All right, hello, everybody, and welcome to the December first, twenty twenty five meeting of the Measure O citizens Oversight Committee.

The committee is conducting this meeting from the City Council chamber.

This meeting is being broadcast on TV and video streamed and can be viewed live or later on the city's website or on the city's YouTube channel.

Will the commission secretary's secretary please call the roll?

Chair Mulligan?

Here.

Committee member Fife?

Here.

Committee member Hildreth?

Here.

And Committee Member Smyers.

Our next item is to determine chair and vice chair.

We had a very rigorous election process that included, is anybody want to do it?

Uh, who's willing to be the vice chair?

Um, I've enjoyed being the chair.

There's so many benefits from being the chair, like the quarterly meeting seeing the mayor.

Um, but at the same time, I want to make sure if there's anyone who would like to be the chair, um, that we discuss it and talk about what anybody's wants are uh I guess I'd look to the vice chair first to see if you have interest in being the chair or in another leadership position.

I have interest in being the chair.

Just comment, I know it from the first our first meeting, you know, I indicated that it'd be nice to kind of rotate through that, like the city council does at some point, and I maybe at some point down the road.

I've got a few more years before I need to go, you know, age off here.

Turn off, I think is a better word.

Um, and uh so I'm I have no interest at this point.

Okay, and I'm willing to be vice chair, unless again, somebody else steps up and says they want to do it.

So I think we'll need a nomination for, or they need to be separate for chair and vice chair, or can they be together?

We can do them together.

Is there a motion?

I'll move so move that uh Jonathan be elevated to chairman and Brian become the vice chair for the coming year.

Second, we have a first and a second.

Is there any discussion?

Would you do a roll call, please?

Sure.

Chair Mulligan.

Lastly, last and final role as a chair.

Yes, I vote yes.

And Vice Chair Bartlett.

Aye.

Committee member Fight?

Yes.

Committee member Hildreth?

Yes.

Committee member Smyers.

Aye.

It passes.

Thank you.

I'll finish this meeting, Mr.

Chair, and you can take over from there.

Um I think our next item is public communications.

That next uh under California law, public comments at special meetings are limited to subjects on the agenda only.

Therefore, public comment uh will take place during the committee consideration of the item.

And do we ask for comments here?

Are there any comments from those in attendance?

Seeing none, we'll move on to the minutes.

Uh we've all had a chance to look at the minutes.

I think are there any amendments or corrections from anybody?

We need a motion for the minutes.

Uh does Jeff Fidel move to approve the minutes?

Second.

Yeah, and I'll do a roll call vote.

Chair Mulligan.

Approve.

Vice Chair Bartlett.

Approve.

Vice um committee member Fight.

Approve.

Committee member Hildreth.

Approve.

And committee member Smyers.

I also approve.

At this time, I think we turn it over to you to go through a discussion of the reports.

Thank you.

Good afternoon.

Chair Mulligan and Vice Chair Bartlett, members of the committee.

I'm Kirsten LeCasse Administrative Services Director.

And today I'm going to walk you through the Measure O year-end revenue revenue, expenditures, and audit results for fiscal year 25.

So this afternoon I'm going to walk through the year-end revenue and expenditure results, as I mentioned, information about the Heather Farm Aquatic and Community Center project, fund balance, the audit results, and the action that we're requesting of you today.

So measure O revenues came in higher than anticipated by approximately 620,000 at the end of fiscal year 25, most of which is attributed to interest earnings.

Earlier in fiscal year 25, Council authorized the appropriation of two million dollars from the Heather Farm Project Reserve to cover project related costs through the end of calendar year 2025.

Additionally, council authorized the use of approximately 600,000 of the fund balance accumulated through fiscal year 24 to fund additional costs for the synthetic turf project in that same amount of 250,000, as well as 350,000 for the walnut creek downtown request that was allocated in December of 2024.

I'll discuss that in more detail in the expenditure section.

Based on the fiscal year 25 results, we there was no use of fund balance needed.

So expenditures did come in under budget by approximately 240,000.

And again, we'll cover the expenditures in each budget category in more detail in the expenditure section.

Capital project funding is transferred from various funding sources to the capital fund.

And in the case of Measure O, 2.25 million was budgeted to be transferred to the Capital Fund.

We, however, only transferred 2 million, and this is lower than budgeted because the lighting project came in below budget.

So the unspent funds were returned to measure O, and that was about of two two hundred and fifty thousand.

I'll talk a little bit more about that in a future slide.

Nine million has been set aside in a reserve for the future costs of the Aquatic and community center.

And so based on actual revenues and expenditures, there was a contribution to fund balance of approximately 1.18 million.

So as you know, transaction and use tax revenue is the primary source for Measure O.

It came in higher than budgeted by about $150,000.

Additionally, the fund earned $480,000 in interest for a total revenue of $13.04 million.

Next, I'm going to touch on the revenue drivers.

And so there are several categories here, but overall, the transaction and use tax has remained largely stable over the prior fiscal year, with only a slight decline of 1%.

Specific industry groups have seen both increases and decreases.

The general consumer goods, which is our largest category, and I will go to our pie chart so you can see, that remained relatively flat with an increase of under 1%.

Autos and transportation increased by 4%, and restaurants and hotels increased by 2%.

Just a reminder in restaurant and hotel categories, it's the only the food and beverage sales within the hotels that are included in this calculation.

The most significant downturns occurred in business and industry, which saw an 11% drop from prior year, and that's due to one-time payments, which are not recurring, which is typical of this category.

It includes things like construction related transactions as well as the purchase of materials used in manufacturing.

So we would expect that to see that fluctuate quite a bit year over year.

Fuel and service stations fell 7%, which is a continuing trend as a result of lower crude oil prices, dampening our sales tax revenues.

So this table shows you the measure O expenditures by category.

So the budgeted expenditures were $5.35 million with actual expenditures of $4.86 million.

So that resulted in approximately $480,000 in budgetary savings.

And that's primarily related to the multi-year initiatives, which I'll talk about in more detail.

And there was a vacancy for a portion of the year in arts and recreation.

So the expenditure budget for Measure O was developed for fiscal year 24 and 25.

All the positions that were created were vacant at the time.

We use a standard set of assumptions for our vacancies when we're developing our budget.

So that includes the salary range that's set for it as well as benefits, and we include a vacancy factor, which is consistent with how we budget all of our funds.

When positions are filled, the budget is not necessarily adjusted at that time that they're filled for the actual salaries and benefits for the incumbent.

So that happens on a budget development cycle.

So what happened as a result is these were budgeted vacant and then they were filled.

And so that creates the actual cost for salary and benefits.

Additionally, all of the positions in Measure O, with the exception of the one position in arts and recreation, have been filled, and so the vacancy factor that we budget for did not come to fruition.

And so we have improved this in the fiscal year 26 and 27 by first using the existing incumbent salary and benefits, as well as eliminating the vacancy factor.

So for most departments, there are plenty of positions, and so the vacancy factor is accounted for with turnover.

But because measure O is so small in terms of the number of staff, we eliminated that vacancy factor, the hope being that the positions all stay filled.

So I'm going to next discuss these categories in a little bit more detail.

And this is information that we've heard before, but we meet only twice a year, so I wanted to kind of cover some of this additional information.

So back in December of 2024, the city council authorized an additional one-time amount of 325,000 towards events and initiatives based on a request from Walnut Creek downtown.

So these included updating approximately 17 utility boxes by replacing the current wraps with new artwork, installation and removal costs of holiday decorations, which would cover a four-year period, Walnut Creek on Ice site improvements, including a new ice slide, additional features to expand the rink side experience, as well as increased programming activations, many plaza improvements, which to increase aesthetics and provide increased use for the public, and that was a partnership with those businesses.

Grow Walnut Creek first Wednesday program from two events in 2024 to four events in 2025 and being able to maintain the locustry location.

And lastly, event assistance for the city event permit fees for Oktoberfest and Walnut Creek on Ice.

So this request was actually funded from the fiscal year 24 year-end contribution to fund balance.

And you may recall we talked about this in our meeting a year ago where we were recommending that we fund these initiatives out of that remaining fund balance, and so that ended up being adopted by council.

So we did have some savings in this category at year end of about 158,000.

So the for homeless services, the funding in this category is in the community development department, and it's for a full-time core homeless outreach team.

The city works in partnership with Contra Costa County for this service.

The full cost of the core team is approximately $250,000 per year.

The city received grant funds to offset part of these costs, and then in fiscal year 25, that budget of 180,000 was fully spent.

And again, that's due to the partial vacancy.

So it was this position was vacant since September of 2024.

Some of the salary savings were offset by an increase in hourly marketing associates, and that was to do some of that work that wasn't being completed.

So as you know, Contra Costa County provides the 40 base hours at both the Ignacio Valley Branch and the Walnut Creek Library Branch.

But Measure O does fund an additional 12 hours per week at each branch.

The total annual cost funded by Measure O is about 570,000.

Fiscal year 25 budget includes a final payment from fiscal year 24.

We did mention that last year.

So it's delayed, it was a delayed billing from the county, and so that's why the budget looks higher than this 570,000.

The budget was underspent by 158,000.

So in our public safety category, this does include seven FTE that were added to the police department for the downtown patrols, dispatch and crime prevention, all of which are currently filled.

This category also includes crossing guard services, which are in the public works department.

In fiscal year 25, there was overspending of approximately 112,000, and again, that was due to all of the positions being filled from what we previously discussed, as well as some overtime related to downtown patrol.

The sustainability analyst funded by Measure O implements recommendations from the sustainability action plan as approved by council.

There was a slight overspending of about 24,000 in this category, and again, that was due to the position being filled for the entire year.

The measure O budget also includes funding for a portion of two capital projects.

So it was the installation of ball field lighting at Tice Valley Park and the installation of turf fields at Heather Farm Park.

And so again, this is there was a slight increase in the cost for the turf fields, but it was offset by the lower costs at the Ballfield Lighting Project.

And so essentially, in the end, we had a million dollars toward for each project, but in Ballfield only needed 750,000, and the turf fields at Heather Farm needed the 1.2 million, so it still came out to a total of 2 million.

So both projects have been completed, and there's actually the ribbon cutting for the turf fields today at 4 o'clock.

So this next chart shows the expenditures by department, and again, you'll see in the police department that overspending is related to the filled positions and the additional overtime.

So next I wanted to talk about the new Aquatic and community center project at Heather Farm.

So several actions took place on November 18th at the joint meeting with the City Council and the Joint Powers Financing Authority, which we refer to as the JPA.

So council awarded the construction contract for phase two of the project.

I'll talk a little bit more about that in the next slide.

They adopted a resolution approving the issuance and the sale of lease revenue bonds, and adopted a resolution creating a bond fund and appropriating the bond funds and measure O funds for the project.

So the JPA board also needed to take action and they adopted a resolution authorizing the issuance and sale of the lease revenue bonds and adopted a debt management policy, which is the same policy as the cities.

So in the initial planning stage of this project, the engineers' estimate was $58 million.

However, the lowest responsible responsive bidder, which was Lathrop Construction, submitted a bid which was lower at $51.58 million.

So that was good news.

And phase two that you see here for $56.7 million does include the construction contract and contingency.

There are design and construction soft costs as well as the existing Clark Pool demolition that are included in this total.

The table on the right shows you the funding sources for this project.

From the general fund was 1.9 million.

Additionally, council set aside $7 million from the facilities reserve, which is also in the general fund, measure O reserve of $11.9 million, and then the bond financing that was approved at $55 million.

So the Measure O set aside for debt service is $9 million.

The bond financing term aligns with the expiration of Measure O in 2033, which is why in the chart you see a term of approximately seven and a half years.

We wanted to ensure that the debt was paid when the measure expired.

Currently, the rate is estimated at about 2.59%, with net proceeds of $55 million for the project, and an estimated annual debt service at about $7.7 million.

The initial leased properties will be the Leisure Center, City Hall, and the Corporation Yard.

So in order to issue bonds, a city must be issued a credit rating.

So this is a process where we essentially provide all of our financial information and background of the city, which would help support a credit rating.

And so we met with Standard Importers and we provided them that information.

And then on November 14th, we did receive a credit rating, which was a triple A for the city and a double A plus for the lease revenue bonds.

And those are both the highest ratings we could have received.

So that is also great news.

The next step in this process will be the competitive sale, which is happening of the bonds, which is happening this week on December 3rd.

And at that time, the rate will be set.

The financing then closes on December 17th and the funds are provided to the trustee.

So the beginning measure O fund balance at the start of this fiscal of the start of fiscal year 25 was 12.01 million.

So that amount includes the set aside for the heat of the farm project as well as any savings that accumulated from prior years.

When we net our revenue and expenditures for fiscal year 25, it increases our fund balance to 20.18 million.

And then taking into account the reserve set aside of 16 million, we have, and we have the fiscal year reserves of 1.77 and amounts carried forward to fiscal year 25.

Sorry, amounts carried forward to fiscal year 26, which are purchase obligations, and that leaves us with an estimated available year-in fund balance of 2.22 million.

Included in the Measure O ballot language is the requirement that an annual audit be conducted.

So Mays and Associates did perform an independent audit of the fiscal year 25 Measure O activities to ensure that the transactions were allowable under Measure O based on the ballot language and city council direction, and no exceptions were noted.

So what we're asking of you today is to review the revenues and expenditures for fiscal year 25 and provide feedback as to whether the expenditures align with the adopted legislation and spending plan.

Review the independent audit findings and provide comments and refer the report to city council with a recommendation that the council accept the report.

And with that, staff is available to respond to any questions you may have.

Does anybody have any questions?

Well I got a couple couple things.

Um with regard to the police uh budget, the funds that measure O provides I might has been used primarily for downtown uh additional downtown uh patrols, from what I heard, and that's continued through the year.

I guess my question is uh are you able to continue that those patrols uh with the current budget that you have as far as you know.

Good afternoon, Jamie Knox, chief of police.

Uh yes, with the funds we do have, we will be able to continue those patrols.

Okay, that's good news.

Thanks.

That's all I had.

I don't know if anybody else.

Not for the police.

Thank you very much.

Oh, I had okay, go ahead.

I have another question, but go ahead.

All right, uh the library hours.

Just to confirm, we did add those hours.

We spent less, but the hours were added to the libraries, is that right?

That's correct, yes.

Okay.

Uh a comment, the uh economic development spend.

Uh I'm a part of a couple of organizations outside of this one, and we do a we spend a lot of time on economic development.

I'd like to see that money spent.

Uh it's I mean, these are all important items, but economic development is is near and dear to my heart.

Uh we'll help you figure out how to spend it.

So, willing to talk to anybody about that.

And then uh sorry, if I can just add that some of those are multi-year.

So we may see savings, but then it could be spent in a subsequent year.

Okay.

Uh and then uh on the the audit report, uh, the numbers, if you look at uh page six of the audit report, uh the fund balance uh beginning of the fiscal year, July 1, and the end balance uh June 30th, those numbers differ uh from the beginning balance uh and ending balance in the measure uh fiscal year 2025 measure row fund attachment one.

Yes, and so I'll I'll try not to explain it with too much accounting speak.

However, um, as part of the audit, the way we present the numbers is slightly different than how we show and in comparing to budget.

So in the audit, any money that has been set aside for capital but has not actually been spent.

So we provide money to the capital fund as it's actually spent, and the rest of it is still held within measure o.

So we reclassify that as part of fund balance because it hasn't yet been spent.

So that's why you'll see a variance in the fund balance number.

Thank you.

And finally, uh, the uh the original statement, the first statement of compliance, uh, it's not addressed to our city.

It's it's uh as written, it's generic.

If if somebody is here from that entity that can verbally correct that, then uh then I can accept that audit, but it's simply uh California generic city, uh, but no reference to Warner Creek or City Council of Walnut Creek, it's page one of the audit report.

Oh, the cover.

You're you're referring to the cover letter, not the auditor's opinion.

Independent auditors report titled page, and then it has a finding in the second paragraph that uh that uh is a compliance related, and then of course the the letter on the last page also has a compliance statement.

So we can work with the auditors and have that adjusted and have this updated and send you an updated copy.

Okay, so then it's in there.

For purposes of this meeting uh verbally, that's city council walnut creek, California.

Correct.

Okay, yeah.

Then in that case, I'll I accept the letter.

Okay, thank you.

Yeah, you mentioned that the I think you mentioned the bonds were due to be sold December 3.

Yes.

At a rate of 2.59% was a projected.

Does that hold true today still?

I mean, that seems very pretty good rate for.

Yeah, it is a low rate, and that was what was estimated as of a few weeks ago.

And so it won't be finalized until they actually sell the bonds on Wednesday, but they're anticipating it would be around that.

Very close.

Yeah.

Okay, great.

And just generally, Christian, thank you for a nice report.

Well written and comprehensive.

Thank you for that.

Thank you.

Um I want to thank you also for the thoughtful report.

Um one of the questions I have, uh, I was just looking through ordinance two-two-two-eight, and in that ordinance it said if bonds are sold.

Uh there is a provisions disguise uh defining the scope of committee responsibilities and reporting requirements shall address bond oversight in the event that decision is made to sell bonds at some point.

So maybe for the next meeting, could you look into that?

See, I know our um responsibilities are to uh have oversight over the spending, but it seems like that is a potential responsibility of us too.

So if you could look into that just for the future, yes, we'll have an update for you at the next meeting.

And uh congratulations, by the way, on the rating.

That's that's very good, and it I think it shows that the the city's being run fiscally responsible responsibly, so well done.

One of the questions that um we talked about um at uh the last meeting was the just an understanding again of the source of the tax revenues.

You did give a good uh expression of the different business sources, but uh city residents versus uh non-residents, and I think it I remember during the the campaign it was um uh touted as being uh designed to be paid by a proponent or a uh larger proportion of external non-Walnut Creek people.

Um so I don't know if you have any insight on that as kind of the percentages right now.

Uh if you get it for us.

We did a study a while back when we first were talking about going out for a measure, and so we did have some information at that time.

We can see if we can get more information, but what I can tell you is that's generally a result of during the daytime.

We have a lot more people coming into Walnut Creek either for work or shopping, recreation, and so we get up to about 120,000 people in the city during the day versus residents, which is closer to 70,000.

And so that does make a difference in terms of the sales tax revenue.

I can see if we can find out more specific information and provide you.

Just general percentages of of the dollars that come in uh if you can.

It's I don't want you to do a lot of work on it, just I just remember that was an important part of it.

Yeah, okay.

Um a second thing, and again, I don't know whether others have interest in that, but in in this report it shows uh 24 versus 25, and then 20 estimates for budgets for I think there's some discussion about 26.

Uh it seems to me three or four or five years from now we're gonna want to see a you know the the multiple years versus just the two years in isolation.

And I don't know if that's something that can be done easily or if anyone has any interest, it might just be me and it might not be our purview, but I just thought it'd be interesting.

Uh yeah, actually I I agree with that.

And then a cumulative uh number would be useful as we get into year 345.

It would be nice to know where we uh what we've done up to that point.

Cumulative.

Yes, we can provide that information.

Well, this is Jeff Fight.

I have a couple of questions about the homeless services portion.

Um, so I understand why the why the actuals and the budget are exactly on on spot on 180,000 as a portion of the overall spend.

A couple questions.

First is um is this a budget that we're gonna be setting annually year to year?

And the 267096 that is expected were spent for 25.

Was that on budget?

I would need to ask some uh someone from community development to come up and help answer that question.

Hi, good afternoon.

Uh, I'm Stephanie Rynan, the housing manager here at the city of Wilnut Creek.

And um, and yes, it is uh service that we have funded for the last several years and at this point anticipating continuing to use the service for the foreseeable future.

Okay, and and the 267 was that is that um on budget.

Uh we only see the 180 portion that we're responsible for under measure oh, the rest funded by general account, and then some subsidy from the state or another group.

That's right.

We um the amount tend to increase along with inflation anywhere from three to five percent annually for the cost of this service.

Um the fund the cost of the program has traditionally been offset by state dollars.

Um last year we reported to council that those dollars had gone down by the state, so we found additional funds in other portions of the housing budget to be able to cover those costs.

Okay, thank you.

I just had one quick question on the Leisher Center strategic plan, noting that this program coordinator position has been vacant since September 2024, and looks like you're using some hourly folks to fill the gap there.

But um, do you see that position being able to be filled, or how are you addressing that?

Carolyn, come up and help with that one.

Hello, Carolyn Jackson, Leisher Center General Manager, and pleased to report that the position is now filled.

We're maybe three weeks into that position being filled.

Uh, and uh yes, we're very excited to finally see the results from that, which we expect uh will help with our long range planning for performances.

Any other comments or questions?

I just want to say personally, I um you went through all the things that measure o supports the the ice rink, the first Wednesdays and things, and I I did participate on some of those things this year, and it's really nice to see that the monies from this are doing what they're supposed to be doing, so um that's good.

Uh there were three things that you need us to do.

And shall we do those things now?

Yes, sure.

If you're ready.

Do you want them individually or just we have reviewed the revenues?

We've reviewed the independent annual audit.

Uh and so then the action would be to refer the report okay to city council.

We need a motion to refer the report to the city council.

Well, I was gonna say, do we want to address each item separately?

I mean, that seems to make that way it's clear that we approve each and each one individually.

We can do that.

The the first two don't require an action or a vote, but we can we can confirm that you've provided the feedback, and that you've reviewed the independent audit findings and you've provided any comments that you have, which is noted that we need to have them include the city of Walnut Creek, which is well.

Maybe the motion should have could include the fact that we've uh reviewed the audit and approved it and find it accurate as well as the um the executive staff report that it's uh um we've reviewed those as well.

So I mean wrap it into one probably would be fine.

I don't have a wording for that, but if somebody wants to take a stab at it, um I I it's pretty well written here.

We've reviewed the revenues and expenditures for fiscal year 25.

We reviewed the independent annual audit findings and offered comments, and uh at this point the motion should include that we're referring it to the city council.

Joe Fide, I move to refer the report to city council.

Is there a second?

I'll second.

Any discussion?

Do you take a roll call?

Yes.

Um, Chair Mulligan.

Yes, Vice Chair Bartlett, yes, committee member Fight, yes, committee member Hildreath, yes, and committee member Smyers, yes.

So motion passes.

Thank you all.

I think at this time we allow for public comment.

Is that right?

Or we do that do that a second time or no?

Um, no, we can actually adjourn the meeting if it's completely done.

Uh, do we we just adjourn?

We don't need a motion to adjourn.

Correct.

Thank you for this uh biannual meeting of the Measure O Citizens Oversight Committee.

This meeting is adjourned.

Thank you.