impact on our ability to maintain current services. The good news is As contemplated, we don't need to dip further into that list, but I just want to be clear that that list is going to live on as we continue to work through not only some short-term budget challenges, but also looking for additional budget flexibility to deal with other priority needs as they come up. That's all I'll say about that. Okay, so I'll just wrap up here before a quick pivot to the capital plan that, as proposed, the budget proposal would still maintain through 26-27 our 15% general fund reserve that was established through the updated reserve policy going into the 24-25 fiscal year. Just a reminder that that reserve has three components. There's the 10% essentially emergency contingency reserve, which is just under 11 million. And again, this is in our fund balance. Through that policy update, we also added an additional 5% for economic uncertainty. So that's the 15% general. And the difference is simply that the 5%, 4.5 million roughly, is really there to buffer against what is going to happen, which is the volatility in our revenue projections. So while the sales tax has been performing well and it's helped us also, we're not building a lot of growth in sales tax, but we're hoping to maintain it should sales tax, property tax, business license, hotel tax fall short. We have the ability to absorb the cyclical nature of some of the revenues through economic cycles without having to do immediate adjustments to the budget. Although the policy does contemplate that if there is a year when we need to dip into those reserves, we have to come up with a plan to restore the reserves over the next couple of fiscal years. And then we do maintain an additional million dollar capital reserve. And as noted previously, our policy does stipulate that when we do have funds available in excess of these reserve levels, the priorities per policy will be the unfunded liabilities and deferred maintenance, which is basically all we're proposing at this point, as opposed to transfers to other funds and capital projects. That's our reserve level. I think the next slide just shows the same information in numbers in terms of our beginning fund balance, revenues, expenses, ending fund balance, and reserve status. I will say that at the bottom of the slide, we have been using the assigned fund balances for these one-time transfers, and we're not going to be able to do that at the same level that we've been doing. But if it wasn't one-time money, we'd be building it into other areas of the budget. And I think with that, yeah, the last piece on that, no, please keep going, is the staffing changes. They're listed in the staff report. There's, I believe, exhibit four of the staff report lays out the staffing plan, which I should note, contemplates actually a, net increase of 3.4 positions for a total of 419. However, within the general fund, again, we have the park maintenance worker positions we talked about a few slides ago. We're actually gonna be removing two fixed-term positions, so there will be no net FTE. Increase with that proposal we have the finance position city manager's office Positions and under funding augmentations again primarily the firefighter positions we talked about we're also supporting a request from the fire department to add a fixed term position also to support the wildfire prevention and for two reasons, one is to keep the work going. We also have some staff that I believe is scheduled to have some leave next year, so this will help continuity of services. The other one that is kind of a late addition that staff can speak to is I think the Glenwood, the school district has requested essentially to expand the capacity of our childcare program, I believe at the Glenwood Elementary School. So this contemplates two instructors, well, three instructors, different classifications, again, fully funded by the revenues. So this is a childcare fund-supported adjustment. So that highlights the personnel changes. So with that, I hope I'm getting to the capital budget summary, and I'm gonna turn it over to Gray, and I should just ask if it's okay from the council if you wanna cover the questions and comments at the end, and we can cover everything so we can get to the end of the presentation. Thank you.

Thank you very much. Gray Melgaard, Senior Civil, Department of Public Works. If you will give me a moment just to switch our slide. There we go. All right, so this is the proposed 26-27 capital improvement program.

Oh, no. I messed up.

just switch it there you go yeah thank you technology um i just want to acknowledge that i am not usually the person who would be presenting this to you that belongs to our city engineer joanna cocke who is out on family leave we look forward to her return but i'm very grateful for all the work that she did prior to leaving us and again look forward to her return and joining us again so uh proposed fiscal year 2627 capital improvement program Okay, so presentation outline, talk about the capital improvement program, the CIP, the CIP planning process, give an overview of the CIP, including current fiscal year, fiscal year 25, 26 accomplishments, as well as the fiscal year 26, 27, quote unquote, year one CIP plan. Go for a little recap and then the future of the CIP and what next steps are available. So a little bit about the Capital Improvement Program. It is a three-year planning tool that the city uses to identify programs and projects the city intends to complete and or start over the course of the upcoming fiscal year. It identifies those projects in one of our four categories, buildings, facilities, parks, storm drains, or transportation. It gives the funding sources and the rough order of magnitude cost estimates associated with those projects and programs. So the approval of the quote-unquote year one is included, the appropriations are included with the adoption of the city's annual budget. So in the CIP planning process, there's a lot to consider. These are just a few of the highlights. Emerging priorities, active new projects that are coming up, funding sources and availability, which we've heard can vary on a year-to-year basis, and then additionally staff availability and capacity. So here's some ranking criteria. So these are the criteria we use when we are scoring projects to enter into the CIP. We have four categories, health, safety, liability, time-constrained funding. And that really is just when we have projects that have grant funding or have limitations on how long we have funding available to us, that kind of dictates where that ranks. Functionality and then a priority initiative, how that project or program aligns with the city's adopted goals and objectives. So the CIP funding in year one has 10 fund accounts identified. We have our pretty typical 205 stormwater fund, 206 gas tax. We also have the 420 essential facilities fund and the ongoing 430 measured P fund. So here's the chart to rule them all. The proposed CIP budget is at $19.4 million. Of that, we are looking at $5.1 million in annual programs and $14.4 million in projects. I will note that we have grant funding proposed in the CIP that totals to about $6.5 million, roughly 32% of those projects and programs. Over on the right, you'll see the categories, how they break down 38% in buildings facilities, 6% to our parks, 22 to storm drain, and then 34 to transportation related projects. So here's just a snapshot of the annual programs. The city has six annual programs that it currently maintains. The associated fund and the proposed fiscal year 26-27. So our bridge maintenance program, our city-led sidewalk repair, and the ADA improvements programs, which interim city manager referenced earlier. We have our corrugated metal pipe repair placement program, the pavement management program, public hillside stability, and the road safety implementation program. And I will just take a note that all these annual programs are slightly up from last year with the exception of the pavement management program in terms of funding. So jumping into buildings and facilities, so the city operates roughly 56 buildings and facilities across our network. These include city hall, libraries, parking lots, garages, child care, and much, much more. Just taking note that we do have two projects that are still pending completion this fiscal year. So that's the Pickleweed Branch Library and the city hall building envelope maintenance upgrades and painting minor efforts that our operations team is taking care of. So here's 26, 27 for buildings and facilities. The projects are listed there on the right with their fund prior year appropriations just to draw attention to if this is an ongoing project that has already seen appropriations from council and then the proposed fiscal year 26, 27 appropriations list. So we're at about 7.3 for buildings. Funding sources include the 611 building maintenance fund, Measure P, capital improvements and a little bit of gas tax. Also on all subsequent slides, when you see the slash G under the fund category, that denotes a proportion of that being grant funded. So just some highlights, so in 26, 25, 26, buildings facilities projects, we completed the downtown library project, the electronic sign replacement for the public safety center, the electrical vehicle charging installations will be complete by the end of the fiscal year, I'm very hopeful in having that on this slide, as well as some A.J. Borough Community Center upgrades, Fire Station 56 as well. Couple of projects that we are rolling over, just they're continuing on from this fiscal year into the next. AJ Borough, HVAC and roof repair, Pickleweed Preschool Portables, City Hall Layout Assessment. Just want to take note that these are continuing on. And then the upcoming projects. So we have our ADA transition plan, Tara Linda Pool, downtown library conversation, and then Fulker Community Center. All these kind of come together in the upcoming projects that are new as of this proposed fiscal year. Moving on to parks, so parks infrastructure and facilities. So this is playgrounds, restrooms, recreation equipment. So we're right at $1.1 million. We again have some grant funding and as funding sources primarily split between 241 Park Measure A and 401 Capital Improvement. So some completed projects, Boyd Park playground equipment got replaced, interim playground equipment got replaced, Peacock Gap, and then the Pickleweed Park enhancement and field renovation project was completed. A couple of projects rolling over, Peacock Gap, tennis court resurfacing, the Pickleweed Park enhancement, just the restroom building, not the rest of the park, and then the welcome gateways. Some upcoming projects, Boyd Park water system repair, the beach wall, seawall assessment, neighborhood park feasibility study for Montecito, and the Mahone Creek path enhancement. So these are upcoming new in this CIP. Onto storm drain, split primarily between 205, a little bit, and 236 for the Loch Lomond District. Again, grants are denoted by that G. You'll see primarily 98% is grant funded this year, so that is primarily going to our large trash capture device projects. Completed projects this year. We have our large trash capture feasibility study and then the 2526 corrugated metal pipe replacement annual program Rollover projects we've got a lot of the large trash capture devices. That's a mixed stock requirement So all those different locations as well as ongoing work for the San Quentin pump station reconstruction annual the citywide storm drain plan and then some environmental compliance and permitting citywide and Upcoming projects, Loch Lomond Community Facility District, CFD number 10. It's a basin safety improvement. This came at the request of some of our operations groups. And then the San Quentin Pump Station, when it is complete, move into a post-construction monitoring phase. I also just want to, so as part of our annual programs, one of them falls into the stormwater category, so I wanted to take a moment for that. Really the focus of this annual program is to prioritize the replacement of existing corrugated metal pipe facilities across the city. So here are some photos. of some of the replacements that happened this year. Ongoing work continues with the identification of those facilities as part of our storm drain plan across the city and repair and replacement would be considered with those annual program. And then the transportation, so primarily split between gas tax and grants. Gas tax does have a number of different funding sources. Highway users tax accounts, the RMRA road maintenance and rehabilitation account, and then also the Transportation Authority Marin TAM Measure AA and Measure B. So completed projects, Francisco Boulevard East mid-block crossing, that will be done by the end of the fiscal year. We also did some additional backup battery installations and replacements across the city. And then we have some upcoming projects that are likely to be completed by the end of the fiscal year. So that's Lincoln Avenue Safety, Wilson Court in Brookdale, and then the 5th and Avenue in California intersection improvements. Rollover projects, they are here as well. So citywide bicycle and pedestrian plan update that is continuing as well as a number of just safety improvement projects, Lincoln Avenue, working with PG&E on some utility undergrounding projects as well. You'll also see the canal active transportation enhancement project here and the San Rafael Canal Crossing and Boat Yard Park project. So new projects proposed in the CIP include the Canal Neighborhood ADA pathways. This is the... completely blanking on the name of the path right across from Pickleweed Park. No, the Ba Vista Trail. Thank you. I knew it would come to me. So some minor ADA improvements there to help reduce some flooding. Lincoln Avenue is getting some preventative maintenance, the bridge there, and then 4th Street, West Crescent, as well as the north-south Greenway gap closure improvement project. So jumping back actually to some of our annual programs that fall under transportation, so we have the city-led sidewalk repair ADA improvements. This is focusing really on concrete shaving to reduce those slips you might see on some of the sidewalks. The Park Street and Bell Avenue Pedestrian Enhancement Project, which actually is a grant-funded project, as well as some curb ramp replacements throughout the city. PMP management some goals for as we head into next year establish the five-year Pavement management program. We have a three-year plan. So move it on out to a five-year plan As well as continue with our major maintenance slurry and micro seal projects We're also working with the county on a point San Pedro Road construction project. So that will be forthcoming. I Bridge maintenance and public hillside are both part of our transportation annual programs as well. Bridge maintenance focuses on inventory and assessment of bridges that are not currently on the Caltrans national bridge inventory and then working with Caltrans for bridges that are to seek funding and assessments of those. Public Hillside is just, you know, developing long-term plans and projects for hillsides identified by the city and performing routine program scopes of work. And then the Road safety implementation program, so some 26, 27, what we're aiming for is developing a transportation impact analysis guideline, finishing the citywide bicycle and pedestrian plan update while looking for some project studies and implementations from that. The Point San Pedro Pedestrian Quick Build Enhancement Project, which is in conjunction with the Point San Pedro Slurry Seal Project, and then additional implementation of the AB413, which is the 20 or 15 foot no parking limitation in front of crosswalks. So just tying it all back together, back to the beginning. So again, we're at $19.4 million in the CIP proposed budget of that split between annual programs and projects, about 75, 25, 74, 26, and our individual categories. So in terms of next steps for the CIP, so continue to adapt and change to the city community needs as we move throughout the year, continue to apply for our grant funding that I'm thankful we've been very successful at in previous years, continue to evaluate our annual programs and their implementation, and then go and look at the CIP planning process and start incorporating some of our other citywide planning documents and recommendations from those into the CIP itself, and then review that CIP through the lens of DEIB. So this presentation will be uploaded to our website, which is the QR code there for review. And what is that? Yes.

Thank you, Gray. You have prettier pictures in your presentation than mine. I just have a couple more slides just to wrap up and quickly turn it back to the council and public comment. I think we're on slide 17 there. So we spent a fair amount of time talking about what is proposed in the budget. Highlight again for the council in the public what is not provided for in the budget and our need to continue to You know quantify and communicate areas of the budget that continue to be under resource relative to current service level demands and funding requirements We did address at the first one some of the utility shortfalls in the budget that's being proposed. Overall, our equipment replacement funding fleet and public safety on an ongoing long-term basis is still about a half a million dollars to three-quarters of a million dollars a year underfunded. I want to give credit to our city's attorney department that's been making some significant progress in helping to manage our outside legal costs, but those have been significantly increasing and frankly projected to continue. We've talked about infrastructure. There was a question at the finance subcommittee. Gray noted about $3 million a year in our pavement maintenance. That's about $2 million below the level needed to maintain our current levels. And I would note that that level of funding is actually made possible this next fiscal year through some reallocation of the TAM funding formula that provides some kind of a front loading of some of that. We had set aside funding and we still have it in the reserve to help bolster that in the out years. and we're hoping to get some help from the legislature to be able to collect again the vehicle impact fee through the franchise agreements public safety in addition to just staffing needs with increasing call volumes and the premium as the chief spiller indicated on response time as a metric is an area of concern. We also do have the SAFE team funded through 26-27 but again that is largely due to a successful grant application and so funding beyond this fiscal year is still unaccounted for and community economic development particularly in the areas of code enforcement and economic development we've talked about at the subcommittee some options we have to pry some funding back to the city that could be perfectly aligned with our economic development initiatives and then our deferred facility maintenance needs so the The next one I want to touch on because it needs to be mentioned is the budget, in part because it's our baseline budget, does include funding to support our library operations. And as the council and community are hopefully aware, We do have the renewal of the library special tax going before the voters. I put an extra zero in there, but in June of 2026, so in a couple of weeks. That generates $1.2 million a year, and it's contemplated, proposed to just be continued at the existing rate. Should that measure not receive the two-thirds vote requirement needed for passage, what we have sort of put together and are setting aside for now is essentially a contingency plan that would account for initially loss of that funding for the first six months of the new fiscal year. And so what's contemplated is the freezing of a couple of vacant positions, and then the reduction in temp staffing to be able to manage that shortfall will likely necessitate or result in the one day closure of the main branch library, which is currently open seven days a week. We are looking at closure on Sunday of the main branch, as well as the closure of the Northgate Branch Library, which is slated for closure with the Northgate development. In fact, I think it was going to be closing soon, but because of the project schedule is remaining open, but without the funding source to maintain our current service level across the entire library portfolio, if you will, the staff recommendation is that that would necessarily close there's also some reductions in the collection budget and some other non personnel and using about three hundred thousand dollars of available library tax fund balance why are we looking at a contingency for six months the answer to that is We are already doing work to bring to council a recommendation of potentially a measure on the November 26 ballot that was discussed in our fiscal sustainability presentation. I guess not obviously, but it's staff's position that if a measure K is not renewed and isn't passed, then it's even more of a imperative that we have something on the November ballot to also account for. So the hope would be that if K doesn't pass, that we would be back before the voters in November with a measure that would also necessarily address the needs of the library as part of that. So just a quick reminder on the next slide that the work that we're doing on a November ballot We're continuing to look at the possibility of bringing forward for council consideration an increase in our property transfer tax. There's some more analysis being done and some kind of policy questions that will come forward with that. An alternative to that might be bringing forward a public safety tax, albeit requiring a two-thirds vote, but that would primarily address what was in an earlier slide about public safety funding needs and gaps. This slide is just to remind the council that council action is going to be needed by your July 20th council meeting for anything that's going to appear on that November ballot. We're going to be doing some additional polling here in early June We'll be again bringing this to the finance subcommittee. The plan would be to bring the staff recommendation to the June 15th council meeting for feedback so that we can then come back at the second meeting in July with that recommendation. So the last slide is the timeline and next steps. Today we're at the presentation of the preliminary budget for next fiscal year. I noted that we'll be back on June 15th for formal adoption, pending feedback. from tonight pending the results of the june second election i would also note significantly that at your next meeting on june 1st we will be bringing the draft departmental work plans that support the key strategic plan initiatives and the specific work that is outlined and aligned with this budget proposal. So that'll be another opportunity to get feedback on the work plan that could inform some refinements to the budget as it should going forward. And then in June, the adoption of the budget the master fee schedule and the CIP as presented this evening. Again, staff will probably reserve the right. There may be some revisions and some tweaks that we'll be making as we continue to refine the overall budget, but essentially this is the proposed budget and we look forward to the council feedback and bringing it back for adoption in the middle of June. Thank you.

Thank you, excellent presentation in addition to this staff report which has even more information in it, so thank you. And this is a discussion report item, so we'll start with questions. Vice Mayor, do you have any questions?

I do, I have a couple of questions. Some of them are coming from the finance meeting which I watched. So a lot of the revenue, which was great, we have revenue growth in auto sales. And I'm wondering if there, first of all, it seems that trend is a little bit different than what we're seeing across the state. And I'm wondering if you have any thoughts on that and if that is a, like some of the other things that are looked at in terms of this budget, Are you looking at that this is going to be an ongoing trend or hope? Any thoughts on that?

So I think a short answer to that. And if Sean is in the room, he can add. Sean Plait, our finance manager, handles most of the revenue tracking and analysis. There's two parts to the, oh, any of these revenues, major revenues, there's what is this year looking like and what is our experience, and then what kind of growth or lack thereof are we building into the future budget? I would say on this one our sales tech consultants have that we usually rely on for these projections tend to be fairly conservative which is a good thing because we'd rather be wrong on the right side than on the other side but I think You mentioned that statewide, most jurisdictions and on a statewide basis are already starting to see some declining in sales tax revenues for all sorts of reasons. San Rafael seems to be somewhat bucking that trend, at least in the short term. So in this projection, I think we're comfortable We're not building a lot of growth into it. In fact, I think we don't even have an inflationary growth factor. It's less than CPI in terms of growth. So to answer your question, for now we're building the increase in the baseline, but we are being conservative in terms of adding much in the way of growth to that. A lot of what's going on in the projections from our consultants is the anticipating a downturn, anticipating a recession, anticipating a contraction, and that may very well happen. But in part because we have been able to build up the reserves and we have a reserve, this is we're going to adjust the revenue forecast when we start to see it. and be a little bit bullish on it in terms of putting the budget forward for next year.

Okay, great, thank you. Sort of along the same line on the questions, I mean, the savings we're seeing, of these savings, which would be reoccurring and which are one-time or are we seeing all of them being one-time?

Well, in terms of the budget balancing measures that we put forward, those are being presented as ongoing and recurring savings.

Okay. Okay, great. And then I have lots of comments, but I'm going to save those and just focus on my questions. Do you want me to do CIP questions as well at the same time? Yeah? Okay. So within the CIP, one of the areas that, and I'm sort of been the broken record around this, is around older adults. And I know our pavement program is one key area, because we're seeing an increase of number of falls for those 65 and over. And I'm wondering if there are what other areas that you're specifically looking at to address the needs for older adults in terms of the CIP or within the budget overall?

I'll take a first stab at it. I mean, I wouldn't necessarily characterize it as specifically targeting issues that impact the older adults, but they clearly fall under sort of the broader category. But I mean, sidewalk improvements is chief among them. you know all the intersection improvements signalization so there's a fair amount of kind of accessibility related improvements associated with a number of our streets and roads projects and then we are again needing to get up to speed on the assessment of the Access to city facilities component to that and we're putting some funding into that but we're also contemplating I believe in the CIP the more robust update of the 88 transition plan that is going to come up with a list that is gonna have a lot more projects in it then then We're gonna be able to address but it'll be a good basis to come back to the council with a prioritization of those those improvements

And I would just, again, around comment a bit, is that within the CIP, there's so many other areas to address the needs of older adults than just the items that we're talking about in terms of ADA issues.

Yeah, understood. I'll just note, even though we're late and we've been going on for a while, but one of the conversations we've started with Director Miller is the trade-off between putting our resources and staff capacity into the projects to build the new and improved. And what really has been lagging is just the maintenance and the upkeep of our existing infrastructure. So at least from an infrastructure standpoint, we're looking at how do we at least strike maybe a different balance in that regard.

And I'm gonna ask a question that actually Council Member Hill I believe asked at the finance meeting which is around would there be, what is the balance in terms of modernization versus for infrastructure modernization and changing things out from a cost versus maintenance but actually modernizing to different street lighting, LED, those type of things. Are we looking more at modernization or more maintenance? I don't know if that question's making sense in terms of, I'm trying to see if there's a cost benefit. If there's a cost benefit in terms of going to more modernizing or keeping what we have.

So as I recall, and maybe director Miller came out, but the question I think came up at the finance subcommittee, particularly in relation to our increasing costs of our utilities, you know, electricity and water. And so the question was, I think in the context of What are we also doing to, you know, can we design or upgrade our infrastructure to result in lower utility costs? When it comes to sort of electricity on street lights and traffic signals, Director Miller reported that we've already invested dollars in transitioning to LEDs. I think there was even a question of whether we need lights on 24-7 or just when we have more traffic around. Council's aware of a lot of the work that we're doing on both for facilities and now with our fleet, transitioning to electric vehicles and charging stations. So I think there's always a modernization and improvement component to it. It's maybe less of a targeted area in and of itself, but when you're looking at every piece of infrastructure, it's appropriate to look at sort of the lifecycle cost of the improvement and is it more cost effective in the long run to keep doing what we're doing and just replace it or transition to something more sustainable.

Great, thank you. Thank you. Council Member Hill, questions?

Thank you, Mayor Kate. Thank you, Gray. And I will note, before I ask my questions, that the interim city manager is also the finance director. So I'm glad that you can have conversations with yourself about this all the time. My question, and this goes back to a slide earlier on, the baseline projections slide that you had showed that when we assessed it in this month that there was an improvement in the out years. I just wanted to confirm, because the way that the numbers showed up, it made it seem like it indicated as it was going out years that it was showing, say, 3.5 million. Was that additive, or was that 3.5 million a year in deficit?

You know, it's cumulative, it's not additive. So I did take out the charts with the bar charts that kind of showed it, but that is if we don't do anything by year four, you're at that number. If we're, as we will be doing, closing, addressing the budgets as we go, they will also carry forward.

Great, yeah, it was more of a confirmation that to a viewer of that slide without the graph, it made it look like it was, each one was the factor that you're, but to appreciate that you're confirming that it's a cumulative number over time with the out years. And that is, That is my question because I was participating in it. The only other question I would say is, it's not a question, I think San Rafael Fire Department should get credit for their recovery of costs for Measure C. Thank you.

Thank you. Council Member Irenz-Giletti.

Yes, thank you. We want to appreciate, you know, all the analysis and everything, and especially all the departments coming in, trying to figure out where we can reduce cost. Really appreciate that, because I'm sure it's not an easy thing to do. Okay, my first question is just like a clarification. In the proposed general fund budget, and I believe I know the answer already, but just to confirm, in the capital fund, paving streets, roads, it was a million dollars, and the Vehicle replacement it was a million dollars and it's not on the proposed because I imagine that is going to come from a different fund Is that?

right So so in this year's budget I'm sorry table three either helps. Yeah.

Thank you Page six

Yeah, so in the current year budget, we transferred $6 million of excess fund balance to liability capital, streets and roads, and vehicle. We have done that. So that may not necessarily be in the appropriations, but we've transferred it to those funds so it's available. And in the proposed budget on that same table, we're proposing just the 4.1 million, so it's in addition to it. So this is money that would go to the liability fund. It goes to help address the shortfall in our, well, no vehicle replacement this year, but basically the capital fund and the liability fund are the two funds that will be receiving additional general fund contributions.

Okay, great, thank you. Okay, a couple of other questions. Yeah, I echo the sentiment with the fire department. Thank you so much for finding those fundings, and I completely support the addition of three FTEs. I'm curious to see, and I totally understand the overtime. I'm curious to see, are the current firefighters depending on overtime pay? or will they be okay with the regular salaries? And I understand why it's not ideal to have overtime.

I guess that is a question for our members of the San Rafael Fire Association. So we're having conversations with them about this. In fact, there is gonna need to be a kind of memorandum of understanding because we currently actually have in their current labor agreement, there's a cap on the positions that the city can hire over and above the minimum staffing level. So the chief and his team have been working with the SRFA on that. So I'm just gonna go out on a limb and say, historically, traditionally, overtime is absolutely kind of can be viewed as a positive thing from the employee's perspective. Then it gets to the point where mandatory overtime on every shift. I think the staff was reporting that it's been years if not a decade that we've actually been able to staff any single shift in the fire department without relying on overtime. And maybe when we bring back the budget we can share the charts of just the trends. It's one thing what it's been and it's another thing what the trend has has been growing too, so this is an attempt not to take overtime away or reduce reasonable overtime for our firefighters, but it's an attempt to actually stem the tide on the increasing trend. This is the main reason why we're $2.7 million over budget on payroll is fire overtime.

Right, yeah, and it totally makes sense. Great, thank you. On the parking fund, I see that we exceed the cost with the revenue, and I know that this, I believe that this is used all for operational. Is it possible to use some of that for capital for repairs and maintenance in parking lots, for example?

Yes, so generally speaking, yes, absolutely. In fact, the whole point of a quote unquote enterprise fund is that the revenues it's collected is restricted for operations, capital, debt. The parking fund had been in the negative for a while, and over the last year or two, it's starting to rebound, so it's positive that we're seeing it. It'd be nice to actually have it be generating additional, because we should be collecting sufficient money, not just to cover operations, but also to cover some of the maintenance and improvements that are needed, but that requires collecting some of those dollars before you have the sufficient funding, but pretty soon we'll be able to allocate some of those dollars for those improvements, particularly in our parking garage.

I have a couple more, sorry. For the special events, I really like to have a budget for the year. I think it's a great idea. Is it possible for some of these events to receive external funding from sponsors? and how are we going to approach that? I don't know if you have a plan or if this is a question for a future answer.

Yeah, I'm gonna probably defer to when the item comes back to the council, but let's just say that in the sponsorship policy framework, there is a distinction between those events that, well, some are actually revenue-generating events, and some of them have different funding sources and the city's contributing a small component, and then there's some events that arguably without city support may not happen so there's a tearing of how the city would approach support depending on factors like what you suggest great that sounds great and then can we sell the old fire boat and get revenue I believe that's the plan great

Okay, I'm almost done. So speaking of utilizing external funding, for some of the projects that we have, for example, like the welcoming area for the city, is it possible to work with volunteers or organizations like Rotaries where they will sponsor some of the costs and maybe some volunteering time knowing that using volunteers takes a lot of effort from the city if it's a specific project like that yeah um not sure how best to answer that with relation to like any particular project like the gateway um but

This issue has come up and other council members have brought it up and I know you've been a big proponent of a more robust sort of volunteer program. I think there is an opportunity to sort of identify what kind of specific projects and what scope might lend themselves to taking advantage of the community's interest and ability to support. We have some work to do to refine that list, but we're thinking about it and talking about it. Thank you, Director Miller.

I just had an example I wanted to share. So we actually had scouts up in North San Rafael at the Monticello and Freitas Parkway who came in with a plan on how they wanted to improve the slip lane that we closed there. So they did a whole proposal on what they were going to do to volunteer to improve that. And they accepted donations. And they're not quite done with the beautification. But I think there's opportunities like that if an organization wants to come in. and propose something that limits city staff time since we don't have the volunteer program right now. But since we don't have the volunteer program right now, we're not actively seeking volunteers to do stuff like that. But in the case of North San Rafael, it's very successful.

Yeah, and that sounds great. And I wonder if maybe it's an example of something that can be shared with other groups and see if they will be able to present something similar maybe. Maybe they are lacking on the initiative to put it together. I don't know. But anyway, I love that idea. Okay, I think, and then I think my other question is going to probably be answer is around the priorities that we identify with the strategic plan that's going to be presented on the next meeting, I believe so. So that was my last one. Thank you, thank you so much.

Thank you, I have a couple questions. So on the, I think this is for Gray, so the whole trash capture project, Can you confirm, isn't that a state unfunded mandate? I just wanna put that out there to the community. We love our state legislators, and I always like to highlight when we get unfunded mandates. So if you could confirm, and just a general amount of money that's costing the city, and I know we've gotten grants, but if you could just speak to that.

You are correct that it's a state unfunded mandate. The money that we are receiving in this proposed fiscal year is actually coming from Caltrans because two of the locations, actually majority of the locations are treating water coming from Caltrans property. And so they're actually providing the funds because we are treating a portion of their jurisdiction. So that helps definitely with the offset of those costs.

That is so strategic of you all. Because if they weren't, we would be funding the entire project. And with those trash capture devices, so it's the initial outlay to set them up, is there an ongoing maintenance cost? I mean, there always is, but is the majority upfront in the installation? Or I'm just, again, trying to get a sense, just so when we're talking to our state electeds, the reminder of the impact of these. We support the underlying objective, and we'd like to have these things funded.

Yes, so I would say a majority of the cost is the installation. These are kind of unique, very specific units. They're kind of designed for each individual location. There is also an ongoing cost, but as we're working with our designers, we're trying to obviously minimize those kind of recurring costs, but then also make it, I'm not going to say easy because it's not an easy job, but make it easier for operations staff to perform their work. So where trash gets dumped into the dumpster, it's easily accessible, easy to pull out. So trying all those combinations, trying to minimize those operating costs going forward.

So that's a really interesting point in terms of how do we have less of the throughput coming in. And so have we found that doing additional street sweeping in those areas might also minimize the amount of long-term work? I see Director Miller nodding her head.

If we work on the source of a majority of this trash, obviously that can impact the trash capture devices downstream. So yes, ongoing.

Okay, thank you. Gray, you also mentioned in your presentation, you said future looking, but I think you're already doing this, of incorporating city plans, other city plans into the CIP. And you did speak directly to DIB, but just even in general, We have cities' plans. We have them around park and rec. We have them around bike and ped, homelessness. So were you saying it's going to be part of the rubric that's being looked at? Because already, I mean, I'm looking at the CIP and I know that there are projects in here that are in park and rec, for example, in their plan. So what did you mean by that?

Yes. Specifically with plans that we already have there is the incorporation of this projects been identified in a citywide plan Therefore it you know is incorporated into the CIP I think there are some plans that still have some gaps in them specifically a city building and facilities plan citywide building facilities plan we're updating the bicycle and ped plan and then there's also this weird matrix of how those plans scored their projects and how the CIP scores their projects. If you think about it in that way, we're kind of double ranking. We're ranking things here, we're ranking things there. And so I think there is an effort to try to merge those two and simplify that experience so that it's been identified by the group that worked on this citywide plan and therefore, you know, it moves into the CIP. So I think that's the bigger conversation on how those intersect, but there's also, you know, ongoing plans that still need to be published and incorporated.

And I'm happy to hear that. When I think of bike and ped specifically, I have very specific projects, and then how do they manifest? So I think having clarity around that. Yeah.

Yeah, just out of, I think we're also finalizing the storm drain master plan, so that's also going to identify a whole other list of projects that may heretofore not yet be in the CIP.

So that will somehow be communicated. If it's not, I'm hearing it's not in the rubric, it's gonna be more in the charts that show this has also been identified in yet another plan. Just, okay.

Yes, and. Okay, yeah. Conversations around the rubric, you know, there's been a lot of work with the citywide bicycle and pedestrian plan, with the scoring, with the rubric, and so taking lessons learned from that and seeing how they could apply to the CIP additionally.

Fantastic, okay, thank you. And then my last question, and this is more for City Manager Navazio. So we talked about and you alluded to the TOT, the transit, wait, TOT, what does it stand for?

Transit Occupancy Tax and the hotel bid. Thank you.

Yes, and we give a portion of that money to Marin County for their visitor bureau.

Actually, technically, it's collected by us for them. So yes, I wouldn't say we give it to them. We collect it because it gets paid to the city with the TOT, but the county assesses the hotel bid. Hoteliers pay the hotel bid, and we

Okay, so there's a piece of it, the hotel bid. So I've heard from this council in previous meetings, and we've talked about in the other meeting, of San Rafael wanting to have a, having more say of how that hotel BID dollars are spent. So they're collected by San Rafael, and they're spent in San Rafael, and then... they're not subsidizing hotels in other parts of Marin County, as I understand this happens now. So I don't know, my question is, but maybe it's a plea, like what would you need from the council to have all that hotel BID dollars coming back to San Rafael? and to not have it, maybe it's a legal issue of rewriting the way it's written, but I know other jurisdictions have a different formula. So what would you need from us to have all those dollars coming back here?

I'll even try to answer this carefully. The first part I think we've already gotten direction, which is we have brought up this subject personally with the county and the city's interest in doing it. And as we shared, there is interest on the part of the county to re-look at the hotel bid, but in the context of their overall so I wouldn't hold my breath on that but we're still making the inquiries should those conversations um not prove to be productive or maybe on a longer time frame we may come back to the council with other recommendations on what staff would need from the council to advance that

Okay, I know we brought it up last year for the budget and I look forward to those conversations. I think, I'll speak for myself, I'm getting impatient about that and I appreciate the county now has a new economic development director they brought on and they're developing a plan. And we've been really patient and we have some great hotels here that we would like to. Support so just wonder that's a hard question. Okay, there might be other questions that come forward from the community. So Thank you. Don't go anywhere Let me open up the public comment on this item if you would like to comment on the proposed budget now is your opportunity to do so and

GOOD EVENING. GOOD EVENING. GOOD EVENING. GOOD EVENING. GOOD EVENING. GOOD EVENING. GOOD EVENING. GOOD EVENING. GOOD EVENING. GOOD EVENING. GOOD EVENING. GOOD EVENING. GOOD EVENING. GOOD EVENING. GOOD EVENING. GOOD EVENING. GOOD EVENING. GOOD EVENING. GOOD EVENING. GOOD EVENING. GOOD EVENING. GOOD EVENING. GOOD EVENING. GOOD EVENING. GOOD EVENING. GOOD EVENING. GOOD EVENING. GOOD EVENING. GOOD EVENING. GOOD EVENING. GOOD EVENING. GOOD EVENING. GOOD EVENING. GOOD EVENING. GOOD EVENING. MY COMMENT IS REGARDING THE CITY'S COUNCIL'S PRACTICE OF CITY'S COUNCIL'S PRACTICE OF AUTHORIZING EXPENDITURES THROUGH AUTHORIZING EXPENDITURES THROUGH THE CONSENT CALENDAR. THE CONSENT CALENDAR. YOU DO HAVE A PRACTICE OF DOING YOU DO HAVE A PRACTICE OF DOING THAT. THAT. EXPENDITURES THAT HAD NO PRIOR EXPENDITURES THAT HAD NO PRIOR AUTHORIZATION OR REFERRAL TO AUTHORIZATION OR REFERRAL TO THE CITY COUNCIL REFERRAL BY THE SUBCOMMITTEE OF THE COUNCIL. TONIGHT FOR EXAMPLE THE CITY COUNCIL AUTHORIZED $1.8 MILLION THROUGH CONSENT CALENDAR ITEM 2G TO MARK WEST FOR DESIGN AND DESIGN SERVICES FOR THE CANAL BRIDGE. IN JANUARY AND FEBRUARY OF 2026 THE COUNCIL AUTHORIZED $500,000 IN A VARIETY OF AUTHORIZATIONS FOR EXPENDITURES THAT ALSO HAD NO PRIOR REVIEW. NO PRIOR AUTHORIZATION AND NO REFERRAL. WHAT I MEAN BY THAT IS THAT THERE HAD BEEN NO PUBLIC OPPORTUNITY FOR REVIEW OR DISCUSSION, NO PRIOR SUBCOMMITTEE DISCUSSION, NO PRIOR CONTRACT OR ANY OTHER AUTHORIZATION. AND I BELIEVE YOU CAN SAY WHAT YOU WILL ABOUT THE CONSENT CALENDAR. IT DOES NOT OFFER AN OPPORTUNITY FOR PUBLIC REVIEW. And I believe that doing so through more greater public overview will allow greater scrutiny and accountability as well as lower costs. So I urge you to limit your use of the consent calendar to authorize expenditures. Thank you.

Any other comments this evening on the proposed budget?

Hi, this is more of a comment of the overall process. My name is Rhonda Cutter, and although I've worn many hats, today I'm here as chair of the San Rafael Massage Advisory Committee. MOAC has been active for over 25 years advocating for fair and reasonable massage establishment ordinances and fees. We work closely with the city, our community members, and the California Massage Therapy Council. I want to remind the council and staff that several of us came before you a year ago when the fees for the San Rafael Massage Ordinance and establishment and practitioner permits holders had to increase as part of your budget process. We spoke at that final meeting. It was too late to have the fees altered, but had offered to meet with staff to review the current ordinance Discuss opportunities to make a better ordinance that would be easier to enforce, less burdensome for massage therapists who are simply offering healthcare services. Changes could include not requiring annual inspections for practitioners who are in good standing. which I believe takes a majority of the time spent on the program. Many of these practitioners have had dozens and dozens of inspections over the years of the same exact office. So we would like to see more time spent on enforcement on businesses that have already been identified as problematic. This is especially urgent since the city of Santa Rosa has updated their ordinance and they have closed down many massage places that were hosting sex workers and we're concerned that they might be moving this direction. So again, I would just like to offer that we would like to meet with staff, including Lee, and look at ways of updating the massage ordinance and reevaluating the fee structure. Thank you. And I wish I could talk about the volunteer coordinator position. I really think you should bring it back. Thank you.

Any other comments on the proposed budget? Not seeing any other comments, I'll bring it back to the council for any additional comments, knowing that we will see this again. There was one question, I'm sorry, in public comment about specifics for the budget for Marydale, which I think you mentioned is going to be as part of the homeless subcommittee tomorrow, but if you want to speak to that.

Yes, so the speaker referenced the $500,000 in general fund allocation for the operating budget. In the capital improvement budget, there is an allocation from the city's capital fund to support the standing up of it, which is also effectively matching the county's contribution above and beyond the purchase price of the property. So there is a $100,000, excuse me, there's an allocation from the capital fund of $1 million. The funding source for the capital fund has been the general fund, but to be clear, that is included in the CIP.

Okay, thank you. I'll bring it back to the council for additional comments. Vice Mayor, go ahead.

Thank you. Three things come to mind, actually more than three, but budget's very, in CIP, creative, optimistic, and fragile. It feels fragile. The highlights for me were the strong grants. Thank you for doing that. Getting those grants is work in of itself. The shift or the prioritization that downtown needs to have that that extra help in cleaning, so that maintenance shift is really appreciated in the budget. Addressing the need to limit the firefighters' overtime, recognizing extended overtime is not healthy for anyone with the hiring of the three new positions. So I think that that works really well. Again, that might also be fragile as we go through. So that's one area of the fragile comment. And then the budget realism that we needed to allocate at least 500,000 towards just utility maintenance. And I imagine that could easily be four times that amount for the work that needs to be done, but it's a right step in the right direction. A gift and a curse on the school board with the budget was that we had to have three-year rolling budgets and have it be a balanced budget for the three years. This is only one year, but I appreciate the work that you're doing of already looking out those three years. And I think that's hugely important. So the more we can do looking forward would be great. And then I'll just put my plug in again that San Rafael led on racial equity and doing work in our community to support racial equity. And I think that where we're at right now with our older adult population, we need to run older adult equity in parallel and really look across the board in those areas.

That's it. Thank you.

And I really appreciate all the work that's gone into this. This is hard. And so it's creative, it's good, and we have more to do. But thank you.

Thank you. Council Member Hill.

Thank you, Mayor Kate. Thank you, Gray. Thank you, interim city manager and finance director Navazio. It's almost like you're two people. Taking a huge step back when we think about budgets, they are expressions of the value of our community and what they expect of our city. And we look at, again, taking a huge step back, the vast majority of our general fund goes toward public safety. followed by Public Works, and then all the other departments. And I'm not gonna list them all because there are many, but when I hear about what are the opportunities constraints, I heard a lot of culmination of discussions that have been going on in the finance subcommittee meeting of scenario planning. How do we look to this year and the out years to mitigate risk? And I'm hearing the budget as shared this evening as an expression of those mitigations. How do we look at it with undistorted eyes and make certain that we're able to continue the scenario plan. I appreciated even the update that even within three months, the interim city manager, finance director has identified that it is improving, but I would expect that any time that we're starting to see any shifts, that the city manager, finance director will continue to inform us. but I appreciate all of the scenario planning. I might have a contrasting opinion with the Vice Mayor that there are scenarios that are fragile, but I actually believe that the contemplation of the various mitigations provide a transparent mechanism to continue to scenario plan. So I appreciate the report and look forward to a month out to finalize. Thank you.

Thank you. Council Member Yaren Skouladi.

Yeah, no, I just wanted to, again, thank you for all coming together and prepare this report. I'm sure it wasn't easy, and it's just the first one. So I really look forward to getting the priorities for the three-year plan and see what's going to be done and what's not. And it's very challenging because revenues, I mean, I'm glad that they are a little bit higher, but they're still not huge, and there's a trend going down. And as we need to do the same, with less funding. So for me, it's more like how can we bring the community to support us as a city? That is a safe way to do it. But anyway, I look forward to continuing the conversation, so thank you so much, yeah.

Thank you, and I'll add my appreciation. So thank you, on the CIP, you do have great photos. The finance department did not have great photos, but your great photos, and it really, again, is very tangible for our community. Next time. How massive the CIP is and how it really touches all aspects of the city and how much you are doing, your incredible team, what they're doing. We say behind the scenes, but again, you had the images that showed that it's actually right in front of us. I was happy to see on the CIP. the mission sidewalk, which is the sidewalk that's right here behind the downtown library. It's had those K rails for three years. It's not this year, but I do see it on the CIP for next year. So I look forward to that. Um, and I did see the roller, the gateway plus the additional funds. I know we've had a hard time finding a contractor to do that work. It's a little bit of an unusual project. So I am thrilled to see that. So thank you for all that work in the CIP. And for the budget, finance director, interim director, interim city manager Navazio is supported by an incredible team. Thank you, Sean Plate. Thank you, Van Bach, for all the work that you've done. The budget is very clear, and what I appreciate about it is it's – transparent saying this is where we have some room this is what we're doing for contingency explaining all the different funds and how they manifest and i really appreciate the clarity that you're putting in place the internal systems where before different departments were being supported by funds but now it's going to be very clear going forward so we're going to know exactly what each department is spending on the different issues so that's a structural um inside and it's not necessarily more money but it is more clarity so so thank you on that and support the staff recommendation as it was currently presented, everything from the fire department, the downtown cleaning, so really appreciate how you are stewarding and proposing careful, use of our scarce resources. We always have a wish list that's bigger and really helping us get through this next year. So more to come for people that are interested in talking about it. We will be having the final budget in June, so in two months, or two months, sorry, two meetings in one month. So thank you all. Look forward to another good discussion. In the meantime, I would entertain a motion on this item.

I'll move to receive report and provide direction to staff to inform preparation of the final proposed fiscal year 2026-27 budget for adoption at the City Council meeting of June 15, 2026.

Second.

Moved and seconded. Roll call, please.

Council Member Hill. Aye. Vice Mayor Kurtz. Aye. Council Member Idan Tuglati.

Aye.

Mayor Kate.

Aye. That motion carries 4-0. Thank you all so much. Before we adjourn this evening, we have open time for public expression. This is anything that was not on tonight's agenda. Now is your opportunity. We had it at the beginning, but we also have it at the end. If you would like to speak, now would be your chance.

Again, it's...

It's Rhonda Cutter, and I just want to say how much I've appreciated the volunteer coordinator over the years at the City of San Rafael. When I first bought a home in 1990, what was it, I don't know, seven or something like that, in San Rafael, I thought, I want to do something for my community. Now that I live here, I've lived here for over 11 years, and I wanted to do something, and I thought, what should I do? I looked in the phone book. And under the city of San Rafael, there was the volunteer coordinator. And it was a new position. I called, and I had my favorite job of all time, which was sitting at the front desk here at the doors of the city of San Rafael. That started my public career. And I have to say, it was my favorite job. I got to meet everyone and greet them, show them what to do. And then I worked with the library and updated the canal resource guide twice as a volunteer. And I got to know a lot about the services that we offer. And anyway, I just think it's a really important role. And I appreciate your listening. OK, bye.

Thank you. Any other comments this evening? Okay, not seeing any. Thank you all for being here. This meeting's adjourned. Good night.