Budget Committee - Regular Meeting

I guess we can call the meeting in order here then. I see both supervisors are present here and do you know if there's any additions or corrections we have for the agenda?

There are none.

Great. I'll move on past that. Any public comment? I see nobody in here at all. Is there anybody online?

No hands raised.

Right. And we'll close public comment. Move to the action minutes from June 24, 26. Look fine to me? Mm-hmm. Fine to me. Okay. We'll move those with the consensus. Go on to the consent agenda, which we have three items. Pretty standard stuff there. I don't have any questions. I'm good with consent, too. Yeah. I should ask for public comment. I don't believe we have any on that, but I'm good with consent, and I see no public comment, so we'll approve those by consensus as well. And move on to the regular agenda, which is some report on emergency lighting repairs. And what do we have doing a presentation on that today?

I'm here, Supervisor.

All right. Chief Lankwist. Oh, Chief Lankwist. Yeah, OK. Please go right ahead, Chief.

So back in, as the board remembers back in July of 2025, we had a catastrophic power failure at the jail, which knocked out numerous of our emergency lighting systems. Some of those were able to be replaced relatively quickly, working through facilities and getting reimbursement approved through our insurance carrier. Some of that lighting is specialized lighting, required additional time to try and procure Other alternatives, we've had to come up with different alternatives to replace that lighting since there is no commercially available replacement lighting. So we've been over a year without some of this emergency lighting in the facility, which is required under Title 15 and Title 24 standards under BSEC rules. So we're at a point now where we went to the board back in July of this year asking for the funds to complete this emergency lighting project, which is required. It's a safety issue, risk mitigation issue. And the board said to go back to capital and the budget committee. So here we are at the budget committee. We're asking for just under $684,000 to complete this lighting project through a Jock contract. We are We have been working with facilities on this as well. This project, once we receive the funding for it, it'll be completed, and then it can be submitted to our insurer for reimbursement. So there should be zero cost to the county once it's funded, reimbursement from the insurer, and we should be back to zero cost.

Is that the, do you have any more there or touch your?

That's it. I mean, we were working with the CAO's office last year to try and identify sources. The board, we were unable to get the board's approval on it. So now we're asking for the budget committee to try and help us appropriate that, those money so that we can get this done relatively quickly. Unfortunately, as you know, the longer we wait, the costs are going to keep increasing. So the sooner we can get this done, the better. So, I mean, with the budget committee's help and guidance, we'd like to identify a funding source so that we can get these monies appropriate and add it to the sheriff's budget so that we can get this jock project started.

Yeah, I think what happened is the board wanted to go to the budget committee first on there. And I remember this question came up when it came up in July, but it's been six months. So I don't remember all the particulars. But what was the reason that this didn't make it into the budget? Because it happened last July. So there would have been a lot of time.

It's been a lot of time and facilities has been managing this project and they've been doing a a. Good job of getting us back on our feet. This is one of those items that kind of slipped through the cracks that was kind of put on the back burner because of the issues with trying to track down the replacement lighting. So once we realized that the replacement lighting actually hadn't been procured and there was no reasonable fix for it, so we had to go out to the jock contract. That's why we were behind in getting this added to our budget. It was an oversight. working with facilities, that's all.

You have any questions?

Yes. Questions I have. What exactly happened to the lighting? This is the emergency lighting system. So what happened? And just explain the situation. We hear that some issue with the lighting system, but this is the emergency lighting system. Correct. What happened and what buildings did it impact on the jail campus?

So it affected, I mean, the list is extensive, the number of lights that it affected. This occurred last July when we had the power failure. They had to come in and replace the entire power system to the jail. We had to bring in emergency generators from outside, semi-trucks to power the jail. This was something that was completely unplanned. You know, I hate to speculate on what caused it. I know there's You know, that's not for us. That's for the insurance investigator to figure out. But it wasn't caused by anything we did. But when the power shorted out, they turned the power off. Unfortunately, it damaged these emergency lights, which have been inoperable since that date.

Yeah. So did it impact all the buildings or just the new jail or the old jail?

It affected all the jail. It affected all the electrical systems in the jail.

Got it.

Most of these emergency lights are primarily in the new jail, which is why we're having a hard time trying to track some of them down.

Yeah. And which insurance company would be reimbursing? How does that agreement work? You have insurance on it. They'll fully reimburse us.

Risk management has been processing those claims for us. So the county has been taking care of that. Sheriff's office has been and facilities have been working on that. We have not been filing any of those claims or processing any of that stuff. All the work that's been done has been through facilities.

Is there anybody from facilities and managers? You could just explain that. What insurance company will end up paying this? Will we get reimbursed the full amount? And how long will it take to get that money back? Only because this is coming from contingencies and it's a significant amount, right? So it leaves less further needs throughout the rest of the fiscal year. I see Florence is on.

I can answer. I'll take a stab at that. But really, our risk division is probably the best to answer. We've been working hand in hand with them. So what we do is we provide the scope. We provide all of the receipts and all of the information directly to risk. And they manage that. So I don't. Yeah. Unfortunately, I can't. I don't want to give it time. Yeah.

Okay.

Supervisor, David Bolton isn't on this meeting, so I don't have that information. We can get that to you if you'd like.

Great. I just want to know, hopefully we'll get it. I don't know how long it'll take to process that, but hopefully we'll get that money put back into contingencies soon so that it can be used for other needs that... that may arise before the end of the year.

Yeah. And something a little bit more of an insight that I wanted to basically give answers to some of the earlier comments. You know, the reason why there was a delay on getting a proposal on this is we as you all know, we have a job program and a job catalog to which we deploy contractors. These slides at the jail, they are very specific. They're detention grade. They are not currently cataloged in the catalog. So we had to go through a special process within the jock where We get what is called a non-pre-price where actually the vendor, the job contractor, had to go and request three specific quotes from electricians. And so coordinating that and getting those proposals, they took some time. So that was one of the main reasons why it took a little while to get this proposal. And then there was a question around which levels of the jail were impacted. So we're talking about an impact to the brand new jail. It's impacting, uh, all of the, uh, main housing units at all floors. You know, there's, um, I think the jail is split into two levels, right? And then there's the messening in between. And, um, these, uh, are, um, primarily the lights that were impacted for the exception of one exterior light that was damaged. Um, it was, um, 166 lights that need to be replaced. Wow. And, um, They were primarily the emergency lighting.

So just a typical power outage would cause that much damage. It seems like with all the technology and the advanced lighting systems that we have today, that they would be designed to withstand a power outage, which are more typical these days.

I'm not going to argue with the supervisor.

But that's, the insurance will investigate that. But I hope that, you know, we replace them, that we won't be back in the same situation spending another $700 to repair what just took place.

Yeah. And, you know, I am not an electrical engineer, but just the one thing I want to mention is that the reason why this is happening is because of the Arkin event that happened. And I think that really what probably play a role as to why some of these lights were damaged. You know, some of the sensors inside of the lights are rather sensitive and the fluctuation in the electrical loads probably affected them. We do not know. It's just what we know is that they're no longer working and they need to be replaced and preferably in that same quality and grade that it needs to be because this is a detention facility.

Right. Absolutely. And then for a question, I guess, for Michael, why out of contingencies versus another available funds that we have for facilities, emergencies like this?

Great question, Supervisor. So we look at a couple of different options that might be available because this is going to be a reimbursement from insurance. We did talk with our risk manager, David Bolton, who did confirm that he has been working with insurance. I can't remember the name of the insurance company, but he did believe it was going to be fully covered. He has been identifying it to them. We looked at potentially the contingency as an option. We also looked at fund 478. Those funds have not been currently appropriated yet. I think we are not in totality. I think we have about 7 million remaining there that we're still working with public works and finance. Public works facilities and parks to really go through that plan and bring that back with potential funding and with recommendations. So those are 2 options that we did specifically look at. The other option was obviously department appropriations if they have it with an offset of revenue. All right. Once that comes in. So those are the 3 main options that we did explore.

And this was a recommendation out of contingencies. If we use the $700,000, what does that leave us here?

How much does it leave the contingency here at the end of the second month of the new fiscal year? I know that... We were joking about it today. I was at a conference earlier this morning. We were actually joking about that during July. We actually spent, I think, close to $2 million of our $9 million set aside right away. So I think we have about $7 million remaining. Right. So this would take us down almost another million dollars. Yeah.

Yeah. So it's concerning. That's why the timing was important because if it was going to take longer than, you know, more than a year, rather be looking at other funds and leave the contingency for us to deal with other emergencies that arise.

Susan, do you have a comment?

I just would add that to manage expectations, I was emailing David Bolton, the risk manager, They are working with the property adjuster. He thinks there's a good chance of getting most of it back, but it probably will not be 100% reimbursement because that's usually the case when working with insurance companies.

Okay. You know, after the discussion here, I've got some extra questions now, too. You have any more you want to? Good. I mean, I'm so I'm a little confused because when I was first question, I thought I was hearing that it was a let's go on both the old and the new jail. And then I heard reference to just a new jail. So, I mean, is it the old and the new or is it just the new?

From the plans and what we have reviewed, this is on the new jail.

So it's not the old. So this is all basically 10-year-old equipment that has failed on us. Right.

Yes.

Jesus. Okay. That's even more concerning there.

And the arcing incident, I mean, that's... I mean, it just... Can you give me a little more details on how this happened? I'm just trying to understand what happens here because this should have been up to code. It was built 10 years ago. It shouldn't be a problem.

If I may, this involves several other parties. And I think that the risk management is really managing, you know, there's ongoing investigation as to, you know, the cause. And so I would want to defer on the definite cause.

Well, I wish we had everybody here so they could answer our questions, because I think both Surpriser Alejo and I are not totally like we have a picture on this. And because, you know, if this was the old jail, I can understand things getting older and it just fits together more being the new jail. And I know there's been a lot of problems with the new jail with what happened there. previous administrations and all, but the whole issue is just kind of concerning there. And again, I understand that this took a while to sort through. It's a critical piece of infrastructure we have in. It's been over, it's been 13 months now. And I'm just, I'm not quite clear why So we have to do the repairs, if I'm understanding this, before we can submit for the insurance, or we need Mr. Bolton to explain that too?

More than likely, we've asked the same questions, and my understanding is the work needs to be done before we can submit for the insurance.

Okay, even if we have a number onto it there?

Yes, sir.

Okay, thank you for that.

Do we have any warranties that still exist on the construction from the contractors that perform the work on the electrical?

I don't believe so. Not that I'm aware of. We've tried to make some other claims since I've been here regarding some of the construction issues that we've, some of the issues that we've come across as far, you know, elevators. things like that, and there is no such warranty. My understanding is, and correct me if I'm wrong, Susan or Florence or Luis, but when, you know, the county, when we took possession of this building, when we signed off on it, I think we waived some of those warranties. I could be mistaken, but I know we signed off on the building. We took it during COVID, and, you know, unfortunately, this arcing event is, you know, going back to my college days in electrical engineering, but these arcing events are or anomalies, and this one just happened to occur due to an unforeseen, I won't even speculate as to why it occurred. That's for the, you know, like Louise said, that's for the investigator to determine, but these are anomalies that can cause catastrophic failures to systems, even if there are some redundancies and protections because of the amount of electricity we're talking about and those arcing events, you know, create anomalies in the electrical current.

So, Chief, I did a tour of the jails here a couple of years ago. And you're, unless anybody online here can correct me because you would have been here when I wasn't here during the COVID. But your explanation, I believe, is completely correct, is that the previous sheriff took possession of the jail before some things were completed and it invalidated all the warranties.

That's also my interpretation as well.

Yeah. So that's one of the unfortunate things about this. And I mean, I, I just, it really is concerning to me that that jail will be there and have this kind of an arcane incident when it is, it is so new.

Yeah. The arcane incident just the arcane incident occurred outside the jail at the, at the main transformer where the power comes in. So it's not actually inside the jail. This is outside the jail. So it's the connection between where the jail gets his power and where we get the power um so it really is outside the jail so it just one of those one of those events that um because of i'll just call it a a natural occurrence uh you know cause this arcing this this anomaly this arcing event that caused these these uh power failures but

But it only happened to the new jail, so it had to be where the connection from the new jail was made to the main power source, right?

Yeah, it took power out to the entire jail.

Both new and old?

Yes.

Okay, well then that's a good question to come in here then. Why are we just having to do repairs to a new jail if power went out on both of them and they were both affected by the arching?

Most of the lighting that facilities already replaced has been done in those other parts. Those are more commercially available. The newer standard, newer lights, the newer technology, it's like a refrigerator. The refrigerator from the 1960s and 1970s will run until power finally cuts off, but a new refrigerator... The technology that's inside those really burns out quickly when they have these kind of events.

So we got the insurance money back on that particular part that we already did repairs?

I don't know what was submitted to the insurance for those, but I know facilities had worked, had already got the parts for those, had done that work internally. This is work that is outside the scope of our facility staff. This is very specialized work, especially being corrections grade that we're going to have to go in and replace. So that's why the cost goes up significantly.

Well, I hope when this comes back to the full board, the board report will address some of these questions that are unanswered here that both of us have. I'll go out to public comment if there's anybody online or in the chambers that has public comment.

There are no hands raised on it.

Thank you. We'll close that.

Chair, just on where the money should come from, I think that's a question that I think the full board should look at. I think we don't have information why... The analysis of why not the 478 fund versus the contingencies, if there's money sitting there available, and it would help to understand how long it will take to get reimbursed. But I just want the board to be able to look at, have more information on what other options and why staff is recommending this versus maybe the other two potential best options, alternative options to contingencies. Okay.

Yeah, absolutely. We can work with the sheriff's office, ensure that we do include in the board letter as it proceeds for additional options.

You said department, existing available departmental funds, 478?

And I know 478 fund is going to be changing names here. We moved over to Oracle. But the old 478 fund, we looked at as an option, seeing if the department can actually... Right within their current existing and then they get reimbursed, right? Or contingency funds. If we did the department, we would just need to increase their appropriations and revenue estimates based on what we believe the insurance would be. And again, it's going to be a timing issue on how fast after we sign the jock agreement that they can actually get complete and we actually get reimbursement. So that would be a timing issue potentially. And then obviously the contingencies as a 3rd option, jumping back to the 478 fund, we are aware and I know we're going to be working on the plan here real soon. There are a lot of competing priorities over that 478 fund that we're looking at that the board has previously identified as well as some other health and safety issues with other buildings that are definitely out there. There's more demand than the money is available currently at this time. So I know prioritizing. how we use the 478 fund is something going to be ultimately coming to the budget committee here soon with the recommendation of maybe seeding certain projects to get them started, as well as looking at existing projects that might have cost overrun. So I know those are items that are going to be coming to the budget committee and the board here, I believe, in the next few months. Okay.

Yeah, I concur. I'd like to see some options on that, too. I'm really hesitant to use contingency when we're going into an El Nino year, which could mean anything at this point.

Right. And some of those projects on the 478 list, this would be urgent, right, to get the money to pay, get reimbursed. But contingency, obviously, is for more emergency situations that come up, whereas some of those 478, there's some that are on there that need to be done right away, but there's some that if it gets delayed a few more months until the money gets reimbursed, I think... And that's what I think the budget should be. We should be able to have that analysis in these reports for us to consider. And then based on information here, the Civil Rights Church and I are able to recommend we looked at all three options and we concur with staff or not on why that. funding options, this funding preference is better than the other two, right? That's what I think the purview of this committee should be having, that analysis versus the capital, the CIP committee. This committee is in charge of kind of doing the analysis on the fiscal, what fiscal options are best to pay for a particular project.

Absolutely, Supervisor, and I know in the future that we will absolutely make sure that the portals are tightened up a little bit more.

Thank you. Okay. So I think we're Probably have a consensus to move it on, but we want to have these options and like to have these questions presented and so the board can understand what happened here as well. Yep.

Absolutely, sir. We'll take care of that.

Thank you very much. Thank you. Move on to item six, which is a report on the key capital improvements projects by public works facilities and parks. Lawrence, is that you or?

I think Lindsay. Yeah. Hi, everyone. Hi, Chair Church and Supervisor Leo. My name is Lindsay Lariable. I'm the Assistant Director for Public Works, Facilities, and Parks, and I will be presenting just a status report on the key capital projects we worked on in FY25-26 in quarters three and four. So that's January 1st through June 30th, so I'm gonna go ahead and share my screen. I have a presentation with pictures of our completed... I've requested access, if I can get that, please. Lindsay, I have granted you access to share your presentation. Thank you very much. I will be beginning. All right. Assuming everyone can see my report, I'll go ahead and get started. So for this reporting period, we had a total of 51 key capital projects. Those are projects over 100K or more, totaled close to $700 million in total project costs. Doesn't mean that we had all that funding right then, just means that's a total project cost for all those 51 key capital projects in various stages. You could refer to Attachment A with the, you could see where they are as far as their funding status and where they are in the percentage of development from design development all the way through construction. For roads and bridges, we had 28 projects totaling $280.5 million and facilities had 23 projects they're working on for a total of $420 million. So for this presentation, like I noted, I'm going to focus on the projects that we completed during this reporting period. First one is the G12 from Pajaro to Poondale Corridor study. This is segment six of that study from Salinas Road to Pajaro. That was a project cost of $735,000. It was implemented, I believe it was by, oh, Granite Rock. It was funded by the Highway Safety Improvement Program. And then in this phase of the project, we did some traffic calming efforts, cluster. to bike lanes and crosswalk improvements. And you can see those efforts in these photos. Another project that was completed was the Lake and San Antonio Water System. This was an ARPA-funded project. It was the last two remaining projects that we had to complete. There's three phases to this one. This is the first part of it because this is the intake from the lake of the water system. So you can see it was a whole brand new unit with the pipe going up the hill, which goes into the treatment plant. And so that was a project cost of 3.6 million again it was funded by ARPA, and this is the results of the project. Another project that was completed by PublixWorks was the Carmel Valley Laurelis Grade Roundabout Fabulous project. It was a project total cost 3.8 million and it was multiple funding sources, as you can see there. And this one from your traditional T, I guess you're from, well, it enhanced intersection through this roundabout efforts. It reduced delays, traffic calming, improved safety by reducing conflict points. So this is the results of those efforts. There are multiple projects that we're proud to show as we received those Measure AA funding and we delivered projects within the last, as soon as we received the funding, we implemented and achieved several projects. First one being the Measure A San Benicio Road overlay. This is a Tier 1 funding. It was a project cost of $1.13 million. It was in District 5, so you see here from 6th Street to Harper Canyon, about one little bit north of one mile. And again, this project was improving existing draining covers, implementing draining, culvert cleaning, tree trimming, various pavement repairs, resurfacing, with the hot mix asphalt understriping. So you can see on the top is what we were working with and below is the outcome of this project. This is another measure, but this is Tier 1, Rio Road. This project cost is $420,000. This is in District 5 from Atherton to Birch Place, approximately 0.38 miles. And again, this is just various repairs resurfacing and striking so again talk to or what were you started with in the bottom is the results of the project. Another major measure a tier one is reservation road overlay this project costs a little bit south of a million dollars, this is in district for garrison to East garrison drive so about point six miles. And again, this was various pavement repairs or surface scene with the hot mixed asphalt and we're striking the roadway again the top top left is what we started with the top right is the during and the bottom two are the results of the projects. And get other measure is Bradley road overlay this is project costs a little bit South that's 700 K. This is in District 3, so approximately 0.8 miles. And again, the same sort of repairs that we deliver, the various pavement repairs, the surfacing with the hot mix asphalt and restriping. Again, top two is where we started. And the bottom two photos are the results of the project. This is Measure AA Dolan Road Overlay Tier 1. This is a 2.4 million. This is from highway, a little bit back from highway into Casterville Boulevard, so approximately 2.2 miles. And again, the same level of repairs that we've done on the previous ones. You can see where we started on the top two and the bottom is the outcome of that project, the results of the project. You can even see that transition point in the bottom left one where we go from what we started with and then you can see the repairs and the results of the project. Measure AA, again, Blackie Road. This is Tier 2. This is a project cost of $430,000. District 2 from Merritt to Del Monte Avenue. It's about 650 feet. Again, various painless repairs, replacing the new accessibility ramps, because we do have some sidewalks in there, that area, resurfacing the road away with that hot mix asphalt, and restriping the roadway. So again, top two are the start and the bottom are the results of the project. And so that concludes it for public works tons of work we're going to have more to show in our next reporting period, but now i'm going to go into the facilities projects that were completed during this reporting period, and one of them is amazing. COVID-19 Memorial project, a very special project that costs about 380k it's special that we was a combination in private donations of tremendous effort and contribution by our Community. We did have some contributions by the District 1 discretionary funds and just a little bit from Fund 470. It was about $50,000. So it was completed in March 2026. You see the bottom left photo is what we started with. And the top left of the yellow panel is during, right before we revealed. And this larger photo on the right is the outcome of a lot of planning, collaboration, and a beautiful memorial for our communities. And then lastly, this is a health department implemented or health department project. It was upgrading their AC exhaust fans. So it was a $1.6 million. I think it kind of, that was a total, it got a little bit discoped, but this is the outcome of the projects for getting those upgraded AC exhaust fans in their laboratory. It was a federally funded project. It's something to do with laboratory and infectious disease grant or division. And I'm sorry, I don't remember the acronym, but this was a federally funded project to upgrade specific facilities like this one. And you can see right here, it did do the replace and upgrade the existing fan equipment and mechanical system in the public health laboratory to be able to withstand the demands of that laboratory. And that concludes the projects that we have completed during this reported period. Again, we're going to have a lot more projects to sew at our next year end, and we look forward to sharing Those funding, Measure AA, multiple funding sources, also from Fund 478. And I will stop there and open the floor to any questions. Thank you.

Yeah, I don't really have too much here. I know in the G12 one that you've started with there, it's at 95% complete. What needs to be done still?

If it shows on there. So what happens at the time of the end of the reporting period? So it probably is closed up by them. But usually at that point, it could be documentation just closing out. But it has substantial construction completion at that point, if it's at 95. Remember, we're three months past that. I tell everyone it's like a snapshot in time.

I understand. I just wasn't sure if there was a few odd things that might still be wrapped up.

It's usually just construction, the administrative construction. efforts at that point when we say 95.

Thank you.

Yeah, I would say I passed it frequently through PowerOS. I just want to commend everybody because it was done very quickly. It's very visible, the investment there, and they did a really good job. So from the bike lanes, as you can see here, and just the restriping, the repaving, it came out as a good enhancement for a quarter that's heavily utilized by both counties. And obviously all these projects are good. A picture says a thousand words. So, Lindsay, how can we... get these photos out so the community could better see as we give reports on what happened in the previous year, how can we do a better job of informing the community that we are putting Measure AA and other funds that come to the county to good use to do these types of infrastructure. The roads are what people see the most, but... I think the church and all of us always get fixed the roads. And these are examples that we are making those fixes. But I think we got to do just a better job of telling our own story as no one else will do it for us.

Absolutely. Well, we do work with our CIO. We do work with our district offices. So. And this is just another avenue. While this isn't a required standing report, this is why I wanted to come and share this because we want to be able to show these reports. So I'm happy to give this to the clerk of the board so we can put it in the legislature for public record. But again, we'll work with the county CIO and other efforts to continue to do that. We're happy to share photos if you would like to share them as well in your social media. We always... appreciate the opportunity to show the community how their tax dollars are being.

I guess it's more for our comps team. We got a comps team and if they could do that more regularly, right? Instead of us asking as these projects get done. To be intentional that we want to just tell these stories, not over overdo it on the social media side, but find those opportunities to put these images out and tell it. And obviously sending the photos to the supervisor so they could post it. So we get within our own within our own following. We could. show the community that we are doing these projects and putting the funds that they approved through AA to good use as well. The last thing I would just say is just I want to just thank you and the team on that very meaningful and heartfelt COVID Memorial because that did get a lot of publicity. I think an outlet from San Francisco came to interview us only because it was the first COVID Memorial of its kind by local government in the state of California. But I want to say that it was very easy working with all the team on a lot of these logistics from the artificial grass to even the plants, even going to the nurseries. Your team, we're total professionals. So I want to just say even wherever we thought we needed, your team came back, we looked at it, and we made it a better project in the end. So I just want to, having worked closely with you all on this, I just wanted to say how easy that was and that everybody that came put their best judgment for it. And in the end, it was a much better project than it started out to be. So I just want to give kudos to the team.

Pass that along. Thank you for that. Appreciate the opportunity.

Hey, do we have any public comment on this item? You'll be online. It's just a presentation. So I appreciate everything, Lindsay, and thank you very much. We'll move on then to item number seven, which is to receive a county Monterey CalPERS annual valuation report. I don't have anything on this right in front of me. Are you that you, Michael? Yes, I'm sorry.

Yeah, so I know this is going to be a little bit of a dry material a little bit, but annually as part of the county's retirement and pension plans with CalPERS, they do an annual evaluation to determine what our current county liability is and an assessment of what our assets are that are held with our pension plans. They have just completed the evaluation that ends June 1st. 30th, 2025, which determines what our unfunded liability payment will be for fiscal year 27, 28. We've had some good news with results, which I will go over today. As well, as we will just kind of quickly talk about a little bit about the pension, a little bit about the actual study, and maybe a little bit look into some of the forecasts that we do foresee that will change the future evaluations that we do have. We'll also do a quick little talk about the 115 trust fund that the county has set up. and potential modifications to what our plan is there, as well as maybe a discussion about establishing or looking at establishing a reserve target of the 115 trust fund. We did a little bit of work looking at other jurisdictions and what's best practice with that there. And so for future investments into that fund to actually grow it. So. With that said, I'll go through the quick presentation. I need to move some things around my screen. I can't quite see. But one of the main highlights with this actuarial report is our unfunded liability actually went down, which is a great thing. The county, as part of the CalPERS investment that we have, returned a significant investment on our assets that we do have invested with CalPERS. CalPERS, when they do the actuarial reports, they estimate about a 6.8% return And the actual return that we had during the fiscal year 24-25 came in at about $11.6 million. That is a significant amount of money, which actually helps us. Prior to this actual report, we were identifying a pretty significant increased cost in our pension liability, unfunded liability amounts over the next 5 to 10 years, where we were going to have to exceed, I think, over $105 million a year. for a three-year period. And just to kind of give a reflection of what that $105 million is, three years ago, the dollar amount that we were paying to CalPERS for unfunded liability was around $75 million. So we were going to have a significant increase based on the actual report. This report with the investment returns that we do have does smooth out that dollar amount. We do go up to $105 million, but we don't have a multiple, multiple, multiple years projected right now with $105 million. But we'll go over that a little bit more in detail. But our current funding ratio is 77.8. I'm sorry, 77.7%. We currently have assets held with CalPERS, about 77.7% of the liability. So that means we're funded at a pretty good ratio. The unfunded liability is at 890 million. Prior to this report, we were at 986 million. So we have about... How much? 986? 986, yeah. 986 million is what the report was, but due to the investment, basically primarily to the great investments of CalPERS, we were actually able to reduce our unfunded liability down to 890 million. Which puts our UAL payment for fiscal year 26-27, I'm sorry, for 27-28 at $97 million. That's about a $6.2 million increase from the current year payment that we're going to have to make. And so we're going to talk a little bit about strategy on how we might be able to work on that $6.8 million. And I'll just jump on to a little bit more in the details here on this slide and try to explain it. With CalPERS, we primarily have two different retirement pension plans. We have a miscellaneous pension plan and a safety pension plan for our safety employees. Identified on this chart kind of identifies based on the actuarial reports for each of the four preceding years of what our accrued liability was based on the actuarial reports and what... and how they're actually increasing. So I just want to quickly go to the miscellaneous accrued liability amount. You'll notice that based on our normal costs, our normal hiring that we have and our employees, our normal costs that do increase, salaries and such forth, the total accrued liability increases by about 0.2 billion every single year. So our accrued liability that we do have increases by about 0.2 billion every single year. So in order to maintain pace, we need our assets to increase by at least that dollar amount, if not more, which is a significant dollar amount. When you look at our assets, you'll see our assets are in a historical increase by about 0.1 billion. Then we had a 0.2 billion. And this last year, about almost a 0.3 billion. And that was primarily related to the investments that were identified for the miscellaneous. And I apologize. This is really small. We should have printed you guys copies if you guys don't.

Yes, we would have preached that in the future. My eyesight is special.

I apologize.

I thought we... I can get the copies for you.

Yeah, I apologize about that. So ultimately, you'll notice the very bottom line, which is our funded ratio. We started in 22 for this analysis here at a 74% funded rate for our miscellaneous portion and going up to 79.7%. So that's a good move to help our... Funding ratios in the safety plan. Same thing. Our safety was funded at about 65%. So, based on our current liability, we only had about 65% assets to cover that. That has also been increased now with the latest report going up to about 72%. So, overall, when you combine the 2, we do make a significant stride to that liability, which shows some strong fiscal stewardship of the county to continue with the payments moving forward. This chart is just basically reflective of what I just kind of quickly identified with the funding ratios going from 22 all the way up to 25. This is exactly what you want to see. You want to see a county making additional strides to pay off our potential pension liability. This county went above and beyond and created a 115 trust fund. I do like to note that the 115 trust fund, the CalPERS doesn't take that in consideration when you look at these funding ratios. But when you do add in that additional 100,000 that we currently have, 117,000, sorry, 117 million that we do have in our 115 trust, the percentages go even a little bit higher. This is just a breakdown for the miscellaneous plan, which I went over in the previous slide. I won't go through it again, but you can kind of see the unfunded liability for the miscellaneous plan. Ending fiscal year 2025 is about $600 million. For the safety plan, we're looking at about $281 million. Still outstanding between what the liability was identified and what our current assets are being held. So the total unfunded liability over the past, you'll see kind of the breakdown between what is safety and miscellaneous. Again, this just is another way to look at that large chart that we had about three slides ago. And again, looking at the combined unfunded liability, the dollar amount is decreasing down to $190 million. This slide I do want to talk about a little bit more, and I wish I had this one in front of you guys a little bit more to really understand what happens with our year-over-year unfunded liability. How does it go up? How does it go down? This slide is a good representation of some of the impacts that you really have that really causes your unfunded liability to go up, down, and I'll just walk through it, okay? We started the end of 6-30 of 2024 with both plans having about a $2.7, $2.8 billion of liability. Since then, the county contributed about $130 million towards that unfunded liability. We had employees that contributed as part of their pension plans, $40 million. We made payments out to the retirees of about $170 million. We had some refunds, so people that may have joined the plans and then left to get a refund back on any contributions that they made if they withdrew. We had some administrative expenses for CalPERS to manage it of about $2.3 million. And then some small adjustments completed. And then our investment return was $339 million. So I do want to highlight out that the main – Asset side of the house, the main increase to our assets out of the house getting up to 3.1Million is primarily related to that investment return of 339Million dollars. So that's the investment side. I'll talk about the liability side and the changes here on. I believe the next slide. Not there yet. So. This slide just kind of shows a historical trend, a little bit about CalPERS investments of our assets into their investment pool. You can see last year that for the one year look back, we're looking at about 11.6% over what they were estimating at about 6.8%. When you go back three years, they also have traditionally did better than their actual target. But when you start going back years 10 and 20, you can kind of see where the investments that CalPERS had at that time were not as strong as their expected rate of return of 6.8%. So we've been lucky over the last few years with some good investment returns being managed by CalPERS. We are also aware that they have changed some of their investment strategies and we're starting to see that.

Yeah.

Yeah.

This slide, I do want to just highlight a couple things here on what changes in the actual report and what you can anticipate. So, this report, I do want to cover is as of 630 2025. Okay. They. And I want to kind of cover just really 2 different items here and 1 of them is going to be the price inflation and wage inflation. As part of the actual report, they look at what the county pays wages in our... Oh, thank you, thank you. I'll pause just for a second to hand out the PowerPoint. I know there's a lot of...

Yeah. And in the future, any of the presentations, if we could get the handouts.

Yeah. I apologize. We sent it over yesterday. Yeah.

A lot of fine detail on this. I'm sure it's just like my reading for you, but it takes longer.

Yeah. I just want to kind of highlight, so inflation does take a factor into the actuarial estimates. So as we look at this report, in 2024, the total actuarial increase for price inflation went up by 2.3%. And the report that was just completed, based on the inflation of the economy, went up by 2.5%. So how does inflation impact our liabilities? If we have inflation that is going on in the economy and everywhere else, the liability portion is basically raised. So it is determined that our liability would raise. For wage, same thing. So if we do step increases with our workforce, if we do aging of our workforce where our average workforce is now making more than the previous year, those increases also have an impact with our liabilities with CalPERS, and that also raises our liability. What I really wanted to highlight on this slide is, again, this is as of 6-30-2025. In fiscal year 25, 26, we did do step increases and raises across the board with primarily a lot of our majority of our bargaining groups. We are also going to have increases in 26, 27 to those same bargaining groups. So, with those increases, you can anticipate that in next year's report, our actuarial studies are going to also have an increase to our liability. So I just want to highlight that out. Those increases in this category have been a little bit more than the. historical with the wage increases for our workforce. I just want to highlight that out with the forecasting of knowing next year our liability should increase, we believe, a little bit more than they did the year before based on that individualized factor. Let me jump down to Let me jump down to a couple other things. I'm going to skip over some slides a little bit. So what does it look like for our future payments is where I'm going to jump to. I'm going to jump to this chart here, which I think is on slide 14, which kind of summarizes . And what I really want to focus on is the far right-hand side, which identifies our total payments. As part of the actual report that happens, it is determined by CalPERS what our unfunded liability is. We, as part of that CalPERS, make basically over a 15 to 20-year term identifying that we're going to make payments towards that unfunded liability to ultimately get it down to zero based on whatever the current liability is over that 20-year period. There's a lot of different factors that go into, well, how much is it every single year? Why isn't it the exact same every single year? Some of those factors are how the certain losses or investment returns are distributed. Allocated as part of the master schedule, for example, investment returns have a 5 year ramp up. So, even though we made 339Million on our on our investment assets as part of the repayment schedule for the unfunded liability, those have a. I'm going to try to do this in English. I'm not going to do very well. Those have a five-year ramp-up period. So we don't receive the full benefit as soon as the investment return has been identified. We actually receive that over a five-year ramp-up period, and then it gets amortized over the remaining 20-year period. So as you can imagine, every single year you have investments or you have losses, they get smoothed out over time. So you don't have the real big hills and valleys, even though we're going to show you one. um and that is the same with the uh assumption changes as part of the actuarial report so what i really want to highlight on this slide here is when you go back to fiscal year 24 25 and what we the county had to pay towards our un uh ual payment uh we paid 75 million dollars uh in 25 26 that got increased up by 7 million up to 81 million going to 26 Sorry, I have something in my way. I can't see it. For 26-27, which is the current year, it increased by another $9 million, okay? When you go to next year, based on the new actuarial report, it's going to increase for the county by another $6.2 million, all right? And then it just keeps going up one more year to $103 million. And then we start going on the backside of the cliff where our payments start going down. So for the county, when you think of the forecasting, our pension liability expenses to fund our UAL, we are going to have a little bit of a climb on top of a mountain. And then we're going to come down. And based on this, it'll start coming down at fiscal year 29-30. So as a county, we created a PARS 115 pension account. What's on the screen here is just a compilation of the historical components related to our 115 account. And when was it created? It was started in June of 2021. The county contributed $8 million at the time towards to the establishment of our PARS 115 trust account. Those funds were basically transferred over in cash. They weren't invested at the time. And so that way you see that year, we didn't have any investment returns.

This is the 115?

Yes, this is the 1 15 and it should say 1 15 on the side here. I realize it doesn't. Yeah, in 2022, the county contributed an additional 9.9Million dollars. We had a bad investment year. We lost about $1.5 million that year on investments, but ended the year at $16 million. The following year, we added $61 million to help pre-fund our flexible pension reserve, which is a 115 fund. We did receive an investment gain of about $3.2 million. The following year, we contributed another $15 million towards the 115 trust. Great investment return of about $7.9 million on that total. In 2025, we had another great investment return of about 8.9 million off of those funds. And then in 25, 26 was the first time we actually pulled money out of the fund. And that was to help with the rising cost of our pension. We pulled 6.1M, which falls to our unassigned fund balance and it happens to be part of the 20M dollars that the board allowed us to carry over to help with the current budget year. So that's 6.1M a portion of that. I'm sorry. That 6.1M is a portion of the 20M that ultimately got rolled over to help with this next year's budget. We also had a great investment return on the Parzival 15 Trust. You'll see we gained another $10.3 million in that fund with our current balance as of June 30th, 2026 is $117 million. I like to put this in a different way. We county contribute $94 million and we basically through the investments and balance and return have grown that through this investment. This is significant compared to if you were to look at this same investment for this same dollar amount put into the county investment pool, you will not have had the same amount of returns. So, putting the funds aside to a 115 trust to allow them to grow very specific for a flexible pension reserve was a very smart move on behalf of the county. Another reason for the 115 Trust is to help counties and governmental agencies when you do have a spike in your pension costs, just like we're projecting over the next five years. We presented during the budget, the pre-budget workshop or the budget workshop, we presented at the time a plan how we were gonna be drawing down on the 115 Trust Fund from that time until we got over this hump. What you have on the chart here today that we're showing you is the updated plan based on the updated actuarial report. Based on the actual report will be more likely returning to the board to request that later on this year after we do a three year forecast and kind of see where we're projecting more likely we're going to be coming back to the board in December timeframe to request to allow us to draw down some additional funding of the one fifteen trust. of about 8 million to help us out with the 27-28 fiscal year. Based on the schedule, that dollar amount would increase to 12 million and then drop to 10 million, 8 million. So in total of the current plan that we're looking at for the 115 Trust Fund, we would pull about 57 million. Our recommendation is once it reaches the base year and we're using the base year of fiscal year 2526 is when we really started having our spike with our pension. Once we get past the base year of our dollar amount for the general fund component, we start contributing back to the 15 trucks. We did some research looking at what is an acceptable level of a 115 trust? What should a governmental agency like us really maintain in that 115 trust? And what it identified and the research came up with is it would be prudent for an organization like our size to have anywhere between one year to five years within that 115 trust. And so what does that mean for us? A one year is about $100 million. You know, you can see it on the sheet here. It's a, it's a, uh, $90 million, which accounts for one year of the current year. Three years, which is what we're going to be recommending ultimately, or at least what we'd like to propose, a potential three-year target. So after we start using the 115 Trust, we establish a policy or part of our fiscal policy that we try to maintain our PARS pension at a funding level at a three-year target. So a three-year target ultimately would be about $270 million to maintain. Now, how did we get there? Again, once we start having some savings of the previous years, our recommendation would be that we start putting that savings back into the 115 Trust to start building it back up to be very prudent as an organization to help us out with our pension liability. We are expecting, obviously, the pension liability to start increasing, especially with the state of the economy, the price inflation that's been happening, and the salary negotiations that we've all done, and we anticipate moving forward with our workforce growth. So with that, that's a quick down and dirty on the PARS 115 pension trust and our current plan that we're looking at to pull from our 115 trust. And I say current plan is we as a county are starting here. We've started this month and we're going to be having all departments do a three-year forecast. We're doing it a lot sooner than in the previous years. There's a couple different reasons why we're doing this sooner. But at the conclusion of that three-year forecast, which we plan on bringing back here to the Budget Committee, I believe it's November or October, to ultimately present what that three-year forecast looks like, and then ultimately over to the Board. At that time, we may be making a recommendation that we do move forward with pulling about $8 million for the 115 Trust to help us out with the future years. And again, that would fall to unassigned fund balance and help us do a carryover and help cover that increased cost and help those departments cover the increased cost of pension that they're really seeing. All right, that was a lot. So with that, that kind of concludes the quick presentation that I have. It wasn't that quick, but the presentation and see if there's any questions. I know some of the data there was kind of dry and a little detail oriented, but we wanted to present to the budget committee. We don't plan on taking this presentation to the full board unless the budget committee recommends that we do in some way, shape or form, but this is more or less planting a seed, at least what's to come. And some of the good news that we did have With the last XRO report and the great investments that we did have benefit from the assets.

It's a lot of information to take just dropped in front when it wasn't in the book too. It's kind of hard. So I'm still trying to assimilate. So, you know, I'll use my prerogative as chair and say, do you want to add me? Yeah.

No, I think, Chair, I think this is a very, Michael, this is a very important topic. When Supervisor Askew and I were on this committee back in 2019, I think that's when we advocated, along with your predecessor, Dwayne Woods, to create the 115 Trust Fund. And then I got implemented the following, or maybe it was 2020, got implemented that 20, well, that next year, right? And the board supported going that direction because this was one of those issues of pension liability. know many years from today is not front of mind to addressing the current um priorities of this board or the county at this time this is one of those issues that we're planning and putting money uh to the side to address this major uh balloon that's out there down the road for a future board and this county moving forward so sometimes these kind of issues and say why why deal with this now when We could just easily kick the can down the road. And I just don't think that's fiscally prudent. And I think it's this job of the committee and with our all our staff is to look at, OK, how we are going to address that concern. And this is part of a solution. And the the. All the numbers you just presented show that the pension liability is just growing astronomically, an amount that we can't even keep up with, even if we wanted to. But what we can do is put some money aside, especially when we get some reimbursements, when our budget's a little better, to put money into this account. And this is the first presentation I've seen where I could see, okay, what happened over the last year. five years, it showed it was a great investment. We put in $94 million, but the $29 million is like a 25% gain in those five years. So that's a really good investment by any standard. And so that shows that this was a good move for the county. We got a significant amount out of it. And what's good about this fund is that when the county does need to pull from it because of a tough budget year, we just showed that we did that this year. Past June, right? But I also, I raised concerns about doing that, right? Because it was the first time we did it. And yes, sometimes we need it because of the pressures that we got on the budget today. But but when I raised concerns about pulling from this account to balance our budget in June. I was told that we would reevaluate this when we looked at our unassigned fund balance, probably in October or November. And for this year, we would say, well, let's look at that unassigned fund balance and we have money that we could then put back into account. We would. If there isn't, then that's for the full board to decide. But this process that I'm describing was different than what we had been doing the last five years, which was putting money in there, and then getting a significant return except for that one year where it was a loss. but the other four years really showed the almost $30 million in added funding. So are we still going to be able to have that? Is the full board going to be able to have that analysis in October when we find out what's the unassigned fund balance?

Yes, absolutely. So we plan on having, and the reason we're trying to do our three-year forecast to also have it ready at the exact same time of the budget and the year report, which we plan on having to the board, I believe it's November, December. So we're going to have them both basically come at the exact same time. So at that time, the board can look at the unassigned fund balance to determine what's actually there. There's going to be more likely an ask or a request that the board reserve a strong portion of that unassigned fund balance to help out with our basically projections. So we would earmark that at that time. Also during that discussion, we're also going to be bringing forward potentially a look at the 115 Trust to determine Maybe there is a significant amount of unassigned fund balance that maybe we do not pull any funds from it. Maybe we throw some more at it. And or we also at that time during the unassigned fund balance review as part of the bear, we also look at some of the other capital projects or things that we do have that are identifying and popping up as life safety. But again, that's all for the board's discretion.

Right. So you had asked a question whether this should come to a full board. I think so, but maybe at that time. But it is helpful for the full board to be able to look at, hey, this has been a good investment, and there is flexibility within this fund to help us when times are tough. But at the same time, having a discussion with the board, what should be the goal for this fund in terms of what amount would we envision for years down the road about what would be a healthy amount to have in this account to address that future pension liability so those recommendations would be good at that time and this presentation would be good at that time but I think it would be helpful for the full board to know we did make a good choice here it is paying off but what goals should we have for this fund moving forward is a good question good discussion to have at that time absolutely

Yeah, I'm going to concur with that, too, I think, you know, because I really had this thing come across, you know, to fully grasp, and I'm just, you know, I'm sure Supervisor Daniels hasn't seen it much, really, at all, either. So, you know, it's just, it's one of these things that I think we all need to know what, this isn't a little bit of money, this is a pretty chunk of money here, we need to know what's here. That 51 million cap there, is that a, is that by resolution? I mean, is it

uh, 51 million.

I mean the, the, the, the general under the general fund column, the 51.5. I'm looking at the back page. Back page. Oh, um, That's a great question.

I didn't explain this going through that. I kind of glossed over that slide. Let me see if I can reshare my screen for those on the call. And I'll explain that a little bit more of the columns very specifically. Okay, so As you can imagine, the county is more than just the general fund component. And so what that 51M dollars identified there as in the green is just the general fund departments specifically. So what's excluded from that? The column to the left, which shows total payment includes an activity at medical center. It includes your enterprise funds that sit outside of the general fund. And so what we do is, historically, the county has not helped out those agencies with additional general fund as part of their pension. It's assumed that they would absorb those, including behavioral health, within their own coffers and their own funding streams themselves. The column to the right, which shows general fund, which works out to about 67% of the pension costs, of the total pension costs, ultimately goes to the general fund departments. That dollar amount going into last fiscal year was $51 million. And then current year, that's up to 57 million of which we are helping departments augment using 6.1 million of the 115 trust. I hope that explains it a little bit, but we use the 51 million as the base year, because that was the year that we really based off of pulling the 6.1 million when we developed the budget two years ago.

I don't know. I mean, I noticed we're trying to balance that off. That first shift, 24-25... Because it's below $51 million, it's not what we should have put in for.

Great question. So if we would have established a threshold at some point, which I think is what I hear absolutely supervisor Laiho identifying, that we do potentially put a threshold in there and then make it a target. Anything that goes below here goes into the 115 trust. Anything that goes above, then we pull from the 115 trust as kind of a mechanism.

That's just it. Okay. All right. I mean, I think we look forward to actually seeing this connect to the board and, you know, having fresh eyes on it again and maybe, you know, taking a little deeper look at it. As I say, it's just... There's a lot. There's a lot here and not having... You know, it would take a little time for me to... before you did a presentation to really review this, to really get a grasp. A lot of the supervisor, Leo, was here when this was being formed. He's got a step or two ahead of me on that, but I really do think it'd be good to bring it to the whole board because we need to know what we've got here.

Yeah, and I hadn't seen this chart on the very back page, but staff is proposing looking at tapping into this fund for the next eight years, right? If it's needed. Correct. Yeah. Not to say we're going to do it for sure, but just saying potentially we'll take it year by year, but this is what we're looking at. And it would be important for the board to also look at how we're planning to reach a balanced budget, utilizing some of by tapping into this account, at least until things turn around here on year nine.

All right. Is there any public comment on this particular item?

I see no hands raised.

Thank you. It's just a presentation as well, but we did recommend to go forward to the full board discussion.

We'll absolutely take this to the full board and we'll maybe add a little bit more into the demographics component. I bossed over the demographics, but there's a lot of moving parts to why an actual report can go up or down, the age of the retirees, if it increases, that causes an impact. but we'll present this to the full board um as recommended we might add on a little bit more and maybe solicit uh uh debbie pain alley who's on the call here who happens to be an expert in this area uh so we will we'll we'll keep that in mind that debbie's the extra yeah um all right and then our last item on here is uh the budget committee draft charter Yeah, so this is also me. And first off, thank you very much, Michael, being the assistant CEO for the county. What I'm going to go over is something you should have in front of you, which is a draft charter. This is something new that we're going to be potentially looking at, and we're using the budget committee as a first example, and then potentially we'll roll this out to some of the other committees that may not have a very specific board-approved charter. Back in October of 2025, We presented to the Budget Committee a potential change on how and what items should be coming to the Budget Committee. And as a result of that, we made some changes administratively to deter some of the items that were coming to the Budget Committee. We understand that maybe we went a little bit too deep and so we're trying to be very cognizant of that and maybe try to set some clear expectations and ensure that this is what the board and the budget committee expects to be coming to the budget committee. And so what we try to do is just a quick little charter, just covering the highlights. And what I'm going to really start with is section three under the responsibilities. I want to go through those. And then I want to go through number eight, which is the agenda items required to be submitted to the budget committee. We are aware that there's an item missing on here. The board did give us direction that any contingency amount above, I think, is $125,000. Is required to come to the budget committee. Uh, so I know that's missing in this report. And so I know we need to add it, but, um, um, But just to start us off in the responsibility section, and I'll just kind of go over that section. But the budget committee is ultimately responsible for receiving and reviewing monthly financial reports prepared by the CAO's office. We, in working with our county budget director, want to start bringing here on a, as soon as we get past the first quarter of the year, want to start bringing financial reports to really reflect the health of the county, both on salaries and benefits. and doing a projection. We'd be able to identify any departments that might be having cost overruns very specifically, as well as looking at our salaries and benefits, services, supplies for the county, but on a very routine monthly basis. And again, our game plan is after we get past the first quarter, start having some actuals, we'd be able to start doing a forecast and projection component there. We'd also be looking at, uh, any departments that are having specific budget problems that we would identify during the board that we've bring those items here. Any department that did not meet their budget general fund dollar amount, uh, from the previous year, we'd be required to come to this budget committee every single month. Uh, right now we're aware of the sheriff's office would be in that list. We have worked with under sheriff Boyd. He has agreed, uh, With the sheriff's office, they've agreed that they'll be presenting with us. And again, the game plan is after we get past the first quarter. Start having some real actuals advising on development of budget priorities and policies. We'd bring that to this budget committee as well and recommending any action on specific agenda items that may be to the board supervisors. If there's a cause of concern or political arena, federal state change that pops up that we would bring here, then ultimately recommend that if it rises to the board. Example would be the first one, 15 trust that rise level. You guys down by that should go to the board and again, reviewing mid year budget status reports, annual budget schedule and the budget format automation. And that goes from the previous makeup of that was in the original budget committee makeup. Now, if there's no questions there, I'll just jump to number 8 and talk about the agenda items required to be submitted to the budget committee. We're hoping this kind of covers the main general, but financial status and forecasting items. We absolutely want to bring to the budget committee again, monthly county financial reports, the county financial forecast updates. So we are doing the forecast early. Mid-year budget status report, bringing it here before it comes to the Board of Supervisors.

You dismiss.

Oh, I'm sorry. Here's people don't need to see. Thank you. Thank you. Any budget modification requests the department is making that is significant of nature. We would bring to this budget committee. I think this is an area where we. uh, got a little, uh, we allowed to go directly to the board and we heard very clearly from the board that, Hey, that should have come to the budget committee. So we make sure that we bring those here. So that's for budget modifications, uh, anything related to an appropriation adjustment related to any grants, uh, Specifically, any newly awarded grants that may have alternate impacts so they can be fully vetted out. Items of significant fiscal impact. So as we are looking at one-time cost implications or substantial ongoing costs might have because of a contract, we would bring that here and require departments, as we're doing a gender review process, To make sure that they do come here and again, any departmental budget issues, any department that exceeds of general fund contribution in the previous fiscal year. To ensure that they, we monitor them a little bit more. Monitors may be a strong word, but that we assist them in the proper fiscal management. Other general fund contribution, there may be situations where they need additional general fund just because of operational component. Any budget problem areas, requests that may affect service levels, major equipment, new initiatives, budget policy process items, so annual update to the county general financial policies we would bring here, budget format, Capital related fiscal items. So, again, anything related to the couple projects that are physical in nature, we're going to run long. We'll bring those to the, but also to the budget. And any special revenue fund oversight, such as measure a, on a high level for tracking purposes as well as. through that medical center. We continue with their report here to the budget committee and any other special revenue that might pop up across the board. That's kind of a quick, not quick, but that's kind of the items that we were at least putting on paper and moving up for any discussion that the board may have or additional items or that we want to make sure that we do include. The game plan would be that we ultimately take this with whatever recommendations may come from the budget committee to the board for an adoption component and potentially additional items that get added. We did also want to potentially add, like, how do additional items get added on here? I know we discussed about any time during a board meeting where the board says this item needs to go to the budget committee, it automatically gets added. And then we would start tracking it, and then you guys would have a list saying here's the items that were added, this is when it was added, and this is why. Okay.

Yeah, that was one addition I was going to suggest is, you know, something, you know, put on by order of the, you know, the board out of here. I'm actually wanting a clarification on five. Is it the state's agenda mindset to be submitted through a legislature and must complete review agenda ready by noon, seven calendars prior to the date of committee meeting? Kind of the policy we do with. With with item for the general board, and I assume that's what you're referring to here.

It is a little bit so for the budget committee, because we actually have our budget and let's try to review them and we want to make sure that if it's significant in nature that we try to get it to the budget committee a little bit more ahead of time of nature. It is close to the same timeline that it is also with the more.

Okay, yeah, I do feel that there is, you're saying this is how it's going to be done, but I think you need to put in here something about for emergency items. You know, there has to be, you know, there's going to be instances that will come up, fire, timber fire or something like that. And, you know, our emergency manager needs something done out of here. And I think there needs to be a path here for that to come in.

Absolutely. Absolutely. We can, we can, we can talk about language.

Yeah. Yeah. I would just want to, what I want to make a comment that the way I see the budget committee, it's a, it plays a very important role. When I was in the legislature, if you had a bill, well, almost all bills, if they had a financial impact of $150,000 or more, I think now it might be $250,000, the threshold, they would all go to the policy committee, sometimes double referred to one or two policy committees. And then if it had a financial impact to the state, it would then go to appropriations committee. And that's where a lot of the appropriations committee was always a very powerful committee up there because that's where a lot of bills would go to continue or they would die in appropriations. But the role of appropriation was to look at the fiscal impact of a particular piece of legislation. This budget committee is obviously a little different, but I think this is where I think it gives proposals that are moving through the county. If they get referred to a committee, we should be viewing it as a significant figure. Financial impact in these areas that you just outlined, we should expect them that they're going to come here for an additional analysis, really focusing on the fiscal impact or fiscal options. And that's why then when it goes to the board, they looked at the. the traditional aspects of a project, but then we could also tell the board to the supervisors did a deeper dive on the financial side, and this is what they recommended, what would be the best option for the board to consider supporting. Also, there should be expectation that what's on this list or big projects should come to this committee unless, and if they need to, if there's some reason that it needs to be expedited, just like other policy committees, that it should get approval by the chair, perhaps just informing the vice chair too, because sometimes just something comes up real quick and it has to go to the board because of a deadline. But that should go through at least the chair and at least inform the vice chair. And that way, when we're at the board and they said, hey, did this go to the fiscal budget committee? We could say yes or no. And if it didn't, this is why, because there was some urgency. But I think the things you outlined, just my concerns, because you're getting feedback from us. I think D for me was a significant 1, if it has a significant 1 time or ongoing impact, it should come here because there has been a few items where he said it didn't go to the budget committee, but it should have. And I'll just give some recent examples why I think that was helpful. Most recently for me in my district was the behavioral health center. It started out with a $20 million grant that was supposed to be in the old jail. That got changed, and then it became a $50 million. And then it ended up, I think, a $172 million project outside of debt service, right? And then the debt service added, like, another $100 million. It was for, like, 100 beds. And I think I calculated. I think it was 1.5. or I think it was $1.8 million per bed when you factor in the debt service. I think it was like $2.9 million per bed when you factor in the debt service over the 30 years, right? So $172 plus another $100 million, whatever it was, it was almost a $300 million project. Divide that over the 100 beds, it was very significant. But the board never had the analysis, okay? Why did the cost increase? what are the impacts of adding the debt service and how would that factor into other needs, right? If in the end we were paying, I think it was gonna be like seven, $8 million a new payment that we have to do each year just to pay down that project, what would it mean to other services and other demands we're getting from the 27 or so departments? For me, that would have been a great analysis, a deeper dive for such a significant, high-cost project in this committee, rather than trying to do it at the full board without having to giving an additional shot here in this committee. The other one that came to mind is also the Oracle contract. I think the last one was called ERP. That one had significant overruns, a lot of contractual change. I think it was over 60 amendments, and it was in the millions of dollars in overrun. And then we brought it to this committee, and then we were doing regular check-ins on that. The other one that comes to mind is the seaside social services. That one's recently moving forward. I was on the CIP committee that looked at like the architectural plans, what is the best plan? But this committee should be analyzing what are the best two options funding-wise, the $60 million or the $120 million? And again, what would that mean on an ongoing basis, a new expenditure that we would make that would perhaps take away from other demands that we have from our departments? So that's why I said giving an additional shot plays a very important role, but we're able to do that deeper dive here and then tell the full board when it gets there, this is what we're recommending on the financials for this particular proposal project for these reasons. And those are the three examples that I think that illustrate why – Bringing those major projects one time and then the ongoing cost really matter for us to have a thorough review here.

Is there any public comment on this matter?

There are no hands raised.

Thank you. I don't have anything further to go with. We can adjourn until.

Do we need to approve this though? This is a recommendation, right? Is there a draft charter? Are we providing a recommendation to support this?

Based on the recommendations and the changes that are some of the additions that it sounds like I just heard, we can either A, make those changes and bring it back Uh, to the budget committee for 1 more consideration at the next time, or we can move forward, send it to the chair to ensure that that was the intentions and then go to the board for adoption.

I mean, I'm happy to pass it on with the recommendations. Yeah, I think we are perfect on that.

And it would include that process of making sure if it needs to be expedited, it would be done with consultation with the board of the chair of the committee.

Yeah, it would provide housing approved by the chair or vice. And it's a notification of the vice chair. Yeah, I have that.

Okay. That's good. And we'll meet again on September 30th.

Great. All right. Thank you.