May 22, 2024 Finance Committee Meeting

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WELL, GOOD MORNING AND WELCOME TO THE BOARD FINANCE COMMITTEE MEETING OF THE EAST BAY REGIONAL PARK DISTRICT ON WEDNESDAY, MAY 22, 2024 AT 10:40.

[Roll Call]

HERE. CHAIR MERCURIO.

HERE. I BELIEVE ROSARIO WILL BE JOINING US LATER.

DEBORAH SPAULDING AGM OF FINANCE AND MANAGEMENT SERVICES.

HERE. LYNNE BOURGAULT GENERAL COUNSEL.

HERE. TODAY'S MEETING IS HELD PURSUANT TO THE BROWN ACT.

WE ARE PROVIDING LIVE AUDIO AND VIDEO STREAMING.

MEMBERS OF THE PUBLIC WISHING TO MAKE A PUBLIC COMMENT CAN DO SO.

ONE LIVE IN PERSON OR VIA ZOOM, TWO BY SUBMITTING AN EMAIL, OR THREE LEAVING A VOICEMAIL.

THIS INFORMATION IS NOTED ON THE AGENDA.

IF THERE ARE NO QUESTIONS ABOUT THE MEETING PROCEDURES.

WE WILL BEGIN.

OKAY. ARE THERE ANY PUBLIC COMMENTS FOR ITEMS NOT ON THE AGENDA? NO PUBLIC COMMENTS.

OKAY. SO THE ACTION ITEMS ARE THE FIRST THING ON OUR AGENDA.

[a. Investment Report and Market Review for March 31, 2024]

GOOD MORNING. I'M DEBORAH SPAULDING, ASSISTANT GENERAL MANAGER OF FINANCE AND MANAGEMENT SERVICES.

AND I'M JUST PULLING UP THE PRESENTATION HERE.

I'M GOING TO GIVE A BRIEF OVERVIEW LIKE A HIGH LEVEL OVERVIEW.

AND THEN I'M GOING TO TURN IT OVER TO JUSTIN RESUELLO WHO'S HERE FROM PFM.

SORRY. LET ME GET TO THE RIGHT SLIDE.

AND HE'S GOING TO GIVE YOU EVEN MORE DETAIL AND ALSO GIVE YOU A BIT OF A SENSE OF THE CURRENT MARKET CONDITIONS.

SO THE MAJORITY OF MY PRESENTATION IS REALLY JUST LOOKING AT PAGE TEN OF YOUR PACKET AND WALKING THROUGH FROM TOP TO BOTTOM THE INVESTMENTS THAT THE PARK DISTRICT HAS.

SO STARTING AT THE TOP OF THAT PAGE, WE'RE LOOKING AT OUR LIQUID INVESTMENTS.

SO THOSE ARE FUNDS THAT ARE HELD EITHER IN CASH OR EASILY CONVERTIBLE TO CASH.

AND A COUPLE OF THINGS TO POINT OUT HERE.

THE HIGH LEVEL, OUR LIQUIDITY PORTFOLIO IS 17.6 MILLION LOWER THAN IT WAS AT THE END OF 2023.

AND THAT HAPPENS EVERY YEAR.

WE HAVE A MAJOR DRAWDOWN ON OUR FUNDS AS WE'VE RECEIVED A MAJOR PROPERTY TAX INSTALLMENT AT THE END OF DECEMBER.

SO WE'RE DRAWING DOWN ON THOSE FUNDS IN THE FIRST QUARTER.

WE'LL GET OUR NEXT LARGE INSTALLMENT IN APRIL.

AND THEN MOVING A LITTLE BIT FURTHER DOWN ON THE PAGE NOW TALKING ABOUT OUR INVESTED SECURITIES.

AND THIS IS WHAT PFM MANAGES FOR US.

AND SO JUSTIN WILL GET INTO MORE DETAIL HERE.

BUT SOME ACTION THAT WE TOOK IN THE FIRST QUARTER WAS TO INVEST A LITTLE BIT MORE IN THE SHORT AND MID TERM SECURITY SO THAT WE COULD LOCK IN THE HIGHER RATES AS WE'RE ANTICIPATING SOME DECLINE IN RATES IN THE COMING MONTHS AND YEARS.

SO WE'VE GOT AN OVERALL INCREASE IN THE INVESTED SECURITIES, AND THOSE ARE MOSTLY IN TREASURIES AND CORPORATE BONDS AND NOTES.

AND THEN LASTLY, DOWN AT THE BOTTOM OF THE PAGE LOOKING AT THOSE FUNDS THAT ARE HELD IN TRUST.

AND THOSE ARE OUR PROJECT BOND FUNDS AND OUR DEBT SERVICE FUNDS.

AND YOU CAN SEE THAT WE WERE DRAWING DOWN ON THE FUNDS IN QUARTER ONE.

SO WE'RE REIMBURSING OURSELVES FOR PROJECT EXPENDITURES AND DEBT SERVICE FUNDS.

WE HAD A DEBT SERVICE PAYMENT IN MARCH, SO THE BALANCES THERE DECLINED SLIGHTLY AS WELL.

AND SO I'M GOING TO TURN IT OVER TO JUSTIN NOW.

BUT AT THE END OF HIS PRESENTATION WE CAN TAKE QUESTIONS.

AND THEN WE DO NEED A ACTION TO RECOMMEND THIS TO THE FULL BOARD OF DIRECTORS.

SO I'LL DROP MY PRESENTATION AND TURN IT OVER TO JUSTIN.

DO YOU KNOW HOW TO PULL UP YOUR.

OKAY. HI, EVERYONE.

MY NAME IS JUSTIN RESUELLO AND I'M WITH PFM ASSET MANAGEMENT.

I AM TRYING TO PULL UP MY PRESENTATION HERE TO MAKE SURE THAT WE'RE FULL SCREEN.

HOW DO I DO THIS?

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THERE WE GO. ALL RIGHT.

SO HOPEFULLY EVERYONE.

OH. I SEE GREAT.

THANK YOU. YEP.

PERFECT. THANK YOU SO MUCH.

ALL RIGHT. WONDERFUL. THANK YOU.

ALL RIGHT. GREAT. SO EVERYONE SHOULD NOW SEE THE PRESENTATION FROM US DATED QUARTER END MARCH 31, 2024.

I'LL GO THROUGH A FEW SLIDES AND I INVITE QUESTIONS AS WE GO THROUGH THE PRESENTATION.

SO WITH RESPECT TO CURRENT MARKET THEMES AT A HIGH LEVEL, THIS SLIDE SHOULD LOOK PRETTY FAMILIAR.

THE ECONOMY CONTINUES TO BE QUITE STRONG.

IT CONTINUES TO SHOW ECONOMIC RESILIENCE.

IN SUMMARY, THERE ARE A COUPLE OF FACTORS OR THREE FACTORS REALLY THAT ARE DRIVING THINGS.

IT'S THE LABOR MARKET THAT'S SHOWING REALLY IMPRESSIVE JOB GAINS.

AND INITIAL INITIAL JOBLESS CLAIMS HAVE BEEN TRENDING TOWARD 26 MONTH LOWS.

THE UNEMPLOYMENT RATE HAS ALSO BEEN BELOW 4% NATIONALLY FOR 26 CONSECUTIVE MONTHS, AND ALL OF THIS SUPPORTS WAGE GROWTH AND CONSUMER SENTIMENT THAT ENCOURAGES SPENDING THAT DRIVES GDP GROWTH.

THE COMPLICATIONS WITH ALL OF THIS, AND I'M SURE YOU ALL SEE THIS IN THE NEWS, REALLY IS RECENT CPI READINGS.

SO BEGINNING IN JANUARY, FEBRUARY AND MARCH EACH MONTH, THERE HAVE BEEN INCREASES IN INFLATION.

AND IN THE MOST RECENT MONTH OF APRIL, DATA CAME OUT SHOWING SLIGHT DECREASE IN CPI TO 3.4%.

SO THAT'S A GOOD SIGN I THINK FOR THE FED AS IT THINKS ABOUT POTENTIALLY DECREASING RATES.

AS WE LOOK TO BLOOMBERG DATA AND FUTURES CURVES.

THOSE ARE NOW PROJECTING 1 TO 2 CUTS FOR THE YEAR INSTEAD OF 2 TO 3 CUTS THAT WE THOUGHT ABOUT AT THE BEGINNING OF THE YEAR AND EVEN SIX CUTS AT THE END OF LAST YEAR.

SO YOU KNOW, WITH THAT SAID, I'LL TURN TO THE NEXT SLIDE, AND THAT'LL TALK TO MORE OF THE DATA THAT I WANT TO SPEAK TO YOU.

BUT YIELDS AND PURCHASES, THERE'S STILL STRONG DEMAND FOR FIXED INCOME ASSETS IN THE MARKET.

AND THIS IS REALLY A GREAT TIME TO BE PURCHASING BONDS FOR THE DISTRICT'S INVESTMENT PORTFOLIO.

HERE YOU CAN SEE THE INFLATION MOVING SIDEWAYS.

WE WERE AT A POINT, CALL IT IN MID 2022 WHERE THERE WERE LONG LINES AT COSTCO, GAS FOR FUEL INFLATION PRECIPITOUSLY MOVED DOWNWARD TOWARD JUNE OF 2023.

AND IT'S BEEN KIND OF BOUNCING AROUND AND TOWARD THE FAR RIGHT END OF THE CHART, YOU CAN SEE CPI FORECAST WAS TRENDING UPWARD, BUT IN FACT ACTUAL CPI, ACTUAL INFLATION WAS ABOVE FORECAST.

AND THAT'S REALLY WHAT KIND OF TROUBLED THE MARKETS AND CAUSED INTEREST RATES TO BOUNCE A BIT HIGHER IN THE LAST QUARTER.

EVEN NOW IN THE LAST YEAR OR IN THE LAST MONTH, PARDON ME, IN APRIL, NOT SHOWN ON THIS CHART.

IT TRENDED SLIGHTLY LOWER TO 3.4%.

WHAT DOES THAT ALL MEAN FOR RATES? YOU KNOW, AT THE END OF THE DAY WE'RE LOOKING AT HERE TWO YEAR AND TEN YEAR TREASURY YIELDS.

IN THE QUARTER THOSE ROSE RIGHT AS INFLATION SHOWED SIGNS OF CONTINUED INCREASE TREASURY YIELDS CONTINUED TO RISE AS WELL.

IN FACT TODAY THE TWO YEAR IS AT 487.

SO THAT'S ABOUT 25 BASIS POINTS ABOVE WHERE WE ENDED THE QUARTER.

AND THE TEN YEAR IS AT 424.

SO SLIGHTLY LOWER, ABOUT TEN BASIS POINTS LOWER THAN WHERE WE ENDED THE QUARTER.

THE TREASURY YIELD CURVE CONTINUES TO BE INVERTED.

AND AS DEB SAID, YOU KNOW, WE AS THE DISTRICT IS PARKING MONEY A BIT FURTHER OUT ON THE YIELD CURVE, THERE'S STILL NICE OPPORTUNITIES FOR SHORT TERM OVERNIGHT MONIES FOR THE DISTRICT IN INVESTING SHORT TERM CASH.

BOTTOM LINE ON THIS CHART, I GUESS I SHOULD AFFIRM HERE THE FED JAY POWELL CHAIRMAN POWELL THEY'VE TALKED ABOUT PATIENCE.

RIGHT. THEY'RE TRYING TO ENCOURAGE THE MARKET TO REMAIN PATIENT AS THEY WORK TOWARD POTENTIAL FOR RATE CUTS.

HERE ON THIS SLIDE YOU'LL SEE TOTAL RETURNS FOR FIXED INCOME ASSETS.

YOU'LL SEE FIXED INCOME DECLINE BY TWO BASIS POINTS.

BUT THE DISTRICT ISN'T ONLY INVESTED IN U.S.

TREASURIES. RATHER IT ALSO HAS AGENCY PAPER THAT'S MORTGAGE AND ASSET BACKED SECURITIES THAT ARE BACKED BY FEDERAL GOVERNMENT PLEDGE, AS WELL AS ABS AND CORPORATE SECURITIES, ALL GENERATING SOLID RETURNS FOR THE QUARTER AND OVER THE PAST YEAR YOU CAN SEE NICE ONE YEAR RETURNS CONTINUE.

THESE ARE THE DATA THAT THE FED RELEASES EACH MEETING AND OR EVERY CALL IT OTHER MEETING.

AND YOU'LL SEE THAT THE FED HAS REVISED A LOT OF ITS PROJECTIONS UPWARD MORE CONSERVATIVELY.

SO GDP WHILE THAT IS SHOWING INCREASE.

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UNEMPLOYMENT INCREASED IN 2025 REVISED UPWARD.

PCE INFLATION THAT'S THE LOWER LEFT CHART THAT'S SHOWING INCREASES HIGHER FOR LONGER INFLATION.

AND THEN HERE ON THE BOTTOM RIGHT FED FUNDS ALSO SHOWING HIGHER FOR LONGER.

IN FACT, 2025 AND 2026 CONTINUED INCREASES OR ELEVATED RATE ENVIRONMENT FOR THE ECONOMY AND MARKETS.

SO WITH THAT SAID, BEFORE I JUMP INTO THE PORTFOLIO REVIEW, ARE THERE ANY QUESTIONS ABOUT HOW THE MARKET PERFORMED IN THE QUARTER OR THE ECONOMY? OKAY, GREAT. THANK YOU SO MUCH.

SO HERE YOU'LL SEE THAT WE PRODUCE A CERTIFICATE OF COMPLIANCE THAT LETS YOU AND ANYONE ELSE VIEWING THIS REPORT KNOW THAT THE PORTFOLIO WAS IN COMPLIANCE EACH DAY DURING THE QUARTER.

THE TOTAL PROGRAM GREW TO 160.1 MILLION FROM 149.7 MILLION IN THE LAST QUARTER.

THAT'S OVER $10 MILLION.

DURATION WAS 2.50, SLIGHTLY LONGER THAN LAST QUARTER.

AS DEB SAID, WE'RE TRYING TO PARK MONEY A LITTLE FURTHER OUT ON THE YIELD CURVE TO LOCK IN MORE SUSTAINABLE COUPON YIELDS OR COUPON AND INTEREST PAYMENTS FOR THE DISTRICT.

YIELD THAT COST THAT'S THE DISTRICT'S EARNINGS RATE LOOKING FORWARD, THAT WAS 3.97 AND IMPROVED FROM 3.67 AT THE BEGINNING OF THE QUARTER.

CREDIT QUALITY FOR THE PORTFOLIO CONTINUES TO BE QUITE HIGH, WITH 64% OF THE PORTFOLIO RATED DOUBLE A AND HIGHER, AND SECTOR ALLOCATIONS ALSO ARE THE SAME COMPARED TO LAST QUARTER.

PORTFOLIO ACTIVITY WE'VE HAD QUITE A BIT OF MANAGEMENT IN THE PORTFOLIO.

AS YOU'RE AWARE THIS IS ACTIVELY MANAGED.

IT'S TRADED VERY REGULARLY AND YOU'LL SEE ABOUT 27 MILLION IN NEW PURCHASES MADE, INCLUDING TREASURIES AGENCY, CMBS, ABS AND CORPORATES, AND ABOUT 14 MILLION IN SALES MADE.

DETAIL FOR THOSE SPECIFIC TRANSACTIONS IS FOUND ON THE LATER SLIDES AND DETAIL PAGES IN THE PRESENTATION.

PORTFOLIO PERFORMANCE.

YOU KNOW, THIS IS PROBABLY THE PUNCHLINE SLIDE FOR US AT PFM.

YOU CAN SEE THAT THE DISTRICT EARNED ABOUT $1.3 MILLION IN INTEREST AND $432,000 IN TOTAL DOLLAR RETURN, DUE TO AN $888,000 CHANGE IN MARKET VALUE.

RELATIVE TO BENCHMARK THAT WAS OUTPERFORMANCE OF 30 BASIS POINTS, AND WE GENERATED 28 FOR THE DISTRICT, WHEREAS THE BENCHMARK UNDERPERFORMED AND LOST ABOUT TWO BASIS POINTS.

ALL IN FOR CONSTITUENTS ON THE CALL.

AND THE BOARD WERE PLEASED TO REPORT THAT OVER THE PAST QUARTER, WE'VE GENERATED 1.2 MILLION IN THE PAST QUARTER AND 3.1 MILLION IN THE LAST YEAR AND OVER THE PAST TEN YEARS, 17.4 MILLION ADDED TO THE DISTRICT'S CORPUS.

ONE OTHER FACTOR, ACTUALLY, I SHOULD PAUSE HERE BEFORE I MOVE INTO THE ESG DISCUSSION.

ARE THERE ANY QUESTIONS ABOUT THE INVESTMENT PORTFOLIO AND PERFORMANCE? NOT ABOUT THE PERFORMANCE, BUT THE CALCULATION FOR THE BASE POINTS.

IS THAT FROM QUARTER TO QUARTER? YES.

SO DIRECTOR ROSARIO, WHEN YOU SEE THE BASIS POINT THE PERCENTAGE RETURNS HERE ON THIS SLIDE NUMBER TEN, THOSE ARE CALCULATED FOR THE INTERIM PERIOD THAT IS ON THAT CHART.

SO THE THREE MONTH PERFORMANCE IS .28%, WHEREAS OVER THE PAST YEAR IT IS 3.56.

AND THEN SO ON AND SO FORTH FOR EACH PERIOD THAT'S PRESENTED ON THIS SLIDE.

OKAY. GREAT. YEAH.

I UNDERSTAND INTEREST RATES ARE THEY'RE CALCULATED FROM ONE APPOINTMENT IN THE BEGINNING POINT AND THEN THE END AND SUBTRACTED.

AND THEN THEY MULTIPLY BY 100 TO GET RID OF THE DECIMAL POINT.

SO I UNDERSTAND THAT PART.

I JUST WANTED TO KNOW THE INTERIM.

SO YEAH. I APOLOGIZE THAT I DON'T HAVE INTERIM MONTHLY PERFORMANCE, FOR EXAMPLE, AT THIS POINT.

BUT I COULD FOLLOW UP WITH DEB IF THAT'S SOMETHING THAT YOU'RE LOOKING FOR.

OKAY. GREAT. THANK YOU.

OKAY. ALL RIGHT.

SEEING NO OTHER QUESTIONS, I'LL MOVE ON TO THE ESG OVERVIEW.

YOU KNOW, THIS IS ONE AREA OF THE DISTRICT'S MANDATE THAT HELPS THE INVESTMENT PORTFOLIO.

AND WE'RE PLEASED TO SUPPORT, YOU KNOW, IT'S CONSIDERATIONS WHEN IT THINKS ABOUT ENVIRONMENTAL, SOCIAL AND GOVERNANCE CONCERNS WITH RESPECT TO THE INVESTMENT PORTFOLIO.

SO YOU CAN SEE HERE THE RISK COMPOSITION OF THE PORTFOLIO MEASURES ECONOMIC VALUE AT RISK BASED ON ESG FACTORS.

[00:15:02]

AND I'M DELIGHTED TO REPORT THIS QUARTER WITH RESPECT TO HOLDINGS FOR THE DISTRICT, 70 OF 76 ISSUERS ARE NOW RATED WITHIN THE INVESTMENT PORTFOLIO, REPRESENTING 98 MILLION, AND THAT IMPROVED FROM LAST QUARTER.

69 OF 55, OR ABOUT 94 MILLION.

SO MORE OF THE PORTFOLIO IS NOW COVERED BY THE ESG POLICY.

AT THE END OF THE QUARTER, GENERAL MOTORS WAS THE SINGLE HIGH RISK CATEGORY HOLDING, AND THAT ACCOUNTED FOR LESS THAN 1% OF THE PORTFOLIO. IT WAS IN COMPLIANCE WITH THE POLICY AT THE TIME OF PURCHASE, AND SINCE AT THE END OF THE QUARTER, THE RISK RATING FOR GM DECREASED TO 29.9, AND THAT'S NOW RATED MEDIUM AND IS NO LONGER IN THE HIGH RANGE.

MORE NOTABLY FOR THE DISTRICT'S PORTFOLIO OVERALL, THE PORTFOLIO ESG RISK RATING IMPROVED TO 20.5.

LAST QUARTER IT WAS 20.3, SO IT'S MOVING CLOSER TO THAT LOW RISK RATING SCORE.

WOULD WE EXPECT THAT THOSE RATINGS TO CONTINUALLY RISE AT VARIOUS RATES OF IMPROVEMENT? YEAH. NO THAT'S A GREAT QUESTION DIRECTOR MERCURIO.

SO WITH RESPECT TO THE ESG RISK RATINGS, BECAUSE THE PORTFOLIO IS PRETTY SHORT IN DURATION AND ABOUT TWO YEARS, THIS SCORE WILL KIND OF BOUNCE AROUND. SO IT MAY RISE IN CERTAIN QUARTERS.

I BELIEVE LAST QUARTER I BELIEVE LAST QUARTER IT ROSE SLIGHTLY.

WHEREAS THIS QUARTER IT FELL.

AND WE'LL CONTINUE TO MONITOR IT AND REPORT BACK ON THAT.

BUT BECAUSE OF THE DURATION, YOU'LL SEE THAT SCORE BOUNCE AROUND FROM TIME TO TIME.

BUT IN THE LONG TERM, THOUGH, IT DOES CREEP UP.

YEAH. OH SO VERY LONG TERM FURTHER OUT.

YOU KNOW I WOULD HOPE SO.

I MEAN, I THINK THAT, YOU KNOW, A LOT OF COMPANIES HAVE BEEN COMMITTED AND HAVE PRONOUNCED THEIR, YOU KNOW, ESG COMMITMENTS, SOCIAL RESPONSIBLE COMMITMENTS, IMPACT COMMITMENTS IS THE KIND OF NEW LINGO THAT FOLKS ARE LOOKING TO.

SO I WOULD ANTICIPATE THAT THESE RATINGS WOULD IMPROVE OVER THE LONG RUN.

OKAY. THANKS.

THANKS. SURE.

SO WITH THIS, WOULD YOU SAY THAT IN REGARDS TO THE RISK RATING, IS THAT PRETTY EVENLY BALANCED ACROSS THE ENVIRONMENTAL, SOCIAL AND GOVERNANCE CATEGORIES OR IS IT JUST AN OVERALL COMPANY PERFORMANCE? AND MORE SPECIFICALLY, I'M THINKING ABOUT THERE'S A PRETTY LARGE COMPANY, I'D SAY, HERE IN THE EAST BAY WHERE THERE'S SOME CONCERNS ABOUT ACCOUNTING PRACTICES.

AND SO I THINK THAT THAT WOULD INCREASE THE POTENTIAL RISK AND WOULD PROBABLY FALL UNDER THE GOVERNANCE CATEGORY.

SO I'M JUST CURIOUS HOW THESE CALCULATIONS ARE MADE FOR THE ESG RISK.

RIGHT. NO THAT'S ANOTHER GREAT QUESTION.

YEAH. WITH RESPECT TO ENVIRONMENTAL SOCIAL GOVERNANCE, THERE ARE CERTAIN RATINGS, BUT THEY'RE APPLIED CONSISTENTLY FOR EACH TYPE OF COMPANY, SO THEY DON'T CHANGE, FOR EXAMPLE, FROM, SAY, YOU KNOW, AIRLINES TO AUTOS TO, YOU KNOW, CONSUMER RETAIL, THOSE CATEGORIES GENERALLY REMAIN THE SAME FOR ALL OF THOSE SORTS OF SECTORS OF BUSINESS.

AND THEN I GUESS IN TERMS OF GOVERNANCE, THERE'S A PRETTY STRONG COMPONENT IN THAT RISK RATING THAT'S LOOKING AT THE GOVERNANCE TO MAKE SURE THAT GOOD ACCOUNTING PRINCIPLES AT THAT COMPANY ARE BEING FOLLOWED.

ABSOLUTELY. AND WHEN WE LOOK AT A LOT OF THESE SORTS OF FACTORS, ANOTHER FACTOR THAT THAT YOU MAY BE ALSO BE THINKING ABOUT IS, FOR EXAMPLE, LABOR NEGOTIATIONS AND HOW EMPLOYEES ARE TREATED. AND THERE ARE A FEW MORE SLIDES ON THAT IN THE PACKET AS WELL AS OH, GEEZ, IT'S ESCAPING ME RIGHT NOW.

BUT CONTRACT NEGOTIATIONS, FOR EXAMPLE, WITH VENDORS AND SUPPLIERS FOR CERTAIN COMPANIES.

SO, YOU KNOW, IT'S LOOKING MUCH MORE THE GOVERNANCE FACTORS ARE EXPLORED, NOT JUST INTERNAL FACTORS THAT A COMPANY MIGHT HAVE MOST CONTROL OVER ITSELF, BUT ALSO EXTERNAL FACTORS THAT IT'S ENFORCING UPON, YOU KNOW, OTHERS BEYOND ITS COMPANY.

AND YOU MENTIONED GENERAL MOTORS, AND I'M THINKING OF ANOTHER AUTOMOBILE COMPANY THAT MAY BE HAVING A LARGE RECALL.

AND SO THAT WOULD PROBABLY ALSO BE SOMETHING THAT WOULD GET POTENTIALLY FACTORED INTO THE RISK.

ABSOLUTELY. AND THAT WAS ONE OF THE TALKING POINTS.

YOU KNOW, YOU TOOK THE WORDS RIGHT OUT OF MY MOUTH.

GM IS RECALLING A BUNCH OF VEHICLES.

AND THAT'S ONE OF THE BIG FACTORS THAT DROVE ITS RISK RATING SCORE HIGHER.

SO YOU KNOW, THOSE ARE GOVERNANCE FACTORS THAT CERTAINLY IMPACT THE ESG SCORE FOR EACH COMPANY.

EXCELLENT. THANK YOU. YEAH.

JUST TO FOLLOW UP, SINCE DIRECTOR SANWONG WENT THERE, I'M JUST CURIOUS BECAUSE I WAS I WAS REALLY CURIOUS ABOUT WALMART AND YOU KNOW, ITS ALLEGED THAT, YOU KNOW, THEY'RE SAYING A LOT OF THEIR EMPLOYEES TO A LOT OF THEIR EMPLOYEES ARE ON PUBLIC ASSISTANCE.

[00:20:03]

AND COSTCO HAS A HIGHER.

WALMART'S ESG SCORE IS ACTUALLY HIGHER THAN COSTCO.

AND SO HOW DOES THAT I MEAN, RIGHT NOW COSTCO, THEIR STOCKS ARE GOING THEY'RE LIKE OUTPERFORMING THE S&P.

BUT HOW DOES THAT WORK? DO YOU KNOW WHAT WHY COSTCO'S WOULD BE HIGHER THAN WALMART WHEN WALMART HAS THESE ALLEGED YOU KNOW? RIGHT NO THAT'S ANOTHER GREAT QUESTION.

YOU KNOW, EACH COMPANY IS EVALUATED INDEPENDENTLY, RIGHT, WITH RESPECT TO ENVIRONMENTAL, SOCIAL AND GOVERNANCE FACTORS.

YOU KNOW, I THINK WITH RESPECT TO COSTCO, IT MIGHT BE MORE DOMESTICALLY FOCUSED, RIGHT.

YOU KNOW, AS YOU THINK ABOUT WHILE THEY DO HAVE CERTAIN LOCATIONS ABROAD, YOU KNOW I BELIEVE GENERALLY FROM WHAT I UNDERSTAND, THEY PAY HIGHER WAGES TO MANY OF THEIR EMPLOYEES COMPARED TO COMPETITORS LIKE WALMART.

WITH RESPECT TO RISK RATING WHEN YOU SAY RATED HIGHER, I ASSUME YOU MEAN THAT IT HAS LOWER.

HIGHER ESG SCORE THAN WALMART.

OH I SEE, YEAH. SO YOU KNOW, I'M NOT SURE THERE MIGHT BE OTHER FACTORS WITH RESPECT TO YOU KNOW, CALL IT THE SORT OF PRODUCT OFFERINGS OR THE NEGOTIATIONS IT HAS WITH SUPPLIERS THAT MIGHT ADVERSELY IMPACT THEM.

I KNOW WALMART HAS A PRETTY BIG ONLINE PRESENCE AS WELL RELATIVE TO COSTCO.

I'M NOT SURE HOW THAT MIGHT MEASURE.

BUT I CAN ALSO DIG INTO THAT A BIT FURTHER IN ADDITION TO THE INTERIM PERFORMANCE, TO SEE, YOU KNOW, WHY IT IS THAT COSTCO SPECIFICALLY HAS A HIGHER RISK RATING COMPARED TO WALMART, FOR EXAMPLE.

GREAT. THANK YOU. OF COURSE.

JUST I ALSO KNOW WALMART HAS A BIG EFFORT IN TERMS OF ENERGY EFFICIENCY AND, YOU KNOW, MINIMIZING WASTE.

AND I THINK THAT HELPS GIVE THEM A HIGHER ENVIRONMENTAL SCORE.

SO THERE'S ALSO SOME DIFFERENT VARIABLES AT PLAY IN TERMS OF THAT SCORING METHOD.

GREAT. NO THANK YOU. I YOU KNOW, I WAS TELLING DEB EARLIER, YOU KNOW, AS I THINK ABOUT THE DISTRICT, YOU ALL ARE SO THOUGHTFUL IN YOUR ESG IMPLEMENTATIONS COMPARED TO, YOU KNOW, OTHER CUSTOMERS I ALSO WORK WITH.

BUT SO I REALLY APPRECIATE THE CONVERSATION WE'RE HAVING HERE.

ON THE NEXT SLIDE, I'LL JUST QUICKLY TALK THROUGH INDUSTRY DIVERSIFICATION.

YOU'LL SEE THAT THERE ARE 18 DIFFERENT SECTORS AND INDUSTRIES THE PORTFOLIO IS INVESTED IN.

WE OVERLAY ESG RISK RATING VERSUS PORTFOLIO WEIGHTING.

IT SHOULDN'T BE A SURPRISE THAT PORTFOLIO WEIGHTING IS AND PORTFOLIO WEIGHTING BACK I'LL BACK UP.

PORTFOLIO WEIGHTING IS INDICATED BY THE BLACK DIAMONDS ON THE CHART.

IT SHOULDN'T BE A SURPRISE THAT BANKS ACCOUNT FOR THE LARGEST PORTFOLIO RATING, PRIMARILY BECAUSE THEY ISSUE A LOT OF MONEY INTO THE FIXED INCOME MARKETS MORE FREQUENTLY.

SO MANY OF THE DISTRICT'S HOLDINGS ARE HELD WITH BANKS.

YOU'LL SEE THAT THE BANK INDUSTRY'S RISK RATING IS 20.7 AS AND IS TOWARD THE LOWER END OF THE ESG RANGE COMPARED TO THE HIGHEST RISK RATING, WHICH IS AEROSPACE AND DEFENSE, WHICH IS 29.3.

BUT THAT ACCOUNTS FOR VERY LIMITED PORTFOLIO WEIGHTING OF AROUND 1%.

WITH RESPECT TO AUTOS THAT WE DISCUSSED EARLIER, SO MANY OF THEM ARE RATED IN THE MEDIUM CATEGORY, THAT INCLUDES FORD, BMW, NISSAN, HONDA, HYUNDAI AND TOYOTA.

THE ONLY ONE THAT'S RATED IN THE HIGH CATEGORY ON THIS CHART IS GM, AS WE DISCUSSED.

BUT IN THE QUARTER, THE CURRENT QUARTER, IT IS IMPROVED FROM HIGH RISK TO MEDIUM RISK.

DIRECTOR SANWONG DO YOU HAVE ANY QUESTIONS? I WAS JUST CURIOUS BECAUSE I KNOW WE HAVE ONE LARGE AUTOMOBILE FACTORY HERE IN THE EAST BAY IN FREMONT, TESLA.

DO YOU HAVE AN IDEA OF WHERE THAT MIGHT BE RISK RATING MIGHT BE.

I'M HONESTLY NOT SURE, BUT I CAN.

NO, NO, I APPRECIATE THAT.

AND I WILL. IN ADDITION TO COSTCO, I'LL BE SURE TO CIRCLE BACK ON TESLA IF I CAN.

I'M NOT SURE IF THEY'RE COVERED BY OUR RESEARCH, BUT I'LL BE SURE TO TRY TO DIG IN.

THEY TEND TO GET A PRETTY LOW ESG RATING, ACTUALLY.

BUT I'D JUST BE CURIOUS IN THIS RUBRIC WHERE THEY MIGHT FALL.

OKAY, GREAT. THANK YOU.

THANK YOU. HERE YOU CAN SEE THE SECTOR ANALYSIS WHICH SHOWS ESG RISK RATING BY SECTOR.

IN GENERAL YOU'LL SEE FEDERAL AGENCY AND MBS HAS A LOWER RISK RATING, WHEREAS ABS THOSE ARE SECTORS THAT INCLUDE AUTOS HAS A HIGHER RISK RATING.

FINALLY HERE YOU'LL SEE THAT CREDIT RISK RATING DISTRIBUTION.

SO ESG RISK VERSUS ACTUAL BOND CREDIT RISK CONSIDERED BY S&P RATINGS.

[00:25:04]

AND YOU'LL SEE THAT THE LOWEST 17.5 AVERAGE ESG RISK RATINGS ARE HELD WITHIN THE DOUBLE-A BOND RATING CATEGORY.

THIS IS THE LIST OF HOLDINGS WHICH WE HOPE IS HELPFUL.

YOU'LL SEE THESE ARE RANKED.

THESE ARE THE TOP 25.

SO THESE ARE THE LOWEST ESG RISK RATINGS.

THESE REPRESENT THE LOWEST UNMANAGED RISK.

AND ON THE NEXT PAGE YOU'LL SEE THE BOTTOM 25.

AND THAT REPRESENTS THE HIGHER RISK HOLDINGS IN THE PORTFOLIO.

AND YOU'LL SEE HERE GENERAL MOTORS HERE AT THE TOP.

JUST TO QUICKLY GO OVER SOME OF THOSE FACTORS.

SO WHILE THEY HAVE LARGE MARKET SHARE IN THE US AND CHINA, YOU KNOW, I THINK THERE THE MAIN CONSIDERATION IS THAT THEY HAVE A VERY LARGE GLOBAL WORKFORCE OF ABOUT 167,000 PEOPLE, AND THEY HAVE PRONOUNCED OR THEY HAVE SAID PUBLICLY THAT THEY ARE REDUCING THEIR INVESTMENTS TO ELECTRIFICATION AND AUTOMATED DRIVING.

SO GM HAS SHIFTED SOME OF ITS PRODUCT STRATEGY, AND THEREFORE A LOT OF EMPLOYEES AREN'T BEING RETOOLED FOR ADVANCED SORT OF MANUFACTURING TECHNIQUES WITH RELATED TO EVS AND THOSE PRODUCTS JUST HAVE BEEN DELAYED IN THEIR ROLLOUT AT THIS TIME.

SO THAT'S REALLY WHAT PUSHED GM HIGHER ON THE RISK RATING ASSESSMENT.

ARE THERE ANY QUESTIONS AFTER THESE REMARKS? I HOPE THAT THIS WAS HELPFUL.

OKAY. DIRECTOR SANWONG.

I RECALL LAST QUARTER I SHOULD BRING UP YOU ASKED ABOUT GREEN BONDS AND FINDING THOSE ISSUES FOR THE PORTFOLIO.

I DID SPEAK WITH A TRADER PORTFOLIO MANAGER ON THE ACCOUNT.

AND HE WANTED US TO RELAY THAT WE WILL WORK TO TRY TO FIND THOSE ISSUES.

UNFORTUNATELY, THEY'RE VERY LIMITED IN THE MARKET AT THIS POINT, AND IT'S OFTEN DIFFICULT TO GET ALLOCATION FOR THOSE ISSUES TO OUR PORTFOLIOS.

BUT WE ARE ON THE LOOKOUT AND WE DO MONITOR THOSE ACTIVELY.

SO WE KNOW THAT'S ON YOUR RADAR.

WE'RE TRYING HARD TO FIND THOSE ISSUES FOR THE PORTFOLIO.

THANK YOU. ABSOLUTELY.

SO WITH THAT SAID, YOU KNOW, THERE ARE A FEW MORE SLIDES HERE THAT I WON'T GO THROUGH.

JUST SOME NEWS ITEMS. YOU KNOW, WORK BENEFITS LIKE WE TALKED ABOUT YOU KNOW, HOW EMPLOYEES, HOW COMPANIES TAKE CARE OF THEIR EMPLOYEES.

AND THEN THE ADDITIONAL PORTFOLIO DETAILS, INCLUDING THE NEW PURCHASES AND CUSIP LEVEL DETAIL FOR THE PORTFOLIO.

BUT WITH THAT SAID, THAT WRAPS UP MY REMARKS FOR THE INVESTMENT PORTFOLIO.

EXCUSE ME. ANY OTHER FINAL QUESTIONS? NO. OKAY.

ALL RIGHT. IT'S A LOT, BUT IT'S GOOD TO HAVE IT.

THANK YOU. GREAT.

THANK YOU SO MUCH FOR YOUR TIME.

IT'S ALWAYS A PLEASURE TO BE WITH YOU ALL.

WE HAVE TO. SO.

YEAH, WE DO.

SO I NEED A MOTION HERE.

I'M HAPPY TO MAKE THE MOTION TO ACCEPT THIS REVIEW OF THE INVESTMENT REPORT AND THE MARKET.

I GUESS I'LL JUST MAKE ONE COMMENT.

I THINK THIS IS A REALLY GOOD COMPREHENSIVE REPORT FOR OUR INVESTMENTS.

I WOULD AND JUST KNOWING HOW, YOU KNOW, THE MARKETS HAVE BEEN PERFORMING IT MAKES SENSE THAT IT'S STRONG.

I DO THINK, THOUGH, THAT WHEN WE THINK ABOUT, YOU KNOW, OUR STRATEGIC PLANNING AND WHAT'S HAPPENING IN THE EAST BAY, I THINK SOME OF THIS IS HELPFUL.

BUT THEN THERE ALSO MAY BE SOME OTHER LOCAL ECONOMIC INFORMATION TO CONSIDER.

SO WHENEVER WE GET TO THAT POINT AND THAT'S SEPARATE FROM OUR FINANCE COMMITTEE, I DO THINK THAT'S IMPORTANT TO KEEP IN MIND THAT WHILE THE MARKETS MIGHT BE DOING WELL, THERE MAY BE SOME LOCAL THINGS HAPPENING IN THE EAST BAY.

ALL RIGHT. SECOND.

I'LL SECOND. ALL RIGHT. ALL IN FAVOR? AYE. ALL RIGHT.

IT PASSES. THANK YOU.

AND NO PUBLIC COMMENT.

THERE'S NO ONE HERE WITH PUBLIC COMMENT ON IT.

YES. THANK YOU.

APPRECIATE THAT.

WE GOT ALL WRAPPED UP IN THE INFO AND THEN WE GET, YOU KNOW.

YEAH. ALL RIGHT.

[b. Recommendation to Authorize Renewal of the East Bay Regional Park District’s Insurance Program]

AGENDA ITEM 4B, WHICH IS RECOMMENDATION TO AUTHORIZE RENEWAL OF THE EAST BAY REGIONAL PARK DISTRICT'S INSURANCE PROGRAM.

YES. GOOD MORNING.

MEMBERS OF THE BOARD. ALMA BALMES, RISK MANAGER FOR THE PARK DISTRICT HUMAN RESOURCES.

THIS IS A STANDARD ITEM WE BRING FORWARD EVERY YEAR, AND IT'S OUR INSURANCE RENEWALS FOR THE 2024, 2025 PERIOD.

[00:30:06]

SO THAT'S PUBLIC RISK INNOVATION SOLUTIONS AND MANAGEMENT FORMERLY KNOWN AS CSAC EIA.

AND THROUGH PRISM AND OUR PARTICIPATION IT'S COMPRISED OF OTHER PUBLIC AGENCIES ALMOST ALL OF THE COUNTIES LOTS OF CITIES, OTHER SPECIAL DISTRICTS. WE HAVE GENERAL LIABILITY PROPERTY, CYBER, WATERCRAFT, EXCESS WORKERS COMPENSATION, AIRCRAFT WITH DRONE ENDORSEMENT, AND WE ARE SELF-INSURED UP TO A CERTAIN AMOUNT.

SO THIS IS REALLY OUR EXCESS COVERAGE OR SMALL DEDUCTIBLES.

AND THEN OTHER COVERAGES WE HOLD THAT ARE SMALLER IS CRIME.

IT'S A $2 MILLION CRIME POLICY COVERED BY ALLIANT AND A SMALL BOND WITH WESTERN SURETY.

SO FOR OUR INSURANCE PROGRAM, WE CONTINUE TO HAVE FAVORABLE CLAIMS HISTORY, WHICH IS REALLY GOOD ON OUR PART IN TERMS OF MANAGING OUR SELF-INSURED BUDGET AND KEEPING OUR LOSSES WITHIN WHAT WE'RE ABLE TO ABSORB WITHIN THAT, AND REALLY TRYING TO REDUCE OUR LOSSES AND THE NEED TO TAP INTO EXCESS INSURANCE.

THE CALIFORNIA MARKET, AS YOU GUYS HAVE PROBABLY HEARD THROUGH OUR PRIOR PRESENTATION HERE AND ALSO IN THE MEDIA, THE CALIFORNIA MARKET IS JUST REALLY, REALLY DIFFICULT RIGHT NOW.

AND WE'RE SEEING THAT MANIFEST IN MANY DIFFERENT WAYS ESPECIALLY FOR OUR INSURANCE PREMIUMS. LIABILITY FOR US CLAIMS, OVERALL, THEY CLIMBED AN AVERAGE OF 16% BETWEEN 2018 THROUGH 2022.

AND THAT STILL CONTINUES TO TREND, AND IT'S WHAT WE CONSIDER TO BE THE NEW NORMAL, UNFORTUNATELY, IN WHAT WE'RE SEEING.

BASICALLY REPLICATE IN THE PRISM POOL AS WELL.

SO JUST SOME QUICK HIGHLIGHTS FOR THE CALIFORNIA INSURANCE LANDSCAPE, WHERE WE HAVE A VERY DISTRESSED AUTO INSURANCE MARKET.

WHEN THE PANDEMIC HIT BETWEEN 2020 AND 2021 AUTO ACCIDENTS ROSE ON AVERAGE, 25%.

AND WE DID HAVE STAY AT HOME ORDERS BUT A LOT OF PEOPLE WERE DOING ROAD TRIPS AND BEING OUT THERE ON THE ROAD TO TAKE TIME AND ENJOY THE OUTDOORS.

AND WE WERE AN ESSENTIAL SERVICE.

SO WE SAW THAT LOTS OF VISITORS IN OUR PARKS.

AND SO PREMIUMS INCREASED ABOUT 4.5%.

SO BETWEEN THOSE THINGS, IN TERMS OF PREMIUMS AND CLAIMS COSTS AND AUTO ACCIDENTS, THOSE TWO THINGS JUST DIDN'T TRACK.

THE CALIFORNIA INSURANCE COMMISSIONER DID FREEZE RATES DURING THE PANDEMIC TO HELP INSURERS MAINTAIN THEIR COVERAGES.

BUT BECAUSE OF THIS, WHAT WE WERE SEEING IS THAT INSURERS WERE SEEING ALL OF THE INCREASED CLAIMS COSTS THROUGH AUTO ACCIDENTS, BUT NOT BEING ABLE TO RECOVER THOSE COSTS THROUGH PREMIUMS. AND SO THIS HAS RESULTED IN THE EXITING OF THE INSURANCE MARKET FOR CALIFORNIA, FOR AUTO, FOR GEICO.

ALL STATE HAS LEFT LIBERTY MUTUAL.

WE'RE SEEING THE SAME THING ON THE PROPERTY HOMEOWNER'S SIDE WHERE COVERAGES CONTINUE TO BE DROPPED.

SO IN JULY 2024, IN A COUPLE OF MONTHS, STATE FARM, THERE'S GOING TO BE ABOUT 30,000 RESIDENCES WITH DROPPED COVERAGES.

THEN FOLLOWING MONTH LATER THIS YEAR, STATE FARM IS GOING TO ALSO DROP 42,000 OF THOSE WHO ARE COVERED FOR COMMERCIAL APARTMENT PROPERTIES AND BUSINESSES THAT ARE IN THAT LINE OF BUSINESS. AND THEN JUNE 2025, NATIONWIDE INSURANCE NEXT YEAR, NOT NATIONWIDE STATS, BUT JUST NATIONWIDE.

THE COMPANY IS GOING TO STOP RENEWING ALL PROPERTY AND HOMEOWNER POLICIES, AND THAT'S GOING TO AFFECT ABOUT A LITTLE OVER 20,000.

SO WITH THIS LARGE INSURERS, NOT JUST THE ONES THAT I'VE NAMED, HAVE ALSO STOPPED RENEWING.

AND IT REALLY LIMITS OUR OPTIONS FOR RESIDENCES AND BUSINESSES IN THE STATE OF CALIFORNIA.

I JUST I CAN. I JUST HAVE TO JUMP IN.

I HAVE TO REPORT ANECDOTALLY FROM MY FAMILY.

WE'RE GOING THROUGH SOMETHING RIGHT NOW WITH OUR CAR INSURANCE AND WE'RE GOING TO GET INSURANCE.

BUT MY GOSH, THE AMOUNT OF DOCUMENTATION THAT THEY REQUIRE.

FOR THREE CARS, I HAD TO SUBMIT 27 IMAGES OF DOCUMENTS AND PICTURES TO THEM TO VERIFY ALL DIFFERENT KINDS OF THINGS, CONDITION OF THE CAR MILEAGE.

YOU KNOW, THEY DON'T BELIEVE YOU ANYMORE ABOUT, YOU KNOW, REPORTING THE MILEAGE.

AND IT'S JUST INCREDIBLE.

AND SO I WAS ALMOST GOING TO BE LATE TODAY BECAUSE I HAD TO DO THIS LAST MINUTE THING AT HOME.

AND SO, I GUESS WE SHOULD BE THANKFUL THAT WE DO HAVE THE OPPORTUNITY TO CONTINUE WITH OUR INSURANCE COMPANY.

BUT SO THOSE THAT ARE GETTING THE BAD NEWS ISN'T JUST ALL THOSE WHO ARE GETTING CANCELED, BUT THEY'RE MAKING IT VERY DIFFICULT.

AND I QUESTION WHETHER SOME PEOPLE CAN EVEN DO IT, YOU KNOW, CAN PROVIDE ALL THAT INFORMATION, YOU KNOW? SO I KIND OF ALMOST FEEL LIKE IT'S A FILTER, RIGHT? YOU KNOW, THAT THEY'RE JUST THROWING UP.

I MEAN, YOU KNOW, COME ON, WHY DO YOU NEED ALL THIS INFORMATION? YOU NEVER ASKED FOR IT BEFORE.

RIGHT. NOW THEY DO. SO IT'S JUST BAD ALL THE WAY AROUND.

[00:35:05]

AND WHERE WE'RE SEEING THAT, TOO, IS THEY'RE DEPLOYING A LOT OF APPRAISERS OR ADJUSTERS OUT TO THE FIELDS WHERE BEFORE THAT DATA WAS JUST SELF-REPORTED.

THEY PLUGGED IT IN, AND NOW THEY'RE OUT THERE VERIFYING THAT WHAT YOU'RE REPORTING IN TERMS OF THE STRUCTURE ON YOUR HOME OR UPGRADES TO YOUR HOME.

PICTURES SOMETIMES DON'T DO JUSTICE, AND THEY'LL COME OUT TO VERIFY THOSE THINGS.

AND THAT'S WHAT THEY'RE LEANING ON TO SUPPORT, WHETHER THEY DROP COVERAGES OR ALLOW AN INSURER TO CONTINUE UNDER THEIR POLICIES.

DIRECTOR SANWONG. YEAH, YEAH.

AND I KNOW HERE AT THE PARK DISTRICT, WE HAVE A LOT OF AUTOMOBILE VEHICLES.

AND WE ALSO HAVE A LOT OF RESIDENCES.

HOW IS THIS CALIFORNIA LANDSCAPE POSSIBLY IMPACTING THOSE SPECIFIC RESIDENCES AND THEN ALSO THE VEHICLE PROGRAM THAT WE HAVE? THAT'S A GOOD QUESTION.

SO BECAUSE WE PARTICIPATE IN PRISM, OUR VEHICLES AND OUR RESIDENCES ARE ALL NAMED ON OUR PROPERTY SCHEDULE.

AND SO WHEN WE DO HAVE A LOSS, WE DO HAVE THAT PROTECTION THROUGH THE POOL.

PRISM IS A VERY, VERY LARGE SECURE POOL.

AND WE'VE WE'VE KIND OF TALKED ABOUT WHETHER WE EXPLORE OTHER RISK SHARING POOLS OR JPAS THAT MIGHT BE ABLE TO HAVE US LEAVE PRISM AND MAYBE THINK ABOUT WHETHER THERE'S BENEFIT TO DOING THAT.

BUT THE INSTABILITY IN THE MARKET RIGHT NOW IS WE HAVE A GOOD, HEALTHY RELATIONSHIP WITH PRISM AND LOTS OF RESOURCES, AND SO WE'VE BEEN ABLE TO LEAN ON THEM THROUGH THE YEARS AS LONG AS WE'VE BEEN WITH THEM.

AND SO THAT WILL CONTINUE TO HAVE COVERAGE THROUGH PRISM.

YEAH. ALL RIGHT.

SO JUST A QUICK OVERVIEW OF OUR PROPERTY PROGRAM.

WE ARE SELF-INSURED UP TO $25,000.

SO IF THERE IS A PROPERTY THAT MIGHT BE A TOTAL LOSS OR SOME PARTIAL LOSS WHERE WE KNOW REPAIRS WILL BE IN EXCESS OF $25,000, IT'S OUR OPPORTUNITY TO PAY THAT DEDUCTIBLE AND HAVE THAT HELP THROUGH THE PROPERTY PROGRAM.

IT REALLY IS KIND OF WEIGHING WHAT THE BENEFIT IS.

AND IN TERMS OF US BEING ABLE TO ABSORB ANY LOSSES AND REPAIRS THROUGH OUR OWN BUDGET OR WHETHER WE NEED TO, WE TRY TO KEEP THOSE CLAIMS REALLY, REALLY LOW.

FOR THAT REASON. AND WHAT WE'RE SEEING IN TERMS OF THEM REALLY SCRUTINIZING HOW MANY CLAIMS AND THE SEVERITY OF CLAIMS THAT ARE BEING SUBMITTED BY PUBLIC AGENCIES FOR RECOVERY. WE DO SEE AN INCREASE FROM THE PRIOR YEAR OF ABOUT 30% FOR PROPERTY.

THIS IS JUST A RECAP OF OUR PRIOR LOSSES OVER THE LAST FOUR YEARS.

AND THINGS THAT WE'VE BEEN ABLE TO RECOVER IN TERMS OF COSTS TO SUPPORT US REBUILDING OR NEW CAPITAL PROJECTS AND GETTING BACK TO PRE-DISASTER STATE OR BETTER, THE 2023 WINTER STORMS WE'RE STILL WORKING THROUGH THAT IN REAL TIME, BUT THE PRISM POOL OVERALL FOR PUBLIC AGENCIES WAS A COLLECTIVE 70 MILLION AND GROWING.

WE'RE STILL WORKING THROUGH THAT.

AND THEN CALIFORNIA OVERALL WAS ABOUT OVER A BILLION ESTIMATED IN THOSE 2023 WINTER STORMS OVER THE PAST YEAR.

WE WE WORK REALLY CLOSELY WITH DECO TO DETERMINE WHAT OUR NEW FINISHED, COMPLETED CAPITAL PROJECTS AND ADD THOSE TO OUR POLICIES.

IT'S OUR OPPORTUNITY TO REALLY EVALUATE WHAT'S WORTH ADDING TO OUR PROPERTY PROGRAM, AND MAYBE PAYING AN ADDITIONAL COST IN THE PREMIUM, OR WHAT WE MIGHT BE ABLE TO JUST ABSORB, NOT PUT IT ON THE PROPERTY SCHEDULE AND MANAGE THAT THROUGH OUR SELF-INSURED BUDGET.

SO WE HAVE CONTRA LOMA, NORTH AND SOUTH DOCKS, COYOTE HILLS ENTRY KIOSK, OBSERVATION DECKS AND RESTROOMS, DEL VALLE WEST RESTROOM, SIBLEY PINEHURST PEDESTRIAN-VEHICLE BRIDGES.

I THINK THERE ARE A COUPLE OR A FEW SUNOL PLEASANTON RIDGE TYLER RANCH STAGING AREA RESTROOM WHICH IS NEW AND ALSO ADDING THE NEW LEASED HANGARS AND OFFICES IN LIVERMORE FOR OUR POLICE AIR SUPPORT UNIT.

OVERVIEW ON THE GENERAL LIABILITY PROGRAM.

IT'S REALLY DRIVEN BY SOCIO ECONOMIC INFLATION.

THE FACTORS THAT WE'RE SEEING IS FOR COURTS AND JURIES, THEY TEND TO LEAN IN THE FAVOR OF THE PLAINTIFF AND A LOT OF HIGHER PAYOUTS IN TERMS OF JURY VERDICTS.

AND ALTHOUGH THAT MIGHT NOT BE OUR DIRECT EXPERIENCE, IT'S SOMETHING THAT'S KIND OF RIPPLING IN THE POOL, AND WE SEE IT KIND OF SECOND HAND IN TERMS OF THE EFFECT.

AGAIN, US LIABILITY COSTS CONTINUE TO RISE ABOUT 16% OVER THE LAST FIVE YEARS, AND THAT CONTINUES TO GROW.

JUST TO GIVE YOU A SENSE, PRISM, SINCE 2013-14, WHICH IS ABOUT TEN YEARS AGO, LIABILITY CLAIMS USED TO RESOLVE ON AVERAGE 5 TO 10 MILLION.

AND NOW IT'S 20 TO 30 MILLION.

SO EVEN THEN, YOU CAN SEE HOW MUCH SOMETHING USED TO SETTLE OUT TEN YEARS AGO VERSUS WHAT WE'RE SEEING NOW, HOW INSURERS ARE GETTING AROUND THIS AND TRYING TO BE CREATIVE IS THEY'RE REDUCING CAPACITY IN TERMS OF WHAT INSURANCE OR WHAT LIMITS THEY'RE WILLING TO WITHSTAND FOR LOSSES.

[00:40:02]

SO IF WE HAVE MULTIPLE LOSSES IN A SINGLE PERIOD, THEY'RE GOING TO CAP WHAT THAT MAXIMUM IS AS OPPOSED TO JUST CONTINUING TO PAY FOR MULTIPLE LOSSES NO MATTER WHAT THE AMOUNT IS IN A SINGLE YEAR.

AND THEN WE'RE ALSO SEEING DRAMATICALLY INCREASING RATES.

SO HERE IS A SNAPSHOT OF ALL OF OUR INSURANCE PREMIUMS. WE HAVE TO DO A LITTLE BIT OF MATH, BECAUSE THE WAY THAT OUR POLICIES RUN OUR CALENDAR IS TRADITIONAL FISCAL YEAR, AND WE OPERATE ON CALENDAR.

AND SO THESE ARE OUR ACTUAL LET ME MOVE THIS BAR.

THESE ARE OUR ACTUAL PREMIUMS FROM 2023, 2024.

THAT'S A LITTLE UNDER 4.5 MILLION.

AND WHAT WE'RE ESTIMATING FOR THIS YEAR WAS A LITTLE OVER 6 MILLION.

SO THIS IS A NET CHANGE OF ABOUT 1.5 MILLION.

AND WHERE WE'RE SEEING MOST OF THAT, MOST OF THE DRIVERS IS GENERAL LIABILITY PROPERTY AND WORKERS COMPENSATION, WORK COMP, MEDICAL MANAGEMENT, MEDICAL CARE COSTS.

THEY'RE JUST HIGH RIGHT NOW.

AND MANAGING CLAIMS AND BEING ABLE TO GET THE CARE THAT WE NEED FOR OUR EMPLOYEES, AS WELL AS JUST THE AGING FACTOR AND THOSE THAT HAVE MAYBE RETIRED OR HAVE LEFT THE DISTRICT, BUT THEY HAVE OPEN CLAIMS FOR FUTURE MEDICAL CARE.

WE'RE SEEING THAT AS WELL.

THIS IS A TOTAL OF ABOUT 26% AGGREGATE BETWEEN ALL OF THE DIFFERENT COVERAGES THAT WE HAVE.

I WILL SHARE A POSITIVE DEVELOPMENT END OF LAST WEEK.

WE WERE CONTACTED BY PRISM BECAUSE WHAT THEY TYPICALLY DO IS THEY HAVE A SURCHARGE FOR PREMIUMS THAT THEN GETS REALLOCATED BACK TO PUBLIC AGENCIES THAT PARTICIPATE IN THE POOL WITH FAVORABLE LOSS EXPERIENCE.

AND SO BECAUSE OF THAT AND OUR ABILITY TO MANAGE THINGS WITHIN OUR SELF-INSURED RETENTION LIMITS, WE GOT REVISED ESTIMATES, WHICH IS NOT IN YOUR STAFF REPORT.

AND WE'RE SEEING SOMETHING THAT WAS 24% CHANGE FOR GENERAL LIABILITY DOWN TO 6.5%.

SO IT'S A SAVINGS OF ABOUT HALF $1 MILLION.

AND IT SPEAKS TO WHAT WE'VE BEEN ABLE TO DO IN TERMS OF CONTROLLING THOSE LOSSES AND IMPLEMENTING STRATEGIES TO GET AHEAD OF WHERE WE SEE THOSE EXPOSURES. AND WE'RE NOW DOWN TO A TOTAL AGGREGATE OF 19.5% TOTAL INCREASE AS OPPOSED TO THE 26%. THE ESTIMATES THAT YOU SEE HERE IN THE SECOND COLUMN, THAT TOTAL 5.5 ARE REALLY HIGH END ESTIMATES.

THEY KIND OF GIVE US A RANGE AND THEN WE FALL SOMEWHERE IN THE MIDDLE.

SO EVEN THE 1 MILLION CHANGE AMOUNT IS LIKELY TO BE EVEN LESS THAN WHAT YOU SEE HERE.

SO LOOKING FORWARD, THE STATE OF THE INSURANCE MARKET IS A LOT OF THE SAME.

BEFORE IT USED TO BE HOW MUCH OR HOW OFTEN SOMETHING CAME UP IN TERMS OF A CLAIM OR ONE REALLY BIG CLAIM EVERY SO OFTEN.

NOW IT'S THE FREQUENCY OF SEVERITY.

I KIND OF SAY THIS YEAR AFTER YEAR, IT'S JUST LOTS OF BIG THINGS CONTINUE TO HAPPEN MORE OFTEN.

AND SO WHAT OUR FOCUS IS GOING INTO THE 2024-25 POLICY PERIOD IS WE JUST WANT TO MAINTAIN STABILITY.

THE MARKET IS TURNING REALLY QUICKLY.

WE HAVE THE ABILITY TO KIND OF REVISIT OUR SELF-INSURED RETENTION LIMITS FOR CERTAIN POLICIES TO SEE IF MAYBE IF WE INCREASE WHAT WE ABSORB IN OUR BUDGET, WILL THAT REDUCE OUR PREMIUMS? IT'S KIND OF AN ART.

NOT REALLY A SCIENCE TO IT.

AND CONTINUE TO IMPLEMENT LOSS CONTROL STRATEGIES THAT HELP US REDUCE OUR LOSSES AND EXPOSURES.

SO THAT IS WHERE WE ARE.

AND WITH THAT, OUR RECOMMENDATION TO THE FINANCE COMMITTEE IS THAT YOU REVIEW THE INSURANCE PROGRAM RENEWALS AND RECOMMEND THAT THE FULL BOARD OF DIRECTORS RENEW OUR INSURANCE PROGRAM AND AUTHORIZE PAYMENT TO THE CALIFORNIA DEPARTMENT OF INDUSTRIAL RELATIONS IN AN AMOUNT NOT TO EXCEED $275,000, AND THAT'S TO MAINTAIN OUR SELF-INSURED STATUS.

ANY QUESTIONS? ALL RIGHT.

THANK YOU. CHAIR.

AND YOU EVEN HAD SOME GOOD NEWS IN THERE, TOO.

THAT'S GREAT.

ANY. YEAH. I'M HAPPY TO SUPPORT THIS RECOMMENDATION, BUT WITH THE CURRENT INSURANCE CRISIS HOW'S THAT? WE'RE COVERED BY PRISM, BUT MAYBE.

WHEN ARE YOU GOING TO [INAUDIBLE]? YOU COULD PROBABLY ASK THE REPRESENTATIVES THERE, BUT HOW ARE AGENCIES?

[00:45:01]

THERE'S THERE'S BEEN INFORMATION SHARED BY PRISM THROUGH THEIR ACTUARIAL REPORT THAT THEY HAVE ABOUT A 85% CONFIDENCE LEVEL, WHICH IS HEALTHY. AND THAT MEANS THAT IF THERE WAS A CATASTROPHIC LOSS, THEY'D BE ABLE TO PAY OR WITHSTAND 85% OF THAT LOSS.

AND SO WHERE WE FEEL THAT THIS IS THE BEST ROUTE IN TERMS OF STAYING WITH PRISM IS THAT THERE ARE OTHER POOLS OR JPA'S.

YOU MIGHT ALL BE FAMILIAR WITH CAPRI, WHICH IS SPECIFIC TO PARKS AND RECS, BUT THERE ARE A LOT OF OTHER SMALLER PARKS AND RECS.

THEY'RE NOT EAST BAY REGIONAL PARK DISTRICT, WHICH IS VERY LARGE, SPANNING TWO COUNTIES AND COMPARABLE TO A LOT OF THE OTHER LARGER PUBLIC AGENCIES.

AND SO WITH PRISM AND ALL OF THAT FUNDING IN THAT POOL, WE'VE BEEN ABLE TO LEAN ON THEM WHEN WE NEED TO, BUT WE FEEL CONFIDENT THAT WE'RE ABLE TO MAINTAIN OUR COVERAGES AND HAVE GOOD STABILITY WITH PRISM.

YEAH. I'M JUST CONCERNED THAT SO MANY, SO MANY COMPANIES ARE LEAVING CALIFORNIA, BUT I DON'T KNOW WHERE THEY'RE GOING.

I MEAN, THERE ARE A LOT OF INSURANCE COMPANIES AS WELL THAT ARE NOT CALIFORNIA ADMITTED, BUT THEY DO BUSINESS OR BASED IN OTHER STATES. AND SO, UNFORTUNATELY, WHAT SOME OF THE INSUREDS ARE DOING WHEN THEY'RE LOSING THEIR COVERAGES OR DROP COVERAGES IS THEY'RE HAVING TO TAP INTO OTHER INSURANCE COMPANIES THAT DON'T HAVE THE BECAUSE THEY'RE NOT CALIFORNIA ADMITTED THEY DON'T HAVE THE STATUTORY REQUIREMENTS TO CAP PREMIUMS AND THEY GET UNFORTUNATELY, INSUREDS GET CHARGED WHATEVER IS OUT THERE IN ORDER TO MAINTAIN THEIR COVERAGES.

YEAH, YEAH.

SO I JUST WANT TO ALSO MAYBE THIS WILL HELP THAT OUR RESIDENCES ARE NOT BEING INSURED IN A HOMEOWNER'S INSURANCE PROGRAM.

IT'S NOT A CONSUMER PROGRAM.

THIS IS BASICALLY THEY'RE ON OUR PROPERTY SCHEDULE ALONG WITH OUR OTHER FACILITIES, INCLUDING LIKE THE BRAZILIAN ROOM OR CERTAIN BRIDGES.

SO IT'S WE'RE NOT RIGHT NOW, AT LEAST UNDER THE CURRENT WAY THAT IT WORKS.

WE'RE NOT AFFECTED BY SOME OF THE TURMOIL IN THE HOMEOWNERS INSURANCE MARKET.

OKAY. YEAH, IF THAT'S CORRECT.

LYNNE IF IT'S OUR PROPERTY PARKED, EVEN IF IT'S A RESIDENCE, IT'S INSURED UNDER OUR PROPERTY SCHEDULE WITH PRISM.

YEAH. AND I'M PRETTY SURE THAT THE RESIDENTS AGREEMENTS REQUIRE THE OCCUPANTS TO HAVE RENTER'S INSURANCE.

THAT WAS MY QUESTION. OKAY, OKAY.

YEAH. THE QUESTION.

NO. OKAY.

I GUESS MAYBE MORE A COMMENT THOUGH, REAL QUICK.

YEAH, SURE. IT'S ALL.

YEAH. SO SOME OF THE INCREASES.

I THINK THAT ONE OF THE IMPORTANT POINTS TO MAKE HERE WAS THE POINT WHERE WE ADDED TO THE PROPERTY SCHEDULE WAS IT SIX DIFFERENT COMPLETED PROJECTS? SO I THINK THAT WHY I SAY THAT'S IMPORTANT IS THAT, YOU KNOW, BY ADDING THOSE SIX PROJECTS, THAT'S GOING TO INCREASE REGARDLESS, ALTHOUGH I THINK THAT THERE MIGHT BE SOME OTHER INCREASES, LIKE YOU MENTIONED WITH MEDICAL AND EVEN I SAW CYBER LIABILITY PREMIUM IS ESTIMATED TO INCREASE.

BUT I THINK THAT THAT'S AN IMPORTANT POINT THAT WE ARE ADDING TO THE PORTFOLIO.

THAT'S MY ONLY COMMENT. THANK YOU.

WE ARE. YEAH.

AND I NOTICED THAT THE CYBER SECURITY HAD THE HIGHEST PERCENTAGE INCREASE OF ANY OF THEM.

YOU KNOW, I GUESS REFLECTIVE OF THE CRAZY ACTIVITY OUT THERE THAT MANY, MANY THREATS.

AND WE DEFINITELY NEED TO BE ARMORED AS MUCH AS WE CAN AGAINST THAT.

SO I THINK WE'RE AT THE POINT NOW.

THANK YOU VERY MUCH.

WELCOME. TO ENTERTAIN A MOTION HERE.

HAPPY TO MOVE. OKAY.

APPROVAL TO RECOMMEND. AND I'LL TAKE THE SECOND.

SECOND. ALL IN FAVOR? AYE. OKAY.

IT DOES IT PASSES.

THANK YOU.

AND NEXT WE'RE GOING TO COME BACK AND.

DIRECTOR MERCURIO.

CATCH THE. PUBLIC COMMENT.

WE HAD NO PUBLIC COMMENTS.

YEAH. WE'LL DO THE MINUTES.

[Approval of Minutes]

OKAY. SO DO WE HAVE A MOTION TO APPROVE THE MINUTES? I'LL MAKE THE MOTION TO APPROVE.

APPROVE? SECOND. SECOND.

ALL IN FAVOR? AYE.

OKAY. THOSE ARE PASSED.

AND YOU, DIRECTOR SANWONG YOU NEED TO LEAVE AT TEN, OR 11:45.

BETWEEN 11:45 AND NOON.

YEAH. LET'S SEE HOW THIS GOES GUYS.

ALL RIGHT, SO IF SHE GETS UP, IT'S NOT BECAUSE I SAID SOMETHING.

[00:50:03]

ALL RIGHT, ALL RIGHT.

[a. Preliminary Unaudited General Fund and Other Governmental Funds Financial Reports for Fourth Quarter 2023]

THE NEXT ITEM IS YOUR FOURTH QUARTER GENERAL FUND AND OTHER GOVERNMENTAL FUNDS FINANCIAL REPORT.

THIS IS REALLY THE YEAR END LOOK BACK ON 2023 AND CAVEAT THAT THIS IS UNAUDITED, AND WE'RE GOING TO BRING THE AUDITED FINANCIAL STATEMENTS TO YOU IN JULY. SO THIS IS VERY CLOSE TO WHERE IT'S GOING TO LAND, BUT IT'S NOT QUITE FINISHED.

SO LOOKING THIS IS THE MOST SUMMARIZED LEVEL YOU CAN GET JUST LOOKING AT THE GENERAL FUND, JUST LOOKING AT REVENUES AND EXPENDITURES.

SO BIG PICTURE WE BUDGETED AND THIS IS THE AMENDED BUDGET NOT THE ADOPTED BUDGET.

SO WE MAKE SLIGHT ADJUSTMENTS DURING THE YEAR TO REVENUES AND EXPENDITURES.

SO THE AMENDED BUDGET WAS 200 MILLION FOR REVENUES.

WE CAME IN AT 219, SO 9.9% ABOVE BUDGET.

AND ON THE EXPENDITURE SIDE, WE BUDGETED 227.5 MILLION AND LANDED AROUND 211.9 MILLION, SO 93.2% OF BUDGET.

SO WE HAD EXPECTED WHEN WE HAD OUR THROUGH THE BUDGET, WE EXPECTED TO USE 27.4 MILLION OF FUND BALANCE.

INSTEAD, WE ADDED TO OUR FUND BALANCE BY ALMOST 8 MILLION.

SO NOW LOOKING A LITTLE BIT MORE IN DEPTH AT THIS.

AND THERE'S A PAGE IN YOUR PACKET THAT MIGHT BE USEFUL TO LOOK AT.

THIS IS PAGE 88 OF THE PACKET AND IT GIVES YOU MORE DETAIL ABOUT THE GENERAL FUND REVENUE AND EXPENDITURES.

SO AGAIN JUST TAKING IT FROM THE TOP.

SO THE PROPERTY TAX REVENUES THAT'S THE LARGEST SOURCE OF REVENUE FOR THE PARK DISTRICT.

WE HAD BUDGETED TO BRING IN 185 MILLION IN PROPERTY TAXES, AND WE ENDED THE YEAR AT 193.6 MILLION.

SO 8.6 MILLION ABOVE BUDGET.

WE ACTUALLY HAVE A VERY SOLID SENSE OF WHAT OUR SECURED PROPERTY TAX INCREASES ARE GOING TO BE.

WHAT ENDS UP FLUCTUATING QUITE A BIT IS REDEVELOPMENT AGENCY WIND DOWN, WHICH IS THROWING OFF REVENUE THAT WAS UNEXPECTED AND THAT WE REALLY CAN'T PREDICT.

SO THIS YEAR IT'S OBVIOUSLY ON THE PLUS SIDE FOR US, BUT IT'S SOMETHING THAT ENDS UP BEING OUTSIDE OF OUR BUDGETARY CONTROLS ALMOST EVERY YEAR.

MOVING DOWN, CHARGES FOR SERVICES CAME IN UNDER BUDGET BY 1.6 MILLION, AND THAT WAS RELATED TO THE 2023 STORMS AND ALSO SOME OF OUR SWIMMING FACILITIES BEING CLOSED FOR SOME OR ALL OF THE YEAR.

PROPERTY USAGE CAME IN CLOSE TO BUDGET.

INVESTMENT EARNINGS ARE THE BIGGEST VARIANCE YOU'RE SEEING.

AND WE NO LONGER WELL IT'S INVESTMENT EARNINGS AND OTHER.

SO THE LARGEST PROPORTION IS THE INVESTMENT EARNINGS.

SO WE NO LONGER BUDGET FOR OUR INVESTMENT EARNINGS.

SO IF WE BRING IN REVENUES THAT'S GREAT.

IF WE DON'T WE HAVEN'T RELIED ON IT.

BUT SO WE CAME IN, WE HAD A VERY SOLID YEAR WITH INVESTMENT EARNINGS.

SO 12.8 MILLION ABOVE BUDGET.

AND A PORTION OF THAT IS ACTUAL EARNED REVENUE.

AND A PORTION OF THAT IS JUST UNREALIZED GAINS.

SO WE HAVE TO DO AN ACCOUNTING ENTRY TO MARK TO MARKET WHAT WOULD HAPPEN IF WE SOLD ALL OF OUR INVESTMENTS AT DECEMBER 31ST? AND SO IT'S CALLED UNREALIZED GAINS, BUT IT'S NOT ACTUAL REVENUE.

SO IT LOOKS HIGHER.

AND I THINK IT'S ONLY IT'S IN THE ON THAT PAGE I THINK IT'S ONLY 5.3 MILLION IS REALIZED GAINS.

AND THEN LASTLY TRANSFERS IN.

WE ALWAYS TRANSFER IN EXACTLY WHAT'S BUDGETED.

ON THE EXPENDITURE SIDE SALARY AND BENEFITS IS OUR LARGEST EXPENDITURE AND DUE TO VACANCIES THROUGHOUT THE DISTRICT, WE ENDED UP WITH 8.5 MILLION IN SAVINGS THERE.

WE ADDED 40 NEW POSITIONS TO THE BUDGET IN 2023, AND SO THAT TAKES A LONG TIME TO FILL THOSE POSITIONS.

PLUS WE HAVE THE NORMAL ATTRITION THAT GOES ON.

SO OUR VACANCY RATE ENDED UP BEING HIGHER THAN WHAT IT NORMALLY IS.

SUPPLIES AND SERVICES WERE BELOW BUDGET AS WELL.

BUT IF YOU FACTOR IN ENCUMBRANCES IT'S A LITTLE BIT CLOSER TO THAT 90%.

AND ENCUMBRANCES ARE WHEN WE'VE DONE A PURCHASE ORDER, WE HAVE A PROMISE TO PAY A VENDOR, BUT MAYBE WE HAVEN'T RECEIVED THE GOODS OR SERVICES YET.

SO WE HAVE TO CARRY THOSE FUNDS OVER TO THE NEW YEAR TO WHEN WE ACTUALLY RECEIVE THE GOODS, AND THEN WE PAY THAT VENDOR.

CAPITAL OUTLAY SAME THING.

WE HAD PURCHASE ORDERS IN PLACE, BUT WE DIDN'T RECEIVE THE VEHICLES.

SO WE CARRY THOSE FUNDS OVER TO THE NEW YEAR.

AND EVERYTHING ELSE IS VERY, VERY CLOSE TO WHAT WAS BUDGETED.

AND THERE'S MORE DETAIL AT THE BOTTOM OF THAT PAGE ABOUT INDIVIDUAL DEPARTMENTS, BUT I'M NOT GETTING INTO THAT IN THIS PRESENTATION, I'M INSTEAD TAKING A LITTLE MORE GLOBAL STEP BACK AND LOOKING AT FIVE YEARS OF HISTORY.

SO REVENUES WENT UP AT A BETTER CLIP IN 2023 THAN THEY HAVE IN PRIOR YEARS.

[00:55:05]

SO AGAIN, PROPERTY TAXES ARE THE LARGEST PART OF OUR REVENUE.

AND WE HAD A BIG INCREASE IN PROPERTY TAXES IN 2023.

SO YOU CAN SEE THERE WAS WE WERE KIND OF FLATTER BETWEEN 20 AND 2020 AND 2021.

AND THEN IT STARTS GOING UP MORE STEEPLY COMING OUT OF COVID.

AND IN 2024, 25 IT'S STARTING TO DECLINE.

NOT IT'S NOT DECLINING LIKE COMING DOWN, BUT THE INCREASE IS LESS STEEP.

SO WE'RE GOING TO HAVE FOR 2025 EXPECTING MORE LIKE A 4% INCREASE IN PROPERTY TAXES VERSUS THE 6.5% THAT WE HAD IN THE LAST YEAR.

ON THE EXPENDITURE SIDE, EXPENDITURES ARE THE BLUE LINE IS GOING UP PRETTY STEEPLY.

A LOT OF THAT WAS US TRANSFERRING OUT FUNDS TO PROJECTS.

WE HAD A LOT OF BIG PROJECT EXPENDITURES THAT WE WERE BUDGETING FOR BUT SALARY AND BENEFITS, YOU CAN SEE, IS MOVING UP MORE SLOWLY.

AND AND ACTUAL EXPENDITURES WERE, YOU KNOW, JUST A LITTLE BIT HIGHER THAN THEY WERE IN 2022.

AGAIN, WE ADDED A LOT OF POSITIONS BUT WEREN'T NECESSARILY ABLE TO FILL THEM AS QUICKLY.

AND NOW AGAIN, LOOKING AT THAT BIG PICTURE, THE FUND BALANCE THAT COMES OUT OF THESE REVENUE AND EXPENDITURES.

SO WE STARTED THE YEAR WITH 78.4 MILLION IN UNASSIGNED FUND BALANCE.

WE BROUGHT IN 219.9 MILLION IN REVENUE.

WE SPENT 211.9 MILLION.

WE THEN ROLLED THOSE ENCUMBRANCES.

I WAS TALKING ABOUT WHERE WE HAVEN'T YET PAID THE VENDORS.

WE HAVE TO ROLL THAT TO THE NEW YEAR, AND WE USED SOME OF OUR FUND BALANCE IN 2024 WE BUDGETED SOME OF OUR FUND BALANCE TO BE SPENT.

AND SO WE END THE YEAR AT 73.1 MILLION, WHICH IS ROUGHLY 8.6 MILLION ABOVE OUR TARGET, TO HAVE 32% OF ANNUAL REVENUE SET ASIDE IN OUR UNASSIGNED FUND BALANCE.

SO WE HAVE 8.6 MILLION ABOVE THAT AMOUNT, AND THAT'S AVAILABLE FOR US TO USE FOR ONE TIME PROJECTS.

YOU KNOW, POSSIBLY WE'LL BUDGET IT IN THE 2025 BUDGET, OR IT COULD BE ALLOCATED TO SOMETHING ELSE DURING THE YEAR.

BUT WE WANT TO USE THOSE FOR ONE TIME PROJECTS, NOT FOR ONGOING COSTS.

SO WHERE IS THAT MONEY PARKED? IT'S IN UNASSIGNED FUND BALANCE SO YOU CAN'T SEE IT BUDGETED ANYWHERE.

WHEN YOU GET THE ACFR AT THE JULY MEETING, YOU'LL SEE THERE'S A PAGE IN THERE THAT GIVES YOU ALL THE DETAILS ABOUT OUR FUND BALANCE AND WHAT REMEMBER I TALKED IN OUR I THINK IT WAS OUR LAST MEETING ABOUT THE DIFFERENT CATEGORIES OF FUND BALANCE.

SO YOU'LL SEE ALL THOSE CATEGORIES THERE AND YOU'LL SEE UNASSIGNED FUND BALANCE AT THE VERY BOTTOM.

AND THAT'S WHERE YOU CAN SEE BUT YOU CAN'T SEE IT ON THE BUDGET.

YOU CAN ONLY SEE IT ON THE ACCOUNTING STATEMENTS.

OKAY. THANK YOU.

YOU'RE WELCOME. SO I'VE BEEN THINKING ABOUT THIS IN REGARDS TO PROPERTY TAXES BECAUSE I KNOW A LOT OF OUR LOCAL MUNICIPALITIES ARE HAVING SOME ARE ENCOUNTERING SOME TROUBLES IN REGARDS TO MANAGING THEIR BUDGETS.

BUT ONE OF THE FACTORS IN THAT THAT I KEEP ON HEARING ABOUT IS THE TRANSFER TAX WHEN PROPERTY CHANGES HANDS.

AND THAT'S NOT SOMETHING THAT'S EVER BEEN A PART OF OUR YOU KNOW, OUR EXPECTED REVENUE.

SO BECAUSE WE'VE ALWAYS BEEN BASED ON A PERCENTAGE OF PROPERTY TAX AND NOT AS DEPENDENT ON TRANSFER TAX, WHICH IS A LESS PREDICTABLE THAN WE'VE ALWAYS BEEN ABLE TO. AND SO I GUESS MY QUESTION IS I THINK THAT HELPS US BECAUSE WHILE WE MAY NOT HAVE THAT YOU KNOW, WHEN THE REAL ESTATE MARKETS GOT A LOT OF TURNOVER, THAT'S GOOD FOR OUR CITIES AND CITY GOVERNMENTS.

BUT FOR US HERE AT THE PARK DISTRICT, WE KIND OF STAY WITHIN THIS BAND OF PROPERTY TAX THAT WE HAVE A LITTLE BIT MORE PREDICTABILITY, A LITTLE BIT MORE RELIABILITY.

AND THAT MAY BE ONE REASON WHY WE DON'T HAVE THIS BIG CHANGE FROM YEAR TO YEAR THAT MAYBE SOME OF OUR CITIES ARE EXPERIENCING.

I'M CURIOUS, IS THAT YOUR TAKE ON THINGS? THAT'S EXACTLY RIGHT. SO WE'VE GOT PROPERTY TAXES ACROSS THE WHOLE TWO COUNTY AREA, SO IT'S A MUCH.

YEAH. YOU HAVE A LOT OF VARIABILITY FROM CITY TO CITY.

I WAS AT AN ALAMEDA COUNTY FINANCE OFFICERS MEETING AND THEY WERE TALKING ABOUT PROPERTY TAX REVENUES FOR AND THE DIFFERENT CITY FINANCE OFFICERS WERE THERE, AND THEY WERE TALKING ABOUT WHAT WAS HAPPENING IN THEIR CITY.

AND SOME CITIES LIKE EMERYVILLE ARE SEEING REALLY SMALL INCREMENTAL INCREASES, LIKE NOTHING LIKE WHAT THEY HAD BEEN EXPERIENCING IN PRIOR YEARS, BECAUSE THEIR TURNOVER IS LESS THAN IT USED TO BE.

BUT IT'S ALSO THEY HAVE NEW CONSTRUCTION.

SO OR THEY HAVE NEWER BUILDINGS.

SO WHEN THE PROPERTY CHANGES HANDS, THE INCREASE IS A LOT SMALLER THAN SOMETHING THAT'S LIKE BRAND NEW CONSTRUCTION.

OR IF YOU HAVE SOMETHING IN BERKELEY, FOR EXAMPLE, THAT HAS BEEN LIKE SITTING WITH SOME FAMILY FOR 50 YEARS AND SUDDENLY IT CHANGES HANDS, YOU'LL HAVE A GIANT

[01:00:02]

SO THERE'S A LOT OF VARIABILITY, AND IT'S REALLY SPECIFIC CITY TO CITY.

BUT WE'RE SITTING ABOVE ALL THAT AND JUST KIND OF TAKING THE MACRO.

DOES THAT ANSWER YOUR QUESTION? ABSOLUTELY YES. THANK YOU.

YEAH. AND YOU KNOW AND IT YOU KNOW YOU KIND OF HIT ON IT THERE.

YOUR FOCUS ON ONE.

IF YOU'RE THINKING ABOUT A CITY THAT'S A VERY SMALL AREA RELATED TO A PARK DISTRICT THAT COVERS TWO VERY LARGE COUNTIES, YOU KNOW? SO I THINK THERE'S SOME SMOOTHING IN THERE, RIGHT, THAT PROTECTS YOU AGAINST.

WELL, THERE MIGHT BE AN ECONOMIC EFFECT YOU KNOW, IN THE EXTREME EAST BAY, YOU KNOW, THE WESTERN PART OF THE EAST BAY, BUT IN THE INLAND AREA, YOU KNOW, IT'S STILL GOING AND IT'S STILL DEVELOPING AND THAT SORT OF THING.

SO I THINK THAT HELPS US TOO.

YEAH, WE ARE AND I'VE SAID THIS MANY TIMES, WE'RE VERY FORTUNATE TO BE A STABLE AGENCY.

AND THE CITIES REALLY, THEY TAKE A LOT MORE UPS AND DOWNS THAN WE DO.

RIGHT. YEAH.

OKAY. YEAH. ALL RIGHT.

LAST SLIDE, I BELIEVE JUST LOOKING AT OUR OTHER FUNDS.

SO THE GENERAL FUND IS THE ONE WE TALK ABOUT THE MOST BECAUSE IT'S OUR LARGEST FUND.

BUT WE HAVE THESE OTHER SMALLER FUNDS.

SO OUR SPECIAL REVENUE FUNDS INCLUDE THINGS LIKE MEASURE FF, OUR LANDSCAPING AND LIGHTING ASSESSMENT, DISTRICT ZONES OF BENEFITS, AND MEASURE WW LOCAL GRANTS.

THERE'S A PAGE IN THE PACKET I FORGET WHICH PAGE IT IS, BUT IT THERE'S VARIABILITY IN OUR SPECIAL REVENUE FUNDS RELATED TO THE LOCAL GRANTS, WHERE WE KEEP THINKING WE'RE GOING TO BE ABLE TO SPEND IT ALL DOWN.

BUT AS YOU JUST HEARD AT YESTERDAY'S BOARD MEETING, WE EXTENDED THAT OUT THREE MORE YEARS BECAUSE SOME OF THE PROJECTS ARE STILL TAKING LONGER TO FINISH.

PROJECT FUNDS IS WHERE WE BUDGET ALL THE MONEY FOR THE PROJECTS THAT WE'RE DOING, AND THERE'S A TON OF VARIABILITY THERE BECAUSE WE BUDGET FOR A PROJECT, BUT SOMETIMES IT TAKES SEVERAL YEARS TO FINISH SOMETHING.

SO EVEN THOUGH WE BUDGET IT IN ONE YEAR, MAYBE IT WON'T GET SPENT FOR THREE, FOUR MORE YEARS.

DEBT SERVICE FUNDS. THAT'S WHERE WE'RE BUDGETING FOR OUR WW BONDS AND ALSO OUR PROMISSORY NOTE PAYMENTS.

AND THEN LASTLY, WE HAVE INTERNAL SERVICE FUNDS, WHICH ARE WORKERS COMPENSATION, GENERAL LIABILITY, WHICH YOU JUST HEARD ABOUT FROM ALMA, EMPLOYEE BENEFITS, MAJOR INFRASTRUCTURE RENOVATION AND REPLACEMENT AND MAJOR EQUIPMENT REPLACEMENT.

SO THIS IS INFORMATIONAL ONLY.

WE'LL BE BRINGING THE FULL AUDITED FINANCIAL STATEMENTS TO YOU IN JULY.

SURE. GO AHEAD. I MEANT TO BRING THIS UP EARLIER, BUT I WAS LATE.

BUT THERE'S A COLUMN SOMEWHERE ABOUT DOUBLE A, AND I THOUGHT AND IT SAID THERE WAS LIKE, 10 MILLION IN THERE.

AND I THOUGHT WE WERE DOWN TO LESS THAN TO LESS THAN A COUPLE OF HUNDRED THOUSAND.

RIGHT. SO SO THAT'S IN THE INVESTMENT PAGE.

HOLD ON PAGE TEN OF YOUR PACKET.

SO LOOKING AT WHAT MEASURE AA PROJECT FUNDS ARE LEFT, SO WE HAVE 10.2 MILLION THAT HAS YET TO BE DRAWN DOWN TO REIMBURSE OURSELVES FOR EXPENDITURES.

THERE'S MUCH LESS THAT'S AVAILABLE TO BE APPROPRIATED.

SO THE AA MONEY'S BEEN BUDGETED AND IS JUST TAKING US A WHILE TO GET THOSE PROJECTS DONE.

GOT IT. BUT WE HAVEN'T SPENT IT, SO WE HAVEN'T DRAWN IT DOWN.

OKAY. YEAH, THAT EXPLAINS IT.

THANK YOU. YOU'RE WELCOME.

AND I APOLOGIZE FOR BEING LATE.

NEVER ANSWERED THE PHONE RIGHT BEFORE YOU GET OUT THE DOOR.

ANY OTHER QUESTIONS? OH, YES.

WE'RE AT THAT POINT. ANY OTHER FINAL QUESTIONS? ANY COMMENTS FROM THE NO PUBLIC COMMENT.

COMMENTS OKAY.

SO YEAH.

OKAY. WELL, THANK YOU SO MUCH FOR THAT.

THAT WAS AN INFORMATIONAL ITEM, SO IT DOES NOT REQUIRE US TO VOTE.

[b. Job Order Contracting Quarterly Update]

I'M REN BATES, CHIEF OF DESIGN AND CONSTRUCTION.

I'M HERE TO PROVIDE A QUARTERLY UPDATE ON OUR JOB ORDER CONTRACTING PROGRAM.

I WAS AT THE BOARD YESTERDAY TO AWARD OR TO ASK FOR AUTHORIZATION OF AWARD FOR CONSULTING SERVICES.

SO THIS IS THANK YOU FOR THAT.

[01:05:03]

SO THIS IS PER OUR JOB ORDER CONTRACTING POLICY, WHICH THE BOARD ADOPTED IN 2019, 2020.

I CAN'T REMEMBER NOW.

BUT WE'RE PROVIDING A QUARTERLY UPDATE THAT PROVIDES PROJECTS WE'RE WORKING ON, THE MONEY THAT WE'VE SPENT AND THE MONEY THAT WE SPEND ON THE CONSULTING SERVICES. SO I'M A LAST YEAR ON THE 17TH OF JANUARY, THE BOARD AUTHORIZED THE AWARD OF CONTRACTS, EIGHT CONTRACTS FOR ONE YEAR PERIOD FOR MAXIMUM CONTRACT VALUE, $2 MILLION.

SO I'M REPORTING ON THOSE.

AGAIN, THE ANNUAL CONTRACT PERIOD STARTS WHEN WE ISSUE OUR FIRST NTP, AND THEN WE HAVE A YEAR TO DO JOB ORDERS UP UNTIL THROUGH THAT TIME.

JUST AS CONTEXT AGAIN, THE JOB ORDER CONTRACTING IS APPROVED BY THE PUBLIC RESOURCES CODE.

AND SO OUR CONTRACTING CODE EXCUSE ME.

AND THIS THE LIMIT THAT WE HAVE IS WELL UNDER THE ALLOWABLE LIMIT BY LAW.

SO WE'RE JUST MANAGING IT THIS WAY.

I THINK THIS IS A NUMBER THAT WE'VE LANDED ON HERE AT THE DISTRICT THAT WE CAN UTILIZE.

IT GIVES US SOME CAPACITY.

IT GIVES US A LITTLE BIT OF WIGGLE ROOM.

SO I THINK THIS IS WHERE WE'VE LANDED IN TERMS OF OUR CONTRACT VALUES.

SO THESE CHARTS OR THESE EXCEL SPREADSHEETS ARE IN YOUR PACKET, BUT THESE SHOW OUR COMPLETED PROJECTS.

SO WE HAVE COMPLETED 12 PROJECTS THUS FAR.

AND AGAIN, THE TOTAL OF THAT WE'VE SPENT ON THOSE PROJECTS, AND THEN THE MONEY WE'VE SPENT ON OUR CONSULTANTS, WHICH IS 5% OF THOSE APPROVED FINALIZED PROJECT COSTS.

I HAVE SOME PICTURES OF SOME OF THESE IN THE FURTHER ON IN THE PRESENTATION.

THESE ARE THE ONES THAT WE HAVE ISSUED A NOTICE TO PROCEED ON OR ARE CURRENTLY IN CONSTRUCTION.

AND WHEN I SAY ISSUED A NOTICE TO PROCEED, THAT MEANS WE'VE AGREED UPON A PRICE.

SOME OF THESE PROJECTS HAVE CONSTRAINTS ON THEIR WINDOW OF CONSTRUCTION.

AND SO THAT'S WHERE WE ARE IS THAT WE'VE AGREED TO A PRICE AND WE HAVEN'T STARTED CONSTRUCTION, BUT THAT'S BECAUSE OF CERTAIN CONDITIONS THAT PRECLUDE US FROM TAKING ACTION OR STARTING CONSTRUCTION RIGHT NOW.

BUT AS YOU CAN SEE, WE'VE GOT QUITE A BIT QUEUED UP AND READY TO GO.

AND AGAIN, IT RANGES A LOT OF DIFFERENT PROJECTS.

AGAIN AS CONTEXT, JOB ORDER CONTRACTING IS FOR REPLACEMENT, REFURBISHMENT AND REPAIR.

IT'S NOT FOR BRAND NEW PROJECTS NECESSARILY.

WE DO REPLACEMENT OF FACILITIES SO WE CAN'T DO ANYTHING THAT'S A NEW DESIGN, NEW FACILITY ALL TO ITSELF.

SO NOW WITH THAT, I'LL SHARE SOME PHOTOS OF PROJECTS.

I THINK YOU'RE PROBABLY SEEING THIS ONE EVERY TIME I COME.

I SHOW IT, BUT IT SHOWS THE.

AND I'LL SAY IT AGAIN FOR EVERYONE'S BENEFIT.

IT SHOWS THAT WE CAN DO WORK AT NIGHT.

THERE ARE HOURS THAT SHOW OFF HOURS.

AND SO SOME OF OUR WORK IS TIDALLY INFLUENCED, ENVIRONMENTALLY INFLUENCED, AND SO IT ALLOWS US TO DO THAT ON AN AGREED UPON PRICE.

AND IT GIVES US MORE A LITTLE MORE FREEWAY FLEXIBILITY IN TERMS OF SCHEDULING THAT AND HAVING FIXED COSTS.

SO THE FIXED COST FOR OFF HOURS ARE A DIFFERENT, THE CONTRACTOR BIDS THAT AS A DIFFERENT RATE.

SO IT COVERS ANY ADDITIONAL OVERHEAD THAT THEY MAY HAVE.

SO THEY HAVE THAT'S PART OF IT.

WE USE JOB ORDER CONTRACTING TO TAKE OUT THE UNDERGROUND STORAGE TANK AT THE BURRELL PROPERTY.

SO WE'VE CLEANED THIS SITE UP AND REMOVED THAT SO WE CAN CONTINUE ON NEXT STEPS THERE.

IN ADDITION TO THE FACT THAT WE'VE FINALIZED THE SALE, THAT WE CAN START TO DEVELOP THAT PROPERTY AND DO THAT.

SO WE'VE IT GIVES US YEAH.

IT WAS A GREAT WAY TO DO THAT PROJECT.

HERE'S THE WILDCAT CREEK TRAIL REPAVE IN POINT PINOLE.

THE JOB ORDER CONTRACTING.

WE HAVE TWO WE HAVE IN THE PAST HAVE BID TWO GENERAL.

WELL, WE BID THREE A'S AS A REMINDER, THREE B'S AND TWO GENERAL PAVING OR GENERAL A PAVING WHERE THEY HAVE TO PERFORM A LOT OF THE WORK.

AND SO WE UTILIZE THAT OR MAINTENANCE AND SKILLED TRADES UTILIZES MOST OF THOSE PAVING CONTRACTS.

THIS IS THE LAFAYETTE RIDGE STAGING AREA IN BRIONES, WHAT WE DID HERE WAS REPLACE THE CHEMICAL TOILET, BROUGHT IN SOME UTILITIES, AND REPAVED THE WHOLE THING.

WE RECENTLY TOOK PARTIAL ACCEPTANCE OF THIS.

WE'RE WAITING ON THE UTILITY PROVIDERS TO COMPLETE AND OPEN UP THE RESTROOM THERE.

SO WE NEED WATER AND PG&E TO FINISH UP, BUT THE PAVING IS DONE.

SO WE TOOK DOWN THE FENCE AND THE PARKING LOT IS NOW OPEN AND FOLKS CAN ACCESS THIS, WHICH I KNOW PERSONALLY THAT PEOPLE HAVE BEEN ANXIOUS FOR.

I'VE RECEIVED CALLS MYSELF ABOUT WHEN IS THIS OPENING UP? SO THIS IS ONE WE DID WITH JOB ORDER CONTRACTING AND IT TURNED OUT REALLY WELL.

AND THEN LASTLY, I SPOKE WITH THIS YESTERDAY AT THE BOARD, BUT WE'VE DONE THE FIRST COUPLE OF BIG BREAK SHADE STRUCTURE REPLACEMENTS WITH JOB ORDER CONTRACTING.

AND SO THAT'S THE LAST OF MY PHOTOS TO SHARE.

I'M HAPPY TO FIELD ANY QUESTIONS OR SHARE AS MUCH AS I KNOW ABOUT THE PROJECTS ON THE LIST, I MAY NOT KNOW ALL OF THEM, BUT I CAN FIND OUT MORE AS ASKED. WELL, YOU KNOW, YOU'RE RIGHT.

[01:10:04]

BIG, YOU KNOW, BIG AND SMALL, YOU KNOW, SO AND A LOT OF AND YOU'RE ALSO CORRECT, I THINK IT'S SAFE TO SAY WHENEVER WE BUILD A NICE RESTROOM LIKE THAT, IT GETS REALLY APPRECIATED AND IT GETS REALLY USED.

AND WHEN WE DO THAT, NICE PAVING, I THINK WE GET A LOT OF SMILES, YOU KNOW? SO THOSE ARE ALL.

THERE'S SO MANY GOOD PROJECTS THERE.

SO I APPRECIATE YOUR PART IN MAKING ALL THAT HAPPEN.

ANY QUESTIONS FOR RENT? YEAH, YEAH, JUST FOR CLARIFICATION FOR MY COLLEAGUES AND ALSO FOR THE PUBLIC.

TYPICALLY PROJECTS UNDER $50,000 ARE USUALLY DONE IN HOUSE, BUT IF YOU CAN HIGHLIGHT WHY THERE'S LIKE THREE PROJECTS THAT WERE THAT ARE UNDER 50,000 THAT WERE DONE ON THE JOB.

YES. THANK YOU, DIRECTOR ROSARIO.

OUR POLICY STATES THAT WE SHOULD UTILIZE JOB ORDER CONTRACTING FOR ONLY PROJECTS THAT ARE OVER 50 K.

THERE ARE SOME ALLOWANCES THAT PROVIDE OPPORTUNITIES FOR US TO DO THAT WITH THE CORRECT APPROVALS.

AND SO IN TERMS OF THAT, A FEW OF THOSE PROJECTS ARE RIGHT ON THE LIMIT.

BUT I THINK PART OF THEM WERE ONE OF THEM THAT WAS SMALLER, WAS A HOLD OVER FROM THE PREVIOUS PROJECT BECAUSE WE DIDN'T GET THE SUPPLEMENTAL DONE IN TIME.

AND SO WE AWARDED THAT BECAUSE THE CONTRACTOR WAS THERE.

AND SO WE AWARDED THAT BECAUSE IT WAS OSTENSIBLY A SUPPLEMENTAL TO THE OTHER, BUT BECAUSE OUR CONTRACT HAD TERMED OUT, WE'VE ABORTED THAT THAT WAS ONE REASON.

AND THEN THE OTHER REASON IS JUST SOMETIMES THAT IT MAKES SENSE WITH WHAT THEY'RE DOING IN TERMS OF THE LOAD THAT THAT GROUP IS UTILIZING.

AND SO AGAIN, WE DON'T TYPICALLY DO THAT.

AND IT REQUIRES SPECIAL APPROVALS ALL THE WAY UP TO OUR CFO.

SURE. ONE OTHER QUESTION.

THE RESTROOMS AT ARE BEING DONE AT CROWN BEACH.

THOSE. THAT'S NOT JOB ORDER CONTRACTING.

NO. TOO BAD.

ANY QUESTIONS? NO QUESTIONS, JUST A COMMENT.

I THINK IT'S ALWAYS HELPFUL TO HAVE THIS REPORT AND IT'S OKAY FOR YOU TO REPEAT INFORMATION BECAUSE EVEN, FOR EXAMPLE, THE PROJECT YOU SHARED FROM THE HAYWARD MARSH COGSWELL MARSH BRIDGE REPAIR, LIKE IT'S HELPFUL FOR ME TO HEAR IT MULTIPLE TIMES BECAUSE I HEAR DIFFERENT THINGS SUCH AS, YOU KNOW, THE THINKING ABOUT THE TIDAL WAVES AND HOW THAT ALLOWS US TO DO WORK AT NIGHT.

SO IT'S HELPFUL TO HEAR THIS.

THANK YOU. THANK YOU FOR ALLOWING ME TO REPEAT MYSELF.

THE OTHER THING I'LL OFFER, SINCE YOU BROUGHT IT UP, IS THAT THAT ONE HAS ALLOWED US TO DO IT OVER MANY SEASONS.

AND SO BECAUSE WE COULDN'T TACKLE DOING ALL THE JACKETING OF THOSE PIERS EVERY YEAR, IT ALLOWS US TO THEN WE'VE BEEN FORTUNATE IN THAT WE'VE HAD CONTRACTORS REBID IT SO THAT WE HAVE THE SIMILAR CONTRACTOR, AND OVER SEVERAL SEASONS THEY'VE BEEN ABLE TO DO CONTINUE DOING THAT WORK, WHICH IS ANOTHER BENEFIT OF THE JOB ORDER CONTRACTING PROGRAM. SO THANKS.

ALL RIGHT. THANK YOU. AND YOU KNOW, AS ALWAYS, THANK YOU FOR THE IMAGES TOO THAT JUST HELPS SO MUCH TO UNDERSTAND YOU KNOW, JUST A NUMBERS THING.

AND BUT WHEN YOU SEE IT, IT'S.

YOU'RE WELCOME. I'M TRYING TO INCREASE THE BAR EVERY TIME, SO HOPEFULLY I'LL HAVE MORE NEXT QUARTER.

[LAUGHTER] KEEP ON DOING IT.

OKAY. THANK YOU.

ARE THERE ANY COMMENTS ON THAT ONE PUBLIC COMMENT.

NO PUBLIC COMMENTS. OKAY.

SO THE NEXT ITEM IS ANNOUNCEMENTS.

[Announcements]

ALL RIGHT. LAST ITEM IS ADJOURNMENT.

WE ARE ADJOURNED.

ALL RIGHT.

* This transcript was compiled from uncorrected Closed Captioning.