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HomeMy WebLinkAbout2025-08-19 Finance Committee Summary MinutesFINANCE COMMITTEE SUMMARY MINUTES Page 1 of 15 Regular Meeting August 19, 2025 The Finance Committee of the City of Palo Alto met on this date in the Community Meeting Room and by virtual teleconference at 5:30 P.M. Present In-Person: Burt (Chair), Lythcott-Haims, Reckdahl Absent: None Public Comment None Agenda Items 1. Recommendation to the City Council to approve FY 2026 budget amendments to reduce appropriations by approximately $6.2 million. CEQA Status - Not a Project. Lauren Lai, Chief Financial Officer, stated that Council directed staff to retain reserves and reduce the General Fund budget by $6 million with at least $2 million ongoing to prepare for economic uncertainty. City departments reviewed their operations, prioritized core services and projects that were underway, considered how to change the way we deliver services while minimizing impacts, and focused on vacant positions to the extent possible. Staff sent a memo to the Committee on the capital improvement projects that were identified to be reduced or delayed. CFO Lai acknowledged that delaying capital projects could result in future cost escalation. In response to previous discussions about reducing the use of consultants, master contracts for on-call services have been moving toward contracts with annual appropriations to enable staff to have better control over expenses, especially for information technology, planning, and transportation consultants. Staff’s recommendation was to reduce FY 2026 appropriations by approximately $6.2 million (about 2 percent of the General Fund budget), of which $3.4 million will be maintained in FY 2027 and FY 2028. Staff will bring back any refinements for true-up at FY 2026 midyear. A table was displayed of the recommended $3 million reduction in General Fund operations, of which $2.4 million will be ongoing. The Administrative Services Department recommended SUMMARY MINUTES Page 2 of 15 Finance Committee Meeting Summary Minutes: 08/19/25 defunding 1 Division Manager, which in FY 2026 will be the vacant Revenue Collections Manager; staff will evaluate the organization and service delivery to see what this may entail in FY 2027 and FY 2028. For the City Attorney’s Office, a $25,000 reduction was recommended in general expenses related to support commonly provided in a variety of contracts, which could be offset with current staff. A $25,000 reduction within the City Auditor’s Department will reduce task orders or the scope of some contracts. Within the City Clerk’s Office, a $25,000 reduction was recommended in general expenses and/or existing contracts. For the City Manager’s Office, the recommendation was to defund a currently filled position and eliminate a Citywide dedicated resource for Wellness and Belonging, which will be integrated between the City Manager’s Office and Human Resources. Work on the priorities related to the Wellness and Belonging Action Plan will continue as resources allow but periodic reporting will discontinue. Within the Community Services Department (CSD), reduction of 2 vacant staff positions was proposed. The Junior Museum and Zoo (JMZ) Program Assistant FTE position was related to customer service, membership, and reservations. Half of the current Lucie Stern position will support the JMZ Program Assistant position, which will result in some impacts on customer support and unknown revenue impacts. The JMS Access Coordinator part-time position was previously funded by a grant for a couple years but the grant has since expired. The JMS Access Coordinator position did outreach to underserved communities to raise awareness and increase participation; that effort will be absorbed by existing staff to the extent possible. The Pets In Need budget was larger than the contract, so the contract and budget are being aligned, which will not result in impact to service. The recreation catalog is printed and mailed 4 times per year but was recommended to decrease to 2 catalogs in 2026. In 2027 and going forward, postcards will be mailed to residents directing them to the online catalog, which was more environmentally friendly and will reduce cost. In FY 2023, the Fire Department began a firefighter trainee program with the objective of helping with the recruitment pipeline and vacancies. Three FTEs were budgeted but those positions were not filled. The recommendation was to defund 2 of those FTEs, which will not impact vacancy recruitment or service. Recently, those positions were filled with a couple firefighters who were on restricted duty. The Human Resources Technician position is vacant, which supports recruitment and vacancy management. This work will be absorbed by other employees within the Human Resources Department, which will cause some delays in recruitment and capacity, and it may have an impact on developing long-term policies or improvements around recruitment and affect the ability to be responsive to departments. The Budget Manager and Senior HR Administrator positions have roles and responsibilities that support other funds, so the recommendation was to move those positions into the Internal Service Fund for appropriate cost sharing; this recommendation does not impact service. SUMMARY MINUTES Page 3 of 15 Finance Committee Meeting Summary Minutes: 08/19/25 Half of the IT Manager position is funded within the General Fund. The Information Technology (IT) Manager recently retired and the recommendation was to defund the vacant position, which will have some impact on the capacity to support departments. The IT Assistant Director can offset some of the IT Manager duties except those having to deal with project governance, oversight, and management. Within the Library Department, the recommendation was to defund the vacant Library Associate position, which could impact support to smaller branches within the 5-branch library system as well as the ability to be responsive to customers and maintain existing programming. The recommended reduction in general expenses might include the purchase of new resources for the library, catalogs or material, so there may not be as much new printed or digital material and/or patrons might have a longer wait time for high-demand content. The Office of Emergency Services proposed to reduce general expenses by $25,000, which was felt to be fairly manageable for the Department to suspend purchases. In the Office of Transportation, the recommendation was to use Measure B funding for a Planner position that supports Safe Routes to Schools, which is a shift in funding resource and not a reduction in service. Measure B allows use of Local Streets funds for transportation relief programs and is an eligible use because our Pavement Condition Index (PCI) is above 80 percent. Within Planning and Development Services, the recommendation was to defund 2 Planner positions, a 1-time reduction in FY 2026 and an ongoing reduction of a position that has been vacant for the last 4 years due to turnover or employees on leave. The remaining 6 Planners will focus on processing applications and meeting statutory deadlines. Projects related to code development and ordinance updates will shift to the Long-Range Planning Division. The Long- Range Planning Division focuses on Council priorities. This recommendation will impact the ability to support priority projects; however, the focus will be on implementing the Housing Element and moving forward with State mandates and timelines. Many of the Planning Department’s projects entail the use of staff and consultants, so this recommendation will impact costs. When projects are delayed, it delays the use of on-call consultant contracts. Removal of the FY 2026 $150,000 allocation for the Police Department’s new Hire Ahead program was recommended, which was not expected to result in a service impact because it was a new initiative that had not been pursued. The purpose of Hire Ahead was to help with recruitment but it was unforeseeable that the program will be used in the near future because the Police Department and HR were focused on filling 7 vacancies. Also recommended was the elimination of a 0.12 FTE Reserve Officer, commonly filled by a retired police officer. The Reserve Officer helped with transporting prisoners or special events; there may be a small impact on police services, overtime, or cost reimbursement. In the Police Department’s general expenses, the recommendation was to defund the appropriation for maintenance of the backup analog radio system because it was deemed unnecessary. The digital radio system had a robust redundancy system. Palo Alto is the only city within the county that utilized an analog SUMMARY MINUTES Page 4 of 15 Finance Committee Meeting Summary Minutes: 08/19/25 backup system. Other reductions within the Police Department relate to funding for the Explorer program, Citizens Academy, and other pre-pandemic community initiatives because staff did not anticipate resuming those programs in the near future due to the amount of vacancies; the community will not experience a service impact with this recommendation. The Public Works Department has a comprehensive tree trimming program that encompasses City staff and West Coast Arborist. The Urban Forestry Division had 7 positions and a lead position. The recommendation was to defund 1 of the 2 vacant Tree Trimmer positions and continue to leverage the West Coast Arborist contract. This recommendation may impact the ability to respond to 311 service calls for trees, emergency calls afterhours, or potentially tree planting. The current 7-year tree trimming cycle will be monitored and maintained. Half of the $6.2 million proposed reductions relate to capital projects; therefore, it was recommended to defund an Engineering position that oversees the Capital Program projects and management. This recommendation was not expected to cause an impact in 2026 because many the projects will be deferred; however, in future years, continued defunding of this Engineering position may impact the ability and capacity to manage the portfolio of projects. Regarding the Vehicle Fund, the hybrid electric fire engine purchase planned in FY 2026 was recommended to instead be a diesel fire engine to provide a 1-time savings of $460,000. For FY 2025, Council approved the purchase of the City’s first hybrid electric fire engine, and staff is currently reviewing costs and planning to secure that vehicle. Capital Project recommendations: Maintain a 10 percent reserve on each project for unanticipated costs. Maintain a minimum of $3 million in the 471 Capital Fund, except in FY 2026 when it will be $2,528,380. Reduce the FY 2026 $600,000 appropriation to $450,000 for the ADA Compliance project by focusing on time-critical needs, active construction projects, and passive travel. Do the Bayland Levee Repair project in FY 2028 but continue ongoing maintenance and inspections on a routine basis. Reduce Athletic Court Resurfacing funding from $365,000 to $315,000 using a phased approach while extending the useful life through ongoing review and safety measures but deferring full-court resurfacing. Reduce the $260,000 appropriation to about $212,000 for Benches, Signage, Walkways, Landscaping, and Site Amenities by focusing on higher-priority safety and operations improvements. Defer the FY 2027 Foothill Nature Preserve replacement of 3 restrooms to FY 2028 while ensuring the restrooms remain safe and functional. Reduce the $208,000 appropriation to $133,000 for Off- Road Pathway Repairs by prioritizing repairs of the most severe sections and focusing on safety concerns in the approximately 35 miles of pathways. Johnson Park improvements included equipment, fencing, irrigation, landscaping, and pathways but focus on safety and accessibility while deferring bigger-cost items, and use ADA Compliance project funds for ADA equipment immediate needs. Defer the Werry Park Playground accessibility improvement project for 2 years while ensuring the equipment remains serviceable and safe for use. Defer the Streetlight Condition Assessment for 2 years; this does not impact the replacement of streetlights, poles, luminary fixtures, and wiring that are safety issues requiring immediate attention. A contract SUMMARY MINUTES Page 5 of 15 Finance Committee Meeting Summary Minutes: 08/19/25 was awarded in 2025 for Churchill Avenue bikeway and pedestrian improvements; staff is working with VTA to verify if Measure B money can be used for this project or another project. Regarding Athletic Court Resurfacing, Councilmember Lythcott-Haims asked what percentage of courts and which sports because Parks and Recreation had outside funding to increase pickleball courts. Lam Do, Superintendent of Open Space, Parks, and Golf, replied that staff will assess the athletic courts and as conditions deteriorate will decide if patching and an overlay can extend the useful life, and defer full or partial repaving until more work is needed at a particular site. The athletic courts are primarily asphalt surfaces and mostly used for tennis, pickleball, and basketball. Discussions will be furthered on the possibility of additional pickleball courts, and staff will make an assessment about moving forward. Councilmember Reckdahl noted 15 heads were listed in the table and wondered how many of those positions were vacant or if anybody will be laid off. CFO Lai replied that all except for 1 of the positions in the recommendation were vacant. City Manager Ed Shikada clarified that the 1 filled position was being transferred out of the City Manager’s Office, so nobody was proposed to be laid off, however, that could change depending on how the projected savings compare to the actual savings in each department. As the table only listed some of the positions as vacant, Councilmember Burt advised staff when going to Council to specify in the table if a position was vacant and how long it had been vacant. Councilmember Burt questioned if the proposed dollar amounts for general expenses were available, including the on-call consultant services for Planning and the savings from not maintaining the Police Department analog system. Councilmember Burt wondered what other capital program reductions were considered. Councilmember Burt requested more information on levees and alternatives. Councilmember Burt was interested in knowing what analysis was done and to what degree the JMZ position for special events was anticipated to be offset by additional revenue. The Enjoy! catalog also generates revenue. Councilmember Lythcott-Haims sought clarity on what that 0.48 Access Coordinator position does and the dollars allocated to the position. Councilmember Lythcott-Haims asked who was currently in the Wellness and Belonging role proposed to be defunded from the City Manager’s Office and the work distributed elsewhere. Amanda Deml, Assistant Director for Community Services, answered $42,000 was allocated to the Access Coordinator position, which was chosen to be eliminated because it was a 2-year grant-funded position that had expired. The Access Coordinator position did outreach to East Palo Alto, Menlo Park, and Redwood City to help bring in underserved community groups to the JMZ, which existing staff will continue doing but the scope may be reduced. City Manager Shikada said that Kojo Pierce’s work on Wellness and Belonging will be consolidated with work occurring in Human Services and Community Services to achieve SUMMARY MINUTES Page 6 of 15 Finance Committee Meeting Summary Minutes: 08/19/25 efficiency through a combination of staff. The elimination of dedicated staff to pursue the Wellness and Belonging work plan will result in some reduction in the level of service and pace. Councilmember Burt asked if City staff of neighboring communities were making their eligible residents aware of the JMZ discounted fee. Assistant Director Deml stated that some of the work the JMZ Access Coordinator position was doing and that JMZ staff will continue was sharing and making sure qualified individuals had access to visit the JMZ at an affordable $3.00 ticket price. Public Comment: 1. Lauren Angelo, President of the Friends of the Palo Alto Junior Museum and Zoo, spoke on behalf of the Board in opposition to cutting the JMZ Program Assistant I (PA-I) role. The City’s management study reported that JMZ Guest Services was severely understaffed and increased staffing was of critical importance to leverage the capital investment made in the JMZ. Council approved the Guest Services position as part of last year’s budget cycle. The PA-I position was essential and supported memberships, reservations, and events, resulting in net revenue for the City. Two afterhours rentals per month could generate over $100,000 per year. Ms. Angelo urged the City to keep the full-time PA-I position at the JMZ. 2. Jill Hartnett, Board Member and Co-Chair of the Development Committee for the Friends of the JMZ, stated that raising JMZ admission prices would create barriers for families and there were limits on the amount of revenue the JMZ could generate during regular operating hours. The PA-I role was an onsite event planner that was essential in finding creative mission-driven ways to build a sustainable events program that strengthened revenue and community relationships without sacrificing access or quality by fully utilizing the Museum afterhours and on Mondays for events that do not interfere with daily operations. Ms. Hartnett stated that cutting the PA-I position would limit the Museum’s impact and reach. 3. Steve Emslie, Board Member of the Friends of the JMZ, agreed with Ms. Angelo’s and Ms. Hartnett’s public comments. Mr. Emslie believed it was not an adequate solution to share the Program Assistant position that was physically located at Lucie Stern because that position would be completely absorbed by Lucie Stern activities and the JMZ would be unable to leverage special events and other revenue-producing uses. 4. Ailey Crow, Board Member of the Friends of the JMZ and Co-Chair of the Access and Inclusion Committee, underscored Ms. Angelo’s public comment. Ms. Crow was opposed to the City cutting the JMZ PA-I position. 5. Neeta Kannan, Board Member of the Friends of the JMZ, echoed the opposition to the City cutting the JMZ PA-I position. SUMMARY MINUTES Page 7 of 15 Finance Committee Meeting Summary Minutes: 08/19/25 Instead of cutting the JMZ PA-I position, Councilmember Lythcott-Haims wanted to know what alternatives the CSD considered when reducing 0.8% from its General Fund budget. Councilmember Lythcott-Haims noted wellness and belonging were stated in the 4 Council priorities, and she wanted to better understand the impacts of the proposed reduction of the Wellness and Belonging position, how would FY 2026 compare to FY 2025 and FY 2024, what will not happen, how will the consolidation work, what had been accomplished, and what may not be accomplished. Councilmember Lythcott-Haims wondered if members of the community felt a sense of belonging in Palo Alto, who felt the greatest sense of unease or not belonging, and if the Wellness and Belonging Action Plan proactively addressed how different populations felt in our community. The JMZ and Wellness and Belonging cuts totaled approximately $210,000. All the Planners were dedicated to the Housing Element, which was why very few of the other priorities were advancing. Planner positions were difficult to fill and not having enough planners to do work beyond the Housing Element was an ongoing concern. Staff had been working with HR on increasing recruitment efforts to fill Planner positions. Councilmember Lythcott-Haims believed that filling Planner positions ought to be prioritized rather than PDS proposing to not fill 2 Planner positions. Councilmember Lythcott-Haims wondered if it felt like a violation of the City’s principles to use the Vehicle Fund to purchase a diesel fire engine instead of an electric hybrid. Assistant Director Deml explained that CSD evaluated the eligible full-time positions (Park Ranger, Public Works Coordinator, Therapeutic Recreation Coordinator, JMZ PA-I, and Ben Heistein filled the position for Assistant Director of Parks, Open Space, and Golf). Besides the JMZ PA-I, the other eligible positions were deemed essential for safety and core operations, making them unavailable to be frozen. Although not ideal, the decision with the least impact to operations was to maximize the recent PA-I hire at Lucie Stern to support the needs of JMZ and Lucie Stern. Pending the outcome with the Finance Committee and Council, a transition plan was being created to outline the new Lucie Stern PA-I duties and responsibilities as well as how it will impact operations and revenues. The recent addition of JMZ online birthday party reservations has already increased revenues. JMZ was averaging a 30 percent increase in revenues month over month since ticket prices were increased last October, and ended FY 2025 with about $1.6 million in ticket and membership revenue. City Manager Shikada mentioned that the City Manager’s Office needed to look at filled positions to reach the reduction target because there were no vacancies. The integration and coordination of the Wellness and Belonging work with the Office of Human Services provided an opportunity for greater efficiencies and leveraged some of the funding programs administered through both offices. City Manager Shikada stated that staff had been very active in establishing training for City employees and community members, and he expected those types of activities will continue to be pursued but the pace will likely be impacted. The City’s workforce should reflect community diversity, so that information was posted on the City’s external website for the public and potential employees. About a year ago, training for mental health first aid was rolled out that involved community members and staff. The lived experience of community members was related to work the Human Services Office had been SUMMARY MINUTES Page 8 of 15 Finance Committee Meeting Summary Minutes: 08/19/25 supporting with the Human Relations Commission taking the lead on a series of conversations and reports. Chantal Cotton-Gaines, Deputy City Manager, said that Council approved last year’s Wellness and Belonging Action Plan’s 26 items, of which 5 or 6 were completed and an update was provided to the Policy & Services Committee last week. Staff will continue to progress the items that have been started, and evaluate which items may not be completed or may take longer to complete as a result of the reduction of a dedicated central resource. Prior to filling the Wellness and Belonging position, the City Manager’s Office coordinated the dispersal of work between departments. Council directed staff to start working on equity in 2020-2021, which included analysis of the City’s Racial Identity and Profiling Act (RIPA) data. The Wellness and Belonging position had been working with an outside consultant to have conversations with the National Policing Institute and a report will likely come to Council within the next 2 months. The City has a dashboard for employee demographic data. In working with the Human Resources Department, it was thought that a change in process will get employee demographic information out with less effort going forward. An action plan task related to the community member experience was the ability to provide feedback and find information on the City’s website in their preferred language. The Clerk’s Office and different City departments were working on identifying which languages were being translated and which had the most need. Councilmember Reckdahl commented on distinguishing between good and great positions and programs when proposing cuts. The vacancy rate acts as an insurance policy. Councilmember Reckdahl asked what the vacancy rate will be after cutting 15 heads. Councilmember Reckdahl thought the JMZ position was great, it enhanced a very valuable asset, could find untapped markets, and generated revenue, so he wanted staff to do their best to find an option to keep the JMZ position whole, perhaps half a person can transfer from elsewhere in the City. JMZ outreach was important and sharing this jewel with people in disadvantaged communities was the right thing to do, so Councilmember Reckdahl wondered if external grants or the County and/or other Cities could contribute toward funding the 0.48 FTE. Councilmember Reckdahl mentioned it was very popular and museums were making a lot of money from having young people come in for beer parties on Friday nights. Stanford was an untapped market. Councilmember Reckdahl asked for the number of Fire vacancies, and he wanted to clarify if Hire Ahead and Trainees for Police and Fire meant you hire a replacement before someone retires or in other situations. Packet Page 65 noted that cutting the Police Department Reserve Officer may result in more overtime. Councilmember Reckdahl wanted to know if police officers wanted overtime. Councilmember Reckdahl asked for the total cost of a diesel fire engine, could the purchase be delayed by 1 year or purchase a used fire engine from Mountain View. CFO Lai acknowledged Councilmember Reckdahl’s feedback and staff will evaluate it in the future. The vacancy rate was not calculated taking into account the proposed elimination of positions. Every recruitment undergoes a rigorous review and is specifically approved by the Hiring Review Committee, which will continue through the end of this calendar year. Staff will continue to monitor major revenues and staffing costs, which is the City’s primary expense. The Reserve Officer is a 0.12 FTE, so it is nominal number of hours to be backfilled by an officer. SUMMARY MINUTES Page 9 of 15 Finance Committee Meeting Summary Minutes: 08/19/25 Assistant Director Deml said they can look further into the JMZ Access Coordinator position but she felt confident that existing staff could pick up the work. Staff would have to think more creatively on how to flex or move staff around to support the PA-I position. City Manager Shikada explained that Hire Ahead was specific to Police for hiring in anticipation of future separations, whether from retirement or other, but the program could not be pursued because the focus was on retention and filling the budgeted positions. Fire was actively recruiting for their positions. Andrew Binder, Police Chief, remarked that overtime was generally used to meet minimum staffing requirements set forth in PAPOA’s MOA. The Police Department almost always gets volunteers for overtime, such as for traffic control at a Stanford game. Organized retail theft duties or other crime trends might be addressed on overtime. Police Chief Binder was confident that the Reserve Officer will get covered. Brad Eggleston, Public Works Director, stated the current cost of a diesel fire engine was $1,126,000. The wait time was 12 to 18 months for a hybrid Volterra and about 4½ years for a diesel fire engine. A replacement fire engine was scheduled in the 2025 project but the order had not been placed yet. Additional fire engines were budgeted in 2027, 2028, and 2030. With respect to the City’s sustainability goals, Director Eggleston was comfortable with tonight’s proposal of a replacement diesel fire engine in the 2026 project because there were other opportunities to purchase a hybrid electric fire engine. One fire station was slated to have the capability to charge a hybrid fire engine that can operate fully electric. The Fire Department does not have experience with operating a hybrid electric fire engine. Staff was waiting to hear back from Mountain View about a potential opportunity to buy a used fire engine. A fire engine was totaled in an accident 5 years ago, so the Palo Alto Fire Department was down 1 fire engine, which was okay when there were 2 reserves but now there is only 1 reserve because an engine is staffed at Station 4, which creates some limitations. If 1 hybrid engine can be ordered and it arrived in 1 year or 1½ years, then the engine it replaced can become a reserve unit. Given the long lead time on vehicle delivery, Councilmember Burt wondered if the purchase was budgeted in the year the order was placed or the year the goods were received. The City’s budget was mostly cash expense, so Councilmember Burt thought it was odd to have an accrued expense in the budget for 4 or 5 years. Director Eggleston needed to verify but he believed payment was made in the year the fire engine arrived. CFO Lai noted that oftentimes large apparatus require 50 percent upon execution of the contract and the balance upon delivery but it could be subject to change. Councilmember Reckdahl pointed out that the memo did not describe what the Attorney’s Office, Auditor, and Clerk’s Office was cutting from general expenses. Because of the concern that power outages may cost more money in the long run, Councilmember Reckdahl inquired if the proposed reduction in the amount of tree trimming included power line trimming. SUMMARY MINUTES Page 10 of 15 Finance Committee Meeting Summary Minutes: 08/19/25 Councilmember Reckdahl wondered if reducing the amount of spending on levees would result in more expense to fix a levee. CFO Lai said the Attorney’s Office did not have many general expenses, so the reduction may be the use of on-call contractors whose work can be performed by staff. The Attorney’s Office, Auditor, and Clerk’s Office department heads can determine how to reduce general expenses by $25,000 and were not asked to provide detail on each impact because it was viewed as a nominal amount. For the City Auditor, it might entail a reduction in contract scope or a task order. Director Eggleston mentioned that the City’s contractor did the vast majority of the work in the Utilities line clearance program and that work was not expected to be impacted. Director Eggleston understood the scope of the levee project was for the levee in front of the Interpretive Center that goes up to the golf course and has degraded over time; sandbagging and flooding tend to occur every year during king tides. Superintendent Do added that the levee had eroded over time and during high tides we get some overflow. Staff addresses it annually with sandbagging or monitoring the tide levels. There is access to certain areas through alternative routes. Councilmember Reckdahl referenced the numbers on Slide 10 and sought clarification on deferral of the Foothill Nature Preserve restrooms to FY 2028, if initial design will start in FY 2029 and construction in FY 2030. Councilmember Reckdahl saw the restrooms last weekend and they appeared reasonable and functional. In Parks and Recreation, Councilmember Reckdahl thought we had good playgrounds, so delaying a playground for 1 year was a reasonable way to balance the budget. Councilmember Reckdahl repeated the request that the Committee had made during the budget process for the headcount for all the departments from 5 years ago compared to now to provide a sense of the reasonableness of the proposed cuts. Having that information when staff goes to Council can show whether the scope of government has changed; if so, did it change for the better or worse. CFO Lai questioned if the Committee wanted to assess reasonability from the perspective of equity amongst departments or service impact. Councilmember Burt recalled this was discussed in detail during the budget process and the Committee was hoping to see the headcount from 5 years ago for comparison. The number of people employed (not how many were authorized) per department in 2019 versus today will not determine what will be done but it is a valuable and important point of reference to see if a department had significantly fewer employees, more, or about the same, bearing in mind the changes in tasks. Holly Boyd, Assistant Director of Public Works, confirmed the numbers for the Foothill Nature Preserve restrooms were correct. The design was being pushed from FY 2027 to FY 2028, and the replacement of 3 restrooms goes into FY 2031. The -$900,000 in FY 2028 was because it had been budgeted at $1.2 million and part of the dollar amount was shifted out of FY 2028. SUMMARY MINUTES Page 11 of 15 Finance Committee Meeting Summary Minutes: 08/19/25 City Manager Shikada said that staff will provide Council with the filled positions by year by department from 2019 forward but there have been shifts of functions between departments as well as positions added for sustainability and electrification, so staff will estimate what those changes meant in number of FTEs. Councilmember Burt suggested using an asterisk to provide context. CFO Lai consulted with HR and noted the need for manual calculations. An asterisk will be used for notable changes or shift in FTEs, such as the shift of Fire Prevention from Development Services to the Fire Department. City Manager Shikada recalled a number of Development Services positions were shifted from contractual to in-house around 2019, so those will be asterisked. The Office of Transportation was created around 2018, pulled out of Planning. The Development Services Department is now Planning and Development Services. Councilmember Reckdahl reiterated his request for staff to find another half position elsewhere to make the JMZ position whole or delay another capital project by 1 more year to keep the revenue-generating JMZ position. City Manager Shikada pointed out that reducing positions can provide ongoing or at least 3 years of savings but capital projects do not generate ongoing savings. Staff exceeded the savings goal, so City Manager Shikada offered the option of meeting but not exceeding the goal. CFO Lai addressed Councilmember Burt’s earlier question about reduced general expenses. Within CSD, $50,000 was for realigning the budget with the Pets In Need animal shelter contract, so there was no service impact. Modifying the mailing from catalogs to postcards was anticipated to result in $65,000 of savings. CSD reduced $50,000 of general expenses related to various contracts or miscellaneous expenses. General expenses were reduced within Police by $60,000 from the maintenance of the analog system no longer needed and $30,000 related to supplies or programs that have not resumed. The $50,000 general expense reduction within Library was anticipated to come from the purchase of hardcopy and/or digital catalog content. Councilmember Burt asked about Development Services on-call; however, the recording did not capture the audio of City Manager Shikada’s response. Councilmember Burt wondered if it was a net savings to have overtime of existing officers versus the expenditure for a Police Reserve Officer. CFO Lai stated the Police Reserve Officer position was $14,654 and the JMZ position was $125,000. The Enjoy! catalog provided a great cost recovery on those programs, so Councilmember Burt questioned if the $65,000 savings from printing catalogs would result in less participation and revenue instead of a net savings. Some community members rely on hardcopy catalogs. Councilmember Burt asked if people were polled when they sign up for programs if they heard about it from the catalog or online. CFO Lai suggested not mailing the Enjoy! catalog on a trial basis while monitoring the revenue impact and pivot if needed, and Assistant Director Deml stated that CFO Lai’s suggestion could be a consideration. Assistant Director Deml noted that based on data collected when people are asked how they heard about it, the Enjoy! catalog was SUMMARY MINUTES Page 12 of 15 Finance Committee Meeting Summary Minutes: 08/19/25 often recorded as number 1, and number 2 was from friends or prior participation. Instead of mailing 40,000 Enjoy! catalogs, Assistant Director Deml suggested saving costs by printing about 800 copies and having them available in-house for people to pick up. Reducing printed copies could help with the City’s sustainability goals. Assistant Director Deml verified that 90 percent of registrations were online. Councilmember Burt suggested having enough available printed Enjoy! catalogs at libraries, the JMZ, and other community gathering spaces. Councilmember Burt’s biggest concern with the JMZ position was whether it generated more revenue than it cost or was it net neutral. Councilmember Burt asked if there was data on how much revenue was being generated by existing JMZ staff from special events versus the amount of revenue the JMZ full-time position was projected to generate. Assistant Director Deml replied that the JMZ was trending about $5000 to $7000 per month since the transition to the new online software enabling people to make birthday party reservations. The goal with a full-time position was $200,000 annually by maximizing birthday parties and corporate external rentals; however, it had not been considered whether the goal was attainable with a 50 percent person and possibly by rearranging staff and their duties. Since the business report, 5 full-time positions were added for animal care staff and 1 PA-I was added to support Guest Services; they were looking at how that PA-I position could be reworked to support events if needed. Councilmember Burt asked if the halftime person would maintain the current JMZ programming or result in a net increase over the current method, and how much expense would go into meeting the $200,000 goal. When this item comes to Council, Councilmember Burt said it would be helpful to know the net savings because the salary savings will be partly or wholly offset by a loss in revenue. Assistant Director Deml said the current Guest Services staff does what they have time to do to the best of their ability while managing the guests coming in the door. The PA-I would have dedicated time to manage reservations, walk people around and show them the rental spaces, and actively recruit. City Manager Shikada clarified that adding a half person focused on JMZ reservations was a net increase over the current level of effort but less than what was possible with a full-time PA-I position. Councilmember Lythcott-Haims did not want to cut a position that may more than pay for itself and solve some other budget issues by having the opportunity to create significant additional revenue. If the PA-I position is kept, Councilmember Lythcott-Haims suggested creating a KPI that this position was expected to raise X amount of dollars in order to support itself. Councilmember Burt was apprehensive about the Bayland Levee and the risk of a king tide with a major storm surge creating a severe event as a result of not doing enough with the levee. The levee was not constructed to today’s standards and it has deteriorated. Instead of the Bayland SUMMARY MINUTES Page 13 of 15 Finance Committee Meeting Summary Minutes: 08/19/25 Levee, Councilmember Burt asked if another capital project had been considered for elimination. CFO Lai said the FY 2026 Capital Project Portfolio and 5-year plan were difficult exercises for staff to present to Council given the City’s financial position. Staff looked at the street resurfacing project; however, with a PCI of 82 percent, deferring the resurfacing of streets could cause the PCI to go below 80 percent, which was not good from a Measure B LSR perspective. An entire street survey will be done this year. Assistant Director Boyd noted the PCI was 83 percent on January 1 but dropped to 82 percent at the end of March, and the actual PCI will be known at the end of the year. The Robles Park capital project was considered, and CSD mentioned consideration of the golf course netting project. The entire 2025 budget for the CIP sidewalk program was reduced, so cutting the sidewalk project was not considered for 2026. Councilmember Lythcott-Haims requested further information on the $847,000 golf course netting project in the budget document. Superintendent Do said that ongoing discussions for a long-term partnership with First Tee, the possibility of further expansion of the driving range, and consideration of a second deck were factors that will impact how the golf course netting project moves forward and/or was funded. Due to the ongoing work, City Manager Shikada said that staff concluded it was not prudent to defund or defer the availability of funds allocated to the golf course netting project. Councilmember Burt noted the driving range was a big revenue generator, so he thought a double-deck driving range would result in a net-favorable impact. Councilmember Burt inquired if the options to compare or weigh were the Bayland Levee versus Robles Park. Assistant Director Boyd mentioned that staffing was more of an issue for the Bayland Levee repair project. CSD asked Public Works to partner with them on the project but Public Works has had a landscape architect vacancy since January. Sarah Robustelli, Division Manager of Open Space, Parks, and Golf, added that staff was seeking partnership and collaboration with Public Works Engineering and watershed protection. It was a lengthy process to obtain the needed regulatory permits to do the levee repair. Robles Park was considered versus the need at Johnson Park. The team assessed that Robles Park was in more dire need due to safety and they were no longer able to secure replacement parts for some of the structures, so Robles Park was kept in this year’s budget at a little under $900,000. Councilmember Burt noted the tendency was to have a project include work on the whole park, so he asked staff to consider bifurcating the playground replacement safety issue from items that were not urgent. Councilmember Reckdahl thought the design for Robles Park was changing to 1 playground instead of 2, so he asked if the playgrounds were being remodeled or consolidated. SUMMARY MINUTES Page 14 of 15 Finance Committee Meeting Summary Minutes: 08/19/25 Division Manager Robustelli replied the existing Robles Park playgrounds will be remodeled to avoid increasing the cost. Division Manager Robustelli pointed out the levee repair was currently budgeted at $288,000, which likely needed to increase because it was not enough to cover construction costs. Councilmember Burt wondered if there was an opportunity to obtain Valley Water funding for the levee repair. Councilmember Burt questioned if staff was holding back on beginning the process for the levee repair regulatory permits, because waiting for permits could delay repairs if a greater sense of urgency arose. Division Manager Robustelli said that staff considered seeking grant funding during this process in addition to augmenting what they had. Councilmember Burt asked what bucket of Measure B dollars would the Churchill Bike and Pedestrian Improvements hopefully qualify for. Ria Hutabarat Lo, Director for the Office of Transportation, replied that there had discussions with VTA staff about using Local Streets and Roads funding for Churchill Bike and Pedestrian Improvements or a different project. Because the project was already underway, City Manager Shikada thought it would not qualify for that type of discretionary decision. Councilmember Burt recalled extensive discussion during the budget cycle about understanding what consultant expenses could be reduced, the outsourcing of regular tasks and consultants with domain expertise. Consultant expenses were not delineated in the annual budget because they come up throughout the year, which presented a challenge in quantifying the possible savings achieved through less use of consultants. If possible, Councilmember Burt wanted to see an estimate or a range broken down by department of anticipated savings from certain contracts. City Manager Shikada mentioned that staff was implementing tighter controls on expenditures for contracts. More detail will be provided in the study session on managing consultant services scheduled for September 15. Instead of debating between Robles Park and the levee, CFO Lai suggested an alternative for the Bayland Levee might be to appropriate $50,000 in FY 2026 for staff to obtain permitting instead of fully defunding $288,000. Councilmember Reckdahl would like to see any information on firetruck options and was intrigued about the idea of a used firetruck because $1.126 million for a new firetruck was a lot of money. Councilmember Burt recalled discussion that a used firetruck was acceptable as a backup vehicle but not a primary one. A used firetruck had less life remaining, allowing a nearer-term window in which to replace it with a plug-in hybrid, and hopefully the costs of hybrids start coming down. Councilmember Burt recalled a VTA discussion that in the U.S. we pay 2x what Europe pays and 4x what China pays for electric busses. SUMMARY MINUTES Page 15 of 15 Finance Committee Meeting Summary Minutes: 08/19/25 Director Eggleston added that discussions thus far were about having a used firetruck become the second reserve fire truck. MOTION: The Finance Committee unanimously agreed to advance the staff FY26 budget amendment recommendations for Council with the following considerations: • In the budget recommendations, indicate if the defunded position is currently vacant and if so, duration of vacancy. • Summarize positions by department and asterisking changes such as new classification, in-house/outsource, and interdepartmental shifts. • For CIP Bayland Levee, modify the recommendation to retain $50,000 in FY26 budget for permitting efforts. • Junior Museum & Zoo Program Assistant (1 FTE) – review revenue recovery potential (i.e. range of assumptions) and potentially consider retaining this position. • Police Reserve Officer (0.12 FTE) – review impact to overtime and likelihood of a net- zero result, and potentially consider retaining this part-time position. • Consultant savings will be discussed with Council on September 15 and include any available information within this budget report to Council, if possible. • Community Services Department Enjoy! Catalog – review the revenue impact of going from 4 to 2 publications in FY26 and defer decision to transition to postcard-only in FY27. MOTION PASSED: 3-0 Future Meetings and Agendas Director of Administrative Services/CFO Lauren Lai noted three items related primarily to Utilities were tentatively scheduled for September. Adjournment: The meeting was adjourned at 8:43 P.M.