Sep 25, 2024 Finance Committee Meeting

[00:00:02]

OKAY. GOOD MORNING AND WELCOME TO THE OPERATIONS COMMITTEE MEETING OF THE EAST BAY REGIONAL PARK DISTRICT FOR WEDNESDAY, SEPTEMBER 25TH FINANCE COMMITTEE.

IT SAYS OPERATIONS HERE.

I'M JUST, YOU KNOW, I SHOULDN'T RELY ON SCRIPTS SO MUCH.

YEAH. OKAY.

WE ARE NOT OPERATING.

WE'RE FINANCING BEGINNING AT 10:31.

ALL RIGHT. WILL THE RECORDING CLERK PLEASE CALL THE ROLL?

[Roll Call]

STAFF IS PROVIDING LIVE AUDIO AND VIDEO STREAMING.

MEMBERS OF THE PUBLIC WISHING TO MAKE A PUBLIC COMMENT MAY DO SO BY SUBMITTING AN EMAIL, LEAVING A VOICEMAIL, OR JOINING LIVE VIA ZOOM WITH A LINK PROVIDED ON THE AGENDA LOCATED ON THE DISTRICT WEBSITE.

IF THERE ARE NO QUESTIONS ABOUT THE MEETING PROCEDURES, WE WILL BEGIN.

ANY QUESTIONS? WE SHALL PROCEED WITH ITEM NUMBER TWO, WHICH IS APPROVAL OF THE BOARD.

[Approval of Minutes]

DO WE HAVE A MOTION TO APPROVE THIS AGENDA ITEM? SO MOVED. DO I HAVE A SECOND? YES, SECOND.

ALL IN FAVOR? AYE. OPPOSED? NONE. CARRIES UNANIMOUSLY.

ITEM TWO. THAT WAS TWO A TWO B IS APPROVAL OF THE BOARD.

FINANCE COMMITTEE MEETINGS FOR MEETING.

MEETING MINUTES FOR JULY 24TH, 2024.

MOTION TO APPROVE THIS AGENDA ITEM.

DO I HAVE A MOTION FOR THAT? SO MOVED. MOVED BY ROSARIO.

SECOND. SECOND BY SANWONG.

ALL IN FAVOR? AYE.

AYE. OPPOSED? ALL RIGHT. CARRIES UNANIMOUSLY AS WELL.

DO WE HAVE ANY PUBLIC COMMENTS ON ITEMS FOR ITEMS NOT ON THE AGENDA? NO PUBLIC COMMENTS? WE DO NOT. ALL RIGHT, SO NOW WE MOVE TO OUR AGENDA ITEMS.

[Action Items]

THERE WE GO.

OKAY. WELL GOOD MORNING.

MY NAME IS KATY HORNBECK, GRANTS MANAGER IN THE FINANCE AND MANAGEMENT SERVICES DIVISION.

I AM JOINED TODAY BY SAVON REESE, WHO'S AN ASSOCIATE ENGINEER WITH THE CITY OF PITTSBURG.

IN CASE THERE ARE SOME ADDITIONAL QUESTIONS ON THE PROJECT, HE'S HERE TO HELP SUPPORT THAT.

SO AS MENTIONED BEFORE, I'M HERE TODAY TO REQUEST YOUR RECOMMENDATION TO THE FULL BOARD OF DIRECTORS TO ENTER INTO A FUNDING AGREEMENT WITH THE CITY OF PITTSBURG TO THIS SHOULD SAY, DISTRIBUTE, NOT REDISTRIBUTE REDEVELOPMENT FUNDS IN THE AMOUNT OF $584,405.96.

SO I'M GOING TO ATTEMPT TO GIVE A BRIEF BACKGROUND ON THE REDEVELOPMENT FUNDS.

IT GOES BACK 30 YEARS, SO I'LL TRY TO BE DETAILED BUT QUICK.

THE DELTA DE ANZA PROJECT OVERVIEW.

SO WHAT THESE FUNDS WOULD BE GOING TOWARDS, AND THEN THE CITY OF PITTSBURG FUNDING AGREEMENT.

ALL RIGHT. SO BACK IN 1993, THE PARK DISTRICT AND THE FORMER REDEVELOPMENT AGENCY OF THE CITY OF PITTSBURG ENTERED INTO A FISCAL AGREEMENT.

THIS FISCAL AGREEMENT BASICALLY OUTLINED THAT THE PARK DISTRICT WOULD WOULD RECEIVE, AT MINIMUM, $500,000 FOR IMPROVEMENTS OF REGIONAL FACILITIES WITHIN PITTSBURG OR WITHIN THE VICINITY OF PITTSBURG, AND IN THIS FISCAL AGREEMENT, IT OUTLINED OR REQUIRED THAT THE PARK DISTRICT AND THE AGENCY WOULD ENTER INTO A SEPARATE AGREEMENT THAT WOULD BE SPECIFIC TO WHAT THOSE IMPROVEMENTS WOULD BE.

[00:05:02]

SO THE $500,000 WAS DEPOSITED INTO THAT ACCOUNT IN 2012.

ALL CALIFORNIA REDEVELOPMENT AGENCIES WERE DISSOLVED, AND SO A SUCCESSOR AGENCY TOOK OVER THE NEGOTIATION OF THIS FUNDING AGREEMENT AND WOULD BE RESPONSIBLE FOR DISBURSING THE FUNDS.

SEVERAL YEARS PASSED IN THAT TIME, THE PARK DISTRICT AND THE SUCCESSOR AGENCY NEGOTIATED THIS FUNDING AGREEMENT AND CAME TO THE AND PRESENTED IT TO THE CONTRA COSTA COUNTYWIDE OVERSIGHT BOARD IN 2019 FOR APPROVAL, WHICH THEY APPROVED, AND IN THIS FUNDING AGREEMENT, IT OUTLINED THREE PROJECTS THAT THE PARK DISTRICT AND THE CITY OF PITTSBURG HAD COME UP WITH, THAT THIS $500,000 WOULD GO TOWARDS, AND THOSE PROJECTS ARE SAFETY LIGHTING AT FOUR INTERSECTIONS ALONG THE DELTA DE ANZA TRAIL.

PAVEMENT REHABILITATION AND TRAIL MAINTENANCE AGAIN ALONG THE DELTA DE ANZA TRAIL WITHIN PITTSBURG, AND THEN BLACK DIAMOND MINES AND SKY RANCH TRAIL.

DEVELOPMENT IMPROVEMENTS.

ONCE THE OVERSIGHT BOARD HAD APPROVED THIS FUNDING AGREEMENT, THE DEPARTMENT OF FINANCE CUT THE CHECK, AND AT THIS POINT IN TIME, THE AMOUNT HAD GROWN TO $582,405.96.

SO THAT IS WHAT THE PARK DISTRICT RECEIVED AT THE END OF 2019.

IN 2020, THE BOARD OF DIRECTORS AUTHORIZED THE ACCEPTANCE OF THESE FUNDS AND WITH THE POSSIBILITY THAT THEY MIGHT BE.

SOME OF THEM MIGHT BE DISTRIBUTED TO THE CITY OF PITTSBURG TO COMPLETE ONE OF THE PROJECTS, SPECIFICALLY THE SAFETY LIGHTING ONE.

SO ONCE THE BOARD OF DIRECTORS ACCEPTED THE FUNDS, THE PARK DISTRICT STAFF AND CITY OF PITTSBURG STAFF STARTED TALKING ABOUT COMPLETING THESE PROJECTS, SPECIFICALLY THE SAFETY LIGHTING ONE WHEN IT WOULD HAPPEN, HOW IT WOULD OCCUR, WHO WAS GOING TO DO IT, AND DURING THOSE CONVERSATIONS, I BELIEVE IT WAS IN 2022, THE CITY OF PITTSBURG HAD SUBMITTED A GRANT APPLICATION FOR THEIR DELTA DE ANZA MULTIMODAL SAFETY PROJECT AND HAD RECEIVED NOTIFICATION IN 2023 THAT THEY WERE AWARDED THIS GRANT.

IT WAS, I BELIEVE, 4.4 MILLION.

PART OF THIS PROJECT DOES INCLUDE SAFETY LIGHTING IMPROVEMENTS, AND SO IN DISCUSSIONS WITH CITY OF PITTSBURG, THEY HAD REQUESTED, CAN WE RECEIVE THAT 582 TO GO TOWARDS THIS PROJECT? THEY HAD A FUNDING GAP FOR THIS PROJECT.

SO THE PROJECT SCOPE IS BRIEFLY OUTLINED HERE.

CROSSING AND TRAIL IMPROVEMENTS ALONG THE DELTA DE ANZA TRAIL.

SO THESE ARE SOME OF THE ITEMS RAISED CROSSWALKS, HIGH VISIBILITY CROSSWALKS, LIGHTING, WAYFINDING, ETC..

SO THE PARK DISTRICT HAS BEEN INVOLVED IN THESE CONVERSATIONS OF THIS PROJECT.

WE'VE BEEN AWARE OF IT AND WOULD STILL BE INVOLVED GOING FORWARD, AND THIS PROJECT DOES MEET THE INTENT OF THE SAFETY, LIGHTING AND THE PAVEMENT PROJECTS THAT WERE OUTLINED IN OUR FUNDING AGREEMENT. SO WE BELIEVE THAT THIS IS A REASONABLE USE OF DISTRIBUTING THE FUNDS, AND THEN THE LAST THING BEFORE I FORGET THE SKY RANCH TRAIL.

SO THAT THIRD PROJECT GOING BACK, ONE SLIDE, THE BLACK DIAMOND MINE, SKY RANCH.

IN TALKING WITH OUR TRAILS STAFF.

MY UNDERSTANDING IS THAT OVER THE LAST FEW YEARS THAT IT'S BECOME DETERMINED THAT PROJECT IS NOT FEASIBLE.

SO HAVING THE FUNDS GO TOWARD THAT WOULDN'T BE DOABLE.

ALSO, THE 582 WOULD BARELY COVER ONE, LET ALONE THREE OF THOSE PROJECTS.

SO HAVING IT DISTRIBUTED TO THE CITY OF PITTSBURG TO GO TOWARDS THEIR LARGER PROJECT, WHICH INCLUDES THIS TRAIL IMPROVEMENT AND LIGHTING WE FELT WAS A GOOD COMP.

OKAY, AND THEN MOVING TO THE CITY OF PITTSBURG FUNDING AGREEMENT.

SO AS I MENTIONED BEFORE, THEY REQUESTED THOSE FUNDS BE DISTRIBUTED TO THEM SPECIFICALLY FOR THIS PROJECT SINCE IT'S INCLUDING THOSE SAFETY IMPROVEMENTS.

THE ENTIRE AMOUNT WOULD BE DISTRIBUTED BACK TO THEM.

PARK DISTRICT, CITY OF PITTSBURG, WE MUTUALLY DESIRE IN COOPERATING AND COMPLETING THIS PROJECT.

IT WILL MINIMIZE COSTS, PROMOTE EFFICIENCY, AND BENEFIT BOTH AGENCIES, AND IN THIS FUNDING AGREEMENT, WE'LL SPECIFY THE TERMS AND CONDITIONS ON THOSE HOW THESE FUNDS WOULD BE SPENT. ALL RIGHT, AND THAT BRINGS ME TO THE STAFF RECOMMENDATION AGAIN.

SO ASKING FOR YOUR FAVORABLE RECOMMENDATION TO THE FULL BOARD OF DIRECTORS TO AUTHORIZE ENTER INTO ENTERING INTO A FUNDING AGREEMENT WITH THE CITY OF PITTSBURG TO DISTRIBUTE FUNDS IN THE AMOUNT OF $584,405.96, AND I'M HAPPY TO ANSWER ANY QUESTIONS.

OR AGAIN, SAVON REESE IS HERE TO.

IF YOU HAVE QUESTIONS SPECIFICALLY ON THE DELTA DE ANZA PROJECT, HE CAN ANSWER THOSE AS WELL.

[00:10:05]

SURE. IT SHOULD SAY 582, AND I THINK IT'S A TYPO ON THE SLIDE, AND IT SHOULD SAY 582,405.96.

OH YES. THANK YOU.

THANK YOU FOR THE CONFUSION.

ALL RIGHT. QUESTIONS? YEAH. WELL, THIS SOUNDS LIKE A I MEAN, PITTSBURG'S PROJECTS ARE IN LINE WITH OUR WITH OUR WITH OUR PROJECTS TOO.

SO I THINK IT'S A GOOD DEAL.

MY OTHER QUESTION IS WAS THERE ANY INTEREST EARNED? AND ON THE ON THE ACCOUNT THAT WHEN IT WAS IN ESCROW OR IT WAS HELD BY THE OTHER COMPANY, THE THIRD PARTY.

YES. SO ORIGINALLY IT WAS THE 500,000, AND SO OVER THE WHATEVER THAT WAS 15 YEARS, IT EARNED THE $82,000. OKAY.

YEAH. SO THAT'S SO THE WHOLE THING IS GOING.

YES, YES, AND THEN ANY FEES THAT WERE THERE, ANY FEES CHARGED BY THE THIRD HOLDING OR THE THIRD PARTY TO ADMINISTER THE MONEY? OH NOT THAT I WAS MADE AWARE OF THAT I COULD FIND IN OUR DOCUMENTS, AT LEAST.

YEAH. I JUST WANT TO MAKE SURE ALL THAT'S TAKEN CARE OF.

YES, YES, AND ALSO ON THAT NOTE I HAD WORKED WITH THE CITY OF PITTSBURG IN THEM RECEIVING CONFIRMATION FROM THE DEPARTMENT OF FINANCE THAT, YOU KNOW, ALL OBLIGATIONS HAD BEEN MET, THAT THERE WASN'T A NEED TO GO BACK TO THEM OR TO THE OVERSIGHT BOARD TO GET APPROVAL OR TO RENEGOTIATE OUR FUNDING AGREEMENT THAT ONCE WE RECEIVED THE FUNDS, WERE OBLIGATIONS ARE MET AND WERE OKAY.

GREAT. THANK YOU.

THAT'S IT FOR ME. ALL RIGHT.

OLIVIA, ANY QUESTIONS? I DO. YES. IS THAT OKAY? YEAH. OKAY. GO FOR IT.

SO I JUST WANT TO MAKE SURE I UNDERSTAND THIS CORRECTLY.

SO THIS WAS ORIGINALLY AN AGREEMENT FROM 1993, AND IT INCLUDED THESE THREE PROJECTS SPECIFICALLY IN 1993.

SO IN 1993, THERE'S A FISCAL AGREEMENT BETWEEN THE PARK DISTRICT AND THE REDEVELOPMENT AGENCY, WHICH LISTED NO PROJECTS, JUST THAT WE WOULD RECEIVE AT MINIMUM, THIS $500,000 TO BE USED FOR PROJECTS IN PITTSBURG AND THE PARK DISTRICT WOULD NEED TO ENTER INTO A SEPARATE AGREEMENT TO DETERMINE WHAT THOSE PROJECTS WOULD BE.

SO WE HAVE TWO PARALLEL AGREEMENTS, ONE FROM 1993 AND ONE FROM 2019 AND 2019, IS WHEN WE DETERMINED THOSE THREE PROJECTS, AND DID WE PROMISE IN 2019 THAT ALL THREE PROJECTS WOULD BE FULLY FUNDED, OR THAT THIS WAS JUST MORE ALONG THE LINES OF LIKE SEED MONEY TOWARDS THOSE PROJECTS? CORRECT. OR THE FIRST PART OF YOUR.

YES. WE DIDN'T MAKE ANY PROMISES.

NO, NO IT WAS FUNDING.

SO IT WAS POTENTIAL PROJECTS WITH ESTIMATED AMOUNTS KNOWING THAT THIS 582 WOULD NOT FULLY COVER ALL OF IT, AND WERE THESE THREE PROJECTS, WERE THEY MORE OF A LIST OF LIKE THESE ARE THE POSSIBILITIES OR DID WE SAY, OH YES, WE'RE DEFINITELY GOING TO DO ALL THREE OF THESE, OR IS THAT A LITTLE BIT.

IT WAS A LITTLE BIT FUZZY THEN, 2019.

I WAS NOT PART OF THOSE CONVERSATIONS, FROM WHAT I CAN TELL IN DOCUMENTATION, IS THAT THIS IS WHAT THE TWO PARTIES MUTUALLY AGREED.

LIKE, THESE ARE THREE PROJECTS WE KNOW WE WOULD LIKE TO COMPLETE.

THAT COULD BE IN A WORK PLAN THAT ARE ON THE HORIZON, THAT ARE HAPPENING IN THE IN THE VICINITY.

SO THEY'RE KEPT A LITTLE LIKE FOR THE PAVEMENT ONE, IT JUST SAYS PAVEMENT IMPROVEMENTS ALONG THE TRAIL, NOT SPECIFICALLY WHERE.

SO THAT THEY'RE A LITTLE VAGUE FOR THAT PURPOSE OF WANTING SOME FLEXIBILITY ON WHEN IT WOULD GET DONE AND WHO WOULD DO IT.

YEAH. I MEAN, I THINK WHAT YOU PRESENTED TODAY IS PRETTY STRAIGHTFORWARD, AND I SUPPORT IT.

AT LEAST IT SOUNDS STRAIGHTFORWARD FROM AN EAST BAY REGIONAL PARK DISTRICT PERSPECTIVE.

I WOULD JUST BE CURIOUS, THOUGH, IF IT'S VIEWED THE SAME WAY BY CITY OF PITTSBURG OR COMMUNITY STAKEHOLDERS IN PITTSBURG, IF THEY MIGHT INTERPRET THIS DIFFERENTLY, ESPECIALLY SINCE 2019 WASN'T REALLY THAT LONG AGO.

SO I DON'T KNOW IF THERE'S SOMEONE OUT THERE THAT HAS THIS, YOU KNOW, MAP OF THIS POTENTIAL SKY RANCH TRAIL AND IS, YOU KNOW, HOPEFUL THAT THIS IS GOING TO HAPPEN AND BE FULLY FUNDED BY THE PARK DISTRICT.

SO THERE MAY BE A COMMUNICATIONS PIECE TO KEEP IN MIND THAT I'M JUST NOT AWARE OF.

I'M JUST NOT FAMILIAR YOU KNOW, WITH WHAT MIGHT BE HAPPENING IN CITY OF PITTSBURG.

THAT WOULD BE SOMETHING THAT I WOULD BE RECOMMENDING THAT WE, YOU KNOW, JUST KIND OF KEEP AN EYE ON AND OR CHECK INTO BUT OTHERWISE, I'M WILLING TO SUPPORT THIS.

OKAY. NOTED.

I WILL EXPRESS WITH THE CITY HAVING COME TO US ASKING FOR THESE FUNDS KNOWING THAT ONCE THESE, THIS 582 IS DISTRIBUTED BACK TO THEM THAT WE'RE UNDER NO OBLIGATION TO COMPLETE THE OTHER PROJECTS.

[00:15:05]

JUST AS I JUST WANT TO THROW THAT OUT THERE AS WELL.

SO WE'RE NOT COMPLETELY, LIKE, BACKED OUT OF DOING ANY PAVING WORK, AND IS THAT SPECIFIC TO THE DELTA DE ANZA TRAIL OR JUST ANY TRAILS? COULD THAT ALSO INCLUDE IRON HORSE TRAIL IN CONTRA COSTA COUNTY? CORRECT. AS LONG AS IT'S IN THE SPECIFIC REGION, WE CAN USE IT ANYWHERE THAT NEEDS IT.

YEAH. OKAY.

THANK YOU. YEAH.

THAT 500,000 GETS STRETCHED PRETTY THIN.

THERE'S SO MANY NEEDS.

I THINK BASED ON WHAT I'VE OBSERVED IN THE CITY OF PITTSBURG.

THEY'RE DOING SOME GREAT WORK WITH BICYCLE INFRASTRUCTURE ALL OVER TOWN.

THAT, AND SO I THINK THIS PROJECT IS IN KEEPING WITH WHAT THEY'VE ALREADY BEEN DOING, AND SO WE'RE.

THIS IS A WAY FOR US TO HELP THEM HELP.

WELL, ACTUALLY THEY'RE HELPING, WE'RE HELPING THEM HELP US BECAUSE IT MAKES THE IT MAKES THE TRAIL CROSSINGS SO MUCH SAFER, WHICH IN TURN TENDS TO ENCOURAGE USAGE BY SOME FOLKS THAT MIGHT BE A LITTLE HESITANT ABOUT CROSSING STREETS.

YOU KNOW, IF YOU CAN'T CROSS A STREET WITH A GRADE CROSSING OVER IT.

YOU KNOW, YOU MIGHT YOU WOULD, THEN YOU REALLY NEED TO DO SOMETHING ELSE IN TERMS OF LIGHTING AND STRIPING, AND THIS IS LIKE THE WHOLE ENCHILADA.

I MEAN, THIS HAS, IT JUST THROWS PAINT AND ALL THAT STUFF.

IT THROWS IT ALL OUT THERE AND JUST REALLY MAKES IT OBVIOUS THAT WHEN YOU'RE DRIVING A VEHICLE DOWN THE ROAD, THERE'S A TRAIL COMING UP HERE AND WE NEED TO BE AWARE.

SO YEAH, I SUPPORT THIS AND I APPRECIATE THE GREAT WORK THAT PITTSBURG IS DOING TO SUPPORT US IN PROVIDING A SAFE YOU KNOW, AS YOU SAY, MULTIMODAL TRAIL.

SO IF THERE'S NO OTHER COMMENTS OR QUESTIONS, I WOULD ASK FOR A MOTION TO APPROVE THIS ITEM.

DO I HAVE A MOTION TO APPROVE? I'LL MOVE. YOU'LL MOVE, AND A SECOND? I'LL SECOND AND A SECOND.

ALL IN FAVOR? AYE.

GREAT. THANK YOU.

I DID HAVE A FOLLOW UP QUESTION FOR YOU ON THIS ITEM BEFORE YOU MOVE TO YOUR NEXT ITEM.

SO WITH THIS FAVORABLE RECOMMENDATION, THIS ITEM IS SCHEDULED TO GO TO THE FULL BOARD OF DIRECTORS NOW ON OCTOBER 1ST, AND I WANTED TO ASK THE COMMITTEE IF THERE WAS A PREFERENCE OR A RECOMMENDATION ON THIS BEING UNDER CONSENT OR NON CONSENT PER THE BOARD OPERATING GUIDELINES, IT COULD GO ONE OF IT COULD GO EITHER WAY DUE TO THE DOLLAR AMOUNT, IT COULD GO UNDER NON CONSENT BECAUSE IT'S OVER 500,000, BUT AS IT'S RECEIVED YOUR RECOMMENDATION IT COULD ALSO GO UNDER CONSENT.

SO I WANTED TO SEE IF THERE WAS A PREFERENCE ON THIS THIS PRESENTATION THEN GOING TO THE FULL BOARD.

DOES ANYBODY HAVE A STRONG PREFERENCE ABOUT THAT.

JUST BECAUSE THE AMOUNT I THINK IT SHOULD GO OUTSIDE THE CONSENT.

YEAH OKAY.

YEAH I AGREE. WONDERFUL.

OKAY. SO YEAH IT'S A PRETTY GOOD CHUNK OF CHANGE THERE.

OKAY. OKAY. GREAT.

THANK YOU. ALL RIGHT. THANK YOU.

SO WE VOTED IN THE AFFIRMATIVE ON THAT.

THANK YOU. OKAY.

MOVING ON NOW TO ITEM FOUR B, WHICH IS RECOMMENDATION TO THE BOARD OF DIRECTORS TO ACCEPT INVESTMENT REPORT AND MARKET REVIEW FOR THE PERIOD UP TO JUNE 30TH, 2024.

WE HAVE DEBORAH HERE.

ALL RIGHT. GOOD AFTERNOON.

GOOD MORNING. I'M DEBORAH SPAULDING, ASSISTANT GENERAL MANAGER OF FINANCE AND MANAGEMENT SERVICES, AND LET ME JUST TRY AND GET THE REPORT UP OR THE PRESENTATION UP HERE.

SO AS USUAL, I'M GOING TO START OUT BY GIVING YOU A BRIEF OVERVIEW OF THE PARK DISTRICT'S INVESTMENTS AS OF JUNE 30TH, AND THEN WE'LL HAVE MONIQUE SPIKE, WHO'S HERE FROM PFM, COME UP AND GIVE EVEN MORE DETAIL AND TALK ABOUT THE INVESTMENT OUTLOOK. ALMOST THERE.

SORRY. ALL RIGHT.

SO WE'RE GOING TO PRETTY MUCH JUST BE WALKING THROUGH THE TABLE THAT'S ON PAGE 13 OF YOUR PACKET, AND SO WE START OUT WALKING THROUGH THE VERY TOP PART OF THIS TABLE, THE LIQUIDITY PORTFOLIO.

SO THESE ARE FUNDS THAT ARE EITHER CASH OR THEY'RE READILY CONVERTIBLE TO CASH.

SO THE MAIN HIGHLIGHT TO DRAW YOUR ATTENTION TO HERE IS THAT BETWEEN MARCH 31ST AND JUNE 30TH, WE RECEIVED OUR PROPERTY TAX REVENUES, AND

[00:20:01]

MARCH 31ST TO 198 MILLION AT JUNE 30TH, AND IT'S GETTING A LITTLE BIT CUT OFF DOWN AT THE BOTTOM, BUT YOU CAN SEE THAT LINE ITEM THERE.

SO THIS IS TYPICAL.

SO WE GET OUR TWO MAJOR PROPERTY TAX PAYMENTS IN APRIL AND THEN IN DECEMBER, AND SO WE'RE DRAWING DOWN THOSE FUNDS BETWEEN APRIL AND DECEMBER.

MOVING MOVING DOWN A LITTLE BIT FURTHER ON THE PAGE, LOOKING AT OUR INVESTED SECURITIES, FOR THE MOST PART, OUR INVESTMENTS ARE WE HAVE WE HAVE ABOUT THE SAME AMOUNT INVESTED IN JUNE 30TH AS WE DID AT MARCH 31ST, BUT SOME SLIGHT CHANGES, SLIGHT DECREASE IN CORPORATE BONDS AND NOTES AND A SLIGHT INCREASE IN FEDERAL AGENCIES AND MONIQUE WILL BE SPEAKING MORE ABOUT THIS IN HER PRESENTATION, AND THEN LASTLY, AT THE BOTTOM OF THIS TABLE LOOKING AT FUNDS HELD IN TRUST, AND YOU CAN SEE WE'VE GOT OUR PROJECT BOND FUNDS HERE.

SO WE YOU CAN SEE BETWEEN THE END OF MARCH AND THE END OF JUNE, WE WERE DRAWING DOWN ON THOSE BOND FUNDS WHICH ARE HELD BY OUR TRUSTEE.

SO WE'RE DOING WORK ON PROJECTS AND THEN WE SEEK REIMBURSEMENT FROM OUR TRUSTEE.

SO YOU CAN SEE WE DREW DOWN ON THOSE BY ABOUT 9 MILLION, AND THEN LOOKING AT OUR DEBT SERVICE FUNDS, WHICH ARE ALSO HELD BY A TRUSTEE, YOU CAN SEE A BIG INCREASE THERE, AND THAT'S AGAIN THE TAX LEVIES BEING COLLECTED THROUGH PROPERTY TAXES.

SO WE NOW HAVE FUNDS ON HAND WE'RE ABLE TO MAKE OUR SEPTEMBER DEBT SERVICE PAYMENT.

SO I'LL TURN IT OVER TO MONIQUE NEXT, AND THEN AT THE END WE WILL NEED A RECOMMENDATION.

DO YOU HAVE A QUESTION? IT LOOKS LIKE.

YEAH. YEAH.

QUICK QUESTION, IN THE FISCAL IMPACT PART OF THE PACKET, IT SAYS WE DON'T WE DON'T BUDGET FOR INTEREST EARNED. SO WHERE IS THAT CAPTURED IN THE BUDGET OR IS IT IN THE REVENUE STREAM OR.

YEAH. SO WE'LL BE TALKING MORE ABOUT THAT ON WHAT AGENDA ITEM IS IT, BUT IT'S A LATER ITEM IN YOUR PACKET.

WE'RE TALKING ABOUT THIS. WE'LL DO THE SECOND QUARTER WHERE WE ARE REVENUES BUDGET TO BUDGET TO ACTUALS, AND WE'LL TALK ABOUT REVENUES, AND YEAH, WE'RE NO LONGER BUDGETING FOR OUR INVESTMENT EARNINGS BECAUSE IT WAS SO VARIABLE, BUT IT'S COMING IN.

SO WHAT HAPPENS IS IT'S UNBUDGETED AT THE END OF THE YEAR, WE'RE GOING TO, YOU KNOW, 99% SURE SHOW A SURPLUS BECAUSE WE'LL HAVE REVENUES OVER EXPENDITURES, QUITE SIGNIFICANT, AND MOSTLY IT'S GOING TO BE RELATED TO INVESTMENT EARNINGS.

GREAT. THANK YOU SO MUCH.

WE'LL TALK MORE ABOUT THAT AND THAT ITEM A LITTLE BIT MORE.

OKAY. THANK YOU. ALL RIGHT.

I THINK SO FOR ME.

GOOD MORNING. GOOD MORNING.

PLEASURE TO BE WITH YOU.

MY NAME IS MONIQUE SPIKE.

I MANAGE OUR CALIFORNIA PRACTICE AND HAVE WORKED WITH THE DISTRICT FOR A NUMBER OF YEARS.

SO GRATEFUL TO BE ABLE TO PRESENT TO YOU THIS MORNING.

I DID THE WRONG THING, AND IS MY PRESENTATION LOADED ON HERE? TECHNICAL DIFFICULTIES.

PLEASE EXCUSE US.

HERE IT IS. THANK YOU.

OH, HERE WE GO.

ALL RIGHT. THANK YOU.

SO. ALL RIGHT, SO WHAT WE DO, EACH PRESENTATION IS WE START WITH AN OVERVIEW OF THE ECONOMIC CONDITIONS.

IT REALLY HELPS SET THE STAGE FOR WHAT WAS HAPPENING IN THE MARKETS AND HOW IT INFLUENCED OUR INVESTMENT DECISIONS.

SO I'D LIKE TO START WITH CURRENT MARKET THEMES.

NOW, DO KEEP IN MIND THAT THESE CURRENT MARKET THEMES ARE AS OF THE END OF THE SECOND QUARTER.

SO JUNE 30TH, AND ONE THING I WILL HIGHLIGHT IS THAT THINGS HAVE SHIFTED DRAMATICALLY SINCE THE END OF THE SECOND QUARTER.

DURING THE SECOND QUARTER, WHAT HAD BEEN HAPPENING IS FOLKS HAD BEEN SEEING, YOU KNOW, MODERATING ECONOMIC GROWTH, BUT THEN A LOT OF STRENGTH IN THE ECONOMY. INFLATION HAD BEEN MOVING TOWARDS THE FED'S 2% TARGET.

LABOR MARKETS CONTINUE TO SHOW GREAT RESILIENCY.

SINCE THEN, I THINK THAT'S STILL A GENERAL CASE THAT, YOU KNOW, THE ECONOMY HAS BEEN RESILIENT, BUT THERE HAD BEEN A FEW MORE SIGNS

[00:25:03]

SO SOME THINGS TO HIGHLIGHT AND I'LL HIGHLIGHT THIS IN THE PRESENTATION.

WHAT YOU WOULD HAVE HEARD AT THE END OF JUNE 30TH IS THAT THE FED HAD DRASTICALLY REDUCED THEIR EXPECTATIONS OF HOW MANY RATE CUTS THEY ANTICIPATED, AND THAT WAS FROM THREE RATE CUTS THAT THEY SUGGESTED WOULD HAPPEN IN 2024.

TO THOUGHT THAT PERHAPS THERE'D BE ONE RATE CUT BY YEAR END.

THE MARKET'S EXPECTATIONS ALSO DWINDLED TO 1 OR 2 RATE CUTS.

NOW, WE'VE KNOWN SINCE THEN THAT THE FED ACTUALLY CAME OUT OF THE GATE IN SEPTEMBER WITH A 50 BASIS POINT RATE CUT, WHICH WAS DRAMATICALLY DIFFERENT THAN WHAT THEY WERE COMMUNICATING JUST A COUPLE OF MONTHS AGO AND SO WHEN WE TALK ABOUT TREASURY YIELDS HERE ON THIS SLIDE, YOU'LL SEE THAT DURING THE QUARTER, THE PERIOD BETWEEN MARCH 31ST AND JUNE 30TH, THAT INTEREST RATES ACTUALLY ROSE.

YIELDS ON TEN YEAR TREASURIES ROSE 13 TO 20 BASIS POINTS.

SORRY 13 BASIS POINTS OVER THE QUARTER, AND YIELDS ON TEN YEAR TREASURIES ROSE 20 BASIS POINTS DURING THE QUARTER.

THE YIELD CURVE DID REMAIN INVERTED, MEANING THAT SHORT TERM RATES WERE HIGHER THAN LONG TERM RATES, AND WE ALSO SAW SPREADS, AND THAT'S THE DIFFERENCE BETWEEN WHAT YOU WOULD EARN ON A TREASURY BOND AND A SIMILAR MATURITY CREDIT INSTRUMENT, LIKE A CORPORATE BOND OR A FEDERAL AGENCY BOND, ETC..

TIGHTEN MEANING THAT INVESTORS WERE DEMANDING LESS INCOME FOR MOVING OUT OF THE RISK FREE ASSET.

NOW, AS I MOVE THROUGH THE PRESENTATION, I'LL SORT OF, YOU KNOW, UPDATE US ON WHERE THINGS SIT NOW, BECAUSE AGAIN, I THINK IT'S VERY, VERY DIFFERENT THAN WHAT WE ANTICIPATED. SO THE FIRST SLIDE IS WE WANT TO TALK ABOUT THE CITY SURPRISE INDEX.

NOW THE CITY SURPRISE INDEX IS A METRIC THAT MEASURES HOW ECONOMIC RELEASES CAME OUT RELATIVE TO WHAT THEY WERE FORECASTED TO BE.

SO A READING ABOVE ZERO ON THIS CHART, WHICH IS SHOWN IN THE DARK BLUE AREA, INDICATES RELEASES ARE COMING IN ABOVE EXPECTATIONS, AND NOW THAT EXPECTATION IS SIMPLY SORT OF A QUANTITATIVE METRIC.

SO FOR EXAMPLE, WE SEE HERE THAT POSITIVE SURPRISES MEANING THAT LABOR, WE ARE SEEING MORE LABOR GROWTH.

SO IF YOU HAD EXPECTED, LET'S SAY 100,000 JOBS IN THE INDEX CAME OUT AND THERE WAS 200,000 JOBS, THAT'S A SURPRISE.

THAT'S A POSITIVE SURPRISE.

GDP GROWTH WAS ALSO STRONG, HIGHER THAN ANTICIPATED, BUT IN THIS POSITIVE SURPRISES, INFLATION BEING HOT IS ALSO A POSITIVE SURPRISE, MEANING THE INFLATION NUMBERS WERE COMING IN HIGHER THAN ANTICIPATED.

NOW ON THIS CHART, I THINK YOU CAN SEE VISUALLY THAT GENERALLY THERE'S A LOT OF STRENGTH IN THE ECONOMY BETWEEN 22 AND 23, AND THAT TRANSITION BEGAN MODERATING IN 2024, MEANING THAT THE ECONOMIC RELEASES WERE COMING IN COOLER THAN EXPECTED.

SO LABOR MARKET COOLING, FOR EXAMPLE, INFLATION COMING DOWN AND GDP GROWTH SLOWING, AND THAT'S WHY WE SEE A LOT MORE BLUE.

NOW THE MODERATION IN DATA.

THIS NEGATIVE SURPRISE IS WHERE THE FED REALLY STARTED TO SAY, MAYBE WE SHOULD BE A LITTLE BIT MORE AGGRESSIVE THAN WE WERE SUGGESTING.

EXCUSE ME. NOW LET'S MOVE ON TO INFLATION.

NOW INFLATION OF COURSE, IS THE SORT OF KEY INDICATOR ALONG WITH LABOR THAT THE FED IS LOOKING TOWARDS.

NOW IN THIS CHART WE SHOW BOTH CORE CPI WHICH IS THE HEADLINE INFLATION NUMBER, AND CORE PCE WHICH IS PERSONAL CONSUMPTION EXPENDITURE INDEX, AND THE FED PREFERS TO LOOK AT PCE.

THAT'S THEIR PREFERRED INFLATION METRIC, AND PCE LIKE CPI LOOKS AT, YOU KNOW, A BASKET OF GOODS, BUT ALSO INCLUDES OTHER COSTS THAT CONSUMERS MAY BE PAYING FOR, LIKE MEDICAL INSURANCE AND THINGS LIKE THAT, AND COSTS THAT ARE BEING PAID FOR ON THEIR BEHALF, LIKE EMPLOYERS CONTRIBUTIONS TO MEDICAL INSURANCE.

NOW, WHAT I NOTE ABOUT THIS IS THAT BOTH OF THESE METRICS ARE TRENDING TOWARDS THE FED'S 2% TARGET FOR INFLATION.

ONE OF THE THINGS THAT'S NOT NECESSARILY SHOWN IN THIS CHART, BUT REALLY BEARS OUT IN THE NUMBERS, IS THAT SHELTER, THE COST OF HOUSING, IS A STICKING POINT IN INFLATION.

IT'S STILL RELATIVELY HIGH, AND THAT'S CONTRIBUTING TO 74% OF THE YEAR OVER YEAR CHANGE IN THE INFLATION NUMBERS.

NOW WHILE THIS IS EXPECTED TO NORMALIZE AT SOME POINT, IT IS CAUSING OVERALL INFLATION FIGURES TO BE HIGHER THAN ANTICIPATED.

[00:30:06]

OH IS THERE IS THERE AN INDEX THAT CAPTURES FOOD AND ENERGY? YEAH.

YES. THERE IS.

SO THIS THIS METRIC IS CORE CPI, WHICH EXCLUDES FOOD AND ENERGY.

THE REGULAR CPI AND PCE METRICS DO INCLUDE THOSE FIGURES.

IRONICALLY, THEY TAKE OUT FOOD AND ENERGY BECAUSE THOSE ARE THE MOST VOLATILE PARTS OF THIS INDEX, AND, YOU KNOW, HAVE A NUMBER OF DIFFERENT THINGS THAT INFLUENCE THOSE PRICES.

NOW, IRONICALLY, OF COURSE, THAT IS WHAT I THINK EVERYDAY CONSUMERS ARE DEALING WITH THE MOST WHEN THEY'RE THINKING ABOUT INFLATION, BUT IN TERMS OF GETTING A SENSE OF THE OVERALL COST OF PRODUCTION AND THE COST OF THE SUPPLY OF GOODS AND SERVICES THE FED DOES LIKE TO LOOK AT THE CORE NUMBER.

YEAH. THANK YOU FOR THE CLARIFICATION.

YEAH. BECAUSE I WAS AT A CSDA BREAKOUT SESSION AND THERE WAS ALMOST AN ARGUMENT BROKE OUT BECAUSE SOMEONE WAS PRESENTING THE PCE AND A MEMBER OF THE OF THE PARTICIPANTS THERE WAS SAYING, YOU KNOW, I DISAGREE WITH YOUR NUMBERS, BUT BUT THEY WERE LOOKING AT, YOU KNOW, ENERGY AND FOOD.

SO YEAH, DRASTICALLY DIFFERENT NUMBERS, AND ONE THING THAT ONE OF THE THINGS I DO LIKE TO POINT OUT, TOO, ESPECIALLY, YOU KNOW, IF I'M AT A CITY COUNCIL WHERE THERE'S SORT OF, YOU KNOW, RESIDENTS TEND TO ENJOY THOSE OR ATTEND THOSE MORE OFTEN IS THAT, YOU KNOW, THE INFLATION METRICS HERE DON'T REALLY SPEAK TO, YOU KNOW, PRICES COMING DOWN.

YOU KNOW, THIS IS THE RATE OF PRICE CHANGE.

SO IT'S STILL POSITIVE.

SO WE'RE STILL TALKING ABOUT PRICES INCREASING OVER WHERE THEY WERE PRIOR NOT NECESSARILY A DECLINE IN PRICES.

SO INFLATION COMING DOWN SIMPLY MEANS THE RATE OF PRICE CHANGE IS NOT AS HIGH AS IT USED TO BE.

THANK YOU. THANK YOU.

DIRECTOR SANWONG, DID YOU HAVE A QUESTION? YES, FROM WHAT I UNDERSTAND, NEITHER OF THESE TWO INDICES ALSO REFLECT THINGS LIKE HOMEOWNERS AND AUTO INSURANCE AND INCREASES ON THAT FRONT.

WELL, THE PRICE OF SHELTER IS OKAY.

SO THAT WOULD BE THOSE ARE THOSE ARE INCLUDED THERE BECAUSE I READ SOMEWHERE THAT HOMEOWNERS INSURANCE ISN'T ACTUALLY INCLUDED IN SOME OF THE INDEXES, BUT MAYBE YEAH, HOMEOWNERS INSURANCE MAY NOT BE EXPLICITLY, BUT THERE ARE SOME COMPONENTS TO SHELTER, AND I CAN DIG A LITTLE MORE TO SEE EXACTLY WHAT'S INCLUDED IN THAT SHELTER COMPONENT.

WELL, AND I ALSO WONDER, SO I KNOW THAT THE PURPOSE OF THIS MARKET UPDATE TODAY IS TO THINK ABOUT THE INVESTMENTS AND, AND HOW AND WHERE EAST BAY REGIONAL PARK DISTRICT IS INVESTING THE FUNDS, BUT IT'S NOT REALLY LOOKING AT NECESSARILY I GUESS THE LOCAL ECONOMY FROM THE PERSPECTIVE OF THE SENTIMENT OF, YOU KNOW, PEOPLE WHO LIVE IN THE EAST BAY, AND I THINK THERE ALSO COULD BE.

SO I THINK THAT'S IMPORTANT TO CLARIFY, ACTUALLY, FOR TODAY'S PRESENTATION, BECAUSE THERE COULD BE SOME CHANGES.

YOU KNOW, FOR EXAMPLE, YOU HAD THE COMMENT ABOUT YOU KNOW, LABOR GROWTH WAS MORE THAN EXPECTED, AND THAT'S FOR THE ENTIRE UNITED STATES.

THAT'S CORRECT, AND IT MIGHT BE A LITTLE BIT DIFFERENT IN THE BAY AREA, AND THAT'S NOT THE PURPOSE OF THIS PARTICULAR PRESENTATION.

YOU KNOW, IT MAY BE SOMETHING WE MAY WANT TO CONSIDER AS A BOARD IN TERMS OF TRYING TO UNDERSTAND, YOU KNOW, HOW OUR RESIDENTS ARE FEELING IN TERMS OF JOBS AND HOUSING AND THE LOCAL ECONOMY. I THINK THAT THERE IS SOME POLLING DATA THAT'S COMING OUT ABOUT THIS IN REGARDS TO THE UPCOMING ELECTION, WHERE PEOPLE FEEL VERY CONFIDENT ABOUT, YOU KNOW, OUR FEDERAL ECONOMY AND OUR NATIONAL ECONOMY, BUT MAYBE HAVE A DIFFERENT POINT OF VIEW ABOUT WHAT'S HAPPENING LOCALLY, BUT THAT'S NOT THE PURPOSE OF TODAY.

YEAH. NO, AND THAT'S A GREAT POINT.

YOU'LL FIND THAT THE NATIONWIDE PICTURE IS VERY POSITIVE, RIGHT? YOU KNOW, THE ECONOMY IS GROWING.

LABOR MARKETS ARE COMING BACK INTO BALANCE.

IT'S A FAIRLY ROSY OUTLOOK, AND WE'VE SORT OF, YOU KNOW, DONE THE IMPOSSIBLE BY, YOU KNOW, HAVING HIGH INTEREST RATES AND STILL GENERALLY BEING OKAY, BUT THAT DOES NOT NECESSARILY REFLECT THE REALITY OF CERTAIN COMMUNITIES, INDIVIDUAL COMMUNITIES IN THE UNITED STATES.

THANK YOU. ALL RIGHT.

WELL, WITH THAT SAID, LABOR IS A GREAT PLACE TO TALK ABOUT THE DIFFERENCES BETWEEN FEDERAL AND LOCAL.

SO THE OVERALL U.S.

LABOR MARKET IS COMING INTO BETTER BALANCE.

ON THE LEFT SIDE OF THIS PAGE, WE SHOW THAT THE PACE OF JOB GROWTH IN THE SECOND QUARTER DID SLOW A LITTLE BIT, BUT IT STILL REMAINS ROBUST.

WE NOTE THAT, YOU KNOW, JOBS HAVE BEEN REVISED DOWNWARD.

YOU MAY HAVE HEARD OF THE DRASTIC DOWNWARD REVISION IN JOBS BY 818,000.

[00:35:03]

WHAT THAT MEANS IS THAT EMPLOYERS HAVE CONTINUED TO ADD TO THEIR PAYROLL.

THE UNEMPLOYMENT RATE IS ALSO STILL RELATIVELY LOW ON THE CHART HERE YOU CAN SEE THAT THE UNEMPLOYMENT RATE WAS 4.1% IN JUNE OF 2024. SINCE THEN, WE'VE SEEN SOME MORE RECENT JOBS RELEASES.

THE UNEMPLOYMENT RATE IS CURRENTLY 4.2%.

THAT WAS THE MOST RECENT REPORT FOR AUGUST, AND THAT WAS ALSO DOWN A LITTLE BIT FROM JULY, WHERE IT POPPED UP TO 4.3.

SO WE'RE CURRENTLY LOOKING AT 4.2% UNEMPLOYMENT RATE.

WAGES CONTINUE TO GROW AS WELL, AND THE FED IS REALLY SENSITIVE ABOUT ITS DUAL MANDATE, WHICH IS, YOU KNOW, EQUALIZED OR EQUILIBRIUM IN THE UNEMPLOYMENT MARKET OR IN THE LABOR MARKET AND THE FED FUNDS TARGET RATE AS IT RELATES TO INFLATION.

ON THE RIGHT SIDE, THE WORKER DEMAND GAP IS ALSO COMING INTO BALANCE.

THE AMOUNT OF AVAILABLE JOBS PER UNEMPLOYED PERSON IS COMING BACK DOWN TO 1.22, AND SO THAT SAYS THAT THERE'S STILL A JOB AVAILABLE FOR EVERYONE WHO'S LOOKING FOR A JOB, AND THIS DOESN'T SPEAK TO, YOU KNOW, EXACTLY LIKE A SKILL MATCH, BUT GENERALLY THERE ARE JOBS AVAILABLE FOR FOLKS WHO WANT THEM.

ANOTHER THING TO TALK ABOUT BRIEFLY IS THE INCENTIVE TO SWITCH JOBS.

NOW, IRONICALLY, AGAIN, I'LL USE THE TERM IRONICALLY A LOT BECAUSE IN SOME WAYS THESE METRICS ARE SPEAKING MORE TO SORT OF EMPLOYERS WHO ARE LOOKING, AND SO IT'S GOOD NEWS FOR EMPLOYERS.

WHAT THIS WHAT THIS SHOWS IS THE WAGE DIFFERENCE BETWEEN FOLKS WHO STAY AT THEIR CURRENT JOBS AND FOLKS WHO SWITCHED JOBS, AND SO AS YOU CAN SEE, THE TOP LINE SHOWS THAT THERE IS A HUGE GAP BETWEEN FOLKS WHO WERE SWITCHING JOBS.

THE INCENTIVE TO GROW YOUR WAGE BY LEAVING YOUR PLACE OF EMPLOYMENT WAS REALLY HIGH.

BACK 21, 22, 23.

THE AMOUNT OF JOBS AVAILABLE FOR EVERY WORKER, TOO, WAS HIGH.

SO THERE'S A LOT OF STRESS ON EMPLOYERS BEING ABLE TO RECRUIT AND BEING ABLE TO RETAIN EMPLOYEES BUT YOU CAN SEE THAT'S PUT INTO A LITTLE BIT BETTER BALANCE WITH THE DIFFERENCE BETWEEN FOLKS WHO STAY AT THEIR JOBS EARNING HIGHER WAGES AND THOSE WHO ARE SWITCHING, GETTING A LITTLE BIT CLOSER ON THIS CHART.

SO THAT'S A NET POSITIVE FOR STABILITY IN THE JOB MARKET.

NOW THE CONSUMER IS THE BIG DRIVER OF THE ECONOMY.

I THINK IN A LOT OF WAYS WE'VE BEEN ABLE TO SUSTAIN WHAT WE CALL THE SOFT LANDING BECAUSE THE CONSUMER HAS BEEN RELATIVELY STRONG, AND BY STRONG WE MEAN CONTINUING TO SPEND THEIR DOLLARS.

SEEING WAGE GROWTH AS WELL, AND SO RETAIL SALES HAS CONTINUED TO BE ON AN UPWARD TRAJECTORY.

THAT HAS BEEN POSITIVE.

NOW THERE'S BEEN SOME NEWS ABOUT THE CONSUMER BEING A LITTLE BIT MORE FRUGAL LATELY, AND AGAIN, THAT'S WHERE THE FED PROBABLY SHIFTED SOME OF THEIR PRIORITY IN TERMS OF REDUCING THAT FED FUNDS TARGET RATE ABOVE WHERE THEY HAD EXPECTED TO BE.

NOW, I WON'T SPEND TOO MUCH TIME ON THIS SLIDE BECAUSE THINGS HAVE SHIFTED A LITTLE BIT, BUT I WILL SAY THAT, YOU KNOW, ALL OF THE METRICS THAT WE HAVE BEEN TALKING ABOUT, THE FACT THAT INFLATION WAS COOLING, LABOR MARKET WAS NORMALIZING, SPENDING WAS MODERATING A BIT, ESSENTIALLY HAD THE MARKETS PRICING IN LESS OF A RECESSION RISK, AND SO, IN OTHER WORDS, THESE INVESTMENT UNIVERSE PRICING METRICS BASICALLY SHOW THAT THE MARKET WAS GETTING LESS CONCERNED ABOUT A RECESSION IN THE MARKET, SO INVESTMENT GRADE SPREADS NARROWED AGAIN.

THE PRICE THAT FOLKS WERE DEMANDING FOR TAKING ON CREDIT RISK DWINDLED FROM 149 BASIS POINTS IN JUNE OF 2022 TO 86 BASIS POINTS IN JUNE OF 2024, FOR EXAMPLE.

NOW THE FED DOT PLOT.

THIS IS THE FED'S ESTIMATION OF WHAT THEY WOULD LIKE TO SEE INTEREST RATES DO OVER TIME.

BRIEFLY, TO TELL YOU HOW TO READ THIS SLIDE.

EACH OF THE YEARS ON THE BOTTOM AND WE SORT OF SUMMARIZE HOW MANY CUTS THE FED GOVERNORS WERE TELLING US BASED ON THE INDIVIDUAL DOTS ON THIS DOT PLOT. SO AGAIN, I ALREADY MENTIONED THAT THE DOT PLOT THAT THEY RELEASED IN JUNE SHOWED ONLY ONE EXPECTED RATE CUT IN 2024, AND THAT HAS SHIFTED DRAMATICALLY. ESSENTIALLY, THE FED HAS ALREADY ENACTED A 50 BASIS POINT RATE CUTS, AND THEIR PROJECTIONS NOW INDICATE FOUR CUTS EXPECTED IN 2024.

SO WE ALREADY HAD TWO OF THOSE.

[00:40:01]

SO THAT'S JUST A TREMENDOUS SHIFT IN INTEREST RATE EXPECTATION.

THEY ALSO UPDATED THEIR ECONOMIC PROJECTIONS.

SO THESE WERE THE PROJECTIONS RELEASED IN JUNE.

I'LL SPEAK ABOUT WHAT THEY RECENTLY RELEASED IN SEPTEMBER.

ESSENTIALLY ALL THE MEDIUM PROJECTIONS ARE LOWER THAN WHAT'S REFLECTED HERE, AND THAT'S CONSISTENT WITH THEIR EXPECTATIONS FOR LOWER INFLATION IN A HIGHER UNEMPLOYMENT RATE.

NOW TALKING ABOUT TREASURY YIELDS, AS I MENTIONED, THE TWO YEAR TREASURIES DURING THE QUARTER MOVED UP ABOUT 13 BASIS POINTS, AND YOU CAN SEE THAT ON THIS CHART THE DOTTED LINE IS MARCH 31ST.

THE SOLID BLUE LINE IS JUNE 30TH AND THE TWO YEAR ENDED THE QUARTER IN JUNE 30TH AT A 4.75 RATE.

THE TWO YEAR TO DATE IS 3.54%.

SO JUST AGAIN, A SIGNIFICANT SHIFT DOWN IN INTEREST RATES.

SO WHEN WE COME BACK AND TALK TO YOU ABOUT THE SEPTEMBER 30TH REPORT, WE'LL HAVE SOME GRAPHS TO SHOW HOW DRASTIC THAT WAS.

THE GOOD NEWS, THOUGH, IS THAT THE YIELD CURVE IS STARTING TO RETURN TO A MORE POSITIVE SLOPE THAN IS WHAT IS REFLECTED HERE, AND SO THE YOU KNOW, NORMALIZATION OF THE YIELD CURVE IS CONTINUING.

SO INVESTMENT SPREADS BETWEEN SECTORS HAVE TIGHTENED.

I SPOKE ABOUT THAT A NUMBER OF TIMES.

HERE WE SHOW YIELD SPREADS BETWEEN GENERALLY THE TYPES OF ASSETS THAT WE'RE BUYING FOR THE DISTRICT'S PORTFOLIO.

THEY'VE ALL COME IN LINE WITH MARKET EXPECTATIONS.

SO IN TERMS OF RETURNS FOR THE SECOND QUARTER RETURNS ACROSS THE BOARD WERE POSITIVE, WHICH WAS A GOOD SIGN.

WE HAD DECENT RETURNS IN THE DISTRICT'S PORTFOLIO, AND YOU CAN SEE THAT'S ACROSS ALL SECTORS THAT WE'RE GENERALLY CONSIDERING INVESTING IN.

NOW THERE ARE ADDITIONAL MATERIALS IN THE MARKET UPDATE.

WE TALK ABOUT FACTORS TO CONSIDER.

YOU CAN REVIEW THOSE.

WE ADD JUST ADDITIONAL DETAIL FOR YOU ON OUR OUTLOOK FOR THE INDIVIDUAL SECTORS, BUT I'D LIKE TO JUMP INTO THE PORTFOLIO BRIEFLY.

THE PORTFOLIO OF COURSE IS IN COMPLIANCE WITH THE DISTRICT'S INVESTMENT POLICY AND THE CALIFORNIA GOVERNMENT CODE.

IF YOU LOOK AT A SNAPSHOT OF THE PORTFOLIO AT JUNE 30TH, THE PORTFOLIO HAD APPROXIMATELY $161.5 MILLION INVESTED AND THE DONUT CHART TO THE RIGHT SHOWS YOU IT WAS WELL-DIVERSIFIED ACROSS SECTORS WITH AN AVERAGE CREDIT QUALITY OF AA.

OUR GOAL HAS BEEN TO BE NEUTRAL IN TERMS OF MATURITY AND DURATION DISTRIBUTION, WHICH YOU CAN SEE ON THE BOTTOM.

WE ESSENTIALLY REALLY WANT TO HUG THE MATURITY STRUCTURE OF THE BENCHMARK, WHICH IS THE 1 TO 5 YEAR US TREASURY INDEX.

IN TERMS OF PORTFOLIO ACTIVITY.

THIS CHART VISUALLY SHOWS YOU ESSENTIALLY WHAT WAS MATURING OR SOLD OUT OF THE PORTFOLIO IN GRAY AND WHAT WAS PURCHASED IN BLUE.

WE CONTINUE TO FOCUS ON LOCKING IN YIELDS WHILE WE HAD THEM AVAILABLE.

SO WE PURCHASED A NUMBER OF TREASURY SECURITIES ON AVERAGE WITH YIELDS OF 4.5%.

WE PURCHASED ASSET BACKED SECURITIES WITH YIELDS BETWEEN 5.26 AND 5.35% AND THEN CORPORATE NOTES AND AGENCIES, SO WE WERE ABLE TO REALLY LOCK IN SOME VERY ATTRACTIVE YIELDS IN THE PORTFOLIO BEFORE RATES DECLINED, AND WE'RE REALLY HAPPY ABOUT THAT.

I'M THE PORTFOLIO PERFORMANCE HAS BEEN GREAT.

WE RETURNED FOR THE THREE MONTHS 86 BASIS POINTS VERSUS THE BENCHMARK RETURN OF 82 BASIS POINTS, AND ON A TRAILING BASIS YOU CAN SEE REALLY STRONG PERFORMANCE IN THE PORTFOLIO.

I'M ON AN ACCRUAL BASIS AGAIN 1.5 I'M SORRY 1.45 MILLION IN TOTAL EARNINGS FOR THE PORTFOLIO.

NOW I'LL SPEAK ABOUT ESG BRIEFLY.

WE DO HAVE AN ADDITIONAL MANDATE FOR THE DISTRICT THAT HELPS THE INVESTMENT PORTFOLIO FOCUS ON ENVIRONMENTAL, SOCIAL AND GOVERNANCE FACTORS.

HERE WE GO. THIS IS A LOT OF TEXT, SO I WILL SUMMARIZE IT IN WORDS FOR YOU.

THE RISK RATING OF THE PORTFOLIO MEASURES ECONOMIC VALUE RISK BASED ON ESG FACTORS.

LOWER SCORES REPRESENT LESS UNMANAGED RISKS.

SO WITH YOUR PORTFOLIO, ABOUT 62% OF THE PORTFOLIO MARKET VALUE HAS AN ESG RATING.

THOSE TEND TO BE THE CORPORATE NOTES IN THE DISTRICT'S PORTFOLIO.

[00:45:01]

THE DISTRICT'S PORTFOLIO IS DIVERSIFIED ACROSS 18 DIFFERENT INDUSTRIES, AND THERE ARE A LOT OF BENEFITS.

WE HAVE A TEAM AT PFM ASSET MANAGEMENT WHO MANAGES THE DISTRICT'S ESG EXPOSURE, AND THEY NOTED THAT TWO NAMES IN THE PORTFOLIO HAD REMARKABLE ESG.

IMPROVEMENTS OVER THE LAST QUARTER.

ONE WAS CITIGROUP AND THE OTHER WAS.

JOHN DEERE.

ANY QUESTIONS FOR ME? I'LL CONCLUDE THAT AS MY FORMAL PRESENTATION.

YEAH. ANY QUESTIONS? YEAH. IN REGARD TO ESG, I THINK THE LAST TIME YOU PRESENTED I WAS ASKING A QUESTION ABOUT WALMART VERSUS COSTCO AND IT WAS I MEAN, I LOOKED IT UP.

COSTCO HAS A HIGHER I MEAN, A HAS A HIGHER ESG RATING THAN WALMART, WHICH I FIND.

WAS IT WALMART? NO, IT WAS I THINK IT WAS WALMART, AND SO I WAS SOMEONE WAS GOING TO LOOK INTO WHY THAT DIFFERENCE? WHY THE DIFFERENCE IS THERE, AND BECAUSE, I MEAN, WALMART HAS A HISTORY.

I MEAN, THE, GENERAL STORY IS THAT A LOT OF THEIR EMPLOYEES DEPEND OR ARE DEPENDENT ON STATE GOVERNMENT, GOVERNMENT ASSISTANCE? YEAH.

I'D BE I DO NOT HAVE THOSE DETAILS WITH ME.

DIRECTOR ROSARIO, BUT I WILL SEND A FOLLOW UP NOTE COMMUNICATION THROUGH THE ASSISTANT GENERAL MANAGER.

OKAY, GREAT. THANK YOU.

HAVE THAT FOR YOU. LOVE YOUR REPORT.

THANK YOU. THANK YOU. ALL RIGHT.

ANY OTHER QUESTIONS AT THIS POINT? I SUPPOSE I'VE ALSO ASKED THIS BEFORE.

SO I DO HAVE A QUESTION.

JUST I KNOW WE DON'T HAVE A LOCAL INVESTMENT PREFERENCE POLICY, AND I'M JUST LOOKING ON SLIDE ON PAGE 45.

SO JUST ONE OF THE NEXT SLIDES THAT WE'RE UPCOMING WHERE WE LIST YOU KNOW, THE TOP 25 ISSUERS AND THIS IS BY ESG.

SO IT MIGHT BE A LITTLE BIT DIFFERENT TO IF WE WERE TO GO AND LOOK THROUGHOUT THE PORTFOLIO, BUT I SEE FOUR BAY AREA SAN FRANCISCO BAY AREA COMPANIES LISTED ON THIS ONE, AND WE DON'T HAVE THAT POLICY, BUT I DO THINK IT'S SOMETHING FOR US TO CONSIDER AT SOME POINT.

I WOULDN'T NECESSARILY MARK IT AS URGENT, BUT I KNOW THAT, YOU KNOW, AS WE AS WE THINK ABOUT OUR INVESTMENTS AND INVESTING LOCALLY IN THE SAN FRANCISCO BAY AREA, I THINK THAT HELPS IN TERMS OF, YOU KNOW, OUR LOCAL ECONOMY.

SIX, WALMART'S LISTED.

PAGE 45 IS WHAT I'M LOOKING AT RIGHT NOW, BUT I MEAN, ANYWAYS, I'M JUST THINKING, YOU KNOW, I KNOW, FOR EXAMPLE CISCO HAS BEEN IN THE NEWS.

I KNOW THEY'VE HAD A PRETTY LARGE NUMBER OF LAYOFFS ACTUALLY RECENTLY, AND I KNOW THAT THIS IS END OF SECOND QUARTER.

SO IT WOULDN'T NECESSARILY BE REFLECTED IN THIS DATA, BUT JUST ANECDOTALLY, YOU KNOW, I THINK, YOU KNOW, AS WE AND SO I THINK IT'S GREAT AND POSITIVE TO SEE THAT WE HAVE BEEN, YOU KNOW, SUPPORTIVE OF BAY AREA COMPANIES LIKE CISCO, BUT I ALSO KNOW THAT, YOU KNOW, SO MANY OF MY FRIENDS AND NEIGHBORS IN THE EAST BAY DO MAKE THAT COMMUTE TO NORTH SAN JOSE.

IT'S REALLY NOT THAT FAR FROM CITIES LIKE FREMONT OR PLEASANTON, AND SO THERE ARE PEOPLE THAT WILL LIVE IN FREMONT AND PLEASANTON AND WORK IN THE NORTH SAN JOSE AREA, AND I THINK THAT AS WE, YOU KNOW, THINK ABOUT OUR INVESTMENT POLICY, I THINK ESG IS REALLY IMPORTANT, BUT I ALSO THINK INVESTING IN THE LOCAL SAN FRANCISCO BAY AREA IS SOMETHING TO CONSIDER, AND I GUESS MY QUESTION IS, HAVE ANY OTHER, YOU KNOW, CITIES OR LOCAL GOVERNMENT AGENCIES THAT YOU'VE, YOU KNOW, GIVEN THIS PRESENTATION TO AND TALKED TO ABOUT THE INVESTMENT PORTFOLIO, HAVE THEY BROUGHT UP THIS IDEA ABOUT A LOCAL INVESTMENT, YOU KNOW, POLICY WHERE MAYBE LIKE A PERCENTAGE IS INVESTED IN BAY AREA COMPANIES? YEAH, THAT'S A GOOD QUESTION.

I THINK IT'S ALWAYS A CONSIDERATION TO SEE, YOU KNOW, WHEN WE LOOK AT COMPANIES FOR INVESTMENT, WE'RE CONSTANTLY, YOU KNOW, LOOKING FOR, YOU KNOW, THEIR ABILITY TO SORT OF REPAY THEIR DEBT, AND CALIFORNIA GOVERNMENT CODE DOES HAVE A RATINGS LIMIT WHICH IS GENERALLY THEY HAVE TO BE A-RATED AND ABOVE, AND, YOU KNOW, SOME OF THE COMPANIES, YOU KNOW, IN THE BAY AREA MAY NOT MEET THOSE METRICS.

THE GREAT NEWS IS THAT THERE ARE SO MANY COMPANIES WHO ARE BASED HERE THAT ARE ON OUR APPROVED LIST, AND THEY ARE PROLIFIC ISSUERS, AND SO WE DO HAVE OPPORTUNITIES TO ADD THOSE TYPES OF ISSUERS TO THE PORTFOLIO JUST THROUGH OUR NORMAL PORTFOLIO MANAGEMENT PROCESS.

THANK YOU. THANK YOU.

[00:50:01]

ACTUALLY, YOU KNOW, NOW I'M REALLY STARTING TO THINK ABOUT THAT IS THAT, YOU KNOW, WE DON'T HAVE A LOCAL ELEMENT HERE, AND, YOU KNOW, BECAUSE WE'RE NOT REQUIRED TO MAYBE WE COULD, WE COULD, WE COULD START INITIATING SOME WAY.

I MEAN, I'M BEING I'M NOT TRYING TO BE PRESCRIPTIVE HERE, BUT JUST SOME WAY OF RECOGNIZING THAT THERE IS SOMETHING ABOUT LOCAL THAT'S IMPORTANT, AND HOW ARE WE GOING TO RECOGNIZE THAT, AS YOU KNOW, SHOULD WE RECOGNIZE IT? YOU KNOW, AND KIND OF A MICROCOSM OF THAT IS WHENEVER I MAKE A LARGE PURCHASE, I TRY TO DO IT IN THE CITY THAT I LIVE IN, YOU KNOW, BECAUSE OF THE SALES TAX THING.

SO GENERALLY THE CARS THAT I BUY ARE FROM CONCORD, WHERE I LIVE, YOU KNOW? I'M LUCKY THAT THERE'S A COSTCO IN MY TOWN.

SO ALL THAT'S TO STAYING IN TOWN, YOU KNOW? SO, ANYWAY, THAT'S JUST A LITTLE KIND OF LOCAL THING, BUT I REALLY THINK THAT'S SOMETHING MISSING, YOU KNOW, THAT WE CAN KIND OF TAKE A LOOK AT AND KIND OF LEAVE IT UP FOR DISCUSSION ABOUT HOW THAT MIGHT BE, HOW WE MIGHT DO THAT.

YOU KNOW, MAYBE IT'S JUST ONCE A YEAR WE DO A LOCAL DIVE INTO HOW THINGS ARE, HOW WE INTERACT WITH THE LOCAL ECONOMY, AND MAYBE BEFORE WE THINK ABOUT A POLICY, MAYBE ONE APPROACH WE COULD DO IS MAYBE JUST MARK WHICH ONES ARE HEADQUARTERED IN THE SAN FRANCISCO BAY AREA, AND WE COULD SEE WHAT PERCENTAGE LIKE, OH, YOU KNOW, WE ALREADY HAVE BECAUSE I MEAN, LIKE THERE ARE SOME BIG COMPANIES HERE LIKE I SEE APPLE, VISA, ADOBE, CISCO ON THIS ESG ONE TO BEGIN WITH.

SO JUST TO KNOW WHAT OUR PERCENTAGE IS.

YEAH, AND I'M HAPPY TO FOLLOW UP WITH THAT INFORMATION ON WHERE THE COMPANIES ARE HEADQUARTERED, AND LIKE I SAID, YOU KNOW, I WOULDN'T NECESSARILY SAY THIS IS PARTICULARLY URGENT. IT'S JUST I THINK IT WOULD BE NICE IN THE LONG TERM FOR US TO HAVE THIS CONVERSATION.

IT'S NOT URGENT, RIGHT? RIGHT, BUT IT'S SOMETHING THAT SOME OF US ARE THINKING ABOUT HERE ON THIS COMMITTEE.

YEAH. ALL RIGHT.

ALL RIGHT. THANK YOU. THANK YOU.

THANK YOU, AND THANK YOU FOR I'LL JUST SPEAK FOR MYSELF, HELPING MAKE SOME SENSE OUT OF THESE THINGS, BECAUSE THERE'S SO MUCH INFORMATION THERE, AND YOUR EXPLANATION HAS, HAS KIND OF PUT SOME DEPTH TO IT AND NUANCE, AND I, YOU KNOW, I KNOW FOR ME, I REALLY NEEDED THAT.

SO THANK YOU.

THERE'S A LOT THERE, AND IT'S A PRETTY GOOD MESSAGE, TOO, THIS TIME.

YEAH. SO I TOOK SOME NOTES ABOUT WHAT YOU GUYS WERE DISCUSSING, AND I'LL FOLLOW UP WITH MONIQUE AND DO SOME RESEARCH ON MY OWN ABOUT WHAT OTHER PEOPLE ARE DOING, WHAT OTHER AGENCIES ARE DOING TO TRACK THIS AND SEE, SEE WHAT'S WHAT'S POSSIBLE.

YEAH, WE ARE RESTRICTED BY THE STATE GOVERNMENT CODE.

WE HAVE OUR OWN INVESTMENT POLICY, WHICH IS LIKE KEEPING US PROTECTED FOR OUR INVESTMENTS BEING VERY SAFE, BUT I DO THINK, YOU KNOW, WHAT GETS MEASURED, GETS MANAGED.

I THINK THAT'S THE QUOTE AND I NOTED, LIKE OUR ESG SCORE, WHEN WE IMPLEMENTED ESG HERE AT THE DISTRICT, WE SAID WE'RE NOT GOING TO LIMIT OURSELVES.

WE'RE JUST GOING TO TRACK HOW ARE WE DOING, AND THIS QUARTER, FOR THE FIRST TIME, WE CROSSED OVER INTO THE LOW THRESHOLD.

IT'S, YOU KNOW, WE JUST BARELY HAVE CROSSED OVER INTO IT.

SO I DO THINK IF YOU START TRACKING IT THEN YOU START, YOU'RE MORE AWARE.

SO MAYBE THAT'S WHAT WE START WITH IS JUST LOOKING AT YEAH PUTTING AN ASTERISK AND LOOKING AT WHAT WE'RE HOLDING.

I JUST HAVE ONE QUESTION FOR MONIQUE BEFORE ON ON OUR INVESTMENTS UNDER NEGOTIABLE CDS ON PAGE 50. I JUST NOTICED THAT THERE'S A NOTICEABLE DIFFERENCE IN ACCRUED INTEREST, AND THE INTEREST RATES FOR THE FOR EACH OF THOSE BANKS WERE SIMILAR, BUT FOR INSTANCE, LIKE THE TORONTO-DOMINION ACCRUED 55,000 IN INTEREST VERSUS NORDEA BANK, ONLY 12,000, AND IT SEEMS LIKE NORDEA WAS THE WAS THE LOWEST OF THE NEGOTIABLE CDS.

WHY IS THERE SUCH A DIFFERENCE WHEN WHEN THE INTEREST RATES ARE SIMILAR AND THE TIME PERIOD WAS SIMILAR AS WELL? WELL, THE YOU SAID YOUR NORDEA AND TORONTO-DOMINION.

YEAH. SO THE ACCRUED INTEREST FIGURE HERE IS THE AMOUNT OF INTEREST THAT HAS ACCRUED BETWEEN INTEREST BETWEEN COUPON PAYMENT DATES, AND SO THE TORONTO-DOMINION CD HAS A LITTLE BIT OF A HIGHER COUPON. NOT MUCH, BUT A LITTLE BIT OF A HIGHER COUPON AT 5.6%, AND THIS BOND PLAYS INTERESTS BETWEEN I WANT TO SAY APRIL AND OCTOBER IF I HAVE THOSE RIGHTS, WHEREAS THE NORDEA IS GOING TO PAY INTEREST BETWEEN MAY

[00:55:03]

SO IT'S COUNTING INTEREST ACCRUED BETWEEN THE LAST COUPON PAYMENT DATE AND THE REPORTING DATE.

OKAY. THAT MAKES SENSE.

YES. THANK YOU.

ALL RIGHT. THANK YOU. THANKS AGAIN.

TIMING IS EVERYTHING. YEAH.

LET'S SEE. SO THAT WAS SO WE DO NEED A RECOMMENDATION ON THAT TO BRING IT TO THE FULL BOARD.

WAS THAT FOR, THAT WAS FOUR B.

YEAH. OKAY, SO OUR TASK IS TO.

COME UP WITH A RECOMMENDATION TO THE TO THE FULL BOARD.

SO DO WE HAVE A MOTION TO APPROVE? WE HAVE ONE SECOND.

I'LL SECOND. OKAY. ALL IN FAVOR? AYE. OKAY, SO WE WILL APPROVE THAT.

ALL RIGHT. THANK YOU, AND THANK YOU SO MUCH, AND NEXT IS ITEM NUMBER FOUR C RECOMMENDATION TO THE BOARD OF DIRECTORS TO ACCEPT SECOND QUARTER 2024 GENERAL FUND AND OTHER GOVERNMENTAL FUND FINANCIAL REPORTS.

DEBORAH, I'M GOING TO ASK YOU TO PULL THAT MIC IN REALLY CLOSE THIS TIME.

OKAY. HOW'S THAT? BETTER.

I WANT TO MISS ANYTHING.

I KNOW IT'S SO FASCINATING.

IT'S GOT TO BE REALLY, REALLY CLOSE.

ALL RIGHT. PULLING UP THE PRESENTATION HERE, AND.

OKAY, GIVE ME A SIGN IF YOU'RE.

IF YOU'RE NOT HEARING ME.

SO THIS IS OUR SECOND QUARTER GENERAL FUND AND OTHER GOVERNMENTAL FUNDS, FINANCIAL REPORT, AND WE START OUT SO THIS IS ON PAGE 90 STARTING ON PAGE 94 OF YOUR PACKET. WE START OUT JUST BY LOOKING AT THE VERY HIGH LEVEL OF OUR REVENUES AND EXPENDITURES, AND YOU CAN SEE THAT WE ARE ON TRACK TO WHAT WE WOULD EXPECT TO SEE AT THIS TIME OF YEAR, THAT OUR REVENUES, WE'VE RECEIVED ABOUT 50% OF OUR REVENUES YEAR TO DATE OF WHAT WAS BUDGETED, AND WE'VE SPENT A LITTLE MORE THAN 50% OF OUR TOTAL BUDGETED EXPENDITURES.

SO WE'RE ON TRACK, AND NOW WE'RE GOING TO DIVE EVEN MORE DEEPLY INTO THOSE DETAILS.

SO WE'RE JUST LOOKING AT THE GENERAL FUND RIGHT NOW, AND WE'RE LOOKING AT THE DIFFERENT CATEGORIES OF REVENUES AND THE DIFFERENT CATEGORIES OF EXPENDITURES.

SO JUST A COUPLE OF THINGS THAT WE HAVE FOOTNOTES ON IN THE PACKET THAT I'LL CALL OUT TO YOU.

SO FIRST LOOKING AT THE CHARGES FOR SERVICES REVENUE.

SO NOT CHARGES SORRY PROPERTY USAGE REVENUE IS COMING IN HIGHER THAN YOU WOULD THINK FOR THIS TIME OF YEAR.

SO WE'RE ALREADY AT 73.2% OF BUDGET, AND IT TURNS OUT OUR GRAZING UNIT IS DOING REALLY WELL.

WE HAVE AS WE REACHED OUT TO THEM TO FIND OUT WHAT WAS GOING ON, AND WE HAVE A LOT OF ANIMALS GRAZING THIS YEAR.

IT'S A GOOD GRASS YEAR, SO REVENUES ARE COMING IN QUITE STRONG IN PROPERTY USAGE RELATED TO THE GRAZING.

NEXT UP INVESTMENT EARNINGS.

SO THIS GETS TO DIRECTOR ROSARIO'S QUESTION.

SO WE DO NOT BUDGET FOR INVESTMENT EARNINGS, AND YOU CAN SEE THERE'S IT'S NOT THIS CATEGORY IS INVESTMENT EARNINGS AND OTHER.

SO THERE IS ACTUALLY A BUDGET OF 4 MILLION HERE, BUT THE INVESTMENT EARNINGS ARE COMING IN.

I BELIEVE IT WAS 5.5 MILLION YEAR TO DATE, AND BUT THAT'S NOT WHAT'S BUDGETED.

SO BY THE END OF THE YEAR WE'RE GOING TO BE SIGNIFICANTLY ABOVE OUR REVENUE BUDGET AND SO THAT ALL COMES TOGETHER.

YOU'LL SEE AT YEAR END WE'LL PROBABLY HAVE REVENUES EXCEEDING EXPENDITURES, AND LASTLY TRANSFERS IN.

WE ALWAYS WE DO OUR TRANSFERS IN AS SOON AS WE BUDGET THEM.

SO YOU'LL ALWAYS SEE THAT'S AT 100% BECAUSE WE'RE WE'RE TAKING CARE OF THOSE TRANSFERS AS THEY'RE APPROVED BY THE BOARD, AND THEN ON THE EXPENDITURE SIDE, AGAIN LOOKING AT THIS HIGH LEVEL OF DIFFERENT CATEGORIES.

SO OUR SUPPLIES AND SERVICES AND CAPITAL OUTLAY, THE PERCENT COMPLETE YEAR TO DATE ALWAYS LOOKS A LITTLE BIT LOW WHEN WE'RE JUST AT THIS, YOU KNOW, FIRST HALF OF THE YEAR, ESPECIALLY FOR OUR LARGER EXPENDITURES THAT HAVE TO COME TO THE BOARD FOR APPROVAL.

WE HAVE TO GO THROUGH A LOT OF STEPS TO GET THAT APPROVAL DONE.

SO WE'RE A LITTLE SLOW OUT OF THE GATE, BUT IF YOU IF YOU LOOK AT WHAT'S ENCUMBERED, WE ARE ON TRACK FOR THOSE EXPENDITURES TO, TO BE CLOSER TO 50%, AND THEN LOOKING AT TRANSFERS OUT AGAIN, WE'RE DOING THOSE TRANSFERS OUT AS SOON AS THEY'RE BUDGETED.

SO THAT'S WHY IT'S SHOWING 100% COMPLETE YEAR TO DATE, AND NOW WE'RE GOING TO LOOK EVEN STILL GENERAL FUND, BUT NOW WE'RE LOOKING AT EXPENDITURES AND AN EVEN MORE DETAILED WAY BY DIVISION, AND AGAIN WE HAVE FOOTNOTES IN THAT THIS IS ON PAGE 96 OF YOUR PACKET.

SO WE'RE GIVING YOU ADDITIONAL DETAIL WHERE THE EXPENDITURES ARE 10% HIGHER OR LOWER THAN WHAT YOU WOULD EXPECT FOR WHERE WE ARE IN THE

[01:00:03]

THOSE EXPENDITURES ARE LOOKING A LITTLE BIT LOW AS WELL, AND THAT'S RELATED TO SUPPLIES AND SERVICES EXPENDITURES BEING A SLIGHTLY LOWER THAN USUAL, AND THEN ALSO HR HAS SOME VACANCIES WHICH I KNOW THEY'VE, THEY'VE ACTUALLY WORKED TO FILL AND I THINK ARE MUCH MORE ON TRACK.

AT THIS TIME, AND OUR LAST FOOTNOTE IS FOR ACQUISITION STEWARDSHIP.

SORRY. ACQUISITION, DESIGN, ADMINISTRATION, DESIGN AND CONSTRUCTION IN ASD, AND THEY ARE SLIGHTLY LOWER THAN EXPECTED, AND AGAIN IT'S RELATED TO STAFF VACANCIES.

I DID WANT TO POINT OUT OH YEAH GO AHEAD.

EXCUSE ME. I JUST HAD A QUESTION ABOUT BEFORE WE GET OFF OF THIS SLIDE, ONE OF THOSE FOOTNOTES, I HAD MADE A NOTE HERE THAT YOU YOU'VE ADDRESSED IT, BUT I STILL DON'T UNDERSTAND REALLY THE NUANCE OF IT, AND THAT IS NUMBER NINE.

YES. I DON'T I'M NOT SURE I QUITE UNDERSTAND HOW CONTINGENCY FUNDS RELATE TO THIS, AND MAYBE YOU CAN.

YEAH, MAYBE IT'S BASED ON MY LACK OF KNOWLEDGE ABOUT HOW THIS BUDGET LINE ITEM WORKS, HOW IT FUNCTIONS.

SO WE HAVE PUT INTO THE BOARD OF DIRECTORS, YOU GUYS HAVE A CONTINGENCY FUND BUDGET, WHICH I BELIEVE IS A HUNDRED THOUSAND.

I DON'T KNOW IF ANYBODY HAS THAT IN THEIR HEAD UP THERE, AND SO VERY LITTLE OF THE CONTINGENCY FUNDS HAVE BEEN ALLOCATED TO SO AS OF JUNE 30TH.

SO I DON'T KNOW IF THERE'S BEEN ANY CHANGES IN IF YOU GUYS HAVE DONE ANY APPROPRIATIONS SINCE JUNE 30TH, BUT THAT'S WHERE IT WAS AT.

JUNE 30TH WAS NOT NOT MUCH OF THOSE CONTINGENCY FUNDS HAD BEEN ALLOCATED.

SO DOES THAT MEAN THAT THE EXPENDITURES START WITH THE CONTINGENCY FUNDS, AND THEN WHEN THAT'S EXHAUSTED IT GOES TO THE OTHER THE OTHER FUNDS OR.

NO. SO YOU GUYS HAVE IT'S BASICALLY LIKE A POT OF MONEY THAT AS, AS WE GO THROUGH THE YEAR.

IF SOMETHING COMES UP THAT IS NOT BUDGETED FOR, SOMEONE COULD REQUEST OR YOU GUYS COULD COME UP WITH THAT ON YOUR OWN AND SAY, I WOULD LIKE TO ALLOCATE OUR CONTINGENCY FUNDS TOWARDS X, AND SO WE WOULD THEN TAKE THOSE FUNDS AND WE THEN WE MOVE THEM TO THE LINE ITEM WHERE THEY'RE GOING TO GET SPENT.

SO RIGHT NOW THEY'RE STILL SITTING IN CONTINGENCY WAITING TO BE ASSIGNED.

DOES THAT ANSWER IT? I CAN HELP.

YES, PLEASE. WHEN I WAS A SUPERVISOR AND WE CREATED THE RESOURCE PROTECTION AREA ALONG STREAM TRAIL, THAT WAS A NEW THERE WAS A NEW DESIGNATION AND A NEEDED FENCING ALONG THE CREEK, AND SO THE BOARD OF DIRECTORS, BECAUSE IT WASN'T IT WASN'T IN THE BUDGET.

SO THE BOARD OF DIRECTORS GAVE GAVE THE PARK CONTINGENCY MONEY TO PUT IN THE INITIAL FENCING.

GREAT EXAMPLE. YES, IT WAS OUTSIDE OF THE BUDGET.

IT WAS SOMETHING THAT JUST POPPED UP AND THE BOARD GAVE ME SOME MONEY, WHICH I WAS VERY HAPPY WITH.

SO THE COMMENT IN NUMBER NINE IS ADDRESSING JUST CONTINGENCY.

IS THAT WHAT IT CONSISTS OF.

YEAH. SO IT'S CONTINGENCY IS A IT'S CATEGORIZED AS A SUPPLY I BELIEVE, WHICH IS WE HAVE TO PUT IT SOMEWHERE.

SO IT'S CATEGORIZED AS A SUPPLY.

SO IF WE LOOK AT SUPPLIES AND SERVICES IT LOOKS LOW, AND THEN DRILLING DOWN FURTHER THE LINE ITEM IS CONTINGENCY WHERE YOU HAVE A BUDGET BUT YOU HAVEN'T SPENT MUCH OF IT.

OKAY. ALL RIGHT.

THAT'S A LITTLE BIT BETTER FOR ME.

OKAY. THANK YOU. ALL RIGHT.

SORRY TO INTERRUPT.

NO WORRIES, AND THE LAST THING I WAS GOING TO POINT OUT IS THAT I ALMOST ALWAYS HAVE TO.

WE ALMOST ALWAYS HAVE A FOOTNOTE RELATED TO PUBLIC SAFETY BEING EXPENDITURES BEING LOW RELATED TO NOT HAVING THEIR VACANCIES FILLED, BUT THEY ARE MAKING GOOD PROGRESS ON THAT, AND SO THEY ARE ACTUALLY CLOSER TO BEING ON TRACK, WHICH IS NICE TO SEE.

NEXT SLIDE IS JUST TALKING AT A VERY HIGH LEVEL ABOUT OUR ALL OF OUR OTHER GOVERNMENTAL FUNDS.

SO WE SPEND MOST OF THE TIME TALKING ABOUT THE GENERAL FUND, BUT WE DO HAVE OTHER FUNDS WHICH ARE SMALLER AND SPECIFIC.

SO OUR SPECIAL REVENUE FUNDS INCLUDE MEASURE FF, OUR LIGHTING AND LANDSCAPING ASSESSMENT DISTRICTS, SOME ZONES OF BENEFIT AND MEASURE WW LOCAL GRANTS.

NOTHING. SO THIS IS ON PAGE 97 OF YOUR PACKETS.

THERE'S NOTHING REALLY PARTICULAR TO HIGHLIGHT THERE, BUT THAT'S WHAT THOSE SPECIAL REVENUE FUNDS ARE, AND THEN WE HAVE OUR PROJECT FUNDS.

SO THIS IS WHERE WE BUDGET FOR ALL OF OUR MAJOR CAPITAL PROJECTS, AND THERE'S A LOT OF VARIABILITY IN PROJECT FUNDS BECAUSE WE'RE NOT YOU KNOW, WE BUDGET FOR CERTAIN THINGS TO HAPPEN DURING THE YEAR AND THEY DON'T ALWAYS HAPPEN AS EXPECTED.

SO IF YOU LOOK AT THE TABLE ON PAGE 97, YOU CAN SEE THAT WE, FOR EXAMPLE, RECEIVED SOME SIGNIFICANT GRANT REVENUES THIS YEAR THAT MAY HAVE BEEN BUDGETED IN A PRIOR YEAR, BUT WE

[01:05:08]

SO REVENUE IS SHOWING AS 110% RIGHT NOW, AND SIMILARLY EXPENDITURES APPEAR LOW.

IT'S A VERY VARIABLE RELATED TO TIMING.

A DEBT SERVICE FUNDS ARE FOR OUR WW BONDS.

SO THOSE ARE AS EXPECTED, AND THEN LASTLY INTERNAL SERVICE FUNDS ARE WHERE WE ARE BUDGETING FOR AND RECEIVING REVENUE FROM OUR INTERNAL DEPARTMENTS TO PAY FOR WORKERS COMPENSATION, GENERAL LIABILITY, EMPLOYEE BENEFITS, MAJOR INFRASTRUCTURE RENOVATION AND REPLACEMENT, AND MAJOR EQUIPMENT REPLACEMENT, AND SO THOSE ARE AS EXPECTED AS WELL, AND THEN LASTLY, AT OUR LAST MEETING WHERE WE TALKED ABOUT THE QUARTER 1.

THAT'S FINE WITH THAT.

OH DID YOU HAVE A QUESTION? OKAY.

GO AHEAD. AT OUR LAST MEETING WHERE WE HAD TALKED ABOUT OUR FIRST QUARTER REPORT, DIRECTOR MERCURIO AND DIRECTOR SANWONG, YOU HAD ASKED, HEY, COULD WE GET A CHART OR A TABLE SHOWING US WHAT PROPERTY TAXES, BECAUSE IT'S SUCH A LARGE PORTION OF OUR BUDGET? THAT WOULD DEPICT BETTER HOW WE'RE DOING WITH OUR PROPERTY TAX RECEIPTS.

SO WE PUT TOGETHER A COUPLE CHARTS AND WANTED TO SEE, IS THIS WHAT YOU HAD IN MIND? SO THIS IS ONE EXAMPLE AS A BAR CHART, AND YOU CAN SEE QUARTER BY QUARTER.

SO THE FIRST TWO QUARTERS WE HAVE OUR BUDGET, AND THEN WE HAVE OUR ACTUALS IN BLUE, AND THEN THE QUARTER THREE AND QUARTER FOUR IS JUST WHAT WE'RE PROJECTING.

THAT'S ONE WAY WE COULD DEPICT IT, AND THEN HERE'S ANOTHER ONE AGAIN WE'RE SHOWING QUARTER BY QUARTER, AND YOU CAN SEE THE DOTTED LINE IS THE PROJECTED I WOULD SAY THAT IT'S VERY CLOSE.

IT'S VERY, VERY CLOSE, BUT THAT I DON'T KNOW THAT WORKS FOR ME.

ARE YOU OKAY WITH THAT? I LIKE IT YEAH OKAY.

THANK YOU. PREFERENCE OF THE BAR CHART OR THE LINE? I LIKE THE BAR.

YEAH I THINK THE BAR. I THINK THE BAR.

I LIKE THE BAR ONE. OH, ARE WE CHOOSING BETWEEN THE TWO? YEAH, IF YOU HAVE AN OPINION.

IT'S LIKE A FOCUS GROUP. YOU KNOW, I THINK EITHER IS FINE.

I MAY ACTUALLY PREFER THE LINE CHART, BUT IF IT'S 2 TO 1, THEN WE CAN SWITCH.

ONE QUARTER, WE COULD SHOW ONE, AND THEN ONE QUARTER, WE COULD SHOW THE OTHER ONE.

OKAY. ALL RIGHT.

GOOD, BUT THAT IS WHAT YOU HAD IN MIND.

SO WE JUST WANTED TO MAKE SURE THAT WE WERE OKAY.

ALL RIGHT. SO THAT IS THE END OF THE PRESENTATION, AND THEN WE WOULD NEED A RECOMMENDATION AFTER AFTER WE GET YOUR QUESTIONS.

ALL RIGHT. QUESTION? YOU DID HAVE A QUESTION I DID HAVE ONE QUESTION.

IT MIGHT BE MORE OF A COMMENT.

THE PROJECT FUNDS WITH THE WITH THE GRANTS.

AS THEY'RE COMING IN, I WONDER IF THERE'S A WAY TO.

SO OUR PROJECT FUNDS 100% GRANTS OR COULD.

YEAH. I WONDER IF THERE'S A WAY TO CATEGORIZE OR HAVE, LIKE, SUBCATEGORIES ON THAT CHART.

YOU KNOW, JUST IN CASE PEOPLE ARE LOOKING AT THIS CLOSELY AND TRYING TO DETERMINE, YOU KNOW, WHY IS THERE MONEY BEING SPENT IN CITY X VERSUS CITY Y? YEAH. WELL, SO WE PROBABLY WOULD NOT BE ABLE TO GET TO THE DETAIL OF CITY BECAUSE WE HAVE OVER 400 ACTIVE PROJECTS. YEAH. THAT WAS JUST AN EXAMPLE, BUT YOU KNOW, WE COULD GIVE MORE DETAIL ABOUT THE PERCENT OF.

SO OUR PROJECT FUNDS ARE EITHER DISTRICT FUNDS LIKE SOMETIMES GENERAL FUND MONEY OR BOND FUNDS OR GRANT FUNDS.

THOSE ARE THE THREE, AND THEN WE HAVE LIKE AN OTHER CATEGORIES WHEN YOU HAVE LIKE DEVELOPER FUNDS FOR A PROJECT.

SO WE COULD GIVE MORE DETAIL ABOUT WHAT THE COMPONENTS ARE LIKE.

WE JUST PUT A LITTLE SENTENCE INTO THAT CHART SAYING IT'S PREDOMINANTLY GRANT FUNDS, BUT WE COULD WE COULD GIVE A LITTLE BIT MORE DETAIL IN FUTURE.

I LIKE THE COMPONENT CATEGORIES, AND THEN MAYBE IF THERE'S A WAY TO LINK TO OR NOTE OR REFER YOU TO OUR 400 PROJECTS, AND SO MAYBE TALK MORE ABOUT ON THE EXPENDITURE SIDE.

YOU KNOW, SOME EXAMPLES OF PROJECTS CURRENTLY IN CONSTRUCTION ARE X, Y AND Z, SOMETHING LIKE THAT CAN BE FOUND AT THIS PART OF OUR WEBSITE.

YEAH SOMETHING LIKE THAT.

OKAY, GREAT. I DO LIKE THE COMPONENT CATEGORIES.

THAT'S A GREAT IDEA.

WE DO HAVE A PARKS PROJECTS ON OUR WEBSITE.

YES. I THINK MAYBE LINKING IT FROM HERE TO THERE.

OKAY. SO WE DON'T HAVE TO COPY IT OVER INTO HERE, BUT JUST SAY, HEY, WE DO HAVE THIS ON OUR WEBSITE AND CAN BE FOUND HERE.

COOL. OKAY. YEAH.

ALL RIGHT. ARE WE GOOD IN TERMS OF QUESTIONS OR ADDITIONAL COMMENTS OR? MY COMMENT IS TO THANK YOU FOR YOUR PRESENTATION AND HELPING US TO UNDERSTAND IT BETTER.

[01:10:02]

SORRY. YOU KNOW, IT'S JUST A LOT.

THERE'S A LOT IN THIS PARTICULAR MEETING, YOU KNOW, AND WE'RE GETTING LIKE A LITTLE LIFT HERE, YOU KNOW, THROUGH BY ALL THE PRESENTATIONS.

SO I THANK YOU FOR THAT.

SO SO I THINK WE'RE READY FOR A RECOMMENDATION HERE.

MOTION TO APPROVE.

I'LL MAKE THE MOTION. OKAY.

SECOND. SECONDED.

ALL IN FAVOR? AYE.

OKAY. SO THAT IS APPROVED.

THANK YOU VERY MUCH, AND NOW MOVING ON TO ITEM NUMBER FOUR D IS RECOMMENDATION TO THE BOARD OF DIRECTORS TO APPROVE OTHER POST-EMPLOYMENT BENEFITS OPEB FUNDING POLICY.

ALL RIGHT. JUST PULLING UP THE PRESENTATION AGAIN.

OKAY, SO THIS STARTS ON PAGE 98 OF YOUR PACKET.

YEAH. SO I THINK THE FINANCE COMMITTEE KNOWS THIS ALREADY, BUT SOME SOME BACKGROUND ON OUR OPEB TRUST.

SO OPEB STANDS FOR OTHER POST-EMPLOYMENT BENEFITS.

SO IT'S THE BENEFITS THAT YOU GET AS A RETIREE.

THAT'S EVERYTHING. THAT'S NOT YOUR PENSION.

SO TYPICALLY IT'S MEDICAL, AND THE DETAILS OF WHAT YOU GET ARE BASED ON YOUR HIRE DATE, YOUR BARGAINING UNIT, HOW MANY YEARS OF SERVICE YOU HAVE, HOW OLD YOU ARE, AND THERE'S A LOT OF VERY VARIABLES AND VARIATIONS, AND IT'S ALL YOU CAN FIND IT ALL IN OUR ANNUAL COMPREHENSIVE FINANCIAL REPORT, WHICH IS ON OUR WEBSITE. SO WE HAVE HAD AN OPEB TRUST SINCE I THINK, 2003, AND WE'VE BEEN MAKING CONTRIBUTIONS TO THIS OPEB TRUST.

SO THE PARK DISTRICT WAS AN EARLY ADOPTER OF OF SETTING UP AN OPEB TRUST, AND WE MAKE THOSE CONTRIBUTIONS VIA PAYROLL AND WE SEND THEM TO THIS A GENCY CALLED CERBT, CALIFORNIA EMPLOYERS RETIREE BENEFIT TRUST, WHICH IS LIKE A SUBSIDIARY OF CALPERS.

SO BASICALLY CALPERS INVESTMENTS.

SO CERBT IS USING THE SAME INVESTMENTS THAT CALPERS DOES AND THE IDEA WITH YOUR OPEB TRUST IS THAT YOU'RE FUNDING IT TODAY FOR THE MONEY THAT YOU'RE GOING TO NEED LATER FOR WHEN YOU RETIRE.

SO THE CONTRIBUTIONS THAT YOU'RE PUTTING IN TODAY IS GOING TO GET INVESTED.

YOU ADD THAT TOGETHER AND THAT SHOULD BE SUFFICIENT TO PAY FOR OUR LONG TERM COSTS.

SO WE'VE HAD AN OPEB TRUST, BUT WE'VE NEVER HAD A POLICY, AND IT IS A BEST PRACTICE TO HAVE ONE.

SO WE'RE FINALLY PUTTING ONE TOGETHER, SOMETHING OUR ACTUARY HAS BEEN SUGGESTING FOR A LITTLE WHILE.

SO WE FINALLY GOT IT TOGETHER, AND THE IDEA IS THAT IT PROVIDES GREATER TRANSPARENCY ABOUT WHAT WHAT OUR OPEB FUNDING POLICY IS TO THE EMPLOYEES, TO RETIREES AND TO THE BOARD, AND WE REALLY HAVE VERY STRONG FINANCIAL PRACTICES HERE.

SO WE WANT TO DOCUMENT IT SO THAT IN THE FUTURE IT'S CONTINUED, AND IT DOESN'T, YOU KNOW, DISAPPEAR JUST BECAUSE OF LACK OF UNDERSTANDING OF WHAT WE DO.

WE ALSO ARE NOW REACHING A CRITICALLY FUNDED STATUS IN A POSITIVE WAY.

SO WE WANTED TO CLARIFY WHAT'S GOING TO HAPPEN AS WE GET TO THIS FULLY FUNDED STATUS AND WANT TO HAVE A POLICY THAT DEMONSTRATES PUBLICLY THAT WE HAVE GOOD FINANCIAL MANAGEMENT PRACTICES AND THAT WE'RE ENCOURAGING LONG TERM PLANNING.

AGAIN, IT'S A GFOA, GOVERNMENT FINANCE OFFICERS ASSOCIATION BEST PRACTICE, AND THE IDEA IS THAT YOUR OPEB POLICY SHOULD SAY THAT YOU'RE FUNDING THESE COSTS IN AN EQUITABLE WAY, MEANING THAT YOU'RE YOU DON'T WANT TO BE DOING WHAT'S CALLED PAY-GO WHERE CURRENT EMPLOYEES ARE PAYING FOR PEOPLE WHO HAVE ALREADY RETIRED. YOU WANT TO BE PUTTING IN MONEY NOW FOR YOURSELF THAT YOU'RE GOING TO USE LATER WHEN YOU'RE RETIRED.

SO IT'S EQUITABLE IN THAT WAY SO THAT YOU'RE SPREADING THE COST TO THE RIGHT PEOPLE AT THE RIGHT TIME.

SO AGAIN, FUTURE CONTRIBUTIONS.

I'M SORRY. CURRENT ASSETS, PLUS FUTURE CONTRIBUTIONS AND INVESTMENT EARNINGS SHOULD BE SUFFICIENT TO FUND THE COST OF THESE BENEFITS TO OUR RETIREES.

SO IN THIS PROPOSED POLICY, WE SAY A COUPLE OF OBVIOUS THINGS.

ONE IS THAT WE'RE GOING TO CONTINUE TO USE AN ACTUARY AND THAT THEY'RE GOING TO PROVIDE FOR US.

EVERY OTHER YEAR WE RECEIVE AN ACTUARIAL VALUATION, AND THEY'RE GOING TO GIVE US THE ACTUARIALLY DETERMINED CONTRIBUTION, AND THAT WE ARE GOING TO FUND 100% OF THAT.

NOT EVERY AGENCY DOES, BUT THAT'S NOW IN OUR POLICY THAT WE WILL DO THAT, AND THAT IS WHAT WE'VE ALWAYS DONE, AND AGAIN, BEST PRACTICE AND WHAT WE'VE ALWAYS DONE, IF WE ARE NOT 100% FUNDED, WE TAKE THE LIABILITIES AND WE AMORTIZE IT AND WE ADD IT TO FUTURE CONTRIBUTIONS, AND THEN IF WE'RE MORE THAN 100% FUNDED, WHICH WE ARE TODAY, THEN WE'RE GOING TO CONSULT WITH OUR ACTUARY ON WHAT OUR FUTURE CONTRIBUTIONS SHOULD BE, AND SHOULD WE KEEP FUNDING IT, OR DO WE STOP AND SAY, HEY, WE'RE GOOD? AND SO HERE'S JUST AN EXAMPLE OF OUR LATEST OPEB REPORT.

[01:15:02]

THAT'S HIGHLIGHTED DOWN AT THE BOTTOM, BUT YOU CAN SEE HERE THAT OUR ACTUARY IS GOING THROUGH EVERY TWO YEARS, AND THEY'RE LOOKING AT ALL OF THIS INFORMATION ABOUT WHAT IS OUR HOW MANY ACTIVE EMPLOYEES, HOW MANY COVERED RETIREES, AND THEY USE ALL THIS DATA TO COME UP WITH A CURRENT FUNDED STATUS, AND ALSO TO SAY HOW MUCH WE SHOULD BE PUTTING IN TO CONTRIBUTE TO THOSE FUTURE COSTS.

SO A COUPLE OF THINGS THAT ARE I WANTED TO HIGHLIGHT IN THE POLICY.

ONE IS THAT, AGAIN, WE'RE ALREADY AT 111% FUNDED STATUS.

SO WE TALKED WITH OUR ACTUARY.

YOU KNOW, AT WHAT POINT DO WE STOP CONTRIBUTING, AND THE ANSWER IS THAT WE ARE WE'RE GOING TO WHEN WE GET TO 120% FUNDED STATUS, WE'RE ACTUALLY GOING TO MOVE DOWN TO A DIFFERENT INVESTMENT STRATEGY.

SO WE'RE CURRENTLY INVESTED IN STRATEGY ONE OF THREE OPTIONS.

STRATEGY ONE IS THE HIGHEST LONG TERM EXPECTED RATE OF RETURN, BUT IT ALSO HAS THE HIGHEST VOLATILITY.

THEN THERE'S STRATEGY TWO WHICH IS A LITTLE BIT LESS RISKY LESS EQUITY MORE BONDS, AND THEN THERE'S STRATEGY THREE WHICH IS ALMOST ENTIRELY BONDS, AND SO THE WHAT OUR ACTUARY IS RECOMMENDING AND WHAT WE NOW PUT INTO POLICY IS THAT WHEN WE GET TO 120% FUNDED STATUS, WE'RE GOING TO MOVE TO STRATEGY TWO, AND SO THAT MAY HAPPEN WITHIN ANOTHER YEAR AND THEN THAT WOULD ACTUALLY BECAUSE THE WHAT'S CALLED THE DISCOUNT RATE, WHICH IS KIND OF LIKE ANOTHER WAY OF LOOKING AT OUR INTEREST, EXPECTED INTEREST EARNINGS BECAUSE THE EXPECTED EARNINGS WILL BE LOWER IN STRATEGY TWO.

WE'LL THEN OUR FUNDED STATUS WILL DROP TO BE BELOW 120%, AND SO WE'RE THEN GOING TO WE WOULD THEN BUILD UP TO 120% IN THAT STRATEGY, TOO.

AT WHICH POINT WE WOULD GO TO STRATEGY THREE, AND THEN WE WOULD STAY THERE AND POSSIBLY NOT NEED TO FUND OUR OPEB ANYMORE.

SO THAT'S THE THAT'S THE LONG TERM PLAN, AND THAT'S WHAT'S IN THIS POLICY.

THE CFO WOULD REVIEW THE POLICY REGULARLY AT LEAST EVERY OTHER YEAR WHEN WE RECEIVE THOSE ACTUARIAL VALUATIONS.

I KNOW THAT'S A LOT OF INFORMATION, BUT I'M HAPPY TO TAKE QUESTIONS AND TALK THROUGH THINGS IN MORE DETAIL.

WELL, IT HAPPENS TO BE GOOD INFORMATION.

SO, YOU KNOW, SO WE DON'T MIND GO AHEAD, RO.

YEAH. SO WE HAVE THE CEILING OF 120%.

IS THERE A FLOOR TO WHERE IF IT DROPS BELOW A CERTAIN PERCENTAGE POINT, LIKE, SAY, 75, WE SWITCH STRATEGIES.

THAT IS A GREAT QUESTION.

MAYBE WE DO WANT TO PUT YOU KNOW, IT'S HARD TO IMAGINE BECAUSE WE ARE AT SUCH A HIGH FUNDED STATUS RIGHT NOW.

YEAH. I MEAN, LET ME TALK TO OUR ACTUARY AND SEE IF THERE'S ANYTHING THAT WE WANT TO PUT INTO THE POLICY.

LIKE IF WE WERE TO HAVE SOMETHING DRASTICALLY BAD HAPPEN TO OUR INVESTMENTS.

I THINK THE POLICY DOES ADDRESS, SORRY, THE POLICY DOES ADDRESS WHAT HAPPENS IF YOU'RE NOT FUNDED AT 100% IN TERMS OF HOW YOU REACH THAT.

I DON'T KNOW THAT IT HAS AN EXACT FLOOR, BUT IT'S JUST IF YOU'RE NOT AT 100%, YOU HAVE TO DO X, Y, AND Z.

YEAH, IT DOES. YEAH. SO IT DOES TALK ABOUT WE WOULD NEED TO FIGURE OUT WHAT THAT AMOUNT IS THAT NEEDS TO BE FUNDED.

I THINK YOUR QUESTION WAS WOULD WE CHANGE STRATEGIES AGAIN TO GO FROM LIKE IF WE MOVE TO STRATEGY TWO, WOULD WE CHANGE BACK TO STRATEGY ONE IF OUR FUNDED STATUS WERE TO FALL? IS THAT WHAT YOU'RE ASKING? YEAH.

OKAY. SO LET ME SEE.

ACT ACCORDINGLY.

YEAH, I THINK YOU WOULD HAVE TO BASED ON WHAT'S IN THE POLICY HERE, BECAUSE YOU HAVE TO MAKE THAT UP OVER A 15 YEAR PERIOD.

SO BUT MAYBE IT COULD BE WORDED.

IT COULD BE WORDED. YEAH. IT COULD BE PUT IN THERE EXPLICITLY.

OKAY, AND ALSO DOES THE POLICY HAVE TO COVER 25 YEARS.

I MEAN, CAN IT BE SHORTER? I THINK THAT'S AN ACTUARIAL BEST PRACTICE.

YEAH. GREAT.

I THINK THAT'S MY ONLY CONCERN AND QUESTION.

YEAH. OLIVIA, ANY COMMENTS OR QUESTIONS? I DO.

I WONDER IF SO.

I'M REALLY GLAD THAT WE'RE DOING A POLICY.

I THINK THIS IS GREAT, AND I COMPLETELY SUPPORT THAT.

I JUST WONDER IF BECAUSE I THINK ALL THE INFORMATION IS MOSTLY IN HERE, BUT IT'S STILL A LITTLE BIT TOUGH TO LIKE, FOLLOW.

LIKE YOU KIND OF HAVE TO READ CLOSELY.

IT WAS HELPFUL TO GET YOUR VOICE OVER ON THAT, AND I WONDER, BECAUSE I'M LOOKING AT PAGES 102 AND 103 IN THE PACKET.

IT'S PAGE THREE AND FOUR OF THE POLICY.

BECAUSE, YOU KNOW, AS WE'RE DISCUSSING THIS, YOU KNOW, IF THE PLAN IS LESS THAN 100% FUNDED.

[01:20:01]

SO IT'S THERE BUT IT DOESN'T IT'S LIKE NOT ILLUMINATED, AND THEN ALSO THEN YOU HAVE TO KIND OF RECONCILE THAT WITH STRATEGY ONE, STRATEGY TWO, STRATEGY THREE IN THAT INVESTMENT TRUST VEHICLE SECTION ON PAGE FOUR, AND SO I DON'T KNOW IF THERE'S SOME WAY TO TIE, YOU KNOW, ONE THROUGH.

WHAT IS IT SEVEN ON PAGE THREE TO THAT INVESTMENT TRUST VEHICLE ON PAGE FOUR A LITTLE BIT BETTER, AND ALSO MAYBE WITH THE STRATEGY ONE, TWO AND THREE MAYBE ORGANIZE IT MORE AS LIKE A LIST, BECAUSE RIGHT NOW IN THE PARAGRAPH FORM, WE KIND OF HAVE TO READ THROUGH IT.

SO MAYBE THAT MIGHT ALSO JUST BE HELPFUL IF YOU'RE LOOKING AT THIS, BECAUSE WE DO HAVE A LOT OF DIFFERENT POLICIES IN GENERAL, AND SO SOMETIMES, YOU KNOW, WE'RE LOOKING AT THIS A LITTLE BIT QUICKLY, AND SO IT'S JUST NICE TO BE ABLE TO SEE THAT, BUT IT DOES LOOK LIKE MOST OF THE INFORMATION IS HERE.

IT'S JUST SOMETIMES YOU HAVE TO KIND OF LOOK AT IT CLOSELY TO SEE IT.

WILL YOU SAY THAT THE LAST PART WAS FOR I'M NOT SURE I CAUGHT IT.

SOMETHING ABOUT STRATEGY THREE BEING A SEPARATE PARAGRAPH.

YEAH. MAYBE IF WE CAN MAKE IT LIST FORM.

SO STRATEGY ONE.

VERSUS STRATEGY TWO VERSUS STRATEGY THREE.

SO IT'D BE IN SOME SORT OF LIST FORM VERSUS PARAGRAPH FORM.

YEAH OKAY I GOT IT.

WELL I DO THINK THAT WHEN, IF I COULD JUST THE WAY THAT I'M READING THIS POLICY, WHICH WAS, YOU KNOW, NOT DRAFTED BY LEGAL, BUT JUST THE WAY I READ IT, IS THAT THE STRATEGIES ARE HOW YOU'RE DEALING WITH VOLATILITY, AND WHEN YOU ARE BELOW YOUR ONE HUNDRED PERCENT, YOU'RE GOING TO WANT TO BE A LITTLE BIT MORE AGGRESSIVE, BUT THE POLICY GIVES A LOT MORE DISCRETION TO THE CFO, WHO, AGAIN, CAN WORK WITH OUTSIDE ADVISORS TO FIGURE OUT, YOU KNOW, DO WE ACTUALLY WANT TO MOVE INTO A MORE AGGRESSIVE STRATEGY? THERE COULD BE REASONS WHY YOU DON'T WANT TO, BUT WHEN YOU'RE ALREADY OVER INVESTED, YOU HAVE MORE MONEY THAN YOU NEED.

THE POLICY SAYS THERE'S NO REASON NOT TO DROP DOWN TO SOMETHING THAT'S LESS RISKY BECAUSE YOU HAVE ALL THE MONEY YOU NEED, BUT WHEN YOU DON'T, THE DISCRETION REALLY LIES IN THE CFO TO FIGURE OUT, IS IT WORTH TRYING TO BE MORE AGGRESSIVE BECAUSE MAYBE IT'S NOT.

MAYBE THE ECONOMICS DON'T BEAR OUT THAT YOU WANT TO DO THAT.

SO I THINK THAT'S WHY THOSE STRATEGIES, THOSE TIERS ARE SEPARATE FROM WHAT THE POLICY SAYS IN TERMS OF WHAT YOU HAVE TO DO WHEN YOU'RE OVER OR UNDERFUNDED, IF THAT MAKES SENSE. YEAH, THAT MAKES SENSE.

I'M JUST THINKING IN TERMS OF BEING ABLE TO READ THIS QUICKLY, JUST THE WAY IT'S WRITTEN.

YOU HAVE TO, AND MAYBE IT'S JUST THE WAY THAT I LEARN AND I PROCESS INFORMATION, SO I MIGHT JUST BE DIFFERENT THAN OTHERS, BUT I JUST, I THINK THERE'S PROBABLY SOME TWEAKS WE COULD MAKE TO MAKE IT TIE MORE CLEARLY.

YOU KNOW, IF SOMETHING LIKE REFERRING TO BULLET FOUR WHEN WE SAY FUNDED STATUS AS PER SOMETHING LIKE THAT, I DON'T KNOW. I'LL TAKE A LOOK AT IT.

I THINK I AGREE WITH THE POLICY.

SO IT'S JUST REALLY HOW IT'S PRESENTED.

SO MAYBE THIS IS JUST A VERY MINOR POINT, BUT IT DIDN'T UNTIL I HEARD YOUR VOICEOVER.

IT DIDN'T REALLY RESONATE WITH ME AS STRONGLY.

IT IS A, I MEAN, AS FAR AS THESE THINGS GO, IT'S A FAIRLY LENGTHY, YOU KNOW, POLICY WITH A LOT OF DETAIL, AND I AND I APPRECIATE YOUR COMMENT BECAUSE ANYTIME YOU CAN, I FEEL LIKE I HAVE A PRETTY GOOD, A GOOD WAY OF RELATING SOMETHING I READ OVER HERE WITH SOMETHING I READ DOWN THERE, YOU KNOW, BUT SOMETHING LIKE THIS, YOU MIGHT NOT.

YEAH IT MIGHT NOT BE SO EASY TO DO THAT.

SO IF THERE WAS SOME KIND OF REFERENCE OR SOMETHING, I'M NOT IN FAVOR OF BEING MORE PRESCRIPTIVE IN TERMS OF HOW TO GO ABOUT TO YOUR POINT THERE ABOUT HOW TO GO ABOUT THIS.

I THINK IT'S FINE THE WAY IT IS, BUT IN TERMS OF MAKING IT EASIER TO, TO FIGURE OUT WHAT IT IS WE'RE SUPPOSED TO DO, LET'S, YOU KNOW, IT SOUNDS LIKE YOU HAVE AN IDEA OF HOW TO ADDRESS THAT CONCERN.

AS I'M LOOKING AT PAGE 103, I'M REMINDED THAT YOU HAD ASKED FOR ME TO EXPLAIN THE IMPLICIT VERSUS VERSUS EXPLICIT SUBSIDY.

YEAH, YEAH, YEAH.

SO WE ARE SUBSIDIZING RETIREES MEDICAL IN TWO WAYS, AND SO THE EXPLICIT SUBSIDY IS, HEY, WE GIVE YOU MONEY TO HELP YOU PAY FOR YOUR RETIREE MEDICAL.

THE IMPLICIT SUBSIDY IS THAT THE RETIREES GET THE BENEFIT OF BEING ON THE PARK DISTRICT'S PLAN, WHICH IS MOSTLY VERY HEALTHY YOU KNOW, YOUNG TO MIDDLE AGED EMPLOYEES, AND SO IF YOU WERE TO BUY THE PLAN THAT WE HAVE ON YOUR OWN, IT WOULD COST A LOT MORE.

AS A RETIREE, IT WOULD COST A LOT MORE TO BUY THAT PLAN ON YOUR OWN BECAUSE YOU'RE LIKE AT A HIGHER RISK RATING, AND SO YOUR INSURANCE WOULD COST MORE, BUT YOU GET THE BENEFIT OF THE PARK DISTRICT'S MEDICAL.

IT'S A MORE FOCUSED IT'S A MORE FOCUSED SAMPLE OR.

[01:25:02]

LIKE IT'S YEAH, IT'S A HEALTHIER RISK POOL, AND SO RETIREES ARE PART OF THIS HEALTHY RISK POOL, AND SO THAT'S CALLED THE IMPLICIT SUBSIDY.

SO YOU CAN'T LIKE YOU CAN'T SEE IT.

IT'S NOT A DOLLAR THAT'S HANDED TO YOU, BUT YOU'RE SAVING MONEY BY BEING ON THE DISTRICT'S PLAN.

SO THAT'S THE IMPLICIT SUBSIDY, AND SO THE ACTUARIES CALCULATE WHAT THAT IMPLICIT SUBSIDY IS, AND THEN WE'RE ACTUALLY ALLOWED TO COLLECT THAT MONEY FROM SO WE PUT THAT WE PUT THOSE FUNDS INTO THE WHEN WE'RE PAYING FOR OUR OPEB TRUST, WE ARE SETTING FUNDS ASIDE TO PAY FOR THAT IMPLICIT SUBSIDY, AND THEN WE CAN LATER DRAW DOWN ON THOSE FUNDS AS WELL.

SO. OKAY.

DID THAT HELP? THAT IS BETTER.

OKAY. THANK YOU. YEAH.

SO EXPLICIT IS HERE'S YOUR MONEY, AND THEN THE IMPLICIT SUBSIDY IS LIKE YOU HAVE THIS BENEFIT OF BEING IN A PLAN THAT COSTS YOU LESS THAN IT WOULD OTHERWISE.

WITH ALL THIS ARCANE LANGUAGE, I HAD TO PICK OUT SOMETHING FOR YOU TO EXPLAIN TO ME.

SO YOU KNOW.

OKAY. THAT'S GOOD.

THANK YOU.

ANY OTHER COMMENTS? YES.

WE HAVE AN ADDITIONAL COMMENT, AND THEN NOW THAT I'M READING THE POLICY, 100% IS THE FLOOR.

SO YOU DON'T NEED TO--FOR STRATEGY ONE, IT IS THE FLOOR.

OKAY, SO MAYBE IF THERE'S A, YOU KNOW, WHEN YOU'RE DOING YOUR HAVE YOUR ACTUARIAL STUDIES OR CONSULTATION, IF YOU SEE A TREND WHERE YOU'RE GETTING WHERE IT'S TRENDING DOWNWARD, GETTING CLOSE TO 100%, MAYBE THERE MIGHT BE A DISCUSSION ABOUT WHETHER YOU SWITCH STRATEGIES OR NOT.

SO OKAY.

YEAH. IN OTHER WORDS, DON'T WAIT TILL IT GETS TO BELOW 100.

YEAH I AGREE.

OKAY. THANK YOU.

ALL RIGHT. ANY OTHER FINAL COMMENTS? NO. OKAY.

WELL THANK YOU FOR THAT, AND I WILL ALSO SAY THAT HAVING THIS POLICY IS IS REALLY IMPORTANT.

I BELIEVE IT'S A GREAT A GREAT ADDITION, AND IT'S AN EXAMPLE OF SOMETHING THAT THE PUBLIC CAN LOOK AT AND SEE WHAT WE'RE DOING, YOU KNOW AND WHEREAS BEFORE IT WAS IT WASN'T AVAILABLE WHAT WE WERE DOING.

SO AND IT TAKES, IT TAKES THE GUESSWORK OUT OF YOU AND YOUR STAFF, YOU KNOW, IN THE FUTURE, WHICH COULD BE STRESSFUL.

YOU KNOW, IT COULD BE FULL OF OTHER NUANCES THAT CAN BE LOOKED AT IN DIFFERENT WAYS, AND SO, YEAH, IT'S NICE TO HAVE IT NICE TO HAVE IT WRITTEN DOWN.

THAT'S WHAT WE'RE GOING TO DO. SO THANK YOU VERY MUCH FOR ALL THE WORK THAT WENT INTO THIS, BECAUSE IT'S OBVIOUS THAT, YOU KNOW, THIS DIDN'T HAPPEN OVER THE WEEKEND.

YEAH. YOU KNOW, WITH A, YEAH.

YEAH, IT'S GOOD. ALL RIGHT.

SO WE ALSO NEED A MOTION FOR FOR THIS ONE TO APPROVE THIS RECOMMENDATION ON THIS POLICY.

I'LL MAKE THE MOTION TO APPROVE.

OKAY. I'LL SECOND, AND ALL IN FAVOR.

AYE. OKAY.

CARRIES. THANK YOU VERY MUCH.

I'M GOING TO CALL A LITTLE BREAK HERE.

IT'S ALMOST NOON.

TEN MINUTE BREAK.

NO PUBLIC COMMENT.

PARDON ME? THERE'S NO PUBLIC COMMENT ON THAT ITEM, AND THERE ARE NO PUBLIC COMMENTS, SO WE DON'T HAVE TO EVEN PUT THE PUBLIC COMMENTS OFF.

TEN MINUTES. ALL RIGHT.

SO YEAH, WE'LL COME BACK ABOUT TEN AFTER NOON.

ALL RIGHT. WE ARE BACK ON LINE AT 12:11, AND OUR NEXT ITEM IS NUMBER FIVE, WHICH

[Informational Items]

ALL THE REST OF OUR AGENDA IS GOING TO BE INFORMATIONAL ITEMS. WE HAVE THREE MORE, AND THE FIRST ONE, FIVE A EXCUSE ME IS JOB ORDER CONTRACTING QUARTERLY STATUS UPDATE.

EXCELLENT. THANK YOU.

YEAH. GOOD AFTERNOON, FINANCE COMMITTEE MEMBERS.

I'M REN BATES CHIEF OF DESIGN AND CONSTRUCTION.

AS MENTIONED, THIS IS AN INFORMATIONAL ITEM AND IT IS THE QUARTERLY UPDATE ON OUR JOB ORDER CONTRACTING PROGRAM. WE GIVE THIS I SHOW UP HERE QUARTERLY.

SO THIS IS MY CHANCE TO GIVE YOU AN UPDATE ON HOW WHAT JOB ORDERS WE'VE COMPLETED, AND ALSO SORT OF REMIND YOU OF THE PROGRAM AND WHAT JOB ORDER CONTRACTING IS.

SO ON JANUARY 17TH OF 2023, THE BOARD AUTHORIZED EIGHT CONTRACTS OF JOB ORDER CONTRACTING.

WE BREAK THESE OUT INTO CLASSIFICATIONS OF CONTRACTORS.

SO A, B AND PAVING.

THE A IS SORT OF THIS IS JUST ALL REMINDERS TO THE MANY COMMITTEE MEMBERS, A ARE GENERAL ENGINEERING FIRMS. SO THEY DO UTILITIES KIND OF CAN DO ROAD WORK, DO MASSIVE GRADING, AND THE B'S ARE MORE OF THE BUILDING CONTRACTORS.

[01:30:06]

SOME OF THE BUILDING MAINTENANCE THAT IS DONE, AND THEN OUR LASTLY IS OUR PAVING CONTRACTOR, AND SO WE'VE LEARNED THROUGH THIS PROGRAM THAT JOB ORDER CONTRACTING, SOMETIMES CONTRACTORS WILL SUB OUT A LOT OF WORK.

SO THE PAVING ONES BECAUSE THE DISTRICT DOES A LOT OF PAVING WORK.

WE MAKE THEM SELF-PERFORM 60%.

SO THOSE ARE THE DIFFERENCES BETWEEN THREE.

YOU'LL SEE THAT THIS SAYS IT'S FOR A ONE YEAR PERIOD, AND YOU'LL NOTICE THAT THE CONTRACT THE BOARD AUTHORIZED IN 2023 OF JANUARY AND WE'RE IN SEPTEMBER, AND THAT SEEMS TO BE IN EXCESS OF A YEAR. SO AS A REMINDER, THESE CONTRACTS ARE ANNUAL BASED ON THE ISSUANCE OF OUR FIRST NOTICE TO PROCEED.

SO THE BOARD WILL AUTHORIZE THESE CONTRACTS.

IT TAKES US SEVERAL WEEKS TO A MONTH OR TWO TO EXECUTE THOSE AGREEMENTS.

SO IT HAS TO GET ROUTED AND SIGNED BY EVERYONE.

BY THE TIME WE THEN EXECUTE THOSE, OUR JOB ORDER CONTRACTING CONSULTANT MEETS UP WITH THE CONTRACTOR.

IF THEY'RE NEW, IF THEY'VE BEEN ESTABLISHED, THEY ALREADY KNOW SORT OF HOW THE SYSTEM WORKS, BUT THERE'S SOME LEAD TIME IN TERMS OF GETTING THEM OPERATIONAL, AND THEN WE ISSUE SOME JOB ORDERS. THEY WILL THEN PRICE THOSE, AND ONLY ONCE WE COME TO AN AGREEMENT ON THAT PRICE FOR THAT JOB ORDER FOR THE FIRST JOB ORDER.

DO WE START THE TERM ON AN ANNUAL TERM.

SO THAT MEANS IF WE AWARD IT IN JANUARY, I THINK OUR FIRST NTP FOR OUR FIRST CONTRACTOR WAS IN LIKE MAY OR JUNE OF 2023 AND SO WE ARE COMING TO THE END OF THAT.

OSTENSIBLY, WHAT THIS MEANS IS THAT IN PRACTICE, THESE ARE CONTRACTS THAT TAKE US ABOUT A YEAR AND A HALF TO TWO YEARS TO ADMINISTRATIVELY GET UP TO SPEED, UTILIZE AND THEN TERM OUT. THE CAVEAT TO THAT IS THAT THE TERM OF THE IS WORK CAN CONTINUE BEYOND.

SO AGAIN, ONCE THE TERM IS COMPLETE, WE CAN'T OFFER ANY NEW JOB ORDERS, BUT THEY CAN WORK ON JOB ORDERS THAT HAVE ALREADY BEEN ISSUED, AND TO THAT END, THAT MEANS IF THERE'S ADDITIONAL SCOPE, THEY CAN ISSUE A SUPPLEMENTAL WORK, AND SO WORK CAN PROCEED BEYOND THAT TERM DATE, BUT WE CAN'T ISSUE ANY NEW JOB ORDERS, AND THEN THE VALUES FOR THESE ARE PER CODE.

WE ARE AT A MINIMUM SUPPOSED TO OFFER $50,000 OF WORK, AND THEN OUR MAXIMUM CONTRACT VALUE IS 2 MILLION.

THIS AGAIN IS A DISTRICT AMOUNT MAXIMUM CONTRACT.

THE LAW IN THE STATE ALLOWS US TO GO MUCH HIGHER, BUT THIS IS SORT OF WHERE THE DISTRICT HAS LANDED.

ADDITIONALLY, I THINK I'LL ADD THAT THERE'S THREE OF A'S.

THREE B'S AND TWO PAVINGS BECAUSE WE UTILIZE DIFFERENT ONES, SOME OF THEM PERFORM A LITTLE BETTER, AND THIS GIVES US OPTIONS TO HAVE TO UTILIZE THE JOB ORDER CONTRACTING PROGRAM AND AWARD THE CONTRACTORS THAT ARE RESPONSIVE AND DO GOOD WORK.

LASTLY, JUST AS A REMINDER THEY BID THESE ARE FIXED TERM OR FIXED UNIT COSTS.

SO OUR GORDIAN GROUP CONSULTANTS HELP US CREATE A CONSTRUCTION TASK CATALOG, WHICH IS BASICALLY A FIXED COST FOR LOCAL WAGES AND LOCAL SUPPLIES OR MATERIALS, AND SO THAT IS THEN INCORPORATED, AND THAT IS WHAT THE CONTRACTORS BID ON ARE THOSE FIXED COSTS THAT THEY BID AN ADJUSTMENT FACTOR TO THOSE, AND WE AWARD ON THE LOWEST ADJUSTMENT FACTOR.

THANK YOU FOR LETTING ME REVIEW ALL OF THAT FOR YOUR EDIFICATION.

IT'S GOOD FOR ME TO JUST TO SHARE THAT AS WELL.

SO HERE WE ARE.

THIS IS SO ALL THAT SAID IS WE ARE ABOUT TO TURN OUT.

I BELIEVE SIX OF OUR EIGHT CONTRACTS HAVE EXPIRED.

THAT DOESN'T MEAN THEY'RE NOT WORKING AGAIN, BECAUSE THEY'RE FINISHING JOB ORDERS AND THERE'S SOME JOB ORDERS OPEN AND SOME THAT ARE GETTING SUPPLEMENTALS.

SO BUT THESE ARE THE WORK THAT WE'VE COMPLETED WITH THIS ROUND.

IT RANGES FROM YOU CAN SEE CLEANUP WORK TO SHADE STRUCTURE REPLACEMENT TO TRAIL REPAIRS.

SO AGAIN, AS A REMINDER JOB ORDER CONTRACTING IS UTILIZED BY SEVERAL DIVISIONS MAINTENANCE AND SKILLED TRADES USES IT OPERATIONS SOMETIMES USES IT DESIGN AND CONSTRUCTION UTILIZES IT, AND SO IT IS BENEFICIAL IN THAT THE BOARD APPROVES THESE CONTRACTS AND THEN STAFF CAN NEGOTIATE, MAKE SURE THAT THESE PRICES ARE CONCURRENT, AND IT ALLOWS US TO LIVE OR WORK WITHOUT HAVING TO COME TO THE BOARD FOR AS MANY TOUCHES.

SO WE'VE YOU CAN WE'VE DONE QUITE A BIT OF WORK.

WE HAVE A SIGNIFICANT WORK STILL IN PLAY ON THESE FOR WHERE WE ARE.

SO HERE'S THE LIST OF THAT, AND THEN YOU CAN SEE AS I SPOKE, THERE'S A COUPLE ACTUALLY OUTSTANDING THAT ARE STILL THERE ON ONE OF OUR CONTRACTORS THAT STILL HAS CAPACITY AND IS STILL AN ACTIVE TERM.

NOW I'LL SHARE SOME HIGHLIGHTS OF SOME PROJECTS THAT WE'VE COMPLETED WITH JOB ORDER CONTRACTING, AND THEN I'M HAPPY TO ANSWER QUESTIONS IF THERE ARE ANY QUESTIONS IN BETWEEN.

SO THIS WAS A BIG ONE THAT HAPPENED.

WE UTILIZED JOB ORDER CONTRACTING TO COMPLETE THE PINOLE SHORES TRAIL REPAIR.

THIS WAS A STORM DAMAGE PROBLEM, AND IT'S BETWEEN TWO RAILROADS, AND SO WE THOUGHT IT WAS GOING TO BE VERY CHALLENGING, I THINK.

WELL, IT WAS VERY CHALLENGING.

I WON'T DISCOUNT THAT BECAUSE OF ALL OF THE THINGS, BUT I THINK WHAT JOB ORDER CONTRACTING DO IS LET US ASSESS THIS AND WORK WITH THEM AS WE DEALT WITH THE TWO

[01:35:06]

SO THIS WAS SUCCESSFUL.

IS THAT OPEN TO USE NOW? IT IS. GREAT.

OKAY. THANK YOU.

YEP.

SO THAT WE'VE ACCEPTED AND IT'S READY TO GO, WHICH IS AN EXCELLENT.

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

I'LL JUST KIND OF RUN THROUGH THESE QUICKLY.

IF YOU HAVE QUESTIONS, I'M HAPPY TO ANSWER QUESTIONS AS I'M ABLE ABOUT PROJECTS.

LIKE I SAID. SOME OF THESE ARE NOT IN MY GROUP TO MANAGE, SO I'D HAVE TO FIND OUT MORE.

THIS WAS THE LAFAYETTE RIDGE STAGING AREA IN BRIONES, WHICH WAS A REPAVE.

WE TOOK OUT THE CHEM TOILET AND PUT IN A NEW FLUSH TOILET AND CONNECTED UTILITIES.

SO THIS WAS A VERY NICE UPGRADE.

WE'RE STILL UNFORTUNATELY WAITING ON SOME UTILITIES TO TAKE OCCUPANCY OF THE RESTROOM BUILDING RIGHT NOW, BUT THAT'S NOT A PROBLEM.

ANYWAY, THAT'S WE FACED THAT ON OTHER CHALLENGES TOO.

THAT'S NOT JOB ORDER CONTRACTING, AND THEN HERE'S ANOTHER BIG BREAK SHADE STRUCTURE REPLACEMENT.

SOME OF THESE WHERE WE HAD SOME FABRIC SALES OUT THERE FOR SHADE AND OPERATIONS, IT'S VERY WINDY, AND SO THOSE WERE IN DISREPAIR AND WERE UNSAFE, AND SO WE UTILIZED JOB ORDER CONTRACTING TO COME UP WITH A MORE SUBSTANTIAL AND SOLID STRUCTURE FOR PROVIDING SHADE OUT OF BIG BREAK. DID THAT INCLUDE THE AMPHITHEATER OR IS THAT DID NOT INCLUDE THE AMPHITHEATER? SO IF YOU RECALL WE WERE OUT THERE AS A SITE TOUR THE AMPHITHEATER PORTION.

SO THESE COVER THE PICNIC AREAS.

THE AMPHITHEATER IS A MUCH LARGER AREA, AND WE'VE LEARNED THAT TO COVER THAT WITH A STRUCTURE SUCH AS THIS IS VERY COSTLY.

WE DON'T HAVE FUNDING.

IT'S WE'RE STILL THINKING ABOUT IT.

WE'RE MAKING BUDGET ASKS IN TERMS OF HOW TO DO THAT.

SO IT'S NOT GONE, BUT THE AMPHITHEATER IS STILL NOT COVERED WITH THE SHADE SAIL YET.

MIGHT BE CHEAPER TO HAND OUT UMBRELLAS.

THAT'S AN OPERATIONAL THING I WON'T CALL MINE.

I'LL ALSO.

SO THOSE ARE THE ONES THAT I HIGHLIGHT.

I'LL ALSO NOTE THAT WHEN WE WERE ON OUR BOARD TOUR ON THE 13TH, AND WE WENT AND LOOKED AT THE COURTYARD IN TILDEN.

THAT ROOFING PROJECT WAS DELIVERED WITH A JOB ORDER CONTRACTING CONTRACTOR, TO WHICH I FOLLOWED UP WITH NATE AFTER AND JUST SAID, HOW DID IT GO? AND HE WAS. HE SAID IT WENT WELL.

SO WE ARE CONSTANTLY SEEKING FEEDBACK FROM PROJECT MANAGERS AND FOLKS THAT UTILIZE TO MAKE SURE THAT IT'S WORKING TRYING TO FINE TUNE AS WE CAN.

WE ALWAYS LEARN AND LESSONS WHEN WE HAVE THAT.

SO THAT COMPLETES MY PRESENTATION.

I'M HAPPY TO FIELD QUESTIONS, LIKE I SAID, AS I'M ABLE ABOUT PROJECTS OR THE PROGRAM, THIS IS JUST INFORMATIONAL, AND SO I'M HERE AT YOUR DISCRETION TO ANSWER ANYTHING YOU MAY HAVE. ANY QUESTIONS, COMMENTS? YEAH. HI.

I NOTICED THERE'S A FEW PROJECTS IN THE JOB ORDER LIST.

THERE'S A COUPLE THAT ARE UNDER 50,000 VISITORS CENTER CLEANUP AND DEL VALLE, REFINISHING THE FLOOR.

YEAH, THAT'S A GREAT QUESTION, DIRECTOR ROSARIO, AND IT'S A REMINDER TO ME IS THAT WE OUR POLICY STATES THAT WE UTILIZE JOB ORDER CONTRACTING FOR PROJECTS THAT ARE OVER 50K.

THERE IS A CLAUSE IN THERE THAT ALLOWS US TO HAVE APPROVAL THAT WILL EXEMPT THAT SMALL WILL ALLOW FOR PROJECTS THAT ARE OF LESS THAN THAT VALUE. TO THAT END, THE FLOORING ONE WAS ONE THAT THE VISITOR CENTER WAS DONE ON A PREVIOUS JOB ORDER CONTRACT AND TO THAT TERM IT ENDED OUT AND THEN WE HAD SOME THERE WAS A FLOOR ISSUE THAT WE ENDED UP UTILIZING THE SAME CONTRACTOR BECAUSE THEY GOT THE NEW CONTRACT TO HELP REVIVE THAT, REVISE THAT, BUT TO THAT END, AND TO YOUR POINT IS THAT WAS LESS THAN 50K FOR THAT WORK, BUT CUMULATIVELY, FOR THAT WHOLE PROJECT, WE ADMINISTRATIVELY WE DID THAT BECAUSE THEY HAD THE WHEREWITHAL, THE KNOWLEDGE OF IT.

THEY PART OF IT WAS A WAS AN ASSESSMENT OF A WARRANTY ISSUE.

SO THERE WAS PART OF THAT, BUT THEN THE FIX WAS MORE TO IT, AND SO WE HAD TO ADD THAT IN, AND SO THAT ONE WAS EXEMPTED BECAUSE THEY HAD KNOWLEDGE.

WE'RE WORKING ON IT. IT WAS AN EXTENSION OF A PREVIOUS JOB ORDER.

SOME OF THE OTHER ONES, WHAT WAS THE FLOORING ONES.

SO I THINK PART OF THAT IS AGAIN, THAT ONE WOULD BE WE LUMP THOSE TOGETHER SO I DON'T HAVE IT RIGHT IN FRONT OF ME, BUT WE DO SOME MAKE TIME, MAKE SOME EXCEPTIONS DEPENDING ON SPECIALTY AND OR IF THERE'S IF THE CIRCUMSTANCES CALL FOR IT, AND WE RARELY MAKE THAT, BUT WE DO MAKE SOME EXCEPTIONS.

OKAY. I JUST WANT TO MAKE SURE I MEAN, AS LONG AS WE HAVE THE ABILITY TO DO IT IN-HOUSE OR NOT.

I MEAN, YEAH, NO, I THINK AND TO THAT END, WE ARE WORKING.

YES. I THINK WE ARE NOT TRYING TO TAKE ANY WORK FROM IN-HOUSE.

I THINK PART OF IT IS THE FLOORING, AS I WON'T SPEAK TO ANYWAY, I THINK I APPRECIATE YOUR COMMENT.

[01:40:09]

WE DON'T AWARD LOTS OF JOB ORDERS OVER 50K, AND I'M HAPPY TO FIND OUT MORE ABOUT THE SPECIFIC ONE YOU'RE TALKING OF.

GREAT, AND THEN RECENTLY I WAS AT THE CALIFORNIA SPECIAL DISTRICTS ASSOCIATION CONFERENCE, AND THERE WAS A, THERE WAS A PRESENTATION ON THE CALIFORNIA UNIFORM CONSTRUCTION COST ACCOUNTING COMMISSION.

ARE WE A MEMBER OR.

BECAUSE IT SOUNDS LIKE THEY ARE IT'S AN EIGHT PANEL COMMISSION, FOUR APPOINTEES BY THE STATE COMPTROLLER AND FOUR MEMBERS FROM THE BUILDING TRADES, AND WHAT IT DOES IS IT SOUNDS LIKE THEY OFFER IF I WAS LISTENING CORRECTLY, THEY OFFER A PRICE PRICING INDEXES AND BUT IT ALLOWS YOU TO DO MORE PROJECTS. IT ALLOWS AGENCIES TO ACTUALLY DO MORE IN-HOUSE, BUT AT THE SAME TIME, YOU HAVE TO HOLD TO THESE STANDARDS, WHICH I THINK WE ALREADY DO, BUT THEY ALSO PROVIDE INSPECTORS WHERE THEY, THEY ACTUALLY FOLLOW UP ON PREVAILING WAGE AND ALL THAT STUFF.

IT'S I THINK IT WOULD BE SOMETHING WE SHOULD LOOK INTO IF NOT A MEMBER ALREADY.

I DON'T BELIEVE WE ARE A MEMBER AND I GOT CALIFORNIA UNIFORM CONSTRUCTION.

CALIFORNIA UNIFORM CONSTRUCTION COST ACCOUNTING COMMISSION.

OKAY. SO THAT'S KIND OF COLLOQUIALLY REFERRED TO AS CUCCAC.

YES. THE CUCCAC PROGRAM, AND WE AS A DISTRICT WOULD NEED TO OPT-IN TO THAT AS A PROCUREMENT METHOD, AND WE HAVEN'T DONE SO.

I HAVEN'T LOOKED INTO WHY WE HAVE OR HAVEN'T OR WHETHER THERE'S ANY REASONS WHY WE SHOULD OR SHOULDN'T, BUT I THINK THAT IT'S SOMETHING THAT WE CAN TALK ABOUT, AND SO BECAUSE WE'RE NOT WE'RE NOT A CUCCAC AGENCY.

WE'RE DEFINITELY NOT PART OF THE COMMISSION.

YEAH. YEAH. SO WE'LL GET BACK TO YOU BROUGHT IT UP JUST IF IT'S A POSSIBILITY, AND IT MIGHT BE OFFERING THE SAME SERVICES AS A GORDIAN.

SO. GREAT.

THANK YOU FOR THAT, AND THANK YOU, COUNCIL, FOR THE COMMENT.

ALL RIGHT. ANY OTHER COMMENTS? YEAH. THIS IS A GREAT, YOU KNOW, QUARTERLY UPDATE, AND I KNOW THAT YOU'RE IT SEEMS LIKE THESE QUARTERS ARE GOING BY FAST BECAUSE I FEEL LIKE YOU'RE JUST HERE, SO THANK YOU FOR JOINING US.

I GUESS AT SOME POINT, THERE MIGHT BE MORE OF A COMPREHENSIVE REPORT OUT, I IMAGINE, MAYBE WITH THE FULL BOARD.

I'M NOT SURE WHEN THAT IS OR IF THAT IS ON THE SCHEDULE.

I WOULD HOPE SO AT SOME POINT, AND WHEN IT IS, I THINK IT WOULD BE HELPFUL TO SHARE, YOU KNOW, WHEN THERE'S SOME OF THESE EXCEPTIONS OR, YOU KNOW, IF THERE HAD BEEN A WARRANTY ISSUE. SO I'M REALLY GLAD THAT, YOU KNOW, DEE ASKED THAT QUESTION.

THAT MIGHT JUST BE GOOD TO INCLUDE EITHER AS LIKE A FOOTNOTE OR JUST AS AN ASIDE IN REGARDS TO THE OVERALL PROGRAM BUT OTHERWISE I KNOW THAT COMPREHENSIVELY, I KNOW WITH DEL VALLE SPECIFICALLY, WE'VE HAD SO MUCH DIFFERENT STORM DAMAGE CLEANUPS, AND I KNOW AT THE OPERATIONS COMMITTEE, WE RECEIVED A FULL REPORT OUT OF THAT.

SO MAYBE WHEN WE DO A COMPREHENSIVE OVERVIEW OF THE JOB ORDER CONTRACTING PROGRAM, AND THAT COULD BE LIKE A YEAR FROM NOW FOR THE FULL BOARD OF DIRECTORS. I GUESS I'LL HYPOTHETICALLY JUST SAY, YOU KNOW, IT MIGHT BE ALSO GOOD JUST TO REFERENCE SOME OF THE OTHER SOME OF THE OTHER, I GUESS, OVERLAPPING REPORTS THAT HAVE HAPPENED, SUCH AS THIS OPERATIONS COMMITTEE REPORT.

JUST BECAUSE THERE'S SO MANY DIFFERENT RESOURCES OUT THERE AND SO MANY DIFFERENT PIECES OF INFORMATION, AND THEN ALSO, I THINK EVEN REFERENCING OUR DIFFERENT BOARD SITE TOURS BECAUSE, YOU KNOW, YOU'RE EVEN MENTIONING, YOU KNOW, THE LAFAYETTE PARKING LOT AND I KNOW WE WERE THERE ALSO AT THE END OF JUNE.

SO THAT'S ALSO HELPFUL, BUT FOR THE QUARTERLY REPORT THIS IS PERFECT.

THANK YOU. GREAT. THANK YOU.

THAT'S A THANK YOU FOR THAT COMMENT, AND I THINK TO THAT END, JUST AS A SINCE I SPOKE OF HOW OUR CONTRACTS ARE EXPIRING, YOU MIGHT WANT TO KNOW NEXT STEPS, AND SO TO THAT END, THE BOARD AUTHORIZED A WE WENT OUT TO RFP FOR A CONSULTANT, AND SO THE BOARD AUTHORIZED THAT IN JUNE, I THINK OF THIS YEAR.

MAY MAYBE PERHAPS SO WE'VE ENTERED INTO AN AGREEMENT WITH THE GORDIAN GROUP.

INTERNALLY, WE'RE WORKING ON REVISIONS TO OUR FRONT END FOR OUR GENERAL CONDITIONS, AND SO WE'RE WORKING TO THAT INTERNALLY FOR JUST ALL OF OUR CAPITAL PROJECTS.

I'M WORKING WITH ASSISTANT COUNSEL, AND AS PART OF THAT, WE'D LIKE TO USE THOSE NEW GENERAL CONDITIONS FOR OUR NEXT ROUND OF CONTRACTS.

SO THERE'S A LITTLE BIT OF BACK AND FORTH REVIEW INTERNALLY THAT THEN I HAVE TO GET OUR CONSULTANT TO WORK WITH BECAUSE JOB ORDER CONTRACTING DOESN'T HAVE CHANGE ORDERS, AND SO SOME OF THE CONTRACT LANGUAGE NEEDS TO BE REVISED.

SO WE'RE CURRENTLY IN THE THROES OF THAT.

IN TERMS OF NEXT STEPS, THE GOAL BEING THAT WE HAVE THAT FINALIZED AND REVISED SO THAT WE CAN GO OUT TO BID FOR OUR NEXT ROUND OF CONTRACTS THIS FALL.

[01:45:07]

SO WE HAVE A MANDATORY MEETING WITH OUR CONTRACTORS.

WE'LL GO OUT TO BID, HAVE THAT BID PERIOD AND HOPEFULLY COME BACK TO THE BOARD FOR AWARD AGAIN IN JANUARY SO THAT WE CAN HAVE SORT OF WHILE WE'RE IN THE WINTER. WHEN SPRING COMES, WE HAVE CONTRACTORS UP AND RUNNING.

SO THAT'S WHERE WE ARE IN TERMS OF THAT PROCESS, AND TO THAT END, WHEN WE COME TO THE BOARD FOR THAT AWARD OF CONTRACT, I THINK I CAN MODIFY THE CONTRACT OR THE PRESENTATION TO SPEAK TO SOME OF THE THINGS YOU'VE MENTIONED.

DIRECTOR SANWONG JUST AS AN OVERVIEW REMINDER, AND I THINK THAT WOULD BE PROBABLY A GOOD FORUM TO SORT OF JUST ADDRESS THE FULL BOARD AND GIVE SORT OF THIS AGAIN, BUT WITH ADDITIONS, AS YOU'VE NOTED.

YEAH, AND I THINK TO THAT ALSO, I THINK IT'S REALLY INTERESTING TO MENTION, YOU KNOW, WHEN SOME OF THESE PROJECTS ARE IN RESPONSE TO, YOU KNOW, STORM DAMAGE OR SOME TYPE OF WEATHER IMPACT OR NATURAL EVENT OCCURRENCES.

SO, YOU KNOW, YOU SHARED THE PHOTO OF THE WORK THAT WAS DONE IN POINT PINOLE.

I THINK THAT'S REALLY HELPFUL TO SEE, AND ALSO, YOU KNOW, I THOUGHT THAT WAS A GREAT QUESTION.

OH, IS IT OPEN? SO MAYBE JUST INCLUDE, YOU KNOW, SOME SORT OF ON THE SLIDE, JUST, YOU KNOW, THIS THIS STORM EVENT HAPPENED JANUARY OF 2023.

THE WORK HAPPENED, YOU KNOW, AT THE END OF 2023, AND IT'S NOW OPEN AS OF 2024.

SOMETHING ALONG THOSE LINES, I THINK COULD BE HELPFUL JUST TO SHOW HOW EFFECTIVE AND SUCCESSFUL THIS PROGRAM HAS BEEN IN TERMS OF US BEING ABLE TO RESPOND TO UNEXPECTED SITUATIONS SUCH AS STORM DAMAGE.

GREAT. THANK YOU.

YEAH, I THINK THIS IS A VERY POSITIVE UPDATE THAT YOU'RE GIVING US, AND I APPRECIATE ALSO THE LEVEL OF PREDICTABILITY THAT WE PROVIDE FOR OURSELVES, YOU KNOW, BY HAVING THESE PRESCRIPTIVE THINGS THAT ARE, THAT ARE ALREADY SPELLED OUT AND ALSO THE FACT THAT IT DEFINITELY SAVES TIME GOING DOING IT THIS WAY, AND IT'S JUST EASIER TO DO THIS WAY, AND WE CAN WE CAN ACTUALLY GET MORE STUFF DONE.

THAT'S WHAT I LIKE TO SEE.

SO THANK YOU FOR PROVIDING US WITH THAT, AND YOU GOT ONE MORE.

ALL RIGHT. WE CAN DO ONE MORE.

THE LAFAYETTE-MORAGA TRAIL IS THAT FOR THE SECTION BETWEEN SECOND AND THIRD STREET OR IS THIS THE CANYON? THAT'S THE ONE FOR THE EAST BAY MUD PROPERTY.

WE ARE WORKING ON THE LAFAYETTE ONE, AND WE'RE UTILIZING A JOB ORDER CONTRACTOR.

WE JUST HAVEN'T WORKED.

THAT PROJECT IS CHALLENGING, BUT WE'RE ADDRESSING IT.

IT'S THE ONE THAT'S ALWAYS THREE MONTHS OUT, YOU KNOW.

THAT'S RIGHT. ALTHOUGH NO MATTER WHEN YOU CHECK, IT'S THREE MONTHS.

NO, NO, THIS ONE HAS TO BE DONE ASAP.

SO THIS ONE HAS TO BE DONE SOONER THAN THREE MONTHS.

SO WE'RE CRANKING TO GET IT DONE.

ALL RIGHT, I'LL HAVE AN UPDATE NEXT TIME I COME ABOUT THAT.

BECAUSE WE ARE I HOPE I HOPE JUST A GENERAL COMMENT.

I HOPE WE MAKE SOME KIND OF ANNOUNCEMENT TO THE WORLD THAT THIS IS NOW OPEN BECAUSE, DULY NOTED.

I WILL SPEAK TO THOSE THAT DO THOSE THINGS, NOT US, AND REMIND.

YEAH, NO, I KNOW, I KNOW, THAT'S WHY I'M MAKING IT A VERY GENERAL COMMENT, BUT THAT'S A GOOD WAY FOR US TO FIND OUT TOO.

ALL RIGHT. SO THANK YOU VERY MUCH, REN, AND NEXT-- CAN WE JUST CHECK AND MAKE SURE THERE AREN'T ANY PUBLIC COMMENTS BEFORE WE MOVE ON? I THINK SO.

NO PUBLIC COMMENTS.

ALL RIGHT, AND NEXT IS ITEM FIVE B THE PROPERTY TAX FORECAST.

THIS IS A PRETTY IMPORTANT THING THAT IS GOING TO HELP US UNDERSTAND WHAT'S GOING ON.

ALL RIGHT.

DEBORAH SPAULDING, ASSISTANT GENERAL MANAGER OF FINANCE AND MANAGEMENT SERVICES, AND I'M JUST PULLING UP THE PRESENTATION HERE.

SO THIS IS AN ANNUAL REPORT, AND WE GET THIS INFORMATION FROM BEACON IN TIME FOR US TO USE IT FOR OUR UPCOMING 2025 BUDGET, AND WE'VE BEEN SO A LITTLE BIT OF HISTORY ABOUT BEACON AND EAST BAY PARKS. WE'VE BEEN WORKING WITH THEM SINCE 2009, AND THE REASON WE FIRST CONTRACTED WITH THEM WAS THAT WE HAD JUST GOTTEN MEASURE WW APPROVED, WE HAD MADE A PROMISE TO THE VOTERS TO KEEP THE ASSESSED ASSESSMENT AT UNDER $10 PER 100,000 OF AV, AND SUDDENLY THERE WAS THE GREAT RECESSION AND ASSESSED VALUATION WAS CRASHING, AND SO WE WERE TRYING TO FIGURE OUT HOW TO STRUCTURE THE DEBT SERVICE TO KEEP THAT PROMISE, AND IT WAS A STRUGGLE.

SO THIS WAS THEIR ORIGINAL FORECAST JUST TO, YOU KNOW, THINGS ARE DEFINITELY LOOKING MUCH BETTER THAN THEY WERE BACK IN THOSE DAYS.

SO THE BEACON FORECAST, THEY GIVE US KIND OF THREE LEVELS OF INFORMATION.

THEY START OUT BY THE VERY HIGH LEVEL FEDERAL, AND THEN THEY GET INTO CALIFORNIA SPECIFIC, AND THEN THEY DIVE MOST DEEPLY INTO THE EAST BAY, BECAUSE THAT'S WHAT WE CARE ABOUT IS HOW IS THE ASSESSED VALUE GOING TO DO IN THE EAST BAY IN THE COMING YEAR? SO AT THE FEDERAL LEVEL, THEY TALK ABOUT A LOT OF THE STUFF YOU HEARD FROM MONIQUE ALREADY.

[01:50:02]

THEY DO TALK A LOT ABOUT INVESTMENT IN STRUCTURES AND REAL ESTATE IN GENERAL.

SO THEY'RE SAYING THAT INVESTMENT IN STRUCTURES IS INCREASING AT THE FEDERAL LEVEL DESPITE ALL OF THE PROBLEMS WITH COMMERCIAL REAL ESTATE VALUATIONS, WHICH IS WHICH IS STILL A PROBLEM.

THEN THEY LOOK AT CALIFORNIA AND THEY SAY, OH, WE'RE NOT DOING AS POORLY AS IS COMMONLY BELIEVED.

I THINK YOU ALL KNOW THAT.

I GET THERE'S A LOT OF BAD PRESS OUT THERE ABOUT CALIFORNIA, BUT THE STATE'S ECONOMY IS STILL EXPANDING.

IT'S JUST NOT EXPANDING AS QUICKLY AS THE REST OF THE COUNTRY.

SO AGAIN, THAT WAS KIND OF BROUGHT UP IN THE INVESTMENT PRESENTATION EARLIER TODAY, AND THEN LASTLY, THE EAST BAY.

SO HOME SALES ARE NOT AS ROBUST AS THEY USED TO BE.

THERE'S JUST FEWER HOMES ON THE MARKET, AND A LOT OF THAT IS BECAUSE HOMEOWNERS THAT ARE IN A HOUSE, THEY HAVE A NICE LOW MORTGAGE RATE AND THEY DON'T WANT TO LEAVE, AND SO THAT'S STARTING TO CHANGE.

THE THERE ARE PEOPLE WHO ARE SORT OF GETTING USED TO THIS.

ALL RIGHT. MORTGAGE RATES ARE HIGHER.

WE NEED TO MOVE ANYHOW, BUT IT'S HOLDING THINGS IN A LITTLE BIT MORE OF A FIXED POSITION THAN THEY OTHERWISE WOULD BE.

BECAUSE WHEN PEOPLE SELL THEIR HOMES, THAT'S WHEN WE GET THAT BUMP UP IN THE ASSESSED VALUE.

SO THEIR BEACON IS SAYING THEY EXPECT PRICES TO STAY IN POSITIVE TERRITORY, MOSTLY RELATED TO THIS LIMITED SUPPLY.

I'M SORRY THIS IS GETTING CUT OFF ON THE PROJECTOR UP THERE, BUT SO BEACON IS EXPECTING PRICES TO STAY IN POSITIVE TERRITORY, MOSTLY RELATED TO LIMITED INVENTORY OF HOMES, WHICH MEANS, YOU KNOW, LOW SUPPLY, HIGH DEMAND, AND SO THAT BODES WELL FOR AV GROWTH IN THE NEAR TERM, AND SO THIS IS LOOKING AT THE FORECAST THAT THEY GAVE US FOR THIS YEAR COMPARED TO HOW IT WAS LAST YEAR.

SO IT IS LOOKING BETTER.

SO THE MORE RECENT PROJECTION IS THE ONE ON TOP.

SO THEY'RE SAYING THAT WE'RE GOING TO BE HOVERING AROUND THE 5, 4.5% FOR THE COMING YEARS.

WHEREAS LAST YEAR THEIR PROJECTION WAS YOU KNOW DIPPING DOWN QUITE A BIT.

SO SO THAT'S POSITIVE NEWS.

WE DID PUT IN YOUR PACKET THE THREE FORECASTS.

THEY GIVE US A LOW FORECAST A BASELINE FORECAST AND A HIGH FORECAST.

SO WE PUT ALL THREE IN THE PACKET, AND WE ALWAYS USE THE BASELINE FORECAST IN OUR PROJECTION, BUT IT'S GOOD TO SEE WHAT THE RANGE COULD BE.

SO APPROXIMATELY 4.5% IS WHAT THEY'RE PROJECTING FOR 2025.

SO HERE ARE THOSE THREE LOW BASELINE AND HIGH OPTIONS FOR THE COMING YEAR, AND SO WE COMBINE WHAT WE KNOW FOR 2024-25 WITH WHAT THEY'RE FORECASTING FOR 25-26 TO COME UP WITH OUR 2025 PROPERTY TAX PROJECTION.

SO THIS IS INFORMATIONAL ONLY, AND I'M HAPPY TO TRY AND ANSWER ANY QUESTIONS YOU HAVE.

YES. NO QUESTIONS, BUT JUST A COMMENT.

I JUST LOVE THIS CHART OF SHOWING FORECASTS FROM PREVIOUS YEARS AND FROM THE PROJECTIONS TO THE ACTUALS.

THEY REALLY HAVE BEEN PRETTY ACCURATE OVER THE YEARS, AND I WAS HAPPY TO SEE THAT BECAUSE, WOW.

I MEAN, BECAUSE WE BASE EVERYTHING ON THOSE PROJECTIONS AND THEY'RE REALLY, THEY REALLY ARE GOOD, AND THEN JUST ON THE HOUSING THING, WHAT THEY SAID HERE IS 17% OF THE HOUSING IS BEING BOUGHT BY.

THAT WAS INTERESTING IN CORPORATIONS OR WHATEVER.

YEAH. INVESTORS AND THEY THINK THAT THERE'S AN ATTEMPT TO HOLD PRICES AT A CERTAIN RANGE.

SO YEAH, I WAS REALLY DISAPPOINTED THAT THE HOUSING BOND DIDN'T GO UP, BUT I THINK THAT WAS THE GENERAL THE PULLING ON ALL THE BONDS AREN'T VERY GOOD, AND I NOTICED SAN JOSE PULLED THEIR PARKS BOND.

OH, DID THEY? YEAH.

SO I GUESS IT WASN'T GOOD FOR US EITHER.

YEAH, RIGHT, BUT HOPEFULLY THE FUTURE WILL BODE WELL SO THAT WE CAN BECAUSE IF WE EXPECT TO OPEN NEW PARKS AND MAINTAIN OUR LEVEL OF OUR LEVEL OF SERVICE, WE'RE GOING TO HAVE TO PUT WE'RE GOING TO HAVE TO PUT A BOND UP IN THE FUTURE.

SO THAT'S UP TO YOU GUYS.

SO THANK YOU. THANK YOU.

THIS IS VERY INFORMATIVE, AND IT REALLY DOES HELP WITH PROJECTING OUR BUDGETS.

THE OTHER THING ABOUT THOSE NUMBERS IS THAT THEY'RE PRETTY THOSE INCREASES ARE PRETTY SUBSTANTIAL, AND THEY'RE, YOU KNOW, CONSISTENTLY A

[01:55:01]

LET'S JUST SAY I MEAN, SOMETIMES IT'S QUITE HIGH.

IT'S NEVER REALLY VERY RARELY SOMETHING VERY, VERY LOW, YOU KNOW.

SO WE ARE IN A FORTUNATE SITUATION TO BE HAVE A GROWING REVENUE STREAM, YOU KNOW, THAT'S FAIRLY DEPENDABLE AND PREDICTABLE BECAUSE WE HIRE BEACON ECONOMICS TO HELP US WITH THE PREDICTABILITY OF IT.

SO THAT'S REALLY GREAT.

SO DO YOU HAVE ANY QUESTIONS OR COMMENTS? I DO, AND MAYBE I MIGHT WANT TO SET UP SOME SEPARATE TIME WITH YOU.

YOU KNOW, I'M PRETTY FAMILIAR, SO I ALWAYS LIKE TO THINK ABOUT IT FROM THE MAYBE LIKE THE INDIVIDUAL OR THE HOUSEHOLD PERSPECTIVE, AND CERTAINLY I'M FAMILIAR WITH RESIDENTIAL LIKE PROPERTY TAX STATEMENTS AND HOW THAT SET UP.

I'M LESS FAMILIAR WITH COMMERCIAL REAL ESTATE, AND SO I WOULD JUST BE CURIOUS TO SEE THAT, AND ALSO MAYBE THE POTENTIAL, MAYBE THE BREAKOUT, BECAUSE THE DATA WE'RE SEEING HERE, IT'S BOTH COMMERCIAL AND RESIDENTIAL.

CORRECT. IT'S COMBINED TOGETHER.

THIS ISN'T JUST.

IT IS, YOU KNOW, WHAT THEY WRITE ABOUT IN THEIR CHARTS ARE DEFINITELY MORE FOCUSED ON RESIDENTIAL, BUT IT DOES INCLUDE COMMERCIAL, BUT IT DOES INCLUDE COMMERCIAL.

YEAH. YEAH, AND YOU KNOW, MAYBE AS WE SEE WHAT HAPPENS WITH THE COMMERCIAL REAL ESTATE MARKET IN THE BAY AREA AND THE EAST BAY, WE MAY WANT A LITTLE BIT MORE OF A CALL OUT.

I KNOW THEY HAVE SOME OF IT AT THE VERY BACK OF THE REPORT I HAD SEEN, BUT I DIDN'T REALLY FEEL LIKE THAT WAS LIKE ENOUGH FOR ME TO KIND OF SEE THAT DIFFERENCE, AND ALSO JUST BECAUSE OF MY I HAVE LESS FAMILIARITY WITH COMMERCIAL REAL ESTATE PERSONALLY.

SO IT'S ALSO AN AREA OF LESS INFORMATION FOR ME, AND I DO KNOW THAT IN MANY CASES, YOU KNOW, RESIDENTIAL DOES DRIVE PROPERTY TAXES, BUT I GUESS I JUST DON'T FULLY KNOW WHAT THAT BREAKDOWN IS, AND ALSO IN TERMS OF THE GROWTH OR PROJECTED GROWTH OR PROJECTED DECREASE IN COMMERCIAL REAL ESTATE, I KNOW THIS IS HAPPENING A LOT IN PLEASANTON. I KNOW THERE'S A LOT OF COMMERCIAL REAL ESTATE IN PLEASANTON, AND A LOT OF THOSE COMMERCIAL BUILDINGS ARE BEING REASSESSED RIGHT NOW, AND SO I KNOW THAT'S GETTING CALCULATED INTO PROPERTY TAX PROJECTIONS FOR THAT CITY SPECIFICALLY, AND I'M NOT SURE IF OTHER CITIES WITH COMMERCIAL PROPERTY AND COMMERCIAL REAL ESTATE ARE ALSO LOOKING AT THIS, BUT I KNOW THAT IS A CONCERN THAT I'M HEARING ABOUT IN AT LEAST ONE OF OUR EAST BAY CITIES, AND I HAVE TO IMAGINE IT'S ALSO HAPPENING IN OTHERS.

YOU KNOW, I THINK ABOUT FREMONT. YOU KNOW, YOU DRIVE THROUGH SOME PORTIONS OF FREMONT, AND IT'S ALL COMMERCIAL REAL ESTATE AND SO I WOULD BE CURIOUS ABOUT THAT.

LET ME FOLLOW UP WITH THEM AND SEE IF THEY HAVE ANY DATA THEY CAN SEND OVER.

I IMAGINE THEY HAVE IT READILY AVAILABLE AND CAN JUST TELL US THESE THINGS.

YEAH, THAT'D BE NICE. YEAH, AND THEN I GUESS ON THE RESIDENTIAL REAL ESTATE FRONT, I MEAN, I THINK THIS IS AN APPROPRIATE FORECAST.

SO I THINK THEY DID A GOOD JOB WITH THE REPORT, BUT I KNOW THAT THERE ARE IN TERMS OF HOUSING AND HOUSING FORECASTS I KNOW THAT THERE'S A LOT OF CONCERNS IN REGARDS TO, YOU KNOW, LIKE GENERATIONAL OUTLOOK IN TERMS OF SOME OF THE YOUNGER GENERATIONS NOT BEING ABLE TO AFFORD HOUSING PURCHASES, AND I DON'T KNOW IF THAT'S SOMETHING TO BE INCLUDED HERE, BUT, YOU KNOW, AS WE MARCH FORWARD, COULD THAT BE A POTENTIAL ISSUE IF THERE'S NOT REALLY A POPULATION TO BE ABLE TO AFFORD PURCHASING THESE HOUSES, IS THERE SOME LONGER TERM RISK ON THAT FRONT? I THINK THIS PARTICULAR REPORT, I DON'T KNOW IF THAT RISK NECESSARILY NEEDS TO BE IN THIS REPORT, BUT THAT'S JUST SOMETHING THAT I WONDER, YOU KNOW, IF WE'RE GOING TO REACH THAT POINT AT SOME POINT, YOU KNOW, IN THE NEXT FIVE YEARS, I HOPE I PHRASED THAT CORRECTLY.

YEAH. NO, I THINK I KNOW WHAT YOU'RE ASKING, AND CHRIS THORNBERG, WHO'S THE HEAD OF BEACON ECONOMICS, TALKS ABOUT THIS A LOT, AND I DON'T KNOW IF YOU'VE EVER HEARD HIM SPEAK, BUT YES, IT'S SOMETHING THAT HE'S VERY PASSIONATE ABOUT THE BAY AREA AND CALIFORNIA IN GENERAL HASN'T BEEN DOING ENOUGH TO MAKE SURE THAT THERE'S ENOUGH HOUSING BEING BUILT, AND THE IMPLICATIONS OF THAT, I THINK THAT.

EAST BAY REGIONAL PARK DISTRICT, MAYBE IT WOULD BE AGAIN, I KNOW I KEEP ON COMING UP WITH THESE NON-URGENT BUT IMPORTANT CONVERSATIONS FOR US TO BE HAVING, BUT I KNOW IN ONE OF THE CITIES IN WARD FIVE, IN NEWARK, THERE'S BEEN A REALLY BIG DEBATE ABOUT WHETHER OR NOT TO BUILD HOUSING ALONG THE NEWARK SHORELINE AND THE NEWARK WETLANDS, AND I DO THINK AT SOME POINT IT WOULD BE WORTH IT FOR US TO HAVE SOME SORT OF CONVERSATION ABOUT THIS, ABOUT THAT BALANCE BETWEEN PROTECTING, YOU KNOW, IMPORTANT NATURAL SPACES SUCH AS WETLAND PROPERTY VERSUS BUILDING HOUSES.

WE KNOW THAT WE DO NEED TO BUILD HOUSES.

I SUPPORT BUILDING HOUSES, BUT I ALSO DO SUPPORT PROTECTING PLACES LIKE THE NEWARK WETLANDS, AND SO, YOU KNOW, HOW DOES THAT BALANCE LOOK AND MAYBE IT'S JUST INFORMATIONAL FOR US TO HAVE THAT CONVERSATION AND WHERE THAT THAT BALANCE MIGHT COME INTO PLAY BECAUSE WE DO NEED TO BUILD MORE HOUSING IN EAST BAY, BUT WE

[02:00:09]

I KNOW THAT'S VERY SEPARATE FROM THIS FORECAST, BUT I THINK SOMETHING LIKE THIS REPORT COULD FEED INTO THAT CONVERSATION.

I HAD A QUESTION.

THERE THE CHART YOU HAD THERE WITH THE RANGE BETWEEN THE HIGH, THE BASELINE AND THE AND THE LOW SEEMS LIKE A HUGE I KNOW VARIATION AND JUST YOU KNOW, I'M NOT ASKING YOU FOR AN EXACT NUMBER, BUT DOES THAT LOOK LIKE IT NORMALLY.

IS THAT WIDE OR BECAUSE BECAUSE THAT TELLS ME THAT THERE'S SOME UNCERTAINTY IF IT'S SUCH A WIDE AREA, WHETHER IT IS IN OTHER YEARS, MAYBE IF IT'S BEEN TIGHTER, THAT WOULD HAVE BEEN A YEAR THAT THERE WAS LESS LOOK BACK.

THAT'S A GOOD QUESTION.

ALL RIGHT. IT DID.

IT DID SEEM PRETTY WIDE DIDN'T IT I AGREE.

YEAH. YEAH, AND SO WE JUST ASSUMED THAT THE MIDDLE ONE WE ALWAYS USE BASELINE.

YEAH. OKAY. GOOD. YEAH.

THAT MAKES SENSE. THEN I'M WONDERING IF THE, THE RECENT INTEREST RATE DROP, YOU KNOW, CUT IF THAT'S GOING TO AFFECT, AND I KNOW IT'S GOING TO AFFECT MORTGAGES I MEAN SO THEN IN THAT CHAIN REACTION SHOULD CAUSE THE HOUSING MARKET TO KIND OF REVIVE. RIGHT. YEAH I THINK THAT'S WHAT THE FED'S HOPING.

SO YEAH. YEAH.

SO THAT'S SOMETHING THAT'S GOING TO AFFECT US TOO.

SO OKAY.

YEAH. WELL THIS IS AGAIN THIS IS NOT SOMETHING WE HAVE TO VOTE ON OR ANYTHING.

IT'S JUST AN INFORMATIONAL, BUT ARE THERE ANY PUBLIC COMMENTS ON THIS ONE? NO PUBLIC COMMENTS.

OKAY. WELL WE'VE HAD ENOUGH COMMENTS HERE.

SO YOU KNOW.

ALL RIGHT. SO THANK YOU VERY MUCH FOR THE PROPERTY TAX FORECAST.

IT'S A GOOD ONE I BELIEVE, AND WE'RE NOW ON TO ITEM NUMBER FIVE C THE INTERNAL AUDIT MID-YEAR REPORT.

DAVID TELL US.

GOOD AFTERNOON. DAVID SUMNER, AUDIT MANAGER.

WHERE IS MINE? FIVE. FIVE C.

THANK YOU.

THANK YOU.

I'M REQUIRED TO ATTEND THE FINANCE COMMITTEE MEETING AND TWICE A YEAR PRESENT AN AUDIT PLAN, AND WHAT WE HAVE DONE SO FAR DURING THE YEAR.

SO THE REPORT THAT I HAVE IS MEDIA REPORT AND IS INFORMATIONAL ITEM ONLY.

IT COVERS THE ACTIVITIES THAT INTERNAL AUDIT HAVE BEEN ABLE TO COMPLETE FROM THE BEGINNING OF THE YEAR UP UNTIL AUGUST 31ST.

AS YOU KNOW ALREADY, OTHER REPORTS ARE AN INDEPENDENT AND OBJECTIVE ASSURANCE AND CONSULTING ACTIVITY THAT IS PERFORMED AND IS CONVERTED INTO REPORTS FOR THE BOARD AND THE SUPERIOR MANAGEMENT OR HIGH RANKING MANAGEMENT OF THE DISTRICT TO CONSIDER HOW THE LOWER LEVEL MANAGERS ARE PERFORMING AND WHETHER THEY HAVE COMPLIED WITH THE REQUIREMENTS AND ALL THAT, AND THE OBJECTIVE OF IT IS TO CREATE AN OBJECTIVE OF THE OTHER REPORTS, IS TO HELP THE DISTRICT TO STAY ON COURSE AND CREATE, PROTECT AND SUSTAIN VALUE THAT IS EXPECTED OF IT FOR THE PUBLIC.

AT LEAST THAT WE HAVE PERFORMED ARE AS FOLLOWS.

WE PERFORM THE REVIEW OF THE CULL CANYON REGIONAL RECREATION AREA CASH HANDLING.

IT WAS THE SECOND TIME THAT WE WERE PERFORMING THIS.

BASICALLY, IT'S A VERY CLEAN PLACE AND THEY PROVIDE GOOD SERVICE.

THE MAIN ATTRACTION FOR THE ENTITY IS A SWIMMING POOL THAT EXISTS THERE, AND IT'S SEASONAL, AND IT STARTS FROM MEMORIAL DAY THROUGH LABOR DAY, BUT IT'S ALSO A SPACE FOR RECREATION AND WEDDING AND SPECIAL EVENTS, INCLUDING THE DISTRICT ITSELF USES IT FOR THEIR APPRECIATION OF THE VOLUNTEERS AND ALL THAT, AND ROUGHLY ABOUT

[02:05:06]

BASICALLY, INTERNAL CONTROLS WERE FUNCTIONAL OVERALL BUT NEEDS TO BE STRENGTHENED.

THEY NEED TO STAFF AT THE PARK LEVEL SHOULD COMPLY MORE WITH FINANCIAL POLICIES AND PROCEDURES AND ENHANCE THEIR COMPLIANCE AND CASH ON HAND DAILY COLLECTIONS WERE GENERALLY ACCOUNTED FOR, BUT THEY SHOULD BE IMPROVING CASH PICKUP TIMES AND FURTHER FURTHER IMPROVE AND ENHANCE SAFEGUARDING OF THE ASSETS.

THE FINDINGS WERE AS FOLLOWS.

A CASH REFUNDS SHOULD BE FURTHER DOCUMENTED.

WE NOTED THAT $1,878 REFUNDS IN CASH WERE PAID TO THE PEOPLE THAT HAD USED THE SERVICES OF THE PARK, AND ONLY ABOUT $23 OF THIS REFUND HAD BEEN SUBSTANTIATED.

HAVING A SIGNATURE OF THE INDIVIDUAL RECIPIENTS THAT HAD CLAIMED REFUND, AND BECAUSE OF THAT, WE RECOMMENDED THAT THE PARK SUPERVISOR PROMOTE AND ENHANCE COMPLIANCE WITH THE POLICIES AND PROCEDURES AND BETTER DOCUMENT REFUNDS AND ALL THAT HAS BEEN HAPPENING AT THE PARK LEVEL.

THEY HAVE AGREED WITH THE COMMENTS AND RECOMMENDATIONS AND THEY ARE DISCUSSING AS TO HOW TO IMPLEMENT IT.

THE OTHER ISSUE AT THIS LOCATION WAS THAT AT THE SWIMMING POOLS, WE HAVE A DUAL SYSTEM OF CONTROL.

WE NOT ONLY ASK THE PEOPLE TO PAY AND GET A RECEIPT WHEN THEY COME IN, WE ALSO WANT THEM TO HAVE A COLORED WRISTBAND THAT PROVIDES CONTROL MECHANISM AND MAKE SURE THAT PEOPLE THAT ARE USING THE PLACE HAVE ALREADY PAID THE FEE FOR ENTERING, AND IF THEY LEAVE, THEY CAN COME BACK AGAIN WITHOUT PROBLEM.

SO IT'S A DUAL PROCESS AND IT CHANGES.

EVERY COLOR OF THE WRISTBANDS IS BEING USED ON A PARTICULAR DAY AS AN ADDITIONAL SECURITY.

WE DON'T WANT ANYBODY TO GO THERE WITHOUT HAVING PAID, AND THAT'S THE PURPOSE OF IT.

SO WE NOTED THAT THIS HAS NOT BEEN REALLY FOLLOWED.

THE WRISTBANDS HAVE A SERIAL NUMBERS.

THAT IS SEQUENTIAL, RIGHT, AND THEY ARE SUPPOSED TO REPORT THOSE ON THEIR DAILY COLLECTION REPORTS, AND THEY HAD REFRAINED FROM DOING SO, AND WE SUGGESTED THAT THIS HAS TO BE COMPLIED WITH, AND THEY AGREED WITH OUR COMMENT, BUT THEY SAID THAT, HEY, WE DON'T HAVE REALLY TIME.

THERE ARE TIMES THAT PEOPLE WAIT IN LINE EXCESSIVELY AND ALL THAT.

WE WOULD LIKE TO ALLOW THE PARK USERS TO COME TO THE PLACE THAT THEY WANT WITHOUT MUCH OF A DELAY, AND THIS IS THE CHOICE THAT THEY MAKE, BUT IN ANOTHER PARK THAT IS ACROSS FROM THERE AT DON CASTRO, WHICH IS, IN MY OPINION, MORE CROWDED.

THEY COMPLY WITH THIS REQUIREMENT, AND I DON'T THINK THAT IT SHOULD BE REALLY LEFT TO THE PARK SUPERVISOR TO MAKE A DECISION, DISREGARDING AN ESTABLISHED CONTROL SYSTEM THAT HAS BEEN IN PLACE FOR YEARS, I ADMIT AND ACCEPT THEIR POSITION THAT THEY REALLY HAVE MORE FOCUS ON CUSTOMER SERVICE, AND THEY WOULD HAVE TO DO WHAT THEY THINK THAT IS RIGHT, BUT STILL, IT'S NOT SUFFICIENT ENOUGH IN MY EYES TO BREACH A CONTROL THAT HAS BEEN REQUESTED BY MANAGEMENT AND ESTABLISHED PROCESS THAT HAS BEEN IN PLACE FOR YEARS.

THE OTHER THING THAT WE NOTED WAS THAT THE BANK DEPOSITS, AGAIN, WERE NOT REALLY TIMELY.

I KNOW THAT THE PARK DISTRICT AND OPERATIONS DEPARTMENT ARE WORKING TO ADJUST THE METHOD AND FREQUENCY AND THE SCHEDULING OF THE PICKUPS AND ALL THAT, AND HOPEFULLY IT WILL BE RESOLVED PRETTY SOON, SO CASHBACK LIKES SHOWED US.

CUMULATIVELY DURING THE AUDIT PERIOD, 56% OF THE SCHEDULED PICKUPS WERE NOT DONE TIMELY, AND WE UNDERSTAND THAT BECAUSE OF THE COVID ISSUES, THERE HAS BEEN NO ACTIVITY AND PRIORITY SETTING AND ALL THAT, BUT OVERALL, THIS IS AN ISSUE THAT WOULD HAVE TO BE SOLVED AT A FUTURE DATE.

AGAIN, THEY HAVE AGREED AND THEY ARE WORKING ON RESOLVING THE ISSUE, AND AS I STATED, THIS HAS BEEN A REPEAT AUDIT.

WE HAD AUDITED THE LOCATION IN 2012 AND SOME OF THEM HAVE BEEN IMPLEMENTED.

[02:10:05]

THEY HAVE A ABSTAINED FROM USING ORDINARY TICKETS THAT THEY HAVE BEEN USING.

THEY ARE ISSUING CASH RECEIPTS THAT THEY DID NOT HAVE IN THE PAST, AND SO ON.

SO THERE HAS BEEN SOME IMPROVEMENT IN THEIR OPERATIONS.

NEXT THING IS A REVIEW OF THE PARKING CITATIONS.

AS YOU KNOW, PLEASE.

CORRECT ME IF I'M WRONG, BUT I THINK ONE OF THE PROBLEMS WITH CULL CANYON IS THAT THE RESTROOMS ARE OUTSIDE THE SWIM FACILITY.

YES. SO THAT'S WHERE YOU'RE GETTING THE NEED FOR PEOPLE TO CONSTANTLY BE IN AND OUT.

YES. SO I THINK ONE OF THE WISHES THAT WE COULD, WE COULD PROBABLY.

I MEAN, WE'RE GOING TO HAVE TO WE'RE GOING TO HAVE TO DO SOME MAJOR RENOVATION AT CULL CANYON VERY SOON, BUT WE SHOULD PROBABLY INCLUDE RESTROOMS INSIDE THE SWIM FACILITY INSTEAD OF BEING OUTSIDE.

YEAH, IT COULD BE THAT WE'RE GOING TO COME BACK IN, AND THEN MY ONLY OTHER ISSUE IS WITH THESE CASH PICKUPS BEEN A PROBLEM FOREVER, SO THAT NEEDS TO BE RESOLVED ASAP, BUT ALSO JUST THE LAST REVIEW FOR THIS PARK WAS 2012. IS THAT CORRECT? YES. SO I ALWAYS BRING THESE UP WHEN THESE REVIEWS ARE SO LONG IN BETWEEN.

I THINK DEBORAH WALKER HAD PROMISED ME THAT SHE WOULD TRY TO GET CYCLED TO AT LEAST EVERY FOUR YEARS.

I DON'T KNOW IF I'M GOING TO ASK IF THAT'S A POSSIBILITY.

WHERE ARE WE ON THAT, ON THAT PROMISE, AND I THINK YOU KNOW, AND I'VE ALWAYS BEEN AN ADVOCATE FOR ADDING ADDITIONAL STAFF TO THE AUDITOR'S OFFICE, JUST SPECIFICALLY JUST TO HELP WITH THAT, THAT THESE LONG INTERVENTIONS OR INTERVENING PERIODS FOR PARKS BEING AUDITED.

IT'S JUST TOO LONG.

20 YEARS. TOO LONG.

SO THAT'S IT, BUT THANK YOU.

THANK YOU, AND YEAH, I THINK THE WRISTBAND IS THE IT'S PROBLEMATIC BECAUSE OF THE RESTROOMS BEING LOCATED OUTSIDE, AND THE PEOPLE HAVE TO GO OUTSIDE THE PARKS.

SO THAT'S A BIG ISSUE.

THANK YOU. I APPRECIATE IT.

THANK YOU. THE SECOND COMPREHENSIVE AUDIT THAT WE DID WAS ABOUT PARKING CITATIONS.

AS YOU KNOW, DISTRICT HAS A LEGAL AUTHORITY TO ISSUE PARKING, PARKING CITATIONS AND TRAFFIC VIOLATIONS IF THEY CAN BE NOTICED BY THE PUBLIC SAFETY OFFICERS IN LOCATIONS THAT ARE OWNED BY PARK DISTRICT AND ALSO THE PLACES THAT WE PROVIDE SERVICES, LIKE ON EAST BAY MUD PROPERTIES.

SO THIS WAS THE THIRD TIME IT HAS BEEN AUDITED.

ONE WAS PERFORMED BEFORE ME.

ROUGHLY ABOUT 27 YEARS AGO OR SO, AND THEN I HAVE PERFORMED IT TWICE SO FAR THAT I HAVE BEEN WORKING FOR THE DISTRICT. WE CONTRACT OUT THE PROCESSING ACTIVITIES WITH A THIRD PARTY PROCESSOR.

IN THE PAST IT WAS PERFORMED BY E-TECH, WHICH WAS A COMPANY AND A PUBLIC SAFETY.

OFFICERS WERE USING A SPECIFIC DEVICES THAT WAS EASTSIDE, WHICH WAS A PARTICULAR TYPE OF COMPUTER OR LAPTOPS THAT WERE GENERATING THE TICKETS, PARKING TICKETS OR CITATIONS.

RIGHT. SO WE HAVE CHANGED TO THE THIRD PARTY PROCESSOR, AND THE THIRD PARTY PROCESSOR USES A DIFFERENT SOFTWARE COMPANY AND THINGS HAVE IMPROVED SIGNIFICANTLY BECAUSE OF THE TECHNOLOGICAL IMPROVEMENT IN THE PAST.

OFFICERS WOULD HAVE TO GO AND USE MULTIPLE TABLES TO SAY SUCH AND SUCH VIOLATION HAS HAPPENED IN SUCH AND SUCH LOCATION, AND THIS LOCATION BELONGS TO PARK DISTRICT, OR THIS LOCATION BELONGS TO EAST BAY MUD AND ALL THAT.

UNFORTUNATELY, IN THE DURING THE YEAR BEFORE WE EVEN GO TO AUDIT THERE THERE HAS BEEN A SOFTWARE GLITCH THAT THIS RIGHT NOW THEY ARE USING, IF YOU WILL, A SMARTPHONES FOR ISSUING TICKETS.

THERE IS NO OVERSIGHT ANYMORE AND ANYTHING LIKE THAT, AND THE INFORMATION IS TRANSMITTED ELECTRONICALLY TO THE DTI, WHICH IS DATA TICKET INCORPORATED DOWN IN LOS ANGELES, I BELIEVE, AND THEY PROCESSED THE THING.

[02:15:04]

SO WHEN THE COMPUTER MALFUNCTIONS, OBVIOUSLY ALLOCATION OF THESE PROCEEDS BECOMES AFFECTED, WHICH IS AN ACCOUNTING MATTER, AND BECOMES OUR CONCERN.

RIGHT, AND THEY ASK THE SOFTWARE DEVELOPER OR THE OWNER OF THE SOFTWARE TO MODIFY THIS, AND THEY FACE REPEATED DELAY, BECAUSE DURING THIS TIME THERE HAS BEEN A NEW LAW AND THAT REQUIRES AN ADDITIONAL REPORT BEING GENERATED TO THE STATE OF CALIFORNIA.

SO THAT IS THE SOFTWARE COMPANIES EXCUSE THAT WE WOULD HAVE TO DEAL WITH THIS FIRST, AND THEN WE CAN GO AND FIX THE PROBLEM THAT YOU ARE SPECIFICALLY NOTICING FOR YOUR OWN AGENCY.

RIGHT. SO ROUGHLY ABOUT A YEAR AND A HALF OR ROUGHLY NEARLY TWO YEARS.

THE THING ITCONTINUES, THE PROBLEM CONTINUES AND STAFF, PUBLIC SAFETY STAFF THEMSELVES ARE INFORMED ABOUT THIS, BUT THEY CANNOT DO ANYTHING.

SO THE GOOD NEWS IS ROUGHLY ABOUT 3 OR 4 DAYS AFTER WE COMPLETED THE AUDIT, THEY MANAGED TO FIX THE PROBLEM AND IT WAS TESTED, AND IT'S WORKING WELL AND ADJUSTMENTS ARE BEING MADE.

SO ALLOCATION OF THE FUNDS TO PROPER ENTITIES AND ACCORDING TO THE RULES IS TAKING PLACE AT THIS POINT.

SO THIS IS WHAT HAS HAPPENED DURING THE AUDIT, AND THE OTHER ISSUE THAT WE HAD NOTICED FOR THIS WAS THAT THE DISTRICT HAS A ESCROW ACCOUNT, WHICH IS A CHECKING ACCOUNT WITH CITIBANK AND.

IN THE PAST, THIS CHECKING ACCOUNT, THIS CHECKING ACCOUNT COLLECTS ROUGHLY ABOUT OR HAS A BALANCE OF ROUGHLY ABOUT $11,000 A MONTH, AND IN PREVIOUS AUDIT THAT I HAD DONE, THIS WAS NOT BEING RECOGNIZED AS A PARK DISTRICT ASSET, AND IT WAS NOT IN OUR BOOKS AS IF WE HAVE MONEY OUTSIDE OUR ACCOUNTING SYSTEM.

SO I MADE A COMMENT WITH REGARD TO THAT, AND FORTUNATELY THIS HAS BEEN FIXED.

IT IS NOW IN OUR BOOKS, BUT WE STILL DON'T HAVE AN AUTHORIZED SIGNATORY THAT IS BEYOND THE THIRD PARTY PROCESSOR FROM OUR OWN SIDE.

IN OTHER WORDS, YOU KNOW, WE DON'T HAVE A PERSON FROM PARK DISTRICT THAT HAS AUTHORITY TO WITHDRAW OR DEPOSIT OR ANYTHING LIKE THAT CAN CANNOT REALLY TOUCH THE ACCOUNT UNLESS WE ASK FOR THE DTI TO TAKE CARE OF THAT.

SO I SUGGESTED THAT WE WOULD HAVE TO ADD ONE OF OUR ACCOUNTING PEOPLE.

EITHER THE CFO OR SOMEONE THAT SHE DECIDES AS AN AUTHORIZED SIGNATORY FOR THE ACCOUNT, AND IT'S GOING TO BE REVIEWED BY THE LEGAL DEPARTMENT BEFORE IT GETS IMPLEMENTED.

THAT WAS THE ANSWER, AND THEN I'M SORRY.

OKAY, THANKS.

SO I HAVE A LITTLE BIT OF SOFTWARE GLITCH MYSELF NOW.

SORRY ABOUT THAT.

OKAY. SO. THEN.

IF THE OTHER AUDIT THAT WE DID WAS GARIN REGIONAL PARK CASH HANDLING.

AGAIN, THIS WAS A REPEAT AUDIT.

[02:20:03]

THEY HAD NOT FULLY COMPLIED WITH THE DISTRICT POLICIES AND PROCEDURES FOR CASH HANDLING, AND.

THE KIOSK THAT THEY HAVE IN THE PARK DOES NOT HAVE ELECTRICITY.

SO THEY COULD NOT HAVE A CASH REGISTER IN THE KIOSK.

SO WHAT HAPPENS IS THEY COLLECT THE CASH AT THE KIOSK, AND THEN THEY BRING IT TO THE OFFICE, AND THEN THEY INPUT IT, SUPPOSEDLY ON THE DAY OF COLLECTION INTO THE ACTIVE NET, WHICH IS, FOR OUR ACCOUNTING PURPOSES, RECORD KEEPING SYSTEM.

SO WHAT HAS HAPPENED? THERE WAS BECAUSE THEY HAVE LIMITED ACTIVITY AND THEY ARE SHORT, SHORT STAFFED AND ALL THAT AND A SMALL PARK.

SO PARK SUPERVISOR HAD NOT HAD TIME TO INPUT THE DATA ON A REGULAR BASIS.

CASH WAS SITTING IDLE, IF YOU WILL, AND WITHOUT A COMPLETE ACCOUNTABILITY FOR A COUPLE OF DAYS IN THEIR HANDS AND WAS NOT BEING BOOKED RIGHT AWAY, AND THEN THE OTHER ISSUE THAT THEY HAD WAS THEY ARE SUPPOSED TO MAKE A DEPOSIT TWICE WEEKLY, AND THAT HAS NOT HAPPENED.

SO BASICALLY THEY WERE NOT VERY COMPLIANT WITH THEIR REQUIREMENTS HAS BEEN ESTABLISHED, AND WE SUGGESTED THAT THE PARK SUPERVISOR IMPLEMENT THE POLICIES AND PROCEDURES THAT HAVE BEEN ESTABLISHED.

THEY AGREED AND SAID THAT THEY WILL BE LOOKING INTO THIS.

FOR HANDLING, AND IN THE PAST WE HAD RECOMMENDED THAT THERE WOULD BE AN IF YOU WILL, TEMPORARY OR SUBSTITUTE CASHIER.

BECAUSE RIGHT NOW, IF THE CASHIER DOESN'T SHOW UP ON A PARTICULAR DAY THAT THEY ARE SUPPOSED TO COLLECT CASH, THEN THEY STOP CASH COLLECTION AND PEOPLE WOULD COME IN FOR FREE, AND CONSIDERING THAT THEY HAVE VERY LIMITED CASH COLLECTION ACTIVITIES ONLY HAPPENING DURING THE WEEKENDS AND ON THE HOLIDAYS, SO A PORTION OF THEIR REVENUE GENERATION IS BEING REALLY ELIMINATED BY HAVING AN ABSENT CASHIER.

SO WE HAVE SUGGESTED THAT THEY CONSIDER HAVING A ROTATION OF SUBSTITUTE CASHIER FOR THOSE OCCASIONS, BUT THAT HASN'T HAPPENED EITHER YET.

SO THEN WE HAD AUDITED FIVE MEASURE WW GRANTS AND THEY WERE IN GOOD ORDER AND THEY HAVE REQUESTED THAT THEY WOULD BE PAID AND THEY HAVE BEEN PAID.

SO THAT IS BASICALLY JUST OF THE THINGS THAT HAS BEEN HAPPENED DURING THE DAY, DURING THE YEAR.

I'M AT YOUR SERVICE. IF YOU HAVE ANY QUESTIONS.

DO WE HAVE ANY QUESTIONS? ADDITIONAL QUESTIONS.

YEAH. WHEN WAS THE LAST TIME THIS PARK GOT AUDITED? 2006? YEAH.

NO, NO, NO, THAT'S 2015.

I TELL YOU IN A SECOND THE CASH HANDLING THING.

THAT PUZZLES ME BECAUSE I MEAN, NOT NOT PUTTING IT IN ACTIVE NET, RIGHT? I MEAN, THE DAY AFTER THE DAY OF CLOSING YOUR KIOSK.

THE PARK SUPERVISOR SHOULD BE DESIGNATING SOMEBODY BECAUSE THE PARK SERVICE IS NOT THERE ON ON BOTH DAYS OF THE WEEKEND.

I WOULD THINK THE PARK SUPERVISOR WOULD DESIGNATE WHOEVER'S THE SENIOR OR WHO'S ON THE LATE SHIFT WHO CLOSES OUT THE KIOSK WOULD BE THE PERSON THAT LOGS IN. THE DATA FOR, I MEAN, THE CASH HANDLING THING.

I MEAN, THAT'S WHAT I DID.

SO I MEAN HAVING, NOT HAVING THAT LOGGED IN AND HAVING THAT MONEY UNACCOUNTED FOR, THAT'S TO ME, THAT'S A MAJOR BREACH.

YES, AND SO I, AND THAT NEEDS TO BE CORRECTED.

THAT'S CRAZY, BUT AND ALSO BUT ON THE OTHER HAND, HAVING A SUBSTITUTE CASHIER, WE'RE HAVING TROUBLE GETTING GATE ATTENDANTS ANYWAY, SO IT WOULD BE ALMOST IMPOSSIBLE TO HAVE A I THINK IT'S PROBLEMATIC TO HAVE SOMEBODY ON STANDBY FOR A CASHIER AND WHAT I OFTEN DO IS SOMETIMES I WOULD JUST PUT A STICK A PARK RANGER IN THERE IF I HAD HAD THE OPPORTUNITY, BUT Y

[02:25:07]

I MEAN, AS FAR AS IF THE CASHIER DOESN'T SHOW UP, PEOPLE GET A FREE DAY, SO THAT'S OKAY.

MY SUGGESTION, IF YOU WILL, AT THAT TIME, YOU KNOW, IT'S MANY, MANY YEARS AGO, OBVIOUSLY, MY SUGGESTION WAS THAT WE HAVE SOMEBODY IN AS A TEMPORARY CASHIER THAT IS BEING ROTATED BETWEEN THE DIFFERENT PARKS, BECAUSE AT EVERY PARK, OCCASIONALLY WE HAVE ONE ABSENT CASHIER, IF YOU WILL.

NOT THAT THERE WOULD BE A PARTICULAR.

I CERTAINLY REALIZE THAT IT'S VERY DIFFICULT AT THIS POINT, REALLY, TO HIRE CASHIERS, LET ALONE ESPECIALLY IF THEY ARE PART TIME AND LET ALONE HAVING A SON BY ONE, BUT THAT WAS REALLY THE IDEA THAT IF WE HAVE SOMEBODY TRAINED OR EVEN AT THE PARK PARK RIVER, AS YOU SAID, ONE OF THE RANGERS TO TAKE CARE OF THAT THING RATHER THAN SAYING, OKAY, NO, WE JUST SHUT IT DOWN BECAUSE IF THE ENTITY IS SMALL AND HAVE LIMITED STAFFING AND LIMITED DAYS OF OPERATIONS AND ALL THAT, THEN EVERY DAY THAT IS NOT FUNCTIONING OR NON-OPERATIONAL, YOU KNOW, IT REALLY COUNTS AND WOULD HAVE AN IMPACT.

SO BECAUSE OF THAT, THAT WAS THE SUGGESTION, IF YOU WILL.

YEAH, I'VE BEEN KNOWN TO USE PEOPLE THAT WERE PARK RANGERS OR PARK EMPLOYEES THAT WERE ON LIGHT DUTY FOR THAT AS WELL, BUT YEAH, I MEAN, THE BIGGEST CONCERN IS THAT THE PAPERWORK IS NOT BEING GENERATED TIMELY AND THAT CASH IS SITTING THERE SUSCEPTIBLE TO DISAPPEARANCE.

SO, YEAH, WELL, LET'S SEE IF WE CAN GET THAT CORRECTED, AND ALSO, AGAIN, TOO LONG IN BETWEEN REVIEW.

SO I HAVE REQUESTED AN ADDITIONAL STAFF.

HOPEFULLY, GOD WILLING, IT WOULD BE THE YEAR OR SO IF THAT GETS APPROVED OR IF ANOTHER DEPARTMENT DOESN'T SAY WE HAVE MORE URGENT NEED THAN INTERNAL AUDIT.

WE'LL WAIT AND SEE.

ALL RIGHT. OLIVIA, ANY QUESTIONS? COMMENTS? YES.

I KNOW ON THE OPERATIONS COMMITTEE WE'VE BEEN TALKING A LOT ABOUT, YOU KNOW, PARK KIOSKS AND ALSO OUR FEE STUDY AND REEVALUATING THAT ASPECT OF OPERATIONS, AND SO I GUESS I JUST WANT TO MAKE A COMMENT THAT I HOPE IS THAT AND I'M SURE THIS IS HAPPENING AS THAT PROCESS MOVES FORWARD. SOME OF THIS THE AUDIT REPORTING ALSO IS CONSIDERED AS PART OF THAT REEVALUATION OR EVALUATION, I SHOULD SAY, EVALUATION OF THE KIOSKS AND OUR FEE SCHEDULE, AND I KNOW THAT 'S AN ONGOING PROJECT ON THE OPERATIONS SIDE, BUT I THINK THIS IS REALLY HELPFUL TO HEAR THE AUDIT REPORT AND JUST HOW, YOU KNOW, THINGS MIGHT VARY AT EACH OF THESE KIOSKS, AND, YOU KNOW, ELECTRICITY CAN BE A REALLY BIG FACTOR IN REGARDS TO HAVING AUTOMATED REPORTING VERSUS HAVING TO THEN REQUIRE MANUAL REPORTING AND SO I THINK THIS IS JUST REALLY HELPFUL TO HEAR, AND EVEN GOING BACK TO THE WRISTBANDS AT CULL CANYON, I REALLY APPRECIATE THE COMMENT ABOUT THE RESTROOM BEING OUTSIDE THE ENTRANCE TO THE SWIM FACILITY.

YOU KNOW, I ALSO HEAR WRISTBANDS AND I UNDERSTAND WHY THEY WERE USED AS A SOLUTION, BUT I KNOW THAT THEY CAN ALSO CONTRIBUTE TO LITTER IN OUR NATURAL ENVIRONMENT, AND THAT'S SOMETHING ELSE, YOU KNOW, AS AN ENVIRONMENTALLY FOCUSED AGENCY FOR US TO CONSIDER YOU KNOW, OUR CONTRIBUTION POTENTIALLY OR POTENTIAL CONTRIBUTION TO THAT ISSUE.

SO I THINK THAT'S SOMETHING ELSE THAT I HOPE THAT WE CAN ALSO GET SOME FEEDBACK ON THE OPERATION SIDE, IF THERE'S A POSSIBILITY TO CHANGE THE WRISTBAND SOMEHOW.

I'M NOT SURE, AND THEN WITH THE PARKING CITATION REVIEW, I THINK IT'S REALLY HELPFUL FOR US TO TALK ABOUT THIS.

I WAS A LITTLE SURPRISED THAT ONE WAS WHAT? I WROTE IT DOWN SOMEWHERE.

NOW I CAN'T FIND MY 2006.

I MEAN, THAT'S A REALLY LONG TIME IN BETWEEN THE AUDIT REVIEW.

SO I'M REALLY GLAD THAT WE'VE DONE IT.

SO THAT WE DIDN'T LET MORE TIME PASS.

SO CONGRATULATIONS FOR FOR MAKING THAT HAPPEN.

I KNOW THIS COMES UP A LOT, THIS TOPIC AND IT MIGHT BE MORE OF CITY OF FREMONT DOING THE PARKING CITATIONS NEXT TO THE STANFORD STAGING AREA AT MISSION PEAK.

I KNOW DIRECTOR WAESPI AND I DID HAVE A LIAISON MEETING IN 2023 WITH CITY OF FREMONT TO TALK ABOUT THEIR PARKING CITATION PROGRAM THAT THEY'RE LEADING.

[02:30:06]

AGAIN, THANK YOU SO MUCH FOR DOING THIS AUDIT, THOUGH.

AGAIN, I'M GLAD THAT WE DIDN'T WAIT 20 YEARS TO DO ANOTHER AUDIT.

SO WE MISS WE AREN'T GOING TO HAVE TO SAY THAT IT TOOK US 20 YEARS TO DO IT AGAIN, AND I LOOK FORWARD TO HEARING, YOU KNOW, FROM LEGAL DIVISION, YOU KNOW, IN REGARDS TO THAT CITY BANK ACCOUNT, WHAT ULTIMATELY GETS DECIDED.

SO I THINK THIS IS A REALLY GOOD AUDIT REVIEW.

SO THANKS SO MUCH. THANK YOU.

THANK YOU. YES, THANK YOU, DAVID, FOR THIS, AND MY QUESTION IS WHO WHO PICKS UP THE CASH AT WHAT PARK. PARDON ME.

AT WHAT PARK? WHICH PARK? ANY PARK.

THERE ARE SOME PARKS THAT THE PARK SUPERVISOR PERSONALLY GOES AND MAKES DEPOSITS.

THOSE PARKS ARE IN SAFE LOCATIONS AND THE BANK IS CLOSE BY, AND THERE ARE SOME PARKS THAT ARE PREDETERMINED, AND THEY HAVE ESTABLISHED A SCHEDULE THAT PUBLIC SAFETY STAFF WOULD GO AND PICK UP.

IN THE PAST, WE HAVE HAD OCCASIONS THAT WE HAVE USED ARMORED CASH COLLECTION, CASH HANDLING COMPANIES TO DO, BUT WE HAVE ABANDONED THIS ABANDONED THAT PRACTICE IN THE PAST I HAVE HAD OCCASIONS THAT I HAVE ATTENDED TRAININGS AND ALL THAT, AND THERE HAS BEEN A SIGNIFICANT DISSATISFACTION, IF YOU WILL, NOT ONLY WITH REGARD TO COST OF THE HAVING A ARMORED SERVICE.

THERE IS ALSO THEY DO NOT COMPLY WITH THEIR PROMISED PICKUPS ON TIME.

SO IF WE OPT FOR THAT, WE MIGHT BE EXPOSING THE PARK DISTRICT TO HAVING THE SIMILAR OUR SITUATION THAT THE CACHE IS NOT PICKED UP TIMELY, BUT BEYOND THAT, WE WOULD HAVE TO ALSO PAY AN EXTRA FEE TO THIS ENTITY.

SO I'M NOT MAKING JUDGMENT AND I'M NOT MAKING ANY RECOMMENDATION WHETHER WE SHOULD GO WITH THAT OR NOT, BUT AS AN INFORMATION ITEM, I THINK THAT SHOULD BE IN FRONT OF US TO MAKE A DECISION.

I THINK CURRENT PRACTICE OF HAVING PUBLIC SAFETY PICK UP IS THE WISEST THING WE CAN GO WITH, BECAUSE GENERALLY THE OFFICERS ARE MORE FAMILIAR WITH THE PARK STRUCTURE.

THEY KNOW WHERE THE OFFICE IS, THEY KNOW HOW THEY CAN GO AND SEE WHO TO PICK UP THE MONEY.

WHAT HAPPENS AT THE PARK LEVEL IS WE DO HAVE SAFE IN THAT IS IN THE GROUND OR BOLTED TO THE GROUND, RIGHT? THAT THEY AFTER THE CASHIERS HAVE PREPARED THEIR DAILY COLLECTIONS, THEY ARE SUPPOSED TO DROP THE PACKAGE INTO THAT SAFE AND IT WOULD BE INACCESSIBLE TO THEM. IN THE CASE OF GARIN, THERE IS NO SUCH A THING, AND, YOU KNOW, AS DIRECTOR ROSARIO INDICATED, IT'S REALLY LIKE A POT OF CASH THAT IS IN THE HAND OF THE WHOEVER THAT IS THERE.

OF COURSE IT IS LIKED, BUT IT'S NOT LIKE THE SAME THING THAT THE ACCOUNTABILITY IS ESTABLISHED AT THE POINT OF COLLECTION.

SO THAT CREATES A SIGNIFICANT SAFEGUARDING ISSUE, AS DIRECTOR ROSARIO INDICATED BEFORE, BUT IN DIFFERENT PARKS THERE ARE DIFFERENT SITUATIONS, AND FOR SOME PARKS, YOU KNOW, IF IT'S A SEASONAL THEN PUBLIC SAFETY OFFICERS WOULD GO DURING THE PARTICULAR SEASON.

IN SOME OF THEM, THEY WOULD HAVE TO GO EVERY WEEK OR EVERY OTHER WEEK DURING THE SUMMER.

YOU KNOW, THERE IS MORE ACTIVITY.

THERE ARE SOME PARKS THAT HAVE MORE FREQUENT PICKUPS SCHEDULED, BUT AGAIN, IF A CRIME HAPPENS AND THE PUBLIC SAFETY OFFICER WOULD HAVE TO RESPOND TO THAT, OBVIOUSLY THAT TAKES PRECEDENCE AND IT MIGHT CAUSE A SKIPPING OF THE SCHEDULED PICKUP, BUT WE ARE HOPING THAT THE PARK SUPERVISOR WOULD CALL PUBLIC SAFETY AND INSIST THAT WE WANT A REMEDIAL PICK UP THE NEXT DAY, WITHIN 24 HOURS.

YOU KNOW, PART OF THE THINGS ALSO MIGHT BE BECAUSE WE HAVE HAD ROTATION IN THE PUBLIC SAFETY CHIEF PUBLIC SAFETY OFFICER AND HAD INADEQUATE STAFFING, IF YOU WILL, SO THEY ALL COULD CONTRIBUTE TO THIS NONCOMPLIANCE WITH THE ESTABLISHED SCHEDULE FOR PICKUP, BUT

[02:35:09]

SO DURING THE HEAVY SEASON AND WHEN THEY HAVE SIGNIFICANT CASH COLLECTION, THERE WOULD BE MORE FREQUENT RATHER THAN, YOU KNOW, TWO WEEKS INTERVALS AND ALL THAT.

SO IT DEPENDS ON THE INDIVIDUAL PARKS.

GOOD. THANK YOU. THANK YOU, AND I WOULD ECHO DIRECTOR ROSARIO'S SUGGESTION THAT YOU SHOULDN'T BE A ONE MAN SHOW.

THAT THERE SHOULD BE MORE TO IT BECAUSE OF THE, YOU KNOW, I MEAN, BECAUSE OF THE, YOU KNOW, THE BREADTH OF THE SPAN OF TIME THAT WAS REQUIRED TO GO TO ROTATE THROUGH ALL THESE THINGS, AND I THINK SAFETY AND ACCOUNTABILITY IS, IS MORE IMPORTANT THAN WHAT IT'S BEING SHOWN RIGHT NOW.

SO ANYWAY, THAT'S MY PART OF IT, BUT THANK YOU.

THANK YOU. I WANT TO ADD ONE MORE.

YEAH, SURE. IF POSSIBLE.

THANK YOU. YEAH IT IS. I JUST THINK WHAT YOU SAID, IT JUST MADE ME THINK OF SOMETHING REALLY IMPORTANT.

YOU KNOW, I HEARD YOU SAY THAT YOU REQUESTED ANOTHER STAFF PERSON TO JOIN YOUR TEAM, AND MAYBE IF THAT COMES FORWARD TO THE FULL BOARD FOR APPROVAL AT SOME POINT OR REVIEW AT SOME POINT, IT MIGHT BE HELPFUL BECAUSE I HEARD THIS COMMENT COME UP BEFORE, TOO, ABOUT, WELL, WE HAVE A BUDGET COMING UP, SO MAYBE IN THERE. OKAY. YEAH, I HEARD THAT THERE WAS THIS POINT, YOU KNOW, AND I ALSO MADE THE POINT IN REGARDS TO THE PARKING CITATION.

YOU KNOW, THE PREVIOUS REVIEW WAS 2006, AND THEN EVEN WITH SOME OF AND EVEN WITH THE CULL CANYON THAT THE PREVIOUS REVIEW HAD BEEN 2012.

SO I THINK THAT ALSO AND ALSO THIS IDEA THAT, YOU KNOW, DEE BROUGHT UP ABOUT SOME SORT OF CYCLE OF EVERY FOUR YEARS.

I THINK THAT ALL OF THESE COMMENTS AND ALL OF THESE DATES COULD BE HELPFUL TO SEE AND UNDERSCORE THE IMPORTANCE OF YOU KNOW, THE AUDIT PROGRAM AND THE ADDITIONAL HEADCOUNT, AND SO I THINK INCLUDING THAT AS A PART OF THAT REVIEW PROCESS COULD BE REALLY HELPFUL BECAUSE, YOU KNOW, THERE'S A CHANCE THAT, YOU KNOW, WHEN THAT COMES FORWARD YOU KNOW, MAYBE NOT EVERY MEMBER OF THE BOARD IS AS FAMILIAR WITH, YOU KNOW, THIS REPORT OR, YOU KNOW, WE COULD HAVE SOME NEW BOARD MEMBERS IN THE NEAR FUTURE WHEN THIS IS DISCUSSED.

SO THAT COULD BE REALLY HELPFUL JUST TO TRY TO BRING EVERYBODY UP TO SPEED ON THIS IMPORTANT TOPIC.

THANK YOU. YEAH.

I THINK THERE'S THREE MEMBERS HERE ALL FEEL THE SAME WAY ABOUT THIS, AND I THINK THAT THE DATA WOULD BE, AS YOU'RE SUGGESTING, SUGGESTING IS A CHART SHOWING, YOU KNOW, THE LAST THREE YEARS OF AUDITS AND HOW LONG THE LAST ONE BEFORE THAT WAS WOULD SPEAK VOLUMES AND, YOU KNOW, I DON'T KNOW HOW HARD THAT WOULD PUT TOGETHER.

IT'S PROBABLY NOT THAT DIFFICULT TO PUT TOGETHER, BUT, YOU KNOW, YOU JUST NEED TO, YOU KNOW, REFER TO THAT AND SAY AMEN.

THIS IS SOMETHING THAT NEEDS TO CHANGE, YOU KNOW.

SO THAT'S KIND OF I THINK THAT'S OUR OPINION ON IT.

SO. OKAY. GOOD. I GOT SOME NOTES HERE I DID WANT TO POINT OUT.

SO THERE ARE TWO FOLKS ON THE AUDIT TEAM.

CURRENTLY IT IS DAVID AS OUR AUDIT MANAGER, AND THEN WE HAVE AN ACCOUNTANT AS WELL.

YEAH.

YEAH. YEAH. OKAY.

YEAH. WELL, OKAY. I'M SORRY. I DIDN'T MEAN TO SAY ONE PERSON SHOW.

I MEANT TO SAY AN UNDERSTAFFED SHOW THAT YOU SUPERVISE.

I JUST WANTED TO CLARIFY. YES, AND THEN JUST A LITTLE BIT THAT WE ARE TAKING A LOOK AT REDUCING CASH COLLECTION AND TRYING TO GET TO MORE MODERN PRACTICES BECAUSE IT IS SUCH A I THINK THAT'S ACHIEVABLE NOWADAYS.

YEAH. IT'S THERE'S A LOT OF THERE'S A LOT OF HURDLES THAT WE NEED TO GET PAST, BUT WE'RE WORKING ON IT.

YEAH, AND I CAN SHARE JUST REAL QUICK WITH THE DEL VALLE KIOSK PILOT PROJECT.

ONE OF THE THINGS THAT WE DID AS A PART OF THAT PILOT PROJECT WAS, I BELIEVE, 25% OF THE PARKING PERMITS WERE AVAILABLE TO BE PRE-PURCHASED ONLINE AND I KNOW WE'LL HAVE A REVIEW OF THIS AT SOME POINT, BUT ANECDOTALLY, WE DID SEE OVER THE COURSE OF THE SUMMER, SO I THINK IT WENT FROM MEMORIAL DAY TO LABOR DAY.

WE DID ANECDOTALLY SEE A LITTLE BIT OF A PICKUP AS PEOPLE WERE STARTING TO DISCOVER THE ABILITY TO PRE-PURCHASE PARKING PERMITS ONLINE, AND IT WAS A PILOT PROJECT.

IT WAS AN EXPERIMENT. IT'S SOMETHING THAT WE HADN'T REALLY DONE PREVIOUSLY HERE AT THE PARK DISTRICT, BUT I THINK IN REGARDS TO THAT, THAT DOES FEED INTO THIS, YOU KNOW, CASH HANDLING PRACTICE. SO THERE'S A LOT OF DIFFERENT PARALLEL PROJECTS AND PARALLEL PROCESSES THAT ARE HAPPENING THAT MAY, YOU KNOW, IN FIVE YEARS WHEN WE HAVE THESE REPORTS, MAY IMPACT YOU KNOW, THE NEXT ROUND OF AUDITS.

[02:40:04]

JUST THINKING ON THE REGARDING THE DTI AND THE PARKING TICKETS.

IS THAT A CONTRACT THAT GETS REVIEWED OR DOES IT GO OUT TO BID? THAT IS A CONTRACT THAT GETS BOTH REVIEWED BY LEGAL, AND THEY I THINK RECENTLY DID DO A BID.

I CAN'T REMEMBER IF IT WAS A YEAR AGO OR TWO YEARS AGO, BUT THAT WAS WHY THERE WAS A TRANSITION, AND WE DO HAVE A CONTRACT WITH DATA TICKET.

OKAY, GREAT.

OKAY. WELL, THANK YOU VERY MUCH.

THANK YOU. YEAH, I APPRECIATE IT.

THANK YOU VERY MUCH.

AT THIS POINT DOES ANYONE HAVE ANY ANNOUNCEMENTS THAT THEY'D LIKE TO GET OUT THERE?

[Announcements]

DO YOU WANT TO ANNOUNCE THAT THERE'S NO PUBLIC COMMENT? ANNOUNCEMENT THAT THERE'S NO PUBLIC COMMENTS? OKAY. SURE.

GO AHEAD. YEAH.

YOU KNOW, THIS IS THE FIRST TIME I'VE BEEN BACK HERE SINCE SATURDAY, AND I THINK I JUST WANTED TO JUST REFLECT AGAIN.

I KNOW WE DID THIS PREVIOUSLY AT OUR BOARD MEETING, BUT I KNOW THAT WE DID LOSE ONE OF OUR COLLEAGUES, ELLEN CORBETT, AND HER MEMORIAL SERVICE WAS THIS PAST SATURDAY, AND I THINK IT WAS, YOU KNOW, REALLY IT WAS PUT TOGETHER VERY WELL BY HER FAMILY, AND I SAW A LOT OF, YOU KNOW, MEMBERS OF BOTH OUR YOU KNOW, EXECUTIVE TEAM AND PUBLIC SAFETY TEAM AS WELL AS, YOU KNOW, YOU KNOW, OUR CLERK'S TEAM AND PEOPLE WHO MAYBE ALSO RECENTLY RETIRED WITH THE PARK DISTRICT THERE.

AS LONG AS WELL AS I THINK ALL SIX OF US NOW ON THE ON THE BOARD WERE THERE, AND I KNOW SHE PREVIOUSLY WAS THE CHAIR OF THIS COMMITTEE LAST YEAR 2023 OF THE FINANCE COMMITTEE, AND YOU KNOW, I THINK, YOU KNOW, IT'S REALLY SAD TO LOSE ONE OF YOUR COLLEAGUES AND THEN ALSO FOR US TO HAVE TO, YOU KNOW, FIGURE OUT HOW TO WORK TOGETHER YOU KNOW, WITH THAT LOSS AND I THINK WE'VE DONE A PRETTY GOOD JOB, BUT I JUST THINK IT'S IMPORTANT TO REFLECT, SINCE I KNOW I HAVEN'T BEEN BACK HERE SINCE SATURDAY. SO I JUST WANT TO MENTION THAT.

YES. VERY GOOD.

I THINK THAT'S AN APPROPRIATE THING TO BE PUTTING OUT THERE.

THANK YOU, AND AT THIS POINT, WE ARE READY FOR ADJOURNMENT AT 1:25.

THANK YOU TO EVERYONE.

* This transcript was compiled from uncorrected Closed Captioning.