[0:00] Okay, good evening, everybody. I wanted to welcome everyone to our special city council meeting. Today is May 13th, 2025. Call this meeting to order. You're probably noticing, well, I guess I was going to say you're noticing us without ties on, but I guess everyone has a tie except for me and councilmember Sirep. But I was going to say this was like a serious work session on budget that tie is not required.

[0:30] but I guess Ty is required, so I'll let that go.

[0:34] How about that, Councilmember Sirep?

[0:37] With that said, Councilmember Sirep, could you lead us in the Pledge of Allegiance, please?

[0:42] Please rise if you're able.

[1:01] Thank you.

[1:03] Madam City Clerk, if you can please take the roll.

[1:06] Thank you, Mr. Mayor.

[1:08] Councilmember Andrews.

[1:09] Present.

[1:10] Councilmember Bonilla, Jr.

[1:11] Present.

[1:11] Councilmember Goldstein.

[1:13] Present.

[1:13] Councilmember Roach.

[1:14] Present.

[1:14] Council Member Sir Menu, Mayor Selenius.

[1:19] Present, thank you.

[1:21] Next I wanted to open up for public comments since we have one item on the agenda tonight.

[1:28] And it is a work session.

[1:30] Tonight's public comments is limited to items only on the agenda.

[1:36] And I don't have any cards with me, and let me just check here online.

[1:41] I don't see any hands raised online, so I will close public comment, and I will move on to our work session.

[1:55] Today's work session is the City Council Budget Work Session Review proposed fiscal year 2025, 2026 operating budget.

[2:05] And this is going to come to us by way of our interim finance director, Mr.

[2:12] Eppman.

[2:13] And before I kick it off to him, I'm just going to go straight to him.

[2:17] Okay, I will have our city manager, Dr.

[2:21] Anavarez start this.

[2:24] But before we start, I wanted to thank interim finance director,

[2:30] Eppman and your finance team for putting together this incredible document.

[2:36] And the PowerPoint, the budget document, it was, it's a lot to digest.

[2:41] This is our first crack at this, and so I just wanted to thank all of you.

[2:46] I know you're probably going to get a lot more praises this evening on this, but

[2:49] I at least wanted to start with that.

[2:52] Madam City Manager.

[2:54] Thank you so much, Mr. Mayor, members of the City Council.

[2:57] Thank you for the accolades.

[2:58] They're very well deserved, we've been working very hard to bring this to you tonight.

[3:02] And then as we begin tonight's City Council Budget Workshop, I'd like to remind everyone

[3:07] that this is a discussion-based work session.

[3:10] No decisions will be made at this evening.

[3:13] The work session is designed to welcome your feedback from the respective council members

[3:18] on the city's proposed operating budget for the next fiscal year.

[3:23] And members of the executive team are here with us joining us.

[3:27] That will be here to support the conversation and answer any questions that you may have.

[3:31] This year's budget planning process is intentionally aligned with the city's strategic roadmap by integrating strategic and operational planning earlier in the process.

[3:42] Departmental priorities help shape both the strategic roadmap and the proposed budget for next year.

[3:49] Just a key change that I would like to spotlight is the timing of the departmental input or the presentations.

[3:54] This was front loaded to guide the priorities that are presented at this workshop.

[4:01] So tonight's presentation will focus on the proposed operating budget led by our

[4:05] interim finance director Sharif Edman with an in-depth presentation on the precarious

[4:10] fiscal state of the city of Hayward and assistant city manager Regina Youngblood.

[4:15] We close with a connection to community priorities.

[4:19] These proposals reflect the economic pressures ahead, and it also provides a close collaboration

[4:27] across departments for general fund balancing strategies, including creative reallocations

[4:34] to meet regulatory mandates, cutting operating expenses, and also capturing some salary savings

[4:41] through some existing vacancies and other cost containment actions that you will see tonight

[4:47] in great detail.

[4:47] So the next work session marks an important and early step in confronting the city's structural

[4:53] deficit.

[4:54] It does reflect our shared commitment to taking deliberate, thoughtful action to ensure

[5:00] We continue delivering exceptional services to the people of Hayward while laying a stronger and more sustainable foundation for our city's long-term fiscal health. So with that, I'll be here to join in the presentation with Interim Director Sharif Edmund along with the members of the executive team. And thank you for your continued commitment in partnership. So let's just go ahead and get started.

[5:45] Good evening, council. Thank you, city manager Alvarez. I am Sharif Edmund, your interim director of finance and I-2.

[5:52] I'm not wearing a tie, I don't want anybody to be able to grab me by that, so it's non-constricting.

[5:58] I am here today to present to you the State of the Budget, and this is the first time

[6:03] that Council has this opportunity to see this all together.

[6:06] There have been some individual conversations.

[6:08] This was also presented to CBFC, the Council Budget and Finance Committee.

[6:13] They have seen this presentation.

[6:14] I also shared this, and we have discussed this at the exec team, and I did have four sessions

[6:19] with all staff yesterday and today so that we are all on the same page and have the same

[6:23] understanding. So same presentation for everyone as we move forward.

[6:30] The agenda for tonight,

[6:32] what I hope we will talk about is talking about some of the finance basics to make sure that we're

[6:35] all on the same page when speaking some of the same finance terms, if you will, we'll discuss

[6:40] our financial situation. We'll talk about our projected revenue and expenses for next year

[6:45] and then talk about the deficit and mitigation strategies, which is really the quest of the

[6:49] the conversation for tonight.

[6:51] As Dr. Overs mentioned, all the department heads are here.

[6:54] This is meant to be a work session, meant to be a dialogue back and forth.

[6:57] So feel free to ask questions as we move along.

[7:00] Pros and cons of being in such a big room, right?

[7:02] It's acoustics I think are better in other pieces at the same time it's not as intimate as the smaller room.

[7:09] As you all know, Mayor and Council, I've been here a little over two months, and

[7:13] And I was tasked with helping out with the budget immediately since the budget was basically

[7:18] due within a couple of weeks.

[7:20] As you know, we start the budget process in January.

[7:23] March is really the heavy lift for all of the department's February and March.

[7:27] And then we present and we have the post and publish fairly quickly.

[7:32] And so the train had already left the station and this example, the boat has already left the dock.

[7:37] And I purposely picked a picture of a boat, a very large ship because the city of Hayward is a big operation, it's a big city.

[7:43] And you could be on a different level or a different floor, not necessarily know what other floors are doing.

[7:47] And it takes a while to course correct or make adjustments in this big ship that we have in open waters.

[7:53] And so I purposely choose this metaphor as we move forward in that we need time and

[7:59] change takes time and decisions take time to be able to move the ship and make corrections as we move along.

[8:05] And so that's the metaphor that I'll be using moving forward.

[8:09] As far as finance basics, when we talk about the city of Hayward, as you all know, we are a city that have nearly 1,000 employees, we have 950 budgeted employees.

[8:18] We are a $470 million organization, of that $470 million, $232 million is in general fund.

[8:28] And really under Council's discretion, as you know, is really the general fund portion.

[8:31] And we have water and sewer and other things and grants and federal funds.

[8:36] And that is not under your discretion to make decisions on.

[8:39] You can certainly see the programs and how those are funded.

[8:43] But at the same time, at the end of the day, as finance director and as council,

[8:46] what's really under your discretion is general fund.

[8:49] And that general fund for next year is projected to be at $232 million.

[8:55] You've heard us talk before, you've heard in all of your meetings in the past how you talk about a surplus.

[8:58] surplus, and surplus very simply is when revenue exceeds your expenses.

[9:02] So if you have a $232 million budget and you bring in $233 million, that $1 million is a surplus.

[9:10] Same thing on the deficit side, it's when your expenses obviously exceed your revenue.

[9:15] So if you have a budget and you're short, a million dollars, that's a deficit.

[9:21] The reserve is the actual cash at hand, the actual money you have in the bank.

[9:25] And so when we talk about reserves, when we talk about general fund reserves, that's the money in the bank that council has discretion on that any open meeting, you can make a decision to spend those reserves, you can move those reserves, you can spend them, you can do different pieces with them.

[9:40] And at the end of the day, we have multiple reserves, you might have a legal reserve or liability reserve, you have workers comp reserve, a CIP reserve.

[9:49] But at the end of the day, what's really under your discretion and that you discuss on a regular basis is your general fund reserve.

[9:58] in any typo

[10:00] Local year, as you know, when the fiscal year starts in July 1st, end of July 30th, it takes about six months to reconcile that year.

[10:06] We have to close out the books, we have to get it audited, and then we come back with our act for, we bring it back to council, and that's really the appropriate time when you assign your fund balance.

[10:16] Fund balance is what's left over at the end of the year, and so if you have a $232 million expense budget, you bring in $234 million, or $233 million, just use the $1 million example.

[10:28] So that's the appropriate time to come back to Council and say Council, we need you to assign the unassigned fund balance.

[10:35] So whatever that surplus was for the year, we come back and Council says put that back in our reserve account.

[10:41] Put that towards the CIP project, put that towards feeding the homeless, whatever it may be that's under your discretion.

[10:47] At the same time, if we don't have a surplus, if we don't have a fund balance to assign, that's the time when we come back and tell you how much reserves is necessary to be able to balance the budget.

[10:56] And so I just wanted to take a moment, I know you've heard these terms before, but

[10:59] sometimes we use reserve interchangeably with surplus or with fund balance or different pieces.

[11:04] At the end of the day, the reserve is your cash and the bank, and that's really what you're looking at.

[11:10] As you know, the city of Hayward has a general fund reserve policy, and

[11:13] that policy states that 20% of your approved operating expense budget should be set aside.

[11:19] The example that we use here is for next year's projected budget of $232 million.

[11:24] $2 million, 20% of that $232 million would mean $46 million.

[11:29] So by policy, what we're saying is that we want $46 million in our general fund reserve.

[11:35] Where it stands today is that we have $31.6 million in our reserve.

[11:39] So you can tell right off the bat we're well short of the $46 million target.

[11:44] I did take a look at multiple years, finance staff we looked at the last multiple years.

[11:50] We have not hit that 20% target.

[11:52] We've been at 18%, 15%, 16%, but not quite ever hit that 20%.

[11:57] But it is certainly the proper target to reach moving forward.

[12:01] Another metric to a way to look at this is the $31.6 million in general fund reserve is 14% of your operating expense or 1.7 months.

[12:12] And the best practice states that you want to have three months of reserve in your account to be able to account for fluctuations in the budget.

[12:20] There has been discussion of the movie theater, and as you all know, the movie theater does not come out of the operating budget.

[12:26] The movie theater was paid cash, and that cash was in your general fund reserve.

[12:31] So last year before the movie theater, purchase of $8.6 million, that was in that $31.6 million.

[12:38] So you were close to $40 million.

[12:40] You took money cash out of there to pay for the theater.

[12:43] There's another $2 million that was taken out for Watkins garage.

[12:46] there's a loan on that piece, so $10 million was shifted from your general fund reserve to pay for

[12:53] those two pieces. Over time we're going to the theory and the thought process was that you're going

[12:59] to replenish your reserves by paying it back over time.

[13:06] So in the current financial situation, as I

[13:07] continue to dig in and as the budget team which I wanted to introduce is Christina Crosby and Fran

[13:20] We sat down and we looked at the current financial situation as we're looking at the numbers.

[13:23] It became clear that the deficit was growing as you heard as a council before my arrival that we had possibly a $3 million deficit.

[13:31] And then it landed I think at $6 million and I think there were some internal discussions about a $9 million.

[13:35] Well, it was clear that the ship was heading in the wrong direction if you will.

[13:39] And when the numbers started to settle, it settled at $12.6 million is where the deficit's at.

[13:44] And I'll go through our projections, and we'll rat to get us there.

[13:49] The expenses continue to exceed revenue, that's very clear, and the spendable reserve we talked about moving forward.

[13:56] As we looked at the opportunities to balance the budget, it became clear that the one time fixes were no longer available and available to us moving forward.

[14:08] So when we looked at our projected revenue, we took every single line item in our projected revenue.

[14:12] And especially our analysts, Nick and Fran and Christina and us, as we sat down, they would analyze each line item and we have five or six years of history.

[14:21] We also have consultants that we utilize on some of these larger items and we also look out two and three years ahead.

[14:27] And so the very first thing we took a look at was, what are the changes?

[14:31] And so the net change for next year is an $8.5 million loss.

[14:35] And the biggest piece, as you look through here, the biggest source of revenue for

[14:39] us is property tax, which is the biggest source of revenue for almost every city.

[14:43] Our property tax for the city of Hayward is estimated to be at $80 million for next year.

[14:48] Property tax continues to grow.

[14:50] It's a very steady and it grows every year because folks are buying houses in the Bay Area.

[14:55] Your $400,000 home turns over and sells for a million dollars.

[14:59] Over there.

[15:00] The growth has slowed and the growth is slowing because number one, the interest rates have been very high and so that discourages buyers to buy. The second piece is there's been saturation and most of the people that wanted to buy a house bought a house during COVID or during the pandemic and that has slowed down as well. So that growth where you may have seen three or $4 million per year is the growth is only $2.5 million for next year. A piece that we talked about that some of you we were not aware of in full detail was the

[15:29] the $4 million in sales tax.

[15:31] The $4 million in sales tax is due to BART cars.

[15:35] The BART light rail system, the BART system,

[15:39] we're renovating their BART cars and replacing them with newer, more efficient cars.

[15:43] They would purchase these cars from New York, they would ship them to Hayward.

[15:47] The BART has their own corp yard, if you will, in Hayward.

[15:52] As they would put those on the line, we would receive that sales tax.

[15:55] And so that was an artificial bump if you will for the last two or three years.

[15:58] and that has stopped, they have finished that project.

[16:01] So that sales tax revenue would not continue.

[16:05] We had originally budgeted $2 million based on our consultants analysis.

[16:08] They did tell us just about a month ago, right before we were getting ready to finish the

[16:12] budget, that the actual impact is $4 million.

[16:14] And so we have built that into the budget moving forward.

[16:17] But sales tax, absent the BART car anomaly if you will, continues to grow steadily since

[16:24] the pandemic.

[16:25] We've all talked about, and we've known about the $4 million loss in ARPA.

[16:29] ARPA funding is now complete, if you will, all those projects have been dedicated and will be spent.

[16:34] And so there are no ARPA funds for next fiscal year, so that has to be backed out of the budget as well.

[16:41] In line with the property tax and the sales of houses, city of Hayward has a real property transfer tax.

[16:47] Not all cities have a real property transfer tax, only charter cities that implement this have this.

[16:52] And so we're fortunate to have that and what that is is there's an actual tax that gets charged on the actual transfer of the property.

[16:58] So not only do you get the ongoing property tax, but if a $400,000 house sells for a million dollars, there's a tax on that and we receive that revenue.

[17:06] Based on the slow down of the sales of houses and making up a number, if it was a hundred houses that we sold last year, we're estimated you would only sell 50 houses this year.

[17:16] So it would be about half that number, so that's a $2 million impact to the general fund.

[17:21] As you're aware, we're having conversations regarding TOT.

[17:25] The total TOT revenue is estimated at $3.5 million.

[17:29] We have had discussions on that.

[17:30] We're coming back to CBFC and coming back to Council to recommend what the final TOT tax should be for next year.

[17:38] As we make those decisions, we'll make that adjustment in the budget.

[17:41] But as you can tell, we're talking hundreds of thousands of dollars, maybe $500,000 as opposed to millions of dollars in some of these other pieces.

[17:49] So as we project it out, a $219.7 million general fund, we went to the expense side.

[17:59] You can see very clearly that we have a $232 million general fund expense.

[18:04] And so right off the bat, you can tell that there's a $12.6 million difference between our projected revenue and our projected expenses.

[18:11] As you all know, the state of Hayward is just like every other city in that we are a full service city.

[18:16] and we provide services to the community, and so all of our expenses, 80% of our expenses are in salary and benefits.

[18:23] And so when we make increases to salary and benefits, it obviously affects the entire bottom line.

[18:27] And the reason for the $11.2 million increase for next year is that it is the first full year of MOU and

[18:34] staff commitments that were made last year.

[18:36] There were some staff adjustments, some equity adjustments, and all of the different commitments we made on our staffing levels and staff MOUs.

[18:45] The fire department, for the first time, we're budgeting correctly, if you will.

[18:50] And making sure that it's transparent on the $7 million that's been the running rate for the fire department.

[18:56] However, there's been conversations, and there's been a commitment that the $7 million running rate or

[19:01] the annual run rate for fire is going to be reduced to $3.5 million.

[19:06] And we have a budget of that $3.5 million and not the $7.

[19:09] How do we budget the $7 would have been much higher?

[19:11] And so that reduces the overall over time, because I know folks have asked what's the overall over time for the city, and we're about $14 or $15 million a year, we've lowered that by the $3.5 million to reflect fire.

[19:27] When I first came to the city of Hayward, many folks said, you know what, Shree, if we've had this issue before, we've been in a deficit before, every time we say the budget is really bad, it turns out not so bad, or turns out we're okay, or we kind of figure it out, and we've been here before.

[19:40] And I wanted to check and see, you know, really where that was coming from or that was coming from and it turns out there is a lot of truth to that and validity to that.

[19:48] And the reason why is Hayward has been very fortunate to be able to have one time fixes and also some ongoing fixes when you've gone back to voters in different pieces.

[19:55] And so, I as your finance director, the city manager, the exact team, there are different

[20:07] We are looking at a TOT increase to be able to supplement our income. The city of Hayward has a real property transfer tax that helps, and that's a couple million dollars, for the agency. You also went back to the voters and the voters approved to have sent sales tax. You've gone back to the voters. You asked for a UUT increase, the utility user tax. You have different funds, as we mentioned.

[20:28] You might have your general fund reserve, you have your cash in the bank, you have other cash accounts.

[20:34] You have a liability account, you have a workers' comp account.

[20:38] And if different years you've overfunded those accounts, or you don't need all that cash is in there, you're able to make shifts.

[20:44] And so the last shift that council made, I believe last year or year before, was actually shifted cash from the workers' comp account into your general fund reserve.

[20:53] So there's different strategies there.

[20:56] Obviously, you have reserves for a reason, it's a rainy day fund, you use your rainy day fund as needed, and then there's vacancy savings.

[21:03] It would be very easy to come today, and I want to make sure that this point is heard to say, thank you all for coming today.

[21:09] The budget is balanced, we've used $12 million of reserves, right, and we're good to go.

[21:14] However, the $12 million is too large, it's too large just to say that we've balanced it.

[21:19] Had the budget been within $2, $3, $4 million, I think you could very easily say we'll use reserves and try to adjust.

[21:27] However, the $12 was too big, and I think it would be impudent and unwise, and obviously City Manager Alvarez and

[21:32] exec team, we've all agreed that the best approach is to really solve for that $12 million because we have a structural deficit.

[21:38] If you took it all out of reserves, your $32 million would be reduced by the $12 million and

[21:45] And obviously that 12 million would just continue to grow if we didn't make any course corrections.

[21:49] The last piece are vacancy savings.

[21:51] Vacancy savings is kind of like your last tool, your last internal tool to use.

[21:55] It's your cushion, if you will, in a budget.

[21:58] You know at any given time, when you have 950 employees that you're not going to have all of them employed all at the same time.

[22:04] Because you have recruitments, you have people that leave, there's a trition, there's turnover, and it takes time to hire.

[22:09] And so to take advantage of that vacancy savings, the city of Hayward has built in two, three, four percent in the past.

[22:15] In this budget, for this year, we're actually budgeting 5%, which is the highest that we've gone.

[22:20] That 5% vacancy savings represents $9.8 million, it's a lot of money to bank on your vacancy savings obviously moving forward.

[22:29] We were not comfortable moving higher than that, right now the current vacancy savings is actually at 10% for the agency.

[22:35] However, keep in mind that as with any organization when you have vacancies, there are folks that fill in those gaps.

[22:40] whether it's a temporary position or a contract position or a retired a new

[22:45] attend or a workout of class and so you need to be very careful that you're not

[22:49] actually eating until costs of actual monies that are being spent to get the

[22:54] work done. And so that's the piece of the vacancy savings. So the vacancy savings is

[22:58] usually your last dial to help. And so when I came on board as your interim

[23:03] director of finance and in discussion with the budget teams we've already used

[23:06] these tools. So I've run out of tools. I can't, there's nothing else, there's no other

[23:10] levers to pull or to push or to move. And so when the 12 really settles at 12, that's

[23:16] very clear that you have a structural deficit. It's not just a one time thing where you can

[23:19] make a fix. And so the $12.6 million is here and it's here for discussion. And the metaphor

[23:26] of the boat, if you don't make a correction to the 12.6, given all the costs that we have,

[23:30] given the cost of living and everything that we do, that 12 turns into 14, turns into 16,

[23:35] 13 turns into 18, and if you don't write the ship, right, can get very squarely, very fast.

[23:42] Before even presenting the budget to Council and to staff,

[23:47] City Manager Alvarez and the executive team came together and we made some department wide reductions.

[23:52] And you may have heard about the 2% reduction department wide.

[23:58] This slide is a little misleading because when we talk about the department wide reductions of $480,000,

[24:03] There's different departments that did different things, and you can see the reductions that were made in some of these departments.

[24:10] What's not on here is you don't see police or fire or DSD or the IT department.

[24:15] They've made different types of reductions that didn't quite fit so nicely into this box.

[24:19] And so for example, for the fire department, they obviously have the discussion of the $7 million going down to $3.5 million.

[24:26] There's also the suspension of me who, that was recommended by the fire chief to suspend that for one year.

[24:31] So that alone is much more than a 2% reduction.

[24:34] The suspension of me who is about $1.5 million.

[24:37] The IT department uses internal service funds for different projects.

[24:42] They've also deferred about $750,000 in projects to a different year, so we don't spend it this year.

[24:50] The developmental services department did come up with their 2.5% reductions, but

[24:55] they also made adjustments to make sure that their other funding and

[24:59] some things that were in line that they don't...

[25:00] We don't always pay for their overhead costs that we made sure that we made adjustments accordingly. So they just not everybody just fit nicely into this box and we can go into detail if needed. The other piece is there's also just on a bigger level. There was clear discussion that needed to happen regarding program reviews of police and fire because police and fire is so big. We're really looking at the program model for police and fire. What's the best model for that? What's the best fiscal model for that? How do we sustain that moving forward?

[25:27] For lack of the better term, the police department has been put together by duct tape and

[25:31] mandates for some of the pieces that we're doing, and using vacancy savings and

[25:35] all the different pieces to try to get it done.

[25:37] And we really want to take a look at how to better build that model for the police department moving forward.

[25:43] As you all have heard in the past, one of the first things when we saw that the budget was really settling on a much larger deficit,

[25:50] I went to city manager Alvarez and recommended that we have a fall revise.

[25:54] As you know, we do a mid-year revise, and the mid-year revises in February or March, but we felt that that would be way too long to wait because the boat is still, the ship is still moving in a certain direction.

[26:05] And so what we wanted to do was introduce a fall revise so that we can come back to City Council, really have more time because the budget was literally due as we're talking about it.

[26:13] that's what's due now needs to be printed, and we need time to be able to sit down,

[26:17] relay that justice, sit with the department heads, and come up with true strategies in the fall and in the future moving forward.

[26:24] So the ask that was approved by City Manager Alvarez and by council is that we come back for a fall revise, and that's our intent, and we can talk more about that tonight as well.

[26:38] So, as we finished building the budget, it was clear that we needed a timeout, right?

[26:45] And so this was kind of like the reality check, the timeout.

[26:48] And so I came up with different words and I was trying to find the right nomenclature.

[26:51] But it was the period of respite, it's the rest, it's a no growth, let's take a chill pill.

[26:57] Let's all just kind of pump the brakes, whatever words you want to use.

[27:00] But this was the time for us to really take a look at the budget and

[27:04] our structure as we move forward.

[27:07] And so what we've recommended, what I've recommended, is that we evaluate all programs.

[27:10] We look at a departmental review.

[27:12] As you know, council, it's very easy to say that all of our programs or

[27:16] course services, all our programs are important, all our programs are essential.

[27:19] But really taking a deep dive into that.

[27:21] And are there programs, as you've mentioned on the dias before, that something that the county can do,

[27:26] or the state can do, or that the school district should be doing, all those different pieces?

[27:29] And so this is the slide or the time where we talk about you can't do it all, right?

[27:35] You're not able to feed the homeless, have your beds, clean the streets, have your PCI,

[27:41] cut the trees, do the lights, something has to give.

[27:44] And so financially, you just don't have the means to get everything done that you need.

[27:48] And so really need to start, it's an interesting way to put it, but

[27:52] to say, reprioritize your priorities, because you're not able to do it all.

[27:56] At the same time, obviously encouraging staff, council, and the community feedback.

[28:00] We want to hear from the community, we want to hear from staff.

[28:03] There are many things that staff have ideas that we don't know because we're not involved.

[28:07] We're not in the trenches and they could have some really great ideas.

[28:10] And this is not just a cutting exercise.

[28:12] We also need to look at revenue enhancement and where are their opportunities to bring a new revenue moving forward.

[28:19] I purposely have on this slide mayor and council position management.

[28:24] And this was very poignant, and I made it very clear as we were talking to staff.

[28:27] This doesn't say layoffs, this doesn't say furloughs, it says position management.

[28:32] The first part of position management is really taking a look at your vacant positions,

[28:36] making sure it's not business as usual, that we don't just hire for a position just because someone left yesterday.

[28:41] We have to take a look at every position that becomes vacant, how it's funded,

[28:45] not all positions are funded equally, some are grant funded, some are enterprise fund funded,

[28:49] some are general fund, some are public facing, some are safety facing.

[28:52] So there's all these different factors that you want to take a look at.

[28:56] At the same time, Kent Sugarcoat the fact that it is a $12 million deficit and

[29:00] it has to come from somewhere.

[29:01] And so rather than have it being financially based,

[29:04] really the the the decisions need to come from the program site and

[29:08] make decisions on your programs.

[29:09] And then how do you fund that and how do you have the positions match that moving forward?

[29:16] What's our message?

[29:18] So our message obviously is serving our community as our number one priority.

[29:21] I am your finance director, I'm the money guy.

[29:23] By serving the community is our number one priority, not the money, right?

[29:26] That's number one.

[29:27] Everything is on the table.

[29:29] We literally want to take a look at everything.

[29:31] Some discussions might take half an hour.

[29:33] Some discussions might take three years, depending on what we're doing.

[29:37] But really need to take a look at everything.

[29:40] Input from all stakeholders is key.

[29:43] Integrity and stewardship of funds is our number one priority, obviously, and finance is making

[29:46] sure everything we do has integrity and that we're maintaining the stewardship of the funds

[29:50] that are given to us.

[29:51] And then at this point, I stress with staff and we've stressed many times an exact team is that this really needs to be measured and thoughtful.

[30:00] It needs to take time. It needs to be measured. And we can't just come in with an axe or a hammer and expect to have a real change because you're not really changing the structure or the structural deficit as you move forward. So we want to make sure that we're sensitive to that. Change does take time like we talked about. It takes a while to write the ship. The hope is that the ship moves into the right direction. So the deficit actually starts to decrease as opposed to increase. Making our decisions based on priority, redefining our core services, and then evaluating all positions.

[30:29] based on priorities as we mentioned.

[30:32] This last slide council is a very small bullet point.

[30:36] This could be its own presentation.

[30:37] It could be its own page.

[30:39] But this is the monitor federal funding slide.

[30:41] This is the effects of our new president.

[30:44] This is the effects of the White House administration

[30:46] and some of the threats that have come through the door

[30:48] or through the mail.

[30:51] Two threats in particular.

[30:52] One is eliminating or cutting funding for agencies that have DEI programs.

[30:59] The second piece that's been about, not only for us as a city but nationwide and in the news, is reducing funding for folks that are sanctuary cities.

[31:12] And so those two have been on our radar, we're taking a look at that.

[31:14] The federal funding for the city of Hayward is about $22 million.

[31:18] Most of the federal funding and that $22 million are project based, so there is some a little bit of flexibility there.

[31:25] However, you still have CDBG funds, you do have grants that come through in other pieces that we need to take a look at.

[31:31] This budget with the $12.6 million deficit does not factor into any changes in federal funding yet.

[31:38] If need be, we would obviously make some adjustments and come back to council with that as we move forward.

[31:47] That is the end of my portion, the fiscal portion of the survey.

[31:51] I'm going to hand it over to Assistant City Manager Youngblood to talk about the resident satisfaction survey and

[31:56] I'm tying in to our priorities.

[31:58] Thank you, Sherit.

[32:00] As you prepare to ask questions and discuss the proposed budget,

[32:03] it might be helpful to recall what residents had identified as their top priorities

[32:09] and concerns in our most recent survey.

[32:11] Issues like housing cost, homelessness, crime, and infrastructure maintenance,

[32:16] particularly as it relates to potholes and litter remain at the forefront of their minds.

[32:21] These concerns are consistent with the broader trends we've seen over the past few years

[32:25] and provide useful context as we consider service levels and resource allocation.

[32:30] Some of these concerns like street maintenance and public safety fall squarely within the city's scope.

[32:36] Others such as housing costs are influenced by regional and statewide scheme factors.

[32:41] But still shape how residents experience and evaluate local governments.

[32:45] Next slide.

[32:48] This slide highlights the services that residents consistently rank as most important to them.

[32:53] Emergency response, neighborhood safety, and maintaining clean, well lit public spaces,

[33:01] remain top priorities.

[33:03] These also show strong interest in supporting local businesses that contribute to a sense

[33:09] of stability and belonging.

[33:11] These insights don't prescribe specific actions, but they do reflect the kinds of services

[33:17] that residents most associate with effective government.

[33:24] Residents also pointed out for us the areas where they see the greatest need of improvement,

[33:31] particularly around homelessness response, housing access and street maintenance.

[33:37] Residents have shared that they want to see more visible and responsive police presence

[33:41] in neighborhoods and not just general law enforcement.

[33:46] Traffic circulation also came up as an area for improvement, though the survey does

[33:51] not specifically tell us whether this relates to congestion, street design, or other factors,

[33:57] that is just something that we know is important to them.

[34:02] So in closing, tonight's presentation outlines the current fiscal context and the choices ahead.

[34:08] These slides, last three that I just presented are simply intended to reflect what we've heard

[34:13] from the community and may provide you with useful context as you continue your

[34:18] discussions.

[34:27] Thank you okay this is a work session and so what I'm going to do

[34:31] first is as we go over our notes here I'm going to open up for public comment and

[34:37] see if there's any public comment I don't have any public comment cards and let me

[34:44] see I do have one public comment online so I'm going to go to Suzanne iPhone. Go right ahead.

[34:52] Hi.

[35:00] I just want to say, hallelujah, we're finally facing reality, and going back to the way things should have been all this time. Thank you.

[35:17] We do not have any more public comment. So I will close public comment, and then I will come up to the day. And we have councilmember Bonilla. All right. Thank you so much.

[35:32] mayor, and thank you, interim finance director, and the whole finance team and everyone for this great presentation.

[35:42] So this assumes 14% TOT increase, right?

[35:47] So if, and that's about 1.5 million, so anything that we do to decrease potentially that TOT would,

[35:55] we would start throttling that 1.5 million and anything we throttle there would just be a further hit on the reserve.

[36:03] Councillor Marbonne, the budget does have a built-in of 12.5, as it stands right now.

[36:10] I thought it was 14.

[36:10] We did put in a couple hundred thousand dollars as an increase.

[36:14] So however way you look at it, the increase in TOT could either represent a 12.5 which was

[36:21] CBFC's recommendation plus a couple hundred thousand dollars, or you could look at it as

[36:25] a 14%.

[36:25] It actually turns out to be almost the same number.

[36:27] And so whatever we decide in whatever you decide in CBFC, which is then the recommendation to counsel, we will adjust accordingly, but you're literally talking about probably $100,000 in the entire budget.

[36:40] So the placeholder is 14% or the 12.5% plus a bump increase to make up to that 14% for your answer is yes, to give you a convoluted answer.

[36:50] No, no, that makes sense because I just, I think that grounding is helpful because whatever we don't do with TOT is going to be a directed on the reserve that we have.

[37:01] So I think I have sobering.

[37:04] But the other thing that I found kind of interesting is if we don't solve this 12.6 million, this will bring our reserve down to like roughly 8%.

[37:14] What would that do generally if we're writing it in 8% reserve?

[37:20] That's correct, I can't remember.

[37:21] Basically, it's difficult because your reserve is your only account that you have at

[37:26] the end of the day for a rainy day fund.

[37:28] If a funding stream stops, if something gets delayed, if something happens, same with your

[37:33] home expenses.

[37:34] If you don't have some sort of savings account for the refrigerator breaking or the washer

[37:38] dryer going out, our washers and drives are much more bigger ticket.

[37:42] But to have a $470 million organization, $230 million organization with a reserve of 8% would be troubling.

[37:53] It would not, that would not be best practice and I would not advise that that happened because there's so

[37:58] many things and we're living in such an uncertain time right now that if something was to occur, you do not want to be there.

[38:04] The bigger peace councilman is not just the fact that it's 12.6.

[38:08] I remember that 12.6 grows right all costs will go up and so absent any direction you'll still be in the same boat next year just looking at higher expenses.

[38:17] Yeah, no, I mean, I agree that we need to do whatever we need to do to protect that reserve and I don't even like it being at 14% spendable.

[38:28] One of the things I asked us to do kind of generally was to look at strategies to claw back some of the reserve, not just kind of keep it flat.

[38:35] That because going into all of this uncertainty, just this year, this budget cycle, and in future budget cycles, 14% reserve doesn't really give us much wiggle room for all of the uncertainty that we can be facing when we look at just the uncertainty of federal funding, you had mentioned that's 22 million, we wouldn't even have enough money in our reserve to cover that if we didn't take aggressive action to really solve for this 12.6 million that we have here.

[39:03] So, I do appreciate the creativity of staff and everyone to come together to really understand the sense of urgency in this moment for us to need to tackle this budget with the true sense of purpose and sensibility.

[39:18] The other question that I had is, when we looked at the resident satisfaction survey results that Assistant City Manager Youngblood just shared, the second I believe the second priority was homelessness, right?

[39:31] So this budget document also says we get less than 1% of county investment in homelessness services.

[39:40] So what is the plan for us to work with the county?

[39:44] Because Hayward certainly represents much more than 1% of county services across the COC.

[39:50] So what are we going to do to be intentional about working with the county to get more of that pie?

[39:55] Why? Our community services.

[40:00] Manager Amy Cole Bloom has been working very tirelessly with the county and also her regional

[40:05] counterparts to strategize what we can do to have the county actually meet its promise to

[40:11] use measure W funds towards homelessness. There is a growing concern that there are some

[40:16] members of the Board of Supervisors who have an idea of using those funds in a different way.

[40:21] We would ask your assistance in lobbying your counterparts to utilize measure W in Alameda

[40:27] the county to help us with our homelessness situation.

[40:29] There's some other federal funding or state funding that may be coming available state funding in particular.

[40:36] That's associated with Gavin Newsom's new requirements, that could be about $3.3 billion that we could seek funding for.

[40:45] But that may require our stance on encampments to change.

[40:52] And if I may also add, Supervisor Markis has been a great advocate for the City of Hayward.

[40:58] And when I alerted her to the information in terms of the investment from the County

[41:03] Human Services Agency, she was able to engage in conversations with staff and they're looking

[41:09] at the investment and it's much greater than 1%.

[41:13] So we'll be coming back in the fall revised to give you the accurate number.

[41:17] Got it, thank you.

[41:20] Speaking of the fall revise, I was going to go there in a few questions, but I guess I'll go there now.

[41:25] What does it look like between now and the fall revise, and I guess what are we, what's the target?

[41:31] So is tonight we're just saying, hey, we have a $12.6 million problem on our hands, and then are we saying between now and this fall revise?

[41:40] Staff is going to work together to close that, or are we saying that we don't know what's going to come out of it?

[41:46] that we're hoping to see some reduction, but is there like a target to say that if we're looking at, you know, this, this 12 million, we want to come out of the fall revise, you know, less than two, I don't know, like, how are you thinking about the activities between now and the fall revise so the, um, there's a lot of work that needs to take place and it's going to take a, it's a multi year reset, we're hoping that by the fall revise will have a better understanding and a new number to share with you, particularly, particularly around the police department

[42:16] So, we're restructuring the police department's budget, so that's a lot of work that we're currently embarking on.

[42:23] And also, we're looking closely at the library.

[42:27] If you notice the library is not on the list, and that was a question of the year, why is the library not there?

[42:34] Because I really accepted them from their contribution of the 2%.

[42:38] Because the library needs microsurgery to minimize the impact and we need to have the opportunity

[42:45] to bring in offset some of the losses with additional resources from outside the general

[42:51] fund.

[42:52] So there's a lot of work that needs to be done.

[42:54] We don't have a specific numeric target, but it's definitely a sovereign conversation as

[43:03] how can we reduce the use of the reserves.

[43:05] So something of substance, something meaningful, but it's worked that we're currently doing.

[43:12] So I can give you a number.

[43:16] Okay, so when, so I guess the process would be, I know we're not passing the budget.

[43:23] So it's a work session, but later we would essentially pass the budget with $12.6 million in reserves that we're going to say yes to.

[43:36] Essentially, we're going to, you know, go into this saying, we're dropping our reserve to 8%, unless something comes out of this fall revise.

[43:44] But if we don't get the juice out of that fall revise squeeze, we're going to be thinking this reserve to 8%.

[43:53] Councilmember Boney, I guess because the budget is coming back on June 3rd, which I believe is what is that two weeks, two weeks out, three weeks out, council before them would be looking at a budget with a $12.6 million deficit.

[44:06] The intent is to say, you're approving a budget absent any direction worst cases that you're going to use $12.6 million in reserves, however the commitment from City Manager Alvarez and staff and the exact teams that we're not going to do that.

[44:20] Using the metaphor of the ship, the hope is that over a multi-year process, that $12 million turns into nine, turns into six, turns into three, and then you break even, and so you would expect, and we would all expect that by the fall revised that that number is going to shrink, and how long it will take, you might have one bite at it that takes a million dollars out right away, six months of nothing, and then two years from now, there's a plan for $6 million to be reduced.

[44:44] I don't know what that looks like yet, but the intent is that that ship has to move in

[44:49] the right direction, and reserves are here for a reason on the flip side, right?

[44:53] To be able to cushion that, however, to use it to do nothing and just take 12 would be

[44:57] improvement but steps need to need to happen.

[45:00] And short order to make sure that you don't fully utilize that $12 million, because it's very difficult to get that back, as you mentioned. Yeah, I mean, I was almost going to ask and I don't know if it's realistic, but it's like, what can we do between now and the next time we see this budget to not be at $12 million, right? Because I'm not comfortable going into this with $12 million and then saying, I'm hoping that over the next three months, we're able to figure it out. And I don't even know when the fall revises. Is that September? Is that October, the longer we wait, the more we're burning, the more we're not going to be able

[45:29] So I totally respect what you're saying, and I also see the snowball effect and the compounding effect of us not taking serious urgent action like now.

[45:40] So that's sort of some of the ways that I feel about that, a few more things, and then I would left here from the rest of the day.

[45:47] But what's driving the 14 net new employees for the city when we're looking at this kind of structural deficit?

[45:53] I mean, are these 12 net new because when I saw the numbers of staff, right, we're going up by 14.

[45:59] So are those like absolutely mission critical roles that the city cannot survive without?

[46:04] No council member, there are no increases to the budget.

[46:07] It's exactly the same from last year.

[46:09] So as far as I want to make sure we're on the same page.

[46:14] So it says staffing summary on page 29, it says in 2024, we adopted a general fund budget of 686 staff.

[46:22] It says in 2025, we adopt it one of 700.

[46:26] What's driving that increase between 686 and 700?

[46:31] Is that 24 to 25 council member because 25 to 26?

[46:34] Oh, I see it, so it's probably some of the staffing increases that we've got this year is correct.

[46:40] So to make it clear, to make sure we're all on the same page, there was an increase two years ago.

[46:45] However, council member Bonilla and council, the budget is exactly the same.

[46:49] So it's 700.6 I believe, I don't have, I'm not looking at the, 700.9 that's the exact same number for next year, and the same number for all staff, including enterprise funds.

[47:00] So there, it's a status quo personal budget there are no increasing.

[47:03] Thank you, thank you for that, thank you for clarifying.

[47:05] Nope, I miss read that, thank you.

[47:07] Okay, two more quick ones.

[47:09] How realistic do you think it is that we're going to get to a 5% vacancy savings when we've targeted previous years like a 3%.

[47:18] Because I guess I just want to make sure that the assumptions we're going in building this budget with are, you know, are strong assumptions.

[47:25] So what was our vacancy rate maybe last year?

[47:28] Vacancy rate last year was probably around 10.5 to 11%.

[47:32] And as interim finance director Sharif Edmund said before, we're currently at about a 10% vacancy rate.

[47:40] I think that happens naturally, but we are also in addition to the natural attrition going to be

[47:47] employing a vacancy management strategy where as Shreef said,

[47:51] it's not going to be status quo.

[47:53] We're going to be evaluating each vacancy

[47:54] against six different criteria to determine whether or not

[47:58] it needs to move forward.

[47:59] And if it doesn't move forward, and it stays in a low status

[48:03] for filling for a period of time,

[48:06] we can think about the elimination of those positions

[48:09] altogether.

[48:10] But obviously, as we get to a space where we're looking

[48:13] at positions that have been vacant for a very long time,

[48:16] And we will need to engage our labor partners about the redistribution of work.

[48:20] Yeah, that's a very good point.

[48:24] Okay, and then as it relates, my last question here is,

[48:28] as it relates to the reductions that we saw to get to the, I think like $480,000, right?

[48:34] I was kind of, I thought I was hearing something around each department may be contributed to 2% reduction,

[48:40] but I don't think that that's accurate because the maintenance department has a $55,000 reduction

[48:46] I don't know what their overall budget is, but then HR came in at $150,000, and I'm assuming their budgets aren't equal.

[48:52] So, how did we proportion, or what percentage rather of these reductions?

[48:58] What's the percentage of these reductions against these department budgets?

[49:02] Very good question, and that's why that slide was awkward because it's a net reduction.

[49:06] And so it doesn't quite capture, and if we have put in a slide, it would get very detailed.

[49:11] And so to use the example of maintenance services, they did come in with a 2% reduction.

[49:15] However, they're in charge of the PG&E bill, as an example, or other contracts that are beyond our control, and that will just wipe out your 2% reduction for lack of the better term.

[49:24] So when departments came in with their 2% reduction, let's say my task as a department head was to come up with $100,000 in reduction.

[49:31] I come into that meeting, I make my $100,000 reduction, but at the same time, you need to note that the PG&E bill is higher.

[49:37] So I can't come up with a $100,000 reduction.

[49:40] It's going to be reduced by a $30,000 increase, or my contract to cut trees or to paint the road or to do something.

[49:47] And so that's why that slide is a little difficult to fully share as opposed to the aggregate is saying the department heads came up with $500,000 in savings, where each department is a little bit nuanced.

[49:57] And other departments had different fundings and different pieces attached to it.

[50:00] So it's not as clear as it can be. But the task of the 2% was met by the departments with the exception of the library, which was exempt, and then moving forward. And then if you look at fire, for example, suspension of me who $1.5 million is much larger than 2%. Right? And so that's why it's hard to put on one slide exactly what happened in each department. Yeah. I'm just really looking forward to this fall revise because I think what my concern is, is if we just did all of this work to get to 2% and we're talking $480,000.

[50:30] And then me who I get it and that was our big landslide of 1 million or 1.5 million, but we still got to reduce 12 million.

[50:38] I'm like we just had all of these departments do all of this work over all of these months and we're reducing half a million dollars.

[50:45] And we have to somehow work together to really figure out how it is we're going to balance this budget so

[50:52] we don't bankrupt the city and that we can continue as you so eloquently said, centering the services that our communities expect.

[50:59] So, I do look forward to being involved in whatever way possible around discussions related to course services and better prioritizing and really collaboratively working to make sure that we're shaping a budget that serves everybody in our community the best and obviously this is the city that does that and our workers do that.

[51:21] So, wanting to just make sure that, you know, we're really centered on the seriousness of this and how it is we come together to really solve it, because this is something that has to be solved, but I know our leaders in the city are committed to doing that, so I look forward to working with you guys to see how we're going to be creative in making that happen. But thank you very much for this work session.

[51:38] Thank you, Councilman Brandrieu.

[51:41] Thank you, Mayor.

[51:42] Thank you, staff for the presentation.

[51:44] I wanted to get more information about measure W and what are the other priorities the supervisors are looking at.

[51:55] Unfortunately, I don't have that information, but I do know that the promise that was made when the measure W was passed was related to homelessness and homelessness response.

[52:04] But I can certainly check into that and get back to you.

[52:07] Okay, well, we should remind them of what those priorities are, what they went out for, but yes, I would like to see a proportionate response.

[52:17] We were looking at those dollars when we seek funding from MeasureW and I look forward to partnering with the Board of Supervisors because this is a regional problem and we need their support to address it.

[52:31] I wanted to also get a little bit into economic development and I understand that we have

[52:40] been filling these, the sales leakage types of businesses.

[52:46] We've been addressing those.

[52:48] We've been adding furniture stores, grocery stores, restaurants that people have been asking

[52:54] for.

[52:55] We wanted to see how are we looking at the other item that was brought up last week, which was entertainment, and how that is actually causing us not to be able to collect as much TOT as we could if those hotel rooms were being filled.

[53:14] And I wanted to see how can we revisit that department or other divisions to kind of help with entertainment.

[53:25] I understand we have a special events process process now, which I really appreciate.

[53:31] But it seems like our, I would say the organizations that could be part of this solution don't have the infrastructure to do it.

[53:41] So what are we going to do as a city to address it?

[53:44] How can we look at our current infrastructure with our current budget to do what we need

[53:49] with our hotel liars have been asking for, which is to bring more entertainment to the city

[53:54] as I've been seeing with neighboring jurisdictions?

[53:59] I don't know who can do that.

[54:00] I don't see that our chief economic development officer is here to answer that question and

[54:06] I would not want to speak on his behalf.

[54:09] Okay.

[54:09] I would, well, is there, maybe because he's not here, which is fine, since this is just

[54:16] the work session, I would like to see if we can restructure how we, if we don't have

[54:23] a visitor's bureau, if we have a couple of agencies that are not bringing in the entertainment,

[54:29] we need to figure out how to do it and house with the staff that we have and see if we can

[54:34] revisit their priorities. If that's something that we can do internally, I think this should

[54:39] be the highest priority right now. Because as Director Finance, Director Finance at Menace

[54:45] said, we've pulled all these different levers. We've gone to the voters. We've done all these

[54:51] things. This is the only lever that we have. And then also, wanted to see if-

[55:00] We can also look at visiting our permitting process, seeing that there's any ways we can streamline. I know we have a new online system which I'm hearing great things about, so hopefully that can help with reducing some of the costs that is to manage those permits. But we wanted to see if there's any other, since we've already done that, are there any other appeals or

[55:29] fees, processes that we can look at to make it more efficient to collect those fees.

[55:35] So it's reduced, you know, energy on staff to get those fees but we can get those revenues

[55:41] sooner quicker.

[55:44] I don't know if there's any other, if that's, I mean, if someone wants to respond to it

[55:48] great, if they don't go and take a note of it, I'm just also trying to look at any other

[55:53] levers we can look at.

[55:55] But I know that we also in the past ask for a list of properties.

[56:00] And I know there's some concern about how we approach that, but I do think we need

[56:04] to revisit that list not necessarily to sale, but look at leasing those facilities in

[56:13] order to bring in more revenue.

[56:15] So I would like to see that list and see what is actually available.

[56:19] I know there's some properties that we just have just because of easements or whatever,

[56:23] But things that are actually that could be attractive to businesses to lease is what I'm interested in and if there are any

[56:29] Properties that we're under utilizing maybe we can start looking at

[56:32] Okay, it's only a couple people or departments in that location and are there only using this for storage?

[56:39] Can we start using that for for revenue?

[56:43] Councilmember Andrews. Yeah, I may we are scheduled to bring to you the listing of city properties on May 27th

[56:50] Director Emery is ready to make that presentation.

[56:54] In the context of the financial policies of what do we do with the process of the sale proceeds of public lands?

[57:04] So we have policies around that and we'll go over all of that.

[57:07] Yes, yes, I do understand the selling of land has affordable housing component that needs to take priority but is it the same for leasing?

[57:17] No, I'm speaking to the sales proceeds from the public lands so we're required to place

[57:23] the city policy that speaks that was required to invest first and foremost on OPEB and

[57:29] our retirement.

[57:30] Okay.

[57:31] But it's important to understand the portfolio properties and the opportunities so Director

[57:36] Ameri has confirmed with me that he will be ready to present on May 27th.

[57:41] Okay, great.

[57:41] But so even with that that will help the budget, right?

[57:45] Okay.

[57:45] Great.

[57:46] Okay, great.

[57:47] Okay.

[57:48] And then the last thing I do want to talk about is investing in our infrastructure.

[57:53] I don't want us to lose sight of that because it will be more extensive later.

[57:57] So I hope we're not sacrificing too much on that front because it will get more expensive later.

[58:04] I hope we can still invest in things like making sure our sewers and water lines are being replaced.

[58:12] emergencies, every dollar of preventive maintenance, it saves $6 or something like that in terms

[58:18] of emergencies, so we should just keep track of that. Also, I hope we're not sacrificing

[58:24] any huge budget cuts to cybersecurity, anything related to that, that also is very costly,

[58:32] so we just want to make sure that that is still a priority. And then if we can start looking

[58:37] at creative ways to reduce maintenance so if that is looking at our utility boxes, putting

[58:46] a mural on it in order for us to not send out staff over and over again to do graffiti.

[58:53] I'm looking for those opportunities as well and if there's any other infrastructure like

[58:56] that, looking for those opportunities as well so that's it for now.

[59:01] I'm sure there's more that might come up later but I just wanted to make sure the main

[59:05] many things I'm concerned about is economic development looking at our properties in continuing

[59:11] the best in our infrastructure.

[59:12] Thanks.

[59:14] Thank you.

[59:15] Councilor Mayor Pro Tem wrote.

[59:17] Thank you and thank you, Councilman, for all of your questions because you definitely sort

[59:23] of raised some.

[59:24] But I guess my bigger question is so 12.6 million is the worst case scenario right now.

[59:28] Is there some hope that you have from us today, like are you, is there some question you're

[59:32] You're trying to ask us where it comes to core services that you're hoping that we get to some cuts before the June 3rd adoption.

[59:38] Because it seems like, this is the presentation, this is what we don't want to be doing, we'd rather pull less from the reserve.

[59:47] But is there something around core, I guess that's what I'm asking, how do we decide what's core services before we get to pass in this budget,

[59:53] where we can, again, is there something you're asking of us?

[59:59] I would defer it

[1:00:00] to city manager Alvarez to answer that piece. But also, any action or anything that we can do before June 3rd, I think, obviously, would be welcome. Tonight, we're looking for themes. And obviously, if themes come up on the same things happen, then, obviously, those are the things that we're going to explore moving forward, but I'll defer to city manager Alvarez. The only thing that I would add to that is that we're anticipating to do the program evaluation approach to understand and redefine course services.

[1:00:27] And that's a very large body of work, and we were anticipating to take next fiscal year

[1:00:33] to complete that work, understanding the urgency to be able to stop, continue to dip into

[1:00:38] the reserves.

[1:00:40] But it's a very large body of work.

[1:00:42] There are additional pieces that we can discuss in anticipation of June, and that will be bringing

[1:00:48] forward to the City Council.

[1:00:50] But again, the majority of the opportunities, right, reside on a programmatic approach, and

[1:00:57] And we need the time to do the work.

[1:01:00] So, but is there, I mean, since, is it June 3rd that we're supposed to get to the adoption

[1:01:03] of the budget?

[1:01:04] So I guess the work, I mean, I guess the work has happened now between now and June 3rd,

[1:01:07] for there potentially to be any changes.

[1:01:09] Is that right?

[1:01:10] Well, we're going to be doing some work, but we won't finish the programmatic approach.

[1:01:13] We won't be doing the redefining of the core services.

[1:01:17] The $12.6 million budget deficit that you see here has already been significantly reduced

[1:01:24] by other actions that we've taken already.

[1:01:25] So what we could have done already, it's been done, there's maybe one or two more pieces

[1:01:31] to consider, but no more than that.

[1:01:34] And then we really need to start looking program by program service by service and that

[1:01:40] decides for the departments.

[1:01:43] Okay.

[1:01:44] Yeah, because I guess that's because you're right.

[1:01:45] I mean, I really appreciate all the work that you and your staff have done and I'm sorry,

[1:01:50] Edmund, I was going to say Edmund, Edmund, that you've done to get us here and I appreciate

[1:01:55] all the departments and what you've done to try to tighten up your departments before you brought it to us, but I think you're right, it sounds like the work is now on on looking at all the programs and what really is a priority and what isn't and since that's the biggest part of the work, I guess we just pass this but I mean if it can't be done, we pass this budget and then hope to get to the fall and do it so yeah, because I think there probably are some questions we would have been able to answer about like the hard program came to us and I think we all sort of agreed and understood why that wasn't being funded efficiently and

[1:02:24] And so we did agree to pause that one for now.

[1:02:28] And maybe there are some other programs that could help us get to something less than 12.6.

[1:02:34] And identifying core services, of course, is a lot of the work and I understand it.

[1:02:39] And especially like obviously from the community satisfaction survey,

[1:02:43] presentation, a large part of it is public safety.

[1:02:46] And since PD and fire get the light and share the budget anyway it sounds like that's not an area where we're going to be cutting.

[1:02:52] So it looks like it's other programs that, you know, Council has made a priority over the years.

[1:02:59] And so I am really interested in that work, you know, and I think it would be good if some of it could happen before Jim, but if it's not then definitely before this fall, the fall look, you know, look back or, you know, to see how we can tighten further.

[1:03:11] Okay, so I guess that's why I was wondering, like, what is the ask here, right, because I don't think we're all going to voluntarily say, yeah, kind of homeless services, kind of housing services, like we're not going to do that unless.

[1:03:20] We understand and I'd like to understand, for example, you know, in housing and homeless, if we're spreading a lot of money out to different organizations in the city, what is that impact and what's the effect of that?

[1:03:32] Is there some way to sort of make that a more direct investment in one or two nonprofits or something like that?

[1:03:38] And I think that's an area where we could really look at how we're spending our money efficiently and perhaps agree as a council to direct money in a different way that might create some savings for us.

[1:03:49] So, obviously, that's a larger discussion, sorry, did you want to say something?

[1:03:53] You know, thank you, Councilmember Roth.

[1:03:55] And just to add more to what you're saying in terms of the body of work in public safety,

[1:04:00] to your point, the heart program was one of the programs that we brought to you earlier as

[1:04:03] part of the strategic roadmap to show you the detailed assessment that was done to understand

[1:04:09] the pilot in its different versions and the staff recommendation to modify the way we were

[1:04:15] doing the work that would generate some savings and also address the effectiveness of what

[1:04:20] was intended.

[1:04:21] So that's one program and a laundry of programs that we need to look at.

[1:04:26] But in terms of public safety, where they do have the lion's share of the allocation is

[1:04:31] also true that the police department just finished completing its organizational assessment.

[1:04:37] And our chief Brian Matthews is with his command staff looking at other possibilities on their

[1:04:44] operational shifts and other areas to how to create those efficiencies with a goal to minimize

[1:04:49] or to realize some savings. Also in the fire department, the other large piece in the room here,

[1:04:57] We are about to come to you.

[1:05:00] Council with a contract to conduct an organizational assessment that will look at their operations with

[1:05:08] the goal to have something completed by the end of this year and start implementing as early

[1:05:13] as January. Again, to understand the minimum staffing, to understand how we manage fire

[1:05:19] in its entirety, but again, it's a very large body of work and we already began in those

[1:05:24] to pieces. Now it's a matter of, next for me is the library because that's a very important

[1:05:32] body of work. And then I'm looking at each of the respective department directors who

[1:05:37] will be engaging in their own pieces as well. Okay. Okay. Thank you. Yeah. So I understand

[1:05:43] that work will continue. Okay. So then the other question I had is around the sort of liquid

[1:05:48] versus non-liquid reserves. So, you know, given that slide that you did, so if we, you know,

[1:05:53] So in previous iterations we counted the 10 million as part of the reserve.

[1:05:58] So and then there was the question about liquid versus non-liquid availability.

[1:06:02] And my understanding there was sort of like an audit that allowed that practice to happen

[1:06:05] and that was sort of past practices that we had some liquid, some non-liquid in there.

[1:06:10] So right now are you saying that if we did it in the previous version it would actually be

[1:06:14] like 41.6 million reserve we'd be looking at, is that what that slide meant?

[1:06:19] Yes. So you have $41.6 million in reserves. However, what's spendable to use the audit in term, spendable versus non-spendable?

[1:06:28] What is spendable today is $31.6. You cannot spend that 10 million because it's obligated.

[1:06:33] Okay. Right. And so then we're saying the deficit then would take $12.6 million out of the $31.6.

[1:06:39] Correct.

[1:06:40] But in previous iterations of how we did budgeting, it would be $12.6 million out of $41.6.

[1:06:45] Correct.

[1:06:45] I mean, I guess what I'm getting at is it does look bad, and I'm for trying to get to a liquid

[1:06:53] and actual spendable reserve, but given, you know, the disparity between what that percentage

[1:06:58] would have looked like in the past and what it looks like now, is it, um, I don't know what I'm asking

[1:07:03] except that I want to make sure, and I want to do that work to move forward, but given the way

[1:07:07] we were sort of doing it for and moving forward, the disparity in that percentage,

[1:07:10] it looks much more drastic than it would have a few months ago when we were accepting

[1:07:14] the $10 million as spent as the reserve.

[1:07:18] If you counted the non-spendable obviously that percentage would go higher and it would

[1:07:21] probably be about 18% in my understanding but because that is obligated it's non-spendable

[1:07:27] it is now 14%.

[1:07:30] No, no, no, I understand that I'm just saying as far as comparing percentages between now

[1:07:35] and then I just want to make sure we're allowing for that because it really was it's more of

[1:07:38] it was more of a sort of budget, you know, and again allowable by audit so I want to make

[1:07:44] make sure we're sort of not saying, like, oh my God, how did we get to this place?

[1:07:47] When actually we were accepting that as a practice in the past.

[1:07:49] Even though I understand going forward, we're trying to change that practice, is that right?

[1:07:53] Correct.

[1:07:54] So, what I want council, as you're driving home tonight, what do you have to spend tonight?

[1:07:58] Which you do as a council?

[1:07:59] 31.6.

[1:08:00] Yeah.

[1:08:01] No, I understand that.

[1:08:02] I'm just, you know, because we've had a lot of discussion around this, and we're going

[1:08:05] to change this going forward, and I think we're making a priority to change it.

[1:08:08] I just want to make sure we're not getting too off on given what we accepted in the past.

[1:08:12] And you know, and it was just the way we did it then and my understanding that was an allowable by an outside accounting auditing as well. Yeah. Okay. Thank you.

[1:08:23] Okay. So I just wanted I just wanted to clear that out because I want to make sure we're being real about that.

[1:08:29] Okay. And then on the ARPA funds. So I know that those are one time funds.

[1:08:36] And but my understanding that our

[1:08:37] Profunds for one time funds used for one time projects and that that's over with.

[1:08:41] So it wasn't necessarily, so it cracked me for a long.

[1:08:44] If there was $4 million, we didn't throw that in the general fund and

[1:08:48] use that to budget anything.

[1:08:49] We use it for one time firm.

[1:08:50] So shouldn't that be like a zero impact on the budget?

[1:08:54] We used our Profunds last year.

[1:08:56] We actually put it into our reserves.

[1:08:58] So yes, we did not use it on operating expenses.

[1:09:00] Sorry, the year that we're in now.

[1:09:01] Okay.

[1:09:02] Okay, and for a million dollars worth, we put that in the reserve last year.

[1:09:06] Okay, and we've been using that, I guess, as yeah, okay.

[1:09:09] Okay, I just want, because my understanding is we didn't use it as sort of ongoing funds to balance our budget last year.

[1:09:16] Yeah, there were several uses for upper funds, and you are correct,

[1:09:20] pro-tem, pro-tem, roach that generally those funds were used for one time projects.

[1:09:25] But one other acceptable use for upper funds was the replacement of lost revenue.

[1:09:29] And so we did put $4.5 million into the general fund reserves for that particular purpose.

[1:09:36] Okay, but we wouldn't have projected, you know, that five year look back we did at one point.

[1:09:40] We wouldn't have projected another $4 million there, right?

[1:09:42] No, that would have been pulled out.

[1:09:45] Okay.

[1:09:46] And then the other question I had was around the UUT, and I know Dr. Mary's in here,

[1:09:53] that there's this question about how many data centers we're going to end up with in the city.

[1:09:57] and what impact will...

[1:10:00] You know, like two to four data centers have in the city to the UUT as

[1:10:07] far as looking at revenue. Director Amiri, if you're comfortable, Dr. Amiri has a kind of a measure to say for every data center could bring us in X amount of dollars. And he can mention that. Thank you. Just I know there's a lot of talk around it around the whole region. And so I'm assuming what that impact has.

[1:10:31] Thank you for the question. There are currently two data centers that are operating right now.

[1:10:37] right now. They are on corporate avenue in the industrial area. There is one data center

[1:10:45] that has been constructed and equipment is being placed in it and is going to start

[1:10:50] the operation soon and there is a fourth one that is in the planning stage right now.

[1:10:56] The one that is going to go into operation right now has a capacity based on the literature

[1:11:03] that they have seen, 49 megawatt.

[1:11:07] So based on assumptions, we don't have any solid information.

[1:11:11] But based on the assumptions that I have made,

[1:11:15] the amount of electricity that they have to purchase to run this data center is about $40 million a year.

[1:11:26] So the UIT on that will be just over $2 million a year for

[1:11:31] for this one data center.

[1:11:33] Okay, and did we include that?

[1:11:35] Is that projected in the budget?

[1:11:37] It is not projected in the budget.

[1:11:39] Okay, so that's potentially just for the one new center.

[1:11:41] And then there's the second one coming on.

[1:11:42] That's even bigger, right?

[1:11:44] Correct, but that is in the planning stage right now.

[1:11:48] And then is there on top of the U.T.

[1:11:50] Is there my understanding there's also maybe sales tax

[1:11:52] that comes off on the data centers as well?

[1:11:55] Is that right?

[1:11:55] I don't know about sales tax,

[1:11:57] but there is definitely property tax

[1:11:59] when they use a new data center constructed,

[1:12:03] and these are multi-million dollar,

[1:12:06] multi tens of million dollars in terms of valuation.

[1:12:11] Okay, and then do you think that by the fall

[1:12:14] will have a better idea of what that UT really looks like?

[1:12:17] I mean, because that's a significant increase, right,

[1:12:19] and revenue, if it brings in,

[1:12:22] if one data center brings in two million

[1:12:23] and then a potential other one,

[1:12:25] that's much bigger, right?

[1:12:26] Is the, I know you don't want to speculate,

[1:12:28] But the one that the planning went is that double the size of the one that's about to be built.

[1:12:33] So the one that is coming on online, I don't know exactly what the score footage is.

[1:12:40] But the one that's in planning, the score footage is 320,000 square feet.

[1:12:47] And just to give you an idea, the largest cost goal that you have been into is about 160,000 square feet.

[1:12:55] so this is twice as large, 94-foot high, so as high as a nine-story building, so it's huge.

[1:13:04] So it could be a significant revenue that we are not currently budgeting for.

[1:13:08] Correct.

[1:13:09] Okay, and already one, we're not budgeting for that we know is going to come online.

[1:13:13] That's right.

[1:13:14] Okay, thank you, that's helpful, as far as being slightly hopeful in this budget of worrisome news,

[1:13:21] that that is potentially hopeful revenue.

[1:13:24] Okay.

[1:13:25] Thank you, Dr. Mary.

[1:13:29] Okay.

[1:13:29] I want to see if there's anything.

[1:13:30] Let's see.

[1:13:31] Okay.

[1:13:31] I think that might be all I have right now.

[1:13:36] Let's see.

[1:13:37] Oh, on the bar, the bar car sales tax.

[1:13:40] I didn't know that.

[1:13:42] On our five-year projections that we looked at before,

[1:13:45] you got to, and believe me, I understand it.

[1:13:47] I'm Director Edmund.

[1:13:48] You know, you came on two months ago.

[1:13:49] So you're, questions from the past and I understand you're doing amazing work to get us to this budget, so thank you.

[1:13:56] But on the five year look back, did we project that this bar car sales tax was going to go away?

[1:14:06] Not to the extent that it was, I understand there's always some factor in there.

[1:14:10] However, a million dollars gets buried very fast within $80 million of projections moving forward.

[1:14:15] That $1 million turned into $2 million and literally the phone call came from,

[1:14:19] We had another meeting with our consultants, I think like two days before we were publishing the budget that was actually $4 million.

[1:14:25] So it's been in the works that the analysis comes from outside analysis.

[1:14:29] And so no, there was not a projection that was up to $4 million in that loss of the barcode.

[1:14:34] And that loss, so we were still projection sales tax with that $4 million as expected, okay.

[1:14:40] So just looking at budgeting, is that sort of an oversight, did we know it was going to end one day or we just didn't know when, so we kept projecting it?

[1:14:48] I couldn't answer that.

[1:14:50] That's great.

[1:14:50] Thank you.

[1:14:52] Okay.

[1:14:52] I think that's it.

[1:14:53] Oh, okay.

[1:14:54] I think this is my last question.

[1:14:55] Then I'll get to their questions on the overtime issue.

[1:14:59] So we talked.

[1:15:00] But the fire is a overtime issue, but that was just part of an overall $15 million overtime, you know, budget that we have in the city. Our other departments doing the same work that fire did to try to find a way to reduce that overtime.

[1:15:16] Is that maybe a city manager question? No, they did not. We have not done that work yet. Okay, and will that be part of the work to try to get us to the fall. So overtime is something that can be managed in many different ways in that also includes the consideration of the services and how we schedule

[1:15:32] people around the services, so that's part of the evaluation process.

[1:15:36] And is any, could any of that work done before the June 3rd budget?

[1:15:39] I mean, because it seems like even if we got to, I mean, $15 million a lot if we were able to reduce that by 2 million effect.

[1:15:44] I mean, to me, that seems like a right-of-way kind of work, because I hear you that the core services discussion is going to take longer because we have to understand the impact of that.

[1:15:52] But something like looking at, you know, the overtime hours seems like that could be done a little bit more quickly in some departments, not all departments, and maybe we could find $2 million before we get to June 3rd.

[1:16:01] Okay, and then maybe if it's true that this one data center is coming online this year and we know it is and we can protect even a million dollars

[1:16:08] That would help cut down that 12.6 as well.

[1:16:10] That's what I was before he left Alex left. I just wanted to understand the timing.

[1:16:14] Yeah, so timing really matters here.

[1:16:16] Yeah, right, as far as when the UT starts coming in.

[1:16:19] Okay, all right, thank you, that's all I have now.

[1:16:21] Thank you so much, director. I'm in your staff and everyone that's worked on this. I appreciate it.

[1:16:25] Thank you.

[1:16:26] Thank you.

[1:16:27] Councilor Zermenio.

[1:16:29] Mayor, thank you and thank you, Mr. Edmund and the finance team out there in the audience.

[1:16:38] You did a very good job with this and I do have a couple of questions in some comments.

[1:16:43] Let's see.

[1:16:47] On the slide on the overtime, I'm not sure I did understand the firefighters.

[1:16:54] There's a decrease from 7 to 3.5, but then the next one talked about the other overtime being 15 million to 1.5.

[1:17:05] So is that included within the firefighter?

[1:17:09] I got lost in the math.

[1:17:11] We went from 7 to 3 and then the second line went from 15 million to 11.5.

[1:17:19] Can you clarify that for him, please?

[1:17:20] Yes, thank you councilmember the overall overtime for the city of Hayward the running it's about $15 million that's for that's for all or the entire organization if we reduce the $3.5 million from fire that's your $11.5 million and so that that's the total then you look at the fire department, which is a $7 million going to 3.5

[1:17:41] All right, so the 11.5 should not be lower, it's at 11.5, okay, all right.

[1:17:47] And then one of your earlier slides spoke of reserves being used for specific purpose.

[1:17:55] In my mind, reserves are for emergency, so I'm not sure why we include specific purposes

[1:18:03] as expenditures for the reserves.

[1:18:07] I'd like to see it for emergencies.

[1:18:09] Any comment?

[1:18:09] Or is just just new way to so council members the menu your reserves are at council discretion

[1:18:15] And you get to define what an emergency is

[1:18:17] And so you can define an emergency as an earthquake. You could define an emergency as building a bridge tomorrow or feet on the homeless

[1:18:23] What and that's up that's at your discretion. That's a policy change you can make as well

[1:18:27] But especially at your discretion that council discretion. All right. Okay. Thank you

[1:18:30] So I'm thinking like my colleague Roshear and a couple of other points

[1:18:36] So, we have reserves at $41.31.

[1:18:42] We have a cinema for which we paid $10 million, and we

[1:18:47] lent $2 million to the garage. So, in my mind, we have a reserve of $43 million.

[1:18:55] In my mind, spendable or unspendable really make no difference. We still have a reserve of

[1:19:01] $43 million, whether it's spendable or not spendable, it's still a reserve.

[1:19:06] So how wrong am I on this?

[1:19:09] So council members and men, let's use an example of a bridge collapse.

[1:19:16] At two o'clock in the morning, no one's on it, everybody's fine.

[1:19:19] A bridge collapses and the bridge costs $50 million through place.

[1:19:23] You don't have $50 million through place that bridge in one swoop.

[1:19:26] If the bridge was $31.6 million, the council could decide to spend the $31.6 million, that money is in the bank, could write a check and buy the bridge tomorrow.

[1:19:37] If the bridge was $41.6 million, you don't have that, it's not spendable, that $10 million is already obligated.

[1:19:43] So if you have a $40 million bridge, you wouldn't be able to write a check for it tomorrow.

[1:19:47] You have $31.6. So at your discretion tonight tomorrow for the lack of the better terms, you have $31.6 million.

[1:19:56] So perhaps we may need to

[1:20:00] Do two reserve lines, one, spendable reserves and unspendable reserves, because in my mind, we have $12 million in reserves, aside from the $31 million. So, maybe that's something to consider. All right. And then the other one that I wanted to discuss, because I agree with the questions by my colleague, Roche. We should not be including Bart and Arpa at all in this equation,

[1:20:29] because they don't exist anymore.

[1:20:33] It'd be like saying, well, we're not going to get $3 million

[1:20:36] from Newsom for fighting homelessness.

[1:20:42] So it's not there, why even include it?

[1:20:45] So that's one point that I wanted to bring out,

[1:20:49] and I agree with my colleague who asked a question.

[1:20:51] And then I do have some comments.

[1:20:54] A full rewrite is excellent.

[1:20:56] very good. Thank you very much. A couple of points. We mitigation of strategies and outlines

[1:21:05] encourage staff council. No, it's encourage staff council and community feedback on the budget.

[1:21:15] I think that's tremendous. Make sure that we do that and we follow through. Measure thoughtful

[1:21:22] approach very good so let's make sure that we do that 100% and of course we know

[1:21:30] that our residents are worried about housing and about homelessness and

[1:21:37] crime and streets and trash and in my mind those are excellent and we have

[1:21:43] been working on those and we will keep working on those all right so over time

[1:21:51] So, vacancy savings, 5% equals about $8 million is what I heard.

[1:21:58] That's $9.8 million, council member.

[1:22:01] Okay, all right.

[1:22:03] And vacancy management, for many, we're from half a million to a million.

[1:22:11] Is that part of the vacancy savings or is that a different formula?

[1:22:21] It depends on how you look at it, it'd be above and beyond that 5%, so if you're actively, if you're proactively holding positions now you're going to realize even more savings than just the 5%.

[1:22:33] So the more you hold positions, financially speaking, the more you're going to save.

[1:22:37] Okay. All right. Okay. Let's see. Cinema. City Manager, how about this? Do we receive

[1:22:48] any income from the cinema that we own? Yes, we do. Councilmember Sir Manu, and I'm glad

[1:22:55] to report that we have all of the spaces occupied, so we're currently fully occupied.

[1:23:01] Okay, is that income taken to pay the loan that we took out or is that income part of the general fund income?

[1:23:13] It's meant to pay for the loan and we're going to be calling the meeting of the Hayward Economic Development Committee

[1:23:21] to be able to go over the finances, very soon.

[1:23:26] All right, okay, I thank you for a good report and I thank you for the good works

[1:23:31] especially in my basketball buddy over there Nick and Mayor, thanks a lot.

[1:23:36] Thank you. Council member, sorry.

[1:23:40] Thank you, Mayor. Thank you very much to you and your team for this report.

[1:23:43] I know a lot of work goes into preparing a document of the size and wrangling on the numbers within it.

[1:23:47] So I'm just nice to see it all in front of us.

[1:23:50] I know there were a lot of open questions during the past year on what this deficit number might look like.

[1:23:55] So we could address it head on.

[1:23:57] I just want to start by echoing some of the comments that were shared by Council Member

[1:24:02] Bonilla, I think, between this budget and the June budget.

[1:24:06] I'd like to see a little bit of a change in reflecting some of our cost saving strategies.

[1:24:10] I know we're saying that we're pulling all the levers.

[1:24:13] I think just as an example and question I'd have is a city attorney if you're available

[1:24:17] to say a few words, Michael.

[1:24:19] Can you speak to our ability to potentially lower our coverage or change our insurance

[1:24:24] coverage to realize some savings as a potential strategy?

[1:24:40] Thank you.

[1:24:42] As a cost saving strategy, for example, are there any options or opportunities for us to

[1:24:48] change our coverage to realize some savings from our general fund?

[1:24:55] Press, there you go.

[1:24:58] You know I've suggested.

[1:24:59] Yes, it.

[1:25:00] We do the council and to the finance director that we have had discussions about making some adjustments in our coverage that I know will result in at least $1 million less in our fiscal 26 premium. It could be a little bit more. There's a little bit more work to do on that. But as you know, coverage is very

[1:25:29] expensive. It's increased about 600% in the last 10 years, but that's the market. It's driven by general liability police practices exposure and not specifically related to Hayward property coverage also a driver and cyber risk.

[1:25:51] those are the three big drivers in coverage and we've tried to make adjustments by increasing

[1:26:00] our deductibles over the last few years but that's like saying we're paying the same for less

[1:26:11] or we're paying more for less. It's sort of one of the other. It's a very challenging market.

[1:26:18] Is that responsive?

[1:26:19] That is responsive and so given that there might be an option for us to adjust our coverage

[1:26:24] to realize a million dollars in savings, would it be possible for those savings to be

[1:26:28] realized and reflected in the next budget update by June or is that something that would

[1:26:32] have to appear by the revise and fall and just trying to see how we can make some progress

[1:26:36] between now and our next.

[1:26:37] We're striving for a July 1st effective date.

[1:26:40] Okay.

[1:26:41] And given that the budget would go into effect by July, could that be reflected in our June

[1:26:45] third meeting that we've somehow been able to incorporate that change?

[1:26:50] I don't know who to answer this, I don't know how fast it takes for us to change our policy or if that could be reflected in the next budget presentation.

[1:26:56] I don't know, the work needs to be done, but I do want to remind council just a little bit of a reality check.

[1:27:00] It's May 13th, the budget is June 3rd, you back up and it has to be posted by the Friday, it's been a week before internally, so it's due next week.

[1:27:09] Okay, so we're talking about any changes or discussions that you might be having are asking for the June 3rd portion.

[1:27:15] would literally be in the next three business days, or more business days.

[1:27:18] This is a little bit of a reality check, doesn't mean that something's going to be done.

[1:27:22] And remember, the June 3rd is only as good as what it's printed on.

[1:27:25] You could certainly make amendments, you can make revisers to it.

[1:27:28] To City Manager Alvarez's point, the budget is always going to be looked at.

[1:27:32] We're not going to wait until the fall, right?

[1:27:33] And so we can provide memos or updates to the council on what's happening.

[1:27:37] But I just don't want you to get hung up necessarily on the June 3rd because of the way we have to agendize it and

[1:27:42] post it and review it.

[1:27:43] Okay, understood. Well, thank you, City Attorney Lawson. I just wanted to show that we could realize some savings there as well, and anything we can do to reduce this $12.6 million, whether or not it's reflected in June 3rd, or as long as it's going to affect by July 1st, I really want to bring down this $12.6 million number that I'm hearing.

[1:28:00] Something else I wanted to ask was CDBG funding. I know we were waiting for a while to receive that. Have we since received it since applying?

[1:28:10] So we're up to date on reimbursements for this year, but we have not received from the federal government what our allocation will be for the next fiscal year.

[1:28:18] And so our CDBG consultant was targeting May 16th as a date where we would possibly know the answer to that question.

[1:28:27] They are expecting it to be a no-growth year.

[1:28:31] What kind of year?

[1:28:32] A no-growth year.

[1:28:33] So pretty much the expectation if funds are released you'll be about the same amount as was released for this current fiscal year and have they been delayed or is this the regular timeline and it's generally delayed but this is delayed more than their typical okay okay understood okay thank you please keep us posted on the status of those funds in line with wanting to reduce this deficit when we do have the fall revise I would appreciate if we had a strategy that came with it.

[1:29:03] We're throwing out a lot of different suggestions tonight on ways in which we could reduce this number.

[1:29:07] Something I'd like for us to look at that was on a prior strategic road map.

[1:29:10] And I don't know if it was kind of delivered to the council or

[1:29:13] prioritized by the end of its time on the road map was revisiting old ordinances as revenue generating opportunities.

[1:29:19] This is kind of in line with what council member Andrews was talking about.

[1:29:22] I know we have a maybe outdated cabaret ordinance that makes it illegal to dance where drinks are being served.

[1:29:28] I don't know if that's still an effect.

[1:29:30] I know we have a 50% revenue has to come from food sales if you're selling alcohol which scares away a lot of businesses in my prevent increased economic development in our downtown.

[1:29:41] I think we're the only city in the area that has that regulation in place.

[1:29:45] So I just want to know where are we getting in our own ways or in our own way.

[1:29:49] It also would like to know what have we not looked at or dust off in a long time.

[1:29:53] So, if I'm not mistaken, we might have a business license tax that's currently in place that comes from

[1:30:00] In 1975, and I mean, this is like, I don't know, date myself about 20 years before I was born. And if we haven't updated it since then, maybe it's time for us to look around and say, could we be charging a little bit more to help sustain our operations and not run ourselves into a deficit. So really putting kind of all these policies on the table, doing some deep diving into what options might be worth pursuing, especially now that K1 is in the rear view, and we have some more bandwidth as a city to pursue new measures. I think that would be helpful to have on the table and fall when we do this revise.

[1:30:29] So, it's not just we have this deficit, but here are a menu of options that we can take proactively to begin exploring new revenue generation opportunities.

[1:30:40] I think the last thing I wanted to add is I really appreciated looking at the different metrics and objectives of each department inside of the budget.

[1:30:48] I think this is the part of the presentation that I miss. Everyone feels so far away today. Usually we do this in the 2A room.

[1:30:54] But my hope would be at some point, I don't mind us doing this in this room, but it would be nice not necessarily to do the same templated five slides as last time, but maybe for departments to talk through their metrics and their objectives and why they're important to the department so we can make sure there's alignment between our strategic priorities and what your department sees as performance objectives and find that synergy for lack of a better term.

[1:31:18] And then I just want to be really careful about not cutting community services too deeply, or at all, as we look at saving or reducing this deficit.

[1:31:27] Money that we spend on community services is preventative, and it's an investment, and I think it saves us a lot of money downstream, so I just want us to be really strategic, and as we know we all are being, as we try to approach this and wrangle restoring our reserve.

[1:31:41] I think I'll leave my comments there.

[1:31:44] I gave a lot of commentary at the Budget and Finance Committee meeting, but

[1:31:47] really, again, appreciate the work that went into this.

[1:31:49] And look forward to seeing the June budget, as well as the strategies presented during the revise.

[1:31:55] Thank you.

[1:31:59] Council Member Goldstein.

[1:32:00] Yeah, thank you.

[1:32:02] Thank you for the report.

[1:32:04] I'm glad to see that our finance department continues this long tradition of producing excellent results in accuracy with our finance.

[1:32:13] There's always going to be wrinkles, it happens.

[1:32:16] And I just appreciate the hard work and effort that goes into producing these reports.

[1:32:24] You know, business development and events really is a hot topic because those two things are drivers of sales tax revenue and property tax.

[1:32:35] And I think we need to be mindful of that.

[1:32:40] And I remember having a conversation with Paul Nguyen, I forgot what his title is Chief Heatsenambig development.

[1:32:50] Chief economic development officer.

[1:32:52] Okay, thank you, appreciate that.

[1:32:54] And Paul said that he produced a report listing out the variety of things that he feels that if we slip streamed those things it would really empower him and his unit to bring more business to the city.

[1:33:10] city. I have not seen that report and so I'm wondering if you have that report can you

[1:33:18] share it with city council? Certainly. I have not seen the report

[1:33:23] this the first time I'm here and I'll be very interested to see in it and share it

[1:33:27] with you. Okay good because you know he's got some really

[1:33:30] good ideas. He highlighted a couple of them to me and I just not brilliant. You know yes

[1:33:35] it sounds like we should be able to do it, and that conversation was when Sprout's opened

[1:33:45] and so that's been a few months and so I think it's time that we dig into that and bring that

[1:33:52] to the surface and see what we can do. Those economic development opportunities are right in our

[1:33:57] neighborhood. We have the place for it, we have the demand for it, our residents want it, so it's

[1:34:04] really, if we're getting in our own way, shame on us.

[1:34:08] No, absolutely.

[1:34:09] And thank you for bringing that forward

[1:34:10] because our economic development team in Hayward,

[1:34:13] it's amazing.

[1:34:14] It's an award-winning team.

[1:34:16] And there's a lot that that team really does.

[1:34:20] And I'm sorry that he's not here today.

[1:34:22] He was coming back from getting some awards.

[1:34:25] But certainly, Paul would be here at the next meeting

[1:34:28] when we consider the budget.

[1:34:29] And I'll be having conversations with him before June.

[1:34:33] OK, great.

[1:34:33] All right, so I'll look forward to seeing that.

[1:34:37] I think we need to invest in technology.

[1:34:40] I realize that technology is one of those topic areas where people tend to think,

[1:34:46] oh, we could save money by just not spending money on technology.

[1:34:50] But that's a kind of a, it's a, it's a chicken and an egg thing, right?

[1:34:54] If you don't make the investment, you don't benefit from what those investments bring you.

[1:34:59] You

[1:35:00] And those benefits are usually less stress for the people that are doing the work because they're usually better tools that help enable us to deliver a better service to the community and to the city. But principally in the area of cybersecurity, we can't take our foot off the gas. I'm telling you, I've 25 year career in cybersecurity, I can tell you the bad guys do not take their foot off the gas. They're looking for those organizations that do take their foot off the gas.

[1:35:29] put off the gas and they find the weak link in the chain in the packet and we can't afford to do that.

[1:35:37] And so cyber security needs to remain a top priority.

[1:35:41] But it really does also increase our ability to deliver quality services to our residents.

[1:35:49] And as the mayor has said, our city, our residents deserve the best.

[1:35:54] And so if there's, we should not just take that and just discard that because we think we're going to save money.

[1:36:03] In my opinion, it's a fool's errand.

[1:36:05] Similarly, an infrastructure for the reasons that my colleagues have expressed, we have to continue to do infrastructure improvements.

[1:36:14] In part because people like to shop, they like to spend money where they feel comfortable.

[1:36:20] and feeling comfortable isn't just about the immediate space where they walk into the restaurant,

[1:36:25] but it's the whole experience of getting there. It's traveling on the roads,

[1:36:30] it's the lighting, it's the trees, it's, you know, everything worked, you know.

[1:36:36] When you think about it, when you go to the shopping areas where you like to shop,

[1:36:41] just think about what that's like. Doesn't Hayward deserve shopping like that?

[1:36:45] Now, I'm not a big shopper, but I'm advocating for you who are.

[1:36:51] Housing and homelessness, one of the areas where we can do a better job without spending more money is just better coordination.

[1:37:00] And so I've had conversations with Aaron Horner and some of the other partners in the area.

[1:37:06] And one of the things that was very revealing was that for people that meet certain criteria,

[1:37:12] they get into a HUD program for coordination of benefits.

[1:37:17] But for the people who don't qualify for that program, they don't.

[1:37:21] And it makes it really hard for those people to climb out of that steep ramp.

[1:37:26] And so just having better coordination of benefits for them is going to produce some results without costing us more money.

[1:37:34] In fact, if we measure effectiveness of the programs that we are investing in,

[1:37:39] And so we spent about $2 million, I think, into, I think the numbers 42 community partners.

[1:37:47] If we just simply task ourselves with measuring that effectiveness, maybe we can start to allocate

[1:37:53] the funds where the effectiveness is really happening.

[1:37:57] And so rather than continuing to invest in programs that exist, let's invest in those programs

[1:38:03] that work, that actually achieve results.

[1:38:05] And that may sound a bit harsh, but frankly, we need to do it anyway.

[1:38:10] It's the right thing to do because if we're just spending money that keep people stuck,

[1:38:15] rather than getting them out of stuckness, we're not doing anybody any favors.

[1:38:20] So I'm big on measuring the effectiveness.

[1:38:22] And I really would like to see us return funding to heart when we find the funding for that.

[1:38:28] Getting better control of overtime, fire, thank you for taking that on as a project.

[1:38:35] I know that that's a big thing, and Chief Matthews also looking at operational shifts.

[1:38:41] I think can not only save us some money, but really put people where they need to be.

[1:38:46] Right, our community wants better visibility.

[1:38:50] And if we can achieve better visibility and achieve better results with less money going out the door, all the better.

[1:38:57] And I hope that our partners at the HPOA agree with that strategy.

[1:39:03] and take that on as a challenge, as a way to improve our service to the community.

[1:39:11] Data Center, UUT, it wasn't even thinking along those lines, so thank you for bringing that up.

[1:39:18] I would like to caution, though, that bringing those data centers online,

[1:39:23] I find it hard to believe that it's going to be 49 megawatts from day one when they open that data center.

[1:39:29] I imagine it may take them a few years.

[1:39:32] So just be cautious of that and hopefully director Amiri, when we meet again, you might be able to kind of give us a time frame of what their expectations are, but I have to imagine a three story 90-foot tall, 300-thousand square foot facility is probably not going to get filled on day one.

[1:39:50] that might take them a few years.

[1:39:52] In fact, I've personally managed data centers

[1:39:56] and I've been in and out of data centers

[1:39:58] from post to my career.

[1:40:00] And there are some that have been around for years that aren't full. So just be mindful of that, so it looks good. And we do have infrastructure costs associated with those facilities too, right? And those infrastructure costs come out of general fund or those come out of a different fund.

[1:40:26] Sorry, I was trying to save you the trouble of having to come back up but since you're up here, thank you very much.

[1:40:37] So Council Member Goldstein, these data centers do not have too many employees.

[1:40:45] The number is around 30 employees including security guards and so on.

[1:40:52] So there is not much impact in terms of traffic or use guns of things.

[1:40:59] They are going to use electricity.

[1:41:01] They are going to use water to some extent, but I don't see a whole lot of other impacts.

[1:41:10] One of the things I wanted to mention is that these places use a lot of electricity when

[1:41:17] they are full, as you say.

[1:41:19] If they get their electricity from RCEC that is located in Hayward, there is also the advantage

[1:41:28] usage of UUT on the natural gas that RCC is going to use to produce the electricity.

[1:41:36] But I don't know all the specifics, I know that conditions of approval call for data

[1:41:44] centers to use renewable energy, so we'll have to look into the intricacies of what happens

[1:41:51] when they use renewable energy, and then someone else will have to use energy that RCC produces.

[1:41:59] I see. Okay, all right, so I guess he'll be able to fill us in on some more details in the next meeting.

[1:42:06] We'll hope so, yes.

[1:42:07] Okay, all right, very good. Thank you for that. And then question for finance.

[1:42:16] I'm a little confused about on the slide where you're showing the pluses and minuses.

[1:42:22] So, we lost the ARPA, I think it was slide two.

[1:42:26] The specific question I have is you're showing that TOT is a minus of three and a half million.

[1:42:33] But I'm at a loss to understand how that is from last year, from the last budget cycle to the current budget cycle.

[1:42:40] No, thank you for bringing that up.

[1:42:42] The numbers in the parentheses, that's the total.

[1:42:44] So $3.5 million is the total TOT we bring in every year.

[1:42:48] So there's a number of $80 million for property tax.

[1:42:50] There's another number for sales tax.

[1:42:52] I also put the total revenue for TOT is $3.5 million.

[1:42:56] I see, okay, all right.

[1:42:57] So for some reason, when I was going through the numbers,

[1:43:00] can you bring that slide up?

[1:43:02] I just, I'm sorry to dig in on this.

[1:43:04] Do we, I'll be quick.

[1:43:07] Give me one second, I can pull it up.

[1:43:08] Okay, all right.

[1:43:48] Yeah, yeah, that's all, yeah.

[1:43:50] Okay.

[1:43:56] Can you see it now, Council Member?

[1:43:57] Yeah, I do.

[1:43:58] Okay.

[1:43:58] I think I was just confusing myself.

[1:44:01] So, taking into consideration, oh, that's why, because you put dollar amounts for the

[1:44:07] others, and then adding them together, I see you got to the 8.5 million less than the current

[1:44:13] year.

[1:44:18] So it's a plus 2.5 million in property tax, but it's a minus 4 million in sales tax and

[1:44:25] In a minus in the ARPA loss and a 2 million less in real property transfer,

[1:44:33] where, what amount is the transit, the TOT?

[1:44:37] So I mentioned that the TOT depends on what we decide moving forward.

[1:44:43] But as a placeholder right now it's actually the same dollar amount.

[1:44:46] So for last year it's $3.5 million, this year it's $3.5 million.

[1:44:50] The reason why it's the same number is last year there was a premature assumption

[1:44:55] that we would increase COT then never came to fruition and so I've kept it at

[1:45:00] That amount, which reflects an increase. Okay, thank you. The light bulb finally went on. Yeah. Everybody knows the brightest bulb in the room, but, you know, the bulb went on. Okay, thank you. That's all the questions. Thank you.

[1:45:15] Councilmember Andrews. I have a quick question. What are the uses that are going into the cinema place? Do we know what the what's going in there? Yeah, so we've got mostly one Pacific coffee copy moved across the street.

[1:45:32] We've got a coffee and tapas restaurant heading into the sweet that's adjacent to

[1:45:43] foothill.

[1:45:44] And there's also a new coffee shop coming in where one of the old coffee shops was.

[1:45:49] But it's more focused on it's like a boba tea style, I think they call it cream coffee

[1:45:54] or something.

[1:45:56] I should mention that every spot I'm going to look at for a cafe then.

[1:46:02] Thank you, it's working, I think it's working, all right, thank you.

[1:46:07] Got a coffee shop, come to Hayward, Mayor Proghtem Roach.

[1:46:12] Thanks, I just wanted to summarize the narrative about tonight.

[1:46:15] So bring this, the budget to us.

[1:46:18] The work has already been done with all the departments to try to bring it down to somewhere around the 2% level,

[1:46:23] understanding the nuances of some of the departments.

[1:46:25] And then there was no real ask as far as course services because we don't really have time to define that before we get to.

[1:46:31] June 3rd and you're saying we have three days to get any changes that are going to happen

[1:46:34] between now and June 3rd.

[1:46:38] And given that, it's sort of the worst case scenario, given all the work that could

[1:46:41] have been done to even get us here tonight.

[1:46:43] But is there some room in the discussions we had tonight to potentially, maybe there is

[1:46:47] a little bit more optimistic budgeting around UUT or around maybe some overtime because,

[1:46:52] you know, that is a commitment to sort of produce by one half percent with every department

[1:46:56] or something like that to further bring down that 12.6 million before we get to June 3rd.

[1:47:01] So this sounds like there's three things, maybe some insurance savings in the City Attorney's Office,

[1:47:05] maybe some UET projection that may be not be the 2 million but 500,000 or something like that.

[1:47:10] And is there, and just sort of asking that question, is there any point to doing that?

[1:47:14] Like is there some effect on our credit reading or anything like that that looks better if we get to

[1:47:20] a $9.6 million deficit instead of a $12.6 million deficit?

[1:47:30] Our financial statements are not part of the budget, but I think I'll defer to City Manager Alvarez for your first part of your question.

[1:47:37] The second piece of the reductions, we can certainly take a look at insurance, UT, and over time.

[1:47:43] However, it's not going to be $3 million, right?

[1:47:46] And so we can certainly take a look at that in the next couple of days, where we're going, I think that's the bigger discussion for it.

[1:47:55] That's beyond a fiscal question, I think.

[1:47:58] Thank you so much for the question.

[1:48:00] You know, I want to go back and just remind folks that the budget, what's going to happen

[1:48:07] here in Hayward is that we're budgeting very differently.

[1:48:11] So we require a structural fix to a structural deficit.

[1:48:15] Long gone are the days where we would revisit the budget twice a year and then just manage

[1:48:20] the expenditures.

[1:48:21] So we're going to be doing budget year round to be able to address and close back to your

[1:48:27] term the use of the reserves.

[1:48:30] It's very uncomfortable and it's very sovereign what's happening here.

[1:48:34] The good news that I wanted to share, well, it may not seem like a lot, but the fact that

[1:48:39] we have a strong clarity on our finances is a huge accomplishment given where we began

[1:48:47] in January.

[1:48:49] I will share with you that the number kept changing for me every day.

[1:48:54] When I got here we were already embarking, we were almost done with the mid-year budget

[1:48:59] process and I was still trying to understand and ask a lot of questions.

[1:49:03] So I'm very, and I say that because there's been a lot of work that has been done, it may

[1:49:09] not seem to you, but a huge amount of work that has been done by the finance department

[1:49:14] and all of the department heads here.

[1:49:15] And it's a commitment that we're going to continue doing throughout the entire year.

[1:49:22] Between now and June, while it may be easy to say, can we have a commitment of a reduction

[1:49:28] of the difference between public safety and the remaining of the departments for the overtime

[1:49:32] use?

[1:49:33] So it's about $8.5 million when you subtract public safety.

[1:49:37] And I just asked the finance staff and they're probably working on that report.

[1:49:41] I asked to give me an overtime report from the various departments that I can understand

[1:49:47] from the last two years and what happened in 2018 and 2019 because I should be the baseline

[1:49:52] to understand what's happening here.

[1:49:55] But that, to be fair to the Department of Directors, just to say a comment, we know we're

[1:50:00] We're not understanding the impacts or how the over time is being generated. Where are the opportunities? It's, again, we can certainly make those type of commitments, but it's, again, having a very large broad stroke. When right now, what we need is a little bit of patience and to really do the work correctly. I, and again, I've said before, it's very easy to take the quick exits and the quick routes.

[1:50:27] But those may not necessarily serve right the city of Hayward because what we're trying

[1:50:33] to do here is to really do a true balance approach that maintains the key services and

[1:50:41] the core services for the city.

[1:50:43] So it balances the community impact while also protecting our workforce and that's something

[1:50:48] that's also different in Hayward.

[1:50:50] We've made a commitment and I made a commitment that we're going to be looking at doing the

[1:50:57] hard work at the forefront and not necessarily doing sweep furloughs in releasing folks and layoffs.

[1:51:09] We don't want to do that. We want to actually do the work, do the program evaluation,

[1:51:14] understand where the opportunity is light, look at the overtime. So there's a little bit of

[1:51:20] work that needs to be done, but it won't be done between now and the next three days.

[1:51:23] Yeah, that's fair and I was just I mean that's why I was asking like are we really trying to do any work today

[1:51:28] We just accepting that because I understand everyone's done this hard work to get us here

[1:51:31] That are we really trying to offer any cuts at this point? It sounds like we're not

[1:51:37] So again by or not cuts or or even revenue projections. Yeah. Yes

[1:51:41] So what's coming before June 3rd is the TOT we're hoping to get that back to you in front of you

[1:51:47] That's a great opportunity

[1:51:49] We're also looking I'm gonna do my best to try to understand the over time

[1:51:56] I'm going to be looking at that very closely, and then I have a couple of other pieces that I need to discuss separately, but we may have an opportunity.

[1:52:05] But in reality, what you have here, the 12.6, it's really the best approach that we have for now.

[1:52:11] Okay, thanks, and I think that's what I was looking for. I'm not looking to create any false projections. Obviously, I wouldn't want that, and I wouldn't want anyone to sort of offer up over time when that was in a reality.

[1:52:21] So, thank you, that's all, thank you.

[1:52:25] Councillor Boone, thank you.

[1:52:27] My final two comments here is, I know we've talked a lot about the reserve and spendable

[1:52:33] versus non-spendable, but, you know, there's, sure, there's legal parameters or financial

[1:52:41] parameters that allow us to put non-spendable things in the reserve, but that's clearly not

[1:52:47] best practice, right?

[1:52:48] So I would really caution us on looking at things that are non-spendable as money in the bank that we can spend because as we just said the purpose of reserve is to offload in an emergency, we cannot go and sell that building tomorrow to go and pay for the theoretical bridge collapse that we just talked about so I just really want us to be grounded on best practices related to reserves is spendable reserves, not non-spendable reserves.

[1:53:15] And I think as we've went through this budget, we're starting to clean up some past practices that provide more transparency into the current budget of this city so that we're not sitting up here with false expectations of what we can and can't do if we were to need to go into a position to use these reserves.

[1:53:35] Secondly, is I really like the idea of getting input from all staff across the city and making this like some sort of fun and engaging way because I think the people that are on the ground, the ones that are doing the work on a daily basis, probably have the best perspectives on programs, probably have the best perspectives on where we can leverage technology or where we can create efficiencies or where things maybe need to stop because they're not adding the community benefit or impact that we'd initially thought about.

[1:54:04] So, anything that we can do to be creative and to engage all corners of our staff and of the city in really kind of making this in all hands on deck effort, this way we all feel like we're a part of the solution and we don't feel like something is happening to us, but we feel like we're a part of what's happening going forward, so just a perspective that I really want us to use as a lens as we continue to move forward with this important effort and thank you again for tonight's meeting.

[1:54:35] Thank you.

[1:54:36] Anyone else?

[1:54:38] Mr. Mayor, if I may just pick it up on customer urbanias, we are literally setting up an email for staff suggestions, but some sort of forum so that staff have a way to send their ideas.

[1:54:51] We did all staff meetings and we already have received some really good feedback, but we wanted to have some sort of mechanism where we could review it weekly or something with staff.

[1:54:58] but then to your point really setting up.

[1:55:00] Some sort of innovative award, innovation award to someone who really comes up with ideas. I've had past experiences where staff come up with ideas you've never even thought of, right, especially in maintenance services or public works, or in the police side, or fired, all the things that we don't necessarily see on a daily basis. It's not changing your printer paper. It's some really big ideas that could happen, so we're certainly taking a look at that as well. Yeah, and I like that idea of an email and things like that, but I was also even thinking about being intentional about creating like ideation sessions with staff, right?

[1:55:29] to really get those thoughts flowing.

[1:55:31] Because sure, they might have some that come top of mind.

[1:55:33] But I think when you get in that creative, ideating and co-creating space,

[1:55:38] you might be able to bring ideas together to come up with a bigger impact.

[1:55:42] And so anyways, just thinking of ways of engaging staff and

[1:55:45] very creative, you know, and engaging ways to make them feel like they're a part of what's happening

[1:55:49] and so that they can influence how it is we move forward.

[1:55:52] So thanks again.

[1:55:54] Thank you, I just have a few, a couple of comments, I don't want to repeat too much what has already been said.

[1:56:06] But I have heard a few comments up here regarding priorities and our course services.

[1:56:17] and I wanted to just appreciate the slide that Assistant City Manager Regina Youngblood contributed to us.

[1:56:27] I believe it's slide 13 of 16 and slide 14 of 16.

[1:56:35] And I want to remind all of us, just kind of put this into perspective, that our priorities,

[1:56:44] While we have defined priorities, and they're in the budget, and we can all see them.

[1:56:49] But I also want to remind us that our really priorities and our core services are the satisfaction survey, right?

[1:56:55] I mean, they're right here in front of us.

[1:56:57] Cost of housing homelessness, crime, pot holes, and street maintenance, and litter and graffiti.

[1:57:02] I mean, that's really what we're on the hook for, right?

[1:57:04] I mean, that's what people are looking for us to fix.

[1:57:10] Residential satisfaction survey.

[1:57:12] communities, municipal services priorities, fast emergency response, safe neighborhoods and safe well-maintained streets and sidewalks, healthy local businesses that stay in Hayward.

[1:57:25] A clean, well-maintained city with well-maintained street lighting, effective police protection and crime prevention.

[1:57:33] So, I just kind of, first of all, I wanted to think,

[1:57:37] assistance to manage your young blood for sort of putting these in there because it does give us focus.

[1:57:44] We can talk, you know, it's clear we all understand the situation where we get it.

[1:57:51] I mean, we understand that, but I don't want us to lose focus and

[1:57:58] start talking about other priorities and or be confused about priorities.

[1:58:02] because the priorities have been set forth for us in two places, at least what I pay attention to.

[1:58:11] The resident satisfaction survey and then of course, the paramount priority is C and K1.

[1:58:19] Those are the two most significant revenue generators in the city.

[1:58:24] We went to the voters to pass those.

[1:58:28] We stood on doorsteps and we made political promises and so I guess I just want to make sure and I want to ask our finance director

[1:58:45] regarding C and K1 and I kind of want to ease tensions. I know there was a call at the beginning of the meeting

[1:58:53] I mean, but I just want to ease the community.

[1:58:58] Regarding C and K1, we've sort of partitioned those, and those funds, and those dollars will continue to pay for the priorities and the promises that we have set forth with those two buckets of money.

[1:59:19] That is correct, Mayor.

[1:59:20] And as if you saw in the budget message by Dr.

[1:59:23] Alvarez, there's literally a heading on our commitment, honoring our promise to the community, which is the measure C and measure K-1 board.

[1:59:30] Absolutely, well, thank you.

[1:59:31] And I wanted to thank Dr. Alvarez for really isolating that in your budget message, because that's important.

[1:59:40] I mean, at the end of the day, that those are two very significant revenue streams.

[1:59:48] So I just want to be clear about that and make sure there's no confusion around that.

[1:59:57] You know, a couple of

[2:00:00] Another comment I have is,

[2:00:05] to sort of go back to what council member Sirep talked about, you know, about not compromising community services. And, you know, I, I mean, I agree. And the investment we make in, you know, to go back to the resident satisfaction survey, the investment we make, say, in homelessness, it does, you know,

[2:00:30] help us, you know, in the long run, but I also want to just sort of put out there, I mean, let's just sort of be honest with all of us up here.

[2:00:38] It is a very expensive to respond to the homeless crisis that every Bay Area City is facing right now is, it's expensive.

[2:00:50] And, you know, I mean, I'm not saying we don't, I'm not saying we stop investing in that and we stop, you know, supporting those services.

[2:00:57] But I think it's absolutely important that the community understands that the city of Hayward we are responding to the resident satisfaction survey.

[2:01:08] We have been responding to the resident satisfaction survey at a high price.

[2:01:14] I mean, we've been doing it.

[2:01:16] There was a number that Chief Lomer brought to us a few weeks ago.

[2:01:22] And I believe, and you can sort of correct me if I'm incorrect.

[2:01:27] But there were two individuals in the city of Hayward that in total requiring city and hospital services total just north of $1.6 million.

[2:01:40] Two people, two people, and so we are doing our part, we're not taking our foot off the gas, but

[2:01:50] But these are sort of commitments that we have made, these are sort of the values that we really have with this.

[2:02:00] So I want to, while we're sort of figuring this out,

[2:02:04] the things that the city and the neighbourhoods expect us to respond to,

[2:02:11] nonetheless are very, very expensive strategies that we're deploying.

[2:02:16] I mean, third is regarding OPEB, and I just wanted to sort of, you know, I know that we didn't, you know, this year was the first time in several years, we didn't make our full payment, we're still making the payment nonetheless.

[2:02:33] But I just wanted to sort of see, you know, kind of get your opinion about, you know, how long do you think it would take for us to sort of get back to.

[2:02:46] to make in a full art payment.

[2:02:50] What needs to be in place?

[2:02:52] Let me ask you that.

[2:02:53] What needs to be in place, and how long do you think it would take for us to make that full payment?

[2:02:59] Mayor Salinas, we just cut that payment in half.

[2:03:02] The ADC or ARC payment from $3 million is what we've made for this year last year, I think, three years total.

[2:03:09] In the budget for next year, we're proposing making a $1.5 million payment.

[2:03:13] It would be our intention that that only happens one time that we get back to that $3 million as soon as possible because you don't want to get that

[2:03:20] Yeah, you don't want to have run away from you, right? And so to your point

[2:03:24] It's like making that minimum card minimum credit card payment right at some point when times are tough you kind of

[2:03:29] Lower that but we really want to get back to that as soon as possible. Yeah, I appreciate that because um, you know back in 2010

[2:03:37] 2011

[2:03:38] We spent a lot of time figuring that out and we got to a point where we were making the full art payment.

[2:03:48] And so, thank you.

[2:03:50] I appreciate that.

[2:03:50] That we're focusing on getting that back to normal sooner than later.

[2:03:57] The movie theater, I appreciate the response to our movie theater.

[2:04:05] If somebody wants to buy the movie theater for a $100 million tomorrow, go right ahead or cheaper.

[2:04:15] But I think the hour investment in the movie theater, while we weren't expecting a windfall of money in the first or second or even maybe third year,

[2:04:30] You know, we were sort of anticipating a staggered approach or a staggered, you know, revenue stream.

[2:04:39] It's good, it's promising to see that the shells are filling up, if not already full, and I know the budget and finance committee.

[2:04:52] We have been tracking that and we will continue to track that.

[2:04:56] And I know we have been having very

[2:05:00] We are very honest conversations about the movie theater and the future of that movie theater. And so, I just want to assure folks that while we continue to talk that, we will continue to have very honest conversations about that. The other, the last comment I want to make is council mayor pro-tam wrote, talked about sort of our themes. What is it that we're sort of looking for?

[2:05:26] And finance director Edmond had sort of asked us, you know, they're looking for themes.

[2:05:34] You're looking for themes.

[2:05:36] And, you know, the themes that I want to put on the table, just sort of that we're clear

[2:05:40] about it, and so the community is clear, is we want to protect measure C. We want to

[2:05:47] protect K1, and we want to continue with our commitments to that.

[2:05:54] I'm hearing we are committed to core services, for sure, and also looking at the satisfaction survey.

[2:06:06] The good news is I think the resident satisfaction survey, I think it's coupled pretty close,

[2:06:16] pretty tightly with our priorities and our strategic initiatives.

[2:06:20] There might be a few that are sort of off the side a little bit.

[2:06:25] But I think for the most part, they are coupled closely with our priorities.

[2:06:32] So when I look at, and I also know that nothing's going to happen in the next three days,

[2:06:38] I get that we want to make sure we get this budget passed and then we keep going and monitoring it.

[2:06:48] The fourth theme that I'm picking up, too, is continual ongoing monitoring.

[2:06:59] I like the mid-year reports and so forth, but if we need to have more frequent budget check-ins as a council, maybe that's what we do.

[2:07:13] We have, you know, even if it's just, even if it's on the agenda and we're able to sort of do a quick check-in and see what we're doing and just, you know, do a quick check-in.

[2:07:26] I think that maybe something we begin to agenda is more frequently, but anyways, that's pretty much what I have.

[2:07:37] Are there any other questions, comments, director Edmond?

[2:07:43] Yeah.

[2:07:44] Just to follow up on the question about the movie theater.

[2:07:47] So if we take the movie theater out of there because it's not spendable,

[2:07:50] which, again, I'm an agreement with, I was just trying to get to how we looked at projections when it was in versus when it wasn't.

[2:07:57] That was what I was getting at.

[2:07:58] But if we are realizing some revenue, when does that sort of inverting and

[2:08:02] like we're considering the 600, you know, whatever amount is coming in,

[2:08:05] like does it state as a flat 10 million non-spendable or like,

[2:08:09] like how are we going to trade it?

[2:08:10] Because if we're taking it out of the reserve and saying it's non-spendable,

[2:08:13] are we now, should that just be simply listed as an expense that we paid,

[2:08:16] you know, whatever it was last year?

[2:08:18] And as the money comes in, that's just revenue.

[2:08:20] Because otherwise, like, I don't know how to trade it.

[2:08:22] Like, at some point does it become an $8 million non-spendable?

[2:08:25] And there's two million spendable.

[2:08:26] How are we going to handle that going forward?

[2:08:28] All right.

[2:08:31] Happy to jump in here.

[2:08:34] You know, so I will put it this way.

[2:08:36] Right now we have the 8.6 that's a non-spendable asset, right?

[2:08:40] We've got the loan receivable.

[2:08:42] As that money comes in, that'll reduce that amount.

[2:08:45] 8.6, let's just say, we've got a $2 million payment from HEDC.

[2:08:51] That would then go into the spendable reserves,

[2:08:55] except we've got a $12 million deficit.

[2:08:57] So yes, it would reduce the amount of non-spendable, but if we're taking it out of reserves immediately, then, you know, it's a net negative.

[2:09:07] Let's say we had a balanced budget, yes, as that 8.6 million comes in, it would then go into become, you know, it would be cash.

[2:09:16] So it would be a spendable part of the spendable reserves.

[2:09:19] Okay, and that's sort of what I figured, I just like it's sitting there as this sort of like lump non-moving lump of

[2:09:25] Non-spendable it does seem like in a way we should if we're gonna do this going forward

[2:09:29] Just to remove it because we spent the money out of the general fund and any revenue that comes in will just be revenue

[2:09:34] And not like then we're not looking at it in this way that because otherwise, you know

[2:09:38] Because it has been projected as as part of the reserve, right? It was projected that way before and now we're sort of moving that out

[2:09:44] So, you know, just I just want to make sure we're being honest about what it looks like on the budgeting

[2:09:48] But I understand what you're saying.

[2:09:50] Thank you.

[2:09:52] Okay.

[2:09:53] Before I conclude, I wanted to extend and I did hear it in a-

[2:10:00] There are a lot of different ways up here, but I really wanted to think, of course, our city manager. But I also wanted to think the executive team and all of the staff throughout the organization for really sort of taking this moment and doing all of our very best to make sure that we're able to deliver the very best budget possible. And we're, I forget who set it up here.

[2:10:27] But we're all in this together, we're all working on this together.

[2:10:34] And your work, particularly all of your work on the front lines certainly is helpful, and

[2:10:46] it certainly helps us.

[2:10:47] And so I just wanted to say thank you for all of your work.

[2:10:50] Please tell all of your staffs, thank you very much.

[2:10:53] And the conversation, of course, is not done, right?

[2:10:58] While we may be voting on this next week, we still have a long road ahead of us.

[2:11:04] So I wanted to say say thank you and thank you to my colleagues.

[2:11:08] And I see a director, Epin's microphone turn on.

[2:11:13] Thank you, Mayor.

[2:11:14] I do want to pick you back on your comments and that we're only as good as our team.

[2:11:17] This has been a heavy lift to get here today.

[2:11:19] I really do want to thank the exec team for getting us here.

[2:11:23] It's been a lot of work to get here.

[2:11:25] I want to personally call out three individuals.

[2:11:27] And first is Nick Mullins, who has our senior management analyst who's working as our budget officer.

[2:11:34] And Nick has been available, and he jumps when we ask questions.

[2:11:38] When you ask questions, we want that answer yesterday, and he works on it.

[2:11:42] And so, really want to call out Nick for his work, and really want to call out friend Hatfield, who's our management analyst that works on this as well.

[2:11:49] This is all we do, this is all we do day in, day out, nights, weekends, right, this is

[2:11:54] what we work on.

[2:11:55] And then Christina, who conveniently slipped out of the room, but Christina Cosby,

[2:11:59] definitely Director of Finance, you know, you're only as good as your team, and we have a

[2:12:06] really good team, I'm very proud to be part of that.

[2:12:08] So as Christina walks into the room.

[2:12:10] Christina has walked into the room.

[2:12:13] Thank you, Mayor.

[2:12:14] Great.

[2:12:14] Thank you very much.

[2:12:15] So, if there are no other comments to this, I will close this item and I will move to an adjournment.

[2:12:31] Tonight, you may have seen the flags in City Hall and around town on the city buildings

[2:12:45] at half mast and I am incredibly sad to report that the City of Hayward, particularly the public works department and particularly the wastewater treatment plant, has suffered an incredible loss on Friday.

[2:13:14] On Friday, a long time city employee, Mike Rayback, was involved in an accident over by

[2:13:25] Shaboe College, and where he succumbed to his injuries, and he was on his e-bike, he

[2:13:38] He was hit by an automobile, and he did not survive.

[2:13:47] You know, what I heard was, you know, he was at work.

[2:13:54] He went home for lunch.

[2:13:57] He was picking up some medications or something.

[2:14:00] And Friday, as all of you know, it was a beautiful day on Friday.

[2:14:03] way. He decided to, he lived relatively close to the treatment plant. Instead of driving

[2:14:14] back to work, he took his bike.

[2:14:20] And he didn't make it back to work. And so it is absolutely

[2:14:28] that we're sharing this tonight.

[2:14:34] It is with great sadness.

[2:14:37] We share with you news of the passing of Mike Raybeck,

[2:14:41] Public Works Department Utilities Maintenance Mechanic.

[2:14:45] He was struck by a vehicle while riding a motorized bicycle

[2:14:49] and a fatal accident on Depot Road on Friday morning.

[2:14:55] Mike joined the City of Hayward as Utilities Maintenance Mechanics

[2:14:58] on March 16th.

[2:15:00] 2019, 2009, and has served the city and the Hayward community continuously ever since. Previously, he worked for United Airlines in the maintenance department and was very excited about the opportunity to work in and for the city in which he lived with his wife, Denise, daughter, Kira, according to a supervisor, Dan McGallis. He loved working with computers, Dan wrote, and applied

[2:15:29] His love for technology with equal zeal from important water pollution control facility projects to helping a colleague set up their desk set up his set up their desktop PC.

[2:15:43] He loved his toys too.

[2:15:45] He had remote cars, helicopters, and drones.

[2:15:49] He loved riding his Honda magna and really loved his cars and trucks.

[2:15:54] over the years, we saw him in his GT-568 Camaro Pace Car and the Corvettes.

[2:16:04] In addition, Mike was a member of the All Pro American Professional Wrestling Association.

[2:16:15] Professional wrestling promotion and training school based here in Hayward.

[2:16:19] His professional wrestling persona was Max Justice.

[2:16:25] On breaks at work at the plant, Dan mentioned he would share videos of his APW exploits,

[2:16:32] including a battle royale win and snippets of his notable feud with other wrestlers,

[2:16:39] the great colleague, like the great colleague.

[2:16:43] Mike loved playing the heel and would sometimes go into character,

[2:16:47] playfully with guys at the plant.

[2:16:51] Mike was part of the WPCF family and he will always, always be missed.

[2:17:02] Today, I was in our PIO's office, Chuck Finney, and I saw a picture of Max Justice,

[2:17:14] And I'll tell you, I can only imagine he was a, he was quite a menacing fellow that I can, I can only imagine his, his on stage persona.

[2:17:31] In accordance with the City of Hayward Administrative Rule, 5.1, all flags on city properties have been lowered in honor of and respect for our colleague Mike.

[2:17:42] I can assure you that all of us here on the City Council are absolutely heartbroken.

[2:17:51] Mr. Amiri, I know I called you on Friday and we're on Saturday and we really are grieving

[2:18:03] for Mike today.

[2:18:05] I know that we will be planning a tree in his honor.

[2:18:11] I know there will probably be services.

[2:18:13] Please keep us updated.

[2:18:16] And when you do talk to, again, when you talk to his family,

[2:18:21] tell them that the City Council absolutely expresses our prayers

[2:18:24] and our condolences.

[2:18:26] Ladies and gentlemen, tonight meeting is adjourned

[2:18:30] in the memory of Mike Raybeth.

City Council on 2025-05-13 5:30 PM

Agenda

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