Budget and Government Efficiency Committee Meeting Approves Financing and Procurement Items on April 16, 2025
Budget and Government Efficiency Committee Meeting - April 16, 2025
The Budget and Government Efficiency Committee met on April 16, 2025, to consider a fleet parts contract amendment, water infrastructure financing, and general fund bond authorizations. The committee approved all agenda items with 3-0 votes (Vice Chair Moreno absent). Public testimony addressed marijuana business impacts, homeless encampment conditions, cannabis tax transparency, and city spending practices.
Consent Calendar
- The committee unanimously approved the consent agenda consisting of minutes from the March 5, 2025 committee meeting. One public commenter requested more detailed language in minutes to accurately reflect the nature of comments.
Public Comments & Testimony
- Terry Ann Skelly – Public health educator and mother of three, argued that reducing marijuana influence (starting with billboard removal) would save lives and money for the city.
- Speaker identified as "the original" – Strongly criticized conditions at city-sponsored tent encampments operated by Dreams for Change, alleging deplorable conditions, hazardous electrical outlets, and fraud. Called for an audit of the contract and closure of the facility.
- Blair Beekman – Encouraged open public discussion about biometric technology in parks and senior centers, emphasizing the need for clear conversation on technology placement and civil rights protections. Also commented on the need for clear subsidy processes in water issues.
- Becky Rapp – Public health educator, requested a full and transparent budget analysis of the cannabis business division, including both revenues and costs such as 911 calls, emergency room visits, and impaired driving. Noted the last such analysis was in fiscal year 2022.
- Judy Strang – Public health educator, advocated for revisiting smoke-free air and water policies to reduce smoking and vaping, noting that lung cancer remains the number one preventable disease.
- Peggy Walker – Urged the city to address e-cigarette waste disposal, noting that about 4.5 e-cigarettes are discarded per second. Recommended requiring sellers to take back and recycle used devices.
- Caesar Javier (in-person on item 5) – Expressed lack of trust in city finance leadership, citing a budget deficit and questioning the accuracy of financial presentations.
- Additional comments on specific agenda items mirrored these themes.
Discussion Items
Item 2: NAPA Fleet Parts Contract Amendment
- Presented by Rex Ragukos, Program Manager, Department of General Services. The city requested authorization to increase the not-to-exceed amount of the cooperative procurement contract with Genuine Parts Company (NAPA) by $9.9 million to $38.9 million total. The contract supports maintenance of the city’s fleet, which grew from 4,500 to 4,952 vehicles since 2021. Auto parts costs have increased 14–15% due to inflation and supply chain disruptions. Staff noted a new long-term contract will be brought later in 2025.
- Discussion: Council President Pro Tem Lee expressed concern about timing and tariff impacts, noting that spending projections may not be met if pricing changes. Councilmember Ilo Rivera asked about minority contracting and parts delays; Deputy Director Mike Simons responded that they maintain a two-month supply for fast-moving parts and have diversified vendors for specialty vehicles.
- Outcome: Passed 3-0.
Item 3: Drinking Water State Revolving Fund Loan for Otai Second Pipeline Phase 3
- Presented by Finance staff (Adam Jones, Alison Falkenstein). The city seeks a loan of up to $50 million from the State Water Resources Control Board at an estimated 1.9% interest for a 30-year term. The project involves installing a 48-inch diameter pipe in Bonita to connect the Otai and Alvarado service areas, improving water supply redundancy and use of local water.
- Discussion: Councilmember Ilo Rivera questioned whether the loan would ultimately lead to higher bills due to take-or-pay contracts with the San Diego County Water Authority. Staff explained the project is about in-system redundancy, not expanding local supply capacity. The chair directed staff to explore legal and financial options to address water authority contract issues, possibly including legal action.
- Outcome: Passed 3-0.
Item 4: Water Revenue Bonds (2025A) – $250 Million
- Presented by Jyoti Pantlu and Alison Falkenstein. Authorization to issue water revenue bonds not to exceed $250 million to refinance outstanding commercial paper used for water capital projects. Estimated interest rate 4.39% (based on April 1 rates). Annual debt service estimated at $15 million average over 30 years.
- Discussion: IBA clarified that the water commercial paper program will continue. Councilmember Ilo Rivera moved approval. Councilmember Lee noted the 7% maximum interest rate and acknowledged market volatility.
- Outcome: Passed 3-0.
Item 5: Lease Revenue Bonds (General Fund) – $465 Million New Money Plus Refundings
- Presented by Richard Eyre and Samantha Wiseman. Authorization for up to $465 million in new lease revenue bonds for citywide capital projects, plus potential refunding of 2015 lease revenue bonds and 2016 ballpark refunding bonds. Estimated interest rate 4.52% (pre-volatility). Refundings expected to generate ~$550,000 and $395,000 annual savings respectively, subject to market conditions. Properties to be leased include three libraries (Central, Rancho Bernardo, Mira Mesa) and Del Cerro fire station. The general fund commercial paper program will be closed, saving ~$1.1 million annually.
- Discussion: IBA asked about commercial paper elimination; staff confirmed savings. Councilmember Ilo Rivera had no concerns. Public commenter Caesar Javier criticized city finances.
- Outcome: Passed 3-0.
Key Outcomes
- All agenda items were approved by a 3-0 vote, with Vice Chair Moreno absent.
- The next regularly scheduled meeting of the Budget and Government Efficiency Committee is June 18, 2025, at 9 a.m.
- The chair directed staff to explore legal and financial options to address water authority contract issues, with a possible closed session discussion.
- Staff will bring a new long-term fleet parts contract later in 2025.
Meeting Transcript
Good morning and welcome to the budget and government efficiency committee meeting of April 16th, 2025. Our committee liaison Natalie will provide information and instruction for the public to participate in today's meeting. While members of the public are able to attend the meetings in person, this meeting is being televised and live streamed on the city's website, and the council administration will continue to make arrangements for the public to comment using the Zoom webinar platform. Members of the public who wish to provide virtual testimony must enter the virtual key by raising their hand before the virtual key closes. The queue will close when the last virtual speaker finishes speaking or five minutes after in-person testimony ends, whichever occurs first. This will allow for better meeting management between the two platforms and ensure the committee is able to manage and conduct city business. And members of the public can join the webinar by computer, tablet, or smartphone by accessing the link which is listed online in the preamble language of the agenda on the city's webpage. If you need to participate by phone, you may dial one six six nine two five four five two five two. This information is also available on the agenda and will appear on the screen during the public comment period for each agenda item. Please note that if you're watching via City TV 24 or online, there may be a delay. So participate via the audio on your phone and mute your TV or computer when it is your turn to speak. And if you wish to speak on a particular item, wait for that item to be called, then raise your hand to speak by tapping the raise your hand icon, or if you're a call and participant, press star nine on your phone. If you raise your hand during a non-comment period, your hand will be lowered. Chair. Thank you, Natalie, for receiving for reviewing those instructions for the benefit of the public. A quorum is now present. We will now take up non-agenda public comment. The council members respect and appreciate the public's input and are fully committed to protecting every participant's free speech rights at council and committee meetings. Natalie, please proceed with non-agenda public comment. For rule 2.7, non-agenda public comment is an opportunity for members of the public to comment on items that are not on the agenda, but within the subject matter jurisdiction of the committee, each speaker will have two minutes. And we have not received any speaker slips from individuals in the committee room. There are four hands raised in the virtual queue. So I've set up the five minute timer for all those that indicate that they have non-agenda public comment in the virtual queue. We will begin with Terry Ann Skelly. Please unmute and provide your comments. Good morning. And I attend my planning group monthly and understand what my community needs and what their concerns are. I'm also a public health educator in elementary schools, and most importantly, the mother of three adult sons. And as a public health educator, I know that sound public health policies can save money. I speak often about the role of marijuana use and the role it can play in changing young adults. And it is very expensive. Young adults are easily manipulated by easy access and rampant availability to marijuana. They can begin a journey of drug use that interrupts the important years when they should be launching themselves into school and into careers. And assuming personal and societal responsibilities, this hurts everyone, the young person, their family, neighborhoods, and the city, which will cost money. Money for medical care that involves doctors and hospitalizations from decreased productive work and employment and diminish participation in and assistance to families and friends, school and church. It would save lives and save money if we reduce the influence and impact of marijuana businesses in our city, beginning with one easy first step. Remove marijuana billboards. We don't allow tobacco billboards. We can do the same for marijuana. Thank you for hearing my concerns this morning. Thank you. Our next speaker is the original. Please unmute and begin. Yes, you guys need to do something about the tent cities because they are absolutely horrific conditions that you're having people live in. Acting as though you're providing some kind of, you know, good service when there's you know rats the size of cats, the tents are in deplorable conditions, the food that's being given is slop. I mean, I don't even know if a pig would eat it. Um, the bathrooms are not taken care of. Their rules are coming down more and more strict, restricting the the um ability for people to even move around the tent city. The electrical outlets are completely hazardous and dangerous, potentially um could c are uh fire risk, actually. And you know, we're spending millions of dollars on these giving them to places like Dreams for Change.
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