like to call to order the city of Belvier finance committee meeting of
Thursday, April 16th. Uh, Robert, can we have a roll call?
» Yes. >> Cascal,
» yes. >> John Wilton is absent. David Walker
» present. >> Patrick Federer
» here. >> Will Lion
» present.
» Sorry. And council member Mark >> uh here. Thank you.
» And we also have our city manager Robert Sadnik and myself Helga Carter, director
of administrative services. >> Okay. Um can we first have an open
forum? There are no members in the audience. Robert, is anyone online?
» Nobody online. >> Okay. So, next item will be to approve
the minutes of our last meeting on January 22nd.
Are there any comments or changes? And if not, can I have a motion to approve?
» So move. >> Second.
» Second. >> Okay. Roll call.
» Chairman Cascal. >> Yes.
» David Walker. >> Patrick Feder.
» Yes. That passes unanimously.
» He doesn't get to vote. So, yes. >> Uh, okay. Third agenda item, discussion
and possible action regarding the semiannual review of the city's
investments. Elga, >> thank you. Thank you, Chair McKascal and
committee. In February of 24, the council approved a change to the city's
investments, which involved transferring most of the city's fund balance from the
local agency investment fund or Lif to Calrust. As part of the update,
investment policy staff will provide investment information to the committee
on a semianual basis. The Cal Trust funds earned over 460,000 in interest
last fiscal year and have generated 350,000 through the first three quarters
of this fiscal year. In July of 2024, with the approval of the finance
committee chair, the remaining 150,000 in Lif was transferred to Calrust
short-term fund to take advantage of a slightly higher interest rate, but was
moved to the liquidity fund in January of 2025 to take advantage of an even
slightly higher yield and a more stable net asset value. Only a small balance
remains in leaf at this time. Mayor Wilkinson, committee member Will Lion,
and I review the investments at the end of each quarter and recommend any
changes to Chair McKascal for his approval per the investment policy.
As of the end of the quarter, as of the quarter ending March 31st, 2026, we
recommend maintaining the current Cal Trust allocation. The city fund balance
is invested in the liquidity fund which continues to provide
the highest return and maintains a stable net asset value in these
uncertain times. And with that, staff are available for questions.
» Okay, questions or comments?
Well, you're our expert on this. I assume you've weighed in on this and uh
Hugga tells me the recommendation is that we just keep it where it is. Is
that correct? >> Yeah, that's right. Um I think the only
thing that I would add is some of the other funds both at Cal
Trust and at Leif have moved slightly above the liquidity fund yield. But
what's unique about the liquidity fund is it's got that stable net asset value
like a money market fund. So, you know, if interest rates pop up, we wouldn't
have a any principal risk. Um I think what we're we've already kicked off is
gathering uh additional information both from Lif um as well as from Cal Trust on
the um on the Cal Trust funds that we don't own just to try to level set you
know across our fund choices you know from a risk perspective
um you know I think we've learned that LEF does in fact have um a stable
principle of value which I I think is equivalent to a stable net asset value.
So I think the point to the committee is we're going back and getting more
information. Um you know and I think our approach to get you know much deeper
information sort of on an annual basis uh makes good sense. Um and then we'll
come back to this group with a recommendation because it may make sense
to split out some assets to try to capture a little bit uh higher yield if
the risks are the same. you know both in terms of um credit quality the
underlying bonds as well as the uh stability of the principal. So expect
more from us um after doing this deeper dive.
» Okay, other questions or comments from the committee?
Um and Robert, still no one on the public.
Uh, all right. So, uh, the presumably the motion that needs to be made is one
that no change to our current investment allocation. Is that correct, Helga?
» Yes, that's correct. >> Can I have a motion and a second?
» I'll make a motion to approve if I can vote.
» I don't know. He you you can't vote, so I don't I'm not sure you can make a
motion. >> It's true.
» I don't think so. >> All right. So, move.
» Is there a second? >> Second.
» Okay. Roll call. >> McCascal.
» Yes. >> Uh David Walker.
» I. >> And Patrick Federer.
» Yes. >> That passes unanimously.
» Okay. Next item on the agenda is the uh review regarding the fiscal year 2627
preliminary operating and capital budget review. Helga.
So, thank you, Chair McKascal and committee. Before you today is a
preliminary operating capital budget for fiscal year 2627.
To begin with some revenue highlights, the general fund revenues are projected
to increase by 10.2% or approximately 979,000.
Property tax revenue remain the main driver with overall growth of 5.62%
over the current year budget or about 439,000
based on the most recent county estimates. Other property tax revenues
are expected to remain flat while the fire tax revenue is projected to
increase by approximately 3% pending final state data which comes out around
May 1st. Development related fee revenues have increased due to the new
user fee schedule that went into effect July 1st, 2025 and continued development
activity, particularly largecale projects and increased encroachment and
road closures. Despite a slight decline in permit volume, fees are projected to
recover approximately 89% of the city's cost of service. The city council also
approved a CPI based adjustment for the user fee schedule which will be
effective July 1st, 2026. B performance in the first year has
largely met the 92% cost recovery target. Therefore, no additional
incremental revenue is assumed in the outer years. Consistent with best
practice, no revenue increases were assumed in the first year of
implementation and staff will continue to monitor cost recovery over time or
trends over time as they may fluctuate with broader economic conditions.
Onetime increase in building permit plan review and road impact fee revenue is
anticipated in fiscal year 2728 from the Mard Point project based on the current
timeline. Timing remains uncertain and staff will refine revenue projections as
the project advances. No grant funding is included in the
proposed budget at this time, though staff will continue to pursue
opportunities through partner agencies. Overall revenue projections remain
strong, but are intentionally conservative to support long-term fiscal
stability amid the economic uncertainty.
And now on the expenditure side from the general fund, fiscal year 2526 was the
last year of a three-year contract with the city's represented and
non-represented groups. The city is currently engaged in labor negotiations
and anticipates reaching an agreement in the coming weeks. The fisc year 2627
budget incorporates the results of a compensation study and a 2 and a.5% cost
of living adjustment. A 3% salary increase has been assumed across the
outer years. The fiscal year 2627 budget includes 235,000
for a temporary police officer position over a three-year period to support
operations during the police department evaluation.
The budget includes 150,000 for implementing the housing element goals,
programs, and policies along with funding for general legal costs and
ongoing litigation. It also allocates 50,000 for the city's 2030 climate
action plan. Expenditures related to the Malard Point project include 150,000 for
a special project manager, 10,000 for relocation specialists, and 40,000
45,000 for city engineering services. These costs will be reimbursed in
accordance with the agreement with the developer. Tibberon Fire is estimating a
seven and a half% increase in our contract costs again this coming fiscal
year due to increase in district expenditures related to station 10
from the capital equipment fund. The budget includes 70,000 to replace an
aging public works utility truck, 70,000 for a police handheld radar unit, and
13,500 for replacement of several staff computers, a server, and backup power
systems. From the capital improvement fund, the budget includes the Beach Road
stabilization project scheduled from June through October of 26 with a total
cost of 4.97 million. Of this 4.68 million will be funded from the critical
infrastructure reserve with 345,000 from other sources to close the gap. An
estimated 2.48 million will roll over from fiscal year 2526 and the
construction contract was approved by council on April 13th.
The five-year CIP includes ongoing annual funding of 80,000 for lane
improvements and 15,000 for vegetation management and fire fuel reductions.
Key projects next year include Harry B. Allen stair repairs, community park
restroom renovations, redrilling of the community parkwell, and police
department improvements. The budget also includes 60,000 to complete the
infrastructure assessment which will inform the fiscal year 2728 capital
budget. Several projects are expected to be partially funded through partner
agencies and private donations.
And this brings us to uh another large part of the city's expenditures are
staffing costs. Personnel costs are projected to increase in fiscal year
2627 over estimated actuals primarily due to staffing additions and
compensation adjustments. Regular salaries are increasing by 21%
approximately 535,000 driven by higher staffing levels with 21
staff headcount in the proposed budget verse 18.4 4 actual headcount in fiscal
year 2526 which is an increase of about 14% over
estimated actuals. Implementation of the compens
compensation study of 4% increase or 124,000
and a 2 and a half% cola or about 75,000.
Lower fiscal year 2526 staffing and expenditures reflect vacancies in police
administration and public works during the current fiscal year. These positions
have all been filled with administration position new hire starting April 28th.
Health insurance costs are projected to rise by 22% reflecting a 9% increase in
premiums as well as the addition of family rate coverage for the new police
position. The city's unfunded acred liability contribution is increasing by
45% approximately 104,000 over the fiscal year 26 actuals
consistent with fluctuations driven by Kalpers's investment performance,
actuary assumptions and retiree experience.
Other personnel costs are also increasing primarily due to the addition
of 1.5 positions in the police department in co impacting costs such as
holiday pay, shift differential, and education incentive.
And this next slide highlights the city's required pensions related
payments to Kalpers, including contributions toward the unfunded acred
liability and payments associated with the pension obligation lease lease back
debt. The fiscal year 2627 UL payment is based on the most recent Kalpers actuary
valuation as of June 30th, 2024, which reflected an investment return of 9.3%.
However, prior years continue to impact current and future contribution
requirements, including a negative 6.1% return for the period ending June 30th,
222 and a 5.8% return for the period ending June 30th,
2023. Both of which fell below the Kalpers's
assumed rate of 6.8%. And the impacts of the June 24 investment return impacts
are reflected in the slight decrease in the UAL in year four and five. Again, UL
costs may fluctuate annually based on investment performant changes in actuary
assumptions and retiree experience. The pension related debt obligation will
have a final payment of 123,000 in fiscal year 3132.
We are also planning a review of the city's pension funding strategy for this
coming December, including whether some section 115 assets should be transferred
to Kalpers. This item will be discussed later on the agenda.
This next slide shows the anticipated transfers from the general fund that are
part of this budget. The fire is 1.42 million, pension 115 trust 300,000.
pension related debt 237,000. The budget includes a $100,000 transfer
to the insurance and legal reserve fund to cover ongoing uninsured legal expense
with a reduction in the transfer amount reflecting an anticipated decrease in
legal costs and bringing the fund to its minimal required balance. the capital
improvement fund of 184,000 and the $75 transfer to the critical
infrastructure reserve was budgeted in 2526 to support the beach road
stabilization project. The fund will also be renamed the long-term capital
planning fund and received 1.1 million to support future capital needs
identified through upcoming infrastructure assessments. And finally,
the equipment replacement fund transfer of 89,500.
Brings us to a summary of the proposed budget. The budget anticipates total
operating revenues of 11.86 million and total operating expenditures of 11.16
million resulting in an operating surplus of just over 700,000.
Capital revenues are estimated at 545,000
while capital expenditures are projected to be 3.31 million leading to a capital
fund deficit of 2.77 million primarily due to the 2.23 million in expenditure
for the Beach Road stabilization project next year. In summary, revenues are
projected at 12.41 million and expenditures at 14.48 million resulting
in a 2.07 07 million deficit. This is primarily due to the one-time cost for
the Beach Road stabilization project and largely funded by the critical
infrastructure reserve. Following this one-time expense, the budget is expected
to return to more typical operating levels.
This slide shows projected fund balances as of June 30th, 2027. General fund
begins fiscal year 2026
at or 20 begins fiscal year 27 at 7.21 million above the reserve target and
after planned transfers for fire capital pensions
is projected to end the year at 5.63 million. The critical infrastructure
reserve reflects a 2.49 49 million transfer out and a 705 transfer in,
resulting in a remaining balance of 1.1 million. As mentioned previously, this
fund will be renamed the long-term capital planning fund to support future
capital needs identified through the infrastructure assessments. The budget,
as submitted, anticipates returning to a more normal state following the city's
allowing the city to replenish the newly renamed long-term capital planning fund
to over 1.53 million by the end of the forecast period.
And this brings us to the general fund reserve. The reserve policy is to
maintain a reserve equal to 50% of the projected general fund expense plus fire
transfer plus pension debt service. This budget incorporates the policy with the
reserve goal at 50% of the fiscal year 2728 projected
general fund expense plus fire transfer plus debt service which is 5.27 million.
The projected general fund balance at the end of next fiscal year is 5.63
million. The projected general fund balance is over the policy goal by
354,000 or 53%.
And this slide shows the history of the general fund's actual ending fund
balance, the fiscal year 2526 estimated general fund balance of 7.21
million and shows the five-year projections. The green line reflects the
council's reserve policy goal. And as you can see, the budget reflects that it
does meet the reserve policy goal for the next five years.
And in and in conclusion, a few highlights of the budget are the general
fund reserve is met over the five-year forecast period. We continue with annual
contributions to our 115 pension trust, contributions to the critical
infrastructure reserve to fund the Beach Road stabilization construction project,
and plans to replenish the fund in future years. The budget reflects a
physical fiscally conservative approach that prioritizes maintaining staffing
levels and support the city's operational needs.
What are our next steps today? We're looking for your input, which we'll
incorporate as we continue to refine the budget. We'll then bring the draft to
the city council on May 11th for review and feedback and return on June 8th for
adoption following the public hearing. And with that, I'd be happy to take any
questions.
David, since you had sent us a list of questions, do you want to start going
through your questions?
We'll >> get to step back just quickly. There was
one comment on the investment
made and that was on page two
where it says under restricted investments in the middle of the first
paragraph, these funds are not available. The on
operating costs and restricted for pension costs.
And correct me if I'm wrong, but I might write that sentence as these funds are
restricted for pension costs. And the reason I would say that is
because they can be used for operating costs in
the sense of covering the current year's pension payments. And if you think about
it, um, you know, we think something around 34
of a million a year in pension costs 700,000
something like that. And uh so if you had uh 3 million in this 115
fund or three and a half million or something, you you could actually pay
your pension operating costs for four or five years
out of that fund. And that's sort of a secondary benefit. Um because we set
that fund up to more fully fund the crude liability rather than the pushing
current policy liabilities for future source
but it also is that secondary benefit is quite tremendous and powerful. It's
unlikely we would need to call on that but you just mentioned in the budget
review we have this sort of secure balance
this other 15 fund has residual secondary benefit of that
same. So I think just for the record if we think of it as restricted for pension
costs um that's probably appropriate.
» Okay, we can make that change. Sally, where are you looking for? I'm I'm not
seeing it. Page two of the memo
» paragraph under restricted investments. >> It's really operational aspect,
» right? >> It's restricted to pension costs.
» Oh, sure. >> I think that gets lost. Again, it's not
our primary purpose, but it's >> powerful reserve.
» Okay. Next.
» Well, I sent an email to you as the chair and
» Oh, okay. >> Robert
wants to just dive into that. >> Sure.
» So, I can go through your questions. Um, >> you need to read read the question
first, Helga, since the >> Oh,
» full committee doesn't have the email. Um the first question was around
planning and building and why there are kind of fluctuations in the outer years
of the planning and building expenditures.
Correct, David? >> Yeah. Recognizes
um that we've got significant increase associated with Malard Point. Um goes up
for a few years, then it comes down. Um but is questioning um
when it comes back down uh does that fully u eliminate the malard point costs
by the final year in the five-year budget?
Um it asks about how these malard point
costs the outside consultants are pretty obvious. Um but the um planning and
building uh personnel and u benefit costs how those go up and how they come
back down and and again are they fully down by year five
and then it I don't know if I noted in that email but if you take the 2526
expected actual for planning and building and compare that to the fifth
year of the budget. Um it's a uh about a 59%
increase or about 10% a year over that fiveyear period. So that's that's the
sort of overall context. Um we recognize the Malard point aspect.
I'm wondering about how that relates to the actual staffing personnel and
benefit costs and the are those fully out by the final
year and if they are we're still rolling on about a 10% annualized increase in
that department. So, we're not anticipating any
additional staff for the related to the malard in addition to the special
consultants that we're hiring. So, our staffing positions, we're not planning
to increase those related to the project. The part of the increase in
those outer years is planning for the 2030 general plan update. I spread
660,000 over a three-year period in those outer
years and then I backed it out. So that's what accounts for those
fluctuations in those years. I didn't in this current in the upcoming budget
the proposed budget I budgeted the 150 for the Mard project special
um coordinator spec and so in speaking with
our director of planning and building we do anticipate that that person will be
on board for the project but Um,
and depending on what applications are submitted next, it will determine what
the comp consultants needs in what they need to oversee in the
future. So we'll have a better idea of what that um consultant's activity will
be in the outer years. But it the cost of the 150 is still within the budget
over the five years. Hopefully that answers your question.
» You're saying the 150 is annual for five years.
» Yes. So, you have 750,000 in the five-year forecast for the uh
» Yes. >> And
» so that so that remains in that fifth year. I didn't see that, but I guess
it's true. >> It does. I didn't back that out. The
only thing I backed out was the cost for the general plan update. So, because
that needs to be completed by 2030 >> and that's 660,000.
» Yes. that's spread over three years >> and is that an outside or is that uh
personnel benefits? >> Um it it'd be outside but the we just
that's a kind of plug number for now because the scope and defining how that
updates going to happen is still being worked out.
So the um
so none of the 660 is in the fifth year of the U budget.
» Correct. So, if you backed out um 150,000 in the
fifth year for the Malard Point coordinator,
um that might be a number that would be somewhat comparable to the actual 2526
estimated. I'm trying to just look for
I wasn't cognizant of this $600,000 one, which we probably want to talk
about a little bit. It's not a small number. Um but um
I was looking at okay we've got this Malard point bump and trying to just get
a trend from 25 26 actual which presumably is kind of
a regular number pre that bump. And it sounds like um if none of that 660 is in
the fifth year and only the 150 coordinator is that if you took 150 out
of the fifth year projection, you could then compare that to 2526 and instead of
being a 10% annual increase it would be I don't know what 8% or some number.
» Yes, I I would agree with that. So um >> so I guess then the question would be um
since we have these assumptions that are kind of like four and 5% assumptions um
that um if I haven't done the math on that but
150 out of something is going to be that might lower it quite a bit actually.
Huh? Yeah, David,
» there's there's there's also a missing piece here is that and and and we talked
about this yesterday is that we may want to
account for special projects like Malor Points either on its own line or on a
subline in some way because you've got which I think is high by the way through
that five years 150 for each of those five years but nonetheless you've got
that in there rolling over those years but we don't have it we don't have a um
equivalent revenue structure attached to that
» right >> at all we have I think $100,000 over a
over a 18-month period. Um, and their fees arguably with it, road impact fees
and everything else is upwards of a million dollars. So, we've been hesitant
to um um uh plan for or project permit revenues without the permit in hand. I
think we only have the 100,000 that um Rebecca feels comfortable with um to
Helga, which is the current um demolition site work and city map
potentially the building permit on the first phase one. uh but we've got the
cost associated with it throughout the whole plan at full implementation. So
that's a that's a miss I think a little bit. Um we might want to create a
special project module that looks at both sides of it and layers onto it
because I think David's right. It's it's skewing those numbers artificially. Um,
and the the general plan will do that anyway, but you add on top those those
contractor costs for a special project like Malard, it's going to skew it even
more so than than it would otherwise do. So,
» yeah, that's that's important and and thanks for covering that. I wasn't
really looking at the revenue. I was just kind of assuming that there's
revenue generated off the project of course and that somewhere in our uh
excellent team and review that those revenues were being matched with the um
coordinator and other costs. And so I was just trying to take
» Yeah. >> and remove the whole bump. And so
you said you'd tend to agree that if I took year five and pulled out 150,000, I
could then compare that and I just did that and it reduces the five-year
increase in planning and building from 59%
to 47%. So it is close to that 8% um maybe it'd
be 8 and a4%. So I guess then my question would be why is planning and
building going up 8 and a4% per year when our underlying benefit assumptions
and so forth or you know costs or colas are in the four to 5%.
Does that make sense? >> Well so in the outer years we budgeted
for 3% colas right >> and then we budgeted for expenditures to
increase by 5%. So both those numbers are materially
below the 8%.
I'm I'm just taking year five planning and building which is um 2.11
and I'm taking 150,000 out of that which gets you to nine whatever it was and
dividing that by the expected current actual for 2526 which is 1.33
and the difference is 47%. 1.3 1.777
or 26 27 or 25 26 >> 25 26 I'm taking actual what we're doing
today and comparing it to what we're
projecting five years >> do you think rather than doing this on
the fly would it be better for Helga to come back and do that analysis and
» I guess I didn't write my email well and I sent it just yesterday so I'm I'm
perfectly fine with that it's just Um I don't no that's fine.
» I think there's a lot going on in that planning line general plan to things
like that and maybe you got to pull it out so you can so you can see what what
a normal business as usual um flow would look like to David's point and because
that that should replicate more of an 80%.
» Well if it is or or identify why it's at 8% and everything else would be lower
than that. >> Well and and it might be that it's
appropriate. It probably could be. I just don't I can't reconcile it in my
mind. >> And those projected years
take into account the change in compensation based on the
comp study in the two and a half. And so that's then multiplied by the 3%
each of the year two through five for salaries and benefits.
» So it's five plus three over five years every year. So it's cumulative eight
which makes sense to be somewhere in the 40%.
» Right. >> Right. So when we look at the um
the exhibit that shows uh I forget where it is that shows the um
assumed uh increases the cola stuff. Where is it?
Is that in your memo?
thought it was. >> It is. It's in the
» uh table six in the >> uh Yeah, I was looking at table 13 on
page 12
expenditure assumptions. >> Right. So the
» because that actually leads to my other question that was in the email. So when
we say salaries 333 um
» that's cumulative. So, you know, it takes 2627's
proposed budget salary and then multiplies that by 3% and then that new
number is multiplied by understand that um the 8%
um is the same way 8% each year cumulative. So, so that's highlighting
my question. the 3% there and and obviously you've got fringe benefits at
4%. Um other costs at 5%. But none of those approach eight. So it
sounds like there's a study that is um the compensation's actually going to go
up more than 3%. Is that what's happening? Okay. So
enlighten me please. >> Yeah I can I can comment on that. So we
have a compensation study which was kind of linked to a classification study as
well. What are people doing here? How does that compare to other agencies and
you know is it fair to pay them you know what is a fair salary in terms of the
median market or slightly below the median market for county
» and a couple of these surrounding agencies. Um and that work is still
ongoing. We're still in the middle of negotiations and close sessions with
council. So I can't, you know, talk, you know, perfectly openly about that right
now, but uh yeah, we for for Helga's purposes and what we've included in the
budget, um is, you know, a 3% cola on top of whatever is negotiated. And the
amount that we've contemplated for just the we can call the true up whatever you
want to call it to reach to the market goal that we're trying to get to. That
number is >> 124,000
» in total per per year. >> The compensation
» so is that it's >> about 5%.
» Yeah, >> it's about 5%. Yeah. As a one time.
» Yeah. Yes. And is that is that that's for non
bargaining? >> It's it's yeah
» including the bargaining units. >> Yes.
» Because you'd only change them or you'd change the bargaining compensation
outside of a collective bargaining agreement.
» Well, the collect the it comes out >> the contracts ended will end June 30th,
2026. our current contracts and that's why we're in negotiation with both the
represented and non-represented staff.
» Well, that get closer. I don't think it it closes the gap um to to the 8%.
» I mean, it would close it for the first year. 5 plus three is eight, but I know
you've got pension at four and other at five. So there's still a little bit um
not as big as um originally because of two things. One um I didn't uh
understand that 150 was in year five. So that lowers it from 10 to 8. And then
this one time potential five could be four, could be six. Who knows where it's
spread across? But that closes it further. So we're we're we're getting
we're getting closer. I'm satisfied for the purposes of today's meeting. Um and
maybe you can just dig that and we'll close that remaining gap.
» Sure, >> we can do that.
» I the kind of there were two reasons I was looking at this. One was just as a
general look at what we're projecting for expenditures and is that you know
within these numbers and so forth. And the other was to see that um you already
mentioned I think Robert that um or maybe it was Helga that there wasn't
going to be additional personnel um uh hired by the city um on an inside
staffing basis for Malard Point, but I wanted to um sort of just fair it out
that when that ship goes over the horizon um we're back and it it doesn't
leave any embed added costs that sort of just perpetuate
» and you know the other thing that's in there is
that department's portion of the UL which increased
» for next year. So that's also in that line item. So that's that was a a a
question I had in the email too because it's again that same chart on um table
13 where you've got the UL at in the next two fiscal years at 18 and 15%. And
then it goes negative and I apologize if I research this I could probably answer
the question myself but it's easier to ask you. Um is are those numbers um
pulled out of um numbers from Kalpers? >> Those numbers come from the June 30th,
2024 valuation report and it's their projections for the U for both the
safety and miscellaneous. >> Perfect. I I thought so and
» and as you know that will shift dramatically when we get the budget next
year. Yeah, as always,
» David, Dave, you might want to when you when you get a sec, um, look at you're
looking at the the the five-year projection, but look at 26 27 to sorry,
256 to 26 27, >> right?
» Um, that's the biggest jump. That's basically it bumps up. There's a 20%
bump in operating cost and then that flows a little more more flatly over
that 5year period of time. >> Well, I suspect that the 26 27 is what
includes that 5%. >> That's that's what that's the big jump
right there. >> Yeah. Yeah.
Thank you. Um
so that answers several of them. The other couple questions, um one on this
660,000 um
when is that expected to be an expense? >> So I started budgeting for it in 2728.
» Okay. So, um, and then I, like I said, allocated it over the following three
fiscal years,
» the general plan update. >> Yeah. I mean, we during our annual
retreat, we had a pretty long conversation about the general plan
update and what that might look like and whether we needed a full plan update and
whether we or whether we just wanted to keep this as a um as a live document
that we just update over time rather than just these very expensive concrete
updates every 20 years. And so I believe Peter, you and Kevin are working on that
right now to see whether we can essentially do a lot of it inhouse to
get those costs down. >> Yeah, we're trying to uh as Sally talked
about in a sense take off the the 2030 designation. I mean, that's the simple
way of describing it, but having it being a just a general plan for the city
that gets updated from time to time with um statemandated update requirements as
well as timeliness updates based on community changes, housing requirement
changes, and so forth. So, we're in the process right now of going through
identifying sort of in a matrix format what are the what are the mandated
updates we need to do so we can break down what are um perhaps some more
administrative straightforward changes we can make. um trying to avoid what
we're what we're budgeting for here, which is a in Kevin's words, a boiling
the water type of all hands- on deck general plan um rewrite, which would
probably cost more than that over the long term, having recently completed our
housing element, which is only one one part of that broader plan. Uh so we are
looking at it as a incremental update process and tasking future councils with
updating it as needed as opposed to give it a a termination date as it currently
has right now which will probably have positive benefits for that number but I
think it's wise to keep that number in there for that period of time.
» Thank you. That helps a lot. Um, and obviously we'll hear more about that
when it gets to the current year budget, >> right? And we we should know more
probably by next year, I would think. >> Yeah.
» So, >> I think the last question I had in that
email was on the climate action plan. And I know um
I'd written this before uh John's email came out um and I noted he mentioned um
a number of different sort of studies and um you know you can study a lot of
things and uh I had just identified the client action plan because um I didn't
know what it was. Um it was budgeted last year for 25,000. Um
I guess and nothing took place then and now it's budgeted for 50,000.
And so I don't want to spend a lot of time on this, but um then you'll
probably speak to some of John's questions later, but uh what what is the
client climate action plan? Is it required? Um,
and is it u going to be $50,000 and then we're done with it for some period of
time? >> Yeah, so the climate action plan uh is a
part of the city's general plan and it has to be updated from time to time.
There's uh specific state laws that have been enacted recently to require you to
meet certain greenhouse gas emission goals by again I think it's 2030. And to
get there, the climate action plan is really a roadmap of how the city can do
that. And just like the housing element, there's a ton of policies and programs
that have been contemplated in the plan that need to be implemented. Um, so
there's an opportunity other you know, Tibrron hired somebody on a well,
they're sharing the costs with Mil Valley on a for a full-time position. We
chose not to participate in that just because we didn't feel like it was
needed here. Um, but we do think for a small effort, you know, roughly 25 to
$50,000, we can have a consultant do the line share of that work for us and put
those programs in place so that we meet the requirements. Uh, you know, and uh,
you know, we don't have have compliant or or uh, you know, an action plan that
has, you know, no action on it. So, we're trying to get there.
» So, thank you. U, so is it primarily around emissions?
to like our power plant and all those kinds of
» and efficiency you know you know um renewable sources you know
» but but David I agree with so the last climate action plan we did was done by
Nancy Kimnitzer for free so I'm just I was surprised by that number as well I
don't think that we'll necessarily need that number but things are potentially
getting a little bit more uh complicated just because the way that
we measure emissions in California is moving from an annual measure to an
hourly measure, >> right?
» And because we're all contracting with MCE, which is very clean on a annual
basis, but not an hourly basis, things might change for cities as well in terms
of having to do other stuff. >> Yeah.
» Because we always relied on them. But but as I say, Nancy had put together a
working group last time and they did that, I think, with no expense, right?
» And so I I think we should aim to do something similar next time because
that's feels like a big number. >> And and to be clear, I'm all for climate
action. um just not so much for
spending money and uh I mean maybe we should do an EIR on the impact of doing
a client action plan, but >> I thought the um I thought the 50 and
the and the 150 for uh the housing element implementation were on
implementation, not so much reworking the plans themselves.
» Yeah, that's right. the the plan. I I'm sure that as part of this evaluation and
implementation, there may be some parts of the plan that need to be adapted and
updated. Uh but for the most part, we're talking about implementation. Yeah.
» Thank you. >> How do you implement a climate action
plan? >> Uh yeah. Well, like I said, just like
the housing element, there's 15 or 20 different programs you have to put in
place. Um, >> I mean, um, Tony talked about a couple
of them at the at the retreat. Um, put putting in, um, um, uh, high efficiency
lighting around the city for 80 grand, you know, doing doing, um, more
efficient, um, you know, charging systems, you know, having more charging
systems, things along those lines, which are ways for the city to overall lower
its its greenhouse gas emissions. You know, I think they all need to be
evaluated, like we talked about in the in the in the meeting, on a on a value
basis, not just for the sake of doing it. Um
the housing island stuff is a little bit more straightforward. You know, you have
you have specific programs for specific policies that you have to implement.
Again, I don't think we're going to spend anywhere near that money, but you
have to you have to um be be deliberate. HCD and whatever state a agency is
looking at the climate action plans, they do watch your efforts from an from
a from a implementation perspective. So, we certainly are going forward with
that. Certainly with our um housing updates, we are reporting our housing
updates and pivoting and um showing them as results of the plans and the policies
that we put in place.
» Okay. Um Helga, what I think we're going to do with respect to John Wilton's
questions, which we all got, why don't I just uh take them one at a time and ask
you and let you respond to them. um his overall concern was with the growth in
expenditures. He then uh had six bullet points of specific items that hopefully
you can respond to today, Helga. >> The first was that he questioned
why does the city budget staff costs at the top of the salary range for each
position when we know what our actual staff's costs are.
So, we budget that way because part of it is that it's past practice and the
other part is that all but three of our staff are at the top step of the salary
range. So, it it makes sense to budget for them and it accounts for any
increases during the fiscal year due to merit increases. So,
» okay. Second question is, is the $235,000
the annual cost of employing a temporary police officer
and do we need 30,000 study to evaluate police department staffing?
Um the 235 is the salary and benefits for a police officer and it reflects the
we budget for the the benefits the health insurance benefits at the family
rate because we don't know if the person's single but that way we have it
budgeted for the higher rate and the also the PD has additional pays like I
mentioned in the PowerPoint for uh education incentives, shift
differential, and like holiday pay that is on top of their base pay so that
other positions don't have. >> Oh, and the 30,000 police study, I'll
let Robert answer that. >> So, the the 30,000 and again, I don't
think we will be spending that amount. Um but it is earmarked for a study to
look into what would um what would they you know ideally what are the options
for the city when it comes to policing in Belvadier. Um just internally with
our own department. Do we have the best structure right now in terms of a chief
and sergeants and officers and how many officers is appropriate given the size
of our city. um you know some of that work we can do ourselves but it would be
great to have an outside opinion who you know is not just looking focused in
Marin County but sees a broader picture of here's traditional policing and
here's how you can envision that. So that's kind of part one. Part two is a a
more broad view looking at what would you know policing on the peninsula look
like if we had more of a combined department or perhaps even the JPA or
something like that. um similar to how the Ton fire pro protection district
operates and that's a bigger analysis and I think a line share of the of the
cost is probably seated in that versus uh you know the first part I mentioned
and Peter or Sally if you want to add to that feel free. Yeah, part of our our
our um work last couple years with our police chief has been focusing on um the
resiliency and the redundancy within the department, making sure that they have
the depth and the opportunity to um actually service the community in the
247 means that they um are asked to do so. Um policing is more challenging
other positions relative to to um outages, time off, disability training.
So this this was an interim step for a I think two or three year bubble to um
bring back the uh additional officer so that they can
» meet the needs of the community um from a from a redundancy and from a
resilience perspective without relying on an outside agency which has been um
considered and um found lacking in in many degrees at this point in time. um
while we as Robert talked about think about the department from a a
longer term perspective, a succession planning perspective and reimagining it
from the from from the sense of do we continue with the same model that we've
had in the past, a chief and sergeants and officers as Robert said, or do we
think about it differently? Maybe maybe think about it as a captaincy as the as
the top person here reporting to a chief in another jurisdiction or even have the
city manager act as a chief responsibilities in some fashion. um as
a way to get more of an oper operational department um as as a as a as a
possibility potential um but looking for an outside source to to validate that to
some degree because what we're relying on now um as expertise as our police
department is they have expertise in Beverly policing and we want to look at
it from a little bit more from an outside perspective as well and like
Robert said we're not looking at spending a ton of money there but
looking at um some objective check on how we're planning our staffing going
forward. >> I think what Peter isn't saying out loud
there is that we uh we don't have a working chief.
And so part of that examination is can we with a different model have only six
headcount rather than seven. >> And to clarify working chief meaning
he's his function here is primarily administrative. You know 99% of that he
will fill in for shifts as needed. But um you know again is that the best model
for us as Peter said we start looking at succession planning.
» Okay. Uh John's next question was ditto on the 150,000 for a consultant on
housing element goals and 15,000 for fire annexation study. So, our housing
element was certified this past February and so staff are working on organizing
on organizing the programs which will need consultant support. Not all of the
policies and programs will need that. Some will be done in-house. Um, so like
Peter and Robert have said, maybe not all the 150,000 will be needed, but it's
just kind of earmarked for that. Um, and it's just the implementation of the
certified housing element. And then the 15,000 for the fire
annexation study is for ongoing costs related to the evaluation of the city's
options for uh either fire annexation into the fire district or a revised
contract. So >> can I add just one thing there just in
terms of why sometimes money is well spent which is that one of the things
that we have discovered through these discussions with the fire district is
that the GAN limit override vote that we've been taking to the voters every
four years we will not need in the future and so that saves money there.
Uh this next question maybe was covered by David's comment 50,000 for climate
action plan. >> And so that's the implementation as we
spoke about about the climate action plan.
» Okay. Uh his next bullet point was questioning the 100,000 for the
insurance legal fund. >> So this is just the transfer to
the insurance legal fund. We're estimating to spend 200,000 in ongoing
um uninsured legal expenses next year, but we're only planning to transfer a
100,000. And that will bring the balance in that insurance and legal reserve fund
to 250,000 which is the minimum required balance per the policy instead of
keeping it at the 350,000.
Uh and then John the last point says that he doesn't
understand why pension costs increase so much
24% including health insurance each year even though we created an additional
fund to meet our unfunded liabilities over time.
That's the U
this year. >> Yes. You have your normal cost rate and
then you you have your required UL payment and that depends on market
performance. It's as simple as that. And so the year that we're the contribution
relates to was a year which was a bad year for financial markets because it
was 2023 2022
and 2023. >> Yeah.
So the numbers will shift again but for for this year that's what's causing that
jump along with more employees presumably in terms of the normal cost
rate. Uh yes the normal cost rate does reflect
the addition of the one and a half police officer positions. So
and then it is determined by Kalpers the amount we pay each month. Yeah.
» Okay. Uh I think that covered the item that John had. Uh questions other
questions from committee members comments.
» I have one question actually. How you just said that we you anticipating
spending 200,000 on legal and insurance claims in 27.
That seems quite a high number given that our CTL problems are somewhat
behind us. What other risks you anticipating there?
» Um, there's also a human resource related issue that we're working on and
» that will continue into 27. >> We anticipate it. Yes.
» Okay. Thank you. >> Okay. Um, if there no other comments
from the committee, uh, are there any members of the public on Zoom? All
right. Um, if there's no other questions or comments, I assume uh we should
entertain a motion to uh recommend the uh preliminary operating capital
budget to the city council. Is that correct, Helga?
» That's correct. >> Can I get such a motion and a second? So
moved.
» Is there a second? >> You can.
» Well, I can if you want to. All right. I second.
Um, roll call. >> Chair McKascal,
» yes. >> Patrick Federer,
» yes. >> And David Walker,
» I. >> That passes unanimously.
» Thank you, Helga. Uh, the last item on the agenda for our meeting today is a
discussion in costal action establishing an ad hoc pension review committee.
» Thank you, chair. Uh the finance committee last conducted a pension
funding review in December of 2023. Consistent with the city's policy to
review the strategy at least every 5 years. And based on council direction
from the retreat, we plan to bring an update to council in December of 2026.
To support that effort, we are recommending the committee establish an
ad hoc pension funding committee today to begin reviewing pensions this fall
once the latest Kalpers valuation report is released later in August.
So I proide a bit more context as well. So at the annual retreat, there were
some questions from another council member about the merits of transferring
some of the 115 and paying off some of the the KPA's UAL. And so that combined
with that request with three years since the last assessment. So, it felt like it
would be a good time to do that now so that we can report back to the council
um what the recommendations are both in relation to whether the 300,000 is still
appropriate and whether the pros and cons of putting money pulling money out
of the 115 and putting it into Kalpers because obviously Kalpers on a long-term
basis outperforms because it takes more risk. But obviously you've already
talked about the benefits of keeping money in a 115.
» And is the proposal that this would be a committee created by this finance
committee or by the city council? >> By this finance committee?
» By this. Okay. So uh meaning we would uh appoint members.
» Yes. >> And are there any recommendations,
Sally? >> David's looking in the wrong direction.
David and I worked on this last time and I think Will might be interested in
participating as well. So, if you're up for it,
» I would. I'm fine. Yes.
» And how many? Just the two of you. >> I'm sorry. Who was
» So, Will, David, sorry. Yep. >> Okay. Uh, do we need a a motion for
that?
Not today. >> Not not today.
» Okay. All right. So, um uh I will assume the committee is in agreement with that
hearing. No objections. And at that point, uh is there any other
new business to be brought before us today?
» I do have one item. >> Okay. So, um, I wanted to bring to the
committee's attention a new requirement under Senate Bill 852 that was signed
into law in October of 2025 that beginning in 2026, public officials who
manage public investments, including s certain board, commissions, and
committee members will be required to electronically file a form 700 statement
of economic interest with the FPPC. This form will be due annually on by
April 1st. This change to the finance committee.
Um, so this does affect the finance committee members since they
um have input into the investments and so this change was presented to the city
council at its April 13th meeting amending the administrative policy
manual section six on committees, commissions, and boards to reflect this
change in state law. and our city clerk will be reaching out to the members of
the committee with additional information on filing the form 700.
» And for this committee, the first form will have to be filed by next April 1st
or >> no. Um, she'll be sending out the
information in the next week or two. And so, um, you need to file it as soon as
possible. >> Got it. Okay. Any questions on that?
» Yeah, I have a question. Um, so this is a state requirement.
» Yes. And uh correct me if I'm wrong, but this committee makes recommendations and
doesn't actually take those actions. It makes recommendations to the city
council that then takes the action. So I would think um we're studying things but
we're not taking the actions to manage them.
Has that uh aspect been addressed? Um it was the recommendation of our city
attorney based on the new law because the new law states that uh management of
public investments means the non-ministerial functions of directing
the investment of public monies, formulating or approving investment
policies, approving or establishing guidelines for asset allocation or
approving investment transactions. >> So I don't think we do any of that. Um I
mean non-ministerial means fiduciary or discretionary and it I I heard in that
it says taking actions and um >> we can't do that.
» My understanding of the law from talking with the city attorney on this is that
it's any group who makes or participates in making governmental decisions. So in
this case, you know, we're developing a recommendation even though the action is
done by city council. you're you're providing insight into policy which then
is a recommendation. So air on the side of caution I guess is
what our is what our uh >> city attorney said about filing.
» I guess it begs the question how difficult is the form we're each asked
to fill out a 10page financial statement. Maybe we would like our city
attorney to reconsider. >> It's not your economic interest. It's
your it's your economic interest in things that that might conflict with
your activities. >> Correct. Right.
» So, filling out the form should be fairly easy.
» It it you have to do it online and it takes literally two minutes.
» Okay. >> Um, as long as you read it correctly.
» Do you have a different You've looked at the statement.
» I haven't looked at anything. This is the first I've heard of it. That's why
I'm asking the question. Do you want to just send me the link for that
information or Well, I guess I can wait until the clerk and then I'll raise
questions at that point if I have any. >> Right. And she'll be sending that out.
So, Okay. All right.
» Um, one of the thing that we that came up in relation to looking at um this
policy for the finance committee was that we our charter says that the uh
chair of the finance committee should be three years. Um we've actually reduced
it to two at the council meeting. Correct. because to make it more
consistent with other >> committees and so we were and also to
introduce a vice chair which we should have been doing and we haven't been
doing so at the November meeting we were hoping to do a rotation of those two
positions >> great
okay there's no other new business um >> that's all I had
» okay um I believe we're adjourned thank you everyone particular particularly.
Thank you, Helga. >> Yes. Thank you, Helga.
» Thanks, everybody. Have a great day.