City Council - Regular Meeting

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If you want to hug the sky You just need to fly high It will be cold for a while But at the end of time I will be on your side Woah Please don't go too far Please don't go too far If you want to travel miles Pack your dreams and thrive outside I will be here for advice When you get into the wild Please don't go too far Please don't go too far If you want to leave this world And just leave my heart Alone in the dark I remember we used to smile But please don't go too far

Thank you.

Thank you. Thank you.

Good evening, Vacaville. This is the regularly scheduled City Council meeting for the City of Vacaville. It's Tuesday, May 26, 2026 at 6 p.m. May have a roll call.

Council Agency Authority Member Stockton. Here. Ritchie.

Here.

Chapman. Fremont.

Here.

Wiley. Here. Vice Mayor, Vice Chair Silva.

Here.

Mayor Chair Carley.

Here. Go ahead and if you're able, please stand for a moment of silence. Councilmember Ritchie, will you please lead us in the Pledge of Allegiance? Ready, go.

I pledge allegiance to the flag of the United States of America and to the republic for which it stands, one nation under God, indivisible, with liberty and justice for all.

We did not have closed session, so there are also no reports out for that. Any changes to tonight's agenda?

No changes tonight.

All right. May I have a motion? Motion through. Second. We have a motion and a second. All in favor? Aye. Opposed? Report to the City Council. Any updates on any recently attended boards or commissions or committee meetings? Council Member Wiley.

I have a couple things to report out. So last week I attended a meeting with the Yellow Solana Air Quality Management District to look at the grant applications and I'm happy to say that several of the grant applications were approved that will be helpful to Vacaville. And the first one is The bike lane on the Vacaville Road, it's just like a mile, and we have some money funded, so it's not the whole thing, but money toward the bike lane on Vacaville, which is great. And then the transit service between Vacaville and UC Davis, because we have been doing that, so there's continued funding for that. And then they're going to fund some money for air quality to be included with the watershed experience for the third graders in the Solano Resource Conservation District. which is good, and then bike safety with some puppets, which was really engaging, and so that will help people across the county. So I think there were nine altogether, and there were several that do help in Vacaville, so I wanted to report on those. And then another great thing last week was the neighborhood associations. I think we all have some neighborhood associations in all the districts. And so they have kind of an annual social so they can just trade ideas and get together and meet each other. So that was last Friday in... Pheasants, or maybe it wasn't Friday, but last week in Pheasant Country Park, which is in District 6. And it was just a really great group of people who wanted to work with their neighbors and be involved in the city. And so there was a great social for that. And then I went to Fiesta Days and the ceremony at the Memorial Day ceremony for the veterans. I saw everyone else there too, but those are great things I wanted to say.

Yeah, thank you. Council Member Ritchie?

Well, Councilman Wiley, I wanted to mention I did attend Fiesta Days, and that is one of the days as you grew up in Vacaville, there's Marymount, Maine, and there's Fiesta Days that you live for. But there's three real groups of people I want to thank for that happening. It's... Public safety, fire, and public works. I mean, all I saw was smiles, happy families. Just every single year, it's an amazing, magical place. But there's a lot of stuff behind the scenes that this city does to make it so it's safe, fun, and eventful for everybody. And I just want to say thank you for everything you guys do, because even though I didn't see anybody get hurt, but you guys were there willing and ready and able. It's amazing to have this magical moment But the people that make it safe and make it sure it keeps continuing are those three groups. So I just want to give them thanks. Councilmember Fremont.

Yeah, just a quick shout out for Troops 484 and 488 that came out, they come out every year. So Saturday morning it was putting up flags at the Elm Harbor Cemetery and there was a whole group of volunteers. So Travis, I can't remember what their club name is, but just a bunch of volunteers and they're the same ones that keep showing up each year. And then of course they were at the ceremony too. So I just want to give a shout out to 484 and 488 for all their help that they give us.

Yeah, thank you. Seeing no other lights, I'll go ahead and add my final comments. I think we were all at the memorial. I believe it was a great turnout. It was wonderful. Appreciate you making those comments, Council Member Freemill. Quick update. On May 14th, since the last time that there was a council meeting, The Islamic County Mayor's Committee meets, we meet quarterly, and so one of the updates that I wanted to add is I had agendized the countywide tax sharing agreement. For some who don't know, part of this is the standard process so that when cities are working through annexation, de-annexation, or development areas, THAT WE HAVE A PROCESS IN PLACE FOR HOW DEVELOPMENT THEN HAS A SHARED REVENUE BETWEEN CITIES AND THE COUNTY. IT WAS A ROBUST DISCUSSION. ALL SEVEN MAYORS WERE IN FULL SUPPORT OF ALLOWING THE CITY OF ACCOVILLE TO TAKE THE LEAD IN DEVELOPING A CORRESPONDING LETTER TO REPRESENT ALL THE CITIES ON BEHALF OF THE MAYORS BUT TO DIRECT NOT A LOT OF WORK BUT JUST SO YOU KNOW TO DIRECT THE CITY MANAGER TO WORK WITH THE OTHER CITY MANAGERS IN COORDINATION SO THAT WE ARE COLLECTIVELY SENDING A MESSAGE TO THE COUNTY. WE'RE HERE, WE WANT TO COLLABORATE. YOU ENDED THE TAX SHARING AGREEMENT NEARLY TWO YEARS AGO AND IT'S COMPLICATING THE ABILITY FOR CERTAIN DEVELOPMENT BECAUSE EVERY DEVELOPMENT HAS TO GO THROUGH LAFCO AND WITHOUT A TAX SHARING AGREEMENT IT'S AUTOMATICALLY uh... denied and what that means is is usually could be anywhere from six to nine months of delays in any project and that's unacceptable in any city and every city recognizes this so we're taking the lead to just draft a letter the design of the letter it's public the meeting was public this is an encouragement that we want to work together not necessarily understanding why it had to happen in the first place But here we are. So we do need to address this. So that is something that our city manager is taking the lead on in conjunction with the mayor's committee group. Second to that was simply a quick discussion that we had that same night was the Sloan County Water Agency. in their agenda there was a lot of information that was put out there because they're getting ready to address this year's budget since i represent uh... the voting members mayor I just want to make sure that there was an update. I'm going to send out a presentation that was shared, and so it's a PowerPoint, but it basically kind of gives an update. I think it's easier than me trying to report it out, but I just want you to know I'm going to go ahead and forward it to all of you through staff just so you're aware of what's going on. All right. Moving right along, we will move on to reports of city manager. Any update, any reports?

Good evening, Mayor, Vice Mayor, and Council Members. I have a quick update in response to our evolving fiscal and operational considerations. Current recruitments will continue, however, beginning July 1st. New recruitment activity will be subject to centralized review and approval by the City Manager. Requests will be evaluated on an as-needed basis. And we will take into consideration any critical operational impacts or needs, any service impacts, budget considerations, as well as organizational priorities. So senior leadership team has agreed that starting July 1st, we will have a centralized review process. Until then, the recruitments that are in place right now will continue. Thank you.

Yeah, thank you very much. All right. We'll go ahead and move on to presentations. We do have a presentation tonight. And so I'm going to ask if this is the Fair Housing Month community contest winner. And so I do believe that there is a slight presentation. And I do have a certificate in recognition. So good evening.

Mayor, Vice Mayor, council members, good evening. As we all know, April was Fair Housing Month. and to help raise awareness for the Fair Housing Act of 1968, the Housing and Community Services Department sponsored its third annual Fair Housing poster contest. This year, we received 22 entries. Out of those 22 entries, six finalists were selected based on creativity, their ability to convey an understanding of the Fair Housing Act. FROM THOSE SIX FINALISTS, WE SELECTED FOUR WINNERS. ALL FOUR WINNING ARTWORKS WILL BE FEATURED IN THE HOUSING AND COMMUNITY SERVICES WEBSITE. OUR THIRD PRICE WINNER... NEXT SLIDE, PLEASE. THIRD PRICE WINNER IS SHAY PEAK, A FIFTH GRADE STUDENT FROM FOXBORO ELEMENTARY. Next slide, please. Our second prize winner is Abraham Gallardo, a fifth grade student from Browns Valley Elementary School. Next slide, please. And our first prize winner is Jillian Peterson, a first grade student from Foxborough Elementary School. Next slide, please. And our grand prize winner is Abigail Blossom, a seventh grade student from Sierra Vista School. Abigail will receive a $100 gift card and an award certificate presented by Mayor Carley. In addition, Abigail's artwork will be featured in our 2027 4th Annual Housing Poster Contest materials. At this time, I ask Abigail to please come forward to receive her prize.

Congratulations. This is for you. And this is also for you.

Let's make sure we get a photo here first. Yeah, thank you.

Congratulations. I appreciate it. It's very hard work. If any of the

Chair, it's your own chance to see and kind of tell.

Okay, thank you very much.

Yeah, great job though. Really appreciate it. This contest is fun because even within city staff, when it comes down to it, it's laid out so that those who are voting on it get to see the creativity. And so I just want to thank staff for making this a continued effort. And in bringing that awareness and in doing so, it's a fun time every year to do this. Thank you for staff and for making this happen. But Abigail, thank you. So I didn't want to put pressure on you, but it's not that often when you have the mic. So anyway, congratulations. All right, we're going to go ahead and move on to the consent items. Is there any member of the public or the council that wishes to pull an item for discussion? Seeing none, do I have a motion?

Second.

Do we have a motion and a second? All in favor? Aye. Opposed? All right. We'll go ahead and move on to business from the floor. This is an opportunity for any member of the public to address the council on anything that the council has jurisdiction over but is not on tonight's agenda. Please come forward. Good evening.

All right. All right, good evening, Mayor and City Council members. My name is Brandon Cherry. I'm a proud Vacaville resident. Tonight, I want to talk about something fundamental that I believe is holding our local economy back, and that is our identity. There is a joke told among residents in our region that you buy a home in Vacaville, but you date in Winters. We are a thriving city of 100,000 people, yet every single week and weekend, our residents pack up their cars and leave to spend their hard-earned money on food, culture, and entertainment in Winters, Davis, Knapp, and surrounding areas. I've personally overheard people at dinner in Winters who work in Vacaville, came from outside the area to work there, but joke that there is no good places to eat in Vacaville and few places for nightlife. We are suffering from an identity crisis, and it is actively limiting our local business opportunities. Right now, to the millions of drivers on Interstate 80, Vacaville is just a pass-through town, a pit stop on the way to Tahoe. But it doesn't have to be this way. We have a moniker we shy away from, which is Cowtown. Why are we running away from this when we should be leaning into this? It is a massive asset. We are rich in agricultural heritage. Look at what Gilroy has done with garlic or Paso Robles did with wine. They leaned into their authentic identity and put themselves on the map. And they benefit greatly from that. We already have an incredible Fiesta Days, which we just had, an amazing parade and festivities, but we have nothing that honors the fall harvest or brings distinct culture to our city. We need a signature fall heritage festival. This festival would incorporate our incredible local creative community, especially our landscape and visual artists and farmers, many of whom live and work the lands that we so cherish and value. Now, I know the immediate pushback, the city is facing tight financial times and we don't have to throw funds at a massive rebranding campaign, but a true identity shift doesn't have to cost us anything. We don't need to spend thousands replacing vehicle decals or printing out new letterheads. We can start to pivot digitally and organically for next to no cost. We can update our city's online marketing narrative, leverage our social media channels, and partner directly with our local farms and artists and coalitions to build this out through community-driven sponsorships. Think of the amazing festivals in other cities that people plan their entire year round and drive hours to attend. A town our size needs to be known for something. Respectfully, I have to ask right now, what are we known for? I'm asking the council and our economic development team to launch a low-cost, high-impact digital rebranding strategy. Let's tap into our heritage, support our local farms, artists, and start being the city that people drive to and not just through. Thank you. Thank you.

Good evening. Good evening. Mayor Carley, a couple weeks ago I read through all this stuff after you had published your letter saying that you had no connection with California forever and that you're NDA with Saronic Corporation, yada yada. Okay, there were some obvious misstatements of fact in your letter. You said that Saronic is a shipbuilder. Saronic builds little, small, autonomous patrol boats. You said that Collinsville was in running to be Ceronics Port Alpha. Well, when you printed that, you knew that Ceronic, one, has already built a... purchased a shipyard in Franklin, Louisiana. They've spent over $300 million upgrading it, and they intend it to build 50 autonomous vessels a year, one of which they've already completed. It's a 150-footer, which, by the way, ain't a ship. Saronica spent over $300 million upgrading their yard in Franklin, Louisiana. So if Saronica's building their Port Alpha anywhere, they've built it in Franklin, where they intend to employ an extra 500 people over the next couple of years. You knew all these things when you wrote that letter saying that, oh, we're going to get ships in Collinsville. Well, I call your attention again to the county staff report from 2024 which details all the difficulties both economically and positionally why a shipyard in collinsville is an absolute fantasy and also the county staff report over the fact that Anything that California Forever begins doing is going to take a big investment from county taxpayers to the billions, like $50 billion-plus. Mayor Carley, also the... The article in the newspaper today made it very clear that you are California forever's man. And it really grieves me to have to say that because in the past, the very recent past, like with over the fight with Berryessa Water, with the best facilities, I have been very thankful of your leadership. But you, Mayor Carley, you betrayed this city and this county.

Thank you. Anyone else wishing to speak?

Good evening. I'm referring also to the article that was published today in the Reporter about how California Forever and its entities that it contracts with have been funding the Solano County Sheriff's Association and then the people they pick to oppose or go against their seeming to do deceptive advertising. I just think that we should try as hard as we can. I know it's difficult with campaigning to keep out of state and out of county entities out of the picture because we're already having pressure from the state level where they're trying to take our land essentially to build battery energy storage and it's going to be also fight for data storage and A fight with California Forever landholders with what's going to be built on their land. And the Delta Tunnel fight that all seeks to destroy the wetlands and the agricultural community that Solano is known for. Hopefully, I'm just asking that we try to keep the campaigning local, the funding local, and maybe try to deny funding that is trying to change our way of life. Thank you.

Yeah, thank you. Good evening.

So firstly, excuse me. Firstly, I want to commend the mayor on his impressive riding skills that he exhibited or you exhibited in the two recent parades. Quite remarkable. Secondly, I also want to comment on the recent TV ad that was put out by the Solano County Sheriff's Association PAC, which was not only extremely negative, but also inaccurate and misleading. And what really bothered me about it was the fact that the city council member of my district was so prominently featured in it. And so today then we find out that the funding for that DSA political ads comes from people outside Solano County and who are also collaborating with California Forever. So that was a revelation. So for me personally, I feel that letting oneself be featured in an attack ad is poor judgment. And we don't need ads like that lie about candidates' records, especially when everyone can go on the city website. and look at how city council members vote. And so that was one thing I really did not enjoy seeing. And so getting back to my personal view on that is that When you allow oneself to be prominently featured in such an ad, it makes me seriously wonder and reconsider my ability to trust my city council member to do what is right and good for all of his constituents and especially the city as a whole in the future. So I want to just talk about that. And then thirdly, I want to say that I was dismayed that at the very moment, the Brown Street Park, which is now known as Descalores Park, is now in question again. This park was promised the community for many years. Not only that, it was actually approved by the city council. And might I say with their full knowledge and understanding of ongoing structural deficit. So it wasn't that you guys didn't know about it. So that can hardly be the reason to now renege on it. And especially since the park has received both state and federal funding that our city staff was able to secure through their diligent work. So I really did not appreciate that. The community has been waiting for that park for a very long time. We've been promised it. And we want it. Thank you.

Thank you.

I'm Tony Smith. I live out in Browns Valley. The council members, you know, the city's going through a lot of changes. I know there's a deficit and all that, but, you know... We build houses, and that's kind of a dead-end street. You know, the city gets initial impact money, and then once it's gone, you've got to support police, fire schools, everything else. Businesses bring money in. Infill projects within the city. Those kinds of things. The... The thing about this California forever thing, I don't understand the thinking at all because they have all this money. People move here because we have some open space left. Initially, it's gonna end up like San Jose if you keep this up. Merrill Island's the perfect spot. I don't understand why you gotta go all the way out to Collinsville. 113, 12, everybody knows the issues with that. Transportation, Rio Vista Bridge isn't going anywhere. It's just, to me, it's urban sprawl. We voted three times over the 80s and stuff on urban, on orderly growth. It was voted on before. Now they want to put another vote on this so they can switch it over. Lagoon Valley ended up like that. It went from, you know, ag land to commercial. So we're going through the same thing again, and a lot of people want to preserve the valley there to have a gap between the cities that you could have like a central park between the cities. And we're doing the same thing every other city does. The initial impact money, you get that money, that's it. Keep building houses. And I know there's a housing shortage, but there's other ways you can do things. I think this urban sprawl thing bothers me. I've lived here a long time, and my... Families, military, we bought a house here in the 50s, and that's why we moved here, because we like the small-town atmosphere. And you're losing its identity. And he was talking about you're losing the identity of the town. We used to have an onion festival. We used to have a ballpark out there that they tore down that would have been nice to have concerts or car shows or baseball games, all that stuff. But why do they tear that kind of stuff down? Then they worry about everything else. So those kind of things bother me because I've seen all these changes, okay? So not to jump around here a little bit, but the other thing is there's people that grew up here. Like I mentioned it before, Chris Cortez, military, became a general. How many generals come out of Vacaville? Not many that I know. He was class president. And we name things after all these people. We talk about all this stuff. And there's people that grew up here, live here, that did some really fabulous things. And there's no commemoration of that. It's good that we have the signs out for the military, going up and down Merchant Street for Fiesta Days and all that, Memorial Weekend, I like that. But there's a lot of people that went to Vietnam and sacrificed that grew up here, and we don't see a lot of that. Okay, so just to name a couple things. So other than that, Vacaville still has that small town charm, but as we grow, every city starts to lose that. Thank you.

I'm going to go ahead and close public comment at this time. Moving forward, next we have item 11. We have a public hearing. to our city clerk.

Yes, this next item is an omnibus ordinance updating multiple Vacville Municipal Code chapters and sections referring to the Community Services Department and replacing it to state the Parks and Recreation Department. And Melody Land, Recreation Manager, is here to do the presentation.

Good evening, Mayor, Vice Mayor, members of the council. As mentioned, I'm here to present on an ordinance update for the Vacaville Municipal Code chapters and sections referring to Community Services Department replacing it with Parks and Rec. So the action for consideration before you is the introduction and first reading of the proposed ordinance that updates the Municipal Code sections and replacing it again with Parks and Recreation Department. So the code contains multiple chapters known as Community Services Commission, now known as Park and Recreation Commission. They include both that and the Commission on Aging. These commissions were established by the Parks and Recreation Department when it was called Community Services Department, and subsections of these municipal code chapters now incorrectly refer to the Community Services Department. So we're here this evening to basically correct an inaccurate name. A little bit of history here. The Parks and Recreation Department used to be combined with the housing and community programs. They were consolidated in 89 and then re-separated in 91. And then in 92, a Community Services Advisory Commission was adopted, a Commission on Aging was added. And then back in 2019, the Community Services Department changed their name back to the Parks and Recreation Department. So we've got just a few affected municipal code sections that you see listed here today, and there are very minor updates as mentioned. Essentially just changing community services to parks and recreation, and then to avoid any confusion, we are updating areas where it states community services to state community enrichment, and this is specifically referencing services and programs that are being offered. And again, we just want to avoid any confusion. So the recommendation this evening is by title only to introduce the subject ordinance and waive the reading of the title per government code section 36934. Of course, the city council could decide not to adopt the subject ordinance and leave the affected language as is. However, that is not recommended. And I am now open to questions or comments.

Thank you for the presentation. I know that it's been long overdue, because I remember over the years, well, we're Parks and Rec, and then we're not, and then we are. Yes. So this is just clarification. Exactly. So I appreciate this. People understand Parks and Rec, and it makes sense. And so on top of that, I'll also commend Parks and Rec, because... The Fiesta Days doesn't happen. Our events don't happen. I appreciate the gentleman's comments about what is our cultural heritage. There's always great ideas, but it doesn't happen without Parks and Rec. I don't see any questions from the council initially. I do see one. Council Member Wiley, and then I'll open it up to the public since this is a public hearing.

So I think this is great because I like everything to be in order. And so I just noticed on the Commission on Aging, I'm glad that it's not said let's get rid of it because we don't have it. We haven't had it since 2012. I like leaving it in there. But just when reading it, Commission on Aging isn't capitalized and it should be in the very first part. So when you're making little... Little corrections. I think you should do that. And then in that section, when you refer to commission as that, it should have a capital C like you've done on the other ones. But thank you.

We could correct that.

Yes. Yes.

That'd be great. All right. I'm going to open this up to the public as this is a hearing. And I don't see. Go ahead, sir. Come forward if you have a comment.

Council members, this is on the parks issues, right? Yes. I was wondering, do they still have the citywide assessment district in process or whatever? Do they have all those individual accounts that they go over, which is just like... When I worked there, there's probably 40 accounts or something, codes you had to go through for all the different districts. So if they had a citywide assessment district, everybody would pay for the parks instead of having all these different accounts. Some people pay more, some people pay less. So it would be a good thing if they keep building all these parks, pretty soon we'll get enough parks where there'll be more people assessed than unassessed and maybe we could vote for it, vote on it. So, I mean, I know the accounting and logistics of it's pretty crazy because you've got all those accounts. Because I know, like, at Nelson Park, if you went inside the fence, it's one account number. You go outside the fence, it's another account number. Then you go to Fairmont, it's another account. Then you go to Beeler, it's another account. Those are all account numbers. I mean, it's crazy logging all that stuff in computers, you know, spending hours doing that stuff when you could be out beautifying the city working in a park, you know, stuff like that. That's what... And that's been years ago, and it still probably hasn't happened. So I'm just saying that would be a thing to save a lot of money and time. And the other thing I was wondering is on assessed areas, there's contractors now. Are we paying for full-time employees to be on those assessed areas or part-time? Because when you have assessed areas, you're paying out your property tax bill. And so you're being charged for that. Is it full-time employees or is it for contractors, part-time or whatever? So that's a question I have. So anyway, I don't know. So thank you.

Yeah, thank you. All right, I see no other member of the public on this hearing, so I'm going to go ahead and close that portion, bring it back, and ask staff if there is any comments or answers to any of the questions. To our city manager.

Well, so this item is not related to the LLMDs, but I would have our public works director, Brian Oxley, speak to maybe some of the questions that were asked.

To address the questions, yes, there are full-time and part-time staff working, and there's contractors. So for the setback landscaping, the city hires out a contractor to do the setback landscaping. All of our parks are done by city staff. As far as the actual assessment districts, yes, there are. numerous assessment districts. The city did, probably two years ago, they did a survey to see what the residents' appetite was to do a citywide, and it was clear that the residents did not have appetite to do a citywide assessment district.

I appreciate that answer. I know that it would be easier, but the reality is it would require the the community and the voters to make that call. So I appreciate it. Yeah, thank you. All right, I see no other questions. Bring this back to the council. What is required is by title only introduce a subject ordinance and waive the reading of this for the government code. Do you have a motion?

So moved.

We have a motion and a second?

Second.

We have a second. Council Member Stockman? All in favor? Aye. Opposed? Abstain? Thank you very much. Now it's officially parks and rec. We'll move on to item 11B to our city board.

Yes, item 11B is an informational update on Assembly Bill 2561, Government Code 3502.3 regarding city of Vacaville vacancies and recruitment and retention efforts. And our principal human resources analyst, Regina Sickles, is here with HR analyst Alex Monje-Pettit to give the presentation.

Good evening, Mayor, Vice Mayor, and members of the Council. Tonight, we are here to hold a public hearing on vacancies and city recruitment and retention efforts to comply with Assembly Bill 2561, which aims to enhance transparency around staffing challenges and proactively address high vacancy rates within public agencies. Assembly Bill 2561 requires the following, that public agencies present the status of vacancies, recruitment, and retention efforts at a public hearing at least once per fiscal year prior to budget adoption and identify any necessary changes to policies, procedures, and recruitment activities that may lead to obstacles in the hiring process and that recognized employee bargaining units may choose to present at the hearing. The bill also states that if the vacancy rate of a bargaining unit meets or exceeds 20%, additional detailed information will be presented during that public hearing. None of our bargaining unit vacancy rates are at or above 20%. However, all of our bargaining units were notified of the option to speak tonight, but none elected to do so. The city has seven recognized employee bargaining units. This slide explains the name, acronyms, and membership details. The assembly bill specifies that the content of this hearing be related to official recognized represented groups, so that is who we are talking about tonight. The city also has two unrepresented groups, the administrative managers group, or AMG, and also the department heads. The city currently has approximately 616 full-time employees. This slide gives you a snapshot look at the groups in which our full-time employees are assigned. On the left side, approximately one-third of our staff belongs to our four safety groups. On the right hand side, VCA, Local 39, and BMO represent approximately 20% of our total full-time employee population. This chart shows the number of employees assigned to each bargaining unit, the number of vacancies, and the vacancy rates for each bargaining unit as of May 8th, 2026. Unit vacancies range from 0% in both police and fire managers group to 13% with the police officers association. Included in these numbers are positions that have been placed on delay for budget reasons or the department has chosen not to fill. However, they're still counted as vacancies. Additionally, we do have some vacancies in most of these units that are actively in the process of recruitment, pre-placement, and also have been filled. When we presented this data last year, our vacancy rate was 11%, so we have seen an overall decrease in vacancies. I will now transition the remainder of this presentation to Alex Monge-Petty.

Thank you, Regina. Thank you, Regina. Good evening, Mayor, Vice Mayor, and members of the Council. I'll begin by highlighting our recruitment efforts extend beyond traditional hiring processes and into the community. A major example was the multi-agency public sector job fair, which Human Resources developed through year-long planning, cross-agency collaboration, and a new regional approach to public sector recruitment. The event brought together 16 agencies and more than 300 job seekers, while offering resume reviews and mock interviews to help connect candidates with public service opportunities. HR also maintained a strong presence at college and workforce recruitment events, including UC Davis, Sac State, and the Workforce Development Board job fairs, while reestablishing partnerships with Travis Air Force Base through their Hiring Our Heroes job event to connect with veterans and transitioning service members. Our team also supported local workers affected by recent Swano County layoffs by participating in targeted hiring events such as the Anheuser-Busch job fair and Mare Island dry dock information session. Locally, HR connected directly with students and job seekers through presentations and events at Wilsey Wood, Vacaville and Buckingham High Schools, the Solano Science Fair, Fairfield Sassoon Adult School, and First Place for Youth, helping more people learn about public service careers and opportunities within our city. While outreach helps increase awareness of city careers and builds future candidate pipelines, HR continues working behind the scenes to strengthen the recruitment process itself. We continue using broad and targeted advertising strategies to better connect open positions with qualified candidates. We also enhance our job postings to more effectively highlight the city's benefits and value as an employer. For certain recruitments, videos provide candidates with a clearer understanding of the role and organization before they apply. And internally, we are continuing to provide training for hiring managers to strengthen recruitment processes and practices and support effective hiring decisions across the departments. HR is also reviewing and refining recruitment processes to improve efficiency, enhance the candidate experience, and reduce time to hire where possible. We'll touch upon this more in a later slide. For public safety recruitments, on-site entry-level testing for police officers and dispatcher candidates help make the process more accessible and support recruitment for these crucial positions. Together, these efforts help strengthen the city's ability to attract and hire qualified employees. HR also continues supporting employee retention through ongoing efforts focused on both employee engagement and long-term development. On the benefits and engagement side, HR is expanding education through upcoming benefit roadshows and in-person benefit trainings, which help employees better understand and connect with the resources and benefits available to them. The City's COV Life Program, led by the City Manager's Office, also promotes workplace engagement and connection through events such as Bring Your Child to Work Day and the Public Employee Appreciation Barbecue. At the same time, we continue investing in employee growth and development through structured new employee orientation, succession planning, internal promotion opportunities, ongoing training, and leadership development programs. These efforts help employees grow within the city while supporting staffing stability. Together these retention efforts aim to strengthen employee experiences, encourage long-term commitment, and help the city retain a strong workforce. This slide highlights a recruitment challenge and the path taken to address it. The fire department was experiencing a high number of vacancies, resulting in significant overtime usage and increased costs to the city. At the same time, the department faced challenges with smaller applicant pools, lengthy recruitment timelines, and delays in pre-placement process. These factors often created long gaps between a candidate receiving a conditional offer and the start of a fire academy. In some cases, candidates accepted positions with other agencies due to the delay between background completion and Academy start dates. Additionally, because all Academy participants are required to begin on the same date, any delay in a single candidate's pre-placement process could impact the timing of the entire Academy. To address these challenges, the fire department and human resources work together to incorporate the fire academy curriculum into our in-house academy to increase the candidate pool and improve recruitment outcomes. In addition, Human Resources, the City Attorney's Office, and the Fire Department collaborated to improve portions of the hiring and pre-placement process. The updated approach refined the sequencing of requirements while continuing to ensure all necessary standards and requirements were completed. These process improvements were implemented during the most recent recruitment and significantly improved hiring timelines, allowing nearly all candidates to begin the academy on schedule. This information supports strategic goal number four, maintain effective and efficient services. No action is requested. This public hearing is held for information purposes, and Regina and I are available for comments and questions.

Thank you for the presentation. Vice Mayor Silva.

Thank you. So just a couple of things. Musetta Thoreau Adult Education, they had a job fair as well. I'm not sure if you guys were able to attend that. I know there was different city departments that were there. But I think it's, so they had a job fair. Of course, everybody got to know about it. But it might be a good idea, if we weren't a part of that, to be a part of that. The other thing, I want to thank everybody for being so responsive to the layoffs, to different, you know, talked about the dry docks and Anheuser-Busch. One recommendation is that some of the feedback that I got from certain individuals who participated in those is that when I know Vacaville Unified School District, they've created sometimes these situations where they hire people right on the spot. So I think the more that we can leverage that opportunity when we have this pretty qualified very qualified individuals that can fill these roles. Let's snatch them up and make sure that they have a home here rather than trying to say, hey, go to the website, apply, wait for a month, and this and that. Although, frankly, sometimes that's just the reality of how long it takes to make that transition. But I think the more if there's some type of conditional acceptance, I think that's one way that I've seen put in practice of where we can secure the best qualified folks, one, to stay here at home, and two, to make sure that we've got good qualified people on our staff. The other thing is I appreciate the approach to succession planning, but one thing that I would maybe recommend or really put emphasis on is professional development. So quite often we're always hearing about concerns about wages, you know, every different level. A lot of times when it were to be employees or anybody else, whether it be city employees or anybody else, Hey, I need more money. I'm worth more money. Yes, absolutely. You are worth more money. The biggest challenge we have is that position that you're in, that's what that particular position pays sometimes. And that's not to say there might be something wrong there or something that can't be adjusted, but I think if the emphasis and the culture within our city, just as it is in any business, is looking at professional development opportunities, creating a pathway of, okay, here's where you're at. You've got these great you know, essential skills, soft skills, a lot of times people call it. But you have these key characteristics that are extremely employable and valuable to any department. You know, how can we put you on or connect you to a pathway to continue to move up to where you can seek the value and put in the value that you have to offer. So, this is just comments and recommendations. And if I'm wrong on anything, please enlighten me. Thank you.

Thank you. Council Member Riley.

Thank you for the information, and I do think it's really good that the HR department is working real hard to keep employees and do things that can build skills. So I did notice on the chart, though, that we're not at 20% on any of them, which is great, but the highest one was police department. So I wondered, is that due to we have a lot of, we've had a lot of retirements and people are just at the retirement age, or are we having people leave the department for various reasons.

I would say it's a combination of all of those things. We do see people retire every year. There's times when people leave. There's times when people don't return to work for various reasons. But I do want to share that of those 15 vacancies, there are some that are on hold. So they're on delay and won't be filled. And then we have four positions that we have available, have people in pre-placement or about to start the academy. And then the other three are dispatchers. We have two in background, and we have a recruitment opening soon to attempt to fill that last position.

Oh, thank you. That's great information to know because I thought, oh my gosh, I didn't know we were at that position, you know, with the police department. So that's very good to know. And this is not something that we can do without police or fire. But so during the pandemic, some people started working remotely and now some people who are looking for jobs look for remote opportunities. Do we have that? I mean, are there very many jobs? How many people in our city work fully remote or partially remote?

I don't have the number of people that work remotely. I don't think there's very many that work full-time, if any, anymore. I think generally speaking, employees can work one day remote, but it really depends on the department. And I would say most of our workforce is back 100% in the office.

That's good to hear. I know people like that flexibility, but it seems hard to build your team and things if people are gone and trying to get things to work. So I just wondered, since that wasn't addressed here. Do you have many people asking for remote options? I think that there's always an interest, yes.

Okay. It's hard, really, because we have so many public-facing departments. So we have, like in HR, we have a customer service window, and I think a lot of people have that where they need to be present. Also, meetings are taking place, so that's another reason for having people in the office.

And you might answer this, or the police chief might answer this. Also, just looking at that chart, in the police department, there's 24 people that are in management and 100 people that are not. And on fire, it's like six people are and 98 people are not. So how does that work? Is it just a different hierarchy so that in police, they're considered management, but they're still working all the time, too? So I just didn't know how come there were so many managers and employees.

I'm sure either could answer. We'll leave it to Jessica. I can do the math because I work there, but I'll let HR do it.

Thank you for the question. Our bargaining units are made up by position type, and the city actually determines what positions fit into which bargaining unit. In PD, the sergeants and above are in the management group. That's a bigger... portion of the employees. In fire, that makeup is different just by their makeup of the department. It's actually battalion chiefs and above. So there's just fewer of them.

So then the people that are in the managers group for the police, do they manage other people? Yes. So they oversee some things, but they're not strictly managers because they also are doing...

They're all job-due because they're doing all that. Yeah, sergeants, and we have quite a few sergeants. So it's sergeants, lieutenants, captains.

Okay, thank you. I knew that there was an explanation, but I just didn't know what it was. Thank you.

Yeah, and before I go to Councilman Ritchie, I just want to call out, I think, at least in the presentation, the intent is good, but I see a... If this becomes a permanent record, I see something that could need to be corrected. The BPOA says there's 116 total budgeted FTEs. I believe that's probably, if you combine the 24 and 116, there's no way that the police department's that big. Is that correct? I've never known the PD to be that big. Are you talking about slide six? I'm talking about, yeah, if you go back to slide six. And the same thing, I understand the call out in the FMG and also the VFA, but are those six actually a subset of the total FTE-99 in the fire department? And are the 24 a subset of the 116 in the police department? Because we don't have that many in either of those departments, or at least the police department. I just noticed it because I hadn't seen this presentation.

I would have to double check, but I believe these are the numbers. These numbers should be correct.

Maybe the police chief can answer the question. I think you see it. Right. Well, you come forward, you'll be able to see it. I mean, I understand Councilmember Wiley's questions because the sergeant and above is the supervisor and manager, and they're in the VPMA. But there's not 140 sworn in the police department.

So our sworn allocation should be 118, but that's two of them are budgeted by Kaiser, the two positions by Kaiser. So 116 plus two from Kaiser, 118. And then I believe we have 62 to 64 professional staff members on top of that.

But these numbers here, if we're looking at the percentage, because what we're trying to do is we're trying to address the state requirement under this law, AB 2561, is trying to not exceed 20%. I don't think that that's the, we don't exceed anything in that. But I want to be clear, because a police officer promotes a sergeant, they become part of PMA. That's the reason why you see zero, because they're filling them, the vacancy starts at the bottom. But if you were to look at this, it could be misleading that we've got 24 members in the VPMA and then we have 116 in the VPOA. That can't be right. Because your managers are going to be a subset of your 116, is that correct? Go ahead, Regina.

In the POA is also included dispatchers.

Okay, so the dispatchers are in that one as well. Okay, so that helps to answer that question. Those would be civilian positions. And then how many did you also say are in the civilian other than these two?

So the professional staff position, which includes dispatch, is, give or take, is around 62 to 64.

Okay, so that helps to answer that question. Yeah, thank you very much. Council Member Ritchie? Okay.

So please hop in, say yes or no. The part of the presentation regarding to the hiring our heroes, Travis and EarthBase. So jump right out, passionate about that. There's a program I've talked about many times today. It's called SkillsBridge. I don't know if public entity to public entity is allowed. Are we allowed to be part of SkillsBridge as a city or are we not?

Yes, we are. So we've done a lot of research on this multiple times. So I will say that our most recent information that we received is that if you have somebody come over and do the program with the city, you want to nearly be able to guarantee them a full-time work. And so they've gotten a lot more strict on keeping track of that as well because I think there was some usage of people bringing people on and then not being able to employ them. That's the whole idea of the program. And so we talked about it with city manager's office and it's hard, right? Because we can bring someone, but then if we don't have a vacancy that lines up, then number one, they may not let us have the person to come work for us, but then not being able to meet the needs of the, so there are requirements for it. So I'm not saying that it's never going to happen and we have looked into it, but there's that piece of having a vacancy ready for that person and will they meet the minimum qualifications. Because we still have to run a competitive recruitment process. So there's no way for us to guarantee them that position once they're done with the internship.

Okay. And that was why I didn't know how difficult it was going to be. But for the crowd in the city, SkillsBridge is an amazing program. And the asset we have at Travis, there are so many people from machinists, loadmasters, MPs, I mean, there's so many positions at Travis they can segue over. But I guess that would be hard to have someone where, as an open bid, you can't guarantee. But there's just an amazing opportunity, and it allows them to, and they're very nervous as they're leaving 20, 30 years of service and wondering what's next. And so it gives them that six months to figure out if this is the right fit for them. Right.

And we are looking for other pathways to do just that. But I will say with the skills bridge, it was very challenging, like trying to figure out how we would be able to meet the requirements of the program.

Okay. That's why I hope you had it.

Yeah, we have looked into it.

Council Member Stockton.

Yes, thank you for the presentation. Appreciate the efforts that you've gone to reach out to folks in the community, especially the ones that have unfortunately lost jobs due to some of these employers leaving. I know that there are veteran points that you can apply to our different applications. What sort of legal options do we have as far as local preference points, or are there things like living within a certain amount, or excuse me, a certain time away, like an hour away or within an hour for certain positions that might be able to help some of the folks in our local community kind of have a leg up in being able to get some of the jobs that we offer here?

We only currently have the veterans preference points that can be applied once an eligibility is established, list is established. But we don't currently have any other policies that would allow us to assign preference to other groups of people.

Are there policies that council could weigh in on that might allow you to weigh in some of those factors?

I have not personally seen that, but it's something that we could look into.

I would ask that if there are, please do bring those to us so that we can consider those. We definitely want to take care of the local folks that we know are hurting from some of these businesses leaving. Pivoting to a different area, I know that it would be nice if all of us could get hired that day when we come and meet, but I recognize that different positions have different requirements with different background checks and references and stuff. What are some of the timelines that you have for various backgrounds and reference checks to get people through the process?

I don't have all of that data. I can tell you that our average time to hire last year was 90 days, and that's for anybody that doesn't have a background. We have hired somewhat on the spot for parks and rec positions. through hiring or job fair. But generally speaking, all of our positions have to be posted for a certain amount of time. And we have rules around competitive recruitments and holding it open for a time frame to allow people to apply. So that's what makes it hard to do the on-the-spot hiring.

So when you do the on-the-spot hiring or have somebody meet you when you're setting up at one of these locations, do they turn in paperwork or information like an application or background information ahead of time or do they do it that day?

They could fill out a paper application, but we also provide them the resources to go online and submit the application. That's the easiest way to do it. We also will hand out our business card, ask them to call us. We'll walk anybody through the process and help anybody that needs any assistance. Did that answer your question?

Yes, thank you. Yeah, thank you. I'm going to go ahead and open it up to the public for any comments.

Good evening, Alicia Minion. I have a question regarding the overtime. To what extent has overtime compensated for the vacancies? So overtime might be needed because maybe somebody's out sick, but then overtime might be happening to compensate for the fact there's a vacancy. So I'd be curious if... effectively the vacancies were filled by way of overtime. That's one question. And then with regard to staffing on police and fire, I'm wondering if you monitor the staff numbers and in consideration that community facilities districts, they were created to pay for police and fire to cover new areas. At one time, I discovered that the staffing levels fell below the number of police and fire prior to the creation of the community facility districts. So that would imply that I'm paying for something and I'm not actually getting anything in return because the staffing level was actually below what the numbers of fire and police prior to the creation of CFD. And I'm just curious, how are you, in terms of the staffing level, are we below police and fire numbers prior to the creation of any CFD? Thank you.

Thank you for the questions. Seeing no one else, I'll go ahead and close the public portion of this hearing and bring it back. The questions from a member of the public. I know that there's been other discussions, and this is probably not something we're going to be able to get into tonight because this is really about vacancies, and this is not asking staff to come prepared for overtime, and I'm sure those are questions that can be addressed. And I also know that that was a recent discussion, and to our city manager, I know that that was a discussion within the fire department, but I don't know that it falls within this, but maybe you can actually just shed a little bit of light on that since it was a question.

Yeah, I can share a little bit. Every department has some overtime budget included in their budget because we can never expect 100% recruitment or 100% positions are filled. So we assume about 6% to 8% vacancies when we plan for our budget. So this number is right around our assumption. And then when it comes to the CFD question, we will have to dig a little bit more into details, but I just want to clarify to the community, the CFD contribution is not just for bodies, not just for police officers or firefighters' positions. They include much more, for example, in, you know, I can have police chief explain this better than me. For example, if we have a police car, it includes lots of technology for us to respond to an incident, which includes body-worn camera, in-car video, vehicle locator technology. So when we take the CFD funding, it goes towards police and fire services, not for positions. But police and fire chief can add more to that.

It's up to you. You want to add more to that, chief? It's an ongoing question that I can appreciate, and that is, is there always a delta when overtime has a benefit, and then when it actually is better to actually hire. That's something that we recently heard in the fire department. But I guess part of my confusion in the question here is, this is the bargaining unit, but how many actual vacancies, you can answer to that question, but how many actual vacancies of police officers do we have right now? We just added water.

He left to go to Southern California just to start over. And so we're at nine vacancies as of today. We have 10 people out on injury, and then we have an additional four out on long-term leave, whether it's baby leave or military leave. So we're constantly fighting those demands that life happens. So overtime does get created as a result of all of those reasons I just explained to you, whether it's vacancies, frozen positions, medical leave, et cetera. To our city manager's point, yes, technology is driving us forward. The community demands transparency from their police department. And so when you demand transparency, that requires us to be efficient with our technology that we have in our cars, such as the in-car camera, the GPS in our car, the computers in our car, the radios in our car, the body-worn camera on the officer's chest. So that's part of the cost of running this organization. And it's not just police officers. It's not just the dispatchers. But it's the technology behind that that makes us more efficient. And we can have that trust within our community because we're delivering that product.

And since you're here, any vacancies in the comm center?

Yeah, I think HR reported two vacancies, but two people are in background. Actually, three vacancies, two people are in background.

We have one vacant. One vacant.

Yeah, thank you. You're welcome. All right, with that, I don't see any other questions. This is a no-action item, so I appreciate the... The report out and so this is this is a due because a lot of agencies the requirement for this legislation was the fact that there was a lot of retirements and there was a lot of vacancies statewide and so the state legislature wanted to make sure there's transparency what agencies were doing. to effectively address recruitment if there was a problem, because a lot of agencies were using retired annuitants, and some of the challenges were how are we actually addressing the vacancy. So I appreciate what staff's efforts are, and this report was pretty clear, and I appreciate the follow-up sheet. All right, with that, we'll move on to a business item. We only have one item tonight to our city clerk.

This next item is an update on the general fund budget for third quarter 25-26, a resolution approving the budget augmentation to the 25-26 fiscal year operating budget, and a resolution authorizing the Director of Human Resources to negotiate a side letter agreement with the Vacville Managers Association, as well as budget study session part one. And we have... Finance Director Ken Matsumiya here with his Assistant Finance Director Lucy Hoover and Budget Manager John Flett to give the presentation.

Thank you. Good evening, Mr. Mayor, Vice Mayor, and members of the council. Again, tonight we'll be presenting an update of how the general fund is tracking through the third quarter and then moving into budget study session one for fiscal year 26-27. The current slide shows the general fund budget versus the third quarter projected revenues. This is just a high-level summary or overview, and we'll go into more details of the categories in the next few slides as part of the general fund revenue trends. If we look at the second column to the right, labeled fiscal year 25-26 budget, these were the adopted revenue figures back in June of 2025. And the column just to the right of it is the most recent projected revenue figures through third quarter. starting at the top and working our way down. The first category is property taxes. The original estimate was 42.3 million versus that 47.6 million through third quarter. This is no change from the mid-year budget update. It's about a 12.5% increase. The next two categories are sales tax and Measure M. Sales tax is slightly higher than HDL initially projected at about a half percent. And for Measure M, we're seeing an increase of about 6% of that $21.3 million versus the $22.6 million projection. There are two changes here. The first is HDL has slightly raised the projection for Measure M for fiscal year 26. And the second reason, the more significant reason, is due to interest earned. on its cash balance as rates have steadily risen in fiscal year 26. The next category is other taxes. That budgeted number was $26 million versus the projection of $25.5 million. This is a 1.9% decrease, no change from the mid-year budget update. Department charges and fees, $12.5 million versus the $14 million projection, an 11.9% increase. This is slightly up from the mid-year projection, and it's related to ambulance transports, which again we'll talk about in the next few slides. And then the last category, other revenues, $15.2 million versus that $13.4 million projection, pretty significant decrease here of 11.7%. No change from the mid-year budget update. And again, the decrease is due to the CFD revenue for Lagoon Valley being removed from the forecast because we weren't projecting to hit that 200 permit threshold, which is the trigger for the city to receive the funding. We do have some positive news on Lagoon Valley, and we'll get into that a little bit further into the presentation when we get into the five-year forecast, and Ken will be presenting on that. Overall, revenues are projected to come in $6 million higher than the initial budgeted amount, or just over 4%, with, again, property taxes accounting for $5.3 million of that increase. revenue trends through the third quarter. This next portion of the presentation will focus on the trends for the current fiscal year, which is July 2025 through March of 2026. The trends are based on actual revenues received through the third quarter, along with an updated sales tax estimate from our consultant, HDL. Starting with property taxes, property taxes accounts for 32% of the city's general fund revenues. Revenue through the third quarter is $24.2 million versus $21.8 million last fiscal year. There is no change again from the mid-year budget update. It's an 11% increase compared to last fiscal year. But just to reiterate, the significant change here is that the county implemented a new property tax software, which caused some challenges in the timeliness of new property values being reflected in the annual tax roll. And HDL relies on these for their forecasting. New properties are eventually assessed through a supplemental bill with the city receiving that revenue. But the delays in the valuation of these properties has resulted in a conservative forecast for property taxes. The county has fixed the issue. The software issue should be resolved before fiscal year 27's property tax rules, which will help the variance in forecasting by HDL. And then, as usual, property taxes include not only property tax, but VLF, or vehicle licensing fees, and the residual balance and pass-through payments. Sales tax is the second largest revenue for the city, accounting for approximately 18%, and Measure M accounting for 15%, for a total of 33% of general fund revenue. Through third quarter, combined sales tax was $40.5 million, represented by that green line on the chart to the right. Compared to $44.9 million last fiscal year, a $4.5 million decrease or 10% decline. The decrease is due to a large one-time transaction that we've talked about in previous budget meetings related to the Genentech sale to Lonza. If we strip out that one time transaction or that sales tax, our sales tax are in line with last fiscal year and slightly above fiscal year 24. Sales tax has slightly improved from the mid-year projection and HDL is projecting sales tax to be flat in fiscal year 26 before returning to a more normal 3% growth in fiscal year 28 in those outside years. Other taxes, besides property sales, measure M, taxes account for 18% of the city's general fund revenues. Through the third quarter, actual revenues were $16.7 million versus $16.9 million last fiscal year, a 2% decrease, or roughly $200,000. The year-over-year decrease is attributed to real property transfer taxes being lower by approximately $300,000. And this decrease is also related to the significant one-time sales transaction last fiscal year. But if we strip out that one-time revenue, other taxes are slightly higher than last fiscal year. Department charges and fees, this category accounts for 9% of the city's general fund revenues. Through March, revenues were at 10.3 million versus 9.8 million last fiscal year, an increase of 5.1%, or just over 500,000. Once again, the category contains charges and fees for all the departments, with parks and rec and the paramedic or ambulance transport fees being the majority of the revenue within the category. Through the second quarter, Parks and Rec's revenues were at 3.3 million versus 3.6 million last fiscal year, a decrease of 9.8% or 300,000. One of the programs we're seeing a decline in, we talked about in the mid-year budget update, is the early childhood program. Vacaville Unified School District recently started offering free preschool to residents, which has resulted in a participation decline for the city's early childhood program, as well as a decrease in revenue of approximately 30% for the program. Another program seeing a decrease in revenue is VPAT, or Vacaville Performing Arts Theater. As part of the department's 2.5% cost savings measures that were implemented for fiscal year 26, they reduced the amount of shows being sponsored, which directly affected the revenues. Most programs and activities are flat or slightly up compared to fiscal year 25. Three of the programs that are doing well that we wanted to call out tonight or highlight tonight are the cultural arts program, gymnastics, and aquatics. And then for the fire department, their ambulance revenue, they've seen an increase of 20% through the third quarter versus fiscal year 25, so pretty significant. Ambulance revenue came in at 5.5 million versus 4.6 million last fiscal year, a $900,000 increase. The fire department continues to see an increase in medical transports, which is directly related to the revenue, and we expect to see the trend to continue through the end of the fiscal year. Overall, department charges and fees are trending higher than last fiscal year, and we expect that trend to continue through the end of the fiscal year and into fiscal year 27. This next slide is our general fund revenue and expenditure projection for fiscal year 26. So if our projections for revenues and expenditures played out for the remainder of the fiscal year, this is where the general fund reserve would stand at the end of fiscal year 26. So just starting at the top there on that chart to the right, operating expenditures and transfers out, this is money leaving the bank, $156.6 million. General fund operating revenues and transfers in, 128.3 million. That's money coming in. Measure M revenues, 22.6 million. Again, money coming in. That net revenue is 150.9 million. So if we were to net our revenues versus those expenditures, it would be a general fund deficit of $5.7 million. We have no new CIP expenses for fiscal year 26, so the net general fund deficit, again, is $5.7 million. That would leave the general fund reserve at $43 million, or 28%, above our target reserve policy of 16% to 25%. And that concludes the third quarter budget update for fiscal year 26, and I will pass it on to our finance director, Ken Matsumiya, to kick off budget study session number one.

Thanks, John. As mentioned, the second part of tonight's presentation is the first study session for next fiscal year's budget. Next slide. So starting off, really a high level projection of where we're at with the general fund projection for next fiscal year at this point in the process. We are projecting the deficit spending to continue to the next fiscal year and beyond, and that the gap between the ongoing revenues and expenses, even with cost savings measures, is about $11 million, a little under that amount. And so this amount is slightly improved from where we were at mid-year, where we were thinking the gap for next year was going to be about $12 million, but still a significant gap exists between our revenues and expenses. Under this projection, by the end of next fiscal year, our reserve would finish at 20%, and so just as a reminder, our general fund reserve calls for the city to maintain a two to three month reserve, so 16 to 25%, with that goal being 20%. And so, although by the end of next fiscal year we project to be kind of within that reserve policy, even with cost savings measures, because we are deficit spending, when you get to kind of, you fast forward another year to the end of fiscal year 28, we are projecting that we would be below our reserve at about 13% by the end of fiscal year 28. And just to add some more context, each 1% of reserve is about 1.5 million. And so in order to stay above our reserve policy by the end of fiscal year 28, we would essentially need to find $4.5 million, either by reducing expenses by that amount, revenues would have to increase by 4.5 million or some combination of those two to still be within the reserve two years from now. Next slide. And so with the deficit spending, this slide kind of highlights the actions that have been taken over the last two fiscal years, and then what we're proposing for the upcoming fiscal year as well. And so kind of going back in time to going into fiscal year 24-25, entering in that fiscal year, we had a reserve of about 40%, so two times the amount that our policy calls for. And so with the budget, what we had proposed was using that reserve portion of it to balance the budget for that fiscal year. Additionally, the city had a program in place to make additional principal payments towards our unfunded liabilities to save on interest costs. That was also paused due to the projected deficit spending. For the current fiscal year that we're in, that's where a bulk of this cost savings measures have really come into place. And so for the current fiscal year, citywide we implemented a two and a half percent budget reduction for every single department. That also included freezing several positions and then leaving other positions throughout the city, holding those vacant as part of those reductions. Additionally, measure and pilot programs that were put in place after COVID were paused funding towards our capital improvement programs, and also for internal service funds, so this would be things such as our public safety equipment replacement technology. Those were all reduced this year as part of the cost savings measures. There was no CPI applied to our services supplies budgets, and then some other things that we implemented during the current fiscal year. So we went to council to have a credit card service fee put in place, and so the city had historically, which is fairly uncommon when compared to other municipalities, is the cost of processing credit card payments, the city fully absorbed that amount, and so that was pretty much $400,000 that the city was previously absorbing and covering. With the implementation of the service fee, this amount would be passed on to those users. Additionally, there was also an item that went to council this year to adopt the state's funding agreement when it comes to wireless site lease contracts, and with that being put in place, when that actually gets implemented, that would save the city, or bring in about $200,000 in extra revenue. For this upcoming fiscal year, we are recommending that the department budget reduction stay in place so that 2.5%. Additionally, under the way that the 26-27 budget is planned, we would continue to defer maintenance and capital project funding to reduce that budget gap. and then some additional items are reducing. This was an item that was on consent. With the lighting and landscaping, the general fund routinely contributes close to $2 million, kind of above and beyond what's required for that, what's required for those landscaping districts. With this upcoming budget, we're proposing that that be reduced by $400,000 in deferring some of the equipment replacement that's in those districts. And then with the, our city manager mentioned this in her comments, but on the hiring process, decentralizing that and having that go through an internal city manager review before any positions after July 1st are recruited for. Next slide. And so this slide gives more details on sort of what those 26, 27 cost savings measures would be. And so I will not go through each one of these in detail, but the very top item is that 2.5% budget reduction, kind of breaking down underestimated savings, what that is citywide, and how much that would be specific to the general fund. Measure M pilot programs are the different items that I mentioned that were put in place after COVID. All of these have all been reduced or paused with the exception of the youth scholarship program. And then on the capital contribution side, continue to reduce the amount that we're contributing to the public safety equipment fund. There is an asterisk or a call out for CIP, which is our capital improvement program. And so historically we fund about $2.5 million from the general fund in Measure M for the CIP program. This fiscal year, we did not program any money for 25-26 because of the deficit spending. For the upcoming fiscal year, we are proposing about, I think it's $700,000 for three specific projects that are critical related to replacing the fire alarms here at City Hall, HVAC at Three Oaks, and then roof replacement at ULattice. And then I had mentioned the lighting and landscaping district reduction. And then additionally, the senior leadership, city manager, city attorney, and the department heads are also foregoing their COLAs in this upcoming fiscal year. Next slide. Next slide. So this slide kind of shows the 2.5% cost reductions by department or by the numbers. And so in total, it's about 5.2 million. You can see how much it is for each department. Next slide. And so with the cost savings measures being in place this year and even continuing on into next fiscal year, just some of the themes that we're noticing, this would be in 26, 27, the second year of department budget reductions. And then on top of that, under normal times, we know that inflation exists, that with your service supplies budget contracts increasing costs, software, the cost of buying things increases. And so typically with the budget, acknowledging that we would apply kind of a CPI or inflation factor into the budget on department services supplies budgets. We didn't do that this year, and then in this upcoming budget as well, we're proposing not having that CPI in there as well. And so if we were to apply that inflator, that's about 5.4% that each department we get in their service supplies budget acknowledging that things cost more over time, that inflation exists. And so what we are asking departments to do is essentially kind of stay with a reduced 2.5% budget, and there isn't an increase for inflation as well. And so with that, what you're seeing, I mean, you're seeing the impacts, I think, across the city, but especially with smaller departments with smaller budgets or that don't have any vacancies that can be relied on for cost savings measures, they are having to take extreme cuts to their supply and training budgets, and that's something we've noticed with this year. With capital contributions, mentioned in the previous couple slides ago, that that would be reduced for the upcoming fiscal year and continue to do that. But what we've noticed, and even with the upcoming fiscal year, that is not sustainable. It's not a long-term solution. You can't continue to defer maintenance and contribute towards your ISF funds. And so with this upcoming budget, we are having to make some, to pivot and kind of make some changes to that. And so with community development, with them being very, their funding being very reliant on development and fee-based, with development slowing down this year, the general fund is going to have to contribute an amount towards community development. That is something that we've historically done It was paused for this current fiscal year, but that is something that we'll have to continue for the upcoming fiscal year. With technology replacements, it's the same thing where we had reduced that amount for this year, but with the existing replacements that need to be funded, we had to increase or fund technology replacement higher and not pause or reduce that amount. And I had mentioned with our capital improvement program, the three projects that we're having to fund in the upcoming year as well. With budget augmentations, it kind of seems counterintuitive where we're going through cost savings measures, but then when we're doing these quarterly updates, there's budget augmentations that come with that. And I just wanted to explain what you're seeing with that. We are limiting the budget augmentations and the requests, but a lot of those that we're bringing to council are one time in nature or they're related to repairs or something that's related to risk or compliance. And so with us having to pare down the budget as much as we are, Previously, there might have been, within the budget departments, they might have the ability to absorb those costs. But with budgets having to be reduced, some of the items that we brought to council would be like the increases to pool chemicals. That's something that requires a budget augmentation because the budgets have been reduced to the point where there isn't the ability to cover the additional costs for that. Same thing with kind of false alarm repairs and some of the other items that we brought to council is that although we're trying to limit the budget augmentations, essentially any sort of unplanned expense or some cost that's coming above what was intended, those turn into budget augmentation requests and really until you get until quarter three where we're at right now, we're not certain if there's budget savings that would be able to be used to absorb that, if that makes sense.

Next slide.

So with the fiscal year 26-27 budget, although cost savings will continue, there are legal, regulatory, and operational items that will be included and funded in this upcoming fiscal year that we'll be talking about over the next several slides. And so one of the items is related to the consolidation of risk management or the city attorney's office. the upcoming Fire Academy, and then with the fiscal year 26-27 budget. We do have some budget augmentations for the general fund, kind of minimal, about $30,000 that we have for council consideration. And then for other potential budget impacts, there are some stuff that we're not aware of the cost right now, and so they're not currently factored into the budget. And so one of them being with animal services, how much we're going to have to contribute in the upcoming fiscal year. And so if we get that information prior to budget adoption, we would build that into the budget. And then with our fee schedule, that is an item that will go to council on June 9th for consideration of applying the CPI to the current fee schedule. Since that hasn't occurred yet, we haven't built that into our revenues for the budget as well. And so with that, I'll pass it to the city attorney for the next slide.

So the first item is for the city attorney's office. It's the reorganization and centralization of the risk management division. The city's risk management functions are currently distributed across seven staff members in three separate departments, resulting in a fragmented oversight, duplicated efforts, and limited strategic coordination of the risk functions. The reorganization will consolidate those responsibilities into a centralized risk management division housed in the city attorney's office, reducing the dedicated staffing footprint from seven positions to three, while simultaneously elevating the program's effectiveness and accountability. The consolidation will allow the remaining four staff members to redirect their full capacity toward their primary departmental responsibilities, increasing operational efficiency across those departments without adding any headcount or cost. Beyond the structural benefits, establishing a unified enterprise risk management program, positions the city to achieve immediate and ongoing financial returns. Specifically, the reorganization is expected to reduce third-party administrator costs, lower claims and litigation expenses through more proactive risk management, and recover additional revenue through systemic third-party subrogation of all eligible expenses, recoveries that are currently being left on the table due to the program's fragmented structure. The cost to the fiscal year 26-27 general liability and workers' compensation budget reflects a one-time compensation adjustment to align the risk management division manager's salary with the compensation range established for comparable manager-level positions across the organization and to appropriately reflect the scope and responsibility of that position. In summary, this reorganization delivers a stronger, more strategic risk management program Greater efficiency across multiple departments and immeasurable cost savings all without increasing the city's overall staffing levels And now I will pass it to Chief Drayton

Thank you.

On the next slide, you'll see next year another fire academy. We're projected for eight new folks. Right now I have three folks that are going to be either retiring due to injury or getting medically retired, and I'm projecting five actual retirements. Overall, my staffing for the department, I have a total of five vacancies that I'm filling with overtime, and then the folks that are in the academy, once they come out, I'll have the 14 to offset overtime, but the five vacancies are one long-term Reservists I got pulled to active duty for three years so that Spot I just got to fill with overtime until he gets back and the other I have two on-duty injuries and two off-duty injuries that are being filled at overtime We talked a few months back about doing a five-year analysis of overtime. That is complete. We went back five years. The organization took every bucket of overtime that I spend over the last five years create an average. The average is 3.1 million is what I should get at the beginning of the fiscal year so I have an opportunity to be held accountable. Right now with 1.6 million I can tell you at the end of the first quarter before the second quarter I'm already out of overtime. So this will allow the city to take the historical trends keep them accurate and hopefully stay within my overtime budget so I don't go over budget. This will improve transparency throughout the organization and the city and it's going to reduce overtime once all the buffers are filled and that's why you're seeing another academy In January, we got one starting next week, which has 14 people. In January, we'll have an additional eight. So hopefully, it's not always perfect because it's always tough because of injuries, but having five vacation relief folks a day saves five overtimes a day times 365. So my goal is to stay within that 3.1 million, and I'm going to... Keep everybody informed on a monthly report to Sunhouse that we don't do internally to show where these buckets are spent. So if I start to see a trend where we're not going to stay within line, obviously finance is going to be involved really quickly on that. That concludes my portion. Thank you.

Thank you, Chief. I will be going over our proposed budget augmentations next. So we have this summary slide here. We have a few for the current fiscal year for 26 and then we'll go into the budget setting session number one for next fiscal year. All the requests tonight, as Ken mentioned, are critical items that have an immediate need. Most of the items for fiscal year 27 are one-time in natures, particularly for utilities. driven by updated fee structures, recent studies, and the need to address operational and infrastructure requirements. The first item we have on here is for various departments, and this is for closed session items that recently went, that council previously approved during closed session earlier in this fiscal year. The settlements have now been finalized, and we are required to ensure they are fully funded in the current year operating budget. This amount represents the minimum necessary to meet our legal obligations and remains consistent with council's direction to limit mid-year and quarterly adjustments strictly to items essential for compliance, legal requirements, and risk mitigation. And that's a total of $132,718. The next item is for public works tree removal, just shy of $30,000. In February of 26, the city attorney's office received a demand letter from an HOA regarding a hazardous city-owned tree on an easement along Alamo Creek. The HOA retained their own arborist, which recommended the immediate tree removal. In addition, the city hired another arborist to look at it as well and identified a moderate risk. with future failure worsened by creek bake erosion. Furthermore, given a similar tree failure in 2025 damaged the HOA fencing and the potential risk and liability exposure, the city attorney's office recommended removing the tree. Due to the location of this tree, the removal required crane access behind an apartment complex, It also occurred during nesting season, which required that a wildlife biologist monitor their work as well, which also increased the cost to remove this tree. The total is $29,575, which exceeds street maintenance current budget, typically for creek bank tree work and emergency hazards. The unplanned expense will be covered using one-time non-department budget savings that we were able to recognize as we get to Q3. Similar is the next item for emergency spill for storm drain cleanup. There were two incidences that Public Works had to require immediate flushing and a vacuum truck clean to protect storm water system and comply with the city's MS4 permit. Because Public Works does not own a Vacon truck, the city had to hire a contractor for the cleanup. Both spills were caused by a private party. Risk management is currently pursuing subrogation, but those reimbursements can take months or even sometimes years. Furthermore, one of the incidents also required disposal of contaminated materials stored at our corporation yard. The city does not have a dedicated budget for subrogation-related cleanup, making the $44,770 cost unplanned expenditure. But like the tree repair, we were able to find some money as we get to quarter three in non-departmental, and so we're covering that cost. The next item is for public works and it's for the EVC certification for the equipment maintenance supervisor classification. During our recent 2025 MOU negotiations, the EVC certification was added to the equipment mechanic series, but not the equipment maintenance supervisor classification. A recent retirement created an operational need to align the certification requirements across the entire series. As part of tonight's request for counsel will be for the authorization for HR to negotiate a side letter with VMO and add the EDC certification requirement to the supervisor role. This update supports consistent standards and strengthens our succession planning within our fleet services. There is an anticipated impact in the current fiscal year, but it could be absorbed by the vacancy of the supervisor position. However, the ongoing impact to the general fund is $5,120 in the future years. The next two items are for the Fire Department in the next fiscal year, 27. The first is a compliance item related to California Senate Bill 660 for the California Data Exchange Framework, which mandates EMS participation in the statewide data exchange framework for interoperable patient data sharing and care coordination. The statewide data exchange creates a centralized, secure repository of patient profiles accessible to authorized healthcare providers in California. The department will use this software platform to meet state requirements as it enables secure, standardized, and operable data exchange with state and regional partners. This will have a $20,000 ongoing cost starting in fiscal year 27. The next one for the fire department is additional software technology to integrate our current CAD system rims with Esri. Mapping technology to enable the automatic vehicle location, allowing dispatch to see real-time unit positions and assign the closest, most appropriate resource. This will strengthen our coordination between fire and ambulance units with better operational awareness, especially during multi-unit or multi-agency incidents. This item will be funded from the general fund with a one-time integration cost of about $9,000 and then a minimal ongoing cost of $1,500. The next items, several items are for our utilities department. These are additional critical services and tools. The first item has an ongoing cost just shy of $300,000 for wastewater and water treatment chemicals and raw water purchases. Chemicals have continued to increase and outpace the department's current budget in utilities, like other departments that have not received the CPI in their services and supplies over the past two years. In addition, raw water increases are based on contractual terms with other partner agencies. The next item for ongoing expense is 85,170, and this is to meet regulatory weed abatement requirements, which reduce fire risk and ensure full compliance with the fire code. We do have a one-time expense, just over $293,000 for a new asset management system software that will replace a duplicative system and improve consistency, accuracy, and the life cycle management. Next, we have just over $215,000 in one-time funding for the required additional permit related to the laboratory testing and a capacity charge study to support system growth and future infrastructure planning. Then we have $287,000 of one-time funds for a master plan and development modeling review, which will strengthen operational decision-making and regulatory compliance. And then finally, we have $85,000 in one-time funding for the Bay Delta regulatory support and reimbursable development modeling, which supports development oversight. For the utilities department, the ongoing costs are just over $384,000, and then most of the augmentations, like I said, are one-time fundings, and that is totaling just over $881,000. Next slide. So in summary for our Q3 in the current fiscal year we had the $132,718 augmentation and that is related to the closed session items, the settlement items. And then for the upcoming fiscal year 27 there's an overall net impact just shy of $1.3 million with $30,500 coming from the general fund and approximately $1.26 million coming from our utilities funds. And with that, I will turn it over to Ken, and he will go over the updated five-year forecast.

Thanks, Leslie. So the next several slides are updated five-year forecasts for the general fund. Next slide. So this first slide shows our notes or assumptions for our updated five-year forecast. With sales tax, the projection is that we're going to see pretty much a continuation of what we've seen the last several years, where sales tax revenues just growing very minimally over the next fiscal year. And then over kind of the outside years of the forecast, you start seeing more of the normal 3%. With property tax, we see an increase next fiscal year of about 2%. And then in the outside years, again, you're seeing more of the 4% growth that we've seen historically. The biggest change in the five-year forecast, and John had mentioned this earlier in the presentation, is with Lagoon Valley. That specific CFD had a trigger on it where the CFD related to fire-related services That wouldn't start until 200 permits are pulled in Lagoon Valley. 200 permits were pulled, I believe, as of last week. And so with that, what we've updated with our five-year forecast is that that revenue is now built in from next fiscal year forward. And you'll see that on the revenue side when we get to that. And then overall revenue growth for the upcoming fiscal year, we're projecting growth to be around 2% for next fiscal year, and then around 3% or moderate growth over the life of the forecast. On the expenditure side, the updated forecast includes the draft budget along with the budget augmentations discussed. as well as the continuation of the cost savings measures. On the personnel side, we do assume 6% vacancy, and so this is on top of the cost saving or the vacant positions, and so that kind of gets back to that 8% that was mentioned earlier in the previous item. No CPI on any of the discretionary services supplies budgets, again, for the current fiscal year, and then we update it for our newest actual information on pension and OPEB. And then with CPI, having some limited funding in the upcoming fiscal year, which you'll see on the reserve slide. Next slide. So this slide is our revenues and expenses for the general fund. The blue columns represent expenses in total. And then the lines that go across are revenue. And so this slide really highlights the importance of Measure M. So if it were not for Measure M, what you would see on the revenue side is that gray line that's going across where you can see there's a significant gap that exists between the cost of providing service and those expenses and the revenues that we would get if it were not for Measure M. Golden line across is total general fund, including Measure M. And so for fiscal year 26, as mentioned earlier, the gap or the deficit that we're projecting for this current fiscal year is about 5.7 million. So that is better than what we were assuming at mid-year. We were assuming we were gonna finish with an $8 million deficit. And then for fiscal year 27, going back to mid-year, we were thinking that was gonna be 12 million. With the Lagoon Valley money, we're projecting that that gap to be about 10.7 for next year. And then over the life of the forecast, you see that top section, what that gap looks like on average, we're looking at about $7 million over the five years on average. Next slide. So this slide is our reserves, and so for the current fiscal year, projecting to end the year at 28%. For the upcoming fiscal year, kind of in the middle rows, you see the $730,000 that's gonna be set aside for new funding for for CIP next fiscal year, but then the projection is that cost savings measures continue over the five-year forecast because of the deficit spending. And although we are projecting that we'll still be within our reserve policy by the end of next fiscal year, even with the cost savings measures, you know, that amount goes down over time, as you can see, to 4% by the end of fiscal year 31. And so although this has improved from what we had projected, At mid-year, just wanted to again highlight this is a forecast that assumes cost savings measures, it assumes continued deferred maintenance and essentially operating the city with essentially no new money going towards CIP or maintenance. Next slide. And so this is our budget roadmap of kind of the next council items coming up. And so the next council item would be on June 9th, which would be our study session number two, where we'll have presentations as well as the capital improvement program presented as well. And then on June 23rd, the budget would be considered for adoption. Next slide. And tonight, there are two resolutions for consideration in addition to receiving this information. So the first is approving the budget augmentation of $132,718 for the closed session settlements in the current fiscal year, and then authorizing the director of HR to negotiate a side letter with the vacuum managers organization. And next slide. And with that, we'd be happy to take questions or comments.

And thank you for the comprehensive update. I think it's important to actually get this kind of information ahead of our budget cycle, especially when we go through adoption in June. To start with the questions, I'll go ahead and turn to Vice President Silla.

Thanks for the rundown. Two questions for Chief. Sorry, they're Chief. You guys are twin names. Two questions so number one when there are emergencies throughout the state of California where our firefighters have have to or choose to help support those efforts the overtime cost that's accrued from that is Responsible based on the state of emergency from Cal fire wherever comes from not not from our budget, right?

That is correct We pay upfront and then we get reimbursed by either state or the fence if the overtime

Is there ever a situation to where that their response time, their time responding to that takes away from their regular scheduled time from their regular shift here? Is there ever situations where them responding to that would cause them to be on overtime for our department?

Yes, they're always on overtime. Our department, it may not be here. So, for example, if there's a large incident down south, it could be down south for up to 21 days straight. So their work days here would get backfilled on overtime, and then we would just pay them overtime for the days they're not on work. It's a little bit... complicated but we are reimbursed our impacts for them being gone and that was my second way to say and that was my second question just to clarify that When we have to backfill or fill those open positions with our current staff, that's not a way out of town on business That overtime cost is compensated by the state that is correct Thank you, sir, and we get a fee for our vehicles that are being used and we get a admin fee as well Thank you Councilmember Wiley Thank you.

Thank you. Could you go to slide 19? So mostly I have a question about the EVT certification because I thought just from reading it that we put a new person in there that needed the certification. But then since it's also, it's an ongoing amount, not a one-time amount. So tell me, is it more than, does everyone need that certification now? It's not just one person that is in that position.

I'll defer to our director of HR.

So we negotiated it with a different bargaining unit the last round of negotiations and the council approved that authority and it was implemented into the MOU and it applied to any position in that other bargaining unit, Local 39. Any of those people in that classification that obtained the cert started getting the pay. This is a completely different bargaining unit with the supervisor position in it. So this would allow us to pay that supervisor if they had the certification.

So it's not paying to get the certification, it's paying because they have the certification. So they have to get the certification on their own dollar.

Sometimes. Sometimes if they're already employed with us and they're going through the certification program, the department can choose to pay for them to go.

So that was my question. So if we have someone and we're paying them for certification, now they have it, they go next door because they wanted to go to another city, is there any obligation if we're paying for the certification that they need to stay with us for X amount of time?

There is not. However, adding this pay will help retain those people rather than them leaving and taking it somewhere else.

Because it gives them more money, they're more likely to want to stay. Yes. Okay. So that's why it's an ongoing amount instead of just a one-time amount. Okay, thank you for clearing that up. And then I have a question about the credit and debit card fees because I think that was on their subware. And I understand charging for people to use their credit card because the credit card companies all have a fee, but why do we charge to use a debit card because I didn't think a debit card had fees associated with it or does the bank charge fees?

It is. If we're charged on the debit card fee, and we are, it's because there's processing charges related to it. We do offer the ability to use a checking account or an ACH, and that would be a free option, but with credit or debit cards, there is a processing charge with it, and that's why we're passing that on.

Yeah, I did note that it was still free to do it that way, you know, so I just wanted to know about that clarification. All right, and then just with the tree issue, I just wondered from Public Works whether the recent winds have caused any other tree issues because I know we're still dealing with tree issues damaging a house. So do we have anything with the trees? Because that house is still waiting to get repaired.

With the high winds, there's always branches and limbs coming down, yes. And last week there was a number of them that public work staff was going around cleaning up. To my knowledge, there wasn't any damage, structural damage to any houses or private property in the last recent storms. But it is something that staff is always dealing with and always looking out for, yes.

Okay. Well, I was hoping that there wasn't damage, but I knew trees would come down because you can't keep on top of all of them. But we're planting more and more trees in the city, and some of them are getting older, so it's always an issue.

Yes.

Thanks. So those were my questions. Thank you.

Yeah, thank you. The only question I'll add other than what I've already heard is, well, actually on the subrogation portion of this, obviously whether it's tree removal and the need to do this, if in the future there seems to be... a better way of looking at this other than every time we have an issue that we have to add funding to the budget. Sometimes it is staff, sometimes it's a contract. So it's more of a comment than a question on that one. But as far as the weed abatement, and this may come from the fire department, is this a change in whether it's regulations that require an ongoing charge of $85,000 a year for weed abatement? Can you answer that? I mean, if this is changing, what's the reason for the change? I don't think it's a changing.

Sorry to interrupt. It's actually, that's the utilities item. And so not the Weed Abatement item that was on there.

OK. So it goes through Weed Abatement. So maybe however staff can explain why that's an ongoing item and provide some clarification.

So we require all lots within the city, whether it's owned by the city or not. And I would have the director of utilities answer, but I believe it's the impact costs that they can't absorb anymore. But it's required whether it's owned by the city or not. Okay, thank you.

We'll open it up to the public for any comment on this presentation.

Sorry for that. All right. Hello again. Brandon Cherry, Back Hill resident. So I am standing here tonight to strongly urge the council to reject the proposal for the 1% sales tax increase. During the discussions, the choose your path surrounding this deficit. So, sir. Yes.

This is an agenda item. This has no discussion on the sales tax increase. Am I speaking at the wrong point?

Yes. Is there going to be time after this on the budget?

No. That would be business from the floor. So during business from the floor, it's discussing anything that's not on the agenda that's within the jurisdiction. However, that will be coming up as an item in June probably, I think, the next meeting.

Yeah, it'll be there on June 9th.

Yeah, so it will be at the next meeting. Okay. Well, it was on there they were proposing the budget, so that budget agenda item.

Yeah, any discussion on a sales tax review from the council has to be properly noticed, and that's not on tonight's agenda. And this is very specific to a mid-year budget. Got it.

Okay.

Yeah. Thank you. But it will be coming up in June.

Then I'll take my time to address the weed abatement. So are we talking about residents that cannot afford to take care of those weeds, that that is reserved for that cost?

Okay, I'll have them answer that question, but not right now. So if you have any other questions, you can direct them to me. And then when I bring this back to the council. So are there any other questions that you want answered?

Not at this time.

Okay.

I yield my time.

Yeah, thank you. I'll have them answer that question. Anybody else wishing to speak?

Good evening.

I'm Wendy Brecken, and I had a few questions about the assumptions. For example, what is your assumption in the economy when you're projecting for five years out? Because a lot of budgeting I think is assumptions. I'm not an accountant or anything, but it seems like... You can, I mean, we have sales tax that's looking great. I mean, 2014 was projected to be like 14 million from Measure M. And I don't know, we're doing like twice that or near twice that. Six million above projected. budget. Revenues are up even in a teapot economy. So when you have a good economy, let's say the war's over and we don't have high gas prices and people have more money to spend at the outlets, so we have more sales revenue, won't that take up part of the problem with the projected deficit? It seems to me that we have a reserve, a pretty high reserve right now, 28%, I think. And while it's projected to go down every year, I'm not sure what the assumptions are there. I mean, I guess it has to do with the assumptions of costs increasing. Remember back in 2011, the reserve was, I think, 10% was the policy. And so now we have a 20% policy. And maybe now is the time when we have a T-bit economy that we should be using more of the reserve instead of maybe the 2.5% cut or other things like that. Okay, yeah, Lagoon Valley revenues going up. I guess that was taken into account in the chart. Thank you. That's all my questions.

Thank you.

Good evening.

Hi, Alicia Minion. I just have a few questions. You mentioned, I think it was the landscape and lighting districts, that the general fund has to cover approximately $2 million. And I was just wondering if the staff has identified those and to what extent you can go to those homeowners that are within those districts to vote to increase the assessment so it covers a cost that way? You never know. I would vote for that to cover the actual cost of the landscaping. And I was just wondering if the staff has made any attempt. Also, I was wondering if there's any large taxpayers that has appealed their taxes where maybe there's some potential windfall in the future once the appeals are settled with the county, kind of like with Genentech. And I was just wondering if the staff is aware of any situation like that. I'm also wondering, there was a comment earlier by staff that there wasn't an appetite for a measure for parks. And I was wondering if it was that because it needed a two-thirds vote? I didn't understand why there's not an appetite for parks, but an appetite for sales tax measures. And then lastly, we have a dedicated paramedic tax. That tax was... That measure went to the voters in 1976. And because of Prop 13, my understanding is that levy is sort of frozen in time. And I was wondering if staff has contemplated going to the voters to say, hey, here's the situation. We passed this 1976 tax to provide ambulance services to our residents. It's frozen in time. Will you vote to unfreeze it? I mean, I don't know if anybody's, because we already have that. It's already on our bill. So those are just some ideas I have. Thanks.

Thank you. Seeing no one else, I'm going to go ahead and close the public comment portion of this, bring this back to staff. If there's any questions that you heard from the public that you could address.

Sure, I could take a response to the last two speakers, and then I'll ask our utilities director at the very end if he can speak to the weed abatement question. And so related to our revenue assumptions, and so we use an outside consultant that works throughout the state on our two biggest general fund revenue sources, and that's sales tax and property tax. On the property tax as well, we also look at the county's assessed role that we get in June, and so that's really what helps us project what our property tax would be in the upcoming year Now with the county's challenges with their software implementation over the last couple of years, that has been a challenge where it's kind of led to more conservative forecasting on the property tax side. But with the assumptions, we don't assume a recession in the upcoming year. But on the sales tax side, there's a slide that was brought up for Q3. The biggest challenge that we're seeing on the sales tax side, and it kind of shows here, this is data through the third quarter. But what you're essentially seeing is that from 21-22, you're not really seeing any growth in our biggest revenue source, that's sales tax and Measure M. In 21-22, we were at $38.2 million outside of the spike in 24-25 that we saw from the one-time sales for Genentech. That's essentially stayed flat since 21-22. And that's consistent with what the state is seeing as well. If you kind of look at, on a calendar year basis, what the state did in sales tax growth in calendar year 23 and 24, it actually went down two consecutive years. And so that's the kind of data that HGL uses. They also look at kind of where we're trending as well. when they're making these assumptions. And so when we assume sales tax, because we're seeing very minimal growth outside of the one-time payment, they're assuming that's going to be the same for the next fiscal year because of what's going on globally, what they're seeing with gas prices, all of that stuff factors into that. And with the reserve, the reserve is above policy level. It's currently projected to end the year at 28%, but then you also have to factor in sort of where we've been. So if you kind of go back two years ago, entering into the fiscal year 24-25, we had a reserve of 40%. And so, you know, as the deficit spending has continued, even with these cost savings measures, you see how that reserve has gone down. I mean, over the last two years, we essentially have gone from a 40% reserve to 28%. And then we continue to deficit spend even with the cost savings. And so, Using the reserves, it's great that we were able to build that over the good times, but it's not a long-term strategy, and there isn't really anything that we've seen that would suggest that things are going to turn around on its own to where we're not going to have to rely on the reserves, and the revenues are just going to all of a sudden pick up and show 10% growth. or anything along those lines. And so when we forecast the upcoming year, we're at about 2%. But then on those outside years, we are kind of forecasting that 3% to 4%, which is kind of where you would typically be in a normal year. You're going to have some spikes where you're at 7%, but 3% to 4% is kind of a normal assumption with our revenue growth. There was a question on the lighting and landscaping districts and whether we've surveyed for that. Our public works director spoke to this earlier during the consent items. And I think it might be confusing because we use lighting and landscaping districts. We also refer to them as park maintenance districts. But it's the same thing. There was a survey done several years ago on what was the appetite to increase the assessment on those lighting and landscaping districts. And it did not survey well at all. And so that staff has done the outreach or the surveying on that. As far as any large tax payer, property tax payers that could wind up in a windfall to the city, the speaker was referring to with Genentech, because they would appeal their property tax every single year, the county would actually withhold or escrow an amount instead of sending it to the city. And so there was a large portion that was escrowed with the county until basically Genentech and the county would settle and those funds would be released. We're not seeing that. I mean, there are definitely companies that appeal to the property tax bill, but not to the level that we were seeing previously. And so we're not anticipating because the county isn't kind of having a special escrow account like they were with Genentech. With paramedics tax, we did not look at going to the brokers or surveying that. As council's aware, the two items that were surveyed or that we looked into as far as potential revenue measures were the business license tax and then sales tax. With the paramedic tax, because it's an ad valorem tax or based off of property values, I'm not sure legally how that works with whether you could change or kind of go to the voters with something that's on the private tax bill that's property value based. And so that's something that we would have to get like a legal opinion on, but we have not looked into that. And I'll ask our utilities director if he could speak to the weed abatement item.

Good evening, Mayor, Council. The weed abatement item is to maintain the utilities properties. We have several of our reservoirs up in the hills that require extensive weed abatement to protect the critical infrastructure. We also added a new facility recently with the Lagoon Valley Reservoir. So it's just the increased costs associated with the contract to maintain those sites. Thank you.

All right. I don't see any other questions here from the council or comments, but the action item tonight is to receive this, but also to, by simple motion, to adopt a subsequent resolution on these augmentation items. I'll entertain anyone wishing to make a motion. Motion to approve. We have a motion. A second? Second. We have a motion and a second. All in favor? Aye. Opposed? Well, thank you. Look forward to the upcoming conversation. Sir, I apologize that we're just not going to have that discussion here because it has to be properly agendized. Otherwise, people who would engage in a conversation can't. So with that, we're going to go ahead and we're going to adjourn this evening. It's 810. Good night, back.