also continue to emerge from the COVID-19 pandemic and move towards a path of recovery. We've been navigating nearly half a century high inflation and the toll that that's had on our economy, along with ongoing economic uncertainty as we look at the horizon. And yet throughout the process I'm incredibly proud of the way in which our city team, our city council have been able to really step up in the moment and continue to provide critical services to our community throughout these challenges. Next slide. So we don't have time this afternoon to really run through all the great work that's happened over this past fiscal year but I did want to take just a moment to highlight some of the major efforts that have been underway over the course of this past year. That includes really concerted effort towards modernizing and building out our organizational capacity across all of our departments and moving through our all in shaping our future review of a number of service programs with support from our city employees. As I mentioned earlier, moving through storm response and recovery efforts, really having an all hands on deck full speed ahead work on our west cliff recreational area, as well as the tremendous amount of work that happened across all of our city departments through the storm events from having our water staff repairing water mains to clearing storm drains to continuing to keep our community safe through what was a very challenging month and a half of storms. As we've also celebrated over this past eight year rena cycle, Santa Cruz is amongst a very small group of jurisdictions across California. In fact, only 6% of jurisdictions in the state of California that has reached all of our regional housing need allocation targets in every income category and exceeded many of those as well. So we're excited for this cycle ahead but certainly worth pausing to celebrate that great work that's underway. And we are entering into a phase of a number of very exciting downtown projects that are underway, including long range planning efforts with the downtown expansion plan, ground breaking of the La Jolla project approval of the downtown and affordable housing library project approvals and the list goes on and on. So excited to see really our downtown moving into the future with some very exciting projects. Our homelessness response team continues to do tremendous work really focusing on upstream solutions to homelessness in ways that we've not been able to achieve in the past implementing our homeless action plan and continuing to connect unhoused individuals in our community with services. We also, as part of a hearing just recently with the California Coastal Commission, received approval of the oversized vehicle ordinance and in tandem with that there's been really important work around standing up safe parking programs. In fact, a model that we hope can be scaled to other parts of the state great work underway on that front and we continue to move forward with implementation with the council's recent approval of the 2030 climate action plan. This year's budget was developed with three lenses, inform, invest, and innovate. The first acknowledges our commitment to transparency and wanting to ensure that our staff, community, local businesses and council understand the budget how decisions are being made and have opportunities to weigh in throughout the process. We plan to continue to prioritize and invest in our people, modernize our services and develop intentional long range strategies to invest in our infrastructure needs. And lastly, as we approach all of this work, we have a commitment to innovation in the delivery of our services and strategic investments as well as exploring additional sustainable revenue streams. And I know the council and many of our staff have been engaged in those efforts. So with that, I'm going to go ahead and hand over to Elizabeth Cabell who's going to take the next portion of our budget hearings and appreciate the council's time. Mr. Cabell, good afternoon. Good afternoon, mayor and council. Elizabeth Cabell, the finance director. Today, I'd like to start by looking at our fiscal year 2024 budget and as you have the 544 page document, I'll try and condense that into 10 minutes. And we'll start by reviewing the budget process, the focus and themes that guided development of the budget and then dive into an examination of the general fund. We'll take a high level look at what we'll look, dive in and look in detail at the general fund. Then take a high level look at the proposed capital investment program as well as the citywide operating budget and conclude with looking at what happens, what we're projecting for after fiscal year 24 and then take, bring it back to you for comments and any questions. Ms. Cabell, if I might for purposes of us administering our business here we are, if I understand it, we are going to go through essentially six items here. The overview, the public comment, economic development and housing, planning, community development, city attorney's office and homelessness response. Is that correct? That's correct. My guess is that doesn't get done in 20 minutes. We are at just about five o'clock and for purposes of a nutrition augmentation meeting so I suspect council members are going to want to have a bite to eat and so that the departments can also plan on when will their presentation be here. I'm going to guess that not counting the dinner break we're going to be here for three or three and a half or so hours. Is that a fair estimate? Anybody have an estimate on that? Laura Schmidt has an estimate. Well, there we go. Ms. Schmidt, good evening. Thank you, Mayor. Before you factor in public comment, we had estimated about 2.5 hours so you deduct amounts 10 minutes so we have about two hours and 20 minutes along with a nutritional supplemental conversation meeting should that take place. Nutrition augmentation. Government speak. We will do that. How about we do this? Would this work for folks? I don't think there's any way we're going to power through this without a break at all. Let's do this. Let's take your overview, take a break, come back here with four departments. Anybody okay with that? Anybody have an objection to that? Ms. Cavill, good evening. Thank you. So the budget process began in October and has been a team effort. Representatives from each department met with the finance budget team bi-weekly. The culmination of those meetings is the presentation of the budget book containing not just proposed budgets for each fund and department but about the city, the budget process, goals, accomplishments, performance metrics and the city-wide staffing plan. The final step in the process is budget adoption, which is on the calendar for the first council meeting in June. The focus continues to be on the re-envision Santa Cruz recovery plan introduced in February of 2021. The strategy has three primary elements, fiscal sustainability, downtown and business revitalization infrastructure. In fiscal year 23, our budget themes were recovery, rebuilding, refocusing. In fiscal year 24, we look to the next steps to inform, invest and innovate. These themes, along with the focus areas previously mentioned, serve to guide the budget process. Innovation has been especially important this year as we maintain status quo discretionary budgets despite inflationary increases in many supplies and services. Departments were asked to absorb many of these increases to examine their budgets and determine how to do more without additional funding. We are beginning the second phase of our long-range financial planning project which culminates in the development of our fiscal sustainability plan. A key part of that project is focused on the long-term investment in people and infrastructure to ensure a sustainable future for our community. We've implemented several new elements in the budget this year and these were presented to the budget team early in the process so that departments had time to review and be involved in the implementation. So specifically, what's new in the fiscal year 24 budget, we've implemented a new cost allocation plan that replaces the one developed in 2012. The new plan uses various distribution bases, things like agenda items, to allocate the costs of central service departments such as HR, finance, IT, out-to-the-operating departments such as public works, economic development and water. We've also budgeted vacancy savings across all activities based on a seven-year average. Prior to fiscal year 24, we only included vacancy savings in the general fund budget and it was not broken out by department or activity. Our new methodology includes all activities and provides departments with a more accurate representation of personnel costs. We've seen significant increases in liability and property insurance costs. In fiscal year 23, the general fund absorbed 2.3 million of this increase. In fiscal year 24, our risk division worked with the actuary to allocate these cost increases over all departments and all funds. Finally, we've made a change to the annual $5 million transfer from the general fund to the capital investment program fund for new projects. Because we are in the middle of the development of our long-range financial plan, much of which is focused on addressing the over $350 million in unfunded CIP projects, we decided to pause this transfer for fiscal year 24. This gives us the opportunity to finish our long-range financial plan to focus on the progress of current projects, formally close out fiscal year 23 and come back to council at mid-year to request general fund dollars for CIP projects. Now, looking specifically at the general fund, revenue is represented in this chart by the blue bars and the expenses are the gold shading in the background there. After a deficit in fiscal year 20, you can see that our revenues exceeded expenses in both 21 and 22. This was due to the receipt of one-time ARPA revenues and a surge in tourism and visitor-related taxes such as sales tax, transient occupancy tax and admissions tax. The high expenses projected for fiscal year 23 are due to $11.2 million of carry forwards from fiscal year 22. This $11.2 million represents resources that are committed through purchase orders or projects and are held in a committed fund balance. Any deficit at the end of fiscal year 23 will be covered by this committed fund balance. We will not have to dip into our reserves. For fiscal year 24, we are proposing a revenue budget of $132.1 million and an expenditure budget of $133.6 million with a $1.5 million budget deficit to be covered by fund balance. This chart shows revenue from our top tax sources as well as the category of fees for fiscal year 19 through 2000 what we are proposing for 2024. After dips in fiscal year 20 as expected, everything has returned to pre-pandemic levels all of our major revenue sources. For expenditures, this table there's a couple of ways of representing the expenditure side of things. This table compares how we expect to end fiscal year 23 with what we are proposing in the fiscal year 24 budget. This table shows that the revenue of the services shows an 11% increase year over year which is a result of more accurate budgeting of vacancies as I mentioned earlier and increase health benefit and pension costs as well as new contracts with five bargaining units. The large increase in the supplies and services category is due to an accounting change in the recording of cost allocation charges between general fund departments because it all netted to zero. We are changing that practice in fiscal year 24 to more accurately reflect the true cost of service for each department. The fiscal year 24 budget reflects $10 million in service revenue to central service departments like finance, HR, IT, and $10 million in service expenses to the operations department. This table shows that the cost allocation charges are $10 million in service expenses to the operating department. This all nets out to zero but it looks like there is an increase on both sides. If you exclude that $10 million that is in there for cost allocation charges you can see that the department services and supplies are a status quo budget of about $33 million. This chart is another way of looking at the actually I should talk some more about these numbers but the capital outlay another number that is different from 23 and 24, the capital outlay represents the carry forward of multi year projects and many of those commitments or any of them that are not spent in 23 will be carried forward into 24. The most notable difference between fiscal year 23 and the 24 budget is the transfers to the CIP and streets funds. I talked a little bit about the $5 million that is in fiscal year expected for fiscal year 23 includes $6 million transferred to the CIP fund $1.1 million to the CIP streets fund and another $3.3 million in project carry forwards. In fiscal year 24 we only budgeted $2 million. $1 million is going to the CIP fund and $1 million to the CIP streets fund. That is why there is such a significant difference between fiscal year 23 and the CIP fund. Another way of representing or showing the $133.6 million in expenditures proposed expenditures for 24. This chart shows it by department. An important part of our fiscal sustainability plan is building up our reserves. The government finance officers association or GFOA recommends having two months operating expenditures or just two months. They are two separate things. Our fund balance in the operating general fund primarily consists of those committed resources I spoke about earlier that 11 million of projects and POs that are committed that have been committed for specific purposes. And most and any of those that are not spent will be carried forward into the next year. Our current policy requires that any fund balance above and basically an operating reserve. Our goal is for this to be 5% of general fund budgeted operating expenditures. Fiscal year 22 was the first year that we ended the year with enough of a surplus to have an operating reserve. And right now that reserve is about 5.26 million. Our stabilization fund holds two reserves. Our pension reserve and our emergency stabilization reserve. Both reserves have specific resources. The emergency reserve can be used to sustain general operations in case of a declared emergency. And the pension reserve is an IRS section 115 trust that can only be used to cover costs associated with employee pension benefits. The purple line represents our reserve goal which based on the proposed 24 budget is close to 19 million. While the chart seems to indicate that we are over that goal in 2022 and 23. The pension reserve that burgundy bar there at the top is restricted for a specific purpose so we are still short of having two months expenditures and unrestricted reserves. Our stabilization reserve policy was established in 2013. So as part of the development of our long range financial plan we plan to do a comprehensive review of our reserves and we'll be bringing updated policies to you as well. Our capital investment program for fiscal year 24 we're proposing 132.2 million in projects. At close to 65 million the enterprise funds which is the biggest blue bar there. And the smaller the smaller pie over there is all the enterprise funds broken out. So that represents about 65 million almost half of that 132 million. And then we have two special revenue funds gas tax and the clean beaches special revenue funds and our IT and street CIP funds which are a little bit smaller slices there. The funding sources for these projects are varied and consists of federal and state federal state and local grants but also includes measure D successor agency FEMA, ADBG lots of other things. Citywide our operating budget is 100 and 3 million and as Matt mentioned all of this put together we're getting close to that half a billion dollar mark. The largest operating budget is the general fund followed by all of our 500 price funds. So looking ahead to 2024 and beyond we expect expenses to continue to exceed revenues and are continuing to look for innovative opportunities and sound investment approaches to ensure the city's vibrancy and the local ad hoc budget and revenue committee continues to meet and focus on new revenue opportunities including ballot measures for 2024. We've engaged a consultant to work on a cost recovery fee study and we continue to pursue and leverage state and federal funding opportunities. Given our increasing expenses what does the future look like as far as reserves. Fiscal years 22, 23 and even 24 are pretty stable based on the large influx that we received from ARPA money in 22 and are committed fund balance. Our reserves we don't project having to dip into them in 23 and even into 24 but as you look at 25, 26 and moving forward you can see 25 we start to dip into our operating reserve and then 26 we start to draw down our pension reserve. So by 28 both of those reserves as we continue to go would be depleted. On that not so happy note. Thank you for your time and let me know I've got the budget team is here as well if there are any questions or anything else that I can clarify. Thank you very much for that presentation. Thanks to the city manager and your team as well as yours Ms. Cavill for putting this budget document together. I think it is very readable, very accessible even for budget folks and I think that's for public agencies that's terribly important to you. Not everyone does that, not nearly everyone does that so thank you Mr. City Manager thank you. Questions or comments? Okay I will excuse me. I just have one. Madam Vice Mayor. This isn't meant to sound rhetorical but I'm actually asking this. If there's 13 million we're getting that. What we'll use if we go all electric for vehicles to augment that? Is it something the finance committee can think about? It's a challenge. This is actually something you may know more about this but this is actually something that the state government is wrestling with quite a bit right now is how to essentially I suspect the City Manager has more information. The Mayor is correct and I appreciate the question because it has been a roading revenue base for quite some time now as vehicles become more efficient and obviously the shift now to all electric and the state mandates that are coming along with it so there's quite a bit of discussion in Sacramento around what that model could look like in the future as well. Thank you for your attention to it for sure. If you would I suspect that anything is fair game before we get into departments. This is the general topic of the introduction to the budget. Let me ask you a couple of questions. Take a look at what for me anyway is page 45. This would be the property tax trend and the sales tax are very good. Thank you. We know a couple of things are true on property taxes at an absolute minimum. The revenue we receive should go up 2% every year simply on the Prop 13 principle of going up with the market but no greater than 2% a year. Second contributing factor to any projection on property tax as I understand it would be reassessments upon resale or new construction. I'm wondering this looks as if you are projecting property taxes to come in slightly lower and that as the former county treasurer I wonder about that and how we would project that. The property tax includes property tax but also RPTTF funds that come through as well as secured supplemental and the fees are all encompassed in there. We did have a decrease in RPTTF of about 200,000 so that's one reason it went down there was also projected in 23 a decrease in the secured as well and an increase in fees. So not the big property tax but yes there was projected to be a decrease in not significant I think was about 100,000 so in other words our property tax includes more than just the actual property it's got the secured, the unsecured and the RPTTF and the fees are all in there. The county's proposed budget with regard to property tax forecasting looks different than this so I know they get a different share I understand that. Let me move to sales tax for a second again you're showing sales tax declining very marginally certainly very marginally and I'm wondering about that in so far as we're having increased economic activity during the upcoming budget year quite a bit actually will come online I believe I'm interested in understanding then how we would project sales tax to come in lower. So part of this we did have actually have a meeting with HDLR consultants this morning and part of that is the way that especially with Amazon and some of the larger companies how the sales tax is coming in there's been some differences in the way of reporting I think also the other reason we're projecting it to stay pretty stable at least for the next year or so is there was that huge spike in 22 as everybody started shopping again and we definitely don't expect that to continue that was an anomaly so I think that what we're really seeing is it to sort of level out so I don't think that we are projecting a small decrease there but overall I think what we're really consistent we're not I mean there'll be little bumps in the next probably 25 and 26 but not as much as we saw in 22. That's interesting to me in the following regard unlike some communities even some cities our size we don't have for example a lot of auto dealers where you get a sale and boy that sales tax is a chunk you know we have to sell like 5000 trinkets downtown to get even close so my point is not to disparage that it's to say that we are different every community is different but we don't have what I would call large sales tax generators where somebody goes in and makes a purchase and the sales tax is several thousand dollars on it much more likely that a high in purchase in our community might have a few hundred dollars in sales tax on it so the reason I raised that is that this notion that people came out of the gate and spent a lot of money I think that's undeniably true the facts support that but for us which is not a high volume in terms of individual purchases we have a different reliance we have a very large denominator across which sales tax is spread as opposed to a narrower one but higher numerator so I'm wondering if that holds up so it looks like I'm looking at the projections that we have going out for 24, 25 and 26 and this is by category so as you mentioned auto is the one that's going up construction is going to be going down overall what we're projecting from fiscal year especially 26 forward is about a half percent increase overall so I think that again there's some ups and downs in the categories but I do think that overall it's going to we're projecting that kind of 2% it's going to be that range of increase moving forward I do think by the way on your answer to these first two questions I very much support the idea being it's the only conservative bone but conservative on your revenue estimates and not being conservative on your expenditure estimates will serve us all well over time the utility users tax trend that does raise the issue of what could possibly result this year or the budget year what could possibly be the result of a or the cause rather of a reduction in utility users tax and off the top of my head I don't know before the end of hearings tomorrow with that thank you the transient occupancy tax trend is also of interest I know we're bringing on I believe for new ish or remodeled and reopened hotels in the fiscal in the budget year we'll start on July 1st and this is a fairly small looks looks to be like maybe there's a less than a million dollar maybe 750,000 I'm not sure what it is 750,000 or so and increase revenue there on TOT what assumptions are you making about those new hotels we have big hotels crews in Lava here coming online from 28 and then here I think the assumptions are based on the information that we economic development has a consultant that we work with with our long range financial plan based on room rates and the occupancy and I think a lot of it too is again that sort of leveling out from 22 so we had a large increase we don't expect that or 20 going into 23 so we have a large leap to continue so I don't know again exactly what the number of new rooms is but that is all figured in there and based on what the projections are for travel, average daily roommate and things like that I'm not going to argue with our experts certainly because I'm not one but I will say again I think this is a conservative TOT estimate given the nature of two of the hotels that came online this year and will be in next years and they contributed very very little this fiscal year that we're in right now but adding them in for next year they're in our town they would be considered somewhat upscale and so I'm interested in that number and part of this too is the projections are including the possibility of a recession so I think that part of what we're looking at is that things may not and this looking at all the trends that have happened in the past what we expect to happen in the future that's sort of some of where those numbers are coming from as well let me ask you a couple of questions on the fee side of life you showed a slide of the various enterprise funds that we have in the city and those have fees associated with largely covering the expenses within those enterprise funds is that correct exactly do we collect 100% of the cost or do we subsidize any of those enterprise funds with general fund none of those are subsidized 100% covered by fees thank you thank you you'll bear with me for just one second thank you what excuse me what assumptions are you making on our workers compensation fund I have to check with Ross and HR on that get back to me on that one or not to me get back to the council on that thank you during midyear budget discussions you were kind enough to agree to provide the council with a statement or a report is overstating you provided a document on May the 10th on sales tax the context was we were discussing street vendors and they were required to have a business license and sales tax remittance document my recollection is that we require street vendors to display their business license we do not necessarily require that they display their sales tax document we'll visit that later on in these hearings I suspect but the issue of how much you might be captured if every street vendor was required to actually have and remit sales tax that it would get us about $17,500 it's really a rather de minimis amount and you think that that holds up based on as you can see we've had five that have reported so based on those numbers and also it's they're required to display their sellers permit in order to get a sellers permit you have to have a business license and required to display their sidewalk vending permit in order to get that you have to have a business license and a CDTFA sellers permit I don't know if $17,500 for every single vendor is an accurate estimate but I feel if anything it's on the high side and so I think that if we were to guesstimate that that's I'm sorry it's $15,200 I'd be quite happy if it was $17,000 per vendor that would make me very very happy but that's based on saying that each vendor brings in approximately $15,000 so that's kind of the which I felt was a little bit anything kind of high so if we're saying that that would be $17,500 total in sales tax revenue versus the $3,000 that we've received so far okay thank you for that I have a question on the city manager city manager at one of our council meetings probably month to month and a half ago the council was doing some work to improve safety improvements on Laurel Street heading up towards California as I recall and I pegged on a request which Mr. Condati was kind enough to say thought it was relevant enough we could we could go with it and that was for the public works department to report back during budget hearings on the 10 most on the 10 busiest intersections to make sure those are as safe as possible currently oftentimes at those we have folks who are sitting on those and seeking contributions from folks or whatever it might be it seems wholly unsafe to do that both for the people on the median as well as people who are other pedestrians as well and folks who are riding bikes, motorcycles, cars anything else I have not as yet received that will we receive that prior to the public works budget being undertaken here? Appreciate the question Mayor Keely and we do remember the original direction and the intent behind it when it comes to the safety of our medians and intersections it is something that our transportation team within public works would be tasked with much of their attention as we were discussing earlier today has been on West Cliff so I'll have to circle back to them to see whether or not they have that proposal ready as part of this discussion I don't know that offhand what would be irrespective of how ready they are we need to report back even if it's I understand they're very busy we'll get a report back if we need more we can work on that yes there will be a report back thank you very much those conclude my initial comments generally speaking on the budget council member Brown thank you I just have some of my questions about projections on next year's revenues for different tax sources were answered so I just have one question and it's on it's page 62 I'm just trying to understand the interfund and interagency charges item which is a significant increase I just notice really big changes and I'm wondering if we could just get a sense of what that is about because we're going from 5 million to 18 million in interagency and interfund charges it's the cost allocation so you're changing the cost allocation to I'll say anyway it's just that it was never recorded before so what we have is there's an increase on the expense side but there's a corresponding increase on the revenue side so you're seeing this large increase here but there's also a corresponding I notice that and so it's just about the allocation nothing new for the initial questions no seeing here none Mr. City Manager we microphone so what we can do is are we prepared to take a break at this point would we be ready would we be ready to take a break at this point we could are you finished with your initial comments and presentation Ms. Cavill okay let me ask if there are folks we're going to take public comment and then we will take a brief recess for a dinner break let me ask if there is anyone with us in chambers this evening who would like to make a comment on the proposed 2023-24 fiscal year city budget Ms. Bush do we have someone online certainly good evening yeah hi this is Garrett hey my stomach is crumbling too anyway I question your 64 thousand 75 city population data figure the 22 census data says it's 61,800 as of July 22 with a two year decline but hey as with a lot of government numbers who's double check and account I mentioned because the ratio of the city's head count growth versus a declining public population growth rate has been going up for a long time the population peak here in 2020 and is now in actual decline as long-term growth rates have been declining for decades despite the media propaganda as the students returning to in-room learning is some real growth the real negative population growth rate compares unfavorably and unsustainably to the plus 1.1 percent head count rise for the city next year there is a portion of what the city does that does represent actual work for example CIP that creates asset wealth but the number of people buying that is going down as well as the portion that doesn't produce wealth is going up I did not see the total city residents public debt also yearly payment obligations with a year of history and I think you should start including all the public debt in your report all the city bonds and all the city public utility debt everything in a chart you do know what current and total future bond utility debt costs are I'll bet very soon the public debt will have increased over an extra billion dollars or so in just the last few in the next few years I see even with rising property and sales tax revenue higher to a tax and would seem an onslaught of fee increases the general fund will decline once again the part where you budgeted starting to fund an effective reserve fund target with months of operating reserve wasn't all that clear to me but I do congratulate you and not spending every single cent you could have running the general fund dry I'm not an accountant but the massive discrepancy between the much lower bottom line of the summary of other projected revenues compared to other projected expenses doesn't seem like a favorable trend that could continue every year and more so for the general fund however you should take this as a compliment is better than I expected and that's a different than where the city was projected to be now last year since annually the other revenue and expenses now dwarf the general fund I comment here in principle about citizen loyalty the city should provide what the citizens need want and are willing to pay for but when you take the big outside money who pays you're really doing what they need want and willing to pay for those desires might not be the same and things like I don't know I think the real trail example comes to mind some people mistakenly think the government is the embodiment of the people but it is not instead it is more like a huge monopoly of force with its own agendas its own problems its own desires and wants its own self-interest its own narratives and beliefs and the only check on that beside the courts is the elected representatives who supposedly act as proxy for the people we know that the model is a disaster at the immoral and corrupt federal level with its warhawk neocons what we worry debt inflation idiots by the change covid brothers the toiletarians etc my possible foolish hope is that it could possibly work at the local level thank you mr. Phillip anyone else online what we will do at this excuse me what we will do at this point is take a break for 30 minutes let's call that we will be back at 6 o'clock stand and recess until 6 p.m. the Santa Cruz City Council is back in session for its May 23 2023 meeting we are entertaining a discussion of the 23-24 fiscal year budget at this point we are at the departmental budget for the economic development housing department and you can find that at page 105 on the proposed budget Ms. Lipsum good evening good evening mayor welcome to chambers again thank you it's my pleasure to present the fiscal year 24 economic development and housing budget so I'm going to first start off by just briefly going through our core services organizational chart some of our achievements and then I'll get into the budget okay so our core services are business services which you typically expect for economic development but we also have our housing development division which includes housing development creation preservation we also do infrastructure development and asset management manage all the city's leases and we also have arts and culture there's a few things that are a little hard to categorize within these graffiti removal you can put that into business services also asset management and then our housing successor which is the successor agency to the redevelopment basic business services of course is the botanic and lux opening which is such a great event permitting a technical assistance promotional small local businesses collaboration citywide regional economic development initiatives during the pandemic certainly some really good regional collaboration connecting businesses with local talent we like to really promote local local businesses and really connecting among different local entrepreneurs groups like Santa Cruz works etc promoting business growth and retention financing and incentives beautification and site selection are some of the things that we provide as some of our core business services on the affordable housing side creation and assistance partnering on the actual creation of and development of new affordable housing projects providing key funding for projects in the community and of course developing the agreements and the regulatory agreements for housing projects in the community as well we also focus on affordable housing preservation which includes monitoring administering of affordable housing units throughout the city and connecting residents with housing resources and other organizations within the community and then finally on the housing and community development side we administer the CDBG and home funds around the city infrastructure development project planning for city sponsored projects this is the full sort of scale of things from the beginning of project management through completion and construction and occupancy of projects we do quite a bit of grant seeking and funding support I'll get a little more into that later and then we do project review and concept consulting for a lot of private projects along the way as well on the asset management side master planning for city properties promoting vitality of economic engines maintaining city assets as I mentioned we do and manage over 80 leases and license agreements across the city we also work on acquisitions and dispositions within the city purchase of opportunity sites Sky Park currently we're working on that Caltrans a few others I'll talk about in just a little bit leasing and assets we have both the former redevelopment agency assets some of the eastside parking lot some of the assets that are a little unusual as well as all of our commercial spaces in our parking garages around the city and then we also have some former redevelopment housing assets as well clicker is not wanting to move forward there we go okay arts and culture last one public arts program we have a mural matching grant program we also have some sponsorships of murals this of course is one of the sea walls we have the graphic traffic signal boxes that's one of my former favorites and then the scrap program Santa Cruz Recycled Art we also do sponsorships and projects with supportive community groups in public places and promoting the art of business both with the ED side and the business side and work a lot with arts council and other arts organizations in the community this is hard to read at this distance this is our organizational chart and I'm just so pleased this year that we are fully staffed this is like the first time and I think maybe a decade that we've been fully staffed and really just in time because we have so many projects underway and so many initiatives from our affordable housing projects that we're working on in the downtown to a number of major sort of business initiatives and you know support as we're moving forward with an expansion hopefully which will come before you next month of the downtown district assessment we just have a lot of work underway and still doing the pandemic recovery and assisting businesses so it's a really critical time to have a full team and it's such a great team I feel like we have and I've said this so many times before but it's so true you know a small but mighty team and the whole city team across across the city is just exceptional and I feel that you know doubly so of course about our ED and housing team and I'll just take this time to acknowledge actually the folks that worked on preparing this year I have Kathy Mence who's online to help answer any questions and Jennifer Shelton who really pulled together a lot of the PowerPoint and a lot of the backup this year as well as Tiffany Lake who is also very familiar with our budget and so just a great team all around but it really was a whole department effort for all the contributions and accomplishments into this year's budget. We also have and I should just mention that our new folks are across both our housing division and our business support division so some of you know Josie Buchanan formally with the business council and then went to grad school and now she's back in our department we're so happy that she's here Katie Ferrara is also part of our business support team Emily Watkins on our on our housing side and Jennifer Shelton on as a management analyst and then Lindsay Nelson as well as our admin so that's our full sort of compliment that we've had being able to get full to staff this year which is pretty exciting and now I want to talk a little bit about our 2023 accomplishments on our business services side we developed and implemented the parklet ordinance and that came before you recently was like a fairly involved process and I really appreciate the council support in the subcommittee as we went through that and recently you also approved our parklet incentive program so we're really excited to have that application out and to have that program to really offset the cost of getting those public parklets going forward Midtown Fridays we've expanded the weekly summer block party we've made some permanent improvements on the east side parking lot so we're really excited for that this year and looking forward to that going forward on our downtown pops program our vacant storefront activation we've supported four businesses through short-term leases we've graduated two businesses into permanent long-term leases and another two graduated from the program so we really have had some success in that program on the housing development and preservation side we've completed just recently our HUD annual action plan we've submitted a pro-housing designation application so we're waiting to hear about on that but we do feel like we've scored really well and we really did that also with the support of the planning department and then we are just busy both administering and coordinating the grants applying for more grants we've received in the last sort of 18 months 65.5 million in grants largely to go towards our affordable housing projects in the downtown and secured particularly with Congressman Panetta's support the four million in earmarks between Pact Station North and the library projects so we're really grateful and appreciative of all the grant support we've had for our housing development which of course is Emily and Jessica at our housing kickoff event that was at Cabrillo as part of affordable housing month talking about our projects and then we also recently submitted applications for infill infrastructure grant and another affordable housing sustainable community funding for the downtown library affordable mixed use projects so we're pretty excited almost like another 45 million outstanding that we're waiting to hear back on on infrastructure development and asset management side we have secured entitlements for the downtown library affordable housing project thank you for really helping us move that project forward and sort of getting to a place where we have a lot of the really great sustainable features in that project as well as the daycare and the library so that 35,000 does not include some of the elements of the roof tech and some of those in that square footage. Our theater we finished a renovation it was that historic building it was quite an effort it was more so than we realized initially with some of the wiring once we got into into the building but that is often the case with historic buildings but we now have Childish in there is one of our popups and they're just doing so great so we're extending that downtown it's such a great store and then on the wharf we just recently launched our first popup with Humble Sea which is doing really well with the revised and recirculated EIR for the wharf on the arts and culture side accomplishments we approve 15 applications to our card this is a city arts and recovery design program completed three projects and executed nine sponsorship agreements we also with the arts commission support launched three initiatives to activate public spaces to promote the creative economy and that's including that's including the wharf master plan building partnerships there's a number of really important partnerships on the in the arts areas and arts organizations such groups as UCSC performers and nonprofit service providers Andrew Pershing's project that some of you were involved in you know really working with housed and unhoused residents with artists through projects to promote communication I mean all of these are so important and the arts commission is really committed and dedicated to working with us and making sure that we are looking throughout with that equity lens throughout the city and it's a really great partnership okay now moving into the budget budget overview you can see before you a couple just notables that are just a little bit different this year if you look at the affordable housing trust fund that 21% that's largely our permanent local housing allocation that's a relatively new state program you actually look at the corresponding line item affordable housing trust fund you'll see that's 587,000 so that's actually fairly small and some years it's more like 140-ish that we received from the state so it's not a sustainable source of long-term affordable housing funding and so even though it looks like a big part of our operating revenues here when you put it in context it's really not very much for all the programs that we administer and we used to have resource redevelopment we had 2.5 million a year in the year that it was terminated that we've been really effective in leveraging grant funds but those aren't sustainable ongoing funding sources so there is a real need there budget overview operating expenses okay this is a little bit it looks a little different this year as well and I want to explain that if you look on the right hand side you'll see that top line affordable housing community development 15 million that's because that's actually showing us the expenditures as loans for the grants that we received and we're loaning them into the affordable housing projects even those that were part of our partners and we're doing the residual receipt loans because those are typically what you've leveraged for being able to secure state and federal funding so we have those in our project it then becomes a big part of our budget as we move forward so we have a lot of funding that we've reflected in this that's roughly 230,000 and we don't have the tenant improvement contributions for the wharf that we take a small percentage of wharf leases to be able to reinvest that in related tenant improvements on the wharf is not reflected in this budget. Housing projects this is just to put this in context of some of the projects on non-CIP that we've secured the local housing trust fund or grant applications that we applied for through the state affordable housing trust fund is our funding source and that is for housing and Luffy's that you know that we collect over time it's not a reliable funding source and then home and home ARP funds that you can see and how they're allocated to each of those projects and then our nine non-housing portfolio I wanted to show this because these we only have 380,000 in our CIP budget this year so most of our funding is funding that's carried over and a good portion of it are bond funds related back to redevelopment for the projects that you see in front of you we are actually moving forward now that we're fully staffed up and some of the other projects are moving forward we can move forward on some of the supporting infrastructure so downtown beautification infrastructure we have a number of those things moving forward we have the ocean street beautification we have that survey underway and the banners just went up asking the public to take the survey so we'll have that up through the end of this month and we've already had five received 550 survey responses with some really great things about beautification and safety at that intersection so we're really excited to move some of these forward this year funding efforts I mentioned this earlier grants in the pipeline we just submitted last week the state library grant for 10 million the affordable housing sustainable communities grant for 33 million and a coastal conservancy grant for the war for 5 million we on the right hand side those are grants that we've received but aren't yet budgeted because we're finalizing those grant agreements that's another 54 million impact on services this is a good problem to have we have so much under way planning has it the whole city has it with all of these housing projects we're really busy highlighting just the map to show the housing projects there's over 31 housing projects in various stages of development in the city with that comes a pretty considerable workload across the city across all the departments so that's something that in effect it's a good problem to have but it does mean that we're very busy and as we do receive these grant funds to be able to administer the funds and move those projects forward in terms of term positions related specifically to those grant funds for those projects in a way to make sure that we stay on track on budget with these projects going forward okay now briefly core services and context business services some of the things that we're doing particularly in the downtown and the next year I already mentioned the CRM the downtown management corporation expansion you can see in the lower right hand of expanding east and west to be able to absorb some of the new infrastructure that the city ambassadors provide and both the beautification outreach and just really supporting the downtown and the downtown businesses also we have the proposed hotel coming up we have our outdoor dining there's just a lot of projects that we're doing some of them still sort of recovering from the pandemic as we transition into permanent parklets going next year development these are just some of the projects that we're doing some of the projects and then we're providing support to the other projects in the list and I just would mention that for riverfront apartments Anton Pacific for the Paseo and for 530 Front Street some of the grant funds we have for infrastructure and the IIG grant will help pay for some of the public improvements that are around and be supporting those projects there's just a different view of just the amount of different projects some of the projects we're working on through the card program you can see Kathleen Crocetti's Dancing Waters you can see a number of projects on Anthony's flight on the stairs the awakening nourishing fires and of course through the arts master plan we have one of the one of my favorites when you see those sort of umbrellas that on the right hand side which is the feast of flowers by Jenny Ward so these are all arts projects that we're moving forward in the next year and with that I'm available to answer any questions that you have let me see if there are questions by excuse me I thought I heard some questions by council members council member Brunner thank you for that quick summary overview I think you briefly touched on it on the art projects and the the budget what did you say about the budget didn't reflect I missed that part when you were speaking about art the arts and culture maybe I misunderstood trying to think back what I said there are a few things in the budget oh the percent for art projects and the way they're funded which are to the enterprise funds but they reflect don't show up on specific budget pages and so 1% on those projects for other departments projects that go forward are those enterprise funds so you see the water fund and you'll see the wastewater so those in parking has one as well so those projects are part of their budget enterprise fund but we administer those going forward I also had a question on the kiosk maintenance and the proposed increase there are you able I'm looking at page 111 and if you don't know now you can come back to that I'm just wondering if there are any projects in the pipeline for those I know there has been we periodically do I know that we have a health and safety sort of state requirement for the triple sink and so as they become vacant if they don't already have them we do that so they often need roof repair so as they come up and we are transitioning now we do budget what we need to to bring the kiosks so that they're leasable going forward I think also you may have been speaking about the revenues into the kiosk fund and during COVID we suspended the parklet and so we're going to see more revenue coming back as we begin to implement them later in the fall thanks Kathy and yeah just to point that out when you look at the year end estimate for fiscal year 23 so we had a number of vacancies in two of the kiosks and I know Councilmember Bruner you know this well and so we have moved forward now in putting forward basically a new solicitation RFP to refill those kiosks but during the pandemic just in trying to support and keep our businesses particularly our kiosk businesses which are typically start-up businesses and new restaurants to really help support them we did not collect rent on a lot of those so this is reflective of the revenue and our projections for what we in a typical year have which is what we're proposing for next year that's good to know thank you thanks Kathy and I have to comment on the art again and those visuals and you know they say your budget should reflect your priorities and you know we have some very serious priorities a lot of them are invisible to people for example our water pipes and infrastructure but for art it is amazing and I'm so happy that part of our budget and our priorities as a city because it really supports artists who are often some of the lowest paid and struggling professions and it just activates our city in such wonderful ways so thank you for having that in your department and Kathy Mintz thank you for overseeing all of those programs as they come over the next year I'm just really happy to see that we are a city that really finds ways innovative ways to integrate art into everything so thank you thank you for the questions Ms. Cullentary Johnson thank you for that presentation Bonnie I have a question and a comment on page 109 with the performance measures are listed I'm trying to understand how to read the percentage change in downtown retail commercial vacancies minus one percent can you just explain what that's actually saying that we will have one percent less vacancies is that what that's saying? I believe that is what that is saying okay I just wanted to make sure I was reading as it could look like it's going in a different direction than what we want we will have one percent less vacancies in 2020 and I will say our actual downfall vacancies are really low so they were less than three percent so this is actually a big goal to modify that but I think we're there with there's so much activity now and interest in the downtown even though there are one really notable vacancy downtown there are there's a lot of activity and even those that are vacant now have leases sign leases on them and they're working on them many of them so it's pretty exciting time okay great and then so to that point the comment request I have is that I know there's a lot of work already happening around downtown revitalization and business district revitalization and glad to see and hear about the budget allocations for downtown and alley improvements and lower pacific and pacific avenue we could add that in the FY 2024 goals however is the best way to articulate that but business district downtown revitalization to sort of capture that because I know the great work is already happening and will be happening into the new fiscal year happy to thank you thank you Ms. Brown so council member Calentary Johnson asked my question related to the vacancy rate so thank you for clarifying that I'll just while I have the floor say it's amazing every year I kind of have this wonderful warm feeling when we get your your overviews and hear from you and this year there's no exception and in particular I want to call out the amazing work that you all have done to get affordable units built you know in the pipeline and getting built it's just it's incredible with the limited resources that we have the small team that you have to be able to leverage all of these funds to bring it together and make these projects happen is just incredible work so thank you and everything else as well thank you and I just want to acknowledge to our housing program manager Jessica DeWitt her background some of you know she worked for a non-profit affordable housing numerous ones before coming to the city and she's a real asset to have someone who has that experience and it just makes our whole team very cohesive and really be able to move these projects forward in a way so we and it's interesting because it's not just our housing team you know so we have you know on some of our projects side we're moving housing projects forward and mixed use housing projects forward across our development managers as well but we work across all the disciplines and projects forward so thank you Miss Watkins Thank you mayor and yes thank you Bonnie always and your team for all the great work that you do I think my question is in regards to I don't know how this would be reflected in the budget but in regards to the warriors and all that they bring in terms of their economic vitality to our downtown is that something that you can kind of be able to explain in some of the charts or not necessarily probably not in these budget pages but I can't share with you and one thing that's not reflected here and this goes into our public trust fund is we receive approximately 350,000 from the warriors on the payoff of their loan every year additionally we do receive the admissions tax we have a $1 per ticket facility use fee that goes as well into our funds so just from those original 2012 agreements we have I will say at this point we pretty much they've more than paid off the loan the $4 million loan that we gave to them originally and obviously the community benefits far exceed the monetary benefits that we've received but that was a question early on was oh we're giving this fund this loan and we're using public funds and we'll never get that back and in fact we have more than made up for the original loan that we provided and the businesses that have been able to really support the warriors and benefit from the warriors you know the specials that they have on game night you know the activity of people parking in the downtown you know walking to the warriors and hopefully you know shopping and dining in our downtown has just been real true community benefits. Yeah agreed and I appreciate you speaking to that the other thing that was brought up with Elizabeth's presentation was the just sort of fear of recession and I'm wondering how that might be factored into your budget as well. Yeah I mean our budget you know we're so much of our budget is non-general fund you know it's going with grants and many of the projects and some of it is the CDBG funding and some of the home funding so we're trying to offset as much as we can through other non-general fund sources I think as far as you know recession I mean that's more of our focus with the business support side right and that goes into some of our programs that we have with national development council for financial technical assistance with small business development center to provide free business consulting into you know the community for Santa Cruz businesses and our growth Santa Cruz loan program offering below market loans so we're really focusing on some of those opportunities as well as like for our parklets for our restaurants being able to offset you know a large portion of those cost of making those so those are the types of things we focus on on that side okay thanks I think that great thank you Ms. Lipscomb on my page 111 top item homelessness response fund 6105 is zeroed out for the upcoming year and that is a function of what that was specific funding we had provided in our budget as part of the American rescue plan funding that we had and so we provided a cab rental assistance through the pandemic so that was some specific funding we had for that that we provided as part of the homelessness response okay thank you ocean street beautification you elaborate on timing and what those elements might be yeah so we have a survey out right now and we're you know it's early or third week of May and I think we'll keep it open to the end of May early June as I mentioned earlier we've received over 557 responses as of today and now that the banners are up we expect to get even more and we're asking for feedback on the primarily the intersection but it's really our gateway this is funding we put in the budget actually when redevelopment was terminated as one of our bond funds and at that time the ocean street beautification plan sort of the ocean street corridor study was underway and we knew we really do want to do an investment on ocean street we're focused in working with a lot of the surrounding hotels right at that entryway on some safety and security measures but also beautification including some public art elements we're working with public works and looking at the median and working with the hotels and getting feedback as well as some of the residential areas surrounding that so the survey is up we can make sure I believe we have a link on our city website but we can make sure the survey is up we're getting some great feedback from members of the community on what they would like to see there even the sort of style of some of the improvements and the beautification the let's jump a couple of steps forward that's completed you've analyzed it would it be fair to think that sometime during the 23 24 fiscal year there's actual work on the ground I believe so I believe we will be able to move some elements of that plan forward in this next year I will also say that this next year is the 100 year anniversary of the giant Dipper and so we've also been talking about as this is our major gateway to the ocean and the water walk we are talking about how to work with them we have and it's been a little dormant during the pandemic but a very active banner program and so we're looking at also sort of kicking off some new banners we're looking at sort of ocean themed and we have some amazing photographs of both of West Cliff but of surfers and you know as we have the classic coming up again the beautification at least along the banners we completed the banner infrastructure a few years ago that does support these very large banners so we're excited to put that underway this year as well but we're hoping we can really get some of the intersection say the median near the intersection addressed this year very good does anybody suggest putting a big yellow sign sorry we'll move on are there other quick questions or comments members of the council certainly the ocean street beautification project that's when you come off the highway 17 onto ocean street I just noticed that it's listed under district 2 and it's marked on the map at ocean and Broadway or like ocean near Broadway in this report so it sounds like it's the funding when we created it is actually all of ocean street the idea certainly the commercial areas up to the highway was the intent I think where we're focusing at least initially is the gateway right the highway what you experience when you first come into Santa Cruz just dovetail on the exciting project around the beautification is that we are also you'll hear from Nathan a public works related to a plan pavement project for ocean as well so we're trying to coordinate this opportunity to just really enhance the experience that our community members and visitors have as they're coming in really our main gateway to Santa Cruz so I guess I want clarification on page 243 project number C512001 department economic development ocean street beautification what is that referring to the gateway or something else my CIP pages and you're looking at CIP now right do not have page numbers on them so I'm flipping through it is the same thing that I just mentioned though it was originally budgeted with our 2012 on the screen thank you it says map number nine ocean street beautification yeah and I'm not as familiar with the exact district map to see where that is but the intent of the ocean street beautification and the funding where it started is all of ocean street I would just say the commercial it's not where it connects all the way down to the river it's the more upper ocean where you have the majority of the commercial but all the way to the gateway can we have that reflected in the correct district please before the final budget thank you we can certainly have that updated thank you thank you for the questions and comments any further questions or comments thank you so much your department does a great job you're absolutely right small and mighty but it is a constant joy the work that your department does for our city across so many dimensions under such excellent conditions you know across so many dimensions under such extraordinary challenges with other levels of government your ability to leverage funds into our city which is essentially bringing our tax dollars back home from Sacramento and Washington DC it's not like it's somebody else's tax dollars those are our tax dollars and you bring them back in so we can spend them in our community and it's very much appreciated thank you Ms. Lipscomb they're a pleasure to work with and I will say actually the entire city team is a pleasure to work with because we are such a small team we really do rely on the partnerships and collaboration across all the city departments so they make everything we do better and much easier and much more fun so thank you thank you Ms. Lipscomb we were on the fourth item here this will be planning and community development Mr. Butler how are you sir doing great thank you Mayor Keely and good evening Council Bonnie thank you for pulling up the presentation and I have with me this evening Vivian Pearson and she'll be filling in for part of the presentation on the budget and also our assistant director Eric Marlatt is here with us as well alright I want to tell you about our core services our people our achievements, our goals and our budget and Vivian will cover the budget section for us and I want to start with our mission which is enhancing the quality of life safety and civic pride for our community by providing land use and development guidance through responsive respectful and efficient public service our core services include land use development and community engagement those are primarily handled in our advanced planning, our current planning and our building division we also focus on public health and safety particularly in building plan check and inspection where we're looking at structural integrity and escape and rescue and emergency lighting and a whole range of other safety measures we're looking at our rental housing stock and our existing building stock as part of both rental inspection and our code compliance functions we work with Tiffany Wise West on our climate action plan implementation as well as we implement green building functions all falling under that public health and safety component and then of course we are always striving to improve our customer service particularly as we move to online and digital services also recognizing that it's important to provide that face to face at times as well. Here are a few pictures on the left and right of our team in action at our public information counter on the left and out in the field on the right and then our code compliance team with some of the new safety gear that they just received and some of the projects in various stages of construction including the groundbreaking for the Jesse Street Apartments 50 affordable units in the bottom left there but we'll show a sampling of the other projects today in just a few moments. All right, we have 35 full-time staff members in the upcoming budget between our five divisions administration, advanced planning, current planning building and safety and code and rental and here are our team members that really make all the work happen and help deliver those services to our customers and make sure that our building stock is safe. Moving on to the achievements. Matt mentioned this in his introduction and we are really happy to have achieved the regional housing needs allocation numbers for our fifth cycle which you can see here include 910 out of 1,715 units or 53% of those units in the fifth cycle really great achievement there and of course while we are happy to celebrate that we do have a lot of work ahead of us when we look at our sixth cycle those numbers are five times the numbers that we have for our current cycle and if you look at that middle row what we've done in the fifth cycle you can see in the low income category that's where we're actually closest to achieving if the same number of units were produced in the next eight and a half years were produced in the prior eight and a half years we're closest to achieving that low income category so we've been doing good there we're still short 461 versus 562 that we need but when you look at some of these other categories like very low income that has been the hardest to produce and you can see we've got to quadruple the rate of very low income category in order to accomplish our rena targets for the next cycle so I hope to be in front of you in eight years in saying that we have accomplished that but it is a big task ahead of us just over here good news for us alright some of the other things as far as accomplishments go we currently have over 2600 units in the development pipeline over 880 of those are affordable units and about 224 of those are permanent supportive housing units and these represent work at various stages of development from initial preliminary review application through construction some of these are falling in the current rena cycle some of them will be hitting in the next rena cycle and they represent work across multiple divisions and departments so an example of the work that one of those divisions has done this fiscal year is in current planning we're on track to approve about 800 residential units this year including 189 de-restricted affordable units numerous assisted living units and memory care units and all of those across 85 discretionary permits and here is a sample of some of the larger projects that we're working on this year all of these are going to continue on to next fiscal year but just this slide right here gives you an idea of both how busy we are in our department as well as it really highlights the changing face of our city and I want to acknowledge as Bonnie was mentioning before me the work that we're doing as a team is not occurring in a vacuum we have many departments that are working with us to help bring these projects forward public works, fire, water, economic development of course are all working on these projects and I want to highlight that six of these projects up here are 100% affordable and three of those are on city-owned property where our economic development and housing department is working hard to facilitate the production of those affordable housing units in conjunction with the rest of our development partners here at the city moving on to the statistics we're on track to approve over 1650 building permits this year we're on track to field over 11,500 phone calls and walk-in customers we're on track to have nearly 10,000 inspections that includes about 2,400 in our code and rental division and about 7,400 in our building and safety division and we have a we're on track to have a building permit valuation of about 120 of over 120 million for the year and I just want to point out that the actual valuation the actual investment in our community that's coming through our building division is underrepresented by that figure the actual figure is about two to three times what that 120 million is so quite a lot of construction investment coming into our community right now some of the key policy work that we've done this year we of course completed the objective standards late last year we've been working hard on the downtown expansion plan and we have our first draft of our housing element into the state HCD housing and community development department and we'll be bringing that back to the council later this calendar year for their approval we also finished our first season of sidewalk vending ordinance implementation last summer and have kicked it off this year as well quick sampling of some of the key goals that we have coming up for this year we've got a lot of them but some of our top priorities of course are the housing element certification and our downtown plan expansion work we also are working on a new land management system our land management system is pretty antiquated and is no longer being serviced by the vendor and so it's really critical that we're able to get this system updated we'll be bringing something before the council in the next month or so both with respect to a contract request with a new vendor and also with a fee request to fund that new implementation and then finally customer service improvements are something that we're always seeking to implement the land management system certainly falls into that it will provide a lot more capability and more opportunity for 24 seven service and access to our system as well as just getting our staffing up to filling the vacancies that we currently have so that we can provide that customer service handouts and brochures and web updates of course and then our increased digital presence in online processing capabilities and I will go over to Vivian who will present to you the details of our budget great good evening mayor and city council I'm pleased to share with you the planning department's budget of nine million dollars and of the nine million dollars we have about 66% allocated to personal services and 34% towards supplies and services with less than one percent towards capital outlay now taking a deeper look at our nine million dollars we have most of about 30% of it going towards our building and safety division followed by our planning administration of 28% and the rest of the divisions and programs comprised of the remaining 42% so you'll see the breakdown of our nine million here now taking a closer look at our revenues versus expenditures our main line here are focused on our revenues and the two expenditure lines are the ones in orange and then also personnel expenditures are in blue so for revenue the difference between this upcoming fiscal year 24 compared to last year we see approximately we're estimating a slight revenue decrease of about half a million dollars and that really one of the projects go through that really impact our bottom line revenue so it's a slight decrease and then we will look into the expenditures for services and supplies and so as Elizabeth has explained in the finance departments we are impacted by the allocations and so those are a lot of the increase that we're seeing about 900 million dollars sorry 900,000 dollars going to be impacting the planning department's budget and then for personnel compared to last year we had a limited one position and so you'll see that a slight decrease and Poli and I are here are available for your questions thank you let's see if there are questions a few on page 173 the numbers that I have I don't know if that's it but it would be your page accomplishments and goals or 23 accomplishments good thank you sir the only one that has X's all across is the initiating the downtown plan expansion project community outreach and hearings and then when you turn the page the same concept is the only one that has X's all across the various dimensions so my question is this when will those community meetings begin with regard to the downtown expansion plan sure thanks for that question Mayor Keely we've had some community meetings as part of the early parts of that process and the next outreach we have some community members that have been reaching out to our team individually and we're going out to meet with them so I would encourage any members of the community to reach out to our team if they've got questions in advance of those formal community meetings we're happy to meet with folks and talk with them we do anticipate a formal additional engagement effort this summer we also recognizing the vacation schedules that many folks have that they might not be able to participate in those in a large community meeting this summer so we do anticipate having that same opportunity for people to participate online if they're not able to make that meeting seeing as we want to keep the project moving forward and so this summer while we'll be going out we'll also be offering that as a virtual opportunity to engage in the next stages of the project so I would like to share with you what we're going to be doing this summer I would also note we will be back in front of the council in June related to this with a contract amendment the additional direction that council provided earlier this year we've been hard at work with the consultant to make sure that we can implement that project and have the funding for the rest of the project on track thank you Mr. Butler it does occur to me that what happens in the downtown expansion areas perhaps the most profound and significant change in our history in 100 years in terms of one particular concentrated area downtown I don't think it's I think I say this without fear of contradiction there is more than a little bit of public interest in what that's going to be people are concerned is this going to be something they like or don't like we know that we don't have frankly a lot of options to doing this concentrating much of our growth as required by the state of California to concentrate that south of Laurel so that we can have the lightest touch possible on the rest of the community specifically in what we would call neighborhoods as opposed to the downtown expansion area all of that leads me to say I would encourage you to look at a an additional perhaps hybrid meeting you have the first one in June I think you said or during the summer and then another one maybe online at a later date please consider that second one being a hybrid meeting so folks can show up in person and participate on electronically if they wish to but that's your call but I would encourage you to do that I think that the degree to which there's no surprises for the community on this that this as it's evolving they can see that happening can provide their input I think it's also very important for us to be clear with the public that this is not something that came to our mind and we're doing this completely of our own volition and that this is a response to that significantly increased rena number that you've pointed to in your presentation and also what the consequences are now of not doing that who would be in charge we know the answer to that but I think it will be helpful to continually educate the public on this this is a brand new world for us you can we can only imagine what a new world it is for folks in our community who aren't steeped in land use planning and that kind of thing or state law or shifts and who's in control of land use and all that business so I think it'll be helpful if you would consider that let me ask you to take a look at page 176 in our in the budget which is the budget summary expenditures and resources you tell me when you're there there now thank you sir on the I did notice that on planning administration that it goes up from roughly a million dollars to 2.5 million dollars the line for planning administration maybe you could share with us why that 2 plus fold increases there sure I think I would guess that that is related to some of the carryover expenses or the expenses that Elizabeth was speaking to with respect to services but I'll ask Vivian Vivian I bet that she knows the answer my former graduate student will have a good answer I suspect good evening a former student of Mayor Keeley actually so yes so that accounts for about the nine hundred thousand dollars that the increase that we had so specifically those line items would include the legal service these are all internal so legal services we have the informational the from the it team and then you see services so these are very internal charges that Elizabeth had mentioned that now are being charged for each department so it does seem alarming that there's a nine hundred thousand dollar increase but those are just simply internal charges where would those have been reflected prior to the new allocation cost allocation measure where would that be allocated because somebody absorbs it in their budget Ms. Cavill good afternoon again excuse me good evening so we did not those were not in there at all prior so what was right now so it was happening in say fiscal year twenty three is those charges like that's basically what planning is paying for the attorney for finance for HR and then those the revenues for those are going to those other general fund department so it just netted to zero understood so where were those previously when we didn't do cost allocation that way or did we always do cost allocation we always up until twenty four so any cost allocation that came into the general fund was from the enterprise funds anything within the general fund we did not do it by department at all so it was not reflected so I mean that's the same it's still zero but we did not have we did not charge planning nor did like HR finance receive revenue this is a good change then as far as I'm concerned oh it is definitely it shows exactly the cost of services which we didn't have before anybody was trying to but it's not transparent this is transparent thank you for that let me ask on Mr. Butler on current planning which appears to actually be a number that goes down which surprises me on the expenditure side the current planning number would go down given the rise in activity or the volume of activity that you were suggesting would be the case in the new budget year you tell me why that's the case so it does not involve any personnel changes I'll ask Vivian to see if she can outline the specific numbers I expect it's related to some of our services that we're providing there thank you so for current planning obviously it's a very busy division and so we made some adjustments to the services that we have for consultants and so we did make a slight reduction there I'm not sure I understand what you just said I'm sorry say it again explain it to me again there was a reduction in our consultant services and so we made modifications in that area is the thank you is current planning these are folks who come in and want a building permit and that kind of thing is that right no well it's before the building permit stage so the items that come before you are the entitlement stage and those are typically the current planners that are presenting the development proposals and current planning processes those design permits the use permits the coastal permits and so forth and then subsequently they go to our building division processes the actual building permits so building and safety is where the processing of building permits takes place is that correct that's correct also in coordination you know planning confirms that they're consistent with the rules and public works reviews those make sure that they're consistent same thing with fire and water and so forth is that a hundred percent fee recovery system that is not at this point we do believe that there is an opportunity to provide to receive additional revenue we have a request for proposals out right now to update our fee schedule and we've coordinated with our other development partners to include them as well so that we have a comprehensive analysis of water, fire, public works parks and our building division fees so that we can come closer to cost recovery what is the if you know or if you could provide us before we take final budget actions in June what the general fund contribution is that if it is not a full cost recovery system what the general fund subsidy is so roughly for the department I don't have that broken down by division but I can tell you for the department there are around seven actually I can pull up the specific number but around seven or eight hundred thousand dollars so if we look here ask you about that because that's stay on that same page when it's resources by fund it says three point six million dollar general fund contribution to your department I understand that's not broken down by individual activity but if you took that I'm assuming that three point six million dollars which was four million dollars this year and it's intriguing to me that it would be going down which I like but this we still have three point six million dollars some portion of that is underwriting the building operation which could be a hundred percent cost recovery am I right on that yes so we would I do not anticipate that we would get back to full cost recovery for our entire department and so I just looked it's about stood on that as we have we have a number of activities our code enforcement activities for example let me let me slow you down sir I understand all that I'm trying to focus in on the building where someone comes in asked for discretionary permit whether it's to replace a water heater or build a house or anything else that's a discretionary act here it is you get it you pay us a certain amount we hand you the piece of paper you're good to go we go out we follow up with an inspection everything's fine or not but assume everything's fine that particular activity is an activity which primarily benefits the applicant and the permit holder so my question becomes within that activity that series of activities that as I understand it is housed in your department inside the building department do we have or can we acquire a number that tells us today before you do your study before you come back what is the general fund under writing of the building side of your activity absolutely we can get that information we'll be doing that also as part of the fee study but we'll be doing that also as part of the fee study but we're happy to pull that information and get that for you thank you Mr. Butler I appreciate that sidewalk vending program the proposal here is to go from over the years it's been about $3,000 then nothing then $205,000 then almost $200,000 now $139,000 that's a lot of variation for this variation so we just implemented the sidewalk vending last year for the first time there was also a budget amendment some of the funds that we were anticipating to include in the current fiscal year did not get pulled over and so we we added those in at the mid-year and then we are also we've got a better understanding of how much additional staffing we need to support that so learning from last year we've identified here's when we need that coverage here's when we can stop it in the fall when the activity slows down and so all of that has informed where we're at also we're staffing up in our division so that we can cover some of that work as well instead of going to a consultant thank you take a look I'm on the same page and the very last item under your resources by fund is the child care impact fee fund which is going from $125,000 to $16,000 seems like a precipitous drop in the income and I'm channeling my inner council member Watkins when I answer this question I think just sitting next to you you can feel it I want to ask child care questions Mr. Butler I believe the biggest reason for that anticipated number versus what we're seeing is that the large majority of the projects that we have seen coming in have been 100% affordable and we have exempted 100% we've exempted affordable units from the child care impact fee we did just receive we just had a large market rate project come in I don't have the specifics in terms of what that child care fund was but the front river front project just pulled building permits and began construction and so we will have a bump in that number the council will recall that we're dedicating that to the facility that we have in the library as the first step and then we'll proceed back to the facilities study that would then inform where we invest those monies in the future thank you Mr. Butler I appreciate any other questions or comments I just wanted to build up that question thank you Mayor in terms of child care impact fee because I did have that question so if I might want to make sure I'm following you correctly in that I don't think I want to do any more questions or comments which I recall was what the front street project had identified as the child care impact fee that they would be contributing are you suggesting that that goes as part of the 125,000 for this year? we will have that accounted for in this fiscal year and you're not projecting any additional It'll just depend on when some of those larger projects, particularly the market rate projects hit. It's fairly small for the everyday projects that we see and a large part of our budget is dependent upon the, as is the case with the childcare impact fee as well, when large projects end up pulling building permits. And what would those projects be given the slide that you presented if you don't mind? Sure, yeah, I'm happy to take a look. That would be considered contributing projects to that fee. So I would anticipate that this coming year, we have, we'll have Coral Street, that's 120 units, but it's 100% affordable, so we won't get the... That's not it, right? We will have, I would anticipate this coming fiscal year, the Delaware edition, which is about 160 units. So I do anticipate getting that they are in for building permits right now and are indicating that they want to move forward expeditiously. The other one, well, the library is 100% affordable, so that wouldn't, that's the main big project that I see pulling building permits that is not 100% affordable. In the next fiscal year? Yep. Okay, I mean, that's interesting in terms of the narrative also within the community about what's being developed, right? I think it's important to specify that. Thank you for that. I just had one additional question in terms of the Green Building Educational Resource Fund. I see an increase with that, and I'm wondering if you can help us understand what that's for. Sure, the council may recall that we increased that Green Building Fund and, or the Green Building fee, I should say, and we actually did a broader cost allocation because there are more of us that are working on that than just the one individual. So it was originally allocated to that one individual's work and really as we've implemented that program, it's our inspectors, a portion of the inspectors' time that are out there doing those inspections. It's Tiffany Wise-West and myself and Eric Marlatter, assistant director and others, our advanced planning team working on building electrification and so forth. So there's a small percentage of a number of people that were not previously allocated and that's reflected in the increase here. That's great. I mean, I think that's appropriate, so I appreciate the context. I guess my last question is, and I know you mentioned the consultants fee, kind of being a reduction, and I'm wondering in terms of just like where we are in terms of like the, I don't know if it's seasonal or let's not the right word, but the continuum of having assessments and NEXA studies conducted, where are we on that spectrum? Is that, are we not involving consultants at this time because we are already kind of caught up on some of the information that we need or? So thank you for that question. It actually varies by division. So the current planning division, my recollection, is we did have a slight reduction in that, but if we have a current planning project that comes through and we need to, for example, consult with our outside council, Sabrina Teller with Remy Moos Manly, for example, who you all have seen, those costs are actually reimbursed by the developers. And so we charge the developers for those costs and therefore we've got that budget allocated, but if we need to increase that budget, it would be associated with a corresponding increase in revenues that are coming from that current planning. So we were comfortable reducing that consultant budget because particularly in current planning, those are gonna be directly reimbursed. Whereas in advanced planning, for example, we have a lot of consultant work that we've got going on and between the housing element and the downtown plan expansion. And same thing with our building division. We're expecting substantial amounts of additional consultant work. As we're getting these big projects in, we're often, for the big projects, almost universally sending those out to a third party plan checker because in order to meet the turnaround times that we've established, they have the resources, separate plumbing reviewer, mechanical, electrical, structural, versus our limited staff that can turn that around in the timelines that we wanna provide the responses. Okay, I appreciate the identification of which division that falls under. And then just going back, sorry really quickly to the childcare impact fee in that I remember as identifying a portion of the fee going to support the childcare within the library project, but that was prior to the $100,000 coming in from the Front Street project. So I'm just curious where that is reconciled. So right now, I think the direction that we have from the council is to focus on that library affordable housing project. What we can do is in coordination with economic development as that project moves forward, we can provide the council and we will provide the council with an accounting of that. And the council will then be given the discretion to say, let's dedicate this entire amount towards that or let's siphon off a portion of it and start on that facility study. So as we work with our economic development team to progress the library affordable housing project forward, we'll be returning to the council with updates and that'll be an opportunity for the council to weigh in at that time. Perfect. And no surprise, I'm supportive of that, so thank you. Thank you, council member Brown. Once again, waiting till the end means that my questions get answered. But I did have one question or a guess, a comment. I didn't see the housing element in our goal, in your department's goals. Maybe I missed it, but I'm just wondering if that was something that you, just because da, that's what we are, we have to do that. It's not here, but it seems like it's a major component of your work and it is gonna be a real accomplishment to get a certified housing element. So it felt like it could be in there. I'm just wondering about that. Thank you for pointing that out. As you noticed on the slides we prepared, that was the very first thing that I mentioned. And so we will certainly correct that before the final budget, with it not being in there. So thank you. For the questions or comments. Thank you. That was my question as well, thank you. Very good, thank you. Mr. Butler, thank you very much. I will leave it to your recollection, although. I jotted down a few follow-ups. We have down some notes about some items she'll bring back to us on her before the final adoption of the budget. That's correct. Thank you very much. That provides you that information. Thank you. Thank you, sir. And thanks to all of your team, everybody in planning is by far not the easiest activity to be engaged in. You meet folks who are on a wide range of emotions on the spectrum. They have their property, they want to do something with it or they've got some other problem, but you deal with people in all kinds of circumstances. And the service orientation that you and your staff provide is so important because you are the face that many people see and that's their interaction with government, our city government. So thanks to you, we please pass on from all of us, our thanks and appreciation to your staff. We'll do, thank you. Thank you, sir. Well, he has legs. I see three minutes here. I don't think I'll make it quite that fast. The city attorney is really nice to present his budget. Thank you, Mayor Keely, members of the city council. It's my pleasure to present the city attorney's budget to you. I will say at the outset though that the budget has been prepared by the finance department. Our role at the city is somewhat unique and therefore our budget is a little bit unique in that we are called upon to provide the legal services that the city needs in order to function. And that of necessity means that we have to be a little bit flexible. The demands on our time vary depending upon who's sitting up here and what issues are confronting the city. And so we look at the budget as a useful guide, but what we do is respond to the request for legal services that the city asks of us. For that reason, I haven't prepared a list of accomplishments to cite. I will say that as I listened to the very impressive accomplishments that have been brought forward by the planning department and by economic development and that will be coming forward over the course of the budget hearings. I'm proud to say that we've had a significant role in most, if not all of the significant projects and initiatives that have been undertaken by the city. So I am going to move, are you controlling the slides? Is this the button? The mission of the city attorney office is that we are committed to providing excellent legal services consistent with the highest professional and ethical standards with the goal of protecting and advancing the city's interests in serving the people of Santa Cruz. Our functions are one, we provide an advisory function in which our office provides advice to the council, boards, commissions and city staff. We work on ordinances, resolutions, contracts, leases and other legal documents and we review documents prepared by all of the other departments. We're charged by the city charter with reviewing and signing off on every single contract that the city enters into. I sign my name to contracts probably three or four times a day. We also work very closely with the city clerk and the police department in responding to the just inundation of Public Records Act requests that they get on a regular basis. As you know, the Public Records Act provides a broad, very challenging obligation on the part of cities to search for, provide records. We have to go through those and make sure both that we are responding adequately and that we are culling or omitting things that are privileged or not subject to disclosure under the Public Records Act. The litigation function of the office, we defend the city and state and federal court, either with attorneys in our office or through the supervision of outside council. Our case load is diverse and includes personal injury cases, property damages, contract disputes, land use, constitutional and other specialized litigation. We've developed a particular expertise in seeking workplace violence restraining orders on behalf of city staff when they are threatened by outside sources under fairly recent changes to state law that provide us with a mechanism to do that, as well as assist the police department in seeking gun violence restraining orders. At the request of the police department, we seek to protect the community by taking dangerous weapons from individuals who should not be in possession of them. We also represent the city and the people of the state of California in municipal code, misdemeanor criminal matters. Our prosecutors are dedicated to promoting and improving public safety and the quality of life in Santa Cruz through fair, compassionate and effective administration of justice. We work closely with the risk management department and city departments to eliminate or mitigate potential risk and preserve public property and resources and minimize potential city liability. We are staffed by 14 attorneys, roughly 11 full-time equivalent attorneys. I wanna say that at this time, we are in terms of the number of lawyers in our office, the largest law firm in Santa Cruz County. Private law firm that is. The public defender's office, county council have more attorneys in the DA's office, but in terms of private law firms. To be clear, we don't spend 11 full-time equivalents on providing legal services to the city alone. We represent a number of other public agencies in the area, including San Mateo County, Monterey County and here in Santa Cruz County. The ability to represent multiple agencies also provides us with efficiency in really learning from the work we do for other agencies and more efficiently providing that assistance to the city and vice versa. So just very briefly, our plan for the coming year is nothing really extraordinary. We hope to continue to provide timely, accurate and practical legal advice and perform legal support for negotiating and drafting all legal documents and supporting services required by the council and all city departments, including key council priorities like the March 2024 affordable housing bond or affordable housing measure, let me correct that, and the recently approved oversized vehicle ordinance. We seek to keep abreast of continually changing legal and regulatory landscapes and maintain systems, provide the council boards, commissions and departments with timely and practical information on changes in the law to facilitate compliance and implement best practices. We will work with the planning and economic development departments to provide legal support on all aspects of the legal issues that arise from major development projects, including the library affordable housing project. We hope a new Warriors Arena and of course the downtown expansion plan. We will continue to provide open government advice and training, including Brown Act, Public Records Act, conflicts of interest and ethics training for city staff and city officials. We will continue to work with the city clerk and the police department to provide legal support in reviewing and responding to a myriad of PRA requests we receive every year and to improve our efficiency and responsiveness in dealing with those matters. We created a special Public Records Act team a couple of years ago that is dedicated to receiving and distributing the work so that we have people who are regularly involved in handling those matters and achieve efficiency in so doing. We will continue to assist the police department to ensure our officers are properly trained to effectively enforce our laws while respecting the civil rights of our community members and continue to vigorously defend the city in litigation while working to resolve matters in the most efficient and cost effective manner possible. And we will continue to oversee the work of outside counsel to ensure that the city is being well represented in matters where specialized expertise is needed. So this is in your budget packet. This is a status quo budget. It's interesting to note that fiscal year 2022 the actual expenditures of city attorney's services were significantly higher than this past year as well as what's proposed for the upcoming year. I did note in preparing for this meeting that the 16 1.614 is almost the same amount that was budgeted for city attorney legal services in fiscal year 2021. And of that approximately 60% is general legal services, our day-to-day advisory work, our day-to-day contract, ordinance drafting, attendance at meetings, whatnot. And about the other third or approximately the other third is either litigation or code enforcement. And several years ago and sort of consistent with what the finance department has done with regard to breaking down costs according to department, we started tracking our time that was attributable to the different billing categories that we've created. You'll note that the largest use of our resources has been the city council. I think a couple of comments are noteworthy here. One is that unlike all of the other departments, we don't spend hours in regularly scheduled meetings with the planning department or public works or the police department. So that's a significant cost that the city incurs and it skews the city council categories to some extent. Secondly, a lot of the work that the other departments are doing are what we consider work on behalf of the city council. And so sometimes we'll be working on an item that might relate to homelessness. We'll charge it to the city council category because it's in response to a directive from the city council, even though we're working with city manager's office, police department or another department on those matters. You see that there is a significant expenditure of city resources on public records act issues. And that is simply a function of the state law and the burdens it places on the city, particularly the people who are doing the Lord's work in the city clerks department and people who submit sometimes requests that are either spite requests or unnecessarily overbroad and demanding. City manager's office as well, we work very closely with and therefore devote a significant amount of city resources to that. And then planning, economic development, water, public works, parks and rec, PD and fire gradually go down. We did have a category for work that we did in connection with the various emergencies that have confronted the city over the past couple of years. So this is a rough breakdown. It's not completely accurate, but I just want to give you a sense of how those resources are being expended. And this point I am happy. Oh, one more is this chart shows a comparison of similarly sized cities and their city attorney budgets. This is actually information that was put out by the city of Berkeley when they commissioned a study to look at their city attorney's department and figure out if they were getting cost-effective, legal services. And you can see based on these cities, they're mostly larger than the city of Santa Cruz, but on a per capita basis, city of Santa Cruz gets a pretty good bang for its buck, I would say. And with that, I am again pleased to be able to present our budget to you today. And I'm happy to answer any questions you may have. Well, thank you, Mr. Kandadi. Thank you so much. The, if you would take a look at your budget page, if you would bring that back up, there we go. The number that jumps off the page is the net general fund cost, which I think is a celebratory moment for us. But let me understand how this is going from one and a half million dollars over several years to $54,000 in the upcoming fiscal year. I think, but I will let the finance director speak to that. It's the same reason that you've seen other expenditures allocated to departments. We're allocating across departments. I don't doubt that, but I want to see this. I want to hear, thank you. Ms. Cabell, good afternoon. Good evening, rather, yes. Yes, so we had, as we mentioned before, we did not do any allocation within the departments before any general fund departments. And so now that we're doing that, you're going to see huge differences in the services. So yes, that is what's causing. So that is a happy moment here in city attorney land, but somewhere another $1.3 million is going to be spread across other departments. So given the chart that Mr. Condadi showed us in terms of who uses how much of their service, I'm assuming that you allocate based on use. Exactly. So well, then that makes me ask the question about the city, well, it does. It just makes me ask the question when we get to the city council's budget, we're going to have a question about that because I don't think it's reflected there. So we'll talk about that when we get to the city council budget. We're the largest single user as a department of the gentleman of the city attorney's resources, then it doesn't reflect that in the city council budget that's proposed. And just really quickly, I can answer that. We have an OMB compliant cost allocation plan and as part of being OMB compliant, we do that for grant purposes, city council elections, are those specific fees? We do not receive that cost allocation. So that's part of that, we had a choice when we were doing the cost allocation plan. Do we want to be OMB compliant so that which makes us a little more competitive when we're trying to do grants and things, or do we not? So this was the first year, again, we're kind of trying to figure out exactly what makes sense, but that's why. City council expenses in particular are exempt from, are not part of the OMB compliant plan. So that's why you're not gonna see that in city council, which means it's spread out over everybody else. We'll revisit this topic, but thank you very much for that answer. That's very elucidating, I do appreciate it. Thank you very much. Mr. city attorney, let me see if other council members have other questions. Council member Watkins is recognized. Thank you, mayor. I actually, I don't know if this would be for you, Elizabeth or Matt, but I'm just wondering if there's a way to quantify how much is also spent on outside council attorney fees in addition to what we spend on your legal fees as well. And I don't track that information. I assume so. But I'm sure that. The short answer is yes. We're happy to provide that information and we do track that by department related to what services are being provided by ABC versus outside council. Yeah, I think, I mean, I'd be personally interested in what we're spending on legal fees in general. So thank you. Other questions or comments? Ms. Brown. I'm very much interested in that information as well. So thank you for raising it. I just want to make a comment here because you showed us the compare comparisons across different jurisdictions, but there's also kind of a historical view here and having been on the council for a while, I want to say that I recognize that you, your office has been providing these services without a significant increase in the contract amount, right? So in-house, city employees get, according to our contracts, raises and that happens within your firm and you figure that out internally. And it just struck me when you said it a couple of years back that the way that you're managing this contract is really a huge benefit for us. So I wanted to, in addition to thanking for all the work you do and kind of the roller coaster that it can sometimes be that you're really doing us an incredible service. I appreciate that. You might recall from the meeting we had back, I think in January, that the council approved a contract amendment and a CPI adjustment. We've actually had a provision in our contract that allows CPI adjustments since 2017, but just given the financial circumstances that we're confronting the city, we did not make those adjustments on an annual basis. Now the legal climate is changing and it's getting very hard to attract really good lawyers. And so I suspect going forward, we will be asking for or implementing an annual CPI adjustment just so we can keep up with the market. For the questions, comments on the city attorney's budget. Mr. Gennady, thank you very much. We will see you in June. I think I speak for everyone here. We thank you for all of the work that you do and those members of your staff who you bring into closed session and provide us with good advice and counsel. I wanna thank you personally for your assistance in preparing for and undertaking conversations with the University of California at Santa Cruz and the office of the president of the University of California. We hope that that will bear fruit as we move along. If it doesn't, it sure isn't your fault, as for sure. I know who's it is. But thank you very, I'll get it aside. Thank you very much for your very good work. If I could make just one parting comment, I just wanna say that my firm has actually represented the city of Santa Cruz since 1964. And during that time, I am the third person from the law firm that was established by Rod Atchison to serve as your city attorney in over 60 years. It has been really the professional privilege of my life to work for and serve the community in which I moved with my wife in 1993 and we've raised our family here. And so to be part of this community and to be able to provide this public service has really just been a professional privilege of mine. And so I really do appreciate it. It shows sir, thank you very, very much. We will move on to the sixth and final item for this evening, which is the homelessness response. Ms. Murphy, good evening. Good evening mayor, good evening council members. I'll be presenting the homeless response budget and I have with me, Larry M. Wally to help present today. So let's see, I start with feel the power. Okay, a brief agenda of what we'll be going over this evening, we'll be reviewing the homeless response action plan, the California 14 state grant, ARPA funding as well, the city wide homeless response budget and expenditures or fiscal year 23 achievements. We'll talk about the grant fund carryover for FY 24 and our goals for the following year. I'd like, oh, that's gonna be tough to read well. I'd like to start off with just recognizing that just recently the city of Santa Cruz city council undertook strategic planning in April. And of one of the stated goals was homeless response. This is difficult to read. I will just read the goal statement. Working with the county move toward positive outcomes and homelessness response, safety and health, balancing the interest of persons who are unhoused in the business and the business community. I bring forward the strategic plan focus because it is tied to the budget and the budget goals. We believe that the proposed FY 24 budget will work towards achieving the goals as stated. In March of 22, the city adopted the homeless response action plan to guide the city's efforts on homelessness over the next three years. And in particular implemented two major council policies. The CSSO, which was adopted in June of 2021, which is the camping services standards ordinance, which required 150 emergency shelter beds. In addition, the council also adopted in November of 2021, the OVO, Oversized Vehicle Ordinance, which required as a portion of that program, the safe parking. This, the homeless response action plan incorporates those directives. The homeless response action plan was funded by one time funding, the California 14 million and 4.7 of ARPA funds. This is important to keep in mind as we work through the homeless response program. There were five key action areas identified in the plan. Basic support services, care and stewardship, community safety, building capacity and partnerships and permanent affordable and supportive services. The city received the 14 million of state funding one time and 4.7 of the ARPA funds to implement the homeless response action plan for a total of 18.7 million. To date, the city has spent 12.6 million, which leaves a carry forward of six million. I will go into further detail about the expenditures and the carryover later in the presentation. The reason for the carryovers, the unspent funds, is that not all the funds were able to be spent due to staffing capacity issues, our ability to undertake all of the projects, process, bid process, locating facilities, obtaining service providers. And again, it results in a six million carryover, which again I will discuss in detail. Ms. Murphy, could you pause for just a second? Are you showing us slides and documents that are not in our budget? I am because, as you will see, the homeless response in my next slide will spread out multiple departments. So this is compiling all of the expenditures across the departments. If you don't mind, I'll show you in the next slide and I'll hopefully answer your questions. Thank you. And as the mayor just pointed out, you won't see the entire program because the funding while the 18 million was budgeted in several departments and it crosses multiple fiscal years. So as you see in this slide, the different departments, the city manager's office, the public works department, the police department and economic development which you had pointed out earlier in doing Bonnie's presentation. Just to accolade you to this slide, there are several years of which that grant funding has been spent. And in FY22, started tracking these funds and 1.269 million was spent primarily on the Benchlands shink sanctioned camp and we started ramping up the HRT, the homeless response team. In FY23, you notice the large increase in funding. Again, those were the grant funds. Primarily were budgeted in the city manager's office. They were also budgeted in public works and police department and the economic development. Those funds primarily for the city manager's office had to do with implementing the homeless response action plan, specifically our safe sleeping programs including the armory, the safe parking programs, 1220, the staffing which is our outreach workers, a homeless response manager, a homeless response coordinator. It also entails encampment cleanup and support and what we call partnerships. The public works department is all primarily staffing for our homeless response team. And I have another slide which I will go over further for the staffing. The police department, again, that's primarily all staffing and those are our two CSOs. And economic development, that was for the rental assessment programs that was one time funding. I keep bringing up one time funding because it's very important as we move into FY24. But to round out FY23, the funds were also not only in the general fund which is what you see there. And if you refer to the pages in the public works department and police department and economic development department, you will see those line items. The CIP also received 8.5 million for projects. Those projects included the Coral Street Hygiene Bay Project, the purchase of the Coral Street property and pre-designed for the Navigation Center and the Benchlands closure. And again, as you can see in FY23 versus the actual, it's not all funds have been spent which results in the six million that I will be talking about later of carry forward. Of note for FY24 as we move forward, those one time funds are not here. What you see here is solely general fund. The six million that is, again, we will address later is what we call carry forward and it's not captured here. The funding in FY24 is primarily all staffing. It includes again the homeless response action team, the CSOs and the staffing for the outreach workers and the homeless response team, as well as our contribution to the COC, the continuum of care. I'd like to just detail a little bit more about the 12.6 million and categories I think are very important. If you look at this chart, you'll see of the 12.6, 4.6 million was used for permanent supportive housing activities. In five million, we utilize for temporary shelters. The combination of that is approximately 80% went to housing and support services for the homeless. 1.2 million was for the homeless response team. The 150,000 that was Bonnie, which again disclosed about the housing assistance programs. 1.4 went to encampment services and cleanup that includes the bench lands. And then just 100,000 for consultants and what that was for is the mobile crisis response consultant and then we just recently have a contract with a lobbyist which we'll just be getting started to help us work with our other coastal partners and cities just like us to help get us some much needed legislative support. I just want to add a note, not included in our numbers, but I think it's important to point out that's not captured in the homeless response budget, which I think you correctly identified as 6105. That's the magic number. So those programs, just to point out that do reach out into the homeless services world is our downtown streets team, the hopes team, which is the homeless outreach proactive engagement and services team, our downtown outreach workers and our mental health liaisons. I also wanted to note that these were not included, any of the core funding. I'd like to, again, it's a little difficult to see, highlight the accomplishments that have been achieved. I think they're very worthy of discussing. First of all, the dedicated homeless response team and I have them in three silos again because they're funded in three different departments. So you can see, I'll begin on the left with myself, the homeless response manager, the coordinator, our outreach specialist and our communication specialist Susie, which I failed to mention earlier. And then within the public works department, this is where the boots on the ground, well, I'm sorry, outreach workers, they're all boots on the ground, but this is where HRT field response team are the crews within public works department. We have the senior crew leader, we have a supervisor, we have three HR field crew workers. And in the police department, we have the two community service officers. And the reason I have the sergeant little box out there was just recently the police department has been able to assign a sergeant to oversee the community service officers and solely dedicate that person's time to homeless response. And we will capture that going forward, but it's not captured in this budget. Like to highlight some of the action plan accomplishments. Obviously we implemented the three year homeless response action plan. We've provided shelter to over 400 individuals. We've supported the rehousing of 62 formerly unhoused individuals. We've opened the city overlook, 135 capacity. We established the 1220 River Street transit transitional community camp with a capacity of 30 individuals. We've also established the city's safe parking program. We safely and humanely closed the bench lands. We also opened the severe weather shelter we had it open for 19 evenings. We purchased the property on coral street for the potential navigation center. We began the coral street visioning project. We recently retained a legislative advocate to form those partnerships. We provided 150,000 in tenant based rental assistance to low income families to prevent eviction. We recently issued the pre-development grants. This is to provide financial support for individuals to compete for state and federal funding. We also had the contract with the integrated health response team. It's a lot of accomplishments. Good job Larry. Now what we haven't been able to complete and this is where the six million comes into play. So what we haven't yet been able to implement is the shelter infrastructure which is the funding for the pallet shelters that housing matters. We have not been able to complete or start the RV dump station. The storage facility program which was part of the CSSO ordinance. There was also funding for additional transitional camp. The navigation center pre-design phase and establishing an additional indoor shelter facility. And the six million that is the carryover which is an administrative action that will happen at the end of the year and that's why you don't see that number populate in FY24 general fund. What we're recommending here this evening is to reallocate that six million from the projects in the previous slide. We're recommending reallocating to support several important programs and not fund the other planned initiatives. What are those recommendations? What you'll see in this slide here is on the left hand side are programs that have not been completed and then also in the yellow are the programs that we're asking you to reallocate the six million to fund. That's the middle column with the dollars, the reallocated of the current remaining funds and then the final column is what will not be funded if you accept my recommendation. We think it's very important to continue to fund the city overlook at the armory at 4.8 million. Continue funding the implementation of the storage program as it relates to the CSSO program. Continue the funding of the 1220 River Street. Continue funding of the staff, the safe parking all three tiers. Additional funding for the encampment response and cleanup and funding for the severe weather shelter. As you well know that again the 14 million and the ARPA fundings of 4.7 was one time funding. In order to continue these programs we are asking for the reallocation of the remaining funds. It's a difficult choice when you look to the what's not going to be funded which includes the shelter, the pallet shelters for housing matters, the RV dump station and additional transitional community camp, the navigation center phase two, additional alternative shelter, indoor shelter and a mobile crisis response. We will have the opportunity to look again at what funding opportunities might be available at mid-year. We are still waiting to hear about the encampment grants. We still have not heard of those funds if they were awarded six million for two years. So there will be an opportunity hopefully to revisit. Finding one of our goals in conclusion, reduce the impacts of encampments, continue to support temporary shelter programs in accordance with the CSSO and the OVO, continue to provide much needed outreach services to create a severe weather shelter program in coordination with the county, create the storage program, continue the safe parking program in accordance with the OVO in the future, potentially implementing the integrated health response team which is the mobile crisis response and finally obtain sustainable funding sources. And that concludes my presentation. Thank you, Ms. Murphy. We look to see if there are questions. Ms. Collin, Tari Johnson. Thank you for the presentation, putting it all in one place and for all of the incredible work. I have questions and comments. I wonder if we can see that slide with a pie chart that shows what percentage goes to what? Took a picture of it. I'm more than happy to provide email the PowerPoint as well. Great, thank you. Yeah, it's got the 12.6 in the middle. Yeah, do you want me to do it, Julia or do you? There it is, there it is. Yeah, just I think it's really worth noting that the majority of this is really going towards services and supports. And this is something that I would like us as a city to communicate. We often get folks who comment and criticize the work we are not doing or that we're investing our dollars in enforcement. And this chart shows the facts of what we are investing in our dol