City Council Meetings– San Gabriel City Council - Regular Meeting

about accounting things without the lawyer. Oh, no. All right. Uh, today is Wednesday, April 22nd, 2026. I called the meeting to order at say 5:34 p.m. Clerk, please take the roll call. Mayor Chan, here. Vice Mayor Ding here. Council member Herrera Avula present. Council member Managa here. Council member Woo here. Okay. We will now have some announcements from our chief city clerk.

Tonight's meeting is livereamed on the city's online platforms. If you wish to address the city council during tonight's meeting on the item on this agenda, we request that you please complete a speaker card and hand it to the clerk at this time. Okay. Uh, first item, please. Public comment. Mr. Mayor, I have no comment cards. Really shocked. Okay. Next item, please.

Fiscal year 2026 to 2027 budget study session for proposed city operating budget and capital improvement program. Finance Director Kahula and Assistant Finance Director Tang will make the presentation. Mayor, members of the city council, um it is my pleasure to present the proposed uh present for this study session the proposed budget and capital improvement program for fiscal year 26. Oh, it's time for the meeting. Uhoh, we won't tell them you're here. Time to wake up.

Time to wake up. Okay. So, uh overview of tonight's uh budget study session. So, we'll uh take a look at the budget development process. We'll take a look at the community budget survey results. Move on to the financials and start with the citywide financial overview, the general fund overview, um the other city funds, internal service and special revenue funds staffing overview, and then Linda will take over and do the capital improvement program and finish it off with the next steps in the budget process. So, beginning with the steps to develop the proposed budget up to this point so far, um January 28th, we began the budget preparation. The department of directors received budget instructions and began developing spending plans for the upcoming fiscal year. At the regular city council meeting on February 3rd, we did a budget kickoff discussion to have a public discussion of budget priorities, budget process, and key budget dates. Internally, on February 13th, city departments submitted their um budget um spending plans for fiscal year 2627 along with funding requests for new initiatives and capital needs. And then on March 11th, the finance team um consolidated the revenues and departmental budgets for the city manager review. And then from March 16th through March 25, we had budget review meetings where department heads and their respective staff, city manager, and the fi and the finance team conducted a detailed budget review and made preliminary revisions to departmental budgets for fiscal year 2627. And then that brings us here today, April 22nd, for the public budget study session where we're presenting the draft budget to the city council for initial review and public discussion. Uh before we get into the numbers, we'll

um provide the results of the community budget survey that was conducted from March 2nd through um April 17th. We had a total of 129 responses. Um and we focused on service satisfaction, funding priorities, and budget trade-offs. So under community funding priorities, we asked the C, we asked the question, if you had to select one area as a single's highest funding priority for fiscal year 27, which would it be? And the two highest responses were public safety and emergency response at 29% and streets and sidewalks and infrastructure at 25% with 32 responses. For community sentiment, we asked overall how satisfied are you with city services? And um overall 64% of the people who responded are are satisfied overall between somewhat satisfied and very satisfied. And then preferred funding strategy. We asked the question, if additional funding is needed during fiscal year 2627 to maintain or improve city services, which approach would you most support? And by far the most support was for rep prioritize existing funds at 60% followed by new revenue measures. So overall, the results uh validate the direction of this proposed budget, prioritizing our core services such as public safety, streets, and infrastructure, and maintaining fiscal responsibility. Moving on to the numbers, we'll begin with the city citywide fund summary. So this this slide summarizes the city's budget across all fund types. Um, our general fund type, which is our main operating fund, has um the largest portion of our

citywide budget at 65%. Followed by our special revenue funds, um, 22 of them that are restricted for a particular purpose at 26% and then our internal service funds that provide services to other departments within the city um, at 9%. So total all funds budget is 92.6 million. When we look at type of expenditure, our operating expenditures in the budget for fiscal year 2627 is 87.1 million 94% of the budget in capital projects. U 5.5 million or 6% but there's been a little bit of adjustment since we put this slide together which Linda will point out when she gets to the capital improvement program. Moving on to the general fund. So this this slide provides a summary of general fund revenues and expenditures. So we'll focus to begin with on fiscal year 2627. We have revenues of 47.8 million transfers in from our retirement fund to pay for the cowpers pension cost of 11.5 million total revenues and transfers in for 2627 of 59.3 million. And then on the expenditure side, we have 58.9 million in expenditures and transfers out of just under a million. So total expenditures of 59.9 million. So we'll have um general fund operating will have a net change in fund balance of a decrease a deficit of $635,000. So in order to balance the budget for fiscal year 2627, we will need to use that portion of general fund reserves to maintain a a a structural balance budget. Um overall increases, total revenue increased by 1.5 million, total

expenditures increased by 3.1 million. And on the slides um forthcoming, we'll get into the details of what's driving revenues and expenditures and the changes. So moving on to general fund revenues. So this slide shows how general general fund revenues are composed. Um obviously you can see from the pie chart on the right that taxes make up the large um portion of our general fund revenues followed in by the transfer in from the retirement fund to pay for the Kalpers pension cost. Between the two that makes up 82% of our general fund revenues. And so this slide provides a comparison of our revenues from fiscal year 26 2526 to 2627. As mentioned earlier, overall revenues are projected to increase by 1.5 million. Um taxes projected to increase uh by 262,000. um just point out the big ones. Licenses and permits projected to increase by 1.1 million and we'll look at what's driving that increase. Fees and charges for services increased by $478,000 and other revenue lower by $276,000 and transfers in lower by $465,000. And on the upcoming slides, we'll look at what's driving those changes. So um our taxes as mentioned earlier we have an increase of 7% or $262,000. Our u largest and most stable revenue source our property taxes secured and unsecured and the property tax in lie of VLF are projected to increase um by 180,000 and $266,000

um each respectively. And then from there, the remaining of our our taxes are projected to remain flat or actually uh decrease a little bit. Um and then moving on to our other general fund uh revenues. So licenses, permits, licenses and permits. Um projected increase of 1.2 million. So the large driver of the licenses permit are the building permits. Um as there is projected to be um a large amount of development activity where um um permits will be being pulled. Not only the building permits but the electrical permits and the um plumbing permits. And then overnight parking permits are also projected to increase by $145,000. Use of money uh and property projected increase by $152,000 as our interest income is projected to be higher compared to the fiscal year 2526. Fines and forfeertures projected to be up by $89,000 largely due to increases in parking fines. And then charges for services increase of $478,000. Uh planchecking up 110,000. uh recreation fees as the community services department will be charging for certain classes that weren't charged um in the prior year as well as additional programming. So increase of $184,000 and then our ambulance fees increased by $1660,000. of the revenue down by 276 primarily due to um having prop a exchange in the budget for fiscal year 2526 and then a transfer in decrease of $466,000. This is the transfer in from the retirement fund. So with the Kalpers

pension being lower in the general fund, there was a less decrease for fiscal year 2627 um from the retirement fund. So moving on to general fund expenditures. So overall um general fund expenditures are projected to increase by 3.1 million. The major driver of that increase is our personnel cost projected to increase by 2.4 million. Personnel cost makes up 77% of the general fund budget um followed by um allocations from internal service funds at 8% and and contractual services at 7%. So total general fund expenditures 59.9 million and we'll look at more of the detailed general fund expenditures. So for personnel um as mentioned earlier increase of 2 increase of 2.4 million. So full-time salaries is driving the increase of 2.5 million and this is due to theou thatus that were negotiated in fiscal year 2526. The mus were adopted during the year. So the increases in 2526 were not in the adopted budget. So we have the um the the increase the MOU increases for 2526 as well as the MOU increases for 2627 which are driving up the full-time salaries. Our retirey healthc increase by $225,000 as additional individuals go on our retirey healthcare plan and the rates continue to go up. Our Kalpers normal cost increased by $342,000. health insurance increase by $136,000.

Um, OPED Trust, we do not have uh any we do not have any money budgeted in in fiscal year 2627 to contribute to the OPED trust. Um, we had that in 2526. And then our KPERS UAL, that's the uh CalPERS liability, um decreased by $88,000 as a uh safety um liability line item was paid off in 2526. other general fund highlights. Um as mentioned earlier, the um the 2526 salary and benefit adjustments as well as the 26 27 uh salary and benefit adjustments are driving the personnel cost higher for 2627. There is a vacancy factor of 3% built into the budget um of $817,000 and as mentioned earlier no contribution to the OPE trust. As far as the allocation um due to allocation changes the general fund is paying for about one FTE less than um than the prior year. So the other general fun other general fund expenditure highlights for the other the other line items. So we have our our special projects or transfers a total budget of $356,000. These are the one-time projects or equipment that are um included in the budget. They include the fire radio lease. Um an additional $167,000 for the final portion of the ERP implementation. That's the financial system. And there's $50,000 included in the budget for bleachers at Vincent Lugo Park. There's a transfer out to the mission playhouse from the

general fund of $843,000 to support operations. And then allocations from the internal service funds are a net increase of $442,000. The major driver is our liability insurance for JPIA is projected to increase by $564,000. that is offset a little bit um by $118,000 as we paid off the home and capital loan in 2526. On the count contractual services size total budget of 4.3 million we do here's a highlight of some of our major contractual services. We have mental health case management at $59,000 animal control election services. So uh 2526 will be an election year. So that is driving the increase in contractual services for 2526 crossing guard our IT subscription legal services in including our city attorney pro prosecution and labor $614,000 uh parking enforcement and then fire dispatch and then additional general fund expenditure analysis. So augmentations that have been included in the 20 26 27 budget. So we've added 22,000 in community services for custodial services. Um $113,000 in community services for afterchool and sport programs. Uh the public works for in public works farmers market overtime budget of $48,000 for the fire department uh paramedic school for the EMTs of $36,000. and then a um reclassification of a police dispatch supervisor,

$18,000. Special events for fiscal year 2627 um $277,000 is the budget. There are 25 special events and the high here are just some of the highlights. Independence Day, Farmers Market, Dumplings and Bear, Summer Concerts and Movies, Lunar Lantern Festival, Cinco deio, Holiday Tree Lighting, Fall Fun Festival, Turkey Trot, National Night Out, Dia Des de Deos Muertos, Memorial Day, um to name the highlights. So, here's one last look at our general fund expenditures. So, this is general fund by department. And like all cities, the departments that are providing the operations are consuming the majority of the city city general fund budgets, beginning with public safety, police, fire, followed by public works, community development, community services, and then you get into the administrative departments. So general fund five-year forecast. So we provided a forecast from 2027 through 2032. Um fiscal year 2627 is the base year that that is currently the proposed budget. And so in this uh worksheet or table you can see that our 2627 our revenues of 59.3 million our expenditures of 59.9 million and then a net change in fund balance of a decrease of $635,000. So, um what we did for the 5-year forecast is we started with the 26 27 and then we added um then we provided certain assumptions and so some of those assumptions include revenue increases

between 2 and 4% depending on on the revenue. the um there's $375,000 for the Prop A exchange included in the evenear um in the evenear forecast. Um expenditures are projected to increase by 3% and there's a 3% COLA built into the forecast and there's also a 3% vacancy savings rate and no contributions to the OPE trust. So if we look at the blue line, the net change in fund balance, we can see that based on where we stand today, that our general fund is going to um incur um moderate deficits through 2031 203132. Um we have our ending fund balance percent of expenditures. This is our reserve percent reserve um percent and our target is 25%. So we're projecting at 26 27 we'll be at 35.3 and then with the deficits and the growing expenditures that um reserve percentage will decrease to about 25.9 which will still be higher than the target reserve percentage. Um, so we're monitoring it. We're forecasting it out 5 years. We'll be updating it every single year. There are tools um that can be applied to reduce to uh reduce the deficit as we move from year to year and and um we incur the actual um operations that we are projecting. um they include uh freezing vacant positions, uh reducing expenditures, and then we also have funds in the OPED trust that we could draw down to pay for our OPED expenditures. And then here's just a a table, a a bar

chart that shows the deficits over the five years. The every other year spike is due to not having the profit exchange. And then um a line chart of the um general fund reserve percentage. And then uh this slide highlights our city reserve policy. And so as mentioned earlier, our reserve policy is to have a minimum um reserve of 17% of general fund expenditures and a target of 25%. Once our reserve target of 25% is met, then the remaining fund balance is um allocated to our capital replacement in OPEC trust. And so you can see the um the 25% is projected to be met through the 203132, but the amount committed for the OPED funding and the capital replacement will continue to diminish to be $635,000 by 3132 based on where we stand today. And then here is the uh here is a bar chart of our 25% of uh general fund expenditure reserves. As expenditures go up, the 25% um dollar amount increases and then you see our amount committed for OPED funding and capital replacement continues to decrease. So that's the general fund. Now we'll move on to our other funds, our internal service funds and our our special revenue funds. So we have three internal service funds. These funds provide services to other city departments. We have fleet services that deals with our our fleet. There are three full-time employees um in the fleet services fund. Um $400,000 has been set aside for

vehicle replacement and we've included in the budget in fiscal year 2627 $358,000 for fire rescue ambulance, 120,000 for three police vehicles and $40,000 for fire engine equip equipment. Uh risk management, this is our JPI liability insurance plus uh some tail claims. So, our workers comp, uh, no change. 2.1 million is the cost for our workers comp insurance. And our general liability increased by $428,000 to 2.48 million. And then our information technology, we have our our three full-time employees in in in the information technology fund. And so, slight decrease for the information technology fund. and they've included in the budget $40,000 for a citywide AI project. Now, moving on to our special revenue funds. So, these funds uh receive revenue that must be used for restrict for restricted purpose and those restricted purposes range from transportation, public safety, community services, utilities and other. And so overall, our special revenue funds make up 24.4 million. And there have just been a couple items to highlight in our special revenue funds. And in the wastewater fund, we added $25,000 for um for homeless encampment cleanup and um and $150,000 in the community services fund for a second uh summer day camp. So we've highlighted a couple of our special revenue funds. We have our retirement fund and our mission playhouse fund. So the retirement fund is restricted to pay for the KPERS

pension cost. So we do a transfer from the retirement fund to the general fund to pay for the CalPER pension cost that the general fund incurs. Um the retirement fund has projected revenue of 10.5 million and um projected transfer out of 11.5 million. So this will bring the retirement fund to a $1.8 million deficit. Um the deficit is project projected to be eliminated over time as the revenues increase. The revenues are are tied to property taxes. So as the assessed valuations increase and there's property t transfers the revenues will go up and a large portion of the liability is related to the unfunded acred liability where there is a a set amortization schedule that is paying down these liabilities. So the revenues will be going up and um the liabilities will be going down over time as as we know um the Kalpers liabilities um increase or decrease based on how the actual results compared to what their assumptions are. The biggest one being the the return on investment. So we're currently projecting a $1.8 million deficit and we'll continue to monitor that from year to year. And then our Mission Playhouse um revenue includes the $843,000 transfer from the general fund to support the Mission Playhouse. In the budget, included is a $69,000 amount for the centennial celebration. And um the Mission Playhouse is projecting a a small deficit of $56,000. Moving on to staffing. So really no changes in staffing. We've had um we had

205 authorizing positions in 2526 um same amount for 2627 and as we noted in the um the uh expenditures by department that it's the operational departments that um have the majority of the staffing who are providing the services starting with public safety to public works and then community development and community services. So, um, next we'll bring, uh, Linda up who will talk about the capital improvement program and then and then finish off the presentation. Good evening, Mr. Mayor, vice mayor, and u members of the city council. Um, so moving right along to the CS capital improvement program. And before I begin, as Will has mentioned earlier that there has been a slight revision to this uh capital improvement program as we identify more funding for our next annual street improvement program. Therefore, the figures in the next couple of slide will be a little different from your staff report, but they're all for good reasons for the city. So this bar chart illustrate the allocation of the new funding for the capital improvement program for fiscal year 2627. Um so overall in total is 9.4 million as new funding for our capital improvement program for fiscal year 2627. Approximately sorry four uh 4.6 6 million for intersection improvement, 966,000 for parks improvement category, 50,000 for storm drain, 145,000 for curbs and ramps improvement, and 3 point approximately 3.67 U million for street resurfacing.

Now, to go into a little bit more detailed on what those projects are, first category, we have our street improvement, the annual street improvement. We are proposing to allocate approximately 3.7 million um for the next annual street program in it include about 16 street segments and two alleys. Um we're obviously you know that is our estimate. um certainly try to do as many of those segments as we can but with the raising cost obviously um there might be slight changes but that is certainly uh what we're including in the new site CIP for 2627 and those project and the street project really is for street reconstruction asphalt overlay coding slurry seals coding um so our current gnome pavement condition condition index was 85 it went from 52 to 82. That was uh back in 2024. We're certainly trying to continue to improve it each year. Um so the next time that we'll be having our index uh uh number, it will be the next year. So we will continue and keep improving our street. The street repair and curve ramp projects from CDBG funding. It normally goes handinhand with our annual street projects. So uh we normally go that go out and bid together for the Valley Boulevard intersection improvement. There are three project totaling approximately approximately 4.4 million and we're on the final stage phase of design which is being done by the U Metro MTA. So there's a possibility I mean since there's on the final stage there's a possibility that construction may start toward the end of fiscal year 26 27 if all goes well if not it may be

in the following year but we are allocating the uh uh funding that is uh available to the projects as we go along for the I10 ebike access project we are proposing to add additional 215,000 for design We'll be adding additional funding with measure M as it becomes available as we were told we got award but uh until that is done we'll put it on paper and put it on our to our book. The next category we have our parks improvement u we're adding to add well actually no 599,713 that you see there are additional funding that we have identified got awarded to the city by county. So, we want to put that in our capital improvement program to uh have it available when the project is ready to move and it's already allocated. The next item is the veterans memorial. We're proposing to add the 116,000 for construction documents uh as available with the conceptual design. So, that's allocated next fiscal year. The storm drain category. We're proposing to allocate 50,000 to a storm water master plan. What it is is a study of a current system wanting to identify problems area so that we can choose the best fix for those that need those area that need to be fixed. Rank them by important to see what needs to be done first and also to identify potential improvement projects through this master plan. The next category we have other improvement for Vincent Lugo access uh path and bridge replacement. It is an existing project but we're proposing to add an additional 250,000 to the project to continue design work. What are the next steps?

So after tonight, initial budget discussion session starting tomorrow, we will have individual meetings with the council members. Um, and that will include the council member with the city manager and our finance budget team to go into more detailed review. On May 14th, we'll conduct an informal budget community budget meeting at the Blaza Market Hall at 6 PM. Next, on June 2nd, we will bring the budget back to council and conduct a public hearing on the presented budget where if the council so chooses, the council may adopt the budget. If not, a second meeting to we can uh con use to consider the budget will take place on June 16th to further consider consider the budget if not adopted by June 2nd. And finally on July 1st, 2026, that'll be starting out our new fiscal year as our recommendation. Staff rep recommend recommends that the city council review and discuss the proposed fiscal year 2627 operating budget and capital improvement program, provide initial direction to staff, and identify any areas for further review as the budget process continue. And with that myself, the finance director and our whole department team in the bag ours is available for questions and answer and discussion. Y

thank you Linda. Um so let's start. Uh does do any of my colleagues have clarifying questions? Councilwoman Makara. So nice to be able to speak now and not wait. One of the perks of not being a mayor. You get to be go first now.

Yes, I get to go first. So, I I guess I I was just kind of looking at the budget and um you know, there's a lot of moving parts obviously and the one for me that sticks out is uh well, like the third page, but it has street, sidewalks, and infrastructure, which happened to be, you know, uh 25% of the response uh from the community budget survey results. And then um the sixth or fifth item was neighborhood quality and code enforcement 8%. And I I kind of see that as something that really is one one universe because I you know I've been trying to figure out how do we address in the budget because it looks like it's different departments. You know this whole thing about keeping our neighborhoods clean. You know, it was mentioned at one of the public comments, but because we're an older city, a and we pride ourselves in in the trees, the trees are starting to really wear on the sidewalks. I mean, what we heard yesterday is not unusual. My neighborhood in the north, we're experiencing that. I know the south, you know, all over experiencing it. And and you know, we want our trees, but there's damage that's taking place. And at the same time, we see neighborhoods that there are homes for a variety of reasons. You know, some neighbors just don't care. Others can't afford to make the repairs or keep their lawns clean. And we've had those comments too, public comments. And I kind of think about like when we have graffiti, we have a graffiti removal company that comes out and they're very good about removing it immediately. But we don't seem to have like this core group where if we have a home that needs to be repaired, you

know, especially if it's a public area where it's our responsibility, how do we take care of them? And maybe Michael needs to come up, but it it just seems like it's streets, but it's also code enforcement and kind of coming together and being very focused, not waiting for people to come up and give us the addresses. Um, you know, how do we handle that? Because I I just think it's going to be much more of a problem. And then we have the economy. And again, you know, some people I I genuinely believe they just can't afford to fix their homes. I mean they it's just not um possible. And so I know with code enforcement uh you know they see it all. They see people who just don't care, don't respond to them. You know it's at some point you know we have to elevate it to to our uh legal counsel, but there are some people who just can't afford it. and um as as opposed to having people come up and give out their addresses. Um is there something we can do as a as a city to kind of make this process a little more coordinated and so if court code enforcement does come, we don't have to wait months or years. I mean, the homes that were mentioned yesterday, I you know, I've been getting that call over and over on some of these homes and it just seems like there should be a better process. I don't know. Maybe maybe we have a hotline and and from there there's a process where we have code enforcement and we have streets um do you know what I mean? Just something central where it it flows better as opposed to everybody getting this alarm and we're reacting. You know, I remember with the streets we have that system. I think it's called GIS where we we have, you know, at any moment Michael could tell us here's this street. This is the type of work it needs. It's, you know, it's been paved five years ago, two years ago. Would you have something like

that too with with regards to our trees, our sidewalks, um or maybe the sidewalks are included, but um just I just think we need a better better system and maybe we have it, but I just don't see it. Maybe I'll just answer a little small little point. I know there was a lot there to unpack.

I don't need all the help I need I can get in the back here, but certainly uh you know probably Michael will provide more uh information or can hopefully answer a little part of it. The the one part that I know or can answer for the area like such as trees that you're mentioning about the street trees, public way street trees. We actually do have some funding that um we do allocate for urban forest program that our public works uh always uses to plant new trees. Um so that is available in place when it needs to be done. As far as code enforcement and other improvement, I will need to see if uh our department

new trees because like I said, I I I am a big supporter of planting trees for a variety of reasons. Yes. But it's the older trees that are really put a lot of wear and tear on our streets and and you know it's the public areas that I'm focused on more so than you know private property. But Mark, go ahead.

Well, thank you Councilwoman Maka and members of the council. I'll take a stab at it and because what you've talked about covers multiple departments, I welcome the team to come up and augment in anything I said. But that really talking about a couple of things there. As you mentioned, we have a tree planting program and that's not a problem. We have funding in that. So, if people want to have a tree planted in front of their home, I suggest you have them um call us and we can work with them and have that done as long as they are willing to water the tree and and care for it. The issues you're talking about, I see two of them. One is the uh code enforcement side which I I know that you don't see as a council a lot of the behind the scene that's going on but ever since council um mentioned in a close session meeting that we wanted to have more and I'm not breaking any code uh close session issues but that we wanted to have more um proactive enforcement of properties. You didn't want to wait until they were three or four or five years old before we brought them to your attention or took care of them. Um, I can tell you that we have been progressing very quickly with those homes that are the ones that are the most problematic. So that when we hear about them, we work with homeowners. We try to get voluntary compliance, but we have very quickly um brought them to our city attorney's office for um uh for addressing. And so from that side, from the addressing side, for things that are reported to us, we handle I think very quickly. The issue is is we don't do proactive code enforcement. So, a lot of those homes could be on people's streets that they see and potentially talk to their other neighbors about, but if they don't tell us about it, we're not generally driving around the streets to, you know, to make notes of which homes need fixing. If we have a complaint about a home on a street, we absolutely do look at the rest of the street and try to make sure first of all that we're not in a neighbor dispute and that we're not enforcing against one neighbor and

it's the other neighbor that's having the concerns and we're not equal about all the neighbors. But second of all, it doesn't look great if we um call somebody out for not trimming their bushes and across the street those bushes aren't trimmed. So we try to do everything on a a block or at least an area when we do go out there. But by and large, if we don't get the complaints, uh we assume that they're not concerned, and so we don't go out there and actively enforce them. That's a a gross uh response or an o an overall response. It's not, you know, there are are outliers for all of that. For those folks that do want to report, I'm happy to say that we have started building our app, our customer service app that we have talked about for the last couple years. And I think that's kind of what you're hinting about with the GIS system. We do have a great GIS system that tracks all of our street projects. Um we do go out and check all of our sidewalks every couple of years and note where they need to be fixed and that's all on a list. Um we do have our trees on a grid so that we know when a tree needs to be pruned. So, we do keep track of all of that, but it isn't the easiest for a resident to point to a house or to a tree or to a sidewalk and report that to the city. And so, if they're frustrated with that, we don't hear about it and we don't address it. So, my hope is that that app will start to give folks a quick avenue and they don't have to worry about what department it is when they use the app. They don't have to be an expert and know whether it's public works or community services or community development. I'm hope that the public and even the council don't have to be the experts on who does what. They can just go into an app and find a list of frequently asked or frequently complained issues. Um so from a a reporting standpoint that um would be I hope a solution to that and our team is working on that with the hopes that by the end of the calendar year that will be in place and people can have that app

on their phone to either take a picture or um send in any of those concerns and they will very quickly or be put into a priority list and we will deal with those issues. We could look from a standpoint of helping those neighbors that can't afford it. We have never looked at our um CDBG funding, which is our our funding for those areas that are low income or for homeowners or or residents that are low income. It's been I shouldn't say never. We um back in the day had programs where we had like $10,000 emergency grants for somebody who couldn't afford to fix a leaky roof or to paint their home. We could redirect some of those funds to a program like that that could help those folks that can't afford to do it. It does come with a trade-off because we will be pulling it out of potentially the money that we do sidewalks for example in those lowincome neighborhoods or those um CDBG eligible neighborhoods. So it doesn't come without a cost or a trade-off, but that's a program that we could um look at when we put together our our CDBG budget for next year. We're kind of locked in for this year, but for next year we could look at that as a way to help those homeowners. Um, and then the other question you uh uh talked about is actually going out and identifying those homes. That's a a direction from council. Um, if you want us to be more proactive, uh, I think in the short term it's probably setting us up for some frustration because we don't have a full code enforcement staff right now. So, we could go out and identify those cases, but we don't have the person power to to to address those. But if council is wanting us to be more proactive and not just rely on um people um actually turning homes in or or making complaints, we could figure out a way to do that in the future and try to uh bring that in. There is another trade-off. There always are trade-offs and the trade-off for that is you'll get a lot of complaints um because those folks who are are being um brought in

that that ends up generating more complaints than those ones when um we're just addressing the ones that we receive. So, I hope that answers all of the questions that you brought up.

Yeah, the the reporting app I think would be helpful, but I I again I'm always try to be more proactive. I know there's a cost involved if we take an inventory just like with the historical preservation commission. You know, they did this inventory took them two years, but we now have an inventory of all the historic or possibly historic places. And then we did for the GIS system, you know, the kind of the payment condition index, I think it's called. And so we know what that is. It just seems like, you know, maybe not necessarily the homes, but those I I'll go back to the trees. I think there's a lot of damage that the trees are really doing. And and again, I I love trees, but there is a cost involved. if we had at least an inventory of that, then we can at least start planning because I think right now it's whoever calls the complaint is going to get that area, you know, remedied. And I'm I just want to try to see if there's a a better way of of doing that. Uh, regarding housing, you know, we would have to I mean, I would encourage more to look for grants um as opposed to pull what we have right now, but I I don't know with our grant writer if that's an area, you know, I I think they have their their marching orders. Look, money for Smith Park, you know, the pool. We know that's a high mandate, but what about just um assistance? You know, I know there's programs out there. I know everybody is vying for them, but maybe working with our grant writer um and finding out, you know, what kind of programs there are to help those because at the end of the day, I mean, that's, you know, we're just trying to improve our neighborhoods. But if they can't pay for their homes, then, you know, maybe that's not a great option for them. But if there's any kind of assistance that we can provide, I know if we go online onto our website, we do have a lot of

resources for people. Um, but most of them I think are to help them pay for their mortgage or pay pay for their rental, but it's just the maintenance of of the of their property that starts affecting neighborhoods and and that's where I think um, you know, if there was something we had to help them, but I I I don't know. I I'm just trying to, you know, talk with my council members and I know they get the phone calls just like I do. I don't think any of us, you know, don't we're getting phone calls like that. And I I just want us to at least have that conversation because I don't think we've ever have and I think we're kind of sometimes, you know, we're crossing those lines. I I don't want to It's a private matter, but at the same time, it's affecting the neighborhood. So, um anyway, but thank you for your Oh, and here's Michael. Would you like to add something?

Yeah. Uh, I was going to add we do have a citizen problem reporter feature on the city website that goes to that GIS. So, um, you recall we got the one for the street light the other day like that got submitted on March through that program. So, we do get that. We have an app that people can use. It's just not as robust as the one that they're going to be bringing with this. It's really just a direct. So, what's the difference between that one? because I know the light because of Gabrielino that light seems to be a constant but but what's the difference between that program and the one that Mark just mentioned?

I haven't seen exactly what's going to be involved with that but what we'll be working towards ideally is a more robust actual maintenance management system to where it it has actual features within it. So right now if someone submits a problem to their right the only feature they're creating is the problem that they created. So it's not attached to an asset. And an asset could be whatever, you know, it could be a street segment, could be a sidewalk segment, it could be a a tree, anything that's the city's belonging. And so within a true asset management system, it's actually going to be attached to that asset. So you could pull up that asset and you're going to be able to see every report that's going to come in on that thing. And we do have something like that for our tree system, but it doesn't communicate with that system. So the tree system is something that is um our the tree contractor that we have that does some of the work. they maintain that system. So, it's a separate system. It is GIS based. We can see where it is. It shows us when each tree has been maintained. Um, but it doesn't communicate with those other functions.

Iliana could probably speak more about what the the citizen problem thing is going to be. Um, you even get into that.

Um, I did want to say for the sidewalks in particular, we do inspect those. So we have someone like one of our inspectors who goes out and the goal is to look at all the sidewalks every two years. So he does one side and then does the other basically alternating years. So we do have track of that. Um a lot of times it has just to do with the volume of the amount of work. So if there's a small lift or something like that, we're going to go out and triage that and get rid of the the hazard essentially by grinding it or maybe ramping it. And then we're gonna so we're going to be addressing those and the larger ones we're prioritizing them and going working through a list like our streets guys have a list that they're constantly working through. So there's really just a certain volume of things they can replace. So for instance the one that came up last night at council I was out there today looking at that and trees play into that one as well. You know there's two very large trees in the parkway there. Um there's a good chance based on looking at the one in front of that house we probably will remove it. Um, so we inspect those things. The streets guys whenever they get sidewalk things and go look at them. I'm an arborist, so I go and look at them with them. And so I'll evaluate that on whether they need to be removed or um, we try and do stuff to the extent practical to preserve trees when we can. Um, but it's really it really is just a a volume question of how much sidewalk can be done.

I was going to say the sheer volume. I mean, our public works team can't do it all. I mean, they're doing sewers and they're doing I mean, there's so many other your scope of work is endless, it seems like, but I don't think we've ever been able to focus because we were so busy with the streets. Now, we got our streets at a at a good place at is it 89 BCI? Something like that. I think it's about 80. We actually just submitted the requisition to develop the next uh cycle for So, we'll have that. Okay. Coming up. So, so we got the streets it seems like, but it's the trees with the sidewalks that is creating a real hazard. Yeah.

And then and then we have those neighborhoods that the homes have not been which is a code enforcement, but it still kind of spills over it seems like.

And we do I mean we keep an eye out for that stuff when we're out there. Um when we looked at that sidewalk today, one of the houses, right, it may have been one of the ones that was mentioned, you know, it looked there's no car there. Uh we check it seems like it is vacant. The grass is probably about this tall. I mean it's so it's it's definitely we keep an eye out for it and we'll report it when we see it um to that extent if it's really significant. Not every little thing just because it's you'd get bogged down forever if you really try and nitpick too much. But um there is some active end on that as well on the public works side at least as far as relaying things to um community development. just end it now. I guess we could we'll have more discussion when we have our 101, but I just wanted to share that with my colleagues. Thank you.

A council will thank you mayor. Well, thank you so much for uh the presentation. Um I do have a several question for well. So on your page 12 can you more specific uh specific about uh property tax secure/secure property tax in lie of VLF and the last one is other property tax what is the difference between you know within all the three different categories. Uh, sure. Uh, council member Woo. Um, the property tax secured unsecured is um that is the 1% that we all pay um on an annual basis in in two different payments. And so um there's the 1% that's uh charged on the assessed valuation. Uh we get about 10% of that 1% and then the the remainder of that 1% is allocated to the county and other districts. um other property tax. So that includes our property um transfer uh revenue that um that is assessed on um when there's a sale and it's 55 cents per $500 of sales value. And then there's kind of a catch-all property tax all other and that's your supplemental lay fees um and um past due property taxes. So and then property tax in L which is another large portion. So there um a few years ago the the state um had had um provided a property tax in L where they basically exchanged or lowered our VLF. They lowered the VLF amount to lower the amount of VLF that the cities would get.

What is VLF? Sorry. V vehicle license fees. Okay. Thank you. And so um they lowered the amount of vehicle license fees and then in lie they provided a property tax to the cities so that it's a property tax in le and it's property tax based but in in lie of the VLF that occurred um quite a few years ago. I see. Well thank you. And so property tax if I um please correct me if I'm wrong. So property tax that every $1 that goes to the county then we got 10 cents back not 14 cents but 10 cents 10 cents that on the uh on the amount that's assessed

and okay so uh that does not include uh the retire uh retirees tax. That's correct. Okay. So the amount reflects on your uh uh on your report that is the exactly 10 cents out of the the total amount. Is that right? Uh yep. Uh the property tax secured unsecured is uh basically 10 cents on um the total per dollar of the total assessed valuation that you pay in your property taxes. So let's say if any one deloquent on their instrument and they will be like a 10% penalties

we also get 10 cents out of the penalties. Is that correct? Yeah that's correct council member in other property tax is the gap between the old um old value of the property to the new value of property. So there's a gap that increased that that is how you classify as auto property tax those supplemental taxes. Supplemental taxes kind of kind of the catch up. It's a lot smaller portion but yeah the supplemental taxes.

So the entire numbers here uh for example uh our we have several um major properties like province uh we have um the one and also 860 East Valley Boulevard. So those are the three pretty um significant and recently completed projects. Are we counting those property tax already in this category? Th those um the increase in assessed value from those projects will be added to the tax roles over the period of construction. That's my understanding.

So so far I mean once they completed then we will in we are entitled to get the property tax portion. Uh my understanding is even before that. Even before that because that time when there was like a just a land value property then we collect the property tax is just the land value. But when they developed and there's actual value for each unit. Mhm. So we will collect the money from that and and and as it progresses each year. So they increase the value in a year then that would be added to the tax roles and then um the next year and then the next year. And so it would progressively u be added to the tax roles not just when it's completed.

I see. Thank you. And uh about a fiveyear forecast I do see that it seems we will be reducing our deficit year by year. So which is like next five years we may have like a heavier deficit number for now and for next one or maybe two years later. Uh is that something related to the property tax value or

um the our our deficit kind of um goes up and then it goes down. Um you can see on the the bar chart here um that um it um it in in the even years in 2728 we get an there is an additional prop a exchange revenue is built in. So then that's in those years the deficit would go down but you know in in the odd years you have the um the election but it's not as much as the property tax money. So it kind of goes up and it kind of goes down. So, so um that is your kind of every other year revenue where the majority of everything else you know election is every other year as well but the majority of everything else is somewhat steady and and it's um increasing just projected to increase at like a a two to 3% same on the expenditure side.

I see. Thank you. And uh another question is on your page 16, the OPAP trust and the Kalpers UL. Is it right that if this is minus that means we have less uh liabilities on this?

That's correct, council member. So our our um safety unfunded acred liability the the the debt that we had so it was incurred um probably like in 2003. So, we've been paying it off for the last 23 years and in 26 we paid it off. So, the payment was like over a million dollars per year. So, we paid that that line item off. Um, so that was the reason why our UL payment went down by the $88,000. So, if the number is not negative but it's positive, that means we have to pay that out of our own general funds pocket.

Our Kalpers pension cost. the Kalpers U and the Kalpers normal cost um is paid for basically by the retirement the retirement um fund fund. Yeah, that is in in our property tax as well that there is an additional property tax to that um where the offsets that where the retirement fund um generates its its revenue. Okay, great. Thank you. May I interrupt, please?

I'm sorry to to interrupt. I just want to make sure that we're clear about this. Everything will said uh for the um Kalpers UIL is correct, but the other question you asked, Council Member Woo, was about the negative number for the OPED trust. And I don't want to um confuse that or I I want to make sure we're transparent. The number uh in red uh for the OPED trust, that is negative because we are recommending that we don't make a payment this year to the OPED trust. That is something that's optional. it would be funding future years payment. That 250,000 goes into an investment account and it helps us pay for the cost of the retirey health. Um that comes out about two and a half million dollars a year from our expenses. Um and that's what uh Will was talking about. At some point if we wanted to, we could pull money out of that to help us make those payments, but we're recommending not making that $250,000 extra payment this year because of our deficit situation. It doesn't seem prudent to make our deficit $250,000 more to put money into an investment. It's kind of like robbing from, you know, your bank account to invest, which or or from uh taking a loan to invest, so to speak. The number on the other side on the left side, the retirey health, that cost has actually gone up. You can see that's a plus 225,000. That's what we pay every year to pay for the retirees, people who have already retired and are on our health care plan. So, the UAL number at a negative, that's a good news number. The OPED trust number at a negative, um, it's not a bad news number, but it just means we're not, um, paying for our future liability.

Does that mean that we save a little bit more in our general funds because we're not paying that out? You're correct. But when we get our um, actuarial assessment of that fund, that's probably going to go up. the future liability.

It's based on what their expectations are for how long people are going to live and how many folks that we will have on that plan, but also they take into account how much money we're putting on investment and they give us a credit for that. So again, being fully transparent, that's an optional payment we're not making and it could make our number on paper go up, but in reality, we're only required to pay for the actual costs and we have that in our budget and that's fully funded. And Will, please correct anything that I've said if it's incorrect. That's absolutely correct, city manager.

Well, thank you. Thank you very much, Mark. And thank you, Will. And and also my next question is about the citywide AI projects. May I just get to know a little bit more about what is the AI project that we're talking about here?

Uh, sure. I'll do my best to explain it. Our IT manager, David, could probably explain it a lot a lot better. But um the way he describes it to me basically you know it is a kind of an internal AI for the city where um it wouldn't be necessarily connected to the internet where we could load all of our documents and all of our um wouldn't say confidential but you know things that we we don't want out there on a chat GPT or a cloud and it would be in internal we can load all of our municipal code we can load all of our resol resolution, ordinances, fi financial, our budget, our our acers and and put it all into this AI and um and then from there we could just um have access to the information and pull it out um using this um internal AI where this would just be like an internal just with within the city and it wouldn't necessarily be connected um outward. So when you say that it's a internal AI that means that is nothing to do with our traffic like we have a now we have a sensor camera that will be helping us to make the traffic flows a little bit more easy because now we have a very heavy traffic flows on during the intersection of Delmare and Valley or St. Gabriel and Valley. So uh we have those uh we call the fiber optics that already undergrounded. So is that something to do with the AI as well or this is only for the office use?

This is only for the office use. This this doesn't address that. I see thank you. And uh I I then I have a question for Linda. Okay. So, Linda about a CIP and um I understand uh councilwoman uh Managa mentioned about the tree. So, we have a contract with Northstar. So, that is a part of the CIP expenses. No, the so our contractor we actually had used a couple a couple of different fund not a part of the CIP.

Uh and that's an annual contract that we actually have. So partial of it is general fund and partial out out of another uh special revenue fund depending on where the trees are at. Oh really? Oh okay. So then I mean uh special revenue funds as you know it's restricted. So uh if it's going to be trees on our parkway I mean a park city parks let's just say general fund will be paying for it. If it's a street tree then we have street fund that's going to be eligible. will be eligible to pay for it. So, uh, our annual contract with the tree maintenance, they're paid using special revenue, special,

but it's not it's not a part of the CIP program. There is two separate things. So, the projects versus pro uh the CIP program. Got it. Okay. Thank you. And what about the replacing the the street signs? Because I know that this is a part of our plan already, but is it part of the CIP as well? Um the the street one we have allocated 200,000 with this fiscal year. Uh it is funded by our special revenue but that is not a part of the CIP. We classify it as a special project. Special projects.

Correct. CIP programs I mean it is meant to be certain certainly larger program multi-year program that you really cannot finish in a year most often time their large uh capital outlay. So that is more like one time because we will not special project is more like a one time or shorter shorter projects that hopefully you know I know we have not completed that program we have not spent on that uh but it is in the process uh and it's been allocated separate from CIP. Thank you. And CDBG fund is not from our own city that is granted by somewhere else. Is that right? That is correct. Okay.

So yeah CDBG is a f is federal fund. federal fund um and administer and really passed through to us from the uh the LA comm uh LA CDA authority commission. Yeah. So CBG is federal funded. I see. Thank you. And what about um you know what is the session that we are reading here today that since we already have um uh initiative of the uh police station. So let's say there are five different option for us in the future to discuss and because uh our attorney is not here so I probably can speak a little bit freely but I you know the things is

I'll allow it. Yes. And uh so let's say if the projects that will be approved by our residents saying um we approve that you can increase the sales tax that you are able to build a a a brand new police station building. Will that trigger any things inside of the uh the report that you showed us today? Would that be moving some cost from here from there or that will be a so totally different projects and that is from different pot?

That was certainly certainly I believe it's from a different I mean it's going to be a new project definitely a large CIP project from different funding source. Um uh maybe I have to ask maybe better explain that for me. Yes, please. Linda's right. So, it' be a totally new project. We have a very small amount of money in our development impact fee that we would use to start the project with maybe some work with the architects, things like that. But Linda's right, unless we receive um a sales tax measure or some other funding source,

it's not accounted for anywhere in our budget, but if we were successful in that, it would turn into a CIP project and it would have funding over several years because that would be a several year project. The reason I asked that is because I want to make sure that if we d that will be approved by our resident by our voters that will not squeeze some of the we say the um that human resource like we have we will not be able to hire more police or fire uh we will probably need to cut down something because we have to build a new building. So that's why I I would like to make sure if that would be approved by the residents then it would not be impact anything that you're presenting to us today. I think that would be the opposite of that. Um be it would it would impact it in a positive way because um any funding measure we would do would be a general tax meaning that it would just go into the general fund. It could be used for anything that the council um deemed to be important. It wouldn't be just a police station or a fire station measure. It would be general. So, it could be used for streets. It could be used for um uh salaries. It could be used for sidewalks. It could be used for any of the things council had talked about. And so, it would go in as a revenue source. We would, if we wanted to do a police station building, we would set aside that revenue to pay for any either bonds or loans we would need to uh build the facility. Um but it would have the opposite effect. it would actually uh balance our budget over the next several years and we wouldn't have a deficit.

So which being said that will not uh affect what we have here right now. It will not be like squeezing and saying oh I'm so sorry we cannot increase the salary or anything because actually the the the revenue that we will be generated from the new tax measure that is not restricted. We can use that fund for any purpose including the new building of the police station. That's right. If we were to make it um a single purpose, like if we were to tell the public this is only going to be used for a public safety building or any other thing that we decided, that would make it a special tax and that would require a 2/3 vote, meaning 66% of the voters would have to approve it. And that is a very unlikely uh hill that we would have to climb. Um, if we were not to get that funding source, uh, then we are going to have a very difficult decision to make, which is, do we need to somehow find funds within our budget to do some sort of band-aid approach to fixing our police station? And if that happens, then it would necessitate um, changes to our budget. It could affect salaries and other things. It would be a choice for the council to make, a trade-off for the council to make. Um but no, if the measure were to be successful, it would not affect anything in the current budget ex except in a good way. It would add to our ability, our flexibility. So we would not be like a a catch 22 things like it would not be that difficult. Okay. Well, thank you very much and that's all I have for for now. Thank you, Mayor.

Thank you, Councilman Woo. Who would like to go next? Council Herrera Aila. Thank you and thank you for the great report. It's a lot of numbers. Um, a lot of great information. I could kind I have a few questions if we can move to slide four. This one's pretty simple. Um, I know we conducted this budget survey. I just kind of want to know like the the test subject about how many people were were involved.

Um, go to page over here. So there were a total of 129 responses received for the survey and and this was just generally the requirements s San Gabriel residents or anybody uh really anybody. We we had um an option there for them to identify who they were, whether they worked in San Gabriel or they were a resident for how long they've worked. Um we had some demographic information.

Interesting. Thank you. And then the last question on this page here, u 64% satisfaction overall. What is the typical satisfaction that that a city would generally shoot for? Um I I guess that's kind of like an open question, right? We're shooting for 100%. Shoot for 100. Yeah. I want everybody to love us. I'll 64, so we got a little bit of work to do. That's very hard. And so I'm that's where I'm trying to understand uh is what what what is good what I mean obviously right 100 will be amazing but I I feel that would be impossible. You can't keep everybody happy.

True. Yeah. I I kind of think of um those polls that they put out there for political leaders and what their um um you know satisfaction percent is and if they were at 64% that would be a really really good thing. Good. Good to know. Let's add um we did

and then we're going to move to page if we could just move to page it could 24 is okay but uh or let's go to page 22 okay and I just want to understand so for as far as the general fund I know for a period of time we were very very bad right we were at a low percentage. And then the council agreed and we we um we were able to push those numbers up by paying this loan that we had, this really bad loan that we got. Um and now it seems like we're back in a downturn for the next 5 years. And I know with everything that happens, uh, especially with with us investing in in the police and which is a good thing, uh, we we have other things that we're not that we're accounting for that are not yet in the books. Is that correct? Like projects finishing finishing up and the revenue that comes from that from those different projects. Is that accurate?

Um, you know, I I think uh well, true. Yeah. I mean we we do in the forecast you know the the one project that comes to mind is the curio and so we do have some a little bit built in a very conservative amount um built in for our toot that we would generate from the curio so it's a little bit has been built in there um in into the forecast and and then um you know our property taxes have a 4% um escalator each year. So, um, over the over the five years and that's kind of been our historical increase in our property taxes. So, we've put we've put those things in the forecast. Interesting. So if if the trend continues, right, which we don't want want it to continue downwards, we're we're eventually going to be below the 25% that we set as an as our own personal marker, not as not the other marker, which is the 17%, but we have that 25% marker to Can you explain what the those differences are?

Yeah. So when we um we can go to page 21, too. I just want to point um an item out but so when we originally said our reserve policy we set it at 17%. And that is the minimal recommended by government finance officers association. So we achieved the 17% um we exceeded it we were we were over 40% and um so then we updated our reserve policy and and we said okay let's have a let's have a target um reserve percentage of 25% that's that's our target and once we reach that 25% now we can start putting some money aside for our our our major capital projects the police building funding our oped but let's let's hit our 25% if we ever got be below 25%. We said our our minimum though is 17%. And if we ever got to se to below 17% then the city manager is required to come up with a plan on how to get it back above 17%. So we kind of have that safeguard in place.

Interesting. So then that plan will probably I'm I'm kind of guessing here like cutting back which we don't want to uh and going down those steps. Right. Interesting. Well, that's good to know. And and one thing I want to point out, uh, Council Member Herrera, is um, you know, so over the five years, we are we we're in an oper operating deficit. Um, they're moderate. They're they're just a few hundred,000. And so our ending fund balance, and that's pretty much like your total amount of your your reserves is 21 million. And then by 3132 is 17 million. in that that period that you were talking about earlier that ending fund balance was actually a negative number.

Interesting. So I bring these questions up because I want to understand like is there anything that we can do on our end? I know that we've have like in the last couple years we have like grant writers, we have different people uh that are not part of our immediate team that we've brought in consultants to to fight for us in in the state and and possibly I'm not sure if we're doing it in federal level, but when I go out to these conferences at the state capital or in Washington, I see that these other cities that are smaller, they come in with teams and They come in and they they have these lobbyists and they have these people working for them and bringing them revenue and I've hear nothing but real positive stories. So, is there anything that that we see there? Are there any opportunities for us to go out there and get more support to get more money back that we might not have considered uh in the past but are not thinking about?

I would uh be happy to take a stab at that. Councilman Hura Avala, uh two things. Uh to answer your your uh most recent question, we are looking at at um bringing on a different team and that team could be our our current grant writer with lobbyists or a new grant writer and lobbyist. We're working on on a RFP to bring in a lobbying firm because it's clear that some of the cities around us have had a better luck than we have at getting what we call either congressional earmarks or state earmarks where uh projects for things like community centers and other things are are being funded in the cities around us and we haven't been as successful. Those funding sources though are not generally ongoing funding sources. Those are for specific projects. So, I don't know of grants um that anybody's received that would go into our bottom line and help our day-to-day or year-to-year expenses. There are a few for things like um police officers and firefighters when we're trying to increase our firefighter numbers. For example, those are for a finite amount of time and after a certain number of years, usually three to five years, you have to figure out how to pay for those firefighters or police officers or staff members going forward. And so it's a temporary uh way to to fund those. All of that to say that we wouldn't we're always looking for new funding sources, but I I wouldn't want to overpromise and say we could find funding sources from our our um lobbyists and other things for fixing our deficit that you're seeing here. Absolutely. For for projects, things like pools and community centers, things like that. What will has also mentioned um is that the budget numbers are are pretty small as far as the deficits go. We don't anticipate presenting you with a budget for the next 5 years that has a negative in it. We're just showing you how it would play out if we didn't do any adjustments. This is um I don't want to

say that we're over um u estimating our expenses, but we have funded everything fully that we think a healthy city needs to fund. all of the services, all of the um the um staff members, all of the kinds of programs that we currently have and um we haven't cut anything. If we got to year two or three and we were still in this position, we would start to present ideas for how we should reduce that because it wouldn't be healthy. It wouldn't be prudent to go five years with cons continued deficits. We would want to make some changes. And also this doesn't um include as as we talked just a brief while ago any new revenue sources from things like tax tax measures or things like that. But these deficit numbers would be achievable to try to reduce with some simple measures um that we could do. It wouldn't be the the best method, but we could if we needed to present budgets that would be balanced going forward if we ever got to that point. I I want to add something because I was there when we were put put on the watch list. It was six months after I got elected. Part of the problem then was our um chief financial officer was making all these you know this is an extremely conservative um forecast and even as conservative as it is we're still meeting our policy which is 25%. So I keep hearing deficit we don't know what deficit is. We had a deficit back in 2017. That was a real deficit. And what the CFO at the time was doing, he was making all these

which was not Will, right? No, it's not Will. Just want to make sure that's correct. That's not Will. Before your time,

these two people before him, but anyway, um and so there were they were assuming these projects were going to come online. One of them was the courier. And so all these revenue numbers were so inflated. And then Mark came along and said,"Well, what what are we doing here with these projects either, you know, are not even we haven't even broken ground yet, and you're already making all these estimates, all these revenues." That's how we got on the watch list because once you started digging, you know, at the numbers, you realize, you know, curriers just one of them. Uh this isn't wasn't going to happen. These numbers don't exist. It was so um overly exaggerated and and that's why we got ourselves in trouble. So we as a council, all five of us were there when we made a decision to invest in our public safety officers and we all knew we saw the forecast and we said yes it will be we're going to start going into our reserves but we're still at a very healthy level. So even if we take this as it is right now, if you look at just this year alone, we would still be at 35%. That's still a very healthy level with the consideration that we all made, the five of us were there when we decided we're going to invest in public safety because that is a priority in our community. And the most recent um survey shows it continues to be number one, right? And so I believe that as these projects do come to fruition, then Will's going to start adding more revenue. And so even at 35% we're still good. I predict by 1231 it says 25%. It's still going to be much higher than that. But I appreciate the fact and I know Eric I mean the mayor does too. We do need to be conservative. We cannot you know ex on the expenses. I understand we're always a little more aggressive there because it's best to

show more than less on expenses, but on revenues do do not show more. Do not show create these revenues that don't even exist because these projects, we don't know when they're actually going to come to fruition. I mean, uh, they've gone through so many different ownership and then we have the the economy and all that. But one of the things we learned during COVID in particular is when we have to buckle down, we know how to buckle down. We we we did a very good job. And that's not just with expenses, but even vacancies, not being able to fill certain vacancies. We did it. We can do it again. But if you look at this, and I wish there was another word than operating deficit, because people get worried. I can see right away people, oh, you know, there they go again. No, no, no, no. Look at the bottom line. Look at the full picture. We're still in a very strong position, stronger than most cities in in the area. um 35%. I I can't even think of another city that's even there, but I think because we've gone through this growth spurt and and you know, we've we've been there being on a watch list, um I think we're just much more conservative than than most cities. So, I just want everyone to kind of put it in perspective and you know, we're fully staffed with our fire and police and that's something we should be very proud of and that's a priority that I think all five of us

decided back when we were doing negotiations. So, I just wanted to add that. Yes, count. It's weird calling you council member again, but okay. Councilman. Um, yes, thank you for clarifying that because yes, we were all in in the room and we we all anticipated um what we're seeing here and and I'm glad that we're being conservative and not fluffing numbers because then we'll be in a huge problem. Yeah. Um so, thank you. Thank you for that. And uh I'll yield back. Okay. Thank you, Councilman Herrera Avula. Councilman Ding. Okay. Thank you, Mayor. Yeah, got torera.

Okay. I I go back home to practice. Okay. Yeah. Yeah. Councilman can go home and practice

the same time. Okay. All right. Yeah. It's I I saw that like the other council member it's already talking about project future conservative things but I just want to double check the uh with the mark. So I when I got the elected 2020 so we still use the same principle try use the conservative revenue and the maximalize the expensive for our budget right for the for the the next year budget right that's I feel like last six year we did the same thing so that's why we have the good control for our budget even sometimes it's a deficit but later we become back to the the surplus. That's our wish, right? So, especially like uh uh for the this budget also the full staff the the budget, right? If same to the last couple years, right? Assume we hire all the people based on like uh priest and fire or whatever the position. uh we are not having any positions uh purposely frozen or vacant in our budget. So we can hire every single position. We can have somebody in it,

but we know that just naturally with people leaving and and coming. We have more than a 3% vacancy rate in our city. Every healthy organization is going to have about 5% or more. So, long story short, we have a 3% vacancy factor built into each of those years. Again, correct me if I'm wrong, Will. Um, so so it's it does include a small vacancy factor. Okay. But that's not like a a budget um correction model that's trying to to okay, you know, for vacc 3%.

That's correct. We were um you're you're correct. We had it fully staffed and we didn't have a vacancy factor. This current fiscal year that we're in, we included a vacancy factor, but in years past, we have not. Hopefully still keep the 3% of vacancy otherwise probably we have the more expense. I um yes, you're right. But I would assume that we're going to have more than a three three legacy just with natural and actually council will see at our next council meeting or the meeting after that. Um we have a a new requirement from the state that we started last year that we present all of our vacancies to the council. So you see what our numbers are

and we're at an 8% right now um overall citywide. It's a 8% right now. Okay. Very healthy. That's just the actual kind of turnover that an organization would have. So 3% 8 compare 8% still conservative right okay right that's good yeah and another question is for the the back to the 2017 we have a deficit that time we don't have a reserve fund right or we have still have a reserve any reserve fund uh no the opposite we had a negative reserve uh reserve negative reserve plus the deficy that's so bad right so that's why so bad Yes. Understatement so bad.

Yeah. That's we don't want to see it, right? Never again.

Yeah. Okay. So, actually the I when we discuss we want to predict the future like some negative things happen. Why also the conservative see the this five years because the we have the we we we really do the good the our decision put on our public safety for the salary increase something like that but for the future maybe two or three years we have new negotiation this factor we're still not on that right if just in case the increase so it is it is it is these factors are put on that too or no the the salary increase.

So we do try to be as realistic as possible and it includes a 3% cost of living increase for employees for every one of those years. That would be negotiated. So we don't know whether it's going to end up being higher or lower than that. Okay. But we do have a placeholder in there for um salary increases that so so already it's already predict the beauty in there. Right. That's right.

Okay. That's good. That's our concern. I want to I I want a more conservative to to think about. Okay. And yeah, I'm glad the last couple years we build our reserve fund so we can so it right now predict any like current. Yeah. But I con council member Machanka she say it's not like the deficy but hopefully that's a predict probably if everything is maximum right if hopefully all the expense less so uh we don't need to use the reserve fund but currently every time every year it's have any like a deficit we just use the transfer money from a reserve fund, right? Okay.

That's right. That's ultimately what would happen is we would draw from our reserves to complete the year. I don't want to tell council something and not have it come to fruition, but every one of our last several years, we've had a larger surplus than we projected at the beginning of the year. Yes, I don't want you to adopt a budget tonight or next year or the year after assuming that that's going to happen because that's not good budgeting. M but when you look at a number like a $300,000 deficit or or so I mean that's that's with a budget of our size that's that's kind of a rounding error. I mean that that's not a big number

on the 28 29 it's a 30th 31st looks like it's minus a lot. You know we could adjust things to make those zeros but it wouldn't be a conservative realistic forecast. Okay. So what we're presenting you, I don't want to call it a worst case scenario, but I think it's a realistic.

Okay. Okay. Thank you. So I just want to discuss to let the public know that to understand it. Uh what's meaning we don't want to we we we really want to like surplus, right? That's our the goal, right? And uh and then back to the I okay maybe just go for the mission playhouse. Uh we have the 100 year centonia celebration.

So that's rel related to that. will have like a nonprofit or just a regular like uh budget on it. It's 69K. Yeah, that I appreciate you bringing that up. That's another example of kind of conservative worst case scenario budgeting. So, we have not changed the projections for the mission playhouse except to increase them like we have every other part of the budget. M we have over $800,000 a year uh increasing to over 900,000 by the end of the model

for financing the mission playhouse. So if we are able to get a nonprofit and we are able to start generating either grant funds that is one area um where uh grant funds would help from year to year if we had money to do productions or to um subsidize the playhouse. And so we don't have any of that in our budget. So, that would be an area that could easily be improved in the future. As far as the $69,000, that is money we've programmed for next year for our 100-y year anniversary. We're looking at bringing in some um help uh folks that can do programming, maybe even some um special events with the Mission Playhouse for the year,

and that would be extra staffing and expertise to help us do an extra special year. Okay. the the event is a entire year or just like a couple event to celebration the centonio. Uh we haven't gotten to that level of detail but most likely it would be both of those. It would be marketing and outreach and celebrations for the year but in special event kinds of things and then productions. And I don't know if if and that's also part of what we're doing with the strategic plan. A lot of what we've been talking about over the last several months is what we're going to do for that year. But I would love Rebecca and Chris to augment that.

Good evening, council. Uh what Mark said is exactly right. Um, so he and I will actually be talking a little bit more about it tomorrow, just kind of what we are proposing to do, but that will likely include some level of assistance that we would be bringing in as well as we have we're proposing a variety of events. And so Mark and I will be talking about kind of how we bring that forward to council um andor whether or not we possibly just work with the council committee, which actually includes you and council member um Menaka. um to look at to look at those. So just we have a variety of ideas but we we uh will not we have not yet okay

confirmed all of those. Exactly. Okay. That's good. So because I'm in the committee so that's why I really care. Yeah. Very good. Okay. Thank you. Thank you. So at least I have building in the budget. Good. Council member Ding. Mayor, if you permit me since you're we're on the committee. If you if we think about it, you know, we also had that meeting where well actually I was mayor at the time during COVID where we asked the community, do we want to keep the mission playhouse or do we want to sell it? Oh, you were there. Yeah. It was like 122 comments. And overwhelmingly I'm at 64%. It was like 99% meeting until like after 1:00

1:00 it was co so we were at home so it was a little more you know comfortable than here. But I think one of the things we we decided as a council at the time and I think this council agrees that we want to keep the mission playhouse, but let's just pretend we don't have a mission playhouse or we decide to sell it. We're not saying that, but let's just pretend

it would completely wipe out this operating deficit because we're transferring $800,000. We're putting $800,000 every year investing. And I know we've had conversations about, you know, this is a community benefit. So, you know, 800,000 sounds like a lot of money, but if we can do this foundation, we can we can um we won't have to pull so much from the general fund. But it is important the work that we're doing. Yes. As committee members,

it would completely wipe out the the deficit. So, kind of put puts it in perspective. That's all we wish if for the the the no pressure on us the foundation can build up the like revenue to cover the all the mission playhouse and like you say we can our deficit too right that's hopefully that's miracle could happen within one or two years that you can fundraising a lot of money right

yeah Mark is pointing out to me very so just to confirm that I'm accurate um that the budget the way it shows Yeah. goes from 800,000 for 2026 842 all the way to $976,000 of money being gi you know transferred to the playhouse. So we could wipe out the deficit completely with you know if we can get this foundation going and having them get the grants. So the work we're doing is going to be very important. Yeah we I think we are same goal too hopefully right. Yes, absolutely. Thank you, mayor. Thank you.

And and uh like also u mentioning the like a street like uh uh so uh we are not do the I think uh sidewalk it's hard to do the proactive. I think probably spend a lot of time for the for the tree. I think uh we have a tree service. So every uh uh every year we we can see the which one tree we need a tree dream. We can and I think we there are a couple of items that were kind of confused in that discussion. Don't let me put words in your mouth, Councilwoman Menaka, but when she's talking about the trees,

she's talking about how they lift the sidewalk. So, when the roots of those trees cause those problems, she's talking about what we're doing to trim those trees, to reduce the roots, or to remove those trees in some areas. But the issue is the sidewalks, not necessarily the trees, because if the trees are growing beautifully and they're not affecting the sidewalks, we don't want to do anything to those. to your um question, we do have information on every tree that the city owns in in the city and we trim all of those trees on either a four or a fiveyear basis. So every every at least every four or five years, every tree gets trimmed if it needs it

and several trees get trimmed throughout the year. Palm trees can't wait that long and other trees and we have an inventory of all of those. We also have an inventory of our sidewalks and where those where those problems are. Mhm. Okay. They're also talking about some neighborhood complaint the co- enforcement for the some vacant property they how the the the is the city have any chance to not just for the neighbor neighborhood report but we can do pro proactive to find out all this the vacant property we can send the co- enforcement to take a look at. Absolutely. Yeah.

And I'm going to talk to um Ms. Garcia and and hope that um I can convince her to just give us those addresses so she doesn't have to come to the podium and and give us those addresses. I I know your question was about council and others, but anybody can call code enforcement, call my office um and we will address all of those properties.

Yeah. Another things is regarding the like uh I think a couple of public comments regarding the uh uh Delma uh and the sua the underneath the freeway. So how can we like contact with the car train to to do the well the maintenance because people don't know they feel hey that's the our city even even our north San Gabriu still have residents say hey the your city have the responsibility to do that but actually it's a uh uninorporated area right yeah or the county

yeah when the smelly pipes for for you way they they think about it. It's still like a city response bill. So they anyway I I already have make a some comments that complain I say our resident it's they they love to have the lean with us to to try solve this issue too. Uh why I say that actually I this time I go to the the the the far east and the mainland China Taiwan they they really make the the the freeway underneath the freeway like a park. They have the all the well-maintained the plan is beautiful. So feel the people don't think the feel like this just like concrete the the structure that looks like a park you know. So that's I I but I don't know we I think that's extra money but uh if if carry they can put out a budget for us maybe

our public work to can cooperate work together right so uh try find some r of from them yeah another another like I hear about some uh like uh CDBG fund and uh some long-term the resident uh she say our city uh before have the like low income assistance for them like uh old home maintenance even like uh painting or roof repair or something like that. So uh they wish have the some like this kind of assistant program but also cost the money right. So is is it this budget we could if any way we can see it? So and who can qualify first of all right and then how much they can got assistant they because they already senior uh person they they they don't have this capability to do by themsel you know so so I hope the if we can consider about it to help them yeah and last one it's regarding the council member regarding the if just in pays for the our new uh sales tax. I because I saw the sales tax reduce. So be so why the estimate a little bit reduce. So will you can you help to and page 12?

Yeah. Um yes. Uh Vice Mayor Dean, uh that's correct for the 2627 revenue projections. Yeah, measure SG and state sales tax is projected to be lower than the 2526 adopted and um I think they're they're um so we get assistance from our third party HDL who helps us forecast our our sales tax. And so one is economically things have slowed down.

Okay. And then two is um what's happening here in San Gabriel um what they're seeing. So based on what they're seeing here in San Gabriel and economically that they're projecting that the sales tax will be just a little bit lower for 26 27 and then moderately increasing to 2% okay in the next year. Okay. Because the you feel the predict the economic the reason. So it it's I feel it's more conservative too to help us to that's good. Okay.

Not that because something else not because the uh sales tax some the percentage reduce. No. Okay. So we major SG still actually it's it's still higher than the regular sales tax that's we passed on 2020. Right. Mhm.

So it's 100% it's we we earn it right for the city. So for the future if just in case public safety for the for the I don't know how to call it right the the new new measurement. So uh like uh Mark you mentioned so we cannot say dedicate for the like some public service or something like that otherwise they have to the different measurement right you're right it will be very much like measure SG that we will list all of the uses that we could consider it for for using public safety streets parks

sewers trees, everything that we could potentially use the funding on, that's how it will be discussed. If it passes, we can decide you you as a council can decide how to use that, but we have to have it as a general measure and it can be used by any council as a general okay revenue. All right. So, but we can when we do the if we can promote it, we still can say the property safety even include a mission playhouse the the renovation something like that. That's a great example. So, we would first of all we would we can't promote it. We can do education and outreach.

Um but when we do discuss it, it could absolutely be used for renovating the mission playhouse. It could be used for the pool project that we can Yeah. Mission the Smith Park pool. Smith Park pool. It could be used for any of those infrastructure projects. I know we've talked a lot about um an a ladder truck. Ladder truck. It could be used to extend the fire department to the station to be able to house a ladder truck. Okay. It could add um dormitories at our um fire station 52 that needs another ambulance potentially.

So it could be used for any and all of those things. So, so we can try think about the listing all the potential that we our for the future city need extra more better service. Okay, that's right. All right. Okay, that's it. Okay. Thank you. Thank Thank you, Councilman Ding, Vice Mayor Ding. Um, and also, if you don't mind, go ahead. Yes. Just have one more question. I just missed.

Well, thank you so much, Mayor. Uh, I have a question on uh page 18. Uh first question is about uh the special event. Um I understand that um we may have a a a you know the cost for holding those special event for example our independence day event we will be paying uh the drones company for let's say 60,000 or 65,000 but with other other amount is that the staffing cost or you know we we we have those like a traffic because we would need more the PD fire. Is that also the cost that we implemented to this number?

Um, council member Woo, that that is only the direct cost to um purchase the the firework contractor. It doesn't include all of the um additional city time and and um other other costs, the public safety, the police, the fire, the public works, the recreation time. So those are direct cost. So farmers market 20,000 that is for the whole year, right? Because this is an annual uh special event cost. That's correct.

And uh for memorial day is a 2500. Uh but I don't see the Veterans Day. Is that also including that in that um in that category or we just times two? Um because it's very it's a pretty much like the same um have same question. Take that real quick. Um Too bad I got that.

So I just want to mention that for this slide right here for the list that you're seeing is not the whole list that we have in our detailed um departmental detailed budget sheets. So, Veterans Day is in there included for $2,500 as well. It just didn't make it to this list over here on your uh PowerPoint. So, that is already in that is budgeted, right? Correct.

Awesome. So, for the farmers market part, I I just wondering because the argu argumentations there's a public works for overtime farmers market for 48,000. uh you know then for example if uh the independence day there will be overtime for PD fire there will be some other event for example the lunar lantern that could additional overtime but why there's only overtime for the farmers market and that we indicate here

okay so certainly there was an augmentation requested by our public works department because they don't normally have overtime budget so let's just say for example our police and uh fire or safety department they already have some overtime budget that is in and obviously these uh events do have an impact meaning they they most likely will incur more overtime costs. However, it's because the lineup item is already there. Um it's budgeted and you we annually we would uh check in with the department to see if sufficient or if not we would correct it or adjust it with the midyear adjustment. However, in public works very few division have budget for overtime. So it is uh is prudent to certainly put it in as an augmentation because they will be servicing these uh uh event a farmers market event weekly for setup cleanup uh and those are all overtime and they don't have it at all in the budget.

So can I say if the farmers market I hope I'm praying that farmers market can go forever. So if that will be a very stable progress that say the farmers market definitely will be there for for a long long time that means next year when we see the study the budget study session that numbers could probably will be uh will be actually in the public works budget correct order. Okay.

Yes. So it will uh once this gets approved it will be in a budget document and then from there annually we will review line by line and adjust accordingly to you know salaries and historical data. So first of all for this new fiscal year because there's not already included in a budget and it's a large figure is about $1,000 say a weekend. Um so we have to input it in as an augmentation. So that is very responsible because that means they are not trying to just using this as an excuse to increase the budget right away but they just try to put that in additional on the side but that is because we don't know if farmers market can go how long. Um, I mean it certainly is very transparent,

right? That's why it's is it's clearly stated is for farmers market overtime. Um, yes. And if it goes on, that will be used. Uh, as and I just want to make it clear because you did ask the question earlier for this whole list of special events. There are no personnel costs. No person. All of them are for vendors, direct supplies, material that we all need to use to pay out to vendors. uh and then for all of our staff time it is build directly to the department.

So this is just about a cost. So we don't talk about revenue or for example the dumplings and beer we collect the we spend money. So when that money is listed here like as 30,000 we are still that is still the number reflects the actual cost. So that is not like somewhere that we balance. So we anticipate we'll be selling like five or 600 we spend. So we don't really count those. This is just a cost. This is just an expenditure cost. So as far in revenue, we do have a budget as well. We have an estimate in one of our revenue line item that is called special event. Mhm.

Um for fiscal you and you will find it in our budget summary right behind our budget summary tab. Um I apologize there is no page number but right behind as you get to uh special event 121 3920 is our special event revenue you will see that we have 65,000 budgeted for this new year

for new year. Okay. Um and yes where we get sponsorship where we get uh revenues from our dumpling and beer that's that's the account number that you that we put we accounted for and you can see from previous years let's say 2425 uh actual 68,000 pre uh and so that's why we are seeing as we put them in the account we see from historical data and budget accordingly. I see okay that's that's good to know. Thank you very much. Yes, that's all I have. Thank you, mayor. Thank you. Oh, and a comment to Councilman Ding. Uh the reason why Okay, go ahead. But oh, did you have another question?

A little bit concern the I asking the Luna Latin festival. I think the previous before pandemic we have like more than 30,000 right now because we pay some performance the good performance paid but right now war general so we don't pay anything the this is 16,000 it's for this our staff the budget the not not for staff oh yeah it's one of our biggest expenses expenses for Lunar New Year is the um barricades that we have to Okay. Okay.

to rent and then we do have some expenditures but as you said with our partnership with World Journal that cost has gone way down.

Yeah. But uh actually I hear some voice they they like some if you want a good performance probably I know the another city they pay for like uh I hear about a harbor city of Asuza or they paid the if they want a good performer. So I just bring that bring this up to see if we have the this kind of budget. If we cooperate with the war general maybe we can discuss that too. Yeah. See what what kind of good performer to to to we can hire you know. Yeah.

Thank you. Okay. And uh side comment uh Vice Mayor Ding, the reason why you saw that the the uh sales tax revenue is going down is because I can't afford to eat at the restaurants as much anymore.

Sorry. And I just Oh, I'll support it. It's expensive. But um All right. Um and and and a side note, I guess, um the reason I I can uh I can say Councilman Era Aila and my SP my Spanish accent is good is because uh one of my guests yesterday, he was saying back in that corner, tall uh slim gentleman, he was my Spanish teacher in high school, my favorite teacher. and and he he is the reason my Spanish is good- because he's he was a very good teacher, very inspirational and made sure I studied hard and anyway um all right side note over um overall Will and Linda great great job you always do a great job and so you know it's very the uh the reports are all always very easy for me to understand and it's all put together very cleanly so the good thing about that is I don't many questions and especially my colleagues have pretty much addressed most of the things that I was going to ask. Anyway, a small easy question I guess uh on your presentation page 13 and it it says I think there was a line item that says recreation fees and it says not charged before. So, does that mean we're starting to charge for certain things, classes and things that we didn't before? that just

um I'm gonna let Rebecca certainly answer to this question but uh yes previously there are a number of programs that we do not charge um such as after school program there are also um yeah after school program at our local schools was provided under a different fund now that we are no longer using that funds we are talking about revamping that and charging a fee but I think I will go ahead and defer it to Rebecca Thank you, Linda.

Yes. So, council may recall that uh with our CDBG funds, there were some requirements that were put into place that we were having to request um income verification and citizenship verification. And so, we opted not to include those for for those pro programs in particular. Uh so with that we are proposing a feebased program for those after after school programs. Oh yes I now that you mentioned it I recall that discussion. Thank you. Yep.

Um pretty much that's all the questions I had. again my colleagues have asked the questions I was going to ask anyway and so I got I'm satisfied with uh with the report and so um any of my colleagues have any other questions or comments or discussion

just thinks the the financial department the pro this good presentation yeah help us to discuss thank you okay all Right. Very good. Okay. Well, thank you, Will. Thank you, Linda. Thank you to the staff. And I guess uh there there's no vote. So, this was just a a a budget discussion. So, no vote being taken. So, I guess it's time to adjourn. The next regular city council meeting will be held on Tuesday, May 5th, 2026 at 6:30 p.m. So now the meeting is adjourned at uh 7:35