| Time | Speaker | Text |
|---|---|---|
| 00:00:00.03 | Unknown | Ciao. I mean, I'm going to start a second. |
| 00:00:01.92 | Unknown | I'm positive. |
| 00:00:04.37 | Unknown | I had a set. |
| 00:00:04.50 | Unknown | Thank you. |
| 00:00:06.31 | Unknown | Thank you. I think she's on time. 5, 2, 3, 4, 1. Long and long. and then I'll just say, Thank you. Thank you. Thank you. |
| 00:00:25.50 | Sarah Mastrianni | Thank you. |
| 00:00:25.51 | Unknown | Yeah. |
| 00:00:25.97 | Sarah Mastrianni | Thank you. |
| 00:00:26.25 | Unknown | Thank you. |
| 00:00:26.52 | Sarah Mastrianni | Thank you. I'm ready whenever you guys are ready. Thank you. |
| 00:00:31.91 | Walfred Solorzano | Bye. |
| 00:00:31.98 | Unknown | Thank you. |
| 00:00:31.99 | Walfred Solorzano | Bye. Good evening, Mayor Blalstein and council members. This regular meeting for the March 28th, for March 2020, 23, is being held in council chambers located at 420 Litho Street. Staff and members of the public are also participating through Zoom. This meeting is being broadcast live on the city's website and on cable TV channel 27. |
| 00:00:56.44 | Sarah Mastrianni | Thank you city clerk and I will now call to order our regular city council meeting on March 28 2023 at 6 01 PM city clerk would you please call the roll. |
| 00:01:05.96 | Walfred Solorzano | Council member Cox. here. Councilmember Hoffman? Council member Kelman? advice, Mary Sobieski. and Mary Blastie. |
| 00:01:15.19 | Sarah Mastrianni | here. Okay, all members are present and we do have a quorum and our first item on the agenda this evening is closed session discussions. Our first item in closed session is conference with labor negotiator government code section 54957.6 and then conference with legal counsel Existing litigation, government code section 54956.9. So at this time, I will now open it up for public comment on these closed session agenda items. City Clerk. |
| 00:01:43.51 | Walfred Solorzano | Seeing none. |
| 00:01:44.77 | Sarah Mastrianni | Okay, seeing no public comment, we will now adjourn to closed session. We will return at 7 p.m. |
| 00:01:55.93 | Unknown | And I just, but I'm not. Doctor, sorry. Very sorry. And All right. I was like, I was like, I fell in the back. |
| 00:02:24.78 | Unknown | Thank you. |
| 00:02:29.78 | Unknown | I'm happy. |
| 00:02:32.85 | Unknown | No, but I just have to get a glimpse |
| 00:02:38.50 | Unknown | Yeah, I'm a little bit more. and Yeah. Yeah. |
| 00:02:56.05 | Unknown | Thank you. |
| 00:03:01.89 | Unknown | and |
| 00:03:17.92 | Unknown | Yeah, I think it's all everybody's the rest. Thank you. |
| 00:03:23.19 | Sarah Mastrianni | Whenever you are ready. |
| 00:03:26.28 | Walfred Solorzano | ready to go. |
| 00:03:28.62 | Sarah Mastrianni | Okay. We are now re-adjourning into open session. We have no announcements from the closed session agenda. So at this time, I will ask for an approval of the agenda for this evening's meeting. |
| 00:03:44.06 | Councilmember Hoppen | So, Thank you. |
| 00:03:45.33 | Sarah Mastrianni | Thank you. |
| 00:03:45.46 | Councilmember Hoppen | moved. |
| 00:03:46.21 | Sarah Mastrianni | Second. Okay, all in favor say aye. Aye. Okay. Motion passes. Okay. And now we'll move on to mayor's announcements. I do have one exciting announcement to share. As you know, we, our finance director moved on a few weeks ago and we've brought on a interim finance director who some of you may recognize already, who is Chad Hess. He's currently a manager at Ide Bailey, who's worked with the city of Sausalito for the past two years, but he's also a certified public accountant. |
| 00:03:49.45 | Julie Vieira | Hi. |
| 00:04:15.92 | Sarah Mastrianni | I'm a professional senior auditor and an adjunct professor of finance and accounting at the Minnesota State University. So welcome, Chad. We're really happy to have you and we'll be hearing from you, I think, a few times this evening as we discuss our budget. So with that, I'll move on to the next item of the agenda, which is approval of the action minutes from the previous meeting. So before I ask for a motion on that, do we have any public comment? And city clerk, could you please remind members of the public at this time how they may make public comment? |
| 00:04:45.27 | Walfred Solorzano | For people that are in attendance, there are speaker slips over at the table by the TV. You can fill one of those out and hand them over to me or one of the staff members. If you are on Zoom, you can use the raise hand function. And if you're on a telephone by Zoom, you can press a star nine. |
| 00:05:05.32 | Sarah Mastrianni | Thank you. |
| 00:05:05.32 | Walfred Solorzano | And at this moment, we have no public comment. |
| 00:05:08.98 | Sarah Mastrianni | Okay, so I will ask for a motion to pass our draft minutes, and I see that Councilmember Cox has her hand up. |
| 00:05:14.53 | Councilmember Hoppen | Well, I wanted to have the minutes reflect that I recused myself from discussion of item 1B. real property negotiations relating to the MLK school site. I'm not sure that we actually discussed that on March 7th. |
| 00:05:36.30 | Sarah Mastrianni | That was our closed session discussion. |
| 00:05:39.05 | Councilmember Hoppen | Yeah, I'm not sure we got to that. I think we may have And so I think that item should not be on our minutes. |
| 00:05:48.77 | Walfred Solorzano | Oh, okay, I'll make that reflection. |
| 00:05:52.89 | Councilmember Hoppen | um, I'm also, I know that we did not I'm also fairly certain that we did not discuss the conference with labor negotiation negotiator negotiators for the Sausalito Police Association. |
| 00:06:13.75 | Sarah Mastrianni | So I think we left those items on the agenda in case we had time and we ended up not having time. Typically, we don't necessarily report out from closed session. So staff wouldn't have been aware of what we did and did not discuss in closed session. But if you would like to see that amended, I'd be happy for that to be reflected in our minutes. |
| 00:06:28.85 | Councilmember Hoppen | Sure. The only reason I'm concerned is that I would need to recuse myself from one of these items had it been discussed and the minutes don't reflect that. And so... At a minimum, I'd like to see us remove the real property negotiations with um, MLK School Psychiatry. |
| 00:06:44.85 | Sarah Mastrianni | Okay. GIVEN THAT REMOVAL, WOULD YOU BE WILLING TO MAKE A MOTION TO |
| 00:06:50.62 | Councilmember Hoppen | I move approval of the minutes as amended. |
| 00:06:55.32 | Sarah Mastrianni | City Clerk, can you take a roll call vote, please? |
| 00:06:58.16 | Walfred Solorzano | Okay. |
| 00:06:59.54 | Sarah Mastrianni | Or, oh, all in favor, say aye. I keep forgetting we're in the room. Bye. Okay, great. All right, so now we'll move on to the next item, which is the consent calendar. Matters listed under the consent calendar are considered routine and non-controversial. require no discussion and are expected to have unanimous council support and may be enacted by the council in one motion. There will be no separate discussion of consent calendar items. However, before the council votes on a motion to adopt the consent calendar items, Council members, city staff or members of the public may request that specific items be removed from the consent calendar for separate action. Items removed from the consent calendar will be discussed later on the agenda and public comment will be heard on any item that was removed from the consent calendar. So before I open it up to public comment, do any members of the council wish to remove anything from the consent calendar? |
| 00:07:47.40 | Councilmember Comin | Mayor, I don't want to remove this item 3B, but I just want to make sure that our city manager is aware that the U.S. Small Business Administration has added Marin County to its list of disaster-stricken counties eligible for financial aid, and that storm aid is available for qualifying residents and businesses that sustain storm damage between the 27th of December and January 31st. So more information on that. but I wanna make sure that's part of that package. |
| 00:08:12.04 | Sarah Mastrianni | Bye. Okay, so I'll go ahead and open it up for public comment at this time. |
| 00:08:17.54 | Walfred Solorzano | At this moment, we have on Zoom, Kieran Culligan. |
| 00:08:22.35 | Sarah Mastrianni | I guarantee. |
| 00:08:26.38 | Walfred Solorzano | Thank you. |
| 00:08:26.40 | Kieran Culligan | All right. I'll try and start my video. There's a snafu of getting my public comment into the agenda. So sorry, I'm going to do the double whammy in case you happen to do to read it. But I would like to suggest that you take item 3C off of the consent calendar and discuss it for two reasons. I think there's two reasons that kind of make it more than just an obvious thing to pass tonight for the purpose of pedestrian access and parking. So if you know that's that you all know the spot quite well. It is the main linkage in between the ferry landing and our downtown. So there's a lot of pedestrian traffic on that stretch of sidewalk. the The proposal I stated would essentially shrink the effective width of that sidewalk down to between 48 inches and 60 inches. which for a high traffic area is super, super narrow. That's less than half the width. of many of the other sidewalks in the area. So that's a big deal. Like we're actively widening the ferry land side, making it more pedestrian friendly. Why would we be shrinking it in this critical spot in between? And then the other one is commercial loading. I know commercial loading is a hot topic. One, because of all of the cars I have to dodge when I'm commuting by bicycle that are illegally parked on the side of the road for lack of commercial parking. We also know it's a hot topic in downtown from the business community. This proposal is removing an additional spot in addition to the other spots that have already been approved for removal. It's removing an additional commercial loading spot. What does City Council think of that? Are you expecting anything in return? Are you doing anything to mitigate that? And I would love to see in the conditions for use that the applicant property users are only using paid parking or commercial loading zones for any loading or unloading. So I think those are all worthy topics of discussion. Thank you. |
| 00:10:29.77 | Sarah Mastrianni | Thank you. Thank you, Karen. Do we have any further public comment at this time? |
| 00:10:34.45 | Walfred Solorzano | No further public comment. |
| 00:10:37.21 | Sarah Mastrianni | Okay. So can I have a motion or did we wanna discuss item 3C? Bye. |
| 00:10:45.80 | Unknown | Thank you. Yes, Council Member Hoffman. |
| 00:10:48.42 | Sarah Mastrianni | Thank you. Thank you. |
| 00:10:48.84 | Unknown | Um, There was, we did receive, I don't wanna take a, I just wanna do a quick clarification if anybody wants to follow up then. But with regard to item, the item that the member of the public was just talking about, I think it's item 3C. |
| 00:10:56.43 | Unknown | Of course. |
| 00:11:06.63 | Unknown | I did send an email to our Community Development Director on that issue and specifically the issue about the width of the sidewalk. for clarification. And the response was, and my understanding was, the sidewalk is actually gonna be widened not narrow, not narrow at the expense of the developer. I see our Community Development Director racing to the podium. Is it okay if you- Absolutely, yes, please. |
| 00:11:29.91 | Unknown | If I may, yeah, I just want to confirm that is correct. The intent of this. The proposal, which was approved by Planning Commission following Historic Preservation Commission and multiple Planning Commission reviews, was approved. Um, and, The approval is in connection with a widening of the sidewalk to accommodate outdoor dining at 12 El Porto. in connection with a future tenant. in that space. So what is before Council this evening is not anything associated with the project's approval. It is only approving the ability for the contractor developer to access the right of way in order to make the improvements that have already been approved. |
| 00:12:09.37 | Sarah Mastrianni | Thank you. Thank you very much. Okay, so given that point of clarification, I feel comfortable asking for a motion. Yes, please. Can I ask a question? |
| 00:12:17.22 | Councilmember Hoppen | Thank you. Thank you. Thank you. Yes, please. Can I ask a question? I apologize. Yes, please. We are granting an encroachment agreement for use of public property for a private use without payment. I want to be sure that we are treating all of our businesses. equally. that there's parity in the way. And so I don't know whether and what our policy is for allowing other restaurants to encroach into the public right of way. for their private use and profit without payment. I know we have parklets, I know we have temporary dining, but this feels like a much more permanent Um, decision to me. So I wanted to ask that question. I apologize. I didn't think of that until I heard from member of the public. |
| 00:13:19.10 | Sarah Mastrianni | Community Development Director Phipps, do you want to speak to that and to the requirements for an encroachment agreement, as well as perhaps the requirements of payments? I know we recently heard on the parklets issue and the cost to restaurants. |
| 00:13:31.23 | Unknown | Sure. Again, what's before council is not approval of the project. The project has already been approved. What is before the council is the ability for the developer to construct what has been approved. I haven't dug into the specifics of the approval. It was before my time. It was done, I believe, in... second quarter of last year. This is only a follow on associated with that agreement. I believe that the applicant has paid the current fees associated with occupation of the right-of-way. That would be a sidewalk dining encroachment permit in the amount of $2,730. And once we bring the parklet program to council, I think that there is a discussion that we can have as to how this particular outdoor dining concept will transition into the permanent outdoor dining parklet program. So that's my feedback to council. I hope that's helpful. |
| 00:14:30.39 | Councilmember Hoppen | That's very helpful to me. Thank you so much. And with that, I'm prepared. |
| 00:14:33.58 | Unknown | I'm sorry. Thank you. |
| 00:14:34.87 | Sarah Mastrianni | Okay, great. |
| 00:14:36.53 | Unknown | I, Thank you. I share your concern. And so, but I think anyway, in this instance, there was already outdoor dining and it's not a parklet. It's just an expansion of the sidewalk to accommodate. So I think that's a move in the right direction. But anyway, move to approve the consent calendar. |
| 00:14:56.43 | Sarah Mastrianni | City Clerk. Or actually all in favor say aye. Aye. Okay, fantastic. Still getting used to that one. Perfect. So next item on the agenda, public hearing items, of which there are none. So we'll move right on to item five business items. So our first business item this evening is the mid year budget update. And we have a few presenters with us on this topic. We've got city managers of Pata and Mr. Hess, our new interim finance director. So please. |
| 00:14:59.16 | Unknown | Aye. Aye. Aye. |
| 00:15:23.48 | Chad Hess | Oh, yeah. Good evening, mayor and council. It's quite the honor to be back in front of you for a for another round of presentation. Um, Tonight, I will give a quick update on the fiscal year 22-23 mid-year budget. Are you guys able to see my slides? |
| 00:15:42.38 | Sarah Mastrianni | my slide. Mr. Hess, we just need the volume to be turned up a little bit. We were having trouble hearing you in the Great. Okay. |
| 00:15:50.18 | Chad Hess | Are you guys able to hear me now? |
| 00:15:51.60 | Sarah Mastrianni | Yes. |
| 00:15:52.20 | Chad Hess | Much better. Awesome. And are you guys able to see my screen? |
| 00:15:57.77 | Sarah Mastrianni | Yes, we can. |
| 00:15:59.15 | Chad Hess | Bye. Perfect. Thank you. So again, thank you for the opportunity to be in front of city council tonight. I'm quite the honor to be back with the city in this interim capacity. Tonight, I am going to give an update on the fiscal year 2022-23 mid-year budget. Um, I do need to give kind of a disclosure, a full disclosure, as requested by my supervisor at iBailey. The disclosure was that I was not involved in the preparation of the mid-year budget. I had no input on the assumptions, methodology, and process of developing the mid-year budget review. I did review the material changes of the budget to have a better understanding of the story behind the changes, but was not involved in the actual budget setting process. That was done by the previous finance director, who's no longer with the city, but I did have an opportunity to review the work. I didn't make any changes to the assumptions. As you will see in the coming slides, I did update the opening fund balance numbers. Um, for fiscal year 21-22 based on the audit report. THAT WAS ISSUED BY OUR INDEPENDENT AUDITOR, BUT HAS NOT YET BEEN PRESENTED TO COUNSEL. that will be presented on April 25th at that council meeting. I also did prepare the going forward section of the slide deck to help Council visualize some of the future debt and pension obligations that are in front of the city. WITH THAT BEING SAID, I WANT TO START OFF TONIGHT TO DISCUSS THE MAIN OPERATING FUND OF THE CITY, THE GENERAL FUND. And we'll talk about revenues, expenses, and projected fund balance. So the general fund revenue budget is increasing by $984,000 over the original adopted budget. This is primarily due to a better than expected sales tax revenue projections, which comes from our partners at HDL. You can see that sales and use tax is projected to increase over the original budget by about 755,000 or 17%. We are also reducing the revenue projections in the community development area or the community development partner due to a slower um, slow down and re plan review activity. And accordingly, the adopted budget was developed in May and June of 2022 was maybe a little overly optimistic of future activities. And accordingly, the use of consultants will be reduced as well, which will result in an offsetting reduction in the expenditures that you'll see in the coming slides. We are also reducing our recreation revenues by about 158,000. Um, for the mid-year budget. This change is really due to a change in how contracted youth tennis program with HRT academia was structured. IN THE PAST, THEY USED THE CITY AS KIND OF THEIR COLLECTION AGENT TO REGISTER THOSE INDIVIDUALS INTO THE PROGRAM. And then 75% of that revenue was remitted to HRT. for them running and administering the program. UNDER THE NEW AGREEMENT WITH THAT THIRD PARTY, They have now taken over the registration for that program. So that is reducing our top line revenue. But accordingly, we will also have an offsetting reduction in expense. due to that. no longer outflow of resources on the expenditure side. The city will still retain or receive 25% of the revenue share with HRT. Also interest earnings is increasing. So we increased our interest earnings by about $60,000, our projected interest earnings. This is mainly attributable to more favorable interest rates for the dollars that we have invested in the LACE, the Liquid Asset Investment Fund that's administered by the state of California. So overall, that's about a 5% increase in revenue over our original adopted budget. Um, and then we'll move on to the expenditures. So here you can see our expenditures for the general fund. WILL BE REDUCED BY JUST OVER A MILLION DOLLARS IN TOTAL. The bulk of the savings is within the salaries and benefits area. Due to the reduced work week, AND THEN SEVERAL VACANT POSITIONS IN VARIOUS DEPARTMENTS THROUGHOUT THE CITY. Professional services has also been reduced by over 600,000 AS NOTED IN THE PREVIOUS SLIDES, PART OF THIS REDUCTION INCLUDES THE COMMUNITY DEVELOPMENT CONTRACTORS THAT ARE REDUCED DUE TO A LOWER THAN EXPECTED Revenue. as well as the reduction payout to HRT. academia for the youth tennis program. That's included in the professional services line item. Um, conferences and training did have a slight increase. There were some, uh, required trainings that needed to be taken to maintain licensure for, for a few individuals within the city. So that budget was changed slightly by about $22,000. THE MISCELLANEOUS EXPENDITURE GROUPING HAS BEEN INCREASED BY ABOUT 800,000. Mainly this is due to the encampment related expenditures that took place in the first part of the fiscal year. However, it's my understanding that the encampment is now closed and we anticipate this category of expenditures to flow down in the remaining four months of the year. Um, There was a slight change in debt service expenditures. and then the transfers remain the same. Overall, a reduction of about 5%. or just over a million dollars for the expenditures. This slide here was presented to council on February 28th. I do want to draw your attention to the fund balance numbers that are noted. RIGHT UP IN Second. right up in this area here. So, These original numbers, when we started the adopted budget, we had a projected closing fund balance of fiscal year 21-22 of about $11,739,000. Now that we have more information, the audit report has been released, I was able to update this number right here. AND YOU'LL SEE THAT ON THE NEXT SLIDE, BUT I WANT TO DRAW YOUR ATTENTION TO of our percentages of fund balance compared to our operating expenditures. So if we look here, we've got 22% and 37%. I'm going to advance now to the next slide. This is no longer in effect. And here is the updated slide. that shows that general fund reserve. Um, Fiscal year 22 ended much better than anticipated. Originally there was about a $2 million deficit on that fiscal year 22 budget. The general fund only had deficit spending in fiscal year 22 of just over 150,000. So much better results in fiscal year 22 And that's gonna flow into fiscal year 22-23. SO YOU CAN SEE HERE THERE'S A SIGNIFICANT CHANGE IN THE OPENING FUND BALANCE FROM OUR BEGINNING PROJECTIONS THAT TOOK PLACE IN THE to this mid-year budget. THE REVENUES AND EXPENSES WERE CHANGED SLIGHTLY. And we are projecting still that deficit spend of about half a million dollars. but because of our increasing revenues and decrease in expenses, that has changed by just over $2 million. So there is a reduction of that deficit spend but then also the good news on that opening fund balance. Now we do carve out some of those operating contingencies, the 5% budgetary stabilization, as well as the 10% budget shortfall. And then we carve out a few different non-spendable items due to some interfund advances between various funds of the city. as well as the THE RESTRICTED DOLLARS FOR THE SECTION 115 PENSION TRUST. Now, as we can see those percentages of fund balance you know, a percentage of operating expenditures have greatly improved and are now more comparable with the prior few years. If we look at fiscal year 19, 20, 21, 22, and then the fiscal year 22, 23 is, is, is sitting pretty well of 33% when we look at undesignated fund balance. But then when we look at the undesignated fund balance, plus the two reserve accounts, we've got 48%. in general fund reserves. Now, that Fairly healthy right now, but I do want to just remind everyone that in the near future, we've got some increasing expenses relating to pensions. as well as larger debt payments coming up. And we're going to cover that here shortly in another slide. I will pause right there. Are there any questions on the general fund that we would like to discuss or should I move forward and talk about other funds? we open it up for questions. Is there a preference? |
| 00:25:07.46 | Sarah Mastrianni | I think we have some questions here. Go ahead. |
| 00:25:09.43 | Chad Hess | Okay. |
| 00:25:09.84 | Sarah Mastrianni | It's whatever happened. So Chad, thank you. |
| 00:25:11.96 | Unknown | very much. for that explanation. Sorry, all of a sudden it's like super loud in here. Can you give us a little bit more explanation of the 2 million, um, that was I'm not gonna say it right, but it was during the... discovered that we had an additional 2 million in some fund or other Can't see how we... |
| 00:25:32.67 | Chad Hess | Yeah. So it's relating to the projection of our business ending fund balance of fiscal year 22. Um, Thank you. When the budget was prepared for the adopted budget, THE AMOUNT THAT WAS USED FOR THAT OPENING FUND BALANCE WAS 11 MILLION. AND THAT WAS BASED UPON THE Fiscal year 22's projections, which were wildly off. They were not very accurate at all. So the actual result TURNED OUT TO BE MUCH, MUCH BETTER. than the projected budget. Um, Thank you. I DON'T KNOW IF I CAN SHOW THE AUDIT REPORT YET. have it available if we want to go into that or we can wait until next year. or next council meeting on April 25th. Ultimately, Go ahead. |
| 00:26:27.09 | Unknown | No, go ahead, ultimately. I'm ultimately awesome answer. |
| 00:26:29.91 | Chad Hess | That's an awesome answer. The better performance of fiscal year 22 is carrying forward. So in fiscal year 22, we had slightly better revenues And then a reduction of expense as well compared to the fiscal year 22 budget. So that flows into fiscal year 23. |
| 00:26:48.05 | Unknown | Yeah, that's fine. Thank you for that. For me, I think, unless there's follow-up on that, I'll be looking to that when we have the audit presentation, and then I might have some follow-up questions in the interim. So thank you so much. I know. |
| 00:26:59.46 | Unknown | Certainly. |
| 00:27:00.62 | Chad Hess | Thank you. |
| 00:27:00.91 | Unknown | Thank you. |
| 00:27:01.45 | Sarah Mastrianni | Councilmember Kelman had a question. I have a couple questions as well. |
| 00:27:04.00 | Councilmember Comin | Thank you, Mary. Hi, Chad. Nice to see you. |
| 00:27:04.81 | Sarah Mastrianni | Thank you. |
| 00:27:06.58 | Councilmember Comin | Yeah, I do have a follow-up with that. So I'm a little uncomfortable with wildly erroneous projections. Can you maybe give us a little more granular insight into... some of the assumptions that were made or the projections were made and where specifically our revenue or transfers were different and certainly |
| 00:27:25.36 | Unknown | Thank you. |
| 00:27:25.38 | Chad Hess | Yeah. Any of this. |
| 00:27:25.98 | Councilmember Comin | Any emphasis on the distinction between the two is important as well. |
| 00:27:29.82 | Chad Hess | I'm going to pull up the the auditing over here just to make sure I'm giving accurate information on my other screen. WHEN LOOKING AT THE FISCAL YEAR 22 We'll see you next time. budget to actuals, the largest is relating to property taxes, the projection for fiscal year 2020 Oh, wait a minute. I've got the wrong audit report in front of me. |
| 00:27:59.62 | Unknown | Second. |
| 00:27:59.99 | Chad Hess | Bye. |
| 00:28:00.04 | Unknown | I apologize. |
| 00:28:34.31 | Chad Hess | I'll bring that over. I'll bring over the audit report. So when looking at at the fiscal year 22 budget to actual For the projection, we had a deficit OF ABOUT $2 MILLION THAT WAS in the mid-year budget. Now, the actual deficit was only 147,000. The main contributing factors to that is we had better than expected sales tax revenues. So sales tax revenues in fiscal year 22 were about $600,000 greater than anticipated. We also had other taxes, which includes the transient occupancy tax, as well as franchise taxes, was over our projections by about 121,000. Intergovernmental revenues were slightly higher. as well as charges for services. Now on the expenditure side, we did come in under budget on the expenditures. Um, MAINLY IN ADMINISTRATION, WITHIN ADMINISTRATION, WHICH INCLUDES various departments like general government or general administration finance CAME IN UNDER BUDGET BY ABOUT 800,000. So that was mainly due to kind of a reduction in staffing. Um, And then we also had community development that came in under budget. for about $738,000. And then the police came under budget by about $300,000. Um, That combined with a, a, The increase in transfer ins from the closure of two internal service funds. that's a good thing. increased our other financing sources by about 500,000. So collectively, the increase in revenues by half a million dollars THE REDUCTION OF EXPENSES BY 800,000 And then the change in transfers, mainly due to that closure of the internal service funds increased our projections or changed our deficit from about 2 million to 147,000. Those were the main contributing factors to that. Um, And again, that ending fund balance is gonna flow into our fiscal year 23. budget. Did that give you a little more insight into those changes? |
| 00:30:58.83 | Councilmember Comin | Thank you. |
| 00:30:58.85 | Councilmember Hoppen | Thank you. |
| 00:30:58.86 | Sarah Mastrianni | Yeah. |
| 00:30:59.03 | Councilmember Hoppen | Thank you, Char. |
| 00:31:00.50 | Chad Hess | You're welcome. Thank you. |
| 00:31:01.85 | Sarah Mastrianni | Do you have a question? |
| 00:31:04.16 | Councilmember Hoppen | I am just gobsmacked. We have been... so roundly criticized by our community for and by our members for months over this deficit spending and, the horrible mismanagement of our money. And so to hear that we, in the wake of a, landslide. COVID, and the unexpected expenditures on the homeless encampment that despite all that, we still were only $150,000 in the hole for last year is insanely good news. So I can hardly believe it. |
| 00:31:50.32 | Chad Hess | Yeah. |
| 00:31:50.33 | Councilmember Hoppen | Yeah. |
| 00:31:50.35 | Chad Hess | Yeah, it turned out to be much better than anticipated. And I think that is great news for council and the citizen. Um, And we'll go more in depth on the budget or the audit report in about four weeks. |
| 00:32:02.90 | Councilmember Hoppen | So I said that in preface to my question, which is, how do we do a better job of forecasting in the future so that we are not conveying really Um... really damaging. misinformation to our constituents and making decisions about how we manage our salaries and our benefits and our employee retention and so many critical things. We have been mismanaging those things because we thought we were in a two million dollar hole. And so my question is how do we avoid THIS. type of wild fluctuating reporting or variance. |
| 00:32:46.96 | Unknown | Yeah. |
| 00:32:48.94 | Councilmember Hoppen | from actuals to projections in the future. |
| 00:32:53.36 | Chad Hess | Thank you. That's a, that's a, IT'S A GREAT QUESTION. IT'S A IT TAKES It takes a lot of institutional knowledge and a deep understanding of of the funding structures, the expense cycle, of the city to become really good at making fine-tuned projections. And I think a lot of the struggles is in that finance department, there's been a lot of turnover in the past. As soon as somebody's a year, year and a half in, THEY'RE STARTING TO GET THEIR FEET ON THE GROUND. YOU KNOW, UNFORTUNATELY, THEY MOVE ON TO OTHER OPPORTUNITIES So that's HEARD OF IT, IN MY OPINION, IS NOT HAVING THAT CONSISTENCE that can refine their projections and gain a much deeper understanding of the inner workings of this. um, MY OTHER RECOMMENDATION IS TO to refine maybe more AND MORE RELEASED. FREQUENT REPORTING to council. and management on kind of budget to actual going forward because I think with the intermittent reporting that's available It goes so long between those check-ins that things are changing and it brings if we had more frequent I think we'd have a much better understanding of where things were trending. So those are, I think, my two observations. Um, You know, and it's certainly up for debate on why we were so far off, but I think that's a main driver of that. |
| 00:34:39.62 | Councilmember Hoppen | And I had one more question. And by the way, it's nice to meet you. I've not met you before. I understand. |
| 00:34:42.15 | Chad Hess | Thank you. |
| 00:34:42.51 | Unknown | Yeah. |
| 00:34:44.89 | Councilmember Hoppen | You've assisted the city in the past. I look forward to meeting you in person at some point. |
| 00:34:50.00 | Unknown | Yes. |
| 00:34:50.52 | Councilmember Hoppen | Thank you. Great. Certainly the bearer of great news. I, Um, Do not want to insult you with this next question, but we have with turn with frequent turnover in our finance staff, we have Learned. in the past that some of our prior reporting by prior employees was inaccurate. How confident are you in the report that you're providing to us, you know, based on the facts from the recently completed audit? |
| 00:35:23.21 | Chad Hess | So I have... faith in the opening balance. SO THE OPENING BALANCES I THINK THE AUDITORS DID, THE INDEPENDENT EXTERNAL AUDITORS DID AN ADEQUATE JOB UP TO AUDITING STANDARD to audit the books of fiscal year 22. So I believe that that is an accurate number there. As far as the revenues and expenditures, there are there are going to be some variances that I've noted. as I've continued to dig deeper UNFORTUNATELY SOME OF THIS INFORMATION HAD TO BE PUBLICED BEFORE YOU KNOW, SOME OF THOSE THINGS WERE UNCOVERED. So I think there is going to be some variance that you're going to see in the fiscal year 22, 23. But I think it's For the better, I think we're going to be much better off than this 501 or 511, but not, I don't think we're going to be positive. I think it'll be probably a little closer to what we experienced in fiscal year 22. So, Again, in my full disclosure, I didn't have you know, any input on the assumptions and methodologies of developing this budget. So I think that it's still maybe a little loose than I would like it to be. |
| 00:36:39.89 | Councilmember Hoppen | And do you have... recommendations of how to fix that as we finalize our budgeting process. |
| 00:36:47.53 | Chad Hess | more time. I know we're starting to get up against the clock with preparing the fiscal year 23-24 So, But realistically, a good 22, 23 budget is kind of the starting point, again, for the next fiscal year's budget. Um, So there are a few areas that I think could be refined even more within the 22, 23 budget. |
| 00:37:13.44 | Councilmember Hoppen | And are you able to do, do you have the authority to make those refinements that you believe are important? |
| 00:37:19.48 | Chad Hess | Yeah, I think with some additional time, I can certainly refine those projections as requested or as needed. to make sure that we have a better understanding of the revenues and expenses of the city. |
| 00:37:33.45 | Sarah Mastrianni | Thank you so much. The vice mayor had a question. |
| 00:37:37.03 | Vice Mayor | Yeah. It just dovetails with Council Member Cox's question about sanity testing the claims. At the end of the day, if you are in budget surplus, you add cash to your savings. So if you're making more than you're spending, you're adding some. |
| 00:37:49.75 | Craig Hill | Yeah. |
| 00:37:51.74 | Vice Mayor | And if you're spending more than you're earning, your bank balance at Bank of America goes down. So just retrospectively looking over the last several years, you have evidence on the cash, uh, balances in our accounts. that would lend credence to Councilmember Cox's inquiry about the confidence of the actual. So at the end of the day, that's the test, right? |
| 00:38:16.01 | Chad Hess | Yes, is the cash balance. I do have a visual representation of cash balances over about a 13 year period. Can I bring that forward? It wasn't part of the original. council packet, but I do have insight on that. um, overall cash projections over the last- |
| 00:38:34.82 | Vice Mayor | I mean, I'm sure we'll see it eventually, but just speak back. |
| 00:38:36.73 | Chad Hess | Yeah. |
| 00:38:37.09 | Vice Mayor | Just speak of it. Is cash coming in or is it? |
| 00:38:38.20 | Chad Hess | It's cashier. Overall, cash has been growing within the city of Sausalito. There's been a increase in cash available I think right now it's sitting around 20, around $25 million across all funds, all sources. . Operating cash, which is kept at the Bank of Marin and LACE over the last. FIVE YEARS HAS NOT DIPPED BELOW 8 MILLION. There's ebbs and flows with it, but overall cash has been growing over the last 13 years in the analysis that we did. |
| 00:39:16.14 | Vice Mayor | And then to Councilmember Cox's also inquiry accuracy of reporting. We've chosen. actually in the purpose of transparency to separate out from the general fund a variety of funds that are actually Um, we often think of as For example, our parking fund is a separate fund So revenue from parking does not show up. in the side that you're showing previously, It doesn't cover general revenue funds. |
| 00:39:47.02 | Chad Hess | Correct. |
| 00:39:47.25 | Vice Mayor | And yet, and so when you're saying, for instance, our fund balance, It was in there somewhere, an eight, $9 million. That doesn't include the million and a half dollars that's in the parking fund generated from parking revenue. The city manager raised the parking revenues last year on special holidays and weekends. We made more money and yet that did not show up. |
| 00:40:09.11 | Chad Hess | in the general fund, that is correct. It doesn't show up in the general fund until those resources are transferred over in, perhaps a subsequent budget year. Um, Go ahead. |
| 00:40:20.51 | Vice Mayor | You know, looking at the No, that's right. |
| 00:40:22.96 | Chad Hess | I would say looking at last year as well, there was growth within the enterprise funds as well, mainly the parking fund. MLK had a really good year. Old City Hall is starting to come back as well with the tenant in that space back to kind of that full percentage of rents. So there were you know, positive increases in fund balance and cash within those enterprise funds. Um, But yes, there are a lot of revenue sources that are within the city that aren't necessarily captured in the general fund. Um, they need to be taken as kind of a whole with all of the funds or reporting units of the city. |
| 00:41:02.28 | Vice Mayor | And then we also have additional cash beyond what we call general fund reserves. that are sitting in some of these funds. that are just as accessible for general purposes of the city. as best serves. That is correct, yes. |
| 00:41:16.64 | Chad Hess | Thank you. |
| 00:41:16.72 | Vice Mayor | Thank you. |
| 00:41:18.01 | Sarah Mastrianni | Okay, and I just again, thank you for being here. We're really lucky to have you chat and it's great to be working with you again. really wonderful to have you be the bearer of good news when we're talking about our numbers since this has been a period of concern where we're all trying to figure out how to solve our structural deficit. With that in mind, given that we were spending just about 140,000 in our deficit balance, I just would like to understand. You know, over the last 18 months, we've heard a variety of numbers with regards to what our standing structural deficit looks like, whether it's $5 million, then down to $3 million due to changes that the city manager suggested we make. Now it's looking like we're looking at a number close to 1 million. What are your projections for what our structural deficit is, as it stands now and going into the next fiscal year. Is it still at that 1 million number? Is it going to be less? |
| 00:42:06.15 | Chad Hess | for fiscal year 23. |
| 00:42:08.70 | Sarah Mastrianni | Yes, and projections for 23-24. |
| 00:42:11.79 | Chad Hess | Yeah, so... It's probably less than a million dollars if I had to, if I had, you know, a crystal ball looking out as far as 24, I haven't dug out into those numbers. Um, But overall, I think your sales tax revenue is bouncing back. I think your transient occupancy tax is coming back. Property tax has that usual slight increase across the board. And I think parking revenues are increasing. Rents are still flowing in with the MLK as well as the old city hall. So I, I, I BELIEVE IT'S PROBABLY LESS THAN THAT MILLION DOLLARS. However, I do want to caution that as that AS THE PENSION UALS START TO INCREASE, AND THERE'S A SLIDE LATER ON, we still have to be cognizant of of those, you know, increasing pension costs up until it peaks in about 2030, 2031. |
| 00:43:07.51 | Sarah Mastrianni | And that's not with the additional 2 million that was resolved as a result of the audit. |
| 00:43:13.67 | Chad Hess | No, no, I think it's still, they're still increasing. There's still increasing pension costs, but I think you're still probably in that half a million range maybe slightly less for fiscal year 22, 23. |
| 00:43:26.34 | Sarah Mastrianni | Okay, so... |
| 00:43:26.68 | Chad Hess | I haven't dug too deep into 24 yet. |
| 00:43:28.64 | Sarah Mastrianni | Your guess is that our structural deficit stands at around half a million at this point. Thank you. |
| 00:43:32.70 | Chad Hess | That'd be my guess for general funding. |
| 00:43:33.34 | Sarah Mastrianni | I'm sorry. one. than we had expected and what we had been hearing. So that's great. I know Councilmember Hoffman had her hand raised and the vice mayor had another question as well. |
| 00:43:41.66 | Chad Hess | Thank you. |
| 00:43:42.30 | Unknown | Thank you. |
| 00:43:42.66 | Sarah Mastrianni | So, |
| 00:43:42.96 | Unknown | I have a follow-up on the internal service fund that you said you do internal service funds |
| 00:43:46.73 | Chad Hess | Yeah. |
| 00:43:47.38 | Unknown | Thank you. |
| 00:43:47.40 | Chad Hess | Bye. |
| 00:43:49.97 | Unknown | that were closed and put half a million back into the budget. So, Mike. |
| 00:43:54.08 | Unknown | Oh, my God. |
| 00:43:55.16 | Unknown | Yep. Go ahead, sorry. |
| 00:43:56.78 | Unknown | Bye. |
| 00:43:57.85 | Unknown | Yeah, that's okay. I just, the explanation of what were these internal service funds and why were they closed? And what was the, I mean, what was the- |
| 00:43:58.07 | Unknown | Thank you. |
| 00:44:03.75 | Chad Hess | Yeah. There were two funds that were closed. THE VEHICLE REPLACEMENT FUND WAS CLOSED AS WELL AS THE EMPLOYEE BENEFIT FUND. Um, These funds weren't being used as, A traditional internal service fund They were being utilized more as maybe like a capital reserve fund. Um, SO THEY WEREN'T REALLY MEETING THE DEFINITION OF AN INTERNAL SERVICE And they weren't being adequately funded. So at the end of the day, if they weren't being utilized as gaps, INTENDS THEM TO AND THEY WEREN'T BEING ADEQUATELY FUNDED there really was no purpose and it complicated the overall reporting of the city. So by closing down those two, and bringing those resources back into the general fund. There were about 347,000 of resources back to the general fund. Um, It's going to simplify reporting going forward. AND JUST MAKE make the government reporting a little bit less convoluted. Um, So overall, they weren't being utilized as they should. And They're just they're just not they don't add the value if you're not going to fund them. |
| 00:45:22.66 | Unknown | Okay, thanks. So I had one more follow-up and that was about So we just... We just heard that I think earlier you said that our deficit was going to be at about $147,000. But then what I heard was for 22, 23. |
| 00:45:42.17 | Chad Hess | 22, 22, so 2022. |
| 00:45:42.22 | Unknown | . |
| 00:45:45.37 | Chad Hess | 21-22 was 147,000 in the general fund. FOR FISCAL YEAR 22-23, It's right now projected to be a half a million. |
| 00:45:55.53 | Unknown | Okay. |
| 00:45:56.01 | Chad Hess | I think it'll be slightly less than that. But again, I haven't been able to dig too deeply into the assumptions and methodologies Of all of the accounts, I did a very high level review If council and management would like me to dig deeper and kind of rework some of these assumptions and methodologies that that is possible to be done, it would take it would take a little more effort. |
| 00:46:21.39 | Unknown | Okay. |
| 00:46:21.47 | Chad Hess | in time. |
| 00:46:22.55 | Unknown | Okay, thank you for that clarification. I think. |
| 00:46:26.51 | Sarah Mastrianni | Thank you. |
| 00:46:26.65 | Unknown | Thank you. |
| 00:46:26.68 | Sarah Mastrianni | Thank you. |
| 00:46:30.18 | Sarah Mastrianni | Thank you. Okay, yes, of course, Councilman Kellman. |
| 00:46:33.22 | Councilmember Comin | Thank you, Chad. I appreciate the interest in simplification. I want to come back to question that the vice mayor asked around the parking fund. So my understanding from prior experience on the finance committee is that while the, revenue for the parking shows up in the parking fund, the expenses show up somewhere else. And so we're not actually balancing that action within City Hall. I'm wondering if you can comment on that and maybe make some recommendations either now or later date, you're okay to say at a later date, on better ways to manage some of our funds, perhaps reorganize some of them so that there is increased clarity. |
| 00:47:04.60 | Sandra Bushmaker | to say, Elizabeth, |
| 00:47:13.85 | Chad Hess | Yeah, I think that is a bigger discussion than what I'm prepared for right now. Um, I know there was a change in the parking fund that was discovered The last time that I was engaged with the city. that expenditure that I noticed was being recorded to the general fund was the credit card processing fees. for parking, the parking revenue. So, I recommended to the previous finance director and staff that they they match those expenditures with the revenues to give a more true accurate projection of of that net. income. So that was one change that you will see in the coming slide. The parking fund has requested a increase in the expenditure budget. And it is due to those credit card processing fees that are now being coded. are recorded in that fund. Um, I believe there is some staffing some salaries and benefits that are hitting the general fund that are related to parking. I don't have a super deep understanding of that at this point. |
| 00:48:23.78 | Councilmember Comin | Yeah, Chad, you're correct, right? So the individuals who do monitor our parking and handle the meters aren't captured in that. The expense for that is handled in a completely different part of our budget. And so I don't think it's a clear and accurate picture of revenue, particularly from something that is a potential new revenue source. And so I think we need to smooth that out so we understand what the real opportunity is. |
| 00:48:33.53 | Unknown | Yeah. |
| 00:48:43.03 | Chad Hess | Yes, I would agree that those parking meter agents or enforcement agents, their wages and benefits should really hit that parking fund. to give that true expense of, okay, what is the true net income of that enterprise endeavor? |
| 00:48:58.59 | Councilmember Comin | Thank you. |
| 00:48:58.63 | Vice Mayor | Thanks, Gemma. |
| 00:48:59.94 | Chad Hess | YOU'RE WELCOME. |
| 00:49:01.12 | Vice Mayor | Thank you. |
| 00:49:01.14 | Sarah Mastrianni | He's married. |
| 00:49:02.26 | Vice Mayor | Yeah. The term structural deficit is a potent name. I want you to comment on whether your perception is that The city of South Salado has been tweaking its expenses to manage its variations in revenue and thus adjusting the level of service, reducing that number of employees reducing raises or foregoing raises in reaction to that. in a way that has been |
| 00:49:26.86 | Unknown | Thank you. |
| 00:49:29.17 | Vice Mayor | And I think that's a good question. And I think that's a good question. that, uh, apart from having multiple years of deficit, sort of, maintaining stability and the cash balances that the city has, the reserve accounts in total. |
| 00:49:48.80 | Chad Hess | Yes. Let me Let me. pause my share real quick. And I want to grab I'm gonna grab a chart that I have available. that I think will help EXPLAIN AS FAR AS LIKE THE CASH POSITION. Let me just track that down. because I think it is really an interesting view |
| 00:50:30.75 | Unknown | Thank you. |
| 00:50:30.76 | Chad Hess | that exhaust mode here. Overall, the cash balances have been gradually increasing over the period of analysis. I think the city with its structural deficit has YOU KNOW, HAS HAD THEIR UPS AND DOWNS, BUT OVERALL, Cash has been increasing within Um, you know, over the last 13 year period. You guys can see my screen, I believe, and I have my cash graph up here. Um, WE WENT BACK AND DID AN ANALYSIS OF CASH BY RESTRICTION OR The green is operating cash. The green is your project restricted cash. So over here, this would be like BONDED DOLLARS FOR I believe the police station and the fire department over here. This would be your COPs or parks and then the sewer fund as well. Um, And then the pension and OPEBs, THEY CAME IN IN ABOUT 2015, AND THAT'S GOING TO BE THIS LIGHT BLUE HERE. And then the debt service funds is restricted for debt service. But overall, looking at Um, past friends. I mean, it has increased significantly over what we were seeing in 2015. Um, cash balances have been increasing. They are slightly down from their peak in 2009. Um, But again, the city just went through a pandemic Um, You know? There were some challenges with decreased revenues as far as sales in transient occupancy taxes. But, um, hope the city is doing the best they can to reduce those expenses and and maintain a strong task position. Um, Thank you. |
| 00:52:22.61 | Vice Mayor | I don't know. hypothetical the city had had perennial multi-year deficits then the green and this graph would be going down right |
| 00:52:30.47 | Chad Hess | That's correct, yes. |
| 00:52:32.18 | Vice Mayor | And it's going |
| 00:52:33.92 | Chad Hess | it's holding its own and slightly increasing if we focus on just the green. |
| 00:52:33.97 | Vice Mayor | Yeah. |
| 00:52:41.46 | Chad Hess | Thank you. |
| 00:52:43.43 | Sarah Mastrianni | We had any further questions from the council before we move on to specific fund discussions here? I do have a follow-up. Okay. |
| 00:52:49.83 | Unknown | So to follow up on that, and you can leave that graph up. Bye. |
| 00:52:53.00 | Unknown | Sorry. |
| 00:52:55.72 | Unknown | So even though even though we keep talking about a structural deficit, we're spending more than we're earning. Would you agree that that's true? |
| 00:53:08.93 | Chad Hess | It depends on what fund you look at. Again, because of the multiple funds of the city, You're not getting a complete look when we talk about just the general fund. Um, I'll bring up the audit report as an example. |
| 00:53:28.90 | Unknown | Okay, we can also follow up on that question the next time if you're not prepared to answer it. But yeah, yeah. What we understand and what we've been presented with is that The budget and expenses that we have has been out of balance with our Earning. regardless of what's going on with segregated you know, segregated funds in specific, segregated money in specific funds, because there are specific reasons why we have all these different funds. And they, you know, they service different things and they have different requirements on them. We can use some funds for some things and not for other things. So, I mean, that's a follow-up question. I think I understand what Vice Mayor is getting at. but when you talk about, I have a savings account or I have money that I can use, and it may be expanding, but is it good fiscal policy this is what I want to talk about the next time if you're the presenter when you come back. what is the distinction between a structural deficit and good fiscal policy? as opposed to our cash basis, maybe changing across all of our funds. So I think that's an important distinction. And I understand the vice mayor's point and I take it, but that's something based on |
| 00:54:35.72 | Unknown | So, |
| 00:54:44.78 | Unknown | some of this new information that we've got tonight. based on quite a wide swing and assumptions and reporting from last year to now based on an audit that has recently been done. you know, Not unhappy. The wrong position is better. |
| 00:55:05.29 | Unknown | Is that better? |
| 00:55:05.93 | Unknown | But I want to make sure that we're not digressing into bad habits that got us to a structural deficit. So that's my concern. I would ask that we'd be prepared to talk about that in depth at the next iteration. |
| 00:55:20.00 | Chad Hess | I THINK THAT'S UNDERSTOOD. |
| 00:55:22.03 | Sarah Mastrianni | Okay, so let's move on to the specific funds, because I know you have a number of slides here. |
| 00:55:27.34 | Chad Hess | Yeah. Yeah. So as we start to look at the other funds, THIS IS A BUSINESS a kind of a projection I did update the beginning fund balance numbers. based on that audit report. And then we've got our OUR UPDATED REVENUES, EXPENDITURES AND THEN THIS COLUMN HERE IS OUR OUR PROJECTED, OH, HANG, I GOTTA GET MY, SCREENS BACK. where they need to be. Here we go. So our projected kind of revenues over expenditures Here we've got that general fund again, that half a million dollar deficit. Um, Now, if we start to look at some of our other funds, we were throwing our stuff for revenue funds have a projected increase of about 600,000. across all of those spectral revenues that are coming in that have kind of unique designations. or purposes of those revenues. So, Within the general capital project fund, THIS NUMBER IS A LITTLE BIT CONCERNING, SHOWING THAT NEGATIVE 250, don't have a whole lot of confidence that we're going to spend that full 500 $5 million in the current fiscal year. I suspect this will be less than what we're showing. But again, I think a deeper analysis needs to be done. Um, As I came into this, it was later in the process and I didn't have enough time to fully digest all of the activity that's in that general capital project fund. Um, If we look at Next, our debt service funds, um, you know, we've got adequate reserves here and this deficit is mainly due to the timing of of property tax settlement. That's the 2006 bond for the police and fire station. That debt service fund has its own separate levy that is above and beyond Proposition 13, which limits the property tax collection ability of the city. Um, So this is a fund that I think needs just to be aware of, but knowing that as those bond payments increase for the 2006 B bond, And we're going to talk about that in a future slide that that does have a separate levy that's that's above and beyond. the general fund levy. Looking at the sewer fund, we do have deficit spend there. A lot of that is due to some unexpected repairs that took place during this year. But again, that has a very healthy net position and cash balance within that sewer fund. And it is expected that some years there will be deficit spend within that enterprise fund. Um, The long-term trend of that sewer fund is very positive. but you will have some years where there are more, more expenditures due to unforeseen repairs. of that infrastructure. OLD CITY HALL FUND IS COMING BACK. THAT HAD A ROUGH YEAR THE PRIOR COUPLE YEARS WITH THE PANDEMIC. But as I noted earlier, that that fund is now you know, growing is providing positive cash flows and revenues to the city in the past. The Um, Well, City Hall Fund would always make an annual transfer to the to the general fund to help pay for some of those other city services. This was really an investment that was made by the city to provide it with an alternative revenue source THROUGH THOSE RENT. and, I think there's an opportunity here to increase the transfers out of this fund. As of when I pulled the report just a couple days ago, there was about $300,000 sitting in that fund. THAT WOULD BE AVAILABLE TO SUBSIDIZE THE GENERAL FUND TO SOME DEGREE. Um, provide some some resources. Um, That may be an opportunity to simplify fund structures in the past with this old city hall fund, since there is no debt associated with that. that could almost be simplified and brought into the general fund fold as just a revenue source within that fund. It doesn't necessarily have to be an enterprise fund or segregate it out because that debt has been paid off. And there's no longer a requirement to segregate The MLK fund is doing well. That fund does have the COP bonds within it and that is included within our projection. Yeah. OVERALL, THAT FUND IS DOING WELL. THERE STILL IS THE INTERFUND ADVANCE BETWEEN THE general fund and MLK fund. And I think there's an opportunity to start paying that back in maybe a more accelerated fashion. So, The parking fund here, it is showing a deficit here because of, um, I think there was an increased expenditure over the prior year and taking off some additional revenues that were available in there. That transfer is going to the general fund as it always has. I DON'T FIND ANYTHING CONCERNING ABOUT THAT DEFICIT SPEND IN THAT REGARD. Um, The Bank of America Fund is now collecting rents Um, and as I understand going forward, the rents will be increasing. in order to make that debt service payment We still have workers compensation and general fund. I think there's some more refinement that needs to take place on these to remaining in service. two remaining internal service funds Um, There were some expenses that were coded into the general fund. THAT PROBABLY NEED TO BE MOVED OVER TO THIS FUND. BUT THEN ALSO WHEN WE REALLOCATE THOSE FROM THE GENERAL FUND, IT WOULD PROVIDE A REVENUE SOURCE for these internal service funds. These are reserves for future claims or claims that will be paid by the city for injured employees We're going to be talking about it. A lot of those expenses are already recorded on the books as an accrued liability. Thank you. |
| 01:01:36.30 | Unknown | Yeah. |
| 01:01:36.41 | Chad Hess | So I need a little more time to dig into those worker compensations and general liability funds. So I wouldn't be too alarmed with these at this point. I think they're overly The deficit is overstated as I dug deeper over this last week. The OPEG crust is the section 115 crust, and that there is no additional funding from my understanding this year, but it is projected to... TO RECOVER TO SOME DEGREE WITH THE IMPROVED MARKET. THAT FUND DID HAVE A ROUGH YEAR LAST YEAR WITH THE stock market. A lot of these are there. They're still very conservative investments, but that that fund did take a take a little bit of a decline in revenue. due to the changing market. Um, Overall, the non-general fund does show a deficit and that is mainly attributable to these internal service funds as well as As the the capital project fund. THAT I DON'T FULLY UNDERSTAND AT THIS POINT, BUT BASED ON THE HISTORY THAT I'VE SEEN, I don't project this to be an accurate deficit. Um, But I don't have a better answer on that one yet. There's a deeper understanding that needs to be had on that, unfortunately. |
| 01:02:58.24 | Chad Hess | I'M LOOKING FOR, ACTUALLY, LET'S PAUSE THERE AND OPEN IT UP FOR QUESTIONS. Bye. Thank you. |
| 01:03:05.57 | Sarah Mastrianni | the Canton. |
| 01:03:05.74 | Chad Hess | Thank you. |
| 01:03:06.26 | Sarah Mastrianni | Just in the interest of time, because we have two other business items, why don't you move forward to looking forward and then we'll do our questions at the end and then we'll take the comment. |
| 01:03:10.32 | Chad Hess | Thank you. Yeah. So looking forward, I wanted to provide a visual representation of debt service payments and pension obligations that are coming up. |
| 01:03:12.40 | Sarah Mastrianni | Thank you. |
| 01:03:22.37 | Chad Hess | This graph here is your governmental debt service funds. So there are FOUR BONDS OR FOUR DEBTS THAT ARE WITHIN THIS GRAPH THE 2006 A, series bond will mature in fiscal year 26. THE PAYMENTS ON THAT BOND ARE GOING TO INCREASE where they are now up to about 809 000 over the fiscal year so The 2006B, which is the capital appreciation bond, which has a maturity of fiscal year 2041. Its payments will start in fiscal year 27 of about 1.1 million. And it will increase through 2041 to 2.4 million over the life of that bond. This bond does have a separate levy. So that debt service levy will increase over time to fund those bond payments. And that, as I said previously, is in excess of the proposition 13 limit on property taxes for the general fund. The Southern Marine Fire Protection District has a debt service payable to the Southern Marine Fire Protection for previous OPEBs of $58,000 a year. THROUGH 2042 AND THEN THE DEPARTMENT OF Boating and waterways has a level payment of about 72,000 per fiscal year through 20. 26. So that one will mature. Um, With some good news, if we start looking at the business type debts, you will see a unique thing happening in fiscal year 31. That is the final maturity of the 2006 certificate of persist pay, which is being paid out of the MLK fund and that financed the, the park improvement. um, |
| 01:05:06.05 | Unknown | Bye. |
| 01:05:06.74 | Chad Hess | That has a level payment of around $620,000 per year. So as that debt service falls off in that year, there will be an additional $620,000 available for So, the use of the city to fund other projects and improvements. all. Right now, a lot of those revenues are being, you know, put towards that debt service payment, but as that maturity Um, gets closer and finally falls off the debt service role there will be additional resources to the setting. The Bank of America loan is a level payment of about $158,000. That matures in fiscal year 2035. And then there's a Uh, The Steward Revenue Bond has a level payment of about $350,000, which matures and OT 45 as well. The next slide I want to bring forward is the CalPERS unfunded actuarial liability payment. This is the UIL payment that takes place I believe we prepaid during the year. So we make that one large payment in July of every year. Um, There is a peak coming in 2031 is when that peak hits. So right now, our UAL payment is just slightly over 3 million. but it'll increase to about 300. three and a half million. Um, in 2031, 2032. So again, we've got some increasing expenses there that we just need to be aware of and and plan for. And I think we have adequate cash reserves to kind of get us through that storm. Um, But overall, I guess the point I wanted to make is, you know, right now it is, it is. Oh, oh. We've got some large expenses coming up, but over time, I think the pastures will become much, much greener. AS THIS UAL PAYMENT PEAKS WITH THOSE CALPERS CLASSIC EMPLOYEES COMING OFF OF ANNUITIES as well as those debt service payments. I'm falling off. all. with that, I'll open it up for for for question |
| 01:07:14.07 | Sarah Mastrianni | Thank you very much. Councilmember Kelman, you had a question after the specific funds. |
| 01:07:20.31 | Councilmember Comin | Yes, hi, Chad. Thank you. Just I'll run through a couple of fast ones. So I was on the finance committee and we worked together in 2020 and 2021. We talked about updating that view of the funds instead of having a fund number, which is related for the accountants, the encumbrance status instead. You know, I was going to ask that if you're smiling. |
| 01:07:41.08 | Chad Hess | Yes. Yep. I remember that. |
| 01:07:42.50 | Councilmember Comin | I remember that. Thank you. shown somewhere or Just note that, I suppose. |
| 01:07:47.66 | Chad Hess | Yeah, just, just, yeah, I'll get rid of the fun numbers. Um, This slide was prepared, you know, Yeah. I remember that conversation. We will get rid of those fund numbers going forward. |
| 01:07:59.02 | Councilmember Comin | Okay. And the importance obviously is this sort of second question, like the enterprise funds, must the enterprise funds be spent on related enterprise activity, right? If I heard violence funds are encumbered, it can only be used and restricted by statute. |
| 01:08:09.43 | Unknown | I don't know. |
| 01:08:09.97 | Unknown | of the |
| 01:08:10.06 | Chad Hess | It's fun. |
| 01:08:10.46 | Unknown | Thank you. |
| 01:08:14.09 | Councilmember Comin | The enterprise funds are not, but We need to understand that when we're making policy decisions. |
| 01:08:18.94 | Chad Hess | Yeah, certainly. So the old city hall fund, those are city source revenues. They can do what they choose. Um, The MLK fund as well, there is the debt service payment within that MLK fund. So you've got to just ensure that there's adequate resources within the MLK fund to make that bond payment. The parking fund, that's city source revenue. You can certainly transfer that to the general fund or the capital projects fund. AS YOU SEE FIT. AND THEN BANK OF AMERICA FUND, THAT IS KIND OF AN INVESTMENT OF THE CITY. Um, though as long as that debt service payment is made, you could take excess resources of that fund and transfer it to the general fund or capital projects fund. The only fund that you've got to be careful of is that sewer fund. you know, those sewer dollars are collected through rate payers And that really the intent of that is you need to charge what it costs to operate that sewer fund and maintain the infrastructure of that sewer fund. Um, So that's the one fund you've got to be cautious of that, that those revenues really should stay within the sewer fund to FUND FUTURE IMPROVEMENTS AND REPAIRS AND MAINTENANCE OF THAT FUND. Um, Yes, yes. some of those dollars are taken off, then it's assumed that you're overcharging the sewer users. |
| 01:09:42.79 | Councilmember Comin | So you anticipated my question around MLK, Bank of America, there's debt on those. Yes. |
| 01:09:47.63 | Chad Hess | Amen. |
| 01:09:47.97 | Councilmember Hoppen | Yes. |
| 01:09:49.28 | Councilmember Comin | But what's a way to represent this? So instead of saying, hey, look, your cash flow positive, your Bank of America fund, we have debt service on that. Same with MLK. We don't capture the general obligation bonds here, which you didn't mention is entering a second tranche. and is going to become very expensive for our taxpayers. in the second series of |
| 01:10:08.99 | Chad Hess | Thank you. Yeah. B bonds, yep, those do increase to about 2.4 million. at their final year of maturity. um, |
| 01:10:19.74 | Councilmember Comin | Well, they're going to go to 17 million before we start paying them down. Right. |
| 01:10:22.66 | Chad Hess | Yeah. The outstanding balance will, yes, yes. I think overall, I think that Series B is about 25 million total payments over the life of the bonds. um, Okay. |
| 01:10:35.74 | Councilmember Comin | Okay, but this has a clarifying question. Is the general liability fund litigation, what are these internal service funds? |
| 01:10:42.78 | Chad Hess | Thank you. Yeah, so the general liability is gonna be like your property casualty. So if somebody gets hurt on city property, Um, WE WORK WITH THE BAY CITY'S Insurance Authority, don't quote me on that entity name. I can look it up. um, But it's a problem. COOLING OF RISK WITHIN THE BAY AREA. SO WE PURCHASED AN INSURANCE POLICY THROUGH THEM. And they provide us with an actuarial report of the Claims that have been incurred but not yet settled. SO WE RECORD THE LIABILITIES IN THOSE FUNDS AND THEN AS THOSE PAYMENTS GET MADE, WE RECORD THEM AS EXPENDITURES IN THE FUNDS, BUT THEN AT THE END OF THE FISCAL YEAR WE GET AN UPDATED REPORT. So, Some of those expenditures that we're showing in those funds, like that $560,000 you know, the 554,000. It's already been booked as a liability. THOSE CAN BE A LITTLE BIT misleading within those internal service funds. Ultimately, to answer your question, it's resources that have been set aside claims that have already been incurred but not yet paid. Um, Same with the workers' compensation fund. We've got several employees. that had been injured in the line of duty. And they estimate those future obligations to, for the workman's comp claims and medical care for those employees. AND THERE'S ALWAYS, THERE'S USUALLY FUNDING THAT GOES ALONG WITH IT, BUT IT ISN'T CAPTURED ON THIS REPORT, UNFORTUNATELY. |
| 01:12:20.01 | Sarah Mastrianni | Thank you. |
| 01:12:20.50 | Councilmember Comin | Thank you. |
| 01:12:20.52 | Sarah Mastrianni | Thank you. |
| 01:12:20.53 | Councilmember Comin | Thank you. |
| 01:12:20.55 | Sarah Mastrianni | All right, thanks, Jim. I'll hold off on other questions. Thanks. We have other questions from members of the council. Okay, I had, oh, did you have a question, Vice Mayor? No, no, go ahead, by all means. |
| 01:12:32.31 | Vice Mayor | I was just gonna follow up on the council mayor Kellman's question. |
| 01:12:33.31 | Sarah Mastrianni | Thank you. |
| 01:12:37.38 | Vice Mayor | funds like the Thailand Waterfront Fund, which is where rents from Spinnaker And it's also you got Collabar paid. those funds get put into that account. They don't show up in our general fund ledger. but they are actually income of the city. So they're missing from the revenue of the city. Like if you had a business, it'd be as if You made business by washing by mending shirts and washing shirts. And you had, but you only were reported on, on washing shirts and a separate account for mending shirts. And that didn't show up. That's the difference between our general, the way we've chosen to do this by setting up all these funds is that we're different business lines of activity, And we're mixing up liabilities, right? as the council member pointed out, if, if MLK tenants stop paying rent, We still have to pay our debts. It's an obligation of the city. It's not, we can't. Uh, forego and absolve ourselves of that debt. It's a debt of Sausalito. And yet, where We're not aware of that. And it's not reported, nor is the income actually reported on our general ledger. Thank you. |
| 01:13:49.30 | Chad Hess | In the general fund. |
| 01:13:49.36 | Vice Mayor | IN THE DEPARTMENT. |
| 01:13:51.27 | Chad Hess | It is reported, but again, it's in a separate fund and it makes it kind of diluted. |
| 01:13:55.57 | Vice Mayor | in terms of clarity, however, you were doing this for best accounting principles, would it be helpful? and is it straightforward to simply report on the revenue of the city. in the expenses of the city and the liabilities of the city. |
| 01:14:09.83 | Chad Hess | In aggregate, if we combined all of the funds into one column, here's the revenue, here's the expenses, And then here's the outstanding liability I mean, from a and public standpoint, I think it would make it a lot easier to understand than THE GAP REPORTING THAT, is published once a year and audited by the external auditors. It's, it's, it's, it's, It's complicated stuff. It's very, very Not intuitive. for the average user. |
| 01:14:43.75 | Councilmember Hoppen | May I ask a follow on to that? But, but, as you've so thoroughly reviewed tonight, a lot of our funds are restricted funds. And so we don't have access to those monies for general fund purposes. And so is it not important to carefully track the monies available to meet our day-to-day needs as opposed to the monies available for you know, that are subject to special rules regarding how they are collected and how they are spent. |
| 01:15:23.10 | Chad Hess | So these special revenue funds, the bulk of these special revenue funds need to be tracked as a special revenue fund. AND A LOT OF THAT IS BECAUSE OF THE RESTRICTIONS ON THOSE DOLLARS. But I think it's just a Thank you. it was... the city needs to have a better or deeper understanding of what are those restrictions in finding applicable uses to spend them on. Um, One example is this library capital improvement fund. I look back and there's been very, very little activity in that fund from 2013. So we've got, I mean, it's not a ton of money, but there's dollars sitting there that could be expended. if we found an appropriate project. Um, So the special revenue funds need to be kind of separated in their original funds. But I think from an overall reporting, you know, I think some consolidation could be had within the fund structures to make it simpler and make it more user friendly. So, because a lot of these, even these enterprise funds, like the old city hall and you know, eventually the DMLK fund could be consolidated and rolled into The general fund. Even perhaps parking. |
| 01:16:45.61 | Councilmember Hoppen | I mean, we're going to be I do agree with you that once the debt, as with Old City Hall, is... is. paid then there's no need to maintain that as a segregated fund. It's interesting you mentioned the library fund because the library is sorely in need of upgrades and repairs as I understand it. So it surprises me to hear there's money not being spent in a special fund. |
| 01:17:11.44 | Chad Hess | And I don't have the history on that. I was curious why it hasn't been sent for a number of years. Yeah, I think it's just there's not that institutional knowledge that that's aware of that. But yeah, I think from what I know, it just needs to be spent on library improvement. As well as the stair fund, You know, it's not a lot of money, but there's 160,000 in this stair fund that dates back. to the early 2000s regarding some litigation. I don't have the history on that. Um, But I think just having a deeper understanding and spend these restricted resources in a way that meets that restriction and try to spend those first before we spend our unrestricted dollars. |
| 01:18:01.06 | Councilmember Hoppen | I thank you. I I think as long as we continue to abide by generally accepted accounting principles and are able to. with meet the requirements for a clean audit. I endorse your or the vice mayor's proposal to come up with some form of simplified reporting that makes it clearer and more transparent to our public what our true financial condition is, and that avoids this misnomer of, having a structural deficit if indeed we don't. But I'm now very curious to understand to what extent we did, to what extent we still do, and how to avoid that moving forward. And so any advice you can offer on that, I would appreciate. and not right the second necessarily, |
| 01:19:02.70 | Unknown | Thank you. Thank you. Thank you. |
| 01:19:03.63 | Chad Hess | Yeah, I think as we move forward together, I think there's going to be a it. deeper conversations around this topic. the vice mayor and I have been meeting fairly regularly to dig deeper and we're coming up with strategies to explain the city's finances in a more meaningful way that the general public can understand. And that's our goal is to create better transparency, better understandability of our financial report. |
| 01:19:33.58 | Councilmember Hoppen | You guys certainly hid the lead tonight. So I'm thrilled for the great news, but... Yeah. |
| 01:19:39.91 | Sarah Mastrianni | Thank you. |
| 01:19:39.93 | Unknown | Thank you. |
| 01:19:40.03 | Sarah Mastrianni | Bye. |
| 01:19:40.15 | Unknown | Thank you. |
| 01:19:40.85 | Councilmember Hoppen | Thank you. |
| 01:19:41.46 | Sarah Mastrianni | I had a question and so did the vice mayor and then we'll come back to you. |
| 01:19:42.25 | Councilmember Hoppen | Yeah. Bye. |
| 01:19:44.35 | Sarah Mastrianni | So yeah, lots of great hidden good news in this budgeting report. So again, thrilled to have you Chad. Thanks for agreeing to come aboard and work with us on this. So I was also curious, we just passed Measure L, so we'll see an increase in our sales tax. And we have on here capital projects funds and Measure L was supposed to be dedicated specifically to infrastructure and maintenance. So does any of that go into the capital projects fund or Is it a separate source of revenue? |
| 01:20:14.38 | Chad Hess | So right now, measure... Measure O is the existing half penny sales tax is my understanding. |
| 01:20:22.53 | Sarah Mastrianni | Yes. |
| 01:20:23.01 | Chad Hess | Um, |
| 01:20:23.60 | Sarah Mastrianni | And April 1st is when Measure L will become... |
| 01:20:23.92 | Chad Hess | that. April 1st. Okay, awesome. I, you know, I was away from the city for a little while, so I wasn't fully caught up on that. |
| 01:20:25.99 | Sarah Mastrianni | Exactly. |
| 01:20:33.08 | Chad Hess | That's good to know. Right now measure O is receded in IN THE GENERAL FUND, AND THEN IT'S TRANSFERRED OVER IN FULL TO THE GENERAL CAPITAL PROJECTS FUND. Um, I, I, I think it would be, much easier going forward if that was received directly within the general capital projects fund. If that's the intent of of the city is to spend it ON INFRASTRUCTURE AND CAPITAL-RELATED PROJECTS. I think it would just make make it a lot more easy to follow those dollars if they were recorded directly in that fund. But that is not, I don't know. don't know if that was accounted for in the mid-year. That's a really good question if that starts April 1st. I don't know. |
| 01:21:18.15 | Sarah Mastrianni | We'd look into that. That would be helpful to understand. And it would be helpful |
| 01:21:20.92 | Chad Hess | Thank you. |
| 01:21:22.46 | Sarah Mastrianni | if, and I think some of the other council members spoke to this, but, and you mentioned it yourself, Thank you. I would I would love to take a look at what is eligible for which of these specific funds and perhaps have that at the presentation of the budget to see where we might rather than pull from our general fund pull from where we can these funds and then as well figure out some sort of bigger picture of what our actual deficit looks like when we consider What, what, projects are available for each respective fund, like the stair fund, as you mentioned, could we use that for the North Street steps specifically, for instance, because we know we've had issues there. What are the legal requirements for each of those? |
| 01:21:59.13 | Chad Hess | Yeah, and that is, That's something we'll have to do with some additional research on and dig back into the archives to figure out like what was the intent of those dollars. Let's find a project that we can use them up and then we can close that fund down and, and, and move forward. So that's on my list of research topics. And I think we can bring that forward to the council in a coming meeting. |
| 01:22:22.31 | Sarah Mastrianni | Yeah, because if it turns out we do indeed have less than a $500,000 structural deficit within our general fund, but some of that fund can be accounted for from these special revenue funds and we weren't aware of it, then we've already found more to plug that structural deficit. So think about that in advance of our next reporting. That would be really helpful. Okay, so I'll go to the vice mayor and then Councilmember Hoffman. |
| 01:22:36.91 | Unknown | Yeah. |
| 01:22:44.39 | Vice Mayor | it. just the telly I saw in a document is that, the funds that are unrestricted, meaning that the city council can just, they're set up by city council like different savings accounts. account. to buy a new car, an account to buy a new boat. or count to send the kid to, college, there's segregated accounts They have different names, the general fund, the general capital project fund, the general liability fund, the Bank of America, the Tidelands Fund, Old City Hall MLK. parking are the unrestricted funds. And those add up to roughly $13 million in cash currently in those funds. Is that right? |
| 01:23:18.96 | Chad Hess | I'm not. Thank you. Yes, I believe that is correct. |
| 01:23:23.03 | Vice Mayor | And then there is a, a semi-restricted meaning that they have We're not sure exactly what the rules are, like the library fund, library capital improvement fund. It wasn't funded with a special tax. It was segregated. and you have to do some more work apparently figure out what that is. but it may not have been touched for some time. 10 years. |
| 01:23:43.16 | Chad Hess | That's correct. Yeah. With some of those historical funds, I think we just need to do our due diligence and make sure that we honor that restriction. Um, BEFORE WE EXPEND THEM. |
| 01:23:55.68 | Sarah Mastrianni | Thank you. |
| 01:23:55.72 | Unknown | Thanks, Councilmember Hoffman. Sure, thank you. So I think I can't remember, somebody up here said, used the term the misnomer of the structural deficit. Are you, that was Councilmember Cox. So are you, is it you're reporting tonight that there is no structural deficit? |
| 01:24:13.69 | Chad Hess | There's there's it's not as it's not as severe as It was originally communicated. |
| 01:24:20.94 | Unknown | Okay, so the answer to that is yes. |
| 01:24:23.09 | Chad Hess | Yeah. |
| 01:24:23.17 | Unknown | It may, depending upon how you look at money and how you address these different segregated funds about, I guess, |
| 01:24:23.19 | Chad Hess | Yeah. |
| 01:24:33.16 | Unknown | No, sorry. Structural deficit is structural deficit. It's money in, it's money out. And it's expenses versus... |
| 01:24:36.44 | Unknown | Yeah. |
| 01:24:39.27 | Unknown | what our revenue is, right? |
| 01:24:42.58 | Chad Hess | Yes. Inflows minus outflows. |
| 01:24:45.33 | Unknown | Okay, thanks. So, I just want to be clear on that, that we're still... still in a structural deficit. The structural deficit is projected to continue certainly for next year. And then as we see these debt servicing mechanisms that still are ballooning with regard to CalPERS, with regard to the graphs you just showed us for government debt service, That structural deficit is going to continue and depending upon what our revenues are. going forward. into at least 2030, if not beyond. |
| 01:25:16.70 | Chad Hess | Correct. You know, I think I think 2030 is is when the the CalPERS UAL. 2031 is when the UAL payment peaks and then it starts to decrease And then that is um, when the COP bonds are maturing. COP bonds are 2030. So I think we're not out of the woods yet, but I think we are quickly approaching better times. And with measure L passing, I think that helps increase revenue as well as the discussion that's going to take place later tonight. on other possible revenue sources I think we'll get there. I think if we can raise some additional revenue, we'll certainly be able to provide those quality of life services to the community. |
| 01:26:02.23 | Unknown | Okay, thanks. I I've been on the, on and off the finance committee over the years that I entered that we, I don't know, we paused, we disbanded or something last year. So we no longer have. a finance committee. My recollection is, and for your own information, because I may have some institutional knowledge, that these separate funds were set up because about the 2008, 2009 time period, we had a very small reserve. And so these separate funds were set up to segregate money so that when we had a need for these different these different city you know, enterprises or, you know, so old city hall, that's something we need to maintain because we're the landlord. The other funds that were segregated out So the MLK fund, that's a segregated fund because we know we have a debt service payment. The parking fund, I think it was a way to keep track of revenue, even though the expenses on that are booked someplace else. They probably should. also be booked against the parking. The Bank of America Fund, same. We have a debt service on that. So in a way, it was a way to segregate and provide stability for you know, these needs that we knew were going to come up. We didn't know when. but we knew that we were going to eventually need capital improvements at Old City Hall because a, you know, we have to maintain it. Same thing for MLK, same thing for some of these other things. So, I mean, there was a rhyme or reason about why we had these different funds. Some people, more statutorily required, some you know, were things that were created to provide, like I said, stability and transparency about what we're spending money on. And also... you know, to create that, ability to have that money there later when we needed it instead of having a very low general fund and not being able to service an emergency. So I just add that to you for your edification. I think the answer to that is fairly easy to say to find, you just need to talk to some people that were around back then. So anyway, I wish you luck on your... research projects between now and our next meeting. |
| 01:28:18.41 | Chad Hess | Thank you. |
| 01:28:19.05 | Unknown | YOU'RE OKAY. |
| 01:28:20.48 | Sarah Mastrianni | Okay, and then I just, given everything that we've heard around a more optimistic budget picture, do you feel like if we take a closer look at some of these funds and then give an aggregate look at our overarching revenue and where we stand with the general fund, that it's, you're optimistic that we'll be able to come up with a balanced budget? |
| 01:28:43.62 | Chad Hess | I need to take a deeper look before I say yes on that. I think there's hope, but I don't want to give a definitive yes at this point. Okay. |
| 01:28:53.68 | Sarah Mastrianni | Thank you. |
| 01:28:53.69 | Councilmember Hoppen | I'm sorry. |
| 01:28:53.73 | Sarah Mastrianni | Thank you. |
| 01:28:53.83 | Councilmember Hoppen | Bye. |
| 01:28:53.88 | Sarah Mastrianni | with any |
| 01:28:54.61 | Councilmember Hoppen | Yeah, just one more. May I ask, so I've just been reviewing again the staff report for this evening, and I don't see anywhere in here where it actually calls out what you announced to us during your presentation, which is that we've reduced our deficit spending from over 2 million down to 100 and some thousand dollars. May I ask in the future that information like that actually you did a very thorough job of conveying all the different fund balances and the pluses and the minuses and how it's changed. but, For purposes of transparency to the public, And because this was actually really good news, I was serious when I said we buried the leaves. if you could convey that kind of information as part of the staff report, I think that would be really helpful. Thank you. |
| 01:29:49.15 | Chad Hess | Point taken, yes. Yeah, I agree. There should have been a deeper narrative of that. I know the graph is in there, but it's not. It didn't draw your attention as it should have. |
| 01:30:00.62 | Councilmember Hoppen | I mean, I reviewed this, I'm not an accountant, But I do read things pretty thoroughly and I completely missed this. fainted when you made this announcement during your presentation. So. |
| 01:30:15.69 | Sarah Mastrianni | She did. |
| 01:30:15.98 | Councilmember Hoppen | and, you know, |
| 01:30:16.03 | Sarah Mastrianni | I saw. |
| 01:30:19.05 | Chad Hess | I will make sure that that is better documented in the language of the staff report going forward. |
| 01:30:25.51 | Councilmember Hoppen | Thank you. I'm confident you will bring us more good news, given your good work so far. |
| 01:30:25.53 | Chad Hess | Thank you. |
| 01:30:31.39 | Chad Hess | I will do my best. Thank you. |
| 01:30:33.19 | Sarah Mastrianni | Do we have any further questions from the council before we open it up to public comment at this time? Thank you so much, Chad. This has been fantastic. And I think we're all. thrilled with some of the great surprises that you brought forth this evening so i'm going to go ahead and open it up for public comments city clerk would you please manage the public comment for us. |
| 01:30:52.28 | Walfred Solorzano | Let's see, seen none. |
| 01:30:54.17 | Sarah Mastrianni | Okay, no public comment on our budget. Wow, okay, no, I thought I was gonna say, Damien's here. |
| 01:30:58.06 | Damian Morgan | I was gonna say. I'll bring you cars. |
| 01:31:04.65 | Damian Morgan | Thank you. I'm Damian Morgan here. |
| 01:31:11.19 | Unknown | Your time is up. I'm going to go. |
| 01:31:15.66 | Damian Morgan | I don't know. half a second, right? |
| 01:31:17.50 | Unknown | Thank you. |
| 01:31:17.54 | Damian Morgan | Yeah. I'll come back later on to committee meetings and committees and also hope it go up in time. My question under the budget for Mr Hess. Uh, and the, um, City Council. two and a half years ago, there was a committee that was started. Um, I guess you can call it equity committee. Um, And I'm wondering in the budget, Mr. Hess, if you see a line item. that, um, I imagine unrestricted funds for, um, I don't know. just equity reasons, Um, business opportunities, uh, maybe rental space for businesses, opportunities, um, You know, I imagine you can answer that or maybe the council too regarding in the budget for equity reasons. Thank you. |
| 01:32:33.93 | Sandra Bushmaker | Thank you. |
| 01:32:36.36 | Walfred Solorzano | No, sorry, we have some speakers. Julie Vieira. Julie. |
| 01:32:44.58 | Julie Vieira | Hi, Julie. I have to say that I am pleasantly and happily surprised. I think I was right behind Councilmember Cox when I almost fell off my couch this evening. when the information was brought forward about the budget, In my position, I have heard from many, many residents, as I'm sure the city council has, about the budget. And so I'm so happy. I know we have a ways to go. but it sounds much better tonight than it did two months ago. And even when we had the state of the city, Um, It sounds so much better than what Chris Zapata and our mayor and vice mayor were, were giving us that day. Thank you. Thank you for all your work, Chad, and for finding these and for taking care of this for us. Thank you. |
| 01:33:44.28 | Walfred Solorzano | Next speaker is Roger Powelson. |
| 01:33:52.65 | Jeffrey Chase | Ahoy, this is not a Roger Paulson, that's Robbie's dad. But I'm at his house in Nevada. This is Jeff Jacob Chase. Thank you for... For the transparency and in disclosing these budget items, I'd like to break something down. In the interest of equity, I'll second. the earlier speaker There was a million and a half dollars spent on the, on the houseless encampment and, for the 30 people who collected $18,000 That would have worked out to $50,000 a piece if the money would have been spent. for housing. immediately instead of in a reactionary way, to the actions of the camp cormorants one, two and three. So the equity battles in Sausalito have been on pause for a little while. The police... with their $7 million budget, have been acting quite a bit differently. And much better. much, much better and sold I commend them. And... the education from the people at the camp. that was given. But there will be more and the battles to come. nonviolent battles in Sausalito. You know, the battles, the biggest battles that we fight are against ourselves sometimes. that when this happens, that the, council and the mayor and the city react a little more quickly this time. and not after it's already begun. And I'm specifically talking about a community garden. in South Dunphy Park that the park is still fenced off And there's been no plans on opening that up. There was a budget. and the budget was supposed to have been spent |
| 01:35:56.84 | Walfred Solorzano | Thank you. Next speaker is Vicki Nichols. |
| 01:36:04.31 | Unknown | Hi, good evening. Damon's comment made me curious. I didn't see any slides tonight, but I'm sure it probably was in too deep of a level, but there used to be line items in the budget that were non-departmental. where you could see some of the funding that may have been done for committees or different organizations, et cetera. I wonder if that funding has all been wiped because of this, serious action that needed to be taken to balance the budget or to get the deficit down. But I would like to see in the future, as part of this report, what the city is continuing to fund under non-departmental As reference, when I was on the board of the Sausalito Historical Society years ago, The city used to give us a little stipend because we were paying for the employees that were working in the ice house. And that was a city benefit. So those kinds of non-departmental expenses, I would be curious to see. Thank you. |
| 01:37:10.51 | Walfred Solorzano | Next speaker is Ray Withey. |
| 01:37:16.10 | Julie Vieira | I can't. |
| 01:37:16.33 | Walfred Solorzano | And... |
| 01:37:16.35 | Ray Withey | Hi, can you hear me? |
| 01:37:16.87 | Walfred Solorzano | Bye. |
| 01:37:18.43 | Sarah Mastrianni | Thank you. |
| 01:37:18.44 | Julie Vieira | Yes. |
| 01:37:18.97 | Sarah Mastrianni | Thank you. |
| 01:37:19.12 | Ray Withey | Yeah, sorry about the video. I wasn't expecting to get on, so... Um, sorry for the video. Glad to hear about the results of 21-22. That's very good news. It gives you more flexibility. I want to make a couple of points of clarification. Chad, hi. You don't know me. But I actually, for some of the, lots of the questions the council has asked you, I have, I could give you the information. I have the organizational memory here and will be happy to help. Something I want to make one point, you need to study council, Chad, the enterprise funds more. I'd like to see P&L and balance sheets for the funds because what you'll find is, vice mayor, the parking fund revenues show up in the transfers in. And any transfers from MLK revenue you choose to capture come in in the transfers in. What you need to do, council, is decide what is going to be your policies for setting fund balances for those enterprise funds, and then what is going to be the transfers into the general funds? They were designed as revenue sources, figure out and use them appropriately. Same with internal service funds. Council Member Hoffman is absolutely correct. A lot of things were set up for specific reasons. I know them. I'd be happy to give you a fast track so you can research. And then finally, I'm sorry, I'm running out of time. It is not, I think the celebration is a little premature. And Chad was absolutely correct in not answering the question, are we out of the structural deficit? No, we are not. I think you need to actually start projecting, looking at some three year, five year financial forecasting starting with the department sizes you need. not the reduced expenses you have now. Thank you. |
| 01:39:25.46 | Councilmember Hoppen | May I ask a question of a community member Withy? |
| 01:39:32.11 | Sarah Mastrianni | Yes. |
| 01:39:32.48 | Ray Withey | Thank you. |
| 01:39:32.52 | Sarah Mastrianni | Thank you. |
| 01:39:33.07 | Councilmember Hoppen | Mr. Withy, could you please finish your comments? |
| 01:39:36.95 | Ray Withey | Yeah, sure. So look, why you have... The city manager correctly is part of your financial strategy to get out of the, the deeper financial crisis you were in, there's been a lot of restructuring of staff positions. There's been frozen positions in the police department. There's been a significant reduction of expenses. But you've got to ask the question, what is it as the baseline real expenses you want? I mean, half of the, some of the expenses are due to the fact you can't hire in many positions. You've had lots of vacancies. So in the looking ahead at the next year's budget, you've got, and then three and five year financial projections from that budget based on various scenarios. you need to actually understand that to really have a fully serviced police department, you need to actually understand that to really have a fully serviced police department, you need to spend more money than was spent. It will be spent in 22-23. And then that's the basis that you need to expand. Okay. And so anyway, there's, |
| 01:40:51.61 | Sarah Mastrianni | Bye. |
| 01:40:55.12 | Ray Withey | There's, so it's not... |
| 01:40:56.40 | Sarah Mastrianni | It's not a celebration. Okay, former mayor with you. I'm going to have to ask you to wrap it up so we can move. Yeah. So, |
| 01:40:57.19 | Ray Withey | celebration. Careful. Yeah, so I'd be happy to help anyway. |
| 01:41:05.85 | Sarah Mastrianni | Thank you. |
| 01:41:05.87 | Ray Withey | Thank you. |
| 01:41:05.87 | Councilmember Hoppen | Thank you. Thank you. And can we make sure that we send these gentlemen each other's contact information so they can. Con, con. Thank you. I see someone nodding. Thank you. |
| 01:41:17.87 | Sarah Mastrianni | Thank you. I think we have one more hand raised at least. I see Sandra Bushmaker for public comment. |
| 01:41:22.90 | Councilmember Hoppen | Thank you. |
| 01:41:22.91 | Walfred Solorzano | Yes, under Bushmaker. |
| 01:41:23.98 | Sarah Mastrianni | I'm sorry. |
| 01:41:24.02 | Sandra Bushmaker | Hi, Sandra. |
| 01:41:24.41 | Sarah Mastrianni | Thank you. |
| 01:41:24.50 | Sandra Bushmaker | Thank you. Good evening, everybody. Good evening, Mayor, Councilmembers in public. I do agree with Ray Withey. While I'm happy to hear about the more optimistic lookout with our budget situation. This is no time to celebrate. We have a lot of work to do. We've got to rebuild City Hall to be what it should be. not necessarily what it is. And so I really would like you to How can I say, keep your belt tightened. and you know continue to do what you need to do to make our city function like it should be. And we can't afford to be spending willy nilly when we've got to rebuild city hall. And I think that's a very important, goal for us to have at this point. Thanks. the |
| 01:42:16.96 | Sarah Mastrianni | Sandra. Do we have any further public comment at this time? |
| 01:42:21.64 | Walfred Solorzano | No further comment. |
| 01:42:22.68 | Sarah Mastrianni | Okay, so I will go ahead and close public comment and then bring it up to the Council for discussion and action. who wants to get a start, vice mayor, please. |
| 01:42:30.94 | Vice Mayor | So indeed Ray Bethany is right, absolutely. just to start with the little detail, the parking fund Uh, the whole way we can have budget deficits and yet still have cash increase in our, total cash increases because there were transfers. but they still are. the money making activities of the city that improve our cash balance. when, we looked at that chart that Chad put up there. What you see is, a city that is adjusting its spending, with a priority of keeping healthy cash reserves. we've been keeping and maintaining healthy cash reserves, slowly building them up actually. over the last several years on average. That was what that green graph was Chad shows it's been a priority of the city. a really good financial priority. And to do that, we've been I was just... with the identified as my colleague Jill has identified being cost-cutting and right-sizing the organization for the revenues that we actually have coming in. And so. You can always create a structural deficit by hiring more people than you can afford. And our revenue, our current revenue structure in the second half of this meeting are going to be additional revenue structures. but our current revenue structure can only pay for the organization we have. a smaller police force than we want. fewer city employees at city hall. Uh, overworked employees. So the question really is about what level of service we are willing and we want to provide and how we're going to pay for it. My only concern about the term structural deficit, it becomes used as a hammer against any spending whatsoever, even spending that's helpful in achieving the goal. the, The thought then is in the second half of this presentation, I think we wanna look through these additional revenue measures not as a solution to some existing problem that we have a whole way of the data. but as a way of improving our level of service. to the level that we aspire to that our community members want. And so that's the, I hope what we'll hear in the second half of the presentation. presentation. |
| 01:44:39.07 | Sarah Mastrianni | Thanks, Vice Mayor. Thank you. |
| 01:44:42.14 | Councilmember Comin | I'm sorry. |
| 01:44:42.22 | Sarah Mastrianni | to go. |
| 01:44:43.10 | Councilmember Comin | I wholeheartedly agree with everything the vice mayor just said. We need to get together and decide as levels of service. We need to focus on our staffing. We need to be cognizant. We need to pay down significant amount of debt. those general obligation bonds are very, very expensive for us. We have had a habit of borrowing a 5% and then letting it sit in the bank at 0%. And we have a large amount of deferred maintenance, $18 million in deferred sewer maintenance. So for me, yes, the great point, you just reduce your spend and then your structural deficit goes away. does not mean we were offering the level of service that I think that we need to be So I think that should be the task at hand, different projections of that level of service and how we're going to handle some deferred maintenance across these areas. Chad, I don't need to go through it all right now, but in 2022, last April, I sent you a lengthy email with some ideas for how to streamline reporting. And actually, you had given me a proof of concept on an approved cash buy fund for the Treasury report. that would show how the cash balance by fund has changed over the last quarter, year to date, and over the last 12 calendar months. But it's only a proof of concept. So I would urge you to continue with that proof of concept. At the same time, let's figure out what reports we really need and the detail within the reports. For example, let's decide whether we really want a P&L on some of these funds. And do we really need to see a breakdown of utility expenses by department on some of these? Those are reports for senior management. So if something's only budgeted for something like 5K a year, let's consolidate those. Let's have some easier reporting. One idea might be to over consolidate by specify a trigger such as a variance from an expected result. And the beauty of doing something like that is that it enables us and drives us to define specific metrics for success. evaluate whether we're meeting those metrics. And then if we're not, identify the reasons why we have missed those And some type of quarterly basis, not every six months, not every year. We should talk a little bit about expectations around timing of the reporting. So quarterly reports for corporations are typically two to three weeks after the end of the period. I think you told me that's not a realistic goal for the city. We have third party providers of data who lag, but it would be good to know. And then I think at the end of the year, We need to be really firm on our forecasting. You mentioned already that we forecasted wrong and that creates all sort of policy implications. What opportunities do we have to compare forecasts on budget to actual, as the vice mayor actually suggested, So we can get a sense of whether or not the department is on track. And if it's not on track, I think The message to the city manager is that let's bring our department heads in and understand why that is. Some future policy direction on consolidating funds, et cetera, that I'll just send you on email. But thank you. Great work. I know you had a lot of information, and I know you have a lot of good ideas already in progress. So we want to see them. So thanks a lot, Chad. |
| 01:47:46.95 | Unknown | Thank you. |
| 01:47:48.61 | Councilmember Comin | Thanks. |
| 01:47:48.98 | Unknown | Thank you. Council Member? Yeah. Yes, please. So, yeah, thank you for this, I guess, presentation. I mean, not I guess, but I think, thank you for the presentation. I think, you know, for some of us, it created more questions than solved, especially because we didn't have, you know, the benefit of a I mean, I had some notice that there was going to be some movement, but not an explanation to the extent that we've had. So I'm happy that we've had this during this presentation. I still have a lot of questions about how we're defining things. And there seems to still be um, you know, on the council here, how we're defining a structural deficit and how that's going to affect our overall financial stability going forward, especially in the next six years. and how we can address some of these big to me, some of the biggest risk issues we have, which is these ballooning, debt service requirements that we have and how we can the strategy for lowering those instead of being at the mercy of those fluctuating rates and some of those debt service, Um, that. or debt service requirements, right? We know that, especially with our unfunded pension liability, that changes depending upon the return. And so how do we, you know, we've done some, some effort to smooth that with our pension trust fund, but, I think it's, we probably underfunded it. And so we still have a lot of risk and liability on that and uncertainty. I look forward to the next presentation at the end of April, This is a question for whoever. It's either Chad or our staff. Will the auditors be presenting that or will Chad be responsible for presenting that? And I would request that the auditors present it. |
| 01:49:34.60 | Chad Hess | Auditors will be there. |
| 01:49:35.69 | Unknown | Okay, so Chad, is this the last time we're going to see? |
| 01:49:35.73 | Chad Hess | Bye. Okay, so Chad is insane. |
| 01:49:39.29 | Unknown | See you. We're going to see you again. |
| 01:49:40.15 | Chad Hess | I- I'll be at the meeting on April 25th for sure. |
| 01:49:44.81 | Unknown | Okay, good, thanks. Great. Okay, thank you. So, you know, cautiously optimistic, but I don't, you know, probably not as optimistic as some other people up here on the council, but I think I think we're moving in the right direction. I think we need to stay disciplined for the next few years. And then I think we can breathe a sigh of relief. agree that we also need to take a strategy look at how our departments are um, how our departments are configured, And we've done a lot of hard work on that in the past two years and restructuring some of that, I think, to the benefit of Sausalito. So I think it's a good path that we're on. And, you know, we need to we need to adhere to the this strategy of fiscal discipline, at least for the next year. frankly, four or five years. So thank you. And I have a clear, we're not voting on anything. There's no, this is just to approve a resolution. Yes, we do have a resolution. |
| 01:50:39.38 | Sarah Mastrianni | just to approve a resolution. Yes, we do have a resolution. We have to approve a resolution which just authorizes the adjustments. So based on authorizing those. Yeah, yeah. Okay. All right. Thanks. Okay, council member Cox. Thank you. |
| 01:50:51.53 | Councilmember Hoppen | Yeah, I endorse everything that my fellow council members said. I also endorse the public comments of former mayors with the and Bushmaker. I definitely think we have to continue to keep our belts tight. I'm just relieved. that the, hole that I thought we had to dig ourselves out from is not nearly as large. as we had believed. which makes planning. a lot. easier. We really have stretched our staff capacity to the maximum to maintain a basic level of service, and I don't think it's sustainable, we have a city manager is working 24 seven I don't think that's sustainable, so I do want to certainly. temper our decisions with our updated information and establish, as the former mayor recommended, realistic baselines that enable us to maintain an acceptable level of service without Um, rendering our positions so difficult to fulfill that we have a difficulty filling them. So I think we have to really be Um, we now have the opportunity to prioritize, and establish a baseline of the type of of the basic level of service we'd like to provide and how we'd like to provide it. and then plan. from there. I endorse everything. that Councilmember Kelman said about more standardized frequent reporting. I don't know. I confess I don't know what your tenure with the city is. consultant. but I'm hoping that we can hold on to you long enough to make an appropriate transition to the person that we're hiring. so that we can put into place some of the measures that you're recommending and so that you can finalize some of the research that you've undertaken and properly convey the knowledge that you have worked so hard to accumulate in order to, appropriate reporting moving forward. I'm very appreciative of that. but want to see us maintain that momentum to the extent we're able. Thank you. |
| 01:53:27.31 | Sarah Mastrianni | Thank you. |
| 01:53:27.34 | Councilmember Hoppen | Thank you. |
| 01:53:27.35 | Sarah Mastrianni | Thank you. |
| 01:53:27.37 | Councilmember Hoppen | So, |
| 01:53:27.42 | Sarah Mastrianni | Thank you. |
| 01:53:27.44 | Councilmember Hoppen | All right. |
| 01:53:27.56 | Sarah Mastrianni | my comments. Thanks. Great. Thank you. I just want to say I'm really impressed by my fellow council members and the attention given to all of the required Changes we have to make to the deficit and what's happening with our budget. I thought everyone had really insightful comments, questions and considerations for Chad and I really appreciated the effort that Chad put in to respond to those and also going forward for our upcoming report on the 25th. I think we'll have a lot to look at. I think, you know, what we heard from the council members and I endorse all that all that's been said. you know, that we need a better, clear information on some of the fund reporting and transparency around that. And what kind of reporting do we really need? What does that look like for P&Ls and a breakdown of expenses? And what does that look like in the context of what level of service do we want to consider? So I think there's homework for Chad and then there's homework for all of us on the council to really dig deep into how much are we able to provide and what does that look like and what do our What do our staffing numbers look like with regards to the funding that we have? There's some really great news tonight, but as some former mayors pointed out and members of the council noted, As well, we can't count our chickens before they hatch. We do need to do the hard work of looking at the next steps here. I think that there's been a lot of great points brought up. I think it's pretty clear in terms of standardizing the reporting and answering some of the questions we had Chad, please let me know if there's something that's still on the table that you wanted to clarify with us before you come forward for the 25th anything. |
| 01:54:58.07 | Chad Hess | not at this point, but I know that we'll be We'll be conversing with city manager and there'll be several communications going out between now and then so. |
| 01:55:08.25 | Sarah Mastrianni | Okay, great. Yeah. And, you know, just reiterating, how are we defining a structural deficit? Because I think that's something that's really important for us to consider. What are our levels of service? What is the cost of sizing for revenues? How do we do a better job of more clearly? reporting this information in the context of some of these funds. I think we all are on the same page on a lot of what we'd like to see on the 25th and are looking forward to that. So I'm going to go ahead and make a motion. to approve the Resolution authorizing adjustments to the fiscal year 2022. 2023 operating in capital. Budget. And staff, please advise me to do. We also need a motion for the general fund revenue and just that's that's it's just the resolution resolution. OK, so I'm going to make a motion to pass that resolution. |
| 01:55:48.18 | Councilmember Hoppen | The only resolution we have. |
| 01:55:52.01 | Sarah Mastrianni | Okay. All in favor say aye. Aye. Okay, great. So that motion passes unanimously. Thank you very much, everyone. Thank you, Chad. a great extensive conversation. So now, We will move on to business item 5B and continue a discussion of our budget and revenue. Yes, please. Can we take a two-minute break? Yes, we can take a bio break. Two-minute break. |
| 01:56:33.13 | Unknown | you |
| 01:56:33.93 | Sarah Mastrianni | Sarah Mastrianni, Ph.D.: Can start Okay alright, so we will now return to session, thank you for bearing with us those who are in the audience and watching at home, so we will now. Sarah Mastrianni, Ph.D.: Open it up for business item five be which continues our conversation on the budget, and this is a discussion on fiscal sustainability and potential revenue prediction and I believe this is presentation from both the city manager and DHA associates so please. Get us started. |
| 01:56:58.12 | Chris Zapata | Thank you, Mayor, members of the council, members of the public. Can you hear me council members? |
| 01:57:03.00 | Sarah Mastrianni | We can. |
| 01:57:03.76 | Chris Zapata | Right. Thank you. Mayor Blasen, you're correct. There's more work to do. I wanna kind of address some of that conversation that just went on and the progress that was noted and the challenge is still ahead. The question was asked, are we in a structural deficit? Let me give you an answer. In 2011, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, and 22, you projected a structural deficit. and seven of the first 13 years you had a structural deficit. in 18... 19 and 17. you had more revenue than you had expenses that you did not have, but the last three years, you have had more expenses and less revenue. To cut to the chase on that, we are in a structural deficit scenario that I think is important. And even though there have been progress made, and I wanna thank Chad for his information, but I also wanna thank Vivian Chu, Without an audit, you can't really... into what you think are your best numbers. So I thank them very much. I thank you for your questions, your comments on the last slide, but I also wanna note Even this year where we're projecting a better year, we're still spending more than we're taking in. You saw we have increasing bond payments. You saw we have increasing pension payments. We know we have deferred maintenance. We know our insurance utility costs are going up. We know we have personnel costs that we can't keep stagnant or we lose people or can't attract people. There are emergencies. And if you're talking to financial institutions, you really wanna show them a reserve level that continues to grow, not one that recedes. So lots to do. And certainly, you have asked from the community that will come. So we'll see how this all plays out. But I think the note that I take on all this is there's challenge for the next five to seven years. You know, after that, Sassalou is in high clover. And we'll be able to do many, many things after these debts are payment debt payments are paid off and some of these obligations to pension start to recede. So it may sound tone deaf, but we're going to talk about revenues and I want to be clear, I'm not asking you all tonight to raise taxes. I'm asking for the city council to consider some of the things that may be possible in upcoming years. to help with our infrastructure. to help with their service levels, to maintain our personnel, and to actually, if you all want to do more, with more programming, more services, or more assistance to the community, have the resources to do that without continually digging into your reserve. So can you put the slide on for me, please? |
| 01:59:46.03 | Chris Zapata | We have with us tonight, Craig Hill with NHA Advisors. One of the things we try to do is get help where we need help. Chad has an example of that. He helped us a year ago. He's helping us right now. He's on contract with the city through the city manager's authority. At some point, we'll bring him forward. Craig was hired with city council authority to look at revenue. We started this conversation on February the 10th. We weren't able to complete it. So we're back here tonight to try to move it forward as best we can. But I wanna create some opportunity or some Some information has set the stage for the conversation that Craig can have with you. Next slide, please. |
| 02:00:28.77 | Chris Zapata | So I just told you we had a structural deficit. If it's lessened, it's lessened, and that's very good news. And that's a lot of hard work and a lot of sacrifice and some decisions that were hard to make that you made. So thank you. Obviously we're continuing the February 10th session. You know, one of the things that I keep pointing out is we have such an aging community 1893 incorporation and it shows a lot of the things here need a lot of loving care. And we certainly have deferred infrastructure that we pegged through some estimates last year at about $99 million between roads, streets, sidewalks, and buildings, and what's under the ground. Obviously, we know that you saw a chat slide that showed the rising cost in debt, the rising pension costs, and the operating costs I'm referring to are things like our personnel costs, our utilities, our insurance, things of that nature. And then if we are in a tight budget it always makes it difficult to keep employees and to recruit employees and so those are why we are looking at revenue at this moment next stage next slide please As part of that, the city council directed me to come up with a plan. Uh, to reduce the structural deficit but to explain it. And so, you know, we have an ongoing structural deficit We've used one-time monies to plug budget holes. We have increasing pension costs, which I referred to We have no opportunity to refinance our debt, our long-term debt. We have what I call a volatile revenue stream that's reliant on hotels, sales tax, and also our measure L, tuned to be measure L. And I talked about the aging infrastructure, and I talked about the general reserve fund lowering, but maybe that's changed a little bit based on tonight's information. But it's still a trend that has been not healthy in the sense that we continue to take it. and take from it every year based on our needs. Last year we projected taking from it, the year before we projected taking from it. And this year, if we're even and we do nothing, then we may not have to, but if we do stuff like projects or services or employees or deal with the increased costs, we're gonna have to look at it again, even though it's at a point where I believe that Thank you. It's healthy, but the trend is bad and that it keeps being drawn upon. Next slide, please. |
| 02:03:02.12 | Chris Zapata | So one of the things that the council challenged me to do was to come up with a plan to reduce the structural deficit things that we started with our cost reduction, stop spending. which I think is reflected in some of the numbers you just saw. start looking at how we become more efficient in collecting revenue. You know, how we start looking at diverse revenue. How do we look at our general fund reserve? and how we look at our pensions So in that plan, which is attached to the staff report, There were 13 recommendations on cost reduction. Six were substantially complete. On the revenue side, there were nine recommendations with four substantially complete. On the new diverse revenue, there were 19 recommendations five substantially complete And then on the policies to replenish the reserve fund, there were five and we've made one work at this time, which is we prepay our pension in advance so that we rely on savings in that regard. So that plan is broken in years 22, 23 and 24. Next slide, please. So why do we look at a larger pie or stable revenue? It's because we provide services and those services, which the public, which the businesses, which are visitors, which our neighbors expect require funding. And so to give you a sense of what our personnel costs are that provide services and never make that, a disconnected idea every time we hire someone We don't hire them for their, position, we hire them to provide a service whether it's a police officer, whether it's a building official, whether it's an accountant, whether it's a public works person or a librarian. Those positions provide services. And as you can note, total compensation for our employees which is shown as significant. A police officer's average compensation in Sausalito is $174,000. which includes a 10% overtime hours. But that's below market. a police sergeant, you know, it's $200,000 a year. building official, which is critical to things we do in Sausalito is $192,000 total comp. accountants, once you factor in benefits and all the things that we know are a part of their employment, $158,000. You know, public works maintenance person, $115,000. A librarian at a higher level is $128,000. So that gives you a sense of cost. And when you say we need to add bodies, if you added three police officers, You're looking at. $500,000. you You add three librarians, you're looking at almost $375,000. So employees who provide services cost money and so one of the things I heard earlier was you know minimum staffing levels and we need to figure out a baseline for what we want to do. I agree and in order to do that you got to figure out how to pay for them as well, and these are some of the costs that are reflected in those types of services next slide please. One of the things that we look at is, you know, we try to figure out the smartest way to buy something that, you know, we can pay for with some type of common sense approach. When we borrow money, we like to borrow money over the life of the improvements or not less than the life of the improvements. You know, when we talk about Thank you. refinancing You know, that's a tricky topic that, you know, takes a lot of work. And so we need specific. special help to do that and NHA Advisors has been asked to look at some long-term debt that may involve infrastructure, taking some of this money that you may get $300,000 this year, but if you net that out over 10 years, that's $3 million, and you can do a $3 million project. So looking at long term infrastructure, looking at our pensions, and that your advisors has been charged to do that. One of the things that I keep seeing in Sausalito and saying Sausalito is We need diverse revenue and we need predictable and stable revenue We don't have that right now. you know, the idea that, you know, we look at revenue, which, you know, is important to understand. We don't look at revenue from the standpoint of, you know, XYZ revenue measure does what we want to look at bang for the buck. We don't want to spend a lot of time on something that's not important to the community, nor do we want to spend a lot of time on something that doesn't provide a return for the work that's done. For instance, your sales tax increase on measure L that's gonna generate another 1.2 to $1.8 million a year. that was hard work, but that's bang for the buck. You got money and you'll get money for the next eight years as a result. You'll double the existing sales tax, but that's an example of trying to work smarter on things that make sense to the community, that make sense to the council, and they bring you bang for the buck. um, And then, you know, again, going back to raising revenue, there always is, Who pays for that? And obviously, the people that live here, people that work here. Dr. David A. The people that visit here the people that own property here. So these things have to be considered when you look at, you know, certain revenue options which we're going to talk about in the next. Dr. David A. segment of this presentation that NHA is going to provide but but again going back to what I believe is important is Diverse revenue and predictable revenue keeps you from peaks and valleys. And right now Sausalito has had peaks and valleys. Next slide, please. What would you do with new revenue? Obviously public safety and emergency services, property protection, infrastructure investment, Those would be the priorities that I would think you would want to do. And I think you really want Fiscal stability, but you want the shared burden between not just the people that live here, but the people that visit here, and people that come here, and maybe people that come to live here and build houses here. They should be looking at things that are important They're shared by them as well as by the residents that are already here. And some of these things can be made into smaller chunks, smaller vehicles. One of the things that you've approved is a business improvement district consultant. that's for a specific area where people within that district pay a little more to get more services. You know, I've been made aware by Councilmember Kelman of, you know, this climate this resiliency district to work on climate change. There's obviously infrastructure financing district that's part of the state law that allows for to be considered as part of an infrastructure financing district. And then there's things like basic, like maintenance and light districts we could look at as well. And then again, I go back to the beginning. If you look at the draft three-year plan, it's attached to your packet. You know, we're already out of 22. We're into 23 and we'll be into 24 sooner or later. But that's something that I really like you all to take a look at, give me feedback on, because to me, that's an important... approach to dealing with the structural deficit that we have had and that we will continue to have if we don't do things smarter in the future. Next slide. So I don't like to shy away from specific recommendations, but I keep hearing about police officers. I keep hearing about public safety being a real priority in this community, and it is in most communities. And the question is, when you have a sergeant that costs $200,000 and a basic officer that costs $170,000, how do you pay for them? who pays for them. And so one of the ways that we've seen happen, the city of Oakland, implemented a parcel tax, which they've dedicated to public safety. That's one way to do it. We've had this conversation with the Sausalito Police Association about their appetite for it The bottom line is to pay people market rates to keep our police services, to maintain public safety, We need to look at more revenue because, again, I go back to our budget, which we're saying is not quite a balance. It's a smaller structural deficit, but a structural deficit nonetheless with challenges facing us ahead. um, Again, the other piece of sauce, Lila, that I see is problematic is the diversity of our revenue streams. It's TOT, it's sales tax, it's district tax. Those are all very volatile forms of revenue. Property tax is not. A tax like a utility user tax is not. So I'm not saying that you should vote on this tonight, that you should, adhere to some of these thoughts that I'm talking about but they should absolutely consider when you would do that and that's why i put those dates up there 2024 to me is the best time to look at, you know, building community, understanding, awareness, and getting something on a ballot, if you so choose, and then seeing if the public does support that. So, One of the things that we see is we have a housing element that's requiring us to change Sausalito's housing. And part of that is when you build new houses, you get new residents, new residents create new demands on your basic infrastructure, whether it's your parks, your streets, etc. We need to take a look at, you know, what that might look like down the road if we're going to have new people coming into Sausalito paying impact fees to offset, you know, the... increase pressure on your facilities. And then in order to do these things, you have to do studies that show a nexus for what you're charging and what you're getting. And that's the first step you would take if you decide that you want to pursue these improvement districts or these impact fees. So next slide, please. So how this gets done is meetings like this, information that's clear and concise, policy direction the council |
| 02:13:20.44 | Chris Zapata | Certain taxes or impact fees require studies and certain taxes are voted on in a certain way. For instance, if it's a specific use like a police matter, it would be a two-thirds vote. If it's something that's for the general public, then it's a 50% plus one vote. And then all that has to be scheduled and there has to be education, there has to be work. So again, I'm not asking you to put something on the ballot next year. not asking you to put something on the ballot until 2024, but only after you've carefully considered what it is you think you want and what your revenue looks like. But again, I go back to the prior presentation. We still have a structural deficit. We have had a structural deficit and we're looking at increasing costs. So if you want to up the ante. not just survive, but thrive, it needs revenue. And I would recommend that that revenue go to, you know, or have a diverse component to it, And that the biggest need I hear in the public is we need more public safety. And if you need more public safety, then maybe you wanna do something with the police measure that could in fact give you the revenue to recruit, retain and grow your department in a way that makes sense to the community. Craig, you're up. Thank you. Next slide. So who does this obviously is the city council and the residents and the business, the property owners and the city staff. And so now we're going to segue into the NHA presentation to talk about the specifics of revenue that we didn't get to on February the 10th. Thanks. |
| 02:15:00.42 | Craig Hill | Good evening. Go ahead, next slide. |
| 02:15:06.98 | Craig Hill | Keep going. Okay. So as the city manager, kind of summarized The real thing that we're trying to, what I'd like you to be thinking about is, one-time revenues or unpredictable revenues versus an ongoing revenue stream. So when you think about how you're going to spend the money, And as the city manager said, as the community grows with the housing element and the requirements you have, what's the impact on your existing residents right now that one house that gets built. has one-time costs, whether it's inspectors, whether it's your permitting process, and you want to make sure that you've got cost recovery, right? You want to make that the resources that the city has that it takes to onboard that house, get fully covered, right? So you wanna make sure that your fee structures are right But you don't build a budget around that, right? That isn't something that you can rely on. You won't know how many houses come online each year. So as we get through this short presentation, I want everybody to be thinking about Okay, what is a reliable ongoing revenue stream that I can truly pledge to, as the city manager said, additional employees of the city, additional public safety, or even infrastructure versus, hey, it'd be great if all of a sudden this year we end up with $500,000 in impact fees that came in. Now let's move forward on park improvements or something that you can really do. So next slide. |
| 02:16:45.89 | Craig Hill | Sorry. |
| 02:16:46.26 | Unknown | Thank you. |
| 02:16:53.68 | Craig Hill | So what we're going to try to go through real quick is meeting the three objectives that we started on with this workshop, as the city manager said, I think last month. developing a fiscally sustainable budget through identifying ongoing or recurring reliable new revenue sources. and then looking at all reasonable options that you have. And Council provided a lot of input on the first part of this during the workshop. we've got some additional information and a little bit of theoretical. Next slide. So again, Congratulations on the recent passage of Measure L. Community definitely was behind it. anticipated to generate some pretty substantial revenues Again, sales tax, transaction and use tax is variable, right? It's all a function of how much people are buying. And so it is... With some reliance, you can budget against it, but you and we call it you need to take a haircut right you need to make sure that what you're budgeting in every year is something less than what in a best case situation it would come in at and. as Chad was talking about when going back and really looking at the 21-22 budget, right, your revenues under your sales tax came in higher than anticipated. So that was, That's a good fact. I will say that in practice with some of the other cities we're working with, When you ask about what policies can you put in place for predictability, WORKING WITH SOMEBODY LIKE your sales tax consultant, HDL, on a quarterly basis. does prove to really kind of keep the revenue side of the house Um, in fairly good order. There's no surprises if you're actually looking at it on a quarterly basis. They don't really focus at all on your expenditure side, but it could really help you on that. on the revenue side. Next slide. This should be no surprise to any of you in terms of what your budget process looks like, but we did want to bring to everybody's attention, including the community, really what the different buckets are that you get, right? Property tax, sales tax, TOT or transient occupancy tax or your big pots Things like business licenses, right? How do those get calculated? How much R should they be? What that's that's a policy decision that you all can make that'll dictate how much consistently the revenues will look like. Um, We have a lot of cities that look at their adjacent piers, right? Well, what is... What's Mill Valley? What's Quarter Madeira? What's San Rafael charging? What's San Rafael charging? what seems reasonable. wow, we haven't revisited our business licenses in years. You know, maybe that's something that can... you know, potentially bring in a couple hundred thousand dollars more PLANNING REVENUES FINES, AGAIN, SOMETHING TOTALLY UNPREDICTABLE. and fees for services. Those are all a function of cost recovery. Next slide. |
| 02:20:04.52 | Craig Hill | When we talk about new revenue sources, we're really talking about things that do need to go to the community and get buy-in, right? And if you're talking about a general tax, like your measure L. IT'S A SIMPLE MAJORITY. If it's dedicated to a specific purpose or becomes a special tax, then it's two-thirds. Hence, the general obligation bond is at two-thirds If you were going to dedicate it to safety than it would be two thirds. But it is something that you'll want to consider as you continue this conversation around whether to whether it be a special tax or an alarm tax or look at your fees. Fees are Clearly, and I know you've got the city attorney on the line, so I'm sure we're going to have some interaction with him tonight, but they're not classified as taxes, right? Fees are defined as a cost recovery mechanism. So it is important, and the city manager mentioned this, that if you're going to look at that as a revenue stream or a revenue source, that you'll want to do a nexus study. you'll really want to look at what does it cost the city to provide these services that have an offsetting fee? Next slide. |
| 02:21:23.51 | Craig Hill | As I mentioned at the very beginning, the way we really look at these things are what can be potential one-time revenues or what I'll call a transaction revenue, meaning a permit to pull a house or to build a house, excuse me. that you don't know when and where that's going to happen, but when it happens, there's a chunk of change that comes in and development, you know, commercial development comes into town. That's a one-time event that will potentially generate substantial dollars, but it's not something that we look at as what we call recurring. unlike a property tax or even for that matter, sales tax, people have to buy stuff, right? So you know that, generally speaking, sales tax is always going to be recurring. When we look at utility users tax, that was a conversation item that we were having earlier. certainly something that is a reliable revenue source that a lot of communities or critical on and we'll talk about that in a moment. Parcel tax, you're familiar with that. That could be something that is levied on properties that are a certain land use type. It could be a square footage. It could be that we want all houses to pay a certain amount. Again, something for a later conversation. Impact fees are really what we believe is something that the city should take a hard look at because it is truly significant. Something you can go out to your community and say, we want to make sure we're being fair and we're charging everybody the appropriate fee for the cost of us staffing to provide that service. As you can see here, cannabis, bike parking tax, boat tax, we can get into a little bit of that moving forward. utility undergrounding obviously for areas with the winds we've had the storms we're working with a lot of cities around the state that are trying to utility undergrounding obviously for areas with the winds we've had the storms we're working with a lot of cities around the state that are trying to get underground get get wires under the ground as quick as possible right we were involved in the the oakland fires back in the 90s and that was that was solved by using a utility undergrounding district where at least neighborhood by neighborhood we were able to get those that wanted to move to effectively finance on their own property tax rule the improvements within their street or within their block. But it is something that it is, it's a safety issue for sure. Next slide. We were asked at the workshop by council, you know, well, if we look at a utility user's tax, what does that really mean? And what kind of money can we get out of it? We did a little bit of research on comparable communities. Ironically, when we looked at Fairfax, one of your neighbors, and then we also looked at Mammoth Lakes, surprisingly, as a small destination type community. You can see that for those two communities, they're generating anywhere between $350,000 and $900,000 a year in a utility user tax. Now, Mammoth, because it does also include wireless, which again, you're defining the UUT when you, when you put it out to the community or to the vote. That obviously is where most of your residents probably have a cell phone versus an old GTE or AT&T, or for those of us who remember, Marin County when we had Pac-Tel, right, or Pacific. So it is something that you set. It is charged and collected by the utilities and then it passed through to the cities. But in this case, you've got a neighbor with a relatively same size population generating almost $350,000 a year. That's a found revenue if you care to pursue that. Next slide. As an example that was brought up during the workshop, the idea of again trying to find a way to generate a fixed revenue and we just wanted to give this, this is not a recommendation, this is purely an academic exercise, but knowing how many units you have in the city of approximately 3800. If you needed to generate 2 million a year and you were just to theoretically go out and ask, We want $2 million a year to do infrastructure, right? We're going to dedicate it to this particular type of work. or we're gonna provide $2 million worth of increased service levels That's $527,000, I'm sorry, $527,000. per parcel. That's a pretty, Steve Brown, Thank you. Thank you. most likely not carry much support from your community, but that's what it takes. Literally, if you were to try to put that kind of a number on your community. So we only put that out there for magnitude analysis, right? Just to give you an idea of given how small your, is and the number of parcels you have to $2 million is a big number. And to do that, you can see it's over $500 a year per parcel. Next slide. As I started out mentioning development impact fees, impact fees as a whole, fees in general are, can be generated through a process without needing to go to the community for support. So this is important. Thank you. found revenues or cost recovery in its true sense and we do recommend that you go through the process and the city's done this in the past, probably not as frequently as other communities. But it is something that we do recommend you revisit because It, it, it, it, you're compromising other parts of your operation if you're effectively subsidizing the cost people getting through development and permitting and anything else that otherwise would be collected by an impact fee. From a from a social equity perspective, we do believe that it's only fair that those that need the city services to process permits should be paying the appropriate fee. So that the city isn't subsidizing and affect that. Now I will say that on the park and rec side, that is where we will see City councils elect to not do full cost recovery, right? If you're doing childcare, you're doing services for youth, very often. you are subsidizing your park and rec programs. You're not expecting those to be cost recovery. Other communities will say absolutely. We, um, You know, we want to try to make sure we're We're as balanced as we can in our park and rec program. So just two extremes on where you may be looking at potential fee changes. Next slide. |
| 02:28:28.92 | Craig Hill | So we thought, and this came up by one of the council members during the workshop, that we'd give you an idea of how we're going to do this. diverse these fees are for communities around the state of California. And as you can see, for something on like an apartment complex, You've got. a range from just under $5,000 a unit to $24,000 a unit. And ironically, it's $24,000 in Oakland. whereas it's 5,000 down in Imperial County in Southern California. ON THE SINGLE FAMILY SIDE, you can see that again, Imperial being a rural community, 5,700 on the low end, Fremont's up at 35,000. And the idea here is The NEXUS study has calculated that for every new home, that's gonna bring in 2.4, 2.3, residents into the community. that the additional burden on the community as a whole is going to be in Fremont $35,000. So instead of it compromising existing residents, you're trying to make sure you collect at the time that home is being built enough to then get ahead or make the improvements. Thank you. We don't think about this in the context of it being a new tax as much as it is we don't want to compromise our existing residents if we know we're going to have new development in the community. Next slide. |
| 02:30:00.92 | Craig Hill | We had some pretty spirited conversation with council during the workshop on this idea of a vacancy tax. WE HAD BROUGHT FORWARD THE EXAMPLE OF SAN FRANCISCO. on the residential side after having some further conversations And it was brought to our attention that we should be looking at Oakland as a better example because it's actually a more a diverse approach to what they're trying to tax from an undeveloped perspective. You can see with their Measure W, we've laid out here, what those impact fees or I'm sorry what that those charges or or the tax are on an annual basis. We do know and looking at some staff reports from the city that There's been some volatility and there's also been some issues with collection and obviously given where we have been with the pandemic, Council over there had elected to lower the fee, so they didn't charge the $6,000 in 2021, I believe it was. So what they're projecting that they would get and what they've actually collected has been a little bit different. But it was not challenged. So this was, we've got a case study for something that could be applied across not only vacant land, but also vacant or underutilized or vacant properties, whether they be commercial or residential. So something for consideration if you're looking at a potential property. way to either motivate occupancy or development as well as generate some revenues. They do have this dedicated to addressing some of their issues in the community. So the revenues that are generated off this are going for specific purposes. Next slide. Just to give again some examples of what we're seeing from a cannabis tax perspective. Obviously for your community it's a little different. It would require a couple of different steps to go. you can see that there are communities, smaller communities that are generating revenues anywhere between just under 200,000, excuse me, to over 600,000 in Cotati to the north. We do know, I've been a Nevada residence, that across the border into Sonoma County is a little bit of a different, much more embracing community when it comes to the number of retailers and the number of outfits that they have up there. And that hence the reason that Katati is showing some pretty substantial revenues. Next slide. On the TOT or the transient occupancy tax, that you being a destination community, a lot of visitors coming into town, it's a perfect revenue source. You did see the impact, obviously, during the pandemic. But for all practical purposes, this should be, in our mind, a pretty consistent revenue, given the track record you have with some of your hotels. We did do some analysis on what you're collecting as a whole, on average what you're seeing from some of the hotels. As an example, if you were to even get 20 additional hotel rooms, We made the math easy at $500 a night, 80% occupancy. You know, you're talking about generating a little over $400,000 a year. So very quickly with some either expansion or new hotel projects coming online, you can see what the real impact is to your general fund. The other issue that I'm sure you're all aware of is that for those that have a short-term rental program with either Airbnb, BRBO, or any of those, Enforcement has become a little bit of an issue. But there is an opportunity to also be collecting on those units. And we have seen in some places that it's surprised a lot of folks on what kind of money comes out of those types of units. Next slide. As the city manager mentioned, and this is kind of the shiny object right now that a lot of communities are looking at. There is an old, old, it's a handful of years old, the concept of an EIFD, Enhanced Infrastructure Financing District, as well as what has been recently passed in Sacramento, the CRD, And The concept here is unlike going out and asking the community to support a new tax. It's what we call a diversion of existing property tax revenues that otherwise would come to you as the city with your share of the property tax. and or some of the other taxing agencies. Both the EIFD and the CRD are specifically protect education, so that money can't be diverted. but it does give you the ability. We like to describe it kind of as a trust. because it allows you to take a portion of what otherwise would come to your general fund, is regular property tax revenues, and redirected or diverted into a trust account for a specific purpose. So under the CRDs, We're still waiting really for the rules to come out and what exactly that's going to look like, but we're seeing We're actually having some conversations down in Santa Clara County right now on this concept with the idea of addressing some of the climate issues and potentially having a revenue source to to fund some of the the the work that needs to be done down there so it is. uh, Again, not a not a new tax, not a a revenue that needs to be asked for the community needs to support it for through a vote, but it effectively is money that you otherwise would get that would fall into your general fund from an operational standpoint. So I think with that. I'm happy to answer any questions or kick it back to the city manager. |
| 02:36:32.22 | Sarah Mastrianni | Thank you very much. Okay, I'll start with Council Member Comin. |
| 02:36:35.10 | Councilmember Comin | Great to see you, Craig. Thank you. And thank you for addressing a lot of the questions we had at the priority session. Let's start with the last thing, the EIFD. He said it's outside the realm of traditional property tax, a diversion of existing property tax revenues. Are you telling me that for the incremental increase in the future, that money could be put into one of these special districts instead of being put into the property tax bucket? |
| 02:37:03.98 | Craig Hill | So it's still collected as a property tax and you create a base, right? So let's just say you had a billion dollar, |
| 02:37:08.08 | Councilmember Comin | Right. |
| 02:37:10.71 | Craig Hill | value in Let's just make the district the size of your city. Make it easy, right? And if you had assessed value at a billion dollars right now, that becomes the base. the billion dollar assessed value generates a certain property tax revenue every year. and the city gets its portion. |
| 02:37:32.34 | Unknown | Mm-hmm. |
| 02:37:33.34 | Craig Hill | the incremental growth above that billion dollar base. your percentage of that instead of now coming to the city when the county doles out twice a year your property tax allocation. You would effectively only get the same amount every year of property tax. It wouldn't increase. Your increase is what gets captured in the CRD or the EIF. |
| 02:37:58.36 | Councilmember Comin | Got it, so it doesn't alter the splitting of the property tax funds to different agencies. |
| 02:38:04.61 | Craig Hill | Thank you. |
| 02:38:04.66 | Councilmember Comin | Okay, let me move on then. So one thing I didn't notice in your presentation, we have franchise taxes for telecoms or at least rental fees. Did you do any type of analysis on the current rental fee program for telecommunications providers in Sausalito? |
| 02:38:20.72 | Craig Hill | We did not. |
| 02:38:21.48 | Councilmember Comin | Okay, well, I'm gonna request that you do. My last time we looked at them, it was some measly amount like $30,000 for putting some hideous polls up throughout town. Have you seen, new question, have you seen Has anybody ever paid to share sewer infrastructure? Meaning our lines host the sewage from other consumers or I guess producers, if you will, en route to the sanitation district. We have the cost of that maintenance for that conveyance infrastructure. Have you ever seen a tax that or a rental program that would allow us to collect for the impact on our infrastructure |
| 02:39:14.66 | Craig Hill | So you're technically, they're not a customer of the city. |
| 02:39:19.15 | Councilmember Comin | Correct. We are a midpoint conveyance for sewage from Muir Woods, Tam Valley, and other locations. en route to the sanitation district. could we charge a rent? |
| 02:39:33.54 | Craig Hill | Well, I'm gonna... I believe the answer is yes. |
| 02:39:38.01 | Councilmember Comin | Me too. Okay. Please note that next one. This is fun. I 20 additional hotel rooms, you ran some numbers for us. Did you also factor in what the impact fees might be if we were to do 20 additional hotel rooms and allow that to get built? |
| 02:39:54.90 | Craig Hill | No, we did not look at all on the... on the development impact side. or a new development. |
| 02:39:59.24 | Councilmember Comin | Okay. So last question. So we should, right, because I think what we want to do is look at everything you put out here and find the ones that the matrix of what's really, really hard, but has the biggest opportunity. |
| 02:40:10.97 | Unknown | Right. |
| 02:40:11.20 | Councilmember Comin | and what are, you know, and how I think my bias is to kind of what we did with Measure L. We have folks who come and enjoy our community, have a constraint on the community. invite them to contribute to maintenance. One of the big issues that we have over here, our last item tonight is on bikes and bike parking. Could there be a scenario where we worked with the provider to charge a fee at the consumption point to allow, they would be the collector because it's hard for us to collect, right? But when they're renting the bike, knowing that when they come into our town, they're creating a massive impact on our infrastructure and particularly personnel and police and fire, et cetera. Do you see a scenario where we might have some leverage or some opportunity there? |
| 02:40:59.38 | Craig Hill | I don't think so, but I would let the city attorney respond to that because we did have some, conversations prior to this about you know, one, it's the enforceability issue, right? Like, what does that look like? And then two, I think Sergio had some, Thoughts on... what that may or may not be able to do. |
| 02:41:20.21 | Councilmember Comin | Okay, and then the last question is, have you seen examples of where public agencies, let's say National Park Service, are running shuttles or other types of public benefits through a community, parking on the community, idling in the community, driving on the community's roads, and then they have to pay some type of fee, some type of impact fee for utilizing a pickup location? |
| 02:41:42.46 | Craig Hill | We don't have any exact case studies. I think the way we would think about that though, would kind of like parking enforcement, where you would actually require the buses, if they were idling or waiting, there would be a lot that you would then be able to control. uh, traffic through and collect on, but it usually would require you to prohibit |
| 02:42:03.34 | Unknown | Thank you. Thank you. |
| 02:42:08.01 | Craig Hill | you know, bus parking on the boulevard or on on Bridgeway or anything like that. |
| 02:42:13.41 | Councilmember Comin | Thank you. |
| 02:42:13.43 | Sarah Mastrianni | Okay, thank you, very helpful. Thanks Councilmember Kelman. Anyone else have questions? I have, oh, go ahead, Vice President. So I had asked at the last meeting specifically with regards to cannabis tax about delivery, because we do allow for delivery of legal cannabis, and there are services that provide for that. And it says in your presentation that you would have to, that we would have to choose to legalize storefront. Is there a way to be able to monetize the delivery specifically? |
| 02:42:43.57 | Craig Hill | Yeah, we talked to the city attorney about that. And again, it kind of got down to... What would that look like and how would that be enforced? |
| 02:42:55.47 | Sarah Mastrianni | Wouldn't it be similar to the way that we collect sales tax from Amazon or other Thank you. online providers. |
| 02:43:03.41 | Sergio Rudin | The short answer is that you'd still need voter approval because it's the tax. So it would need to go on your ballot. |
| 02:43:10.50 | Sarah Mastrianni | I mean, we don't want to consider it. I just would like to get an idea of how that functions. So we would need voter approval, but it's feasible. |
| 02:43:17.94 | Sergio Rudin | Yes. |
| 02:43:18.70 | Sarah Mastrianni | Okay. And then on the development and impact fees, I think I had asked in our last meeting as well in as part of our the then mayor Cox's blue ribbon task force on housing we had considered. impact fees specifically for large construction where there's an opportunity instead to put in the second unit or an ADU, and especially with the implications of SB9 and lot splitting, et cetera, or not, is there, in addition to just a build, a decision to not build and build a McMansion and impact fees there? Have you seen that in neighboring communities? I know that Mill Valley has a similar impact construction tax. |
| 02:44:02.07 | Craig Hill | So you're suggesting that there's two different fee structures depending on whether somebody uh, build a single large home versus A regular home plus an ADU. |
| 02:44:15.23 | Sarah Mastrianni | or just additional units of housing. So given the situation we're faced with, with the requirements to add 724 new units of housing and the fact that we're generally in an affordable housing crisis, the model that we had looked at was, if you make a decision to rather than build a number of potential units, you build a large McMansion type home, there would be a fee structure for that. and construction impact be. |
| 02:44:42.23 | Craig Hill | Yeah, that's actually a really interesting concept. I don't know that we internally were able to come up with any reasonable study, a case study for it, I'm not going to say that it can't be done. I just can't. off the top of my head. |
| 02:45:00.36 | Sarah Mastrianni | I believe that Mill Valley has a similar fee structure, and so I would like to look into that as well, because if there's opportunity for both, that's something to consider. Okay, go ahead, Vice Mayor, you have a question. I think it's just how |
| 02:45:13.35 | Vice Mayor | Thank you. How do we move this forward? It's a great presentation and informative, Lots of ideas. What's your recommendation on actually practically but it's a practical. |
| 02:45:24.03 | Craig Hill | stuff. |
| 02:45:24.40 | Vice Mayor | Thank you. |
| 02:45:24.76 | Craig Hill | Thank you. |
| 02:45:24.79 | Vice Mayor | Thank you. |
| 02:45:24.83 | Craig Hill | Yeah, I actually think that there's two practical processes that we would recommend. The first one would be, on the one-time revenues, on the one-time dollars, whether that be impact fees or even something potentially like a cannabis delivery that you further the investigation there. A lot of that is nexus study related, right? Where you really need to get a cost of the impact on your community because that's the one you it takes that to even figure out what kind of dollars you're talking about potentially capturing. through development. But that has its own timeline and you're not racing against any kind of It could be something that gets implemented in the middle of 2024 or the 2025, depending on how long it takes to do the NEXUS study. or the impact fee study, I think the bigger issue that we've been having conversations with, the city manager and staff around is Those? All of those impact fee dollars are great, but they're not a reliable revenue source, right? That's their one-time dollars when an event happens that kicks in the revenue. Looking at structurally a long-term revenue source, I think that's a very important conversation for the council to be considering or even potentially doing outreach to see how much of an appetite there is with the council or sorry, with the community for any number of different revenue sources. Right. And you went through that already with measure L. So it could be something similar or in addition to Measure L, or it could be looking at other things to try to then come up with reasonable dollars that make an impact, right? Because what we're talking about is, |
| 02:47:29.47 | Unknown | Bye. |
| 02:47:30.00 | Craig Hill | we are not recommending that you go through a very painful, labor intensive process only to find out that it's going to generate $50,000 a year for you. That doesn't make any sense. It doesn't solve any of your problems. So we want to make sure that any solutions are really going to take a much more methodical approach. And I know the city manager is not suggesting that this would be anything that would go before the community in 2024. Most of these projects that we're involved with, when you're looking at revenue sources or revenue measures, they're two years, you know, they're 24 to 36 months out. So it's, but, but. All I'm suggesting is that it's there we bifurcate the conversation and you either as a as a council make the decision that we, you know, we definitely want to make sure that from a cost recovery standpoint we've got our impact fees and all of our fee and fees and rates set appropriately and then. the bigger picture then is in isolation around these new revenue streams. |
| 02:48:38.69 | Vice Mayor | Okay, thank you. Maybe it's a question actually for our city manager or for staff, What are you looking for from us here tonight? Is there a direction on drilling down on certain fees and taxes or ideas? Is this an update report that, City staff is providing and they are already tasked with doing that work. Our |
| 02:49:01.96 | Councilmember Hoppen | REPORT. |
| 02:49:02.45 | Vice Mayor | Thank you. |
| 02:49:02.58 | Councilmember Hoppen | And. |
| 02:49:02.65 | Vice Mayor | it's |
| 02:49:03.04 | Councilmember Hoppen | an update. |
| 02:49:03.86 | Vice Mayor | Thank you. So no additional, this is fully informational And that's great. I like that. Thanks. Thank you. |
| 02:49:12.39 | Sarah Mastrianni | Councilmember Hoppen? Thank you. I thought you were doing hand raise. Okay, Kelvin McCrox. |
| 02:49:19.07 | Councilmember Hoppen | um, Thank you so much for the presentation and for memorializing a lot of the work that we did when we first started looking at these issues. In your presentation, you had mentioned a potential parcel tax to support the police department. I know that the police department at one time was considering issuing a bond. similar to what Southern Moon Fire did. Is that something that's on your radar? |
| 02:49:46.32 | Sergio Rudin | Yes. |
| 02:49:46.96 | Councilmember Hoppen | Okay, okay. Another cost revenue raising measure that we mentioned was an excise tax on boats. And I know that your presentation had on one of its slides, boat tax, and that it would require voter approval and that you thought it was difficult to implement. Was that an excise tax and have you looked at that at all? Because we have a lot of boats parked here in South Carolina. |
| 02:50:17.30 | Craig Hill | Yeah, and we've actually had some pretty spirited conversations. I think I'll let the city... attorney chime in first and then the I'm happy to give some color commentary. |
| 02:50:29.57 | Sergio Rudin | Yeah, I think as a practical matter, there aren't really any good examples of um, cities implementing an excise tax on boats that would simplify the process of adopting. Obviously it would require voter approval. There are also some thorny legal issues that I have still yet to fully research and understand given the novelty of an excise tax on boats. So, you know, There is that. So. |
| 02:50:58.11 | Craig Hill | I think the angle that we have seen in the past is not necessarily taxing the boat itself, but the slip. Right. So, you know, whereas you, and again, this would be voter approved, but the idea would be that there would be a. a potential length of the slip charge that would be different for, you know, a 30 versus a 70 or a 90 foot slip. And then that would obviously be passed through to the renter. by the owner of the marina. |
| 02:51:34.03 | Councilmember Hoppen | And it could be a different tax for an occupied slip or an unoccupied slip. |
| 02:51:42.24 | Sergio Rudin | So just to give the council a little bit of background on this, you know, boats, the boats themselves are already subject to property tax. And the marinas are also themselves already subject to property tax. So with an excise tax, you're imposing a tax on the privilege of use. So you have to tax the use of the boat. And one of the issues that I think could arise is that, you know, these boats are typically in you know, um, they're in US waters or they're in, you know, waters that are submerged lands that are supposed to be held in trust by the city for the benefit of you know, the public. So there are some issues there with the ability to restrict, you know, navigation and things like that. And, So, There are limits in terms of the city's ability to double tax, so you can't impose additional property taxes on the boats. Again, you know, the marinas are already subject to property taxation. Any sort of excise tax that the city would impose would have to be very carefully drafted and would have to consider a lot of these issues. |
| 02:52:53.03 | Councilmember Hoppen | Thank you, Sergio. And then, I have great concerns with this utility tax. I did some research. It appears to me that Fairfax is the only Marin County city that charges that. Is that your understanding? Yes. |
| 02:53:08.92 | Craig Hill | I can't answer that right now. |
| 02:53:11.89 | Councilmember Hoppen | Okay. That was what my research yield is, so. Okay. And that's 4%. Larger cities, such as Oakland, San Francisco, charge 7.5%, but that's large cities. Okay. |
| 02:53:16.36 | Unknown | Okay. |
| 02:53:27.08 | Councilmember Hoppen | Thank you. Those are my questions. Vice Mayor. |
| 02:53:31.72 | Vice Mayor | just to follow up on Council Member Cox's inquiries around the excise tax on boat slips. uh, I understand that you've highlighted its novelty and that there might be some unresolved legal work that needs to be done around it, but when we are applying the lens that our presenter from NHA suggested of where the big money is, it is potentially a source of two million dollars a year to the city And those, I would be paying some of that myself as a boat owner. I think I know many examples of that park their boats here, they live in Sacramento, where in Los Gatos it's a second home where or a luxury property. And so it's an interesting opportunity to leverage a unique feature unique asset of Sausalito. I'm wondering to what extent do you think you can actually resolve the legal questions through additional research? or the engagement of NHA or others to give us a clear answer on the viability of that as a potential offering to the community that would not affect property owners. Thank you. |
| 02:54:40.99 | Sergio Rudin | Yeah, and thank you, Vice Mayor. You know, I think if the council's pleasure is to consider pursuing that kind of financial approach, revenue raising measure, you know, I would appreciate the opportunity to do a little bit more research and then educate the council by way of confidential legal advice on that subject, rather than an open session. |
| 02:55:02.61 | Councilmember Comin | Mayor, would you mind if I add to that task? Thank you, Vice Mayor. So, Sergio, I like this idea last time I heard it. So I did a little research, and maybe one thing that we can offer up is what exactly we may be taxing. So I always thought excise tax was a tax that was manufactured. Annapolis, Maryland, has a personal property tax on boats that are owned, leased, or rented in the city. Miami-Dade County, Florida has a 1% surtax on the sale or transfer. San Diego has a 1.5% excise tax on the gross receipt of boat and yacht rental businesses. And the city of Chicago, Illinois has a 9% amusement tax on the rental of boats and other watercraft. And so I would just request that in your research and inquiry, think about the different use cases we may wanna explore as opposed to, I think the one in Newport Beach was the one that they considered unconstitutional, but there are other ways that we may approach this question. So thank you. |
| 02:56:05.23 | Sarah Mastrianni | Great. Does anyone else have questions? Okay, so I'm going to go ahead and open it up to public comment at this time. |
| 02:56:15.24 | Walfred Solorzano | I'm just seeing no public comment. Thank you. |
| 02:56:17.25 | Sarah Mastrianni | Amen. |
| 02:56:17.32 | Walfred Solorzano | Oh, actually we have Senator Bushmaker. |
| 02:56:17.33 | Sarah Mastrianni | Okay. Okay, great. Hi, Sandra. Welcome back. We can't hear you, Sandra. |
| 02:56:29.23 | Sandra Bushmaker | It occurred to me today. Hello, everybody again. you It occurred to me today as I was watching an Amazon truck Back up a driveway. with a long hitch on its stern end, digging into our pavement on my street. It's the multiple times that I have seen this happen. In fact, I sent a photograph of this particular event to a council member for review. It occurs to me that the wear and tear on our city streets of Amazon and other delivery services might be a might be something to look at. And I don't know enough about the taxes structure to know what kind of tax could be imposed or a fee imposed on Amazon for delivery services in Sausalito. Any feedback on that particular thing? I just, it just so happened that it happened today again, and that truck was in the middle of the road, halfway up a driveway with its back curb stuck in our pavement. until it was towed out. So I'm just curious whether there's any kind of on that kind of thing. on a fee. for delivery services in the city. Thank you. |
| 02:57:47.00 | Sarah Mastrianni | Thanks, Sandra. Thank you. Do we have any other further public comment at this time? |
| 02:57:51.44 | Walfred Solorzano | No further public comment. |
| 02:57:53.67 | Sarah Mastrianni | Okay, I'll go ahead and close public comment. And I just wanna remind members of the council that this is a purely informational item. I think at this point we wanted to hear the report on each of the potential fee structures and perhaps consider which we would like to agendas for future consideration, given that it's after 10 and we do have one more business item that I would like us to be able to listen to and put it in. Usually, typically, we don't hear business items after 10pm. So in the interest of moving things forward... I would ask that you not weigh in with comments unless you believe they're absolutely critical so that we can hear from the chief and Lisa Scopazi who have been here for several hours waiting to continue. And I'd also ask if the council is comfortable with hearing that additional business item so that we can get to it this evening. Thank you. |
| 02:58:38.96 | Councilmember Hoppen | Mayor, may I make a process? uh, suggestion that we, uh, email one way communication to whomever the city manager designates. Which of these revenue raising measures we support further investigation of and then the city manager can pull based on our responses and prioritize further investigation and research from there. |
| 02:59:05.98 | Sarah Mastrianni | I think that sounds like a good idea. Is everyone okay with that? I'm fine with that. Great. So thank you very much. We really appreciate your comprehensive reporting and thank you |
| 02:59:13.22 | Sandra Bushmaker | Thank you. |
| 02:59:16.10 | Sarah Mastrianni | for everyone's attention on our critical conversations surrounding our budget. And now we will move on to our last business item for the evening. Thank you so much for being so patient with us here, Chief Gregory. So that is 2022 Circulation Management End of Season Report, an approvable agreement with Sausalito Bicycle Congestion Management Agreement. So please. |
| 02:59:38.18 | Unknown | Good evening. It's kind of fun to be here in person talking to y'all. Right? Yeah, it's like old times. |
| 02:59:44.12 | Unknown | Yeah. |
| 02:59:46.97 | Unknown | Anyway, I'm here to talk about congestion management by parking. First, I'm going to start with the 2022 report. So I said a bike return. Worked over 900 hours for us in the downtown area, keeping our cyclists, pedestrians, and anybody else who's down there safe. Their focus always, when it's management versus parking, is making sure the sidewalks are not blocked. Making sure people know that we have an ordinance that requires them to park in our bike parking. And to direct them to ferries, buses, taxis to exit town. So that's what Sausalito Bike Return did for us in 2022. I do want to mention Lisa Scabazzi is in the back of the room tonight in case you do have any questions for her. I also would just want to take a little bit of just a couple minutes to talk about what Sausalito Bike Return has done for us in 2018 and 2019 they did bike parking and bike return. A lot of bikes and So they're just getting in their groove when the pandemic hit. 2020, the city asked them to completely pivot their role into an ambassador for the city. in a COVID way. So they were downtown, they were handing out masks, reminding people wear masks, hand sanitizer, distance, holding signs, reminding people. So they did that for us for the entire season of 2020. In 2021, they kind of morphed into a COVID safety slash reminding people who are coming on bikes where to park. And then that led us to this last season. So I want to thank Lisa and John Scopazi for their hard work and their willingness to do, you know, frankly, whatever we've asked them to do so far. So I appreciate that. So what I'm asking you tonight is to agree for us to enter into a contract with South Dakota Bike Return to manage the bike parking and the congestion downtown. Two separate things. One is roving and keeping the sidewalks clear and bikes from, you know, parking all over town, which we've all seen happen. And the other is making sure that we charge and people are paying for their bikes when they park. So Sausalito bike return is ready to go. Tracy Way's already closed. We have the Apple card readers. I mean, we are ready to go. The other thing that we're asking for your your consent on tonight would be to raise the fee from $3 to $5. And I think if we run into big trouble with that, or a lot of issue around it, we'll always have the ability to drop it back down to $3. The other part of Saucydo Bike Return starting was, would be that I would suggest that we fund them with $30,000 to run their season as we have in the past. It's a little bit more, this is a bigger increase because, I think last year it was actually around $30,000 after we gave them a little bit extra to keep them going through the end of October. So they essentially would start on the Friday of Easter weekend, and they'd run through probably mid-October. Again, depending on what we see, we don't know if it's gonna be the 2018 and 19 numbers. We have an idea based on what we've seen come into town on nice weekends, the very few that we've had. Um, And the other part of this is that we're going to, you know, since we are in the fifth, sixth year with Susilo Bike Return, ask to go to RFP again to see if there's anybody who wants to take this on, any new ideas. And so that's our ask. It's pretty simple. We're already into the season. The weather has kept us from actually being a season yet. But I think it's going to come once the weather clears up and we really don't have the time to put something in place, we need it as an enhancement to the police department especially during the time when we are short-staffed, both police officers and parking officers. So that's the ask of you tonight. |
| 03:04:41.98 | Sarah Mastrianni | Thank you very much, Chief. Really appreciate it. I already see there are questions here from the council, so I saw Council Member Cox first and then the Vice Mayor. |
| 03:04:43.24 | Unknown | Bye. |
| 03:04:50.62 | Councilmember Hoppen | this is a really unusual contract. So, and I just want to be sure that Lisa and John are knowingly undertaking this. So it says, consultants shall be available to work as many hours as required to complete the work immediately upon receipt of the signed agreement. There's no limit on the number of hours. And in the scope of work, it talks about that the hours that they are working is from seven days a week from 11 a.m. till 6 p.m. But then it has a clause that says, or as needed. The chief of police will determine the schedule based on the needs. So they're essentially offering to work as many hours as necessary Thank you. |
| 03:05:39.40 | Unknown | Right, Lisa? So, Joan, part of that is that's a standard form that we use. The scope of work is obviously the agreed upon and communicated with Sausalito Bike Return working hours. |
| 03:05:56.11 | Councilmember Hoppen | I understand. It's just a super favorable contract to the city. So I just wanted to ensure that this is being knowingly entered into by the Skopazis. And I appreciate your, I think it's a really best practice municipally for you to go back out to competitive RFP next year to test the market and ensure that indeed there isn't a better offer in town, but I doubt that there would be. Bye. |
| 03:06:24.78 | Unknown | Yeah, and when we say as needed, that really refers to most likely less hours. So we won't work her too hard. |
| 03:06:34.62 | Sarah Mastrianni | Vice Mayor. |
| 03:06:36.83 | Vice Mayor | How did you come up with $5? Could it be more? I have another question. |
| 03:06:43.63 | Unknown | I mean, I'm sure it could be. I think, you know, the small increase, I mean, that's, I don't know that it's necessarily a small increase, but I think we should start there. And, you know, if that works, then we can go bigger next time, next year. |
| 03:06:58.99 | Vice Mayor | Would you be authorized to do some experiments within the season at your discretion with playing around with the numbers just to learn from your experience? |
| 03:07:07.69 | Unknown | You authorize me to. I'd love to. Yes. |
| 03:07:10.83 | Vice Mayor | I think that'd be the way you do it in business. It's just a little bit of, you know, experimenting with it. $5 is your nominal amount, but you're authorized to play around with it to dynamically price rather than come back to city council. as a business item. I have another question too. Should I ask that now? Can I have a follow-on to yours? |
| 03:07:27.12 | Councilmember Hoppen | Bye. Can I have a follow-on to yours? I understand that things are different for private business, for public entity, I believe that if you were to give them that leeway, there should be some guardrails, some parameters, not to exceed, you know, et cetera. |
| 03:07:45.59 | Vice Mayor | Thank you. So thanks. That seems reasonable, but maybe we could take that up and making a motion, but my question is, Just help me out with the downside of that, which is people that do have sticker shock at a price or don't want to pay it, as it goes up, you'll maybe have more people walking around with their bikes on the sidewalks or locking their trees. So what's the plan for that? |
| 03:08:09.39 | Unknown | Well, that's part of the congestion management that Sauce Little Bike Return also provides to us is making sure that doesn't happen because we do know that there are certain areas in town that, you know, there's just a magnet and people want to park their bikes and lock them up. So working with our parking staff, our police officers, Sauce Little Bike Returns. You know, we have a really good working relationship with them, including the ferry. Um, So, We monitor that and I you know I think if we did go up higher than $5 we would have to monitor that there is free parking in town. So you know the further north they go there's there is free parking available it does fill up. But you know people want to be right there in the hub near the ferry. And so I think you know that's something that we can monitor as we go. |
| 03:08:58.31 | Sarah Mastrianni | We have other questions from guests, Councilmember Hufford. |
| 03:09:01.84 | Unknown | Thank you. you Please. Thank you. |
| 03:09:11.98 | Unknown | Thank you. |
| 03:09:14.83 | Unknown | it would be for the 2024 season. So, yeah, we'd have to do it soon. Absolutely. |
| 03:09:27.25 | Unknown | Amen. Thank you. |
| 03:09:33.59 | Unknown | Thank you. Thank you. |
| 03:09:45.09 | Unknown | Yeah, it's easy to do. |
| 03:09:57.71 | Councilmember Hoppen | The public cannot hear. |
| 03:09:58.98 | Unknown | Thank you. |
| 03:09:59.14 | Councilmember Hoppen | Thank you. |
| 03:09:59.38 | Unknown | And |
| 03:09:59.90 | Councilmember Hoppen | Thank you. |
| 03:10:00.27 | Unknown | Thank you. Okay, to recap for the public, we were talking about an RFP that would be issued in the fall of 2023 after this season for next year, for 2024. And then also that we would have monthly reconciliations starting, I suppose, in May, if we're starting in April, right? Starting in May. And that, in my opinion, the consent calendar is fine. It's just just a monthly report that we see where we're at. So thank you. Thanks for all your work on this by the way for you too. |
| 03:10:37.30 | Sarah Mastrianni | Councilmember Kelman? |
| 03:10:38.34 | Councilmember Comin | Right, thanks. Hi, Chief. So in the staff report, you recommend a difference. If we increase the fee, we change the revenue share. Why is that? |
| 03:10:41.38 | Sarah Mastrianni | Thank you. |
| 03:10:50.06 | Unknown | It's a discussion the city manager and I had. So city manager, you want to chime in? |
| 03:11:00.65 | Unknown | Can you help me answer the question as to the 90, 10, 25, 75? |
| 03:11:05.67 | Chris Zapata | Correct, I can. So there seems to be a fixed cost in the service. and a higher revenue stream would actually allow for that fixed cost to be met. And then allow the city to recruit more revenue. |
| 03:11:21.48 | Councilmember Hoppen | and the mic's not going to be. |
| 03:11:23.08 | Chris Zapata | Mm-hmm. Now working? No. No? No? Done. It's on now. Yeah. The idea of a 75-25 was based on a $3 rate to cover the cost for the bike company. But if we go to a 90-10 split and a higher rate, the 10% allows for us still covering the costs incurred by the bike company, but allows for more revenue to the city. |
| 03:11:54.05 | Unknown | I have some insight on that, too. Sure. Then I have another question. Yeah, I think the original contract is a 90-10 split. And so the lower bike fee was to sort of help accommodate for that. And if we go back up to a higher rate, then it goes back to the original of 90-10. Okay. |
| 03:11:56.51 | Councilmember Comin | I don't know. |
| 03:12:14.97 | Unknown | So that was the I think that and I'll let the chief speak this too, but I think the 2575 split was to sort of recognize the lower revenue that you would have from the $3 as opposed to the $5. |
| 03:12:24.98 | Councilmember Comin | Thank you. Thank you. |
| 03:12:25.60 | Unknown | Okay. |
| 03:12:25.79 | Councilmember Comin | Great. And then I see in the Secretary of the Board Chief that in 2019, SPR sold 47,917 bike parking permits. I'm just wondering from a data perspective, have you ever cross-referenced those numbers with the ferry folks to see how much of the overall bike traffic we're actually capturing? |
| 03:12:49.85 | Unknown | Yes. So that was a yearly thing that we used to do. And We'll start that again. There's a lot that's going to probably change this year. You know, there's not going to be the South Slido bike return. They're not going to, they don't, there's not a need for that any longer. The smaller companies are no longer a business. The bigger companies are returning their own. There's a lot of electric bikes so they can get themselves back. So we'll be, we will be working with the ferry. And in fact, I got the ferry information a little bit too late to really incorporate into my presentation and staff report. but we will incorporate those numbers to see what we're capturing on the way back to really incorporate into my presentation and staff report. So, but we will incorporate those numbers to see what we're capturing on the way back. Is that answering your question? |
| 03:13:32.98 | Councilmember Comin | Yeah, that's what I want to say. I want to see how many are coming through. And then have you had any conversations? I'm also sort of wondering, the majority blazing saddles? And have you had conversations with blazing saddles? Because apparently the city of San Francisco in 2021 was charging... |
| 03:13:34.20 | Unknown | . |
| 03:13:49.49 | Councilmember Comin | an annual fee of $98 per bike for bike companies that had over 50 bikes in their fleet, and $20 per bike if they had under 50. And all of these bikes come through San Francisco into our town, to create congestion and the city of San Francisco gets a fee and we don't. And so I'm wondering if you've had any conversations and what that might have looked like with Blazing Saddles. |
| 03:14:17.18 | Unknown | I haven't had, I mean, I regularly have conversations with Jeff. I have not had any this year. Yep. |
| 03:14:21.57 | Councilmember Comin | Yeah. |
| 03:14:23.41 | Unknown | But I will, and I will ask that question. Okay, thank you. |
| 03:14:26.07 | Unknown | Thank you. |
| 03:14:29.31 | Unknown | Sorry, I can't. I have some insight on that from- Why? From seven years ago when we tried to look at this. And I'm glad Sergio is still on the line. I know there are memos in our attorney files about what we can charge and what we can't charge. But I'm not. I'm not unhappy with where you're going. I'll just include that in my list that I sent. Yeah, yeah, yeah. So anyway, Sergio should have some of this done. |
| 03:14:50.34 | Unknown | Thank you. |
| 03:14:50.39 | Unknown | Yeah. |
| 03:14:50.69 | Unknown | Thank you. Thank you. |
| 03:14:51.94 | Unknown | Yeah. |
| 03:14:52.16 | Unknown | Thank you. |
| 03:14:57.86 | Sergio Rudin | Yeah, I'll look into it and update the council. Thanks. |
| 03:15:06.00 | Sarah Mastrianni | Could we consider charging more on the weekends versus the weekdays? |
| 03:15:12.21 | Unknown | Yeah, that's a good idea. I think my idea is that we start with five and see what kind of pushback we get and then adjust as we go. |
| 03:15:22.23 | Sarah Mastrianni | I mean, five seems more than reasonable given inflation and also tourists who don't have necessarily a baseline for bike parking fees. So, okay, I don't have any further questions to do. Does anyone else on the dais before we go to public comment? Okay, let's open it up for public comment. |
| 03:15:41.42 | Walfred Solorzano | See none. |
| 03:15:42.33 | Sarah Mastrianni | Okay. |
| 03:15:42.92 | Walfred Solorzano | No, actually, Kevin Carroll. |
| 03:15:44.09 | Sarah Mastrianni | Oh, hi, Kevin. Hello, Councilmember Carroll from Larnsburg. Nice to see you. |
| 03:15:44.12 | Walfred Solorzano | Thank you. |
| 03:15:49.32 | Kevin Carroll | Nice to be seen. Just a comment first, a compliment to, the operators of the service, they do really do a very good and fair job. just as somebody's out there watching them all the time, Very impressed with their operation. The other thing. just if you are gonna consider the question of revenue, what has changed as was mentioned is that BICYCLES NOW DO HAVE LOCATIONS IN SAXELETO WHERE THOSE BICYCLES ARE PARKED. until they are picked up. which was not happening before. So there might be a way to tax them based on that. And thank you. |
| 03:16:40.33 | Sarah Mastrianni | Thank you. Looks like we have one more hand raised here. |
| 03:16:44.85 | Walfred Solorzano | Sorry, Julie Vieira. |
| 03:16:47.84 | Sarah Mastrianni | I joy. |
| 03:16:57.83 | Julie Vieira | Bye. I just want to be sure that we are careful about I agree with the $5 price. However, Blazing Saddles tends to take the people that are on their bikes directly through Sausalito to the other end of town. And they don't stop and they don't patronize any of our businesses in town. So I don't want to discourage people from parking downtown. Um, in our bike area by charging too much. I think $5 is great, but I think if we start raising Too much, too fast. We might get more pushback and more people will tend to just go through town and not stop and patronize our businesses. because I do see Blazing Saddles guides guide people all the way through town to Barbacci, and then they stay there and they don't come into town to spend money. |
| 03:18:03.78 | Sarah Mastrianni | Thank you. Do we have any other public comment at this time, city clerk? |
| 03:18:08.06 | Walfred Solorzano | No further speakers. |
| 03:18:09.80 | Sarah Mastrianni | Okay, I'll go ahead and close public comment and bring it back up to the dais for discussion. Who would like to start us off? |
| 03:18:17.77 | Unknown | Great, wait, I'll start. Yeah, I think. I could just cut this short. Yeah, let's approve this. And with the monthly reporting and starting off at $5 with the ability to adjust that if you're seeing problems. So you guys have the authority to do that at your discretion if it's causing problems. And counsel with the corresponding split is recommended in the staff report. |
| 03:18:41.07 | Sergio Rudin | and council. |
| 03:18:46.15 | Sergio Rudin | and council, Just so you're aware, because there is a provision in the scope of work that sets the rate, I would recommend that the council approve the contract with deleting the the language that SBR is to charge $3 with a possible increase to $5 and authorize the city manager or the city's chief of police to set the appropriate rates for SBR to charge in the scope of work. |
| 03:19:12.56 | Vice Mayor | I think that's good, but with the Council Member Cox's guardrail on an upper limit, I don't know if that because you want to give them flexibility to go both directions, presumably. on peak pricing. So something like not more than $10, something like that. What's your guardrail that you want to put on? |
| 03:19:27.48 | Councilmember Hoppen | Thank you. Well, first of all, we published a staff report that said not more than five, so I wouldn't go more than seven. Thank you. |
| 03:19:38.56 | Vice Mayor | So not more than seven. Yeah, looks like. Thank you. |
| 03:19:43.12 | Unknown | Okay, so do I need to make a motion with your suggested amendments, Sergio? |
| 03:19:49.72 | Sergio Rudin | Uh, yes, that, that would be appreciated. Or you can just say, uh, move to approve the contract with amendments as suggested by the city attorney. |
| 03:19:57.90 | Unknown | Yes, I'd like to move to the, except the contract with the amendments as suggested by the city attorney. I'll second that motion. |
| 03:20:05.61 | Sarah Mastrianni | Okay, all in favor say aye. |
| 03:20:07.98 | Councilmember Hoppen | I- |
| 03:20:08.35 | Sarah Mastrianni | Fantastic. Thank you. |
| 03:20:08.36 | Councilmember Hoppen | Right. Lisa, and thanks to John as well. |
| 03:20:11.94 | Sarah Mastrianni | Thanks to Jen. Motion carries five zero. Thank you very much, Chief, for your hard work on this. Thank you, Lisa, for staying so late with us this evening and bearing with us as we got through our budget agenda items. We really appreciate all of the work that you put into Keep our downtown safe. Thank you. Okay, so now we'll move on to our next item on the agenda, which is item six communications. This is the time on the agenda for members of the public to provide any public comment for items that are not on the agenda If you would like to provide a public comment, fill out a speaker slip. raise your hand in the Zoom application. The city clerk will call on individuals who have raised their hands in the order that they were raised. After you are called on, you will be unmuted to allow you to share your comments. Remember, public comments are each allowed a total of two minutes. I will now open it up for public comment on communications and items not on the agenda, and I see someone approaching the podium. Please introduce yourself. |
| 03:21:06.38 | Unknown | and people are lazy starting to feel anything |
| 03:21:08.15 | Sarah Mastrianni | That's okay, you're pretty much the only member of the public here, so. |
| 03:21:11.75 | Damian Morgan | Thank you. |
| 03:21:12.37 | Sarah Mastrianni | Thank you. |
| 03:21:13.03 | Damian Morgan | Thank you. Um, The Tiburon City Council, they have equity measures on their monthly agenda and they meet and discuss equity Initiatives. And Tiburon. um, Mill Valley. through all their criticism, People laughed at Mill Valley. but they moved on to talk about, Equity initiatives. Um, things to better their community. Um, The county of Moran, as you know, They have initiatives, money set aside for business opportunities and much more. But it's a county at Moran, they have much more money. Um, Novato, they're, doing some things or talking about equity initiatives also. here in Sausalito, Ah. We're in city. I'm a native of Renshedy Bean next door. I'm a little concerned because I've been kind of fudged along recently, kind of nudged along, oh, Damien, we're doing some things, we're going to do some things. I think. We've been more than patient. Well, we can go back decades as far as patience, but in recent times, we've been patient as far as what are we doing here in Sausalito. Marin City is your neighbor. Should I go about redlining, talk about other things? No, I won't do that right now. But so I'm wondering, Aside from movie nights, aside from art projects, aside from that, what economic initiatives are you doing in the name of equity, the buzzword equity? I try not to use that word, but what are you doing for your, I guess, underserved neighbors in in your community, Marin City, Sausalito. You have discretion to enter in short now if you want. I asked in the previous item a few minutes ago regarding the budget. I got no response. So I'm hoping... You have something for me tonight. Thank you. |
| 03:23:28.60 | Walfred Solorzano | No further speakers. |
| 03:23:31.59 | Sarah Mastrianni | Okay, we'll move on to Councilmember Committee reports and I will just in response to and with respect to your comments, give a response to the question of equity that was brought up. And I agree there has been a lot of patience and there could be and always can be more done. We've had conversations previously about working on procurement specifically for businesses from within Marin City, and we're working to do some of that, but I would like to see a list of additional businesses that we could partner with in Marin City from an economic standpoint. I've been in talks with some city leaders about a wellness day and partnership with Marin City, but I think I really hear you on the economic piece and have been thinking specifically about ways we might do things with regards to a new a minority business equity fund that would provide for fast tracking for permitting and business. And so I was going to ask that that be added to future agenda items and also seek out specifically grant funding to provide for a setup cost as well for minority businesses in our communities. Those are just a couple of the ideas, but welcome engagement and further discussion about that, and I appreciate you coming here to make those comments, and I definitely want to respect what you have to say and provide feedback and an answer, and happy to continue the discussion as well. Additionally, on committee reports, I just wanted to share out that I... I'm a part of a sort of informal committee called the Bay Area Network of Jewish elected officials alongside Councilmember Kelman. And I've just returned from a visit with the delegation of North Bay business leaders. North Bay elected officials to Israel. So I was there with council members from Corte Madera, from Novato, from Tiburon and from San Rafael. And so you'll probably be hearing more about that, but I did wanna wanna share that with the group as well. So that's first on council member committee reports. Sorry to steal the thunder and start right away, but I wanted to make sure we gave Damian a response. Okay, but we have other council member |
| 03:25:32.97 | Councilmember Comin | reports. I'll just list briefly, so if anybody has questions, in the interest of time, we had an MCCMC Climate Action Committee meeting to talk about the top priorities in Marin County. Had a Bay Wave Sea Level Rise Committee to talk about how we might fund some of the new resilience work and what's next for Bay Wave. The Blue Economy Task Force has its next meeting on April 24th, and I think we're close to winding down that task force and hopefully spinning up an independent Thank you. The Blue Economy Task Force has its next meeting on April 24th. And I think we're close to winding down that task force and hopefully spinning up an independent entity that moves forward with these ideas. And then not a committee, but I'm still working on South Seattle Pride event in June 29th, 30th, and July 1st. Thank you. |
| 03:26:16.04 | Sarah Mastrianni | Anybody else? Okay, then I'll go ahead and move on to item eight, which is city manager reports, city council appointments and other council business. So I'm gonna open that up for public comment on items 8B through 8E. Before we move ahead, do we have any public comment on those items? |
| 03:26:34.90 | Walfred Solorzano | Yes, we do. Great. Eva? |
| 03:26:35.88 | Sarah Mastrianni | I agree. Hi, Ava. |
| 03:26:41.20 | Unknown | Thank you. I was actually trying to comment on the last item, but For some reason, it wouldn't register a raised hand. So I'll make my comment now. Um, I wanted to, I guess now I've had an opportunity to hear Melissa Blaustein's response to the question about equity. I'd just like to point out that the idea of responding to a question about equity with the suggestion that you were talking about or thinking about a, quote, wellness day, unquote, is one of the most... Marin County things. I did want to point out that that I found something recently in the archives that I think the city of Sausoleo should take a look at. And it's a 1958 letter by Bruce Risley. And The letter is written from Rent City. Mr. Risley lived in House 593. And in the letter, he details a number of issues, but two things really stand out in this three-page typed letter from House 593. The first is that it was the county that was responsible for segregating Marin City. The second is that it was the rent money collected from the then majority black community. community, the renters in the wartime cottages, which of course were burned to the ground in the in the early 1960s by the county fire chief as a means of destruction, which would never have happened in a white community in Marin County. um, It was the rent money that was used by the county to purchase the land from the federal government. And if you look at the price tag, that total price tag for all the land in Marin County was under a million dollars. It was under $900,000. In fact, the total price tag came to |
| 03:28:48.32 | Walfred Solorzano | Thank you. |
| 03:28:50.83 | Sarah Mastrianni | Okay, and now we'll move on to item 8B, which is the city manager presentation and update. |
| 03:28:58.41 | Chris Zapata | Mayor, council, members of the public, if we can take a pass on that. I sent Kevin to bed. So we'll be for great. That seems fair. Yeah, we've provided a lot of information to the currents on storms. We'll provide a written report at the next meeting as well. Thank you. |
| 03:29:14.02 | Sarah Mastrianni | Okay, and the next is item 8C, appointments to boards, commissions, and committees. We don't have any to make tonight, but I would remind members of the public that we do have some vacancies on some of our state-mandated boards and commissions, and we will be conducting interviews on the April 11th meeting. So just in case you wanted to get your application in under the wire. please go ahead and do apply. And then I'll move to future agenda items on the same topic, which is to say that also at the April 11th meeting, we've been receiving a lot of correspondence specifically about the future of EDAC and other boards and commissions. And so we will be hearing that item at the April 11th meeting. And I will add to the future agenda items, the working on this minority equity fund that I mentioned earlier. And then I also have been speaking with representatives from the county of Marin about their single use plastics ban and I would like to see us adopt this county ordinance because they also in turn. work on enforcement, which is great because if you move forward, they'll handle enforcement. And we also discussed with the Sustainability Commission in Q2 or Q3, moving on to Tier 1 of the reach codes for a full electrification. So I would like to see that added to the agenda as well. And with that, I'll open it up to others. Sorry for starting first on that one as well. |
| 03:30:28.74 | Councilmember Comin | May I request an update on the landslide task force, geologic hazard survey, slash hillside ordinance, and sort of the same thing. And I did ask Kevin about it, and I can't recall at this hour what he said, other than that they are working on it. So it would be great if everybody got the same update. |
| 03:30:46.39 | Sarah Mastrianni | Thank you. |
| 03:30:46.97 | Councilmember Comin | Thank you. |
| 03:30:47.03 | Sarah Mastrianni | Anybody else? |
| 03:30:49.68 | Unknown | Yeah, I have a clarification question about the April 11th that we're going to talk about. I guess we're going to interview for the statutory boards and commissions for openings there, and then we're going to talk about the future of EDAC. Does that mean we're going to talk about the status of all non-statutory boards and commissions. Yes, exactly. Thank you. Thank you for putting that on the YouTube app. Of course, for your request. Thank you. |
| 03:31:13.33 | Councilmember Hoppen | Thank you. Anything else? I'll just say I'm grateful to see the sewer consolidation item on the April 25 meeting. And I look forward to digging into this fellow subcommittee member, Vice Mayor Sobieski. |
| 03:31:32.19 | Sarah Mastrianni | Great. Anything else? Oh, yes. Go ahead, Councilman. |
| 03:31:35.16 | Unknown | Sorry, another, so just a quick clarification again. So we had an attachment to the agenda that has future meetings and then it has items next to it. Am I correct? And I think Council Member Cox made this assumption that the numbered lines that are next to that meeting, that's sort of the proposed, what's going to be on the agenda? Yeah. |
| 03:31:56.71 | Sarah Mastrianni | Yeah, it's in progress, but that's proposed at this point. |
| 03:31:59.58 | Unknown | Okay, gotcha. Thank you. Thank you for that. |
| 03:32:00.96 | Sarah Mastrianni | Thank you. |
| 03:32:00.98 | Unknown | Thank you. |
| 03:32:01.01 | Sarah Mastrianni | Thank you. |
| 03:32:01.17 | Unknown | Right. |
| 03:32:01.35 | Sarah Mastrianni | So. |
| 03:32:01.72 | Unknown | Yes. |
| 03:32:01.76 | Councilmember Comin | on that topic. So item 11, the GAD or... |
| 03:32:02.25 | Sarah Mastrianni | THE END OF THE END OF THE I mean. |
| 03:32:06.67 | Councilmember Comin | and they don't see. Geological Assessment District? Yes, yes, of course. Would you, let me, do you want any assistance in bringing a former FEMA expert to speak to that, or is this something that the staff is providing? But just if you need outside help, I have a great person. |
| 03:32:23.17 | Sarah Mastrianni | Okay, we can definitely be in touch on that. All right, any other reports of significance from members of the council? Okay, seeing none, I also want to adjourn the meeting in honor of Cesar Chavez Day, which is observed on March 31st. Cesar Chavez was a champion for social justice and an advocate for hardworking people. He had the strength to confront extraordinary adversity and conviction to fight for what we believe in. So we're going to go ahead and adjourn the meeting in his honor at 10 39 p.m. The next regularly scheduled city council meeting will be on April 23rd at 7 p.m. Thank you everybody. |
| 03:32:59.86 | Unknown | Thank you. |