Vice Mayor Bivaras Walton.

Councilmember Aguilar.

Present.

Thank you.

She arrives.

Thank you.

Will you please submit our announcement?

Yes.

After each agenda item is presented, the mayor will ask for committee member comments and then take public comment.

You have two minutes for your comments.

Account down timer will appear for the convenience of the speaker and attendees.

Great, thank you.

Good afternoon to the mayor and the finance committee.

We do have one item tonight or this afternoon to speak with you about.

It is our fiscal year 2026 mid-year financial review as well as proposed adjustments at mid year for the remainder of the current fiscal year.

So the first part of the presentation this afternoon will focus on where we are at mid-cycles through the current fiscal year.

So expenses and revenue through December 31st, 2025.

And so wanting to provide an update to give you a little idea where we're at when we're looking at columns B through D are where the city was at this time in fiscal year 2425.

So this was through 2024, December 31st.

Columns E through G is a review of where we are this current fiscal year for the same period of time, July 1st through December 31st, 2025.

And so really wanting to call attention to a couple areas.

One looking at line 20, which is our total revenue.

If we're looking at percent of budget, so how much have we collected through December 31st, 2025 compared to 24, you'll see a 37% in both areas.

So we are trending in a way in which we would expect some of our larger revenues that come in in the first latter part of our students in the first part of the fiscal year is really related to property tax.

So the city receives two payments or remittance of its property tax, the largest typically occurring in the first part of the fiscal year, so around December, we've received that.

And so you'll see we're about when you're looking at our property tax line on line three of this table, we're trending very close, 50% 46% to date.

And so when you look at the uh the comparison of G and D, which is the percent that we've collected here to date through the same period, we are trending very similar.

So there are no areas of unnecessarily concern.

We will talk a little bit about some areas like sales tax in the next portion of this presentation.

Um we continue to see a decline in that area.

It is consistent with what we're seeing regionally, um, and um we do again meet with our uh sales tax um consultants on a regular basis and we're constantly uh being as up to date and current with trends as possible.

So we'll talk a little bit about that in the second part of the presentation.

So moving to expenditures, uh, lines 22 through 38.

Um, you'll see that um on line 36 again, comparing column D and G, we're spending our regular operating expenses at the same rate or similar rate to where we were last year.

So again, there's nothing that is sticking out as an anomaly or something to be concerned that we're overspending or spending too quickly.

Um and then when you look at the comparison of our transfers and our expenditures, so you're looking at line 38, so all of our operating expenditures and our transfers.

Um, we're we're trending a little higher, um, but nothing of significant concern.

Um, we are showing we're uh about 42 percent spent through the fiscal year.

If you straight line it across, we should be around 50 percent.

Um we'll talk a little bit about some of those anomalies again, and and really the expenditures that we're looking at here are capturing actual expenditures that we have made.

This is not taken into consideration funds that we may have encumbered and obligated to send to the end of fiscal year.

So now that we've kind of done a brief overview of where we we've been the last six months, um, we use that data to help inform our decisions as we move forward to the second half of the fiscal year.

So, do we need to make necessarily necessary adjustments to our revenue projections?

Um, are there emergency needs that came up that we're not accounting for as far as expenditures are concerned, and we'll talk a little bit about that.

So jumping into our proposed changes as it reflects related to revenue.

We really want to kind of highlight the different areas where we're seeing different changes occurring since the time of adoption in June.

So starting with sales tax on line three, we are showing a reduction of about 2.8 million dollars.

Again, we meet with our sales tax consultants on a quarterly basis.

We are always tracking this particular revenue.

It is one of the city's largest revenue streams in the city of San Leandro, and so it is also one that is very indicative of what's happening in the economy.

So we've talked at different stages throughout the process about consumer behavior and how consumers are as their behaviors change and how they prioritize their spending, it is impacting how much they're spending on taxable goods.

So really prioritizing services or non-taxable goods, such as prioritizing groceries or services that help with their kind of regular day to day.

So they're not purchasing cars at the same rate that they may have at different times when the economy is more stable.

We are seeing online five increase in utility user tax and franchise, really specifically related to electricity and the electricity consumption, so combined with about 300,000 increase there.

Business license tax is trending a little higher for the first half of the year.

We do see increase in business renewals as we work with our business license tax consultant and business license tax administrator.

And so we are catching up on some discovery work that has happened, and so more people are becoming more current and compliant with their business license taxes.

And then also we have seen some increases in some new businesses within the first part of the year.

So when you're looking at taxes, it's kind of a net change of about 2.2 million.

Moving into subtotals of other types of revenue that the city receives that are not tax related.

When you're looking at lines 11 and 12, so 11 charges for service, we're anticipating an increase of about 270,000.

A significant portion of that is related to the increase in recreation programs.

We are seeing a significant increase in participation in the number of programmatic recreational programs that we're offering, and so as we continue to write size our programs we're offering to the community, but also right sizing the revenue as it relates to participation in those programs.

We are increasing our interest and property income.

That's is related to the city's portfolio and direct increases as it relates to the returns of our CNN portfolio.

Line 14, which is an intergovernmental, that's related to some reimbursements and grants that we have received, a significant portion of that almost 700,000, is related to a FEMA reimbursement from past emergency.

So there typically is a delay in when you actually spend the money from when you submit your claim to FEMA to when you actually get your money.

You don't typically receive your reimbursement in the same year that you would spend the dollars.

So this is a catch up from prior year expenditures.

And then a minimal change in other transfers, it's really an other, it is an increase in projected revenue as it relates to the Cherry Festival.

So increases in subtotal for other non-tax revenues 1.6.

So a total net decrease of about six uh 600,000 to the overall total revenue.

So moving on to proposed general fund expenditure adjustments.

Again, wanting to highlight the two areas where we're looking to make some adjustments.

You'll see on line seven recreation and parks, about 230,000.

Again, those are directly related to as we continue to see increases in revenue, we're continuing to offer more programs.

And so there are some expenses related to offering additional programs, which are then offset by the revenue that we're receiving from those programs.

Public works also has a request for about 300,000 dollars, excuse me.

And I'll talk a little bit more about these on the next slide in more detail.

And then the last adjustment will be to transfers on line 15.

Um, it's about 300 and 316,000 reduction in transfers, and that's specifically related to no longer needing a subsidy from the general fund to the parking fund.

So I will jump over to this slide here, which provides a little bit more detail on what makes up those different requests.

You'll see 144,000 is really related to some of the payments and supplies necessary for the additional recreation programs, which are offset by revenue.

Enhancements to the cherry festival marketing for increased festival footprint, again offset by some of those revenues that we're going to see as we continue to build out the charity festival.

Additional Wi-Fi receivers to increase again the festival footprint as we continue to expand the areas for our funders, it does require additional support from Wi-Fi as they continue to take online payments.

We do have an expense related to the House Bridge for mitigation and restorations at 30,000 citywide median landscaping, again offset by revenue, so bank charges to reflect increases in deposit pickups as it relates to recreation.

So total general fund operating subtle of 260,000, and then you'll see online 10 the elimination of the parking subsidy from the general fund.

So a net change to the general fund of about oops, one two five, sorry, of 86, almost 87,000.

So wanting to just uh provide an overview of the proposed general fund impact, um, column B will show what the adopted budget was.

So back in June, we had a beginning balance of about 54.7 million.

Um, when you take into consideration the change or the use of fund balance of 6.1, our projected ending balance was 58.6.

So I want to show and really emphasize column C before we move on.

Um C reflects, you'll see that beginning balance is different, it's 69.5.

And we'll go into a little bit more detail when we look at the tenure forecast.

Um, but the city ended uh its fiscal year in fiscal year 2025 using less reserves than originally planned for, and so that increased the city's beginning balance position in a much positive way.

Um, and so when we look at the amended budget and we look at the ending balance with that, it's 54.1 projected ending balance.

Um, when you're looking at column D, that is kind of what we're looking at, and we're asking for today is the uh change in reduced projected revenue, a minimal increase in expenditures, a reduction in transfers, um, and so a reduced projected use of fund balance with about a half a million.

So when you are looking at column G or excuse me, E we have that new beginning balance, and when you add together columns C and D, which is the amended budget plus recommended changes, um, we have on column or excuse me, row four, five, and six reflecting the changes that are being proposed today.

Also, what is being shown and reflected here is in column seven, which are carry forwards and budget amendments that have been approved by council.

So those are prior expenditures that were included in the 2025 adjusted budget that were not completely spended in that current fiscal year, but we're authorized expenses, and so we're carried forward of expenditures to be spent in fiscal year 2026.

So when you take into consideration all of the requested budget amendments plus the prior year carryover, we are looking at a change or a net change in fund balance of about 16 million.

Um so taking that new beginning balance, the updated fund balance or use of fund balance, your projected ending balance for fiscal year 2026, and column E would be 53.5 million.

So this is just uh the sheet before was much more of a um a minimal or a summarized version of the general fund forecast.

This is the 10-year.

Um, and do you want to call attention again?

If you look at column C and D, C represents the fiscal year 25 adopted budget or the adjusted budget, and where we projected to end the fiscal year.

Um column D is actual actually where we ended the fiscal year.

So when you look at column E and F, the fund balances were referencing where the projected ending and beginning balances were based on the adopted budget.

When you move to columns G and H, you're now referring, and you can see on lines 12 that now you are referencing columns D row 13, which is the actual funding balance.

And why this is important and why we want to call attention to this is you know at the time of adoption, we met the city's council, the council's policy, the 20% expenditure for economic uncertainties for fiscal year 26, 27, we were slightly lower.

As a result of how we ended the fiscal year in 2025, the city's updated adjusted fiscal year 26 ending balance as a percent of expenditures for economic uncertainty is 25%.

So we are meeting the council's goal, or excuse me, the council's uh directed policy, reserve policy.

Um, and then column H, you will see has increased from 15.2% to 20.2%.

So again, meeting that council reserve policy of 20%.

And both column uh, so column G does include both the changes in revenue projections as well as the proposed changes presented this afternoon, as well as the carryovers from prior year, as you can see here.

So moving to non-general fund, proposed mid-year adjustments.

Um we spent a lot of time talking a lot about our general fund.

It is a very um it is our fund that supports our core services that we provide to the community.

There are other funds in this uh organization, um such as special revenue, um, enterprise, and internal service fund.

So what is being presented this afternoon is proposed non-general fund expenditure adjustments.

Um we have uh a few for consideration.

The first is a little over about 17,580 is related to environmental services for a filmmaker support for upgrade and maintenance.

It is a solution that um software that they use to track compliance data.

Um rows five and six are facility maintenance requests, uh totaling 67,000 related specifically to maintenance costs for facility repairs and maintenance as well as ground repair uh repairs and maintenance.

Uh row nine is related to the city's stormwater fund.

Um, it is actually a reduction or a deferral of about 300,000 for Prop 18 efforts works, which were being postponed to 2027.

So we will be removing it or we're recommending removing it for 2026, but it will reappear in the 2027 budget.

And then line 12 is related to the city's capital project funds.

Um there's a project that was slated to occur in fiscal year 2027 due to some emergency means.

There is a request to reallocate those dollars from fiscal year 27 to 2026, and that would increase the fund by 300,000 this fiscal year and would reduce uh the budget by 300,000 for 2027.

Um with that, uh, this afternoon we are seeking a few actions from the committee.

The first being is to accept the 2026 mid-year financial report, and then the second is to review and recommend the proposed fiscal year 26 budget adjustments to the city council for consideration and so this one time.

Okay, so we're gonna close public comment on this item, and we're gonna move to committee member questions first, please discussion.

Any questions on the presentation?

Beginning with nice mayor.

Thank you for the presentation.

Um I was looking at the sales tax, and I'm wondering how that data comes back to us.

Are we able to see which type of receipts are beginning in the low sales tax?

And the reason I'm asking that is because I just came from a downtown shop and it was packed.

And I'm just wondering if I know that the majority of it comes from big ticket sales, right?

Like vehicles and that sort of stuff, but I'm just wondering if we're if the data that we get back, if we're able to see the type of receipts and sales tax and what kind of types of businesses, sure.

We could we absolutely do see kind of our top 25 or top 100.

There's different ways in which you can see it.

Sales tax information is confidential, highly confidential.

So it's not something that can be made public.

But we did we it is confidential as it cannot necessarily be provided to the public as well as people who are not part of the review committee of the sales tax.

So if we're thinking of some sort of strategy around retail, how would that be informed?

I guess it's not still not clear to me.

Do you do you finance or city staff whoever is part of that circle of trust?

Yeah.

Okay, and to clarify when I said a committee, it's not necessarily a committee, but it is absolutely a group of city uh employees that um, so it's not just finance, it's finance, it's all city leadership, our economic development staff all are part of it, and we're all part of the team, so when we're analyzing and trying to understand what is happening to the city sales tax base, we're all part of that conversation.

Um thank you for that.

Um I'll um ask a question regarding staffing.

Does the current budget um is it maintained the same level of uh were there any staffing changes, or like was there a lot of open positions that resulted in savings this fiscal year, or were we pretty much staffed up?

So our adoptive budget does make some assumptions on vacancy rates based on historical trendings, what we see in the market, working with departments on how and how quickly they think they can fill positions.

What I would say is as we do our mid-year review and we do meet with departments on a quarterly basis as well, um, is to really look at staffing levels.

And so what I would say is right now the assumptions that we have made um as far as projected uh savings are currently in line uh and trending in a way that we would expect.

Thank you.

Um, and I do oh is my hand on okay.

Um I do see a lot of maybe your requests in terms of um sharing festival type related.

What is the revenue coming in from the charity festival?

Sure.

Um I'm gonna invite Director Zanika up to uh answer specific questions about the requests that relate to the chairhouse.

Good afternoon.

Oh no.

Uh just give you one moment.

Well, I just also wanted to share um in regards to mid year for specifically for the charity festival.

Um we are proposing a um 15% increase in this year's revenue and specific to the five Wi-Fi requests, those remote time fees to install Wi-Fi receivers, they've got equipment to find the coverage for Wi-Fi coverage for vendors, the marketing pieces also to increase um visibility traffic at those locations.

The marketing piece is also to increase um visibility traffic at those locations.

Um I can come back up and provide those numbers.

Yeah, no, that's fine.

Um then what is the parking and uh that was my only question we're in the throat, so if you want to go up in a little bit, yeah.

Um what is the parking lot repair project that was supposed to be in 27 is now 26?

It's on page 11 of the presentation.

Thank you.

I'm gonna invite a uh Shua Marquisa, our director of public work.

Good afternoon, Sheila Marquise's public works director.

So the project we are requesting to move ahead of schedule is for the parking lot at fire station 12.

Um is in this repair for the pavement, and we have a project that is scheduled um for this year that we're hoping to take advantage of the same bid package and uh um larger scope of work that we can incorporate in.

And which one is station 12?

Um it's on 1430.

Okay, I don't know.

Yes, that's just I don't know the numbers, but I know where they are.

Um I have more questions, but I'm sure my colleagues have to, so I'll just set aside.

Thank you.

So I'm side.

Thank you, Mary Gillison.

Thank you for the presentation.

My question goes to page nine of this.

Um I think it would be slide nine.

So if we can take a look at the I think you know, our concern was thank you for staff for coming back and adjusting and you know making some arrangements.

Um I I think you know, we've seen a lot of impact on that.

But yeah, we're still still looks like on line item three that after fiscal year 27, we're still facing um an operating deficit.

Um my concern is you know, I'd like to see the total expenditures and transfers match the total revenues so that the net change in fund balance.

I mean, this yeah, I'm seeing too much red here.

I know it may be a huge task, but how can we change so that the net change in fund balance is not red?

Thank you for that question.

Um, and I want to clarify that this is um where we are at what time as you may recall uh the cut this the finance committee as well as our council supported that directive.

Um and when we presented the budget in June of 25, we did meet that goal or that objective um for 2026, but at that time really requested um some grace um and some time from the council so that the city could really spend time being thoughtful and meaningful about the adjustments and reductions um uh being proposed for the council, and so some of those reductions will start to come through for the mid-cycle 2027 budget, which will be coming to you in the month of March.

And so a lot of work has already been done by all of our staff and trying to really thoroughly understand the proposed changes, not only how they impact the organization, but how it impacts our community.

And so wanting to be very thoughtful about the proposal that we put before you, um, and that will come to the council in March, and we'll also come to this committee um with uh much deeper dive into those proposals at the March committee meeting.

And so at that committee meeting, what we will bring forward to you will address that concern where you did no longer see the reliance on the city's um uh reserve to balance its budget.

Okay, wonderful.

Um that's my question.

Thank you.

So I will come back to the council member and please proceed.

Last year's thing just thank you.

Last year's revenue was 93,000.

We're in projecting uh 115,000 this subcoming fiscal year.

And again, the what we're asking for the Wi-Fi is extended footprint to have uh additional vendors as well, too.

Those are one-time charges.

And that's net, or is that is that profit or that's just revenue expenses?

It's roughly the estimate, it's about 180,000.

So expenses are 180,000.

And revenue is 115.

Okay.

Okay.

Okay.

Let's chat a little bit about this thing.

So we'll start on page 9 where we are right now.

Council Brackelad was probing some of the numbers.

I'd like to dig into column H.

And this one's a little bit confusing to me.

Because the line three is now big enough.

Can be adjusted, proposed, then can be adopted.

So 156.1 versus 155.7.

I so I see what happened here.

So it looks like possibly actually I'll have to dig into that.

I don't see why there would be an adjustment unless there was an adjustment that was authorized by council previously, which is why it was adjusted and not so as a separate line item with council that came before, so we can take a look and dig into that and provide a response to this committee on what the difference is between the adopted and the adjusted.

We can absolutely do that.

Perfect.

The transfers.

Because at the time that we had our discussions last year, around this time of year, it was a million dollars for a fire truck and some other things, but the basic idea I thought was that we're going to see a reduction there.

Maybe we are seeing or just kind of walked me.

And I did I'm I'm glad that you asked about the line three, and I go back to that.

Um what is changed between the adopted and the adjusted is the account for the opening of the expansion of the Mulford library.

So the time of adoption, it didn't include that, which is about 460, 470,000.

So that's what that adjustment is for.

Um and so to talk just to answer your other question about transfers.

Um, so we have regular type of transfers that support uh capital infrastructure.

So we have support that goes for parks, uh, maintenance, major park maintenance, major um building maintenance, and then we have about 3.6 million that goes to support of um road, roads and and road rehab.

And so that is a significant portion of what we see will see in um both call on E and G.

So the adjustment there is the reduction of the subsidy to the parking fund.

Um, it does include that 1.5 million for a fire truck in this current fiscal year.

Um, and then you'll start to see there's different changes uh in our transfer rates.

Like if you look at columns I've got 6.5 million, set up S6.7 the following year, both of those include the replacement of two different fire trucks each fiscal year.

So one fiscal one fire truck at 28, one 29, um, and then we start to kind of return back to those normal levels of subsidies to capital infrastructure needs, and then in 2030, you'll see a significant uh jump again to 8.3 again.

That includes um the cost of a purchase of a different uh more expensive fire vehicle.

Uh so wanting to build those in, I will say that over the last um part of the fiscal year, the beginning of the fiscal year, we've been really working to um stabilize and understand what our fleet funding needs are as an organization of the city, and so we're working with the consultant to really um build out a very complete fleet needs assessment so we are capturing the cost of our fleet and that replacement schedule.

Replacement schedules vary depending on the type of vehicle it is, um, and so working um directly with that consultant to also implement an updated policy to centralize a lot of our work so to be more efficient.

Um so there's a lot of work that's been happening as far as the fleet uh fund is concerned, but do you want to capture some of those really large expenses such as uh fire vehicles?

Um I think I mentioned during the budget process that fire vehicles at the time of when you purchase it, it takes anywhere from three to five years before you actually receive it.

Um you are receiving a less of uh expensive cost if you pay up front, and so that is what's built into the logo.

That's all useful.

Um I think just I'm glad that we're getting there because I don't think we heard that at the last meeting.

Got it.

So I think it's it's useful.

Um, but let's come to page five.

Um line four.

So part of what there's just a mix of stuff happening there in this coming year.

I will focus on electric bills because they're what I know more about.

Um we're seeing downward pressure on pricing of electricity, but the fixed cost components being introduced by PGA.

So in that increase there, is that um that based on some analysis of the so what does that reflect?

Yeah, again, the city works with um utility user tax experts who provide services to sit cities like the city of San Leandro and they work directly um with um doing audits for us as well to make sure that um all uh apply applicable businesses are participating and remitting their utility user tax.

Um and what we are seeing is um some trends in consumption uses.

So that's where as the increase in consumption uh increases, so does the utility user tax as it relates to um it's less about pricing and more about consumption.

Thank you.

When I look at sales tax, um tax is our number one source, so I don't see any change there is concerning.

Are we forecasting a change in consumption patterns?

Well, change in pricing due to change in tariffs, but how do we understand?

Yeah, that's a that's a real number.

Yeah, it is, right?

And and what I would say is when we met with our sales tax consultant, um, the city had seen significant growth over the last several years in this particular revenue stream.

Um, and so um, you know, I think over the last several years, each year that the this was presented to the council, it was a larger number, right?

And so um, and it is indicative of how well your business is doing in the city of St.

Landro, but how are your consumers behaving as well, right?

And so the impacts of the tariffs, um, the just kind of the uncertainty in the market and what we're hearing from our sales tax consultant is really impacting people's behavior and how they spend their dollars.

And so um, you know, as you know, there's uncertainties at for example, they gave an example of you know you go to the grocery store to buy a gallon of milk and it's seven dollars, and someone might say, Well, I don't really need that gallon of milk today, but as the price continues to stay, people start to adjust and say, okay, well, I need I need that gallon of milk, right?

And so behavior that that behavior hasn't caught up, people are very concerned still and holding their dollars, and so they say we're gonna spend our money on what we need and not necessarily what we want.

And oftentimes what we want are taxable cuts, right?

And so as the economy continues to improve and/or stabilize, we'll start to see this area of the city sales tax start to stabilize.

Um, while it's important in for the city of San Landro, and it's our tax, what I would say is it's very similar to what we're seeing across the region.

As I talk with other finance directors, this area, and oftentimes sales tax is a large component of most organizations' revenue makeup, and so it is very concerning for a number of agencies, specifically here in the Bay Area that are seeing very similar trending.

Thank you.

Um page seven.

This is just more like a preview because uh $20,000 for additional Wi-Fi receivers.

I know uh we had a second year where it wasn't one year it was one service provider, and this year it was a different service provider, but we had bandwidth issues.

Um, this enable us to have dedicated Wi-Fi for the vendors so that everybody's Instagram posts and TikTok posts and all that stuff doesn't eat up the bandwidth that inhibits our crowds to them.

Yes, that's correct.

Last year we had dedicated Wi-Fi.

Um we expanded the footprint last year, so we had to add hot spots for a specific area of the festival to accommodate the additional vendors.

So this year we're going to add additional receivers and continue to have dedicated Wi-Fi for that festival footprint.

Okay, okay.

Um on this one page line item six.

So I'm not quite sure why this is here.

Sure.

Um thank you for the clarifying or asking a quite clarifying question.

So the city did have budget appropriated in fiscal year 2025 due to an administrative oversight.

That the unspent budget was not um appropriated into the upcoming fiscal year, so it wasn't carried forward.

Um, and so those dollars went back to the fund balance.

And so what we're asking is to reauthorize those funds and bring it out of the fund balance to pay for these expenses.

But my question is why are we paying for the expenses and it's not just from the grant from the donation?

So I'll have to ask Director Marquises on the screen labeling this.

Sure.

But this looks like it's coming out of general fund, which is why I'm confused.

Thank you, Mir.

So the this particular work, the 29,000, was for some of the mitigation for the tree planting after, so it's in between from the FEMA grant that actually funded removal of the bridge and that work.

Now there was a permit that required us to plant 15 additional fees to kind of restore the embankment, and that was not covered by the FEMA brand and not funded by the donation, which was focused on rebuilding the bridge.

So it was in the gray zone.

Perfect, thank you.

Um I think the last question would just be the that big picture question.

Let's go back to I think it's that slide.

So just from a terminology perspective, the adoption was the two-year adoption.

Can you remind me?

Is that 25, fiscal year 25 and fiscal year 26?

Or is it fiscal year 26 and fiscal year 27?

Thank you.

So when we adopted the budget, um, it's fiscal years 26 and 27, so it spans calendar year 25, 26, and then 20 fiscal year 27 would be calendar year 26 and ending year 27.

So when we're talking about fiscal year 26, we're talking July 1st, 25, then June 30th, 2026.

So in May ish of 25, we adopted column B.

Correct.

And then the amendment that we have here, we amended in the fall of 25.

And that was at the time where we said maybe operating balance, operating budget balance, or was that from May?

I guess that was from May.

That was from May.

So remind me, we got the column C primarily because of what?

Um primarily, but well say, for example, uh the revenue of line is slightly more than what was adopted that had to do with some grant funding that was received, but council adopted.

Um, and then when you look at line seven, so what that adjustment really was was the authorization of carrying forward prior authorized budgets by council.

So unspent budget from 2025 was carried forward to continue the work that wasn't completed in 25, it was carried forward to 2026.

And so that was a real significant change between column B and when you see column C it's interesting how we blend so it's appropriated money that's authorized, but there are other expenditures here that are budgeted, they're authorized, but they're not appropriated.

So it's appropriated money.

So it's so it's kind of a mix of apples and oranges.

So we bring forward at least the carrier forward, and we do request that we carry forward that you are appropriating those funds in the current fiscal year.

Those are typically one off or individual staff reports that come to council for consideration and appropriation.

And so that's what that total is made up of, is that departments can bring individual requests and actions to council for consideration and adoption.

And so I look at column D.

So in column C, we said in June of 26, we think our ending fund balance is going to be about 54 million dollars.

But the but then but now we have new information.

So now we think that it's going to end at 68 million dollars.

So I would clarify, and I see where this is confusing, and probably should have left D or 11 blank.

Because what we're we're asking for today is in column D.

It doesn't take into consideration that 9.4 million that was already previously appropriated, right?

And carried forward.

Which is what really what we're asking for is if you take into consideration column C, which has already been approved by council, plus any new or recommended changes at mid-air, you get column D.

So it's a little I that probably should have from a presentation perspective been left at zero.

Gotta go.

So then what we're saying is essentially because we will be we will have less revenue, so column E is the real story.

Correct.

We'll have a little less revenue, we'll be spending a little bit more money.

We're going to eat through more of our savings.

At least as of right now.

Correct.

And as a reminder, we did not, we I think it was about a little over 20 million that was authorized at 25, and we didn't spend that full amount of, or I shouldn't say spent, we didn't utilize that full amount in the fund balance.

Um we ended the year using about a little over five million, and so um that's why it looks as if we're spending more because we didn't fully expend the total amount in 2025, and it was just carry four.

I don't really understand that, so can you try that again?

Sure.

Can I shift to the next slide?

Um did I have a point here?

Oh, it doesn't work on here.

Okay.

So when you look at uh column C row 10, you'll see that at the time of adoption, we thought we were going to need to use 20.7 in reserves to balance our budget.

Um you look at column D, row 10.

We actually when you take into consideration that we brought in 147.7 million and spent 153.5 million, we actually only utilize 5.4 million in reserves to balance the budget that year.

However, when you look at column G, 7 revenue, and then we deferred 9 million in expenditures to the upcoming year to the current fiscal year.

That's 13.

Right, so nine, so four plus nine is thirteen.

And the balance that was not carried forward, and then we it went back to fund balance, which is what caused the uh you know, the net position for the city to improve because we didn't even carry forward or and use combined the total amount that the council authorized at the time of adoption.

So just being able to tell that story somehow readily in the document, I think is I'm not quite sure how, so not prescriptive right now, but if I may just play in English for that part, is we spent less than we were authorized to spend overall, yes, which is a good thing.

So for example, we have positions that we didn't fill.

That's not a carryover in case we did not spend the money that the council said we can't spend that's the big change.

That's $10 million.

Plus the carryover.

Okay, okay.

That's a huge difference.

Thank you.

And then my last question dealt with the enterprise funds or internal funds and just trying to keep track of I didn't do this, so if it's there, my apologies in advances is the facilities maintenance fund.

Is that tracked separately in our audited financials?

It is.

It is and when we think of that fund.

Do we do facilities maintenance out of the general fund as well?

Or is it all captured in this fund?

So I will defer to Director Marquises as far as whether or not there are expenses coming out of the general fund for facility maintenance, or if it's all captured here.

Fair enough.

Okay.

But I do have another question about file maker.

I don't know who that would be.

Okay.

Is that file maker as in like file maker from the database?

That's correct.

You're the second person to ask that today.

Yes, we are using it.

It has been updated to much more water.

Is that not in Sunset?

What I can say is that we are about to make a huge leap in versions up to the current days version.

And we're also paying to put it into the cloud.

So I understand that it is a relatively old platform, but there has been some modernization to it.

Is it what do you think that discussion offline?

Okay.

I think I have all of my questions transfers.

Would you like to have staff recommendation or discussion of it before?

Looking in that direction.

I just did want to point out, and this is more of a comment.

I'm looking at slide seven, that the fiscal impact of the additional recreation and programming, both payments and supplies, that's something that is reflective of a council directive in terms of looking at recreation services and all the programming that is offered.

So just you know, out of those ticket items, or out of this table, that's the largest amount.

However, it it is reflective of a council kind of priority and investing in services, particularly for families that depend on affordable programming for their children.

So I just wanted to um highlight that.

Are they permanent in their location or are they able to be moved?

The reason I'm asking as you make your way up, um, you know, we have uh ongoing events in downtown where there's vendors that come.

I mean, it's not they're not it's not programming done by the city, but um so my question is do they are they permanently installed and that's where they live, or are they able to be moved around?

That's my understanding that they're permanent that location.

Um fully funded the ones last year they were installed, and these additional ones were fully funded and offset with revenue or the festival.

But those are they're permanent at that location.

Okay.

And the reason I'm asking that is because I can't think of another event that uses that footprint.

So it's like a one-time, you you use it once a year.

So is that a one-time cost, or is there like an ongoing uh like a subscription type?

It's a one-time cost for installation and the life, the lifespan of those receivers for I believe for 10 years.

Okay.

And those servers that actually provide the Wi-Fi, I mean, I'm assuming that that's just a hardware.

It's a but more of a technical for IT, but I'm gonna try to simplify my understanding is they move the uh current Wi-Fi satellite to hit the receivers of some Wi-Fi that were already paid for.

Gotcha.

Okay.

Um just want to um thank the team for putting together the uh presentation and for your thoughtful responses to all of our questions.

I would like to move the staff recommendation.

Uh whole second.

Okay.

So we need a formal motion or like that you will have consensus to move forward to the city council.

We have one last question around franchise fees in particular.

So if we can go to online for franchise fees.

So our franchise fee when we have the impact fee for the waste management contracts and impact on the roads from all the trucks going on the roads.

Is that considered a franchise fee, or is that tucked in someplace else?

I don't have the detail of what is the makeup of the franchise fees.

It does come to us as as a payment.

I can dig into how it's broken up as we receive it from our corporate dollar.

Um, but I we just calculate the actual total that we receive, not what makes up the total revenue uh individually, and so we could take a look at that.

Um, but in my understanding that it's probably just uh the franchise fees and not necessarily costs associated with impacts on our road to the shot.

So I know that we were very mindful in how we did that calculation in this past negotiation.

Um again, I don't remember what we're gonna get into a lot of that detail, but I'm curious about other franchise taxes, so it's like ATT pay a safe fee property and pays as a com caspace of the fee and the impact that their trucks know I have on our roads.

My sense that there might be some exploration of this.

Thank you.

Thank you.

I just want to speak about the heavy-duty vehicles related to uh garbage vehicles.

Um we do have in our contract for a vehicle impact fees, but as a set aside for that, um we're still kind of working through other rules and um how we can spend those funds, but for specific for heavy-duty vehicles for garbage garbage trucks, we do um have separate accounts.

So that would not in there in there, where would that be?

That would be in um uh they help under the general fund that we created with the new franchise agreement.

Thank you.

Okay, so I'd be curious about that.

If we can take that offline okay, so you think you have consensus from the council to move this item forward to the full city?

We have consensus from the committee to move this forward uh unanimously to the council for if it's uh an option.

So for item three, do we have any public comment on items that are not on our agenda?

Because this is the time for us to want to step forward to speak.

I receive no cards.

So we are closing public comment committee members and you comments at this time.

Seeing that it's 501 and they're adjourned.