Chair Hamilton, Chair Cates, Commissioner Sussarone, Commissioner Llorosso, Commissioner Dowd, Commissioner Geary. Chair, we have a forum. I'm going to ask you to take the item. The item is a item. The speaker may have three minutes unless the volume of speakers more is reducing the time allowance and can not donate time to others. Do we have any speakers to eat? Chair, we have one speaker, Pat Gooden. Hi Pat. Good evening commission and welcome to the new folks and happy new year to everyone. Pat Gooden, I live in Huntington Beach and just a clarification on the liaison list, the Finance Commission meeting is listed as the fourth Wednesday. And I did notice that last, or the November minutes, had a rescheduling in order to get some items possibly on the City Council agenda. So I'm not sure when you're gonna be scheduled to meet, but I did sign up to receive notice about your meetings and the agenda. So if there's any way to clarify that, it would be greatly appreciated. Thank you. Thank you. Anyone else? No chair. Okay. I see the calendar is coming up. It's attached here so we can talk about that towards the end of our future meetings. Yeah. Okay. Perfect. Okay. The first action item C is to elect a new chair. I've run my course. So I would like to nominate Kelly Gates as our new chair and Frank as a vice chair. I'll second Kelly. Any other recommendations or nominations? So let's take a vote on the year nomination chair of Kelly Gates as our new chair. Chair Hamilton. Yes. Vice Chair Kelly Gates. Yes. Commissioner Sithram. Yes. Commissioner Dowd. Yes. Commissioner Geary. Yes. Commissioner Legato. Yes. The motion passes 6-0. And now we'll take a vote on Chair Hamilton. I mean Billy Hamilton's nomination of was it Frank Legraso as our vice chair. Chair Gates. Yes Commissioner Hamilton. Yes Commissioner Sathrone. Yes Commissioner Dowd. Yes Commissioner Geary. Yes and Commissioner Legassos. Yes, the motion carries as Frank's a grotto as our vice chair six zero Hello, would you like to see to you find? Okay Our next order of business is to prove the minutes from our November 20th meeting. So. Okay. I second that. Now what are you all in favor? Hi. I'm going to introduce these new guys over here. That would be great. Is that okay that we do that? Okay. Let's introduce our two new commissioners. Right ahead. My name is Paul Geary. I was pointed by a. I'm going to introduce these new guys over here. That would be great. Is that okay that we do that? Okay. Let's introduce our two new commissioners. My name is Paul Gary. I was pointed by a council member, which is Climby. I don't know if you want anything else from me. I'm glad to be here. Well, let's see. I heard folks talking. I lived in in Huntington Beach for 40 years. I worked at the Boeing company here for 35 of those 40 years, retired about five years ago and enjoying the good life now. And happy to be here, helping the citizens of Huntington Beach out. I understand there's some fiscal challenges, so hopefully we can help with that. Thank you. Scott Downs. I've lived in Huntington Beach for 47 years. Glad to be here looking forward to working with this committee and this group. And also very interested in some of the things that are going on in the city and my background is in banking and 45 year banker and looking forward to serving. Okay. Our next order of business is to discuss these items of the audit results and then friends of the library lease. So let's start with the audit results. All right. Good evening commissioners. We have a report here for you. I will kick off with some initial information. We then have our auditor here this evening who will present some of the financial information and then we also have some year end results and our assistance CFO will provide that information. So as I annotated, Jonathan Foster will be here and we'll cover a section of that and then after we have that section on the audit, I have a little bit of information as it relates to the commission overview and a proposed calendar for 2025 for the commission to look at and evaluate and make some final decisions on those and our regular meeting on January 22nd. But I wanted, in a knowing that we've got a couple of new individuals in the room is to also talk about some of the key documents that we utilize in city government. This evening you're gonna be looking at the past. And in a few meetings, you're gonna have the opportunity to move into the present where you'll be looking at the current budget as well as the proposed budget as we move forward with the 25, 26 year budget and putting that together that typically comes before this body as well as City Council in May and June. We're an adoption for our fiscal year that begins in July. And then in the future what we're looking at is long-range financial plan. And so we have been actively working on putting that document together. We're using a new tool as of this year. We have a draft version of it in front of us now. And our hope is to be able to have the information finalized. Bring it for introduction to a workshop with City Council. The first meeting in February. for introduction to a workshop with City Council the first meeting in February. So the documents that we're looking at is the annual financial report, known as the ACFER. And then there's also what we call the PARFER, which is a condensed version of those 200 pages that is in the audited financial statement. So it kind of boils it down to a high level. It's about 20 pages long. It really tells the story behind all of the numbers that are sitting in the financial statement. So annually, we close out our year and then put the Act for Together. It is fully audited by an outside auditing firm. They make an opinion on it and that's what you will be looking at this evening specifically. So at this point, I want to turn it over to Jonathan Foster and have him give us an overview of the audited financial statement and some of his information. Thank you, David. As mentioned, my name is Jonathan Foster. I was the audit partner overseeing the audit for this fiscal year. I just want to welcome Chair Gates. And thank the commissioners for giving the opportunity to share a little bit about the letters and reports we issued some of the audit procedures we perform as part of the audit and some of the financial results as part of the year. I also want to thank David and his accounting team. There's a bit of a transition this year with the change in his position and his accounting staff did a very good job of moving the audit along and making sure the audit was completed in an efficient manner. So thank you for that. The first report I'll speak about is the audited opinion was actually included within the annual comprehensive financial report referred to as the ACPRM. For the fiscal year we issued an unmodified audit opinion. Meaning as auditors, we did not have to make any modifications to the report. This is the highest level of opinion you can achieve, otherwise referred to as a clean audit opinion. The second letter is titled communication to those in governance. This letter communicates items such as our responsibilities in relation to the audit. Significant risk identified, significant accounting estimates, sensitive financial statement disclosures and uncorrected and corrected misstatements. Management has corrected all misstatements as part of the audit. And within the audit letter, there will be, there is one material adjustment noted to adjust accounts receivable in the grant special revenue fund. Now, due to the level of materiality, this adjustment will also be reported within the internal control letter, which will be issued in conjunction with the single audit as this, as this letter is included. The single audit is in progress and is expected to be completed prior to March financial statements, we consider the city's internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion and the financial statements. Prior to the final examination, our staff was on-site performing walkthroughs and testing with staff over various trans-transaction cycles, such as cash receipts, cash experiments, payroll, and investments. Indicated on the slide are some additional areas of autofocus as part of our audit procedures. For pensions, we review the results of third-party actuarial valuations performed by CalPERS actuaries. Further disclosures are included in Note 7 to your financial statements. We ensure the amounts reflected in the financial statements match the reports provided by the actuaries. Furthermore, we perform census data testing using reports provided directly from CalPERS to ensure the accuracy of employee data reported. Similar to pensions, we perform procedures over the city's OPEB of all locations, directly from CalPERS to ensure the accuracy of employee data reported. Similar to pensions, we perform procedures over the city's OPEB of all locations, otherwise known as other post employment benefits. We compared the information reporting the financial statements to information reported by a third party actuary. And additional information is included in note eight in the financial statements. We performed revenue revenue expenditure testing as part of the audit, which included various procedures over revenue expenditure accounts, including analytical procedures, sampling and vouching of transactions to additional support. For capital assets, we insured amounts reported, agreed to detailed reports of assets owned by the city. In addition to these procedures, we performed tests over depreciation expense and capital activities of the city. For projects considered in progress, we obtained information from individuals outside of finance with direct involvement in these projects to ensure they were properly classified as construction and progress in the accounting records. Lastly, the city spends a significant amount of federal funds. The city is required to undergo a single audit in any given year it spends more than $750,000 of federal grants. We will be selecting major programs, which are specific grants for individual testing and expect to complete the testing in the coming months. I did want to bring up that this threshold of $750,000 that has been a threshold for the last couple of years for single-lotted testing will actually be increasing in the coming years to $1 million. This slide represents the government-wide statement of net position, otherwise known as your balance sheet at June 30, 2024. I'd like to point out to the commission that this is a snapshot in time and is reflective of the balances recorded at this date. For the fiscal year ended June 30, 2024, the city's assets and deferred outflows exceeded liabilities and deferred outflows in the amount of $897 million. As you can see within your long-term obligations is the net pension liability of approximately $193 million. One of the indicators we use as auditors to measure short-term health is your current ratio, meaning do you have sufficient current assets to meet current obligations? So this current ratio at the government-wide levels currently at June 30, 2024 is 6.89, of which government activities represent 6.94 and business type activities reflect 6.70. A positive ratio reflects an ability to meet current obligations. However, some of these assets may be earmarked for capital projects and other items noted within the city's budget. This time I'd like to hand it off to city staff for some of the operating results for the fiscal year. Excuse me, this information is for year ending June of 24. That's correct. Good evening commission. So I just want to walk us through the year end results for the general fund. And then I just want to note that in the act for you'll see information for the general fund, but please know that that's not just our fund 100 operating fund. That also includes a couple of other funds such as our donations fund and our section 115 trust that aren't necessarily classified as a special revenue fund. But this we've broken out just the general fund, which is our fund 100 for the city. So we ended the year with recurring revenues of $290 million and one time revenues of $2.3 million, which was the Emerald Cove settlement. And then we had a planned use of reserve of $4.9 million, which was AES money that we had received in a prior fiscal year and we're basically had been holding it in a reserve account in the general fund until projects were identified. And so as part of the 2324 budget public works identified 4.9 million dollars worth of projects, so we transferred that money out to a separate fund so that those projects could be tracked separately. So our total source of the funds for the year was 297.5 million. And then our expenditures totaled 291 million, and that consisted of about 5 million for UAL and about 13.3 million for our pension obligation bond payment. And then the rest of the expenditures roll up into the expenditures less UAL line, which is about 267 million. So that includes personnel operating and some of our regular transfers for things like workers' compensation claims and things like that. And then our one-time expenditures consist of the 4.9 transfer to the AES fund. And then we also counsel approved to transfer half of the $2.3 million and rolled cove settlement money to the General Liability Fund. And initially as part of the budget, we recommended that the other half of that money would go to the Section 115 Trust, but as part of the budget balancing plan that we adopted to balance the budget for $23.24, that piece was pulled back and used to balance the budget for $23.24, that piece was pulled back and used to balance the general fund budget. And then we ended, we had some other audit adjustments to fund balance during the course of the audit and so that was $4.1 million. So our general fund, your answer plus was 2.7 million. And then just to walk you through our fund balance policy include information about how your answer pluses will be handled. And so when the pension obligation bonds were adopted, council also approved and unfunded accrued liability pension funding policy. And so that policy takes precedence over everything else and it requires that 50% of the year-end general fund surplus be put into the pension rate stabilization reserve. So of the 2.7 million half of that went to the pension rate stabilization fund, which was totaled $1,358,000. And then the other half of the surplus gets allocated as follows until the economic uncertainties, reserve is fully funded. So our policy requires that we have a two-month operating reserve in the economic uncertainties reserve account. And so that has not yet been fully funded. And so we followed that part of the reserve policy. So 50% of the 50%, which is about 680,000, went to the Economic Uncertainties Fund, and then a reserve, and then 25% of the 50%, or 340,000, goes to the Capital Improvement Reserve, and then the last piece goes into the other capital projects, which is for infrastructure. And then we are available to take any questions. The budget report indicates you've got the one snapshot in the budget that indicates we have total reserves in the city of 120. And the reason I'm asking is I want to make sure relative to the balance sheet that the Davis Fargart, Jonathan, I think it was, right? I assume that's listed under current and other assets. Those reserve funds of $120 million. All the reserves that we have, whether they're restricted or locked up for whatever, they're all carrying them in that part of current assets. Is that correct? I'm not sure which page you're referring to. Generally reserves are a portion of your equity. And depending on the fund, it's either referred to as fund balance or net position. So that available equity. Represents. Various levels of assignment. And depending on which fund or page you're referring to, if you have a page I can turn to you at the moment. On the budget report, the actual budgets page eight, and then it's the one page that I've asked for a number of times, it's a chart, indicating general fund reserves by type. And it lists them all and it totals over $120 million for projected 23 24. So based on what you just said, if it's considered part of the equity, you're telling me that it's in this total net position at the bottom line of this What you're referring to as a balance sheet It it Maybe I just I can't find page 8 that you're referring to right now Okay, it's a different document, PJ. Okay. I think that's the confusion. 200 pages. So I guess to answer your question, if you look at the Act for itself on page 27, yet is the balance sheet for the general fund specifically. And so currently it shows a total fund balance of $132 million. And so similar to what you will see next week, we take this schedule and break it down and show where each of those non-spendable fund balance amounts are, the restricted amounts, the committed amounts, which include what Serena talked about the 49 million and then the assigned that includes litigation reserves, capital improvement reserves, equipment reserves, so on and so forth. So on page 27 is that detail of the general fund component of those reserves that have been set aside. Those then all roll up to the government wide activities that Jonathan talked about at a very, very high level. So all of these individual funds roll up to, if they're not an enterprise fund, roll up to general governmental activities, the enterprise fund roll up to general governmental activities the enterprise funds roll that to business type activities. So yes on page one on page 27 of the act for is that less than those numbers. Okay thank you. I have a few questions I don't know. Go ahead. Okay. I have a couple more but go ahead. Okay. I didn't mean to cut you off. So you're not cut me out. Just a couple clarifying questions. I don't know, it's like $415 million. Correct. And again, next meeting, you will see a breakdown of how that number breaks down between the general fund and all other funds. So the general fund component of it is that 132 million that we talked about because for the most part, your reserves are cash. Right. So go yeah. So, and then the remaining 300 million as other funds, the enterprise funds, the internal service funds, those types of things. We don't have separate bank accounts for all these funds, right? No, they're sitting in a single account. I mean, we have it invested in different places. The treasure does, but it's a pooled cash account and then we allocate by fund. Right. So I'm just going to talk about overall because if there's different there's no different bank accounts. Right. On page 58 of the audit financial statements, it also adds fiduciary fund, which gets to about half a billion dollars in cash. What are those fiduciary funds? I will refer you to page of the Act for page 34. 34 displays, various funds. The redevelopment, former redevelopment agency, the access agency holds the bulk of the cash investments. Sorry, I shouldn't say that. Your pension section 115 trusts holds the majority of your cash investments. So fiduciary funds are various other funds that don't fall in the preview of your general fund, your governmental funds. These are other funds that essentially the city is holding for another purpose. But they're still owned by the city, right? I wouldn't call it owned by the city. I'd call it managed by the city. So the accessory agency cash, for example, it's not owned by the city, it's for purposes of using for the accessory agency. The section 115 trust, the $65 million there, that's 100% restricted cash. It can't be used as the city wishes. It can only use strictly for pension obligations. Right. Okay. So the city could use that for pension obligations. Section 115, trust, yes, could be used for pension obligations. So we have $498 million in investment. Okay. Second question. The structure of the, I'll call it the income statement. It's a statement of activities. The structure of it on page 26 shows by department expenses and then revenues by department as well. Is that to indicate that the department make money that that their expenses? I'm trying to understand the presentation. This is a requirement of governmental accounting standards. Your fund financials display revenues by essentially source, and that is subsequently adjusted to display revenues title program revenues which is further classified by department. It is just meant to show a further level of transparency on how these revenues apply to different departments or programs of the city. And that's the requirement from governmental accounting standards to show both those displays when moving from the governmental funds to the statement of activities. Okay, so just a required change in presentation. Gotcha. So last year we talked to the fire department. So for example, the wildfires, when we loan firemen to other counties, we are able to charge those other counties for our fire labor. And so the city makes money off doing that. Would those try to be classified under fire department? So they offset is that what we're saying the same thing? Most likely, or David, to look at the books and see how those revenues are recorded, but most likely, they do get classified within that department. Okay, thank you. Right, then I saw this, that's why I wanted to clarify. We gotta get clarification on that because we were, we asked this question before and that's not what we were told. This is this is revenue that just gets dumped into the pot. So these guys are complaining about incurring the expense and then probably using it to plea for a bigger budget because it was expense and yet they had revenue that came into compensate for that but it just got dumped into the general fund cash receipts. Okay that would probably be something that is generally discussed either at this level with the finance director or city manager direction of council. What may have happened and I'm just speculating here is sometimes you receive revenues that don't have any restrictions and they can be used for the general use of the city. So they may not be considered for that specific department. Again, we'd have to look back with David to look back at the coding of those revenues and reimbursements. We don't have that in front of us. But if it was past practice that that revenue could be used for the general activities for the city, it was most likely classified as a different program revenue. Okay, and I might make a further clarification there is typically yes, there are individual departments because of their activities that do generate revenue. It does go into the general fund. It goes into the big bucket. But 99.9% of the time that money doesn't begin to cover the cost of that individual department. It is being supplemented with when you look lower down in property tax sales tax utility user tax franchise fees, so on and so forth. So if I'm looking at, let's say the police department had, let's just pick a number. I'm not going to use honey to beach without say it's 50 million and they generate through inspections and fees and those kinds of things. 5 million of that. Well, that yes is in the pot, but the reality is the other 45 million to operate that that department is coming out of general taxes. They're very rarely seen a department that is 100% self-funded, which just doesn't happen in government. Absolutely. And so one more question about this. I'm looking at the community services with our metal-lark revenue, like the money from our metal-lark lease be classified in that line or is that? I'm just trying to make sure I understand the structure of this statement. So to the extent that it can be identified for the department, generally speaking the way that we break it down is what I call functional revenue versus overall revenue. And so again, if it's an individual department through user fees or those types of things, that is what generally shows up in there. If we've got unique agreements, those types of things, those generally will end up in the general pot. Okay. Thank you. Overall general fun revenue. Yeah. Okay. And then when I get to the bottom, our net income, roughly for the year, once again, I know we don't call it net income, our change in net position was $61 million. So our net income for the year was $61 million. When you're looking at the statement of activities, yes. Okay. Yeah, I can you explain to me the the fine that we got the 30 million dollars and then 21 million did we collect that cash from the state yet you're talking about the waterfront money. Yeah. the city. We will talk about it at the city council meeting. We have a breakdown of what that is. Of that 31 million, I am going out the top of my head. I don't have it with me. The 24.9 of that is general fund. The rest of it is required to be 20% set aside. In last year's ROPS, we pulled down $8.6 million and we distributed that into with City Council approval. We distributed that into individual funds similar to the waterfall. We are requesting again in 2526, another 8.4 million of that. And again, keep in mind that 80% of that is general fund, 20% is well, my housing set aside. We do not have the ability to ask the State of California to give us at lump sum payment because it's restricted by the amount of the tax increment in each year. And so there's a formula that we have to go through. And so that formula that we asked for last year was actually reduced because we actually asked for slightly more and it was reduced to the 8.5 million dollars that we actually received and then we were requesting for 2526 another 8.4 and then there's a plan to kind of draw those down and smaller increments over about a 5 to 6 year period of time. Okay so every year we request eight or whatever the formula. Right. Until we recover because we recorded the entire 31 million on the 31 million is on on the books as of this financial statement that is correct. Okay. That makes sense. I saw it with uncertainty revenues and the footnote and then I was trying to figure out what was happening. Yeah. No, so we would expect a million every year. Those are recorded in and would be a part of the, as you were looking at that other statement earlier at the fiduciary, that sitting in that, in that, uh, sucessary agency fund. Okay. Until it gets transferred elsewhere. Sorry, next question. Do you have a list? Sorry, everyone. We have, and receivables, we have developer loans receivables that are then fully reserved for $41 million. And then we say we're not going to collect $41 million from the developers. What are those? I do not know up the top of my head. I would be more unhappy to get that answer for you though. Okay. It's just a big number that we say we're not going to select. Sure. I was part of the audit. These are these vending 50 loans that have been on the books for a number of years. And there's certain loans that the city made to developers. Yes, developers, third parties. Developer loans is kind of a broad statement because there's also affordable housing programs in there that include some individuals. But some of the terms of the loan don't require payback unless an event happens. So due to the uncertainty of actually getting receipts, it's been a practice to set that within allowance. Okay. We know how long exactly this exists. We have to look back to the records for the individual loans, but 41 million. Can I ask what would be the events that would cause that to be paid back, sale of the property? That's the most don't have that in front of me. Could we get a detailed recap of all of those loans and what the terms and conditions are relative to the payback and the time period? Because I'm sitting here wondering what we're doing in the banking business as a municipal entity. We're now lending money to or making some kind of financial arrangements to somebody that's in the building and developing. You lost me here. If somebody's got to help me on that one. to somebody that's in the building and development, you lost me here, if somebody's got to help me on that one. You'd have to look back at the past history that most likely council approved these loans in the past, but it's common for municipalities to encourage growth in their development in their area to issue these loans. But are they truly alone? Pardon? Is that redevelopment? It would. There may be some in the redevelopment, but there's a listing of specific, in note three, there's a listing of the classifications. But finance would have further records of when loans were made and approved by council. Page 61 list out what various loans are. A combination of first time home buyers, developer loans, housing rehab loans. Emerald Cove is on there. And then typically you will also find in the notes of the aquifer, which is the largest section of this particular document, more detail. So a lot of times we have the opportunity to be able to go in and look at that section of it and it will break down outstanding bonds that we have for example in some of those loans that are listed out there sales tax sharing agreements are all listed in the notes that support the numbers that are above. So that that section is is the notes to the financial section and covers from about page 30 to about page 119. So there's a lot of detailed information that's behind all of that. Madam Chair, can I make a statement just to help with some of the understandings of some of the loans? Yeah. So I don't know about all the loans and I haven't seen the document that the gentleman at the end of the table is referring to. But when it comes to redevelopment specifically, the state had a program to redevelopment specifically, the state had a program for redevelopment, and I'm not sure if everybody understands what that was, but back in the 80s, 90s and early 2000s, the state basically, and this is what many of us who are resisting the now the high density housing mandates that the state is putting on us, we're pointing to that program as a successful incentive program. And that is to say that the state, through a bunch of state laws that they pass, set up a structure to redevelop areas of the state. And they were specifically targeting brown fields and contaminated areas of the state to rehab them to make them safe for future development, but also to remove blight and other just, you know, ugly parts of the state for lack of better way to put it. And that was actually an incredibly successful program because cities and developers stepped up and worked with the state, cities offered loans to help finance. And there was dollar matching and there's a lot of different things that were done to work with developers to get properties turned over. And we had a few of those in Huntington Beach, including the Emerald Cove property, which is involved the old mobile home park down by the PCH, which is now has the hotels, but also the such emerald cove waterfront, same concept. So the city was involved in making loans for redevelopment. And so that has been phased out because the state started losing a ton of money. There were way upside down on that program because they were having to reimburse cities. According to our early calculations back in approximately 2016, Huntington Beach had made a number of loans and the total outstanding that the state was supposed to reimburse the city for was approximately $85 million. That was all of the loans that included Emeral Code of Waterfront and a few others. And the state basically was refusing to pay back those loans. So that's why we embarked on a lawsuit in 2018 to recover those loans, recover on those loans, recover those reimbursements. We prevailed on two of the larger of the loans. So that's the emald Cove that you see and also the waterfront. And we actually got a court judgment in our favor. So Commissioner Hamilton, you mentioned a fee or a fine, it was actually a judgment against the state of California where they're reimbursing us. The Emerald Cove was $5.2 million. After interest, it came to $6.8 million. And I think we're made good on that. I think we're all paid back on that one. Waterfront were still collecting on. It was $22.5 million was the reimbursement loan amount. And then with the additional interest, it took us up a little over $30 million. So between Emerald Cove and Waterfront, where the earlier calculations, 31 millions knew to me, the earlier calculations from last year, were 38 million after all the interest was calculated and compiled. We're able to submit on the ropes twice a year and get recovery on that, and we can keep doing that until we hit that 38 million. I mean, it may be more after more interest to crews, we don't really know. But there may be more after more interest to crews. We don't really know. But there may be loans reflected on the books that are just simply a vestige of the past, just, you know, relics from, you know, deals done in the 80s and 90s. I don't know per se, but that's what the redevelopment was all about. And it happened in almost every city, at least coastal city up in down the city of California. Yeah, I can see the ones that you referred to, Emerald Co. and Waterfront. They're listed on these, but we expect to collect those. This 41 is something different that I didn't. And then footnote is just vague on what it is. Anyway, so we'll ask for more detail of that in a second. And then just as a clarification, the 38 includes the Emerald Co. So 31 of waterfront 6.0.7 million to the total of about 38 between the two. That's good. That was great. Thank you. David, you brought up the sales tax sharing. I saw that footnote. It's on page 113 in here. Who do we share with the car dealerships? That is correct. Okay, so we're talking about raising sales tax and we're giving half, you know, portions of it away to... Yeah, so those were sales tax sharing agreements that were entered into a number of years ago based on their generation of sales tax. When their numbers go down, our sharing number goes down. In some of those agreements, they have to reach a minimum cap before we do sales tax sharing agreements with them. But yes, that was another way to drive economic development to encourage auto dealers to locate and hunting to imbiage as opposed to up to road in other cities. And they go tell 2038 it looks like. Yes. Okay. Manic comment on that as well. Sure. Just to have more information. So everything that was said is dead on, but the reason that we have these texturing agreements, like many other cities do, is twofold. One, to attract the businesses to come here. So, for instance, we have McKenna. We have McKenna now in Huntington Beach because of a sales texturing agreement. They otherwise would have gotten a better deal in another city and not be here. So that's one issue. The other issue is usually as part of the sales tax agreement, the developer or the dealership, they agree to spend a certain amount of money either upfront or over time to improve the property. So in many cases in Huntington Beach, we now have car dealerships that look pretty, that didn't look pretty 15, 20, 35 years ago. There are rundown pieces of property or rundown dealerships. New owners came in and through these texturing agreements they agreed to really improve. And I think we can all agree, McKenna, for instance, and Jeep, they look good from the curb, right? From the street. And it's because they made those initial investments. And so that's kind of where, that's kind of, you know, the incentive. Sure, it's just, it's marketing. Yeah, I get it. Okay, just two more. Sorry, bear with me. Sorry, sorry. Before you got further, I was reading that about the sales tax share agreement. And it says, for example, that McKinna Subaru receives 45% rebate after base sales exceed $150,000. That's sales, $150,000. That's sales, the card dealership. They receive rebate after $150,000 in sales. He ends sales tax generation. Sales tax. Okay, that makes more sense, thank you. Sorry. No problem. The car has. That's pretty quick. No problem. That's pretty quick. Then on the footnotes on page 93 and 97 talks about a pollution reserve for the gun range and central and the sports complex. I understand that. Seems like the city has many other areas that we have many other land areas like the homeless shelter and things that what differentiates the gun range from these other ones that that that we called that one out at. Are we planning to do something with the gun range? So I think we had there was a settlement and with that settlement I think there was funding for it. I'll find out the details. I'm just remembering back 15 so years and so I think when the city had the money for that they put that in a reserve for the remediation of the lead at the gun range. But I'll follow up on that. That's a liability or what? It's a long-term obligation so the liability sitting on the balance sheet. I don't understand what this one has different than other polluted land the city has. And it would be a long term reserve than for future development and mitigation of whatever's there. Yes. Yes. As city manager mentioned, that is something that we looked at as part of the audit. I'm making a list of some of the items you asked for, but that is something part of the audit where a number of years back there was actually a new accounting standard that you had to put these pollution liability on your balance sheets. So we actually do have documentation of the estimate of the future cost of remediating that gun range. So while you may be correct, there may be some other areas that you're aware of. This was something that was actually a legal requirement that we have documentation for. Okay, so the other areas would follow suit then, would be reserved for? If you're aware of something, I'm certainly bring it to the attention if there's some sort of mandated pollution remediation. The homeless shelters on Dirty Land on Beach. Sure. There's a difference between mandated pollution remediation and if you're aware of something that's blighted. Okay. If you're not mandated by that's blighted. Okay. If you're not mandated by an agency to clean up, it sounds like you're referring to a blighted area. So there's a difference between a mandated cleanup or a mandated remediation and something that the city intends on cleaning up with use of reserves, for example. So there's a difference between the requirement to actually report that, and I guess enforceable liability. Okay. Last detailed question. It's on the pension. Our favorite topic on page 71 is the pension footnote. So our net pension liability, we lost $40 million this year in our pension, is that right? Roughly? In liability or in our unfunded liability, right? Doing the math, the snapshot, there was a reduction of that net pension liability based on that measurement date. So that first question, yes, the results of the actual evaluation resulted in an increase in your pension liability. Correct. Yeah, by 40. I just that's approximately. Yeah, Paul. Yeah, Paul. Yeah. Last year's liability to this year's liability, it's an increase of 40 million dollars. Correct. Okay. That was going to be my question. Since the last year was 150 millionish pension liability number. Yeah, okay. And then included in that, this is, I asked CalPERS this, we still pay CalPERS just to admit, add me in the, just run our pension, we pay CalPERS a million dollars a year. That right? Just to run what they do. The exact amount, and I don't have that in front of me, but generally your payments to CalPERS make up the real amounts. I don't know. I don't know. Add me in the census. Oh, no. And sure, yeah. They would show that as a reduction of that. Correct. Yeah. That seems to be the issue in our city. We have to address the pension. Stop taking the can down the road address it. But that's the major thing I see. So my last question, I think for David, the big change, we said we made $61 million in that income this year. And 31 of it was Michael's settlement. So we made $30 million. But the next year, our budget were projected to lose $8 million, whatever our budget was saying. What's causing this big swing from a $30 million gain to a... Well, keep in mind that you're $30 dollars that you're referring to are all funds so they include Enterprise funds everything else So when we focus on the budget and we focus on the Conversation is it relates to providing city services. That's the general fun piece of that so that particular piece as we move forward, as less revenue than expenditures, as we move and look at the next five to seven years. So we're looking at ongoing revenue covering ongoing costs. As we share. We're projection for all funds. Not just general, do you have a projection for all funds? Why in terms of the individual what each fund is the projection for next year for all funds. Apple's apples right trying to get to that. What do we project this year with 61 million what are we projecting next year to be? I don't have that projection. Okay. Do we do that projection on sources? No. Not that I'm aware of. Okay. Thank you for bearing with me. Thank you, John. Absolutely. Are you in line up? Well, you're we're making we are making projections based on each individual funds revenue that they're generating and their expenditures. So for every fund, we have a budgeted amount and we know whether it is a surplus or a deficit. So generally speaking, when you look at most funds that are operating in the city, they're operating in a surplus position. So when you look at this document and you look at the breakdown for the individual funds, you end up looking at the fun balance in each of those funds. There are two of those funds that are negative and that is the workers comp MLI ability fund. And so that is also noted in the notes, those are in a negative position, but every other fund is in a positive position at the end of the fiscal year. As we move forward with the budget, and we're taking that fund balance, looking at the revenues, looking at the expenditures, and then estimating what that fund balance is by fund. The only time we roll up everything is when we do the audited financial statement. Because we're required to report it in a very specific manner. So when we're operating day in and day out, we're operating fund by fund by fund. So to answer your question are the other funds balanced? Yes, for the most part, yes. When you said liability, you're talking about the pension liability fund or are you talking about some other liability? I am. Talking about all funds in terms of fund balance. You said there was two funds that you didn't. There was one was workers comp and then General City liability not pension. Okay, General City. Yeah. So liability claims, lawsuits, those types of things. Okay. Two. The general fund surplus allocation indicates a capital improvement reserve amount of $339,000 in change and then other capital projects in parentheses infrastructure. Wouldn't those be one of the same? Are you allocating money to specific projects as opposed to bolscoring the already $9 million that you have in capital improvement reserve? You're looking at our chart. Yes, so the surplus allocation. Yes, yes the surplus allocation. Yes, yes, and so it's on slide nine and the difference between capital improvement reserve versus other capital projects and infrastructure. Serena, do you so the same number you just did it twice. So I'm assuming one is going into the reserve account and the other one is being used for specific capital projects that you perhaps are short on. I just want to make sure that's correct. So the one that's the capital improvement reserve, that's the reserve that's being held in the general fund for capital improvement projects. Right. And then the one that has the infrastructure and parentheses, that specifically designated to eventually go to the infrastructure fund, which the infrastructure fund also pays for a lot of the capital improvements around the city that we can't get grant funding for and it's kind of you know pertains to a lot of different departments. So we supplement some of the park project project of the park projects with that if there's not enough park development impact the money available for example. So we have more than one capital improvement budget. Is that what you're saying? We have more than one capital improvement fund. We have two funds. What's the other one called? One the call the infrastructure fund, one the call capital improvement reserve. I don't see a listing in here for the, at least for our general funds. Let me guess, you have it over under other funds. It's not listed on the chart that came with the budget. There is no infrastructure, there is no other capital projects slash infrastructure. So there should be capital improvement reserve. It could be it's probably getting rolled into the other fund balance category. Is there a reason that we have those separated. We have to go back and look, but it could have just been the way that a forgot policy was adopted. It's all cat facts. Yeah, at the end of the day, this is a benefit for separating those for some reason that we just don't understand. Well, the infrastructure fund was set up a couple years ago to address did the lack of infrastructure getting repaired in the city. And that's by law, I think charter amendment, that 15% goes into a fund for that specific purpose. So I think the reason why that fund is there is to segregate it. So the money is there and we don't have to it's I think the question is is what's infrastructure okay get it and then what's other capital projects that don't fit into infrastructure so I think that's what's confusing infrastructure can be a little more broad so Doing some Fand replenishment down at the beach and things like that Whereas capital the capital is more So is one predictability is opposed to a lack of predictability then in being able to budget for it as to make plan for it. Is that what you're kind of driving at? No, it's more just a different and we can go back and look at why they were set up as two different categories. There has to be some type of differentiation between the two, but in general infrastructure is a little more broad. Whereas when you're seeing a capital improvement reserve, you're really talking about supplementing the capital improvement program of the city, which is higher dollar projects, such as park and playground equipment improvement, improvements building, larger building improvements, things like that, and street rehab. Maybe we can get some explanation on that. If I'm correct, I think they took so many out of the infrastructure fund to build the the homeless shelter on Beach Boulevard. Am I correct about that? A lot of that was funded through CARES Act funding. I think some of the funding came from that infrastructure. A little bit of it was for some other block walls and just some of the minor plumbing type things that went into it. I have a quick question. So this general fund read their policy and it says it requires 50% of it to be taken for pension rates stabilization reserve. Is that something that has to happen because of something that was passed by the council? Or is that something we're just dealing? So we're taking 50% out of the general fund surplus to put into pension liabilities, but then we've got a $400 million reserve. And my comment would be that general fund surplus could go more, that could, could, if we had the money, good infrastructure to improve our city, the parks and everything else, but it's now required 50% of that is required to go to the pension rate stabilization. So I guess my question is is that absolutely required or is that something that we just typically do? Is that vote? That is an adopted reserve policy that was adopted by City Council. Do you know when that was adopted? I'm not up the top of my head. I know there are several of them in there. Okay. There's an unfunded liability component to it. There is the what we call the waterfall where you determine how that breaks down, which we talked about a little bit earlier, but those are adopted city council policies. Right. They could be reviewed and looked at and adjusted according to the Council. The Council and the community. Okay. I alluded to. I just have a very simplistic question. Just for my my brain to understand. So we have a surplus in the general fund. Mechanically, it's just we say we're going to allocate it to the pension fund and then the cash doesn't go anywhere, right? The cash stays with Alissa, our treasure and then we just allocate it from the general fund is so it's a bookkeeping thing, right? Well, it's still sitting in the general fund. So it's a bookkeeping thing, right? Well, it's still sitting in the general fund. It's just assigned, as you see, in the financial documents. So when you look at the fund balance of honor and 32 million, if it's general fund related, that's an individual line item. Some of what we're talking about here also is, it initially is sitting in the general fund. It may get moved to another fund whether it's an equipment replacement fund, the pension, the one 15 trust, those types of things. So that cash then literally moves over to that fund and now that it's in that fund it's earning its own interest in that fund. So it's not like it goes anywhere. We're just kind of earmarking it for. So it gets put there and so then like the infrastructure fund, when a budget is made, then some of when the council approves a project or something like that during the budget, then it would use the infrastructure fund. And so that's where or the capital improvement reserve. So during the budget year, if there was a project that needs those funds, then it would get budgeted for that and then used for those purposes. Right. I just wanted to make sure my understanding of, because one thing's cash, that's something we can all wish to have more of right and then Then we have these funds One pool that's allocated to see some funds like I can see it infrastructure has 33 million allocated to it But all one pool of money so part of that 400 million is some of these other funds where we've got money set aside for projects cap capital improvement projects, and internal service funds for vehicles equipment. So there's a large chunk of that 400 million in cash that is sitting there for designated purposes and projects that are ongoing. There's tens of millions of CIP projects that are taking place this fiscal year. So some of that money gets drawn down. Yeah. And similar to the capital project, it seems like we have a few different pension ones. Right. Obviously we have pension rate stabilization pension liability. The fiduciary one we talked about. Okay. Thank you. Yeah. And just as a clarification to Chairman Gates, question about reserves. I've got the policy sitting here. It's about six pages long of different types of reserve requirements that were adopted and we follow those requirements. One last question question I hope. On this reserves it says in chart number eight that there's $4.9 million in something called planned use of reserves. Now you kind of went over that briefly. Could you can I get an explanation of what that is? The plan uses the reserves. So as part of the budget, we had received 4.9 million from AES several years ago. And that had been sitting in a general fund reserve account because it could only specifically be used for improvements in the southeast area. And so as part of the CIP plan for fiscal year 2324, public works and community services work together and I think they did some town halls down in the southeast area and identified what the priorities were. And so they came up with a plan to spend that 4.9 million on capital improvement projects in the southeast area. Do we have an idea what those were for? Yeah so it would be in a fiscal year 2324 budget and you could see what what that plan will be but we can get you that information. All right, thank you. I think it's, I think it's things like Hamilton Avenue median in front of the school there and the library. There's a median put in there. I think there was some other, maybe some pavement, some bike lanes, but there's a list of that and we'll get to that for you. None of that had to do with Edison Community Center fixing up the sinking kind of scores. Is that any part of that? No, they've been trying to work. I'll check. There might be a piece of it for that, but I'll check. I mean, most of this money is already spent, right? It was a 23, 24 budget line item project. I assume most of it is, I mean, it could be just obligated at this point, but I assume most of it spent. If it's a 23, 24, I'm not sure that I understand your question. Yeah, that's, it's a 23 2324 budget item. The 4.9 million was how to reserve was obligated to do some work. I assume a good portion of that is already spent at this point. I suspect that I know the median throughout there. They we finished him last year. David, like you said, we're looking at a smash on a history. Yes, of what's happened. So, yeah. Have we engaged Jonathan to do another metal lark audit. He did the original one, yes. That was going to go on to do it yearly. That was not an audit just for everybody's education. Agreed upon procedures. Yeah. I didn't know if that was a plan to go forward. We discussed that last year as it was, but I'm not sure if anyone's talked about it. Okay. Maybe we can put that on our metal art task force. But anyway. Anyway, in regard to this this whole topic of the financial report, you know, I've expressed concern before that this is to get this six months after the year ended. It is something that boggles my mind and I've done a lot of research on this. There are 11 cities that have automated this process, which would accelerate the time by which we could start to look at this. Okay. It does very little good in my mind for us to take snippets from this. This report be at the audit be at the summary financial report. If we don't have the whole detail report here, I would like to see that before we come walking in here and looking at a few slides that have summaries. And then we're forced to generate more questions than we have answers. It's not a very good use of time. It's not a very good use of the resource of the skill set that the people sitting up here could bring to bear to actually help with relative progress and improving things. You know, when you get bogged down into all these questions about who's on first, how are we accounting for this? What's the nomenclature that we're titling this particular entity or enterprise? You know, it gets quite confusing. And then if you come to the city council meetings and you listen to citizens' rail about this very thing, the lack of clarity, the lack of transparency, the easier we can make this and the simpler we can make it so that the dumbest kid in the class can follow along instead of these mechanics that we go through. And I don't happen to believe that it's really necessary. So for what that's worth, I'd like to dig through the actual audit. I'd like to dig through the detail behind all this information that's been shared with us tonight, because I'm sitting here with more questions than I have answers. What I would like to add on to what Chairman Sissroen has said, we're an advisory board and our job is to get information and then go to our council and advise them because we've had the time to really dig into this stuff. And so when we get a budget, that's a year old, that's already been spent. I don't know what kind of advice I'm supposed to go to my councilwoman and talk to her about. I mean, I guess things to look for next year. But I don't know, it's like telling your kid not to touch the fire after they have a blister on their hand and they already burnt their hands. So I just feel like as an advisory board, and we've often talked about this, we would love the information before the conclusion, if you will. So that's just add on to what you were saying. The dead item was just an audit report. I mean, we're getting an audit report. I mean, that's what the agenda item was, right? Not a budget for the future. The issue though, at least in my mind, is if we do an audit report, I'd like to see the actual audit report because a few months ago in her page document we got was, a few months ago we had served up to us an audit report, which is what it was referred to on the whole metal arc golf course issue that we had raised going back 12 months. It took them six months to produce this and then come to find out it was so limited in its scope. And in fact, it wasn't a full blown audit. It was an advisory. What do you call it? Billy? Yeah, agreed to come on. Come on guys. I just want to get to the bottom of it. The issue about the budget that that Telly's raising is something that we have discussed at length before. My concern about the budget is six months after the fact, you're now tumbling numbers around the pension liability that are already dated. And then you're throwing them into the projection for the following year, the upcoming year. It's like try to do something like that in your business and see how far you could get, you know, taking, taking old numbers that are your old and then extrapolating them and putting them into next year. It's like, it's hard for me to wrap my mind around this. I'm just looking at the calendar and it says that the budget, the proposed budget is to come to the agenda in May. And I think that's what David was talking about. So if we're looking for the forward leading budget items, and we want to package it in a certain way, I think that's probably what we ought to be guiding them on, as opposed to pick it on at the outer report, which is really just a, I mean, it's almost like a, it's almost like a regulatory requirements to come and brief us on the outer report, you know? So. coming brief us on the honor report, you know, so. All right, unless we have any other questions or comments. Are we ready to move on to friends of the library? I've got a couple more slides. Oh, I'm sorry. I've been rolling. I've been rolling. Go for it. Yeah, no, we're in no rush. So we can be here all night. And it is something that you have raised. And so I just wanted to go back and for purposes of our new members as well as just reminding all of us what the purpose of this group is that you clearly identify is it's to advise the City Council on manners that they've pertained to financial planning. And so this is the list that again is pulled out of the municipal code that talks about fiscal policies, including the reserve policies that we've talked about this evening, looking at the proposed budget that will be coming forward. They're currently working on for the 25, 26 year, being able to look at major projects that may be coming down the pipeline, those types of things as well as all of the regulatory items that were required to do such as the Act for. The Act for is formatted in a way that's required by very clearly definitions. And that's why we have the auditor go through and audit them. That's why they get rolled up the way that they get rolled up. GASB is also involved in those pronouncements in terms of what those documents look like. So as I indicated earlier this evening, the financial act for his history. That's what has happened in the past. It tells you sometimes you can look at the past to have an idea of where you need to go forward to. So, what I'm proposing, and we can talk more about this at the next meeting, is based on those types of reports that are out there, He has bringing before this body very specific reports based on a timeline that I put here that linked to what we actually do in the organization throughout the year. So in January we're typically doing the act for because we are on a modified accrual. So even though we end June 30th, the books stay open for another 90 days. And at that point in time, then the books are finally closed because modified accrual is recording some of those additional revenues that are coming in. And once that is done in October, then we're closing everything out. We're bringing the auditors in. They are going through an auditing it. They pull down all kinds of documentation to different requirements that we have to comply with there. And then once that is done, then we put the final document itself together. It's due to the FOA for the awards at the end of December. So as I indicated in the last meeting, that's the typical timeline that we work on the Act for. Mid-year budget review, that's gonna be coming up in February. So that's taking the current 24-25 budget and saying, hey, we're halfway through that year, where we at, what modifications, what adjustments do we think need to be made. And then in conjunction with that, we've updated the Long Range Financial Plan. And that's a new document that we're going to be bringing forward that will allow us to do planning going forward. So as I will share with you when we bring that document up, you will have 10 years of history in it. You'll have the current baseline and it'll give us the opportunity to do what if scenarios. The other thing to be able to look at, yes. Does that show the pension liability over time and forecasted forward? Absolutely. Yeah, because with our pension information, we get annual updates that annual update includes what the future estimations are on a go-forward basis. So one of the other things that's on this list, by the way, and I think it's down in October because that's when we typically get the updated actual real information from CalPERS. So in October, I'm making a suggestion here that this body get an update based on that new actual real information. So this schedule is kind of a timeline of activities that happen, something that I would like to have the commission consider. It kind of gives us a road map. And it gives you a road map to kind of know what to anticipate what's coming along as well as other items that you want to discuss in this format. This is outstanding. This is pretty much what we've been asking for. You know, so that we can get to see this, get some input and some consideration on this stuff before you go, put it in front of the city council. I can't tell you any times that, you know, they've shared with me that the amount of stuff that gets blown by them, the amount of things that they're being tasked to look at and have to consider. I don't know how anybody could do that. And that's my issue is we can make this simpler and be a much better resource than because collectively we've gotten more time and there's an awful lot of expertise and education sitting up here that, that frankly some of them don't have, that they're looking for that and we haven't been able to give it to them. We're fumbling around here in the dark, trying to figure out who's on first, what funds are being moved where, you know, just getting straight with all the nomenclature is mind-boggling. And if I could add to that, just as we go forward, and you may already be doing this, I'm new, I don't really know how all the things get handle right here, but we can be getting the information a couple of weeks in advance of the meeting because there is so much information and detailed, it gives us the opportunity to start weighing through it so we can come prepared with better questions. Yeah, so I mean again, one of my recommendations would be, you know, we've got a timeline here so we know what those documents are. We can get them out as they are available but then also for anything that you're discussing, you know, with the chair that we're we have an agreement on what's coming down the pipeline. And then also what the individuals in this commission want to also add to the agenda. Because a lot of times there are things that get added in addition to everything here. Just recognize we've got a limited amount of resources. We want to make them as wise use as possible. And that's why I proposed this schedule. I want to thank you. The schedule looks wonderful. This is new to us. So I'm very, very excited. I do have one question though. So in April, we have a proposed budget review. When does the city council get the budget? Like do they get it before April? No, they see it in May. Oh my goodness, I'm so excited. Again, this is so fantastic. I am used to commission or a finance advisory board looking at that before it formally comes before City Council. Thank you. Because I remember one of my more embarrassing moments sitting here was we had a public speaker come up and deservedly shamed us for not going to the council and discussing some of the numbers with them. And I was like, you can't discuss something you don't know. So, and I didn't say that, but that's what I was feeling. And I was like, I don't want to be in that position any longer. I just don't want to do it. So this looks great. Thank you. Thank you very much. So that concludes our report. Okay. Now we'll go forward with friends of the library. Please. So we right now we at the last commission meeting that we held we did the subcommittee we the subcommittee went toward the library for the library operation staff over the holidays hadn't had a chance to meet with them we but we are meeting with them in January to start discussing that and then we will recombine with a subcommittee and as we move that forward. So we'll be with them in January and then working with the subcommittee on bringing that information forward. I hope it won't take more than, you know, it does have to go to council, but I'm hoping January and February we can work through the committee, get a good understanding of what it looks like. It's going to look very similar to many of the other agreements we're bringing. We've brought forward the city council in this past year. So it should take a month to do. agreements we're bringing we brought forward the City Council in this past year so It should it should take a month to do is it going to be a lease You know what I should I shouldn't use that term. Yes. I don't think that not necessarily a lease Mostly more probably a memory. Yeah, Memorandum understand. Thank you. Which is one step above what we got right now. Thank you. I have any more questions or comments about friends of the library or want to come to agenda? I'm torn about making any comments on it. It was Kelly and I went just for background on the, was it the 15th of December? Those are Monday. We want to get a tour of what they do. On a typical Monday at the library and what the friends of the library do. There's a lot of people there before the library opened there must have been at least a dozen volunteers that were very busy collecting the books that were donated. Thank you very much that were donated over the weekend and processing them. And the process is quite involved about where the books, some books end up in a trash can, some books end up in a case that's locked, and some books end up on the shelf and the library for sale. So it's quite an operation that they've got there. And it seems to run quite well. I don't know who's running it. I don't know who. My confusion through the whole thing is that there's people who volunteer to work in the library. And then there's people who volunteer to work with friends of the library. And then there's people who do both work with the volunteer for the friends of the library who volunteer for the Friends of the Library of Volunteer 4. The library, my confusion is why is there two different groups? I mean, if you're going to volunteer for the library, why is there just one group that does all the volunteer work and one person that runs it? But I'm guessing the history has a lot to do with this. From what I heard from what I understood is that the friends of the library, this particular chapter, if you want to call it that, is unaffiliated than the other friends of the library anywhere else. It's just for this library district. And they were created to help build that central library, to create to do fundraising, build that central library, to create to do fundraising, to build the library then they kind of stuck around and are helping finance the library by their donations. Again, not quite sure how the two voluntary organizations are separated and won't why they're separated, but they are. The thing about, because of the history, there never was a formal agreement with this group on what their job is and how they operate within the library. They just kind of do it. They just kind of evolved into them doing this. And it's like I said, it's a large operation. I'm guessing they've got access to and specific use of about 4,000 square feet of that library for this operation. That's how big it is. There's rows and rows of metal cabinets that have the books that are on their way, either somewhere else or in the library for sales. And they also have the gift shop, too. And so the thing we really need to get this is mostly for the guys who are new here, is we need to get an agreement with them because there's nothing there. It's a handshake and they contribute a dollar amount every year, but it's not really based on anything. It's just a check they write. So it needs to be a little bit more formalized, we think. Protect everybody. I mean, I don't know what happens if somebody gets hurt in a trash can, I don't think what are we gonna do? So the lease is not really a, hey, you're agreeing to use this space, and it's more of a concept of operation, and who's responsible for what, and what other policies may need to be in place, because they're kind of working on our property. Exactly, they're working on the property, which is a problem. Okay. And the other thing is, and this is again, because of this handshake agreement they've had for almost 50 years, we have no audit or any idea of how much money they're making using this 4,000 square feet in the library. We didn't get enough of that. Are they a established nonprofit? Is it an established nonprofit organization? I believe it is. Absolutely. We have their tax returns. We have their tax returns, but we don't, and it's just one of the things that if you're a city, you really want to know what's at least what the numbers are. And yeah, exactly. I assume that whatever source of funds they gained from this operation gets delivered to the library somehow. Well, we don't know. So there's not a check given every year. No, no, no. Here's the amount we're donating to the library. There is a check every year, I think. I think maybe the commissioners, the chair and the vice chair are saying there's maybe not a clear understanding of how much they're making through their operation and how much they're doing. Yeah, those are not different things. There's not a four-eye. Yeah. But they do give the $250,000 a year and then fund other things as well. And so we want to help provide clarity of what all those are so that so that we can understand it. It would be nice to know that the cost of their use of that space relative to insurance, all the other aspects that are involved utilities are being covered at least by the check there. Yeah, right exactly to make it a little bit more professional. So anyway, that's what it was a it was a very eye-opening visit. There was a lot of people there doing a lot of work. And it was good to see that there's something we all can do when we're retired and not on the finance commission. We can go volunteer over it to let the library. Absolutely. Okay. Thank you very much. So I think we're ready to do commission or comment. So at the end of our meeting, we all make a comment or you don't have to. So let's start with you. Well, I've got a lot of learning to do. But thanks for putting up with my lack of knowledge and I hope to be able to contribute more in the future and thanks for the report on the out of report. Thank you. Right. I'd like to echo that as well. The look forward to trying to get up to speed quickly if possible and I'm sure I'll be leaning on it. I was leaning on Bill here, looking at his notes and looking at his report that he'd already printed out. So hopefully we'll be able to gain some more information as we go along. I think your schedule that you're coming out with for the year and providing that information and advance helps us to get into the weeds on some of that sooner and gives us an opportunity to ask that question. Welcome, guys. Thank you. And I'd like to echo that. The schedule is looking forward to it. I like how everything's laid out and I like that we're in front of City Council meetings. So thank you for doing that. First, I want to welcome the two new gentlemen here, and I'm not going to remember your name for six months. Yeah, if I see on the street and I ignore you, it's probably because I don't remember. I saw you here. And I want to thank Billy for doing a hell of a job last year as a chair and I know Kelly's going to do a fantastic job here. I can you tell you how excited I am to have you guys here. I can tell already that you're going to be a great resource. Yeah, a resource, a knowledge resource and bring something to the party. And I want to thank David. This is a huge step that you've done for us to delineate all this stuff. I put it on a schedule and then we can start to bring some clarity to all this. I couldn't be happier. But I'm still mad at Tweed for holding me up on my parking pass. I want that publicly stated. I do that stuff. You know, I do it religiously, Paul, and she's just, she's just her anger me. I'm sorry, Commissioner. I wanted, I want to welcome both Paul and Scott who are team. It's going to be fun, and especially when we do little subcommittees, and so it'll be great. I want to thank David for your report. And yeah, and I'm really, really looking forward to seeing things before it's already gone out to vote and everything like that. And yeah, just I will see you guys next week. We don't usually have two meetings, but this is kind of a special occasion. So I'll see you guys next week. And I want to thank you guys for your vote of confidence for me. So I'll see you guys next week and I want to thank you guys for your votes, a confidence for me and I will do my very best as your chairwoman. So once I finish my two hours seminar here, when do I get my pass? As soon as you email me the certificate, we can arrange for you to come pick up path. Okay. That's both certificates right? Well motion to adjourn. Motion to adjourn. Motion to adjourn. Second. All in favor. Hi. Thank you.