Good afternoon. Call the special meeting of the Marysville City Council to order. Madam Clerk, roll call, please. Council Member Rollins. Here. Council Member Gilchrist. Here. Council Member Hudson. Here. Vice Mayor Butta-Cavoli. Here. And Mayor Branscombe. Yes, ma'am, and let's pledge the flag. Madam Clerk, any public comment? No, Mayor. Thank you, ma'am. We move to the only item on the agenda, and it is a discussion action item. It is, number one, is adopt the City of Marysville's fiscal year 2425 budget and appropriation limits. Recommendation is to pass a motion to approve the fiscal year 25-26 budget. Read the bold type above that. It says 24-25. I will go back and start this over again. The item before the council is to adopt the City of Marysville's fiscal year 25. So that's an amendment to the agenda. Budget and appropriation limits. And the recommendation is to pass a motion to approve the fiscal year 25-26 budget, adopt an appropriate budget resolution, approve the corresponding appropriation limits, and four, adopt an appropriately numbered appropriation limits resolution. And we have as our speaker, our presenter, Ms. Anissa Viong. How do you pronounce it? What's the proper pronunciation of your last name? Viong. Viong. I did it right. Thank you. Our esteemed finance director, it's all yours. Thank you. first page. Reno Club, Dino's, down on the left. I used to hang out there, the Brunswick. Please. Good afternoon, council, mayor, vice mayor, council members. Thank you for allowing me to present to you today. Okay. Hold on. What do I have to do? I don't want to eat it. Okay, there we go. Great. Thank you for allowing me to present to you today. First and foremost, I'd like to begin and say I apologize for the budget being so late this year, and I hope that next year will be a much timelier, easier process. So before I begin, I just want to say this is for the City of Marysville's fiscal year 25-26 budget. So we'll proceed with the presentation. So on the agenda that we have today, we're going to have the overviews of revenues, expenses, departmental summary of expenses, capital improvement projects, a closing statement, and any questions that you may have. I hope that I answer a majority of them as we proceed. So we're going to go over the major revenue sources. This is all through the general fund. So a bulk majority of revenue sources come from taxes such as property taxes, sales taxes, Measure C, and the VLFAA. Property tax is approximately $1.5 million. Sales tax is $2.5 million. Measure C is $3.7 million. And VLFAA is approximately $1.3 million. That gives you a rough balance of $11.3 million. I'm not going to go through every single one of them because you do have them in front of you, but the major ones that you are going to see are grant funds, which is $7.7 million. That's various funds received from the federal government as well as the state of California. And then other than that, you have your license and permits. License and permits, again, business license, construction permits, encroachment fees. Yes, how about that? Okay. Are we okay now? Both of them? Okay. Okay. How about now? Okay, sorry. Okay, so we have other revenues, lease revenue, charges for service, fines, forfeitures, and penalties. Again, a lot of them are comprised of business license, construction permits, the Hard Rock Casino annual fee that they give, it expires in 2034. It's about approximately $285,000 a year. And then you also have charges for service, such as the strike team, the police department contract with the Marysville Joint Unified School District, and the D10 Howlett. Fines, again, there are code enforcement, vehicle code, parking citation. So all of that gives you your giant general fund revenues, and this is the overview of it in a pie chart. Next we have our major expenditure categories. So you have your general fund expenses. You have your salary and wages, which is about $8.3 million. A majority of that is attributable to 84% of the salary and wage, thank you, being attributed to police, fire, and public works. Of the entire expenditures in aggregate, approximately 31% of the $22 million in expenses is salary and wage for public safety. You have your operations and maintenance categories as well. So again, a bulk majority of your general fund expenses are salary and wages. We also have capital improvement projects that are upcoming. A majority of that, again, is CDBG and the Yuba Water Agency's grant for the 17th and Hall Pump Station. And then you have your operations and maintenance, debt service. The debt service is comprised of $1.5 million in principal and $900,000 in interest. There are various outstanding debt obligations for the city. You have your 2019 pension obligation bonds, your CREBS, which is the carport, the solar panels on top of the carport, and then you also have various vehicle leases for public safety. So next we have general services. Now I lumped a lot of the general services together because it's quite cumbersome to go through every single one of them. But in general, you have about a million dollars of insurance premiums. And as insurance rates continue to skyrocket, you're looking at anywhere between 20 and 30% annually. As of right now, 50% of our general services is for insurance. So it's liability, auto, casualty, property insurance is a really big one that we just did. And then the others are legal, technology, and other associated fees that the city collects. Question. Yes. I don't know if you said it and I didn't hear it, but in the debt service, that's the bond payments? Like the pension obligation bonds? Well, yes. Yes. Okay. Again, the 2019, it's called a COP or a Certificate of Participation, which allows the city to be involved in a bonding process or outstanding debt that we might have. And then you also have, again, your CREBS, which is the carport solar panels that are on top. We do receive a federal subsidy to offset a portion of that, which is inclusive of, it's just a smaller percentage of the revenue side. It was very nominal, so I didn't think it was worth mentioning. And then we have various leases for public safety. So we have a replacement vehicle program unofficially that the city has had currently. And we will be extending that because we're extending the useful life of police and fire vehicles. So then we have a departmental overview. We're going to go over the major departments that are within the city of Marysville. There is a subsection for public works. for fleet management. It's technically comprised of fire, police, and public works vehicles, but I categorized it under public works. So we have the city of Marysville. We have an organizational chart. The reason that I wanted to focus on this was because this is what the city manager, he's responsible for all of the management, and then the subsequent managers are responsible for their own staff. This is a general overview of what the management team of the city looks like. The city's manager's budget, he had an approximate 16.7% reduction in O&M. There was nothing out of the ordinary just because it's the city manager and one other staff member. The next department that we have is finance. The finance tech position was recently filled. It was to promote a better customer service that we have to the front. The new candidate is bilingual, and I thought it was really important to better serve the community if we can communicate with them. Also to offset a lot of the bottleneck that we have in our own office regarding a lot of the payment processing, business license, things of that nature. Also inclusive in finance is the liability insurances that the city has. I've kind of regrouped everything that I'm responsible for and I've recategorized them under finance. So again, we have liability, casualty, fidelity, auto insurance, also property. Insurance is all for our external property and assets that the city owns, especially property in the open. And then on top of that, we also have health insurance premiums. You'll see this as a trend through the entire presentation. Health insurance premiums have gone up. Again, similar to the rest of insurance, you're looking at 15% to 20%, albeit sometimes you're seeing upwards of 25% and 30%. So you'll see health insurance premiums as a factor in all the departments just because those costs... are continuously increasing. And then once we get to a few other departments, you'll kind of see that the cost is a little skewed because of the percentages that the city pays for certain employees and the percentages it pays for others. Again, the other thing that we want to talk about for finance is the information technology management. That has to do, the city's servers are about 15 years old. And so we're doing a massive server replacement plan. So we're getting a new current server and then we're getting a backup server for it. And then the police is also getting a separate server on top of that. So I did receive quotes from it. That bottom line increases about $100,000 just for the servers alone. And the servers is also going to help us promote better cybersecurity because we'll be able to update a lot of our firewalls and things of that nature. And better cybersecurity also means that our liability insurance will go down next year once we have proven that we were able to implement a lot of these safety measurements. So we'll move on to the police department. So we have three vacancies in the police department, which is approximately, it yields to 350,000. Sure. IT, what is our Internet connectivity? I believe it's Comcast. We just have one pathway? We don't have a backup? No. Vance, question to you, sir. Yes. How mission critical is the internet to what the department does? Tests vary. I mean, we use it every day. Just a thought in passing to management. Have a second, have a backup. This is all mission critical. and an automatic changeover. It's easily done. I don't know who does it here, but I've been in many circumstances where that's absolutely required because of the importance of the Internet, public safety, for example. Did you have a comment, sir? Yeah, I believe we have a fiber optic line directly over to the county sheriff that provides additional connectivity, and I... I believe we also have redundant systems. Sorry. A redundancy through the county sheriffs, is that what you said, Jim? I'm not sure about that. I don't know how the IT connects with that. If we don't, we certainly should, and we can look into that, Mayor. It's something that we can look into as we progress with updating everything with our servers. Sorry. It's something that we can definitely look into as we progress with the system or citywide, rather, updates to IT and just general technology. I hope that answers. And while you're looking at IT, look at this. What would you like? Everything. Okay. We can certainly discuss that, too. Thank you. Thank you for taking the question. So we're going to go back to the police department. Again, we have three vacancies. We have a sergeant, a patrol officer, and a dispatcher. I did consolidate police for the sake of time. So within police, you have police, dispatch, animal control, and the sworn and non-sworn officers. The police department is requesting two new positions, a patrol officer and a community service officer. The community service officer and the patrol officer combined are approximately $215,000. Overall, the police department has seen a 6.85% increase from the prior year, and this is with funding for all vacancies and the two additional police officers. Again, like I've said, you'll see health insurance premiums increasing. It will be a trend in this presentation. And then ballistic vests and professional development are two new items that the police department is requesting this year. The ballistic vests are partially reimbursable by the federal government. Professional development, again, it's something that there are programs and trainings that our Joint Insurance Fund offers, and it also reduces liability in the long run if our officers are appropriately trained. as per insurance needs. So the next department that we have is the Marysville Fire Department. We have one vacancy in the fire department that costs about $120,000. In aggregate, there's about a 5.6% increase for the fire department from fiscal 25 to 26. Again, health insurance, specifically for the fire department, increased about 15 to 25%, depending on a kind of family plan or whatever their elected insurance coverage was. And additionally to the fire department is the Yuba County Sheriff's Office Dispatch Service that was authorized and adopted by resolution, I think, at the last council meeting, and that is $50,209. That is also factored into this fiscal year budget. So the next department that we have is community development. you will see that there was a fully funding of an administrative clerical person. The employee is really going to be in charge of helping out and supporting the community development department. And then it's also I consolidated community development with the building inspector just for the sake of time. The building inspector will decrease our external consulting fees that we have with Four Leaf by about $100,000. And then for the first year, obviously, with new employees comes with personnel-associated costs. So we should be seeing that cost neutral either towards the end of this year or into the next fiscal year. The additional bottom line increase was about 15%. A smaller department with a little bit of a jump will show a higher percentage, so the ratios are represented a little differently. Again, that's a $40,000 increase from a part-time to a full-time employee for community development. So here we have Public Works. Again, Public Works I did consolidate with Fleet Management. And Fleet Management plus Public Works has two vacancies. And for the vacancies in Public Works specifically, obviously we don't currently have a Public Works director. We're in the recruitment process, hopefully, for it. And then there's also a vacancy in the maintenance. There's one vacancy there. And the total vacancies costs for both of those positions is $250,000. And then the other thing is operational costs are offset by grant funds. So the Yuba Water Agency is offsetting some of our Ellis Lake water quality treatment costs, which is about $40,000. And of that $40,000, we'll be receiving towards the end of the fiscal year. So we have fleet management. Fleet management is they are reducing our costs in the city over time by having the routine maintenance brought in-house. And so because of the external costs that we have associated with that routine maintenance, we believe it would be cost neutral to have that higher and additional mechanic for fleet management, one who handles a lot of the... heavy trucks for fire department, and then the other employee will be handling all of the more passenger vehicles, police vehicles, things of that nature. It's about a $120,000 increase for the mechanic, which is inclusive of all health insurance, all fringe benefits, things of that nature. That's on the higher end. When we do budget these things, we do budget for them on a family coverage, things of that nature. It just helps us be a little bit more conservative. So of that, it should be offsetting... the O&M side of the maintenance for vehicles. So we're looking about a $40,000 reduction in PD, or the police department rather, a $20,000 reduction in public works, and a $15,000 reduction in the fire department, which yields to about $75,000 in the first year. And then as time goes on and we build the employee skills and ability, we'll be able to kind of see that long-term cost. So the next thing we have is our capital improvement projects. Again, we've discussed these in previous council meetings, but they are for, the first one is for various city hall improvements that will be funded through the use of the American Rescue Plan dollars. And it's something that was previously funded to the city, I believe in 2021. It's been held in reserve and will be drawn down upon to complete these projects in the current fiscal year. The other thing we have is CDBG phase one and two. Both of those projects are on a reimbursable basis. So the city has to front those costs. And then when we submit through HCD for that reimbursement, we recoup all the costs that we have paid for the road projects. So then we also have 17th and Hall, which I believe is the pump station repair. The Yuba Water Agency gave us a $700,000 grant And again, that is something that will be utilized to, those funds will be utilized for this replacement or repair. So the closing statements, that's fine. The closing statements are we do have fully funded all of the vacancies, which now this budget is a true representation of how much it costs to run the city at full capacity. Thank you. We do have the five new positions, and the costs that we are incurring in fiscal year 26 will be proven to reduce expenditures in the coming years. Yes. If I may, fully funded all vacancies. Now, when the last time I went over this, and we were doing the smaller groups, the The public works director position was not fully funded. The public works director was fully funded. No, it was reallocated. It wasn't on the last document I saw. It was? It was not. It was fully funded in the... It was not on the last document I saw. And now this is a surprise. I'm sorry if there was a surprise. However, the... spreadsheet represent... I'm addressing the city manager. Why do we have these meetings and we're assured in these meetings that we're looking at numbers that are real and that we're going to be discussing at this meeting and now I see the public works director is fully funded. So I believe what Our finance director was trying to communicate is that the public works director is not funded fully by the general fund, and it is funded by both the street fund and the sewer enterprise fund partially. Yes. But it is funded in its entirety. Well, then I was misled, and I'm very unhappy with the process. That was something you could have shared. We had a direct conversation about the public works director. And if it's going to be come in through another angle, that is something that you should have been up front about. I believe the question you asked me, Mayor, was to consider whether I wanted to fund a public works director. And I gave you my opinion on that. We were black and white on that. We're going to talk more about this when we go forward. And we have... Five new positions. Are they new positions or are they filling existing slots? They're new positions, Mayor. New positions. Brand new positions. Yes. And would you please detail those? Sure. Let me go back in my notes. The full positions were the CSO, the additional police officer, the... The building inspector and give me one second. The new mechanic. So the police department. Police officer, CSO, new mechanic, building inspector, and what was the last one? They're listed in the individual slides. I took the dispatcher out. I'll hold my own. Full-time administrative support from HAPA. So I guess I consider that a fifth position, which was it went from part-time to full-time. Here. Full-time administrative support. It went from part-time to full-time. So I consider that the fifth position. I will make my closing comments at the proper time. Thank you. Ultimately, we do have grant funds that are offsetting the general fund expenditures. I have gone over that in our capital improvement plan. And then again, I just want to address the fact that the market volatility will dictate our revenues as this fiscal year goes forward. So it will be our revenues are dependent on many factors, but especially sales tax, use tax, things of that nature. And then we also have federal policies will affect future availability and opportunities for grant funds. Again, that's going to be indicative of how we choose to offset the general fund with future grants. And again, like I said, I did want to mention that the trend of all insurance costs, health insurance, medical insurance, property, things of that nature, all health insurance costs are trending up, and annually they've increased significantly. on average about 20-30%. Are there any questions? I'll let others go first. I'm sorry, Brad, your mic is not on. Okay. Thank you. Sorry about that. Melissa, you mentioned in our two-in-two meetings that our consultant HDL had a prediction. Remind me what that was about the possible downturn in sales tax, if there is any sort of algorithm that's kind of set. So sales tax across the state is declining. It's declining about 2% to 3%. but that's in aggregate statewide. Marysville is pretty healthy in terms of sales tax revenue. We have not seen, or H-Dale is not projecting, and we've already increased from first quarter of 2024 to first quarter of 2025. We've already seen a 15% increase in sales tax. I need that reminder. Thank you. That's all I have. Thank you. Mr. Vice Mayor? I just want to... I think I heard you say it somewhere in there, but I'm deaf. So where does it, after this budget, where does that leave us with what percent of reserves? So our reserve right now is we're about sitting, I wish I had that in front of me, we're about sitting at 48% once we take out the American Rescue Plan, which is in LAFE. And so once I make that disbursement, we'll have a true balance of about, And then I know that we were discussing what we would like to do. I did just reinvest $1.4 million this morning. The bid came in and we're set to receive about $60,000 of interest income from our U.S. Treasury bonds. So you didn't quite answer. Sorry. After this budget. Figuring this budget, what does that leave us with reserves? So after this budget, we'll be sitting at about 35%, 38%. So we can go over that. I can set another meeting that we had similarly before to go over that in depth again. No, that's fine with me. I just wanted to know where that was. And then on this closing statement, I just want to make sure. We're fully funding... all the vacancies, and we're fully funding five new positions. Yes. Is what you've got here, correct? Yes. Okay. That's all I have. Thank you. Any other questions or comments? When we have private meetings, please stay at the podium. When we have private meetings... and a clear discussion on items. And in black and white in front of me, there is no new public works director. And now I'm told three left turns and a right turn, and all of a sudden there's a public works director funded different ways. I consider this a major breach of trust. Major breach of trust. No. Wouldn't. Right now, the revenue line for the city of Marysville, the dominant features on the revenue line are sales tax. The sales tax is clearly in decline. There is a clearly defined decline curve. We don't know exactly what it's going to be for the next quarter. These numbers include accruals. We have modified accrual basis accounting. And so I think three or four million dollars of the current year revenues are still out there and yet to be fully determined. Am I correct? Yes. And there's a big question mark about the major component of those dollars. And I believe to fully fund every position and then add five new positions I don't recall the discussion of all, I recall a couple, but not five, is irresponsible. Irresponsible. And I will not vote to support this budget because of that. I think it needs another look. For very good reasons. And have a very clear, in fact, maybe we should do it in open session so we can have a very clear discussion of the detailed items. Because to see no new public works director and then to be told now that by hook and by crook, oh, there is one, major breach of trust. That's my comment and my suggestion going forward. Yes, sir. Not disrespecting anything you said, but I just want to say that In our meeting that we had, everything was shown as funded. And Brad and I were in meetings together. We supported funding all the positions. And I'm just saying that they were presented to us. I don't know. It wasn't there, obviously, with you. But I just wanted you to know they were presented to us. Thank you, Bruce. I thought I was paying attention, and I didn't see that. And I'm not questioning your take on what you saw, but I have a lot of confidence in my own take and understanding of what I saw. And I was viewing this with Ms. Rollins, and she has deep experience in finance as well as I do. Marjorie, do you have any comment? My comment is the same. I thought we discussed it that we did not fill the position at this time. I didn't see it. I wish I had my notes from that meeting. I do not. To see if I could see it. But at that time, I didn't see it. I wish I had those budgets with me. Can you move the microphone closer? I do not have it with me. to see what you presented. But as I recall, we discussed it and said, no, we weren't in favor of going that way. The exact comment was, let's see how we do without one for a while, particularly with the uncertain revenue picture. And also that pertained to the additional new police officer. Do you recall discussion of an addition to new CSO? I do recall that position, and regarding the additional police officer, Anisha went into further detail about what funding pops or something. The selfie fund. Selfie fund is going to fund that position, the additional police officer. That's temporary money. Yeah. And again, I'm black and white on the public works director. The rest of it I do recall that conversation, and my caution was to go slowly in the hiring because if we have really difficult news over these next three months, and you're still getting your arms fully around all of the financial information. I'm not questioning your confidence because you are very confident. It's just that this is new, and we do not know. It would be – I think there would be some level of risk associated with putting – a lot of confidence in what's going to occur between now and September 30 on the accruals, particularly given the trend line on the sales tax revenue. So I'll just hold my own on the public works director. I feel major breach of trust. It was a clear discussion. Chair, question. Yes, sir. I understand where you're going. You're not suggesting, though, to not fund public works director. You're saying to not fund one of the other positions. No, that's exactly what I'm saying. Let's see. I don't want to go into a lot of conversation about the former in and out, but let's see how we do in the near term. without having to fill that position. Chair, if you may. Yes, sir. As far as I know, we are in interviews for that position right now. And thank you, Bruce, for standing. We heard the same thing in that. And I would just like to say, in the six years that I've been on this council, when Bruce and I started here, we were in a dire position where we're at. And now here we are, even With HDL's prediction statewide of sales tax drop does not definitively say exactly what may or may not happen within the city of Marysville. We still sit in a reserve of 38%. When I was here six years ago, I mean, we barely had a reserve of 10. And so, oh, it wasn't even 1%. I added a zero. I'm sorry. So that being said, I feel as comfortable as the way I was presenting myself with Bruce in the same room that Salary savings or not, this is appropriate. I mean, I think we need more officers on the street. I think we need more CSOs. I think we need, if we could do that with them, the budget that is presented. And, yeah, that's 38% is what we wanted when we sat down. And what year did we say we wanted that, Bruce? That was at least five years ago that we wanted 30%. And we've sustained that. I think we can still sustain that even with the predictions of what we've got out here. With respect to what you're saying, Mayor, I get what you're saying on how it was presented to you today, and I can see your eye right over that, and I respect that. But that being said, I like what was presented, and I'm willing to go forward with this. So those are my comments. I respect that. I respect that, and I respect everybody's position around the table on the council. Once you have... one key element that seemed crystal clear to me in our meetings. And then I find out by hook and by crook, well, it's there and here. That's a major breach of trust. It could have been said in those terms there, and we could have had that discussion in private, but no. I'm very disappointed, and it makes me worry about What else is there by hook and by crook? Yes, sir. Stuart, go ahead. So I'm confused because before I attended the two pre-budget meetings with our budget director, our finance director, and our city manager, I created a list of questions I wanted to make certain occurred. And the second item on my list was to make sure that within our budget, we, without hiring anyone, fully funded the positions that are required to run our city the best possible way for economic success. And it was answered quite simply, yes. I didn't realize that the budget process is when we make decisions, if it's in the budget and it's working within this budget and it's balanced, and to not have a public works director while we're interviewing for one is surprising to me. And I think this is a no deal. This is a nothing, actually, and maybe a misunderstanding in semantics. No, if it were semantics, I would be happy to yield on my comments. It's not. Okay, but it has happened before. I have a question regarding the reserve. What is the required percentage that we should have in reserve? I'll answer that. Okay. Council Member Hudson was mistaken, slightly. When I got here five years ago, roughly, the bar was 20%. That is self-imposed. There's no law regarding that. We bumped that up to 30% when we were able to achieve 30%. We've been able to maintain 30%, significantly more than 30% each year. No law, but that is the increased goal that we set after the first strategic planning meeting we had. I was going to say I want to respond to that. That's exactly true. We had put into place that we have a minimum of 20%. And at some point, when the appropriate time, I would like to readdress that to get it to 30. But you're absolutely correct. It was 20%. Thank you for the clarification. This and education were required. So I wanted to know if there was such a requirement. So that helps make a decision in my mind. Thank you. Any more questions or comments? What's the will of council? I move to approve. I will second. Moved and seconded. Roll call vote, please. Council Member Rollins? Aye. Council Member Gilchrist? Yes. Approved. Council Member Hudson? Yes. Vice Mayor Butta-Caboli? Yes. And Mayor Branscombe. No. What was the vote? Three to two. The motion is approved. I will note that the two people, well, we'll leave that alone. Let's see. The next regular meeting or whatever there's to be said here will be Tuesday, July 1st. 6 p.m. There will be a special meeting in advance of that at 5, I think. We're adjourned.