Budget Committee - Regular Meeting

Station about your timing, and it's been great. Yeah.

I didn't see you, Chris. I was waiting till I saw you. Okay. Chris just doesn't sleep. So Chris is both reading emails at 1AM and at 6AM.

That's right. I got it on both ends. It's fun.

That's the the life of a parent of young children. God bless I I didn't fare well during those years. But

I'm blessed to have a wife who will do carry the the biggest part of that load. I cannot

You're always so good at giving credit where credit's due, Chris. Okay. Well, with that, let's go ahead and call our meeting to order. It is Wednesday, 10/29/2025. It's just right about two just after 02:30PM. This is a special meeting of the Budget Committee of the County of Monterey. We are in person at the Monterey Room of the Government Center in Salinas. We are also in person at the district three supervisor's office in King City, as well as in person at the district four supervisor's office in Marina, as well as on Zoom. Supervisor Lopez and ask you are both present. And let's see if there's any additions or corrections to our agenda this afternoon.

There are none. There are none. Are there is there anyone with us for public comment today for items that are within the jurisdiction of the committee but not otherwise listed on the agenda? If you're with us online, you can raise your hand. If you're with us, is there anyone in the monitoring room in person today?

No. There's in the monitoring room.

Okay. And I don't see anyone raising their hand.

No hands raised on Zoom.

Okay. Thank you. I didn't see any either. So we'll close public comment, and we'll go to here. Make sure I'm looking at the right agenda. Go to approval of the action minutes from September 24.

Goodbye me.

Goodbye you. Yep. Same here. Thank you. So I think we're are there any public comment on the minutes? Raise your hand. Seeing no hands raised, we can consider those approved by consensus. We can move on to the consent agenda. We have items let's see here. Two through seven on the consent agenda. Any of these items to pull to Perez Lopez?

None on my end.

Okay. I did have one comment on the budget committee meeting scheduled for calendar year '26. We have some conference conflicts. This is item number four. We have some conference conflicts on the February 25 and May 20. So those would be conflicts for me. I'm assuming that we'll continue with the committee schedule alignment as it's currently scheduled to rotate. So I would not be available on those two. I think NACO is the February 25, and I'm I don't have listed what the conflict is in May, but there would be

a conflict. Okay.

We'll look

into those dates and schedule special meetings for those two months.

Okay. So we'll just need to address that. Yeah. But other than that, we can we can still approve the the calendar as is listed, and then just know we'll need to make changes to those two dates. Got it. Is there any public comment on our consent agenda? Seeing no hands raised, we're good to can approve that with consensus.

Good.

Thank you all for joining us who had consented agenda items. We have, a couple regular agenda items today. Number eight is to receive a presentation on the continuation of the budget committee's roles and responsibilities. And I think is that Michael is, for presentation. The floor is yours.

Oh, thank you. Thank you. Thank you so much. Good afternoon, budget committee. Michael Beaton, assistant county administrative officer. I'm gonna share my screen, I think.

We've got it up. Yeah. Perfect. Thanks. Perfect.

So today, we really have a report back from the last budget committee where we presented the history and roles of the and responsibilities of the budget committee. As a result and outcome of that meeting, we agreed that we would go back, kinda formalize everything a little bit better, and bring it back to the budget committee with recommended changes to the fiscal policies as well as clarification of items that should be brought to the budget committee. So today's presentation is primarily going to be focusing on recommending clarified roles, scope of what the budget committee should be seeing on a routine basis as well as recommended changes to the general financial policies. I see a small typo on the presentation. Apologize about that.

Should be an l. Policies that ultimately would be needed to be taken to the board of supervisors for approval. Shown on the chart on the slide here demonstrates items that are being recommended to be brought to this committee. Examples will be monthly financial reports demonstrating fiscal health of the county, state, and federal government. We have an example of an item that we included in today's agenda, which is item number three, which is just a California Department of Finance bulletin.

So these are items that we would continue to bring to the budget committee. Any fiscal policy changes and county budget development would obviously still come to the budget committee. Sean, shown on the chart highlighted in yellow are more of the significant changes that we're recommending to, the budget committee. The first change specifically clarifies that not all budget related items will be brought to the that will be brought to the board of supervisors will necessarily need to be coming to the budget committee. We are recommending that only significant budget items come to this budget committee.

Budget items that would be considered routine in nature, small adjustments to somebody's budget, small change to a classification of, personnel or salary, would not ultimately come to the budget committee. So examples of, board directed items, referred to the budget, examples would be board sorry. Examples would be board directed items referred to the budget committee, budget impact items that would traditionally be heard by the board supervisors on regular agenda. So anything that would go traditionally to the board as regular agenda would come here first for vetting. And when there is a significant departmental impact or something of high complexity, would be examples of significant items that we would definitely bring to the budget committee.

The other change is a refresh to the list of standing committee items. Attached to this agenda item today is a recommended update to the list of standing committee items, and we'll we have a slide that will go through what those specifically are. So for the standing committee items, the sales office worked with the departments, and really went back to the history of, hey. Why did this item ultimately end up on the standing committee list that are heard and seen by the budget committee on a routine basis? In working with those departments, we try to understand really what the importance was, the origins of it, and really what the impact is if we didn't bring it to the budget committee.

Where else is it heard? Is it does it go to a different committee such as the CIC, the healthy human human homeless services committee? Sorry. Extra h committee, or does it go always go to the board of supervisors? So with that, we did work work with the departments with the following recommended changes.

We're recommending deletion from the standing committee items, the ITD financial report, the status report on capital projects, which is done retroactively as this goes to the CIC, the Medividad medical key capital projects report as it also goes to the CIC, the social services case load report as it goes to the HHS committee, the Mental Health Services Act report as it was originally put on here due to a reversion issue, the winter storms and fire damage report. Recommending to be moved from quarterly to semiannual would be the Medical Center financial report. This is a just a simple move from quarterly to semiannually, and the, a change from semiannually to annually would be the workforce development board financial data. So to kinda give a little flavor with the changes on the first slide that we just went over and this slide, the standing committee items, if you were to look at today's agenda, the items that would not would not have come to this committee would be items five, six, seven, ten, and 11. So that would be five items that would ultimately just go directly to the board of supervisors, versus coming to the or sorry.

Would go directly to the board of supervisors or be heard in another ultimate committee standing committee portion. As related to, the last agenda, the last, budget committee item that we the last budget committee that we had, we identified that there was a discrepancy that we found in the general financial policies when compared to county code. The county financial policies needed to be updated. And since we were looking at the financial policies, we ultimately found a bunch of other changes. That's probably a hard word.

We found a few other changes that we're also recommending as part of the general financial policies since they have to go to the board of supervisors anyway. The first change that we're recommending is in the section for preparation of financial reports, there is references to OMB a one thirty three and OMB a 87. These were actually eliminated back in 2014. So about ten years ago, they were actually replaced with the super circular. So this is just really updating the reference to the super circular versus those OMB guidelines.

The TOT contributions to the road fund, this is just small cleanup language to be very clear that the road fund set aside is at 25%. The budget committee reference, we, recommend a change to, instead of it being the budget committee can direct, to the budget committee, can recommend changes. For grant management, we're recommending the expansion of the language. Currently, the language identifies that any grant that requires general fund contribution must come to the board of supervisors. We're recommending that that actually get expanded to include any grant that might have potential usage of general fund.

So say it's to, for example, build a building, but ultimately to operate that building, you're gonna need general fund contribution. Or if you have a grant that says we are to do homeless encampment cleanup, but, ultimately, at the end of the day, we need to actually pull in general fund dollars to do. So this is just more of a clarification that it includes any potential general fund usage completely. We are also recommending in the fiscal policies to eliminate the ISF reporting requirement to the budget committee. This is an item that's been in the fiscal policies, but has not necessarily been a 100% followed through over the past history of the budget committee here.

So it's just a a cleanup of the language to coincide with what's actually happening with the budget committee. As well as we are recommending a few reserve balance changes and update definitions. We did add a section in the fiscal policy for compensated absences. We are recommending that we establish a minimum percentage that the minimum that the compensated absences assignment should have. We're recommending a 10% of liability.

So whatever the liability is identified for general governmental, which is about 50,000,000, we would maintain a 10% minimum for compensated absences assignment. We also clarified strategic reserve. The current language identified in the fiscal policies for strategic reserve identifies that it should be maintained at 10% of the general fund revenues. So there is other language identified in the fiscal policies that specifically identified and could be alluded that the amount that we have in the strategic reserves specific for Natividad Medical Center should be included into that 10% calculation. However, we believe that it should be separate and that the general fund reserve should just be specific for the general fund operations and that the Natividad strategic reserve portion would be not included in that 10%.

So this is just a language clean that we're recommending there. The other item is to for departmental reserve balances. We tried to be a little bit more clear on the language and specifically put that general fund dollar should be the dollar of last resort. The fiscal policies, allude to it, but they don't necessarily specifically identify it. It talks about the least restrictive dollars should be the dollars of last resort, and this one here, just trying to be very clear that that is general fund dollar for the most part. Besides that, that is the recommended changes that we have with the fiscal policy changes, and the item, and we are available for any questions that you guys may have.

Awesome. Thank you for all of that cleanup work. And to the department heads who weighed in, thank you as well. Supervisor Lopez, thoughts, comments, questions?

You know, Michael, could you take me back to the slide of the reports that would be changed in terms of frequency or reporting at all? The only one that I really have a question about is the storm damage expectations from FEMA item that was on that, the storms and fire damage repair report. To me, that the item that matters is that FEMA reimbursement figure. And so would that be reported anywhere beyond directly back to the board, during budget season, or is that just something I mean, my worry is that we only get eyes on it once a year if that is the figure that's tracked there.

Yeah. No. No. Great question. So when we originally bought this item up, we looked at it. And at the point that we're at now with the individual projects that we have, we are talking about what is still outstanding from FEMA and the state that should be owed to the county. We are currently capturing that as part of our strategic reserve. As as you're aware, I know a lot of money that was taken from the strategic reserve to actually help fund those projects. We are planning on bringing to this committee on a routine basis the status of the strategic reserve and any money that might be outstanding, which would include federal and state funding. That should be paid back to the strategic reserve.

But at that same time, we also wanna reflect overall county emergency. So you could say it it is related, and we are yeah. You could say it is related. And if that is the the the point that you're trying to identify, supervisor, we can absolutely remove this from the recommendation and keep it standing until at least we're a little bit closer

at the end of the day. No. I I think as long as I know that that's where I can expect it to come back so that I have my eyes you're right. So I have my mindset on where I should be looking for it is important. So I I appreciate the explanation. I think with that, I'm comfortable with what we've laid out here. But, yeah, I think that's all I've got, madam chair.

Thank you. Yeah. I I agree agree with agree with George Lopez. Definitely wanna make sure we don't lose track of that item. And I think maybe even given given how significant the amount of money is and how the tracking of it has been challenging for the county, maybe we do keep it just listed for the sake of making it clear to everyone that we we are tracking this and maybe just maybe noting that it will be included as part of the reserve strategic reserve.

But sometimes we have a FEMA dollars that don't get pulled, that we're using FEMA dollar that the reserve that the FEMA dollars that we're expecting to be reimbursed are not always coming directly out of the strategic reserve, but they're supposed to come back into a different account. So it would make sense to put it under strategic reserve, but but but but not always. So I do I think until we're back to a status quo of of having those dollars returned to us, I having it having it called out would make sense. I did have a couple other items that I wanted to ask about. The road fund portion on the slides, says sorry.

On the slide that talks about setting the road fund at 25%, but when I read the language in the when I read the language in the actual financial policies, I think it puts it says something about a cap at 24 25%. It's on page 13. The TOT contribution percentage for the road fund was established by the board and is currently capped at 25% of the total TOT revenue. Is that an interpretation that could mean that it could be less than 25%?

That's a great question. I'm looking at the language now, and I do see that was a original language in the general financial policies. And I know that's not one that we we modified and changed, but I could totally understand the interpretation where it does say that it couldn't really according to the policies, we shouldn't go beyond 25%. But I also see that it could be less than 25% based on how it's written. This could be an item that we do bring when we bring this item to the board, we can come up with a different recommendation to make it a little bit more clear to ensure that we understand the board's intentions with the TOT.

Okay. Yeah. And I just you know, I asked the question, and I appreciate that that there's been flexibility in how that TOT revenue has been adjusted in the development of the the the recommended budget. And I also just want to acknowledge that this has been one of those issues that the board has been in our past couple budgets pretty, pretty vocal about wanting to have that full 25% funded of the TOT go to the road fund to the point where it's been backfilled using contingency dollars to achieve that 25% amount. And so if we're drafting policy, I appreciate leaving flexibility.

But knowing knowing where my colleagues have been coming from over past years, I think that I think I just want to make that clear that I can expect that we would likely be in similar situations moving forward. So if as we're drafting drafting policy, there's there's that reality there. So something to consider. And then on the compensated absences account, and I guess this sort of falls into some of the other questions as we think about general financial policies and how we fund, how we where we where we receive funding, how we're back funding the compensated absences account if we're going to expect to have it funded at 10% of the full liability. We've been pulling money out of that account for a number of different purposes that are not specific to compensated op absences over the past handful of years.

And so but we don't have a specific way that we're funding the compensated absences account. Do we need to include a mechanism for refunding that account, or do you anticipate handling that in a different way?

Yeah. So the thought pattern was every year when we close a fiscal year, we ultimately end up with what would be considered an assigned fund balance. And at that time, I believe we would make either at that time depending on the current economic situation of the county, we would make that recommendation that we refund back to a 10% level if we do have a draw during the year utilizing that allocation. But there could be situations where we might wanna pull it from a different a different part of source or a dissolution of a different balance sheet account or fund component. So I do like the idea of having some flexibility, but at least establishing a minimum threshold, at least as a start to identify where it should be.

And we believe the 10% threshold should be a a pretty good start as it is a overflow account overflow liability account versus a accounting for a full liability.

Okay. And then the other question to that point is, I think there's been some question among some of our departments about the how how that fund could be used. I'm just thinking that that fund is there for and available for for any type of cost associated with end of year uncompensated absences. Whereas I my understanding when we created it was that it was for those sort of large unexpected costs that a department wasn't able to to to sufficiently account for. So, like, when we have a change of of sheriff, for instance, and you have, you know, most of the executive office leaving and that's a much larger than normal transition, the budget wouldn't normally account for in that office or when you have a supervisor leaving or and all of their staff retiring at the same time and they've been there for twenty years and they're all cashing out.

And the department's budget isn't typically prepared to have four people leaving with twenty years of accrued retirement, not just for ongoing yearly standard retire. Do we need to include any language that clarifies that expectation?

Yeah. So we we attempted to write that into the policy where it is to absorb that, but we can definitely go back and look at the draft and see if we can reclarify that even a little bit more because what you identified there is exactly how we anticipate that this should be reserved used. It's primarily just for those apartments that can't absorb it within their current appropriations. Most departments should have salary savings. However, unexpected retirements of large in nature, for example, the sheriff, for example, you just identified, would definitely be an issue that a department would have covering their budget. So we could definitely go back, take a look at it, and before it gets to the board's advisers, maybe modify the language a little bit to be a little bit more clear.

Yeah. So large out, unexpected, out of the ordinary due to significant unbudgeted types of situations. Okay. Thank you. I just wanna make sure we're very clear and that everyone who's on this call and in reading our policies understands that we're all on the same page and that this isn't just another place to find money at the end of the year to backfill retirements that happen on an annual basis.

Okay. And then the last question that I had was on, I think it was section 14, when we talk about grants and grant management and any potential grant that requires a general fund match or potential general funds to fulfill the grant requirements must be approved by the board before the department can apply. And I just do we wanna put in an amount over a grant over a certain amount or general funds that go beyond what the department has currently budgeted or general funds. So I know sometimes there's small grants that departments are applying for or general fund matches that the department might already have budgeted for within their current year budget. So it's, again, not to create additional burden departments who just have an opportunity to put in for something that comes up that would be administrative in nature or smaller in nature that they already have the funding available rather than creating a whole additional set of paperwork that they have to go through and timing that they have to go through to get board approval if they know they've got the funding available to provide the match and it's under a certain amount of money.

And I don't know what that amount would be, but I would leave that to you to decide and determine what would be appropriate.

Yeah. Great option. We'll definitely go back and work with the team to see if can come up with a minimum. I do fully understand it doesn't make sense for us to go to the board for a $5,000 grant that might require a thousand dollar general fund contribution? Totally understand. We'll definitely work on something which is what we can do.

Okay. Perfect. And then I think I think those are all my comments. I'm just making sure I check my notes. Okay. Any public comment on this? Any, staff who are with us, county team members who have comment or feedback that we should consider? Nazar Chand, let us hear from you. Becky.

Hi. Chair Rut Askew and supervisor Lopez. I have a question for Michael. When he talked about significant changes, how is that looked at for, if we're reclassifying positions? You know, those typically always come to budget committee before going to the board. And is that still a requirement?

Yeah. So it's a great question. So I think if it's a one off position, that was done by work working with personnel, we're recommending to reclass one position as a one off. I don't think those would necessarily arise to the level, where they would require to come to the budget committee. However, if it is a overall analysis that was done and we're reclassifying a whole group of positions where it's gonna affect a multitude of items, where there is a financial impact specific due to compaction or compression, then those, yes, would probably need to come to this budget committee. But, again, a one off, I do not believe that we're talking about bringing those items to the budget committee more or less larger scope overall.

Okay. Thank you.

Absolutely.

Great. Any other last call for public comment on this item? Seeing no other hand raised, we'll close public comment, and bring it back to supervisor Lopez. Are you comfortable with the comments changes I suggested?

Yeah. I'm good with

that. The

directions. Objections?

Yep.

Alright. Cool. Thanks again, Michael, for all the work that you put into scrutinizing our policies and procedures and helping to streamline and simplify all of this for us. We appreciate it.

Thank you.

Alright. Next up, we have let's here. Next up, we have item number nine, which is to support authorizing and directing the auditor controller to make some amendments to our fiscal year 2526 adopted budget related and related transfers. And That's me. Jessica, I saw you unmuting, Jessica. Thanks for joining us. Okay. The floor is yours.

Thank you. Good afternoon, Cherudascu and supervisor Lopez. I'm Jessica Cuero Martinez, finance manager three with Public Works Facilities and Parks, here to present this item regarding budget adjustments for ongoing facility maintenance projects. So as a background, a reminder, PWFP manages both the county's capital projects and the facility's maintenance budgets. So each year during the budget development, we do estimate project costs several months in advance.

So once the fiscal year closes, we perform what we call a true up. This reconciles those estimates that we develop during the budget development to the actual project activity. So in this case, during fiscal year twenty four, twenty five, $1,000,000 was allocated for unscheduled maintenance within the facility services budget. And as of June 30, there was a balance of a little over $806,000 remaining. These funds are specifically tied to 14 projects that were still in progress and not finalized by year end.

So we're now coming to you requesting approval to roll these funds forward into fiscal year twenty five twenty six to complete that work. The source of funding will remain the unrestricted net position in building improvement and replacement fund April. The adjustments will not change the overall project budgets or require any additional funding from the general fund or building improvement replacement funds. This is just strictly a budgetary true up to reflect the current status of our projects. So in summary, we're looking for your support to move this forward to the full board so we can complete the projects, and that concludes my presentation.

Comments, questions, supervisor Lopez?

I'm on my end. I'm good.

Alright. Any public comment on this item? Seeing no hands raised, I don't have any comments or questions either. It looks good to me. We can support moving this to the full board with consensus support from budget committee. Thanks so much for pulling it together and getting it in front of us. Of course. Alright. Next up, we have a couple semiannual reports. I guess this will be the last semiannual reports we have for a couple of these. We've got our number item number 10, receiving our Lake Nacimiento Resort and Operations Enterprise Fund end of year financial report for 2425.

It's me again.

It's you again. Okay. Got back up. Welcome back.

Now I'm here to present the Lake Nocimanto Resort year end financial report for fiscal year twenty four twenty five.

We'll do

that next slide. So in fiscal year twenty four twenty five, Lake Nacimiento operations remained stable. However, revenues fell short of budget projections. Visitation was lower than we had expected, and we're attributing that to the increased competition with Lake, San Antonio since it's up and running and doing really well now. There was also a decline in water levels that we've been told by our management company did, of course, impact visitation.

And then in addition, the lodge renovations took longer than anticipated resulting in missed revenue opportunities during the delay as well. Expenditures were carefully managed. We stayed under budget, which was great. A major highlight was the completion of the lodge renovations funded by nearly $3,000,000 transfer from the, from the building improvement replacement fund. And with this, investments, the or or with this investment in net position grew to 6,400,000, so it nearly doubled from the start of the year.

That's just an overall summary. We'll now get more into the details of the revenue and expenditures. So revenues totaled 4,100,000.0. This did fall under budget by 679,000. As I just shared, the shortfall was tied to reduced visitation.

We also had expected, you know, the reservations of the lodges to be booming by the time the the end of the or before the summer began, but that didn't happen. And it really was because we discovered some rodent damage and some additional water intrusion that we didn't know was there that ended up delaying the project. So that just threw us off a bit. We also received a 111,000 on ARPA funds. That was to renovate the public laundry and housekeeping building, and it includes some interest earnings there as well.

And then lastly, we received the $3,000,000, from building improvement improvement replacement fund April for the lodge renovation. And then if you look on the expenditure side to the right, expenditures came in at 4,100,000.0. That that fell under budget by 258,000. Most of those costs were for lake operations, just normal ongoing operations with only 200 a little over 200,000 for the annual depreciation of capital assets. And then Explore US, which is the management company at Nosumento, they did a great job, managing costs and in response really to that drop in revenue.

And and our team meets with them on a monthly basis going over budget to actual all the forecasting and and and trying to make sure that we keep we keep on track so that we're not we're not going over budget. We really saw the biggest savings in staffing due to vacancies. And although the savings were welcome this year, of course, because we had that that drop in in revenue, recruitment and retention does continue to be, an issue. It's challenging because of the remote location, so that is something that they continue to work on along with us. Ultimately, those savings that that Explore US had were were able to be used to, to purchase some new furnishing furnishings for the lodges.

So, that worked out. And then overall, net income before the $3,000,000 transfer for that lodge was a 113,000, so we still turned a profit, which is a good thing. Now moving on to the bottom line, the net position. We started off with $3,300,000. Over the year, we saw a positive change of nearly 3,100,000.0, again, large largely driven by that transfer, for the lodge. By the end of the year, the net position totaled 6,400,000.0, and that is broken down into three categories. So of that amount, 3,700,000.0 is investment in capital assets. That's basically the value of your assets, after depreciation and any debt you owe. So it's not liquid cash, but it's in assets. Right?

Another 585,000 is restricted for the Quagga Mussel management and insurance proceeds. Hopefully, we're gonna be using quite a bit of that amount for the Quagga Mussel management because there's some projects that Nate Merkel is working on at both Lake Nacamanto and San Antonio. And then the remaining balance is the 2,100,000.0, and that's unrestricted. So those are funds that are available for ongoing operations, and really is is is nice. We're we're in a good spot right now.

So looking forward, with those lodge renovations completed and a planned rate adjustment for, the lodging rates, we do expect to boost revenues there. So that's a good thing. We're gonna have to, you know, continue to focus on the water level fluctuations, staffing challenges, and and, of course, the competition with Lake San Antonio, which the county benefits on on both sides, but, it's something to just note that it does impact, Nosyamoto. And overall, the financial position remains strong entering into fiscal year twenty five, twenty six with that 2.5 or $2,100,000 unrestricted, net position. So that concludes my presentation, and I'm here for questions.

Supervisor Lopez.

I don't have any questions. Just an appreciation. I know it's kind of like looking at a single side of the coin here knowing that we're operating both lakes, but the other is no longer in the enterprise zone. So it's tough to see them right side by side, but I know that the increase that we saw at San Antonio was a net gain. And so overall, the fact that we're even here and up there is an overall up year for us in the big picture.

So I'm excited about this corner that we've turned and the fact that the board has committed right to spend profits made at San Antonio at San Antonio. I'm excited to see what we can do with those investments long term, bringing folks back into the parks and allowing them to enjoy their facilities in ways that we haven't been able to in a long time. And so understand that this year was a bit of a a push year, but given the new condition of those lodges, it's really exciting. My in fact, one of my staff members recently went down and had a girls weekend away at the at the cabin. So I think the one thing we have to address, I know that Brian's heard this directly, just the way it shows up when you register to rent a unit.

It looks like it's twice the cost, but it's because of the security deposit. And so clarifying some of that might help us draw more folks into those lodges now. And when I say they look like they're worth the amount, right, with the double, but, again, we wanna draw make sure everybody feels that those lodges are for them and it's for all of our community. But the investment in those is quite beautiful, and the outcome was well managed. So good job to the whole team in getting that done in that fiscal year under budget and excited to see what we're able to turn around this year, given the fact that we're coming to the end of really their high visitor season here for 2526. But thank you, Jessica.

Thank you.

I don't know, Chris. I really think we probably need to have a budget committee meeting down at Nacamanto so that we can really determine firsthand the status of the lake before

fight you on that. Wouldn't fight you on that.

San Luis Obispo may say something, though.

Before we can comment on the the end of year report, I'm I'm just feeling like it's hard to look at the the writing on a paper and and not not walk the not walk on the dock and personally experience the I think the last time we stayed down there, I was pregnant with Quinn, and and that was that was a minute ago. So, yeah, I definitely need to to find a reason to to make a make a visit. But the whole team I know has worked really hard to to turn things around. The one the one question that I do that I do have is just in terms of, you know, we the county, I think, is is looking at at I just wanna acknowledge this is a complicated financial tracking given that we have multiple like, there's a there's a water resource. The the dam is a water resource.

So there's just there's a lot of different financial benefits and financial factors that go into the management of this particular into the broader asset and broader resource. So there's that picture, but there's also sort of the the piece where the county has invested resources for for the benefit of sort of rebuilding infrastructure at at the resort. Do do we track that those investments over time and then look at how the return on investment like, is there a way that we manage that or watch that or track that, the county's return on investment of an in that of of resources?

Yeah. I mean, we're not specifically, to to be honest, supervisor. I mean, we obviously are tracking our assets, and we're watching the revenues as they fluctuate. I think the challenging thing is that there's so many factors. Right? So something new goes in. Right? And you see the rev so we do track it. I can't say we don't track it. We do track it. So we'll see we've got new boats. We see how the revenues are increasing. Right? But if it's a low water level, they may decrease. So there's all of these puts and takes that make it a little challenging to see, like, the true return.

But we are managing and, the revenues by, like, type. Right? So we know what we're bringing in for that asset that we did build and develop. It's just that there are there are multiple factors that contribute to what happens in cheer, depending on water levels, depending on weather and, algae outbreaks and, you know, all of these things that sometimes are outside of our control. So Right. Yes. We are tracking. And and we can bring more information if there's something particular that you would want us to to bring forward.

Yeah. No. Just I was curious, but that's good to be we're we're tracking it. That's careful. Okay. Cool. Thank you. Yeah. Could I open it up for public comment? And we do have a hand raised by Nicholas Pascouli. Thanks for joining us, Nick. The floor is yours.

Good afternoon, chair Askew and supervisor Lopez. I don't know if it's appropriate at this point, but I did want you to be aware that we are working with Brian and his team on developing a marketing campaign for the lakes and to drive traffic to the lakes kinda regardless of the conditions and providing the public with opportunities on the things that they can do at the lake. So that is in the works, and we should have something completed by the end of this calendar year.

Awesome. Thank you for that update. I love that. I just had a call with, Rob O'Keefe from SC Monterey, and we were talking about some of the ways that we can help, more broadly, bring, bring build off of some of the work that they're doing. I know that I know that we're we're we're piggybacking with San Luis Obispo here, but I think there's opportunity there with with them as well. So make sure you you pull him in and and build off of what what they've already got in place.

For sure. And they are aware of the campaign that we're working on as well.

Fantastic. Alright. Cool. Any other public comment on this item? I don't see any hands raised, so we'll bring it back. Think this is just a receiver report, so we will receive the report. Thank you so much. And move on to our next item, which is to receive a key re receive a report on key capital improvement projects managed by public works facilities and parks for the period of January 2025 through June 2025. And I'm not sure who's presenting, so we will

Supervisor Riaz. Welcome, Lindsay. Yes. Lindsay Larrabell, the assistant director for public works facilities and parks. I will be presenting today's status agenda item. Just confirming I'm making sure you guys it looks like it's on the screen, so I'll go ahead and get started. This is, again, for the Department of Public Works Facilities and Parks. These are the capital key capital, projects, so it doesn't include everything but most projects that both the Public Works and Facilities Division work on. Since this is semiannual, this is for the quarter of January first through June 30 of this year, so quarters three and four. I know it's a couple of months after that point, but these are we manage multiple projects here.

So you can see 54 that it takes a little bit to reconcile, but we're pleased to bring forward to you a snapshot in time and and what our team has accomplished during that period. So, again, we had 54 key active projects for total project costs. So, again, that's not all what secured funding is, but $7.07 $22600000.0122600000.0 dollars worth of, capital projects. Roads and bridges division had 23, 270,000,000, and facilities had, was working on 31, projects for a total project cost of $452,600,000. So with that said, I'm going to highlight some of the projects that were completed during this reporting time starting with facilities.

This is the Branda CSD San Gerardo water system improvement at project cost of 925 k. It was funded by the American Rescue Plan Act or ARPA funds as we may know them. So it just shows all the upgrades to water meter storage tanks, generator, fire pump, and motor, booster pumps, control panel, connection system between the San Juan water system and Foothills Estate. So this just shows, again, just all the systems that go into these projects and the benefit, you know, when we have these upgraded systems, the resiliency, and the liability we have. So showcasing that.

Next, this is a great project. I always like sometimes if I have room, I'll do befores and afters, and I love roads because it just really shows the benefit of work on these pavements. So you can see at the top two photos are the before and the below or afters. This is the Las Somas Drive bicycle lane and pedestrian project. This was a project cost of 6,340,000.00. It was funded between a combination of a 2.5 AT active transportation grant to measure x funds. This is located between Hall Road and Thomas Road. Oh, it's had two d's in there. Had to upgrade change that in North County. Again, it's road riding, drive in driveway reconstruction, new curbs, gutters, sidewalks, class two bike lanes.

That's a designated lane within the bike lane within the road. Some, there was a retain wall and some stored water treatment, infrastructure put in. Secondly or thirdly, for, public works, they completed this under CSA 50 and Riverside Way Detention Pond improvements. Again, we have some before and after here to show what we started with and what we ended with. There was a project cost of 400 k funded by CSA fifty.

This is a effort to improve stormwater management by improving access and functionality to these detention ponds and sediment buildup along railroads. So by by doing this work on the back end, we improve, stormwater management on the on our roads. We have vegetation removal, hydro jetting the storm lane, storm drains, these retention ponds, concrete pads for store portable storm water pumps, electrical cabinets. You can see that in the bottom two, the four and a half tier. We created access road to these utilities and install SCADA equipment to monitor pumps.

I forgot the acronym I wrote down. I apologize. But that, again, that's a system that allows our team remotely to sensor the the water heights and the systems that are monitored for the pumps. So we have that, real time, monitoring of these systems. Okay. So going over to facilities, we had quite a few projects finished this time. This during this reporting period, we had two fifty Franciscus White. It's Franciscan White. This is the King City Courthouse parking lot. This is a shared facility with the county and the courts.

The top left photo is a before of just the conditions, and the bottom is and the bottom, left and to the right are some after. So this was a repaved stripe, enhanced circulation. We addressed ADA egress or access traffic path of travel to our facilities. Enclosed there was an enclosed staff parking area that was installed, improved drainage of storm water control. In addition, we were able to install energy efficient lights and do some landscape improvements.

This is in a security upgrading at 168 West Dallas South. So this was on the 3rd Floor. This was all open. These counters were existing. It was just open, and we were able to put in security glazing just to improve, but didn't, didn't cut off visibility, but definitely improved security. So it was just the design fabrication installation, of these windows as well as the transaction window. We were also able to complete an upgraded, security glazing at the public defender's office. So there was something here. We increased the, the security of those windows. And so same thing.

We did design fabrication installations through security glazing transaction window within on the 2nd Floor within the public defender's, department or their their unit. This was an exciting one. This was a move from 1441 or this is at 1441 Schilling Place. This is the child support service office. This, this unit itself was vacant for quite a few years.

Think this used to be the former economic development and workforce development unit. It just sat vacant for years. We really worked to get bring in tenants into here, and child support services was looking to relocate from a lease into a county owned facility. It was a project cost of 1,130,000.00. They had a state grant that they had secured, and they provide a little bit of their funding to support this as well as 330 k from our fund four seven eight.

So we were able to do a plan design interior model of this vacant suite. We added interior walls, painting, upgrades, electrical, down lighting, and ADA accommodations. Again, it utilized, stayed with existing footprint but helped create a safe and modern accommodation for child support services and the public in which they serve. Well, we can see also real time supervisor Lopez. That's also a backdrop of his new office.

This is a great project as well. This was a facility down in King City that the ad commissioner bought. There was quite a few, there's different suites. This was formerly a church, and it became vacant. And we decided to, work with, supervisor Lopez in his office to bring him from Greenfield into King City.

And so using the Act Commissioner's Capital Project Fund, they had some money set aside. We helped them implement a tenant improvement into this great space in which it has offices and meeting rooms and and accommodations and access to the public. So that was a great tenant improvement and utilization of that space, and we're able to get our supervisor into King City. Our not so glamorous projects, but extremely important. These are things that you don't really see.

This is called a jail sewer lift station. So why these are important? Again, what getting, once we disposal of the facilities into this. But, what it was is there was just one lift station, and that's the called Muffin Monster. Actually if any debris gets in there and that could be anything from bedsheets on, and it was we only had one, and it could break easily or it was at risk of that.

And what would that would do? It would take the whole jail offline. So we we secured funding. You hear okay from fund four seven eight, and a bypass lift station was created, creating redundancy and resiliency. So if one system goes down, there is still an operating system without creating disruption to the jail operations.

Lastly, this was at the at 1322 Nittiverrod Road. This is the shared facility with DM and ECD. This was all opened and exposed, and so working with our department, we helped create a capital improvement projects, and it was project cost of a 100,000,000. There was a combination of funding by the departments and fund $4.07 8. So now what you see here is a secured well, not only did we secure the parking lot, but we're able to resurface and the parking lot.

There's car man car gates as well as man gates, so it's now a, secured facility, at the Arnautipadac campus for, critical services. And that wraps up the projects for this reporting period, and I'll stop there and open up for any questions or comments.

Thank you.

Thank you, Lindsey. Yeah. Let's see. Supervisor Lopez, any comments, questions?

No questions. Just a comment. Just say thank you at the project here in South County. It was meaningful, and I can share that in the last few weeks, we've had so many different folks use the room from the maternal mental health task force to, some groups associated with First Five. We even had a private business reach out. The Dutch bros next door said, can we use your conference room? We don't have a place where we can have 24 team members come together. Absolutely. So they spent an afternoon here in the office using the conference rooms, which we've dubbed community rooms, and it's been absolutely amazing to have that available to community. And it was a big project lift. So thank you, Lindsay, to you, the team, Florence, and everyone who pulled this thing off. It's been a true asset for all of South County. So thank you.

Thank you for that.

Appreciate it. Any public comment on this item? Nope. I do see hand raised. Sorry.

I Under sheriff Boyd.

Under sheriff Boyd. Sorry. Thank you. Was in the wrong list. There you are.

Yes. Fair Fair ask ask you, supervisor Lopez. I just wanna extend the sheriff's office thanks to Lindsay and her team for all the work, King City and the jail. The lift station is a significant asset to the county. We we we had so many disruptions when when the munchers would go down and and cost, and then we all the ancillary costs going then. So just wanna commend her and her team for the work they've done, and we appreciate the collaboration.

Thank you. Appreciate that.

Awesome. Thank you. Thank you for joining us, Keith. Any other public comment? I don't see any hands raised unless I'm missing someone. Okay. Okay. Perfect. Well, thank you for the update and the report, Lindsay. And I think we're again, we're just receiving this report. So lots of attachments there for anyone that wants to take a closer look, and we can move on to item number 12, our final report today, which is to receive and accept a cannabis program fiscal year twenty four twenty five annual budget review. And I think I see Michelle House ready to go.

Yep. We're just loading the slides. Thank you. Chair Askew, supervisor Lopez, Michelle House cannabis program. I'll wait for the my team to get those slides up here shortly.

And I think we've got them up on our, end as well

Okay. If she has trouble. I know this morning she was having some Zoom issues.

Michelle, if you need me to, I can, share the presentation for you.

Just in case. And and I, my apologies. And as I said, Arcelli was working with IT. That would be great. Thank you so much.

Go team.

Go team. Exactly. It takes a village. Perfect. So thank you so much. So, today, I'm just gonna be sharing fiscal year, 2425, and I'll be sharing a little bit with you about cannabis assignment, our Department of Cannabis grant. And I decided to add it this year because it a form of funding. Although it is a grant, I wanted to share a little bit about what we did with that money and changes to the cannabis canopy and how that feeds into the bigger picture of tax revenue. So next slide, please. Thank you so much.

So this slide, on the left, you'll see this is the program allocation by department. The board approved 14.15 positions at a cost of 3.4 across seven departments, and I work with these seven departments to get the work done. And what you can see is, basically, on this slide, the little circle, the donut, you can see the departments and the FTEs. I do wanna make a comment when you see county council there, you see a little sliver, but county council does not have a dedicated FTE, but rather an amount. And so last year, county council had allocated 80,000.

They bill when they are used. And then on the other side, you'll see the staff cost by department. So district attorney followed by the program, sheriff, and so on. And again, at the bottom, county council because of the small

amount. Next slide, please.

Thank you so much. So this is actually the utilization. So as I shared in the slide previous, all the departments, this shows by percentage and then by the ranking, the amount that the cannabis allocation was drawn down or utilized. A couple things to keep in mind. When you look at this, you'll say, hey.

What's going on with the auditor controller and the treasurer tax collector? How come it's not a higher amount? And I wanna share with you that both those departments during last fiscal year had vacancies. And even during those vacancies, we had staff stepping in. So we had the treasurer tax collector working, but not necessarily drawing down those funds.

And then the auditor controller position actually had someone step in, and he is actually several steps below. So even though he's drawing down those funds, he is paid significantly lower than what was previously set aside. Okay. Next slide slide, please. Perfect.

So this shows other cannabis revenue, and what we mean by this is the revenue that we receive through other ways. So for example, that can be revenues coming in for direct fees for cannabis business licenses or permits, like when we issue penalties and fees when you don't pay your taxes on time. And you can see there that a total of $259,009.48, so we can just say 260 was brought in. The program brought in 94,000, and we bring in additional funds through primarily our cannabis renewal. And then anytime one of our growers wants to modify their canopy of which they're allowed to do, meaning adjust their canopy two times during the life of their yearly cannabis business permit.

They can go up. They can go down, and they're allowed to do that two times. But anytime they do that, we charge a fee because we have to adjust things and change things and reissue the permits and let departments know that. And when you look at the amount, we are actually part of planning and engineering services for the amount that we brought in.

Okay. Thank you. Next slide, please.

This is gonna show the breakdown of what we did for our local jurisdiction grants. So in 2022, we received $1,700,000 from the Department of Cannabis Control, and we had three primarily kind of focus areas. So we had pass through funds, which were to our cannabis farmers. And keep in mind, this grant specifically is to move our provisional licensees to annual because a few years ago, the Department of Cannabis Control said we are no longer gonna work on an idea that you'll have a provisional license. We want you to finish up the things you need to finish when we let you start a few years ago and move you to an annual.

So at that time, the Department of Cannabis Control said we'll help those local jurisdictions with that, and we'll issue these funds out. So we were able to provide pass through funds to help those farmers move and use that money to move to their annual. We were able to reimburse cannabis property owners, the costs associated with their land use permits, and then we were able to hire outside vendors to update the cannabis business permit module, making it easier for you to either apply or renew your cannabis business permit. K. Next slide, please.

This is really important, and I did share this with my team and with staff during the cannabis committee meeting. This actually shows the history of where we have been both in our canopy kind of historically, and then I can talk to you a little bit about this trend. But, of course, as you can see in 2122, we kinda had our highest square footage in the trends, and then we had what we call the economic downturn of 2021. And as you can see following that, you can kinda see that downturn. Then in 2324, something began to change, And I'm gonna talk to you a little bit about outdoor, and you'll see that that bit on the top, that yellow, that's the outdoor.

And the Department of Cannabis Control had decided that moving forward, they would allow individuals within the greenhouse environment to do what we call outdoor, meaning they're growing in an indoor environment, but they are not using lights. And so we kept up on that, and we also addressed that locally, and you can see that trend. So what you'll see at the very bottom in blue is kind of a stable for our indoor. So those are individuals who are inside using lights and actually within a building. Right?

Not not necessarily greenhouse, but a building. And then you can see in the gray our nursery, and then you can see the mixed light. So the mixed light is the orange, and that's where you can begin to see, obviously, the square footage decrease, but you can see that trend in the last two years where you'll see especially in '24, '25, you can see that outdoor really, really picking up. Now outdoor is very interesting, as we said, because it's gonna save them money in two distinct ways. It's gonna change basically what they're doing as far as their square footage for tax.

They're, pardon me, they're cutting it in half. So what was approximately a dollar 46 per square footage now becomes 71¢, and then they're also gonna be saving money because they no longer have a power bill because they no longer have lights. And, of course, in the next slide here in a minute, you'll kinda see why I put this up. But anytime we obviously have a decrease in our square footage or we have a decrease in how we are taxed or being you know, how they are kind of doing their business and changing the way they're being taxed, that's gonna affect our tax revenue. So next slide, please.

Thank you. So on the left, you'll see I did a little history here of projected versus actuals. So for 2425, we had projected 4,000,000 coming in, and we actually were able to receive 3.9. And she I know. Wee, everyone, like, do the wave. It was very exciting. I have to tell you, I've been in this position about a year and a half, and this last year, it was kinda nail biting for me. I was like, wow. Okay. And I'm I'm still trying to learn trends and and how things work.

We also have changed working with the treasurer tax on the auditor controller how we began reporting for this new fiscal year. Because prior, we were including when when I would look, for example, at fiscal fiscal year 2425 in q one, we had taxes that were still coming through that were late, that were being collected and counted, but they actually were part of the prior tax year. And so we're kinda cleaning up. And for this year, we'll do it a little bit differently, and hopefully, it'll be shown a little more real time. So on the other side, you'll see payment plans.

And for this fiscal year that we're talking about 2425, we have completed all the payment plans. So you can see in the gray who made it, '27 completely paid off, the 2223. And then for the 2122 that just ended a few months ago, we had '21 either default or close and 11 completely paid their bills. So moving forward, we will not have any payment plan revenue coming in. We have cleared the decks.

All we will have is our canopy and the tax on that and our gross receipts. And as I had shared prior with supervisor Lopez, who is on the cannabis committee, I had let him know, I base the next fiscal year on what we're doing for Canopy because I can never really tell you. I'm I'm working currently on pulling some history over gross receipts, but gross receipts come and go, and they're up and down, and that's kind of what comes in from our dispensaries. And so I kinda consider that my, what I call, like, my unicorn sprinkle on on the canopy because if people are adjusting the canopy or if a business closes, then if I'm at a certain revenue, then I know that gross receipts can kinda help and backfill that. And that's how I'm working for this next fiscal year.

So next slide, please. This is my final slide, and this is the cannabis assignment. So a total amount was allocated over if you look at that $2,000,000, but we only used and released two or, excuse me, 524,000. Predominantly, sheriffs allocated funds for their body cameras, and the reason we didn't need to pull down that amount is they actually received ARPA, which covered almost all of the body cameras. Then as you can see, it's the a b one zero two, some staffing, district two security improvements, district five office improvements, and the civil rights had a contractor doing some work for them.

And then if you see, you know, kind of I divided it up in blue on the other side there, you'll see predominantly public safety staffing and the county improvements.

And that is the end.

Alright. Thank you. Comprehensive. A lot of details to track. Supervisor Lopez.

I appreciate the presentation. This is the second time I've seen the majority of it. There were a couple new slides in there from the version I saw last week, but thank you, Michelle, for bringing this forward. Absolutely. Know that the questions I raised, the cannabis committee remain and look forward to the responses to those questions, particularly around enforcement and some of the actions that we're taking in the context of the questions asked by industry over time about specifically where the funding's going that they're helping to put together.

And, obviously, there's a constant call, in fact. I think just yesterday, I heard from someone who mentioned, oh, Humboldt just removed all of their taxes. Why can't we do the same? But I think the board has been clear in its direction to try to at least have the program pay for itself. And the challenge that you have with the constantly moving target for that question is a real one.

So thank you for all that you're doing in order to try to keep us right level in that sense. And so it's much appreciated the effort that goes into balancing these different demands and draws on this funding that we know is necessary in order to complete the expectations to meet the expectations of the public when they passed the local ordinances by vote and local measure that allowed us to bring this industry to Monterey County. So I know it's a challenge, but thank you for the work that you're doing to keep this up and look forward to the follow ups that we've already got scheduled on some of these items. Thank you.

You're welcome.

Yeah. Thank thank you. I'm I I know it's a budget update, and I'm sure the cannabis committee has a whole different set of questions. And that was an interesting one that you just posed, Chris. I wasn't aware that Humble was eliminating all taxation on cannabis.

I think that would raise a whole bunch of questions for me around, are they also asking for the elimination of all of the enforcement around the regulated market because I think that really is a whole portion of the the additional costs that are that are that are at play for us. And I think anyway, whole whole different conversation to be had. But I I I'm sure that that conversation is taking place in in different different venues. So but, Michelle, for the purposes of budget committee today, I really appreciate having you leading tracking the information that you're tracking. I think it helps us answer other questions that will come come our way.

And I know that where where where I've thought in terms of the tax the tax question, we did have voters that passed, in this case, were stewards of a voter passed initiative that put in place taxation ranges of which we currently sit far below what the voters had designated. And I would have to encourage anyone who wants us to continue to fall below that voter pass range. I think at some point, we're going to have to reckon with asking the voters to to correct and give direction on what what they want to have happen with this industry on a larger statewide directive. I don't know if that happens anytime in the immediate future. So for where we sit right now, I'm appreciative of the report and I'm happy to open this up for public comment for anyone else who wants to weigh in on the presentation.

Seeing no hands raised, I appreciate supervisor Lopez's comments. I think in this case, we're just simply receiving or accepting the report, so we'll do that by consensus. And this is the final item on our agenda today. We do have a special meeting scheduled on November 14, and I know Michael's working on more information to bring back to us for that meeting. Thank you again, Michael, jumping in to get your arms around all of our county budget items and issues and funds.

And we appreciate the time and focus and attention that you're taking to understand Monterey County's unique budget scenarios and situations, then we're happy to have have you and your team working with us. So with that, we will adjourn this meeting and see everyone back here on November 14. Thank you.