[Music] [Music] Hey, [Music] hey hey. [Music] [Music] Hey. Hey. Hey. [Music] [Music] [Music] [Music] The 3:30 p.m. meeting of the Bakersfield City Council is now in session. >> Good afternoon. It's my pleasure to call to order the 3:30 regular city council meeting of October 22nd, 2025. Madame clerk, please call the role. >> Mayor Go here. >> Vice Mayor Core >> here. Council member Arias. Council member Gonzalez. Council member Weir. >> Council member Smith. >> I'm here. >> Council member Kleman >> here. >> Council member Basher >> here. >> Thank you. In keeping with the council's resolution, public statements are received at different times depending on the item. I'll call on the city clerk to call for public statements at the appropriate time. If you wish to make a public statement, please fill out a public speaker card and place it in the tray next to the speaker podium. We ask that you mark whether you're here to speak on an item listed on today's agenda or in a matter not on the agenda. Speakers who do not identify specific agenda item will be presumed speakers for the non-aggenda public statements. If you're here to speak on an item not listed on the meeting agenda, you'll be called first to speak. Statements are given a two-minute time limit per speaker. 20 minutes total for all non-aggenda item public statements. If you're here to speak on an item listed on the agenda, I'll call for you at the appropriate time. If public statements become disruptive and I have to clear the chambers to regain order of the meeting, you'll be called in one at a time to provide your public statement when your item is called. Everyone in attendance is expected to adhere to the rules of decorum established by resolution of the city council. Failure to abide by the rules of the decorum, including any disruptive behavior that interferes with our ability to have an orderly and efficient meeting, prevents the city council from conducting the business of the city. Madam clerk, do we have any public speakers regarding items not listed on the agenda? >> Mayor Go, we have not received any speaker cards regarding items not listed on tonight's agenda. Oh, Mayor Go, there's an individual in the back that may be filling out a speaker card, >> right? We'll give that a minute. The clerk will announce your name. Welcome. And can you lower the mic so that we can hear you, please? Thank you. >> Um, are we actually coming here to speak to Eric Aras? >> Um, Council Member Arias isn't here yet, but if you'd like to go ahead and make comments, you're welcome to do that. >> Okay. I was going to um Caesar Chavez school to try to get my high school diploma. And evidently what happened was I last attended on the 8th of September of 2025 and evidently what happened was um Arias um what happened was Caesar Chavez called the school. I last, as I indicated, I last attended on the 8th of September. On the 9th at 5:00, it's my understanding that they called the police department on me um stating that I was going to go shoot down the school and the police came at 11:00 p.m. at night. But what gets me is that it was knowingly that I didn't shoot at the school. and I didn't make those statements and it was uh a false report made on me and I was asleep at the time that the police came. I walked out to the driveway barefooted and cuz I had just awakened and I was told that the police were waiting for me outside and I didn't even know that this stuff was going on and That is one of the issues. And the other issue is that I don't know why we have to go on a budget. I would like to bring this up when President Trump is giving away $40 million or something like that to Argentina of taxpayers money which Argentina didn't even work for. And the oil fields, why do they allow them here in Bakersville to make their home? and they brought in so much money to our county and to have them. >> Your time is up. If you can just conclude your statement, just go ahead and make one more sentence if you'd like. >> I want the oil fields to come back. I don't feel that they should have to get the booted out of Bakersville. >> Thank you, Mr. Kle. Are we able to get somebody just to follow up on her concern about Caesar Chavez? We can work together on that. Thank you, Madam Clerk. Anyone else? >> Mayor Go, we have not received any additional speaker cards for non-aggenda public statements. >> Thank you. Uh, for the record, Council Member Gonzalez entered at 334 and Council Member Arius at 336. Next item, please reports item 3A, first quarter general fund budget update. >> Mr. Click. >> Mayor and Council, we are pleased to provide uh an update on our budget through this first quarter. I would just note a couple of uh highle thoughts before turning time over to our finance director. Um we often give budget you know updates um here and there and and in particular of course always do midyear but we had made a commitment this year to uh have more formal quarterly updates to your council given that uh we u had to make some adjustments in this last budget cycle to um reduce some of our spending to within the resources that were available to us. Uh we also used a fair amount of one-time resources to balance the budget last year and we have been in pursuit of uh savings um to help us both um meet our budgets currently uh but more importantly to look forward to future years. We we anticipate over a 5-year period the need to make uh some notable structural adjustments. And so we have a a report mostly on our quarter 1 savings, but then we'll hit some highlights as uh to our early efforts in better understanding uh where we're at in the budget um and how we're already planning ahead for next year. With that, I'll turn it over to Mr. McKean. >> Thank you very much. Good afternoon. Randy McKean, finance director for the city. Uh I was going to talk about what Christian just talked about, but what he said. No, I'm as you understand, we had some budget challenges uh as we went through the June meetings and as we did that, we made this this promise to really bring updates as much as we could to really let council know how we were proceeding through a challenging budget year. So, that's what we're doing this the quarter just into September 30th. So, we're now moving forward with this analysis so you can uh really understand where we currently stand specifically with the general fund as was said. So just uh to step back, give us a little bit of a quick review of where we stood. As you know, 2526 budget was completed at the end of June. Uh we understood that there were some challenges. And so through the efforts of staff, uh city department staff, budget office, city managers, we were able to establish and build a balanced budget of over $850 million. With that said, we understood that there were challenges going into the out years. 2526 is balanced. uh but through our long-term forecasting we also saw challenges coming into 27 and 28. So we we understood revenues uh specifically tax revenues were not growing as fast as general fund expenditures were specifically pension costs salaries and benefits uh insurance costs cost of maintaining our equipment. So we understood that something had to really be a move forward really to build a sustainable general fund. So, the budget office put together a five-year plan really proposing a reduction in general fund costs specifically over five years of reducing the general fund salaries and benefits specifically for by 15% with that first cut uh anticipated in 2027 of 5%. Again, it is a plan. So, every year we we anticipate periodic re reviews would be necessary. The 15% could be reduced. It could be increased based on the results of each of those fiscal years. That was the initial plan that we've laid out for you. In addition to that, based on the budgetary situation, we also felt it was prudent to initiate a hiring freeze for the c first quarter of this fiscal year. So, we move forward with that hiring freeze uh to build additional resources both to address potential shortfalls, potential increases in costs for this year, but really in my mind to really build additional resources so we can work towards balancing 2027. So with that said, we again moved forward with the hiring freeze and this is really what we've are really initiating this particular uh update. So we when we we we froze positions uh in the in across the city actually I'm sorry not just the general fund total of 150 positions were frozen in part or in total for the first quarter of the fiscal year. 118 of those are general fund position which includes PSVs. In addition to that, we we froze 30 enterprise fund positions, wastewater, solid waste, uh a water department just so we could all be consistent in this freeze and we also froze one two positions funded by special revenues or grant funds. So that was 150 positions that we froze uh in part as I said uh for the first quarter. We did allow after the first quarter we are moving forward with opening up those enterprise funds in that special revenue those special special revenue positions. So those are moving forward whether they've been filled or they are moving forward with being recruited. In addition to that we and an anal had discussions with departments again there are 118 general fund positions but we had the discussions with the departments understanding needs uh uh shortfalls and and service levels. So we opened up in addition to the 32 positions additional 25 positions in the general fund to be either filled they already are filled or they're moving forward with recruitments. that leaves 93 positions to currently frozen uh for the general fund. So that again builds towards what we're doing now where we're building a projection. So we forecast we built a special forecast specifically looking at general fund dollar uh general fund salaries and benefits. We don't have enough data right now to really build analysis of the tax revenues. Uh first quarter's just finished. We don't get the analysis from our sales tax consultant for the first quarter revenues until early December. the first phase of property taxes are just getting deposited over the next couple months. So really we're focusing specifically on this first quarter, the general fund salaries and benefits costs. So we built this forecast looking at those costs specifically to understand what the results of this hiring freeze specifically. So based that forecast also took in looked at the the last month of September uh salaries and benefits and projected that out for the rest of the fiscal year. We also built in some some different measurables. Um the forecast also has we know certain employees have step increases. So the forecast understands and puts builds into that cost those step increases that are due to individuals that haven't reached the top tier of their position. So we understand when those occur and we build that into the cost escalations as well. In addition to that we under uh we understand that there were increases already budgeted for medical insurance. So we got some information from our medical insurance uh consultant recently last month actually and there that increase was budgeted at 7% and we are actually seeing a 15% increase starting calendar year 26. So we built that about million dollar increase into our projections as well. This forecast also assumes that that 93 the cost of that those 93 positions are going to be frozen all the way to the end of the fiscal year. So the value of those 93 positions as attrition occurs throughout the year. There could be shifts. Some of those positions that were frozen in the first quarter could open up if we find additional savings in future attrition item uh vacancies. So it this assumption is that that value of the 93 positions will stay frozen all the way to the the end of the fiscal year. So with that forecast methodology laid out here is where we see what we've gleaned from this hiring. Uh just so gets a lay of the land, the uh actual budget for last year um actual expenditures for last year for salaries and benefits is $278 million. The budget for this current fiscal year is $297 million. Through the first quarter, we have expended $98.5 million. So with that forecast and the methodologies we laid out, we anticipate that the forecasted salaries and benefits in the general fund will be $288.5 million. So that compared to the budget shows that we have an additional savings from this hiring freeze of $8.7 million. Again, with the anticipation of being really used for escalations of costs, used for any shortfalls in revenues in the current year, and it's primarily used in in the budget officer's mind for closing the gap that we anticipate we'll have to fill uh for 2027 fiscal year. So going forward the plan is to maintain as I said that hiring freeze level that those 93 position positions have to be the cost of those 93 positions have to be maintained and saving has to be maintained all the way through the calendar year fiscal year. We also have plans the the the close out for a fiscal year 2025 hasn't completed been completed yet. So we have final acruals of revenue final acrals of expenditures for 2025. Then we will close out the books and understand what effect that that has on fund balance. When we look at the preliminary projections show that our revenues are not going to sign really going to be at at general fund budget for revenues expenditures are not going to have significant reductions below the budget. So we don't expect a significant windfall at all from the results of the fiscal year 2025. But we also don't expect it to dig into available resources going into 2027 or 2026 or 2027. In addition to that, every year we look at capital improvement projects and then if those capital improvement projects have available funds and it's done or if we anticipate or see a need where it's not necessary to move forward with that capital project, we actually sweep that back into our fund balance and make it available for f uh additional costs, future projects, those types of things. So we're going through that process with the departments right now to identify projects project savings and then build additional savings uh for as additional resources. In addition to that talked about that 5% increase uh decrease uh for the general fund departments. Uh so the departments have completed their memos and we are analyzing those right now looking at whether you know the effect that they will have on service levels and staffing. We are going through those numbers right now to really understand what that 5% does for each of the departments. So, we're looking at that and we're finalizing that. We may come back to departments say it's okay. We may say they need more uh as we move towards preparing the 2027 budget. That's what we we want to make sure that they know where to go with those 5% uh reductions as we prepare 2027's budget. So, with that, I'm going to pass it back over to city manager Kle and then we'll open it up for questions. Thank you, Randy. Uh, a couple of things to just note from the slides that were just presented. Uh, when we talk about the hiring freeze numbers and those positions that were moving forward, um, we have authorized or I've authorized staff in uh, water and in solid waste to move forward with several uh, vacant positions. They're not generating savings for the general fund. We've also deconlicted any of those enterprise positions that may impact other funds that are general funded funds. Uh wastewater, we're actually waiting on those positions. Uh just to note that also for the general fund positions, a bulk of that those 25 are actually positions that were authorized to be filled before we started the hiring freeze. And you know, that's somewhat telling that that's a long time ago, but we still haven't actually finished some of those recruitments. But then a handful of positions that we have uh freed up, we we were having a challenge with um uh some of our uh follow-up police work and we were short detectives and I authorized a couple of detectives to be filled. We also have had a couple of support positions that are really important in policing that we've authorized to be filled. There have been two fire uh command staff positions we've authorized to be filled. And then development services is a fair chunk. uh we've actually had uh 10 positions that uh are in development services and even though there that's a fee supported it is also general fund subsidized activity and so those positions were frozen and unfortunately we've fallen too far behind in our permit timelines to a level that is unacceptable and so I've authorized us to fill uh five positions that are going to help us get back on track and catch back up in development services. Those are just a few of those highlights. And then on the slide that you noted, the $8 million projection, our goal was to to achieve an additional $4 million in savings. I had included that in my budget memo to council. And uh because uh we've uh held um a majority of all of our positions vacant, we we anticipate achieving a higher level of savings. But also, I do uh recommend that for the majority of uh positions, we continue to hold them vacant throughout the entire year. There's two purposes there. Uh I think it's important to achieve that 8 million instead of the four. That's going to set us up better for next year. Second, as we're reviewing these department reductions, we don't want to fill a position that could be on a list of positions. So, we're not going to include in next year's budget, and it gives us more flexibility to make the right decisions in the reductions that we're going to see. Now, back to uh Oh, thank you. Randy was moving the slides. Back to our next steps slide. Just a little bit more on each one of those uh items. Uh for our final close out, I think Randy characterized it well. Um but I was just going to put a little bit of a finer point on it that from an operating standpoint, uh we have had prior years because we'd had multiple PSVS vacancies that we saw large savings from our operations. We do not expect to see that this year. The good news is we also don't expect to see any, you know, any uh um red ink. It's we're going to be in the black, but it's, you know, the the savings of unexpended revenues is probably going to be small in that, you know, two to four million range. Um and uh we're not going to see those big windfalls like we have in prior years. And then for carryover of our CIP projects, again, we've been able to complete lots of CIP projects and we're seeing some leftover savings in those projects. Um I don't also anticipate a major windfall there, but we are because we we're seeing some, you know, this budget constriction. Uh some of those projects we've allowed to kind of just carry from year to year, we're not allowing those to carry forward anymore. If they're if they're not a priority, you know, for for several years, then we need to think hard about, you know, why that is. And there will be some projects from 24 and 25 that aren't finished, and we need to carry those forward. Um, but we're uh closing out many more of our CIP projects to make sure that there's funding available to finish some of these other CIP projects that may have had shortfalls, but also to create fund balance because part of our strategy over the next five years is we are assuming that we will use fund balance in some of these years because we're not going to be completely structurally uh adjusted um in the next uh two three years. We're going to still use some of those one-time monies from fund balance uh to continue to balance the budget. Again, that is not our reserves. It's not our rainy day reserves. That's just one-time fund balance that we can use to balance the budget. And so, I I do anticipate um that we're going to have several million dollars of CIP savings. Uh but we also planned for um several of those million dollars to help be fund balance for next year's budget. But we will have uh some one-time monies that are available uh for midyear, you know, priorities of the city council. Um and I think that's probably going to be in, you know, you know, a $3 million range for priorities of the council. And then the other fund balance we want to push forward to next year. uh to help us uh with the budget. And then lastly on the department uh reviews, uh while we haven't locked in uh all of the suggestions that they've made about what those um reductions will be after our initial review, I'm confident that I can tell the council that we will achieve that 5% savings. We will have 5% less in operating and personnel costs in next year's budget cycle. uh also we will do so in a way that is not going to uh create too dramatic of service level impacts but I will tell you there are some service level impacts we're going to see some service levels um um decline um but uh I feel also confident that they're the right choices about what are those things that we can give and what are those things that are more priorities to not give on service levels uh but the important part is that 5% reduction represents about $13 million in the general fund of expenses that we will not um um h include in next year's budget because of those reductions. And that's important. Uh um I wanted to be able to confirm that um it was feasible and doable and and it it it is. We will be able to make those reductions in next year's budget. With that, we will um actually uh as our new um protocol uh stands, I believe um we would go to public comment and then we'll have opportunity for questions from mayor and counsel. >> Thank you, Mr. Click. Thank you, Mr. McKean. Madame City Clerk, do we have any requests from the public to speak on this item? >> Mayo, we've not received any speaker cards regarding this item. >> Thank you, Council Member Basher. So the the goal is basically the 15% over five years is that kind of what we're we're moving that's what we're we've adopted. So, I noticed even on that 15% we're still at a loss up until about 20 2030. And you know, I appreciate uh a reduction, but it does uh bother me a little bit when we cut back some of our CIP projects because of our constituents and a lot of those capital improvement projects are things that a lot of our con will there be other things that we're looking at uh trying to thin out uh you know on top of the 15% you know maybe not so much capital improvement projects or stuff that impacts a lot of our taxpayers but uh maybe some of our partnerships that are you Will we be having other conversations about that as well? >> Absolutely. I'm glad you brought that up because I had intended to share that in addition to the 5% we've been looking at uh because the 5% is really personnel and op, you know, core operations, but we've also looked at from the finance department and city manager's office some other moves that we can make that would generate some significant savings outside of just those personnel uh adjustments. And so I actually would I'm hoping to come to your council with probably closer to a seven or 8% total reduction by next budget cycle because we've been able to make some of those other moves. Things like uh reductions to our um OPED contributions because it's a largely funded program. Uh we're looking at uh revenue generations like um potentially short-term rentals. That was a committee topic uh earlier today. Uh we're also uh looking at some just program savings is also program prioritization. We do think that there are some you know programs that um just don't rank as high a priority as other programs. And so um there's we've already identified um close to $5 million in other savings that we will propose to the council that let's reduce those you know programs beyond the 5%. Um, also just wanted to clarify the 15% is all operating. It's not CIP. Um, and the CIP savings we're talking about were from savings from other projects. But uh actually you know as we as we move through the adjustments the next five years I think it's actually important to um we're reducing those ongoing costs because they have those 20 30year impacts that should free up more one-time dollars in the short run because we're trying to really focus on ongoing savings and so we may actually have a little more capacity for CIPs. >> Yeah. in and my comment in regards to CIPs was more about, you know, uh uh infrastructure level CIPs and that being the focal point and pretty much nothing else. Uh because that's what impacts our community the most. Um that that's important. But uh man, I just had dad brain right now just totally froze. It's probably better that way. Um oh the the positions. So, as we we move quarter to quarter and we see some of these vacancies and departments are moving the way they should be, uh I feel like it would be important that we zero out those positions so that if there is an actual need, they have to come back and so that we don't balloon up into this point where we're, you know, uh at a deficit year over year over year over year. Um I've brought that up before, but I'd like to now that we've gone through this a little bit just so that we have a little bit more accountability and and handle on where we are that that's seriously considered. Maybe we discussed that at our next personnel meeting or maybe there's some more information in regards to that. I understand there is a need for some of those, but uh you know to to juggle it back and forth and get ourselves back into this position. I I just don't want to see that happening and that's all I have. >> Thank you, Council Member Gonzalez. >> Thank you. Uh a few questions. We talk about a 5% reduction, but I want to kind of put some context to it. How much has our general fund budget actually grown from premeasure end to measure end implementation >> significantly. Um Randy may be able to go off memory or pull up some of the numbers but yeah 50%ough grew. So our general fund grew 50% as a result of measure end and now we're taking a look at a 5% reduction from the overall budget. >> Correct. Now I would put into context our expenses have also increased. Uh just the expense the the cost to do the same amount of work has increased but total general fund dollars. Yes. I'm I'm I'm going off a little bit of memory here but you know we went from you know uh in the um low 300s to now $480 million a year. >> Okay. you know, in 2022, uh, city's um, budget and finance committee brought to the full council a, uh, budget guideline, uh, to limit ongoing costs at 70% of our budget. Today, we're far beyond that. Can you describe for the council and for the public how did we get so far above that 70%. >> Uh I I would just clarify one piece to uh that it was the council adopted a um policy for the PSVS funding to not be over 70% of um of ongoing. And um just again to be accurate and and I think your your um I'll add more context to to I think your question. Um the PSVS approved positions are within 70% of of ongoing. So we have not exceeded the PSVS policy. However, we're taking $12 million of PSVS and it is helping to fund operations in the general fund. And so in that in the spirit of that, yes, it's, you know, we're we're spending more uh than 70% of PSVs technically on ongoing operations because PSVS funds are supporting general fund operations. And and that really is how we got to where we're at today is that revenues have not kept up with expenditures and and our largest uh expenditure areas happen to be personnel. It's 70% of the general fund is personnel related costs. It's between 70 and 80% are personnel costs. And as our personnel costs um have increased um and and it and it being again the general fund being mostly personnel, it continues to eat up more and more of those ongoing dollars. Uh we've seen increases in our health insurance rates. We've seen increases in our insurance rates. we've seen increases um but also in our compensation but I think as necessary to be able to recruit and retain employees and then revenues have just not kept up with those cost escalations. Yeah, I think that's an important point because I think there's a, you know, there's this narrative out there that somehow, you know, PSVS was only supposed to be for new stuff and when in reality, you know, it was to help prevent further cuts from the general fund for basic services like police and fire uh that the city would have had to make were it not for some sort of additional revenue like PSVs. >> That that is accurate. the the the biggest challenge in our general fund budget is the original general fund. The positions that we've had out there for police and fire and and our you know core uh streets services and our core parks services those are the revenues that are are excuse me those are the costs that are outpacing revenues while the positions added under PSVS have remained within the budget that we identified for them. That's the original general fund. That's the big challenge. >> Okay. Um and you made a you made a comment regarding fund balance versus reserve. We we also established in the same year a reserve policy um that stated that we would work towards a a reserve that equals two months of cash flow. and then a facility reserve which would um which we would uh help build up with 25% of fund balance at the end of the year. Um where are we today with the reserve fund because we are not talking about any of our reserve funds right now. We're talking about fund balance the money that that we have in excess at the end of the fiscal year. >> Yeah. Thank you, Council Member Gonzalez, Mayor and Council. I would also state that uh I wouldn't uh recommend the use of reserves just for your you know annual operations. It's meant for you know more you know significant challenges. >> I'm not suggesting that. No, I agree. I'm just reiterating to your point. >> We haven't touched that because we we haven't needed to >> and um so our reserves uh we have $56 million in our reserves currently. uh we have been within that um that two-month working cash which is by the way the government finance officer association's recommended recommended reserve level for working cash and I would also note that there are few large cities in California that actually meet the GFOA recommended standard and thankfully Bakersfield has been one of them in this particular year is the first year because uh we had actually reset our revenue baseline with that PSVS revenue change that we've discussed between city and county remittance and uh because we knew we were going to make be making some adjustments to the budget. We have yet to make this next allocation into the reserves to be at our full two months but we've been at or close to two months you know since um we built up the reserves um early um in uh after measure N. So we have a healthy reserves of $56 million. our facilities reserve. Our goal is to get up to 10 million. We're at five million, but historically we had, you know, zero to very little and we're at least at $5 million today. And then also our pension trust fund we created. And and that's where we're the our reserve policy states that if we have one-time monies, we take at least 25% of that and put it into our pension um trust fund. And that's going to help us balance out those peak years uh when Kalpers's costs are at their highest. And that balance right now is over $6 million. It's up to seven now. We're making good interest. >> Great. Okay, that's it for right now. Thank you. >> Thank you, Council Member Coleman. >> Thank you, Mayor. I want to invite the mayor to welcome the uh students from BC. We don't generally see them at uh at the 3:30 meeting. So, welcome. And uh you're welcome to a master class in budgeting. So, and if you don't understand what's going on, that's okay. I'm not sure I do either. I don't know. >> But I I did want to ask the the city manager about uh when we're going to see uh a line by line uh you know budget or actual to budget for the first quarter. >> Uh we could provide that. >> Yeah, we can provide that in the next week by memo. >> I thought Mr. Higgin mentioned that he didn't have the uh the uh revenue side of that. >> Sorry. Yeah, the revenue side we will not have until December. Um but from an from a budget to actuals, we have that now >> I don't have and I maybe I misspoke or again the communication was unclear. I'm not sure about the I don't have the final numbers for 2025 yet. We and we don't have again property taxes don't come in until November, December. So, we really don't have revenues to report on the budget to actuals for 2026 yet because they they they're come they don't come in uh regularly. It's it's a cyclical process specifically with property taxes. So, we don't have that analysis, but I can give you budget to actuals for expenditures again by the end of the week. I could run a report. you might go blind with that report. I could run some summaries for you, but um that information is available. >> So, uh are there no uh projection tools or anything to get us an idea where we're going to be? Uh uh I I I I know that you don't see property taxes till after December. >> Yeah. >> And but isn't there some projection tool that we have >> specifically with property taxes? We just use the value the assessed valuations we get from the county and then we just build that into our projections. They give us really good numbers honestly uh to uh budget for the >> let's talk about the one that varies because the property tax we can print that one down right but it's a sales tax number that is is the variance. Do we have any projecting tools to show us where we're going to be at? It really is based on the our our consultant is HDL and they really look at all the industries analysis of those industries after they get that first quarter. The first quarter is already obviously done. The final allocation is going to come in middle of this month or actually the middle of this month has passed. So probably by by the end of this month I should be able to see it. But that then they an analyze where the resources have come from what which whether it's autos whether it's business and industry whether it's the restaurants those types of things they give us that analysis and looking at the really comparing it to history based on you know prior years. So that again it takes a quarter the first quarter they they takes them about a month to analyze it and then they give us the report by the first part of December. >> Okay. Well thank you for understanding the budget to the details you do. I really appreciate you and your department as a resource. I I wanted to ask one last one last question, I promise. Uh you made you made a city manager, you made a comment about uh the fund balance reduction and uh you know we're going to continue to have you know using fund balance to balance our budget for the next few what how many years you think that's going to continue? We talked about maybe having some kind of reduction of the fund balance year-over-year. >> Yeah. And and um um just to to clarify, Council Member Momen, and by the way, Council Min has done a lot of homework to understand the budget, and that's why he can ask these questions. Um uh it's a reduction of our reliance on fund balance, right? It's, you know, we're going to use less and less fund balance to balance the budget each year over the next five years. And that was our that was uh the the goal that we set in in the memo following up on your own referral after the budget process was to um wean ourselves off the use of that fund balance over a 5year period. And each year it'll be a bigger chunk. So this first year is a really big chunk. This first year is going to be in that that uh 13 to 15 million less use on fund balance. Um and then uh we would in subsequent years take additional chunks but actually smaller chunks each year and so the first two years are the big ones. So in in this year and next year it'll be a 9% total you know reduction in our reliance on fund balance. >> And do you feel that you're on target for that? >> We are absolutely on target for this year's 5%. >> Uh I believe we're going to do more than that and I do I actually think that the second year is going to be a little more painful. >> Okay. Thank you very much. I I have no further questions. Mayor, >> thank you. Council member Coleman, is there anyone else who wishes to make comment or ask a question? Seeing none, Vice Mayor, >> motion to receive and file. >> You have a motion. Please cast your votes. Motion is approved with council member Weir absent. >> Thank you, madam clerk. Next item, please. Close session item 4A, conference with labor negotiator. Okay, we are adjourned to close session. Students, uh, welcome BC students. I'm not sure that uh this is enough of time for your professor to give you credit. So, you might want to check in and just remind your professor that it's better to send people to the 5:15 meeting because often times we go into close session. That's where we're going to go right now. So, you won't be able to hear us, but you can check in with your professor. Thank you, Renegades, for participating in the civic process. And wake up whoever you are back there. [Music] [Music] [Music] [Music] Heat. Heat. [Music] [Music] [Music] [Music] [Music] [Music] [Music] [Music] [Music] [Music] [Music] [Music] [Music] [Music] Heat. Hey. Hey. Hey. [Music] Hey hey hey. [Music] [Music] [Music] [Music] [Music] Heat. Heat. [Music] Heat. Heat. N. [Music] Heat. Hey, Heat. Heat. 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[Music] [Music] [Music] Hey hey hey. [Music] [Music] [Music] [Music] baby. [Music] Hey [Music] [Music] reconvening the 3:30 city council meeting. Madam, city attorney. >> Thank you, mayor. One item on close session tonight um and that item has been uh continued for further discussion to the next meeting. Thank you. >> Thank you. And with that, the 3:30 meeting stands adjourned at 5:29. Thank you all for your patience. We're going to need a few minutes to switch out for uh our technology and then we'll start the next meeting shortly. Thanks for your patience. [Music] [Music] [Music] [Music] [Music] [Music] Welcome to the Bakersfield City Council meeting. This television broadcast is brought to you by the local cable companies, the county of Kerna, and the city of Bakersfield. You can watch the rebroadcast of this meeting Saturday at 700 p.m., Sunday at 10:00 a.m., and the following Wednesday at 7 p.m. You can download the agenda for this meeting at www.bakersfieldcity. us. Preciding over this evening's meeting, the Honorable Mayor Karen K. Go. >> Good evening. It's my pleasure to call to order the 5:15 regular city council meeting of October 22nd, 2025. Madam Clerk, please call the role. >> Mayor Go here. >> Uh, Vice Mayor Core >> here. >> Council member Arias >> here. >> Council member Gonzalez >> here. >> Council member Weir. Council member Smith, >> I'm here. >> Council member Coleman >> here. >> Council member Basher >> here. >> Thank you. Welcome to all of you. Thank you so much for your patience in waiting for us tonight. And tonight we have the pleasure of having BPD Chief Terry lead us in the invocation. Following the invocation, Nathaniel Catalan, who is a sophomore at Garcus, will lead us in the pledge. Nathaniel is a youth commissioner in ward one uh ward six, sorry. He's a life scout if you can't tell from all his uh wonderful badges. Currently working on his Eagle Scout project for Troop 125. He's on the Garcus robotics team as captain. Also a member of the engineering club, the math club, mock trial, project lead the way, chess club, tennis and soccer teams. Thank you so much for all of your accomplishments. Chief Terry, come forward and would you all please stand. Good evening. Let's pray. Our father in heaven, thank you for this day and thank you for our city and our community uh that is here tonight and the thousands across that are watching and waiting for decisions to be made and impacted by decisions that are made here every week. I pray that you'll give us as leaders wisdom and clarity and focus to prioritize um what is needed and necessary for our community. And I pray that you'll give our leaders uh that focus and the wisdom to make these very important decisions. And we thank you for all that you've done for us in Jesus name. Amen. >> Amen. Nathaniel, >> please place your right hand over your heart and join me in the pledge of allegiance. 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. >> Thank you. You may be seated. Nathaniel, would you like to introduce your family? Um so here today I also have my family with me. So we have my dad here who is um an a civil engineer for the city of Bakersfield and we have my mom here who's a professional diialysis nurse for Dvita diialysis. >> Thank you so much. Thank you for your service and thank you parents. Here are a few guidelines to help our meeting run smoothly. We request that you turn off your phones. Please be courteous in the use of cameras and videos. For safety reasons, and as a courtesy to others, no signs are allowed in the council chamber or in the lobby. Applause is allowed during the presentations portion of the meeting, but not during other portions of the meeting. Everyone in attendance is expected to adhere to the rules of decorum established by the city council. Failure to abide by the city's rules and decorum, including any disruptive behavior that interferes with our ability to have an orderly and efficient meeting prevents the city council from conducting the business of the city. Consider this a first warning to everyone in attendance that conduct that disrupts the meeting may result in expulsion and/or the chambers being cleared. Behavior that disrupts the meeting includes repetitive statements, shouting, hate speech, interrupting staff or presenters during the meeting, speaking out of turn, and outbursts from the audience. Madame clerk, next item, please. Presentations. Item 4A, proclamation to Janessa Fischer, peer support specialist for Kern County Superintendent of Schools and Youth Action Board Chair, declaring homeless youth awareness month in Bakersfield during November 2025. Youth experiencing homelessness could be a young person you pass by in a grocery store or they could be a classmate of one of your children. Nights often spent hiding, couch surfing with friends, sleeping in cars or abandoned buildings looking to find a safe space to rest. Each year, more than 4.2 Two million youth across the country experience at least one night of homelessness. Established in 1992, the Kern County Network of Children focuses on protecting and enriching the lives of children in Kern County. And they identify and address the most critical issues of our youth in Kern County, including the prevention of child abuse, neglect, and homelessness. And so tonight, I'd like to read this proclamation. Whereas Kern County Superintendent of Schools identified more than 7,100 children who lacked a fixed regular or adequate nighttime residence per the Mckin Vento Act. And whereas in addition to losing their homes, many homeless youth will also lose family, friends, a sense of stability, safety, and increase the likelihood of substance abuse, early parenthood, and vulnerability to being trafficked. And whereas local organizations including Kern County Network for Children are working to promote youth well-being and educate the public on potential dangers youth experience while homeless. Now therefore, I Karen go mayor of the city of Bakersville do hereby proclaim November 2025 as National Homeless Youth Awareness Month in our city and urge all citizens to support organizations that provide services and resources to help youth. It is such a blessing to have the Kern County Superintendent of Schools, the Dream Center, all of those who are really supporting our youth. And tonight, it's my honor to be able to present this to Janessa. Thank you so much. We appreciate you're being here. Come on forward. >> Uh, good evening, Mayor Go, and members of city council. I want to take a moment to thank you for your continued support of youth homelessness and our community. My name is Janessa Fischer. I'm chair of the youth action board. >> My name is Adolf Waldino. I'm a member of the Youth Action Board. >> I'm Rain Latcherson and I'm a member of the Youth Action Board. Um so youth action board is a committee under the Bakersfield current regional homelessness collaborative. Our board consists of 10 youth who have experienced or currently are experiencing homelessness. Together we work and to improve the support for youth facing housing insecurity. Um homeless youth awareness month is important because it raises awareness and the challenges of homeless youth. Um and it helps reduce the stigma and educate our community on what it likes to be looks like looks like to be a youth in homelessness. Um it also gives young people the platform to share their stories and inspire action from community members and policy makers. Um our list of youth experiencing homelessness usually consists about 200 to 300 each month. These are transitional age youth 18 to 24. A lot of the older population we see um of homelessness is because they're aging out of that 24 and going into older population. So if we are able to stop it here with youth during this time they we don't even need to push them into that um category. Um these are transitional age youth 18 to 24 as defined defined by the department of housing and urban development meaning there are many living on the streets or in shelters. In addition to this there are approximately 17 more than 17 7,000 um 7,000 uh students grade K through 12 in Kern County who are identified as homeless each year under the Mckin Vento Act. This broader definition includes young people who are couch surfing or doubled up with others due to financial hardship. As youth action board, we organize youth centered events to raise awareness and educate our community about these challenges. We have so many events. I can sit here and list them all day, but if you want more information, you can go ahead and call the dream center and ask for Janessa or you can look on our Instagram youth at kern youthaction board dot not dot anything but kernaction board. Thank you guys so much. [Applause] That's okay. Madame clerk, we have another presentation. Presentation item 4B, Excellence in Action Cares Awards 2025. Good evening, honorable mayor go and members of the city council. My name is Shayla Collins and I'm the human resources manager with the city of Bakersfield. I also serve as co-administrator of the city's employee incentive team. The Excellence and Action Cares Awards recognizes city employees and teams who embody one or more of the city's the city of Bakersfield's guiding values and principles. Those include collaboration, accountability resourceful excellence, and stewardship all while making a positive contribution to the workplace progress. These contributions may include significant involvement in major projects or impactful daily activities to carry out city goals and objectives. Each year, the employee incentive team seeks nominations from within the organization to honor those individuals or teams who have distinguished themselves on outstanding public servants or as outstanding public servants. Additionally, the CARES extra mile award is presented by the city manager office and that honors an individual or team that has gone above and beyond. The winners and their families were invited to attend the meeting this evening. At this time, I'd like to ask if you're here, if you don't mind, please standing. Don't be shy. Please stand. Congratulations. Thank you. All award recipients will be recognized in a commemorative video that will be unveiled following this brief introduction. Copies of the video along with awards recognition will be provided to the winners after the ceremony. Before the video begins, I'd also like to acknowledge the dedicated efforts of staff who nominated their peers for these awards, the support from the supervisors and department heads, the technology services media team um for producing the video, and the employee incentive team for their work in re reviewing the nominations. And most importantly, thank you to each city employee for your ongoing commitment to serving the public and exemplifying the sound of something better in Bakersfield. And now I would like to present to you the 2025 Excellence in Action Cares Award video. >> Thank you, Miss Witz. [Music] I am truly honored to be here today to celebrate the outstanding contributions of our city employees. Individuals who bring to life our guiding principles of collaboration accountability resourcefulness, excellence and stewardship together known as cares. These principles are more than just words on paper. They define who we are and how we serve. Every day, our employees embody cares through their dedication, creativity, and teamwork, making a lasting difference, not only within our organization, but throughout the entire community that we're so proud to serve. [Music] Alexandra Cruz, accounting specialist one, finance department. Amy Porwall, police officer, police department. Brandon Doyle, Senior Police Officer, Police Department. Brienne Banks, Secretary 2, Public Works, Solid Waste Division. Charles Hernandez, code enforcement officer 1, development services. Dina Murphy, crime analyst, police department. Deonte eps, technology services technician, technology services. Fernando Montes, civil engineer 3, public works. Hector Hernandez, admin and fiscal services specialist to public works, solid waste division. Jesse Ayala, supervisor to public works general services division. Jose Fernandez, associate planner, development services. Julio Seovva, facility worker, recreation and parks. Moises Bibian, light equipment operator, water department. Omar Flores, Jr., Supervisor 1, Water Department. Rosario Negrrete, Accountant One, Water Department. [Music] The CARES Star Award honors teams that consistently collaborate and go above and beyond to reach their goals while exemplifying the CAR's guiding principles. This award emphasizes and reinforces the importance of all employees supporting each other for the overall success of our city organization. This year's CareStar award goes to our park rangers. The dedication to excellence is evident in every aspect of the park rangers division job duties. They have consistently exceeded their responsibilities by identifying and mitigating potential safety hazards prior to escalation. Their continuous pursuit of excellence sets a commendable standard within the department and directly contributes to a safer, more engaging experience for our entire city. Since the inception of the Ranger program, they have been successful in reuniting homeless individuals with family, connected individuals in need of support with resource services, and have even saved multiple lives by administering Narcan during critical emergencies. Their exemplary work has earned praise not only from the public but also from senior city officials. [Music] The extra mile award is recognition from the city manager's office based on outstanding and exceptional job performance. This year's recipient has gone far beyond the call of duty and her service to our community. It's my honor to recognize an exceptional member of the community vitality's impact team, officer Amy Porwall, recipient of the extra mile award. Officer Porwall manages the department's recordkeeping for high utilizers of impact team resources. This is a critical initiative that identifies individuals who are repeatedly engaging with multiple city services, often due to challenges related to homelessness, mental health, or substance use disorders. It is a small number of individuals that require a significant amount of staff resources. The information provided by officer Porwall allows us to allocate those resources as effectively as we can so that we can create the biggest impact possible. This work is not simple enforcement. It's proactive, compassionate, and highly strategic. Rather than just responding to incidents, Officer Porwall takes a datadriven case management approach, developing intervention strategies, locating individuals involved in ongoing investigations, and coordinating connections to vital social services. Her work requires exceptional collaboration across departments and unwavering dedication to follow-through. It's the kind of commitment that truly defines what it means to go the extra mile. Congratulations to all of our award winners. Together, your achievements remind us that when we lead with purpose and care, we create the sound of something better for our workplace, our community, and our future. >> Congratulations, Officer Porwell, Park Rangers, and to all of you who are exemplifying excellence in action. Can we all have you stand up again for another round of applause, please? Thank you very much. You are welcome to stay and enjoy the rest of the meeting with us or if you would like to do some other things tonight, uh this would be the appropriate time to leave. Oops. Can somebody close that door, please? Thank you, officer. In keeping with council's resolution, public statements are received at different times. Depending on the item, I'll call on the city clerk to call for public statements. If you wish to make a public statement, please fill out a public speaker card and place it in the tray next to the speaker's podium. We ask that you mark whether you're here to speak on an item listed on today's agenda or in a matter not on the agenda. Speakers who do not identify a specific agenda item will be presumed speakers for the non-aggenda public statements. If you're here to speak on an item not listed on the meeting agenda, you'll be called first to speak. Statements are given a two-minute time limit per speaker, 20 minutes total for all non-aggenda item public statements. If you're here to speak in an item listed on the agenda, I'll call for you at the appropriate time. If public statements become disruptive and I have to clear the chambers to re gain order of the meeting, you'll be called in one at a time to provide your public statement when your item is called. Madam clerk, do we have any public speakers regarding items not listed on the agenda? >> Mayor Go, we have not received any public speaker cards for items not listed on tonight's agenda. >> Thank you. We'll now move on to the public statements listed on the agenda. If you're here to speak on items listed under consent calendar item seven, your time to speak is now. Again, each speaker is given a two-minute time limit. Each agenda item is limited to 20 minutes total. The consent calendar as a whole constitutes one agenda item. If you're here to speak on public hearing items 9A or B or reports item 10A, now is not the time to speak. You'll be given an opportunity to speak when those items are called later in the meeting. Madam clerk, do we have any public speakers regarding items listed under consent calendar item seven? >> Mayor Go, we've received one speaker card regarding um item 7D2 and it's Joel Rowan Pamo. >> Welcome. Please introduce yourself. >> Good evening, Mayor Go and members of the city council. My name is Joel Pamo. I'm the senior director of strategic communications with the Greater Bakersville Chamber of Commerce and I'm here this evening also on behalf of the Bakersville Business Coalition representing a broad cross-section of local employers and community stakeholders. We have formally submitted a joint letter which I have here copies for you um regarding agenda item 10 A7D or 7D2 um in regards to sewer user rates. In that letter, we respectfully urge the city to defay costs associated with necessary sewer infrastructure upgrades. >> Rather, mayor, >> I think you're on the wrong item right now. It's close. It's sort of related, but that is coming up later. >> Okay. >> Um, so that is 10A. If you'd like to wait until that time, it would probably fit in and you'll be able to speak after staff's presentation. >> Sounds good. Thank you. >> Thank you, Mr. Pamo. Thank you, >> madam clerk. Anyone else for agenda items? >> That was our only speaker card received. Mayor, >> thank you. >> Vice Mayor motion to approve a consent agenda. >> Sorry. >> Mayor Go. I have not received any requests for recusal items or to pull anything. >> Consent calendar items 7A through 7 I for approval. Oh, wait. Sorry. That was me. Sorry. Just checked out for a minute. All right. Uh, and I have not received for that item uh any request for recusal or for agenda items to be pulled. So now, Vice Mayor, motion to pro approve consent calendar. You have a motion. Please cast your votes. Sorry, I traveled to another planet. Motion is approved with council member Weir absent. Thank you. And now next item, please. >> Hearings. Our next item is public hearings. Each side will be allowed 15 minutes. It's 15 minutes for all speakers per side. So, it's important that you identify yourself and make your statement succinctly so others may speak. Also, please note that we have a court reporter present who will be transcribing the hearing items and therefore it's very important that you speak slowly and clearly so that we can have accurate records. Our court reporters are fantastic, but sometimes they cannot keep up with the rate at which we speak. We'll hear statements from those opposed to staff's recommendation first. Then we'll hear from those who would like to speak in favor of the staff's recommendation. There's testimony on both sides. Each side will be allowed a 5-minute rebuttal. There's a clock in the TV screens behind me which indicates 15 minutes. After 14 minutes, a yellow light will come on. At the end of 15 minutes, a red light will flash indicating your time is up. Quickly end your statement. You may ask questions during your statement, but they won't be addressed until the public hearing is closed. If you have written comments that are longer than your verbal statement, give them to the clerk. She'll provide copies to the council. Please be courteous to others who wish to speak. Madam clerk, please read the first public hearing item. Public uh hearing item 9A, public appeal hearing of planning commission's approval of vesting tentative tract map number 7500. A staff memorandum was provided transmitting correspondence received. An additional staff memorandum was provided um requesting item B continue to a future meeting date to be determined. Additional time is needed to review the recent correspondence submitted regarding this item. >> Thank you, Madam Clerk. So, at this time, hearing item 9A is open. While the public can make public comment today, we encourage you to wait until this hearing item is renoticed at a later date. Madam clerk, do we have any speakers regarding hearing item 9A? >> Mayor Go, we did receive one speaker card regarding item 9A from uh Victoria. >> Victoria, in light that it's going to be postponed or renoticed at a later date. Do you still want to speak now? >> It will be renoticed and Thank you, Madam Clerk. Anyone else? >> That was the only card received, ma'am. >> All right, so I'll close the public hearing and re and at this point, um, Madam Clerk. Oh, I'm sorry, somebody's waving. >> Yeah, council member button, but it says I'm currently the active speaker, but >> and I see nothing on my screen right now. I just like to make a motion to uh adopt staff's recommendation to uh refer back to staff for additional >> can continue the matter to a future day. >> Thank you. >> Thank you. Council member Commen. You have the motion. Please cast your votes. Mad, are you having any technology issues? Mayor Con, I'm going to have to do a roll call vote. We're having some technology issues. >> Yeah, go ahead. >> Vice Mayor Core, >> yes. >> Council member Aas, >> yes. >> Council member Gonzalez, >> I. >> Council member Smith, >> yes. >> Council member Kleman, >> yes. >> Council member Basher, >> yes. >> Motion is approved with Council Member Weir absent. >> Thank you. indefinitely. It will be renoticed and we'll communicate the information. >> Thank you, madame clerk. Next item, please. >> Public appeal hearing to consider planning commission's approval of conditional use permit 24-00 and its proposed uh notice of exemption from California Environmental Quality Act. Thank you. Do you wish to read anything further on that? >> City Manager, please. >> Thank you, Mayor. I'll turn the time over to Mr. Burns. >> Mr. Burns. >> Mayor, council members, I have a quick slideshow. Uh, this is project uh CUP 24-0010. So, it's uh 2930 Union Avenue. And what we have here is a uh project submitted by Paul Den and Associates for a uh representing Upscale Union LLC is requesting a conditional use permit to allow a banquet venue in a C2 regional commercial zone located at 2930 Union Avenue. And this is the uh showing the location uh sequ determinations projects found exempt in accordance with section 15332. It's a class 32 infill project. Mhm. >> Um, planning commission uh voted unanimously to approve the project subject to conditions modifying the hours of operation from 8:00 a.m. to 12 midnight to 8:00 a.m. to 1000 p.m. This is based on neighbors behind the facility um concerned with noise and disruption to their to their res neighborhood. The commission findings were documented resolution 44-25 and this is a site plan showing the the layout um and the alley. So it's the neighborhood uh behind the alley where the the residential neighborhood exists. So who's pled and why? It's the owner of of the facility Union Up uh Upskill Union LLC following appeal planning commission decision specifically challenging the new condition regarding the hours of operation. The appeal argues that the events are scheduled usually between 8:00 p.m. and 900 p.m. and that the revised conditions therefore would limit events to one to two hours instead of what they're they're desiring. And that's that's really the the subject of this appeal tonight. >> Thank you, Mr. Burns. Mr. Kle, anything before we continue? >> Thank you, Mayor. No, >> thank you. So, at this time, hearing item 9B is open. Is there anyone who'd like to speak in opposition to staff's recommendation? Please come forward to the mic and identify yourself and proceed. Seeing none, is there anyone who wishes to speak in support of staff's recommendation? Please step to the mic, identify yourself, and speak. Welcome. Would you raise the microphone, too? >> Yes, absolutely. Good evening, everyone. Council members, mayor, vice mayor, and staff. I appreciate this time. Uh we're here tonight. Uh my name is Nab Bra. I'm with Five Rivers Investment Group. Uh uh Israel, one of the owners of this property, uh a local um um of Bakersfield, California. he uh reached out to me to ask uh uh some consulting in regards to this project. And we're here tonight to respectfully request uh an extension of the condition for moving the timeline um that was approved at the planning commission hearing from 10 p.m. to 12:00 a.m. Um overall, just a quick summary of this project if the council is not familiar with uh the background of the project. Uh in general terms, this use wasn't um the best use uh for the given area at the time when he purchased the property. It used to be a former recreational dispensary. Um, and now, uh, Mr. Israel is going to be coming into this piece of property, um, providing major, uh, private investment, um, in an area where I feel Bakersfield has been focusing on, uh, the past year or so, um, with new infrastructure uh, that's gone through Union. I went to school in this area. I frequented this area. I've done a couple construction projects in this area. and from when I grew up to how Union looks now north of the 58. Um um I really appreciate the amount of effort that City of Bakersville has put into this side of town. Um and I believe uh uh Israel and his team with Upskill Union LLC um are going to be adding something that's uh uh going alongside the city ideals for the project uh for for the city infrastructure in the in the area. Um, so in a in a sense, we're going to be aligning the vision. Uh, it's going to be a clean quality development. Um, the condition from 1000 p.m. to 12:00 a.m. request. Uh, appears to be more so on the minimal side. I understand there's, um, residents in this area that may be of concern. And in projects like this, um, I think we can get down into the nitty-gritty of the constructibility of the project and acoustical decibel level, um, uh, conditions. Um, when we've built car washes next to residential areas, we've been conditioned with uh acoustical components that the project has to meet certain amount of minimal decibb before it can be approved in a building permit. Um, in addition to that, uh, you know, this is going to be an area where people get together um, in a place where I feel it might be an underserved area of Bakershaw. There's not too many halls on this side of town and he would be investing quite a bit of money. Um, all in events would be indoors. There'd be on-site parking. There would be security. Um, and uh, it's going to be a hands-on ownership. It's not just a Joe Schmo coming in and trying to turn this into a nightclub. Um, it's a it's a good family that would be respecting the residents neighborhood, a family that's invested a lot into the city of Bakersfield. Um, so it's just a request uh to see if we can find uh some other a meeting point where um it wouldn't affect the development and we can work together as a team in coordination with the city of Bersville to find something that would be more um doable um so he can have events that go past 10:00. I believe his request is till 12:00 a.m. Um, we're here if you have any questions. Um, at the end the project is going to be replacing a use that probably wasn't the best use um in a time in an area of town that uh uh might need it. Um, thank you so much. Appreciate. >> Thank you, Mr. Madam City attorney. >> Thank you, mayor. Uh, for the court reporter and the record, uh, this past speaker was really speaking in opposition uh to staff's recommendation. Uh for clarity, staff is recommending denial of the appeal and upholding the planning commission's decision. Uh that decision was to place the time limits on it. And this speaker was asking that those time limits um be increased. So mayor, I'll leave that to you as to whether you want to um use this time again for those in opposition and restate it. Thank you. >> Yes. Is there anyone else who would like to speak in opposition to Steph's recommendation? Seeing none, is there anyone who'd like to speak in support of staff's recommendation? Seeing none, I'll close the public hearing and return it to council for comment and action. >> Council member Smith. >> Thank you, Mayor. I had a question for the applicant. The uh you said I had parking and I only see a few spaces and it looks like maybe there's the space is enough for 100 people or so. Um yes. So there they're at this exact time the parking obviously isn't the most ample, but the hall space that is available is not meant to serve crowds uh where the parking would overflow. But I think the intention is right now to get the business started um and limit the quantity of people in the hall until um an expansion parcel would be created to create more on-site parking. Um, but I believe there's, correct me if I'm wrong, there's opportunity for street parking there, but I believe the owner himself is not um is not uh wanting to go that route to do street parking in respect to the neighbors. >> What does it I'm having trouble with this site plan, but I don't see any place where you can add parking. >> Uh, I would have to pull up the site plan to know. It's all building and then just parking in the back. >> You want to come up here real quick? >> Just the back and the front. >> So right now at this moment it would be just the back and the front for parking. >> Does staff is there parking requirements? I'm sorry. >> Councelor Smith, I believe the the bank hall had an occupant load of 48 individuals and I believe there's a total of um 12 spaces provided for the facility. So, it's it's a little on the the the light side, but it meet met the ordinance for the proposed use, but it it was again the noise and the parking was why the neighbor behind the facility was concerned. >> Are he mentioned doing actual acoustical decel? Is there any requirements for reductions of noise? Um looking through the conditions I did not see a specific a specific acoustical um requirement for the building. Uh in fact this is a rather um larger building and what's being proposed to be utilized is a small component of of the building. So, if you look at the floor plan itself, um there are some bathrooms and um some storage area that kind of buffers between the banquet area and and the alley of the building. Uh but there is not a specific condition that I see in the U staff report or the the resolution for any kind of additional acoustical requirements. the I guess the other thing is you know what doors are getting or open opened in order for the noise to get out. But anyway, in general, I'm in favor of developing Union Avenue and making something happen there. Uh, I'm not really hearing specifically from the neighbors what the concern is. So, I will listen to other council members, but um I'm generally in favor of it. Thank you. >> Thank you, Council Member Smith. Council member Gonzalez. >> Uh, thank you, Mayor. Um, yeah, I was going to make a comment regarding parking. The staff report indicates that there are 10 parking spots. I just want to make sure that we get clarity. Um I do see the occupant load at 48 individuals, but um the staff report does indicate that there's 10 parking spots there. Um it it seems reasonable to expect there will be some on street parking. Um this area actually is not in my ward, but it used to be for six years. Um the Alta Vista neighborhood, so I'm I'm well aware of the street. Um and Quincy neighborhood. Um there's some uh long-standing families in this area. Good, good, hardworking uh families here. And um I know that the street parking is already impacted just by the the the nature of the the homes and um and the demand for uh parking in that neighborhood. And so that is one of the concerns that I have just initially looking at this. And then um as that relates to the operation hours um can staff describe u a little bit better what the concerns were and who actually attended the planning commission on from the neighborhood. >> Council Gonzalez, uh it was a neighbor uh directly across the alley from the facility. >> Okay. U and again they were concerned about noise, people loitering after events and basically impacting their uh enjoyability of their residents. >> Okay. I I uh I'm very sensitive to this because you know I represent an area that has a lot of mixeduse areas and um there are at times certain conflicts with with regard to event venues or uh restaurants that often operate very late and are adjacent to uh a residential area where you know people getting up early and trying to work um and trying to get some rest. And so, um, I'm a bit concerned about extending the hours. Um, I would like to hear from my colleagues, uh, because I do agree with Council Member Smith. Uh, on the other hand, there is a benefit to, uh, investing on Union, investing in properties, uh, in this corridor and, um, we we can do a lot more in terms of redevelopment in this area. Um and so certainly this is a a better use than the former. Um but uh the question is what are the real negative um negative impacts to the area surrounding um this particular property given the event space and the operation uh hours. Um, so I I'm inclined to um support staff's recommendation to limit um the hours to 10 pm. U my question is maybe perhaps we look at days of the week. Can we modify it and perhaps 10 p.m. Monday through Friday and or or Monday through th or Sunday through Thursday and then till midnight on Friday and Saturday where I think more folks would would be uh inclined to stay out later and it might be less of an impact to the neighborhood. >> Council member Gonzalez, yes, you you could modify that condition as the council sees fit. >> Okay. Council member Arius. >> Thank you, Mayor. Um I I too have several of event halls in uh Ward One um that are right across well well one of them in specific right across from W 7 um where the noise is such a challenge that you can hear it across an arterial street. Um which is just shocking to know that that's possible. Um, and so I I do share that sensitivity. Um, but at the same time also appreciate the fact that uh we're trying to do something positive. Uh, bring in a positive business. Uh, it's a small relatively small footprint um, in a disadvantaged community. Um, and as we continue to revitalize Union, I think we need more uh, good businesses along the corridor. Um, I guess my question I have a couple questions for the either the applicant or the representative, Mr. Brower. Um, if I could ask a couple questions. So, just thinking about the event hall business kind of model and business operation, uh, it seems to me like moving up the, um, hours of operation, closing at 10 10 p.m., would you still be able to operate the business as normal or, you know, h how will that impact um your ability to to operate? >> Well, yeah, thank you for that, Eric. Uh, Mr. Arius, I I think that's a good question. Um, obviously with the event segment uh industry, there's going to be multiple facets of the business. You know, there'll be daytime events and I think this would be um kind of a bummer to the evening events. Um um at least uh you know, and this demographic and I can only speak on uh my demographic. You know, there's a saying that goes in our community, Indian Standard Time, when an event starts at 6:00, it really doesn't start till 8. Um, so that that that is that is something that I could see uh being an issue especially for the property owner where two hours of an event might not cut it and might push people not to sign the contract uh for this business owner. Um I think uh for it to be available on the weekends would be a a great opportunity uh for the business owner. But I do think um just as a general from the scope of the business uh from the outlook of the business um and even myself if I wanted to rent this place and it would have to I would have to be out of there by 10 um I might just think of doing it somewhere else. So I think there would be uh it's hard to say how big of an impact but there would be a significant impact from that perspective. >> Got it. I appreciate that uh that response. Um, you know, my my my opinion is that when there are uh challenges with event halls, oftent times it uh comes down to whether or not the applicant or the business owner and their team are actually responsive. Um, and so I I think you had mentioned a couple of assurances um that you know, you're going to go above and beyond to be able to uh make sure that the community um uh that you're a good neighbor uh in this community. So, could could you reiterate those? >> Yeah, absolutely. Um, I I think uh the the ownership that's taking this over and wanting to create this use, um they're very family based oriented uh uh family. They have their own kids. They understand what it's like to be bothered at night. They understand what it's like uh just to manage a business. Um so, from that perspective, I think, you know, the the property itself would be in good hands. They're again, they're not um and let's just even back up here. Um, in its former use, I can probably guarantee you that there was a lot of activity after midnight in a former use as a as a recreational uh facility uh for whatever it was. Um, but as far as this use and this new ownership um they are going to be fully hands-on. They're going to be fully involved. Uh, so much so as being there at the event nights. And most of the event hall owners that I know here in town that I've had the privilege of representing and working with, uh, they're there every night, um, making sure the property is being taken care of, making sure their management team that's there is being in communicating with each other, making sure the security is on staff at all times while events are going on. Um, because nobody wants to to to be that hall where something happens. Um, so I think this this uh ownership would take a very proactive approach and understanding uh the concerns of the residents at any given time and and being a neighbor that if a resident comes up and has a concern, they would try to alleviate that concern as quick as possible. >> Fantastic. I appreciate that response and um I mean no disrespect to you or to the applicant but often times you know when we're talking to developers who are looking to get their permits there's a lot of asurances on the front end um and then we end up having to deal with the problems on the back end oftent times you know having to deploy you know police officers in the middle of the night um multiple times throughout the year and so I just want to uh share that thought but I I have one last question for the city attorney um in In the past, we've uh put an additional condition um where we request that an item be returned back to um the council. Um would it would it be appropriate um if I I I made a motion to uh accept the appeal, deny staff's recommendation, but then request that this item returned back for further review in 6 months? or would it be more appropriate to send it back to the planning commission for further review? >> Madam city attorney, >> uh, mayor, council member Arya, cups don't traditionally and historically have a time limit on it. So, uh, I would encourage you, um, not to do that. Um, but what you may want to do is you may want to add an additional um condition of approval that if there are um excessive uh calls for service uh that the matter returned back to the planning commission for for further review and then that would give the neighbors um perhaps some uh some degree of of comfort. >> Thank you. Then I'll I I'll make that motion that we accept the appeal uh deny staff's recommendation tonight on this item and add the additional condition that if there are excessive calls for service at this particular location um that this item be returned uh for further consideration. Thank you. >> Thank you. >> Thank you, Council Member Arus. Council member Smith, >> I was going in that directional approval. So, it's a condition of approval and if they do not comply, then the cup could be taken away is the point. >> That's correct, Council Member Smith. Correct. It's a it's a it's not an easy process, but this at least at least gives some teeth uh for the neighbors or or um the council uh and law enforcement if that were to happen. >> And can I understand what excessive is. >> Um, again, very good question and it it really there isn't a black and white answer as to what excessive calls are. Um, what I would tell you is we would relate back to our municipal code and and that has a standard of reasonleness. So, if a neighbor is making a complaint during the day, I would tell you that as a general rule, that is not going to be reasonable and that would not that would inal's opinion not be considered. It wouldn't go into the category of having an excessive number of um calls for service. I would also say that if we get to that point in time that legal would want to know from law enforcement, what is the surrounding neighborhood? What else is there? And what are the other calls for service? and that's what one would judge um the excessive calls for service at that particular location. >> So, it's going to be um it's going to be uh facts fact specific and and it's going to be um fluid. >> Thank you. I I think there's an opportunity to, you know, improve the neighborhood and improve what happens around there. So, I'm in favor. Thank you. >> Thank you, Council Member Gonzalez. >> Yeah. My question was the how do we define excessive as well? And I wondered if there was um another way to sort of measure um sort of the the thresh threshold at which we return the item back to the planning commission. Um, and I know we're workshopping this in real time, but city attorney, if you have any other ideas beyond the excessive, I'm I'm interested in hearing that, you know, um, you know, sound levels, for example, if it exceeds a certain threshold, requiring uh, the property owner or the tenant to mitigate for sound. Uh, some of those things are more, I think, compelling for the neighborhood than this loose definition of excessive. >> Sure. Um, Council Member Gonzalez, Mayor and Council, again, I'm going to defer to staff as to whether or not there were acoustical requirements um as conditions of approval for this CUP. I um I was not at the planning commission when the conditions were developed, but I do agree with you. Um again, if Phil has those handy, great. Uh there are I believe at one time there were decibel levels in the municipal code and so um that would be another level that um a neighbor or law enforcement um would bring up at to the planning commission. They would measure decibel levels and they would bring in what standards of care are and what other standards are there in the in in that particular neighborhood. Right? because what is what happens in that neighborhood may be much different than what happens in in another neighborhood with within the city of Bakersfield. So that's why again I think there's a little bit of of of leeway here as to what really is excessive. You have to go to that particular community in that particular time. But I will refer to um Phil if there was any additional conditions on the applicant. >> Mr. Burns. Yeah, there there's not additional conditions and I I would uh recommend to the council that they did not add something regarding decibb and requirement. Uh that's very difficult to um enforce because we would actually have to be out with a a um decimeter that's been certified at the time of the event to measure. These are very very difficult. I've I've had to use similar enforcement for um idling trucks in truck yards. That was something a little easier or something that's ongoing. But this something that's going on at midnight, getting a staff member out and this happening, it's just it's not realistic. And I think the other thing is usually when the this nature of a um facility goes back to revoke a CUP, it's usually a a pattern that staff has been out, PD's been out, code's been out. We have warned them. We have tried to work with them. We have met with the neighborhood. I I think assessive is fine because it it's clear that staff has not been able to mitigate the issue. So, we feel that it needs to go back to the planning commission. >> I guess my question is in 10 years time or you know in in in the future there's a complaint an excessive number of complaints but we don't know what the complaint is. If it's if it's about a sound impact at 11 p.m. uh you know code enforcement officer is going to say that is not a legitimate complaint because it's within the hours of operation that we set forth in the cup. So I guess I'm trying to understand what the actual complaint is within the hours set forth in the cup. So, Council Gonzalez, our general plan specifies what a normal noise level is, which is like 50 decel at the property line. If someone is woke up in the middle of the night because a party's going on inside their house, depending on the windows are open, windows closed, windows closed, it's going to be on beyond what those thresholds are. And normally when we have these type of of issues next to a residential neighborhood, uh that's the scenario kind of like the scenario with the noise going across an arterial, it's I think it's the the adding the condition to me is I think it's a nice thing, but the reality um staff's going to look at the the complaint um and it's hard for them to to also articulate what what that excessive is. I think if it's a violation of the CUP that they're exceeding the standards which is really in the general plan and and the the um uh what's normal in the neighborhood, we would take that back to try to revoke that CUP anyway. And I think what city attorney is trying to do is is is adding something to it. And it's it's it's a difficult thing to add because it's it's subjective, >> which is why I'm trying to get clarity. So, I mean, the question really is between the 1000 p.m. hour and the midnight hour, not in the middle of the night. And what is that, you know, complaint that would register a code enforcement officer or staff to then say this is an excessive number of complaints? I guess I'm trying to understand exactly what that means. Council Gonzalez, that still would be subjected. So if we're getting numerous within a close time frame, so if you're getting in a month you're getting 10 calls for service or something like that, that would be excessive. If you're getting a a call once or twice through a six-month period, you had a specific tenant that caused an issue. It's not the mismanagement of the use. And that's really what how staff would look at that is is the use being managed or was this a rowdy patron because it could just be a person leaving with a loud stereo. You know, is it really the event constantly causing this issue or is it anomaly and that has to be um discussed with um the the uh individual making the complaint and then documenting. Madam city attorney, did you have comments? Also, >> mayor, again, I would just add again having the having the excessive number of calls in there. Again, it's not specific, Council Member Gonzalez, and and I I wouldn't be able to sit here and give you that give you that explanation, but it does allow for future intervention. If you don't have the excessive calls, then the cup is granted, and there's not much that one can do to to revoke it. So, we either go with keep the time frames in, add a little bit of flexibility to it, um or or you know, if there's another option that that that the council has at that time. Um and and but we deal with this all the time through through through the city of Bakersfield all the time. So if there, believe me, if there were an antidote, I would I would I would give you the antidote because that's exactly what we deal with day in and day out. >> I deal with it all the time as well. And so this is why this is I'm coming I'm speaking from experience from an area of town that has a lot of these different types of venues. And so >> it's reasonable. What is reasonable under under the circumstances? And does the excessive number given a reasonable standard allow staff or the or the surrounding neighborhood quite frankly to file a civil action against the against the business for interference with the quiet enjoyment of of his or her property and neighborhood? That's correct. >> Okay. I'm going to defer to staff on this one. Uh I think I made my point but uh you know in in the future I I think it would be helpful for us to identify what exactly is the nature of the complaint that uh we are identifying within the cup that will warrant uh some sort of action or review of of that of that cup in the future. Um my my fear is again that as we move down the road and many of us are are gone and perhaps some of us some some staff are uh are no longer with the city that this is interpreted in a completely different way and that um the residents who remain who will be there for years who have property there will not have any real recourse to address some of the the issues in the area because um you I I trust that the the applicant is a good um person and wants to do this really well and I I have no reason to believe otherwise. Um but uh it does concern me as we move towards the future what sort of recourse the actual residents have in the neighborhood. >> Council member Basher, >> there is no time frame for noise v violations. Correct. It doesn't matter if it's noon or 10:00. Council member Basher Tash, mayor and council, uh there is for construction. Other than that, it's what is reasonable under the circumstances. >> Okay. So, an excessive party at 1:00 in the afternoon is just as uh uh against as you know, 10:00 or 11:00. Disturbing the peace is disturbing the peace. >> I would tell you, I guess it depends on the neighborhood. You know, some neighborhoods in Bakersfield are really rockus and so that may be okay. Um but >> and if you're in the quiet area, yeah, you're right. That would be unreasonable. And just because it's an event space for, you know, different types of events doesn't give them the authority to be loud and excessive at any time of the day. They still need to be respectful of the neighborhood. And then uh lastly, I had a question about the motion that was made. Was that with the hours that were proposed uh for Friday and Saturday or was that just we're going to give it to him till midnight every day of the week? >> Council member Arius, >> the latter. Correct. >> Repeat the motion then that I hear on the floor to make sure I'm correct. It would be from council member Arius uh motion upholding the appeal and denying the planning commission's decision to uh approve the conditional use permit and um including the hours from um 8:00 a.m. to 12 midnight every night of the week >> along with the condition of the um no excessive uh no excessive complaints or it will be brought back to the planning commission. Council member Basher, do you have anything further? Right. I don't see any other requests to speak. So, you have a motion. Please cast your votes. Motion is approved with council member Weir absent. Thank you. Before we go to the next item, colleagues, do you need a little break? I think we do. So, let's take a 10-minute break and then we'll come back because I think the next one's going to take a while. [Music] [Music] [Music] [Music] Heat [Music] up here. Heat. Heat. [Music] [Music] down. Hey [Music] [Music] Feel [Music] [Music] feel. [Music] feel you. Heat. Heat. [Music] [Music] [Music] [Music] [Music] [Music] [Music] [Music] [Music] [Music] [Music] Heat. Heat. [Music] [Music] [Music] [Music] [Music] [Music] [Music] Reconvening the city council meeting at 6:48. Madame clerk, next item, please. reports item 10A, cost of service analysis and options for sewer rate sewer user rates. A staff memorandum was provided regarding this item. Transmitting correspondence received. >> Thank you, Mr. Kle. >> Thank you, Mayor and Council. Our director Budak will provide an introduction to this item and our consultants from HF&H will assist and Miss Budak will provide a presentation. Just wanted to give a little bit of context that um this is important information that is related to uh the sewer rates conversation that we've been having, you know, since earlier this year. We've taken our time to go do our due diligence to uh validate the information and uh based on our uh sense of the sentiment from the council and the community provide options that are reflective of uh what feels both prudent but also feasible. And so I'll turn it over to Miss Budc. >> Thank you, Miss Budc. Good evening, Mayor Go and council. Uh, see there we go. This evening, I would like to provide an update as to the status of our sewer user rate analysis. This presentation will include an update on staff's coordination effort with HFNH consultants. HFNH will provide detailed information about the cost of service analysis that they prepared and I will then present multiple rate scenarios for the council's consideration, the outreach plan that has been implemented to inform and educate the community and next steps. In May of Oh, sorry. In May of this year, council requested that the water department bring a consultant on board to review the 2025 supplemental report that reflected an the need to increase the rate to $950 annually. HF&H Consultants provides economic, financial, strategic planning and management consulting services specialized in solutions for local government water, wastewater and storm drain service and storm water services. They supported the wastewater division in the past and are familiar with our services and our system. At our request, HFNH reviewed and provided comments on the 2025 supplemental plan. Staff incorporated these comments into a financial plan which HFNH then utilized to create the fiscal year 2026 27 cost of service analysis, also referred to as the 2026 KOA. I would like to invite Rick Simonson from HF&H and his partner Gabe Sasser to the podium so they can present the 2026 CASA findings and then I will provide rate scenario analysis and options following their presentation. Thank you. >> Good evening uh council members, mayor go. I'm Rick Simson, senior vice president with HF&H Consultants, and I'd just like to start the conversation giving you a little background on first how residents and businesses are charged for the wastewater services, an analysis of a a summary of the cost of service analysis that we did conduct for the 26 27 fiscal year to generate sufficient revenues to cover the operating costs. First, we have three distinct customer classes because the wastewater discharges amongst these c different customers uh are different uh for residential, commercial and industrial type customers on the amount of flow that is discharged and the strength of that flow, the contaminants within that discharge that need to be processed. So we have three distinct customer classes and I'll detail how each one is charged and the resulting rates from our cost of service analysis. First, your current rate structure. Uh there is an annual fixed charge that is charged via the Kern County tax role for all customers. So is a fixed charge which is based on some assumptions of the average single family flow and loading characteristics. Uh that charge is currently $247 per year. That's to give you an idea. 220 gallons per day is the assumption for your typical single family. Because we know commercial industrial customers aren't like a typical single family home. They can be small businesses with not much discharge or a large office building. Restaurants that have more significant discharge and flow. There's a separate sir charge beyond just a tax ro charge and that's uh monitored uh during the year on how much flow that commercial business is actually discharging and they are charged monthly for what we call that excessive discharge not that the amount of water is being discharges just over and above what's already been captured on the tax roll charge. Uh likewise for industrial searchcharge are also uh charged on a monthly basis for more flow and strength within their water discharged to the treatment plant. I'm getting into a little bit more detail here. This summarizes it in a little more succinct way. As I mentioned, residential just has the fixed service charge on the tax roy charge. And we do also note that within the residential customer base, multifamily mobile home parks, they use water, less water typically. So they're charged 75% of that single family rate. For commercial businesses, uh regardless of the the type, if it's a school, shop, hotel, one, uh single family dwelling equivalent on the tax role. And then as I mentioned there's a separate search charge if you exceed those characteristics of a single family that's broken down into again there's a lot of variables or variances within your commercial customer base. So that's the search charge is based on a per 100 cubic foot amount of flow which is about 748 gallons per 100 cubic foot. Depending on the strength characteristic of that type of business, they'll be charged a different rate ranging from low strength up to high strength. For industrial, uh they also are charged if they exceed that single family equivalent based on flow and their respective strength. But getting into a little more detail where they can be more precise with how much specific flow what the BOD with and total suspended solids the strength are because there's only 19 of these customers and they can be sampled on a monthly basis. So it's just a little more precision when charging the industrial for the commercial just to give you an idea. And there there's a wide range. they can't be um monitored and sampled like you can with the 19 industrial. So, we put them into different categories ranging from low for your office buildings, uh small stores, schools up to a high, which uh high strength customers tend to be the restaurants, uh anything handling food that's being disposed and brought to the treatment plant. So getting into uh just a a quick overview of what is a cost of service study. There are three steps. We first look at the revenue requirements. So what are the expenses that need to be covered? So working with staff, understanding the operating and maintenance costs to maintain the system. Also looking at capital improvements that are necessary over the next 10-year period. So what is the revenue that needs to be generated to cover these costs? Once we identify that total, we need to allocate those costs to each customer class because as I mentioned, each customer class utilizes a system in a different way. Uh so we need to make sure we allocate those costs specific to each customer class and set their rates independent of one another to cover their specific costs. And then lastly, the rate design that I've just gone over. In this case, we're not recommending changing the rate uh design where you have a fixed charge on the tax roll and the search charges. We just need to increase those rates to cover the increasing costs. What are those costs? Uh here's a snapshot of the 26 27 in total about $165 million revenue requirement. Uh that's to cover all operating capital and reserve uh target costs. I'll mention we show a breakdown here and I think it's pretty apparent what's driving the increased costs capital expenditures and I'll note when the last rate study was done the annual revenue requirement was around 35 million so there's a significant increase being driven by those capital projects that we'll get into more detail uh during the presentation uh really largely around the plant 2 expansion uh 32 million gallon per day increasing that capacity to 40 mill million gallons per day and for your plant 3 treatment facility, upgrading and replacing that as well. So, uh a significant increase in those capital uh projects to maintain and be able to handle the increased volumes. I won't go into too much detail here, but as I mentioned before, a cost of service analysis is really uh in accordance with uh proposition 218. We need to allocate these costs, a portion these costs to each of the respective customer classes so they each pay their fair share. How do we do that? Uh there has been a detailed report included in the publication here, but I'll just quickly go through uh looking we categorize the costs into four different categories. What we call kind of account the SFDE equivalents. What are the common costs that each account should pay for? billing is the same regardless of how much water you use. Those kind of fixed costs are in that column A. We look at the costs associated with handling the flow. And then the strength, the BOD and suspended solids. We've identified those costs as I noted on line 13. They add up to 165 million. Uh but they are borne differently by each customer class. And we do that equitably by using those unit costs for the total s system and applying those to the unit service units of service within that customer class. For example, uh with the column A SFDE charge at $9849 per year, we know we have 119,000 residents. We multiply that unit cost time those residents and they need to cover 11.7 million. So we do that for each of the functions. So each customer class is paying the same unit costs, but as you can see, a majority of the flow and strength within the system that's being treated is primarily residential. About 78% of the costs need to be covered through the residential rates. About 17% through commercial, and about 5% for industrial. Once we understand what each customer class needs to generate, uh we quickly uh look to each individual uh rate itself. In this example here for the fixed charge for single family, it's just a matter of mathematics understanding those per unit charges I mentioned earlier from that 98.49 for the SFDE over to the suspended solids of 58 cents 57 cents per uh pound per year. We take the characteristics of your typical single family and again multiply those uh by the specific characteristics. For example, the average flow for a residents $107 HCF per year. Just multiply that by the $6.86. So we arrive at for that component $7365. So we do that for each component. And to generate the necessary revenue requirement from residential, we'll see that charge is now exceeded $1,000 at $,86.92 per year. So less than $100 per month. As I mentioned earlier, multifamily discharges about 75% the volume of single family does. So that charges 75% of the single family rate. We do that again for the search charges for commercial. I won't get into the details but again each of the types of businesses be they low medium medium high or high are charged for that excessive flow on a per HCF basis uh which you'll see there the current charges in the first column of numbers that range from $3.72 up to $682 per HCF and they are proposed to increase to $783 3 cents per 100 cubic foot up to 15 $15.39 at the high level per HCF. So again, these rates are set to generate just their portion of the costs that are borne by commercial customers. And lastly, again, not getting into too much detail, but just to reiterate that each customer class and rates are set by using the same unit cost. So the flow $6.86 for the total suspended solids. We just apply those to uh the mechanism in which we are going to charge these for example based on flow million gallons uh to industrial customers for $9816 per,000 pounds of BOD and suspended solids accordingly. And we did do a comparison here to show that the rates are increasing uh for industrial as well. You'll note that the suspended solids is increasing by about five times. That's really reflective of the additional treatment plant cost and the capital program to help with processing the more high strength customers. So I'll turn it back over. I just want to uh also state within the cost of service. This is based on uh the analysis as if everything is cash funded. So we'll go through some scenarios and alternatives again. So maybe we can mitigate the impact to rate payers and not cash fund all upfront. >> Thank you Mr. Sims. Miss Bud, >> thank you. I'm shorter. So I'd like to now go over the um some rate scenario analysis. Um I want to lay the foundation so that as we go through the scenarios, they're all um you have the understanding of how uh they were developed. So based on the input and guidance from HF&H, the water department prepared a 15-year financial plan which includes costs for operations, maintenance, and capital infrastructure. Because Prop 218 only allows for a rate to be adjusted for a five-year period, the rate that we're looking at will is is set to fund the 10-year plan, not a 15-year plan. Um, years 11 through 15 would have to be considered in another future uh rate model analysis and Prop 218 schedule. revenue generated from the five-year rate increase, plus the revenue generated from a sewer connection fee, which is the cost that a developer pays to connect to the wastewater system, and also the non-operating fees, which are fees that are charged to septage haulers that um utilize the plant to treat the septage that they collect. All of those revenues are included in this rate model. So in summary, the rate scenarios include 10 years of expenses, 10 years of revenue, existing debt service and assumes that plant 3 will be um expanded by 2031, plant 2 will be upgraded by 2033 and the site al the site location and the design of plant 4 would be included within this 10-year plan to provide a range of options for council to consider. Six scenarios have been developed. All slides identify the annual rate and percent increase for the 5-year period and the amount of bond funding needed to balance the 10-year budget. In addition, there's a monthly equivalent cost at the bottom that shows the range from year 1 to year five. In addition, a chart has been provided showing the annual minimum reserves which in which represent the which are represented by the red line. The annual target reserve which is represented by the blue line and the end ofear funding balance is reflected as the green line. Minimum reserve is calculated as 9 months of operations and maintenance expenses plus the debt service payment. Target reserve is the minimum reserve plus the 10-year CIP average. Finally, all scenarios assume that the fund balance will not fall below the minimum reserve. In March of 2025, staff recommended a $950 user rate increase. staff felt it was important to include this as an option based on the updated financial plan and the cost of service analysis. The 950 annual rate with a 3% annual increase would now require $180 million bond to fund the 10-year plan. The main reasons for the needed bond is because the rescended Prop 218 identified the 950 rate assuming that it would take effect July 1st, 2025. So the year of missed resident miss revenue needs to be accounted for in the bond amount. In addition, as part of the HFNH review, they advise that the CIP costs, the capital improvement costs should be escalated annually by 3 and a.5% to account for increases to labor and material. The 2025 supplemental report did not include an escalator. This escalation is also reflected in all the scenarios options provided. It is estimated that the $180 million bond will have a debt service payment of approximately 10 million uh dollars a year for 30 years. These should move a little bit faster um and we can ask questions at the end or discuss afterwards. Um, rate two scenario would be uh to start the rate at $700, which is 183% increase, and increase the rate annually to the KOSA amount of 1,087. This rate schedule would assume a $250 million bond to balance the 10-year budget, and the debt service for this bond would be 14.5 million. Rate scenario three would be to start the first year at $600, which is 143% increase, and then increase annually $100 a year for the five years to end at $1,000. This amount would require a $360 million bond with an estimated $20 million debt service payment. Finally, rate scenario four. This rate would begin at $475 and this rate is considered to be the lowest starting rate for the increase. If you look, the um fund balance is just above minimum reserve. So that would be our recommendation to be the lowest starting point. From there, we would then increase annually by $125 uh until it topped out at $975. This rate schedule would result in a $410 million bond estimated at 23.7 million a year debt service. So, uh, after reviewing these, um, uh, I worked with, um, city manager Kle, and he asked that we evaluate what it would mean to do the rate over a seven-year period and, um, and see if we could then, uh, keep it lower for longer, make it more gradual. So these last two scenarios assume that it would be seven years knowing that year 6 and 7 will require another Prop 218 in 2033. When I analyze this it it the result was that infrastructure had to be delayed because our current schedule would be to have plant 2 upgraded by 2033. It would just if I if we lower the rates, we would not collect enough funds and we would still have to have a big bond payment to be able to meet that schedule. So for these this analysis, plant 2 will be delayed 2 years from uh 2033 completed to 2035 completed. In addition, all the planning funds that were planned for site location as well as design would be moved from this 10-year plan into the out year 11 through 15, which would then result that a future plant 4 would be outside of this 15-year plan. To do this, we do that. We know it will impact the plant 3 expansion. Uh we just have not performed all that analysis at this time because by moving plant 4 out of the 15 years, we would anticipate that plant 3 would need to cover an additional ye four years of capacity until we would be able to bring that plant 4 online. Rate scenario five would begin at the $475 amount, a 92% increase. It would increase annually by $110 a year for 7 years. It is assumed that this rate would require no bond for the 10-year plan. We would have to re-evaluate at year 5 to ensure that we have funding to meet years 11 through 15. Rate scenario six again begins at 475 an increase of 92%. And in this case, it increased by hundred $100 a year until it topped out at the coster rate in year 7, which was 187. Um, there would be less revenue collected, so there would be a bond required. The bond amount proposed would be 90 million, which would result in a debt service of 5.2 million annual for 30 years. Those are all the scenarios that have been prepared to date. Um but we can provide any other suggestions. Finally, I would like to talk about the um efforts that the department has taken for outreach with the with the support of the city's communication and marketing team and city manager office staff. An outreach plan was developed. To date, there have been six community meetings, threeformational meetings for professional affiliations. Additional meetings are still scheduled and the wastewater website should be online by October 31st. This website will include information about the city's system and include all reports and presentations so that the public has access to them. Finally, next steps. Um the plan the plan is to take the uh Prop 218 request back to council uh the second meeting in January to request a rate that we can move forward with in the Prop 218 process. Um the Prop 218 would be mailed in early February. The 45day public review period would be between February and March. And depending on the timing, we would have a public hearing either the last meeting in March or the first meeting in April so that the new rate could take effect July 1st. And that concludes my report. >> Thank you, Miss Bud. Uh Mr. Kle, would you have any more comments? >> I do this time, mayor. Just a few. Uh first uh as it relates to schedule, we have been in communication with the county uh public works and that does provide more time for the county to pro to conduct their own Prop 218 process, you know, with um much advanced notice so that their timeline could match up with our timeline, which was one of the challenges last spring. And then shifting back to the rate scenarios, um was a little reluctant to send, you know, too much information your way, too many scenarios, too many options, but wanted you to get a feel and a sense for how the different levers that that we can pull affect the ultimate rates. So, if we bond or if we don't bond, if we spread it over 7 years or 5 years, if um uh we delay construction or don't let delay construction, if we include plant 4 or if we don't include plant 4. And I think it's probably worth noting that it also assumes that you if we're going to address 10 years of CIP within a 10-year time frame, if we raise the rates in this first 5 years, that is that assumes at least as a baseline not significant increases in the second 5 years. We'd have to always re-evaluate, look at inflation, look at our current costs. But again, in that seven-year model, it assumes still significant increases in years six and seven, but then not in um in 8, 9, and 10. Uh, and so we're happy to, you know, take questions, discuss, but I think this gives council a pretty good sense of the ways that you can address the need um and um collect enough revenues to fix the the problem because I think that's I think it's a bottom line that there's consensus around even in our community meetings is yes, we have deferred maintenance that must be addressed. Um but how we get there uh I think is the big question and there are some ways to influence that with the different inputs that we can consider. >> Thank you Mr. Kle, Miss Budak and Mr. Simson and team um public, thank you very much for your engagement in the outreach efforts. I know last night in particular there were uh challenging questions and staff thank you so much for uh your ability to address those challenging questions and uh they were very very engaged. So thank you for that. We're going to go now to the public for comment and so Mr. Pamo this is the time I think that you were seeking. Welcome. Please introduce yourself. Thank you, Mayor Go and city council. City manager click. Uh my name is Joel Pamo. I'm the senior director of strategic communications for the Greater Bakersville Chamber of Commerce, and I'm here also representing the Bakersville Business Coalition. Um it the Bakersville Business Coalition represents a broad cross-section of local employers and community stakeholders. Um we are here we have formally submitted a letter regarding agenda item 10B sewer user rates and in that letter we respectfully urge the city to defay costs associated with necessary sewer infrastructure upgrades rather than proceeding solely with a significant rate increase which I think you've done your research and there's quite a few options. Our coalition recognizes the importance of maintaining and modernizing our critical wastewater systems, but the proposed rate adjustments present a substantial financial burden on for residents, small businesses, and seniors living in fixed in on fixed incomes. We encourage the council to direct staff to evaluate a bondf funded alternative either in whole or in part. We appreciate the city's commitment to transparency and fiscal responsibility and we will look forward to working together to identify a solution that is fair and sustainable for our members and all Bakersfield residents. Thank you. >> Thank you, Mr. Paml. Madam City Clerk, do we have other speakers who wish to speak on this item? Uh the clerk gave us uh the letter from uh the business coalition, but I think that she unfairly uh characterized it as expressing their opposition. And uh I don't think that was the intent of the coalition. They're not opposed to the to uh the work they were planning to do. they only had uh uh uh they're supporting of the work that we need to do uh but just have concerns about the way that we're going to structure the financing. So uh I just wanted to make that clear that the the note from the clerk said that expecting their opposition, but I didn't take the letter that way. >> Thank you, Madame Clerk. Um there don't appear to be other requests. That was just uh another one from Mr. Permo. So, at this point, we'll go to council for comment and action. Council member Smith. >> Thank you, Mayor. I guess the the action part is my question. There's no really action tonight, right? There just discussion. >> Correct. Correct. Council member, this is a receive and file. We're looking for um discussion, >> right? And if there are requests for additional analysis that we can go and bring and ultimately bring back in January or if council desires sooner a um a decision about, you know, a a type of option to move forward with. However, I do not want to bring you six options in January. We'd like to have we'd like to have some discussion and and get a sense uh from that discussion of what analysis we should go and do and bring back to you just one maybe two options in January based off the scenarios you've seen. >> Thank you. Uh I might have missed it but I I didn't see total capital improvements. I see revenue of 165 million a year. But what what are we really building? What what's our capital improvements? Plant two, plant three. >> Yes. Um if I can grab it the have it on I apologize. I have it on the bottom of one of my slides. You have the total Did I miss it? >> Council member, over a 10-year period, it's 1.34 billion. >> That's the capital. That's actual capital. >> That's correct. >> Yeah, that's the total capital cost. Um, thank you, Gabe. So with that that would include uh plant two plant three uh which which are estimate um which plant two is estimated to be approximately 500 million um with escalation. I apologize I didn't bring that chart with me. Um but the overall would include a plant 3 expansion approximately 160 million. We're looking at 8 mill 8 million gallons and we're assuming $20 million per million gallon. And then uh the estimate for plant 2 uh was uh 500 million initially when we escalated it. I believe it's closer to 700 million. And we also have infrastructure for sewer line replacement upgrades um repairs and maintenance to lift stations uh storm drain lines as well as repair and maintenance for um major infrastructure for the storm lift stations. So it includes all the treatment or sorry the treatment plants as well as the uh sewer collections and the storm drain system. >> So the 1.3 billion is is just the capital projects. Yes. >> Doesn't include any of the ongoing operation correct cost. >> Uh all these scenarios what happens after the 5year or sevenyear or 10 year. So the the funds are uh scheduled for the five years to do the 10-year plan and at the end you can you can visualize that the um fund balance is typically going up after the 10-year and the assumption is that revenue would then be generated to cover costs for a plant 4 or to cover costs for uh another expansion to a plant 3. Um, typically a uh our system should be have some type of an upgrade, significant upgrade or expansion every 10 to 15 years. Unfortunately, plant 3 had their expansion in 2007 2010. We're now 15 years. We need to be thinking about another one. uh plant two because of the significant infrastructure improvements we need. It's kind of in the middle because it wasn't uh scheduled to be able to be that every 10 to 15 years we need to do something for our major infrastructure. So, we're trying to get back on that schedule. Unfortunately, we have the expansion, the upgrade, and then a future plant, and it's all within a 15 to 20 year period. The point the point of my question was the rates aren't going to go down after all of this. >> Correct. We will continue to generate revenue for the next major expansion or upgrade. >> Mr. Click, >> Council Member Smith made one of the points I was going to make. I think the other point is though that also it presumes that the rates don't increase in years 6 through 10. The first four scenarios have no additional increases in years 6 through 10 from what we know today. Right. >> Whereas scenarios five and six, there's those years six and seven with increases and then 8 through 10, no increases. >> So the the rate scenario number five is a seven-year plan with no bonding. Am I reading that right? >> Correct. And and that is because we've we've pushed the plant two out for two years. So that provides for an additional two years of revenue generation before needing th those funds to pay for that uh upgrade. And uh we pushed the the cost for the site and the design for plant 4 into year 11 through 15 and pushed out a plant 4. So, we changed the dynamics in some way where we then not only did we push the revenue generation over a 7-year period, but we really pushed our infrastructure needs over 20 years instead of 15. >> My first blush is I like that and >> understood. The reason being is on all these where you're you're showing the bonding, you don't show what that ends up costing the rateayers. >> Um, >> when you got to pay a bond back. >> Yes. And actually, it's included. So if you look at any of the rates when the um after the plant two is complete the rate goes down to being close to the minimum reserve as revenue is generated and it comes back the debt service payment is included in the fund balance line. So the debt service payment is included in the fund balance line with the green chart. >> That that is helpful Miss Budak. I think the question is debt service. How much do we pay in in interest in debt service for those bonded amounts? And we can provide that. It's in the it is in the KOSA. We can provide that. We just didn't put it on the slide. >> Generally, it runs about twice. I mean, you borrow 100 million, you pay back 200 million. >> Correct. >> So, it is included in the rates though >> and it's just absorbed in the fund balance. Got it. And the plant for it's just plan. Is it land acquisition or is it just the planning or what what's really in the plan? >> The funds that we have within the uh 10-year plan would be to acquire a site. So, money for land acquisition and then uh money to begin a design. >> Okay. >> Um that's all I have for now. I think it's important on any of the again the the bonding people need to understand, you know, you're you're paying a lot of money for that. Thank you. Thank you, Council Member Smith. Vice Mayor, >> thank you, Mayor. Um, I think I'll start with the community outreach meetings and I wanted to thank staff. Uh, we had a phenomenal meeting at Riu High School. Go Wolfpack. Uh, always love being back at my alma mater. But, um, you know, the feedback we received from residents was predominantly that they are they understand that a rate increase was inevitable. it just was the rate at which we were increasing it. So it is um uh while there are a lot more options there are a lot of options to consider. I hope that residents and constituents um have uh rest assured there are more options than there were before and we are evaluating all of them. And um I think it would even be helpful to share some of these at the upcoming um community meetings that are scheduled just so that folks understand and residents see exactly the ways in which we are analyzing um options that exist beyond what was presented to them initially. um especially um and for for the good of the public could you break down how a bond works >> or someone sorry big question I know >> I'll take I'll take a crack at that >> okay >> uh so essentially it's a way to pay for a large expense without having all of the money upfront we go out and and individuals purchase those bonds and and they give us funding and allows us to go and build that project in the short run, but then over a 20 or a 30-year period, they're we pay them back for loaning us their money and they get an interest, you know, uh on that because, you know, they're they want their money to to have value and and be put to good work. And so it does allow us to build these large public infrastructure projects because otherwise it sometimes can take you know if we waited 10 years to collect all the monies to do a project uh sometimes that's that's longer than we have um to collect. So it allows us to build the projects now and then um use you know investors finances to build our project but then we have to pay them back over time and they get that that uh interest uh payment back as part of our payment back for using their funds. >> Okay, thank you for explaining it. Uh I feel as we describe options with bonding maybe we just break that down. And I know most residents or folks in the public have an understanding of a bond or something similar. Um, but just what that really means, and we're not paying it right now, but it will be paid in some way, shape, or form at some point in time as Council Member Smith was indicating. Um, I too prefer the no bonding or as little as possible bonding options. Those, um, sound a lot more fiscally responsible to me. Um but my question and concern also is we've had a lot of conversation around capacity within infrastructure with delaying some of the infrastructure needs even by 2 years. Um and I'm sure that you all have had detailed conversations about this. Um what does that what does that mean? I mean are can we afford those delays uh on the capacity end of processing the waste? Um I think capacity is one question and then um upgrading or replacement of our existing facility would probably be the other. Um capacity will have a direct impact on obviously the city's growth. Uh so for us in all of these analysises we analyses we kept uh plant three which is the one that's nearing capacity it's about 65 68% uh we kept that in line with our projections as needing it by 2031. Uh we didn't move it uh because that would impact how the city continues to grow. Plant two I would probably have to defer to Evette. Sorry. Um, just to be able to explain the concerns because we did have a brief conversation about if we move plant by a couple years, um, we would have to continue to still operate the plant and make sure it's functional. Did you have anything to add? >> Good evening, uh, council members and mayor go. Um, I think, um, the director, uh, described it quite well. I mean, there is concern. I think we would have to um do some more interim um projects. Right now we have a plan and we have sort of a a targeted deadline for the completion. Um if we were to push it out, we would just have to go back and make sure that you know the systems that we had in place to make sure that they were um you know functioning operational with for the next six years. additional uh work would be needed to make sure that they're operational for the next eight years, perhaps next 10 years, so that we give ourselves that additional buffer. Um we know that there's always delays in construction bidding and things don't always um you know go 100% to plan. So we would just in in the interim go back and make sure that the systems are operational. >> Thank you. And it could just get more expensive to build them later. >> Correct. Yes. >> We thank thank you uh uh vice mayor for that that question. is that it we we are concerned about the risk that we think there's risk of just failure. We are concerned about the risk of you know escalating construction costs. One thought that I think um again we didn't want to provide you 10 scenarios. So just one thought about how we could balance the concern over delay versus keeping those rates at a phased approach versus bonding. If you looked at something like a scenario five or six, but you bonded a little bit more, a little bit earlier, you could probably still phase out the costs, but not have quite as big of a bond, but still start the project earlier, but you'd have to bond more in rate five or six. >> Yeah, that was probably my next point. If we do bond, how do you I guess do you do you bond initially and then phase it out? Do you bond in the middle of this seven-year plan? how how do you traditionally place like those funds and kind of apply those? >> So, um I would defer to Randy as far as the timeline, but for construction, we would we would need to have the bond funding available when we would go out to bid. Uh because we have to be able to award that contract for however much it is. Uh and so once you have that bond, payback begins as soon as the bond closes. So, you're going to have your bond funds coming in and your payments will start being made annually as soon as you receive that. So, uh I don't know how long it takes to obtain a bond, but we would definitely need it by the time we get ready to bid the project. >> Just to add a little bit to that, as far as the timing goes, it does take quite some time to go to market on a bond. I mean, it could take as much as a year and then typically you don't make that first payment until the next fiscal. could and it could be 6 months, it could be 12 months into that next fiscal. So under scenarios 1 through 4, the assumption is is that we would, you know, save up money for two to three years, we would go to bond for the full amount, go to construction, and then we would start paying debt service in 2033. >> Okay. So with the timeline you've given say we go with rate scenario six and we are proposing new rates on July 1st of 2026. Can you play out that scenario for me so I have a good understanding of when a new rate applies? Are you going to bond initially? No, you're not going to. >> No, we would bond probably two or three years later >> into it. Okay, that's what you mean by Got it. Okay. Um within at our community meeting for Ward 7, um residents asked excellent questions and staff had excellent and very patient replies as well. Um one question was the difference between commercial and residential and as like in South Bakersfield where we see so much development come online. Um can you help us understand and I know in the initial slides there was um a breakdown of capacity kind of being low, medium, high. Um how do rates differ and how would rates differ in some of these new rate models between commercial or residential or is there not a difference? Um >> yeah I mean we when we uh we can do this together. Um just so when we did run the rate models we utilized the cost of service analysis as the foundation to that. So as we were changing rates it was adjusting those um costs per TSS and BOD. Uh so we would be able to bring that forward. >> Yeah. with the selected um scenario and the bonding that would change the revenue requirement through the the period because as I mentioned earlier we assumed all cash funding the entire time. So what it it would adjust the cost of service analysis and adjust what I presented as rates downward not necessarily an equal amount. So proportionately it it may go uh down differently within each customer class but all those rates would come down and be reortioned based on that new units of service cost. So all rates will still increase just at a different amount. >> Okay. Is there a commercial breakdown we could see in the time to come as to how those rates would differentiate? The question that a resident had posed at my community at the community meeting in W 7 was for example we're seeing a Target come online you know nearby and they're like >> is target paying the same rate I am you know target can afford to maybe pay for some of these infrastructure improvements as they will also be utilizing the same wastewater system and um in providing them more clarity and having an answer um especially in the parts where we're seeing new development come online I kind of had the same curiosity. >> Yes, we can develop the rates as you saw for the cash funded for the different scenarios and bring those forward so they can see exactly where those rates will be and based on yes target will pay more uh because of the amount of flow that they discharge. So the the cost per unit um will be increasing and if you discharge more you're going to be paying more. So yeah, we can have those calculations available. I do I do want to provide one clarification on how that works though. Um so yes, we we do assume each customer class is going to see an increase. All three customer classes will see an increase. What we presented in the scenarios that's residential and it's actually you know largely single family to kind of um simplify it but we know that multif family has a slightly different rate as well. The KOSA has all that broken down based on certain assumptions. And if we just modify those assumptions, we can update the KOSA to say this is what everybody's rate is going to be. But the the thought about like sort of who who pays more, Target only pays more if they use the system more. But in a Prop 218, all users are required to be treated equally in the sense of no one pays more than their fair share for how much of the system they use. And so we can't sort of look to commercial or industrial to kind of subsidize residential. That's not allowed under Prop 218 law, but they will pay a bigger portion just because they use the system more. >> That's helpful information. Um, and I think I'll close by saying I appreciate the monthly breakdown as well. I feel that's what residents are really looking to see is not only what is my new annual cost going to be, but what is my new cost monthtomonth? And I feel especially right now in this economic moment when you know if the government is still shut down tomorrow, folks are going to be on food stamps are will no longer be receiving food stamps. So if we're conscious of what our residents are thinking right now, it really is the month-to-month cost. And even if the rates are changing next year, um it's uh it is it is on us to be thoughtful about um the cost we're asking our residents to take on even monthtomonth. Um it's just expensive to live in all in all arenas of life. So thank you staff for preparing this and uh providing this information and I look forward to more conversation. >> Thank you, Council Member Coleman. >> Thank you, Mayor. I'll be brief. Uh, first of all, >> always says so. >> Why everybody laugh? All right. I I I wanted to thank uh Miss Brook and you for your uh for your outreach and the community meetings. I think they the ones I went to went very very well. Uh you're very prepared and I think you uh answered all the questions as best as we have. So, thank you for that. Uh I like that your plan considers uh work on plants two, three, and a potential fourth plan. I think that's very very important that we be thinking about that. Now, um um I wanted to ask the city manager to comment on this item for the record publicly because I was asked this question about by somebody that you know maybe should know. And so the question was does any of this money get used for the Dolores Werta Foundation work? And uh I was hoping that you could clarify that how the money for the sewer rates are is are used. >> Yeah, I think council member commenor and council as an enterprise fund those funds are tightly managed and restricted to only go to the use of that fund. Um it's uh state law. Uh it's good fiscal practice as an enterprise fund. And so uh sewer rates collected will only go towards you know sewer operations as well as the capital uh listed as described. >> Okay. Thank you. Um and and I I hope that the by the time this plant comes to us that there'll be have been some consideration for any other uh revenue sources. Uh you know we talked about uh you know some some public private partnerships or something of that nature. I don't know what those options are. I hope that that will been have been explored by the time you come back. And then you know I I I don't know that I'm capable of you know deciding amongst six rate structures. So I would like to see some expert recommendation and I know we have an engineering consultant but you know maybe we should have a a financial consultant maybe or or maybe Randy is capable of doing that. I don't know. uh but to really make a good solid recommendation on uh options. So, thank you. I have no further questions. Thank you. >> Thank you, Council Member Coleman. Council member Basher Tash. >> I have 15 questions. That's a joke. Um I promised my constituents at my meeting last night that I would come back to them with options and I would like to if we could set that up again. Um, as well as, uh, maybe, um, uh, if I I'd offer my help for W three, setting one up and making myself available. Uh, I I think that the right thing to do would be to not bond and and put that on us. But, uh, there are many of my constituents that are on a fixed income that are homeowners. Uh, homeowners are going to be paying this increase and, um, business owners. And I committed a commitment to them that I would make a decision that they wanted and felt comfortable with. And uh so I I if we could set that up again and um I'd be uh available to do one and uh help out in another area as well. Um but I that would be very important. So council member, would your preference be to have that be in the next month just before the end of the year? >> Yeah, before before January. Yes. >> Uh and I know December uh gets heavier. So maybe the beginning of uh November. Um, I don't know how feasible that is with the time frame, but I promised them I'd go back. I represent them and we'll do what my constituents uh ask of me and um with within reason. So, >> yeah. Thank you, council member. That's that is uh that is feasible. Uh and uh we have made an assumption that we were going to go and do a follow-up round of that same outreach with now the numbers. And so that fits within our plan. And I actually uh meant to mention earlier that the virtual town hall that we're going to have in a couple of weeks. uh we uh as we looked at potential dates and options decided it made good sense to do it after tonight so that uh you know our hope is that many people will tune in to the virtual but we're also going to record it and put it on YouTube and link it up so that if anybody wants to get the same information wasn't able to come to a town hall they'll get the background but then they'll also get these rate options or the rate scenarios. >> Thank you. A lot of my constituents aren't very tech-savvy and didn't want that option. So, we'll meet them and and we'll talk it out. >> Thank you, Council Member. Council member Smith. >> Thank you, Mayor. Uh Mr. Kle, you made a comment that we would start debt service in 2033. I thought as soon as you borrow the money, you start paying the debt service. So, >> as I as I said, yeah, thank you, Council Member Smith. As I said, two to three years, I realized, you know, that I was probably a little bit off because we're, you know, we're really looking to construct in, you know, maybe 31 or 33 when debt service probably begins in 33. Um, that probably means we don't actually go to bond more closer to, you know, four or five years actually. Yeah, I guess just to repeat again what's what's the real taxpayer cost and and I the term bonding I've spoken with some constituents and they they don't understand I guess that you know the term bonding is different from the term alone and that's I and you borrow money. It's a loan. >> It's a loan. It's a mortgage. >> Yeah. And you know, you're going to pay 5% or what whatever the rate is at the time that you get it. And um so I I think that terminology is somewhat confusing to some people and I'm up for Monday right at >> so we will have the scenarios as part of the presentation. >> Our plan was to include those since it's after this meeting. Yes. Great. Thank you. >> Thank you, Council Member Gonzalez. >> Thank you, Mayor. Uh, thank you for the presentation and appreciate the thoughtfulness and this was much needed uh for all of us in the community and certainly for us um on the dis. Um, you know, I I think as was stated by the vice mayor and some others um I think generally speaking, the community understands that there is a problem with our entire system and that we have to address it long term. The big question is simply how do we how do we pay for that? And as Mr. Kle sort of articulated quite well actually um you know there's three different levers uh and I'm going to paraphrase uh just to check for understanding for myself. The one is um the timeline of construction. So the ability to perhaps delay construction to push that out for uh the purpose of reducing um the rates in the early years. The second is those rate increases. And then the third lever that we have available is the question of a bond. Is that is that fair? There there are other you know ideas out there that people have thrown out in the community. I just want to make sure that we honor those ideas and and and uh address them as well. One question was regarding um perhaps using uh community development block grant funding uh that could go towards our waste water treatment fan plant. Um I'll let staff respond to that idea. Um it's a very creative one. I think initially the CDBG allocation that we receive from the federal government each year does not meet the need. uh it's maybe5 to6 million dollars not hundreds of millions of dollars that would that is required in order for us to actually um address this capital project. Any other comments on the CDBG? Uh I I you're council member Gonzalez, mayor and council, you're correct that I would my response would be that with the the scope of needing 1.3 billion and $165 million every year, while maybe five or six million could offset that annual $165 million cost, it's not enough to to make the difference that is probably worth foregoing all of the other projects that we fund with those funds that have a purpose. And then secondly, the level of complexity that that would um involve becomes very challenging. >> Yeah. And the other question that people ask is what about a grant? Well, can't we just apply for a grant? And uh we know that there are very few uh grants available at the state or federal level uh for this type of capital project. >> That is correct. We have been very active in the grant space in recent years. Uh, one of the reasons there aren't as many grants for this type of function is because it is typically rate based. It's rate funded. People make long-term plans and start building up those, you know, savings to, you know, pay for those. Uh, because it can be rate supported. There are some, um, revolving loan funds for different types of water and wastewater projects and we will absolutely explore those. Then you can you can potentially get a very low interest uh, revolving loan. Um, but typically the the amount on those is not enough for the also this full scope, but it might just help us manage costs, but we'll look at those. >> Got it. Um, for my part, I'm really interested in the seven-year rate models, uh, rate scenario five and rate scenario six. And I just wanted to ask a couple questions if I could. Number one is when we talk about delaying construction, I know plant two is under those scenarios would be delayed it looks like two years and is that the limit and I know there was a version of this question asked just a moment ago but just from my understanding is that the limit at which we can delay it was there a consideration for a third year or fourth year of and and how does that how does that save us in terms in terms of our rates. >> So, we originally scheduled the project to be constructed by 2033. >> So, it was basically uh what around an 8-year time frame. We do know it's going to take us about 3 years to design it. I still believe that we should move forward with the design and make sure everything is shovel ready. >> Sure. >> All of our projects. um that just gets us ready for if there is something that comes up that we're able to uh capitalize on then we can get ready to go. I think the question really is the risk and we currently have um hired AECOM and they're doing a full analysis of plant 2, plant three and also looking at a plant 4. Um I think once we we'll be having meetings the middle of November for them to uh provide us their initial findings. I think that will give us an idea about risk, >> right? And that's really the heart of the question. So, I appreciate that and that will that will actually determine I think a lot for us in January is what is the risk level and how far can we can we push that out. So, really important really important information for us. Um, let me ask you about scenario five versus scenario six. both have a rate of 475 in year one. >> Um, council member Basher Tosh um, eloquently pointed out that there are many of our constituents throughout the city who are on fixed incomes. Um, many of my constituents receive social security income. Uh, they can expect a cola next year in 2026 of around two and a half%. Um, not 92%. uh and and many of our costs throughout just living life have increased uh over the last few years and continue to go up. >> Everything from grocery store to gas to um rent. Um and so I think we have to we have to be very sensitive to that as well. And while you know from a city um fiscal perspective, bonding doesn't feel like the most prudent thing to do. In fact, we've been very good over the years at preventing uh the city from bonding. We we we were looking at bonding several hundred million dollars for trip and we were able to avoid that because of uh smart decisions and shovel ready projects and getting grants at the federal and state level. Uh we saved the taxpayers from financing that type of debt. Other cities are financing many of their roads projects, just their regular improvement projects, hundreds of millions of dollars. This city has not had to do that. >> But in this particular case, I feel like the bonding uh issue, the bonding question should seriously be considered. And we ought to pursue that as a way to uh relieve the rateayers from a growing number of costs that they're experiencing in their lives every day. Because the reality is is that they're going to have to figure out how to how to pay for this and they're going to have to make tough tough tough decisions and tradeoffs. uh at you know at their kitchen counter and um and I think we need to be really cognizant of that reality for them and our families that are that that are experiencing uh tough times. Um and our rates should really reflect uh reflect that uh sensitivity. Uh, so I I do want to ask regarding bonding, is there a scenario where we can perhaps bond beyond the $90 million? Perhaps a rate scenario number seven uh to bond beyond the $90 million. So perhaps reduce uh the rate increase in year one and gradually increase it uh over the seven years. the um recommended 475 that accounts for the majority of that accounts for the cost to operate and maintain the system. The $247 to operate and maintain the system with the increased costs on electrical, chemical, water, everything that uh labor costs, uh equipment, materials, everything has increased. And so the 475 really is operation maintenance and the basic CIPs without considering plant two or plant three. So that is how we can continue to do improvements on the sewer lines and the lift stations that to me they're infrastructure. So they're more than just maintenance and they are a significant cost but they're not the hundreds of millions that a plant takes. They're in the two to$4 million range. So I don't believe that we can bond for operation and maintenance. I believe we can only bond for capital. So we could possibly look at lowering the 475. It would impact our fund balance and um that would have to be a decision of our finance team and then also we would then potentially have to move capital projects which we have been doing significantly for years. And so, um, we can definitely try and dig a little deeper. Um, but 475 is is a place that would be able to provide us reserves, cover our on&m costs, and be able to do the capital improvements that are needed to ensure that the system remains operational. >> Yeah, thank you. I agree with everything that Miss Bud has shared. I would just kind of summarize it by saying it would mean that we would uh we would deficit spend because right now even this current fiscal we're not actually collecting enough to pay off for all of our on and we've slowly been spending down our reserve balance but but as of next year we would start to go below our recommended reserve balance if we did not collect the 475 and probably would affect ultimately how high the rates would need to go at the end and how much we would need to bond. But that is the that is the policy decision is do we go below our reserve recommendated recommended amount. >> Got it. Okay. Thank you so much. >> Thank you. >> Thank you, Council Member Arius. >> Thank you, Mayor. Um I will also do my best to be quick. Um but I've got a couple of questions. First, want to just thank staff. Uh we had a uh small group that joined us at South High, but they had some very good questions. Um and uh several questions that I could not answer. So I just want to say thank you uh to you and I bet for fielding those. Um I thought they made some really great points and I just wanted to lift up one of the points that u you know really resonated with me which is that um you know I increases are not necessarily the problem. It's the size of the increase that really u makes it challenging for folks. And so I think um you know we heard that loud and clear and I appreciate u the fact that you know we now have six potentially seven scenarios uh for us to be able to uh make it less impactful uh to folks's bottom line um particularly in year one. Um the other point that I wanted to make uh well actually ask about was uh what what is the city's bonding capacity? Our bonding capacity is actually determined typically by our revenue generation. And so there's a term of our called our our debt service ratio. And so you don't want to have you know more debt than you're having revenue coming in that you can pay off. I can't tell you what that number should be. Perhaps Randy can. But um the good news is we have not um taken out too many bonds historically and so there there you know is sort of general capacity but again it's based on how much revenue we're collecting to be able to pay it off. Also, one of the things that I've liked about our approach to the schedule, even in scenarios one through four, um that uh and and if we delayed plant two um uh a couple of years, it's still true, is that we currently do have a bond that we're still paying off for the the build of plant 3. And that bond will be um fully paid off in 2032. That was 2032. >> It's 32. >> Yeah. 20. It'll be fully paid off in 2032. And so if we didn't have our first debt service payment until 2033, that would probably be a good thing. >> That's right. >> Uh just to kind of reiterate what city manager Klay is talking about, the bonding capacity is really going to be based on how much revenue we're bringing in. So as rates go up, obviously our bonding capacity will increase. It obviously it's also based on need. I mean, they're not going to issue a bond for any amount. It has to be based on actual CIP needs. And so there there isn't really a a scenario where we would in my mind exceed our bonding capacity based on what we're seeing with current revenues and current needs in the CIP. >> Got it. >> Yeah. >> Yeah. Yeah. That was the reason for my question because I was looking at rate scenario four and I was a bit shocked that we had the even the ability to put together scenario four where we would be able to bond $410 million. >> Well, it the questions were we could do that. I mean there's a there's a lot of challenges of a bonding of that. I mean obviously finding underwriters to cover that. Um, but we actually have an RFP for that of individuals who are looking at lining up for this particular but if it's four or five years out, we probably would have to do another RFP. Um, but yeah, we have the capacity to do something like that. It would it would take probably a couple under underwriters coming together to really cover it. Uh, and it is a process that takes six to 12 months depending on the size. >> Yeah. No, and I certainly don't want to subject uh you know uh you know city residents to 23.7 million uh per year to pay back that debt service. But I was just interested in that really large number. Um my my my other question related to bonding is are are there any other large CIP projects that we can foresee or forecast that we would need to reserve our bonding capacity for into the future? That's a good question, council member, but um our bonding capacity is typically specific to each enterprise. So water department has its own bonding capacity and the sewer wastewater has its own bonding capacity and the general obligation bond is usually against the general fund and so this wouldn't affect even our general fund bonding capacity. >> Yeah, exactly. It's siloed. So, we wouldn't have to we wouldn't be hurting any other operation or even the general obligation uh if we were move move forward with a significant bond for wastewater. >> Got it. Okay, great. Um my next question is related well we already kind of touched on it uh related to the timeline. So, we'd pay off um the existing bond uh around 32, excuse me. Uh and then potentially if we chose to bond uh for some of the CIP work uh in this in one of these plans that would begin in 20 or 2033. Um all scenarios are assuming that it's over a 30-year timeline. Is that correct? >> Yes. All scenarios show a 30-year timeline. Correct. >> And then um one of the things that I heard is that after these rate uh increases happen, whether that's over the five years or the seven years, that there would not be additional increases beyond those initial years. Is that correct? >> That is correct how we've assumed it and built it. The one caveat you have to give is you know what happens in the next five or seven years. We don't know that some other factor could, you know, raise its head or or the economy could continue to change. But but our assumptions about what it will take to operate and what it will take to build these upgrades is that we will not need increases past that. Correct. >> So then my next question is plan four. Um I would imagine that site acquisition design and permits at 190 million is a small percentage of what the total cost is going to be to build that out. So then what what is the plan to build future plan 4? Um the plant for estimate um So, what I have in front of me is the 10-year plan and the construction for plant 4 would be in the 11 to 15 year plan. So, I can definitely get that information for you. I apologize because the plan for this analysis was to do the five-year rates to cover the cost of a 10-year plan. The 15-year plan is prepared, but it's the construction would be in year 11 through 15. So, it's not part of our report. >> If I'm if I may, council member, um you know, I'm usually willing to give at least a a swag whereas you don't want, you know, team members to give information that's not accurate. So think about uh the capacity for a plant 4 would be very similar to the capacity that we've had at plant 3 or the capacity we're looking to have at plant two. And we know plant two is you know $500 million and so it's at least in that scale and scope. >> Got it. and and fully supported by rate increases or I the the point that I'm trying to get at is are we going to if we choose a path here in the next couple of months to bond for some of um this initial work are we going to see a day where we potentially have to bond and carry two um bonds at the same time if we also have to build out plan four >> that could be a potential. We also utilize connection fee revenues and so as the city continues to grow, we will be bringing in that revenue. Um we have recently increased the sewer connection fee for the developer. Uh so it's now about $7,200 a connection. So that will really help our revenue and so that should supplement the future growth of um the needs of a plant 4. But they're depending on our rates and um it is a little complicated because it would be great if we could if we could put together a 20-year plan and have all the answers. Um I think we've identified our need. It's now trying to as uh Councilman Gonzalez was saying move the levers to be able to really figure to answer that question. But it would be an evaluation in year 10 through 11. >> Yeah. Let me actually answer your question by answering two other questions that have have not been asked. Uh one is I think there's been some conversation around it is you know is there any way to kind of make the rates lower? And the second question um is uh I forgot the second question but I'll remember it as I answer the first one. Is there any way to get the rates lower? Oh the second question is you know after we see this ramp up in rates could those rates go back down? because that's a question we've heard at some of our town halls is, you know, we we we we collect up the funding for the CIPs, then can the rates go back down? I think the answer is um potentially you could consider a way to lower rates potentially. Could we even like stretch ourselves out further to get those rates, you know, just a little bit lower and stretch it out further over time? But we didn't recommend those scenarios because we feel like it It creates too much risk to have enough funds to make sure we do the projects, we do them right, and that we don't find ourselves right back in the spot in five years or in seven years. And so I think if you if you reflect on the the charts, the the little green and red lined charts in each of the scenarios, it shows our fund balance growing in the out years, those ultimate years. And the intent behind that is we want to keep our rates at a reasonable level so that we start saving for four and start saving for five and that we don't get behind again like this. So I think I think it is possible but we've actually create a created a rate model that's going to actually grow our fund balance in those out years to make sure we don't >> got it. um then I'll jo I'll join several of my colleagues and um say that I think rate scenario five makes the most sense particularly if there is a possibility in the future to build plant 4 that we may need to bond um for that construction project. Um, and I did not come into this meeting tonight thinking that I would advocate for an, you know, more rate increases, but I think I'm worried about what got us to this point, which is the fact that we did not raise rates on a regular basis at a reasonable um, structure. And so I would just caution that as we if we are interested in doing a seven-year plan that eight years eight, nine, and 10 um should see some additional increases just to keep up with the increase in cost of doing business. Thank you. >> Thank you, Council Member Arus. Council member Basher. >> Yes. Uh I will be very quick. Um the I forgot to ask this. Some of my constitu constituents were asking for a breakdown of what the plan would look like in the construction. I remember someone said they remember seeing an admin building being created and they were wondering, hey, are we building plants that are Fiji when we could just do with Aquafina? And so that's a fair question. I'm not looking for an answer now, but I need that for the next meetings. And second, uh, because this was deferred and kicked down the road for so long, why is a city not cancelling or cutting areas of the budget to kick money over to this as a capital improvement project instead of capital improvement projects that affect maybe one or two% of our population? This is something that affects everyone. Why is the city not doing more and they're just passing the buck to us? That I would like an answer. First one, I'll hold off on that one and that's it. >> Yeah, thank you, council member. Uh, a couple of different ways I would answer the second question. one is that again the sort of scale and scope uh of this need um every year we put around $10 million well I shouldn't say every year in the last four to five years we've been able to put um around $10 million into the CIP sometimes 15 if we've got you know one-time monies um and that that the majority of that actually goes to roads and we've actually been catching up on a lot of deferred maintenance in our city facilities, police stations, fire stations, parks, etc. And so, uh, I think again, if we if we basically emptied out our CIP to try and take care of this issue, it still would be, um, insufficient, you know, severely insufficient, and yet we would forego many other CIPs that I I I think a lot of community members do think are important, again, like streets and parks. There may be smaller one-off projects that one, you know, could argue from a policy standpoint, is that worth that investment versus other investments, but it's not really going to make a big impact on this project. This but and that same point, I would just argue again that's that is the um opportunity of the council to determine what are the CIPs that are worthy of that investment. And uh if the council did you know want to u you know divert general fund dollars into an enterprise that's your purview. Although even as you know city manager I wouldn't recommend it again because you know rates uh should support the service in an enterprise. Uh but that's just about priority setting amongst the council. Uh but again ultimately uh I wouldn't recommend you know foregoing all other CIPs or even you know particularly other large CIPs because they do have their own impact and it it wouldn't necessarily solve the problem. >> Thank you. Council member Smith. >> Thank you, Mayor. Um no good options. I just it all cost way too much, you know, but that's where we're at. Um, the risk estimates. I guess I just wanted to reinforce that those are estimates. It's like, is this car going to really run 200,000 miles or is it going to run 250,000 miles? And if I can keep it going another 50,000, then, you know, I get to stretch it out. So, was I thought maybe Councilman Gonzalez made a a request for another scenario. 8 n was that something that Yes. No. I guess I I I would like to look at that maybe, you know, nine years and I know the risk goes up. I get it. But also, you know, if we can do a four five million dollar job that buys us two or three years, that's probably worth it. U at plant two. Uh, so thought maybe he already said that, but I I would request that we do something along that line. Maybe nine years. >> Nine years total. Stretch it out or wait for construction. >> Well, it may it may push construction out. I mean, just like the seven-year did. >> Okay. I'm just saying the the rate increase program goes nine years and then however that works into the construction is how it works into it. >> We'll look at that. >> Thank you, >> Council Member Gonzalez. >> I am so sorry, but I have a new question that was um provoked by one of the comments that Mr. Kle just made regarding sewer treatment plant number four and how we generate revenue from users. It's really a nexus question and I I don't want to ask this question for response tonight but I do think we need to address this issue is as we look at rates for people who are being served by sewer treatment plant number two why would they not see a reduction in their rate in the future uh if they are not utilizing sewer treatment plant number four or number five. >> Yeah. So our sewer system is an entire system be you know today uh their sewage may flow to two but it doesn't mean it always will. It may flow to someplace else and we really look at it as an entire system. And so regardless of where you live everyone's paying into the full costs for the full system and we don't we don't have independent sewer districts. And one of the reasons is because it creates that economies of scale that we can have savings and that we can administer it holistically. Um and actually there's opportunities sometimes to have inter ties that allow us to you know have you know things you know you know flow um depending on you know needs and volumes. Um, and so yeah, it it's an entire system. Everyone pays in for the benefit of the whole system, >> right? And I I appreciate that response and I understand it and I understood the answer before I asked the question and and but but the real point, my real point tonight is I think that we as a city need to be able to articulate that somewhere as we move forward with our rate plan. Um because, you know, there's a lot of different examples, right? in the Northwest, you know, it may take four lift stations to get to the sewer treatment plant versus if you're living in South Bakersfield. And so, we have to really make a clearer case because I think this question will come up more and more in the future. Thank you. >> Thank you. Um, Vice Mayor, closing comments and then the action is to receive and file. >> Um, two comments. One, there was a question about bonding and I know there's other infrastructure especially I think first about parks and if we bond against general funds and I know the they're in silos but I would love followup information as to uh in which world is that possible where you bond for a sewer what are sewer rates as well as parks. I'm curious about that. Um, and second is I feel there's like research done on um, and maybe it's not allowed within our city of Bakersfield, but other cities up north do it by use. Kind of following up to council member Gonzalez's question. Um, I am curious if there's other ways in which cities navigate that of like household use. Is that something that exists somewhere? This can come back later. Uh and just presentationwise at the community meetings I think the slides were moving quite quickly and um maybe there's opportunity to print the material and have boards where folks walk around and look at the different rate models and um and where we've seen now like five six different options maybe the there's just columns that show you know the dollar amounts next to one another. Um but giving people the opportunity to walk around and look at them instead of us just presenting. And um motion to receive and vile. You have a motion. Please cast your votes. >> Motion is approved with council member Weir absent. >> Thank you Miss Budak and team. And now madame city clerk. Next item, please. >> Council and mayor statements. >> You've already used your quota up. All right. I do not see any requests and so we stand adjourned at 8:20. [Music] [Music] [Music] [Music] [Music] [Music]