Thank you, Chair.

Well, 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 queue by raising their hand before the virtual queue 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.

Council Council President Pro Tem Lee.

Councilmember Ila Rivera.

Chair Foster.

Also attending the meeting today is Charles Monica and Lisa Byrne from the Office of the Independent Budget Analyst, Deputy City Attorney David Powell from the City Attorney's Office, Rolanda Charbell, Chief Financial Officer, Matt Yagagin, Director of Policy from the Office of Mayor Todd Gloria, and Jacqueline Kennedy, Senior Policy Advisor.

If you're in person, please complete a speaker slip located at the entrance of chambers and place it on top of the box indicated at the speaker's lecture near the public comment microphones.

Please do so in a timely manner to ensure proper meeting management.

In-person testimony will conclude before virtual testimony begins.

Members of the public can also 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, please dial 16692545252.

The webinar ID is 161710317 pound.

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 channel 24 hour online, there may be a delay, so please participate via the audio on your phone and meet 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 and then raise your hand to speak by tapping the raise your hand icon, or if you're a call participant, press star 9 on your phone.

If you raise your hand during a non-comment period, your hand will be lowered.

Chair.

We have one hand raised in the virtual, two hands raised in the virtual queue.

I've started the five minute timer.

Blair Beekman, please unmute and begin.

All right.

Thank you.

Blair Beekman.

Thanks for the meeting this morning.

Hi to everyone.

A real congratulations to our election patterns yesterday.

Boy, in New York City, they they've uh elected a person from uh the DSA, our Democratic Socialists of America.

Um they're an up and coming um election uh body that's doing some really interesting work around the country.

Uh they've elected some people in the Bay Area.

Um it's hopefully how they can be addressing Trump, I think.

Um as what I've been trying to say here at the local level, we're trying to address that less over militarization.

We can really ask for that in their current uh uh customs and ice rates uh that they're doing their border ice uh issues.

Um it's that sense of dialogue and conversation that we can have with the federal administration.

I think we can really ask for uh middle ground.

And uh it's not so one-sided in in favor of really irrational policies of Trump.

And uh it's an argument I think we can be winning and they can be eventually agreeable.

So good luck to uh really good reasoning at this time that I think um we can um do some interesting work that works towards peace, not just here at the local level, but at the international level as well.

I'm interested how that can uh develop peace at the international level.

Um so thank you.

Uh I wanted to also comment uh really good luck that we can be continuing uh in these good efforts.

I think it's the process of open democracy that's really important at this time at the local level, uh definitely here in San Diego with our issues, and that for them to be cutting off the parking commission process uh is really a bad idea of city government.

And I hope that can get a lot more talk about how we can have openness and dialogue in in our decision making and not seriously close that off that you're doing.

Thank you.

Thank you.

Our next speaker is Judy Strang.

Please begin.

Good morning.

Thank you for this opportunity to share some thoughts with uh your committee, the budget budget and government efficiency committee.

You know, as a grandparent, how the city spends the our money means a lot to us, and of course, the more that you spend our and our sensitive to our young people and children, the better for all of us that are older and have watched the needs of our children skyrocket, especially since COVID.

I was especially pleased to see that there may be some more opportunity for the city to take in money uh from our pot shops.

And the part of the UT article this week that excited me the most was the concentration on I'm hoping delivery services, either illegal or legal from outside our city.

And it's what we notice the most in our neighborhoods are as the article points out, cars roaming here and there, as if they were delivering pizza or something, and that they advertise they can get there in a short period of time, which means that although they're out of county, they're roaming the city of San Diego.

So thank you for this forward movement that hopefully will bring in more money to the budget and protect our young people that much more from marijuana businesses, particularly the deliveries, which is the part of the business that we on the ground in our neighborhoods and with our young people see the most.

Thank you.

Thank you.

Madison Rapp, please unmute and begin.

Hi, thank you.

Good morning.

My name is Madison.

I'm here because vaping and marijuana use among teenagers in San Diego is rising.

And while it may sound like an issue the schools should tackle, it has very real consequences for the budget committee's work.

When young people use vapes or high potency cannabis, we see increases in mental health crises, ER visits, and chronic absenteeism.

Those problems don't stay in the schools.

They show up in our city budget through police and fire responses, youth diversion programs, and public health outreach.

Prevention today is far less expensive than intervention tomorrow.

That's why I'm asking the budget committee to sustain and where possible modestly increase funding for retail compliance checks to prevent illegal sales to minors and to maintain nuisance abatement resources for unlicensed shops.

These programs save the city money by reducing downstream service costs.

Another avenue is that the city already invests heavily in youth programs through parks and recreation libraries and the youth opportunity system.

Integrating evidence-based substance use education into those existing programs requires only small monetary investments, but yields large returns in health, safety, and long-term budget stability.

This committee has the opportunity to make cost-effective choices that protect young people today and reduce city expenses in the future.

Thank you for your time.

Thank you.

The five-minute timer concludes.

Becky Rapp, please unmute and begin.

Good morning, and thank you for this opportunity to speak today.

And I want to speak to a public health and a fiscal challenge that we're facing in our region, which is the marijuana-related harms.

Recent California data shows substantial increases in emergency room visits tied to marijuana, particularly among young adults ages 15 to 35, and older adults, seniors, pointing to greater strain on our hospital ambulance and emergency services system.

We're seeing more of these high potency THC products every day.

And the data is pointing to the fact that they are linked to elevated risks of severe intoxication, psychosis, and dependence.

And that means more demand for behavioral health treatment, inpatient psychiatric services, and long-term support, all of which carry a significant financial cost to the city.

For adolescents and expected mothers, the risks, the risks are even more acute.

And exposure can interfere with brain development, memory and attention skills in teens.

Locally, the San Diego County grand jury, if you remember, already pointed out that these trends are recommended.

Um that we push detailed fiscal and law enforcement impact reports.

We can start doing this now and being proactive and fiscally responsible.

I respectfully ask this committee to allocate funds for an annual city um collaborative fiscal impact study.

Invest in targeted prevention and education campaigns, and enhance behavioral health treatment capacity and traffic safety enforcement training.

By taking some of these steps, we can align our budget to your time.

Thank you.

And Chair, this concludes non-agenda public comment.

All righty, thank you for that.

We will now move to committee members, mayoral staff, city attorney, and IBA comment.

Do we have any comments?

Having none, we will now move to any requests for continuance.

Any requests?

Having none, we will now dispense with the approval of our consent agenda.

Do I have any request to pull an item from the consent agenda?

Hearing none, now we please proceed with public comment.

Thank you, Chair.

The public comment period for the consent agenda is now open.

The consent agenda includes item one, approval of the committee minutes from September 10th, 2025.

We do not have any slips submitted in chambers.

There is one hand raised in the virtual queue.

I've started the five-minute timer.

Blair Beekman, please unmute and begin.

All right, thank you.

Uh Blair Beekman.

Um I just wanted to quickly offer you had uh item five, I think, uh, in your agenda last in September about uh 2027 budget development and 2026 budget monitoring key dates.

And I just wanted to remind the importance that um uh I think there still can be time to review the AOPR use and um block use uh for the future of San Diego.

And um, I really hope that we can still be considering how to reduce AOPRs for the uh 2027 budget or for the 2026 budget still uh for the remaining uh year of 2026.

Um it's really an important concept, and I I I think um I think there's ways to do it, and we have to be uh mindful of the new um smart street light rollout and and how to include all of that together.

Good luck how we can be working on that.

Thank you.

Thank you.

And Chair, this concludes public comment.

Thank you so much.

And thank you to all the members of the public for participating.

I will now turn it over to committee members for questions and comments and to entertain a motion.

Do we have a motion to approve the consent agenda?

All right, we have uh motion by council member Ilo Rivera, second by Pro Tim Lee.

Seeing no other comments, uh can we please call for the vote?

How do I do this?

And that passes unanimously 4-0.

All righty, thank you so much.

We will now move on to our discussion agenda.

Natalie, please introduce item two.

Item two, fiscal year 2027, City Council budget priorities.

And if you are watching on City TV or online and would like to call in to make comment for item two, the number is 16692545252.

The webinar ID is 161710317 pound.

Chair.

Thank you so much.

Staff, please introduce yourselves for the record and let us know how much time you need for your presentation.

Uh thank you, Chair Foster.

Charles Modigov, your independent budget analyst, uh, joined by Lisa Byrne and Donnie Nguyen, who are going to lead the presentation of your first round of council budget priorities for FY 2027.

I believe the presentation was around uh 12 minutes, is that right, Lisa?

Yeah, a little less.

Great.

Uh and I will turn it over to them.

Thanks, Charles.

I'll begin with some background information.

The budget priorities resolution is the first step that council takes in providing input for the upcoming annual budget.

This resolution is initially developed and approved in the fall and updated in February.

Both the initial and updated budget priorities resolutions will be submitted to the mayor for consideration in development of the fiscal year 27 proposed budget.

As requested through the budget committee chair's call memo, council members submitted their priorities memoranda to our office on September the 24th.

This year's call memo also referenced a zero-based budgeting or ZBB, including a future informational presentation by our office and the Department of Finance.

ZBB is a method that builds a budget from the ground up, starting at zero, rather than using the previous fiscal year's budget as the starting point.

Additionally, the chair's call memo requested that council members identify departments that they would like included in related discussions.

Two council members provided departmental recommendations for ZBB.

Those were for the homelessness strategies and solutions and transportation departments.

Once our office received council members' priorities memos, we we reviewed them and summarized priorities receiving majority support in IBA report 2532.

Notably, Council President Pro Tem's memo deferred outlining his priorities given the city's current budgetary challenges until January when more information about the implementation of the fiscal year 26 budget is available.

Several other council members noted similar concerns and scaled back their priorities memos to varying degrees.

In addition to presenting the majority supported priorities in our report, we also include priorities supported by four council members, all they will although they will not be part of the resolution unless council designates them as such.

Also included in our report is the economic development and intergovernmental relations committee's recommended use of the one cent transient occupancy tax or TOT.

This is also known as the Council's Council Discretionary TOT.

As part of the council policy on TOT, City Council, through the budget priorities resolution, is to provide the mayor with a recommended use of the one cent TOT.

The first step toward that recommendation is for the EDNIR committee to provide the budget committee with its recommendation.

On October 8th, the ADNIR committee recommended allocating 4.28% of TOT revenue, currently estimated at 14 million dollars, to for arts, culture, and community festivals.

This is the same percentage as in the fiscal year 26 budget.

The remaining one cent TOT funds are which are estimated at 17 million was recommended for use in but balancing the general fund budget.

Last on this slide, our report includes a section on budget resources and mitigations.

I will discuss that near the end of the presentation.

And now Donnie will provide highlights of council members' priorities included in our report.

Thank you, Lisa.

The majority supported priorities are grouped into two sections operating and infrastructure priorities.

The listed categories, but these two sections will be reviewed in the next several slides.

I'll first discuss the operating budget priority section.

There were five priorities under homelessness and housing that received majority support.

Seven council members mentioned the preservation and creation of affordable housing in their memos, with five council members specifically supporting continued funding of the affordable housing preservation fund.

Six council members supported the housing instability prevention program, which provides rental assistance to low-income households.

The remaining priorities in the slide were supported by five council members and include the eviction prevention program, which offers education, legal services for renters facing eviction, homelessness prevention and diversion, and shelter beds and reparal services for LGBTQ plus individuals.

The operating budget priorities are shown on this slide.

Six council members expressed various levels of support for penny penny for the arts and five council members supported additional funding to implement the climate action plan, the addition of a marine safety captain to the lifeguard division, we to payment services in the public right-of-way, maintaining the FY2026 funding and/or operating hours for libraries and parks, and the addition of a deputy city clerk to position to support work related to legally mandated functions within the elections and city connections division.

Moving on to infrastructure budget priority section, the majority of council members prioritize transportation and mobility safety.

Specifically, seven council members supported pedestrian and by school safety measures, as well as traffic calming and control measures aimed to reduce vehicle speeds, and five council members supported repairing or replacing street lights.

Next, investments in street infrastructure and sidewalks, as well as additional resources for stormwater operations receive support from seven council members.

Majority council members also raise the need for improvements to existing facilities.

These include parks and recreation facilities, which receive support from six council members, fire rescue facilities, including funding of existing or new fire stations, which were supported by five council members, and lifeguard towers and stations, which were supported by six council members with a particular focus on the Ocean Beach and North Pacific Beach Life Guard Towers and the replacement of the Mission Beach Lifeguard station.

Lastly, five council members expects express support for a variety of projects with American with Disabilities Act Improvement Components.

This slide shows the priorities that were supported by four council members.

We note that these priorities are included in our report for council council's consideration, but as Lisa mentioned earlier, these priorities will not be a part of the FY 2027 budget priorities resolution unless council decides to include them.

On the left are the operating priorities.

These include funding to operate additional shelter beds at Veteran Village, full funding of the climate equity fund, enhanced police recruitment and retention efforts, continued funding for the no shots fire program, which supports services aimed at preventing and reducing gun violence, increasing funding for library materials and library maintenance, increased or maintained funding for equitable parts programming such as parks after dark and come and come play outside.

Providing lifeguards to access the fire rescues wellness program and SD Access for All, which provides Wi-Fi access and city parks and libraries, and a mobile hospital lending program.

Infrastructure priorities shown on the right include improvement to childhood signals and library facilities.

Now I hand it over to Lisa to cover budget resources and mitigations and recommended actions.

Thanks, Donnie.

No specific resources were identified by a majority of council members' memos.

However, six council members discussed exploration of various new resources, some of which include sales tax increase, general general obligation bonds, non-resident revenues, a fee for vacant storefronts, renegotiation of city-owned property leases, and renegotiation of leases where the city is a lessee, among others.

Additionally, five council members reference exploring grants and state or federal funding opportunities.

One item was supported by four council members, paid beach and pay paid beach and bay parking for non-residents, including several ideas for parameters for such fees.

Given the fiscal challenge challenges the city faces, and that there were no specific resources identified by a majority of council members.

To wrap up, we we request that the budget committee review the items presented in our report.

We are asking the committee to recommend to the city council the priorities to be included in the fiscal year 27 budget priorities resolution with any desired modifications to the budget priorities and or to the EDNIR committee's recommendation for one to for the one cent TOT allocation.

Committee modifications could include priorities in four council members' memos or additional priorities beyond those included in our report.

That said, council should consider balancing the addition of priorities with the recognition that with funding constraints, adding more priorities may diminish the ability to prioritize the most important items.

We also recommend that the council include its preferred revenue and resource options as part of its budget priorities resolution.

And last, the council is scheduled to hear this item on November 18th.

And council's approved resolution will be submitted to the mayor for consideration in the development of the fiscal year 27 proposed budget.

This concludes our presentation, and we're happy to answer any questions.

Thank you so much.

Natalie, do we have any public comment on this item?

Thank you, Chair.

The public comment period for item two is now open, and we did receive six speaker slips from individuals in chambers.

We will begin with those in chambers.

And if the following individuals can please come up to the front of the room, Christine Martinez, you'll be first.

You'll be followed by Bob Lehman, Sean Boyd, and Ali Seder.

And Christine, you'll have two minutes.

Thank you, good morning.

My name is Christine Martinez.

I'm from Arts and Culture San Diego.

Um we have a group of more than 150 arts and culture organizations, large and small, throughout the city.

And I'm joined here today by leaders of of several of those districts, including many of yours, who just want to talk about the importance of arts and culture in the community, which we all know you have all been great supporters of.

It's no secret that operating in San Diego is just expensive and getting more expensive.

We are not unique that it is impacting us greatly.

However, um our funding has been cut from many different angles.

Um, state, federal, um the the tone is that we're doing more with less, and we want to provide those programs to all of your constituents in programs that create a sense of belonging, that are enrichment for our children and our elderly, um, for our underserved communities.

This is where they can see themselves and they can see careers in the arts.

And it's been shown that arts is a great economic driver here in the city.

So keeping funding flat for fiscal year 2027 would be 4.28 percent.

We're we're very encouraged by the recent recommendation from EDIR, and we ask that you consider that today again because remaining flat, while it does really reflect us having um to do less or do more with less, it is a show of good faith, and it is really um just recommitting to what you guys have always been so supportive of, is keeping arts and culture top of mind and hopefully one day getting back to the discussion for Penny of the Arts when things are more flush.

So thanks again.

Thank you.

Bob Lemon.

Good afternoon.

Uh good morning, council members.

My name is Bob Lehman and the executive director of the San Diego Museum Council and the Vice Chair of the County Arts and Culture Commission.

Thank you for this important TOT discussion and your attention to the needs of the Cultural Affairs Department and specifically the needs of the arts and culture community.

We are a true economic engine in this city, driving tourism, spurring jobs, and contributing to the very fabric of San Diego.

Museums, theaters, music, heritage festivals, and creative spaces are not just amenities.

They're central to the civic civic identity and economic vitality of San Diego.

Arts and culture are powerful forces for healing, fostering individual well-being, and strengthening community bonds.

They are also vital vital for our freedom of expression and the cornerstone of democracy that faces increasing threats.

Arts and cultural ecosystem strengthens well-being, fosters belonging, supports free expression, and fuels one of the most dynamic creative economies.

These investments reach every community, support thousands of jobs, and are proven for public tools for public health, youth development, and community resilience.

Access to the arts reduces loneliness, strengthens mental health, particularly for young people, and builds a sense of creative adaptive workforce skills in an era of AI, climate transition, and rapid economic change.

San Diego's creative sector is one of the region's greatest assets and deserves the same investment and visibility as any other economic driver.

We are being hit with cuts from every direction, city, state, and federal, and inflation is such that even remaining flat and funding truly means a cut.

So today the arts and culture community is asking you to keep our percentage TOT funding flat for FY27 at 4.28%.

Together it will elevate local voices, expand access, and ensure that the arts are seen not as a side note, but as central to the story of who we are.

Thank you.

Thank you.

Sean Boyd.

Good morning, Council members.

I'm Sean Boyd, Executive Director of Trinity Theater.

Thank you for discussing the use of the tourism occupancy tax and your reinvestment in creative economies.

Arts and culture is an essential economic driver, one that drives over 1.1 billion dollars in economic activity in the city each year.

In 2022, the county reported that the industry paid $321 million in taxes, which in turn supports the many programs our constituents rely on.

As our institutions continue to be hit with funding cuts, our ability to provide essential services, workforce development, and career readiness skills diminish.

Further, funding cuts mean less money that institutions can pay in taxes, becoming a self-fulfilling prophecy of future cuts when tax revenues decline.

Right now is the time to invest in our economy.

Do not sell on a down market.

Please keep our percentage of TOT funding flat for fiscal 27 at 4.28%, unless, of course, you feel empowered to raise that number.

I and the full San Diego Creative Economy looks forward to working with this committee and the entire council during every step in this budget process.

Thank you.

Thank you.

Ali say there, and you'll be followed by Leslie Laham and John Haiken.

Good morning.

Thanks for the opportunity.

My name is Ali Sad.

I'm uh with Persian Cultural Sanitarian San Diego.

And um thanks very much for this uh for the attention that you pay for the for the uh arts and culture in our community.

Uh I'm talking most personal uh here.

Our organization, Persian Cultural Center, uh during the Norul celebration of uh the starting of uh spring, we have several uh gatherings that attract four or five thousand people, mostly from San Diego and and surrounding counties.

These are really uh effective uh tools for cross-cultural activities that we we intend to do uh in the city.

So budgets, as we all know, is cutting for every direction.

So we are asking to just you know keep this ratio the same, at least.

Uh would be a still cut.

Uh but um it would really help uh our organizations and similar organizations to uphold the culture and um uh identity here in San Diego.

Thanks for your attention.

Thank you.

Leslie.

Good morning.

My name is Leslie Latham.

I am artistic director of Project Blank.

I serve districts three, eight, and nine.

Um, and in challenging economic times, public support for the arts becomes not a luxury, but a lifeline.

Arts and culture sector enriches lives while fueling the economy through tourism, small business growth, and job creation.

And beyond the numbers, the arts strengthen communities, foster inclusion, and celebrate what makes each neighborhood unique.

As inflation tightens budgets, families seek affordable ways to connect and find joy.

And history has shown that in hard times, people turn to the arts as an affordable source of comfort and inspiration.

And fortunately, San Diego offers many free and low-cost opportunities.

But these experiences depend on stable funding, and I'm here to urge the city to maintain the 4.28% TOT funding for FY27, which is an investment in San Diego's economic vitality, cultural richness, and community spirit.

Thank you.

Thank you.

And our final speaker in chambers is John Haikin.

Good morning, Council members, committee members.

Um, I'm John Haiken.

I'm executive director and co-founder of Fern Street Circus based in City Heights, and I live on 43rd Street in City Heights.

Uh I want to say uh arts and culture shows up and has shown up for many, many years.

Uh, and that's because we serve every corner, citizens of every corner of this city.

Uh I would say Fern Street Circus, we we premiered at Grape Street Park in Golden Hill in 1991 in September.

Two days ago, I came to Grape Street Park of all places and uh brought and grabbed three dog owners.

I don't know what happened to their dogs, but the uh the uh border patrol locked themselves out of their own SUV.

But these aren't cops, Keystone Cops.

These are serious, a serious force that is bringing fascism to the United States.

And one of the ways that uh that we can as citizens stand up to that is by celebrating our our cultures, by making art, by supporting programs and processes that prioritize care and welfare of human beings over cruelty and avarice.

So I I come to you to say that you know it we ask that that the council consider uh keeping the TOT flat.

Uh we would love it eventually when things level out that we could consider seriously uh institutionalizing painting for the arts, but art matters.

Uh Hans Eisler, who was a German composer who was deported from the United States in 1948, said music can't kill fascism, but it's necessary.

And I would say the same thing here that we as a sector are necessary for uh enforcing the value of human beings against a force that is uh trying to destroy human institutions.

So thank you very much.

Thank you.

This concludes in-person public testimony.

We will now move to the virtual queue.

There are two hands raised in the virtual queue, and I've started the five-minute timer.

Lawyer Beakman, please unmute and begin.

Hi, thank you.

Um interesting.

Thank you.

Um I am uh interested in um for this item.

Uh important budget issues that you mentioned uh how you're budgeting uh smart streetlight projects coming up.

Um I'm really deeply concerned that um you are uh completely ending the uh parking commission process as a part of the rollout of new smart streetlight budgeting and practices.

Um I think we're at a time in San Diego we have to be considering that open democracy and participatory democracy is really important, and we have to be developing those concepts.

The ADU, I think process went really well and really interesting.

It was a really community, it was a community effort.

Um garbage issues with with uh city government lead, uh I think community voice was really important to help shape direction for the future of garbage issues, and that you need that community dialogue to better develop uh the future of those issues.

Um you're cutting out the parking commission process with really serious intentions to avoid public dialogue.

It's pretty clear, and it's frustrating and aggravating, and I'm really angry about it.

I hope we really work to reinstate the parking commissions and really work towards that they can have dialogue between the different neighborhood commissions and and develop conversation and develop help and advice and ideas for the process and not feel they're an adversary that you're treating this as.

I don't want to be working towards that.

I want to be working towards uh a community sense of better ideas.

Uh good luck that we do that and that we build smart street lights in that same good fashion.

Thank you.

Thank you.

And our final speaker with their hand raised is Sally Small, please begin.

Good morning.

Uh thank you very much for working on this uh forever project.

Um frustrated as always because I'm looking at things.

I'm glad about the zero budget balance uh as a starting from the ground up, so maybe some wasteful spending won't happen in the first place.

But I I uh am concerned about things like yes, the the penny for the arts.

Uh we need to keep keep up with that.

As for um the things that seem to always get cut, um, going back to the last ones for uh priorities that only came from four council members, climate equity fund, no shots fired program, library materials and maintenance, equity and park programming, and SD Access for All.

What do you know?

That's the one that really hits D4, D eight, and D9, uh, as Mr.

Foster knows.

Um we're gonna get left behind again unless we fight for specifics.

Um as to the transit mobility, street sidewalk, stormwater, all getting uh equal uh number of of uh council members and park and rec only getting six.

Um I guess the question is going back to what are our priorities?

Who do we care about, what do we care about?

Thanks.

Thank you.

And Chair, this concludes public comment on item two.

Thank you so much.

I will now turn it over to committee members for questions and comments and entertain a motion.

We have a council member Elo Rivera on the rights.

All right, uh, thank you, Chair.

Charles, uh, thank you.

Uh Lisa, thank you for your work.

Um, everyone in the IBA's office.

Um, I I think there's no illusions that this is gonna be an easy budget uh cycle.

Um I think there's some hope that it won't be as difficult as last year, um, as we I think made some difficult decisions last year that put a big dent in the structural deficit.

That being said, the structural deficit is there, it needs to be dealt with.

And um I I know that as I'm listening to the folks um here in the room and um have conversations with people in the community.

Uh one of the things that I I wrestle with is is wanting to be honest about what's necessary to provide um what you all deserve um need and and want and I don't see a path there without more resources, and I I just want to be very direct about that.

I know I have been in the past, uh and um so um because I think these are worthwhile causes.

I do think that we'll be better off as a city if we invest in them, and um we either have to I it's actually probably a combination of both of identifying additional resources and making choices about um what it is that the city is going to invest in, who it is and what it is that we're going to subsidize, and um I I want those decisions to be based on um city residents and those who have least received investment from the city in the past.

Um just the little bit of context there.

Um with respect to the the recommendations in front of us, uh I think there's um a a lot of good stuff in there.

Um I appreciated uh Charles that you and Lisa drawing attention to um these areas where there was four recommendations or we're we're close to having some clarity and could provide a little bit more, and so um Chair Foster, if I may, um I'm gonna make a motion just to kind of get the conversation started and um given the limitations of the Brown Act four is a pretty strong number actually this to start with.

Um and so um the motion would be to move the the recommendation and requests that the IBA include in our fiscal year 2027 budget priorities resolution uh to be heard at council on November 18th, 2025.

The additional priorities receiving support from four council members as outlined in IBA report 25-32, as well as the following additional priorities, a cost recovery fee for uh vacant storefronts and abandoned properties.

Chair Foster, I know that's something that you had also included.

Um we have um I I know there's uh similar properties in in actually let me get through the motion and then I'll I'll add a little context there, a little color to it.

Uh updates to lap city owned property leases and a non-resident paid parking program, non-resident.

I'm gonna say that five times, non-resident paid parking program for beach and bay parking that would remain free to residents, free to residents, with additional cost me with additional user fees applied to non-residents.

Um just uh to some additional context there, uh Chair Foster, you and I both included the the um recommendation for cost recovery fees for vacant storefronts and abandoned properties.

Um those vacant storefronts those abandoned properties have significant impacts on our communities.

They have significant public safety costs.

I spoke with an officer a couple weeks ago who was wearing a bandage on her head because she had entered into an abandoned uh building and hit a a uncovered uh nail and needed uh treatment as a result of that.

Um they are constant sources of frustration and uh danger in our communities, and in my opinion, oftentimes they are investment properties of people who do not live in this city, are not do not give a damn about the neighborhoods that uh these properties reside in and are simply um expecting to enjoy the benefits of their property value rising that they can cash in one day in the future with no regard for the impact it has on the surrounding neighborhoods, and there's a real cost to the city of San Diego as a result of that.

Um Public Utilities Department alone, I believe has uh 55 uh leases that have lapsed.

Um might be even more than that.

Um across the city, this is a continued issue, which basically means that the city's not getting its fair market value of is not getting fair market value for for uh properties that we are owned that we own and are leasing uh in many cases to for-profit entities.

Uh, that needs to be updated uh in order to make sure we're recovering um we're bringing in everything that we we can and should.

And then finally, um, and I I know this one's probably more conf uh controversial, um, but we we're having a conversation about the the prioritization of updating and and and um better maintenance of lifeguard facilities of um a number of of things that we want to do and prioritize and we remain I believe the one of the only cities uh coastal cities in Southern California that doesn't charge um anything for parking.

I don't want us to charge residents for parking at our beaches and bays uh full stop and I I think it is the only responsible thing to do given the budget situation that we have is to begin asking visitors to pay their fair share.

Um in doing so there is significant significant revenue that can offset pressure that is making us choose between investing in our city employees, arts and rec uh arts and and culture programming, um, park and rec and library programming, and that is unnecessary.

Uh it's unnecessary to to have to make those choices if we're willing to ask visitors to pay their fair share more.

So my hope is is that the administration will hear us loud and clear that this cannot be a resident fee, um, that they will move expeditiously to get uh the things in place to um allow us to recover the cost of visitors um enjoying our beaches and bays of the uh they make it just sorry, just to make this one point one more time.

Our lifeguards, a majority of their rescues are non-residents.

Uh that I think that's worth noting.

So again, I I understand that it's controversial.

I understand that we'll get pushback, but given that our responsibilities lie in serving the residents of San Diego first and foremost, I think asking non-residents to pay for parking at beaches and bays is the right thing to do, it's a responsible thing to do, and it is a way of addressing the structural budget deficit that continues to plague us.

Um thank you, Chair, for uh letting me go on there.

Um, and uh that is my motion.

All righty, thank you for that.

We have a motion on the floor.

We will now go to council member Moreno.

Thank you.

Um, and thank you to the IBA for your work on compiling all the council members' budget priorities for fiscal year 27.

Uh, there's a lot of common ground that we all support, even with another very challenging budget year ahead of us, uh ranging from keeping um our libraries and parks open to making sure we invest in preserving affordable housing units across the city.

Uh but there are a few priorities that I want to highlight uh that I think are very important.

Uh first, I want to note that the IBA report indicates that only four council members prioritized equity and parks programming in their memos.

There are various positions needed in the park and rec department to fulfill the auditor's recommendation on how to increase equity in park programming throughout the whole city.

The department is currently conducting a needs assessment and marketing plan to help bring equity to our parks in very low income areas.

That work needs to be supported by additional staff and resources.

Also only received support from four council members.

The funding was essentially suspended last year, and rightfully so.

But we need to get back on track.

Third, the construction of Grove neighborhood park in Otai Mesa Nester needs to move forward.

The park has been designed and simply requires funding to begin construction.

The park is for a new, and we're talking about a vacant piece of land in the city of San Diego.

The project is for 11.5-acre neighborhood park located east of the I-5, bounded by 25th Street, 27th Street, and Grove Avenue.

Building this park is vital to ensure residents in Ota Mesa Nestor have equity and access to parkland just like other wealthy communities have in the city of San Diego.

This project has been broken into two phases.

It has received close to five million dollars in funding from the state budget this year to support existing funding that has been allocated over the years.

It's absolutely critical that phase one be built and include park amenities that the community will be able to enjoy.

If we're gonna build a park, it needs to include things like play areas, benches, green spaces, and picnics.

This is just absolutely critical.

I included support for arts and culture programming.

Um sorry, I support uh uh I support including uh funding for the arts and culture programming to receive 4.3 percent of total TOT funding in fiscal year 27, and that in part that the council discretionary 1% should be used to help achieve this goal.

I do support the EDNIR's uh committee recommendations to allocate 4.28 of total TOT revenue for arts, culture, and community festivals and the remaining funds uh to balance the general fund need.

Uh regarding um, I do want to address the motion on the floor.

Uh while I do support the inclusion of the items uh receiving support from four council members and also updates to a lapse city-owned property leases.

Um, regarding the leases, uh, we have discussed this at the audit committee, and I've pushed city staff uh pretty sternly to move forward faster with these leases.

They currently are doing about 250 leases, uh updated updates to the leases per year.

Um, you know, we definitely want to continue pushing in that regard.

Um, I do have grave concerns regarding uh the other items included in the motion, specifically regarding um the mission bay parking fee.

Um to me, it's unclear how this is gonna uh generate revenue sufficient to offset the cost to properly implement and maintain the program.

Um also the fees impacting vacant properties.

Um need to see more information before I put my support in that.

So, as such, I will not be supported.

I will not be supportive of the motion on the floor.

However, I do look forward to working with my colleagues to further shape the fiscal year 27 budget as this budget priority recommendation resolution moves forward uh to the full council.

Um, I would also appreciate some additional analysis from the IBA on the outlook for fiscal year 27 revenues prior to our next round of our budget priority memos in January.

Thank you, Council uh Council.

Thank you, Chair.

And that concludes my comment.

All righty, thank you so much for that.

We will now move to Pro Tan Lee.

Thank you, Chair.

Thank you to the Office of the IBA for compiling this comprehensive report of all of our priorities.

I hope at least on my end, I made your job a little bit easier with our memo.

I do want to start off by thanking Budget Chair Foster for taking a new approach when it comes to the fiscal year 2027 budget, especially with a focus on improving accountability and understanding how zero-based budgeting could be one approach towards some of the operational challenges that we currently face.

And I I look at, I don't know which council office might have recommended transportation, for example, but I I do look at the transportation budget this year, where we now understand as a whole that the budget they developed uh was short the funding that was necessary for them to operate with the overtime capacity that they need.

Um and frankly, it's still very frustrating to me that that was something that was missed in compile compiling FY2's uh 2026's budget.

Um I was pleased to see priorities and funding strategies from a number of colleagues that I believe uh align um with our own priorities.

And um as noted in my memo, uh I think very much in a position right now where I'm mindful of the fact that the city is facing uh a number of economic headwinds.

We have not seen our uh mid-year report and our next five-year outlook to get a sense of where we stand.

Um and and frankly, I I had a hard time uh compiling a what I would feel like more so is a wish list uh of our communities that might not reflect the challenges that we're facing at this moment, uh, which is partially why I really felt that it was important that we continue to garner more information to understand where we stand at the mid-year as well as our outlook heading into this next year's budget, so that we can do a better job of providing a serious list of priorities for consideration.

Um I want to reiterate the same reservation I shared last year that even with the possibility of additional revenue, um, we will still need to make some difficult choices in terms of how we prioritize short-term versus long-term needs out in the city, and then balancing also how we utilize cash resources that are available as well as short-term and long-term debt, um, because that that mix is ultimately what we have available to us and it's limited more so than ever.

Um while we do have significant unmet needs and challenges, um, I still believe that St.

Again certainly deserved to see continued progress in terms of our core city services and long-term solutions when it comes to addressing our underinvestment in citywide infrastructure.

And I recognize our budget doesn't allow us many opportunities to do that, but I don't want to lose sight of the fact that we are continue to defer significant needs um throughout the city into future years.

Um with that said, I do also want to address the motion that's at hand.

I I think this council as a whole has expressed its desire to see additional revenue, especially as an alternative to simply making cuts uh across the city.

Um, and this council has been very supportive so far at finding ways to generate additional revenue, and I will continue to be supportive of efforts to explore every opportunity that we have.

Um my only concern uh about the motion is is putting specific revenue priorities into the IBA's report, um, which frankly I'm just gonna note I when the mayor compiles a budget.

Uh I often feel like sometimes the priorities that we have outlined through the report are taken just as a wish list, and it's not necessarily reflected in the actual budget that we see proposed.

Um so that is already a disconnect that I see uh in existence, and it's a frustration that I have.

And so I'm certainly supportive of the broad notion that we need to support revenue options across the board, but putting them specifically in this memo, and I understand the intent of doing so, but it it's committing the council to specific asks and not others, um, some which I've not gotten details about to explore and understand.

Um I too, frankly, am concerned about an effort on the heels of what I've considered to be a very frustrating rollout of Balboa Park parking um to now chase after another parking measure if I don't trust that we're going to deliver in a way that earns trust from our residents.

And we can say all day that our focus is going to be on non-residents versus residents, but I am still feeling like we are falling short of ensuring that that promise is being kept with the notions that we have taken so far.

So with that said, I I respectfully, you know, would prefer to move forward the um the recommendation as the IBA has along with the items that were identified by four council members or more.

Um but at this time would prefer that we uh not include the additional revenue line items um in the motion.

Thank you.

Um understood and I think just from a I'm sorry, looks like council member Moreno's back on the lights, we will um go back to Councilmember.

Thank you.

Um I didn't hear a second to the motion, so I'm happy to propose that we move staff's recommendation and include the items received um the items that receive support for four council members and the lap city owned property leases.

So that's my motion.

All righty.

Let's if we can, let's just pause for a quick moment just so I can get in just want to touch space with the city attorney.

So right now we have a motion on the floor.

Um I have not chimed in just yet, but um if the vote is a two-two right two two, then this entire item would essentially move with no recommendation.

Is that accurate?

That is correct.

Um it would also need a second the motion uh to have a vote.

But but yes, you're correct.

Uh, it would be forwarded to council with no recommendation.

Okay.

Um let me ask this question of um the original maker of the motion.

Are you okay with removing the um items that were indicated by Councilmember Moreno?

I am.

I I I want to address that though because I think Council President Pro Tembly's point is an important one.

And uh Matt, you know, we've had multiple conversations, and I think my frustration right now is a conversation that should have started in 2022, when we knew where we were at in terms of the structural budget deficit, where we knew what the budget projections were going to be.

The IBA did a extremely thorough analysis of non-resident revenue options, which I believe zero were moved on despite repeated requests.

And now we're in a situation where with uh comp I completely understand why my colleagues are uncomfortable, including what would be millions of dollars in revenue, because the last time we did it, it was a rush job, and residents ended up getting hit with the fee.

So I have I have no problem removing it, but I I'm Matt Rolando, like it's it's millions and millions and millions of dollars.

That's not an exaggeration.

And so I'm gonna ask that um and and Chair Foster, if you're interested in being part of the conversation by all means that we sit down and we have serious conversations about how we get this stuff moving forward and present it to the the council in a way where they can be confident that we're not gonna have kids in front of us asking about how they're gonna figure out how to park, um, where it it completely foreseeable problems aren't popping up because I understand why there's there's concern.

And at the same time, I also know what the conversation is gonna look like in June if we don't get this stuff done.

It's gonna be other kids asking us to not close their library.

So um by all means um I'm supportive of of council member uh Moreno's motion.

Uh I just have significant frustration that we are not acting, and as a result of that, the city is worse resourced, and our residents are going to feel the pain of that.

Councilmember Elo Rivera, if I could uh respond to that.

Uh the administration um it is open to considering all budget mitigation.

Um all budget mitigations, including the additional revenues.

Um, the three items that were uh listed in your motion.

You have our commitment to sit down with you and whoever else may be interested to vet those out, um, whether it be on the the parking issue, the mission bay parking issue or uh the vacant storefront fee or the evaluation of city leases that are in holdover.

Uh we're more than happy to sit down with you and evaluate those uh revenue options moving forward.

I appreciate that.

Thank you, Chair.

All right, so if I understand this, we have uh a um friendly amendment to the original um motion, and that is to remove the additional um revenue uh potential revenue priorities, and that is removing the cost recovery fee for vacant storefronts and abandoned properties, and the non-resident paid parking program for beach and bay parking.

Um that leaves us with the um further exploration of the property um leases.

Is that correct?

It wasn't a friendly amendment though, it was a whole new motion.

Well in my part.

I understand, but I think other than I just want the I I want the record to be clear because my my it was not a friendly amendment.

Okay.

All right, thank you, council member um Ilo Rivera.

Um I think um, and and I totally understand my colleagues um position, and I understand the complexities and concerns surrounding the budget.

At the end of the day, I've always said we have a six billion dollar budget, and for me, the conversation tends to be the same.

How are we going to prioritize the six billion dollars?

Um I will say this, I think it's disappointing that we are continuing to have a conversation regarding equity, and yet we don't see the numbers from this council to to support them outright.

I think that speaks volumes, and I think that's something that we need to um really continue to understand and and come to terms with what type of city do we want.

Um I am disappointed that um we would not formally look at vacant storefronts.

Um you can come to District 4.

I have several, um, and we when we talk about the safety concerns, um I have homeless that squats, um, fires that get started, um, and yet we have the challenges with getting um code compliance out to be more proactive and to address those issues.

I like to think as a council and the mayor's office that we do not want to see public safety issues of that magnitude.

But unfortunately, when you come to District 4, it's quite a bit, and they are sitting and sitting vacant, and it's something that I think we need to address.

Um, so um Matt, um, it's something that I would like to um have some discussions about um because I've had quite a few fires.

Um right now I have uh property owners that are I believe are going through the permitting process where they've had some challenges on some multifamily type projects where they are going to start looking at demoing um the properties because of the issues, and maybe that's something we need to look at code compliance or I'm sorry with DSD in regards to um how we handle the vacant properties when they are going through entitlement processes and certain things because it is an eye sore and and a constant issue.

Um so a little disappointed that we're not um looking to um go on the record and move forward with that.

Um also I think when we look at parking, um I would agree that the conversations on parking have been um disappointing.

Um but also I'd like to think that the conversations are not new.

Um it's my understanding we do have a state beach in which there is a fee that is charged.

Um and so if we can't, I'd like to just see if the IBA can do some um analysis and and and look at what the state does, how they do it, um, how they you know spend the you know spend the the dollars that they are uh generating um and and look at some benchmarking and just see um if it is um worth the discussion.

Um but I will also say that and I've said this on numero occasion numerous occasions.

If we cannot acknowledge what we have done in the past needs to change, then I don't think we're serious about solving the structural deficit.

And um and so with that I do also want to um just thank the IBA for the work that they have done.

Um also just with certain things that are being added back into the um the the items that only received four um recommendations um by the council by my council colleagues.

Certain things are indicated as ongoing um funding, such as no shots fired.

So I just want to make sure the public understands the difference between a a an ongoing um type of expenditure versus a one-time um expenditure.

So essentially something like that, we are simply indicating we do not want to see that cut, right?

Um versus we want to see money added back in.

Um same thing.

I think there's some things that we did with SDE access for all where that went to an ongoing basis, um, but recognizing there's some challenges and some things that took place in regards to actual devices and intent with grants and so forth.

Um the other thing that did not come up in the conversation are the grants.

Um as always leave no turn no stone unturned.

Um we should be maximizing every grant opportunity that exists.

Um so with that um I will um we have a motion on the floor by council member Moreno, a second by um council member Sean Ilo Rivera, and we have Pro Tim on the lights, and we will go back to um pro Tim Lee.

Thank you, Chair.

And and I should I should note just for clarification too, I I'm not against exploring any of these items, and so um I understand the desire to look at vacant storefronts um and vacant.

I I I'd like to know exactly how we're gonna define that as well, right?

Because in my district in particular, we have a significant problem, not of old vacant storefronts, we have a significant problem right now of brand newly constructed office space, hundreds of thousands of square feet that is vacant because of the challenge that we're facing as anyone saw in the UT yesterday across the city with vacant office space.

And so I I think understanding what the impacts are the the look in each of our districts may be drastically different depending on the type of spaces that we um see.

Um and we certainly have talked about some of the other revenue ideas.

Um I again I think my focus right now is that at this stage of where we are with the budget priorities.

Um I think there's a lot to explore, and maybe in January there will be a more solid list of priorities that the council as a whole will have developed that can be inserted that we would be putting on the record to ask for exploration.

Uh but I want to be able to do so in a way that doesn't commit us to making those changes.

Uh I did have a request for council member Moreno, which was you had mentioned that the review of um expired leases and the the potential to update leases is something that's being undergone the discussion in the audit committee, and that is something that I believe staff is already in process of chasing after as well.

Um I think if if you would be open to it to keep this cleaner, I I would actually offer a friendly amendment that we remove that revenue item from being specifically listed as a priority.

And that's in part because I I just don't know that we need to list out one revenue idea here and not others.

Um if the full council chooses differently, I get it, but I think there's gonna be a lot more in discussion in the months ahead.

So I'm I'm fine with that.

So in this instance, we're fine with the friendly amendment, so we will remove any revenue items.

You're good.

Okay.

Thank you.

All right, thank you for that.

Um I think just um to to bring this to a close, um, when we talk about uh zero base um budgeting.

Um I'd like to um make the request um that we do um have some additional conversations.

Um I am going to be working with um your office, the IBA's office, um Rolando to have a presentation at a future um budget committee um hearing um so that we can make sure everyone is well informed.

Um but with that I would like to um really explore um the departments that were mentioned homelessness um services um transportation and um I would like to look at contracts and and and um dive into that as that is always a topic of discussion um in looking at um and and and I'll just be frank the items that um when we just reviewed IT items and just looking at carrying a 20 percent contingency at the present time.

Not sure if that's the um as the you know I understand we're talking about capacity in those instances, not necessarily um expenditures or allocations, um, but I just think we need to um tighten our bootstraps and and and have a little more accountability and I think it speaks to um our directors and our departments understanding um their services and how they're deploying those services and what the actual needs are versus wants.

Um so um I will leave that there.

Um we have a uh motion by um council member Moreno, a second by council member Elo.

Oh, I'm sorry.

I was just for the record, could we please just clarify the vote?

I know there's the motion.

I know there's been a few back and forth with it, but perhaps I think the IB may be better positioned to do so.

Happy to, as I understand it, the motion is to approve staff's recommendation, which is essentially the IBA report with the addition of including all items in the report that included support from four council members as part of the budget resolution.

That's correct.

Thank you.

Can I clarify that?

Um, when you say all items uh four council members did support the non-resident um beach and bay parking.

So all non-revenue items or if I understand, based on the conversation of my colleagues, that one item will be removed.

Correct.

The intent of my motion was to move all non-revenue items.

Okay.

That was the intent of my motion.

Thanks for the clarification, Lisa.

Support for all items, all expenditure priorities mentioned in the IBA report, including those that received support from four or more council members in the budget priorities resolutions.

And uh just an additional note in several of those council member members there were requests from my office to pursue additional um explorations or analyses of both revenues and expenditures, and we will be following up with the council members who made those requests and are happy to do that separate and apart from this process.

Alrighty.

With that, um, we will call for the vote.

And the motion passes unanimously 4-0.

All righty, thank you so much.

Uh moving on to the next item.

Natalie, please introduce item three.

Item three is second amendment to cooperative procurement contract with Dell Marketing for Microsoft software subscriptions and services.

Chair.

Thank you so much.

Staff, please introduce yourself for the record and let us know how much time you will need for your presentation and begin.

Excuse me, my name is Maureen Medvedev.

I'm a deputy director in the Department of Information Technology.

With me here today is Brendan Daly, Deputy Director, and the city's chief information security officer.

We are here today to request approval of an ordinance for the second amendment of a cooperative procurement contract with Dell Marketing for Microsoft software subscriptions and services.

The amendment increases the not to exceed amount by 1.3 million for the remainder of the six-year term that ends on October 31st, 2026.

The Department of IT manages over 100 contracts that provide technology tools and services to the city, and some are large enough to reach the threshold for city council approval.

In alignment with the Department of IT's strategic plan and technology roadmaps earlier this year, fiscal year rather, City Council approved a contract for SAP as needed consulting services and a contract with Motorola for public safety radio infrastructure and operational support services.

In addition to the actions today, we will be returning in quarter three for a managed print services solution.

The City of San Diego makes extensive use of Microsoft products like Windows, Teams, OneDrive, Outlook, Office, SharePoint, and others on over 14,000 devices to communicate and manage daily operations.

The city also uses Microsoft products in over 800 servers and for data bus database software used by our city's business applications.

Microsoft mobile applications on our phones and laptops and the Microsoft Office 365 suite of applications.

The city joined hundreds of other California public sector organizations in leveraging the Riverside County Cooperative contract for Microsoft.

The cooperative contract continues to include volume discounts offering the best pricing available to any public sector organization, including state agencies within the state of California.

New solutions like the Microsoft Copilot AI assistant are helping employees get more done and improve their work quality faster.

The Microsoft contract also supports continued cloud migrations and modernization of the city data center services and improved security controls.

The previous three second amendment, I'm sorry, the previous first amendment totaled approximately 19 million and exercised the option to extend the agreement for its final three-year option period.

Productions at the time included run the business requirements while providing capacity for modernization and enhancements to allow room for additional licenses for tools like Visio, Power BI, Teams phone lines, cloud services, Azure OpenAI, and server software.

This amendment provides a small increase to the not-to-exceed amount of 1.3 million until the end of the term in October 2026.

This is a proactive measure designed to ensure that departments who are evaluating new innovations to improve city services will have sufficient contractual authority until the end of the contract term.

The funding for any enhancement would still be dependent upon approval of annual city budgets and each individual department's budget.

The recommendation is to approve the ordinance authorizing the second amendment of the co-op procurement contract between the City of San Diego and Dell Marketing for the acquisition of Microsoft software subscriptions and services for a cumulative not to exceed amount of 34 million over the six-year term.

Again, additional expenditures for this contract are contingent on approval of each annual budget by city council.

And this concludes our presentation, and we'd be happy to answer any questions you might have.

Thank you so much.

Natalie, we will now move to public comment.

Thank you, Chair's public comment.

Public comment period for item three is now open, and we have not received any speaker slips in chambers, and there are no hands raised in the virtual queue.

So this will conclude public comment for item three.

All righty, thank you so much.

I will now turn it over to committee members for questions and comments and entertaining motion on item three.

We will start with Pro Tim Lee.

Thank you, Chair.

Um, thank you to the IT department uh for briefing our staff on this item as well as the item following this.

Um appreciate the staff bringing forward contract amendments in advance and for further explaining how these are critical to our city's operations.

Uh so with that I will go ahead and move the staff's recommendation.

Thank you so much.

We have a motion by uh Pro Tim Lee, second by council member Ilo Rivera.

Not seeing anyone else on the lights.

Um I do think it looks like that there will be a new RFP or procurement process that's going to be required.

Um it looks like my office did um ask some questions and received a response, and um the response reflected that there is another co-op procurement process in place.

Um, I think my only concern is um as we are continuing to utilize the co-ops.

Um, I just want to make sure that we are doing a cost-benefit analysis.

Um, and so when you bring the item forward, I think as we are talking about the dollars associated, that we should be showing the proper justification that that was done to make sure that we are getting the best pricing, and it is beneficial to continue to do the co-op.

So um I will leave that there.

Um, no other members on the lights.

Natalie, please call for the vote.

Each committee member can please register their vote.

And the motion passes 3-0 with Vice Chair Moreno Apson.

Thank you so much.

With that, we will now move to item four.

Item four approval of an ordinance authorizing the mayor or designee to execute the first amendment to the as needed cooperative procurement contract with Nokia America Corporation for Public Safety Communications Products, Services, and Solutions.

Chair.

Thank you so much.

Staff.

Uh, once again, please introduce yourself for the record and let us know on which time you will need for your presentation.

And feel free to begin.

Good morning again, Chair Foster and Council members.

My name again is Maureen Medvedev.

I'm a deputy director in the Department of IT.

With me today is Denise Wasika, another deputy director in IT in charge of the wireless division.

We are here today to discuss to request approval of an ordinance for the First Amendment to the cooperative procurement contract with Nokia for public safety communications products, services, and solutions.

The amendment increases the not-to-exceed amount from $3 billion to $8 million and extends the contract term to December 31st, 2028.

As we covered previously, Department of IT is responsible for bringing many actions to city council.

I will not go through this again.

All right.

Thank you.

Good morning.

The city maintains a network of mountaintop radio towers, radio dispatch consoles, radios, and technical infrastructure to provide mission critical public safety radio services.

The public safety emergency radio network system provides regional coverage, interoperability, increased security, redundancy, and continue continuity of operations.

This contract with Nokia provides the backhaul network and transports voice and data.

Nokia routers connect 911 dispatch centers and Motorola radio transmit received sites together for secure and redundant voice and data communications.

Nokia provides enhanced network resilience, ensuring the highest network and application availability, meeting strict quality of service requirements for public safety.

Calls are routed and information is transmitted in real time to provide a reliable disaster response radio communications network.

The city's current agreement with Nokia for as needed public safety communication products and services has a base term that is set to expire on December 31st, 2026.

However, there is an additional two-year option available to extend the agreement through December 31st, 2028.

Increasing the not to exceed amount and extending the current cooperative agreement with Nokia will allow the city to accept grant funds, if available, for the replacement of mission critical equipment.

Having contractual authority to accept and use grant funding creates the opportunity for the city to use funds for other priorities.

Looking at fiscal considerations, historical spending for core maintenance and support has remained consistent from June 22 to June 2025.

In fiscal year 2025, because we had contractual spending authority, we were able to receive an unexpected grant fund to refresh equipment and software.

The other table represents the potential spending from July 2025 to December 2028.

The core maintenance and support service costs remain consistent.

The potential spend amounts allow us to be prepared for and take advantage of any future grant-funded opportunities for mission critical public safety radio equipment.

The proposed recommendation is to approve the First Amendment to the as needed agreement with Nokia of America, which includes the optional extension of an additional 24 months and an increase in the not-to-exceed amount from three to eight million to support any potential grant funding opportunities.

The Nokia contract is an as-needed contract.

The city is not obligated to spend the full amount on the contract.

And that concludes our presentation.

All righty, thank you so much.

We will now turn to the IBA.

Thank you, Chair Foster.

Lisa Byrne has a little bit of additional context and information from the committee.

Thank you, Charles.

Well, first I'd like to uh thank the Department of IT for being so responsive to our questions, Denise and Maureen.

Um we don't have concerns with this item, but we do have several clarifications.

The increase not to exceed amount requested in this action will support expenditures over the extended term of the contract through December 2028.

Those expenditures include annual maintenance and support, about one and a half million in network enhancements supported by the unanticipated grant funding in fiscal year 25 that was mentioned, and also a potential $4.5 million for future end-of-life expenditures for the network equipment and systems.

These potential end-of-life expenditures for planned replacements and upgrades are only anticipated, as was mentioned, to be spent under this contract if grant funding becomes available.

If the city doesn't have sufficient contract spending authority when a grant opportunity arises, the grant may have too short of a spending time frame for the department to be able to accept the grant.

In that case, the the city could be in a position of losing such grant funding because there is not sufficient contract spending authority.

The Department of IT has uh communicated in fiscal year 2030 that the equipment will be 12 years old, and there will be increased risk to effective communications, which could potentially affect critical public safety incidents.

If no grant monies become available for the needed replacements and upgrades beginning in fiscal year 23, the department anticipates using other available resources with around 80 percent likely to be from general fund.

Uh that concludes uh my comments.

Already, thank you so much.

Natalie, please proceed with public comment.

Thank you, Chair.

The public comment period for item four is now open, and we have not received any speaker slips in chambers, but there are two hands raised in the virtual queue.

I've started the five minute timer.

Blair Beekman, please unmute and begin.

You'll have one minute to speak to item four.

Oh, one minute.

I wanted two minutes.

I needed two minutes.

Um to speak of one minute.

If you can add one minute, that'd be great.

Um yeah, I uh this is an important item to me.

Um, this is items that may involve uh your UWASI in San Diego, they may be part of this funding pattern.

It's really important that the future of this sort of item uh in all of its importance that there's good emergency communication in times of emergency, that uh the community, everyday community can have access to uh uh uh emergency uh communication channels also, and for yourselves to work on that and be sure how those systems are available.

Uh good luck in those efforts.

Uh serving the uh the police and fire is important, but serving everyday community in times of emergency is also important.

Um, these are issues of UWASI that uh in the Bay Area.

Uh they started their own interoperability program called Bay Ricks.

It can be a really good model for yourselves.

I have a lot more to say.

I wish I had an additional minute.

Thank you.

Thank you.

Our next speaker is John Stump.

Please unmute and begin.

Uh thank you very much.

Have a pleasant day.

Now I'm understanding that this is for all public safety.

Is it are the systems integrated for fire, police um sewage, public utilities, or is this for a particular dedicated system only for police?

Um I'd give the extra time to Mr.

Beekman, who seems to be a more of an expert on this subject.

Thank you very much.

Please, one system for all.

Thank you.

Thank you.

Chair, this concludes public comment on item four.

All righty, thank you so much.

I will now turn it over to committee members for questions and comments and entertain a motion.

We will start with Vice Chair Moreno.

Thank you.

Uh continued access to public safety communication products and services is very critical.

And I do support this amendment to continue funding through December 2028.

Can the department speak to the work that will be done in time between today and 2028 to assess uh to assess the market to ensure that the pricing we receive through this cooperation agreement remains to be competitive and beneficial to the city?

Certainly.

Um excuse me.

So the contract itself uh leverages its NASPO contract.

This was led by the state agency, uh, the state of Washington.

And by aggregating the spend of all 50 con 50 states net solicitation, it was able to secure um large economies of scale to secure significant discounts.

So the discounts within this contract represent a discounts between 35 or 30, rather, 30 to 65 percent off of list price as part of our due diligence when we initially looked at this cooperative contract.

Uh, we engaged, we we did a market analysis and also compared it to the only other cooperative contract that verified actually made their products available, and that was HGAC.

And at the time we did a comparison of the market basket of items and with the same uh minimum discounts that they're required to give us.

The discounts represent a um this is a uh a floor not a ceiling or a ceiling not a floor, rather, on the amount of discounts that they have to give us, and this was found to be the most advantageous.

But of course, as we continue to move forward, we will always look at the marketplace.

We're under no obligation to make purchases under this agreement if we determine that there's something else better, uh better able to suit our needs.

Okay.

Thank you for your response on that.

Um touching bases, uh touching base on what the IBA mentioned about grant funding.

Um this is anticipating grant funding coming in.

Uh, if the grant funding does not materialize between now and the end of the contract, um, it was stated that the general fund may need to be utilized to replace the old equipment.

Um, can staff please speak to your work in procuring the grant uh funding?

And if we're not successful in getting the funding, what would the projected impact to the general fund be?

Thank you for your question.

I can speak to the UASI grant cycle.

Um so we put in the grant request each year, and it is um it goes to a working group, and um if they approve the account allocation, um it goes to the state and our office, the city's Office of Emergency Services manages and administers the UWASI grant.

Um so it's it's a variable um if we will get funding and how much we will get.

Um so we get that information every year.

It's a yearly grant cycle.

So every year I put in a proposal, and then cities OES team manages it and identifies the allocation, if any.

Um, and the second part of your question.

How many years have we been receiving um and applying to the URC grant?

And you said it was a state grant.

It's FEMA, and then it goes to the state and then comes down to local government.

And how many years have we been applying to?

Is this I've been doing it for eight years now in this position.

Have you ever seen the fund go down or the amount that they give the grant funding go down for the city of San Diego?

It depends on the projects that are submitted.

So it's it varies.

I I only um submit projects for regional emergency communications.

So if I do receive grant funding, it's usually between one and three million dollars.

So I've been consistent in receiving that grant funding for emergency communications.

And correct me if I'm wrong, but I believe that you the last grant funding that you received the 1.5 million, that was outside of the standard cycle.

Is that accurate?

Right, it was unexpected because another agency wasn't able to um spend that allocation, and because we had contractual authority, um, we received that money instead.

Okay, and it's um it's staff's recommendation that if we do not receive this grant funding, that this will come out of the general fund.

Just to clarify, so at this point, um, the roadmap, Denise's roadmap, as I understand, it does not anticipate spending money to replace this required uh infrastructure at this time.

It's actually projected to happen in in fiscal year 30.

However, you prioritize all this equipment, it's aging, none of it's all exactly the same.

So she has a list ready to go, which is one of the reasons that she was able to get that 1.5 million and act on it and spend it in four months of things that need to be replaced that she'd prefer to replace sooner that she could spend money on now.

So that 1.5 million uh represents approximately I think the wireless fund is 78% general fund, so that represents approximately 1.17 million dollars or one point.

I'm sorry, I wrote it down.

I should, it's embarrassing I can't do my math so easily.

1.2 million um approximately of um general fund impact that wouldn't be felt now in in fiscal year 30 that will be pushed back an extra you know 10 years.

Okay, all right.

Well, thank you for the work that you do.

It sounds like you're running a very tight ship over there.

I wish um other departments would take your lead.

So uh especially on going after the grant money and being um very diligent on the line items that are needed and the ones that are not needed.

So uh with that I move staff's recommendation.

Thank you.

All righty, thank you so much.

So we have a motion on the floor by Vice Chair Moreno.

We will now move to Pro Tim Lee.

Thank you, Chair.

I'll second the motion.

Thank you so much.

Not seeing any other members on the lights.

Uh Natalie, please call for the vote.

And the motion passes four zero.

Thank you.

Thank you.

That concludes item four.

Now we please introduce item five.

Item five is authorization for the public facilities financing authority of the city of San Diego sewer revenue bonds.

Chair.

When you're able, just introduce yourself and let us know how much time you need, and you can begin.

Good morning, Committee Chair Foster and members of the committee.

Jyoti Pantlu, Assistant Director with the Department of Finance, and I need about six to seven minutes.

Thank you.

This morning we are seeking authorization for the issuance of sewer revenue bonds to fund the utilities capital program and refund existing sewer revenue bonds to realize cash flow savings.

As background, the wastewater utilities capital program includes the Pure Water Program as well as pipelines, pump stations, trunk sewers, and treatment plants, what we call our baseline CIP.

The proposed bond financing, up to 240 million will fund this baseline CIP program.

Of the total, 108 million will is expected to reimburse capital expenses that will occur this fiscal year through the end of March 2026, and the remaining 132 million is expected to fund projects through the end of fiscal 2027.

The CIP expected to be funded by these bonds was built into the four-year rate case that was approved by the sewer by the city council last month for the sewer utility.

In addition to funding new projects, this authorization allows us to refund prior bond issues, the 2015 and 2016 A sewer revenue bonds to achieve cash flow savings consistent with the city's debt policy.

The key financing elements.

Based on current rates, it's estimated to cost 4.6% the interest rate on these bonds, and resulting in an average annual debt service of 15 million.

As noted earlier, these payments are supported by the approved sewer rates adopted by council.

Additionally, bond documents contain several covenants, include them including the maintenance of the system and the rate covenant, which requires the utility to maintain rates that will support coverage ratios required by the bond documents for the life of the bonds.

Going on to the refunding bonds, based on current interest rates, the refunding is projected to generate approximately 36 million in total savings.

Approximately 300,000 will be realized in this fiscal year, 3.1 million in the next fiscal year, and 2.7 million annually through fiscal 2039.

This represents a net present value savings of nearly 10%, which is well above the city's debt policy threshold.

Subject to today's action, we anticipate bringing the ordinance as well as the companion PFFA item to City Council later this month, followed by a second reading in December.

In March, we expect to bring the disclosure document or the POS for City Council and PFFA approval.

This will be followed by bond sale in mid-March and closing by the end of that month.

That is March 2026.

So we are requesting the approval via ordinance of the issuance of sewer revenue bond in one more series in an amount not to exceed 240 million, the refunding of all or portion of the outstanding callable wastewater bonds, the authorization for the execution of related financing documents, and the authorization for the CFO to establish special interest-bearing funds for the bond proceeds.

That concludes my presentation.

And I'm happy to answer any questions.

I also have Adam Jones from Public Utilities available to answer any questions.

Thank you.

Alrighty, thank you for that.

We will now turn to the IBA.

Thank you, Chair Foster.

Just a few quick comments.

Uh would note that we reviewed this item.

This is consistent with and was assumed in the recently approved sewer rate case.

It will allow the city's sewer CIP projects to move forward per the financial plan that was heard by this council and that is part of the city's adopted CIP.

Additionally, it's worth noting that the refinancing of outstanding 2015 and 2016 bonds that Josie mentioned is estimated to achieve again roughly three million dollars in annual savings from FI27 through FY29.

Uh just note this is an example of the city proactively identifying ways to generate savings that ultimately help reduce a portion of rate increases that would otherwise be necessary.

Um so I think that should be acknowledged and recognized.

Uh that includes or concludes our comments.

Alrighty, thank you for that.

Natalie, let's proceed with public comment.

Thank you, Chair.

The public comment period for item five is now open, and we have not received any speaker's lips here in chambers, so we will move to the virtual queue.

There is one hand raised in the virtual queue, and I've started the five minute timer.

Each speaker will have one minute.

John Stump, please unmute and begin.

Hi.

I watched um the opening sequence of Waterworld the other day.

And in the opening sequence, the um protagonist is on his uh water world boat and he pees into a cup and then pushes it through the osmosis filter to get toilet to tap water, pure water.

You know, why is the city committed to pure water?

Only not because the current water need, but only to develop a new bigger city.

The council needs to stop this corrupt program that forces the cost of living up.

I know you want to refinance and you should refinance, but please rethink pure water because that's what's forcing the cost of living up.

Thank you.

Thank you.

And Chair, this concludes public comment on item five.

All righty.

Thank you so much.

And we will now turn it over to committee members for questions and comments and entertain a motion.

We will start with Pro Tem Lee.

Thank you, Chair.

Uh, thank you to the debt management team for their work on this item uh alongside uh public utilities.

Um I know this is a regular procedure, but certainly there's still a lot of work that goes into putting together a bond offering like this.

Um I think the only question I had was just whether there are any new practices or strategies that um are in place um this year compared to say the last offering that we had uh from the perspective of the bond issuance process um uh not really now.

We have a pretty rigorous process as far as the legal documents, and as you're aware aware from the recent disclosure training, we go through also a regular rigorous process on the POS side.

Thank you.

And thank you to the IBA again for their analysis as well as identifying the savings achieved for the refinancing of the 2015-2016 um bonds as well.

So with that, I am happy to move staff's recommendation.

Thank you so much.

Not seeing any uh all right, we have a second by council member Ilo Rivera.

Um, seeing no other members on the lights, uh, we will now have each committee member register their vote.

And the motion passes unanimously 4-0.

All righty, thank you so much.

We will now move on to item six.

Natalie?

Item six is authorization to enter into and execute a contract with 104 golf to provide golf course point of sale systems and golf reservation services.

Chair.

Thank you so much, staff.

When you have um get set up, please introduce yourself for the record and let us know how much time you need and feel free to proceed.

All right, thank you very much, Chair.

Um, my name is John Howard, Golf Operations Deputy Director.

I'm here with Tim Graham, Assistant Deputy Director.

Uh, today I will need approximately three minutes for our presentation.

Um today I'll be sharing a brief overview of the product that we are looking into, uh, the evaluation process uh in our selection, as well as the contract terms.

One of the things that I do want to remind uh this committee is that the golf enterprise funds operates under the golf enterprise fund.

Um there will be no general fund dollars spent on the procurement of this product.

So over the course of the past 20 years, the City of San Diego's golf operations has utilized point of sale technology as well as a reservation software to manage customer reservations as well as bringing in the revenue for our golf courses.

Um this has been utilized across all three of our municipally operated golf courses, which are Balboa Park Golf Course, Mission Bay Golf Course, as well as Tory Pines.

The current contract with four reservation systems is set to expire in April of 2026.

Um so approving this contract will allow us to have continuity of service.

Um over the course of the last year, staff has gone forward and released a request for proposal to expand the existing online reservation and point of sale system.

We were looking for a product that had a fully integrated point of sale, uh provided golfer verification, as well as gave us the ability for guests to make reservations at our properties.

One of the important things that we were looking at and that is required by the city treasurers is for us to be PCI compliant.

Um that is something that's required any time we handle credit card data.

Um this existing um operator, which is known as 10 4, um, is currently integrated with the city treasurer's existing service, which is FISERV.

Um back in February of 2021, a notice to award was sent to 10-4.

Now, the primary reason that we are coming to committee as well as council is primarily the uh duration of this contract.

Uh we initially are looking for a term of five years with five one-year options for a maximum of ten years total.

Uh the contract value is in total, if we went for the entire 10 years, would be 161,000.

That works out to $16,100 on an annual basis.

And with that, um, we are hoping that the committee will move this forward due to the fact that we will need an ordinance to be able to enter into a contract uh of this length.

With that, we'll be happy to take any questions.

Alrighty, with that, no comments, correct?

No comments on this one, Chair.

Alrighty will do.

Natalie, do we have any public comment on this item?

Thank you, Chair.

The public comment period for item six is open, and we do have one hand raised in the virtual queue.

I've started the five-minute timer.

John Stump, please unmute.

You will have one minute to speak to item six.

Uh yeah, thank you very much.

Uh Chris, you always want to get things better.

I didn't see that Colina Del Sol was part of this program.

And then, you know, this the golf courses are an enterprise fund.

It's a franchise, essentially.

Is the franchise creating revenue for the city of San Diego and has in the zero-based budgeting.

The city looked into the fact that absolutely no expenditures from the general fund are contributing to this enterprise.

No police, no fire, uh, no water services.

This needs to be looked at if it's an enterprise.

Uh, is it completely clean?

And does the city contribute anything to it?

And what is the franchise delivering to the city revenue budget?

Thank you.

Thank you.

And the next speaker is Blair Beekman.

Please begin.

Hi, thank you.

Uh, thank you for the words of uh Mr.

Stump today coming in here in the morning.

It's been nice to hear.

I wish I had a better expertise on our on our items of inoperability and such.

Uh I only have a basic informational knowledge and uh not really technical knowledge.

So nice to hear him today, and uh thanks for his uh words and good luck with the rest of the meeting today.

Thank you.

Thank you.

And Chair, this concludes public comment on item six.

Thank you so much.

I will now turn it over to committee members for questions and comments and entertain a motion.

We will start with council member Ilo Rivera.

Thank you, Chair.

Um thank you for the presentation here.

Um wanting to make sure that this contract will continue to allow for the advanced booking fees that are collected.

And if you could share a little bit about how that how that if so, and then if and and how that works.

Yeah, absolutely.

Thank you for the question.

So this system will allow us to continue the advanced reservation program that we have currently set in place.

Over the course of the last few months, though, we have gone to the municipal golf committee as well as Parks Recreation Board.

The goal is to expand that program to Balboa and Mission Bay.

At Balboa and Mission Bay, we're looking for a ten dollar rate, which is definitely different than you see at Tory.

The goal there is to keep it as affordable as possible for the residents of San Diego.

I appreciate the the focus on affordability for residents.

That brings me to the next point.

This integrates with our ability to differentiate between residents and non-residents, though, correct?

Yes, that's correct.

Um there are two different options.

There's a resident and a non-resident, um, specifically at Tory Pines, that's where you're gonna see the differentiation.

Um at Balboa and Mission Bay, it will be a flat fee regardless of residency rate.

Um, and that's due to the fact that many customers come from neighboring cities, and customers in the past have made uh buying decisions to go to other facilities based on the discrepancy in price.

And so our goal was to um keep it as affordable for for all guests when they come to our facilities.

Got it.

Okay.

Uh so just to make sure I'm being uh crystal clear about this.

The contract will allow us to continue to charge advanced booking fees, continues to allow the integration with our ability to differentiate between residents and non-residents, correct?

Yes, that's correct.

Okay.

Um it was in our budget priority memo.

Uh we believe that the non-resident advanced booking key fees um could be a similar and different than Mr.

Stump's comments um in terms of uh what it what the enterprise fund is doing for the city.

Um we believe that the advanced booking fees could actually be a way of supporting the parks and rec department as a whole.

I that's a broader conversation.

Um we included it in our budget priority memo, so I I want to bring it up here as well.

Um there's the it's one thing to maintain the the courses and keep some of that that enterprise fund uh uh locked in there.

Um but I think it's also a fair question for San Diego residents to ask them uh to ask us um what is this what is the the golf system doing as a whole for the city?

Um so knowing that uh the contract allows for um the differentiation um the collection of advanced booking fees um I look forward to continuing the other part of that conversation later, but I'm happy to move the staff recommendation, Chair.

All righty, thank you so much.

We have a uh motion on the floor, not seeing any other members on the lights.

Um I will um step in and uh second um the motion um with no other comments, nine of you please call for the vote and the motion passes unanimously 4-0 all righty, thank you so much.

This concludes item six, and actually brings us to the end of today's agenda.

Thank you to the members of the public and staff for your participation.

I will now adjourn this meeting of the budget and government efficiency committee to our next regularly scheduled meeting, which is on Wednesday, December 10th, 2025 at 9 a.m.

We are adjourned.