City Council - Special Meeting

Good evening, ladies and gentlemen. I'm going to go ahead and call the uh New York City Council meeting to order. Let the record show that all council members are here except for council member Eve Little, who will be joining us later this evening. If I could please uh ask everyone to stand for the pledge of allegiance.

I pledge allegiance to the flag of the United States of America and to the republic for which it stands, one nation under God, indivisible, with liberty and justice for all. Ladies and gentlemen, we have a number of commendations and recognitions tonight that uh I'm happy to share with you. As we all know, this is Women History Month. for those of you that did not know that. And I wanted to take a moment to recognize all the significant women from the city of Newark that represented our community as council members. Uh it's not often we have an opportunity to recognize those folks that served the community, uh did so faithfully, did so with the mindset I'm doing what's in the best interest of my community. Shirley Cisk served the city of Newark from April 1972 through November of 1993. Marilyn Miller served the city of Newark from March 1977 through March of 1978. Susan Johnson, March of 1985 through March of 2007. Notice City of Newark does not have term limits other than the voters will vote you in if they like the work you're doing or they'll vote you out. Those are our term limits.

Susan Bogs, November 1993 through 2001. Anna Apadaka, December 2005 through December of 2014. She had so much fun doing it that we brought Anna back on an interim basis from July of 20h 24 through December of 2024. Uh she served the unexpired term of Mr. Council member Mike Buchcci. Maria Susie Coyazo November of 2011 through December of 2024. And if there's one thing we want to remember from former council member, Vice Mayor Susie Coyazo, it is by Newark. That was her that was her theme. Council member Eve Marie Little was elected in December of 2024 and she's currently on the city council. And of course, Council Member Julie Delcantio, also elected in 2024, and currently on the city council. So, I don't know if those folks are watching or are in attendance, but I want to make sure we give them a recognition for their service TO OUR COMMUNITY. THE FIRST ACCOMMODATION. YOU KNOW, we we we just do things differently here in Newark. And when we have a resident who reaches 102 years of age, we're going to recognize them. And so I'm going to invite the family of Catalina Faras to come up and join me. Her grandson, nice to see you.

Nice to see you,

Catalina. Again, 102. Uh we were hoping she could make it tonight, but at 102, we certainly understand. And when you're 102, you do what you want to do when you want to do it. That's your right. That's what you've earned. Catalina Ferious was born in 1924, has been a cherished member of the newer community and a proud resident of over 77 years. Our city is only 71 years old. So, she was here before we even became a city. And since 1949 and on the occasion of her 102nd birthday, we celebrate her remarkable life, enduring spirit, and decades of dedication to family and community. Whereas Catalina's parents, Teddosio,

doio,

thank you, and Petra Flores were early Newark residents who settled in the community in the 1940s on Walnut Street, contributing to the early growth and history of the city. Whereas Catalina's parents were among the first parishioners of the original St. Edward Catholic Church located on Sycamore Street. Catalina herself became a devoted parishioner of over 70 years, continuing the family's deep connection to the church and faith community that has supported generations of families in Newark. Whereas throughout her life, Catalina developed a deep love of gardening, working with Mrs. Patterson at Ardanwood Historic Farms and Naka Niles Nursery in Fremont. Catalina recalls traveling with her sister Emma to the hills that are now part of Coyote Hills Regional Park where they used uh bay water to plant saplings along the hillsides contributing to the landscape enjoyed by residents today. Whereas Catalina's father served as a foreman supervising agricultural labors in Newark throughout the berero program, a federal initiative that brought Mexican workers to California during World War II. And these workers were housed on the upper floor of the historic Naughty Pine restaurant in Newark. How many remember the Naughty Pine? Not many. Is that you, Jack Dane, raising your hand back there? Whereas Catalina and her husband Manuel Faras bought their home in Newark in the 1960s where they raised seven children, all of whom attended and graduated from Newark public schools. Whereas Catalina's legacy continues through her 11 grandchildren, 11 greatg grandandchildren, six of whom are or will be graduates of Newark Unified School District, reflecting the family's enduring connection to the Newark community. Now therefore, I'm Michael Hannon, mayor of the city of

Newark. on behalf of my colleagues on the city council commend Catalina Nefarious on the occasion of her 102nd birthday and recognize her lifelong contributions, her deep roots in New York's history and the lasting legacy she has created through her family and community. Again, I hopeful she's watching at home. If not, she can certainly see this later. Let's give her a big round of applause. I'm going to present this to her grandson and I know he'd like to say a few words. Here you go, my friend. All right. Well, first, uh, yeah, my grandma's watching at home. So, hello, grandma. And special thanks and to Aunt Stella who's taking care of her and, uh, I have two other uncles that take care of her daily. U, my uncle Edward and Carlos as well. So, um, like you like the mayor said, we have deep roots here. Um, I didn't grow up here. I grew up in Fremont, but I did ra uh raised my two kids here, and they are a product of the New York, uh, school system. Uh, not only do we have some, uh, people that work here, uh, but also have businesses here, uh, such as my cousin, uh, who's who's now here, um, has a, um, automotive shop, and, uh, and my wife works for the school district. My cousin Ailia works for the school district. So, there's grandchildren, great-grandchildren that still live here. Uh, and she's also has a sibling that's a few years behind, Emma, who's also a a New York new New York uh resident. Um, so, a lot of history here, a lot of memories. I can go on and on, but uh I don't want to take up too much of your time. Appreciate the the award, and I just uh want to say that I'm honored to receive this on behalf of my grand my grandmother. I am the first great uh grandson so of the family. So thank you

on the picture. It's the time to come up for the for family history. This is family history. All the family needs to come on up. Yes. Make sure you're seen in the photo because this is family history. I think we might have to move on the right hand side over here.

Sure. Come on up. All right. Ready? One, two, three. Perfect.

Excellent. Congratulations. The next person we're going to be commending, um, Miss Julie Borggo. Julie, nice to see you. This is I've had a chance to uh chat with Julie and I've met her a couple times um because of her significant involvement in the young Arthur author's program here in the city of Newark. And when I found out, I believe the last time I attended, I believe it was your 31st year if I heard correctly, and I thought, you know, that's a person that needs to be recognized. You know, first of all, education is so pivotable pivotal in our community. And it's so critical that we get our kids to start reading at a young age. And when you see the work that Julie has done in not only getting these kids to read, but to write a book, that's what these kids are doing. And a lot of these books uh have come and are at the Newark library. So in fact I believe and I don't need to put him on the spot but I think council member Jorgens whose mother taught in Newark for many many years had his book published at at the Newark library. We're not sure if it's still there or not. I think family may be checking it out on a regular basis, but uh again that that is the type of historical program that we have here in Newark that is still so significant and it's with great pleasure that I wanted to recognize on behalf of my colleagues Julie for her work. Whereas uh Julie has lived in the New York City of New York

since 1984 and began volunteering, by the way, volunteering at Lincoln Elementary School in 1986 when her son was in kindergarten. Julie applied for a library position and was hired at Lincoln Elementary in 1994. Julie, inspired by her love of books, started the young author program in 1995 with the help of Lincoln Elementary parent. Over the years, she has organized over 30 authors to visit the school. These authors encourage students to use their voices to write books. Whereas the Lincoln Young Author program has inspired over 1,200 students to write books since its inception. Approximately 600 books written by Lincoln students have been added to the New York Public Library as part of their collection. In 2018, Julie applied for and received her first grant from the Newark Betterment Corporation to fund the Young Authors Program Districtwide, allowing all Newark schools to uh the opportunity to successfully run the program, giving thousands of students the opportunity to write their own books. Whereas in addition to managing the young author program, Julie created a virtual library during the pandemic for students to access 150 books from home, served on the parents and Lincoln staff board, ran over 60 book fairs, co-produced the talent show, and assisted with the turkey trot and readathon. No time for sleep. No time for sleep. Now therefore, I, Michael Hannah, on behalf of my colleagues on the New York City Council, really want to commend Julie Burggo for over 31 years of library service and thank her for sharing her love of books with children and giving them the opportunity to express their creativity through writing. Let's hear from Miss Borggo.

I'm I'm not much of a public speaker. I should have you come up and speak for me. Um I just feel like it's been an honor and a privilege to be able to work at Lincoln for the last this is my 32nd year. Um so I'm just thrilled to death to have been there for this many years. I do have not that I want to correct the mayor, but the first I got three colleagues up here that do that all the time. Okay. Okay. The first um grant that was written, I didn't write that one. I've just continued it on from then. So, I should let that person take credit for that. But, um, thank you again. I appreciate the recognition. You're welcome. CONGRATULATIONS.

It came out, but I imagine you can probably figure out how to put it back. Oh, yeah. Yeah. Yeah. Thank you.

I will be admonishing staff later on this evening. Um, you know, those things just aren't supposed to happen, Mr. you know, so we we that's why we have this door here that goes into a back office that's soundproof so you know crying and screaming can go on. So um no thank you Julie for your continued work and I'm hopeful that Julie will continue this work and if uh for many many years and u once her time she pass hopefully pass it on to another volunteer who will continue that uh great opportunity for our kids. Next, I'd like to recognize March 2026 is celebrating senior nutrition programs and their efforts to end the weight month. And I would ask somebody from SOS, better known to me as Meals on Wheels, Tammy Duran, to come up and join us. How are you? Nice to see you. March 22nd, President Nixon signed into law a measure amending the Older American Acts of 1965 to include a national public private nutrition program for individuals 60 and older. Whereas for over five decades, this landmark law has supported our nation's seniors and helped to fund community-based organizations like Meals on Wheels. and it will be the only federal program designed specifically to meet the nutritional and social needs of adult uh older seniors. Whereas in 2025, SOS Meals on Wheels delivered 15,3 235 meals to 82 homebound seniors in Newark, helping seniors maintain their health and independence. Whereas volunteers are the backbone of the SOS Meals on Wheels program in Newark, delivering nutritious meals to seniors and individuals with disabilities who are at a significant risk of hunger and isolation with caring concern and attention to their welfare. Whereas SOS

Meals on Wheels programs in New York offers a powerful opportunity for social connection for hundreds of seniors to help combat the negative health effects and economic consequences of loneliness and isolation. Whereas SOS Meals on Wheels programs in Newark deserve recognition for the heroic contributions and essential services they provide amid times of economic hardship, natural disasters, and other emergencies. Whereas the senior population is substantially increasing. And did you put that in because of me? No.

Okay. Is increasing. And action is needed now to support local Meals on Wheels programs through federal, state, and local funding, volunteering, donations, and raising awareness to ensure these vital services can continue to be delivered for years to come. Whereas nearly 14 million seniors are threatened by or experience hunger. 14 million. 56% of seniors are lonely and one in three meal meal on wheel programs have a weight list with seniors waiting an average of four months for vital meals. Whereas meals on wheels programs from across the country are joining together for the end the weight campaign this March and beyond to celebrate their collective success and to generate the support needed to ensure these critical programs can continue. Now therefore, I, Michael Hannah, on behalf of my colleagues on the New York City Council, declare March 2026 as celebrating senior nutrition programs and their efforts to end the weight month. So, it's with great pride that I award this to Mr. Ran uh who has been serving meals on wheels for many years. I'll leave it at that. And thank you for your services to our communities. I want to thank thank you council and mayor for this recognition but I also want to say this is a reflection of our SOS meals on wheels nutrition program but also the many volunteers that partner with us. So each day many community volunteers are delivering seniors. They're delivering a nutritious meal, a friendly smile and a daily wellch check in the community. So, I want to say thank you to those that help us do that. Thank you.

I've had the pleasure of delivering Meals on Wheels now for over 10 years. And let me just describe briefly why this is such an important program. Because when you're a Meals on Wheels driver, your interaction with the senior is probably no more than a minute. A minute. But it's that interaction that establishes are they in good health? Are they feeling okay? How are things? You know, it's it's a connection. And I'll never forget the one senior I was delivering to over in I deliver in Union City. Can't get bogged down with New York residents. You know, man, what do we do about our streets? You know, I'm delivering meals here. Um, so I deliver in Union City. And I knocked on the guy's door and he's probably late 80s, early 90s. And he said, "Can you come around to the back?" It was an apartment complex. And that's not something we would normally do, but his front door was locked. So, I went around to the back. It's probably 11 o'clock in the morning. He's laying on the floor. Laying on the floor. He had fallen down the stairs at 6:00 that morning and couldn't get up. He was bleeding from his leg and I thought, "Well, let me help you up." You ever try to lift somebody that's dead weight? It took a It took something to lift him up and put him in a chair. And I said, "I I'm gonna call 911 and get somebody to come out here and take a look at you." And he goes, "No, no, I'm I'm okay. I just needed help getting up." And I actually left. And as I left, I thought, you know, no, I need to go back there. I need to call somebody because he had a bleeding in his leg. And so I called the fire department. And we have such great fire service personnel. And they came and they took him to the hospital. And I only think to myself, what would have happened if I simply, you know, either one didn't go help him in in the back or two, call 911, you know? So that's why Meals on Wheels is so important. And if you have the opportunity to volunteer an hour, hour and a half a day, and you only have to do one day. I do one day.

I've done one day for over 10 years because when you volunteer, it's a job. So if you're volunteering one day, it's a commitment. So be careful. I always tell people that go into retirement, Jim Scanland, that if you go into retirement and you want to volunteer, do one day and if you want to do more than that, that's great. But it takes about an hour and a half. And just the the the emotional feeling that you get from helping a senior who you may be the only person that they see that day is powerful. So give that some thought. Did I do my PSA well enough? Thank you for sharing.

Thank you. Well said. Thank you. So last uh proclamation is 1979 March 2026 as Oops. Almost did it again. Proclaiming government finance professionals week. Love the professionals in finance. So I would ask um our finance folks to come up and join me as I recognize them. OUR finance director is Miss Lee. And you know, Miss Lee said, you know, mayor, I understand we have an $85 million budget. Did you want me to bring the $85 million down to the meeting or just leave it in the office? I said, let's leave it in the office for now. But uh she did offer to bring it, you know, the handcuff around your wrist, you know, with the big metal suitcase. She offered to bring the money down. I said, "No, no, let's leave it in the office." Um, cities can't operate effectively and efficiently without an outstanding finance department because we're working with your tax dollars. These are dollars that you entrust to us to provide all the services that you want in the community from public safety to streets to parks and wreck to library. All the services you want and demand and we need to provide them to you. But we need to do so with a fidiciary uh thought in mind. We got to be responsible with the money that we have. Um and it's with the finance folks who every year develop our budgets, tell us how we're spending our money, what money's coming in. We can forecast. In fact, we're going to have a budget presentation uh after this uh presentation. But it's the finance people that work hard every day to make sure not only are we doing justice for the money that you uh allow us to spend, but every year we get audited. We are

audited to make sure that we are complying with all government standards when it comes to our finances. And every year we get top recognition and it's with these people in mind that we get that recognition for. So big thanks to them. the California Society of Municipal Finance Officers. And for those of you that love acronyms, that would be S CSF. Were you going to mouth that? CSFMO, I'm not going to say it again, is the state's leading professional organizational dedicated to promoting excellence in financial management for California's local governments. Whereas government finance professionals serve cities, counties, special districts, and joint powers authorities by ensuring transparency, accountability, and responsible stewardship of public funds. Whereas these professionals manage complex municipal operations including budgeting, capital improvement programming, investments, debt administration, payroll, procurement, grants, financial reporting in compliance with government accounting standards board gas standards and applicable state and federal regulations. Whereas the city of Newark finance department has earned multiple consecutive years of national recognition for excellence in both its annual comprehensive financial report and operating budget including awards from the government finance officers association reflecting excellence in nationally recognized best practices. Whereas the city has received consistent, clean, unmodified, independent audit opinions demonstrating strong internal controls, fiscal discipline, and regulatory compliance. Whereas California's fiscal framework, including Proposition 13, Proposition 218 and 26, the gun appropriation limit, the Kalpers obligation, economic cycles, and evolving regulatory mandates, requires disciplined planning, sound analysis, and prudent long-term forecasting. Whereas the city of Newark finance department works collaboratively

across all departments to safeguard public resources, support informed city council policy decisions, and promote the efficient delivery of essential public services. Now again, I Michael Hannah on behalf of my colleagues on the New York City Council call upon the community to recognize and celebrate the dedication, integrity, and expertise of government finance professionals whose stewardship strengthen fiscal sustainability and enhances the quality of life for all who live and work in Newark. Please join me in congratulating our finance team. I'll present this to Miss Lee. I know she'll share with her colleagues and I know you'd like to say a few words.

Actually, our um I'd like to thank you um the I'd like to thank our leadership and thank my team for all their hard work. Um but I will pass the microphone to our deputy finance director who does have a few words to share.

Great. Thank you again, mayor and members of city council for this recognition. On behalf of staff here tonight and staff not present, um we thank you and I just want to add that I've been managing finance departments for hate to say over 30 years I think and truly this is one of the best teams I've managed. Um they're always available. they work collaboratively together and whether it's uh late at night or weekends or furlows and I try not to abuse that Britney but um I'm just so grateful that we all work together whether it's just sounding off making sure we're doing things right checking and that's really what makes uh I think our team strong. So again thank you and um we'll share this with the rest of the department.

GREAT. Let's get some finest looks on this side.

All right. Awesome. Do I have anything to present?

Do I have a script? Thank you for your patience. The next item is a presentation of the 2025 CPRS Award of Excellence to the City of Newark. I'd like to call up the treasurer for CPRS, Leah Martinez, and recreation coordinator Katie Fuente, who will be presented the award to. Good evening, honorable Mayor Hannon and city council. My name is Leah Martinez from Hayward Area Recreation and Park District, but this evening I am representing as the secretary treasurer for the state board of directors for the California Park and Recreation Society, CPRS. I'm honored to be here this evening on behalf of the Awards of Excellence program. The CPRS annual awards program celebrates outstanding examples of quality facility and park design, programming accomplishments, effective communications, community leadership, and professional successes that take place daily in our profession. Through our five award categories, we highlight the people, places, spaces, programs, and stories that make communities like the city of Newark special. As one of eight awardees in four subcategories, the city of Newark's community in color connecting the city through art in the print and collateral design category was a winner of the marketing and communications award of excellence. Yay. You can clap.

And just to give a little bit of background, the city of Newark was able to turn a coloring book from Big Truck Day into a full comic book series that spanned across multiple departments, including recreation, public works, police, and fire. The photos transformed into illustrations allowed children in the community to meet the people who keep New Work, building trust, pride, and connection at every event. To date, more than 2,500 coloring books have been shared, educating local families on public services in a fun and accessible way, which is what I hear to be totally Newark. So, I wanted to congratulate Katie Fuerte and the whole New York recreation department on winning the 2025 Marketing and Communications Award of Excellence. Congratulations. Thank you. Congratulations.

Thank you. Congratulations. Thank you for this. Do you want to say a few words? Me? Yeah. Oh. Um,

I mean, I didn't prepare anything, but I know how to talk. Um, I just want to say thank you so much for taking time away from your children to come and present this tonight. Um it's um because of the support of our mayor and our wonderful leadership that our recreation department really does get to just shine and and really represent the city of Newark. So I'm excited to be um representing this wonderful city. And I'm excited to to see where we can continue with these coloring books for different departments and and things to just really show the great work that we do across the city. And um I did bring a fun surprise um if that's okay. Yes. Um, I've created you all your own coloring page.

Oh my gosh. Um, and given you a sneak peek of our brand new coloring book that's coming out, our comic book that comes out on Saturday for family day at the park. So now you guys get to be a part of it as well. Thank you. Yeah. Come on. Recreation. If you didn't let me use all your photos, you wouldn't have uh we wouldn't be getting this. Katie, huh? Katie in the front. Katie. Should I lay on the floor like I

All right, on three. One, two, three.

Perfect.

Yay. Well, I can't I can't let Katie go without saying a few words. If you meet anybody from the parks and recck department, probably the most enthusiastic department I've ever worked for in my 40 years in government. Um, they always have a smile on their face. They're always wishing and wanting to help anybody of any age with recreational services. Um, I honestly think if we decided not to pay them, they would still come to work to do the work that they do. That's the dedication. I'm not asking our finance people to do that. Paychecks will still be coming. But that but that's the kind of people that you meet at our parks and wreck. And you see Katie's enthusiasm. This was an idea that, and correct me if I'm wrong, that she came up with on her own. And she said, "You know what? I'm going to fill it with employees from the city of Newark. And I just thought, how innovative and thank you for the recognition that she received today, you know, because, you know, we tried our best to recognize our employees here, but when you're recognized by your colleagues in other cities and other communities, it's just that much more special. So, big thanks to the parks department.

That's it. I know there are a lot of folks here in the audience. We're here for the presentations and things of that nature. Before we get into the budget discussion, I know that's going to be such an exciting, fulfilling conversation to have. I'm going to go and take a fiveminut break. So, if you want to go ahead and leave, you can go ahead and do so now. recording.

All right, folks. We're going to begin in about one minute. in progress.

Thank you for your patience, ladies and gentlemen. I'm going to go ahead and call the city council meeting back to order. Uh again indicate that all city council members are here at the dis except for council member Eve Little who will be joining us at 7:00 or soon thereafter. The next item on our agenda is our work session for the 2025 2028 I'm sorry 2026 2028 bianual budget. Mr. Benoon.

Yes. Good evening your honor and members of the council. Uh this is the first of many public discussions to plan for the 2026 through 2028 banial budget. Uh we have two work sessions this evening, including the capital improvement plan work session that is scheduled later during the regular city council meeting. Uh for this special city council meeting, we will be focusing on the operating budget. Our staff report this evening consists of two primary uh sections. First, our finance director, Miss Kristen Lee, will provide the council with a general overview of city finances. This includes a summary of budget development process, a review of economic trends, an update on Kalpers's pension costs, and a review of the 5-year forecast. Second, I will report on all the significant city-wide initiatives and projects we hope to accomplish during the next budget cycle. Uh, this will also include a summary of the department objectives as well. Uh, before we proceed any further, I'd like to take this opportunity to make some preliminary comments. First, this is an interactive work session. So, please do not hesitate to stop at any point and ask us questions and we'll be happy to answer. Second, I would like to discuss briefly uh how our budget is typically prepared. The process has remained consistent for many years. We start with the existing approved budget for the current budget year. Uh that serves as our baseline. We then assume continuation of existing services and programs. Uh we then present the council with citywide and department initiatives and programs that we recommend implementing in the next budget cycle. Based off the direction we received this evening, we will then return to the council with the draft budget later in the spring and lead to adoption in May or June. The draft budget will factor in anticipated increases or decreases in service level demands, proposed staffing changes if necessary, account for increased or decreased supplies and equipment, ensure we meet our uh ongoing

contractual obligations, and uh we may add or delete programs and services depending on uh the needs of the community and the direction of the council this evening. Um, third and final, I'd like to just touch on a couple of major factors that really do impact and affect the uh operating budget uh as well as the financial health of our city. Um, first I want to talk briefly about personnel costs. Our largest cost is of course personnel. It represents 53% of our operating budget. Employees are the heart and soul of any organization and we are very fortunate to have such incredibly talented staff members who work tirelessly to serve our community. several of whom are here in the off uh audience this evening and these are the members of the city's leadership team. Uh last year we signed three-year agreements with our labor partners that resulted in cost of living uh increases. Those updated salaries and benefits are included in tonight's budget presentation. Uh traditionally we've had a conservative approach to adding positions to our budget as once a position is added it causes significant disruption if the position must be defunded at some point in the future. and we recommend of course continuing with this practice. Another significant cost is pension. Uh later in tonight uh tonight's presentation, Director Lee will provide an update on on Kalper's costs as well as uh summarize the city's aggressive cost containment strategies. So I will not repeat that here. Um just want to talk briefly about two tax the tax measures that we have that do fund uh the city's budget. Um we have measures GG and LL. Uh those will be discussed later this evening under the capital improvement plan discussion during the regular meeting. So I will not report on them now. Um but I would like to highlight that we currently have an existing utility users tax that was approved by New York voters back in 2020 and this is known as the UUT. Um this imposes a 3.25% tax on all utilities, telecommunications, and internet

services in Newark. The UT generates over $4 million in general fund revenue per year and is scheduled to sunset in 2029. And as the council will see in the 5-year forecast, we project we'll be operating in a budget deficit uh without this revenue stream. Uh finally, before I pass it over to Director Lee, I just want to briefly touch on that our sister our our city has had a long-standing philosophy of conservative financing. This approach has set us up for financial success and we have many councils and city staff to uh and city staff leaders uh to thank. We have been operating with a budget surplus for many years. This includes during the CO 19 pandemic which was quite an abnormality. It was very rare to see municipalities operate in a surplus with a surplus during that time period. Uh, we've been recognized by the Government Finance Officers Association for our sound budgeting practices in our financial reporting. We continue to boast a double A plus positive credit rating. We continue to have clean audits. We maintain healthy reserves for fiscal uncertainties, emergencies, equipment replacement, pension obligations, and maintenance needs. Together, these all demonstrate that the city is financially healthy. This approach breeds success. A financially sound city enables us to tackle important city initiatives, address the community's needs, maintain critical service levels, and attract and retain talented staff members throughout the entire organization. In other words, this approach allows us to fulfill our mission to serve and partner with our Newark community. And with that in mind, I'll pass it over to Finance Director Lee for the first part of our presentation. Miss Lee.

Great. Thank you, city manager Bon. Good evening, honorable mayor, city council members. I'm Kristen Lee, finance director. Um, as city manager Benoon mentioned, tonight is the first work session for our 2026 2028 bianual budget process. The purpose is to provide a highlevel overview of the city's fiscal outlook, key economic trends, and early policy considerations. Tonight's discussion is organized into five sections. I will cover the first three, the budget process and timeline, economic trends, financial update, and then I will turn it back to city manager Bernoon to walk us through the strategic priorities and initiatives. And we will close with next steps. I will start with the budget process frame time frame to show us where we are in the process. The city prepares a two-year budget within the context of a five-year financial forecast. The bannual budget focuses on the next two fiscal years which will be fiscal year 2026-27 and fiscal year 202728. And uh the five-year forecast will help us understand our long-term sustainability. So this approach also allows the city council to make informed near-term decisions, understand the long-term fiscal impacts through fiscal year 2030 2031 and it also helps us identify structural imbalances early on in the process. This also allows us to plan for any major obligations including pension and capital cost. Mid-year reviews are also conducted during the two-year budget cycle to refine assumptions and to update the 5-year forecast based on the most current information. And this forecast is updated at least annually to reflect the changing economic conditions.

This slide shows the full budget cycle. The work begins early with revenue expenditure projections and financial analysis. Departments then submit their proposed budgets followed by the CIP plan and then the development of the proposed budget. Council work sessions are intentionally embedded throughout this process to one provide early policy direction, evaluate trade-offs and to assure ensure alignment with the council priorities. The goal is a budget that is not just balanced but policydriven and transparent. And new this year, following the adoption, the city will launch the cleargov digital budget book. This moves us from a static PDF format to an interactive format where users can easily navigate by department, fund, and revenue sources. This improves the accessibility and transparency for both council members as well as the public. As we enter this budget cycle, several economic factors continue to shape our fiscal outlook. And these factors include inflation. So inflation has moderated from about 6% in 2023 to roughly 2.4 today, but that still remains slightly above the federal target. Core inflation is at roughly 2.5% and this excludes volatile items like food and energy and more closely reflects the city's actual cost structure particularly in labor and service contracts. From an economic standpoint, most economists are not forecasting a recession at this time. The baseline outlook is continued, but slower growth is reflected. Um soft job growth is also reflected. Reduced consumer spending and slower housing activity is also reflected. At the same time, uncertainty remains elevated particularly around the interest rates, energy markets, and

global risk. So in short, the economy is stable but more vulnerable than prior years and these conditions are shaping the city's overall fiscal outlook. The housing market trends, home values remain high. Currently, approximately 850,000 statewide, 1.1 million in the Alama County area, and then 1.3 million in the city of Newark. So, this supports our property tax stability, but it limits housing supplies because it does create affordability and workforce challenges. The labor market has stabilized but remains competitive. Unemployment is about 4.4% locally and recruitment challenges persist especially in the public safety and public works areas. Personnel costs are our largest cost drivers at about 53% of our general fund. This forecast includes a 10% vacancy assumptions, but those are not sustainable long term.

Miss Lee, on the uh personnel costs, I've worked in a city where fire and police were personnel costs. Here we contract with Alama County Fire Department for fire services. Do we include or not include personnel costs when we think of the contract with Alama County Fire? uh that is separate from this 53% and I will show that in another slide in the pie chart. It's about 17% is our fire services. And so the takeaway is that our personnel costs will continue to grow and continues to be the primary driver for future budget pressures. In terms of revenue trends, property tax remains steady, sales taxes normalizing after post-pandemic spikes. Toot is increasing due to the voter approved rate change and investment earnings are strong but expected to decline. And toot is um also known as our hotel tax. Okay, this slide provides a simplified overview of how Kalpers works and why it matters to the city. On the left, both the city and the employees contribute to the Kalpers investment pool which is used to fund retirement benefits and those assets cover a portion of the city's obligation shown here as the funded portion. The remaining gap is the unfunded acred liability or the UAL. And this represents the difference between benefits already earned and the assets available to pay for them. So think of the UL as a long-term pension obligation that the city is required to pay. And as we're paying this down, we're also paying an interest rate of 6%, sorry,

6.8% over time. pension costs. They change based on several factors including investment performance, economic and actuarial assumptions like inflation and life expectancy as well as payroll levels. Why this matters for the budget? These costs are legally required. They're not discretionary. They can be volatile and the strong returns does help improve the UAL and can slow the cost growth, but they do not eliminate our obligation. They directly impact the city's ability to fund other services and it also directly impacts how we are able to maintain our long-term fiscal stability. Okay. Currently the pension liability for the city is approximately 387 million. Our funded status is at 69% and this is an average between the two plans that we have. The unfunded acred liability is about 121 million and it again it functions like an ongoing obligation with an interest rate of about 6.8%. The city makes two required annual payments to Kalpers every year. The first being the annual cost for benefits earned for current employees, also known as the normal cost, the UI payment, and these are payments towards past service obligations or the pension debts. Um, we also take advantage of PE prepaying annually to reduce our interest costs because when we prepay at the beginning of the year, uh, we save half of the 6.8%. So, we're only paying a little over 3 4% of interest.

Miss Lee, the um our funded status is 69%. Do we have a goal in mind? Do cities typically have a goal in terms of they'd like to be at this percent funded? The goal is always 100%. Of course.

Um but we are in line with other cities and um the past and I'll show in our next few slides. Um, in the past few years, we've had some very positive returns and so we are at a higher funding status. Um, but I don't believe that we've dropped below um 65% and so we're maintaining at the higher level of funded ratios. So this slide shows how the city's pension liability is distri distributed between the safety employees or the safety plan and the miscellaneous plan. The majority of the pension liability is driven by the public safety plans. Um but it's mainly because safety plans generally carry higher cost and um again the 69% is an average of these two plans. So the safety plan currently is at 62% of our unfunded liability and 38% is the miscellaneous plan. Okay. So this slide walks through recent Kalpers updates and what they mean for our city. So starting on the left, Kalpers reduced the discount rate to 6.8% 8% in fiscal year 2021. Um, this is a more conservative assumption that improves long-term stability, but it did increase employer cost in the short term. And looking at investment performance, you could see that there's a lot of volatility in fiscal year 2022 and 2023, followed by strong recovery in fiscal year 24 and 25. Um, these returns are

above the 6.8% target. Uh but please note a few years of again a few years of positive increases does not negate significantly the obligation that we have to continue to pay pay. So it's we make progress and then the assumptions change and the investment earnings change and then we're further away from our target again. So we're constantly doing that dance and but we are inching closer every time. Um,

let me ask a question, Miss Lee, for those that may be watching at home because this can be somewhat confusing. So, in 2022 and 2023, the rate of return was 6.1 and 5.8 and the discount rate was at 6.8. Would that then translate into our obligation to CalPERS in terms of our contribution was increased? An increased contribution. Yes. So every year the contributions um do increase and depending on investment earnings how significant would that increase be?

So in 2425 when we saw a significantly improved market uh our payment to KPERS would have been reduced because of that improved rate of return. Is that correct?

That is correct. So a a good example is actually in 2021 the investment uh return rate was 21.3 that's an amazing return rate but then it was completely offset in pendulum to the other side because Kalpers had reduced their discount rate to 6.8%. And um then you know it it was a further hit come 2022 and then we had really strong recovery but that recovery wasn't enough to offset that significant increase for that year's payment. Um hopefully that did that answer your question mayor? Okay.

Right. And so um the in fiscal year 2025 the ALM study also known as the asset liability management study was updated and the study is usually updated every four years. This is a study that Kalpers does to see how risky the pension system is and it helps them assess whether the city will need to pay more in the long run or over time um to see how material the change for each city would be in long in the long term. And uh when this study is completed um it usually will tell us whether the discount rate is sufficient um for us to continue this long-term planning in the outy years. And so uh the good news is the study was completed the discount rate does remain at 6.8%. And this year only modest updates to the actual aarial actuarial assumptions were made. Um so only the inflation rate was increased from 2.3 to 2.5%. Um they did not make any adjustments to the mortality rate or any other um actuary assumptions. Um and so what that translates to is that uh we are seeing greater stability in the cowper system. Um it the stability does come with a higher near-term cost. Um but it does help us um plan better in the future. Uh we also have other tools that we've put in place and I will show that in the following slides as well. And so uh just again the contribution rates will continue to be sensitive to market performance. Um and

the um in this slide this shows the several tools that are available for managing our pension cost. Um these strategies are not mutually exclusive meaning that we can use all of these together or um separately and we have already implemented multiple strategies. The section 115 trust was one of the final steps in strengthening our long-term pension management which we've completed last year. And um in the following slide I will show an update on our section 115 trust investment returns. This slide further highlights the city's long-term deliberate approach to managing our pension cost. council actions over time have consistently supported a proactive approach and um again we've pretty much used all the prudent strategies that were available um and um as a result the city is well positioned today with a discipline framework and it's again it further supports our long-term fiscal sustainability and we hope to continue with this framework and so you will see that we will be making recommendations on further contributing to our section 115 trust.

I I wanted to uh mention just briefly the Kalpers's 20-year uh fresh start that saved the city of Newark a significant amount of money because prior to the 20-year fresh start, we were on a 30-year plan. So, by going to a 20 year, it's like it's like improving your mortgage situation from a 30-year to a 20-year. You save a significant amount of money by shortening the term of of the plan. Is that not correct?

Uh, that is correct. But again, the uh it does come with short-term increases. And so, for a few well, I think about five years, we were paying much higher annual payments. But then once we got over that then yes our payments were um much lower. Right. So this is a slide regarding our section 115 trust. This is a financial tool used by cities to manage pension and oped obligations more effectively. Um this allows the city to set aside funds in advance and invest those those funds to generate returns and uh these funds could also be used to smooth out future Kalpers payments. So the key benefits is it gives us more local control and flexibility unlike Kalpers where the assets are pulled and then the city does not retain control over those contributions. Uh we can also pull money from the section 115 trust to stabilize volatility. The tr trust acts as a buffer during market downturns. It helps us offset spikes in our pension costs, reducing exposures to market swings. It also improves our budget predictability by preunding and using reserves strategically. The city again can smooth year-over-year pension costs to avoid sharp increases. And it also supports our credit strength. Rating agencies view this as a very proactive financial management tool which supports our strong credit ratings. And it also our strong credit ratings helps lower our borrowing costs. Okay. And this is a summary of Newark's 115 trust plan as of January 31st, 2026.

Uh we contributed $12 million in January of 2025. Today the balance is about $13.9 million and this is net of monthly fees. Uh roughly 1.8 million in earnings or about 15% return rate. And the monthly fees uh currently are about $3500. It's like 2 something% of our um market asset. The only other question I would have on this slide, Miss Lee, is that uh I was surprised to see that between February and March of 2025, the total assets total assets actually went down a little bit. What's your your opinion on why that might have occurred? Um I believe that was the time where um there was a new administration and they were just setting up the administration and so there was a um minor dip for that couple of months and um things became normal once the administration was fully set up.

Thank you. Oh apologies. The terrorists also played a part in that. Okay. Thank you. So, um again, we contributed $12 million and um even after the fee, you can see that the trust is generating meaningful meaningful returns. What' you say the rate of return on that was over the 1.8 million?

Uh it's about it's a little over 15. So on this slide, your honor, um we are uh we elected for the balance strategy and so it's close to this 15.47%. So ours is really close to that. It's a little over 15% for us. I think any investor would be pleased with that rate of return.

Yes. So this slide shows the performance of the par section 115 trust investment options as of December 2025. Um each row represents the different investment strategies from growth which has a higher equity exposure and a higher return potential and all the way to the more conservative options. Um over the past year the returns were really strong. Um the city invested in the balance strategy which is a moderate risk approach. The strategy is designed to provide steady long-term returns while limiting volatility. Um again this supports our goal of stabilizing our pension costs without taking on excessive risk. So over long-term the returns do normalize to more sustainable levels generally in the 5 to 8% range over the 5 years. But that is still much better than um what we're able to get from our other investment um tools. Okay, from there we'll jump into our financial update. Um so this is a preliminary economic outlook um of fiscal year 2026 and beyond. Um I wanted to start with this slide to just kind of give us a quick um snapshot of what we will be anticipating in the outy years. So our recent performance, our revenues are above expectation and so we have stronger consumer spending, higher than expected investment returns. Um the takeaway is that our revenue performance exceeds our baseline assumptions. And so currently

um our nearterm outlook looks great or our rec our current and recent outlook. Our near-term outlook um growth is moderating and revenues will be normalizing from the prior highs. Um cost pressures will persist, labor and benefits uh will continue to increase. our pension contributions will be increasing. Um again I talked about inflation earlier. So our services as well as construction costs um will be increasing in the near term. Um cost growth remains elevated is really the takeaway. Uh regarding our long-term outlook, this is when we will start seeing a structural shift. Our expenditures will be outpacing our revenue starting fiscal year 2029 2030. The structural gap um will continue if we do not make policy adjustments and um our forward focus should be continuing our conservative forecasting. um looking at ways for uh cost containment and uh we will have to think about strategic uses of our reserves. Okay. So on this slide we're looking at the city's major general fund revenue sources and how they are performing year-over-year. Um the total estimated revenues are approximately 92.4 4 million about 4.9 million or 6% above the amended budget and 3.6 million or 4% below the prior year amounts. Overall revenues remain strong but we are seeing moderation from prior highs and the a return to more typical levels. Um, in prior years we

did have um a significant one-time payments from our property tax as well as our measure GG revenues. Uh, property tax is projected at 34.8 million reflecting about 2% growth year-over-year. and Bradley Burns. Oh, sorry. Oh, yeah. So, our Bradley Burns 1% sales tax is projected at 17.1 million. Um, again, that is down from our last year's amount. The measure GG halfsent sales tax is projected at 8 million, uh, down about 29% year-over-year. Um, we had a very significant onetime payment of almost $3 million and it was confirmed that we are able to keep that $3 million. Um, so uh it's not that we're uh our sales tax or declining, it's just we had a really great year last year. Um, so again, this reflects um normalization. Um, our transient occupancy tax toot is projected at 7.3 million up approximately 15% year-over-year. This is driven by a fullear impact of the voter approved measure LL that increased our TOOT rate from 10% to 14%. Our utility users tax UUT is projected at 4.7 million. Uh, this is slightly down about 3% but generally stable. Um the cable revenues continue to decline and um the growth is tied to electricity usage. And uh just to note that this revenue is expected to sunset in fiscal year 2930

and this will create um a known future risk to our revenue source. Other taxes are projected at 2.3 million up about 1%. Um this category includes business license tax and our property transfer tax. So while overall stable um property transfer activity has been slowing down and so it is these numbers do reflect fewer transactions. licenses, permits, and fees is projected at 12.1 million slightly down about 1% as well with a strong permit activity um offset by softer recreation revenues. Our other revenue category is projected at 6.2 2 million down about 14% and this is primarily due to lower interest rates on our investments. And uh previous years we had several large one-time reimbursements from other agencies that we don't have this current year. And this is the uh pie chart that um shows how our general fund revenues are distributed. Um, as you can see, our property tax makes up 38% as one of our most stable sources. Sales tax and measure GG together um makes up about 27% and these are the revenues that are economically sensitive. Um, they are more sensitive to um the market changes. uh transaction sorry transient occupancy tax toot represents about 8% driven by hotel activity and travel demand. Um and this increase is mainly due to the increase of the um voter approved increase in our tax rate. So the toot in general is um we're

showing flat. there's no um significant increases in that revenue other than the increase of the rate. The utility users tax accounts for about 5% um and again this is scheduled to sunset in 2029. Licenses, permits, and fees makes up approximately 13% and the remaining 9% is other revenues which includes our investment income. So while the city benefits from a diverse revenue base, the significant portion is economically sensitive and um it is important that we continue to moni monitor these revenues um closely. Uh this is

can I ask you roll back just a second. Um just in terms of the um forward focus that's slide 21 I think.

Um the um just want to I just want to sort of indicate that um putting a putting an emphasis on emphasis on economic development should also be a focus um going forward. Um it's not necessarily of your department but of the of the of the city in in in total because most of the sources that you had on the wheel there on the on the the last slide most many of those sources um are really dependent on e economic activity in in our community and and as you said you're prudently um I think you're prudently assuming that hotel activity stays about the same but it'd be great to to see it increasing going forward by by by seeing our hotels do a better job of capturing the their business and and we certainly want to do what we can to help them. So, uh I just wanted to really call out that we that as a part of the strategy going forward, we need to emphasize um a actual economic growth in our community. So, thank you.

Thank you for that. Um, Council Member Grindol, um, actually right before this meeting, uh, we had, uh, a meeting with our partners and our economic development group and we are, um, engaging the, uh, hotel consultants and so we've already started that conversation. So, thank you for that note.

Okay. And so, uh, this is a chart that shows how much our property tax actually comes to the city. Um, out of this dollar, as you can see, 50 cents of this dollar actually goes to the schools and the colleges. Um, this does include the RAF or the educational revenue augmentation fund. Um, this was a statemandated shift of local property taxes from cities, counties, and special districts to the schools. um this was created uh back in the '9s and we don't see that there is a sunset date to this and so um after the raff is adjusted for and after the 16 cents that actually goes to the Alama County and for county services as well as the 17 cents from the special districts and to the regional agencies. The city of Newark general fund actually receives seven only 17% of every dollar of property tax. This slide shows how sales tax is structured and more importantly um what portion actually comes to the city. So for every dollar of taxable sales, the city receives approximately 1.5 cents uh 1% from the Bradley Burns tax and then the half cents from our measure GG um transaction use tax. The total sales tax rate in Newark is 10.75. So the majority um again of that revenue goes to the state and the county. And uh this also shows the base rate breakdown of 7.25

and that is where the city's one point share 1% share is included.

Okay. So

quick question on that slide if I may. the um public safety augmentation fund. Uh is that distributed to local cities on a population basis? Does the city receive any of that funding as far as you know? Uh is that the problem 172? Yeah, thi this part uh the public safety augmentation fund we do receive a part um but it is calculated um I don't have the exact percentage but there there is a dollar amount that is based off of um it is

I don't recall that yeah it's it's based off of methodology um when we actually collect the um sales tax. It's based off of the size of the pie that um is being distributed to to local cities. To local cities. Yeah. Um I will have to get back to you, mayor, on the actual um calculation of that percentage

again where this is the first of a number of hearings. At some point in one of the subsequent hearings, if you want to answer that question, that'd be fine. Yeah, I was getting that confused with the other one that um you had asked about the other day, but this is the prop 172. Um so we do get this um to the local city. Okay, so this slide highlights the city's voter approved local revenue measures which are critical to funding uh our core services. Um measure GG the transaction use tax or the halfsent sales tax was approved November 2016. Uh the rate is um h.5 cents and the effective date was April 1st of 2017. The duration was 25 years through 2041. Um measure LL the transient occupancy tax the hotel tax was approved recently november 2024. the rate was increased from 10% to 14% and the effective date was January 1st of 2025. Um the general fund expenditures by category, this is our estimated general fund expenditures for current fiscal year 2025 2026. Um the expenditures are approximately estimated at approximately 86.3 million. Uh this is 1.8 million or 2% below the amended budget and it's 7.2 million or 9% above prior fiscal year actuals. These figures exclude the transfers and the one-time designations. Um, and the primary drivers are personal

costs. The personal cost remains our largest driver of expenditures. Personal costs are approximately 45.8 million and this is 1.1 million above budget and 4.9 million higher than prior year. So a 12% increase from previous years. But as city manager Benoon mentioned, you've already calculated the cost of living increases for our employees over the next two years. Is that correct? That is correct. So that's reflected here. That is reflected here. Um it it's part of that 12% increase.

So this reflects the salary growth from our recent labor agreements, um benefit increases as well as pension cost increases. Our non-personnel expenditures are approximately 21 million, 3.8 million below budget, 1 million above prior year, 5% increase. This reflects cost control efforts while um still accounting for minor increases in our professional and contractual services, technology and software costs, as well as other operational um and internal service costs. the ACFD fire services. Um, this contract totals approximately 14.7 million. This is close to um a million above budget and 1.24 higher than prior years, a 9% increase. And this reflects recent labor agreement cost increases as well.

Mr. Benoon, correct me if I I what the contract we have with ACFD as with our employees, it's a three-year contract. What's our Is it an annual contract with ACFD? I believe, if memory serves me correctly, we have a 10-year agreement with Alama County Fire Department. So, that would increase. Correct. Our finance staff does collaborate with ACFD finance staff. Uh ACFD finance staff keeps us uh apprised of all budget changes um and we do calculate those into these projections. Okay. Sure. Council member

on on that same on that same line the my understanding is that we're essentially paying for service. So when the when the cost when their cost of providing the service goes up then our costs go up that the contract doesn't have a a locked in amount. We're they're they're essentially passing through the cost. Is that correct?

That's correct. That's correct council member. Uh it as you pointed out it is a contract for personnel services. uh ACFD uh does negotiate with their labor partners. As those labor uh costs do increase, those are passed over to the city of Newark. Um when we renewed the contract a few years ago, uh we did highlight some provisions. So there are some contractual obligations that ACFD must meet uh before uh with respect to us prior to implementing uh those cost increases. Um they do confer with us from time to time on those labor matters. Um and we work with them on ultimate resolution to a reasonable extent. Uh obviously there are labor contracts between ACFD and them um uh and the local partners. Uh but we do work with ACFD management and make sure that those numbers are included here.

Thank you.

Okay. And then lastly, our uh civic center debt service remains stable at approximately 4.8 million. And this is just the uh pie chart for our expenditure categories. Personnel at 53%. Non-personnel is at 24%. The ACFD fire services is at 17% and the CI civic center debt makes up 6%. total general fund expenditures. What are your thoughts on uh recalculating the fire services personnel costs and incorporating those into our personnel costs? So the public uh even though they are not employees of the city of Newark, they're still personnel costs. I think would would it not give a true reflection of the personnel costs if we would include the fire personnel as part of the personnel cost uh in this category? Perhaps it would make sense to add a second chart um that shows public safety costs and that could include the police and fire. Um they're technically not City of Newark employees. We like to of course treat them as City of New York employees. They come to our employee appreciation lunchons. Um but for accounting purposes um they are separate uh agencies with separate rules and uh separate pay uh schedules. Um would that be beneficial perhaps to have a safety? I think it just gives a a truer reflection of the personnel costs,

right? Thank you. I I I agree. I think I think it gives a clear indication, but I as you indicated, I think having an additional chart that talked about that makes sense rather than redoing your accounting across the board.

Okay. Note it. Okay, so this slide summarize our 2025 2026 estimated year-end results. Uh the resulting fund balance after our transfers and designations as well. At the top you'll see that the operations are performing well. Um we are ex we were estimating a $6.1 million operating surplus and uh that is the beginning the estimated beginning fund balance and then after the transfers and designations that we are proposing for this current fiscal year we are estimating to end the year at 7.75 million. Uh some of the major transfers and destinations include the um measure GG3 $3.2 million of um excess that is set aside for um the future uh capital projects and the toot measure LL4% set aside that is estimated at approximately $2.1 million and uh the 2.2 23 million is the emergency and fiscal uncertainty reserve contribution. Um that amount will help us maintain our 30% target for fiscal year 2026. And we are also recommending a $1 million contribution to our section 115 trust to continue to manage our pension costs. So, uh, just want to note that these are not deficits. These are plan uses and these are also policy decisions um to

help strengthen our long-term financial stability. Yeah. When you work in government, anytime you see something in red, it's always a a double take. So, thank you, Council Member. Yes. Um and also just to um just just to clarify and and amplify um we we actually the number the bottom line um we actually did we're doing significantly better than we but then we had bud than we had budgeted. Correct. We didn't do as well as we did in in the actuals of 2425 but our 2526 actuals are estimated to be better better than what we budgeted. Is that correct? That is correct.

Thank you. So this slide shows the city's general fund reserves. Um the balances as of July 1st based on our audited figures. The reserve levels for our emergency fiscal and uncertainty reserve is approximately 23 7 million. Um this meets our current city target of 30%. the pension and oped reserve approximately 3.5 million and our section 115 trust is approximately 12.7 million. Uh the equipment replacement reserve is approximately 6.2 million and the maintenance reserve is approximately 8 million. Uh we had started the maintenance reserve with a $7 million seed money and we had recommended to transfer an additional $1 million. The unassigned fund balance is approximately 10.1 million. Um, and what this means is the unassigned fund balance represents funds that are not restricted or assigned. And it does provide for um our cash flow emergencies as well as uh future needs or future council priorities. Is there any reason why uh we wouldn't take those pension and OPB 3.54 million and transfer those funds into the section 115 trust?

Uh you you will see that we will be making that recommendation in our five-year forecast. So, thank you for that question. But uh there there are reasons um and of course we can't always time the market but um those funds um serve more as a cash reserve and so once again once you put it into the section 115 you do lose some of that um control and that flexibility and then if you send it to Kalpers you lose even more control and flexibility. So, okay. So, uh this slide is our city's 5-year general fund forecast and uh this is based on current conditions and conservative assumptions. At the high level, um the near term remains balanced. Um but then you will see that in the outy years we begin to see uh structural deficits emerging. Um and so if you look at our um our revenue outlook on the revenue side um again property tax continues to grow from about 34.8 million to 43.5 million. uh this is averaging roughly 3.5 to 4.5 annually and uh this is driven mostly by the 2% Prop 13 um increases and uh as well as any uh what we call turnover or um when property um are sold and transferred and it reassesses the assessment value to uh the more current market value rates. Uh this also includes new development that enters our sales tax I'm sorry our property tax rule. Our sales tax and

measure GG combined remain relatively flat to moderate um growing from about 25.1 million to 27.4. This is reflecting slower consumer spending trends. The toot grows modestly from 7.2 to 7.3 million. And this is year-over-year an average of 3%. Um, and this is dependent on um the travel condition, the travel industry as well as the hotel industry. UT grows slightly in the near future um but then it does drop significantly um due to the expected sunset expiration in December of 2029. Um you can see that in fiscal year 2029 2030 we only reflect half of what we would usually expect annually from our UUT revenues. Our expenditure outlook um personnel increases from about 45.8 million to 55.9. Um this is again driven by the cost of living adjustments, um benefit increases, pension increases and um we did uh build in some staffing um adjustments as well. The fire services grows from 14.7 million to 18.2. This is roughly 5% um annually and this is also compared or based on the 5-year forecast that is provided by ACFD. Non-personal costs um does rise gradually due to inflation and contracts and our D service uh continues to remain

relatively stable. So our total expenditure increases from about 86.3 to about 101 or 102 million outpacing our revenue growth in the out years. So bottom line we currently show positive operating results. Um the forecast remains slightly positive through fiscal year 2028 29 but then by 2930 we start seeing a $300,000 deficit. Um and it will grow to about 1.8 million by fiscal year 203031. Um again this uh this forecast assumes that continued economic growth but no recession, no new revenues or major policy changes, current labor agreements and cost structures. Um and the best practice that we continue to use is that the cost in the outy years for our personnel, we match that to the uh assumption rate that Kalpers is currently using. Um so that this year is at 2.8%. I think in the future used to be about 2.75.

And just a quick question for me just this looking at this this another assumption that we have is that the uh Newark voters will not uh choose to extend the UUT um in 2028. Is am I reading this correctly? Yes. And so in uh when it sunsets um we do not further forecast to expect that revenue until we get closer to the um the process.

Okay. Thank you. Um, I have I have a couple questions and I don't think I I don't expect you to have this at hand. So, this can certainly be part of a follow-up, but you mentioned you mentioned that new development is included in in some of these estimates. Um, is that I wanted a little more detail about that. Are these are these projects that are that are sort of dreamt up or or already approved projects? Um are these in other words are these are these vision projects or is this something that we is more coherent and that we know and if if it is could we get a listing or an understanding of what those projects are?

Uh so I I take a little different approach. I don't match it exactly to the list of projects that uh community development has. Um the process we use um and we work with HDL, our uh property tax consultant on this is we look at the historical and then we also take into account that the the new projects that are currently in the queue um because it is very difficult to time when these projects will um actually complete and we are not sure about any possible delays or anything and so um we usually use historical and then we take a percentage age um and uh that percentage is also guided by what do the sales transactions look like through December. So if we are seeing that the sales transactions if there are more transactions this year then we would typically take a higher percentage of new development estimates. Um, so in the past because the sales transactions were much higher, I would use about uh 35%. Um, and I would add that to our property tax um numbers this year because this uh transactions have really slowed down. um we only in included about 25% of new development that we can expect um to enter the property tax role in the outy years.

Um but again that will continuously be monitored and will be adjusted annually.

Great. And thank you and I do I do appreciate the the conservative approach. I just wanted to sort of understand that that process. So that that's appreciated. Um I I just wanted to note or and actually sort of I do have a question. You know, you notice the only the only place where there's really sort significant increases in in the in the on the expenditure side is the fire services. Um it's going up substantially more than than any of the other services. Do do we have an idea of why that is? is I know are we just plugging in what the fire what the fire service is is telling us or is there is there a reason why their costs are going up so much more than other other costs?

Uh we we do have um the breakdown and uh we have confirmed um those costs. Um, of course we can't confirm what they're forecasting in their outy years, but um, again, it is based off of the actual new labor agreements that they have recently um, updated. Um, and so we do have that breakdown. uh we don't just plug in the numbers but there are um certain things where we do monitor because um if there are expenditures where it's similar to our process where it's encumbered but it doesn't actually get spent and those costs actually gets adjusted at the end of the year. And so we do have like um a true-up payment. And once we know what that true up payment is, it then helps us um better adjust for our future years of what to expect in terms of the increases on the non-personnel se um part of the contract,

which is the smaller part, which is like the overheads and the it's a much most of most of their cost is is personal is personal just just like ours. Um and and lastly, I just wanted this is just sort of pointing out um you know, the the red numbers at the bottom. Um your your your estimates of growth are fairly conservative and that's appropriate. Um but if we were to if we were to increase our our revenue sources by even 2%, you know, between over what you've estimated, it would wipe out that it would it would wipe out any of any of that red ink. So just again making a pitch for us focusing on on growing our economy.

It almost sounded like council member Grenal was suggesting that you know maybe we think about considering cons continuing the UT which would be about 3.25%. So that would take care of that differential wouldn't it? Um I'm just kidding. Um quick question on the fire contract. Uh the most recent fire contract, is that a three-year contract? Uh you're asking regards to the labor contract. Yeah, Mr. Nishimoto. It actually expires in July 1st of 2027. Okay. Thank you. Contract.

Great. Thank you. Oh, and I I'd like to also note that um we also did account for the Prop 8 adjustments. Um we had um some significant adjustments from our um commercial properties this year in our property tax. And so um we did have to decrease our property tax numbers a little bit and account for the Prop 8 adjustments. So just so I understand that that means a business that wanted to have their property reassessed um and have the assessment lowered and and and if the assessor granted those requests if it hits our hits our tax revenue. Correct.

That's correct. If um either uh the market is not doing well or if the business has um has changed their business activity or if um they are vacant then they can file appeals with the county office. And um those appeals actually do take um over a year but we did see a lot of those um materializing this year in our property tax role. Um and also those appeals are not permanent. Um so they could be decreased but then as the market gets better or as the vacancies are filled in then those do get reassessed and those can bump our property tax back up. Um but that is a a quite long process. Understood.

Can you go back to the last slide? I think we skipped over that one a little bit.

Yeah, sorry. There go. Okay. So then, um, this table walks us through, um, the last part of our five-year forecasts. Um at the top is our operating results uh before the transfers and designations. And again, this is the red are um they're not deficits. They are council policy decisions um that either is based off of our policy or based off of recommendations um with our current reserves. And um again the measure GG the excess over our debt ab um obligation um it continues to be uh it's net of the debt and then we are um setting that aside uh for council's uh future discussion of um actually we'll be talking about that in our later meeting today in the CIP process. Um the toot the 4% um works very similarly. it's uh designated um for possible either future debt or future capital projects. Um and our emergency fiscal uncertainty reserve um that is based off of um our reserve policy. Um and as you can see, we are only recommending the 2.23 23 amount um to be set aside for this current year to keep us at the 30% target. Um staff did go through a GFOA risk assessment to get to a um reserve target amount and we should be uh doing that assessment every 3 to 5 years. We are at the four-year mark and so shortly after the budget is

adopted, staff will come back to council and we will be um reassessing and proposing um any updates that are necessary necessary from that risk assessment. And therefore we are not showing any future um set aides into the uncertainty reserve. And then um this 3.5 in fiscal year 2829 is um mayor that is the 3.5 um because in the outyear is where our um our personnel cost was really increasing um significantly. our pension costs that year. Uh it just made sense to because we are getting uh pretty good return rates in our par section 115. And so in the short term um we wanted to see how close we get to the the five-year returns before we make the recommendation of putting um any additional funds in there. And so it just made sense that we would use these 3.5 um instead of putting it into the PARs 115, we would use that to offset the possible deficit that would occur that year in fiscal year 2028 29. Um we will continue to recommend uh putting half a million dollars in the section 115 trust in the next two fiscal years. um we did decrease that amount because of all the uncertainty in the market as well as the global risk. Um and so we'll continue to monitor and manage that before making further recommendations. Um and then in fiscal year 2728

um we are recommending to decrease our equipment replacement reserve by the 3.2 million. Um our equipment reserve fund currently is at 6.2 million. Um and we have uh replaced a lot of the city's assets and equipments. Um and I think that would be a good time for us to assess um how much of the reserve can replenish or reimburse the general fund um for all the operating expenses that we've been paying. Um and then oops sorry. So again um we do see the negative in the last two out years and um that is really for us to not be alarmed at this time but not lose sight that um you know we are seeing structural structural deficits in the outy years and we should start um planning for any policy adjustments um or any um further recommendations of maybe strategically spending down our reserves in their future years. And uh with that, I believe it concludes my presentation. I'm happy to answer any questions that you may have.

Thank you very much. And I believe this is a public hearing. So I'm going to go ahead and open up the public hearing and see if there's anybody in the audience that has questions regarding the budget presentation. If not, I'm going to go ahead and close the public hearing and turn to my colleagues for questions and comments. And I'm going to start to my right, Council Member Canio.

Yes. Thank you. Thank you for your presentation. I thought it was well thought out and very thorough. I also appreciate um how you're also updating uh everything even years 3, four, and five that you're updating that annually um in addition to including the idea of moving more funds into the 115 trust. So I think that's really um having some forethought as well. Uh I am looking forward to the interactive format change that you were discussing at the beginning as well. So thank you so much for managing our budget. Vice Mayor Jorgens.

Yes. I also want to thank you for the presentation for all the great work that you know lies behind the presentation. For a lot of jurisdictions right now, the budget meeting uh becomes a very doom and gloom meeting. And you know, that's not our situation right now because of a lot a lot of terrific work that's been done over the last several years. I do want to thank you, Council Little. Thank you so much, Council Member Grindol.

I have to I have to agree. We really appreciate the very clear um uh information um for the council and the public to be able to follow. So appreciate appreciate all your work, all your staff's work in in managing our our city's finances and and also explaining it um to to uh to the council and the community. So thank you

again. Excellent report and uh you know we've always taken a conservative approach of looking at our budget, our expenses, our revenues and uh that's why we are always in such a positive position moving forward even with a modest surplus. any surplus by any city in the Bay Area is considered uh unusual and so uh outstanding work by the finance team. Uh Mr. The only question I would ask and the only request I would make is as we are forming our first public arts committee moving forward, um I'd like to see us maybe set aside some some amount of money on an annual basis for the public arts committee because as we appoint those folks to do volunteer work around our community in terms of identifying art opportunities, I want to make sure that there's sufficient funds for them as they are creative and coming up with art proposals that there's funds there for them to be able to deliver on those products. product. So, I would ask that staff consider that as an opportunity moving forward.

Be happy to do so. Any other questions? So, your honor, that is part one of staff's presentation. Yes, we do have part two. Yes. I don't know if you'd like to take a break or No, go ahead. Let's do part two, then we'll take a break.

Okay. Uh can we have the PowerPoint loaded, please? Okay. So, uh, in this portion of the presentation this evening, I will be providing the council with an overview of the strategic priority areas and all of the initiatives that, uh, city staff will be undergoing in the next two years in this upcoming budget cycle. Thank you. Um, if the council may recall, last fall the council modified the existing budget to rearrange our work under FE uh, five key strategic priority areas. Uh, staff is affectionately referring to them as SPA. Um this is a way for the public to better understand um the initiatives that we're undertaking as well as to categorize them by an appropriate category uh and also report out to the community all the hard work that we're doing uh to address all of these um strategic priority areas. Um what we've done is we've taken the major um initiatives and placed them under uh these five umbrellas. Uh we'll go through uh that exercise in the next few minutes. Then after that, we'll turn over to the department by department initiatives. Um the ones that we're going to show on the screen first, these are the really the big all hands key initiatives um that staff is working and collaborating across departments. So with that in mind, I'll turn it over to the first department, excuse me, the first um uh SPA and that is foster a safe and healthy community. So the five initiatives that we are undertaking are listed there on the screen. I'll briefly walk through each one of them. Uh the first one, increasing um marketing of community uh emergency preparedness, business and resident training programs. Uh we have an awesome uh emergency preparedness training program that we're working with businesses and residents right now. Uh that's of course the plan, prepare, respond, and recover. Uh it's done with our um emergency preparedness coordinator, Mr. Richard Martinez, in collaboration with Alama County Fire

Department. Uh to date, we have trained 97 businesses. 354 employees have taken one or more of those training sessions. Uh we have a new communications and public engagement manager, Miss Latutier, and we'll be doing what we can to conduct further outreach to those businesses and residents so that everybody can be appropriately trained. Uh the second item under this category, partner with community- based organizations. Um as the council is aware, we recently held a ribbon cutting for the Newark Resource Center. Um we're planning on opening that uh next month if not then early May. Uh we're we have already secured 10 anchor providers that will be offering services on a rotating basis and that includes Bay Area Community Health, Echo Housing, Second Chance, uh among others. And so we're very much looking forward to connecting um our residents to community- based organizations. The third one uh is enhance traffic safety outcomes by leveraging Calo OES uh grant funding, excuse me, OTS grant funding. Um if the council may recall, traffic was one of the issues that was raised in the community survey and we really want to take that to heart. Uh we do have uh we did relaunch our traffic unit within the previous budget or the existing budget I should say. Uh we do have uh a fair amount of less tenure tenured uh officers and so we want to use the traffic unit leverage that so that they can train um our less tenure staff on how to be subject matter experts in traffic safety. We also want to collaborate with the city's crime analyst um to really take a datadriven approach to traffic enforcement. So that'll be a priority for our uh police department. Uh the fourth item implementing the rental inspection pilot program. Uh we uh as reported at a previous council meeting, we have um uh one code enforcement officer and one supervisor. Uh we've had a vacancy for quite some time, but I'm pleased to report that that vacancy will hopefully be filled in the next week or if not the week after. And we begin this pilot

program at the end of May, uh if not then early, uh excuse me, end of April, if not in early May. Uh, and this will be a six-month pilot program and we'll be proactively inspecting specific sites that we've selected for habitability. And then once this uh we go through this pilot program, lessons we we learn, we will incorporate that into the final program uh once we launch that. Uh and then last but not least, enforce the tobacco retail license ordinance. Uh the council had amended the municipal code um to impose regulations relating to the sale and use of tobacco products uh here in New York. specifically with regards to minors and flavored tobacco. Um the past year we spent some time collaborating with county health and CDTFA uh California Department of Tax and Financing um to work on um really holding uh the tobacco retailers accountable to the ordinance that the council adopted. Uh we've inspected many businesses and we will continue to um pursue those inspections later this year to ensure that we have compliance. So those are the major initiatives with respect to the first SPA. Uh the next one further economic vitality and housing for all. Uh the first item under this is review and update the affordable housing work plan. Um for our newer council members, the uh work plan was adopted in 2021. uh we would like to present uh an update to that plan to the council uh later this year and uh solicit council's feedback as to how we should maximize funds uh in that affordable housing work plan. Um we're also uh presenting to the council later this year an annual progress report with respect to our housing element. Um the next item, develop a plan for the four corners area. This is Jarvis and Newark Boulevard. Uh, believe it or not, the four corners area plan was adopted in 1990 and that guides the commercial and

retail development at at that location in Newark. Um, as required under our housing element, we will be updating that plan uh to retain commercial and retail space, but also to include a plan for housing opportunities and we want to focus on a wide range of of of housing stock. Um, so that'll be something that we'll be working on uh later this year. And the third item, as the council may recall, uh end of February, we received a report from the Urban Land Institute technical advisory panel. Uh they outline specific recommendations with respect to New Park Mall. Um we will be presenting that information to the council uh later this year. Once we receive that report, we're doing what we can to analyze what we can without having the actual report and we'll present those recommendations to the council uh later this year. and complete the city's first homelessness action plan. Uh the council, if you may recall, adopted a uh an agreement or authorized staff to sign an agreement with Social Change Partners LLC. Uh this plan will reduce and prevent homelessness or will aim to reduce and prevent homelessness in our city and um we've conducted stakeholder meetings uh working on holding a community meeting and we'll presenting the council with a draft plan uh later this year. And then last but not least, if the council may recall, uh two months ago, the council received a rather extensive report from our housing and programs manager, Mr. um Michael Kulum. And that program uh contains a whole variety of mechanisms to address landlord and tenant uh relationships here in our community. Uh specifically, it provides emergency rental assistance, uh the tenant landlord mediation, rent review process, just cause eviction, relocation assistance. Um we're busy calculating fees necessary to effectuate that program and we'll recommend that those fees be incorporated in the master fee schedule uh in the next few months and we've been busy negotiating um service provider uh contracts. So we'll

be implementing that uh later this year. So that concludes the second um SPA. If we could turn to the third one, boost financial resilience and excellence in service delivery. uh as the council is doing right now, we're working on our banial budget and five-year capital improvement plan. Uh it will take a considerable amount of work for staff to monitor and maintain that budget. Uh as Miss Lee demonstrated earlier, uh when you go through a budget, you don't just adopt it and forget about it. It's a never- ending process. So, we'll be continuing to monitor our expenditures and our uh revenue and make adjustments as we move along. Uh the second item under this category is invest in employee training uh coaching, wellness and recognition programs. Uh it's obviously important that we maintain um appropriate training and recognition programs. This really is an investment of public funds in our city staff. Uh that translates uh at the end of the day to an overall uh enhanced quality of service level to our community. And so we certainly want to continue uh in that regard. Uh expanding police wellness program. Uh we've made considerable strides on this in within the existing budget. Um we've implemented several tools for a wellness academy including cardio metabolic uh testing for our officers, financial uh wellness training. We've conducted in-house academy in-house wellness academy for new recruits and their families uh which is rather awesome. uh for the next budget cycle, we want to expand it to a mobile app uh for our first responders uh as well as some training blocks and psychological uh training as well. So um awesome work doing in that regard and we want to continue with that and build on that uh in the next budget cycle. Uh the last item there is improve customerf facing technology. Uh as Miss Lee briefly mentioned, we're working on cleargov. So clear gov will be a platform that we can put our budget on the website to make it more transparent to the public. So there's all kinds of

modules there. Uh we want to not only have the budget book there as a module for for the community to uh review and and and interpret and digest our our budget but also include at some point strategic plan module, capital tracking modules uh and things like that. And that will overall uh increase our transparency and hopefully um enhance the customer service experience here with the city of Newark. Mr. Ben, can I interrupt you for just a moment?

We had a number of young people that were here tonight. I think they may have wished to speak under the public comment section and I saw them just leave now. Can we ask staff to go out and see if they would like to speak that I will take the public comment if they wish to speak um soon after your presentation. Thank you. Thank you, mayor. And the next one is SPA4, modernize public facilities and infrastructure. Uh we want to begin implementation of the first phase of our broadband plan initiatives. Uh if the council may recall, uh the city signed a public private partnership with smart fiber networks. We're hoping at uh we will implement uh Wi-Fi free to the public uh later this year at four identified city parks. Uh and that includes Community Center Park, Birch Grove Park, Silon Sportsfield Park, and Ash Street Park. Uh and at the same time, we'll be connecting city facilities to a more robust broadband. So, um looking forward to that. Uh the active transportation plan, we're looking forward to completing that. Unfortunately, we did have some setbacks uh with change in staff, but we have an identified staff member who's uh earn in earnest working on this program and uh we will have a presentation to the council uh later this calendar year uh next budget year uh replacing playgrounds at various parks. Uh if the council may recall, a month or two ago, council received a report from staff as to the options for playground replacements uh at several park locations. Uh those bids for construction are out right now and responses are due next month and we hope to have those playgrounds replaced in the beginning of the next budget cycle. And then uh as the council will hear in uh in some with some detail from our city engineer, Mr. Mickey Sabotto later

this evening, uh staff will be proceeding with the replacement of fire stations 27 and 29. Uh we have an item on the regular city council meeting for a uh project management award uh to MAC 5. So that's modernize um facilities. And last but not least, uh we have strengthen community through education and engagement. Uh it's been a long-standing desire for council to have some sort of uh connection with our youth in our community and we're very pleased with the onboarding of our communications and public engagement manager, Miss Latir, uh to lead us in a youth academy program later this fall be designed for high school students here in Newark. It'll be an awesome opportunity for us to connect uh with the youth here in town. Uh and then if that goes well, potentially having a community academy in spring of of 27. So, uh, looking forward to that. Uh, complete the city rebranding effort. Um, this is something, uh, we really need to get to. Uh, this is we the logo that we have, it's it's a bit outdated. Uh, could use a fresh look. And so, we want to have, um, uh, consistent uh, imagery, logos, and messaging on all of our website, flyers, signage, social media, mailers, public notices, etc. uh we want to reduce confusion uh with uh the public and and and build that trust. So we're working on developing a consistent brand to to help with our messaging. Uh the public art committee uh as we uh uh talked about to a fair extent uh the last couple meetings uh we are launching uh the city's first ever public art committee uh later this year and then we want to implement the utility artbox program and partner with Aloney College uh to maintain an internship program. Uh we've been looking to do this for quite a while but we now have capacity in our HR department to take take this project on. Uh we're very much looking forward to

it. We want to have a structured internship program um uh and work with uh the students in Aloney College and other education institutions uh and really strengthen the city's city's ability to attract and retain skilled employees at the same time and develop a a talented pipeline. So uh we'll be working on that later this year and expand public safety community engagement initiatives. So um we do have uh several staff members who are trained in crime prevention through environmental design. Uh we actually trained our deputy economic development director as well. She received the training and certificate. So we want to expand on that program. Also increased recruitment efforts for vault graffiti abatement as well as our explorers. So those are the major initiatives that are uh the city is currently undertaking. Uh I'm going to switch gears and we'll do department by department um so we can talk a little bit about all the initiatives going on uh within each of the city's departments. We'll start off with Alama County Fire Department. Uh we want to exceed response times for emergency services under the contract. Uh there is a six-minute response time goal identified in the contract uh for uh the past fiscal year. They've met and exceeded that response time which is meeting that 6 minutes with the 90% uh of the time for calls for service. and they've and they've done that. Um they've been excellent partners with us with respect to emergency preparedness training uh collaborating uh with city manager's office, Mr. Martinez, and we want to continue with that relationship. Uh community outreach, uh I think everybody here is very much aware of the July 4th pancake breakfast at the firehouse uh and the fundraising endeavors uh there. Uh disaster council coordination efforts. Uh the past several years uh we've made a lot of strides in preparing for uh emergencies uh and disasters here and they've been partners with us in training city staff and we want to continue um with that relationship.

The next department is the community development department. Um we're working on evaluating opportunities for missing middle housing. Um, so we're doing that analysis right now and taking a look at city regulations, uh, and seeing what changes we can make to that would incentivize variety of housing types that frankly are needed in the community. That includes apartments, condos, uh, starter size homes. Um, we have a housing element goal of aiming to permit 200 missing middle housing units by 2031, excuse me, 2031. And we want to make sure we take the appropriate steps to to meet that goal. Uh the second one there is promote Newark for retail attraction. Um our deputy director of economic development, Angela Sway, is unfortunately not here this evening. She's over at the um East Bay Economic Development Alliance Awards Ceremony. One of Newark's businesses, Adam, uh received a life science award for their innovative work. So she's over there and supporting in them. Um but yeah, she's she's busy with all kinds of initiatives. U business visitations with her and her team. Uh we have a robust shop Newark campaign, flavors of Newark restaurant guide. Uh staff recently attended actually this week international council of shopping centers conference and we'll be going to another one in about six weeks. Um and we started a how to start a business guide uh for Newark. So we want to continue um with those efforts. Uh we want to develop and implement a first-time home buyer program. Uh this is part of our affordable housing work plan. Uh we're working with a consultant right now to fine-tune that program and we will be um uh making recommendations to the council uh later this year. Uh enhanced development plan review process. Um we have a considerable amount of of permits and applications that review that we review. Um I won't talk about the building department. I'll pause on that one since that's not in the community development department. Uh, but we're always looking for opportunities to enhance the development

plan review process. So, that's what's going on in community development. Turning over to finance, maintain accurate and compliant finance reporting. As we all know, the finance department continues to be recognized by all the government associations for their work and uh we want to make sure that we want to encourage them to continue with those efforts and uh maintain accurate and compliant financial reporting and potentially receive awards in the future. uh manage financing of capital projects and asset planning. As the council will learn the next month or two, we have a considerable amount of capital projects that we want to advance. Oftentimes they require uh grants, compliance administration. That's actually the next one. Um but finance will be a partner with all the other departments working on advancing those capital projects. Uh largely of course engineering overseeing grant compliance administration. Uh within the past three or four years, cities received $40 million in grants. Uh that does come with compliance and administration work from the finance department and they'll be busy working on that in the next two years. A big ticket item is the nexus study for impact fees. Um we have a draft report that staff is reviewing internally. We'll be rolling that out to the council later this year. And uh of course we want to continue strengthening daily financial operations which overall leads to a better customer service um to our community. And that just involves streamlining um all of our processes. Um, I'm going to Okay, we're at public works. So, we'll take care of public works and then we'll come back to a couple Oh, we're going to police. Okay. Can I keep you guys guessing? I don't you know where are we going next? I don't know. So, okay. So, uh police department strengthen new officer and training. Um as I don't think I mentioned this, but we have a I did mention that we have a considerable amount of uh our officers um are are not as tenured as as the other ones. And we in fact three uh 38% of our officers have less than 3 years of experience. And so now more so than

ever it's critical that we have appropriate training uh for our officers. Uh and that's the full uh coursework that we're working with uh particularly paying attention to use of force scenario based trainings, high-risk situations uh things like that. Uh as well as virtual reality training technology. Um but also it includes leadership. Uh we have a very talented command team several of whom are in the audience. Uh we do encourage and incentivize our command team members to take on leadership programs uh leadership development. Um that includes the supervisory leadership institute command college and the FBI FBI national academy and I am pleased to report that we have one such individual who did graduate from the FBI National Academy uh within the existing budget. Uh this is a three-month program. Uh it focuses on executive leadership. It's over there in Quantico, Virginia. And that is none other than Captain Brian Simon. Mr. Simon over there. Uh we want to expand youth and volunteer engagement programs. Um talked a little bit about that earlier. Uh we want to focus on the explorers as well as graffiti abatement and continue to work on the on on expanding those programs. Enhanced datadriven crime enforcement. As I indicated earlier, uh we do have uh a crime analyst and so we want to just not focus on traffic uh but also all types of crime and having uh crime analysts provide heat maps to to staff, it helps them uh better focus on where where they need to be to address all crimes within our community. All right. And public works department. So, um staff is uh working with the consultant consultants on our sea level rise resiliency plan. Uh we hope to have an update to the council later this year. Um and then once that plan is finalized, we will of course be seeking

funding opportunities uh to implement the plan. Um we want to deliver permitting and inspection services efficiently. We currently the past couple years we've been processing uh around 1,700 permits per year. We're always looking at ways to increase efficiencies, potentially rolling out uh mobile platforms, evaluating uh AI software as potential tool. Uh in fact, our our chief building officer was out in uh Monterey at a conference with Miss Sway presenting on this very item uh earlier this week. I think it was yesterday if I'm not mistaken. Tuesday.

Tuesday. Okay. So, um they're on the cutting edge in that regard. Uh completing the urban forest management plan. Uh the if the council may recall, the council signed a contract with the consultant back in January. Uh we've since held a kickoff meeting with staff. Uh outreach plan has been developed and we're looking to um u doing work on this plan and present it to the council within the first year uh of the upcoming uh bannual budget cycle. Although it may slip into the second year. We'll see how that goes. Um we are also working on updating the citywide Americans with Disabilities Act transition plan. Uh this is something we're legally obligated to do uh every few years. It's now time for us to go ahead and update our citywide ADA transition plan and we're working on that uh at the beginning early part of this budget cycle. Uh and we hope to have those updates uh finished uh mainly it'll be in the second year of the upcoming banual budget. Uh and then uh additionally maintain city infrastructure, landscaping facilities and fleet assets. Um that's of course always one of our goals. Uh we want to expand on solid waste diversion programs. We're looking at providing freer lowcost composting bins to residents uh and increased efforts uh to our residents to promote proper sorting and waste and reduce uh landfill. Also be working with our retail food facilities to promote proper sorting of waste as well as recovery of edible food. And last but not least, implementing the capital improvement plan projects. Uh, as we will be t talking about uh tonight and then later in the coming months, we have a we will have a 5-year robust capital improvement plan and engineering will be excited to deliver on all the projects that we will be discussing in the next two months. So that is what's uh those are the all the major initiatives uh for the departments that I oversee and I thought it'd be appropriate to defer to the assistant city manager with respect to the

departments that she oversees. So Miss Ovora you have the floor.

Thank you city manager Venoon. Good evening Mayor and council members. We'll start with the human resources department uh which also houses our risk management services for the city. So the first initiative in HR is to mitigate the organizational risks and enhance resilience. We're excited about a new resource that will be coming up through our pulled liability uh joint powers authority that we are part of. And so we will be working as we often do to update policies, improve compliance uh practices and engage our safety committee in reducing exposure to city liability. and that includes workplace injuries as well as uh the general liability for the city. And next is strengthen recruitment and onboarding programs. Recruitment is always a priority of the uh human resources department in the coming uh two-year cycle. Initiatives include implementing new onboarding tools um such as 90-day new hire surveys and onboarding checkpoints and enhancing our new hire materials. Our goal is to really have a consistent and very quality process for our candidate to employee experience. And then next is expanding our employee development and succession planning. We've worked uh very hard over the past couple years to work up to a calendar year-long employee experience plan that we present to employees that includes trainings and other opportunities to learn more about uh areas of the city they may not be familiar with as well as increase professional development skills and other ways to support them at work. And then last is to foster an inclusive and equitable workplace culture. We are currently uh working uh or offering an a survey to employees um that closes on Monday. Um currently we have an over 70% um participation rate. So, we're really

excited to see those survey results and um anticipate that there may be areas that we will work on to make sure that we continue to foster an inclusive and an and equitable workplace culture, including offering training opportunities. Next is the information technology department. Uh up first is strengthening our cyber security protections and staff training. We do require uh now annual training for employees to take that helps us protect us against um fishing scams and other common attack methods that will usually come by um an unfortunate employee clicking on something that they don't realize um they shouldn't be. Uh so that is um from the employee standpoint and then there are also uh upgrading our security systems um to uh also help us protect against cyber attacks. will expand expanding digital inclusion will be another IT initiative. Uh one item that was mentioned uh earlier by city manager Benoon was uh expanding Wi-Fi into city parks. Uh as well as we have uh some laws that are requiring new inclusive and digital services uh on our website and we will be making sure that we implement what is required uh of us by law. Um and those will assist those with disabilities and non-English speakers to access our services uh better. And then next is develop responsible artificial intelligence governance framework. Obviously AI is a huge topic and we have recently uh worked on an internal uh administrative regulation regarding the use of artificial intelligence. Uh what we need to do now is expand that and make sure that we are protecting our residents um as well as

in training and informing employees on the uh practices that we want to make sure that we adhere to around using artificial intelligence in the workplace. Uh lastly for it is uh to proactively maintain technology infrastructure and assets. Uh so this is an ongoing effort uh that we're constantly making sure that we are replacing aging technology systems before they fail to avoid costly emergency repairs and any service interruptions to our residents. Um and all technology investments are aligned with our city's technology framework um to make sure that we are ensuring responsible and strategic use of public funds. Next is our recreation and community services department. We'll start with um the initiative of delivering highquality wreck programs and community events. Um these include all of our favorites and very well attended events including one coming up this Saturday, family day at the park. Uh our annual treelighting event Junth, our big truck day is now um a deeply valued tradition and uh these events um highly strengthen community engagement and our connection with the community. Uh staff will continue to monitor enrollment and registration demand for also the regular programming we offer including sports, summer camps, and other recreational uh classes to make sure that we continue to meet the demands we have in our community. Next is expanding inclusive programs for all abilities. Um as you know, we have um expanded uh these types of programs. Uh unfortunately we lost a leader in our department of this these programs Michelle Machado. She got a wonderful opportunity to do uh some work in this area full-time um in a teaching role. So, uh we are now um at a point where we

are looking um out to community partners to see how we can get uh trained up uh with the current staff that we have and also um how to provide these types of programmings and um provide more equitable access and services. Next is exploring our youth scholarship funding opportunities. This continues to be a demand in our community. Uh last year we provided about $45,000 in youth scholarships to over 200 to approximately 200 families. Um so these scholarships are used for sports sports programs um dance classes also um they can get six-month memberships to the Sllamon Center. And so, um, these are continue to become a demand. And so, we're going to look for continued funding opportunities to expand the, uh, scholarship program. And then lastly is increasing the ride-on tri city transportation awareness and access. This is an excellent program that's offered to seniors and residents with disabilities um, to help transport them um, throughout the community for their needs. Um, there's a lot of affordability, mobility options here. It's a great partnership with the city of Fremont. Um, and what we are focused on is getting the word out on this program. And so, um, there was recently a meeting, uh, with staff and the write- on Tri City program, uh, and they've come up with some great ideas about hosting office hours at the senior center and then going out to the senior living sites to provide some onsite enrollment and assistance. And then we will of course use our social media channels, newsletters and mails uh mailers to get um information out to the community as well. Okay. And lastly, the city manager's office. Uh of course, number one, uh city manager's office, we support all of

the departments in advancing the initiatives and policy alignment. So, we'll continue to provide that guidance and leadership to all of the departments. Um we will be administering an election this year. So uh city clerk's office will be highly involved in that. Um participating in information sessions and training held by the county. Uh preparing highquality materials for our candidates and ensuring that campaign filing and election integrity is maintained. Uh we'll also lead a multi-EP department effort to evaluate the vacant city owned buildings. Um you may recall from the facilities master plan process uh that was identified as a one of our next steps. Our three vacant city buildings are Watkins Hall and Fire Station One on Thornton Avenue and the old library building here at the Civic Center campus. And so we will be looking to engage um stakeholders and the public in looking into what how to either um reuse or um what should be done with those vacant buildings. Uh next is to equip staff with advanced emergency preparedness and response skills. Um you've heard a bit about tonight about um the efforts we've been doing in that area. Uh we have provided staff with quite a bit of training. You've heard that too from a presentations by u Mr. Martinez recently and uh we are going to continue to uh offer at least two scenario-based exercises each year as well as providing um role specific training for our staff. And then lastly, expand community emergency response team training and outreach. I love ending on this one because we have such a great group of volunteers. Um they have a full leadership board now and and really high engagement. So, we're really excited to be able to expand training that they receive to increase their ability to be of assistance um in emergency situations.

Uh they'll be uh we'll be increasing awareness of the program by being more visible and providing support at public events including the state of the city that's coming up next month. Um they'll also be um tableabling at special events and providing additional training opportunities out to the community. Uh, another area of focus will be increasing their ham radio operations. They actually have eight ham radio operators currently. Um, they'll be using a Santa Clara training model. So, they're excited about that as well as updating their first aid supplies. And I'll turn back to city manager Bon for next steps.

All right. So, um, as I mentioned earlier, we'll be holding our first capital improvement work session during the regular portion of tonight's city council meeting. uh specifically seeking uh direction from the council as to the disposition of certain tax measures. Um in April or May, we'll come back to the council with the draft banial budget as well as an additional capital improvement plan presentation and work session. And that will hopefully lead to adoption of the next banial budget and five-year capital improvement plan uh in June of this year before the fiscal year starts July 1st. Uh, that concludes our presentation and be happy to answer any questions that the council may have.

Thank you, Mr. Bon. I'm going to do something unusual. Um, I want to see if there's uh anyone that came here to speak under public comment, which would normally happen at the 7:00 agenda, and of course, we're well after 8:00. By show of hands, is there anybody here that would like to speak under public comment? Okay, thank you. questions. I'll start to my left. Council Little, any questions? No. Thank you for all the information. I really appreciate it. Great. Council Gindoll, any questions, comments?

I have a lot of questions. However, I do understand this is the beginning of a process. So, um I'll I'll communicate those questions with uh staff, you know, um after the meeting or at some point um instead of taking up the all the time at this point. Council member Canio, thank you for your stellar presentation and information. C Vice Vice Mayor Jorgens.

This is a terrific document that we've got started with by the time we get to June. I have every confidence it's, you know, even going to exceed the, you know, high bar that you've set at this first presentation. So, you know, really looking forward as the process goes forward and, uh, there's a lot of great stuff that's happening and that's going to happen. Uh, I'm just going to make some comments and I can defer uh any answers to these at a later time. Um, when it comes to um crime analysis, I'm hoping we'll see a crime analysis report in the near future. Automated automatic um uh tickets for speeders. I know some cities are looking at that on a pilot basis. I would certainly love when that opportunity comes to Newark that we certainly look at implementing that. When I look at the HR department, I want to make sure that all of our performance evaluations for all our employees are up to date. As it relates to AI, I want to make sure employees um AI scares a lot of employees in terms of my job security and whether or not my job will be replaced by AI. I want to make sure that we're communicating with staff that uh they're valuable in this organization and we're certainly looking at AI as an opportunity to deliver services more efficiently, but if that is the case that we are looking to place employees and other assignments as necessary. Uh youth scholarships, uh I love that idea. love that program. I want to make sure that we're not missing out on families that are not documented. I think people that are undocumented may be fearful of coming to the city to seek services or uh scholarship opportunities. I want to make sure that we're reaching out to those families whether they're documented or undocumented to know that they're part of our community and we want to make sure that if those are uh services that they desire that we're going to make them available to them. Um, thank you for mentioning the um, transportation for seniors. I appreciate the increased marketing opportunities there because there are so many opportunities available for seniors that are having a challenge to get around town or do shopping, whatever the case may be, I think it's really one of those underutilized programs and I think the

more marketing we do, I think the better our community will be served. Those are my comments. Is there anybody in the audience that has comments on the last presentation that we just heard? This is just anformational item as I recall, Mr. Benoon. So there's no action item required by the council. So what we're going to do folks, because it's already been a good day, we're going to take a break until 8:15 and then we'll start the um CIP process. 8:15. Recording stopped.