What's that? What do you mean? What do you mean right now?

No.

So we have to. We have to.

Okay, you can do that.

Okay.

Call this meeting back to order. Sacramento City Council, the first of April.

We're ready for roll. Yep. Council Member Kaplan.

Here.

Council Member Dickinson. Here. Vice Mayor Talimantes. Here.

Council Member Flakebom. Here. Council Member Maple. Here.

Here. Here. Pro Temgara. Council Member Jennings.

Council Member Vang. Here. Here. McCarty. Here.

Get out of here. Thank you.

Okay. Yes. Council Member Kaplan. Do the pledge and landing announcement please.

Stand in your seat.

For the opening acknowledgments in honor of Sacramento's Indigenous people and tribal lands.

To the original people of this land, the Nisan on people, the southern Maidu, the valley and plains may walk, the Putwin-Wintoon peoples, and the people of Wilton Rancharia, Sacramento's only federally recognized tribe.

To acknowledge and honor the native people who came before us and still walk beside us today on these ancestral lands by choosing to gather today in the active practice of acknowledgement and appreciation for Sacramento's Indigenous people's histories, contributions and lives.

Thank you. Please remain standing.

I pledge allegiance to the flag of the United States of America and to the Republic for which it stands one nation under God in the visible with the liberty and justice for all of them.

Madam City Attorney, do you have a report out from closed session?

Yes, Mayor and Councilman closed session to discuss one item of pending litigation and there's nothing to report out on that case.

Mayor and Council also met to discuss labor negotiations and they will be meeting to discuss a valuation of forms of valuation of the interim city manager.

They'll be resuming back to closed session at the conclusion of the council meeting.

Thank you.

We have one item on the discussion calendar, the Department of Finance, Human Resources, and Information Technology presentations on operational program planning and deployment of strategic resources and budget.

Thank you. First item, City Manager would like to start this item.

Good afternoon, Mayor and Council. I am stepping back in my role as Assistant City Manager to these fine departments.

You're going to hear from Human Resources, Finance, and IT.

Expertly led by Shelley Bank Robinson, Pete Kiledo, and Darren Arcolino.

And I see that we have a lot of staff in audience. We traditionally call these the support department because they provide the framework and backbone for everything we do with our employees, how we deliver programs and services, how we propose adopt an administer a budget, how we treat our employees.

And are here really in service of every other department and you all to our employees and to our programs and services. And so with that, I'll turn it over to Pete to start the presentations.

Good afternoon, Mayor and Council members, members of the public. I'm Pete Kiledo, the Finance Director for the City of Sacramento.

And Finance is a core function of the delivery of every city service. And in order to have effective and sustainable programs, finance and other departments need to work in partnership.

So I'm very appreciative of the opportunity to tell you more about what we do as a department. You mainly see us around budget season, but we have finance staff who perform many other functions all year round.

We typically work behind the scenes. We're generally more comfortable in front of a spreadsheet than a microphone myself included.

And a lot of what we do sounds inaccessible. We use acronyms like Acre and GASB rules. We talk about federal procurement, circulars, tax increment, financing.

And other things that make most normal, well-adjusted people's eyes glaze over, but we like it. And I'm hoping that this will shed some more light on what we do as a department.

So I always want to begin with our departmental mission, which is to educate and form and provide internal and external customer service with integrity, efficiency and quality.

And I especially want to emphasize integrity as a government, we're spending taxpayer dollars. And in finance, we're dedicated to maintaining the public's trust by providing transparency around how public funds are allocated and spent, ensuring compliance with the law, account accounting standards and the procurement and tax codes.

And we accomplish these goals by overseeing financial management of the city and performing the financial functions all present today.

Most of our functions are mandated by law. We can't choose to not produce our annual comprehensive financial report. We're not the federal government. We can't run a budget deficit. We need to balance.

We have to go through outside audits and follow procurement rules. We have to pay our staff and retirees and honor our commitments and labor agreements.

We have to follow our reporting and audit requirements around special districts like EIFDs, CFDs and others. And we have to administer and enforce the tax programs that have been established by voters.

We accomplish these tasks through six current operating divisions. We have one that's coming back home, Office of Cannabis Management, which started in finance and is coming back July 1st.

And our small but mighty Office of the Director that helps coordinate everything and keep us on task. Our total general fund budget for this year is $10.3 million. And we have 94 FTEs. And then again, beginning July 1, OCR will be coming back.

So I am Russell Darren for this graphic this year and one. But when I started to think about, you know, how do we best illustrate finances role in the city? I thought of a foundation. And we support city service delivery from program conception through delivery. And then afterwards, we provide the mandated financial reporting.

So we provide cost estimates and appropriate managed funds. We support the procurement of goods and services. We pay our city staff and retirees, both our legacy pension and we manage our CalPERS payments. We issue all the payments to vendors and we collect the revenues that support city services.

And finally, we ensure that every single public dollar is accounted for in line with governmental accounting board standards and law.

So first, I want to introduce our accounting division. It's led by us, follow the low pass. Accounting provides oversight for the system of internal controls to safeguard city assets and prepares our annual financial statements. This includes the reconciliation of the city's 318 active funds, including the general fund.

And our conciliations are part of our state mandated annual comprehensive financial report. And the actor is really the public sector equivalent to a company's financial statements.

And by charter mandate, we provide all accounting services to our legacy pension plan. And we process numerous mandatory audits with outside auditors who evaluate the city's compliance with accounting standards and best practices.

Our budget policy and strategic planning division led by Mrathala Santizo, the budget division prepares the annual operating budget, five year capital plan, mid year and quarterly financial reporting, and supports other departments with ad hoc fiscal analysis.

Budget also sits at the table with all of our labor negotiations and provides independent fiscal analysis of the budgetary impact of all the proposals that come before you.

Next is our infrastructure finance division led by Eric Frederick. If forms and administers financing plans for assessment, assessment districts, tax districts and fee districts. If partners with other city departments and works with business stakeholders to create and maintain special districts, which support development and improve livability in the city.

This not only makes Sacramento a better place to live, but it also helps grow our tax base. When these special districts are formed, if performs mandated functions such as administering the funding and providing reporting, these special districts are critical financing tool to support development.

So impact fee districts in combination with CFDs were key to the large amount of development in Natomas. And you see the pictures on the right. Those are our EIFDs in the rally arts and Aggie Square and we work really closely with economic development.

Next is our procurement division led by Diana Reyes and Asuka. Procurement develops, implements and ensures compliance with citywide policies for the acquisition of goods and services through competitive bidding and contract and purchase order administration.

They establish our purchasing guidelines in line with state and federal law, city charter and best practices.

We support departmental procurements and centrally procure goods and services that are used citywide. And they've been identifying other areas where we can centralize procurement and drive savings.

We have an electronic procurement platform that allows vendors to automatically receive notices when a city department is conducting a solicitation and it lets us more effectively receive and evaluate proposals.

And they also manage our citywide travel and purchasing card programs.

Next is our payroll division led by Herinda Rendi. Payroll issues by weekly paychecks for active employees, monthly paychecks for our scurs retirees and maintains internal controls to ensure compliance with our labor agreements and state and federal law.

They provide data to support labor negotiations and then after an agreement has been reached, they'll issue all retroactive payments if necessary.

They also provide internal services to city employees to enroll them in direct deposit and resolve any issues with their paychecks and their time keeping.

And they keep 5,500 people from being very angry at me, so I'm very appreciative of that.

The third largest division is the revenue division which is led by Jackie Rice. And revenue administers and collects monies associated with various citywide debts and invoices citations fees, parking permits, special business permits, taxes and other city revenue programs.

Revenues are most public facing division, the friendly people you see at the revenue desk on the front floor, those are all finance staff.

Revenue collects our utility users, transient occupancy, business operations tax and other payments that finance all our city services.

We also administer other programs such as the short-term rental program, processing applications, collecting fees and helping city residents ensure they're in compliance with city code.

And then finally, beginning in the coming fiscal year, the Office of Cannabis Management is moving back into finance.

So OCM handles all the permitting and regulates the cannabis market. They administer our core program which supports individuals impacted by the war on drugs and provide support and opportunity for these small business owners.

And then as the cannabis market continues to evolve, OCM updates and provides recommendations to council.

So here's a small sample of the many accomplishments of the department last year. I won't read all of them, but I do want to highlight a few.

The procurement modernization that was approved by council last year was the first holistic update to a procurement code in over a decade.

This clarifies our code and creates citywide efficiencies. And I'd also like to thank Jen Gore who really assisted the finance department in doing this.

As you know, the RELYAR's EIFD expansion supports a catalytic project to drive long-term economic growth and the partnership between if and economic development is a great example of city departments working together instead of in silos.

The department continues to collect revenues that support all our city programs and you can see some of those highlights up there.

And then finally our budget team led our citywide budget development process. It really is a partnership between all city departments under the leadership of the city manager and council.

And the budget division also updated the capital plan to incorporate our unfunded capital needs, which is the best practice and is going to help us over the long term developed financing plans.

So as we look forward, the department will continue to support council as it resolves the city's structural budget deficit and addresses our long term liabilities.

This year council updated its fiscal policies to address long term liabilities while managing our operating deficit.

And over time, this is going to drive really positive results for the city.

We're also working with departments to find the right level of centralization for various financial functions including procurement and really looking to drive savings and efficiencies.

And our challenge going forward is going to be able to meet our mandated service needs while meeting our balancing targets.

So we're in the people business and most of our budget is services provided by staff.

So I want to leave you with this. We're very lucky to have such a talented and dedicated finance team in the city.

I'm certainly very grateful for everything that they do. I've told a lot of you my job's really easy.

I have a great staff that provides great customer service and keeps coming up with good ideas. And I just have to think about how do I bring those all to you.

So we're here to help and support city leadership in the council in implementing financially sound policies and providing transparency and how public money is our spent.

And thank you all for listening to me and I'll pass it off to Shelley.

Good afternoon.

So as Pete said, I'm Shelley Banks Robinson, the human resources director.

My presentation will be relatively short in comparison to the presentation I gave last year.

If anyone would like to see that brilliant presentation though, they could go to the last year's meeting on February 20th, 2024 at 1 p.m.

It gives a lot of detail about what HR does. While my presentation this year is shorter, I do want to state for the record that I have truly the most amazing staff you could imagine.

I'm very proud of how dedicated they are and the work that they do. This presentation will provide a brief overview of the various services that HR provides.

As you can see on the short or chart, we have five divisions in HR and it's a staff with approximately 80 full time people.

Our budget from the general fund is approximately 5.6 million.

For those who would like to see more detail on the HR's budget, it can be found on page 288 of this year's approved budget.

Our risk management division is comprised of risk management and workers compensation funds which we call our internal service funds.

And risk has this budget of about 68 million.

You can see on the screen several different authoritative sources that guide us.

Most everything we do in HR is mandated or guided by federal, state and local laws, regulations, rules, labor contracts and policies.

This slide shows some but certainly not all of the authoritative sources guiding HR work.

These sources play a critical role in ensuring the integrity, legality and effectiveness of HR practices within our organization.

These sources which may include industry standards and best practices, legal statutes and regulatory guidelines, service and foundation for city policies, procedures and decisions.

The first division on covers are benefits services divisions which I'll refer to as benefits.

And this is led by Samantha Hardy and for those in the audience, Samantha, if you could stand up just so people can see your face please.

Thank you.

Benefits manages enrollment eligibility and participation in employee and retiree benefit programs for thousands of participants in health insurance, retirement plans, life insurance, disability coverage and other voluntary benefits.

They provide information, resources and guidance to employees and retirees about available benefit options, coverage details, enrollment procedures and any changes or updates to the benefit programs.

Benefits also supports the city's over 5,000 retirees by ensuring they have access to the benefits they are entitled to, assisting them with the transition into retirement and providing ongoing support and communication to help them navigate their benefits.

And I did state this last year but every time I read it is shocking. The number of retirees receiving health benefits from the city now out numbers the number of active employees.

Benefits manages several retirement plans including the California Public Employees Retirement System known as CalPERS.

This plan currently has about 4,600 retirees or beneficiaries receiving pensions and about 1,000 active employees today are eligible for retirement.

They also manage the Sacramento City Employees Retirement System which is our really, really old retirement system.

It started in 1977 or it transitioned in 1977 from scurs to PERS. And scurs currently has 1 active remaining employee in the plan.

So the plan has about 800 retirees and beneficiaries. Benefits also manages the Mission Square Retirement Plan.

This requires mandatory participation in 8 plans for the retiree health savings account.

And lastly, the nationwide retirement solutions plan has 4, 4, 1A plans requiring mandatory city and employee contributions and 1,457B plan that allows for voluntary employee contributions.

So before I get off the subject of benefits and retirement, I want to give a personal shout out to the 1 remaining active scurs employee.

Wow.

She's a nice one.

Yeah, I wasn't even going to say the department but she was or the gender but it is a female in finance.

And I want to say she started in 1976 y'all. She has been with the city for 49 years.

That's right. That's an amazingly dedicated employee.

Okay, our next division is the Office of Diversity and Equity and we refer to them as ODE.

This division is led by Amize and Zule Barnes. And Amize just stood up for everyone. Thank you, Amie.

ODE is leading the efforts to build a more representative, equitable and inclusive city of Sacramento both internally and externally.

ODE is committed to working closely with all city departments and offices to ensure that support for equity inclusion and belonging is integrated into decision making planning and implementation.

All structures services policies practices and procedures. The city has a race and gender equity action plan called our Jeep.

At which calls for a shared coordinated and collective response to establish systemic results in workforce equity.

The plan includes 14 outcomes initiated from the applicant pipeline to hire to retire.

It led to the creation of 16 department equity teams all engaged in this equity work.

The 14 recommended outcomes and actions in the RG were intended to inspire accountable action to advance workforce equity.

ODE also supports external initiatives to engage the community through participation in the Sacramento centered on racial equity initiative known as score.

The initiative seeks to address equity first residents within the city of Sacramento.

This is accomplished through partnership between the city council's racial equity committee and the community racial equity alliance and committee.

The alliance and committee are an interconnected network of advocates, activists and organizations working together to imagine a bold vision of equity and justice in Sacramento.

The plan of the score initiative is separate and distinct from any internal equity work.

Our next division is the division of employment classification and development also known as ECD. This division is led by Ebony heaven.

Thank you Miss heaven for standing up.

The committee oversees recruitment classification compensation and training and organizational development.

ECD supports several critical city areas city wide. They're responsible for facilitating the recruitment process for civil service exempt and non-curr classifications.

ECD manages about 600 recruitments annually. This results in processing around 35,000 applications and 315 civil service exams as part of the selection process.

ECD is also responsible for processing about 10,000 personnel action requests annually.

As part of ECD is our organizational development program known as OD.

It's a strategic investment in human capital with a goal of creating a more skilled, adaptable and motivated workforce capable of meeting the evolving needs of the public.

The overarching goal of the program is to improve individual and organizational performance, increase efficiency and foster continuous improvement by enhancing employee knowledge and skills, investing in professional growth and increasing employee morale.

The OD team is responsible for the city's learning management system known as acumen.

They successfully manage employee assignments to ensure compliance with legislative required trainings.

They create new courses and they manage over 10,000 professional online trainings as well as create custom resources for departmental use.

Our next division is labor relations and it is led by Aaron Zanato.

Aaron was unable to be here today and you'll see on my next slide I included a photo of someone else unable to be here.

I did not know that Aaron was, I had a little bit of short notice that he was not going to be here.

So I apologize not having him or his photo up. This division is composed of three work groups labor relations, equal employment opportunity and the ADA and leave administration program.

Labor is responsible for negotiating all of the city's labor agreements, citywide policies, department and visual policies.

They do this with our nine unions for our represented employees. We also have our unrepresented employees.

We have a total of 11 labor agreements with 15 represented units and five unrepresented units.

Labor provides oversight of workplace administrative investigations and reviewing discipline that may result from those investigations.

They also assist council or advise our customers and resolving issues such as employee rights, labor agreement interpretations, grievances regarding labor agreements, city policy interpretations and last but certainly not least conducting threat assessments regarding workplace violence concerns.

Our next work group is our equal employment opportunity office and that is managed by Brittany Phillips.

Brittany is unable to be here also though I did know that beforehand. So I do have a picture on the screen so you can get familiar with her face.

EEO is responsible for promoting and enforcing equal equal employment opportunities and preventing discrimination and harassment in the workplace.

The EEO office works to ensure that all employees regardless of race, color, religion, sex, national origin, age, disability or other protected characteristics are treated fairly and without bias in all aspects of employment, including recruitment, hiring, promotion, compensation, training, and termination.

The EEO team is responsible for responding on behalf of the city to complaint submitted to external state and federal EEO enforcement agencies.

They ensure the city is in compliance with the city's EEO policy and investigate allegations of discrimination, harassment, or retaliation complaints pursuant to the policy.

The ADA and leave administration unit is a work group also within labor and it's run by Catherine Bandy. Miss Bandy was also unable to be here today and did not have her photo today. I apologize.

The ADA and leave team facilitates the management of work related and non-work related employee leave programs. They ensure compliance with applicable laws and regulations and they promote consistency, fairness, and efficiency and leave administration throughout the city.

They do this by assisting employees through the processes, regulatory requirements, and city policies for leaves of absence and ADA reasonable accommodation request.

They pursue into the Americans with Disability Act, Americans with Disabilities Act, and the California Fair Housing Act. They provide technical assistance, guidance, and training on leave and employment related ADA issues.

And our next and final division is the Risk Management Division led by Pat Flarety.

This is a thank you, Pat, for standing up. This division is composed of three work groups, Risk Administration, Environmental Health and Safety, and Workers Compensation.

The Risk Management team is responsible for the employee safety programs for the city, administering on the job injury claims for city employees and volunteers, and for liability claims and insurance.

Risk Administration manages the city's exposure to various risk of loss related to damage or destruction of city assets. They're responsible for providing citywide insurance requirements, training, and for citywide certificates of insurance coordination.

Risk Management is responsible for managing insurance policies for excess liability, property, excess workers compensation, fine arts, crime, pollution, special events, and aircrafts.

This fiscal year, as I said earlier, Risk Management has an operating budget of 68 million.

The team provides oversight of liability claims handled by our third party claims administrator. They participate in a resolution of litigated cases, and they attend settlement conferences.

The team holds annual Risk Management meetings with city departments for the purpose of reviewing claims and safety initiatives.

They review contracts for insurance requirements and proper insurance documentation.

If the public would like more information on the city's Risk Management program, the end report went to both the budget and audit committee and the city council meeting last week, which was held on March 25th.

Workers' compensation is a work group within the Risk Management group, and is managed by Natalie Dimsey.

Thank you, Natalie. The city self-insured, self-administered workers comp program is not only the most efficient way to deliver workers' comp benefits for our injured employees and volunteers, but is also more cost effective than outsourcing to an external contractor.

Their streamlined process ensures greater control over claims, faster claims handling, and shows us from unpredictable and exorbitant insurance premiums.

The top priorities for the workers' comp unit include ensuring fiscal sustainability and regulatory compliance.

Most importantly, the unit provides support to all departments, injured employees and volunteers, and ensure they ensure a prompt and safe return to the staff of the staff to the workforce.

The workers' comp unit serves as the main point of contact for all parties involved in the life of a claim.

They are highly responsive when addressing inquiries and providing updates, leading to a more efficient claims management and expediting closures.

This supports staff and management responsible for the preparation and submission of regulatory reports to various agencies, including Medicare, OSHA, the TNN and IX Report Office of Self-Insured Plans, and the Department of Workers' Comments Station Claims Inventory Report.

Environmental Health and Safety, which I'm going to call EHNS, is a work group within risk management also and is managed by Charnel Cumar.

Thank you, Charnel.

EHNS work with city staff, external stakeholders, and contractors to develop, audit, and provide guidance and training in support of Cal-Oshah and other EHNS-related regulatory requirements, required trainings and programs.

Departments and divisions have dedicated EHNS specialists who work closely with the groups to provide direct consultation and support to prevent injuries and accidents aimed at reducing liability.

Their compliance and reporting efforts address OSHA compliance, Department of Transportation, and Department of Motoverecals compliance, and Environmental Protection Agency requirements.

They support city operations by implementing employee workplace health and safety programs.

The EHNS team also manages the city's pre-employment medical exams, DOT drug testing program, and ongoing medical screenings.

The EHNS team provides consultation on work side inspections, hazard assessments, and program and policy review and updates.

And just one of so many things that they handle, it was the EHNS unit that mobilized all throughout COVID to assistity, staff, when an illness was identified, and the implemented spread protocols as the pandemic persisted, changing as necessary almost daily with guidance and county regulatory direction.

And I am very happy to say that we're almost out of the COVID business.

I think one more regulation is still in the books that goes away next March and will be done.

So as I said earlier, most of the work in HR is that we are responsible for is mandated by law.

The only areas of HR that are not mandated are organizational development and the Office of Diversity and Equity, which is where unfortunately you will see the proposed cuts for HR in addition to eliminating HR's positions of support staff in the director's office.

As a department, we have three support positions and two of them are being proposed to be eliminated.

We're looking to use more technology to supplement some of what the support staff handles and the remaining duties would be redistributed within the department.

I would like to share one final document if the clerk could pull it up.

No?

This.

Okay. Thank you.

I didn't go into a lot of the details on the volume of work that HR handles or all of the complexity or anything, but I did want to share this is our annual report.

With just a brief snippet of what we do on a daily basis.

I would again like to thank all of HR staff for their dedication and support.

They are truly an amazing group.

And as I close this presentation, I want to express my sincere gratitude to you for your time, attention and engagement today.

I hope you can insight into the valuable services provided by HR and I welcome any questions that you may have.

Thank you.

Thank you so much.

Next step, we have IT.

And we'll do questions at the end.

All right. Good afternoon.

Vice Mayor and members of the City Council on Darren Arcolino, your Chief Information Officer.

I'm excited to have this opportunity today to present the amazing work performed by the dedicated, hard working and innovative employees of the Information Technology Department.

I'd like to begin by sharing our department vision, which summarizes our purpose and the role that we play in the city.

Through the use of technology, we engage in power and improve the lives of the citizens of Sacramento.

The presentations you heard today and over the past few weeks highlight how integrated technology solutions and power their work.

Technology is deeply ingrained in all business lines in Sacramento and IT partners with city departments to continually improve operations.

This transformation ensures that essential government services are easily accessible to our residents, making government more responsive and efficient for everyone.

The IT Department in unified in 2018 by consolidating IT positions from various city departments.

As a result, we now employ 202.5 full-time equivalent employees.

Of these 41.5 positions are dedicated to the 311 division, which transitioned to IT in 2015.

Our operating budget is $35.8 million, 22.1 source from the General Fund, and 6.5 million from the Interdepartmental Service Fund, also known as the Cost Allocation Plan.

It's worth noting that 97% of the department's total budget is allocated to employee services.

We take pride in the culture we've established to attract and retain talented employees.

Our intern and IT training programs create an exceptional pipeline of talent from local colleges, fostering a diverse workforce.

We currently have 16 intern positions, and since 2020 we've hired 27 outstanding IT trainees who are eager to learn and grow within the department.

To the left is a list of our eight distinct divisions along with their respective managers.

While touched on 311 shortly, here are a few key metrics showcasing the breadth of work to support city departments.

IT Administration coordinates the annual spending for hardware and software purchases across all city departments, totally 27.9 million last year.

By utilizing cooperative purchase agreements and volume purchasing, we ensure cost savings, strengthen the city's negotiating power, and streamline procurement for timely ordering.

Regional support manages the life cycle of 7,500 computing devices including laptops, tablets, and smartphones, while administering critical system patches to maintain security.

Each year the enterprise applications division processes 335,000 online forms, including 23,000 digital signatures, improving the security and efficiency of various city transactions.

IT infrastructure manages 190 miles of city-owned fiber optic cables, which connect over 100 city facilities.

This is significant advantage for Sacramento because owning our own fiber network cuts reoccurring costs and creates new opportunities for growth.

We manage an enormous amount of city data, 4.9 petabytes at last count, which is equivalent to 98 million standard filing cabinets full of paper.

GIS oversees 1.5 million city assets and more than 900 data sets of which they're most are published on the city's open data portal.

The team of utilities manage the connectivity of 143,000 telecommunication endpoints to provide precise water usage data to ensure accurate billing.

And the public safety team engineers in supports the technology and 310 police vehicles equipped with mobile data computers and in-car camera systems along with 134 fire tablets used in fire engine trucks and EMS.

These metrics only scratch the surface of each division's contribution.

311 customer service division is often viewed as the city's front door. Its work is crucial for improving communication between the city and its residents, enhancing responsiveness and maintaining a high standard of public service.

This program provides a single point of contact for most city services, handling general inquiries and generating work orders for other departments to address reported issues.

Residents can easily reach 311 via phone, city website, a mobile app or email.

Additionally, 311 operates 3 dispatch stations that manage non-emergency services, requests for parking enforcement, recycling and solid waste, animal care facilities, parks, streets, urban forestry, water sewer and range.

Last year I expressed concerns about maintaining 24-7 operations for the call center. By 2023, the average wait time had nearly reached 14 minutes due to increase in calls related to homelessness, our population growth in the city and limited resources within 311.

As a result, our call bandament rate rose to 23%, indicating that many customers hung up before receiving help potentially leaving important issues unreported.

To address this, we reassessed staffing and adjusted phone hours to a 12-hour window from 7 a.m. to 7 p.m. as 88% of our calls occurred during this time.

While 311 services remain available 24-7 for urgent needs, most staff now concentrate on peak hours.

We also enhanced our AI virtual agent to assist with inquiries related to homelessness, scheduling junk pickup and reporting abandoned vehicles.

These changes significantly improve operations as the average wait time dropped to 1 minute and 10 seconds, and abandoned calls fell to 4.6%.

We also experienced a 5% increase in call volume during this time reflecting the success of our staffing optimization.

As a result, customers can connect with agents more quickly, leading to a more efficient and responsive 311 service.

Our cybersecurity team protects the city of Sacramento and its citizens by managing risk to information confidentiality, integrity and availability.

Sacramento is recognized as a payment card industry level 2 merchant due to our high volume of credit card transactions.

Our team works closely with the Treasurer's Office to implement the latest PCI requirements and regularly tests our security controls to ensure compliance.

This work is crucial for obtaining our annual certification, which enables us to continue to process credit cards.

In addition to security awareness training for our own employees, this team presented an elder fraud seminar at the Heart Seeners Center last year, educating seniors about online scams.

They also continually improve our CyberSafe Sacramento, a website dedicated to educate our citizens about cybersecurity through a trusted source.

Each month, we received nearly 3 million emails and files to scan. Among them, we identified 30 employee impersonation attempts, 817 efficient attempts, and block 197 malicious payloads before they reach our staff.

Those payloads could be used to steal data or deploy ransomware. Government agencies are prime targets for financially motivated threats, with 1885 data disclosure incidents reported just last year.

Recent cyber attacks on other municipalities have led to the shutdown of city services, including police and 311, and exposed sensitive data.

Here's a look at the value loss prevented by this team. The average cost of a data breach grew to 9.36 million, and the average cost of a ransomware is now 4.9 million.

These figures do not account for the loss of public trust and reputation that accompanies each breach.

It's important to take a moment to talk about artificial intelligence. AI has already become a part of our city operations through our 311 virtual agent, which uses machine learning and voice responses to automate common tasks.

Recently, tools like ChatGPT have sparked wider interest in AI, positioning it to revolutionize local government operations.

Over the past year, we focused on integrating AI into the city responsibly, building a strong foundation first.

We've developed an AI policy that ensures flexible, yet comprehensive governance of AI systems, balancing the benefits with safeguards against potential risks.

We've established an AI working group across departments to boost AI literacy, explore opportunities, and evaluate projects.

We also joined the Gauve AI Coalition alongside 500 other government agencies to promote ethical AI solutions in public services.

Additionally, we're developing a data strategy and governance plan to ensure that our data is accurate, secure, and ready for AI applications.

Finally, we surveyed our own city employees to gauge their readiness for AI and identify opportunities to help guide our strategic roadmap.

Two weeks ago, we hosted an AI strategy workshop to shape our future.

Our AI vision is to responsibly and ethically leverage AI and optimize city services and drive economic growth, creating a more efficient, inclusive, and sustainable Sacramento for all.

The image on the right captures a moment from our strategic planning session where we mapped out both the present and future AI landscape.

The Post-it notes on the board highlight our ongoing project, as well as emerging AI concepts that will play a role in transforming city operations.

The department takes pride in being a good steward of public funds and continuously seeks innovative ideas to reduce city expenses.

27, that's the number of city parks with free Wi-Fi thanks to our public private partnership with Verizon making Sacramento one of the first 5G cities in the nation.

2.5 million, that is the amount that we will save over the next 10 years thanks to a negotiated contract with the state of California to exchange our fiber infrastructure for high-speed internet services with advanced security.

23 million dollars, that's how much we avoid paying annually and high-cost lease rates to third parties for the 600 city-owned fiber circuits that link city facilities and traffic signals.

7.3 million, that's the amount that we saved over the past 8 years through hard negotiations with enterprise software vendors.

These negotiations are truly an art form and consistently securing better pricing than initially quoted in contracts.

38.9 million, that's how much we secured in grants last year.

Majority of this is from the Sacramento last mile connectivity project which provides high-speed internet to underserved areas and will benefit approximately 43,000 residents.

Additionally, we've received a $250,000 grant approved last week here at Council to enhance our cybersecurity program.

I want to highlight the challenges our department is facing as we approach fiscal year 26.

Since 2020, IT workloads have increased by 30% due to the rise of electronic documents, the number of devices we manage, software expenditures and data growth.

The pandemic accelerated the adoption of digital technologies, driving innovations that enhance our city operations.

While our workloads have grown, our staffing levels have decreased.

Last year, we eliminated six technical positions as part of the budget reduction, leaving us with just 161 staff members in our non-311 workforce.

Industry standards suggest that IT department of a local government agency should have a staff size equivalent to 3.9% of the total workforce they support, which means that we're currently short 35 technical positions.

This often results in critical areas being supported by just a single staff member.

Additionally, we're facing upcoming unfunded liabilities.

Our ERP system eCAPS, which was implemented in 2008, it's hard to believe, supports key business functions such as HR payroll, finance and procurement.

The version that we use as people soft is no longer sold to new customers, but only receive limited improvements over the next six years.

Replacing this system will require an estimated one-time investment about $14 million and the time to begin the replacement project is vastly approaching.

As we evaluate our budget reduction strategies, a 15% reduction translates to $3.2 million and 22 positions.

Considering our staff size and the wide range of programs that we support, we must prioritize core IT services while ensuring that the reductions are distributed actively across all IT divisions and the departments that we could be affected.

The decision to cut services and programs is not taken lightly as it has a ripple effect on the departments we support and their respective missions.

These reductions will lead to higher cost for departments as outsourcing technical services is significantly more expensive than in-house support.

You also won't see broad cuts across the board in our reduction plan, as doings so would increase our cybersecurity risk.

Given our current staffing levels, such cuts would jeopardize city data and systems by compromising our ability to maintain system updates and security oversight.

While the strategies outlined here will help us meet our budget target, they create false economies that ultimately raise overall costs and negatively impact city operations.

Looking ahead at what's next, I want to highlight a few exciting projects.

First, I'm thrilled to announce as of today we launched SACG-PT on Nexus, which is our city internet site.

The AI Assistant delivers human-like responses to a range of questions and is currently trained on data from our public website and our city code.

In partnership with SHRA, we'll soon roll out free Wi-Fi and the Marine Avista and all their growth public housing communities.

We'll also be putting the final 200,000 of our digital equity funding to good use by collaborating with Dell and T-Mobile to distribute laptops and Wi-Fi devices to underserved communities and Pell Grant, Pell eligible students in SAC State's computer science program.

A distribution event will be planned for June.

We're excited to partner with the Entertainment Services Division to develop a digital platform that streamlines the permitting process for entertainment, film and special events with an anticipated launch date in the first quarter of 2026.

And finally, by May of 26, we'll introduce a new platform for our city customer service agents, transforming the customer service experience by incorporating web chat and text messaging capabilities with multi-language support.

We would support via automatic language translation.

Thank you for your time and I will be here along with Pete and Shelley to answer any questions you may have.

Thank you first we're going to start with two members of the public wishing to participate.

We have one public speaker now, Matt Worthy.

I haven't seen it once since I've been here years.

It's a disgrace and we have a problem with management.

Public point, all this stuff you say every dollar is accounting for.

Why do we have the scanners that we have?

Something by the line.

It's up there.

We have everything about your employees.

This was coming in and pat your employees on the back.

This is a real undercover strategy when it come to law.

Those people were coming in and laughing at you.

That's what you said.

Get your check and run.

People wake up and show them public.

It's sad.

This year is theater.

You have to get down to facts and there are problems right there.

This woman here should go and go and come up within the person that's supposed to be replaced here.

I told you about people being replaced and being faithful to the people.

It's so sad to see that.

One thing I'll be on the government side.

I think your time is complete.

Mayor, we have no more speakers.

Okay. Thank you.

Council members.

Questions or comments from council members?

Yeah.

What?

I have no idea.

Yes, I can use help every day.

Okay. No questions or comments from Councillor Recaplin.

Thanks, Mayor.

Darren, would you mind?

The stuff that our IT department does is critical.

Can you just briefly tell me what you've seen in the increase cost for cybersecurity and IT costs, what they've been going up?

Of course, the way that we approach cybersecurity and again it started from just PCI and having to do these things in order to keep processing credit cards.

The cost is just going up.

It's an endless game of cat and mouse.

So as the bad people use AI, we have to use AI to defend.

So that constantly is going to increase looking at new software packages, looking at different ways that we could partner, we partner with the state of California through that that

we want to continue our contract that I talked about.

The advanced security operations there is, we gave them fiber to connect their buildings and returned.

They gave us internet service as well as advanced security and that includes their SOC, their security operations center.

So there's 24 or 7 coverage, so we have people looking at our data and looking at our ingress egress of data going in and out of the city all day long.

So we're trying to do what we can with the resources that we have.

And so what we've tried to do in winning this $250,000 grant was really great because we're also going to be training not only RIT folks but our operations folks as well.

So for SCADA, that's really important because SCADA is also a target for cyber attacks and they're also going to be trained in cybersecurity through that funding.

Thank you for that. I think it's a cost that goes up that we don't necessarily, it's a revenue loss to us but it's a mandatory.

So when we look at it and we're talking about our structural deficit, some of it is the increased cybersecurity and IT costs that are going up that don't necessarily bring in additional tax revenue.

But I think it's important we talk to our community about that and then I just want to highlight again.

So you said the software that we use right now, people soft, they're not really updating it.

They haven't been for some time. They're updating it, they're not selling to new customers but they are doing security patches and other small enhancements.

So what's the ETA because I think Madam City Manager, we have to look at this $14 million and how does it get baked into our budget?

Because again, this is like critical infrastructure because this takes care of all of our employees.

So I think it's something we should be adding in or is it already added in for how we discuss this but we can't not look at this.

So any thoughts, advice? That's not wrong. Darren Kirk, me if I'm wrong, 14 is just the general fund portion of it or is that the total sign?

No, that's the total.

Oh, well that's the really.

Yeah, no, that is the total and that's up to you.

So you are not wrong. This is where we as a city have not, we have looked to things that we can do not the things that are hard to do that people don't see behind the scenes and it is where when you know Pete talks about all of that.

Infrastructure and our deferred maintenance and this is a system like all of IT this year when we went through our budget reductions that we know we can't afford to lose.

And so that was a priority for us and so it's something we're going to have to look at building into our forecast and or when we see one time many available, be willing to say we're going to use it for this and not that.

So yes, heard. Thank you.

Thank you. I just wanted to call that out but also the 38.9 million and grant opportunities, you know things like that should be highlighted.

Unfortunately, we can't highlight that in HR. You guys don't necessarily get grants for people and Pete, you know, we love you but you're the budget and budget cuts don't necessarily bring in grants.

But I want to thank you for what you do. You guys are the core of what we do for our employees and so addressing any structural like infrastructure things we need to do because we can't not have payroll correct and everything else.

So I would like to see this Madam City Attorney, the people soft built into the budget whether it's, you know, over a couple years if we know the life is rapidly diminishing.

Thank you. Thank you.

Thank you. And I just want to commend you, Darren, for your team on 311 improvements. They went from the average wait time last year being 13 minutes and 44 seconds to this year being one minute and 10 seconds.

Like, kind of a positive. It's pretty good.

I mean, as a city of Sacramento, we're in the people service and trying to get back to people and so just want to commend you and, you know, I just wanted to.

It's also I've been cost me an hour. I have an hour 311 manager if you can just stand up. He's amazing.

Thank you.

Thank you. And your team on your work on digital equity broadband access, drawing down those state and federal dollars and getting this Sacramento GBT.

Program set up. I've asked it a few questions. Good answer so far. And I'm just really interested in like, as governance, how, how we do policy when it comes to virtual.

I mean, AI and everything that's coming down the pipeline terms of technology. So looking forward to partnering with you and your team. Thank you.

And I just want to acknowledge again that your budget is already so small already. I just wanted to uplift one item in particular because I saw this on the list of reductions of potential reduction.

And that's really under HR around the racial equity staff. And I know that both the position, the diversity and equity manager and the administrative analysts are both on the consideration for reduction.

For me, I just want to share that both of these positions. I know we actually had three positions before. It's so critical to the work that we're doing in the city.

We implemented, we voted on the racial equity resolution in December. And now we're just beginning the process to operationalize this resolution and begin to implement it in phases.

And we can only do this if we have city staff that's holding this work. And so the work that Ami does and her entire team is so important.

I just want to uplift the various 14 work groups, department departments that you're working with around the racial equity.

The other piece about the racial equity is that it's so important for us to build a capacity in our city as well.

And if we don't have anyone doing that work, we're not going to be able to implement the racial equity work that we envision for the city.

I just wanted to uplift that. And as the city manager is working on the proposed budget that she will bring to the full council for consideration.

The racial equity staff is of most importance. It's my priority for the next four years is to make sure that we begin to operationalize and use our budget equity tool.

And we can't do that without having these two critical staff. And I would even say they had it one staff.

My understanding is that it may be absorbed through the budget. They're already so thin already. And so really hoping that we can save those position.

If anything, add the additional staff that was there before. That's what I would like to see.

I appreciate this comments. And of course, my desire is not to cut anyone at any time for any reason. But I agree the work is important.

I mean, it has provided an outline of some upcoming work. And it's a lot. It's a heavy lift. And without those staff, it would be almost impossible to get that done.

Thanks, Shelley. I really appreciate all the work. And those are my comments. And again, looking forward to the debate in a few weeks because we will be presented a budget. And then there will be trade-offs and tough to, you know, a tough decisions that we all will have to make and looking forward to the conversation.

Thank you so much.

Okay. Thank you. No more questions or comments. This is an informational item. Thank you very much.

Mayor, we will now adjourn to resume the 1 p.m. Special Meeting for the purpose of a closed session. We have a quorum of council members and chambers.

There are three items that are on the agenda. We have no speakers on any of the items to repeat the items that were not concluded at the earlier closed session.

We have item number one pursuant to government code section 549-56.9, D. David, 1 to discuss matters pertaining pending litigation, QR Campbell versus the City of Sacramento.

Sacramento County Superior Court Case number 3, 4-2023-00335583. Item number two pursuant to government code section 549-57.6. For a matter pertaining to negotiations with recognized employee organizations, Sacramento City Exempt Employees Association, Sacramento Police Officers Association, International Union of Operating Engineers, Stationary Engineers, Local 39.

Sacramento Area Firefighters, Local 522. Sacramento Sierra Building and Construction Trades Council, Plumbers and Pipepitters, Local 447. Auto Marine and Specialty Painters, Local 1176. Western Council of Engineers, International Association of Machinists and Aerospace Workers, the purpose is to confer with the City's Chief Negotiators, Shelley Banks Robinson, Aaron DeNotto and Tim Davis.

Item number three pursuant to government code section 549-57.B. Boy, for a matter pertaining to personnel, the performance evaluation of the interim city manager.

We are now-

Would you like to adjourn now, sir?

Yes.

We'll adjourn to closed session.

So we'll go right now.