Good morning.

Francisco, will you please go ahead and commence interpretation of the meeting?

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Claudia, will you please restate this in Spanish?

Claudia.

Sorry about that.

Thank you.

Sorry.

Thank you very much.

Back to you.

And we're back.

It's nice to be spending so much time with everyone.

Time is nine oh two, and we'll call this meeting in order.

Madam City Clerk, would you please call the role?

Thank you, Mayor.

Councilmember Rogers.

Councilmember McDonald.

Here.

Councilmember Fleming.

Councilmember Ben Wellows.

Here.

Councilmember Alvarez.

Vice Mayor Krepke.

Here.

Mayor Stapp.

Here.

Let the record show that all council members are present with the exception of Council members Alvarez and Fleming.

Perfect.

Thank you.

All right, we'll move on to uh item 3.1, our second half of our uh fiscal year budget review.

Um Madam City Manager, any any words of introduction today, or are we just gonna jump right into it?

We're gonna jump right in.

All right, Scott and Megan, over to you.

The great news is that we were able to cover so much ground today.

Today should be a very efficient and productive day to run through the remainder of our departments.

I'll give a brief overview of what we'll be covering today, but we'll start out with our housing authority where Director Bassinger will be giving parking and Bennett Valley Golf course, but our transit division is along with our Santa Rosa Water will run us through the city's internal service funds and then we're gonna shift gears into our larger enterprises here at the city.

And then we'll end with a capital improvement program discussion led by Director Hennessy, and we'll end our conversation today really with the final part of our multi-phase multi-year strategy going forward with what year two impacts are looking like going forward.

So with that, I will kick us right off into housing and communities or our housing authority with Director Basinger.

Good morning, Mayor Stapp and members of council.

I'm Megan Bassinger, Director of Housing and Community Services.

So I'll be reviewing the housing authority component of the housing and community services budget.

As you can see on the slide, it's broken into four main areas.

The housing authority has about 20 separate funds that we use to administer programs.

The first one is the mobile home rent stabilization fund.

This is the fee that is collected for administration of our mobile home rent control program, staff charges to it, and we also use it for potential arbitrations that we may need to pursue.

Second, we have our admin fund.

This is a general catch all for the housing authorities 20 plus funds.

Insurance, IT costs, and other department level expenses flow into this particular area.

The largest is rental assistance.

This is funding that comes directly from HUD for the administration of the housing choice voucher program.

This supports approximately 1700 households, the payment of their monthly rent, and it is reimbursed by HUD.

So this is our best estimate of funding in the coming fiscal year.

And then finally, we have the housing a trust, and this itself is about 15 separate funds that come into the organization.

We use this to support our affordable housing production rehabilitation and compliance.

So this is where we'll find CDBG, home, and other resources that we use to provide loans to developers to support new affordable housing units in support of our RENA goals.

The highlights for the housing authority in the coming year is we'll be reducing one position within the housing authority funds.

And this was a position that was added several years ago to support a COVID era rent program that is sunsetting at the end of 2026.

So that's the reduction of one FTE.

The noteworthy increase in rental assistance programs is due to increasing rent costs throughout our voucher program.

And then as you can see, the reduction in our housing trust is because HUD has reallocated the way they provide one of the funding sources, housing opportunity for persons with AIDS.

This funding, because our AIDS cases are lower than the federal threshold, we'll be moving to the state of California.

And so that is a quick overview of housing authority funds.

Thank you, Megan.

We'll be moving on now to our internal service funds, and it's far too early for a government finance lesson, but I will cover briefly what an internal service fund is and how it works.

So there's many services of the city that are shared amongst all of our departments.

The best examples would be our risk fund, which we'll talk about in detail in a moment, along with our fleet and repair funds that cover the city's vehicles, and then lastly is our IT fund.

So on an accounting basis, if you think about it, these costs live in two different places.

They live within our internal service funds on one end, which we're gonna cover here as part of these slides, but you've already seen these expenses within our departments as well.

So those expenses from our internal service funds allocate to our departments.

They create uh what's not exactly a one-to-one because we use reserves to smooth out those collections.

But this is a good opportunity for us to talk about how we've seen movement within these funds.

First, I'll start with our IT fund.

Uh, this was one of the more informative detailed presentations that was given to our finance subcommittee.

And and before we get into numbers, I'll summarize by saying that we this is an easy area for us to look at how we compare to different agencies.

And overall, the city of Santa Rosa within our total budget spends spends 2.12% or two percent of our total budget on IT.

That is low.

We would expect an agency like ours to be much closer to four percent or three and a half percent.

So, really uh uh Chief Information Officer Tickner and his team.

Again, this is another great example of doing a lot with a little.

Frankly, the investment within our IT fund, we would love to see more.

Uh, this is another area where the city I think is is underinvested due to a lack of funding that we could invest and get some positive ROIs out of it.

When we do analysis, I mean we we could invest upwards to an additional six million dollars within our IT fund.

It's it's that dramatic, and again, that that follows in line with the two percent versus four percent investment.

Going forward, we'll see more strain in this area.

Technology will continue to be a growth area of efficiencies within the city, and therefore, as you've seen within our departments, our IT costs continue to go up, but that is really a recognition of the demand and need for those services going up more than anything else.

Overall, the department's budget increased by 7.4%.

And a big blip in that was our Excel software.

Excel is one of our main software programs here at the city used by multiple departments.

And often what happens with these software companies is their agreements can be a little bit uh conjointed on a time on a time basis.

So we had to pay a couple of years as an upfront cost when we began the contract.

Then we paid nothing the prior year, and now we're catching up onto an annual schedule going forward.

It's a little bit of a blip.

Big picture, we did not propose any staffing changes to the IT department for the next coming year.

They remain constant at a 33 staff to provide the IT services for all of our departments.

We'll shift gears now and I need to note very quickly that as we covered our general fund departments yesterday.

Uh, we skipped HR.

So I'm I'm so sorry, HR.

We will we will catch up right now, I promise.

Uh big picture is not not a lot of change in HR.

No proposed staffing reductions for the current year within our HR group.

We did shift an employee though.

We shifted an employee from our general fund HR function to our risk uh HR function.

So a net still zero, and that's really to better align that employees with greater benefits work that's coming out of HR.

But overall, a 9.4% increase to HR as a whole that is mostly driven by our risk management fund, which I will talk about now.

To give us some context, I think one of the first questions that our city manager asked when when she came on was tell me about the risk fund.

And for a finance person, you really spend a lot of focus on this area.

It's big dollars and overall $50 million uh annual budget, along with very large reserves that are corresponding with the programs.

I think our name here for risk risk management or risk fund is misleading.

What I would actually call it is our workers' comp, general liability, benefits, um, uh property insurance, and and city health plan fund.

Now that they won't let me call it that.

So we just call it risk fund.

But but risk fund is something different, right?

Risk you think to yourself, well, that's how the city mitigates just risk.

This is again kind of a catch-all for all those programs that I just named off and how they work.

I'll mention some highlights in that programming for healthcare plans is challenging on a budgetary basis, and that's purely based on timing.

We find out what our premiums for the year are gonna be in January.

It is on a calendar year basis, and we work off of a fiscal year basis.

What's happened within our budget, and you'll see there that our city health plans within the risk fund are taking an extremely large jump of 30%.

That is less corresponding with the increase that we're seeing on a one-year basis versus us being a little short last year on what we thought our estimate was going to be, and this year we feel is coming in higher.

This is a catch up.

Overall, though, we still continue to see a large increase in our health premiums.

Demographically, we've noticed within the city that we have more employees that have moved from a single player plan to family plans.

That's great.

Um, we love that here at the city.

That's awesome.

It does just come with greater increased cost.

Overall, we're still seeing around a 9% growth rate in health premiums.

We're all experiencing this in multiple ways.

Healthcare continues to be more and more expensive now over the past very long time, and that's continuing.

Um, other things I would point out is a slight decrease in our workers' compensation.

That's something that last year we made a concerted effort to shore up our reserve with.

And I would say what's unique with our risk fund is that it's it's all about reserves.

This is how we build reserves for workers' comp or build reserves for general liability.

Our risk fund as a whole is right at our uh recommended levels for our actuary and per each program.

So we are healthy when we have a healthy risk reserve that's neither overfunded or underfunded.

Again, uh Lorian coming in as a prior CFO.

This was one of her first questions.

It would be my first question walking into organization because often what you will see is that this these reserves can be either very short or very over.

You want to make sure they're just right.

It's really critical for the risk portfolio of the city.

Moving on to fleet, and there's two separate functions within our fleet program.

There is what we call replacement, and there's what we call uh repair.

So repair is our folks down at the uh at the shop that are repairing our vehicles and running work orders through our departments, and then our replacement fund is the the piggy bank that we send each each month from the departments to build up a piggy bank to replace our vehicles.

Over the past 15 years, there's been a concerted effort to ensure that we're replacing our vehicles on a better um economic basis, meaning that it it's frankly, it doesn't make a lot of economic sense to have really, really old vehicles that break down a lot.

It costs us more to repair them, it costs us more to maintain them, then ensuring that we're getting vehicles that are properly running.

We've also had a focus on right sizing our fleet.

Uh we have had fleet reductions over the past couple years to mitigate budgetary impacts, and that's an activity that we'll be continuing on with.

Um the last note I would add is that there it has gone down within the internal service fund, but within our departments, we costs are going up.

And that's again this this accounting complexity of how an internal service fund.

This is more a recognition of what our fleet superintendent plans to replace over the next year, being less costly vehicles than what was replaced the prior year.

So it's not necessarily a reflection of costs going down, it's a reflection of the schedule changing for this current year.

This could flop in the exactly the other direction the year after that.

But but I should mention um this is an area when we talk about vehicles and we talk about costs that we are strained.

We deliver a lot of our services through vehicles.

We we purchase a lot of gasoline that's within TPW's budget.

Parts continue to be more and more expensive for auto parts.

We continue to be shocked.

Um we continue to be shocked on how expensive it is to replace our black and whites or our uh our police vehicles.

These costs continue to go up and up, and again, we're seeing those costs here.

It's just a stark reality of our fleet mix.

Next, we'll move on to enterprise funds, and we will start with transit enterprise funds.

And the best person to talk about transit is Dan, and so we're bringing him on down.

Morning, mayor, counsel Dan Hennessy, transportation and public works director.

Um we have just a couple of slides here about budget highlights for transit.

Um, but before we start, one thing I want to note is that um one slide's really not enough to talk about what's going on in transit right now.

Uh, and that's my fault that we'll be back more over the next six and twelve months to discuss this more.

Um the first bullet up there notes that our major revenue sources are not keeping up with costs.

That is not a problem that is isolated to Santa Rosa.

This is a state and frankly a nationwide issue with how we're funding transit.

Um, a great deal of our funding sources come from um sales tax-based revenues.

Uh frequently uh both diesel and gas taxes, uh, but also local sales tax.

Um that 70% though is the vast majority of our our operating budget.

We also have funds from a couple of um from Fairbox, which is typically less than 10% of our revenues, our actual fares from uh transit, and then we have some direct apportionment from federal sources that also helps um provide transit service for the city.

Um, like Scott has been saying for others, the vast majority of our cost increases are due to salary benefits and actual providing the service with respect to vehicles.

Um, so non-controllable cost increases.

We also pay the transit uh enterprise pays a little over a million and a half dollars back to the city for services.

So for all of the administrative help that we get from human resources and finance and city attorney's office, etc.

Um, so you know, close to 10% of the budget is coming back to the city to pay for that and not directly providing service to riders, and there's a number of things like that, but like any enterprise fund, we're not only operating for the purpose or only paying for uh the purpose of providing service to constituents.

Um the third bullet is really important.

We have a goal to bank roughly one million dollars a year of our revenues for future bus purchases.

Um, this is the second year in a row that we're not doing that.

Um we're not doing that because banking that money would result in a reduction of service right now.

Our bus fleet is about 30 buses.

We have replaced 12 of them this year.

Um you see six of them out on the roads already.

The next six will be out on the roads in the next four to six weeks or so.

We also have an outstanding grant from the federal government through the low or no emissions uh grant program for an additional six electric buses and associated charging infrastructure.

We have been trying for the last 18 months to get that obligated so that we can make a bus purchase.

We have been in discussions with more FTA staff than you can count.

We appreciate the mayor and vice mayor's support uh and recent trips to Washington, DC to help advocate for those.

We have made progress in terms of how to actually move forward with that, but we are still knocking on wood to make sure that that happens.

If that happens, we will have replaced nearly two-thirds of our fleet within a couple year period, and we will be in good shape.

So while the bullet up there might cause some reservations, we're in an okay spot in the short term if we can get that grant obligated.

Um earlier this year we had buses running from as early as 2002.

Uh 25-year-old buses really shouldn't be on the streets once you're past 12 to 15 years.

Um they've exceeded their useful life and um they should be replaced.

We're now up to 2013's.

Uh, is our oldest bus in the fleet.

We have leased a few from Golden Gate Transit as their um service has decreased.

They had buses sitting around doing nothing, and they've been a um willing partner to help us deal with our issues.

As a result of these bus purchases and the lease agreement, I'm also happy to share that our uh preventative maintenance statistics have improved drastically.

We had our triennial review from the Federal Transit Administration last year.

That was one of our findings from them is that we were not meeting federal standards for preventative maintenance.

Um, and it was part of that was because our buses needed so much service that we could not staff our garage appropriately to get those buses out every day.

Every morning was a panic as to whether or not we would have enough buses.

That has not been the case for the last six months or so.

We're meeting and exceeding all of those standards now.

So the temperature is down with respect to uh the quality and availability of our buses, and again, um we're in a much better place than we were this time last year.

To provide a balanced budget and make sure that we're continuing to provide the service that we are.

We are pulling 1.3 million from our TDA uh reserves for next year.

Those reserves are held at MTC, that is the city's money, though it's not showing up in the city's bank account until we actually draw it from MTC.

That 1.3 is a conservative estimate of what we will need.

Um the city has 58 positions for bus operators.

We do not have enough money to actually operate uh service at that level at this point.

Um we have a number of vacant positions that we keep intentionally because we are always recruiting bus drivers.

We have people come, we have people go right now.

Right now we have 10 filled positions of bus drivers who are not driving for us due to different types of uh medical and family leave.

Um we're always recruiting.

We have four right now that we're uh have in background checks trying to hire.

It is routine that those four do not make it through background checks and training, right?

That is just kind of part of the cycle.

The bus operator posting is always up.

We're always recruiting, knowing that people come and go.

Um so we expect we the the budget is programmed to fully fund all of those positions.

We almost certainly will not use all of them.

Um we know that um, you know, at least five of those positions will remain vacant throughout the year.

And so we don't expect to use all of that um transit fund reserve, but we will use some, and we're in a position where the reserves are in good shape right now, but like the city's general fund, we are in a position of a structural deficit.

We need to either increase revenues, which are largely out of our control, or decrease costs, and decreased costs means decreased service.

Um based on where we're at right now, we'll have about eight million dollars at the end of the fiscal year in reserves if we change nothing, which is an okay place to be again.

But using or looking forward seeing the projections, we will be talking about service changes this time next year if we're in the same place.

So with that, we have started a review of our short-range transit plan to determine which services are the most efficient in terms of serving riders, which are costing the most in terms of actually delivering the service.

Um we know that based on new travel patterns, additional development throughout the city.

Our routes are not optimized right now.

Um there are things that could be improved in the system, even in terms of on-time performance.

We have started to lag behind in terms of actually making sure the buses are on time.

Um, there are some tweaks to our schedule that we are looking at to help um make that uh improve that metric.

But we will be coming to you sometime in the next six months or so to have a discussion about what some of those service changes might look like so that either we can have short-term implementation of that for things that need to get fixed now, or if we need to address this next year during the budget cycle, there will be you know, we won't catch you off guard.

Um, there will be opportunity for some dialogue about that and some community engagement.

Uh if you can go to the next slide, Scott.

So, to the um showing the budget for next year.

This is very similar to last year's.

Uh, it's a little bit higher.

Um, most of the revenue is from those outside sources from state, local, and regional funding.

Uh, there are about 20 sources of revenue in total that make up the transit enterprises revenue total.

The thirty thousand dollars of transfer in is from the general fund, that is for the veterans ride free program that has been paid for by the city for a number of years.

Um, that is continuing.

Um we are showing on here no use of fund balance.

Again, that is because the city is not in the or the money is not in the city's bank account.

It is in a dedicated city of Santa Rosa account with MTC.

So we are have that asterisk at the bottom that's showing that to make this a balanced budget.

We are pulling 1.3 million dollars of transit TDA reserves to balance the budget.

Um with that, um I can answer any questions about that or we can talk later.

We want to pause for questions right now, Mr.

Wagner.

Sure.

Okay, my colleagues.

Any questions at the moment?

So just Dan's at the moment.

Anything from you?

Uh actually just two quick ones from me as long as we're here.

Um what was there?

What's our um our reserve amount for transit?

Uh right now we have a little under 10 million dollars in reserves across the number of different funding sources.

Okay, thank you.

Actually, I think that's my only question right now.

Thank you.

Back to you, Mr.

Wagner.

Dan, thank you very much.

Thank you, Dan.

We'll shift gears back into moving on to the parking enterprise fund.

What you'll notice from our parking enterprise fund is this is the enterprise fund that operates the city's garages and and surface lots throughout downtown.

And what you'll notice is that the proposed budget does have a use of reserves and drawing down dirt reserves of $812,000.

I will say of all the areas within our budget, this is this might be the one that we did put as conservative.

This really does not factor in fully the increase in rates that came forward to council a couple months ago.

And really that's a function of this is this is how we always do it.

And we we're very hopeful about those rates correcting this.

We believe they will, but it's a matter of of being conservative and basing our revenue estimates off of what we've seen from actuals.

Furthermore, we believe that over the next few years that not only will the fund become uh solvent, but it'll be positive to be able to make the deferred maintenance investments needed currently within our garage and some lower hanging fruit areas overall the very very large infrastructure issues within our parking garages that are in the tens of millions of dollars.

We do not currently have a funding source to address.

Uh I will point out the bottom line number of 121,000 to call out.

This is specifically for support for the DAO in the downtown betterment district.

The parking fund supports that group by the tune of 121,000 a year.

And overall budget highlights, much like the same.

We've seen salaries, you know, fire and earthquake insurance increase along with IT costs.

Additionally, we are proposing a strategy of looking at some non-permanent positions to assist parking enforcement.

We've seen that our parking enforcement staffing is short of what it should be to ensure that we remain uh break even within our parking enforcement structure.

I mentioned yesterday that we've seen the general funds subsidize parking enforcement for a couple of years.

This is our strategy moving forward to try to address that, which impacts the parking fund.

Overall, the parking funds reserve is healthy at a five million dollar reserve as of uh June 30th.

Next up is our Bennett Valley Golf Course.

A few things to highlight in that we've uh kept our general fund subsidy of 500,000 the same year over year.

We have we are not proposing to change that.

What is going to be a change is that we've directed the we're directing our golf course to make some very needed equipment replacements that are required at the golf course to maintain operations.

These are let me let me get it right.

Roof repairs, broken kitchen equipment, vilation, uh, and then a club beverage cart.

These are all things that they need.

This is not uh fancy investments in the golf course, it's just to keep keep folks coming and keep a roof from not leaking.

It's not not much better than that.

Um we are hopeful in the next year and in talking with our vendor vendor that they may be able to launch a a par three course on the golf course, which would be really great and be able to utilize the course during some periods where right now we can't do the rain.

And with that, we'll shift gears into our water enterprise fund and welcome Director Burke down to the staff table.

Thank you.

Good morning, Mayor Stapp, uh Vice Mayor Krepke, members of council.

I'm Jennifer Burke, director of Santa Rosa Water here to give you a uh overview of our budget for fiscal year 26-27.

Um, if you go to the next slide, please.

First, I just wanted to take a moment to let you know and thank your board of public utilities.

They did an exceptional amount of work on our budget this year.

We had two budget subcommittee meetings with our board.

We had a full study session, and then we had a recommendation.

So the budget before you today is fully recommended by the board of public utilities.

We also met with our sub-regional technical advisory committee, and they recommend the budget that's for you today.

So you'll see, pardon me, to put on my glasses.

You'll see uh this is a snapshot of our budget.

Approximately 57.5% uh is operating costs department wide.

About 19 and a half is capital, and the remainder is allocated to debt service and overhead.

If we go to the next slide.

Some of our major budget changes, uh, we are looking in our stormwater fund to have a project to address emergency storm drain repair.

This is the 156,000 dollars that we're putting into that program.

We didn't fund that last year because we had a lot of carryover budget, and this year we are utilizing capital facility fee funds for this budget.

There's an increase of roughly 3.7 million, and this is mostly due to Sonoma Waters 8.21% wholesale rate increase, as well as an estimate of modest growth in how much water we think we'll be purchasing next year.

And then last we have about 600,000 increase in water CIP project funding.

We went up in all of our CIP plan funding for water, wastewater, and regional and had a reduction in stormwater.

So that's why the net is about 600,000.

And we are not proposing any changes to staffing levels.

If we go to the next slide, please.

The general fund portion, that is the general fund portion of our stormwater and creeks budget.

That increase is strictly due to labor costs and IT allocation cost increases.

In our water fund, you'll see about a $3.6 million increase.

Again, a lot of that is due to the $2 million of increased costs from Sonoma Water for purchases of water.

And then also I'll just call out again that capital improvement fund citywide looks like a big percentage, but that's that additional 156,000 that we're putting in for the storm drain improvements that we need to make.

If we go to the next slide, please.

Calling out a couple of the pieces.

If we look at the local wastewater OM, that is, oh sorry, pardon me, that's our sewer collection.

That's a very modest increase.

If you look at our wastewater resource distribution increase, there's about a 9.9% increase, about $873,000.

That's due to a rise in biosolids disposal.

So we have to deal with some increases in costs and also making sure we're budgeting appropriately for that disposal.

On the wastewater resource recovery, again, that's our regional system, and that 6.2% or $2.4 million increase is due to labor as well as increased electricity charges.

As you may know, right now we are, I believe, the largest electricity user in the county at the Laguna Treatment Plant.

In our engineering resources fund, we are anticipating that we may have some folks who are choosing to retire, so we're planning appropriately for that.

And then we have a decrease in our OM projects, mostly because we have significant carryover from the previous year, so we're not adding funds to that.

If we go to the next slide, you'll see here is the fund summary, our revenues.

We're incorporating the 6% rate increase that was adopted by this council last year for our next fiscal year.

Um we talked about our expenditures.

We have about $16 million, $16 million that we're spending on CIP projects or plan to spend on pre CIP projects, that's about five and $500,000 more than our current budget.

And then we have a small amount in the transfers out for some debt service as well as utility impact fees that we pay for CIP projects.

If we go to the next slide, please, on our local wastewater slide.

Again, on revenues, we're including the 5% uh rate increase that was adopted by council for next fiscal year.

We have our OM expenditures for our CIP.

We're again increasing a minimal amount, about 300,000 compared to this fiscal year, as we're slowly building up, building up over uh the next few years of our rates, our capital investment, which is really good.

On transfers out, we have a small amount again for debt service and a large portion for utility impact fees that we pay related to our CIP projects.

And then also in transfers out is our portion of the regional budget, which we're at that next slide.

Thank you, Scott.

And as you may recall, this is split between Santa Rosa, which is where roughly about 74% uh of the funding uh that goes uh for the regional enterprise, our four other partners make up the remainder.

Uh that split is based on the amount of flow that goes into the treatment plant.

So Santa Rosa is about three-quarters of the flow that goes into the treatment plant.

We also have miscellaneous revenue.

Um we have a really good tracked waste program uh where we're able to serve the community and have trucked waste brought to our treatment plant, and then we're able to turn it into energy.

We're continuing to see uh good revenue and growth with that program, so that is a lot of the increase in the miscellaneous revenues that you see before you.

Um you just saw a pretty detailed breakdown of this budget on April 21st when you approved our preliminary recommendation, but that included all the OM expenditures in front of you.

Um I will note there's just a slight error on this slide.

The CIP expenditures are $13 million.

Um, $2.3 million of that was captured in the OM expenditures line by mistake when the budget was rolled up, but it doesn't change uh the bottom line, the total or the capital spending.

So and then if we go to our last slide on our stormwater enterprise fund, again, you may recall we have an assessment that provides um uh revenue for our stormwater and creeks program.

About 53% of that goes to creeks, 47% to storm drain.

Um we are uh going to be proposing as as per the resolution our CPI increase of 2.49 percent.

So that was included in the revenue projections for next year, and then um we are continuing to have just a small amount that we're spending to make sure that we're complying with our MPDS regulations for our stormwater permit.

And that is the water department budget, and go on.

Thank you, Jennifer.

Thank you.

The mayor, I'd suggest if we can take questions now on either our enterprise funds or internal service funds before we get into capital program, we'd be happy to receive any questions from the council.

Perfect, looking at my colleagues, Ms.

Rogers.

Thank you.

Um I had a question about parking.

Uh are we having a hard time attracting retaining, or just that there were no uh FTEs open for enforcement in how much uh about per FTE and how much are we looking for uh revenue per FTE?

Thank you for your question.

Um Chad trying to hide back there.

Oh, he knows these questions were for him.

Good morning.

So, no, there's there's not at this point an issue with re hiring new enforcement staff.

We just were going through the steps to try to address how we can backfill some positions and then having folks that couldn't be uh uh contributing to the fund at this point, but come July one, we should be back on track with uh fully staffed and then also be able to expand what we're doing as far as enforcement is concerned.

I'll elaborate a little bit more in saying that given the size of that staff, which is how many total enforcement officers.

So we have four and a half and enforcement officers.

So if we end up in situations where a couple of them may need to be on leave for various reasons, that's a pretty dramatic impact to our revenue, and and again, our strategies really to try to smooth out that impact when we're seeing those types of uh personnel actions within that group.

So, roughly 200,000, we believe we'll be able to make up through this strategy.

So we're we're feeling good about that.

Perfect.

Um sorry, the next one is about Benavelli golf course.

Thank you, Chad.

Um what are we looking at projection as far as how long, how much longer we're gonna be subsidizing the golf course?

And where are we at with um the loan that was provided from help me out one of the grids, where are we at with the loan payback?

Um, and I think I asked the same questions every year, so there we go.

Um thank you for your question.

The simple the the what I would boil down our our our golf course subsidy with is it's really right on pace with what the total debt service for the fund is.

So paying off the bonds which were associated with with building the restaurant in the clubhouse, along with the loan from our park development quadrant that happened.

Those are online to pay off in 2031.

What I would hope is that by 2031, when that falls off the books, now the fund on an operating basis is more stable.

Now, I really want to provide some caution towards thinking that come 2031 the financial issues of the golf course are over because those bonds paid off.

They're not because within our budget it still does not address the major infrastructure issues that we have at the course.

We again are trying to properly invest to keep the operating function the best they can with those things that I mentioned earlier, whether those are uh you know mowers and and roof repairs, that really is not to speak to the greater spend that needs to happen per the study um that's needed at that course.

So the good news is that we're almost towards the end of that debt schedule, um, and that's gonna help.

So I don't want to discount that, but um we'll see in five years how true that projection ends up being.

Does that help?

It helps.

Um in my brain, what I heard was we're never gonna be done subsidizing the golf course, and I don't think that is what um if I recall correctly or what I believed council would be doing for uh very long term.

I felt when it was proposed to us that it was going to be uh more of a short term uh not forever in perpetuity.

Yeah, thank you for that comment, and I'll address that.

And here's the way I would put it.

I think that if our debt service was zero this year and we weren't paying for those bonds, we wouldn't have a subsidy for our budget in this current year for the golf course, and that's just a function of funding to the necessary level.

Right now, the necessary level is to keep operating function, and that requires a $500,000 investment.

What I think was a little bit confusing, or or maybe just a little more detail was needed around the golf course conversations when the study came forward at that time.

Was that the and Jason?

I'm gonna let Jason speak to this too.

But go ahead, Jason.

Thanks.

Thanks, Sass CFO Wagner, and and council member Jason, that assistant city manager.

I'm just gonna step in a little bit and say, um, as you recall when we went out and did the RFB to try to identify an operation and maintenance contractor.

Uh, uh we had a national firm come out and do an evaluation for us.

We knew that over the term of that contract, we may or may not see additional relief based on the general fund subsidy.

Uh it was, it looked good based on the curve, and quite frankly, golf as an industry is doing just fine right now.

If you separate out the debt service from the golf operations, we're doing good.

Uh, that doesn't mean we're we're not still subsidizing.

So, your question is what do we do moving forward?

Um, we have uh exercise two options in order to extend the contract of the existing vendor that's doing the operation and maintenance.

However, we have to go out with a new request for proposals over the course of the next 12 to 18 months.

Within that, we've learned a lot about what this operation and maintenance program looks like, and we intend to strengthen that in an effort to better uh capitalize private dollars onto the golf course to reduce our general fund investment moving forward.

That doesn't mean we might not have to help, especially when we're talking about a 10 million dollar irrigation system replacement for a hundred and fifty acre park.

But utilizing the contract terms to incorporate that public-private partnership, those private dollars is going to be huge, and that's going to be a shift in how we do that request for proposals and how that contract is going to look moving forward.

We had to start small, now we understand, and we're gonna start to build into a much bigger, stronger program that we think is gonna provide that long-term stability.

Thank you, Assistant City Manager.

Any other questions, Ms.

Rogers?

Ms.

McDonald.

I have a couple questions for you today.

Um CFO Wagner.

Sorry, the coffee has not cooked in.

My first question actually may be for you or Megan.

Um I get a lot of inquiries about doing a senior park um zoning overlay for our mobile home parks.

And I didn't see um, I I don't know the work plan.

I don't know if that's something we're looking into.

I know we've done rent stabilization uh stabilization and I see the cost to that.

Could you give me a projection of how much that would cost for the city to do that type of study or look into that?

Good morning and thank you for your question.

So if the city was to look into that, that would be a joint project with planning and economic development as it is a zoning effort.

So the mobile home parks would need to have a zoning overlay applied to them that would restrict the occupancy for 80% of the households in those parks to 55 or older.

Unfortunately, we do not have a cost for what that effort would be, uh, but there would be if it was approved by council and implemented, there would be a compliance effort on the part of housing and community services, and I anticipate that would be paid for out of the mobile home stabilization fund that was referenced in the first slide this morning.

And in that fund, Megan, would there be money that is appropriated or enough money to cover those types of costs?

Part of our compliance team, which is two FTEs that review age limits, affordability, and other restrictions we have on housing are paid from that fund.

So yes, it would cover it would cover that staffing cost.

Thank you for for that.

I appreciate that, and also knowing um that we would need to be working with that on something like that.

I appreciate that very much.

Um you brought up IT and our lack of investment in IT from 2% that would need to go to 4%.

What type of efficiencies or uh return on investment will we see if we were able to increase that?

And would it be a one time investment in equipment or those types of things, or would it be an ongoing uh program that would need to eat?

Yeah, thank you.

And I would describe them as ongoing, and and really this is how IT costs grow, and this is what we're seeing through our departments is that each department is doing an analysis of the tools that they have and the tools that are available to understand well, how can we better our process and make it more efficient?

One example that moved forward of the past year that council saw was our e-discovery software, right?

That's an increased cost to us, but it's alleviating work amongst all of our departments.

Where sometimes return on investment can be tricky in my world because um savings means that I can point to somewhere on a budget and say something costs less, but an overall return on investment in efficiency is much harder to put a dollar basis to.

So we know that that investments with our IT department in that way have a positive return to us.

It's just um a lot of times that's around efficiency within our departments, giving them the ability to work on more things.

Okay, thank you for that.

Um we brought up workers' compensation and we saw a slight drop in that.

Um, I know some of our departments have been cut down to the minimum or staffing levels like we heard yesterday from 1982 or 1999.

Um, do we see in specific departments that we have a higher increase in workers' compensation issues and can that be attributed to understaffing for specific jobs that we have in the city?

And is there any or have we done any crosswalk to see that if we did staff up, we'd actually see a lower amount needing to go into workers' compensation in the risk fund, or actually people being out on injury?

Thank you for the question, Dominique Blanchi, human resources director.

Um I would say that the trending has actually been pretty stable.

The departments that you see the higher workers' comp claims are your safety, um, and I don't I haven't seen any outliers in terms of with us reducing uh staffing that the workers' comp rates have gone up or that there's been an increase in claims so far.

Thank you.

Thank you for that.

Um for the parking fund.

I know that we have talked about um our surplus and what we have specifically around garages, and we have a a large deferred maintenance uh need for the parking garages.

When we sell those garages, does that money go back into the parking fund and then could be reinvested in the deferred maintenance that we have on those?

And uh is there any plan for that?

Yes.

Uh that's spot on.

That's that's exactly the core of governmental accounting is is it's separated by fund because that is the parking funds asset.

So when that gets sold through surplus, et cetera, those funds are gonna go back to the parking fund.

And you're exactly right in saying that our long-term vision for that is as we're able to attain funding through any potential sale of those assets, that they're gonna be reinvested into some of these larger capital needs that we have.

Frankly, that's our uh one chance there within the in the parking fund to get that level of funding to be able to accomplish some of those larger infrastructure needs.

I think that's important because often it will come to me as a question of, well, we're selling a parking garage, we're gonna do X with it.

And it's like, well, no, we we legally can't do something outside of the purpose of that fund.

So thank you for your question.

Thank you.

And for the Minute Valley call, of course, um, Councilmember Rogers asks what my question was is to what end do we um continue to backfill the enterprise fund?

Um, and it's I'm happy to hear what we're backfilling as of uh late.

However, I heard also that we have about a 10 million dollar investment that we need to invest in irrigation or um watering the golf course appropriately.

Um, could you tell me, does that money need to come from that enterprise fund?

Does it have to come in the form of a bond, or are we able to use CIP money to appropriate working on something like that?

I wasn't sure because it is an enterprise fund where the money had to come from.

That's a great question.

And and the core of how an enterprise fund works is that anything or any any funding source can contribute to it, but you can't take the money driven by that fund and send it somewhere else.

So certainly general fund.

We are looking at if there's any other funding sources that can be applicable towards those areas, but as we all know, most of our funding sources are very restricted, right?

The funding source that is not restricted is the general fund.

And this is our challenge is that our general fund is is so um strained at the moment fiscally that this is where those investments are challenged.

And overall, what I would what I would add around this golf course conversation, which I haven't heard yet get talked about very frequently, is that um not all agencies have a their golf course fund in a in an enterprise fund.

They can live within the general fund.

So this is not a unique thing for the city of City of Santa Rosa, but at the same time it's very not unique for the general fund to have a permanent subsidy around golf within other agencies.

Now we have not had that here.

I'm gonna just ask a clarifying question on that.

When you talked about the fund for the pond that could come out of an enterprise fund such as water investment in the pond or does that have to come out of CIP or general fund I'm sorry I I heard enterprise fund and I went right to water has money.

So I wasn't sure I know and Jennifer Burke's like we don't have any money for that but I I just want to uh just know where the buckets could come from on that specifically that's a very helpful clarifying question and a great example to talk about how funding sources mix so we are we are building um a a water storage solution at Bennett Valley Golf Course that impacts other types of restricted funding sources for example there is a small component that's tied to our our creeks right so now you're talking about the creek now you're talking about well okay we can we can use some form of that creek funding for an aspect of this project but again we are we are very strict and mindful with the restrictions against funding sources so in other words just because there's water in something doesn't mean that we can um make the water enterprise pay for it unfortunately and we are very strict about Prop 218 here not just Jennifer but myself uh to ensure that that we're not we're not doing that it's it's it's critical for us so we look at any project across any function of the city whether it's parking or the golf course or or the general fund or or any of the or fire stations any any type of project we have at the city we're looking at across all of our 128 funds which I mentioned yesterday to understand how can we utilize different aspects of a project to make it happen.

The water storage solution at Bene Valley Golf was actually a really good example of that.

Great thanks for the clarification and for the um ability to do high financing and see how we can use that gray area to fund a project that needs to be completed.

I appreciate that I think that's all my questions for now mayor.

Thank you any other questions a quick one from me and Jennifer you can shout it out from the from the from the stands is it true that our wastewater treatment plant is the largest electricity user in the county did I hear that correctly oh I didn't mean to make you walk down just for that yes uh mayor snapp I believe we are the largest electricity user in the county we do produce a lot of electricity on site as well and we're hoping to be less of a user once our new ultraviolet disinfection project goes online but we're not quite there yet.

That's interesting more than K site more than one of the hospitals we use that much there yes uh mostly due to the current UV system we have which is over 20 I think five years old now so it is very much an energy demand.

All right perfect thank you sorry to make you walk down uh that's it from me thank you to all thank you to all the enterprise fund uh directors department directors um and with that Mr.

Wagner may I just wanted to add one thing here in terms of perspective I wanted to really recognize Jennifer Burke because the water department that we have in terms of its scale and scope is unprecedented from anything that I've experienced in terms of my career it's a 200 million dollar operation the infrastructure is massive it's an enormous responsibility it could easily be its own uh separate standalone water entity and it's just spectacular in terms of the leadership that she's shown, her entire team uh it's it's very impressive.

It's a $200 million dollar operation all by itself, almost very close to the amount of the general fund, and just really wanted to acknowledge the scale of the operation that she's managing and uh the complexity of it.

And we, you know, it's a finance conversation, and so it's by fund and it's explaining you know the major assets, but it it really is just for a sense of you know depth here and scope, it is very, very significant.

And so just we're lucky to have her and her entire team.

Thank you.

Thank you for underlining that, City Manager Farrell.

Um, that's not that's not news.

Anyone here on the day.

But just wanted to just mention the scale of this operation, it's pretty impressive.

Indeed.

Indeed.

Thank you.

Thank you again.

Uh, and thanks to all the directors, and and with that, back to you, Mr.

Wagner.

Thank you, Mayor.

And now it's time for the the big show of today, which is the citywide capital improvement program led by Director Hennessy.

Thank you, Scott.

Uh, it's not much of a show.

You've heard about just about all of these projects before.

Um, we talked in February around the bicycle pedestrian overcrossing about our CIP situation to make that project come to fruition, what that would mean for this fiscal year.

We talked at the following council meeting around MLK Park around the parks fiscal situation and making that project come to fruition.

Um so a number of these decisions have been baked for for months, um, but here today to outline um everything that's moving forward.

Next slide, please.

Um, the total citywide budget for capital improvements next year is 76.5 million dollars.

Uh 60% of that comes from the three water funds that are for water funds that uh Jennifer discussed earlier.

Uh the numbers on this slide match um what she showed shared earlier.

The TPW portion of this is just under 30%.

Uh the parks portion is about 10%, and then the fire and PED uh is about 1% of the budget.

And I'll walk through each of those uh funding programs uh individually.

And just as a reference, again, this is this number last year was $76.0 million dollars.

So just about the same uh this year as was uh dedicated last year.

For the fire department, um, most of this is um CFF funds that are dedicated to fire facilities.

They are split by uh the fire staff to uh facility improvements that they'll be making in the future.

Um perhaps obviously $600,000 isn't enough to build fire facilities, even over a period of time.

These sources are um combined with Measure H and other sources for uh improvements that are needed.

But the two projects that you see on there for a new fire station, uh Fire Station 9 and Southeast Santa Rosa for serve the Kwana Springs area.

Um it's a portion of their budget, and then the other is the Fire Station 11 that's a temporary facility on uh Lewis Road, uh, is dedicated to move that towards a more permanent facility.

Next slide, please.

For the water department, these again are summaries of the numbers that Jennifer shared just a few minutes ago.

Um, in total, it's a little more than 44 million dollars plus additional funding from transportation and public works, uh, in the amount of six hundred seventy-five thousand dollars towards stormwater and creeks uh improvements, and then uh the stormwater and creeks enterprise and CFF is another just over 400,000 dollars.

Next slide, please.

The question I get most often is not what projects are they doing, but where is the money?

Because it seems to build up.

And so I put these slides together this year just as a way to explain this a little bit differently that also helped me make sense of exactly what the money is doing.

So that first column of numbers is where the existing money, previously allocated funds that are in the bank right now, what those funds are doing.

The second column shows what they're going to, what the proposal is for next year.

So under that uh data line or that uh thick black line is money that you will see in construction projects this year.

Um, so more than 20 or just under 23 million dollars is for is dedicated for projects that are currently being designed and are either fully funded or are now fully funded, with an additional 11.9 million dollars from this year's 16 million dollars.

Um below that data line represents almost 65 percent of the water local water service CIP budget means 65% of that money is something that will be in construction in the next 12 months.

Above that line is projects that are in design but are not fully funded, or new projects that the water department has brought to capital projects for engineering, or work for the water department to do master plans and studies in terms of preparation of the next set of projects.

So again, like above that data line is projects is the amount of money that is not going to be seen in construction.

And you know, that first line is money that the capital projects team will never see directly, but it's all work done by water department staff in terms of understanding what needs to be done and making sure that there's a coherent and cohesive plan for infrastructure improvements.

Next slide, please.

This is the same for the wastewater.

This is even more drastic.

73% of the funds are for projects that are in construction or will be in the next 12 months.

Um we have uh a couple of major projects in local areas uh throughout the scattered throughout the city.

If you go to the next slide for the regional, um it shows a little bit different story, and part of that is due to the way that the treatment plant, the improvements that have been under construction now, and the next project that's coming.

We have a major electrical improvement project that's not reflected on here that will be funded through a uh a bond issued by water.

Um that project is anticipated to be almost 35 million dollars and is close to being finalized for design, and so that's not shown on here, but is been a major source of uh work and effort from both the water, the LTP staff and the capital project staff to get that ready for construction.

Um so what you see on here is only uh just under half of the regional proposed budget, but including that $35 million, it would be nearly 80% would be for projects that will be in construction next year.

And the last one for the Stormwater and Creeks Enterprise, similar story, uh three-quarters of the money for something that will be constructed next year.

Um, and I did just want to highlight again that the funding sources for this come from a number of different places.

This is not strictly um water funds.

This is also the stormwater and creek enterprise, and then gas tax contributions from transportation and public works.

I highlight that specifically because that'll show up from our budget in terms of why the numbers change.

That's not reflected in the later slides.

Okay, for parks, um, we had uh nearly $9 million for this coming fiscal year for park improvements.

7.1 of that is park development impact fees, which are split across the four quadrants of the city.

We also have sub district in the downtown that is again divided by those uh quadrants uh where they exist in zones one, two, and three.

So the the numbers on the um on the slides show where where the dollars are allocated.

The ordinance that was passed adopting this measure by the council allows us to not spend directly in those quadrants, but to move money between them also to provide flexibility for uh significant projects for the community.

That level of flexibility has not been used in recent years, but I am proposing to use it this year.

If you'll click, Scott, the the blue that you see on the slide right now are projects that have either either recently been completed or are under construction.

Um in the Northwest Quadrant is Dutch Floor Park and the Finley Aquatic Center, under construction in the Southwest Quadrant are Cook School Park and South Davis Park.

We have the Kawana Springs community garden project that has been bid and we'll start construction later this year.

We have work going on right now at Howarth and Galvin Parks.

You'll click again.

Those orange stars that you see on the map are projects that are ready or will be ready shortly.

These are the things that we can spend money on.

Um we'll have a project ready in the Northeast Quadrant in Recon Valley for Recon Valley Community Park later this year.

We'll have work to be done at Bayer Park, we'll have a project at Martin Luther King, and then we'll have another uh Kawana Springs uh community park.

You'll note that two of those stars are in the southeast quadrant where we have the least amount of money.

So our money does not line up with where we are ready to do work.

These last set of yellow stars are projects that we're working on that are not going to be ready this fiscal year.

So we could allocate money to them, but that money is gonna sit until at least July 1st of 2027 when these projects will be ready to bid and construct.

That includes a place to play, Roseland Creek Park, Lower Colvin Creek Park, Fremont Park, and the Southeast Greenway.

These are all projects that this council has previously funded.

All we are proposing to do is finish them.

So again, our two strategies are we can either fund projects that will not be ready and stay, keep that money within the quadrants that they belong to, or we can move the money between quadrants and build stuff that is ready to be built right now.

There is no requirement that we track that over time, pay back other quadrants.

However, I am proposing to do that, that we will be borrowing from the Northwest and Southwest quadrants this year to finish Martin Luther King Park and the other projects in the Southeast Quadrant, and we will come back next year and pay that back so that we can finish the Roseland Creek, Colgan Creek, and a place to play projects.

Based on what we know right now, we anticipate about 50 to 60% of next year's fiscal year budget will be required to finish the projects that were on the books, and then we will be able to start a new batch of projects to begin preparing.

But this will again clear out everything that was on the books.

We had when we inherited this parks capital improvement program at the beginning of last fiscal year, we had almost 65 million dollars of capital improvement funds available to us.

With this proposal, nearly 55 million of that will be in construction by next spring.

So we have we have moved everything forward as fast as we can.

Park staff is itching to start on new projects, and I keep telling them no, please finish what we've got.

I know it's driving them crazy, and I apologize to them in front of all of you right now for having to say no to them, but we've just got to get this stuff done that has been promised to the community for a long time.

So with your support, I look forward to bringing more construction contracts and getting some of these projects uh on the ground and and available to enjoy for the community.

All of that is summarized on the next slide where we see a much simpler distribution of funds this year, again crossing crossing those quadrant boundaries and putting a vast majority of the money towards the Southeast Quadrant where we have the MLK Park uh project that we reviewed in February and the Kawana Springs Community Park.

We'll also have this fully funds the Recon Valley Park and the Bayer Play Area Innovation.

Um we have small dedicated amounts for uh improving some of the um landscaping work that was done on Fountain Grove uh last year, and then cleaning up uh a budget discrepancy from the South Davis Park project that's under construction right now.

That $50,000 might not be necessary, but it's there just to cover just in case we do need it.

And then, of course, we we have the downtown parks uh two accounts.

Umtown parks zone one, this is the first time that payment has been allocated in that quadrant for portions of northwest side of downtown, west of the freeway and north of uh highway 12.

The parks that are eligible for improvements in that area are DeMayo Park, Duterk, and uh Depot Park.

And we're talking right now with the Railroad Square District about potential improvements to Depot Park.

Similarly, working with the DAO with our planning and economic development team on downtown park improvements uh in zone three.

You've seen some of that in uh Courthouse Square, you've seen some of that in Comstock Mall in JG Way, and more small-scale improvements that respond to this funding source are coming in those areas.

Um again, this, you know, we could allocate the funds as we always have.

Nothing additional gets done this year, or we could be a little bit creative and try to build some stuff.

Next slide, please.

Alright, to close out for transportation public works.

So uh on the slide initially, you saw about $22 million of funding for transportation and public works.

This is excluding the $675,000 that has been moved towards stormwater and creek improvements.

Much of that is for operational needs.

Things come up with where there are failures throughout the year, and this gives the stormwater and creek staff an opportunity to make small-scale fixes.

Almost $9 million of our funding is from gas taxes.

We also are now transitioning from Measure M to Measure DD or otherwise known as GOSONOMA.

That fund has actually increased this year.

So we would look forward to that continuing also, and the additional flexibility about how we can spend that funds.

Next slide, please.

The $21.3 million dollars that you see is spent on a little bit differently than what we had shown the last couple years as we determined how to dedicate our funding, but that comes from the discussions that we had in the winter around the bicycle pedestrian overcrossing and the Jennings crossing.

We had to allocate nearly six and a half million dollars to finish those projects.

We've gotten funding for both of them to be off the ground and moving.

We need to clean that up on the bicycle pedestrian overcrossing, and then sometime this summer we're gonna owe Smart a check as they currently have a bid opportunity out on the street, request for qualifications for crossings in Santa Rosa, both at uh to construct our third street improvements with the signal and the crosswalk there and the connection to the Joe Rodota Trail and the Jennings crossing.

I would anticipate that both of those projects begin construction in 2027, given the timelines and where Smart is currently at with their solicitation efforts.

We have maintained the commitment to pavement maintenance that I made to you last year, and in fact, uh strengthened it with nearly 12.8 million dollars towards improving streets.

We'll talk a little bit about where uh that money is going in just a moment.

The vast majority of it is going towards the Oakmont paving project.

We have put some seed funding towards this in the past to begin design and preparation of bid documents.

We are well on our way to soliciting that design build.

This would fund the project so that such that work could begin later this year, continuing through summer of next year.

Um, but you would see that um begin in earnest uh this fall.

We did come to you, I believe in March with a proposal for a design build effort so that we could start faster.

Uh those solicitation documents will be out shortly.

Um again, the project estimate now is about ten and a half million dollars.

We are just short of fully funding that with this proposal, but there are a couple of strategies we have to get there that actually we'll be able to talk about on the next slide.

Because of the way that we've reoriented ourselves around pavement maintenance.

We actually bid the Bennett Valley pavement maintenance project before we had the funding to do it.

We designed it, we know that it could start this summer.

This funding would be, if approved, would be available on July 1st.

And contractors could be out there as soon as this July to do this project instead of waiting until next year.

So this is just getting money out on the street as fast as we can.

The other benefit to that is that we had estimated this project to cost a little over two million dollars.

Uh the bid we got last week has changed that cost estimate to be 1.4 million dollars.

So I know right now that there's $800,000 available.

Another benefit to trying to speed up this process and time our projects to when the funding is available.

We also have an old grant-funded project that is finally coming to fruition.

We have gotten all but one approval from Caltrans to be able to implement this.

This was tied to an affordable housing grant, but we'll be repaving a number of streets in the downtown on Brookwood, College Avenue, Fourth Street, uh, and then a few small segments on the west side of the freeway also.

Uh, but that work I anticipate starting later this summer, also.

Next slide, please.

Um, before we talk a little bit about the pavement condition, I did want to also remind that we have under construction projects on Hopper Avenue right now.

We have uh already funded improvements for bicentennial and fountain grove that will be bid this summer.

Um we will have a final Roseland paving project from the $662,000 contribution from the county next year.

We construction has begun on the Pearson Street reconstruction and paving project and construction is ongoing and should be completed on by Memorial Day on Sonoma Avenue at Montgomery Village.

So a lot of work going on, and despite all of that, and despite this renewed focus on pavement maintenance, my inbox is not short on complaints about the state of our streets.

We want it to keep in that cycle so that as we get down to 50, those are the ones that we're repairing, bringing back up to 100, and keeping investing in that cycle.

That's where we get the most bang for our buck.

We have almost a third of our streets, though, are poor or failed conditions.

The vast, vast majority of those are in our residential neighborhoods.

Because they get ignored, they have lower usage.

For as many complaints as we get about those, if we let the Santa Rosa Avenues and colleges and other arterial streets, you know, we would see far more complaints about those streets.

And so we have a decision to make.

Do we invest in our very worst streets or do we keep the good streets good?

Um right now, the only decision or the only way these streets get funded is through CIP decision.

And because it's um CIP funding, you're you're left a little bit to the whims of you know, staffing decisions, uh direction from city managers, you know, direction from the council, but you've also, you know, we have other needs too, right?

We have to build a 20-year bridge, we have to get a crossing across the uh train tracks.

Um, and so this becomes a real challenge in terms of prioritizing these projects.

Next slide, please.

If we look overall at the city, we have been fairly stable with respect to our PCI over the next over the last few years on a citywide basis.

Our good streets are remaining good, our okay streets are remaining okay.

Where we're seeing a problem is that our we're not making any investment in the poor streets.

And so we're seeing that degradation of streets that need help could still be saved, but are not our most important streets in terms of serving volumes dropping to a place where they need to totally be reconstructed.

So the biggest change, uh, one more, Scott, is that you see that bottom uh level continue to tick up.

And so the number of roads in very poor condition has doubled in the last five years.

Um, you know, that that is an intentional decision.

We are focusing on preventative maintenance, on keeping the good streets good, on the best value for our money, and frankly, we are ignoring the failing roads just because of how much they would cost to fix.

Addressing the failures is almost certainly going to be get more failures because we won't be investing in the streets that we could save and bring back up, given our funding levels.

And so, as a result of that, our our citywide PCI is not going any higher, right?

The the number, right?

All of these streets average together to create that number at 61.

The by not investing in the streets that rate from zero to 40.

We have this weight that just keeps dragging us down, and we're never going to increase that number without uh a real investment.

Next slide, please.

So just as a reminder, I know you've seen this slide before in past presentations, but it's so much cheaper to keep good streets good than to reconstruct poor streets.

And the typical life cycle curve, somewhere in the order of about 20 years, we actually do get longer lifespans on our streets.

We find our requirements are the highest in the county in terms of the quality of pavement and the materials that we require.

Um, but that really you see that most in our arterials and collectors where we invest.

However, 55% of our streets are residential and local streets.

They serve far less volume individually, but collectively, they are the streets that many residents um experience every day.

We'll go to the next one, please, Scott.

This is a graph of our network condition by street.

We know the condition of every street.

I think people sometimes frequently write in and suggest that we don't know.

We know.

We just can't get to them.

If we look at uh if you'll click one more time, so this is now just a subset of the residential streets.

Um still lots and lots of green on there.

There's been huge investment.

I mean, you see what happened has happened in the Fountain Grove and Coffee Park areas where we've just put 20 million dollars of investment.

Those are green, those streets are not going to be need to be touched for a long time, but it took 20 million dollars to be able to do that, uh, mostly of recovery funds.

Um, if you'll click one more time, this is what it looks like when we've got it isolated just to the very poor streets.

This represents about 44 center line miles, which is about 8% of our network.

Um, we estimate that it would take about 42 million dollars to repair all of those streets.

So that's 42 million dollars in addition to our ongoing investments to keep the streets that are good or very good from failing, to keep those in the the green and the blue portion of the chart so that we don't lose those.

How do there are a number of different ways for jurisdictions to fund things like this?

One is to cross our fingers and hope capital improvement dollars go up.

Um I don't think that's happening anytime soon.

Uh in 2015, the city of Oakland had the worst streets in the nine county Bay Area.

In 2016, their voters approved a $600 million bond with nearly half of that money going specifically to paving streets.

They created a new department, reoriented their transportation and public works to create the Oakland Department of Transportation, created an entire division with a transportation planner at the front of it with the explicit purpose of paving as many streets as she could figure out how to pave to be able to do that.

That's the kind of capital investment that was required for them.

That program has proven so popular that they're putting it back on the ballot this year to reauthorize that.

Um Penaluma is the worst in Sonoma County, they are one of the worst in the Bay Area now.

In 2020, they put a one-cent sales tax on the ballot to create a dedicated funding source for paving streets.

That's the kind of capital influx that's necessary to make improvements, and they are making huge improvements.

Those are just now hitting the road, but their construction dollars are going way up as a result of that dedicated funding source.

The 42 million dollars that you see on there is essentially two coffee park fountain grove projects.

I mean, that that is, you know, that is two years of fully dedicating our capital improvement program just to paving residential streets.

So it's frankly beyond our means to be able to do that.

Um next slide, please.

Um we have we have made those decisions um, you know, to the frustration of many.

One of my I have continued to talk about the need to make changes with respect to our transportation safety statistics to invest in um you know the the broader maintenance of our infrastructure rather than building new stuff that we need to maintain.

Um, this budget reflects trying to balance those needs as much as we can, finishing the stuff that people have been counting on for a long time while not drastically changing the maintenance of our infrastructure.

Um as a result of that, we are not making those smaller scale improvements that I you know again have been harping on to the annoyance of many people.

This does close out all of those ongoing commitments.

So next year we will have a clean set of books to bring to you for a new set of projects.

I do also want to highlight just before I close out here that though while those improvements are being delayed a year, we have made a great deal of progress.

Um we have, in the last 10 years, averaged uh 40 fatal or serious injury crashes in the city.

In 2025, we had 15.

Do I think that we did enough to reduce fatal and serious injury crashes by 60% now?

Like there's some fluke and some randomness in that.

But we all of our actions are pointing in that direction.

We are making progress, and frankly, I want to thank the police department, the fire department for their support in these efforts.

None of these changes happen without them to Capital Projects team.

I've redesigned projects to their frustration to make them safer.

We've we've done so much work to focus on that that I feel I don't want to lose the momentum of what we're doing, but it's necessary to get done here.

And, you know, I look forward to bringing those types of investments back next year and even trying to orient these projects that we're working on towards towards those improvements.

And so, you know, we haven't done enough yet to feel like those are systemic and are gonna be continued, but if nothing else we can celebrate that at the beginning of last year, I would have told you that we would have had 40 fatal and serious injury crashes, and 25 people didn't experience that last year.

And the other people involved in those crashes and their friends and family, um, whether that was anything we did or just the randomness of 2025, those crashes didn't happen.

And um, you know, that's not something that I wanted to get swept under the rug.

That's something to celebrate.

So thank you and happy to answer any questions.

Great presentation, as always, Director Hennessy.

Uh, looking to my colleagues for questions.

Ms.

Flying.

Yeah, I have some questions.

Um, you know, just going directly to what you were just talking about, a 60% reduction.

Um, it's hard to imagine that it's entirely fluke.

And um I I know that when my kid crosses fourth street to get to school on a regular basis, that you know, my comfort level has changed drastically with that.

And I I see a lot more people on their on foot and on bikes.

And um, what I wanted to use is that take that as a segue to talk about um the load that we put on our roads and use this as an opportunity for you to talk about um the improvements.

You know, we do get complaints about improvements.

I see the letters to the editor um about the improvements, and I'm always happy to let people know that while it is frustrating to cross these these intersections that have gone or these thoroughfares that have gone from from two lanes in each direction to one lane with the median lane that um that I'm happy to to take the heat for it at the ballot box when when I see numbers like 25 fewer family individuals and families are impacted and here live with us and well, like if you want to throw me out of office for that, like let's let's go.

So um, so what I wanted to ask you is um what the relationship between making streets safer um and having lighter use on them is and our long-term pavement um maintenance plan and how those things intersect and give you an opportunity to speak to that.

Yeah, I appreciate the opportunity.

Um, you know, the the demands are are different.

We are shifting where vehicles are on the street, but in terms of the how the streets operate when we change the conditions, we're watching that very closely because what we don't want from these changes is people making different decisions, right?

We're we're changing college avenue from four lanes to three because we think we can serve everybody with three lanes, right?

That has been proven out, those volumes have not changed.

All that's changed is that the speeds have come down, is exactly what we wanted, right?

We want operating speed to come down, but we want everybody who's using college avenue to continue to use it.

Um that that leads into the maintenance aspect of it too, right?

The that additional space we're using for bike lanes and barriers because it's available.

I frankly don't care what it's used for, right?

It's not necessary for drivers, right?

The streets are safer with that space being blocked off with barricades and nobody ever using it again.

It also means that we will not have to maintain as much of this of the street.

This the segments in the middle might be used more heavily, but there's now half of the street on the outside that is not being used by private vehicles.

So, you know, those types of changes are will be reflected, you know, probably not in my tenure here, but when they come to the end of their life cycle, there's going to be a different set of decisions made for pavement maintenance on those streets because of the condition of the roads.

The outside segments are going to be in much better condition and are not going to need treatment, right?

We can focus on the parts that are actually serving load-bearing traffic.

Yeah, that's helpful and a little bit different than what I was trying to get at, which is my question is if we end up having more folks convert to uh pedestrian or bicycles as a result of safer thoroughfares, then we end up having fewer private vehicles potentially, and um then less not fewer people, but less weight on the streets.

Um obviously it's distributed differently.

It's probably pretty hard to measure for that, but is that something that we we hope is an outcome of of this?

Yes.

Um, well, it would be a you know, there's a long list of positive benefits of changing streets to their safest orientation and making them more multimodal in nature and just giving people choices to do it.

Um I would say that that you're right directionally, this is an added benefit on the scale of the quality of streets.

I don't know that it's huge, but it's it's in the right direction, and as any of those like incremental changes as we can make in the correct direction, it's important to know that we're not swimming against ourselves to you know respond to our resources.

And who picks the color of these bollards?

Uh the National Committee on Uniform Traffic Control Devices.

Fantastic.

Not us, because they are really not very attractive, but uh they are noticeable, which I suppose is the point.

Um, I was wondering if we could go back briefly to the park slide.

Um, would it be possible to pull up the slide that shows the quadrants?

This is a topic of perennial interest in particular with the DAO and the chamber, and always something that we're trying to get to the bottom of, which is how we allocate funds between the quadrants.

Um, and I see that um downtown is part of well, my district, um, all of the downtown zone is part of zone three.

Um, and so what I heard you say today is that fun there's no statute that requires the funding be spent only in the quadrant that it's located in.

It's just that it's a council priority that overall we we distribute park funding evenly across the city.

Is that what the ordinance that established the PDI says that money is to be allocated to the zones, but up to 50% of it can be distributed across boundaries for projects.

I think the term is projects of community significance.

There's no definition of that.

Okay, I suppose that we define that here.

Yeah, right.

Okay.

Um, well, so where I'm getting at with this is um in Willie Brown's seminal 2008 book, um, autobiography.

I don't know how much of it's auto in terms of he wrote it himself, but in his um biography, he writes about how San Francisco, under his leadership, began um funding projects based on um deliverability rather than based on like district-based um uh allocations.

And I'm just wondering if there's anything that you need from the city council besides our support to just build things as they're ready and make it right over time in order to get things moving.

So aside from the I don't think so.

Frankly, every discussion we've had, we've either been on the same page or you've provided very clear direction about and the direction has always been just please get things done, right?

We've been telling people that things would be ready for a long time, finish them.

We're at that stage through this fiscal year and next fiscal year that for transportation public works and parks, we're gonna clean the books off.

So if there's a discussion to be had about reorienting how you how we should be prioritizing projects, the next six or twelve months is an opportune time to rethink that, but there's nothing prohibiting us from delivering other than overcommitting and splitting ourselves too thin.

Okay.

Well, to to that end, and I'll just say that um it's not one of my priorities that we have all these bank accounts across the city for for our hopes and dreams.

I'd love to to uh make sure that we give you whatever you need to to make the projects that are ready to go, ready to go.

Thank you.

Let's go to Miss Ben Willis next.

Thank you, Mayor.

Thank you for the presentation.

And you always I think when you spoke earlier about transportation, it was like, oh my gosh, we have to think about, you know, where we're going with transportation.

And now I look at this and it's like a whole nother can of worms.

But I thank you for it because I think there are conversations that we need to have.

Um and I the some of the things uh that uh council member Fleming brought up.

I I, you know, I especially about where you want to um focus on some of the projects that are not quite ready and all of that that you talked about earlier.

Um I agree, you know, which is move forward.

But um the only thing I wanted to ask you about was uh you made some suggestions about possibly um maybe a bond measure or I have to say, you know, which I um and I just wondered more uh if you would talk a little bit more about that because I think that would go toward the priority of pavements, paving.

And I know I I think as council members, we too get lots of emails about we love college, uh, and which I love, I think it's great.

Um, and then the folks that complain.

So um, and I'm you know, try to address both.

Um, but I am uh interested, especially when you talked about some of the um roads that are not being paid attention to because perhaps um you know they're less volume and all of that.

And I just uh wondered um what what is your vision or thought um a little bit more about that?

Yeah, I'm gonna address that last part of that question first.

And the roads, I think, you know, they're not just how people get to and from stuff, right?

They're a reflection of your community's investment in itself.

Um they're very frequently uh uh kind of a qualitative metric of quality of life.

Um and it's it's just like a signal to the community about investment in itself and and how they're taken care of.

So, you know, the there is a lot to do, and I don't mean to suggest that residential streets aren't you know worthy of repaving, it's just given resource allocation, we have to make hard decisions, and I know what the wrong answer is, and that's letting the streets carrying 15, 20, 25,000 people a day um go to poor condition.

The um, you know, what you said about the decisions we make with the transportation system, you know, that that's kind of left to every individual jurisdiction to prioritize.

I've heard loud and clear from from you guys from this city manager from the previous city manager from the community that pavement maintenance is important.

My real passion is transportation safety.

I you know, you're stuck with me on that uh to um Councilmember Fleming's point.

Like, if you don't want to do that anymore, that's okay, but you probably should find somebody else.

Um so, like, you know, we're we're balancing all of that to try to make the investments where appropriate and and make the biggest impact.

And and we're doing that in a way that that we know is right.

And just as a point to highlight um later this summer, the insurance institute for highway safety is gonna come out with a series of case studies about how to orient transportation and public works departments around, you know, making safety improvements but strategically within public works aspects, maintenance aspects, and capital projects, they're highlighting a number of very big cities: Seattle, Austin, Philadelphia, New York, Cleveland, and Santa Rosa.

Um, like we're we're looked at now like we know what we're doing.

Um, we're promoting that, and other communities are asking us, how did you do this?

What are what is it that you did?

And frankly, it a lot of that is pointing back at the seven of you and saying this is what we want to do, and we have support to do it.

Um, and so I'm just really really grateful to have you know this this partnership in this project.

I'd like to add uh thank you for your question, Councilmember Ben Willows and and from from our perspective, we're committed to bringing solutions forward.

This is the Dan's conversation today around pavement maintenance is one of the solutions that's gonna be or parts of this conversation that's gonna be in rural and primary to solutions moving forward.

Dan is very well describes our our challenges around funding and looking at ways to be creative.

I'll say that as we move forward and even in our year two conversation that's gonna happen in a few moments this is something we can't lose in that conversation we know even just from early on some of the feedback we're getting from the community this is one of their highest priorities and therefore it needs to be one of our highest priorities I since I'm speaking on this I will take advantage of it.

I want to address Victoria our councilmember Fleming's question as well in that I have found within my career that finance and the greater goods conversation align very very well this is a great example in street safety in that when we've made the decision to make streets safer that has also come with a financial reality we could never afford the giant lanes and giant streets the way they were financially we needed to reduce those so to be able to reduce them and make them safer this is where your budget and your priorities and your um your your vision of of a safe city they all align and that's I think the very first conversation that Dan and I ever had and it was like oh we're gonna get along great because you're exactly right we're addressing these street issues from a broader perspective that has a dollars incense tied to it which is a reality.

I just want to say that you know I think you know that we want things to be safer we're I think I think I I can't speak for the council but I kind of can say I think we're on board with safety and you're in the right place.

And you know most of the time the feedback that I get particularly about you is always very positive.

Everyone is so impressed with what you've done.

So um so yeah you're you're in the right place we're I think we're in the we are looking at this in the same way um it's just a question of how we pay for everything right so thank you so much.

Thank you Ms.

Benwellos Ms.

Rogers.

Thank you, Mayor.

So I did want to take this opportunity before I ask my questions on since we're talking about PCI to give a shout out to the materials lab because they are working very hard to ensure that our streets are uh can stay in good condition um for a longer amount of time so thank you very much to them I I wanted to go um to this slide one thirty and say that I'm all about getting projects over the finish line we've had these conversations um but I do like the idea of uh tracking it and the reason why I think that that is important is because um those funds come from development within that particular quadrant um and we know historically that they have not always been uh spread out over the city so it sounds great and I am all for Santa Rosa I'm a council member for Santa Rosa but right now I'm gonna be a council member for district seven and say that we have a lot of development going on um in that part of the city and I want to ensure that the my constituents who live within my district are able to see the benefits from that not just the traffic and the congestion but that we actually have parks that we can walk to and that they're maintained and that they're doing well and we're keeping up with them.

So I am all for um for tracking um and I think I think I like that we look like we know what we're doing.

So thank you.

And just to address that comment on the tracking, Council member, I agree with you.

And in part, this is this should be a very, you know, we could track over a number of years, but based on the timing of where we're at, this actually makes sense in that we're advancing one year and we would be paying it back next year.

So we should have a similar conversation next May, and I tell you that everything's been paid back, all projects are moving forward, and we start again.

So this is not something that's gonna linger five, 10 years.

This is today and next May and done.

Are we looking at um having any additional community parks in um Southwest zone two?

Because I know that we have talked about it.

Um, yeah, so the the lower Cullen Creek, that very bottom star um will be complementary to the recent uh trail and um creek improvement project there.

There are also a number of developments happening there that are actually including park or park space within um there.

So there's another uh small park happening just to the west of there off of Dutton Meadow near LC Allen High School.

Um, and then and then other than that, the park space will come in as parkland is actually dedicated through development agreements, but the uh investments there are actually disproportionately high in terms of the rest of the city because there are clearly identified needs in those areas.

So it might be reinvestment in existing park spaces to make them better rather than new park spaces.

Um that's just a question of land acquisition and management and and getting back to the discussion that we had or that Scott presented yesterday.

I don't have enough people to take care of more parks.

I gotta make the existing parks that we have better, um, because otherwise we're just setting ourselves up for maintenance failures.

Thank you.

Thank you, Ms.

McDonald.

Thank you so much for the presentation.

So I have a couple of questions.

Um, and just wanted to say thanks for being a change maker and challenging the status quo on how we do CIP, and that you're willing to be brave and get projects across the line versus these earmarks that have gone on for years where we have 55 million dollars or you know, 30 years of projects that won't be able to be accomplished because of the high cost of construction in the out years.

So I appreciate you getting shovels in the ground and the crosswalk between what we're going to save on our budget in the long term when we go to the safer streets, and and I love that um that you've been able to tie that together for council today because sometimes we get complaints that they don't like that now there's just one lane, but um to be able to say that we've um not only reduced injuries but also the cost of replacing those streets in the long term, I think is uh really good thing for us to be able to have as a talking pot, uh a talking point today.

So um I'm all for getting the projects across the street is across the road, uh so to speak.

Um, but I I definitely um appreciate that you brought it forward to us.

I agree with um council member Rogers that sometimes it's been dis and not sometimes that it really was disproportionate of how we saw equity and distributions of what needed to be done across the city.

So wherever money needs to be shifted to get those projects done, I I am all for.

Um I do have a question.

I know we recently put in place the EIFD, and I just have a question around how that's funded, and does that go to any portion of maintaining um our downtown corridor or how they can use that specific money in the future as that starts to build up.

It's a great question.

As a matter of fact, we've been working on the EIFD this last week with the county.

The big picture with the EIFD is that the EIFD will not address existing infrastructure needs within the city.

There is the way I put it is it's not to supplant um existing levels of infrastructure.

Now, what is gonna move forward eventually to the public financing authority, and this is there's gonna be a uh an intersection between council and that body to talk about the projects that ultimately end up moving forward.

But um I think the way I would put it is that it's not there to just repave our streets, it's to create in an enhanced level of infrastructure.

Does that make sense?

And so it's the EIFD is not something that would just fix the things that we have, it's it's there to be additive and not to supplant general fund functions.

So I'm I'm looking forward to seeing how that develops really over time.

The two things I always bring up with the EIFD is that it is funded with tax increment, so it comes off of our property taxes.

So we'll receive a little less property tax to our general fund over the next period of when we can actually issue bonds or make payments.

And I'm not really anticipating uh funding or movement on the EIFD or our project for at least five years, given the consultants' projections.

That's very helpful.

Um I just have a quick question about the developer fees.

Um, is there any restrictions on what I see as doing is putting in new um infrastructure?

Is there any restrictions on how we use developer fees to do infrastructure in the city?

They are restricted in terms of the with respect to the study that adopted the fees, they are split into different categories.

So there are some subset of fees that are dedicated to road infrastructure.

There's another subset that's for transit.

There's another subset that is for pedestrian and bicycle.

Um that is just part of the adopted uh nature, but within those categories, there's not really much restriction in terms of how we use those.

Similarly, they are supposed to be used for new or enhancement, not replacing um you know, the existing condition or supplementing uh ongoing maintenance funds and things like that.

But um, you know, basically every time we do some type of roadway maintenance project, we're also making complementary improvements with that.

So, you know, we can work within the definitions allowed by the law and essentially do pretty much anything that we would want to do with those funds.

Great, thank you.

Um I wanna go back to the pavement project that you're doing in Oakmont, and you know, on behalf of the constituents that I represent out there, thank you for doing that.

I know it's been a much needed project.

How much of the ADA funds that we have?

I think it's 1.2 million dollars we have allocated.

Do you use the portion of that to address the ADA needs at that time as well, or how does that normally work?

Yeah, the annual ADA funding has been a bit of a uh black box for the last couple years and trying to understand exactly who's organizing that spending and what it's being spent on.

Um now I can give you an answer.

It's me.

I'm uh that that funding sources uh being allocated and distributed to support city facility improvements, but also projects and the ADA portions of projects.

So the portion of the funding this year is gonna go to Oakmont, a portion of it is gonna go to support the um Jennings Crossing, a portion of the existing funding went to build the sidewalks and curb ramps on Pearson Street.

Um we're looking to not try to segment that fund so much, but use it as a complement to expand our funding sources and just get more done.

Um, so yeah, a significant chunk of that 1.2 million this year will be dedicated to curb ramps um and ADA improvements in Oakmont and a significant portion of the previously allocated funds, the 1.2 that had built up over a couple years, is being used to complement uh Oakmont also.

I'll provide a little context uh in that the ADA funding is a great example of how the changes of the city structurally or with staffing have also changed where you know specific funds have been directed, and and that's something that the finance department has worked with with public works, you know.

Again, history is important, and I won't go through the tedious history of how these funds have been allocated over the past few decades, but where we are at now is activating them within specific projects to meet specific ADA requirements of those projects.

It's a nice shift of of funding that has moved away from an ongoing specific team and how they used it more towards hey, let's let's focus them on specific projects and specific ADA needs.

Thank you.

And what I heard from Ms.

Wood yesterday was we had about 1,800 replies to um our poll online, and what's tracking sounds to me like streets, roads, potholes, those types of things.

Um we didn't get any context of what we've been seeing for this meeting, which may have been helpful, I don't know, but it would probably be great to have at least by June as we finalize the budget.

But CFO Wagner, you talked a little bit about a bond for infrastructure, and I know our bond debt is actually fairly low right now, I think as a city.

So what would be the benefit to going out for a bond for specifically roads or infrastructure?

What's the rate on something like that as we look at that?

And how much would that actually result in saving taxpayers if we were able to go out for something like that, address those poor roads at 42 million dollars, and then see, is there any desire to look at that type of model?

There is a desire, and issuing debt in in a local agency comes with a lot of restrictions, and and really when we get to that point of understanding what's possible from for us from additional revenue perspective, working with our financial advisor, but the core of your question is spot on, meaning that we one of the benefits of issuing debt is that it dedicates a portion of your budget towards that function, right?

It's that concept that we talked about with pension funding of you need to establish budget by selling debt or by selling debt, you establish budget towards a specific infra infrastructure needs of the city.

The additional benefit that you mentioned is cash funding is expensive because you build it over time, and over time a dollar is worth less and less and less.

And what makes that more powerful is not just the uh time cost of of money, but it is the fact that we know that construction cost goes up faster than inflation, especially within Northern California year after year.

So we lose dollars on the back end through that structure.

What I'm what I'm saying is that we would be uh very aggressive in trying to understand those aspects and understand its return for the community.

We feel that there would be a very strong one, but that takes a commitment um outside of just what we can commit currently within our in our budget, comes back to that return on investment.

We want to ensure that any proposals that we bring forward have that meaningful return to the community that they're gonna be able to see within the infrastructure of our city.

So if we were able to issue bond debt to be able to do some of these streets, can some of the money that's comes into CIP help pay back that bond debt so that we're able to capitalize on the current taxes that are in place?

Most of the time the answer is no because the city is not the bonding authority of those special taxes, meaning that we do not have the bonding authority to go out and bond against something like gas tax.

We can't do that.

Um I think I missed a part of your question that's very important in that uh both Director Hennessy and myself have been looking at well, what's the bang for buck?

And and he actually had it on the slide, and I'll I'll re-ring it up.

But really, those neighborhood streets that are at a poor failing level.

If we could make the proper investment in those, we see our overall citywide PCI go from in the low 60s or 62 to 70, right?

And then that gives uh Director Hennessy the ability and his team the ability to start maintaining those streets versus reconstruction.

Reconstruction is wildly expensive of our streets.

And this team, this public works team has done a great job in their philosophy of maintaining well-maintained streets because that's where the return on the investment is.

We need to come up with a strategy that we can be diligent around our failing and poor conditioned residential streets.

I just think as we look at um, which I appreciate that there's a two-year budget process happening right now and that we're looking in the out years, but I think that that's potentially a conversation.

I know it's deep, I know that talking about bond debt and how that all works and what we can pay back and how we can strategize on that is is a bigger conversation than what we're gonna have today.

But I'd be interested in that specific specifically after we see the numbers that would be involved in our current poor streets and and how much that's going to cost us because we simply just don't have the money currently to invest in that.

So if that can come back at another time, if that's appropriate, I think that that would at least be something I'm interested in.

But by the sound of what's happening in council today, I think everybody's interested in seeing what we can do to save and strategize in the out years, make our current streets safer and better for our community.

And it sounds like it's polling quite high on our um on our responses on the survey.

So thank you so much.

Councilmember McDonnell, I also wanted to um if you could put back up slide 138.

Just to focus on the stark discrepancy and the massive increase in costs as the streets fall into disrepair.

When we're talking $7, is this per square square yard?

From good to fair, it's seven times higher at $52 per square yard.

And at poor, at this point, we're 300 times as expensive.

So we will be coming back with further recommendations on how to address this.

Yesterday you mentioned the uh pensions moving the drop off in 2041, and some recommendations.

I'm really excited about that.

And I think we can try to push to come up with a framework, at least a starting point.

We can't wait till 2041, but at least we can start thinking about ways to reinvest, and we'll have some recommendations on how to reinvest even sooner.

If there were a bond measure or other type of measure that could come to the voters, but for certain, we do have uh pavement condition index situation that needs to be addressed.

Just as Dan mentioned for transportation purposes, because every time that we fix a street, we can do transportation improvements, create complete streets, and then also show that we we're reinvesting in ourselves and maximizing the use of our dollars in that entire 75 million or so CIP, only 1.9 million is from the general fund, and all of the restricted funds for streets are mostly for our serials.

So there really is little opportunity currently in the budget to invest in our residential streets.

So we'll be making more recommendations as we bring the budget forward.

Thank you, City Manager Farrell.

Thank you, Ms.

McDonald.

Uh let's go to Hawaii with Vice Mayor Krupke.

Uh thank you, Mr.

Mayor.

Um, just a couple quick questions.

Uh as one of the larger funding sources, um, do we have any historical context on the level uh of where gas taxes have been versus where they are today?

Yeah, we are uh stable-ish, I would say.

Um we are tracking close to where we were 2022, 2023, um, coming back up from down dips the last couple years.

Uh projections for next year are very questionable given that.

So the gas tax, this is a reminder is a flat tax on top of a gallon of gas as people drive less or pay for less gasoline.

Um that's less gas tax available to the state that then gets distributed.

So with six and seven and eight dollar gallons of gas, and people making different choices about how they move around or choosing not to move around, um, that is very uncertain right now.

Uh everyone's aware of that.

The gas tax is a much bigger problem than any of us can solve, both at a state and federal level.

And frankly, we're doing far better at a state level than the nation is as a whole, um, with a gas tax that hasn't changed in 35 years.

So if you were to look forward and uh how could the changes, I mean, whether it be remote work or uh alternative fuels or, you know, uh multimodal transportation, how could this impact um going forward?

Yeah, the state actually has started a program to reevaluate the gas tax and move it to something more akin to a usage tax based on how many miles are driven in a vehicle a year.

Um, I think one of the the driving mechanisms for that is the conversion to electric vehicles, which solve so many problems, but create new ones that we're not addressing, right?

We, those vehicles uh, in addition to not using gas, are very frequently 20 to 30% heavier than their internal combustion engine equivalents, and they accelerate faster and they tear up the roads much faster while not contributing in the same way to maintenance.

That is a huge uphill battle with who knows how many different adequacy advocacy groups that are in Sacramento talking to all the legislators about what's good and what's not.

And you know, that change at that level is very difficult, but um, and especially with state mandates to move away from um internal combustion engine vehicles.

There's gonna be a real problem on our hands in the next five to ten years as gas taxes continue to dip and we don't have an alternative funding source for transportation.

And then, as you said, presumably the conditions of the roads will get worse while we're losing funding.

Yes, almost certainly true.

Okay, thank you.

And then um, I know we're just looking forward to this next fiscal year's budget, but um part of the work that we'll be done will be planning for the future.

So I'm gonna take this opportunity to do that when it comes to parks.

What is parks planning?

I don't mean like the actual technical aspects of planning, but like the the strategy behind what we do and where we do it.

What are um what are we looking at in terms of the next one to three years and then beyond that from three to five and going forward to serve our community?

Yeah, we have uh just completed a parks condition assessment with a review of all 50 or so parks, uh, the couple dozen open spaces and other park uh responsible um spaces that we that we maintain.

We are gonna bring that to this council for review and adoption, uh, just to make sure that we're all on the same page, and part of that will be to get your feedback on the focus on community parks versus neighborhood parks, the investments for different user groups, whether that's children, um senior citizens, um, you know, we hear from everybody that their needs are are great.

We we don't dispute that.

Um, but again, we we will need to make choices, and frankly, we're gonna need your help to do that.

With this study, we have 500 pages of data that tell us the condition of the playgrounds and the fields and everything, um, and especially there are some really good graphics and tables helping to show us how those are geographically distributed across the city that'll help us make those decisions.

So um, you know, we will probably bring a recommendation to you, but that will be a discussion for feedback and um making sure, you know, all the projects that you saw on the list this year are things you've already approved funding for.

So we had made the general assumption that you'd like to see those finished next year will be a handful of new projects on the list, and we don't want to catch anybody off guard with that.

So we'll be making sure that we get your feedback ahead of next year's budget cycle.

Okay, is part of that study um like a needs assessment of where we have gaps for certain kinds of activities or or uh needs for those community groups, or is it just a general overall view and we'll have to determine um what we want to plan for in the future?

So every park, every existing park has a two-page summary of what's good, what's bad, what's needed, um, those combine to create some additional summaries around not just the individual park itself, but the people that they serve, the communities they serve, and you know, there might be a park in desperate need of improvements, but there's also four good ones around it that might not be as high a priority as a park that maybe isn't a little bit better shape but serves a wider number of people, or there aren't as many nearby alternatives for folks.

So we're not this is not gonna be a worst of the worst type scenario, but in terms of how do we help as many people as we can and making sure that we understand based on you all who know your constituencies better than we do, responding to their needs and making sure that we're we're putting those investments in the right place.

Great, thank you.

Thank you, Vice Mayor.

Um, my thoughts have mostly been covered by by my colleagues.

Uh one one small question.

I noticed that so the measure DD went up to about 2.9 million this year.

Do I do I recall that was closer to two million in past years?

Yeah, so uh we had both a closeout of measure M this fiscal year uh and a beginning of measure D D.

So those revenues that we get are partially collected and partially estimated and those get updated throughout the year.

But we do expect measure D D to be higher because a portion of the previous measure M went to funding highway 101 improvements that is not happening anymore.

So more of that money is coming back to the city that even though the sales tax itself didn't change more of it is ours to spend though that's great we'll take it.

And then a related question so we're we're we're going to put about 12 point eight million dollars toward pavement maintenance I suppose I should know this figure off the top of my head but what was it where were we last year?

What's been the trend line for our pavement maintenance budget?

The last three years we have been over 10 million dollars.

Previous to that it had been up and down ranging from as much as 10 million dollars to as little as two or three just depending on the projects I mean you you had a number of other high profile projects on Stony Point Road and Fulham Road and um you know minor smaller contributions to longer term projects including the interchange the bike pet overcrossing that was funding specific activities or starting to generate matching funds for all the different grants we had for those programs so there was a lot of up and down over the previous 10 years depending on the needs of any specific year now that we've flush most of those major capital investments off I think there's no there's nothing stopping us from being much more consistent with that investment going forward.

That's great.

So you think that we'll stay in that 8 to 12 million.

With a 20 million dollar overall capital improvement budget and the extra is going back to that pavement mean.

So the commitment is that every year you will see a number that is at least 11 million dollars.

Wonderful especially over the next couple of years when we're asking we're asking for our communities trust and patience as we as we reorganize within the city to have that to have the significant construction projects out there whether it's the roads whether it's the new bridges whether it's the fire stations um you had the phrase or use the phrase Dan investing in ourselves and that really is the case and that's really I mean that that that this is meaningful for the community for all of us who live here.

So thank you so much for um for changing the way that we're we're bidding we're improving the way that we're getting these projects out the door um the it it has been noticed and it's gonna it's gonna be noticed even more in the in the in the next years um and on that subject with respect to parks uh by all means let's get projects out the door especially with those specific projects I mean mlk is such a such a visible project anything we can do to get that project started along with along with Kawana Springs uh and we can come back here next next spring and evaluate um how we're you know how we're handling that quadrant quadrant system uh as we've discussed on the at this day as before there are uh the intention behind the quadrant system is is admirable but even if you just look at the downtown area where two of my colleagues are focused the fact that we're not calling out the downtown as being a specific area of investment there are ways that we could that are that council could probably look at that quadrant system again to uh to make sure it's still it's still serving us um and with that I think I've I think that's uh I think that's it for me other than final compliments thank you with respect to the um the fatal fatality number uh I had not heard that statistic and and to uh let's hope that's a continuing trend but even just even some movement in that direction is wonderful so thank you for for highlighting that today uh again thanks to both of you looking at looking at the fact we've been at it for a couple hours now why don't we take and I mean it now 15 minutes 15 minutes we're starting back up here at uh what would that be eleven eleven twenty five uh let's recess until then we have a lot of things All right.

Welcome back, everyone.

The time is uh unfortunately the time is eleven twenty-seven, so we weren't we weren't we didn't quite make it.

Um but if you want to call the roll, we'll get we'll get started again.

Thank you, Mayor.

Councilmember Rogers, Councilmember McDonald?

Yeah, Councilmember Fleming, Councilmember Ben Wellows here.

Councilmember Alvarez, Vice Mayor Krepke.

Aloha.

Mayor Stapp.

Here.

Let the record show that all council members are present with the exception of Councilmember Alvarez.

Thank you very much.

All right, Mr.

Wagner, back to you.

Thank you, Mayor.

So we would like to conclude uh the budget study sessions today, and what we've discussed over the past couple days with a brief conclusion, and and I would start that with this, and that each year really, and from a finance perspective, we're working on three different years.

We're working on the current year we're in, we're working on the future budget, and then we're really always have our eye on that next coming year.

As discussed yesterday, the city's been focused on a multi-pronged approach for the current year to address our deficit.

We feel very proud, and we've been successful at moving solutions forward that mitigated impact to our employees, mitigated impact our community through the services we provided, or the through the services we provide.

All of the solutions that are before you here on this slide, we've discussed at length yesterday, but but it is it is a matter of what I would say is is improvements and creativity and innovation that that again we is going to make a real big difference in our current year.

While that success is very good, what we don't want to have happen is that to cloud the fact that we are still in a structural deficit within the city, and now we are going to be looking at the fourth year of this process.

That is a very long period for us to be experiencing the financial trouble that we've been experiencing.

One of the slides that I'll remark on from yesterday is a recognition that the general fund staffing level is at the bottom of the Great Recession level.

While that's true on a staffing level from someone who experienced the city coming out of the Great Recession in 2012 as staff, I will say that our impacts to service have not been felt at the same level of the Great Recession.

That runway that's been created over the past few years has been focused on maintaining those services and impacts to the community, and we've been successful doing so.

But that runway ultimately is is running out.

We're gonna need to improve ultimately the revenue mix of the city to be able to maintain the services that the community uh deserves and has received over time.

One thing I would like to point out is is that our current measure Q sales tax, which is a half cent, sunsets in 2030 31, and then we'll create an additional 25 million dollars worth of ongoing revenue that is discontinued.

Our current pathway within the city is unsustainable.

I will add as part of our conversations from yesterday that um again coming back to when I first started at the city coming out of the Great Recession and uh the level of impact to the community at that point was still great.

The lights were off in the city of Santa Rosa.

Our street lights were off.

Our parks were not getting watered to the level that they should have been watered.

We had impacts during the Great Recession, including brownouts to our fire stations, and including greater reductions to sworn staff than we've seen at the current moment.

These are the realities of our of our situation currently, and so what we've directed our departments to do is to understand what the fix towards this issue would be on a year two correction.

We've talked about this in our analysis yesterday on how 77% of our costs are tied with salaries and benefit, and therefore we would expect to see a much greater level of reduction to our staffing levels to be able to make up our deficit.

Overall, if we needed to make up a $13.8 million deficit, we would anticipate losing close to 60 employees amongst the departments listed above.

Again, to give a stark reality, though, against how this is applied is that this is applied on an across the board basis.

Our cuts have been focused against areas that were not public safety or impacting the community up until this point on an FTE basis.

They have been borne mostly by administration and other administrative functions throughout our departments.

Frankly, I'll use myself finance as an example.

I don't know how I would cut five employees at this point.

My core functions are managing on staffing levels.

That some of them are half of what they were even when I started at the city 10 years ago.

There's a reality towards what else is there to cut.

And frankly, the cuts would probably now shift more towards operating than the non-operating parts of the city to balance things out.

What we did is we asked our departments to come up with those cuts though and help us understand at that level what would be the impact to service and how can we understand what would likely move forward as part of a year two implementation to solve the city's budget deficit.

The public safety impacts would be great.

This would include likely blackout of a 4-0 truck company.

I like to define both of those terms.

A blackout is a way of saying closing.

So we would need to close out one our one of our truck companies.

Again, to define that term, there's different services that happen through our fire service.

We have engines, which are the ones that most folks see out on the street the most, and then we have trucks.

The trucks are the ones with the really big ladders on them.

This would be losing half of our truck resource within the city of Santa Rosa.

Again, as Chief Westrup talked about, our staffing levels for fire ultimately within general fund have remained constant over almost a 40-year period.

We've also noticed as you drive around town that our development has gotten larger.

Losing a truck company would dramatically impact public service or public safety in that way.

Additionally, Chief Creegan talked about how he's required to use or he staffs his beat units versus his specialty units, and how impacts to staffing ultimately was gonna trickle down into the special specialized units that he has within the city.

We would anticipate the police department to need to move forward with either consolidation or elimination of these special units.

This would impact our gangs team, our narcotics team, our traffic team, our downtown enforcement team, and set teams.

This would be a deep challenge for us and our ability to continue to address violent crime and continue to address 911 response times within our community.

On the recreation side, we've looked at uh how to impact youth services last.

This would really come with a very hard reality around the adult recreation services provided by the city.

We would first be looking at things like the adult softball league along with other adult uh recreation programs.

Director Hennessy talked about the challenges within our public works department, but also where this would come down to is a significant reduction in proactive and responsive maintenance throughout the city.

Our public works teams and our street teams have never recovered anywhere close to what their responsiveness was and staffing levels prior to the Great Recession.

This would really indicate a failing of this area to be able to proactively address maintenance issues throughout the city.

It would very much detrimentally impact street and road repair.

Our park maintenance would take a significant reduction.

We are already deeply challenged in this area.

You've often heard before is that quadrants typically will only have maybe one person working within a day currently to serve many, many parks in our robust park uh program.

Additional slowings would not just be for operations, but they would impact our planning and economic development.

A slowed and delayed permit process to get permits through our city hall, the elimination of community promotion programs that are very popular.

And also, when we look at other areas, a reduction of cyber security may be necessary given the structure of our budget.

You will hear me say as the CFO of the city, um, those are good investments.

Those are have investing in things like cybersecurity, the proper community promotions, and planning and permits that can ultimately flow through our city efficiently.

Those are areas where we need to spend money to have the proper return on the back end, the and the proper risk mitigation on the back end as well.

This is the challenge that the city will see going forward in that we're not able to make the strategic investments to enhance the city on a revenue basis, to enhance the city on a performance basis, and we will be assuming greater levels of risk that we should not.

With that, I will end by by saying that currently we are as staff moving everything forward to understand the needs of the community the best we can as these difficult conversations go forward.

There's currently a survey survey on SRCity.org.

It's our let's talk campaign.

I would encourage members of the community to help us better understand the services that are critical to them.

We have overall heard the message though from council as well as the community as we've fielded public comments that 911 response time, responding to violent crime within our community, and the streets conversation that Director Hennessy brought forward are top of the list.

I will add that as we move forward, it's important to us as a city that as we rebuild the organization, that we do so in an efficient and better way.

We want to be the best city moving forward that we can, and that really comes along with addressing those areas of the community's needs that they've expressed the most.

But the our reality again to end is is we have a stark and sobering situation here financially at the city.

Over the past three years, this council has made every action possible to mitigate impacts to the community, and that is commendable and should be supported.

I don't want that to shade the reality of our situation and that what's moving forward is going to be the hardest choices possible.

Um we have a duty to and a commitment to be transparent about this moving forward, and this conversation around year two and explaining what these impacts are going to be is one of the first steps towards that process.

There needs to be a realization that going forward we are impacting operating, we've made the cuts administration administratively that we had to, we've made the efficiencies that we've had to.

We've consolidated multiple departments at the city into more functioning and efficient ways.

We've looked at ways of restructuring our major financial issues, whether that's pension or vehicle funding.

We've made the efforts at the city that the community and we all should expect, and unfortunately, this is where we've landed.

We've landed at the end of this runway now, where we need to take more proactive approaches towards fixing our structural deficit moving forward.

With that, I want to thank council for the past two days of reviewing budget with us.

I'd like to thank our departments.

And with that, I would welcome any questions or comments or guidance for council as we return on January 16th for adoption based on the uh uh discussions over the past couple days.

Thank you, Mr.

Wagner.

Well, we're not ending on a high note, but we're ending on a very important note.

Um, thank you again for thank you for two days of of discussion for all the work that went into these presentations.

Uh let's talk about our year about year two.

Looking to council for thoughts or questions right now.

Ms.

McDonald.

Thank you, Mayor.

Yeah, thanks for the doom and gloom.

I was feeling really good about the work we've done in the last two days, but I think one, I want to say thank you for being transparent about the need for enhancement to our budget, and that we can't just do this by cuts that no amount of forecasting that you can do, whether we're redoing cowpers or redoing our streets, that that's not going to be immediate enough to be able to address the deficit we see.

And I think also showing that where the cuts could potentially be and how that would directly impact the community on our service, our core services is a critical thing to do as we go in into conversations in the very near future about potential enhancements.

I do want to uh make sure that we are bringing that to the table soon, that we talk about some of the strategies or thoughts, and I know it's been floated in the press democrat when we look at sales tax when we look at the need for those types of things, but I think it's also really important to show why that would be needed and what we're already cut down to as far as our staffing levels and what we're delivering for services right now, and when we hear the stark numbers of not incrediblings increasing staffs from the 80s or the 90s, that's that's really important for us to talk about.

So I I'm glad that we're looking at it as a two-year system.

Sometimes we I feel like we get through this budget, and it's almost like we got through that one, but I think it's important to keep our eye on the um on the ball when it comes to that.

So yeah, I I just want to say I look forward to those conversations.

I know they're not fun conversations for us to have.

I know that there's uh concerns from the community, but um, yeah, the thought of blacking out a fire station or browning out fire stations when we look at the uh, you know, the emergencies we've had specifically in Sonoma County are just not something that I think anyone could tolerate, whether it's up here on the dais or or in our community.

So I appreciate you being so stark about what we have impending in our future.

And again, thank you to you and uh City Manager Farrell and the whole staff for all they've done thus far to get us through.

Thank you.

Other thoughts or questions?

Uh Ms.

Rogers.

Um, so thoughts I just want to thank uh city manager, uh, the departments, exec staff.

I think transparency uh at this point continues to be key for not only council, um, but for also the community, so that we can make informed decisions.

And um, I've said it before, but the trust that I have in our exec staff um means a lot to me because I feel like you guys are looking at all the different avenues of ways that we can go about this, and you give us the information and say this is what it is, and we're able to make those those decisions.

But most of my I won't even call them concern.

Some of the things that were going through my mind as you were giving the presentation have already been answered, and I think I hopefully gave direction um with those questions about what my priorities are and the things that I'm looking at as we move forward.

So, but a sincere thank you for all the time and your commitment and going through this process.

Thank you, Victoria.

Yes, thank you.

Um I wanted to just sum up by reflecting back to you something that you mentioned earlier today, which is about the confluence of the public good and good policy in terms of meeting our financial goals.

Uh, for a long time, Santa Rosa has been a city that has succumbed to poor planning in terms of sprawl and not uh had a good urban ethic around building up in our downtown in ways that reduce um demand for sewer line and ways that reduce demand for for roads that reduce demand for fire units and far from far-flung places that um I hope that our community really clearly hears that we are operating with a larger population and a staff the size that we did many many years ago, decades ago, and that um we can do all the best planning.

We can capitalize our downtown, we can capitalize our EIFD with housing that doesn't qualify for welfare exemptions wherever possible.

We can try to be smart financially, and I and I do believe we're really committed to that.

Um, but at some point I think the council needs to be bold and helping the public to really understand that that our infrastructure and our public safety are our core, our core needs in the city, and that we we have been we have shown a lack of leadership in the past by doing half measures when it comes to revenue measures, and that really what we have to do is we have to be bold and we have to be future oriented, both with our planning and with our revenue, and that we just simply we can't cut any more.

The city demands and deserves at least the services that we're getting now, if not more.

Frankly, we deserve more.

People come to our town and they see all that's going on and they know that we we do need to do more.

And I think that when the public asks where we could cut staff, I think that there's no way we can reduce services really easily.

And also, you know, we have over 700 families in the city that benefit from the stability that is the economic engine and the um the continuity that employment here at the city provides people.

So as we go forward, I'll be looking for um how we make cuts in a way that's as not as unpainful as possible.

That I don't think that that's possible.

I think that we can say all that, but that the public hopefully hears from me that we are now paying for the cost of the Great Recession.

That may seem really far in hindsight for folks, but these are the costs that we're bearing now when it comes to our pension liabilities and taking care of our retirees is a core core part of our commitment here to our employees and to the economic well-being of the city and the region.

And so as we move forward, I'll be looking for good urban planning, good policy, density in the downtown, smart locations around affordable housing, really good policy around density and FAR in the downtown, our EIFD bringing in good opportunities around economic development, and also making difficult calls around revenue measures going forward.

Thank you.

Thank you, Miss Ben Wales.

Thank you.

Thank you so much for everything, CFO Wagner, and you know all of the directors and every everyone that's in involved in this process really appreciate not just the transparency but the detail so that we can really uh really make informed decisions going forward.

Um I think one of the key things that you just said a little while ago for me was uh revenue enhancement that we need to look further at revenue enhancement, and I think that's why I was so um pleased with the solutions that I saw yesterday.

Um but I know that's only a drop in the bucket.

I under I understand that.

They're ideas though that people are thinking about, and that I think that's a good thing.

Um I agree um with my colleagues that um you know I I think we've really cut staff to the bone right now, um, and I feel like um going in that direction further is going to cause burnout and morale and all those things, and I don't want to see that happen.

I think um everyone deserves not to live in fear of losing their jobs on the one side, but also our the people of our city deserve the services that they've been asking for and that they pay taxes for and they pay into our current sales tax for.

So um I think I'm gonna look forward to the year two and also uh whatever proposals come forward, because I I agree with um Councilmember Fleming, especially that we need to do more and we need to be bold.

And I I think that's as we let the community know that we've done a lot, but we need to do more, and we need unfortunately for them to help us and to be a part of the solution.

So I I look forward to those conversations, and I know they're hard.

Um, they're gonna be hard for us as elected folks, but I I think in the long run, future councils and our children and grandchildren are gonna thank us for us in the long run.

We may not be here for it, but it will it will be better for the city of Santa Rosa.

So thank you for everything.

Thank you, Ms.

Benhuelos.

Um I'll add just a few thoughts before turning it over to our city manager for some concluding remarks.

I think the city has done three things really well over the past few years.

Scott, you laid them out in your in your remarks to open this section.

We've done it, we've done significant reorganization within the in the city.

We've made we've made painful cuts.

So we've brought our we've brought our own books into order as best we can, and that that has been recognized.

At the same time, there's been a significant internal education campaign.

So we talked about the fact that uh on our long-term finance committee, we've gone department by department over the course of the last year.

Here on here at council, we have had numerous detailed budget discussions, including operational discussions, so that everyone everyone is now well versed on where the city stands.

Then there have been significant discussions with all of the with all staff, all labor groups.

So everyone's everyone's looking at the same set of numbers right now and has a has a clear sense of what the strategy, what what our strategies are.

That those two are big steps.

The fact that we have taken the hard, we've made the difficult decisions internally and done the education for all staff and for council.

In addition, and this is the third thing I think the city has done well.

We have been out over the course of the last 24 months, really, in front of the public, whether it's in large group meetings or an individual stakeholder meetings, having the conversation about where we stand as a city right now.

Those three things together, from my vantage point, have paid big dividends and are paying big dividends right now.

When I have conversations with residents in the community, including people who are very skeptical about about um municipal governance, they are up to speed in many cases with where with where we are, and we have they've respected the process that we've gone through.

We have socialized this correctly and in an effective way.

And so, yes, we've got more, we have difficult conversations to come, and we've got we've maybe got some projects that we're gonna have to convince the community to support us on, but the groundwork has been laid in a really good way.

And this and your team and the city manager and city staff deserve deserve compliments for how we brought ourselves to this point where at least we give the city a chance to continue to push this strategy forward.

I'm gonna leave I'm gonna leave it there.

I'm gonna turn over to the city manager, but I did want to end on a slightly more positive note and again underline for us and for the community how much work has taken place and the fact that this is lead that this is likely to lead for good things.

I I remain optimistic, and again, that's thanks to the work of your team, Mr.

Wagner, and and all of staff.

City Manager Farrell.

Thank you, Mayor.

And I I really appreciate your optimism because I do think that the budget that we've prepared does create a glide path for success.

It's a measured approach to deal with the deficit without uh grossly decimating the public services that we need so much for uh this community that is so entirely special and beloved.

The year two service impacts conversation will happen in July.

And so, in terms of next steps, first again, wanted to thank you for your direction and your support of the new structure and format of the presentations.

That's really helpful for us to get detailed information back from you and guidance and direction on the budget that we'll bring forth in June.

So June 16th will bring forth the budget with the recommendations and input that you've given us uh today and yesterday for adoption that will take care of year one.

Uh our recommendation is that in July we have a couple of study sessions or at least one study session to discuss potential year two impacts in greater detail, but also discuss potential revenue options, revenue measures that could help to get us through uh the next several years without uh further impacts to our services, especially in the areas of public safety and recreation and all the programs that we need for a healthy, thriving, vibrant community and to ensure quality of life.

We've also heard a lot about your feedback on infrastructure.

We'll take a look at that.

We'll also present uh additional recommendations about how to put more funding towards the vast infrastructure that we have that supports the community and our facilities, whether it's the golf course or it's our streets, uh, just making sure that we have plans for that, and then ultimately uh you can make a decision in July about, you know, next steps on uh on revenue options.

And so that's what the recommendation is in terms of staff in the next uh few months.

You'll in June adopt the budget, but the conversation will continue as we've discussed, especially for the year two strategy to get the deficit handled once and for all, hopefully.

And just wanted to again thank everybody that's participated in this process.

You have been instrumental in making cuts in the past that have gotten us to this point where we are more financially stable.

And so thank you for your leadership in that regard.

I know those decisions are not easy combined over the two years.

If this budget's adopted in June as presented, we will have cut about 75 positions, and we will be back down to uh recession levels of of service, which this team is doing remarkably, and all of their uh employees in all the various departments.

So thanks again for the feedback.

We will come back to you in June and then have further discussion in July.

And thanks to to the I think we had one public comment uh yesterday for the input from from Jenny Lynn, and we appreciate that.

But thank you.

And with that, I'll turn it back to you, Mayor.

Thank you very much.

Uh speaking of public comment, let's open it up for public comment.

Are there are there any members of the public here who wish to comment?

Saying none, we'll bring it back to uh we'll close public comment and bring back to the dais for any final thoughts or questions looking to my colleagues.

Thank you again.

Thank you again to the entire finance department and to our city manager.

Uh, and with that, we're adjourned.