| Time | Speaker | Text |
|---|---|---|
| 00:00:00.03 | Unknown | Thank you. |
| 00:00:02.04 | Unknown | you |
| 00:00:02.19 | Unknown | Thank you. |
| 00:00:12.74 | Unknown | that are at the end. Thank you. |
| 00:00:21.61 | Unknown | Okay, great. |
| 00:00:23.10 | Walfred Solorzano | Okay, great. Absolutely. |
| 00:00:23.82 | Unknown | you She's still facing the breakout room. She's not supposed to be on the screen. |
| 00:00:29.06 | Walfred Solorzano | Okay, let me close that. |
| 00:00:31.33 | Unknown | Yeah, okay, there you go. Thank you. |
| 00:00:33.46 | Walfred Solorzano | you |
| 00:00:33.49 | Unknown | Thank you. |
| 00:00:33.56 | Walfred Solorzano | Bye. |
| 00:00:33.59 | Unknown | And then... |
| 00:00:34.00 | Walfred Solorzano | and then, |
| 00:00:34.12 | Unknown | one more. |
| 00:00:34.52 | Walfred Solorzano | moment. |
| 00:00:34.93 | Unknown | We'll just put it down here and we'll just say. |
| 00:00:41.44 | Walfred Solorzano | Good morning, City Council. The meeting for the May 2023 special City Council meeting is live and in person. At the moment we don't have any guests, but it's also available on Zoom. And there is a passcode for the new Zoom guidelines and it's 1, 2, 3, 4, 5, 6 to get in. And we will try to make those changes so we don't use a passcode anymore for the future. All right. |
| 00:01:12.76 | Unknown | Thank you. |
| 00:01:13.78 | Walfred Solorzano | Oh, sorry. |
| 00:01:18.35 | Unknown | Thank you. Thank you, city clerk. I will now call this special meeting of the city council to order at 11.04 AM. And if you could please call the roll. |
| 00:01:29.00 | Walfred Solorzano | Councilmember Cox. present. Councilmember Hoffman. |
| 00:01:33.77 | Unknown | Thank you. |
| 00:01:33.81 | Unknown | here. |
| 00:01:33.97 | Unknown | I'm sorry. |
| 00:01:34.06 | Unknown | Thank you. |
| 00:01:34.63 | Walfred Solorzano | Council member Kalman. |
| 00:01:35.95 | Unknown | Yeah. |
| 00:01:36.57 | Walfred Solorzano | Vice Mayor Sobieski. Here. and Mayor Blasdine. |
| 00:01:39.68 | Unknown | And I just wanted to make a note that Councilmember Cox will be participating remotely. Thank you. |
| 00:01:45.31 | Walfred Solorzano | And I think per the city attorney, I think we have to make an approval for that. So, |
| 00:01:50.97 | Unknown | Yeah, I don't have any language here from the city attorney, but I understand that this is an exception according to... Hi, Sergio. You can weigh in. |
| 00:01:57.67 | Sergio Rudin | Hi folks. Yeah. So, uh, council member Cox needs to basically briefly state the facts and circumstances of why she's appearing remotely. And the council needs to vote by majority vote to allow her to appear remotely for emergency circumstances. |
| 00:02:11.45 | Unknown | So my mother was taken suddenly ill and I am attending to this family emergency, which requires me. to be on the East Coast for the next week. |
| 00:02:26.15 | Unknown | Thank you. Okay. Can I have a motion to approve Councilmember Cox's participation remotely, please? I move. Second. All in favor, say aye. Aye. |
| 00:02:34.03 | Unknown | Okay, fantastic. Great. Thank you. And well wishes for her mother and her mother's recovery. So sorry. |
| 00:02:40.29 | Sergio Rudin | I will say, since we do have a remote participation, we have to do roll call votes. |
| 00:02:45.95 | Unknown | Oh, okay. Roll call vote. |
| 00:02:47.41 | Sergio Rudin | Mm-hmm. |
| 00:02:47.78 | Walfred Solorzano | I'm sorry, I forgot about that. Customer Cox. |
| 00:02:50.67 | Unknown | Yes. |
| 00:02:51.19 | Unknown | Thank you. |
| 00:02:51.72 | Walfred Solorzano | Councilmember Huffman. |
| 00:02:53.41 | Unknown | Yes. |
| 00:02:53.88 | Walfred Solorzano | That's why we're coming. |
| 00:02:54.67 | Unknown | Yes. |
| 00:02:55.26 | Walfred Solorzano | Vice Mayor Sobieski? Yes. Mayor Blostein? |
| 00:02:57.89 | Unknown | Yes. |
| 00:02:58.52 | Walfred Solorzano | right? Unanimously. |
| 00:02:59.97 | Unknown | Okay, so the first item on our agenda is to begin discussions in closed session. We have conference with labor negotiator, government code section 54957.6. SEIU Local 1021 and Sausalito Police Association. So I'm going to go ahead and open up the closed session for public comment at this time. |
| 00:03:19.24 | Walfred Solorzano | There are no members from the public in council chambers, and there is nobody with their hand raised. |
| 00:03:28.25 | Unknown | Okay, I'll go ahead and close public comment and we will adjourn to closed session. |
| 00:03:37.53 | Unknown | Walfred, can you tell me which link it is for closed session? |
| 00:03:40.86 | Walfred Solorzano | We're going to put you into the breakout room right now. Thank you. |
| 00:03:43.19 | Unknown | Okay, thank you. |
| 00:04:15.49 | Unknown | No, it is. |
| 00:04:34.94 | Chad Hess | Hey, Walford. Yes. Can you make me a co-host so I can mute and unmute as needed? We'll do that. Thank you. |
| 00:04:45.67 | Unknown | I'm just meeting the classroom. |
| 00:04:49.59 | Walfred Solorzano | Yeah. |
| 00:04:51.58 | Unknown | Thank you. |
| 00:04:52.04 | Unknown | Thank you. |
| 00:04:52.14 | Unknown | Thank you. |
| 00:04:53.52 | Walfred Solorzano | Same as my luggage. |
| 00:04:56.05 | Unknown | And now everybody knows. |
| 00:04:56.96 | Chris Zapata | Yeah, we're done. |
| 00:04:57.81 | Walfred Solorzano | I think it's a Spaceballs joke, but I think it was one, two, three, four in Mount Brooks. Thank you. |
| 00:06:16.97 | Unknown | Okay, welcome back to our special city council meeting on Monday, May 22nd. And we're going to begin now with our business items. The first and only business item on the agenda today, item 4A, is infrastructure and the personnel budget. |
| 00:06:31.88 | Walfred Solorzano | Mayor, one moment. Did we have any reportable action? |
| 00:06:32.48 | Unknown | Yes. We have no reportable action from a closed session. So item 4A is infrastructure and the personnel budget. And we have our city manager and our budget director, both here with us. So we'll start with the city manager and then we'll hear from Director Hess. |
| 00:06:52.44 | Chris Zapata | Thank you very much, Mayor, members of the council. I'd first like to begin by thanking you for your time this morning and tomorrow night to talk about what's really important and your focus on our finances, your focus on our infrastructure and your focus on our personnel over the last three months has been really, really important. And I thank you for that. As we get into interim director Chad Hess's presentation, I want to let you know he's going to go through a number of funds, but as part of the presentation, I don't want it to get lost, but there's a specific recommendation in there that as we start talking about some priorities for some funding, I really want you to focus on a recommendation that says we need to do better by our streets, better by our storm drains, landslide mitigation, and our facilities. So that'll come out, but I wanted to highlight it so it didn't get lost in Chad's presentation. So at this time, I'll turn it over to interim director Chad Hess. |
| 00:07:51.91 | Chad Hess | Thank you, City Manager Zapata. I appreciate that. Um, Mayor and council, thank you for the opportunity to bring forward our discussion tonight or today on infrastructure and people. Let me clear my screen. Today is designed to be more of a working session, lots of questions, answers, hopefully meaningful discussion that we're able to to how. to really get to what's the proper level of staffing positions that we want to bring into the city. reorganize my screen here, sorry. All right. Tonight, I really want to start with with the people component. I believe our HR DIRECTOR DEBRA IS IN. in person today. Is that correct? Yep, okay, perfect. So I wanna start with the people discussion before we talk about CIP, just because she has to depart for another engagement. I really wanted to start with, Are people right here, people and services. So as we discussed earlier in the meeting two weeks ago that people represent over 50% of our total expenditure budget across all funds. Um, As we walked through that or presented last two weeks, we I told you the full Staffing. as well as max tier for paying. That also included the highest cafeteria level. So the employees benefits for their healthcare, et cetera. That was going to be the maximum that we felt the city would pay for staffing. And we realized that there's a lot of extra room in that budget. simply because not everybody starts at top tier, not everybody elects that highest level of benefit for the cafeteria plan. So with that being said, there were three positions and in the initial staff report, I did list four, but it was brought to my attention that the real estate portfolio manager was approved by the city. council back in fiscal year 2023. So that would not be a new position. It's just been unstaffed up until this point. So the question at hand tonight is, Do we bring on additional project managers and assistance to assist with the city's operations and provide additional services. The two positions, or the three positions at hand are the project manager, to assist and focus on CIP. This position would be expensed directly out of the capital improvements fund. It would not come out of the general fund. And it would assist in coordinating and managing all things capital improvements. So this would be a position that would be utilized or paid for with Measure L funds, since all Measure L funds will be utilized for capital improvements. Um, right now as it stands, Several months ago, Director McGowan discussed all of the projects that they have. They have over 30 projects in work. And I think they're operating with two to three engineers slash project managers, and they are understaffed. Um, Two weeks ago, city manager DeLapata asked or made the recommendation that we bring forward some additional resources to that department. AND THAT IS IN THE FORM OF TWO PROJECT MANAGERS Up on the screen here, I've got the fully burdened rate. for those positions, so that includes their wages, benefits, pensions, etc. for those two possessions. And as we said, one is directly for CIP, The other will be dedicated to the sewer fund. and paid for out of the sewer fund. There is several sewer projects, some deferred maintenance items that need to be addressed in that sewer fund and this additional resource will help enable the sewer fund to move those projects forward at a more expeditious pace. The third position is the HR and recreation aid. this position would be split between human resources and parks and recreation to assist those managers various filings, various administrative work. AGAIN, THIS POSITION OR THIS DOLLAR AMOUNT UP ON SCREEN IS FULLY BURDENED. THAT WOULD HAVE INCLUDED include your wages, benefits, pensions, et cetera. split between HUMAN RESOURCES, and culture around. This position would be paid for out of general fund resources as both of those functions are currently paid for out of general fund. The portfolio real estate manager is an approved position. It is currently unfilled. Um, And if the direction is to continue to offer that opportunity, we will continue to recruit or if we are looking to go another direction that is also an option. I do have the fully burdened rate up on the screen for your review and consideration Um, GOING FORWARD WITH WAGES, Here on this below graph or this graph on the screen here, I have provided the full-time equivalent for various departments. as well as their costs. Um, Now this costs about 12.5 million is our wage and benefits. CALCULATION, AGAIN, THAT IS AT TOP STEP. and everybody assuming the highest cafeteria benefit. If individuals, if we brought everybody back to the employee plus one individual on their cafeteria plan, it would drop this number. roughly to 12.1 million. And I think that was a number that was presented earlier in a closed session. Now, this does not include the pension UAL payment, or workman's comp, those things are outside of our, really outside of our control, but are part of wage and benefits, but they're not something that we have any ability to direct or manager. So this here up on the screen, the 12.5, is simply our wage and staffing. This does include the three positions noted above. So the direction that we would need is do we proceed or move ahead with filling those WE'RE OFFERING THOSE THREE ADDITIONAL POSITIONS TO PROJECT MANAGERS as well as an administrative aid to assist human resources. and Harkin Rex. SO WITH THAT, DO WE WANT TO HAVE A DISCUSSION AROUND WAGES? And I'm sorry around positions. BEFORE WE MOVE TO CIP. |
| 00:14:32.45 | Unknown | Sure, thanks Director Hess. look to members of the council to see if you have specific questions with regards to wages. |
| 00:14:43.34 | Unknown | Thank you. |
| 00:14:43.35 | Unknown | Thank you. |
| 00:14:43.40 | Unknown | What happened? |
| 00:14:43.64 | Unknown | Thank you. Hi, Chad. Thank you for this analysis and bringing us forward for our discussion. Can I ask how you determined what the appropriate wage would be for... the summary that you gave us on, I think, page five? |
| 00:15:00.80 | Chad Hess | Yeah, for these new positions. |
| 00:15:00.85 | Unknown | you |
| 00:15:02.96 | Chad Hess | Yeah. |
| 00:15:03.01 | Unknown | Yeah, you have real estate portfolio manager, 110,000 and some change. Project manager for the sewer, 165. |
| 00:15:07.33 | Unknown | Yep. Yeah. |
| 00:15:10.96 | Unknown | Yeah, project manager, CIP 165 and human resources and rec admin aid or rec aid. Sorry. |
| 00:15:11.30 | Unknown | Thank you. |
| 00:15:11.32 | Unknown | Oh, |
| 00:15:11.53 | Chad Hess | Yeah. |
| 00:15:17.90 | Unknown | So, |
| 00:15:19.62 | Chad Hess | Yeah, so those positions are contract HR director, DEBRA MUCHFOR, DID AN ANALYSIS BASED ON COMPARABLE CITIES, AND I THINK SHE'S MAYBE HEADING UP TO THE PODIUM, Um, What she did is she looked at various cities and various classifications within our geographic region. and pulled job descriptions, job functions, and use that to set a proposed scale for those individuals. |
| 00:15:47.66 | Debra Muchfor | For the HR and rec aid, it is the same wage as our admin aid within the city now because it's a similar level of work. So we didn't have to do that work for that one. For the others, I did look at project managers in our comp area to find reasonable prices for the journey level. which is what we were setting those at. And the real estate manager, the way that we set that salary was last year. We had done the analysis both for internal equity and parity as well as externally. We brought it to you in an agenda item. And we approved that, both the salary and the position for that one. |
| 00:16:39.81 | Unknown | Thank you. |
| 00:16:39.96 | Unknown | Thank you. |
| 00:16:40.20 | Unknown | Thank you. |
| 00:16:40.58 | Unknown | Thank you. Mm-hmm. Go ahead Councilmember Kelman. Hi, Chad. Thank you. Appreciate you putting this together for us. I have a question regarding, I guess, page six of the staff report. So I'm looking at planning and zoning 5.6 FTE. And then I'm also looking at building at 3.5 FTE. Can you just for everybody's clarity, can you walk us through the cost savings that was represented to us a couple of meetings back with... not needing four leaf, new hires. It would have been nice to have had that called out here. But if you could just walk us through that, we can understand where we are. |
| 00:17:14.08 | Chad Hess | Yeah. you Yeah, certainly. I don't have an in-depth analysis of that available at this point in time. Looking at our community development and Um, I'm sorry, planning and zoning and building. Um, This represents our fully staffed department and those new hires. I don't have a cost ANALYSIS OR COST BENEFIT BASED UPON the four leaf contract at this point. I apologize for that. |
| 00:17:45.94 | Unknown | And Chaz, sorry, just to follow up. For clarity's sake, my inquiry is to figure out what the delta is, given that we at some point were told that we'd be saving significant amount of money by moving in this new direction. And I would like to have a thorough understanding of what that cost savings was so I can pay that against these other |
| 00:18:02.68 | Unknown | Thank you. |
| 00:18:02.70 | Chad Hess | So to |
| 00:18:04.54 | Unknown | positions. |
| 00:18:05.87 | Chad Hess | Yeah, I can do a little digging on that four leaf contract. And can I present that information to you tomorrow? Sure. At our at our at our regular city council meeting. |
| 00:18:16.59 | Unknown | Thank you, Chad. And Walford, I think maybe Joan can't unmute. |
| 00:18:19.67 | Debra Muchfor | Thank you. |
| 00:18:22.78 | Debra Muchfor | Chad, you don't have to do that work. We've done that work already, and we'll get that over to you. We presented it at council in a meeting about a month or so back. |
| 00:18:28.72 | Unknown | Thank you. |
| 00:18:28.75 | Chad Hess | Thank you. |
| 00:18:29.11 | Unknown | Thank you. |
| 00:18:33.21 | Debra Muchfor | Okay. |
| 00:18:34.24 | Chad Hess | Yeah. A general conversation around that would really focus around the utilization of our internal staff. If we have enough work and capacity to keep them fully utilized. using their services. you know, compared to a contractor. Right. we would there would be significant savings having an employee. I don't have the actual dollar amount. Debra will provide that to us. The nice thing about the contractor is it's flexible, it's scalable. if we can't keep those staff members fully busy and occupied and being productive in their domain, Um, you know, then they're sitting idle and we may have been better off with a, with an external contractor just simply because of the flexibility within that But if they are fully utilized, there would be a significant savings for them in-house. And we'll provide that for you tomorrow. |
| 00:19:32.42 | Unknown | I had a question for the city manager. Just with regards to the position on HR for Park and Rack and administrative, what was the needs assessment that was conducted in terms of level of service for the addition of that position? And did we previously have a similar experience role that existed and there's been a vacancy since. |
| 00:19:49.16 | Chris Zapata | The real estate manager, Mayor, is that what I heard? |
| 00:19:50.98 | Unknown | No, not real estate manager, the HR and recreation administrative. |
| 00:19:56.23 | Chris Zapata | DEBORAH CAN SPEAK TO THAT, BUT MY UNDERSTANDING IS THERE'S A NEED FOR SOME CLERICAL AND OFFICE ASSISTANCE THAT IS ONGOING. AND, YOU KNOW, WHEN WE DOWNSIZE THE PARKS AND RECREATION DEPARTMENT AND THEN WE WORK WITH THE CONTRACT HR CONSULTANT, THERE'S A LOT OF clerical admin work that's fallen through the cracks and someone needs to be there to float between the two departments and make sure that their staff support to the recreation department as well as the human resources function. |
| 00:20:29.68 | Unknown | Is this a merging between the two? Because I understand someone from our park and rec department recently moved up to the community development department as a planner. So would this be filling that role somewhat? |
| 00:20:40.17 | Debra Muchfor | Thank you. |
| 00:20:40.97 | Unknown | Thank you. |
| 00:20:40.98 | Debra Muchfor | Thank you. |
| 00:20:41.00 | Unknown | Thank you. |
| 00:20:41.04 | Debra Muchfor | There were, well, before COVID, there was an HR tech. before we had to freeze positions that was part of a full-time position in admin. And then... Downstairs, there was a full-time admin aide also for Parks and Rec. Um, so in attempting to find a restoration for that body of work that still exists so that the, um, the HR manager and, The recreation department can have coverage for lower level duties and administrative duties. I split it. Um, as an option in this budget. So if it's something that the council values for the staff, then we can put it in there. It was an attempt at a cost savings instead of two full-time positions. And we can float them. Yeah. |
| 00:21:36.57 | Unknown | Bye. you. Councilmember Cox, did you have any questions? I can't quite see if your hand is raised. No. Okay. No, thank you. Okay, so the immediate direction that you need from us at this point is... whether or not we authorize those three positions. |
| 00:21:51.05 | Chad Hess | That's correct. |
| 00:21:52.42 | Unknown | Okay. And, Do we need to take public comment on item by item or on the business item as a whole city? A journey. |
| 00:22:00.92 | Sergio Rudin | I would recommend just taking one public comment on the agenda item. |
| 00:22:04.67 | Unknown | Okay. I just, if we're going to take action without taking public comment, it feels like |
| 00:22:13.24 | Unknown | Well, can we take public comment before we give any directions? |
| 00:22:15.94 | Sergio Rudin | Yeah. Yes, you have to take public comment before you take action. That is a requirement. |
| 00:22:20.06 | Unknown | We'll have to take public comment twice because we need to take it on the personnel and then on the... CIP. |
| 00:22:27.26 | Sergio Rudin | And that's a perfectly fine way to deal with this issue. |
| 00:22:31.04 | Unknown | Well, just |
| 00:22:31.48 | Sergio Rudin | Thank you. |
| 00:22:31.80 | Unknown | that. Okay, I'm gonna go ahead and open it up for public comment on this item. |
| 00:22:38.54 | Walfred Solorzano | If anybody would like to, if we have any individuals that would like to comment on the item, you can grab a speaker slip, fill it out, and then go over to the podium. If you are on the Zoom application, just use the raise hand function and we'll call you. And if you are by phone and we don't have anybody on there, you can just press start 9. So, um. seen none |
| 00:23:03.93 | Unknown | Okay, I'll go ahead and close public comment and bring it back up here for council discussion deliberation specifically on these three positions. So who would like to get us started? |
| 00:23:04.12 | Walfred Solorzano | of the comments. |
| 00:23:15.26 | Unknown | Yes, Councilmember Hoffman. |
| 00:23:16.27 | Unknown | So we have four positions, but we've already approved in the staff |
| 00:23:27.73 | Unknown | I cannot hear council member Hoffman. |
| 00:23:30.48 | Unknown | That's because I didn't have my microphone on. Okay. So just to start off with a clarification, it's four positions, but I understand we've already approved one, which is the real estate portfolio. So on page five of the staff report, It's real estate portfolio manager, project manager, sewer project manager, cap improvement projects. And then HR and recreation aid mainly for administrative work. And so... I'm assuming we're not going to revisit the real estate portfolio manager because we've already proved that, but we're going to talk about the other three. Right. Okay. That's correct. So with that clarification, my inclination to start off our discussion is to support two of the three. So because I can see revenue streams directly supporting those hires, and that's the project manager sewer and the project manager capital improvement projects. Because I do know that because we have the increase in the measure element for capital improvement projects, significant revenue coming in designated for capital improvements, it makes sense to me that we have a project manager. What I would like to see is specific projects that that capital improvement project manager would be overseeing and a corresponding drop in, |
| 00:24:24.73 | Unknown | Thank you very much. |
| 00:24:44.29 | Unknown | consultants and or contractors and the cost benefit analysis of that. But I do support that and I do understand mainly because we have a dedicated revenue stream for that. Same thing for the project manager for sewers. with the same analysis. I see that we have an independent revenue stream for that. And that, but I would still like to see specific projects tied to the justification for hiring that project manager. I'm still very concerned about our deficit spend budget. So at this point I'm not as motivated to hire what I, what looks to be like an admin aid that can be covered by other types of less expensive strategies. So, and moving people around within the departments if we have to cover that sort of function. So, I'm still adhering to you know, fiscal scrutiny about every spend that we have and how we justify that. So that's sort of my position. It's not a surprise to anybody, I don't think. Thank you. |
| 00:25:49.27 | Unknown | you |
| 00:25:51.01 | Unknown | Thank you. |
| 00:25:51.03 | Unknown | Thanks. |
| 00:25:52.41 | Unknown | Right. |
| 00:25:52.82 | Unknown | Go ahead. Thank you for that, Councilmember Hoffman. Yeah, I'm kind of in that same direction, except... So first of all, my analysis, my vague but concrete recollection is still that there's a significant cost savings from previously approved budget as to CDD, Community Development Department. that I believe should be offsetting what we're seeing before us today. Obviously, we're going to hear more about that, but this was presented to the council. So I feel confident in saying that I just don't have those numbers right in front of me. Now, that said, I apply sort of the same scrutiny, I think, as Councilmember Hoffman. But I would add the HR and recreation aid and I would have some inquiry around whether that would also be in support of our city manager. So I think that if If this is on here, then that tells me that the city manager has determined that people can be more efficient and do their job better and more effectively if they had the support. And so I'm going to defer to that, but I would like to see that extended to his office as well. As the real estate portfolio manager, I don't actually think we're ready for that. We have a really good relationship right now with Cushman Wakefield, and I think we have some Details to prove out about the efficiency and the market rate rentals of our property that I think can be outsourced for now. I don't want to never hire somebody, but I think given our our budget status, I think I can wait on that and work further with Cushman because I think that's a really good relationship we've developed there. Thank you. |
| 00:27:23.59 | Unknown | Well, so starting with where Councilmember Kelman left off, the... The experience so far with Cushman Wakefield has been tremendous. professional. And I think revenue accretive, meaning the cost that we're spending on them is made up manifold over by the the additional revenue the city will get. So I too don't think we should be in any rush to hire someone with the title real estate portfolio manager per se. But dovetailing with our previous discussions, what I do note is that the revenue generated by our Real estate? business and by our parking business exceeds that, generated from our sales tax. So we have two huge business units in the city. that aren't being managed. businesses. They are being managed, either not being managed in a sort of tactical way, but not a strategic one. So I'd like to propose the idea of our thinking not to be authorized today, but that instead of having a real estate portfolio manager, we have something like a chief revenue officer or a revenue generating officer someone who actually looks at our business units as businesses. And by the way, this person could also dovetail in with |
| 00:28:37.57 | Chris Zapata | And by the way. |
| 00:28:41.03 | Unknown | the ombudsman role that we briefly had staffed inside CDD, whose purpose was to help augment economic development in the city that ultimately raises more revenue as well. So this is a role that we should still define the boundaries of but I think could be could generate more than we spend on it and improve our level of service. In terms of the other positions, I don't know that I feel strongly about them, but I thought that the context of our discussion here today would be about level of service. And to me, that's so much more broadly defined than two or three particular positions. I thought we were going to talk about what that means. our town. how quickly does someone answer the phone? How quickly does a complaint get answered? How much time between when you file an application Do you hear back from the city? How long do we think an application process should take how long between a broken sidewalk and its repair or a hedge that's not cut and it being cut. Uh, What is the level of service that our residents want and that we are going to agree to offer and how are we going to measure and enforce that? So that's what I thought the level of service discussion would be. That's not what we have presented here. And I wonder if we want to have that discussion now or sometime in the future. |
| 00:30:01.78 | Unknown | Thank you, Vice Mayor. I just wanted to give Councilmember Hoffman an opportunity to weigh in on the real estate position since the other two council members did so. |
| 00:30:08.26 | Unknown | Yeah, no, thank you. I actually agree. And I hadn't thought about that because I wasn't in the, I should call down the staff report. But I agree with that. And I think Coachman Wakefield has done a great job. I think that we should keep going on that path, see what the metrics are when we're, you know, a year from now about whether or not their assessment and negotiating and revenue generating that's resulted from that. you know, how that matches up against their percentage or whatever it is we're paying them, right? And whether or not that matches what we would pay for a real estate manager, I suspect we're going to get better results from the current path we're on with Cushman and Wakefield. So I would like to continue that. So thank you for bringing that up. I had forgotten about that, or not forgotten about it, but It didn't rise to the level of my analysis. So thank you. |
| 00:31:00.06 | Unknown | Thank you. |
| 00:31:00.13 | Unknown | Thank you. And Councilmember Cox has her hand raised. |
| 00:31:03.37 | Unknown | Thank you so much. And I agree with many of the comments of my fellow council members. I heartily endorse the concept of retaining. the real estate portfolio manager as an unfunded. position for this fiscal year and to continue our reliance on Cushman and Wakefield, which I agree has |
| 00:31:18.98 | Chris Zapata | here. |
| 00:31:23.97 | Unknown | that their performance has been exemplary. I also agree with funding the project managers for sewer and CIP. I... would also endorse funding the HR and Recreation Aid, particularly if we are able as we have with another one of our recreation employees their salary is largely funded by grant funding. And so if we're able to identify some grant funding to help meet that gap, But... I worry that we have some of our high level managers answering phones and performing clerical work because we lack adequate clerical service. I do not want to be penny wise and pound foolish. I'd like to free up. the high level managerial time to actually focus on managerial things. um, and have the assistance that we need. to support them. And that brings me I did want to comment in response to the vice mayor's comments about level of service. I had not understood that this level of service report would be sort of a micromanagement approach to how our city manager manages the employees and how quickly their turnaround time is and that sort of thing, I had thought it was a higher level Um, about what is the basic level of What is the basic number of employees and positions we need to fund in order to provide. a basic level of service, but I was not looking to delve into the minutiae of what that level of service meant. I feel it's our to give directions, to the city manager to carry out and him to figure out. what that adequate level of service is and how to provide that adequate level of service unless there's a specific issue where we're receiving complaints such as, you know, application times for the um, community development department. but, I was not looking to delve into that level of detail at this meeting. I was looking to understand from staff's perspective what positions, are. merited and needed in order for the city to provide a basic level of service? And then how do we go about funding those? And so I appreciate Um, the fact that the project managers that we are considering filling those positions have the ability to pay for themselves and that they will they will help us provide a greater level of value added at a cheaper cost for some of our highest infrastructure needs as well. Council member Kellman. framed it so much more eloquently than me several weeks ago. So, That's my feedback. Thank you. |
| 00:34:36.08 | Unknown | Thank you. |
| 00:34:36.92 | Unknown | Thank you. |
| 00:34:36.94 | Unknown | Thank you very much. Just to respond to the level of service point, I wanted to note that as we all saw in the staff report, Finance Director Hess has laid out this budget with the perspective of a fully staffed team with increases in, with a 10% return increase. So keeping that in mind in terms of overarching full level of service, I appreciate that the city manager spent time thinking about what the needs for his departments are and putting together this request for us to review. I also appreciate and respect the vice mayor's concerns and the residents concerns about what type of job we're doing with regards to response times and being able to provide and respond to services and requests from residents. So I think That's clearly not outlined or ready to be prepared today, but I would be happy to add that to future agenda items as something we could discuss or dig into when there is a preparation for that. Keeping in mind that the city manager is obviously quite thoughtful about how he is running the city and what his needs are. So I think I hear from the council that at least three and then myself as well are supportive of all of the positions except the real estate manager role. um, appreciating that we would then be saving a little over $100,000 now. So the position for the age. HR and recreation aid would probably make sense and sort of even out and also being aware of the CDD savings that we have significantly, one from removing so many four-leaf employees. So I think, yes, just go ahead, Councilman. |
| 00:36:10.97 | Unknown | When you're done. No, it's fine. Go ahead. Yeah, so I just want to also add to, I think this builds on the Vice Mayor's comment around the overall level of service. I understand this is a fully built out, but... I still think there's a relationship between what we execute on and what the quality of life for residents, businesses is, versus what exactly and who we've hired and when and how we're hiring them. One thing that the city manager called out at the beginning of the presentation, which was not discussed by Chad, is this idea of of insurance and backbone infrastructure costs. And those rarely come to light in these conversations, which I think form a significant aspect of our overall quality of life and levels of service. So I not see anything here about our insurance costs. I've spoken to the city manager and I think Chad about something called community-based catastrophic insurance. It's a parametric insurance plan that allows you to plan with some foresight if a particular event is hit based on a data point. Those are the types of things I think can help us have a long-term vision of what's going on. infrastructure costs and quality of life and levels of service. concern about a giant bucket called infrastructure that everything seems to live in. And I would just urge us to apply a little bit more granular analysis to what exactly that is. And my colleagues already heard this from me, but in a previous budget cycle, we opted to no longer have a department head for parks and recreation. Um, Parks and recreation are two very separate types of functions. Infrastructure such as roads and sewer maintenance and storm drains are very different than trees. I want to understand how these core basic functions are being addressed and not get lumped into a giant bucket that we call infrastructure. So I guess my two takeaways would be I want more granularity when we understand levels of service. And I also think we should be evaluating costs associated with past, present and future, such as insurance. We know we had landslide issues. We could pursue things like community-based cash traffic insurance. That would help us plan for those in the future. Yes. |
| 00:38:17.09 | Unknown | Yeah, I would like to echo that. I would like that granularity to in levels of service. That's what I was referring to. And we can have a dialogue with my colleague, Councilmember Cox on that. I don't feel like that's micromanaging. I feel like that's actually very high level actually. So it's funny that we're talking about the same thing and seeing it so If we are the board of directors of a hotel chain, where it'd be. sort of deciding if we're going to be Motel 6, or the Hiltons, or the Four Seasons and those show up in levels of service. room service or not? If so, how quickly does room service come? What's the ratio of employees to guests? those are strategic level choices that are about levels of service. And the question that we want to have from, I think as a resident, I want to have, which is how much tax do I pay and what kind of, |
| 00:39:02.03 | Chris Zapata | I want to. |
| 00:39:05.54 | Unknown | service do I expect for my So I think having that discussion about ways of measuring and measuring the quality of life. and actually deciding how much we want to spend to achieve different measurements. Do we want a parking index of 0.95 or 0.85. To me, that's a quality of life and that's a strategic goal. So, I actually would like to have that discussion. Obviously, you're not going to do it today. And I would love to hear from my colleague and friend, whether she sees that differently, whether that clarification helps, or if we still need to talk something out about that. |
| 00:39:43.09 | Unknown | Councilman for Cox, did you want to respond to that before we? You're on mute. |
| 00:39:47.41 | Unknown | Thank you. |
| 00:39:48.32 | Unknown | here. |
| 00:39:48.52 | Unknown | I, We can agree to disagree as to how granular a level of service dialogue should be and the council can still delve into it if they feel that we need to delve into that level of detail that we So that's just a business call. If the majority of the council wanted delve into that level of detail and granularity, I'm happy to do it. Or, I suppose individual council members could meet and confer with the city manager to better his perspective on those things and decide whether the full council needs to delve into that. |
| 00:40:28.01 | Chris Zapata | If I may, Mayor, I'd like to. Weigh in if I can. |
| 00:40:31.43 | Unknown | Yes, please. |
| 00:40:32.07 | Unknown | Thank you. |
| 00:40:33.12 | Chris Zapata | Yeah. Good conversation and obviously merit in what's being said. But I go back to what's your priority? And, Right now it's your finances, it's your budget. It's your people. and to have the conversation about the budget, we've deviated from what we've always done here. at the request of the city council. We've looked at funding differently to make sure that what we're presenting to the public is a simplified budget. that doesn't have these mysterious funds that are parking or old city hall fund or MLK fund and trying to put that into what is the general fund and how can you apply that to services. Until we do that, I would strongly recommend that we not get into the granular detail of levels of service. Are we going to ask people in the community about what they expect? Are we going to ask them, are people what their times are in terms of response times, counter times, et cetera? All of that is very involved. And I would recommend that that be secondary to the conversation about our budget. And then once you know your budget, then I think you can start to talk about what it is that you believe is a level of services. But if we don't know our budget and we don't know our financial metrics or our financial basics, then to go into the other area to me is going to take us away from the main objective So I'm not saying that you shouldn't do that. I'm just saying right now we should work on the budget. You should allow us to talk about what it is that we've done because we've done quite a bit to change how the city of Sausalito has looked at its general fund. And I think it's all been positive. but to get to level of service at a later date. That's all I'm asking. |
| 00:42:25.95 | Unknown | Okay, thank you City Manager. So I think we can... Okay. |
| 00:42:29.79 | Unknown | And it relates directly to the level of service and how we deploy our staff. And so one of the unresolved issues that we still haven't taken final action on is how we task our staff with regard to boards and commissions and what our policy is going to be going forward with regard to that issue. So whether or not staff has time to get to projects, whether or not staff has time to focus on stated priorities from the city council is still an ongoing issue. And it was an ongoing issue as of our last city council meeting where we discussed this. So I'm sorry that we didn't have time at that city council meeting to take action on it, but I think it falls squarely within service levels and whether or not we even need to hire additional staff without a fair look at how much time is freed up when they don't have to attend Um, Thank you. and commission meetings and all of the lead up to those and then the direction from that board and commission after that meeting, Sometimes the direction is contrary to what it would be if it came up to the city council level. And sometimes we have. Um, countermanded direction once it came up to us, a lot of staff time is wasted. with regard to those efforts. in the context of This, whether or not we need to hire additional staff, whether or not what we want to define as service levels going forward, that's sort of a fundamental policy issue that I hope that we can get to soon. and take action on at the city council level. |
| 00:43:58.24 | Unknown | Thanks. So with regards to the action that's requested by Director Hess, I think we've agreed that we're going to go ahead and freeze the real estate manager position at this time. and authorize the edition of the sewer project manager, the CIP project manager, and the admin aide. Is that direction clear for staff? Okay. Great. Thank you. Okay. So, and, and, and we'll go forward after the budget to have a discussion about levels of service. Thank you very much. Okay, Director Hess, let's continue on the CIP, please. |
| 00:44:28.00 | Chad Hess | Thank you, Mayor and Council. All right. |
| 00:44:31.29 | Unknown | Thank you. |
| 00:44:31.31 | Chad Hess | So, |
| 00:44:32.24 | Unknown | Thank you. |
| 00:44:32.26 | Chad Hess | As city manager Zapata discussed earlier today, the focus of his recommendation is straight storm drains, landslides and then in addition you know, improving city buildings for which grant funding is available to make them more efficient, make them more climate friendly. Um, you know, Our infrastructure, one thing that I want to note is going forward, In the past, all of our measure owe dollars. were receeded into the general fund. Tonight or today I want to propose a slightly different concept where I would like to carve those out of the general fund and put them into a special revenue fund so I can more clearly track them and provide better reporting to council as well as our community members FOR THOSE. SO WHEN WE DISCUSS TOMORROW AND WE LOOK SPECIFICALLY JUST AT THE GENERAL FUND, I WANT TO PRIME YOU THAT those dollars have been taken out of the general fund proper. that will, like I said, provide better reporting in a going forward basis. . Looking at fiscal year 24, we project $2.9 million of revenue from Measure L, the new one cent sales tax which used to be measure, Other CIP revenue sources that we have available to the city our construction impact fees for parking, gas taxes. The county of Marin has multiple different sales taxes Measure A, Measure B, Measure AA, which are directed more towards parks and roads, And then also grant dollars. There's a variety of grant dollars available for capital. We discussed one several weeks ago regarding that, the bike improvement lane on Broadway. So those are the funding sources that we have available for capital. and You know, the city also has invested in the past with various business activities. Our rental units like MLK, Old City Hall, as well as the parking business unit that provided an annual subsidy to the general fund to help fund its operations. One of the primary takeaways two weeks ago was what type of reserves do we need to hold in those funds and what type of deferred maintenance? do those enterprise activities have And if we were going to fully fund them, what would happen to the transfers? We don't want to necessarily borrow or take all of the dollars out of parking if we need to. maintain reserves to replace the service parking lot. So tonight's discussion, when we look at parking fund, I've presented three scenarios that we can talk through. Um, So, What we're gonna do tonight is I have three scenarios. Like I said, scenario one continues to transfer all excess revenues over to the general fund. And. will follow the CIP schedule as presented. So the CIP schedule was presented I think a month ago And it listed repaving lots three and four. Um, that that CIP CIP plan does underestimate the cost to replace lots three and four. There is some updated information that we will provide you. BUT IT DOES NOT ADDRESS LOT 1 WHERE THE QUALITY OF PAYMENT WILL CONTINUE TO DETERIORATE. So this scenario, scenario one, will establish a 20% reserve of revenues, so a function of top line revenues. And it will start a capital project reserve starting at 200,000. and it will increase $50,000 per year. until it reaches an upper bound. And I think we can set that upper bound THROUGH A DISCUSSION. This scenario ignores the need to maintain adequate cash in the fund as our current operating model does. This scenario is not recommended as presented. So let me show that that's going to be attachment four in our packet tonight. and, What I've provided is The current fiscal year, fiscal year 23, as well as the next five fiscal years. Now, This is the line item in question, is this transfer to the general fund. How much do we want to take out of the parking fund to move over to the general fund to help support that general fund? Now, Down here, what we have is we have our revenues, I'm sorry, our revenue is top line. They're expected to increase 3% each year. are expensive. The one thing I do want to note is the change in how our labor is recorded in that fund. As you'll recall, two weeks ago, the labor costs are now recorded directly within the parking fund. So that is one significant pain And that has a reduction on the fiscal year 24s PROPOSED TRANSFER IF WE CONTINUE ON THE PATH THAT WE'RE ON. OK, so now right in here, this reserve section, this is where we set those reserve items. the 20% reserve of revenue. So we're simply taking our top line revenue, multiplying by 20% and holding that within the fund just to accommodate fluctuations in parking revenue in the event of a decrease in tourism. to our community. And then the capital project reserve starts at 200,000 and increases 50,000 each year up until an upper bound that can be determined. Now down here in this section, we have our capital project. CIP. plan as presented, and that's going to be attachment eight. And in that plan, it talks about repairing or repaving parking lots three and four in fiscal year 25. as well as 26. So in 25 would be some preliminary costs. some design work. and then replacing that. These numbers based on some additional information from Department of Public Works are grossly understated. So this is where we were today or where we were two weeks ago, really doing the same thing that we've been doing. taking dollars out of that parking fund and moving them over to the general fund to support its operation. The next scenario that I would like to prevent or provide to you, scenario two, which is attachment five, In this scenario, we're gonna reduce the transfer to the general fund in fiscal years 23, so the current year. and 24. WE'RE GOING TO REPAIR PARKING LOT 1 IN FISCAL YEAR 25. And then we're going to establish again that reserve policy of 20% of revenue. and then we're gonna retain any reserve capital in that fund to replace the parking lots three in fiscal year 27 and four in fiscal year 28. After these repairs, we're gonna continue the 20% reserve and slowly build capital for a future pavement replacement. Um, Based on a conversation with Director McGowan, these parking lots are expected to last. around 15 years from the time of replacement. So we need to continue to think forward as we, as we, we move forward to make sure that we have these resources available. Looking at attachment five, Here are the major updates. Um, we're going to change our fiscal year 23 transfer. We're going to reduce that. to keep some dollars within the parking fund. It currently stands $2 million. we would bring that back to 1 million. WE WOULD ALSO REDUCE THE FISCAL YEAR 23 TRANSFER which 24 stands, 24 transfer, it currently stands at 1.5. we bring that back to $500,000, again, to reserve those dollars within that fund. Here are the costs that Director McGowan provided for replacing those parking lots. So parking lot one, the largest of the three It's projected to cost about $2.9 million to repair that parking lot. Parking lot three is 2.4 million. and parking lot four is 1.8 million. Now, this, extends that. ABOVE OPTION 3, WE'LL TALK ABOUT THE NEXT OPTION, BUT THAT BRINGS THOSE TIMELINES FORWARD JUST AS ANOTHER ILLUSTRATION. But here you can see that we have had to reduce those transfers and that's going to impact the general fund. We have some scenarios or some values to show you there. And then it keeps that transfer around $500,000 going forward. I'm not sure. The main purpose of that is we need to really reserve those funds within this parking fund. If we choose to maintain that parking structure, those parking surface lots, and replace them as they become obsolete. |
| 00:53:22.33 | Chad Hess | the next scenario. which is attachment six. Again, we're going to reduce those transfers in fiscal year 23 and 24. And then we will expedite the replacement of those lots. We're going to replace in fiscal year 24, lot one, lot three and 25. I think that should be 26. I apologize. And then lot four will be fiscal year 27. We move that up a year. Once the remaining three lots are replaced and established, a 20% reserve, will be put in place. 20% reserve of revenues. And then we will follow a reserve schedule. WHICH IS ATTACHMENT 7 TO HELP US SAVE FOR THOSE FUTURE REPLACEMENTS. |
| 00:54:03.05 | Unknown | Um, |
| 00:54:03.30 | Chad Hess | What I did there is I took those costs, today's costs, and kind of forecasted out using an inflation index REPLACE THOSE PARKING LOTS 15 YEARS FROM THE DATE OF THIS CURRENT REPLACEMENT. And then we time value or discount back those costs So we can save a little bit each year and add to our reserves. Um, Let me show what that looks like, attachment six. HERE, OUR REVENUES ARE STAYING CONSTANT, OUR EXPENSES ARE STAYING CONSTANT, The one thing. is gonna be our capital, our CIP, based on the timing. Um, $2.9 million could be spent in fiscal year 24 to replace lot one. fiscal year 26, 2.4 million, and then Fiscal year 27, 1.8. This does drastically increase the transfers to the general fund. |
| 00:54:58.69 | Unknown | Um, |
| 00:54:59.80 | Chad Hess | AND WE'LL TALK ABOUT THE IMPACT ON THE GENERAL FUND HERE we would reduce the fiscal year 23 transfer to $500,000. That's a $1.5 million decrease in the current year. to reserve those dollars within the parking fund There would not be a transfer in fiscal year 24, so we would use up some of our available resources in the general fund. in fiscal year 24, And then we would resume transferring 500,000 to the general fund in subsequent years YouTube. BASICALLY MAINTAIN SOME SORT OF SUBSTITY OF THE GENERAL Our 20% reserve. |
| 00:55:36.88 | Unknown | 20% reserve. Councilmember Cox had a question. |
| 00:55:38.80 | Chad Hess | Yes, yep. I'm sorry. Go ahead, Councilmember Cox. |
| 00:55:45.64 | Unknown | Thank you so much. You're talking a good bit about parking lot one with a $2.9 million price tag. Does that take into account the grant funding from the repair from the ferry landing? project. |
| 00:56:01.26 | Chad Hess | That's a good question. I think that's... Just the cost to replace the lot. I don't know about that revenue side. If there are some additional dollars that was not That wasn't given to me. |
| 00:56:12.92 | Unknown | Yeah. There's $2.4 million in grant funding as I understand it, coming from the Golden Gate Bridge District as a part of their upgrade of the ferry landing. And Councilmember Hoffman is probably more up to speed and up to date. |
| 00:56:28.07 | Unknown | Okay. |
| 00:56:29.75 | Unknown | on this than me. But that was my understanding. |
| 00:56:32.92 | Chris Zapata | Director McGowan can fill in some gaps there if he can, Mayor and Council. That would be helpful. Thank you. |
| 00:56:39.60 | Kevin McGowan | Good afternoon, Mayor and Council members. I'm Kevin McGowan. Public Works Director. I got a bad cold, so I'm sorry if I... They don't sound right. But regardless, the numbers that were thrown out by Director Hess, have to do with extrapolating the numbers associated with the reconstruction of parking lot two. So what we did is we just took those numbers and we extrapolated them out to say, okay, we're going to remove everything in parking lots three and four. and tried to get a very, very conservative number. The original numbers that I had in the CIP We're about six or seven hundred thousand just for resurfacing the lots by themselves. And we took a more conservative approach to take a look at the numbers. that Director Hess was looking for. That's why you have such a larger number. To answer Councilmember Cox's question, no, the number 2.9 for lot one does not include the grant funding associated with redoing the plaza as well as micro-surfacing the lot itself. It would be in addition. So what we're trying to do is get a conservative number. You can see that there is kind of a breadth of numbers throughout there. Hopefully that answers the question. |
| 00:58:00.57 | Unknown | Thank you, Director McGowan. |
| 00:58:03.79 | Kevin McGowan | Thank you. |
| 00:58:03.81 | Chad Hess | So this, yeah, it sounds like this is in addition to that that ferry landing project, this would be just the parking lot. lot one. |
| 00:58:17.85 | Chad Hess | Thank you. |
| 00:58:17.97 | Unknown | Okay. |
| 00:58:18.18 | Chad Hess | Um, |
| 00:58:22.74 | Chad Hess | Once those lots are repaired, IN FISCAL YEAR 27, THAT'S WHEN WE WOULD RESUME Um, holding back 20% of revenues. We forego that in the early years simply because we are really accelerating the replacement of those lots and using all available resources to repair those surface parking lots. In fiscal year 28, we would then start saving 20% of those revenues for a revenue reserve And then we would implement a schedule, a savings schedule, where we would set aside a number of dollars each year based on the present value of that future replacement cost for these lots. Um, ATTACHMENT 7 IS when we would would be the saving schedule. And we would save anywhere from, you know, quarter million dollars in fiscal year 25, all the way up to, you know, six and a half minutes. $646,000 fiscal year 35. Ultimately, after 15 years, that lot would then need to be replaced and the schedule or the cycle would start over. but this really represents what is that annual savings that we need to set aside in order to meet that need down the road to replace these parking lots 15 years after their replacement. |
| 00:59:52.53 | Chad Hess | So. Scenario two and three are kind of a hybrid and would probably be a more desired path forward than our existing scenario one. |
| 01:00:03.86 | Unknown | Um, |
| 01:00:04.45 | Chad Hess | Again, both of these scenarios decreased the general fund subsidies substantially in near term. However, once the pavement is replaced, A FUNDING SCHEDULE IS ESTABLISHED, FUTURE REPAIRS, YOU KNOW, FUTURE um, subsidies could resume as we've seen on the schedule. The impact to the general fund, I do have some information. later in the slide, but I think it's important that we talk about that now. Um, since the largest subsidy from our enterprise units or the largest transfer is from parking to the general fund. What does that do to the general fund for fiscal years 23 and 24? Um, So, I have some information available on fiscal year 23, um, What I have is I have A FEW DIFFERENT scenarios or options here based upon our projection. So looking at the table below, Um, THE GENERAL FUND, FUND BALANCE AS OF FISCAL YEAR? 23. So this was our projected fiscal year 2023 numbers, we're projecting a five, 511. $1,000 deficit in the general fund proper. That was based upon our mid-year which we discussed early, early, early March. Now, Additional analysis has been done on the general fund and I project it will turn out much better than this deficit of $511,000 based on where we are at. We've got just over a month LEFT IN THIS FISCAL YEAR. And I'm able to look at where our expenses are and where our revenues are and look at the projections for additional sales tax dollars DOT taxes and business licenses are large revenue sources that are yet to come in. I believe that our general fund will end the year as a positive surplus based upon this information that's available to me today. So we've got about 1.1 million based upon those projections. And I'm simply showing where we started. So this is what we were starting at our mid-year. Here's where I think we're gonna end based on what's available to me today. and try to highlight that column. And then I also present kind of a middle ground. If we just end the year at a balanced budget, what would that look like? So this information here really represents THE END OF FISCAL YEAR 23. Now, if we do end the year with a positive surplus of about $1.1 million, it is the city manager's recommendation that we take those funds and invest them into the section 115 trust. Um, That would enable us to continue to plan and save resources for when our pension UAL payment does increase. Thank you. |
| 01:03:13.72 | Unknown | I'm going to go. |
| 01:03:13.77 | Chad Hess | Um, So that information here is, something to consider. But then when we look at Um, OUR RESERVES, SO IF WE END THE YEAR, YOU KNOW, WE'RE AT A And then our fiscal year 24 is having a projected deficit of four, 425,000. where would our reserve balance end in the general fund? So based on those three scenarios, I'm projecting anywhere from a $12 million fund balance reserve up to 14%. point five million. fund balance, total fund balance within the general fund. Now, Our fiscal year 24 expenditures are projected to be 20.7 million. AND WHEN WE DO THE MATH BETWEEN WHAT IS assigned and unassigned, this assigned again being our reserves our budget stabilization and our emergency Um, shortfall reserve. 15 and 10% respectively of our expenses. We have between 47% of the next year's expenditures within those assigned and unassigned categories. all the way up to 55%. depending upon where fiscal year 23 ends. The point that I want to get across is we have a fair amount of dollars sitting in that general fund, continuously slowly building over a period of time. We have idle dollars sitting there could be deployed. Now, if we choose to invest more into infrastructure and maintain those parking lots, THE NEXT TABLE THAT I WANT TO SHOW YOU IS WHAT IS THE IMPACT ON THE GENERAL FUNDS fund balance. So, Now, if we look here, based on those three options, the parking fund options, one is kind of the status quo, Option two is a slower replacement of those parking lots. And the option three is a faster replacement. What is the impact? So in these scenarios, what I did is I took my projection. I'm projecting 1.1. IN THE POSITIVE FOR FISCAL YEAR 23, And I said, what if I'm half wrong? What if I'm, we only in the year half a million dollars up, five, 578,000. So I'm being very, very conservative in that. I'm not going to be able to do that. I took the projection, cut it in half, And then what I did is I stuck with the fiscal year 24s budget as presented, $425,000, which we'll discuss tomorrow. what would that do to the opening balance of fiscal year 24 general funds? So we would have 13.9 million. And again, we take that information, we allocate it between the non-spendables. THE RESTRICTED, THE ASSIGNED AND UNASSIGNED. SO, AGAIN, THIS IS THE STABILIZATION AND THE BUDGETARY SHORTFALL. And then this is the honest sign. we would end the year at about 52% of available fund balance. compared to those fiscal year's expenditures. Now, option two, IS IF WE WOULD IMPLEMENT THE SECOND OPTION of our parking. So here we would reduce the fiscal year 23s. So we would reduce the transfer in fiscal year 23 And then it would generate a deficit in the general fund that year, because we're holding back some of that general fund subsidy. And then we would reduce the fiscal year 24s TO BE ABLE by a million dollars. So we would only transfer 500,000 in this option instead of the 1.5 million in fiscal year 24. So the net effect of that is it's gonna reduce that reserve, the unassigned and the assigned, down to 43% of general fund expenditures. That is a very, it's a healthy, fun balance. Option three is the accelerated parking replacement. where we eliminate the transfer In fiscal year 24, so there is no transfer in fiscal year 24. and we reduced the fiscal year 23's transfer to simply 500,000. WHAT YOU'VE SEEN ON ATTACHMENT Um, on attachment seven. I'm sorry, on attachment six. Now, with that being said, and we hold things constant, Um, Our general fund reserve would then decrease to 38%. and unassigned would then be reduced to 38% of fiscal year 24's expenditures. So we could possibly reduce that general fund Total fund balance down to 10.9. 10.9 million. |
| 01:08:17.05 | Unknown | million. |
| 01:08:17.97 | Chad Hess | Now, depending upon which direction we want to go, if we want to invest in those parking lots you know, today, or if we want to defer it a little bit longer, that would be the overall impact on the general fund is reducing the total fund balance from 13.9 down to 10.9. And that's simply by reducing those transfers out of the parking fund into the general fund. |
| 01:08:44.80 | Chris Zapata | Mayor and council, if I may, I want to. piggyback on what Chad's telling you, the good news is progress is being made and that's for sure. And as you talk about your general fund reserve, I think the next work that's got to be done besides your service level discussion is what your reserve level comfort level is, because that's going to drive a lot of things that we will do in the future with our budgets. And I'd also like Chad to clarify the $1.1 million, how he came to that number and how we are in, you know, in a better position. Why that is because, as I understand it, it comes from some less expenses as well as, you know, better revenue, but there are also little facets to it that I think the public should hear. So I'd like him to walk through that $1.1 and how he got there. |
| 01:09:31.80 | Chad Hess | on. Yeah. the change in fiscal year 23 between our mid-year projection AND OUR 2023 of projection where it stands now. the primary, um, driver of that is going to be wages and benefits. A large portion of that that basically one and a half million dollar swing About a million of that is salaries and benefits has been reduced. The other 500,000 is A REDUCTION OF SUPPLIES AND MATERIALS. THE DEPARTMENT HEADS DOING A REALLY GOOD JOB OF CONTROLLING THEIR EXPENDITURES. AND THEN A REDUCTION IN Professional services is also being realized in the general fund by a less reliance on outside contractors to perform ACCOUNTING AND FINANCE AND THEN CDD ACTIVITIES. So. There's always been salary savings in our budget, and that is what we're seeing. year is about $1 million of salary savings by unfilled positions. and vacancies that are taking longer to fill. as well as there is some additional margin or buffer within our budgeted numbers to the actual number that we see for wages and benefits. |
| 01:10:50.83 | Chris Zapata | Thank you. |
| 01:10:50.84 | Unknown | one last thing. |
| 01:10:51.62 | Chad Hess | Thank you. |
| 01:10:52.19 | Chris Zapata | Chad, one last thing. Yeah, yeah. The impact of the 21% return on investment that CalPERS got, how does that factor into this conversation? |
| 01:11:01.31 | Chad Hess | Yeah, yep. So that's gonna be in fiscal year 24. AND THAT'S ON TOMORROW'S THAT'S ON TOMORROW'S SLIDE. Um, So the... the general fund, The last time we spoke, had Measure L's dollars inside the general fund. And we were only transferring about half of it out. And we had, I think a $465,000 projected deficit. So, What we did on this next version of the budget that we present tomorrow night is we took those measure L dollars completely out of the general fund. They don't touch the general fund at all. They're putting a special revenue fund and as the Department of Public Work, brings projects forward and they're presented will draw those dollars down. So, At that point, we were looking at a very large deficit in the general fund because we removed that revenue source. Now, in my additional analysis, I realized that I was using a prior years UAL payment. So the UAL payment to CalPERS. That was reduced by Let me back up. The UAL payment from what I was using to what it actually is in fiscal year 24 was reduced by about $900,000. because of a better than expected investment return on CalPERS, as of June 30th, 2021. There's always like a two year lag behind their experience within the plan, and how it impacts our UAL. On tomorrow's staff report, you can see a graph on how everything just shifted down. Now, That's good news for fiscal year 24 because it helps us. keep that deficit lower. But I do caution you that this isn't all great news because if we think back to June 30th of 2022 when the markets were depressed, the Actuarial results will come out next year and our UAL payments will jump right back up. though. It's not a permanent savings, but there is a savings on the CalPERS plan. in fiscal year 24. THAT IS REALLY DRIVING THIS you know, $425,000 deficit. It could have been much, much larger. Um, But that's what City Manager of the pot was referring to and we'll go a little bit deeper into that tomorrow night. |
| 01:13:42.44 | Unknown | Thank you, Director Hess. I appreciate that explanation. And it's great to see that we'll be in a better fiscal position than we had anticipated. So that's always good news, though. We obviously still need to be very mindful about future years and deficit spending. So with that in mind, do we want to? I think it looks like the action item that we need to decide upon today is option one, two, or three with regards to... the parking fund and the general fund. So we'll do questions on that and then public comment and we can provide direction to city staff. I'm happy to start with questions if other folks don't have any. I have a question for Director McGowan. uh, Thank you. So just so that people, the public understands the conditions of our parking lots currently, could you maybe speak to our PCI or pavement condition index score and what might happen should we not update these parking lots in a timely fashion? |
| 01:14:38.30 | Kevin McGowan | that's, So hello again. Our pavement condition index doesn't pertain to the parking lots. It only pertains to the roadways themselves. And so our parking lots are impacted by the trees that are parked throughout them in some cases. Lot four looks pretty good, which doesn't have as many trees, but it does have some of the pine trees in the area that are pushing up the asphalt. That's why on the original CIP, Sorry, the original CIP, I kind of pushed this out to 2027, thinking that we could last a couple more years before we took some more drastic measures out there and resurfaced some of the parking lots. I think what Director Hess is referring to is having to do with the fiscal part of that. How do we strategize about how to deal with that? So we do have some impacts on our parking lots. We've got some trees, tree roots that are pushing things up. We have some older trees in lot one that probably should be replaced as well. And so we've got kind of a lot of moving parts, so to speak, at this point. But. Hopefully that addresses your initial question. Thank you. |
| 01:15:42.58 | Unknown | I have a question, I guess. Please. Thank you. So, Chad, maybe it's for Director Ryan, too. Chad, how much unrestricted cash does the city have currently? |
| 01:15:55.91 | Unknown | You're muted, Director Hess. We can't hear you. |
| 01:16:01.34 | Chad Hess | Bye. There we go. Our unrestricted cash It hovers right around 20 million. Right around how much? 20 million. Of unrestricted cash. |
| 01:16:10.19 | Unknown | 20 minutes. If we wanted to pave those parking lots today on a one-time expense, you could do that. just taking money out of that. We don't need to save money to do it. In other words, 20 million in cash to pay at the parking lot. |
| 01:16:23.38 | Chad Hess | Wait. |
| 01:16:23.80 | Unknown | Thank you. |
| 01:16:23.94 | Chad Hess | you |
| 01:16:23.97 | Unknown | We could. |
| 01:16:24.70 | Chad Hess | Thank you. Yes. We could write a check if we chose. to pay for that. |
| 01:16:31.43 | Unknown | Yes. to that. And similarly, if there's a building that needs to be replaced at MLK, we could build that building out of could draw on those reserves for that. We could. Savings. |
| 01:16:41.03 | Chad Hess | We Hopefully we don't have to do both in the same year, Yes, to your point, we could repair a building at MLK or replace a building. if we needed to. Thank you. |
| 01:16:53.52 | Unknown | Okay, thank you. |
| 01:16:58.13 | Unknown | Did you have a question? Yes, Councilman Proppin. |
| 01:17:01.30 | Unknown | So let me follow up on that, Chad. When you say unrestricted cash, are you talking about money in funds that are unrestricted funds? |
| 01:17:12.45 | Chad Hess | Yes, so let me pull up a let me pull up something that I was going to present tomorrow. because that will help, I think, illustrate where these dollars are coming from. |
| 01:17:33.11 | Chad Hess | All right, so this is attachment eight for tomorrow night. And, WITH OUR UNRESTRICTED, I'M COUNTING THE GENERAL FUND, Old City Hall, MLK Parking Bank of America. And we've got 20,351,000 in cash. And... or essentially CAC, since we convert a lot of these to to, to, on cash basis. Next we have all of our special revenue and capital project funds. These are really important. dollars that are restricted to use But if we think that if they're restricted to use, but we simply need to be more intentional about spending those dollars |
| 01:18:14.22 | Unknown | first. Um, |
| 01:18:16.16 | Chad Hess | A lot of these dollars here are the ones that are marked with the little C next to it. These are funds that Director McGowan pulls dollars from as he's doing his CIP project. So you've got another $6.5 million in special revenue and capital project funds. Those are a semi-restricted dollar, if you will. We can't spend a lot of these on, on park and rec employees or police officers. Um, The need or the spending restriction is in our city if we're intentional of identifying it. we can code the expense to these. And then we have another 2.6 in basically debt service funds or OPEB trust funds. |
| 01:19:01.60 | Unknown | Okay, so to follow up on that, if you look up at the top of your list there, unrestricted funds, You have a general fund at 13 million, and then you've got Old City Hall, MLK, Parking, and Bank of America. So not talking about the general fund, but these other four funds below that. you know, am I correct that these are all, these are all real estate or asset revenue generating assets for which funds were set up to help protect those assets to do capital improvements on those assets. Is that, Is that a fair question? |
| 01:19:35.28 | Chad Hess | Is that a fair description? Yes. The intent of setting them up as separate funds was A to B to help provide visibility on their performance. as well as save assets to replace them. Um, IT IS A It muddies the water when we talk about where is our cash because they're in separate buckets, but ultimately they were set up to save resources for them for their to save resources to maintain those investments. |
| 01:20:10.00 | Unknown | Because they're revenue generating. If you let those waste, then your revenue is going to go down. And we rely on that revenue. AS REV. Yeah, especially on MLK. |
| 01:20:17.99 | Unknown | Thank you. |
| 01:20:18.03 | Chad Hess | Yeah. |
| 01:20:18.27 | Unknown | you |
| 01:20:18.32 | Chad Hess | Yeah. |
| 01:20:20.97 | Unknown | we rely on that revenue to also pay off |
| 01:20:25.17 | Chad Hess | use. |
| 01:20:25.79 | Unknown | Essentially, the bonds or the loans that we took out to pay for the increase or the updates of our three major parks. So the payments for Dunphy for, well, also MLK. So MLK, Dunphy. |
| 01:20:35.70 | Chris Zapata | Yes. |
| 01:20:42.26 | Unknown | South U. What am I missing? |
| 01:20:44.52 | Chad Hess | Robin Sweeney. |
| 01:20:45.84 | Unknown | Robin Sweeney, sorry, Robin Sweeney Park. We took out essentially loans pay for that and this revenue pays for that loan debt service. Is that correct? |
| 01:20:50.21 | Chad Hess | Yeah. |
| 01:20:55.04 | Chad Hess | That's correct, yeah. So, so we, On average, we bring in about 1.4 million in MLK. And our debt service payments is about $620,000 per year. up until fiscal year 2030, fiscal year 2030. |
| 01:21:13.48 | Unknown | Okay. And then the other listing of those other various funds, the restricted funds, they're all restricted in different ways, but there's a purpose about why those funds are restricted. |
| 01:21:25.51 | Chad Hess | Yes. |
| 01:21:25.95 | Unknown | I was by those, correct? |
| 01:21:27.44 | Chad Hess | Yes, but that need does exist within our community. And it's just a matter of being intentional of spending that dollar first. |
| 01:21:34.61 | Unknown | Okay, so thanks. I have some further comments, but those are my questions at this point. |
| 01:21:38.79 | Unknown | Can I add one thing to that line of questions? So Chad, I'll just share the conversation you and I had had probably last week, I had asked about the vacancy rate at MLK. So, yeah. |
| 01:21:48.83 | Unknown | Yeah. |
| 01:21:49.20 | Unknown | We've had a long dialogue about deferred maintenance, what that might look like, what our rental amounts, our market, what it would take to have further investment. And then you shared also there's about a 15 percent vacancy rate in that location as well. And so I'm wondering what the value of that might be both today in this current state. And then what it might cost to bring it up to anything above market or at market. And I don't expect you to respond to that now, but that's just a combination that Jen and I shared. |
| 01:22:16.68 | Chad Hess | Yeah, yep, and I think the cost I think it was right around 300 320,000, 340, somewhere in there of the annual revenues that are lost because of that 15% vacancy within MLK. Um, So those are dollars that are We're not earning or we're not receiving because it is vacant space. Um, But yeah, if we invested a little bit more, maybe it would make them more desirable and we can fill those vacancies. |
| 01:22:45.06 | Unknown | We're paying long term debt obligations on them is my point. So there is a loss on the sheet. |
| 01:22:47.93 | Chad Hess | We are. |
| 01:22:51.56 | Chris Zapata | Yes. Mayor, if I can. Yes, go ahead. I can. |
| 01:22:55.59 | Unknown | Yes, good. |
| 01:22:56.03 | Unknown | Thank you. |
| 01:22:56.13 | Unknown | I can. |
| 01:22:56.76 | Unknown | Thanks. |
| 01:22:59.15 | Chris Zapata | It's a good conversation. Thank you. I want to go back to the audit presentation that was made a month ago. And, you know, we're obviously trying to simplify and get a better handle on what the city has and what the city is obligated to. And so that's part of this conversation. but the way I look at the amount that the city has available to it that's unrestricted is what the auditor told us, which was unassigned fund balance or unassigned cash was $7.1 million. There was 5% that the city council has a policy for another 10%. So that brought that up to $10.4 million that to me is the baseline that that's the baseline where you start that $10.4 million that we presented to the public through that audit. You could spend that on. Anything. for the most part. The question is the additional money that Chad's referring to, is that a sign somewhere or not? And what I heard tonight was it isn't. Is that accurate, Chad? IT'S WITHIN THOSE, IT'S WITHIN THOSE IT'S WITHIN THOSE, IT'S WITHIN THOSE IT'S WITHIN TH |
| 01:24:02.40 | Chad Hess | Thank you. business type funds But again, it's, strictly a city dollar. There's no external restrictions on It's use, you know, the parking fund, we could take every dollar and move over to the general fund. That's our asset city council could, authorized staff to transfer those dollars. They're, they're unrestricted in that in that in that sense. |
| 01:24:26.48 | Chris Zapata | That's good clarity. Thank you for that. And so, and then I think that goes back to my other point originally made. A few minutes ago, the reserve level that the city council wants to have for whatever emergencies they see. I think is a valid, valid conversation to have with eyes wide open with some of the things that we own, we operate. But also to understand that, you know, those accounts were set up in prior years so that there could be some thinking about, you know, what you would do to invest in long term needs or operating costs. And now we're trying to get to clarity on what's really left and what's left that you can attach to that 10.1 million dollars that I am quoting that, you know, I believe is my number. So I want to just have that comment so you can noodle that around and we'll have more conversation about it. But I really want to push you to have that level of service conversation parallel to that, a reserve level conversation that you're comfortable with. Thank you. |
| 01:25:29.14 | Unknown | I have a follow-up on that. City managers so the 10.4 million I think that the audit came up with unassigned cash does that include or exclude a reserve so does that include 10.4 million and then of that we have to decide what's a reasonable reserve percentage for us or is that |
| 01:25:53.25 | Chris Zapata | Yeah, so you have by policy, a 5% set aside on a general fund based on that year's budget for economic contingency. You added another 10% for emergencies. So that's 15%. That was about $4 million, $3 million. Chad can give you the exact number, but money that was not assigned to any of the funds was $7.1 million. And that's how I do my arithmetic. That's why I come up with $10 million because that 15% set aside by policy is to be used for fiscal emergencies. Council could use for whatever they want. Is 15% enough? And I think what I've been hearing is in the past, it hasn't been. So you've kept building that fund. So now it's not 15%, it's higher than 15%. When you factor in the additional 7 million, it's unassigned. |
| 01:26:47.94 | Unknown | Thanks very much. That's helpful. I think... when you're talking about a reserve for the type of town that we have in Sausalito and the overall number of our budget and the overall risk factors that we face on any given, Any given day from our hillsides and our sewers and our sea level rise, I lean more toward a more robust reserve for us here in Sausalito. So thank you. And, you know, I think, I |
| 01:27:24.04 | Unknown | Vice Mayor, you had a question? |
| 01:27:25.40 | Unknown | Chad, In the last 13 years, has the city of Sausalito ever used a dollar from its reserves? |
| 01:27:32.24 | Chad Hess | No, we've always drawn from our unassigned |
| 01:27:36.88 | Unknown | So, even through COVID and all those emergencies and everything, We've never had a draw from our reserves. |
| 01:27:43.68 | Chad Hess | we haven't touched our reserves, our assigned reserves, correct? It's always been our unassigned resources. |
| 01:27:52.17 | Unknown | And what percentage were we holding at that time? Just to follow up on Vice Mayor's question. |
| 01:27:57.87 | Chad Hess | Yeah, so we've we've all so we've had the 5% reserve for as long as I can go back. and then the 10% reserve was added. 20, I THINK IT WAS 2019. Yeah, I think it was 2018, 2019, when that second reserve was established, the 10%. So we now maintain 15% as an assigned fund balance and that's our reserves. Um, We've never touched them. Even through COVID, we did not draw down the assigned reserves. We've always drawn from our unassigned balances. Um, And your question was, what was it in COVID? I don't have it off the top of my head. I can find it. |
| 01:28:41.65 | Unknown | I was just trying to get a sense of what our percentages were that we've always maintained in our reserves. |
| 01:28:46.64 | Chad Hess | Yeah. Yeah, let me. So. |
| 01:28:47.38 | Unknown | Yeah, let me. |
| 01:28:49.53 | Chad Hess | I don't have that off the top of my head. |
| 01:28:49.83 | Unknown | I don't, I don't. Thank you. |
| 01:28:51.67 | Unknown | Member Hoffman had a question. So in my nine years on the council, we've had three or four catastrophic events that would have maybe pushed us to bankruptcy. And the fact that we had a robust unassigned reserve was very healthy for us and a very good plan for us to have. So we were lucky that we didn't have to draw on it. But at any given time, the most recent one was the. very serious landslide we had in 2019, in February 2019. We were extremely lucky. I don't even know how that happened. I don't know how it happened that we didn't have a significant loss of life from that landslide, but we didn't. five or six houses that were destroyed. But we were able to also pursue a strategy of aggressive settlement with our co-defendants in that case. So that we were at significant risk. We were saved in a way for further risk because we had such a robust So I think if we're going to start talking about you know, whether it's a smart idea to start dipping more or whether a 5% or 15% even reserve is sufficient for Sausalito. I don't think that it is. we were served very well by having a robust reserve. And I think that's a good policy for us to have. |
| 01:30:17.72 | Chris Zapata | Mayor, council, if I can weigh in one last time this morning and I'll be done. Yeah, you've built your reserves. That's accurate and that's wise. And you've created other funds like a 115 trust and that's accurate and wise. But the reason you're able to do that is because of the lack of investment in your infrastructure. If you had spent more money on your roads, if you'd have spent more money on your stairs, your sidewalks, your buildings, I don't know where your reserve would be, but I guarantee you wouldn't be what it is now. So I give you that as food for thought as we go forward. Thank you. |
| 01:30:48.55 | Unknown | Can I ask a question as well, Director Hess? What's the GASB standard for reserves, the requirement for reserves? |
| 01:30:58.32 | Chad Hess | Yeah. It would be GFOA, Governmental Accounting Finance Officers Association. They recommend, I think two months of reserves Um, two months of unrestricted fund balance as your reserves. So it's, It's lower than where we are. |
| 01:31:17.05 | Unknown | So it's below 5% they're recommended. |
| 01:31:19.26 | Chad Hess | Yeah, it's really low. |
| 01:31:21.00 | Unknown | Okay, so we're operating well above the recommended reserve. |
| 01:31:23.98 | Chad Hess | right. |
| 01:31:25.47 | Unknown | May I just echo what the state manager was saying that it seems to kind of be my curiosity here is what we're missing when we put money in the bank. |
| 01:31:26.19 | Unknown | Yeah. |
| 01:31:35.73 | Unknown | Well, a good example of that is when the vice mayor and Chad worked together to identify that our money was sitting 0% interest rates. It looked like we had money in the bank, but it wasn't doing anything. So there's an opportunity cost that we miss out. I don't know how you bake that into this overall conversation, but this idea of what else are we missing when we make some of these judgment calls and decisions, I think is an important part of this. And then I'll just mention my community based cash traffic insurance concept. Again, there are some strategies we can deploy that have not been looked at. And if the council is interested, I'm happy to carry the water and bring some information back. But that would allow us to, at least from a disaster preparedness perspective, have some type of further long-term insurance. Thank you. |
| 01:32:19.33 | Unknown | I would be interested in hearing about that at a future agenda item. So we'll keep that in mind for tomorrow's meeting. Maybe we can mention it specifically. Okay. So I just, can I, |
| 01:32:28.99 | Chad Hess | Can I provide a Quick clarification. |
| 01:32:31.89 | Unknown | certification. Go ahead. |
| 01:32:33.88 | Chad Hess | Yeah, so I made a mistake. And I want to own up to it. On this report here, I'm looking at fund balances. I don't, we don't have 5.5 million in MLK. Our MLK balance is about $1.8 million in cash. We would need to reduce this. We don't have a full 20 million. WITHIN unrestricted, if you will. So I apologize for that. |
| 01:32:57.42 | Unknown | I am. |
| 01:32:59.82 | Chad Hess | I BROUGHT THIS UP, BUT I WASN'T I WASN'T THINKING CLEARLY, AND THAT IS That wasn't a full truth. So I wanted you to be aware of that. If we back that out and add in The cash as of the end of March were about 16.6 million of unrestricted. Um, We could also count some of the I'm sorry, I'm drawing a blank here. general capital projects dollars. those are TECHNICALLY AN UNRESTRICTED FUND AS WELL. AND THAT'S WHAT WE'RE SIGNED for capital projects. So... I wanted to bring that forward before we got too far along. My apologies for misquoting. |
| 01:33:39.52 | Unknown | Thanks, Director Hassi. I appreciate it. Okay. So at this point, do we have further questions because we have to provide direction on the parking fund to the general fund? Okay. So since we are going to provide direction, I'm going to open it up for public comment. City Clerk, could you please remind members of the public how they can participate at this time? |
| 01:33:57.41 | Walfred Solorzano | Yeah, if you're in the council chambers, you can fill out a slip and then bring it back over here and go to the podium. If you're on Zoom, you can press the raise hand function. Or if you're on telephone through Zoom, you can press star nine. And scene none. |
| 01:34:16.31 | Unknown | Okay, I will close public comment and bring it back up to the council for discussion and direction on the three potential options for the parking fund. who would like to get us started. |
| 01:34:28.02 | Unknown | when we're coming. Okay, thank you. It's a little bit difficult to just have three after this robust, interesting conversation. So I'm not quite sure what to do with that. A certain scenario one, I think staff reports saying don't do it. So that feels like it's hard to go against that professional recommendation. Scenario three seems like a lot of speculation based on some of the granular questions we had asked. So it's hard to find comfort with that. That doesn't mean I think scenario two is the best option, but I think it is better than one in three. So I don't know how to get to a more comfortable place with that. I mean, as a reserve policy still of 20%. We're very focused on fixing these lots. Thank you. I don't know. I'm not sure why we're focused so much. I understand it's a parking fund. but we're spending a lot of time linking the reserves to the parking fund, even though, and I understand why in some respects, but we have other infrastructure costs that are also of critical importance to me when I think about the reserves. per the city manager's comments. So I find this a very difficult question to answer. |
| 01:35:35.24 | Unknown | Yeah, I'm sorry. |
| 01:35:36.37 | Unknown | Go ahead, please, guys. |
| 01:35:37.38 | Unknown | I'm with you. I'm puzzled by this. I thought we, again, we're going to be having a discussion about weighing how much we invest in the community's capital infrastructure, Tasks. against the other aspects of our budget, basically our people. and maybe even tying in revenue to that. I thought this was gonna be a strategic level discussion. I did not expect we were gonna be talking about a detail, talk about minutiae and micromanaging, a detail of the fund accounting structure uh, I feel like this fund accounting structure is useful because it's GASB. It has to be there and it has some utility as a finance person. I appreciate it. having knowing the spark plug firing rate is helpful if you're a mechanic and being able to look at all the bells and whistles underneath the hood of the car. But in terms of driving the car to get to Molly stones, I need a high level dashboard of understanding the finances of the city. I feel this whole discussion confuses it. It confuses it for us. It confuses it for the, for the people of Sausalito. It doesn't allow us to make the right trade-offs. Quality of the parking lot is relevant if it's threatening our business. If Director McGowan says, I need to spend a million dollars within the next five years, because we're gonna have to close parking lot number one, or number two, because it's no longer going to function. and I need to get money for that, that's part of his CIP. But that's the same discussion he would have for any other CIP project in town. We're gonna have to close Bridgeway, we're gonna have to close Napa Street, we're going to have to close a park. So we do need a schedule. of our CIP that's based upon the life cycle of all our projects. And to become overly obsessed with the minutiae of these reserve issues is to distract from, I think, that broader point. And it's also to confuse the matter about how much money the city actually has to spend on other resources that are higher priority. people or projects. Uh, The very fact that we can't agree how much money we have is an example of that. So, I don't right now I wouldn't choose any change any of the options because I think the main direction is that we still have a much more important task, which is to have our finance department be able to take the very complicated. picture underneath the hood and distill it down to the kind of dashboard we all use when you drive our car. speedometer. a gas tank, a brake and a pedal and a shifter. And when we have that, we can make some decisions. |
| 01:38:03.26 | Unknown | Thank you. |
| 01:38:03.30 | Unknown | Go ahead, Gans. |
| 01:38:05.10 | Unknown | I... I'm in agreement and I think with the other two council members, and I think, I think it's been a good discussion. And I think that this discussion point with regard to the parking lots and how we, how we have our funds uh our segregated funds and the purpose for those segregated funds is part of the overall discussion to council member or vice mayor's point of how we effectively address our budget, how we effectively address the necessary maintenance on our revenue generating assets and the management of that going forward. And the effective use of the money that that that those assets generate. So I see this as a really good example of the parking lots, one of our highest revenue generating sources, directly revenue generating sources to our city. So we have other revenue generating, which are taxes and fees and things like that. But we have, this money goes directly to Sausalito. The money from our physical real estate assets goes directly to Sausalito. So the decision we make have a direct impact on the money that actually goes to Sausalito. So when we're looking at effective management of those and whether or not we want to raise fees, raise rents, be more effective in the management of those, making sure all of our physical assets are fully employed, that's a really good discussion and it goes directly back to our overall discussion this year of, and next year and the year after, is how we increase revenue. how we directly increase revenue into Sausalito. So I think this has been a really helpful and illuminating discussion. It's an example of a larger conversation that we're having. that we need to continue to have. And so as part of this discussion, and understanding what kind of reserve we need and what we're gonna use that reserve for That's a five year capital improvement plan that I think Director McGowan has worked on but maybe on a more micro level, we have these segregated funds right now. And the question with kind of these three scenarios, I think what is called into light is Okay. we have capital improvement needs for this revenue generating asset. How quickly do we want to address that? You know, anybody can go look at parking lot three and parking lot one and understand that we need some basic level resurfacing. Right. And so and and how do we manage that asset going forward? So I think it's a we've had a great discussion. I think this is the first of many discussions. And I think we're on the right path, actually. And the questions we've had today about. What does revenue really mean? and how much do we really have to spend? is a really good question. I just wanna be, I'm just cautious about whether or not, you know, we're not seeing this as as all of this is unrestricted funds. Because I know based on the way we've done this in the past, is that we're segregating these funds so that we have money to support a capital asset. And I wanna make sure that we don't deviate from that. I would agree that I know that we need to have investment in that asset. and the urgency, I think, One. We don't want to wait until it's urgent. That's the number one thing, right? Right. And we don't want to, so we need I think a schedule of annual investment in our capital improvements as we go forward instead of, oh, there's a sinkhole in parking lot too and we better fix it. Now we have to, and that's going to be much more expensive, right? Or a roof leak because we weren't particularly... the annual maintenance on it and now we have a much bigger thing to do so that's sort of my perspective |
| 01:41:53.30 | Unknown | Thank you. Councilmember Cox, are you... Still there. I know she's dealing with a family emergency, so she may have briefly stepped out. Okay, looks like we don't have Council Member Cox. Oh, there she is. Okay, great. Did you want to weigh in, Councilmember Cox? |
| 01:42:17.82 | Unknown | You're muted so I cannot hear you. Ugh. |
| 01:42:23.21 | Debra Muchfor | you |
| 01:42:23.90 | Unknown | Right. |
| 01:42:24.13 | Debra Muchfor | Thank you. |
| 01:42:25.40 | Unknown | I'm sorry. |
| 01:42:25.97 | Debra Muchfor | Thank you. |
| 01:42:32.39 | Unknown | Still having trouble hearing you, Councilmember Cox. Did you want to weigh in on the... |
| 01:42:38.24 | Unknown | Thank you. Thank you. Thank you. Thank you. Parking fund? No? |
| 01:42:41.24 | Unknown | parking fund? No? |
| 01:42:43.19 | Unknown | I think that's your... |
| 01:42:45.21 | Unknown | Still can't hear you. |
| 01:42:50.58 | Unknown | Wilfred, can you check and see what's... It looks like she's still muted. |
| 01:42:57.80 | Unknown | Can you hear me now? |
| 01:42:58.74 | Unknown | Yes, thank you. |
| 01:43:06.49 | Unknown | Nope, lost you again, Joan. Okay, can you hear me now? Yes. Okay. |
| 01:43:12.02 | Unknown | can hear you. . I apologize. I had to step away because a nurse came into the room, but I did just want to weigh in and I, tend to agree. um, well, I agree with a lot that my fellow council members have said, Um, Bye. I'm very attached to our 20% reserve policy, 10 and 10. Um, I... I'm very interested to understand the how we can leverage the 2.4 million in grant funding. to ease some of our future challenges. Um, And, You know, I'm inclined to go with staff's recommendation of three. Um, And if not that, a hybrid of two and three. So. I definitely am opposed to one. I agree with Um, Councilmember Kellman that we There's a lot of unknowns. with scenario three. So I'd want to. have some of those unknown those TBDs to be addressed, to be fully comfortable with scenario three. Coming into this meeting, my preferred scenario was scenario three. |
| 01:44:31.12 | Unknown | Thanks Councilmember Cox. So I think what I'm hearing from everyone here is This has been a really great robust conversation about infrastructure that definitely took us beyond just the consideration of one parking lot or two parking lots and more into what are our reserves? What sort of fund balance do we want to maintain? How do we want to make investments in our infrastructure? Because as was noted by Councilmember Hoffman. Our reserves have served us well, but as was noted by the city manager, that is the decision we've made to not invest in infrastructure, which can end up costing us more in the long term because not investing in our roads can lead to landslides, for instance. |
| 01:45:06.52 | Unknown | So I just want to, I just want to weigh in. I want to reiterate something I told Eric and staff. several weeks ago, which is, I reminded them, there is no bad faith against a surety. And so the majority of sureties will refuse to settle or to step up until they are on the courthouse steps. And that was why I had proposed this parallel path of the city. The city has to proceed. The city has an obligation to mitigate its damages and the city's case against the surety will be stronger. if the city proceeds in such a manner so as to mitigate its damages. |
| 01:45:49.15 | Unknown | Okay, thank you, Councilmember Cox. So circling back, I can't. I'm I think Council Member Cox, were you weighing in on the |
| 01:46:09.52 | Unknown | Okay. Councilmember Cox, was that an additional comment you wanted to make on the No. Okay. Okay. I think there's just some technical difficulties happening on the East Coast end of things. So anyway, what I've, what I've, pardon me, what we've kind of decided together is that this is a robust and important conversation about infrastructure and how we want to spend. how we want to spend or maintain our reserves, whether we invest in longer term capital improvement projects and what type of actual fund balance we really have and what sort of discretionary funds are available. I think the direction that I'm hearing is, while we appreciate all three of the parking fund scenarios that were presented to us, there are bigger picture questions that we want to answer with regards to our budget. I mean, I tend to agree, I don't like option one, I'm somewhere in the middle of the road on option two, but I think, But the direction that I'd like to give is just a bigger picture consideration of our of some of the questions we brought up today about our fund balances and reserves going forward and look at all of our where we want to make investments. reviewing the five year CIP that Kevin's put together with the parking lots in there and talk about it. in the conversation tomorrow with our budget as a whole. And I appreciate the suggestion that we have sort of a five and 10 year perspective of if we don't invest in this revenue generating source, this is our timeline and this is what the outcome will be. So if other members of the council are comfortable with that direction, I know it's not exactly specific, Chad, in terms of answering your question about the parking fund at this time. But I think it's somewhat unresolved from the dais in my perspective. I mean, we can all come together and decide to move ahead with option two, with further discussion. What do other folks say? |
| 01:48:02.29 | Chad Hess | Thank you. |
| 01:48:02.39 | Unknown | And Yeah. Okay. Okay. I think I think |
| 01:48:05.65 | Chad Hess | I think what I'm hearing is we need to keep some, we need to keep more resources in the parking fund. We can't keep transferring everything over. That's safe to say. |
| 01:48:16.47 | Unknown | Yeah, I think that's what we're saying. Go ahead, Ian. |
| 01:48:19.66 | Unknown | I don't know. This conversation is a little frustrating, Chad, because, uh, It's a bit of a minutia. We're just talking about minutia. There is an issue of being sure that we have appropriate financial resources to pay for real world liabilities. If our road's going to turn into a sinkhole or we can't use a parking lot or building groups going to collapse, We want to have the financial resources to fix those things. And we want this Department of Public Works to survey our parking lots and our buildings and to have the knowledge of the maintenance that's required to keep these things functioning to generate revenue. And in addition to that, have, as I know the department does, an assessment of infrastructure across town, the quality of our pavement, the threats of landslides, prophylactic work that we need to do to avoid huge liabilities and that all that information should turn into dollars that are infrastructure liability. We need to have resources to pay for those things. Whether those reserves are held as a 20% reserve in the parking fund, or as a larger reserve in the general fund, is sort of a really minutiae detail that's super distracting from the actual financial reserves the city needs to maintain against its real world liability. So I'm not sure that we should be weighing in on this point unless there's some that I'm missing. you know, was as Council Member Hoffman described, originally set up as an idea that we would have these separate business units that would have their reserves associated with future liabilities. You can certainly do that as an accounting metric, but whether it's reported in that fund or as an overall picture is, you know, not a detail we need to figure out because we're still trying to get a grip on what the actual resources of the city are. and what the actual liabilities of the city are, what our freedom of action is to hire more people or to give pay raises, or provide different levels of service to our citizens. And I find this kind of discussion to be distracting and not CONTRIBUTING TO So I would encourage you to do that. actually taking that point of view of really working hard. Like Mark Twain said, it takes a long time to write a short letter, distilling all the mechanisms that's underneath the hood into a set of financial reports that we can actually make decisions about in terms of how to spend our resources. So sorry for the speech. |
| 01:50:47.75 | Unknown | I appreciate your fervor and passion for our... Fiscal decisions, Vice Mayor. So I think, again, it seems like from the diastole overarching feedback here is that we want to have a more robust picture of our budget as a whole and think together about what reserves do we want and how do we spend from our fund balances. So I think. The minutia of what do we do with this respective parking lot will not be resolved today. And we'll continue the budget conversation together tomorrow. um Director Hess, are there other areas that you had wanted us to review together at this meeting specifically? |
| 01:51:27.90 | Unknown | Thank you. |
| 01:51:28.03 | Chad Hess | Thank you. |
| 01:51:28.15 | Unknown | I can't hear you. |
| 01:51:29.03 | Chad Hess | Thank you. |
| 01:51:32.22 | Chad Hess | Not that it's different than what we've discussed already. So if we want to really regroup. have a different discussion. weekend. But yeah, I'm not ready to present anything that's beyond what we've talked about in that level of detail. So I missed the mark, I apologize. |
| 01:51:53.18 | Unknown | I have a follow-up. Go ahead. This is for the city manager. City major for these were the. Three, I suppose, revenue generating assets, the funds that we have, the unrestricted funds. So I don't have it in front of me, but it's MLK, it's parking, it's City Hall and B of A. Do we have the ability to come up with a five-year capital improvement maintenance plan for these buildings? |
| 01:52:27.30 | Chris Zapata | Yes, we do. If we hire two project managers to free Kevin's time up, And that's part of the discussion today is we can get to all these things given time and... resources. So we presented to you October 2021, a snapshot back of the napkin infrastructure analysis that said, you know, this is the number that we have that we need to work on. That was to spark this discussion. We also presented to you, you know, the pavement management report a couple of months ago that showed us at a barely C grade, And that's part of this infrastructure discussion. And in trying to figure out where your money is, that's also been part of this discussion. And ultimately when we get to part of where your money is and how much you're willing to spend, then I think we can do all of the things that you think we want to do over time. So I'm apologizing to you all for what I term is some frustration in the room, but this is how sausage is made. We are bringing things forward that people asked us to bring forward. We don't have all the answers today, but we will be charged with getting them So we can get what you want. It just takes a little time and people. |
| 01:53:33.67 | Unknown | Okay, I think that's fair. That's a fair answer. And I don't need any further. Yeah, I think that's... Yeah, no, I think that's fine. And I think that's something that we would look at and put on put on our list for the next fiscal year of really understanding what the capital improvement budget is for these revenue generating assets. And then then we can further discussion on how we segregate funds. |
| 01:53:57.81 | Unknown | Can I ask, would you consider For instance, the city hall building that we're sitting in now is potentially a revenue generating asset because we teach parks and rec classes downstairs or people pay to use... specific city services or rent things from the city. |
| 01:54:12.09 | Unknown | Thank you. |
| 01:54:12.12 | Unknown | from here. |
| 01:54:12.73 | Unknown | I think that's an excellent question. I think it could be a gangbusters revenue generating right now is not even its budget dust. Like whatever's generated from those classes is far below what the potential might be. for renting the spaces in City Hall. I'd be interested in that, but I don't think at this point I don't think at this point that that moves the dial for our budget and revenue, But I think as going forward and questions to Cushman and Wakefield about how we could, there's a lot of underutilized space anecdotally in this building that can be used for other you know, other purposes and revenue generating, right? So, We're in the place right now, in my mind, where we're looking at revenue generating continuing to reduce expenses because we've done some good work last year to get us where we are here. We had some ridiculous luck with our unfunded pension liability that will never come back. And we know that's going to come back and bounce right back up on probably more next year. But anyway. I'm not sure. I think that's a great discussion. you |
| 01:55:12.52 | Unknown | Yeah, I would like to see all of our city buildings be assessed from a five-year CIP standpoint because there's serious infrastructure improvement that's required of them for them to become what I believe to be revenue generating and MLK building included, whether that's HVAC updates or how we use energy or even just the windows. There's a lot wrong. So I would like that to be considered as well. Okay, I think, Vice Mayor, did you want to just one more thing? |
| 01:55:36.18 | Unknown | Well, I just wanted to echo that consensus and hope it's triple underlined and I think we're heading in the right direction now at a strategic level that I think is really I would say it shouldn't just be a five year assessment. Five years is not very long in terms of a durable good. a 30 year lifespan We definitely want five-year granularity. Your predictions are always better the closer, you know better the weather tomorrow than you do next month and next year. So the predictions will be better for our physical liability for five years. But we really, a lot of these structures have... much longer life cycles. uh, Revenue generating is important, of course, because revenue, is a generating item can pay for itself. but we're the city of Sausalito. Our business is to maintain the whole town. everyone. And so while I agree it's important, that same exercise ought to be done for everything. It is our as the city manager reported our hidden liability, the deferred infrastructure, whether it's sewers or roads or sidewalks, and they can in terms of paying for themselves, a lawsuit avoided is the same thing as revenue earned. And so A-class infrastructure can pay for itself. uh, we can then marry. that information with the one-time money, which we can't spend on operations. because operations is year in, year out, but a one time fix. Maybe we can draw on some of the whether you call it 16 million or 11 million or 7 million, it's millions. of dollars of money beyond our reserves. That's a policy choice. and hope that we'll have that discussion. sometime. |
| 01:57:12.65 | Unknown | Okay. Great. Thank you, vice mayor. All right. So I think we have made clear our concerns and our direction for staff and thinking about our revenue generating sources and our building infrastructure. and what a five to 30 years the IP would look like for that and our overarching budget considerations with regards to infrastructure going into our meeting tomorrow, where we will continue. the conversation on our budget so that we can pass it in a timely manner. But I do really want to acknowledge the hard work of Director Hess and the city manager It's quite remarkable that it seems we'll be finishing the fiscal year in the black, given what we walked into last year. So I do appreciate those efforts. That's a big deal. Okay, so with that in mind, I'm going to go ahead and adjourn the meeting at 219. Thank you very much. |