City Council - Regular Meeting

Good afternoon. I'd like to call the 4 p.m. Special City Council meeting slash workshop to order. Madam City Clerk, may you call roll, please? Council Member Warren.

Here.

Council Member Warren. Here. Council Member Stone. Here. Mayor Pro Tem Holliday. Here. Mayor Lavelle. Let the record reflect all members are present with the exception of Mayor Lavelle with an excused absence.

All right, at this time, if you're able, please rise, and Council Member Warren will lead us in the Pledge of Allegiance.

Please remove your hat, stand if you're able, place your right hand over your heart, and repeat with me. I pledge allegiance to the flag of the United States of America and to the Republic for which it stands,

Thank you, Council Member Warren. You're welcome. And Mr. City Manager, did you have any comments for the beginning of this workshop? No, we can go right into the agenda items. OK. Well, we're going to take public comments on agendized items only. Madam City Clerk? Broke the microphone.

Mayor Pro Tem, we actually have public comments on both workshops, but if we could take the public comments at the item as it's presented, is that okay?

Fine with me.

Okay.

All right. So the initial one is report on long-term strategic economic planning and revenue generation options. I believe that's Finance Director Carcombo and Mr. Mendoza.

No?

Deputy City Manager Agajanian and numbers. This is unusual. Laughter

Good afternoon, honorable mayor, city council members, city staff, and members of the public. My name is Javier Carcomo, director of finance, and along with me is Mr. Scott Akagenian, deputy city manager. This report was prepared in response to a request from city council member DeForest. The purpose of today's discussion is to evaluate the long-term economic development opportunities that can provide the greatest economic benefit and revenue potential for the city. The presentation focused not simply on growth, but physically sustainable growth to support city services and enhance the quality of life for our residents. The city's objective should be pursue economic development strategies that diversify revenue resources, create quality jobs, attract private investment, and maximize the return on public infrastructure investments. When analyzing all revenue sources allocated towards city operations, sales tax and property tax together account for over half of the city's revenue base. Long-term economic development strategies should focus on strengthening these revenue sources. Diversifying revenue helps reduce financial risk during economic downturns. To further analyze and understand Marietta's sales tax base, this slide summarizes the largest contributors of sales tax revenue. Marietta's sales tax base is concentrated among a relatively small number of businesses or business types. The general consumer goods and autos and transportations make up approximately 50% of the city's sales tax base. It is noteworthy to mention that autos and transportations account for 20% of the city's sales tax primarily due to five car dealerships we have in town. In summary, big box retail, automobile dealerships, and few retailers are major contributors to our sales tax base. Future growth should focus on expanding these successful sectors while diversifying the city economic base. Property tax is the second largest revenue source and represents approximately 25% of the city revenue budget. Residential neighborhoods remain the foundation of the city's property tax base. However, commercial, office, healthcare, and industrial development generally generate greater assessed value per acre and often requires fewer services than residential development. Property tax growth provides stable, long-term revenue for the city. Transit Occupancy Tax, also known as TOT, is one of the most desirable revenue sources for cities because visitors pay the tax. The city has been actively discussing development opportunities for new hotels. Marietta's current TOT rate is already amongst the highest in Riverside County. Therefore, future growth opportunities are tied to increasing hotel inventory and visitors' demand rather than increasing tax rates. Economic development efforts should focus holistically on all business sectors that generate strong, consistent revenue sources, offer quality employment opportunities, and support long-term fiscal sustainability. These business sectors generate strong revenue, provide quality employment opportunities, and support long-term economic stability. This industry includes automobile sales. The city's auto mall remains one of the Murrieta's strongest economic assets. Development of new opportunities for additional automobile dealers, luxury and specialty vehicles, and vehicle services are highly desirable. regional retail and shopping destinations such as large format retail centers, specialty big box retailers, open air shopping districts and dining and entertainment destinations, as well as, also as well as highly desirable. Healthcare and technology align particularly well with Murrieta's existing strength and workforce. A balanced economic strategy should include both revenue generating retail and high paying employment sectors. As part of this request, the reports provide a comparative analysis of three key development opportunities currently in the pipeline. This analysis includes potential uses and primary benefits. The Jefferson corridor, including the Madison-specific plan area, represents one of the city's most significant long-term economic development opportunities. This area has the potential to become one of the city's primary employment and revenue generating district. Strategic infrastructure investment in this area can support significant future returns. Potential uses includes expanding the auto mall, hospitality development, corporate offices, and technology and innovation businesses. This type of development supports sales tax generation, property tax growth, and job creation. This area offers a strong potential to become one of the Marietta's primary employment and revenue generating districts. The Triangle has a strong potential to become a regional destination. The potential uses include entertainment venues, dining destination, specialty retail, and hospitality development. This type of development supports sales tax generation, property tax, and TLT. The key whole area supports population growth and future consumer spending. Together, these areas support a balanced economic development strategy. To remain competitive in attracting private investments, the city may consider incentives. Any incentive program should be performance-based and designed, excuse me, to generate a positive long-term physical return for the city. Example of incentives includes a revenue sharing agreement, development impact fee reimbursement, permit fee reimbursement programs, expedited entitlement and permitting process, public-private partnerships, infrastructure participation agreements, and development agreements, just to mention a few. Economic development should remain the city's primary revenue. generation strategy. However, City Council may wish to evaluate additional revenue tools in the future. Any revenue measure would require community engagement and voter considerations. Some of these strategies may include a sales tax, specifically district sales tax increase. Currently, we have Measure T with a 1% districts 1% district sales tax. This could go up to a 2% in the future. Currently, we have a 13% TOT rate. This is, as I mentioned to you, it's one of the highest in Riverside County. I think growth in this area should be focused on additional hotels development. And then lastly, utility user tax. Currently rate this year does not implement a utility user tax. This could be a future policy option or for council considerations if additional revenue diversification is needed. In summary, the strong long-term strategy is to diversify Marietta's revenue base through commercial development, hospitality investments, healthcare expansion, and technology-oriented employment, as well as destination retail opportunities. Economic development should be viewed as a long-term investment strategy. The city should continue to focus on projects that generate sales tax, property tax, quality jobs, and visitor spending. to achieve healthy, resilient local economy. All of the aforementioned revenue strategies should work holistically with the balance of growth in residential and commercial sectors. We need residents with income to create demand. We need retailers to supply products and services to meet the demand. We need high-paying jobs to keep residents with good incomes, and we need a nice community with good services so people with income want to live here. With that, our presentation concludes. City staff is seeking council discussions and policy directions regarding future economic development opportunities. Thank you.

Thank you, Javier. Before we go to public comments on this, I wanted to open the floor to Councilmember DeForest, and she asked this to be brought forward to see if she had any thoughts that she wanted to add.

Thank you for the great report. Thank you for putting some time and definitely some energy into looking what is our highest generators of taxes and where the city, if we are going to maintain sustainability and to maintain a very high quality of life for our residents, I think this is something very important that we need to continue to look at, and I appreciate that. Also, having some incentives to some various different businesses coming in, maybe a fast-track system or something like that, I think, to get them through planning or some of the developmental pieces that we might be able to do to get them up and running faster. I... I appreciate the floor, Mayor Pro Tem, and I have a couple questions when we get to that point, but I really appreciate the time that you put into this, and I think it's very important, and when you look at other cities, I know I was looking at Irvine, and my best friend lives next to one of the Coronado City Council members, and they have a strategic plan and what they're going to go after for businesses, so I think that it's very important for us to look to the future I know being a businesswoman that that's important to me as well, whether am I going to meet my bottom line, especially with the economy being what it is, and our labor force going up so dramatically. So thank you so much for this, and I'll listen to if we have any public comments moving forward and speak again. Thank you.

Did you want to ask your questions now?

I certainly will, yeah.

Go ahead.

Could you explain a little bit more about the utility users tax? Could you elaborate on that a little bit?

Yes, of course. So usually this is a utility users tax is voter approved. In essence, it is a tax that is added to a homeowner's property or any dwelling based on one of their utilities as a line item. That utility has the Tax revenue has to be specific to certain services, and that could be assigned to something specific such as public safety, road improvements, so on and so forth. Currently, the city does not have one, or have established one. There are certain cities in our Riverside County that may have those. I believe there are about five or six, but this is not very common.

All right. you know, being a wonderful Californian and a seventh generation Californian, the one thing we talk about here is being taxed to death, right? So as I appreciate utilizing a utility user's tax, I really don't unless my rest of my colleagues are thinking otherwise. That's very challenging, especially to ask our residents to pay for that. So I think that if we have a sales tax, a 1% sales tax for our police and fire, our first responder tax that we kind of call Measure T, I think that's one thing, because you can choose to purchase something or not. That is by choice. So I'm still very strongly against making our residents pay more taxes, but I understand why you put that in here, because that's an option. What is the closest city to us that has something like that?

Let me check here. So we actually have a list. So there are 28 cities within Riverside County. Of the 28, nine has a utility user tax. The closest one, they're all... Canyon Lake is the closest one, it seems like. Most of them are in the northern part of the county, so in the lower deserts. Desert Hot Springs, Coachella, Indio. Moreno Valley is probably the next closest one to us.

I appreciate all the time that you took to answer all these questions and to make sure that you had the answers. Of course, I didn't give any of you any warning, so I appreciate you being so thorough, and thank you so much for bringing us information, and I look forward to the rest of my colleagues and kind of where they're thinking with this issue as well, so thank you.

Thank you, Council Member DeForest, and we'll move on to questions from Council Member Stone.

Thank you, Mayor Pro Tem. Scott, tell us all the events that you attend throughout the United States in promoting Marietta.

Thank you, Council Member Stone. You want me to tell you all of them? Yes. I will tell you an anecdote. When you walk into my office, there's a little tree, and on that tree I hang the badge from every event we go to. You can no longer see the tree. We're halfway through the year. So we just came back from a conference yesterday. We go to every major conference from ACRE to ICSC, as you know, when we're focusing on retail. We attend all of the commercial real estate events we can find, and we also host some of our own. So we're constantly out trying to advocate for the city and try to make sure that we're meeting everyone we possibly can to build relationships. And thank you, Council Member DeForest. You're a lifesaver.

So let's talk about the one that you went to in Washington, D.C. So tell us what your target audience was and explain the positive outcome that came from that.

conference certainly um so we're a part of the california delegation that goes to select usa select usa is the u.s department of commerce's event to try to recruit international companies as javier very like rightly pointed out we tried to take a balanced approach to economic development the city of murrieta has a lot of retail and even though it seems like some other cities have more six million square feet is substantial and you have to have enough residential and enough tourism to make sure that they're being successful. So we do other items to try to make sure we have a diversified economy. And this is one of those items. It focuses on international companies that are looking to come to the United States. We go as a part of the California delegation to bring international companies to California. And then specifically, we look for biotech companies. And at this event, over four or five days, we probably met with 50, 60 biotech companies from international, from all over the world. We've already signed two agreements to bring two of those companies back. We always come back with a new company every single time. We never miss out. In addition, when we held the grand opening for the Innovation Center, We've recently come to negotiations. I believe we finalized a contract to bring in a private wet lab company that's a biotech company that's out of San Diego County that wants to come up here. So we've consistently delivered on bringing new companies. That's part of your farming process of building new companies from within. Javier points out that most of our sales tax revenue comes from the top 25 businesses in the city, but most of our employment comes from everyone else. So it's really important that we have a balance of both so people have the opportunity to make money here, spend money here.

And how do you measure the success of ICSC?

So ICSE, very similarly, we base it on results. If we weren't coming back with new companies from ICSE, like we have this year, then we wouldn't continue to go to ICSE. Recently we held our latest brokers event, and our turnout was a little small. We only had 20 people come out to it. But we're also in negotiations with one of them to try to market a new auto mall in the city. So if we get good results out of low turnout, that's okay. ICSE specifically has some new tenants that are coming to the city. One of them, you were involved in the conversation, that's made an offer on a space. in Murrieta Town Centre. So as long as we continue to get offers in our spaces from going out and recruiting new tenants, then it's worthwhile. I always say it really matters, but it doesn't matter whether or not those deals get done. We don't control whether private market decisions happen and the buyer and seller get together and make a deal. That is outside of our scope. Our job is to get offers coming in.

And tell us about your partnership with the Chamber of Commerce. And attracting business to Marietta?

Some of these largest events we do, we do in partnership with the Chamber. So today, the rest of the economic development team, Martha and Heather, are with Patrick at a conference called BIO. I was there yesterday, but I didn't stay the whole week because my team is down there negotiating and working with new businesses for the week. But Patrick is there as a part of it, and he actually paid for the booth that they're staying at to go and recruit new companies. So we work together all the time on different events. He comes with us to ICSC, so a lot of the major conferences we do together as a team.

With regards to developing these relationships, whether it's biotech, whether it's auto, whether it's retail, whether it's medical, when you're out there promoting the city of Marietta, what are the top three things that are a positive and what are the top three things that are a negative?

About the city? Correct. So when we promote the city of Murrieta, we start with public safety. This is a safe city. People still care about having a business in a safe city where they know they're protected. So people like that. People also like centrality. So we often promote the fact that if you throw a dart into the middle of Southern California, you hit Murrieta. We are right in the middle of all the major markets. It is a great sales pitch to be able to tell people that CarMax came to Murrieta because they could be in the middle of the LA, San Diego, and Orange County markets. So centrality is very, very important.

And they're the number one CarMax. In the United States. Correct, right here in Marietta. And they're expanding, correct?

Exactly. Okay, continue. And then the third would be our demographics. So our income's 157,000. Average family income is extraordinary. So we have Orange County, San Diego demographics and Riverside County pricing. And then when you talk about the bottom, we don't talk about those. Why in the world would I...

But what is it that... Well, I could tell you when I... Do you want me to tell you why not to come to Marietta? When I'm at ICSC and I hand my car to a potential new business... Oh, California. Yes, that's what...

I mean, we acknowledge the challenges of doing development in the state of California. We always acknowledge the fact that, yes, we're in California, but we try to be as un-California-like as we can in terms of trying to help people get through processes to the best of our ability and be a partner with them throughout the process. So...

I truly believe because I talk to you regularly. I'm always picking your brain and I'm always sending you on a chase to bring businesses. I even take you on field trips as well. I believe, and this is the only city that I've ever represented, but I believe that we have a phenomenal team that is out there trying to bring businesses internationally, nationally, and even locally to the city of Marietta that is ongoing. I did a little research myself, and the average household is 3.1 in Marietta. Let me know if I'm wrong. Home ownership is 88% still, which we know that those statistics over the next few years will change. And who lives here? Married couples? school age children, seniors, and veterans. And what is the draw to Marietta? I would say right now that Marietta Hot Springs is a major draw. And I'm not talking about our Marietta residents, I'm talking about outside of Marietta. I don't know if there are statistics that Marietta Hot Springs can share with the city of how many guests are not from Marietta versus Marietta. I think that that would be very interesting. We are known as the outdoor community. There's a lot of hiking going on. There's an area off the 215 freeway where you see food trucks, where Marietta Hills, I think it's called, that's going to be landing 700, I think, 750 homes. And we have to identify what is Marietta. And I also believe that, and also two thirds of the workforce here are white collar as well. We have, thank God, Keller Road that is out of the environmental process now where we can hopefully raise the money and start the construction and then Our hospitals are going to expand, which will be bringing a target audience of employment, which is going to be very, very exciting. In my opinion, I believe that we are doing the best that we possibly can. The economy definitely has changed. We're seeing the economy slow down. We're seeing it not just in Marietta, but regionally. Things are starting to slow down I'm excited about the Golden Triangle. I think that that is going to be something that this region has never seen. And I'm looking at out of Marietta tax dollars. We also are competing with the internet. And so we've done a couple of things, I think, that were innovative. And that was during the ARPA times, we had that program where you... bought a gift certificate, and you got double the value.

The Myriad of Money Match, and it still exists online.

There's just no match. That was an amazing, very, I believe, successful program where I think, I don't know what the percentage was, between 40% and 60% were from outside of the city of Myriad that purchased those cards.

Yes, absolutely, and that is one of many different types of shop local programs that we try to run.

I'm not sure that legally we can do that, again, with our funds, but maybe that is something that the Chamber possibly could do because, again, that brings in out of the area tax dollars, and it also supports our small businesses, and our small businesses are the backbone of this city besides our country. So we have some phenomenal things going on in our community. We have the Golden Triangle. We have, in the future, we have Merida Hot Springs. But one of the areas that I believe we have missed, and that is an outreach campaign outside of Marietta. We had, I don't remember the name, but it was the Dennis Quaid group that came here that did a filming that was on TV somewhere, somehow throughout the United States. I don't even know where, when, or how it was even on TV. It was a great marketing piece for Marietta, regardless whether it was for this show or not. No one even knew that this had even happened. We never promoted this opportunity that our city was acknowledged throughout the United States. And I do believe that you are doing a great job, your team is doing a phenomenal job, but the component that I believe is missing is the marketing piece that shows and highlights the quality of life that we have here in Marietta. So you're out there promoting, you're solidifying businesses that are coming to Marietta, and we're doing nothing to promote Marietta. We have to think outside the box. And that is something that I think that is the step that is missing to promote our Father's Day car show. The mayor and I spent some time together and everybody that we met was not from Marietta. We have Tour de Marietta that the majority of the people are coming from outside of Marietta. We have people coming from three different countries to compete here. We have our Rod Run. So I think by still advocating for Marietta and what you're doing is pretty phenomenal. I think that we do have quality life. We are one of the safest cities in the nation. We're still affordable here in Marietta. And once they leave Riverside, if you can't buy a home here in Riverside County, where are you going to go? We're the last affordable county in the state of California. They're going to leave. So. I believe that we are missing an opportunity of highlighting Marietta. Let's take the $34,000 that the EDC was wanting us to participate and let's take that money and figure out a strategic plan on how we can promote our city outside of Marietta. And I think that that is one of the gaps that we could close to help Financially, if we can get these out of the city tax dollars to come into our city, I believe that that's the solution. Thank you for allowing me the floor, Mayor Pro Tem.

Certainly. Council Member Warren.

Thank you, Mayor Pro Tem. Both of my colleagues have made great suggestions and asked some very great questions. I do believe Explore Marietta is doing that, but maybe we can ramp that up and reach a different marketplace. That's always something I think we can look at. I think the numbers that we have received have come back very favourable. lots of clicks, lots of looks, lots of staying on a page. But I think if we did a little bit more, I don't know, innovative stuff, I think Council Member Stone hit a very key point there. Internet sales. We are receiving some income from internet sales, is that not correct? Could you elaborate on that for me, please?

Yes, actually our online purchases, self-stock generated from online purchases is the third highest sector in our sales tax base. So behind consumer goods and auto sales, online purchases are the third largest for sales tax base.

And that activates when it's delivered to an address in Murrieta, is that correct? That's correct. So if you were to buy something and send it, buy it here and send it somewhere else, do we get those tax dollars as well?

No, that it's based on where the goods are delivered.

Where they are delivered. Okay, I wasn't sure on that, so I wanted to clarify that. I know we have one of the highest transit occupancy tax in this area. Where are we in our process of obtaining more hotels to accommodate the visitors that are coming to our communities?

That is a wonderful question, Council Member Stone. I will tell you. I was Council Member Warren. I'm sorry, Council Member Warren. I was still on the last response. No problem. My apologies. So actually, we have two of our hotels that already have their conditions of approval. And we have another one that I'm hearing is about to get theirs. And one is a dual brand that is very near their conditions of approval. So pretty soon, we're going to have five hotels that are ready to go. And so we're getting very, very close out of the eight hotels that are currently in the pipeline.

Okay, well that would give us a total of how many? 14. 14.

So we have six operating hotels right now, including the Hot Springs Resort. So to almost triple that is on the horizon right now. And there's another hotel that's out in the wings that we're doing some work on trying to see if we can make their site proper for them. So there's always opportunity in the hotel space. When we talked about why people come here and the reasons for tourism, and the outdoor lifestyle is one. Sports is another one. With all of the parks we have, we get a lot of sports tourism, as you know. And medical tourism is another good one. And then proximity to wine country. So there's all of those reasons, in addition to having a 46-acre hot spring resort right in the middle of our city. So there's a lot of reasons why people want to come here, and there's good reasons to build more hotels.

And I know for a fact that Marietta Hot Springs Resort is, their clientele is building, and I would say 90% of those that go there on a vacation basis or a more routine basis are from out of this area. I see they're, Restaurants are full in the evenings, and parking lots are overflowing there. So I see a huge impact that that is making on our economy.

I have walked through Hot Springs Resort and heard so many different languages being spoken as you walk through. It's amazing. It is. The international tourism that comes there is fantastic, and it's very synergistic with the wine country. So it's a great opportunity for us.

I agree. I want to look at the, and I appreciate what you put down for giving us options of where we can look for more revenue. But I'm going to, I don't know anybody on this dais that would want a utility users tax. That would not be an option I would even consider. When something like that, in my opinion, is put into place, our taxpayers don't have a choice. The burden is put on them automatically. And I do believe they have a choice. They want to buy something. And sales tax comes to Miria. But when you put it on a tax roll, they don't have a choice. And I would never, ever be in favor of that. But I appreciate what you did to give us options and say, down the road, if these are options we could look at. So thank you. That's all my questions. Thank you, Mayor Pro Tem.

Thank you, Council Member Warren. I have a couple questions. So the DOT tax, how is that rate set?

It's currently, it's 10% for the city and there's 3% of what we call the Embed, the Embedded Business.

The Tourism Bureau Improvement District is 3%.

Yeah, so total is 13% and it's based on city ordinance.

So we set that, a previous city council set that rate. How long has it been at that rate?

That's a great question. Don't have that in front of me, but...

I think it was a 10-year extension, and it was about four years ago, if I'm not mistaken.

Okay.

Thank you.

And I also wanted to clarify Council Member Warren's question about the online revenue. We don't get necessarily the same tax rate on online purchases as we do for in-store purchases. Is that correct?

I think we do. I'm sorry. Can you repeat that again?

We don't get the same tax revenue from an online purchase as we do from an in-store purchase.

The businesses should be charging the city sales tax, which would be the 8.75%.

So I think where we're going with that is it goes into the county pool, and the city gets an amount from the county pool commensurate with the overall amount of sales tax we produce out of the county.

Right. It's not like if somebody goes into Target and buys something that we get our 1% plus our normal charge. It goes into a pool and we get a proportion share of sales tax revenue that's generated. So it's not quite the same as an in-store purchase. I just wanted to clarify that. But we get something. We get something. We do get the 1%, though, don't we?

Well, the sales tax is charged based on where you live, but then it goes into the county pool and then we get our portion of the county pool back.

So we don't get the full 1% either. Yeah. And we get that percentage on that as well. Okay, I just wanted to clarify that because I was under the same thinking that if it came to a residence, we got our normal tax, but we don't quite. We get something, but not quite. And while we're talking about out-of-the-box thinking, as Council Member Stone loves to say, I wanted to suggest that we take a page out of the Strait of Hormuz and we charge every state vehicle that comes through the 215.15 a toll. They're going through our town. We can have tolls for going through our town. Otherwise, we'll do something horrible to their vehicles. That will make you very popular. With whom? I'm going to move down just a little bit. Anyhow, thank you for the report. I will now open it for public comments. Oh, no, I see Dr. Lisa DeForest is back in the queue. Then comments. OK, great. Madam City Clerk.

Mr. Kallsen-Klein.

Good afternoon.

Good afternoon.

Last week I attended the Community Safety Forum for the 5th District, which is currently represented by Cindy Warren. And there was a gentleman there, a former planning commissioner, me back up. Captain Spencer Parker asked, what are the three biggest issues? And I said, the biggest issue is budget. It covers everything. And this former planning commissioner said, oh, we don't have a budget problem. We've got plenty of money. Clearly, we have a budget problem. Anybody that has looked at this or attended any one of the goal setting sessions and looked at our wish list and looked at our Finances, and finance is one of my weaknesses, besides controlling my mouth. We've got an issue. I provided this memo to you. One of the good things about your predictability is I knew there was no way any of you would support the utility users tax. However, I compliment Scott for at least putting it on there. But I provided this memo to you for historical context. I think it was very important to do that. One of the things that I find interesting that's missing from this, the long-term strategic economic plan is, I didn't read anywhere in here, any cost cutting measures. And an economic plan is not only about economic development, when times get tough, we have to tighten our belt. And so I've said this before at previous Goal setting sessions, and I think that's something that we should start to look into before we get too farther down the path. On this item, Council Member DeForest, I will mention, you mentioned a fast track program. I don't know if the council's aware, But we currently do have a fast-track policy. It is one that I drafted and gave to Councilmember Kelly Bennett when she was on Council many, many years ago. And to my knowledge, I don't think it's ever been utilized. I know that I tried to utilize it once with a project that met the requirements for Vineyard Place, the memory care on Washington. That concludes my comments on this item. Thank you. Thank you.

That concludes public comments.

Okay, we'll close public comment and come back to Council Member DeForest.

Thank you, Mayor Pro Tem. I just want to thank my fellow colleagues for some banter on this issue and just to bring it to the top, right? Because I believe that, you know, if you bury an issue, then it certainly doesn't rise to the top. So, just a couple of comments. This question was... pose to look more aggressively at the future for recruitment of special types of businesses. And I know that our economic development department is rock stars. So this certainly wasn't brought forward to have any comments or conditions brought to you, because I believe, Scott, that you do an amazing job for us. And I've ridden in the van, and that's the only thing that I think would ever scare off anyone with you. is riding in the van for buying out there off of the Jefferson area. So with that said, maybe someone else needs to drive the van because, but anyway, that's just no. But I love your recruiting. I love everything that the city is doing. What I want to see and what I'm posing is I want to be the council that looks to the future, that really opened up things, that maybe saw to say we don't have a box. And that we are, we don't have to look outside of it because we don't have one. And that we are the council that are looking to the future of the city when both Lori, myself, and Ron, and Cindy are even off council. The things that will set us up for the future so we can have the best city, so we can have the safest city, and so we can continue to pay things and have capital improvement projects. Just like our our comment from our speaker, Casson. He talked about all the things in our wish list and our capital improvement projects. Well, if I want to expand my business, then I look how I get funds in order to do that. So that's what I brought this up for was, yeah, do I want to see the expansion of the police department? Heck yes. Do I want to see a pool for our residents? Yes. So that's why I brought this forward. How can we forward think to get this to happen? One of the ideas... You want to go?

No, I was only preparing. I did not mean to interrupt in any way.

One of the things that I was thinking is, do we put some of our capital improvement money, some of the money that we might spend on something else, do we put it into the Jefferson area? So is that, you know, to get it ready for development? Do we push a certain specific area because we know that it's going to be a better long-term investment? And so that was what I wanted us as a council to talk about and maybe pose you all to think about that too. And, you know, I think that, I mean, as you know that I think you do an amazing job. I love economic development. I think we have the most amazing staff here. We have a great city that way. And I want to see it that way so my kids can come back here and live. That's my whole goal. And so that I keep Murrieta beautiful for generations to come. So I want to be the thinkers that bring the amphitheater here. We all benefit from that beautiful amphitheater. We're going to have our state of the city there this year. Which is really very fun and but if that wasn't thought of the people that put it into action never saw it come to fruition, I want to be the Council that looks to the future to open the doors for the specific businesses that improve our city that's. why I had this question. Do I have the answers? No, but I think that if we're thinking about it and always pushing it to the forefront, then that will help our city gain ground on this subject. So I thank you and the rest of my colleagues for bringing this forward, but I want us to be known for the council that really did some great things with economic development and then didn't sit back. Because any time we ever sit back and just watch something happen, it never happens fast enough to make an impact or it never And I know you're not sitting down ever. So, yeah.

Technically, right now.

Right now, right now, probably the only time. So yes, perpetual motion, Scott. And I appreciate that. But you know what I'm, so yes, take it away.

Couldn't agree more. And so when I talk about us having six million square feet of retail for a city of 121,000, it's not to say we don't need more retail. We have two more major shopping centers on the agenda. And I believe there's an opportunity for a third one On the side of town, and so I think will be over seven million square feet. That is substantial and much tour city managers point. We have to really start focusing on place making in the right kind of retail that bring people in from out of town and create the environments that people want to come travel to. And I'm very passionate about that. But I also am a little opportunistic so. Javier did a wonderful job of outlining that auto sales create a lot of revenue, disproportionately to everything else by far. So auto sales and big box. We have opportunity for auto sales and big box still in the city. We just had a Nissan dealership come in. They opened July 1st in our auto mall. Check them out. We just had them come in to fill a space in that city, but there were other tenants who tried to go to that space that we couldn't put into, and we only cannot get here because we don't have another space for auto. We had a potential auto dealership going into our auto mall that was eventually purchased by the Walters Group, who's trying to bring us a new car dealership. But we missed out on the other auto dealer. I think that we're missing out on opportunity only because we don't have a built environment to put auto dealers in. Jarrett Ramaya, our Deputy Director of Development Services, is currently working on transforming an old hydroponic store that used to be a grocery store into an auto dealership. because we're finding any rock we can turn over and trying to find a way to utilize it for auto space. But if we had a built environment today, we would be filling that space. I have absolutely no doubt about it. So I think one of our focuses has shifted towards really promoting Murrieta's auto destination and finding the partners that will help us get it built, and we will definitely need your help to do that.

Thank you for all your hard work, especially with that, because I know auto is... is really definitely transformation or transformative for a city, for tax dollars, right? That's the second biggest purchase of most people's life, right? And almost as expensive as a house.

Mayor Pro Tem and Council, if I could just add on a little bit. I think it might be helpful to look at this whole conversation through the lens of prioritization, first of all. We do a lot of these things already as we've discussed in economic development. We also have a lot of ambitious kind of external projects, whether they're community-based or city facilities or what have you. Right now, we don't, for instance, really have Auto Mall specifically on that list of prioritization. And so rather than kind of thinking, it can be overwhelming to think of the entire suite of economic development things we could do, and then what tools we might put in the toolbox to try to build that kind of infrastructure, it might be just as beneficial to kind of pick something that really has relatively low lift and relatively high return and prioritize it or elevate it a little more than it is currently. So in that context, we're really not talking about wholesale change, but subtle optimization and some refinement to our priorities so that maybe some of those revenue generating developments happen sooner similarly with the idea of incentives um i would think more than kind of a broad suite of incentives that is a slightly more passive approach it might be identifying the couple businesses and again auto and auto sales come to mind where we know we're willing to be a little more aggressive which also enables us to be a little more proactive in reaching those particular businesses. And I would even say in the marketing context, you have some very broad tools where you can market a destination to tourists or a place to live for residents. Or if you know you have a very narrowly defined target audience, again, auto sales or some big box where we think we're leaking sales tax to surrounding communities, we can be really targeted in how we market and position ourselves, knowing what they're after and what they're looking for in terms of demographics or location or whatever. to complement anything that might be more of a broad strategy to promote the city.

Thank you for that. I also wanted to give you an opportunity to address the comment from Mr. Klein about cost-cutting, because I'm aware that we cut back 10% across two separate years in the last three for that very reason, to look at...

Correct. Correct. So there are a handful of things that we're doing that are probably not broad policy related. Some of it's internal, but certainly at the direction of council. So you're right, we had two rounds of approximate 10% operations cuts that targeted everything from low value expenditures, including a couple years ago when the economy was good, if you noticed the swag that we have at, say, a State of the City event. and night and day different from what we have today. By the way, that's similar across the board because we're in the same economy as everybody else. Everybody was doing a little better a few years ago than they are today, at least all of our neighbors. So we did that. We've cut money both formally during the budget process and just internally. We have a lot of conversations going to things like overtime or, again, some of those lower value expenditures that when times are good, it's not that they have no value. They would have never been introduced as expenditures had they had no value. But you review them in light of scarcer resources and decide now they're slightly below the line of value instead of slightly above the line. And we've cut a lot of those things continuously as we also implement lean and other practices that are designed to create efficiency so we can do some of the same things that offer a high level of service, but at a lower overall cost. Sometimes that's a hard cost savings, sometimes that's a soft cost savings, but the soft costs are really important too because we get to redirect our staff resources The two most precious resources we have, time and money, right? And time is really almost as much or more than the money consideration. But we've been able to redirect efforts internally. So again, that's not a policy conversation, but it is certainly a management approach with council's direction to be stewards of our taxpayer resources. And we will continue to do that in good times and bad. We're just a little more motivated and focused when it's these kind of economic conditions.

Absolutely.

Thank you for that to council member stone Thank You mayor pro tem, you know with regards to council member deforest You know, I I agree with her on looking towards the future. I Think that we are kind of doing that right now I mean we've talked about a regional park on the west side, which is so needed we need we do need a new pool and We need to upgrade Cal Oaks. We have a new fire station coming. We need to expand City Hall. We need to expand our police department. We're looking at expanding also our fire department. So I think we are looking towards the future. But again, how are we going to pay for all of this? And maybe... setting somewhat, when we're talking about the long-term strategic plan is talking about more, what is the city of Marietta?

What do we want to be known for?

I love the fact that the prior city council wanted this to be the hub of our community, our police, our amphitheater. They did have a vision. We also need to look towards, and Council Member DeForest, things are much different today than those council members. We're not dealing with the unfunded mandates imposed on us that are taking a large chunk of our resources, our money away, and that's so frustrating. So in a way, we kind of are doing what, You visually see us doing, but we do have some challenges ahead of us, and God knows what's going to happen with future Council after we're all off this board. What is government going to look like for them? I think more importantly is making sure that we have a financially stable city and not do anything at this time that would financially hurt us and taking things very slow and seeing how the economy is going to change over the next few years. And if it means some of our goals that we would like to see in the future doesn't happen when we are no longer sitting here, that's okay. We're sitting in that path for the future. Thank you, Mayor Pro Tem.

Thank you, Council Member Stone. I just want to echo my colleagues sentiments that you guys are doing a great job from the economic development front. I don't think we leave any stone unturned, and I thank you for that. I also thank the city manager's department for all the effort and the cost-cutting and the being fiscally responsible. The numbers I've seen, if I'm correct, saved over $2 million a year for the city. Our finance director, we've had conversations about investment choices and stuff that brought additional revenues to the city. Yeah, I don't think we're leaving any stone unturned at this point, but I agree with Council Member DeForest that we should never lose sight that we have to be focused on the future. It's just something that's a good reminder just to keep it in front of us. And Council Member Stone's comments leads us right into the next workshop. Oh, one more.

Council Member DeForest. Thank you, and I'll be brief, but, you know, At one time we talked about bonding capacity, and Javier, we were supposed to be able to pay off, so we could bond, so we could do some of these huge capital improvement projects, but currently we don't even have the capacity to bond. Is that true?

We certainly don't have the same capacity as we did three, four years ago, but we do have some capacity utilizing some of the Measure T funding sources.

So being as conservative as we're trying to be with our, so without using Measure T, because I don't think that Measure T money should be used to build a swimming pool, right?

Well, Measure T is a general sales tax revenue. It's not very specific to certain programs or services. The city council can utilize the funding source as you please. And so it can go towards debt service payments associated with the bond. Primarily the sales tax measure T was primarily to enhance services for our community. You may see having a pool or a brand new pool that provide that recreational activities for our residents, which we currently don't have through third party contracts, we do, but would that consider that enhanced services for our community? then you would cancel consideration for that.

Okay. Thank you for that. That was some clarity for me. Um, can, can we bring something back? Um, if my council would agree, can we bring back some specific, uh, verbiage for, uh, actually looking at, and I know that Scott, you already got this moving forward, but what, what do you need from us? What could we as a council do to help that to be specific with advantageous, like our city manager was saying, more advantageous towards, for example, car dealerships and maybe for the expansion of the Jefferson Corridor. We need to be very proactively thinking about what that Jefferson Corridor is going to be because that's really one of our main potential areas for development. So could you maybe help me on what you think that we could do to help you

And I am so excited. We've already actually addressed it a little bit, I think, in the presentation, a specific plan for the Madison Corridor that helps bring quicker, faster development to the area that lets us take some of the lift away. We're already working on Madison Avenue and bringing the sewer lines in and making sure that we get the road degrade, but there's still a lot of work to do out there, and if we could take any of the onus off the development community, in addition, we could do things like put overlay zones in for Auto Mall and start to get prepared for that corridor to utilize the front of the freeways, the two freeways coming together on the west side. I think there's great opportunity down that corridor. That should both be a retail boon, and it should also be a dense job corridor, and we can get the best of both worlds there. So that is 220 acres of largely undeveloped land that doesn't exist in many places anymore that has great visibility. So that would be a place that we should really focus on.

And can you put something together and bring that back to us?

We certainly shall.

If my colleagues would concur.

Well, I think as a city manager, it's said that it's... kind of instead of a broad tool, let's be more specific and more targeted with it. And so I think the time for that to come back is when they have a business coming in. I mean, you guys may disagree with me, but I would rather have a more targeted tool for the specific user that's coming in than a broad tool that somebody comes in and it doesn't necessarily fit.

Well, I'm certain it will also, there will be specific users who come before you in the future. So that will certainly happen. Yes.

So currently you don't need anything from the council to...

If we have the capacity to move forward with a specific plan, I do think that Justin was touching... I'm sorry. I do think that our city manager was touching upon opportunities to maybe create some programming to really help encourage auto mall development, for example, and that maybe we look into something that we could bring back to you that really outlines how we do that.

Okay. Yes. If I might make one other suggestion, in future iterations of our priorities conversation, we could also just pull a few of the things out that we think address this general topic. Madison's specific plan is one. If we got some traction with an auto mall where we might be willing to be a little more proactive in contributing to infrastructure development or something similar to what we've done in the Madison-specific plan, we could kind of highlight those opportunities there. And if one of them makes sense to elevate and maybe pick up some momentum, then you'd have the answer right there.

Okay, perfect. The one thing I did want to touch on is the bonding capacity. So just for my colleagues, if they're not aware, bonding capacity has to do with ongoing revenue that's not committed. And so as we commit more and more revenue from Measure T to ongoing operations, that's what reduces our bonding capacity. And so in future budgets, if we look and say we want to set aside 10, 15, 20, 30 percent of Majority of any revenue, say set that aside and not commit it to ongoing revenue, that increases our bonding capacity. That's why our bonding capacity is not as good as it was three or four years ago, is because we've committed so much of our revenue to ongoing expenses. They can be committed to one-time expenses, and it doesn't hurt your bonding capacity necessarily. But we need to keep that in mind when you go through the budget cycle, that if you want bonding capacity, you have to look at the budget slightly differently.

And that's enough about that.

Okay, so no other comments. We'll move on to workshop number two, CIP budget workshop. Thank you. Mr. Carcamo gets to stay.

Well, good evening, honorable mayor, city council members, members of the public, city staff, Javier Carcomo, finance director, joined by Mr. Jeff Hitch, city engineer, and Mr. Aaron Mendoza, financial analyst. We are pleased to present to you the draft capital improvement plan program and budget for fiscal year 2026-27 through 2030-31. The CAP serves as the city's planning and budgeting document for capital projects, providing proposed funding appropriation for fiscal year 2026-27 while establishing a five-year framework for infrastructure investments and project delivery. Today's presentation provides an overview of the proposed fiscal year 2026-2027 CAP budget, including the recommended appropriation for both new and existing capital projects, key funding considerations, and the next steps. Historically, this presentation has included both a financial update and a detailed project status review. This evening, staff primarily focused on the financial framework and funding strategy of the CAP. However, should City Council have any questions regarding any status of the specific projects, Mr. H is available to provide additional information to project updates. The fiscal year 2026-27 CAP budget reflects a comprehensive review and reprioritizations of City's capital projects to better align available resources with the City Council's strategies, goals, and priorities. Consistent with the direction provided during City Council goals and workshop, staff evaluated both projects and funding sources to ensure limited resources are focused on the City's highest priority needs. As part of this effort, staff reviewed the existing CIP portfolio of 172 projects. Of those projects, 22 have been completed and are recommended for closeout. A list of completed projects is included in the CIP summary report. In addition, 64 projects were identified as tier one or tier, I'm sorry, tier two or tier three projects. Tier two projects are partially funded and don't have established work plan or assigned resources. Tier 3 projects currently lack funding and do not have active work plans or assigned resources. The proposed fiscal year 2026-27 CAP also introduces 19 new projects. Some of these projects include appropriation requests in the upcoming fiscal year, while others are planned for future years within the five-year CAP plan. Following this review and reprioritization effort, the proposed CAP consists of 105 active projects representing approximately $123.2 million in planned capital investments. Mr. Mendoza will now provide an overview of the proposed budget by project category, funding sources, and infrastructure type.

Thank you, Javier. Good evening, Mayor Pro Tem, council members, RN Mendoza, financial analysts. We are projected to end the current fiscal year, 25-26, with a balance of $86.2 million. As Xavier mentioned on the previous slide, approximately 105 active CIP projects account for $123.2 million in total appropriation proposed for fiscal year 26-27. The proposed $37 million in CIP appropriations Fiscal year 26-27 presents a strategically balanced plan incorporating $3.4 million for new CIP projects, $3 million for new maintenance initiatives, and $1.4 million to continue progress on existing projects. The CIP also includes a significant $38.6 million of allocation towards new and existing City Council top projects that was identified during the February meeting. It reflects updated organizational priorities. staff proposes using existing funding and unassigned fund balances from special revenue funds to fund these projects. Planned additions are offset by 9.49 million in re-appropriations from closed or consolidated projects, resulting in total proposed changes of 37 million to the CIP budget. The total CIP budget allocates funding across all major infrastructure categories, with the largest investments directed towards bridges, which is 48.7 million, and streets and highways, 35.5 million, to support mobility and transportation accessibility and safety. Storm drain projects are proposed to be funded 15.11 million to reduce flood risk and improve the drainage system. Bridges, streets and highways, and storm drain projects reflect a commitment of 81% of the entire CIP budget. Public facilities, parks and other community improvements make up the remaining 24 million or 19% of key citywide infrastructure investments. The CIP budget is funded by a diversified mix of revenue sources totaling 123.2 million with three primary sources which is development impact fees at 51.1 million, grant funds at 26 million, and transportation funds at 25.1 million, collectively providing approximately 83% of the total CIP budget. These major funding sources reflect the city's strong leverage of development and transportation-related special revenue funds. The remaining 17%, or approximately 21 million, is supported by a combination of general fund and general fund capital contributions of 7.6 million, Measure T by 4.4 million, drainage funds 4.8 million, and other governmental funds at $4 million. The balanced funding structure enables sustained investment in critical infrastructure while reducing reliance on general fund or general purpose revenues. Key infrastructure Heat infrastructure funding for fiscal year 26-27 of the CIP budget includes $3.47 million in new projects focused on public safety, facility upkeep, and traffic improvements highlighted by the fire department tiller truck equestrian center maintenance phase one and the Clinton Heath nutmeg signal modification. An additional $3.1 million in new maintenance projects is dedicated primarily to the 2627 pavement resurfacing program, along with the pedestrian safety enhancements. Together, these investments prioritize core infrastructure needs while supporting safe, reliable, and well-maintained community services. I will now turn the presentation back to Javier to discuss the City Council top project priorities.

Thank you, Mr. Mendoza. So back in February of 2026, City Council conducted a goals workshop to identify and prioritize projects that supports the city's long-term vision and strategic objectives. The CAP development process focused on aligning project funding with those priorities while identifying available and potential funding sources. As shown in this slide, the estimated total cost of the city's highest priority projects is approximately $146.9 million. Currently, funding plan includes approximately of $31 million in committed funding sources, along with an additional $38.6 million in proposed funding made available through project closeout, consolidations, and reallocation of existing appropriations. If the City Council approves the proposed fiscal year 2026-27 CAP plan during the next City Council meeting, The remaining funding needed to fully implement these priorities is projected to be approximately $77.2 million.

Javier, do you mind if I just mention quickly, bear in mind these are, firstly, high-level estimates. Some of the projects are only contemplated where we have no initial design, and so numbers are very high-level. And secondly, we have not yet incorporated potential outside sources that are often very significant, whether they be federal appropriations, grants, or other things that could offset this. And then earlier, we talked a little bit about financing. I think we both want you to see a little bit of the sticker shock, right? 77 million, that's not identified yet. But this is many, many years of projects, and many of those variables kind of unfold over the course of those years. Better economic times where you might have surplus at the end of the year. Again, major grants, federal appropriations, et cetera. So just with that added context.

Thank you, Mr. Clifton. And just to add to the assumptions that we're also making, certainly the estimated cost of those projects, we had an assumptions of cost construction, cost increase in the next, within five years. So we're considering making assumptions that some of these may become eligible for construction at some point in the next five years. So we have to make assumptions of what the cost increase will be as well during the next five years. So as staff continues advancing some of these projects, several funding strategies are available to city councils for consideration to help address the remaining funding gap of the $77 million. First, as part of the fiscal year 2025-26 year-end financial report, staff anticipates recommending that approximately $45 million of available unassigned fund balance from the general fund and measure T be committed towards the city council's highest priority capital projects. These funds will be designated as a strategic reserve and allocated as project advance towards implementation. Second, we briefly talk about bonding capacity. City could also explore external financing options, including the issuance of debt and bonds or bonds to accelerate delivery of priority infrastructure projects. At some point, we did consider $30 million, and certainly when we're ready to do that, we can have to do an analysis again to determine what is the capacity that we can afford at this point in time. Third, city council could consider reducing the city's operating reserve policy from 30% to 25%, which would make additional resources available for capital investments. And finally, staff will continue to review the CAP portfolio for additional opportunities to consolidate projects, close inactive projects, and reallocate funding to higher priority needs. These strategies are presented for city council consideration and may be evaluated further as project scopes, costs, and funding needs continue to evolve. And that has it on to Mr. Arendt to close out the presentation.

Thank you, Javier. Future actions include a public hearing on July 7th, 2026 on an annual basis per California Government Code Section 65403. The City Council adopts the five-year plan into appropriate funding for new projects and amends existing projects as needed. And as mentioned earlier, we have Mr. Hitch as well and some project managers and department representatives are available for any questions that you may have tonight. Thank you for the time.

Thank you for the presentation. I'm sure we're gonna have lots of questions coming up. We're gonna start and just let's keep this section just to questions of staff from their presentation. Council Member Stone.

Thank you. If we decide to bond, does that go to the residents to vote on?

No, so there are options, but a lease revenue bonds doesn't require voter approval, considering that commitment towards principal interest will come from current general revenue sources.

Okay. And then on page 10, our capital improvement plan summary. And you're saying that we have the capacity of, is it, we can only bond for 30 million as of today?

No, so we did explore 30 million dollars about three or four years ago. We would have to do a analysis again today based on our current revenue sources to determine what capacity

Just hypothetically, without doing the numbers, what do you think?

I would say somewhere between $20 and $25 million.

Great, thank you. That's all my questions, Mayor Pro Tem.

Thank you, Council Member Stone. Council Member DeForest.

Thank you, Mayor Pro Tem. Question on the bonding. What is the bonding? What is the percentage and what is the term?

So typically a 30-year bonds. And as far as the terms, it's based on market. market interest rates were less favorable today than they were three or four years ago. So it's different components that determines what the capacity will be today.

All right, so we're paying interest on the money, so if we did move our reserves down to 25% from 30%, then we'd be paying no interest on that money. So it's kind of like a wash.

So we could establish a strategy certainly utilizing some of our reserves to, let's say we assume that we need additional $30 million to complete one of these projects. We could utilize some of the reserves that we have in place. So we could reduce our 30% requirement to 25. That could free up, let's assume, $10 million. So we no longer have to bond for 30. We could bond for $20 million and utilize $10 million from our reserves.

And just one last question on that. So if we did drop, say, reserves from 30 to 25, which I'm really liking to have reserve, that's our rainy day fund, what kind of money are we looking at? Just a guesstimate, if we reduced all of our funds to 25%. Do you have a guesstimate number? Round up to the millions.

Yeah, that will probably be around, so we have approximately $40 million in reserves, operating reserves, so we dropped that by 5%, so we'll probably be looking at $2 million. $2 million.

Could I add something to that conversation? I think we certainly wouldn't recommend doing anything that would put us in a more precarious financial situation. I think part of this is recognizing you also have liquidity factors, right? So right now we might have $40 million in total reserves. We've trued up recently to bring most of our targeted general fund measure to your major reserves to 30%. while we also have a separate kind of economic contingency reserve, while we also have the unassigned fund balance. So if you were looking at this from a risk perspective, drawing some of that reserve down while we're also only in process of spending some of the 40, 45 million that is unassigned and outside of that reserve, that's a really safe position. Because if something happens during that time when you're expending those funds, you can still stop everything, and you're left with maybe a reserve balance at 25% and maybe 30 of the 45 unassigned fund balance because it's not spent yet. You also have an opportunity as that's happening to look at your incoming revenues over expenses and understand how quickly might we be able to replenish these funds. So you kind of look at it pretty comprehensively before you just decide, let's kind of have less reserve, right? It's a little more of an intentional strategy over a period of years.

All right, thank you so very much. Thank you, Mayor Poteau.

Thank you, Council Member DeForest. Council Member Warren.

Thank you. I understand that you're giving us a window of the worst case scenario, but some of these funds could be offset with grant opportunities and federal government and state money, right? So in the worst case scenario, this is where we're at, correct?

That is correct.

I just want to make sure that that's clear. The other thing is your existing CIP projects at the 1.3 million, will that be enough money to finish those? Or does that still leave us hanging out way out there and not having enough money to finish those? Whatever that money is allocated to will finish those projects.

I believe that the 1.3, and I'll probably defer to Mr. Mendoza if he has the specifics, it is likely planned allocation from prior years that were allocated for fiscal year 26, 27. Okay. That's just an additional appropriations for certain specific projects to continue fund those projects.

So they can continue on the path of completion. Is that okay? I just wanted to understand that better. That concludes my questions. Thank you.

Thank you, Council Member Warren. I have a couple. What tier is the Warm Springs Parkway? Do you know that offhand? Warm Springs Parkway is the one that's in front of Costco, but it's intended to go all the way up to Antelope Road through the Mapleton Avenue that goes by Kaiser. Because that's going to kill a road to Warm Springs to the hospital is going to be the route that we need to get a level one trauma center. And I know we talked about it. I can't remember. I think I talked to the city manager after the priority setting session. I don't know what tier that is.

I know it was elevated, but I don't recall if it was off the list and it was put on or if it was put on at one of the higher tiers. But I do recall some emphasis being put on that project, knowing that it would be needed to prepare for some of that important medical development.

Yeah, I was just concerned that it wasn't part of the list. So if you don't have that right now, that's okay. For clarification, if we reduced our operating the reserve from 30% to 25%, that's actually an increase of 6.3 million, 6.4 million, if I did my math right?

So the current operating reserve, I believe, is about $40 million.

Right. So if I take 40 million divided by 30% and then multiply by 25%, the difference between those two is 6.6667. So just under $7 million is what it would generate, just so the council has a number of what that would look like. But I agree with our city manager that we wouldn't want to just blanket say, oh, let's go 25% today because we don't need it. It needs to be more as part of a strategic plan, which brings me to my other question. So we have an operating reserve of 30%, and then we have an economic contingency. What percentage is that?

It's not, actually it's not based on a percentage, it's a flat amount. What is that? Currently right now it's about 14 million dollars.

14 million? And what is that for?

Has the same objective as your operating reserve. It primarily is to address economic changes, loss of revenues, to do, you know, changes in economy, recessions.

So why do we account for it separately if it has the same goal?

It has been established that way. Policy established it that way for a while.

For a while.

We could... proposed to merge both of them, if council would like to do that, but that just has been established based on our policy separately from the operating reserve.

Pardon?

I said maybe better transparency.

It's not really, because it's the same purpose. It's two buckets of money that serve the same purpose, and to say we have a 30% operating reserve, but we really kind of have 14 million on the side for something that's the same, that doesn't seem to be transparent. It seems to be a little... Well, not that we're trying to hide anything. It's like being extra cautious. I'd rather say we have reserves of 40% and gives us a realistic look at what options we're making, what choices we're making. So maybe we could, if my council agrees, look at that as something we could look at as part of that strategic of how we're going to fund some of these projects. Because I think, and I would hate to reduce our... whatever the amount is of reserves right now, considering where the economy is looking. But certainly we need to have the clarity to have those numbers in front of us so we know what we're deciding on. I think that's all my questions. Council Member Stone, you have another question?

Yes, thank you. I'm Mayor Pro Tem. Javier, I know you were not here during the recession of 2007, 8, 9. Do you know if we tapped into our reserves during that time?

I do not know. I would have to go back and look at the books during that time. I know that the city had a plan to address some of the shortage in revenue during that time, and there were a number of layoffs. During that time, but certainly I think by the time that I joined the city or reserve levels were low so i'll make the assumption that might have been used at some point in time and you started with us when what year.

So in 2018 we were pretty low so chances are that they did tap into it and do we tap into it at all during coven.

No, we did not. No, okay, great. I'm pretty sure we tapped into reserves back in 08, 09. I guarantee you that we did, yes.

I'm sure I remember that. If we were to reduce our reserves to 25% based on the amount of money, if there was a crisis, how long would that money last us?

Great question. Usually if there is a recession, which typically lasts about 18 months, two years, worst case scenario, I believe our reserves, which is approximately $40 million, could sustain the cities approximately two and a half years.

So two and a half years. And if we were to experience another recession, obviously we're going to see businesses close their doors, which means that the tax revenue will decrease and it could be very challenging for us. We are already seeing a pattern right now that the sales tax is lower than it was even three years ago. I'm definitely not in support of lowering our reserves at all, especially with the uncertainty of our country right now, let alone the world. So thank you for answering my questions. Thank you, Mayor Pro Tem.

Thank you, Council Member Stone. Just to clarify, sales tax revenue has decreased. It's the rate of increase of sales tax that has slowed down. But our sales tax revenue is still higher than previous years, correct?

It's slightly higher. So we have seen our sales tax have flattened during the last three or four years. We have seen a very slight increase year over year. Yeah, very flat, but not decreasing. But certainly the growth rate has decreased over the last five years. Significantly, yes.

Understood. Okay, no other questions from Council. I will open it to public comments. Madam City Clerk.

Philip O'Reilly.

Mr. O'Reilly.

Good evening, Mayor Pro Tem, Council, and City staff.

I saw tonight would be about long-term strategic economic planning and revenue generation opportunities. And in that mindset, I'd like to highlight the, quote, outside the box goals for our property in West Marietta. In phase one, the city will widen the road to four lanes from two, creating a true freeway frontage route for the 15, as well as connecting Highway 79 north and south with the 74 and 91 freeways. This project is labeled as Highway 395 recreation in the general plan, and in doing so will surely reshape the traffic flow through Jefferson, Marietta, and our region in total. It's clear we as a community have begun to plan and prepare for this change, but things like an upcoming stoplight on Magnolia and utility upgrades along Jefferson Avenue's business district. Change is only a matter of time in our eyes. We've watched it over the last 30 years, and from that perspective, I dare say it's inevitable, but some may find that too brazen. So in a broad view perspective of this project, we're talking about creating a new western entryway along an arterial road and a potential future highway. With the creation of this new gateway, I have repeatedly suggested for some form of monument to be included in the future construction of the project, as this can be done many ways. But with the most efficient ones in mind, I would think that highlighting the future retaining walls that will almost certainly need to be created to accommodate those four lanes being carved out of hillsides would be the best way to do it. Whether that's painting, shadow art, or some form of other beautification like an archway, the project shouldn't just be let's get this done. It should be looked at as what it truly is once in a lifetime. This potential monument not only aligns with long-term economic strategy via city branding and identity-based marketing, but it also promises a return on investment at a rate of around three to four times the initial investment. Add that on top of this already monumental traffic flow change, and I can't help but say that this should be one of the top priorities for our city as we grow and find our footing as the gem of the valley. These monument projects are rare in nature for cities, but not unheard of. Looking for an example? We can look to the opposite end of Jefferson at Front Street. The Old Town arches are beloved icons of Old Town Temecula that are widely recognized throughout Southern California, and they defined my father's life's work as a welder. You want to talk about long-term, this is legacy-level stories that I'm talking about. But I digress, that's a lot for just phase one, I know. Phase two and phase three are about redeveloping our six-acre ranch and aligning with current city plans and long-term economic goals of the region. Our goal is to transform our ranch from a hidden gem to a standout entryway destination for the city located along the 15 freeway and the future Highway 395 recreation. In doing so, we aim to develop our lot into something akin to Tom's Farms or Vail Ranch headquarters, known and beloved staples of Temescal Valley and Temecula Valley, located on highly trafficked and visible routes. As we put it earlier, synergistic with wine country, if you will. We're also visible from Rancho California as well, but again, I digress. I've only got so much time. Much like the Golden Triangle and Jefferson Avenue's business district, we recognize there are large plots of highly visible land still undeveloped, and we aim to develop alongside them with the future goals of the city. This project has the opportunity to not only refurbish our entryway image with things like artworks and monuments, but also provide large guaranteed revenue streams for the city with freeway digital signage, along with development fees and sales tax from a multi-business heritage site. So when you all speak of long-term planning and revenue generation opportunities tonight, let's not forget the West End of Marietta. It can and should feel like the West End, which is the cultural hub. Can I finish? Thank you, sir. It can and should feel like the West End, which is the cultural hub of London. So in efforts of long-term, I say, let's define this potential cultural hub and align Jefferson Avenue in total as a major player in Southern California. As a last swing for that alarm bell, I leave with this. Y'all said it earlier. The CarMax on Madison is the number one selling CarMax location in the nation. It has the second biggest lot for that corporation, and they're aiming at increasing its lot size. That's three miles from my childhood ranch home and all these potentials. That Hot Springs Resort, much less Wine Country and Old Town Temecula are literally all one turn off of Jefferson and from our destination. If CarMax, a large corporation, can see it, hopefully you two at City Hall can see it. This future is bright, and we want to champion that change to be the gem of the valley, imagery. So please, prioritize Jefferson Avenue's road widening and do it the right way the first time. Thank you, and have a beautiful night.

Mr. Casson-Klein.

to Lori's comment, and Ron, you might remember this. I believe, so we had mandated reserves, and then Council, several years before, we had an extra reserve. And as I recall, we tapped into that extra reserve, and we didn't have to tap into that mandated reserve during the recession. But in any event, please don't shoot the messenger. I don't envy the seat that you are in. I said this a few years ago. A lot of the priority projects are, they don't generate any capital. They're expenses. They're not an asset. And so the challenge for you is to balance what we move forward with in these economic times and those quality of life things that we pass on. A lot of them, there's no quantifiable ROI, right? Rather, it's conveniences, the equestrian center, the swimming pool, the public training center, the third additional regional park versus Madison Avenue. Versus the specific plan, a Madison Avenue specific plan from Guava to the north down to Elm. That swath of freeway frontage is next to the triangle, the most valuable and marketable piece of property for the previous item that we just talked about. Right for marketing and opening it up we need to be looking at. Cip projects that are going to open up opportunities on land and I'm going to bring up line F again not for my client for downtown right. Once we clear out line F it's going to free up much of downtown this being flooded yes it'll still need to be raised out of the 100 year flood plain but that's the first step. So. and the reason why I asked for that slide to be put up is, you know, aside from public safety, I'm not suggesting that we do away with fire station six or the fire department, what I'm calling the burn tower, not suggesting that at all, or the PD expansion and those things. Those are necessities. Those are quality that affect our quality of life and those are necessities. But these other things that I've actually advocated and complimented you on, right? At some point, I believe we're approaching it budget-wise. We're going to need to look at that and make the hard decision. And this is where I don't envy you. This is where it's easy for me to stand out here and say the things that I say, because I don't have to make the decision that you all have to make. But this is coming, and this is what we need to do. And to help Scott and his team, what we should be prioritizing, in my opinion... is that madison the madison avenue right so i don't know exactly where that's at um and then that specific plan because that's going to open a lot of that up thank you thank you that concludes public comments thank you mr city manager

Yeah, just as Council prepares to give additional comment and feedback to staff, just wanted to maybe center us on the big picture. When we had done some prioritization last time, and bearing in mind that for about a year, a year and a half, we really focused on some of the big project priorities that included kind of service-related goals and other things, and then we wanted to look deeper into the capital improvements plan and do a couple of things. One is set up a similar tiered so that we knew which projects were more important and less. And then additionally, we wanted to identify those top projects. So the slide that was up just recently identifies some of those projects. And council noted at the time, it's a little hard to do that exercise without some of the dollars and cents. So we're filling that gap today. in somewhat of an approximate way because we've also acknowledged that these are high level cost estimates and we can't really project what we might get from, we have a pending build grant for Keller Road that could change the entire analysis by millions of dollars. That said, what we are looking for is now that you can start to see at least the scale of the projects and where the money goes, are we still on the right track? Being on the right track would mean we're going to watch this unfold over a course of years. We're going to have much more in-depth conversations about sources of revenue, the scope of particular projects, and all of those things to continue to kind of refine the list. We might have to make some hard choices along the way. Or Do you think that now that you start to see the dollars and cents, we really have more work to do in that basic prioritization exercise? Because I do think the conclusion we can reach from this is we really can't accomplish the full scope of the CIP over any reasonable period of time as it stands today without substantial new revenue sources. So something is going to have to give. Either the scope of the projects, the number of the projects, a revenue strategy, a combination of all those things is even more likely, right? So today, we don't want to overwhelm you with the whole exercise of balancing that and getting it exactly right because it's too conceptual to do that anyway. So at this similar kind of 30,000 foot view, what we're really looking for is are we still on the right track to massage this plan from here or do we need to do more fundamental reconsideration of those major projects because looking at how they're outside of our means, we might need to really start looking today at are some of those projects ones we can't complete? Is it better to spread the money to more smaller projects opposed to focus on these seven or eight really large ones? That's the level of input we're really looking for from you, in addition to any other direction you'd like to give us.

All right, thank you. We'll go to council member comments, starting with council member Stone.

Thank you, Mayor Pro Tem. I actually agree with Kasten. You know, if we're going to bond, we want to make sure that we have a return on our investment. And I also agree with our city manager is, you know, looking back at these projects. I know the pool keeps coming up as a negative, but it is what the constituents in my district want and miss terribly is that pool. And I am working on grants right now to offset that pool. I'm hoping that the grants are going to come to fruition. I will not know for about probably another year. We are in an election cycle right now, and depending on who is elected in November will determine the grant process that I'll be able to complete. But we do have a lot of requests from the constituents and this is where we come with districts. Ron has his constituents that are concerned about development and what amenities are gonna be implemented in his district besides even Dr. Lisa DeForest. There are a lot of requests on her district as well. So it's not about district, it's really about the quality of life in the city as a whole. And we need to look at exactly what our city manager said is what can we complete and take off our plate. It would be nice to see some projects that are completed. I live within my means. If I can't afford something, I'm not gonna buy it. I'm not gonna go take a loan out to purchase something that I know that is not necessary. And I think that we need to think the same way as our own personal life is what can we afford? What is the return on our investment, which is really, really important? And how can we accommodate what we need to do for infrastructure? We have major infrastructure issues going on in our city. Line F is one of them. Our roads are crumbling based on the unfunded mandates that are imposed on all the cities, the traffic. We had a bridge that failed. That's an unforeseen hiccup. We have legislation that's going to pass AB 2307 that's gonna allow us to synchronize our lights. Thank God our temp funds are going to pay for that study, but we're gonna have to pay for the infrastructure and connect that with our neighboring cities. So there are a lot of unforeseen hiccups in the future as well besides the needs that we have here in our community today. And that's what I think is really important that we do look at. So thank you, Mayor Pro Tem.

Thank you, Council Member Stone. Council Member Warren.

Thank you, Mayor Pro Tem. And Lori, Council Member Stone, I'm sorry. That was disrespectful. I agree.

We need to, everything's important.

If it's not important to us, it's important to somebody else. I mean, somebody on this list, it's important. But Mr. Klein made a very good point. We need to look to where we can draw revenues from. And we need to focus, put a little bit more emphasis on developing out the land that will get us revenue and income so that we don't find ourselves Picking and choosing we might have an income stream. That would be really wonderful. So I would really like to see us Tap into that a little bit more and see where that could take us for the future because that is going to be the future if we can develop that out Responsibly and appropriately we could get some really good tax dollars back into this city to help take care of a lot of this So I really would like to see that considered and thought out plan or something in light of that land. It's very valuable. And if we can tap into that for some good revenue, that would be awesome. That's all my comments. Thank you.

Thank you, Council Member Warren. Council Member DeForest.

Thank you. Well, we have gone full circle now, haven't we? From what I began speaking about, why our economic and utilizing money for economic benefit, whether it be economic development, taxes, attracting specific industries. So this is just, I think this just highlighted what we just spent an hour speaking about, right? Yes, and agreeing with and been saying maybe we do need to utilize the Madison-Jefferson, whatever street we want to utilize, specific plan, right? Do we need to put some money in there? I don't see that. I do see, yes, we do have a flooding issue that's been ongoing. That's in West Marietta. Yes, that has been asked for by a congressman to help. But, you know, when I look at our list, I love our list. Oops, sorry. I love our list, but it's crazy to ask for... community to pay for Keller Road. That just makes me very upset. I'm asking my constituents to take money from a pool to pay for a road that they may never go on. Now, I've been the biggest advocate for Keller Road. I've advocated, Councilmember Stone and I advocated in Washington, D.C. for Keller Road. I do believe that we need to be a little bit aggressive in what has happened. We have been forgotten, and Keller Road, which would allow us to have a trauma center, to expand Kaiser for quality of life for our constituents, not to mention a public safety issue that you can't even get to our hospitals, but I don't believe that needs to be on our back. I believe that we need to be super aggressive and get that paid for by You know, the federal government, the state money, we need to get that paid by not on the backs of our constituents. Our constituents want to see things. They want to see pools. They want to see, you know, development that they can use, like a destination area, right? Madison Corridor could be a destination area. It could support hotels and conference centers and things like that. I do believe that this road is antiquated, or this list needs to be revised. And I don't agree with everything on it. And I do see that the top thing is a road that we have been fighting since being elected, 2020. It's six years, and the road has gone very, really nowhere. I mean, it's a road to nowhere. Yes, we've gotten a little further. I think that maybe we're through environmental. I don't know. But there'll be another hoop to jump that will cost us millions. We've spent millions on this project already. And I know that our congressman has given us money to make this project go forward, but I don't believe that we need to ask for 20 million from our constituents from this. That's just my opinion. I do think the road is beneficial, but I don't agree with getting rid of other things, like our tower, I think is very important. We say public safety is our priority, so why don't we show and get something for a training tower instead of two very old Connex boxes sitting next to a school, for goodness sakes. So sad. I mean, I just, I'm... I'm a little frustrated with this list because these things don't make us money. I do believe that if I'm a business owner and I want to run this city a little bit more entrepreneurial, right, that's why I brought up the whole thing. Like, I'm an entrepreneur. What's going to make us money? What are we going to go after that's going to make my kids have a better city to come to? And so I think that, I mean, this goes hand in hand together. And I'm just... I really think that we need to look at things a little bit differently and reprioritize these. And I think that this wish list to me is just that. It's a wish list. And I think that, yeah, it needs to be a priority and a tier one. But maybe we need to have a tier one that we ain't paying for. And a tier one that we're willing to pay for, right? I think it's a top priority. But I do believe that maybe we need to modify our tier system. And I know we just got this tier system and it was great. is better than just chaos, and I appreciate all the hard work, but I could go on on this. I just believe that yes, investment, return on investment, doing a corridor, helping economic gain, all of those things. And yeah, some of these things are here, but what do I see here for our community in our capital improvement projects? What? I don't really see anything that the community could say, I love the city of Marietta. They just bought a pool or they redid a park or we added to their quality of life. Yes, long-term maybe. And future, if we have a road, but I love our capital improvement projects, but when I see other cities and what their projects are, and I hear all the things like, oh, there's 15 pickleball courts at this place, or oh, they just put in a splash pad. We don't have that. We don't have that. And we have property for something to make a little bit more impact on our community.

So there's my soapbox, and I'm getting off.

So I appreciate it, and I appreciate the time, but... I just, I thank you for your time. I thank you for putting this together. And this has no reflection on the job that you're doing, because you're doing the job that we asked you to do. So, and I appreciate you for that. And I just believe that maybe we need to look at this a little bit differently.

Thank you, Council Member DeForest. I agree and disagree with my colleagues. I don't think it's... I don't think it's an either or. I think it's a both end. I think we have to both look at, because not every project has an ROI. Keller Road doesn't have a return on investment. It's immeasurable. If we put Keller Road in and Kaiser goes ahead and builds their hospital and it saves one extra life, what's the ROI? And there are jobs too, Council Member Stone's correct. But like I say, every product doesn't have an ROI that's measurable. But that doesn't mean... I'm not saying ditch it. No, but that doesn't mean that we say, okay, so it doesn't have an ROI or it's a hospital, it might save a life. No, it means we have to do both. And I don't know if... I know we already have the money for the sewer and infrastructure and the road for Madison. Is there additional money that's needed for the specific plan? He punted that right to you. Big hitter. Or is that already in process and is it already planned?

Good evening, Council. I'm drafting that specific plan as we speak. We're going to be issuing the RFP very shortly. I'm not putting a dollar amount on the RFP because we want to make sure that people submit good proposals. We will be bringing you the RFP when we're going to make a selection. These questions will be asked of you at that time.

Okay.

All right. Thank you. Can you give us a range? Best guess.

I won't hold you to it.

One of the questions that I think you're gonna see is that if you want to implement a true specific plan, we've done this before, like in our downtown. We put in parking, streets, lamps, very nice. But that wasn't everything. It wasn't sewer, it wasn't water, other things. When you're talking about attracting the right folks to a specific plan area, how robust is the actual infrastructure gonna be? Or will we have to do something else like partnerships and other things? Because to bring in electricity, to bring in sewer, to bring in water, those are not things the city controls. But those are the things that we're going to be very pragmatic and talk about that is how much will industry be able to absorb those costs when they come in to build? And I think we have to have a very realistic conversation that the city cannot subsidize all those costs.

Correct. All right. Thank you, sir. And. So I think we need to focus on both. Obviously, that's in the process. When that comes forward, we're going to have to find out where that money comes from. And if it takes away from one of these projects on the list and we make that a higher priority, that's our time to do that is then. I agree with Mr. Klein that we do have to have focus on some of the more valuable land that's going to generate more revenue for the city, but not at the expense of not doing any of the other projects. So that's why I say it's a both and versus an either or. I know Council Member Stone has had conversations with a school district on an aquatic center that might lessen the cost of providing those benefits to our residents because we're providing the same benefit from two entities that maybe half the cost to each. And so that's in the works. And I know that the current staff at the School district supports that. I think our staff supports that. So any, I mean, we're looking at a lot of different ways that aren't represented in this short list. What I'd like to see is, Javier, is a, what revenue level in reserves would we need to maintain a two-year economic recession? I'd like to see what that number is, in your opinion. Because we currently have, with the $40 million in the operating reserve and the contingency reserve, the rainy day fund, we have another $14 million. That's $54 million that we have that we're not touching. And I'm not suggesting we spend that today. I just want to know what that number would be to take us two years in a recession, to at least give us the clarity to say, OK, well, let's say we need 35 million and we have 54. Do we want to maintain it at 54 till we get past this uncertain economic time? That's a choice we can then make. But knowing what takes us two years, which is typically the longest recession that you see, would be a beneficial number for us to have, if my colleagues agree. OK. And the other thing I'd like to suggest is we've done the tier one, two, and three. I think we should, not today, but I think we should look in the future once we get some answers to some of these questions we raised today, is look at prioritizing within the tier one, saying this is the most important thing to get done first. And instead of using the shotgun approach and spend a little bit of money on 20 different projects, let's pick one, two, or three and say let's get these done by and give it a time frame. You guys like that idea?

Well, like with Keller Road, it may take us four years to get the funding every year.

I don't know that Keller Road would be one I would put on there. I would probably put that on with an asterisk saying, if we get the money that we're continually working on. Because I agree with you. I don't like putting that expense on the backs of our citizens. Now, if it's a few million dollars just to bridge the gap, I'm all for that. Me too. But $20, $30 million out of our taxpayer funds to fund that, that should have been a state project from a decade ago.

Yeah, exactly. Yeah.

So, again, some of these might get asterisks in saying, yeah, when the funding comes, then we'll go full bore with it. So, yeah, I think that's a discussion we need to have at a future maybe workshop if you guys agree to let's prioritize within the Tier 1 stuff what needs to be done. Obviously, when Garrett comes back with that RFP and see what that cost might look like, we can figure that into it as well. I agree, it's crucially important to get Jefferson and Madison activated.

The more we can dial down and be specific, the more direction we give staff, the better we can implement our plan for the future.

Yes, agreed. Do you need something more specific than what we've all talked about?

No, if I could just offer a couple thoughts. Number one, I really appreciate the way you framed that discussion. That is really what we're trying to do even here. So what we did is we took some of what we learned after the basic prioritization of one, two, and three, and came up with what we thought were identified as some of the top projects. That still leaves us a deficit, so to speak, but again, acknowledging we have not pursued some of those other sources of revenue that could be really significant. Tens of millions of dollars over the course of all those projects can make a really big difference. So it's both true that even those seven projects is well more than the money we anticipate having, or at least that we can count on, and it's also true that we have a number of other projects where we've already allocated some funds, like the Madison Corridor Good News is some of that money's already set aside for that project. We have our DIF fees, often they are restricted by certain kinds of projects. So the sky's not falling and it's not Christmas. We're somewhere in between, but really what we do need now, that we can start to see the scale of these projects. And bear in mind, the list we're focusing on right now is 77 million short, but it doesn't include Warm Springs Parkway, which by the way, we confirmed, thank you clerks, was elevated from a tier two to a tier one.

That's what I thought.

It doesn't include land acquisition that we've discussed. It doesn't include a number of other things. And so as we get closer and closer to this kind of refined clarity, which I agree wholeheartedly, gives us the marching orders where we know where to put our energy. That is really the last step of this, is how do we take... what we have now and refine it so that we can say, boy, we'd love to do these three things, but they're in rank order, number one, two, and three. We don't wanna get too rigid with that because oftentimes we're gonna be tackling projects simultaneously or at least planning one while we're finishing construction of another. But getting that list, more refined than we have it now. So we at least know, to your point about the asterisks, which one are we waiting and which one do we have confidence to proceed with? And then what is the financial strategy to do that? We've talked a lot about fund balances that combined. Another way to look at it is to say we don't want our combined available resources to be less than 30 percent or less than two years operating. Bearing in mind, too, that whenever we have a recession, the first thing we do is eliminate lower value expenditures, defer maintenance that can easily be deferred. And so you wouldn't even wanna say two years of today's costs. It'd be two years of an adjusted operating model. And so if we do all that work and end up with something fairly clear, bearing in mind lastly that this is still gonna unfold over years. And so the variables will change, some of the seats will change, but we will have a really much clearer direction than we have today. I'm sensing that rather than committing say the unassigned fund balance to these seven projects, what you'd rather do based on what we're hearing is come back one more time at least and kind of help you understand here's what's on that tier one that we think is up there. Here's some things that are on the list that are below the line and let you play with that a little bit to at least identify here are the ones we absolutely know we need to do. Here's some that we're fairly certain And if we had to forego something, it's these projects over here. Is that right? Yes.

And I would want to clarify, too, like on Warm Springs Parkway, to use that as an example. We've got to get through RCA and that whole process with that. And while that's not a huge capital outlay, it's time intensive. And so maybe that's something we work on. without committing a ton of funds to, but again, with an asterisk on it, it's like, as we have the time working on these other projects, let's get that started through the RCA process so when we say, now that we moved it up to a priority because we have all this other stuff done, that we're not saying, okay, now it's five years to get it approved.

The most important thing I think to us is that we don't proceed with something in years two or three because it's in front of us and available only to get to years five and six and figured out we spent the money on a less important project.

Correct.

And so that's where things like Warm Springs or frankly we have a parking lot for a police department but not an expanded building in this, you know, in the seven projects we identified. And so we want to kind of look at all that and make sure we're balanced.

And if we could time that with the RFP answer for Madison, that would be great too. Council Member Stone, you snuck back in.

Thank you. I agree, I think that there should be an analysis on Keller Road and Jefferson and Madison. We shouldn't be assuming that Keller Road is not gonna be effective I'm in meetings with Scott at ICSC, and the majority of the meetings we're in, they want to be by the hospitals, but they're not willing to come until Keller Road is completed. So I don't want to discount by saying, you know, you don't want to put $20 million into Keller Road, but we don't know what the impacts are going to be. And so I think doing an analysis, Scott, definitely on the economic and job force, and what does that mean by, and we're assuming it's 20 million. I know that, I think it's eight million that WRCOG has kicked in. I'd like to know how much grant money has already been allocated to Keller Road. I believe there were ARPA funds. We use ARPA funds for infrastructure on Madison or Jefferson as well. I mean, we have utilized the monies that we've been gifted appropriately. But I think having those analysis is gonna be very, very important, because from there we can decide what is the best return on our investment.

Good point. Council Member Warren.

And let's not forget that we do have an application in for money to the federal government for a substantial amount of millions to help bridge that gap. So that could take a lot of money that we would be using for Keller Road and be able to redistribute it somewhere else. So I know that's very much on the table and being looked at and pushing very hard. Staff is doing a good job on that. Thank you.

All right. If there are no further comments, nothing else needed from council, this meeting is adjourned.