All right.

Good to go.

Okay.

Okay. All right.

We'll call the order of the.

Budget and audit committee meeting for January 28th, 2025.

Welcome to all of you who have joined us.

And I'm going to ask councilmember Gara to lead us in the land

acknowledgement and the pledge of allegiance if you would.

Chair Dickinson, before we do that, may I take roll call to confirm we have a quorum.

You may.

Thank you. I expect vice mayor telementis momentarily.

Councilmember Maple.

Here. Mayor Prattemgia.

Here. And chair Dickinson.

Here. You do have a quorum.

Okay. Thank you.

Please rise for the opening acknowledgement in honor of Sacramento's indigenous people in tribal lands.

To the original people of this land, the Nisanan people, the southern Maidu, Valley and Plains, Mewok,

the Putwin-Wintoon people and the people of the Wilton Rancheria.

Sacramento's only federally recognized tribe.

May we acknowledge and honor the native people who came before us and still walk beside us today.

On these ancestral lands by choosing together together today in the act of practice of acknowledgement and appreciation

for Sacramento's indigenous peoples history, contributions and lives.

Thank you all.

Vice flag salute pledge.

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.

Thank you all for participating in that.

And is there anything any other announcements that you need to make before we move on to the consent calendar?

Sure.

So good afternoon and welcome to the city of Sacramento budget and audit meeting.

To members of the public who wish to address the council should complete a speaker slip, which can be found at the back of the room.

Speakers slips need to be turned into the clerk prior to the beginning of each item.

We will no longer accept speaker slips after the item and begin and you will have two minutes to address the council and the timer will be on the screens behind me.

This meeting is being video streamed and can be viewed live or later on the city's website.

If you need a parking validation that can also be picked up from the clerk at the front of the room.

So thank you chair.

We can move to consent.

Thank you.

We're going to take our consent calendar.

Any member wish to pull the consent item?

I have a motion by Mr. Gettah and second by Ms. Maple to approve the consent item.

Can we do this by voice vote?

You may.

Oh good. All in favor signify by saying aye.

I'm sorry.

Oh, I don't think so.

Chair, we do have no speakers for public comment.

I did make a presumption on that.

We have a motion in the second.

All in favor signify by saying aye.

Opposed say no.

Any abstentions?

If not, motion carries.

Thank you.

I'll go to our next item.

Chair Dickinson, item number two is city auditor's department of utilities water and waste water funds review.

Our city auditor first.

Arari is here and then we also have a consultant on zoom.

Good morning.

Good morning.

Good morning members of the budget audit committee.

My name is first, Arari.

I'm the city auditor.

With me today is Brian Bass from a consultant, Ref Talis, who is a project manager for these fund reviews.

The recommendation that is before you is to accept the city of Sacramento water and waste water funds reviews and forward to the full city council for approval.

The department of utilities provides three major services, water, waste water and storm drainage.

Each service is funded primarily from its own fund.

So the water from the water fund, waste water from the waste water fund, and storm drainage from the storm drainage fund.

In 2020, we completed a review of the storm drainage fund at the request of the department of utilities.

Due to the success of that project, the department requested we perform similar analyses for other two major funds.

The water and waste water to determine the fiscal stability of both of those funds.

While this is one agenda item, we've broken up the information in two reports.

One is for the water fund and the other is specifically for the waste water fund.

However, the formatting analysis work we did is similar in each report.

At this time, we'll turn it over to Brian to go over the results of the two fund reviews.

Thank you.

Good morning, everyone. Again, my name is Brian. I was the project manager for this engagement. If you could go to the next slide, please.

Thank you. Our overarching purpose was to assess the fiscal stability of the city's water and waste water funds.

This slide here is a bird's eye view of the project objectives.

And I say that because we've worked extensively with the city for over a year, conducting the analyses, and the final reports for each project or for each analysis where over 100 pages for each water and waste water fund.

So for today's meeting, I'd like to point out the main objectives and how this culminated into a financial plan to achieve the project's ultimate purchase, which is the fiscal stability of the water and waste water funds.

And so what we conducted the analysis, we did a detailed review of the fiscal policies and procedures.

We also evaluated the expense revenue and funding history.

We also did a detailed review of the service level capacity, the water and waste water systems.

We evaluate the relationship and impact of deferred maintenance and capital investments of the water fund and waste water infrastructure.

We also looked at, we conducted a fiscal forecasting exercise where we developed financial plans for the water and waste water funds.

The fiscal forecasting component, this is where we take the results of the analysis above that just mentioned in these different objectives.

And we include those in the forecast to determine their impact to the water and waste water funds.

So for example, will the city be able to achieve its absolute floor debt service coverage requirement for current conditions, which is the status quo, as well as different planning scenarios, that absolute floor would be 120%.

And also, will the city be able to achieve its operating and capital reserve target is the operating target being 120 days of operating operation of maintenance expenses, as well as capital, which would be next year's pay go.

If you could go to the next slide, please.

So what is the financial planning process? I do want to point out that this was not a rate study. This was a financial, this was a financial fund review for the water and waste water utilities, which is a little bit different.

We're not, we weren't doing a financial planning or cost of service component where we were complying with prop to 18.

So this shows a brief overview of what goes into the financial planning process.

We look at the budget revenues from last year, we project those over the forecast period, which is 25 years.

And then we compare that to the revenue requirements over the same period of time, which would include operating expenses, capital expenses, existing debt service, future debt service.

And then we want to make sure that over the study period is the city's water and waste water utilities funds, are they able to achieve those fiscal targets that I was mentioning earlier.

And what type of rate increases would result as an estimate for each of those different scenarios.

Next slide, please.

So before we go into the status quo in the different scenarios, what are some of the drivers that would impact the water and waste water funds ability to meet the fiscal targets and what might drive some future rate increases.

This slide here shows some of the pressure that isn't just faced by the city of Sacramento, but also utilities across California as well as the United States.

There are inflationary pressures, which are actually higher for the water and waste water utilities that those are actually growing at a pace higher than inflation.

There's also more stringent regulatory requirements such as PFAS.

And then there are cash reserve requirements, cash reserves are really important to help mitigate unforeseen circumstances that would cause a rate increase spike.

Future borrowing assumptions in terms rate increase.

It rate interest rates right now are higher.

And so that's the factor as well.

And then many utilities are faced with declining consumption of very slow growth.

And so that's a factor that would also apply pressure to the fiscal requirements.

So a capital reinvestment and so a future capital projects that are required for future regulations and for aging infrastructure.

Those also would place pressure on the utility.

Next slide.

Thank you.

So what are some specific drivers specific to the city of Sacramento.

So that really has an impact with powers, chemicals, equipment, cost, construction cost personnel, future bond debt, interest rates in the past were between 2 and 3% now they're 4 to 5% some are even higher.

And then the cities also have multiple years without a rate increase that that is a big impact or

future rate increases when you don't have a rate increase deferred maintenance and capital investments. And so we did work with several departments on the water and we swatter side to understand what are some of those operating needs that have been deferred and what are some of those capital needs that have been deferred.

And also what are some additional operating capital investments that the city should make in order to be with industry standards.

And so and then there's also regulatory pressures there's PFAS regulations and you know a lot of utilities are starting to get a better handle on some of those costs but there's still an unknown here are the magnitude of what those costs could be so that's a big big driver right there.

There's also new hexabane and chromium regulations in California that's a regulatory driver and then there's also some assembly bills have passed as part of California's regulation for making conservation the California way of life that's also a specific to city of Sacramento that's that's putting pressure on meeting those fiscal targets.

Next slide please.

Next slide and so the status quo so this this bar chart here shows the status quo for the water fund and so the light green bar on the left that is the ending fund balance and you can see that over time that is it's decreasing and then the revenue requirements which is that bar in the middle it's slightly increasing state about the same and then you can see how revenues are turning over time as well.

It's growing growing a little bit but it's also it's also it's not achieving the revenue requirements there and you can see the gap with the ending fund balance with the with the target so that dash line is the operating and capital reserve targets so beginning of fiscal year 28 without rate increases with just the status quo without any additional operating expenses without any deferred maintenance added on the city's water fund would not meet.

It's operating target and then in fiscal year 29 it wouldn't meet the capital reserve target so you can see it's missing both of those air highlighted by that red circle there we see that that green bar on the left is below both of those both those lines and then what's not shown is in fiscal year 2030 the water fund wouldn't meet is absolute floor debt service coverage ratio target in the next year so this is just the status quo.

We're things are at with the water fund without the additional without the additional needs and so next we want to talk about whether some of the scenarios where we add in some of the different costs as well as some potential rate increases and so for financial plan one we included the 30 years CIP we also included the additional multi year operating projects that's the my op and and then that was it and so the total rate increases if you just see that.

So we summed up the total rate increases over the 25 year period that will be about 74% and then with each scenario we layered on some of the some of the results and recommendations from the study so financial plan to we add in the additional necessary O&M as well as the additional necessary my op that was identified by the city and then we also add in additional necessary capital identified by the city and you see where the total rate increases over the 25 year period would increase.

So we added in the next slide please.

So we added in the next slide please.

And then for the third scenario what we added in here was the additional necessary repair and replacement cost that would be recommended over the 25 year period and that would take the total rate increases up to about 90% in the next slide please.

So the total rate increases are look similar between the two between the three scenarios that the bulk of those increases are occurring in 28 29 and 30 and the reason for that is because of no rate increases in the prior years as well as in 25 26 and 27.

And so there's is hard to mitigate some of those additional need the because the rate increases aren't beginning until then and so we're only able to smooth out some of those rate increases and that's why there is a bit of a spike in 28 and 29 and in 30.

So we added in the next slide please.

And so then we also did the same thing on the wastewater on the wastewater side where we started with the status quo and you can see the bar left bar again as you go through the five years here you can see that's decreasing over time that's the ending balance.

So the number of the revenue requirements is just below the number of the revenue requirements that you can see that's the number of the revenue requirements that you can see that's the number of the revenue requirements that you can see that's the number of the revenue requirements that you can see that's the number of the revenue requirements that you can see that's the number of the revenue requirements that you can see that's the number of the revenue requirements that you can see that's the number of the revenue requirements that you can see that's the number of the revenue requirements that you can see that's the number of the revenue requirements that you can see that's the number of the revenue requirements that you can see that's the number of the revenue requirements that you can see that's the number of the revenue requirements that you can see that's the number of the revenue requirements that you can see that's the number of the revenue requirements that you can see that's the number of the revenue requirements that you can see that's the number of the revenue requirements that you can see that's the number of the revenue requirements that

there may be. So I need more of these results and I just want you to encourage us to have some additional�� before the cut through the negatives. And then on the agenda is that there is more or less of a function. So we've been able to do some things with a little help that I mentioned earlier when was going to sell these notice I think you could say a free cut through, as you could say a free cut through the ethical formula. So let's see, let's see.

The more We've increased theみ Logo modelagan dot comN啦 E1 domestic partners consent some continue to look at them. Yes that's what I said was do I listed that had an $ 1 or two shares with stock flat with the cashistically handle that we can maybe receive address if you leave or收 up that's likely to do, and then in most cases theN li4 CAREV percent cash principle. It will deal with that and we're going to get an incentive from the end of the day.

that we identify with the city,

those total rate increases are 172%.

And then when you look at financial plan,

plan, plan, set number three,

when we add in the additional renewal replacement costs,

that goes up to 206%.

When you look at just the total straight rate increases.

So you can see there is quite a difference there

between the scenarios when you add in all the additional costs.

And so with the financial plan for waste water,

similar to water, you'll notice that the bulk of those

rate increases are in 28 and 29.

Again, the main reason for that is because of the several

years without the rate increases.

So we're not able to kind of mitigate those spikes

because of that.

And that'll be a benefit of a rate study

when you do that in the future is you'll be able to tailor

that CIP to what would be a palatable rate increase

for the water waste water fund.

But here when we're looking at what's absolutely required,

what's absolutely needed.

And if you included all those costs,

then you can see the totals are for financial plan

1 to 147% for financial plan 2 that 172.

And financial plan 3 to total be 206%.

And with that, I want to thank you.

I know there was a lot to cover.

Again, it was kind of tough condensing it all into just

abuse lies in a few minutes.

So I appreciate your time.

OK, thank you for the presentation.

We'll take comments or questions from committee members,

Councillor Gareth.

I'll go ahead after public comment.

Mr. Chair.

You want to take public comment?

OK, you want to hear public comment first, OK?

I have no speakers on this agenda item.

Very good.

Thank you, Mr. Chair.

First, one, the purpose of the audit

was to confirm externally from our departments

where the deficiencies were.

So I want to thank the audit team for that.

And for that purpose, I'll go ahead and move the auditors

staff report here to the Full City Council.

But also with some direction in this,

and the good thing is we have our Chair of Law and Legislation

Committee here.

But if I understood, thank you for the briefing

and also to our DOU team for the briefing.

But one of the biggest challenges

is our major capital water projects

that we need to start.

And the pay go schedule for that

creates a significant jump.

That's why we see the 22% increase or even

45% increase in 2028.

And that's due to partly the Water Art Project,

the Second Amendment Art Project.

And so the request here of direction

is that if Lawn Latch with through the policy platform,

where we can have a discussion about our aggressive advocacy

efforts on the proffor funding, because we would be, I think,

a high, the most competitive project in that scenario.

That's probably a conversation for the future when we come here

about, well, how do we actually, when

we do the rate structure, how do we compensate

with the rates reductions if we can land that?

But we have to, I think, land those grants first

before we can do that.

So that's the direction, maybe, to our Lawn Latch

Committee to look at making sure

it so that we can minimize the impact on that 22%.

But with that, I think the auditor did a good job

in verifying and confirming what we knew.

And for those that are maybe wondering,

well, why are we talking about it now?

Well, we started discussing this back in, I think, 2020.

And then in all of a sudden, we went into the pandemic

and the question about loss of jobs and people's ability

to pay rate increases was a big question.

So now we're coming back here to make sure that we are,

having that conversation again.

So thank you, Mr. Chair.

And so that's my motion.

We have a motion.

Do we have a second?

We have a second from the Montes.

Any other comments?

I have a couple.

One is this may not be the appropriate place for this discussion.

But I'm curious whether for water and wastewater,

we have any kind of mitigation programs, subsidy program

for regional sand and other utilities.

There are generally speaking on an income-based approach

opportunities for rent relief, for fee relief.

Does these funds have anything of that kind?

Oh, you want Provonnier, Laney.

OK.

Good morning, committee members.

My name is Provonny Vandyam, the Director of Utilities.

The response to your question is the city

does have a Sacramento Utility Rate Assistance Program,

which assists our ratepayers with water, wastewater, storm

water, and recycling in solid waste.

It's a cross-soluutility.

So it's across the board.

I do believe that my counterparts in regional sand,

Saqsua, as they're called now, also have assistance programs.

But ratepayers would apply for it

through those groups specifically,

but the city does have it.

And if you want to know details on the program

and how much is discounted for our ratepayers,

we can provide that separately.

But yes, we do have a program.

I would be interested in that fine offline.

And I am aware that regional sand has

one of those.

Something to do with it.

And just an additional piece, it's

covered through the Measure You funding, because of Prop 218,

we're not allowed to use rate pay of funding to discount rates.

Thank you.

Did you want to add that?

It's just, it's my turn.

It's my turn.

Yeah.

Thank you.

The other comment that I'd make,

I certainly endorse the suggestion of going

after Prop 4 money.

In fact, I think we ought to be doing that on every single thing

we can think of, by the way.

I'm concerned about the fee increases

that are projected for Prop 2829, especially combined.

And my understanding is that in part,

that's because it's not seen as feasible to do those.

Anything sooner than that in 26 or 27.

It just gives me pause to look at fee increases

that are of that magnitude in that kind of time frame.

So I don't know if there's a approach we can take that's

that smooths this out.

And I understand the financial challenge

of meeting debt service and other obligations.

And I don't know how there's my feel about this.

But I'd rather see more incremental and sooner,

rather than a huge lump in a couple years.

So that's just me.

And we agree with that.

As utilities director, I don't feel like what was presented

today is appropriate to bring to our ratepayers

in the future and to May and Council for decision making.

However, Prop 218 requires us to work through a very detailed

process of establishing our cost of service.

And once we know what the cost of service

is, all the details incorporating everything.

Operations maintenance, infrastructure,

upcoming regulations, then we can decide what more appropriate

adjustments would be.

We will bring all that information to May and Council

for discussion and decide where we finally end up.

But right now, this study gives us a very high level indication

that because we haven't moved rates forward in these prior years

since 2020, we are going to deal with some kind of spiking

because we haven't done it.

And right now, we need the time to go through that cost

of service analysis.

So there's no way to expedite those rate adjustments

because we must comply with 218 in case we're challenged

in the future.

So that's sort of the backdrop.

We will figure out as best we can how we can

phase some of those major projects.

Like Council Member Gera mentioned, the River Arc project

is what would phasing look like?

Would we still meet our goals in terms of having

that available to be able to provide drinking water,

for example, while ensuring that we're not putting it all

in a very small time frame in terms of rate adjustments?

So all of that is going to be part of the study we're

engaging in and it's with Raff Tellus.

DOU will work directly with them as we go through that analysis.

And we probably will bring to May and Council some options

in terms of here are some things we can do.

Here's what it would look like and what

would be the most palatable option to move forward,

always bearing in mind that we have to also consider affordability

of our rates as we go through these analyses.

Well, I appreciate the comments and if nothing else,

at least this work is a wake up on what challenges you're facing.

And of course, that means all strategies.

I think have to be looked at whether it's expense or cost reduction,

alternative sources of revenue.

Before we get to what we have to do in terms of increasing fees,

obviously, nobody wants to do that at all if they can help

but certainly not more than absolutely necessary.

So hopefully the cost of service study can go as fast as possible

because that may make 26 not feasible,

but I'm not sure it makes 27 on feasible.

But then we'll see as you make progress in your work.

Yes.

And I will add really quickly to Councilmember Geras' point,

looking at grant funding.

We always look at grant funding, whether we have rate adjustments

or not, we're always looking at it.

And then all we do is we would factor that into the future.

We would reduce rates because we were able to get grant funding

so that we have an active team that always engages

to make sure we're tapping into whatever's available

to try to offset as much as we can.

Thank you.

Thank you.

If there's nothing else, we need a roll call.

And this one I assume.

Is that so?

Madam Clerk?

Sure, we can do a voice vote, but I'd be happy to do a roll call.

Well, if we can do a voice vote, we'll do that.

We have a motion and a second.

All in favor signify by saying aye.

Posts say no.

Any abstentions?

Motion carries.

Unannocely.

Thank you.

Item three.

Item three is the City Auditors Fiscal Year 2023-24 baseline

funding verification of the Sacramento Children's Fund.

And before you have your City Auditor, Rich Ari.

Yes, hi again.

Thank you.

I'm going to introduce Jordan Swini, who is the lead

on this project.

And she'll do the presentation.

But the recommendation that's before you

is to accept the City Auditors Fiscal Year 2023-24 baseline

funding verification for the Sacramento Children's Fund

and for the Full City Council for approval.

This last year, we did the baseline calculation.

And this is our first year conducting

the baseline funding verification.

And this is something that we're required to do annually

by the City Charter.

So here's Jordan.

Thank you.

Thank you.

Good morning, members of the Budget and Audit Committee,

Jordan Swini, principal fiscal policy analyst

in the City Auditors Office.

So the Sacramento Children and Youth Health and Safety Act,

also known as Measure L, was passed by voters in 2022.

This established City Charter Section 120,

the Sacramento Children's Fund, and required that the City

Auditor calculate and publish the baseline funding

amount by December 31, 2023.

The City Auditor fulfilled this obligation

and calculated the baseline funding amount

to be 22.9 million.

Moving forward, the City Auditor is required to verify

whether the baseline funding amount was expended

each fiscal year.

The objective of this project was to fulfill the requirement

outlined in Section 120 Sacramento Children's Fund,

E1C of the City Charter, by verifying

that the baseline funding amount of 22.9 million

was expended in fiscal year 24.

The scope of the project was City expenditures

for fiscal year 24, or those made between July 1, 2023

and June 30, 2024.

To achieve our objective, we distributed

individualized youth program identification worksheets

to departments requesting they provide information

on programs identified during the baseline funding

calculation last year.

We also requested departments identify any new youth programs

and services offered in fiscal year 24.

Additionally, we gathered and analyzed general ledger data

to support and supplement the information provided

by the departments.

We researched programs identified as potential youth

programs aiming to gain an understanding

of their key characteristics.

To confirm that a program qualified towards the baseline

funding verification, we conducted an analysis

to verify its compliance with the City Charter.

This analysis specifically involved identifying expenditures

from fiscal year 24, net of program revenues,

confirming their source as unrestricted general

fund revenue, aligning the program with one or more fund

goals, and verifying that expenditures did not fall

into prohibited categories.

We maintained ongoing consultations with the City Attorney's

Office throughout this process, seeking their guidance

to enhance our comprehension of City Charter compliance

and its practical application to the test set hand.

All program expenditures counted

towards the baseline funding verification were paid

for from either the City's general fund or the measure

used special revenue fund.

In instances where a program description

did not specifically address a fund goal,

we considered the potential benefits

of the types of services provided by the program

to ensure a fun goal alignment.

We encountered several challenges with youth program tracking

and identification.

For example, as we progressed through this process,

it became evident that in certain situations,

the most appropriate method for determining the correct

allocation of youth-related expenditures

was to rely on management's estimates.

In specific cases, we employed management's estimations

to determine the appropriate distribution of administrative costs

among eligible youth programs.

Additionally, we depended on management's assessments

of youth program participation to isolate and allocate

the youth-related portion within programs that

had a partial youth component.

These estimates were based on available program attendance

records.

It's important to note that we did not conduct

independent audit procedures to validate the accuracy

or completeness of management's estimations.

Additionally, in some cases, departments identified youth

programs with eligible youth expenditures

that were not identified during the baseline funding calculation.

We reached out to the City Attorney's Office

to determine whether the baseline funding

amount could be adjusted post publication.

The City Attorney's Office has applied

that the baseline funding amount is final and cannot be adjusted.

Our Office understands measure L contemplates youth

expenditures as a whole, providing the City the flexibility

to adjust youth programming based on changing youth needs.

Accordingly, any program with eligible expenditures

was counted as eligible towards the baseline funding

verification, whether or not the program was included

in the baseline funding amount.

This slide summarizes the program's amounts and fund goals

counted towards the fiscal year 24 baseline funding

verification by City departments.

It is important to note that the table doesn't encompass

all youth program offerings in the City of Sacramento.

Instead, it highlights those with eligible expenditures

in fiscal year 24 that met one or more fund goals

and fit the baseline funding criteria of the Sacramento

children's fund.

After reviewing the City of Sacramento's youth programs

and related expenditures for fiscal year 24,

we have verified that the City expended

the baseline funding amount for the Sacramento children's fund.

The report goes into further detail for each department

and their programs, including total amounts considered

and descriptions of each program.

Amounts considered generally refers to the amount

of fiscal year 24 expenditures, net of revenues for a program

or group of programs that we consider to be the best

for the fiscal year 24 baseline funding verification.

In some instances, we identified expenditures

that were not eligible per City charter criteria.

Common reasons for reducing the amount included

as eligible towards the baseline funding verification

were due to an ineligible funding source, prohibited

expenditure category, or programs with only a partial

youth component.

Appendix A lists youth programs and services

with excluded expenditure amounts and exclusion reasons.

As the City otters responsibilities established by

measure L require, we complete two annual reports.

We have generated a new webpage as a central location

for the council, management, and the public to have access

to our reports.

So as outlined in the charter, our primary responsibilities

to ensure that the baseline funding requirement has been met.

In this report, we not only verified compliance with the

baseline requirement, but also provided additional analysis

to enhance transparency and accountability.

Specifically, we identified the amount of funding above

and beyond the baseline requirement.

Detailed the total expenditures considered and the amount

included in meeting the baseline.

Catalogged all programs included in the analysis and those

excluded along with explanations for their exclusion.

This approach ensures a comprehensive understanding of how the

city meets its youth funding obligations and provides a clear

framework for future verification.

However, producing a report at this level of detail requires

significant time and resources.

While we believe this thoroughness adds value, especially in the

first verification report, we want to ensure our work aligns with

the council's priorities.

As such, we'd like to seek your direction on the level of detail

and future baseline funding verification work.

Do you find this level of detail helpful or would you prefer a

more streamlined report that focuses primarily on verifying

whether the baseline was met without the additional analysis?

Your guidance is crucial in helping us strike the right balance

between fulfilling the charter's requirements and addressing

the city's overall audit priorities.

I look forward to your thoughts and welcome any feedback or direction

on how we can best meet expectations moving forward.

This concludes my presentation and I am available to answer

any questions you may have.

Okay, thank you for the presentation and we do have one person

who signed up to speak.

Thank you, Chair.

I'm Keon Bliss.

Keon is our only speaker on this agenda item.

If you can keep your eye on the clock, we want to hear all

you have to say but you have a limited amount of time so that

will give you the count down.

Thank you, Chair Dickinson.

I had a few questions when it came to some of the baseline

funding amounts.

I mean, this is obviously a program that deserves a lot of

funding and it consistently has been something that community

members have long been advocating for across the board of wanting

more city funding for youth programs, this is why Measure L was

passing the first place.

I'm just curious about where some of the baseline funding

was that was really a lot of the number of the

number of the number of.

So, I think that was one of the numbers came up, particularly

in the area of the Sacramento Police Department I noted that

there were several programs that were originally considered by

the city auditors as being eligible or considered within the

baseline funding.

But we're added based on what appears to be

the higher amount of baseline funding verified versus the

amount that was considered, particularly for the Natomas Unified

School Resource Officers, which by my read of the program

observation data says that it's funded by Measure U funds but

somehow it was funded.

According to this, it says some staff time is not reimbursed

and is funded through the general fund, whereas the department says

it's reimbursed for the majority of the cost or whatnot.

Same with the Sacramento Police Activities League, which by my

recent review from last year found that not only is the,

doesn't seem to be as active as it was in previous years, but

it also is the page that people can access for the public to

participate in those leagues seems to be outdated by a few years.

So I'm just curious is to why the discrepancy within that

department and what does that actually mean according to the

city auditor.

Thank you.

Okay, we've got a couple questions. Do you want to respond to those?

So related to the police department, and when we conducted

the original baseline funding calculation, there were several

programs where there were not financial records available to

calculate their expenditures or management was unable to

confidently estimate how much was spent.

However, they implemented some practices to where this year we were able to

determine through the financial records and their estimates on how much

was spent on those programs specifically to the SRO program that he spoke about.

The contract does say that the majority of the funding does come from the

school district. However, there is one particular position that

is funded from the general fund that oversees the program.

And so that is the increase that we see in the police department for those.

And as you pointed out, the Sacramento activities league does have a relatively

small amount of eligible funding for the baseline verification.

And so you can see that yes, their activities probably have dropped off.

And that's why you see fewer expenditures there.

Okay, thank you.

Mr. Gatta.

Thank you.

First of all, again, thank you to the city auditor staff here for this.

And obviously when you identify discrepancies and record keeping,

and that's exactly why we do the audits to make sure we do that.

So one, I appreciate the level of detail in this.

I also do want to balance the amount of workload we have.

We've had to make some difficult decisions based on how much

staff you all have and which priority accounts we need to look at.

And particularly some other audits that might require more time too.

So what I would like to do is, you know, is one, move the staff report so

you can get it approved by the council. But also my direction here would be.

And then I think maybe when we look at the work plan is to look at two

levels of specificity. And I would say by the way,

the same, um, um, biannually meaning every other year,

the high detail is specificity, um, so that we can do one of your process

improvement and then do that level of detail.

So that way our auditors can balance, uh, going back in, uh, from other priorities.

So that would be my recommendation chair is that every other year we go through this level of

specificity. And that way it gives us a year process improvement,

and it gives us a lot of help and we're going to do that as well.

So that's a big step for auditors to focus on the other audits that we'll be discussing as well.

So I'll move this item to the staff report and, uh,

and then give that direction to the auditor as they look at their work plan for the next year.

We have a motion and a second and is maple.

Thank you chair. I appreciate it and really appreciate the presentation.

I agree with my colleague that, you know, I think it's a lot to do that every year.

I'm going to have to do that all the time, but there's value in doing it.

Maybe every other year so that we can make sure that we're, um, we're checking against that.

One of the things I was curious about is during the detailed audit,

do you, does anyone, do you go out and actually view any of these programs to see how they're working, um,

recognizing that it would be challenging to go to everyone, but just like pick a handful and see how they work,

is that ever part of the audit?

So that hasn't been, um, part of our process so far, we've done, you know,

the verification once and just the baseline funding calculation, uh, one time as well.

Uh, per the charter, uh, what we need to do is basically be looking at the financial records,

um, looking at the program, uh, to me would get more into, um, potentially like effectiveness of programs or efficiency.

Like if we were doing that type of audit, that's where we would take those types of like field work steps.

For this one, it's more of a financial analysis.

And so that would be at the direction of council because the, it's not required per the charter to do that.

And so again, it just becomes the priority in, um, resources and whatnot.

Um, for this specific project, one of the big challenges is that we, the books for the city don't like close and, you know,

have the external auditors auditors, um, audited figures until late November, early December.

And then we have to have this published by January 15th.

So it's a very short turnaround time for us, um, with a small office and the holidays.

And so we do start early, even with preliminary numbers, we work collaboratively with all the departments.

I actually would be very interested in seeing some of these programs because reading about them, like they're, they sound pretty cool.

Um, but so far that has not been a step that we've taken.

Really helpful. Thank you.

And I recognize this is pretty limited in scope and what this actual audit is.

But, um, personally, just an interest of mine.

And maybe I, you know, I'll bring this forward to the full council to future date, but would be interested in the future.

I was taking a look at how these programs work.

The efficiency and effectiveness of these programs because I think that, um, that's our duty to overtime and making sure that as we're allocating these funds,

we're also constantly assessing whether or not they work well and they're achieving their goals.

So thank you very much.

I really appreciate it.

Sounds like another potential audit request.

Yeah.

I think I'll have a full work.

Thank you.

Thank you for that.

I have a, well, before I get to my question, I would, I would endorse, um, at least the every other year.

My, my preference actually would be every year, but I understand that workload challenge might, might be difficult to accommodate.

So I think at least every, every other year with the level of specificity makes, makes sense.

Uh, my, my question is, uh, the basis for the termination by the city attorney, the baseline funding was final and couldn't be adjusted after, uh, December 31st.

I don't know if that's a question you can answer or if our council is here today can answer.

Can anyone answer that one?

So, I think it's in the charter provides the as of that date.

There's no process in the charter section 124 coming back and revisiting and readjusting that amount.

So, so, had they on January 1st discovered, oops, we missed that and we really would like to conclude it from the city attorney's point of view that would be precluded.

Well, I think there's always a rule of reasonableness to be ready into that kind of process, but I don't think that's the position where, or kind of the scenario we're talking about if I understand your question correctly.

Well, my question really derives from the desire to get this right, you know, to have a, as accurate an assessment, a calculation of the baseline funding as, as we can have, because I think that's important for the implementation of, of measure L and, and consistent with its purpose and intent.

That it just struck me as curious that, and I wasn't quite sure why, but I understand I stand your answer.

And at this point, especially we, and not to get too into the weeds here, but when we had the discussion with the orders office, there were several factors that mitigated against going back and looking back at a certain point in time.

So for now, or what were 13 months past when the calculation was, and there are certain considerations that have to be taken into consideration.

If you go back, there's a level of reliance that's been placed upon this number in the budgeting of city programs and departments and their budgets.

And so recalculation or reassessment at that, at this time, creates some reliance and consistency problems.

So it's a, really, you're drawing the line, you need a point at which there's finality.

And that, that, yes, that, that was all, like I said, there were several factors that lead to the conclusion that, especially at this point in time, that number is essentially set in stone.

Thank you. Thank you for that clarification. Any other comments or questions? If not, we have motion by Council Member Aguera, and seconded by Council Member Maple to accept that.

Accept the audit and forward it to the Council. All in favor signify by saying aye.

Aye.

Opposed say no. Any abstentions? If not, motion carries. Unanimously. Thank you.

Thank you.

Next item.

So chair your next item is City Auditor's fiscal year, 2324, audited cannabis business operations tax amount for the Sacramento Children's Fund.

You had such fun your bank again.

I know. That's so hello, good morning again for the record Jordan Swini, principal fiscal policy analyst.

The recommendation that is before you is to accept the City Auditors fiscal year, 24 audited cannabis business operations tax amount for the Sacramento Children's Fund and forward to the full City Council for approval.

This is our first year auditing the Seabot revenue and the City Charter requires that we audit this number annually.

So the second, as I stated before, I'll just run through this quickly.

Measure L was passed by voters in 2022 to establish City Charter Section 120, the Sacramento Children's Fund and has a requirement for the City Auditor to publish an audited amount of Seabot each fiscal year.

Then the general fund equivalent of 40% of the audited amount of Seabot is allocated to the Children's Fund.

The objective of this project was to fulfill the requirement outlined in Section 120, Section C to the Sacramento City Charter by publishing an audited amount of Seabot for the prior fiscal year.

We determined that contracting with the City's external auditors would be the most efficient use of resources to complete this audit.

As such, the external auditors completed the audit and accordance with generally accepted auditing standards and government auditing standards.

The results of the audit show that for fiscal year 2324, Seabot revenue came in at 23351,809 dollars.

And then during the budget process each year, the City makes an estimate of Seabot revenues and budgets and amount equivalent to 40% of the estimated revenue to be transferred from the general fund to the Children's Fund.

Then during the fiscal year end process, the finance department performs a trough to ensure the contribution to the Children's Fund reflects 40% of the actual Seabot revenue for that fiscal year.

So the numbers on the right side of this slide are showing what happened for FY 2324.

So the estimated Seabot revenue was approximately 22 million and therefore approximately 8.8 million in general fund dollars was contributed to the Children's Fund.

And then the audited amount of Seabot revenue was approximately 23.3 million which was slightly higher than estimated.

And therefore at the end of the fiscal year the finance department did a trough to contribute approximately 550,000 more dollars to the Children's Fund.

And that total then for the contribution to the Children's Fund for FY 24 was approximately 9.3 million.

And again, because we have two reports now annually, we have this new website where you can find them for Council Management in the public.

This concludes my presentation. I'm available to answer any questions you may have.

Thank you. Anyone want to speak on this one?

Chair, I do have one speaker on item 4, Lambert.

Good morning.

Keep an eye on the clock so you get everything in and your time.

I've never been cut off. I actually should get a check from the city for not not only being cut off but not using profanity.

The audit which I studied that report before I got here, there's been a lot of controversy towards core members.

And when they take these courses or whatever they have to do to meet the criteria, that's a lot of money.

23 million dollars. I'm trying to figure out did that come from the high taxes they have to pay? They have to pay enormous taxes.

And then when it says Children's Fund, what children does it apply to?

When they go to Grand High School who's winning championships and bringing tremendous recognition to the city, there should be to me when I hear audit.

And that's why I'm glad to see Chair Dickerson over this.

When I was in college, there was no discrepancy when it came to an audit. When it's an audit, it should match.

There should be no, well, it's too much work or whatever, if you're too much work, then pay them more money or hire more people.

But there should never be a discrepancy when it comes to an audit.

I'm in the cheesecake business. If there's a problem with an audit, you could best believe the IRS will be calling me on an audit.

So whenever there's the word audit, there should never be any discrepancy.

You have measure L, which I voted for, you have measure U, but then there's shenanigans going on. You'll mix measure U and department, the general fund.

There should never be a discrepancy with an audit. That's why that word is peculiar to me.

Structural deficits. That's a very peculiar word.

Thank you for your comments. I have no more speakers.

I'm not sure we have a discrepancy. If I understand, you had a budgeted amount, which is based on an estimate of what the revenue would be.

And then when you actually did the audit, you came up with a somewhat higher figure.

So it wasn't a discrepancy in the audit. It was a comparison of the budget, the estimate, to what actually was accounted for when you did the audit.

Correct. Okay. Okay. I don't think we have anyone else signed up to speak. Any other questions?

Oh, I'm sorry. Councilor Maverick.

Thank you, the auditor chair. I'll move the staff report, but as I have in the past, and we'll continue to say that I hope that the use of the children's fund, I think Mr. Davis mentioned it appropriately.

Should also go to the areas where most of this tax revenue is generated.

And I know we don't do proportional tax contributions, but the fact is the district two and district six is where the largest amount of cannabis permits are located at.

And yet also where the highest need is that as well, too. So I trusted the the measure, I'll commission will work with the city to make sure that the communities of at least in district six,

Avondale, Glen Elder, Southeast Village, that are adjacent to the power and court are are equally represented in that. So good point, Mr. Davis.

Thank you. Thank you, Mr. Chair. With that, I'll move the staff report.

Councilor Maverick.

Thank you, Chair. And just thank you so much. I know that this is an iterative process and really looking forward to seeing hopefully a continual growth.

But I just I think it's worth acknowledging that we've heard from a lot of our cannabis business operators in the city and beyond that they're really struggling right now and that we I think need to keep that top of mind as we look forward.

And it doesn't impact the work that you're doing necessarily on this audit, but it will impact eventually I think the programming for the children's fun if we can't find ways to better support the industry and help them.

And I think one of those things that we should all keep an eye on as a body and our interim city manager just was talking about this is there might be efforts at the state level in terms of producing some of the state excise tax currently set up 15%.

And that's one way that could really help benefit some of the local businesses who are struggling under the way of of those taxes, including that and the local taxes.

But just thank you so much appreciate the work and we'll keep an eye on it as continues.

You like to keep the pattern going and second to my motion.

Okay.

Well, I think a couple things about this one is that certainly a topic that needs discussion clearly, but to the to the comments that councilmember get our made.

I think it's a combination of not only where the where the money is generated in terms of geography, but where's the need?

Where are the where are the communities that have the greatest need?

And that gets in my mind directly to the equity question that's not a question of an audit.

That's a question of what the commission does, what the council does, where we where we concentrate our programmatic efforts.

And I think that's likely to be a lively discussion, but but a necessary one for the future.

And I would say yes, there is money going into into Del Paso Heights and into grant as a school, the high school and in the vicinity absolutely.

So that's that that is a part of the fabric and Ms. Tom Monty's.

Chair, I think it'd be wise for when these two reports come back to council to also agenda is an item with some of the follow up questions and concerns that we had from last year when we discussed the children's fun.

For example, geography was a big one like are we going to be using equity lens when we do the contracts.

Is it going to be on the staff report that the funds being used as a children's fund?

I'm meeting about it last year, but we're a brand new mayor and council.

So maybe when you bring this to council, we added third agenda items, so maybe direction to the city manager checking with the mayor.

I would only I think it's a great idea. I just think we should let the interim city manager figure out the timing of that.

So that where it fits in concert with this great if it's.

Definitely a different time, but but the discussion would be I would appreciate absolutely.

I just think we have a new mayor and council and these are really important subject matters and it's kind of piggybacks off of council member gira's question.

All right, we have a motion by council member get a second by council member maple to accept the audit and forward it to the full council.

If there's nothing further on favor signify by saying aye.

Opposed say no and any abstentions hearing none. Motion carries unanimously. Thank you again.

So chair remove on to item number five review of proposed prior year savings guideline policy.

All right.

Wait wait wait wait. Good noon. Good noon.

I like that chair.

Good afternoon chair committee members and members of the public on p colito the finance director for the city.

And what we want to bring for your consideration today are some policies regarding the use of prior year savings.

And this really flows out of the conversations we had about the fiscal challenges facing the city during last year's budget process.

The biggest and most immediate is our structural budget deficit will be talking more about that with the committee throughout the process.

But you know just as a reminder our budget issue isn't a drop in revenues.

It's a fundamental imbalance in our rate of expense growth outpacing our rate of revenue growth.

And it's something that we began to address with the current year budget and will address more in the budget process for the budget year.

And the other challenges are that we're underfunded in our economic uncertainty reserve.

One of the strategies we used to balance the budget this year was to suspend contributions to the UR which has put us below our council minimum.

And then we have unfunded liabilities.

And this was the graphic we used last year during the budget to talk about them.

We have a high R substantial we have 1.6 billion dollars in pension and OPEB which is retiree health care.

Unfunded liabilities and we identified 1.4 billion dollars of unfunded capital and deferred maintenance needs over the next five years in our capital improvement plan.

And you know again we're not alone this is something that we see throughout the state and throughout the country.

And we have a lot of things that we do that when I talk to my colleagues they're also grappling with.

And it's also not an insurmountable problem.

So we promised during the budget last year to come back to budget and audit with some policies for consideration to begin to address these problems and address them over time.

And so we're recommending a policy to utilize our one time prior year and savings to pay down these unfunded liabilities.

And we're announcing that with recognizing we're an instructional budget deficit.

So we don't necessarily want to put money away in a reserve only to have to cut that amount in the following year.

So this is very wordy and I apologize for that but what we're really proposing is a three priority system.

To the extent we have one time prior year year and savings the first priority would be if we're forecasting a deficit in the budget year that we the first use of those funds goes to close that budget deficit.

The second priority once the budget deficit is closed or if there isn't one we would restore the economic uncertainty reserve to the council policy minimum.

And again that's 10% of general measure you funds and not the target just the minimum.

And then once those two conditions are met the third priority would be to take one third of the remaining funds and put them into a new account to address our unfunded pension liability.

One third into a new capital account to address our capital and deferred maintenance needs and then one third available for other one time uses.

So these are made up numbers. This is a hypothetical situation just to really illustrate how the policy would work.

I picked the numbers because it made the math easy but in this situation we would have 20 million of prior year savings.

A five million dollar projected budget deficit and an EUR balance that's six million dollars below the council minimum and you can see of that 20 million the first five million goes to budget balancing the next six million goes to restoring the EUR and then three million each goes to those other uses for the third priority.

Oh sorry. So what are some advantages? Well one of the things that has gotten us into this structural budget deficit is that we have taken on increased ongoing spending and in past years have used one time resources to pay for it and that's really put us out of balance.

So this will align one time funding sources with one time uses. It will provide funding to address some of our critical infrastructure issues the longer we have discretion on when we address our capital needs but the longer we put things off the more expensive they get and the more we risk critical failure.

So it will stabilize and enhance the city's fiscal position over the long term so just to kind of give it an example of it we pay off we make a payment on our unfunded pension liability every year.

So the pension payment to CalPERS is two pieces what we call our normal cost which is just you know the cost for all our employees and then our portion of the unfunded liability.

So in this fiscal year we have roughly a hundred eighty million dollars budgeted to pay CalPERS. 70 million of it is for our quote unquote normal cost.

The rest is for our unfunded liability so our unfunded pension liability is just a major drag on our budget and the more we can be proactive in addressing it the better off we'll be.

And kind of related to that is policies like these are viewed favorably by credit ratings agencies and so as we're contemplating how do we you know one of the tools in the toolbox to address some of these capital issues and capital needs we have is debt finances.

And as we think through that you know as council looked at the waterfront plan at the end of last year the better our credit rating can be the lower our bar and cost would be this will also it will keep our flexibility around meeting our budget balancing needs so again we're not putting money away just to then go and cut services.

This will continue to allow complete council discretion to appropriate any ongoing fiscal surpluses so you know we're in a deficit right now but we will write the ship and ultimately we will have surpluses and then council through the budget process can look to allocate those to meet community needs.

So again we are bringing this for consideration of the committee review and consideration by the committee and we're happy to take any questions.

Thanks for the presentation and unsurprisingly everybody wants to talk do we have public comment on this by the way.

Thank you chair I do have two speakers on this item Henry Harry and Lambert.

Thank you sir are you just quickly the gentleman was talking about that we are going to write the ship and that we will get back to having some surpluses and that's what my concern is I believe that discretionary spending on some feel good projects is what has gotten us into a part of this problem and so when we look at I guess this I guess

is number three in the agenda and it sets the policy where if you can achieve some savings two thirds go or dedicated to paying some stuff down and one third becomes discretionary spending and when we're in a multi-year budget crisis I think you have to resist that temptation to go for this discretionary spending again that's I think that's what got us in trouble now and so I think you have to have some budget discipline and say

if we achieved some savings we have to direct it and lock it in the box and keep our hands off of it the last thing I'll say is if you can achieve some some savings instead of spending on some feel good projects you have places like a CV circle that continues to generate climb I'd rather see that money dedicated to the police department to save lives, suppress crimes and

crimes, suppress crime so thank you. Thank you. Thank you.

Is there a person that's the native of Sacramento when I hear terms like hypothetical and they're not exact and things that's how you get in trouble financially.

There should be no hypothetical when it comes to finance. How about this one for the roster and everybody up there that's not paying attention and looking at their phones and talking to people that's another reason why we're in trouble we end because people are not listening to people who really care about the city.

How about this and I'm the one suggested this those who are working remotely should not get a raise what's the raise for you they don't lose their job but they get a raise so when you when I hear a report talking about a pension who wouldn't want to work remotely and get a raise I mean that's staggering to me I bet you if there was an audit on not giving

anyone to raise maybe minty cup so she could be at home for four year hiatus because I saw her sitting in the chamber during the pandemic that's tremendous integrity and I bet you she can operate this from home and a lot of people on the roster had problems operating this and they were being paid to work remotely.

I think working remotely has become abusive people should not get a raise working remotely they had a study I think it was on 60 minutes they followed people who worked remotely and they saw women taking their children to school in their house clothes but then before the pandemic they were dressed because they had to go to work and guys too.

Thank you for your comments. Keon Bliss will reserve finals speaker on this item.

Thank you council. I think that it's important that we have a long term sustainable policy when it comes to addressing prior or savings that come that come up within the budget.

I think this should be a matter of course and it should be publicly transparent of what savings from each department actually come into that which I didn't really see within this I just saw about how this funding is actually going to be used and while I understand the need to I really be thinking within the long term of budget planning and session when it comes to like putting away our economic uncertainty reserves.

It seems a lot is placed into prioritizing the efficiency of government rather than really addressing or listening to the needs within community within this as well as the prioritization of what's those savings ultimately go to a lot of it seems to be like one time uses where there are more media priorities such as people like such as the ongoing housing crisis and then maybe potential future pandemics which will be the last in line.

The last priority compared with just ensuring a balanced budget but also to I didn't hear anything about dressing whether like the transparency within those savings because one of the things that I noticed in the last years budget was that we learned from during the conversations that the Sacramento Police Department allocates any savings that it has in his budget automatically to overtime expenditures which by my analysis the city is paid no less than $158 million just in over the years.

$10 million just in overtime since 2012 and that's a like that to me makes me question if the police department is able to just automatically allocate that and the council didn't know about it what other departments potentially to doing that I think the city like the fact that we spend the most on the Sacramento Police Department alone should be something that we ultimately again and demands priority transparency policy with.

Thank you for your comments.

Thank you.

I have no more speakers.

Thanks.

Okay.

Council Member Getta.

Thank you very much, Mr. Chair.

Maybe Pete or Interim City Manager.

How do you see the policy practically working out?

Is there an expectation that we wouldn't have a mid-year budget and there'd be an automatic follow-through or what would happen after the Act for the approved budget?

What's the policy on this?

Yeah, so I can take a quick stab in the Interim City Manager can add to it.

So we would bring in, we would bring the prior year savings with the Act for every year and we would do that.

So to Mr. Bliss's point we don't have the actual savings in this presentation that's going to be coming to your committee next month and you'll see the department, you know all that information will be there.

But so assuming the Act for has some, says hey, you have some available fund balance, it would then fall into these priorities.

And so, you know, this year right now we have projected a very large projected deficit and so if Council were to adopt this policy, any year and savings that we have from last year would go to balance the budget.

When we're in a more stable situation and you get down to that third priority, yeah, a third would automatically go to a pension account.

We would suggest probably a 115 trust with CalPERS, a third would go to capital and a third for other one-time uses.

So, Council can have that discussion about how to allocate those, you know generally my hope is that at some point we are able to discuss our capital funding needs and you know get some priorities and then that capital account would be one mechanism to fund those things.

But yeah, it would be part of that mid-year process when we come back.

So you're not, because when I read your policy here, the actual just the white page you're on the last page, you're not, there's no expectation here that the Council is giving then the administration, the authority just to automatically move those dollars.

It's with the approval of the Act for.

They're twofold. We have a charter requirement to come with you and do a current year update and we will always do that.

And there may be cases in the current year where we're going to need some of those resources simply to close the current year.

So sales tax right now, we're looking at and how will that affect our forecast for the current year.

So it is not automatic and it will always come with recommendations but the purpose of having a policy is that that will be what we bring to you is consistent with your own policy.

Thank you. Thank you for that clarity because that's my concern was and there was one where the city manager did not bring a mid-year budget to the Council and that was that that was inappropriate.

So we will. So that's I think that's important. So one. So I think this is a good at least for the sake of also giving the Council expectations on okay.

How are how are what's the biggest need and where are our distributions. But one thing that I've brought up before and it doesn't have in this that if the Council is going to be presented with.

So here's our gap. Here's both on the budget on the budget deficit or the reserve or even the capital outlay.

It our our singular focus for a long time has only been on the expense side and we haven't discussed in depth as much as we need to.

I'm not saying that it's not occurring within our departments and I'm not saying that our departments are not doing that.

But when it comes to the Council there hasn't been a conversation on what's the proactive revenue side.

So I'm willing to move this policy forward knowing that this will come to the Council each year for approval on the funding priorities.

But to add a section here a 3.3 that says that that you know that also recommendations or policies on strategic investments.

But there are these opportunities for strategic investments should the Council use this one time money on those strategic investments or put them into capital infrastructure which may lead to strategic investments.

If we don't have a sewer line or a water line in a place where we can develop then that's not going to yield any increased property tax or sales tax revenue.

So I want to make sure that that happens because what's occurred in the mid-year budget it's given the Council an opportunity to think about what are some strategic needs before we get to the traditional budget fight where there's a lot of noise and the reality is during the budget conversations we sometimes can't have those specific discussions.

So that that's that will be my motion to come back to when it comes to the Council and I'll give staff the ability to kind of work that that that staff come back with recommendations on available strategic investments that look on the positive side on the revenue side.

Let me ask a clarifying question if I may would it work on the third priority under the one third discretionary one time uses to add languages that including

strategic potential strategic investments.

Yeah that's fine I was looking at it in that sense but the the at least as I understood the staff report here the presentation and this can be worked out between now and the Council is that if if there is a funding gap that we don't even look at strategic investments because we have to

fill the funding gap first then the EUR and then we look at strategic investments.

But you you okay maybe I miss misunderstood where you were going with with this you actually would like the consideration of strategic investments to be part of the first priority consideration.

Always yeah yeah because we need to balance like okay if we're not looking at ways to increase our revenue then then between insurance costs

inflation costs all of those issues are costs are continued to escalate but our revenues are are we doing anything to change the trajectory of our revenues so that that's my concern.

That doesn't say strategic investments mean I mean that that says look at ways to increase your revenue to me.

Maybe you're using it in that sense. Yeah I think it's I think it's what you call it what's the word.

We're talking the same thing different words.

Okay. Oh I'm sorry I missed element.

Actually I was going to ask the same question chair so Council member Gara are you looking at it as like a third priority as a one third or are you looking at it as a first priority.

I would I think what's important is that the council be presented before the budget a list from economic development on here are the things that could yield revenue.

To be considered at the same time that's I think that's it and so and if we and if the if this autopilot is the way it's presented is only going directly at just.

Those scenarios then we'll never get to are we doing something to increase our revenue.

So I just a clarifying question so my understand I want to make sure I understand so it would be a net positive return on investment to the city.

Correct are those things and so that can be one.

Correct and so the the motion is to add that to the fight first priority basically so hey it goes a bunch of bouncing on net ROI.

Yeah that's what I hear I hear add to the first priority consideration of investments that may lead to revenue enhancements.

Yes there we go that's better in the in the budget year in the budget year or no.

I think well it'd be hard to say the budget because of the way we calculate or get assessment.

That would be hard that that that that that would be a significant constraint I think actually so is I think it's just that would lead to revenue enhancements.

Did you want to add something I think I'd like to propose a bit of something in between which is that it comes as proposed as prioritized but what comes with it is a companion if available.

If there are any projects that would have that type of thing and council can make the decision at that time to divert from budget balancing to that type of investment.

And so it's a little bit on the natural but gives that pause when it comes to consider those things so we sort of how good with that.

I'm good with that because the council could always decide no you know what we need to just focus on the budget gap and the EUR period.

Or not proven enough or not in a quick enough period of time or whatever the things we weigh.

Yep.

Okay and we will.

Wouldn't necessarily be a project though right it could be it could be a tax measure it could be.

Let me we consider all of those things always as part of the current year and the budget year development so that will always come those things will always come so I think what council member is actually referring to is something that would be project or program specific versus it because it's one time money.

Because we're going to always help you with options to develop revenue sources that are not project necessarily based.

Okay.

You still have the floor.

Yeah.

It sounds good.

I mean with our budget deficit the only way we're going to be able to exit this is by growing our revenues so it means it makes sense.

I just want to make sure that there was clarity for the staff just because we need to balance the budget first and foremost and if somehow hypothetically we have any left or

refunds that'd be a blessing for us but I mean it'd be great to be able to prioritize that but I mean just looking at different maintenance it's just we have a lot of tough issues at hand here and it's going to be a really honest.

A frank conversation here on the dius as we navigate this budget year but I just wanted to say thank you for putting the word hypothetical.

I just didn't want to make it really big and when I had my briefing last week I was like I need to make sure that the people sacrament I know that no we do not have 20 million that we're currently deciding how to use it is hypothetical in the case that we have 20 million dollars.

So thank you for doing that.

And then I was going to mention that today we're having our state and federal policy platform on consent at 5 p.m.

and I know part of that is you know pension obligations and so that's something like you said earlier every single jurisdiction in the state of California is facing this problem and we need help as a jurisdiction with with it and so as we navigate this just direction of Consuelo who does all our governmental fairs things just here earlier to please keep an eye on that and see how we can get some support from the state level.

Thank you.

Council member Mape.

Thank you chair and appreciate the presentation and the proposed policy.

One question and thank you council member Talamontes for the hypothetical that was also in my mind actually really appreciated it because it helps illustrate for me what does this actually look like versus you know having all the words in the paper in the staff report sometimes be confusing.

I think it's helpful for the public to visualize you know hopefully in future years when we are flush and things are going well what could that look like so thank you.

And then also wanted to make a note as it relates to Mr. Davis as it relates to remote work and pay those are considerations that are done through our labor negotiations and contracts so between the city's negotiators and our labor unions and so interesting ideas and but definitely something that's a little bit challenging to do just to to legislate.

My question is I know you mentioned this related to credit readings what is our current credit reading.

Where are the second highest rate lady.

We're doing well and I just I just bring that up because I thought I thought that was true and I couldn't I couldn't remember off the top of my head so thank you.

But you know it is being one of the key drivers or decision makers who are what why this could be a beneficial policy you know if we were to institute this do we think that you know that we could then bump up to the highest from the second

highest and what could that do relative to our ability to get better rating.

Yeah they'll the credit ratings agencies will look at a lot of different things one thing I will say is in my previous jurisdiction we went out we were second highest rated with one of the agencies triple

I with the other two and we were going to go out for an affordable housing bond and so we went back to the ratings agencies with some new policies are updated financials and one of the things that they had cited is the pension unfunded pension reserve in among among among

other things for upgrading the ratings the credit ratings as far as a financial impact that's something I would defer to John just on kind of what is this spread right now in the market but it does generate a savings.

Okay that's really good to know and maybe I'll touch base with him prior to this coming to the full council because you know I just want to make sure as you know we're weighing this decision if that's one of the key items that is in our in that decision process

and make sure does it have a real impact like for example you know if we can go from a double it or triple your you know are we going to see a major savings in terms of our ability to get a better loan or is that kind of negligible.

So thank you for that and I'll just speak more broadly you know when I first got my briefing and thought about this policy my mind went two ways one way was of course this council members elected leaders we get you know our constituent we get members of the community come and some of them are in this room right now

who come in and are constantly reminding us of our duties to address issues that are coming up in real time right the things that we can't even think about but we don't know are going to happen a year from now or five years from now are things that we're eventually probably going to have to address and having flexibility to do that is really top of mind for me

and I think that's part of the reason that is why we're here and and entrusted by voters of Sacramento to do that work but I also realize that these are big problems that we're not the only jurisdiction that's facing this we have pension liabilities that are that are

massive we have deferred maintenance we hear this a lot from our public works department for example and so those are really important and I think it's a good thing to have a policy in place that says hey these are our priorities we want to make sure that we're doing this in a way but still give us that flexibility so I really do like what you proposed councilmember Guerra and I'll be supporting that today and just think this off.

Thank you. I think that the proposed policy makes sense and the addition is fine with me we'll just craft that language a little bit to make sure that we're communicating what you want to do and what we all embrace.

I did have a question just that struck me you use the phrase if I can find it net positive year end budgetary results.

Which suggests there are gross positive year end budgetary results and if that is true what what is the difference between the two sure so there are policies council has adopted over time so for example we fund our op-ed trust with vacancy savings so a portion of that would go to the op-ed trust and there are some others as well but.

Give one other example we take money in on a federal program for reimbursement for Medicaid transports and that money can only be spent on the fire service and additional ALS so that is put in reserve for future fire service expenses and then we use it as required by law so that that would be a gross but we have to move it by virtue of our requirements to spend only on particular things.

So your net really means net of other obligations correct your net available fund balance the one you just cited is legal is a legal restraint the one you cited is a policy choice Pete is that right so why wouldn't just hypothetically why wouldn't that be in the mix of what the council could consider in any given year in a deficit in a deficit.

Council has considered every year they have by virtue of the budget resolution already made the decision to do that so we wouldn't go back and undo something that was already approved by council and it's done in yeah council considers it in early.

I'm sorry so the council has adopted a policy position to do that correct.

I adopted an actual resolution providing direction staff to do very explicit things and so we implement that as part of the year and process and so they that those and those things that we are required by law we don't actually have a choice we implement those for the year and process so.

Okay for the policy choices if I could get a list of those I'd appreciate that.

So in wertree a lot of these questions that we're getting because we're getting a number of questions from council members around the budget so we're treating them as SBI's supplemental budgetary information which we provide to all council members just because I heard I think yeah I'm not I didn't mean yeah exclusive I 100% I just I'm not aware of what those decisions may have been in the past so.

The others may have memorized I don't know no I just want to make sure all the council members know where share with all share with all that it should be standard practice actually I think okay so we've been a motion by council member get over that and we're going to add language under first priority.

So that we will include a list of revenue positive projects or programs with whatever we bring back to council whenever we bring it back to council.

We'll work with that okay so we got the sense of it and there's a second to the motion.

Okay second council member tell them on to send the other comments or questions if not all in favor signify by saying aye I post they know and absentions hearing none motion carries unanimously.

Good afternoon.

All right we'll get one more.

All right good afternoon again.

I'm Martha Lassentizo our budget manager is going to give the presentation but I did want to start off I know there have been a number of executive orders that have come out that are impacting federal spending which comes to state and local government so I did want to let the committee know we're working with the department on you know a list of areas where the city would have exposure both via direct federal funds or grants as well as the federal funds.

There's a lot there's funding that is federal and origin but goes to the state before it then comes down to locals and so we're developing a list of all of those things including you know unspent grants from prior years and things like that.

So we have kind of the gross exposure I know there was another memo that just came out from OMB kind of narrowing the scope of last night's executive order but we don't you know these things are going to kind of come and go and so we would we want to have a list of everything and then we can you know judge what might be at highest risk and we'll be providing that to to the council so with that I'll pass it off to them.

Thank you.

Thanks Pete. Good afternoon chair committee members again my name is Mourthalis and Tiso I'm the budget manager and I will walk you through our fiscal year 26 budget update.

So we're going to go over our survey results we're also going to give budget status on what's going on through our process and then a comprehensive budget calendar of what to expect for the remainder of this fiscal year.

Okay so last year of budget survey what to determine the public's opinions on budget and reduction priorities was conducted for one month from December through March in last year's comments back to us many community members felt that the period that the survey was open was too short and should have been conducted earlier in the process.

Therefore the city launched this year's budget survey for two months in September or in the September through end of November and and we translated into five languages like we did last year it was communicated on social media cities news websites neighborhood associations and other various platforms to get the word out there for the public to take the survey.

This year we received 813 responses and the top priorities remain public safety homelessness housing and fiscal sustainability which were the same priorities from last year's budget survey.

The went asked on whether the city should increase revenues reduce expenses or do both the top response was to do a combination of revenue increases and expense revetions.

So in order to dig a little deeper into the public's top priorities we asked them to rate specific strategies under each priority of with for being very important to them and when being non-important at all.

So under public safety pedestrian and traffic safety and lighting in public areas were the top two strategies scoring over three for the homeless policy I'm sorry priority linking the end house population to county services.

In the end of the year we have a couple of examples of the top three strategies for the housing and the housing requirements were the highest but none of the list of strategies scored over three and for fiscal sustainability approving policies to address long term liabilities and mandating that feature your budget for a cast or balance or the top two that scored.

In this slide these are the top five expense revetions that the public felt should be considered the details provided from the public's top four priorities gave the city insight to what the public felt was important. However there were mixed messages after reviewing the rankings of the top five expenses as shown.

That includes the police department homelessness programs climate programs capital projects and general government services so as you can see some of the top five expense revetions were included as priorities from the public so you know there's definitely some some different thoughts on how the city should be spending money.

The all the budget results are included in the attachment of the staff report and that's available for everybody to review.

So this is just going to give a quick update on our budget process as mentioned in the prior budget audit committee meeting the departments under the city managers direction were working on reduction strategies to hit their 15% target strategies have been submitted and the finance staff are currently reviewing all

strategies so as shown in this table the 84 million target in potential potential reductions can reduce the entire 77 million deficit this along with other citywide strategies that we're working on will create a bigger list of reductions to provide counsel with various options.

So our team is updating revenue and expense projections which will be presented at next month's meeting and we hope to have half six allocation by that point.

And then excuse me has requested also in the previous budget audit meeting this is a much more detailed budget schedule that shows like what we're going to be doing for the

remainder of the fiscal year right now we're doing the budget audit committee excuse me that has the budget update survey results and financial policies next month we will go will do the financial

update will do the revised forecast and talk about the budget gap in late February to early April excuse me.

Apologies okay let me move forward so in late February to early April council will be hearing department presentations much like what we did last year where the assistant city

was talking about departments and then also departments come came to talk about their their organization and the budgetary impact of what these reductions will look like in late February early March we will release all the available reduction strategy so that includes all the

departments and the city wide ones as well.

Okay and then at the end of April just due to what is stated in charter we have to release our proposed budget and in May and June is when we'll have all of our

briefings and discussion on the budget and adoption would be held hopefully on June 10th so that concludes my presentation I'm here for any questions or discussions.

Thank you do we have members of the public who wish to address us.

I have six speakers five speakers on this item first is Henry Harry Michael Andrew Barnbaum Keon Bliss Teddy George off and Lambert.

Good afternoon good afternoon again thank you these are just some bullet point thoughts from looking at the presentation so we really have a lack of people here so hopefully we can get this out to more folks.

I think there's a little bit of a flaw in how some of this information is presented to you and the chart ranks some things like climate diversity and creative economic development against police and law enforcement and I think if the people don't know the details of each one of those programs and you know how can they make a good decision as to whether

they're not that's better or worse than law enforcement they don't know what the details are in say the diversity or economic development.

Another thing from the timeline between today and February 25th there's some dead time that's a great opportunity for the mayor to maybe stand right here take Q&A from the public and really get us up to speed on what you guys seem to be describing as you know a multi-year budget crisis.

When we look at crime in the city I want to stress that hopefully we make an opportunity and make sure that if other areas lay off officers because of their budget mismanagement maybe we can have that opportunity to get some qualified officers who are Academy train already have experience on the streets so that's something I'd like you to consider and then lastly in each one of these departments when they make their

presentation when I go on the website I think it would be really helpful if we had a photo of the department head we knew what their budget profile was how many people work for them.

And what amount of pay they have so that would help me on the website thank you.

Okay thank you.

Next speaker is Michael Andrew Barnbaum following Michael is key on bliss.

Good afternoon.

Good afternoon thank you so I wanted to speak on this more to get an education about the start of the budget process for the city understand the structural deficit maybe provide some things I learned over the six plus months I was on on the campaign to perhaps provide an idea for

how the city can bring in revenue because that was something discussed during the deliberation of the item.

I want to thank the speaker and the presentation for bringing forth the thing about public safety isn't necessarily first and foremost you know knee jerk more officers but that it goes to things like pedestrian safety.

We were at the vigil together at Fremont Park and we learn maybe there needs to be more to have diagonal crossing for pedestrians delay green for motorists so everyone stops before they go right away.

So we have a lot of ideas about bringing in revenue you know we can look at arts culture in the creative economy for the city of Sacramento.

Should every district in the city have a place that constituents can go and people throughout the region can go for live entertainment music and festivals you know Sacramento is a place for events and places to go.

And if you have things like entertainment and live music perhaps there can be you know of a fee to cover the cost of the venue and then that fee and the revenue can go to the city just as an idea to help with the budget just a thought thank you.

Thank you.

Thank you.

Thank you.

Council, I appreciate the much more detailed budget schedule calendar than previous years I want to really note that there doesn't seem to be really a change in the culture when it comes to community engagement around that.

I mean besides just extending the survey timeline from one month to two months it would actually make sense to extend it for much longer if not three to six months so that and ensure that everybody particularly community.

That are historically disenfranchised and under invested in north and south Sacramento are really prioritized when it comes to participating in this because I want to note that the previous year there are over at least 1500 respondents just not one month period in this year there were less than 900.

That's something that really needs to look at and I also want to note that all of the department presentations and budget updates that are scheduled in this calendar are all during working hours where majority of the public cannot actually meeting fully participate or listen in on these sorts of conversations.

They're all being held either at this committee at 11 a.m. or at 2 p.m. during city council meeting rather than any of the 5 p.m. meetings and then we go into the budget hearings at 5 p.m. during May and council where as noted by council member Gera is really hard for you all to really hear and listen and get into the technical details where we could actually have substantive meaningful conversations.

I also want to note that last year's department presentations they were all bunched up under one single agenda item which made it meaning that we had to listen to a bunch of different departments explain all like like to explain their entire department and then only having two minutes to actually comment on all of that.

So I really want to note that if you're going to meaningfully engage the public you really need to change the culture and it's starting to keep your comment.

Thank you for your comments.

Thank you.

Teddy George and Lambert.

I do think that figuring out how you engage the public is an ongoing effort and whether it's a survey or putting the department presentations I'm sure they'll have power points of putting them online so they're available.

I think it's always a question of how you can figure out how best and meaningfully to engage the public.

So I appreciate the comments and it's something that we constantly need to be thinking about how to do better.

Absolutely.

Yes sir, good afternoon.

Thank you for the opportunity to speak today.

I'm Teddy George, chair of the Measure You Community Advisory Committee and frankly just a bit of a budget nerd.

On October 22nd I had the opportunity to give a presentation to this committee, put the budget on it, a concept of ladder up smart goals.

As we address our city's structural deficit, Council Member Maple Riley said earlier just this meeting.

We want to make sure the goals of our programs that we fund are being met.

But the reality is a lot of our programs actually don't have measurable goals.

I want to preface with the difference between a purpose and a goal here.

Address our homelessness crisis is a great mission statement, obviously we'd all back it.

But it's not a smart goal, like keep homelessness under 10,000 in Sat County by end year.

So as a city and as a committee that is charged with evaluating spend of the Measure You funds, it's very difficult to determine if a program was successful unless we've decided on a goal ahead of time for that program.

By defining what success looks like for each program we can evaluate whether our investments are delivering the return that we're looking for.

And then better choose what the fund, 15% cut to all departments is sort of like doing surgery with an X.

It's not very precise, right?

The last budget audit subcommittee asked for staff to work with Measure You to see what this could look like.

We have since discussed this and actually Pete was nice enough to come last year as well.

By adding measurable goals to our quarterly report for Measure You for each line item.

So we have about 94 line items. We could clearly define whether or not a goal has been obtained.

And it would be measurable and objective at the end of the year.

I would love to have budget audit support for these smart goal pilot for Measure You programs.

We have done a lot of the leg work here to make it as easy as possible for staff because we know that they're very busy.

And of course we are happy to continue to partner with staff through this process.

Thank you very much.

Thanks for your comments.

The Lambert is our final speaker on this item.

This is very interesting to me because I go to a lot of race equity meetings.

And I heard one of the presentators say that there was an order given from the president.

And I was the one who said many times that I've been to the race equity meeting that there's resistance in city hall to DIE.

I call it DIE because it's dead on arrival in terms of applying to me, black people.

We've had tremendous difficulties of submitting paperwork during this process to the city manager's office.

And here we are a company that's gone viral instant job creations.

We're not talking about laying people off and a computer cannot make a cheesecake.

You have to have a crew.

We have two manufacturers, one in Southern California, one in Northern.

And we can't get hardly any money from the city manager's office.

And I am a stickler for detail.

It specifically says in here, 800 and some odd people responded.

And the person over here just said they had five different languages, plus English.

What's the problem?

It's over 5,000 employees here.

I know another man here who has a vision that would bring in millions of dollars.

He's well respected. Mr. Isle Wilson, you ought to Google him.

He's still alive and well. He's actually on our site.

We did North Sacramento Centennial Festival in November.

Rave reviews.

How can you go viral all over California and you can't get money from the city you grew up in?

Thank you.

Chair, I have no more speakers.

Council Member Maple.

Thank you, Chair.

I really appreciate it.

I want to start off by acknowledging something that Pete said.

And that's the current federal administration issued an executive order last night and guidance about grants.

I really appreciate our city attorney's office, our city manager's office, and our entire staff just jumping on that immediately to figure out how could this impact the city of Sacramento?

Of course, we do have, we're suffering amazing at getting federal grants as well as state grants, which is a great thing.

But it also means when there are threats like this, it could be really damaging to the programming that we're doing, the projects that we have in the pipeline.

And so, just really grateful that we're working on that.

And I'm hopeful that we can find a path forward that really minimizes the potential impact on the residents of Sacramento.

Thank you.

I did have a few different questions and comments.

First on the survey, really appreciate the timeline being extended.

Actually, it was really helpful for me as I was going to my neighborhood associations and other, the business districts and others in my community.

It was really helpful to have that time to be able to allow them to participate in that survey.

And also having various languages that are spoken in the city was really helpful.

But it isn't lost on me that we see less respondents than we would hope, and less this year, as was mentioned, than last year.

Are there ways that we're thinking through internally about how to increase some of that participation?

We will definitely discuss that.

It was communicated through various platforms.

And there are many ways for the public to engage.

And I know that the survey is just one portion of it.

I can tell you right now that we posted on the city's social media.

We added it to the monthly communication toolkit to all of the neighborhood associations, Chamber of Commerce, Property Business, Improvement Districts, Engagement Teams, also the SAC Log.

It was also part of the city's news site, and it was also published in the city's newsletter.

And also on the news at some point throughout the process.

We can definitely talk among us about the different possibilities of getting the word out there.

If we do extend it, one of the things that could possibly happen is that it just gets lost in a lot of different news feeds.

So we do understand that we probably need to keep it in the forefront.

And that can definitely be a consideration as well.

The other thing to note is that this is not the last time that the public can comment on budget priorities and also what they feel should be appropriate reductions.

Contacting their council members is one way, coming to council meetings is another way.

We also have e-commerce.

So there are many different ways that the public can engage.

It doesn't have to be in the survey, which I understand is, you know, it's very important.

We can look at many different ways to try to keep the word out and on the top of the list so that if people in the community sees it at a different time, they would be able to go and fill out the survey.

I'll just say, yeah, we're going to look for ways to increase engagement.

And I do appreciate the feedback because that's how we adjust.

The survey was a new thing for us last year.

We tried to be responsive to the feedback we got last year and will be responsive next year to the feedback we're getting this year.

Yes, perfect.

And again, I just want to start with a thank you on the increasing time.

I know this is a newer-ish way that we're doing this and it's always constant improvement.

One suggestion I have is I know that all of us up here on the site are doing events in our communities all the time.

So as they line up with the survey opportunities to get out into at least maybe in each district to do that, I'd be more than willing to partner.

I'm sure all of us would on either having you out in an event that we're doing or your staff.

Or if we can even get briefed on how to help administer QR codes, whatever that is, happy to bring it out there.

So thank you for that.

And then I just have a couple general comments that I'm going to make.

One, we talked a lot in the last year or this last budget process about equity.

I know that we have various tools that we're incorporating especially as it relates to the children's fund and others.

But representing a district that incorporates a lot of disadvantaged communities working class neighborhoods, communities of color.

I think it's really important that whatever discussions that we have about cuts, whether it be across the board, percentages, certain departments that is done with a tool like that.

So that we're able to take a look from an equity perspective.

My fear is that cuts that might potentially happen through this process.

If we don't constantly look at that, and I mean all of us, you know, those of us on the site is making decisions as well as our staff.

You know, the fear is that we might disproportionately impact some of the most marginalized communities the most versus the other way around.

So that's just something I'm going to be keeping top of mind as we have these discussions and I know that my colleagues well as well.

The other thing that was mentioned by one of the commenters and I would be remiss if I didn't say it is.

We think about public safety and it means a lot of things to a lot of people.

But you know, one, pedestrian safety in particular is something that's public safety to me.

The change is that we can make and this goes back to our deferred maintenance and the projects and of the federal grants and projects that we're working on are also related to this.

So really hopeful that those aren't impacted.

But I want to make sure that we're being thoughtful and creative in the way that we're thinking about what that means and how it relates to our budget because I think there's a lot of lower dollar ways that we can increase safety without necessarily having a huge impact on the budget and pedestrian safety is one of those.

One, one interesting thing that I wanted to point out that actually my councilman go up showed me from the staff report.

I think is very illustrative of why these jobs are very difficult both from the staff level and from the elected is if you look at one of the survey results that asks about whether housing homelessness and fiscal stability should be remain a priority.

It was a 5050 direct split.

And I think that we see that a lot in our communities and our conversations with our constituents and so on.

For as many people as you can find to say that XYZ should be a priority.

And so we can find just as many on the other side that we'll say that it's not.

And so it's a very difficult job balancing all of those priorities and trying to keep a guiding light.

And so I think the survey is really, really helpful in that.

And hopefully we can continue to increase our engagement with that.

And then the last thing I'll know and this is on the revenue side.

As I know that last year we had measure see that did not was not successful.

And so we think that we as a council don't give up on ways that we can modernize our business operations tax.

I think that it is one of the most important things that we can do is a city is to make sure that everyone is paying their fair share and that includes larger corporations that are within our city limits.

And that they're not just capped at let's say $5,000 which they currently are and that includes major companies.

And so hopefully you know we can get over that that loss and find a path forward in the future.

I think that can have a big impact for us on our budget.

But with that, thank you very much.

I also remember Telemontes.

I just also want to say thank you so much for the community survey.

And I also just want to note for members of the public and our council here.

We also have the City Auditors Community Survey that has been done in 2021, 2022 and 2023.

So it's just nice to see the different comparisons and something to guide us as we move forward in our budget process.

I have a couple things that I wanted to mention.

But on that point, engaging the charter officers generally would I think be helpful.

So maybe we can figure out how best to do that.

On the civic engagement side, this is always a challenge.

And the techniques probably have to vary.

No single technique is going to achieve the kind of civic engagement you would like to see.

Obviously you're trying to get information out through a variety of means, which of course is important.

I do recall that there was a tool developed by a nonprofit out of the Bay Area when we were in the middle of the great recession that we were able to use as members of the legislature to let participants actually try to put together a state budget.

And I don't know if any such thing exists for municipal governments.

But it worked really well to go out and do community means to your point council member, Maple, with this tool and let people and let them have a crack at figuring out those 50-50 dilemmas among other things.

I do think that trying to get to people where they are is an important component of engagement.

I will note about the survey that when you look at where the responses came from, I think it illustrates who is most likely to see that kind of communication and respond to it.

And it's not reflective of the city population as a whole.

It's much more reflective of certain parts of the city in that regard.

It has value, but it also would be seen with its limitations, I think, as well.

You look like Peter, dying to say something about this.

Oh, no, I was going to say council member, we are definitely going to look and see if we can find a similar, because I think that's really a really cool tool and a really great way to engage the public, the build your own budget, build your city budget.

And maybe they can give us some good balancing ideas. I'd be very open to hearing that.

So we'll definitely look into that. But I also just think it was very well put that the survey is one tool in the toolbox.

And so there's a variety of other ways that we can look to engage the public and we're happy to work with all of you and hear any ideas, because we're trying to get the word out.

So I also want to plug our budget website. So when we give these presentations, we put them up on the website.

The calendar is going to be up on the website. And just so for members of the public, our budget books are up there, our actors, all of that information is there.

So please, please look there.

I think that's very helpful. And it's always what you're doing is important. What can you do, affordably, that we'll even improve it.

I wanted to make a couple of comments related to measure you, one of them which I neglected to make on the last item.

And that's in your description, you said general slash measure you money. And I understand measure you as eligible to use any general fund purpose.

But there was also a purpose and intent behind measure you that was expressed in the context of asking voters to approve it.

And so my question really is, do you separate that out when you tell us and the public what you're looking at in terms of revenue?

In regards, so in the budget book and you'll see this when the proposed budget is released, there is a section for measure you that has the revenue alone.

And it also includes the expenses based on the program areas that were where they land. So if it's a, if it's homelessness as a housing public safety, it's all broken up in there.

So we do separate it there in our forecast. We do combine the two just for purposes of looking at everything.

Oh, yeah, you can see every program that measure you funds are funding.

And we account for it independently as well. And there is a independent auditor's report on the use of measure you funds that you'll see that will come to you. So we account and audit it separately consistent with the intent of the measure.

We'll say it that way.

I appreciate that. My question really goes to when you're presenting the budget. Do you lump measure you and general other general fund revenues together and saying, here's, here's the, we have X dollars in revenue, which combines the two, or do you separate them?

We separate them.

Okay.

We do both. But you get the separate and then you may get it lumped together as general fund measure you, but you always get the discreet.

Okay. I think I think that's important. Following on with that, I know very well last year there was there was a fair amount of discontent among measure you commissioners that they didn't really have an opportunity to do that.

And we have an opportunity to participate meaningfully in the budget discussions to the point of having their recommendations heard after the council acted on the budget.

So I see you've got them on. I'm not looking at the schedule to move. See you've got them on the schedule. But I want to I just want to stress the point that and this is probably more broadly applicable.

But that we give them the opportunity that commission in particular, the opportunity to have their input to the council, which is called for under measure you, if I recall correctly, in a timely way and in a meaningful way.

And this year, all of the measure you departments are actually going to go to the measure you commission and give their presentations there.

You know, our challenges we don't control the measure you schedule. So as you know, the budget team, we're always happy to go and present them information when we have it.

Yeah, that we were not involved in their their calendaring, but we're happy to engage with with them as the commission wants us to engage with them.

And maybe you can coordinate with the clerk's office to figure out and the might measure you leadership on how you can best do this.

But I would I would love to avoid what what happened last year. So with that, any other comments or questions, this is a receiving file.

So thank you both very much. Thanks for the public comments. And I think we're on to committee comments ideas, questions or meeting reports. Any of those?

Seeing none, we have some folks who want to speak off agenda. Yes, Chair Dickinson. I have four speakers. Okay.

Harry Henry Harry Lambert, Keon Bliss, and then Desiree Crosby.

Thanks again, and I'll try to be brief so you guys can get some much.

I am moved by art. I am calmed by music. And I am inspired by images. And I agreed that a great society should value the arts.

But when we face, you know, huge budget deficits over multiple years, I think we have to put arts and culture, I think in a proper place.

And these grand ideas of providing funding for should say providing income for artists, that's something that has to take a backseat to our core mission of providing the basic services in the city.

Yes, that should be hopefully a no brainer for you guys when you're making these comparisons.

Wrapping up, I was going to say, or I am saying, that I thought some video presentations prior to these meetings from city staff would help the public understand what's going on.

And maybe answer some of their questions so they didn't feel like they needed to get down since we're doing this in the middle of the day.

And I'll stress that again. The video presentations before the meeting would help. And I will acknowledge that Chairman Dickerson, you mentioned them putting some things online, which was what I was going to say.

So I'll ask you to keep pushing that to keep pushing it in the sense that I'll say it again.

If people could see some short condensed videos of what's going on, maybe they wouldn't feel like they needed to come down.

You know, they would get the information they needed. I know it would help me. And if I looked at that short video and I felt like, okay, I understand what's going on, understand what they're doing.

And even with that, maybe I can make a few comments online that they could read in that would be that. Thank you.

Thank you.

Any comments?

Lambert and Keon?

I had last year and before Measure You was passed, I probably went to more Measure You meetings than probably anybody in this city.

I wanted to understand what is Measure You. And I feel like I understood Measure You. Otherwise, I wouldn't have voted for it to be combined.

When you combine those funds, that's why I'm so thrilled to see an ally from District 2 as the chair.

And I'm so thrilled to see an ally from District 2 as the chair.

And I'm so thrilled to see an ally from District 2 as the chair.

I'm so thrilled to see an ally from District 2 as the chair.

I'm so thrilled to see an ally from District 2 as the chair.

I'm so thrilled to see an ally from District 2 as the chair.

Like I said, this is Part 4.

Part 4, Part 4, Part 4, Part 4.

I have coming back to Director Councilmember Emma, on item 2, regarding integrity.

And I'm a big stickler for that.

I mentioned Min麻ngty a lot.

And she doesn't pay to say that.

I just believe that to me, she should be the highest paid at City Hall working remotely for four years.

But it means a lot and I would like to end by saying that I hope that City Councilman

Dickerson

And the mayor and the City Manager's office reach out to us because we have gone viral without too much help from you

And it's gonna make it's gonna really look bad if if we

Go as viral as they're saying I'm going by the young people in my life my job is to get the cheesecakes where they need to be

But it's gonna really look bad if you did not meet with us as we take off. It's gonna really look bad

Thank you for your comments. Keon Bliss and Deseret Crosby

Just want to thank you

Chair Dickinson and other members of council who have been really raising questions and giving really direct

In like

Instruction for how city staff can really do better to engage the public and really expressing that from you all is really what a lot of us

That come to these meetings as often as we do even when we're not paid to be here

Have been walling for from our elected representatives and there are media things too that you can

Do to encourage people to really that you are welcoming them that you want to hear their feedback in this chamber

And one such is is your power as chair

You can extend our speaker time limits from two minutes to three minutes under the under the current city council rules and

Under state brown act rules and whatnot

But as it stands right now the city council rules limit everything to two minutes and I can tell you

Personally and from what I have experienced and heard through my role on the police review commission that the rules are

Oftentimes considered a barrier that discourage people not just discourage them, but actively

Dismiss them and antagonize them in a lot of ways from actually wanting to participate where we come up here and give our top thoughts for two minutes

And then a rudely cut off by the push of a button and we ask ourselves what's the point who's actually listening and

One of the things that I did when I was chair of the police review commission was

To extend the speaker time limits from three from two minutes to five minutes for all agenda items

And I also helped by moving this item public matters not on the agenda to the first in line

Rather and then begin the agenda which you can do as the power of chair and that's an immediate thing

That you can do you can also change the rule the council rules of procedures to make that happen

But as it stands right now the reason you see a lot of people that are empty in this chamber and why a lot of people don't show up at city council meetings

Is because as the current rules state their their public comment is not encouraged and very

Thank you for your comments Desiree cross be then Teddy George off

Good afternoon

Hello, and good good afternoon

Thank you so much for taking a time to listen to the public comments

I do come with a

Community concern for an emergency response

I am

Recently from Riverside County here in Sacramento to accomplish

Just some personal

Responsibilities with the participation or the support of legislation and while I'm here and currently seeking the

servitude

Support from a local residential shelter known as the Salvation Army and I want to bring to I want to bring awareness

The conditions are extremely detrimental to the health of the

Residents there

with the

Passing of a recent I believe

From

The health department as of December

There's mold on the walls some of the wall furnishings are missing and

I am concerned there are

Elders that don't leave the entire day and they're there all day and I believe that it's a grave concern

That their health is affected our health are affected. It's what I've noticed more specific is that

It's in the female dormitory and I'm hoping that we there is some resolve. I don't

Know the and the exact proper way to site, but I'm hoping that as a recourse that there can be a

relocation as there is a rehabilitation to the facility and

And

As a that's a great start and I hope that like with that as a

As an action forward that we can give your comments your time. Thank you, ma'am. I appreciate it

I'm sorry. I'm just before you leave. I missed did you give the location? I was it I believe it's 1400 B Street on North B

I believe so okay, okay, okay, okay. Thank you

Eddie George office our final speaker

Yeah, I just wanted to come up here and thank you for your words chair. Yes last year

We did give our recommendations after the budget was already confirmed and so that was pretty awkward

given the fact that we spent a full year of analysis and

You know a lot of our time making those recommendations

Going into this new year

I'm a new chair to the committee, but and I've big shoes to fill, but we are really excited to work with staff in terms of

Putting in a lot of the way legwork for the programs that we're asking for such as getting metrics for each program and

measurable goals I should say for each program so that we can do an analysis proper analysis of if we're spending the money

correctly

As a reminder, we have asked for measurable for a long time now and we did get a visit from Pete last year

Which was fantastic I look forward to working with them in a continued manner in terms of like making something official though

And and how we conduct that so I think if we could maybe have some sort of

Scheduled occurrence maybe quarterly or something along those lines that would be really useful

It doesn't have to be even at a

Committee hearing it could be just in an ad hoc format where a few of us will attend a meeting 30 minutes an hour

Etc that would be very useful. Thank you. Thanks. Thanks for your work

I have no more speakers. I think miss make will have a comment

Thank you chair really appreciate it and I

Apologies for not doing this at the appropriate time it slipped my mind, but one of the things that

That I was chatting with our interim city manager about and that Mr. Bliss mentioned is having separate items for

Budget items for public comment. I really agree with that sentiment

I think that I do think that that happened last year where we had multiple items all condensed into one and then folks only had two minutes

So I hope that if it's in this committee or our 2 p.m. Council meetings that we can do those separate items and folks can

Comment on this okay, we can certainly work on the agenda to address that I would think

Okay, thank you any any other comments or questions

Thank you all for being here this afternoon

We appreciate your time and your comments

And take them seriously so that input is valuable to all of us when look forward to seeing you in the future

We know for their business to come before us the committee is adjourned

You