it to arrive so they can speak to their requests so we can kick off with the fee changes i do want to know one thing that i mentioned at the end of the last finance committee meeting about police fee changes just want to clarify that the police department has gone to council separately on march th and april th to already get approval for their fee changes for next year so they've already taken effect this year and so we're gonna be updating the fee resolution to reflect that and so that's why they don't really have anything to we're proposing one change to our fees and that's the terminal long term parking lot we're proposing to go from twelve dollars to thirteen dollars for the daily maximum rate that's based upon a survey of comparable california airports which we found a median rate of thirteen dollars a day max and an average rate of of fourteen dollars the the increase is about an eight percent increase and that is spread over about six years fiscal year two thousand and twelve is the last time we raise that fee questions if any questions about that fee thank you very much appreciate that  parking we talked about this last wednesday but as a refresher the first fee is the the pay and display so that is so we can move we don't have this fee currently it's a new system we're just like in the waterfront where they have the freestanding kiosks where parker's can interact with those so this would be our rates for if we use those kiosks the first place we're looking to use that as in the helling a lot in the fun zone converting that from ninety minute to pay and display and then the bicycle parking fee is also a new fee and that is in lieu of bike station so as we phase out of that vendor bike station the downtown parking would provide that service and so this would allow us to pay the same amount as bike station was charging to use the bike station the curb painting fee is downtown parking is also a new fee downtown parking is now responsible for the color of the curb and so as people request a color the curb change so they want to go from say they want to go a ninety minute to a seventy five or they want a fifteen or twenty minutes zone or they they need a loading unloading in front of their place if they're making that request and it's specifically to serve their business this fee would caught it would would pay for a little bit a portion of the the actual implementation cost to cover some of our costs and actually having people do that change and then the last one is an extension of the time period in which we can charge for use of the downtown parking facilities so right now we charge and this is for sunday through thursday we charge from seven thirty a m to p m and so after p m all parking downtown and is is free we don't actually charge after that time now that the lots were used more and more between the hours of and eleven zero on those days we would we would as we did we already staff the lots but we'd also charge for that parking period and those are the fees right thank you mister dayton back to the bicycle parking fee what's happening with that bike station all right so the bike station contract the way it works right now is we pay we have our space in the granada garage it's a it's a retail space and then we also have the bike station next to mt dee's transit center and parking lot five and a three and what we do is we we pay bike station twenty five thousand dollars a year to manage those two spaces and what we think is what we and then they get the revenue from people who sign up and actually use the spaces use the the facilities so we think in downtown parking we can provide that service and save that money and we can do just as good a job but we don't feel like they're actually they're not located in santa barbara and so we don't feel like they're real connected and in really catching what needs to be done bicycles but also do something else and actually get revenue rather than paying people to use the space we think that there's opportunity any other questions for mis the is that bike station linked it all to the one at the transit hub they are and they're both operated currently by a bike station well that one stay under a bike station the one at the hub it's not our proposed our proposals that we would we would link all users so that when they buy a membership they can use either one so is there a thought down the line of expanding like maybe putting one at city hall or down in the water front if we see that kind of demand as we move forward the other thing that is being talked about in the and the bicycle company is bike share we mentioned that at council last week a little bit just i think we need to see how those that evolves and that service coming to santa barbara to see where else a bike station facility might work i think the bike stations might complement the bike share for people who are really like their own bike and like to customize it but want to have secured parking or inside parking particularly in the winter season if we have another winner so thank you so just following up on that just to be more clear you're just not finding utilization at the level you want to see and so this has not been successful with bike stations they're not having enough people using either one of the facilities to justify paying a twenty five thousand dollar fee let alone having them take whatever revenue that's generated so just give me a sense of what percentage of the originally envisioned utilization has actually occurred probably have somewhere between painting fee there's something i had not realized that businesses could opt to paint their curb is that just in the downtown or is that anywhere in town we get that anywhere in town and downtown parking is is actually is now being the face of that request these requests that they live and this is a part of our culture people look at the curb space a new business comes in and they say hey my business would be better if you just changed the the timing on the streets were this is i knew i can get loading and unloading which is another issue so parking is always a big deal for how successful or how a business actually functions so we constantly get these request so and sometimes we're putting in red it's a safety issue and we're not gonna be charging for that we're just doing the safety it's just one way when businesses are changing and now we got it now we know what you need to get out there and do this sometimes when we do it then you know if we didn't get the right field and other people are saying hey put it back you know and so by putting the the cost it kind of raises the stakes and it covers the cost and says hey you're you really serious about this and it's it the dialogue gets a little bit richer we how do you manage the competing interests in that sense well it's difficult it's difficult and we have to the person that's in charge of this has to go around and talk to people and have conversations and and try to be inclusive because people tend to do that that space on the curve is theirs and for their business and so we have to they have to have that conversation does that actually gotten complaints recently about the proliferation of curb painted parking and that that the person i thought reasonably was complaining and saying this is a shared resource for the whole community why does this private property owner get to control the space utilization so you just decide that at the staff level that there's no policy decision that's been council has ever that's correct that's correct there's multiple and business's interests out there and residential interests and we're trying to sum some things our policy like there's a policy that we favor commercial parking in the commercial zones but other than that the color of the curb is something it's more of a nuanced conversation on what's gonna fit best based on what are the demands at the time which change all the time okay well thank you for that information any other questions for mi thank you okay next up will be our water and wastewater funds i do want to note on these feed changes that this does not include utility rates utility rates for water and wait for wastewater and solid waste i already came to the finance can be back in march so they're they're on a different schedule and water rates will most likely be coming a council on june so there's not a different schedule this these are other fees unrelated to utility rates thank  we'll be bringing them back for you in early june so for water service fees we're proposing a three percent across the board fee increase we are doing minor language edits for clarity we have one small addition which is the fee to install remove or relocate recycled water meter there's just a slightly different staffing involved in that so there's a different charge there other than that there are no deletions likewise for wastewater we're doing a three percent across the board fee increase minor legged language edits again for clarity and no proposed major proposed additions or deletions thank you m this bullet point minor language edits for clarity can you talk a little bit more about that yeah in some of the sections of these fee resolutions we've made explicit what title or portion the municipal code it's referencing otherwise things to edit how it reads and make it more clear to exactly what it applies to so fran so the subset of change is just more readable and more accurate exactly and the no deletions that just means you're not actually taking anything mister chair committee members let me just take a moment to load up our next presentation which would be gall fund okay thank you therefore has to pay its bills out if it's a very revenue that it generates so when we consider that we we look at the best value golf experience and to achieve that we have a number of different discounts and r that apply different times of the day or who you are or where you're from so we have resident discount senior junior and young adult discounts it's cheaper to play during the week than it is at the weekend on a demand and supply basis and we do offer discounts  we are recommending for our fiscal year eighteen budget no changes in sawle january the st two thousand and eighteen so that'd be six months into the new fiscal year and then for most of the golf fees as we mentioned yesterday our budget meeting we're recommending a one dollar increase on everything with the exception of junior golf we still want to keep that very very low to encourage people to come and play and the addition of a new fee here for range balls to actually give a a better value  and as i said we're going to continue to offer special offers which will discount from the rack rates on the green fees to try and encourage people to play at times where typically the t shi is a little more challenging to fil chart of some of the main green fees for residents and as you can see everything's going up by a one dollar with the exception of the juniors on weekday and weekend and here is the table which shows that we are taking away the twenty six ball option for three dollars and replacing it with a thirty five ball option for four dollars a better rate per ball and that that applies all the way through the assumption on the basis that if you're able to  and showed you the four key rates that we have during the week for junior senior young adult and adult and you can see in every single case santa barbra golf club is the most affordable doesn't mean cheap and it doesn't mean that the value and the equality isn't there it just means that we're able to provide golf at a very affordable price and it's still high quality and then again for weekend green fees they're slightly different but again you can see that you know each customer tokens for the range so check out the range machine was actually replaced in july of last year to a new range machine the old one was very very old and needed updating and at that time art our last fee presentation for today will be from the waterfront before we move on to the request from commu good afternoon mister chair committee members scot reidman waterfront director here waterfront has two proposed fee changes for fy two thousand and eighteen the first of those being the slip rental fee which would be a two percent increase which should generate well we've been doing it every year since fiscal year two thousand and eight so we've been doing this same two percent increase for about ten years now with little blowback from the community or anything like that it's also consistent with our division of boating and waterways loan requirement which is that we raise the fees by some increment every year so that keeps us in compliance with our loan to rebuild marina one and we expect it to generate about eighty seven thousand dollars worth of revenue the second fee proposed is the slip transfer fee again we've been doing this for years and years and at twenty five dollars per foot when someone transfers their slip so the larger slips will go to four hundred and fifty dollars a foot and it's really hard to predict how much this will generate it really tracks with the economy the best we can figure is that it loosely tracks with the housing market so we saw a big  oh a toe nine that kind of thing but in the recent in the last three years it's really come back to be a serious revenue generator for the waterfront department i'd also like to add that we have frozen the slip transfer fees on the twenty foot slips the twenty five twenty eighths s and the designated commercial fishing berths as they've gotten higher and higher we frozen them at different levels where we felt we're getting as much as as practical for those slip and then in your packet and up on the display is just simply what the impact of these feet this fee increase would be to the various sizes of slips in terms of the change per foot and the change per month that the slip holders would be paying we think that's real reasonable the harbor commission approved these recommended approval of these fee changes at the april th th meeting so i'd be happy to answer any questions any questions for yep okay one question occurs to me that i think all the other departments are kind of using a three percent increase as opposed to a two percent increase any i mean that is the number that you've been using for a number of years as you said in your presentation but  any thoughts as to what the difference is between the waterfront using a two percent increase in the other departments using a three percent increase no chair heart it's just consistent with what we've been doing and we project revenues and expenses out on a six year cash flow model and it in in doing that it appears that we're tracking the revenues above expenses are we're on a good trajectory at the rate we're going so if that should change then we would thank you no problem mister cherrick many members so at this point in time we just received another request that you that was just given to you prior to that we've only received two request one from path which i'd like to ask them to come up if i do want to note also that staff you know having heard the council express interest in this request in the past has included the funding for this request you know i have proved by the council to be funded in the next next two years thank you welcome we are respectfully asking four hundred and twenty five thousand dollars from the city's general fund to support what we're doing and it's more than just shelter it's providing medical care and employment and helping people actually get into permanent housing it's a different model than the old casas model which was more of shelter it's actually trying to get people off the streets and so in the last twenty months we have helped one thousand three hundred thirty two people who were homeless and we helped two hundred and eighty two people actually get jobs and we helped one hundred and fifty people move into permanent housing we were able to actually get funding from the federal government  the department of labor employment program for veterans and path alone as has put in about four hundred thousand dollars of our own private money into casa the county is providing about five hundred thousand dollars a year that's from behavioral well fat wellness community services public health probation cdbg esg about similar amount from the city as well but we know that this because we've kind of beefed up the program and because the people on the streets are not just homeless but they're they're hurting they're sick and they're disabled we really had to kind of beef up the staff in the program to have more clinical services and that's why the budgets gone up  so that's that's basically why we really need one hundred and twenty five thousand dollars is to is to have this stronger program that can actually get people off the streets and not just babysit them and shelter thank you thank you mis any questions okay thank you our next request was from the central coast collaborative on homelessness ch and the request is for a ten percent increase in their current funding level which is ninety one thousand for an increase of nine thousand nine hundred twenty three dollars for a total of a hundred thousand three hundred fifty five this additional ten percent is not included in the recommended budget this time thank you mister flex thank you very much members of the committee i think you all are somewhat familiar with the activities that ch does i won't spend a lot of time on that what i will say is why we're asking for more funding several things are happening simultaneously in our most recent fiscal year we had made a choice to expand our operations countywide doing on the ground case management which was to some extent above and beyond the charge of the organization as you may know we are not a non profit we are technically a program of the northern santa barbara county united way and the only and we made an agreement with all of the different nonprofits throughout the community that we would not go after competitive funding to take any money away from their programs so really the only funding we receive is from government agencies from the hospitals and from the housing authorities and we had this expanded operation that was supported by our policy council in terms of the activity not so much financially so i had attempted this past year to go after an additional hundred thousand dollars from the winegard foundation and from the chumash foundation and i was told pretty clearly that they are not comfortable funding something that isn't clear as to as to its structure so this year we are doing what i'm calling an all in strategy we are emulating what's happening in los angeles and if you haven't looked at this i encourage you to they have had a wildly successful effort both in terms of public and private partnerships called home for good la and it's a it's led by the united way down there and the chamber of commerce and over the last number of years they've raised about i'm sorry nine hundred and twenty six million dollars i mean everything's huge in la from all the different cities they passed a bond measure last november for one two billion dollars that raised funding for housing and they passed a sales tax measure for services to support housing i'm in the process of working with the united way of northern santa barbara county and the united way here in santa barbara as well as chambers of commerce throughout the county the santa barbara foundation individual private donors social venture partners downtown santa barbara a whole variety of organizations to develop a strategy that will be a broad based campaign that essentially will have pretty significant implications as to what ch is a year from now and i can't quite predict what that will be and in la with the way it looks our equivalent is kind of two things there's a joint powers authority that's at the city in the county and represents all the cities in the county it's a massive bureaucracy but then the united way also has its own strategy this home for good program that is coordinating the now billions of dollars that are  going through this system my hope is that ch has some small measure of that and that we will we will learn over the course of this next year what that structure will look like i have representatives at the county and all the different cities that are on the policy council i have staff at all these different levels that that serve as an advisory board to us and i'll be working closely with them as we sort of change our structure and to make a more sustainable model going forward so what i'm asking for is that from all of the funders i'm asking for a ten percent across the board increase to support this new level of activity it also has to backfill unfortunately you guys weren't in partnership with the housing authority they made a decision this year because of funding cuts to no longer fun we lost twenty five thousand dollars from from their support so that makes it even more critical that i get additional support from the cities so that's my case i would be happy to take any questions if you have any thank you there any questions for mister fox okay thank you thank you we might as we talk more but stay around thank you ms mcgovern you also have a request from the housing trust  fund i jennifer mcgovern the president of the housing trust fund and we really appreciate you considering this rather late request that we are very pleased to announce that we have succeeded in raising two and a half million dollars in investment capital and want to launch a workforce homebuyer program for the entire south county we currently operate a small pilot program for the city of carpinteria and i was closing loans last week which is part of what the delay is but this program addresses a very critical need and that is opening up homeownership opportunities for working employees in in the south coast and really there's nothing like this this program will provide very low cost interest only down payment loans up to one hundred thousand dollars to help first time homebuyers get an entry level home know they won't be buying million dollar homes but they can buy entry level condos and then they repay the funds at the end of ten years when they have paid down on their first mortgage and we've done very conservative modeling of this it works we put together five banks to help fund this and we're looking for community support because it takes some time to deploy all the funds once the funds are deployed we'll earn some modest interest on that that will help support the program operations but that doesn't happen immediately and the city of goleta it has supported us on this and we were hoping the city of santa barbara might also that would encourage us to be able to solicit business support and foundation support as well our budget for this program is about one hundred and fifty thousand a year we're asking for a twenty five thousand dollars for two years in a row to support this and it would really have a tremendous impact enable us to hire a loan officer to oversee this program and to get it going it's initially a pilot program of just twenty five loans and we will build the fund as we deploy that we think that it'll attract a different additional capital from banks foundations and the idea is to create an ongoing workforce housing fund for homeownership to expand those opportunities so what is a typical loan amount that you imagine we're imagining the loans will range somewhere between eighty to one hundred thousand because of the pricing here in the south county we've done this program in north county for fifty thousand dollar loans  in south county because of the pricing probably most people will take the full loan and so it would be interesting lee payments you know balloon payments of the principal at after ten years yes and it's based on paying down more than a hundred thousand on their first mortgage so it's not we don't need any appreciation in the home it's just their build up of equity we've modeled it out doubling the interest rate and it still results in about the same percentage of their income going for the housing payment ten years out and they would refinance at that point to incorporate the two loans together maybe their refinance or take out a home equity line okay yeah  thank you for being here what is are there any residency or locational requirements attached to the program they have to be a resident of santa barbara county and work in the south coast region and we can't get more specific than that because of fair housing laws but our experience has been if you have to buy the home within the south county most people are already working here or they might be working in ventura or lompoc and i mean living there and wanting to live in the community our experience with the carpinteria program has all been local employees that purchased homes and the maximum price of the loan it doesn't say but it looks like they'll lend the homebuyer up to sixteen point five percent so does that put it in the seven hundred zero range oh yeah it this works i would say from you know entry level condos around five hundred and fifty to six hundred thousand up to about a nine hundred thousand dollar home depending on how much other down payment resources that the homebuyer has so it's a certain range you know it's not the million dollar homes but typically it'd be somewhere between six hundred and fifty to seven hundred and fifty thousand dollar which is more likely in santa barbara to be a condo right yeah and why are you focusing on homebuyers and not renters well we have a very active housing production program we have a revolving loan fund and  we it's a six million dollar fund we loan money to groups like habitat for humanity people self help housing and that is our rental production part this part is because there's no other program addressing what we call the workforce housing need and that local business has have indicated that they and their employees want to put roots down in the community they want to live here so we think it's a real economic development tool to get people who want to stay long term in the community so you don't have so much staff turnover and you have an opportunity to get a home raise kids  part of the community well i agree with everything you just said so i'm glad to hear you say it you know are a renter rate in santa barbara sixty percent the state average is thirty five percent so to the extent this will help us convert renters in to homeowners or at least the ones who want to i think it's it's great when they go to retire hopefully they paid off their mortgages to a large degree or completely if possible so that when they retire they have that uh that's safety that security of mine knowing that their housing cost now down to just property tax and whatever maintenance costs they'd have so i think this is this is one hundred percent valuable thank you very much thank you allergies any other questions for mister mcgovern i had a question about you contributing financially to the severn how much of they contributed well the city has already contributed about three years of support at twenty five thousand dollars when we did the development fees so they were very keen on helping us design the program and get the consortium of lenders together and now that we've gotten the capital we're reaching out to involve the other communities in the south county because people will buy homes all over the south coast you know it's not limited geographically to gallito or santa barbara or you know it's it's the whole south coast region and we thought this is a great opportunity to come together and build a resource that will be a real resource in the future if we can get this fund going we can build it to become a major tool for homeownership opportunities so in lieu fees for workforce homebuyers and they just replenished that so we're doing managing that program for them we'll reach out to the county as well okay yeah well thank you you know i'm just so you know and i'm you may or i'm sure you do actually is that the city itself had an employee loan program and we had very mixed success with that and so i think it'd be wise to talk with the city staff about the experiences we had i think we're starting it in a different market time and maybe that's different for you but yeah we have a meeting with staff tomorrow yeah i think helpful to share information about the pitfalls and the successes that are out there potentially thank you committee members the next two items i will turn over to mister samari oh and before we get there i just wanted to mention that next week we'll be asking the committee for final decisions on everything you've heard about the fees the request everything as far as any recommendations you would make to the council and just to make clear you know i we're here looking in the audience and we know no one is here else else to ask but just to make it on the record you know we'll open the opportunity for folks to come and speak to ask for additional requests and i don't see anybody so we'll close that and then go on to the next  organizations i was just asking knowing that some some of our attendees came from outside of the city so i'm not sure if we want them to return or if they're going to return if not do they have anything else they want adam just curious mister roberts if you  planning on coming back or if you wanted to add anything else if you're not planning on come each on the mic if you would just come on the mic thinking do you mind if i go back into this room no absolutely what what i kind of envisioned for all the outside organizations is some kind of structure that the committee and then the council can use to compare amongst the applicants but also to compare to other funds and resources we give in other processes and so what makes it hard is with these outside requests as you haven't gone through a normal structure and so one of the structures we have that's very structured in the city is is some of the cdbg and other funds we give out goes to our community development and human services committee and they have a very robust program they collect a lot of materials from the organizations organizations come and give a presentation and answer questions that the committee has so there's a very process and we don't have that same process here we can try to emulate it with our kit with our committee here and then also with council and particularly with your group i asked for some for some background documents and you sent those so thank you very much for that but i'm not sure if there's anything we can do today that would kind of emulate that and i don't think you guys went through that process this year did you we did not but you did okay  okay but we would be happy to fill out you know create a full application for these funds if that's what you think you need i'm not sure we don't have an actual application set up but just some of the information that's brought up through that process my view so i mean really at the end of the day we want to figure out how much value we're getting for the money that we're giving so to the extent it's possible to compare apples and oranges i know it's really hard in the social sector to do that even within the programs you have i'm sure you have problems prioritizing do you want to put money here or here or add staff here or there because they're completely different whether it's rapid rehousing versus job training so no it's hard to really compare you know you may help one person in one context and it costs you know several staff hours but then you can help six at the same time but does that one person you help does it you know create a greater impact for that person in the community so i know it's hard to compare these things and that's why we have a committee set up to do all that and it's harder for us to do it up here on the fly right so do you and i know because you're a much larger statewide organization is there a process you've been involved with where you think how that process worked might help us something we could implement as a organization you know typically cities will send out an rfp and we would just fill out an application and they would kind of compare compare apples to apples and i know you know we apply for funds which would par be a good you know a good process or a template to use okay great so we'd be very happy you just tell us which hoops to jump through and we'd be very happy to do that so i guess what i to find out possibly from staff or from you is is there a process where we can access that materials either as a technical matter or their restrictions and what we have access to or do you guys have a consent issue with us seeing those materials in this process i don't know if the staff has a process  development human services committee for recommendations and then to counsel for fiscal year eighteen they are recommended for funding totaling eighty three zero from that process they rated  seventy eight point two was their average score the highest score was eighty five point two five so you know they're they're kind of in the middle of the first priority for those funds but i also just wanted to give you a little history as to why they're here today asking for the money for many many years casa esperanza received money from the human service cdbg process but we also gave them a seventy five thousand dollar extra money for the winter shelter specifically for the winter shelter so that was always in our budget separately from the the human service cdbg process and then back in fiscal y so that's that's why this request is still outside the funding process it's highly unlikely that they would get what would that be it would be over two hundred thousand dollars from the cdbg human service process we just don't have the funding in that pot to give that large of a grant so they are they're requesting that one hundred and twenty five extra from the from fiscal year two thousand and fifteen when they were having financial difficulties it was originally a request from casa esperanza kind of a one time only request and council will approve that for a couple years and then path took over and i think there was a little bit of a misunderstanding in the merger with path thinking that that was ongoing you know they took kostas bronze over assuming that they would have the funding that was currently there so that's that's why it's a little different the money goes to the same organization that is ranked by the cdbg human service process and you can you know you can have access to the grant application you can have access i think you have the report from from that process as well in two thousand and fifteen was that the year that there was the county and city mortgage forgiveness or a loan forgiveness i think there was a five hundred thousand no i believe that was in fiscal year sixteen sixteen yeah it was after the merger happened yeah just to kind of paint the whole picture exactly okay thank you any other questions not a question i don't think  timing issue we often have a question about the level that we should put into the human services budget prior to the budget process and that that adds a complexity here but ultimately if that if this one hundred and twenty five thousand dollars were part of the human services budget at the right time the committee could review that in conte next and they would have an additional under twenty five thousand dollars to allocate amongst all the organizations maybe even the money that  too so they would go through that scoring and ranking process that's the thought to get to what you're talking about and have that not happen through this request from outside agency process i don't know if that's the right choice but that's another way to do things and we can talk about that next week when we bring all this back okay mister smart thank you mister chair members as a committee so i'm gonna be bringing or discussing two items today at the request of the committee they're not action items they're informational only one relates to pers in the estimates that we expect in cost we expect in the next several years we've talked about this already a little bit but we've got some  or at least updated and more accurate information about what those impacts will be on some of the changes that pers is implemented and then we're also going to just look at some sales tax data some of its interesting some of its sort of you know it is what it is so we'll go through it and and see what it says so starting with purse cost projections this is a bit of a recap just to remind you that in two thousand and four pers made the first of three decisions and and took actions that all of which were going to be impacting and are starting to impact our pers rates the first was in was to mitigate the impacts of the losses during the two thousand and eight and nine recession those losses were fairly substantial they lost about twenty four percent of their assets and so in two thousand and fourteen they decided to implement a five year plan that would ostensibly recover those losses and it so there's a five year phase in of rate increases starting last year fiscal year two thousand and sixteen through two thousand and twenty and then on the heels of that in two thousand and fifteen they also  took action to to implement rate increases to adjust for the fact that people were just living longer across the board safety and non safety and so that five year phase in started this fiscal year seventeen a will go into two thousand and twenty one so based on those changes alone what we're expecting this chart shows all the way through two thousand and twenty three based on what pers has provided us what the rate increases would be and what the rates would look like over that period of time starting in the curtin fiscal year so for example with currently what we're paying is forty seven point five eight percent of the salary for each fire safety employee by two thousand and twenty three that would go up to almost seventy percent for police they're currently at forty point six four percent of salary and they're projected to be at fifty eight point three one percent in two thousand and twenty three and then miscellaneous at currently twenty seven point five one you see the slope is slightly less less less than the other two because there miscellaneous employees whereby they pick up about a third of every percentage increase that incurs in those rates so by two thousand and twenty three their rates would be about thirty seven percent  to make sure i understand what this percentage so for fire forty seven point five eight so if a a fire staff member was making one hundred thousand as their salary we would be paying forty seven thousand to pers that's correct and same with with police and and for fire and place are these sworn these are sworn the fire and police are sworn everybody else is in that what we call a miscellaneous plan and then for the three different groups what are they contributing from the forty seven thousand we would be throwing a good question for firing police they're currently contributing nine percent for miscellaneous it's a little bit different they're they're contributing that the what's referred to as a statutory employee portion of eight percent but because they have that c agreement they're actually now beginning to pay a portion of the employer rate they're currently contributing somewhere around between nine and ten percent of their overall benefits so those are would be in addition to these percentages these are just the employer portions so the total rate for example for a fire employee would be forty seven point five eight plus nine percent about fifty six and a half percent that's the total cost nine percent being paid by the employee in the balance by the employer and so just to use that hundred thousand just because it's a nice round number so we would put aside salary of a hundred thousand dollars we would put her side forty seven thousand dollars so where the employee take nine percent out of that hundred thousand the would contribute that's correct so they're effective salary is ninety one thousand correct okay great thank you oh and then the nine to ten percent for miscellaneous is that going to be the range for the near future no that's what it currently is that'll continue to grow so by two by two thousand and twenty three my guess is they're going to be somewhere around the twelve or thirteen percent range okay he just grows again pick up a third of that increase okay great thank you so more recently we talked about this into december two thousand and sixteen the latest of the three actions that pers took was to lower the discount rate from seven and a half percent to seven percent over a three year period and the discount rate is what they assume they're going to earn on their investments so every year they they assume they're going to be earning seven and half percent on average every year and so they're lowering those those estimates of what they expect to earn by from seven and a half to seven percent in the first year they're gonna lower it to seven point three seven five percent in the second year they're going to lower to seven and a quarter and then the third year is gonna be more dramatically they're gonna go all the way to seven percent each of those would be implemented over a phased in over a five year period so by two thousand and twenty five all of these three changes will be fully phased in because each of them are five years so in total we're looking at eight years of rate increases just for the low end of the discount rate so this chart shows you what the rates will look like now based on including the lowering of the discount rate that the dotted lines represent what they were planning on being before the lorn a discount rate just because of the two actions in the  past and then the subtle lines represent now with the updated projections so in the in the past for example you saw that or in the previous slide you saw that fire would be about sixty nine percent in two thousand and twenty three now they're projected to be closer a three percent any questions on this slide dingus and so why is fire so much higher than police that's just as the result of negotiation know that their rates it's interesting their rates are higher because they are a smaller group of employees they have fewer people to start to recover those dollars from so in terms of dollars the impacts to just the general fun of the lowering of the discount rate and in two thousand and nineteen which is the second year of the two your financial plan at seven hundred thousand dollars and in two thousand twenty one point five and this is consistent with when we spoke a couple weeks ago we went over the multi year forecast and we factored these dollars in but in two thousand and twenty one they would an estimate that i came up with just looking at statewide averages was about two and a half million dollars we recently completed a calculation using a tool that pers provided to us which allowed us to be more accurate using our own data and based on that in two thousand and twenty one you could see that the increase would be cubed of increase would be three and a half million dollars instead of two five so a big head two thousand and twenty one and just a reminder that's when it drops from seven and a quarter percent to the seven percent discount r now i wonder this question so why is the impact greater in twenty one than twenty it looks like it goes up eight hundred thousand and then it goes up two million like you remember it goes from seven and a quarter to seven percent versus going down you know twelve and a half percent or twelve to half basis points from seven and a half to seven point three seven five to seven point two five those are smaller changes but in the third year it drops all the way down twenty five basis points okay so it's a more dramatic in craig impact so this is eight and i've updated have come on twenty three years of what the history of pers actual rate of returns have been and and that solid yellow line represents their assumption and back in the day it was seven and and you can't notice it but in two thousand and ten or eleven they dropped it to seven and a half percent so used to be seven in but you could see that they're they're nowhere near that in any given year they're all over the place they can be as high as twenty one percent that we saw in two thousand eleven and as low as twenty four percent during the great recession in two thousand and nine so the very volatile sort of rate of return again what their goal is to average over a twenty or thirty year period the the term of an employee seven  percent but with but based on the history there never really we know and they never hit seventy nine percent they're always somewhere above or below and i bring this to your attention because the nature of how they invest the money in order to achieve a seven five percent is that it's going to be very volatile it's a heavily heavy on the equities so lot some fair amount of real estate so it's a very volatile mix of portfolio so it results in this kind of when we talk about the lowering of the discount rate from seven and a half to seven percent it doesn't really address or speak to any changes they or they are gonna make in their actual investment strategy they're not going to lower how much money they're putting into equities how much they put into real estate they're just assuming that because of the potential change in the economy or paradigm shift in the markets that they're just gonna achieve a lower rate of return in the future than what they had birds projected in the past it's possible that they're gonna have this similar type of volatility an average seven five percent or more or less they're just basing their change on what the what they see the future to be in the markets not what they're actually doing differently and that's an important kind of consideration so what potential change is what they've been talking about is actually changing that strategy so to be more conservative and to be less volatile they're considering and lisa the future just point to change how they invest their their monies to less equities less of the real estate and more of the of the fixed type of fixed income securities so that they're actually achieving a lower rate of return and by a result lower less volatility they've been about that they really believe that where they should be today he's based on what the know today is somewhere and they're in the six percent range of that's where they really believe they're the rate of return will be in the future and where they believe they would like to adjust their student dustman strategy to hit that kind of a target but today they have not changed anything in their investment strategy all these changes what did where they expect the market to be in the returns to be in the future kind of a subtle point but i want to make sure that was clear so the change in alert the lower in the disco going to result in lower initially lower or higher entry or excuse me well initially result in higher rates to the city and all local governments but in the end ultimately what's going to read rive those interest rates or those discount rates or the and that pervades will be results will be in the in the future if in the next five years they realized a twenty percent return on their investments unlikely that's what's gonna drive what our pers rates are not this assumption it's only worth it so need to determine the starting point does that this is information that i has been requested in the past i thought it would just provide some updated information this is broken down between the general fund and all other funds what the current contributions are how much we're actually paying out with those employer rates translate into dollars we're starting in fourteen fourteen all the way through our projections in nineteen and what the total salaries of benefits are for the general fund and fro all the other funds combined just so you can see how much are we paying as a percentage of our total salaries and benefits number when you factor in with the total general fund budget is but just comparing it to solo salaries and benefits it's in the twenty percent range and it's been pretty constant throughout you can see in nineteen it goes up a little bit more hires its highest at twenty two percent this does not include the impacts of the lowering of the discount rate so debt will be a slightly higher number for the all the other funds enterprise funds it's a it's a smaller percentage it's in the fourteen to sixteen percent range but pretty constant and then other information that was requested was looking at our how many people are receiving benefits so you could see it's is divided into the three plans fire safety police safety and then everyone else what we call non safety the benefits that were paid to the retirees you c nine million for a fire paid two hundred and fifty one retirees and that translates into an average benefit of about sixty thousand dollars the number of active employees currently are eighty eight police department w paid and this was paid in two thousand and fifteen two thousand and fifteen ten and a half million dollars to two hundred seventeen retirees averaging forty eight thousand dollars currently they're one hundred and thirty nine active employees and the police safety group and then everyone else benefits paid in two thousand and fifteen or twenty one point three million dollars eight hundred eighty four retirees and an average of twenty four thousand dollars active employees seven hundred and eighty four which you'll notice across the board is that there are more retirees receiving benefits than there are active employees that are building up those those those benefits so that's all i have for the pers and stuff general fund and enterprise funds so these are these are combined whereas the others are separated out yes these are these are citywide numbers okay okay so basically we're we paid in fifteen no we paid in more because of the ad in the enterprise it's not it's fifteen and six right sixteen sixteen and six almost seventy it's twenty three million and fourteen yeah i'm shocked fourteen or so coming up to now we're at thirty two plus that we put in and then flip back to the next slide so thirty two ere they're really not related though in that regard because you're not considering the rate of return that's factored in so here you'll just pick two thousand and eighteen on a combined basis we're looking to put in about twenty nine million almost thirty million dollars and we'll be doing that every year and those monies will then earn interest they're assuming seven and a half today it's gonna change the seven but whatever they earned it will add to those numbers and as we've talked about in the past y earn the interest earnings represent a fairly large portion of the overall amount of money that's read that's accumulated it's about seventy five percent of the money that that is accumulated when somebody retires is from the return return on investments the other twenty five is from the contributions so you can't really compare those two numbers that's kind of comparing apples to ones this how much is we're putting in every year and this is the result of those accumulated funds which include interest earns interest earnings as well as the contributions made by employers and employees well the but the there is a a relationship between how much money we have put in and has been earned those two numbers and how much has gone out right there was a relationship yeah there isn't i think that the the the measure that speaks to that relationship is the funded status right so if you look at each of these plans were in the seventy percent range give take me to the plans better than we were a few years ago to me that speaks to that that number represents where we should be you know they look at a funding model in their in any given point in time we should have x amount of dollars a set aside and they that percentage speaks to how much do do we really have set aside and based on those actual evaluations we have seventy percent of which should have set aside as of the most recent evaluation period that's the true measure of how that in versus out that's true i agree with that but i don't agree that that this number is unrelated to what we pay in i i just  how much goes out results in what's left in the unfunded and the unfunded liability there's a relationship there some kind i would see if you get a great return on your on the investment then that goes down but and we are therefore we are any other questions okay let's go on to the next portion of the presentation sales tax data by sector so this one slide we we presented to you i think in february at the work session and we're gonna dig into it a little more detail but this shows you by sector and this is how we get the information by category there are five categories of sales tax data we get the first is the general retail next is food products and we'll go again more detail about that transportation construction down toward the bottom businesses business and then everything else is miscellaneous now this chart shows you since two thousand and ten what the trend line has been through two thousand and sixteen so that's and this ends this is for the calendar year is ending december st from two thousand and ten to sixteen that's the most recent data we have and for the first three you'll see that i've added what the average growth has been in that seven year period or six year period whatever that works out to be general retail you could see that the six year average was less than one percent so point zero seven percent you can see we were doing pretty well until last several years so fourteen and we started to see some declines in that category for food products and we'll see what the details are that has actually done fairly well its flattened out in the last couple of years but an average it's grown six point two percent transportation six year average almost five point eight out in the last couple years after some very strong years particularly in the auto sales category construction has been relatively flat business business flattened and miscellaneous also fairly flat so what i wanted to do is just go through the top three and more details what those those categories include so general retail by sub sector includes with it's interesting that the one of the lines is called miscellaneous but includes apparel department stores furniture toward the top apparel was very strong in two thousand and thirteen and just seems to have declines pretty substantially department stores fairly flat for a few years and that's we were seeing it pretty a fairly large decline and and this is before or i don't it doesn't reflect the macy's closing so this is department stores part of that furniture actually has done fairly well overall recreation products that these were these are very very very well over the last six years i know that this year this counter year started in june january one we're starting to see that slowdown i know that auto sales and for sixteen was a banner year across the board and across the country they recognized that they would not be able to sustain that kind of growth and in fact we're saying that those those declines in the current year which are not collected here service stations reflect a large degree with the gas prices so you'll see the some of those things going down some small food sales and unlike the other two items or components are fairly flat food includes three components restaurants food markets where they sell prepared food like um if you think of whole foods you when you buy the groceries they're not subject to sales tax but when you buy the prepared food it is subject to a sales tax so that's what that includes but restaurant is the biggest component there and you could see that there actually been been very strong over the last six years they've been  really carrying us to our large degree in in you know many ways food markets have been fairly flat liquor stores are fairly flat so that's what i have be happy to answer any questions or the course if you'd like more detail on a future date we can bring that back if you like councilmember to vegas you had a question so noticing the restaurant curve going up in apparel dropping this is i guess outside of the presentation but are those substitute items and people's household economies to people is are they causally related or some people just buying fewer clothes and spending it at restaurants do we have any sense of that i don't i will tell you just my my own personal thoughts restaurants i think are doing well relative to stores because you can't buy food you have that experience of going to a restaurant online and i think the online impacts is more felt than things like the smaller stores and department stores in particular where you can buy those stuff things line whereas restaurants you know you'll go for the experience and you go for the activity and and the food and all that and those seem to be doing still pretty well i think there's a couple apps that people use on their phones to order food from restaurants that might actually be pick up food part of the the drive and then one of the stats was department stores and apparel and they were both dropping is is that kind of a doubling up like our department stores a lot of them saw a lot apparel does that stat then there's even a bigger apparel impact then then we notice because it's both of those lines the the yeah they're not they're separate so the apparel really those smaller shops a sell clothing and the like whereas department stores are just include those larger facilities so they are both experiencing a decline and there's probably some connection there okay any other questions customer wait um so where are we on the online sales tax in the online sales tax game what's what's going on there at that are state level so at the state level there's very little that the state can do to require companies that are located outside of california but are delivering products to people in california there's little they can do because of federal law law restrictions to require those companies from collecting the sales tax actually it's the use tax because it's something that's it's used in the california from an outside company the the state did adopt in two thousand and thirteen or fourteen the what they call the amazon law it which says that we that any company that that is outside of california but does more than a million dollars of business in california the eric they have their construed to have a physical nexus so they're required to but that's not enforceable so a lot of companies aren't doing that amazon is voluntarily and others are but the vast majority are not so since you what happens if you're buying something online it's from an out of state company that's not amazon or then they're not collecting the sales tax and we lose out and just this is really a problem nation and it's gonna have to be addressed at a federal level to adjust those laws that prevent the states from enforcing the the collection requirements have you seen any numbers on that of how many what are the gross sales that are untaxed that yeah these d wide estimates are about a billion dollars for us it translates to about a million and a half roughly could be more that we're losing today a year in from sales taxes that are not collected from online sales from out of state companies that you know when purchases that are online where there is a physical nexus in california where they have a physical presence so we they are collecting the sales taxes and as i mentioned before it's not going directly to to the to this jurisdiction where the individual lives who bought that product is going to a county pool and then it's allocated to each of those jurisdictions in proportion to their sales tax dollars and we probably end up doing okay in that regard because we have a higher sales taxes relative to others and that might be a proxy for how much how many people are buying online from the various jurisdictions i don't know but so we're at least we're not losing in that regard we are losing for those artists for those businesses that are out of state and not collecting sales have you done any future modeling work like you've done with some of the other cost elements to get a sense of what these trends and declining sales tax generation would mean in  future revenues hmm we have not good question we have not that would be a good exercise yeah i think that would be were helpful because you can see some pretty dramatic trends and what i'd like to know what that would mean to sales tax revenues at least for  point separate from general overall appreciation of sales tax revenue by a percentage just to look at what these trends mean and thanks okay yeah i will tell you that when we you know so we have a consultant who helps to develop this data for us and they do provide us a kind of an aggregate projection of what the assumed sales taxes that the whole will grow revenues will grow over the next several years they've been in the two percent range one to two percent range but they actually base that on looking at each of these categories and in fact into stores and how they're doing and making projections on a store by store basis to for the entire city of where they're gonna be in the next few years we haven't done that exercise ourselves this is kind of it'll show you but and i'm sure they can provide that to us they just don't give enough to us on a to know comforting thank you you know just separately from this item in the in the past you have asked us for items that you'd like to have on the agenda and i remember at one point councilmember dominguez talking about looking into a socially conscious investment and strategy and having a discussion about that and you know i missed that opportunities to echo that and say i'd like to look at that as well and i don't know what other was the committee think about that and whether that would be something we could put on the agenda sure on june six for the council and it seems like this is a bigger discussion than that but they are connected right so it would be you know i don't know if it's reasonable to have anything before that but it would be probably ideal if there was