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Okay, we're going to call this uh
workshop together. Welcome to the city

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of Montlair's city council special
meeting. And um um terms of roll call, u

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I believe uh council member Lopez will
not be here today as city clerk. Okay.

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So, we have four council members
present. And now we have public comment.

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This is an opportunity for members of
the public to address the city council

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regarding the uh special uh meeting of
the council. We have members of the

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public wish address city council. Uh it
doesn't look like anybody's angering the

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audience. So we'll move on.
Supposed to be a joke. Supposed to

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laugh. Come on guys. All right. Okay. So
we'll we'll go down to the presentation.

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And this is the uh 2627 U presentation
of the city of Montlair's Mous Mousing

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Housing Corporation budget. All right,
who's leading off?

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Get started. Good evening, mayor, city
council, city staff, and members of the

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audience, which are also city staff. I'm
here tonight to present the 20 fiscal

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year 2026 27 preliminary budget review.
We'll start with the overview and budget

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process.
This evening's budget workshop provides

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an overview of the proposed fiscal year
202627

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annual budget for the city of Montlair
with focused discussion on the following

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topics. Overview and budget process.
Producing a balanced budget. Revenue and

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appropriations. Unassigned and special
purpose reserve funds. Personnel

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services. General fund special purpose
funds. bonds and debt service. And our

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conclusion,
the fivemonth annual budget development

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process includes the following
significant steps. Finance department

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staff develop and refine revenue
projections. Finance department staff in

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conjunction with departments forecast
personnel requirements. Department heads

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and their staff are provided with prior
year amounts and formats for budgeting

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annual budget requests.
departments prepare their budget

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requests for appropriations.
City manager and finance department meet

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with department heads and staff to
evaluate, modify, and finalize

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department level requests. The proposed
annual budget document is submitted for

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city council review and consideration.
Producing a balanced budget.

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The annual and primary goal related to
budget preparation. produce an operating

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budget where revenues equal or exceed
appropriations and programs and services

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are adequately funded to meet community
and organizational needs and

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requirements. The fiscal year 2026
budget as presented has a net deficiency

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of general fund revenues over general
fund appropriations in the amount of

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$631,544.

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This deficiency in general fund revenues
is driven largely by one a lethargic

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national economy with inflation
demonstrating a progressive rise. Two,

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federal economic, domestic and foreign
policies including tariffs, immigration

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enforcement activities and military
incursions together suppressing global

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economic activity.
three suppress suppressed local economic

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activity and four a decline in consumer
confidence due to the increasing costs

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of goods and services. The deficiency in
general fund revenue over general fund

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appropriations is projected to reduce
the general fund unassigned reserve to

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5.46 million at end of year. At 5.46 46
million. The general fund unassigned

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reserve represents approximately 13.14%
of the general fund operating

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appropriations which is less than the
city council's unassigned reserve ratio

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goal of 25%.
Now we'll discuss revenues for the next

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fiscal year.
So this table one shows uh the current

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year our estimated revenue all funds uh
73,117,557

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revised prior years just over 70
million. This is a change of just over

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three million and that change is
basically due to a uh about two million

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in grant funding to purchase potentially
purchase a a fire truck. General fund

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00:04:32,880 --> 00:04:43,960
operating fund uh current year for 40.9
million revised prior year 40.4 million

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so a slight increase of 553,000

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significant revenue components general
fund 32.6 6 million in combined property

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00:04:50,080 --> 00:04:56,720
sales and use and transactions and use
taxes. This amount includes the

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following estimates.
Just over 15 million in Bradley Burn

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sales tax, 10.9 million in transaction
and use tax revenue related to measure

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L, 2.7 million in transaction and use
tax revenue related to measure F, and

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3.86 million in property tax revenue. Of
the above totals, the following amounts

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are allocated for debt service as
indicated. Debt service on bonds, 2.59

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million for the 2014 lease revenue bond,
2.39 million for the 2021 lease revenue

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bond, and 4.4 million for the 2021
pension obligation bond. Other fiscal

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year 2026 27 general fund revenue
adjustments $210,880

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increase in taxes other than property
sales and transaction and use taxes.

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Overall sales and transactions and use
taxes are projected to show very minimal

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year-over-year increases.
$80,000 decrease in licenses and permits

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due primarily to an expected decrease in
the issuance of building permits.

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$34,600
increase in fines and forfeitures due

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primarily to an increase in parking
citations. $8,500 increase in charges

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for services due primarily to an
increase in reimburse program costs. A

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$12,200 decrease in miscellaneous
revenue due primarily to a decrease in

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reimbured expenditures.
for all other funds. A $79,257

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increase in the section two 2032 road
maintenance re rehabilitation fund due

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primarily to an increase in gas prices.
$95,000 increase in the traffic safety

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fund due primarily to an increase in
parking citations.

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$200,000 decrease in the park
development fund due primarily to a

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current decline in proposed new housing
development in the city.

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$29,445
increase in the public safety fund due

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primarily to an increase in gas prices.
$388,473

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increase in the afterchool program fund
due primarily to assist in covering

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higher costs. $125,000
increase in the economic development

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agency assets fund due primarily to an
increase in redevelopment property tax

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trust fund property taxes. A $550,000
increase in the sewer operating fund due

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primarily to an increase in sewer fees.

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So now we'll talk a little bit about our
projected deficit. The fiscal year

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202627 budget presently has a projected
general fund operating deficit of

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631,544.

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Montlair's heavy reliance on sales tax
and transaction and use tax revenue have

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contributed to this projected deficit.
Montlair is not alone in confronting

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projected declines in revenue and
general fund deficits. Other neighboring

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cities include, but are not limited to,
the following: Pomona, an 11.4 4 million

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deficit. Upland a $5.69 million deficit.
Chino Hills a $4.3 million deficit. LMA

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Linda an 847,100
deficit which may be worse due to the

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June 2nd 2026 loss of a 1% tax measure
and Redlands a $2.7 million revenue

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decline.
Depressed growth in na in general fund

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tax projections for fiscal year 2026 27
is based on but not limited to the

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following areas of concern. National
factors revenue estimates are largely

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impacted by a national economic
environment that presents significant

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challenges. A lethargic national economy
with a progressive rising inflation.

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Declining consumer confidence. Recurring
swings in tariff policies. Rising fuel

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and energy prices. A growing economic
gap defined by a K-shaped economy,

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fluctuations and uncertainty in the
housing market, growing concerns related

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to affordable health care coverage,
homelessness, immigration enforcement

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activities, and other social issues,
economic uncertainty restricting the

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Federal Reserve's ability to lower the
federal funds rate.

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The California factors. The state's
economic cycles are shaped by growth and

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downturns that are more volatile that
what is experienced by many other

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states. Heavy reliance on a few key
industries, progressive tax structure,

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boom and bust budget cycles, external
economic shocks, demographics and labor

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market shifts, political and policy
factors. For fiscal year 2026 27,

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California's legislative analyst office
has projected an almost $18 billion

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shortfall.

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Uh Montclair regional factors drawing on
fourth quarter 2025 and first quarter

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2026 data from HDL companies. Sales tax
trends demonstrate limited improvement

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in sales tax revenues heading into
fiscal year 2026 27. Consumer spending.

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Consumers are holding back or focusing
on essentials and value. Declining slow

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growth and tax revenue sources. Montlair
sales and transactions and use tax

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measures are showing minimal
year-over-year growth. E-commerce versus

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brickandmortar. Retail growth continues
in online fulfillment centers, which

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decreases sales and transactions and use
taxes collected by the city.

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» Let's stop right there for a second. Any
questions on the revenue side so far by

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council? Any questions right now?
>> On the revenue side?

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» The revenue we just talked about want to
start with revenue. Go for it.

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» I have a quick question if you need a
second.

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» Go ahead.
What was last year's

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general fund revenue
you can recall?

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» Oh, yeah. 40.4 million.
>> Yeah.

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on slide eight. Um, we're talking about
current year revised prior year and

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change. Uh, I know we talk about being
in a $631,000

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deficit. So, it just seems odd that we
would be increasing our our next year by

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three. Here it says 3 point or 3033
million where but in the um that we were

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given. My calculations are more like 4
and a.5 million um in what I see. I'm

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just wondering why we're increasing if
we're in a deficit. And u that's one of

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my questions on that side of it. And
then um on the lease revenue bonds, I

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got I have a question regarding
um what our debt service that we pay

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back. Is that a fixed rate or is that an
adjustable? Yeah, that the lease

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revenues are on the later on agenda. So,
let's let's uh we'll look at that later

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on if you want to lease bond mentioned a
few it's mentioned a few times in the

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» there's there's a section on the revenue
bonds all that we can get that one there

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but let's let's focus on slide eight
first. So the the three million change

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that's over all funds. So that includes
everything and that our deficit is we're

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discussing is just in the general fund.
>> Okay, I understand. I'm just wondering

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why we're increasing
if we're in a deficit. Why would we

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increase our budget?
>> You're you're asking why the funds are

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increasing? because the revenues coming
into other funds other than general fund

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are increasing
>> and those funds are used to operate

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other than general government
operations.

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» Yes, I I understand that. But my
question is if we're in a deficit and

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we're bringing in more revenue, why are
we do we have to spend it all or

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» Okay, so general fund monies are used to
operate general government operations

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00:13:40,720 --> 00:13:49,200
including personnel. Yeah.
>> Um that's the burden of the general

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fund. Other funds are for specific
activities and most of that would rep be

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represented for example by grants that
are used for infrastructure projects um

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and other things that those funds are
specifically designed for. We don't have

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control over those funds. They're
specific for specific purposes. The

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general fund is for general government
operations which is 95% of our

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operations. And those funds are what we
are experiencing a deficit in

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» the funds that were receiving
>> general fund

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» the general fund the that money that we
receive from our general tax operations,

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property taxes, sales tax operations, uh
u transactions and use tax revenues, uh

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things like uh police department going
out and issuing traffic citations. Those

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monies all go into the general fund. And
that fund which operates the majority of

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our services to the community including
personnel expenditures

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is what is experiencing the deficit.

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» Okay. Um I understand what you're
saying. I understand the funds that

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we're receiving and the general
operating fund. I guess I just I'm

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00:14:58,959 --> 00:15:08,320
having difficulty understanding why if
we're having a deficit, why we're

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increasing
certain things. Why aren't we cutting

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back in areas? I'm not saying
everything, but to to prevent having the

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deficit.
>> Well, we did cut back. We cut back $3.8

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million from the requests that were
submitted by the various departments. We

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also froze a number of physicians that
saved the budget about 1 point

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» just a little over a million.
>> Yeah.$1.3 million.

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» Yeah, I saw that. I saw that in the
budget and your message and everything.

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» I think we're trying to do right now is
focus on the understand the revenue

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issues because we'll talk about
corporations next.

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» Yeah.
>> Corporations will talk about

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expenditures, talk about positions are
frozen. I guess the big the big to me

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when I look at the revenue, the big
issue is revenue is our revenues are

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flat. Our sales tax revenues are flat.
They're not growing to offset uh offset

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cost decreases.
>> I think that's I think that's what

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staff's trying to say here. Am I
correct? Uh

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00:16:02,160 --> 00:16:06,720
» well, and and revenue
>> Yeah, our revenues are flat.

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00:16:05,040 --> 00:16:11,680
» Yes, revenues are flat. And even if
they're up, they're up over previous

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00:16:09,360 --> 00:16:18,480
years that were negative. So, if for
example, if you were 6% negative uh two

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00:16:15,120 --> 00:16:25,440
years ago and 3% negative the following
year, and even if you're up 2% this

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00:16:21,279 --> 00:16:32,560
year, you've only gained uh improvement
uh on a negative of of uh uh 8%. So,

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00:16:30,639 --> 00:16:37,360
you're still behind. You just are
demonstrating moving forward. You're not

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00:16:35,199 --> 00:16:42,000
going negative, but you're still not
where you were at three years ago.

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00:16:40,240 --> 00:16:46,800
And I understand that. And so, and then
the same with the reverse. If we had

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00:16:44,639 --> 00:16:51,120
more money than we were expecting, then
we'd be at a positive. Correct.

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00:16:49,440 --> 00:16:53,839
» Well, no, not necessarily because you
still have to make up the negative from

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00:16:52,639 --> 00:16:58,399
previous years.
>> Okay. Well, well, I'm talking, I guess,

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00:16:55,920 --> 00:17:02,320
about Measure L. You know, Measure
Measure L I know you you put in the

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00:17:00,560 --> 00:17:06,319
report that the first year we brought in
11 point something million. the next,

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00:17:04,720 --> 00:17:10,480
you know, few years it dropped, you
know, about a million dollars and then

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00:17:07,839 --> 00:17:16,799
it's slowly going back up. And we talk
about how that's not very much. But if

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00:17:13,039 --> 00:17:22,079
you really go back to 2020 when we, you
know, wanted and we put this on the

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00:17:19,039 --> 00:17:25,199
ballot for the residents, what was our
projected revenue at that time that we

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00:17:24,079 --> 00:17:30,240
were thinking we were going to get from
it? It was $7 million. So technically

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00:17:28,319 --> 00:17:36,400
we're really four million more than what
we are originally wanting which is about

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00:17:33,120 --> 00:17:39,919
40% rather than saying we're do you
understand what I'm saying? I I'm

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00:17:38,080 --> 00:17:43,840
looking I go back in history and I'm
just trying to see where we are and

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00:17:42,000 --> 00:17:47,440
what's going on with you know all the
funds and that's why I was asking about

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00:17:45,600 --> 00:17:51,840
» yeah I I understand and projections
versus actual results are are typically

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00:17:49,600 --> 00:17:55,840
two different things. You hope and
expect that you will generate more. Of

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00:17:53,919 --> 00:18:01,120
course, at the time we were coming out
of COVID. So, while we had had actually

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00:17:58,640 --> 00:18:06,400
anticipated that it would generate up to
$11 million because of COVID, uh all of

211
00:18:04,480 --> 00:18:11,280
the advisers told us that we should
lower that number and expect much less

212
00:18:08,480 --> 00:18:15,520
than that. And that is why we had
projected that we would be somewhere

213
00:18:12,799 --> 00:18:20,720
between seven and 8 million. The result
obviously was better than we uh well the

214
00:18:18,799 --> 00:18:25,520
advisers had anticipated but what we had
actually anticipated it would be uh it

215
00:18:23,360 --> 00:18:29,360
came in at $11 million and I think if
you go back and you look at all of the

216
00:18:27,280 --> 00:18:33,280
materials related to discussions at that
time staff was more positive than the

217
00:18:31,840 --> 00:18:38,720
consultants were and believe that it
would generate that $11 million it did.

218
00:18:36,160 --> 00:18:47,280
Uh but again that was over five years
ago and here we are uh now in 2026 27

219
00:18:44,160 --> 00:18:51,840
and the numbers now are less than what
it what we earned uh five years ago.

220
00:18:50,160 --> 00:18:59,760
That's not positive growth. That's
backward growth. And while we are moving

221
00:18:54,960 --> 00:19:04,880
back we moving back to that $11 million.
It's five years ago that we came in at

222
00:19:02,240 --> 00:19:11,120
$1 million. Those numbers should be at
$14 million if the economy was really

223
00:19:08,320 --> 00:19:15,760
progressing in a positive direction.
It's not progressing in a positive

224
00:19:13,039 --> 00:19:23,840
direction. We're not at $14 million.
We're still about $400,000 short of

225
00:19:19,039 --> 00:19:30,919
where we were in uh 2021 2022.
>> I I understand all of that, but I'll

226
00:19:26,720 --> 00:19:30,919
I'll let you continue on.

227
00:19:32,240 --> 00:19:34,720
Okay.

228
00:19:37,440 --> 00:19:44,080
Okay. So now we will discuss
appropriations.

229
00:19:42,000 --> 00:19:49,200
So table two shows the department
request versus city manager recommended.

230
00:19:46,559 --> 00:19:56,160
So overall funds the department's
requests were 64.5 million. City manager

231
00:19:52,960 --> 00:20:03,039
approved is 60.6 million. So we were
able to uh reduce the budgets by 3.9

232
00:20:00,640 --> 00:20:09,039
million for the general fund department
requests were 45.2 million. City manager

233
00:20:06,240 --> 00:20:15,120
approved 41.6 million. So our reductions
were 3.6 million. City manager

234
00:20:12,240 --> 00:20:19,919
recommended amounts uh the current year
70 million 58,000

235
00:20:17,919 --> 00:20:26,240
for the new fiscal year. This current
year we're at 65,230. So there's almost

236
00:20:23,760 --> 00:20:31,280
a $5 million
jump right there over all funds, 4.8

237
00:20:28,880 --> 00:20:35,679
million. And the general operating fund
current year is um for the next fiscal

238
00:20:33,440 --> 00:20:41,200
year 41.6.
Uh the current fiscal year 39.5 million.

239
00:20:38,880 --> 00:20:47,200
So that's 2.1 million increase over pri
over over the prior year.

240
00:20:44,159 --> 00:20:54,400
Personnel services all funds 35.6 6
million which is 58.9% of total

241
00:20:50,159 --> 00:21:00,559
appropriations which is up from 30 34.4
million which was 61.7%

242
00:20:57,360 --> 00:21:06,400
for fiscal year 202526.
Uh general that was over all funds

243
00:21:02,400 --> 00:21:11,200
general fund 28.7 million which is 69%
of general fund appropriations which is

244
00:21:08,960 --> 00:21:16,480
up from 27.2
2 million which was 68.9% for fiscal

245
00:21:13,760 --> 00:21:20,480
year 202526.
Personnel increases year-toear are

246
00:21:18,559 --> 00:21:24,320
related to addition of grant funed
positions in the fire department

247
00:21:22,080 --> 00:21:29,280
restoration of certain general fund
positions in various departments

248
00:21:26,240 --> 00:21:34,159
following the CO 19 pandemic. enhancing
staff in key functional areas,

249
00:21:31,520 --> 00:21:39,520
succession planning, implementation of
negotiated wage and benefit increases,

250
00:21:36,960 --> 00:21:44,880
and annual increases to Kalpers's fund
unfunded acred liabilities for employee

251
00:21:42,320 --> 00:21:51,280
pensions,
services, and supplies. All funds 21.6

252
00:21:48,320 --> 00:21:57,520
million, which is 35.8% of total
appropriations, up from 20 million, 20.6

253
00:21:54,880 --> 00:22:03,520
6 million which was 37.1%
for fiscal year 202526.

254
00:22:00,559 --> 00:22:08,159
For the general fund 12.5 million which
is 30.2%

255
00:22:05,520 --> 00:22:15,400
of general fund appropriations up from
11.9 million which was 29.2% for fiscal

256
00:22:12,080 --> 00:22:15,400
year 202526.

257
00:22:16,640 --> 00:22:26,840
Capital outlay for fiscal year 2627 is
3,244

258
00:22:23,039 --> 00:22:26,840
two 3,244,114

259
00:22:27,679 --> 00:22:35,360
of which 597,799
is being funded by the equipment

260
00:22:32,640 --> 00:22:40,320
replacement fund. All major capital
outlay requires authorization from the

261
00:22:37,600 --> 00:22:44,400
city manager before issuance of purchase
order requests.

262
00:22:42,960 --> 00:22:48,880
So, here's a listing for each
department. For the information

263
00:22:45,600 --> 00:22:54,480
technology department, $247,000
for computer equipment, human services,

264
00:22:52,159 --> 00:23:00,159
a total of $165,000
for two passenger vans, which are we're

265
00:22:57,440 --> 00:23:04,080
getting through a grant, and uh MAP
office furniture, which is the

266
00:23:01,520 --> 00:23:08,960
afterchool program fund. Police
Department, $194,400

267
00:23:06,799 --> 00:23:13,760
for three patrol vehicles being paid out
of the equipment replacement fund and

268
00:23:11,520 --> 00:23:19,320
dispatch console upgrade, which is the
general fund. the fire department

269
00:23:16,320 --> 00:23:19,320
2,54,552

270
00:23:20,000 --> 00:23:26,720
for a tractor drawn aerial ladder truck
which will be paid out of the equipment

271
00:23:24,240 --> 00:23:32,240
replacement fund and grants from San
Bernardino County and community project

272
00:23:28,720 --> 00:23:39,039
funding forcible entry training props
general fund life 35 cardiac monitor the

273
00:23:36,000 --> 00:23:46,960
general fund and five life pack CR2
defibrillators general fund and for the

274
00:23:42,559 --> 00:23:51,520
public works department 133 $3,162
for a 2026 Chevrolet Silverado, which

275
00:23:49,919 --> 00:23:59,840
will be paid out of the equipment
replacement fund. WCO towable arrowboard

276
00:23:55,200 --> 00:24:04,799
case 13in trenching bucket, R234
YIF AC machine, CEK manufacturing tool

277
00:24:03,440 --> 00:24:11,360
drawer, all those paid out of the
general fund. and out of the sewer fund

278
00:24:07,360 --> 00:24:17,679
sewer BMP program and three smart cover
manhole lid systems.

279
00:24:15,279 --> 00:24:25,039
So this table shows all the allocations
by department and a change from the

280
00:24:20,880 --> 00:24:30,799
prior year is just over 4.3 million.
There's only uh one fund transfer

281
00:24:27,360 --> 00:24:35,039
budgeted and that is our annual $100,000
transfer from the traffic safety fund

282
00:24:32,640 --> 00:24:39,520
for applicable programs to the general
fund.

283
00:24:37,600 --> 00:24:41,120
So, do you want me to stop here?
>> Keep keep on going.

284
00:24:40,480 --> 00:24:44,159
» Keep on going.
>> Yeah, we'll stop.

285
00:24:42,000 --> 00:24:49,600
» Uh general fund operating fund balance
unassigned reserve.

286
00:24:46,400 --> 00:24:54,640
So, here's our um general fund operating
fund balance uh and comparisons with

287
00:24:52,480 --> 00:24:58,880
operating appropriations. So at the end
of fiscal year 2627

288
00:24:57,120 --> 00:25:04,080
we're estimating our operating fund
balance will be 5.4 million which is

289
00:25:01,600 --> 00:25:11,200
13.14%
uh which is below the recommended 25%.

290
00:25:08,640 --> 00:25:15,200
An assigned reserve balance government
finance officers association general

291
00:25:13,440 --> 00:25:22,400
fund unassigned reserve ratio
recommendation is minimum 25% optimum

292
00:25:18,880 --> 00:25:28,000
50%. City Council direction maintain
minimum unassigned reserve ratio of 25%

293
00:25:25,279 --> 00:25:34,640
of operating appropriations with a goal
to achieve a 50% unassigned reserve

294
00:25:30,559 --> 00:25:39,840
ratio estimated June 30th 2027 general
operating funds fund balance estimate of

295
00:25:37,200 --> 00:25:44,400
approximately 5.4 4 million of the
general fund unassigned reserve which is

296
00:25:41,840 --> 00:25:49,760
less than the threshold target of 25% of
operating appropriations.

297
00:25:46,720 --> 00:25:55,679
Estimated June 30th 2027 general fund
reserve fund equity rep representing

298
00:25:52,080 --> 00:25:59,919
reserves for special purposes is 25.3
million.

299
00:25:58,080 --> 00:26:04,720
Over the past seven fiscal years, the
reserve ratio has fluctuated with a low

300
00:26:02,480 --> 00:26:09,840
of 16.55%
and a high of 24.95%.

301
00:26:07,840 --> 00:26:13,919
These fluctuations are generally the
result of the following. A difference in

302
00:26:12,159 --> 00:26:18,960
operating appropriations between
consecutive years. Adjustments to the

303
00:26:16,159 --> 00:26:23,279
city's revenue profile. Creation of the
following debt service funds to achieve

304
00:26:20,799 --> 00:26:29,039
adequate funding for annual payments of
the 2021 issue of lease revenue bonds

305
00:26:25,840 --> 00:26:36,480
debt service fund. 2021 issue of pension
obligation bonds debt service fund and

306
00:26:31,520 --> 00:26:40,559
the UAL POB amortization fund.
Adjusting special purpose reserve funds

307
00:26:38,320 --> 00:26:44,960
as necessary and when surplus funding is
available. Establishing additional

308
00:26:42,960 --> 00:26:50,000
special purpose reserve funds to reflect
changing requirements related to city

309
00:26:47,200 --> 00:26:54,559
operations. Funding assigned to the
economic development agency for real

310
00:26:51,840 --> 00:26:58,320
property acquisition. End of year audit
adjustments for actual revenues and

311
00:26:56,400 --> 00:27:02,880
expenditures. Mid-year budget
adjustments. City staff will continue

312
00:27:00,880 --> 00:27:07,039
working toward a fund balance ratio in
the general operating funds unassigned

313
00:27:04,720 --> 00:27:11,840
reserves that represents no less than
25% of the general operating funds

314
00:27:09,360 --> 00:27:15,360
appropriations budget with the long-term
goal of achieving a 50% unassigned

315
00:27:14,000 --> 00:27:19,200
reserve ratio.
>> Okay, we can stop there for a second.

316
00:27:17,120 --> 00:27:27,360
So, any questions on the appropriations
right now or the unassigned reserves

317
00:27:23,200 --> 00:27:28,640
at this time? Okay, questions continue
on.

318
00:27:28,000 --> 00:27:32,640
» Okay.
>> Okay.

319
00:27:30,640 --> 00:27:36,320
Maintaining general funds fund balance
and reserves.

320
00:27:34,640 --> 00:27:40,480
Maintaining a healthy general fund
operating fund unassigned reserve fund

321
00:27:38,159 --> 00:27:44,240
balance. In recent years, the city's
success at achieving and maintaining a

322
00:27:42,400 --> 00:27:48,400
healthy general fund operating fund
unassigned reserve fund balance has been

323
00:27:46,720 --> 00:27:53,279
accomplished through commitment to the
following coordinated objectives. Fiscal

324
00:27:51,279 --> 00:27:58,240
restraint achieved by implementation of
sound economic policies and practices.

325
00:27:56,320 --> 00:28:02,159
Reviewing the shared allocation of
personnel related costs between the

326
00:28:00,000 --> 00:28:06,480
general operating fund, other city
entities, and other city funds.

327
00:28:04,480 --> 00:28:11,679
Maintaining an appropriate employee
ratio. Requiring employees to pay their

328
00:28:09,679 --> 00:28:16,720
respective share of the CalPERS member
contribution. Implementation of revenue

329
00:28:14,640 --> 00:28:21,520
enhancement measures for fiscal year
2026 27. The following revenue

330
00:28:19,679 --> 00:28:25,840
enhancement measures are submitted for
consideration.

331
00:28:23,120 --> 00:28:30,960
Measure L. This is an existing measure.
Continue encouraging economic activity

332
00:28:28,159 --> 00:28:35,279
to improve general fund tax receipts.
Community facilities districts. This is

333
00:28:33,200 --> 00:28:40,640
also an existing measure. Continue
encouraging highdensity residential

334
00:28:37,760 --> 00:28:45,440
development to improve CFD tax receipts
in support of police and fire services,

335
00:28:43,360 --> 00:28:51,360
emergency equipment apparatus, and
public works maintenance programs.

336
00:28:49,520 --> 00:28:57,679
Implementation of revenue enhancement
measures continued. commercial cannabis

337
00:28:53,760 --> 00:29:02,080
businesses. In fiscal year 20 2026 27,
city council will be asked to consider

338
00:28:59,440 --> 00:29:07,440
adoption of a revenue raising ordinance
which could generate $2 million in

339
00:29:04,960 --> 00:29:12,559
general fund revenue. The proposed tax
rate is 7% authorized by voters in the

340
00:29:10,240 --> 00:29:16,799
November 2022 general municipal
election.

341
00:29:14,159 --> 00:29:22,399
Cost of P personal choice services study
implementation. On May 4th, 2026, a

342
00:29:20,240 --> 00:29:27,039
workshop was conducted related to
assessed fees for personal choice

343
00:29:24,480 --> 00:29:32,159
services. Services that are offered to
customers and that can be withheld for

344
00:29:29,279 --> 00:29:36,080
non-payment may be likened to user fees.
City council adoption of the

345
00:29:34,240 --> 00:29:40,399
recommendations contained in the cost of
services study can potentially generate

346
00:29:38,720 --> 00:29:47,600
$760,000
annually. Utility users tax adjustment

347
00:29:44,159 --> 00:29:52,960
to the voter authorized rate of 4.74%
to generate approximately $600,000 in

348
00:29:50,480 --> 00:29:59,120
new general fund revenue.
Utility users tax considered 2028 voter

349
00:29:56,480 --> 00:30:03,919
amendment to include cable streaming
services and/or other utilities, for

350
00:30:01,600 --> 00:30:08,880
example, refugees and sewer not
currently provided for in the UUT

351
00:30:06,320 --> 00:30:13,919
ordinance may generate in excess of
$800,000 annually in general fund

352
00:30:11,520 --> 00:30:17,679
revenue.
e-commerce. Continue working with

353
00:30:15,840 --> 00:30:22,960
legislators to amend California's
current tax code related to point of

354
00:30:20,159 --> 00:30:29,600
sale. Alternatively, consider working
with special legal counselor council to

355
00:30:25,360 --> 00:30:33,440
pursue pursue a class action lawsuit to
require cities with point of sale

356
00:30:31,279 --> 00:30:38,720
agreements, sales tax sharing agreements
with online instate retailers to amend

357
00:30:36,480 --> 00:30:44,480
those agreements to favor a point of
delivery reporting scheme or report all

358
00:30:41,919 --> 00:30:49,120
online in-state transactions and use tax
receipts received through tax sharing

359
00:30:46,880 --> 00:30:54,720
agreements to their respective county
pools for distribution to agencies based

360
00:30:51,360 --> 00:31:00,960
on per agency brick and mortar per
capita sales tax performance. Potential

361
00:30:57,919 --> 00:31:06,720
to generate $2 million annually in
online transactions and use tax revenue.

362
00:31:04,399 --> 00:31:10,159
Monavista Fire Protection District
pursue cost reimbursement for fire

363
00:31:08,640 --> 00:31:14,080
service in the city's sphere of
influence. Current and prospective

364
00:31:12,320 --> 00:31:18,960
annual payments are estimated at
approximately $760,000.

365
00:31:17,039 --> 00:31:23,440
Montlair potentially entitled to
retroactive service costs to be

366
00:31:21,120 --> 00:31:27,760
determined.
The A-line, formerly the Gold Line

367
00:31:25,279 --> 00:31:31,200
litigation, continue pursuing current
claims and litigation against the San

368
00:31:29,520 --> 00:31:36,159
Bernardino County Transportation
Authority regarding extension of light

369
00:31:33,520 --> 00:31:41,519
rail to the Montlair Transit Center.
Economic recovery undetermined, however,

370
00:31:38,880 --> 00:31:46,640
could s significantly exceed$1 billion
dollars based on Beacon economic study

371
00:31:44,320 --> 00:31:50,880
related to loss and economic output and
annual tax revenues.

372
00:31:48,960 --> 00:31:55,279
Commercial use of the former Pep Boys
building site. Evaluate conversion of

373
00:31:53,279 --> 00:32:00,480
the former Pep Boys into a commercial
use that could potentially generate up

374
00:31:57,760 --> 00:32:06,159
to 30 to $50,000 monthly in lease
revenue payments. the I 10 freeway

375
00:32:03,519 --> 00:32:10,720
adjacent electronic messaging sign.
Potential for two sites along the I 10

376
00:32:08,320 --> 00:32:14,720
freeway corridor. Installation of
electronic messaging signs could

377
00:32:12,399 --> 00:32:19,279
generate an estimated 100,000 to
$500,000 annually in leasing

378
00:32:17,440 --> 00:32:24,880
advertisement revenue for the general
fund opportunity zone designation. This

379
00:32:22,720 --> 00:32:30,159
designation in the North Montlair Census
District would allow for infusion of

380
00:32:27,279 --> 00:32:34,640
investment C capital in North Montlair
which could be in excess of seven

381
00:32:31,919 --> 00:32:39,360
billion dollars.
>> Okay. Any questions on this section of

382
00:32:36,559 --> 00:32:44,480
general operating fund balance revenue?
Maybe I'll lead off. I know that on we

383
00:32:41,679 --> 00:32:49,919
go to slide 31. I just want to pinpoint
to my colleagues. These are potential

384
00:32:47,360 --> 00:32:56,399
revenues that the city can attempt to
capture. These are obviously revenue.

385
00:32:53,360 --> 00:33:00,960
You know, one is a cannabis business. We
had a workshop on that two weeks ago and

386
00:32:58,559 --> 00:33:07,200
I believe it's essential that this
council have a strong consideration of

387
00:33:04,320 --> 00:33:14,000
of the cannabis business ordinance uh
later this year. Um I think uh staff did

388
00:33:11,519 --> 00:33:18,960
receive directions at the last workshop
and uh obviously this is expected to

389
00:33:16,640 --> 00:33:23,360
come back to us. The other thing here is
this uh cost of per personnel choices

390
00:33:21,760 --> 00:33:28,559
service studies. We also had a workshop
on this projected to generate 760,000

391
00:33:26,880 --> 00:33:33,120
annually and this will also come back to
the uh city council at a regular meeting

392
00:33:31,519 --> 00:33:38,559
uh for us to consider this but this is
also new revenue. Um

393
00:33:36,399 --> 00:33:42,799
this this is new re this is not in the
bud in the proposed budget.

394
00:33:40,080 --> 00:33:48,000
» Correct. So we were to adopt this uh
this could potentially be new revenue

395
00:33:45,039 --> 00:33:53,760
coming in um for us. The other thing
here is you know the utility usage tax

396
00:33:50,320 --> 00:34:01,519
uh um when this was first adopted back
in 1992 was 5% was 5% that was a voter

397
00:33:59,039 --> 00:34:07,360
approved utility users tax and then the
count at the time um

398
00:34:04,880 --> 00:34:14,320
had a plan to reduce it based on sales
tax dollars. uh uh increases. So we have

399
00:34:12,240 --> 00:34:19,040
a potential to look at this. I think if
you know depending on where the budget

400
00:34:15,679 --> 00:34:23,280
is the second half of the fiscal year or
the first half of 27 that we should also

401
00:34:21,679 --> 00:34:28,800
look at this maybe our midyear budget
review and uh and consider uh if this

402
00:34:27,200 --> 00:34:32,800
the utility usage tax should be
adjusted. This is another one utility

403
00:34:31,040 --> 00:34:37,280
users tax. I don't quite understand the
whole cable

404
00:34:34,560 --> 00:34:42,879
uh streaming services but if you know
this is that the council wants to uh put

405
00:34:40,800 --> 00:34:46,800
this place in the ballot in 28. I'm not
advocating to do right now, but it is

406
00:34:44,560 --> 00:34:53,119
something for us to consider at a future
date. If we go to number 32,

407
00:34:51,599 --> 00:34:56,639
um
this is a big issue. I don't know if you

408
00:34:55,119 --> 00:35:00,480
have any questions about it, but
obviously e-commerce and in these tax

409
00:34:59,040 --> 00:35:05,040
sharing agreements some of the
jurisdictions are doing. I know there's

410
00:35:02,720 --> 00:35:07,760
some legislation
league California city has also been

411
00:35:06,480 --> 00:35:13,200
involved to try to make it more
equitable. There's no leeways but

412
00:35:10,240 --> 00:35:19,200
obviously brick and mortars which were a
brick and mortar city is being impacted

413
00:35:15,839 --> 00:35:25,520
by the e-commerce or the big warehouses
uh that uh are point of sale. So, um,

414
00:35:23,680 --> 00:35:29,520
and then of course the Monav Vista Fire
Protection District, uh, this is

415
00:35:27,119 --> 00:35:35,839
something also the staff's worked on,
identified that this revenue of 760,000

416
00:35:32,480 --> 00:35:39,839
that we were never getting. Um, I don't
add, uh, I believe uh, we have

417
00:35:38,240 --> 00:35:43,920
communication with the county on this
now, but this is also potentially new

418
00:35:41,520 --> 00:35:48,960
revenue uh, for the city of Monler's
general fund. So, I'll stop there and

419
00:35:46,480 --> 00:35:54,800
receive any more questions. Mayor Paul
Martinez,

420
00:35:50,960 --> 00:35:59,760
» I was just curious, does the GFOA's
unassigned reserve ratio recommendation

421
00:35:56,800 --> 00:36:02,320
have any bearing on like insurance or
>> No,

422
00:36:00,240 --> 00:36:05,760
» nothing like that. It's just just
>> recommendation. Yeah.

423
00:36:04,160 --> 00:36:09,560
» Thank you. That's all I have.
>> Okay. Council Ruth,

424
00:36:10,400 --> 00:36:15,760
» I
I will start with a question. I have

425
00:36:14,320 --> 00:36:20,240
some others in here, but some of them
can wait.

426
00:36:17,520 --> 00:36:27,000
uh personal
services, the personal choice for

427
00:36:22,320 --> 00:36:27,000
services. How would that work?

428
00:36:27,040 --> 00:36:33,760
Well, these are effectively similar to
what user fees are where if somebody

429
00:36:31,599 --> 00:36:37,680
requests a service specific from the
city that is separate from uh general

430
00:36:36,000 --> 00:36:39,839
services provided to the community, they
would be obligated to pay for those

431
00:36:39,119 --> 00:36:44,079
services.
>> What would that service be?

432
00:36:42,079 --> 00:36:47,599
» Yes.
Oh, what would the service be? For

433
00:36:45,520 --> 00:36:51,520
example, if they're uh doing a
development and they need specific

434
00:36:49,200 --> 00:36:56,400
services from the city related to their
development project, the community uh

435
00:36:54,079 --> 00:37:00,160
would not be responsible for paying for
the city providing that service to them.

436
00:36:58,240 --> 00:37:04,160
The individual themselves would be
responsible for paying for that service.

437
00:37:02,400 --> 00:37:07,440
» Well, we already have developer fees
that developers pay.

438
00:37:05,599 --> 00:37:10,800
» Yes. I'm only using that as an example.
Uh but

439
00:37:08,160 --> 00:37:14,800
» what would an example be to an average
resident?

440
00:37:12,880 --> 00:37:19,760
a resident who would come in for example
who would want solar panels on their uh

441
00:37:17,599 --> 00:37:23,520
roof. That is not a service that the
city would provide and charge to the

442
00:37:22,000 --> 00:37:28,359
residents generally. That would be
charged specifically to the individual.

443
00:37:28,480 --> 00:37:35,920
» So what would the using solar panels?
What would that fee be? A fee to install

444
00:37:34,079 --> 00:37:38,960
them? We don't install solar panels
anyway. They hire somebody to do

445
00:37:37,280 --> 00:37:44,800
» No, but it's a processing fee that the
city applies for uh uh permits and other

446
00:37:43,119 --> 00:37:48,640
inspection services and things that
would be required from the city. So,

447
00:37:46,720 --> 00:37:53,200
there are only services directed to
individuals who are requesting that the

448
00:37:50,480 --> 00:37:58,000
city provide services beyond what is
normally provided to the community.

449
00:37:56,000 --> 00:38:01,359
» That would not include police and fire,
would it?

450
00:37:58,480 --> 00:38:05,520
» No, this is not inclusive of that.
>> Just point of order that we discussed

451
00:38:03,599 --> 00:38:08,079
this at the workshop. I know. I'm I'm
just trying to to to get my head around

452
00:38:07,599 --> 00:38:11,200
all this.
>> Got a big document relating to the fee

453
00:38:10,320 --> 00:38:15,920
study that was done,
>> right? No, it and then we're talking

454
00:38:13,680 --> 00:38:22,880
about the utility users tax and
increasing that.

455
00:38:18,240 --> 00:38:27,040
What my concern is what it means to one
businesses in town, not large businesses

456
00:38:25,200 --> 00:38:33,040
or very small businesses who are very
dependent on electricity for example and

457
00:38:30,079 --> 00:38:38,000
natural gas. those rates are going up
all the time. These businesses are many

458
00:38:35,599 --> 00:38:43,200
cases marginal. An increase in this tax
could result in that business simply

459
00:38:41,599 --> 00:38:47,920
saying, "I can't be here anymore. I've
got to close my doors." And I hope we we

460
00:38:45,599 --> 00:38:52,800
look at that very carefully.
It would mean a lot to residents who are

461
00:38:50,079 --> 00:38:59,040
struggling to make ends meet right now.
All utility costs are high, very high.

462
00:38:55,839 --> 00:39:03,200
Nobody can tell me they're not. And if
we do this, many residents may have to

463
00:39:01,200 --> 00:39:08,640
make a choice
on the utility on when they use certain

464
00:39:06,880 --> 00:39:12,079
what time of day they use electricity,
when they use their natural gas, if they

465
00:39:10,480 --> 00:39:16,240
even use certain things at all. They may
simply turn around and say, "I can't

466
00:39:14,240 --> 00:39:20,160
afford it. I have to really cut back."
So, I hope whatever we do with that, we

467
00:39:18,480 --> 00:39:24,320
think about it. Um, most of our
residents are struggling. They don't

468
00:39:21,680 --> 00:39:28,800
have the income. And then the last
question I have, I have others, but

469
00:39:26,160 --> 00:39:35,200
that's for later. on the CFD we're
talking about in North Montlair. Um that

470
00:39:32,640 --> 00:39:39,920
CFD I thought just covered those units.
I didn't know what if I were to

471
00:39:37,359 --> 00:39:44,560
understand what this said. I didn't know
that those units or that these CFDs go

472
00:39:43,359 --> 00:39:48,960
for the whole city. I thought it was
just for that area. Community facilities

473
00:39:47,200 --> 00:39:52,640
district. It's not citywide. It's
specific to a district.

474
00:39:50,960 --> 00:39:56,160
» Well, no, it could be applicable
citywide. It is used primarily in North

475
00:39:54,960 --> 00:40:00,480
Montlair because that is where the
highdensity development projects are

476
00:39:57,920 --> 00:40:06,240
occurring. But if there were projects in
other areas of the city and uh it was

477
00:40:03,359 --> 00:40:09,839
the intent to require that the because
of the size of the project that there

478
00:40:08,160 --> 00:40:13,760
would be a responsibility related to
providing additional police and fire and

479
00:40:12,079 --> 00:40:18,079
public works maintenance services to
that area. uh then that would be imposed

480
00:40:16,240 --> 00:40:21,599
on those areas as well
>> because the the way I read this, it

481
00:40:19,839 --> 00:40:26,880
looked as if these CFDs are being used
to balance the budget in regard to

482
00:40:24,640 --> 00:40:30,480
police and fire services and they really
are applicable only to that area. If I

483
00:40:28,960 --> 00:40:34,880
were resident there, I wouldn't want to
know that I'm paying for something and

484
00:40:32,960 --> 00:40:39,599
it's being used somewhere else.
>> Yeah. Well, they are used only for the

485
00:40:37,119 --> 00:40:43,200
area in which the CFD is paid for. So,
they do go into uh obviously their

486
00:40:41,760 --> 00:40:49,599
general fund dollars, but they're used
specifically for the project that the

487
00:40:46,000 --> 00:40:53,280
money is uh uh derived from, and it is
not used generally throughout the city.

488
00:40:51,920 --> 00:40:58,800
» That that's all I have for now.
>> All right, Council Member uh Mendes.

489
00:40:56,079 --> 00:41:04,160
» Uh yeah, just a couple questions on the
um cannabis business. The proposed tax

490
00:41:01,200 --> 00:41:09,119
rate of 7% that was authorized um by the
council, that's um on top of the regular

491
00:41:07,599 --> 00:41:11,839
9%
Correct.

492
00:41:10,240 --> 00:41:15,280
» That would be on top of the Bradley
Burns and the transactions use text.

493
00:41:13,760 --> 00:41:22,560
That is correct.
>> Okay. So, 16%.

494
00:41:18,079 --> 00:41:29,599
Um, and then going down to the personnel
uh choice services study implementation,

495
00:41:25,040 --> 00:41:34,079
I I think that is a good idea. Um, but
obviously it's not going to be used for

496
00:41:32,079 --> 00:41:38,640
basic questions or simple questions over
the counter. These are more for

497
00:41:36,079 --> 00:41:44,560
developers or or things that people
need. I I understand what these are.

498
00:41:41,280 --> 00:41:49,440
Yeah. And um when it takes time out of
one of our employees to pull reports or

499
00:41:47,520 --> 00:41:53,359
do things, I understand. I mean, there
has to be a cost for that. And and I

500
00:41:51,440 --> 00:41:58,160
know it won't be outrageous, but I think
it's definitely something that we should

501
00:41:55,040 --> 00:42:04,480
look into. Um and as Bill mentioned, as
long as it doesn't, you know, affect

502
00:42:00,000 --> 00:42:11,920
police and fire calls. Um
on the let's see here the utility users

503
00:42:07,760 --> 00:42:15,520
tax. Um I I know John just mentioned 5%
but is is that what it is? The max could

504
00:42:13,920 --> 00:42:19,280
be is five or
>> the maximum maximum authorized is I

505
00:42:17,760 --> 00:42:22,480
believe 4.74%. Yes.
>> Yeah. That's what I think. Yeah.

506
00:42:20,560 --> 00:42:24,079
» Which is considerably low when you
compare it to what it is in other

507
00:42:23,680 --> 00:42:27,440
cities.
>> Yeah. And we're currently right now

508
00:42:25,599 --> 00:42:29,359
we're only charging 3 point something.
>> 3.89.

509
00:42:29,119 --> 00:42:32,160
Yeah.
>> Oh I'm sorry.

510
00:42:30,560 --> 00:42:38,079
» 89. my fault. Okay,
>> no worries. Um,

511
00:42:34,640 --> 00:42:42,160
» so yeah, and obviously we created that.
I mean, well, the council created that

512
00:42:39,680 --> 00:42:46,480
at that time in '92 just to help the
city when it needed help and they

513
00:42:44,160 --> 00:42:49,440
reduced it when they could and you know,
and right now we're having a little bit

514
00:42:47,839 --> 00:42:51,760
of trouble. So, yeah, we may
>> and can I talk about that for a second?

515
00:42:51,200 --> 00:42:54,560
I'm sorry.
>> Oh, yeah.

516
00:42:52,319 --> 00:42:58,480
» Yeah, this could we can do this for if
it's needed. I'm not saying it's needed

517
00:42:56,240 --> 00:43:01,680
right now. We we'll you know next year
but if we do it maybe would you do it

518
00:43:00,000 --> 00:43:03,200
for one year and then we reevaluate
again.

519
00:43:02,240 --> 00:43:07,680
» Yeah.
>> I'm not saying that.

520
00:43:04,319 --> 00:43:14,079
» Yeah. No no I I understand. And then the
um consideration of bringing the uh to

521
00:43:10,079 --> 00:43:19,200
the voters in 2028 to include
um cable and streaming services. I I

522
00:43:16,400 --> 00:43:24,800
agree with that as far as the refu
sewer. Um because I I know refuge isn't

523
00:43:22,960 --> 00:43:30,000
ours, but I feel like it comes through
the city and it's almost like a city. I

524
00:43:27,200 --> 00:43:35,680
I would say that we probably shouldn't
include sewer and trash, but yes, um

525
00:43:34,000 --> 00:43:42,800
definitely the cable and streaming
services on that one. And as far as the

526
00:43:39,359 --> 00:43:48,960
Monav Vista Fire Protection District and
um pursuing cost reimbursement, how many

527
00:43:45,359 --> 00:43:53,359
years um is it that um they owe us for
that we never were paid?

528
00:43:50,319 --> 00:43:58,480
» Well, it's to our understanding that the
uh payments to the city of Montlair,

529
00:43:55,040 --> 00:44:03,839
which were previously uh allocated to us
through property tax revenues, ceased in

530
00:44:00,800 --> 00:44:08,480
2005 when LAFCO made a decision to
eliminate the paper district. And well,

531
00:44:06,560 --> 00:44:13,359
they interpreted that the Monav Vista
Fire Protection District was a paper

532
00:44:10,240 --> 00:44:18,560
district and it was LFCO's desire to
eliminate paper districts at that time.

533
00:44:16,000 --> 00:44:22,720
And so they did that. It was our
understanding that while that occurred,

534
00:44:20,880 --> 00:44:27,920
the payment would continue to Montlair
through property tax revenues. Um and

535
00:44:25,760 --> 00:44:32,880
earlier this year we made the discovery
that in fact the property tax revenues

536
00:44:30,880 --> 00:44:36,800
which were very difficult to distinguish
between uh what is coming from the city

537
00:44:35,280 --> 00:44:41,920
versus what is coming from the sphere of
influence. So there was no clear

538
00:44:38,400 --> 00:44:46,880
indication of of that tax flow. And then
when I had asked for a audit to be

539
00:44:44,400 --> 00:44:52,000
conducted by finance, they made a
determination that we were receiving

540
00:44:49,440 --> 00:44:56,400
minimal in property tax revenues from
the sphere of influence, which opened

541
00:44:54,079 --> 00:45:01,920
our eyes to the fact that the county was
not making the payment. And so we hired

542
00:44:58,720 --> 00:45:07,119
HDL to look at it. and HDL did make the
determination that the county does owe

543
00:45:04,800 --> 00:45:12,640
the city a substantial amount of money.
Uh I say or it is said in the

544
00:45:10,640 --> 00:45:17,200
presentation that that amount needs to
be determined. We project that it's

545
00:45:15,280 --> 00:45:22,560
probably in the neighborhood of $9.3
million. Uh we will have to negotiate

546
00:45:20,079 --> 00:45:27,040
that with the county. Uh the county will
probably make an argument that uh we can

547
00:45:25,280 --> 00:45:31,520
only go back a number of years. Our
argument would be that this is not a

548
00:45:28,640 --> 00:45:35,760
commercial debt. This is a service debt.
We provided the services you owe us for

549
00:45:33,680 --> 00:45:42,800
the services and we're going to stand by
that plus uh the current year and all

550
00:45:40,480 --> 00:45:47,680
future years including a CPI adjustment
in future years. So uh we are seeking to

551
00:45:45,599 --> 00:45:51,359
set up a meeting with the county to have
that conversation.

552
00:45:49,839 --> 00:45:57,079
» Okay. All right. That's all the
questions I had. Thank you. Okay. Let's

553
00:45:53,680 --> 00:45:57,079
uh move on.

554
00:45:58,560 --> 00:46:08,079
So uh now we will discuss personnel
services.

555
00:46:04,079 --> 00:46:13,280
Uh for fiscal year 2026 27 there are 205
full-time positions. Uh the majority of

556
00:46:11,200 --> 00:46:19,280
that coming out of general fund sewer
fund and grants and then.24 of people uh

557
00:46:17,359 --> 00:46:24,480
come are paid through the Montlair
successor redevelopment agency. There is

558
00:46:22,079 --> 00:46:28,480
one part-time benefited position. uh the
employee has elected to remain in the

559
00:46:26,079 --> 00:46:32,400
part-time benefited position to maintain
social security coverage and the

560
00:46:30,560 --> 00:46:37,000
part-time benefited program will end
upon employee separation from

561
00:46:34,000 --> 00:46:37,000
employment.

562
00:46:37,119 --> 00:46:44,960
The city's fiscal year 2026 27 proposed
operating budget anticipates several

563
00:46:42,240 --> 00:46:49,359
adjustments to personnel classifications
for some or all of the following

564
00:46:46,720 --> 00:46:54,480
reasons. Ensure the effective and
efficient operation of city departments.

565
00:46:51,920 --> 00:46:59,760
Provide for succession planning, ensure
adequate staffing, promote personnel

566
00:46:57,359 --> 00:47:04,400
retention, achieve depth of experience,
and ensure the provision of city

567
00:47:01,520 --> 00:47:09,680
services. Address evolving needs and
changes to organizational operations.

568
00:47:07,200 --> 00:47:14,480
Respond to underperformance of sales and
transaction and use tax earnings.

569
00:47:12,160 --> 00:47:19,200
Respond to the availability or loss of
grants. be responsive to potential

570
00:47:17,119 --> 00:47:23,280
shifts in the local economy due to the
state of uncertainty regarding federal

571
00:47:21,200 --> 00:47:26,720
economic policies.
Personnel modifications are submitted to

572
00:47:25,200 --> 00:47:33,119
the city personnel committee for
consideration prior to implementation of

573
00:47:29,760 --> 00:47:38,000
classification modifications and/or the
appointment of qualified and appropriate

574
00:47:35,119 --> 00:47:42,960
personnel.
The fisc year 2026 27 budget city

575
00:47:40,960 --> 00:47:47,200
manager recommendations.
The city manager is not presently

576
00:47:44,720 --> 00:47:53,440
proposing any significant operational or
personnel reorganization changes. The

577
00:47:50,000 --> 00:47:59,040
fiscal year 2026 27 budget does propose
freezing nine full-time and seven

578
00:47:56,079 --> 00:48:02,800
part-time designated vacant positions.
Each position is vacant for the

579
00:48:00,720 --> 00:48:07,440
following reasons. The position is
vacant due to attrition. The position is

580
00:48:05,440 --> 00:48:12,000
vacant because it is an added extra
position and remains vacant. The

581
00:48:10,000 --> 00:48:16,480
provision The position remains vacant
because No recruitment was conducted,

582
00:48:14,560 --> 00:48:22,640
the position is vacant because it is a
proposed new position in the fiscal year

583
00:48:18,640 --> 00:48:28,079
2026 27 budget or the position remains
vacant because the incumbent was

584
00:48:24,319 --> 00:48:32,240
promoted. The fiscal year 2026 27
proposed budget does not recommend that

585
00:48:29,920 --> 00:48:35,760
any active employee be subject to
layoff, nor does the city manager

586
00:48:34,240 --> 00:48:39,119
project the need to meet with any
bargaining groups to discuss layoff

587
00:48:37,599 --> 00:48:43,760
procedures.
The city council is advised that due to

588
00:48:41,200 --> 00:48:48,720
employee attrition and positioning by
the MFA bargaining group, city staff is

589
00:48:46,880 --> 00:48:53,040
in conversation with the San Bernardino
County Fire Protection District

590
00:48:50,800 --> 00:48:58,880
regarding fire protection emergency
services, a process that would result in

591
00:48:55,520 --> 00:49:04,559
transitional position layoffs.
So, here's a list of the frozen vacant

592
00:49:01,359 --> 00:49:10,079
positions. There are five uh departments
involved and it's saving uh just a

593
00:49:07,119 --> 00:49:15,599
little over 1 million uh with us
freezing these positions. If not, our

594
00:49:11,760 --> 00:49:20,640
deficit would be over 1.6 million.
>> Let's stop there for a second. So I just

595
00:49:17,839 --> 00:49:26,319
last point Dan again is uh because these
positions are frozen

596
00:49:22,800 --> 00:49:31,520
um it wasn't frozen this you said that
the deficit would be 1.6 million

597
00:49:29,200 --> 00:49:36,480
» and just want to clarify that with the
council and then uh uh the bargaining

598
00:49:34,640 --> 00:49:41,920
negotiations.
Um so if you obviously we're still in

599
00:49:39,119 --> 00:49:47,440
labor negotiations, but if the council
did approve any personnel

600
00:49:45,920 --> 00:49:52,240
adjustments
in compensation uh that could add on to

601
00:49:50,240 --> 00:49:56,800
the deficit.
>> That is correct. My anticipation could

602
00:49:54,480 --> 00:49:59,280
add 500,000 to $1 million to the
deficit. Okay.

603
00:49:57,599 --> 00:50:03,280
» And Mr. Mayor, if I may, I just want to
backtrack to the uh sphere of influence

604
00:50:01,599 --> 00:50:08,480
issue. And I want to congratulate and
thank our fire chief Ryan Derk who was

605
00:50:05,839 --> 00:50:14,800
instrumental in addressing this issue
and working with city staff. U he uh

606
00:50:12,880 --> 00:50:18,960
generated a significant amount of
information related to this issue and I

607
00:50:17,119 --> 00:50:23,760
do want to commend him for his effort in
working with us uh to bring this issue

608
00:50:21,680 --> 00:50:28,160
to the forefront so that we could move
forward in addressing this with the

609
00:50:25,520 --> 00:50:30,720
county. I'm sorry. The issue again is
I'm sorry

610
00:50:29,040 --> 00:50:35,119
» would be the sphere of influence issue.
The issue related to providing fire

611
00:50:32,880 --> 00:50:38,720
protection services to the sphere of
influence to the former Mont Vista Fire

612
00:50:37,520 --> 00:50:43,280
Protection District.
>> Okay. U and and and going back to labor

613
00:50:41,440 --> 00:50:49,040
negotiations
and obviously we're not talking about it

614
00:50:44,880 --> 00:50:53,520
here. Uh but uh obviously there's you're
working on it. You know, we're in labor

615
00:50:50,880 --> 00:50:59,680
negotiations right now. Uh but this
makes the council aware that the deficit

616
00:50:57,040 --> 00:51:02,559
could be added based on how labor
changes go. So

617
00:51:00,960 --> 00:51:07,440
» yes, it's probably the best thing for us
to do. We'll have that conversation in

618
00:51:04,800 --> 00:51:12,640
close session during negotiations. All
right. C May 10 Martinez.

619
00:51:10,160 --> 00:51:16,200
» Yeah. Could you explain transitional
position layoffs

620
00:51:16,720 --> 00:51:21,680
37 very bottom?
>> All right. That issue is in relation

621
00:51:19,520 --> 00:51:28,160
again to the discussions with county
fire in the potential issue related to

622
00:51:25,280 --> 00:51:32,960
annexation into or contracting with the
county fire protection district. The

623
00:51:30,160 --> 00:51:38,240
county fire would have to vet each one
of the employees and there is not always

624
00:51:36,079 --> 00:51:43,280
the possibility that every employee will
be picked up. However, the general

625
00:51:40,240 --> 00:51:48,319
process in relation to uh annexation,
not contracting, but at least in

626
00:51:45,040 --> 00:51:53,359
relation to annexation, is that uh
employees are technically laid off and

627
00:51:50,960 --> 00:51:56,960
then hired back by County Fire
Protection District.

628
00:51:55,040 --> 00:52:01,200
» And that's typically what would happen,
assuming we pass all of this. Yes, that

629
00:51:58,960 --> 00:52:05,280
is exactly what will happen. If we if
the city ultimately had to make the

630
00:52:03,440 --> 00:52:10,960
decision that annexation was the only
way to keep the fire department uh uh

631
00:52:07,520 --> 00:52:17,040
operating functionally, um then that is
what the county would require is that uh

632
00:52:15,520 --> 00:52:21,040
in order for these employees to be
picked up by the county, they have to be

633
00:52:19,040 --> 00:52:23,760
laid off by the city and then rehired by
the county.

634
00:52:22,960 --> 00:52:30,800
» Okay. Thank you.
>> Yes, Council Member Mendes.

635
00:52:27,680 --> 00:52:38,559
Uh yeah, just um quick question. Um as
far as full-time positions, I know for

636
00:52:33,440 --> 00:52:44,000
22 20 or 26 27, we're saying 205
full-time positions, and that's minus

637
00:52:41,119 --> 00:52:51,119
the nine full-time
um that um are funded positions, but

638
00:52:48,240 --> 00:52:57,839
we're freezing those. So technically we
currently have uh 20 what 14 full-time

639
00:52:56,160 --> 00:53:02,079
positions. We're just not
>> No, that the 205 includes the nine that

640
00:53:00,319 --> 00:53:03,920
are unfunded because they're still in
the budget but they're just

641
00:53:03,200 --> 00:53:08,920
» still funded. Yeah.
>> Yeah.

642
00:53:04,720 --> 00:53:08,920
» Okay. So those are funed.

643
00:53:09,520 --> 00:53:15,079
» And then I just have one other thing.
Sorry.

644
00:53:19,119 --> 00:53:25,440
That was it. Thank you.
>> Thank you very much. Uh we'll go on to

645
00:53:22,720 --> 00:53:30,640
the next section.
>> General fund special purpose funds.

646
00:53:28,880 --> 00:53:35,119
Special purpose funds established to
address current and future liabilities,

647
00:53:32,800 --> 00:53:39,599
programs, projects, and goals requiring
a commitment of funds not incorporated

648
00:53:37,040 --> 00:53:44,720
into the general fund operating budget.
The CalPERS unanticipated normal cost

649
00:53:42,079 --> 00:53:49,280
retains 3.5 million for CalPERS and
post-employment liabilities.

650
00:53:47,040 --> 00:53:55,200
Technology enhancements account retains
$643,045

651
00:53:51,839 --> 00:54:00,319
for techn technology acquisitions.
The self- insurance fund retains 1.6

652
00:53:57,680 --> 00:54:05,440
million for city related self- insurance
retention liabilities. The building

653
00:54:02,720 --> 00:54:09,920
maintenance fund retains 1.8 million for
building maintenance.

654
00:54:07,760 --> 00:54:14,720
Unanticipated personnel adjustment fund
retains 1 million for unanticipated

655
00:54:12,400 --> 00:54:20,640
personnel related expenditures.
Equipment replacement fund retains oops

656
00:54:17,839 --> 00:54:25,200
we lost some numbers there um just a
little over 1.2 million for equipment

657
00:54:22,800 --> 00:54:28,680
acquisitions. This reflects a reduction
of $597,799

658
00:54:29,040 --> 00:54:39,040
towards fiscal year 202627 capital
outlay purchases. The OPE retiree

659
00:54:35,440 --> 00:54:46,079
medical liability retains $2 million for
other postmployment benefits.

660
00:54:42,160 --> 00:54:52,880
Contingency account retains $79,821
for unanticipated expenditures.

661
00:54:49,040 --> 00:54:58,640
The UAL POB amortization service fund is
at $0 right now for unanticipated UL

662
00:54:55,839 --> 00:55:04,400
charges. Parking facility development
retains 9.5 million for parking facility

663
00:55:01,440 --> 00:55:09,599
development. Tariff recession inflation
fiscal expenditure control fund retains

664
00:55:06,800 --> 00:55:15,920
$1 million for unanticipated cost
increases.

665
00:55:12,559 --> 00:55:19,440
Uh, A-ine Betterment Fund retains 1.75
million for improvements to

666
00:55:17,119 --> 00:55:23,760
infrastructure for the A-line light rail
system at Monavista Avenue and the

667
00:55:21,599 --> 00:55:28,160
Montclair Trans Center. Street
Maintenance Fund retains 1.25 million

668
00:55:26,079 --> 00:55:34,559
for street maintenance and the
homelessness advocacy housing outreach

669
00:55:30,319 --> 00:55:40,480
assistant fund retains $330,633
for homelessness aid. Total estimated

670
00:55:37,520 --> 00:55:45,599
all special purpose funds is 25.3
million after proposed equipment

671
00:55:43,440 --> 00:55:50,240
replacement fund uses is that's will be
our balance. Reminder, all major capital

672
00:55:48,319 --> 00:55:54,000
outlay will require approval from the
city manager before purchase orders will

673
00:55:52,640 --> 00:55:56,880
be issued.
>> We'll stop there for a second. Did you

674
00:55:55,440 --> 00:55:59,280
have a question?
>> Yeah, on that. Yeah,

675
00:55:58,000 --> 00:56:06,480
» go ahead.
>> Yeah. Um so on all these special funds

676
00:56:03,280 --> 00:56:12,880
um that these monies are obviously
almost like a reserve ed technically.

677
00:56:10,559 --> 00:56:16,480
» Well they are uh yes in the reserve
fund. Yes. They are designated for

678
00:56:14,720 --> 00:56:19,839
special purposes and can only be used
for those special purposes

679
00:56:17,520 --> 00:56:22,799
» and they can only be used for those
>> unless the council redirects that they

680
00:56:21,760 --> 00:56:25,119
be redirected. Yes.
>> Because it's general fund money.

681
00:56:24,559 --> 00:56:31,359
Correct.
>> Yes. Um and then does that include the

682
00:56:28,559 --> 00:56:34,319
three lease revenue bond u amounts that
are left?

683
00:56:32,319 --> 00:56:41,200
» No, those monies are allocated
separately uh so that they are committed

684
00:56:38,160 --> 00:56:44,400
to those funds specifically and have no
bearing on other general fund

685
00:56:42,880 --> 00:56:48,079
operations.
>> Okay, that's all I have.

686
00:56:45,760 --> 00:56:52,559
» Yeah. And just on this uh I know the
park facility development the $9.6

687
00:56:50,960 --> 00:56:58,160
million
and uh we were looking at using money

688
00:56:55,280 --> 00:57:02,960
for real estate transaction or purchase
and uh those deals have fallen apart. So

689
00:57:00,880 --> 00:57:05,920
we still have this $9.6 million. Am I
correct that?

690
00:57:04,240 --> 00:57:08,319
» That is correct. You know, I wouldn't
say that the deals have fallen apart.

691
00:57:07,680 --> 00:57:11,599
It's just that
>> as of right now those deals are

692
00:57:10,000 --> 00:57:15,280
» the owners have asked for more money
than the city is willing to pay.

693
00:57:12,960 --> 00:57:19,520
» All right. So that that potentially
could drop depending on those real

694
00:57:17,119 --> 00:57:21,920
estate deals we decide to purchase those
properties.

695
00:57:20,240 --> 00:57:26,799
» Yes. Yeah. That is correct.
>> To answer my questions, my colleagues

696
00:57:23,760 --> 00:57:33,839
questions. Um on the uh on the reserves
yeah our un undesated reserves is what

697
00:57:30,240 --> 00:57:37,040
14 point something budget what is it J
we have 14 point something

698
00:57:35,440 --> 00:57:38,880
» the undesated reserve
>> are you talking about special purpose

699
00:57:38,400 --> 00:57:42,160
funds
>> no no the

700
00:57:39,920 --> 00:57:44,079
» the unassigned reserve is 5.4 million
>> thank you

701
00:57:42,960 --> 00:57:46,720
» 5.4 4 million.
>> Yeah.

702
00:57:44,960 --> 00:57:49,200
» Which is about 14
>> 13.

703
00:57:47,520 --> 00:57:56,400
» Yeah. 134%.
>> However, if we take this amount, the 25

704
00:57:51,599 --> 00:58:01,680
million, this gets us up to like 66 67%.
Again, this is this is if you know

705
00:57:59,200 --> 00:58:07,040
things get pretty dramatic in the fiscal
year and so we have these these these

706
00:58:03,920 --> 00:58:11,680
funds for cash flow purposes and gives
us the time to figure out what we're

707
00:58:08,480 --> 00:58:16,240
going to do. So,
>> yes. So, just to give you an example,

708
00:58:13,599 --> 00:58:23,040
you talk about the UL uh alloc or I'm
sorry, the allocation for opeps. The

709
00:58:19,920 --> 00:58:29,920
goof prefers that cities commit funding
into trust funds. And in our case, the

710
00:58:26,319 --> 00:58:36,240
cost to pay for our um opeds, our other
post-employment benefits would be about

711
00:58:32,240 --> 00:58:40,000
$9.5 million. Um and GOAF would want us
to put nine and a half million dollars

712
00:58:37,680 --> 00:58:47,280
in trust funds. that money is restricted
and it can only be used for uh paying

713
00:58:43,040 --> 00:58:53,040
off ops. We use a pay as you go system.
But in allocating money to the uh

714
00:58:50,400 --> 00:58:57,599
special purpose fund that we have here
in our opinion and the way that it

715
00:58:54,799 --> 00:59:02,799
appears to be working is that that money
is separately designated for opeds in

716
00:59:00,480 --> 00:59:07,680
the event that we need to draw on that
uh because of an increase in opeds. We

717
00:59:05,359 --> 00:59:15,200
believe that our process has effectively
worked uh because if you'll recall back

718
00:59:11,520 --> 00:59:22,400
in the early 2000s, there was a workshop
presentation to the city council by a

719
00:59:18,960 --> 00:59:29,040
auditor who projected that Montlair's
opeds would be around 12.5 million and

720
00:59:26,480 --> 00:59:34,480
continue to increase. But the city has
effectively controlled uh the cost of

721
00:59:31,839 --> 00:59:42,640
other post-employment benefits. And in
fact, our costs to OPB have declined

722
00:59:38,480 --> 00:59:48,319
from that $12.5 million at that time to
$9.4 million now. And so having put this

723
00:59:46,319 --> 00:59:52,240
money in a trust and restricting it only
for that and h not having it available

724
00:59:50,559 --> 00:59:56,960
uh to the city for other purposes would
not have been to the best interest of

725
00:59:54,240 --> 01:00:02,880
the community. And so I believe that our
process has paid off and uh we continue

726
00:59:59,520 --> 01:00:08,880
to see that oped come down through our
controlling mechanisms.

727
01:00:05,599 --> 01:00:14,480
» At any budget you uh you know long very
long budget message. Um you talked about

728
01:00:12,079 --> 01:00:18,880
the risk factor. Um I think the
department controllers department state

729
01:00:16,559 --> 01:00:24,000
controller did one about five or six
years ago and staff went back. So what

730
01:00:20,960 --> 01:00:29,119
what is the health of our budget based
on the controllers's office method?

731
01:00:27,040 --> 01:00:32,640
» Right. So I believe that our the health
of the city's budget has improved

732
01:00:30,799 --> 01:00:38,880
significantly since then in large part
to measure L uh but also begin again as

733
01:00:36,480 --> 01:00:43,839
I indicated in relation to the oped uh
before where we have received maybe a

734
01:00:41,040 --> 01:00:47,680
high risk factor in that area because of
the amount of our oped but because we

735
01:00:45,520 --> 01:00:54,720
control it and the oped has actually
come down to $9.4 4 million. Uh I would

736
01:00:51,200 --> 01:01:01,280
rate us as I do in that uh in that graph
at moderate. And so while we have seen

737
01:00:58,400 --> 01:01:07,599
some increases back up from last year
primarily because of the u downturn in

738
01:01:05,200 --> 01:01:12,480
the economy overall, I would still say
that Montlair is between low and

739
01:01:10,400 --> 01:01:17,960
moderate in our risk.
>> Thank you. Okay, let's move on.

740
01:01:19,520 --> 01:01:29,760
So our 2014 issue of lease revenue bonds
payment period fiscal year 2014 to 2045.

741
01:01:27,760 --> 01:01:36,000
So the issue amount for this bond was
$45 million. Purpose was to defease

742
01:01:32,960 --> 01:01:40,640
balance of the 2005 issue which was used
for police facility and youth and senior

743
01:01:38,000 --> 01:01:45,440
center projects. Approximately $22
million for public works infrastructure

744
01:01:42,799 --> 01:01:50,400
projects. The 2014 issue of lease
revenue bond funds have been exhausted.

745
01:01:47,760 --> 01:01:56,240
Annual debt service approximately 2.6
million through fiscal year 20445.

746
01:01:54,160 --> 01:02:02,720
Funding source for annual debt service
is the general fund revenue and for

747
01:01:59,200 --> 01:02:05,720
fiscal year 2026 27 the payment will be
2,597,163.

748
01:02:08,240 --> 01:02:18,160
The 2021 issue of lease revenue bonds
payment period fiscal year 2022 to 201.

749
01:02:15,839 --> 01:02:22,240
The issue amount for this bond was $45
million. The purpose complete

750
01:02:20,559 --> 01:02:27,119
infrastructure improvement projects
throughout the city. Remaining balance

751
01:02:24,559 --> 01:02:31,920
approximately $20 million retained to
primarily function as a matching source

752
01:02:29,520 --> 01:02:37,520
for grants. Annual debt service
approximately $2.4 million through

753
01:02:34,720 --> 01:02:41,760
fiscal year 205051.
Funding source for annual debt service

754
01:02:39,280 --> 01:02:47,559
is general fund revenue. Payment for
fiscal year 2026 27 is 2,396

755
01:02:48,160 --> 01:02:51,160
$2,396,313.

756
01:02:52,640 --> 01:03:00,319
Our 2021 issue of pension obligation
bonds payment period fiscal year 2021 to

757
01:02:58,559 --> 01:03:06,079
2041.
The issue amount of this bond was 62.1

758
01:03:03,359 --> 01:03:10,400
million dollar. The purpose transfer
debt from the city's California public

759
01:03:07,920 --> 01:03:15,200
employees pension system unfunded
acrewed liability account to the pension

760
01:03:12,480 --> 01:03:20,240
obligation bond. Annual debt service
approximately 4.4 million through fiscal

761
01:03:18,079 --> 01:03:24,960
year 204041.
Funding source for annual debt service

762
01:03:22,079 --> 01:03:29,960
is the general fund. Uh the payment for
2026 27 is $4,434,713.

763
01:03:32,240 --> 01:03:39,200
» Okay, let's talk for a second.
Council Mendez.

764
01:03:36,720 --> 01:03:44,400
» Yeah. So, um, my questions on these are
obviously two of them have zero

765
01:03:41,280 --> 01:03:48,559
balances, one has a $20 million balance.
Uh, do we we collect interest on that?

766
01:03:47,119 --> 01:03:53,920
Correct.
>> Yeah. Yes, we do. But we are prohibited

767
01:03:51,280 --> 01:03:59,440
from collecting excessive uh interest
and any insert any interest rate above

768
01:03:57,280 --> 01:04:04,960
or any interest acrruel above a certain
amount we have to return to the bond

769
01:04:03,280 --> 01:04:10,799
agencies
>> like what type of percentage is it like

770
01:04:07,280 --> 01:04:16,400
a 3% interest rate or
>> I believe it's above the the bond rate

771
01:04:15,440 --> 01:04:19,599
itself.
>> Yeah. So anything above that we're not

772
01:04:18,400 --> 01:04:24,559
allowed to keep. Mhm.
>> So, for example, I believe uh maybe last

773
01:04:22,240 --> 01:04:28,559
year, uh we probably made around $4
million in interest and and had to

774
01:04:26,720 --> 01:04:32,400
return $3 million because we're not
allowed to hold it. You're not you are

775
01:04:30,240 --> 01:04:37,119
not by arbitration laws, you are not
allowed to make uh income off of

776
01:04:35,920 --> 01:04:41,119
borrowed funds.
>> And that money that you got to pay back

777
01:04:38,559 --> 01:04:44,720
doesn't reduce our balance. Correct.
>> Well, it doesn't reduce the whole

778
01:04:42,880 --> 01:04:47,280
balance. No, that we originally
borrowed. That is correct. Only the

779
01:04:46,319 --> 01:04:52,880
interest amount.
>> Yeah. And then as far as um the rates

780
01:04:51,039 --> 01:04:55,440
that that we're paying, are are they
fixed rates or they

781
01:04:54,000 --> 01:04:58,799
» the debt service payment?
>> It varies every year, but very

782
01:04:57,119 --> 01:05:01,039
minimally. Maybe, you know, a couple
thousand dollars.

783
01:05:00,559 --> 01:05:04,720
» So,
>> yeah. And I think actually on one of the

784
01:05:02,640 --> 01:05:09,280
previous slides, the debt service
payments went up like $1,817

785
01:05:07,839 --> 01:05:11,680
for next fiscal year.
>> So, it just kind of fluctuates up and

786
01:05:10,799 --> 01:05:14,559
down just a little bit.
>> But is there like a limit that I mean,

787
01:05:13,440 --> 01:05:19,599
obviously, it's probably written
somewhere where the bond documents each

788
01:05:17,359 --> 01:05:22,319
year it tells me how much I we need to
pay.

789
01:05:20,160 --> 01:05:26,720
» I mean but is there like a max like it
cannot go over 1% you know increase

790
01:05:25,039 --> 01:05:32,559
annually or
>> No I mean it's already when when the

791
01:05:29,280 --> 01:05:34,640
when we get the bonds it's already laid
out for the entire

792
01:05:33,920 --> 01:05:39,520
» Yeah. Right.
>> So it it it once it's set in those bond

793
01:05:37,520 --> 01:05:43,920
documents it doesn't change.
>> Yeah. It's not a surprise. We know each

794
01:05:41,440 --> 01:05:48,960
year what to plan for because we receive
the depending on the payback period, 30

795
01:05:46,720 --> 01:05:52,880
years, 40 years, we know what what each
annual payment will be.

796
01:05:50,880 --> 01:05:58,000
» Somewhat somewhat fixed with a little
bit of adjustment.

797
01:05:54,079 --> 01:06:03,839
» Okay. And um
that's all I have right now on that one.

798
01:05:59,680 --> 01:06:08,240
» Yeah. I'm going to on 47 the $20 million
uh obviously that that's money for

799
01:06:06,559 --> 01:06:14,240
projects to do capital improvement
projects. Um Are we getting close to

800
01:06:11,839 --> 01:06:16,720
some projects, Ed, or I know we've got
street projects. I know we talked about

801
01:06:15,760 --> 01:06:20,880
Saratoga.
>> We have a a significant number of

802
01:06:18,480 --> 01:06:24,480
projects that are being prepared for
moving forward. Some of them just

803
01:06:22,720 --> 01:06:28,319
require some additional funding and
we're hoping for uh grants for that

804
01:06:26,720 --> 01:06:32,960
purpose. We have a number of grants that
are outstanding and we are just waiting

805
01:06:30,400 --> 01:06:38,799
to receive information as to whether or
not we are successful on those grants.

806
01:06:35,119 --> 01:06:45,200
Uh every month we meet with our grant
advisor in this case Alyssa Colunga and

807
01:06:42,079 --> 01:06:49,920
uh Blae to go over potential grants that
we can additionally apply for. So the

808
01:06:47,119 --> 01:06:56,240
city has a significant number of grants
currently uh in play uh ready to be

809
01:06:53,920 --> 01:07:02,319
spent as well as ones that we are
applying for. And I I assume a lot of

810
01:06:58,559 --> 01:07:10,640
the projects uh the planning stage is uh
the design stage is either in design or

811
01:07:06,319 --> 01:07:13,839
almost completed or design completed uh
close to where we can go out and do bids

812
01:07:12,640 --> 01:07:19,280
on some of these projects.
>> Well, it depends on the grant. Some of

813
01:07:15,599 --> 01:07:22,400
them require that you be shovel ready,
>> right?

814
01:07:19,599 --> 01:07:27,599
» U and we do strive to be shovel ready
with every project that we have. Others

815
01:07:25,119 --> 01:07:33,520
uh simply require that uh we're only
paying for engineering services or for

816
01:07:30,559 --> 01:07:37,119
studies related to doing the project and
others are for the construction. So it

817
01:07:35,359 --> 01:07:40,480
just depends on the depends on the
project. It depends on the grant.

818
01:07:38,640 --> 01:07:48,400
» All right, let's talk about pension real
fast. So we did this back in uh 2122

819
01:07:44,880 --> 01:07:53,599
whenever it was. Back then we had five
we were paying addition out what five

820
01:07:50,079 --> 01:07:57,839
million 5 point something million a year
at that time did the bonds we got it

821
01:07:56,400 --> 01:08:04,160
down to 4.4
came with the policy. The difference is

822
01:08:00,079 --> 01:08:09,200
we'll go into the special the special uh
purpose fund. However, the last two

823
01:08:07,039 --> 01:08:13,920
years we've been hit with an additional
unfunded liability. This year being what

824
01:08:11,680 --> 01:08:19,520
3.5
million, last year being 2 something

825
01:08:17,440 --> 01:08:24,719
million. Of course, the year before it
was zero. So basically uh versus two

826
01:08:22,640 --> 01:08:29,600
years ago, we're now dishing out an
additional 3.5 million uh for pension

827
01:08:28,159 --> 01:08:36,000
that could be used for other things in
the city, including uh salary increases,

828
01:08:32,719 --> 01:08:39,600
adjustments. So Ed, I talked about this,
but maybe for the council's education,

829
01:08:38,000 --> 01:08:43,679
where do you think this is going? I know
there's there's been improvement in the

830
01:08:41,199 --> 01:08:46,640
stock market for Kalpers, but can you
kind of, you know, educate us a little

831
01:08:45,839 --> 01:08:51,279
bit on this?
>> Right. So this year or at least next

832
01:08:48,719 --> 01:08:57,359
year the estimated uh UL will be about
$3.8 million as you indicated. Um

833
01:08:54,239 --> 01:09:03,600
however Kalpers did perform quite well
last year. They came in at 11.1% which

834
01:09:00,960 --> 01:09:11,120
is above their 6.8%
uh on their uh standard residual. And so

835
01:09:06,719 --> 01:09:17,199
we believe that if end of year 2026, so
June 30, 2026, if Kalpers demonstrates

836
01:09:14,640 --> 01:09:22,239
another positive year performance, uh
their board will meet and we expect that

837
01:09:19,199 --> 01:09:26,239
that $3.8 million will be reduced. I
don't know the amount, but I'm hoping

838
01:09:23,839 --> 01:09:31,040
that it will come uh closer to the $3
million range. However, I do want to

839
01:09:27,679 --> 01:09:36,880
point out that had we not done the bond
back when we did, uh, that 5 million and

840
01:09:34,400 --> 01:09:42,640
a half $5.5 million payment that we were
making then would probably be closer to

841
01:09:40,239 --> 01:09:50,239
a $9 million payment right now. So, even
though the UAL uh is up to the $3.8

842
01:09:47,359 --> 01:09:55,199
million, if we pay that off, it takes us
back to a zero. It's to our interest to

843
01:09:52,640 --> 01:10:01,679
pay it back pay it off every year. So we
don't acrue the 7 point 7% interest that

844
01:09:58,960 --> 01:10:07,120
Kalpers applies. Uh that is our
objective. We've been able to do that.

845
01:10:04,640 --> 01:10:13,920
But do keep it in perspective that if we
did not do that, even if you add that

846
01:10:09,760 --> 01:10:19,920
$3.8 million onto the $4.5 million
payment that we are making based on the

847
01:10:17,040 --> 01:10:24,880
terms of the bond. If we did not do
that, we would be paying up to $9

848
01:10:22,400 --> 01:10:29,679
million to CalPERS annually at this
point anyway. And that number would

849
01:10:27,360 --> 01:10:36,800
continue to increase, my estimation, at
least through 2030, if not beyond.

850
01:10:33,600 --> 01:10:42,640
» Yeah. And that's, you know, that's uh
well, if you take the 4.4 we're paying

851
01:10:39,920 --> 01:10:46,719
now plus a 3.8, that puts us in the
about 20% of our general fund is just

852
01:10:44,640 --> 01:10:52,960
going to pay off Calves.
>> Yeah. 1.4 million on top of that then

853
01:10:51,040 --> 01:10:58,159
we're getting closer to 25% of our
general fund.

854
01:10:54,239 --> 01:11:03,840
» So um you know disturbing
I don't say disturbing it just that's

855
01:11:00,000 --> 01:11:08,320
the reality and uh you know that's this
is something we've been dealing with for

856
01:11:05,199 --> 01:11:14,000
the last 15 years. We thought we got to
21 we'll be in good shape and now here

857
01:11:10,560 --> 01:11:21,159
is the 3.3 or 3.8 million surprise we're
dealing with. But I'll move on and we'll

858
01:11:17,120 --> 01:11:21,159
go on to the conclusion.

859
01:11:22,080 --> 01:11:29,360
» The fiscal year 2026 27 general fund
operating budget as presented to the

860
01:11:27,600 --> 01:11:35,040
city council for consideration. The
proposed fiscal year 2026 27 budget

861
01:11:32,640 --> 01:11:39,400
reflects a shortfall in revenues versus
appropriations of $631,544.

862
01:11:39,760 --> 01:11:45,640
The deficit is resolved by the proposed
transfer of $631,544

863
01:11:45,679 --> 01:11:54,080
from the unassigned general fund reserve
to produce a balanced budget. For fiscal

864
01:11:50,719 --> 01:11:58,400
year 2026 27, each city department was
provided flexibility in the preparation

865
01:11:56,159 --> 01:12:02,800
of their respective budget programs.
However, after budgets were submitted,

866
01:12:00,640 --> 01:12:08,880
it was necessary for the city manager to
reduce department budget requests by 3.9

867
01:12:06,320 --> 01:12:13,360
million across all funds and 3.6 6
million in relation to the general fund.

868
01:12:11,440 --> 01:12:18,800
Reductions were made using historical
data, expenditure details, actual and

869
01:12:16,080 --> 01:12:22,320
projected needs, and available funding.
The city manager directed the freezing

870
01:12:20,640 --> 01:12:27,679
of vacant positions in various
departments, saving just over $1 million

871
01:12:25,040 --> 01:12:33,320
in wage and benefit costs. Without this
action, the deficit would have grown to

872
01:12:30,320 --> 01:12:33,320
1,673,194.

873
01:12:35,040 --> 01:12:42,960
The estimated deficit for fiscal year
2026 27 may be adjusted due to the

874
01:12:40,239 --> 01:12:46,880
potential for added personnel costs as a
city has yet to complete labor

875
01:12:44,560 --> 01:12:51,840
negotiations with bargaining groups.
Until negotiations are completed, the

876
01:12:49,520 --> 01:12:56,560
estimated additional budgetary impact
remains unknown.

877
01:12:54,159 --> 01:13:00,400
With strate with strategies proposed in
this budget message coupled with

878
01:12:58,400 --> 01:13:04,480
anticipated long-term improvements in
the economy, the city manager

879
01:13:02,400 --> 01:13:09,840
anticipates the deficit will remain
limited in its scope and not extend to

880
01:13:07,040 --> 01:13:14,480
future fiscal years. Montlair's deficit
is manageable and does not represent a

881
01:13:12,000 --> 01:13:19,520
structural problem.
The fiscal year 2026 27 proposed budget

882
01:13:17,760 --> 01:13:27,560
incorporates the following debt service
funds. The 2014 issue of lease revenue

883
01:13:22,719 --> 01:13:27,560
bonds debt service fund 2,597,163.

884
01:13:28,560 --> 01:13:36,640
The 2021 issue of lease revenue bonds
debt service funds just over 2.3

885
01:13:33,520 --> 01:13:42,320
million. And the 2021 issue of pension
obligation bonds debt service fund 4.4

886
01:13:39,679 --> 01:13:47,280
million. The passage of measure L in
2020 greatly improved the city's revenue

887
01:13:44,480 --> 01:13:51,199
profile. However, sales and transaction
and use tax receipts are

888
01:13:48,640 --> 01:13:56,080
underperforming, and both measure L and
Measure F have become fully integrated

889
01:13:53,440 --> 01:14:01,199
into the city's operational profile, and
the revenue generated is necessary to

890
01:13:58,320 --> 01:14:05,280
meet ongoing obligations without excess
revenue available to enhance the

891
01:14:02,880 --> 01:14:11,520
unassigned and specialurpose general
fund reserve capacity.

892
01:14:08,560 --> 01:14:16,080
Going forward, city staff will routinely
look at fresh approaches for service

893
01:14:13,280 --> 01:14:20,880
delivery, continue to evaluate grants
and outside funding opportunities, seek

894
01:14:18,880 --> 01:14:26,640
to develop strategies to improve both
the appearance and infrastructure of the

895
01:14:23,040 --> 01:14:31,280
community, promote new revenue concepts,
pursue development of the city's

896
01:14:28,320 --> 01:14:35,600
commercial and residential base. promote
economic development opportunities by

897
01:14:33,360 --> 01:14:39,920
drawing on the city's past and effective
promotion of redevelopment.

898
01:14:37,840 --> 01:14:44,960
Continue to develop the partnerships for
investments not only in North Montlair

899
01:14:42,480 --> 01:14:48,320
but throughout the city and work with
regional, state, and federal

900
01:14:46,560 --> 01:14:54,239
representatives to promote efforts
designed to move Montclair forward.

901
01:14:51,840 --> 01:14:58,880
And that is the end of the presentation
for the city.

902
01:14:55,760 --> 01:15:05,320
» Okay. Any uh questions for uh city staff
on this? Council

903
01:15:02,320 --> 01:15:05,320
R.

904
01:15:08,800 --> 01:15:17,760
» First, I want to thank staff for all of
their hard work on this.

905
01:15:14,159 --> 01:15:24,560
It is not always easy to do this, but I
think they've done a commendable job.

906
01:15:21,280 --> 01:15:29,560
I have a couple of questions on things
more related to revenue than anything

907
01:15:26,560 --> 01:15:29,560
else.

908
01:15:30,400 --> 01:15:39,199
I'm looking at
>> globally the need to pull in more

909
01:15:36,640 --> 01:15:43,360
revenue.
>> One of the things I wonder if we could

910
01:15:41,840 --> 01:15:47,920
do
and I know I'll get beaten up for saying

911
01:15:45,040 --> 01:15:51,199
this so I'm already aware of it. What we
can do to bring in more gasoline

912
01:15:49,520 --> 01:15:54,800
stations.
They provide a tremendous amount of

913
01:15:52,719 --> 01:15:58,640
revenue.
The more we have in here, people will

914
01:15:56,560 --> 01:16:02,640
get off the freeway or as they commute
through town,

915
01:16:00,640 --> 01:16:06,640
purchase gasoline, and that's a revenue
source for us. Electric charging

916
01:16:05,199 --> 01:16:11,040
stations are wonderful, and I'm not
saying not to have them. They're great,

917
01:16:09,440 --> 01:16:16,159
but they don't provide the revenue that
a gasoline station does. Is there

918
01:16:13,840 --> 01:16:22,080
something we can do to try to get more
gas stations here? because I go back to

919
01:16:20,159 --> 01:16:27,199
oh the days of the Montlair heyday of
the Montlair Plaza there were gas

920
01:16:24,080 --> 01:16:30,719
stations everywhere up there and I'm
wondering if there's something we can do

921
01:16:28,640 --> 01:16:37,360
along those lines because that is a
great source of revenue. I realize cars

922
01:16:33,920 --> 01:16:42,960
are more fuel efficient so they're using
you know not as much gas but we could

923
01:16:40,640 --> 01:16:48,000
still get revenue from it. Is is there
any thought about that? Well, yes. In

924
01:16:46,159 --> 01:16:53,040
fact, right now Costco is expanding
their bays from eight bays to 16 bays.

925
01:16:50,800 --> 01:16:57,679
If you go to Costco, you'll see that the
construction is ongoing. It's a little

926
01:16:55,040 --> 01:17:02,800
bit problematic and we probably will
experience some revenue loss because of

927
01:16:59,840 --> 01:17:08,560
the uh difficulty in getting in and out
of Costco, but hopefully uh within the

928
01:17:05,679 --> 01:17:14,000
next four months, they'll complete the
project and that will double the bays

929
01:17:11,040 --> 01:17:20,239
from again 8 to 16. Costco also
expressed interest in uh developing an

930
01:17:16,560 --> 01:17:24,000
offsite gas facility in Montlair. We
don't know the status of that right now.

931
01:17:21,840 --> 01:17:27,600
We've given them a number of locations.
Uh and they are still weighing whether

932
01:17:25,760 --> 01:17:32,560
or not that will be something that they
would want to do in Montlair. Uh other

933
01:17:29,840 --> 01:17:38,080
gas stations, no there hasn't been much
interest in developing additional gas

934
01:17:35,360 --> 01:17:44,320
stations in Montlair, but Costco is the
leader and generating more facilities

935
01:17:41,120 --> 01:17:49,040
through Costco. uh certainly is to our
interest. At the same time, uh Montclair

936
01:17:46,640 --> 01:17:54,159
Place has toyed with the idea of
bringing a Sam's Club to the site and

937
01:17:52,239 --> 01:18:00,159
that would generate additional gas
station facilities if uh CIM did

938
01:17:57,440 --> 01:18:03,360
ultimately go that direction.
>> I'm glad to hear that because that's a

939
01:18:01,520 --> 01:18:08,320
great source of revenue. And again, I'm
not opposed to electric charging

940
01:18:06,239 --> 01:18:12,560
stations. Um
>> that's true. Keep in mind though that

941
01:18:10,480 --> 01:18:17,280
when it comes to gas, the gas tax
revenue generated by gasoline stations

942
01:18:15,120 --> 01:18:21,280
can only be used for transportation
infrastructure projects is not available

943
01:18:19,760 --> 01:18:28,080
for general fund operations.
>> But that would be a great use for them

944
01:18:23,679 --> 01:18:32,880
for uh our roads
repairs on that would be great. What we

945
01:18:30,719 --> 01:18:38,400
need to do, you know, maybe we could be
the leader in bringing in gasoline sales

946
01:18:35,679 --> 01:18:41,600
tax revenue. And again, before anybody
beats me up, I'm not opposed to electric

947
01:18:40,239 --> 01:18:45,360
charging stations. I think they're
important.

948
01:18:43,440 --> 01:18:51,480
It's another option, but they don't
bring in the revenue that a gas station

949
01:18:47,040 --> 01:18:51,480
does. Another question I have,

950
01:18:51,600 --> 01:18:58,960
I listened at a prior meeting where we
talked about believing in the free

951
01:18:56,000 --> 01:19:03,840
market, which I certainly do,
and that we need to be free market on

952
01:19:01,920 --> 01:19:07,440
certain things.
I would hope that it would include all

953
01:19:05,840 --> 01:19:12,000
businesses.
Um,

954
01:19:09,360 --> 01:19:16,480
you know, a business, let's say,
doughnut shop wants to locate in

955
01:19:14,159 --> 01:19:19,760
Montlair,
we shouldn't be turning them down. We

956
01:19:18,080 --> 01:19:25,440
should be doing everything we can to get
them in. Do they generate a lot of sales

957
01:19:22,159 --> 01:19:29,600
tax? No. I believe it's only on dine in
if I'm correct.

958
01:19:27,600 --> 01:19:33,920
But that's still some revenue. Maybe if
they generate 15,000 a year in sales

959
01:19:31,679 --> 01:19:38,480
tax. I don't know what they generate.
That would cover the cost of uh the

960
01:19:37,120 --> 01:19:42,960
office furniture we're buying for the
MAP program. I hope we get to the point

961
01:19:41,360 --> 01:19:46,480
of being more pro business. There's a
business that wants to be here. Let's

962
01:19:44,880 --> 01:19:51,199
see what we need to do to bring them in.
Doughnut shops are not a bad thing.

963
01:19:49,440 --> 01:19:56,000
Uh
other types of stores are not a bad

964
01:19:52,960 --> 01:20:00,640
thing. Retail is declining. So, we need
to figure out what we do to supplant the

965
01:19:57,760 --> 01:20:05,520
retail with something else. And I hope
we would start to look at that. Um, it

966
01:20:03,040 --> 01:20:08,480
distresses me when I hear, "Oh, well, I
don't think people would have wanted

967
01:20:06,640 --> 01:20:14,480
that.
What's wrong with bringing in

968
01:20:11,520 --> 01:20:20,320
sources of revenue? We need to really be
serious about that." And

969
01:20:18,000 --> 01:20:26,080
I think the last thing I want to look at
is I concur with a comment made at the

970
01:20:24,800 --> 01:20:31,199
first part of the meeting by Council
Member Mendes about uh we're cutting but

971
01:20:29,280 --> 01:20:36,400
we're still spend we're increasing the
budget in other areas. I understand

972
01:20:33,040 --> 01:20:39,280
that. But somebody at home who's sitting
there, they're they're not going to be

973
01:20:38,000 --> 01:20:45,040
able to do that with their private
budget. They're going to just have to

974
01:20:40,880 --> 01:20:50,640
cut cut. And so I don't understand the
expanding or increasing at a time when

975
01:20:48,640 --> 01:20:56,159
it's bad. I don't know if the economy is
going to recover next year or not. I

976
01:20:53,360 --> 01:21:00,320
can't predict that. But even if it does,
if we can set a base and start putting

977
01:20:58,880 --> 01:21:04,480
then more money away, that would be
good. Thank you.

978
01:21:02,159 --> 01:21:09,440
» So if I may, Mr. Mayor, the increase in
revenues is primarily related to grants

979
01:21:07,360 --> 01:21:13,120
and other revenues that come to the city
specifically for those projects. So

980
01:21:11,679 --> 01:21:17,440
either we spend the money on those
projects or we don't get the grant

981
01:21:14,560 --> 01:21:21,760
money. It isn't that the city is
securing uh new monies through the

982
01:21:19,600 --> 01:21:26,400
general fund and we're not spending them
on personnel or other services. These

983
01:21:24,080 --> 01:21:31,199
are typically grants or one-time monies
that are designed for specific purposes

984
01:21:28,719 --> 01:21:36,080
like for example SB509 which is designed
for uh public safety. We have to spend

985
01:21:34,400 --> 01:21:39,920
those monies or we continue to acrew
them but we can't spend them on other

986
01:21:37,679 --> 01:21:44,640
sources. We can only spend them on those
purposes. So, as long as that revenue

987
01:21:42,400 --> 01:21:50,320
comes in and it's available for us to
spend and while it looks like the budget

988
01:21:47,120 --> 01:21:55,679
is increasing because of those revenues,
keep in mind that it is a general fund

989
01:21:52,639 --> 01:22:01,120
that really is the key to the operations
of the city as far as personnel and the

990
01:21:59,440 --> 01:22:06,320
general services that we deliver to the
community. these other dollars that make

991
01:22:03,600 --> 01:22:10,639
it appear that the budget is growing
despite the fact that we project a

992
01:22:08,159 --> 01:22:15,440
deficit. Those dollars are either spent
on those specific requirements that the

993
01:22:13,760 --> 01:22:19,679
funding sources tell us that we can
spend them on or we don't spend them at

994
01:22:17,520 --> 01:22:23,280
all or we don't apply for those funds.
In which case then you're right, you

995
01:22:21,520 --> 01:22:26,960
wouldn't see the growth, but you
wouldn't also see the type of

996
01:22:25,440 --> 01:22:31,040
development activity that is occurring
in the Montlair despite the fact that

997
01:22:29,120 --> 01:22:36,560
the general fund may not be performing
to the level that it is.

998
01:22:34,159 --> 01:22:40,960
» Okay. Thank you, Council Mayor Pan
Martinez.

999
01:22:37,840 --> 01:22:47,199
» Thank you. Uh once again, I appreciate
the transparency in the report and the

1000
01:22:43,600 --> 01:22:51,520
numbers and even though this is uh not
ideal revenue-wise,

1001
01:22:49,600 --> 01:22:56,480
um I want to say thank you for the
creativity and the efforts with the

1002
01:22:54,880 --> 01:23:00,960
grants
um and and just putting it all out there

1003
01:22:58,639 --> 01:23:06,639
for us for our consideration. I think we
are a goodlooking city. I think we take

1004
01:23:04,639 --> 01:23:13,199
a lot of care of our residents and of
our city um and our city staff and I

1005
01:23:09,920 --> 01:23:18,080
like to see that continue happening. Um
but for what we're dealing with, this is

1006
01:23:16,080 --> 01:23:22,080
once again fantastic and thank you for
the effort and putting this together for

1007
01:23:20,080 --> 01:23:28,400
us.
>> Thank you, U Council Member Mendes.

1008
01:23:25,760 --> 01:23:33,199
» All right. First of all, just to um
piggy back on what Chris was just

1009
01:23:30,320 --> 01:23:39,440
saying. Yes. I I appreciate everything
that um you guys go through. I I know

1010
01:23:36,560 --> 01:23:45,280
that Mr. Ed over here is probably the
mastermind to most of these things um

1011
01:23:42,320 --> 01:23:50,560
because I see him here all the time and
I do appreciate him answering lots of my

1012
01:23:47,679 --> 01:23:54,239
questions at at personal times when no
one else is around. It's just it's it's

1013
01:23:52,480 --> 01:23:59,360
nice to be able to have somebody that's
available like that. But I do um

1014
01:23:56,960 --> 01:24:07,679
continue to have questions relating to
to things. Um one I I would definitely

1015
01:24:03,920 --> 01:24:13,920
love to see a
salary survey done with all of our local

1016
01:24:10,960 --> 01:24:20,239
surrounding cities. Um just to see where
our employees are so we can see and and

1017
01:24:16,880 --> 01:24:27,040
include health benefits. Um, with that
also, I I know I may have to pay a a fee

1018
01:24:24,560 --> 01:24:31,920
to to get the employees to do that, you
know, if we have that new rule come in,

1019
01:24:29,760 --> 01:24:36,639
but um I I'll be willing to pay for
that. That's a joke. That's people are

1020
01:24:34,800 --> 01:24:40,000
supposed to laugh, John.
>> Yeah. So, um,

1021
01:24:38,480 --> 01:24:42,000
» that was you personally will be willing
to pay.

1022
01:24:40,400 --> 01:24:45,280
» Yeah, that's that's what I'm saying.
That that new fee that we have

1023
01:24:44,080 --> 01:24:48,000
» three paychecks. You got you got a
pension paycheck. You got your web

1024
01:24:47,040 --> 01:24:52,880
paycheck.
Cal's paycheck. You can afford it.

1025
01:24:49,679 --> 01:24:57,040
» Yeah, I'll pay for that for sure. But um
I I just um I just want to make sure

1026
01:24:55,280 --> 01:25:02,719
that you know we're I want to see where
our short falls are and you know and try

1027
01:25:00,480 --> 01:25:08,320
to focus maybe on that in the next years
or so to to try to get those divisions

1028
01:25:05,920 --> 01:25:15,040
or departments um back up to where they
should be. Um,

1029
01:25:12,239 --> 01:25:19,440
as far as, you know, I, as I mentioned
earlier about the monies, I I understand

1030
01:25:17,280 --> 01:25:24,800
a lot of the funds and I understand a
lot of, you know, how these work. I I

1031
01:25:22,639 --> 01:25:32,400
was privy to be able to create my own
budgets for years and um but there's

1032
01:25:28,000 --> 01:25:36,320
still so much that I don't know and I I
would love to see us have another

1033
01:25:34,000 --> 01:25:42,639
workshop to allow us a little bit more
time to learn more about these special

1034
01:25:39,360 --> 01:25:46,080
funds um payments you know everything
that we can learn. I would I would

1035
01:25:44,480 --> 01:25:50,000
personally appreciate it. I'm not saying
everybody has to attend it, but I would

1036
01:25:48,000 --> 01:25:55,120
be willing to attend something or if
there's a class that I could take, I

1037
01:25:52,480 --> 01:26:00,000
would definitely take that. Um, but I
noticed, you know, going through all the

1038
01:25:57,120 --> 01:26:07,120
different um departments, that, you
know, some of them had increases,

1039
01:26:02,239 --> 01:26:10,880
including the city council um um budget.
I was just wondering who who's the one

1040
01:26:08,800 --> 01:26:14,639
that actually writes that up because it
shows that we were requesting an

1041
01:26:13,120 --> 01:26:19,920
additional
u more money than we asked and I I don't

1042
01:26:17,920 --> 01:26:24,480
remember ever telling anybody. So, I
just don't know who who's the one that

1043
01:26:21,360 --> 01:26:30,719
creates I'm assuming it's Ed. Um but
ours went up $20,000. City manager, your

1044
01:26:27,760 --> 01:26:37,520
your department went up $180,000.
Admin services 92,000. Human services

1045
01:26:33,920 --> 01:26:42,320
338,000. But which now I know is part of
the afterchool program. Is that a grant

1046
01:26:40,239 --> 01:26:45,679
also that we received that 300?
>> Yes. Yes.

1047
01:26:43,120 --> 01:26:51,199
» So so wonderful. See and I would love
that is important for us to know because

1048
01:26:49,120 --> 01:26:54,960
then it doesn't look like oh we're just
spending more money in human services

1049
01:26:52,960 --> 01:27:00,480
and you know because then you go down to
the police and sorry poor police you're

1050
01:26:57,360 --> 01:27:05,040
you're reducing by 450,000
you know on what you requested and what

1051
01:27:02,560 --> 01:27:10,080
you received. fire you guys increased
2.3 million almost and but I understand

1052
01:27:07,600 --> 01:27:15,360
why the grant you know the fire truck I
I get it I I understand those things but

1053
01:27:12,960 --> 01:27:20,080
having the understanding of those just
helps me and I think it would help the

1054
01:27:18,000 --> 01:27:25,920
residents not that we have any residents
here right now to to ask but it's

1055
01:27:22,800 --> 01:27:31,280
important um well I think if I may the
easy answer to a lot of your questions

1056
01:27:28,400 --> 01:27:36,800
just then are that a lot of costs are
driven by contract and contracts have

1057
01:27:34,080 --> 01:27:41,440
annual CPI adjustments associated with
them. We have no control over that.

1058
01:27:38,800 --> 01:27:44,800
» And so some budgets rise. So for
example, when you're talking about the

1059
01:27:42,719 --> 01:27:49,199
city manager's budget, that budget
incorporates refuge services. And refuge

1060
01:27:47,520 --> 01:27:52,639
services change significantly by
hundreds of thousand dollars on an

1061
01:27:50,560 --> 01:27:57,120
annual basis. We have to pay that. But
at the same time, that goes to the

1062
01:27:54,880 --> 01:28:03,600
increase in the revenue that you see and
speak about. So, if the uh if the cost

1063
01:28:01,280 --> 01:28:09,920
of providing refuge services increases
by $100,000 a year, it's also offset by

1064
01:28:07,360 --> 01:28:15,520
$100,000 in revenue. But the budget
still has to demonstrate that there's an

1065
01:28:12,400 --> 01:28:20,880
appropriation increase of $100,000, but
the revenue budget will also show an

1066
01:28:18,000 --> 01:28:24,960
increase in $100,000 to offset that.
>> Yeah. But that's how most of those

1067
01:28:22,480 --> 01:28:30,239
budgets are driven as far as cost
increases, contracts that commit us to

1068
01:28:28,400 --> 01:28:34,639
uh those adjustments.
>> Yes. And thank you for that. And that

1069
01:28:31,760 --> 01:28:38,400
comes to my last department um which
isn't a very old I don't think you've

1070
01:28:36,480 --> 01:28:44,080
had this one in there that long. I mean
probably 10 years or more. Uh citywide

1071
01:28:41,199 --> 01:28:48,480
that that um department it increased by
$1.175

1072
01:28:45,760 --> 01:28:52,639
million. And just maybe you could give
me a little bit more um education on how

1073
01:28:51,600 --> 01:28:57,280
why that one went out.
>> Sure. Easy answer on that is worker

1074
01:28:55,120 --> 01:29:02,239
compensation claims filed against the
city, uh lawsuits filed against the

1075
01:28:59,760 --> 01:29:07,199
city, the cost of electricity, the cost
of telephone services. So everything

1076
01:29:04,800 --> 01:29:11,360
that goes into the citywide budget are
those cost components there are shared

1077
01:29:09,600 --> 01:29:16,880
throughout the organization. Kalpers's
costs are in there. So, as the mayor

1078
01:29:13,840 --> 01:29:21,280
pointed out earlier, ULA increases,
increases in the normal service cost

1079
01:29:18,719 --> 01:29:27,520
range, those are no longer part of
individual bus uh of of individual

1080
01:29:24,800 --> 01:29:34,000
budgets uh for departments. That's all
now incorporated into citywide because

1081
01:29:31,280 --> 01:29:38,000
collectively we all have to pay for
those costs. They're not unique to the

1082
01:29:35,679 --> 01:29:43,280
police. They're not unique to human
services. They are common to the entire

1083
01:29:40,239 --> 01:29:49,120
organization and citywide in fact is
where the bulk of the cost increases

1084
01:29:45,920 --> 01:29:53,280
impact us because uh insurance is
skyrocketing.

1085
01:29:50,639 --> 01:29:57,840
Uh worker compensate claims are based on
the number of claims filed by uh

1086
01:29:55,520 --> 01:30:02,239
employees in the organization and
lawsuits based on whoever is filing a

1087
01:30:00,080 --> 01:30:06,880
lawsuit and of course we have no control
over the cost of electricity, water,

1088
01:30:04,880 --> 01:30:11,600
postage and other utilities and all that
is reflected in citywide.

1089
01:30:09,520 --> 01:30:17,679
» Okay. So I and I understand that and
thank you for that definition the 1.1.75

1090
01:30:15,199 --> 01:30:21,760
million increase but I know that we also
mentioned that this is where we get the

1091
01:30:19,440 --> 01:30:25,920
unfunded balance also of PERS which
increased by 3.8 million.

1092
01:30:23,520 --> 01:30:27,920
» Well it didn't increase by 3.8 million.
>> Oh

1093
01:30:26,400 --> 01:30:30,480
» that's it's up
>> to that but it didn't increase by that

1094
01:30:30,080 --> 01:30:33,760
amount.
>> What was it last year? Do we know?

1095
01:30:32,080 --> 01:30:38,400
» Not off the top of my head I don't. I'm
sorry.

1096
01:30:35,520 --> 01:30:45,040
» All right. Well, again, so this leads to
my my final question or request. Um, and

1097
01:30:43,120 --> 01:30:50,320
I talked a little bit to John about it
just a little bit ago, but I would

1098
01:30:47,600 --> 01:30:57,440
really, and I know staff may be upset
with me again doing this, but I would

1099
01:30:53,280 --> 01:31:02,719
love to receive this budget a minimum of
four to eight weeks before.

1100
01:31:00,080 --> 01:31:07,600
» Yeah. Well, if you look at every city in
California, it's 4 to 8 weeks and that's

1101
01:31:06,000 --> 01:31:14,000
the average.
>> When we are given a 778 page document to

1102
01:31:11,920 --> 01:31:19,199
review and then for us to sit up here
and vote on, I just don't feel like it's

1103
01:31:16,159 --> 01:31:24,880
enough time for me to give the best
answer to the to the people that put us

1104
01:31:22,320 --> 01:31:29,440
in here. And and I know you laughed just
now at it. No, and I understand what

1105
01:31:27,040 --> 01:31:32,719
you're saying, but it's it's a it's a
huge process.

1106
01:31:30,719 --> 01:31:34,239
» I know. I was involved with it. I I
understand.

1107
01:31:33,040 --> 01:31:39,199
» Not like not like
>> I I understand. I understand. But that's

1108
01:31:37,440 --> 01:31:44,639
your position. That's your job.
>> Yeah. And uh I just would love to see

1109
01:31:41,840 --> 01:31:49,440
us, you know, get this, you know, like I
said, four weeks in advance, you know,

1110
01:31:46,880 --> 01:31:53,840
rather than one week in advance, just
because, like I said, 778 pages to

1111
01:31:52,239 --> 01:31:59,760
review this and then all these other
supplements that we get, it's a lot. And

1112
01:31:56,880 --> 01:32:03,440
I really try to go through it and like I
said, if I can even have a class where I

1113
01:32:02,000 --> 01:32:07,840
can understand it better. I'm not trying
to be you. I'm not trying to be Ed. I'm

1114
01:32:06,159 --> 01:32:11,280
just trying to make the best decision I
can for the residents and the community.

1115
01:32:10,080 --> 01:32:13,920
That's all I want to do.
>> Well,

1116
01:32:11,920 --> 01:32:18,719
» understood. And if I may, Mr. Mayor,
before you you comment, um the only way

1117
01:32:16,880 --> 01:32:22,639
that we could achieve this is one of two
ways. And that is that we start the

1118
01:32:20,320 --> 01:32:27,920
budget process uh before the new
calendar year even begins, which is I

1119
01:32:26,239 --> 01:32:31,840
think a significant burden on the
departments because they don't really

1120
01:32:29,280 --> 01:32:36,480
understand uh necessarily where their
expenditures are yet. The other issue is

1121
01:32:34,239 --> 01:32:42,560
that there is no provision in law that
you adopt a budget by June the 30th. As

1122
01:32:39,920 --> 01:32:46,560
I I put in the budget at the very
beginning, a discussion of what a budget

1123
01:32:44,320 --> 01:32:50,880
is. And that is to demonstrate to you
that that we're not required to adopt a

1124
01:32:48,480 --> 01:32:55,520
budget. But if we don't, we run into a
number of complications. And so we can

1125
01:32:53,280 --> 01:33:00,320
bring the budget to you even in July for
your consideration. But you have to

1126
01:32:57,520 --> 01:33:05,120
understand we have no authorization to
spend money until you do effect give us

1127
01:33:03,120 --> 01:33:08,159
that authorization. So those are the
only two options that are available to

1128
01:33:06,400 --> 01:33:11,040
us. We start the process significantly
earlier or you adopt the budget later in

1129
01:33:10,159 --> 01:33:14,560
the year.
>> Well, let me interject here. First, you

1130
01:33:12,800 --> 01:33:18,800
can do a continue resolution to the next
fiscal year too. U you continue the

1131
01:33:16,800 --> 01:33:22,560
existing budget
to the new fiscal year and then then you

1132
01:33:20,960 --> 01:33:25,600
can adopt the budget later on. what
we're doing at Metroink. We're extending

1133
01:33:24,000 --> 01:33:29,840
that budget for three months because
obviously revenues for Metroink dropped

1134
01:33:28,480 --> 01:33:33,679
trying to figure out how to do service
levels. But I think the answer to the

1135
01:33:32,159 --> 01:33:38,159
first question is yeah four weeks is
kind of way in advance you know in this

1136
01:33:36,000 --> 01:33:41,040
budget. I I think what needs to happen
is, you know, we should have this budget

1137
01:33:39,600 --> 01:33:44,880
at least two weeks before this meeting,
at least two weeks. And I think that

1138
01:33:43,440 --> 01:33:51,040
during that period of time, there should
be some type of a or this is a workshop,

1139
01:33:47,280 --> 01:33:55,920
but a study a study workshop for the
council members, not in this

1140
01:33:53,520 --> 01:33:59,679
environment, perhaps at the library or
in the conference room or council

1141
01:33:57,679 --> 01:34:03,600
members to just ask questions to staff
and dig into it before this meeting

1142
01:34:01,840 --> 01:34:07,600
takes place. I don't know that could be
the study session maybe call study

1143
01:34:05,679 --> 01:34:11,600
session doesn't mean all the counselors
can come you know it will be a brown act

1144
01:34:10,159 --> 01:34:16,080
meeting we meet the brown act but it's
it's optional council members want to

1145
01:34:13,840 --> 01:34:20,159
attend the study session and they can
ask a lot of questions maybe another

1146
01:34:18,239 --> 01:34:24,800
thing needs to happen for this budget uh
if council me wants this and then if

1147
01:34:22,639 --> 01:34:32,320
there's interest maybe we there should
be a a a study session on the budget

1148
01:34:28,800 --> 01:34:37,440
this summer or this fall and Again, it's
held someplace else and uh council

1149
01:34:35,760 --> 01:34:41,520
members can ask a lot of questions, dive
into the budget with staff. U I will

1150
01:34:40,080 --> 01:34:44,800
recommend that and maybe that's the best
way to get the education.

1151
01:34:42,880 --> 01:34:48,560
» Okay? And that's fine, but I'm I'm
letting you know that your budget

1152
01:34:46,159 --> 01:34:52,639
message will be 10 to 20 pages. It will
not be the 120 pages

1153
01:34:51,040 --> 01:34:58,480
» that you get now that I'm I'm letting
you know you will not be getting 120

1154
01:34:55,679 --> 01:35:02,159
mill page budget message that explains
to you everything that's going on. you

1155
01:35:00,719 --> 01:35:05,520
will be getting what every other city
provides their city council and that's a

1156
01:35:04,239 --> 01:35:09,120
10-page budget decision.
>> Hey, okay, let's let's not get excited

1157
01:35:07,199 --> 01:35:15,760
here. Okay, what I'm trying to say here
is I understand among council I mean I

1158
01:35:13,360 --> 01:35:20,800
I've been doing this for 25 years and I
kind of count, you know, budget. I look

1159
01:35:18,880 --> 01:35:24,880
for certain things. I have a pretty good
understanding about the budget. I come

1160
01:35:22,159 --> 01:35:29,199
in talk to staff about it and make sure
I understand what's in the budget uh

1161
01:35:26,960 --> 01:35:32,560
before today's meeting. Yes, Ed, you're
correct because I don't know how many

1162
01:35:30,320 --> 01:35:35,600
cities budgets I go through and I look
at the budget message and it's crap.

1163
01:35:34,400 --> 01:35:39,440
There's nothing there. So, I don't
understand what's in the budget. What

1164
01:35:36,800 --> 01:35:43,520
I'm saying here is for the education of
at least council member Menddees,

1165
01:35:41,120 --> 01:35:48,320
somebody else perhaps council me if
nobody else is interested. Maybe you

1166
01:35:45,360 --> 01:35:53,760
want to have a meeting with staff
conference room, the theater room and

1167
01:35:52,000 --> 01:35:57,199
gives you an opportunity to go through
this current budget. Hopefully it was

1168
01:35:55,679 --> 01:36:00,480
adopted tonight and you get a better
understanding of that budget here and

1169
01:35:58,960 --> 01:36:04,239
maybe next year when we have the budget
session we kind of do the same thing at

1170
01:36:01,920 --> 01:36:09,520
the study session before this meeting
and

1171
01:36:05,760 --> 01:36:13,920
council members can engage it with staff
other questions. I understand we can't

1172
01:36:11,679 --> 01:36:17,600
hear this is a little more formal. I've
always encouraged my council colleagues

1173
01:36:15,600 --> 01:36:22,000
to try to meet with staff and ahead of
time on some of the bigger issues so you

1174
01:36:20,320 --> 01:36:26,000
get get your questions out of the way.
But perhaps perhaps there's a formal

1175
01:36:24,239 --> 01:36:30,080
setting where we have a study session
and again that's volunteer in which

1176
01:36:27,520 --> 01:36:33,679
councils want to show up and then uh be
under the Brown Act and then you can ask

1177
01:36:31,840 --> 01:36:38,560
a lot of questions in that format. So I
don't know that's

1178
01:36:35,679 --> 01:36:43,440
council MDZ is kind of asking for.
>> I'm actually open.

1179
01:36:40,320 --> 01:36:46,560
» I'm open to anything and I I'm you know
>> right

1180
01:36:44,159 --> 01:36:50,239
» I won't apologize for upsetting anybody
here but I I wasn't I don't think I'm

1181
01:36:48,560 --> 01:36:53,760
asking for anything that's out of the
question. Well, I think it's important

1182
01:36:51,600 --> 01:36:58,000
to council members to be educated. You
know, this, you know, the budget is a

1183
01:36:55,119 --> 01:37:01,520
hard one to understand. Um, but it's
important to council members be educated

1184
01:36:59,600 --> 01:37:08,320
and when they vote and what they're
voting on. So, yes, you know, if again,

1185
01:37:05,040 --> 01:37:13,040
so perhaps staff, Ed, U or C, I don't
know if anybody else interested, Council

1186
01:37:10,000 --> 01:37:18,320
Member Rue, Mayor Pin Martinez. I I just
feel to be honest like

1187
01:37:15,520 --> 01:37:23,679
Ed, if I was you and I wrote this budget
like you do, I would want more people to

1188
01:37:20,560 --> 01:37:28,000
read it and understand it and enjoy it.
I mean, it it's a major document and

1189
01:37:25,920 --> 01:37:32,080
yes, it it's something that I would like
to understand. So, I

1190
01:37:30,400 --> 01:37:35,600
» All right. So, maybe it sounds like I
mean, I don't need a study session, but

1191
01:37:33,679 --> 01:37:39,360
if you like to have a I mean, I'll be be
I'll be happy to participate in a study

1192
01:37:37,119 --> 01:37:44,560
session, I should say. Um but if you
like to have a study session then

1193
01:37:41,440 --> 01:37:48,159
perhaps uh staff can uh at least contact
you schedule one and it gives you a

1194
01:37:46,800 --> 01:37:51,679
chance at least go through this budget
you have a better understanding so when

1195
01:37:49,840 --> 01:37:56,639
we prepare for next year's budget
perhaps some of the things next year's

1196
01:37:54,159 --> 01:38:02,159
proposed budget you'll have you have
understanding why it's there u ahead of

1197
01:37:59,600 --> 01:38:06,960
time. Okay. And then and then maybe next
year we'll try to get the budget out two

1198
01:38:03,840 --> 01:38:11,679
weeks in advance and then again maybe a
study session if council members want to

1199
01:38:08,960 --> 01:38:16,800
meet with staff and and then ask
questions of the budget uh in that

1200
01:38:13,920 --> 01:38:20,800
format which is kind of informal uh as
opposed to in this format.

1201
01:38:18,239 --> 01:38:24,480
» Yeah. And if I may, Mr. Mayor, we do
always try to have the budget to you at

1202
01:38:22,400 --> 01:38:29,679
least two weeks in advance. You have to
keep in mind that this particular year

1203
01:38:26,880 --> 01:38:35,840
we had a lawsuit that staff was
preparing for. Uh we had a number of

1204
01:38:33,199 --> 01:38:41,119
other issues that staff was working on
and the budget was just in the middle of

1205
01:38:38,239 --> 01:38:45,679
all of that. And I I agree and I even
had this conversation with Janet and she

1206
01:38:43,440 --> 01:38:50,080
will agree that I was concerned that it
was not getting to you at least the two

1207
01:38:47,920 --> 01:38:53,840
weeks in advance. We did get it to you a
week and a half and I apologize for

1208
01:38:51,600 --> 01:38:57,360
that. But even to have this budget
session, we're still going to have to

1209
01:38:54,960 --> 01:39:01,520
have the budget done for you even in a
budget session, which does not remove

1210
01:38:59,679 --> 01:39:05,520
the responsibility from us of starting
the process earlier. It's the only way

1211
01:39:03,520 --> 01:39:10,320
that this is going to happen.
>> Yeah. So I I'm not ask I think right now

1212
01:39:07,760 --> 01:39:14,560
is let's just shoot for the two weeks
with the idea if invite the council

1213
01:39:12,719 --> 01:39:19,199
members they want to come to a special
session and just learn about it before

1214
01:39:17,040 --> 01:39:24,320
we actually have this workshop here.
Maybe that's the format for the next

1215
01:39:21,679 --> 01:39:29,440
year format. Um I know that council
member Midz you talked about salary

1216
01:39:26,000 --> 01:39:34,320
survey you brought that up. Um I think
we need to do is go through the

1217
01:39:31,040 --> 01:39:37,920
negotiations first. Maybe you know Ed, I
don't know if you want to opine on it on

1218
01:39:36,000 --> 01:39:39,119
this one here. I'm not sure exactly. I
mean

1219
01:39:38,159 --> 01:39:43,119
» I'm sorry what what
>> opine on the salary survey that was

1220
01:39:41,040 --> 01:39:46,960
brought up by council member Mendes. I
think first of all we need to go through

1221
01:39:44,159 --> 01:39:49,280
the we get through the council on we
need to get through negotiations.

1222
01:39:48,080 --> 01:39:52,639
Perhaps this is an item we should be
discussing in close session as well. I'm

1223
01:39:50,960 --> 01:39:55,679
assuming this if you want to do a salary
survey it should be discussed in close

1224
01:39:54,719 --> 01:39:59,760
session I'm assuming.
>> I I I agree. We're in the middle of

1225
01:39:57,040 --> 01:40:03,760
labor negotiations and to talk about a
sour survey would send out false

1226
01:40:02,239 --> 01:40:05,840
encouragement to the labor groups that
the city is looking at something it's

1227
01:40:05,119 --> 01:40:09,920
not going to be doing.
>> This is not the time to do a salary

1228
01:40:07,280 --> 01:40:15,760
survey. However, we will have a, you
know, we'll have a close session at next

1229
01:40:11,840 --> 01:40:19,600
meeting, talk about bargain units, and
we'll go from there.

1230
01:40:17,520 --> 01:40:24,159
» Yeah. And that's fine, but I just I
brought this up last year, the salary

1231
01:40:21,360 --> 01:40:26,639
survey, and it never happened. So, I I'm
just wanting it to happen is all I'm

1232
01:40:26,239 --> 01:40:30,000
asking.
>> Well, I I think right now this is an

1233
01:40:28,320 --> 01:40:32,320
issue we should not be talking about up
here. This is a close

1234
01:40:31,280 --> 01:40:34,080
» No, no, no. I I understand what you're
saying about

1235
01:40:32,800 --> 01:40:37,199
» and I think we should discuss this in
close session.

1236
01:40:34,960 --> 01:40:41,840
» Yeah. So, two things. One, we do do
salary surveys all the time. The labor

1237
01:40:39,280 --> 01:40:46,639
groups themselves do salary surveys all
the time. If the council wants to do a

1238
01:40:44,480 --> 01:40:51,679
council directed salary survey, it would
require that we contract that out. Um,

1239
01:40:49,360 --> 01:40:55,840
and last time we did a contracted out
salary survey. It, you know, it costs a

1240
01:40:54,159 --> 01:41:00,080
significant amount of money and we can
do that if you want us to bring it back

1241
01:40:58,480 --> 01:41:05,920
before the council. And the reason why I
say this is that we do not necessarily

1242
01:41:03,679 --> 01:41:09,840
accept the salary surveys conducted by
the bargaining groups uh because we

1243
01:41:08,400 --> 01:41:14,159
don't know the positions that they are
surveying and they don't like the

1244
01:41:11,440 --> 01:41:19,520
surveys that we conduct because we look
at positions and try to do a a like

1245
01:41:16,639 --> 01:41:25,679
forlike uh match and there's always
disagreement. So the only way that there

1246
01:41:22,080 --> 01:41:30,320
is a medicable solution to these sorts
of surveys is that there is an

1247
01:41:28,159 --> 01:41:36,320
independent third party that conducts
the surveys and that does cost money.

1248
01:41:33,040 --> 01:41:42,000
» And I understand but honestly I could do
my own salary survey if that's what's

1249
01:41:38,719 --> 01:41:46,400
what's needed. But and I I get it but
it's not something I'm asking for that

1250
01:41:44,639 --> 01:41:50,000
all this information isn't readily
available to contact each city and get

1251
01:41:48,880 --> 01:41:54,960
it. And I'm just talking about the
salary city or the surveys that cities

1252
01:41:52,400 --> 01:41:59,119
that we used in the past because they're
similar to ours and that's it. And then

1253
01:41:56,719 --> 01:42:03,520
regarding the the two weeks, like Ed
mentioned, he already shoots for two

1254
01:42:00,719 --> 01:42:07,520
weeks every time. So maybe three weeks.
I I don't know. I just I just want to

1255
01:42:05,280 --> 01:42:10,719
see something to where
we we have some time.

1256
01:42:09,199 --> 01:42:13,360
» Okay. We hear your message and we'll try
to work towards that.

1257
01:42:11,440 --> 01:42:15,600
» And as far as again, as far as salary
survey, let's let's discuss that in

1258
01:42:14,880 --> 01:42:20,880
close session.
>> Okay. Um, and then, uh, I know on the

1259
01:42:18,639 --> 01:42:24,239
citywide cost, I just want to say this,
I saw this somewhere in your, uh,

1260
01:42:22,400 --> 01:42:28,480
report,
our litigation cost and workers comp

1261
01:42:26,800 --> 01:42:34,480
costs, and not just us, it's other
cities, too, is out of control. It's

1262
01:42:30,960 --> 01:42:36,800
it's it's gone up wacko by numbers. It's
pretty amazing.

1263
01:42:35,199 --> 01:42:40,560
» They have increased significantly, and
they're expected to increase uh, even

1264
01:42:38,639 --> 01:42:46,000
more significantly next year. And we
will be bringing a uh request to the

1265
01:42:43,360 --> 01:42:51,040
city council to support uh documentation
related to uh uh encouraging the

1266
01:42:49,040 --> 01:42:56,560
legislature to address the cost of
insurance. Uh uh particularly as it

1267
01:42:53,840 --> 01:43:01,280
relates to how municipal agencies uh
when they are found 1% responsible,

1268
01:42:58,880 --> 01:43:06,800
they're fully responsible for 100% of
the cost of losses. This has to end. Uh

1269
01:43:04,560 --> 01:43:11,119
we are the deep pocket and everybody
looks to us and it's just a burden that

1270
01:43:08,639 --> 01:43:16,320
we can't continue. I agree. And I just
want to you have a paragraph in here on

1271
01:43:13,840 --> 01:43:21,040
page 51 of the slide. So I think this
this puts an ease where we are right now

1272
01:43:19,520 --> 01:43:25,280
with this deficit but it says with
strategy proposed in this budget message

1273
01:43:23,600 --> 01:43:29,280
coupled with the anticipated long-term
improvements in the economy. The city

1274
01:43:26,880 --> 01:43:33,679
manager anticipates deficit will remain
limited in scope and not extend to

1275
01:43:31,280 --> 01:43:36,560
future fiscal years. Mon deficit is
manageable and does not represent

1276
01:43:35,040 --> 01:43:42,400
structure problem. I think that's that's
important right there. The the Fire

1277
01:43:39,040 --> 01:43:46,080
alarms are not going off right now. Um I
I think uh I think we're doing a better

1278
01:43:44,400 --> 01:43:52,159
job than the state of California is or
maybe some big city in LA is doing in

1279
01:43:48,719 --> 01:43:57,440
their deficit in my opinion. Um I think
we're we are acting as though what

1280
01:43:55,040 --> 01:44:02,000
Monontlair households would do and
manage their money, manage their

1281
01:43:58,880 --> 01:44:08,159
expenses u based on current economic
times. So I think we're

1282
01:44:06,080 --> 01:44:14,320
sh So I I do want to say this. I
appreciate staff all the hard work from

1283
01:44:09,840 --> 01:44:18,400
staff on this. I know we have the the uh
housing corporation. So, let's do the

1284
01:44:16,000 --> 01:44:21,840
housing corporation.
>> Mayor, I I know I'm not a member of the

1285
01:44:20,000 --> 01:44:24,480
council, but I do need to exercise a
point of privilege. If you can give us a

1286
01:44:23,119 --> 01:44:28,000
few minute break, please.
>> Oh, you can have a break. That's fine.

1287
01:44:26,320 --> 01:44:31,880
Actually, I need a break anyway. So, all
right. Break time f

1288
01:44:38,080 --> 01:44:42,960
Okay, we're back. Let's do housing
corporation real fast.

1289
01:44:41,199 --> 01:44:48,800
» Yes, this will be quick. Montlair
Housing Corporation proposed budget for

1290
01:44:45,199 --> 01:44:52,320
fiscal year 202627.
So, the Montlair Housing Corporation

1291
01:44:50,560 --> 01:44:57,040
list of Montclair Housing Corporation
properties contained in the Montlair

1292
01:44:54,480 --> 01:45:03,320
Housing Corporation budget estimated
fund balance at July 1, 2026 is

1293
01:45:00,320 --> 01:45:03,320
$879,879.

1294
01:45:04,639 --> 01:45:16,960
The estimated revenue, rental income,
uh, 1.77 million, income, $18,000

1295
01:45:13,119 --> 01:45:20,639
for a total of just over $2.6 million.
Positions previously funded by the

1296
01:45:18,560 --> 01:45:25,119
housing corporation are now fully funded
by the general fund, an action that

1297
01:45:22,880 --> 01:45:29,760
reserves housing corporation funding for
maintenance and expansion of the city's

1298
01:45:26,880 --> 01:45:39,639
affordable housing program.
So the estimated fund balance at the end

1299
01:45:32,560 --> 01:45:39,639
of fiscal year 2026 27 is 1,284,935

1300
01:45:40,880 --> 01:45:50,239
after we have um $1,389,400
in expenses.

1301
01:45:48,400 --> 01:45:55,560
And that's the end of the presentation.
>> Any questions on the housing stuff?

1302
01:45:52,000 --> 01:45:55,560
Council R.

1303
01:45:57,440 --> 01:46:05,760
» Do we own our properties debtree?
>> Yes.

1304
01:46:02,719 --> 01:46:08,880
» Yes. All properties are owned debtree.
>> So, Miss Colbeck, it is debtree.

1305
01:46:08,400 --> 01:46:11,119
» Yes.
>> Okay.

1306
01:46:09,280 --> 01:46:14,639
» Yeah. We don't make any We bought them
outright. We don't make monthly payments

1307
01:46:13,760 --> 01:46:19,280
or anything.
>> Because I was wondering what the

1308
01:46:15,760 --> 01:46:22,080
interest would have been on these. So, I
don't need to ask that question. Thank

1309
01:46:20,639 --> 01:46:25,679
you.
How many units again? 104 108. What was

1310
01:46:25,119 --> 01:46:29,520
it?
>> Uh, no. We're probably up somewhere in

1311
01:46:27,280 --> 01:46:33,920
the neighborhood of 110 now.
>> Yeah. And I think a couple years ago, I

1312
01:46:31,600 --> 01:46:36,639
tried to figure out the average. We take
the random income divided by the number

1313
01:46:35,520 --> 01:46:42,320
of units we own. I think it was coming
out like $700 a month per unit,

1314
01:46:39,600 --> 01:46:47,360
something like that, or 800 or something
like that. Well, it depends, but there

1315
01:46:45,679 --> 01:46:51,840
there are adjustments periodically. Not
>> fair market rate. We'll probably get

1316
01:46:49,440 --> 01:46:53,760
triple the income, I suspect. So,
>> yes, but to be clear, they're not market

1317
01:46:53,520 --> 01:46:59,920
rate.
>> I know. I understand.

1318
01:46:56,320 --> 01:47:04,080
» Okay. Um Oh, I'm sorry, Council Member
Menddees.

1319
01:47:01,199 --> 01:47:10,560
» Yeah, I um so all of these are debtree,
but all of these units are all um have

1320
01:47:08,719 --> 01:47:14,080
leans on them. Correct. For the lease
revenue bonds though,

1321
01:47:12,080 --> 01:47:18,080
» they have leans, but not all of them.
No, some of them have been acquired

1322
01:47:16,000 --> 01:47:21,520
recently. Uh well, no. In fact, housing
corporation properties don't have leans

1323
01:47:20,000 --> 01:47:24,880
on them. I'm sorry.
>> Uh these are debtree. They have no leans

1324
01:47:23,920 --> 01:47:30,960
on them.
>> It's only other city properties that the

1325
01:47:27,360 --> 01:47:33,040
city owns uh as operational facilities.
>> Right.

1326
01:47:31,360 --> 01:47:35,280
» All right. Thank you. That's that's good
news.

1327
01:47:33,280 --> 01:47:38,480
» Well, let me ask I got a question to
ask. Mikey's not here. I know that. The

1328
01:47:37,199 --> 01:47:41,199
question is, if we were to sell,
>> he's online.

1329
01:47:39,600 --> 01:47:44,239
» Oh, me and Mike can answer the question.
I'm trying to remember my days of

1330
01:47:42,400 --> 01:47:48,320
redevelopment. If we were to sell these
properties,

1331
01:47:45,840 --> 01:47:52,880
could we sell them for market rate or do
we have covenants on them that prevents

1332
01:47:50,800 --> 01:47:56,400
the the affordability remains? And I
thought some of the stuff we bought with

1333
01:47:54,239 --> 01:48:00,480
general fund money, but is there
>> Well, the massive majority of the

1334
01:47:58,560 --> 01:48:03,040
properties were bought with
redevelopment money,

1335
01:48:01,280 --> 01:48:05,920
» 20% set aside from the former
redevelopment agency, and they do have

1336
01:48:04,719 --> 01:48:10,560
covenants on them. Yeah, those have
covenants, but we also bought property

1337
01:48:08,000 --> 01:48:15,760
here recently, last
>> anything bought after 2012 is not with

1338
01:48:13,840 --> 01:48:20,400
uh well, they do have covenants on them,
but they are not bought with monies that

1339
01:48:18,400 --> 01:48:26,880
are subject to restrictions. We do have
the $3.3 million that we received from

1340
01:48:24,400 --> 01:48:30,719
uh relation to the mobile home park uh
issue that we resolved several months

1341
01:48:28,400 --> 01:48:35,679
ago. That money would have restrictions
for affordable housing, but the monies

1342
01:48:33,040 --> 01:48:39,119
that the economic development agency has
spent since 2012 generally does not have

1343
01:48:38,159 --> 01:48:42,719
those kind of restrictions.
>> The monies that we we they've spent to

1344
01:48:40,800 --> 01:48:47,360
purchase these residential homes are not
subject to affordability.

1345
01:48:44,480 --> 01:48:51,600
» Well, Mr. Mayor and city council. Uh so
the properties that were purchased with

1346
01:48:49,520 --> 01:48:57,199
the former redevelopment
agency, those properties, if we would

1347
01:48:54,159 --> 01:49:02,719
sell them off, we would then have to use
the proceeds of those funds to put back

1348
01:49:00,400 --> 01:49:07,760
into the low and moderate uh fund
category that we have. We wouldn't be

1349
01:49:05,040 --> 01:49:12,159
able to sell them. Um we wouldn't be
able to use the the money for anything

1350
01:49:09,760 --> 01:49:16,239
else. the money that was the properties
that were purchased with the economic

1351
01:49:13,840 --> 01:49:20,159
development agency funds, those do not
have any restrictions. So, we would then

1352
01:49:18,239 --> 01:49:24,400
be able to use the proceeds from those
funds. It's only the ones that were used

1353
01:49:22,320 --> 01:49:27,520
from the former redevelopment agencies
that would then require to be reused for

1354
01:49:26,639 --> 01:49:32,080
low moderate.
>> That makes sense. Thank you, Mikey.

1355
01:49:29,600 --> 01:49:35,600
Okay. So, uh now we have consent
calendar. We have four items of consent

1356
01:49:33,840 --> 01:49:39,520
calendar including the adoption of the
city's budget and the housing

1357
01:49:37,600 --> 01:49:44,119
corporation's budget. If there's no
questions on it, can I get a a motion?

1358
01:49:44,159 --> 01:49:49,440
» I'll move for approval of
>> move approval of Gen County. Can I get a

1359
01:49:47,679 --> 01:49:58,480
second?
>> Second by Council Member Mendes. Um,

1360
01:49:54,400 --> 01:50:01,840
» are we going to vote on item four or we
taking four and five together?

1361
01:50:00,159 --> 01:50:05,119
» We're doing consent calendar now, which
is A, B, C, and D.

1362
01:50:03,520 --> 01:50:09,280
» Right. But what about item four, the
budget?

1363
01:50:07,199 --> 01:50:14,560
» Item four, the budget. That's that is
pres that's presentation. The budget now

1364
01:50:12,320 --> 01:50:22,080
is under consent calendar. It will be
item C. 5C is the uh city mon budget and

1365
01:50:18,960 --> 01:50:26,840
5D is the housing authority budget.
Okay. So we have a motion. Let's vote.

1366
01:50:29,280 --> 01:50:32,280
Great.

1367
01:50:32,960 --> 01:50:42,679
All right. That's adopted 40. Uh again
that staff thank you very much for the

1368
01:50:37,920 --> 01:50:42,679
hard work and uh we're ajourned.