Here. Clever. Here. Meyers. Here. Brown. Here. Matthews. Here. City television channel 25 and is streaming on the city's website. City at the city of Santa Cruz dot com. Hudson Sanses is our technician for today and I'd like to thank you Hudson for being here and for your work. The purpose of today's meeting is to hear the fiscal year 2020 proposed budget. Our budget hearing schedule will proceed as follows. We will hear some content this morning from our city manager Martin Bernal and our finance director Marcus Pimentel. We will have an opportunity for public comment. We will take a break for lunch, we'll return and see if there's any additional comments and then we'll get into our council deliberations. Does our city manager have any additions to the proposed schedule? I don't, thank you. Okay, great. So at this time we'll just jump right in and good morning, Marcus. Good morning, Martin. You're welcome to take it away. All right, thank you. I was going to just start out by doing a brief introduction and essentially summary of the budget message and then I'll turn it over to Marcus who will dive into additional detail and process with respect to the proposed budget before you. So first of all, thank you very much for the opportunity this morning to go over the budget. And I will start with, I've got a few slides. Okay, so I'll start with, what really is the- Is it on? I'll be over to you. Got it, thank you. So the overall theme really is to proceed with caution given our fiscal outlook and some of the issues that we're facing and we'll go over those in a second. But I think that's basically it, that again if we proceed and we're careful with respect to what we do that we will get through these difficult fiscal times. And I think by way of background, we're optimistic obviously that we will do that because we've had a history of being able to manage our budget in a very responsible way. That has been our practice, that has been our culture, and that's what we've been able to do. And I anticipate that that will continue to be the case. And we've got a number of reasons why that's the case. First of all, we've been very good about developing fiscal sustainability plans, which involves really forecasting and looking ahead at our budget and anticipating what might happen. And then creating strategies relative to addressing those. So for example, a few years ago when we did our forecast, we projected a deficit of a million dollars this year. But we took actions in the last several years to bring that down to where while we do have a deficit, it's not at the same level, it's more manageable. And we'll be working on that and anticipate that we'll obviously deal with it. And those strategies involve a number of different factors and we'll get into those a little bit more. But again, it's really looking at the whole picture. How do we, strategies around revenues, strategies around expenditures, strategies around operations and best practices, that sort of thing. And so over the years, we've had a history of doing that and it's reflected in our audited reports when you look at our audits. We always do very well. And also the overall really indication of it is our bond rating. We have the AA plus bond rating, which is the second highest bond rating that you can achieve, which is not insignificant and that has tremendous value to our community, to our ability to finance and to move forward. So it clearly is the case that we have good fiscal practices. And we are in better shape than many communities for a variety of reasons. We are fortunate to have a diverse tax base. We are fortunate to be able to have had sort of a culture and history of fiscal responsibility. So for all those reasons, we I think we're in better shape than many other communities.  Our overall budget is $262 million and that's everything. All of our operations, a good amount of that. $106 million is our general fund and that really is what is the focus of most of our conversations. And when we talk about deficits, we really talk about the general fund. And that's largely because with respect to the general fund, that is the one area where this council, and the way fiscal policies are with respect to the general fund, is that the council really doesn't have direct control over particularly the revenues related to that. With respect to the rest of our budget, which are enterprise funds, the council can set rates with respect to how to fund those. And because of that, you can do much more long term planning. And so with those, we really never have deficits because we have much more control to do that. If that was the case in the general fund, we wouldn't probably be in the position we are now. However, in the general fund, we have to rely on the economy.  So deficits are something that we have to manage in a completely different way, much more difficult to do. And so that requires all the work that we've been doing that we'll go over with you today. But that's where, when we're talking about the deficit, the $3 million deficit that we're facing, it's in our general fund, which is $106 million operation. And as you know, that funds largely public safety, our parks system, and some of the streets improvements. Our capital improvement budget is about $21 million. And I think the big issue here is that it is largely or entirely from our enterprise funds. Because that's the other thing that we're challenged with respect to our general fund is that because we're trying to manage these deficits, it's very hard to set aside money for capital relative to the general fund. And so in the proposed budget, there really is zero money in the general fund improvement budget. And as Marcus has mentioned many times, it's just really not a sustainable practice. We need to try to address that and build sources of funding for capital improvements. Because we'll need to make investments, otherwise we'll have multiple facilities that will fall apart over time. As I noted, while we are forecasting deficits, we believe they're manageable and with our continued fiscal strategies. And the one thing I should note that we had come in this year anticipating a deficit of about $1.6 million. We had hoped that we could present a budget to you that was balanced. However, the deficit did grow at a faster rate than we anticipated. And so we do have an increased deficit. We'll go over exactly why that happened. And that we'll be presented to you some of the options with respect to reducing that. And then we'll hear from the council and we'll be back to you with completing the whole deficit reduction process. In general, and Marcus will go over the specifics, but really it's because we continue to see some revenue decline in terms of just our tax base being eroded and some of our revenue sources. And we've just seen expenditure increases. Again, these are not necessarily unusual. Many entities are facing these increases, particularly as it relates to some of the employee costs. To be able to keep up with the PERS cost as well as, again, we do have a need to try to recruit and maintain our employees in our city. And so nonetheless, it does require some reductions. I think where our goal is to do those that are at the scale and the type that do not directly impact negatively our services. So that's our goal and we'll go with those in a few minutes. So the deficit we projected at this point is about 3.1 to 3.2 million. As I mentioned, we've developed some strategies to address that and we'll go over those in a second. And we'll have to bring back additional strategies and reductions based on the remaining and so what else the city council would like to see in the budget. And so we'll put all that together and come back to you with closing that gap. And finally, I just want to just take a little bit of time to just really thank everyone involved in the city, particularly to that really is what makes a difference in terms of the work that we do. And as you've seen in the presentations that we've had, the city has remarkable achievements and we do a lot every single day. Most doesn't get a lot of attention, it's really the crisis issues, the difficult issues that get the most attention. But there really are so many incredible things that are done in our community every day. And we're a leader in so many ways compared to so many communities. I'm sure you hear the same things when I ever go to conferences or other places. People look to Santa Cruz to ideas, to examples, I'm constantly being asked about how do you do this? And we always have really great examples. So when people are talking about, here's the latest things that we're doing, we've already are doing and we're already talking about them. So we are really a leader overall and it's easy to forget that. But it's accomplished because we have excellent employees who go above and beyond to do incredible work. They really are committed to the city, they're very loyal to the city, and they work really hard. So they need to be acknowledged. This budget document and the budget process is incredibly complex, takes a lot of time, a big effort. And we have an excellent finance team, so I want to thank them for the incredible work that they've done to put this together before you and the work that will continue. We have an excellent executive team as well, really a team that works holistically to address issues, to go beyond the department lines. I want to thank the city council. Councils have traditionally been very supportive of forwarding their priorities and concerns, but also balancing the various consistencies, balancing the various needs in a way that's responsible. And finally, we have an incredibly involved and dedicated community, lots of ideas, never a shortage. And that keeps us really pressing forward and moving ahead with many, many issues. It'll be a challenge sometimes, but by and large, we'd rather have some community that's engaged than one that doesn't care. So with that, I'll turn it over to Marcus and he'll go over more of the details. Good morning. My haste to get going yesterday morning with our 10 a.m. department finance department presentation. We're about to introduce you to the two other people who are sitting next to me and I know they self-introduced themselves, but that was bad form. So I wanted to start with Marcus Pimentel, your finance director, with us today, Cheryl Fye for assistant finance director. She's been with the city longer than I have, but not much. She's a dynamic, valuable resource to me and our entire department and to you. You don't see her a lot because she's behind the scenes making sure that when I'm not there, things are going really well. And I'm not there much, we're always in meetings and doing other things. She's really been the key to the success of a lot of things in finding us. Tracy Cole, she's our principal management analyst. She's just finishing almost her one year anniversary being in a new budget role. She was a former accountant with us. We stole her from down south. She's still a Dodger fan. We're working on that. But she's been a value add to us and to our team. We've had some, we've been challenged with a lot of workload this year. This is not one of those presentations. I'm really proud of what we've been able to achieve largely because of Cheryl and Tracy. They've been dynamic responsive late nights, weekends, doing a lot of extra work above and beyond. They're full-time day jobs as they also have families that they take care of too. So I'm just really appreciative of them and I just wanted to introduce you to who they are and a little bit about them. As Senator Martín Bernal mentioned, we have a tagline right up at the top. We've tracked a fiscal stability through unprecedented times. We've not value tested that statement. We haven't gone through focus groups, but that's kind of what we feel. We're really proud of this community, this organization, this board, this city council, current, present, and past. And we'll see what, expect those trends to continue in the future. That they've wanted us to be a fiscally responsible city because they get it, no money, no mission. Without smart finance planning, it's really hard to do your mission and what you're here to do. We are in unprecedented times. We've talked a lot about this in our mid-year presentations, prior to budget presentations, but the themes are still there. When we're seeing $12 million interest payments to the state for their lack of investments, that's $12 million of interest every year going out of this city to the state. There's interest on the debt because of their investment shortfalls. They haven't made their targets. That's a lot of resources leaving this community. I mean, we've surpassed the RDA scale or we're close to that. I mean, it's just that is an unprecedented idea, given that where you'll see a chart later. We're about ready to become the longest economic recovery period in the city's history. Yet, we're getting added on to these large, large, large payments. We've been shielding that burden for a while, but it's difficult. The economy is evolving as economies do. Consumers are evolving as consumers do. Some of us consumers are getting a little bit older and our spending habits are changing. Healthcare is becoming a more bigger piece of what we're doing. So just consumer behavior, how we're evolving, streaming videos, things that used to be taxable and non-taxable. All those things we've been talking about are unprecedented because it's all happening right now, they're all layered on, baby boomers, they don't have a lot of kids behind them, workforces, issues. Anyways, so we've talked a lot about that. That's the nature of us. We've been proactively thinking forward about how we navigate this and how we get to 23, how we get to 25, how do we get to 2031 through really difficult decisions. And it's putting a lot of strain and pressure on you guys, and we apologize. We wish we had an easier path. We wish we were telling greater stories, but this is the story we're dealt with and we're going to work together to resolve it. I just want to just remind you that this is hard work and I'm sorry about that. We wish it were different, but we're proud of the work that's been done. And Martín mentioned something that's really important to just think about. We forecasted a $1.6 million deficit for the year coming up. It's grown to $3.2 million. Your first reaction might be, wow, that's tough. And it is, we're finance people and we're nervous about that. A couple years ago, this deficit was $11 million and two years ago it was $8 million. The 2020 has been a big year for us. It's been that milestone year, like if we could figure out how to solve that, things aren't easy, but we'll be better positioned. So we do a lot of work in 2014, 15, 16, 17, 18, and 19 those fiscal years. A lot of work looking to 2020, making good decisions back then for next year. We've reduced that gap already by a lot, where most communities might have just said, well, let's just see what happens. So I'm really proud of this council, I'm really proud of staff that we've been able to take that effort. And now we have a still gap, it's much more reasonable to think about. We're not in a place where we're closing centers, we're not doing that. So I just want to acknowledge all the work that's been done. Martín, his team, a lot of people behind finance who you never see, and a lot of people in this organization, your department heads, the people that are starting to fill in in the right corner because they don't want to be on TV. There's a lot of amazing people in the city, and they've all been collectively joining in to how to solve this. So I just want to acknowledge this is not just a few people, it's a collective whole. We've had 90 managers that put time out of their busy schedules last year and are doing it again this year to help us solve problems. So a little bit more of an intro than I wanted, but I just thought, this is a big day. We've allocated most of this day for you and the public, we're hoping expecting to be done around 11. That being said, we've got 27 slides, it's not I, it's we. That's less than we've ever had before for a $260 million budget because we really wanted to prioritize your time and community's time. Our goal for today is to really focus on the gap that we have and talk about how we can start solving that $3.2 million challenge. So that by June 11th, we're adopting a balanced budget. And we have about $2.4 million identified what we think are reasonable, we've recommended some touch points in there that we'll have to come back to you discuss a little bit more, but we're getting closer to that number. So I want to let you know we're making progress, we're getting closer. And I wish we could have been having this conversation one on one or in documents a week ago, and I apologize about that. But it's been really challenging to get all this together. So that being said, we're going to get started five minutes later. So as Martin mentioned, if you think about our budget, we have a $262 million budget. And it's not to downplay a $3.2 million deficit, but it's to also acknowledge, we have $156 million in that blue pie chart that's doing really well, our enterprise funds, a lot of our special revenue funds. We have a lot of operations that are planned for the future. Well funded capitals there, resources are there, staffing are there, programs are there, services are there, and they're robust and they're strong. And we're providing above and beyond, we're going beyond our city boundaries. So most of our, over half of our budget is doing really, really well. The general fund portion, $106 million, $103 million is funded. Maybe not doing so well because we're not funding capital, maybe not doing so well because we all recognize there's more to be done. But there is $103 million that is funded. So when you get down to it, we have a sliver of $3.2 million that we're going to spend most of our day on today. And I apologize about that, I'd rather be talking about the bigger pie. But we really need to emphasize how we can solve this and start getting your feedback what resonates with you. So we can start moving forward and bring back more information. Maybe it's May 14th, maybe it's May 28th, so we're leading up to a June 11th adoption. So that's our goal today is to focus on that sliver that will take a lot of our time. And I recognize that. Different from me standing with a clicker, I think I like it. Jumped into our head a decade of deficits. I'm not sure I like that term, but 2015 through 2024 we're forecasting. We've had and we're forecasting eight of those 10 years to be deficit years. We don't want that to be our future. We want to turn that around so where it's eight out of 10 are balanced or surplus years. Because we need to start building reserves so we can start making dynamic investments. So we want to turn that story around from a decade of deficits to a decade of surpluses or a decade of service deliveries. Equal to our community, but we've got some work to do. And so today is just like last year, which is the year before we've got work to do. And we keep doing the work and so I'm proud about that. We'll talk about a little bit later, our general fund reserves. So these are our themes. We're projecting deficits in the general fund. Again, the $156 million of the city is doing fine, their operations are balanced. Within the $100 million general fund, we've got some forecasted challenges. Part of it because of things we've talked a lot about revenue erosion with tax bases and backfilling the state on pensions and less money coming in. The state has lots of surpluses but we're not seeing, thankfully for homelessness and some housing programs, we can use more help. But if we forecast even our smaller deficits that we're looking at now, our reserves are gone in two years and that's a scary thing for a finance director to say and this isn't the sky is falling because we'll take action and we'll correct that. We're going to power through and blow through a lot of our reserves. And we don't have set aside funding for dealing with a larger scale environmental event, whether it's fires, river, levees, whatever it might be. We don't have in the general fund the type of resources that the general fund would need to respond, pay in advance, and then wait 15, 18, 20 months later for FEMA to come back and reimburse us. We're also not funding our capital improvement program. While we don't have a precise number anywhere from three to five million is a minimum, what we should be doing. We're seeing the pain threshold of our department present it with our CIP capital program every year, coming up with a $2 million, $4 million minimum need for funding. So we need to get back to a funding level where we're adding two to $5 million more into the budget to fund our capital and our infrastructures, our parks, our sidewalks, bike lanes, all those fun things. So we need to turn that deficit into surpluses so we can build up our reserves. We need stronger reserves so we can have more flexibility to invest when we want to. And we need to build up our CIP so we, fixing things when they're broken is a lot more expensive than maintaining and investing early on. So we need to break this habit. What our goal for today is really about the general fund.  We'll have most of the afternoon available for questions, comments about where you want to go. I realize we have a $20 million capital investment program. I realize we have 156 million of other operations, water fund, wastewater, refuse. Those are all areas that got great stories. You've heard the department presentation, there's a lot of information in there. Should you want to dive deeper into those spaces, we'll hear that. We'll record that and we'll come back on those conversations in subsequent meetings. But we really want today to be spending time to talk about the reductions and budget solutions. And getting that feedback on are we ready to go? And then we've got to do some more work to bridge our gap. So we'll start with just a recap of our budget document, just make sure we're recognizing it. And we've done a lot of work, so maybe it's just selfish. We just want to acknowledge some of the cool stuff in it. We will review the funds that are fiscally sound. We'll talk about very briefly our CIP investments. And then we'll spend most of the presentation, most of the comments today in the general fund. Now to solve it in getting council direction and public feedback. Basie. Hi, good morning. So we're just going to take a quick overview of the budget document. Some of the changes that we've made, made it a better, more visual appealing document in the next few slides. A lot of research went into reviewing what other cities are producing. And we realized we really needed to kind of up our game on this document. We are going digital with it. It's online, our adopted will be online only, so we won't be printing any of those documents. Okay, so what you need to know and where to find it. So quick overview, the budget in brief, which is actually the budget dashboard section of the document that you have in front of you. It's meant to be just a quick look at the summary of the budget. We've got the city manager's message in there, soon to come the finance director's overview. Also in there is the personnel narrative that talks about the ads and that went into this year's budget. Back at the back of the section, you'll see the breakdown of the personnel in the index section. Then also in the budget dashboard, you'll see the debt and pension liability that the city has. The workload indicators, this was a direct request from the budget focus group that we met with last May of May of 2018. Every department worked very hard to get these workload indicators into the document. The department's got to choose three to five indicators of their choice. And this is kind of a test year, this is the first year we've done this. So we'll reach out to the council and the community to find out if they like these workload indicators. We've got some examples here that you can read. Next year and in the years to come, these will be driven by the strategic plan of the city council. And we'll hopefully get to move more to a performance measurement type of indicator as well. Okay, I think you're familiar with this one, but I thought I'd give you a quick overview. And if you have questions, you can ask about it, dive a little deeper into it. But the budgets, this is an example of the department's summary of the finance department. You'll see that there's three years of data, that's the prior year, the current year, and the proposed, the request for the next budget year. You'll see in the current year, we have the adopted budget and we have the amended budget. The amended budget is any type of budget adjustments that might come through the council during the year. So those are put into there. They also include any carry forwards of purchase orders that didn't lapse and were ongoing that probably will in that the current year, but crossed over years. And then the request is what we're proposing that's the proposed budget. The first section is the expenditures by character. And the character means it's the major expenditure categories and a slight little summary of it. And it's broken down by personnel services, services supplies and other charges. And then the capital outlay, capital outlay are usually something that's going to turn into an asset. The next section is broken down by activity or program. And it's the specific purposes of the department. So like in parks, they might have sports and they might have senior programs. And so they're identified by an activity at name and number and we list those in the summary and you'll see the expenditure first. We also isolate the general fund so you can see what the impact is to the general fund, the cost. And then other funds follow that. And then there's a total at the bottom in that section. The fourth section is resources by fund. And anything that is supporting this directly, like if there's fees for an activity in parks or something, that would be listed here. You wouldn't have general revenues in here, but anything specific to the department that or the activity is included in that. And then your last line, well, second to the last line, is the net general fund cost. So you can see anything that, it's the difference between the activity revenue that's brought in and the expenditure. And so you see what the impact is to our discretionary or general revenue, mainly taxes. So in the very last line is the authorized personnel for that department for the three years. The next one is the CIP document. That previous slide that you saw does not include the CIP, even in the enterprise funds. The CIP document is outside of the operational budget, which we just went over. The first one, the first column is the prior year. Projects are non-lapsing, which means they go across several years. Usually it takes several years to get a project done. So you'll see the project number, the description, the name, and then prior year costs. That includes, that could go back five years, but you'll see that total there. And then you'll see the current budget, which is the current appropriation and then an estimate actual. The estimated would usually be the whole budget, because we know that it's going, if we haven't done the work that year, we're going to carry over the appropriations to the next year. And they will be added to the next year, the first year where you see 2021. That would be the budget that we're, the 2020, that would be the budget that we're going to adopt. The following years in this are for information, but we don't adopt that portion. We only adopt the first new year. And that, I just wanted to add that the estimate actual that you see there, anything not spent will be added to that new year. So, so new this year, we added this community profile. It's a way to highlight our community, and feedback is absolutely welcome on this. It's the first year that we've introduced this, so it's kind of going to be kind of a work in progress for the next few years. We raised this loosely on, I'm going to admit it, we stole it from Berkeley. We saw it, it looked great, and we're like, okay, well, we're going to steal this. And I think it's a great graphic tool that we can definitely add to in the future. Here's some more ring ledgers here, but you'll see that we have the personnel profile, which is in the first part of your budget book. And then this listing of positions by department and listing of the position titles is in the back of your book. So the two go together, but we thought we'd put the ledger in the back of the book. So in case you need to refer to it, you would. But the first part is just a narrative of the changes to positions in the city. So you'll notice that we have no new general fund cost increases. We might have changed positions around, but or we might have revised the type of position if they're usually they're vacant or we say. Or someone is retired and so we think there's another position that might be better. But we make sure in the general fund that there's no cost increase going forward. The following is, we did have increases in the water department and the enterprise funds. Next section is the debt. And you can see it has the two years for history. It's like you can see the city wide debt before pensions.  And just as a little, I don't know, I think you know this already. But when we went into the public safety pool for retirement, there was a side fund that we had to pay off, because we weren't funded as high as the other agencies in the pool. And in 2010, I believe, we took out pension obligations bonds because we saved the interest. CalPERS was charging us more than what we were able to get with pension obligation bonds. So you're looking at the pension obligation bonds in the next one. We're looking at our pension debt. And we had that to that, the city wide unfunded portion, which is what CalPERS tells us with their actuarial reports that this is what we have a liability for in the future. They're projecting, they use how, what the cost is going to be for our retirement for our employees. And when we have that, when you see that becomes a really large number. What I want to say about the pension obligation bonds is they'll be paid off in a couple of years. The difference is in the beginning where we're paying an annual debt service payment of approximately a billion dollars increase. But these next two years are around $3 million, so it's a heavier hit, but then they'll be finished. And just to recap, there's some data in there. We're not adding any positions to the general fund. We're not increasing positions in the general fund. There's 11 added to our entire city workforce, and really five of them are the library system that's not technically the city's oversight. The library systems employees are embedded in the city, there's five new ads. And we take those out, and we've got four ads in water and two in public work. So for an entire organization, we're adding, proposing six new positions on the enterprise funds. Now we'll just recap the healthy, great stories that are in our other funds. So our water fund, resource recovery fund, waste water fund, our wharf housing community development. A lot of our funds are doing well. They have robust budgets, water is a $46 million budget. Many of our enterprise funds are in the $20 million range. Outside of stormwater, most of those funds, we look forward and we feel like they have the ability to manage themselves. We have a couple of one-offs, like the low-emod housing fund, that's Granton. That one's a very unique fund that we call the representations by economic development. There's a lot of nuance within that fund, but our enterprise funds are doing really well. The wharf has long-term needs, certainly, like most of our capital investments. The wharf ERR plan, there's a lot of big goals for reinvesting in the wharf. So I'm not saying that the wharf doesn't have, they have long-term ambitions and opportunities there. But right now in this budget, the wharf has most of the resources they need, not all of it, but most. They still require some help from the general fund and, unfortunately, we're not able to give them the help they need. There are some of the reductions you'll see today or the impacts of us reducing the general fund could impact some wharf maintenance. We're trying to mitigate that to a certain extent possible. By and large, these are the funds that we're not going to dive deep in today. If we want to spend more time into their budget, we're always happy to. You know me if we want to talk budget anytime, any place, let's go. But we really want to focus the priority today on the reductions because you're seeing those for the first time. So if there's an interest to dive deeper into their operations, we're happy to bring that back. You've seen this graphic, I don't need to repeat it. What I mean by that is we have May 14th, May 28th, two scheduled council meetings where while May 14th agenda is being finalized now, we can squeeze in some conversation about the budget. May 28th, we do have allocated time to come back to you about the budget. We expect to have a more revised, have the final plan on how we're going to balance the year's budget on May 28th. And should there be more information or more discussion that you want to have, we would come back on the 28th for sure with the budget conversation. And in June 11th, there'll be more budget conversation with the goal of adopting the balanced budget on June 11th. In the CIP program, kind of a similar story. We have funding in place coming from a lot of our enterprise funds largely, some grants. Water has zero million, I forgot to take out the word million. It's one of the first years I've been here, they have no new money coming into the CIP program this year. And that's not an oversight. They have a lot of big projects already on the books. Their resources in bandwidth is focusing on the projects that they've already committed and working towards. So they've already got by and large the bulk of the funding they need in place. So this is a new year where there's not 10 million, 20 million, 30 million dollars of new water projects come in board. I believe there's one small investment that they're doing, but by and large the water fund is working on the projects that are already in place. You can see the allocation of some of our other types of projects. Cinec Trail is about 9.9 million. That's the Monterey Bay Cinec Trail, I think phase seven, I forget which phase we're on. We have a solar PV project that we're working towards, $400,000, it's in the CIP library. Well, I just said briefly about the library positions, or not the city's positions. We have two primary branches that have investment coming into this year's CIP program, Garfield and Branson 40. These are city projects, city branches, that there is library funding coming to the city to invest in those projects. We have $4.2 million coming to invest in Garfield and Branson 40. So the projects by department or projects listed here, the numbers represent new capital projects. The money may be sitting there already in reserves or it may be coming in new. But these are new big capital projects in this project. Yes, this is the new additions in 2020 for the capital improvement program. So this is a summary of the types of projects you'll see. We've spent some time doing a debrief on the CIP program overall in the mid-year. You've heard the presentations by departments that touched on many of these projects. Again, we're happy to go deeper into these, happy to. But we really want to focus today on the reductions to balance the budget. Just a different way of looking at it by type. And this is finance tractor lens, so I was trying to distinguish new project, meaning not new money, but something we're investing that we haven't done before versus investing in something that's rehabbing, working on an existing project. So I'm sure some of the departments are going to come back to me and say, well, what's your definition anew? This was late last night, just thinking of how to break down the numbers at some different way. So I just want to give you a glimpse. The yellow bars represent the water department. They have a $2.5 million that's coming in. It's largely invested in the current system versus transportation. We have a lot of new projects, expansion of like the Marty Bay Scenic Trail. That's a large project coming in that we're developing and building. So that's in order of magnitude of the CIP program by types. And that concludes our conversation about the CIP. That's unusual for this hearing. Like I said, we have more important things that we wanted to get to and create the space and time for it. We're getting a lot faster than I thought. We are available for questions, so I forgot the logistics. Happy to stop and spend some time on questions. There's also a format that has worked in the past before. We've got this afternoon allocated for a council discussion deliberation. Did you have something that comes to your mind any time during this presentation or any time during this morning or later in the afternoon that you want to have added to the discussion list? Let us know. We'll track that and we'll create a live tracking list of all the different discussion items. We want to talk about planting trees. Let's go, let's do it. But whatever that topic is, just let us know we're not requesting that you do a motion. Your body can decide how you want to do that in the past. It's worked well to just put up the ideas as they come to you. And we can discuss them collectively in the afternoon. That's a recommendation that's worked well in the past, so I forgot to open with that, my apologies. Thank you, Marcus. We'll go ahead and maybe take a moment to pause and see if there are any questions from council members at this time in regards to the presentation so far. Council member Cronk? Thank you, Marcus. What is the new project library 4.3 and the refuse on the CIP by type? Page eight of the handout. The Garfield and Brantz of Forty branches have $4.2 million coming into them. I believe Garfield's got $3 million and Brantz of Forty 1.2 are my, actually, I think I'm reversed. Brantz of Forty's, I think it's the larger one. Those are the, again, money coming from the measure asked from a couple years ago. Voters approved measure, different measure asked to fund the county library system. So there's capital money coming to us to build out those branches. Are you taking input, oh, go ahead, sorry. No, no. Are you taking input on the list that you just mentioned? Right now? Let me, in what way? I have three things. Gasoline purchases, pick up trucks, and what you just said, street trees. Are there questions, council member Cronk? I think I could just say, council member Cronk said pick up trucks. I would just expand that to vehicle purchases and leases. Marcus, I just have a quick question, or maybe just, I didn't catch it. But you mentioned wharf maintenance and how that impacts or where that fits within the general fund, would you mind explaining that a little bit further? Yeah, the wharf is a component of the general fund. We have it set aside as fund 104, but technically if a fund starts with the one, it's part of the general fund. But the wharf is a 104 fund because there's some special grants and titans and some other things that we really need to report and we're required to report distinctly different. They require, they always require general fund support and general fund subsidies, wrong word subsidy. But there's a general fund investment always in the wharf within this list that we'll get to in a few minutes. One of the proposals is to make a moderate reduction in some of our wharf maintenance. Parks and Rec, when they're looking at how might they reduce their budget operating costs? One of them is to think about reducing some of their wharf maintenance. I don't think it's the top of their list, but it's one of the things that we need to unpack a little bit more with the departments. And then come back to you May 28th with a more thought, not thoughtful, but more detail on what the impacts of these would be. Thank you. Councilor Myers. I just want to make sure I'm understanding our debt. So on the slide that says debt and positions on it, debt and positions. I believe it's slide, upper right corner has a number in there. There it is, number 11. So the 218 million pension, that's the obligation that we have financed through the bonds that we are now. Could you just explain a little bit about just, so I'm tracking and the public can track on sort of this obligation, yeah. As I've talked in the past and recently with a few of you, it's a deep dive conversation to get into the pensions, the state system, the difference between the cost of the pension. And now the new layer of two thirds of this new cost is attributed to paying back the state for investment shortfalls. Right. So by order of magnitude, Santa Cruz Local's a new podcast and not, they didn't pay me to say this, but it's a pretty good podcast, Karen, Karen, excuse me. My good, good, excuse me. Anyways, she's right behind you. Yeah. Hey, this is now embarrassing. We were having a conversation yesterday and she asked a really great question, what was the origins of our unfunded liability? What was it in the mid-2000s and I wasn't here in the 2000s, I recall where I was. It was a small insignificant amount and they just fluctuated year to year based on cow pervers adjusting their annual numbers. Going back to 2004, just looked last night at $6 million. So we had a $6 million liability in our miscellaneous benefits to the system. We were nearly 92% funded. That feels like a lot back then. I probably remember seeing numbers like that going, wow, $6 million, holy cow. Yeah. It's $100 million now, $107 million. 17,000% has grown since 2004. There's been no benefit change. Is that a percent? 17,000% now, because that's what the math said. Yeah, I never heard that before. It's beyond belief. I mean, the numbers we're talking about when we talk about $107 million just for miscellaneous benefits, which are pretty comparable to a lot of private sector stuff. That's a wild number to think about and it leads where the conversations have gone, where the newspaper has gone, where a lot of the conversations have gone. Wow, the systems bankrupt, the benefits are bloated. Actually, the miscellaneous benefits are not, and it's not the cost of the benefit. It's this new layer that's coming on board to pay back the state for their A investment losses in the 2000s. And since then, they haven't been achieving the results that the market has and they haven't been achieving the results at the level that they've done in the past. So we've seen that unfund liability grow only because of the shortfall in investments, not because the benefits gotten bigger because it hasn't, the benefits stayed the same. In fact, we've reduced our benefits, Santa Cruz adopted a second tier, Santa Cruz has lowered its benefits. We've had employees paying more, so we've done a lot of work ourselves to lower the benefit cost. So that's what I mean, it's a very complicated subject. Well, that's why I asked the question, because I do think that it's an important thing for the community to understand. Is that the debt obligation, I mean, anyone that, when you learned how to do your checkbook, you learned that if you wrote a check and you only had, I mean, this goes back to just proper. And it speaks more largely to the financial security, not only of the city, but of our community as well, because of so many services we provide. And so I think it's just a very important thing to really have. I mean, it's worth having the extra five or ten minutes, just because that obligation is clearly, it's in a sense unprecedented. And so that is an important piece for people to understand. And it speaks even more importantly to the need to be fiscally smart and conservative to get us through this obligation that hopefully we will never, as an individual city or for all the cities in California to be burdened with again. So I just think it's an important hiccup in the history of cities in California because it is across the entire state. And it does demonstrate that we, I believe, thanks to all your guys' work, we're really being forecasted into the future in a really smart way so that we do not end up where a lot of cities will be in a few years. So thank you, I just wanted to dig a little deeper. Thanks. Excellent question. Three points, I'll take the question. Thanks, Marcus. I have a question. Councilor McCormick. So did you, Mr. Reiter, those $107 million are just paying for benefits? No, no, the bulk of the $107 million is to pay, the state is a loose word, but the state manages the investment for the pension system. The state, the investments for the state for the pension system have been underperforming compared to what they could be doing. We've seen the slides, we did some decent modeling that if the state had just followed what a basket of index funds, normal average index funds have done, they'd be super funded right now. Instead of being billions and billions in the hole, they'd be super funded right now. And we wouldn't have seen these layers of cost increase. And the city would have $12 million more right now to manage and invest in our community. But because they haven't made those, they haven't followed the market or followed what they've done in the past. Their investment shortfalls are being funded by us and every member agency across the state. So it's, we're backfilling the state pension system because of the investment shortfalls. We've got over explained it. You have a notion of how that happened just in terms of just people just giving generous benefits? I think it's policies decisions by investment advisors that have said, boy, we really took a bath, we really were annihilated. The state hires a lot of multi-million dollar companies to manage their investments, it's not just staff. And they all missed it, like most in the 2000 Great Recession, they missed it, they were annihilated. So I think it's natural reaction to be, well, let's never miss that again. Let's get ultra conservative and let's not take risks and let's not seek yield. Let's get ultra conservative so we're always green, or green meaning positive, not green meaning environmental. So I think they made policy decisions to become more conservative. At the time when the economy is doing better, that's the wrong time to become more conservative, is in the beginning of a 10 year growth period. They also have made, and we can all have opinions on the why, but they've also made a lot of political policy decisions on, let's not invest here because we don't want to invest in those type of industries. I'm not saying that's good or bad, but those two kind of pathways have led to a more conservative investment or profile, and then less diversity in their investments. So their investment decisions being made within the state pension system have led to less returns and where the plug.  And they come back with a credit card bill of $10,000. You're the plug, we're that plug, the state investment didn't. I'm not sure that's a great analogy, I don't know why I went there. It's a complicated topic, but the state missed their targets and whenever they miss it, they make us pay for it. And then they charge a seven and a quarter interest on that. So it's a, like I said, it's a deep dive. I could have two other people standing beside me and go a lot deeper into this, but my bottom line is the miscellaneous benefit is not driving the cost of this. It's investment shortfalls. Councilmember Brown? I don't want to go too far down this road today given that there's not much we can do about it here at the moment. But I've been really following this and trying to understand since I came on to the council. And so based on what you said today, I just want to make sure I'm getting this right. So after the CalPERS system took a bath on those investments and then became conservative, there was already that loss. So then we weren't, they didn't make any of it up in addition to being very conservative, is that right? So they're like, they were starting from a deficit position and then got conservative. Okay, thanks. So we all recognize that the system will take a hit. We're going to have to, we're partners of that. What we didn't recognize is that they wouldn't hit their benchmarks. I mean, typically CalPERS has done 11, 15, 18% returns in good times. We've had a 10-year run of good times and they're not doing that. There's years in this time period, 0.6%, 0.6%, less than 1% returns in these good times. There's a 2%, there's a 1%. There's numbers like that in this 10-year run that's like, wow. So when they're not hitting 8 and they're hitting 0.6, that's an immediate increase in our rates. That is where the backfill. Thank you for the clarification, Marcus. I think I'll just add that I think there's a lot of work happening within the league of cities and really looking at how do we advocate as cities who are now stuck in this position. So you'll keep us informed if there's more that we can do in that regard. Please continue. Any question about the municipal wharf? Do you want to put that on your list or should I just ask you maybe there's an easy answer for it? It appears in several different places, but one place, it's 104, which is 180,000, and then it appears in Parks and Rec for 2.3 million. What is that? That's the annual cost for the wharf? Yeah, just maintaining the wharf through Parks and Rec, 2.3 million. With personnel, it's our most challenging asset with wind, water, and erosion and other things. So there's a lot of maintenance that goes on that we never see beneath the wharf. So it's a very intensive system to maintain and keep open to the public. And what's 104, the fund? That's the fund number. That's just an internal designation. That's 180,000, what does that mean? I'd have to look at it. That might be their net number. There was a settlement for the- There's a resource coming in. It was an insurance settlement for repairs that's for. And that's where that money comes from? It was an insurance settlement, yes. So it's there until the cost of the repairs, they haven't finished them yet, so. Thank you. So a year ago, we were projecting this year to have a $1.6 million deficit. And why we're at three now, I just want to unpack that a little bit, where labor negotiations are like any negotiation. We projected what it could be, and we're choosing to invest more. We're losing staff. We need to attract, retain, and develop, so we recognize that. So our labor costs are trending higher than we projected. So that's a big change from where our forecast was. I'm not regretting saying council and committee support, but some of it is. I'm not necessarily saying you guys, but we've all collectively recognized things like the housing task force. And there's other initiatives with updating strategic, developing a strategic plan. There's things we need to do, health in all policies, things we need to do that have numbers of 20,000 to 250,000. Collectively, when we pile them together, this is about $400,000 of additional investments that are coming into the budget. So that's pushed or numbered up. The 901 Center, we're part of a pool that jointly manages the 901 Center. It's collectively run. We don't have our own center. We rely on a shared resource system. It's very cost effective. They have an outdated records management system that your police department can talk to you all the time about. We want data. They want data, but the 901 system is just like our Eden thing yesterday. We were talking about 20 year Eden, our city's financial system. Their system needs an upgrade. They're doing that. So they're getting closer to selecting a vendor. They're getting closer to finalizing the price. That number is bigger than what we had allocated in, but this is a good investment. Going through the list of what has changed, we've always have liability claims. This past year, we've had a couple bigger ones than expected that we haven't got to the place that this is the number. But they look like they're going to be bigger than we expected. So that's pushing our budget up a little bit. And there's just generally a lot of other support things that are popping in, even things like the census for next year, 2020, every 10 years is a census. And so we want to have small investment to help make sure that goes. So we've got collectively almost doubled our deficit from 1.6 to 3.2 million. Those are some of the bigger ticket items of how we got there. The question, Kara asked yesterday and I haven't got back to her. What are we seeing on cost increases from our shelter from the Ross camp? And to date, we're not seeing significant increases. There's a lot of chatter about that. Most of our time is staff time out there. We do have some direct costs and we're still collecting and paying invoices and working on getting that information to you. But this deficit is not largely driven by those numbers. The city manager's office had smartly included some allocations of budget capacity for those types of programs in their budget. So we believe we've got, we fairly represent, we believe the budget that we plan for will be enough to cover our direct additional costs. But it is staff intensive, there are a lot of city staff involved for sure. And then we want to just touch on where we've been, we'll get there again. This 2020, because like I said in the beginning, was a big year for us a couple years ago. We looked at 2020 and said, wow, that's a big, that's when our gap gets really large. How are we going to tackle that? And I'm proud that it got down to 1.6 million and I'm still nervous, 3.2 million. We'll get there, but it makes me a little bit nervous. But more recently, we've, in April and May, you've heard department presentations priming you for what's coming. We have the opportunity to schedule special study sessions, should we want to dive deeper. We've got today's May 8th hearing, May 14th, May 28th, June 11th, the next three council dates. May 28th and June 11th, we've already got an allocation for budget. So I'm repeating things I've said before, that if you feel like you want to dive deeper on things and we're running out of time today, today's the beginning, not the end, so we'll have more opportunity to go deeper. Things I've said before, how we prepared for today, really we have a fiscal sustainability plan, a fiscal 2023 that we've identified a lot of things starting around 2015 of how we can start dealing with 21, 22 and 23. Last year we had a very award winning action lab process that generated 67 different initiatives and ideas to think about, look deeper on. We've researched about 19 of them, there's nine actively in play right now that the committees are doing amazing work and I was part of some presentations that we're doing and I can't wait to bring you their stuff, but it's getting closer. So we've been working towards some other solutions. We had last year's budget ACOC committee, budget revenue committees, a lot of work went into place last year with a lot of you. We were seeing all your faces in different times and places on repeat different roles. So there was a lot of work last year on getting ready for the stuff. We have budget focus groups, one-on-one meetings. So we've been doing a lot of work prior to today, but recognizing that there's still more to come. A little bit about our fiscal 2023 sustainability plan, it's kind of a guideline document. We recognize that it's an evolving tool, to some respects it's a way for us to catalog the stuff we've been doing. And when we started looking at all the stuff we've been doing in the last three or four years, we weren't surprised by this number, but still felt really proud of $14 million of new general fund resources has come out of our fiscal 2023 sustainability plan already. So we're not for that plan, we'd have $14 million less of opportunities right now. So it's been a very well-designed, smart initiative that's included things like last year's measure of sales tax. We've re-engineered how we present budgets, we've re-engineered some of our starting points of budgets. We've updated cost allocation plans, updated fee studies. We've done a lot of work setting up retirement pension trusts. A lot of workers come out of that that's starting to pay big, big, big dividends, almost compounding dividends. You saved $200,000 three years ago and it grows to $600,000 by now. We've been making a lot of good effort and there's more work to come. So I just want to acknowledge that we've been acting smartly forward thinking for quite a while and more work to be done. This is all stuff you've seen before, so I'm going to go through it a little bit fast. We're getting closer to the longest, oh, I'm sorry. I do have a question on these last two here. You mentioned the action labs and you've been very proud of those. We just haven't heard details, which is not your fault. So do that offline, but have those ideas either already in progress or potentially save some significant amounts of money or just nibbling on the edges? No, there's some significant, there's some possible nibbling that could also be culture change or organizational change. But might not be big dollars now, but there is some big stuff we're talking about. One of the ideas, I don't want to dive too deep because I want to respect the group that we'll be likely presenting to you on it. But one of the ideas is re-looking at our impact fees and how we might redesign some of our impact fees. We need to find a funding source for, call it what it is, our fire engines do not have a funding source. And when they come due, we need to be ready to replace them and they come with a big price tag. So can we get a, re-engineer some impact fees so our parks and fire vehicles, can have stable, dependable funding sources. So that's an idea that's being researched thoroughly. We've got some ballot measure ideas that they're looking at. So there's some big initiatives, certainly in play. There's also some different things. Without going into detail here, but I think we'd probably all like to get an update on that. Because so far it's just been kind of theoretical. And I think many people have been saying, what about this, what about that, and you're already working on them. Yeah, so just again, it is probably worthy of a more deep dive conversation. But where we're at right now is they've finished a lot of their preliminary research. They're getting ready to present and go through a grilling of executive level department head testing of their assumptions. And then a lot of those ideas will be, we hope, presented by the group to you because this is also about succession development, teamwork, bringing people together. You have a timeline thought on that? We're envisioning this parallel. So May 28th, you might see a first review, May 28th or June 11th. One of those two meetings, we're moving towards those dates that have a few things start coming to you. Great. Thank you for the question. And then again, it's really impressive in the slide 18. 14 million in general fund budget solutions is impressive. And I'd personally just like more information on that too. I'll get together with you. That rectangular sheet that's shown there, I think Tracy, you showed that. Do we have that? Where? I believe they were handed out during the mid-year budget. Okay, we'll push that out to you. Yeah, we'll send it out. It was not at my fingertips. Great, thank you. Marcus, would you prefer that we wait until you've concluded this portion of the presentation and then ask questions or would you? We've done both ways. I think it's okay to ask questions. I mean, it's fine with me to ask questions while we're there on that slide. Okay, okay, Councilor Meyers. Just a quick question. Measure as sales tax, that's the measure that was passed 2016. Yes, 2018. Sorry, okay, so not the library tax. We're both called measure as, so okay. And what's our current tax rate right now off top of you? Nine and a quarter. Is it nine and a quarter? Is that, and that's the max, right? We're at the ceiling. Thank you. Funny how the most obvious questions I want to go, huh? A lot of receipt, right? So this slide is not a doom and gloom, but it's just recognizing next month in June will it be equal to the longest recovery period in our nation's history? Again, it doesn't mean that we can't go longer and because we had a second worst recession ever, we're not surprised it's going longer. But things do come to an end and good times do come to an end. Recessions do happen typically about every five or six years. So we're well beyond the time frame when a recession would have already happened. So we've had a good run. For us, it's not felt like a good run because of irreven erosion, backfilling the state pension system. We're not seeing those good times that the private sector is or down down or the boardwalk are. But we do recognize that the economy is doing well. We hope and hope that it gets bigger and does more, but we're not optimistic about that. We think at some point in time, it's got to stop. What this means for our forecast is we're a little bullish in a downtime, meaning we don't expect a 5% loss in revenue in a downtime. We think property values will stay okay, sales tax will go down a little bit. The boardwalk tends to do really good in downtimes. So we have a diversified economy, we can talk a lot more about that at another point in time. So what it means for us if our projection comes true and next year we start to hit the recession, it means a moderate change in our economic outlook. If the economy stays humming, the downside is if we projected a 2% growth rate and we get 3, then that delta isn't that big. If we thought we were going to drop 5 and we got 3, then you got an 8% swing, then you're doing, wow, this is much better than we thought. So I just want to alert you that it would be great news for this recession to not come. But it also doesn't alter our forecast a whole lot if it stays good for a couple of years. It'll get slightly better, but we're not expecting a big drop for us. Maybe that's too complicated, but talked a little bit about this. The CalPERS had just done things that they've done in the past or followed the market 65 billion, billion, billion more right now they'd have than they need. They'd be a surplus position instead of 144 billion behind. So that's just a reflection of if only, what if, what if they had followed market returns? What if they'd followed average returns that they've done in the past during good times? So this is stuff we've talked about before. Again, recognizing that these are very deep dives. Our tax bases, sales tax, I'm rolling. And I forgot all about facing Cheryl, who we had a strategy on. I'm not throwing anything at me, just dawned on me. I'm doing all the talking. Okay, this is more about, this is three items in our general revenue. We talked about the general revenue before where if you see the net general fund cost. This is where the support comes from. And where these were set up before to be able to bring in adequate revenues to support that. The change in the way that citizens are, the way we're spending is changing and it's changing for everybody. But the taxable items are goods and goods. Services aren't taxed and like the baby boomers are spending more on services. Even other age groups are spending more on services instead of goods. So we're not seeing that revenue, something that the baby boomers would be spending on is healthcare. There's no sales tax on that. The gas tax, we've got the fuel efficient cars. And so we're not bringing in enough in that respect too because they're not buying gasoline. And then just the difference in the way that our entertainment is or landlines are vanishing, so we're not bringing in the franchise and utility tax on that. So what ends up happening is, as our tax basis is rosing, as we're making more to backfill the state for pension investment shortfalls and other things happening. When we look at our general fund primary reserves, 11.5 million feels great right now. It starts shrinking and if we don't solve the 3.2 million deficit and we don't solve the out-year deficits by 2022, we're in the red and we're borrowing from somewhere to sustain operations or we're having to make big cuts. So this is not a great story, certainly, but we will act. And I'm confident that we'll have by June 11 some solutions in place. But this just gives a sense of what we're facing. Again, I'm thankful that we're in this community. We have a diversified tax base. We have a community that's thoughtful, responsive, engaged. So we like to think we can collectively come together with a lot of great solutions. But we don't have a lot of time to wait. We're not in a position, because we're forecasting multi-year deficits, we're not in a position to say, let's see what happens next year. And I'm not saying most do, but some agencies get so busy they forget to plan ahead. So. Council Member Brown? Quick question. So forecasting deficits, does that include forecasting around additional revenue enhancements?  We're assuming some things, but like ballot measures, we don't typically assume those because of their nature. But that would be great. And I know we're thinking about ballot measures for sure. We could add that for afternoon discussion. Thanks. Council Member Matthews. And I'm just reading on this chart. Our goal is a 10% reserve. We've achieved that in our 100 million general fund for 2019. But we're already seeing a drop below our target for 2020. Am I reading that? Yeah, in fact, in 19, we're going to finish below where we should be because if you look at our 10% reserves plus public trust funds, plus economic development trust funds, we probably should have closer to 12 or 13 million at the minimum. And we're starting to eat into those. Big time then, like half. Yeah, so what it means is by somewhere early on in 2022, our public trust is empty, our economic development trust is empty, and our general fund reserves are gone. Again, we're going to act and we'll collectively get there, but that's what we're facing. It's just around the corner. Just the thought on this in the future then might be good to have the different colors in that bar. That's a good point. Of the components. And I emphasize as a finance director, I have to recommend that we should be thinking about other types of reserves we might want in place. It was rarely alarming last year's fires and the nature hearing fire chiefs and other people talk about the projection for future fires and to look at our community, we have a high risk there. And it would be smart to start building up some what if funding just in case we have a disaster at a bigger level than we've seen before. And we don't have that in place. It would be good to have, every year we have a capital project failure or something that comes along the line. It would be nice to have a place where we can touch to go to to grab some funding without dipping into reserves or minimum security reserves. That 10% is really there for like, oh my gosh, we've got a three year economic recovery recession coming. And we want to start pulling a little bit from there. That's really the model where you want your reserves to be is that last stop because you need to preserve things. Because you know something's coming that's going to be better. Right now, because we see a revenue erosion continuing without tax reform. And because we see we don't know how long this next recession will be. We're nervous about saying let's pull from reserves and hope that good times will be coming later. Because I think it's going to get worse, not better for governments. And so does the budget that you've presented us here assume a drop to a $7 million reserve or? Yes, until we fix this balance, until we offset our 3.2 million, yes, we will erode into. And if we can achieve that, we return to a healthier balance. And we need to also start thinking about, I know it's hard to think about plan surpluses. We should try to plan for some surpluses to build up. Right, build the reserves, yeah. Councilmember Byers. I guess I just want to follow up a little bit on the, I'm very supportive of the Disaster Contingency Fund. This could also very easily be called a climate resilience fund, frankly. Because that's really probably what we're looking at short of another earthquake and I would say we've already had ours. We need another one, but it's a really intriguing idea. I think the county of Sonoma is the lead on this sort of, this idea of resilience. And I know they just completed an extensive resilience report that I think would be worth looking at. It's something that I think we and our local city should really look at in partnership with the county eventually. But we won't ask for that money this year. But I think in terms of sort of state forecasting, this is going to be so incredibly important. I mean, it's absolutely shocking what has gone on in the last two summers. It's unbelievable. So I'm really pleased to see that you are thinking this way. And while reserves used to be proper fiscal policy, they actually could mean the difference between really if people can survive through some of these things. So this is just a different level and I just want to compliment you in thinking this way. And very much appreciate you guys bringing this forward. Don't want to be doom and gloom, but this is a really important thing for governments in California to be really thinking about. So thank you. Thank you for that name. That's a good one. I'm going to remind those in the audience if you do have a poster to please keep it down because it will block the people behind you from being able to see. Okay. Now we get to our budget solution. So staff have been working aggressively with department heads and their managers and identifying how we would bridge a gap. We've confidently got to about 2.4 million. So we're not done. We've had a list of other ideas, but we just need more time really understanding the impacts of them to be able to recommend a thoughtful recommendation to you about how we get from 2.4 to 3.2. So we recognize we're 800,000 short of our goal right now and we haven't talked about this afternoon and what might change. So there's more work that we have to do and we're doing it. We're doing it now. We're just not at that place where we can confidently recommend this versus that and explain why we're recommending that. But we do have $2.4 million identified and we'll spend some time again recognizing that you're seeing it in slide deck for the first time. Some of the stuff we're still fine tuning yesterday and conversations. So what you see here is resulting of an allocation by functional groups within the general fund. City council all the way down to public works in alphabetical order. You see the total amount of reductions that are coming out of those operations. I can pause here. I don't think I need to read the numbers to you, but if there's any questions just in how we got here. So we met with department heads. We asked them, what would you do? What can you do? They came up with a long list of ideas. We've had meetings about those individual ideas collectively. Is this probable? Is this realistic? Is this sustainable? So we've been through a lot of filtering of those ideas and these are the ones we feel confident that are sustainable, are smart. And by and large wouldn't alter the face and look of how the community is getting services now. There are some things that might, and we'll talk about those, but I'll just pause right here. If there are questions just about how we got here or about the numbers. Councilor McCormick? I would ask, what was the 24,000 city council? Well, I'll jump right into that if you don't mind. Okay, please then continue. Again, recognizing that that's a particular interesting one. We're not laughing at that. It's staff recommending to you what we think you should do, but we haven't got your input on what we think you should do. So we recognize there's a chicken and egg process, and this is that process where we'll discuss that. So starting with some of the bigger departments, we're going to start with first police and fire. We recognize that their operations are really compounded by a lot of service demands. They don't have the flexibility to alter their operations a whole lot. Even though they came forward with a lot of ideas, and let me tell you they did a lot of hard work, what they could do might do. And we're just not comfortable with some of those outcomes of not hiring, going slow in positions, eliminating certain positions. We're not comfortable, those are the right solutions. So that might be something we have to do further down the line. We recognize that, but we're hoping we don't have to get to those points.  Recognizing, again, we're not saying yesterday, what we want to get us daylight is the types of things we want to bring back May 28th and really firm up. But highlight what it is we're thinking about. So in our first responder fee, the fire department's been doing a lot of work over the last couple of years, looking at how they might become a more responsive department in the community. We thought about things of working with ambulance provider of contracts. But this is an outcome of those types of conversations. There are a lot of communities that, there's some communities that have a fee that when the fire department responds for a medical call, it's really a way to build the insurance if the person is insured. We get into that billing process. If you're picked up by an ambulance and you have insurance, then insurance is backfilling the cost of the ambulance. When we show up and we're first on scene, and we're treating and providing resources to, we're doing that at no cost to anybody. I mean, it's our dime. But the ambulance shows up and they're billable by the minute once they get there. So it's kind of replicating that model for us. So if we're first on scene and we're providing medical response or whatever it might be, that we can get into that billable space largely for insurance purposes. And I'm starting to defer to the fire department when we're ready to have this conversation. Today's not the day to say, yes, let's do that and let's go live next week. But it's to acknowledge this is one of the ideas that we come that came forward that seems worthy for consideration. So that's the first responder fee. Can I ask a question? Is that something that other jurisdictions do? Is it something or would it be something brand new? No, there are other jurisdictions that do that for sure. I wouldn't say everybody's doing that, but there are a lot of, yes. See the logic. Okay, thank you. In the police department, one of the ones we felt comfortable having the conversation. We've had these conversations before about first alarm. We contract with first alarm private security to supplement things we do and also just be eyes and ears out there in the community. Just by design, they're not able to do a lot of things that a police officer or even a ranger might. They're more eyes and walkie talkie calling in things, a little bit of interaction with issues. When we're looking at the police department, it feels like a worthy conversation to have. Should we reduce the level of our use of private patrols? So things like patrols in lower Ocean Street, patrols around the wharf area. Those might be areas that we're not seeing the bang for the buck. And I think our police chief and the team can talk more about that. There's more questions involved. Those are two perfect examples of things that are definitely worthy of this conversation and definitely more interaction, more information has become. As compared to the finance department working on lease negotiation, lowering our lease rate. I'm not sure a lot of people will care a whole lot of them, just do it. Or passing on certain credit card fees to transactions that people are used to paying those. Those feel like just do it things. These are not just do it. These are conversations we want to have to counsel. Make sure before we go forward, do you support generally these ideas? If you say we want first alarm, in fact, we want a double first alarm, I'm not saying you would. That's important for us to understand. We want to recommend the reducing first alarm. We think there are better ways of doing it and to allow the police department to further research that and come back May 28th with a very concrete proposal of what that might look and feel like. So that's an example to get warmed up of two things. And are there in all of these other just do it type? Yes, for sure, for sure. I mean, very candidly, there's easily 1.6 million of the 2.4 that would have just been built in the budget anyways. There are things that if we have to reduce the things we could do without a lot of notice. A lot of impact or people even knowing that we did it. I mean, we talked to a year ago, and Councilman Remeyer is really noodling on this climate resiliency idea. But that was our theme last year's budget of the cuts we're making are starting to really eat into our resiliency and you're starting to see it. We're not as nimble as we were a year ago, we're delayed on giving you certain materials. So the reductions that we would do, I would say, are something that we can do and we will do, but it just restricts us even more. It's not just resiliency, we're losing response time at some levels for us. So I'm over-explaining that yes, we would do it and yes, we recommend it, we wish we weren't doing any of this. So as I read it, all these things that we're going to go through now are things that you anticipate merit real conversation. Yes, some do and some we should probably just do to be very candid. And under all this is the realization that as we eat into the just do it things, that's the low hanging fruit and it gets harder and harder. Yeah, it's not the fruit, we're breaking limbs off now.  All right, I'm trying, I'm not sure if that works, but it's popped in my head. Better than the Band-Aid one. So these are essentially representative of the entire list. The numbers are still fluctuating a little bit, like what would that save, how would that look? Port of magnitude of first responder fee is a couple hundred thousand dollars. Reducing first alarm could be 100,000 to 400,000, I think 200,000 to 400,000 or 300,000. But my point is we've got a really reasonable framework of how that might look and we want to come back with more. So today if you say absolutely not, do not consider first alarm reductions. That's important for us to understand. If you say absolutely not, my gut tells me that we don't want to explore first responder fee. That's important for us to hear to see to hear. Again, I recognize that you need more time with us, so we're not making those final decisions. But we're just looking for your feedback. Does this feel like the right direction? Because we've got to do something. Question, again, it's just procedurally, do you want that feedback now as we go through all these? Or will we be coming back to these? I think this might be a place, let me power through it. And I think it is okay just to get started about how this might flow. And then be able to respond, because we have a lot of people from our departments who are better positioned to answer some of these questions. Okay, we'll go ahead and finish up and we'll hold our questions till the end. So police and fire, again, they had other ideas. We just weren't comfortable with things that impact staffing and direct operations. We're not sure that we're at that place yet. Public Works, Operations and Engineering. Public Works, as you know, is in the general fund, they're diverse. But outside of the whole city, they're incredibly diverse department from waste water to resource recovery, landfill management, storm drains, engineering grants, capital improvement programs, facilities. But within the general fund, there were some direct areas that we directly fund. Engineering, traffic, and some of their operations. And some parking stuff that's general fund parking revenues supported. So the ideas that came out of the public works came out of, we have certain services that we make available for people who need emergency work done or emergency engineering or some last minute permitting stuff. Public Works is part of community support projects. What we would recommend there is reducing our level of responsiveness in there to even less than we have now. Other ideas that are coming out of the public works, we spend a lot of time looking at energy resource and this is a painful one to talk about. I don't, we would not eliminate all ideas, but we'd have to recognize we can't keep spending multiple levels of resource, staff time, and consultant cost on analyzing every great idea on how we might do things differently with energy. We have to be a little bit smarter, make a little more strategic about that. Again, they could talk to you a lot more detail about this. Reducing flood control maintenance, which includes some surrounding vegetarian, vegetation, those are examples of things that are nuanced. Again, this list or outside of energy stuff might be something we would do anyways, and we would have probably built into the budget anyways. They feel more smaller scale impact, but certainly if we have questions, they're available to get into it. Within their parking and traffic, they're looking at and they've heard the idea about increasing parking rates. So beach area would be definitely an area that we would aggressively look at. Getting into residential and guest permit pricing. Those would be areas that we would also look at. So if there's a concern or don't go forward, that's something we want to hear today. Street smarts outreach program, I'll let them talk a little bit more. That's one that definitely would be on the radar of let's have a conversation about it, as would funding for some bike and pedestrian crossing areas. So we recognize that those are areas that we want to have a little bit more conversation on. So those are public works. Some of our other developments, economic development, planning and parks and rec. Economic development has several that are important to talk about reducing, not eliminating, but reducing facade improvement program. Reducing graffiti contract and reducing some public artwork. We have staff that are heavily involved in a lot of those areas. And we have contractors involved in many of those areas and we do direct grants for facade improvements. So we'll be reducing those areas. Facade improvements, we've been doing that in the past. So every year we're taking a little bit less out of that pot. And it is a valuable program. We've had some great successes out of that. They've also got some temp staffing and contractual staffing that helped them do their job. I don't think they would love to reduce that. It's probably not the top of their list, but it's on their list of ideas to think about. Planning and economic development, or planning and community development, excuse me. They have a lot of professional resources, whether it's people helping review plans or helping support research or supporting housing initiatives. They rely on a lot of professional resources to help them provide information to you and to the public and to the commission. So their impacts would reduce their ability to use as many resources, which couldn't reduce their ability to do some of the project work. They would also reduce some of their ability to support counters, be responsive to client support. As well as they were, in the last several years, relied more on some legal support for various research projects, ideas, initiatives. Reduce the legal support. We'd have to reduce some of that project work. So it's not just as simple as we won't use attorneys, it's we have to stop the work that's triggering the attorney's use. So there's some pain in that space, for sure. Parks and Rec, there's some things in here we might do anyways and some things we want to be more thoughtful about. I already had the conversation about, for example, delaying wharf. But also there's some museum maintenance that we do. And these are moderate delays, wouldn't noticeably be seen. We hate delaying any maintenance. So it's not something we want to do, but you're breaking those limbs off. I mean, these are not easy choices. But if we want to bridge the gap, these are things we can do. We have staff time and some direct costs to help with fencing and maintaining fencing around some of our parks and other areas. We recognize also that we can reduce some of our water costs, we're a client, a customer of our water system. And so Parks and Rec pays a lot of, buys water from our water system. So they will reduce some of their water usage by browning out certain areas. They have other programs, summer programs, our museum program that they eliminate. They eliminate the youth museum programming. They reduce some hiring for sports officials, some of our camps attempts. And they can talk to you more about the impact statement. It's not eliminate, it's reduce some. As well as reducing trail and some cleanup costs. There's also some advertisement promotion efforts we put into some of our summer programming and some bus trips that would be stopped. So that's the nature of those types of changes and impacts. Finally getting into where we started with council. What's the council stuff and community support programming and some admin departments. The last of the service departments, finance, HR and IT. There's a combination of things that would happen. The city invests as a partner in leadership Santa Cruz. We often send people to leadership Santa Cruz. I went a couple years ago and I was blown away by what it was. I didn't understand what it was and I was just amazed by it. And the connections, the information, the content you get of who this community is and the history behind it is amazing. So that's not a great one that we want to think about limiting. But again, we're at that point where we're pulling the branches off the trees. We have other things that are done in human resources, compensation class studies and some specialized work that they do for particular recruitments. Are they invest more in helping other recruitments? We're having a hard time recruiting certain positions. So it would be reducing some of our resources to our net which shrink as far as amount of candidates that we would be pulling in. For finance, we have a couple things. We have a courier service that goes onsite to pick up and streamline deposits and checks and some other transactions that happen where they show up onsite instead of people walking around the city with cash or resources. So we looked at reducing the amount of scope of those pickup sites. It's not something we would like to do and we're looking for other alternatives. But that is, it's a trade off to, we've got core stuff that we must maintain. One area that was an absolute and we've already started making progress is expanding credit card convenience fees. There's a point in time when I was a little bullish in doing this. Because we want to see more people using credit cards, we don't want to disincentivize at it. It seems like the operations, but there's a cost to it. So we're at that point in time where we can't absorb those costs. We already implemented last year, council give us the authority to do a lot of credit card fees. So this would be taking a step further into almost all of our transactions. So TOT was a place where we hit aggressively, but business license, emissions tax and for other tax payments, some other counter payments, we would start having a convenience fee added on to all of those. Again, we've traditionally wanted to encourage people making credit card payments because it just makes things flow so much better and takes off internal control risks and other things. But now at that point in time where it's just the no brainer, we need to pass those fees on to the consumers. There are some modest staffing reductions we're looking within finance HR and IT, as well as within IT, reducing some of their help desk responsiveness time, and we've got some lease costs that when finance temporarily moved off site, we might be, we should be looking at lower cost and there are some opportunities that could have us in lower cost space, but there's a trade off to that. Being further away from our clients and our community, the close yard or city hall prices are higher. The further out you get, they're less. So there's some trade off there. We've got to try to value judge that. So that's kind of your primary operating departments getting to community support council, city manager, city clerk. Within the community support, there would be a recommendation to reduce some of our community group funding. Typically when the general fund is facing a reduction, we look at an equivalent level of community group funding reduction. So if we're looking somewhere of three, four, or five percent, whatever that number ends up being, then we look to an equitable level of community group funding as a recommendation. Again, recognizing that there would be more discussion that would come out of that. CPVAW is a committee that would reduce some of that budget support. We have funding that we set aside in the city manager's budget every year for some homelessness. We would reduce some of our flexibility in that space by reducing some funding for our coordinating committees. We also have programs, Hope Support and Open Streets that would reduce some of the funding there. Concluding with things that would impact council, probably the reducing travel and training that would be the one that you would foresee that most of the staff would be looking at that anyways, but that would be a space that could impact you directly. There's also some special projects and services that council members have placeholders for, typically some special projects they're not often used, so it would be eliminating that of budget authority. So that's the nature of what the impact would be on council. The city manager's office does a lot of communications outreach and support, a lot of time, and some resources are spent in that. We would reduce the scope of those resources, reduce some of the publications, maybe reduce the frequency of some of our external meetings because they all come at a cost of running space and it supplies it to support that. And lastly, which is on the top list is we work with and we were talking yesterday about how do we get information from the state to us and us, information to our state about what we want them to do and what we know they're doing. We have a state legislative strategist that helps us stay in line with what's happening. They're cluing us in on things and they're also help us advocate for. So we would look at reducing that contract or changing the scope of that. Again, these aren't all, last year's stuff was a little bit easier. The prior year's stuff felt like, okay, we didn't want to do it, but that was easy. Now we're really in that place where I don't think there's anything on this list we want to do, but things that we can do that wouldn't be completely transparent to the public, recognizing that some of these would. So that's your first preview of the types of impacts we would have and what we would do next is then develop more comprehensive. You haven't seen the finance director's overview, including that schedule within the budget document. We'll detail these out a little bit more. It'll have a little bit more narrative about the impacts. You're not getting the full scope here. Some of the stuff sounds big, but it might be small. Some of the small stuff might be bigger than you think. So we want to be able to provide some narrative, some more narratives behind that to get us ready for May 28th. I can pause here. This effectively ends our staff presentation. Well, not on a very high note, I'd say. Oh, sorry. But anyhow, thank you. Again, we're not talking of an $8 million or a $12 million gap, so there is good news there. And we're not closing operations anywhere, so that's great news. Good point. It's all perspective. Thank you very much. And thank you for the presentation. And to your staff and the staff in the audience, we had a nice full day of presentations yesterday and really great work that was highlighted. So I really want to echo the comments that were sort of kicked us off by our city manager in that regard. In terms of sort of process, we had the schedule sort of laid out for us is to at this time kind of, before we go too deep into some of the details, because I have a feeling a lot of us have questions about what that could mean, that I would propose that we'll go ahead and maybe see if there's any sort of questions in regards to some of the, maybe the earlier content, and then open it up to public comment, then we'll return back, because I think a lot of the deliberation, decision-making kind of more in-depth questioning will lead to sort of the afternoon discussion. And is there any, does that feel okay? Okay, Councilor Mathews and then Councilor Brown. Yeah, I have I think a pretty quick procedural question. So just for the benefit of the public, all these suggestions are new to us too. Absolutely. Act. And looking at them, I realize from the department's points of view, these are all things, oh my gosh, we don't want to do these, but if pushed, here's what we'd suggest. And to my mind a quick review, almost all of them look like we got to discuss them. And these are suggestions coming from people who know their department's work the best. I would really like a lot more detail about what we're currently spending on these. And most of these I look at, I will entertain, reduce, but not eliminate, et cetera. I mean entertain, yes, eliminate, but not reduce, I said it wrong. Can we schedule some significant chunks of time with you in the next week? Absolutely. Kind of what you're anticipating for this. Yeah, I mean, again, we recognize this is your first glimpse. There's no way you're positioned to say yes, do all this or no, don't do any of it. We need more discussion. I think doing some more intimate one-on-one meetings, letting us produce more content, some more materials to get that out to you so you can get a bigger sense of what the impacts are. Those are all things we want to do between now and May 28th. And another question I guess for city manager, would it be appropriate to meet with the department heads particularly on their take on these things? Yes, absolutely, that would be fine. And I think what we want to get from you today, hopefully is just a sense of, is this the overall numbers for each of the departments? Obviously within those are a variety of things and you might have questions about those and want more information about those. And as Marcus pointed out, there's, we can adjust those somewhat. And then as you're suggesting, that would be totally appropriate to meet with the departments if you'd like to do that or we can set up special meetings to provide you with additional information on those as well. But I think just getting a sense of, that this is kind of the target for those departments, recognizing too also that this is just 2.2 million, we've got the 3 million. So, and then I'm sure also council members have other suggestions and ideas that they want to bring forward. So we want to hear those as well and then get a sense of how you feel about these, get a sense of what else you have in mind so then we can then develop a plan for the next time. And I'll just say that and that will be the conversation we'll have after our lunch break. Okay, council member Brown. Thank you. Just another procedural question for members of the public who would like to comment to us. We have, I think 11 to two, that's what I've been telling people based on the schedule. We saw 11 to two with a lunch break scheduled for public comment. I just want to make sure that that's honored if we don't take up all of that time and we begin deliberations of people who show up later and thinking that they could comment, well, will they be able to still weigh in? Public comment? Yeah, because there's, so people think it's 11 to two if they are taking a break from work to come over. I mean, I don't know that that'll happen, but just in case I just want to, so members of the public who are tracking this or watching from home or their workplace understand what to expect. Yeah, if there's folks that are in the audience here that want to comment and we are able to get through public comment before lunch, my schedule says up to 130. So we'll have 11 between approximately 11 and 12 for public comment and then return after the lunch break to entertain more public comment if there's folks that are wanting to speak at that time and then begin our council deliberations around 130. But if you have somebody who comes in between 130 and two because of the information that was shared. That was just what we talked about in budget in our subcommittee. So I was telling people 11 to two, but I'm sure people will figure it out. Okay, thanks. So I think we'll definitely want to get into some of this, I think, absolutely. And I believe that will be after our lunch break. So why don't we go ahead at this time, maybe just have about a three minute break for our council. And if those who are wanting to speak to us for public comment, please line up to my left and you'll have up to two minutes and we'll at this time just have a short break. Three minutes. Council meeting back into session. So thank you for in the short period of time for lining up to my left. I apologize for not mentioning this earlier, but if there are members of the community who would like to address our council just very briefly within one minute, I want to invite you to speak to us first and I'd be happy to have you sort of step up, say your statement within the one minute timeframe and then we'll go ahead and move on to those who'd like to address the council within two minutes. So anybody interested in a one minute comment here? Excuse me, Madam Mayor. Council Member Glover. Thank you, I'd like to, just because budgets are so important and I know people have taken time out of their day to come and be here with us to share their perspective, just to offer them a little bit more time, I'd like to make a motion to extend public comment to two minutes and 30 seconds. Okay, there's a motion. For two minutes and 30 seconds by Council Member Glover. I'll second that and I also just want to make a comment on for years and years, the city has had a three minute standard for people who come to the microphone and it's been eroded over the last several years and I would like to see a restoration. So I'd support three minutes, but two minutes and 30 seconds, I support. Council Member Brown, quick comment. I'd support that given the number of people, although I see now I see more people coming into the room, but given that we don't have a huge crowd, it seems and the time that we've allotted it does seem like it's appropriate to give people a little extra time, prepare for two minutes and you usually go over just a bit. So I'd support that two minutes and 30. So we have a motion and a second. All those in favor please say aye. Aye. Sorry. I was just going to make a comment that I think that we've been over the course of the past year, we've had, sorry, over the course of this year, we've had a lot of issues with managing time and many of our meetings have gone resulted in 12 to 13 hours. And I think that given the fact that we've been extending time and having issues around managing the time of the meeting, I'm not going to support this at this time and stay with two minutes, so. Okay, Council Member Glatter. While I understand Vox and Maricombing's statements and concerns about previous council meetings that have gone for extended periods of time, those council meetings were consumed with not only important issues around homelessness to provide people the opportunity to speak, but also were compiled throughout an entire day of other issues. This meeting is only scheduled until 4 p.m. to my knowledge and we have the allotted time already put into the schedule for that level of public comment. So I would implore Vice Mayor Cummings and the rest of the council to make sure that the people can have an extra 30 seconds to express their perspective on the budget, which is a huge issue for Santa Cruz. Okay, Council Member Matthews. Briefly, I'll oppose the motion. I think we have seen that people can express themselves quite fully in a couple of minutes. And also, many of those who speak in public, in oral communications also have written to us, have met with us personally. So there are many, many other opportunities to meet with us on budget and other items and so I'm going to stick to the two minutes. And I'll just remind the community and the council that as you saw in the calendar, this is the first and we'll have many more opportunities in the next several weeks to discuss the budget. So it looks like it will likely be on our agenda. So we have a motion by Council Member Glover, seconded by Council Member Cron, all those in favor, please say aye. Aye. Opposed? No. That fails with Council Member Brown, Cron and Glover voting in support, Matthews, Vice Mayor Cummings, Myers and myself voting against. So those who are interested in speaking for one minute, please self-select and you're welcome to come up and you'll have up to one minute. As soon as we're done with the one minute folks who are interested, then we'll have up to two minutes for the remainder. Good morning, Mayor and Council. I'd like to acknowledge your dedication and hard work as you grapple with the many challenges our community faces. The mayor has expressed her wish to see community health be a foremost consideration in every city endeavor. How does bringing more traffic congestion, noise and pollution into the heart of our downtown contribute to our health and sense of wellbeing? It does not, whereas a well-designed town commons at that location could. I'm talking about lot four and funding for the garage. How does it look to spend $41 million to house cars when housing people is much more urgent? I realize the money comes from different sources. So please hear the many voices who have said no to this garage on this site for many years. Help preserve what is special about this place. Thank you. I'll have up to one minute as well. Hi, Council. This is Deb Tracy Pru from Santa Cruz City Schools and I greatly appreciate the challenge that's before you being from an entity, Santa Cruz City Schools as well as all public schools, we don't generate revenue. And so we're at the mercy of the state and taxes. So I highly encourage Council when you're making your deliberations to not cut off any possible revenue generating development. Also I will say that I fully support and mixed use space. We need housing, we need parking and we need a 21st century library. Additionally, we have our district office here in town. We do own some property, we do have some parking but we are currently paying Holy Cross for overflow parking. And I'd much rather pay the city of Santa Cruz in the Catholic Church to help our staff and faculty come to meetings and training. So I just wanted to let you know that and good luck. Thank you. Okay, were you interested? Good morning, Fred Geiger, Santa Cruz. You're probably familiar with the Santa Cruz climate action plan passed by the city council and the city's efficient vehicle policy as a result of this climate action plan. So you're also probably aware of the budget emergency you declared a year ago roughly and the $3 million deficit that's upcoming. So how are we doing? Well, we're not doing too good. I see a lot of stuff in this budget that is either unaccounted for or is not progress. How about fuel consumption? How's the city doing on fuel consumption? You don't know. I don't know. Who does know? Somebody knows they pay the bill. Why don't we know? Why don't you know? Why can't you track it? Are we making progress? We're going backwards. I can tell you this, we've got a police fleet with dozens of cars getting less than 18 miles per gallon. We don't buy the Ford Fusion police-approved hybrids that get 39 LA, Detroit. Many jurisdictions are using those. Why not? They're heavy duty. They're tested by these departments. They're used and they're successful. I see in our budget we have a- Your time is up, but you're welcome to leave the comments if you like. You guys spend more time talking about our time. So just to make sure there's clarification, anybody who's interested in one minute, okay, we have one minute and then we'll go to the two. There you go. Thank you. Ma'am, I was speaking under the two minute rule. We'll give you an extra minute. How's that? Okay, we'll go right ahead. Hello, council. My name is Yonika Strauss. I'm the director of Bikes Santa Cruz County and we put on the Open Streets event each year. And I'd like to urge you today to not reduce any funding for the Open Streets event. We've been receiving $15,000 from the city of Santa Cruz for the last two years. And before that, it was actually 22. So two years ago you reduced it to 15. We were able to find alternate funding sources, but at this time that 15,000 is critical for the future of the event. We do already maintain a pretty lean budget. And so reducing that even more would be would be a big significant drop for us. This event serves more than 10,000 people. 51% of event attendees have said their favorite thing about Open Streets is having a safe place to bike and walk. 32% have said that it has led. Thank you. And you're welcome to leave your comments if you like. And we've received your emails. Okay, you'll have your additional one minute. Thank you, sorry about that misunderstanding. I wanted to mention this $68,000 Tahoe that's in your budget replacing a compact Toyota Tacoma. And also the fact that what you're looking at for vehicles is not a need list, it's a wish list. It's like what would these people like to have the city pay for them to drive around? Well, unfortunately some of these people don't appear to be very enlightened. You can replace that Tahoe with a Minivan or an SUV, holds eight people for half the price, gets about a third better gas mileage. So I'm urging you to take a look at these vehicles in here. I don't know what's going on as far as any kind of monitoring or compliance with the Climate Action Plan, but please do better. We need action and accountability on this. Thank you. Hello, my name is John Hall. I'm a member of the Downtown Commons Advocates and I'm here to express my concern that the Council avoid having the tail wag the dog, that is making non-budgetary decisions by default in a budget document that might commit you to a course of action you need to consider more fully. As your staff has noted, the city of Santa Cruz is experiencing a budget crisis. Others, including consultants addressing this Council have pointed out that the construction of a 600 car garage is not necessitated by demand. Over the period covered by the budget, the city is committing to spend $32,369,000 for a garage, $32 million. My sincere hope is that the city council ultimately will decide this is not a good use of city funds. The money can be spent better by renovating and or building a world-class downtown library on its existing site or elsewhere than Parking Lot 4 and creating a permanent farmers market facility in Downtown Commons on Parking Lot 4. Parking Lot 4 is a location superior to any other for the farmers market due to sunlight, traffic, size, and safety considerations. I therefore request, and there you have it specifically, that you keep your options open by first on CIP page 154 for the farmers market structure, eliminating specifying any location and Cathcart Soquel doesn't exist as a location anyway. Second, on CIP 150 for the Downtown Mixed Use Project, eliminating 2020 allocation funds from the Affordable Housing Trust Fund and Measure S. Taking these simple budget actions will ensure you the latitude to fully plan how to best create a great downtown library and a great farmers market in Downtown Commons. Thank you for your attention. Good morning. I'm Dana Bagshaw. I live in downtown Santa Cruz. It's obvious that we need to make cuts to our budget. So I was looking over the budget. It is really awesome, but I tried to focus more on public works and transportation. And the items that came to Fort that I noticed the most were things like improvements in the intersections to improve flow of traffic. Now, what we need really is to reduce traffic, not improve traffic flow. If those intersections is for bikes and for pedestrians, fair enough. But if you use that as a cover for adding another lane for cars, not a good investment. I also noticed roundabouts to improve the flow of traffic. I happened to volunteer at the Exploration Center by the Wharf and I see terrible traffic jams at the roundabout. To me, that's a waste of money. Another, and speaking of waste of money, expanding the width of the bridge over the highway one. That is another place where we just, that's a big expense and all it's going to do is encourage more cars. So I would cut that from the budget. I noticed that also that in public works, there's a lot of line items for storm damage repair. That is only going to increase with time. So it just tells us that our real imperative is to find ways to cut carbon from the budget. Thank you very much. Thank you for the opportunity to speak. My name is Pauline Seals. Council Member Meyers referred to the climate crisis. Well, what we've seen so far is less than the tip of the iceberg of what's coming. And what we are doing is woefully inadequate. Modestly, we need to be reducing greenhouse gases by at least 5% per year. This would put us somewhat close to getting to 50% reduction by 2030. Probably we need more better than that. But that would, as a round number, that's not bad. Looking over the items in this budget that were listed as climate change related, I seriously doubt the amount to 1% of our greenhouse gases. Some of them are great. Safe fruits to school, excellent. Improved lighting for the ballparks, sure. But that's not the big problem. The cars are the big problem. And we have to get away from that. Dana already mentioned the fact that some of these traffic things are speeding the traffic up when we need to slow it down and improve bike safety. So that people get out of their cars, walk or bike. They're not gonna do that when the cars are whizzing past and the car is right next to the bicyclist. And the buying of the gas guzzling vehicles, as Fred pointed out, is really a very bad idea. Existing vehicles that need replacing can be repaired until EV alternatives are available. There are already some EV pickup trucks available right now and many more will be coming.  Thank you very much. Thank you. Mayor Watkins, members of the council. My name is Benjamin Eichert. I'm the director of the Romero Institute's Green Power Initiative, where a local nonprofit dedicated to fighting climate change globally, but especially here in California and even more, especially here in Santa Cruz in the city and county. I wanna speak specifically to the items already referenced about the purchase of new gasoline-powered internal combustion vehicles for this city. You know, in 2018, unfortunately, global greenhouse gas emissions continue to rise at their largest rate since, I believe, 2013. We're at a point now where we actually need emissions to be declining, and instead they're going up. And this is very concerning. So I wanna speak, you know, Santa Cruz, I believe, should not only be doing its part, but should really be a leader, an example to the rest of the state, an example to the rest of the country. And so I think that one of the ways that we can do that, and there are many, but one of the ways we can do that is to implement an immediate moratorium on the purchase of new gasoline-powered internal combustion vehicles. And number two, aggressively investigate zero-emission alternatives like electric vehicles. And I would encourage you really also to explore those possibilities with Monterey Bay Community Power, which I know is preparing to offer incentives for the purchase of electric vehicles, and may also be able to come up with some really creative ways that the city can help eliminate entirely emissions from the vehicles that it operates. Thank you very much. Hello, my name is Dr. John Conway, and I'm an environmental scientist and a resident of the city of Santa Cruz. I'm here today to ask you to set a better example of sustainability for the people who you serve and for all future generations of Santa Cruzians. The science is unequivocal. We are causing a climate catastrophe. We are burning fossil fuels that are causing this and will result in rising tides, extreme fires, devastating storms, saltwater intrusion to our already depleted aquifers, disappearing crops and disappearing forests. All this and more lies in our future if we do not take this dead serious right now. So to know all this, to be in a position of responsibility for this city and its people, and to intentionally choose to lock in years more carbon emissions from an unsustainable vehicle fleet, for example, is simply unconscionable. Are we in a climate emergency or not? It's far past time to start acting like we are because we are in one of our own making, largely from driving around cars like that have been included in this budget, using taxpayer dollars. We are living in an era of climate change. Welcome to the Anthropocene. Every single decision we make now must now be made with that in mind. I appreciate the challenges of working with budget constraints, but please, I implore you as a scientist and as a lifelong Santa Cruz resident to rework this budget, to include electric vehicles instead of internal combustion engines, and more broadly to pass policies supporting electrification, carbon-free power, divestment from fossil fuels, and environmental justice. Because climate change is happening right now, and if we don't take rapid drastic steps immediately, we are placing the entire future of this city in jeopardy. Thank you. Hi everyone. So I'm up here because I think the council needs to take into account of a public health crisis that is currently wrapping through Santa Cruz and the rest of the United States, and that public health crisis is the fact that on half of the nights, I know I personally and plenty of other people have a hard time actually going to sleep because looking forward into the future, we realize that 10, 15, 20 years down the line, we're looking at something that we have really no idea what to expect, but I think that there are a few things for sure that we get to look at. And one is a recession caused by climate change that has no ending, because typically when recessions are solved, it's because people trust that the economy is gonna go back into order. But with climate change, all we look at is inevitable decline. And so when you have a never ending recession, you also start to get to have riots. And you have rising food prices as well because farms stop working at the same level. So I wanna just suggest that it's not just disappearing shores, but also kind of a disappearing civilization that we might be looking at. And I unfortunately have the benefit of living through all of this myself personally. So last night I had about maybe two hours of sleep and I continue to have about two hours of sleep every night doing so. It's hard for me even to focus on doing any kind of work that gives me a future in 40 years because looking at a retirement based on a pension is almost like counting on a tricycle to take you halfway across the world. I mean, it's just not enough. So I would ask you to look forward to helping the people in the city and kind of all around the world in making a budget that reflects the carbon realities of what you can actually do here in Santa Cruz and is also in the United States. I mean, if you presented this budget to people here without actually saying, we don't know how much we're spending, we don't know how much we're taking in, but we're gonna do these things that just sort of hope for the best. I think people here would kind of laugh you out of the room and ask you to either do what you would have to do to figure out what you can actually spend or find someone who can. Thank you. Hello, thanks for listening. Thanks for being here. My name's Megan, I'm 43, live in Seabright neighborhood, and my daughter really wanted to be here. She said, can you put on the back of your side, mom, that I wanted to be there too? Because she knows a lot about what's going on with our climate, probably more than a lot of people know. And I guess I just started learning about two years ago and I just want to implore if you can take the time out of your life to really look and see what's happening. Like, I think things would be changed here because people would really face the facts and know that we need to be reducing our carbon emissions by drastic amounts that no one is really willing to do unless they really face what's going on and know that my daughter, she's already like, I'm probably not gonna have kids, right, mom? Because why would I? Like, she's thinking that way because I'm telling her the truth. And most people don't want to hear the truth and I feel sad. I can't believe I'm in this position to tell my daughter the truth about what's happening. And I'm not just scaring her doom and gloom, but this is the reality. So I just implore that people take time to research and know what's going on and create allies and create people that they can cry with and then through those tears really face, like, what's mine to do? And how can we change strategically and huge structural changes that need to happen dramatically in order to create a future that we can all live in and cope in? So I just really want to look you all in the eyes and say thank you for listening to my heart. I feel like I'm speaking for the future generations and just appreciate you all being here and all that you do and all the time you put into it and all of the many issues that you're thinking about. I know this isn't the only one just for me. It's like, well, if this wouldn't, we don't look at this one and there's no, we have to solve this one also. Thank you very much. Thank you for listening. My name's Shelly Kniep and I'm here today because I really am wondering what kind of world your children's children are gonna be facing. She just said she doesn't know if her daughter's gonna have children. My daughter's not. She doesn't want her child to suffer through what's coming up here. On the budget matter, you said that it looks like we have lots of revenue from the Boardwalk. The Boardwalk isn't gonna be here because of climate change and how water is gonna rise. It's not gonna be here. So that's gonna be gone. We're gonna have higher costs of fires as evidenced by what's been happening in the state of California. We're very vulnerable, especially in Santa Cruz, all around us. I noticed that there's $9.9 million being appropriated for scenic trails, but 0.4% on solar. And you said that we have a loss of gas taxes. I suggest that you raise them. People in Europe pay a lot more money based on taxing oil and gas than we do. It's time to raise it. That would get people into electric cars and would give you more money. I see that you're cutting energy exploration. My husband was a co-author for the Kyoto Protocols on how much energy conservation would do to reduce global warming. And it ended up that it was 8%. You don't have to spend a lot of money in energy exploration. Just find ways that you can conserve and reduce your energy usage. He's been in this business over 42 years. It works and it pays itself back. I would like to ask two actions of you. Number one, please read the book Falter by Bill McGibbons.  Thank you. Thank you. Good morning. I'm Brett Garrett and I'm hearing wonderful comments this morning. Pretty much everything that the previous speakers, I think all of them, I pretty much agree with me. And I hope you'll take these comments to heart. Many of my comments are written. I think you received copies of this piece of paper. I have very serious concerns regarding the downtown mixed use project, also known as the library garage project for lot four. It's budgeted for $32 million on page CIP 150. It's a very controversial project so it needs a big disclaimer in there saying the garage depends on being re-approved by city council or better yet, remove it from the budget. Many reasons we don't need a new parking structure of this size, transportation to man management, parking management as described by Patrick Siegman recently. Current trends, automated vehicles and climate change says we need to be doing something other than creating infrastructure for cars. And speaking of transportation management, I didn't see any line items in the budget for transportation to man management. I know it's in there, but maybe it should be itemized. The farmer's market structure item is rather confusing with possible errors. It shows a million dollars estimated actuals for the current fiscal year, but I don't think it's happening yet. And the location is confusing, Cathcart Soquel. I agree with other speakers who talked about too many gas guzzling vehicles. And in addition to my written comments, I just want to offer some low hanging fruit for increasing revenue. Our parking permits downtown are too cheap. I believe they couldn't be increased much more than what is planned for increases, except in cases of special needs, of course. I don't understand the philosophy of offering a deep discount for more parking. We need a broader discussion of how parking funds can be used. Thank you. Good morning, council members. My name is Vivian Rogers. I'm the director of the friends of the library. And I'm here this morning because my board members and quite a lot of my volunteers throughout the county asked me to come here. They given me some notes. Hopefully I'll get through them all. They first say thank you for dedicating your time to creating a better future for the city of Santa Cruz. They understand that right now you all are facing some very hard decisions. And they find that your work is very commendable. But for that same reason, they ask you please do not act hastily in cutting any funding to the lot for parking lot or where the farmer's market is and where we hope our mixed use building will be. They ask you please retain the funding in your 2019-20 budget to keep options open for potential projects on the slot. This community needs a thoughtful and feasible decision on the future of the downtown library. And if you cut the budget today to lot four, you will end that ability to look at it creatively and could likely result in a downtown library that's half the size of the current one and definitely would result in cut of services throughout the community. So the friends ask you do not limit our city's possibility for a great downtown library or for great library resources throughout the county. Thank you. Thank you. Hello, I'm Susan Cavalieri. Thank you for letting me speak. In September of 2018, the city council passed the climate emergency resolution. Also in 2018, the IPCC issued a report stating humans have about a decade to dramatically reduce emissions to limit warming to 1.5 degrees centigrade. Several days ago, another UN panel reported mass extinction of species linked to climate change, which also threatens humans. The fiscal year 2020 budget does not acknowledge a climate emergency. We must have dramatic changes in transportation, energy and land use in order to change the trajectory of the catastrophic future we face. Please heed the warning of scientists, listen to constituents and make changes in this budget to dramatically reduce emissions in Santa Cruz. Budgets today and in the future are climate documents. The co-chair of the panel, which released the report on extinction reports, people, and I quote, people shouldn't panic, but they should begin drastic change. Business as usual with small adjustments won't be enough. Thank you. Hello, Gail McNulty. I live in Bonnie Dune and have three children. Evie's 13, Jack's 11, Henry's 7. Evie attends school in town and Jack will join her next year. We love Santa Cruz and we spend a ton of time and money here. Well, I've been shuttling my kids to soccer and junior guards, worrying about what they eat, reminding them to brush their teeth. Their future has become less and less certain. Most of us feel growing despair, but while we're rushing from one thing to the next, avoiding difficult conversations and numbing our souls with chai and yoga, our climate is getting scarier. By the time Evie, Jack, and Henry are adults, it will be too late to avoid climate-induced economic and humanitarian crises, increasingly catastrophic fires and storms, leaving more of us homeless, making it difficult to ensure our homes, longer droughts, crop failures, food shortages, unless we make dramatic changes now. Passing a climate emergency resolution was a nice gesture, but our houses on fire and our children are trapped in the decisions we make today. We need courageous action, not gestures. The United Nations estimates there are more than 65 million refugees now, many displaced by climate-related disasters. Our friends in Camp Ross are not just today's problem, they're the front lines of a growing divide between the wealthy few and the suffering masses. Living here, it's easy to forget that low-income residents and communities of color in California and around the world already live with dirty water and smog-filled air. In March, I attended an interfaith call to moral action on the climate crisis at Martin Luther King's Church in Atlanta, with El Gore, Reverend Barber of the Poor People's Campaign, and many other leaders. Climate catastrophe may be the greatest moral issue humanity will ever face. Our glaciers are melting, we must thaw our hearts and forgive one another to band together. The sea is rising and we must rise above bureaucracy, pull the emergency brake on this business-as-usual budget and dare greatly. We don't need a new convention center or library and we certainly don't need a new parking lot.