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I apologize. So, there are five members here. Evans Mason, Swas, Shell, Carlson, and Epstein are here, absent, or Blair

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And, uh, uh, Rishi and, uh, Rishi and, uh, Rishi and, um, Rishi and, um, thank you very much.

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And, uh, our guests are Mitch Barker from PARS and Wally, catch up PIA from PFFM.

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And Jim is here as our associate member and the mayor when this one is here and Vice Mayor

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Mark will be joining us shortly.

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Great.

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Okay, first item agenda is the approval of minutes. We had a motion by mason and a second by swass. Any discussion I got it backwards. Sorry. I got it. Okay, right. You got it right. Thank you. Any discussion. All in favor.

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All right. Okay. That was a roll call by all members and attendance.

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What is that?

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We just approve the minutes.

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Welcome back, Sam.

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It's been a long time.

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Thank you, Jim.

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Why?

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Appreciate that.

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Looking forward to this relaxation.

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Serena, the next item on the agenda is the review of PM's report.

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How would you like to handle that?

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You could just pass it over to Wally.

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He's going to talk about the fourth quarter for the period ending December 31, 2022, and then while you could just roll into the investment policy, I know you were here the last time and you kind of reviewed it, but now everybody has the document actual redline document in hand for them to see the changes that you have.

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RPFM has recommending.

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Very good, Serena. Thanks very much.

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While it's your, you're meeting if you can share.

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Second, share my screen.

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Can everyone see my screen?

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I see a blank.

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I can everybody see the PDF document that I'm sharing.

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No.

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No PDF yet?

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Nope.

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How about now?

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Nope.

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What's that?

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It might be, it means to take a little time.

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Okay, let me give it a couple of seconds.

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Are the settings to allow non-host to share their screens turned on?

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I believe so. I can see if I can check on that.

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If not, I suggest we just pull it up on our own screens.

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I'll go through it.

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It says it's rolling.

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A lot depends upon your computer and how you have things set up to share with Zoom.

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So I'll tell you what, Serenic, can you pull it up for them and then while he just

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goes, you know, go to the next page to go to the next page,

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you have to stop sharing

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I believe.

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Okay.

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There we go.

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There we go.

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All right.

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I have it.

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Perfect.

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All right.

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So we'll start with page one of the reports.

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We'll go through the market update, go back one slide, there

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we go.

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So just in overview what happened in 2022, when we look at the market update, we saw an aggressive move in interest rates throughout the year, with 425 basis points of rate hikes throughout the year, causing the tweeter treachery to make a tremendous move about 370 basis points.

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This aggressive move did have a negative impact on all fixed end-income investments across the board

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one of the worst

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years we've seen over the last

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40 years

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One of the phenomenons we did see was that we saw stocks and bond both had negative return

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There's something that you don't quite see very often

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Consumer spending resident remain resilience the job market and labor market remain strong

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But inflation, especially when we look at energy and other sectors of the market remain persistent.

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When we look at the asset classes for the year, oil and cash were the best performing sectors.

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In 2022 with all other investments returning in the negative.

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When we move on to the next slide and we look at the landscape of what is going on moving forward in 2023.

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Again, inflation continues to be the main theme that is dictating what the Fed is doing regarding their monetary policy.

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Unemployment numbers came out on Friday, labor markets again, remains strong at 3.4% unemployment.

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We are seeing that the inflation and the increase in cost of living is starting to get the consumer

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with deteriorating savings and increasing amounts of debt to pay for day-to-day expenses,

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so that is something that we definitely want to keep an eye on as we move out throughout this

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year. The Fed says that they want to get to a rate on the Fed funds rate of somewhere between

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5 to 5.25% by the end of the year. We did get a 25 basis point rate hike last week and we're expecting

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another 25 basic point rate hike at the next meeting, whether the Fed continues to raise rates

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hold rates at that number will determine on what the inflation numbers containers show as we move

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throughout the year. We look at the yield curve, again, remains inverted, so that does put us on

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recession watch. And if you look at the belly of the curve and that three to seven year time frame,

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we did see rates move lower. So that was a good thing. When we look at the longer and in the short

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of the yield curve rates did increase slightly last quarter. We move on to the next slide and we

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look at how the two-year treasury has moved since late October. We can kind of see that, you know,

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there has been a lot of volatility with the two-year treasury, a lot of that having to do with,

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you know, how the, you know, the Fed has not only increased rates, but also too, we're starting

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to see that inflation starting in November started to be baked. So that's why you see that drop of

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24 basis points in November of 2022 and then in November of at the end of November, we saw the

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drone power mentioned that the pace of the rate heights that we're going to start to see will start to decrease.

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So those 75 basis point rate heights that we saw that we're mostly done to catch up with inflation.

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It looks like that those might come to an end and we'll start to see slower rate highs moving forward, which does build well for fixed income investments.

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We move on to the next slide and we look at the inflation graph.

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We can see again inflation has come off well off its peak from in the summer time decreasing to about 6.5% on the CPI at the end of December.

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Energy, again, which was a very contributor, has really detracted from its highs, which is good.

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But the services sector, a lot of that's where it's including an energy when we look at that number,

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that number continues to be pretty persistent and pretty sticky.

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Again, we did see some increase in the labor force participation rates.

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So again, more people are starting to take the jobs that we're starting to see there open.

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So we'll see if that has an effect to the services sector and the equation that we're seeing, which is mostly coming from wages.

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We move on to the next slide and we take a look at what the federal committee members are looking at moving on to the next slide.

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When we're looking at the federal committee members and what they're thinking, where the Fed funds rate should be, again there's a huge consensus that we should be near that 5% range and hold that rate for this year.

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with potential rate cuts coming as early as December of 2024 by the end of the year.

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So the Fed has explicitly said that they do not plan on cutting rates this year, that, you know,

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2024 probably a more realistic timeframe where we could see some rate cuts.

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Again, these are not predictions.

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What these are just estimates of what different committee members are thinking as we look

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inflate the inflation data and where rate should be by the end of each year moving forward.

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Now, with the market is pricing in, if we go for the next slide, the market is pricing

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in something entirely different. So the market, again, is pricing in another 25-based

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point rate hike at the next meeting. We got the 25-based point rate hike at the last meeting

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last week, but the market is pricing in potential rate cuts at the end of the year. So whether or not

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that holds two or not, you know, we don't know just yet,

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but there is a disconnect between what the message

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that's wrong, power has been delivering at his speeches

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and what the Fed funds future rates are pricing in

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when the Fed's could potentially start to cut rates.

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We move on to the next slide.

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We look at recession risk.

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Again, there is some caution that we need to have

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and we're looking at recession.

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We're somewhere in the yellow,

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not flashing red per se at this moment.

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But most analysts, if you look at Bloomberg estimates, are pretty optimistic that GDP will start to increase by the end of the year.

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They are expecting some slowdowns in the beginning of the year.

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We did see some of that in some of the earnings report, some of the companies that have already reported.

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But they are, again, optimistic that we should see modest GDP growth as we move throughout 2023 into 2024.

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we look at the yield curve and how it shifted on the next page and this gives us an idea of some

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of the effects that we saw with the changes in rates over the quarter so again if you look

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between the three and the five-year range you see that rates did slightly decrease and if you look

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at the shorter end of the curve in at three month one year and then a longer end on the 30 year

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and the 10 year you see that rates did increase when we move on to the next slide and we look at

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pretty much another graph that gives you a year and reviews. So if you look at 2020,

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a lot of that negative return that we saw in the fixed income markets did come from price returns.

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Again, with yields moving very, very aggressively upwards, that does have a negative impact to

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income securities that were purchased in the past. The good thing is that we start to make

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new purchases and we start to access fixed income markets for new issues. We're starting

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at pretty good yields in that one to five year space at 4.3% so the income generation of new

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purchases and new assets that would be added to the portfolio are a lot more attractive compared

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to where they were back in 2020 when the Fed started cutting rates.

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When we look at the next page and we take a look at the different sectors of the market

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where we're looking for adding value to the portfolio, spreads did come down pretty much across

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the board and we look at federal agencies, corporates, asset back and more of the back securities.

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So again, when spreads start to tighten and come down, we tend to favor treasuries a

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bit more. So as we move on into 2020, the first quarter of this year, we're keeping an eye

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and seeing what spreads to do to see where we can again add value to the portfolio.

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This is just the next page. It gives you a quick update. So I haven't seen this in a couple

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quarters, but the next page showed us that we did have positive returns across the board in the

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these acid-backs and corporates all again, you know, we're able to seek out some positive

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gains.

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We're the fed saying that they're going to slow down the pace of the rate-hikes.

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Again, that does vote well for fixed income securities, you're not going to hopefully

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not going to see tons of swings in unrealized gains and losses throughout the year, because

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again, that the pace of those rate-hikes will start to normalize.

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The next page just gives you a little bit more commentary around the different sectors of the markets.

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I will let you guys read that at your leisure.

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And then the following page gives you an idea of what PFM is thinking for our first quarter out look of 2023.

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Any questions so far?

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All right.

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If there are no questions, we can move on to the accounts summary.

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So the next page gives us an idea of what the portfolio looked like at the end of December.

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We had about $20.3 million in assets, the yield that costs, so this is the yield that the portfolio is generating is at 1.57% with a yield at market at 4.51%.

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So as we're, you know, getting...

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Agree more assets as they mature and reinvesting those assets on the yield it caused is slowly starting to uptake in assets. The camp pool is generating a pretty healthy return with 4.5% on any unused assets that are in the portfolio currently.

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Move on to the next slide. This is an idea of the maturity distribution. So most of the portfolio is sitting in that's 1 to 3 year space with about 10.9% of assets.

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assets in that 181 to one year space. So again, as those assets become available for reinvestment

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will be able to reinvest those assets at a yield that's closer to the yield that market.

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Moving on to the next slide, we gives you an idea of the parameters within the investment policy.

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What's allowed, we are not against any of those limits, which is good. And then the next page

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which gives you a certificate of compliance letting you guys know that the portfolio is in

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compliance with the investment policy.

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We move on to the portfolio review.

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So a little bit more details here.

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When we look at the portfolio on the next page and we look at the effect of duration and

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the benchmark duration.

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We're slightly underweight the benchmark duration.

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Some of that coming from being more overweight in the zero to one year space.

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and being slightly underweight in that one to two year space when it comes to the duration distribution in comparison to the Benchmark credit quality remains high at double A and then again I yield a cost at 1.57 percent.

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We look on to the next page, this is just a page that gives an idea of how the portfolio composition has changed over the last four quarters.

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not a ton of change here, the allocation has remained fairly constant with roughly about 20% of the

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assets and corporates and roughly about 60% of the assets and treasuries. That's pretty much

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remained in line going back to about March 2022. When we look at the next pay, I think, is you an

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idea of net activity. Again, we've been net buyers of treasuries and of corporates and most of

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international federal agency and the agency on C. M. B. S. space.

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The next page was looking performance and again we had positive returns for the first time in quite some time.

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It just earned a 2000 with a change in positive market value of about 123,000 dollars for the order.

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That was better than the benchmark.

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So the portfolio had a positive return of 1.2% on the benchmark as that's 95 basis points.

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When we look at more of a longer term view of what's happening in the portfolio, again,

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most of the unrealized games loss that we've seen.

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We saw happened in, you know, most of that happened last year,

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but when we look at it, but the longer term view, you know,

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we look at and see that the portfolio has,

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pretty handily beat the benchmark over that 10 year time frame, which is positive news, you know,

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when you take it more of a high level view, how the portfolio has performed.

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The next page looks at actual earnings in the portfolio, so these are earnings that

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are looking at realized and unrealized losses and also interest earned. Those numbers across the board

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remain positive, not only in the short term, but then also to

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in the longer time friends of five and ten years.

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That's it for my presentation. Are there any questions?

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I don't think there's any questions. Why don't you, Serena?

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I think you want him to move on to talk about the changes to the investment policies that

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correct? That's correct.

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Should I?

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So everybody should have what was in the packet on the investment policy in the red lines.

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And I don't think there was a lot of changes that KFM made.

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Did anybody have a chance to reveal them?

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And if they have any questions for Wally on why the changes were made?

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Do you know what the statutory to me, is that, was there any, does mental changes?

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No.

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No.

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No.

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I had a question.

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So when it refers to a Senate bill, that becomes a default mechanism.

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So we don't need to express it ourselves.

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Is that the way I should bring that?

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Yeah.

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If there's a Senate bill, there's a change to code.

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That pretty much defaults everything across the board.

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So that's mainly what has happened last year when you look at what's changed in California code.

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And just to be clear with regards to commercial paper, the change allows the town to hold more commercial papers that correct.

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Correct.

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Anyone have any other questions?

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So Serena is looking for a vote by the committee to approve this.

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And I have someone make a motion to approve the changes to the investment policy.

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Make a motion.

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Cheryl makes a motion.

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Can I have a second?

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A second.

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Either way.

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Okay.

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Righty was quick around the draw, so the second is ready.

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Any further discussion?

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Okay.

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Roll call vote.

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Aye.

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Susan?

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I think you said aye.

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Sorry about that.

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Yes, aye.

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Okay.

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ready. Hi. So I Alan says I Jim, you on board? Yes. Yes. Okay. All in favor. Thank you very much.

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You're very welcome. Well, we thanks very much. The next item on the agenda.

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Yeah, with me for one second.

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Is the presentation by Pares on managing the town's open investments?

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Serena, how would you like to handle that?

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I'm just going to, I just want to, I'll pass it over to Mitch.

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Mitch had given me this presentation a few months ago,

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and we discussed bringing it forward to the FIC in getting their feedback

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from the presentation.

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Okay, Mitch, Mitch, Mitch, one thing before you start,

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I see some names on the participant list that I don't recognize.

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If you would like to ask questions, please feel free to raise your hand.

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I'll be happy to recognize you.

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Okay, go ahead, Mitch.

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Thanks, Alan.

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Thank you, Peter and Serena for inviting me tonight.

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Good afternoon, Finance and Invest committee.

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So, you know, if you can pull up the presentation, I'd rather you drive that if you can do that.

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Is that okay, Serena?

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Are you able to pull it up?

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Fantastic.

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That way, I don't have any driving issues.

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Like the 101 or the 405.

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So, very good.

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So, I'm going to give a short presentation to the committee,

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to consider cars for your OPEV assets, which are currently with CalPUR service.

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Next page.

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I'm not going to blow that up a little bit.

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I don't know if everyone can see it clearly.

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So my name again is Mitch Barker.

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I'm a senior consultant.

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I've been with the town since the beginning of this engagement.

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The investment manager currently managing the pension assets

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in our trust as Andrew Brown.

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We all have talked to him in the past and he's not with us tonight because I just didn't feel like it was necessary for him to attend this particular session.

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Next page.

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Think I under a heard that there might be a new committee member attending tonight, so I just wanted to do a quick overview of our 115 trust team.

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We work with public agencies only, we're all about retirement services, and we focus very strongly on 115 trust.

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I've been doing that since I began with the company back in 2004 when GASB45 came out.

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So, bars are what's known as trusted administrators.

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We do the record keeping the accounting.

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We monitor plant compliance as it relates to the IRS, GASB,

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also state government code, we process contributions coming in and and disbursements going out.

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Our trustee is US Bank, so they are the custodian of the assets and hold the money

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and provide oversight protection and then high-mark capital is the investment management.

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All right, next.

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Well, it's always important to share our right list. We have almost 500 agencies

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in our 115 trust for sake of brevity. I just focused on the Bay Area Clients, which are on the

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screen in front of you. You'll know many of those cities, if not all of them. I did highlight those in

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red, which represents the switch from Calper, Serbate, over to PARS for the OPEC side of the equation.

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They felt like that was a good move and hopefully we'd been able to justify that move.

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couple cities in that area,

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livermore and in the town of Woodside,

291
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also five counties,

292
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the most recent of which is plastered,

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that transferred over 225 million.

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And then we have a couple of special districts

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and one school district too.

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Next,

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so we have a combination trust

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which is the graphic on the right.

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It's capable of pre-funding

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either OPEC or Pinch and are both. It is IRS approved. CalPERS has their

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server, which is their OPEB trust. And the idea before you tonight is to potentially

302
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consider transferring over the OPEB assets and their OPEB only trust over to our

303
00:26:18,050 --> 00:26:25,310
combination trust. The act for that we saw showed about 3.1 million in assets

304
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within their trust. So if you were to transfer that over to the

305
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pars combination trust, along with your 1.8 million pension, that would be

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about $4.1 million in assets within the total trust. Next,

307
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it's always

308
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important to look at the actual evaluation for OPEP to take a look at the numbers

309
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And the latest numbers on the act for that we can see shows your fully funded.

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You've done a great job of funding their trust to prepare for paying OPEB assets at some

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point of time out of the trust.

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So I want to commend the town for doing that year in the probably top 5% that are fully funded

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on the OPEB side.

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Even though that gas requirement has been around for quite some time.

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Next,

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I want to take a look at our investment approach, it's simple in nature, it's certainly

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not simple to understand the market and try and figure out what's the right investment

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opportunity, but I think our approach is proven our clients very well and it's maybe

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a testament as to why we're the number one provider, 115 trust services in California.

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We listen carefully that input phase on the left, we focus in on what's your target rate

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return, what's your investment philosophy, what's your timing use of funds, and then we have

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the five model portfolio strategies in the middle there. Side note, your pension assets with

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us or in the moderate strategy to one right in the middle is about a 50-50 strategy, which is

324
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earned 5.1% over a 10-year period compared to life at the bottom. If you were in just a liquidity

325
00:28:16,810 --> 00:28:23,630
management program is earned 0.91 over that same period of time and I think the block on the right

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really is one of the main reasons why we've been able to do so well is our dedicated portfolio

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manager concept. I think Andrew Brown does a great job of listening to the committee and the

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town's needs and does this very best to deliver. He also drafts an investment policy,

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5 page game plan on how to achieve your target rate of return with at least a amount of risk

330
00:28:46,790 --> 00:28:51,730
possible and then has cell phone access. He has certainly got a number of phone calls

331
00:28:51,730 --> 00:28:57,250
over the last year as the market spent a lot of volatile things with interest rate changes

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in dips and turns. So I think that personalized service is really how we've been able to achieve

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success. Next page,

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probably the most important reason why you might want to consider a shifting

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your OPEB assets over to the combination trust would be performance. We like to look at

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net performance, we think that's the best measuring stick. Net performance is defined as gross

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performance minus all fees. So this is net of all fees comparing our like strategy to like strategy

338
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at CalPERS servant. They're longest term strategy strategy one versus our capital appreciation.

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00:29:41,950 --> 00:29:46,390
I guess in a positive way, we lost less money than they did last year.

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Kind of a different way to look at it. Over three years, 2.8 versus 1.5, over five years,

341
00:29:55,530 --> 00:29:59,790
3.9 versus 3.1 and over 10 years.

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6.4 versus 5.3. So, again, this is net of all fees. When the footnote at the bottom there, this is for assets under 5 million.

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Once your assets exceed 5 million, it reaches another level on our fee schedule and then our fee is go down. So, the net return differential would even grow. Next page.

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I wanted to give you our fee schedule so that you see those scales starting at 0.25 for

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cars and going down, high marks at fee schedule starts at 0.35 and goes down so you

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see once the assets get over a 5 million, their fees go from 0.35% down to 0.25% pretty dramatic

347
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drop.

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Next page, this is my last slide and I'm trying to put myself in your places to why this might be a worthy change to potentially shift your OPEV assets over to parse.

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Here at the key points, I'm not going to go over one of them, I'm just going to hit the highlights.

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First off, this is our core business. This is what I've been doing since parse started the 115 trust business in 2015.

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00:31:13,540 --> 00:31:28,680
this is our core business. We are the go to leading expert in the state. Number two, market pioneer, we were the first to come out with the OPEP trust and then we were the first to come out with the combo trust which has pension pre funding.

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Number three, this is a combination trust where the two CalPERS trust are separate and they don't they don't communicate with each other. So we think the combination trust is an easier way to communicate and to

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handle both of these post employment benefits.

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Think number five is important.

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Every agency needs to look at what if the worst case scenario

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happens such as a tough budget year or an emergency,

357
00:31:55,700 --> 00:31:59,160
you can take out up to two years worth of expenses with powers.

358
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You can only take out one year with calipers.

359
00:32:02,880 --> 00:32:07,320
So twice as much flexibility if you were to have a difficult time

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period.

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I talked about the dedicated portfolio manager concept.

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00:32:11,480 --> 00:32:16,540
Again, I think that's probably the most important key, which leads to number 7.

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00:32:16,840 --> 00:32:23,020
We have a choice of five active strategies, or five passive strategies, or once you get

364
00:32:23,020 --> 00:32:25,900
over 5 million in assets, we can customize the strategy.

365
00:32:27,000 --> 00:32:28,520
So we've got lots of flexibility.

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And then the final thought again is greater net performance, 6.4 versus 5.3 over a 10-year

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period of time.

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So, the idea is to potentially work with one company.

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CalPERS, no question has a good program, they have a lot of clients.

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00:32:46,920 --> 00:32:49,140
I just think in our opinion, we've got a better program.

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And that's my presentation. I'm available for questions.

372
00:32:54,410 --> 00:32:56,610
Okay. Thank you very much, Mitch.

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00:32:57,370 --> 00:32:58,650
People have questions?

374
00:33:03,280 --> 00:33:06,340
Well, I have some of the same questions that Alan has.

375
00:33:06,340 --> 00:33:13,760
So I'd like to better understand the benefits of this joint account that you described.

376
00:33:14,840 --> 00:33:18,160
I noticed that you still have two buckets on your graph.

377
00:33:18,340 --> 00:33:23,120
Does that mean that the money isn't co-mingled, but it's just in the same account?

378
00:33:23,940 --> 00:33:26,680
Or what is the advantage of that to us?

379
00:33:27,480 --> 00:33:27,680
Yeah.

380
00:33:28,700 --> 00:33:29,840
So you're going to can you pull that slide.

381
00:33:30,040 --> 00:33:32,200
You still have it?

382
00:33:33,260 --> 00:33:36,500
Under Gasby Rules, Roddy, we have to keep the money separate.

383
00:33:37,360 --> 00:33:45,240
So Gasby 75 governs OPEP and Gasby 68 governs pension.

384
00:33:46,380 --> 00:33:48,860
So at beyond page five, there we go.

385
00:33:49,080 --> 00:33:51,460
If you can blow up, maybe that graphic on the right there.

386
00:33:53,820 --> 00:33:56,620
So again, for Gasby Rules, we have to keep those separate.

387
00:33:57,060 --> 00:34:00,460
They are different line items on your balance sheet as well.

388
00:34:01,300 --> 00:34:02,760
So that's why you see them separated.

389
00:34:02,760 --> 00:34:15,600
But for fee purposes, Roddy, we were able to combine those two together, and that's why I was talking about 3.1 plus 1 equals 4.1 million assets.

390
00:34:16,540 --> 00:34:23,700
You can, however, have different strategies. So for instance, the town is in moderate with us for pension.

391
00:34:24,260 --> 00:34:30,960
If you had a different risk tolerance level for OPEP, we can do that.

392
00:34:30,960 --> 00:34:33,120
So that's part of the flexibility we have.

393
00:34:34,420 --> 00:34:37,120
So let me ask a second part of that question.

394
00:34:37,460 --> 00:34:40,720
Are you pointed out that we're over funded by a million dollars?

395
00:34:43,800 --> 00:34:47,320
So let me just make that point and say,

396
00:34:47,480 --> 00:34:50,320
what would you suggest that we do about that?

397
00:34:50,320 --> 00:34:52,840
With respect to what you can accomplish for us?

398
00:34:53,200 --> 00:34:56,040
Yeah, so there's a number of ways

399
00:34:56,040 --> 00:34:59,100
to address funding at that level.

400
00:34:59,100 --> 00:35:05,820
You could either get, you could take some risk off the table and go to a more conservative strategy,

401
00:35:07,200 --> 00:35:10,980
since you're sort of at the end from a funding standpoint.

402
00:35:12,400 --> 00:35:18,060
If you do that, then the Actuary will lower your discount rate,

403
00:35:18,260 --> 00:35:20,480
commensurate with your risk tolerance level.

404
00:35:21,080 --> 00:35:25,360
Unfortunately, the teeter totter effect will happen, so when you lower the discount rate,

405
00:35:26,660 --> 00:35:29,860
the the unfunded liabilities in the annual cost go up.

406
00:35:30,540 --> 00:35:36,260
So we'd have to balance those two with your actuary to make sure that, you know,

407
00:35:36,300 --> 00:35:37,780
you're going in the right direction.

408
00:35:38,560 --> 00:35:50,460
The other option is to potentially start using the assets out of your trust to pay for your

409
00:35:51,960 --> 00:35:56,220
So that's what I've seen some of our clients do that are fully funded.

410
00:35:56,440 --> 00:36:00,120
They start using the trust to pay the bill instead of out of the general fund.

411
00:36:02,260 --> 00:36:03,400
That is your question.

412
00:36:04,080 --> 00:36:06,180
The answer to part of it.

413
00:36:06,480 --> 00:36:09,280
I'll leave it down to ask the last part.

414
00:36:11,140 --> 00:36:13,380
Anyone else have questions for Mitch?

415
00:36:15,330 --> 00:36:17,470
So Mitch, my question is,

416
00:36:18,230 --> 00:36:21,090
I understand you account for these two things separately.

417
00:36:21,970 --> 00:36:31,010
Is it possible to use Opeb fun to pay on funded pension or is that not a lot correct?

418
00:36:31,350 --> 00:36:32,030
That is not allowed.

419
00:36:32,250 --> 00:36:36,310
Let's go to the bottom of the go back to that graphic slide screen if you can.

420
00:36:39,280 --> 00:36:39,400
All right.

421
00:36:39,620 --> 00:36:43,140
And then the paragraph at the bottom left there any time access.

422
00:36:44,760 --> 00:36:51,000
So the trust funds are available anytime, but Opeb funds must be used only for Opeb

423
00:36:51,000 --> 00:36:57,980
pension funds, less to only use for pension. Again, that's a gas-be requirement. So let's use

424
00:36:57,980 --> 00:37:02,360
a pension for instance, or better yet, let's use OPEP for instance if you were to make this

425
00:37:02,360 --> 00:37:08,000
move because you're a fully funded status actually a little bit overfunded. If you said, hey,

426
00:37:08,280 --> 00:37:13,400
we really want to put some more money on the pension side. You'd have to take reimbursement of

427
00:37:13,400 --> 00:37:19,680
your OPEP assets back to your general fund. Once they're in the general fund, then you have the right

428
00:37:19,680 --> 00:37:25,240
do whatever you want with them. You could use them for some other purpose or you could use them to

429
00:37:26,660 --> 00:37:30,120
go into the pension account within our combination trust.

430
00:37:31,680 --> 00:37:37,440
And a follow-up question to that. That would mean that the money that we provided in the last two

431
00:37:37,440 --> 00:37:45,460
years to to powers could be taken back and reallocated to the to the pension. Is that correct?

432
00:37:45,460 --> 00:37:53,980
Yes. So we haven't given you any money. And at this current time, we're not putting any

433
00:37:53,980 --> 00:38:00,940
money into the, into the opem. We are doing what you suggested using the fund itself to

434
00:38:00,940 --> 00:38:07,740
pay for all the current current costs. So with what I've described to you, there is no opportunity

435
00:38:07,740 --> 00:38:11,560
to move funds from opem to pension.

436
00:38:11,560 --> 00:38:23,760
Yeah, you can't move them directly over on a lateral basis based on that graphic on the right but you could reimburse them back to the general fund in effect redistribute them back to the pension account.

437
00:38:24,180 --> 00:38:27,840
But you under gas be rules, you must take reimbursement first.

438
00:38:28,380 --> 00:38:34,420
You may remember in the old days of the 115 trust they talked about the word irrevocable irrevocable trust irrevocability.

439
00:38:34,960 --> 00:38:41,440
So what that means is the funds must be used for the purpose in which they were intended when they were contributed into the trust.

440
00:38:41,560 --> 00:38:54,980
So those OPEV assets must be used to pay the OPEV bill, either as on a reimbursement directly back to the town or pay the provider of the OPEV benefit directly.

441
00:38:56,020 --> 00:39:09,980
Conversely, your pension assets can be used to reimburse the town for pension-related expenses or when you deem it appropriate, you can pay CalPERS directly to lower the UAL.

442
00:39:14,640 --> 00:39:24,840
It seems, if I'm listening to you correctly, the real advantage is that we pay lower fees to have you manage both of them.

443
00:39:25,340 --> 00:39:27,840
Lower fees and then also better investment performance.

444
00:39:29,840 --> 00:39:35,860
But in particular, Cheryl, there's another advantage, which is that once you put money into Cal Perth, it never comes back out.

445
00:39:35,860 --> 00:39:40,700
Right. In this arrangement, you can get it back for a year or two.

446
00:39:42,680 --> 00:39:47,500
Yeah. But the lower fees break point is 5 million right, Mitch. So.

447
00:39:47,640 --> 00:39:53,780
Correct. The lower fee is not for the total 5 million. It's above the asset base above 5 million.

448
00:39:54,840 --> 00:40:01,400
The total would be attributable to. So, I mean, until we're above 5 million. And it's only

449
00:40:01,400 --> 00:40:04,260
lower fee on that above 5 million. Correct.

450
00:40:07,430 --> 00:40:22,250
But I see what you're saying. Yeah, but I feel like the idea of working one with one investment provider for these post employment benefits and then better net investment performance than perhaps this might be a good idea for you.

451
00:40:22,490 --> 00:40:29,170
Let me just go over some territory we've been over before you to make sure I'm not missing anything.

452
00:40:29,170 --> 00:40:46,430
Assuming that we take this million dollars that we have, that's overfunded out of the OPEP trust and put it someplace else, what are the pluses and minuses putting it into your pension trust as opposed to using it to pay down the unfunded liability with CalPERS.

453
00:40:48,190 --> 00:40:49,210
Well,

454
00:40:52,470 --> 00:40:59,770
I don't have your, I didn't put your pension numbers into this presentation for

455
00:40:59,770 --> 00:41:10,330
give me rody for that. I think paying the CalPERS liability down is a good idea. I don't

456
00:41:10,330 --> 00:41:15,310
remember exactly where your pension fund is status is, but my guess it's on the higher

457
00:41:15,310 --> 00:41:22,050
end of the scale. We can see a bit of this good but it's not but but and we're fully funded at the

458
00:41:22,050 --> 00:41:27,710
moment but in a couple more years we will be. Yeah well we know what's coming in August this next year.

459
00:41:28,170 --> 00:41:34,490
Well the current year we're in we're getting new numbers which reflect June 30 2022's CalPERS performance

460
00:41:34,490 --> 00:41:41,670
which was unfortunately negative 7.5%. So when those numbers get factored in the mathematician

461
00:41:41,670 --> 00:41:47,610
folks at our shop and others I've heard said that you will drop about 10 percentage points.

462
00:41:47,850 --> 00:41:53,670
So if you're fully funded now for pinching, you'll drop to about 90%. So one idea is to use

463
00:41:53,670 --> 00:42:00,610
overage extra money. The million you mentioned to pay down the UAL with CalPERS. If you like that idea.

464
00:42:01,770 --> 00:42:08,610
Others have said, man, the liability is going to grow next year. Therefore, I don't want to put it there.

465
00:42:08,610 --> 00:42:22,810
I want to put it into the 115 trust to keep it ready for the future sort of keep your powder dry prepare for what may be coming down the road. Hopefully it will be a good year, but we don't know for sure.

466
00:42:23,570 --> 00:42:33,610
They're going to lower the discount rate again at some point in time. They lowered it last year to 6.8 so if you like the idea of building up that pension account and you would put it there so.

467
00:42:34,130 --> 00:42:38,690
You know, there's an argument for doing it either way.

468
00:42:38,850 --> 00:42:41,350
I'll leave it to you guys to sign what's best.

469
00:42:41,510 --> 00:42:42,610
All right.

470
00:42:45,640 --> 00:42:49,500
So right if you take down the sharing formula, I could see everybody.

471
00:42:49,880 --> 00:42:53,340
Is there anyone else that has questions for Mitch?

472
00:42:55,460 --> 00:42:57,160
Any public questions for Mitch?

473
00:43:00,940 --> 00:43:04,480
So I think today we've got an excellent report from Mitch.

474
00:43:04,540 --> 00:43:06,040
Thank you so much.

475
00:43:06,040 --> 00:43:16,040
The committee will take it under consideration and decide what action we'd like to take at a subsequent meeting, but thank you so much, and if we have further questions, we know where to find it.

476
00:43:16,980 --> 00:43:19,720
Thanks Alan, thank you committee, take care everyone.

477
00:43:20,700 --> 00:43:21,580
Thanks, Mitch.

478
00:43:24,540 --> 00:43:27,380
I'm sorry, it just came to me.

479
00:43:28,060 --> 00:43:29,000
Mitch, your comparison.

480
00:43:30,140 --> 00:43:32,480
Well, he just got off yet.

481
00:43:32,480 --> 00:43:37,420
Go ahead and ask your question, no, Jim. We'll get an answer for you, okay?

482
00:43:38,120 --> 00:43:46,900
Here is an uneal, was based on the most aggressive option for CalPERS and PARS. If the

483
00:43:46,900 --> 00:43:54,160
comparison was done using our choices, the moderate versus the CalPERS our choice moderate,

484
00:43:54,900 --> 00:44:02,040
what would a difference be? It would be favorable to CalPERS to the OCA that we're using now.

485
00:44:02,480 --> 00:44:06,460
Okay, Jim, there also isn't an exact direct comparison.

486
00:44:07,700 --> 00:44:11,140
Calper says, you know, less options to choose from.

487
00:44:12,280 --> 00:44:16,240
So, par says five buckets and Calper's only has two or three.

488
00:44:16,520 --> 00:44:19,300
So, you actually can't get a one to one comparison.

489
00:44:19,480 --> 00:44:21,360
But your question is a very good question.

490
00:44:21,560 --> 00:44:26,800
He kind of compared apples and oranges a little bit in his presentation.

491
00:44:27,700 --> 00:44:33,920
But it is true that the advantage is that if we would have had this money that we have

492
00:44:33,920 --> 00:44:43,000
in OPEP in the OPEP, we could have just taken it out and we're having to work hard

493
00:44:43,000 --> 00:44:46,940
now to find a way to make sure we get that million dollars back efficiently.

494
00:44:47,580 --> 00:44:51,640
So it's easier for us to work with the model than it is with the CalPers model.

495
00:44:52,140 --> 00:44:54,860
It seems to me that the real advantage is flexibility.

496
00:44:54,860 --> 00:44:57,000
Okay, yes.

497
00:45:00,000 --> 00:45:05,260
Just point out that we're not putting any new money into the OPEB trust.

498
00:45:05,740 --> 00:45:18,250
But that number keeps getting bigger. That million was 200,000 the first time we saw it. And we saw it coming. And we anyhow, I'm just saying it's easier to manage one less thing to worry about.

499
00:45:19,090 --> 00:45:31,290
But I'm just trying to say that the flexibility is the ability to get money back that you put in in the last two years. And we're not, and we're not putting any additional money into into OPEB.

500
00:45:31,290 --> 00:45:37,450
because we're, quote, overfunded and we're using the trust that this point to pay the current expenses.

501
00:45:37,610 --> 00:45:43,730
That's our effort to draw down the, the overfunding of the OPEP trust, if that's clear to everyone.

502
00:45:44,650 --> 00:45:45,230
Mm-hmm.

503
00:45:45,470 --> 00:45:48,370
Right. Okay. Thank you so much.

504
00:45:48,990 --> 00:45:53,150
The next item on the agenda is Serena's mid-year budget review.

505
00:45:55,300 --> 00:45:58,060
Okay. So before I start sharing my screen,

506
00:45:58,060 --> 00:46:13,760
And I don't know if they were Roddy Ann Allen's questions, but Roddy sent me some questions so I'm going to try to integrate it into the presentation. Anything I missed Roddy, I'm sure you could chime in.

507
00:46:13,760 --> 00:46:15,480
Thank you.

508
00:46:15,480 --> 00:46:17,240
Let me share my screen.

509
00:46:40,050 --> 00:46:42,530
One quick second, let me pull it out.

510
00:46:46,000 --> 00:46:46,640
Can

511
00:47:06,700 --> 00:47:08,460
everybody see my screen?

512
00:47:08,460 --> 00:47:10,280
Okay.

513
00:47:12,660 --> 00:47:20,820
Okay. So, this is the Townwide Fund summary, and one of the questions was, what does

514
00:47:20,820 --> 00:47:27,980
earmarked mean? And earmarked is just stating that this is what Council has approved for

515
00:47:27,980 --> 00:47:38,140
either reserves or for projects pertaining to that fund. So, as you can see, we still have pretty much

516
00:47:38,140 --> 00:47:43,840
haven't made much or many changes in the reserve.

517
00:47:47,200 --> 00:48:10,460
Sorry, in the reserve fund with these different categories. What I am recommending is for we have 1.2 in our disaster contingency and with the storms that we've just endured. I'm going to request or propose.

518
00:48:10,580 --> 00:48:20,060
to City Council in moving $200,000 from the disaster contingency reserve to the general fund.

519
00:48:20,780 --> 00:48:28,580
And if we do get reimbursement back from FEMA or from the state, we then will then put the funds

520
00:48:28,580 --> 00:48:30,580
back into the contingency.

521
00:48:32,820 --> 00:48:37,600
And then, of course, we have our ARPA funds and then we also have our

522
00:48:37,600 --> 00:48:45,060
on our sewer funds. So, with that being said, you see some negatives here in the general CIP and the street.

523
00:48:45,420 --> 00:48:52,280
That does not include the transfers that we would normally do at the end of the year.

524
00:48:52,420 --> 00:48:55,680
So, we don't do them at mid-year, we would do them at the end of the year.

525
00:48:56,860 --> 00:49:05,140
Also, you can see for the revenue for a street, we haven't received all the revenue that mostly pays for our street expense.

526
00:49:05,140 --> 00:49:14,410
So here is a snapshot of the proposed budget amendments that we will be taking to council.

527
00:49:15,450 --> 00:49:21,790
This column here where it's approved budget council budget amendments through 1231.

528
00:49:22,370 --> 00:49:29,870
Those are budget appropriations that council made from July through December.

529
00:49:29,870 --> 00:49:41,490
We see the expenditures were increased by 42,000, and then we have the capital funds that were increased by 56,000.

530
00:49:42,490 --> 00:49:52,230
So our amended budget total through 1231 does take those total takes those amendments in the consideration.

531
00:49:52,870 --> 00:49:57,790
And what we're proposing for budget amendments to the city council.

532
00:49:57,790 --> 00:50:07,210
So we want to reduce the revenues in the general fund by 189,000, 100.

533
00:50:08,270 --> 00:50:16,170
Those pertain reducing the license and permits revenue by 183,000 and then reducing the charges for services.

534
00:50:16,830 --> 00:50:26,370
We recognize that we are not going to get the close to the budget amount that we initially

535
00:50:26,370 --> 00:50:53,650
proposed in July. And that's because we saw that permits that were issued this fiscal year was about 297 permits and what we received at the same time last year was 340. So we decided to reduce the revenue and I'll show you in the next couple slides.

536
00:50:53,650 --> 00:51:04,510
the actual line items so you could get a better understanding. So we also add, we also are

537
00:51:04,510 --> 00:51:16,830
asking to add in reach codes. And the reach codes are for the, what is the reach codes for?

538
00:51:16,830 --> 00:51:21,590
is to update going from gas and building fees.

539
00:51:23,220 --> 00:51:24,320
Go ahead, Peter.

540
00:51:24,580 --> 00:51:25,220
Did you say something?

541
00:51:25,620 --> 00:51:25,900
Sorry.

542
00:51:26,040 --> 00:51:27,440
I am muted the wrong section.

543
00:51:27,900 --> 00:51:29,180
Green building fees.

544
00:51:29,620 --> 00:51:33,200
Green building elements of the building code.

545
00:51:33,940 --> 00:51:40,900
So the council directed staff to look at requiring electrification for remodels.

546
00:51:41,400 --> 00:51:46,200
So as part of that, we need to do community outreach and then propose some new

547
00:51:46,200 --> 00:51:52,780
language that would be embedded into our building codes and then make that enforceable at the

548
00:51:52,780 --> 00:52:00,760
beginning of next year. Thank you. And this is one of the items that council added to their

549
00:52:00,760 --> 00:52:11,280
work plan at their study session. So we wanted to add that to this year's budget. We also are

550
00:52:11,280 --> 00:52:20,100
asking or proposing to reduce the planning and building expenditures by 269,000 with the reduced revenue.

551
00:52:20,460 --> 00:52:28,340
We decided to reduce the expenditures because of the number of permits that are being issued.

552
00:52:29,120 --> 00:52:38,300
And also the 50,000 we're asking to add that for the Council chamber or AV system.

553
00:52:49,730 --> 00:53:16,310
Okay, so this is just a snapshot of all the funds, as you could see, by amending the budget for revenues and expenditures, our revenues are coming in at 39%, which the actuals were about 6.3 in the expenditures at 46% at 7 million.

554
00:53:16,310 --> 00:53:16,610
it.

555
00:53:18,790 --> 00:53:25,090
And then the other thing was that we amended was the capital funds. As you know, revenues

556
00:53:25,090 --> 00:53:33,790
for capital normally is timing of the receipts and then of course the expenditures more

557
00:53:33,790 --> 00:53:41,450
at 57%. And then the sewer funds of course the timing difference of the revenues receipts

558
00:53:41,450 --> 00:53:42,690
for the sewer assessments.

559
00:53:43,310 --> 00:53:46,670
And then of course, the operating expenses also

560
00:53:47,430 --> 00:53:51,070
has a timing of the expenditures.

561
00:53:55,300 --> 00:53:58,940
Overhead allocations arena, there was a 35% increase.

562
00:53:59,720 --> 00:54:02,160
There was that just volume related also.

563
00:54:02,540 --> 00:54:02,840
Yes.

564
00:54:03,980 --> 00:54:06,820
So can you guys all see this?

565
00:54:06,900 --> 00:54:08,880
I didn't make it a little larger, please.

566
00:54:11,620 --> 00:54:16,800
I've got to do it to everybody see that.

567
00:54:17,120 --> 00:54:17,320
OK.

568
00:54:17,320 --> 00:54:45,180
So as I said before, we have the itemized of revenues based by category, property tax is always a timing difference as you can see, as of last year, it was about the same percentage, taxes another property that big increased last year was sales tax this year, it stabilized after, you know, COVID.

569
00:54:45,180 --> 00:54:51,330
most a lot of people are now getting out and spending their money versus being at home and

570
00:54:51,900 --> 00:54:58,380
on the computer. Frank, franchise fees, always a timing difference. We always get that towards

571
00:54:58,380 --> 00:55:05,400
closer to the end of the fiscal year. And then here again, as I mentioned earlier,

572
00:55:05,400 --> 00:55:19,780
The previous budget, the council initiated initially approved was about 2.4 and we reduced it to 1.6.

573
00:55:20,240 --> 00:55:33,940
So we feel that with reducing those revenues that we're going to get on a bit more on target of what we will see received by the end of the year.

574
00:55:33,940 --> 00:55:44,580
You said money and property as you heard from well earlier that it's interest that has

575
00:55:44,580 --> 00:55:53,860
is not up to the market governmental, you know, some of those revenues are based on reimbursement.

576
00:55:54,260 --> 00:55:57,320
So we would receive it once we spend the money.

577
00:55:57,320 --> 00:56:06,340
charges for services. When reducing the charges for services, we're pretty much on target of what we're going to receive by the end of the year.

578
00:56:08,100 --> 00:56:21,320
Miscellaneous. Those are some miscellaneous refunds and reimbursements that we received that we didn't expect, so that is what's taking it to the 57%.

579
00:56:21,320 --> 00:56:47,800
And then if we go down here to our expenditures, pretty much a administration is almost on target at the 49%, a little bit over from previous year, and we have all they can see, we have filled all staffing with exception of one vacancy in the building department.

580
00:56:47,800 --> 00:57:00,560
Public safety that's slightly higher from the previous year. Some of it has to do with the timing of the expenses, but also it also includes some over time.

581
00:57:01,360 --> 00:57:13,380
Planning and building we did reduce the expenditures. If we weren't going to receive the revenue, we wanted to make sure that we reduced expenses based on the number of permits.

582
00:57:13,380 --> 00:57:42,180
So I'm going to stop right there for a second because I do want to point out I know last year there was a big cut discussion regarding license and permits and charges for services, how we if you could see here the 104% for license that permits and that was that mid year and then charges for services of 129% so I just want to give some a little bit more analysis to that and.

583
00:57:43,380 --> 00:57:48,840
Currently, we are not receiving enough revenue to support the building and planning expenditures.

584
00:57:49,960 --> 00:57:59,620
So currently, we received 1.1, 1.2, and we expense 1.2.

585
00:57:59,620 --> 00:58:08,000
As you can see here, 1.7, so the general fund is still supporting the planning and building departments.

586
00:58:08,000 --> 00:58:18,640
And so when we talked last year, we said we wanted to do an analysis of the license and permit fees,

587
00:58:20,880 --> 00:58:28,900
because, you know, we didn't think we were fully capturing all of the revenue or even fully capturing all of the expense.

588
00:58:28,900 --> 00:58:54,400
And as you can see, year to year, it changes and it's even flow up and down and so we could never just look at one year and it's entirely to say that we're, you know, we're collecting more revenue than we are spending and so this is just a perfect example as how things change from last year to this year.

589
00:58:55,280 --> 00:58:58,580
do you want to add anything Peter to that?

590
00:59:01,740 --> 00:59:02,580
No. Oh.

591
00:59:05,820 --> 00:59:07,940
I'm using two different systems, I'm sorry,

592
00:59:08,360 --> 00:59:14,160
by headset and when we connect to my phone. So yeah, I think that the point that we've tried to

593
00:59:14,160 --> 00:59:20,180
make early on in this conversation with permit fees are very volatile in any city. You get revenues

594
00:59:20,180 --> 00:59:25,460
some days. The general fund is supporting the building department. Other days the building department

595
00:59:25,460 --> 00:59:28,600
is depositing the revenues into the general fund.

596
00:59:28,840 --> 00:59:34,420
And so we were apprehensive to make a quick judgment

597
00:59:34,420 --> 00:59:39,480
in terms of our correction.

598
00:59:40,220 --> 00:59:42,540
And so now we're starting to see that, in fact,

599
00:59:42,620 --> 00:59:46,900
now the building department is not doing as well

600
00:59:46,900 --> 00:59:48,080
as we would have hoped.

601
00:59:48,820 --> 00:59:51,880
So again, we're going to do the cost of service study

602
00:59:51,880 --> 00:59:54,800
later after we've done our audit of the building

603
00:59:54,800 --> 00:59:59,980
permits, but we're already starting to see the effects of going from...

604
01:00:00,000 --> 01:00:15,940
One fee that we had at the beginning of last year to now the the new fee which was cut in half. So we're definitely seeing a reduction in in revenues. The one thing I would point out is that there's this never going to be a year that we get it absolutely perfect. That's just a nature of this business.

605
01:00:18,180 --> 01:00:25,300
So, the way to look at this is to do a five to ten year horizon, and as long as we're

606
01:00:25,300 --> 01:00:31,360
working towards generally expenditures and revenues matching, then we're in good shape.

607
01:00:32,920 --> 01:00:36,140
But now we're just, we're seeing what we thought we would see, which is reducing the fees

608
01:00:36,140 --> 01:00:44,400
and having a negative impact on our ability to keep the building department.

609
01:00:45,960 --> 01:00:47,620
at a neutral position.

610
01:00:48,180 --> 01:00:51,700
So we'll have to go back and take a look at the permits.

611
01:00:52,620 --> 01:00:54,660
And after we do the audit of the permits

612
01:00:54,660 --> 01:00:58,440
that were issued since we adjusted the billing permit fees,

613
01:00:58,440 --> 01:01:00,900
where we have to do a cost of service study.

614
01:01:01,700 --> 01:01:05,200
But that's still probably six months to a year

615
01:01:05,200 --> 01:01:07,120
by the time we finished both those things.

616
01:01:08,300 --> 01:01:11,160
So I don't know if this is confusing to anybody else,

617
01:01:11,160 --> 01:01:21,020
I find this the most confusing chart to really be able to understand what's going on.

618
01:01:21,300 --> 01:01:26,520
I think Cheryl, maybe if I if you take all the numbers off this chart and you just focus on two

619
01:01:26,520 --> 01:01:34,820
numbers. The first number is under license and permits. Right. Okay. That's all of our building

620
01:01:34,820 --> 01:01:45,100
permit revenue. Right. So yeah, so the building permit revenue last year received more revenue

621
01:01:45,100 --> 01:01:52,620
than we expected. So we went through this exercise, you could remember the FIC motion made

622
01:01:52,620 --> 01:01:58,200
a motion that we reduced the permit fees. Right. So we did that. So we reduced the permit fees.

623
01:01:58,200 --> 01:02:05,780
Now that they mid-year is over, we've seen that we were collecting a lot less than we thought.

624
01:02:06,460 --> 01:02:10,300
And as a result, not only are we below what we thought we would be, which would be normal,

625
01:02:10,300 --> 01:02:12,020
because we knew we were going to collect less.

626
01:02:12,420 --> 01:02:14,940
But we're actually below expenditures.

627
01:02:15,260 --> 01:02:18,320
So now we're exceeding, we're spending more than we're receiving.

628
01:02:18,580 --> 01:02:23,340
So I'm just over here to spend the expenditure of the planning and building.

629
01:02:23,700 --> 01:02:24,820
That's the same thing.

630
01:02:24,820 --> 01:02:44,020
Yeah. Okay. So, licenses and permits are planning and building. Well, so I, what I, what I, what I don't understand is if I go look at the proposed amended budget, you had a, a million six in licenses permits, but 3.7,

631
01:02:44,020 --> 01:02:50,000
And planning and building. Well, why would we have ever had a budget like that?

632
01:02:52,560 --> 01:03:00,500
Maybe I can help. This is somewhat a comparison of apples and oranges. First of all,

633
01:03:00,880 --> 01:03:06,620
the original budget number wasn't one million six. The original budget number was 2.5 million

634
01:03:06,620 --> 01:03:12,760
up there at the top. The number that's shown there now is the adjusted number after the

635
01:03:12,760 --> 01:03:17,280
$890,000 reduction is put in place.

636
01:03:19,200 --> 01:03:25,280
The fees under license is in permits just to go to the building department, but the expenditure

637
01:03:25,280 --> 01:03:29,500
that they show is the combination of the planning department and the building department.

638
01:03:29,980 --> 01:03:35,820
The planning department, a large percentage of the planning department, is not recoverable

639
01:03:35,820 --> 01:03:42,740
through fees because what the planning department does has to do with general governmental

640
01:03:42,740 --> 01:03:48,740
functional functions as opposed to specific projects we waited to individual projects.

641
01:03:49,080 --> 01:03:51,560
So I think it's the overhead, it's what you're seeing.

642
01:03:52,160 --> 01:03:56,900
It also, yes, it definitely includes the overhead as well.

643
01:03:57,760 --> 01:04:08,400
Just to correct a statement, the FIC never passed a motion recommending that the

644
01:04:08,400 --> 01:04:17,520
be reduced. We basically suggested that the fees were being charged were excessive and needed

645
01:04:17,520 --> 01:04:25,800
to be investigated. And looking at the detail associated with this report, if you look at the

646
01:04:25,800 --> 01:04:32,580
trial balance, the NEP fees and basically disappeared from what they were the prior year. You

647
01:04:32,580 --> 01:04:37,700
won't see it here on the schedule. This is if you look at the trial balance. So the town has made

648
01:04:37,700 --> 01:04:44,120
some changes to the way in which they charge their fees, they haven't disclosed those changes

649
01:04:44,120 --> 01:04:52,900
that they've made. So it's impossible to evaluate them. As to why they have produced the

650
01:04:52,900 --> 01:04:59,920
reduction that they have, but I take exception to the comment that the reason why the total fees

651
01:04:59,920 --> 01:05:07,560
have gone down is because the change in the number of permits is 297 to 340. I believe the

652
01:05:07,560 --> 01:05:16,540
reasonable reason for the reduction in the fees is because the town has made a change to its fee policy, which it has not disclosed to the public.

653
01:05:18,460 --> 01:05:28,200
Okay, maybe we can, but okay, so the first issue is, when we went to the council last year, we explained that we were going to only collect one of the two fees,

654
01:05:28,200 --> 01:05:30,040
any P versus building permit.

655
01:05:31,280 --> 01:05:33,760
And so doing, we thought that that would might be a stop gap.

656
01:05:33,940 --> 01:05:39,400
We weren't sure if that was going to be too much of a reduction in fees or if it might

657
01:05:39,400 --> 01:05:40,860
be the right reduction.

658
01:05:41,120 --> 01:05:42,020
We had no basis.

659
01:05:42,800 --> 01:05:46,900
We took a educated guess based on some analysis we did with our consultant.

660
01:05:48,120 --> 01:05:53,660
So we started implementing that late last year and for that reason and for the reason

661
01:05:53,660 --> 01:05:59,180
that we've seen a reduction in number of permits, the revenues have gone down.

662
01:05:59,640 --> 01:06:04,840
To be clear, the FIC was very adamant that we were double collecting.

663
01:06:05,940 --> 01:06:12,630
And so we were also trying to ensure that the council understood that there was no,

664
01:06:12,630 --> 01:06:15,610
there was no basis to claim that we were double collecting.

665
01:06:15,690 --> 01:06:19,750
We were collecting fees based on the adopted fee schedule.

666
01:06:19,750 --> 01:06:28,710
And so when we stopped collecting one of the two building permit slash MEP fees, we saw a reduction in our revenues.

667
01:06:29,070 --> 01:06:37,670
And so the point that we're trying to make is that now revenues are exceeding expenditures in that one line item.

668
01:06:39,030 --> 01:06:41,230
So this is going to take my recollection.

669
01:06:41,790 --> 01:06:47,770
I just I believe the discussion and maybe there was another discussion that I wasn't there for.

670
01:06:47,770 --> 01:06:54,770
was that we were having trouble matching up the fees from a project.

671
01:06:55,210 --> 01:06:58,470
The actual fees for our project versus what?

672
01:06:59,490 --> 01:07:02,190
The applicant had paid.

673
01:07:02,890 --> 01:07:09,070
And it was difficult to, depending upon where they were in the cycle of the project,

674
01:07:10,850 --> 01:07:15,710
to know whether we had collected enough or not.

675
01:07:17,190 --> 01:07:21,830
That's not recall. Is that, is there something else that I missed?

676
01:07:22,510 --> 01:07:31,770
Well, the discussion was preparing the fees that were collected in 2021 to the freeze

677
01:07:31,770 --> 01:07:37,790
that were collected prior to that. And we saw an increase in revenues in that one, whatever,

678
01:07:37,790 --> 01:07:48,690
18-month period, and the thought was, it was articulated to us and to the council, was that

679
01:07:48,690 --> 01:07:51,210
we've started double collecting in fees.

680
01:07:51,810 --> 01:07:56,790
What we tried to articulate is that we weren't double collecting the fees.

681
01:07:57,010 --> 01:08:02,410
We really needed to make a better understanding of what our expenses were, to ensure that

682
01:08:02,410 --> 01:08:06,350
we had an understanding of how much we might have been over collecting.

683
01:08:06,350 --> 01:08:14,530
But as I've stated last year and I'll continue to state, building permit fees are not something that you can correct year over year.

684
01:08:15,010 --> 01:08:21,430
It's something that you have to take a long view for. It's like driving a car, you have to look a quarter mile out. You can't look right in front of you.

685
01:08:21,810 --> 01:08:30,470
And so what we're trying to explain, which we knew would happen, is that by correcting the fees too quickly, that you would get an over correction.

686
01:08:30,470 --> 01:08:33,830
And so, we're seeing that oral correction now.

687
01:08:34,070 --> 01:08:37,890
We reduce the fees by half, and now we're seeing a reduction

688
01:08:37,890 --> 01:08:40,650
that is causing our revenues to exceed,

689
01:08:40,790 --> 01:08:43,210
I mean, our expenditures to exceed our revenues.

690
01:08:43,770 --> 01:08:45,410
So this is going to have to be corrected,

691
01:08:45,650 --> 01:08:47,570
but we don't know exactly how much to correct it

692
01:08:47,570 --> 01:08:49,650
until we do a full cost of service study.

693
01:08:50,230 --> 01:08:52,710
So we're kind of chasing our tail as what I'm trying to say.

694
01:08:52,890 --> 01:08:56,970
And so I want to encourage the FIC to not be too reactive

695
01:08:56,970 --> 01:08:59,270
when we see situations like this,

696
01:08:59,270 --> 01:09:06,170
because this is the nature of this type of a revenue stream, it's very volatile, and we can't

697
01:09:06,170 --> 01:09:11,470
base corrections every year. It doesn't work that way. We have to base it on a five-year rolling

698
01:09:11,470 --> 01:09:17,770
average. And this is exactly what happens when you try to correct after one year of revenues.

699
01:09:22,170 --> 01:09:34,550
Anyways, nothing on this page shows that your expenditures for building exceeds the revenue

700
01:09:34,550 --> 01:09:35,650
that you've received.

701
01:09:36,870 --> 01:09:40,450
The wide out in that you're pointing to is not the line item for building.

702
01:09:40,690 --> 01:09:44,710
It is the line item for a combination of building and planning.

703
01:09:44,710 --> 01:09:56,890
So Serena can pull out the line items that represent the cost for the building department and compare that to the revenue that the town is currently receiving.

704
01:09:57,530 --> 01:10:00,890
But nothing on this page allows you to make that comparison.

705
01:10:02,790 --> 01:10:05,130
As far as the expenditures are concerned,

706
01:10:05,130 --> 01:10:09,930
I take exception to the comments that the city manager is made.

707
01:10:10,290 --> 01:10:18,870
I don't believe there are accurate and represent the discussion that took place

708
01:10:18,870 --> 01:10:23,190
or the results that are being shown at this point in time.

709
01:10:23,910 --> 01:10:25,390
What's continued on?

710
01:10:25,830 --> 01:10:28,490
Anyone else have any questions or Serena?

711
01:10:28,710 --> 01:10:29,790
Have you finished your presentation?

712
01:10:31,130 --> 01:10:32,770
a couple more pages,

713
01:10:34,970 --> 01:10:39,310
so, you know, I did want to review the sewer briefly,

714
01:10:41,490 --> 01:10:51,430
you know, the sewer assessment normally we get it in January and so that's why you don't see anything as received currently here today.

715
01:10:51,430 --> 01:11:03,470
The sewer connections are not as much as last year, so we have less connections.

716
01:11:04,470 --> 01:11:10,530
And then of course, use of money and property is represents the interest.

717
01:11:11,710 --> 01:11:25,450
As I once said before, the operating expenses for sewer are normally, you know, the timing of the invoices and capital expenditures also.

718
01:11:26,370 --> 01:11:30,810
We did do a little bit more expense details for sewer.

719
01:11:30,810 --> 01:11:55,950
The personnel cost, we finally are fully staffed in that area and so they're close to the 50% and then the contract services definitely is the timing difference of the invoices received along with the professional services.

720
01:11:57,470 --> 01:12:10,190
operations is very consistent and then the allocation out. Also, just a brief overview of the capital funds

721
01:12:10,850 --> 01:12:18,530
of where we're at versus the budget. Just interject a real quick question here.

722
01:12:18,730 --> 01:12:24,310
You know, I read your weekly report. There were a couple of SSOs last week that you announced.

723
01:12:24,310 --> 01:12:31,650
Is that, what is the, what's your best guess as to what how much cost is involved in dealing with those?

724
01:12:32,050 --> 01:12:39,730
There was one SSO and I think the cost came in. We're taking it to Council on the 16th.

725
01:12:39,730 --> 01:12:42,770
We have a contract and not exceed.

726
01:12:43,510 --> 01:12:47,090
I think it's 65,000 with a 20.

727
01:12:47,670 --> 01:12:53,750
I think it's 65,000 plus a $20,000 contingency.

728
01:12:53,750 --> 01:13:03,190
Yeah, so we went out to bed, we had three, three responses, or one, two responses and one no response.

729
01:13:04,610 --> 01:13:09,850
So that work is concluding and we should have it wrapped up in the next day or so.

730
01:13:11,070 --> 01:13:11,950
Is that storm related?

731
01:13:13,070 --> 01:13:13,990
It was.

732
01:13:14,150 --> 01:13:20,310
So it's possible that some reimbursement of those costs is available through this contingent federal funding.

733
01:13:20,670 --> 01:13:21,210
Correct.

734
01:13:21,210 --> 01:13:24,530
possible. Thank you.

735
01:13:27,610 --> 01:13:36,190
Okay. So that that concludes my presentation. So let me just again understand here.

736
01:13:38,370 --> 01:13:46,170
This is just where we're deciding to use some of the capital funds that we have we're going to use more

737
01:13:46,170 --> 01:13:52,790
for funds from a capital town, then we're going to get in,

738
01:13:53,250 --> 01:13:55,430
because you're spending as so much greater than here.

739
01:13:56,110 --> 01:13:56,150
Correct.

740
01:13:57,670 --> 01:14:04,130
So, so for, let's see, like, I think maybe the street,

741
01:14:04,130 --> 01:14:09,450
the street revenues, no, we haven't gotten all of that in.

742
01:14:09,590 --> 01:14:12,590
We haven't gotten all of the revenue in yet.

743
01:14:12,590 --> 01:14:21,370
and some of the revenue is based on reimbursement and then also you see is this still

744
01:14:21,370 --> 01:14:26,010
one specifically you're talking about the street where we only received 23 and then we

745
01:14:26,010 --> 01:14:36,750
spent 1.8 right yeah so that's part of it is the the timing of the receipts up when

746
01:14:36,750 --> 01:14:43,770
receive the money and also in addition, we do transfer from the general fund into the

747
01:14:43,770 --> 01:14:48,670
portion to the street fund, and we don't normally do it until the end of the foot.

748
01:14:48,670 --> 01:14:52,790
Even if you just looked at your budget, your revenue was budgeted to be a million

749
01:14:52,790 --> 01:14:56,390
over a million and you're expanding for 0.3.

750
01:14:58,370 --> 01:14:59,970
Well, now, um...

751
01:15:00,000 --> 01:15:22,720
While that's in for the budget correct. But some of this has to do with transfers that we would normally do. And if you go back to the budget, there are transfers that are in the original or initial budget to accommodate these expenditures.

752
01:15:22,720 --> 01:15:30,520
Okay. But Serena, this season isn't there also, you spoke of a timing issue where projects

753
01:15:30,520 --> 01:15:36,460
we've started before and those expenses were now being realized in this fiscal year.

754
01:15:36,460 --> 01:15:40,780
Correct. And it may have been in the prior budget. Correct.

755
01:15:41,180 --> 01:15:46,820
I mean, we didn't realize those expenses. Is that the way we should think about that?

756
01:15:46,820 --> 01:15:51,820
And if you look, let me go back to the first page.

757
01:15:53,520 --> 01:15:55,680
Let me, let me do some of that.

758
01:15:55,780 --> 01:15:58,860
And you could see here, who is that Cheryl?

759
01:15:59,460 --> 01:16:02,140
So you have the fund balance here.

760
01:16:02,360 --> 01:16:04,120
So I think that was the streets.

761
01:16:04,620 --> 01:16:09,380
So you have the fund balance of 745,000 to start with.

762
01:16:09,700 --> 01:16:10,840
We've only received 203.

763
01:16:11,580 --> 01:16:14,940
We expect to receive more by the end of the year.

764
01:16:14,940 --> 01:16:23,940
And then we would also, there would be a transfer from the, um, from the general fund into the street fund.

765
01:16:24,980 --> 01:16:27,220
To accommodate the full expenditure.

766
01:16:28,640 --> 01:16:28,660
Okay.

767
01:16:29,420 --> 01:16:39,940
Does that make sense? I think this is a better chart to look at when you're looking when you're going to be using the fund balance, especially for these capital funds.

768
01:16:40,740 --> 01:16:41,060
Okay.

769
01:16:42,280 --> 01:16:48,340
That was the rate I just to be sure on the since you talked about this street find if I could ask the question.

770
01:16:48,720 --> 01:16:57,240
The budget the budget of expenditure for this year was $500,000 less than the year expenditure just through the first half of this year.

771
01:16:58,220 --> 01:17:05,240
Why why is the expenditure of $500,000 more and just so the year.

772
01:17:06,120 --> 01:17:09,440
I don't think it's exactly 500,000 last year.

773
01:17:09,440 --> 01:17:14,740
So if you go, if you go to the page where you showed what the budgeted expenditures are,

774
01:17:15,200 --> 01:17:15,480
yeah.

775
01:17:16,640 --> 01:17:20,060
The budget expenditure is 1,356.

776
01:17:20,560 --> 01:17:25,120
You've already spent 1,836, that's a half a million dollars difference.

777
01:17:25,560 --> 01:17:27,100
We're only a half way through the year.

778
01:17:27,360 --> 01:17:33,920
Could you explain why we're half a million dollars over budget and expenditure in the first half of the year?

779
01:17:34,780 --> 01:17:37,160
So as I don't know if everybody knows,

780
01:17:37,160 --> 01:17:58,280
Normally, the street projects are always conducted during the dry months, and so it started from probably June, which then, as what Susan has said, the expenses are being realized in this fiscal year.

781
01:17:58,280 --> 01:18:18,240
And from the last fiscal year, there was a, I think there was a 400,000, 500,000 dollar savings from the previous street project that got rolled into this year.

782
01:18:18,240 --> 01:18:30,100
And so that's why they extended the number of streets that they were going to work on, and that's why you see the additional funding.

783
01:18:30,260 --> 01:18:40,220
Pretty much that is over that project will be over, and then they will be starting the next one closer to the end of the fiscal year.

784
01:18:40,220 --> 01:18:49,580
So we won't, we don't see any more funds being, or any more expenditures, expense for the street project.

785
01:18:50,200 --> 01:18:54,500
It would be, because they mostly started towards the end of the fiscal year.

786
01:18:55,080 --> 01:19:05,160
So it's like a carrier from the prior year, but, and so I guess it would be good to somehow see that because when you look at, when you look at these,

787
01:19:05,160 --> 01:19:09,160
I mean, it's like, to me, it just looks like

788
01:19:10,160 --> 01:19:13,980
Goblin, you know, I'm sitting here going, how do you?

789
01:19:15,890 --> 01:19:22,010
Well, in a, you know, without seeing the bigger picture, it's hard to analyze these numbers.

790
01:19:25,310 --> 01:19:34,650
So, is there a location that talks that shows like probably a rolling three years or four years because of the way projects get down?

791
01:19:34,650 --> 01:19:44,450
And then when they get built is there is there a document like that that has capital projects of this venture where we have a rolling view.

792
01:19:44,450 --> 01:19:48,650
Perfect questions isn't in the budget book.

793
01:19:48,910 --> 01:19:59,650
In the budget book for I'm looking at it right now in the budget books we do a five year capital plan and in there it shows.

794
01:19:59,650 --> 01:20:12,030
It very detailed the streets that we are going to be working on and the length and feet and the type of work that we're going to be doing.

795
01:20:12,590 --> 01:20:19,650
And so in this budget book, this year's budget book, it's about 6.8 miles that

796
01:20:19,650 --> 01:20:31,650
excuse me that they have projected of working on this fiscal year. So last year there was about

797
01:20:33,550 --> 01:20:47,430
$407,000 from the prior project that they that they didn't use or that they had as a savings.

798
01:20:50,130 --> 01:20:53,650
Well, actual savings are actually timing disparities.

799
01:20:53,730 --> 01:20:55,750
Um, actual savings.

800
01:20:59,780 --> 01:21:01,540
So I understand.

801
01:21:02,520 --> 01:21:03,280
Um, sorry.

802
01:21:03,540 --> 01:21:06,080
So we would still be short.

803
01:21:06,360 --> 01:21:10,160
Um, and from what Allen's point is.

804
01:21:10,640 --> 01:21:14,140
So we took the 407 with what was budgeted.

805
01:21:14,140 --> 01:21:28,720
1.3, 1.4 takes it to about 1.7, 1. close to 1.8, so the general fund will support the remaining

806
01:21:28,720 --> 01:21:39,320
and I believe in the general fund. Coming from the general fund is about 600,000. That

807
01:21:39,320 --> 01:21:45,860
support the street project. But you will need more than that. You will need to transfer more

808
01:21:45,860 --> 01:21:51,980
than that to get the budget to get the budget to be correct. It would be the four out right. It would

809
01:21:51,980 --> 01:21:59,980
be the 407 from last year because it's still sitting in the fund. The 407 is still sitting in the fund.

810
01:22:00,400 --> 01:22:07,040
But you're correct, Alan. We probably will have to transfer more and we'll see that at the year end

811
01:22:07,040 --> 01:22:13,820
when you, when we do or if I don't audit, let me just ask this question, it's the same

812
01:22:13,820 --> 01:22:19,020
question a little bit differently. Serena, are you proposing to ask council to increase the

813
01:22:19,020 --> 01:22:28,500
budget anywhere and, and if so, what would those items be? So as I stated in these previous

814
01:22:28,500 --> 01:22:30,080
in this chart,

815
01:22:32,420 --> 01:22:40,940
this is what I've asked, this is what we're, this is what staff is proposing and

816
01:22:40,940 --> 01:22:56,560
increases aside from the 200,000 from the disaster contingency into the general fund, which we don't

817
01:22:56,560 --> 01:23:04,180
here. But we have we're going to put that in our staff report. So we want to also in addition to what I just showed you here.

818
01:23:05,280 --> 01:23:14,820
We also are going to request 200,000 from the disaster contingency into the general fund.

819
01:23:17,610 --> 01:23:19,750
The cost of the street repairs.

820
01:23:20,990 --> 01:23:25,910
Well, it would be for the storm for the storm fees.

821
01:23:25,910 --> 01:23:34,410
And the storm charges that we just endured in this law, in January and in the December.

822
01:23:35,790 --> 01:23:44,610
And so I'm just, and how are those storm charges were they for repair of streets or were they for

823
01:23:44,610 --> 01:23:46,430
of streets,

824
01:23:48,670 --> 01:23:59,110
staff time, and, you know, we get the FEMA reimbursement, we will definitely put the money back into the disaster contingency.

825
01:24:00,390 --> 01:24:12,770
And so, just a question, are you taking it out of the disaster contingency for a, for FEMA reasons as opposed to just taking it out of the unassigned fund balance?

826
01:24:12,770 --> 01:24:15,470
I mean, there's eight million dollars on a signed fund balance.

827
01:24:16,470 --> 01:24:17,650
I'm just trying to understand what the law...

828
01:24:17,650 --> 01:24:19,050
Yeah, we could do it.

829
01:24:19,230 --> 01:24:21,550
I mean, we could do it either way.

830
01:24:22,290 --> 01:24:25,170
Even on a signed or disaster contingency,

831
01:24:25,410 --> 01:24:31,850
that's what the disaster contingency is for for, you know, disaster recovery.

832
01:24:32,250 --> 01:24:35,770
I mean, I don't think it makes it their friends,

833
01:24:36,210 --> 01:24:38,090
but I guess...

834
01:24:38,090 --> 01:24:39,990
Well, I think what we're trying to understand

835
01:24:39,990 --> 01:24:53,810
was the the 200,000 was it was that all actually for expenses related to the storms,

836
01:24:54,370 --> 01:25:00,250
where the expenses related to the storm has nothing to do with the street project itself.

837
01:25:00,750 --> 01:25:09,290
This is money that has is related to the storm specifically. And so and so the money you need

838
01:25:09,290 --> 01:25:15,270
for the street project, we're showing up here.

839
01:25:17,080 --> 01:25:19,520
No, you're asking for, or are you not asking?

840
01:25:19,520 --> 01:25:20,600
No, I'm not asking.

841
01:25:21,640 --> 01:25:26,160
It's for, I guess the confusion is because I'm using street.

842
01:25:28,020 --> 01:25:34,540
So, the, the, the, we opened the ELC during the storm.

843
01:25:35,180 --> 01:25:37,800
And there were, there was a lot of damage.

844
01:25:37,800 --> 01:25:42,840
There was two sinkholes plus a lot of other damage throughout the town.

845
01:25:43,540 --> 01:25:53,460
And so we were requesting for those, for those to get reimbursed from FEMA.

846
01:25:54,500 --> 01:25:56,340
Okay, so that's all I'm asking you.

847
01:25:56,520 --> 01:25:57,020
Oh, I'll say.

848
01:25:57,760 --> 01:26:04,000
Is the amount that were over in our street budget related to those costs.

849
01:26:04,000 --> 01:26:17,240
And that's why we're over from the carry forward or is it just because what we're doing on the streets costs more than we originally budget it costs more than what we originally budget it.

850
01:26:17,480 --> 01:26:17,960
Great. Thank you.

851
01:26:18,000 --> 01:26:19,440
What I yeah.

852
01:26:19,980 --> 01:26:29,200
So the disaster contingency and the ask for that has nothing to do with the street projects per se.

853
01:26:30,480 --> 01:26:36,120
But you're not requesting a change to the street much in this, you know,

854
01:26:38,300 --> 01:26:38,300
no.

855
01:26:39,060 --> 01:26:45,300
What may be confusing, Cheryl, and you're not to probably the only one that's confused

856
01:26:45,300 --> 01:26:56,840
by it, is that this is really a picture of what things looked like as of December 31st, 2022.

857
01:26:56,840 --> 01:27:24,660
Okay, she serena is actually not showing you what the difference in the year will be, at the end of the year, as a result of these changes and any other changes, the only, the only ones that she's asked for is the reduction in the revenue to recognize the fact that they are now collecting less revenue from the building and planning.

858
01:27:24,660 --> 01:27:40,540
That's the $898,000 reduction and a reweighted reduction in the expenditures associated with performing building permits because they state that the activity level is over.

859
01:27:40,940 --> 01:27:53,400
Those are the only, and that's just one other $50,000 change. Those are the only changes that they're asking for at this time. Now what they haven't told you is there's all these other numbers in the budget, which

860
01:27:53,400 --> 01:27:59,920
But they may not spend, or they may not receive, they're not asking to, they're not informing

861
01:27:59,920 --> 01:28:02,540
the council about those particular changes.

862
01:28:02,920 --> 01:28:07,100
These are the ones that they're asking the council, or making the council aware of it.

863
01:28:07,100 --> 01:28:11,960
They're only asking for a couple of mid-year adjustments, and it's not, they're not really

864
01:28:11,960 --> 01:28:13,040
looking at the entire budget.

865
01:28:13,320 --> 01:28:15,900
It's just the ones they feel they need an adjustment to.

866
01:28:16,040 --> 01:28:17,580
That is correct.

867
01:28:18,040 --> 01:28:18,260
Correct.

868
01:28:18,260 --> 01:28:18,400
Okay.

869
01:28:18,620 --> 01:28:18,880
I'm sorry.

870
01:28:19,380 --> 01:28:19,560
Yeah.

871
01:28:19,680 --> 01:28:20,500
Thank you, Alan.

872
01:28:21,760 --> 01:28:25,280
Okay, are there any other questions on this item?

873
01:28:26,100 --> 01:28:26,160
No.

874
01:28:27,460 --> 01:28:27,860
All right.

875
01:28:28,500 --> 01:28:30,340
So because of your timing,

876
01:28:31,080 --> 01:28:36,320
Cheryl, I'd like to move on to the committee code of conduct discussion.

877
01:28:37,540 --> 01:28:41,960
Let me see if I can share mine.

878
01:28:43,460 --> 01:28:45,220
Let's see if I can share.

879
01:28:51,690 --> 01:28:53,230
I want to share this door.

880
01:28:56,460 --> 01:29:00,160
Can you see this on your screen now?

881
01:29:00,480 --> 01:29:00,740
Yes.

882
01:29:03,200 --> 01:29:12,860
So, as you know, back in October, the staff recommended a change to the code of conduct and

883
01:29:12,860 --> 01:29:15,820
the change in the conflict of interest.

884
01:29:15,820 --> 01:29:42,920
The conflict of interest is really the form 700 and the requirement for five committees, members of five committees, which the FIC is one, to fill out forms 700, which is the economic interest form that the state of California has for people who have decision making authority or are elected public officials.

885
01:29:44,000 --> 01:29:59,980
When that information was proposed, a number of committee chairs got together and wrote a letter to the council recommending that those two changes not be made, the council is good.

886
01:30:00,000 --> 01:30:20,660
A. There action on those and in January of this year, reverse their position with regards to the conflict of interest designation, and eliminated the need for committee members to fill out form 700. So the form 700 requirement has now been removed.

887
01:30:21,860 --> 01:30:33,300
As far as the Code of Conduct is concerned, the Code of Conduct has been, the Council did not take action other than to first

888
01:30:33,300 --> 01:31:00,780
put up a, or ask the staff to put up a website to solicit input from the community, and then at the most recent January 24th meeting established and ad hoc committee made up of Council member Tyson and Council member Schmidt to do further investigation with regards to what action

889
01:31:00,780 --> 01:31:04,240
the council wishes to take with regards to the code of conduct.

890
01:31:06,880 --> 01:31:20,200
In December, last December, when this was going on, a number of the chairs of the various committees got together and had a meeting and had a discussion about the code of conduct.

891
01:31:21,160 --> 01:31:26,920
And see, did you see a change on your screen that now says standing committees?

892
01:31:27,940 --> 01:31:43,540
Okay. At that meeting of the committee chairs, we put this presentation together and it had to do with what the committee's chairs felt about the changes in proposed to the code of conduct.

893
01:31:44,640 --> 01:31:50,240
And I'm not going to go through it because it was part of the presentation that you received.

894
01:31:50,240 --> 01:32:07,700
But there are a number of proposed changes to the Code of Conduct that the committee chairs did not feel were advantageous or beneficial or would improve the efficiency and output of the committees.

895
01:32:08,560 --> 01:32:14,460
And at the end of the meeting, the committee chairs drafted a statement.

896
01:32:15,520 --> 01:32:17,840
And the statement is right here.

897
01:32:18,140 --> 01:32:20,220
We consider the draft code of conduct data

898
01:32:20,220 --> 01:32:22,700
at October 2022 to be unnecessary,

899
01:32:22,740 --> 01:32:26,220
ill-advised, and a major impediment to the efficiency

900
01:32:26,220 --> 01:32:28,220
and effectiveness of committees

901
01:32:28,220 --> 01:32:30,540
by dedicated town volunteers,

902
01:32:30,980 --> 01:32:33,880
resturongally in Samarra, we reject the premise intent

903
01:32:33,880 --> 01:32:35,500
and language of this document.

904
01:32:36,400 --> 01:32:38,500
The second paragraph is no longer applicable.

905
01:32:38,740 --> 01:32:40,740
It had to do with the form 700.

906
01:32:40,740 --> 01:32:44,120
And as I said, the town has reversed their position

907
01:32:44,120 --> 01:32:48,600
and with regards to the form, the need for the Form 700 or committee members.

908
01:32:50,380 --> 01:32:56,740
So the committee chairs agreed in their meeting that they would take this statement to their committees,

909
01:32:57,580 --> 01:33:02,800
and see if their committees would be willing to adopt this statement,

910
01:33:03,600 --> 01:33:10,960
to advise the council with regards to their feelings about the proposed changes to the code of conduct.

911
01:33:10,960 --> 01:33:24,940
So that is the reason why I've put this before you today to see whether or not you would be interested in supporting this statement and forwarding it to the council.

912
01:33:26,360 --> 01:33:35,560
So if it's all right, I'd like to stop sharing so that we can see each other and have a discussion about that. Is that all right?

913
01:33:39,020 --> 01:33:45,560
Well, I will say first thing Alan, I'm really happy to hear that they've eliminated the need for the form 700.

914
01:33:47,800 --> 01:33:51,380
I would just immediately resign because I thought it was such overreach.

915
01:33:52,000 --> 01:33:54,160
So it's good to not have that there.

916
01:33:56,400 --> 01:33:57,380
Right. Thank you. Thank you.

917
01:33:57,540 --> 01:34:00,600
A number of committee members have resigned.

918
01:34:00,700 --> 01:34:05,080
A number committee members said they would resign if the form 700 would stay.

919
01:34:05,080 --> 01:34:09,540
So that's been reversed and we don't need to discuss that any further.

920
01:34:10,560 --> 01:34:18,580
You're, of course, free to make any comments you'd like, but it's not something we need to take action on because the council has already reversed that one.

921
01:34:19,020 --> 01:34:25,780
So the question is, would committee like to endorse the statement with regards to the code of conduct?

922
01:34:27,600 --> 01:34:29,100
I think it makes sense.

923
01:34:29,100 --> 01:34:40,650
I mean, that's certainly, it adds some information for the two council members that are working on this that that's how they're feeling of the committees are and they can add that to their

924
01:34:41,400 --> 01:34:49,820
Hopper and other information and make a decision when they want to come back with, but absolutely makes that makes perfect sense.

925
01:34:53,220 --> 01:35:14,660
So Alan, the thought process here is that we would go back with the view point, this view point on the code of conduct, and then sit down and negotiate kind of what the changes both parties could agree with, is that thought process on what's going to happen here?

926
01:35:15,320 --> 01:35:18,780
Well, the next step is entirely up to the council.

927
01:35:18,940 --> 01:35:23,400
The council has formed an ad hoc committee made of the two members that I've mentioned,

928
01:35:23,960 --> 01:35:33,620
and it's up to them to decide how they wish to go and investigate and decide what changes they would like to make.

929
01:35:33,660 --> 01:35:41,180
It is entirely up to them. It's an ad hoc committee, so it's not done in the public pur view.

930
01:35:41,180 --> 01:35:45,260
They can reach out individually, they can hold meetings.

931
01:35:47,500 --> 01:35:50,820
We haven't been told what they intend to do.

932
01:35:51,300 --> 01:35:57,080
As Shell has pointed out, this is intended to try and indicate to that committee.

933
01:35:58,940 --> 01:36:01,060
The various committees, feelings about this.

934
01:36:01,420 --> 01:36:05,240
I should point out that two committees have already endorsed this statement.

935
01:36:06,400 --> 01:36:12,040
And other committees either have been asked or will we ask to endorse the statement?

936
01:36:14,480 --> 01:36:18,900
Okay. All right, I support it.

937
01:36:19,220 --> 01:36:22,380
I moved that we vote to adopt that.

938
01:36:23,800 --> 01:36:25,400
Show moves is there a second?

939
01:36:26,140 --> 01:36:26,440
Second.

940
01:36:28,020 --> 01:36:29,780
Choose Mason's seconds.

941
01:36:30,060 --> 01:36:32,400
Any further discussion on the matter?

942
01:36:33,260 --> 01:36:41,420
Would anyone on this on the call like to make any comments or add any additions at this point in time?

943
01:36:43,080 --> 01:36:50,280
I would just say that this committee is free to make this motion and I'm not trying to suggest that you don't make the motion.

944
01:36:51,400 --> 01:37:01,020
But I think there is reason why this code of conduct was introduced in the first place and I think it would.

945
01:37:01,020 --> 01:37:08,360
It would be in everybody's best interest to hear what the concerns are and how we can come together to resolve some of the concerns.

946
01:37:09,700 --> 01:37:18,660
A lot of the purpose behind the Code of Conduct and the revised standing resolution was to provide more voice to the committees and more support to the committees,

947
01:37:19,160 --> 01:37:22,160
but also provide staff with the ability to support the committees.

948
01:37:23,000 --> 01:37:29,660
So, you know, we're trying to find a balance and the way that we can continue to support

949
01:37:29,660 --> 01:37:34,600
the committees, but at the same time, not overwhelm staff.

950
01:37:36,280 --> 01:37:41,630
And so we just need to spend more time hearing from the committees what we can do to find

951
01:37:41,630 --> 01:37:42,290
that compromise.

952
01:37:42,570 --> 01:37:48,470
Because right now the balance is tipped and we're trying to bring some attention to it and

953
01:37:48,470 --> 01:37:52,370
we need to help and the support of the committees to get to a better balancing point.

954
01:37:52,370 --> 01:38:00,170
You know, when we do out outgoing interviews, a staff, the first thing that they say is that the work load is overwhelming.

955
01:38:02,350 --> 01:38:07,190
So we just lost our planning director and went out going interview.

956
01:38:07,770 --> 01:38:08,870
This was again a comment.

957
01:38:09,610 --> 01:38:12,670
It's an extraordinary amount of work for such a small town.

958
01:38:13,550 --> 01:38:22,350
So, you know, I just want the committee to understand that this isn't a...

959
01:38:22,350 --> 01:38:24,090
to say that the committees aren't valued,

960
01:38:24,750 --> 01:38:26,690
we just have to find a better way to work together

961
01:38:26,690 --> 01:38:28,610
so that we can work in tandem,

962
01:38:28,950 --> 01:38:32,730
work in unison, work on the same goals

963
01:38:32,730 --> 01:38:36,190
objectives rather than work in opposition to each other.

964
01:38:36,490 --> 01:38:41,350
Because it's putting staff in a very difficult situation

965
01:38:41,350 --> 01:38:42,870
and I don't know how else to say that.

966
01:38:43,450 --> 01:38:46,650
So until we have a chance to look at all the issues and concerns,

967
01:38:47,370 --> 01:38:49,330
I think it's a little premature in my opinion,

968
01:38:49,330 --> 01:38:55,330
to vote on, similarly, rejecting the standing resolution, but again, that is entirely up to the

969
01:38:55,330 --> 01:39:00,050
committees to decide. I'll tell you what we will be doing is we're doing another

970
01:39:01,970 --> 01:39:06,190
roundtable discussion with all the committees, of all the committee chairs and co-chairs,

971
01:39:06,890 --> 01:39:11,790
and we'll share some of the challenges that we're having, and we'll hear what's working well,

972
01:39:11,830 --> 01:39:15,670
what isn't working well, and then we'll take another crack with the ad hoc committee to see

973
01:39:15,670 --> 01:39:16,950
we can find and compromise.

974
01:39:19,720 --> 01:39:23,960
I would say that that's a great idea and and I think that the feeling

975
01:39:23,960 --> 01:39:31,420
about the whole process was premature is or I don't think this hit them there's so much

976
01:39:31,420 --> 01:39:40,320
cooperation between the volunteers and the staff properly managed that process is perfect and

977
01:39:40,320 --> 01:39:47,680
and will help staff, and I, we, it's been frustrating for us, air of FIC, we watched for

978
01:39:47,680 --> 01:39:54,800
for 15 years, enormous amount of staff time wasted, and a lot of staff time has been wasted,

979
01:39:55,360 --> 01:40:03,020
not utilizing the volunteers properly. So I think that, I appreciate that from your perspective,

980
01:40:03,020 --> 01:40:11,620
you this kind of missed the mark, but certainly the initial proposal here would form 700 and

981
01:40:11,620 --> 01:40:18,640
all that. That was an on-mark either. So it's excellent to get a here Peter that going back to

982
01:40:18,640 --> 01:40:25,760
a drawing mark, come up with something that actually will work and make everybody's day easier.

983
01:40:26,420 --> 01:40:32,380
And it's super important that we make sure that we listen to staff and help staff. That's been

984
01:40:32,380 --> 01:40:38,060
an ongoing thing for to take you and a half, I'm being involved in, finally we can say,

985
01:40:38,160 --> 01:40:43,420
we actually have management in this town. So enormous progress been made in the year here.

986
01:40:43,920 --> 01:40:49,540
So let's, let's just keep at it and and go about it in a very transparent way that it would be

987
01:40:49,540 --> 01:40:56,080
perfect. Thank you guys. And I know Cheryl's press for time. I'll just make a couple of comments.

988
01:40:56,080 --> 01:41:11,880
So I think all we're trying to do is say exactly what Peter has said, we want to find a solution that is best for the town staff and beneficial for the committees and the effectiveness of the organization.

989
01:41:11,880 --> 01:41:15,760
And we just think that what we started with isn't the good starting point.

990
01:41:16,260 --> 01:41:27,400
And we ought to put that one aside, start with a blank piece of paper, and let's sit down together and identify what the real issues are and come up with the real solutions.

991
01:41:28,320 --> 01:41:29,940
And we're all in this together.

992
01:41:30,240 --> 01:41:34,420
We all want the town to be successful and effective and efficient.

993
01:41:34,640 --> 01:41:37,940
We don't want staff to lose to lead.

994
01:41:37,940 --> 01:41:45,720
So, all we're trying to say here is, let's start again in a cooperative stance, spirit in which Peter at Peter has proposed.

995
01:41:46,260 --> 01:41:52,960
So, I'm going to, we've got a motion on the table. We've got a second. I'm going to call the vote at this point in time. Cheryl.

996
01:41:55,300 --> 01:41:56,220
I have seen.

997
01:41:57,580 --> 01:41:57,940
Okay.

998
01:41:58,580 --> 01:41:58,760
Roger.

999
01:41:59,460 --> 01:41:59,800
Thank you.

1000
01:41:59,980 --> 01:42:00,180
I see.

1001
01:42:01,140 --> 01:42:02,300
Sorry. Go ahead and see.

1002
01:42:02,880 --> 01:42:04,420
Cheryl, did you say in your abstain?

1003
01:42:04,660 --> 01:42:04,940
Yes.

1004
01:42:06,720 --> 01:42:07,060
Okay.

1005
01:42:09,960 --> 01:42:14,100
I think I voted for it on December 11th, but I'll vote for it again.

1006
01:42:14,720 --> 01:42:15,860
Okay, Susan?

1007
01:42:16,740 --> 01:42:17,180
Yes.

1008
01:42:17,680 --> 01:42:17,900
Cheryl?

1009
01:42:19,360 --> 01:42:19,740
Yes.

1010
01:42:20,500 --> 01:42:21,220
And I'll vote. Yes.

1011
01:42:21,440 --> 01:42:22,180
Thank you very much.

1012
01:42:22,320 --> 01:42:23,120
The vote is for.

1013
01:42:23,460 --> 01:42:24,200
Oh, we have enough.

1014
01:42:24,260 --> 01:42:26,200
With a corner of one of Stains.

1015
01:42:26,460 --> 01:42:26,700
Since we're.

1016
01:42:27,200 --> 01:42:27,740
The quorum.

1017
01:42:27,800 --> 01:42:30,440
The quorum only counts to have a legal meeting.

1018
01:42:31,040 --> 01:42:32,400
And once you have a legal meeting.

1019
01:42:32,740 --> 01:42:34,320
You know, it's the members that are there.

1020
01:42:34,420 --> 01:42:35,860
You just have to have a simple majority.

1021
01:42:37,000 --> 01:42:41,280
I'm sorry, if you'd like to weigh in on this, I'd be more than happy to have your input about

1022
01:42:49,180 --> 01:42:50,700
it.

1023
01:42:50,700 --> 01:42:52,640
I don't have any input at this time.

1024
01:42:53,140 --> 01:42:53,900
Thank you very much.

1025
01:42:54,060 --> 01:42:57,760
So the vote was four in favor and none against and one at Stenchen.

1026
01:43:01,230 --> 01:43:06,810
Sarah, if you need to, if you need to go, we can, I think we've conducted the majority of the business.

1027
01:43:07,270 --> 01:43:13,490
Alan, can you just cover the changing rules for where we meet before Sheryl leaves?

1028
01:43:13,490 --> 01:43:26,770
Oh yes, Cheryl, the state emergency ends at the end of February and so committees members are required to be in person starting starting with our March meeting.

1029
01:43:28,110 --> 01:43:36,490
The town is going to provide facilities that enables us to have a what do you call it.

1030
01:43:37,450 --> 01:43:54,670
simultaneous in person and Zoom meeting, hybrid meeting, and the public will be able to attend by hybrid meeting, but the committee members, unless they have a valid excuse, have to be in attendance in person in a meeting.

1031
01:43:54,670 --> 01:44:01,170
on it. Great. And as far as we know the next meeting will be March at our regular time in Serena,

1032
01:44:01,670 --> 01:44:07,150
you'll update us as to any additional things you need for us to have on the agenda for that meeting.

1033
01:44:07,770 --> 01:44:15,550
So thank you so much, Cheryl, for being here. Appreciate it. Next is report on time activities of interest.

1034
01:44:16,470 --> 01:44:19,610
Peter, if you'd like to comment on anything, we'd be happy to hear from you.

1035
01:44:20,850 --> 01:44:22,630
Let's see, anything of interest.

1036
01:44:23,110 --> 01:44:33,010
So, obviously we had another rupture in a storm line that we were in the process of completing.

1037
01:44:33,170 --> 01:44:35,610
I think they're just doing the cleanup right now.

1038
01:44:38,850 --> 01:44:45,870
We've got a pretty packed agenda for Thursday, this 16.

1039
01:44:46,730 --> 01:44:48,930
before I go on, I see Deborah's got her hand up.

1040
01:44:49,290 --> 01:44:51,710
Maybe this is pertinent to what I'm talking about.

1041
01:44:51,930 --> 01:44:53,810
I just want to make a note that the meeting

1042
01:44:53,810 --> 01:44:56,150
is technically been adjourned because you're no longer

1043
01:44:56,150 --> 01:44:57,010
have a quorum.

1044
01:44:57,690 --> 01:44:59,970
You can continue discussing but the minute should reflect.

1045
01:45:00,000 --> 01:45:05,780
The meeting adjourned at 547 or whatever time that was, that this is not part of the meeting any longer.

1046
01:45:06,880 --> 01:45:19,580
That's great. Thank you for making that comment. Let me ask you what happens when a member leaves and we, well, let me ask the question differently.

1047
01:45:20,000 --> 01:45:28,580
With respect to reflecting attendance in the minutes, how do you suggest we deal with members coming in and out during the meeting?

1048
01:45:28,580 --> 01:45:45,680
So if I have a council member that comes in late to a council meeting, I make a note in the attendance council member Schmidt arrived at 515 pm if the meeting started at 5 and in the minutes I make a note that council member Schmidt left at 645.

1049
01:45:47,340 --> 01:45:52,880
But technically you wouldn't be doing this because you're meeting technically adjourned three minutes ago when she left.

1050
01:45:53,520 --> 01:45:57,200
So you would have to reflect her absence because the meeting ended because she left.

1051
01:45:57,440 --> 01:45:59,020
You could reflect that if you'd like.

1052
01:46:00,820 --> 01:46:02,880
Okay, so Deborah, one other question for you.

1053
01:46:02,940 --> 01:46:05,480
Should I stop the recording at this point in time?

1054
01:46:05,920 --> 01:46:06,720
I would.

1055
01:46:07,040 --> 01:46:07,920
The meeting is over.

1056
01:46:09,060 --> 01:46:09,600
Okay.

1057
01:46:09,600 --> 01:46:22,760
But we'll continue our discussion because we certainly would like to hear from the city manager and the mayor with regards to activities of interest if they would like to stay around and talk with us about it.

1058
01:46:24,390 --> 01:46:32,550
And Deborah, I don't think that rule is widely understood about the leaving and the coming and the going in the minutes.

1059
01:46:34,030 --> 01:46:43,370
Yeah. Well, part of the standing committee resolution includes parliamentary procedure training, which I'm going to assume that that's not a problem.

1060
01:46:43,370 --> 01:46:56,290
I anticipate that we will offer it to a number of committee members, but right now, you know, I don't have anything scheduled, but I could definitely do parliamentary proceeding procedures for any committee members of like.

1061
01:46:56,650 --> 01:47:12,570
Well, it's not, you know, we haven't followed the procedure for a long time, never followed that procedure, but I, but I have this conversation with a few other committee chairman at this summer 11 meeting and I don't believe they're following it either.

1062
01:47:12,570 --> 01:47:14,230
Well, we can talk about it.

1063
01:47:16,790 --> 01:47:23,010
I'm going to be sending an email to the chair trying to arrange his time for the chairs to meet with the mayor and the city manager.

1064
01:47:23,610 --> 01:47:24,650
We did this last year.

1065
01:47:25,090 --> 01:47:26,770
And that'll be coming up in March or April.

1066
01:47:27,090 --> 01:47:28,670
So I can bring it up at that time.

1067
01:47:29,170 --> 01:47:30,390
Okay, sounds good.

1068
01:47:30,830 --> 01:47:32,710
I'm going to stop recording now.