Budget Committee - Regular Meeting

To here? I'm a new member too.

I have I

was on here a year. I missed I skipped a year. So I haven't I actually didn't didn't do chair for the two years I was here.

Okay. So it's your turn.

So I'll take I'll take it up there. That's fine with you. So call me in order here at 1103. And I do know we have correction for agenda item six.

Yes. And I'll make the announcement. We do have a correction to the title for item number six as displayed on the screen.

K. Very good. Thank you very much. Just for a little change basic change in terminology from removing by to changing it to up to. So with we'll take that there then, and we'll move on to public comment period. If we have anybody that would like to speak on an item that's not on today's agenda, There is nobody in the room and no hands raised. So we will close public comments, go to appointment of chair and vice chair, and the a motion to as chair and vice chair. That's

Yeah. I'm I'm good with that. Especially after you served twice without serving as chair. I think it's your it's definitely your turn.

So Oh, thank you very much, and I'll, that we can probably. Do we have to vote on that?

Or think we did just say by consensus? Yeah. Yeah.

Good.

Each of you has to orally say yes.

Okay. And

there technically needs to be public comment on each of the agenda items.

So so do we need to we need to have a public comment on chair and vice chair or altogether?

Well, technically, each agenda item.

They're they're together. So But they're one thing

to The the chair and vice chair are together. Correct. I'm sorry. I thought you meant

going on next one. Vice chair and supervisor to be chair.

Yes. And I I do as well. I agree with supervisor as vice chair. So we've done that. We'll go to public comment. Nobody in the room. No hands raised. We'll close public comment. Bring it back. I think we have, consent on that so we can move forward. Great. Onto action minutes, which I don't think either one of us was here at. So I'm okay to move forward with them. I'm okay to move ahead with that with consensus as well. And, we'll move to the consent agenda. I if you maybe I should ask for a public comment on the minutes. I'm sorry. Some as the county council just instructed me to, and I do not see anybody in here or hands raised. So we'll move on to the close public comment and move on to consent agenda. We have three items.

Do you have any items you wanna pull? Good to me. Looks good to me. Any public comment? Put it on there, and, we will approve those with, by consensus as well and move on to the regular agenda, which is item six Mhmm. Which is to support authorizing the auditor controller to amend the fiscal year 2526 for a adopted budget increase in general fund zero zero one. We have that's point a, and then there's also gonna be b, but we'll take six a first.

And public works has a a short PowerPoint presentation that they'll be sharing.

Mhmm.

Yes. Thank you very much, chair and members of the committee, and thank you very much, Rocio, our secretary. I'm Randy Ishi. I'm the director of public works, facilities, and parks. And with me today are various staff members from the department of public works, facilities, and parks who can speak to the item that we have before your committee today.

We have a brief PowerPoint presentation, and I will be sharing my screen so there'll be a momentary pause as we share screen for the conversation today. And so the request before you are the items a and b. I'll summarize them as reimbursement requests for these various services performed by public works, bills, and parks over this fiscal year twenty six. And the overview of our presentation will be a brief background of the request and why it's come before you today, then staff's recommendations ending with questions and comments. So by way of background, through fiscal year twenty six, the Pelletworks facilities and park staff performed services requested to them without an identified funding source at the time.

And those included various homeless and chemical cleanups that were asked of the department and the ongoing Carmel River Lagoon interim sandbar management activity, which performed every year here in the county on the Culver River State Beach. In terms of the homeless and can't make cleanups, the purpose of them was threefold. One of them was for fire hazard mitigation. Another reason for it was the public safety risk reduction. And then thirdly, there's co compliance and defensible space issues that were ongoing with each of these different homeless encampments.

All of these had gone through the collaborative team of the what's called the echo Romeo tango team, the the camp response team, which is the collaboration of the homeless services division of the CEO's office, sheriff's office, public works, those are parks department, environmental health bureau, housing community development, and other county departments. And in all cases, the outreach teams were deployed extensively to connect people with resources first before notices were placed about the upcoming in camp cleanup, but then eventually the camp cleanup itself. The next several slides will show you the examples of which have been performed or are or are about to be performed by the department. This first one was on Baranda Road nearby where US 101 and the Baranda Road off ramp are located. County has a piece of real real property interest in that area, and what was brought up was a was a a need seen by both the city of Salinas as well as other staff who had brought it to our attention.

And once the encampment team sorry. The I was. Once the outreach teams had met up with those living in the encampments, Stefan conducted a removal of debris and garbage, again, near US 101 and the Bronga Road off ramp just outside the city of Salinas limits. So we have a a bit of the before picture showing the materials that were at one point concealed by the the STAA size trailers that somewhat blocked the view, which what I'll say, concealed these encampments that were present in that area. But there were many concerns that were brought to us, and so this has since been abated.

This has even occurred on the county's real property of Manzanita Park. There was an encampment there on the rear side of Manzanita Park, and these two pictures show you before and after images of before the encampment cleanup and then post encampment cleanup. This work was completed in December 2025. This next example is one that is pending. This is located nearby the Schilling Place offices as well as nearby Union Pacific Railroad tracks and also US 101.

So there's multiple agencies that are trying to coordinate on this encampment cleanup. We wanna make sure we're doing it altogether so that way the camera doesn't move from from one property just to another person's property. And also of note, there's a private property owner nearby that we're also coordinating with. So this cleanup has not occurred yet. As mentioned, staff is continuing to work with Union Pacific and other real property interest parties. So we have a coordinated effort for that cleanup. However, this is included as part of the funding request by the department.

Either demand or the way they

Oh, there's an example. It takes place in the unincorporated community of Baranda off of Calle De La Adobe. It was brought to our attention that there was a sizable encampment there nearby the pedestrian bridge. Again, these are two images showing the before and after of the cleanups. And, again, we extensively exercise the outreach teams through the ERT team in order to try to connect these individuals to services.

So this is before cleanup and after cleanup on the right hand side of the pic of these images. And, again, the work was completed in December 2025. So this one is already completed. And as we come to a close with these, there's encampments that were are located at the Davis Road Bridge. Of these, this is the only one that is truly within the road right away.

And so staff have already been out to remove debris after connecting these individuals with services as best as possible. However, there's another one that has developed that we are also working on. So in this first image, this was work completed in August 2025. Of note, we had concerns raised to us not only by law enforcement. We also had the private property owner nearby who is an agricultural operation, and their operations were being affected by the individuals within the encampment.

And that takes us to the item b, the Carmel River Lagoon sandbar management activity. As your community members know, this is something the county has done four years, year after year. This is a multi multi benefit project in that, for one, the county had already adopted an environmental impact report recognizing that this is an ongoing activity now with CEQUA approval. And its purpose is to provide flood prevention of the homes in the fourth edition, aka the homes nearby the Comer River Lagoon. It provides the county with regulatory compliance, and that allows the county to acquire the permits to do this annual activity.

And then thirdly, it provides a habitat protection for steelhead. So I noted on the slide, this is required under the as I mentioned, the twenty thirteen MOU with the various federal agencies, and it's something that the department also seeks state and federal resource permits every year to connect these actions. And these activities range from the mechanical sandbar management using heavy equipment on the beach paired up with on-site biological monitoring for our regulatory compliance. And this image shows you earlier this fiscal year when we deployed the mechanized heavy equipment to build the whether it's called the pilot channel to allow the Carmel River Lagoon to rise in elevation and naturally spill out into the pilot channel to meander through and reconnect with the Pacific Ocean, allowing for a steady drawdown of the Como River Lagoon's water versus an immediate evacuation of all the water with the juvenile steelhead potentially in that water. So, again, this activity has been performed, and our request also includes the potential to need to rebuild the sandbar in the summer months.

So that way the next generation of steelhead are able to grow and adapt in the Carmel River Lagoon during the summer months. And then we just show the scale of what is necessary in order to perform this operation every year. Bringing back the staff's recommendation and as noted, including the corrections earlier approved in the agenda, the staff's request to support authorizing the budget amendments for the homeless account and cleanups in the appropriate increase up to amount of 65,162, and then to reimburse for the commercial management activities, again, with appropriations up to this approximate $263,000 figure, and then it'd be funded by a decrease in general fund contingencies. So in terms of the financial impact, staff recognizes that this slide is now somewhat dated. And so to briefly discuss the slide, we we looked at a snapshot in time of the current balance of the general fund contingencies working with budget office.

We noted the pending requests at here again at that point in time. And the very bottom bullet point is to express the general order of magnitude of the remaining general fund contingency, assuming all the other pending requests are also approved along with the request that is before your committee today with this item. And, again, staff's request is an amount up to $328,282. That concludes staff's presentation. We're available for questions and comments, and we thank you very much for your consideration. I'll stop sharing screen.

Thank you, Randy. Sorry to jump on you right there. I did fail to mention that there was part b on there, which was the stormwater request for 263,000 as well. As Randy points out, that's for a total of 320,000 from the general fund. We get a little breakdown of what this 4,300,000.0 that is pending right now? So like better understanding where we're at?

Yeah. So at the time of this presentation, well, off, thank you, Director Yushi. That was a great presentation. I understand a little bit of the background of the potential projects. So right now, currently out of contingency budget, we currently have what we consider pending. On here, it says about 4,300,000.0. That dollar amount has actually grown a little bit more. The lion's share of that is the cost of the jail medical expansion that was done and approved by the board this year. The sheriff's office has not come forward yet with a budget modification request. We have been monitoring the sheriff's budget.

We're very well aware that they are going to need an augmentation in order to balance their budget for the current year related to that increase of jail medical. We're also working with them to put it into their budget for next year, the full cost of the jail medical, which is projected to be, I think, $600,000 increase for next year. So what's identified on the on the slide the 4,300,000.0, it's actually closer to 4.8 is where I believe we're at right now on pending that we're aware of from different departments, but the lion's share being the jail medical, which has not come to the board yet, which we are planning on working with the sheriff's office and having it to the board here, I believe, March based on our last discussion with under share point.

A little clarification. If it's not 4.3, it's closer to 4.8. And after this, we're gonna be at 800,000. Does this mean we're gonna be closer to 300,000 left on our contingency?

It's gonna be close. So that's why we're we're really scrutinizing every single request on the contingency line item and try not to use use alternate funding. So that's why we we plan on working with the as director she identified on the request here for 328,000. Not all the work has actually been completed. So there's some costs that are estimated at this time.

So I we are planning on working with director Ishi and the team to really narrow down the exact cost that they're gonna need. And so, ultimately, when it does go to the board, then we'll have a more fine tuned dollar amount as well as all the additional requests that we do have, including the sheriff's office. We plan on working with them on their bottom line budget to just get what we actually need to pass, minimum for the budget request.

Right. And this item will come before the next board meeting, March 10, I think it is. It's planned for if it if it passes here? Correct. And, Randy, these funds are needed. I'm assuming from this request at all, they're needed immediately. Is that correct?

Thank you very much for the question, chair Church. Yes. That is correct. The department needs these funds immediately. We've been cash flowing all of the actual cost expenditures and even the estimates up to this point in time. And so it's been affecting our operations, including use of our salary savings order to dip into and fund these different activities, which were necessary for public health and safety.

Supervisor, do you have any questions? I would just first thank, Randy Ishi for the great concise presentation. I think always photos, says a thousand words about the work that needs to get done, and and that seemed like a pretty small amount, the 65,000 additional for the incamine cleanups for all all those areas that needed to be addressed for public health and public safety reasons. So I I think I thank your team for doing that. I know that work is not easy.

And I'll obviously, car Carmel Laguna, it's it's a responsibility that we we have to be just do. Otherwise, there's other liabilities, I think, that face the county by not doing the the necessary work. But it takes us to the bigger issue, right, that that I'm back on this budget committee. I've been off for a few years, but it this committee and our staff, know, we would always like to have a healthy contingency and and reserves. But but going back to the jail medical, we went through just sort of for way of background, we did go through an RFP process, right, to get a new provider.

And and I think all those costs, for providing jail health care came out millions more than expected. And it's not unique to Monterey County. It's it's happening all over California. A lot tied with liabilities that just go with operating a county jail, whether it's on the health care side or, corrections. These are becoming much more expensive, to facilitate and and and provide those essential services to those that are incarcerated.

So it'll be factored into next year, but but it does and the the bigger picture, it does just just has one additional item. It's it's costing us millions more than before. Right? So so whatever flexibility we've had in terms of reserves or new funds that come in through property tax or TOT, it's shrinking what we have available for other critical services when we get such big chunks of new added responsibility into the next year's budget. Certainly, having going down to 300 or 500,000 leftover in our reserve when we still got four more months in the fiscal year is not where we wanna be.

So just wanted to express that as a issue of concern. But I think these these two items are necessary that we have to move forward with these today. But I think they'll use a discussion for this budget committee and then for our full board of supervisors of what if more things come up, how are we how are we where else can we look to to provide a for any other, needs that look to contingency to to pay pay for. So, anyways, I'll I'll leave it at that, but I'm willing to go forward today. But, it is concerning that we're this we have this this, small amount when we saw four months over four months in our fiscal year.

Absolutely. That's exactly what my concerns are there too. Randy, major AA, I thought we had brought up some augmentation or some for cleanup inside there. Is that correct, or am I misremembering on that?

Church Church, you are correct. The recent action by the board for, approving measure double a dollars for litter abatement services was approved. So you are correct.

That is not enough apparently to cover this. Is that that's my understanding?

There was a time lag Church Church in between when staff originally was trying to bring this item forward versus, the approval of the measure double a dollars for the enhanced litter cleanup.

Does do does anybody know when the next major AA meeting is? Is that next week?

March 19.

March 19. Okay. Well, it's not next week. Okay. I was hoping maybe I I'm just trying to find some way to save even a few dollars to the contingency as whether or not, you know, this could be the on the on the litter and the issue cleanup because it has been a a big issue that we've talked about in there, whether that could be rolled over to to March 19, major AA, and then when it comes back to the board, or is that going to is that gonna create a problem because that's just too far to the future for you and your staff?

That is a bit far in the future for us. We do have buildings we need to be maintaining and parks and new services.

Okay. So that's thank you for that. I'll I'll also, you know, realize we just gonna have to go ahead with this and and hope for the best. Let me go to public comment and see if there's anybody wants to comment on this particular item. There's nobody in the chambers, and I see no hands raised at this point. So, we will close public comment and bring it back.

And I would just say for the future because the encampments are ongoing. Right? It's like even though you clean up, maybe in May or June, we're gonna there's gonna be other areas to address. So just for the future, if there if there is possibility to go take those item to a committee, I mean, that considering where we're at in our contingencies now, just to put that on the as a way to be able to, have funds to be able to pay for it. And and I think in all our accounts that we've done in the past, they've been much very expensive, right, in the hundreds of thousands of dollars. So this is a a small fraction of what we've seen in, the county spend in the past.

Yeah. I will, you know, also be supportive of that and, you know, having a nice robust cleanup budget. I think that's quite, you know, quite quite within the major AA's realm of where of of the promises we've made to the, to the community. And and, hopefully, we can come back with some ideas on that. But, so I'm happy to give that direction as well. And I think, I'm, you know, in favor of past, you know, of moving ahead with this contingency. Okay. Very good. I think we have a consensus on that. We can move on to item seven, which is our semiannual reports.

We're gonna get an update on the enterprise resource planning replacement project. And And some of

us are catch oh, and I need to catch up to speed on this, at least on the Yep. Details that usually get presented on on the budget committees. Is

that Eric?

Yep. Yep. Good aft good afternoon, chair. Good afternoon, members of the board and public and staff. Michelle Karim will actually be running the presentation. And so I'm gonna turn it over to her to go through all the details, and we'll be available for questions.

Alright. Thank you, Eric. Good afternoon, everybody. Let me get my presentation mode going here. Okay. You guys able to see the presentation now?

Yes. We can.

Okay. Alright. Thank you. So let's get started with the HCM phase, which was scheduled to go live this past January. So based on the go, no go criteria that had been established, which included achieving an accurate payroll and other critical task was determined that we would not, we were not in a position to go live this past January.

And I'll get into a little bit more detail into that on the next slide. Moving on to our enterprise resource planning, which is our financial space that remains to go live this January. We're currently scheduled to complete our system integration testing this week. And then the project team is busy very busy preparing for our upcoming user acceptance testing, which is scheduled to begin in April, and then training as well, and then eventually go live. So we have a busy four months ahead of us.

With the recent change to move out the HCM phase from this January to next January, we had change order seven, which is going to result in a total overrun of 6,200,000.0. And the breakdown of that change order is included here. And as you can see, the majority of the cause for that change order can be attributed to county resources and the Oracle licensing that needs to be included since we are not fully alive with the project, which brought the total amount for this change order to 3,700,000.0. As far as risk, we continue to, face, you know, challenges with resource constraints. You know, some key staff still needed to support some critical operations, so they're having to balance between the project and operations.

There's been a significant reduction in the project staff supporting the project due to staff turnover and some leave of absences with some of the key functional leads. And then we also have our departments that as much as they would like to engage in the project are also struggling to engage as much as they would like to due to their own staffing constraints and operational priorities. They do not have dedicated staff to support the project. So, again, with this change order, we were not in a position where we had achieved the results that we would have liked for the payroll calculation. We still had not completed our user acceptance testing.

I'm in the process now of working with the auditor controller department to schedule user acceptance testing for the time and and absence portion, which is the most impactful to the county. And then we also have some critical tasks to complete for interfaces and data conversion. Having said that, we are making progress with our payroll calculation. However, it's the effort has taken longer than expected due to manual nature of having to research and resolve the payroll variances that we are coming across. And because we are reliant on a single resource for an area, we're having to work around their availability and sometimes have to work in a single threaded approach, which delays some of the task.

We did also consider various implementation options. However, due to the impending ERP go live and other critical annual operations tasks such as benefits enrollment, The team agreed that the most feasible option would be to go live next January, which aligns with the calendar year and and also for tax reporting requirements. So here's where we are with our planned versus actuals cost. So for this fiscal year, with the most recent change order at the time of this report, we were estimated to have an overrun of a little over 2,000,000. However, with the January actual numbers that just recently came in, that has now reduced to 1,900,000.0.

And we worked we met with the budget office, and they have identified a funding source to cover that overrun. And then for next fiscal year, the estimated cost with the recent change order are expected to be 4,200,000.0. And then, again, that brings us to an estimated 6,200,000.0 overrun. For next fiscal year, The budget office did recently submit an an update. I think it was yesterday.

That these this overrun will be covered will come from general fund dollars and will be included as a recommended budget for next fiscal year. These this is a breakdown month by month of the expenses and when we are expected to run out of funding. So the top one represents this fiscal year. And, again, at the time of the report, the overrun was estimated to be a little over 2,000,000. However, with the recent actuals that came in January, as you can see here, you know, it's our county resource costs that continue to be the variable here.

Everything else is fixed. So we have been running under. We've been running under about a 100,000 per month. So I'm expecting that at the end of this fiscal year, this number may be closer to 1,500,000 if the trend continues. And then the one at the bottom is just our burn down for next fiscal year.

The other thing I wanna point out here for county resource costs. So, for the change order in the extension, we've only accounted for six months worth of county resource costs. Once we go live, those county resources will no longer be funded from the project. So this is a summary of what our plans and what the actuals are for the FTE that have been spending time towards the project, and the actuals are based on actual hours that they have entered in their time sheets. So as you can see here, we'd plan for '24.

We're closer to 14. And, again, that aligns with some of the staffing constraints that we've been experiencing. We've had some key leads that have been out on LOA for several months. There has also been some reduction in the staff supporting the project due to, you know, needing to balance critical operations, and there's also been staff turnover. And this concludes my update. Action being requested is to receive this spying annual update, and I will open it up to any questions.

Any questions? Yeah. Just going back to the timelines of when the two components will go live for the human resources and also for the financials. Are we pretty confident that that, based on the work being done now, that we'll be able to stick to those, or or or we'll we are we or it still fluid where we might see those dates change and be postponed?

At this time, supervisor Liho, we are pretty confident for the upcoming ERP go live. We do have a lot of work that we need to accomplish between now and then. But at this time, there's no known showstoppers for that go live. So it's just a matter of buckling down and preparing for the UAT and training and and cut over. And as far as the HCM extension, this should give us enough time to work through any of the remaining payroll calculation issues that we're facing and also wrap up, the remaining tasks between now and and next January.

And and on the turnover of staff, are we working on a a plan to cross train other staff so that if somebody leaves, we have other people who have been cross trained to be able to step in? It seemed like, not doing that might create problems for us down the road. But are are we at least having a plan of how to have other staff to step in when others are are out on leave or go elsewhere?

I will leave that to I believe Rupa is on. I know that her area has been most impacted, by this, from a project management perspective. You know, we have been working with the auditor controller to, you know, either prioritize or reassign tasks, as needed. But, Rupa, I don't know if you wanna chime in on

Yeah. So good afternoon, supervisor Alejo and and chair charge. One thing I can bring up to to address that question is so for example, with the upcoming financial go live date, in July, pretty much the entire general accounting division of my office team is now involved in the project work. So as as the go live date approaches, we have we already have plans in place. And so that is one example I can share with you that it used to be two to three people working on the project, but now we have completed our our annual financial report act four.

And so now the entire team is dedicated, not necessarily full time everybody, but entire team is dedicated on working on the project as well as operational needs. So, yes, we we continuously monitor and and try to, improvise the situation relating to the operations as well as the project.

Yeah. Thank thank you for that. It's definitely a very specific skill set and requires, I think, very technical training that, I think having people that that could jump in when needed, is is imperative for this to be able to work over the long run of the of the project. The other thing I just wanted to comment in general is, like, we go through this every few years. Right? We we we invest in a very expensive system. We went when I went we went through this when I first became a supervisor, and then that software only last, it gets catered for specific needs for Monterey County. There's many change orders. It's the costs are always in the overruns in the millions of dollars. It only has a certain lifespan, and then we gotta go through it all over again.

And and so this is the second time we're going through this. Those that have been here at the county already, it just seems like, there has to be a better way for county governments to devise a system, even though each county is different. But but to be able to create this type of a software and training that is not just so ex not it's not in the tens of millions of dollars, especially when we we would the same is being done in 58 other counties in our state. Anyways, that's more of a commentary, but it just seems like, there has to be a better way of doing this, and and, it seems the the only winners are the are those, the the the people that we're contracting with to do this work are are the winners in this, and it's, and it's taking significant resource from every other critical service that we provide, for county residents. But I I know how critical this software is for basic function needs to happen in the county, but it just seems that it shouldn't be as expensive, to to get this job done.

Yeah. I, I agree. I remember it was back in 2017 or 2018 when the previous one came up, and Yeah. There was quite a bit of a I was with accounting. I I remember chatting with Rupa out to at a forum in in Aromas up on about this, and there was a lot of publicity on, and here's, like, deja vu back again onto this. And we

I think the last one had, like, 66 change orders.

Yeah. Yeah. I mean, it just it's just it's a it's highly technical. You know, we're trying to anybody trying to really grasp it that's not directly have their hands into it. But, you know, I really wish we could get our handle on this.

We don't face this all the time. So I got a couple questions that I try to understand what is is going on here. But I know in the board report, on the second page, it refers to, you know, this is taking longer to achieve than, you know, than expected and attributing it to a complex pay requirements defined by the county's MOUs. So I'm, I I'm just sort of wondering if is Monterey County an outlier on this? Is this a problem other counties have?

Is this something we're doing with our MRUs that we need to take into consideration? Because these are the unintended consequences that come up, and then suddenly it's millions of dollars. I don't think anybody's able to answer that for me.

Yeah. I can I can answer that, supervisor Church? So, you know, working with our system integrator, which is Graviton, which is the people helping us do the implementation the technical implementation. And as they've gone through all of our payroll and are continuing to go through our payroll because we have to, you know, get to a 99% with less than a 5% discrepancy before we can move forward with payroll with less than a 5¢ discrepancy. Excuse me.

The what they found that's unusual about our county is we have a significant number of unique payroll calculations. And so even just trying to match when we move data across and make sure that you get the same calculation in each system, you know, so we found some some issues with some calculations, but we just have a lot of unique calculations. And some of it's because we've lost the institutional knowledge, people that used to understand exactly how it was calculated. So we're doing a lot of reverse engineering, looking at our existing system and trying to understand how it was calculated. Then then we have to go through the effort of why was it calculated that way if it's you know, doesn't match what we believe is either in an MOU or in some kind of other document.

So that's it's it's very difficult. And going back to supervisor Alejo, some of the question. The cost of these systems, you know, is the transition to them are are the most costly part, but they are still even the more reasonable systems even which is even this one or if you were looking at a Workday or something else. They're just their licensing fee on in general is about a million and a half dollars a year just for that component of it. The good thing is if you go with some of these top SaaS providers like Oracle and, you know, Workday and others that are out there, they have a continual, upgrade process so you don't get as far behind.

And we're trying to limit customizations as much as we can so that we could take on new tech the new technology without having a lot of regression testing and items like that. So we're looking at this for a long term so that we don't have to change another system, but we can continue to get the benefits of new technology like AI embedded in some of these things to do calculations and work as well as other as well as other items. So I think that's and, that answers or at least gives you a little better view of, you know, kind of how we are looking at this. A lot of our difficulty has been just our own internal capabilities and availability of staff. So we get single threaded on workflows because we're waiting for one individual who may be the only individual in the county, which we've already had lots of those discussions with different individuals on how do we build that redundancy in our staff and our knowledge base as you know, within the, you know, within the county.

And we're doing it from a technology side, but the business owners are are doing it as well. But due to turnover, you know, due to holidays, due to the complexity of trying to balance between day to day operations and do system integration at the same time, those problems start to occur.

Thanks for that.

Yes. Thank you for that. Are when you're looking on on this complicated unique features that you're referring to, Eric, and he's and, again, the reference to MOUs, and I'm assuming this is kind of aberration in terms of counties that some of these things are are going on with Monterey County. Are we able to fix this so that when this comes back in seven or eight years, we're not facing the same problems? And that is that what part what you're trying to achieve here?

Yes. So part of what we're doing is as we figure these calculations out and we all come to agreement on, here's what either was happening in the system or what was supposed to happen in the system. The system integrator were act is actually documenting all of those. So now we will have anytime in the future, if someone wants to know why something was calculated some way, we'd have those. What we don't have is, you know, this list, we had a lot of knowledge base, you know, from individuals.

And Rupa's got her hand up, so she may be able to comment on this too because she's been probably closer to it than most people. We'll have literally a runbook on here's how all the payroll calculations are done. And so if you ever were to move to another system in the future, which I don't think I don't believe, you know, we will have to for the next, you know, ten plus years unless Oracle goes away, which I don't have an expectation of that. But you never know in today's world, you would you can this this is gonna have life for many, many years.

Alright. Well, you did answer one of my questions there too, was whether you're documenting this for the future, and that sounds be the Absolutely. That's really great. Appreciate that. I I do have one other question because I just wanna make sure I understand this phrasing and exactly what it means. And I'm sure there's probably some other people who would like to know that too. But, yeah, we're trying to achieve a tolerance criteria of ninety percent net pay within $3. Could could to put that in in a in a language I can understand?

So the number is actually I'm not sure. The the that's not the number that's in my head, Michelle. You can talk

to that.

But I

It's in the board report here on page three towards the bottom of it. I I just but referring to tolerance criteria 90% about 90% net pay. I I just don't understand what it means. And I saw it. It's referred to elsewhere too. So

Yeah. So that's that's where we have to in the new system, in the new Oracle system, we have to be able to run payroll at and match it exactly to what's currently running in our CGI advantage CGI system to 90% of employees within $3. I actually thought it was a tighter tolerance than that, and I'll let Michelle correct me. Go ahead, Michelle. Oh, you're on mute.

Can't hear you.

I'm sorry, Michelle. We can't hear you in here.

Now we're Our mic is on, but he's he's no

longer I don't know what's happened there, but that that's that's okay. I think I have a little clearer understanding of it. Is that it's you know, of what what we're talking about here a little bit. So I appreciate that. And maybe if if you need to explain to me more, you can send me an email or give me a call and if you feel there's something needs to be done on that. But, anyway, we'll go to public comment on this one. If there's anybody, wants to speak about this, there's nobody in in the chambers. I do see Rupa with her hand up. Yes, Rupa.

Yes. Supervisor Church, to your previous question slash comment about, you know, is is this coming from the MOU language or just details on the MOU? And is our county out, an outlier? I think just for a general perspective for the county and going forward in the future, we have always talked about standardizing our MOU language to the extent possible. So whenever there is a new negotiation cycle for the county with the labor negotiation group, the count it is in the county's best interest to stick to the standardization to the extent possible as much as possible.

In other words, we should we should try to avoid, you know, one offs or nuances or, like, special pays or special, you know, benefits related to individual MOUs as much as possible. So that way, we can try to limit the quantity and the amount of these rules that are required to be configured in the system so that the payroll and the payment related to those rules are correct. In other words, we have to cater to these requirements for individual MOU and individual units. In addition, this county has many, many bargaining units that that is somewhat, you know, not common in other counties. In our county, we have, probably, I don't know exactly, but I see Andrea's also on the screen.

More than twenty, twenty two, 24 bargaining units, that that that is just a a very high amount of bargaining units. And in addition to those number of bargaining units, we have individual in individual bargaining units, we have multiple set of rules and agreements that we have to configure in our payroll system to be able to make sure that we comply with those agreements that are set forth in the MOU. I hope that, clarifies a little bit.

Yes. It does. For for me, considerably, I, I don't know. Andres, did you have something you wanna add to that or anything? Or

Sure.

I do I'm a supervisor. Yeah. We have about 19 bargaining units, and the complexity of it is really driven by the bargaining situation. Also, we do have an invitation out at all times for anybody for for somebody from the auto controller's office to actually sit at the table as well. So they are during the last round of bargaining, the order controller had a presence at the tables.

We do strive to try and get the complexity down, but negotiations are a very fluid thing. And, sometimes something that might seem unique could actually be a very positive thing for the county because it could result in a lot of salary savings ongoing by providing a certain type of special pay or something like that. So it is unfortunately, just the reality of negotiations and, but we take note of this and we will always strive the best that we can at the negotiating table to try and reduce the complexity by understanding that we're always bargaining in good faith and trying to reach something that's in the best interest of both parties. And I hope that answers the question.

Yeah. It does. And and I know this is just for information to go on. I just I'm just trying to peer into this. We don't face this problem again. And, I don't know if it's, worthwhile for further discussion at some point or not, but I appreciate the answers, today from everybody.

Yeah. Can I go go just just go back to what Eric Chatham, said earlier? Just on terms of this this software being able to be updated in the future and, and not be able to have to start from scratch with the different provider down the road. Can you just elaborate on that? And and the technology has changed. Obviously, last time we did this, there was no AI options. Right? So Right. Other other features like that, we've seen we needed to be updated, obviously, to get get us into, the most current, technologies that might save us a lot of time and work. But but just if you could just elaborate on on Yeah. Able to update you software and and avoid going starting from scratch, down the

road again. So thanks, supervisor Alejo. And, and then as supervisor Church, I can I Michelle sent me the this is why I wasn't yet following the numbers on the levels? I can so I can answer that as well. So the with supervisor Lehoe, with us being in a what what they call a SaaS offering and a cloud based offering, they will do be doing quarterly updates.

So they'll be doing modifications to the application, and they'll be they bring those over, and then we're able to test those out and either accept those as being part of our product or decline those as being product part of our product. So we'll always be constantly updated on a on a quarterly basis with with this product. Other products do it twice a year, so they do it every six months. This one happens to do it every the way Oracle operates is every three months. And so we'll be able to take advantage of new capabilities, and we'll be able to review those, and we'll be able to add those into our portfolio without having to go back and do significant regression testing and everything else, which you would normally have to do if you were doing an upgrade or a conversion like we're doing now.

Because you're not changing any data, you're just looking at the new features and functionalities and then accepting or declining to have those put into your your your cloud instance is what they refer to it as. It's your location and your product. And we'll wanna take on as many as we can so that we don't get farther behind on the capability. So we'll really be looking at what what works for us. So hopefully, that answers your question, and that will continue.

That doesn't change, and you never have to do a major upgrade. You never have to go through a major rewrite unless, you know, the the technology changes completely, which I don't expect to where you were having to do an actual, what we call, forklift, which is kinda like we're doing that, which is move from one product to another, which is how we used to do it in the past, which is why our old advantage in implementations took so long and were very complicated because they were literally forklifts from one version to another. They really weren't an ongoing upgrade process. So does that answer your your question, supervisor?

Yes. I appreciate it.

Okay. And that's and supervisor Church, you talked about the tolerance level, and that's why sorry. I wasn't connecting with the numbers because we're already down payroll cycle two and moving to payroll cycle three. So payroll cycle one for before we move to payroll cycle two, we had to meet a 90% at $3 of matching that pay. Payroll cycle two, which means we're running all those same scenarios plus the second payroll cycle in a in our in a month is we have to meet 98% at 5¢ before we can consider it close enough and we'll so that we can move forward with launching the product, and we'll have to address the nuances with the two percent that are outside of that 5¢ variance.

Yeah. Thank you. I just just $3, she'd like. Yeah. It was as you are narrowing it down. So

yeah. Correct.

Yeah. Thank you very much. Okay. I don't have any other questions on this. No. So we're, thank everybody for their information on our questions and the presentation and report. And, you know, this is not one of these issues that is really glamorous, but it's, nuts and bolts and actually, is big dollars. So

Yeah. And I wanna thank all our departments because this is a complex, project. I I'm sure a lot of headaches and a lot of your time taken away from other duties. I So just wanna say thank you and acknowledge that work that this is very critical to the functioning of our county, but, I appreciate people rolling up their sleeves and trying to get through these challenges as best you can. And, hopefully, we'll get at the end of the the we'll see that light at the end of the tunnel when this this, software is up and running the way it should for

us. Yep. Very good. K. Well, thank you everybody on that. We'll move on to item number eight, which is received the, biannual report from the, Chester County Clerk Recorder. I assume is that Marina? Are you giving us this?

Chair Church and co chair Alejo, this is Greg McFarlane. I'm filling in for Marina.

Alright. Hello, Greg. Thank you very much.

She she apologizes. She had to be out on travel today. So I'm here to represent our office and her. So behalf on the present of the biannual report of the Susser's County Clerk Recorder and received a report on the current year's estimate outlook. First, can everyone hear me? Just make sure you can hear me.

Yes. Yes, sir. We can hear you.

Perfectly. The following is a summary report on the supplemental assessments for the county of Monterey as of 12/31/2025, a projection for this year's assessed valuation and a summary of income generated by the County Clerk Recorder's Office at the midpoint of the fiscal year 2025 to 2026. Based on the information that I will review, the overall projection increase for assessed valuation is 5.06%. Please keep in mind that the supplemental assessments are a part of the overall, but not the deciding factor of the overall projection. As of 01/05/2026, Monterey County Assessor's Office has generated 3,156 supplemental bills with a gross supplemental value of 1,000,259 I'm sorry.

$1,259,756,379. The average supplemental is $399,162. Approximately, 110 or $44,000,000 more supplementals were generated than last year. Last year, assessor's office generated 3,046 supplemental assessments with the average supplemental of $448,019, a total of $1,364,666,050. While the number of supplemental assessments had a small, excuse me, had a small increase this year, the average supplemental was $399,162.

This is lower than last year's average supplemental by $48,857, generating $105,000,000 less than the year before. As of 01/05/2026, the local secured assessment total role for the county of Monterey was 92,508,705,410 compared to last 07/01/2025, value of $91,176,469,536 an increase of just 1.01%. Assessor projects an additional 4,900 supplemental assessments with an estimated value of approximately 1,900,000,000.0. This increase of 2%. Funds that will impact each school district, public safety, and other agencies that reside in the board of supervisors districts.

For the role being prepared, 2,339 properties with proposition eight reduction already in place will be reviewed. Nineteen seventy eight, California voters passed proposition eight, a constitutional amendment to article 13 a that allows a temporary reduction in assessed value when real property suffers a decline in value. It is estimated that this review will increase the local assessment role by another 54,000,000, a small increase of point o 5%. Revenue taxation code Section 51 provides that the base year value determines under Section 110.1 shall be compounded annually by an inflation factor not to exceed 2%. Section 51 s one c provides that for any assessment year commencing on or after 01/01/1998, inflation factor shall be the percent change, rounded to the nearest one thousandths of one percent from October of the prior year to the October of the current year fiscal year in the California Consumer Price Index known as CCPI for all items as determined by the California Department of Industrial Relations.

For the coming year, the inflation factor that will be used is two percent. Based upon the above, the assessor now projects an overall increase of 5.06%. The recorder's projected revenue. The recorder read the recording continues to decrease. We are over 50% down in recordings.

2024, there was 50,191 documents that were recorded. In 2025, 48,461 documents were recorded. This is a 3% reduction from last year. Last year, a b fourteen thirty, a bill that would have increased recording fees by $5, would have helped generate more revenue and looked promising to pass, but the governor vetoed the bill. Impacted by the reduced revenue caused by the decreased recordings still due to market conditions and high interest rates.

Several excuse me. Civil marriages are down this year. Less couples are choosing marriage, a surprise after a very busy last year. 2024, we had 940 ceremonies were performed and brought in an additional $90,400. In 2025, 268 ceremonies have been performed as of 01/30/2026, bringing in 33,500.

Other impactful factors. The market conditions are changing, but the interest rates are still high at 6%. Property sales prices are a little over or I'm sorry, a little lower than last year, but still considered to be high for the average first time home buyer despite the market being considered a buyer's market. There has been speculation that the interest rates will be reduced sometime this spring, but it's unclear if interest rates will be further reduced by the federal government. Interest rates reductions have been speculated for the last three years, but we have been but we have not seen any impactful reduction in the last three years.

Interest loan interestingly, the market continues to be active, which is encouraging for the sellers, yet still challenging for first time homebuyers because inventory is still considered to be low. Unfortunately, there are not sufficient recordings to change the revenue for the county or the assessor clerk recorder's budget. Once again, this year, we are anticipating a $650,000 deficit, which we may mitigate some, but not by not filling three of our five vacancies. Appraiser two, confidential secretary, and OA three due to promotions, relocations, or difficulty to fill the positions. In addition, we have two Appraiser two positions that were unfunded last year for the same reason, to meet our GFC.

This is a recurring challenge that we have faced the last three years, and this year doesn't appear to be any different. Last year, we had three vacancies that were difficult to fill in the business property assessment section, creating a difficult challenge to meet the order of equalization's mandated audits. However, last year, we were able to fill a vacancy at a lower step. And in 2026, we filled the remaining two vacancies at also lower steps. For the first time in five years, we have a full staff comprised of five employees, and we anticipate meeting the Board of Equalization's audit mandate for fiscal year twenty six-twenty seven.

We currently have a recruitment to fill an appraiser two position that will assist with real property valuations and hope to reduce some of the existing large backlog that we have carried each year due to lost positions and vacancies that we're unable to fill to mitigate some of the existing deficit. Even with the two hires and the pending hire of a real property appraiser too, we still have three additional vacancies that we had to pause recruitment to mitigate the deficit. These positions will result in a 434,000 cost savings, but this is still not enough of a def to reduce the deficit for this year. That concludes my presentation. Do you have any questions that I might be able to answer?

I have no questions, Greg. Thank you very much for that presentation. Sure.

I have none either. It's just a pretty significant just the the derecordings, about 38,000 less in in in less than less than five years. But I think you explained the reasons why. You know? So but it just stands out that it struck that dramatically.

Okay. I I would like to make one other point. There Marina had mentioned a 1,900,000,000.0 out there that we could possibly get in supplementals. I would just like to put it out there that the only way that our office can get to them just due to staffing is to get your backing and support getting not just the appraiser twos, but the other appraiser vacancies and a couple other vacancies that we have in our staffing to help us get those supplementals. With those added bodies, we'll be able to get and close that gap to where we can get some more money that not only helps the county, but helps all the cities, the schools, and all the other districts.

Thank you.

Thank you. Got public comment. I see nobody in chambers for public comment. Anybody online have any, thoughts on this? Andrea, saying very good. Thank you very much. And this is a, nonaction item, so we can close that and move to a German. I do have one before we move to a German. Our next meeting, it says March 25, at 01:30, but my calendar has it at one.

That was my error. It's actually at 01:00.

Okay. Thank you very much. Just wanna make sure I was clear on that. And with that then, we will adjourn and come back on the twenty fifth. Thank you, everybody, for

your calendar closely. Yeah.

I wanna make sure it was in my calendar.

So what I'm asking is this