Finance Committee - Regular Meeting

I'm gonna ask in person staff, to introduce themselves.

Good afternoon or good evening. Sean Murphy on behalf of the city attorney's office. Sergio Aguilar, deputy finance director.

Peter Kakos, interim budget manager.

Good afternoon or good evening. Michelle Davis, housing and human services director. Good evening. Hello. Miranda Evans, deputy director for community and economic development.

Good evening. David Garcia, public utilities general manager.

Hi. Nathan Mustafa, interim public works director.

Brian Sinteria, public utilities, assistant general manager of finance and administration.

Good evening. Steve McKinster, Fire Chief.

Evening. Lee Withers, General Services Director.

Good evening. Pamela Gallera, Parks Recreation and Community Services Director.

Good evening. Robin Peterson, Museum Director. Evening. Prasad Mahalia, Deputy Chief Innovation Officer.

Evening. Colleen Torres, Deputy HR Director.

Okay. Thank you all. Let's stand for the pledge of allegiance. Can we please have the inclusion statement read?

Pursuant to the city council rules of procedure in order of business resolution, the members of all boards and commissions and the public are reminded that they must preserve order and decorum throughout the meeting. In that regard, members of the boards and commissions and the public are advised that any delay or disruption in the proceedings or a refusal to obey the orders of the board or commission where the presiding officer constitutes a violation of these rules. The city of Riverside is committed to fostering a workplace that provides dignity, respect, and civility to our employees, customers, and the public they serve.

Do we have anyone wanting to participate remotely?

We do not have anybody wanting to participate remote.

Thank you. Can we do a roll call please?

Commissioner Ira?

Present.

Commissioner Bello? Commissioner Roton? Present. Commissioner Hutchins?

Present.

Commissioner Thomas? Commissioner Ward?

Present.

Commissioner Benavides? Commissioner Chernikov?

Present.

Commissioner Lagnar?

Present.

Commissioner Scott Coe? Chair Williams. Vice Chair Vandenberg.

Present.

We have quorum.

Thank you. We will now open the phone lines for public comment.

Public comment is now open for this item.

Call (951) 826-8688, and follow the prompts to access the meeting. To request to speak, press 9. When called to speak, press 6 to unmute. You can also join via Zoom. The meeting ID can be found on the agenda.

Secretary, do we have any callers?

No callers.

Okay. I do have a speaker card.

Can you put that first page up? Thanks, you guys. I wanted to introduce myself today. My name is Earl. I've been coming to the city council meetings for over twenty years. I wanted to go through a vendor's list. I got back this vendors list from the city of Riverside. It's providing services to vendors in excess of $5,000 It took me almost an hour to add it up. It's $38,000,000,000. 38,000,000,000.

Let that sink in for a little while. $38,000,000,000. It took me a long time to get it. Patricia and the city council was not too keen on giving it to me, but I got it. I wanted to go through a few of them though that really concerned me. First one on the list, I asked for clarity from the city clerk's office. I don't know what she's thinking, but she's not giving me clarity. I have 32 emails right now in there that she's not responding. I'll say the right way being truthful. She's sending me back to the website.

The records are not on the web site. The portal, it's all fake. The first one I wanted to say right here, Riverside African American. Now I have a problem with this one you guys. It says $13,500 I've asked her many a times, and I'll say her name is Carmen So to.

I got emails right now, what does that mean? Riverside African American, I took that as every Riverside African American in Riverside getting $13,500 Now she's gotta clarify that with me. I've been nice to her, now she just trust me, I got emails galore. She's not answering. Now the next one I wanted to talk about, like I said, is $38,000,000,000 under Joe Biden.

I have pages you guys, pages. Can't even you can't even imagine who's on here. Now I wanna go down to the next one. It says Riverside City Treasurer. Now we provided the city provided the Riverside City Treasurer $911,000. Now we're just money laundering back and forth. I understand the budget is $3,000,000,000. It doesn't add up, guys. We spent $38,000,000,000 on vendors in three years, so it doesn't add up. I've already talked to the city council.

I mean, the money is coming straight in from the ACH, which is the automatic clearinghouse, digitally wire transfers. Now the budget has to be audited. The feds will come in here eventually. I've already told them this, and right now it's just so corrupt. We got so many problem. I could go on for days, guys. I know I'm out of time, but you guys have a blessed day. Okay? Thank you very much. Thanks, Mike. Enjoy your guys' pizza.

Can I please get a motion and a second to approve the consent calendar? Anyone? Second. Thank you. Was

the second for commissioner Lechner? You may begin voting. Motion passes unanimously.

Thank you. First up tonight is Deputy CEDD director Miranda Evans for a report on the economic trade compared to other cities. Welcome.

Thank you so much. Good evening, Budget Engagement Commission. My name is Miranda Evans, and I have the privilege of serving as deputy director of community and economic development. I'm joining you this evening in response to a referral the commission made inquiring about the export economy in Riverside, and in response have compiled some interesting and what I like to think fun data to share with you this evening. I do want to know up front while the commission requested city level data, this data are collected and derived through federal methodology.

Export data are compiled by matching export shipments that are reported on federal export paperwork with zip codes that define Metropolitan Statistical Areas or MSAs but not individual city level data. Are also strict confidentiality rules and detailed statistics that happen below the metropolitan level often can't be published due to privacy rules to protect business information. All of that to say what we have at the most granular level data available is what we have for the MSA level, and that is what I am pleased to be able to share with

you

tonight. And in preparation for this meeting, I also conferred with an international trade specialist with the US Department of Commerce as this truly is their area of expertise. Why is this important? Exports drive our regional economic strength by supporting local jobs, expanding markets beyond The United States, and attracting global investments, all of which are core areas of focus within our city's economic development strategy. With this MSA perspective in mind, our city is located in the Riverside, Riverside, San Bernardino, Ontario MSA, and that is the thirty fifth thirty sixth, excuse me, largest exporter among US metro areas.

This ranking is significant because it places this Inland Empire MSA among the nation's most significant export hubs, positioning us to compete with much larger MSAs, which I'll share with you, and also reflecting the diverse strength of our manufacturing and logistics sectors here in Riverside. This slide shows the top 10 MSAs in United States in ascending order with the Riverside MSA shown at the top for comparison. 2024 data is the most recent this time and 2025 data will become available before Q2 of this year. So this shows you Houston, The Woodlands, Texas MSA has 180,000,000,000 and they are the leading MSA in the entire country. Followed by New York, Newark, New Jersey Corpus Christi, Texas Los Angeles, Long Beach, Anaheim and I'll share and we'll get down to more California and state specific data next, followed by Chicago, Naperville, Illinois, Dallas, again, in Texas, Miami, Fort Lauderdale, West Palm Beach, Florida, MSA, El Paso, Texas, Detroit, the there you see Riverside, San Bernardino, Ontario, MSA in California at 5,800,000,000.

This gives you a specific look at California and leading California MSA export rankings and values. This slide really highlights the regional competitiveness in global markets of not just Riverside or county alone, but the broader economic footprint of the Inland Empire and the strength of California as a whole. So this includes manufacturing, logistics, distribution, agriculture, and more. And export success, it really supports our local employment, higher wages, and economic resilience. So here you see the Los Angeles, Long Beach, and Anaheim MSA.

I have their ranking there in parentheticals. They ranked four in the entire nation, followed by San Diego, Chula Vista, and Carlsbad MSA at nineteenth nationwide, San Francisco, Oakland, Fremont, twenty first. Closely on their heels is San Jose, Sunnyvale, Santa Clara MSA, and there you see Riverside, San Bernardino, MSA. And this trend, just to focus more on our particular MSA, has continued to grow and increase year over year, so that is a very positive trend that we're keeping an eye on. We are able to drill down a little bit with the help of the Department of Commerce in taking a look at data on a county level.

So we have the MSA as a whole as I've described and then for Riverside County, we're able to break it out in San Bernardino County. So that gets a little bit more granular for you. So Riverside County, we have $4,800,000 in exports into the Bernardino is 6,100,000.0. This I thought was interesting. We are able to discern the top five trading partners and particular to our MSA.

So Mexico is our top trading partner at $2,000,000 followed by Canada at $1,400,000 China at over $900,000 The Netherlands over $800,000 and Japan over $600,000 We do anticipate to see Japanese investment continue to increase in this coming year. Goods exports top categories particular to our MSA. We have exports in billions shown on this graph before you. Computers and electronic products are actually the top category of exports followed closely by well, same same amount interestingly enough, 2,100,000,000.0 also for miscellaneous manufacturers. And then we have chemicals at $1,000,000,000 of exports, processed foods also at $1,000,000,000 and then transportation equipment at 0.7 you see shown right there.

When it comes to number of exporters, we were also able to aggregate that data. So there's over 6,000 different companies that have exported goods from our Riverside MSA and 89% were small and medium sized businesses. So that is something that really helps boost and support our local circular economy and invest and help our small businesses and support them. Economic impact for the MSA is $256,900,000,000 and that totals 1,700,000.0 in total employment and that is the impact that happens for exports. I hope this brief report has been helpful and informative to you, responsive to your referral.

Just want to emphasize Riverside's export position helps stakeholders understand the global reach that our economy has. While city level data aren't available, our MSA ranking is extremely impressive and also provides a meaningful benchmark of performance and our potential moving forward. And with that, I recommend the Budget Engagement Commission receive and file the report, and I'm happy to answer any questions you may have.

Thank you. We will now open the phone lines for public comment.

Public comment is now open for this item. Call (951) 826-8688 and follow the prompts to access the meeting. To request to speak, press 9. When called to speak, press 6 to unmute. You can also join via Zoom. The meeting ID can be found on the agenda.

Secretary, do we have any callers?

No callers.

Thank you. Alright. Commissioner Ara.

Thank you, chair. Thank you so much for being here. That was a great report. I just had a a couple of questions. How is the export revenue compiled or measured generally? Is that based on sales? Is that based on self reporting? How do we come up with the figure essentially?

That is self reporting from the exporters. So That they report to the federal government. So there's paperwork that they submit and self report to the federal government.

Okay interesting. So there's an incentive for all of them to report I'm assuming or is it mandatory for all of them to report?

That I don't know. That would be a Department of Commerce question.

Okay no problem. Do we know which companies comprise the bulk of the different categories? Like what are the main companies in each category that you included for goods exports?

Those only by type. So they can share those by type but not company names due to privacy issues. So we know, for example, primarily computer and electronic products so they could share top categories but not company names.

Got you. Okay. Also wondered with regards to just the medium and small sized businesses. What is their measure or standard for that?

Interestingly enough, so it's different than at our city level. So at our city level data, we say 10 or fewer is classified as a small business. Here at the federal level data, since that's where it's aggregated, that's a 100 or fewer employees. For small. For small. That's right. So to say 89% were small and medium, that captures everybody a 100 FTEs and fewer at the federal level.

Got you. And the medium would be a 100 and fewer, small would be smaller than that? Yes. Okay.

Yes. And that's they're comprised together.

Okay. And just two two more quick I'm sorry. This is a fascinating topic for me. For the total employment, do you know generally what kind of jobs those are in the sector?

Those I I do not but they would be tied to categories of companies.

Got you. So these are things that are being produced in the MSA or are they just being exported from this area after being held here for a certain period of time?

Both.

Both? Yes. Okay. So that's kinda combined?

Yes.

Okay. And then last question, do we happen to have an idea of what the revenue generation looks like for the city of Riverside? What what does the city get out of the export economy?

That I do not know. That that may be a finance question. It is difficult since we don't have this at the city level to be able to make that connection between the data.

Okay. Perfect. Thank you so much. I appreciate it.

Thank you.

Commissioner Ward.

Yes. And thank you, miss Evans, that great presentation. I agree with commissioner Ira on that. And I just had a few clarifying questions for things that I might have missed or could be included in the report. What is the do do you have any idea what the growth rate for our export economy is? I know that we've, you know, made tremendous progress over the last year signing agreements with other countries and other companies located around the world, but I'm I'm wondering what the trend on that is. Is it do we have any data that represents what that is?

That data, we do not have. Okay. No. That's from the Department of Commerce.

Okay. Would would they hypothetically be able to retrieve that at all?

I can certainly check.

Okay.

Is there is there a five year trend or is there something you're looking for in particular?

Yeah. Probably a five year trend, something that's probably in a shorter time time frame. Just wondering, you know, since we do have some area to catch up with, especially with regard to our peers, you know, San Bernardino, if they're at 6,000,000,000. I know, again, anecdotally, we're making progress. We're making progress. We can see it tangibly with the deals, but just wondering what that looks like in terms of the monetary amount. So thank you for that. And the figure from San Bernardino was interesting, which leads me to my second question. So their export economy is 6,100,000.0. Ours is 4.8.

Is there do you have any insight what industries are more represented in the San Bernardino San Bernardino County economy as opposed to the Riverside County economy and where that discrepancy is between those two numbers?

I don't. I apologize. It's really Department of Commerce data Yeah.

I understand. That's it. Yeah. Okay. Sounds good. Yeah. Well, thank you. So and I just wanted to be clear for my fellow commissioners. I I brought this to the agenda because I was interested in, you know, how we were creating a bulwark against the sales tax, which is always, you know, variable and seeing how we can decrease our overreliance on on just sales tax measures and how we can, you know, create some resilience against against that with, you know, other aspects of our economy. So thank you very much. Appreciate it. Thank you. Commissioner Lagnar.

Thank you for your report. I just wanna get some clarification on definitions. Is export considered international only or is it domestic and international?

International only. Okay.

On the chemicals for the top category goods exports, do you have any type of more specific information on what chemicals those are?

I do not. No. It's very it's very large large level data to protect information on at the business level.

Okay. And then another clarification. On the top five trading partners, are those five countries in the Riverside MSA MSA or that are those the top five trading partners for City of Riverside?

That is the Riverside MSA. Yes. We do not have city level data available.

I'm just curious because those numbers that you gave seem incredibly low. I mean, $2,000,000 for exports. It'd be nice to get kinda some further information on that because that seems I mean, I can think of one business I know here in the Riverside area that they alone export $2,000,000 to Mexico. So I just wanted to clarify that is millions and not billions?

Correct. Yes. So the data I received from the Department of Commerce.

Okay. Thank you.

Okay. No further speakers. This was received on file, no motion needed. Thank you, Ms. Evans.

Thank you.

Next, we're gonna get a report from Deputy Finance Director Sergio Aguilar on the fiscal year twenty four-twenty five fourth quarter report carryover of unexpected funds and budget adjustment.

Alright. Good evening, honorable commissioner Sergei Aguilar, deputy finance director. So this presentation is going to cover the unaudited twenty four-twenty five fiscal year end results, proposed carryovers, and also other budget adjustments for the twenty five-twenty six fiscal year. So starting off at a really high level before we dive into the details. Now overall, the Citi concluded the fiscal year in a very strong position with general fund revenue performing 1.4% above projections and also expenditures concluding 1.6 below budget after accounting for recommended carryovers.

And this led ultimately to a $9,560,000 net unassigned general fund reserve at fiscal year end, which is the net amount available after the required transfers to other reserves. Enterprise funds also ended the fiscal year in a strong position with reserve levels within their required policies. And we'll note that although the Citi did end in a very strong fiscal position, there does still continue to be ongoing fiscal uncertainties that cloud the Citi's financial outlook, and there's also continued cost pressures that could present future challenges as well. So starting off with the general fund revenue. Although the revenue projections were adjusted downward as part of midyear adjustments due to the economic uncertainties, actual fiscal year twenty four-twenty five revenues were above the revised budget estimates by about $5,580,000 or 1.4%.

There's a few categories that exceeded the revenue projections for property tax. Revenues increased by about 2.1% over budget projections and increased 6.4% over the prior year actuals. And the city continued to experience substantial growth in assessed property values as evidenced by a 5.3% increase in the twenty four-twenty five assessment roll. In sales tax, the budgeted revenue was revised downward by $1,900,000 as part of midyear adjustments, but the actuals concluded 2.7% above prior year and 3.3 above the revised twenty fourtwenty five projections, and that is in large part to high performing vehicle sales in the auto center. And then in terms of other revenues, revenues exceeded projections by about 3.9%, and that was primarily associated with increased revenue from interest.

But there were also some categories that did come in below budget that partially offset some of these revenue increases, specifically developer charges. This revenue category came in significantly under projections by about 22.9%, about $1,900,000 And that's primarily due to anticipated fee increases that were initially incorporated into the revenue projections, but those increased fee levels did not come into effect until June, one month left in the fiscal year. So that compounded by the fact that we also did see a decreased level of volume of building permits compared to the prior year. So those two components led to ultimately lower actuals and projections and developer fees and charges. And then also for licenses and non developer permits, revenues came in under projection by about $1,760,000 about 14.7%.

That's primarily due to lower than projected business license tax revenue, animal license and other permit revenue. So moving on to general fund expenditures. Actual expenditures were $6,550,000 or 1.6% below the total adjusted budget after accounting the encumbrances and recommended carryovers. In terms of personnel, personnel costs were 5.03 or 2% higher than per than amended in the 2425 budget. Now although the city did end the fiscal year with a 8% vacancy rate and an average annual 9% vacancy rate, the actual savings in this category did fall short and that's primarily attributed to unanticipated vacation and sick leave payouts from retirements, staff departures, leave cash outs allowed under MOU agreements, and these are all difficult to forecast and would otherwise be covered by vacancy savings.

In terms of non personnel, there were net savings of about $6,130,000 after accounting encumbrances and carryovers, and that's primarily due to savings in various professional services, maintenance contracts, water usage, software maintenance and training. There are also savings in special projects, savings of $1,800,000 after accounting encumbrance in the carryovers. That's primarily due to savings across various programs, various citywide fiscal management accounts, citywide events, citywide employment training, and staff education reimbursements. So moving on to Measure Z. Although the revenue projections were revised downward similar to the general fund by about $3,200,000 as part of midyear adjustment due to the economic uncertainty, the actuals slightly exceeded those revised revenue projections by $2,400,000 and this included an additional $820,000 in sales and use tax that came in over projections and 1,600,000.0 in additional interest revenue that came in over projections.

Now since its approval in 2017, the Measure Z transaction use tax has grown steadily. It peaked at about $84,020,000 in twenty twenty two-twenty twenty three. In twenty twenty three-twenty twenty four, revenues did decline by about $2,500,000 and that was the first year we saw a decline in the Measure of the Revenue. And in this last fiscal year in twenty twenty four-twenty twenty five, revenues continued that downward decline slightly by 0.7% to eighty one point three three million dollars But at least in the past few years, it has had a downward per actuals. In terms of the expenditures, they do tend to significantly due to the timing of long term capital initiatives and projects.

This ultimately creates an accumulation of unspent funds within the balances, but those end up typically getting carried over. So balance one, strong

sheet.

Fund and Measure Z reserve balances as And of fiscal year twenty four-twenty five year end, and this demonstrates that the city is in a strong position with record level reserves. As required by our general fund reserve policy, at fiscal year end, there was an additional $4,190,000 that was transferred to our policy reserves to align with the 20% of the fiscal year five-twenty six adopted budget. So the city now has $76,400,000 in those emergency and contingency policy reserves. The city also ended the fiscal year with $149,990,000 in other reserves, with the largest being set aside to support the future pension obligations. And in total, the city ended with $226,400,000 in general fund reserves.

Now of this amount, you'll see that unassigned balance, there was 560,000.00 that is left unassigned, and staff do recommend applying that balance towards addressing any potential deficits in this next budget. And we will present a plan for the use of those funds as part of the twenty twenty six through twenty twenty eight budget biennial budget development process. Now the city also ended the fiscal year with a total of $49,000,000 in Measure Z balance and reserves, and these are intended to be drawn down over the next several years. So staff do recommend to keep those available reserves intact pending completion of the twenty twenty six through twenty twenty eight budget. So moving on to a few of the other Citi funds, starting with Electric Fund.

The unaudited fiscal year end results present an operating surplus of about $48,010,000 and this included outstanding encumbrances and carryovers of $18,400,000 The total revenues at fiscal year end are $38,600,000 or 8.5% greater than revenue projections in total budget, and that's primarily due to increased electric consumption attributed to warmer temperatures through the fiscal year, year end accounts receivable adjustment to reflect implementation of a more precise unbilled receivable methodology and also increased transmission revenue due to higher rates associated with increased Southern California Edison transmission costs. Actual expenditures also demonstrated a net budgetary gain of about $21,060,000 after accounting for encumbrances and reserves. Personnel costs were $6,860,000 or 8.9% less than the total budget, and that's due to an average annual vacancy rate of about 11% during the fiscal year. Power supply costs were about $11,500,000 or 4.9% less than total budget due to lower electric transmission and capacity costs, which were partially offset by higher energy charges. Also, debt service savings of about $5,980,000 or 10% were achieved primarily due to planned delay of electric revenue bonds, which resulted in lower interest and related debt service costs for the year.

Moving on to the Water Fund, the unaudited fiscal year end results present a budgetary operating gain of about $6,810,000 after outstanding encumbrances and carryovers of $9,840,000 And total revenues at fiscal year end were $6,900,000 or 7% greater than the projections in the total budget. The water retail revenues were about $7,490,000 or 9.2% above projections, and that was primarily due to increased water consumption driven by the warmer temperatures and also below average precipitation as well as similar year end accounts receivable adjustment to reflect the implementation of that more precise unbilled accounts receivable methodology. Conveyance and wholesale revenues, they did fall short of projections by about $2,900,000 or 37%, and that was due to reduced demand from external entities in the wholesale water market. Now actual expenditures demonstrate a budgetary savings of about 3,700,000 or 3.6% after accounting encumbrances and carryovers. Personnel costs were about 1,700,000.0 or 6.6% lower than budget due to an average annual vacancy rate of about 5.4% during the fiscal year.

And then there are also savings of $3,500,000 primarily due to debt related costs coming in below budget. Moving on to the Refuse Fund. The unaudited fiscal year end results present an operating deficit of $9,680,000 and this includes outstanding encumbrances and carryovers of 6,840,000.00 However, this deficit primarily reflects a budgetary timing variance related to solid waste vehicle purchases. The revenues to fund these purchases were recognized in fiscal year 'twenty three, 'twenty four or 'twenty two, 'twenty three, and they were allocated to the fund reserves. But the actual expenditures for vehicles, which did start in 'twenty three, 'twenty four, they'll be drawn down as we receive those vehicles, and that has, in part, been delayed due to extended supplier time lines.

Excluding this impact of that vehicle carryover and those costs, the refuse funds adjusted operating result would be near breakeven. In terms of revenues at fiscal year end, they were 3.64% or 10.2% greater than revenue projections in the total budget. And the city service revenue exceeded projections by about 5.12%, and that's primarily due to increased curbside residential, automated waste and multifamily unit city service revenue. Actual expenditures demonstrate a net budgetary overage of $270,000 after incumbences and carryovers, and personnel costs were $1,160,000 or 16.1

the to the

fourth The

lower end

increase fourth of was operating gain of $25,760,000 after outstanding encumbrances and carryovers. The total operating revenue at fiscal year end are $3,020,000 or 3.3%, higher than revenue projections in the total budget. Revenue for residential services increased by about 1.4% or $1,400,000 or 3%. And also revenue from wastewater service contracts exceeded projections by $1,430,000 and that represented a 34.9% increase. However, there was revenue from connection fees that decreased by $2,500,000 or about 65%, and that was primarily due to a slowdown in new development and sewer hookups.

Actual expenditures demonstrate a net budgetary savings of $6,830,000 after $2,550,000 in encumbrances and carryovers. And personnel costs were $2,700,000 or 15.9% less on budget, and that was due to an average annual vacancy rate of about 19%. And moving on to the public parking fund, the unaudited fiscal year end results present a budgetary operating gain of $3,160,000 after outstanding encumbrances of 250,000 Total operating revenue at fiscal year end is $1,150,000 or 11% higher than revenue projections. And the parking downtown parking operations has continued to experience a significant turnaround in the utilization due to the implementation of the Parking Your Way program. Actual expenditures demonstrate budgetary savings of about $1,770,000 after 250,000 expenditures were $1,430,000 or 22% below budget, largely due to savings from underutilized professional services, which were budgeted on an as needed basis.

Now, every year there are typically funds that were unspent in that fiscal year for various reasons, but are still needed for expenditure in the subsequent year. So these funds are requested for a carryover and they're generally broken out into two different categories. Restricted carryovers, they represent appropriations of funding designated for a specific use by a third party agreement, and that includes donations, endowments, or grant matches. And then discretionary carryovers, those include amounts that were appropriate for a specific purpose in previous years but were unexpended due to timing or other reasons. So a total carryover of 44,880,000.00 is recommended for approval by council, which is comprised of 12,500,000.0 in restricted funding and also 32,370,000.00 in discretionary funding.

And there is an appendix in the report in your packet that breaks down those requested carryovers by fund, by department, and by purpose. So with that recommendation is that the BC recommend the city council receive and provide input on the fourth quarter report, approve the recommended carryovers of unexpended funds of $4,780,000 in the general fund and then $40,110,000 in other funds. And then there's a couple of recommendations related to the 'twenty five'twenty six fiscal year, a recommendation to increase an additional FTE, a deputy fire marshal within the fire department, to support the CUPA program, and this would be paid for by grant funds. And then there's two additional recommendations, and these are proposed supplemental appropriations in fiscal year 'twenty five'twenty six from the General Fund Infrastructure Reserve. And this would be a net $400,000 impact.

So this includes $500,000 for the Orange Terrace playground equipment replacement, 300,000 for the Whole Lake master plan, and then this would be offset by pausing $400,000 in planned expenditures associated with Gosky Center bathroom renovation for a total net impact to the infrastructure reserve of $400,000 And with that, we do have representatives from the various city departments here that are requesting carryovers. So if there's any questions on any of the carryover requests or the other supplemental requests, we have department staff available to help answer those questions.

Thank you. We will now open the phone lines for public comment.

Public comment is now open for this item. Call (951) 826-8688 and follow the prompts to access the meeting. To request to speak, press 9. When called to speak, press 6 to unmute. You can also join via Zoom. The meeting ID can be found on the agenda.

Secretary, do we have any callers?

No callers.

Thank you. No commissioners for discussion on this one.

Commissioner Ira.

Thank you, Chair. Just a quick question for you, Sergio. I was wondering with the electric fund, I didn't maybe I just missed it, but do we still have the the kind of public charge reserve? Is that accounted in the carryover? Or how is that how is that sort of measured?

Public charter reserve.

I might be misquoting the the name of it, but it's like a

two point The general fund transfer or is that you're referring to? Or

No. No. No. I think I I might be the electric fund is tied to RPU. Is that

Yes.

Yeah.

And we have RPU here.

Okay. They might know what you're talking about.

Hi. Brian Sinteria, assistant general manager of finance administration. I think you're referring to the public benefit surcharge, the 2.85%?

Yes. Sorry. I I know I just named it incorrectly. But, that that one.

Yes. We do. We are carrying forward some program funding that's restricted solely for the purposes of of those funds. Does

that

answer your question that we are we do have a carry forward?

Yeah. I I just I guess I didn't see it in the the total breakdown. That's why I

was I'm assuming it was I believe it was in the $11,000,000 in the other funds right there.

Oh, I see. It's just titled other funds? Yes. Okay. The I know there was a recent report that had mentioned it was close to, like, 34 32, 34,000,000.

That is correct. We do have that much funding in reserves right now. But as far as we we don't typically budget that much every year. I think we budget sometimes around $12,000,000 And I think the carryover, if I can look

Sure, yeah, yeah.

Thank

you. Yes, we are carrying over $2,600,000 So we do have a plan, and then we are doing community outreach. And we had some public meetings to plan spending those dollars down going forward. And we do have a community development block grant that has brought in a consultant also to help us develop a plan to spend those dollars down. So yes, we do have a carryover. We still have the reserve you mentioned, and we do plan to ramp up programs.

Very cool. Thank you so much. I appreciate it.

You're welcome.

Commissioner Ward.

Thank you, Sergio, for that. So I had a question on page 20 just for some clarifications for some of the expenditure increases from the adopted budget to the total budget. I know you were talking about some costs with related to, like, software and other contracts, but I'm wondering if you can expand on it a little bit more. For the non personnel costs on the line item, where it increased to 90,000,000 from 78,000,000. Wondering if you can elaborate on that.

Is that is that one of the software costs and trainings that you had referenced?

So we actually and let me find the page in the report. We have a list in the financial report, which is that that 50 page report that actually has bulleted the various increases that were made, and then a few of them would be non personnel related.

So I

think in large part what the increase will be, one of the adjustments that was made in terms of expenditures was to shift certain expenditures that were related to the former American Rescue Plan Act, shifted that to the general fund. So we transferred the revenue over. And then those expenditures then reflected in the expenditure budget, but they were offset by the revenue. So some of those would have hit the non personnel categories. And then there were various other adjustments that were approved by counsel throughout the fiscal year for I know there was like various legal services that were increased to support certain cases that were pending.

Those would because of external contracts, those would hit that non personnel category. It was basically different adjustments that counsel would have approved. Or if there were carryovers from the previous year, so in this case, in 2324, if there was non personnel costs that got carried over to 2425, which there were there were a few, those would get reflected in that total budget because it, in essence, kind of amends the adopted budget because you're carrying in dollars from the previous fiscal year. So a lot of that would have actually probably also been some of those carryovers from fiscal year twenty three-twenty four to fiscal year twenty four-twenty five and those would be reflected in the equivalent report from last January when we did the fiscal year twenty three-twenty four. Those would be broken down in that report and they got carried into what would now be 2425.

Okay. I'll to review the notes in this meeting just to make sure I I got all that, but but thank you for that explanation. And would that same logic be applicable for the operating transfers as well further down on this expenditure list where it increased from, you know, from the adopted budget of 12,000,000 to 36,000,000? And then I'm assuming this is in the appendix as well. Haven't had a chance to read this financial report yet. But

Yeah. So I think part of that operating transfers is is ARPA. ARPA is a a large part of that because what would have been spent in terms of capital projects, they would have been then transferred into the capital fund, and then that's where that would show up there. So that was an adjustment that was made throughout during the year. So it that increase in the budget shows up in that total budget column.

Okay. Okay. Sounds good. And then to to page 22, we'd mentioned this unassigned fund balance of $9,500,000. So it's my understanding that these are not restricted carryovers. These are not any other type of carryovers. This this is just basically money floating around that could be allocated into some fund, and you're seeking guidance on where that could be allocated in the future?

So, yeah, this is, in essence, the excess funding that is available after the expenditures, after the carryover of the encumbrances, and after the transfers to reserves. So this is basically the kind of unassigned real balance for any other purpose in the general fund. So what we are recommending to the council is to leave that $9,560,000 intact until we put together the plan for this next budget because we might need that funding to help offset potential deficits in the twenty six to twenty eight budget that we're currently working on developing that's going to be coming forward to BC and to council within a few months. So we are recommending to not spend that yet until we put together a plan and present that to the appropriate bodies to reflect how we would propose to spend that available excess funding.

Would you able to preview what maybe some of the expected deficits are going to be?

So we're still working through that right now. We're currently going through the budget process internally in terms of making sure that we have updated revenue projections, acknowledging and understanding the various various costs and pressures that we have. But RIENE revenues in certain cases are trending lower than what were projected as part of that last budget. And so that's one of the pieces that we're currently working through. And so we'll be coming forward to BC and to council later this year with all the numbers and then an approach and a plan of how we would solve it. But that's why we wanted to leave that funding intact because we anticipate we might need some of that to help offset potential deficits.

Yeah. Understood. And, I mean, I just wanna make a statement about about that. I I understand, you know, that you are, you know, trying to be prudent in understanding that there could be some variances with regard to, you know, potential deficits given, you know, the nature of the economy right now. But I think, like, all of us on the BEC are definitely concerned with the nuts and bolts of measure z.

Personally, I would love to see if we could, you know, even get half or or maybe all of this unassigned extra funds that that we've realized to maybe go towards infrastructure like roads and, you know, our sewers and whatnot. So and I know that there has been discussions, you know, amongst some of the commissioners here about, you know, certain particular projects that we might be interested in hearing from the communities that we represent. So I would just just want to implore my fellow commissioners to think about that, to think about just how much more we need in roads. We we've seen the reports from Nathan Mustafa who always gives very detailed reports about the the shortfalls that we have with regard to that. So I just wanna just just log that in the record there.

And lastly, I apologize. So I think that would do it for for some of those particular matters I had with regard to some of the line items there. I had a question about the Whole Lake master plan. Would we be able to get any more details about what that looks like? Yes.

Yes, sir. I'm Pamela Galleria, the director of Parks Recreation and Community Services.

Good to see you. Yeah. I I just had I just wondered if you could elaborate on on what the Whole Lake like, just some highlights of the Whole Lake master plan.

Sure. Our plan is to send out an RFP to look for a consulting team to do a master plan for the whole lake whole Lake area, probably an extension of Rutland Park. We have had community meetings concerning Rutland Park and was very encouraged neighbors that wanted to see the park expanded. We probably will have to do a menu type where, we will hire a consultant that will first of all be an expert in air flight runway approach and what we can do in a runway situation. And then also understanding the environmental constraints of that area.

Mhmm. Okay. Yeah. Sounds good. Yeah. I know the airport commissioners would probably love that.

But

Yes. Very important.

Well, thank you for that. And I also wanna congratulate you on the the Fairmont Park with

Thank you.

Thompson Brewery signing that contract. That's a great thing to see. So Thank you. Yeah. I think that will conclude my questioning. Thank you. Commissioner Ira.

Thank you, Chair. Sergio, just another quick question for you with regards to revenues. You know, kind of echoing a bit of what Commissioner Ward said, are we looking at other revenue sources for the city seeing that the trend seems to be going downward for sales tax revenue, especially as it relates to measures e and also just economic uncertainty? It just seems to be, you know, kind of growing trend rather than something that seems to be diminishing. So do we have any plans or are we exploring other revenue sources for the city to cover things like infrastructure, to cover things like some of the other concerns that that we have?

Yeah. So there's a couple of things. Think always looking to increase the economy in Riverside, which the more we bring in businesses, which I know the CDD team has been doing a lot in the area, we have a lot of businesses that have been coming into the city. The more we bring in business, the more sales tax we have, the more property tax we're going to be able to get. I know there's a couple big potential developments that are in the works.

Companies like Voltu, who just came on, I know we have also kind of a MOU that we signed with another electric charging company as well. So I think in many cases, looking to grow the economy is one way to increase revenue. And I know that has been one of the big focuses of the city manager and the city council in this past couple of years. Another piece is we're also always continuing to make sure that we are recouping the cost of service for the various kind of fees and charges that we provide. Last year or in fiscal 'twenty four and 'twenty five, we did a comprehensive update to our fees and charges to make sure that we are accurately reflecting our cost of providing service to the fees that we're actually assessing.

So we did an update, but we continually monitor and look at that to make sure that we're always bringing in the revenue to at least offset the cost of us providing those specific fees and charges services. So there are different ways we definitely look to continue to increase revenue, acknowledging that expenditures tend to continue increasing. So we need to increase revenue by at least the amount of growth in expenditures to be able to not have future deficits. So that is definitely a priority and something that we continually evaluate and look at.

Very cool. And is the city open to kind of creative municipal revenue streams as well? Or what kind of determines the process for creating that revenue stream? Like, just briefly, walk me through kind of what that looks like. For instance, Measure Z was something we brought to the voters. The voters got to decide in creating a new revenue fund. What does that sort of entail?

Yeah. So I mean, it really depends on the type of revenue. So, you know, things like Measure Z, those have to go to the voters, right? And so there's a process there working internally and with counsel to put something on the ballot. And so internally there's a lot of discussions as to whether we need it, if there's certain expenditure needs that we know are going to happen, what revenues do we have coming in.

Also, have various advisers that we work with. So I know in terms of different financings that we do that allow us to bring in money for different types of infrastructure projects, we work with our advisers to see what are the different types of legal options that are available to be able to support new projects that we need to pay but finding strategic ways to finance them over a long period of time. And there are various financing mechanisms that are allowed under the law. So we continually have discussions with our advisers to see what is available and what is prudent and what we can ultimately afford in terms of debt service. There are multiple streams that we take and approaches to evaluate potential additional revenue streams.

Got you. Thank you so much. Appreciate

it. We have Edward on the line who would like to speak.

Nice.

Yeah. Hi. Thank you. This is Edward Regis. I'm assistant city manager and chief financial officer of the city.

Hold on, Edward. We can't hear you yet. Give us a second.

Okay.

Go ahead.

Can you hear me now?

Yes.

Hello?

Yeah. We can hear you.

Can you hear me?

Yes.

Yes? Okay. Edward Enriquez, assistant city manager and chief financial officer. I wanted to address this question. It's a great question from the commissioner. I think Sergio did a good job of describing a lot of the things that we're doing. But, you know, obviously, the primary driver for us is our economics and economic development team is working on a lot of different things. They're in the pipeline to drive revenue. One of the things I wanted to, make everyone aware of, on the twenty seventh of this month, we're gonna actually have a workshop, to talk about, this particular topic and options for us. I think it's incumbent upon us every couple years to talk about things that, like measure z and other options that we we need to look at.

So the twenty seventh, of this month, we're gonna, have a meeting with council and go through a workshop talking about different strategies, aside from the normal economic development strategies that we're constantly imploring. So I would suggest, tune in to that meeting. And if, the BEC would like, we can certainly have an abbreviated version of that, discussion at the following BEC meeting to talk about things as well. But, we are exploring other options as things continue to get a little tight on the revenue side. So I just wanted to clarify that, but I think Sergey did a great job exploring and explaining some of the options.

Thank you, sir. Yeah. That would be if we could get an abbreviated version, that would be fantastic. I definitely be Sure.

Commissioner Ward.

I'd like to make a motion to approve staff recommendations. Second.

Who was the second? You may begin voting. Motion passes unanimously.

Thank you. Okay. Sergio D'Ogofar, Deputy Finance Director update.

No update to provide. Thank you.

Items listed on master calendar is we have a police report, budget impact compared to other cities regarding crime levels, a fire report, measure z engagement engagement, a cannabis update. We will be reviewing the code of ethics and selection of chair and vice chair. Any further items you wanna add? Commissioner Ira?

Yeah. I just wanted to put one item for future discussion. I know a fire is something that's coming up. So I don't know if we have an official update on the I'll run out and grab the chief right now. Yeah. They they beat me too. But yeah, it would be great to get an update on fire. Obviously, high need. We had a great year in terms rain and water, but I feel like it's always followed by a year of couple years of drought. So I live in the highest fire risk ward in the city.

Obviously, I have a personal concern. I know a lot of other folks do too. So it would just be great to get an update from fire needs, you know, any gaps they have in funding or any equipment that they're requiring. The other thing I'd really like to bring to this committee commission's attention is cost of childcare in the city, and I think something that may fall under the Measure Z budget or ability to fund. I had an opportunity to meet recently with the executive director of Centro de Ninos in the East Side, which is a very unique situation.

I'll try to be brief, but they are a nonprofit childcare facility that operates on city property. They pay rent and utilities to the city of Riverside, which certainly eats into their operating costs significantly. And as a result, they're unable to have a full capacity of childcare potentially, you know, with some of those costs either mitigated or completely removed, they would be able to bring roughly 25 to 50 more children into the facility and offer a very subsidized or free childcare to residents here in the city. They serve kind of the whole city. So I would like for us to look into not just that specific example, but generally what the city is doing to alleviate those costs, what options there are, you know, realistically, pragmatically, because obviously it's a very expensive undertaking, but a worthwhile one and majorly beneficial both to the residents and obviously to the economy as a whole.

So just would love to get some information on that. And I know the executive director and her staff, I don't want to speak for them, but they did express an initial interest in actually speaking with our commission as well. And again, I think it would be a unique opportunity because they directly utilize city facilities and pay the city of Riverside in the form of rent and utilities and things like that. So I would love to explore that. Childcare costs are insane.

I don't have children, but was really floored to find out exactly how expensive it is. We're talking like $1,213,100 dollars a month per kid for your average family, which is second highest cost after rent. Just wanted to put that on the commission's agenda. Thank you.

The next regular budget engagement commission meeting is scheduled for Thursday, February. This meeting is adjourned.