City Council - Regular Meeting

Good evening and welcome to your Pleasanton City Council meeting. Today is Tuesday, February 17th, 2026, 7:09 p.m. So appreciate everyone's patience as we begin. And with that, can we go ahead and have the pledge? Council member Nybert, if you don't mind, can please rise if you're able. Ready, begin. I pledge allegiance to the flag of the United States of America, and to the republic for which it stands, one nation under God, indivisible, with liberty and justice for all. If we can have roll call, please. Council members, present. Gatos present. Nybert here. Ta

here. Mayor Balch present. Thank you. Thank you very much. Uh I'm going to do a quick few announcements. The first is that we are having a technology challenge. So we will be doing roll call votes tonight. Uh even though we have agendas electronically and we're still switching to that. Uh secondly, happy Lunar New Year. We have the horse that was gifted to the city here if you're speaking and happy Martyra. So a little bit of alignment on everything tonight. Uh, with that, uh, we'll go to report out in close session. City attorney, no reportable action tonight, mayor. Thank you very much. Agenda amendments. Any agenda amendments by staff? Thank you, mayor. None from staff tonight.

All right. Any agenda amendments by my fellow council members at this time? Okay. Seeing none, uh, we'll proceed with the agenda as posted. Thank you very much. And we're going to move right along to consent calendar. Items one through three. Items listed on the consent calendar are considered routine in nature and may be enacted by one motion. If discussion is required, that particular item may be removed from the consent calendar and considered separately. Do we have any clarifying questions on the consent calendar by any of my colleagues at this time? No. Council member Tessa, any questions? No. Move to approve. Uh, council member or vice mayor, any questions? No. Thank you.

Okay. Uh, I have no public comment cards. If you would like to speak on the consent items one through three and have not turned in a blue speaker card, please approach the podium at this time. Hearing none, seeing none, I will close public comment and bring it back. Uh, Council Member Tessa, I'll move to approve the consent calendar. Thank you. I'll second. U motion made and seconded. Any conversation before we proceed to a roll call vote? Seeing none, roll call vote, please. Council members TA I. Gatos, I. Ikert. I. Nybert. I. Mayor Baltch. I. The motion passes unanimously.

Thank you very much. Okay, moving right along. We're going to go to meeting open to the public. This is item number four, public comment on items that are not on the agenda. I do have some blue speaker cards. If you would like to speak on this item, please fill out a blue speaker card and turn it into the clerk next to the horse. Uh, and uh, I like to read this. We do have some speaker cards. I'd like to read this before we begin. Good evening and welcome. This is your opportunity for members of the public to address the Pleasanton City Council on any matters that are within the council's subject matter jurisdiction but are not listed on the agenda. If you wish to speak for a matter that is on the agenda, please reserve your comments for when we get to that item. If you wish to speak now or in the future, please fill out the blue speaker card and turn them in to the city clerk. I ask that our community members be respectful and help maintain decorum. Speakers may have different opinions and we want to hear all perspectives and viewpoints. To that end, please no clapping, booing, or other disturbances. If you want to show support or agreement for what the speaker is saying, simply raise your hand. We will see that and understand that as support. Also, please know that this is your turn to be heard. If you do ask questions, those won't necessarily be answered unless taken up by a council member after the conclusion of your allotted time or after the conclusion of public comment in total. Speakers are hereby limited to three minutes. I have uh three speaker cards in my hand, so I'll call you up so you know the order. Lori Carduchi, you'll be followed by Jan Coleman Knight, and you'll be followed by Miss Vicky Learge. Three minutes, please, and welcome.

Welcome.

Thank you. Good evening, Mayor and Council members. I'm Lori Karduchi, Pleasanton resident, and I'm here to speak about federal immigration enforcement and the need for clarity and transparency in how Pleasanton will respond. On January 27th, the Alama County Board of Supervisors voted unanimously to adopt policies restricting the use of county property for immigration enforcement and directing administrators to establish clear guidance for how county staff will respond to US Immigration and Customs Enforcement activity. Alama County acted deliberately, publicly, and with specificity. Pleasanton must do the same. At the February 3rd city council meeting, this issue was raised by a resident. And I appreciated the response from the police chief and the mayor referencing the city's January 2025 statement that Pleasanton intends to follow California state law and not play a role in enforcing federal immigration laws and that the city's priority is the safety and well-being of all residents regardless of immigration status. But that statement is now over a year old. In that time, ICE practices across the country have escalated horribly, resulting in serious harm and loss of life during protests and enforcement operations, and public expectations for clear, written, and accessible policy have changed. The city's position has not. A year old statement is not a plan. Clear questions remain unanswered. What guidance exists today for city residents and staff if ICE conducts operations in Pleasanton? What is the city's protocol regarding the use of city property by ICE? Will Pleasanton establish clear standards such as ice-free zones on city facilities so staff and residents are not left guessing? I also want to raise concerns about the city's contract with flock safety. Alama County supervisors have requested that the Alama County Sheriff's Office prepare a report specifically addressing privacy and data sharing concerns related to flock. That

county that county request should prompt a serious reassessment by at every city level. Recent revelations about flock data sharing in other Bay Area cities including Mountain View and Capola underscore why Pleasanton must proactively examine whether surveillance technology aligns with our stated values. legal commitments and adopted policy, particularly when it comes to immigration enforcement. Has Pleasanton reviewed its flock data sharing settings, access permissions and history, and audit practices in light of these developments? How will Pleasanton ensure that the many authorized law enforcement agencies are not sharing data with unauthorized agencies or using the data in a prohibited manner? If Pleasanton's position is that it does not assist in federalable federal immigration enforcement, then our policies, statements, contracts, and data practices must clearly reflect that position. I'm asking this council to update the city's ICE related statement, provide transparent guidance to staff and the public, investigate and answer important questions about data sharing by flock safety, and bring this issue forward as a formal agenda item. Leadership means setting clear expectations before questions become crisis. Thank you.

Thank you very much. Okay. Can uh can I ask if staff is prepared to make any response to that? Uh not at this time. Uh just hearing public comment. I made some notes and I'll be sure to make some follow-up with the council. Um are you able to you we asked this I know I asked this about the flock and we did get a response from staff. Can you share that at this time? Uh, I'm gonna cold call our police chief. Uh, oh, she loves it when I do that. Sorry, chief. And so, uh, we can certainly speak to it and I can dig up the, uh, the information that was shared for with the council. Just give me a minute. Thank you.

Sure. Welcome.

Um, good evening. So specifically for flock we are uh very aware of the um challenges that some agencies have faced and it's regarding um settings that an agency sets. We have all of our settings set. We do not share uh with any organization or agency. every sharing um any sharing I should say is to law enforcement agency only in California only. So no outside of the state and no federal and we have auditing capabilities and all of the data um sharing by other agencies. If our data comes um is shared we have access to that as well.

Okay that's so I feel reassured that that was okay. Thank you. Yeah. Can I ask our contracts also have Excuse me, mayor. Oh, no problem. If I may, before you begin, city manager chief, if I can just ask, how frequently do we check that those settings? Do we check them annually, semianually? So, we're checking them very frequently right now just because of all of the conversations surrounding it. Um,

okay. the auditing of it is actually um consistently done since I've been here. This conversation has been going on and so we've really been sort of peeking through more than we naturally would. So we're we're auditing um I would say probably weekly. Okay. Okay. Thank you. Uh city manager, if you don't Yeah, please.

Just maybe two follow-up points for for public comment response this evening. Uh the contracts do specifically state uh how and if and frankly not sharing city's data uh uh unless uh there's conversation with us and and even in those cases we have clear policies that don't allow that. Uh and then the other piece is that administratively we have shared direction with staff regarding um how to address situations that might unfold on city property. uh and and so there are internal protocols already set for city staff regarding city facilities and uh and what to do in the case of uh ICE or any other uh presence on uh on public property.

Okay. Okay. Thank you very much. Can I just It is not an agenda topic so I want to just be careful as the city managers pointed out but yes if you'd like to I'm fully aware that it's not an agenda item. Um, so you did say you took notes and we will follow up on not only the flock but the ICE issue and because I would like our uh city attorney to weigh in I at some point if not now on how was the county able to do that? I thought that was not a legal action.

Yeah, I'm I'm not prepared to respond. I haven't actually looked into the um the county's action in any detail. I've just seen the news stories like others. Uh certainly uh willing to to follow up with the council on this topic. Okay. Thank you. Thank you. Thank you, Chief. Okay. Janice Coleman Knight, followed by Vicky Learge, followed by Basar Mi. Welcome.

Welcome. Good evening, Mayor Bal City Council members and staff. Tonight, I want to return to the original purpose of the July 15, 2025 city council ad hoc committee. It was quote to review the city's commission and committees structure. Let's think about this. Does the Civic's art commission structurally belong under the combined library and recreation department? Civic's art commission is involved with the firehouse theater and art center acquisition, installation and maintenance of public art throughout the city, music and performance programming, exhibitions and community cultural events. These citywide activities shape Pleasanton's identity, support our downtown and local economy, and involve multiple city departments. Let's consider an opportunity for structural change which would better align to Pleasanton one. I ask you to consider placing the civics art commission under the assistant city manager. This alignment improves executive coordination across departments, increases visibility and transparency, encourages economic development, and better aligns with executive art policy with city priorities. Pleasanton one emphasizes crossdep department collaboration. This is a governance refinement, a structural shift that increases efficiency, strengthens how Pleasanton supports the arts, and recognizes the firehouse and public art as core civic assets. In Alama County, no other city places its arts commission under a combined library and recreation department. Instead, arts functions are aligned to facilitate executive coordination, planning, integration, and citywide operational oversightes. Structural advantages not inherent in

Pleasanton's current alignment. Look at the contributing stones surrounding the base of the Pleasanton Centennial Towers on Main Street. They speak of public pride and involvement by the volunteers of the Centennial Committee. The Civics's Art Commission was created in 2001 to carry that energy forward to increase community input. The arts are an essential part of who we are as a city and thoughtful executive alignment would reflect that importance. Thank you. Thank you very much. Okay, Miss Vicky LeBarge followed by Bascar Mi. Welcome.

Hi. Thank you. Good evening, Mayor Balch. Council members, city staff, Vicky LeBarge, Pleasanton resident. First, let me start off by saying happy Chinese New Year, happy Marty GR, and happy Fat Tuesday. Last August, about six months ago, I raised the idea of exploring a licensed cannabis dispensary as a potential revenue source for Pleasanton. I want to be clear at the outset, I have no personal fin or financial interest in open opening or operating a dispensary. My comments are strictly about potential revenue options for the city. One of tonight's agenda items focuses on the budget and financial forecast. At the last meeting, a hotel tax was discussed as an obvious uh revenue option. And I agree, it makes sense. What I don't understand is why we have not also begun exploring the tax the significant tax revenue a dispensary could generate for our city. Or perhaps it has and we are just not aware that it's being explored. Danville has recently begun that exploration. Why not Pleasanton? Based on comparable cities, even a single dispensary could conservatively generate 1 to2 million in tax revenue. In the context of our ongoing budget discussions, this seems like another straightforward and responsible option that deserves serious consideration. I understand this idea was previously back burnered due to time constraints. But if the projected shortfall, and I did look at the presentation ahead of time, if the projected shortfall is as serious as we're being told, my question is simple. When is the right time to explore it? Thank you.

Okay. Thank you very much. Okay. Bascar Maddi followed by I apologize BH A W A Y W will be second. Welcome and then Anovi will be third. Welcome. Three minutes. Uh good evening uh honorable mayor and uh council members and city staff. Uh my name is Basar Madi and I have been in a proud Pleasanton resident for over 16 years. Uh I love our city and I have always appreciated how quickly the public works team has maintained our parks in the past. But recent times for the past 6 months we have been requesting to replace the tone sand wall ball nets and refill the sand uh have gone unanswered unanswered as of now. I'm here today to kindly request these repairs to our community can fully enjoy these facilities again. And uh we have uh 50 plus group members who play uh sand volleyball uh every day and every evening and weekends. Uh and uh we these courts were not able to play right now because of tone net and less sand. Um and then other people are also heavy competition and uh we've been going to searching other sand volleyball courts in the Pleasanton. We found Ken Mercer Park and Creekide Park and Meadows Park also have the sand volleyball court. But the problem with the Ken Mercer and Meadows Park, the Ken Mercer and Creek Park has a less height where men cannot play properly there. And Meadows Park has a less sand. And recently we tried to play there and two people got injured with their elbows when they slide when

they dive in on the court. Uh so kindly request to rep refill the sand wherever it is applicable and um increase the increase the height uh other two sand cuts so that way people everyone can enjoy these volleyball courts but right now in present tennis court he has a very bad uh net it was not replaced by the city park even though we requested couple of months. Thank you.

Thank you very much. We have uh three speakers on this. So uh maybe at the end staff we can ask you for a comment. Uh we'll go from there. Uh B h a y wa and bawwan. I apologize I'm and then you'll be followed by a n v o r y. Welcome. Sorry for the poor pronunciation on my part.

Yeah. Yeah. Thanks uh mayor and council members for giving this opportunity. This is the first time for me to in front of you all. Uh myself is Bhagwan and a resident of Pleasanton. I was with almost six years with the Pleasanton and I would like to bring bring a I mean the same question which Baskar Madi brought it up right. Uh we play uh a volleyball regularly like we could see I live near uh the creek state park which is lastos west lastos and like we could see the the net was broken which is I mean which is right we are not able to play there and we went multiple places right which will have uh less sand and the same right I mean it's hard to get for the people now some of the tennis park where he was mentioning Baskar Madi right there the courts are reserved for the women's currently like we don't have any proper uh the sand volleyball courts which is nearby so that uh that's what I wanted to bring it up to the forum so that uh you guys can help and set those broken nets which is proper for us to play and not only for us there are family members who plays on the over the weekends right that will be helpful this is common issues for like we have a close to like 100 members of two couple of groups in the pleasant we play regularly volleyball Well, we are missing those uh this will be helpful for fixing those those uh issues uh what we are facing. Thanks. Thank you.

Okay. Thank you very much. And uh Anovi A N V O R Y maybe welcome. How are you? Welcome. Doing good. So you can adjust that. Don't worry. There you go.

Okay. Thanks. So good evening honorable mayor and council members and so the city staff. My name is Anve Nimbari and I have been a proud president resident for the past 15 years for over 15 years. For the last six months, I'd like to address the issue of our request to replace the torn sand volleyball nets and refill the sand, which has gone unanswered. I am here to today to kindly request these repairs so our community can fully enjoy these facilities again. Okay, thank you very much. Okay, so uh I have a question of the speaker. Yes.

Okay. Have you guys uh brought this to the attention of the parks department at all or is this the first time you're bringing it forward? That's a yes from folks in the back. Yes, sir. Okay. Thanks. Oh, okay. Hold on a second. Since you're not on mic and people watch from home, we'll have to stop that if I may. So, I'm good with that. Okay. Did you have anything further in your time? Nope. No.

Okay. Thank you. We'll go ahead and stop you there. Uh, so I'm going to just let you know we have a park and wreck commission and they do quarterly uh reports on the conditions of all of our parks. They review that. So we um the council delegates or or um designates the park and w commission to review that. So that normally would be the first part, but I'm going to ask the city manager if he can comment. It may be that we need to follow up once we learn more. Um, and I will mention our main item tonight is our budget and uh the city of Pleasanton's talking about how to balance our budget. So, same manager, if I may. Appreciate that lead in. Um, uh, certainly uh, first time I'm hearing about the issue. Uh, if if you haven't already left, uh, the name of a person I can contact, uh, or someone our public works department can contact, please leave a phone number with Miss Diaz, who's our deputy city clerk. uh and we'll make sure that we circle back with you with a status update or at least a timeline relative to uh the sand and nets issues that you've mentioned tonight.

Okay, perfect. I would like to just ask uh staff the mention of that we will be talking about our budget deficit does not in any way suggest that we would not replace a torn net or replace the sand. I just I just don't know what has been budgeted for repair and replacement or where this is in the work order list. So, I'll I'll make sure that I get that information and and follow up, although additional courts would probably be a factor with our current budget situation.

And I just I think there's things like uh you know, bringing in sand is not replacing a net. So, I just need to make sure I understand where it is in the plan in the work plan.

Okay. And it sounds like we've got a phone number being provided. So, thank you very much. Appreciate it. All right. That is my last speaker card. Would anyone else like to address the council on any other matter at this time, please approach the podium at this time? Hearing none, seeing none, we'll close public comment and proceed to uh our next item, which is public hearings and other matters. Uh so right now we're going to go to item number five. Accept the fiscal year 202526 midyear budget update report including a presentation on the general fund forecast and adopt a resolution approving the 2526 budget amendments. Uh city staff or Miss Shay. Oh no. Go for it Susan.

Okay. Uh good evening mayor and council members. Uh tonight we will review the media budget update for fiscal year 2026 and the general long-term financial forecast. Tonight's agenda will cover an um update on the economic outlook, uh budget highlights, proposed budget adjustments, and the long-term financial forecast. Economic indicators um suggest that the US economy will uh soften through the first part of 2026. Rebounding is expected to be driven by AI investment uh tax incentives and potential rate cuts by the Federal Reserve. Um however, uncertainties remain in the economy due to trade uh tensions, inflationary pressure, and a cooling labor market. Those factors all impact the city's um budget. The revised general fund its balance uh with uh resources aligned to sustain essential city services uh services and programs. Um overall revenues and expenditures are projected to be uh lower than uh previously projected. Um the revised budget proposed to increase the contribution from the capital reserve fund with this additional contribution and the project expenditure savings. The 1 million withdrawal from the pension trust fund uh is not expected for um this um budget year. operating deficits um are projected to um uh for the out years um I should say beyond fiscal year 20 uh 20 um uh 7 it's uh projected to range from about 6 million to uh 10 million. This funding gaps are generally consistent with our prior projections. This slide highlights the uh main drivers behind the general revised

budget in the long-term financial forecast. Poverty tax it's projected to come in lower uh primarily due to resolve assessment appeals and potential temporary reductions to assess value. Sales tax it's projected to be lower um as consumer shift spending towards more essentials and value focus purchases. Um business license tax is projected to be higher mainly due to strong growth um in the prior fiscal year. Overall expenditure savings are expected with a higher vacancy factor and anticipated reduction in pension cost and lower general liability insurance costs. Uh please note that pension obligations are expected to fluctuate from one year to another uh mainly due to calbur's investment gains or loss. This slide uh summarize the general fund budget compared to the prior um uh projection or the adopted budget. Revenues are projected to decrease by about uh 60,000. Expenditures are projected to decrease by about 600,000. Uh net transfers are projected to increase um by about 500,000. The plan use of uh 1 million in pension uh trust funds is no longer needed for this u budget year. The general fund is projected to have a small surplus of 23,000 at the end of the fiscal year. Jennif revenues are projected to total over 160 million excluding uh almost 3 million in transfers from other funds. Uh property tax account for about 60% of the general fund revenue or 96 million. Uh sales tax accounts for uh 16% or 26 million. business license tax and uh hotel tax account for uh 7% or uh 12 million. Uh other taxes, development

service fees, um recreation fees and other uh revenues account for about 17% or over 26 million um in revenues. Uh general fund expenditures are projected to total over 154 million excluding uh over 9 million in transfers to other funds. Uh personnel, material, supplies and service uh costes account for 94% of the general fund expenditure or about 145 million. Uh cost related to transportation, training, repairs and maintenance. uh capital outlay and their services account for about uh 6% or over 9 million uh in in um in uh general fund expenditures. This slide presents the major adjustments for the general fund. Uh red lumbers indicate a decrease in revenue or expenditure. Based on the updated projection provided by the city sales tax and property tax consultants, uh property tax is projected to decrease by 1.2 2 million and sales tax um is projected to reduce by about 200 million. This reductions are expected to be offset by an increase of 600,000 in business license tax and 600,000 in uh development uh related revenues. The contribution from the capital reserve will be increased by 500 uh,000 to a total 1.5 million for the current fiscal year. Well, this additional contribution and uh savings from uh personal cost net of higher material services and uh surprises uh cost uh we no longer need the 1 million in uh uh pension trust funds to support the current year budget. This slide presents the highlights for

other funds with the water rate increase pool by the council uh not long ago. uh water fund revenues are projected to increase um and higher than uh what was adopted in the budget uh with resources available to fund program activities and rebuild operating reserve. Expenditures for the sewer repair and replacement programs are expected to be higher. Uh we are expecting additional recycling revenue for the city's um um waste and recycling program. Uh please note that this is restricted revenue due to increased development activities. Uh we are projecting higher development impact fees in certain funds. Uh these are restricted one-time revenues. There are also a number of adjustments to increase expenditures across various funds to support services and programs. Um this slide presents the major adjustments for the water and sewer funds. For the water fund, uh water service charges um are expect to increase by 2.9 million. Zone 7 water purchase costs are projected to increase by 1.2 million. Uh other key uh expense increases total about 800,000 related to a W truck and uh contract support um uh projects such as a cross control cross connection control plan, the SS management plan and the fireflow analysis for the sewer fund. um uh Won combo truck uh combo truck was um ordered in the prior fiscal year for sewer clean and the truck was delivered in the current fiscal year resulting in um a higher replacement cost of 800,000. That's why we're adjusting the budget. Um for other funds, the major adjustments include 200,000 for um

police vehicle outfitting and uh lease vehicle cost. Um the the developer contribution revenues are projected to increase by 500,000. As I mentioned earlier, we are expecting um additional recycling revenue. This is the work uh done through green waste recovery. The council approved a contract with the company uh several months ago. Um this 1 million uh is expected for the current fiscal year. Uh but please know that this revenue stream is volatile. We may not have this level revenue uh every year in future years. And we also have an expiration date with uh with the contractor. The contract will end in uh 2029. As I mentioned earlier, with higher uh development activities, um the revenues for public facilities fund and the traffic impact fee funds are projected to increase by 500,000 and 400,000. Next, we'll review the updated general long-term financial forecast. Uh agencies use long-term financial forecast as a strategic tool to guide policy and decision making. As noted in the staff report, uh four scenarios are developed uh in uh for this presentation including baseline recession uh new hotel uh tax or hotel tax increase and uh development revenue related uh scenario. The baseline scenario assumes um there are no significant changes to the current econ uh to the current economy. Um this is what we call the most likely scenario. The recession scenario assumes that um an economic downturn will reduce uh revenues. The hotel tax increase scenario assumes a 2% increase in hotel tax rate uh in fiscal year 2028 and then another 2% increase in fiscal year 2029. The development related scenario assumes

um uh planned developments in the long-term forecast with one-time development fees and ongoing property tax revenues. Uh please know that this is a very optimistic scenario. We should not uh count on the revenues for uh operations until fees are collect and uh new construction values are enrolled in the tax role with the county. This scenario also comes with additional uh uh costs related to services such as public safety services and infrastructure replacement costs down the road. Uh it's not like revenue just come in and without uh additional costs. I want to mention that the expenditures for all four scenarios are the same uh as uh changes to service levels require council approval such as cost reductions and service en enhancements. That's why staff is not u making any changes to the expenditures for the different scenarios. This forecast does not reflect budget balancing strategies such as the use of pension trust funds. Um the operating deficits for um the forecast period beyond fiscal year 2027 uh ranges from about 6 million to 10 million. Please note that the 44 million annual funding gap identified in the SS management plan is not addressed in the forecast. This slide presents the key revenue assumptions used in the forecast for property tax. The growth rate uh is projected between 3.7 to uh 3.8% uh annually. As noted in the staff report, the growth rate for fiscal year 2027 is projected to be lower than 3% if the ant uh anticipated reductions are implemented um by the county. However, um the growth rate may be higher if the reductions are not all implemented in

fiscal year 2027 and some of them implemented in the um other fiscal years. um and and the increase in other fiscal years will be lower and when the increase in fiscal year 2027 will be higher. For sales tax, the annual growth is projected to be between 2.8% to uh 3%. For business license tax, the growth rate is about 3% uh annually. For hotel tax, uh it's about 2% annually. For franchise fees, it's about 2.5% annually. For other revenues such as permits and recreation revenues, the growth rate is projected to range between 2% to 3%. This slide presents the key expenditure assumptions um used in the forecast. Please note that there's no change in funding level to the uh city's capital improvement program and the defer maintenance program. Uh as I mentioned earlier the 44 million annual funding gap identified in the SS management plan is not included in the forecast. For personnel costs uh 6% is projected um to increase in fiscal year 2028 4% in fiscal year 2029 and decrease to um about 2 to 3% in later years due to anticipated lower pension costs. For non-personal costs, um the growth rate is projected to be between 3% to 4%. For operating transfers to other funds such as the water and sewer subsidy programs and the storm water operating fund uh is projected to range from over uh 1 million to uh 1.5 million. The contribution to the uh capital improvement program is projected to be between 3.5 million to um to be over 5 million. uh the contribution to the defa defer maintenance program is projected to range from over 5.5 million to um over uh six million.

This slide presents the project the annual deficit or surplus for the baseline scenario uh beyond fiscal year 2027 or the current budget cycle. The annual deficit is projected to be close to uh six million to um close to 10 million. Um you will see on here the bar for fiscal year 2023 is higher. Uh due to resources retained in the general fund to meet the 20% reserve target. Uh in fiscal year 2023 the city council adopted an updated reserve policy to align with best practices. Um and that's why uh that bar is higher for 2023 and the recommended minimum reserve um from the GFOA it's about 17%. This side presents a comparison of the four scenarios in terms of project annual deficit and surplus. The yellow line represents um the development revenue related scenario. Even with this really optimistic scenario, the cumulative deficit over the 10-year period, it's um projected to be over um 16 million. Um the green line represents the hotel tax increase scenario. The cumulative deficit is projected to be over 41 million. The um blue line represents the baseline scenario and the cumulative deficit is projected to be over 64 million. Um the gray line which is the last one um on the chart represents um the recession scenario and the cumulative deficit is projected to be over 115 million. It's almost twice of the cumulative deficit for the baseline scenario. Looking ahead um in March and April, staff is planning to present the pension strategy and the fiscal year 2027-29

budget engagement plan to the council for consideration uh in May and June. We are planning to present the mission budget update to the council. We'll also have a discussion with the council regarding uh the funding plan for assess management plan to support sustainable and serviceable community infrastructure such as the library uh public safety facilities, parks and trails, roadways, and uh storm uh water system. And um in the next several months, we'll continue to work on the citywide organizational assessment and we'll identify some uh strategies or ways to uh improve efficiencies. Staff recommends that the city council accept the mere budget report and approve the proposed budget amendments. Uh this concludes my presentation and I'm happy to answer questions.

Okay. Thank you very much. Why don't we uh keep the slide with the different scenarios and the tenure forecast up just yeah just as in case we want to refer to that as we go. Uh although obviously if different council members have different questions we'll go from there. Uh okay so we're going to go through clarifying questions. Uh it looks like I'm going this way first. So council member Tessa clarifying questions to staff on item number five. Um well it is um yeah I don't have a lot of questions because I think it's pretty clear that um we continue to um have a structural deficit. Um given that the um sales tax measure did not pass. Um there is going to continue to be um a deficit unless we come up with some additional revenue that you can confirm that but that's in the report. Yes.

Yeah. W with additional revenues that will definitely help us to reduce the deficit. Right. And right now we're looking at what was in the report. The toot is the only one that's really identified. uh the tot related um scenario development revenue related scenario. I love that slide because can you just go to that one? Um because new development it was um in um identified highlighted as very optimistic. Could you expand on why that's very optimistic?

Yeah. Um so in that forecast scenario we assume some development projects will come through within the next several years uh such as the um Oyal Lago project but we all know the timing of a development project. It's really uncertain uh due to you know delay on constructions and developers may change you know the timeline for the projects because the market may not be looking as good as they fall. So there's so many different factors um and and also we um we anticipate one-time revenues in the forecast period and the timing of collecting those revenues is also uncertain. That's why we think this scenario is really um really optimistic and we do expect some revenues to come in uh within the forecast period but the exact timing and the months may be hard to determine.

Yes. And as you pointed out with new development people think that that is going to be a windfall but the reality is it's offset with yeah it comes with additional costs right as you increase your population and you are going to serve more people and there will be wear and tear on the you know on the streets and roads right you have more frequent visit of the library use of the public safety stations um the parks you will also need to replace them down the road. So there will be also infrastructure costs down the road uh not in the immediate turn.

Okay. Thank you. Because um during the discussions about the tax measure, I know that there were promises that the public would not feel the the cuts if it didn't pass. And in fact, there have been a lot of public service cuts. So, what um what other service cuts um maybe the city manager would um address are we looking at with this continued deficit? Um what might that look like? What risk to um programs and services and in our community?

Yeah. Um, you know, obviously we're presenting this publicly this evening, but we've been working on it for uh for several weeks now, getting the the last few pieces of information. And so there's some things that I can do organizationally and operationally that I'll start to do in the organization which uh generally looks like you know a soft hiring freeze uh and other um sort of internal savings opportunities that um that would basically take from projects that maybe haven't started yet. Uh just sort of slowing that down. uh if there's council approved projects and priorities, we'll be having a workshop uh coming up in March to talk about uh those kinds of opportunities. And then going forward, we'll be presenting a variety of policy options and operational changes um as part of probably the you we'll start with the midterm budget, although that won't be our big opportunity. The next opportunity will be with our next two-year budget where we'll we'll present the council with options around using u you know onetime money uh to help to bridge uh through this period of time uh and and create a little bit more space for us uh to further reductions uh will likely be presented as well uh just because we we we know that we have a structural issue.

Right. Okay. Well, and so you mentioned um soft hiring freeze that um pie chart where 72% of of um our expense is um uh employee related expenses and so um I guess um are we do we still have I keep asking do we still have an opportunity to um to consider a sales tax, repeat the sales tax and try and recover from that loss.

It's a council uh policy question. Uh we do have to have our materials uh with the county by August. We don't have a firm date yet, but it'll be early August. Uh and the coun the council was this this conversation was had last August. Um we were uh looking at potential revenue options for the for the organization and for the community. Um so it has been asked and and been discussed and direction's been given and we are pursuing the hotel tax in the near term. Uh but ultimately uh it is a council decision about whether or not we reconsider that.

Yeah. Okay. Um let's see. I I just had two more quick things um that well and actually before I go on there when I asked what kind of risks we'd be looking at. I mean we're looking at can we um afford police vehicles? Can we I mean there's some pretty um significant and vital um resources and services that were identified. Um the um I was asked to it came through in our um recent responses but I would like to ask for the sake of um a community member asked me having read the report how many um property tax challenges um are in the pipeline and that was answered in our um information to the council, but I'd like that to be a public response because I was asked by a member of the public.

Yeah, it's it's hard to predict um how many appeals will be approved by the county. Um there are appeals out there from uh different property owners, you know, for example, commercial uh building property owners and office building property owners. It takes time for the county to process those appeals. Um but so far the success rate for the city and even for some other cities in the county ha ha h have has been pretty high. Um for example uh one of the percentage I got from our uh property tax consultant was over 60% approval rate. Um but in terms of the reduction in w it was over 15%. So it's not a small percentage. That's why for the 2027 property tax projection at this point it's projected to be lower than 3%. Assuming the county implements or enroll all those uh resolve reductions in fiscal year 2027 we're going to see a slow growth in that year. But if they don't imp implement all of those reductions, right, and they do some in 27, do some in the other fiscal years, you're going to see a higher growth rate in 27 and maybe a lower growth rate in 28 and 29, for example.

Okay. Yeah. So, it's hard to predict how many and the while you the county will approve, right? So, those property tax challenges are commercial or is it both? It

it can be both. Yeah. Okay. All right. Um then the last I I did have someone ask me said in the report there was reference to our um um cost of um employee costs but didn't say how many employees we have. I I ask this publicly often because people are always interested in knowing that. Um, can we just get a quick number on what that number is? Got it.

Yeah, we have about 465 employees including all of LPFD, which we only technically fund half of, but we manage all of the personnel related issues. So, we often count them in our total employee count. Okay. All right. Thank you. I'm done. Okay. Council member Iker, clarifying questions, please. I only have a a few. Um, are one time are there any one-time revenues reflected in in any of these projections?

Um, there might be some minor ones in there, but it's not significant. So, we try not to include significant onetime revenues in there because you're not supposed to use onetime revenues to support ongoing operations. But you know every year you you have some onetime revenues and onetime expenditures in there right that may not repeat again um but they tend to be smaller amounts in general. So you may for example right uh east person for example professional services right and you may have say $50,000 for that project but next year it may drop off that's what I'm referring to. Yeah, it's for if you're talking about significant ones like oh $500,000 here and there, right? For some significant projects, those are not in the long-term forecast.

Okay. So, for example, the $300,000 or excuse me, $3 million in onetime revenues that we received this year. Yeah. Would not have been anticipated because we don't budget for those things. Yeah. But they do occur. They do occur sometimes, right? That's why we do a mere budget update and a mutter budget update. So at the time if we know that those projects will come through and we have certainties that they will come through we'll include them in the budget.

And generally what do we use those one-time uh revenues for when they do come in? Uh in general we uh based on our policy we use them for one-time projects right for example uh contributions to capital projects pay down our unfunded liabilities um uh use the money for our you know major repair and replacement programs um onetime projects you know dedicated by the council such as a pilot program for example.

Okay. uh to change to a different thought process. The uh so I'm reading a line out of the staff report that we got which is the general fund structural deficit remains close to the projection from the prior fiscal force forecast ranging mostly from 6 million to 10 million. So when we when I first got on council, that was the same conversation we were having except it was 7 million to 11 million or 13 million and we went through during this budget cycle and reduce the budget by 7 million and I think 10 million on the second year. Um yet it seems to have almost a negligible impact on on the future moving forward even knowing we've reduced our costs by a significant amount of money.

So actually the reduction was about 7 million for each fiscal year. Okay. Yeah.

Sorry. The the 10-year average was about $13 million per year. So we we took about half of it out. And you're right, it is negligible. And that's because of both the expense issues that we're facing, right? you know, rising costs around a lot of the different things that we do, including personnel costs. Uh but also the fact that our largest revenue source uh is is lower than projected, frankly. Uh property tax being um coming in less than what we had anticipated. And and it's not just us. There's other parts of the county that are seeing this uh this issue, especially around the office market. So um you know just like uh just like the expenses the revenue side uh compounds as well and so if you start to push it down in those those earlier years putting you know putting percentage back on it just takes a while for cities to seems like catch back up when revenue falls behind. Hotel tax is another good example of that precoid we still haven't fully rebounded. Uh it it goes away fast and it come back it comes back slow generally. Okay. So, let me ask another question. Is if you know we had a crystal ball and we went back and changed our trajectory and said we approved measure PP, we had a a year's worth of the $10 million that tax would have brought in or projected to be brought in because that could have been less because of sales tax coming in less. um we would still be in the same position had we not done the cost cutting exercises that we went through during the last year because if we if we didn't add that piece to it

that $10 million still wouldn't have been enough just like the cost cutting of the $7 million wouldn't have been enough.

Yeah, it's it I mean I don't want to Monday morning quarterback it. um $10 million of additional revenue every year for the next even if it was relatively flat for the next 10 years would have been helpful, but we still would have had to control costs and I I you know I don't want to say that we would have been quite as aggressive as we were in that first round. Um I think we would have been able to meter things out a little differently. uh we are doing the org assessment and I think that those kind it would have bought us some time to to invest in those kinds of tools. Uh we're doing that work anyway. Uh we're going to have to and so that's the the trajectory that we're on.

Okay. Thank you. um wi with the current uh comparison four-year comparison you have um that includes putting aside additional monies each year uh towards our uh CIP which amounts to be 9 to 11 million a year as we move forward which is significantly greater than we've done in the past. It it it it depends on which year you're comparing to. If you're comparing to for example 2025, right, it's definitely a much higher amount. I think in the supplemental material we provided you the actual for you know uh two prior fiscal years. Um in 2024 we were able to do a little bit more um putting aside money into the capital improvement program and the repayment replacement program as we always know that we have great needs in those areas. Um I mean I I I didn't put this out in in the media budget report when we come back to you for the mitten budget update. We'll have to talk about some of the significant ass related to repair and replacement. Um you know some of the the vehicles are getting a little bit old and um the cost are pretty significant and we didn't feel it was appropriate to consider such a significant item when other competing um priority is not presented at the same time. So, we're going to wait until the mitten budget update to bring back some of those items to you for consideration.

Okay. I think well, that's probably the appropriate time to get into the minutia of how that how those expenditures are coming as we move forward because I think how you break it down matters. Um, but I think that's a different conversation than what you're laying out here. So, I appreciate that. And if I if I could, I I mean I just want to um what we had done historically didn't allow us to keep up with the need. And so yes, we're putting more to it, but we know because of asset management that there's a long there's a long way to go. We may never get to the fully funded asset management program. Uh but we have work to do just to stabilize current resources, current needs. Um and I think we've used the example of a firetruck. I don't mean to poke at LPFD. It's not uh it's nothing specific to our department, but we've seen the cost of fire trucks basically triple in the last handful of years. And um you know that's uh that's just a reality that we're all facing that is really hard to get back on top of when you're behind in the beginning.

Thank you. I'm done.

Okay. Uh Council Member Nybert. Thank you. Um, yeah, I don't have a whole lot of questions. I did want to, um, and Bob, thank you for the presentation. I really appreciate it. The, uh, funding gap that, um, Council Member Aker was just referring to, and you from an asset management point of view, um, I know it states in the presentation here that the forecast does not include the $44 million annual funding gap identified in the asset management plan, and we'll be discussing that later in the year. Um could you describe or just say how the $44 million funding gap was calculated? We have an actual um need for our asset management, deferred maintenance and so on and we devote a certain um amount of resources to it. So how did we arrive at the 44 million?

Sure. Uh in December um an update regarding the SS management plan was presented to the council. Uh at the time um um the city engineer and the consultant presented to the council that the annual funding need is about 63 million for general fund support assets over the next 10 years. We have about 19 million uh for replacement um you know um to offset that 63 million uh including some restricted money from gas tax from the state and you know uh uh some measure of BB money from ACTC uh plus you know the the annual contributions that we put into the um the the repair and replacement program and the capital improvement program. So we have about 19 million in total. So 63 million minus the 19 million our gap is 44 million. And I do want to say that we it's unlikely we'll have that amount of money to fund our needs. Um but even talking about 50% it's it's a a pretty hard goal to reach at this point.

Certainly. Yes.

Yeah. Yeah. A very hard goal to reach at this point. um uh which in fact highlights you know one of the benefits of having the asset management plan in the first place and having spent the money to to uh get there to where we are now that we can you know establish the priorities and soberly assess the needs um to determine how we want to spend that type of money. Um, even devoting currently, you know, $19 million to it and leaving a a gap of $44 million um just, you know, it boggles the mind to put it mildly um as to how we're ever going to um you know, get ahead of that. But that's a discussion yet to come. Um in regard to the uh other expenses looking forward in the uh four budget scenarios are the um the expenditures primarily uh forecast to be the same in all four scenarios uh with the exceptions of the you know the actual the um you know the described differences. In other words, is everything else pretty much the same?

Yeah. Yeah. The expendentures are the same. Um as I mentioned during the plantation uh usually um new services will require council approval. So it's not appropriate for staff just to assume what would be add or even for removal or you know uh uh reduction of services um you know we would not know what the council would approve. So in the forecast scenarios we usually don't adjust the expenditures but we do know if there is an economic downturn we will reduce the cost um from you know uh from uh directions from the council. Right. Right. Okay. Yeah. Yeah sense. Um

without specific council direction on certain expenditure items and of course future budgets it's you know it doesn't make sense to change the baseline. Right. Yeah. So um with regard to the pension expenditures in other words our our contribution to Kalpers each year I noticed that in 2023 our actual was 20 20.5 million for that year and in the current year well 2026 budget it's up to 26.4 million per year. Yeah.

Out of the general fund of about $160 million. So, I mean, that's a significant percentage as we all know. We've talked about that before. And I see that the according to the forecast, we're looking to reach over $30 million per year at the end of the decade, 2029, 30, 31, um, before it starts to somewhat go down. So, we're increasing, you know, well over a million dollars, you know, in some cases close to $2 million per year just in the pension contributions. Um, yeah, and you you look at that amount and you look at the amount of revenue that we're talking about in certain instances. And I mean, it's easy to see how one source of revenue just gets entirely sucked up by one particular line item. And I know it's it's It's kind of a a funny way of looking at uh you know budget revenues and expenditures, but you know that's how my my mind thinks of something like if if a hotel tax goes through uh and is approved by voters you know 2 million 2.2 million a year potentially uh in revenue after 2028 or so. um in my mind that's going straight to one line item, the increase for example in pension or whatever you may choose. Um and so that's kind of that's the nature of a structural deficit. So yeah, the question the question is um

do you have any money? How do we how do we get ourselves I know how I I think we know how we got into this from all previous discussions over the last several years but I mean do you have any optimism at all? I I would say every dollar counts. Um we are still you know taking the right steps um to to get to where we want to get to. Uh it's going to take more steps down the road but this is the beginning step to get there.

Yeah. Yeah. And I I know we're doing the right things um as far as taking steps, you know, with our the various uh asset management plans, the wastewater plan, the you know, water management plan and so on um uh over the last several years to get a handle on the things that we need to be taken care of and um you know, find out what that bad news is early. You know, bad news early is good as I've always been told. Um clarified question. Yeah. No, no other questions. Thank you. Okay, Vice Mayor, thank you.

Sort of going on the chart here, um, and the the colors of the lines, um, we're at 25 26 and we've sort of balanced our budget and that's why we're at zero. Correct. Yeah. It's a it's a small surplus of 23,000. That's why you don't see a B, right? And so at that point, everything in the future becomes a projection. Correct. That's correct. All right. And so the blue line would be the baseline. Um but is it true that that blue line presumes no additional development monies as far as increased property tax or permit fees? Is that what that blue line represents?

We we have uh we have some uh growth rate in there. So uh we assume you know um an annual growth in new construction values in there. Um and you know and then we assume 3% increase in development revenues. So there is a growth factor in there. All right. So with the yellow line what what is included in the projections in that yellow line going forward like a royal logo and

yeah those bigger projects that um that in the pipeline you know some were already approved right some may not be approved but we do think the development fees will come in right in the near future. So for example um a loyal logo the merit project right um and those are included in there. So the ones that have been approved and um you know the ones that are under construction right and the ones that are likely to you know to come through they are included in this long-term forecast. So if if that's the case then the yellow line what the yellow line projection represents is that absent a recession um the increase that is projected in development will essentially bring our budget to the positive by 2031. Is that a fair statement about what this represents?

If every project it's guaranteed to arrive on time as we planned. Yes. Okay. But often times that's not the case. Right. I understand but you've projected it as if the projection is the yellow line how we how we project things to go in these years that's why it's on this right right graph but what's not included is the additional costs related to services and infrastructure costs related to those projects okay and okay so then the green line is um if the toot is approved and goes through in this election cycle right fair statement Yeah.

Shouldn't there be another line that is, you know, what happens if both the toot are approved combined with the additional uh, you know, development and and like the green plus the yellow line, wouldn't that be higher than than they both sit right now? Well, if both of them will be achieved at the same time, right? And of course your net bottom line will be better right and I mean that's another scenario we can consider then it's extremely optimistic in that case

but that so the blue line the the green line indicates just what the projection is from the baseline if it's just the toot right just the toot and then the yellow line is just the adjustment from what developments we project to be approved right through 2013 34 2035. Yes. However, if the toot passes and then all of the projects that we expect to come forward do in fact happen at at the rate that we project and the the opt the situation because becomes much rosier. Fair statement. Yeah, that's a fair statement. But then at that time if you have the resources right then we need to consider the funding gap for the assess management plan. So that's the one thing that we did not address in the forecast.

Sure. Yeah. And if we end up with a surplus, that's a certainly a good conversation to have at that point. Okay. All right. I just want to understand a little bit about the the projection going forward. Um Okay. That those are the questions that I have. Thank you.

Okay. Thank you very much. Uh I think mine were much of the supplemental so I'll not repeat some that I'd like to make sure the community is aware of. Uh, we obviously have been talking about the property taxes have not been rolling over and producing the estimated year-over-year increases. So, the P Gen acquisition of the workday building is a perfect example. P Gen pays property tax, right, staff? So, the challenge is just the basis is going to be much lower than it was previously on the tax role. Correct. That's correct.

And that's kind of a great example of what our challenge is that we have. Okay. My second question was uh we budgeted this is only six months in. So so our community should be aware this is only six months in kind of sitting at you know accountants always look back but December 31st but at 6 months in uh staff we don't think we're going to have to use the $15 million uh that we had authorized previously through operations and cost savings. Correct. Yeah. This is through um expenditure savings and an increase in contribution from the capital reserve fund.

Okay. Uh and the capital reserve fund just to clarify or confirm was when we had previously heard about our budget surplus from prior year, the council under staff's recommendation uh put approximately $3 million to shore up some funds for just this purpose. Correct. Yeah. for to not use the the money from the capital reserve. Yeah. There wasn't implied that staff would look to see if they could offset that. And so this is that action, right?

Okay. So I just want to when I think of optimism, maybe I'll just point out there's some things that are working here. Uh okay. My other question which was um when you did the the 10-year forecast, we have had a presentation from you about rolling off some of the lower performing investments in our our portfolio investment account and bringing on higher yielding investments, right? Did you project that in? How did you handle that? And I know it's an obviously complicated item as we are um managing more actively managing our our bond and and um investment portfolio.

Right. So so uh rebalancing of the investment portfolio has been done over the last year or more than a year um by our investment manager uh Chandler. Um that contract was approved by the city council um in 2024. In this forecast beyond the current budget cycle or fiscal year 2027 we are projecting a 4% return on investment earnings. Um and the reason we uh kept that 4% um in the long-term forecast is because we are planning to utilize um you know uh a different strategy for our investment portfolio a longer duration strategy to generate more investment income. If you look at the market today, it's probably slightly less than 4%. Um, the reason we kept 4% is because of that strategy uh change in uh strategy. When the investment manager presented to the audit committee back in January, that was asked by the audit committee and there was a recommendation from the audit committee to um get into a strategy that will help us to generate more income down the road.

Yeah, I remember appreciate you bringing that up. Okay, let me go a little bit further, which is uh let's talk about the vacancy factor used. So, in the 10-year projection, uh the supplemental answered it. So, I I maybe want our community to know. I initially was concerned of moving from a 2% vacancy factor, assuming that we would have 2% of our staff positions unfilled to a 3%. But it looks like we actually been doing better than what we've actually experienced in the past. Do you mind elaborating? Yeah, I uh if I remember correctly, in fiscal year 2025, it was about 2.9%. Chris, is that correct? And in fiscal year 2024, it was over 4%.

Vacancy. 4. Okay. 4.1. Okay. 4.1% um uh vacancy factor. So on average over two years, right? Uh you know, it's it's over 3%. So now we're basically aligning with our historical average pretty closely is what I hear. Yeah. So when we applied 2% it was a little bit new here. We did want to uh see the actual results before we make any adjustments. That was the first time we implement it in in in the prior budget cycle.

Yeah. And and I will renew my question to the city manager that uh if we want to hire uh a utility individual u or a police officer or a firefighter, this vacancy factor isn't going to uh budget is not going to dictate. If we find a qualified candidate, we're going to hire. Correct.

That's correct. Uh we when I talked about a soft hiring freeze earlier, uh it really is making sure that we understand where the needs are, council priorities, uh and ensuring that um that we have the resources available to fulfill those needs. Uh also uh folks like our utility workers are uh are generally paid through enterprise funds which helps to alleviate some stress on the general fund budget with respect to those positions.

Okay. And then my I think um my last question I'll just ask also for public the tenure forecast that we now have as attachment excuse me oh not on my page I think it's attachment two has much more granularity in revenues and expenditures than we've had in the past. I presume staff that came from the ID Bailey recommendation about having a consistent presentation. Do you expect this presentation with these line items to be the method that you use going forward and uh or do you expect to aud modify it further? Uh that's correct. We expect to use this presentation going forward.

Yeah, and I'll just note for our community this is in much more granular detail than it was in the past and I greatly appreciate it. So, okay. Uh I think that concludes my questions. Any further questions from my fellow council members before we go to public comment? Oh, yes. Council member Nyberg, uh, would you agree that the, uh, the yellow line here showing the, um, forecast or projection for development based revenue is is in fact a fantasy. I mean, oh, that's um, I would ask a clarifying question. Not I would ask. Okay, I I'll make that comment later. Thank you.

Okay. Thank you. Let's not have staff appine on that. Okay. Any other clarifying questions before we go to public comment? Okay, thank you very much. Uh, if you would like to speak on item five, the fiscal report and 10-year projection, please fill out a blue speaker card or approach the uh dis the um podium at this time. Hearing none, seeing none, we'll close public comment and bring it back. We need a motion to accept staff's recommended changes and approve the forecast, but we will go through the process. Same order. Council member Ta. Um, I I'll just say I appreciated um Council Member Nybert's um emphasis on the pension um costs and how our annual payment continues to rise regardless of um Kalpers having a couple of positive years after um more than a decade or two of negative um years. So, um, we're in no way out of the woods with the pension when we hear that they've done well the last two years. So, I would um make the motion to accept the um 2026 midyear budget update report, including the presentation on the general fund forecast. Um and um we are we are choosing one of the options. Is that right? So I would add I would

no no we're not going to do um the staff recommendation of the they present all of them for our knowledge but the forecast is just the forecast. Okay. The adoption is the amendments to the fiscal year. Okay. So that's it. That's the motion.

Okay. Council member Aker. First of all, I'd like to thank you for uh the time you've put into this uh presentation and the amount of hard work and knowledge that it goes behind all the numbers that get put into this. I know there's a lot of uh uh work with your staff and consultants to make sure you're getting this right and uh thank you very much for that. Um I don't have any additional questions and I uh will second the motion. Okay. Thank you. Uh, Council Member Nyber,

thank you. Yes, I do also support the motion. Um, just to follow on on my last comment, uh, my my opinion, not yours, is that the additional development line is, as you said, very optimistic. If all the planets align, all the approved projects happen with no delays, and we we all know, of course, that that will never happen. It's just it's just not a serious scenario. It's a whatif. I thank you for including that as a whatif. Um because we all want to know what impacts that the developments that we approve will have on the budget in the future. So this gives a gives an idea but like I said it's only if all the planets align certain moment a certain time uh a certain place. Um so I don't give it any credence whatsoever but is a good information point. So, um, with that, thank you very much,

Vice Mayor. I support Council Member Test's motion. Thank you. No comments. You don't have to. No. Thank you.

Okay. Uh, okay. Well, I'll go a little further. Uh, thank you very much for the staff report. Thank you for taking the ID Bailey independent review comments related to clarity of presentation and and trying to get a uniform method so our community can follow the information attachment two which is the 10-year forecast in in pretty good specificity is I think an extremely good uh step forward uh it's very uh well um broken out by item so that I think our community can understand the assumptions of each item and be able to test it. We can argue all day long or agree about what assumptions are, but at least we can now see their impacts and we can see how we will be able to measure them and uh going forward. So, I appreciate that. Um I think all of us are focused on helping pleasant to become revenue resilient uh services stable and address the structural deficit. So, um I don't want to become um uh I want to become very cleareyed on what that means. For me, I'm going to highlight some things we've done. We've already moved to recover credit card processing fees. We've reviewed the general fund subsidy for water and revised our water discount program. We updated the developer impact fees based upon a new study that we did. We updated user fees, sponsorship agreements. The investment portfolio is being actively managed increasing our yield on that entire portfolio. We budgeted to take a million dollars out of our 115 trust fund in the fiscal year 26 and at 6 months in operationally we don't have to do that now because we are uh judiciously using the surplus from prior year to stave that off. All of these things are steps in the right direction. We are not through the woods.

I don't want to assert that we are, but we are taking this seriously and I think staff is obviously doing that well and that is why the TOT was a conversation that we've already had. Um, but I do believe that we need to continue to foster economic vitality, invest in things that will produce revenues for the city. Um, we've already done the streamlining of the permitting. We've already done innovation based business. And I think we need to continue to have a can do attitude to address these challenges ahead of us. So it doesn't mean we enter it in um uh in any sherking of the responsibility upon us but uh we are taking the steps and taking it seriously. So uh with that we have a motion made and seconded. Can we go ahead

to make final comment please? Sure. Council member Ta.

Okay. um in the summary given you didn't include that we've also cut our library um hours significantly including a full day a week and that um um I don't celebrate that we eliminated our senior water discount and that um there are um we're looking at can we continue our um commissions that have been a vital part of this community um for decades. So I I think it's really relevant to look at the um challenges that h exist with um having not passed a half cent sales tax.

Okay, that's it. So, we have a motion made and seconded. Can we go ahead and take a roll call vote, please? Council member Ta I. I Goss. I. Nyber. I. Mayor Balch. I. The motion passes unanimously. Okay, that concludes item number five. Do we need a break before we begin item six or jump into item six? I'm good. Okay, we'll go ahead and proceed to item number six at this time. receive the financial plan analysis for the 2026 sewer rate study and approved implementation scenario one maintain.

Thank you, mayor. Uh we're just going to get everyone situated here. We have our public works director, Such Chinyong, as well as Nancy Fan from uh water resource economics. and uh we'll be walking through uh the next step in our sewer uh overall sewer system management programming and planning and funding uh work. So um just let us get the presentation up and running and I'll turn it over to our public works director. Good evening. Uh, Mayor Balch, council member, city managers, staff, and residents. Um, thank you for joining us today to um uh uh with the presentation on the uh sewer rate financial analysis. Now joining us tonight is Nancy Pam from And we also have Todd Yamelo, our utility planning manager um is attending the today's presentation to answer any question um that we might have uh around the sewer financial plan. The city owns and operates um the sewer collection system. It's about 253 miles of gravity sewer, 4.9 miles of force main, eight siphons, 11 active pump station, and approximately 21,000 service connection. The city doesn't um have our own sewer treatment plant. We have agreement with DSRSD or Dublin San Ramon services district and with city of Liverour for residents in Ruby Hill service area for wastewater treatment. Last month, staff provided an update on our utility system, highlighted all the state regulatory requirement that the city must comply when operating water, sewer, and storm water system. This regulatory requirement are the main um driver for

our financial um plan analysis for sewer rate study. So without further ado, I'll have um Nancy to um present the technical analysis.

Great. Thank you, Such Chin, and good evening, uh, honorable mayor, city council members. Um, I'm just gonna jump straight into it. On today's agenda, we'll be giving a broad overview of the rate study process for the sewer rate study. Um, talking about the financial plan piece for today's presentation. Um we'll dive into a couple of different financial plan scenarios for the sewer enterprise, talk about some te key takeaways, and then finish off with some next steps and schedule. For the rate study overview, this is going to be quite similar to the water rate study in terms of the different steps involved. The first is going to be the financial plan, which is what we're working on today. This is really just to develop the funding plan and figure out how how much rate revenue um needs that the city needs to maintain the financial sufficiency of the sewer enterprise. Uh the next two steps are going to be the cost of service and rate design. That will be happening the next time we meet and then we'll round out the sewer rate study process with rate adoption. So currently today we are on the financial plan which is uh prim primarily focused on the SSMP. So the purpose of a financial plan is to establish a long-term financial strategy for the city's sewer enterprise. And the purpose of it is to do three things. Sewer rate revenues need to be sufficient to fund all of the operating and capital needs. These are going to be unique to each of the scenarios that we're looking at today. uh rate revenues need to be able to maintain financial financial stability of the sewer enterprise as well as meet relevant policy targets such as reserve and debt coverage uh as applicable. The financial plan is to support the implementation of the sewer system management plan or SSMP and the long-term capital improvement

plan or CIP. So today we'll look at three different alternatives for the implementation of the SSMP. The financial plan is going to be primarily driven by the costs of both the SSMP and the long-term CIP. There's three different implementation scenarios that we're going to look at today. Uh named maintain, prioritize, and defer. So the maintain scenario is a balance is the most balanced approach uh in terms of the different policy objectives that we're looking at. Um, it's a balance between the costs as well as minimizing risk and the ability to implement from staff. So, it's, you know, each star represents how good or how well each scenario supports each of these objectives. So, it's two stars across the board. So, it's the most kind of even um moderate approach to all of these different policy objectives while getting the city to a stabilized state over the next five years. Prioritize is um the scenario in which we increase uh or there's more near-term costs, less long-term costs, but there is more uh investment in aging infrastructure and the on&m program to get the city to a more stabilized system within before the 5-year period. But the ability to implement this scenario is uh more difficult. defer the opposite of that. So that is the scenario that we minimize near-term costs but it does increase long-term costs and um there's less investment in aging infrastructure. So there is a higher level of risk uh in relation to aging infrastructure as well as regulatory compliance but the ability to implement by staff is going to be the most doable as well.

So today's, you know, goal is to determine which SSMP scenario is most aligned with the city's policy goals and financial objectives. So the maintain scenario, it allows the city to meet the requirements of the system, stabilize it within that 5-year period that we're looking at. It balances both cost and risk, but it doesn't really fully optimize for either. So it's kind of a more moderate uh middleof the road approach to the three scenarios. and it is also going to be the mid-range of costs in the 5-year O andM and CIP. Prioritize is um the objective is to invest early to minimize long-term risk. So, this gets the city to a more stabilized system before the 5-year period, but it does result in higher near-term rate impacts and also a higher amount of debt financing to fund CIP. the five-year on&m and five-year CIP is going to be the highest for this scenario uh out of the three. Defer is going to limit the near-term costs by postponing projects. So, it eventually does get the city to a stabilized system, but over a longer period of time, past the 5-year uh study window, this has some increased long-term system risks due to delayed or deferred projects. Um and the five-year on&m and CIP is going to be the lowest out of the three options. Um in order to determine kind of the success of the financial plan, we look at a couple of financial performance targets. The first being the operating and capital reserve target, which is 35% of annual operating expenses. This is really for the city's sewer fund to pay for unexpected operating cost increases, emergencies, etc. just money that we have in our reserves to be able to meet

certain costs. Uh the debt coverage requirement is only going to be for new debt. The city's sewer enterprise does not currently have any outstanding debt, but for each of the three SSMP scenarios, we are looking at debt issuance. So that is a requirement of 125% of annual debt service. This is to avoid technical default and maintain a debt rating to issue debt in the future. So before we get into those three solved financial plan scenarios uh that relate to each of the SSMP alternatives, we are going to look at the status quo or a control scenario. So this scenario assumes that there's going to be no adjustments to the current sewer collection rates that the city charges its customers. It assumes no new debt to fund CIP. Uh we are keeping the same underlying ON&M and CIP needs to match the maintain scenario just without any adjustments to rates or any new debt. So the purpose of this control scenario is to show the long-term financial impacts of maintaining current rates at the level that they are at to see what happens if we don't raise rates. In the next couple slides, I'm going over all of the different uh graphs that we look at to evaluate the financial plan and the impacts of it. The first is the revenue requirement. The different bars in the different colors represent the expenses to the city sewer enterprise. The line represents the revenues and the red dot shows an operating deficit. Uh in the status quo scenario, there is an operating deficit in all five years. This means that the revenues are not currently sufficient to fund operating revenues, not sufficient to fund CIP and also does not allow the city to have any debt capacity to issue

new debt in the future. For the second graph, this is the fund balance chart. So the green bars are the total combined reserves for the sewer enterprise. Um that is for uh operating and replacement CIP. Um the dash line is the reserve target uh that we talked about previously at that 35% of on andm. So um without any adjustments to rate revenues or debt ser issuing new debt to fund CIP um the fund balances will go pretty much to zero by fiscal year 2027 and go negative by fiscal year 2028. Uh this graph is blank but um this is debt coverage since the city doesn't have any existing debt currently. Uh we don't have any calculated debt coverage. If there were in the other scenarios which we'll look at the blue line will be calculated debt coverage and then that dash line is the 125% requirement um to uh issue new debt. And finally uh this is the capital project funding uh graph. This status quo scenario assumes uh they maintain costs for capital projects. Um and since we're not issuing any new debt in this all of them all of the project costs will be rate funded CIP. If there were to be debt funded CIP those would show up as blue. Uh so we'll see that in a couple of slides for the other three scenarios. So whoops. So combining that all together into one graph with no revenue increases over the four years, no new debt proceeds to fund CIP, the status quo scenario which assumes that we keep everything as is um and pay for all of the expenses related to the maintain

scenario. We don't meet financial performance targets. fund balance goes to zero. Um, so that means that the city needs to increase its sewer collection rate revenues to avoid those operating deficits that we're currently in, maintain adequate reserve balances to meet that reserve policy target, and then fund CIP for each SSMP alternative. So, there's a couple of levers that we use to solve the financial plan for each of the three alternatives that we're going to be looking at. The first is revenue adjustments. So, how much we increase sewer collection rate revenues each year. And the second is issuing new debt to fund CIP, which reduces the amount of um rate funded or cash funded CIP that the sewer enterprise needs to pay for. All three of the scenarios that we're looking at in the next couple of slides will solve for uh the same or the same method of uh evaluating financial performance targets. So, we're going to meet the reserve policy targets at the end of fiscal year 2030 and maintain debt coverage for all years that are applicable. For the maintain scenario, we are uh to be able to pay for the SSMP and CIP related to the scenario. The revenue increase over four years is $27.4 million. And the city will also have to issue $28 million of debt in the latter three years uh of the financial plan in order to solve for this scenario and pay for its costs. Okay. For the prioritized scenario, uh similarly, we're going to meet reserves in fiscal year 2030, meet debt coverage. Uh the revenue increase over four years is $38 million and the debt proceeds required to fund the latter three years of CIP is $37

million. For the defer scenario, this is going to be the lowest in terms of revenue increases and debt proceeds at $25 million over four years of revenue increases and debt proceeds of $24 million in those latter three years in order to meet those two financial performance targets. This is a summary of all of the uh rate revenue increases, new debt issuances, CIP costs, and on andm costs excluding treatment related costs to DSRSD and Livermore um in order to meet each of these three scenarios. So again, the objective of the maintain scenario is to meet the system requirements, stabilize the system condition over the five-year period, minimize the amount of infrastructure and compliance risk uh while still kind of moderating or keeping a moderate uh rate burden or cost burden to customers. Prioritize is investing early and front-loading those costs in order to minimize long-term risks. stabilizes the system over uh you know a shorter period of time than the five years that we're looking at um but also is the highest cost burden to customers. Defer uh minimizes the cost burden to customers in the near term but it does defer some projects. So the system is stabilized over a longer period of time past the 5 years that we're looking at um and increases the amount of risk that the city has to take on uh for aging infrastructure and compliance. So the key takeaways here is that the status quo or our do nothing scenario without um raising um increasing rate revenues is not financially sustainable in order to implement the SSMP. All of the three implementation scenarios that we looked at meet those financial policies, but higher investment levels like the prioritize uh implementation

scenario, it requires higher rate revenues and higher amounts of debt issuances. There's a trade-off between the near-term costs and long-term risks related to aging infrastructure and compliance. Um but the financial plan supports the informed selection of an SSMP implementation alternative. So the three alternatives that we have maintain, prioritize, prioritize, defer. Staff's recommendation is maintain since that's kind of the most balanced approach between minimizing cost burden to customers while uh stabilizing the system over the study period and um not increasing the level of risk that the city is looking for for compliance. Okay. And then finally, next steps in schedule. Uh after the financial plan analysis, which we talked about today, we'll begin the cost of service analysis, rate development, and connection fee calculation. The next council meeting will be um for sewer rates and connection fees. So that's where we'll kind of quantify uh both pieces both the financial plan costs as well as any changes to the rate structure and show the final rate impacts for each of the or for the scenario that's selected. The third council meeting after that is receiving the sewer rate study report and approving the proposition 218 notice. There's a public review period after that and then we'll have a public hearing to adopt sewer rates. So, if these rates are approved, they go into effect sometime in 2027. So, that's the end of my presentation. Um, I'm happy to answer any questions and turn back to any of the slides if we need to.

Okay. Thank you very much. We're going to go this way on this item. So, uh, Council Member Nyberg, clarifying questions at this time, please.

Okay. Thank you. Yeah, thank you for the presentation. I appreciate it. Um I wanted to ask with regard to the um prioritize scenario. It was stated that the ability to implement um was very difficult. I can I I can see why it would be more difficult but can you explain to me specifically why it would be difficult to implement that scenario as opposed to the other two? Um uh thank you for the question. For the priority approach is basically we have to implement a lot of the projects in the near term. Um the need is there but we have to balance between the competing uh priorities um the resources that we have um uh to to not just deliver projects but also on the regular O andM and RNR that is needed to meet to continue to maintain and meet compliance for the state regulatory requirement. So on the prioritize um scenario while while it is uh very much desirable to to to do that to to get everything done at the same time but we have to balance between um different priorities competing priorities and resources availability. I may just I may just add um you know the council's been really supportive of a really wide ranging and expansive CIP program and um you know we're similar to the water program. We're trying to to meet out the the work program so that we're able to deliver in a in an effective way. Uh there's a reality to balancing community disruption as well as just the the sort of the staffing needs. And I know um our public works director and her team are sensitive to getting the work done in a way that makes sure that we stay in compliance across the board uh balances staff resources and also community impacts.

Right. Yeah. Uh I see that all all very important reasons. um in answer to my question. Um yeah and and I I can also see um you know potential chaos involved at in having to execute on all these projects among our staff if they had this you know mountain of projects all at once to be completed within five years. The logistics alone would boggle the mind. The workload for each project manager or engineer would be really significant. Um so on uh the topic of debt, I know with our water system management plan whenever um increased revenues were um um implemented with the water rate increases, how did that benefit and I'm asking as an analogy to what we're looking at here. How did that benefit the city um in in taking on that debt? And would that would that be analogous to what we're looking at here? Yeah, those would be some of the similar principles. Issuing debt to fund CIP is spreading costs across a longer time horizon instead of paying them all at once. These CIP projects are long-term projects that, you know, benefit the community over a long period of time. And so we are spreading those costs across um using debt to fund CIP in those latter three years for each of the three alternatives. Okay. And to enable the city to efficiently access the markets when going out for debt, um, we'd want to maintain our preferred credit rating. Uh, so I imagine the rating we have now is what you cons you assumed or considered when doing the analysis. Perhaps you can correct me if

I'm wrong or if even if that entered in, but yeah, go ahead. So um the primary primary consideration for debt issuances on the sewer side is that operating deficit that we talked about uh in one of the previous slides. Um if there is an operating deficit, revenues are not sufficient to fund just operating expenses. So there is no ability to meet any sort of debt coverage requirement because um you know if if there's a negative then we can't pay for debt service in that year we can't meet that 125%. So regardless of credit rating if we have an operating deficit there just isn't capacity to go ahead and do so uh which is why those debt issuances are modeled in the latter three years of the program.

So the debt issuance would be you know, pretty much um you know, defined by the sewer management plan or program itself. What we've done in regard to the water management plan really doesn't have a whole lot of bearing on our credit um you know, our meeting the credit requirements for the sewer management plan. Am I getting that correct? Um I believe that would be a question for the city's finance team.

Yeah. So, so our our we would be working with the same finance professionals who helped us to secure the the um both our credit rating as well as the the debt that we have assumed for our water program. Uh I wouldn't say that they're completely separate because the the steps that we've taken with water are very similar to the steps we're taking with sewer. We just don't have a a lot of borrowing history on our sewer enterprise and so we'd be like we did with water establishing uh a new relationship there relative to the sewer enterprise fund and borrowing. Okay. Um All right. I have no other clarifying questions. Thank you. Okay. Vice Mayor.

Thank you. When when this came to us before, did we was there staff recommendation to go with the maintain option then as well if I recall correctly? Yes. Back in November, we bring the the presentation on the CIP. And so now you've done the the deep dive on the finances and that's what what this is before us tonight. That's right. As your recommendation, obviously, it's not changed because the recommendation is still the the maintain option. Correct. Okay. All right. That's all the questions I had. Thank you.

Okay. Council member Tessa. Um, I I I think I just have one question and um I and I know the answer, but I'm still going to ask because I think it's kind of the obvious question. It to why we we don't have any estimates of what those increased rates will be.

Uh not yet. So the financial plan determines what SSMP scenario we want to move forward with uh the funding plan but in terms of the rate impact we don't know that until the next stage of the process for cost of service and rates. So that'll be coming next time. Right. Okay. So I did know that but I still feel that to it's hard to really assess the different um plans when we don't really know what the burden to the the rate payers will be. So uh we we used a very similar approach with uh with the water system management plan and I know that there was a a certain amount of inquisition interest from the council in understanding the the the rate impacts for water as well. I you know unfortunately or or fortunately we're in a regulatory environment and we we do have to make sure that we have sufficient funds to take care of the sewer collection system and so the rate impacts um you know the the only way that it would be cheaper in these three scenarios is with defer and it does open us up to significantly more risk. The other piece that we talked about the last time we were in in sort of a similar set of circumstances, but on the water side is the reality of developing a rate program is pretty expensive and extensive uh in terms of just the amount of time is involved in in developing uh rates that support one of these scenarios. And so um it does help to know where you want to go and then to address the rates. And there's always a way to uh to sort of move the rates up and down slightly in these scenarios when we get to that point. But um I understand the question and I understand the interest in what the rates will be. There's just a series of reasons why doing it the way that we're doing it uh helps us to stay focused on what we're trying to achieve with the

program and then developing a way to work you working with the council and the community on the rates to get there ultimately. Okay. I know it's not Yeah, I know you want the rates. Um, and they're coming, but there's a there's a method to the madness. Okay. I just I guess it feels like an insensitivity to our rate payers to just say, "Oh, we want to do this without the sensitivity of um how it's going to impact our rateayers."

Yeah. And and I I understand that. I know we've been talking a lot about uh finances and rates and utility costs over the last couple of years. Um but we really we we are uh creating and and buffering the city from significant risk. I can't I don't know if you'll all recall Paul Kazzy uh sitting here and talking with us about the regulatory environment around our sewer system management plan and frankly the the amount of liability and risk that we're we're we're managing against to make sure that we keep the city in good standing with state regulators and make sure that we're meeting the community's expectations around the environmental and uh sort of quality of life issues that um uh that that are expected. So, um, it's not an insensitivity. It's a it's it's it's a reality of operating an enterprise fund and needing the resources to be able to do that to to deliver what everyone expects when they flush their toilet.

And thank you all for the job that you're doing for us. We do understand that. But we just raised water rates. We I brought it up then that that was only the beginning that we were looking at the sewer rate increase. It does still feel like an insensitivity but a necessity and thank thank you. I I mean yeah it's important and um that's that's all I've got. Okay. Council member Ier clarifying questions.

Uh yes. Um, one's kind of an off question. Um, how do we come up with the 35% reserve for this fund as opposed to the general funds being under 20%. So 35 seems awfully high compared to that.

I'll start. We we use the the government finance officials, the GFOA uh recommended uh reserve targets. Uh and what you'll find is that the dollar amounts that we're talking about in the enterprise funds are a lot less than our general fund. And so you you need to sort of bump up the percentage to get adequate uh emergency dollars. Uh if you think about um our danker drive issue a couple weeks back, um you know, that was a a million dollar $800,000 I'm looking at such

$650,000 problem. And that's just one stretch of pipe uh that failed uh in in one area of town. So what we're trying to get to is 35% which is about $8 and a half million dollars. Um so it's a best practice government uh finance standard and as well as just a reality for the the size of the system that we're operating and having emergency dollars. You know, if a pump fails or something like that for us, we need to be able to replace it. Okay. But we do have the opportunity to adjust that down the road if we if we think that that's getting to be too high.

Yeah, we I mean we're continuing to put forward best practice recommendations for the council and obviously you're the policy makers. If you decide that those dollars should be used differently or we shouldn't be setting aside quite as much, uh that would be ultimately be up to the council. Okay. Uh when was the last time we we re-evalu and I think we discussed this at our last meeting but when's the last time we re-evaluated sewer rates and adjusted them?

Um we have always been asking for CPI increase. I think this is the first time we are asking for a sewer rate study um complete sewer rate study and asking for a sewer rate increase based on a sewer rate study. You've been using CPI over the years to to adjust it to adjust. Correct.

Okay. So, there have been regular adjustments that just hasn't met up with what the demand is. Um, so is it possible for the council to authorize direction for the rate study without committing to specifying a specific plan at this time, but saying like let's do a rate study for this status quo scenario or or the maintain scenario and then we agree on the final at when we do the rates setting. aspect as opposed to committing to this now and then having questions about the rate study down the road.

I mean, I I'll defer to our consultant here in a minute, but um I I would I would say uh it is difficult to pro to suggest that rates could be low, right? Uh let's say that we know that the defer option is going to cost less than prioritize and then to have to bring that into a public meeting. Uh so that's that's part one. It's just challenging for you all. It's challenging for staff to uh to um you know to advocate for uh for higher rates. Um that's why we do it the way that we do it. We want to know where the council wants to go from a policy perspective around the the different scenarios. How do how do you want us to achieve stability for the the program and then build to that? So that's that's sort of the the big stepback answer. The really specific answer is it's really complicated to build rates around these these scenarios and so we want to do our best work on one scenario rather than you know tripling the work.

And I understand that but you know I could equate that to I want all the bells and whistles in my car when I buy it and I'm not concerned about the cost till I go in and and start working with the with the dealer versus I can afford this much. So, how do I how do I get to that dollar point and what can I live without?

Yeah. And I feel like we're being we're being asked to commit to something that we don't know what the fiscal impact's going to be to our community. And we'd like to assess those two things handinand when we're making those decisions because maybe there are ways to say maybe we need to adjust this a little bit, you know, or refine it a little bit more to get to the sweet spot. Uh versus this is to me this feels like a blind committ which is why I was asking the question.

Yeah. Uh it's up to the council. If you'd like us to pro provide you with rate information for all three scenarios, we can certainly do that uh and bring it into a public meeting and have a discussion about what we're getting and not getting for the the rates. What I would say is that the sewer program is different than the water program in that it is not the same dollar amount on people's bimonthly utility bill. Uh the percentages that we're talking about may be significant, but in real dollars, uh it will be very different than where we are with water. Uh and so there's sort of a costbenefit analysis there as well. Uh all dollars are important dollars. Uh rate impacts on our community are a serious thing. Um but really what we're talking about here today is a system that hasn't seen the kind of investment that it's needed over the years. Uh and it's older and so it may not have needed that investment on the front end, but we don't have a big reserve set aside now to start to take care of those things. Uh so we have been um doing yman's work around inspecting the system and creating this sewer management plan. Um I don't I don't know that any one of these scenarios is a bad scenario. We wouldn't have brought it to you in that regard. It's really about where the council wants to get uh during this next rate cycle. A

and I don't I certainly don't doubt the need. I I truly believe the need is there and it's how do we get there? Um, I was just looking for the question to see if there's a way we can tie these closer together to to make that decision making much more comfortable.

I'm gonna look to our public works and our our water resource consult uh uh economics consultant here to uh help us uh see if we can find a a sweet spot. Um before that I I I would like to add that the difference between the water um program and the sewer program is the sewer program is driven a lot of the program is driven by um the regulatory requirement. There's the state has a list of regulatory compliance that we must meet um that I presented last last month um like the FA program, the CCTV, the uh uh sewer inspection program, siphon inspection program, force main program, inspection program, manhole inspection program. Those are all the program that is require and regulated by the state that require us in order to operate the sewer system. we must keep oursel in compliance. So a lot of the CIP program, the RNR and O andM program in the sewer is is um driven by the regulatory requirement. The three three scenarios that we have here is really analyzing between the cost, the risk and the resources, the the pros and cons, the benefits of having each scenario. And that's why staff is is recommending the best scenario to keep the city in um good operation and in good compliance with the state um but not um too costly and taking too much resources at one time is the maintain scenario. Um, so I just want to add that it's it's I agree with uh city manager. It's really up to council on uh what analysis and which scenario analysis that you want to us to perform. Um, but just just want to bring it up that it's it's a little bit different than the water that sewer is

driven a lot by the state regulatory requirement. Council member, if I if I may as well the uh and staff to clarify the sewer rate and I have my water bill with me that I carry around is 29.96 fixed. This was 25 I guess I've got oh 25 to June 26 bill. So it's a fixed charge 30 bucks approximately compared to the variable water number that we were the city manager talked about. Okay. Sorry to I'm done. That was that was my last question and I figured it would be a challenging one. So, um we'll leave that till we come around for comments.

Okay. Uh I just have a couple of questions. Again, mine were in the supplemental. So, I appreciate that. One of them that I'd like staff to clarify if I may, which is on page 109 of 144 of our staff report. It just talks about the current rate structure and it talks about a 2.7 CPI effective January 126, but then a 3% effective July 126. So, typically you don't see annual CPIs. Uh, usually a percentage is an annual rate, not a six-month rate. Can staff just clarify how that works? There was a second it's compounding. Is that how that worked? Do you know off hand? Yes, the two the 2.7 and the 3% are compounding over that six-month period.

Okay, so that's a pretty notable compounded within the two two increases in one year. Okay, so that was the first question. The second is I look at this is really uh uh my question is principally between maintain and defer. The slide we have up works. It's not uh terribly different in the dollar amounts frankly. If I look side by side uh which is prioritize is obviously much much different. My question is this uh we have had a challenge uh by a variety of factors and no specific blame on anyone to deliver CIP projects more in the general fund CIP area than enterprise fund. I am worried that we will find a challenge if we chose the maintain uh to even deliver these in light of inflationary costs, staffing resources, ability to to to uh mobilize all of that. And we will slide to a defer not by choice but by uh the realities of what we're actually able to produce. if if you know where I'm trying to go with. Is that a risk that we have in any of these scenarios? And when we compound sewer with storm drain that we are, you know, a little behind us on and water that's we're ahead on, we have a lot of enterprise CIP. So I I just want to know if we're um asking our community to come up with a rate increase and we're not going to be able to deliver the CIP associated with it. Does that make sense? It's a large question there.

Yes, totally. So resources is definitely a a big factor when we are doing the financial plan analysis and we are planning for the program. um on both water and sewer we put in uh factor in the resources that need to deliver each of the scenarios. So for each of the scenario there will be a need of increasing in resources depends on how fast and what are we delivering and by when so the program has already factor in the resources is already programmed into the resources into delivering each of this scenario. uh will there be um uh risk that that project will slide? Um for example, if we have a several more un uh foreseen uh projects like Danker Road, that's definitely added added re uh added load into the the program that we didn't plan for. Definitely there is a risk but for now for what we can uh foresee and what we um have um in our source CIP that is approved in November we have program in each of the scenario the necessary resources in order to meet u target.

Yeah I I uh I appreciate that answer. Let me go a little bit differently make sure I um uh can still get there comfortably. We have competing CIP areas, right? General fund, uh, water and sewer, right? So, even though each one individually has looked at, uh, mobilization and and the resources it needs, it still comes down to one city management, one city government at the end, even if we use a vendor to do the work or do it in house, right? Are we able to uh, deliver these? I guess and

and maybe I say it more in the concept of maybe we're we need to stage them prudently but if we are staging them then we're going to stage when we take the debt so we're not taking on debt that we're not going to be deploying. Correct. I mean I I just want to make sure we're being very prudent because there is a limit to our bandwidth.

So I'm going to start and then um and then our public works director maybe we'll will take over. um we're we're shifting our model and I would say that we're we're we've evolved our our thinking and our approach to delivering capital uh in the LA and we're it's in the works. Um it is a it is a change for the city of Pleasanton and delivering um you know the the CIP we used to just roll things forward when they weren't completed and that was acceptable for the council and for the community and frankly for the needs that we were trying to address. Um but um in no small part uh the part of the the reason that that our public works director uh is here with us is because she's delivered half a billion dollar capital programs uh for much larger agencies. It is it is not impossible. Uh it is actually quite possible. We just we have to do things differently. And so we're uh we're reshaping our team. We're reshaping our work our work planning and our programming uh to be able to deliver and meet the needs of an aging community with aging infrastructure and facilities. Uh and so um you know it is is not going to happen overnight. It's not going to be completely smooth in terms of how all this happens. But it is happening and it has to happen because um when you look at our asset management plan and the $63 million a year of needs, even if we have half of that, we have to do things very differently than we used to. So um that's what we're building toward and that's what we know we need to deliver. And that's why um in our in in uh Such Chin's prior answer uh talking about building the resources into the the financial capacity into these rates to be able to staff these projects is something that we hadn't done or hadn't done as extensively in the past. So, you're going to start to see us be able to bring on teams, ramp

up for certain uh for certain kinds of projects, and then scale back down because we're using um not just all in-house staff, but some some outside folks as well. So, I hope that gives the council and maybe the community some better understanding of the evolution that we're going through uh right now uh and and the work that we're doing to make sure that the commitments that we're making in these planning exercises come to fruition in the community. And it's not it's not going to be perfect. We're not going to hit it out of the park on every um uh on every front right out the gate, but we will get there and bring that stability to the program. And I don't know if Such Chin would add to that, but that's that's where we are.

Yeah, I would I would add to that that this is u Jerry um hit it right there um home about what are the things that we are doing. We are definitely making a lot of changes um in capital improvement program on the delivery on um setting expectation reachable expectation and meeting them. Um, one of the things, um, the council might remember, um, back in December or January that the council approved the contract award to, um, hire a utility program manager and the utility program manager key function is to help and make sure that the city uh, will deliver the CIP project as we had committed oursel with the water rate and it's the same is going to be with the sewer once we have the approval um to deliver the program that we deliver. Our goal is to meet that delivery schedule and and the target that we have committed to.

Okay, I appreciate that answer fully. I am worried about the inflationary costs when we delay uh being able to deliver and the repair and rem maintenance uh costs increasing in the meantime. Okay. All right. Well, thank you very much. Uh that concludes questions. Any further questions before we go to public comment by any of my fellow council members? Seeing none. Okay. If you would like to speak on item number six, please fill out blue speaker card and approach the podium at this time. Hearing none, seeing none, we'll close public comment and bring it back to the council. Staff is asking us to uh direct them on a particular plan so that they can then move to the next phase. Again, their recommendation is the maintain plan. Council member Nyber, same order. Comments and or a motion, please.

Yeah, thank you. Um, is your mic on? It's on. Yeah, thank you.

The um defer scenario is uh to me at least obviously much too risky for us to consider. The um we're already, you know, sinking under the burden of deferred maintenance um and so many other aspects of uh the city's assets. um and directing staff to adopt that as a preferred approach to our sewer system to me is not tenable. Um the prioritize uh scenario also we discussed um not tenable because of the um constraints on you know other commitments and the high level of uh of implementation costs and um you know um you know confusion chaos that that might engender uh you know doesn't doesn't make that option tenable. So I think the um maintaining the staff recommendation is the choice we need to take and uh therefore I will move that the council adopt that implementation implementation alternative um as staff recommends.

Okay. Thank you vice mayor.

Thank you. Um I'm I'm mindful that we in November we um approved I think a long-term program for for the SURCIP. Um you know I after the comments and questions and answer I you know I wonder a little bit about why exactly I guess this was done as at a ad hoc basis for the entire history of the city of Pleasanton. and we would simply respond when something went wrong rather than recognize that we have an aging infrastructure and um move forward with a comprehensive program. Um for me, you know, I I I understand I can't say I'm an expert on how our sewer system works and every single piece of it, but I recognize the importance of keeping it um proactively maintained uh for long-term stability. Um, you know, it's hard to recognize that, put the number on it in the millions, and then understand how it affects rateayers. And it, you know, maybe it would be better for me if this was all uh done with a little more information on what exactly um how exactly this gets spent in the future, what necessitates this this type of money. um whether it's repair or replace or you know completely you know digging up a neighborhood and replacing a sewer line. I I I guess I have questions about exactly how the funding is going to be dispersed over time. Um but I I recognize that there needs to be a plan in place. Um so I'll defer to my other council members and and consider a further response. So thank you.

Okay. Going this way. Council member Ta, I'll second the motion. Okay. Any comments? Nope. Okay. Council member Aker,

I struggle with it. I'd like to see the cost associated with it before authorizing it. Um, I don't know if uh uh Council Member Nybert would accept a friendly amendment to to give direction to staff to proceed with the financial plan maintained scenario in our rate setting, but have this come back for the final approval so that we don't march forward with this commitment without actually seeing how it's going to impact our rate payers.

Could we apologize? could uh I think that is going to be Can you go to the next slide staff if I may? I think that is exactly where we're going. I think what they're trying to do is know which scenario to build the rate model on. Is that a correct interpretation staff? Yes. Okay. So, do you want them to possibly uh build two rate models? I think there just the single rate model of the maintain scenario is fine. Okay, we will certainly be back to the council before we u move forward with you know any public discussion the prop 218 process all of that has to come through this body

well I don't want to commit to the we are going to do the maintain without really seeing what what the overunder on it is going to be but we need to do the work to get to that point so and maybe if I can recommend council member Iiker maybe the uh um not in the motion, but maybe the conversation to staff is to try to allow headroom between two and three so that if we did want to adjust, there would be still ample time to be able to do that. I think that would be a good recommendation. Okay. Is that possible, staff, that we Yes. try to Okay. Okay. Okay. So, sorry, I didn't mean to cut you off trying to just

then I can go along with the uh I'll support the motion. Okay. Vice Mayor, anything further on based on the conversation? No, maybe I could ask a question. How how difficult is it given the the money to be spent in the different scenarios between the three scenarios to to build the rate increases? I mean, how much extra work would it be to get a a number on the rate increases for each of the three scenarios that you're putting forward? Is it is it an hour work, a half an hour, an extra day, you know, a another $50,000? Just ballpark it for me.

So, um, we can, you know, depending on what the council says, we can definitely develop rates for all three models, but or all three scenarios. Um, but each of those sets of rates will have to go through, you know, a re a review process internally with staff and make sure that everything looks appropriate. So I think um you know there's some level of extra work. I think until we start digging into the changes to the sewer rate structure I won't know for sure yet in terms of number of hours. Um, but there definitely can be, you know, some iterations of the rates or the sewer rates based on the council's feedback from when we look at the maintain scenario or some other scenario that we want to.

I'm going to I'm going to take the reins a minute says the consultant who is paid hourly. So, I understand.

Let's let me let me maybe suggest a different way, vice mayor, if I may. Uh my suggestion is that we uh I think I heard from council member Nyber defer would be very difficult for him in light of the conversation he said uh preferred or or excuse me the um accelerated uh would be difficult to staff to execute they've said so if I may suggest we proceed with maintain but know that maybe staff only build it out a certain level or to a certain point or allow enough room that If council wanted to change it, there's room before we have to go through the 118 process. Step three is or meeting three here. That's where I was trying to uh give us that ability.

Sure. I mean, I'm I'm just looking at the the summary on table five where it says maintain is 27.4 million, prioritize is 38, and defer is 25. I mean, is it as simple as just doing a percentage of what you're going to be suggesting is I mean, can I do the math myself by adjusting those percentages or is it more complicated than that?

Uh, there's some more complicated pieces to the rate calculation. So, there are impacts depending on how we want to move forward with the sewer rate structure itself as well. Um, so anytime we do a cost of service analysis, there are, you know, everything kind of shifts. It's a zero- sum game. So, it's not just applying a straight percentage um and figuring out the rates that way. Um but more so kind of a more elaborate process of allocating all of these costs, applying them to the different customer classes, and then figuring out how to um tie in the financial plan scenarios with that. So, while it is possible, um, it does take some additional work, we it's really up to the council and I think I will defer to the council to give us direction on that.

I don't know if it usually it would be great to call a recess and have a little bit of a conversation here about um whether or not there's any merit in coming back with the rate structure uh for the council to see a couple of different options relative to how uh the rate the rate structure is finalized. I'm looking at Nancy. I don't know if that would create the kind of conversation that the council wants to have around how rates ultimately look and get set. U but maybe there's a workshop or something that we could do in in that vein. Yeah. Like a council meeting 2.5. Yeah. Yeah. That that's absolutely possible. And

so maybe uh you know I think there's the the mot we can work with the motion here this evening. What I'm hearing is there's interest in uh in sort of understanding and seeing those rates get developed in some at some level. And if that's what you're ultimately trying to get at then I think there there might be a way for us to check in on how the assumptions the the the rate structure options uh being shared publicly. Sure. I guess I'm just trying to understand how it's not just take the 20 if it's just the city the additional money is 27.4 million in additional city rate revenues. How you don't just divide that by five years and then divide that by the number of people that are paying into it generally. I mean I know it's a little more nuanced than that but if it's not just a straight percentage that if 27.4 is represents 100% then 38.0 zero would represent you know essentially what does that turn out to be about 30% more of that number and does it not pass through that easily I mean

uh it it can I think depending on how we want to set up I just want to know how complicated it is before I ask you to do it uh for a variety of reasons that's okay I'll I'll I think we can take the I'm supportive of the motion to take um the breakdown of the maintain. Okay. And what about the 2.5 uh step workshop? Do we want to do that or not? I'm I'm happy to. Yeah, I'm happy to.

Uh judging or asking my fellow council members, I'd be happy to. I mean, it it's okay with me. I would just um you know, comment that, you know, we're considering the entire health of the overall sewer system and program. Uh so it's not simply a question of rates. I mean, rates can be set at, say, if you wanted to adopt the defer scenario, you'd have rates, but then you'd have lots of other emergency expenses later on down the road and you'd have a lot more expenses that aren't even considering the time frame that we're looking at here that would continue on beyond that would have to be met as well. Um so um I look at it look at it from an overall health perspective and not simply uh you know compare one number to another number because ultimately it comes down to city expenditures um as well as rates and uh so the overall health of the program is what concerns me the most.

Okay. Uh well uh staff let me ask a clarifying question. With the motion on the table you're able to add 2.5 without us dictating in the motion correct? Okay. So staff is confirming. Yes. Okay. I'll just conclude that uh I don't disagree uh council member Nybert at all. However, you know, and I definitely want my sewer to go down the pipe when I flush the toilet. No doubt. But I uh I think we all are aware that the costs for our community on various services we provide are continuing to be increasing and uh affordability is a major major challenge. So I think that's uh in the vein of all of us wanting to just try to see if we can uh try to find a balance there. So

can I just ask a question if I may? Uh so I think what uh yes give me a second please. Uh so I think where we're at is there's a motion on the table in a second but there's additional commentary to have 2.5 added so that there's a workshop on how the rate structure is so that council can be aware in case it wants to alter it further. Okay. Yes. Council member,

I just am questioning whether I I mean I absolutely agree that understanding how our rate payers will be burdened is important, but is the meeting that we're talking about going to add cost when we're trying to save cost and is it really necessary if that's the case? But um

yeah, staff staff can answer. I don't know that question. I would I would say this again all three scenarios they are tied heavily to the state regulatory requirement and each of the scenario tie with the risk. The defer maintenance has the highest risk. um that scenario has has the most probability of of dealing with emergencies because we defer the the work that we need to do that on the sewer system. Um the maintain is the second in the middle. Um as far as riskwise the prioritize is the lowest risk. So will we incur more cost than than less cost? it on each of the scenario it comes with different risk. I think it's how comfortable are we with the risk

and I I think the question I appreciate the synopsis and I think the question really is about how much it would cost in terms of getting together and and doing this extra step in terms of a 2.5 meeting. Um and you know it's going to be a negligible cost in the grand scheme of what we're the the exercise that we're going through right now. Um there there will be staff time involved and you know coming and presenting in the time here with um with Nancy or Sanjay. Um so I would I would say if the council wants to do that step then we're we're in a position to be able to deliver that within the the contract amount or very close to what we have already contracted for with

Okay. I'll defer to what others want. Okay. In light of that, does anyone want to change where we're saying to indicate? So 2.5 is I think where we're still looking like there's a majority going for it. Okay. So I think that's still what the council's asking is a 2.5 step in the middle there. Um u maybe it's a it's not part of the not part of the motion. The motion is to go with the maintain scenario and we have a first and a second. Any further conversation before we take the roll call vote?

Uh just one. I I think by understanding the dollar impact on the front end of it um or the impact to our rate payers, it might give some room to to add a little bit to the maintain also. So it's not always about hey it's going to be less. It might be are there advantages on on doing something between prioritize and maintain. So, but understanding what the true impacts are to the rateayers helps us make a better decision as we move forward and get better suggestions from staff on how to fill the gap or or to make this work best for our community. So, I'm trying to look at the the whole picture, not just this little sliver. So,

okay, well said. Uh, roll call vote, please. Council member Nybert, I. Ta I. Aker Hi, Gatos. Hi, Mayor Boltz. Hi. The motion passes unanimously. Thank you very much. Okay, I got to find my agenda which I've buried. Okay. Uh, that completes item number six. We're going to go to now the rest of the agenda. Matters initiated by council. Are there any matters initiated by my fellow council members at this time?

Yes. Um, let's see. We had a speaker who asked us to agendaize a discussion regarding um ICE's impact on our community and how the um how the county was able to do what they did is I would like to know if there's um support to have agendaize that item. I would support that. Okay. I'm going to ask a different way. Uh, city manager, we have a safety meeting that we typically do once or twice a year for our police and I'm trying to add fire to it. When are we anticipating to have that meeting?

Uh, it's planned for April. So, I I know the timing is not perfect, Council Member Ta, but I think it's got to be in context of the overall safety of our community. So, could you wait until April?

Um, obviously the the anxiety is rather immediate and people have a lot of concern. Um, Council Member Nyberg, would you feel comfortable waiting until April or do you think that that isn't responding to the community? I think the uh there needs to be a more um you know earlier response to the community. So I would not be comfortable waiting all the way till April.

There's only three meetings between now and then. Just so you guys know, there's two in in March. Uh excuse me. Yeah. March and one in April. There's only one meeting in April. So we're talking three meetings versus two. You're not going to have a staff report in time because you already missed the first March meeting. And we have a workshop already on the 17th of March. Let let me maybe help. I I would just yield to the exigencies that that you're discussing. Yeah. Noities and realities.

No, no, no. Let me let me maybe help this. I think a conversation about overall safety of our community is something I can support. So, I'll say that. But I also I've already been in chat with the city manager about when are we going to have our police, fire, public safety conversation. Uh April, it is. So, uh I would support that. I guess I'll say

we we just have um the it's an interesting public policy question. Um it's not all going to come down to um to our police department if the council chooses to engage in this. Um, you know, our our police chief and the the the statements that have been put out have been pretty clear on what the police response is and how the police in integrates and interacts with uh with federal with federal officials who are conducting immigration enforcement. And so um yeah it's it it is it is something that is definitely there's a police angle and I think a lot of people who've come to the podium have asked for police discussion but there are other policy implications that we would have to bring to that conversation.

Okay. I don't know where that was going. Is that saying we should keep it with the the Well, I think there's public safety components. Uh I think there's public safety components to it, but I also think there's broader public policy questions and conversation that we would need to bring to that kind of a a discussion. And I just want to make sure that our our public safety update focuses on the police department and the work that we're doing there. Uh and then anything that we do outside of that or beyond uh or maybe that has that touches the police department but isn't directly responsible uh directly the responsibility of the department. We have we have room for that conversation as well.

Okay. Well, I'm hearing because I really would have deferred to that, but I'm hearing that maybe it should be a standalone conversation. I think it would just have to be if it if it happens that night, we would want to make sure that we had more than just uh our police chief standing at the podium trying to have that conversation and present that topic.

So, can we then make this the second March meeting? I I would I would just you know the the way that we've agreed on matters initiate uh items is that the council brings it up votes to support it we come back with uh a response to the council. We can be more nimble. We could certainly come back sooner but the reality of our agendas over the next few weeks and months is that they're this may have to be a standalone topic for us to do anything sooner than April. Okay. I'm getting mixed messages. If you think it's okay to to incorporate it with the April meeting, I'm fine with that. He is not. That is what he's indicating.

I I think if it if it comes with the April meeting, you're going to you're we're we're going to end up with two agenda items. Okay. And it they're they're related, but they don't directly overlap. Then can we say that we want to have this discussion and let staff work when it's going to be? I need to think about that. I don't I'm not going to be able to support that right this second. Okay. So, do you

I think we need to put Well, I don't want to put words in anyone's mouth, but I want to know exactly what we're agendaizing to talk about the the proposal from Council Member Tesa is to I believe what you said was how the county was able to do what it did. I don't want to agendaize a meeting to talk about what how the county was able to do what it did. I watched that entire meeting, read the packet, watched all the public speakers, read what this the county attorney did, and I understand completely what they did. Um I don't I don't want to I don't want to agendaize a meeting to gain a further understanding or discussion about that because I don't not sure I'd find that helpful for this council.

Well certainly it would be and how it would relate to what can be done in Pleasanton. I mean, it wouldn't just be to I think I I think I said that to discuss the um ICE impact on our community, but I I think that the getting there is I am not I did not watch the meeting and I do not have those answers. So, and I yeah, it would be how it can be how it would impact Pleasant and what Pleasant and what options we have. I thought we didn't have options, but if the county did that, it seems clear that there are options that we I think we've had a couple of community members and I think there would be quite a few that would want to hear that.

Okay. So, uh, that's council member Tesa's, uh, matter initiated. Uh, is there support for that at this time? I support it. Okay. Any additional? No, not at this time. I need a little more specificity about what policies we'd be addressing and what they would be uh before we agree before I would agree to support an entring of it. Okay. Any additional uh Okay. Fails for lack of support. Okay. Okay. Any additional matters initiated by council at this time?

Yes, that was so much fun. I have another one. Um so, um on the heels of yet another budget discussion and yet another um continued um uh uh structural deficit. I would like to ask if there is support to revisit the discussion about putting a half cent sales tax on uh on the ballot in November in addition to the toot or I guess in addition to the toot. Yes. Okay.

Uh that's council members matters initiated. Does it have support? I have support of that. Okay. Any additional support? I don't support that. Okay. Fails for lack of support. Okay. Any further ones? Council member Tessa? No. Okay. Thank you. Any additional matters initiated by any of my fellow council members at this time? All right. We're going to move on to council reports. We're going back to the original order. So, Council Member Tessa, council reports, please.

Yes. Um let's see. I I had a Valley Link meeting. Um I viewed the entire um BART workshop that um where they have said that if you need to turn on your microphone.

Thank you. Okay. I attended a Valley Links meeting and watched the BART workshop where they said that we would um if the 63 doesn't pass the tax measure that the entire blue line will be shut down. Um which needless to say has a significant impact on Valley Links. Um, I attended an innovate Tri Valley meeting that was um early early but very informative. That's it. Okay. Council member Aker.

Yes. On February 5th, I attended the taping of the most recent mayor's report for Channel 30. On February 6, I attended the museum on main event where resident Brad Hurst and the Harringtons were recognized for being Pleasanton history makers.

Okay, Council Member Nybert, sorry, it just ended quicker than I thought. Last uh Wednesday, I attended the Alama County Mosquito Abatement Board meeting where in addition to several items of business, we also discussed a resolution by the count by the u the board to um encourage use of a an innovative 80s Egypti mosquito uh control uh concept utilizing viruses and uh it's it extremely interesting conversation and potentially you know a solution for controlling not eliminating but controlling 80s egypti in our area. Um so that's it. All right. Nice to have you back and vice mayor.

Uh only reportable thing would be the stop waste points and authorities um meeting on February 12th.

Okay. And uh I just have to report on uh February 9th I attended Alama County Transportation Commission's program meeting. Uh just probably everyone knows but 680 southbound lanes. The toll lane is currently open to the uh commuters. Uh again, no tolling charges are yet implemented. Uh P Gen is the answer. Just I'll explain why, but they're having challenges getting connected. uh measure B and BB and vehicle registration fee distribution schedules of how those funds will be distributed out and the metrics was debated pretty hotly actually clean air expenditure plan I580 express lanes so our community is aware are over 10 years old so the equipment in them are going to be updated to the newer technology for uh the express lanes and they are projected to have initial revenue starting to come from that that revenue will stay uh nicely in the Tri Valley area benefiting projects that help uh the commute along the 580 corridor. Um and then express lane maintenance contracts. I attended on the 10th the Pleasanton Unified School District liaison meeting. We're talking about the joint meeting. So it's at the end of April and should be on our calendars. uh the safety of our children, immigration concerns was raised as well as uh budgets and budget challenges that all uh department, cities, school district is going through. On the 11th of Oh, my calendar's off. Uh I attended Alama County Mayor's meeting in Berkeley. The topic was homelessness and uh they do assert that racism is a significant challenge in homelessness. And then on the 14th uh which is Valentine's Day uh Lunar New Year celebration at the Pleasanton Senior Center where we've

received the horse uh which will be in the mayor's office and uh I am taking name suggestions for the horse if you'd like to submit. Horsey was the name recommendation by uh I think a four-year-old at the event. So Horsey is our current only u significant uh added one. Lastly, just to our community, committee and commissions are recruiting. It is open right now and so if you are interested in applying for a committee and commission, please go to the city's website and you can look it up under boards and commissions. Okay. And with that, city manager, please.

Thank you, mayor. Uh good evening, mayor and council. I'm going to begin tonight with recognizing a few cultural traditions uh and some upcoming uh community celebrations that we have around the diversity in the community. Uh we have our Ramadan uh observance. Uh Ramadan begins this evening and continues through March 18th. So we want to extend our warm wishes our warmest wishes to the Pleasanton uh Muslim community uh during this really meaningful and important time. Uh as the mayor just mentioned, it's Lunar New Year. Uh the the celebrations actually begin today and they continue through March 3rd. Uh this year is the the year of the horse uh which symbolizes energy, resilience, and forward momentum. And so we want to wish everyone a wonderful Lunar New Year. Uh it's also Black History Month and we we have uh as part of our cultural celebration series through our our Pleasanton Public Library, uh we host Black History Month. Uh the the celebration is scheduled for Saturday, February 28th from 1 to 3 pm and we'll be celebrating black history, culture, contributions through storytelling, live music, dance, and family-friendly activities. And tonight, I'm going to conclude uh the remarks with two thank yous to city employees for making the community better and more inclusive. Uh first, to our police department for their support of the Night to Shine event last Friday night. For those of you who don't know, Night to Shine provides a prom experience for people with special needs and for their parents and caregivers. Uh, and just uh want to again thank our police department for supporting that event. Uh, as well as our public works team for the work that they did to replace uh the old playground equipment at Mhler Park uh with a brand new brand new play structure, accessible equipment, rubber surfacing, and sort of with that theme of inclusion. uh the the space now is uh more welcoming for a wider range of families to come and enjoy outdoor outdoor time in Pleasanton. So that concludes my remarks for this evening. I want to thank you again for the

opportunity and uh that playground is much brighter uh in color than it was ever in Pleasanton's history. Uh, okay. Before I let you begin, uh, Council Member Nybert, Gong, hey, Fat Troy to those who are celebrating Lunar New Year. Happy Marty GR, happy Fat Tuesday. And Council Member Nyber, can you take us out?

Yes. Uh, and just a quick mention that uh, February 19th, I believe that's Thursday, is the day of remembrance, the annual day of remembrance for Japanese Americans who were interned during World War II in concentration camps here in the US. Um, with that, the city council adjourns this meeting with a tribute to our nation's men and women serving in the military and with gratitude for every United States veteran who has bravely answered the call to serve. Further, we wish to honor the memories of those who have made the ultimate sacrifice in conflicts both past and present in defense of our country. Thank you. We are adjourned.