[00:00:04]
WE'RE MEETING ON WEDNESDAY, AUGUST 13TH. I APOLOGIZE WE'RE BEGINNING A LITTLE LATE 11:09 AM.
AND I WOULD ASK OUR RECORDING CLERK, DEBRA FULLER, TO TAKE THE ROLE OF THE COMMITTEE.
[Roll Call]
DIRECTOR WAESPI. HERE. DIRECTOR MERCURIO. HERE.CHAIR COFFEY. HERE. ASSISTANT GENERAL COUNSEL ELIZABETH MACKENZIE.
HERE. ASSISTANT GENERAL MANAGER OF FINANCE AND MANAGEMENT SERVICES DEBORAH SPAULDING.
HERE. TODAY'S MEETING IS BEING HELD PURSUANT TO THE BROWN ACT.
STAFF IS PROVIDING LIVE AUDIO AND VIDEO STREAMING.
MEMBERS OF THE PUBLIC WISHING TO MAKE A PUBLIC COMMENT MAY DO SO BY PROVIDING A COMMENT IN PERSON.
JOINING LIVE VIA ZOOM WITH THE LINK PROVIDED ON THE AGENDA.
LOCATED ON THE PARK DISTRICT WEBSITE. IF THERE ARE NO QUESTIONS ABOUT THE MEETING PROCEDURES, WE WILL BEGIN. OKAY. THANK YOU, DEBORAH. WE MOVE TO ITEM 2, APPROVAL OF MINUTES.
[Approval of Minutes]
WE NEED TO APPROVE THE MINUTES FOR THE BOARD FINANCE COMMITTEE MEETING ON MAY 14TH, 2025.IS THERE A MOTION TO SO APPROVE? SO MOVED. MOVED BY DIRECTOR WAESPI.
IS THERE A SECOND? SECOND. SECOND BY DIRECTOR MERCURIO.
ALL THOSE IN FAVOR OF APPROVAL THE MIN SAY AYE.
AYE. ANY OPPOSED? NO ABSTENTIONS MOTION PASSES.
WE MOVE TO ITEM 3, WHICH IS PUBLIC COMMENTS ON ITEMS THAT ARE NOT APPEARING ON OUR AGENDA THIS MORNING OR AFTERNOON. AND DO WE HAVE ANY REQUESTS? NO PUBLIC COMMENTS.
NO REQUESTS FOR PUBLIC COMMENT. NOT ON THE AGENDA.
WE MOVE TO OUR ACTION ITEMS. FIRST ITEM IS 4.A WHICH IS FORMATION OF A COMMUNITY FACILITIES
[Action Items]
DISTRICT TO FUND MAINTENANCE IN THE FUTURE BOREL AGRICULTURAL PARK.IS THIS A RESIDENT OF THE PARK THAT WE JUST? [LAUGHTER].
GOOD MORNING SORRY ABOUT THAT. WHO HAS BEEN INSTRUMENTAL IN HELPING US WITH THIS PROJECT.
AND WITH THAT, I'LL GO AHEAD AND PASS IT ON OVER TO TIM.
ALL RIGHT GOOD MORNING EVERYBODY. AGAIN, TIM SEIFERT WITH NBS.
SO PUT THIS UP A LITTLE BIT BUT THERE'S A LOT OF TOOLS OUT THERE. ASSESSMENT DISTRICTS, PARCEL TAXES AND THEN A CFD, WHICH IS BASICALLY KIND OF A COUSIN TO A PARCEL TAX, IF YOU WILL. SO A CFD CAN REALLY BE USED THEY'RE SO FLEXIBLE.
RIGHT? THEY CAN DO BOTH OF THOSE. SO ONCE YOU IMPLEMENT ONE A SPECIAL TAX IS THEN, YOU KNOW, PUT IN PLACE AND IT GOES ON ALL THE PROPERTIES THAT ARE WITHIN THE BOUNDARY BASED ON THE FORMULA.
THIS CASE, YOU KNOW, THERE'S GOING TO BE A 3% INFLATOR.
BUT IN THIS CASE, IF YOU BASICALLY DON'T HAVE ANY REGISTERED VOTERS, IF YOU HAVE VACANT LAND, IT'S APPROVED BY THE PROPERTY OWNERS. SO IN THIS CASE, TRUMARK HOMES WILL BE THE, YOU KNOW, THE APPROVER. AND IN TERMS OF CONTEXT, YOU KNOW, THE CFD AGAIN, IT'S BECAUSE OF ITS FLEXIBILITY AND SUCH.
EAST BAY REGIONAL PARK DISTRICT HAS BEEN USING THEM FOR SOME YEARS NOW.
YOU CAN SEE THE LIST THERE. GOING BACK TO 2015 WAS THE FIRST ONE THAT WE DID AFTER, YOU KNOW,
[00:05:05]
USING ASSESSMENT DISTRICTS IN YEARS PRIOR TO THAT.AND THEN PROBABLY THE MORE WELL-KNOWN ONE IS MEASURE FF WHEN THE PARCEL TAX WAS EXPIRING, THAT WAS THE REPLACEMENT, IF YOU WILL, FOR THE OLDER PARCEL TAX. WANTED TO JUST PUT TOGETHER THIS QUICK LEXICON, AND I'M HAPPY TO ANSWER ANY QUESTIONS, BUT JUST TO MAKE SURE THAT, YOU KNOW, THE IT HAS ITS OWN LANGUAGE, RIGHT? WE SPEAK A DIFFERENT LANGUAGE SOMETIMES IN THE CFD WORLD.
SO YOU'VE HEARD A LOT OF THESE TERMS THROWN AROUND MELLO-ROOS.
LIKE WHAT IS MELLO-ROOS? SOME PEOPLE THINK IT'S A DISEASE OR SOMETHING,[LAUGHTER] BUT IT'S NOT.
IT'S TWO LEGISLATORS THAT WROTE THE ACT BACK IN 1982.
SO THIS HAS BEEN AROUND FOR SOME YEARS. IT CREATED THIS, THE COMMUNITY FACILITIES ACT OF 1982, WHICH CREATES THE COMMUNITY FACILITIES DISTRICT, WHICH IS THE SPECIAL TAX.
AS I MENTIONED, IT'S A 2/3 VOTER APPROVAL. IN THIS CASE IT'S PROPERTY OWNERS.
SO IT'S BASED BASICALLY ON ACREAGE. THE BOUNDARY MAP IS THE DOCUMENT THAT WE GO TO THAT'S RECORDED THAT SHOWS US THESE ARE THE PARCELS WITHIN THIS BOUNDARY THAT WILL BE TAXED IN THE METHOD PER THE RMA.
THE LIEN, THEN ONCE IT'S APPROVED, THE BOUNDARY MAP IS RECORDED AS WELL AS THE SPECIAL TAX LIEN.
SO THAT'S THE LEGAL MECHANISM SO THAT YOU CAN LEVY THE TAX AND THEN ACTUALLY COLLECT IT.
IF FOR SOME REASON PEOPLE YOU KNOW DON'T PAY THEIR PROPERTY TAX BILL OR WHAT HAVE YOU.
I THINK AT THIS POINT I WAS GOING TO PASS THE BATON? YES OKAY SO TAKE IT AWAY [LAUGHTER]. THANK YOU DRAKE HIEBERT, SENIOR PLANNER ASD I'M JUST HERE TO KIND OF GIVE A LITTLE BIT OF A BACKGROUND ABOUT THE BOREL PROPERTY AND AS WELL AS THE HOUSING DEVELOPMENT THAT THE CFD WILL BE PLACED ON.
SO THE BOREL PROPERTY IS LOCATED IN SOUTHERN DANVILLE, RIGHT ON THE BORDER OF SAN RAMON.
IF I CAN FIND THE MOUSE. HERE WE GO. SO IN GREEN HERE.
THIS IS THE BOREL PROPERTY. THIS IS CAMINO RAMON.
THIS IS FOSTORIA WAY. IF YOU KNOW THE AREA AT ALL.
OVER HERE, THIS IS KIND OF SOME BIG BOX STORES.
THE FUTURE TRUMARK RESIDENTIAL DEVELOPMENT WILL BE IN THIS RED PORTION HERE.
AND THAT'S WHERE ALL THE FUTURE HOMES THAT THE CFD WILL BE PLACED WILL BE GOING.
SO THIS HERE IS A DIAGRAM OR A PICTURE OF WHAT WILL BE BUILT ON THAT SITE.
JUST TO ORIENT YOU HERE, DOWN HERE. THIS IS WHERE THE FUTURE BOREL PARK IS ON THE SOUTH.
YOU CAN KIND OF SEE SOME OF THESE TREES HERE AND THIS IS CAMINO RAMON.
TRUMARK WILL BE BUILDING 167 MULTI-FAMILY RESIDENTIAL UNITS.
THIS INCLUDES 124 FOR SALE TOWNHOME UNITS AND 43 FOR-RENT APARTMENT UNITS.
THE APARTMENT UNITS WILL BE IN THESE TWO BUILDINGS ADJACENT TO CAMINO RAMON.
ESTABLISHMENT OF THE CFD WAS PART OF A CONDITION OF APPROVAL OF PROJECT APPROVAL AND REQUIRED BY THE PURCHASE AND SALE AGREEMENT BETWEEN EAST BAY REGIONAL PARK DISTRICT AND TRUMARK HOMES WHEN WE SOLD THIS PROPERTY TO TRUMAN HOMES.
THE CFD WILL FUND AND THE CFD WILL FUND THE FUTURE BOREL PARK.
BUT WHAT IT WILL FUND IS BASIC LAND MANAGEMENT SERVICES AT THE PARK.
SO THAT INCLUDES LITTER REMOVAL, RESTROOM AND BUILDING MAINTENANCE, SEASONAL DISCING AND TILLING, WEEDING AND GENERAL LANDSCAPING, RANGER AND PUBLIC SAFETY PATROLS ALL ON THE SITE THERE.
THE FULL COST OF OPERATING THE PARK AND OPERATING AND MAINTAINING IS STILL TO BE DETERMINED.
BUT THIS IS FOR THE CFD. SO AND NOW I WILL PASS IT ON TO JENNIFER TO KIND OF GET INTO MORE OF THE DETAILS OF HOW WE CALCULATED THE CFD AND ALL THOSE TYPES OF DETAILS.
THANK YOU. OKAY HI AGAIN, JENNIFER BUEHLER MANAGEMENT ANALYST FOR FINANCE AND MANAGEMENT SERVICES SO BEFORE WE DIG INTO THE NUMBERS, I WANTED TO PROVIDE YOU WITH A BIT OF BACKGROUND INFORMATION ON HOW WE DERIVE THE CFD RATE.
[00:10:01]
SO TO START OFF, THE CFD RATE WAS DERIVED WITH THE BASIC LAND MANAGEMENT SERVICES COSTS IN MIND.WE WORKED VERY CLOSELY WITH THE OPERATIONS AND PUBLIC SAFETY STAFF TO DETERMINE THE LEVEL OF STAFFING SUPPORT NEEDED AND THE COSTS THAT YOU'LL SEE REFLECT FULLY BURDENED STAFF RATES. AND SO WHAT THAT MEANS IS IT'S NOT ONLY THE SALARY, REGULAR SALARY WAGES, BUT WE ALSO TOOK INTO CONSIDERATION BENEFITS AS WELL.
SO ESSENTIALLY THE WHOLE PACKAGE AND OUR MODEL ESTIMATES THE NUMBER OF STAFF HOURS WE EXPECT TO NEED IN ORDER TO FULFILL THE BASIC LAND MANAGEMENT RESPONSIBILITIES. AND JUST TO CLARIFY, THESE ARE THE BASELINE MINIMAL BASELINE COSTS.
BECAUSE THE PART PLANNING FOR THE FUTURE BOREL AGRICULTURAL PARK IS STILL UNDERWAY, WE DON'T HAVE A FULL PICTURE OF WHAT THOSE LONG-TERM OPERATING COSTS WILL LOOK LIKE JUST YET AS OF TODAY. SO MORE TO COME ON THAT.
SO THESE HAVE BEEN REVIEWED AND APPROVED BY OUR DEVELOPER, TRUMARK HOMES.
AND THAT WILL BE BROUGHT TO THE BOARD FOR REVIEW ON AUGUST 19TH.
NOW ONTO SOME NUMBERS. SO THIS SLIDE PROVIDES A SUMMARY OF THE STAFFING AND TASKS WE EXPECT TO NEED IN ORDER TO FULFILL THE BASIC LAND MANAGEMENT RESPONSIBILITIES. AND THESE ARE ROUGH ESTIMATES, BUT THE TOTAL OPERATING MONITORING AND MANAGEMENT COSTS COMES OUT TO ROUGHLY $111,000, WHICH INCLUDES A $500 ANNUAL ADMINISTRATIVE EXPENSE FROM OUR CONSULTANTS AT NBS AS WELL.
SO THE CFD RATE IS PROPOSED TO BE SET AT $658.46 PER TOWNHOME UNIT, WHICH WILL GENERATE AN ANNUAL REVENUE OF ROUGHLY $82,000 IN THE INITIAL YEAR OF ASSESSMENT.
AND THAT COVERS ABOUT 73% OF THE PROJECTED BASELINE COSTS.
SO THIS NUMBER WAS NEGOTIATED AND MUTUALLY AGREED UPON WITH TRUMARK AS A BALANCED STARTING POINT.
I SHOULD ALSO MENTION HERE, AND IT'S BEEN MENTIONED EARLIER AS WELL, THAT THE CFD REVENUE IS EXPECTED TO GROW ANNUALLY DUE TO THE 3% ANNUAL ESCALATOR SET IN PLACE. AND THEN, AS A SIDE NOTE, UNDER CURRENT REGULATIONS, THE CFD CANNOT COVER INTERPRETIVE COSTS, SO THOSE ARE EXCLUDED FROM THE CALCULATION. AND THEN IT'S ALSO WORTH NOTING HERE THAT THE PURCHASE AND SALE AGREEMENT WITH TRUMARK HOMES REQUIRED A MINIMUM CFD OF $300 PER UNIT, AND WE ANALYZED THE PROPERTY DATA AND CAME UP WITH MULTIPLE VIABLE SCENARIOS WITH THE INTENTION OF SPREADING THE COSTS IN A REASONABLE AND FAIR MANNER ACROSS THE CFD BOUNDARY.
SO THROUGH NEGOTIATION, WE WERE ABLE TO ARRIVE AT THE FINAL $658.46 PER UNIT RATE SINCE FOR ONE, IT DOES NOT INCLUDE THE APARTMENT UNITS, THEY'RE EXEMPT.
AND THEN FOR TWO, IT WAS CAREFULLY BENCHMARKED AGAINST OTHER SPECIAL TAX ASSESSMENTS IN THE AREA JUST TO MAKE SURE THAT IT'S REASONABLE AND THAT IT'S IN LINE WITH THE TRENDS IN THE AREA. OKAY. SO THIS SLIDE PROVIDES A BREAKDOWN OF THE $82,000 IN PROJECTED CFD REVENUE BY TOWNHOME TYPE.
THE 124 TOWNHOMES ARE SUBJECT TO A 3% ANNUAL INCREASE, AND THE CFD DOES NOT APPLY TO THE FOR-RENT APARTMENT UNITS FOR THE FIRST 55 YEARS, AS LONG AS THEY REMAIN CLASSIFIED AS WELFARE EXEMPT PROPERTY.
SO IF THAT CLASSIFICATION CHANGES AFTER 55 YEARS, THE APARTMENT UNITS WOULD THEN BE ASSESSED AT 15% OF THE TOWNHOME RATE IN EFFECT AT THAT TIME. SO JUST TO KIND OF GIVE YOU AN ILLUSTRATION.
SO THE TOWNHOME RATE AT 55 YEARS, WE'RE LOOKING AT 32,48.
AND THEN THE APARTMENT RATES AT 55 YEARS WOULD BE 15% OF THAT.
AND THE 3% ANNUAL ESCALATOR WOULD APPLY TO THE APARTMENTS THEREAFTER AS WELL.
OKAY, SO HERE'S A TIMELINE OF THE NEXT STEPS IN APPROVING THE BOREL CFD.
SO WE'RE HERE TODAY TO GIVE YOU A PREVIEW AND TO ANSWER ANY QUESTIONS YOU MIGHT HAVE.
REVIEW THE DRAFT OF THE RMA AND ALSO REVIEW THE BOUNDARY MAP.
AND THEN FROM THERE, A NOTICE OF A PUBLIC HEARING WILL GET PUBLISHED IN THE LOCAL NEWSPAPER AS WELL.
AND THEN ON OCTOBER 7TH, IT'LL COME BACK TO THE BOARD FOR THE FULL APPROVAL OF THE CFD FORMATION.
[00:15:03]
AND THERE WILL BE A PUBLIC HEARING. AND THE RESULTS FROM THE MAIL IN LAND OWNER ELECTION ARE TO BE DECLARED AT THAT MEETING.AND THEN LASTLY, WE'RE HOPING THE BOARD WILL ALSO APPROVE AN ORDINANCE TO LEVY THE SPECIAL TAX.
IF YOU HAVE ANY QUESTIONS OR COMMENTS? OKAY THANK YOU VERY MUCH.
AND I WILL LOOK TO MY COLLEAGUES FOR QUESTIONS AND COMMENTS.
DIRECTOR WAESPI. YEAH THANK YOU FOR THE PRESENTATION.
I LOOK FORWARD TO THIS. AND THANK YOU, TIM, FOR ALL THE GREAT WORK YOU DO FOR THE DISTRICT AND CREATING THESE OR NOT CREATING THEM, BUT FACILITATING US TAKING ADVANTAGE OF THESE COMMUNITY FINANCE DISTRICTS.
I GUESS, WELL, FIRST OFF, THE THING THAT CAME TO MY MIND WAS, WHAT ARE THE TOWNHOUSES GOING FOR? I KNOW THERE'S THREE DIFFERENT KINDS AND THREE BEDROOM, TWO BATH, THREE BEDROOM, THREE BATH. BUT WHAT DO YOU KNOW THE COST OF WHAT THESE THINGS ARE GOING TO GO FOR? WE DO NOT KNOW THE COST THAT THEY WILL BE GOING FOR.
WE DO KNOW THAT SALES, WHEN THEY WILL START SALES HAS KIND OF BEEN, WE'VE BEEN TOLD LIKE SOME DIFFERENT DATES AT DIFFERENT TIMES, BUT WE'RE HEARING IT WILL IN MAY OF 2026 IS WHEN SALES ARE SUPPOSED TO START.
SO WE SHOULD HAVE MORE INFORMATION ABOUT THAT THEN.
IF YOU GO OUT TO THE SITE, THEY'VE ALREADY THERE'S BEEN A LOT OF SITE PREP WORK HAS ALREADY HAPPENED ON THE SITE, SO THEIR CONSTRUCTION IS UNDERWAY. OKAY, THAT WAS MY NEXT QUESTION.
SO WHEN WILL WE BE ABLE TO RECEIVE THESE FEES? SO MAY OF 2026 PEOPLE WILL BE MOVING INTO THE HOMES? I BELIEVE THAT'S WHEN SALES START. EXACTLY. WHEN THAT RELATES TO WHEN THEY'RE MOVING IN.
MIGHT BE WE MIGHT NEED A LITTLE BIT OF A CLARIFICATION ON THAT.
NAOMI. LOOKS LIKE SHE HAS AN ANSWER. I'LL CONFIRM WITH DEB SPAULDING AS WELL.
BUT NAOMI LAVAL, PLANNING MANAGER ASD TO GO BACK TO YOUR FIRST QUESTION, DENNIS WE DON'T KNOW THE FINAL PRICE THAT THERE'LL BE, YOU KNOW, OFFERING THE TOWNHOMES AT. BUT THIS CFD LEVY WILL BE WITHIN THE 2% THAT'S REQUIRED.
SO THEY HAVE, YOU KNOW, CALCULATED OUT WHAT THEY ANTICIPATE THE DIFFERENT TOWNHOMES TO BE SOLD AT, AND THIS LEVY WILL FALL WITHIN THE RESTRICTIONS OF HOW MUCH REALLY CAN BE LEVIED ON THE FINAL HOUSE FINAL TOWNHOMES.
AND THEN WE WOULD NOT ANTICIPATE LIKELY LEVYING UNTIL 2027.
CORRECT. I THINK WE HAVE TO DO IT MID-YEAR. SO SINCE THE SALES ARE STARTING MID-YEAR OF 2026, WE WOULD BE ABLE TO LEVY ON WHATEVER HOMES HAVE BEEN SOLD BY 2027.
WE HAVE DONE IT THE SAME WAY WHERE, YOU KNOW, AS HOMES ARE BEING CONSTRUCTED OVER A NUMBER OF YEARS, THE LEVY GETS APPLIED TO WHATEVER IS APPLICABLE.
OKAY THANK YOU AND WHICH LEADS ME TO THE QUESTION.
WHEN WILL WE BE ABLE TO MAKE GOOD ON THEIR TAX? THEIR LEVY? WHEN DO WE PLAN ON HAVING THE PROPERTY OPEN FOR BUSINESS, SO TO SPEAK? WELL, WE ARE STILL IN THE MIDDLE OF THE INITIAL PART OF THE PLANNING PROCESS.
REALLY KIND OF GETTING US THROUGH COMMUNITY OUTREACH AND CEQA REALLY OUR INTENTION IS TO YOU KNOW, WE UNDERSTAND THAT PEOPLE WILL NOT BE ABLE TO RECREATE IMMEDIATELY [LAUGHTER] UPON MOVING IN, BUT THAT WE ARE SHOWING A GOOD FAITH EFFORT OF REALLY NOT ONLY PLANNING THE INITIAL PART, BUT AS WE WILL CONTINUE COMMUNITY ENGAGEMENT, INCLUDE THOSE TOWNHOME OWNERS AS WE FINALIZE THE PLANS.
BUT I CAN'T GIVE YOU AN EXACT DATE YET. I WOULD HOPE IT'S WITHIN, YOU KNOW, 5 TO 6 YEARS.
WE CAN REALLY OPEN THE OPEN SOMETHING THERE, BUT I THINK IT'S REALLY GOING TO DEPEND ON HOW THIS FIRST INITIAL PLANNING PROCESS, WHERE WE LAND AND HOW DEVELOPED THAT SITE WILL BE, AND THEN HOW MUCH WORK IN TERMS OF CONSTRUCTION AS WELL AS YOU KNOW, PERMITTING ALL OF THOSE OTHER THINGS THAT YOU HAVE TO DO, YOU KNOW, WE'LL KNOW THE TIMELINE ONCE WE CAN KIND OF FINISH UP THIS PROCESS. AND OUR HOPE WAS TO KIND OF GET THIS INITIAL PROCESS REALLY UNDERWAY SO THAT WHEN PEOPLE ARE MOVING IN, WE CAN GIVE THEM A MUCH BETTER TIMELINE. THANK YOU.
AND FINALLY TIM, YOU'D MENTIONED THAT WHAT DID YOU MENTION? YOU SAID THAT THIS IS INITIALLY FOR OPERATION MAINTENANCE AND PUBLIC SAFETY SERVICES, BUT THAT, IN FACT, EVEN THOUGH THE ADVANTAGE IS TO HAVE ESSENTIALLY ONE VOTER VOTE FOR 167 PEOPLE OR OWNERS THAT YOU COULD RE-UP I MEAN, AT ANY POINT DURING THE DEAL, IF THERE'S SOME UNFORESEEN COSTS OR WE WOULD TRY AGAIN, COULD WE VOTE, ASK THE 167 OWNERS TO VOTE AGAIN TO UPGRADE AT 2/3 VOTE?
[00:20:10]
SO, YEAH, IF I UNDERSTAND THE QUESTION. SO IF DOWN THE ROAD TEN YEARS FROM NOW, LET'S SAY THERE WAS A DESIRE TO PROVIDE ADDITIONAL SERVICES, THAT COMMUNITY COULD THEN VOTE, BUT YOU WOULD HAVE TO DEFINITELY GO THROUGH A, YOU KNOW, A PROCESS TO GET THAT VOTE.YOU COULDN'T JUST DO IT UNILATERALLY. THE BOARD COULDN'T.
SO THE MAX IS SET BY THE $600 LEVEL PLUS THE INFLATOR FOR THE DURATION.
RIGHT? BUT IF THE COMMUNITY WANTED TO TAX THEMSELVES MORE, THEN YES, THEY COULD.
THEY COULD DO THAT THROUGH A THAT WOULD BE A REGISTERED VOTER VOTE AT THAT POINT.
DOES THAT MAKE SENSE? YEAH, SURE. AND THEN YOUR LONG HISTORY AND CAREER IN DEALING WITH THESE, HAS ANYBODY EVER DONE THAT HAS ANY FINANCE DISTRICT, COMMUNITY FINANCE DISTRICT SAID, HEY, WE'D LIKE TO TAX OURSELVES TO HAVE YOU IMPROVE THIS AMENITY HERE? I'M NOT AWARE OF ANYTHING LIKE THAT. LIKE, YOU KNOW, THAT'S SO FOCUSED LIKE THIS ONE IS ON JUST, YOU KNOW, PROVIDING SERVICES FOR THE, YOU KNOW, THE REGIONAL.
BUT CERTAINLY, I MEAN, THERE'S VOTER APPROVED CFDS AND STUFF ALL THE TIME FOR DIFFERENT THINGS, FOR FIRE PROTECTION, FOR PARK AND REC, THAT KIND OF THING.
ALL RIGHT THANK YOU WELL, IT SEEMS LIKE, YOU KNOW, OBVIOUSLY THAT'S NOT A SMALL AMOUNT OF MONEY.
SO IT'S WHILE IT'S NOT INSIGNIFICANT, IT'S NOT OUT OF THE REALM.
THAT MAKES SENSE. YEAH THANK YOU. DIRECTOR MERCURIO.
AND THAT'S WHAT IT TAKES TO DO IT, RIGHT, I KNOW.
SO I THINK IT'S REALLY GREAT THAT WE'RE PROVIDING, AS PART OF OUR PLAN OUT THERE.
WE'RE PROVIDING NEW HOUSING IN THE SANTA MONICA VALLEY, SO WE'RE ABLE TO DO THAT.
WE'RE ALSO ABLE TO PROVIDE HOUSING IN THE SAN RAMON VALLEY, RIGHT NEXT TO A REGIONAL PARK, WHICH HAS TREMENDOUS VALUE. I KNOW IT'S PRETTY CLEAR OUT THERE FROM WHAT I'VE LEARNED, THAT THERE'S A GIGANTIC APPRECIATION FOR THE REGIONAL, OUR DISTRICT PROVIDING SERVICES OUT THERE.
AND THIS IS A LITTLE DIFFERENT NOW, THIS IS KIND OF A IN MY MIND, I KNOW I CAN'T PUT THE CART BEFORE THE HORSE HERE, BUT THERE'S GOING TO BE ELEMENTS OF THAT PARK.
IT'S NOT LIKE GARIN OR MORGAN TERRITORY OR THOSE PLACES WHERE YOU HAVE TO DRIVE THERE OR, YOU KNOW, WHATEVER. IT'S RIGHT IN TOWN. SO I KNOW MY EFFORTS WILL BE WHEN I LOOK AT THOSE PLANS AND I HAVE A CHANCE TO COMMENT ON THEM.
SO, FOR INSTANCE, I'M THINKING A WALKING TRAIL AROUND THE EDGE OF THE OF THE PROPERTY OR SOMETHING LIKE THAT, OR SOME PICNIC TABLES OR SOMETHING LIKE THAT.
SO, YOU KNOW, I FEEL PRETTY CONFIDENT THAT THAT'S GOING TO HAPPEN THAT WAY.
AND SO THAT THERE'S GOING TO BE TREMENDOUS VALUE ADDED TO THOSE UNITS THAT PEOPLE BUY.
AND SO THAT MAKES IT SHOULD BE SOMEWHAT MORE PALATABLE TO THOSE THAT ARE PAYING IT.
THE OTHER THING IS THEY KNOW THEY'RE GOING TO BE PAYING THAT, THAT FEE BEFORE THEY SIGN UP.
IT'S NOT LIKE IT'S COMING IN AFTER. SO PROVIDED THAT THE DEVELOPER, THE SALESPEOPLE TELL THEM, [LAUGHTER] WHICH I HAVE TO ASSUME THAT THEY WILL, THEY KNOW THAT THEY HAVE THIS.
AND, YOU KNOW, THEY MIGHT BE COMING FROM A TOWNHOUSE WHERE THEY HAD HOMEOWNER'S ASSOCIATION DUES, AND MAYBE THIS ONE WILL, TOO. BUT, YOU KNOW, IT'S NOT A FOREIGN CONCEPT.
SO THERE'S THAT. AND THEN THE OTHER QUESTION I HAVE, AND MAYBE NAOMI CAN ANSWER THIS ONE.
WILL THERE BE HOPEFULLY THERE'LL BE DIRECT ACCESS INTO THE PROPERTY FROM THAT, THAT PROJECT? WHAT IS THE EASIEST AND CLOSEST ACCESS INTO OUR PARK? WE GO BACK TO THE MAPS. AROUND THE BACK? THE TRUMARK. RIGHT ANOTHER CONDITION, ANOTHER OF THEIR CONDITIONS OF APPROVAL IS TO BUILD A SIDEWALK DOWN CAMINO RAMON ALL THE WAY DOWN TO FOSTORIA WAY.
SO THEY WOULD HAVE TO JUST EXIT THEIR HOUSE OR THEIR DEVELOPMENT ON THE ROAD, ON THE SIDEWALK, WALK DOWN THE SIDEWALK, AND THEN WALK INTO WHATEVER ENTRANCE IT WOULD BE.
[00:25:06]
I HAVE TO MAKE THE ASSUMPTION THAT THAT BARBED WIRE FENCE COMES DOWN AND THERE'LL BE MORE OR LESS GENERAL ACCESS TO THE TO THE THAT'S SOMETHING THAT IS STILL UNDER CONSIDERATION.IT'S A CHAIN LINK AND WHAT LEVEL OF IT IS LIKE A VERY, LIKE, URBAN PARK, AS YOU'RE SAYING.
YOU KNOW, IT'S ONLY TEN ACRES RIGHT IN THE MIDDLE OF TOWN. SO THERE MIGHT BE, YOU KNOW, SOME SECURITY ISSUES THERE THAT WE DON'T HAVE AT SOME OF OUR OTHER PARKS JUST BECAUSE IT'S SO VISIBLE IN THE MIDDLE OF TOWN.
SO, LIKE, WHAT LEVEL OF ACCESS WILL BE ALLOWED? OR IF THERE'S MAYBE LIKE OF GREATER AREA THAT COULD POTENTIALLY BE MORE OPEN WITH AN INNER AREA THAT'S LIKE LESS OPEN OR THERE'S LIKE ALL THESE THINGS ARE BEING DISCUSSED AS WE'RE TALKING ABOUT AND WHATEVER DOLLARS. AND, YOU KNOW? YEAH, DEFINITELY THAT'S SOMETHING. ALL RIGHT. I WAS JUST GOING TO MAKE A POINT, AND YOU GUYS MAKE SURE I'M SAYING THIS CORRECTLY.
WE DISCUSSED THAT IF WE WERE TO AT SOME POINT HAVE A FEE AREA, THAT WE WOULD PROVIDE ACCESS TO THE PEOPLE WHO LIVED IN THE DEVELOPMENT TO BE ABLE TO GO INTO THE PARK AT NO CHARGE. YEAH, IT'S SOMETHING WE'VE DISCUSSED.
LIKE IF YOUR DRIVER'S LICENSE HAS AN ADDRESS IN THAT AREA OR SOME OTHER WAY, WE CAN SHOW THAT THEY LIVE THERE, THAT THEY WOULD POTENTIALLY GET IN FOR FREE OR REDUCED RATE OR HAVE SOME OTHER SORT OF BENEFIT BECAUSE THEY'RE PAYING THIS FEE.
THAT'S GREAT. NO, I THINK THAT'S GREAT. AND, YOU KNOW, YOU CAN BET THAT WHOEVER WHENEVER THESE UNITS ARE BEING SOLD, WHETHER IT'S NOW OR FIVE YEARS FROM NOW, THAT AT THE TOP OF THE LISTING, IT'S GOING TO SAY IT'S RIGHT NEXT TO A PARK, A REGIONAL PARK, IF THEY'RE SMART. FUTURE [LAUGHTER].
YEAH FUTURE REGIONAL PARK. THE LAST THING IS JUST A COMMENT THAT I ALWAYS APPRECIATE THE FORETHOUGHT THAT GOES INTO PUTTING AN ESCALATOR INTO THESE THINGS, BECAUSE THOSE THAT PRECEDED US YEARS AGO DIDN'T DO THINGS LIKE THAT, AND IT'S CAUSED US A LOT OF HEARTBURN.
SO YOU'VE ELIMINATED HEARTBURN TO SOME EXTENT FOR US BECAUSE THERE'S NO IT'S JUST.
EVERYBODY KNOWS THAT. WE KNOW IT. THEY KNOW IT.
SO I APPRECIATE THAT. ALL RIGHT THANK YOU. SO I HAVE THE SAME CONCERN.
AND THAT IS I'M MISSING WHAT THIS NEIGHBORHOOD IS GETTING FOR THE $600 A YEAR.
THEY'RE GOING TO BE ABLE TO WALK IN THERE AND HAVE ACCESS TO THE PARK.
WE HAVE BUILT BAY TRAIL WITH A LONG NEIGHBORHOOD ROUTS WHERE THE NEIGHBORS THE NEIGHBORHOOD HAS A LOCKED GATE THAT GETS THEM ONTO THE BAY TRAIL, AND I CAN SEE CHARGING PEOPLE FOR THAT.
AND I'M NOT. DIRECTOR MERCURIO IS RIGHT. IT ADDS ADDED VALUE TO THE PROPERTY, WHICH WE KNOW AND HAVE DOCUMENTED OF PROXIMITY TO A REGIONAL PARK AND ITS STAGING AREA.
THERE'S [LAUGHTER] GOING TO BE A WALL BETWEEN THIS NEIGHBORHOOD AND OUR PARK.
APPARENTLY, FROM WHAT I'M GATHERING, AND THERE'S TALK AMONGST US OF A FUTURE FEEDER TRAIL TO THE IRON HORSE THAT WOULD PASS AROUND THIS NEIGHBORHOOD, THAT THEY SHOULD HAVE ACCESS TO SUCH A FUTURE FEEDER TRAIL.
SO I JUST HAVE TO MENTION I'M NOT SURE THAT WE'RE THAT SUPPORTS $600 HOUSEHOLD FOR THESE FOLKS IF.
YEAH I'LL JUST NOTE REALLY QUICKLY I HEAR YOUR COMMENT AND WE CERTAINLY ARE SENSITIVE TO THAT.
WE DID DECIDE TO HAVE THE WALL BECAUSE OF OTHER CONCERNS ABOUT CATS OR DOGS COMING IN.
THERE WAS SORT OF A, YOU KNOW, IT IS GOING TO BE AN AGRICULTURAL PARK.
ESPECIALLY WHEN IT KIND OF CAME FROM AFTER HOURS, I THINK.
AND, YOU KNOW, THEY HAVE THE SAME ACCESS THAT THE GENERAL PUBLIC WOULD HAVE.
AND THAT'S VERY TRUE OF A LOT OF OUR DIFFERENT, YOU KNOW, EVEN SOME OF THE OTHER CFDS LIKE FURIA AND PADOVA, WHICH ARE JUST ON THE OTHER SIDE OF 680 ALONG IN LAS TRAMPAS, YOU KNOW, IT'S THE SAME.
[00:30:01]
IT'S A PUBLIC ACCESS POINT. THEY ARE THE CLOSEST NEIGHBORS TO THAT PUBLIC ACCESS POINT, AND WE'VE MADE IT AMENABLE FOR THEM TO BE ABLE TO ACCESS, BUT THEY ARE NOT NECESSARILY GETTING A PRIVATE ACCESS TO THE PARK AT ALL TIMES.IT'S KIND OF THE SAME. OPENING AND OPERATING HOURS AND ACCESS THE GENERAL PUBLIC HAS.
WE CERTAINLY WE HAVE NOT DECIDED IF THERE WILL BE A FEE OR HOW THE ACCESS WILL BE MANAGED.
I HEAR DIRECTOR MERCURIO'S STATEMENT, AND WE'VE ALSO RECEIVED SIMILAR FEEDBACK FROM THE TOWN OF DANVILLE ABOUT HAVING AT LEAST SOME AREA THAT'S OPEN KIND OF AT ALL TIMES, EVEN IF WE HAVE A KIND OF AN INNER AREA THAT'S MORE CLOSED BECAUSE OF, YOU KNOW, THE INFRASTRUCTURE INSIDE THE MORE BUILT AREA AROUND THE HISTORIC, THE BUILDINGS. BUT THAT WOULD DEFINITELY WE WOULD WANT TO WORK OUT A PROGRAM WHERE THE RESIDENTS OF THE TOWNHOMES WOULD BE ABLE TO ENTER REGARDLESS.
I MEAN, ALSO THE FOR-RENT UNITS AS WELL THAT THOSE RESIDENTS BECAUSE YOU KNOW, REALLY THERE'S KIND OF A IT'S AN INTERESTING PARTNERSHIP WHERE WE SOLD THAT LAND TO THE DEVELOPER. WE WOULD BE ABLE TO REALLY KIND OF GIVE THEM THAT BENEFIT THAT THEY'RE REALLY, YOU KNOW, BENEFITING FROM THE DEVELOPMENT OF THAT AREA THAT WAS AT ONE POINT, PARKLAND.
AND NOW THEY'RE ABLE TO ACCESS THE PARK. RIGHT.
ARE YOU TALKING ABOUT A KIOSK THAT CHARGES PARKING FEES THAT WE WOULD WAIT FOR THAT NEIGHBORHOOD? CORRECT IF WE HAPPEN TO HAVE A KIOSK LIKE A ROBERTS OR SOMETHING OR, YOU KNOW, OR WHERE THERE WAS A FEE OF SOME SORT.
WE DON'T KNOW IF THERE WILL BE A FEE PROGRAM. WE'RE STILL IN THE VERY EARLY STAGES OF PLANNING, AND I FEEL LIKE. MAX, DO YOU WANT TO JUMP IN? [LAUGHTER] SORRY MAX GORDON, DEPUTY GENERAL MANAGER I JUST HAD IT'S AN INDUSTRY STANDARD THAT THESE TYPES OF CFDS CREATE PUBLIC PARKS THAT ARE A BENEFIT TO ADJACENT NEIGHBORHOODS, NOT PRIVATE ENTRY TO PUBLIC PARKS THAT ARE A BENEFIT.
SO THAT'S OUR STANDARD. THAT'S INDUSTRY STANDARD THAT THERE'S PUBLIC ACCESS TO THOSE PARKS.
AND THIS COMMUNITY BENEFITS FROM HAVING A WELL-MAINTAINED PUBLIC PARK ADJACENT TO THEM.
OKAY, I'M JUST FAMILIAR WITH SUCH NEIGHBORHOODS HAVING DIRECT ACCESS.
THEY DON'T HAVE TO LEAVE THEIR NEIGHBORHOOD, GO OUT TO A SIDEWALK, WALK DOWN A BLOCK, A COUPLE BLOCKS OR WHATEVER, AND THEN HAVE THE SAME ACCESS THAT EVERYONE ELSE HAS.
I MEAN, THEY LITERALLY TYPICALLY CFDS THAT, AT LEAST IN MY EXPERIENCE, WHERE IT FUNDS A PARK ACQUISITION, THAT PARK JUST HAS PUBLIC ACCESS AND THEY HAVE THE SAME ACCESS AS EVERYBODY ELSE.
THAT'S THAT IS THE TYPICAL NORMAL WAY THAT THAT'S APPROACHED.
THERE ARE OTHER NEIGHBORHOODS SURROUNDING THE AREA THAT PEOPLE CAN WALK TO THIS PARK? YEAH. SO I'M JUST YEAH, I THINK WE THIS IS 124 HOUSEHOLDS THAT ARE FOOTING THE BILL FOR THE SAME BENEFITS THAT EVERYONE ELSE WITHIN WALKING DISTANCE THAT PARK IS GETTING, AND I'M JUST HAVING TROUBLE GETTING THAT.
CORRECT I MEAN, I THINK THAT'S AND THAT HAPPENS LIKE EVERY TIME.
THE PEOPLE OUTSIDE, YOU KNOW, JUST A BLOCK AWAY FROM WHERE YOU DRAW THAT LINE, GET THE EXACT SAME BENEFIT IN THE END, BUT AREN'T PAYING INTO IT. AND THAT'S JUST THE REALITY OF CREATING A DISTRICT.
WHAT'S UNIQUE HERE IS WE'RE THAT TRUMARK IS CREATING A SMALL LITTLE NEIGHBORHOOD THAT'S ALREADY SURROUNDED BY [LAUGHTER] THE URBAN CORE THERE OF SAN RAMON VALLEY. WE'RE NOT. THIS ISN'T ON THE OUTSKIRTS, WHERE THERE'S OPEN SPACE AND BENEFITS TO THAT LITTLE TO THOSE NEIGHBORHOODS. SO I'M JUST REGISTERING A PROBLEM WITH THIS.
LET ME. IS THERE A SUNSET ON THIS? SOMETIMES MELLO-ROOS HAS SOME SUNSET.
SO THIS IS AN ONGOING WITH A FOREVER ESCALATOR OF 3%? THAT'S CORRECT YEAH. YEAH. YES OR. NO NO THAT'S CORRECT.
I'LL HOLD MY THOUGHT TILL YOU'RE DONE SPEAKING.
THE WHO OWNS THE APARTMENTS THAT ARE NOT BEING ASSESSED? THERE IS A NONPROFIT THAT IS IN CHARGE OF ADMINISTERING THOSE RENT UNITS, THE RENTAL UNITS.
AND THEY. ARE THEY THE DEB ARE? IT'S GOING TO BE A THIRD PARTY.
I CANNOT REMEMBER THE NAME, BUT IT'S A THIRD PARTY NONPROFIT THAT DOES AFFORDABLE HOUSING.
YEAH. EMR? AND THEN IN 55 YEARS, THERE IS AN OPTION TO EITHER EXTEND THE RENTAL PROGRAM OR TO SELL THOSE UNITS
[00:35:07]
AS INDIVIDUAL TOWNHOME UNITS. SO IF THEY ARE SOLD, THEY BECOME SUBJECT TO WHATEVER FEES IN PLACE AT THE TIME? THAT'S CORRECT. YEAH YEAH. OKAY. YEAH AND THE NONPROFIT IS GOING TO SIMPLY MANAGE? THE NONPROFIT WILL OWN THE RENTAL UNITS AND MANAGE IT AND RENT THEM OUT.BUT THEY'RE RENTED AT A LOWER COST THAN THE ACTUAL MORTGAGE OR THE, YOU KNOW, THE TOWNHOME.
SO THE THEORY IS THAT IN ORDER TO ENHANCE THE ABILITY TO PROVIDE AFFORDABLE, WHATEVER THAT IS, RENTAL UNITS WERE FORGOING A FEE. YEAH.
SO THAT WASN'T NECESSARILY A COMPROMISE THAT WE MADE.
IT'S MORE WE ARE FOLLOWING THE RULES ESTABLISHED FOR THAT THAT PARTICULAR HOUSING TYPE.
YES IT'S SOME STATE LEGISLATION THAT THE TRUMARK CITED TO US SAYING YOU ACTUALLY CAN'T ASSESS IT BECAUSE THESE ARE IT'S NOT JUST AFFORDABLE BUT IT'S A SPECIFIC TYPE OF AFFORDABLE THEM. I HAD A THOUGHT BACK ON YOUR CONCERN, AND I DEFINITELY HEAR YOUR CONCERN ABOUT CHARGING THE PEOPLE WHO WILL BE LIVING IN THIS AREA FOR A SERVICE THAT'S OPEN TO THE PUBLIC. AND MY THOUGHT IS THEY'RE BUYING THE PROPERTY KNOWING THAT THIS CFD IS ASSESSED.
AND THEY MUST VALUE IT ENOUGH TO BUY THE PROPERTY.
SO THAT'S MY HOPE, IS THAT THE MARKET WILL LIKE, YOU KNOW, MAYBE THE COST WILL BE LOWER BECAUSE PEOPLE DECIDE THEY VALUE THAT LESS, BUT THE MARKET WILL KIND OF DECIDE HOW THAT PLAYS OUT.
THE OTHER CFDS THAT WE HAVE, I THINK YOU'VE WE'VE DESCRIBED FIVE OF THEM.
AND I MAY HAVE SAT THROUGH SOME OF THEM, GIVEN THE TIMELINE, THEN THEIR ADOPTION.
ARE ANY OF THEM ASSESSING A FEE ON AS LITTLE AS 124 UNITS? YES THE PADOVA CFD ONLY HAS 20 UNITS. AND THAT AND THIS IS A SIMILAR SITUATION WHERE YOU KNOW, THERE'S 20 HOMES THAT WERE BUILT KIND OF NEXT TO THE OPEN SPACE AREA.
AND OTHER FOLKS FROM OUTSIDE OF THAT SMALLER DEVELOPMENT, YOU KNOW, HAVE TO COME A LITTLE FURTHER, BUT IT'S THE SAME PUBLIC ACCESS ENTRANCE. AND THE CFD THERE WAS USED TO CREATE THE STAGING AREA? THERE'S NO YEAH, THERE'S NO STAGING AREA AT THAT PARTICULAR DEVELOPMENT, BUT IT'S USED TO MAINTAIN THE OPEN SPACE PROPERTY. SO GRADING THE TRAIL, YOU KNOW, THE GRAZING INFRASTRUCTURE, YOU KNOW, WHATEVER IS NEEDED ON THAT 90 ACRES.
HOW MUCH FLEXIBILITY DO WE HAVE IN WHAT WE SPEND THE MONEY ON? WE HAVE A CHART. THREE PARK RANGERS AND THEIR WORK TO FARMERS IN THEIR WORK.
DO WE HAVE NOW? ONCE THIS IS PRESENTED, AND I PRESUME THE PEOPLE THAT BUY THESE UNITS WILL HAVE THAT SOMEWHERE, WHAT THEY'RE GETTING FOR THEIR $600. YEAH, THAT IS AN ESTIMATE AT THIS TIME.
OKAY SO WE CAN ALTER THE LACK OF BETTER WORDING.
THE ACTUAL FOLKS ARE DOING THE WORK. WE CAN USE MORE FARMERS THAN PARK RANGERS OR VICE VERSA.
AND MAYBE SOME DIFFERENT KIND OF EQUIPMENT IF NEEDED.
SO IT'S ALL WITHIN THE SCOPE OF THAT. AND IT HAS OF THE FEES THAT WE'RE GETTING.
AND THESE ARE ONLY OPERATIONAL EXPENSES, RIGHT? SO WE CAN'T USE THEM FOR CAPITAL IMPROVEMENTS AND SUCH THAT'S CORRECT. THAT'S RIGHT? WE CAN USE SOME FUNDING FOR THINGS LIKE SIGNAGE IMPROVEMENTS OR, YOU KNOW, KIND OF AROUND THE LAND MANAGEMENT, PARTS OF THE THAT IS FUNDED OUTSIDE OF THE CFD FUNDING OKAY. WELL, THAT DOES IT FOR MY QUESTIONS I APPRECIATE IT THANK YOU.
PLEASE ABSOLUTELY GO AGAIN. JUST HELP ME OUT [LAUGHTER].
JUST TO CUT IT CUT A FINER POINT HERE, AS I DO FROM TIME TO TIME.
[00:40:07]
BUT WHAT IF THE ACCESS POINT WAS 100FT SOUTH OF THE FENCE LINE? YOU KNOW, ALONG THE BETWEEN OUR PROPERTY AND THE NEW DEVELOPMENT? THAT WOULD BE VERY, VERY CONVENIENT AND VERY SAFE.AND, YOU KNOW, I THINK THEY WOULD BE PRETTY AMENABLE TO THAT.
SO THESE ARE THINGS THAT HAVEN'T HAPPENED YET.
WE DON'T KNOW. BUT PERSONALLY I'M GOING TO BE ADVOCATING FOR SOMETHING LIKE THAT.
WHERE THEY'RE GOING TO GO OUT TO THE SIDEWALK AND WALK 100FT AND COME INTO THE PARK.
THAT'S WHAT I'M ENVISIONING. SO WE I THINK WE NEED TO ADVOCATE FOR THAT.
WE'LL DEFINITELY TAKE THAT INTO CONSIDERATION THE PARK PLANNING AND WHERE'S LIKE THE DRIVE IN ENTRANCE WILL BE. THAT WILL HAVE TO BE LIKE, YOU KNOW, FOLLOWING DANVILLE DESIGN GUIDELINES AND THAT TYPE OF STUFF, YOU KNOW, BUT AS FAR AS, LIKE A WALK IN AND A WALK IN YOU KNOW, IT'S STILL THERE'S FAIRLY BLANK CANVAS FOR LIKE, THOSE TYPES OF THINGS.
AS LONG AS WE'RE, LIKE FITTING THE DESIGN GUIDELINES AND THINKING ABOUT ALL THOSE PEOPLE THAT LIVE NORTH OF THIS PROJECT, THEY'RE KIND OF COMING DOWN IN THAT DIRECTION.
ALL RIGHT THAT'S IT. YEAH IT'S REALLY GOING TO BE A COOL PARK.
SO I GET THAT PART OF THIS [LAUGHTER] AND ALL THAT.
AND THE OTHER PART OF THIS, I'M JUST GOING TO DEFER TO MY COLLEAGUE, WHO WILL BE EXTRAORDINARILY ACCESSIBLE TO THE OWNERS OF THOSE 124 UNITS AS WE PROCEED TO DEVELOP THAT PARK AND IT IS. IT'S GOING TO BE WONDERFUL.
ANYTHING TO ADD NO PUBLIC COMMENT. IN THE ROOM? NOR BY ZOOM? ALL RIGHT.
SO ARE WE OKAY TO MOVE TO A VOTE RECOMMENDING APPROVAL? IS THERE ANY SPECIAL LANGUAGE HERE? LET ME LOOK, MAKE SURE I GOT THAT.
NO, IT'S JUST A STRAIGHTFORWARD APPROVAL OF THE MOTION AS PRESENTED TIM.
YEAH IS THERE A MOTION TO SO APPROVE? MOVE APPROVAL.
SECOND. IT'S BEEN MOVED AND SECONDED. ALL IN FAVOR SAY AYE.
AYE. ANY OPPOSED? ANY ABSTENTIONS? PASSES UNANIMOUSLY AS A RECOMMENDATION TO THE FULL BOARD.
ALL RIGHT. THANK YOU FOR A VERY THOROUGH AND THOUGHTFUL PRESENTATION.
WE'RE GOING TO MOVE TO ITEM 4.B. INVESTMENT REPORT AND MARKET REVIEW FOR JUNE 30TH, 2025.
AND THERE WILL BE ACTION ON THIS ON THE PRESENTATION.
DEBORAH. YOU'RE GOING [LAUGHTER] THANKS FOR YOUR PATIENCE WE'RE VERY CLOSE. OKAY, HERE WE GO.
GOOD MORNING, DEB SPAULDING, ADM OF FINANCE AND MANAGEMENT SERVICES.
THIS IS YOUR SECOND QUARTER INVESTMENT REPORT AND MARKET REVIEW FOR JUNE 30TH, 2025.
AND I'M GOING TO BEGIN BY GIVING YOU A BRIEF OVERVIEW OF ALL OF THE PARK DISTRICT'S INVESTMENTS.
AND THEN I'M GOING TO TURN IT OVER TO JUSTIN WHO'S HERE FROM PFM.
PFM MANAGES THE MAJORITY BUT NOT ALL, OF THE PARK DISTRICT'S INVESTMENTS.
SO THAT'S WHY WE START BY WALKING YOU THROUGH THE BIG PICTURE FIRST BEFORE WE GET INTO THE DETAILS.
AND STARTING FROM THE TOP WHERE WE HAVE OUR MOST LIQUID FUNDS.
SO THIS IS EITHER CASH OR READILY CONVERTIBLE TO CASH.
[00:45:01]
THE BIG CHANGE BETWEEN LAST QUARTER AND THIS QUARTER IS THAT WE RECEIVED OUR PROPERTY TAXES IN APRIL.MOVING FURTHER DOWN ON THE PAGE, THIS IS OUR INVESTED SECURITIES.
AND YOU'LL HEAR A LOT MORE DETAILS ABOUT THIS FROM JUSTIN.
BUT THE JUST A COUPLE POINTS TO MENTION HERE, AN INCREASE IN HOLDINGS IN CORPORATE BONDS AND NOTES AND A SLIGHT DECREASE IN OUR US TREASURY HOLDINGS.
SO WE'VE GOT OUR PENSION TRUST AT THE TOP. YOU RECALL WE DREW DOWN ON THAT AT THE END OF LAST YEAR.
SO THERE'S ONLY A TINY AMOUNT REMAINING THERE THAT WE'LL BE USING UP IN THIS YEAR.
AND THEN THE TWO CHANGES HERE WHICH ARE REALLY LINKED IS THAT WE HAD A DECREASE IN OUR MID TERM SECURITIES, OUR MEASURE WW PROJECT FUNDS THAT SOME INVESTED SECURITIES THAT MATURED.
SO YOU'LL SEE THE WW BALANCE DECREASE IN QUARTER THREE.
BUT THAT'S THE MAIN CHANGE THAT HAPPENED IN OUR FUNDS HELD IN TRUST.
SO I'M GOING TO TURN IT OVER TO JUSTIN. AND THEN WHEN WE'RE DONE, WE'D LIKE TO GET THE BOARD'S FINANCE COMMITTEE'S RECOMMENDATION TO BRING THIS TO THE FULL BOARD OF DIRECTORS. ALL RIGHT. ALL RIGHT GOOD MORNING. LET ME SEE IF I CAN GET MY SLIDES LOADED HERE.
OH, THERE WE GO THREE DOTS OH THANK YOU. ALL RIGHT THANKS. ALL RIGHT GOOD MORNING, JUSTIN RESUELLO INSTITUTIONAL SALES AND RELATIONSHIP MANAGER WITH PFM ASSET MANAGEMENT, YOUR FINANCIAL ADVISOR.
SO HAPPY TO BE IN FRONT OF YOU AGAIN. I BELIEVE LAST QUARTER MY MANAGER, MONIQUE SPIKE, WAS IN FRONT OF YOU, SO I'M DELIGHTED TO BE BACK HERE. AS USUAL, WE BEGIN OUR DISCUSSION.
THIS IS ITEM 4.B PROBABLY AROUND PAGE 30 OR SO ON YOUR PACKET ABOUT CURRENT MARKET THEMES.
IN OUR VIEW, THE ECONOMY CONTINUES TO CHUG ALONG, BUT EMPLOYMENT HAS GENERALLY COOLED.
AT JUNE, UNEMPLOYMENT WAS AT 4.1. IT'S NOW RISEN TO 4.2 AS OF JULY.
WE'VE SEEN CERTAIN INFLATIONARY READINGS ALSO.
THAT'S CONSUMER PRICE INDEX AND PERSONAL CONSUMPTION EXPENDITURES.
THOSE HAVE RISEN STEADILY PARTICULARLY ON THE PCE MEASURE, WHICH IS THE FED'S PREFERRED MEASURE FOR INFLATION AS WE FUNNEL DOWN INTO THE FED'S DECISION MAKING. YOU CAN SEE AS OF JUNE, THE FED WAS EXPECTING ABOUT 0 TO 2 CUTS FOR THE YEAR AS OF THIS MORNING, INCLUDING ADDITIONAL INFORMATION WE RECEIVED SURROUNDING INFLATION.
WE'RE NOW SEEING PRETTY MUCH MARKET EXPECTATION.
99.9% EXPECTED RATE CUT BEGINNING IN SEPTEMBER.
SO THAT IS WHERE THE MARKET IS AT THE END OF THE AT THE END OF LAST QUARTER IT WAS AROUND 40%.
AS FOR WHAT HAPPENED WITH TREASURY YIELDS, WHICH THEN FEEDS YOUR PORTFOLIO, WE SAW THEM SPIKE QUITE A BIT IN RELATION TO THE LIBERATION DAY TARIFF ANNOUNCEMENTS IN RELATION TO THE FEDERAL BUDGET THAT WAS PASSED.
THERE WAS A LOT THAT HAPPENED IN THE QUARTER, BUT SINCE THEN SPREADS HAVE TIGHTENED, SO WE BECOME MORE DELIBERATE AND HAVE BEEN CHERRY PICKING VERY CAREFULLY THE TYPES OF SECURITIES THAT ARE BEING HELD IN THE DISTRICTS PORTFOLIO.
THIS IS, FRANKLY, A NICE ILLUSTRATION FOR THE VOLATILITY THAT WE'RE SEEING IN THE MARKET.
THIS IS PROBABLY THE FIRST OF A FEW SLIDES THAT WILL SPEAK TO THAT.
AND WE SEE NOW THE LIBERATION DAY ANNOUNCEMENTS ON ON APRIL 7TH SPIKING TARIFF RATE TO NEARLY 30%.
[00:50:05]
THE EFFECTIVE TARIFF RATE AT THAT POINT IN TIME WAS PROBABLY CLOSER TO ABOUT 20.AND AS OF LAST WEEK, IT WAS. IT'S NOW AROUND PROBABLY 15%.
THIS REALLY FEEDS A LOT OF THE UNCERTAINTY THAT WE'RE SEEING IN THE MARKETS.
IN ADDITION TO BUDGET SPENDING, TAX REFORM, FUNDING FREEZES AND THE DEBT CEILING.
THE SENATE STRUCK THAT NAME IN THE FINAL OUTCOME, AND IT'S SIMPLY JUST THE RECONCILIATION BILL.
SO YOU SEE HERE ON THE LEFT SIDE OF THE CHART, THE TEN YEAR FORECAST FROM THE CONGRESSIONAL BUDGET OFFICE AS TO INCREASES AND DECREASES TO THE DEFICIT. INCREASES SHOWN BY THE RED TEXT DECREASES SHOWN BY THE GREEN TEXT.
BUT THE NET IMPACT IS A $3.3 TRILLION INCREASE TO THE US DEFICIT OVER THE NEXT TEN YEARS.
IN RELATION TO THAT, YOU KNOW, WE COMPARE OURSELVES OR THE US SOVEREIGNTY TO OTHER COUNTRIES.
AND THE WAY WE DO THAT IS PRIMARILY THROUGH LEVERAGE METRICS.
AND ON THE RIGHT SIDE OF THE PAGE, YOU CAN SEE US DEFICIT TO GDP, WHICH AS A SORT OF BENCHMARK UP THROUGH 1980 TO 2000, IT WAS REALLY JUST AROUND 2.4% DEBT TO GDP OR DEFICIT TO GDP PARDON ME.
THAT SURGED TO ABOUT 9% DURING THE GREAT RECESSION IN 2008.
AND THEN YOU CAN SEE ON THIS PAGE, WHEN THE PANDEMIC HIT, IT REALLY GREW TO ABOUT 15%.
THE EXPECTATION BY ECONOMISTS AT THIS POINT IN TIME, IT'S A 600 PAGE BILL.
FOLKS ARE STILL KIND OF POURING THROUGH IT. IS THAT THE DEFICIT TO GDP RATIO WILL PROBABLY INCREASE TO AS HIGH AS 7% WITH RESPECT TO WHAT MOTORISTS VIEW AS WHAT ECONOMISTS VIEW AS A SORT OF MODERATE CONCERN.
THAT NUMBER SHOULD BE BETWEEN 3% AND 6%. SO IT SEEMS THAT THE US IS NOW TOEING THE LINE WITH RESPECT TO ITS SORT OF LEVERAGE AND THE WAY IT'S FINANCING, ITS LONG TERM OBLIGATIONS IN IN US DEBT. SO ADDITIONAL VOLATILITY.
THIS IS NOW KIND OF SEEN IN THE MOODY'S DOWNGRADE TO THE US SOVEREIGN CREDIT RATING TO AA1 FROM AAA.
THIS YOU KNOW, IN SOME MARKET PARTICIPANTS VIEW THIS IS KIND OF LATE RIGHT.
WE SAW FITCH AND S&P OTHER CREDIT RATING AGENCIES DOWNGRADE THE US CREDIT RATING BACK DURING THE SORT OF DEBT CEILING DISCUSSIONS IN 2011 AND 2023. MOODY'S HAS NOW FALLEN IN LINE WITH THEIR PEERS.
SO THE FED'S DUAL MANDATE FOCUSES ON INFLATION, MAINTAINING GOODS PRICE AFFORDABILITY AS LOW AS OR AS WELL AS IT CAN, AND MAXIMUM UNEMPLOYMENT. SO ON THIS PAGE, THE FED'S PREFERRED MEASURES FOR EVALUATING THOSE METRICS ARE THROUGH CORE PERSONAL CONSUMPTION EXPENDITURES ON THE LEFT SIDE OF THE PAGE, AND UNEMPLOYMENT, WHICH IS ON THE RIGHT SIDE OF THE PAGE.
I THINK THE GOOD NEWS, DESPITE ALL THE VOLATILITY I SPOKE ABOUT ON THE PRIOR THREE SLIDES, IS THAT IT'S THE FORECASTS ARE STILL RELATIVELY RANGE BOUND.
AND UNEMPLOYMENT STILL IS ACTUALLY RELATIVELY GOOD.
YOU KNOW INFLATION AT THIS POINT IN TIME IS 2.8% FOR JULY.
UNEMPLOYMENT THAT IS NOW 4.2% AS OF JULY. AND THE LONG RUN AVERAGE FOR UNEMPLOYMENT IS OVER THE PAST 25 YEARS IS ABOUT 5.5% OR SO. SO, YOU KNOW, IN THAT REGARD, I THINK THE SORT OF AMMUNITION THAT THE FED NEEDS TO KIND OF LOWER RATES, YOU KNOW, IT MAKES THEIR JOB A BIT COMPLICATED.
RIGHT. IF INFLATION IS RISING RATES SHOULD REMAIN HIGH.
[00:55:03]
ONE OF THE TRADERS ON OUR DESK ADVISED SORT OF THIS ANALOGY.THE FED IS GOING TO THE FED IS LIKE THE FED IS MANAGING TWO KIDS INFLATION AND UNEMPLOYMENT.
THE FIRST ONE THAT KIND OF GETS OUT OF CONTROL AND STARTS RUNNING AWAY. THEY'RE GOING TO TACKLE IT AND THEY'RE JUST GOING TO DROP RATES. SO IN OUR VIEW, I THINK THAT NUMBER MIGHT BE UNEMPLOYMENT AT THIS POINT.
SO WE SAW UNEMPLOYMENT RISE TO 4.1. IT NOW IS CURRENTLY 4.2.
THERE'S PROBABLY AN EXPECTATION THAT WE MIGHT SEE THAT COOL EVEN FURTHER IN AUGUST.
HERE YOU CAN SEE A SUMMARY OF ECONOMIC PROJECTIONS.
YOU CAN SEE FED FUNDS RATE HOLDING STEADY FORECAST AT 3.9% BY YEAR END.
THAT SUGGESTS THE TWO CUTS THAT WE SEE IN THE DOT PLOT THAT THE MARKET IS ALSO EXPECTING.
WE'VE SPOKEN TO INFLATION RISING DRIVEN ABSOLUTELY BY LIKELY BY TARIFFS.
UNEMPLOYMENT RISING TO 4.5% BY YEAR END AND REDUCTION TO REAL GDP.
CERTAINLY IF CONSUMERS ARE GOING TO SLOW THEIR SPENDING.
70% OF GDP HERE IN THE US IS DRIVEN BY CONSUMER SPENDING.
ONE WOULD EXPECT THAT THAT WILL FALL QUITE A BIT BY YEAR END.
THIS DOT PLOT, WHILE IT LOOKS SOMEWHAT HUMDRUM WITH THESE YOU KNOW, DOTS ALL OVER THE PAGE, I THINK THE ANNOTATION ON THE FAR LEFT IS REALLY TELLING.
YOU CAN SEE THE VOTING MEMBERS OF THE FOMC, THE FEDERAL OPEN MARKET COMMITTEE, ARE DIVIDED STILL AS TO WHETHER OR NOT RATES SHOULD BE CUT. SO AS OF JUNE 30TH, YOU CAN SEE A CLEAR SPLIT HALF OF THEM AT ZERO CUTS, THE OTHER HALF AT TWO.
BUT, YOU KNOW, THAT SAID, AS DATA ARE COMING OUT, AS WE SAW, UNEMPLOYMENT NUMBERS AND INFLATION NUMBERS COME OUT OVER THE PAST TWO WEEKS, THE MARKET IS EXPECTING RATES TO FALL. BEGINNING IN SEPTEMBER.
THE YIELD CURVE. SO THIS IS A NICE ILLUSTRATION FOR WHAT HAS REALLY HAPPENED.
DESPITE ALL OF THE NEWS, I'VE TALKED ABOUT ALL THE DATA THAT WE'RE SEEING.
SO THE YIELD CURVE TWISTED THIS QUARTER. AND WHAT THAT MEANS IS WE SAW THE LONG RATE RISE.
WHEREAS THE BELLY OF THE CURVE FROM 2 TO 10 FELL, THE LONG RATE ROSE TO ABOUT 4.77.
AND AS OF THIS MORNING IS AT 4.82. AND THAT'S RELATED TO THE SORT OF DEBT METRICS, THE LEVERAGE, THE INCREASED SORT OF LONG TERM OBLIGATIONS THAT FOLKS ARE EXPECTING FROM THE US SOVEREIGNTY WITH RESPECT TO THE BELLY OF THE CURVE.
THERE IS AN EXPECTATION THAT RATES ARE GOING TO FALL RIGHT BEGINNING IN SEPTEMBER.
AND BECAUSE OF THAT, THOSE RATES HAVE MOVED DOWN.
IN FACT, THE TWO YEAR IS NOW AT 3.685 AS OF THIS MORNING PRIOR TO OUR MEETING.
SO, YOU KNOW, AS A NICE BOGIE, ONE OF THE THINGS I ENCOURAGE CLIENTS, IF THEY'RE SO INCLINED, YOU CAN ADD A LITTLE WIDGET ON YOUR PHONE FOR THE TWO YEAR TREASURY, JUST TO KIND OF UNDERSTAND HOW THE DISTRICT'S PORTFOLIO MIGHT BE DOING.
YOU CAN SEE PRIOR TO THE ROSE GARDEN CEREMONY AROUND APRIL, SPREADS ROSE DRAMATICALLY IN ANTICIPATION OF TARIFFS AND VOLATILITY. THAT WAS AN AWESOME OPPORTUNITY FOR US TO ADD VALUE TO THE PORTFOLIO.
WHEN WE SAW WIDE SPREADS AND NICE RELATIVE VALUE OPPORTUNITIES TO PURCHASE OUTSIDE OF TREASURIES.
SO THAT'S WHAT WE DID. AND I'LL TALK TO THAT IN A MOMENT.
LASTLY, JUST WITH RESPECT TO THE MARKET AND ECONOMY, BEFORE I PAUSE FOR QUESTIONS, YOU'LL SEE HERE THAT FIXED INCOME ASSETS CONTINUE TO PERFORM QUITE WELL. 1 TO 5 YEAR INDICES SHOW TOTAL RETURNS IN THE PAST QUARTER EXCEEDING 1%, NEARLY 2% FOR THE PAST SIX MONTHS, 3%, AND FOR THE PAST YEAR I MEAN EVEN CORPORATES EXCEEDING 7%.
SO I'M REALLY PLEASED TO DELIVER POSITIVE RESULTS ALSO FOR THE DISTRICTS PORTFOLIO TODAY.
I'LL PAUSE HERE TO SEE IF THERE ARE ANY QUESTIONS ABOUT THE MARKET OR ECONOMY BEFORE I DIG INTO THE DISTRICT'S PORTFOLIO. ANY QUESTIONS? NO. PROCEED. ALL RIGHT THANKS SO MUCH. SO THERE'S ALSO WRITTEN COMMENTARY, WHICH WE'VE GONE THROUGH IN PREVIOUS MEETINGS.
[01:00:09]
INVESTMENT POLICY. EACH DAY THROUGHOUT THE QUARTER AND NOW SPEAKING TO SPECIFIC STATISTICS ON THE PORTFOLIO, YOU CAN SEE HERE THE TOTAL PROGRAM IS NOW $172.1 MILLION, MANAGED BY PFM ASSET MANAGEMENT.SO THIS IS JUST THE MANAGED FIXED INCOME PORTFOLIO.
AND THIS HAS GROWN FROM ABOUT $160.1 MILLION IN MARCH OF 2024 FOR A LITTLE OVER A YEAR AGO.
WE MAINTAIN IT VERY CLOSE TO THE BENCHMARK BECAUSE OF ALL THE VOLATILITY.
WE WANT TO KIND OF REMOVE FACTORS. WE DON'T WANT TO TAKE DURATION, RISK FACTORS.
WE DON'T WANT TO TAKE DURATION BETS, FOR EXAMPLE, ON THE DISTRICT'S PORTFOLIO AT THIS TIME.
YIELD THAT COST APPROXIMATES THE FORWARD EARNINGS RATE OF THE PORTFOLIO.
SO IMAGINE THAT ALL THE HOLDINGS ARE HELD TO MATURITY, AND THAT WE SEE ALL THE PAY DOWNS AND INTEREST PAYMENTS AND COUPONS THAT THE DISTRICT BENEFITS FROM IN THE HOLDINGS. AND THIS NOW STANDS AT 4.31.
IF WE SOLD THE ENTIRE PORTFOLIO AT THE END OF THE QUARTER, THIS IS YOUR YIELD AT MARKET VALUE.
SO AT JUNE 30TH THAT VALUE WAS 4.09%. CREDIT QUALITY REMAINS QUITE HIGH, WITH AA RATED AND HIGHER HOLDINGS ACCOUNTING FOR 64% OF THE PORTFOLIO.
AND THAT IS THE SAME LEVEL AS A YEAR AGO. DEB MENTIONED SECTOR ALLOCATIONS, AND YOU CAN SEE THAT ON THE UPPER RIGHT HAND SIDE OF THE OF THIS PAGE, THERE WERE SOME VERY SLIGHT CHANGES OF ABOUT 1% AMONG SOME SECTORS.
AND CORPORATES, THOSE HAVE INCREASED SLIGHTLY TO 28% AS OF THIS QUARTER, FROM ABOUT 26% AT THE END OF THE CALENDAR YEAR LAST YEAR. SPEAKING NOW TO ACTIVITY, THIS PORTFOLIO IS ACTIVELY MANAGED.
SO EACH DAY WE LOOK AT OPPORTUNITIES IN THE MARKET TO ADD VALUE, SWAP SECURITIES AND THE LIKE.
NEW PURCHASES TOTALED $17.5 MILLION. THAT INCLUDED ABOUT $5 MILLION IN TREASURIES, $8 MILLION IN CORPORATE NOTES AND ABOUT $4.7 MILLION IN ASSET BACKED SECURITIES. SO AS I'M LOOKING TO SPECIFIC NAMES THAT WERE ADDED THERE, THEY ALL SEEM TO BE PRETTY SIMILAR TO WHAT WE'VE HAD IN PRIOR MEETINGS, BUT I WILL NOTE THAT VERIZON IPHONE LEASES WERE ADDED. THIS IS A NEW PRODUCT THAT VERIZON HAS PUT OUT TO THE MARKET.
AND AS YOU THINK ABOUT IPHONES THAT ARE FINANCED, FOR EXAMPLE, THROUGH YOUR CELL PHONE BILL, THOSE ARE NOW PART OR THOSE SECURED SECURITIZED PAYMENTS ARE NOW PART OF YOUR HOLDINGS.
AND THOSE HAD A YIELD AT MARKET OF 4.51 DURING THE QUARTER.
SPEAKING NOW TO PORTFOLIO PERFORMANCE, YOU CAN SEE HERE IN THE PAST QUARTER, $1.6 MILLION IN INTEREST EARNED, A CHANGE IN MARKET VALUE OF $1 MILLION AND TOTAL DOLLARS RETURNED OF OVER $2.6 MILLION.
THAT GENERATED A NET OF FEE RETURN OF 1.55%, WHICH OUTPERFORMED THE BENCHMARK BY ABOUT, GEEZ, DOING MATH IN MY HEAD RIGHT NOW. YOU KNOW, OVER 15, 15 BASIS POINTS.
SO IF YOU HAVE ANY QUESTIONS NOW ABOUT PERFORMANCE OR THE PORTFOLIO, I'M HAPPY TO ENTERTAIN THOSE BEFORE I BEGIN DIVING INTO THE ESG STRATEGY FOR THE DISTRICT. ANY I'M MISSING THE REFERENCE TO THE INDEX THAT WE USE.
OH I'M SORRY. IF YOU LOOK ON THE PORTFOLIO PERFORMANCE PAGE AS WELL AS THE PORTFOLIO STATISTICS, IT'S A FOOTNOTE ON THIS PAGE THAT'S ON THE SCREEN, THIS IS FOOTNOTE 4 THE 1 TO 5 YEAR US TREASURY INDEX.
OKAY I'M LOOKING AT THE WRONG SET OKAY GOT IT. THANK YOU. NO PROBLEM. ALL RIGHT.
[01:05:04]
SO, AS PART OF THE OTHER MANDATE ON THE PORTFOLIO, ASIDE FROM LIQUIDITY AND SOME INCREMENTAL YIELD AND SECURITY OF THE PORTFOLIO, WE DO HAVE AN ESG MANDATE THAT SPEAKS TO THE MITIGATED RISKS THAT WE'RE TRYING TO ACHIEVE IN THE INVESTMENT HOLDINGS FOR THE DISTRICT. THIS QUARTER, THE ESG RISK RATED UNIVERSE ON THE PORTFOLIO THAT IMPROVED TO 62%, OR $109 MILLION OF THE PORTFOLIO, THAT'S UP FROM $99 MILLION ONE YEAR AGO, SO ABOUT $10 MILLION. THE RATING, HOWEVER, THAT HAS INCREASED SLIGHTLY.YOU KNOW, AS THE DURATION ON THE PORTFOLIO IS ABOUT TWO YEARS.
THE RISK RATING IS EXPECTED TO FLUCTUATE. SO YOU'LL SEE HERE THAT IT IS NOW 21.1 WHICH IS IN THE MEDIUM CATEGORY. WHEREAS LAST QUARTER IT WAS 19.9 IN THE LOW CATEGORY AND ONE YEAR AGO 19.6 ALSO IN THE LOW CATEGORY. SO BECAUSE OF THE DURATION OF THE PORTFOLIO AND MOVEMENTS IN THE PORTFOLIO WITH RESPECT TO THE WAY THAT WE INVEST HOLDINGS, ONE SHOULD EXPECT THAT THIS RATING WILL CHANGE OVER TIME.
SPECIFICALLY, THE TWO SORT OF SECTORS THAT LED TO THIS INCREASE IN THE MITIGATED RISK WERE AUTOMOBILES, WHICH HAD AN OVERALL INDUSTRY INCREASE TOO. ITS RISK RATING BY ABOUT ONE POINT, AND BANKS, WHICH HAD AN OVERALL INCREASE TO ITS RISK BY ABOUT TWO POINTS.
DIVERSIFICATION IS A KEY PART OF THE STRATEGY HERE WITH THE DISTRICT'S PORTFOLIO, AND THERE ARE 16 DISTINCT INDUSTRIES THAT YOU ALL ARE INVESTED IN. AND HERE YOU CAN SEE ON THE PAGE THE RISK RATINGS FOR THOSE INDUSTRIES, AS WELL AS THE PORTFOLIO WEIGHTINGS AS BANKS ARE A FREQUENT ISSUER OF FIXED INCOME ASSETS OR FIXED INCOME ISSUES IN THE MARKET, BANKS ACCOUNT FOR JUST UNDER 50% OF THE BANKS INVESTMENT OF THE DISTRICT'S INVESTMENT PORTFOLIO.
THAT RISK RATING INCREASED TO 20.3 FOR BANKS, AND THAT'S UP FROM ABOUT 17.9 AT THE END OF THE CALENDAR YEAR. THE HIGHEST RISK RATING INDUSTRY FOR THE PORTFOLIO IS AEROSPACE AND DEFENSE, AND THAT IS 26.7 THIS QUARTER. AND THAT'S LIMITED TO ONE SINGLE HOLDING LOCKHEED MARTIN, WHICH IS ALSO RATED 26.7. WITH RESPECT TO SECTOR ANALYSIS, THERE IS A WIDE RANGE OF RATINGS AMONG CORPORATE NOTES, BUT MANY OF THE CDS AGENCY SECURITIES AND MORTGAGE BACKED SECURITIES SHOW GENERALLY LOWER RISKS.
ABA THAT'S ASSET BACKED SECURITIES. YOU'LL SEE THAT THOSE ARE SLIGHTLY THAT THOSE ARE RATED SLIGHTLY HIGHER BECAUSE OF BECAUSE THEY REFLECT AUTOMOBILES WHICH DO INHERENTLY JUST HAVE A HIGHER ESG RISK.
FINALLY, THIS IS MY LAST SLIDE ON THE ESG MONITORING FOR THE PORTFOLIO.
LOW ESG RISK RATING HOLDINGS ACCOUNT FOR $35 MILLION OF THE PORTFOLIO AND AROUND $20 MILLION OF THE HIGHER RATED AA AND AAA INVESTMENTS. THE LOWER GRAPH, WHICH SPEAKS TO RISK RATING BY BOND RATING THAT SHOWS THAT THE LOWEST RISK RATING ON THE PORTFOLIO WERE HELD WITHIN THE AA BOND RATING CATEGORY. SO YOU KNOW, WITH THAT SAID, YOU KNOW, WE'LL CONTINUE TO MONITOR THE MITIGATED ESG RISK ON THE PORTFOLIO AND CONTINUE TO MANAGE THE INVESTMENTS IN LINE WITH YOUR ESG POLICY.
I'LL PAUSE HERE TO SEE IF THERE ARE ANY QUESTIONS ABOUT THE ESG MONITORING.
DIRECTORS WITH THAT I THINK THAT CONCLUDES ALL OF MY REMARKS, AND I WILL TURN IT BACK OVER TO THEM. ALL RIGHT I'M HAPPY TO TAKE ANY QUESTIONS YOU MIGHT HAVE, OR YOUR RECOMMENDATION TO THE BOARD.
ALL RIGHT. DIRECTOR? I DON'T KNOW. YEAH JUST TO CONTINUE THE CONVERSATION A LITTLE
[01:10:09]
BIT. SO YOU COME IN EVERY THREE MONTHS, YOU TELL US, YOU KNOW, WHAT THE WHAT THE FACTORS ARE THAT ARE LEADING TO ECONOMIC THINGS GOING ON.THREE MONTHS AGO. DID YOU PREDICT THIS? RIGHT HERE? OH, BOY. I MEAN, IF I HAD A CRYSTAL BALL.
IT SEEMS LIKE, YOU KNOW, IT SEEMS LIKE WE SIT UP HERE AND LISTEN TO YOU, AND YOU PROTECT OUR MONEY, AND YOU GET A NICE. NOT GREAT. BUT FOR A PUBLIC AGENCY THAT HAS OTHER PEOPLE'S MONEY THAT WE HAVE TO TAKE CARE OF MUCH MORE STRICTLY THAN NORMALLY GOING TO LAS VEGAS AND ROLLING ROULETTE WHEEL DICE OR WHATEVER YOU THROW THERE.
IT SEEMS LIKE THIS IS GRADUALLY DOING WELL. AND BUT DOES IT GO ALONG WITH YOUR PREDICTIONS? MOST OF THE TIME? MOST OF THE TIME, IT'S AN EASY QUESTION THAT'S.
RIGHT? THE PRIORITIES ARE SAFETY, LIQUIDITY, RETURN ON INVESTMENT.
UNLIKE OTHER SORT OF JURISDICTIONS LIKE, SAY, FLORIDA, WHERE YOU CAN INVEST IN NEARLY ANYTHING.
YOU KNOW, THE WAY THAT WE MANAGE THE PORTFOLIO IS IN LINE WITH STATE CODE.
AND BECAUSE OF THAT, IT'S FAIRLY PREDICTABLE.
THAT SAID, THERE IS STILL A LOT OF VOLATILITY WE HAVE TO MITIGATE AGAINST.
BUT WE HAVE TO BE MUCH MORE DELIBERATE IN, YOU KNOW, REVEALING VALUE FOR THE PORTFOLIO AND NOT JUST, YOU KNOW, BLINDLY PURCHASING SECURITIES, WHICH IS SOMETHING WE WOULD NEVER DO.
SO THAT SAID, YOU KNOW, WE'RE TRYING TO MOVE THE PORTFOLIO IN A CONSERVATIVE FASHION TO PROTECT THE ASSETS FOR THE DISTRICT AND GENERATE SOME INCREMENTAL YIELD. DOES IT SORT OF MATCH WHAT OUR CRYSTAL BALL SAID? I THINK SO. YOU KNOW, I THINK THE BANK HAS PREDICTED US BANK BY WHOM WE'RE OWNED.
US BANK ECONOMISTS HAVE ANTICIPATED TWO RATE CUTS BY THE END OF THE YEAR, WHICH IS IN LINE WITH WHAT THE FED HAS PUT OUT IN ITS DOT PLOT FOR MARCH AND JUNE. SO, YOU KNOW THAT I THINK DIRECTLY RELATED TO THE PORTFOLIO, THAT CRYSTAL BALL SEEMS TO BE WORKING OKAY.
ALL RIGHT THANK YOU I APPRECIATE YOUR EFFORTS.
ABSOLUTELY. I HAVE I APPRECIATE THE, YOU KNOW, HOW IMPORTANT IT IS TO BALANCE RETURN AND SAFETY, YOU KNOW, NOT LOSING ON YOUR INVESTMENT.
SO I APPRECIATE THAT. BUT THE THING I PICKED UP ON THAT YOU SAID A FEW MINUTES AGO WAS THAT SOMEBODY IS LOOKING AT THIS EVERY DAY, AND THAT'S I MEAN, I DON'T DO THAT, OF COURSE, [LAUGHTER] BUT, YOU KNOW, FOR MY STUFF.
YOU CAN HAVE THE WIDGETS ON YOUR PHONE. NO, NO, I'M TALKING ABOUT FROM MY OWN THING, MY OWN STUFF.
BUT THAT'S BESIDE THE POINT. AND I APPRECIATE THAT.
AND THAT EVERY EFFORT IS BEING MADE TO MAXIMIZE WHAT WE CAN GET IN A SAFE MANNER.
SO YEAH THANK YOU. YEAH, ABSOLUTELY. AND, YOU KNOW, IT'S NOT JUST US, FRANKLY.
IT'S REALLY DEB. I MEAN, SHE REALLY WORKS IN CONCERT WITH US TO MANAGE THE DISTRICT'S ENTIRE PORTFOLIO, INCLUDING LIQUIDITY, REALLY WELL. MY POINT IS INTENDED TO AN UMBRELLA OVER EVERYBODY.
I APPRECIATE EVERYBODY. THANK YOU, DOCTOR MERCURIO.
YOU JUST REMINDED ME TO LOOK AT MY WIDGETS [LAUGHTER].
DOW'S UP A LOT TODAY FOR SOMETHING ANYTHING ELSE TO ADD? ALL RIGHT. YEAH I JUST ECHO WHAT DIRECTOR MERCURIO SAID, THAT WE'RE VERY HAPPY TO HAVE SOMEBODY PAYING ATTENTION TO THE DISTRICT'S PORTFOLIO IN SUCH A DETAILED WAY. AND DISTRICT STAFF COULD NOT PERFORM THAT THE WAY WE'RE CURRENTLY STAFFED ANY PUBLIC COMMENT IN THE ZOOM OR IN THE ROOM? NO REMOTE OR IN-PERSON PUBLIC COMMENTS. GIVEN NO PUBLIC COMMENT ON THE AGENDA ITEM.
THIS AGAIN IS ITEM 4.B INVESTMENT REPORT AND MARKET REVIEW FOR JUNE 30TH, 2025.
IS THERE DIRECTOR WAESPI. SECOND. SECOND BY DIRECTOR MERCURIO.
[01:15:04]
ALL THOSE IN FAVOR SAY AYE. AYE. ANY OPPOSED? ANY ABSTAIN? IT PASSES UNANIMOUSLY ON TO THE FULL BOARD, WHICH MOVES US TO ITEM 4.C SECOND QUARTER 2025 GENERAL FUND AND OTHER GOVERNMENTAL FUNDS FINANCIAL REPORTS.THANK YOU JUSTIN. APPRECIATE IT. GOOD AFTERNOON EVERYONE YES. GOOD AFTERNOON, KAREN SICA ASSISTANCE FINANCE OFFICER OF FINANCE AND MANAGEMENT SERVICES.
SO TO START OFF, HIGH LEVEL SUMMARY OF THE GENERAL FUND REVENUES AND EXPENDITURES.
AS YOU CAN SEE HERE, WE DO HAVE THE BUDGETED AMOUNTS AS COMPARED TO THE ACTUALS.
AND AS OF JUNE 30TH, FOR OUR REVENUES, WE'VE POSTED $109.6 MILLION, WHICH IS 48.5% OF THE BUDGET.
SO NOT NOTHING SURPRISING HERE. AND WE DID RECEIVE OUR FIRST TRANCHE OF THE BULK OF OUR TAX RECEIPTS IN MIDDLE OF APRIL THIS YEAR. AND FOR THE FUTURE TWO QUARTERS, THE THIRD QUARTER, THE FOURTH QUARTER WE DO COMPARED THE BUDGETED AGAINST OUR PROJECTED. AND AS YOU CAN SEE, THERE'S A SLIGHT DIFFERENCE IN THERE BECAUSE IT'S DUE TO THE REDEVELOPMENT AGENCY RECEIPTS OR REVENUES. THAT IS VERY DIFFICULT TO PREDICT.
SO THAT'S JUST BASICALLY WHY WE HAVE LIKE A DIFFERENCE BETWEEN OUR BUDGETED AND PROJECTED.
AND THEN LOOKING INTO MORE DETAILS OF OUR REVENUES AND EXPENDITURES.
SO ON THE TOP PART YOU WOULD SEE THE PROPERTY TAXES, WHICH WE BUDGETED AT $207.6 MILLION.
AS COMPARED TO LAST YEAR, WHICH IS BASICALLY ON PAR, WHICH IS AT 46.9%.
AND THEN WE DO HAVE THE CHARGE FOR SERVICES, WHICH IS APPROXIMATELY AT 43.5% AS COMPARED TO LAST YEAR, AT 42.2%. SO MOVING TO OUR PROPERTY USAGE, AS YOU CAN SEE HERE, WE'VE ALREADY POSTED ABOUT 82.9% OF THE BUDGETED AMOUNT, WHICH IS SOMEWHAT PRETTY HIGH, AND IT'S DUE TO THE RATE INCREASE OF OUR GRAZING LEASES. SO THAT'S REALLY WHAT CONTRIBUTED TO THE HIGH AMOUNTS HERE.
AND THEN UNDER THE INVESTMENT EARNINGS AND OTHERS.
AS YOU ALL KNOW, WE DON'T BUDGET INVESTMENT EARNINGS DUE TO THE VOLATILITY OF THE MARKET AT.
AS OUR PRESENTER JUST MENTIONED EARLIER. SO OUT OF THAT $8.7 MILLION, WE'VE ACTUALLY POSTED $6.8 MILLION IN INVESTMENT EARNINGS, WHICH IS PRETTY GOOD AT THIS POINT. BUT WE STILL HAVE TWO QUARTERS, SO IT'S STILL TOO EARLY TO TELL HOW IT'S GOING TO ALL PLAY OUT.
SO THAT'S WHY IT'S IT LOOKS KIND OF LIKE SKEWED WHICH IS AT ONE 71.2% OF THE BUDGETED AMOUNT BECAUSE TECHNICALLY WE DON'T BUDGET THAT. SO 8.7, -6.8, WE'RE LIKE AROUND $2 MILLION OUT OF THE $5 MILLION BUDGETED.
AND THEN, AS ALWAYS, OUR TRANSFERS IN. IS 100% BECAUSE NORMALLY WE WOULD COMPLETE OUR TRANSFERS AS SOON AS WE ADOPT OUR BUDGET AND THEN MOVING ALONG TO OUR EXPENDITURE LINE ITEMS, WE DO HAVE OUR BIGGEST ONE, WHICH IS THE SALARY AND BENEFITS, WHICH IS CURRENTLY AT $63.9 MILLION, WHICH IS ROUGHLY 43.2% OF OUR CURRENT BUDGET.
AND AS COMPARED TO LAST YEAR'S, WHICH IS AT 45.7%.
AND THEN WE DO HAVE SUPPLY SERVICES AND CAPITAL OUTLAY TO BE LOOKING LOWER.
[01:20:07]
YOU KNOW, GIVEN THAT WE'RE ALREADY IN MID-YEAR, BUT THEN IT'S BASICALLY JUST DUE TO THE TIMING OF WHEN WE WOULD PAY OFF OUR INVOICES.SO IF WE ARE TO FACTOR IN THE OUTSTANDING PURCHASE ORDERS OR ENCUMBRANCES, WE WOULD ALL BE IN TARGET FOR ALL THIS EXPENDITURE CATEGORIES AND THEN FOR OUR OTHER EXPENSE LINE ITEM. AS YOU CAN SEE HERE, CURRENTLY WE HAVE IT POSTED AT 3.7%, WHICH IS PRETTY LOW. HOWEVER, I DO WANT TO SAY THAT THIS CATEGORY INCLUDES ANNUAL PAYMENTS TO OTHER AGENCIES WHICH WE HAVE YET TO COMPLETE THIS YEAR, SO THIS NUMBER WOULD DEFINITELY GO UP IN THE NEXT QUARTER.
AS YOU CAN SEE, IT'S PERFECTLY AT 50% BECAUSE WE DO TRANSFER EQUAL AMOUNTS EVERY QUARTER.
SO WE DON'T ANTICIPATE ANY CHANGE ON THAT. AND THEN LASTLY WE DO HAVE OUR TRANSFERS OUT WHICH IS SIMILAR TO TRANSFERS IN AT 100% AS WE DO OUR TRANSFERS AS SOON AS THE BUDGET'S ADOPTED.
SO OVER ALL OUR TOTAL EXPENDITURES IS AT 47.4%, AS COMPARED TO 52.6% FROM LAST YEAR.
AND THEN HERE ON THIS SLIDE, BASICALLY WE JUST BROKE DOWN THE EXPENDITURES BY DIVISION.
SO SIMILARLY FROM THAT SLIDE OUR EXPENDITURES FROM PRIOR YEAR ARE SOMEWHAT SIMILAR.
SO I DON'T WANT TO GO INTO DETAILS ANYMORE ON THIS.
BUT IF YOU LOOK INTO PAGE 111 OF YOUR PACKET, WE DO ADDED SOME NOTES FOOTNOTES ON THERE FOR ANY VARIANCES THAT ARE LOWER OR OVER 10% OF THE EXPECTED AMOUNTS.
SO EVERYTHING SEEMS TO BE ALIGNED AS WHAT WE EXPECTED TO BE AT THIS POINT IN TIME.
AND THEN OVER HERE YOU WOULD SEE OUR REVENUES IN THE PAST FIVE YEARS.
IF YOU LOOK AT IT, IT'S BEEN GROWING STEADILY.
THE BROKEN LINES REPRESENT OUR PROJECTED REVENUES, AND SINCE WE DON'T BUDGET FOR OUR INVESTMENT EARNINGS, THIS LINE GRAPH LOOKS LIKE OUR REVENUES ARE GOING TO BE LOWER COMPARED TO LAST YEAR.
BUT IT'S STILL AT. WE'RE STILL AT SECOND QUARTER.
SO IT'S POSSIBLE THAT WE WOULD SEE THAT GO UP.
AND BUT THEN WHEN YOU COMPARE IT WITH OUR PROPERTY TAXES, WHICH IS OUR MAJOR SOURCE OF REVENUE, YOU WOULD SEE THAT THE INCREASE IS NOT AS STEEP AS THE PREVIOUS YEARS.
AND THEN SIMILARLY, FOR OUR TOTAL EXPENDITURES IN THE PAST FIVE YEARS, IT'S BEEN STEEPLY GOING UP.
AND THAT'S JUST MAINLY DUE TO THE INFLATION AND THE HIGHER COST OF GOODS AND SERVICES IN GENERAL.
SO WE DO PROJECT THE EXPENDITURES TO BE SLIGHTLY LOWER THAN LAST YEAR, AND THAT'S DUE TO THE DECREASE IN OUR TRANSFER OUT OF ABOUT $14 MILLION AS COMPARED TO LAST YEAR. AND WHEN WE COMPARE THAT TO OUR SALARIES AND BENEFITS, WHICH IS OUR LARGEST EXPENDITURE, THERE'S JUST A SLIGHT INCREASE DUE TO THE ANTICIPATED COLA FOR THE REST OF THE YEAR.
AND SO LAST BUT NOT THE LEAST, WE DO HAVE OUR OTHER GOVERNMENTAL FUNDS.
SO I THINK ON PAGE ON YOUR ATTACHMENT B YOU WOULD SEE THE BUDGETED AGAINST THE ACTUALS AND JUST TO GO OVER IT. WE DO HAVE SPECIAL REVENUE FUNDS WHICH INCLUDES MEASURE FF, LLD FUNDS, ZONES OF BENEFITS, MEASURE WW LOCAL GRANTS. AND THESE FUNDS TEND TO MIRROR WHAT'S HAPPENING TO THE GENERAL FUND DUE TO SOME OF THEIR REVENUES FROM PROPERTY TAXES. EXCEPT, OF COURSE, FOR THE MEASURE WW.
AND THEN WE ALWAYS DO HAVE VARIANCE IN OUR BUDGET TO ACTUALS FOR OUR PROJECT FUNDS.
AND THAT'S JUST PRIMARILY DUE TO THE TIMING OF THESE PROJECTS, BECAUSE ONCE WE BUDGETED THEM, IT TAKES A LONGER PERIOD OF TIME TO ACTUALLY SPEND THAT MONEY.
AND THEN THAT SERVICE FUNDS, WHICH IS BASICALLY OUR FUNDING FOR ALL OUR DEBT SERVICE PAYMENTS PARTICULARLY FOR MEASURE WW BONDS AND OUR PROMISSORY NOTES. AND LAST BUT NOT THE LEAST, WE DO HAVE OUR ISF, WHICH INCLUDES THE WORKERS COMP,
[01:25:03]
GENERAL LIABILITY, EMPLOYEE BENEFITS, MAJOR INFRASTRUCTURE AND MAJOR EQUIPMENT.SO TODAY WE ARE ASKING THE FINANCE COMMITTEE TO APPROVE AND SUBMIT THE SECOND QUARTER 2025 GENERAL FUND AND OTHER GOVERNMENTAL FUNDS TO THE BOARD OF DIRECTORS FOR FAVORABLE CONSIDERATION.
AND I'LL BE HAPPY TO TAKE ANY QUESTIONS OR COMMENTS.
THANK YOU VERY HELPFUL. AND I'LL LOOK TO MY COLLEAGUES.
DENNIS? LOOKS FINE TO ME NOTES. EXTENSIVE NOTES AT THE BOTTOM OF THAT TABLE.
YES THE ONLY ONE THAT'S BETTER THAN THAT IS ABOVE TARGET IF IT'S A REVENUE. BUT OTHER THAN THAT, [LAUGHTER] THAT LOOKS REALLY GOOD.
AND THANK YOU FOR THE PERFECT AMOUNT OF DETAIL AND EXPLANATION FOR US.
YEAH GREAT THANK YOU. YEAH, I APPRECIATE THAT AS WELL.
WELL I'M ALWAYS LISTENING FOR OUR PROPERTY TAX TRENDS.
WE HAVE HAD THE BENEFIT OVER THE LAST OH, HOW MANY YEARS? BUT PRETTY MUCH AS FAR BACK AS I'M THINKING IN TERMS OF MY OWN TENURE ON THE BOARD.
A STEADY GROWTH IN PROPERTY TAXES BASED ON A STEADY GROWTH IN PROPERTY VALUES IN THE TWO COUNTIES.
I MEAN, ANYWHERE FROM A FEW PERCENTAGE POINTS TO FIVE, 4 OR 5 PERCENTAGE POINT GROWTH.
AND. YOU KNOW, CORRECT ME, BUT WE'RE NOW LEVELING OFF WHERE WE ARE NOT ANTICIPATING GROWTH, BUT THE SIMPLE LEVEL. IN OTHER WORDS, WE'RE OUR PROPERTY TAX REVENUES ARE GOING TO BE THE SAME AS THEY HAVE BEEN IN THE PRIOR YEAR, RATHER THAN INCREASING SIGNIFICANTLY OR AT LEAST SUBSTANTIVELY.
YEAH, YEAH, I'LL TAKE THAT ONE. SO YEAH, CORRECT.
IN THE TIME I'VE BEEN HERE EVER SINCE WE MADE IT THROUGH THE GREAT RECESSION, WE'VE HAD NICE STEADILY INCREASING PROPERTY TAX REVENUES, SOMETIMES BIGGER INCREASE THAN OTHERS. LIKE RIGHT AFTER COVID, WHICH IS ALL OF OUR RECENT MEMORIES, WE HAD REALLY BIG LIKE 6% INCREASES IN PROPERTY TAX REVENUES.
WHAT WE'RE LOOKING AT FOR THE COMING YEAR AND WE'VE JUST RECEIVED OUR REPORT FROM BEACON ECONOMICS, WHICH IS THE FIRM THAT DOES THE PROJECTION FOR US.
AND THE INCREASE IS NOT AS BIG AS IT USED TO BE.
AND WE'RE NOT FORESEEING THAT HAPPENING IN THE NEXT FEW YEARS BASED ON BEACON'S PROJECTIONS.
BUT THE INCREASE ISN'T GOING TO BE AS BIG AS WE'VE BEEN ENJOYING FOR THE PAST YEARS.
SO YOU'LL HEAR MORE ABOUT THAT AT THE NEXT FINANCE COMMITTEE MEETING.
AND YOU KNOW, THE ADVANTAGE OVER A LOT OF OUR CONSTITUENT CITIES, FOR INSTANCE, IS WE HAVE A REALLY BROAD AND DIVERSE, DIVERSIFIED PROPERTY TAX BASE. SO WE'RE NOT AS SUSCEPTIBLE TO THE SMALLER JURISDICTION HITS ON PROPERTY VALUES.
AND THAT SEEMS TO BE WHAT IS HAPPENING. OTHER THAN EVERY, YOU KNOW, THOSE OF US WHO LOOK AT THE REAL ESTATE PAGES, PEOPLE ARE NOT GETTING THE OFFERS ON HOMES THAT THEY WERE GETTING IN THE PAST.
IT TRANSFERS ALMOST DIRECTLY INTO OUR GROWTH IN OUR ACREAGE OF PARKS AND THE DOUBLING OF OUR ACREAGE OVER, YOU KNOW, THE TERMS OF AA AND WW, WHICH WE'RE ABOUT TO TALK ABOUT NEXT, BUT ALSO HAS TO DO WITH POPULATION GROWTH AND THE COMMENSURATE INCREASES IN PROPERTY TAX REVENUES. THAT'S NOT HAPPENING.
AND WE HAVE TO ADJUST FOR THAT IN TERMS OF OPERATIONAL COSTS AT LEAST.
ANYWAY, THAT'S WHAT STANDS OUT FOR ME. AND AS LONG AS I HAVEN'T MADE A HAVE BEEN WAY OFF ON THAT.
[01:30:08]
I THINK IT'S NOTABLE. SO THANK YOU VERY MUCH.VERY GOOD PRESENTATION. THIS IS ANOTHER ITEM GOING TO THE FULL BOARD.
ANY OTHER ADDITIONS? NO, I WAS GOING TO SAY IF WE COULD GET A RECOMMENDATION.
OKAY. THAT'D BE GREAT. PUBLIC COMMENT? NO IN-PERSON OR REMOTE PUBLIC COMMENT.
YEAH. MOVE FOR ACCEPTANCE TO THE FULL BOARD. MOVED BY DIRECTOR MERCURIO.
SECOND. SECONDED BY DIRECTOR WAESPI. ALL IN FAVOR, PLEASE SAY AYE.
AYE. ANY OPPOSED? ANY ABSTENTIONS? PASSES UNANIMOUSLY AND OFF TO THE FULL BOARD.
THANK YOU AGAIN FOR VERY GOOD PRESENTATION. WHICH BRINGS US TO.
[Informational Items]
INFORMATIONAL ITEMS UNDER AGENDA ITEM 5. FIRST, A.CAPITAL FINANCE UPDATE ON AA AND WW BONDS. GOOD AFTERNOON, DIRECTOR COFFEY AND FINANCE COMMITTEE MEMBERS KATIE DIGNAN, ASSISTANT FINANCE OFFICER WITH FINANCE AND MANAGEMENT SERVICES, HERE TO GIVE YOU AN UPDATE ON OUR CAPITAL MEASURE AA AND WW BONDS. SO TO FIRST START OFF TO JUST KIND OF SET THE PAGE OF HOW WE ALLOCATE OUR MEASURE AA AND WW FUNDING IS IN THE METROPOLITAN SECTORS. AND SO WE STRIVE TO PROVIDE A BALANCED SYSTEM OF REGIONAL PARKS AND TRAILS AND SERVICES FOR ALL DISTRICTS RESIDENTS.
AND IN KEEPING WITH OUR MASTER PLAN, THE DISTRICT IS DIVIDED INTO THREE SECTORS.
THE MEASURE AA AND W BOND FUNDS WERE ALLOCATED BASED ON THE POPULATION PER METRO AREA.
SO WE FIRST HAVE OUR WEST METROPOLITAN SECTOR, WHICH INCLUDES CROCKETT TO SAN LEANDRO, BOUNDED ON THE WEST BY SAN FRANCISCO BAY AND ON THE EAST BY EAST BAY HILLS. THEN OUR NEXT IS THE SOUTH METROPOLITAN SECTOR, WHICH IS FROM SAN LORENZO TO THE SANTA CLARA COUNTY LINE IN THE SOUTH, AND IN ALAMEDA COUNTY TO THE SAN JOAQUIN COUNTY LINE IN THE EAST.
AND THEN LASTLY, WE HAVE OUR DIABLO SECTOR, WHICH IS TO THE EAST OF EAST BAY HILLS AND INCLUDES LAND BOUNDED ON THE NORTH BY CARQUINEZ STRAIT AND THE DELTA SHORELINE, ON THE EAST BY SAN JOAQUIN COUNTY, AND THEN EXTENDS DOWN TO SOUTH BY ALAMEDA COUNTY LINE AND HIGHWAY 580.
MOVING ON TO OUR MEASURE AA CAPITAL BONDS, IN 1988, VOTERS APPROVED THE ISSUANCE OF $225 MILLION OF GENERAL OBLIGATION BONDS. OF THAT, 25%, OR $56 MILLION, WAS ALLOCATED FOR THE LOCAL GRANTS PROGRAM, WHICH IS COMPLETE AND ALL FUNDS HAVE BEEN DISBURSED.
AS OF THE END OF MAY, OUR TRUSTEE HAD HELD $10.6 MILLION IN BOND PROCEEDS AND INTEREST.
APPROXIMATELY $3.6 MILLION IS REMAINING TO BE APPROPRIATED.
THE CHART BELOW DEPICT THE ORIGINAL MEASURE AA APPROPRIATIONS BASED ON METROPOLITAN AREA AT THE TIME OF ISSUANCE IN 1988, AND THE ADJUSTED ALLOCATIONS BY METRO AREA TO DATE.
AS YOU CAN SEE, OUR CURRENT DISTRIBUTION HAS 38% FOR THE METRO, THE WEST METRO AREA, 30% FOR THE SOUTH METRO AREA, AND 32% FOR DIABLO. THIS NEXT SET OF CHARTS GOES INTO MORE DETAIL ON WHAT OUR ORIGINAL ADJUSTED TARGETS WERE, AND APPROPRIATIONS BASED ON ACQUISITIONS AND DEVELOPMENT.
AS I MENTIONED, WE HAVE ABOUT $1.8 MILLION IN APPROPRIATED REMAINING FUNDS.
IT'S BROKEN OUT WITH JUST A LITTLE BIT OF ABOUT $34,000 LEFT IN THE DIABLO METRO AREA, $1.5 MILLION IN THE IN THE SOUTH AND $239,000 IN THE WEST. LAST YEAR, THE BOARD APPROVED CONSOLIDATING ALL OF OUR REMAINING BALANCES FOR THE DIABLO AND THE WEST METRO AREAS, WHICH ENABLED US TO SPEND AN APPROPRIATE OVER $3 MILLION IN THIS LAST YEAR.
SO REALLY WHITTLING THAT BALANCE DOWN TO ONLY $1,800,000.
THE SOUTHERN METRO AREA. THE ACQUISITION FUNDING IS STILL ALLOCATED TO SPECIFIC PROJECTS.
IN TERMS OF INTEREST. TO DATE, WE HAVE EARNED $29.1 MILLION.
OF THAT, $27.3 HAS BEEN APPROPRIATED, LEAVING ABOUT $1.8 MILLION AVAILABLE.
SO OUR PLAN IS WHEN WE COME FORWARD WITH A 2026 BUDGET.
WE'RE GOING TO BE REQUESTING APPROPRIATION OF THOSE REMAINING INTEREST FUNDS.
[01:35:07]
OKAY, NOW ON TO WW. IN 2008, THE VOTERS APPROVED MEASURE WW, WHICH AUTHORIZED THE ISSUANCE OF $500 MILLION IN CAPITAL BONDS. THIS MEASURE WAS AN EXTENSION OF MEASURE AA, SIMILAR TO MEASURE AA.WE APPROPRIATED ALLOCATED 5,025% OR $125 MILLION FOR THE OF PROCEEDS WERE ALLOCATED TO THE LOCAL GRANT COMPONENT. SINCE 2008, 240 PROJECTS HAVE BEEN APPROVED AND 229 PROJECTS HAVE BEEN COMPLETED AND CLOSED OUT.
WE'VE ISSUED A TOTAL OF $300 MILLION IN TAX DEFERRED G.O.
BONDS TO DATE, $80 MILLION IN 2009, 2013 AND 2017, THEN $60 MILLION IN 2022.
THE 2017 AND IN 2022. BONDS BOTH INCLUDE $30 MILLION IN CERTIFIED GREEN BONDS.
SO WHEN WE GO AND WE LOOK AT THE DISTRIBUTION BASED ON THE METRO AREAS, PER THE 2020 CENSUS, WE HAVE OUR TARGETS ARE IN THE SOUTH AT 27%, IN DIABLO AT 35% AND WEST AT 38%.
WHEN I TAKE THE TOTAL APPROPRIATIONS BY METRO AREA AS OF JUNE 2025, WE'RE AT THE SOUTH AT 23%, DIABLO AT 40%, AND THE WEST AT 41%. THE REASON THAT THIS IS INCREASED IS BECAUSE, AS WE'VE BEEN APPROPRIATING FUNDING FOR THE PROJECTS THAT WERE LISTED IN MULTI DISTRICT AREAS AND CONTINGENCY, WE NOW ARE RECOGNIZING THE SPECIFIC METRO AREA THAT THOSE PROJECTS ARE IN.
AND SO THAT'S WHAT'S LED TO SOME OF THESE BEING HIGHER THAN WHAT WE HAD ORIGINALLY ANTICIPATED.
HOWEVER, AS WE MOVE FORWARD, WE'RE GOING TO CONTINUE TO MONITOR APPROPRIATIONS OF THOSE MULTI DISTRICT PROJECTS AS WELL AS CONTINGENCY TO MAKE SURE WE'RE IN LINE WITH OUR 2020 CENSUS ESTIMATES. AND THIS ALSO HOLDS TRUE WITH THE APPROPRIATIONS AND ORIGINAL TARGETS FOR BOTH THE ACQUISITIONS AND DEVELOPMENTS. SO OF THE $173.8 MILLION, $84.7 MILLION HAS BEEN APPROPRIATED TO ACQUISITION AND $89.1 MILLION TO DEVELOPMENT PROJECTS. AND AS I MENTIONED, THESE CURRENT APPROPRIATIONS HAS EXCEEDED THE ORIGINAL DUE TO CONTINGENCY AND MULTI METRO ALLOCATIONS THAT ARE NOW APPROPRIATED FOR SPECIFIC PROJECTS. IN TERMS OF CASH FLOW. WE HAVE $298.5 MILLION APPROPRIATED TO THE PARK DISTRICT AND LOCAL GRANTS PROJECTS. WE'VE SPENT $265.33 MILLION AS OF JUNE, AND WE'RE AVERAGING ABOUT $15 MILLION PER YEAR.
BUT AS YOU CAN SEE FROM THIS CHART, WE HAVE PLENTY OF FUNDS AVAILABLE SO THAT AT THIS POINT, AND BASED ON CURRENT CASH FLOW PROJECTIONS, WE'RE NOT ANTICIPATING TO NEED TO ISSUE OUR NEXT ROUND OF BOND FUNDS UNTIL LATER NEXT YEAR, POSSIBLY 2027. BUT WE'LL CONTINUE TO MONITOR THAT AND SEE, BASED ON THE 2026 BUDGET, HOW WE DECIDE TO APPROPRIATE WW FUNDS, IF WE NEED TO MOVE THE ISSUANCE OF THE NEXT BOND FUNDS UP.
SO YOU CAN SEE HOW IN DIABLO AREA WE HAVE $59.3 MILLION STILL TO BE APPROPRIATED.
IN THE SOUTH, WE HAVE $40.5 MILLION. IN THE WEST, $61 MILLION AND THEN DISTRICT WIDE $21.4.
SO THIS IS A TOTAL OF OVER $182,369,973 THAT WE STILL HAVE LEFT OF JUST THE BASIC APPROPRIATION.
THEN WE ALSO HAVE CONTINGENCY FUNDING THAT WAS ESTABLISHED AS PART OF THE WW.
SO WE HAVE A TOTAL OF $200,724,643 TO BE APPROPRIATED.
AND JUST TO KIND OF SHOWCASE SOME OF THE PROJECTS.
FOR REFERENCE, THE LIGHT GREEN SHOWS US ALL OF THE PARKS THAT WE HAVE ACQUISITION FUNDING AVAILABLE THROUGH MEASURE WW, AS WELL AS LIGHT GREEN SHOWS, THE TRAILS, THE REGIONAL TRAILS.
AND THEN THE BLUE IS FUNDING FOR ACQUISITIONS ALONG THE SF BAY WATER TRAIL.
SOME OF THE PROJECTS WHERE WE'VE SPENT FUNDING THIS YEAR IS FIRST OFF, WE HAD MEASURE AA AND ABOUT $3 MILLION OF MEASURE AA AND $3 MILLION OF WW FOR THE POINT MOLATE ACQUISITION. THEN WE HAD $850,000 WAS USED FOR THE COYOTE HILLS WELLS REPLACEMENT PROJECT WOULD PROVIDE AGRICULTURALLY SUITABLE WATER FOR FARMING AT THE PATTERSON PROPERTY.
[01:40:06]
TRAIL. WE'VE COMPLETED THE FIRST PHASE OF THE OYSTER BAY SOIL IMPORT PROJECT, AND WE HAD ABOUT $1.7 MILLION IN MEASURE AA AND $1.8 MILLION IN MEASURE WW FOR THAT PROJECT.AND THEN LASTLY, THE BOARD HAS APPROPRIATED $3.6 MILLION OF WW FOR THE DESIGN OF THE TILDEN ENVIRONMENTAL EDUCATION CENTER, WHICH IS UNDERWAY. SO WITH THAT, I'LL OPEN IT TO QUESTIONS.
DIRECTOR WAESPI? DIRECTOR MERCURIO? MINE'S NOT A FUN ONE OR ANYTHING.
IT'S JUST THIS BUSINESS OF ARBITRAGE PAYMENT.
IT'S NOT CLEAR TO ME WHO GETS THAT. YOU WANT ME TO TAKE THAT ONE? YEAH. YEAH SO THAT GOES TO THE IRS. YOU KNOW, I SUSPECTED THAT, I WAS HOPING IT WASN'T, BUT YOU KNOW, OKAY. YEAH SO FOR THE. WE ACTUALLY HAVE TO PAY TAX.
SO IT'S A GOOD THING WE'RE EARNING INTEREST FINALLY, AFTER YEARS OF, LIKE, JUST, YOU KNOW, EKING OUT LITTLE BITS. BUT IF YOU EARN MORE THAN A WHATEVER YOU SOLD THE BONDS AT, THAT'S CALLED ARBITRAGE.
AND YOU HAVE TO GIVE IT BACK. OKAY. SO THAT'S WHAT THAT IS.
IN FULL OR SOME PORTION OF? IT'S THE AMOUNT ABOVE WHAT YOU SOLD THE BONDS AT AND SO WHEN WE TALK ABOUT LIKE WANTING TO GET OUR BOND PROCEEDS THE AMOUNT THAT WE'VE SOLD ALREADY, WE WANT TO GET THAT MONEY OUT THE DOOR, BECAUSE THEN YOU DON'T HAVE AN ARBITRAGE PAYMENT. YOU'RE LIKE SPENDING IT BEFORE YOU'VE MONEY. YEAH, EXACTLY SO. OKAY, THAT'S A GOOD PROBLEM TO HAVE.
ALL RIGHT THAT'S ALL FOR NOW. GIVE ME A MOMENT.
WHAT IS THE OVERALL ANTICIPATION FOR THE TIME FRAME IN WHICH WE WILL ISSUE THE REMAINDER OF WW BONDS? SO IT ALL WILL DEPEND ON OUR CASH FLOW PROJECTIONS.
AND SO SINCE I JUST REPORTED, WE STILL HAVE OVER $200 MILLION IN APPROPRIATED FUNDS.
YES. SO IT WILL [LAUGHTER]. IT'S DEPENDENT ON US APPROPRIATING THOSE TO SPECIFIC PROJECTS AND THEN WORKING ON FIGURING OUT THE SCHEDULES FOR WHEN THOSE PROJECTS WILL BE DELIVERED, BECAUSE THE MAJORITY OF THE FUNDS DON'T COME OUT UNTIL YOU'RE LIKE 25%, 45% INTO CONSTRUCTION.
AND ALL THIS STANDING, IT DOESN'T EVEN LOOK LIKE WE'RE GOING TO GET THERE UNTIL THE, YOU KNOW, WITH WHAT WE HAVE UNTIL THE END OF 2026 TO NEEDING OUR NEXT APPROPRIATION.
AND EVEN THEN, WE DON'T WE REALLY DON'T HAVE A NUMBER YET BECAUSE WE HAVEN'T APPROPRIATED THOSE FUNDS YEAH, I'LL JUST ADD TO THAT THAT BASED ON OUR SPEND RATE.
IT'S GOING TO BE MORE THAN 13 YEARS UNTIL WE'RE DONE.
YEAH. SO. IS THAT A PROBLEM? I REMEMBER WHEN WE PUT WW ON THE BALLOT IN 2008.
WE WERE USING THE SAME TIME FRAME THAT AA HAD, WHICH WAS THE VAST MAJORITY OF IT WOULD BE SPENT OVER THE COURSE OF 20 YEARS. WE PRESENTED THE MAPS OF HOW WE WOULD SPEND IT.
AND I THINK THE PROJECTION WAS 20 YEARS SIMILAR TO AA.
SO MY QUESTION IS IF WE'RE GOING TO GO OUT ON WW IN TERMS OF NOT JUST SPENDING, BUT ACTUALLY ISSUING THE BONDS AND THEN SPENDING THE REMAINDER AUTHORIZED BY THE VOTERS IN WW.
AND THAT'S GOING TO GO OUT ANOTHER 13 PLUS YEARS.
[01:45:01]
SO WHAT ARE 33 YEARS OR SOMETHING TO THAT EFFECT.ARE THERE ISSUES WITH THAT? I KNOW THERE ARE ISSUES WITH HOW THE TIME FRAME IN WHICH WE SPEND MONEY AFTER A BOND HAS BEEN ISSUED. SO IF WE ISSUE A BOND IN 2026, NEXT YEAR, WE HAVE A PERIOD OF TIME.
ACCORDING TO THE IRS, TO ACTUALLY SPEND IT. BUT WE DON'T HAVE THAT PROBLEM WITH THE PERIOD OF TIME IN WHICH WE ISSUE THE BONDS THAT WERE AUTHORIZED. CORRECT YEAH. I MEAN, I THINK THE ONLY [LAUGHTER].
NOT THE ONLY ISSUE, BUT THE MAIN ISSUE IS, I THINK, EXPECTATIONS OF US DOING SOMETHING WITH THIS AUTHORIZATION AND THE FACT THAT THAT MONEY IS WORTH LESS. THE LONGER IT TAKES YOU TO SPEND IT.
SO $500,000,000 IN 2008 WAS AWESOME. IT'S STILL AWESOME TODAY, BUT IT'S LESS THAN IT USED TO BE.
SO THAT'S THE REASON TO WANT TO LIKE, GET THINGS DONE AND TO, LIKE, SPEND TODAY'S MONEY TODAY.
YEAH BECAUSE WE'RE SEEING WITH ALL OF OUR PROJECTS, THE PRICES IS JUST SUBSTANTIALLY INCREASED THAN WHAT OUR ORIGINAL ESTIMATES WERE FOR THIS, IN SOME CASES DOUBLING. AS WE'VE BEEN MOVING FORWARD.
OKAY MILLION THAT WE NEED FOR THOSE PROJECTS. IT'S JUST THAT THEY DON'T 100% ALIGN WITH WHAT IS LISTED IN WW RIGHT NOW.
SO IT'S ALL THINGS FOR THE BOARD TO CONSIDER OF HOW WE WANT TO MOVE FORWARD WITH PROJECTS.
SO REMIND ME OF HOW WE ARE SUPPOSED TO SPEND THE MONEY? AND THAT WOULD BE GUIDED BY THE ACTUAL MEASURE WW AND THE MAPS AND THE LISTINGS OF PROJECTS THAT WE PRESENTED TO THE VOTERS ON WW. AND THEN THAT GETS TRANSLATED FOR OUR PURPOSES.
AND I'M LOOKING AT WW, SINCE IT'S THE VERY LARGE SUM THAT REMAINS OUT THERE FOR MEETING THE ORIGINAL PROJECTS AS PROJECTED BACK IN 2008 AND THE VOTER AND FOR VOTER APPROVAL.
SO THESE COLUMNS THAT WE HAVE THAT LIST PARK BY PARK AMOUNTS THAT REMAIN OR IN SOME CASES, DON'T REMAIN. WHAT ARE THE PARAMETERS FOR US AGAIN IN ACTUALLY SPENDING THAT MONEY? THERE ARE RESTRICTIONS OR THERE WERE, I SHOULDN'T SAY RESTRICTIONS.
THERE WERE GOALS OR PROJECTIONS THAT WW WOULD BE USED FOR CAPITAL FACILITIES DEVELOPMENT OR ACQUISITIONS OF PROPERTY. AND WE APPARENTLY HAVE LOTS OF FLEXIBILITY AND SHIFTING BACK AND FORTH ON THOSE.
STATED THAT IT'S BASED ON THE 2008 PROJECT LIST AS PRESENTED.
HOWEVER, THE BOARD IS ABLE TO REVISIT THAT LIST AS OFTEN AS THEY WANT TO AND MAKE ANY CHANGES.
BUT WE DID COMMIT TO SPENDING WITHIN THE METRO POPULATION AREAS, AND SO CONTINUING TO DISTRIBUTE THE MONEY IN THOSE AREAS, THERE WERE TARGETS THAT IT WOULD BE 75% FOR ACQUISITION, 25% FOR DEVELOPMENT.
THAT'S WHAT THE ORDINANCE STATES. AND I CAN SHARE THAT WITH THE FINANCE COMMITTEE.
SO EVERYBODY CAN BE REVISITED OF WHAT WAS APPROVED BEFORE WE WENT TO THE VOTERS.
AND THAT WAS INCLUDED IN THE LEGISLATION AS WELL.
AND SO WE ARE AND WE REMAIN COMMITTED TO THE METRO FORMULAS.
CORRECT. AND WE DON'T HAVE A LOT OF DISCRETION IN THAT.
THAT'S CORRECT. ALL RIGHT. SO WHEN WE GO PARK BY PARK AND LOOK AT THESE COLUMNS, I THINK THAT IS THE AREA IN WHICH YOU FOLKS. I'M TALKING ABOUT THE BROADER FINANCIAL MANAGEMENT PEOPLE AND THE GENERAL MANAGER.
AND I'LL HAVE SUGGESTED AT TIMES THAT WE DO HAVE FLEXIBILITY WITH THOSE KIND OF ALLOCATIONS REPRESENTED BY THESE CHARTS. AND THAT HAS PROVED, WHEN IT'S BEEN SUGGESTED, TO HAVE A LITTLE BIT OF CONTROVERSY AROUND IT BECAUSE OF OUR NEED THAT WE FEEL. I ESPECIALLY FEEL TO BE CONSISTENT WITH WHAT WE TOLD THE VOTERS THAT WE WOULD DO IN WW.
AND SO THAT IN EFFECT IS PERHAPS A RESTRICTION THAT WE MAY HAVE IN OUR OWN MINDS BECAUSE OF OUR RELATIONSHIP WITH THE VOTERS WHO APPROVE THIS.
[01:50:04]
BUT AT THE SAME TIME, I KNOW THE GENERAL MANAGER HAS POINTED OUT THAT TIMES CHANGE AND WE HAVE PROJECTS THAT WE PROJECTED WE WOULD NEED MONEY FOR, OR COULD USE MONEY FOR IN THE FUTURE THAT HAVE SINCE GONE AWAY.I'M THINKING OF A LITTLE ISLAND OUT IN THE DELTA, AND [LAUGHTER] ACTUALLY NOT SO LITTLE AN ISLAND ON THE DELTA IN TERMS OF POTENTIAL DEVELOPMENT THAT HAS COME AND GONE OVER THE YEARS AND IS COMING BACK.
IN ANY EVENT, WE HAVEN'T DONE THAT, THOUGH IT'S BEEN SUGGESTED.
AND I, YOU KNOW, WE HAVE A BIG ZERO THERE FOR TILDEN [LAUGHTER] OR TILDEN HAS VERY, YOU KNOW, $74,000 LEFT OF WW FUNDING. AND OBVIOUSLY THERE'S A HUGE PROJECT IN TILDEN THAT ACTUALLY, YOU KNOW, ISN'T ALL THAT INCONSISTENT WITH THE INTENT OF WW.
BUT TO ALLOCATE MONEY WE WOULD HAVE TO REDO THESE COLUMNS.
IS THAT WHAT WE WOULD HAVE TO DO. AND WE'D HAVE TO KIND OF ACCEPT THAT CHALLENGE? THAT'S CORRECT. OTHER THAN THAT, WHAT ALSO IS AVAILABLE IS THESE UNASSIGNED FUNDS THAT ARE DISTRICT WIDE. I KNOW WITH AA THERE'S A $1.8 MILLION INTEREST EARNED FUND THAT HAS NEVER BEEN ASSIGNED. SO IT'S THERE.
WE HAVE I'M NOT LOOKING DIRECTLY AT THE NUMBERS, BUT THERE ARE BOTH UNASSIGNED FUNDS THAT WERE UNASSIGNED ON PURPOSE AS SORT OF A CONTINGENCY IN WW. THAT'S CORRECT. AND THEN I THINK IS IT SEPARATE THAT THERE ARE RESERVED FUNDS.
NO, IT'S THE CONTINGENCY AND WE'VE BEEN APPROPRIATING THAT FOR PROJECTS.
SO WE HAVE BEEN APPROPRIATING IN THE PAST AND MOVING THINGS FROM PARK AREAS TO OTHER PARK AREAS.
THE BOARD HAS AUTHORIZED THAT. WITHIN METRO AREAS? WITHIN METRO AREAS CORRECT? YEAH, AND I THINK WE'VE WHEN YOU SIGNIFY THAT WE'VE DONE A LITTLE OF THAT, I THINK WE'VE TREATED FUNDING AVAILABLE FOR ROUND VALLEY IS ALSO AVAILABLE FOR ACQUISITIONS THAT ARE ACTUALLY CLOSER TO MORGAN TERRITORY.
WE DID THAT AS MY MEMORY. IT TAKES AN AFFIRMATIVE ACT TO SUGGEST THAT WE'RE BEING GENERALLY CONSISTENT, BUT NOT EXACTLY WITH THESE COLUMNS. ALL RIGHT SO I HAVE BEEN ON THE COMMITTEE FOR A COUPLE OF YEARS, [LAUGHTER] AND I'M REACQUAINTED MYSELF WITH THIS BECAUSE IT'S A REMINDER TO YOUR BOARD THAT THERE'S A LOT OF MONEY THERE THAT WE'RE BEHIND TECHNICALLY IN SPENDING IT, AS STRANGE AS THAT SOUNDS [LAUGHTER].
YEAH. AND WE HAVE AS WE CONTINUE TO GET REMINDED OF THIS.
WE HAVE HALF A BILLION DOLLARS IN PROJECTS OUT THERE THAT WE COULD, IN THEORY, PROCEED WITH.
IT'S NOT SO MUCH THE MONEY AS THE TIME AND RESOURCES, PERSONNEL, PERMITS.
ALL THOSE RESOURCES AND BARRIERS TO THAT HALF A BILLION DOLLARS IN PROJECTS THAT WE HAVE ON PAPER.
AND I JUST KEEP COMING BACK TO THE IDEA THAT WE NEED TO HAVE IDEAS BOTH AS TO WHAT WE NEED TO DO TO GET TO THESE PROJECTS AT GREATER SPEED. AND HOW WE NEED TO MAYBE REALLOCATE SOME OF THESE COLUMNS. THE FUNDING HERE, AS LONG AS WE DON'T DEVIATE TOO FAR FROM THE INTENT OF WW BECAUSE I YOU KNOW, I WAS THINKING WE'D GO BACK OUT IN 2028.
CAROL JOHNSON SENT WE AMBASSADORS OUT TO. AND I ENVISIONED 20 YEARS LATER GOING OUT SAYING, HERE'S JUST LIKE WE DID WITH AA, HERE'S WHAT WE HAD, HERE'S HOW WE SPEND IT, AND HERE'S OUR NEW MAP.
WE'RE GOING TO SPEND IT LIKE THAT AND BE ABLE TO PRESENT THAT 20 YEARS LATER.
SO WITH ALL THAT IN MIND, I JUST WOULD LIKE TO AGAIN HAVE MANAGEMENT CONTINUE TO THINK ABOUT
[01:55:02]
HOW WE COPE WITH HAVING MONEY AVAILABLE AND NOT BEING ABLE TO SPEND IT WITH THE VARIOUS BARRIERS, WHETHER WE NEED MORE PEOPLE. I NOTICED ON LINKEDIN THE OTHER DAY WE'RE HIRING THE PROJECT MANAGERS.RIGHT? THIS IS HOW I TRACK WHAT THE PARK DISTRICT IS DOING IN HIRING.
I GET THE NOTIFICATIONS FROM LINKEDIN. AND SO I THOUGHT TO MYSELF, HEY, THAT'S A GOOD SIGN BECAUSE THAT'S SOMETHING WE NEED TO DO TO MOVE SOME PROJECTS ALONG. WE HAVE TO HAVE ACTUAL PROJECT MANAGERS AND WE'RE OUT LOOKING FOR THEM.
BUT IN ANY IN THAT VEIN, YOU KNOW, WHAT DO WE NEED TO DO? AND IT'S A NICE PROBLEM TO HAVE. AND IT'S GOING TO BE TRICKY AND MORE UP TO US THAN, YOU KNOW, I MEAN, BOARD GOVERNANCE THAN MANAGEMENT TO MAKE SOME HARD DECISIONS ABOUT THOSE COLUMNS AND WHERE THINGS GO, WHERE THERE'S A LOT, A LOT OF MONEY IN A COLUMN THAT, YOU KNOW, KIND OF IN THE SAME VICINITY WE COULD USE IT [LAUGHTER].
AND, YOU KNOW, THAT MIGHT BE DIFFICULT AND SOMETIMES DIFFICULT POLITICALLY.
SO I'M JUST GOING TO END THERE. THAT'S MY COMMENTARY AND MY REQUEST TO KEEP IN MIND.
HOW WE CAN BETTER AND QUICKER SPEND MONEY THAT'S BEEN APPROVED BY THE VOTERS.
AND IN A SITUATION WHERE WE HAVE A LOT OF PROJECTS THAT WE CAN GO WITH, AND IT IS OUR INTENT TO COME BACK TO THE BOARD AS A STUDY SESSION WITH PROPOSALS AS WE MOVE INTO OUR 2026 BUDGET, BECAUSE WE DO HAVE PROJECTS THAT ARE READY TO GO TO CONSTRUCTION THAT NEED FUNDING, AND WE DON'T HAVE DESIGNATED FUNDING FOR THEM.
SO MY RECOMMENDATION THAT I REALLY FEEL FAIRLY STRONGLY ABOUT IS THAT IF YOU'RE GOING TO MEET THIS NEED OF DEALING WITH SOME OF THESE HARD ISSUES, OF HAVING SOME MONEY IN THIS COLUMN, THAT WE HAVE TO MOVE UP INTO THE, YOU KNOW, THE DIFFERENT AREAS THAN EXACTLY WHERE THEY ARE. I WOULD URGE YOU TO HAVE MEETINGS WITH THE WARD DIRECTORS IMPACTED BY THESE RELOCATIONS THAT WE'RE TALKING ABOUT. I JUST THINK THAT BEFORE YOU COME AT US AS A FULL BOARD, GET SOME FEEDBACK FROM US INDIVIDUALLY ABOUT THESE ALLOCATIONS, BECAUSE SOME OF US FEEL REALLY, REALLY STRONGLY ABOUT SOMETHING THAT'S OUT THERE THAT MAY NOT SHOW UP IN OUR.
JUST USE TILDEN AGAIN, IF I WANTED TO REALLY PUSH TILDEN AND I WAS A WARD 1 DIRECTOR.
YOU KNOW? I'D LIKE YOU FOLKS TO TALK TO ME ABOUT HOW WE WOULD REALLOCATE TO BENEFIT THE TILDEN PROJECT, FOR INSTANCE. SO I JUST THINK THAT'S GOING TO REQUIRE SOME CONSULTATION WITH YOUR DIRECTORS.
GOT IT. SO I'LL END WITH THAT. THANK YOU. THIS IS INFORMATION ONLY? JUST A LITTLE WHICH OF COURSE IS TERRIBLE FOR US. PROPERTY TAXES NO, NO LEVELING OFF OF SPENDING MEASURE W, BUT W FUNDS, THAT'S WHAT I'M CONCERNED AND I KNOW THAT HAS A NUMBER OF REASONS AND THERE ARE GOOD REASONS. BUT AGAIN, TO ECHO DIRECTOR COFFEY'S SENTIMENTS, YOU KNOW, I HOPE YOU ASK SOME QUESTIONS BECAUSE AS I'M LOOKING AT THIS IN THE SOUTH METRO SECTOR, I LOOK AT DRY CREEK AND THERE'S $6.68 MILLION FOR ACQUISITION AND DEVELOPMENT, AND THE DARN PLACE HAS BEEN CLOSED FOR THREE YEARS.
AND I DON'T KNOW HOW THAT RANKS IN PRIORITY WISE, BUT, BOY, IT SURE.
WELL, SOME OF THESE QUESTIONS COME TO US BECAUSE WHEN SOME OF OUR CONSTITUENTS SAY, HEY, WHY AREN'T WE DOING ANYTHING? AND ANTHONY CHABOT, YOU'VE GOT, YOU KNOW, $1.3 MILLION TO DO WORK AND ANTHONY CHABOT AND BLAH, BLAH, BLAH, BLAH, AND DOWN THE LIST AND EACH PERSON IN THEIR METRO AREA HAS THE SAME QUESTIONS.
SO I ONCE EXACTLY JOHN. YEAH SO I THINK IT'S PRETTY CLEAR THAT THERE'S A WILL TO SPEND THIS MONEY, BECAUSE THERE'S IDEAS OF HOW WE ALL HAVE IDEAS ON HOW WE COULD USE THOSE FUNDS.
SOME OF US FROM BEFORE THEY EVEN CAME ON THE BOARD [LAUGHTER].
AND SO THEN LOOKING AT THAT A LITTLE MORE CLOSELY, IT JUST SEEMS LIKE IT IS THAT WE DON'T HAVE THE STAFF TO PUSH THEM THROUGH. WE CAN'T PUSH THESE PROJECTS THROUGH.
WHETHER WE DO THAT WITH OUR OWN FOLKS OR WE USE CONSULTANTS OR WHATEVER IT IS, WE JUST I THINK IT'S WAY LESS THAN WHAT THE BOARD WOULD BE DESIROUS OF HAVING SEE IMPLEMENTED. SO IS THERE WHAT I WOULD I GUESS, YOU KNOW, NOW YOU KIND OF MY EARS PERKED UP WHEN YOU SAID THERE'S SOME CREATIVE THINKING
[02:00:08]
OR SOMETHING GOING ON IN THE FUTURE. HOW CAN WE USE THESE FUNDS? YOU KNOW, MAYBE DISTRICT WIDE FUNDS TO USE THEM TO FOR STAFF.YEAH. I THINK IF WE CAN USE WW FUNDS FOR STAFF THAT ARE WORKING FOR PROJECT MANAGEMENT AND FOR WORKING ON THE FUNDS, THAT IS AN ELIGIBLE USE OF THE FUNDS. AND I DON'T THINK WE'VE REALLY DONE THAT THAT MUCH.
NO SO WE'VE STARTED HAVING PROJECT MANAGERS CHARGE TO WW SO WE CAN START RECOGNIZING THE, YOU KNOW, ACTUAL COST OF COMPLETING THESE PROJECTS, THE FULL COST.
AND SO WE'RE MOVING TOWARDS THAT. BUT IT IS AN ELIGIBLE EXPENSE.
AND I THINK, YOU KNOW, WHEREAS WE ONLY HAVE $20 MILLION LEFT IN DEVELOPMENT.
AND SO AND WE HAVE BEEN HAVING TO MOVE FUNDS FROM ACQUISITION TO DEVELOPMENT.
SO THAT'S REALLY KIND OF THE CONVERSATION WE'RE GOING TO BE COMING BACK ON IS MAKING THAT HARD CALLED CAN WE, YOU KNOW, CAN WE MOVE THESE FUNDS. WE DON'T THINK THERE'S AN ACQUISITION OPPORTUNITY HERE OR WE HAVE THIS PROJECT READY TO GO, YOU KNOW, CAN WE MOVE THE FUNDS OVER TO THIS POINT? DISTRICT ALONG THE SHORELINE. THERE'S THREE PROJECTS THERE THAT TOTAL $38 MILLION OF WW YEAH, OF TOTAL, YOU KNOW, AND I JUST WONDER, WHERE ARE WE GOING TO FIND PLACES TO SPEND [LAUGHTER] THAT MONEY? I DON'T KNOW, I'M NOT AN EXPERT IN THAT AREA.
BUT THAT JUMPED OUT AT ME. AND THEN I STARTED THINKING ABOUT IN MY WARD, YOU KNOW, THURGOOD MARSHALL REGIONAL PARK, HOME OF THE PORT CHICAGO 50, HAS GIGANTIC NEEDS THAT.
YEAH. THAT'S JUST ONE TINY EXAMPLE. DIRECTOR COFFEY.
I KNOW IN HIS WARD, HE HAD A SIMILAR THING GOING ON.
I THINK WE ALL DO, YOU KNOW? SO I'M LOOKING FOR SOME CREATIVITY.
BUT IF WE COULD UTILIZE THIS TO GET BODIES IN HERE TO MANAGE THESE PROJECTS, ONE SOMEHOW, PREFERABLY WITH OUR, YOU KNOW, REAL STAFF MEMBERS THAT BELONG TO US.
YES, ABSOLUTELY. THEN, YOU KNOW, BECAUSE THIS IS GOING TO KEEP GOING.
IT'S NOT LIKE YOU KNOW, WE DON'T WANT TO HIRE SOMEBODY AND FIRE THEM IN THREE YEARS OR SOMETHING, YOU KNOW, NOT NEED THEM IN THREE. WE'LL ALWAYS NEED THEM, YOU KNOW, AND THERE'S SO MUCH FLEXIBILITY WITH REASSIGNMENTS AND ALL THAT STUFF.
I DON'T THINK THAT'S WE SHOULD BE AFRAID OF THAT.
SO I HOPE THAT WE GET SOME THINGS TO LOOK AT SOON.
IT'D BE REALLY GREAT. I'M ENCOURAGED. THAT'S THE HOPE.
YEAH THANK YOU. ANY PUBLIC COMMENT? NO PUBLIC COMMENT.
ALL RIGHT. LOOKING AROUND THE ROOM. NONE. ANYTHING TO CLOSE WITH ON THAT? OKAY. KATIE, THANK YOU SO MUCH. THANK YOU. IT'S VERY GOOD.
OKAY. AND INFORMATIVE. ITEM 5.B. LAST ITEM ON OUR AFTERNOON AGENDA IS A REPORT ON FUND BALANCE RESERVES. DEBORAH IT APPEARS AN ADDITIONAL HANDOUT ON THIS ONE THAT WE SHOULD HAVE IN BEFORE US HERE HERE IT IS. THIS ONE? YES. ALL RIGHT. YOU GUYS GOT IT? ALL RIGHT. YEP AND I'M BRINGING THIS REPORT, THIS INFORMATION REPORT ON OUR FUND BALANCE TO YOU AT THE REQUEST OF DIRECTOR COFFEY.
AND SO. THANK YOU. PUT THIS INFORMATION TOGETHER.
AND THIS IS GOING TO BE SOMEWHAT TECHNICAL AND GET INTO A LITTLE BIT OF DETAIL.
HOPEFULLY NOT TOO MUCH. AND SO I'LL JUST KICK IT OFF HERE.
SO STARTING AT THE HIGH LEVEL WHAT IS FUND BALANCE.
SO IT'S THE AMOUNT OF ASSETS OVER LIABILITIES IN A SPECIFIC FUND.
[02:05:05]
WE GOT THIS. THE BIGGER OF THE TWO BIG CHUNKS WE GET LIKE DECEMBER 15TH.THAT MONEY COMES IN AND THEN WE CLOSE OUR BOOKS DECEMBER 31ST.
SO YOU SEE THIS BIG FUND BALANCE THAT'S SITTING THERE AND WE DRAW.
SO WE GET THE NEXT BIG CHUNK IN DECEMBER. SO FUND BALANCE CHANGES DAY TO DAY.
SO WE'LL GET INTO THAT LATER. WE HAVE THIS GOVERNMENT ACCOUNTING STANDARDS BOARD GASB STATEMENT 54 THAT CAME OUT I THINK IN LIKE 2009 OR 2010. KAREN PROBABLY REMEMBERS THAT TELLS US EXACTLY HOW TO REPORT OUT OUR FUND BALANCE IN THESE DIFFERENT CATEGORIES.
AND THEN LASTLY KIND OF THE CATCHALL EVERYTHING ELSE IS UNASSIGNED.
SO IN ADDITION TO HAVING ALL THOSE FUND BALANCE CATEGORIES IN GOVERNMENT YOU HAVE FUND ACCOUNTING.
SO IF YOU WERE LIKE A PRIVATE CORPORATION YOU HAVE EVERYTHING ALL TOGETHER.
SO HERE ARE OUR DIFFERENT GOVERNMENTAL FUNDS THAT WE'RE GOING TO WALK THROUGH. WE'VE GOT OUR GENERAL FUND. THAT'S THE ONE YOU HEAR ABOUT ALL THE TIME. THAT'S ALL THE MONEY THAT'S NOT OTHERWISE RESTRICTED. WE ALSO HAVE NON-MAJOR FUNDS.
SO THERE ARE A LOT OF THOSE. AND JUST A FEW EXAMPLES THAT YOU'VE HEARD OF LIGHTING AND LANDSCAPING, ASSESSMENT DISTRICTS, CFDS YOU JUST HEARD ABOUT, ZONES OF BENEFIT, PERMANENT FUNDS.
AND THEN THOSE MULTI-YEAR THINGS THAT WE DO, WHICH WE CALL OTHER THAN ASSET OR ODA PROJECTS.
AND THEN LAST GROUPING IS DEBT SERVICE FUNDS.
SO WE'VE GOT OUR MEASURE AA AND WW BONDS. AND THEN OUR 2012 AND 2024 PROMISSORY NOTES.
ALL RIGHT SO NOW I'M WALKING YOU THROUGH THE VERY LAST PAGE OF YOUR PACKET.
AND KIND OF SIMILAR TO HOW WE DO OUR INVESTMENTS.
WE'RE TAKING IT FROM THE TOP OF THE PAGE AND THEN SLOWLY WALKING DOWN.
SO AT THE TOP WE HAVE THE MOST RESTRICTED FUND BALANCE CATEGORY NON-SPENDABLE.
SO EITHER CAN'T BE SPENT BECAUSE IT'S NOT IN SPENDABLE FORM.
OR THERE'S SOME LAW THAT SAYS YOU CAN'T SPEND IT.
SO I'M JUST GOING TO READ DOWN ON THE LEFT SIDE WHAT THOSE DIFFERENT CATEGORIES ARE.
AND THEN WE HAVE NOTES ON THE RIGHT SIDE. SO FIRST WE HAVE OUR ENDOWMENT CORPUS.
SO WE HAVE THESE PERMANENT FUNDS WHERE WE'VE RECEIVED MONEY.
AND IT CAME IN AS AN ENDOWMENT. SO IT'S PERMANENTLY RESTRICTED.
WE CAN'T SPEND THE CORPUS OF IT. WE CAN ONLY SPEND THE INTEREST EARNED.
AND YOU'LL SEE THAT LATER ON HOW THAT IS SET ASIDE.
SO THAT'S WHAT THAT AMOUNT IS IN THE NON-MAJOR FUNDS, THE ENDOWMENT FOR THOSE PERMANENT FUNDS.
NEXT WE HAVE CONSUMABLE SUPPLIES. THAT'S OUR CENTRAL STORE'S INVENTORY RIGHT THERE.
SO THAT'S WE SOMETIMES HAVE TO PREPAY THINGS LIKE RENT.
AND SO THAT'S ACTUALLY A BENEFIT TO US. WE'VE PAID FOR IT ALREADY.
SO IT'S SITTING HERE AS A PREPAID ITEM NON-SPENDABLE FUND BALANCE.
SO THAT'S THAT CATEGORY. ANY QUESTIONS BEFORE I MOVE ON? OKAY YOU CAN INTERRUPT IT I MEAN, IT'S LIKE, NO BIG DEAL? [LAUGHTER] SO IT'S SO YOU HAVE TO DO THIS CALCULATION WHEN YOU'RE PUTTING TOGETHER YOUR AUDIT OF WHAT YOUR MAJOR FUNDS ARE AND WHAT YOUR NON-MAJOR FUNDS ARE.
SO IT'S AGAIN, IT'S LIKE GOVERNMENT ACCOUNTING STANDARDS.
SO WE GROUP THEM ALL TOGETHER. I DON'T KNOW IF KAREN WANTS TO ADD TO THAT SHE'S OUR.
I DON'T KNOW, IT'S JUST $4.6 MILLION SEEMS TO ME, MAJOR, YOU KNOW, JUST [LAUGHTER].
OH, YEAH. I MEAN, SO IT'S ALL RELATIVE TO THE SIZE OF OUR OTHER FUNDS.
SO IF WE ARE A SMALL AGENCY. YEAH, $4.6 MILLION WOULD LOOK HUGE.
BUT WE HAVE LIKE A, YOU KNOW, 200, WHATEVER IT IS, $220 MILLION GENERAL FUND REVENUE.
SO THAT LOOKS THAT'S A NON-MAJOR RELATIVE TO THAT.
I'M KIND OF JUST MAKING FUN OF ACCOUNTS. I KNOW YEAH, YEAH, YEAH [LAUGHTER]. I KNOW THERE'S A LOT THAT'S VERY TO ONE. SO TECHNICAL OKAY SO YOU'RE ALLOWED TO DO THAT THEN [LAUGHTER]. ALL RIGHT.
[02:10:04]
OUR NEXT CATEGORY RESTRICTED FUND BALANCE. SO THIS IS THE NEXT AS I SAID NEXT MOST RESTRICTED CATEGORY WE HAVE.SO THERE'S EXTERNAL LEGAL RESTRICTIONS ON HOW WE CAN USE THESE FUNDS.
SO SOMETHING LIKE A CREDIT OR GRANT OR SO AGAIN I'M GOING TO TAKE IT FROM THE TOP DOWN ON THE LEFT SIDE BY CATEGORY.
SO FIRST WE HAVE OUR DEBT SERVICE AND BOND PROCEEDS.
SO THIS IS MEASURE AA AND WW AND OUR PROMISSORY NOTES.
AND YOU CAN SEE MOST OF THAT'S IN THE PROJECT FUND.
BUT WE DO HAVE SOME IN OTHER FUNDS AS WELL. NEXT WE HAVE OUR FUTURE PENSION CONTRIBUTION.
SO THAT'S OUR PENSION TRUST, WHICH WE'VE BEEN DRAWING DOWN.
AND YOU'VE HEARD ME TALK ABOUT A LOT ALREADY.
SO THAT'S GOING TO THAT CATEGORY WILL BE GONE IN 2025 AS WE USE UP THAT REMAINING $72,000.
NEXT WE HAVE DEPOSITS SO WE HAVE $30,000 REMAINING.
I THINK IT WAS THE BAY TRAIL PROJECT WE WERE DOING THERE THAT'S FINALLY BEEN RESOLVED IN 2024.
SO THAT CONDEMNATION DEPOSIT IS GONE. WE JUST HAVE A LITTLE BIT THAT WE'RE WORKING TO RESOLVE THERE.
SO THAT LINE ITEM SHOULD ALSO BE ON IN 2025. NEXT PARK MAINTENANCE AND OPERATIONS.
SO WHEN WE ENCUMBER FUNDS AND WE DO A PURCHASE ORDER, WE'RE TELLING A VENDOR, HEY, WE'RE GOING TO DO OR A CONTRACTOR WE'RE GOING TO DO WORK WITH YOU. THAT MONEY IS THEN OBLIGATED TO THAT VENDOR.
SO THAT'S WHAT MAKES IT A RESTRICTED CATEGORY OF FUND BALANCE.
NEXT WE HAVE CAPITAL PROJECTS AND THAT IS IN THE GENERAL FUND.
AND THEN WE HAVE ALL OF OUR PROJECTS THAT HAVE BEEN APPROVED BY THE BOARD FOR CAPITAL PROJECTS, NOT FOR ODA PROJECTS, BUT FOR CAPITAL PROJECTS.
AND NOW THIS IS THE INTEREST EARNED ON THOSE PERMANENT FUNDS.
NEXT CATEGORY IS OPERATING AGREEMENTS. SO IN THE FIRST QUARTER WE'RE NOT RECEIVING ANY REVENUE FROM PROPERTY TAXES. AND YET WE HAVE THIS OBLIGATION TO PAY OUR EMPLOYEES DUE TO OUR MOUS.
AND SO WE SET ASIDE THE FIRST QUARTER'S PERSONNEL COSTS IN THIS CATEGORY AS AN OPERATING AGREEMENT.
SO THAT'S THE EAST SHORE STATE PARK MONEY THAT WE HAVE AND THE HCP FUNDS THAT WE HAVE.
THOSE ARE NON-MAJOR FUNDS WHERE WE HAVE AN OPERATING AGREEMENT.
WE HAVE TO DO WORK IN A SPECIFIC AREA, SO IT'S RESTRICTED IN THAT WAY.
AND THEN LASTLY, TRAIL OPERATIONS WE HAVE AGAIN IN THE NON-MAJOR FUNDS CATEGORY ARE ZONES OF BENEFIT LIGHTING AND LANDSCAPING ASSESSMENT DISTRICTS AND MEASURE CC AND MEASURE FF, ALL IN THAT CATEGORY. IF I MAY WERE ON IT TWO QUESTIONS ABOUT THIS. ONE IS ENDOWMENT EARNINGS THE $1 MILLION PLUS THERE.
SO WE'RE GROUPING IT. THIS IS HOW IT LOOKS IN OUR AUDITED FINANCIALS.
AND YOU CAN SEE THE INTEREST THAT'S BEING EARNED ON EACH FUND.
AND THEN WE'LL APPROPRIATE SOME OF THAT DURING THE BUDGET PROCESS.
I ASSUME, AGAIN WITH SOME OF THOSE LIKE ZONES OF BENEFIT.
THERE'S IT'S NOT THE ENTIRE AMOUNT THAT'S COMING FROM THE ZONE OF BENEFIT.
IT'S A IT'S BUDGETED SO MUCH AS FOR TRAILS OUT OF THE TOTAL OR? YEAH, I MEAN TRAIL OPERATIONS HOW DO WE ARRIVE AT SOMETHING SPECIFICALLY FOR TRAILS? I THINK TRAIL OPERATIONS IS A CATEGORY THAT WE CAME UP WITH YEARS AGO TO DIFFERENTIATE IT, BECAUSE IT USED TO BE, WELL, SO THE LARGEST CATEGORY IN THERE IS THE TWO COUNTY LIGHTING AND LANDSCAPING ASSESSMENT DISTRICT, WHICH IS CALLED TWO COUNTY TRAILS. RIGHT. SO I THINK WE USE THAT AS KIND OF A CATCH ALL, BUT IT HAS ALL OF THESE OTHER FUNDS THAT ARE NOT JUST TRAILS.
[02:15:04]
SO IT'S LIKE I WOULD MAYBE WE SHOULD CALL THAT TRAIL SLASH OPERATIONS.OKAY. YEAH. SO IT'S NOT NECESSARILY ALL DESTINED TO BE SPENT ON TRAILS OKAY BUT IN THE LLD IT IS ALL FOR TRAILS. YEAH AND THAT TWO COUNTY TRAILS IT'S JUST FOR TRAILS.
WELL, I MEAN, YOU KNOW, THAT SOUNDS LIKE A GOOD IDEA TO IS TO MAYBE EXPAND THE TITLE OUT A OKAY THANK YOU THAT'S ALL. OKAY NOW MOVING DOWN TO THE COMMITTED FUND BALANCE.
SO AGAIN THIS IS LESS RESTRICTED. SO THESE ARE FUNDS THAT HAVE BEEN SET ASIDE BY THE BOARD'S ACTION.
SO FIRST WE HAVE THE FIRE FUELS MANAGEMENT. THERE WAS A FEMA PROJECT BACK IN 2012 THAT REQUIRED MATCHING FUNDS, AND THE BOARD SAID, LET'S SET ASIDE FUNDING FOR FIRE FUELS MANAGEMENT RELATED TO FEMA.
AND SO WE HAVE SOMETIMES USED THAT FUNDING WHEN WE'VE HAD A NEED FOR IT.
LAND ACQUISITION AND DEVELOPMENT $8.2 MILLION.
THAT WAS SET ASIDE IN 2012 AS WELL FOR THAT SPECIFIC PURPOSE OF LAND ACQUISITION.
AND WHEN WE ACCEPT THOSE FUNDS, THE BOARD WILL SAY, OKAY, WE'RE GOING TO SET IT ASIDE FOR THIS SPECIFIC PURPOSE OF LIKE MANAGING THIS LAND, MITIGATING FOR THE DEVELOPERS DEVELOPMENT. AND THEN NEXT WE HAVE THE DUMBARTON QUARRY, COYOTE HILLS TIPPING FEES AND THEN THE BOREL AGRICULTURAL PARK, WHICH YOU HEARD ABOUT EARLIER TODAY.
SO WHEN WE SOLD THAT LAND TO TRUMARK, WE RECEIVED $26.7 MILLION.
AND THE BOARD SET ASIDE THOSE FUNDS TO DEVELOP AND MANAGE THE PARK.
SO THAT'S SITTING IN OUR NON-MAJOR FUNDS FOR THAT PURPOSE.
BUT THEY'RE NOT BOND FUNDS SO THAT THEY'RE A LOWER.
SO THEY'RE IN THE COMMITTED CATEGORY. ANY QUESTIONS THERE? YEAH. WHAT WAS THE CONTEXT IN THE YEAR 2012 THAT LED TO A SET ASIDE OF $8.2 MILLION FOR LAND ACQUISITION? DO YOU KNOW? I SO MY I SHOULD GO BACK AND SEE IF I CAN READ THE REPORT THAT GOES ALONG WITH THE RESOLUTION.
MY BEST GUESS, AND I KNOW I SHOULDN'T GUESS AT THE DAIS, IS THAT WE GASB 54, HAD BEEN PAST MAYBE A COUPLE OF YEARS EARLIER, AND IT SAID THAT IF YOU WANT TO HAVE THESE FUNDS SET ASIDE IN A SPECIFIC WAY, YOU NEED TO GET THE BOARD TO APPROVE IT SO THAT THEY CAN BE COMMITTED.
AND SO WE BROUGHT THIS TO THE BOARD AND SAID, DO YOU WANT US TO SET THESE FUNDS ASIDE? AND THE BOARD SAID, YES. SO I CAN GO BACK AND CONFIRM THAT.
BUT THAT'S THE FACT THAT THEY'RE RIGHT. FIRE FUELS MATCHING AND LAND ACQUISITION, THAT THEY'RE SEQUENTIALLY LIKE THAT MAKES ME THINK WE DID THIS IN A CONCERTED WAY TO SAY, LIKE WE WANT THE BOARD TO OBLIGATE THESE FUNDS.
AND THEY'RE STILL THERE. SO THIS IS HOW IT ENDS UP IN A PRESENTATION ABOUT FUND BALANCES.
YEAH AND SO AGAIN LIKE THESE BALANCES CHANGE FROM YEAR TO YEAR.
AND YOU CAN SEE I SHOULD HAVE SAID THIS IN THE BEGINNING.
BUT THESE ARE ALL UNAUDITED NUMBERS. OUR AUDIT IS STILL UNDERWAY.
SO BY THE TIME WE BRING THIS TO YOU THESE NUMBERS COULD BE SLIGHTLY DIFFERENT.
BUT YEAH, THAT'S THE AMOUNT THAT WAS SET ASIDE AT DECEMBER 31ST.
I ASK IN THE CONTEXT OF THE CAPITAL BUDGET, IN WHICH I REMEMBER THUMBING THROUGH ALL THOSE PAGES AND COMING TO A PAGE THAT HAD LAND ACQUISITION SOME ODD DOLLARS SET ASIDE. AND I WAS PROBING INTO WHERE DID THAT COME FROM? AND ULTIMATELY THERE WAS A LIST OF PROPERTIES THAT ARE POTENTIALLY OUT THERE THAT BY WHICH YOU FOLKS ARRIVED AT.
I THINK IT'S A FIVE YEAR BUDGET OR MORE. I DON'T KNOW HOW FAR OUT THAT WENT OF $30 MILLION.
SO THIS $8 MILLION WOULD BE WITHIN THAT? YES.
[02:20:01]
ALL RIGHT. LASTLY ASSIGNED AND THEN UNASSIGNED FUND BALANCE.SO ASSIGNED IS WHERE FUNDS HAVE BEEN SET ASIDE NOT BY THE BOARD BUT BY MANAGEMENT.
SO HERE ARE THE CATEGORIES THAT ARE SET ASIDE BY MANAGEMENT.
WE HAVE BUDGETED FIRST QUARTER EXPENDITURES. SO $17 MILLION.
SO THAT'S OUR NON PERSONNEL COSTS IN QUARTER ONE WHERE WE'RE NOT GOING TO BE RECEIVING NEW REVENUE.
SO WE WANT TO HAVE SOME MONEY SET ASIDE FOR THAT.
WE HAVE GIFTS FOR MAINTENANCE AND IMPROVEMENTS OR THEY GOT CUT OFF.
AND SO WE HAVE A GIFT FUND THAT HAS DONATIONS THAT WE RECEIVED.
FOR EXAMPLE, IVAN DIXON FUNDS THE HENRY TILDEN FUND AND FOSTER.
THAT'S ABOVE WHAT WE ARE COVERED BY INSURANCE.
AND WE HAVE SOME FUNDS SET ASIDE JUST IN CASE THAT'S NEEDED.
AND WE HAVE HAD TO DRAW DOWN ON THAT IN THE PAST.
SO WE NOW NEED TO REPLENISH THAT. SO IT'S SUPPOSED TO BE AT $2.2 MILLION, BUT WE USED IT THIS YEAR, SO WE NEED TO REPLENISH THAT AMOUNT. YEAH I LIKE TO POINT OUT THAT'S THE FAULT OF OUR ALAMEDA REPRESENTATIVES [LAUGHTER].
ALL RIGHT THAT BRINGS US TO OUR UNASSIGNED FUND BALANCE.
SO YOU ALSO MAY RECALL THAT WE HAVE AN UNASSIGNED FUND BALANCE POLICY.
WE BROUGHT IT TO THE FINANCE COMMITTEE BACK IN 2024.
SO LOOKING AT, YOU KNOW, WHAT ARE THE POSSIBLE CONTINGENCIES THAT WE MIGHT FACE.
SO YOU SEE $95.2 MILLION THERE. WE HAVE. SO 32% OF REVENUE OF OUR REVENUE BUDGET IS $72.2 MILLION. AND SO $23 MILLION IS THE DIFFERENCE.
AND SO YOU'RE THINKING GREAT. YOU GUYS FOLLOWING ME SO FAR? DENNIS IS LOOKING AT ME QUIZZICALLY. SO THE UNASSIGNED FUND BALANCE AMOUNT I'M SHOWING YOU HERE IS JUST THE AMOUNT OF FUND BALANCE IN THE GENERAL FUND.
IS THAT THE EQUIVALENT OF THE RESERVE THAT WE ALWAYS BUDGET FOR AT 37%? SO 32%, 32% OF ANNUAL REVENUES IS $72.2 MILLION.
WHAT WE HAVE RIGHT THERE IS $95.2 MILLION. SO THAT IS $23 MILLION MORE.
AND SO WHAT HAPPENS WE GO THROUGH THIS CALCULATION OF WHAT IS 32%.
THAT'S THE AMOUNT WE NEED TO SET ASIDE. AND SO AS OF DECEMBER 31ST WE HAD $95.2.
WE THEN HAVE TO SAY ALL RIGHT WE HAVE TO REPLENISH THE $2.2 MILLION FOR OUR ELECTION COSTS.
SO THAT LEAVES US WITH $8.6 MILLION. SO $14.4 MILLION.
SO THEN WE HAVE $2 MILLION FOR THE ELECTION RESERVES. SO THAT GIVES US $6.6 MILLION OF OUR BALANCE.
WE HAVE. SO TYPICALLY WE WOULD GO BRING THIS TO THE BOARD AS PART OF OUR BUDGET PROCESS.
AND WE SAY WE WANT TO APPROPRIATE THIS FOR THESE PROJECTS.
AND SO THAT MAY HAPPEN. WE ALSO HAVE SEVERAL PROJECTS THAT ARE UNDERWAY RIGHT NOW WHICH MAY COME TO THE BOARD BEFORE WE GET TO THE BUDGET PROCESS. ONE THAT I'M BRINGING FORWARD IS OUR ERP REPLACEMENT.
WE'RE HOPING TO BRING THAT IN OCTOBER. AND THAT IS GOING TO REQUIRE A LARGE SUM OF MONEY.
AND THEN I UNDERSTAND THAT PERALTA OAKS NORTH IS GOING TO BE REQUIRING ADDITIONAL FUNDS AS WELL.
SO THIS BRINGS. IS THAT A WAY OF TELLING US IT'S OVER BUDGET? [LAUGHTER]. YEAH, YEAH IT'S A WAY OF SORT OF PREPARING YOU FOR THE BUDGET PROCESS, WHICH IS GOING TO BE IT'S GOING TO BE A LEANER BUDGET PROCESS THIS YEAR.
SO WE HAVE LESS TO WORK WITH. WE HAVE LOWER PROPERTY TAX REVENUES.
AND IN PAST WE'VE BEEN VERY FORTUNATE TO HAVE THIS UNASSIGNED AMOUNT ABOVE THE 32%.
[02:25:02]
WE WERE ABLE TO APPROPRIATE THAT TO A LOT OF CAPITAL PROJECTS, AND THEY'RE JUST NOT GOING TO BE AS MUCH, IF ANYTHING, AVAILABLE THIS YEAR. OH, AND WE USED TO LOVE THAT, RIGHT? WE'D GET IN THE MIDDLE OF THE YEAR. HEY, HERE'S ANOTHER ONE YEAR, $20 MILLION, ANOTHER YEAR, $10 MILLION OR ANOTHER YEAR IN BETWEEN. AND WE LEARNED THAT THAT WAS A RESULT OF OVERLY CONSERVATIVE BUDGETING AGAINST TAX REVENUES AND NOT ACCOUNTING FOR VACANCY RATES.SO WE WEREN'T SPENDING MONEY ON PERSONNEL COSTS TO THE EXTENT BUDGETED BECAUSE OF VACANCY.
SO WE USED TO HAVE THIS MID-YEAR SURPLUS, AND WE HAVEN'T BEEN EXPECTING THAT AS MUCH LATELY.
YES AND I KNOW OF TWO PROJECTS THAT NEED MONEY THAT ARE COMING FORWARD, MOST LIKELY BEFORE THE BUDGET PROCESS.
OKAY. I KNOW OF SEVERAL, IF YOU WANT TO ASK [LAUGHTER] YES.
YOU KNOW, IT'S JUST WE'RE IT'S PART OF THE DIFFICULTY OF WHAT WE DO IS.
AND ALL OF US HAVE THIS HAPPENING IN OUR WARDS.
THERE ARE THINGS THAT COME TO OPPORTUNITIES THAT ARISE.
IT WASN'T FIVE YEARS AGO, OR SOMETHING IS IN A WORSE CONDITION THAN WE THOUGHT IT WAS ONCE WE STARTED RIPPING THE WALLS OUT, SO TO SPEAK, YOU KNOW? AND SO THAT KIND OF PROBLEM IS WHAT AT LEAST MOTIVATES ME TO PROBE INTO HOW WE DEAL WITH THOSE KIND OF ISSUES, WHERE, AS THE GENERAL MANAGER WILL POINT OUT, WE HAVE OUR PRIORITIES AND WE'VE SET OUR PRIORITIES. AND THEN THERE ARE THESE NEW THINGS THAT COME UP, YOU KNOW, WHERE ARE WE GOING TO TAKE FROM HERE AND PUT OVER HERE? CORRECT. SO PART OF WHAT I'M PROBING IS WHAT IS OTHERWISE AVAILABLE TO THIS BOARD THAT MAYBE WASN'T AVAILABLE. YOU KNOW, WHEN WE SET OUR PRIORITIES JUST A COUPLE OF MONTHS AGO OR WASN'T IN FRONT OF US JUST A COUPLE OF MONTHS AGO.
AND SO WE'RE ALL GRAPPLING WITH THAT KIND OF STUFF.
YEAH. AND I'M LEARNING MORE. AND THIS IS I SHOULD LET YOU FINISH.
BUT THIS IS OKAY, GOOD YEAH THAT WAS MY LAST AND I'LL DEFER TO DENNIS BEFORE I COME BACK TO IT.
DENNIS? YEP THANK YOU GREAT REPORT VERY INTERESTING OKAY. WE ALL THOUGHT WE HAD SO MUCH MONEY, AND IT'S ALL TAKEN HERE SORRY. IT'S ALL BEEN ACCOUNTED FOR. DIRECTOR? NO, I THINK THIS WAS. I'M GLAD YOU HAD THE FORESIGHT TO ASK FOR THIS.
YOU KNOW WHEN YOU DID AND NOW WE CAN SEE IT. AND IT HELPS US TO UNDERSTAND.
AND WHOEVER ELSE IS WATCHING TO, YOU KNOW. IT'S A IT HELPS.
IT DOES HELP US A LOT THANK YOU. ALL RIGHT YOU'RE WELCOME YEAH I THINK THE GENESIS WAS OF MY BECOMING AWARE OVER TIME AND IN JANUARY IN PARTICULAR, OF HOW WE HAVE MULTIPLE RESERVE FUNDS. YOU KNOW? AND GEE WHIZ, DO WE REALLY UNDERSTAND THIS? WE UNDERSTAND THE MAJOR CONTINGENCY FUND THAT WE ARE TOLD BASED ON INDUSTRY PRACTICE.
WE HAVE TO SET ASIDE AND IT'S SIGNIFICANT. AND THAT'S JUST THERE AS A CONTINGENCY RESERVE.
AND THEN THERE'S A BUNCH OF OTHERS AND THEY FALL INTO THE CATEGORY OF THESE FUND BALANCES THAT TURN INTO RESERVES. FROM OUR VANTAGE POINT OF SOMETIMES ASSIGN, SOMETIMES UNASSIGN.
SO THIS IS REALLY HELPFUL AND FALLS WITHIN THAT CONTEXT OF, YOU KNOW, HOW MANAGEMENT FINDS WAYS TO FILL HOLES IN OUR BUDGET BOTH FOR EMERGENCIES, CONTINGENCIES AND THINGS THAT JUST OPPORTUNITIES THAT JUST PRESENT ALL OF A SUDDEN.
SO I REALLY APPRECIATE YOUR GETTING INTO THIS LEVEL OF DETAIL.
THERE'S A LOT OF WORK THAT WENT INTO THIS REPORT AND I REALLY APPRECIATE IT.
GOOD ALL RIGHT YOU'RE WELCOME ANY PUBLIC COMMENT? NO PUBLIC COMMENT. ALL RIGHT.
WE'RE NOT SEEING ANY FURTHER BOARD COMMENT ON THIS ISSUE? OKAY. SO I THINK THAT BRINGS US TO ANNOUNCEMENTS ITEM 6
[Announcements]
BEFORE WE ADJOURN. ARE THERE ANNOUNCEMENTS FROM STAFF AROUND THE ROOM?[02:30:04]
I NEGLECTED TO MENTION I'D BE DOING THIS, BUT WE DO HAVE A NEW STAFF MEMBER.I THOUGHT I'D INTRODUCE. PLEASE. BRAND [LAUGHTER].
YEAH, WE'RE VERY, VERY HAPPY TO HAVE HER HERE.
SO YEAH, SHE'S NOT SHY I'LL LET HER INTRODUCE HERSELF.
WE INSIST ON. NO NOW SHE'S LOOKING SHY [LAUGHTER]. YEAH, YEAH.
MAKING YOU COME AND INTRODUCE YOURSELF [LAUGHTER]. THANK YOU.
I'M USUALLY, LIKE, AWARE THAT SHE'S GOING TO INTRODUCE ME [LAUGHTER] THIS SURPRISED ME.
WOULDN'T BE AS MUCH FUN [LAUGHTER]. HI BRANDY OLIVERA, BUDGET MANAGER.
OVER PAYROLL AND BUDGET. YEAH SO THE 16TH OF THIS MONTH WILL BE FOUR MONTHS, SO IT'S COMING UP.
YOU DON'T WANT TO BACKGROUND OR ANYTHING, RIGHT? [LAUGHTER]. WANT TO SAY, LIKE A LITTLE BIT ABOUT YOUR BACKGROUND? JUST WORKING IN GOVERNMENTAL BUDGETING, PAYROLL AND BENEFITS AT THE STATE JUDICIAL BRANCH FOR A NUMBER OF YEARS PRIOR TO THAT, I WORKED AT THE CONTRA COSTA COUNTY SUPERIOR COURT, SO I DID A FEW STINTS IN PUBLIC SECTOR.
WELL, THIS THIS IS WAY MORE FUN. YES IT'S SO FAR IT REALLY, REALLY IS.
YEAH. SO THANK YOU. CONTRA COSTA SUPERIOR IS NEAR AND DEAR TO ME IN MY CAREER.
BUT THIS I AGREE, THIS IS FAR MUCH MORE FUN. MUCH MORE FUN AND I'M IN SAN RAMON.
YEAH. ALL RIGHT. THANK YOU WELCOME. THANK YOU ALL RIGHT IF NO OTHER ANNOUNCEMENTS? THEN WE WILL ADJOURN AT 1:45 PM THANK YOU. THANK YOU FOR ALL THE REPORTS AND ALL THE WORK THAT GOES INTO THESE
PRESENTATIONS.
* This transcript was compiled from uncorrected Closed Captioning.