Finance Committee - Regular Meeting

Office. Sergio Agler, deputy finance director.

Ibar Sayo, assistant city clerk.

Michelle Davis, Housing and Human Services Director.

Good evening. Matthew Taylor, Principal Planner, Community and Economic Development.

Erin Stream, CEO of the Arc of Riverside County.

Steve Nakinster, fire chief.

Mike Allen, deputy chief of administration.

Mike Avila, admin services manager.

Great. Thank you all for being here. Let's stand for the pledge of allegiance. 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 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 any wanting to participate remote?

I don't have anybody.

Madam secretary, would you call roll?

Member Williams? Absent. Member Ira? Absent. Member Bello? Absent. Member Roton? Present. Member Hutchins?

Present.

Member Ward? Present. Benavides?

Present.

Member I apologize. Absent. Member Langner?

Present.

Vice Chair Vandenberg?

Present.

And member Scott Coe?

Present. Thank you.

Okay. We'll 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?

There are no callers on the line.

Thank you. I'm looking for a motion to approve the consent calendar. In the audience? We have one. We're still in public comment.

Let's get the consent calendar.

I'll move to approve the consent calendar. We

have a first and a second. Can we take a roll call vote?

Member Roton?

Do you want to put it on our pad so we can vote?

I'm not sure. I don't have control of the golden machine. Way over there.

We could. Sure.

Yeah.

So yeah. We'll do we'll we'll do it the way you were doing it.

Yeah. It wasn't set up.

Sorry.

I apologize. Okay. Okay. Member Roton, how do you vote? Yea. Member Hutchins? Yea. Member Ward? Yea. Member Benavides?

Aye.

Member Langner?

Yea.

Vice chair Vanderburgh?

Aye.

Member Scott Coe?

Yes.

Thank you. Motion passes unanimous. Thank

you. Okay. Our first speaker tonight, Matthew Taylor, Principal Planner from CEDD. Thank you.

First up, was not expecting that. Good evening, everybody. Honorable Chair or Vice Chair, members of the Budget Engagement Commission, my name is Matthew Taylor. I am the principal planner for advanced planning in the Community and Economic Development Department. I'm here this evening to give you an overview of what CEDD and other departments and partners in the city do in order to facilitate the development of housing of all kinds in the city of Riverside.

So the first thing I want to share with you is just brief overview of RINA. This is the Regional Housing Needs Assessment allocation that is developed by the California Department of Housing and Community Development and then assigned to all cities and counties in the state. And this is an eight year goal for how many housing units the state needs to keep up with demand and to address the ongoing affordability and housing availability crises that we are dealing with. So the Department of Housing and Community Development, every eight years, goes through a very complex planning exercise where they develop a projection for how many housing units they think the state will need overall over an eight year period. Then they then assign a portion of the RINA to metropolitan planning organizations, such as the Southern California Association of Governments, of which we are a member, those MPOs then subsequently allocate and distribute that their chunk of the arena, the state's arena, to the individual cities and counties within that MPO.

We are now in the sixth housing element cycle. These are eight year cycles, as I mentioned. The sixth cycle began in 2021 and runs through 2029. So in the late twenty teens, HCD went through a process of developing a methodology to calculate how many housing units they believe the state needs, and they did things a little differently that time, and it resulted in an arena that was about twice as high as it has ever been in the past. And so that is 3,400,000 units between the years 2021 and 2029 that they believe are needed throughout the state.

They then subsequently allocated 1,300,000 of those units to the SCAG 6 County region, which includes Riverside County. And then SCAG, through their own development of a methodology, allocated 18,458 of those units to the city of Riverside. And those are broken down further by income level, which we won't necessarily have to get into with you here tonight, but this is the assignment that is given to us by HCD. And in the planning division, our job a few years ago was to develop a plan for how we were gonna accommodate this amount of growth through our zoning and our policies over that eight year period. And that is what resulted in the housing element, which is a component of the city's general plan that was adopted in 2021 and covers the period from 2021 to 2029.

So that is where we are in terms of statewide planning and housing goals. Oh, look at that. I do have a breakdown by income. You can see here that that 18,458 units is comprised of various different income levels and different quantities of units per income level, and this is a calculation that SCAG comes up with based on what they determine the needs to be regionally based on a number of different factors, including historical growth patterns, including jobs and employment growth in particular areas, and more. We demonstrate compliance with the RHNA allocation by showing HCD through our housing element that we have zoned enough land in the city to adequately accommodate this amount of growth and that we have implemented policies that will help accomplish housing at all of these different income levels throughout the planning period, and we report annually on this progress.

This map here shows you just an overview of where our RHNA sites were. We have to identify actual sites that we think can accommodate the housing. And in the sixth cycle, this is what that distribution looks like, the final distribution that we selected. Some of these sites had to be rezoned to allow more housing than they previously did. Some of them did not.

Some of them were already zoned adequately. But overall, we exceeded our RHNA allocation by identifying adequate sites for about 21,000 units, which means, you know, because we don't control whether or not housing actually gets developed, The market does that, essentially. That means that if some of these sites don't develop within the planning period, we still have enough in our inventory to make sure that we're always meeting our identified need. So we have some numbers to share with you about progress that we have made to date. It could be better, but that is largely a function of market conditions more than anything we do from a policy perspective.

In fact, we are very supportive of housing development in a number of different ways through policy, which I'll talk a little bit more about later. It's important to remember also that this is a pretty specific look at our housing development activity. This is annually the number of building permits issued per, excuse me, by income level per calendar year as they get reported to HCD. And so it does not include units that we approve or entitle, as we say, but have not been built yet. It also doesn't include how many units are getting completed in that calendar year.

We're talking permits issued only because that is the data that HCD asks for. Data for 2025 will be reported by April 2026, but if you'd like, I can share those numbers with you when we get into discussion as we have compiled the data. I don't have the exact breakdown off the top of my head, but the total number for 2025 was about five forty two units were issued permits in 2025. This is a breakdown for 2024 about what that looks like. I mentioned that we don't report construction completed or permits issued sorry, or entitlements approved necessarily.

But for 2024, as you can see, like I mentioned, eight ninety seven permits issued. They're broken out by type here, single family, multifamily or accessory dwelling units. We also completed construction on six zero two units and approved planning approval for over 1,000 units within that same year as well. So we are making some progress toward our arena. It is not fast enough to keep up with the, frankly, very large number that we were assigned.

But we do just about everything that we can to make sure that we're moving in the right direction. To get more specific with you, some of the projects that we have in process. So these are entitlement applications that are under review, and they're located all throughout the city in a number of different formats. To kind of point out to you some things that have moved forward recently, The Mi Casa Luxury Apartments project is located on Hedrick Avenue in Ward 6. That's 117 units.

That is requires city council approval because they're changing the zoning of that site in order to be or asking to change the zoning of that site in order to move that project forward. But by contrast, the La Sierra Apartments project, which is two seventy two units at the corner of La Sierra and Norwood, those are proposed for a site that we rezoned as part of the housing element, that's part of our housing element inventory, and because of that, they do not have to go through that hearing approval process, which significantly streamlines their development approval process. Because we've already done that upfront work of making sure the site is available for housing development, so really what they need to come in and do is get approved for construction, and that helps bring projects forward in a more timely fashion. These projects are approved and in the permitting process, so they've mostly received their approval several years ago. Some that you probably are familiar with from around town that gives their topics of conversation.

The Sears redevelopment is an example of that. That project is entitled, it is approved, it's going through the permitting process to begin construction, and that's what this category represents. And then finally, projects under construction. These are actively going up. So that includes the Exchange, or now called North Grove, the project on Orange Street at the corner of the, or at the 1691215 Intersection, Mulberry Gardens, which is an affordable project on Mulberry Street, and the Iowa Avenue mixed use project at 3099 Iowa where the old Kmart was near UCR.

If you ever want to know more about what is going on around town in terms of development, the Planning Division maintains an interactive development activity map, which you can access by visiting the planning website at riversideca.gov/planning. Click on development projects and CEQA documents. This map is updated monthly. We do more than just planning for housing. Planning and zoning, that's a big part of what I do.

But our partners in the Department of Housing and Human Services and other departments as well are really critical in making housing especially affordable housing can happen, and that is generally by marshaling and facilitating a number of different resources, mostly financial resources, but other types of resources as well, technical assistance and more, to help complete the financing picture for affordable housing projects throughout the city of all different kinds. So these are just an example of some of the programs that our housing authority either directly administers or helps facilitate applications for or is otherwise instrumental in connecting projects with in order to make sure that they can get built. Michelle Davis with the Department of Housing and Human Services is here if you have more questions about these programs when the presentation is concluded. The affordable housing unit pipeline, this is specifically this is different than the RENA reporting that we do. These are all of the affordable housing units that the housing authority and DHHS is anticipating are going to be moving forward in the near future.

This picture has changed somewhat recently. The pipeline should actually reflect three eighty nine units and that the 2028 and beyond grouping should reflect 138 units. We also have a number of initiatives that are ongoing in various stages to try to facilitate and encourage and incentivize the development of all different kinds of housing, market rate, affordable, multifamily, single family, all of it. This is just a small collection of some of the things that we are undertaking. The Dwell Riverside is our accessory dwelling unit program, and we have information and resources as well as permit ready accessory dwelling unit plans available through the Building and Safety Division.

We are working on developing updates to our density bonus regulations, which allows and incentivizes affordable projects to, you know, build more than the zoning otherwise would allow for their project site in exchange for providing affordability and other community benefits. We're developing permit ready plans for missing middle housing, that's small scale housing development, and really hoping to incentivize infill development in existing underutilized locations throughout the city through that program. And these are mostly grant funded, by the way, so this is using state dollars to make sure that we are maximizing our impact. We are a pro housing city. We were designated as a pro housing city in 2023.

That means that we are eligible for additional grant funding from the State of California to support specifically affordable housing projects because we have demonstrated that our policies and our activities are supportive of expanding housing availability and access. And there's more. And a big piece of this is our general plan update for 2050, which I'm the project manager for. This is going to be comprehensively updating the city's growth plans and its policies related to development for the year 2050, and a big piece of that is housing. It's more than just that, but it's a big piece of it as well.

Finally, streamlining and incentives. Some of the other divisions in community and economic development are constantly working to make the actual development process easier. A number of examples on these is things like a self certification program for construction professionals so they don't, you know, they can certify to our building and safety department that their plans and their projects meet code requirements without having to go through a permit process. This is a pilot right now that we are launching on a limited basis, but if it's successful effective, we could look at expanding it. We're constantly tweaking our zoning code with at least biannual updates and cleanups to streamline the development approval process and make complying with our zoning ordinance easier and simpler.

We are experimenting with over the counter approvals in the Building and Safety Division for smaller projects as well to streamline the building permit process. Again, a lot of the streamlining that we talk about, time is money and financial feasibility is greatly affected by how fast we can get a project from proposed to under construction. And so a lot of the efforts that we make are centered around that. And there's a lot more where that came from, but I've been going on for quite a while now. So I'm going to stop there and invite any questions or discussions. Michelle Davis and Miranda Evans, our Deputy Director of Community and Economic Development are also with us here tonight in case there are specific questions about anything in their shops. Thank you very much.

Okay. 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?

There are no callers online.

And I didn't ask in the beginning. Do we have any speaker cards?

There isn't any.

No speaker cards. Okay. Sure. Commissioner Ira.

Thank you, chair. Yeah. I'm commissioner Baird for tonight, I guess. Thank you so much for that presentation. That was incredibly insightful. And just had a few questions just regarding some of the numbers that you had shared. So and just general questions too. So you had mentioned that a lot of these arena sites were already zoned inventory wise. At any point, if they come to be rezoned, is that a process that has to go through council? What does that kind of look like? Are we keeping them kind of zoned that way in perpetuity?

Great question. Thank you very much, commissioner. So when we adopted the housing element, we concurrently rezoned a number of properties in the inventory to make sure that they are adequately zoned for the amount of housing that we want to encourage there. Sure. And that is not something that many cities do.

Many cities actually adopt their housing element and then spend several years of the planning cycle going through a really difficult process of rezoning. We did it all at once. And so that zoning is in place. If If a property owner or another development proponent proposes to rezone one of those sites in a manner that would reduce its capacity to have housing built on it is incumbent on the city and the applicant to find a replacement site. And so if you have a property that's zoned for 100 units and you propose a rezoning that would, you know, reduce its capacity to 50 units for whatever reason, as part of the development approval process for whatever development you're proposing, we have to offset that somewhere else.

So we're always maintaining that baseline.

Thank you. Also just wanted to clarify too, it looks like if I'm understanding the Arena progress numbers correctly, for the last few years, we just have not really built any very low income level housing. Is that sort of a fair assessment?

Yes. We and and so in the when when we report the 2025 numbers, there has been a few additional, but we are, as you can see here, pretty behind on the very low income category.

Sure. And and what is the what is the reason for that delay? What is holding us back from building more very low, low, or even moderate income housing?

I'm going to ask if Michelle Davis wants to come and speak with us about this.

Thank you.

One is lack of funding. As you know, had redevelopment funding that provided resources annually to fund projects. Used to have about 5 to 7,000,000 a year to build affordable housing. Matthew and I talked about this earlier today, the state of California, the Mulberry site. We're gonna have two zero nine affordable housing units built on it. But because it didn't go through the permitting process through the city, we can't count those units. So we're having conversations with the state right now on how we can count those units.

Got you. Okay. That's of course very California. Good to know. I did have a couple more. I'm so sorry. I just get them all out. So I know that there was some discussion. You had mentioned briefly the pro housing designation. There's been some discussion in recent weeks of us potentially facing some pushback due to like pending, potentially pending lawsuits where that pro housing designation may or may not be threatened. Is that a valid valid concern? Is that something that we should be worried about as a city? And if so, like how would that look?

With all respect, I'm not gonna comment on potential pending litigation at this time.

Sure. Okay. That's totally fine. But if there would be litigation, it might affect the pro housing designation.

So HCD can revisit a pro housing designation for if anything, if something were to transpire in pro housing designated city that fell below the minimum standards of receiving the pro housing designation. Whether or not they will do that in any given situation is not something that we can predict.

Got it. Thank you. Last question for me, and I'll I'll I'll yeah. And I'm not trying to I'm not trying to jump in on any litigation here, but just just was kinda curious. The last thing I had was just you mentioned, and I'm I'm sorry if I'm getting the numbers wrong, you said we had five zero three units in pipeline. Now we have three eighty nine, I think you said, or I'm sorry if I'm misquoting the number. And then slightly less heading into 2028. Why is there what was the change there?

We did have the Quality Inn project that went to council that did not get approved, and so therefore that has been removed from that number.

Okay. So that was being counted towards the numbers?

Correct.

So this means so can this number, like, let's say next year you get a bunch of projects in the pipeline, would this number be revised or is this pretty firm through 2028?

No, it will continue to change. We do go to the Housing and Homeless Committee every month and provide them with an update. We'll make sure we get it posted up on our website too that you can keep track of what the projects are that are in the pipeline and the progress

Perfect, of those thank you so much.

So I mean, just looking at Thank you again for this. It's like actually incredible and I wish more people in the city kinda saw this. But I'm a little worried that it's kind of abysmally low from what we need like in a lot of our communities across the city. Is there is there anything, I guess, we can do as commissioners to kind of advocate, you know, within our relative, obviously, capacity for more housing to be built? Like, what are some of the options we're looking at as a city? Because it looks like not to your fault, but we're not building enough nearly enough to meet our numbers.

So so in terms of your role as a commission, I I don't wanna speak to that necessarily because it's, you know, not frankly, not something that I is part of my expertise. But I I will say kind of anecdotally that every city in California struggles to meet these numbers, or virtually every city in this California of any appreciable size. They are just simply incredibly high. You know, our average and this has been consistent for at least twenty, if not more years, since really, I mean, probably with a reasonable break in the 2008 recession period. But we permit about 1,000 units per year on average, and we've done that fairly consistently for a long time.

In order to meet these numbers, we would need to do, like, 3,000 units a year. And, you know, I honestly don't know what we would have to do in order to get anywhere close to that. But we do what we can where we can. And ultimately, that's what RINA is. It's a planning goal. It is not an obligation to build units. It's an obligation to plan for them and then do what you need to do policy wise in order to facilitate it, as much of it as you can. But ultimately, there is not necessarily a penalty for not meeting your arena.

Thank you so much. I really appreciate that.

Commissioners, your speaker buttons should be working now. Okay. Commissioner Hutchins. So

I want to echo thank you for the presentation. I had one that I'm gonna break the rules of the academy and do a comment than a question. The first is because you're getting very close to my dissertation topic. One of the things that I found in sort of part of the engagement of what we do on your third slide when you're talking about sort of the numbers and how they're tied to what they've like where they are in the AMI percentage. One of the things that I've actually found in my work to connect it is also maybe at some point like listing descriptions or jobs that like fall into that. Particularly as we get to places like when we wanna talk about like very low and low income housing, there's always a level

of public

pushback because of an assumption that folks seem to have about the types of people that occupy those housings and usually it's a misconception, right? Usually it's a stereotype. And so sometimes having that and including it I think might be beneficial be like, actually no, this is like a first year teacher or something along the lines of giving them a real concrete example kind of demonstrates like these are the people who they are and it's really kind of interesting. The second one actually was a question that commissioner Ira sort of sparked me to ask because I don't know it, is what what does like the the housing the pro housing designation like what is the impact of that? Like it doesn't mean like we can apply for certain things? Like, what what is it, like, realistically mean for, like, for this? I'm just curious.

Like, that part, I didn't know.

So I'll start, and then I'll ask if Michelle can come give us some specific examples. But in general, it means that we basically get Fastlane a priority for certain grant programs. And there are some other grant programs that are only available to pro housing designated cities. And maybe Michelle can talk a little bit about the pro housing funds that we have received to date.

Yeah, we've received about 1,400,000.0 in the past for an affordable housing project. The NOFA did get released recently, so we are going to counsel next month to request another 1,400,000.0. So keep your fingers crossed that we do get that application funded so we can build more housing.

And those funds are only available to us because we have the pro housing designation.

Okay, thank you. Mr. Chair, yield back.

Thank you. Commissioner Ward.

Thank you, mister Chandler, for that presentation. And I I thought that was some insightful questioning by commissioner Ira. I do wanna get to one of his points there. I did have a specific question about slide that I saw on that report. Slide 4, I believe it is. Would you be able to thank you, Greg. Can't really see it on my piece of paper here. But, Slide 4 in Ward 5, I mean, obviously, I'm looking there because it's my ward. That major intersection right there, it looks like that's Indiana and Van Buren right there. Is is that correct where, there's the townhome development, the Hundred 50 townhome across from the In N Out.

Yep. That's exactly it.

And then on the other side of the freeway, I know that there's no project there right now, but looks like it's, you know, been zoned for some type of residential.

Correct.

Have you had conversations with the property developer there? Can you tell us about what that site is looking like in terms of the outlook for housing?

If you're speaking specifically about the site located at Indiana Van Buren on the Southwest Corner Yeah. Right next to the to the railroad bridge. Yes. So there's been an application in planning for actually about five or six years now on and off for a development project there. I can't speak to the specific reasons as to why the developer has not moved forward with it. Nothing has been approved, but there has been an application in process for quite a while. It's one of those situations where they kinda come and go, and we say, we're ready to move your application forward when you're ready. Yeah. I just yeah.

Is is it a local I'm not gonna ask who the name is, but is it a local developer?

It is a developer who has done other non housing projects in the city and the region.

Okay. Okay. Got it. Yeah. Thank thank you. Appreciate that. And it's interesting I have to maybe follow-up on that. And maybe, you know, subsequent to that point, your engagement with some of these property owners, it seems like that particular site, you know, it's it's kind of hung up by, you know, what the developer's schedule is and, you know, what their outlook for that project is. But in terms of some of the sites that, you know, are are vacant and have been hung up by the inaction by property owners, what what is your basic high level mode of engagement to try to get them to a point to see the value in some type of affordable or market rate housing project?

That's a great question. We don't necessarily have a proactive outreach kind of program to, you know, to try to encourage developers or property owners to move something forward. But we can definitely say for sure in the planning division at least that when we do receive interest and receive inquiries, we're very focused on making sure that they have the information and the resources necessary to get a project going if that's what they want to do. Mhmm.

And is it a resourcing need at the city, that determines how proactive you are in terms of the engagement with some of these property owners, or is it is it just not a standard in in governmental

I think it's fair to say that it's both of those things. It is it's a it's a resources issue for sure, but it is also, you know, not typical for for at least for planning departments to to to push necessarily. However, our economic development manager and deputy director is in the room. Miranda Evans, I don't know if there's anything that, Miranda, you may wanna share about how we try to bring development forward or a more proactive basis.

Sorry, sorry, think you cut up right now.

Thank you, Matthew, and good evening, Commission. Great to see you. I think too I'd add to the on the planning side of the house, permits expire. They don't last forever. And so I know when it nears the time that the permit expires, building code changes as well.

And so there's additional cost and additional time that is entailed with being able to move forward with those entitlements that were issued by the city. So it's it's a ticking clock and both the city is aware of that and tracking that and the applicant is aware of that and tracking that as well. But that changes. So when it comes to the more proactive side of economic development and seeking those opportunities, we have great opportunities through attending conventions such as ICSC and so engaging with leading marketing key development sites. We have a map of key opportunity sites for development or redevelopment that those can then be shared with those who have the capital and vision to be able to make something happen. So that's something we're actively working on.

Yeah. And I do appreciate that. And I guess I'm just trying to understand even more so. I mean, it's great that, you know, the city is going to these conferences. I'm aware of them. But is it is it at all possible? Even though it's not maybe a standard practice, but would it be completely out of the question to, you know, develop some sort of more proactive policy when it comes to some these more ad hoc sites. I'm thinking just anecdotally for myself. I've called some like property owners because I'm obsessed with economic development. Not an expert like you.

But, you know, and I've been able to get through to some of these contacts and have been able to have some some good conversations with them. And I'm just wondering, you know, if there was a resource at the city like that that was doing that as a full time job, you know, what do we see more of, you know, more and more projects on the line?

I think that's really tied to the permitting process commissioner. And so as the permit expires and then staff is following up, are you moving forward? Are we extending the permit? Are we able to? Or is it past its useful life, so to speak? So I would say that it is not a separate standalone policy but it is part of that practice as we go through that time with the building permit life cycle, if you will.

Okay. Thank you. I appreciate that. And I did have a few more questions about this report here. And sorry, because I mean, you mentioned Sears, and so I have to ask. What can you tell us what the what the progress is with the Sears project? I've been waiting for that to be demolished for quite some time now.

To the best of my knowledge, and the project is going through some what we call sub Oh, waiting for

wanna make sure to legal matters.

Agenda item topic. Oh. So I want to take

a look at our wording of our agenda.

No problem. Thank you. Okay. So I don't want to mislead anyone. I don't have the latest and greatest. To my knowledge, what I can say is that they're going through a process called substantial conformance, which basically means they've had to make some tweaks to the project, and those tweaks are being reviewed by staff to make sure that they are still in line with the approvals that we've already granted to them. Beyond that, unfortunately, I don't I don't know the latest on that project, commissioner.

Okay. Thank you. And this is getting to one of commissioner Ira's questioning, but he was he had referenced, you know, pending lawsuits lawsuits and, and, you you know, know, I I don't don't wanna wanna get into a gray area here. But and so I fully understand that this question is not able to be answered. But I was just wondering if, you know, mister city attorney, if you could help me understand what is the precedence for city receiving a lawsuit for a project that it had a financially vested interest in.

So if we go back to the Quality Inn project, you know, there was 20,000,000 grant funding as we all know, but there was also a requirement for 10,000,000 that would have been required by the city to front for this project. And since we had that kind of of a vested interest and we denied it, has there been any precedents for other cities receiving lawsuits when there was a similar circumstance?

Just to clarify, deputy city attorney,

not city attorney. What? City attorney's office.

Staying within my lane. So as far as, you know, litigation goes, I didn't come prepared to discuss litigation or, you know, kind of the you know, what other issues are like that. If that's something that can be discussed for a future agenda, although it might be outside the scope of this budget committee's Sure.

Alright. Fair enough. I think that commences my questioning. Thank you.

Commissioner Ira.

Thank you. Just a couple more questions. Michelle, you had mentioned that we no longer have a redevelopment fund. Do we have any kind of fund currently in the city of Riverside that supports affordable housing on a continuing basis or on a year to year basis?

We don't have local. We do get home federal dollars on an annual basis, about 900,000 annually. We permit local housing allocation. That is the $75 recording fee. So any time a real estate transaction gets sold, there's a $75 that's collected by the state and it's put in a pot. We're still waiting for our next five year plan that we're gonna have to work on on how we're gonna allocate those resources. The state does not release that on an annual like HUD does. HUD gives you a certain timeframe and you have to get your action plan prepared. You go out and do community input and you submit your plan and then you get your contracts and you kind of have that timeline. PLHA is not like that. The state will let us know when they're ready to give us our money.

Gotcha, yeah. We do have

a housing trust fund we did stand up so any loans that we do provide on affordable housing developments, those residual receipt payment loans come back into And that then once we get enough funding in there, we'll release a NOFA to fund some additional projects.

Got you. Have we explored in the city of Riverside, know, first of all I was curious, has the city moved to categorize or track how many homes are owned by large institutional investors like private equity companies? I know some other cities have begun tracking that in order to understand how much of the market share that they have. I know there's like amateur ones done on, you know, Reddit and stuff that estimate the number at around like 3,000 units across the city. So I'm wondering if there's, you know, I know AB thirteen thirty three I think it was, started kind of going after like build to rent projects.

Basically what I'm trying to understand is are we currently tracking how many homes that institutional investors of like thousand properties or more like private equity companies are purchasing? And if there's an opportunity there for us to explore like revenue generation to support affordable housing in the city.

I can tell you that to my knowledge, we do not track ownership characteristics in that way. And I don't believe I'm qualified to speak about revenue generating opportunities related to that. That's what I can say.

But we can take a look at it, and I know we've looked in the past of tracking those numbers, the rent versus owner occupancies, so that we can look at if we need to generate more home ownership opportunities if our numbers are coming down low.

Sure. Yeah, I mean, I think it's, you you even have California Association of Realtors now kind of signing on to this effort. So I think it makes sense for us to look, I think as a Budget Engagement Commission, that might be an opportunity for us to explore as revenue generation for sure. Thank you.

Commissioner Benavides.

Thank you, Mr. Chair, and thank you for the report. I have a question for Ms. Davis. Back to the, some of my colleagues brought up the Quality Inn project that was, I guess, denied. I believe this body was in support and provided some z dollars to support the project. With that said, those dollars that are no longer to be used, will they be put under the category of affordable housing? Or will those dollars be placed back on the general

So there were no measures or funds that were going be contributed towards the project. The 250,000 that was provided to the project for predevelopment was a CHAP dollars which is state grant funds.

Thank you for that clarification. And it's my understanding that based on what's been talked about citywide, it's my understanding that the deadline from the state was extended to the end of this month for council approval. Is that correct?

That is my understanding.

And since so does that mean there's still time for the city to revisit the no vote, technically speaking?

Is that a question? I I think that does kind of border on a on a legal question.

Yeah.

I do not believe that there is another city council session set between now and the February.

Okay. Thank you.

I don't know if that didn't necessarily answer your question.

I understand.

Commissioner Lagner.

Thank you. Michelle, can you come back up? Thank you for your forbearance. So some questions I have are you were talking about the pro housing designation. Can you explain how Riverside qualified for that designation?

I'll let Matthew chime in on that. He actually worked on that.

Yes. So, basically, the pro housing designation program is a points based application where HCD has developed a set of criteria that cities need to demonstrate that they have policies in place or activities that they undertake to earn points. And and, you know, if you earn a certain number of points, they'll they'll, award the pro housing designation. It's like a certification program. And that can include a number of different things, like some of our funding activities that we do through our housing and homelessness services.

Some of it has to do with policy, like zoning and general plan that we have in place. Some of it has to do with process, like how we handle building permits and things of that nature. So it's a a step it's a number of different things that that will qualify you.

Does that qualification those things on the application, does that run into pages? I mean, is this voluminous thing?

It's I if I remember correctly, it's around 60 criteria.

Would it be possible at a future meeting, like, say, March, for you to provide that information to the commission?

I think so.

Okay. Next question. Is there a renewal process for the pro housing designation?

There's not a renewal process, but there is an audit process. It is not on a set timeline as far as I understand it. It's kind of when HCD gets around to it.

Okay. So we don't know the time frame that we

I do not.

Sure. Alright. So I don't know if I direct this to you or to Michelle, but are either one of y'all familiar with the Colette Crossing project or I believe it was the Hole Avenue project by La Sierra. One was a 34, 36 home development. And the other was

you are?

Okay. Yes.

My understanding is that was developed by National Corp. Are they are you familiar with them?

Yes, I am.

Okay.

Are they currently on either engaged in any other projects that have been approved? Or are they on in your presentation, you know, scheduled or

I'm gonna defer that question to Michelle.

We completed an 80 unit affordable housing project that half of them were permanent supportive housing over in La Sierra in Ward 7.

Was that the whole? Yeah.

Okay. And we don't have any new projects currently in the pipeline with them. Alright.

So question. Do I have it right that throughout the state of California because I don't think that this is city of Riverside, but if you could set me correct if it is maybe just city Of Riverside. But that I'm thinking that maybe from twenty twenty two, three, four, forward, that any development projects have a built in requirement for the developer no matter what the I'm gonna I don't wanna use the word income level, but that that the project requires that 20% of those types of units that are built, maybe it's limited to single family homes, but sounds like you know what I'm talking about, be designated affordable housing?

Yeah, so I think what you're referring to is something that we would call an inclusionary housing program. There is no state inclusionary policy or requirement. There is a requirement for government surplus property pursuant to the subdivision land act. When we dispose of surplus property, we have to go through a certain procedure to make it available to affordable housing developers before we offer it to the general market. And we also do have to require a certain minimum percentage of housing projects that are built on surplus property to be affordable. But that's not a general requirement for any development. It's specifically for government surplus.

So, other projects that are being built in the city, like what National Corp has done, and both those projects had some element of that inclusionary component. And I'm also told that the Mission Grove project that came and went, and now there's a new was going to have that. If you can answer one, was that a national never mind. I know the answer to that. Are these other developers and I'm asking this as a general question.

Do they have the same I'm gonna call it mission statement and capability that National Corp does to that they're building these developments in a similar way?

Are you referring specifically to affordable housing developers? Yep. I I I'm gonna ask if Michelle can help with this question. I think the short answer is it depends.

Now were you referring to the successor agencies or the surplus properties where the 20% has to be affordable? We may get market rate developers that come in and it's my team's responsibility for training the developers and walking them through that process. How do you income qualify? How do you rent, what correct rents are you supposed to charge. We come out and we monitor those units annually. We inspect the units. We check their lease files, making sure they're collecting the right documents and they're calculating them correctly. So, we have to do that on the forefront. And we're currently doing that even with projects that are getting density bonuses.

So a question that I have about that is my familiarity with National Corp because I actually are on a national basis and kind of my understanding is for decades. So what is the capability to partner with a corporation like that that has it down pat? They really know what they're doing to try to help educate other developers that might be interested, but they have no knowledge. And that's what prevents a developer from really engaging. So, I mean, I'm sure y'all are completely capable in everything, but the fact that they can speak with a credibility Correct.

For the is there that type of possibility? Possibility?

There's opportunities. Sometimes we do get calls from folks that haven't worked in that space and they wanna get into that space but then we recommend that they reach out to an affordable housing developer that can partner with them on the first couple projects so they can get their You know, get a little bit experience with somebody that already has it.

I'm trying really to not get you engaged. It's kind of a buzz buzzkill, Sean. Sorry. Do you happen to know is Tony Mais still

Yes. He is. Okay. Great. Yes. I saw him a couple months ago.

Interesting. Yeah. It Yeah. Was sad to lose him to Texas.

Yep.

Alright. So when commissioner Ward was asking about how there could be more of a capability to be proactive in homeowner I'm gonna call it relations or homeowner contact. I know as an example in that Mission Grove project that a lot of the there was a lot of organized opposition. It wasn't just trying to get so I'm wondering, it seems like that they were a really educated group and what these things get bogged down in is that the homeowners will hear something about a component of affordable housing. They automatically jump to that is going to bring down homeowner value, cause other things in the community.

And as I'm familiar with the Collette project, the the developer was even very I don't wanna say it was the developer, but there's a reticence about that that application project. In other words, since it's this 8020 and you've got general public coming into the sales office, it it would seem more transparency would be helpful so that people could understand that, you know, it gets into this minutiae of, well, you get as an affordable candidate that's gone through the application. You're not gonna pay ultimately the same market rate price. So there's this hush-hush. The flip side of that is they're not gonna get a they're not gonna get a a a benefit if the market goes up.

I mean, there's there's things in place. And I think to take the mystery out of that, because owners, depending on the area, are quite sophisticated to a level, but not enough to get them over that hump. I hope this is all making sense. So it seems like if we could just demystify this affordable housing I'm seeing y'all kinda Yeah. Not. So I'm gonna be quiet now. I've taken quite a bit of time, but I think that this could all lead to being helpful to having these projects at least not opposed in the city of Riverside no matter where.

Yeah. I I tackle that? I mean, I I said think I hear you. Yeah. I think I hear you, and I think Michelle and I both think a lot about how do you get people to understand what we're trying to accomplish when we're talking about affordable housing and what does it mean.

And to Commissioner Hutchins' comment earlier, you know, one of the things that I was thinking that I just recently shared at a summit that we were at, which is at the top of the low income bracket for our area is starting pay for a city Riverside Firefighter. Like, that is what we're talking about here. So I hear you for sure. And we think about how do we take some of the scariness out of this for people all the time, and it's something that is a really strong factor in the kind of community engagement that we do, and that we aspire to do better at. And that's how I would respond.

If that's,

yeah. Well, several meetings ago, Michelle, you would have been here. You wouldn't have been. But I wanted to go down this path to some degree. If if we could even get the commissioners, you know, educated, I think, to a certain level where, you know, there was that time last fall that we were going out to do some of these engagements at our different community centers. I would be very receptive to hearing more how we as commissioners could get engaged in something like this so that there's more voices than just you all in the city council. I just think that it augment.

Absolutely. We're more than willing to bring that information to you. Thank

you for your time, and thank you for your

have one quick question before we move on. I do look forward to

moving on Mr. Vandenberg, would you mind if I just corrected a record before?

Please, of

course. Commissioner Benavidez, you asked a question about the timing. I said that there wasn't any council members. Yeah, I do believe there's a council session that will be agendized for February 24. What that agenda looks like and whether any issue is there before it, I'm not really prepared. I can't really answer your final question. But I did want to correct that there is there is a city council on February 24.

Thank you for that. Thank you. Okay. One quick question, and we'll move on. With regard to Arena's authority, last year, there was a proposal that came in front of council. It was regarding a project on Victoria Avenue that would have required a zoning change. There was significant community pushback to this in terms of protecting neighborhood character. And at least one councilor made the comment that their hands were tied because of Rina. My understanding of Rina is they can dictate the number of units, but not where they are put. And I'm looking for clarification on that. Yes.

So I do I'm familiar with the project that you're speaking about. Just to clarify, that project did not require a rezoning. It did require or they was it did involve what's called a density bonus. So there is state law in California that says if a developer sets us agrees voluntarily to set aside a certain minimum proportion of units within their project as affordable to lower income or even very low or extremely low income, In return, they are entitled to more development rights than they would have under local zoning. So that is part of state housing law.

It is not RINA. So there's just a a little bit of a clarification there that, yes, there are things in state law that basically tie our hands about what development we are obligated to approve, but it is not Rina, at least not in that direct sense, if that makes sense.

Sure. Thank you.

Yes.

All right. Thank you for your presentation. I have one request, Commissioners, for tonight. I have respect for everybody's time. It's six and we have a fairly large agenda. I'm gonna ask you come with your questions. Be ready. Be straightforward with it. Let's get the questions asked and answered so we can move on with tonight's fairly long night. Next speaker tonight is our fire chief, Chief McKinster.

Good evening.

Good evening. Let's

see.

There we go. And it says committees should be commissioned, so I apologize for that. I saw that error this morning. So well, thank you for having. I know you've been asking me to come. There's been a lot of work prior to me being able to be here related to this specific topic in the fire department. So again, my name is Steve McKenster. I'm the fire chief and happy happy to be here. I've been honored to serve as fire chief for the past fifteen months. Been with the fire department for a little over twenty seven years and been with this agency serving alongside these firefighters ever since.

This report was given to counsel on January 13, which reviews our fire department and the development of this this massive master plan, which is over 550 pages. The plan provides some hard truths about our department that I'll share with you. I've learned also in my time that fire departments don't fall behind all at once. They fall behind slowly. In this case, demand has grown faster than capacity.

Crews have been stretched a little more each year, and services designed for our yesterday's city are expected to protect tomorrow's. Fortunately, this is where my department is today. Our firefighters are performing at an exceptional level, but they are doing this in a system that is increasingly strained. Call volume is rising, incidents are more complex, and simultaneous emergencies are becoming the norm, not the exception. My concern is simple and what I advise the council.

If we do not act, we will not be able to meet the level of service expected from our community. As discussed on January 13, my presentation is not about fear. It's about the responsibility to you and to our Riverside community. It's about rightsizing our organization so we can protect our residents, support our firefighters, and ensure Riverside is prepared not just for today, but for decades ahead. This slide shows our current fire stations coverage.

Riverside operates 14 fire stations, staffs 20 units daily, two twenty five firefighters, and serves 325,000 residents and responds to approximately 47,000 incidents annually. While station locations provide good coverage, unit availability staffing drives our performance. As call volume and call concurrency increases, units are frequently committed, triggering and leading to longer response times and coverage gaps. In short, as I discussed before, we have coverage but not enough capacity to consistently meet demand. This slide shows how calls for service have increased in both volume and in complexity.

In 2024, the department responded to 44,670 calls. And in 2025, we've exceeded 47,000, which is a 5.22% increase. It's about one response every eleven minutes. Since 2015, fire related calls have increased 35% driven by more complex incidents, particularly in the wildland urban interface. I have a note here about state fire maps, which we have been talking a lot about.

13,356 Riverside parcels are now considered at high risk, increasing the need for rapid multiunit response. The result is higher concurrency and greater strain on our system. We are not just responding to more calls, we are responding to more complex, higher risk emergencies more often. Staffing has remained at 225 firefighters for seven years while calls for service continue to rise. Since the last new fire station in 2007, calls have increased 72%.

And since the last staffing increase in 2018, which was about nine people, calls have increased 226%. The trend is clear. Call volume has increased. Staffing has not, leading to higher concurrency and more frequent overload conditions. Our emergency response system has not kept pace with the growth in demand.

AP Triton is a nationally recognized public safety consulting firm and conducted a data driven independent assessment of our emergency response needs, again, totaling 550 pages. This is not a department wish list. It is an objective evaluation of what our system requires to perform safely safely and reliably. This high level overview of the master plan's finding and response times, service demands, call concurrency, staffing, and fire station infrastructure. I think it's important to briefly discuss this work from what insurance service office and centers for public safety excellence, so that's ISO and CPSE, which we are only there's only four in the state that have these two accreditations.

I might have lost my The ISO and CPSE validates that department needs and national standards supports insurance ratings and demonstrates strong governance, planning, and organizational practices. What it does not measure is how the system performs under real world conditions, such as concurrent emergencies, workload stress, unit availability, and peak demand and system overload. That gap is what the master plan addressed, providing a data driven operational analysis of Riverside's system and how it actually performs day to day. Why are response times important? Well, for fires, response time directly relates to impacts.

In the first three to five three minutes, fire is often confined to a single room. By four to five minutes, flashover begins. By six to seven, it spreads outside of that room and survivability drops. Beyond seven, fire requires additional and significant resources to extinguish. With six minutes being our response time goal, in 2024, our average response time was seven minutes and eighteen seconds.

And in 2025, it has increased to seven minutes and thirty seven seconds. Compared to our six minutes goals, fire doubling in every every minute, this would improve response time risk, damage, and system strain. Why is response times important for medical aids? Six minutes is not arbitrary. It reflects the biological limits of survivability. Again, six minutes being our response time standard. Cardiac arrest, brain injury begins within four to six minutes. Stroke, millions of neurons are saved by responses. In trauma, mortality increases by every delay. Our average response time is now over seven minutes.

Compared to the six minute goal, closing that gap will help long term survivability. One of the key findings in this study is called concurrency. This slide shows how concurrent incidents are straining our emergency system. Concurrency means multiple emergencies happening at the same time and is a key measure of our system stress. A typical day, we average three simultaneous incidents.

In 2024, we were in overload twenty six percent of the time. Overload begins at four to six concurrent incidents, and one wild lands response commits enough units to put us in that status. Critical overload concurs when 2% of time leaves little to no immediate response capability and often requires outside assistance. I did provide an example of an experience that we had in July at the Mandalay fire where we had a big wildland fire. And on the other side of town, we had a commercial fire that required two alarms.

And then at that same time when everybody was committed, we had another fire that no units were available. Councilman Hemingway and I were sitting there and he asked, like, Steve, who's going to this? And at that moment, no one. So kind of a sobering reality to busy days for the Riverside Fire Department. If we do nothing, this slide shows the anticipated population growth for the next fifteen years.

The overload and the critical overload will only get worse, leading to more frequent critical delays reducing response times, employee burnout, and service reliability. Another key finding in the study was staffing levels. This slide compares Riverside to our regional peers. Riverside staffs two twenty five firefighters for three twenty five thousand residents or 0.6 firefighters per resident and is the lowest among our peers. Comparable cities range from 0.74 to point three five, with most near or above point nine, which directly affects availability, concurrency, and response reliability.

The study indicated that point nine firefighters per 1,000 residents are needed to reduce overload, meet response time goals, and support growth. This shows Riverside is not overbuilt. We are understaffed relative to the demand. And if you see, LA is at point eight nine, And they are now looking after the Palisade Fire and the Eaton Fire at how are they going to address this as well. To operationalize the study, we have developed a staffing implementation in a phased approach.

Phase one immediate need, and that's today. We need 84 personnel. Phase one would increase total firefighter staffing to three zero nine, would improve firefighter to population ratio, and provide staffing needed to meet the six minute response time goal. Phase two maintains standards, 58 additional firefighters over ten years, which would maintain the point nine five firefighters per 1,000 residents. This allows department to keep pace with city growth and development.

To support phase one and meet the six minute response time goal, we must address current infrastructure limitations by expanding and modernizing fire stations and adding apparatus to safely deploy deploy additional personnel. These investments benefit every ward by improving coverage and reducing overload. Phase one includes rebuilding and relocating four fire stations, constructing two, and adding equipment and new units. Completing phase one allows immediate deployment of added personnel and improves response reliability. System alone cannot achieve response time improvements without these infrastructure investments.

Phase two outlines the long term infrastructure strategy to 2040. This phase is focused on maintaining response capability. As the city continues to grow and incident volume increases, existing fire stations must be rebuilt, relocated, or renovated to accommodate additional staffing needed to maintain service levels. This approach ensures Riverside can continue to meet the community's expectations. To summarize, resources needed for the main emergency response standards.

Phase one in 2025 addresses the immediate shortfall of the 84 firefighters, increasing staffing to three zero nine, along with seven new units, six station projects, and restoring response capability. Phase two then sustains that capability through 2040 with incremental staffing, equipment, facility investments aligned with growth. This phase addresses urgent needs while planning for responsibility in the future. This slide shows the current fire department funding that would be needed for phase one and phase two. Phase one and twenty five addresses the most urgent needs by funding new personnel, equipment and station projects.

Current general fund budget is $65,000,000 with an additional $26,100,000 needed to implement phase one. Phase two shows the additional funding that would be needed for the next ten years. This slide shows how Measure Z does not fully align with the firefighters fire department's needs over time. Measure Z is fully committed, so it cannot fund phase one improvements from '25 to '27, leaving the fire department needs unfunded. Starting in '29, measure z provides limited funding that helps offset a portion of phase two costs, but it does not fully cover ongoing staffing, equipment, or facility needs, and significant gaps remain.

Measure z also sunsets in 2037, leaving no funding source beyond that point. In short, measure z does help us, but it does not solve the long term problem. I wanna close the same way that I did on January 13, with responsibility. Across our city, we are already seeing the warning signs from our system, increasing call volume, longer response times, more frequent concurrency, and delays in service during significant incidents. While we all observed the fire events elsewhere very recently, the lesson is not about another city.

It's about what happens when demand outpaces capacity, when our system operates at limits even when professional, committed firefighters are placed in impossible positions, and response times begin to suffer. No chief, including myself, wanna stand in front of my committee explaining why help arrived later than it should have or why units were not immediately available during a critical moment. I do not want Riverside to face that reality. Everything you've seen today, response times, staffing levels, station capacity, concurrency and funding is measurable. It's real, and it's already affecting my service.

Our firefighters will continue to be out there every day and doing everything they can as they do now, and they will provide the service they can. This discussion is about whether we act now or strengthening the system later. Rightsizing the department is about protecting lives, safeguarding property, supporting the men and women who serve our community, and ensure that we are ensure that when the next significant incident occurs, Riverside's ready. Thank you for having me here tonight and for the partnership. I it's appreciated, and I'm here to answer any questions.

Thank you. First, we will 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?

There are no callers on the line.

Okay. Thank you. Commissioner Ira.

Thank you, chair and chief. Thank you so much for being here. I had requested this item months ago, so glad we could finally get it up in front of the community.

Sorry about that.

No. No. No. No worries. I know it's a big report. Yes. So just wanted to, first of all, thank you for the work that your department does. I live up near the Box Springs Mountains, so the Sugar Fire was right behind my house. It was kinda awesome watching the planes drop flame retardant, but it was terrifying to see the fire crusting the hill, basically. So it's obviously a very real concern. I I did have a few questions based on your presentation. Just with regards to, especially you mentioned overload and critical overload. How frequently do we see do we experience overload or critical overload? And just in layman's terms, what does that kind of operationally mean for someone calling 911?

Mhmm. So it's kinda based on call concurrency. And that means how many calls are happening at the same time. So as you have one call and you get another one, so four of those at once up to six can really create strain in the system because one unit is coming from one area and then it has to go back in that area. But just one structure fire or vegetation fire is six units.

So because you need that amount of staffing and that that personnel to extinguish the fire safely. So 26% of the time last year, we were in overload where we either were on fires or we had concurrent calls that were more than four to six, creating that system stress. And I think my example, the 2% of the time would be what I expressed with council member Hemingway on the Mandalay fire. But we have those other fires in the river bottom where we're committed. And it's not just the first six.

Sometimes you need a second alarm, which is another two and then another three. So it just creates that overall system demand throughout the whole city, which puts that into critical overload. So 2% of the time last year, we were in that criticality, if that And makes

with the potential for that to increase rapidly as we go on in time.

Yeah. It's like the problem of, for example, the housing. We we need to house. We all know that. But it's like the the perfect example of as we put more people in, it creates more stress for my service. Right? And if and if we haven't kept up on that, when we do these good good things on the one side, it creates some pressure on the other. Right? Yeah. So that's kind of the analogy I I use. But it's yeah. I mean, it's it's just gonna increase.

Absolutely. Another quick question for you. For station sorry, I can't remember which ones, but the ones in

services and maybe as we've grown, why hasn't that revenue been able to provide assistance? Or am I misunderstanding how that works?

No. I think that's a great question, but definitely not my wheelhouse

at Yeah.

So in terms of development impact fees, on the public safety side, that's something that we haven't been keeping up with. And what we recently did is we hired a consultant last year to help us work on a comprehensive update to our development impact fees. And as part of that, we're looking at the public safety element of those development impact fees, both for police and for fire. So we're looking to right size that. We really haven't updated our DIP fees in, I believe, two decades.

So the levels we have now are levels from many years ago. And so part of what council recently approved was contract to do an assessment. And then once we complete that assessment, which would be this fiscal year, we would at that point go with recommendation to counsel on increasing potentially increasing for consideration the development impact fees and that includes public safety. The other piece that we're currently starting to implement as well, when we have newer big developments that come in that request to form a community facility district, one thing that we're adding as an assessment to that community facility district is actually a public safety service acknowledging that as the Chief mentioned, there's new development that's great, but that's more strain on the fire department and also on the police department. So what we the council just approved the first one last year for one of the new developments.

And so that funding will be specifically set aside for PD and for Fire. And so we're trying to find ways to make sure that new development is paying its cost. And through development impact fee process and that comprehensive update, one of our goals is to right size those lease.

I'm very happy to hear that and I would strongly encourage the commission to be engaged in that process and maybe provide some level of encouragement if we can or support for that effort, but I'm happy to hear that that rightsizing is occurring. It seems a couple of decades, we maybe lost some opportunities there. Second question was the current Measure Z funding for the fire department. You you said there it's it's fully capacitated, as I think we're fully aware. Is there but is there in the current fully capacitated, is there funding in there for the fire department?

Was was there a vision at the very beginning where fire department was included, just not the phase one that you're describing here?

Yeah. So in terms of the fire department and thinking about the the current year budget, there's about 11,000,000 that's directly allocated to the fire department. Part of You said annual? Annual, yes, for Measure Z. And that changes every year depending on new supplemental appropriations.

So the Chief has been in front of the BC a couple of times in this past twelve months with supplementals, right? So every time there's a supplemental, right, those get added on to the baseline. And then also with new increases to the firefighter salary, with all the new MOUs, those all kind of get added on. So generally, it has been increasing. So the direct dollars are about $11,100,000 but part of what we use Measure Z for is also to offset in the general fund increase in public safety costs. So when you consider that side of it, there's you could say, roughly 20,000,000 annually that is being used from an annual, you know, measures the revenue that supports the fire department.

Thank you. Appreciate it.

Commissioner Ward.

Thank you chief Mckinster for, as I agree that sobering report there. It is concerning where we're at, with regard to our our staffing levels compared to our peer cities. I was talking with my fellow commissioner, mister Hutchins over there. And with regard to, you know, what has been committed in measures here right and this is probably gonna go to Sergio. With regard to what's committed in measures z, you know, we have a 107,000,000 in these expenditures.

We have 84,000,000 in revenues. I'm concerned about, that discrepancy as we head towards 2028, 2029 in terms of our flexibility. Are are there any ways to uncommit some of measures these spending items to, you know, reprioritize that going towards, you know, some these fire needs at all? And and if we deprioritize some of those spending items and uncommit them, you know, would they have drastic community impacts?

Yeah. So, generally, as we develop the budget and thinking about the next budget, so right now, we're working on the twenty twenty fifth through 2020 biannual and that will be coming to PC within a couple of months. And we're looking at kind of the 2026, 2027, 2028 and then that forecast. There's things within there that of course could be reprioritized. There's funding for paving that we do, funding for capital maintenance on parks, funding for capital maintenance within city facilities, vehicle replacements for PD and fire, all that, I mean, it's basically part of an annual process of prioritization and reprioritization.

There are certain things that are built in within Measure Z that are a little bit harder to re prioritize. So for example, when there's staffing allocated to Measure Z, it's more difficult to fire people than it is to say, hey, we're going to do $1,000,000 less in paving or $1,000,000 less in vehicle replacement or we have certain debt service that's built into Measure that will need to be paid one way or another, whether it's general fund or Measure Z. So there are certain things that are a little bit more flexible in terms of the level of funding that we provide to it. And that's what we're currently looking at in our next five year forecast, how to reprioritize acknowledging Measure D revenue is not growing at the pace that it did in the first few years, yet the costs are growing. And so when we come forward as part of the biannual budget development process, which will be coming forward to BC within a couple of months, we would provide what our reprioritization is.

And if there's a recommendation to prioritize differently, then we'd welcome to hear the thoughts when we bring that forward. But yeah, there is opportunity there in terms of what level of funding to put towards certain items, acknowledging there's others that are a little bit less flexible to

move around.

Yeah. I'd be curious to just be a part of those conversations and, you know, to have these conversations offline about, you know, just some of the criticality of reprioritizing some of these measures. And another question, guess, in line with that is, you know, we see I I think it was in the the last report that the general fund had, like, 9,000,000 in in an unanticipated in an unanticipated surplus. So you have, you know, things like that. Obviously, you know, those cannot be anticipated and so they can't really be baked in, you know, permanently.

But could there be some type of policy that is pursued by city council where a portion of of funds that have that are unanticipated, where there is a surplus, could there be some type of policy that reserves some of those things that go back towards Measure Z to to reprioritize it towards, you know, police and fire, you know, roads, public safety, whatnot?

Yes. So, I council currently has has policies that have been adopted related to unanticipated one time revenue, which we've seen, which generally the policy says that at least I think half of that goes to pension obligations. So there is a policy in place and of course, there's a policy in place that could be a policy as amended, right? So that is at the discretion of counsel, but counsel does have reserve policies that identify under certain scenarios what money goes where. And then part of the policy as well on the general fund side is we need to have goal of 20% reserve set aside of that next fiscal year's budget.

So even if you have next fiscal year's budget typically goes up, just acknowledging CPI goes up and just costs go up. So if you have savings in one year, some of that savings is kind of automatically filters into the 20% policy reserve that is needed to maintain that 20% of the higher base of the next year. So in this case, that $9,000,000 was after we shifted $4,000,000 to the policy reserve. But that $9,000,000 was based off of truly onetime issues that caused an increase in revenue. One of them was ARPA, which ARPA went away, but we received about $5,000,000 in additional onetime revenue there.

And so there's a couple of things that were onetime. So that $9,000,000 even though we did get it onetime, it's kind of you acknowledge, Can't bake on that for for ongoing because we know there were a couple one time things that caused it to go up.

Yeah. I'd just be curious as well. I mean, I know you don't have this answer off the top of your head, but you know, just what the the average, you know, kind of one time unanticipated revenue surpluses that we have year over year would be would be interesting to see then how that, you know, funnels down to, you know, some of those other spending obligations that we have. But, yeah, I I I just would remark that I would love to see if, you know, staff could could come up with some creative alternative approaches to, you know, reallocating, reprioritizing some of these funds. I firmly believe that we need to meet FIRE's goal.

I think we have to get there one way or another. So, I just would encourage innovation and would love to just continue to be a part of that discussion. Thank you.

Commissioner Ira.

Yeah, this is a little bit more of a actually process question question for the deputy city attorney. I had checked with Elizabeth, our staff, commission staff that we could make a recommendation tonight based off of this report. Is that accurate? Okay. Well, I would like to make a motion to make a recommendation to counsel as they consider this because, obviously, per my understanding, chief, and feel free to correct me if I'm wrong, the council directed staff to look into ballot language to do a financial analysis, but there were five options.

One of which was no action. That's correct. Is that correct? Yep. So we're coming back now with this assessment to counsel and counsel will make a decision as to which of the five to take. Is that

That's my understanding, yes.

Okay. So I think it would be prudent for this commission to make a to the council because frankly, a little selfishly, don't think no action is an option. So I would like to make a motion. Is there anything I need to do in addition to that or can I go ahead and make the motion? Great.

So this is probably gonna be a little wordy. So if we need to chop it down, please let me know. But based on the report we've heard here tonight, I move that the commission recommends to city council first and foremost to formally adopt the AP Triton Fire Master Plan findings as the city's policy planning framework to direct staff to return with a funded implementation strategy that prioritizes phase one staffing and infrastructure needs, includes a plan to address the Measure Z 2,036 sunset, and establish a long term sustainable emergency response funding strategy and further recommends that a council action is necessary to prevent continued strain on our emergency response capacity as service demands continue to increase. And I'm happy to restate that if needed. I know it's a little wordy.

I'll capture it.

Okay. Thank you.

Before we entertain a second, Commissioner Ward, did you have something to say before we

Yeah, can you repeat that motion actually? Sorry.

No problem at all. The Budget Engagement Commission recommends to city council to formally adopt the AP Triton Fire Master Plan findings as the city's ongoing policy planning framework, direct staff to return with a funded implementation strategy that prioritizes phase one staffing and infrastructure needs, includes a plan to address the Measure Z 2,036 sunset, and establish a long term sustainable emergency response funding strategy. Additionally, we recommend that council action is necessary to prevent continued strain on emergency response capacity as service demands continues to increase.

Okay.

Long term sustainable emergency response funding strategy.

Okay. Yeah. Thank you. Well, I guess my response to that motion, and this is why I raised my hand here. I guess my response to that motion is could it be simplified to just recommend that council remove the no action clause of of of what is gonna be recommended in the future? And another question subsequent to that is, isn't council already or isn't staff already returning to council with a funding implementation plan? So I'm wondering if this is redundant.

I'm not aware if Can we Do we need a second to have discussion on this by the way? Is that

Yes, do. Oh. Yeah. Oh, sorry.

Good evening. Edward Enriquez, assistant city manager Chief Financial Officer, so I can address your question. We are bringing to council on March 3 the options that council asked us to bring in terms of revenue generation. They include a $04 sales tax measure. A combination of that plus extension of Measure Z as Measure Z sunsets in 2036. Also TOT, transit occupancy tax measure. And there was a third one there somewhere that I can't, it's my mind. But we are putting together, it's gonna publish next week. And those are the options. The option to do nothing is not an option on that plan.

But certainly council can take no action when they hear the recommendations from staff. So that's what's planned March 3 for discussion.

Fantastic. So I viewed this Do we need a second to continue discussion? Yeah. Yeah. So I mean, again, I think this is really just the commission sending a friendly to our council that we do believe that this discussion, first of all, holds merit, that it is a critical discussion, that no action is not something that we recommend, and I'm insinuating that the council would take no action.

But just showing that the commission is committed to pushing this forward and that especially the phase one staffing and infrastructure needs as the chief had presented, are especially critical. So I believe that was the purpose of the motion. I don't know that I'd feel comfortable with just sending them that we don't want them to take no action. It's just really kind of a friendly recommendation to counsel that the commission has reviewed this. We do agree that it's critical and that they should take action to prevent any continued strain on services.

My concern with the motion is it lacks a funding directive, and I would not approve all funding directives on the table. If we were to entertain Commissioner Ward's idea of using some of the remaining funds from last year, the $9,000,000 and if we were able to use the $5,000,000 reserves in our budget, and that's $14,000,000 there, which gets us part of the way. If we were specific with the funding source, I'd be okay with that. But I'm not necessarily in favor of increasing our taxes of a percent. And it kind of leaves it open to that if I approve this motion.

Commission Yeah,

go I'll

let you respond. Go ahead.

No, I think that's a fair point to bring up. So it sounds like we would essentially then be, I don't know that that was one of the five options that was presented. What was Vice Chair Vanderberg?

Can I

just clarify something as well? The $9,000,000 and the 5,000,000 are one time money. The request or not the request, but the budget here ongoing needs annually up to 26,000,000 when it's when everything is fully implemented so that's 26 a year so these one time monies will not get us anywhere and I would never suggest that we do that because then we'd have to find the funding again the next year you need a sustainable funding source And right now, we continue to look at ways to cut expenses but to get to what we need to is very challenging in that budget. So that's why the options on the table are unpleasant options but they're options that would satisfy the need that collectively public safety needs as well as the city in general. So it's just not just a public safety measure, but it will help out other areas as well.

Commissioner Scott Coe.

Just in response, thought the summary at the very end of Commissioner Eyre's comments, I thought was a bit more succinct. I don't think we have had a full enough discussion for specific budgetary recommendations at this time. Because there is a lot to discuss in terms of measure Z and that sort of thing. I wouldn't be as comfortable entertaining a specific allocation of funds at this time. But I think what Commissioner Eyre said at the very end, which was I think a little more succinct than your previous one, was this

is

a critical need. Not addressing it should not be an option. And the third was closed it beautifully, I can't it's not coming directly to my mind. But that, you know, a dedicated revenue source needs to be identified without getting into which of the options at this time. Just because we haven't discussed the options. And I'm not sure if that's within the purview of this receive and file update. But I think those that kind of motion would be within this to be directly responsive to

what we heard.

The chair or the vice chair today is the interpreter of the rules, right? But I would say that, you know, when I look at the city council rules, which tends to be the rules that this body follows we discussed this at a previous meeting it's germane, right? And so I think the question is, is it germane to what we're talking about? This is here to file a report, but the fact that you're making a recommendation with that file I think is germane to the topic that you've discussed. So I think it's within to slightly change that recommendation, right, I think it's germane to it.

Commissioner Benavides.

Yes, thank you, Mr. Chair. Question for the chief. I'll try to be as quick as possible. In business, we have long term, short term, and immediate needs to operate. Could you prioritize your immediate needs if we were to say, for example, recommend to counsel to put a Band Aid on your long term needs as the chief of our fire department?

So the phase one piece is that immediate need. That is it. Are going to safety, wellness, and youth. We're developing the phase in approach of phase one right now. So that's going to be presented to the safety, wellness, and youth once we walk that out, hopefully within the next month or two. But phase one, to answer your question specifically, the study identifies that phase one is what we need today. So I understand it's a big lift of the 84 people. And we can't do that all at once. And we're going to work at those pieces. But that's, I guess, that part of the plan is coming in the future here.

Okay. Thank you.

Commissioner Hutchins.

I think I wanna offer this as potentially friendly amendments just to give commissioner Ira possibility of being of course retaining as the original maker of the motion. Because it seems like there's some disagreement of course on like how to fund but I do like the first one of say the first part of your motion because I believe there were a lot so correct me. Is adopting the Triton Marshall. That the term right?

AP Triton.

Thank you. Yep. AP Triton. This as a sort of operating policy of the city, I believe the chief you have confidence in this particular report and its accuracy and the needs that it expresses. And so I would be more in favor of a motion that or recommendation I should say that adopts that plan, urges the city council and of course our finance team to meet those demands or meet those requirements through various levels or various mechanisms as you all are coming up with plans of it now.

And then a third request, those were the first two. One to adopt it as policy, second to urge that these needs to be met. And third, where possible at whatever stages they can bring back those options to this commission as well as of course counsel to see if we can publicly engaged input. This way again, we're not making a decision on exactly what that is. We're recognizing what the problem is, which is these needs to be funded.

And of course recognize that we're all gonna try very creative solutions in what is a very difficult budgetary environment that we are sort of entering. And that recognizing the I think the the needs of this commission which is to be involved into various processes and to bring community input. If Kishoreira, if you would be open to that potential friendly rewrite of your motion. I would then serve as your second so that at least bring it to a vote.

So let me know if

If you're recapturing my capture. Yeah.

This this this is the fun part. Yeah. So how about this? Hearing what commissioner Scott Coe and commissioner Hutchins said and also hearing vice chairs Vandenberg's concerns which you know I'm I'm open to further discussion. It's just I do believe that from the report that we've seen that this is not something that we can punt down the line and, unfortunately, not something not something that we can afford to turn into discussion here in the city.

This is this is something that I think really requires urgent action from this commission. So let me know if this works. And if not, I'm happy to happy to amend it further. But budget engagement commission recommends that city council adopt the AP Triton fire master plan findings, which identify critical staffing and infrastructure needs, and recommends that council action is necessary at this time to establish a long term emergency response funding strategy, including a plan to address the Measure Z two thousand thirty six sunset?

Sorry. I'm I'm denoting it.

I think in this case, this doesn't commit us to any one of the options. I think it, again, recommends recommends critical action to be taken or some action to be taken by counsel, as commissioner Scott Scott Coe said. And the need to establish a long term funding strategy because whatever reality, whatever option we pick, that is gonna be a concern for us.

You wanna give Langer a chance to

Yeah. Commissioner Langer.

Commissioner, I would just ask that I liked how you ended the motion just prior to what you gave. I I don't think any action or no action is an option, and I think having something firm in that language, it's at the front, middle, and that that needs to be chief, you didn't necessarily bring, I don't think, this component up, but the hoard and summit fire or hoard and fire rather could have been much worse than what and and my understanding was there was a real realization of the lack of resources that came with that fire.

Yeah. I don't know if we really can we comment on the Horden Fire? Probably not.

This is as

the Riverside Fire Department AP Triton master plan study and resource needs assessment. So if it relates to that, you would know more about your subject matter and how it

fits Yeah. Into that than I

I mean, I think any wildland fire that occurs is just no different than Palisades. It can be overwhelming to anybody or any fire department.

Commissioner Ward?

Yeah. I'm sorry. I guess another clarifying question I have for the motion is when maybe chief McKenzie, you could give some insight here is well, when is the council know, deciding on whether or not this is going to be on on the ballot? I don't know if that's for you.

March 3.

Edward. Oh, it's March. Is there a a potential to delay that? I agree. There should absolutely be some action.

It has to go to the election board on the sixth. So either yes or no on the third.

That's it. That's it. Okay.

Yeah. I mean, still, I mean, I I don't know. I would I would I think I would make an amendment to to that motion for one of the additional measures to be another another innovative approach, which would be to what vice chair Jan vice chair Vandenberg was getting to is maybe using a using some of those funds that are not permanent. I understand that as a stop gap measure, but then with, you know, some type of commitment to revisit this. So I I would even include maybe using taking drawing up of our general fund reserves that 26,000,000 mark to get to that 26,000,000 mark and then revisiting this knowing that that would be a a temporary stop gap solution to meet your your current your current year goals, and then revisiting maybe a special election in 2027, where we can maybe permit may make some type of permanent solution and also give staff a year to or a year to six six months to a year to come up with some type of innovative approach for reduced expenditures in the measure z budget, general fund budget as well.

I

see Commissioner Hutchins, one thing I want to add before we move on. Commissioner Benavides asked what the immediate need was. It was phase one, 26,000,000. To your point, I asked about the $14,000,000 You said it's not long term, and I realize it's not. But does that not help us get to that immediate need of 26,000,000 if we were to pull from the reserves and the carryover from last year?

Short answer is yes on a temporary basis. But then we have to figure out how to continually fund that.

And

even $14,000,000 on an ongoing basis would be challenging for the budget unless you reassess the budget line items within Measures East Planning Plan.

Thank you. Okay. Commissioner Hutchins. So I'm actually gonna pass it over to you in a second anyway. So it's good that you're next to me.

Would you be because it seems like there's contention and I recognize why about dealing with a measure c extension right now. And so would you be open, Commissioner Iwer, to removing that one portion and leaving it just as we recognize that the AP Triton is sort of the as policy as the need and that we direct or sorry, we request that staff and council that council direct staff to come up with various creative solutions based on what that is. I recognize we wanna put that many of us probably wanna push for a measure Z extension now. But I don't think you're gonna get the votes on this commission to do that at this point.

At least it sounds like this one.

So if you made it to just the two, I will serve as your second. And we might be able to just get that portion passed and you can deal with measures of stuff another day. And with that, with the chair's permission, I'll just yield directly to Commissioner Ira.

Before I let you bring this on, Commissioner Ira, I'm gonna let Commissioner Benavidez speak.

Thank you, Mr. Chairman. I'm concerned about the short term needs of the department, which has been clearly stated in phase one. And mister Enriquez, thank you for opening the door slightly to do that. Figurally speaking, I'm not prepared to make an alternative or substitute motion here at this time. But I think it's critical to address immediate needs and let the chief decide what that means in real time. That's all my comments at this time, Mr. Chair.

Okay, thank you. Commissioner Ira, are you ready to bring this home?

I think so. I do want to clarify that I'm not trying to fix Measure Z right here and right now. And I do believe the motion as it's been revised addresses the concerns that Commissioner Ward and Vice Chair Vanderberg brought up because, again, just recommends action is necessary at this time to establish a long term sustainable emergency response funding strategy, including a plan to address the Measure Z 2036 sunset. So it doesn't direct us to pass anything. It doesn't require us to commit to anything.

It's just addressing the elephant in the room that Measure Z is expiring in 2036, as the commissioners all know, and that I agree we do need a long term sustainable funding strategy. We respectfully, I think, you know, it's it's an interesting idea to use the one time funding, but as mister Enrique said, it you know, we would need to find that 14,000,000 on an ongoing basis. So again, I think I will stick with this motion as it is because I do believe it addresses some of the questions but

Can you repeat it?

Sure.

So just so we all have

the same exact

Budget engagement commission recommends the city council adopt AP Triton fire master plan findings which identify, again, just what's in the report, identify critical staffing and infrastructure needs, and recommends that council action is necessary at this time to establish a long term sustainable emergency response funding strategy including a plan to address the Measure Z 2036 sunset.

Commissioner Ward, we we gotta wrap this up.

I know. I will second what?

I was just gonna second.

Okay. Well.

Yeah. I I mean, I wasn't I wasn't planning. I'm sorry. I mean, I just wasn't I wasn't expecting this motion. I I fully respect your your willingness to do that.

But, you know, the the implication here, you know, with your motion, with this action would would have to be within the constraints of what is going to be brought to the city council in March. And I just don't know if if if I'm comfortable in in supporting all of those measures right now. I think I would want to explore, as I said before, a a stop gap solution which would include some type of commitment by city council to ensure that after when we're halfway through that stop gap solution that that we would recommend as an additional action to the city council that that stop gap solution be addressed to make that more permanent for the next year. I I want I want a full extension of measure z. I want a unlimited, indefinite extension of measure z, but I just think we need to be a little bit more strategic.

And I think this could be slightly shortsighted if we're not evaluating our full options after a year of maybe proposing some sort of temporary measure. So I can't support that motion.

Okay. Do we have a second?

I'll second. We have

a first and a second. Can we vote, please?

Motion passes with,

three

votes descending.

Thank you.

Thank you for having me here tonight. You.

Thank you

very much. Chair,

is there did I know that the intention for this agenda item was to receive and file a report?

Correct. Sergio Aguilar, Deputy Finance Director.

All right, so good evening Honorable Commissioner Sergio Agler, Deputy Finance Director. This presentation will cover the fiscal year twenty five-twenty six first quarter financial update and also some proposed adjustments. So starting off at a really high level before we dive into the details with some key takeaways of our fiscal health and outlook. Overall, the city continues to have a strong fiscal position with record level reserves that could help the city during tough economic times. Now even though we are in a strong fiscal position now, there does continue to be ongoing fiscal uncertainties that continue to cloud our city's financial outlook.

And there is also a growing concern that the ongoing expenditures will continue to outpace the ongoing revenue, which we are actively monitoring. Therefore, staff do recommend restraint on unallocated spending and we will continue to monitor economic conditions and also expenditure and revenue growth and provide additional updates in future quarterly reports. So this slide provides an overview of our general fund and Measure Z reserve balances, which does demonstrate that we are in a strong position. We have approximately $76,000,000 in our policy reserve and that complies with that Citi's 20% reserve policy. In addition to those policy reserves, we also have about $154,000,000 in other reserves that are set aside for specific purposes, most of which are set aside to support our ongoing pension obligations.

And this nets to a total of about $230,000,000 in various general fund reserves. On the Measures E side, we estimate approximately 25,600,000.0 in year end fund balance and that includes that 5,000,000 in Measure Z set aside policy reserve. However, that remaining balance we would anticipate be spent down over the next couple of years. Starting off with the general fund, as of the first quarter review of the budget, there are no significant trends that have emerged that would necessitate a major change to the adopted budget at this point in the fiscal year. However, there are certain areas that either reflect increased expenditures and or decreased revenues, which we are actively monitoring for potential overages.

In terms of the revenue, despite some signs of economic softening and also slower revenue growth, the overall revenue performance does not show a significant deviation from the adopted budget. In terms of property tax, although the growth has continued to increase over the past couple of years, it is anticipated to moderate and also grow at a more normalized rate. And most of the property tax revenue does not come in until second half of the fiscal year, so we will present additional data in future quarterly reports. For sales tax, although sales tax revenue has increased by about 1.1% over the first quarter of the prior fiscal year rate, the growth rate is lower overall, 2.7% that we experienced in 2024, 2025. So we are growing at a bit of a less rate than we did last year.

So signs of softening consumer and business spending are emerging. That being said, sales tax is still within the budgeted rate that we had assumed. For development fees and charges, revenues as of the first quarter are about 17.7% and this is 4.1% less than last year first quarter. Building permits are also down by about 12% compared to the first quarter of the prior fiscal year. Then there's also various other revenues within the general fund, some which are trending lower, others which are trending higher.

Those that are trending lower than last year's first quarter are franchise fees and fines and forfeitures, but the other revenues are trending a little bit higher, business license tax, non development fees and charges and also interest. So overall, those are more or less netting themselves. Now it's important to note that a lot can change from the first quarter and staff generally do not recommend making changes with only one quarter's worth of data. But if these trends do continue, then we would make recommended adjustments as part of subsequent quarterly report. Moving on to general fund expenditures, the city did spend about 26.5% of the fiscal year twenty twenty five-twenty twenty six general fund budget as of the first quarter.

And overall expenditures as a percent of budget, they're generally trending in line with the same period of the prior fiscal year. But it's important to note that expenditures not always can be compared from quarter to quarter given that they do tend to fluctuate. In terms of personnel, at the close of the first quarter, General Fund reflected a vacancy rate of about 9.8%. And although the budget includes a 6% vacancy rate factor, though vacancy rate savings do not necessarily equate dollar to dollar, and so actual savings will depend on salary and benefits of those positions that are actually vacant. One area of the budget that we are actively monitoring for budget overage is overtime cost.

And this is trending higher than budget primarily within the police department. And although we are not recommending adjustments at this time, staff do anticipate needing to make an increase in the overtime budget for the police department and that will be coming as part of the second quarter report once we have additional data to determine the overall level of need that will be needed there. Moving on to Measure Z. The adopted budget for Measure Z totaled about $107,300,000 and that included a net drawdown of about $23,000,000 with a projected ending balance of about $12,700,000 As of the first quarter, Measure Z is projected to end the fiscal year with $20,000,000 in fund balance and that results from a net drawdown of about $68,300,000 which includes those prior year encumbrances and carryovers. In terms of revenue as of the first quarter, Measure Z revenues are 1.8% above the first quarter from the prior fiscal year.

However, that growth rate is lower than the budgeted growth rate. So if this trend continues then it is likely that the Measure Z revenues would come in slightly below budgeted expectations. In terms of expenditures, Measure Z funds include many projects and one time expenditures and this causes quarterly expenditures to fluctuate significantly. So it's a little bit difficult to try to trend those. But similar to the general fund, expenditures are progressing generally as planned and within appropriation limits with the exception similar to the general fund with public safety over time, which is trending a little bit higher.

Moving on to a few of the other funds, starting with electric fund, the adopted budget projects a $13,500,000 net gain. That's when we exclude bond proceeds and capital projects and a net draw on fund reserves of about $55,300,000 when including budgeted bond proceeds and capital projects. The total budget as of the first quarter includes $18,400,000 in prior year encumbrances and carryovers. And as of the end of the first quarter, electric revenues stand at about 29.8% of budget projections. Retail sales are 28.6% of total budget through September and that's 0.5% lower than expected as a result of decreased electric consumption.

Electric expenditures are 26% of total budget at the end of the first quarter, and that's generally aligned with the budget expectations. And electric fund has about 11.8% vacancy rate as of the end of the first quarter. Moving on to the Water Fund, the adopted budget projected an 11,700,000 net gain that was when excluding capital expenditures and the net draw on fund reserves of about $22,800,000 when including capital expenditures. Total budget as of the first quarter includes $9,800,000 in prior year encumbrance in the carryovers. In terms of revenue, Waterfront revenues are about 36.2% of budgeted projections.

Retail sales are 31.3% of total budget through September, and that's about 1.2% higher than we would have expected. And the increased consumption appears to be driven by below average precipitation throughout the first quarter of the fiscal year. In terms of expenditures, they stand at 18.1% of budget as of the first quarter and the Water Fund has a 10.3% vacancy rate at the end of the first quarter. So we would anticipate personnel savings due to normal attrition. Moving on to the Refuse Fund.

The adopted budget projected a net loss of approximately $1,800,000 due to higher disposal costs and also a first year repayment of a loan that was provided from the General Fund Infrastructure Reserve, and that loan is expected to be repaid by 2028. The total budget as of the first quarter also includes about $6,800,000 in prior year encumbrances and carryovers, most of which is associated with pending vehicle purchase that was funded with revenue that came in, in fiscal year 'twenty two, 'twenty three and then moved to fund balance. And at the end of the first quarter, total revenues for the Refuse Fund are about 28% of budgeted projections. And first quarter analysis indicates that Refuse Fund revenues are generally trending within what we would expect at this point of the fiscal year. Expenditures are 23.6% of budget at the end of the first quarter.

And during this period, the Refuse Fund also continued to have staffing vacancies at about 22.4%. And those personnel savings are partially being offset by vehicle purchases that happened in the first quarter tied to those prior year carryovers that were approved. In terms of the Steward Fund, the adopted budget projects a net gain of $1,000,000 when excluding capital expenditures and a total drawdown of approximately $2,900,000 when including capital expenditures. First quarter analysis indicates that the Steward Fund may slightly underperform revenue due to a continued decline in new Steward Connection fee category and that's linked to reduced construction activity and also lower than anticipated development within the city. In terms of expenditures, they are at about 23.2% total budget at the end of the first quarter.

And during this period, sewer funds saw about 14% vacancy rate and some of those vacant by increased adult of those vacant. Parking fund, we adopt the debentures but anticipate to meet projected by a decrease in volume. In terms of expenditures, they are about 9.7% of total budget at the end of the first quarter. And during this period, the public parking fund had about 13% vacancy rate. So these shortages coupled with extended operation hours had necessitated overtime costs, which will offset some of those vacancy savings.

And with that recommendation is that the BC recommend counsel receive and provide input on the fiscal year 'twenty five, 'twenty six first quarter report. And then with at least five affirmative votes, authorize the CFO or designee to record various supplemental probations. So one being supplemental probation of $10,000 from the debt service admin fee fund account for professional services contract to support a public safety impact analysis. Supplemental appropriation in the Riverwalk Landscape Maintenance District Fund in the amount of $265,000 from available fund balance to cover cost to replace trail fencing and playground equipment, supplemental appropriation and other accounting and financial adjustments on an as needed basis from available deposits for onetime costs to be paid by developers of two of the Northside projects and then an interdepartmental transfer of 2.5 FTEs from Parks to HHS supplemental appropriation and other accounting adjustments of about $1,554,000 to reimburse the developer of CFD 38, an amount equivalent to the city fees paid pursuant to that CFD agreement, and that will be offset by CFD bond proceeds. So ultimately, it's a net zero impact to the city.

And then lastly, a sublimation of $400,000 from the general Infrastructure Reserve and also transfer of $100,000 from the liability trust fund to support costs associated with the City Hall basement flood damages.

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?

There are no callers on the line.

Yeah, see no speak requests. I am looking for a motion to approve recommendations. I'll second. Thank you. Can we have a vote please?

Motion carries unanimously. Thank you.

Don't go too far. Mr. Aguilar, Deputy Finance Director, presentation.

Alright. So every year, the city's various boards and commissions are directed to create a work plan that aligns with the purposes and functions enumerated in the municipal code and also that ensure meaningful input and action resulting from the commission meetings. So the work plan for the BC was initially presented in November 2023 and then subsequently again in November 2024 and was accepted without amendments. So we need to now finalize the work plan for 2026, which we are presenting today for VC review and input. And we did work with Chair Williams before the meeting, and we are not recommending any changes to the work plan that was adopted the previous year.

So the first set of actions in the 2026 work plan for the BEC revolve around the BEC's involvement in the biannual or annual budget development process and also the Measure Z reporting and funding recommendations. So this includes actions for the BDC to serve as a conduit for committee engagement during the budget development process and also advising council on allocating a Measure Z revenue and spending priorities. So just a little bit highlights of, you know, how BC met this in 2025. You know, BC recommended city council approved various Measure Z items that came before the BC, particularly within the police and fire departments, received presentations and recommended approval of the amended twenty twenty five-twenty six budget and then also engage in discussions to explore the monetary support for nonprofit organizations. The work plan also includes an action associated with BC receiving reports from staff that provide essential data and performance metrics related to the allocation of city funds.

And in 2025, BC received updates and provided input on Measures Z funding for seniors and individuals with disabilities, housing and human services programs, fireworks enhancements, and also an update on the pavement management program. And the commission had requested some additional programs to receive updates that we're trying to incorporate into 2026. The work plan also includes actions associated with BC receiving quarterly financial reports, such as that previous agenda item that was just presented, and also financial performance indicators that we present one time a year. And this helps enhance transparency in the city's financial performance and also foster accountability in the responsible management of city finances. And in 2025, the B.

C. Received several quarterly reports, the annual financial health indicators and then also a report on our CalPERS unfunded accrued liability. And feedback that we received during these reports and presentations, they help provide available perspective to city staff. And then lastly, the work plan also includes an action for the BC to work with city staff to improve public engagement. And in 2025, staff presented BC with an update on the biannual budgetary proposed community engagement strategy and also received feedback on that community engagement.

And then we also had various BC commissioners attend our community budget forums that we had in October and November. So with that, our recommendation is that the BC receive a status report and provide input on the 2026 BC work plan, which again, we do not recommend making changes to the plan that was approved last year by BC. And then the next steps would be Chair Williams would present the work plan to the Finance Committee and then recommissioned either present to the respective Council Committee. And that would happen in the March meeting.

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.

Do we have any callers?

There are no callers on the line.

K. Commissioner Scott Coe.

Just wanted to make one recommendation in my last meeting. I would recommend and I'm not saying you need to add this to it, but just providing input on the public engagement side. And I brought it up in past meetings. The city does have an adopted community engagement policy. And that includes a toolkit for that community engagement.

I would really recommend, since it's part of charter of this commission, to help engage with budgetary items with the public, that the commission look into and engage with the city staff on how the commission and city can utilize that policy and the tools within to increase engagement beyond just attending meetings. But to go maybe one step further. So, just a recommendation.

Commissioner Benavidez.

Just a follow-up to mister Scott Cole's suggestion. And as a commissioner, I've made efforts to talk to my colleagues in the nonprofit field environment about coming to the meetings and making recommendations to us for support. Thus, we, as a commissioner, one of our duties is to make such recommendations to counsel. But then I hear from sources, including people on this body, that there are no measures e dollars available until 2028. And so I'm kinda confused as to as we solicit civic engagement to make recommendations to us when we have very little authority to make such recommendations to counsel.

So I I think, mister chair, I think we need some guidance more detailed to measure z as far as moving forward so that we can bring people into this building during a meeting where they can make a recommendation to us on what they feel is needed with their taxpayer dollars. So I'm not asking for anything at this time, but I need some more direction. And maybe from counsel as to what I'm saying from a bigger standpoint as it relates to the folks out there in our city who support Measure Z through their self inflicted tax dollars. That's it for me, Mr.

Okay. Thank you. If nothing further, that just leaves Commissioner Ira,

I'm sorry.

I'll be super quick, Jared. Sorry about that. Just wanted to say I I brought this up before. If we can find a way to make the dashboard accessible to more folks, the the Citi financial dashboard, the Measures e dashboard that you had shared with us previously, I think that would be great. Maybe adding it to the three eleven app or something like that where folks can just see in real time what money is being spent on. That would be cool. So, just adding that in. Thanks.

Okay. Do you have a Deputy Finance Director update for us tonight?

Yes. So, just one quick update related to the community budget engagement. So, I know I sent an email out a few weeks ago. Our community budget survey was released on January 22 and it's going to be open until February 23. So there's still a little bit more time left.

So just kind of encouraging BC as part of one of your duties to help maximize public engagement to try to continue spreading the word on that budget survey so we could get as much participation and feedback on how residents of businesses within the city would like us to spend the funding and the dollars. And so wanna make sure, put that out there and hopefully we'll get more participation in that online survey.

One quick clarifying question because as an instructor I get this with my students a lot. February 23 like midnight or like 11:59 like is it all the way through Monday or do like because that's a Monday.

I'll double check. It's probably gonna be end of day.

Okay. Just making sure because I I actually have had three people that ask me that and it tells me like you

can just fill it takes

two minutes. Okay. Thank you.

Thank you very much.

Thank you.

I'm gonna read the future items listed on master calendar. Those

Vice include Chair, can I ask a

Oh, please?

Just maybe a housekeeping question. So on item number six, right, and that was the Riverside Fire Department AP Triton master plan and Resource Needs Assessment. There was a recommendation that was made in the report, which was to file, you know, receive and file the report. There was a motion that was made was and I think it's unclear whether the intention of that motion was to also receive and file the report or not to have that as part of the recommendation.

Well, don't think it was.

But It was not. I just want to make sure that

we're Yeah, I don't believe it was. Okay. Are we in agreement?

The city clerk will be the one who determines what it was.

Receiving file, what is required to wrap that portion?

No.

Generally, that's what we voted for is the recommendation to receive file.

I don't think we have typically. So if we're doing it wrong, we need to correct it going forward. So

for the sake of the minutes, if there was no pardon me, the report is just a receive and file and you had no other recommendation no formal action would have been taken like you did on the other items previously but since you did make a direct motion I I would say that as you said, if you didn't just receive and file, you actually made a motion.

Well, in that case, I would think it would be included in the motion that was passed.

Sorry, I just wanted to make sure

we were clear

on the record.

Thank you. Thank you.

Sorry, do I need to do we need to do that again? I can try to remember the No, no,

we're going forward. Okay. Master calendar feature items. Cost of childcare as it related to Measure Z. Quarter two parking program, biennial budget workshop, cannabis update, measures the engagement, and then on the recurring calendar, review of code of ethics and selection of chair and vice chair. Being Commissioner Scott Coe's last meeting, I want to acknowledge him and thank him for your thoughtful input, for your work and contributions. You'll be missed. This wasn't a voluntary step down. This was a forced part of the restructuring. We all agreed to it. Unfortunately, you were collateral damage to that. But I

I am I am very happy to be the one to be stepping down. This is excellent commission. You guys all do just tremendous work, and including those who weren't able to be here tonight, and then just keep it up. Thank you.

Thank you. The next regular budget engagement commission meeting is scheduled for Thursday, 03/12/2026. This meeting is adjourned.