Orange City Council - Regular Meeting

CALLING OUR REGULAR CITY COUNCIL MEETING OF MAY 26, 2026 TO ORDER. IF YOU HAVE NOT ALREADY SILENCED YOUR CELL PHONES, PLEASE DO SO AT THIS TIME. TONIGHT'S INVICATION WILL BE GIVEN BY PASTOR PETE SHAMBROOK, PASTOR OF CEDAR HOUSE AND ORANGE POLICE CHAPLAIN, FOLLOWED BY THE PLEDGE OF ALLEGIANCE LED BY COUNCILMEMBER GUTIERREZ. PLEASE STAND.

Good evening. Lord, we bring the leadership of Orange City Council, OPD and OFD, before you to bless them with wisdom and discernment. And may the peace of Christ that transcends all understanding guard their hearts and minds. And I pray your grace and mercy over them and that they would also be vessels of grace and mercy toward one another and the residents of Orange. May there be an honoring of one another to put on display a binding unity. And Lord, we bless these proceedings with tempered grace. In Christ's name, amen. Amen.

I pledge allegiance to the flag of the United States of America and to the republic for which it stands, under God, indivisible, with liberty and justice for all. Thank you, Pastor Pete. Madam Clerk, please call the roll.

Mayor Pro Tem Bilodeau.

Present.

Council Member Barrios. I'm here. Council Member Dimitriou.

Here.

Council Member Tavalares. Here. Council Member Gutierrez. Here. Councilmember Gillenhammer?

Here.

Mayor Slater?

Here.

McCormick's present.

Okay, we have some presentations and announcements this evening, celebrating some important milestones in Orange traditions. Excuse me. And the first one is going to be recognizing the 60th anniversary of the May Parade. And I'm gonna invite Elizabeth Holman, who is executive director of the Chamber of Commerce Foundation. No? Board member of the foundation.

Okay. The chair of the maintenance.

Okay, great, fantastic. Councilmember Tavares would like to read a proclamation from us to you.

Hi, Elizabeth, board member. We're here to celebrate the Orange May Parade, the 60th anniversary. And the city of Orange would like to present you with the following proclamation. Whereas Orange's original May Festival parade traces its roots to 1933 and was created to unite residents through music, parades, picnics, and school participation, and whereas the early festivals honored the rich citrus heritage of Orange and reflected the small town values, volunteer spirit, and neighborly traditions that continue to define our community today. And whereas despite interruptions during World War II and changing times throughout the latter half of the 20th century, the spirit of the Orange May Parade endured in the hearts and memories of our community. And after nearly three decades, absent from the streets of Orange, the parade was proudly revived in 2019 through the dedication of community volunteers and civic organizations committed to preserving and renewing the historical tradition for future generations. And whereas the Orange May Parade continues to celebrate the unique character, history, and unity of the city of Orange, while showcasing the enduring pride of its residents and strength of its community partnerships. And whereas the 2026 Orange May Parade marks the 60th official parade celebration, representing more than nine decades of civic tradition, volunteerism, and community spirit, And whereas the 2026 Orange May Parade was proudly produced by the Orange Chamber of Commerce Foundation, whose volunteers, board members, sponsors, and community partners worked tirelessly for the enjoyment of residents and visitors alike. Now, therefore, be it resolved that I, Dan Slater, Mayor of the City of Orange, and the entire City Council do hereby recognize and celebrate the 60th Orange May Parade in May 2026 and extend our sincerest appreciation to all the past and present organizers, volunteers, sponsors, participants, and residents whose dedication has preserved this treasured Orange tradition dated this 26th day of May 2026. Thank you, Elizabeth, and I know you are part of the revival of the Orange Maid Parade. I think everybody had a wonderful time this year.

Thank you.

Thank you so much.

Wonderful. Elizabeth, did you want to say anything?

First, I'd like to bring up the other members of the board and people who worked on the parade, including Al Rickey, who is a member of the 2019 revival. So if they could come on up, please, all of you who were involved in that. Of course, without all the volunteers, it wouldn't be possible. All the hard work that everyone put into it really made a phenomenal parade this year and since 2019. So thank you all. It is truly an honor, a privilege, and a pleasure to be in charge of such a wonderful tradition and to have it be the custodians for the next who knows how many years before it's passed on to the next generation to take over for the parade. And we appreciate your support of it as well. So thank you very much.

Thank you. Thank you so much. Enjoy. Thank you.

OK, now we're going to recognize the 30th anniversary of the Orange Plaza Rotary Car Show. I'm going to invite Wendy Forrest forward. And who? All of them. All of them. All right, good.

Wendy is the other event.

Oh. Wendy's self-introduction.

Tracy.

Okay, maybe we got that order mixed up. At any rate, Tracy. At any rate, Council Member Barrios has a proclamation to read for you.

Thank you, Mr. Mayor. And Tracy, before I get started, would you like to introduce yourself just properly?

Tracy Curtis, Car Show Chair for this year and the last few years. Thank you. Supposedly next year.

All right, this proclamation is to the Orange Plaza Rotary for their car show and recognizing their 30th anniversary. Whereas the Orange Plaza Rotary Club has demonstrated a longstanding commitment to service above self through volunteerism, youth programs, educational support, charitable outreach, and meaningful community involvement throughout the Orange community. And whereas on May 3rd, 2026, the 30th Annual Plaza Rotary Car Show proudly celebrated three decades of community tradition, fellowship, and service in the heart of Old Town Orange. Whereas the Orange Plaza Rotary Club serves as the organization's primary annual fundraiser, allowing the club to give back directly to the community through scholarships, youth leadership opportunities, educational initiatives, nonprofit partnerships, and local service projects benefiting residents of all ages. And whereas the event brought together residents, families, local businesses, sponsors, volunteers, and classic car enthusiasts from throughout Southern California while showcasing the unique character, hospitality, and civic pride of Orange, And whereas the 30th Annual Orange Plaza Rotary Car Show was held in conjunction with the inaugural Celebrate Orange Weekend, a collaborative community effort designed to honor the history, culture, and spirit of Orange, while also creating a new tradition for future generations. Whereas the success of the event was made possible through the dedication of the Orange Plaza Rotary for its continued dedication to strengthening our community through service, leadership and the creation of a lasting community legacy through the Orange Plaza Rotary Car Show and Celebrate Orange Weekend. Therefore, I... Mayor Dan Slater, and the entire City Council do hereby commend and congratulate the 30th Annual Orange Plaza Rotary Car Show in conjunction with the inaugural Celebrate Orange Weekend for their successful presentation and lasting contributions to community service, civic pride, and the enduring traditions of the City of Orange.

Thank you very much, and thank you for the support this year of the inaugural Celebrate Orange, and it was successful for all of us, and we look forward to many years going forward. All right, fantastic.

Also, Elizabeth, if you and your group and Tracy and your group could stand by until after this next presentation. I also have some additional certificates from Supervisor Don Wagner's office. And we can all come down and get group pictures with all of you as well. So the last one is the 20th anniversary of the Taste of Orange. I will invite Wendy Forrest. Yay. forward to accept the proclamation, which will be read by Councilmember Gutierrez.

All right. So this is a proclamation honoring Taste of Orange's 20th anniversary. Whereas the City of Orange proudly recognizes the 20th anniversary of the Taste of Orange presented by the Orange Blossom Auxiliary, an auxiliary of the Assistance League of Orange. And whereas for the past 20 years, Taste of Orange has brought together residents, local businesses, restaurants, community leaders, and visitors in celebration of the vibrant culinary culture, community spirit, and historic charm of the City of Orange. And whereas the Taste of Orange event showcases the generosity and dedication of the Orange Blossom Auxiliary and the Assistance League of Orange, whose volunteer efforts and philanthropic mission provide critical support and services benefiting children, families, and individuals throughout the Orange community. And whereas it is fitting and proper that the City of Orange recognize the lasting impact and continued success of the Taste of Orange event and commend the Orange Blossom Auxiliary and Assistance League of Orange for the years of dedicated service to the community. Now, therefore, Dan Slater, Mayor of the City of Orange and the entire City Council do hereby recognize 2026 as the 20th anniversary of the Taste of Orange in the City of Orange and encourage all residents to recognize and celebrate the many contributions of the Orange Blossoms Auxiliary and the Assistance League of Orange in making our community stronger, more connected, and more compassionate, dated this 26th day of May 2026. Congratulations.

Thank you, everyone.

Thank you a lot.

I just want to reiterate what I said at the last council meeting, that thank you for allowing us this honor of bringing these events together, and we look forward to the beginning of a very long tradition. Thank you.

On three, three, one, two, three, smile.

And can I be with Hank? Can you also take it the other way? Instagram likes it like that. Instagram.

One, two, three. Thank you so much. Now everyone? Yeah, now everyone.

One, two, three, smile.

That's all right. Don't worry about it. I can do the same thing.

On three. One, two, three.

One more for the gram. One, two, three.

thank you mr mayor okay

Thank you. Thank you.

Thank you all for a truly successful weekend. It was really well done, and I can't wait till next year. You all did a great, fantastic job, so congratulations again. Okay, so Just to make sure, Ion 1.5 is here now. If anyone wishes to reorder the agenda in any way or has any suggestions, now is the time. Everyone good? All right. Next is public comments. At this time, members of the public may address the Council on matters not listed on the agenda within the subject matter jurisdiction of the City Council. Provided that no action may be taken on off-agenda items unless authorized by law, public comments this evening are limited to three minutes per speaker. First speaker is Kurt Peterson, followed by Jacob.

This one's not gonna be very popular. But at the May 12th meeting, it was stated that Orange's Mills Act had 419 active contracts and letters were signed out in July of 2025, saying staff would be reviewing compliance to the contract. Eight residents requested non-renewal upon receipt. 97 residents representing 23% of contract recipients were found in violation of the terms of the contracts. To me, a staggering percentage. and an indicator of what happens when there's insufficient oversight and guardrails installed in the program. To date, 48 notices of violation have been sent out, so 50%. That's 50% in 10 months. Letters were sent out in February, April, and earlier this month, given 30 days to rectify the breach of contracts, with the remaining 49 to be sent out over the next several months. I don't know if that's slow walking, but the notices sent out in February and April have already exceeded the 30 days deadline, so I'm wondering what follow-ups happen and how many recipients or residents will have their contracts revoked. Per Mills Act verbiage, violating or breaching a Mills Act contract, such as failing to maintain the property or neglecting requested rehabilitation, can result in cancellation of the agreement. If canceled, the property owner is assessed a penalty fee equal to 12.5% of the property's current fair market value. With 97 violations, Orange is looking at potentially millions of dollars in penalty revenue and increased revenue from those who are no longer getting the discount. Are you prepared to terminate those agreements? I don't think there should be any additional grace period if allowed by law. I also don't think that anyone who is terminated, I think any contract terminated should lower the amount involved in the program and not be replaced. 419 residents received substantial tax breaks that other residents of Orange were not given an opportunity to enjoy. The violation costs the other 138,000 residents of Orange goods and services through missed tax revenues. In my opinion, this is tantamount to tax fraud and theft. Basically, it's a representation without taxation. As a council, I ask that you do the right thing.

Thank you. Thank you, Kurt. Out for Jacob is Doug Redding.

Hello. So I'm here today. My name is Jacob Morales. Nice to meet you all. Hello, people of Orange City. I stand here before you today to ask and provide knowledge that has been suppressed by those who profit and gain. The thing is that we live by a constitution implemented by those that should be focused on the people, but ever since the rise of big corporations, that focus has been shifted. They say our rights are to freedom, but to those that sit in their chairs, it is now freedom for them to conduct business as they wish and ignore those that suffer. but to the people they concluded it is freedom to be where you want, to say what you want. But it is no longer like that. I wonder every day, up late nights, if this is what it's come to. What will be our country, our communities, our families, and especially our children? We say that we want the best for them, but if we continue blind, we will never grow. What does it mean to be human? What does it mean to live? Is it to spend half our lives working for those that only care for profit? Or is it to live and love one another? I have seen a new world that I wish for change. I tell you now, it will not happen by living on your knees. Arise, my people, and take action. Only then will we be able to improve our communities and save our country.

Thank you, Jacob. Doug Redding.

Good evening. Aloha, Mayor Slater, and hello to the rest of the council. My name's Doug Redding, and unfortunately I have the recollection of a goldfish lately, so I have to read off of this speech, so I apologize. I usually like to speak openly from the heart, but there's some data in here that I don't want to get wrong. I wanted to just briefly share a firsthand experience I had from this past weekend as a City of Orange CERT member. As you're aware, the GKN aerospace incident in Garden Grove was a nasty chemical tank incident with a bunch of bad stuff and evacuation orders impacted tens of thousands of residents. So I was deployed for the first time in 10 years. So I've been a CERT member for 10 years now. And I was deployed by the City of Orange CERT team through CMAP, which is Community Mutual Aid Program. to assist the American Red Cross Shelter. So I belonged to the Red Cross Shelter when I got there. And our incident commander summarized the response with some pretty crazy data. We had 85 CMAP volunteers that contributed about 570 volunteer hours. And they supported shelters at Freedom Hall, Los Amigos High School, Los Alamitos High School, and Kennedy High School, which is where I was at. And Savannah High School through the American Red Cross. There's also a animal team called SCART, Southern California Animal Rescue Team, which A.J. Rickey assisted, I think, yesterday. Good on him. And they took care of the pet and animal needs because the residents aren't just displaced alone. Their pets are also displaced during that time. I really have to say something about the Red Cross shelter staff. The empathy that these professionals have was very impressive to me. I've never worked with Red Cross before, but their knowledge, their professionalism, the way that they handled any curveball that was thrown at them was with a smile and a kind smile. And I was just very impressed. That's what the next level looks like. I met mayors from every city nearby. You know, no disaster goes to waste. I met a lot of people from the media. Not allowed to talk to them, thank God. And saw a lot of people there for selfies. Literally take a selfie next to the sign and leave. But you know what else I saw? I saw that community show up. The walk from the parking lot to the shelter was a good quarter mile. I saw people just carrying boxes, walking all that way, and we would run out there and meet them with a dolly. And they're like, I just live nearby, and I heard there's a shelter here. I've got a box full of cereal and stuff for the kids, you know, things like that to support. It was amazing to see the community show up. But mostly, I just want to say thank you to the city of Orange, and thank you to the fire department for really revitalizing this program that was kind of, we didn't know what it was going to do. And to Megan Barrowman, our city emergency manager, she took the CERT program, took it down to the frame, and rebuilt it for scale and efficiency, and now it's really rocking. So this is a testament to that. So thank you. Thank you, Doug.

That ends public comments. Next is the consent calendar. We have three items that the public would like to remark on. One is 3.3, 3.4, and 3.11. Would any of my colleagues also like to pull anything for discussion or comment? Seeing none, I will, I'm sorry, did Council Member Barros, did you wish to say something? Thank you.

I actually had a question about the order of, I'd had mine on earlier and you didn't recognize me, but it's council member Gillenhammers about the consent.

Can I pull 3.12? Okay.

And I'm sorry, council member Barros, I did not look at the screen I should have, so. All right, item 3.3. Agreement with Belmont Estates Homeowners Association for installation of flock cameras on city property.

Mr. Mayor.

Did you want to take a... Let's do that. We have a motion to approve the balance made by Councilwoman Tavelera, seconded by Mayor Pro Tem Bilodeau, and I'll call for the vote. proof unanimously. Okay, item 3.3. We have four speakers for that. First one is Jacob, followed by Evangeline Watkins.

I was just wondering, you guys say that this new program for 3.4 for the security of city streets is to make sure to keep our people safe. But then what are the other side effects that could come from that, like invasion of privacy? Actually, just that, invasion of privacy. That's my question.

OK. We can address your questions after all the speakers have spoken. Thanks. Evangeline Watkins followed by Jared Segundo.

Hello members of the City Council. I am a lifelong resident of Orange County and like many others I'm a registered voter. As stated, I'm here to speak on the propositions related to the Flock cameras proposed in the city. For those who do not know, Flock is an automated license plate reader company currently worth $7.5 billion. Car surveillance has already built a sizable AI-powered network with tens of thousands of smart license plate readers across 49 American states. In Orange County alone, there are 7,004 flock cameras, or surveillance cameras. Of these, approximately 4,800 are owned by flock, with the remainder divided among a few other companies. Specifically in the city of Orange, there are currently 200. with 120 of these owned by Flock, and again, divided among other for the remainder. The current major hotspots are located along Cotella and North Tustin along the freeways. While these are advertised as license plate readers, Flock cameras are also tracking car make, model, and colors, along with other identifying information such as dents, scrapes, and bumper stickers. Some of these are also using facial recognition technology. There's no real public information about the model of flock cameras being used. This information is collected of all citizens, regardless of whether or not they are suspected of a crime. This can lead to wrongful arrests and stalking. The majority of these cameras do not use end-to-end encryption, and many do not use multifactor authorization. These flock cameras use AI and give police live access to these cameras. In many other states, these cameras have already been used to track and monitor citizens without court warrants or any orders. These are city-owned poles that are wanted by an HOA. My question is why these city poles are being used when the HOA is completely capable of using their own property to place these poles. These poles, number 7738, 0832, and 0820, are all within half of a mile of one another, less than one minute driving and less than 15 minutes walking. Poll number 7738 is specifically four minutes away from Villa Park High School. Also in the immediate area is Villa Park Elementary and Orange Lutheran High School. These can be used for tracking and monitoring of young citizens, and personally, I believe it is completely unnecessary. I leave up this quote from the ALC. Investigating criminals should be the job of law enforcement, not big companies that have strong incentives to use these infrastructures against labor activists, disfavored customers, and others. Use them not for crime, but to protect the bottom line. Thank you.

Thank you, Evangeline. Following Jared is Jana Anderson.

Good evening, this is my first time being here, so bear with me. Jumping off of Evangeline, I'm just gonna say this. This is gonna be for, this will affect every single immigrant in this town. To all the janitors who are trying to scrape by enough for their children and to feed their family, this will be affecting the people who are selling flowers on the sides of gas stations and corners. Are we really going to let these flawed cameras end up sending this information to ICE and the police to wrongfully take these people away? I've lived here my whole life, like 19 years pretty much. Even though I'm 22, I've lived a little bit in Santa Ana. Anywho, I've lived here my whole life and nothing ever happens here. This is the quietest town. This is the most peaceful town. I'm thankful for you guys for making it that way. But these flawed cameras are not the way to do it. This will make a lot of unlawful arrests and is more trouble than you think it will be. Okay, that's everything I got, so sorry. Not bad, Jared.

And Jana Anderson.

Good evening, Mayor, Mayor Pro Tem, and council members. My name is Jana Anderson, and I'm a homeowner and resident of Orange. I come here tonight as a concerned citizen who believes in the right to privacy. I'm deeply concerned about the future of our city and of our country. I don't want to live in a world where my movements, going to visit friends, volunteering in my community, or going to the grocery store are being tracked by cameras and recorded in a database. I don't want my patterns of everyday life being analyzed by artificial intelligence or unauthorized users. I think the installation of new cameras and renewal of the licensing of current cameras must be put on hold until you can ensure the residents of Orange that our city government and police department are complying fully with the California ALPR Privacy Act and California State Senate Bill 34. Are you allowing sharing of data with any out of state or federal agencies, including ICE? According to a letter sent by the ACLU to Attorney General Rob Bonta, OPD was not complying with state law in this regard at that time. Has Orange implemented and published strict usage and privacy policies stating who has access to the data and how it is protected? If so, where is this available? Data may only be legally kept for a short period of time unless it's being used in an active investigation. What are the data retention, practices in Orange? How many cameras are being used in Orange, and are any cameras providing live footage, and is facial recognition being used? I appreciate the job that Orange PD does to keep us safe, but to quote Benjamin Franklin, those who would give up essential liberty to purchase a little temporary safety deserve neither liberty nor safety.

So I'm going to assume that all of you were speaking both to items 3.3 and 3.4. 3.3 was the quest of Belmont Estates HOA to add flock to their community. 3.4 is to further our use of flock citywide. Is that correct? Okay. Would anyone from the police department like to address any of the questions raised? Okay. Okay, all right. Council Member Barrios.

Yes, thank you, Mr. Mayor. The police chief and I had a long conversation about the cameras a couple of months ago now. And one of the things that was brought up during that discussion was that while the police department itself had certain policies in terms of how the information was used or how officers could access the cameras, we have not taken the time to strengthen the ordinances of the city itself. to meet some of these questions that our residents asked about. And that's kind of where my main concern sits. And these go to exactly what our speakers talked about. What is the retention policy? How do we look at this in terms of are we going to take action against somebody? So not just that if they wrongfully access the data or the cameras to help out somebody who doesn't have any right to have that data, that they have faced the consequences of the department what are the consequences for the city and i think that that is something of such vital importance that before we expand that we have that codified that there are some serious serious repercussions if anyone steps out of those bounds because we are talking about people's privacy we are talking about people's private information in terms of their comings and goings and their patterns um and as someone who has seen what happens when the wrong person gets in you know has their hands on data in terms of stalking um that really bothers me um i do want to say too that just for clarification because i did receive um the letter in terms of the aclu asking attorney general bonta about whether or not certain departments were following uh what was what is a state law, that it wasn't clear in the letter that the city of Orange was out of compliance. It could be that somebody who was on the list on this record, and I will give this to the city clerk to enter it into the record, they could be in compliance or they could just not have responded. So, I mean, that would be one of my questions to you. Yes, I would love for you to come up and answer some of these questions. And what the letter is is from multiple ACLU chapters and specifically asking about whether certain police departments, to clarify that you're following Civil Code 1798.90.55, also known as SB 34. So if we could start there, I would appreciate that.

Well, good evening, mayor and members of city council.

A couple of things that I think are important to address. So let me make sure that I have my. I think I've said it before and I'll say it again that the police department does not enforce immigration. We are in compliance with SB 54. We are in compliance with the state law and we're in compliance with our own policies that allow us zero access and zero permission to enforce immigration. Flock cameras do not capture facial recognition. They're a vehicle and a license plate technology that is a lead for our detectives. And as your and my conversation went, a license plate and or a vehicle does not automatically equal a person, a race, an immigration status. It is a tool that then our detectives have to use to go into the California Law Enforcement Telecommunication System, CLETS, to access DMV information and then do hard detective work in order to put warrants together that lead to arrests and further searches. Flock is a tool that points us in a direction and When you talk about privacy and you talk about access to this, policy and state law prevents officers from going and breaking the law. And when they break the law, they get held accountable. And so the things that we're talking about, stalking, illegal access, all of those things are against the law and against policy that lead to discipline and that lead to us holding our officers accountable. What we're talking about is crime prevention, and reduction in crime, which is our number one priority as a police department. Our crime is down 20%. Vehicle theft is down 31%. I can guarantee you that Flock has a, there's a reason behind that, and part of it is Flock and the technology that we're able to access. The crime that we're able to solve because of this lead, we have numerous success stories that start with the simple theft of some of the plaques down in Old Town. That was a result of a lead that was given to us by Flock. We're not randomly or incoherently tracking anybody's license plates to want to know their patterns to community events. We're tracking things based on a crime, a specific incident that has nothing to do with immigration and has nothing to do with people's normal day-to-day activities. We're talking about crime and victims of crime, and FLOC is one small piece, sometimes a bigger piece, of a tool that allows us to reduce crime. I brought Sergeant Mike Sellers with me tonight, who has more technical data, technical questions about the number of cameras, about some of additional success stories. I'll address one more thing. The retention period, ours is 30 days, unless it's tied to a crime. So 30 days. And then the last thing is, if you want, we have what's called a transparency portal on our website that talks about every agency we share with. All are California. None are the federal government. And it talks about all of the prohibited uses, what it is and what it does, and talks about how we are in compliance with federal and state law and do not share with immigration for anything related to immigration. So with that, I'll answer additional questions. But if you guys did have technical questions, Sergeant Sellers is here if you want to go down more technical or more ways the flock works.

I had one additional follow-up, and this is just for clarity amongst the two items, because I was wondering if the cost and what it was, it looks like item 3.3 was this agreement with Belmont, and then the second one was the purchase of the actual cameras, or are they two utterly, can you just clarify that, if they're two totally separate things?

Sure, so to clarify, item 3.4 is the renewal of a two-year agreement with FLOC. Two years ago, we started a... Of the existing cameras. Of existing cameras. 43 license plate readers, 13 live cameras. Item 3.4 is a renewal of that contract. When we got that contract two years ago, Belmont Estates approached us after we got it out, so in the last year, approached us and said, we want this technology in our community. We want to have it in our HOA. And so 3.3 is their contract. with the city to access a light pole, and they are paying for all the cameras, all the technology. As with any business and any private entity, if they purchase flock, purchase the camera, we have access to it, totally funded by that entity, whether it's a small business, whether it's a private entity such as an HOA, or even a resident can purchase their own, and then they give the police department access at no cost to the city.

The second part of that, specifically for Belmont, and this would be on a go-forward basis from a matter of policy and just our own protection against liability, is it would be really helpful if, because it's an HOA, that you include some type of either the minutes from their HOA board or that a vote was taken so that it protects us that nobody can come back on us and say you know we didn't know about this but it's just if you could get that going forward because i'm sure other communities will ask for such things but i think it gives both pd and at the city a level of protection that they didn't just um that an hoa didn't ask for it arbitrarily or without speaking to their residents okay And I'm sure that they probably did that. Okay, so back to the main item. One of the things you and I discussed when we talked about this was we talked specifically about the policy that, yes, there are these laws. There's policy with PD and there's state law. And we talked about how the city itself could strengthen or create its own ordinance to just, again, just codify some of these protections for our residents. What would you recommend that we do if we were looking at something like that?

Without knowing where that would go, I think it would just reiterate or you had mentioned a couple things a few minutes ago about protecting the city or somehow codifying the city against some action, some illegal action that you were referring to. But I still think we as a police department represent the city. And if our employees are doing illegal activities or illegal things, I always think that the city could be liable for something like that. So I think In any event, our city policy, our department policy, and our state law is going to, is there and meant to protect our residents and our community from illegal acts by our officers. Where the city would strengthen that, I do believe that the technology policy that the city has could be strengthened, but I think it would just reiterate what a lot of our policy already talks about. But if there is some specific policy entity that the city runs with relation to that technology that could be strengthened there.

And my final question before I, Council Member Bilodeau, is there any urgency to either of these measures tonight or could they be postponed if we needed more time to look into some of the things we've discussed tonight?

The Belmont Estates is, they've been wanting this for a year. I don't know that any delay would prevent them from, I mean, eventually they'll have an answer for that. So I don't know that there's any timeframe with that. The 3.4, which is the extension of the flock policy, does run into our end of one contract and then the beginning of another. So if there's any further delay that would prevent that contract from being renewed, there could be a cessation of service.

And what's the date on that?

I believe it's June 1st.

Okay, thank you.

Council Member Gutierrez.

Thank you, Chief, for the information. Since we're combining 3.3 and 3.4 together, I was curious in regards for the Belmont, which is 3.3. So they're requesting this. And their HOA is going to have access to the information that Flood Camera gathers. And they're going to be the sole people who get to see this information. And are they under the same guidelines as our PD? Do they have to follow all the Senate bills? and it's only going to be for license plate reader, and you're not going to be sharing this information, and things of that nature. The same things that you just said that RPD is using. I'm wanting to know how they're going to use it, how they're going to store it, and who has access to it.

Because they're part of our system and our flock, we are the owner of that information, just like any other information. I think there's also a misperception that flock owns the data. We own the data as part of Orange PD. And so with that 30-day retention, they are paying for the camera and they are giving us the access. We control the data.

Okay, so the HOA has no hands-on? Correct. They just want additional cameras in their area?

They want additional cameras because they know when we have 43 cameras, we can only put them in so many spots, and they know that their neighborhood may not be part of where we would deploy those 43 cameras. And so they've asked for additional cameras at their expense, but the control and the ownership of the records are ours. Okay, thank you. And governed by our policy and the state law.

Great, thank you for clarifying that.

Any other questions? We have a motion from Mayor Pro Tem Bilodeau and a second from Council Member Dimitriou.

And this covers 3.3 and 3.4, correct, Mayor?

No.

Okay. We have additional speakers, Mayor, for 3.4. That's what I thought I asked if everyone had spoken. Okay, great. So do you want to just make a motion for 3.3?

Yes.

And that's OK? I'll just say Belmont apparently has been asking for this for a long time. So I think if we delay it any further, it's on us. And so I will support the motion as well. Any other comments? I will call for the vote. That is approved five to two with council members Barrios and Gutierrez voting no. Okay, item 3.4, which again is the agreement with Inside Public Sector Incorporated for Flock Camera Licenses, Software and Services for the Police Department. And we have three speakers on that. First was Ann, unless, Mayor Porto, did you have, okay, go ahead.

So Mr. Mayor, when these flock cameras first came forward, I did a lot of research on it and I too met with the Chief of Police, our former Chief of Police, Chief Adams, as well as a city attorney. I too greatly value my privacy and the privacy of every resident of Orange. And I deal with the permitting of these types of cameras at the County of Orange as well. The Orange County Sheriff's Department has a lot of these cameras in South Orange County. I can tell you that they are extremely successful in solving crimes and I think that actually Councilman Dimitriou was a victim of crime and a flock camera solved it, but I'll let him tell that story. And I know that for car thefts, it is extremely powerful tool. You know, I don't want the government tracking my movements and I don't want them tracking yours either. But I've looked over the protocols that they use, and I know this data is secure, and very few people have access to it. This is not being used, to my knowledge, for any kind of immigration enforcement. And I think these types of cameras are actually a game changer in terms of crime solving. And this is coming right from the police department where I've met with them, and they've told me it's a game changer for them. in terms of solving crimes. So I hope at some point my HOA comes forward with an item like this. I congratulate Belmont for stepping up to wanting to keep their community safer. There are daytime burglaries in my HOA. And geez, I wish there was a camera in my HOA to help solve those crimes. And that's all I have to say, thank you.

Thank you for waiting, Ann.

like them, but every authoritarian regime uses safety as an excuse to take away your freedoms. And I listen to you talk about Cameron's mayor pro term, and I think of China. And I'm always a global thinker, and I think of what's coming. And people think of the safety, but there's people in our government that want to control everything that we do. And in China, they have a huge homeless population now because everything is, you know, if you make one misstep, then your credit score goes down. You can't buy gas. You can't buy food. And it seems like, you know, they're rushing the data centers. They're rushing the cameras. And from what I have done in my research is it does go to, it goes, it flock integrates to Palantir. And I don't know if you guys are familiar with Peter Thiel. That was when he was interviewed last year and asked about AI. And if he thought he believed in preserving humanity, he said, I don't know. He is associated with Flock. So I think that you guys are putting too much emphasis in Flock giving you trusting information because governments do lie. They do not tell us the truth. If you looked at any of those FOIA things, our own government has done some horrible things. So I'm just very skeptical by nature. And from what I've seen, there's been a lot of hacking into Flock. Our own Kash Patel was hacked and got information out. If you have anything online, it can be hacked. And so I see a lot of these cameras by schools. Where do predators go? They go to schools. And a lot of these, anytime it's online, it can be hacked. And I, again, flock is solving these crimes. Could they be committing the crimes in the first place and then telling you they're solved? There is no free lunch. If they're giving you free cameras, they're getting something in return. They're telling you they're giving you a free camera, but I saw that the FBI wants to have nationwide license plate readers to look up all cars without a warrant. And are you guys concerned about these new cars? They just voted that all cars, they're going to monitor you starting in 2027. They're going to monitor your eyelids. You know about that, right? Congress just voted that in, that all new cars, they're going to watch your eyes, and then they're going to shut your car off if you turn your head. Does that authoritariness not concern you? No? So that's what, it just seems to be a pattern. But it's just, you're going to be opening yourselves up to legal compliance risk, subscription fees, liabilities, switching vendors may be difficult, breach of misuse, damaged trust, fake AI. AI, is somebody going to do a fake AI hack in and make something look like it? Somebody gets arrested, plate misreads, and tool, not evidence. And, you know, Flock and Palantir, they're from, you know, our CIA cohorts. So that's all I want to say.

Thanks, Ann. Jacob, did you have anything new to add? I hope you're good. Okay. Evangeline, did you have anything new you wanted to say? There's no anti-terrorism. There's no multi-factor authorization. Okay. Thank you. Jared, are you good? Did you have anything else you wanted to add?

Okay.

And I know Mary Oberschlake has not spoken yet. You're up, Mary.

I'm coming up with downloads.

I'll be speaking from the heart. Good evening, Mr. Mayor, Mayor Pro Tem, City Council.

Three minutes. All right. First, you talked about crime going down. But I don't see how catching somebody after the fact has anything to do with crime prevention. You caught somebody. That's great. But I mean, the argument is bizarre. It's like saying the death penalty stops people from committing crimes. I mean, was that the point? We know it doesn't. All right. First, how much money is this going to cost? We say we're broke. but we're gonna spend money on something that nationwide people are questioning this. In fact, in Congress at the traffic commission, by one vote, by one vote, they would have defeated flock being implemented nationwide. There's gonna be a change, a change in administration, change in policies. Are we gonna throw good money after bad? I mean, invest in this and then suddenly six months, A year from now, it won't be allowed, but we're sunk. Is Flock and the companies that are associated with them, are they going to give a refund? I do not think so. And there are serious civil rights issues that are being discussed all around the country. I know the case in Virginia. was decided, but it was left open-ended. There are cases around the country now about civil rights violations with flock. There are cities that have got Flagstaff, did not renew their contract. Santa Cruz did not have, they did not, they voted it down. I mean, let's follow the example of some of the other cities, at least don't vote now. Get more information about what is involved with civil rights, what's involved with legal liability that the city may have. I think this is a rush to do something that is, The American population is not approving of this. We're not. I'm sorry. I'm speaking discombobulated. But y'all can't do this. I mean, it's going to be a mistake. It's going to come back and bite the city on the butt. Don't spend our money this way. Spend some more time. Do more due diligence. Spend some more time on the issues that were raised here by people that spoke much more intelligently than me. If the contract's going to expire, they want your business. They'll wait. Spend some more time on it. Thank you, Mary.

The last speaker is Patricia Cabada.

Good evening, Board. My name is Patricia Cabada, and I'm a resident here of Orange. Fog cameras capture comprehensive records of daily movement. Unlike traditional police investigations that target specific suspects, these systems take photos of every car that drives by. EFFECTIVELY CREATING A DRAGONET LICENSE PLATE READER SURVEILLANCE SYSTEM. IN CALIFORNIA, SANTA CRUZ, MOUNTAIN VIEW, AND SOUTH PASADENA HAVE ALL SEVERED TIES WITH FLOC FOLLOWING PRIVACY AUDITS AND PUBLIC BACKLASH OVER THE OUT OF STATE AND FEDERAL AGENCIES ACCESSING THEIR LOCAL LICENSE PLATE DATA. In other major municipalities, other cities have canceled or paused their contracts with flock safety. Currently in San Francisco, there's a class action lawsuit for violation of California's ALPR Privacy Act, California Civil Code 1798.905, negligence, invasion of privacy under California Constitution Article 1, Section 1. How do we know that FLOC security won't insert biometric recognition and identification at altitude and range? The program aims to provide the US intelligence community with the ability to perform accurate and reliable biometric identity intelligence across a wider range and imagery and collected. From a selection of sensor platforms, it's capable of detecting and tracking individuals and extracting biometric signatures from whole body and face. Many people in this city don't approve of being tracked and traced, and that's what these vlog cameras do. The last time I checked, we live in the United States of America where we can travel freely, where we can travel without having to have the worry of who is tracking us, who's keeping an eye on us. I mean, isn't that what makes us America? Isn't that what makes it so great? Because we are not like the Chinese Communist Party. And flock cameras are very much going heading towards communism because that's what communists do. Do they keep track? They surveillance their citizens. So how is these flat cameras any different? By you voting yes on flat cameras, you might as well call yourself a communist. What about potential lawsuits? With the current financial state that this city is in, are you able to be in a long-term litigation regarding this contract? Because a resident can sue a business, or what about visitors? What about people that will no longer come to the areas that you added them to? Because a lot of American citizens do take their privacy very serious. Again, this is America. We are not in a communist country for you to surveillance us, to track and trace us. Please do not vote against this. And if you have the money, then just give it to the police department. Give them hours or put it, set it aside so that you never have to let any of them go. Because that was up on the table before.

Save it for them. Give them hours.

Thank you, Patricia. Okay, I'll bring it back to the council. Council Member Dimitriou.

Great, thank you, Mayor. Please, Mr. Police Chief, just a real quick couple questions. We've had the contract that's currently in place for two years, correct?

Yes.

And over those two years, how many cameras have we had operating in the city?

The same that we're requesting tonight, 43 license plate readers and 13 live cameras.

All right, and so of those 56 cameras, have we had any recorded false flags?

To answer your questions, part of the process with the flock when they do get an alert is they have to vet the information. We don't just immediately respond to it. We have to verify that it's accurate. For example, if a license plate comes back stolen, the officers and dispatch have to vet the information and make sure it's accurate. An example would be a car that's been recovered, stolen vehicle, still shows it's been recovered, it's no longer stolen, but FLOC may have not updated yet that it's been recovered. So the officers will have to take the time to make sure it's stolen before they take any action or not stolen in bed at first. We don't immediately respond out and just deal with it immediately. All right, Sergeant.

So in that, under that same guidelines, with verification after the fact and such, has there been any false flags? Have we done any internal audits where we have found a flaw where we've recorded, stopped, or detained without proper cause.

Not that I'm aware of.

Thank you. One thing that came up, and this is more of a comment, so don't worry about it. One of the things that came up was FLOC is solving crimes. That's actually a false narrative. They are not solving crimes. Our police department solves crimes. This is just a tool that's used in their toolbox. And the last speaker spoke of our financial situation. It's true, we have a financial situation, so anytime we can use additional tools to give the police department to make speedier arrests to solve crimes helps the city. I'm a victim of a crime where Flock was used and the city didn't have it. They were able to get the license plate off the perpetrator's vehicle. put it into a system, and then nailed the tweaker down in Costa Mesa, getting high in a Costa Mesa motel. I think our police department, they actually thought ahead and found this guy and then put him in prison. Does cameras actually stop crime? Yes. And here's why. And that arrest puts that person maybe into a, I won't do it again, or when they get incarcerated, They don't commit crimes while they're in jail on the folks here in the city of Orange. They might do something in the prison, but not in the city. So I'm going to continue to support this firsthand experience with its success. I believe our police department has the audit ability. Oh, quick question. I'm sorry. Something that has come up. Under the 30-day retention, has Flock at any point in time over our last two years randomly downloaded material in order to keep it on some sort of secret hard drive somewhere?

We're not aware of them doing that.

And do we have the process in place that we can tell if somebody has accessed it externally in any way, shape, or form?

We would get alerts and other things because it's our data that we own.

All right, thank you. I'm going to continue to support this. I'm going to move the item.

Too late.

Oh, never mind.

The item has been moved by Mayor Pro Tem Bilodeau and seconded by Council Member Gillenhammer. Further discussion? Council Member Barrios.

I had two questions. One for the City Manager. With the Police Chief telling us that this is a contract that's about to expire on June 2nd, why was this brought so late so that we didn't have time to discuss and talk about it a little further?

I WOULD HAVE TO LOOK AT THE TIMING, BUT I WAS REVIEWING THE STAFF REPORT. I THINK THE CONTRACT, AS WRITTEN, STARTS JUNE 26, SO I THINK WE MIGHT HAVE A MONTHLY TIME IN THERE.

So we could go an extra two weeks if we need a little bit more time to look at how we can...

If you wanted to, yes.

Okay. And then for the police chief, do you know if... I couldn't find it in the agreements that were part of the agenda, but for our agreement that we have in place with FLOC, do we have the standard user agreement or do we have a specific user agreement for the City of Orange that helps maintain our data as to just us? so that we haven't signed their standard terms.

I'm looking to the city attorney just to make sure. I don't know the difference in terms of what you're asking.

They utilize the City of Orange's agreement with our provisions, with our indemnity, our insurance, our termination clause. We can terminate the contract within 30 days with written notice as well.

That's not what I'm concerned about. Their standard agreement allows FLOC to share their data at any time. So once it's in the system, it's theirs and they have the ability to do that. Their standard agreement says that in the fine print versus if a public agency or a police department puts in their own clause that's very specific to not being able to share any time the data that's collected.

Council Member Bias, I'm looking at the attachment to our agreement. Would you be able to point me to where you're seeing that in their standard agreement? Because their standard agreement is not attached to the agreement that is before you.

It should be one of the standard clauses. So... Let me find it. It is, I mean, I haven't looked at their full original contract that they did with us, but this is what I'm asking.

The contract before you is the two-year extension, and the only document that is attached which is incorporated as part of the agreement is their quote. It doesn't include their standard agreement.

Okay. With that, if I may, I'd like to make a motion to, a substitute motion to table this item for two weeks until our next meeting, until we can have some of these items clarified.

Okay. There's a substitute motion. Is there a second?

I will second that.

All right. Seeing there can be no additional discussion, we'll vote on the substitute motion. Motion fails with everyone except Council Members Barrios and Gutierrez voting yes. So we'll continue with the motion that has been made. Council Member Gillenhammer.

Thank you, Mayor. Just to address some of the questions that were raised. proposed today. I think those are good questions around privacy. I've worked in a loss prevention capacity in a previous role where we've deployed a number of actions, including domes, camera strategy, signage. They act as a deterrent, if known, and they act as a tool to help identify and close cases. I've seen them be a deterrent and I've seen them close cases in a lot of different capacities. So again, having seen this and having as well myself talked to the police department in the past around the use of these, I'm convinced that the here and the now and the existing use of these tools is protected, it's private, it's used in the right capacity. I think these questions should continue to be asked in general because I do think there is a problem with China over surveilling as called out. But I think in the existing capacity, 100% support these tools and the outcomes that they present for the City of Orange.

Council Member Gutierrez.

Thank you, Mayor. I'm very always supportive of LRP to have tools. And this was something that two years ago, was it two years ago, this contract, Chief? Yeah, I did vote yes on this two years ago. But now as I'm looking at what is occurring currently, I have some concerns. And when you said that transparency portal, Chief, where they can check who you're sharing the information with, who is on those lists? Is that other police agencies in California? Is it nationwide? I didn't know we had that, so that's good to know.

Yes, it's actually on the City of Orange page under the police. It's where the policy and training manual is. It's also right at the very bottom as a FLOC transparency, and it has all that information, agencies that we share with and that share with us. With FLOC, we only share with California police agencies. We do not share outside of California. If you want to look at it, California is basically like its own little island with FLOC. We don't share outside, and we don't get anything from get anything from the outside so if someone tried to get our information from the outside it gets blocked by flock and if we tried to share it from the outside it would block us from doing that So it's only California agencies.

Okay. So that means like sheriff departments and things of that nature.

Correct.

And once they access our information, are they able to share it outside of California?

No. The block has it set up to where it can't go outside California agencies. Yes. And we control who we share it with, if that makes sense. Okay. So if an outside California agency wanted to use our information, they have to ask us, and we have to give that permission first before they can even look at it.

Okay. Thank you. Appreciate it.

All right, I will call for the vote. That was approved six to one with council member Barrios voting no. Next is item 3.11, which we have a public speaker on. That is authorized purchase of replacement computers from CPAC Incorporated, Curt Peterson.

Good evening again. This is short and sweet. $123,000 for 49 computers is a drop in the bucket. I think we can all agree to that. I'm just going to ask the question, is this absolutely necessary right now? Or is this something that could be put off until we possibly sell some assets and get a little bit more money going to the city? And the second question is, from a transparency standpoint, was this a no-bid contract with CPAC, or did we put it out for bid? Did we check the prices versus Micro Center in Tustin? I did today. And I'm just wondering... Is that a fair price that we've been quoted? I was led to believe it might be a little bit steep, more than a little bit. And then finally, at the last meeting, Council Member Talaveras pleaded for resident help in her district for sidewalks, pavement, and several other things that's not being represented fairly. And here we are buying computers and not addressing, again, something for the residents. So we're losing sight. And I just want to say this continues to be a disconnect. And when does just saying no become a thing for Orange? Thank you. THANK YOU, CURT.

COUNCILMEMBER GILLENHEREN, DID YOU HAVE SOME COMMENTS?

YEAH. CURT, I THINK THOSE ARE THE RIGHT QUESTIONS, AND I WOULDN'T MIND IF WE GOT THE ANSWERS TO THE QUESTIONS. AND THEN JUST UNDERSTANDING, LIKE, WHAT IS THE AGE OF WHAT WE'RE REPLACING, AND THEN, YOU KNOW, WHY IS THAT SPECIFIC DOLLAR AMOUNT THE RIGHT PURCHASE FOR COMPUTERS THAT YOU COULD GET FOR $1,000 EACH?

Yep, thank you, good evening, Mayor and City Council. We are looking at a fleet of over 800 devices in the city, and we are trying to proactively replace the oldest or the most aged equipment that we have in the city with new technology. The standard that we've tried to adopt is the Microsoft Surface laptop as well as the Microsoft Surface tablet for certain locations in community development where it's a preference. As far as competitively bid, it was not competitively bid, but we did use a cooperative agreement that was competitively bid that we're piggybacking off of. As far as sharpening the marketplace, that's not something that we've done.

Just for a point of clarification, how old are the computers we're replacing? And then what new tech or why do we need those today?

So the ones we're targeting are seven years old. And in addition to replacing them, we're replacing desktops with these Surface laptops for more portability so that they can navigate around the city and not be tethered to their desk. So that's another goal we're trying to achieve with the replacement.

Thank you. I think the comment that Kurt had is a legitimate comment, and I think it's how we spend money and how we decide to invest money. As we go down this path, really being intentional with service life and so forth. I'm okay with this move. I understand the background behind this move, but I also think There is opportunity, in this case, to buy something slightly less expensive. But I understand the thought process behind this. Kurt, it's the right questions. Thank you.

Good discussion. Mayor Pro Tem Bilodeau.

Yes. Is this the same effort that we put off, like, was it a year ago, 18 months ago, where we asked you to go back to the drawing board when you were trying to do some equipment replacements?

We actually did do a fairly large replacement last year to make us Windows 11 compliant. It was predominantly desktop replacements and then a small number of Surface laptops as well. So this is furthering the Surface laptop adoption for positions where it makes sense.

Okay, and this will obviously provide enhanced security of- Absolutely, yes.

So these also have facial recognition so that we have multi-factor authentication on the device as well. And to your point, prior to last year, we did delay our PC refresh for three straight years.

Yeah, I recall that, thank you. Council Member Gutierrez.

To Ms. Council Member Gillingham's point, the employees who are utilizing or who will be given these surface tablets, what is their job duties and how will that be a service to the community?

Well, from the employee perspective, what it gives them is mobility, particularly as we move to try to keep the city open five days a week. We're going to be shifting some schedules and folks are going to be potentially working from home. So this gives them a little more portability and gives them the freedom to move around, particularly as they participate in meetings in various locations with other departments. They can bring their technology with them and still have access to information instead of handwriting notes and Dictating back.

Okay, and so what departments would that be? Public works, would that be?

It's actually across all departments. So we look at all the departments and the oldest technology gets considered for replacement. And we also do some grandfathering where it makes sense as well. So we make sure that we're putting the newest technology where it gets the best bang for the buck, if you will. And then we'll grandfather their technology to somebody else to backfill it.

like inspectors and things of that nature utilize these services?

Some of them would, yes. Yeah, in fact, most of them would, because they are out in the field.

OK, thank you very much.

Thank you. Sounds like the city manager's announcement got jumped. All right, any other discussion on this? We have a motion from Mayor Pro Tembilido. Is there a second? There's a second from Council Member Barrios to approve this item. Any further discussion? Please vote. That is approved unanimously. Then lastly on the consent calendar, item 312, authorize an increase to an existing purchase order for safety gear and equipment supporting fire operations and the emergency medical transport program. Council Member Gillenhaven.

Thank you, Mayor. This item increases the purchase order for safety gear somewhat in line with the agreement around the hiring of an additional ambulance operator. So from what I understand, we will be looking at hiring 18 additional ambulance operators. Is this a purchase order to help support that, city manager?

Yes, it is.

OK. I had to step out for this meeting where the presentation was given, but I've had a chance to meet with our Fire Chief Allen prior and outside of our meeting, as well as former Fire Chief Demo on the possibility of adding 18 ambulance operators into the city headcount for the fire department. There's a lot of passion behind this, and I think it helps us move to four-person crews, which is NFPA gold standard essentially. So there's a significant increase in service levels with this move. The cost to the city is the cost of hiring 18 additional people and the cost of outfitting those additional ambulance operators. I wanted to say I support this move coming from somebody who is hyper focused on our budget for the city. And I want to give our fire chief recognition for his entry into the role, the respect that he has from his team, his passion for the department, and his focus on the well-being of the residents of Orange. So I appreciate his presentation, the information behind it. And thank you, Alan, for a great entry. I do want to say to our city here, as we transition into this structure with four men crews, we have an existing structure around three-person constant manning. I think as we move forward, this is also an opportunity to take a look at controls from an overtime perspective. So I think as we move forward, it's something to be paying attention to. In my opinion, constant manning should hold at the existing service levels of stated three-man crews. And as we go forward for future discussions, the move to four, constant manning held at three, is in fact a way for us to have some level of control over overtime spend. So I do think this is an opportunity to drastically improve service levels if done correctly. Also, be some level of cost savings to the City of Orange. It's a good win across the board, so I support it.

Thank you, Councilmember. Good comments. Councilmember Barrios.

Yeah, I just wanted to kind of continue on with what you were saying, Council Member Gillenhammer, just because with the chief in particular, one of the things that just wasn't really clear in the staffing report here is that this also, when we looked at this, this wasn't a new expenditure with just we're spending money and it's going nowhere. This was an expenditure towards getting the money back. I think it was 18 months was your overall timeframe for when we would actually recover once we made this expenditure, is that correct?

That's correct. However, after recent calculations, even a shorter time frame. Even better. Within six months to a year.

And then in addition, when you and I spoke about this, one of the things that I really liked about it was that because we're going up to that gold standard, it would not only benefit the city and allow us to look and renegotiate insurance coverage and how we're being charged for any current liabilities or for any of our policies. It would also allow our residents to take advantage of that because we were at a different level, a different standard of staffing and what we offered in services, correct?

That's correct.

So everybody wins.

Everybody wins, including the businesses.

Yes, exactly. Thank you. I just wanted to make sure that that was really abundantly clear.

All right. We have a motion from Mayor Pro Tempildo, second from Council Member Barrios. I'll call for the vote. Item 3.11 is approved unanimously. All right, reports from Mayor Slater. I was asked to announce that we still have maybe one vacancy on the Audit Advisory Committee, one vacancy on the CDBG Committee, two vacancies on the Investment Advisory Committee, which we've had for some time. one upcoming vacancy on the Planning Commission. I believe that's Mayor Pro Tem's appointment. And before we move on though, I thought it would be prudent to just give very brief updates on two news items that happened in the last two weeks. The first one being the most recent one, and that is the Garden Grove issue. And city manager, if you could just briefly explain, or maybe the fire chief, just wanted the city to know what the city's done throughout this issue and how we prepared ourselves for it.

Good evening, mayor and city council members again. As you know, personnel from the city staff were directly involved in the different capacities on the Garden Grove hazmat incident. First, I want to highlight that through the city of Orange was not directly impacted. We were diligent in preparedness should the worst case scenario of a blevy occur and the impact to the city due to the prevailing winds and fallout. On the operational front, we had Operations Chief Robert Stefano and Battalion Chief Mike Diersing provide real-time information and coordination updates from OCFA throughout the incident. Additionally, Chief Diersing was assigned as the Incident Safety Officer at the command post, so he is truly embedded within the incident 24-7 during this time. The three of us spoke daily multiple times around the clock to provide the most accurate information through our city PIO, Charlene Chang, and OPD, excuse me, OPD Sergeant Trevor Cullen to our city staff and to the public. The EOC was set up and placed in a moderating status so that it could be activated without delay should the need arise. Our EM, Megan Burriman, was fully engaged as chair of the CERT Mutual Aid Response, which was mentioned earlier, assessing the need for additional shelters and activating CERT members to respond to shelters in Cypress, Fountain Valley, and La Palma. In summary, the response to the Garden Grove hazmat incident demonstrated the effectiveness of our training, the professionalism of our personnel, and the strength of our interagency partnerships, truly. Moving forward, we remain committed to keeping the community safe, of course, and ensuring it's protected during any complex or other high-risk events.

Thank you. And I also understand that our Gohalva Park was offered as an emergency shelter, but it was not needed.

That's correct, Mayor. Initially, we offered it up as a reception center and then further looked into making it a true shelter for overnight stay. However, it wasn't needed.

Very good. And Council Member Barrio, Council Member Demetriou is holding his eyes open with sticks because he has been immensely involved in this entire operation and is missing a lot of sleep. So I appreciate you being here this evening. Council Member, thank you for the report. Does anyone else have any questions for the Chief or Council Member Barros?

I was just going to say that OCFA just put an alert that all evacuation orders are now being lifted. So that's very good news.

That's great news. Thank you so much, Chief. The second news item was the point in time count of every other year count for the homeless population in Orange County. And the report came out that we basically haven't made any progress. And I think the city manager might want to speak to that. I also want to... Well, after you're done, I'll chime in.

Yes, no. Thank you, Mr. Mayor. I'd also like to invite our police chief up. The point in time count numbers did come out and reported 215 unsheltered individuals in orange. However, the police department's daily field experience suggests otherwise. And Chief Jevik can expand on that.

Good evening, Mayor, members of City Council. As you know, the point in time for 2026 was recently released, showing that Orange had 215 unsheltered individuals. This count occurred January 28th, 2026, and Orange Police Department officers escorted the point in time volunteers. The locations that they visited throughout Orange were provided by our own heart team and bike team sergeant, whom you met a few minutes ago. It included all of our parks, the train depot, and major corridors like Tustin and Lincoln, Tustin and Cotella. During this count, our officers estimated there were less than 40 unsheltered individuals who were contacted by the point in time counters. Our homeless outreach worker is in contact with the county and outreach grid to get names of individuals contacted over the past year that would qualify as Orange residents. And so just to clarify, the point in time is exactly what it says. It's a number in time. However, it's not associated with names. And we believe that number, as the city manager said, is closer to 110. This is based on experiences, our daily observations, and contacts that estimate this unsheltered population to be approximately 90 to 110 individuals. And largely, this is based on decreases we're experiencing in contacts, calls for service, arrests, and encampments we're removing. The Hub OC reported a 35% decrease in numbers of people that they have served in the past year. And meanwhile, our sheltering has remained the same at 200 over the past two years. We believe that anything in the 215 range would show a drastic increase in our calls for service, contacts, and arrests. And we're just not seeing those increases associated with that number.

Thank you, Chief. Bottom line is we're not the only city that disagrees with the point in time count. And I believe the city of Newport Beach is spearheading a letter and asking other cities to sign it, questioning the methodology of the point in time count and why the numbers don't seem to add up. And this is not the first time. At any rate, I said that I would sign on to that and ask that, you know, for a little bit more, how should I say it, information on how the numbers are put together, basically. So anyway, I just wanted to make the council aware of that. Council Member Barrios?

Yeah, thank you, Chief. I agree that the numbers, you know, there's a lot of people complaining about the numbers. However, that hasn't changed. And I was going to bring this up under council comments, but this seems more apropos for the conversation in terms of a lot of my merchants in the downtown area around the plaza are complaining a lot about the increase in homelessness in the immediate vicinity. So I was going to ask if there could be maybe a report following up on that because I saw something for the first time that I've never seen before and that was a tent popped right up next to Gabby's and that just cannot happen. It just was... flabbergasting, but I have people complaining about transients peeing in front of their store, defecating in front of their store, passed out in front of their stores. So there just seems in the last 30 to 60 days to seem to be this kind of growth right in the plaza district around businesses. So if there's something... Driving that or more information you could provide I would appreciate and it could be at an upcoming council meeting or it could be privately You know either way I cannot even It's been a lot of complaints just all of a sudden well, and I think just to address that I know we through social media There's been a lot of information misinformation about some of the homeless issues in the plaza we have had to answer several of those questions and when we have done a

I'll say a dive into calls for service, any sort of information the police department has received. Obviously, I'm aware of the tent that was a call for service. However, when we've ran our calls and when we've ran just an overall awareness, what social media is telling you and then some of the other instances we're not matching with calls and so prior to just to set the stage we need people to call us so that we can be aware of it we can address it immediately and like anything else that we get we're going to get on it as soon as we can and hopefully put a solve to that problem but if we don't know about it then we can't be aware of it and i think Some of the social media we have seen has just really been exaggerated for what it is. When you compare it to calls for service, it doesn't mean it's not happening, but it means we're not aware of it. So please call. Right.

And I bring up the tent incident only because I saw that with my own eyes. So I try not to be hysterical about those things. Yes. It sounds to me like what you're suggesting is that maybe a little bit more education needs to take place with our businesses, that they shouldn't just walk past it or get angry about it. They should call.

Yes, please.

Okay, thank you.

Council Member Dimitriou. I'm going to dovetail on the same thing. El Camino's had quite the pickup of folks deciding to camp overnight and such. And I know we have some rules that we're not able to really enforce during the daytime, but I think when there's obvious camping, we can. Towards reporting, we have some staff out there in the mornings that are doing cleaning and such that are hopping over some of the folks that are sleeping in the park. that they should be also reporting it and getting to the mayor. I agree wholeheartedly with challenging the numbers. I would agree with the police chief that they're lower than what's being presented. And it's not just the city of Newport Beach at this point. It's like, I think it's like 12 or 13 cities now that have said that something's wrong. And I do recall there was something that came out at the last one where they They did some double counting, and I don't know if that's the case this time, but at least we can ask for maybe some actual data and really look at it and make sure we're not double counting or what have you. So thank you.

And I'll just add that if you ever see anything that is inappropriate behavior, whether it be panhandling at the freeway off ramps, whether it be urinating or defecating in public, sleeping on the sidewalks, camping, anything like that, the police department wants you to call them and call the business line. It's 714-744-7444. Everything I say accurate, Chief?

Yes.

Okay, thank you very much. All right, reports from council members. Councilman Mayor Pro Tem Bilodeau.

I just wanted to remind everybody that one week from tonight is election day. We actually have two polling locations already open if you wanna go vote now. One's at the main library and one's at the El Medina Branch Library. They're open daily from 10 AM to 6 PM. And also, we have the drop-off boxes at those locations, as well as at the Taft Branch Library. So you can securely vote and drop your mail-in ballot in a box there. And that way, you avoid the lines on election day. Thanks. Thank you.

Can I piggyback on what Mayor Pro Tem is saying? Yes. Yes, I dropped off my ballot on Monday. They were open on the holiday. COMPLETELY THERE AT THE ELMDIEN LIBRARY. AND I HAD MADE A LITTLE MISTAKE, AND SO THEY'RE LIKE, OH, YEAH, YOU KNOW, YOU CAN JUST TAKE YOUR BALLOT AND SCAN IT IN THE MACHINE NOW. I HAD NO IDEA. THAT'S HOW LONG IT'S BEEN THAT I'VE BEEN VOTING BY MAIL. BUT, YES, THEY ARE THERE TO HELP YOU, VERY HELPFUL. THEY HAVE AN ARRAY, A VARIETY OF WAYS THAT YOU CAN VOTE. YOU CAN BRING YOUR BALLOT, ALREADY FILLED OUT FROM HOME, AND BRING IT IN THERE. IF YOU DON'T WANT TO DROP IT IN THE BOX, They have the machines there that you just scan your ballot and you get like your little receipt of that. You scanned it right there on the spot, which was completely news to me. And you could always drop it off or drop it off in the drop boxes as well. So very helpful individuals and just an array of ways of voting. So thank you for reminding everybody.

Good information. Any other council members? All right, item six, any AB 1234 reports? Any council members? Okay. Then moving on to item number seven, appointments to boards, committees, and commissions. Fortunately, we have a very qualified applicant for the audit advisory committee, which if approved would bring us to one vacancy on that. The applicant is Robert Paul. Robert was reviewed by our city finance director, Trang, as well as he was also interviewed by the current chair of the audit committee, which is Brian Wiltrink, who just took over for Carolyn Kovechi. We see Robert in the back row. Robert, if you stand, just let us know who you are. All right. Thank you. Thanks for coming tonight, too, by the way. Anyway, Robert's a longtime Orange resident and would be very good on the audit committee. So we have a motion from Council Member Gutierrez and a second from Council Member Barrios to approve. Please vote. Approved unanimously. Congratulations, Robert. Reports from city manager. Nothing tonight, sir. All right. Okay, we'll move on to our public hearings. First public hearing is to consider an amendment to the city's master fee schedule, establishing an annual fee and fines for the vacant property registration program for unoccupied and abandoned properties. And staff has actually asked that we continue this item. I will entertain a motion to do so. Motion from Councilmember Demetru, second by Mayor Pro Tembilito. Any questions? Yes, Councilmember Gutierrez.

I'm just curious as to why it's on the agenda.

I think you may be confusing it with another item.

No. Our community development director can likely speak to it. But when we brought it last meeting, it was about the vacant property tax ordinance as one of the revenue measures. Think of this time, and you'll see it. We use the word vacant, unfortunately. It's more code enforcement tailored in how we deal with some public nuisance properties. Why it was on the agenda tonight is prior to the discussion at the last meeting, we had to advertise it in the paper. Paper ran, said it would be at this meeting. So we're holding it tonight. The items are going to be continued. And then we'll provide you with the presentation at a future meeting and receive your direction. If you shut it down, great, no problem at all. But I think you're going to like what we have in store for you. Good question.

OK, please vote. This is, again, a motion to continue this item. Approved unanimously. All right, next is 9.2, a public hearing to consider a proposal to redevelop a commercial property with 71.3 Story single family small lot homes at 2375 North Tustin Street. The introduction and first reading of ordinance number 06-26, approving zone change number ZC25-0002 and adoption of mitigating negative declaration number ENV25-0001 and associated mitigation monitoring and reporting program. And I will ask staff for a report.

Good evening, Mayor and members of the City Council. My name is Monique Schwartz, Principal Planner in the Community Development Department. The project is a proposal to redevelop an existing vacant commercial site located at 2375 North Tustin Street, utilizing the city's small subdivision ordinance and guidelines. The request includes general plan amendment to amend the general plan designation from general commercial to medium density residential, a zone change to amend the zoning from limited business Tustin redevelopment project area to residential multiple family. tentative track map for the small lot subdivision, major site plan review, and administrative design review. The 4.23-acre site would allow for 71 three-story attached and detached single-family homes with two-car garages, private open space, and guest parking. A common open space area with amenities is provided central to the development. Vehicle access is provided from Tustin Street that connects to a looped interior roadway. Pedestrian walkways and landscaping is provided throughout the development. The project complies with the Orange Municipal Code and the city's small lot subdivision development standards. No reduction to development standards were requested. The project was reviewed by the Planning Commission on April 6, 2026. The Planning Commission recommended approval of the project to the city council by a 4-2 vote with added conditions as follows. The applicant shall work with staff to modify second and third story north and south facing windows to minimize potential privacy impacts to adjacent neighbors. And the applicant shall provide sight line views from the nearest roof decks onto adjacent communities to the north and south. The applicant has since implemented the recommended conditions by incorporating the following changes to the project plans. Frosted glass added to the rear third story bedroom windows for lots 11 through 20 and 54 through 59. Window sizes were revised to clear story windows on second story rear elevations for all perimeter units to eliminate any downward views onto adjacent neighborhoods. And line of sight details were added to show the views from the adjusted windows and roof decks. An initial study mitigated negative declaration was prepared for the project and is included in your packet for consideration. The MND was circulated for public review. Comments received and responses are included within the final MND. All potential impacts have been mitigated to less than significant. Staff recommends that the city council adopt resolution number 11685, adopting the environmental document and approving general plan amendment, the tentative track map, major site plan review, and administrative design review applications, and introduce and approve ordinance number 06-26, approving the zone change application. That concludes my presentation, and staff and the applicant are available to answer any questions. Thank you.

Thank you, Monique. Any questions of staff? Mayor Pro Tem Bilodeau? Okay. All right, and at this time, I open the public hearing. And it looks like we have four speakers. First speaker is Reggie Mundekes, followed by Cynthia Hesketh.

Hi, I'm . I support this project. We can't let unused property just sit there and be vacant for years going into decades. It's not healthy for our community. And I do have one question. There's been a lot of chatter and claims made that the only fire truck access is this gate at the rear of the property where the fire truck comes in from the adjacent property. I looked at the plans, it looks to me like that's an additional gate for fire access in addition to a fire truck actually coming in from Tustin Avenue. So let me know if I'm wrong on that, thanks.

Thank you, Reggie. I'm sorry, Council Member Tavares, did you have a question? I'll wait out. Okay. Next speaker is Cynthia Hesketh, followed by Jordan Clark.

Good evening, Mayor Slater and City Council members. My name is Cynthia Hesketh. I live at Coco Palms and serve as Board President of our Homeowners Association. We are on the southern border of the proposed project at 2375 North Tustin Street. To be clear, we support housing. We support thoughtful development. Tonight we are asking... that the Malia Homes proposed project follow the city's own guidelines for small lot subdivisions and respect the neighborhoods that already exist. Our concerns. First, height and scale. Right now, the proposal places 71 three-story homes directly next to multiple one-story communities. A three-story structure next to a single-story home is not compatible without a transition. Second, privacy. Upper level windows and outdoor spaces will look directly onto existing homes and patios. This is what is known as overlooking. According to NAR and the National Association of Home Builders, market data and appraisal standards show that loss of privacy from overlooking can reduce how buyers value a home. This can have a direct impact on property values for the people who already live here. So what are we asking for? Not to stop the project. We are asking for the opportunity to thrive along with it. We are asking for reasonable adjustments that align with the city's own standards, a clear edge transition, two story boundaries or meaningful third story setbacks, privacy protections, fixed and obscured windows and no roof decks overlooking existing homes, a landscape buffer that provides year-round screening, and traffic mitigation that considers the shift in pattern, including post-occupancy, traffic monitoring, signal adjustments, and thoughtful design at the entry points. We are asking you to stand up for standards. These families have built their lives in this community. Without a sensitive edge transition, our homes risk being impacted by perceived obsolescence. And I want to gently address the sentiment that was shared in a prior meeting that it could be worse. Respectfully, that is not the standard. The standard is compatibility and thoughtful planning. The standard is using the guidelines this city has already put in place to ensure projects fit where they are built. We're asking for balance.

Thank you. Thank you, Cynthia. Next is Jordan Clark, followed by Dan Baldwin.

Thank you for having me. My name is Jordan Clark, and I live at Cocoa Palms. I've lived here most of my life. So I know that we just had a little briefing about the flock cameras. For those who are, I urge you to imagine one pointing right into your bedroom or even bathroom, two bathrooms actually, because that's what I'm living right now. I'm concerned that this development will take away any privacy that I have left in this world and that my lifestyle at home will be watched. The plan through store units directly overlooked my home and my neighbors. The windows overlook, like I said, my bedroom and two bathrooms. When we expressed our concerns about privacy to Mr. Brown, he offered the wonderful solution of buying us curtains or tainting the windows so that we could prevent any onlookers watching in our cameras. They will also have a clear view of the walkway and common areas from our homes to our garages. And I and many of our neighbors use our garage daily. If these are built as planned, the only expectation of privacy will be that we do not open our garages, windows, or houses at all. Mr. Brown essentially dismissed these concerns. He commented that currently, cars and people pass by, parking, and though that may be true, We know when, sorry, we don't know if a crossway, if someone could be watching full time or even setting up their own kind of camera to have their own desires. But it is different because when a car passes by, I know that they're, I can see, I can watch them come and go. I cannot do that, especially with three story bedroom, or sorry, three story buildings. This is unacceptable. I should not have to keep my curtains or windows closed all the time. We should be able to use our spaces freely and without fear that we are being watched. I'm also concerned about the crunch trees in that property that do provide a little bit privacy. They have been adamant to remove them. As a young woman, I would like to have peace of mind and reasonable expectation of not being observed coming to or leaving my home, and as well as being in my own home. I would like to know that my neighborhood children can play in their front yards without watchful eyes of the next-door neighbors observing. I appreciate your time and consideration and questions.

Thank you, Jordan. Following Dan Baldwin is Lisa Ackerman Baldwin.

My name is Daniel Baldwin. I'm the owner of the unit in the community of Cocoa Palms. I've lived in Orange since 1976, and I've owned several homes here. I'm concerned with this proposed development in the Best Buy property. I understand the desire to build housing, and I'm in favor of housing, provided it's in compliance with the ordinance for small lot subdivision guidelines established in 2019. These set guidelines for size, shape, to match the surrounding neighborhood. Per the ordinance for small lot guidance, guidelines, the small lot subdivision development located within single story overlay district is also subject to the development standards of the overlay. Therefore, the height of the buildings within the single story overlay district shall be limited to one story or 20 feet. This is a quote. Whichever is less, this project doesn't allow for that at all. Cocoa Palms community is zone restricted to single level homes, as is the community to the north of the property of Best Buy, Park 72. The same applies to the mobile home park to the east of Cocoa Palms. We enjoy the privacy that comes with single level living. I looked at the plan today and I saw that not all of the units to the north and south had been frosted windows. This is disturbing as it doesn't show an intent of full compliance with our request. Nine units are not frosted to the north side and six are not frosted to the south. As you know, we've asked the units in the north and south lanes to be limited to two stories in height and to be given a green belt of trees to break up the view. In short, I beg you to listen to our concerns and reject this project as it stands. Thank you.

Thank you, Dan. Following Lisa is Adrienne Gladson.

Good evening, Mayor and members of the City Council.

I also want to thank those members that were able to meet with us. I know that everyone's busy and some of you were able to meet with us, and I appreciate that. My name is Lisa Baldwin. I've owned condominium for over 30 years in Cocoa Palms. Before you tonight is a rather ambitious project that seeks to change zoning of needed retail opportunities and forever alter the character of the one-story neighborhood that I bought into, as well as our neighbors at Park 72 and the Orange Mobile Home Park. I called them today to ask how many people residents or how many homes are in that development? There's 179. The proposed development does not conform to Orange's small lot subdivision as was said earlier. The city's guidelines state that buildings within a small lot subdivision should respect adjacent buildings by responding to their scale, massing, and need for light, natural ventilation, and views. It further states that they should design small homes to be similar in scale and to have similar forms and shapes, as has been mentioned. This was recently somewhat mitigated by the viewpoint development on Cotella and Cambridge. They lowered the height to two levels on the homes that were adjacent to the Carleton neighborhood. And we're asking Malia to do the same. Additionally, there are no plantings being proposed to be maintained by the hopeful homeowners of the new development to soften the view. Malia is suggesting that plantings at the end of sidewalks that end at the common wall And I observed their development off of Brookhurst and the answer there was to put in these spindly little cypress trees. Likely similar plantings would be put in this new development, which would not soften the view at all. Also, in spite of the traffic study, there will be additional drivers that will be coming and going at the same time that our residents will, along with the B of A traffic that will soon start with that project that has been passed. This project will negatively impact the quality of life for all of our residents who would have to be subjected to this towering three level development and thus the marketability for selling or renting a condo in our complex will be negatively impacted. So thank you so much for listening tonight. I really hope that also you find out whether Malia has the agreement with the Park 72 people to see if they have that rare fire access. Thank you.

Thank you, Lisa and Adrian Gladstone.

Mayor and members of the Council, it's an honor to be in front of you this evening. I have reflected back on a project in 2017 and 18 now called Orchard Rock that came forward to the previous Planning Commission and City Council on a similar issue. A group of neighbors that had organized to fight for the one-story development that they lived in. It also was an R3A overlay zone off of Hughes and Villalarco. And those neighbors were originally told, you've got to live with the fact that there's two stories coming. And they fought, and they essentially won. That's Bond at the United Neighborhoods of Orange Group that is essentially helping neighborhoods participate to have an equal footing so their concerns can be heard in front of city council. Development stuff and development process is very complicated. How do you speak in front of you? How do you not feel scared? How do you present your argument rationally? How do you present all the things that you need to look at? We gave you a lot of information, and Lisa said that we met with you. We are pleased in that. There is a bit of incongruency with compliance with the small lot subdivision standards. I am a bit puzzled why that is being recommended for approval when it clearly does not. We've highlighted the orange areas of the guidelines where it does not meet those requirements. There's too many loose ends with this project. I think it needs that those answers looped in. I know it was raised by Ms. Mundicus on the access for Park 72. But these little details, in all due respect, because I've worked for the city side of stuff and the private side when I retired, you want these things to be buttoned up before it's in front of city council. We want these issues handled. Our staff is very busy. Our staff has a lot of things to take care of and you can only point to code and let applicants see what they need to comply with for so long and the project moves forward even if an applicant doesn't want to do them. It is really concerning to me that we're in this position. You will have to wrestle with the land use question. I've sent you a letter in my comments. I'm not obviously reading them. That is where you need to start. and wrestle with that, but the neighbors have basically said, if you move forward and change the land use to residential, deal with the compatibility, deal with the kindness and the fairness that Viewpoint got, and also Fletcher.

Thank you, Adrienne. I'm going to close the public hearing. Oh, additional cards? I do.

I'm sorry, Mayor. We have one more speaker.

One more? Okay. Kathleen.

Thank you so much. I really do appreciate you hearing me. I appreciate all of you that were able to meet with us as homeowners. I am a current homeowner in Cocoa Palms at 2295 North Tustin in Orange, and I have lived there for over 35 years. I also work in the City of Orange, which I have worked in for over 30 years. As a homeowner, I'm directly impacted by this development. The proposed homes have windows with a direct view into two bathroom and one bedroom window of my home. When I addressed this concern to Mr. Brown, his solution was that he could potentially provide window treatments for the bedroom. I don't feel this is an acceptable solution. I should not have to adjust my expectation of privacy and use of my property so that the new owners can have their view. Is it unreasonable to ask that the neighboring community respect our privacy and homes that are built are not overbearing and infringing upon our privacy? We should be able to use our common areas and garages without multiple homeowners watching from their windows. Limiting the homes neighboring our community to two stories, moving the south-facing egress windows to the east and west sides, frosting all of the south-north-facing non-egress windows would provide us with a request to consideration for privacy. We would also like the current trees that provide shade and privacy to be replaced once any homes are constructed. Mr. Brown indicated that this was not in the plan, nor would it be considered. As a resident of Orange, I question if this development is consistent with the long-term vision of Orange. The city has always been sensitive to our residents, and most of the time has allowed thoughtful, purposeful developments and construction that fits within our existing buildings and homes. keeping with our current guidelines for small lots of divisions would require limiting these homes to two stories and would provide reasonable setbacks from the existing events perfect examples of this was mentioned before on the viewpoint on catella and the fletcher developments this development is to adhere to these guidelines essentially it is a put as many units as high as possible plan if allowed this will become the new standard for orange buildings of homes. Your decision today will not only impact my neighborhood, but others across the city. Using this as the standard, developers will look for any space, no matter how small, to build. There's a significant project in the works to redesign the village property and Tustin Street from Meats to Heim. We have an opportunity here to create an area worthy of our city in the same manner as the plaza is currently. We want to think ahead and have the right plan that sets Orange up to be the destination for families to live, work, and spend their money in Orange. I love our community, the community feel. Oh, sorry. I'll wrap it up. I appreciate your time and consideration.

Thank you, Kathleen. Okay, now I'm gonna close the public hearing and bring it back for council discussion and questions. I also want to ask the applicant if they would like to speak or answer any of the questions as well, if you feel you'd like to do that. Which would you like first? I think you should go ahead.

Thank you, Mayor Slater, members. of the City Council. My name is Chad Brown, Vice President of Planning and Development with Malia Homes. And I have a full presentation that I could deliver to you. We have a PowerPoint presentation. I'm going to ask to freeze it on the first frame for now because I would like to, I guess, address and directly address some of the questions and comments that have come forward. So Molina Homes is a private home builder. We've been operating within Orange County and outlying areas for about 16 years, and I've been with this company for 16 years. I spent a lot of time early in my career as a public planner for the city of Laguna Niguel in the county of Orange. So one of the first things that we take upon when we design a project is trying to look upon the surroundings and try to factor in designs that can help minimize some of these privacy issues that we're hearing about. In our project, and I'm not going to go through this. I have slides that I'll refer to if there's specific questions. But in this project, we eliminated having roof decks available to any of the perimeter lots. We've only located where in here there's 35 locations. on the interior of the circulatory loop, on the inside of our project where we've introduced roof decks. All of the exterior units have a three and 12 full pitched roof with the eaves at 30 feet and the third floor windows are at 24 feet off the ground. Those third floor windows, as a result of the Planning Commission hearing and direction in working with staff, were limited to frosted windows only on the third level. And they serve as egress windows for fire emergency service for ingress-egress during life-saving actions. Further, we took the second story windows on the rear elevations facing north and south, and we raised those sill heights to five feet above finished floor. So for me, that's going to fall right here on my eye line. I'm not going to be able to look downward from those even second floors. And the view lines that are in your plan package and so forth demonstrate that, that the views would be going over the top of the adjacent homes and their driveways and parking stalls and garages. We recognized and we made those changes as a result of concerns and direction of the Planning Commission. And that's what the project application and project plans have been revised to reflect that before you tonight. Our project design complies with the small lot ordinance that the city has adopted. That's not me saying this. That's not Malia Holmes saying this. That's your staff saying this. This has spent over a year evaluating, making modifications, making comments on our plans as they've gone back in, back out, back in, and back out to us for our final submittal. Finally, I'd like to mention on the outreach side of things is I mailed letters to over 76 adjacent property owners immediately adjacent to our site in January of this year. We weren't at hearing until April 6th of this year for a planning commission hearing. Of the 76 letters that were mailed out to all the adjacent property owners within immediately adjacent to us, I received zero responses to my introduction and project description letter asking for them to reach out and come to me so that we can discuss any concerns or issues with the design of the project. Again, there was zero response to those initial letters. We met initially with Coco Palms the week before the planning commission meeting where it was made available to me to come and introduce our project and share with them. It was at that time that I met Kathleen for the first time, Cynthia for the first time, as well as others. And we did have those discussions about the windows. I felt in offering that for blinds or something inside their personal residence would be something that would be fully under their control as opposed to outside the control. I didn't recognize that this was going to be such a large issue for them because their windows, which are the only windows exposed along the south side of our proposed project in the adjacent development, are separated by 60 feet from our proposed home and are interseeded with a dry vial parking stalls and another set of perpendicular parking stalls that park directly in front of the windows. So I appreciate their concern. I feel that this project has made modifications to our design to continue to protect their privacy through the frosted windows and the elevated sills on the second level for all of them. And again, we do have landscape pockets in between the seven duplex buildings that do face south that eventually will grow and provide a canopy of green in between the units that will somewhat intercede that. This project is very much different than that of the Cotella site in that the adjacent property owners that were before you about a year ago at this time, they were concerned with their own private backyard areas that were directly adjacent to it, not separated by a common driveway or others. The The one slide, or perhaps you've looked at your package with one of the attachments, there was a fiscal impact analysis done for this as specifically regarding the zone change from commercial to a residential use. And this particular study was prepared by Stanley Hoffman and Associates. It was peer reviewed by your city staff. as well as your city's consultant, Cosmont Associates, who reviewed the fiscal analysis done. And this study seems to show that the change in use from this would generate approximately $183,000 annually in revenue, property tax revenue, vehicle license revenue, and additional sales tax revenue from businesses being utilized by the new residents brought into the city. And that's specifically compared to Potential reuses of the existing shell building of the Best Buy that remains today that has been vacant for over three years now. And that building was potentially has been contact, excuse me, potential tenants have contacted the owner for use of that building that includes somewhat of a UFC fighting gym, generates very little sales tax revenue for the city. A Savers Mark or a discount retailer store has reached out and wanted to come to that. And that would generate less sales tax revenue, approximately $60,000 a year compared to the 183 gross that's coming. The third was a seasonal spirit, Halloween, and the seasonal stores that come in. And again, that's a much less use. So I do think the fiscal aspects and the fiscal impact of this reuse or rezone would have to the city is a positive use. We have members of our team here that are more versed to speak on that. The last comment that I have was a comment made, and that is regarding the single story overlay. The current Best Buy site does not have or not contain that single story overlay on it. So we're not asking to drop that from the site. We're simply asking it to change to the R3 zoning designation with subject to the small lot subdivision ordinance standards, of which we are 100% compliant with the standard development standards of the small lot ordinance. So with this tonight, if you have any questions, I'm happy to roll through additional areas of the project. Details, I have a lot of details. I don't know how much time you want, but I've got all the time in the world to answer any questions you have. And I do ask for your approval tonight. So thank you very much.

Thank you, Brad. That was very thorough. There was a question about ingress and egress, if you recall.

For the fire department?

Yes.

Yes, the fire department, the egress out the secondary gate towards the Park 72 homeowners area is a secondary access. Primary access is obviously coming from Tustin Street direct.

Great, thank you. So please stand by. Well, I'll just ask initially, Council Member Talalares, is your question of the applicant or staff? Both. Go ahead.

Thank you. Thank you for being here, and thank you for your interest in Orange. I notice that they're building, obviously, a Bank of America on the face side of Tustin. Is that also your property? Will you guys be the land owner of that?

No, Council Member. That is a separate ownership by the existing owner that currently owns Tustin. the Bank of America property as well as the seller of the property of the subdivided portion of the Best Buy site that we would be purchasing if this entitlement were to go through.

So completely different ownership, completely different?

Yes.

You'll have no, you and or homeowners potentially would have no business with Bank of America unless they bank there, right?

I can't, I won't say that any future residents won't bank there, no.

Okay, so they made that decision on who's going to take that parcel, right?

Correct.

Okay. You said that it's going to bring in $183,000 of property taxes?

Property tax revenues, yes, annually.

But isn't that to the county or is that to the city?

No, that's the city's particular share.

That's the city's particular, okay. Yes. As you're probably aware, we're working on three different property owners across the street at what is now the former mall. In your studies, when you decided to... GO FORWARD WITH THIS PROJECT. DID THAT HAVE ANY IMPACT ON WHAT YOU WERE DOING OR WHAT YOU WANTED TO PROPOSE THERE? CONSIDERING THAT HOPEFULLY NORTH TUSTON STREET WILL BE CHANGING THE LOOK AND FEEL OF IT PRETTY SOON. I know that before Best Buy, there was a bowling alley there. Obviously, if you grew up here, we all know that. Did that have any impact on how you saw it? Or did you just see there was a vacant lot there, and I think housing would look good there? I'm just wondering what attracted you and Malia Homes to that property.

So the attraction to the particular property is that the site has been underutilized for a number of years, that there's a possibility of bringing home ownership into the area with new homes. And once we dug into some of our due diligence research and saw that there is some potential and the city is looking at the investment into the mall property, and changing it, there's the feeling that there is a bit of the tip of the spear aspects for us to be able to come in and help change and improve, overall improve investment into the area of the city in that area.

May I ask, have you, even before, if you were with another company before Malia Homes, have you done business with the City of Orange before?

We have not. And if you don't mind me saying it, and please don't take this the wrong way, but a lot of us in the development community, it's relatively a small world. It takes a very large incentive from the standpoint of a worthwhile opportunity and a worthwhile project to want to engage in what has been the City of Orange process for residential development. From the development side, it's rather discouraging because of the time frames, the scrutiny that has been laid upon it, and it's not just our thoughts. These are things that are coming from others. I know that in some of my meetings with you I've mentioned that and And I think that this council is recognizing that and would like to make some changes to try to enhance the ability of new housing development and new development occurring in the city, both commercial and residential.

Well, we appreciate that. And I mean, whichever way this goes, I hope you continue to give us advice, good or bad, on how to continue to... be able to say that we're open for business. I appreciate that very much.

I would be happy to, but I will only be here if it goes one way.

Understood. And let's see. I think I had my last question for you before I have another question for staff is it is zoned commercial, and you're asking for a zone change.

that would just be for obviously the property that your company would own correct it's you're asking for his own change for that just that's just for that specific parcel that and it's rather it's a flag lot in in planning speak because of the tail of that area that is the public right-of-way or the the public way out to the public right-of-way makes up the driveway area of the lot.

I'm sure Mayor Pro Tem Bilodeau has other issues regarding his residence in his district. If you don't mind, Chief Jevick, I have a couple questions for you. Thank you. Chief, Being in the next district over from Mr. Villadoy, we share a lot of the same experiences. Best Buy came in. I thought it did a good job in keeping everything clean there, et cetera. Since it's closed and it's been vacant, have there been any incidents, arrest reports from the police department?

So good evening, Mayor and members of City Council. In preparation for this report, we ran the address of 2375 North Tustin. Our best estimate was that it closed about two years ago. And the last reported crime was in January of 2024. So that's about two and a half years. That was a reported commercial burglary. We went back six years to 2020. There was 24 reported crimes which are all theft related and consistent with what Best Buy used to be, shoplifting, grand theft, and petty theft. Assuming that it was about two years ago, we have not had any crime reported as it being vacant and in its current state.

Okay, thank you very much. Raphael's here, our code enforcement office director. Raphael, same question in terms of code enforcement. Since Best Buy has closed, have there been any code enforcement violations on that site?

Good evening, Mayor, City Council. So to answer your question, since the site became vacant, we did have a number of illegal sidewalk vendors as well as food trucks operating from the site. And we were monitoring the site in general just for nuisances related to graffiti and other discarded items. But I have a report that the operator or the property owner was being diligent and responsiveness to those issues.

Oh, thank you very much. Okay, thank you. That's all I have right now. Mayor, thank you so much.

Okay, Mayor Pro Tem Bilodeau.

Thank you. I actually have some questions for Mr. Brown, please. And before I ask, I want the public to know that two years ago I met with the owner of the site, Burnham Ward USA, that brought the Best Buy to the city. Unfortunately, Best Buy kind of ran its course after 10 years and decided to close as they have another site in the west side of Orange on Chapman Avenue. I think unfortunately we're a victim of the retail environment and that we all go online now for convenience. I did tell them that I would not entertain any rezone unless I saw a good faith effort on their part to release the site. And as you can see, it's 45,000 square feet available. I see it every day when I drive out of my neighborhood. And they did advertise it online. I looked. I've looked continuously. And I'm satisfied that they used good faith efforts to try to release the site as a commercial operation. I know that at one point, Tesla was looking at the site, but they ended up locating up at the closed Festival Plaza up on Imperial and La Palma, unfortunately. But it was gonna be a car maintenance site, not a retail operation. Mr. Brown, question. I'm looking at your landscape plan. And in terms of the trees you're proposing on the perimeter, the evergreen flowering trees, it looks like they are 24 inch box is the size. I would like to see those upsized because I, I don't like it when, you know, the initial trees put in are kind of small and we're all kind of just waiting. Can you fit larger box size trees in those locations?

Mayor Potem, are you referring to the trees that are at the end of the walkways between the duplex units that are directly adjacent to the south and the north boundaries of the property?

Yeah, because I'm concerned about the screening of the neighbors that has been expressed. Right.

Yes, there is. There is ample room there to upsize those trees. They're currently on the landscape plan, currently sized at approximately 15 gallon size, so we could either go to a 24 inch box or a 36 inch box tree to replace them with. I will offer that a 24 inch box has been proven to adapt and take root faster than the larger tree being placed in it, but I'll let.

I just think initially having a larger, more mature tree there would be preferable, I think, for all parties. Another question, in terms of the garages, Is there going to be something in the CC&Rs that require that people be able to park two cars in their garage as opposed to personal belongings?

Yes.

Yes, your staff has been very diligent on that. Included in the conditions of approval include a CC&R requirement and oversight for the parking of two vehicles in each of the garages and not to be used for storage and not parking in vehicles.

Okay. That's great news. In terms of the secondary fire access through Park 72, has that been resolved yet or are you still in negotiations with the adjacent property owner?

It's not necessarily negotiations. We've been told by their legal counsel that they hold all the documentation right now for their review, including an easement that has been prepared by the city that is waiting for this entitlement to be decided one way or the other. We've been told verbally that they don't have any objections to it. They are asking for a dog park. in exchange for access through their site. We're discussing that. We would prefer to provide them an in lieu funding for that dog park as opposed to us constructing that dog park on their property.

Okay. I'll turn to staff to understand. So is this approval conditioned upon getting that fire access?

Yes it is.

Okay. That's all I need to know. And then lastly, I did visit the site over the weekend. I met with the clerks and some other parties. I do understand their concerns about their privacy. They really have the one unit that is uniquely affected, obviously, because they have the end unit. There is a 50 foot wide drive aisle in addition to the 10 foot setback for the homes. I do appreciate the frost of the windows and in thinking it through, I think if you're living on the third floor, I can't imagine you're going to keep that window open at night because you are adjacent to the 55 freeway. So I don't know what the sound level is going to be at that height. I know that we have a sound level ordinance. It's 65 exterior, 45 interior. And I'm sure you're compliant with that. But So on the record, though, you will provide them an allowance to do whatever they want to do in terms of enhancing their privacy, whether it be a tinted window, a window covering, an exterior awning that would block the line of sight, or whatever it might be, correct?

Are you speaking of off-site for the speaker that we heard of? Yes. Ms. Clark? Yes. Yes, we would still do that even though we have frosted our windows and so forth.

Okay, because I think that's very important. I am sensitive to their concerns. I know when looking at the unit, you could walk right up to those windows. So I can't imagine that they necessarily leave the blinds open during the day because of that. But nevertheless, I think their concerns are valid and they are important and I wanna make sure that that is addressed. That's all the questions. Oh, in terms of fees, just to put it into the record, I believe you're paying about 1.5 million to the city to cover the park, police, fire and library fees. And in addition, you're paying the school district about $700,000.

That's correct. That's your standard. It's not anything applicable specifically to this project. Those are your standard development impact fees on a per unit basis. So for the 71 units, yes, it totals up to about $1.56 million that would be paid to the city for park, police, fire, and library fees, in addition to the school district.

Okay. That's all the questions I have for you. I just have a couple for staff. Regarding the R3 zoning, now, is that tied to this project? What I'm asking is if we grant this zoning, could they say, oh, we changed our mind. We want to put in a six-story apartment building. How does that kind of work together? We still have discretion, right, down the road if somebody changed their mind. I can't imagine that. I'm sure they've spent seven figures on bringing this project you know, here tonight. But I just wanted to understand how that works.

You're correct, yes. This approval is tied to this project and you also are approving a track map to go with it.

Okay. And then can you, you know, there's been some statements made that this does not comply with our small lot subdivision ordinance. Can you clarify that at all? Like what's the rub here? What are we missing?

The project is compliant with the ordinance.

Okay. Mr. Mayor, that is all the questions I have for now. Thank you.

Very well. Council Member Dimitriou.

Thank you, Mayor. Oddly enough, Mr. Villanova and I have served a long time together, so he's asked a lot of the questions he knows I'm going to ask, which is fine. It helps speed things along. Quick question for staff. The applicant had made mention that there was a fiscal study sales tax versus property tax and staff reviewed it and Can I get the staff? Opinion of what was done and if it's accurate and complete and

Sure. Good evening, mayor and council members. The applicant team hired a financial consultant to provide an assessment of the site to compare the potential income for the city, comparing the existing building that's there now and the proposed project. Their team provided it to the city. Staff reviewed it with our own financial consultant. And we support the document that's been provided to you this evening.

So it shows that the numbers that our person came up with is similar or exact to what their numbers came up with? That's right. So we're seeing that revenue? That's right. And did we look, you know, from your side of things at the commercial development? Because the last thing I want to do is give up commercial space right now. It's a tough pull. So did we look ourselves and invest or investigate whether or not the property was truly being advertised significantly through all means and ways. Did we bring any potential occupants?

So two different questions I think is what you're asking is one, did the assessment look at those types of options in the assessment, analyze the types, and the applicant team summarized earlier the types of tenants that were available for this type of building or the types of tenants that would be interested in this type of building. The ownership group, and they're here tonight, and they could probably give you a better idea of the search they did to try to find a tenant. I know I personally tried to help him secure a tenant that Mayor Pro Tem Bildo mentioned this evening, I wrote multiple letters and emails to other companies trying to incentivize them to come and was on multiple Zoom calls trying to get them to come and unfortunately we were unsuccessful in that effort. But if you have questions about the outreach that the property ownership did over the last three years, I know they at one time provided me a list of potential tenants that they've contacted or tried to contact or big box retailers that were in business several years ago that are no longer in business. So that's kind of the shortcoming of that site.

I think that answers my question well enough. The... Was there... Was there a traffic, and I didn't catch it in the paperwork, but was there a traffic analysis done per trips for the prior, ah there he is, didn't even see you sitting there, for the prior usage compared to the proposed usage?

Yes, there was a trip generation analysis that was done and so the proposed use actually represents far fewer trips on a daily basis than the Best Buy site. I believe it was something along the lines of 1,800 daily trips when it was a Best Buy. This particular project, the 71 units, is expected to produce 511 trips on a daily basis, so a net reduction of over 1,300.

Right now, obviously, and I'm using, and just so people understand, I'm using the Best Buy numbers as opposed to it being vacant, because that's not fair to anybody to say, you know, the last three years it hasn't had any traffic. There's a reason, is business went out of business, so. All right, so that answers that. For the applicant, parking spots and width and depth, We're making sure, actually maybe it's more for staff, but I have another question for you. We're making sure that we're not counting any hangovers. It's not, all right, you already know where I'm going.

Standard parking spaces, 9 by 18, without any overhang.

Fantastic. That's key.

If I can add to that, that it is double hairpin striping as well.

Oh, okay. That gives a little bit. All right, cool. And then on the southwest portion, I know that, the area behind the billboard. So is that whole triangle piece all part of that property? I thought it was just an easement.

part of the billboard property, is that what you're referring to? No, it's a whole triangular piece that is the full width of the property and it is angular in its depth, meaning that what you see on the plans that are presented to you, the subject residential property is limited to what's shown and that other parcel is a remainder parcel with a relocatable easement that exists on the property for their access through our site.

Okay, so that is their property in total. There's no way to activate a portion of that in any way, shape, or form.

No, sir. They're very proud of that, and they won't talk to us about it.

No, I know. I've had run-ins before. I couldn't remember the whole portion when I saw it. I thought that's a nice little area that we could do something with, but I understand where you're coming from, and that would be an unreasonable demand at this point. All right, thank you, Mayor.

All right, Council Member Gillian-Hillard.

Councilmember Dimitriou, for what it's worth on the proposed suggested revenues, they value the buildings at 82 million. They calculated the property tax correctly at 13.6%. It's about $111,000 property tax, 39,000 property tax and the vehicle license fees, and then they estimate 30,000 in sales tax. Seems right. So it's about $180,000.

Council Mayor Gutierrez.

Thank you, Mayor. I was hoping, Monique, there's two things I would like you to pull up and show. First thing, could you show me the OMC on the small lot subdivision ordinance? Yes. And I know that wasn't an agenda item that was attached. We could just get that online. Thank you. So I wanted to specifically look at section C, number two, where it says, the design review committee shall review small lot subdivision projects prior to issuing some demolition grading or building permit and make a fine in the small lot subdivision project complies with the small lot subdivision guidelines in section 17.41275 of this chapter. Now, and the application for design review shall be filed concurrent with the tractor parcel map application. I know that it was our intent to not have this go through DRC, so it was through administrative review, correct? So then, with your administrative review, and I know Mayor Pro Tem already asked you this in regards to the small lot subdivision, what's the rub? So it says here that You reviewed it and you looked at the small lot subdivision guidelines and you found that it is in coherence with our ordinance, is that correct? So you did the administrative review on that aspect, right? If I'm understanding that correctly.

Yes, staff believes that the project is in compliance with the small lot subdivision guidelines.

And so now, can you open up the actual guidelines that is attached to our agenda packet? And then while you're pulling that up, so staff believes it is in compliance. It does meet the guidelines. Can you tell me, walk me through why? Because I read it multiple times, and I want to make certain I understand why you believe it meets the guidelines for small subdivision. And then if you could turn to page six. So I would leave it on page six. If you could just explain your findings, like why you believe it meets the small lot subdivision guidelines, especially in particular to design.

Maybe if I could ask it in different ways, is there a particular question of, do you want us to go through how the whole project complies with design standards, or is there a particular question on this?

How it complies with the sub lot subdivision guidelines, in particular to design. When I'm looking here, a neighborhood context, and then scale and massing, how does it comply? I KNOW I READ IT MULTIPLE TIMES, SO I JUST WANT TO HEAR IT FROM YOU ALL, WHAT YOUR THOUGHT PROCESS WAS. BECAUSE YOU DO HAVE IT IN YOUR STAFF REPORT AND IN THE RESOLUTION AS WELL.

OK, sorry about that.

So we believe that the architectural design, it incorporates varied reforms and building plane articulation to help break up the massing. They provide duplex and detached buildings, modulations of facades, landscape buffer pockets between the buildings. Multiple smaller residential structures appear to reduce the perceived mass and intensity as compared to larger format commercial buildings. The buildings are oriented along the interior, sorry, building orientations along the interior perimeter are oriented towards interior streets and walkways to establish a strong tie with the street frontages. The windows, in terms of privacy, the windows incorporate frost to mitigate any privacy concerns. They have arranged their windows creatively and reduced the size to clear story on the second floor for all windows along the north and south property lines. There's pedestrian integration along Teston Street. They're adjacent to transportation and neighborhood goods and services. And they're also close to neighborhood service uses like medical, commercial, office, adjacent to parks and recreation.

OK, and I also read a lot in regards to that the setback was set back further away from Tustin. You still had the business frontage, right? So it was buffered by the commercial building in front. The three-story massing setback was enough so that you wouldn't have that visual effect when you're driving down Tustin. Is that part of that design guidelines, or is that more of the development standards?

It's not a development standard, but it was to give you the, it was to present the project in a way that it doesn't really affect the Tustin Street right way in terms of appearance. So massing is it towards the back, and it's similarly situated like the north and south neighbors. Wait, behind the commercial uses?

I understand that. I understand the frontage. So my question to you is, I also kept reading over and over that it was, with the new zone change, it was going to be compatible with, to the north, Park 72. and which is R3A, and this is just R3. So in essence, it's not compatible because that single story overlay, and this is going using our small lot subdivision, it's taking us up to three stories. And so I don't understand why I keep reading that. It is in conjunction with the north property because it is not R3A. But then, as I was thinking, I think it's fantastic, you know, down at Teston. I can't see it. It's that far back. But then when I look at this image on page six, which was back in 2019, colleagues, remember, I voted against the small lot subdivision because this is exactly what I feared, that we would build this big scale massing next to the R3 areas. And that exactly did happen in my neighborhood back in 1718 with the Olsen build, where they were trying to build three stories next to an R3A overlay. And Luckily, that was able to be changed and it was not then the two stories after all. So when I'm asking you, you're talking about how it scales to Tustin, what about the neighbors that are to the north and the south? Did we think about how it scaled to them? And so how does it meet the guidelines when we think about the neighbors to the north and the south and the southwest? Southeast, sorry.

could probably speak to that a little bit, and I know the applicant team mentioned this earlier, is that this property is currently zoned CTR, which is a commercial height. And I get that. And that the height designation for that commercial district is 32 feet, but it also allows for up to a quarter of the horizontal plane of that structure to exceed the height limit. And I think that's why we have a Best Buy STRUCTURE THERE NOW WITH A SIMILAR TYPE OF MASSING OF WHAT YOU WOULD POTENTIALLY SEE WITH THE PROPOSED PROJECT AND THE SMALL LOT SUBDIVISION IN COMPARISON TO THE CTR HEIGHT LIMIT, WHICH IS 32 FEET. THE SMALL LOT SUBDIVISION, SMALL LOT HAS A HEIGHT OF 35 FEET. SO IT'S VERY COMPARABLE IN HEIGHT. And instead of it being one large massing structure like the Best Buy warehouse type configuration where it's one monolithic form, as our principal planner Monique was mentioning earlier, there's varying roof heights. It's portioned off into individual buildings. There is room for light, air, and ventilation that do break through into each of the individual buildings. So it is a different configuration. But this property didn't have the A overlay

I know. I understand that. And I understand completely what you're saying. But again, the setback was quite far for the Best Buy from the property line to these homes to the north and the south. And when we do the subdivision, one of the things that they get to have is go up higher and have a lot smaller setback. That is why I'm asking, when you think about scale and massing now with that sublot subdivision, and looking at this image that you created this guideline book for us back in 2019, how do we make that finding? Because this is clearly, when we say figure one, small lot subdivision balance should follow the established size, shape, and form of the surrounding neighborhood through the use of similar proportions and details. And in this example, the house in color is disproportionate in scale compared to the surrounding homes. And this is exactly the issue I had with this back in 2019. So I just want to know how the finding was made that it does meet our sub lot small, I can't even say it anymore, small subdivision guidelines.

Yeah, so I think the way that Monique articulated earlier was the findings that we included in the draft, in the staff report and in the draft resolution for council's approval. And that was what was submitted to the Planning Commission and voted for, too, with the recommendation from Planning Commission.

Yes, and again, because we talked about facing testing, but we didn't ever speak about the neighbors to the north and the south in those findings. So again, I'm having a hard time seeing how it meets the guidelines. And I understand that now the administrative view is through your department, which I think is great because we do want to bring business origin. And I got to say, Mr. Brown, if you could come up and I have a quick question for you too. I really like your project. Your buildings are beautiful. I love that there's this open space. I think it's built really well, except that I have an issue with the size and the massing. And I really would love for you all to be there. And that's why I asked you, can you please bring that down? Are you even contemplating that you can bring that down to two stories? Because the architect is beautiful, the way you have it, orienting for safety, the egress entrance. We might have to work on the transportation. But that wonderful open space, everything. You've got everything really nice and planned out. I like the rooftops in the middle. It's nice, and I like that you were being sensitive to the neighbors and lifted up the windowsills and frosted the windows. But even if you frost the windows, they're going to open their windows, and they're going to want to open up their windows. And yes, they might be 60 feet away, but they'll still be looking at garages. And when cars drive by, just like one of the speakers has said, You know, they're not going to be sitting there like just staring out the window as they drive by in the garage. So when Mayor Pro Tem asked about the trees, I want to clarify, those trees are in between the two builds, correct? The two buildings. They're not in their yard in their 10-foot setback, correct? Correct.

That is correct. The trees are in between each of the duplex buildings.

And would it create any greenscape? Would it create canopy that would give some privacy, some greenscape at all?

Yes, at the size trees, the types of trees that those are, are sweet bay laurel trees, which is an evergreen tree. It grows to between 30 feet tall with a 20-foot wide canopy.

20 feet wide. But it's not really, it's going to stay in that box. No. And then the canopy comes out 20 feet. I get it. 20 feet, but that wouldn't. give complete greenscape for the area for that backyard setback. So I just wanted to clarify that on the trees. And, you know, I met with you. I met with the residents. And, you know, this was what gave me heartbreak back in 2019. But it's a fantastic build. And I really would like to see you there. But I don't see how we made the findings for and I'm speaking to staff now, for the neighbors to the north and the south and the southeast. Those mobile homes, I'm very concerned about them a lot. And it's very difficult when our guidelines clearly said that and we're looking at an image and I can't, I can't see that finding whatsoever because, again, we only talked about how it looked from the frontage of Tustin and not how did it look to these neighbors on the north and south. And yes, we're going to zone it very similarly. It's not a single overlay. And we are going to bring in more homes. No affordable homes. I talked to you about that as well. I was hoping we could have some affordable homes as well. at market rate. We teachers, firefighters, we can't buy those homes. We would love to. So I just wish we could work with that. And obviously, I would have loved some affordability. And those are my comments for right now.

Not seeing any other questions. So I'm just going to go ahead and speak. I like this project. I like it in every aspect. And I appreciate very much that the applicant has listened to the neighbors. And I know not completely everything they want. But they've made an effort to deal with the privacy issues. And I think that's admirable. So thank you. I thank you for wanting to invest in the City of Orange. We have been preaching that we are open for business. This project, to me, says, yes, we are open for business. And I think by approving it, we are putting an exclamation point on that. This is not a good commercial site as has been proven over and over again. After the bowling alley, I think it burned down. They rebuilt the bowling alley and it went away. Best Buy came in. It didn't make it either. And quite frankly, changing this zoning to residential is eliminating a spot zone. You have residential on both sides, and then you have commercial in the middle. This would make the zoning consistent. So for many reasons, I think it's a great project, and I think it'll be great for the city of Orange. We need to put a stake in the heart of the Orange Way. And in my opinion, denying the project would be for reasons that are the Orange Way. We need to move the city forward. We need to think differently. We need to think big. This is quality housing. And I read an article over the weekend that even when you approve quality housing, Council Member Gutierrez, there's people that opens up other housing in the city. So when people step up to this housing, it makes lower housing available that wouldn't have been before just by providing housing. And you're also providing potential shoppers to what we hope is a revitalized commercial center across the street. So with that, I will be supporting the project. We have a motion to approve from Mayor Pro Tem Bilodeau.

And you have some- Just one last thing, a closing statement. Unfortunately, the specific plan for the mall across the street is not complete. We're hoping that'll be done in the next 12 months. And as such, we are not able to extract from the applicant any kind of a contribution towards that specific plan. And I know that myself and Councilwoman Tavalaris, we're looking forward to enhancing the streetscape along Teston Street, hopefully landscaping medians that are currently concrete, perhaps replacing the those twiggy palm trees. We used to have beautiful ficus trees, but unfortunately we had to take those down because they were destroying the sidewalks. But I'm hoping that we come up with a different plan so it looks much different. And maybe even 15 years ago when I was here, the council voted to underground the utilities along Tustin Street. But that never came back and it never happened. That's probably another conversation. But I guess what I'm saying is I have spoke with the applicant and they have committed to me that when the specific plan is done that they would be willing to participate in some way in enhancing that streetscape. And I just wanted to publicly say that and just have you acknowledge that that is in fact true. Hopefully this project is wildly successful and you'll be in a position to voluntarily participate because we can't ask you to do that now because we don't have a specific plan in place. So I just wanted to put that into the record. Thank you.

Does your motion include the suggestions you made? And I would advocate also for a 24-inch box because knowing something about trees, I know that a little bit smaller tends to establish better and create long-term health of a tree and growth. So I think 24 inch boxes is the way to go.

Okay, I'm looking at the site plan it actually says the the trees on the perimeter are actually 24 inch on the plan. I think there was there might have been some confusion that maybe they were the 15 gallon. So I think the 24 inch are actually the ones That's two people now that have told me tonight that 24 is better than 36. I'm not an arborist, so I guess I will accept that as a reality.

And I will second the motion then. All right, we have a motion from Mayor Pro Tem Bilodeau, and I have seconded the motion. Any further discussion, questions? All right, then I'll call for the vote.

Excuse me, Mayor, can the motion maker please read the ordinance title?

Great. Let's see. This is the introduction and first reading of ordinance number 06-26, approving zone change number AN ADOPTION OF MITIGATED NEGATIVE DECLARATION NUMBER ENV25-0001 AND ASSOCIATED MITIGATION MONITORING PROGRAM AND REPORTING PROGRAM.

ARE YOU HAPPY? ALL RIGHT. I'LL CALL FOR THE VOTE. Project is approved with six votes and one no vote to Councilmember Gutierrez. Congratulations, welcome to Orange. I'm gonna call for a 10 minute break.

THE END

Thank you.

We're back. Next is 9.3, a public hearing to consider adoption of an urgency ordinance to establish a temporary moratorium on new massage establishments. This is ordinance number 08-26, and I will remind the council that due to it being an emergency ordinance, it will require six votes to pass. This is also a public hearing, and I will ask for a staff report.

Good evening, Mayor and members of the City Council. My name is Adam Davis. I'm the Senior Code Enforcement Officer in our Community Development Department. Tonight, the item before you is the urgency ordinance establishing a temporary moratorium on new massage establishments within the city. Currently, there are approximately 90 of these establishments. operating in our city. As shown on the map, majority of these establishments are concentrated on the Tustin Corridor, running north and south, as well as along Chapman Avenue. Through recent inspection and joint enforcement efforts, staff have identified ongoing operational, zoning, and enforcement concerns related to these establishments. In this slide, it's going to highlight some of the documented enforcement concerns identified through more than 20 joint enforcement inspections conducted with our Orange Police Department and our community development staff. During these observations and inspections, majority, if not all, of these establishments have been observed operating with unlicensed massage therapists on site, uncommitted interior construction, including room and shower modifications, the service of alcoholic beverages, and instances involving unprofessional conduct. To address these concerns, staff is recommending the proposed urgency ordinance, establishing a temporary 45-day moratorium on new massage establishments. The temporary moratorium will pause approval on new massage establishments while staff evaluates updates to the city's current regulations, zoning standards, and enforcement provisions. This will provide staff the time to strengthen the city's regulatory framework and better protect the public health, safety, and welfare. Therefore, staff respectfully recommends that the city council adopt the proposed interim urgency ordinance. That concludes my presentation. I'm available for any questions.

Thank you. And I understand that, uh, Should it be necessary that the emergency ordinance can be extended up to 22 months and 15 days?

Correct.

All right, thank you. Council Member Barrios. Yes.

Yeah, I've been pretty vocal about this, especially about the one that's right next door to my office. A question just about like the ones that you've like identified on the map because there are so many and there just seems to have been kind of a real proliferation in the last year or two. How many of these are actually getting business licenses or are they just opening, telling their landlords whatever they need to say and then just getting established? Do you have a sense of that at all?

So we only encountered the operators that are operating with the current business license. We do not have any determination of whether or not they are misinforming the landlords on their operations.

Okay, thank you.

So this is a public hearing and I am now opening the public hearing. Do we have any speakers? We have no speakers, so I'm closing the public hearing and bringing it back for discussion and or a motion. We have a motion from Council Member Gutierrez and a second from Council Member Barrios to approve this item. Is there any further discussion? I'll just add to that, or ask a question. Did I hear you say that there's applications that are still coming in on a regular basis?

So as of right now, there's no current applications available. IN PROCESS.

OKAY, IN PROCESS, BUT THEY STILL KEEP COMING.

ALL RIGHT. WE DO GET A NUMBER OF INQUIRIES FROM TIME TO TIME THROUGHOUT THE PUBLIC COUNTER WITH OUR COMMUNITY DEVELOPMENT STAFF.

OKAY, GREAT. ALL RIGHT, I'LL CALL FOR THE VOTE.

Mayor, before I tally the vote, can the motion maker please read the title of the ordinance?

Adopt Ordinance Number 08-26 and the Findings of Urgency, an urgency ordinance of the City Council of the City of Orange establishing a temporary moratorium on massage establishments, pending review, and update the city municipal code and zoning code.

And that got seven votes approved unanimously. Item 9.4, continued public hearing to consider the introduction and first reading Ordinance Number 07-26 to update regulations for residential care facilities and daycare homes to ensure consistency with state law and finding of CEQA exemption. This was continued from May 12, 2026. And a brief staff report, please. Thank you.

Hello, Mayor and Council Members. I'm Arlen Beck, Senior Planner, and before you tonight is an ordinance to amend the zoning code to update the regulations for residential care facilities and daycare homes to ensure compliance with state law, which implements housing policy action 4F of the general plan housing element. State law mandates that residential care facilities serving six or fewer residents be treated as a residential use by right and are permitted in all residential zones. Larger facilities serving seven or more people require a conditional use permit. For family daycare homes, both small family daycare, which allows up to eight children, and large family daycare, which allows between nine and 14 children, are treated as residential uses and allowed in all residential zones consistent with state law. The proposed ordinance also removes outdated definitions such as rest homes, sanitarium, and day nurseries, and adds a new definition for skilled nursing facilities consistent with the state law. With that, staff recommends that the council adopt ordinance number 07-26, approving amendments to the Orange Municipal Code to comply with state law regarding residential care facilities and find the ordinance categorically exempt from CEQA. That concludes staff presentation. We're available for any questions.

Thank you. Thank you very much. Council Member Barrows?

Yeah, I just had a question in terms of the residential care. Is this only, does this, this doesn't cover at all like what we've been seeing or the complaints we've had about like the rehab houses, residential use in residential areas and or like the sober living homes, anything like that, correct?

That's correct. This does not include sober living homes.

Okay, thank you.

My question is, we cannot establish, because this is so often asked, any limitation on the density of these facilities if they are by right considered residential, correct?

That's correct. The state law requires that the city treat them as residential uses, as a residential use.

Okay, except for sober living homes. And what is, how far do those need to be apart? Just curious.

I don't know the distancing requirement for sober living homes, but for residential care facilities and family daycares, there's no distancing requirement.

Thank you. I know it's not related to this discussion, but thank you. All right. Any other questions? Oh, sure.

Just specific to like six or fewer that that is by right. And with any of these facilities, how are they distinguishing between the residents and then all of the staff that it takes for any of those so that suddenly you're talking about at any given time of day you could have up to, you know, twice as many people on site? Did they make any distinguishing regulation about that?

So these residential care facilities serving six or fewer are licensed by the California Department of Social Services, which have certain standards that these facilities have to meet. The state of California does not allow us to have a maximum occupancy on any residential use, and these are considered a residential use.

So basically this is just a clean up to make sure we're in compliance with state code is all simply put.

And Council Member Barrios, I can actually answer your question. So in California, residents are considered individuals receiving care, person supervised, or facility clients. The resident count does not include caregivers, administrators, overnight attendants, med techs, or house managers. So that is correct. The six would be actual residents.

All right. Any further discussion or we can entertain a motion?

Mayor, can you please open the public hearing?

Oh, I was forgetting. I just did the public hearing and forgot I didn't do this one. Okay. Officially opening the public hearing. Are there any speakers?

We do not have any speakers.

I'm closing the public hearing and bringing it back for a motion. You guys are going to be shy. I have made the motion to approve. It has been seconded by Councilmember Dimitriou. Motion is a continued public hearing to consider. This is to introduce and conduct first reading of ordinance number 07-26, an ordinance of the City Council, the City of Orange, meaning Title 17 of the Orange Municipal Code to comply with state law regarding residential care facilities, health and safety code sections 1267.16 and 1500-1569.889, and to also find the ordinance categorically exempt from the California Environmental Quality Act, CEQA, per state CEQA guidelines, sections 15061B3. I will call for the vote. That is approved unanimously. Okay, moving on to administrative reports, item 10.1, fiscal year 26-27, City of Orange Preliminary Budget and Five-Year Capital Improvement Program. Finance Director is ready to go.

Good evening, Mayor and members of the City Council. Tonight I'll be presenting the Fiscal Year 27 Preliminary Budget Report consisting of revised Fiscal Year 26 year-end estimates and Fiscal Year 27 budget including all funds. I'll briefly go over the outline of our presentation. So I'll start by providing an overview of the annual budget process and overall timeline as we usually do. I will review the revised fiscal year 26 general fund year estimates, considering actuals through the third quarter. I will review the fiscal year 27 general fund preliminary budget, including revenues, expenditures, and proposed fund balance. Then we'll move on to the fiscal year 27 preliminary budget for all funds by fund type. We'll review the general fund five-year financial forecast under two scenarios, incorporating the proposed revenues and expenditures and highlighting the key assumptions associated with each scenario. And then lastly, we'll review the recommended actions for the fiscal year 27 preliminary budget. So I'll briefly review our timeline. The fiscal year 27 budget process started in December. After the budget kickoff, the departments prepared their budgets using zero-based approach, ensuring expenditures reflected current needs, priorities, and program justification, rather than relying on prior year funding levels. In February, the city manager and budget team met with all departments to discuss operating and capital budget needs. At the budget study session in March, we presented the fiscal year 27 proposed general fund budget. And at the budget study session in April, we presented the fiscal year 27 capital improvement program and provided an overview for all funds. Tonight, we'll review the preliminary budget, including the revised fiscal year 26 year-end estimate and more refined assumptions and economic indicators for fiscal year 27 numbers. And finally, next month in June, we'll bring forward the budget adoption for council consideration, considering any feedback received tonight. So I'll start by reviewing the revised fiscal year 27 estimates. The original fiscal year 26 year end estimates were presented at the March budget study session based on mid-year actuals. Since the March budget study session, fiscal year 26 estimates have been updated using third quarter actuals, giving a clearer picture of where the general fund is expected to end the year. So this table reflects the updated fiscal year end estimates for fiscal year 26 and provides a clear picture of where the general fund is expected to close the fiscal year. Revenue estimates are now projected to come in at about $4 million, or 2.6% higher than previously estimated, mainly due to stronger sales tax and property transfer tax revenues, along with higher building-related activity and timing differences in several revenue categories. Expenditures are also projected to increase by about 2.7 million or 1.7%, primarily due to some larger third quarter payments, including the North Spa payment and costs associated with implementing paid parking. Overall, the projected operating deficit has decreased by approximately $1.3 million since the mid-year review and is now estimated at 3.7 million. After maintaining the city's 18% catastrophic reserve, The general fund is projected to end fiscal year 26 with an undesignated fund balance of approximately $1.9 million, which is an increase of approximately $865,000. Now I'll review the fiscal year 27 preliminary budget for the general fund, starting with revenues, followed by expenditures, budget balancing measures, and fund balance. For fiscal year 27, the proposed operating revenues total $171.2 million, including transfers. Aside from property tax and sales tax, major revenues include TOT, fees for service, licenses and permits, and internal service charges. Combined, these major revenues make up 82% or $140.1 million. property and sales tax make up the majority of the city's revenue at 113.3 million or 81 percent of the total proposed revenues for property tax we're projecting about a 3.1 percent increase over the fiscal year 26 year in estimate this growth is largely constrained by prop 13 which limits annual increases on existing properties to around 2%. So most of this additional growth included in this revised estimate is supported by stable housing market, increased home sales activities, and reassessments tied to property transfers. For sales tax, we've included a slight increase of about 1.8% from the proposed budget, consistent with the revised fiscal year 26 year-end estimate, mainly due to continued fuel prices that are trending up. But the estimate also considers continued cautionary spending in other sales tax categories and is partially offset due to existing sales tax sharing agreement stipulations. Revenues from TOT remain consistent with fiscal year 26 year-end estimates. Estimated revenues from fees for service were adjusted at an increase of 14.5% or about $1 million from the proposed budget following the city's recent user fee study and council approved fee updates in January and April with the goal to better align service charges with the actual cost of providing those services. License and permit revenues are projected to increase modestly by approximately 1.6%, primarily due to continued business license discovery and compliance audit efforts, along with updated year-end estimates. which are reflecting stronger than anticipated activity levels. Internal service charges are forecasted at approximately 4.8 million and represent allocations from other funds to support administrative and centralized services. This amount is approximately 5.2 million lower than the fiscal year 26 year-end estimate, and this is primarily due to organizational and accounting changes in which several internal service operations, which include information technology operations, fleet maintenance, building maintenance and repair, and self-insured dental program. These were all incorporated directly into the general fund operations rather than being funded through separate internal service funds. As a result, the reduction reflects a change in how costs are allocated and reported, but there is no reduction in actual services or operational support. The preliminary budget remains consistent with the proposed budget figures within this category. The remaining revenues make up the remaining 18% of operating revenues, about $31.1 million. These other revenues consist of franchises, fines and forfeitures, revenue from other agencies, use of money in property, other miscellaneous revenues such as donations and one-time revenues and transfers in. Miscellaneous revenues includes one-time reimbursements and other variable revenues such as Cal OES fire deployment reimbursement and credit card surcharge offsets. Revenues were adjusted to reflect updated year end projections and timing of reimbursements. Revenues in the use of property and franchises categories remain relatively consistent with both fiscal year 26 year-end estimates and fiscal year 27 proposed budget figures. Finds are projected to remain consistent with the fiscal year 27 proposed budget and is an increase of 19.4% from fiscal year 26 year-end estimates, primarily due to the implementation of Old Town paid parking program and improved collections from parking and code violations. Revenues from other agencies are projected to decrease slightly in fiscal year 27, but primarily consists of grant funding and reimbursements from the state and other governmental programs, which can fluctuate throughout the year depending on awards and timing. Transfers into the general fund are approximately $15.5 million in fiscal year 27, which is a reduction from the $17 million included in the fiscal year 27 proposed budget. The adjustment reflects the revised fiscal year 26 estimated year-end fund balance and the updated fiscal year 27 preliminary budget projections. These one-time transfers from the Emergency Medical Transport Fund, Equipment Replacement Fund, and Capital Improvement Program Fund are intended to temporarily offset the projected operating deficit and provide a short-term budget relief. Shifting over to expenditures for fiscal year 27, the operating expenditure totals $170.8 million. The operating budget totals $143.4 million and makes up 84% of the total expenditure for the general fund. This is not considered transfers or debt service. Looking at the $143.4 million, you'll see that a majority of the city's proposed operating expenditures is salaries and benefits at about 76%, which is typical of the full-service city. Expenditure in salaries and benefits remains consistent with the proposed budget and reflects a 5.7% increase from the fiscal year 26 year-end estimates, driven by standard step increases, a proposed 3% adjustment for all employee groups, and the decision to fully fund over time based on actual trends rather than relying on the vacant saving scenes. and vacancy savings. The repair and maintenance category remains consistent with the fiscal year 26 year in estimate and fiscal year 27 proposed budget. Expenditure for professional and contractual services is projected at approximately $7.5 million, which is a decrease of about $514,000 from the proposed budget. The budget continues to support key priorities such as economic development initiatives, year-round aquatic services, the Old Town paid parking program, and on-call building and inspection services, while also reflecting the removal of any one-time fiscal year 26 expenditures within this category. As was the case on the revenue side, internal service costs are projected to decrease from the fiscal year 26 year-end estimate by about 57.9%. Again, this is not a true reduction in cost, but rather a change in how these costs were allocated and reported following the consolidation of internal service functions into the general fund. The preliminary budget for this category remains consistent with the proposed budget presented at the March budget study session. All other categories remain consistent with both the fiscal year 26 year-end estimate and the fiscal year 27 proposed budget with no major adjustments. The remaining 16% of the fiscal year 27 expenditure consists of transfers out and debt service obligations. The largest portion of this expenditure is the city's $16.2 million pension obligation bond payment. The remaining $1.7 million in debt service covers the city's lease revenue bond, largely used to finance Fire Station 1 and other safety enhancements. The transfer out of $9.5 million to the city's accrued liability fund will ensure the city's UAL payment to PERS is funded and is consistent with what was proposed at the March budget study session. Taking a look at expenditure by department, the chart summarizes the fiscal year 27 preliminary budget by department and reflects updated expenditure estimates based on revised staffing assumptions, operational needs, and third quarter year end projections. Public safety continues to make up the largest portion of the general fund budget with police expenditures totaling approximately $51.4 million and fire expenditures totaling approximately $39.4 million. Combined, these two departments account for roughly 53% of the total operating expenditures. Non-departmental expenditures represent the next largest category at approximately $32.1 million, or 19%, primarily reflecting citywide costs such as insurance, utilities, debt obligations, and employee benefit-related expenditures. Public Works and Community Services remain two of the larger operational departments with budgets of approximately $13.2 million and $9 million, respectively, supporting core infrastructure maintenance for parks infrastructure, recreation, and community programs. Departments such as the city manager's office, finance, IT, and human resources collectively support the city's administrative and operational functions and together account for approximately 9% of total operating general fund expenditures. In order to present a balanced general fund budget, a total of over 21.6 in budget balancing measures have been incorporated into the budget. Reductions in the amount of approximately 6.1 million were a result of eliminating full and part-time positions and freezing positions. Additionally, transfers amounting to 15.5 million, as previously mentioned, from the EMT capital projects and IT capital funds have been included to offset the proposed fiscal year 27 deficit. As part of the effort to continue cost containment, the proposed budget includes a net reduction of approximately 37 full-time equivalent positions. This brings the city's workforce down to approximately 708 budgeted positions. Staffing levels have been reduced significantly over the past several years with these levels now comparable to fiscal year 20 when the city was operating under significant financial constraints due to the pandemic. When broken out by fund, the general fund includes funding for just under 600 FTE, with the remaining 108 supported through the city's enterprise and special revenue funds. While the general fund budget is structurally balanced at approximately $171.2 million in revenues and $170.8 million in expenditures, it is important to note that the balance is achieved through a combination of ongoing and one-time funding sources. Of the 171.2 million in total revenues, approximately 155.7 million represents ongoing operating revenues, while approximately 15.5 million comes from one-time transfers and funding sources. These revenues offset approximately $143.4 million in operating expenditures, $17.9 million in debt service obligations, and $9.5 million in transfers out related primarily to pension obligations. As a result of the budget balancing measures implemented in the fiscal year 27 budget, the city was able to achieve a balanced budget without relying on any one-time use of undesignated fund balance. However, relying on one-time transfers and funding sources to support ongoing operational costs is not fiscally sustainable over the long term and reinforces the need for continued structural budget solutions and long-range financial planning. Considering the proposed operating revenues of $155.7 million and expenditures of $161.3 million, including $17.9 of debt service obligations, the fiscal year 2017 proposed operating deficit is estimated to be about $5.6 million. Considering transfers out of $9.5 million and $15.5 million of transfers in, the net surplus is estimated to be just under $326,000. So now we'll move on to fund balance and how this net affects our fiscal year 27 estimated year end fund balance. The revised fiscal year 26 year end estimates reflect a projected net operating deficit of approximately $715,000. With the beginning fund balance of $28.5 million and maintaining an 18% operating reserve, the estimated fiscal year 26 year-end undesignated fund balance is projected at approximately $1.9 million. Fiscal year 27 is projected to end with an operating surplus of approximately $326,000, as we previously mentioned, representing an improvement of about $320,000 compared to the fiscal year 27 proposed budget. As a result of the projected operating surplus, the fiscal year 27 undesignated fund balance is estimated approximately $28.2 million. Although Council's financial policy establishes a target catastrophic reserve level of 20%, staff recommends maintaining the reserve at 18% due to the ongoing financial challenges. After setting aside approximately $25.8 million for reserves, the fiscal year 27 projected available fund balance is estimated at approximately $2.36 million. So the next two charts will provide a high-level overview of the city's fiscal year 27 preliminary budget across all funds, beginning with revenues and then we'll move on to expenditures. Total fiscal year 27 revenues are projected at approximately $292.9 million. The general fund continues to represent the largest share of the city's revenues at approximately $171.2 million, or 58% of the total budget, supporting core city services and operations. Enterprise funds account for approximately $55.1 million, or 19% of total revenues, and primarily support utility operations, funded through user fees and service charges. And the remaining revenues are distributed among special revenue funds, internal service funds, and capital project funds, which support restricted programs, internal operations, and infrastructure investments throughout the city. On the expenditure side, total fiscal year 27 budget expenditures are projected at approximately $317.3 million across all funds. Similar to revenue, the general fund represents the largest portion of expenditures at approximately $170.8 million, or 54% of the total budget, reflecting the city's ongoing investment in core municipal services. Enterprise funds account for approximately $56.2 million in expenditures supporting utility operations and capital needs related to the water and sewer. Special revenue internal service and capital project funds each represent approximately 9% of total expenditures and support restricted programs, citywide operational services, and infrastructure and facility improvements. So this table provides a summary of the projected fund balances by major fund type, which include special revenue funds, capital project funds, internal service funds, and enterprise funds. Special revenue funds are dedicated funding sources the city uses to support specific programs and services like transportation, public safety, housing, and community development with revenues that are legally restricted for those purposes. So the city closely monitors these funds to ensure compliance, maintain service levels, and sustained programs as funding conditions change. Special revenue funds are projected to end the fiscal year with an estimated fund balance of approximately $68.3 million after accounting for approximately $26.7 million in revenues and $30 million in expenditures and transfers out. Capital project funds are used to finance major city infrastructure and facility improvements, with funding dedicated specifically to long-term construction and capital investment projects. These funds are projected to end the year with approximately $11.9 million in fund balance. The operating difference of approximately $13.4 million reflects the plan use of previously accumulated reserves for ongoing capital improvement and infrastructure projects. Internal service funds help cover shared city operating costs, such as insurance and liability expenses through reimbursements from other city funds. Internal service funds are projected to end the year with a negative fund balance of approximately $12.1 million. These funds support centralized city services, such as computer and equipment replacement, workers' compensation, general liability, and employee accrued liability. These funds continue to experience long-term funding pressures in the absence of consistent and ongoing general fund contributions. Enterprise funds, which include operations for water and sewer, are projected to end the year with an estimated fund balance of approximately $6.9 million. After accounting for $55.1 million in revenues, and $59.2 million in expenditures. Overall, the table demonstrates that several funding types are currently utilizing the accumulated reserves or existing fund balance to support ongoing operations, capital investment, and long-term obligations. So as required by the adopted financial management policies, staff developed two fiscal year 27 five-year forecast models using the fiscal year 27 preliminary budget as the baseline. Both models incorporate historical trends, current economic conditions, inflation, and market indicators. So for the first model, key revenue assumptions include modest sales tax growth beginning at approximately 0.7% in fiscal year 28 and gradually increasing to 2.5% by fiscal year 32 as economic conditions stabilize and taxable sales activity improves. Property tax assumptions remain one of the more stable components of the forecast, with annual growth estimated at approximately 4.9%, which is consistent with long-term historical trends. TOT is forecasted to increase by approximately 3.7% annually, reflecting the economic sensitivity of tourism-related revenues. Fees and fines are forecasted to grow by approximately 4% annually, reflecting the recent council approved fee adjustments and the implementation of new fines. Other revenues, including interest earnings, leases, rents, miscellaneous revenues, are forecasted to increase by 2% annually. And then internal service revenues are forecasted to increase by 3% annually, which is consistent with inflationary adjustments. On the expenditure side, key assumptions include salary and benefits increasing by 3% annually, which reflects long-term trends and anticipated labor costs. Non-personnel operating costs, including contracted services, utilities, maintenance, and supplies are forecasted to increase by 3% annually. Annual leave payout obligations. continue to represent a significant part of the expenditure assumption, with approximately $6 million in estimated annual payments, including roughly $3 million supported by the general fund. The forecast includes an ongoing annual contribution of $1 million to support the long-term stability of the workers' compensation fund And then to address ongoing operational deficits in the general liability fund, the forecast includes an estimated annual contribution of $1.5 million. Forecast also includes $2 million annual contribution towards the Measure M2 maintenance and effort requirement for capital projects and for infrastructure funding. And then this first model assumes strong CalPERS investment performance, reducing projected unfunded pension liability payments to $5.2 million in fiscal year 28 with no projected payments afterward. While this assumption presents a significant long-term forecasting risk, we went ahead and assumed it. And based on these assumptions, the general fund is forecasted to experience an operating deficit of approximately $17.7 million in fiscal year 28. The forecast gradually improves over the five-year period, with the operating deficit declining to approximately $8.4 million by fiscal year 32. A significant factor contributing to the improvement is the assumption that the unfunded pension liability payments declined substantially after fiscal year 28 due to strong CalPERS investment performance. While this scenario is mathematically possible under current assumptions, staff notes that it represents a significant long-term forecasting risk, and it may not be sustainable over time. In the second model assumptions, all assumptions remain consistent with the first model with the exception of the unfunded liability. Model 2 evaluates pension risk by reducing the CalPERS discount rate from 6.8% to 6.6%, which is consistent with the potential application of CalPERS funding risk mitigation policy. So under this scenario for fiscal year 28, the unfunded liability payments nearly doubled to just over $10 million. Fiscal year 29 adds an estimated addition pension payment of approximately $6.6 million. So this scenario assumes CalPERS reduces its discount rate from 6.8 to 6.6. And as a result, the forecasted operating deficit increases to approximately 22.6 million in fiscal year 28 before gradually improving to approximately 8.4 million by fiscal year 32. This model demonstrates the city's financial sensitivity to pension-related assumptions. It also highlights the potential volatility of future retirement costs. Both forecasting scenarios demonstrate that the city continues to face ongoing structural fiscal challenges over the long term. In both models, expenditure growth is forecasted to continue outpacing recurring revenue growth absent some structural changes. So to conclude the presentation here are the two recommended actions for council consideration to review and affirm the fiscal year 27 preliminary budget for all funds and to direct staff to return in June for the fiscal year 27 budget adoption. So that concludes our presentation. The proposed budget documents will be made available on the city's website. Trang Nguyen, our finance director, and I are available to answer any questions that you might have. And city staff are also available for questions specific to each department's projects or operations.

Thank you. Excellent presentation. Questions? Council Member Barrios.

Yeah, I'm looking at what was included as an attachment into the agenda item, specifically the schedule of revenues and expenditures. I don't know if you have a slide that matches this up, but it shows you the timeline from 2023 to what we're looking at and talking about today. And specifically that it shows approximately $20 million increase from 2023-24 to 2025-26. Is that consistent over time when you're looking, and I was ripping through all my documents to see if I had one that showed kind of where we had come from, from... say like the early 2000s or mid, you know, prior to the pandemic, just so I can see the growth over time of those expenditures because $20 million over just those couple of years seems excessive. So I was just trying to get an answer to what that growth is specifically due to. Does it align to when the pension bonds were put in place? Does it align to rapid increase of staffing? What does it align to?

Just to make sure I understand the question, you're referring to the general fund expenditure? Or which line item are you referring to?

I'm looking at attachment two that was in the agenda packet. Yeah. Schedule of revenues and expenditures. I'm looking at the first line item general fund under revenues and the first line item under expenditures. Yeah. So it's $20 million approximately that we've grown in just that time.

Okay. So if you remember in 2025, we collapsed four of the internal service fund, moving it back into general fund. So you're going to see that hype in both revenue and expenditure moving those funds into general fund. So it used to be an internal service, now it's in general fund, which is pretty much the same thing because general funds support internal service.

Okay.

So it's just more of a reporting changes than anything else. You're just looking at general fund to general fund.

No, and I get that. So thank you for doing this. I'm thinking back to all the documents we shared with people when we were talking about sales tax before, and it was all down at like, you know, the 150 range, 140 and 150 range. So it's going to, people are going to be confused by that. It's just like, what happened? So we need to be able to explain that. Yeah.

COUNCILMEMBER GILLINAMER.

THANK YOU. I APPRECIATE THE PRESENTATION. CAN WE GO BACK AND LOOK AT THE SLIDE THAT WALKED THROUGH 40, THE FTE ESSENTIALLY, THE 45 SUGGESTED REDUCTION, THE 10 FROZEN, AND THE 18 ADDITIONAL AO. Yeah, this is it, yeah. So this 708 is essentially what we have as our proposed FTE for salaries and benefits for 26-27, resulting in $109 million for forecasted salaries and benefits expense. Is that correct? Yes. Could we look at the FTE for 25-26 and what we went from and to? Assuming this would be, it's net 37, right? Like 37 higher. With 45 reduction, 10 frozen, and then add 18, essentially 25, 26 was 37 on top of this? In fiscal year 26 or? 25 this year. Like 25, 26, what did we budget?

25, 26, we budgeted, let me see here, 700 and, oh, it was my schedule. Give me one second.

Yeah, I think what you suggested was a reduction in 45, 10 frozen, and 18 increase for AOs, is that correct?

Yeah, we only go over to our position changes. So it ends up being a net of about 36.8 FTE.

Reduction.

Reduction.

So, which is what it says in there. So if you add that onto this number, that would assume the 2526 budgeted.

Yeah, so what was authorized in 2526, according to our scheduled positions, was 745 FTE. However, we did maintain some vacancies, so that's why on that scheduled position we have both what was budgeted and what was authorized.

You're walking with me on this. All right, so we budgeted 745 in this current budget cycle, and we're going to end at $103 million in actual expenditures. So we will be reducing our FTE and projecting a 5.7% increase in salaries and benefits. The assumption here is we ran a vacancy, right? So my question for you is we're going to increase our salaries and benefits. The assumption is we're going to hire up to that full budgeted amount. Do we anticipate any vacancy at all again this year like we've had every year?

Just to clarify, the 745 that you mentioned for the current fiscal year, that includes all fund, not just general fund. So if we're trying to compare and look at what was truly general fund budget for salary and benefit, we need to back out the enterprise fund and the special revenue fund too.

Gotcha.

So the chart here, the 708 position that we have total, 600 of that position is general fund. Gotcha. So when we look at general fund salary and benefit of 109, that equate to 600 position for fiscal year 27.

What was fiscal year 26 for general fund? I guess the point I'm gonna make is that I saw where the increases and reductions went, right? And we ran a vacancy rate. We always run a vacancy rate, right? Like, are we accounting for us to hire to this full amount or is there any sort of allocation for vacancy rate in your assumptions this year?

No, there's no vacancy rate included in the assumptions.

Okay. What was the vacancy rate for 2526?

We didn't have a vacancy rate in 25-26. Either we eliminate the position or we freeze the position. There was no vacancy rate in 25-26.

OK. What did we budget for in the general fund in 25 and 26, and what did we actually have?

We have our year end estimate to be about $104 million to end the year.

I'm sorry, Trang, for FTE.

Oh, for FTE, for general fund only, I don't have that number. I only have the number for 27 right now, but I can get you the number for 26.

Okay. So we typically, or at least every year I've been on council, we've run a vacancy rate, or we have not staffed to the level that the budget dictates, and that ends up being a tailwind to overall expense performance. Are we assuming, if we're going to assume no vacancy rate, I guess my point would be this would be a different outcome than what we've actualized every year that I've seen. And is our intent to, wherever we're at relative to the budget, to hire all those positions so that we carry them through the entire fiscal year? Is that truly our intent? Or understanding where we're at, are we going to want to continue to run some level of vacancy? do we want to hire all of what we have here if we're currently operating below that and we understand that we have an imbalance?

So the budget assumes that we are hiring or that we're not carrying any vacancies.

From your end, you're 100% right. But I guess this is more of a decision, right? Do we intend to hire to that full budgeted FTE? And I think that's something we need to understand. Yeah.

Jared, I'm assuming we're below the budgeted headcount today. No, we're certainly below the budgeted headcount. There will always be vacancies within the budget. Staff come and go throughout the year. We don't factor in 5% to 10% or 20%, right? Last year we ended with about $10 million in vacancy savings. We carried anywhere from $70 to $80 throughout the year. Where the numbers might be off those, we didn't fully fund overtime. at the beginning of the year. So the math doesn't track. What you're seeing before you is fully funding the 708 positions and fully funding overtime as well. So that's where we go from the 103.9 all the way up to $109 million. But no, there will be vacancies throughout this year, yes.

Up to about three years ago, there was, I believe, a vacancy allocation, and we changed the way we've done forecasting, at least from what I understand historically. Either way. Or frozen positions, yeah. So I think as a council, we need to determine if we want to hire to that number. I think we've allowed for vacancy to make us whole in past years. And I think at some point, we need to have that proactive, intentional allocation that we deem is the right headcount for service levels within the city. And if this is it, then, you know, and if we, I'm assuming the 109, what you said was you, you accounted for actual overtime rates this time around last year, you under accounted for overtime rates.

That's correct.

Yeah. So what exactly is the overtime amount that you accounted for in the 109 million?

I might need to get back to you with an exact number.

So I also think that that's a number we need to address at existing expenditures. So that's another focus area for us. But I think when we think about our budget in general, this is a story of what's the size of our team and where do we want our team to be at? The second story is the pension obligations that are right in front of us today and where will those be two years, three years, four years down the line relative to the size of our team. Right, some of the other stuff that you get into, I think is important and significant, and 100,000 here, 250,000 here, but the total story for our budget discussion is, you know, intentionally, what is the size we want our team to be? And instead of under-hiring or setting a target number, like, can we put our headcount where we want them and staff to that level? I suggest that we need to be running around 670, 680 to be financially healthy consistently going forward. And we can determine where that goes. And by the way, I understand that that's a total number train that includes all funds. But I think specifically as it relates to the general fund, we need to come down a little bit there. So I guess the question here is we know there's going to be a vacancy rate. We know that's going to show up. That's a portion of this. I just wanted to call that out for us to understand and think through. My second question, which I think is super important for the next couple of years, is I get the internal service fund shift of $5.5 million. I understand that that's an accounting change rate. We have a transfer in. and we have a transfer out. The transfer out is nine million-ish, and that's predominantly focused on unfunded liability expense. As you go forward with that, Jared, as you have looked at modeling some of this, if the 12% sticks, where does that put us, our unfunded rate, in the corresponding three, four years out?

Right now we're working off the fiscal year 24-25 PERS UAL reports. That's the baseline. Their baseline is the 6.8% return for 25-26 and every year thereafter. If we stay down that path, we have a $6.8 million payment in fiscal year 27, $8.2 million, $9.6 million, $9.1 million, $8.4 million, and it carries on for the next few years. Running some scenarios, if PERS hits 12% this year, one month left in the fiscal year, and then we assume 6.8% returns thereafter, next year's payment is going to be $6.8 million. Fiscal year 27-28, it's a $5.2 million payment, and then the UAL payment goes away. However, it goes away if PERS hits that 6.8% return year after year after year after year. None of us can look in the crystal ball and determine whether or not that actually occurs. Another issue is PERS used to lower their discount rates. There was an automatic trigger. So if PERS exceeded their 6.8% return by 2%, so meaning they got 8%, 8.8%, THERE USED TO BE AN AUTOMATIC TRIGGER THAT WOULD LOWER THAT DISCOUNT RATE. THEY'VE ELIMINATED THAT AUTOMATIC TRIGGER AND GAVE IT TO BOARD DISCRETION. BASED ON THIS PERCENTAGE, IT'S REASONABLE TO THINK, I DON'T KNOW IF IT WILL ACTUALLY HAPPEN, BUT IT'S REASONABLE TO THINK THAT PERS MIGHT ACTUALLY LOWER THEIR DISCOUNT RATE If that occurs, it does push our UAL payment out a bit if they lowered it by five basis points. We would look at instead of a $5.2 million payment for fiscal year 27-28, you're looking at about a $7.6 million payment. So it fluctuates. It's something that we absolutely always have to pay attention to. But right now it's looking very good for us in the forecast with the 12% returns. There's a month left in their fiscal year. We won't know probably until sometime next summer what they hit, but it's something that we have to pay attention and actively manage. But it's reasonable to think that the UAL payment might disappear in the foreseeable future.

Can we go to the fiscal year model one slide that you have? So the total revenue drop from 27 to 28 is the removal of the transfer in. And then the total expenditures increase. You still have the transfers out, but you've added another eight million. Why, essentially you're accounting for here a continued unfunded liability payment. I assume.

So in this first model, we have the transfer out for leave about $2.8 million. We have the UAL for fiscal year 28 at $5.2 million. We have workers' comp of $1 million, general liability of $1.5 million, and CIP of $2 million.

Got it.

But UAL stopped in fiscal year 29, 30, 31, and 32. We did not put anything for UAL. It's just the leave payout, the workers comp, the general liability, and CIP.

Got it. OK. Yeah, I think that's, if you go back to that model, Again, what I believe is realistic one month before the year's end is we're trending at or above 12%, which means that we will have an unfunded liability payment for a couple years, and then it will go away, again, assuming that our return is at the 6.8. Now, if the discount rate drops, it's not necessarily a bad thing. That just means our performance has to outperform that 6.5 or 6.3 to maintain the funded status. If you were to model that, that's where you would see a difference because it's showing that rate of return being lower. So I'll stop now so there's other conversation. I'll jump in later. But I think the point I would try to make here is that we need to decide how much we want to spend And of all the things, we could be going into a lot of different areas, and I would encourage us to go into a lot of different areas. But the core decision that's being made today is what is our FTE going to be? We historically set a budgeted amount that we under-hire to, and that under-hire is not as intentional as it should be. And what you have is you have certain departments that might be staffed a little bit lower than they should be. So there needs to be an intentionality around how we want to staff the city by department, as specific as possible, and then higher to that level. If we get to the 7.8, we will run a $6 million structural miss in the current general fund, or 708. If we were to pull down and find that additional amount, and I think it's 670 to 680, we need to be intentional around what that looks like, then we will balance this out. And I think in the long term, the biggest challenge is that unfunded liability. And if, in fact, the return lands around 12%, which it's trending at, we'll have that unfunded liability for a couple of years, and then it will go away. given the existing return. So I think that's what we're deciding today. If we decide that to hire to this amount and run the city at this amount versus a reduced amount in the total headcount or FTE, then I think we don't need additional tax revenue. If we want to hire to this level, then I think we're running a deficit. I think it's a decision we need to make today. I'll stop for now.

Mayor Pro Tembilito.

Yes, I'll be brief. Just echoing what Councilman Gillenhammer mentioned. In my 12 years here, there's always a, we run with vacancies. It's just natural attrition that occurs through retirements and other separations. And it seems like the last three years now we're, we're not really recognizing that in our forecasted budget. This last couple years, we ran with, what, about a 10% vacancy rate? And then we sort of true it up on the back end, and all of a sudden, the budget is balanced. I think we have to recognize the reality on the front end that we are gonna run with a vacancy rate. I mean, I think of the police department, It's very difficult to recruit new sworn officers. And it seemed like we were only fully staffed for like a month at one point. Other than that, we ran between five and 20, a deficit of five and 20 officers that we had budgeted for. And obviously with those kind of numbers, you save a lot of money, although that's not our intent. We want our public safety positions filled. But I think that because we're not recognizing that there's a natural vacancy rate on the front end that maybe we're overstating the deficit. And that's all I have to say about that.

All right, Council Mayor Barrios.

I'm just going to build a little bit on this because I have a document that was produced by the city. This was back in 2024. So because we had been talking about FTEs and kind of where we were historically, the lowest we have ever been in terms of overall personnel was in fiscal year 2018. And that was at seven. This is from 2008 to 2025. But in that time frame, the lowest we've ever been is 710 people. So that's recognizing the enterprise as well as all the general fund staff. So to your point, in terms of being intentional about where we want to be, if the 708 is where we want it to be, then, you know, That's pretty low comparatively. In 2008, just for example, we were at an all-time high of 797 people in the city. I don't think anywhere in this data we've ever gotten quite that high. We were getting close in 2024 and 2025, but I think that has scaled back significantly. So to your point, if we were going to say, this is our new cap, this is where we're going to be, how do we adjust that and spread that out? But that is, for the size of our city, that is also a real banger of a number in terms of providing services to our residents. So I just wanted to give that historical data.

So I'm just going to make a couple of observations. I appreciate that staff has been moving, I feel, very conservatively on staffing. And I know this isn't something that can be done overnight. It's over time. But, you know, we're continually creating more efficiencies. As we adopt better technologies, we can create those efficiencies as the years go by. I'll wait until the sidebar is over here. We're creating continued efficiencies as years go by, and I think that the city manager's intentions are continuing to do that. City manager? Yes, sir. Yes. But again, unless we're going to talk about laying people off, which I know we're not, we can't get there overnight. Another comment about the market. We can't assume the market's going to continue to deliver at the pace that it is. Last night on 60 Minutes, I watched a financial guru who's highly respected. He feels that the market possibly is overheated. It seems like it is to me. And he said there is going to be a crash. I mean, it's not going to continue the way it is, and we have to, you know, We have to plan for the future and the bad times to come as well, because they will return. It's not a matter of if, it's when. So I think this is a very conservative budget, and we have made a lot of cuts. And I think that the staff is doing the best they can with the resources that we have. And I think it's a good preliminary budget. So my comments. So we have two recommendations before us. And there's no further comments. We could entertain a motion of sorts. Anyone wish to go for it? Moved by Councilmember Gutierrez and seconded by Councilmember Dimitriou to approve the two staff recommendations, which are review and affirm the fiscal year 26-27 preliminary citywide budget and the staffing levels recommended, also approving the proposed five-year capital improvement program directing staff to return in June for the fiscal year 2026 budgeted formal adoption. Would that be at the first or second meeting, city manager?

We're going to do our best to return in the first meeting.

All right. Council member Gillenhammer.

JUST A COUPLE MORE THINGS. CAN WE PULL UP THE ACTUAL DEPARTMENT FTE IN THE FISCAL 27 PROPOSED? Yeah, it's attachment four. I don't know if you have access to attachment four. I JUST HAVE, I GUESS, ONE QUESTION, JARED. IT'S PROBABLY FOR YOU. IS THIS, FOR 27 BUDGETED, THE MOST EFFICIENT PLACEMENT AND TOTAL NUMBER OF HEAD COUNT BY DEPARTMENT THAT YOU, OR IS THERE STILL KIND OF DIRECTIONALLY a different set of headcount that you would position throughout the city differently? Oh man, that is a loaded question.

It depends on the people, the workforce, skills, capabilities. What service level expectations does the city council want? What I can tell you is that our workforce is our mechanism which we deliver our municipal services. So city council sets the service level expectations. I will place people throughout the organization where I THINK WE NEED THOSE BODIES. I THINK YOU ANSWERED MY QUESTION.

IT EVOLVES EVERY SINGLE DAY. I THINK JARED'S GOING TO EXECUTE THE STRATEGY OF THE COUNCIL, RIGHT? AND I THINK MAYBE I'LL ASK THE QUESTION FOR EVERYBODY UP HERE, RIGHT? LIKE, IS THIS THE ACTUAL DISTRIBUTION OF RESOURCES THAT WE WANT TO DELIVER THE SERVICE LEVEL TO THE CITY THAT WE WANT, RIGHT? AND I'M GOING TO PICK ONE that I walked through last time I was here. We have our library team at 34. Again, nothing against any individuals within that department. I'm coming from an organizational oversight lens. We have dedicated 34 resources to our library services department, with two of our libraries open 16 hours a week. do we want to resource our libraries in that fashion? And I think, again, what we're deciding on today is we're approving these plans. We're approving this budgeted headcount for these departments. And I think at some point, our city manager is tasked with running the city, but also needs to receive direction around where we want to resource the city relative to the revenues we bring in. as we go department by department, that is an area where I would say we've over-resourced the community impact. And that's just one. I think there's other places in here where I would have an opinion. So as we move forward and motion acceptance of this, I would just ask the question, is this how we want to resource the city given where we're at? And is there anything else we would ask differently or direct differently? I would direct, try to make that direction or at least that suggestion earlier around how we approach this specific department organizationally. But I think that there's multiple opportunities to be intentional with how we're resourcing our city. I'm completely against any element of layoffs. That is not how we do this, right? I think we set a North Star focused target. We help understand how we can build efficiencies. We measure service level impact to our residents, right? And we strategically place our team in a place that's going to provide the highest level service. And we can debate where that is. But if we move forward on this, we're accepting this FTE as placed in this agenda. And I think we could do more with this. And I think what we're putting forward right now is in somewhat like a movement around what we historically have had in the departments. with room to more intentionally understand the investment to service level impact to our residents so that's it before we motion to move this forward oh i'm sorry councilman barrios based on that same slide someone can you pull that back up please

And this is just to emphasize your point. You have seven people listed for the city council. So I'm assuming that's your budgeting if any of us take the, this is small potatoes in this particular group, if we take the monthly stipend and if we're taking benefits. Well, I think five of us are not. And yet we still have a budget in there for the next three, two, three years. So, and we haven't, and we, I know not all seven of us took, you know, were part of the 2023, 24, 25. So to your point, it's like, how are we looking at this stuff? That's stuff that we know ahead of time or that we've known. So I guess that's, and then my second question was as to the motion itself. So I'm sorry, you want to answer the first one?

Yeah, no, sorry. I mean, this is schedule of positions. We put seven because there are seven council members. The budget reflects the benefits that you select. Some take health, some take dental, train. Anything else I'm missing there?

Yeah, so if you decline the stipend and decline the health benefit, it's not included in the 109. I'm sorry. Let's say you decline the health and the stipend. It wouldn't be included in the budget. It's just that's the reason we back out elected official and only focus on truly staffing, which is the 708 position.

Thank you, because I was confused by that. And just specific to the actual motion that you've made, Mr. Mayor, is specific to what Councilmember Gillenhammer and Councilmember Bilodeau said. Are you moving this forward without having any changes in terms of the vacancy rate that both of them noted? Because I think that that would change what our final budget is.

The motion is made by Council Member Gutierrez just to approve the staff recommendations as they're listed. And that includes the 780 proposed, I'm sorry, 708 full-time equivalents.

So I'm asking if the maker of the motion would entertain adding in a vacancy rate.

I don't see the vacancy rate. And in the staff report, it says- I think that was the point, that there isn't one. There isn't one. Right. And you want to make certain that we have one in there?

I think what my colleagues are saying is that it's an assumption based on something historically we have always done that ends up balancing our budget in the end, but we're not even putting it into our budget right now.

Do we even know those numbers right now?

And again, it changes every single day. We know the numbers, right? It ebbs and flows, ,, national attrition, or just regular attrition. Sorry, it's getting late. I can't think. But what I'll do is go back, take a look at the current vacancies that we have. And if there's any further position eliminations or adjustments that we need to make between now and June 9, I will commit to doing that, rather than just budgeting 100% across the board for every position.

No, that sounds fine.

I think some of them are already considered half percent, 0.75% based on how many months out of the year. we expect them to work. But we'll dust it off. We'll take a good hard look at it before you see it again June 9th.

Just because Council Member Bilodeau absolutely nailed it, and that has happened every year since I've been here. And it's been used as like a, oh, guess what, surprise, instead of being used intentionally of like this is something that always happens, let's budget with it.

Can I just add something for clarification? So you're absolutely correct. We used to have a vacancy rate that was built into the budget when I first came here. And what I notice is nobody is monitoring that vacancy rate. We usually put about three and a half to about 3.5 million to 4 million as a vacancy saving in the budget. But no one was monitoring that. So when we true up at the end of the year to see did we meet that vacancy saving and we have never met that vacancy saving. So that's the reason we switched the model instead of building in a vacancy saving, we actually freeze the position or completely take the budget out of that line item so that it's being tracked and monitored in that sense. Because when you build in a flat dollar amount that is sitting in the bottom of your budget, nobody's monitoring that in the department or in finance. Everybody forgot about that line. So when I try to chew up the budget at the end of the year, I'm like, what happened to my budget? I'm like, I don't have $4.5 million in savings. Because people were using that money. They're like, oh, I have savings. No, you did not. We backed that out. So now we actually take the action and backing that out of the budget ahead of time already. That's the reason we changed that model about two years ago is because no one was paying attention to that vacancy saving. And that vacancy saving float between department throughout the year, so it's impossible to track. So that's why at the beginning during budget development, we sit down with the department and the city manager and say, okay, here are all of your vacancy. Which one do you really need and which one can we take? So in a way, we have already taken that vacancy out. And what we budget is what the department say, this is what I truly need. So, yes, throughout the year we're going to have that FNLL people come, people go. There's no way of predicting that. And at the end of the day, when we don't have staffing for it, we bring in a consultant to help backfill some of that work. So really, even though we didn't spend the money and salary... Yes, or overtime. So we would pay overtime or pay a consultant to do that that we didn't budget for. So whatever that vacancy is amount, we use it for that contract. So yes, we can go in and factor a 2% vacancy But again, the tracking of it is going to be very difficult because our budget is so tight as it is right now. If we put in that vacancy, that limits our ability to get consultant to come in to help with emergency work or backfill because we don't have staff. We used to have staffing to help cover some of that backflow, like in my office. Right now, if I'm out, that's it. You're done. That's it. Or if Michelle is out, I'm not going to be able to bring the budget on June 9th because we're it. There is no backup for anybody in my office. If anybody's out, the operation is going to stop for the time being. So that's the challenge that we have to balance.

I'm not trying to fry you guys. I'm really not. I'm just trying to have a really good, thorough, robust conversation like we've never had before, because all these things need to be worked out and thought through. So thank you. I really appreciate that.

And Tron, just for clarification, the 45.55 that we eliminated, FTEs, and then maintaining those 10 frozen, those 10 frozen are not budgeted at all, correct? I just wanted to make certain of that. All right.

No, good questions. So, Council Member Gillenhammer, briefly.

Thank you, Mayor. I appreciate you entertaining another one. I guess what I just want to summarize is I think a healthy running organization has a very low vacancy rate with a very accurate distribution of resources to where the need is. So I actually, I think we've actualized a vacancy rate for years and we've accepted a vacancy rate, but I don't think Our current FTE is structurally in the places that provide the highest level of service to the residents of Orange. That is our problem. And I think we need to go into the headcount by department and be super clear with that discussion from a directive sense and really measure the level of service. And you do that not just with a number of people, but you do that with the inefficiency measurement and an impact to residents. And I think we need to do that. And once we do that, and once we direct headcount allocation at an acceptable service level, then we'll really know where we're at financially and what we need to go back to residents and ask for. Again, if we were just to say total number, we've probably been operating around 670, 680 generally with our vacancies over the last couple of years. If we truly budget to this number of 708, which we've never really hit our budgeted amount in past years, then we will overspend what we take in. But I think our problem is not, we need a better allocation of headcount. We need a deep dive there, and we need to be clear with that piece. And then we need to run as low a vacancy rate as possible. In fact, we need to have a talent pipeline ready to go for promotions within those departments. So anyway, I think that's the issue that I think we need to figure out. But if we don't and we go forward, I think it's reasonable to continue to suspect there will be a vacancy rate and that will be a tailwind to overall cost.

All right, I'm going to call for the vote. All right, that's approved six to one with Councilmember Gilenhammer voting no. Councilmember Gilenhammer, I just say no. We appreciate your input.

Mr. Mayor, point of order.

Yes.

We have one item at the very end, number 11. And we have two people in the audience who've been waiting for this one. And it should go really fast. And I'm wondering if we can move that up on our agenda.

I'm up for that. Does anyone else, anyone oppose that idea?

No, I do. We had an item at the beginning of the agenda that was for readjustments. So we had the opportunity then.

To which I put my name down and the mayor did not call on me, which I noted. Oh, all right. And it's just this one. Can we move this one?

Yeah, I'm just making a point that I wasn't aware of that if he skipped you, but there was a point where we could have done that.

And I did try.

No, she's correct. I looked up and down. I didn't see any movement, so I didn't look at the screen. So it was my fault. It's fine. All right, 11.1, introduction, first reading of an ordinance amending the Orange Municipal Code relating to the tobacco retailer permit program regulations, ordinance number 05-26, and brief staff report.

Mayor, City Council, so the matter before you is to remove two items that were slated to take effect on July 1st of 2026. that was in relation to the tobacco ordinance that was approved back in June of 2025. Those specific removal of those sections is the sale of electronic smoking devices and related paraphernalia and accessories. And then the restriction of tobacco sales between the hours of 2 a.m. and 6 a.m. And then the third item was to provide clarity on the transfer of a tobacco retailer's permit EITHER BETWEEN RELATIVES OR OTHER MEMBERS WITHIN THEIR BUSINESS ORGANIZATION OR A BONIFIED NEW BUSINESS OWNER THAT THEY'RE ESSENTIALLY SELLING THEIR OPERATION. THOSE ARE THE THREE MATTERS THAT ARE BEFORE YOU. AND WE HAVE HAD MEETINGS WITH THE BUSINESS OWNER, LOCAL BUSINESS OWNER, AND THEN TWO REPRESENTATIVES WHO PETITIONED THIS REQUEST. THAT CONCLUDES MY REPORT. I'M AVAILABLE FOR ANY QUESTIONS YOU MAY HAVE.

THANK YOU. ANY QUESTIONS OF RAFAEL? Okay, we do have several speakers. First one is Bob Bisla, followed by Jaime Rojas. Is Bob Bisla still here? Okay, are you Bob? Are you Jaime? Jaime, come up please. Next will be Mo Abuelian.

Good morning, well not good morning, good evening Mr. Mayor and Council Members. As the City Manager mentioned, it's been a long evening. My name is Jaime Rojas, I'm here with the National Association of Tobacco Outlets and I'm here tonight in support of today's tobacco ordinance update. I also want to thank the City Council, the City Attorney, the City Manager and staff for listening to our local retailers and taking the time to make thoughtful corrections that support responsible businesses here in the City of Orange. This ordinance is important because it recognizes simple reality. Local convenience stores, gas stations, and neighborhood retailers are small businesses that serve communities every day. Many of these businesses operate on thin margins, employ local residents, pay local taxes, and provide essential goods and services to Orange residents. We appreciate the city is removing restrictions that would have created unnecessary economic impacts on responsible retailers, including those limits on tobacco retailing between 2 a.m. and 6 a.m. For many retailers, especially those that operate extended hours or 24 hours, these types of restrictions can affect not only tobacco sales, but also broader customer traffic and general merchandise sales. We also strongly support the ordinance's clarification on transferability of tobacco retail permits when a business is sold or is transferred at the same location subject to city approval and compliance requirements. This is a fair and practical approach. It allows responsible business owners to preserve the value of their business while ensuring cities maintaining strong oversight and enforcement authority and the ability to deny transfers where there are violations or noncompliance. This ordinance is not weak in public health protections, but does the opposite. It preserves the city's ability to regulate, enforce, and hold retailers accountable. At the same time, It provides fairness and clarity for responsible local retailers who follow the law. For those reasons, we respectfully urge City Council to support the ordinance tonight. Thank you again to the Council and staff for your hard work, your responsiveness, and your support for small local businesses here in the City of Orange. Thank you for your consideration.

Thank you, Jaime. Following Moe is Floor Rios. Moe? Is Moe here?

Good evening, Mayor Slater, Council Member. My name is Moa Abu-Alayan, and I'm here today to express my opposition to a ban on vaping products. While I understand the concern about the public health and youth access, I believe a complete ban may not be the most effective solution. A ban may seem like a simple approach, but it can have unintended consequences. Many adults rely on vaping products as an alternative to traditional cigarettes. Removing these products may lead some individuals to return smoking tobacco, which is widely recognized as more harmful. In addition, a ban may encourage consumers to purchase products from neighboring area or unregulated sources, reducing local business revenue while making it harder to ensure product safety and age compliance. I also support the removal of the restriction prohibiting tobacco sales between 2 a.m. and 6 a.m. Retail should have the flexibility to operate within normal business hours and meeting customer demand as long as age verification laws are strictly enforced. Thank you for your time and consideration.

Thank you, Mo. Following Floor, the next speaker is Liliana Padilla. Is Floor here? All right, following Liliana is Brian Lamb.

Good evening, everyone.

My name is Liliana Badilla, and I represent gas station retailers.

First off, I want to thank the City Council for reconsidering provisions that will negatively impact our business and our community. We have proudly operated as tobacco retail for many years without any incidents.

The restrictions being proposed do not stop customers from buying these products. Instead, they simply push customers away from business like ours and towards other retailers with fewer restrictions. Thank you.

Thank you very much. Thank you. Oh, are you? Brian. Oh, OK. Come on up, Brian.

Hello, good evening mayor and council members. It's like I said, it's been a long night, so I'm trying to keep my point short and concise. My name is Brian Lamb and I'm here on behalf of the California Fuels and Convenience Alliance. And I just want to thank city council and city staff for all the diligent work on this ordinance. Just real quick, going over the previous ordinance, it just introduced this kind of detrimental combo of just not the best situation for our retailers. You know, it diminished our current financial prospects, future retirement possibilities were essentially being eliminated, and it also kind of created this environment that would be hospitable for the very illicit market that you're trying to curb. But I appreciate the thought and consideration that's gone into this new ordinance, and I'm here to speak in support of it, and I do hope that the council will PRIORITIZE THE WELL-BEING OF THE COMMUNITY AND THE LOCAL BUSINESS COMMUNITY AS WELL AND VOTE IN FAVOR OF THIS ORDINANCE. THANK YOU FOR YOUR TIME AND CONSIDERATION.

THANK YOU, BRIAN. THANK YOU ALL FOR HANGING IN TONIGHT. ALL RIGHT, I'LL BRING IT BACK TO THE COUNCIL FOR DISCUSSION, QUESTIONS, OR MOTION. WE HAVE A MOTION CURRENTLY FROM COUNCILMEMBER BARRIOS. WE HAVE A SECOND FROM COUNCILMEMBER DEMITRIOU. COUNCILMEMBER GUTIERREZ.

I JUST WAS HOPING STAFF could explain. I recall, and maybe even Council Member Barrios could help, because I know you had been speaking with the convenience store vendors and whatnot in the franchises. I know that they asked about the hours of operation. I recall that very vividly. I don't recall the transfer of the permit, I'm okay with that, but I do not recall anybody speaking about the vaping devices. Is that just something new that came up? How did that come up? I'm curious.

Council Member Gutierrez, I can actually answer that question. Thank you. We received a letter from the various groups with different requests, different requests for consideration. and the staff worked collectively and saw input from the community advocates and also was able to come up with best practices to allow for the removal of the restriction of tobacco sales between the hours of 2 a.m. and 6 a.m. There were also public speakers at the last council meeting regarding some of those concerns. So that is why those considerations.

I remember the 2 to 6 vividly. I just don't recall the vaping item. And I don't recall the transfer of the retailer permit. And that's why I'm curious. So these were just additional things that were asked later on, not spoken here in chambers?

I think besides what was spoken and then the letters that we received from the various advocacy groups was that there was a lot good in terms of vaping where it was a disguised or hidden vape or something where it doesn't look like it's supposed to look versus what is actually still legally permissible in the state. Which is not flavored vapes, but regular Non flavored vapes are still legal and that we were going to allow those because they were legal in

legal items and rafael would that be easy to verify like or when you go in and do your checks will you be able to tell these are your legal vapings or these are your unflavored because as a school teacher especially when i see those middle schoolers and high schoolers i see them vaping and not with things that you would think that is a vaping item so it it concerns me

Thank you, Councilman. So luckily, the state of California in December of this year passed a list of permitted non-flavored tobacco that allows us to be able to distinguish what's displayed and what can be legally sold. And those things that are not on that list would otherwise be deemed illegal and can be subject to enforcement action.

So we won't be seeing any USB drives or pins or things like that?

So the hope is that retailers conform to the law, but we have a number of enforcement measures that are built into this ordinance and staffing that will be rigorously going out to every one of these locations and working with our law enforcement partners to enforce the law as it's written, aside from these recommended changes.

And the tobacco retailer permit, that type thing, it's almost kind of like the alcohol license, right?

It stays with the business or whatever, or whatever it was.

Yes? Something to that nature. So I'm OK with that. It was just the vaping thing. I'm like, I don't recall anybody ever speaking to that. So I just needed clarification. Thank you.

All right, we have a motion from Council Member Barrios and a second from Council Member Dimitriou. And thank you to both of you council members for stepping up and offering to work with the retailers and work with staff and come up with a reasonable compromise and solution. I will call for the vote.

Before we take the vote, can the maker of the motion please read the ordinance title?

Yes. Introduction and first reading of ordinance number 05-26, amending the Orange Municipal Code relating to tobacco retailer permit program regulations.

Please vote. Approved unanimously. All right. Going back to item 10.2. Review and discuss draft resolutions and ordinance documents relating to a proposed one cent sales tax measure, transient occupancy tax measure, and the contract with Orange. And staff has presented... Six resolutions for us to consider. I'll read them in the order that staff has listed them. And then we can go one by one with them, discuss them individually. First ordinance resolution is 11670. That has to do with what a sales tax resolution would look like. Next one is 11672. And that has to do with the details of who would be signing on to the ballot measure. Item 11690 is the transient occupancy tax resolution. And the next one is 11691. Again, who would appear on the ballot in support of that? 11674 will follow. And that's just a staff item dealing with rebuttal arguments. It's just a procedure. And then lastly, 11689 would be the proposed contract with Orange. So starting with 11670, the sales tax, just to sum up, I think that where we're at with this is, I thought the last time we were clear that there was a consensus on 10 years, but the city manager wasn't exactly clear on that. So I think what we've kind of narrowed it down to is until ended by voters, 10 years or possibly 20 years. So I think those are the things on the line. And Jack, did I sum that up or did you want to add anything to that?

No, that's correct. Yeah, for the one-time sales tax measure, there's really two items that we're looking at, and you had mentioned it, the duration. Currently, typical language you see is until ended by voters, or we could say expiring after X amount of years. So whatever the council would like incorporated, staff can include that both in the ballot as well as the ordinance. Lastly, we have the independent oversight committee that's incorporated as a part of the proposed ordinance. And we have 12 members that are listed on there. I can go into how we have it detailed right now, but we're looking for feedback if the council's okay with moving forward as presented.

One clarification I wanted to ask about the independent oversight committee is it's suggested that a representative come from each council district Would those nominations be then made by the council members representing those districts for a representative from their district?

Correct, yeah, that's the intent of it. Overall we have 12 members, so you have six from each voting district and one at large member that would be selected by the mayor.

It doesn't specifically say that, so I just wanted to be sure it was clarified.

We can clarify that in the language, so it's certain that it would be selected by a council member representing that particular voting district, and the person would have to reside in that same voting district.

Or nominated by the council member. Or nominated. Thank you. All right, Council Member Barrios.

We had talked about or I had mentioned this last time in terms of things that I wanted to see along with this. And I just don't know if this is the right place, Jack, so please direct me that I wanted specifically a fund to be called out for this for. Community protection. I don't have a great fund marketing name for it, but specifically that 1% to 3% of whatever we bring in be put aside. We were just talking about the budget and what the potential looks like for next year, which right now is looking pretty grim. And if we're going to raise this money off the backs of our residents, that we put aside basically a catastrophic fund for our residents. Not unlike the rent stabilization program we already do, but something of that nature that either this group helps meet it out. It's something under the city manager. Maybe it comes back to the council and we set parameters around it. But I don't know if it's something that would go in this resolution. My fear is that if it doesn't, then it doesn't, and then, you know,

I mean, it would be a small amount of a potential sales tax revenue can come in at $37 million. But one thing we have to be cautious of is if that were to trigger any sort of two-thirds requirement because you have some sort of dedicated revenue. If the council would like one thing we could possibly look at, I know the next item is a potential vehicle incentive program, which would set aside existing revenues contingent on any sort of district tax being put on the ballot by the council and approved by voters, setting aside money specifically for that program. So staff can look if the council would direct to develop a similar type of program for that purpose, contingent on any sort of district tax being placed on the ballot and approved.

Okay, that's very helpful.

I know that you brought this up last time when we were discussing proposed contract with orange terms is, and that's the last resolution is that Jack possibly where that could go?

Yeah, two areas, right? You can either write it into a Section 10 Community Catastrophic Assistance Program into the contract with Orange, or you can fold it into the spending plan as well, right, which will be annually evaluated by the Independent Citizens Oversight Committee with a recommendation of the City Council. So there's two homes for it. Now, where do you decide to put it as a prerogative of the City Council? Is that helpful?

That's very helpful, so we could bring it up in that part of it. Okay. Absolutely. Yes, thank you.

Okay, Council Member Dimitri. Following up, I'm sorry, Council Member Barrios, but an undefined community fund is just spending money right away before it's even passed, and there's no definition. So is it to put a new roof on a dilapidated building? or is it to pay for legal services for somebody? It's undetermined and you're already, and this is the problem where it comes into with the public is we are not in a position right now where we should be saying, We're gonna spend it right now on this. We need to first, if it passes, is to allow this oversight committee to really have their power, use it appropriately, fund everything appropriately, get the city back on course where we need to head before we start designating specific amounts of money into some unknown community fund. I'm just not for it. That is a real problem because we have to show the public that any new monies will actually be fiscal guardians and proceed differently than the past to ensure the public's trust is built again with the fiduciary of the city. So I'll leave it at that.

I don't think this needs to be part of this discussion necessarily. The first resolution is just dealing with the sales tax measure itself and basically the length of time for it. Actually, so, Council Member Barras, you would like to make a motion, and we do have one public speaker as well. Would you like to? Okay. Adrian Gladson.

Mayor, members of the council, I've been observing you for the last hour or so and I'm flabbergasted on a lot of it because I put comments on the resolution 11689 dealing with the contract with Orange. which I heard from Mr. Peterson, excuse me, because I haven't talked for a while, at the last meeting, and it actually kind of struck me funny, because we really have to go reinstate a contract with Orange on how we're going to be fiscally responsible. So I go, okay, well, let's take a look at the language. So I gave you some suggested language, But since words matter, but they kind of don't matter, and maybe they really aren't getting followed, and when they're in resolutions or whether they're in code, maybe it isn't worth my suggestions. But my concern with that particular, Contract with Orange is a contract with 140,000 people that live here. It's a contract with us. It's a contract with the people. So I threw language in there for suggestion for consideration with our city attorney's office because they're fabulous. They're going to take some of those words and bring them back. I don't know if it matters because I'm, Council Member Gillihammer said a bunch of times with the budget, we need to spend money and we need to, I actually agree with a lot of what he was sharing and pointing out, I don't know where we're going. I don't know what we want to be. What does Orange wanna be and what does Orange wanna spend money on? What is our future? Because I don't know what it is. And we've heard discussion and I got 40 some sections later about we want to keep our vacancy rate low because we don't want people to leave. Well, how do you do that when you don't know what you want? What does Orange want to be? So I wondered maybe I should just leave and not stay here. I put my card in. But I want to do the right thing and offer my input, whether it's going to fall on deaf ears or not. But that's really what all of us out here in Orange are struggling with. And that's the leadership we're expecting to see and hear. But I can't put my finger on what you seven want to do.

Thank you, Adrienne.

So that will help us. And that language, take it or leave it. Thank you.

Council Member Barrios, what is your motion?

Do I need someone to second it first? Yes.

Oh, I think someone, we need to know what it is before someone can second it.

I guess not. OK. My motion is to put forward a 1% sales tax, a term being until such time as voters end it. with an independent oversight committee and all funds benefiting Orange residents be adopted. Or, I'm sorry, Orange residents. Do I need anything else on that specifically?

No, that's what we're looking for.

So tell me what I got to do.

We have a ballot question ready to go. The one thing we're looking for is just, and fortunately it would end up being, because there's a 75 word limit, until ended by voters or expires after X amount of years. It's the same word count. So if it's until ended by voters, that's on...

Until ended by voters is what I'm putting forward as my motion. So 1% until ended by voters with an independent oversight committee.

Okay. That's been seconded by Council Member Dimitri. I'm going to offer a substitute motion. My motion is as staff recommended. However, the term is to be for 10 years.

Second.

I'm sorry, for point of discussion? Oh, actually, I can't really have a discussion, yeah.

Council Member Dimitriou, I'm sorry, it's a substitute motion.

There's a factual error, though. The staff has not recommended 10 years.

The resolution as it stands simply just has the letters XX to allow the council to deliberate and decide on the amount of years or the duration that is proposed.

So what I'm saying is it's what is presented with that blank filled in with 10 years. You're proposing 10 years. Thank you. Correct. And I heard a second from Council Member Tavalex. I will call for the vote. No discussion on it. OK, that fails because we needed five votes. So we will go with the motion by Council Member Barrios. And now we can have discussion if anyone wishes.

Mayor? Yes. The reason I want 10 years is I think all of us intimately know that councils can get through the years laxadaisical, and the reason I want 10 years is I think it keeps future councils feet to the fire that they have to continue developing economic development because there's something in the water in orange that I think they'll just sit around and say, well, that's forever until somebody says it's not forever. And so that's why I feel very strongly that it's 10 years. I can't vote for a 20-year tax increase. Thank you.

Or I mean not 20 years until voters end it.

Sorry, until voters ended. I would rather just do a tenure. Thank you. Council Member Gutierrez.

I also, having heartburn with until ended by voters, but I do understand that 10 years might not get us where we need to be. And I would be willing to I mean, I don't know. I don't want to do 20 either. But I would think that maybe a 15 would be a medium that we could meet in the middle, Council Member Tavalares. Again, I don't feel comfortable until voted, ended by voters either. But I don't think that 10 might be enough. And I'm thinking maybe 15 to kind of meet in the middle. So just think about that. And maybe I'll do a substitution. Thank you.

For the record, I don't think it's enough either. But I think for, in terms of, again, we're not going to be on this council in 10 years, and I don't know who's going to be. But like I said, we've seen a lot of recycling on this council. If I'm doing a little plug for the lifetime ban. But... People can get lazy. And in this city, we need to keep our foot on the pedal. That economic development is foremost that. This council, no matter who sits in these seats, has to focus on. And if they're sitting on an income of a tax increase that is on there until voters decide they don't want it, that will cause council to be lazy. I understand now, after talking to my colleague here, that the tenure is gone. I understand 15 years I just I just think that people are gonna get lazy and I just I don't like it we we live in a small C conservative community where right now the economy's foremost it's gonna be hard for people to do this and I think putting a 15 year on our residents is a little burdensome at this time Not that I don't think we need the money. I definitely think we need the money.

I mean, since 10 years is off, again, I mean, it's either until ended by voters or come up with something that's more reasonable since 10 years is off. I don't think if we do less than 10 years, it would be.

Make a substitute motion.

I know, but I don't know exactly where I want to go. I'm just trying to have a conversation, like trying to gauge my audience here. So I don't know, colleagues. I agree with Council Member Tivolaris. I don't. Until ended by voters is just too much to ask for. That's my thing. So.

I'd like to offer a motion, if possible.

Mayor, we did have a substitute motion, so now we need to vote on the main motion before you can make another motion.

Okay. Council Member Barros?

And as a point of clarification for anyone in this pain, can I, if I accept somebody's potential change, can I do that? And since I'm the holder of the motion at the moment.

You can accept an amendment if the second also accepts the amendment.

Okay. Or if someone else seconds. Thank you. So my direct question to my colleague, Council Member Talaveras, would you accept, I think I already heard you say you would not accept 20. Would you accept 15? No. All right. Then moving on, let's go ahead and I guess call the vote.

We will call a vote. Motion fails with only council members Barrios and Demetria voting in favor. All right, so for, can we start over with another motion?

Chair, why not? May I ask, can I have a clarifying question to the city attorney? At what point do we, if we're not able to reach agreement, At what point do we make a declaration for municipal bankruptcy and start that process with the federal courts?

My understanding of, not the attorney, although I slept it all in last night.

I think we need a timeline and spell it out at this point.

Yeah, it's something that we'll have to look into, right? My understanding of considering bankruptcy is the city cannot pay its bills within 60 days. We're not at that point yet, depending on the fiscal model, headcount, et cetera. But that's something we can certainly hone in on with the timeline and return at a future meeting if you'd like. Again, you have until July 14th to put this item on the ballot. It is late. I don't know if the motion was to adopt the resolution right now, putting it on the ballot, or just setting the term, recognizing the late hour in the evening and that heavy agenda that we had. If you'd like to continue it, that's totally appropriate. We can do it to the next meeting.

Can we bifurcate it later?

Excuse me?

Can we bifurcate it like that and split it up between putting it on the agenda for the amount and then pick the term later?

I mean, council prerogative. It's up to the mayor, right? If you want to take a vote specifically on, well, no. Once you put it on the ballot, you put it on the ballot. So if you take a vote, sorry, if you take a vote to put the sales tax measure on the ballot, you must have a term. That said, you can take multiple votes on the term and then a vote on the resolution. Okay. But you have until July 14th per the Orange County Registrar of Voters to make the decision.

So my frustration is that the last council meeting, I distinctly remember we just voted to approve 10 years. So I don't know why actually we're even voting on this again. But I'll just add that You know, I really feel that 10 years is a compromise. The last time we put this out, it was only for a half a cent. Now we seem to have a majority or at least five votes that want to approve one cent. That's great. Honestly, I think that we're shooting ourselves in the foot if we go for more than 10 years, because I don't, I think the voters are going to be happy with that. I think they want to see us prove ourselves. This council isn't going to be here in 10 years anyway. It's time for, you know, have we done our job? Have we done the contract with Orange, and we spent the money as we said we were going to spend it, then they can always, 10 years from now, say, we still have a problem. We have been spending the money correctly as per our contract with Orange, but we still can't make it. Our economic development hasn't improved enough, whatever. Who knows what it's going to be like in 10 years? But I'd really encourage my council to consider, as we proved at the last meeting, going with 10 years, so I'm going to make that motion again.

Mayor, you can't. You are not on the prevailing side. The only one that can make a motion would be Gillinam or Barrios or Bilodeau. Okay.

All right.

I'll make a motion. What the hell? So we have one council member says we need the money, doesn't want to vote for anything but 10 years. Another council member that says we need the money and she wants more but will only do 10 years and won't do anything else. But I don't understand any of this because I'm very confused by the fact that everybody agrees that for the last year or two years that we're struggling, can't pay to keep police officers, we're going to have trouble starting to fund our fire department. we're back at indecision and inaction. So let me just try and throw something out. How about 1% for 12 years? That's my motion.

Would you be amenable to add on, Council Member Dimitriou, that we ask the voters if we want to extend, very much like what the mayor was saying when he wanted to do his 10 years? Or do you want to just stop it at 12?

I think at 12, and here's why, is that whoever is on council, as this comes to a sunset, they can go through the same damn pain we're going through with having discussions and indecision and inaction. And then they can look at it because we don't know exactly where this city will be in those years. Perhaps we find some secret oil reserve or we find gold out in the Grohalva Park whatever it is, so let's leave it on the future for those folks to have the discussion, and we don't know where we'll be at then, but I think at this point, my motion is 1%, 12 years, and leave it at that.

And it's also been explained to me by the city attorney that we can't bind the hands of a future council, so that's something that they'd have to take up.