Finance Committee - Regular Meeting

Evening everyone I will now call this meeting to order since it is 5PM. Would the city staff with us please introduce themselves?

Sergio Aguilar.

Elizabeth Martinez, Finance Department.

And Susan Wilson with the Riverside City Attorney's Office.

George Khalil, IT.

Julie Nimis, Finance.

Brian Carter, Finance.

Michelle Davis, Housing and human services.

Christina Klabaugh, marketing communications.

Good evening. Gil Hernandez, assistant city manager.

Frank Asuma, obviously from the PD.

Good evening, Mike Avila, Fire Admin Services Manager.

Mike Allen, Fire Department.

Anne Lavelle from the Museum.

Jessica Herdina, assistant library director.

Ed Lara, public works engineering.

Thank you so much for introducing yourselves. You will now join me in giving the Pledge of Allegiance. I

pledge allegiance to the flag of The United States Of America

May we have the inclusion statement read, please?

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 or 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.

Secretary, would you please call roll?

Commissioner Ira? Commissioner Bello? Present. Commissioner Roton? Present. Commissioner Hutchins? Present. Commissioner Ward?

Present.

Commissioner Benavides?

Present.

Commissioner Chernikov? Commissioner Lagnar?

Present.

Vice Chair Vandenberg.

Present.

Chair Williams. Present. We have quorum.

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

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

Secretary, do we have any callers?

No callers.

Madam Chair, I move to approve the consent calendar.

I have a motion to approve the consent calendar. Second. It has been moved and seconded to approve the consent calendar. Can we take a vote?

You may now begin voting. Motion passes unanimously. Thank you.

All right. Item four, Sergio Aguilar, Deputy Finance Director. May we please hear from you?

Alright. Good evening, Commissioner Sergio Acelor, Deputy Finance Director. So this presentation is intended to provide you an overview and also an opportunity to offer feedback of our proposed twenty twenty six through twenty twenty eight biennial budget that we will be presenting to City Council next Tuesday. There are about 32 slides as part of this presentation, and it is mostly in line with the same presentation that we provided a few months or a few weeks ago during the workshop. So in the interest of time, there are a few that I'll go rather quickly through to be able to offer sufficient time for discussion and feedback.

And then of course, as you all noticed, we are joined by the representatives of our various city departments who are also going to be available to answer questions when we get to the end of the presentation. So just starting off, and I think you are all very familiar of our budget development process, very comprehensive process, beginning with the budget office working budget, aligning our expenditure baseline expenditure projections with revenues. At the same time, we begin working with departments to put together list of critical needs. And then also this year, as we were looking face potential deficits, also working with departments to put together a list of options to make deficit reduction measures. And then during that process, we also engaged the community.

And so we had community forums throughout the city. We had about six. And then subsequently, we released a survey. And then through the beginning of 2026, just working with the city manager's office, working with the department leadership to put together a budget that addresses the city's priorities but then also acknowledges the fiscal limitations. And then last month, we started engaging the city's various boards and commissions as we did with the BC and then now taking the proposed and then ultimately going to City Council for the adoption of the budget next month.

And then overall, just the budget strategy in a very simplistic manner. One, looking at what are the level of resources we need to just maintain the current existing level of service. Then we compare our expenditure and revenue estimates to then see what more can we actually afford. And then from there, identifying the needs and the priorities above the baseline to determine where we eventually want to go with the budget. In terms of our community engagement, we do perform engagement to gather input from residents and business owners, and that's as mechanism to foster transparency and also inclusivity in our budget process.

And as I mentioned earlier, we had six forums throughout the city. And then we also had the online survey available for about one month. There were about 50 individuals that attended our community forums and then about two twenty seven respondents to our online survey. And as part of the attachments to this agenda item, you do have the outcomes to both the survey and then also the community forums. So I won't go through that in detail.

But if you have any questions on those, we'll definitely be able to answer them at the conclusion of the presentation. So starting off with a high level overview of the city's operating budget across all funds. So the operating budget alone, which is excluding capital outlay and also encompassing all city funds, it totals about $1,410,000,000 in fiscal year 'twenty six-'twenty seven and $1,430,000,000 in fiscal year twenty seventwenty eight. And this represents approximately a 3% increase compared to the current year budget. Electric and water fund comprise the majority of that at about 43% combined and followed by general fund and measure Z, which is about 34%.

And then the remainder of the Citi's various funds are what meet the remainder there. In terms of citywide personnel, so this slide here identifies total citywide personnel across all funds and then year over year change by fund. And so compared to the current year adopted budget, the personnel increases for fiscal year 'twenty six, 'twenty seven are net positive by only one FTE. And in the second year in 'twenty seven, 'twenty eight, there's an additional four FTEs. So overall, bottom line, very minimal FTE changes being proposed.

And one thing I'll note is that this does not include the FTEs that are proposed to be frozen as part of some of the deficit solving measures, And that is because we're not proposing to fully eliminate. There's about 38 positions, and we'll walk through those later. We're not proposing to fully eliminate them. It's just for now unfunding them so they're not reflected here as an elimination of an FTE. And then going on to general fund and Measure Z.

So I'm going to start off with highlighting some information on the projected deficit, how we are proposing to solve it, and then also just get into a high level overview of the proposed general fund and Measure Z budgets. So just at a high level, the city is facing potential multiyear deficits due to both rising costs and also slower revenue growth. But there is still a significant amount of uncertainty, and the forecast across the five years does get murkier the further out you go into that five year forecast. But we are recommending taking some proactive measures now to balance potential multiyear deficits with a strategic mix of solutions, and we will walk through those. But given the uncertainty, we also want to be flexible in our approach.

And if things do turn out to be better than what we are projecting, then we can also explore in bringing back some of the proposed reductions second or the future years. And all that being said, it is not doom and gloom and we still have very strong levels of reserves, but we are proposing to mostly keep those reserves intact as part of this proposed budget. And to my earlier point, so this slide demonstrates the reserve balances for the General Fund and Measure Z. We have about $76,430,000 in policy reserves that would remain untouched as part of our proposed budget, and that addresses that 20% policy reserve requirement. Then we have about 161,200,000 in other reserves, most of which are related to addressing pension liabilities.

And as part of our proposed budget, we are recommending using some of the non policy reserves, and we will go through that in detail. On the Measure Z side, we have almost $30,000,000 in total reserves when including the policy reserve. And as you will see, that is anticipated to be drawn down across the proposed five year plan. So now we're going to talk a little bit about the deficit and then our approach to solve it. I'll keep on going.

I think you guys have the slide deck. There it goes. Oh, there you go. All right. So in June '4, the city council adopted the last biennial budget and that included a five year plan.

So it had a forecast for five years. And that plan was balanced with both the revenues and expenditures aligning across all five years. But since then, the city has experienced both slower revenue growth and higher expenditure growth compared to that forecast. So when you compare the balanced multiyear forecast from the last Biannual Budget to what we are looking at currently, revenues are projected to be lower by about 8,100,000 in the first year. And expenditures at the same time are projected to be higher by about $19,000,000 in the first year and about $25,000,000 in the second year.

And so this upward cost pressure and slower revenue growth is what is generally materializing in the projected deficit of about $27,100,000 in year one and $34,000,000 in year two. So in terms of Measure Z, although Measure Z is different because as part of the last five year plan, the approved budget was strategically drawing down on the fund balance, we did do a similar comparison and analysis for Measure Z to see how those revenues and expenditures forecast compared now versus what they were before. And under this same viewpoint, you'll see that the revenues in fiscal year twenty six, twenty seven are down by about 5.2 and then down by 5.7% in the second year. And then the expenditures are up by about 4.6% in the first year and 6.7% in the second year. So combined, this results in a net deficit about 9.8% in year one and 12.4 in year two.

So staff are proposing a multi pronged approach to address the projected deficit with a mix of both onetime and also ongoing solutions. And this approach was developed under a framework that protects core services that strategically phases in reductions, acknowledging that there are higher level deficit in year two and out years, making some of the potentially more painful reductions starting in the out years to buy time in case the forecast gets better and then we're able to pull back some of those reductions. Also looking to maximize some of the available onetime solutions while at the same time trying to minimize the use of reserves and that ultimately helping us maintain some of that long term fiscal sustainability. So this slide here shows our proposed approach to solve the budget, first being cost reduction. So finance staff collaborated with city departments to identify cost reductions through two steps.

One is review we reviewed expenditures that historically generate savings and then also evaluated areas where reductions could be implemented without having a significant impact in core city services, which included strategically holding some positions vacant. So staff are recommending total reductions when you combine General Fund and Measure Z of about $17,950,000 in the first year and $22,270,000 in the second year. And some of these reductions, as I mentioned earlier, they're phased up where they are higher level of reduction for the same issue in the second year. One very important point to note is that even with these reductions, most of these programs still receive budgets that are higher than historical levels before this last biannual budget. So when that last biannual budget was put together, that assumed much higher level revenue estimates.

So there were larger increases made to budgets. But when you take that out of the equation, these proposed budgets are still higher than the typical historical levels for most of those programs. And the reductions represent about 2.1% of a general fund budget and about 10.4% of Measure Z. Now there is a detailed attachment within the packet today that identifies all of the cost reductions. And then there was also, I think, a comment during the workshop that we had of putting a column that identified potential service impact.

So we added a column, and then we added bit more description on some of those areas in that description column in that attachment. So hopefully that additional information was helpful as you were reviewing those. The next piece is use of the unassigned fund balance. So at fiscal year twenty four, '25 year end, there was a net $9,560,000 unassigned fund balance, and that was after to other reserves. So we are proposing to use that one time surplus to offset the deficit and that allows us to decrease the need for more reductions.

Another solution is related to the general liability trust fund. So there's Council adopted a policy that we have to set aside 50% of estimated claims and liabilities to that will potentially need to be paid out. And our methodology requires all the funds to contribute to that fund based off of historical claim trends and then also staff tied to them. There were a few years where the general fund and Measures E made supplemental transfers to that general liability trust fund to try to get to that 50%. But in those years, we did not make the charge to the other funds to pay their fair share.

So we're kind of doing a one time true up to account for those three supplemental payments at the general fund and measures he made. And for a one time, that one time true up allows us to bring down the level of general fund contribution that would be needed in 'twenty six, 'twenty seven. In our fees and charges, so we are recommending including in the municipal code requirement that as part of the annual master fees and charges update that goes to Council, finance to include recommended consumer price index increases, acknowledging that Citi's cost of providing service increases every year as our costs increase. And we typically don't do comprehensive updates for several years. And so this strategy allows us to every year incrementally increase fees according to CPI.

We would still do more comprehensive fee updates every three to five years, which is kind of more of the industry standard, but at least it would help us not need to have mass increases when you go three, five, ten years without having any increase. And then also strategically using the Section 115 trust and set aside, and we have a slide a little bit later to talk through that one in detail. So this slide here really just captures at a high level the reductions, general fund and Measure Z, and really just trying to display we are living within our means, making reductions to our budget in order to be able to balance while at the same time acknowledging there are some areas where there are critical needs to increase funding in police, in fire, to address our claim liabilities, funding to support the Riverside County Animal Services contract now that we're part of a no kill policy and then also just addressing inflation costs. And then as I mentioned earlier, about 38 FTEs that would be unfunded as part of this proposed budget in order to help address deficit. And then this slide here really just has high level the breakdown of those cost reductions by department in the general fund.

So a couple of things to note here. For PD, although you'll see they have the highest dollar amount of reduction from a percent of budget perspective, they are among the lowest after a fire. So definitely protecting public safety. And then most departments with a few exceptions have reductions under 4% of their budget. And then we're looking at that same viewpoint but at Measure Z, you'll see the percent of budget is greater because Measure Z has a lower bottom line annual expenditure.

So a reduction will result in a higher percent of budget. But to my earlier point, most of these programs are still getting higher amounts than they were historically getting before we had these larger increases in the last biennial budget. So the Section 115 was established in 2019 and that set aside funding to help smooth out our pension obligations in the future years. The city's initial goal was to reach about $100,000,000 in that trust before starting to draw down on it. In addition to that trust, we also had a general fund reserve set aside that helped us offset contributions to that trust.

And the trust is anticipated to reach $100,000,000 in fiscal year 'twenty six, 'twenty seven. So if you look at the chart, the blue line is what level we would be required to pay from the general fund if we did not have a trust to offset the payments. The orange line is under the current proposed budget, what level of general fund would pay. And so you'll see we're smoothing out the payments there by starting to draw down on the trust. But even under our current schedule, there's enough balance in the trust to take us all the way through what would be those peak periods, and it helps offset approximately $11,000,000 annually.

So now we covered the deficit and our proposal to solve the deficit. We're going to get into some details of the general fund and measure the proposed budget. Starting off high level with the general fund, here you could see we are proposing a balanced budget with revenues aligning with expenditures across all five fiscal years, the two fiscal years of the actual proposed budget, and then the last three years of the forecast of the budget. And there's still annual revenue growth between about 0.3% to 5.4% across the five year period. This slide demonstrates a projected growth in general fund revenue by category.

And overall, revenue is projected to grow by the 0.3% in first year, 5.4% in the second year. Most revenue categories are projected to continue growing at moderated levels, but there are a few exceptions, and we have projected decreases compared to the twenty twenty five, twenty twenty six fiscal year. There's some onetime revenues that are included here. So if you remove some of those onetime revenues and just account for the kind of baseline overall growth, the baseline growth is about 3.6% in year one and three point nine percent in year two. So this next slide demonstrates year over year general fund expenditure growth by expenditure category.

And just a couple of things to point out here, when thinking about percent of budget general fund expenditures by category, personnel is about 71% of our overall general fund expenditures. So And here, you'll see that personnel is growing by about 3.3% in year one and then 5.9% in year two. And so just one thing, the way we place of caution is if the personnel growth levels percentage wise are higher than the revenue growth levels percentage wise, then that may lead to further complications in the out years. For CalPERS UAL, although you'll see a high percentage change there, that 115 trust is what is helping us mitigate some of those impacts, which is using it as intended. For non personnel, the decrease is mostly tied to some of the proposed strategies that we included in the budget to address deficit and then some of the increases like in the special projects that's related to that new animal services contract that I mentioned earlier and also related city programming.

So this next slide here just has a high level breakdown of general fund expenditures by program area. So on the general fund side, about 56% of our expenditures are related to public safety, followed by community services at 25%, and then internal services being 15% of the budget. Now as part of the attachments that are part of your packet, one of the attachments is a version of the presentation we provided in the workshop. And that has a detailed breakdown by these categories of department which present by department. So that has that much more detailed view if you want to look at for reference.

This next slide demonstrates breakdown of general fund budget by department with over year percent growth. And just kind of top line here, what you will see is although we are proposing reductions, most departments' budgets are still growing in fiscal year 'twenty six, 'twenty seven, and they will all grow in fiscal year 'twenty eight. And Police and Fire have the largest dollar growth, growing at a combined $16,000,000 in the first year and $5,000,000 in the second year. And for some departments like Public Works, one of the reasons why you'll see a decline in the first year is because there were a few things that were included in the last biannual budget that were intended to be onetime that would automatically drop. And so part of that was already assumed as part of this budget where there's a natural decrease in some onetime planned expenditures.

Now moving on to Measure Z. This next slide shows the plan at a high level. And of course, we have an attachment with the detailed spending plan item breakdown of that. So Measure Z, in terms of revenue, it has lagged behind general fund growth. The budget does project modest growth of 0.5% in the first year, followed by 2.9% in the second year.

In terms of expenditures, one thing to note is budget, it did strategically increase expenditures because there was a high fund balance within the Measure Z fund that we wanted to strategically draw down. But the expectation was once we drew down on that balance, then the annual expenditures would be more closely aligned to the annual revenues as you see on the general fund side. So one of the reasons why you do see decreases in expenditures compared to, say, 25%, 26 is because there was already a preplanned reduction in cost because we were spending down on that fund balance in addition to some of the reductions that we are proposing within the current budget. Now this next slide breaks down Measure Z expenditures by category. And a couple of notes here.

Personnel costs, they're primarily due to public safety. That's most of the FTEs within Measure Z are public safety related. And then there's also decreases in the non personnel special projects and capital outlay, and those are due to both those planned decreases and also some of those proposed reductions that we are including in this proposed budget. This next slide shows Measure Z expenditure by program area. So here, important to highlight, public safety is the majority of Measure Z at about 72% and then followed by community services at about 21% and then some other categories.

And again, there's a detailed version department by department breakdown as part of your packet. So this slide shows Measure Z expenditures by department. For Measure Z, although to my earlier comment, most budgets are decreasing compared to the current year, but part of that is those planned reductions and then also some of the proposed reductions. In terms of FTEs, this slide has the breakdown by department of positions and associated costs of those positions when you combine general fund and Measure Z. And I know we covered FTEs in one of the earlier slides, but generally not recommending many changes in FTEs in the first year and proposing to fully fund one of the fire marshals that was previously approved in a previous budget.

There are some technical shifts that we're proposing between some of the funds and also some new positions related to the museum, acknowledging the anticipated reopening of the museum. Now moving on to the major enterprise funds. This proposed operating budget includes the five major enterprise funds, and you'll see that this accounts were about 56% of the total citywide operating budget. So these five funds, about 56% in the first fiscal year and then 55% in the second fiscal year of the proposed budget. So the budget for each of these funds is aligned with their respective approved rate plans and fee schedules.

And most funds are operating surplus with refuse and sewer strategically drawing on available fund balance to cover some of the operational costs. Now we're going to go into some detail on the enterprise funds, starting with electric. The proposed budget estimates an operating gain of 11.3% in the first year and 32.1% in the second year when excluding the capital expenditures. The primary source of revenue for electric fund is retail sales, and and that's about 75 percent of funding, about 75% of expenditures. The proposed budget for Electric Fund outlines a year over year increase about 5.9% in the first year and 3.5% in the second year when you include capital expenditures, and this increase is driven by a few factors.

The primary factor being a rise in power supply cost, and that accounts for about 48% of electric fund's total budget. There's also proposed a decrease of about five FTEs in electric fund that offsets the fiscal impact of some department reorganizations and reclassifications that better align the department's staffing needs and priorities. And then the electric funds reserves, in conjunction with the line of credit, they will be used to balance a budget over the two years and also meet minimum target reserve levels established by the RPU's cash reserve policy. And this financial strategy that's included within the adopted budget allows the electric rate plan to minimize rate increases and maintaining minimum required reserve levels. Now the proposed budget for the Water Fund estimates operating gain of about $11,300,000 in 'twenty six'twenty seven and $9,200,000 in 'twenty seven'twenty eight when excluding capital expenditures.

The primary source of revenue for the Water Fund is also retail sales, which covers about 59% of expenditures. The proposed budget for the Water Fund reflects a year over year increase of about 19% in year one and then reduction of 2.4% in year two. The increase in year one is primarily driven by higher system operations and capital cost. And the Water Fund's undesignated cash reserve in conjunction with the line of credit are projected to maintain required minimum target levels in accordance with the cash reserve policy. Moving on to the Refuse Fund.

Refuse Fund is expected to operate at a deficit of 2,100,000 in the first year and 1,800,000 in the second year, but there are sufficient reserves to cover the anticipated deficit. The refuse fund revenue assumptions for fiscal year twenty six twenty seven and 2720 incorporate the City Council approved rate increase structure for residential solid waste services through 06/30/2028, and the revenue increases are expected to eliminate the need to rely on reserves for operational costs starting in fiscal year twenty eight-twenty nine. And the proposed budget also accounts for some rising solid waste costs attributed to a variety of factors, including inflation driven increases in equipment maintenance, elevated recycling and disposal fees and also new requirements such as SB thirteen eighty three. Now despite the addition of 17 new solid waste vehicles in the past two years, the existing fleet still continues to experience high mileage and also heavy wear, and that results in increased maintenance requirements and also diminished efficiency. So the proposed budget does include about $1,300,000 in the first year and $1,500,000 in the second year for continued replacement of solid waste vehicles.

Now moving on to the Sewer Fund. The proposed budget for the Sewer Fund projects an operating loss of about $670,000 in the first year and $2,400,000 in the second year when excluding capital expenditures. The operating losses are driven by increased operation costs and also lower revenue, and the annual loss does significantly increase when including capital expenditures in the second year. Sewer fund revenues for fiscal years twenty six-twenty seven and twenty seven-twenty twenty are projected to decline slightly compared to the prior forecast, and that's driven by reduced service demand and reduced new connections. The proposed budget maintains the city's commitment to reliable and compliant sewer service by funding essential operations of the regional water quality control plant.

In according with federal, state, regional and also local regulations. There are also economic trends that continue to exert upward pressure on expenditures with significant inflationary impacts on key operational costs, including chemicals, consumables, materials, labor and also energy. And the Sewer Fund is actually not expected to meet the reserve policy minimum starting in fiscal year twenty seventwenty eight unless revenues either increase organically or new rate increases are adopted. And then the public parking fund, the proposed budget for the public parking fund projects operating gain of about $680,000 in the first year and $547,000 in the second year when excluding capital expenditures. Public Parking Fund revenues will continue to stabilize and moderately increase due to Park Riverside's Parking Way program, the parking access revenue control system and also approved parking rate and hour schedule.

Operating expenditures are expected to increase with the expanding parking enforcement handheld devices with RPD and PANSS in the traffic bureau. And also a new downtown parking operations contract is anticipated in this next fiscal year and will require a higher level of management oversight for event parking, valet services, property management, site security and also general maintenance. And the budget also includes costs associated with planned structural repair to the downtown garages and also capital projects aimed at enhancing consumer safety and also attracting new customers. So now moving on to the capital improvement plan budget. So the city prepares CAP, Capital Improvement Plan, which is a strategic tool for aligning capital project project needs with available resources.

And the capital projects are funded through available operating revenues, through bond proceeds, through grants, fund reserves and also any other available fund source. Bonds and grant revenues are typically not included in the proposed budget, but budgeted when the bond is actually issued or when the grant is actually awarded and also approved by City Council for use on the specific capital project. So the proposed fiscal year twenty six through twenty eight capital improvement plan budget totaled approximately $167,100,000 in the first year and $161,200,000 in the second year. And approximately 75% of the CAP is actually within the Riverside Public Utilities, and it focuses on maintaining the city's electric and water infrastructure. Another 20% of the CAP is dedicated to transportation projects that encompasses activities such as extending and widening streets, street resurfacing, construction curbs, gutters, center medians, bikeways, pedestrian facilities as well as other right of way acquisitions and traffic signal improvements.

So with that, recommendation is that the BC receive and provide input on the proposed budget. And of course, myself and the departments are here to answer any questions.

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 calls?

No callers. So

we're gonna open the floor for questions and feedback from our commissioners. If you plan plan to make a motion tonight, please recommend if you plan on making a motion that would increase funding, please tell where it would come from so that the budget stays balanced and that it's aligned with city council adopted policy, and our goal as a commission should be to provide advice to city council that suggests a balanced budget. Commissioner Ira.

Thank you, chair. For Salt Surgery, I just want to say thank you so much for promoting this meeting to you on social media. I saw it. You look great on you look great on Instagram. So thank you for that. I'm glad we're hopefully able to get a few additional people out here. Also really appreciate you guys doing the impact thing. I think it made it a lot more clear where there will be an impact, where there wouldn't be. I did have a few questions. I know last time I don't know if the city manager is is here today, but I know last time he had mentioned that a lot of these things would not be impacted.

It looks like a lot of them are not, but there are some that I was a little bit concerned about that I'm hoping to just clarify if we have sort of a scale or understand how much of an impact. A few that stuck out to me were the pavement rehabilitation and pedestrian facility improvements. Wondering what that's going to look like because I know the one thing you hear in every neighborhood is the roads suck. So just wondering how that will impact and if we're deferring the costs for a few years down, is that going to cost us more in the long run too?

Yeah. So I'll speak to that one. So and I had discussions with Polyworks on this specifically as to whether we should go yes or no because it it really kind of depends on how you view it. But if you look at the total budget for that program, and there's a slide in your packet when you look at the workshop slides that have the total budget, we actually were able to update the CDBG number in there. So if you just compare the budget for the program this year compared to the proposed budget, bottom line when you include all funds, it's about the same, right?

So from a perspective of is it an impact compared to what level of service providing today? No. However, the reason why we opted to code it as a yes is because measure A is offsetting some piece of that reduction in the first two years. But that may not be able to do that in the future years. And so in the future years, because Measure A may not be able to either fill that gap and or Measure A by shifting it there, we might not be able to use it for other kind of Measure A projects.

Sometimes we use it for like a match for projects when we apply for a grant. So there will not necessarily be an impact from bottom line program perspective in the first two years, but because we rolled out the whole five year plan and reduction in the out years, there could potentially be a decrease. And so we wanted to be transparent and that's how we quoted that at a yes. Sure. But it really depends on in those future years, how much Measure A could help offset some of that loss. So there's a lot of unknowns, but we opted to be more transparent and just say, hey, potentially in the out years, and that's why we opted to put yes there.

Okay. Thank you. Yeah, that's helpful. So there could be an impact. It's just it wouldn't show up it would potentially show up three or four years out as opposed to in the next two years.

Yeah. If measure a is not able to to continue using that backfill, you know, of those because basically by reducing measure z, we're able to or we were recommending to increase measure a for that purpose to offset. But that may not be the, you know, solution that could help in years three, four, and five still to be determined. That's Got you. Yeah.

Okay. Just a couple of quick more. I'm just gonna group them together. There was the adaptive senior center and adaptive recreation programming. I saw something with regards to youth opportunity center support for teen programming, security patrol of our parks, reduced costs associated with senior program and operational support, arts funding. Are those similarly like miniscule impacts or are those going to be significant impacts to some of the ones that I mentioned or like how are we sort of?

So I'll maybe invite Park, Sanil. Quite a few that you listed. Sorry. We could

Just curious to see how much

I'm not sure if Anthony is here. Know he was gonna show up. Maybe he's online. Is he online? Okay. So I think Anthony's online. So Anthony, if you want to chime in here on the various Parks programs.

They're working on getting him online so he can speak.

Thank you.

Can you hear me?

Yes. Your services. Sergio,

you can hear me?

Yes. We can hear you. Yes.

Oh, okay. So I was saying that the first one, the security and parts, that will not be detrimental to our our services being that the program has come around and now secured a lot of our facilities and doing a great job securing ensuring that our park park goers are safe in our parks. So that will not be detrimental so much to our safety in the parks. But I I'm I was asking the commission the commissioner what other areas because I know he he stated a few of them. I know the security was one. What were the other one?

Yes. Thank you so much, mister Zamora. I had mentioned to the adaptive senior center and adaptive recreation programming. There was some programming funding attached to the Goskie Center as well. That said that there would be an impact. Also, it mentioned some funding to support local arts organizations and reduced funding that supports deferred maintenance and other capital improvements of city parks?

Okay. So for the deferred maintenance measures, we are going to lose some funding there. However, we are looking at perhaps the infrastructure reserve to help out with some of the projects that we are looking at. That's a possibility. And know that prior to us receiving measures e funds the last couple of years, we didn't have that.

So we and we were able to make the parts budget work for all our contractor contracting needs and supplies. So that's a bonus that we are now grateful for, and we can we can make it changes to be able to stay within our budget. The adaptive section, we are we have moved forward with our adaptive coordinator and programming. We are collaborating with a an organization to bring adaptive sports as well. So that's one way we're getting around some of that funding is to collaborate with the nonprofit group to be able to bring some programming under our adaptive coordinator.

And then the the senior centers, we give me a minute here. I'm looking at our spreadsheet. I apologize.

No worries.

There won't be any immediate impacts to our budget with this with this reduction. The impacts could be long term as we go through the years. But, hopefully, as Sergio stated, if revenue increases in the those years, hopefully, we can gain some of that funding back. But we have what we've noticed is that we've been able to provide these services, and most of it is a senior food program and senior programming. And so we can look at collaborating with other nonprofits to be able to do more commodities, whether it be at Janigoski, La Sierra, and or Dales.

And we're doing we're looking into wraparound services from the Janigoski senior center to be implemented at our other two senior centers. So hopefully that can fill the void of some of the impact of that funding.

Thank you so much. I appreciate it. I just want to make sure, right, that when the budget is balanced on paper, obviously the impacts may not be balanced and I want to make sure that our seniors if we're doing food programs or adaptive services that we're not cutting those potentially. Thank you so much, Mr. Zamora.

I appreciate that. I was going to ask Sergio to additionally, you know, it says that Measure Z is being drawn down from, if I'm getting this correctly, 29.3 million to 12,700,000. What is sort of our minimum safe level for Measure Z? And what happens if, for whatever reason, the sales tax underperforms again or for whatever reason we don't pass the Measure Z extension come June?

So Measure Z, there's a reserve policy for Measure Z. It's $5,000,000 And so if you are looking at that slide that has like that five year plan view, that doesn't include that $5 policy reserve. So that's the reserve that was established. I think that went through BC and then that went through City Council as the minimum level we want to maintain and strategically drawing down on that high fund balance that we had for several years. And so consistent with that policy, I would say $5,000,000 Now this budget does not assume anything related to the ballot measure in June. So there's no impact from this plan perspective compared, you know, with the outcome of that June ballot measure.

Okay. Great. Last two questions and and I'll let you go. But I'm wondering, I mean, I don't know if we can discuss this at length, I'm just wondering like, obviously, I know there's some ongoing litigation with the water general fund transfer. If that results in a permanent loss of that revenue, how is that going to affect or not

affect the budget? So in terms of the litigation itself, you know, we can't comment on the specific But in terms of the budget itself, they we 2024 and included in this budget is an escrow of those water GFT funds. So you'll see that we have some reserves tied to, I want to say, past three years of GFT funds that we're escrowing. And proposed budget, the GFT in 2627 and 2728 for water are continuing to be escrowed. So we're assuming that we're not spending the funding in the current budget.

So if the GFT goes away, it should not have a net impact. If the water GFT goes away, it would not have an impact to the proposed budget because we're not assuming that we're spending it. It's currently being assumed that we're just putting it aside pending final resolution of that litigation.

Perfect. Thank you. And then last question for you. I'm wondering last time I had brought up additional revenue options. I'm wondering if we've looked at doing potentially an increase in our transient occupancy tax. I know that the revenue is projected for $9,270,000 in FY 'twenty six and 'twenty seven and then an increase to $9,460,000 in FY 'twenty seven and 'twenty eight. Is there an opportunity to revisit and potentially do like a one or two point increase to protect some of the services that may potentially be going away or is that something that's not on the table?

So I'm going to make one clarifying point to the GFT side and then I'll answer your question.

Sure. Yeah.

It will not impact it from an ongoing perspective, but to the extent that lawsuit is lost, then there would be an amount due. So there'd be onetime impact to pay back the litigation. That would be a onetime impact. But there's no ongoing impact because we're assuming we're escrowing it away. Just a quick clarification But on there would be a onetime impact if ultimately the resolution is invalidated. Now in terms of the TOT, which I think is what you're referring to.

Yes.

So I want to say in March when, or it might have been in February, staff put together a proposal or not proposal, options for city council to consider for the June. One of them was the extension Measure Z and the increase Measure Z. Another option that was part of that report was a TOT increase. So that was something that did go to council. I want to say that was in a February report. And then council ultimately landed on putting Measure Z on the ballot, but it was something that was presented to city council in February, but was not approved by city council to go on the ballot.

Obviously, I know you can't speak for the council, but are there staff reasons or understandings of why it may not have been did it not make up as much of the difference as a Measure Z passage would? Or what was the reason? I mean, again, obviously, you can't speak for the council, but

Yeah. And I can't I can't speak for the reason, but just from a factual number perspective, it was lower value than Okay. The measures. So But that I'm not saying that's why, but I think you had that question. It is lower value than what the measure would have been. But I don't know necessarily what every council member had in their mind when they voted on that one versus it.

Okay. Perfect. Thank you, Sergio. Those are my questions. Appreciate you.

Thank you so much for that report, Sergio. Excuse me. I have a couple of questions regarding parking. Is it in the packet or do you know if the revenue from parking comes from parking tickets or just the fees to pay an Eat and Shop?

So actually, we included that information in the third agenda item, the second quarter report. Oh, that's good. Yeah. So and we could get into that detail then or but we included it there. The majority, I want to was close to 70% was just the regular parking operations and it was, I think, under 30%, which was citations. So the majority of it is the actual parking operations, not citations. I know we have someone from Parking Online. We could either talk to them about it now or we could

do it in the I'll wait until third.

Thank you.

Sergio, thank you for your presentation, all the data you walked us through. It's a lot to absorb. So forgive me if you answered this question, but the last time, again, that this budget process was gone through was 2024. Correct?

The last biannual. Yes. We readopt the second year of the budget every year. We came before BEC this time last year for the second year of the planning.

So when this process was gone through in 2024, my question is and forgive me if you answered it but with what the proposed budget was for twenty twenty four-twenty twenty five and twenty twenty five-twenty twenty six, how close did those proposed budgets come to what the actual budget's final figures were?

So if we think about, say, we've only had twenty fourtwenty five as actuals. Right now we're in twenty fivetwenty

six. Right.

Understand that.

We don't know where that's going to land. Our net unassigned fund balance, which is kind of our net surplus, was about $9,560,000 However, that was due to some unanticipated one time revenues. Without those one time revenues, we would have been like pretty almost net even without those onetime. Those like the onetime ARPA funding that we received, that contributed to some of that. And then there was also some decreases within the some onetime expenditures that just didn't materialize.

But absent that, we actually probably would have been extremely close in those years. That being said, when you look at what we brought to BC and council last year for 'twenty five, 'twenty six, we had to adjust our revenue assumptions down because there were additional impacts. And so we readopted the twenty five-twenty six budget with lower revenue assumptions and higher expenditure assumptions. So if you're thinking about what we assume in 2024 versus 2025, things did start looking like they were going to go down. And that is materializing here in this proposed budget where we're saying that trend is continuing.

And we're looking at forecasts that are lower in revenue than what we anticipated in June and then also higher expenditures than what we anticipated in June.

So with understanding the revenue went down, expenditures went up, with what was proposed 2024, 2025 or maybe the current trend. I mean, are we 80% of what was projected? I mean, you come up with a percentage of

So in terms of revenue, so if we go back to let me go back to the earlier slide. So here, if you look at if we just because there's the two things two sides, right, revenue and expenditures. So if you look at the revenue, we're down $8,100,000 now compared to where we were before. And that's out of $380 some million budget. So I'm like a percentage off the top my head, but I want to say that's 2% -ish approximately.

So not too far. 2% is, in the grand scheme of things, not bad. But when you combine that with the expenditure side, which grew by $19,000,000 then that combined gets you that 27,000,000 So in terms of expenditures, if your expenditure level would have been the same about $380,000,000 that's closer to 4%, I guess. So both sides of it came a little bit off, but it wasn't 10% or higher. Generally, I think coming in within 4% of budget is actually not bad.

I think there you want to be kind of under 2% of budget, but they're not astronomical. But when you actually have to consider you have to make reductions to help offset it, any reduction could potentially be could be difficult, right? And so that's when percentage wise, not big, but ultimately these dollars will result in some reduction in some program. So then that percentage doesn't at that point matter, right, because you're making a reduction.

Thank you, Madam Chair. Thank you, Sergio, for your report. I appreciate you mentioning the importance of partnering with nonprofits for a couple of Perhaps budgetary matters, using both the city and nonprofit's revenues to provide meaningful and measurable services to the disabled community, for example. But I have one now to recommend to Citi. A couple weeks ago, we had a company called Butterfly.

Replace the y with the I at the end. They offer to this community a dollar ride service. The maximum one way trip for is 12 miles for $2 one way, which is less than you charge seniors and people with disabilities in your current system. They're brand new. I'm not sure how they're subsidized to provide such a great service, but I would suggest to whomever within the city's department to look that company up to provide a more cost effective transportation service that is also same day.

The only issue that they don't address is after 05:00 in the evening and on weekends. So again, butterfly with an I, I would suggest the city take a look at that. As a follow-up to Commissioner Aram's question related to Measure Z, should it fail on June 2, does the city have a plan b to again maybe rewrite the measure and ask the voters sometime in the future to reconsider their no vote?

So Measure Z is not in the proposed budget, and it's not agendized on today's meeting. So I mean, we really can't discuss the ballot measure. What I can say from budget perspective, what we're proposing, there is no assumption related to Measure Z included in the budget that is part of today's agenda item that is being presented. So candidly speak to the ballot measure itself is not part of today's agenda item, but this budget does not assume anything related to the passage or not of the Measure Z in the June.

Thank you very much. Madam Chair, I'd recommend that should it fail that we place the matter in our upcoming July meeting.

Thank you, Commissioner Benavides, for that. Commissioner Ward?

Thank you. And thank you, Sergio, again. And thank you to all the staff for your hard work in going through this budget and crafting it. I know there were a lot of cuts, 17,000,000 in cuts, so that's significant for the general fund. I know that took a lot of work. So I just had a few questions, and I just wanted to also highlight some concerns myself. Myself. I I think I am going to start with, number one, the pension obligations. So, you know, that is continuing to grow year over year for the general fund, and it is also being funded by Measure Z as well. For pension obligations, could you give us some insight?

I know we've talked about this before, but can you talk about what new pension obligations look like for incoming employees? Are they under the same, like, pension plan as historical employees? Or are they under some type of hybrid four zero one plan? Could you give us some insight into what that looks like?

Yeah. So there's different tiers of employees within CalPERS, tiers one, two and three. I want to say it was in 2012 when rules changed and that changed both the age of retirement and then also the formula retirement. So right now, we are, in essence, within PEPRA, any kind of new employee that comes in that started past that 2012 period, I think it was, 2012, 2013, as part of this kind of new pension formula. So at this point, basically that is kind of the pension formula law.

So any new employee falls within that. And there's we do offer other kind of fringe benefits, deferred compensation and things like that. But those are separate from the CalPERS. And then those are things that we typically include within the labor agreements. But those are separate and apart from CalPERS ultimately what becomes a pension obligation.

But any new employee that did not start in a CalPERS or reciprocal system before that cutoff date falls under the new formula. One of the things as to why you'll see in this slide here the blue line goes down because all the individuals that are in tier one, which are some of the older generations that have the higher benefit levels, as they start coming out of the system, then the city's contribution will be less because we're paying for more people that are in the tiers two and three, which are the kind of lower pension compensation level. So that's one of the factors why on a kind of automatic basis, you'll see our actual pension obligation requirements are going to decrease naturally when there's a greater level of those newer employees that are part of the system that will need to have kind of less of a contribution.

Okay. Got it. That was a good explanation. Can you tell us anything about what other cities are doing to address some of their ongoing pension obligations? Do you have any industry standard insights for some, like, SoCal cities or, you know, cities across the country? I guess particularly California cities, how they're addressing that. Like, are they fully getting rid of pensions for new employees coming on? I know that there's labor agreements that are attached to that. But have any cities tried? And if they have, what were some of those results?

I'm not aware of any that have removed any pension from CalPERS in terms of their own pension kind of obligations. I think other cities are doing a couple of things. Some other cities have the trust, just like we do, that helped offset that. Also, CalPERS has different plans and different ways to help address and smooth out payments. So one of them they call like a fresh start, where you're able to work with CalPERS and smooth out the payments for several years.

And that sometimes requires higher payments up front, but then lower payments in the out years. So there are different strategies that CalPERS lets you work with them on that they offer in order to reduce your liability or spread it over a different period of time. So there's different ways that cities are addressing it. I'm not aware of one that has said, new employees do not get any pension obligations. I'm not aware of one. Maybe there are. I'm not aware of any. But they're doing this or they are reducing costs in order to help meet the need and also address their budget. I know there's quite a few cities that have recently gone into fiscal distress for multiple reasons. Pension obligations is one of them.

And then some cities have to reduce their costs in order to fit in more pension liability.

Yeah. And just wondering, I keep bringing this up because, as you referenced, those cities are going through some of these distressing times because of that. And so I'm just trying to see if Riverside and other SoCal cities can explore different ways to be competitive in terms of attracting employees, but also, you know, understand that some of the pension obligations could contribute to underlying concerns. So conversation for another time, I guess. A second question I have is on encampment cleanups in wildland spaces.

I saw in the budget that over the next two years, 600,000 is gonna be cut from some of those services. I know in the budget it was saying that there was not going to be any impact to the service, but I'm trying to reconcile how a cut in the line item is not going to impact the service service on that.

So I'll explain a little bit. And if HHS wants to elaborate more, they can. But I know I had discussions specifically on this one as we were working on the determination. So the way we're trying to categorize is anticipated impact to current service level. And if you look at the expenditures that we've had in professional services within the PSET programs, they are lower than what we are proposing even in the budget.

So they have not spent all of those professional services in the past couple of years. And so if you think about, well, if you're not kind of spending that money today, the service impact from a current service level really shouldn't decrease. That being said, there's an increasing need in support services and activities to address homeless encampment. And one of the areas I know HHS is monitoring is there's new policies that are being put in There's new police that have been hired that support them. So there could be an impact where they cannot do the highest level of service that they want and maybe in the future where there might be more needs and demands on HHS to do some of those, they might not be able to meet those full demands in the future.

But if you compare what they're doing today to what they could do in the budget because today they're not spending all of that, current service level should not go down. But maybe they won't be able to go to the higher level that was initially planned. So it kind of depends on how you view current service level impact. But that at a high level, if HS wants to elaborate more, I'll give them the opportunity to vote.

Yeah, I think I want to drill down on that a little bit because, I mean, what you're saying is that they're not spending some of this money from professional services. And so to me that means and correct me if I'm wrong, if I'm following you correctly but to me that means that they view areas like the river bottom, which are some of our wild land spaces where encampments have existed historically. They're viewing resolved or they're deprioritizing that? Is that no?

It's a combination of factors, including hiring of personnel, which maybe Michal could speak to. But historically, there have not been all the police officers hired to support HHS.

Good evening, commissioners. For the two positions that are on hold, we're actually looking at utilizing our HAP dollars to bring those two outreach workers on the team so that we can have the full teams fully functioning. As Sergio has stated, we did actually get a Caltrans contract where we're actually addressing Caltrans properties and flood control as well. We're not we're still addressing the Santa Ana River bottom areas. So we still have the wildland teams that go out and focus on those areas as well as Sycamore Canyon and then within the MAG Corridor.

We're also seeking a state grant for the MAG Corridor to increase some of the cleanup efforts and outreach efforts within the corridor. And if we do get that grant, that will bring an additional $8,000,000 So we're still seeking grants. Our departments, as you well know, we go after any state or federal grant that we can pursue, and so we'll continue to seek those funding sources. But if we do see that the level of response has increased and there are needs that need to be addressed, we will be working with the finance department in the future to address those. But currently, we're not seeing that right now.

Okay. Yeah. Thank you. Always great answers from you, Ms. Davis. Okay. So I think that does it for the encampment cleanups. And I know my commissioners are are wondering when I'm gonna stop. I know I'm being pressured from them. You're word, Miles.

Said I'm just joking. I'm just joking. Development fees, so I know that we're not seeing as much revenue for development fees as anticipated, and I'm wondering if you can provide more detail on that. Is the adoption of the new development fees limiting the appetite for developers to want to develop? Or are they just not developing because of the financing problems that they're having with their projects? Or is it a combined?

Yeah, so referring to the fees and charges. So I think we there's generally in the past almost twenty four months been just lower levels of development within the city. We went through a high peak. I think 'twenty three, 'twenty four was one of the years that we kind of reached that high peak. And some of our assumptions were based off of some of those higher levels of development that we were seeing.

So we were trending off of some of information. That started dipping into fiscal year 'twenty four, 'twenty five. So last year, we had a midyear adjustment to bring down on revenues in the current year budget. We also, as you'll see, I believe, the Q2 report, which is a third gen item, we're also proposing to bring down our revenue estimates in the second quarter. I don't know if I think it's the when you look from a development project perspective, the city fees are a pretty small percent of the development cost, right?

So this is very small. So it'd be hard to imagine that a permit fee is one of the reasons why a developer is not moving with the project itself from a percent perspective. And there are studies speaking to this that local fees are not a big piece of the total puzzle of the full development cost. But there's just lower development happening throughout the state. And it's just a trend that we're all seeing. And that's one of the reasons why the revenue is just coming down. There's less developers seeking permits, inspections for different projects.

Yeah. Okay. And just one more circle back question, then I want to make two motions, I think. And one of the motions I need some clarification on. So just for Measure Z and the pension obligations the line item that's there, I think it's 10% of the Measure Z budget that's going towards pension obligations. Maybe that's a little high. But for those pension obligations in Measure Z, how is that justified based off of what the scope of Measure Z is to support homeless services, to support infrastructure, road repayment, and public safety?

So you're referring to here, let me go back. The UAL cost is tied to the FTEs that are built in within that fund. So in this case, there are 173 positions within Measure Z and 140, I believe, are police and fire. So the majority of the positions. So how we do it is we allocate the UAL costs based off of the positions tied to them.

So that's why Measure Z has that tied to 173 positions. And you'll see the same thing within all the other funds is basically tied to the level of FTEs that are there.

Okay. I just received a note from our Honorable Chair, so I will adhere to that. Thank you. You. I think that concludes my question.

Thank you, Commissioner Ward. Commissioner Vandenberg.

Thank you. Chief McInster, in his report, made a significant request, an increase, I think, around $28,000,000 a year for his fire budget to meet demand. Have we addressed any of that in this budget or are we waiting till after June 2 to see if we're going to get the increase in Measure Z funds to address that need?

So there are various critical needs that we are funding for fire within the current proposed budget. And there's one attachment that has a full list by department with descriptions for FIRE. So there's quite a few things within here. I think FIRE is one of the highest areas where we actually have new funding. But I think if you're referring to some of the main components, I think there was about 84 positions in that master plan and two new stations, those are not funded within this budget.

We have no plan to address any of it, not even a portion of it without the increase, correct, at this point?

So at this point, those

are not included within If this it doesn't go through, will we go readjust and make adjustments to that to increase the fire budget so he can receive at least a portion of what he's requesting?

That'll be a future discussion decision that we'll need to have the council. Okay. And and with council, and we'll, you know, ultimately also need to find the equivalent offset to cut for any amount of that because the balance the budget is currently balanced. And so any increase will now need to have a corresponding decrease.

And if it does pass, if we do get the $05 increase, would those funds first go to meet his need? Would that be a sole increase to him? Or would it be implemented into other areas and a portion going to him?

Well, the current budget does not have any assumptions tied to the June 2 ballot measure, as I mentioned a little bit earlier. So you can't really get into discussions on the ballot measure that is not a part of today's agenda item or to the agenda itself.

My concern is that the push has been for fire. All the flyers have come to my house and the text messages are firefighters asking for this. So I just want to know if there's any certainty that if it does pass, that

it does go to fire. So the city has been having informational sessions throughout the city. We scheduled four. We have already had three. We have one more next Thursday, Janet Zekoski, six p.

M. We've actually had a good attendance at these community forums, and we've actually had a lot of individuals come and speak out, give their perspectives on it. We've also been attending meetings of individual groups to provide information that is factual and that talks about the possible effects. So if anybody's interested to come learn about Measure Z, we definitely encourage them to come to this last meeting, which is next Thursday, 6PM Janikoski. We've tried to have a transparent process to just provide information. We, of course, cannot advocate for Measure Z itself, but just trying to provide information. So if there's any questions, I think that would be a good opportunity for individuals, members of the public to come to that meeting.

Thank you.

Commissioner Ira.

Thank you, Chair. Sergio, a quick question for you. I saw on a previous slide, and I don't know if maybe I just misread that, that there was an increase in the property tax revenue from 02/1997 to 2186. Obviously, I think that's in the millions, I'm assuming. It was like maybe two or three slides ago that you were showing.

Oh, you're referring to the why the city is facing the general for deficit slide?

I think so, yeah. I was just wondering like is

that Are you referring

to Yes.

Yeah. That's a decrease. That's in thousands, so the second year is $2,180,000 Yeah. So this slide represents the change from the 2024 adopted biannual budget forecast compared to the forecast now. So property tax is projected to be lower than what we projected by $297,000 in year one and then lower in twenty seventwenty eight by 2,186,000 in year two. I see. Okay. So that's a yeah. Positive. Yeah. This one goes the other way.

I thought that was an increase. Yeah. Jesus. That's huge. Yeah. Okay. I I wanted to also, you know, throw out there. I know we're probably going to be doing recommendations at the end of the discussion. But I'm I'm really wondering like if we have explored and I'm sure you guys have, but additional ways to bring revenue into the city instead of doing cuts. Obviously, I think, you know, cuts are difficult in any situation, but they're always easier, right, to cut than to bring new revenue in.

So I'm wondering if we've looked at I really would like to recommend at the end of the meeting, at the end of our discussion, to potentially bring the transit occupancy tax at least up for discussion for the council. I think like even a 1% increase could be a significant revenue source for us. And from what I've seen, like other cities kind of near us, like Diamond Bar has a higher transit occupancy tax rates. So I don't know if that's something we can look at. The other thing I wanted to for us to look at too were, you know, I think Commissioner Ward mentioned development impact fees.

I'm wondering if those are not something that are currently generating as much. If we've looked at things like truck route, permit fees or specific fees attached to impacts as opposed to trying to get involved in like property tax or things like that, specific like impacts that we can measure that the city can levy a tax on. Is that

So think you mentioned a couple of things. Maybe we'll start with the fee, the revenue generating. So there's only one piece of the current proposed budget that increases fees, which is the CPI increase. At the same time though, one of the big efforts the city has been undertaking the past couple of years is growing the economy. One of the ways to naturally grow your sales tax, your property tax, your business tax is by having more businesses come into the city.

And we've had great success in doing that, especially recently. And so part of our forecast, especially in some of the out years, assumes we will be getting some higher level of revenue from all our economic development activities. We have a couple of examples just of companies that have recently come to the city, Hyundai ROADM. We have Chevy, which is a South Korean EV charging company. They're building a $50,000,000 plant here.

Vaultu, Omeo. We have a couple of big potential North Side projects that are currently in negotiation. All those will bring both property tax and sales tax revenue to the city. And so that growing the economy is one of the big efforts that we are undertaking to help bring in some of that revenue organically without having to do a fee increase or tax increase, right? So that's that.

But there is a CPI built in into our fees and charges to help actually increase revenue in the budget. In terms of development impact fees, so we are currently working with a consultant to help us complete a study to update our development impact fees. The thing on development impact fees though is those are limited and restricted in use legally. So we can't use impact fees to fund more police staff, right? Have Just capital.

Yeah, like infrastructure, things like that, right? So that will help support some of those larger projects that we have so then the general fund or Measure Z maybe don't have to contribute, right? Instead, we use some of those developer impact fees to help offset the need of other funds. So we're currently working on a study to help update our fees and still have not been updated in over two decades. And so that is currently underway and that will be going to council hopefully later this year.

We're waiting on some data from the general plan update that needs to happen in order to inform some of the methodology as part of the ultimate fee study. So that's one piece to it. And then just in terms of the TOT, that did just go to council two months ago, right? And so that very recent. And I think that one would have to also go on a ballot. I don't think the city council could increase that technically.

Well, is an on I mean, the reason I bring it up is like this is going to be probably an ongoing, at least for the next couple of years issue with, you know, we're seeing kind of nationally too, like there will be impacts to the economy for the foreseeable future. So just having that conversation in advance.

But of course, you know, BC can make any recommendation to council And when we will communicate, if that's a recommendation that you want us to communicate, our commitment is to communicate whatever formal recommendation comes from the BC. And so even though they did see that a couple months ago, you could still make that motion and that recommendation and all that will be communicated.

Thank you. And then the last thing I wanted to say, you mentioned there was we're trying not to raise fees on businesses, on growth, things like that. But at the same time, we are kind of proposing to raise it on residents. And one of the things that was concerning for me from this whole report was that we're looking at a 5.7% CPI increase to fees and charges which inevitably residents pay the bulk of that, I'm assuming. Is that correct?

I think development fees and charges, I want to say are a very large portion of that, if not the majority, I believe actually. And then some of the parks feed in charges are there. But I want to say the developer permits and kind of all that that are different from impact fees. So we have just regular inspection fees, permit fees, and that's for our staff to actually go do the work of validating and inspecting a project. The impact fees are separate and apart from that, it assumes what impact will that project have and how could we have funding to help mitigate that impact for infrastructure.

So I think most of the CPI, I want to say, actually tied to developer fees and charges, which is really us just recouping our staff time to basically help review permit and kind of go through that whole process. Okay. So

your report estimated that we would generate $862,000 from that in FY 'twenty six-'twenty seven and then $119,000,000 from that in 'twenty seven, 'twenty eight?

Yeah, from that increase, from the CPI

piece Right. Of So you're assuming that the bulk of that increase would come from, assuming development impact or things like that, Luis you just mentioned.

From fees and charges. Yeah. The impact because of the development Sorry,

fees and charges.

Yeah. Okay. So And there's other pieces there, I want to say, and I could probably go through my massive binder here and figure out exactly what percent it is. Yeah. Or I could give it to you afterwards as well, but developer fees and charges are I believe the largest portion of our actual city fees for services.

Okay. Good. Yeah. I'm just, you know, again, with the cost going up on everything, like if we're increasing charges for someone to rent out like a space at a park or something, that to me is not smart revenue growth or not appropriate revenue growth in this in this current economic situation. I'm more interested in like, you know, if we're doing like large special events or like recovering costs from commercial users as opposed to your average resident in the city. So I'm just I'm hoping that that's kind of the push on your guys' end as well as opposed to offsetting that cost to residents.

So one thing I'll actually note, which your comment just reminded me, we are not proposing to apply CPI to all fees. There's actually quite a few fees under Parks and Recreation where we are exempting it from the CPI because it involves certain sensitive populations. We actually, I think it's already online, But next Tuesday, we're presenting the fees and charges to City Council. There is an attachment to that report, which identifies the current fee and the proposed new fee. So in parks, you'll see it be the same, the current fee and the proposed new fee because we're not proposing a fee increase.

There are some that do have it, but acknowledging there are some areas where we're mindful of not passing on the cost to sensitive populations, then we are opting to recommend to not increase the CPI for those fees. So I could send that to you afterward just so you could see which ones But exactly don't have that is one of the considerations that we did have because we acknowledge that, yeah, there's some that truly cannot afford. I think some of the youths and senior programs, we might have not opted to increase those. So we have that backup that we could provide.

Thank you so much, Sergio. I appreciate it.

Commissioner Benavides?

Thank you, Madam Chair. I'm going to follow-up on Mr. Vandenberg's comments about Z, which is the reason we're here as a body. And thank you, Sergio, for talking about next week's Z meeting at Goskie. I had some time last week and I attended the Z meeting at Mission Grove area.

And I noticed something that I give kudos to the city. There are more people at that meeting than two years of this meeting occurring. And so however the city convinced our residents to show up and provide their $02 or should I say $0.25 They did a good job and got people there. But and again, I know it's not agenda size, but it should be an agenda size item that Us commissioners should be able to talk about Z in whatever capacity we would like to as appointed volunteers. But what I'm concerned with, and I support Rich asking if there's a plan b or what if it doesn't pass, because I would say at least at the Mission Grove area, which is I've been told higher voter turnout.

They weren't in favor of it. I would say in listening, not seeing, that a good 70% of the people there were very concerned. Whatever their reasons were, which they provided to our city manager and the chief, were legitimate at this time. You know, questions like, what's the hurry? Can it wait?

And I don't know what I'm saying. I do believe that there needs to be a plan b in the event it doesn't pass, and which none of us know that today. That's my comments. Thank you, madam chair.

Thank you, Commissioner Benavides. I did ask what Riverside would look like without Measure Z at our last meeting and was told that it cannot be discussed during an upcoming because of the upcoming election. So I think we'll all be June 2, we'll find out if we come back or not. Commissioner Ward?

Yeah. Just a quick question on the state of our economy and and how we're growing it. You referenced a few projects that are happening to grow our overall economy. I don't know if anybody is here from economic development or on the call, but there are some projects. I was just wondering what the state of negotiations are for some of those. If you can say it, I don't know if there's any legal matters constraining us, but, like, for the soccer complex, the sports complex, right, adjacent to it, the Sears project as well, all of those of which are gonna provide some more housing. So I'm just wondering if if we can get an update. I think it would help us inform and talk to residents about where we're going.

Don't think we have PDD here. Okay. Yeah, know there's ongoing discussions for sure. But yeah, think we could get into the specific details of the negotiations that we're having on that. But definitely, there are continuing ongoing discussions with the developers.

Yeah, understood. All right. And just one final comment. Balanced budget and operating budget looks like it was operating at a surplus. So, again, just great job. But, thank you.

Commissioners, do you any of you have a motion you'd like to present? Commissioner Ward.

Okay. So this first motion needs some clarification because there were some comments about if we can talk about Measure Z and some of the and the upcoming ballot measure, can we make a motion about the upcoming ballot measure or the ramifications of that and how we can encourage City Council to take action?

No. I mean, this budget assumes just the current Measure Z. I mean, there is legally, there is no other revenue source of Measure Z. And so it wouldn't be appropriate for this budget that we're including to discuss anything about a ballot measure. So if you want to make a recommendation about the Measure Z plan, which is the current Measure Z, more than welcome to. But I don't think it'd be appropriate to make a ballot measure recommendation.

Okay. Well, request, again, I think this is already happening, that we agendize a discussion for the results of that election for the next scheduled Budget Engagement Commission meeting.

So if Measure Z is The next schedule. If the Measure Z in June is adopted, Budget Engagement Commission would be part of discussions, right? So just like Budget Engagement Commission basically sees almost every single allocation in Measure Z comes through BEC. Every single annual plan, when there are supplementals, it always comes through BEC. So that is the intent. In the case it's adopted, then there will be a lot of other discussions that will happen on that.

Okay. Well, I'm confident that we'll be able to have those. This is another tricky one, and this is would be my final potential motion here. This is for the Water GFT litigation, so I know it's tricky because of the litigation here. But pending some of the litigation there, if it goes, like, towards the city's direction, if the city were to win that lawsuit. Can we make a proactive motion about encouraging counsel on what to do with some of those funds?

If it's encouraging counsel advising a policy priority and not a formal appropriation because we can't make a formal appropriation on it. I'm not sure, Susan, if that is allowed.

Just want to speak a little bit about your scope of authority. I was thinking about this when you've asked for things to be placed on your agenda to talk about ways to generate revenue. And so I'll just walk you through the analysis that we do with all of our boards and commissions. And we start with the charter. Section four zero six of the charter provides that all powers and duties of the city reside with the city council unless they delegate it to a board or commission.

So they have created your commission by ordinance. And under the Riverside Municipal Code, your powers and duties are limited to making recommendations as to spending. So if Measure Z passes and you want to make some recommendations as to how those funds can be spent, that's appropriate. If Measure Z does not pass and you wish to, you know, agendize how can we raise revenue in different ways, that's not within your current powers and duties. And what you would have to do is go to the city council and say, Could you please authorize the BEC to agendize this and explore different ways of raising revenue?

But I just want to kind of give you the parameters of what you're operating within, and I hope that answers your question.

Okay. Yeah, think this motion would be a recommendation on how to spend certain funds that are currently escrowed for the water GFT.

Correct. You can make a recommendation regarding Okay.

Yeah, so given that, I would like to move that should the water GFT litigation resolve favorably favorably to to the the city, the recovered revenue that is currently in escrowed be redirected towards be fully redirected towards infrastructure investment, specifically roads and pavement projects and other general infrastructure needs, priority on roads. Let all of it be go towards that if we were to win that if the seat were to win that lawsuit.

Do we have a second?

Yes. Bello.

It has been seconded by commissioner Bello that do I need to repeat the motion? Because I wrote some of it down. Okay, please.

I would like to move that should the water GFT litigation resolve favorably to the city, the recovered revenue be fully directed towards infrastructure investment, specifically road and pavement projects?

Yes,

across, comma, comma, across all wards.

You may begin voting.

There's discussion. Discussion has to occur. Okay.

No, it's fine.

We need to debate it? Okay.

Commissioner Benavides.

Well, actually, I was going to make a different motion, but I'll defer until this one is solved.

Okay. Commissioner Vandenberg.

Yeah, I could support your motion. However, if the vote doesn't go measures ease way, then I would like to see some of those funds allocated to fire as well.

There's Right.

And you're talking about $27,000,000 So that some of that could go to funding fire department as well if this 25¢ increase does not go through.

Do you accept that as an amendment, Mr. Ward?

Seep it.

To your motion? So, well I think there's multiple dependencies here. Right. It's You can say no. So if the water GF, like assuming the water GFT is favorable to the city, that litigation is favorable to the city.

And assuming the increase does not go through.

So two assumptions. Assuming the increase does not go through. Correct. Then would you say half of that goes towards I fire don't know if we to say

amount, but just that funds be allocated to fire and to infrastructure.

Yeah, I agree.

I would second him if that's the case.

Could you turn your microphone on? We wouldn't be able to record what you said.

You're talking to who?

This was Commissioner Bello. I was indicating that with that amendment, I would pull my support.

Would any other commissioners like to provide any input about the current amendment on the table if if measure z were not to pass. Mhmm. But the litigation is successful to the city.

I will say this from personal experience. I had several firefighters in my house about a week ago, and some also knocking at my door to request money from measure z. I haven't seen any police department. But I was talking with the fire people, and they were sharing that their uniforms I was like, I you know, somebody came to BC and told us that they needed new uniforms. They're beyond repair. They said they're not beyond repair. They are expired. So, like, the fire department, I think, needs a a wee bit of help somehow. So I would support it if you include fire. Because it's

It's kinda hard to make the motion based on assumptions. Do you think, Miles, your motion could be made after the election?

I mean, suppose I would be willing to reintroduce it if it were to fail. But I think I want to continue with the motion, but I'd be willing to introduce it. But I think that we should be proactive about how we're going to prioritize some of the spending and recommend that towards the City Council.

I still think we could do that in June, but that's your motion.

I'm sorry. Commissioner Hutchins, I'm just thinking here.

No, it's okay. I appreciate the effort. Actually might agree once we get past it. I'm uncomfortable with committing sort of any funds because one, we don't know when this litigation issue would be resolved and I say that not because I don't we don't know what our priorities will be when that occurs and when that money becomes available. And so for that, I'm not going to be supportive of that item today.

I think that could be brought up if and when that money is available for expenditures. I understand the proactivity of it. But again, like we could have an infrastructural disaster tomorrow and have to reallocate funding. Don't want that to happen. But like I am uncomfortable with pre committing funds based on like, again our priorities could shift based on what they are.

I agree with the intent in the sense that we, the roads are always the issue that all of us get talked about. Other infrastructures always gets talked about, so I'm supportive of that generally. Just at this time, I cannot support any recommendation of expenditure at a to be determined future date when priorities can shift between now and whenever that future date may be. But I appreciate the effort and the timeline.

Yeah. I mean, I think my own response would be to that, and I think you referenced that in some of your logic there is that everybody is talking about roads. That's always going to be a priority. We have a $25,000,000 shortage in our road repaving year over year. We can't maintain the level of our roads right now. And one of our sole missions here on the Budget Engagement Commission is to ensure that those basic services are being accurately addressed and acutely addressed. So I mean, I disagree with the sentiment that we need to wait. There's a five alarm fire, far as I'm concerned, about roads and infrastructure.

Commissioner Eiras.

Thank you, Chair. I just wanted to clarify with staff. So from my understanding today, I know you probably can't, again, discuss ongoing litigation, but today a judge ruled that the city has to refund $46,000,000 to ratepayers. Does that affect this discussion at all? Should we be considering that?

At this point, we can't comment on pending litigation. What we could say is the budget proposes to continue escrowing the funds related to the GFT until final resolution of the litigation.

I think I think, yeah, that I would I completely support the idea behind Commissioner Ward's motion. I just I would prefer to see the outcome of that litigation before we commit funding, especially when we're discussing literally cutting funds from other areas right now. I'm not sure how I feel about pre committing funds.

Yeah. Again, my response there is the proactiveness. Why until that happens when we could already have something in the pipeline and get on to our other priorities? I mean, again, this is a core mission of our commission. We should put our vote to where our mouths are and how we're talking every single month. So I'm willing for this motion to fail so that we can, you know, show that at least we're discussing some type of proactive measures. But I would love if the commissioners would join me in this so that we can, you know, get ahead of this.

Move to call the question. Second.

Gregory, what did you say? Move to call the question? Yes, please. Can we vote on this? Do we vote on this now? Please, let's take the vote. Had to second until the amendment, and then you said you'd second it.

Commissioner Ward made the motion, and Commissioner Bello seconded it.

But he's not But supporting

it he's supporting it now. We do need a second.

There was an iteration to that. There was amendment made by Rich.

Point of order. Can we get the current motion then?

Miles, please repeat your

motion. Let me try to adjust the amendment on the fly here. So move that should the water GFT litigation resolve favorably to the city, the recovered revenue be fully directed toward or be directed towards infrastructure investment, specifically road and pavement projects with an amendment that if the Measure Z ballot question were to fail, portions of that successful litigation would go towards a dual purpose for roads, infrastructure, and fire.

I would second that.

Okay.

It has been moved and seconded that I

would make a recommendation that you change it to recommend the council, Because what you said, let's do it. But we only could recommend to counsel as Counselor Wilson just read from the charter.

Can I make that amendment and then write it and have it in writing after the meeting?

Okay. Yeah.

I'll include that council recommendation.

You may now begin voting. The motion passes with five yeses, four nos and one abstention by Commissioner Ira.

I have a motion, madam chair.

Commissioner Benavides, please.

Thank you. Gosh. Today, we got a letter from a nonprofit requesting money from z to support a program. And thank you, miss Wilson, for making sure we understand our role here. I want to be careful in making this motion because I think it well, I'll just say the motion.

I move that the BEC, and I would love some support from my fellow colleagues up here, that we recommend to counsel to fund the request that was made to us from a nonprofit.

Why did I push that? Oh my

god. The name of the organization escapes me at the moment. Art of Riverside County. And we'll let council decide whether or they should or not fund the request. So that's my motion.

Is there a second for this motion?

Last call. No second. No second. Okay.

The motion fails.

The fails.

The motion

I've never had that

happen before in any organization. That's interesting.

Never seen seen

Thank you so much, Commissioners. Item? You guys just popped up out of nowhere as soon as I move my eyes. Commissioner Ira.

Thank you, Chair. I did want to make a few motions with regards to actually what was presented here tonight. I don't agree with some of these cost reductions that have been presented. I know the city staff worked really hard on those. I personally cannot support cost reductions whether they impact or not.

Because again, as I think we've made very clear here tonight, the future is uncertain, especially with regards to our funding levels. And a couple of areas that I specifically want to address that I think would speak a little bit to what Commissioner Ward's concerns were, I would definitely not support any reductions to pavement projects and dipping into measure A to make up for that reduction. And I would not support any cuts to senior services either. And I don't know if there's a way to what the most appropriate way to make that motion is. The rest, you know, obviously I know that we have to balance it somewhere, but I would like to ask for counsel to look at other ways that we can balance the budget.

I don't know. Yeah, I mean you just need to make a motion and Okay.

I'll second.

If I may recommend the text of your motion, recommendation is to remove the expenditure cuts from reinsert what you talked about and that council finds cost savings elsewhere to balance the budget. That would be what your text is. So I would repeat that and then

Thanks, Alex.

Looks like you have a second from Pete.

Thank you. Yes, I would like for us to remove the proposed cuts from specifically Measure Z, pavement rehabilitation and pedestrian facility improvements, MZ item number 29. Additionally,

the

Janet Gosky agreement from the general fund, which reduced costs associated with senior programming and operational support of the Janet Gosky Center and also the general fund recreation supplies, which reduces funding for supplies that support expanded senior center and adaptive recreation programming. And would ask that my fellow commissioners support that recommendation and ask the council to find the cost savings elsewhere.

Is there a second?

Yeah, I second it. And I'm gonna explain why I made that second. The original language on the Measure Z when it was born spoke about both of your some of the items that you mentioned in your motion, especially for seniors. And our voters passed it. The language in the extension removed the seniors and people with disabilities from the ballot measure?

I asked that specific question last week and it was not answered to my satisfaction or to anybody in the room. That's my comment.

Commissioner Hudgens.

So I guess I get to be the contrarian today. While I I sort of sorry, now I know where I'm going. While I sort of respect the idea of like we don't no one likes cuts, right? I've worked on the state budget for years, this one was a commissioner for a couple, I worked at the university's budget committees. No one likes cuts, but if they have to be made, I do appreciate the work the finance team has done to minimize those cuts directly to services and many of them are sort of cost savings cuts that have been described, meaning that they're bringing the planned expenditure down to what past historical expenditures could have been.

At least for the first two years, at least because it's a five year outlay. At least for the first two years and specifically at least for the first year. I am cautioned on the idea of like sending it saying they need to find cost cutting elsewhere because I don't, I've poured over this budget as I'm sure many of you have. I can't see where else that comes from. And we are required, we cannot run a deficit.

Trust me. There are a number of times where I wish we could or California could when it's necessary, but we do have to pass a balanced budget and for those reasons, while I again have larger skepticism on the five year outlay and some of those larger cuts that may happen, and I would be more strenuous and probably a pain to our finance team if those ever came for at least first, for at least the biannual budget that they're presenting. I can live with those costs as balanced and going back to my sort of ultimate belief, it's like don't tell me what you value, show me your budget and I'll tell you what you value. And I think in the large part, this budget matches the value of the city. Now is it perfect?

No, there are many things that I would change if I had a veto pen or if I was the director of finance, and I'm not. But with that being said, I think with the work that was put in this budget, the input that we may have provided at different stages, the input that our other residents have been provided, I think this is close to the best option that we could get passed by council that we can potentially get. It is for that reason, and I'm sorry for being the contrarian, that I'm gonna move for a substitute motion that we recommend that council pass budget or adopt this budget with any changes they may occur. So my counter motion, my substitute motion is if there's a second that council adopts this budget by the time of the next fiscal year.

Chair, can I just respond to that real quick?

Hang on. First call for a second and then he can respond to the debate, if there is a second.

Yeah, Commissioner, I hear your concerns. I think you mentioned explicitly, like, a budget is a statement of priorities and we're telling residents that, you know, at least in the way that it's presented, our roads and our seniors are not necessarily a priority. We have to find ancillary funding or pool funding from other places gaps with potential cost impacts or potential service impacts down the line, as Sergio mentioned. Maybe not in the immediate two years, but three, four, five years out, we can see those impacts. I don't think that that is appropriate given that the community engagement sessions which you mentioned overwhelmingly identified roads, road repair, and pavement maintenance as one of the highest priorities in the city.

So for us to be cutting funding even if we're replacing it with Measure A, I think, you know, and correct me if I'm wrong, Sergio, Measure A is not guaranteed to be a forever kind of fix for the issue. This is a temporary kind of one time band aid that we're using to plug the gap. Is that relatively appropriate to So

Measure A is used for various things. One of those is sometimes matching other projects. And so to the extent in the out years, more Measure A supports paving than there is potential impact to not being able to match other types of projects. So I think that's what we're referring to as the kind of potential out year impact because it's not known if the same level could support

Exactly. That wasn't the intended purpose of measures A either, right? Like to be used for that way in an ongoing basis.

I think measure a has its own kind of flexibility and types of things that it could be used for. And it currently already funds paving at certain levels, right? It's just making a little bit higher level of payment from Measure A, but Measure A already historically is funding paving. So if you look at that slide, it shows you like the budgets for the past five years. You'll see Measure A has been there, I want to say, every single contributing regardless of measure Z.

Right. But we're relying on it heavier in the next two years than traditionally. Yes. Because we're cutting back funding from other places.

We're using it to help offset to maintain the bottom line program to not have a level impact.

Is not like a I'm not trying to get a gotcha on I'm just saying like, this is a we are operating in a way where we're robbing Peter to pay Paul from our own budget with the expectation that things will improve.

Well,

shuffling money from one pocket to another, I think. I I I would be opposed with cuts cuts from that. I think we should definitely consider asking the city council to look. You know, this is an ongoing process. This is not a knock at staff who did a fantastic job. But for those to be the sectors that are affected, which impacts some of our most vulnerable communities and also some of our most high priority items for funding, I do want us to recommend for council to at the very and this is a recommendation. I mean, council can just look at this and say, No, thanks. We're going to approve the budget as is. But I do think we need to at least bring that up for discussion for them.

Okay. One second. Commissioners, we have spent two hours on this topic. We have two more to go through where there will be a lot of questions. Is there any way we can kind of wrap this one up and, like, go towards the next and or do you want to stay here for a while?

I think it's important.

Okay. I'm just saying, like, for the I hope that will bring it up. So we have a motion.

Madam Chair?

Yes.

If I may. If we're talking about the measure A that's funded through RCTC, the $05 sales tax here in Reston, Riverside County, I support your motion, and here's why. The dollars that were voted upon by the by the voters to pass measure eight funds RTA, roads, highways, a number of things. It's even provided to nonprofits. Now why do I know that?

Because my organization receives measure A. But there is a thorn associated with receiving measure a dollars, and it requires a 35% match, which the county leaders decided to put for those folks who receive such taxpayer dollars. And so it's not free money, but I do support your motion based on what I hear out in the world about what the people who live here want. So I'll call for the question, madam chair, to get this expedited.

Do we have a second for Commissioner Hutchins' motion?

It was Erinn.

Oh no, it Bello seconded mine. Okay. So what we have now is a motion and then a substitute motion. The way those are typically handled, when you call the question, a yes vote is for my motion, a no vote is for Arum's motion. Or sorry, Commissioner Iva's motion. Oh, unless that's typically how we've done it in past, unless you want to correct it with a different procedural.

So your rules are silent as to what happens when there are two separate separate motions? Motions?

We go to Robert's rules then if I remember correctly. Use that

as Unless a they're in conflict with the city council rules and the city council rules provide that when there is a substitute motion, you vote in the substitute motion

And then we go back, okay.

Then you get the original.

So I second Arim's substitute, so I call for the question?

So okay, hang on. I was the substitute, Arim wasn't. Arim was the initial. So then according to the advice, it's my motion first, yes, no. If mine passes, we're done. If I'm a no, then we go to Commissioner Ira's motion as a yesno. Am I interpreting your advice correctly, counsel?

That's correct.

Thank you. And with that, actually, madam chair, I will second the call for question. So we should be good.

Okay, it has been moved and seconded.

You may now begin voting. Motion passes.

Unanimous?

Commissioner Ward.

It's not working. Yeah, just a quick question for what is the total impact of these items? What's the total impact? Well, no, we were on Hutchins.

Yeah, my motion supersedes.

Oh, okay. Okay.

Move on, Madam Chair.

Commissioner Gullo? I

just want to say thank you for preparing this budget. I know it has come with some at some expense to some other areas. I think there's opportunities where I think we can look at prior year and maybe adjust in the biannual budget as we did in prior sessions. So thank you Sergio and team. That's all I had to say.

Thank you Sergio. Okay, item number five, we have Ryan Carter, Controller in the Finance Department. Thank you, Mr. Carter.

All right. Good evening members of the commission. I'm Ryan Carter, controller. And today I'll be presenting our financial health indicators. Each year the finance department prepares these indicators to spot early signs of financial stress and ensure we're managing city resources proactively.

The purpose of these indicators is to open a dialogue and provide clear and useful financial information. As we go through these indicators we'll try to answer one basic basic question, is the city of Riverside financially healthy? To do this we'll be asking three additional questions with 11 measures to evaluate the city's financial condition. Each question evaluates Riverside's services to its residents And we'll also compare Riverside with its neighboring cities to see how the city relates. These comparative cities were chosen as a part of a market basket of full service cities similar to the city of Riverside.

Our first key question is can the city pay its bills now? And we'll examine two indicators to answer this. Before I get into the first indicator I do want to mention two key points as we go over this data. First keep in mind this report is not intended to give an overall grade of the city's financial health. It should be viewed as one lens among many for evaluating our financial condition.

Other financial information such as the quarterly budget updates, biannual budget and city credit rating should be considered when viewing this information. The second item is that where available I will mention any benchmarks for a particular ratio. However not all ratios have a benchmark. This is due to governments having unique functions, priorities and revenue sources. With that being said let's dive into the first ratio.

The first measurement is the general fund reserve ratio. A declining fund balance reserve can be a sign of fiscal stress. If you look at the city's five year trend we are showing a decline in fiscal year 2024 and 2025. However the decline was not from overspending or from setting aside reserves such as future pension costs which are not included in this calculation. At the bottom you will see the ratio remains strong as it relates to our comparative cities.

And then for a benchmark the Government Finance Officers Association or GFOA recommends maintaining two months worth of revenues or expenditures as available fund balance, and that would roughly come out to 17% making the cities 33% well above the recommended amount. Our next indicator is the general fund liquidity ratio. A negative ratio may indicate a city does not have sufficient cash available to meet its current obligations. A downward trend may show a declining cash reserve or significant increases in current obligations. If you look at the five year trends, the city is showing a positive and upward trend implying increased cash reserves available to pay for current obligations.

The city has experienced increased revenues and investment earnings over the years, which has raised this ratio and resulted in a strong ratio compared to our peers. And then an overall benchmark for this ratio will be right at one, indicating that an agency has enough liquid assets to cover its short term financial obligations. The Citi's ratio of 5.74 puts us well above the benchmark amount. Next we ask, can the city's revenues cover our expenses? And we'll look at three indicators to evaluate this.

Our next measure is the general government growth and net position ratio. The general government includes all funds except for enterprise funds such as electric and water and fiduciary funds such as our successor agency. The higher ratio suggests that annual costs are adequately funded and financial condition is improving. If we look at the five year trend, the city had a 0.4% ratio implying a small growth in the current year net position. The small growth was primarily due to revenue slightly outpacing expenses for fiscal year twenty twenty five.

The city's fiscal year twenty twenty five ratio indicates that resources are not spent faster than they are earned but also funds are not overly accumulated. The next measure is the general government operations margin ratio. A higher ratio indicates that basic government services are more self sufficient through charges, fees and grants and less reliant on general tax dollars such as sales and property taxes to fund program expenses. The city's fiscal year twenty twenty five ratio indicates that the city funds 31% of its governmental activity expenses through program revenues such as business license tax, permits, fines and grants. In the bottom chart the other cities appear to fund a larger share of their operations through charges, fees and grants compared to the City Of Riverside.

In April 2025 updated developer fees were adopted by City Council and this ratio is expected to trend higher in the future as revenues become more closely aligned with the service costs. Our next measure is the general government owned source revenue ratio. This ratio explains how much of our revenues are from grants, which is 25% for fiscal year twenty twenty five. If you look at the five year trend, the city saw a large ratio in fiscal year twenty twenty one of 23%. This is due to increases in the CARES Act grant and other related grants and remained relatively high at 2120% in the two subsequent fiscal years.

This is due to funds recognized for the Emergency Rental Assistance Program and American Rescue Plan Act or ARPA. Then a reduction to 17% in fiscal year twenty twenty four as COVID-nineteen grants subsided, followed by an increase to 25% in fiscal year twenty twenty five as final ARPA grants were fully expended. Looking at the bottom chart, appears the City Of Riverside is right in the middle, indicating our grant revenues seem in alignment with the other comparative cities. Now we move on to our third and final question: can the city pay its bills in the future? To assist with answering this question we'll be looking at indicators six through 11.

The first of these indicators is the general government near term solvency ratio. This ratio demonstrates the city's ability to pay a larger portion of its debts with annual revenues. A lower ratio indicates a stronger financial condition. The city's ratio has been moving in a lower and financially healthy trend from fiscal year twenty twenty to fiscal year twenty twenty two, then showing a slight uptick in fiscal years 2023 and 2024, and then finally a decrease in fiscal year 2025 due to revenues outpacing expenses primarily due to the final year recognition of the ARPA grant funds. This next measurement is the general government debt pension liability and OPEB burden per resident.

In the five year trend you will see a gradual decrease in fiscal year 2022 due to decreased pension liabilities. The increase in fiscal year twenty twenty three was due to the return of the net pension liability primarily caused by CalPERS decreased investment returns. Fiscal year twenty twenty four and 2025 remained relatively flat as the liability items increased at the same pace as the city's population. When looking at the city comparison chart below, you will see that the city of Riverside has the lowest burden per resident. All right the next four ratios will be continuing to analyze the question can the city pay its bills in the future and measure our long term solvency?

The indicator number eight is our governmental funds coverage ratio. The city has interest and principal payments on debt and the lower the amounts of these payments compared to all other expenditures, the stronger the financial condition. Looking at the five year trend, the city has been showing a downward and healthy trend in the past four fiscal years. Looking at the bottom chart, the City of Riverside shows the highest ratio indicating a weaker financial condition at first glance. However, this was primarily due to the conversion of the city's unfunded pension liability which is not considered debt for this calculation to a pension obligation bond in order to achieve long term interest savings.

The next slide is showing our enterprise fund coverage ratio. Some of our main enterprise funds are electric, water and sewer funds. This ratio represents interest payments made in comparison to total enterprise fund revenues. A higher ratio indicates a stronger financial condition. If we look at the five year trend, the ratio has been in an upward and positive trend, mainly attributed to the continual debt obligation payments, resulting in lower interest expense as well as a gradual increase in revenues.

In the bottom chart, the city's ratio appears to be low in relation to the comparative cities. This is primarily due to the city's significant investment in capital assets for electric, water and sewer funds with major capital assets funded through debt issuance. Our next indicator is the general government capital asset value ratio. Capital assets include land, building vehicles and public infrastructure. Over time capital assets would lose value due to depreciation and will gain value as new assets are placed into service.

A declining ratio means that overall value of a city's assets decreased over the year indicating some assets may need to be renovated or replaced. A higher ratio indicates a stronger financial condition. Looking at the five year trend, fiscal year twenty twenty one we had a high ratio of 7% due to a prior period adjustment of $80,300,000 for land and infrastructure. This is due to a change in calculating street mileages from a system upgrade. Had this abnormality been excluded, the ratio would have been closer to 1%.

The remaining fiscal years were between 01% indicating assets are being replaced at roughly the same rate that they are depreciating. When looking at the bottom chart, the City of Riverside's ratio is generally in line with the comparative cities. This next indicator is our enterprise funds capital asset age ratio. This calculation is comparing our total value of enterprise capital assets to accumulated depreciation. A lower ratio indicates capital assets are newer and may not require as much replacement and maintenance costs compared to our older capital assets.

A 100% ratio would indicate that assets have been fully depreciated. If we look at the five year trend, capital assets have been aging over the past five fiscal years. But as we look at the bottom chart, we can see the city's enterprise capital assets are in a better condition than the majority of our peers. However the increased trend in this ratio shows capital assets could require additional maintenance or replacement costs in the future. All right now we will be moving on to our informational indicator.

This indicator is for informational purposes only and is a resource allocation measurement. Our last indicator is the general fund public safety cost ratio. This indicator is comparing the total cost of the General Fund Public Safety, which includes police and fire, to the total General Fund expenditures and transfers out. A higher ratio would indicate more funds are dedicated to public safety. If we look at the five year trend in fiscal year twenty twenty three there was a decline of 8% from the previous year.

This is mainly due to the overall general fund expenditures outpacing the public safety expenditures for that year. The increase in fiscal year twenty twenty four was due to a rise in pension costs as well as additional personnel costs as vacant positions were filled. Then again in fiscal year twenty twenty five, the ratio dipped to 52% as overall general fund expenditures increased at a higher rate than public safety. All right. With that, we recommend that the Budget Engagement Commission receive and provide input on the financial health indicators discussed herein. And that concludes my presentation. Here to answer any questions you may have. Thank you.

Thank you so much, Ryan. Commissioners, do you have oh, is there public comment? My little brain.

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

Secretary, do we have any callers? No callers. Commissioners, please wait until after any discussion to make any motion. I would we would all appreciate that. Thank you.

So

is there any discussion?

Nope.

Alright. Moving on. Thank you so much. Ryan Carter. Yes, received and filed.

Item number six, we have once again Sergio Aguilar, Deputy Finance Director.

All right. So good evening again, Honorable Commissioner Sergio Aguilar, Deputy Finance Director. So this presentation will cover the fiscal year twenty twenty five-twenty six second quarter financial update and proposed midyear adjustments. So starting off at a high level, and some of this is similar to what you saw in the proposed budget presentation. But overall, we do continue to maintain a strong fiscal position.

But even though we are in a strong position, there continues to be ongoing fiscal uncertainties that cloud our outlook for the current year. And most recently, the uncertainties of the potential potential impact from the military activity in The Middle East and the evolving federal policies that could have some downstream effects on Citi revenues and cost. There's also growing concern that the expenditures will continue to outpace revenue growth, which we are monitoring. So we are recommending restraint on any additional unallocated midyear spending as we continue to monitor the expenditure and revenue growth. I won't spend too much time on this slide since you already saw this in the previous presentation, but we have policy reserves set aside for 20%.

We have other reserves. Part of that undesignated is what you heard in the proposed budget that we're planning or proposing to use to partially address deficit and then about $30,000,000 in Measure Z fund balance. So this slide provides a high level overview of both General Fund and Measure Z budgets for fiscal year 'twenty five'twenty six. So in the General Fund, we are recommending revenue adjustments that net $4,570,000 to the positive and expenditure adjustments that account for an additional $3,400,000 in expenditures. And when accounting for the approved adjustments thus far plus the proposed midyear adjustments, you'll see that last column that we would be ending the fiscal year with a balanced general fund budget with revenues aligning with expenditures.

And for Measure Z, we are recommending revenue adjustments netting $220,000 to the negative and expenditure adjustments netting $3,960,000 in savings. And that's tied mostly to the delayed police headquarter debt service cost, which would now begin next fiscal year. So overall, if you look at that final adjusted budget column for Measure Z compared to the adopted budget from June, we would be drawing down less on the fund reserve in the adjusted budget compared to what was proposed in large part because of that debt service that just gets shifted to the next fiscal year. Starting with General Fund revenues. So this slide here shows the proposed midyear adjustments for General Fund.

For property tax, there's an anticipated increase in revenue tied to successor agency property tax receipts and those have continued to trend higher than what were approved in the budget. Sales tax anticipated increase is primarily due to onetime corrections. For cannabis business tax, we are recommending a decrease due to the continued delays in the opening of businesses. At this point, we've had one cannabis retail business open, and we anticipate at least two, maybe three will open up in June. So there'll be potentially a couple more that will generate some revenue for the current year.

For utility tax and franchisees, the decrease there is primarily tied to a decline in cable TV associated revenues. For business license tax, projecting an increase due to onetime settlements, development fees and charges, as noted earlier, just seeing a continued decline development. Revenues are about 34% of budget as of the second quarter. And then for the GFT, there's an increase there due to RPU's final assessment of fiscal year 'twenty four-'twenty five operating gross revenue. So this is a true up to reflect the actual transfer tied to fiscal year 'twenty four-'twenty five.

Then just being a little bit on general fund expenditures, actual expenditures as a percent of budget are about 48.7% as of trending the same as we were in the same period at last fiscal year. However, important to note always with expenditures that those cannot generally be compared quarter to quarter since there's a lot of fluctuations, especially on personnel side of the expenditures. The second quarter analysis of overtime trends though did demonstrate that similar to last fiscal year, the police department overtime cost was trending higher than budget. And this is due to a combination of factors including increased overtime related to protest, training, after hour homicide, increased operations in the Magnolia Corridor, and additional salary increases. And staff are recommending supplemental appropriation of $2,600,000 general fund in the current year to address the increased police overtime in the current year.

Going on to Measure Z. As of the second quarter, Measure Z is projected to end the fiscal year with $24,000,000 in fund balance, and that's not counting for the $5,000,000 reserve, resulting from a net drawdown of $64,500,000 and that includes the approved encumbrances and carryovers and other supplemental appropriations. In terms of revenues, as of the second quarter, revenues are continuing to slightly underperform compared to budgeted expectations. And although as the second quarter, revenues are increasing by 1% compared to the prior year for transaction use tax, that growth rate is lower than the budgeted growth rate. So we are recommending a $1,420,000 reduction in the sales tax component of Measure Z.

However, the interest component of Measure Z has been coming in higher. And so overall, the proposed net decrease is only 220,000. In terms of expenditures, you know, Measure Z funds many projects and one time expenditures, and that causes quarterly year to date to fluctuate, but they are generally trending in line with previous years. Moving on to the electric fund. As of the end of the second quarter, electric revenues stand at 54.5% of budgeted projections, and they are generally expected to budgeted amounts with the exception of transmission revenue, and that's projected to perform below budget by about 7.6%.

Electric expenditures are about 49.9% as of the second quarter and trending similar to previous years, about 12.7% vacancy rate as of the end of second quarter. So there will be some personnel savings there. And then the non personnel budget, those costs are generally in line with what we are expecting and what we have seen in previous years. In terms of the Water Fund, at the end of the second quarter, total revenues for the Water Fund were 76% of budgeted projections, and retail sales are expected to be 0.6% higher than budgeted. On the expenditure side, expenditures stand at about 44.7% of budget.

There's about 13.3% vacancy rate within the Water Fund and personnel savings are anticipated there. Non personnel expenditures are trending a little bit lower than where we were at last year at this point in time. Moving on to the Refuse Fund. At the second quarter, total revenues for the Refuse Fund are about 51.9% of budgeted projections, and they are generally trending in line with the level of revenues that we have typically received by the second quarter. And they are projected to meet current expectations that align with budget projections.

Expenditures are about 43.4% of budget at the second quarter. Refuse fund has 13.4% vacancy rate, and personnel savings were partially offset by new vehicle expenditures from prior year carryovers that took place in the second half of the fiscal year. And then going to the Sewer Fund. At the end of second quarter, total revenues stood at about 40.4% for the Sewer Fund, which is 4.8% lower than revenues received in the second quarter last fiscal year. And second quarter analysis does indicate that the Sewer Fund will underperform in revenue, and that's due

to

the continued decline in Sewer Connection fees, and that's just tied to the general lower development within the city. Expansions are 51.5% of total budget at the end of the second quarter. And during that period, the sewer fund had a 13.2% vacancy rate, but some of those savings are anticipated to be offset by some increased overtime that are needed to offset some of the vacancies. Going to the public parking fund, overall revenue in the parking fund is about 46.6% as of the second quarter and are expected to meet projected revenue. Revenues are increasing due to the nightly flat rate and monthly parking rate increase, but they are being partially offset by a decrease in volume.

Revenues from street sweeping are expected to operate at a deficit of about 11% compared to the total budget. Expenditures are 37.7% of total budget at the end of the second quarter. And during that period, the public parking fund had a vacancy rate of about 8.7%. And these shortages, coupled with the extended hours of operation, have necessitated the need for more overtime, but overall expenditures do remain within budget. And this actually did go to council a couple of weeks ago, but just going through some of the recommendations.

So overall net revenue increase in the general fund of about 4,560,000 in various categories and net decrease in measure z of about 220,000 on the revenue side. And then supplemental appropriations totaling about 2,630,000 in the general fund, and then designated that that additional water GFT amount towards the escrow. And then supplemental appropriation, 250,000 in the measure z, which is really just undoing a negative offset. It's not an increased expenditure. And then a supplemental appropriation and interfund transfer of about 781,000 from the general fund infrastructure reserve for the Boardwal Park project, project, and this is a project that was previously approved by City Council with a contingency.

So this is the amount of that contingency that was already approved in a contract. And then various other transfers of a little over $2,000,000 and then various other adjustments totaling about $426,000 to correct a pending receivable from an old 2,007 redevelopment bond. And with that, you know, happy to answer any questions.

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 you have callers?

No callers.

Commissioner Williams. Okay. I have a couple of questions about the parking fund. Was everybody waiting for me to say that?

I assumed you start talking. When you said your name, looked up like,

wait, is there another one?

Might as well, right? Okay, I have a question. Where in the city of Riverside does the city charge for street parking only other than in downtown?

So we we do have someone from our parking team online. Eric, if you are available, if you can help answer the question.

That is mainly what we were talking about for meter parking. We do have

Could you actually start all over, Eric?

I'm sorry?

Could you start over? In the beginning, we actually couldn't hear you. I think you were, like, mid

Oh, I'm sorry.

Oh, no. Yeah. If you could start over, that would be great. Thank you.

Yes. Good evening, Chair Williams. Eric Liu, Public Parking Services Manager. In regards to charging for parking on street, mainly it's in downtown, metered parking. I believe that's what you're asking for. We do have some charges throughout the city that are tied to preferential parking zones, but it's not really it's more administrative fees to provide those permits, so it's not really tied to parking on the street. It's to manage the permits.

Okay. And then I have an I have a few more questions about this. And maybe you can find out at a later time if you don't know the answer. But I'm very curious as a downtown business owner. When my clients come to me and they're shopping and they've gone five minutes over their time and they get a $117 ticket, it doesn't really encourage people to come downtown to shop when they know that's gonna happen.

Not just my clientele, but many consumers that shop downtown have expressed either fear of street parking for getting a ticket. Some are at an age where they don't understand QR codes or how to really like, what to do because the rules often change. I spend a lot of my time at work helping people with parking. So I do want to know if the revenues are, like, after five where it's beneficial, or if it's during the day. And if you don't have an answer for me now, you can give it to me anytime.

Oh, sure.

So in terms of breakdown of when revenues are generated downtown, it changes. So during the day, we do charge on street up till 07:00 at night. I do want to point out that the app, which uses the QR code, we do provide in all 4,000 spaces we have downtown between thirty to sixty minutes free parking. You do have to use the app to do it, so I understand that there is there could be some challenges for the community comfortable with the technology. If you choose to not use the app, you could park in the garages and you get sixty minutes, you pull a ticket, so that's pretty that's more traditional parking.

In terms of what you're saying is that people getting tickets on street, the ticket a normal ticket, just say if you didn't pay for your meter parking or you let the time run out, it's actually $46. So the the $1.17, I think, that you quoted, I'm not sure that might be tied to other violations that might be happening, like they're missing front plate or they're parking in a different zone that might incur additional violations. So it's typically $46 Our parking rates are pretty reasonable, and again we offer free parking in all 4,000 spaces. We just ask people to use the app to start the parking sessions. So we're hoping that that would actually contribute better to the downtown community.

And prior to, you know, 2023, we never offered free parking in our lots or on streets. So this should be a better experience, hopefully. I know when I go back to replace our pay stations on street, which, you know, they're starting to get end life, I'm going to look for companies that can offer the free parking through the pay stations. And if that's an option, then I will have that in our RFP.

Okay. And so I have another quick question. When people the parking thing, it greatly affects me. I pay because my building doesn't have a, like, a parking lot, I pay upwards of $20 a day just to run my business, just to park.

Do you

think that possibly the city could offer merchants some sort of validation program so that it would encourage customers to come down and shop. Because if you speak to the merchants, if you actually go directly and talk to the people that own the stores that pay two taxes just to have a business in downtown that often pay for their customers' parking, Have you ever talked to the owners of businesses and asked them about the parking in downtown and how it affects their business at all?

Yes. So when you mentioned validations, are you asking for us to give validations or for the businesses to be able to offer validations to their customers?

For the businesses to be able to offer validations to their customers. Have an email from you from last year saying that you would give me my very own specific QR code just for my

story. Right, and But I never heard back from you on that.

Because I found it unfair because I did ask you if you would give it to other residents, the other merchants in the city, and you were like, I don't think that's possible. So

I don't recall that comment, but we could definitely reapproach that, and yes, we do offer validations that business can participate Obviously that would shift the cost of your customers paying for their parking to the businesses paying for the parking. And we do have that provision in place and we do offer the ability to have it at a discounted rate for businesses to do it.

Okay, question. Quick question about So if Measure Z is paying for roads to be covered, the citizens pay taxes to support roads, the businesses pay two taxes just to have a business in downtown, and then you're making almost like a third charge. Not like a third charge, but there's a it's like a triple revenue to park on the street for the city, it seems like.

Let me just jump in here, Eric, real quick.

I'm Because

I do want to make sure we stay on topic. I think the earlier comment about the scope of the BEC, want to make sure we're not diverting away from the scope of

the BEC. I was trying to say on the scope, but I'm wondering because BEC is about a tax that is paid for by the consumers, right?

Yeah.

Well, me speak to This is listener. I have consumers, and I listen to them. And I'm just wondering, for the consumers, since they often don't come to these meetings, How does that really the fairness of just strictly streets, not lots or structures that are city owned, but just the public downtown streets? And possibly, if the city needs revenue, maybe should they charge all streets in busy areas around businesses, like the plaza that has a lot more customers than downtown? I mean, I also don't even really need an answer.

I'm just wanting to share concerns from the community that come to me as a business owner. And Measure Z involves everybody. First, the consumer, then the business owner. So I think kind of and it kind of is purview, not necessarily for making suggestions, but enable to ask questions. I think that's within the BDC scope, just to question how it works. Not to change it, but just to question.

Yes. I think what I could speak to, which I think gets to part of your question, is there's different funds that serve different purposes and that you can't use interchangeably. Parking fund could only be used for certain purposes related to the city's parking operations. We can't take the parking fund and go fund a firefighter. When it comes to Measure Z, that's a general purpose tax that's used for a lot of our other services.

71% of it goes to police and fire. Another 15% goes to street paving, things like that. So when thinking about different revenue sources in your case that are fees or taxes to a consumer, they serve different purposes. So from a consumer, they'll think, oh, it's all just a Citi charge, right, whether it's tax, whether it's a fee for something, it's a parking ticket. We segregate funds and they can only used for certain purposes.

And so that's why there are these multiple revenue sources that are unique to funding the purpose that it's intended to serve. So in this case, commingling Measure Z with parking operations wouldn't necessarily be appropriate. So they are distinct. So I think that at least kind of answers your question on the various, I guess, taxes or fees and kind of how that functions as a city and how we think about them. They are segregated and they fund different purposes. And I'm sure the parking team could tell you all the things that the parking fund supports, but it's very distinct and different than what Measure Z supports.

So

real quick clarifying question because you said this in presentation. This already went to counsel? Council?

Yes, this item did a couple weeks ago.

So this is now like

It's like receiving files.

Your new recommendation is like a receiving file. Okay, thank you. Just wanted to clarify that. With that, I'll yield.

Just two quick questions. The America two fifty celebration, that's like a one time, I'm assuming, expenditure. Yes. And that was approved by council already or this was something that coming through?

Yeah. That was approved by council. I think there was like a full presentation on all the efforts that the city is doing related to America two fifty. I know there's been press releases on kind of all things the So city is doing with it is supporting all of the efforts with the one time for the activities that are being done this year.

Cool. And the second one, the Festival of Lights, 300,000. Is that expected to be an ongoing expense from the city's end? And if so, is that a new is that a new expense for the

city or is that In this quarterly report, I don't think there's any Festival of Lights increase.

Not increase. It just mentions that agreement with the Riverside Arts Council for administration

Oh, yeah. So that was a supplemental that was approved by council, I want to say, last October. Okay. And so I think the report highlights all the supplementals that were approved by council. Okay. That's one of the sections, and that was a general fund supplemental. And that's basically to support the operation of the Fence of Life moving forward. And so that is not one time. It's a contract. I want to say the contract was three years. And yeah, so that would be to help the city support those activities. Previously, that was

paid by a private vendor.

Is that correct? Because I think previously, city would be the would do the activities. And now we're contracting with the council to support the operation of it.

I got that part. I'm saying previously that was paid by like a private company. Now it's paid by the city. Is that accurate?

No. Because it's the first time we have contract. So previously there was no contract. So it's the first time we're entering into this I saw that. So previously it didn't exist.

Thank you. Appreciate it.

Yeah. Just a question. The Festival of Lights, historically, the city, my understanding, paid for those lights to be turned on or to set up. If that's the case, there's a new owner, Yamabat, and I think they have money. Are we going to subsidize the Festival of Lights moving forward?

So I think that's still currently in escrow. And I know they've had some press releases saying they're going to continue doing the Festival of Lights as the previous owner did. So I think at this point, that's kind of all we could say. I think there probably needs to be more discussions with them once they actually take over the property. But all we know is kind of what they've signaled publicly in their press releases, which they intend to continue supporting the Festival of Lights.

Okay. Thank you.

Chair, I don't think your mic is on.

I'm trying to find my agenda.

An answer to anticipation of your questions. Yes. And that means you can just move on.

Thank you. I like that you can hear me from all the way down there. Okay. I am looking for my frigging agenda. There we go. Oh my god.

Don't leave.

Okay. Okay. Are there any other questions? No? Okay. Sergio Aguilar, item number seven, deputy finance director. Items for So no

updates actually.

Items for the future from the master calendar for future use. Review of the code of ethics in June, a cannabis update, June, July. Q three in July, and Measure engagement was requested in October, and it's still TBD from the marketing department. The next budget engagement commission meeting will be Thursday, July 11 at 5PM. Thank you all for being here. Wait. Hang on. What? June? Did I say July? June.

Thank you.

I can't read.

200 you wanna camp