City Council - Regular Meeting

Recording in progress.

Okay. We're good? Okay. Good evening, everybody. Before I get started, wanted to make a special announcement that, channel fifteen is down right now, and it is out of our control.

I do not know what it is. And, our, media team right now, they're on the phone with Comcast figuring that out. However, you can still access on YouTube, Zoom, or live in person. So, you just can't see us, on channel fifteen. So, with that said, good evening, everybody.

I'd like to call this meeting to order. It is Tuesday, 05/12/2026. This is a special city council meeting. We are in, two a, and it's, it is 04:31PM. And if I may, if I can have council member Goldstein, if we can kick this off by doing a pledge allegiance.

Please stand if you're able. 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. Thank you.

Thank you. Also, pursuant to government code section five four nine five three b, the meeting will include two teleconference locations. The agenda will be posted at each location, and members of the public will have an opportunity to address the city council at each site. The first location is the Hyatt Place Chicago Downtown Hotel, 28 North Franklin Street, Chicago, Illinois 60606. Council member Bonilla will participate teleconference, in, Chicago. Council member Bonilla, are you there?

Yes. I am, mayor, and good afternoon, everybody.

I just wanted you to know that you came into us in stereo, and, we're gonna we're gonna fix that. And then oh, yeah. We don't need to do the second location. Right? Yeah. Because you're you're sitting right here next to

me. Right.

Okay. Perfect. Okay. Next, let's see. Madam city clerk, if you can please take roll.

Good evening. Council member Andrews. Present. Council member Vonia junior. Present. Council member Goldstein. Present. Council member Roach. Present. Council member Cyril.

Here.

Council member Sirmanio? Present. Mayor Salinas?

Present. Thank you.

Next, I wanna move on

to, we have two very special presentations, today.

And and I should I should also say that, for those who are watching, on television, you are you're we're we are in Room 2 A, and this is a budget work session, and it's it's a rather, casual, table. None of us are wearing ties. And and and, typically, you know, well, except for council member, I always give him a bad time a bad time about it. He's not wearing a tie, but, typically, we are not dressed as casual as we are, this evening. So, I just wanted to make that.

So, today, we're gonna be honoring the National Police Week, and we also have a very special citizen that we are gonna be acknowledging. So please don't take us not wearing a suit and tie as a sign of disrespect. So, I just wanted to make that point. Our first presentation is to acknowledge National Police Week, which is May 10 through May 15. And, let's see.

Bye. Bye. Oh, here it is.

And what I'll do is I'll read a proclamation, and then, we usually take a picture after the proclamation, and, we can do one. Well, maybe we kinda huddle up over here in the front, but okay. I'll read the proclamation, and then and then we'll proceed. I also wanted to acknowledge, with us today, we have, chief Brian Matthews is here. We also have, captain, Heather Lenteo here, and, captain Olsen is here, and, captain, Deplovich. Deplovich. Deplovich. Did I say Deplovich? What I meant to say is Deplovich is here, not Deplovich. And and, oh, and, of course, captain Javier is over there.

I have a lot easier time saying Javier than than Deplich. And, of course, we also have, Hayward police officers, that are also present. Okay. Whereas in 1962, president John f Kennedy signed law public law 87 dash seven two six designating May 15 as peace officers Memorial Day and the week in which May 15 falls as National Police Week. And whereas police officers throughout our country are dedicated citizens who commit their lives to protecting and serving families, businesses, neighborhoods, schools, and communities, and whereas each whereas each year between a hundred and fifty and two hundred peace officers across the nation are killed in the line of duty making the ultimate sacrifice to the communities they protect.

And whereas the city of Hayward owes a debt of gratitude to five brave police officers who have given the ultimate sacrifice in the course of their duties, George e Viera shot 09/16/1929 while attempting to arrest an armed robber, Bobby l McSpadden killed 08/04/1972 while pursuing a wanted suspect, Robert j Reed strangled 06/29/1974 by a prisoner in the jail, Benjamin Worcester, stabbed 03/25/1987 during a struggle with a violent parolee, and Scott Lunger shot 07/22/2015 during a traffic stop. And whereas members of the police department members of the police department of the city of Hayward play an essential role in safeguarding the rights and freedoms of people of Hayward, and whereas it is important that all persons of the Hayward community know and understand the problems, duties, and responsibilities of their police department and that members of our police department recognize their duty to serve the people by safeguarding life and property, by protecting them against violence and disorder, and by protecting the innocent against deception and the weak against oppression or intimidation. And whereas the police department of the city of Hayward has grown to be a modern and scientific law enforcement agency which, unceasingly provides a vital public service.

Now, therefore, I, Mark Salinas, mayor of the city of Hayward, and on behalf of the city council, hereby proclaim the week of 05/10/2026 through 05/16/2026 as National Police Week in the city of Hayward. Ladies and gentlemen, let's give our police department a big round of applause. Nice. Chief, I'll go up there and give this to you, and then we can all take a picture. How's that?

That way we can get Ray in the background. Leave a hold.

The big head in the background.

There you go. Perfect.

Thank you, sir. Alright.

Now we got a hot mic. Mayor and council, I just wanna say thank you for taking time out of your busy schedule to recognize National Police Week. This Friday is Peace Officer Memorial Day. It'll be recognized across the country where we remember and reflect on those who have made the ultimate sacrifice. It's always sobering to hear the names of our own who have fallen in the line of duty, including the ones that many of us here knew very, very personally.

And our responsibility to them and to this community is to carry on a legacy of service, to do this job the right way, to be professional, dedicated, and to care for this community, and we're committed to doing that. I will say that this work is very, very challenging. It is dangerous. It's stressful. The people who are impacted by a line of duty death, it never leaves. And so to the extent that these men and women put on the badge and go out and take care of this community on a daily basis, I'm very, very proud of of them, proud to lead them, proud to be a part of this noble profession. I just wanna say thank you to everybody in the room from the PD and thank you again for the recognition. Appreciate it. Thank you.

And not to diminish the event even, but, we have an outstanding standing individual that we are acknowledging today. We, rarely get the opportunity to do this, and people like Farrow come to us once in a long, long time, and, your, heroism is certainly being recognized today. So what I'm gonna do is I'm gonna have council member Andrew. You can hold that up. Today, we are acknowledging Farrow Brown Farlow, and, I got this request, some time ago, and I'm glad we were able to do it this week.

And hold on. I wanna make sure I cover everything. I guess this where the where the highlight stops is where I stop.

Okay.

And let me, let me just read, the what Farrow did, and, it's just an incredible story when when I was notified about this. But, before you do anything, let me just read this. On 10/08/2025, Regina Brown was in her vehicle with her 11 year old son, Pharaoh Brown Farlow, with with her son, Farrow Brown Farlow. Regina and Farrow went through the Burger King drive through to get Farrow a bite to eat before his afternoon football practice. As Regina and Farrow exited the drive through, Regina noticed a male subject lift his shirt.

Simultaneously, Farrell told his mom he has a gun. Regina quickly called HPD dispatch to have officers respond to the scene due to a threat to public safety. Regina used Farrow's assistance to provide a very detailed description of the subject. The description was of Hispanic male, was of a Hispanic male in his thirties, about five two, five three, tall, heavyset with black hair and black beard, who was at who was least seen wearing all tan clothing and was armed with a silver firearm. Farrell told his mom that he saw the subject from the silver from the silver firearm from his front right pocket of his pants, to the front waistband of his pants, which which Regina relayed to HPD dispatch.

HAPD detectives promptly responded to the Burger King parking lot where they located the male subject, ultimately identified as Jaime Mejia Lopez who precisely fit the description provided by Farrow and his mother. Before detectives could even exit their vehicle, the subject found had a lengthy and violent criminal history, retrieved a firearm from his waistband, pointed it at detectives, and ran towards them, and ultimately led to an officer involved shooting. Now while we don't like to have these events happen and and like this, the mister Lopez did survive, but I just wanted to acknowledge Farrow in his quick thinking and his immediate reaction to making this particular place, Burger King and in this corner, a very safe place for others. And ladies and gentlemen, let's give Farrow a big round of applause. Now for the whereas's.

Okay. Whereas, Farrell Brown Farlow, an 11 year old Hayward resident, showed tremendous courage in assisting his mother in reporting a potential danger. And whereas on 10/08/2025, Farrow and his mother, Regina Brown, were getting food at a Burger King drive through prior to Farrow's afternoon football practice. And whereas as they exited the drive through, Regina noticed a male subject lift a shirt. Farrow noticed the male subject had a gun and Regina promptly contacted HPD dispatch.

Whereas Farrow assisted his mother in providing, HPD with description of the subject including current location of the firearm in the call. When Hayward Police Department personnel arrived at the scene, the subject who later determined to have a lengthy and violent criminal history, retrieved the firearm from his waistband and an altercation ensued. Officers then detained the subject and prevented any further danger to the community. And whereas in the following days, Farrow and his mother agreed to meet with the detectives to provide more descriptive statements to assist with positively identifying the subject who endangered the lives of numerous community members that day. Now, therefore, I, Mark Salinas, mayor of the city Hayward and be and on behalf of the city council, do hereby commend Farrow Brown Farlow for his tremendous courage, his situational awareness, and collaboration with the Hayward Police Department in assisting his mother in reporting potential danger and preventing larger incidents in the city of Hayward.

Farrow, you are a hero today. Let's give Farrow a big round of applause.

Alright. Again, mayor and and council, thank you so much for taking time to recognize Farrow and his heroic act. But Farrow's not done. We got something for him too. This is on behalf of the investigations division.

I wanna present Farrow with this plaque. It says, on behalf of the Hayward Police Department investigations division bureau, in recognition of your outstanding courage and commendable actions displayed on 10/08/2025 and this is another plaque that he'll be able to to hang up in recognition of his actions. So I wanna go ahead and give that to you. And just a brief comment before I turn it over to Farrow. He told me his speech is only fifteen minutes, so this should be good.

I will say that when we talk to community members about contributing to community safety, because we certainly can't be successful without partnerships with our community members, it is to be aware of your surroundings. And on that day, Farrell certainly was aware of his surroundings. And not only that, we tell people, if you see something, you need to say something. And Farrell did that. He said some he saw something and he said something. And not only that, he he gave a pretty good darn description of what he saw that was relayed to our dispatch staff and to the off officers that ultimately responded, who are here, by the way. The detectives that were involved in that incident are here. The investigators who did the investigation into that case are here. I will tell you just from the conversations that we've had in the building. They think the world of you.

They think the world of your family. So, you're killing it. Good job. And, Farrell, thank you so much for what you did, not only for the members of our community, but for the members of our department. We're proud of you. Thank you, bud.

Well, you don't have to say anything if you don't want to. But if you want to, the mic is yours. You earned it. No? Okay.

Fair enough.

I know. It can be overwhelming, but, yeah. How about, miss Brown? Would you like to say anything? Great.

Well done. And and your story, Farrell, if you can imagine this, is even reaching the state of Illinois and Chicago. So councilmember Bonilla is standing right is right behind you. There there he is.

Congratulations. Congratulations, and thank you so much, Farrow.

Wonderful. Okay. You can, you can stay for the rest of the meeting. We'll be here till midnight, Farrow. But, you know, we won't take it personal if you, if you exit.

We

should invite him to be a police explorer.

Yes. Have we signed him up for, have we have we given him a an application, redeemable for 2045 or something? Yeah. And make captain Olsen, make sure you guys get a picture with him outside. I think that would be

with the detective. Yeah. Yeah.

Absolutely. Okay. Alright. Thank you for that, and it's a great way to start a meeting. Next, I'd like to move on to public comment, move on to public comment.

Public comment today, since this is a special council meeting with, with the budget, on the agenda, Public comment is, reserved for only items that are about items on the agenda. And so if you wanna talk about anything else, come back to a later council meeting and you can do that then. But today, we're only taking public comment regarding the budget. So I do have are there anybody is there anybody online? Let's go to, is it Nora Huntley?

Hello. My name is Nora Huntley. I am the, union rep with SEIU ten to one, repping both the Hayward clerical and maintenance chapter. I just want to say we have collaborated with the city to ensure that we stabilize the city's budget, and 10 to one members are always gonna fight to ensure that the city services are funded. We do look forward to the modernization of the business license tax, and we do support a model that definitely continues to foster economic activity and generate revenue for the city's essential city services.

Thank you.

Thank you. And then I'll move on to I do have two cards here. David Padilla.

Oh, there we go. Hi. Good afternoon, council members. I am David Padilla with CAU ten to one. Just as my colleague Nora mentioned, we're very excited to continue to collaborate with the city, with the city council, to make sure that we stabilize, Hayward's, city budget.

It's a fight that we see in other jurisdictions where we have members and so we, you know, we wanna continue to collaborate with you. We do think, however, that, you know, while the modernization tax is a good step forward, we do think in our analysis with our union researchers, we have identified that there is a possible $7,000,000 gap that could still be collected by the city to be able to fund these essential city services. We look forward to meeting with council members to share just our perspective on that and sharing our presentation. And again, just wanted to state we support the model to make sure that we incentivize greater economic activity, collect revenue and really keep us on the path to be on the ballot for November. I think you all have laid out an excellent plan moving forward, but we just want to make sure that we collect as much revenue as possible.

Thank you.

Thank you. Teresa Rizendez.

Hi. Good evening, everyone. So this is kind of like a broad brush observation regarding the budget. So this is from data from, the the state of California, government compensation in California as of 2024. Just comparing Fremont to Hayward, at that time, Fremont's total compensation budget was $155,500,000 For Hayward, it was 148,700,000 so the spread is not very much.

It is between 510% difference. And what I wanna point out is the value of the homes in Fremont are significantly more than the value of the homes in Hayward. So they have a much higher tax base than we do. When we focus, you know, and it is justifiable, but when we focus on quote just compensation for the workers, we don't take into account the tax revenue that is coming in, in addition to, like I discussed before, not watching overtime as closely as we need to, we run into trouble. And we just want very desperately for Hayward to stay financially solvent going forward.

Thank you so much.

Thank you. Next is online, Emily Wallace.

Hello? Can you hear me? Am I muted?

No. We got you. We can hear you.

Okay. Great. And so appreciate the opportunity to comment. As we look at the city's assessment of the upcoming budget cycle, we are very concerned about the ongoing 15% vacancy rate for Hayward's workforce. Over the last two years, you've asked our city workers to do more with less. You have downsized teams. You've eliminated city services. You've gutted our library, and you've taken back a 3% cost of living increase that our members bargained. We believe they deserve that wage increase. We've reviewed the business license tax model that the city is considering putting on the November ballot.

We strongly agree and applaud this effort. We believe the city needs to modernize its business license tax. So we appreciate that the city is willing to take that step, but the proposed model leaves over $7,000,000 on the table. Citi's model does not go far enough, and we urge city council to adopt our recommendations on the business license tax measure that we provided to you earlier today. Primarily, chiefly, we believe a tax bracket should be added for companies that earn $50,000,000 or more in gross receipts.

As it stands, the city's proposed model will rely on smaller companies for the majority of its business license tax revenue. We believe Hayward's large companies should be paying their fair share. It's the right thing to do for our city workers, and the potential increase in DLT revenue is an opportunity to really course correct. The revenue is going to mean the city can start hiring additional employees, reopen our library, and ensure that our city services and our workforce are fully funded for the long haul. So we urge you to adopt our recommendations on the business license tax model in order to capture that additional 7.7 doll $7,000,000 in the annual revenue. Thank you.

Thank you. Is there anyone else online? No? And I do not there's no one else online. I do not have any other cards. So what I'd like to do, I will close public comment and move move on to our special work session item one WS two six dash zero one three. This is the city council budget work session, review proposed fiscal year twenty twenty six, twenty seven operating budget, and I believe our, city manager will kick this off. Miss Ott.

Great. Thank you, mayor, council members. We're glad to be here. We've got a number of slides here and a number of speakers, but and I'll go through a couple of the initial slides here. I just wanna say before we get started, I wanna say a big thank you to a number of folks.

First and foremost, our finance team that over the last three months have essentially balanced two budgets, not only the budget for this fiscal year, but now this budget. And so a big thank you to, the finance director, Deanna, and her team. But this was definitely a group effort and on a very short timeline and pulling all this together, given where we are financially. And so also really a big thank you to our executive team who are all here and their budget folks. So, thank you to them. I'm gonna try this. Does it work? The clicker, Miriam, or should I okay. I'll just signal to you. It should work?

Is it on?

Details. Okay. Nope. Alright. Well, why don't you just keep going to the next slide? I'll just say next slide. It's fine. So we have first, I'm gonna provide a budget context because I think a lot of council and community are hearing there's other cities that are experiencing this. We wanna just contextualize what's happening, and we'll go into a little bit of that. But then also do a recap since February 28 when we had a work session before, what have we done, what's changed.

Sorry. You gotta point it over there. Point it out there.

Okay. And then we'll we'll go through our recommended budget, talk about the future, what it holds. We've done some projections, updated those projections, and then we'll have department heads walk through their their slides. And you'll we'll talk a little bit more about this, but really less focused on we're gonna focus a little bit more on service impacts and what the what what they're experiencing so you get a little more of a understanding of where departments are given where we are financially and then talk next steps. Did it I I put these slides in.

We don't I'm not gonna spend much time, but just to when we are thinking about what we're proposing, what we're doing, we are keeping in mind the council's strategic priorities. So these are kind of guiding light and we do think of these as we move forward. If we have scarce resources, what are our core services? What are we prioritizing? And we look we do look at this and and this is something that we think of as we move for as we propose our budget. I left this next slide in. Can you just change it, friend? These are just a sample projects. I actually look through these. Most of these projects we have accomplished.

So for instance, beginning construction of Vista Park. I just leave this in there. We're not gonna talk about it, but I just want you to know despite all the conversation about the budget, we are doing a lot of work, and there is a lot of work being done and a lot of accomplishments that are being made. So I just left that in there just so we are reminded of the projects that we are getting done and have gotten done this year. Next slide.

So I also wanna put this you know, there's I think there's questions from the council about what are, again, what our core services are, and this just is a reminder of what when we did our resident satisfaction survey, what the community's biggest concerns are, what their service priorities are. So you see here, you know, fast emergency response, safe neighborhoods, self safe and well maintained streets, healthy local businesses, a clean and well maintained city, and adequate preparation for disasters. So these are also things that we keep in mind as we move forward to really try to avoid some of those larger cuts and really try to maintain as many services as we can. So I think there's always we talked about this when I was here in February, but I think worth reminding us what what is causing Hayward's fiscal challenges. It was a number of things in some ways, a little bit of a perfect storm.

But the biggest and what we're seeing throughout the region is a declining real estate market that is really driving. We we, the cities, depend on real estate driven tax revenues as our primary source of funding both in terms of property tax, property transfer tax, and you actually see them have stagnated. Our overall revenues have stagnated a less 1% on average per year over the last three years. And just as kind of a counterpoint, when you look at our salary and benefit costs, our benefit costs over the last three years have actually gone up by 40%. So there's a real mismatch and that's what's happening.

We'll we'll show you a little more, but that real estate market decline and the stagnation of our revenues is probably the biggest contributor to what's causing our fiscal challenges. We do have rising personnel costs. There were contracts that were approved. You know, I'm not we're not don't have to harp on that, but that that those costs and the personnel costs have also risen and risen faster than our revenues. And then even with the workforce reductions, there are costs that are ongoing that we maintain that that we have to continue to pay over time, and those costs are outpacing our revenues.

We also had ARPA, which is the federal funding during COVID that we increased staffing and programs that were dependent on those one times funding and those have expired. And so trying to really figure out how much we can afford after those funding sources that are gone. And then just to be honest and kind of acknowledge, there were financial best practices that were not adhered to, and so just wanna take accountability and honor you know, and and say that. But some of the things, for instance, just and you'll hear the salary savings. We they've we would every year have quite a bit of salary savings, and so we didn't necessarily budget for overtime or leave payouts because the salary savings would just kind of cancel out.

But when those salary, and but those, we just over time, we weren't able to afford the increases in those and really financial best practice of being budgeting those things and making sure we're holding ourselves accountable and monitoring those over time. And then just we also anytime you have leadership transitions and there's kind of a dilution of authority and responsibility, it just makes it harder to manage and address crises. And so you had all these things happening at once. And so we just I know we went over this before, but I think it's important to review again. And, that did result in us experiencing about a $30,000,000 deficit, in fiscal year twenty four, twenty five that depleted our reserves.

And that essentially, I believe, is our structural deficit going forward is about $30,000,000. So that persists, and we'll talk more about how that factors in going forward. Oh, okay. I can do it. Nope. I can't. Just go back one. There we go. Okay. Alright. So Mary, our assistant city manager put these slides together. I think they really help understand. So this is what's occurring now when you have the orange line is all of our general fund revenues. The blue line is our our general fund expenses. The blue line is our ongoing revenues, meaning our excluding our one time expenses, or short term expenses, and then the yellow line are salary and benefits.

And so you see with the ongoing revenues kind of stagnating, you see that difference between the orange and blue line really growing or there's a difference that is essentially our structural deficit. We also put on here just kind of the lie the dotted yellow light or gray line, is kind of 80% if you were to have as a benchmark 80% of our ongoing revenues, for and so you can see there's kind of this benchmark. Well, your salary and expenses should be around or salary and benefits should be around that 80%. It's not, you know, set in stone, but something just kind of a benchmark to keep aware of. And so you can see that our yellow, our salary and benefit costs are are outpacing that 80% mark.

So that's what's occurring. That is our current situation. You know, Mary had a good idea of showing you what would happen if we'd actually seen a 4% growth rate like we've seen over the last ten years. If you wanna go to the next slide, Fran. Just to say if we had had those annual revenues, you'd actually see that structural deficit would we would have we wouldn't have that same structural deficit, and our salary and benefits would have tracked closer to that 80% line, which doesn't mean that, you know, all you know, the choices we made were, you know, in retrospect, but it just shows you how impactful losing that annual growth and revenues is on, our financial situation.

And this is really what's contributing to a lot of cities throughout the region, when you have that stagnation in revenue growth. Next slide. So I think I'm gonna turn it over to Michael Barnes who's gonna talk in our our revenue manager talk a little more about some of these trends.

Sure. So if you look at this slide talks about our focuses on the two largest revenue drivers in the city property tax and sales tax. And speaking of the stagnation that Jen was just talking about, you see the blue line is the property tax line, and you can see it's steady ranges from maybe three and a half to eight and a half percent over those nine years. Reliable but modest, modest growth. We just talked about a huge increase in expenditure, salaries, and benefits, and the property tax is just kind of a stat stagnant, basically.

5.9 is your average growth. But then if you look at sales tax, you see this incredible volatility in our sales tax numbers, where the average is 3.9% of sales tax, but you can see it swings from negative 11% to a high of 20% over the previous year. And if you look at fiscal year twenty four to fiscal year twenty six, you see we had that high, that 20% increase. Two years later, we're 11% decrease. Huge swings.

It makes it incredibly difficult to budget using sales tax, using a volatile number like that. And you see these swings, this stagnation. This is the Hayward picture, but the next slide will show that it's really a regional issue. You'll see we're not the only city facing large budget deficits, facing these large structural deficits where costs are just growing faster than expenditures. Like most of us in our home budgets, costs are growing much faster than revenue coming in.

You'll see these deficit numbers across the Bay Area. They're large. They're large percentages of folks, general fund expenditures. And why did we get there? We talk about financial best practices were not followed, definitely, but it's also a regional issue. It's not just mistakes Hayward made. It's it's, structural across the whole Bay Area. So other agencies are facing this this, the same sort of problems we're facing too. And that's where I think Deanna is gonna take over and tell us some about the lessons learned and the actions that we're taking. So

Thanks, Michael. As the city manager discussed with you, there's oops. Let's move on to the next slide. In terms of what's happened over the past, we really wanna continue to be transparent with you and and with the public, of course, through you, and these key budget lessons learned. In terms of best practices, you know, we do get projections over longer terms and so better understanding what's going to continue to grow.

You know, we get a a general longer term forecast for sales tax and property tax. We are hearing from the county assessor that there's, a lot of reassessments happening, and so another flat area of growth and a big revenue source. And and not just for us, we actually are still expected to have some eight some cities are losing or they're not they're declining in revenue. So we want to understand what's what are these one time spikes and use them in different ways than this ongoing revenue and and look at that into the future. Again, improving our transparency just to keep talking to you about all of it and talk to you as much as you need to hear it and the public needs to hear it.

Hold each other accountable, work together. And so that's that's not just us, finance and other departments accountable, but them coming back to us and saying, hey. But that's not a realistic projection for us. We need we need to talk about this. And and those were some of the alligators we were wrestling to to get this budget in balance and both for this fiscal year and next fiscal year.

So really working together with the partnership of all of the departments to get here, and and each department definitely made some sacrifices in terms of, you know, services that you'll hear about later. So Jen mentioned, for example, salary savings was a big area. We used to budget a line for salary savings and it's and that would then what was left over would kind of be used to pay special pays. We spent a huge amount of time understanding all of the pays, all of the costs, really making sure each one is budgeted. We took out vacancies that are not critical, that, aren't on the way to being filled.

So the departments the the only vacancies are, like, on the way. They're they're either all but filled or they're just gonna have to be either for revenue purposes or to meet required, law the state law, that type of thing. As we go through, I'm an active as a finance director, I'm an active participant in labor discussions and labor negotiations. My team is routinely asked for information. So what's this going to cost? What's the impact? We work even with the payroll team for them to understand and and have some comment about how's this gonna work in our system. What does this mean? Have you thought about x or y? So really good, practices around making sure that people, like, even at all levels that maybe maybe us at our 30,000 foot view aren't seeing it, but somebody else may.

So staff is very well encouraged to bring concerns forward. So in terms of how we close the gap, as you recall, we've had workforce reductions back back in January and, again, a few more recently last few weeks. We are using fund balances, mostly associated with longer term liabilities. The funds are still, at an appropriate level, but they are, they they aren't at the best level. So these have some potential risks in terms of if long larger settlements are needed, for example, in a workers' compensation case.

We believe we're we're good in the midterm, but it is something we should be preparing to to resolve in the future. We worked really closely with our bargaining groups. We're very thankful for the concessions that they made across the board. Most bargaining groups came forward. Big you know, in terms of minimum staffing, overtime reductions, deferment of COLAs.

We're really grateful for the partnership. This that was a huge, lift in getting this budget done. So other cost saving measures, again, limiting non essential travel, looking at all of our contracts. Each department is looking at at their contracts, looking at other unspent fund balances that are available, and every department's been in and out of their service and supply budgets just to look for a little bit more. We were working through a business license tax audit with our vendor to, get businesses that maybe aren't paying their business license tax. And, again, working part closely with partners like HARD to support community events so that that reduces or ends our event spending.

So before we, move on, what I wanna do is, open up for questions. And just so that everyone knows, 05:30, there. Okay. So questions. I'll just go to council.

Business tax audit, is that what we're going through, or are we going to go through it? That was one of the items that was on point.

So business tax I mean, Michael could speak to that, what the audit is.

There's they're starting. They're starting with business tax auditing is an ongoing process, but the business tax discovery is a new process that they're going that they're going through. So, if a business is operating without a license, it's finding it. It's auditing it. So that's ongoing. It it takes a while to ramp up a process, a program like that.

So Alright.

It's not related to our business tax.

No. No. Alright. No. This is this is audits of the current using the current business tax rate structure.

And we're we've been we have been looking for structural and ongoing changes. That's our tool out there. Any other structural ongoing changes that you can mention or that we're going looking for or have found?

Well, I'll start and then I'm sure that the rest of the folks here I mean, I think the one is the business license tax modernization is a structural change because that'll be an operating revenue ongoing. The the reductions in workforce are ongoing structural changes. I think, you know, we'll talk more about this, but whether how much of the measures see we use or don't use, I mean, that is a source of revenue that we have. Whether or the council wants to continue to use that, we'll have to talk more about that. So that could

be that could be ongoing?

It could be ongoing. I think there's a trade off there. I think we'll talk more about that when we get to the future kind of considerations.

Okay.

Whether or not, in some ways, with a $30,000,000 deficit Right. We may have to do that, but we'll we'll talk more about that. But I think any of it we've looked there's a lot of one time stuff, but there's also all of the cost reductions and vacancy management are ongoing, measures that we've taken and have see you you know, have really essentially allowed us. We have another slide that Mary put together, but allowed us to pay for some of these increases without increasing our overall budget, and that's because they were structural changes.

Okay. I'm just concerned about the core services. How badly have they been affected?

Well, that's a great segue because our department heads are here to tell you about that.

So if

we could wait till the department I mean, you know, it's not all bad news. I wanna be clear. There's we're definitely able to maintain services. I think they're doing a tremendous job doing, you know, doing their job, but there are impacts. And so we're gonna talk more about that during our departmental presentations. If that's okay, we'll wait for that.

Thank you.

Before, we move on here, I'm gonna go to council member Bonilla and see if he has any questions.

Thank you, mayor. I I just have a few. First, I just wanted to say, you know, I I appreciate the quick overview of the business license tax modernization. Obviously, I think it's the right move, and I think it's the the right structure. But, Jen, can you maybe address the $7,000,000 gap we heard from our union partners and why we're not pursuing that

Yeah. Absolutely. Time. Yeah. And, we we received their proposal today. So I'm having some preliminary thoughts about you. Some are general and some might be a little more specific, but we are having our consultant look at it carefully. First, let me just say there's we have zero interest of leaving money on the table. Like, so we're not doing this to have less revenue. You know, we're not proposing something for less revenue.

I think our we we wanna be what we do wanna be is careful because I think there's a risk that if we increase the rates too much, there's two things that could happen that I think could end up, being detrimental to the city. One is that we have long term businesses that leave. Either they leave or they don't wanna come here because our rates are out of whack with the surrounding areas. And so the council in February gave us directions to try to match our neighbors, we didn't put us at a competitive advantage or, you know, put disadvantage with the the cities that we compete with for businesses. So that's one thing we just wanna be careful.

And do I know I can't tell you neither can our consultant know exactly where that line is. We don't know where that line is. And so the a more you increase the rates, the more risk there is that you're going to have an impact on the local economy. And so that's just a there there's no bright line where that is, so we wanna just be careful, about where we draw that line. The second thing is the higher the rates are, the more likely you are going to have businesses and the business community oppose this measure, and then you would potentially, if there's an active opposition to the measure, then you could potentially hurt our chances of getting this passed or, you know, in November.

Not you, but, you know, there is a greater risk of that. And so I think it's really not a question of can we squeeze more out of you can adopt whatever rates you want. I think the question is at what point does it become too risky that you're now potentially putting at risk the the measure overall? That said, we'll look carefully at the what they've proposed. We're gonna look at this $50,000,000 tax bracket. We'll look carefully at it. I did have our consultant look at it a little bit and just give some initial thoughts. They are raising the rates on manufacturing, professional services to both of which are very sensitive to rates. Professional services can move anywhere. Like, they they're they're easy.

They can pick up manufacturing also just because the margins are so tight in that biz that industry. They're very sensitive to increases in costs. So we do know at least in some ways that they've increased rates in those sectors that we'd wanna be really careful about increasing. But we will look at it carefully. We have time to do that before we put forward our recommendation for our June 2, you know, request or recommendation to adopt this to adopt a business license tax measure, and we'll come back to you with some recommendations. But we will look carefully at it. We don't wanna leave money on the table, but we also don't wanna increase our risk and end up losing the measure altogether.

Thank you so much for that answer, Jen. I mean, it's so comprehensive and so thorough, and thank you so much for, you know, you and the team taking a second look at that as well. But I really appreciate how thoughtful you're being in balancing all of the different elements at play here. My next question is I know you had referenced the benchmark of salary and benefits being about 80% of ongoing revenue, what is it for Hayward right now going into this budget this evening, you know, for for next year?

Two. I don't

have to

So it's around 92%.

92%. Okay. Well and, you know, I'll this as the opportunity to also, you know, thank our employees and our union partners for, you know, helping us balance this budget because as we had seen, you know, these rising personnel costs are somewhat unsustainable within our city. I think we all wanna make sure that our employees are, compensated fairly, but we also wanna make sure that that compensation is done so in a sustainable and, you know, thoughtful way for the city. So just really appreciate everybody coming to the table and collaborating to help us, you know, rebalance our our cost.

And then anything to say in terms of what's accounting for the big sales tax swings Yeah. That's the volatility we've seen there.

Do you wanna do it? Yeah.

Sure. In 2024, there were a large BART car sales. So BART actually purchased a lot of their BART cars. And because they go into use at the Hayward Maintenance facility, we get the sales tax on that purchase. So it That's right.

Alright. And and then my last question or request rather is can we see a copy of all of the fund balances at maybe one of our finance committee meetings? Thank you.

Yes. We can do that.

For me. Right? That's it for me on this section, mayor. Thank you.

Okay. Council member Roach.

Thank you. Yeah. I wanted to thank you, Dan, for putting in the you know, what is causing the problem because, you know, I think I've said this a number of times. Like, if we don't really dig down into how we got here then, you know, how do we how do we go forward with that? And and I you know, especially I think you mentioned you said especially ongoing contracts. Because I am interested in that. I think actually councilmembers or Cyrop has said this that, you know, even though something is budgeted, it doesn't mean we have to do it. Like, I hope we're really digging deep into realizing, like, okay. We did set aside money for this, but we really can't afford to do it, because I know we're looking at that with, with salaries. Right?

And I really appreciate, you know, per, councilmember Bunia's comment, all of our labor partners, I think, are doing what they can. Right? We've asked them to, and they have delivered. And, unfortunately, we've also had to let people go, like, in this crisis. But I also wanna be as honest as we can about what really doesn't need to get done. You know? I think it's great that we're doing the park. You know? I think there was money set aside for that, but what other big projects realistically should we be setting aside in order to maintain core services? And I think that's what you're saying, Dana, that you are looking at that, that it's not just I think you brought this up, George, that just because it's budgeted doesn't mean that it's something that we need to go forward with.

Yeah. And I'll add, I don't have to dictate that we look at that. The department heads are really looking on their own. Great. Really contributing.

Okay. And then, I mean, of course, so so I think this sort of, like, you know, declining sales tax, all of that is something we really should have been able to absorb, frankly. Think the point is while you said that our revenue is going down 1%, but our benefits have gone up 40%. That is obviously an unsustainable projection. We got here from I think we've heard either we're looking at what practices led us to believe that we could have afforded that at the time.

And so I, you know, I think you've said this on one of your slides, Anna, but, obviously, you know, going forward, you know, what is that backstop? Because we made decisions on salaries that we were so happy to make, right, because we felt like our, labor labor employees, everybody deserved that. But it was it was such a shocking error, and, you know, and we're all everyone's paying the price for that now. And I I just like, what is the backstop going forward? Like, have we already developed policies and what it's gonna look like going forward? I mean, that you know, we were, you know obviously, we're convinced on that. The numbers showed we could do that. I just, like, I just need to hear again how this is, there's some backstop that we could give because there's gonna be future council members. Right? We were all sort of, excited to do this, sold on this.

It looked good to do it. How can I guarantee when I'm not here that future councils won't be, won't you know, it would sort of be tempted on the same same level?

Again, I think some of that just comes from having some stability, right, in in your team. Is that was that almost the part I skipped? So, you know, you you've you're seeing Michael here. You haven't seen a lot of him before. You'll see Nick present later. So really building the team that we have, again, at all levels. So Michael just raised his hand and said, how can I help? He wasn't involved in budget last year or the year before. And and, you know, we worked through the masterpiece schedule. So, really, building strong teams.

It's not just the director building the budget. And then that it's not what it was before, but there were definitely gaps in in the team, Fran and Nick, and we borrowed Ellie from public works just really teamed altogether. Again, the department heads, this has not been an island in the finance department. It's, it's analysts working with analysts, analysts working with department heads, department heads working with me, really a a huge team collaboration. But but it definitely does rely on US council and and and looking for that stability.

And and I think maybe, you know, if there is ever a time in the future where there's some some loss of stability, then to just look for the transparency to go with it. Okay. So if if, you know, if something's missing, you know, in hindsight, not being here at that time thinking, yeah, I might have set aside some of that sales tax or and I can see maybe somebody thinking, Michael, sales just gonna keep going up and not really looking at the rest of the projection. Right. So you really have to look at a document, you know, page, whatever, 13 of the sales tax report and and which you know, you have to know how to read the reports to to make those. And they're still projections. You know, they're they're always a projection. So it's really kind of having someone who understands that and and having that comfort level to say, okay. That's we we need to wait. That's not that's not future money. That's today money. Sure.

Yeah. Okay. And then, on the, on the the context of one one time funds, you know, mentioned ARPA funds that, you know, I think it was you know, somebody reminded me this from the community about this that, you know, the back of the budget has these great, know, you encourage anyone listening to look at it. There are some really good financial policies laid out, and, you know, we sort of forgot to follow them. But, but I hope that we are going back and looking at that.

I mean, we all obviously need to. But, you know, the ARPA funds, it sounds like we did use some of those funds for staff that just eventually got dumped into the, into the general fund. Right? And, you know, without I I don't know how it's budgeted, but it does seem to me if we're just very strict about following those kind of policies, that sort of money, the ARPA money should have been funded for onetime projects during COVID or post COVID. I mean, we did, you know, we did stand up the the testing site for COVID and all that. I'm sure that took some of the ARPA money, but then whatever that took to stuff like needed to go away, otherwise it just ended up in the general fund. I hope we're going back and looking at those policies as well.

Yeah. Yeah. We've done a a start to revisit a a comprehensive set of policies. We want to take some time. We we reviewed it once with the council budget finance committee. We want to draw some some items up a little bit higher in a deep fallacy. Some items just got a little bit buried in there. We wanna spend a little more time on it and bring it back. And it's it is a comprehensive set. It really addresses, like, the internal service funds and their funding levels, risk levels. So and to be honest, it'll be aspirational, the policies that we have today. We we lost track in '24, '25. So Yeah. We're not going to be in compliance in the near term, but we can at least build to what we should be looking at as if, for example, if there's a windfall in the future. How do we what do we do with the windfall?

Okay. Then my last question, and then we need to move on. But my last question on slide 12, you know, you made the context of how you know, the regional context of where we are, and, and I agree with that. I I was, you know, like, was helpful to look at that slide, except that I think, you know, we obviously got off of our policy on the reserve as well because the reserve was, in a way, a sort of a little bit of a I I mean, it really it really wasn't what it showed that it was because of we put in you know, the cinema place was put in there as well. And so what's being done on that going forward? I mean, you know, the reserve needs to be cash reserve. Right? I mean, the policy says two months of cash reserve should something happen. And so so what's being done to shore that up so that we don't and were there other properties in the reserve as well at that time?

I don't think we have other properties yet. I mean, I think we're gonna talk a little more about shoring up the reserves a little later. So I can I mean, so we do have a strategy for at least getting us a little further along on that? We can talk more about that later if that's okay. Just because we have a couple slides to have that conversation. Okay?

Okay. And I'll save the rest of my questions as we go along. Thank you.

Council member Andrew.

Thank you for the report. Just wanted to ask a couple of questions. We mentioned court services, and a few of those things are pretty big undertakings for a city for us to take on, is building parks and building libraries. Do we consider those types of projects core services moving forward? I

mean, I do think that build capital projects as part of the general fund is something we we have to plan for that long term because we do the general fund, you know, for instance, library is a general fund department. Having a new library than is falls on general fund to figure that out longer term or public safety center, which we know, you know, our police department's in a very old center. So those are our obligations, and we do need to figure that out. I think measure c originally was Mhmm. Was how those were built.

So it was another tax revenue that was used to fund that, and I think the intent was that measure k one would be that moving forward to try to address some of those capital needs. I think we're gonna have to over time, we'll see if the economy doesn't recover quickly, and then I think I think we're gonna have to have, you know, a harder conversation about whether or that measure c funding stays as an operational revenue or something we can free up to try to meet some of those capital needs. We I don't think you need to decide that now, but I do think it's something we wanted to at least plant the seed today that, but, yeah, long term, I mean, cities have to find ways to fund their capital needs.

Mhmm.

Okay. Thank you. And, the regional examples you mentioned were San Francisco, San Jose, and Palo Alto, which I imagine has a strong sales base since they do have malls and universities and just trying to see what are the other options other regional players are looking into. We

are

seeing planning commission cancellations, economic developments not reviewing a lot of new projects. There's a lot of report outs. So what is the plan? And it looks like the economic development department's getting gutted with their budget. It seems shortsighted.

Yeah. I mean, I think we're trying I think we're trying to maintain their funding level the same as this year, and so we're not increasing budgets moving forward. But I I think it you know, to try to increase our, you know, attraction of new re retail or to try to help our existing retail perform better and try to attract new commercial users. I mean, we're we're doing the best with what we have. Sure. Could we know, you if we had more money, maybe do more. It's true. But I think we just have to balance more money for economic development versus other things. So I think we're we're trying and our economic development department is very, proactive and doing the best they can.

And I wanna acknowledge. I know I sent a lot of questions yesterday, so thank you. I'm sparing a lot of those questions right now. You can all see it in the documents received after the agenda. I do wanna talk about the, business license tax increase, and I know that we received something about three hours prior to the meeting.

So I haven't had a chance to dig into it right, right this second, but, I I am concerned about increasing it so much where we are turning businesses away given in light of the examples I just mentioned. I'm concerned about particularly the small businesses. So if we can look at making sure we are not increasing too much on them, I not sure about the $50,000,000 bracket, but I would like to review that. The other reason why I'm concerned about increasing the business license tax too much is that, if we increase it so much and the business is closed, we're gonna have even more of a bigger public safety issue, which is gonna increase the budget on public safety and code enforcement and overtime. So that's gonna hit our budget even harder.

So I hope we are considering that when we are, identifying, what the increases are going to be. Have we thought about that as if when we were doing those, analysis of the business license tax, what is the impact if businesses were to close, and what is the impact on our budget if those if those were to close, and what is the impact of the other departments?

You know I'll I'll just say that we actually tried very hard to keep the amounts. First of all, we based on the council's direction, what we're what we have proposed so far is progressive. So there's actually for small retail, there's practically very little annual increase in the amount of business license tax, same with restaurants, which we know are on a thin margin too, our grocery stores. So we try to be very careful and and more progressive in the way that we propose the rate structure. And then second, the whole point of where we landed was, you know, using our consultant and using the direction of council to match our neighbors was very intentional.

So we don't think that what we're proposing now will impact businesses. I mean, does it increase our costs? Yes. But we don't think that, compared to where our other jurisdictions around us, we don't think that this will impact the their economic well-being and and force them out of business. So we don't anticipate what we've proposed now to to have that impact.

Okay. And then for I know there are a lot of policies mentioned. I agree with a lot of policies that were mentioned in the report in in previous years. One thing I would like the Budget and Finance Committee to review is when we have new programs, what are the ongoing cost of services of those new programs? And, I think a stronger analysis on grant funds and, grant funds that are given to partners.

Some of our regional partners that are, you know, here in the city is actually impacting our public safety budget. So, I would like a stronger analysis whenever there's a new program or if we give grant if we receive grant funding to start a program or give grant funding for a program to exist. Also, I wanna see a stronger partnership with the county and the state. They are putting services in our community that is impacting our public safety budget, and they need to pay for it. So what are we doing to offset the cost of public safety with their services here? Because it's impacting our budget now.

Yeah. We are we actively and have a great team. We're we're actively proposing state earmarks to help offset some of those costs. We're also, looking at county funding, making sure that we're eligible for county funding for measure w in particular. We've tried to team in some cases with providers on helping to get our link program funded through measure w. So we're doing we're looking everywhere under different rocks to try to find ways to to leverage county and state funding.

Okay. And I also wanna review with the county and the state for funds to be retroactive. If it's if they have opened that facility in multiple facilities here and it's impacting our public safety budget, I want us to see how we can get retroactive funds due to the impact on our our city budget. Thank you.

Council member mayor pro tem Siro.

Thank you. I know we have a long ways to go in this report, so I'll try to reserve more of my comments for later. I think, just appreciate the detail in which you're explaining what we're considering for the business license tax. I think some of the concerns that I've heard around, the way it's currently being proposed is that some of the competitor cities are also in the process of updating their business tax. So my concern is we update, and then we're at a disadvantage because we're we're setting our bar towards cities that are gonna have different numbers down the line. So I just wanna make sure we're taking into account what other neighboring jurisdictions are we comparing ourselves to and what are they looking to update themselves to so we're not behind after we go through this long drawn out process of updating because we might not do this again for another fifty years. Who knows? Right? So I just wanna make sure we're getting this right. I also just wanna, take into consideration.

I appreciate that we're not impacting small businesses with the way we're we're designing the business license tax. If in exploring the union's proposal that we had brackets for the biggest corporations, the ones that are the the the least likely to shut down and and and close because of a small margin, Is there a way for us to actually lessen the burden on the small businesses by relying more on those big brackets? I think my concern when I heard one of the comments was that right now, the still the the bulk of this business license tax is coming from smaller businesses even if we're not increasing it that much. Whether or that's accurate, I'll defer to the staff proposal. But if in adding these brackets, there's a way to reduce that pain on the smaller businesses, I would be open to that because that would be even more of a progressive tax that would bring in more revenue.

And I think the reason I I feel strongly about this is because when we casually say, you know, we're looking at measure c being even though we call it short term, it's more or less going to be ongoing for the foreseeable future. It's hard for me to stomach that because a year ago, we sat here and we we ranked choice all of the things we wanted to do to address the deficit, and we put using measure c as, like, the bottom one, like, consistently. And now we're in a position where we've had to use it multiple times at this point, understanding why. And I don't feel great knowing that if there is an opportunity for us to raise, let's say, 15,000,000 as opposed to 10,000,000 with this business license tax, we wouldn't do that because that means we're gonna have to continue to depend on measure c, which means that we're delaying capital improvement projects, and we're delaying replenishing, measure c and our reserve at the same time. So, anyways, I just wanna I I appreciate that staff is gonna look at the union proposal.

I just think, you know, we were looking at any anything between 13,000,000 to 22,000,000. If we're settling somewhere in the middle by trying to raise, I don't know, 17 to 20 with this instead because of the union suggestion, That's that's a happy compromise for me, and it means that we're that much closer to building back, both our measure c fund for capital projects as well as our reserve. So, it's a I know there's certain categories. You mentioned professional services and manufacturing. If they're smaller players, let's not mess with them.

But if there are $50,000,000 plus players in those spaces, I think they can handle maybe what the unions are are are suggesting here. So less of a question, but more so just wanting to add on some some of the nuance that I'm seeing in this discussion and my discomfort around our continued use of measure c given that we all committed to not using it, and we have really have no choice. I'm not here saying we we absolutely cannot, but I think if we're trying to tell the community in good faith, we're trying to move away from that model, we gotta go for the money that's on the table. And and not in a way that's gonna shoot ourselves in the foot, but it the unions didn't have a chance to review the proposal that we agreed to last time outside of the three day agenda publishing window. Now we're seeing their proposal, and I just wanna make sure we're taking that feedback into account. We're gonna rely on these unions to help us walk this if they're supportive of it. So I just wanna make sure we're on the same page around our shared goals here. Thank you.

So, again, thank you for all of the hard work that's gone into this budget. It's I know it's taking a lot of time and effort from a lot a lot of folks to get here. I'll be brief. I'm really not in favor of using measure c funds if it's at all avoidable. And if that means we need to put a little more effort into figuring out how the business license tax, may get us through that, I think, we owe it, you know, to our, employees to keep them employed.

Because when I say I don't wanna use measure c, I'm not talking about losing more jobs. I'm just talking about, you know, turning some more stones. And so it may be difficult, but I do appreciate you making that extra effort. And at the same time, when I talk about preserving jobs here in the city, I'm also talking about the jobs in our neighborhoods. And so, you know, we don't wanna shoot ourselves in the foot. We don't wanna pass a a license tax that's going to ultimately take jobs away. And so I appreciate the thoughtful approach that you're putting in there. But, as I'm saying, I I just hope you'll continue to do the research and see, you know, what what we can do. And that's it. Thank you.

Thank you. I will make this very succinct and brief because I know we still have a long night ahead of us. I want us to be very careful, and I'm I'm gonna talk to the council on this one. I want us to be very, very careful on looking at the business license tax as the end all, solve all solution for everything that we are going through right now. Just I wanna be careful.

And, because almost all of us up here mentioned the business tax. The letter we got today from the union, business tax. We don't even know if it's gonna pass. So we have to be very, very careful on how we talk about that and how we rely on that. I don't disagree with you.

I don't wanna use measure c money either, But, you know, but we have to. And, and it it it's a tool that we have. We're gonna pay it back. And, but, you know, I just you know, we have several tools that we are accessing, that we are trying to activate. And so, so I just I just wanna be I support the business, you know, you know, modernize.

I I know we all do, but I just wanna be very, very careful on our overreliance just as we are talking about it right now. I just wanna be careful with that. The second thing is this, and I wanna go back to, what Michael thank you, Michael. I wanna go back to what Michael said. And if you go back to the chart, the, property tax growth is stagnant while sales tax growth is volatile.

Look what happened when Bartcars started to started selling in Hayward. Look what happened from '24 from '23 to '25. That's what happened. Right? And and this is with without a BLT. Right? Now what I wanna be careful, and I and and I absolutely agree with with councilmember Andrews. I wanna be very careful. I take nothing for granted. A business is not too big to stay in a city.

And, you know, I you know, a business can close and leave. A big business, and that's jobs, and that's tax revenue, that's, you know, all of the other stuff that surrounds it. So I just you know, I I, I don't want us to think that, that, you know, we're too good for a business to leave because big ticket businesses, big manufacturers, they could very easily leave. And we need to strike that balance. We need to be very careful on how we proceed.

I do you know, I we we are listening we are listening to staff. We are reading about this. And and, you know, I know all of us up here are informing ourselves about this. And, but, you know, I just I caution I just caution that. And those are the two points I wanted to make. Before I proceed, I wanna look at the city clerk. We're ready? Okay. So what I'm gonna do is, we're gonna take a fifteen minute. We're gonna take a fifteen minute break for dinner. So with that said, media enjoyed.

Recording stopped. Recording in progress.

Okay.

Before we resume, we have okay. So, you know, it's 06:00. We still got a lot of we still have a lot of meeting left. And, what I was gonna do is I was if I look at the outline, the section of recap and updates since February 28 budget work in session, and then the next one is recommended fiscal year twenty seven budget. I wanted to do see if we can do two and three and then ask questions after three. Okay? Sure. Okay. Great. That was easy.

Yeah. Oh, the other thing too, the other thing too, I know we are in Room 2 A, and this is a rather informal, space. But I also wanted to, just remind everybody that, you know, we do have, we do carry decorum in the room, and I just wanted to make sure that we address each other by our titles and, and, and show each other respect with title first.

Thank you, mayor. Thank you. Or we I think we're back a few slides, Bren. We're at the section before. Okay. Starting here. Again, the interest of transparency, we wanted to share with you what's happened since February when we met. I full day here as well. Next slide. So we presented these this is the forecast we presented to you at that time.

I think one of the items that's important here, you'll see it later, but for 2026 as we dug in and better understood our salary costs, that number has gone up to about 241,000,000 annual. And so, we'll be talking that more with the CBFC and in a future report. But this is where we started for '27 looking at about 32,000,000, and, that did stay that $2.50, I think, we're at $2.48. So we did have some savings there, that we were able to to pull together. And

going to

the next slide, we, that included employee cost living adjustments. That did not include some of the one time funds. It did include the CalPERS costs. We can change those unfunded liabilities, but we do get savings for, vacancies that we're not paying for CalPERS at that moment anymore. And, again, we've really done a great job of forecasting, worked really hard with the specific department heads, with the budget team, Fran and Nick. I spent a lot of time working on pay cost, costing pays, again, also with the p police and fire departments. So we understand those pays better now, but wanted to just understand. And, there's still a structural deficit. We've talked a lot about that, so we won't spend much time there. We're gonna cut use these slides to catch up a little bit.

Next slide. So we talked a lot about the the wait.

I think I missed it. One one back.

There we go. Okay. So, again, our approach was to include revenues that are likely and not dependent on the voter approval. So we don't have the business license tax built in here. We are still using short term funding. We're still talking about measure c. We're using some money in our OPEB trust. We're using funds out of our workers' comp, a fund balance, and cash balance. We're using cost saving measures. They are gonna have a service impact.

You'll hear that from the department heads as they speak. And we're allowing for costage of department restructuring. So, you know, instead of laying off more positions, you know, if there's natural attrition, the department may choose to do a different type of position coming back. So instead of we've reduced their personnel authorized, but not the specific titles, and, you'll see that in the books. And we'll be maintaining that through, HR and finance to understand, hey. This position was meant to be held vacant. Are you trading it for something else? We're working through that. We'll be working through that throughout the year. Again, we've talked about the business license tax.

Really, again, wanna thank the bargaining units, this concession bargaining. They really all came to the table and all it was six groups. The unrepresented accounts appointed officers all agreed to COLA deferrals, reductions, overtime cost saving measures. This was $7,500,000 in savings, impacting the employees' personal bottom line. I talked a little bit about what we and what we had to do to build the budget, go back to that slide, was we had to look at the actuals and go work our way backwards.

So instead of looking at just the budget, we had a lot of salary savings baked in. We had a lot of unknowns, things we didn't understand about our salaries. So we started with actual payrolls after we did a number of these adjustments. So after the overtime savings, after layoffs, after voluntary separations, and worked our way forward and then backwards to see what does that look like into next year. That was that was a lot of time, a lot of investment, and it did increase our employee cost projections both this year and next year.

We did update the fee schedule and cost allocation plan. The cost allocation plan allocates cost of central service departments like finance, HR, city manager, council, and it also allocates cost to departments that charge fees. So those fees, address those types of costs, both the department's internal overhead, like their executive team and administrative team, and the department's external overhead, which is the central department. So we updated that fee schedule. You heard that in April.

We made some minor adjustments to utility user tax ordinance. We expect to be getting some letters out to streaming providers in the next couple of weeks looking, to get collections, for next fiscal year. The case with Disney has, the state appeals court declined to hear their appeal. They do have the supreme court. They're not expecting that to continue, and so many agencies are going forward with with working on collecting UUT.

Again, we did not include that in the budget. It's still an an, unknown. We're not quite sure how much we'll get, so we're we're going to wait and see and then look at that at midyear. And looking at, actively marketing the South City properties, and those are intended to go towards restoring reserves. So with that, we're gonna get into our fiscal twenty twenty seven budget. I wanna introduce Nick. I know you've all seen him before, but he's going to, present that budget for us.

Good evening, mayor and council. Next slide, please. So I'll be going over the recommended fiscal year twenty twenty seven budget. A lot of this we've kinda touched on before, and I'll get into some of the some of the actual numbers on the next slide. But, again, we have a $249,000,000 proposed general fund budget for next year that is balanced.

As city manager Ott and director Hill Ranch mentioned, we balanced, we were able to balance the budget primarily, through some of, some savings that we were able to identify in other funds. These are one, onetime transfers that primarily came from measure c, workers' comp, OPEB trust, and our grant funds. Again, because of the use of those other funds that leaves us with a continual structural gap of about $30,000,000. Without utilizing those funds, that's the deficit that we would be facing, this fiscal year. Our salary and benefits numbers, which you'll see on the next slide again, as director Hillbrands mentioned, we kinda work backwards based on our actual spend and taking into account, some of the savings that we realized from the concessions that our our labor partners made.

Thank you again to all of you even though you're not here, for the work that you guys did to help us balance this. And you'll also recognize that there are some increases that we had to change the budget to account for some of the pays that historically we did not budget for, education pay, some of our leave cash outs, continuous service pays. These are items that historically, again, were under budgeted, so we wanted to accurately budget for them based on our spends for this year and, again, account for, any changes to benefits that we saw coming up for the next fiscal year. And, again, for the forecast for fiscal year twenty seven, we did not include any, revenue assumptions for business license type passing. That's just to be safe and ensure that what right now, what we're adopting is something that we can actually fulfill.

Next slide, please. So here are some of the numbers around our fiscal year 2027 proposed. I really wanna focus on the transfer in piece, that when we talk about that $30,000,000 structural gap, that's what we're referring to. For the ongoing portion, about 60% of that is made up of cost allocation transfers, so that's essentially what our other funds are paying the general general fund for the services that they're providing for the city. That is something that hopefully we'll continue to see, but, again, that number can fluctuate a bit.

For the one time transfers, that is the major portion of how we were able to balance this fiscal year. Of that '26, it's made up of three pretty large buckets. Measure c, similar to what we did for fiscal year 2026, we transferred, and we're gonna we're proposing to transfer until $10,000,000 from that fund. We had some available cash balances in our grant our grant funds, amounting to about $5,500,000 that we're transferring in. And then, again, as director Hilbrandt's mentioned, we are, transferring funds from, workers' compensation.

It's about $4,900,000. And while we do have available fund balance to support that, there are risks associated, as she mentioned. You know, if we get a large a large settlement or anything like that comes in, that's where that's something that we can't continually rely on. Yeah. That's fine.

I'm just gonna take one second. Also, the staffing charge outs, this was something different from me, so acknowledging. This is primarily the public works department engineering. Sorry. This the staffing charges is primarily the public works engineering department. So there's a credit as they charge to measure b, or capital projects. So they really work to to bring that in. It's it's over 90% right now, and we expect that to continue. Maybe it would go up a little bit. Alex is targeting a 100%. So, really wanna recognize that they do make sure that they are, moving that. And that did with the fee schedule that adjusted those rates that they're charging out, and that was part of that increase. But, also, recognize the staff is really making sure their time gets, allocated as well. So I wanted to just explain that and also acknowledge it.

And then one more thing for this slide. I believe it was council member Andrews that asked about the our or maybe council member Bonilla that asked about our, salary and benefits percentage, to our revenues. You'll see here it's listed at 81%, but, again, if you take out all of our transfers in, that's where you get that 91% mark of what our salaries and benefits, make up of our revenues. Next slide, please. This pie chart is just a representation of the numbers that you saw on the side, on the side of the previous slide with the revenues.

One thing, again, to point out that, city manager Ott mentioned earlier is that property tax, which is our our major revenue source, it is stagnating. So, you know, our our forecasting for that is representative of that, of that occurrence. Next slide. And then here are our general fund expenditures by department, as you see, primarily in our public safety departments, which is similar across other jurisdictions. Questions? I think that was two and three. Right? I'll stop there. Okay. Questions?

You want to start to my left? Okay.

On the UUT, you said it's 10% of the revenue. Is that, is that a new budget forecast or is it, like, what what were you what have we been historically on the UUT? Just wondering if that's accounting to the potential data system in the future.

It has, it does account for a little bit of new data center. It does not account for the streaming revenue.

Correct.

So a new data center will have higher electric costs, so that will bring in some new UUT that's baked in. But, the the streaming from providers to provide streaming services is not included in that. So that would be new revenue if we receive it.

Okay. Great. And then the other one, that I was wondering about was, you know, you mentioned, Nick mentioned or sorry. Director wait. I sounded like your title, Nick. Sorry. I'm sorry. Analyst Mullins. Thank you. Mister Mullins. Yes. Thank you. I appreciate it. Sorry. I know he talked about decorum, and I was I'm such a terrible, like, first name. I know I do it to everyone. I'm sorry. I apologize if I was the one being disrespectful. So, I even, like, nickname people. It's a you know? So I will get better. Sorry, mayor.

What's my nickname?

No. Meaning, I shorten people's names. You see now? I'm a a name shortener, maybe more than a nickname or a name shortener. Anyway, so you mentioned that, you know, we had pays that we didn't budget for. Right? Like like so I think just going back to the lessons learned, like, that's a shocking you know, we found that out just weeks ago, right, maybe a couple of weeks ago. So you had another thing that sort of lived between budget items. Is that right?

So it's one of the things that we brought up during, the February 28 work session.

Okay. And

I

believe November 2025, basically realizing that one, yes, we were over budget, but here are the reasons why. And one of them was because we weren't accurately budgeting for overtime. There were these pays that we weren't accounting for. And so one for this fiscal year, you know, figuring out what we needed what we needed to do to make up the gap for that. And then going forward, making sure we can accurately budget for those, which, again, shout out to the team, management analyst Hatfield, acting deputy director Barnes, senior analyst, Ellie Local.

We had a whole we had a whole team going through we had a whole team going through all of our pays to make sure we were getting everything on the books.

It's not just me making it. This

is is difficult to remember, to get everything on the books to make sure we were budgeting correctly for that.

Great.

It's not something that we had done previously.

And right. So we never did that before. Right? So that was always sort of not in our structural budget, I assume. Right? Or or, I mean, we weren't. So was it always just made up by salary savings? So, like, this magic salary savings seem to sort of have just blanketed a lot of of like, there was a lot of oversight because of the salary savings.

I do think that was part of it. Like, historically, I've been in finance for almost seven years now. So I think, one, it was just general oversight, and then, two, the assumption that those overages would be covered by Okay. Salary savings.

Okay.

Even, you know, we had prior discussions about budgeting for those items, but, unfortunately, we were never able to get to a point to actually do that.

To actually put them in there. I mean, I'm glad we're learning. So thank you. Thanks, Francois.

Thank you. Good report. Eventually, we will see numbers regarding overtime sometime in some later slide somewhere.

I am not sure if, we may have it called out, but I can tell you for fiscal year twenty twenty seven, the total overtime budget is at $8,000,000. Initially, we were at 14, but, again, thanks to our folks primarily in public safety. Okay. That really helped us out. They we were able to drop our our overtime number pretty significantly by some of the concessions that

Somehow, I would like to see it somewhere in line. I remember seeing in previous years $92,000 for overtime. So I wanna see it in the line somewhere in some slides. Sure. So thank you. Great job.

We could bring that back with the adopted. Alright.

Thank you. Yeah. I just wanted to thank you for all of the hard work that you've done to put this together for the council and for the city. And also just wanted to express gratitude to our labor partners really stepping up and helping us with concession bargaining and get to this point where we can reflect on a budget that's balanced. We still have work to do. Also, just following up on the prior conversation, I I wanna say that I do agree with the mayor that the business license tax isn't the end all be all here. When we look at the slide that was presented here, we're looking at generating, $11,000,000 annually with the current structure out of a $30,000,000 deficit. So that means we have 19,000,000 more dollars to cover annually. Right? And then if we're using 10,000,000 measures c, we're looking at another 9,000,000 we have to close.

So I just wanted to put in perspective, like, if we continue to use measure c the same way, if we keep the business license acts the same, we're still looking at 9,000,000 that we have to consistently figure out how to close year after year. And we're pulling out all the stops right now to try to close this deficit. So just wanting that number to kinda loom large in our head. What are we gonna do to close that remaining 9,000,000 year after year? And how are we gonna reduce the 10,000,000 we're pulling from measures here year over year? Thanks.

Okay.

Great. And I think we get the slides what's happening? Thanks. I'm gonna I'm gonna be doing your next session. Assistant city manager Thomas. So so this is moving now into you just you just heard coming fiscal year twenty seven, and now we're trying to talk about the next five years moving forward. So that's my my section here. We're really thinking about future budget considerations. A lot of this is gonna be repeat based on what you just said, so I'm gonna go quickly. But in short, per council's direction, we're gonna bring back the BLT to put on the ballot on June 2.

The the new thing about this slide that I will mention is staff is recommending, as as we've heard, we're not putting that in the budget for this year. So if it does pass, we will get that money this year, and we are recommending that that money go back to replenish the general fund reserve. And at the current level, current proposal of $11,000,000, that's about a 4.5% reserve level. So that is, yeah. Next slide.

So on the next slide, you're gonna see a forecast. I'm presenting it, but this was done by all the finance staff, so thanks to them. And so what you're gonna see on the next slide, yeah, it's it's an updated forecast. We put in business license tax modernization moving forward, so not this year but the the following years at $11,000,000 additional. And then we did put in the utility users tax revenue at $4,700,000, moving forward, from streaming.

And then we do we did, and you'll see why in a second. We are continuing to use measures seen OPEB, through fiscal year thirty, which is the range of our forecast, and that is, when the when all of the current contracts, the two the public safety contracts end. So that's that's the forecast we're doing here, and we're we're proposing doing the full 13,000,000. So 10 from measure c and three from OPEB trust. So that's what the assumptions are.

And then the expenses side, we are continuing to assume, and this is not certain, some level of fire and police overtime reductions. So that's we're we're putting in things that we think are possible or likely just to to try and show a realistic picture. We also are including the contractual COLAs that we currently have currently have, and then any years we don't have one because the contracts are up, we're putting a 2% in. And then, we are continuing continuing all current vacancy savings, so this does not include hiring back any of the staff that we are currently not hiring for. And then what we're putting in a $6,100,000 annually to workers' compensation that doesn't fully fund the workers' compensation to the level we'd like to, but it is, so as as management Alessimals was saying we have, some risk there that if we have a huge settlement, we do have some risk there.

And then finally, there'll be there's annual increases in other categories two to 4%. Next slide.

So I

oh, is it frozen? Should I try it with this now? There we go. So what that results in is, as you can see, we've gotten through we've gotten through fiscal year twenty six and '27 balance, but there are a lot of short term or one time use there. And following three years, we're looking at 7,000,000, 10.9, and 13.1 gap.

So not we would still work to do. That said well, actually, done so we can go return to the slide if you have questions, but let's go through the next slides. So we are this does we do think that there's likely revenue increases about $60,000,000 last next year, so that does help us. That's why you're seeing it drop. And then in addition, as we've already mentioned, item two and item three.

So what the other thing that we wanna mention is that this this this the current economic forecast is quite stagnant, and that is we're using our consultants forecast and does not they're not putting in increases in the future years. So that is one thing we're gonna be monitoring if we do start to see more economic growth that would help with this situation, but this is with a kind of a stagnant economic growth for the for the next four years. Next slide. So we, as staff, are continuing to hold this based on feedback from council. Our future budget priorities is rebuilding the reserve.

As director Hilbren has mentioned, there was both from sales of property, as well as if we get any additional windfalls or if the economy starts to improve. We are holding in mind measure c funded, priority capital projects. I'll go over that on the next slide kind of what that could look like and then restoring any negative cash balances we have in other funds. We're keeping that, all tally we heard tonight that you guys want to see all the cash balances for funds that will be something that will be presented at a future meeting. Next.

I think I would add related to general fund reserves. That's the most flexible set of funds we have. So if we have a situation in an internal service fund needing funds, having the general fund with the flexibility to contribute to that is more flexible than than if it's sitting there. We can take it back just as we have, but taking back requires distributing to all of the funds that put in. So the having the general fund have some accessibility reserves is what we're aiming for.

Next slide. So from a recommended approach to measure c spending, this is actually slightly different than we we looked in the budget book and there were some more capital expenses that, that we're not planning on that we took out. So, so this is what we're currently looking at here. Essentially, what you're seeing is the ending balances we're slowly spending down until we hit fiscal year twenty three in this is, like, you know, the plan that we had in that forecast. And then we have starting in fiscal twenty three thirty one, seven million dollars available for capital projects. This was not sorry. This was added per a council member request. This slide was added. It's not in your packet. Next slide.

Yes. Mhmm. So what was in the budget book did not include the begin the beginning and ending balances, so we wanted to include that here so you could see the full picture. Oh, and then the other so what what how this has changed actually since last time you saw it is that we down our consultant recommended down downgrading our revenue forecasts by quite by you know, because of its sales tax, it's the same as our general fund. And so it's more the lower revenues than last time you saw, which is why it's looking, depleted faster.

So measure c funding is being used to pay down current debt?

Debt for projects that

were funded out of measure c, so like the fire training center and the library.

Okay. Okay. Thank you.

We'll start rebuilding the measure c

reserves or reserves the right way.

But the the balance for measure c will start being built in 2031 based on this recommendation.

Based based off of this forecast, that is what we're looking at. Yeah.

And I just wanna if I could just I'm not sure it's a recommendation yet. I just think we're we made some assumptions for this as a forecast just so we could show you something. I think I think we still have a lot of work. We wanna see how the economy recovers, but this is kind of a likely forecast for now. So I just wanna be we we're not right necessarily recommending this yet.

The the language is his recommended approach.

That's why

I asked him. It's okay. Thank you. Yes.

I just wanted to clarify that. Okay. And I think I just want also clarify my earlier comments around just seeing if we have any more wiggle room with the business license tax because in my mind, the the more we can get from that, the the sooner we can get back to replenishing our measure c balance and upholding our commitment to the voters. I know that we've said before, I mean, k one was 2034 onwards, so we've hit our objectives for measure c. But I know that folks have been waiting on these projects, and we're talking about beginning, you know, four years from now, and that's that's a it's a long time for some folks to wait. Mhmm. So just putting that out there.

Thank you.

Okay. Next slide, please. Thank you. So I'm not gonna read through these

oh, yeah. Go ahead.

Sorry. A sincere manager, Tom. I was gonna also, you know, mention the same thing about measure c. You know, the quicker that we can get off of measure c funding, the better it's gonna be because I think we really kind of do need to look at how we're reserving that for capital. So and I and I totally heard what the mayor said, which is, you know, the BLT cannot be the only place that we hang our hat.

So, you know, I'm continuously looking for creative solutions as well to see where else we might be able to either cut cost or generate revenue. And to council member Andrew's point, just being really thoughtful about how that VLT is applied because the last thing we wanna do is, you know, chase away a big source of, you know, sales tax revenue because we, you know or or business license tax or whatever because we're raising things too high. So I do think it's a fine balance, but whatever we can do to continue to find, you know, revenue sources, grant sources, or whatever to lessen the reliance on measure c, I think, would be good. And then the other thing is when it comes from pulling from workers' comp and other funds, you know, has has there been any second opinion on, you know, the risk associated with that? And, you know, are we taking too much risk, or, you know, are you guys comfortable with that risk level?

And it looks like we're gonna continue to hedge on that risk by pulling forward and pulling from it in the future. So I just wanna understand, maybe not right now, but a little bit more about kind of what that financial risk posture looks like considering we're saying that there's some risk here, but just saying that is is kind of hollow. So I really wanna know what that risk looks like.

Yeah. So it's it's set based on actuarial level. We can take some more time with it in a in a future discussion. That said, it's it's similar to pensions where you can be, you know, at a 70% funded level, a 90% funded level. So we're not at the confidence level that's ideal. But the actuarial is saying if every claim that could have been filed by the end of a particular fiscal year had to be paid out in this moment, this is what the cost would be. So that's, so we're going to be below that level, but, reasonably, those things take some time to resolve. So we're working to rebuild that over time.

Can just add to that? I think the other thing that gives me a little more comfort is that, b, we do have the vote of the business license tax coming in. So to let's say, you know, assuming that it looks like, you know, the voters are favorable to that and that passes, that will be money that will be in the reserves to kind of be in risk mitigation. We'd like to have those as reserves, but it also gives us a little cushion next year assuming that it passes. So we do have some kind of mitigation measures on the horizon, which also gives me a little comfort.

Got

it. But but that would just be essentially that that that short six months is what we would get because then the rest of the BLT is gonna be consumed by the expenses in the budget still leaving a $7,000,000 gap we need to close. Right?

That's correct. Although we will start in the forecast, we start funding the workers' comp. We don't draw down on that further, and we start funding it, you know, 6,000,000 and then about $78,000,000 in future years. So we start to replenish it. I don't think we're at the level that we'd ideally like to be, but we are starting to put money back into it in 2028 and 2029, or at least that's what we've assumed in the forecast.

Thank you. And then I I just want to say I also support the idea of putting that, you know, six months of BLT in the reserve. Great. Great recommendation. I

think I'll add for the BLT. The way it's billed is it's billed primarily in January, February. So we would get during the next fiscal year a full year of that new revenue. And then in calendar year, the next in calendar year '28, it comes in again. So we won't just be recognizing half of that new revenue. We'll we'll recognize the full amount.

But we're only gonna be able to bake the half of it. Right? Because then the other half is gonna be baked into the budget that we're looking at in '28, right, or '27?

No. We look at it based on receipt. So then the '28 budget would be the the full amount that's collected during during that fiscal year.

Thank you.

Councilmember Syrah,

the middle of the year. K.

We have two more slides.

Just wanted to echo what councilmember Bunia said and some of other colleagues around, if the business license tax feels like it's maxed out, which I still think we have some room to look at it, but I am curious about long range planning around future measures. So, in twenty twenty eight's election cycle, what would be a viable revenue measure that we might be able to pursue that other cities may have implemented successfully? 2030, do we have one? Maybe having maybe a menu of, like, three options that we can look at in the coming years to begin to think through and and co develop with the community or and with business owners so there's not opposition to another round of revenue generation, I think, would be helpful. But just doing some of that long range planning, and I I know that, some of our labor unions in the past I think Fire had mentioned some different kinds of public safety type taxes, but I think there are taxes that'd be worth exploring so we're not resting on our laurels after business license tax passes, knock on wood.

Yeah.

Yeah. We we have started those conversations. I just didn't wanna since we're still talking about a measure this fall, I haven't put those in the slides, but we are having some of those conversations.

Council Member Koretz?

Yeah. Just really quickly going back to the business license tax and the reserve policy. So so the, so the intent, and I supported it to put the potential forecast of $11,000,000 if if it passes into the reserve. And is that, is that something you would hope to continue doing for the few years out and continue using that money for reserve?

No. Because because we've balanced this year's budget or fiscal year twenty seven budget without depending on it, we we get kind of a one time Mhmm. You know, $11,000,000 Okay. Almost windfall or, of the business license tax in that year. So we can put that in reserves. Going forward, we have to use that for operating Okay. To offset our operating expenses.

Okay. I see. And then is that is the business license tax, baked into the forecast starting in 2820? It is there. Okay. Thank you.

Okay.

You mentioned grants. Are there any of the grants that you're expecting to pursue gonna be something that offset operational costs?

That's a great, transitional to back to the slide. So the next slide was on grants. So thank you. So so yes, in short, you can see for the first I'm looking at for several of these, they are they would be allowing us to not spend general fund funds on these activities that we wanna continue and use these grant funds instead. So here I'm not gonna read through these right now.

Should I can I get just do one more one more slide and then I'm done with my section? But we can go back to this if you have questions. Next slide, Fran. And then finally, and I am gonna spend a moment of time on oh, is it frozen again? There it is.

We do have some risks that are mostly coming statewide right now that do put us in a potentially difficult position. So just wanting to highlight this for so for everyone's awareness. There is an initiative that has qualified for the November 2026 budget that would reduce the local real estate transfer tax by by a lot, basically threatening up to $11,000,000 for the city. There is also a competing legislative amendment that would require this initiative to pass by two thirds, but that is something that would cause us and others in our region a lot of pain. There's also a pension legislation to reform our PEPRA for public safety, basically reversing some of some of the PEPRA reforms from before, so lowering retirement age and higher, benefit multipliers.

So that is going through the the legislature right now. There which would have, potentially increased pension costs for the city. There's also, a potential initiative that is not yet qualified, I believe, don't but there's a potential initiative that would exempt homeowners age 60 plus from property taxes which would have a large, yeah, local revenue loss about 10 to 16,000,000 and then there is another potential initiative that would would basically, reinstate in a rule where if you inherit property, you don't have to get it reassessed for property tax. So that also could have a big impact. So just, you know, leaving on that positive nose.

Hold on. Before you right. I'll put your name down. Is that

That is the last slide. Yes. So we can yes.

Now Council member Andrews.

Okay. So toward the previous slide

Yes. Go back to the the grant slide. Grant slide.

Look at this one.

So, do we have some policy

already? I know

I asked for this before, but some policy to make sure that we are not creating new positions with programs. I know with ARPA, that was like, we were doing the innovation, lean innovation stuff, and then we were looking at putting positions, and then it was winding down and same with, other programs. But, you know, for the public's perspective, they don't know those things are winding down. They just see us see it as, you know, layoffs, and and it's very painful. So I just wanna make sure that we are putting a policy in place that sometimes, you know, we might have to say no to grant funds and just it it may sound good, but maybe we have to say no in order to benefit the city in the long run.

Or do we have anything that

But we can I don't know that we have a formal policy? I can tell you informally, we've been very clear that we're not pursuing any grants that add, staffing. In fact, what we're trying to do is find funding that allows us to offset Mhmm. Or, you know, offset some of our existing costs. So for instance, the link program, we're we're putting trying to get state earmark funding to offset the link program, which is our mental health, you know, the kind of the offshoot of the heart program or kind of subset of that.

And we're putting that as our first priority so that any way we could get state or federal earmarks to offset our operating costs, we're trying to do that Okay. Which doesn't necessarily structurally because it's temporary, but it allows it gives us some wiggle room or gives us a little bit of, pause over the next couple years or a benefit over the next couple years until the economy starts to recover and we have a better handle on what our longer term outlook looks like. Okay. But we I'm happy to look at that as kind of part of our policies.

I would, again, stress the budget and finance committee to look at a policy that at least come to council just because I'm very I know I I just I'm concerned about us in the future getting excited about funds, and then we're in the same situation. So

Yeah. We had some draft policies in addition to the you know, we're kind of working off the ones that were in the back of the budget book, and we proposed some to the council budget finance committee. But we just with everything going on, we haven't we didn't bring that forward as part of this work session, but we're working on them.

And then for the next slide, I know there's been a lot of discussion about unfunded unfunded mandates and that impacting, just in general, a lot of, cities and special districts. So I wanted to see if that is also included in terms of any anything, like, related to our fleet management or anything like that that's gonna impact our budget in the future.

Yeah. We can we can check-in. So we have, some legislative partners that are tracking those types of things. We'll check-in specifically on this to see if we see any big unfunded mandates in this in the legislative packet this

Yeah. I would yeah. For maintenance and public works and fire PD, I I'm assuming that there might be some that we may not be anticipating that might be something that our lobbyists can look at now, because people are drawing up letters of support or against, some of these unfunded mandates. And now for these attack mandates onto our city budget, and I've I've already reached out to our state legislator on some of these, but we should start thinking about letters regarding these specifically. When will we have more information to know what we need to do to mobilize as a city against some of these if we feel like they're not gonna be beneficial to the city in the long run?

Well, we've we're already working with our state lobbyists to act proactively, kinda advocate against these measures. You know, the property transfer tax reductions and initiatives, so it's, you know, it's a little harder. But the certainly legislation, we're we're trying to at least educate like, our legislators that what the impact is and how precarious a lot of our city financial situations are. And I know I've been in touch with other city managers that we're all kind of wanting to make sure that everyone understands how precarious we are. You know, our financial situations are in this a lot of these could kinda tip us over the edge a little bit in terms of, sustainability.

So we're we're trying to advocate. But I think, you know, we're we're writing letters or things, but you're all you know, so we're doing a lot of that through our state advocacy.

Okay. Thank you.

California cities, wholeheartedly. Oh, councilor Bonilla. Oh,

thank you. So just to clarify, city manager, did that that first initiative that was on this slide, if you can put that back up, was was is that gonna be on the ballot this November?

Yes.

And it basically so, yeah, so to council member Andrew's point, I mean, are when are we gonna get a plan to say what we need to do to, like, mobilize or start talking against this? Because, I mean, if it's gonna be on the ballot and we know it's gonna have this kind of impact, don't we want voters to kind of vote against it? So I'm sure there's gonna be some kind of campaign that we're gonna have to do in a coordinated way, right, that we're gonna hear about later?

Yeah. I mean, Cal Cities is Not

today, but at some point.

We can provide more, but Cal Cities held a phone call with, you know, the city managers and finance staff, and so we participate in that. And Cal City is is, you know, actively ramping up for this. And so we can can we can brief you on that more, but they're they're kind of watching it. Would they think it's probably the intent is to try to get some sort of negotiated deal or state, you know, legislative fix of some sort. But Calcities is actively, watching this, and we're we're tuning in to Calcities. But happy to bring back more information. Yeah.

And one one thing

I mean, that's that seems like such a big impact, $11,000,000.

Yeah. And these are and, you know, these are voter approved measures. Right? So there's kind of a the 55¢ per thousand is what everyone has, and what this does is essentially and we've you know, the city pursued a voter voter local measure, so it's kinda rolls back, you know, voters. So we're also talking about potential legal I've already talked with city attorney's office and and with other cities if that does pass, looking at some sort of legal approach as well.

Any other charges that Yep.

Thank thank you. And then the the other ones the other three here are pretty much, like, potential that we're on. It's kind of on the watch list, but the first one seems like it's gonna be on the ballot. Right?

Yes. They've already I think they have all their signatures, so it's definitely going to be on the ballot.

The second one's not ballot.

Yeah. The second one's just state legislation. And then the other two, I don't think have qualified yet.

Thank you. Thank you, mayor.

Okay. Seeing no more, I will, I just hit

the first slide.

So I

will move on

to departmental impact and considerations. And

Give me the I think I'm gonna introduce these slides, and then can you just hand me the clicker?

The clicker. I'm sorry.

That's okay. So I'm gonna introduce so we did we're doing something we're doing something a little differently. I know that in the past, it's been departments have talked about their accomplishments and maybe new staffing and other things, but I think that just in talking with employees and department heads, I mean, think they're just wanting to acknowledge that things are really tough right now with a 15% reduction. Everyone's working very hard to maintain as many service levels as possible, but there also have been service impacts. And we're also being really creative in terms of efficiencies and looking at revenues more carefully.

And so I think this we changed a little bit and so each department's gonna walk through a little bit some of their service impacts, some considerations, programs, efficiency measures to kind of, you know, to give you a better handle on what they're doing specifically in their department to try to address where we are right now, in the circumstances. So, let's see the next slide. You know, we have we've held 90 positions vacant, so reduction, you know, about 15% pretty significant impact. And so here are examples. We're gonna get into more of these, but just we are having impacts. These are examples of those, and so now we're gonna have each department head go through that.

Starting with me. Alright. Good evening, mayor and council. Thank you for the opportunity to present tonight. We can go to the next slide. We'll start get right into it. Some considerations and service impacts for the police department starting with staffing adjustments and overtime reductions. I think everybody's familiar with our pursuit of the ability to change our patrol schedule and the beat structure which we've accomplished in partnership with POA. And we have also put some stringent guidelines around, you know, overtime and so we've recognized or realized some significant financial savings there. But it has impacted our capacity for follow-up investigations, community engagement, training, sworn professional staff, those areas of our operations have seen some reductions.

Unfortunately, we have to say no to some of those things. In addition, some of the temporary employees that were separated, You know, we are, I think, one day a week, the last Wednesday of the month, we have to close the front counter. Our prop our records division needs that time to be able to catch up on some of the legally mandated work that some of our temps were performing. So we are seeing those impacts in the police department. The good news is that our recruitment pipeline is open, but we still are struggling with vacancies that remain.

So we are recruiting for sworn and critical dispatch positions, but we anticipate staff separations and that could quickly widen the vacancy gap impacting service levels and response times for context. I think right now today, we're sitting on 48 overall position vacancies of the police department. 27 of those are sworn police officers and 21 are professional staff including dispatch. We do anticipate up to 14 retirements this calendar year, but I think we have 26 sworn employees who can service retire today. So we are gonna see those impacts potentially in outlying years.

Vacancy management could delay promotions. There's a critical need for us to start succession planning. I can say that Based on some of these anticipated retirements, for context, we have five members, myself included in the command staff. Four of those folks are service retirement eligible today. Next year, it is likely that our deputy chief and two of the captains will service retire and so we're gonna have to replace those folks with people and get people trained up to be able to assume those responsibilities in the police department.

There's a cascading effect that goes down through the rank structure where we're gonna have basically new at every position. We need to get people ready to take on leadership and move this department forward. We do have an organizational need to leverage technology solutions not only to maintain and even in the midst of these challenges improve our operational efficiency, but to be mindful of safety and crime reduction outcomes, we feel the need to pursue tech to help close operational gaps created by human resource limitations. In spite of all of these financial operational challenges, we are continuing to see across most crime categories consistent reductions. We pull data going back three hundred sixty five days from May 4 and we're experiencing a 23% reduction in homicides, 20% reduction in burglaries, 35% reduction in stolen vehicles, and 28 reduction in robberies.

Those are pretty significant categories. And I think that's a combination of great work by staff, some of the tech solutions that you all have authorized including our our ALPR program and the appropriate prosecution of some of these cases. Next slide, please. Some of our key goals for fiscal year twenty seven are gonna be highlighted here on the next slide. Starting with our annual CLIA accreditation, we have to do that every year and that ensures that we continue to meet national standards and best practices.

I will share that there is also now, starting this year, a state accreditation through the California Police Chiefs Association, a partnership with Post. We are exploring state accreditation on top of the CLIA accreditation. I'm confident that we'll get there at some point. We are realigning our jail operations. I know that's been a topic of conversation.

This includes a partial closure of the jail during non peak hours. We've done some data driven work to identify what those hours are and that will allow us to repurpose some community service officers to other programs without overall workforce reductions. We are going to be, July, implementing a parking enforcement program. Parking and abandoned vehicles continue to be a chronic complaint that we received at the police department and we'll now have some staff to be able to strategically address those. This is this includes, you know, parking in the downtown of Tennyson Corridors, parking related to timed parking, which is primarily in the downtown corridor, and so that work will begin in January July.

And then we are hoping to supplement existing UAS our our our UAS program with a drone as a first responder concept. We wanna make sure that we adhere to establish policies and guidelines around u UAS usage and community privacy. We recognize that that is an important element of that program for people in our community. We wanna be mindful of that. But this will also allow us to repurpose CSOs from the jail and to maintain or improve operational efficiency including response time, situational awareness, and community and officer safety.

We did do a pilot trial run last month for about four weeks, and we're gonna be discussing that further on Thursday, May 14 at the Council Public Safety Committee and then at the council meeting on June 16 during our a b 41 military equipment presentation. We'll talk about that in-depth. And that's the end of my presentation. I'm happy to answer any questions.

Thank you for the presentation, and thank you for all the great work that your department is doing. It's, really encouraging to see crime reduction across the city in these major categories despite the difficult situations we're dealing with, financially. So I appreciate the work you and your team are doing.

Thank you.

I just wanted to give a comment on the parking enforcement program. I've shared a little of this feedback with the city manager. We have to consider the needs of the residents that actually live in the downtown core as well. So as we're rolling out this pilot, being very mindful that let's say someone lives in the downtown core, they go take BART to the city for one day, they come back and have a parking ticket all of a sudden even though they live in that downtown core. So having a clear plan of action for residents that live in the enforcement area and how we're communicating that to make sure, you know, working class folks aren't hit with a unjust fine.

And then I I know part I think my question or my request would be, you know, what is the best venue for the general shape of this program to come before the council so the community has a chance to understand it, and we have a chance to wrap our head around where enforcement's gonna take place, what it's gonna look like. I I know there's been conversations in the background, but when when or where will we be seeing that?

Yeah. I mean, I think because it's a we have the existing parking limits, we weren't planning on bringing it. Of course, the council can direct us. We could do that. And we wanna start July 1 and try to generate the revenues. I think we'd try to do it. June 2 is the budget, so I guess we could talk a little more on June 16 if the council wants to direct us to do that.

Do we have an infrastructure before July? No no infrastructure? Okay. Okay.

At your direction, we can try to bring this back June 16 if you'd like. I mean, I I've taken the comments. I think the I think it's a really valid concern. We've been really focused on making sure employ employees of businesses aren't impacted, but I I do agree that we need to make sure we're thoughtful about what do we do about the residents who actually live there and who are unfortunately, probably, there is under parked I mean, there aren't a lot of off street parking for those residences. So because there Yeah. So we're happy to look at that more carefully and communicate with the council. We can or we can you know, if you wanna officially, we can come back on June 16 too.

Okay. Yeah. I mean, I don't wanna add too much more work. I think just this is happening behind the scenes for a lot of folks that are unfamiliar with the program, so I just wanna have clarity around the shape of the program.

Yeah.

And maybe if there's some kind of, I don't know if it's we wanna go the newsletter route or have a web page that's put up, but just some place for us to be able to weigh in on what's working in this pilot or what's not.

Yeah. And so we are starting that kind of, we're having the DHIA is starting to do some much more targeted outreach to all the businesses in downtown and then what we'd for May. And then our outreach plan, we have a very detailed outreach plan for the public starting June 1. But I think what I'll talk with the team about is May starting some of the outreach to the the residences or the residents of the downtown in May too and try to get that feedback before we launch it. So we're happy to do that outreach, and we're planning on doing outreach, and we'll we'll make sure we include the the residents too.

Okay. And I think I'm to add, I think it's important to recognize it's a living program. Right? So how it starts in July is not necessarily how it's gonna look in, you know, over time. We wanna be mindful of that and we want people to provide that feedback. So we're gonna consistently be evaluating that program.

Sounds good. Yeah. I mean, I I've been supportive of parking management for a long time, but how we roll this out is very delicate because it's gonna impact people. And we wanna make sure that it feels fair in the way that we're executing it. Yep. Thank you. Thank

you. Yeah. Thanks thanks for the update. And, and I I was curious, like, how the shift change and the reduction over time was affecting, you you know, what public safety looks like now. It sounds like it is, like you said, follow following up in investigations. Do you think over time that will be absorbed if we're able to fill some of these vacancies or how yeah. Because if the long term plan is to continue some of these reductions and over time and and continue the shift change, if that is the long term plan, Will that eventually be absorbed? Is this just an adjustment period at this point?

I think as we fill vacancies, we will be able to, you know, reimplement and and do some of this work. I think, you know, we we've seen some of the we've seen an ability to do some of some follow-up investigations in certain areas of police department, you know, for longer than we've been in this financial challenging state. I think just because of our vacancy rate. Right? But that's the goal. As positions are filled, we'll be able to absorb some of the the work and and get back to doing these things because they're important to us.

Alright. Well, thanks for what you're doing to and your staff to what you're doing to juggle that while while we deal with these, financial difficulties. And then on the jail management, the jail, you know, closure during non peak hours, like, I'm sure that's hard, but it's but a creative way to save money, so appreciate that that you were able to work through that. And then on the, on the technology stuff, mean, I was able to, you know, get a a tour of that some of the new technology that you're looking at. And I you know, one of the things that I saw that seemed really helpful was just the ability to reduce some of the callouts, like like abandoned vehicles, that that is a reduction in the need of staff time and and the reality of that being something going forward.

I am really interested in, even you know, of course we have to have the discussion about privacy and all that, but mentioned in that because I could see the usefulness of that that while they're waiting for the next call, were able to go through and actually knock some of these things off the list and that prevented a car from having to go out. Is that right?

Yeah. Absolutely. There's there's a thought process and what we experienced in the trial program where we were able to send technology to a call for service, a 911 generated call for service and clear it visually without even having to send a staff member, which keeps people available for emergencies and allows our staff in the field to be able to do some of the things that, they're stretched to do now. So that's part of the vision of of being able to leverage leverage that technology.

I mean, it just seems while we're dealing with, you know, vacancies and, you know, reduction of overtime and all that, I do I do see the value in it, so I'll be interested in that that discussion going forward. Finally on the parking thing, we brought it up, we're just enforcing current parking hours. We're not all of a sudden enforcing. I'm okay with us doing it personally without a big discussion about it. I definitely think we should be doing some outreach for it because I can see that it is going to be a problem, but this has happened in other areas where all of a sudden there's one multifamily housing on Mission Boulevard, and when people first moved in there, were able to park on Mission Boulevard, but then BART came in and made it all BART parking or permitted BART parking, and that was just taken away from them.

So I think we're doing it more thoughtfully than that, but I'm not sure we need a big community discussion about it, you know, because I think you know, I I'm sure it will impact people, and I think we have to do everything we can to do that. But I don't wanna stall this process because we're just enforcing current postings. They we're just enforcing current signs. So I don't necessarily need to see us, stall that to to, you know, take too much comment anyway. That's my part. Thank you.

And thank you. I appreciate your presentation. Thank you. And I really like those goals that you have up there. The last one, I think, is not only could save lives but and time, but also, I think, some money. So keep it up and tell your, squad be safe. Thank you. Please. Yeah.

Thank you. Chief, you're doing a really good job.

Thank you.

I don't remember a time where I've seen any police department register double digit declines in five separate crime categories over the same time period. It's usually one or another, maybe two. So this is pretty stellar, but not only that, but they're not just double digits, but they're in the tens. You know, 20% declines is really fantastic. Thank you.

And I know that you're pursuing technology solutions, and I like that. That seems to be delivering some good payout. You know, I've read some of the stories about how the LPR cameras are working. I've talked to some of the officers on the beat talking about how the LPR cameras really helped them pinpoint where bad things were happening and the direction of travel and help them resolve issues. And the drone first responder program is is a great added utility, I think.

Of course, it'll take some time to prove it out, not just in terms of sparing officer time to respond, but improving overall service to the community, but also by having an airborne vehicle means that in those cases where flight does happen, we're not necessarily exposing officers and civilians to police pursuit, which I know we have very good policy about preventing that. But this adds to our overall capability to find those people that are responsible. And, you know, typically, from what I understand, those are stolen vehicles. And so it's not just helping to put an end to people racing through town, but also stealing those vehicles and bringing them through our town. So, I hope you will continue to pursue technology initiatives, and I just wanna thank you for the great work that you're doing.

Thank you.

Yeah. Thanks.

Thank you for your report. One of the questions I have is, well, it's gonna be a trend. Is there any way we can look at DHIA to offset some of the cost? They were supposed to pursue security downtown. And if we were using our CSOs to go downtown, can they pay for it?

We we can certainly ask. I think I think that's been looked at before. I think, so we'll we'll continue to ask that and pass that along.

We're we're the biggest member in that organization. Right? So Yes. Just wanna make sure.

No. I think there are a lot of their focus, to be honest, is on cleanliness, like the power washing and other stuff, but we we can ask

The CSOs will offset some of that cleanliness part of it too. Right? If because it

Well, I mean, won't be doing power washing or

anything like washing, but a lot of things that we see happen downtown. I mean, a lot of the maintenance related to that is because of crime. So right. I'm hoping that the CSO can be a preventive measure, but they can contribute to offset some of these costs.

There there is a strategy there. So we can address the parking complaints and also provide a uniform presence

Mhmm.

As a form of deterrence that was intentional. They will be in uniform. They will be in clearly marked cars. They won't say police, but, you know, there could be an an added impact downtown

for sure.

Yep. K. Sell it, I guess. And then I wanted to know if the county can offset some of the cost for the jail since we'll be not impacting their jails as much?

We did a lot of research on that when we were exploring whether or not to even keep the jail. The the county, you know, they're they don't book for free. There is a cost for us to even transport not only the time it takes for our employees to be out of the city and dealing with that process because you wait in line, you have to inventory property. There's a lot of things that they have to do at county facility that they don't have to do at ours because we have the CSOs. We have looked at that.

That was a consideration that was taken into account when we decided to make modifications. I think the hope is that because we use data to kind of frame that non peak time that we're gonna shut the jail down, there won't be a lot of need to transport out to the county. Okay. But it it could potentially happen. They're not gonna come and help fund, you know, our our holding facility, though. I've tried that.

Okay. And then are there other programs that county can help support that are in your department?

Financially, I don't know that there there are. I think right now what we're trying to do from a not only a technology standpoint but a human resource standpoint since everybody is struggling to fill their ranks is to lean on each other to address some of the regional prob problems. You know, the reset, the regional sideshow enforcement team is a perfect example of that where Hayward PD, San Leandro PD, Alameda County, CHP, and now Oakland PD are partnering on certain days. They're using intelligence to try to deter people from engaging in sideshow activity and if it pops up, they're there to address it. So there are those efforts that are being made.

The agencies that participate, you know, are the ones that are are, you know, putting the bill for their people to be in our city, helping address some of those issues. So they are doing that.

Okay. Great. Thank you.

Questions. So, oh, councilmember Bonilla.

Thank you, mayor, and thank you, chief. I appreciate the update. And echoing my colleague's sentiment, just a big appreciation for your leadership and that of everybody in the police department. Thank you. Appreciate these goals being laid out so clearly.

I do think that we should have some kind of, you know, public awareness. I'm not saying extensive or expensive, but something around these the parking enforcement because we're planning to generate $800,000 in parking enforcement annually, and that's gonna be on the backs of somebody. And, you know, we're already asking the Hayward voters to do all kinds of stuff, and everyone's taxes is going up. So whatever you know, if we can just put it in our newsletter or if we could have, you know, the downtown merchants just remind the whatever it is. Right?

But, you know, some kind of, you know, light touch, but still some sort of public awareness, you know, messaging around this, I think, could be useful. The other thing I was wondering is with the CHP coming to Hayward, are they gonna have a jail? And is there any partnership potential with with them in that?

So they they are not gonna have a I I did a tour of their facility. They don't have a holding facility or jail there. They're booking either at the county or in certain circumstances. They'll actually use our jail to bring somebody in, you know, conduct a breath test, issue a citation, things like that. So there is not not necessarily a booking opportunity for for us there.

Got it. Thank you so much for that. Keep up the good work. Really appreciate it.

Thank you.

Okay. Thank you, and thank you, chief, for the presentation. And like always, please tell all the men and women of the police department to be safe. Thank you. Our next department is public works and utilities.

Thank you very much, mister mayor. Good evening, mayor and council members. My department, public works and utilities, is fortunate to have sources of funding that are basically separate from general fund for the most part. We have for the public works side of the department, we have local measures like measure b b, measure b, the RF, measure d, the recycling fund. And on the utility side, we have enterprises, water, sewer, and and so on and so forth.

Airport is also an enterprise, so the footprint that we have on general fund is mostly about 5% or so, and we do our best to minimize our footprint on general fund. One of the challenges that I have had is receiving federal funding with your water infrastructure finance and improvement act funding $244,000,000 to do improvements at our wastewater treatment plant, which was a mandate that was placed on us, that we have to meet by a certain time. We've been pursuing this, working real hard to get this. But so far, we haven't been successful, but we have made some inroads in in in the last couple of months. We also have been pursuing SRF fund from the state, $50,000,000 to towards that.

And then we have had our first round of revenue fund, $124,000,000 that's in on hand, and I have another $90,000,000 to go. On the Le Vista Park, I just wanted to mention that we did a value engineering, which is basically mentioned a process that we do to do the park the project more efficiently, not to change the features, not to cut corners, but to implement it more efficiently. And by doing that, we've been able to free up about $5,000,000 in measure c funding that had been dedicated to this. So that's basically the complete amount of measure c funding that had been dedicated to Le Vista, and Le Vista is under construction right now as you know. And lastly, I want to mention that, unfortunately, we had some accidents, incidents in Hayward recently that involved pedestrians.

We had three fatalities. It is not unique to Hayward. City Of Fremont had five fatalities in the same period of time. But we took it upon our ourselves under your leadership to go ahead and implement some quick build solutions. We have identified 10 very dangerous or identified as most dangerous intersections that we are trying to improve.

We started with the first one. There are other measures that we are taking such as allowing pedestrians to have lead time when it comes to crossing a green light to allow them to at least safely enter the intersection. So we are implementing that across the city. With that, I can go to our goals. Yeah.

One of my goals has been to track our expenses in the department to make sure that our footprint on the the general fund is minimized. So I look at it. My my finance team looks at it on a regular basis. And right now, you know, related to our salaries and benefits, we are on par. We have absolutely no footprint on on the general fund.

But, of course, there are things like sick leaves and such that sometimes they can't charge to, you know, other revenues and those are the small less than 5% footprint that we have. Public safety center, I've had a, needs assessment done and a preliminary plan prepared. So we want to go ahead and see what we need to do, what is the best way of construction, most efficient way. Is it the standard design bid build that we have always done or is it design build which is a different approach or it is public private partnership that we are exploring right now and we understand that can make the project more efficient if you go that route. The other goal that I have is SkyWest property.

We want to work with HART as a partner to allow them to develop half of it, the western half with park and open space, one third of it for airport purposes, and the other third for economic development. So that's on my goals. Safe Streets planning is another. We have two major projects. One is Safe Streets Downtown, which is going to deal with the loop and the desire of you and community to do something about it after this ten years of, you know, what we have to deal with.

And the other one is a B and Tennyson. Concentration is gonna be on Tennyson. We want to do at least the design and then pursue grants for the $20,000,000 plus that it takes to construct Tennyson. Compost hub is something else that we are doing. We are receiving free compost from this the county, and we have to go ahead and distribute it to our residents free of charge.

So we are making a a compost hub at the community garden. You know, we have a space and a design to go ahead and do that. I mentioned, we are a a work project that we are pursuing right now, if we can get the fine funding for phase two. And payment condition is the last project that I want to mention to you. It was the stated desire of this council ten years ago to get to PCI of 80.

But the problem is that at that time, $80,000,000 funding was necessary. We haven't asked for any general fund money, and we've been able to increase the PCI every year, last year to 78. This year, I shared with you my plan is to hit PD as you have challenged me and the department to do. And with that, I'll stop talking. Thank you.

And I

just wanna say that, if I read the chart right, we started at 66.

Yes. Mhmm. Yeah.

Just saying. Okay. I didn't see any hands, but, councilman Roots. Yeah.

I'll start if notice. Go ahead. First of thank you so much for reminding us that, on the La Vista project that because of the value engineering, you were able to bring back the $5,000,000 that we we had allocated. So that's really good news, obviously, and the fact that construction has already begun there. It's really exciting. Thank you for that. On the WIFI alone, a delay, what does that do to the the deadline delay and then therefore our obligation to meet this new standard for the, runoff into the bay?

So the deadline for that construction is 2034.

Mhmm.

And I think that if we get our VFIA within the next six months or so, we should be able to make that. I have plans and specs all ready to go. This is the definition of a shovel ready project. Mhmm. But the funding is not here. If I get the funding in the next six months, we should be okay.

Okay. And so are you optimistic about the next six months? Or

Yes. Okay. We have been working with senator Padilla's office.

Right.

Mhmm. He actually mentioned the city of Hayward funding in a congressional hearing, and the the administrator of EPA went back and promised to go look into it. And we have been working with the staff of EPA right now for the past few days Okay. With letters and advocacy and so on. And, of course, through also California Association of Sanitation Agencies and the FEED WIFIA administration directly as well.

So the three different sources that we are pushing through to see what we are going to be able to do. Okay. We just wrote a three page letter to them to explain how our project is in line with all of the administration's priorities, and we feel people like that. We'll see.

Okay. Great. Well, that yeah. I mean, sounds like optimistic news on that front. So thank you. And then last question I had was on SkyWest. So you said you said half of it is gonna go to Hard if that works out. Right? If that

Yes. The the Western half.

The Western half. And then you said a third and a third. So I'm trying to, like, understand

What? The the calculation here. Less less than a third. Less than a third will go to airport.

Of the remaining 50%?

Correct.

Okay. So less than and then the other one will go to some sort of development.

To economic development. The eastern portion

Okay.

That is next to the park.

And any word I I know there's been some sort of complaints about the clubhouse not being used at all. Like, what's happening with the clubhouse? There was a fire there,

I believe.

Right?

The the clubhouse is in an area that will have to be removed.

Okay. Yeah.

Alright. That's what I was wondering. Alright. Thank you so much.

Thank you.

Alright. Yep.

Thank you. Thank you for all the hard work that you you and your team have been doing, especially around transportation. I think this was you know, the last year last fiscal year has been a banner year for improving safe streets, distributing bicycles, really rethinking what does safety mean from a pedestrian, noncar perspective. So I just wanna commend you for the the fast work and the comprehensive work around that. Also, with SkyWest, just appreciate the collaborativeness you've had with the community on this. I know it's been a hot button issue for a number of folks. And wanted to clarify, I mean, we've had conversations about partnering with Heart for the Western portion, but we haven't finalized the remaining parts of the larger plan yet. Right?

No. That is true. That is true. A portion of the the the the land is adjacent to the airport and there is no way that we can do anything other than devoting it to the airport. Yeah. And then the eastern portion, you haven't decided yet what

you wanna do. I I I didn't want people watching this and then, you know, my inbox being flooded about how decisions have made about SkyWest already. It's

it's getting forward.

So thank you for thank you for clarifying. I I other than that, thank you for continuing to push. It's really exciting to see our PCI go up year over year. I believe in you and your team's ability to to hit 80, so no pressure. But, yeah, please keep up the please keep up the good work.

Thank you.

Yes. Yes. K.

Alright. Yeah. Yeah. Thank you, director Amiri. You're you're I'm always impressed by the quality of work that comes out of your organization and really appreciate your thoughtfulness in terms of the budget. And also in meeting our vision for 80, you know, an 80 score PCI. I know when I first moved here, really felt as much as I love the community, the roads were pretty atrocious. And nowadays, I'm really feeling, you know, it's very different. It's night night and day different. Right?

And and so I congratulate you on that and hope that we we can, you know, continue in all parts of the city to continue to improve improve pavement. But there's also in all of these things that most most folks in the city just never really necessarily recognize how much comes out of your department. So, you know, water quality, airport operations, you know, people who maybe have a specialized interest in these things might be aware of it, but your average resident doesn't. And so you guys are kinda silently in the background, so to speak, taking care of the business of the city, and it's just very impressive. And the the safe street planning in particular, when when those issues came to light most recently, your response to that has been excellent.

I hope you'll continue to put pressure on there. And in any event, I I just very, very thrilled with the quality work that you and your colleagues in your department are able to pull forth. So thank you for that. Thank you, Pierre.

Has the budget situation impacted your prioritization of your projects? So you adjust I see that you made reductions of impacts to the general fund, but are there certain projects that you're just not gonna move forward because of the general fund?

So there are a few projects that are either partially or fully funded by general fund, and we have delayed those projects. One example would be median landscape projects

Okay.

Although they are good and they improve the quality of life. But because they are funded mostly by general fund, we have, you know, given priority to other projects this year.

Okay. So all the critical infrastructure is continuing to move forward during this budget time?

Correct. Some projects depend on grants as well. Mhmm. So to the extent that we are applying for grants but we haven't received them yet, we wait till we receive those grants before we can come to you and ask for the projects to, be awarded.

Okay. And then, I know you are going after RIFIA. With the infrastructure that is gonna be upgraded, how is that impacting how is that impacting the operational budget? Are you gonna see an increase of staffing if if we if there's new processes that come online, new technology that comes online at the plant?

Yes. If I receive the WIFIA alone, the increases that council has approved for our wastewater fund are going to be adequate. Those increases are going to be adequate to fund the additional staff that we need to run the operation Okay. Of the enhanced plant. Okay. Great. Thank you. Thank you.

Council member Girmanio.

Mayor, thank you again, Alex. Thank you very much for a great job. You didn't mention anything about bicycle, lanes. So, I mean, that's something I'm sure that's also will keep going. Bicycle safety besides pedestrian safety, yes, but bicycle greenways.

Absolutely. I just wanted to mention that we have four interchanges on I 880 Uh-huh. That we are responsible for. The interchange that we are pushing forward is a and I 880 because that is mostly a bicycle improvement and pedestrian improvement. So that has priority over the other ones

right now. Excellent. And just a small reminder on SkyWest, let's keep the, clubhouse, please. And thank you for a great job.

Thank you.

Okay.

I just wanted to just, highlight, your department's work on, the Hayward Rides program. Last night, I was at the youth commission, and I think every single youth commissioner still you know, they have their bike and they're happy and they're riding it. They're riding to school. And, you know, they yesterday, I was I was I was talking. I forgot I forgot what what I was reporting to them on. And and I said, oh, I think it was about summer jobs. I was like, yeah. You know, you have a job in Hayward and, you know, you don't have to travel too far. And somebody in the room said, yeah. We could ride our bikes.

You know? Boom. And so that, you know, we, what what your department has done, I think, is what we have been trying to do, and that is launch the very first generation of carbon free, you know, travelers and and commuters. And and so I just wanted to say thank you for for keeping that and and keeping that going.

Thank you very much. Thank you for your leadership. When

when we do get that WIFIA Yeah. Loan, let's bring senator Padilla here and break ground or cut the ribbon or do something.

That would be fantastic. Yeah.

Yeah. But turn the water on or something. Anyways, thank you very much.

Thank you. Thank you very much.

Before we move on, can we take, like, a five minute break just to just to stand up? Okay.

Recording stopped.

Recording in progress.

Okay. Let's see. Think we have five more. Five more to go. Six. Okay. Next, we have, next, we have, chief Hamri, and, he promises three slides. Two. Or two slides. Hold on.

One slide. One title slide. Title slide.

Three slides. Okay. Chief Hamry, take it away.

Alright. Good evening, mayor and council. Starting off with our considerations and our service impacts. The biggest one with two engine an engine company and a squad shutdown. We do have a reduced response capacity from staffing reductions. Staff has done a really good job leaning into the challenge. We're now, we are maintaining our response times through strategic response adjustments, training schedule changes, and working on our streetlight preemptive repairs. We are, however, monitoring reduced redundancy and simultaneous call demand. And simultaneous call demand is something we're seeing where our call volume has gotten to the point that certain districts are starting to see multiple calls at the same time more and more often. The more busy that district gets, like downtown district, in two year period, simultaneous calls is up 19%.

Station 7 is our next busiest, up 17%. So you can see whereas our growth is growing, multiple calls in the same district is becoming something that we're keeping an eye on. Next bullet point, reduced cost with impact to training. As far as the reduced cost, I really wanna shout out our partnership with local ninety nine leadership they've taken in the concession bargaining. Payroll this year projected to reduce total payroll by 6,800,000 and overtime by 2,600,000.

However, I wanna point out we've we've gone into very strict overtime control, and some of those are deferred costs. We've delayed academies, has a cost which will come back in the future when we strike start to fill positions. We've also cut down a lot of our specialized rescue and training classes. For us, it's a little bit different where, like, in a firefighter and engine one, if we wanna send them to a class somewhere to get the specialized training they need, it creates a vacancy on that engine to keep that vacancy that engine company in service. Engine one, you have to pay someone to be in that spot on overtime.

We recognize the challenge this year and next year, so we've been really tied on our overtime control, but there is a deferred cost there. Prevention capacity was initially reduced, but core volume is on schedule or core work is on schedule. Staff has done a really extraordinary job reorganizing workflows, updating fees, closing process gaps, and increased outside plan check to keep inspections and plans review current. I just wanna point out we're current on both inspections and plan review in spite of having a frozen plans examiner and a hazmat inspector. Our community outreach and public education has been reduced.

To preserve emergency managing capacity, the public education officer position was reassigned to that function, reducing prevent reducing prevention education, community engagement, and public outreach. We just we're just short of position that normally would handle those things twenty four seven. We're picking up some of the slack, but you just can't replace losing that person. We definitely prioritize emergency management as something one of our core things that you cannot go without, but we have seen a decrease on the community outreach and public education, and we're still trying to solve that problem. Next slide.

Alright. For goals, we're trying to modernize our technology to improve efficiency and data quality. We're adopting new technologies to improve regional interoperability, analytics, and rapid disaster assessments. These programs include tablet command, image trend, and quick capture. Main thing is trying to create a the Bay Area and the state as a whole is creating platforms that put us all on the same page.

So if someone comes into Hayward to support us, they're on this they basically, it links the different dispatch centers because we all have a different CAD system. It's a new platform that allows us all to see the same thing and trade resources back and forth so you know right where people are, you know who's coming, and process things quicker, as we deal with regional events. On the image trend, we're trying to work on quality and speed of report writing, and a big thing for us is increasing our analytics so we have a much better operational picture of the challenges that we're seeing across the community. The second one is this year, we kinda hit everything lined up all at the same time. So we are completing accreditation, audits, and department assessments.

The priorities includes the the Cooper hazmat audit, our state fire training academy accreditation, our ISO assessment, and we are currently finishing up our standards of cover and community risk assessment. And the last goal for, that we have listed here today is strengthening our training, succession planning, and operational readiness. Similar to our partners at the police department, we have about 30 potential retirements over the next few years, could affect key operational leadership positions, making leadership development and readiness planning a priority. At that time, we'll take your questions.

Since

I've already said it, I won't say too much longer, but we need to have the county and the state reimburse us for services provided by our fire department due to their impacts. Okay. Wanted to know more about engineering review. I know that the planning department spent a lot of time on business friendly ordinance and to, make some upgrades to the to the actual, review and the codes. Wanted to see if there is anything that was being done in the fireside.

So

Is there a partnership that you all are doing to see how we can get review times to be quicker?

I'd say there's two things. One is we've expanded and kind of our access to consultants in our busy time. And what we have is we have one fire protection engineer. When a development like the stack center comes in and they drop off an 800 page document, it's hard for us to keep up. So we've really leaned into using outside, plan review for when those busy periods happen. And what we've also done is actually DSD. We had a meeting last week. We're trying to identify where the gaps are because we've changed from everyone coming to the permit center and having one spot. Everyone's on the same page together to having multiple consultants. It's on the web.

Stuff comes in and trying to eliminate all those gaps. And I gotta give it to to DSD for reaching out and being like, how do we close those gaps? So the conversations are definitely happening. I think this next year, we're gonna close a few more gaps and be even more in line and on the same page and communicating better to the businesses we serve.

Okay. And then one thing, just in general, from from my perspective on the infrastructure committee, wanted to see do you all look at the the, plans that are coming into infrastructure, prior or before? Because sometimes I feel like I hear that the fire department is reviewing things, and then sometimes I'm hearing that it's after. Are there any efficiencies in reviewing those types of, like, citywide projects that you guys are looking at? Like, for example, what happened with Hayward Boulevard?

Like, I I would hear comments from folks from the fire department sometimes saying, I don't know about this, but then I hear it's fine. And I just wanna make sure that we're seeing those efficiencies because sometimes it gets to to the taze and then, you know, we have to think about that stuff, not just because of the residents, but I'm also thinking about public safety and fire.

When you just to clarify, when you say Hayward Boulevard, are you talking about traffic calming?

Traffic calming impacts emergency services.

So we've we've definitely reached out to Public Works and then traffic engineering and developed a relationship to just be in the in the in the front and having those conversations early, to identify any challenge that we have. And they've been really good partners. And I'm talking to Lucas and some other people around the city. Just closing that so we're not being surprised by anything later.

Okay. Great. Thanks.

Council member Roach.

Thank you. I just wanted so you were saying, you know, so you have a engine and a squad that were right. So a squad for the engine that were, that are not operational right now because of the staffing situation. That was because of the reduction in the minimum staffing. Is that right?

That's correct.

And then, but just to be clear, there's no stations that have been shut down. Right?

No. All nine stations are still operational.

Are good. Are still open. Good. And then, you know, you were saying how so it's hard to do training and things like that because of the reduction over time. And so I guess I I'm just trying to sort of square that. Is that a reduction in minimum staffing? Because we didn't lose any staff, right, during this whole thing. Right? So the staff is still we we didn't lay off firefighters, for example.

Yeah. No. It's not from laying off firefighters. It's just our operational controls. We looked at our our over our areas that we could cut over time. One of the things that we kinda made a choice to temporarily stem back was sending people to classes.

Mhmm.

For a forty hour staff, it's very easy. We're, like, you know, the the cubicle or that desk is vacant and other people pitch in. For our fifty six hour work staff at the station level, like, the seat's empty, the engine's not in service.

Okay. And were was that always paid for by overtime training?

A lot. A lot of it is. Yeah.

Okay.

For, like, the full, like there's specialized training like the urban search and rescue for preparing for the earthquake. Those are usually thirty two to forty hour classes. Mhmm. At some point, they're gonna line up with the work schedule of, say, the firefighter engine one. And the only way to get them there is to be able is to give them relief and then fill that vacancy.

Comes in and fills the pipe over time. Okay. Alright. Just trying to understand because I, I know we didn't actually lose staff, but that makes sense. And then, and then the downtown station issue, you said how what did you say the calls were up on that one?

Their their call volume of simultaneous calls, so two calls at the same time in district, is up 19% over two years. It's about 1,800 calls that happen in that district that the that is the second call in that district. It's about a 6,000 call district.

Okay. And then, do you because I know Ridges Village is an increase in some of that. I mean, do you attribute that to a large percentage of that at this point? Do you see that, you know, reducing at some point because, you know, that the Ridges Village hasn't fully occupied yet, so I'm just concerned about that.

Yeah. I would say there there are higher call volume generators. District 1 has several, to be honest. Like, there's several senior care facilities. There's skilled nursing facilities and somewhere like BACS where you're collecting people together. That's a higher call volume

Okay.

Which wouldn't what I would expect when you look at engine one, they have several of those in that district.