City Council Meeting — November 15, 2023

I know this is a fool. Everybody's got it. I know.

I know.

Thank you.

Thank you.

Thank you.

Thank you.

Thank you.

Good evening.

I'd like to welcome you all tonight to the Monterey Park City Council meeting. I'd like to start off by reading our mission statement for the city. The mission of the City of Monterey Park is to provide excellent services to enhance the quality of life for our entire community.

And our land acknowledgement.

We would like to acknowledge that the land we inhabit today was once known as the Tamangar, the home of the Gabriolino Tongva people. We show our respect to the Gabriolino Tongva people as well as all of the indigenous peoples past, present, and future, and honor their labor as original caretakers of this land. We commit to uplifting the Gabriolino Tongva people and invite you to acknowledge the history and join us in caring for this land, especially in November, which the City of Monterey Park has already declared as Native American Heritage Month.

So thank you so much.

We're going to go ahead and get started with, before we do, we're going to go ahead and start with our FlexSlu.

But first we'll get our, I'm sorry, our color guard, sorry, our color guard. Thank you.

Recording in progress.

And if I can invite you to please stand.

Thank you.

Outward face. Present colors.

And we have a special guest tonight who's going to be reading,

sorry, leading us in the flag salute. Aaron Zhang, a student from Monterey Highlands Elementary.

Go ahead.

Please stand, put your right hand over your heart, ready, begin.

I pledge allegiance to the flag of the United States of America and to the republic for which it stands, one nation, under God, indivisible, with liberty and justice for all.

Color Guard, order colors.

Color Guard, outward face.

Color Guard, forward porch.

Post colors.

About eight. Dismissed.

Thank you.

And if we can take our seats. Actually, this is my favorite part of the city council meeting because we get to recognize one of our civic superstars within the Monterey Park community. So we thank you, Erin, for coming out tonight and for leading us in the flag salute. And I want to also acknowledge and thank mom.

And is this your sister, Erin? Yes. All right. Very good.

And our Monterey Highlands principal, Mr. Abel Bourbaugh, for being here tonight. And if I can ask the council to join me down here for a certificate presentation.

Thank you, Aaron, so much for leading us today in the flag salute.

We really appreciate you coming out. And thank you, Mom, for on this cold and rainy day to making it out. And Mr. Bourbon as well.

You are the best in Monterey Park. And we know that also schools are the bedrock of our community.

So we love that we are engaging and that we have students coming in at every council meeting to participate in this.

So on behalf of the city of Monterey Park, I wanted to present you with a certificate, Aaron, that you can put up. And I'm sure Santa's going to bring something very good for you this year.

I'm sure he's smiling down right now. Let's give him a round of applause, please. Yeah. Aaron, if you can join us here in the center, we'll take a picture. And Mom? Mr. Bubba as well.

Thank you.

Thank you.

Thank you.

All right. Thank you so much.

It's always so great to have students in our council meetings. I go ahead and ask our city clerk to take a roll call, please.

Council Member Lo.

Present.

Council member Yu here. Council member Ngo. Present. Mayor Pro Tem Wong. Present. Mayor Sanchez. Present. We have a quorum. Thank you. City manager, city attorney, are there any agenda additions, deletions, or changes?

None from the city manager's office. None from the city attorney other than Mr. Mayor. You were going to make an announcement out of closed session.

Yes. So I would like to announce that during closed session, the city council has unanimously voted to drop the interim from our city manager and put her in a permanent position. So please help me and congratulate our city manager, Ms. Inez Alves.

We are so proud of her and to have her here in Monterey Park.

Thank you, Inez.

We are going to go ahead and start with public communications.

First speaker, Nadal Wouda.

Good evening. Hello, everyone. Last meeting, I talked about some subject, and I sent you the email today after the clerk office and police department refused to give me the information I requested. and according to them, I wrote what I'm going to say that now.

Again, I say, hello everyone and we the people. We don't live in a police state, neither some police cities. I went to the clerk's office and I requested a copy of my request information for the past three years and the deputy clerk Cindy Trank said she doesn't have any copy because the clerk office and she sent all the document requested information to the police department for the people to pick it up. I went to the police department where the lieutenant Gabriel and refused to give me what I requested as I want but as he or his department or I don't know who wants. He said, I must pick up all the documents together. Otherwise, they will not give it to me or provide it to me. And he wants me to agree with him about something he said. And I said, you can't force me to agree with you or disagree with you. We still live in a free state and city.

the assistant deputy clerk Helena Chu said

I don't like to see your face every day requesting information

I don't think

she has that right to say it to me or to any public or any person

the city clerk office and the police department office are some of them who I repeat some of them who

acts according to their egos, and some of them act like tyrant, evil, despicable, ignorant,

act like a gang and mafia members.

They act unprofessionally, uneducated, like they never trained as a police officer

and never been coached as an officer who applied the Constitution and the rule of laws.

moreover they think as their ego telling them they think they are above the constitution and the rule of law and as a superior to the public

who they are serving and working for the deputy city clerk Cindy Trang said the city clerk get instruction

I repeat instruction like we are in a police state or city

not to reply to any request information has been requested before.

Who gave here that instruction and why?

The city clerk must provide to any request information complying with the Information Act. When the requested information it was missing, no only not providing according to the laws, the city clerk should and must provide that information even when the information requested a thousand times and it complies with the laws.

Additionally, I don't like to be a servant for the servant who serve us as a public.

And I request from you, I just send you the email where the city clerk refused to give

me that information and the police department refused. especially, what's his name, Lieutenant Gabriel and Captain Huavis.

They want me to go under their order. Thank you.

Next speaker, Randy Kaye.

Good evening. I'm here to talk about Chandler and Helmut again.

This is the American Psychological Association definition of civic engagement. Individual and collective actions designed to identify and address issues of public concern. Civic engagement can take many forms, from individual volunteerism, to organizational involvement to electoral participation. It can include efforts to directly address an issue, work with others in a community to solve a problem, or interact with the institutions of representative democracy. We hope that you will attract, in your documented endeavors, to engage the public, individuals with characteristics essential to elected and appointed officials, integrity and accountability. Tonight, we are going to provide you with an example of civic engagement. Safety issues at Chandler and Hellman were identified after a series of accidents in August. We brought a team together with four residents from Monterey Park and one from Alhambra. Tonight, I would like to introduce and thank members of our team, Patricia, Robin, Marita, and Mike. Together, we engaged residents of Monterey Park, Alhambra, and individuals from local communities who passed through this intersection on a regular basis. Whether people were on their way to work, to school, to go shopping, for a walk, or a ride on their bike, hundreds stopped to talk to us. We were overwhelmed at how many people spent time with us describing their concerns about this intersection. We met a woman whose 14-year-old brother was hit while on foot crossing Chandler. a 19-year-old young man who admitted being terrified whenever he has to make a turn onto Hellman, and a woman who in August had an SGV pushed onto the sidewalk outside her home and threw her steel front gate into her garden. The driver was taken to the hospital by ambulance. Over the last three weeks, we've been outside in the local area at schools and businesses along Chandler, Hellman, and Emerson. We have not used an online petition that could be signed with just

to collect, and most of us are over 60.

We collected signatures from people face-to-face. We have truly engaged our community and met many of our neighbors. We are relieved by their kindness and thoughtfulness. Signatures were collected in an effort to make this work as real as possible. Today, we have a petition to present to you with 984 signatures. The petitioners are requesting three-way stop signs, extension of the Red Zone's Long-Hellman, and other safety measures at this intersection that are necessary to prevent accidents. As you can see, your community has recognized this intersection as a priority for prompt local government intervention to protect the safety of the public. At this time, we would appreciate your comments and would also like to ask these questions. Is the traffic camera going to be rescheduled? Is the Traffic Commission going to implement interim measures to improve safety and if yes what will they be and when will they be implemented how will accidents be reported accurately in the future can this issue be moved to an agenda item for the next City Council meeting will local police officers be assisting with citations for parking in red zones speeding and passing school buses when lights are flashing and children are boarding how will the community be informed about actions designed to improve safety at this location many have already

asked us this question so i have the questions if any of you would like to um if you would like to

respond to them and thank you very much um can you submit the questions to their city sure and we can

also submit the petition thank you through the dust and the dirt

on Chandler.

Next speaker, Patricia Mesquite.

Good evening, everyone. I'm sorry. Good evening, everyone. I'm here also to speak on Chandler and Hellman.

So I have been a witness to most of the accidents that have happened there. I live there on that corner, actually.

So every time I've heard a loud sound, a noise or anything, a pow, boom, whatever, I already know I'm like in just that mode of just go out there and help the person. You know, you don't know what's going on, so you just need to be out there to help them. I mean, I'm right on that corner. So I've been out there, you know, many a times. One of the times, 2020, I believe it was 4th of July, about a little bit after 1 o'clock, I heard that crash again, and I went out there. I got to say, I was in my pajamas because I wasn't feeling to get out to the Fourth of July get-together just at that early time.

So I went out there. I witnessed a man maybe in about his early 40s shaking on the floor. He was hit. He was a motorcycle driver.

I believe somebody coming out of Chandler trying to make a left on Hellman,

and he was going east on Hellman. So pretty much they just collided. He had the right-of-way.

So when he got hit, he just got thrown like about 10 feet almost to my lawn.

So, I mean, it was the most ugliest thing to ever witness and be there and see this man. I mean, thank God he lived.

You know, he was very injured.

He had his gear on, but his motorcycle was in just so many pieces on Hellman, just all over the place. and I said to myself, Lord, help him, because I just had to go into that mode, like I said,

to just kind of help him call 911 with my roommate, and we were just there to help him. We have video there overlooking Hellman and everything that goes on, so we've been there to help a lot of the people that have crashed, just to give them the video just for the insurance purposes, because they've been mainly car accidents, like this is the first motorcyclist that I've seen get hit and this happened too. So I'm just here to speak on behalf of our team here, which we are all just right there, neighbors together. We've been all out there helping these individuals that we don't know. But we did speak to somebody this weekend.

I believe it was a lady and a man that said their father just got killed not too long ago, but it was a little bit further down on Baltimore

because that street is also very bad. I think all the intersections when you come out are really bad. but you know that's neither here or there we're just right now here speaking on helman and chandler thank you very much for your time thank you no more speakers thank you

um i'm gonna be uh council if it's okay with you i'd like to move some items um around uh just to be respectful of people's times here. In particular, if it's okay with you, I know we have a speaker who wishes to speak on item 6A, which is a resolution on declaring the month of November Family Court Awareness Month. And I know she's on Zoom, so if that's okay with you,

we can go ahead and have her go next so we'll go ahead and move item 6a and 6b

I mean I know that a lot of us are wearing our purple ribbon so it would

be appropriate at this time so we'll go ahead and start with item 6a a resolution

of the City Council of the City of Monterey Park declaring the month of November Family Court Awareness Month. Do we have a speaker?

Yes, I'm Sandy Ross.

Welcome. Thank you for being here tonight.

Thank you. Do you, do I, I should just speak now then?

Yes, if you can speak to the resolution and why this is important, that way the audience and also the council can hear.

Sure. Thank you so much, first of all, for issuing a resolution that November is Family Court Awareness Month.

And my name is Sandy Ross, and I'm part of California Protective Parents Association.

But tonight I come before you as a survivor of domestic violence and the protective parent of a child abuse survivor who's now an adult.

I can tell you firsthand that the only thing worse than handing your child over to your abuser

be anyone's issue. And that's what I've learned through doing years of advocacy on this. And this is happening in family court all the time. And I believe that our family court systems need the tools to work on these complex cases. And I have some really proud of this, but a couple years ago, a friend of mine came up with the idea. Another advocate, her name is Tina Swithin. She came up with the idea to declare November as Family Court Awareness Month. And I said, hey, I'm in on that.

And I will tell you, I'm super proud that last year, along with survivors across the country, we were able to secure 370 proclamations across 29 states. 16 states actually proclaimed November

as Family Court Awareness Month, and 120 proclamations were done in Southern California alone. Even bigger news than that is Senator Susan Rubio, a champion for domestic violence survivors and protecting children. She introduced a bill called Peaky's Law. Peaky's Law is named after a little boy who was murdered in a family court case. Mom tried to protect him, Anna, and it just didn't happen. So this bill was in honor of Peaky's life and the other children that have lost their lives in the court system. And the bill, Governor Newsom signed it on October 13th, and it provides for training topics, really important ones on domestic violence and child abuse. It also bans a very harmful treatment program that's been exclusively marketed to family courts. so I just want to say again I'm very very grateful to the city for issuing the resolution as I'm sure many of the residents who are dealing with this issue in silence so thank you very very much

thank you so much for sharing your story but also for being here tonight and speaking to the

resolution we just happen to have

Senator Rubio here at our

last council meeting and she spoke wow

And she spoke to a lot of other legislation that she passed through this term to help protect families and battered women who are going through a lot of these issues. But if it's okay with the council, we can take a vote on item 6A.

Oh, is there a motion?

I'll move to pass resolution item 6A. Is there a second? Second.

And if we can take a vote, please. Approved unanimously.

Thank you so much and we're happy

that the month of

November is Family Court Awareness Month here in the City of Monterey Park. Thank you so much for being here with us tonight.

Thank you.

The next item is 6B, which is a resolution of the City Council of the City of Monterey Park declaring the month of November National Homeless Youth Awareness Month. We actually in the city in the county, but also in our state, have the largest amount, actually, of homeless youth. And as an educator and teacher, I have several students, actually, this year, but throughout the years that have been homeless, and homeless in so many different capacities. And so I think this is so fitting for our city to be able to not just create awareness, but also try to find ways to try to find housing, but also try to help families and children who are suffering from homelessness. And that's part of the reason why we're wearing our purple ribbons today to bring awareness on this issue. So I appreciate those of you guys wearing the purple ribbon. And I'd like to make the motion to pass item 6B.

Seconded by Council Member Yu, if we can take a vote.

Approved unanimously.

Thank you so much.

We'll go ahead and jump back to staff communications.

and we'll go ahead and start with the fire department.

Good evening.

I'm Engineer David Goetz and here to talk about two things.

One is that we are going to be doing another community prep clinic

that goes over emergency preparedness in the household. It is going to be at Sequoia Park, Saturday, December 16th, from 9 to noon.

Sorry, out of order.

And, you know, we're going to be going over things like utility shutoffs, having emergency supplies, exit drills for family kind of contacts. We have a trailer that we have a lot of stuff to show off those items. We have, you know, a lot of brochures. Also to kind of get into people's heads that, you know, getting prepared is not only for you but for your family but also for your community. And, you know, maybe get some people that want to sign up and join our CERT program that is actively going right now. So hopefully we'll see you out at Sequoia Park Saturday, December 16th from 9 to noon we'll be out there. Also, with Thanksgiving coming up, we wanted to go over some safety tips because the leading cause of fires is kitchen fires. And the one day that has the most kitchen fires, Thanksgiving.

You know, too many pots on the stove, kind of, you know, too much chaos can lead to a fire.

But some of the things that you can do to help reduce fire is flammable items like oven mitts and wind spoons. Oftentimes, you kind of use them and you put them right back by the stove burners.

Those can catch fire.

Because there's so much going on, utilizing a timer. You don't want to kind of put something on the stove and let it go.

And all of a sudden, you're like, oh, it's three hours later.

You know, set multiple timers. we have an Alexa in the kitchen that at my house all the time it's hey Alexa set a timer for 15 minutes and all of a sudden she's going off left and right but it's it's it's really good I don't know how we would keep things straight without a timer in the kitchen make sure that your smoke detectors are in place in the kitchen and working as well as try and keep kids and pets three feet away from the stove while you're cooking. I know that's a lot easier said than done, but kids love to reach up and grab those pot handles that are hanging over. And if they do

manage to grab one, they can be bringing down a pot of hot gravy or something that's just on them

and lead to an injury and a burn. And then lastly, we also, we have a QR code

link for frying a turkey. But if, you know, going to the QR code is a little difficult. It's also on our Instagram. We just posted a video on deep frying a turkey and safety. It goes over, make sure you thaw that turkey. You put in a frozen turkey, it's going to be bad. So give yourself plenty of time, three days to start thawing that turkey. Make sure it's dried off,

pat dry. The giblets are pulled out. You don't want it, you know, wet water. It does not mix with

really hot oil. When you Lor it, use a Loring device, whether it's a hook or something that came with your kit. Make sure you're wearing gloves, protective gear, and Lor it into the pot slowly, All right. You want to make sure that pot isn't overfilled. Usually the pots are going to have a fill line. It may look like, oh, you're probably going to need more. But once you put a giant turkey into that pot, it's going to come up and you're going to have more than enough. And make sure you're doing it outside, clearing away from the house, away from stuff that's slammable. And you have a very safe space if you can. That fire extinguisher that I'm sure everyone has in their kitchen.

Bring that outside and just have it on standby and ready.

Make sure if you're going to use the fire extinguisher, we use the acronym PASS, pull, aim, squeeze, sweep.

So you've got to pull the pin, otherwise that handle is not going to squeeze.

You've got to aim it not at the fire, but at the base of the fire, because the fire is not going to do much. What's burning is you want to cover it with the dry chemical that's within.

Squeeze the handle, and then just easy sweeping the base of that fire to put it out.

So be safe, have a happy Thanksgiving, and hope to see everyone out Saturday, December 16th, for our next community prep clinic.

Thank you very much.

Thank you so much for that presentation and for all of the wonderful tips on how to keep safe during Thanksgiving.

Any questions or comments from the council?

I'm just eagerly anticipating the demonstration from Chief Halleck on the turkey frying, which will hopefully happen the night of a council meeting.

So we'll see that.

But no, thank you so much. And I know we're, I believe we're going to post some of these tips online and send these out.

Absolutely.

Because keeping everyone safe makes our job easier.

Thank you. And community better. Absolutely. Thank you so much.

and if we can go ahead and jump to the next item which is uh police department

mr mayor members city council um it is november so uh our police officers and firefighters are growing their facial hair out my i was in briefing just now and i've got eight officers out tonight and all of them except the two youngest ones that i don't think can grow beards have all started to grow beards. So they'll be able to grow beards for prostate cancer awareness for the next two months until through December. And that time, they usually get too itchy and they want to shave them off or their wives or girlfriends or spouses want them to be shaved off by then. So it gets it out of their system. What I'm here to talk to you about is our Neighborhood Watch program. We've rekindled our Neighborhood Watch program. We've talked about it at council meetings. We're on our eighth or ninth Neighborhood Watch Block meeting now, which back before COVID, we had over 100 back in the mid-2000s. And unfortunately, the ebb and flow of the Neighborhood Watch program means they come and go. But we're rekindling that program, and it's been very successful so far. The way the program works is we go out to a neighborhood, we solicit the neighbors, we bring everybody together, We find a sponsor, and then we present to them crime issues, issues involving crime prevention. We talk about whatever their neighborhood issues are. But primarily, our job is to bring the neighborhood together. A lot of times, the neighbors don't know each other, so we encourage them to be able to share phone numbers, text messages, startup message boards, things like that, so they can communicate with each other when something happens. It's been successful so far. It's a campaign to get that out. So we're working on that all the time. Go ahead, next one. This is a QR code, and if you're interested in a Neighborhood Watch program in your neighborhood, this is how you can start it. You can email the Community Engagement Bureau. You can call us, or you can scan that QR code. We're updating the city's Police Department website right now with all the Neighborhood Watch information. but that's the way we start the program if people are interested. Plus the community outreach we do, we solicit them there also. It's already starting to itch and I just grew it like five minutes ago. Go ahead, next one. The next thing I want to talk about is our neighborhood engagement team. This is our homeless engagement team, the team that goes out and deals with mental health, deals with homeless in the city. This is a snapshot of our October stats, just to give you an idea. This is one month stats. We contacted 144 homeless people during that time period, and that's both patrol and our homeless team. There were 30 repeat contacts within there. And I think we've talked about it before, that to gain the trust of a lot of the homeless community, it takes five or six different encounters with our department to kind of gain the trust with them. And the homeless engagement team is very good at that. So there were 30 repeat contacts, 24 people accepted service, 30 declined service. So we do get people that declined service. And sometimes they become more of a problem for us. But we have very comprehensive service that we can provide them.

And we lay that all out for them. They understand that.

They're very accomplished at being homeless. They're out there on purpose. And they don't want services. They want to continue in that lifestyle. And we run into that on a regular basis. We sheltered four people.

And it seems like a low number based on the contacts, but the process of sheltering people is a team effort with us. And having four people off the street and in shelter and on their way to hopefully permanent housing is a big win for us.

And we'll continue to do that on a monthly basis.

21 people referred to LASA, which is the L.A. housing authority group that deals with preventing homelessness. They don't deal with mental health. They don't deal with dependency. They deal with simply homelessness. So they're a great partner for us. They have a lot of resources throughout the county. Some of the people we contact here in Monterey Park are already in the system with them. Others can refer to them if they're moving through Monterey Park and they're not spending time in Monterey Park. We find that they're either in the LASA system or want to be part of the LASA system.

Lakata is our partner that we use on Mondays and Fridays, and they deal with drug and alcohol dependency. Nine people were referred to that.

We continue to deal with about 15 encampments in town, and those are not active encampments. Those are the places we know encampments go up, and every day we're out there making sure that they're not going back up again.

That's private property, that's Caltrans property, and public property. And we actively go out there and contact the people at those encampments and provide them with wraparound services immediately to meet the requirements of the law.

After we've offered them those services, and I'm talking about immediate services, to where we can move them into a shelter right then and there, get them food vouchers, get them hotel vouchers,

everything they need, move their property, store their property, everything. If they still refuse to move, then we may take enforcement action with that.

We handled 19 mental health calls, and 10 of those required a long-term mental health follow-up with our clinician. So the NET team not only deals with homelessness, they deal with the mental health follow-up from patrol, and they deal with specific mental health calls that can't be handled by a normal patrol officer. And we had 19 of those last month. And these are pretty reflective of the prior months also, but this is a snapshot of what the team's doing now. Go ahead.

Also, I want to introduce you to a couple new employees I have. Kata Chiv is a lateral officer. He's assigned to field training. He's a graduate from Santa Ana College. He enjoys spending time with friends and family, and he's a martial artist, jujitsu. He enjoys the family atmosphere of our department and the giving back to the community. So he's kind of brand new with us, but we have high hopes for him. He's always got a smile on his face. So when you see him around, say hi. Go ahead. And we have a new dispatcher, Jessica. Jessica left us for a short period of time and went to Alhambra. And she saw the error of her ways and came back and is now one of our full-time dispatchers. She was a parking community service officer for us before she left. She always wanted to be a dispatcher, and we didn't have any openings. So now that we have an opening, she left Alhambra and came back. And so we have high hopes for her. She's a Monterey Park resident, went to ELAC, loves the community. here, wants to get back to the community. She's really focused on providing services to the people that call the station and providing the officers with the assistance they need. So two fantastic employees that I wanted to introduce to you tonight. Any questions that people have, any inquiries, anything they need from the police department, this is the easiest way to get a hold of us. We drive around in cars that everybody can recognize, and we're always here for the community for whatever they need. Little, big, it doesn't matter. We can handle the whole thing. Any questions? Mr. Mayor? Thank you, Chief, for that report and also for those numbers.

We appreciate you combining those and also the success on housing for houseless people.

So we appreciate that.

I know that that's actually a really good feat. So appreciate all the work that your team is doing on this.

Council Member Lo?

Yes, thank you.

And Chief, again, thank you and the entire police department for being out there every day for our community and know that this community highly values its first responders very much.

Yes. Question.

So I know, again, thank you for also working with us in the community to revitalize the Neighborhood Watch program. So right now you said you've had nine meetings.

Does that mean that we have nine, I guess, reconstituted Neighborhood Watches,

or do you have more meetings coming up?

To date, we've had nine separate neighborhoods

that we brought together and had meetings at.

We'll continue to have meetings at those nine.

We obviously want to grow, and we constantly are doing outreach. The officers now, when they go out on calls, they encourage the people on calls to become part of the program. We're coming up with a multilingual information card that gives, unfortunately, victims of crimes the information that they need to call us and be able to set up these programs. Because a lot of times they're frustrated after something like that, their car's been broken into or something like that, and they want to do something about it. And Neighborhood Watch is a great way to do it.

we can't have officers on every street corner at all times, but having the neighborhood with their eyes and ears open, seeing things that they don't recognize or they don't feel belong,

and have us and call us, that helps us interdict some of these criminals before they victimize the people in our city. But that's our nine separate neighborhoods to date. Okay. Great.

All right. Other questions or comments? Yeah, Chief. Two questions.

The first one is we have four of the homeless cases where we found shelter. Is that temporary shelter or is that permanent shelter?

It's temporary shelter for now. Each case is looked at by our homeless coordinator, Shadeen, and she tries to match them up with long-term solutions.

The short-term solution is we get them off the street and into shelter. The long-term solution is different for each person.

And that's where we can offer, and a lot of cities can't, we offer that wraparound service. It could be that they have an alcohol dependency problem, mental health issue, drug dependency problem. They lost their job. There's a whole host of reasons. We kind of take each case, we sit down with them, and we become their caseworker, and we try to figure out what the long-term solution is. We may not be able to solve the long-term solution within Monterey Park with our resources, but we have so many different places that we can contact that we can, a lot of times, find them long-term solutions. We've worked with the Veterans Administration in particular to find VA housing for some of our homeless veterans that we come across. And a lot of them are very – they don't look for services. They're very private. They don't want to cause a burden to anybody. But when we find them, we find a lot of people that are willing to help them. And we've been able to place some of them in long-term apartments and find them jobs and get them back on their feet. Each case is a little different. But these are short-term housing solutions. It's getting the person off the street, not sleeping behind a business, not sleeping in a park or in a vacant lot or in an encampment, and getting them in shelter and then getting them the wraparound services they need to hopefully continue with that. Unfortunately, we have had relapses. We'll place somebody. They'll be good for two or three months, and the drug dependency is so strong. They leave the program wherever they're at. There's too much temptation, and they come back to the drug program, or they come back to drugs, and we see them come back to Monterey Park. I don't know if it's good or bad, but we ask them, why did you come back to Monterey Park? Because they feel safe here. We're the only homeless team that they trust. We know that they see those black police cars and they see the officers come out with the gray shirts and they know that they're not going to get harassed. You know, they know that those people are actually going to come help them. So they feel safe here. But we do tell them, listen, our job is to get you back on your feet. And if you keep coming back, you know, we're only going to take we're only going to be tolerant for something for a period of time. And then they know that we're very honest with them. it's a it's a problem that unfortunately we're not going to solve but we're going to continue to try

to stop the bleeding yeah and i and i thank you chief and i and i do see that there's there's um folks who actually decline our services yes a lot of them do i mean we can offer the help and if

they refuse to help and and i i have to tell you that if if we get someone who is a problem child

they're out there, they're causing problems for us, they're committing crimes, they refuse services,

then we take enforcement. We still are police officers. And we still can arrest people for stealing stuff from stores if the store wants to press charges, especially. And we do do that.

We get them in the system. And if they're in the system, then maybe the system will help them.

but we don't just turn a blind eye to criminal activity in town, but it's a balanced, it's a, it's a balanced approach. So there's a, there's the handout, but then there's also the hammer if we have to have it. Thank you.

Thank you. Mayor Portemong.

Thanks chief.

Just to, just for my clarity's sake. So the four people sheltered, uh, that's temporary shelter. You mentioned through LASA placements or are we placing them?

I'm not sure about them individually. We have found that LASA does not come through a lot of times.

We have to do it ourselves.

So we're lucky that we have a former LASA employee that works for us.

So she has access to those resources, and she works with them, and they trust her, that LASA does.

But sometimes we can't find a bed. Sometimes we can't find a temporary shelter. And then we do have the ability through some grant funding to be able to manage that ourselves. But we attempt to use LASA because they're the ones that are receiving the funding from the federal government and from the state to do this. So we depend on them for a lot of it, but sometimes they don't come through, unfortunately.

And I know, is there any current forum where we're providing this kind of feedback to LASA?

Oh, yeah. We talk to LASA on a regular basis. We deal with them almost on a daily basis. So they understand this. Their hands are tied, too. Most of the biggest problem, I'll tell you right now, is there aren't enough mental health beds in Los Angeles County. Bottom line. I would, I don't know what the percentage is, but I'm going to say it's about 70% to 80% of the homeless people that we contact have either a drug dependency or mental health or a combination of the two.

And they really need a mental health bed to be able to deal with their issues. Those beds aren't available.

And those are typically from private entities who have the hospitals. For whatever reason, they're not available in Los Angeles County or they're filled or we're on a waiting list. We've had a couple successes with. Court ordered. Mental health for some of our clients here in town.

but it's a six month process to get them to where we can force them to leave the street and go to a

mental institution. Most of the time it's voluntary and we have to find those beds and it's difficult. It's very difficult. We talk about it all the time at the chief level, at the LA County chief level with the County Board of Supervisors, the city managers. We talk about it a lot about the fact that we need mental health beds in Los Angeles County.

And then I believe there's LA County's recommissioning or whatever, putting together another blue ribbon commission on homeless housing and looking at the structure that set up LASA and others to provide these services. And I think, I assume they will be gathering feedback. I want to make sure we are providing that.

We will provide that. They will. They'll have public hearings.

they communicate regularly with the spa groups, with the COG, and we've expressed frustrations

along with every other member of the COG with LASA, and I'm not putting it on LASA.

It's not their fault, but there needs to be a collective community effort in Los Angeles County

to provide those beds. And I don't know if that means the federal government and the state government need to open facilities or find facilities, but that's our problem.

And then I know the county is looking at a potential, well, when Measure H is going to expire in the next few years, and they're examining efforts and options for extending that and expanding that with La Casa now, the new home solutions agency. I want to make sure we are going to provide feedback through there. I know a few San Diego Valley Council members are engaged through the board at La Casa, and I believe to our neighbor to the north, one of our council members in Alhambra is on the Lhasa Commission as well as an appointee for Supervisor Solis. So the more that we can provide this, it sounds like we are providing that, but as they're shaping this whatever funding measure for homeless solutions going into the future.

The city of Monterey Park has a very robust presence at those meetings.

They know our name.

They know our frustrations.

I don't have any problems speaking out at groups like that. I know that's a shock to most of you.

But they know the frustrations. And quite honestly, they look at our net team as a success.

So when we say that this isn't working, they listen to us.

They use us as a model now.

I think they mocked us a little bit at first because we're cops.

They didn't like it.

But now they see that we're actually pretty effective and we do have hearts and feelings. So they like the progress that we've shown here in Monterey Park.

And then kind of related but separate, Are we engaged or watching the care court implementation efforts in L.A. County?

We've been on the Zoom meetings calls. We've been part of that.

I think it's a reimagining of Department 95, the mental health court that's been there for a while.

I hope it works. I hope there's the right judges put in there and the right staff members put in there to be able to manage it appropriately.

The mental health court, I know one of the judges that was on the mental health court for a long time,

and she was very good at what she did, and she took a lot of the cases to heart.

I'm hoping that the same commitment is found within the bench to be able to manage those courts.

But we're looking. We're part of the process. We're on the Zoom calls. We're at the meetings.

Yeah, and if you can keep, I think, level one, appreciate the statistics and the update. I would love to see this on a monthly basis and start to examine trends to see if these are increasing or not or how we're doing. And if there's a way to meld in kind of how we're doing compared to the rest of the...

in our city and their name, where they came from, where they grew up, they know them on a first-name basis.

I don't know if any other city has that.

On the – well, one would love to have this kind of update on a regular basis. For the Neighborhood Watch program, thank you and thank you to the team. Please pass on our appreciation for getting the groups going again and the block captains kind of signed up. If there are other ways to continue to encourage, I assume we're going to put it in the Cascades to encourage people to sign up and form their own way we're watching.

We get it out there a lot.

It's just, I can't twist their arms to do it. And a lot of people just don't want people in their houses.

And are we off for groups?

Are there any incentives we're offering or resources we're making available other than providing an officer?

No, what we do now is we haven't done it with these groups yet because they're brand new.

But if they stay together and they stay working and they stay a viable option in the neighborhood, then we typically provide them with signage.

And the sign you saw up there, the neighborhood watch sign, we have a Monterey Park one that has the police department number on it.

But we put that signage up in their neighborhood. That's kind of the incentive that we have for them.

yeah i'm wondering if we are able to work in on the budget if not this year next year uh right just offsetting some of the costs of refreshments or whatever they're going to host oh we we a lot

of times we do that we do that anyway out of my out of the budget i have okay yeah and hope hope

my girls are my people are great party planners so they do they do some of the people you'd be

surprised some of these neighborhood watch meetings it's a it's quite a feast they put on But we do if they have an issue with that we do provide that

Yeah, so if there are other ways to incentivize or provide resources that the watch the neighborhood watch groups Might need I don't know flashlights. I don't know whatever If that needs to go to the budget, let's make sure we I would encourage us to work that in

resource wise That's it. Thank you chief and thank you for

You know housing those individuals despite the hardships that that would be faced but you try and think and And send our thanks to the NET team for all the work that they do.

Thank you. Thank you.

And so we'll go ahead and I also wanted to move up, if it's okay with Council, one item from the consent calendar item, which is item 3I,

to authorize the interim city manager to extend the license agreement with Chinatown Service Center for use of the Sierra Vista Community Center, if that's okay with Council.

Okay, great.

And do we have a speaker for 3i?

We have one speaker, Peter Eng.

Welcome, Peter. From the Chinatown Service Center.

And then...

Okay, go ahead, Peter. Thank you. Good evening, Mayor Sanchez and council members. Congratulations to our city manager. And it's become from interim to the city manager. You deserve it. Well, thank you for allowing me to speak. I'd like to take this opportunity to give a brief report of how is the resiliency center that we've been doing.

Since the opening in August, about three months almost, of today, we have great, tremendous support from the city of Monterey Park to allow us to use the current facility over at the Sierra Vista Park, the center there. And we have held many workshops, events, and so on, totaling about 157 big and small events. This is from the help of a total of 10 organizations or entities. I would like to mention their names to be on the record. So out of the 10, they are Harold Christian,

the Bureau of Victim Services for the LA County District Attorney Office,

the Chi Chi Foundation, the Asian Pacific Counseling and Treatment Center,

the Advanced Assistance of Southern California, Department of Mental Health from the L.A. County, Center for Healthcare Rights, and the Yellow Chair Yoga Spectrum,

and last but not least, our very own Monterey Park Police Department. In fact, they had a meeting yesterday talking about community safety and so on. So we really appreciate it. And those attended, most of them are female, 60-year-old and up. And totaling, as of today, that we count, it's about 751 people. and out of them, 50 of them have seeked counseling, help from the trauma that derived from the tragic New Year's shooting. So the place is very, very nice. However, it's kind of small, but it's free. What am I going to ask for? All utilities are paid for and all that. We really appreciate it. I think not only that those that might have suffered from the tragedy, but the neighborhood, they have also come and joined all the events that we have held. But we do need a larger space, so we are in the process of looking for slightly larger. However, we might have found it, but we need a little bit more time. So thanks to the city manager and the staff have recommended to extend the lease working with us and we really appreciate it. So I hope that all the council members would be considered giving us that extra six months. That would be really, really nice.

Thank you, Peter, for being here tonight. And thank you for all the work that the Chinatown Service Center has done. You've been an amazing ally here in Monterey Park, but especially since the mass shooting that we had here. I don't know where we would be without the Chinatown Service Center and of course with you and I know that the mayor pro tem And I were with you at a meet at a separate meeting with the small business administration and and

everyone

within that room brought a lot of accolades to you and the work that you're doing to help lead the Chinatown Service Center speaks a lot to your leadership and to the work that you're doing so we appreciate you And the work that you're doing in Chinatown Service Center is doing Any questions or comments from the council on item 3i?

No, I want to thank you, Peter, for all the work and all the work that your team is doing to help lead the Resiliency Center and the programming. It's great to get an update and see how many people have taken advantage of the programming that's been going on at the center and looking forward to the continued partnership among those partners in the city to serve the community. I don't know if you know offhand or if you even ask I know you said about 750 people have come through for the programs How many of those? Are Monterey Park residents versus kind of outside the city and I'm just curious. Oh my report from

our colleagues are Almost all of them are from

Resilience. Oh, wow. Yeah, that's great. That's great to hear. Actually, mr. Mayor. I do yes

Well again, thank you for just running an excellent

Community Resiliency Center. Yesterday, actually, I had the opportunity to go to the

senior cyber

presentation sponsored by City Spectrum as well as OCAGLA.

It was a packed house, and I imagine they were all probably residents of Monterey Park. I'm kind of curious, since you are seeing people coming in to seek services, Are there any issue that you think that, like, I don't know if you use the term gap, but are there any certain issues or concerns or services that people you hear more often

that we could maybe beef up, either with you or seek more resources? Yeah, we are constantly seeking for help. And as Chief Waste just mentioned, we do have certain individuals that hang around over there.

So we try our best to help them as well.

But as far as other resources, we are constantly getting in touch with the county and the state. And now we are also applying for the federal assistance so that we can expand our service even more. So this grant, if we are successful in getting it, it would be about a three-year-long grant. It's cutting from August, already started.

Great.

I'm happy to move this item. I don't know if we need a note just for the record that Councilmember Ngo had to.

Yes, Mr. Mayor, members of the Council, ordinarily I'd have the Councilmember announce for himself,

but he is recusing himself in an abundance of caution for a potential economic conflict with his employer.

And he happens to sit on the board for financial service.

Well, thank you so much, Peter, again. And a motion's been made, and so if we can second it by Council Member Yu, and if we can take a vote.

Oh, vote again?

Approved unanimously.

Thank you so much, Peter. Thank you very much. And thank you.

And we're looking forward to the ribbon cutting for the permanent.

Yes, yes. Oh, yeah.

Thank you.

Or if we need to do a new one for the extension.

Thank you.

I know we have a couple of new business item presentations from staff. And thank you. I'd like to move some of these items up if it's okay with Council Items 5A and Item 5B.

if that's okay with council

okay here okay thank you

so do we have a presentation on item 5A

an update on and recommendations for the Monterey Park Rewards Program

yes Mr. Mayor

and members of the council I'm going to give staff just a second to make adjustments we have our economic development

team with us

Joe Torres our economic development manager and Jessica Serrano our community development director will be giving this presentation.

Thank you.

Thank you.

Good evening Mayor, members of the city council.

I'm Jessica Serrano community development director.

The presentation will be made by Joe Torres our economic development manager.

Good evening, Mr. Mayor, Mayor Pro Tem, and members of the Council. It's a pleasure to see you again. Tonight, I present an evaluation of our existing shop local program, Monterey Park Rewards, and propose two options for the City Council's consideration. Since its inception in November 2021, MPK Rewards users have spent almost $800,000 at local businesses and redeemed more than $45,000 in NPK rewards. During that time, the city received almost $13,000 in sales tax revenue

from participating businesses.

However, please note that sales tax revenue generation

is but only a small part of the central goal of a shop local program. Its primary objective is to encourage our local and neighboring residents to keep their hard-earned dollars in our local small business community and promote a circular economy. By those metrics, the program is a resounding success. It is also important to note that it is difficult for staff to assess how a shop local program, dollar for dollar, has directly supported participating businesses. However, it is essential to acknowledge that the city's cost to run Monterey Park Rewards during that same period was around $130,000. And the program has its own challenges, including lack of language translation, high ongoing software costs, and privacy concerns from both users and participating businesses. To address those concerns, your economic development staff research the loyalty program industry to identify more cost-effective alternatives, seeking alternative programs with a more favorable cost-to-benefit ratio, language translations, while delivering comparable outcomes. And I'm happy to report that we've identified a cost-effective alternative,

a similar smartphone-based shop local program called Open Rewards by Blue Dot Technologies.

Open Rewards offers multilingual support, including Chinese and Spanish. It's user-friendly and costs approximately half the cost of MPK Rewards.

There are four...

What are the key attributes of open rewards that are not offered by our current MPK Rewards Program? Number one, it's secure and user friendly. There's no credit card linkage required addressing privacy concerns. Users can earn points through various payment methods including cash. Users upload photos of purchase receipts for point credits or they may still link their cards for a more integrated experience. Number two, merchant convenience Simplified onboarding for businesses. No enrollment or employee training required. The app vendor, Blue Dot Technologies, handles transaction processing and redemptions, reducing administrative burdens on businesses. Number three, multilingual support. Translation to Chinese and Spanish enhances accessibility for our diverse community. addresses the current shortcoming of MPK rewards. And number four, it is a cost-effective solution. The annual cost is approximately half the cost of MPK rewards,

making it significantly more cost-effective.

Looking ahead to the next fiscal year, the Economic Development Division annual budget would be able to fully fund and support the Open Rewards app. It would not need additional funding, applications, or allocations to support the program. Considering these developments, staff presents two potential courses of action for the City Council's consideration. Option number one, terminate MPK rewards and transition to Blue Dot Technologies open rewards.

Let me take that back.

Terminate MPK rewards by December 31, 2023, only because we are required by the program's terms and conditions to provide a 30-day termination notice, appropriating an additional $30,000 to fund final user redemptions for MPK rewards, and authorizing the city manager to execute an agreement with Blue Dot Technologies for open rewards not to exceed $30,000 for six

months.

Staff will provide the city council with an update before the end of the six months to

report back on the progress of open rewards.

The rationale for option one, it provides a seamless transition to a cost-effective and user-friendly program, and it addresses unredeemed points, ensuring a smooth closure of MPK rewards. Option number two, terminate MPK rewards by December 31, appropriating again $30,000 to fund potential final useful redemptions using economic development strategic plan results currently in its development process to determine new programs and initiatives that are best suited for the business community. The rationale for option two, a strategic approach based on future economic development needs. It allows flexibility in choosing the most effective program post-MPK rewards. In conclusion, both options aim to enhance our shop local efforts. And more importantly, with both options, staff strongly recommends the termination of Monterey Park rewards due, among other things, to its high cost, security concerns, and lack of language translation. Mr. Mayor, Mayor Pro Tem, and members of the Council, we deeply value your commitment to promoting local economic development and supporting our small business community. As such, we appreciate your careful consideration of these two options. We look forward to your guidance and directions on this matter. Thank you. I am open to answering questions. and we are also joined here virtually by the president and founder of Blue Dot Technologies, Ms. Sophia Zeng, to answer questions as well.

Thank you. Thank you, Joe, for that report.

And do we have any questions or comments from Council Member Lo?

Mr. Mayor, yes. Thank you, Joe, for that presentation. So, Blue Dot, how long have they been, I guess, in operation as a business entity offering a service?

How long have they been around?

If I may refer that question to the president and founder of Blue Dot Technologies, Sophia.

Sophia, are you on the line? Yes. Are you here? Are you okay?

Yes. I can hear you.

Yes. Great. Thank you. Thank you for having me here. Hello, everyone. this is sophia jane i am the founder and ceo of blue dot um and i'll be happy to answer that question so blue dot was founded in 2019 um inside the city hall so we were founded in

collaboration with a local city's economic development team um i'm sorry where

inside inside of city hall so we're based in the bay area i see correct yes and uh open rewards

program was officially launched last year in 2022 and is now live in over 10 municipalities across the country including the city of las vegas ardenton county of virginia and several more in the

so but currently you have no current uh client cities here in southern california or los angeles

County? We do. So City of Lancaster has been running this program for about a year. City of

Diamond Park just run it for their restaurant region as well. So those are the two cities

within the SoCal region. In the northern California, we're live in Antioch, California. And overall,

Blue Dot has over 150 cities and counties as customers across 20 states. I see.

um mission um choice that you are able to provide uh the service in multiple languages now how are

you able to do that oh great question so as a user downloads the app for the first time they will be

offered a way to switch the language so um immediately even before they take any step in

the app they can switch to a language that they prefer so whether it's mandarin whether it's Spanish, whatever is their preference,

and then they can continue with the rest of the sign-up process in the language that they selected.

So that's the utility that your program offers? Correct, yes.

Because, you know, what I've always been concerned about with NPQ Rewards

is that the company that we're using,

every time we asked them, they kept giving excuses

about why they couldn't do it,

and I'm just intrigued by that, but yet you can.

Yes, yes, correct. and happy to share references with the city that we work with as well.

Question. So, if we terminate MPK rewards though, but everyone who has earned points, how do we make sure that they would use them? I mean, you're saying they have to use them to the

end of the year, which is end of December? Yes, they would, if we terminate MPK rewards, they would have to redeem all these their points by December 31st.

Okay, and then for participating businesses, I mean, they would also then have to, I guess, they would have to honor any points by the end of the year, correct?

Correct. Okay.

You know, I'm, well, I'm just curious, like, you know, with the company that ran MK Rewards, If they do ever ask us for reference, I do hope that we provide, frankly, a disappointment, because I've been very disappointed in the company that does MPA rewards. And chiefly, I find it disappointing that they could not do other languages. And I still even go back to that first presentation we had in which I'd asked the CEO. My understanding was that they were based in Israel, and then they went to Europe, and then they folded in Europe and Israel, and I've always wondered why. and I never did get an explanation. And frankly, even with Blue Dot, no offense, I would like to also get some report on what is your experience in the markets you're in right now. I think before certainly we go down this again,

which again, for the record,

I think there's value in having a rewards program. But I think after the experience we had with the last company, I think it's important for us to also know the market experience of any potential partner.

And with Council's direction, we can have Ms. Zhang come back at the next meeting

to present a more comprehensive background

on Blue Dot Technologies.

Okay. Council Member Go?

Yeah, Joel, thanks for doing this presentation.

Question for you.

Did the EDAC team have a discussion on this, or did you have a presentation with the EDAC team on this?

No, because it is really outside the scope of the EDAC's responsibility.

Okay. But we have been providing them an update on the MPK rewards performance.

They're aware of MPK rewards, so I just thought that they would be... So it's outside the scope, so we're not asking them for approval. I guess what I'm trying to get is they know where MPK rewards stand. are they supportive of this new program or what's the process there again because

it's outside of their scope of responsibility we have not consulted

either regarding this matter okay thank you okay mayor for 10-1 thank you

appreciate all the work and appreciate the presentation on the introduction to this new app thank you to staff I think some amount of work went into looking at options and I think this has been a search that's been going on since some of these concerns which I share around language access and capability which right if it's an English only app misses out on a lot of businesses that are here in Monterey Park that we want to support and a lot of customers that we want to engage with our small businesses and so this language capability I think is extraordinarily critical for whatever kind of program we have to support businesses going forward with that said I would prefer to actually take a further step back on this and include this in the conversation as we proceed with the economic development strategic plan to take have the task force I believe that's being assembled for that in the plan as it's coming together to look at a whole host of options for how we can support our businesses in the community here in Monterey Park and this can be one of those options but I don't want to I I don't want to get in the position where maybe we approve using this new app and then through the conversation of the strategic plan come up with other ideas that might be a better fit for our limited funding that's available to support businesses and have to access idea year in or whatever and have to cut this short again. So I would support some of the recommendation that's here in terms of ending the existing app for MPK rewards and making sure we have an opportunity for everyone who has already earned rewards to spend that in a reasonable amount of time. And then making sure that this is part of the conversation and an option for the strategic plan to consider among a host of other options to support our businesses going into the future as part of the strategic plan discussion to be brought back as part of a menu of things that the council should consider. limited funding that we have to utilize and leverage for support for our businesses. So I'd prefer not to go at this time with a new app and a new direction, and maybe we can hold off on bringing that discussion specifically until the strategic plan's in a better place so that we have a menu of options to consider.

Yes, that would be option number two, Mayor Pro Tem.

I agree with that.

And I think that also part of the questions that some of us have, it sounds like, is just how a lot of these reward apps work in terms of how they're operating in these cities. I know some of the Southern California ones that were mentioned, like Lancaster and Diamond Bar, I, for one, would like to hear from their cities and see what types of what's working, maybe what's not working. before we sign on to another app. But I'm in agreement with the Mayor Pro Tem that I think council might need a little bit more time to kind of discuss this and research this a little bit more before we agree that this is actually the best way to support our small business community

here in Monterey Park.

So would you like to make a motion?

Do you need a motion?

Or could we just table this until later?

Just table it. Okay, so then we'll go ahead and table this so we can

Oh, yes, yeah, so I'll make the motion to support option two as presented by staff which is to Discontinue the existing MPK rewards program and fold this conversation around Shop local application and other opportunities support businesses into the strategic plan to be brought back to the council at a future time

I'll second that. And if we can have a vote.

Approved unanimously.

Thank you.

And I wanted to thank Ms. Zank for being here tonight.

Thank you. Thanks, everyone. It's my pleasure.

And we will, so we'll be noticing all the MPK rewards users about their limited time period to utilize.

Yes, so based on the terms and conditions of MPK rewards,

we would need to notify the community and our users or provide them with a 30-day advance notice regarding the termination

so they would have that 30 days to redeem whatever outstanding points they have.

What's the estimated date of having to use? I'm asking for myself because I have some rewards that I need to use.

When do we need to use them by?

By December 31st. All right.

So lots of Christmas shopping we can do in the next couple of days.

Well, actually, I follow the question.

I know we just won the item, but given the next week is Thanksgiving, how soon can we get the message out there that people have until the 31st?

I mean, can we do it this week?

We can do it almost within 24 or 72 hours.

We can have that notification in the app itself so that users will have a firsthand view of the notification.

We also have a way of communicating via email.

their product has really not been stellar?

Well, the programs and the terms and conditions of the program itself

does not require the city to explain why it's being terminated as long as we have a 30-day advance notice. But we will be happy to entertain inquiries from the community as to why it's being terminated.

Okay.

Okay, great.

Thank you. Thank you.

We'll go ahead and jump to item 5B.

And we just did 5A. 5B.

An ordinance amending the Monterey Park Municipal Code.

Sorry.

All right.

Good evening, Honorable Mayor, Mayor Pro Tem and City Council. Sean Igo, Public Works Director. Tonight you have before you an item amending the Monterey Park Municipal Code, adding Chapter 10.68, which is related to preferential parking. This addition allows the city to improve and make the process for evaluating preferential parking more efficient for residents. In November of 2004, the city adopted the current policy which provides a process for residents to petition the city to establish preferential parking criteria to consider such an area. The newly proposed ordinance will supersede this policy and add Chapter 10.68 to the Monterey Park Municipal Code. As you may recall last Council meeting, we presented an item for preferential parking

approved near ELAC.

This process took several months between evaluating the locations, putting together the report for the Traffic Commission, and then bringing it back to Council for approval. In this case specifically, the Traffic Commission had to Council a meeting due to lack of quorum, which delayed the process by an additional month. In an effort to provide our residents with a more efficient process, the approval process will go directly to City Council for approval and staff will update the traffic commission once approved. The item was brought to the commission at the last meeting that was held on October 26th so they aware of this process change. One item to note is that the resolution will be revised to reflect today's date and not November 1st. With that I can answer any questions.

Thank you Sean for that report. Any questions from Council on this particular item? Council

So you said, Sean, that this was presented to the traffic commission, so they're aware of it?

That's correct. Okay.

And, out of curiosity, was there any feedback?

They just accepted the update that we gave them. They understood the process was going to be more efficient for residents and that this process would allow residents to get their preferential parking, or at least get an answer related to preferential parking a lot quicker.

Okay.

So, but the process still remains in which, let's say, a block wants to create preferential parking, They would still have to then go through signature gathering.

That's correct.

Okay.

Yeah, that process still remains.

This allows the process to be pushed up a little quicker, as opposed to going to traffic commission and coming to council. It goes straight to the city council, and then we update the traffic commission on the process and what area has been evaluated.

So the traffic commission does not do any review anymore?

They would not do the review of this anymore.

No, that's correct.

They would still get an update from staff during their meetings on preferential parking and the changes, but they would not flow through them first

and then come to City Council.

Again, the idea is to make the process more efficient for our residents because, again, in the last case in particular, it delayed their process by over two months. So we want to make sure that our residents, if it's allowable to allow preferential parking in their area,

we want to allow them to have that sooner than later.

Now, but for example,

let's say someone wants to bring up the issue, I mean can they still bring it up to the traffic commission absolutely and so then so then on this proposal that if they bring it up then it would then be deferred to your office to it already is

so our office so public works already takes on the process so if someone wanted to come to traffic commission and bring that up they could definitely do that it would still come to public works we would still evaluate the process but instead of having to take it back to the traffic commission and then to council for approval it would go straight to council and then back to traffic Commission for an update that has been approved or denied.

And again, you said you did present this to the traffic commission.

That's correct. Okay.

Okay.

So, Sean, thanks for this. So, right, currently the process is if someone wants permit parking district, they would get their neighbors, sign petitions, submit that to Public Works, and then Public Works would review that confirm and then schedule a traffic commission meeting to review everything uh and then if traffic approves it would still come to council to it would need council to approve

final just generally the process so traffic commission doesn't approve it they might recommend but they won't do any approvals they'll just do the recommendation to move it along to

city council but generally that's the process correct in our so currently the code requires that it goes to the Traffic Commission to receive input and to provide a recommendation. So the recommendation today is to not require the Traffic Commission recommendation.

That's correct. That's correct.

And again, it's just to provide more efficient services to our residents.

How long?

I mean, what's the typical process? I know this doesn't happen all the time, but what's the typical process? How long does it usually take? Like, for example, the one we just approved left?

Usually a few weeks.

So if someone makes a request, then we just have to evaluate daytime and sometimes nighttime conditions to see how traffic or how parking is along that area. And then if we can do that within a week, then we can start providing the report. So a few weeks we can usually turn it around. So again, because council meets twice a month, it allows us to have more opportunities to bring it to council as opposed to traffic commission once a month. And if they don't have a meeting, then it pushes that at another month. So there's more meetings for council to hear this and be able to approve or deny it.

I would still prefer understanding some of the issues that traffic I would still prefer that it go through traffic commission when feasible if this doesn't preclude that from being the process I think is right I would still like to have traffic commission review and provide a recommendation about permit parking districts before it comes to council when feasible but if right if we're having problems scheduling a traffic commission meeting then this would allow bypassing the traffic Commission to go straight to council if

we're having issues the traffic Commission right yeah we can still take

things that we will still take the item to traffic Commission if your desire is to have it before that's currently the process that we have so I'm understanding what you're trying to say we if it's a problem that we can still take it to council and then take it back to them we can still do that I don't think it

precludes that yeah so I would support this with that understanding that when possible and feasible it should still go to the traffic Commission for a recommendation before it comes to council but allowing in expedited right process to bypass traffic Commission before it comes to council if if it's if it's not really working to schedule a traffic Commission meeting to to review

this yeah we can evaluate that as part of the process absolutely so I'm sorry

Just to clarify, so are we then establishing so the criteria would be it would only bypass in the event that the traffic commission is not able to meet? But otherwise, if they are able to meet on the item, then it would go through the process and would the exception only be if they are unable to meet or there's no quorum?

So what I would suggest is you keep, so if we're recommending looking at updating our municipal code, keep that as the recommendation. And then internally our policy will be that it'll go to the traffic Commission if it's possible to During that process without delaying the request that makes sense

That's fine with me so to clarify we'll adopt the recommended change the code but internal policy which can be Bypassed by the public works director or the city manager or whatever can go straight to council but generally we should, right, the policy will be to go through a traffic commission.

Correct. Okay. Should that be codified in a motion? I mean, I know you've heard, but should that be part of the motion?

Just so it's on record that we'll go through a process.

Is that something that we need to add to the motion, to the?

Mr. Mayor, members of the council, it's really up to the council.

I can certainly add it into the ordinance right now.

That would require a 10 or 15-minute break for me to add that in for the language that you're satisfied with. alternatively you can just simply reflect it in the meeting minutes and direct the city clerk that it be reflected in the meeting minutes so that if none of us are sitting here we'll be able to go back and check the meeting minutes with regard to the expectations of the city council i would recommend the latter rather than the former simply because otherwise some applicant can point to whatever it is in the code and say well wait a minute i didn't make a stop of the traffic commission and and then there will be a potential for a kerfuffle between the public works department and that applicant saying yes but we couldn't do a quorum for three months or whatever it might be but the understanding and direction from the city council would be this is the way you do it and absent some unusual circumstance we expect that to have happen i.e have a recommendation from the

traffic commission. So, Mayor Portempois is here. So, moves. Okay. Is that clear? That's clear? Yeah. Okay. Yes, I'll make the motion. Second. Seconded by

Council Member Ngo. If we can please take a vote. Approved unanimously. Thank you. All right. I'm going to go ahead and jump us to our consent

calendar items because I know there are certain items we need to get out of we need to discuss. I know that we've already discussed and passed item 3i but are there any items from the consent calendar

council that you would like to move for this? Mr. Mayor? Yes. Are we still doing a presentation

on the community healing fund? There's an update on the

F1A. Yeah we can do that

actually and actually I think I requested that at the last council meeting. Thank you so much. Why don't we do that before we jump to content calendar items? And we have our city treasurer here. Thank you.

Good evening. Sorry I was not here last week, but I do have an update. So as you know, we've already distributed 37 checks. They were for $3,000 each. Our goal as the community healing fund has always been to help the community heal, and that's either through supporting mental health programs, through financial support, and education.

Along those veins, we have now created a training session, which will be on January 18, 2024. It is called the Gun Violence Restraining Order Training, and that will be on January 18, 2024 at 6 p.m.

our group has arranged for a judge a city attorney and county council to help educate the community about the restraining orders and red flag laws and help them learn what's available and how to fill out that restraining order request so we're very happy to announce that

thank you just a quick question

a follow up on the event the location of that event is here?

yes it will be in chambers The council chambers.

Okay. Very good.

And then I know that you mentioned the 37 checks that were disbursed at the amount of $3,000. Was who they were disbursed to, is that something that's public knowledge or shared in any way,

shape, or form? That information is private.

It's maintained private?

Correct. Okay.

And then I don't know if you happen to have an update on this as well, because I know that we've sent 37 checks. Do you know a remaining balance that we have in the healing fund at the moment?

Actually, I was not able to get a balance, but I should be able to get that the next time we meet.

Okay, perfect. Thank you.

Any other questions?

Thank you for, I'm looking forward to this community meeting.

Thank you. Council Member Lo?

Yeah, I just, again, thank you for the presentation. And, again, I'm glad to hear that the committee for the Community Healing Fund is doing this discussion, you know, on red flag law. I think that's something that we need to continue to have. And also, really, I think also thank you for working to accommodate and distribute those checks. I know that this past week was an LA Times article, and that article, you know, certainly illustrated the challenges in the issue of compensation. But I think that overall the article, at least for us, for Monterey Park and the Healing Fund, I think painted us in a very positive light about our own efforts relative to the other funds.

we do thank the city for the support and all the donors that have contributed to our fund

thank you um council member you um just wanted to ask the question maybe repeat the information and

um you said the 37 checks those are distributed to not the victim's family not someone that physically hurt right but just someone who attended the star ball stadium's ballroom and just attended there.

We consider them victims also. They may not have been injured, but they were present, and they did suffer emotional injuries. Okay, thank you.

Thank you, Councilman Brigo.

Thank you, Amy, for kind of being the lead on this.

So I have two questions.

I think I've heard the answer in one of them, which is what's the outstanding balance, and if we get back to that, we'll get back to that. And then the second one is what's kind of like the end goal here, Do we anticipate on closing this out because it was created for a special purpose, and sometimes you need to close that out and move forward?

Our end goal is to close that probably within a month.

see what services or what programs they want to support and we are making those funds available to them if they want to apply. Thank you. Mayor Portempoong?

Thanks Amy and so my question is going to be if there has been any

conversation or thinking around how the healing fund will conclude its

activities and if and how and I know that there's still a lot to do in the community in terms of healing and recovery as well but appreciate everything the volunteer steering committee members have been toiling over and working on over the last almost a year now so I don't know if I think it would be appropriate would like to request that we invite the steering committee members and the volunteers to a council meeting or something to for us to show our appreciation to them and their work over the year when appropriate I don't know if maybe after or soon or after the fund concludes its activities. So appreciate and please pass on our appreciation to all the other steering committee members that have been working really hard. And would love to hear how it sounds like you're accepting applications from and proposals from nonprofits on what funding can support existing programs or other programs that are ideas out there. So if there's a way to help promote that or if we can promote that opportunity to help close out the fund, I think through the Cascades or other avenues, I think would be great. But again, thank you, Amy, for all your work in helping lead the group and the steering committee, all the members there for the work that they've put into this, and looking forward to the workshop on the 18th. And hopefully if that goes well, we can encourage other legal service providers and nonprofits to continue that kind of education in the community going forward too.

Yeah, we're very excited about this training program.

It just gives the public tools that they can use, and they can be the – they can stop violence in the future.

Thank you, Amy, and thank you for the work that you're doing. And just share with the group that, you know, the council is very appreciative of the work that they're doing, and we will – and we plan to, you know, honor and thank them for the work that they're doing, including yourself.

Thank you.

So we'll go ahead and jump to consent calendar items. I know we passed item 3I already. If we can, is there any particular items that council would like to pull?

3E. 3E.

I'll pull 3F.

3F.

I mean 3J but no staff report, just had a question.

And for 3F, is this like a report or abbreviated or report?

I will take the report.

The report, okay. And 3J, just abbreviated report you said?

Very abbreviated. Very abbreviated.

Just a question. Okay. All right.

So we'll go ahead and jump to item 3E.

I'm sorry.

Before we do that, we can have a motion to approve the other items that were not pulled.

So moved.

Okay. Seconded by Council Member U if we can take a vote.

Approved unanimously.

Excellent.

So now we'll go ahead and jump to item 3E for a report.

Good evening, Mayor, Mayor,

Mayor, Council Members. This is Martha Garcia, Finance Director. On February 16th, the city issued pension obligation bonds in the amount of $106 million. The proceeds were used to pay the city's unfunded accrued liability with respect to certain pension benefits of the designated city employees,

the California Public Employees Retirement System, known as CalPERS.

The city is required to make principal and interest payments each year on the outstanding POVs.

The significant increase in interest rates since the issuance of the POVs has decreased the price of the bonds in the secondary market.

If current bondholders are willing to sell bonds back to the city at the discount, the city will generate debt service savings to repurchase the bonds.

So today here in our council chambers, we have Michael Mejia from Ramirez and Company.

We also have, via Zoom, Vanessa Legband from Strandlin Law,

and Michael Bush from Urban Futures, and Wincy Fox, also from Urban Futures, if you guys have any questions after Michael presents.

good evening uh mayor and members of the city council we have a brief uh slide deck here that we're going to go through uh it's going to be short i promise and uh very very direct here so if we go to this slide here um what we did is we wanted to just lay out a little bit of a

background of the transaction and sort of the the steps that have happened since the transaction was completed. So back in 2021, the city, as Martha mentioned, the city issued these pension obligation bonds. And when they were issued, they were issued at an incredible time. The city had very strong credit ratings. There was very low interest rate environment, and we executed on the transaction very successfully. And so you were able to secure a very, very attractive interest

rate. Since then, inflation hit all-time highs back in June of 2022 at 9.1 percent. To combat inflation, the Federal Reserve began a program of increasing interest rates to essentially cool down the economy. In that effort, the current Fed funds rate, it's 5.5 percent, which is significantly higher than it was at the time that we issued the bonds. And so what happens as as Martha mentioned, in the secondary market, as interest rates go up, the prices of bonds fall. And so what we want to do in the next slide, we wanted to really kind of give a broad overview of how that happens. So bonds, taxable bonds, when they're sold, they're sold at what's called

par. So face value, 100 cents on the dollar. What happens is that when those bonds are issued after or they were sold, they still exist in the secondary market, and investors will buy and sell them. And so essentially the bond price is calculated as what's called the present value of all the future cash flows. And that present value is essentially discounted by the market yield, essentially. And so because of that, because the market yield went up,

so it's the denominator, the price of the bonds fell. And so what we show here on the right-hand side is a screenshot of what the bond price would be of your specific bond, the final maturity of the pension obligation bonds. And what it shows there is that as of Monday, what is it, I think it's 12 p.m. New York time, the estimated value of your bonds was 66 cents on the dollar. And so remember, we sold these bonds at 100 cents on the dollar,

but because interest rates went up, the bond price that was calculated by, it's called Bloomberg Valuation Services, would have been at 60 cents on the dollar on Monday. So you could have bought that, theoretically, you could have bought that bond at 60 cents on the dollar. And so what does that mean for you? So we'll go to the next slide, please. So what we did here is we summarized what the economics would more or less look like if we purchased those bonds at that $66 price. We added a 5% sort of cushion just because market moves at every moment of the day. And so we wanted to present something that, you know, took into account and gave us a little bit of a cushion, you know, because, again, we don't know what the market's doing at every moment in time. So the analysis assumes that the trade settles so that, you know, we're in the market and the actual purchase happens on November 22nd. we assume a bond price of 71.8, which is, again, 5% higher than what we saw in the prior slide. And again, that's that cushion that we were talking about. And we added issuance cost and what's called accrued interest. So essentially the interest that would have had to be paid to the investor from the last principal and interest payment to the day of the execution of the trade. So assuming all of that and assuming that you made a $4 million commitment, so that means that we would spend $4 million to purchase the bonds and then the issuance cost, the accrued interest, all that, the avoided debt service or the reduction in debt service that you would see would be $7.9 million. And so this is really a breakdown of sort of the economics of the transaction.

So if you go to the next slide here, there's a lot of numbers, and we're not really going to delve into that, but what we want to do here is present a sensitivity analysis,

so really kind of show how the economics get impacted by different bond prices. Now, before kind of ending this here, what we wanted to do is really we want to make something really kind of clear, that, you know, the bond market operates a lot like the real estate market in one sense.

And in the sense that I'm talking about is that, so let's say, for example, you know, you see houses in a certain community. And one house might be sold in that community at a certain, you know, a certain dollar price.

So based on that dollar price, we can deduct or you can see comparables that all the houses in that neighborhood would theoretically sell for a comparable price, right? Now, here's the thing, that you might want to buy someone's house, but that person that lives in that house may not want to sell that house. They may not want to move because that's their dream home. They may, you know, think that they could get a higher price at some time in the future. And so there's no guarantee that you could buy that house just because there's that comparable. The bond market is very similar in that respect that, you know, we, moving forward with this transaction, we would make a best effort to go out and buy the bonds. at the market price, whatever that market price may be, we have a data point here showing us that as of Monday, the market price was 66 cents on the dollar. Again, we would make the best effort to go ahead and buy those bonds at that market price to generate the economic benefit that you saw in the prior slide. But again, there's no guarantee that investors are going to want to sell their bonds. And that may be for a lot of reasons that, again, might be out of our control. So some investors might just really like Monterey Park bonds. And we've seen that in other transactions that investors really like the securities that they purchase. They want to hold on to them to maturity. There might be a situation where an investor doesn't want to take the loss, right? They might have bought the bonds at 100 cents on the dollar. They may not want to take that loss of selling them at 66 cents on the dollar. But there might be a case where some investors might want to sell those securities. And so, again, approving this item or moving forward with the transaction, we would, again, make a best effort to go and purchase the securities at the market price to generate the economic benefit that you see here. So why don't I stop there? I think we have some people on the line, but if you all have any questions, we can definitely answer them.

Thank you for being here tonight and for the presentation and that information. Are there any questions or comments from Council?

We'll start with Council Member Yu.

Hi, I just wanted to have a question, and then I wanted to express my opinion later. So I thought we did it for 2.66% back in 2021. So now when you make the presentation, it's 3.021%. So what's the difference?

Great question. So the 2.6% that you're describing, that is the overall borrowing cost of the transaction. So the transaction is basically structured by, you know, maturities that have, we're going to mature in 2025, 26, 27. What we're looking at here, we're triangulating on just the final maturity. So just that final maturity has that 3% that you saw there. When you took into account the entire transaction, because again, you have maturities that are shorter than others, the overall borrowing cost was that I believe 2.6 percent that you mentioned. Got it. Both things are technically right.

Sure. I wanted to give a little history about the decision. So I actually prefer to do the buyback. We did the pension obligations bond back in 2021, knowing that we can lock down the Lost interest rate, I mean at the time of 2.66, and save the city over $55 million in 25 years. So we expect to save half of the bond value in 25 years.

But now if we can do the buyback, we can make 33% right away instead of 50% over 25 years. Since the money that we buy back the bond can only be used to pay down the pension debts, we cannot use it elsewhere. So with that case, we can only use the formula.

I suggest you do the buyback now to capture the 33% saving right away. But, okay, 33% that I know that from 66%, which is the bond discount,

you mentioned it at the presentation, so we can save about 33%.

But when you mentioned about we buy back $4 million, that you said we can pay down the debts of $7.9 million, so almost double. So it set also the different calculations adding...

is your what is the current debt service that you're going to be paying and then what would be the debt service less that the four million of bonds that we would purchase right now it's

important to note that the commitment is four million but because we're buying the bonds at a dollar price that's under par so under a hundred we're actually buying more than four million right

right and so what you see there that avoided debt service that detail there and again sorry that

We try to make the numbers as big as we can, but what that shows is essentially what the difference between the do-nothing scenario and the debt service that would happen after we made that purchase. And so that's the sort of debt service that's avoided, if you will.

Okay, got it. So thank you so much that, yeah, I'm in favor of the buyback, so thank you so much. Thank you. Council Member Gung?

Yeah, let me try to lay this down from a layman's standpoint. so that we understand the math here. So what you're saying is if we use $4 million today, let's say we did it on Monday, we are actually going to save $7.9 million, the cumulative payments of all debt service between now and the bond expiration of 2043, which is 20 years. Spend $4 million today, save $7.9 million over a 20-year stretch. That's essentially what you're saying. And that's assuming that the bondholders are willing to sell. I like the perfect example. I want to buy that house, but that doesn't mean the seller wants to sell the house to you.

That's right. Right? Okay.

So that's first.

The $4 million we have today, I like Martha and Ashley, the Chandler folks who are helping us with an investment strategy, You figure out if we had $4 million to invest today based on what the market is going to do in 20 years, will we get more than $7.9 million? That's the alternative math we're talking about.

Correct? Yeah. Okay.

Then my third point is 3.02% versus 2.66%.

Of course, we all like the Lor percentages we're paying here. Those are important numbers. In your view, what is the kind of average rate in bonds over the last 20, 25 years? My point being, is that 3.021%? Is that a higher than average rate or is that a Lor than average rate over the last 25 years?

For this type of security? Yes. For this type of credit? Right.

That was when we issued the debt, it was the Lost pension obligation bond that had been ever issued in the history of the municipal market.

So it is still a very low rate, which, again, we as a group need to decide. You know, it's like everyone has a checking account and a savings account. And you have plenty of money, but you still go get a mortgage for your car or your house. for the purpose of you want the flexibility of borrowing, one, because it's a Lor tax rate and it's tax deductible, two, you want your money to do something else with it. So the question we need to ask ourselves is, for $4 million, are we better off using that $4 million to invest and grow at a clip that's greater than $7.9 million over 20 years, or are we better off spending 7.7, using the 4 million to save 7.9 million over the next 20 years left?

Yeah, so, sure. Is that the correct mathematics? No, absolutely, absolutely. And again, I think, I'm not sure if there was a question there, but I do have a comment. So, for example, right now, the city is earning on LEIF 3.15%.

If you go to the second slide, please. So on the top right, you see there, it says yield to worst.

So what that tells you is that buying these bonds at 66 cents on the dollar, the yield that you're locking in would be equivalent to 6.2%,

which is about double what you're earning right now in LEIF. again and that's just a moment in time but as we know the rates are significantly higher than you know than they were during COVID again interest rates move at all times and so that's just one data point on you know what the numbers are.

I appreciate that I wish we had the channel of folks to explain if they can get above the 6.6

percent because that would be very compelling. We do have our one of our financial analysts

uh wins uh wincy fox she might be able to provide more information about um

did we lose her she's right there she is good evening mayor and city council um i think those

are spot on excellent questions and that is is for the city council to decide um even chandler will not be able to tell you what they can make in the next 20 years so it's a question of you know do

you take this $4 million, if you can actually successfully repurchase bonds at such a deep

discount, that will likely outweigh interest earnings because we don't know in the next 20 years, again, likely won't be as high interest earnings as it is currently. But I think the ultimate question also will be, Mike mentioned, there may not be any sellers.

So, you know, if the city council decides that it's worth it to give it a shot, because if you can buy it at a super discount, then you can save a lot of money. But at what point,

if it's not successful, do you then want to repurpose those monies? And how long do you want to hold that liquid is, I think, ultimately the question for council as well.

We also mentioned in the staff report another alternative use of monies, not only is just to

hold it with investments, but you could also consider taking

that money and making additional discretionary payments to pay

off the new basis that have occurred with CalPERS

in the last year.

You just follow up. I think, Martha, I think what the ask is up to $4 million for this repayment if we should move forward with it. Correct. Up to $4 million, not necessarily $4 million, but up to $4 million.

Correct.

Mayor Proton?

I mean, taking a step back, how did we arrive at the $4 million that we're talking about right now?

We have a tentative end of year for fiscal year 2023 of $4.4 million in that fund. uh just so we haven't we have 4.4 million in that fund that could be used to as as wincie says to pay off to to send to calpers to um to reduce our new ual debt that we have or we can uh try to repurchase some of our our bonds but we cannot use that money for anything else so this this is

surplus from the existing pension tax generated revenue. Okay. And that's the total amount we have available in the pension?

As of June 30th, 2023, yes. Do we expect

additional surplus in future years? Potentially, yes.

So we could go to do this? Yes. We could do other things with it. But we do

have a new UAL. We used to be at zero when we

paid it off but it has increased and I'll bring it back during budget

discussions but it has increased okay I might share councilmember goes kind of

question on right what if we have money lying around what's the best use for that and how do we get a better return whether it's this buyback of some of our a portion of our pension operation bond or continue to prepay some of our UAL or if there is a way to invest this, there are CDs or short-term bonds that we potentially could look at that are paying, I think, 5-plus percent interest, although those terms may not be for 25 years,

but for a few years.

So I don't know.

I know that the action that's being recommended

is to authorize this amount,

but I would want to see if we can look at these other options, too, to see what makes the most sense

and saves us the most money so this is just an option we have many options we can take direction

from council to what other options we can look at but again we're here just to present one of

the many options that we have for uh the surplus in this fund and martha just so i understand it

so the four million dollars one more time um can be used and just just uh can you give us some examples other than ones you've already mentioned that where we can do with so it's a special

revenue so it can only be used for pension so it can be used to pay off to pay off our ual our

unfunded liability with uh calpers we can use it to repurchase some more bonds we can use it to

also pay uh our active um recurring uh pension pension payments for our active employees i guess

Thanks to the Mayor Pro Temp's point, I just wanted to see what other potential options we could explore before we commit ourselves to something. But that being said, you know, this is also a very attractive option.

Council Member Lo.

A question.

What is right now our unfunded liability? What is it currently?

I don't have the exact number.

I'll be bringing it back during our budget discussions.

But it is in the millions.

and that's due to the calpers return not come not meeting right and they cut the discount again yeah and they're trying to cut to six and a half where they at now right there i think they're at

6.8 and they're gonna if they want to cut more yet sorry ual is gonna continue to go up yes

but we're in good standing we're doing really good our auditors compared to a lot of others Right because we we own more than 90% of our pension. So we're in good as long as we're in the 90% we're in good standing

If we pursue this option, I Think it was in the staff report, but I can't remember How much are we out for fee or if we're if we want to initiate this option without necessarily exercising it How much are we out any amount for fees or or anything? What's the cost of exploring this option?

So the fees, so our fees only get paid if we execute the transaction.

The municipal advisor's fees only get paid if you execute the transaction.

I believe the only fee, it's a $25,000 fee for the attorney that, I guess, that filed all the paperwork on that.

I mean, so given that I think very clear we want to explore options and maybe we can bring this back when we're ready to execute a specific agreement. I don't know if you need, it sounds like you need authorization from the council tonight to at least explore this option. It sounds like it's not going to cost us very much to at least have these explorations. So I'm happy to support this item and the recommendation. but knowing that staff will bring back to the council, explore analysis of these different options for us to consider in terms of saving interest costs on our POV. So kind of best case scenarios for us.

So I could be clear.

You're asking us to explore maybe Chandler, you know,

investing with Chandler, the 4 million, or investing with CDs, the 4 million. but also possibly moving forward with this project because we would have to hold off on the project if we're going to look at the other items.

Yeah, no, if Chandler comes back with options for us that have better interest savings or better returns than what we're seeing based off of our analysis here, I would definitely want to explore those other options too unless there's some sort of urgency. I mean, I know that interest rates can change and the value of our bonds will maybe change. But I think this is worth some additional new diligence on the other options simmering back to council, unless I'm understanding this differently.

I think maybe we need to just, the motion would be to continue to proceed with Mr. Ramirez in exploring this option. At the same time, there's still time out there. Also check with our other asset investment managers to figure out if there's a better alternative than the savings here. And then ultimately I need to come back to City Council for approval, whichever direction we take. But it's kind of like a dual track to proceed here and also to explore.

And before we do that, we have a Council Member, you, as a comment.

I wanted to tell you guys that this is not something will be there all the time. This is a one-time lifetime I've seen.

The lifetime dropped to the Lost within like two years. We dropped 33% on bond market in two years.

I haven't seen something like that in my life because the reason we have a very high inflation rate, so the interest rate increased dramatically within the two years, and the war, and a lot of things happened. So it just makes it a once-in-a-lifetime opportunity. The window is about two months. If we wanted to capture that 33%, it's only two months. If we decided later, then the 33% will go back up to maybe just 20%, 15%. So it will not be there all the time. So we are making a decision now within a very short window. It's not like they were here all the time waiting for you. No. So the bond price usually will not drop that much. It will be just a single digit. but even interest rate goes up, we will not...

due to the inflation. So I wanted to tell you that this is a once-in-a-lifetime opportunity,

33% saving within two years. Amazing.

We did actually make a very good decision two years ago that we captured the Lost interest rate. That's how we can win a jet pot, I would say, right now. And we are thinking about how to get the jet pot,

which is one time, or you want it to lay out for 25 years. So let's say you win a lottery. Then people will ask you, do you want to get it one time, which is a little bit less, or lay it out to the next 20 years. So this is now we're making a decision about a jet pod.

And so I suggest that we only $4 million we have available. I wish we had $40 million or buy back the whole thing. But, yeah, we only have $4 million available. and I really suggest hopefully the market can take on the $4 million and we can pay back almost $8 million on our debts. If we have more money to accumulate in the account, then we can think about using it elsewhere or maybe pay back to other unfunded liabilities. But this is not the options that will stay there for a long time. We can even wait until the next council meeting to make decisions.

Well, given the sense of, oh, sorry, City Manager.

Mr. Mayor, members of the Council, if I may, definitely during our last conversations with Chandler,

they had explained to us that it's difficult and they cannot do a projection in the future, correct? They couldn't tell us what the market's going to do in the future. They did give us examples of the last 20 years. So if we're asking for assistance in trying to figure out what we can do with this fund that's available in our reserve, I think Chandler's going to probably be able to look at history and tell us what potentially happened over time in the past. But projecting forward, as Wincy had mentioned, it's difficult for them to be able to project the future of what the market's going to look like. and maybe i don't know if wendy's still on maybe she can jump back in and just try to describe that a little bit better so for staff we do need um if council is um i i'm uncertain about the direction at this time if council would like us to proceed with this option and maybe bring it back at the next council meeting i think we could hear also from michael on the timing of of this item but the do both or the parallel approach Council Member Ngo, I'm not sure

that that approach is doable for

staff because if we're trying to head into one direction, I'm not sure that we're going to be able

to bring back other

options if we're asking to go forward with this option. So we're looking for some more clarification. So Wincy and Michael, if you could help with those

clarifications, please. Is Lindsay still on? Wincy should be.

Yes, I'm still on.

I don't know if we can ask her just in terms of this type of investment that we're trying to do right now. Would you say, would you recommend, and would you encourage us to move forward with this investment?

Yeah, so I applaud all of the council for the thoughtfulness behind this analysis. I do want to say that none of these are, these are all great options, actually. and no one can say for certain which one will be better until 20 years have passed. And so really, I think what the decision right now is, do we want to give it a try? Because at the end of the day, as Mike mentioned, there's a price out there. We don't know what the price will be. We don't know if anyone's interested. And so it's hard to do the analysis because if someone's interested in a price of 75, it's a little bit different than 70. And so going out and seeing and giving it a try, I don't think is, it's probably a good thing to see what's out there. And then, you know, in two months and three months, we consider other options if it's not, none of the bonds are being sold. It's really just going out there and see if there's anyone interested. And, you know, there's really one non-contingent fee. And so just going out there and giving it a try, I don't think is a bad option.

So if I understand, Council Member Lo. So thank you. So if we say we're to move this item so that the term is like we can pull back in two or three months, especially if the bond market doesn't respond how we think it might?

Yeah. So the way that we structure the transaction is that no money actually gets, you actually don't move any money whatsoever until the actual transaction gets executed. So there's about two weeks left in the year, really, of active market participation, right? Because next week, it's Thanksgiving week, and things are pretty much dead. And then you have two weeks in the beginning of December, and then after that, it's the holidays, and everybody's pretty much gone, right? And, you know, interest rates keep moving, but that's really when all the activity is happening in just financial markets. um so but specifically to your question is that the the city does not make a cash outlay until we uh ramirez and company goes out and actually purchase the bonds successfully and then once the bonds are purchased successfully we then deliver them to what's called your trustee who is essentially the person that or the firm that manages all your payments and then once that happens then you guys are the city would then uh make ramirez whole so uh we would go out and essentially make an effort to purchase the bonds under the guidance of your executive team here to meet certain, let's call it price thresholds. And then if we're able to meet those price thresholds, then and only then, we would then execute the transaction if there's a willing seller, deliver the securities, and then the city would then pay Ramirez for essentially the securities that we purchased on your behalf. And so no money gets exchanged until there's a

successful transaction. And walk us through a timeline. I mean, I know you're saying the holidays are, but you're saying more, this is more like something that will happen in January or

February? No, no. So for example, if the item's approved today, I spoke to our head trader on the taxable side this afternoon, and essentially we would try to get into the market as quickly as possible. So we would potentially try to execute the transaction on Friday or maybe Monday or Tuesday of next week just because of the holiday. Once the transaction gets executed, there's about a two-day settlement that we set up in order to give us time to be able to deliver the securities and then for the city to have time to essentially pay us for the securities that we purchased on your behalf.

So, Mario, I'll ask a simple question.

Sure.

We're looking at it from our side of the ledger.

Of course.

You are the bondholder. You hold the coupon at 3%. You bought this thing two years ago. What's in it for you to sell this?

Sure. So it depends who the... So in this hypothetical scenario, I'm going to give you, I think, three different examples. So the first example...

So let's say, for example, I'm an insurance company. If I'm an insurance company, I don't necessarily have to mark-to-market, which means that I don't have to on my financial statements

book a loss. So if I, for example, took purchase securities and then tied them to an insurance policy, why would I take the loss? There's no point in selling them back to you, right?

If, for example, I'm a trader, right, and I'm trying to make a market and I see that there's an opportunity of potentially selling securities and then reinvest those proceeds in higher yielding assets that I could purchase at this moment in time, then maybe I would do it. And so every investor is going to have their own psychology, which is why we're saying that we would go out and make a market for the securities, essentially purchase them. But there's no guarantee that there's going to be a willing seller, especially at the prices that you're seeing here.

So essentially the seller is looking for opportunities to basically cash out and invest that money in other places. It means they have the foresight to say there's other opportunities out there where I can make more versus the 3%. take a loss now and redivest that money to do something else.

That could be one scenario that one investor may think about. Yes.

Mayor Potemang.

Understanding that, right, well, one, my viewpoint is that there's no perfect way to time the market, right? You just can't, you don't know where things are going to happen and what's going to happen. And knowing that we have not done an analysis on, right, what the impact of prepaying our additional UAL to PERS would be, I mean, that could compare actually very favorably if there is a 6.5% assumed rate of return to the savings that we would get on purchasing back some of the pension obligation bonds. We don't know, and I'd rather err on the side of caution and doing a little bit more work as opposed to just trying to time and move forward with this specific recommendation if we haven't looked at others already yet. And if that's the case,

I don't know if,

and I'll look to Carl to correct me.

If we,

I understand that we need to be able to move quickly if we want to take advantage of this into one of the speaker's earlier point.

These are all good options.

They're all going to help us reduce future interest costs, whether that's prepaying PERS, UAL, or buying back our bonds and whatever.

But I would prefer to be a little bit more cautious, do some more analysis and work, see what our options are. But I would be willing to give staff flexibility, if we can, to authorize up to $4 million for staff to do the analysis and to execute one of these options that we've been talking about to save us on insurance costs. I don't know if that needs to come back specifically to Council for Action if we're going to sell buy-back bonds versus paying down UAL or if we can give staff authority to do that.

Mr. Mayor, members of the Council, you can certainly delegate that authority.

One thought that I will throw out there for the authority

is authorizing the Investment Policy Committee

to make that decision based upon the criteria

from the City Council.

And the reason for that is, of course, you have an elected city treasurer that sits on the investment policy committee, and that's already established, and it also has staff members on it. So you have sort of a brain trust there for making that determination. So I think that's one option for you. Otherwise, you can simply authorize the city manager or designee to make the decision.

I'm going to look to Martha to see if that may even make sense for us to do, to have that kind of flexibility for staff to and the investment committee to work that way it would

definitely if we if it's delegated to our city manager or the investment committee because we

can't move we can't do one if we do one we can't do the other so if we move forward with the

repurchase then it would be mute to do looking into the four million and what kind of a income

revenue would have generated in the past 20 years. So if we first meet with Chandler and discuss it with them

and then maybe by next week we can

then move forward with this

decide which way we're going to go by next week that would be much faster and we can still be in the market. Would that

work? Michael? Yeah, absolutely.

That being said,

I'm happy to make a motion

to delegate authority of the investment committee to analyze the options quickly do some due diligence the next week and give them the authority to decide to move on the right and the most valuable ROI investment option for the $4 million surplus

we have in our pension fund. Okay. Does that make sense? I'll second that. I think that makes sense.

And that includes this option too, right? Yes. It will include this option, yes. Okay. But knowing

that staff will, and we're asking staff to report back on what the ultimate decision was made and what the potential savings is going to be.

Okay. Yes, we could do that.

Okay. So there's a motion and a second by Council Member Ngo,

if we can take a vote.

Oh, one more time. One more time.

Approved unanimously.

Thank you. And thank you for your time and for the explanations and for answering all of our questions.

Absolutely. It's a pleasure. I've been working with the city for many years now,

And yeah, I feel like you know, I feel like it's my hometown. So absolutely

There's a second item and he's not done yet. Oh, he's

So we'll go ahead and jump to item 3f yeah, we're playing up the PowerPoint. Okay

Okay, I'll try to go through this PowerPoint quickly, and then I'll pass it on to the finance team. And we also have Rick Simonson from HF&H, who did the water rate study analysis.

So this is the next slide, please.

So we are set for December 6th to do a public hearing for the water rate adjustments.

We sent out our notices on October 16th.

It was Proposition 218 notices introducing the possible water increase of 32%, 8%, 8%, 7%, and then 8% for a span of five years from fiscal year 24 ending in fiscal year 28.

and we're going to be also discussing the issuance of bonds

for the needed improvements of the water system

that could Lor our cumulative rate increases

and it will also help accelerate some of our much-needed projects.

On September 23rd, Council received the water

goes to 32-8878 for the fiscal years ending with 2024 and 2028. This rate structure is based on a cash-funded pay-as-you-go infrastructure rate structure.

So if we were to continue with this rate structure, we would, as revenue is received,

we would then budget for it to be able to do our infrastructure.

then we would also but council can decide to go Lor than the than the than the current rate structure than the proposed rate structure but they can't go higher but we so this is the highest that we can go but we can't go Lor next slide please so what our finance team is here and our and rick from hfnh they're here to discuss and answer questions for a possible 20 million dollar

water bond for infrastructure for the next three years.

If we were to finance, it would accelerate our much-needed projects that we have quite a bit

aging infrastructure, and we need new water meters. Our water meters are currently not

failing, and some are not recording the right amount of water usage.

If we were to finance for $20 million, it would drop the first year to 26%, and it would drop the last year to 7% in that same 20-year period.

The bonding takes approximately four months to complete, and approving this resolution tonight engages the financing team and directs staff to begin financing the financing process, but does not commit to issuing the bonds. So today it just directs us,

but we're not committed to doing it until we come back.

The staff will return in January of 2024 for the bond approval,

and then financing would close in February of 2024.

So this is a table showing the rates.

if we were to do pay-as-you-go at 32, 8, 8, 7, and 8, and then we'd have a, if we bond it for $20 million, we would be able to reduce the first year to 26%.

So that's our table.

And then I wanted to show you a few pictures of our aging

and our water meters that are not functioning correctly.

So these are some pictures of our water meters that are leaking,

and they're not properly identifying how much water usage some of our residents and commercial buildings are using. So we need to replace them so that we can capture the correct revenue for our city. And then we have some pictures of some piping that's aged.

Next slide, please.

We have pictures of piping, water pipes, that we have a lot of aging, wider pipes,

and there's a lot of leakage throughout the city.

We do have Sean here from a public works director that can also talk a little bit more about aging infrastructure.

And we have another picture to show. You know, if we see we have a lot of water leaks, a big one there, flooding of aging infrastructure that we really need to accelerate some of these projects.

And with the pay as you go, we would not be able to do that. So I'm going to pass it back on, back to the team.

so we have Vanessa

our bond counselor and we have Wincy

from Urban Futures she's our financial advisor and we have Rick

from HFNH and then we have Michael Mejia here our money guy

alright thank you so much for that report

it's obvious that we desperately need to do something about our infrastructure But are there any questions from Council or comments?

I'll start with Council Member Lo. Sure, thank you.

Martha, again, thank you for that presentation.

You know, especially for the audience watching, I mean, you know, even a 26% rate change.

I mean, can you kind of, like, walk – I mean, I know it's a percentage, but what does that mean, like, to an average water bill? Knowing that water bills vary, of course, by size and also usage. But I'm just again, I think that's always helpful for people to wrap their hands around it

Rick would you like to answer that question or I can

He's coming on

Good evening. Yeah, I'm trying to pull up the model now

Martha if you have that answer feel free to chime in I believe when I looked at when it was a 32%

It was for the average household. It was like a dollar more a month

For the average household

but Rick could get the model and give more detail.

A dollar more a month?

Yeah, because the meters are, we changed the structure of the meters

to and how they're charged.

That's on average, right?

You said that's on average?

On average, right. But it would just be for the residents

like a single family home.

Yeah, so I've pulled that up. For average water use, which is 10 units of water each month,

it would increase the charge $2.69.

A month or by monthly?

This is in a monthly period. Okay. $2.60 more.

Yeah, and as the rate structure, you have tiered rates.

If you use more water, you'll see a larger increase.

So the 32% increase is not felt equally amongst your customers.

Some will be Lor, some will be higher. I see.

So we're talking about $31.

I mean, I know, but based on what you said, possibly a $31 change annually.

I didn't have the Rick has the actual numbers in front of him and I don't have them in front of me so Rick saying it's two point two dollars and sixty cents a month for the average household and Rick is that the 32 percent or the 26 percent

that is 32 that's in the proposition 218 notes what would be for the 26 percent

Do you have that?

$2.10. That drops to $0.80.

$0.80? $1.90.

That's for single family.

You also have multifamily and commercial customers that are impacted differently. We're seeing larger increases to your multifamily customers.

Okay. Interesting.

And then this question is Sean, actually. How often do we experience, like, these water pipe births? I know that, you know, all of us as residents, you know, will get notices about a street closure because a pipe just burst. And I know there was one that just came out last week. And actually, we have two last week, but I'm just curious. How often are we registering these or detecting these?

Good evening, Mayor and Council. So this can vary.

So I would say on average probably two a month.

Two a month. Yeah, so that's going to vary. But again, it varies. That's in combination.

so it's an average of about two a month over the course of a year okay and the last one we had like

how much water was was lost because of the birth and like between when it was detected and the

repair time i don't have those numbers in front of me but typically for for a normal break you're

probably gonna leave several hundred thousand gallons several hundred thousand several hundred

thousand i just have a question because i know again for those who are watching i mean audience or at home you know i think it's important to like what does that translate to like you know dollars and cents or those who care about our water supplies or having actually water you know what does that mean to our water supply so you're

saying 700,000. Yeah each one each yeah each event so and then you know not only that then we also have our staff time we have you know impacts to residents that are without water for a period of time potentially so there are several

impacts that can be caused by those those main breaks. So in the last breakage

we had how long did it take to repair? I that I again I don't have that

information typically they're going to be four to six hours for for a standard

repair but but me like me said presidents have to do what low water pressure or no

water at all for 10 hours yes potential okay and Sean I just want to add a

follow-up question with what councilmember low said or asked when we go and do fixtures and you're saying that on average to a month I'm assuming and I'm not sure if you can correct me if I'm wrong, but I'm assuming that we are spending more money by fixing problems that are arising as they come in the long term, right, than moving forward with just replacing and fixing and updating our pipes, right? And so moving forward with this might be a better option financially also for the city, right?

That's correct.

It typically is more expensive to come in and make repairs. And then at the end of the day have to come back and replace the pipe so in essence we're duplicating our work right and then

Not to mention the inconvenience and that it's causing residents, but also the amount of time and money that That we pay workers city workers or contracted out

When stuff like this happens, right? That's correct and then if we're just because I see that you brought a lot of pipes here

Just on average, what would you say a lot of the fixtures that you're doing now? most of those pipes are about how old you would say?

They vary. They typically from the 60s is going to be most of them but it truly does vary. We have stuff that's out there that's 80 years old. We have stuff that's 30 or 40 years old. So we have stuff that's going in today that's really a couple months old. So it really does vary. We saw significant upticks I think in the 50s and 60s when development started happening. So again, our infrastructure is aging and we need to start investing in that before we have more significant problems.

Okay. And I'm not a plumber, but on average,

what would you say that pipes like these are meant to last?

How long are they meant to last?

It truly depends on the type of pipe.

I mean, you can see here we have various types of pipe.

We have some that are cast iron. We have ductile iron.

There's various different types of metals. We're converting over to PVC. And so it really does vary. But some, I mean, we have some pipe that could last 100 years old. There's so many factors when it comes into it. Water quality comes into it. Soil types come into it. So it's hard to say how long a true pipe will last because there's so many factors that are involved

But the point is that we 50 to 100 years it's getting very various different ranges depending on location

But a lot of this infrastructure is already extremely old and then we're seeing a lot of the side effects of that with a lot of the

Pipers and stuff like that

Okay, just wanted to clarify something councilmember go. Yeah, I just have a quick question for staff

When was the last time the city had a water rate increase just year just 2017 2017 so it's been at least six years. Okay, so question for Michael if we went out with a 20 million dollar bond today

What would the rate be? Yep, so we looked at that today

the rate would be About four and a half percent when you take into account off these

that will change on a day-to-day basis,

but more or less 4.5 to about 4.6 if you did it today. All right.

So I will give you my personal gut feeling on this, which is we are buying back a 3.026 rate so that we can put in a 4.5% rate. Doesn't make sense to me. However, I will explain this. We are getting this $20 million bond,

for infrastructure purposes.

I see, I don't know if the audience, folks in the audience can see that, but those pipes, they've been around

close to 100 years.

They're basically rotted, right? We need to fix those. So my gut feeling on this is if we're getting the bond to fix the infrastructure,

I'm all for it. If we're getting the bond

to save our community or residents from paying another $2.69 on average a month more? I don't really get that. I'm going to go back with JFK. Ask not what the city can do for you. Ask what you can do for your city. We're talking about $2.69 a month for water rate, which hasn't increased over the last seven years. A Big Mac has increased more than that in the last seven years. and I will be happy to talk to any resident who wants to express their concern about raising the interest rate or raising the water rate on this, but the bottom line is we probably need the bond, Sean, more so for the infrastructure because you're losing millions in gallons of water if it breaks, and you're losing service, you're losing disruption to the city. That's more critical if that's the right understanding.

Yes, that would be a good understanding of what we need to do, why we need to bond.

It's an investment of our infrastructure.

And the bond would help expedite the fixtures and the projects, right?

That's correct.

City Manager?

If I may, Mr. Mayor, members of the Council, just to go back, when there is pipes that burst underground

and staff do a great job of trying to repair them so there's less impact to the residents. Sean, is it correct that the repair that's made is an emergency repair, so it's sometimes just a brace? We're not actually going in and replacing that pipe.

Is that correct?

That's correct. We could do a variety of different things. That's correct.

So there's an example of that here as an option. Or you might be spot repairing, which means the rest of the pipe is still in bad shape and we're just fixing a segment of the pipe. So in those circumstances, it's a temporary fix.

So if we would have had funding, maybe we could have extended it. I don't know.

But to your point, it's just we have various options to do repairs, but it doesn't fix the problem completely.

Mayor Patem.

A series of questions that may be scattered, but it's all apologies in advance. One, I know the item before us is to authorize proceeding on the analysis and research and preparing to bond for 20. The ultimate decision will come back to us. How did we land at $20 million? dollars can you kind of explain what those priority products you identified are sure some of those are

include the water to martha's earlier point the water meter project was about nine million we also have reservoir improvements we have water main replacements so there's various um projects that we have outlined within our cip program um so those are all really already already listed within our cip we also have plc upgrades at various water facilities so there's a variety of different

things we have going into this 20 million dollars and there's no I mean I totally understand I think

the council understands right the benefits of bonding to get right take advantage of current construction costs because I we think I don't think we'll see construction costs deflation anytime soon so the longer we wait if we don't bond right we have to accumulate the cash to do these products we already know we have to do but we probably should have been doing if we had the money the last few years to get ahead of this and to get ahead of continued expected cost inflation for supplies and labor and all that stuff so to get this work done as soon as possible to save in that sense knowing that we'll have to pay interest though but we just don't have the money if we had the money

we wouldn't have to borrow is there are there more than 20 million dollars that

we should be looking at bonding and projects kind of worth that we should be accelerating where we can where we can do that so one of the things we talked about last how we

brought this before council was is that we have a certain bandwidth right we have not only water projects we have sewer projects we have streets projects so we want to make sure that the amount of money that we bond we can complete those projects in the three years that we have to complete them so no different than the street bond that we took out um we're we pushed that line up until you know this month and so we're trying to make sure that we balance our projects while also completing the the ones we can for the 20 million of course we can use more money to complete more projects but we want to make sure that we don't overburden our staff either and not being able to complete those projects in that amount of time and then we're going to ultimately lose that money

uh and then uh you talked about the water our current water meters failing uh We replaced just a few years ago, is that right? A significant portion of our meters with AMR meters. Can you talk in detail what's with the failure rate for our existing meters?

I'll give a high level.

So we replaced about eight, nine years ago, and so they are beginning to fail.

We've had some challenges with the manufacturer.

We've been going back and forth with the manufacturer on how we radiate this. Ultimately, the typical life is 10 to 20 years. So we're reaching a point, but we want to make sure that the infrastructure we put in not only deals with the water loss that we have, but also looks at AMI. So something that we can actually push data out to our residents, give them data that allows them to make smarter decisions with their water use, but also gives us data that allows us to report to the state. As regulations and requirements change, we want to make sure that the infrastructure we put in there is going to be beneficial to the residents and to us. So that's really in a nutshell.

Yeah, and the AMI infrastructure for the smart meters will be similar to what we residents already have in terms of the electric meters that are smart meters.

They can report data.

We can see usage more regularly. It saves costs on our end and allows us to analyze data and be more efficient with our system, too, and detect leaks.

Exactly.

Exactly. And then the benefit to that is that depending the type of technology we go with and how residents want to sign up, they can get leak detection notifications immediately. So instead of having to wait currently, they have to wait two months to be notified of a leak, they can be notified within minutes. So there's huge benefits to not only the city to see the water use, but there's huge benefits to the residents being able to know that they have a leak in their home, especially if they're on vacation out of town.

and then I know that well one but back to the finance question I think I assume this is the same situation as what we were discussing in the item before this but right the analysis that we will be authorizing tonight there will be no costs to the city to do most of that work until and unless the city council authorizes actually moving forward with bonding that's right that's right

so I the reason why I think there's that that lag time is because you know over the next couple

months we would be working on the offering documents the rating presentation it you know

a lot of due diligence that would have to happen and and then essentially this just authorizes us

to begin doing that work thank you uh so it doesn't cost us anything to do our due diligence and be prepared to issue bonds right and then to councilmember Lo's earlier point around um right how we communicate rate increase in the impacts to customers. Understanding we put in the staff report here for the Prop 218 process too, the percentage increase, I think it would be more instructive to have the average bill, average customer household kind of bill increase number, right? That 32% I think is a shocking number for a lot of people versus, right, $2.66 a month for the average customer. if we can make sure we include that context for people so that it's the right context we're providing for what we're asking our residents and customers

to be able to shoulder.

And I think I know that the public hearing for the 280 process at the next council meeting,

it's not the item today,

but I think it's important to note if anyone's actually watching this and preparing to dig into the report on our rate analysis and the rate study, our existing revenue enterprise fund for water, we're currently and have been for a number of years operating at a deficit, right, Sean or Martha?

No, we haven't been.

We're down to possibly getting a deficit in this fiscal year, but we have had, we've dwindled down our reserves.

We had reserves.

Let me clarify.

We are not generating revenue on an annual basis to cover our costs. We have been taking and utilizing existing funds that we had set aside for capital projects, rebuilding infrastructure, water pipes, mains, water tanks, treatment facilities, that was meant for that to subsidize our existing O&M costs for years now.

That's correct, yes.

So in that sense, we've been off. That's what I mean by deficit.

We are not generating, right, customers in the city who are using water are not paying enough on their water bills to cover the actual costs right now and have been for years. And that's why we're going out to ask for these rate increases

to better match our known expenses

and our assumed expenses going forward

in the next few years

to better match that to actual revenues that make sure that we're not going to go into a deficit

and run out of money

so that we can't make these necessary repairs and maintenance for our water system.

Yeah, that's correct.

And I mean, just looking at the, through the report, right, even some of the assumptions for cost escalation for our water system and sewer system expenses, I look at the utility rate cost escalation assumption, that's probably going to be low compared to actual costs, knowing that these, there's no way to tell for sure, but some of the others might be Lor or higher. I worry that these are much more conservative or less conservative, I guess, estimates of cost escalation in the next few years and that we still might get back into a situation

where we're not generating enough revenue

to cover our expenses going forward. Knowing also that there are new requirements that the state is imposing on cities, including the need for our new water treatment facility that's coming online or about to come online, that cost $6 million to build and will cost millions more on an annual basis

to operate going forward.

These are things that we would not and did not anticipate back when we passed the rate increases back in 2014, 2015. There are going to be new things like that that come up.

That's why we do a Prop 218 every five years so that if things change and new things come up

that we can update our rates.

But we can always come back before the five years

if something else happens.

And I would hope that we don't let a number of years lapse between these processes, because in the short term, right, yeah, no one wants to pay higher water rates, but in the longer term, this really results in higher costs down the line if we're not doing the maintenance and the investment in our infrastructure

that we need to do.

that just means a few years down the line it's going to cost us even more to make these repairs and to do this work. So I want to make sure and reiterate, I know I've been saying this at the other sessions where we've talked about the water rate study, to make sure that there isn't going to be a gap between when our rate increases that we're being proactive and on top of this so that we're not kicking the can down the road for future residents or residents in future years to have to pay more, even more than they otherwise would have if we had been more proactive on generating the revenue that's needed to maintain our system.

If I may, when I

first started working here for the city in February of 2020, I did talk to the Ron Bobeck, the then city manager. We were looking at doing a Prop 218 rate study, but with COVID, it happened the very next month.

and we stopped shutting water

and we did all these things from the governor

that had us stop doing all of this,

we kind of was put on hold for two years. So we are aware and we will, as long as no other tragedy or pandemic happens, we are aware that we will be coming back