Good to see everybody. Good morning. So, we are here for uh budget session two. Um and I'd like to welcome everybody. We'll call the meeting to order. Um and I guess today we're going to work work our way through general fund capital and enterprise and special revenue just like
we did in meeting one. And so I guess we'll kick it off and u city manager. >> Thank you, Mr. Mayor. Good morning, uh, members of council. So, as the mayor just noted, today is the second budget workshop. Um, and we're going to be, uh,
the first thing I'd like to do is just remind everybody of the, uh, budget calendar, remaining calendar for the folks not only in the day, but also on in the in the public. Brian, I don't if you could bring the slide up. Thank you. So, uh, as we mentioned,
today's the second workshop. Uh today at 11:00 a.m. the council will also have a special meeting to set the proposed millage rate to meet the statutory requirement for the deadline to do that. On August 11th uh we will have a standalone water and wastewater fund budget workshop to to address uh the
different issues there and impacts potentially on the rate. Um, at the next council meeting on August 4th, uh, we will be asking the council to set the dates for the public hearings related to the budget in September. As I mentioned
last time, because of the way of the the statute, the language in the statute and the in terms of precedence in this county, um, the school district, the county uh, take precedence over us in terms of when they hold their budget uh, public hearings. So because of that we
had to shift our schedule. So we would be requesting the council to set the first reading um and first public hearing for the millary and the budget on September 3rd which is a Thursday and then subsequently we'd ask you also to do the second reading second public
hearing on the 17th another Thursday. Uh we would also ask we probably recommend that the resolutions adopting utility rates be set for the 17th. They could be done at the second meeting in September at the second regular meeting but since we're talking about all the budget things seems thus logical to include it
on that meeting on the 17th. So that is the proposed calendar. >> Now I wanted to uh just draw your attention to today's workshop and sort of just the goals for today. So we plan in the slide presentation to address any of the outstanding council questions
from the workshop back on the 6th. Uh we're also going to be talking about some changes and developments in the budget since the first workshop. Nothing of any dramatic significance, but there's always changes as we get more information. Um at the goal at the end of today's workshop would hopefully be
to consensus from the council so we can move forward with the general fund, the special revenue funds, the internal service and enterprise and specifically the sanitation budget with the exclusion of water and sewer which I mentioned we dealing with on August 11th. uh and moving those to a final stage so that we
could get them ready for September. So, let's talk about the general fund. So, the uh first thing I'd like to mention again just to uh remind everybody um that this is the 10th consecutive year that we are not proposing any tax rate increase. So, no
tax rate increase for this community. And just a little summary here of some of the changes in the general fund since the first workshop. So the general fund itself, the aggregate number uh was reduced from 41,377,75
to 41,237,310 which is a net change of $140,395. It's again typical things will change. We'll get more information, final numbers, etc. from the property appraiser and some of the details we'll talk about on this slide. At the workshop on the 6th, we had
mentioned as one of the ways to balance the budget, we were looking to allocate interest revenue from the tiff fund, $35,000 and $130,000 from CIT to the general fund. Um, some questions were raised about that. We've done some
additional due diligence. We reached out to the county. There is not necessarily clear statutory prohibition uh against doing this but the county did provide us with a statute that they use as a guideline and their practice is not to do what we were thinking about doing.
They say no we typically keep the interest where it is. So in light of that and abundance of caution we have decided not to pursue that so that those that interest revenue will be booked again in its respective uh funds. So in the TIFF and the CIT instead what we've
done to address this gap now this $165,000 gap is we have reduced the general fund's fleet overhead charges. So the general fund itself the departments pay overhead to the fleet which is a fleet fund as an internal service fund and we've reduced that that
overhead charge to by $165,000. What that does is it's reduced the the fleet reserve fund to um from 389,000 to $224,000 which we have no issue with. Uh in in fact traditionally in the fleet fund
there's been less than $100,000 in its reserve. So we're not we're not concerned about that. We feel that that's a very uh um uh safe change to help us balance the the general fund. Another change that
was a cost that came up since the first workshop is the uh new phone system. So, as you know, uh Sally and her team have been working on uh acquiring a new phone system now for quite some time. We had an RFP. It's been vetted. Uh they have a vendor. There's a contract that will be
coming before you at the second meeting in August to approve for a new phone system. As part of that new phone system, there's obviously a capital p piece, but there's also an ongoing operational piece. So every year there's usually a maintenance cost for all the phones throughout the city. And so this
maintenance cost is uh $42,984. So we had to include it in the operational budget for next year because we anticipate the phone system will be in place um uh in the fiscal 27 budget. Uh so we had to add that in. Uh of course this is as the asterisk notes,
this is contingent on council approving the contract in August. >> Um so that was an added cost. There's also been a reduction u in the general fund contributions to the CRA based on final taxable values. That's not surprising. That actually kind of tends to one way or the other happen every
year. Uh we made some other adjustments to workers compensation and some other personnel tweaks. Um and so that gives us the number that I mentioned at the outset, the 41,237,310 for the general fund. One of the other u one of the critical pieces that we discussed at the first
workshop was the uh police union contract. We talked about some added costs related to uh public safety. We had contemplated uh what we felt was going to be a fair offer for the police union contract. And I want to make sure that get on record that I want to commend the police union negotiating
team uh and and our team as well. I mean they worked very well together. Uh I I think it's admirable that you got folks to agree within a short period of time uh on terms here. So uh thank you to them. And so what we have here is a one-year contract. The reason it's one
year is because of ballot amendment three, state amendment three that's uh going to be on the November ballot. We have no idea if that if that passes, it'll have a dramatic impact. So both the police union and the city agreed to just do a one-year contract to see what would happen here. Uh this contract streamlines the steps in their pay plan.
So union contracts have a step plan. So every year the uh an officer or a firefighter, for example, if we're talking about firefighters contract, it would increase by a certain percentage automatically. Um the police contract had different percentages. It was quite
confusing. So thanks to their work together, we've agreed to streamline the pay plan. So now it has consistent 4 and a.5% steps. The negotiation also added supersteps to years five and 11 for officers. So at
those are 9% and 6% increases respectively in those years. And then added a super step to year six for corporals for 6% increase in that given year. The average colar the cost of living adjustment which is in addition to the steps for this contract is 2%.
This contract has been ratified by the union and will be before you on the um August 4th council agenda. Also at the at our last gathering there was some discussion and questions from the council regarding professional legal services in the budget. Um we had we
were not able at the time to provide you at all to break out of what's in the professional legal services uh number this year. We have that information on this slide right now here. So um we have pending and active litigation $9,796.85 85. You'll see that's attributed to the
water and sewer fund. We have the Blazing Saddles due diligence that was from the CRA and that was $1,767.50 that was charged off to the CRA. We have charges to Robert Half. This is a labor placement company. Um we had a
parallegal that was working for us on on a temp status through this company. Uh she did phenomenal work. We decided to hire her. So this $9,39963 uh reflects the totality of the both the charges when she was a temp as well as the buyout clause provision.
We also have um consultation for different land issues, miscellaneous issues. There's been a lot of changes particularly for land development reviews and building permit issues and things like that in the last year from the legislature. So the the attorney's office has been consulting with experts
in land use and that was $22,312.50. And then the fire union um also made a request to add a couple of positions to the bargaining unit and that went to a perk review. Um so we had outside services for that to address that issue
and that was $1,72. So for the total for all funds for professional legal services for the current fiscal year so far as as of the date of this slide uh was $44,97848 of this the general fund portion is
$33,414.13. Um, want to just remind the council, we talked about it at the last meeting, but last year, uh, when we did the budget for the current fiscal year, one thing I remember saying to the council, cuz council member Kravitz asked me, would this be enough? We budgeted 20,000. Was
it going to be enough? And my response was, it's the first year with a new team. Let's, we're going to see how it goes and if we had to make adjustments, we'd propose those to you in the fiscal 27 budget. So, this fiscal 27 budget, as a reminder, we have $45,000 budgeted for
legal services in this category. So, we feel comfortable with that number. Um, I just wanted to make sure you had that information. We also had a question concerning the short-term rental fee um and whether it could be u u made part incorporated into
the building fund. So, we did check on that. So, the city enforces the Florida building code and as you know, the legislature over the last several years has been um in increasingly putting restrictions on on building funds,
trying to in essence tighten what communities can charge for building activities. So, the a short-term our short-term rental inspection program does not fall within the purview of the Florida Building Code. Um, so the statute uh 553.80
indicates that you can't have an activity that's not has to be an allowable activity in fee within the Florida building code. Um, so this is not part of the Florida building code, the short-term rental program. So it would have to stay in the general fund. We couldn't incorporate it into the building fund. A question that was also raised, I believe, by council member
Kravitz as to whether we can differentiate in our permits between commercial and residential um, in terms of charges, and we do do that. We did check that. We do have, if you look at our schedule of fees, there's different fees for commercial than there are for residential. Moving on now to the CRA. Um, we made an
adjustment to the CRA, which is a significant one that I want to dwell on a little bit here. So, um, as council will recall, we had $3 million budgeted for Riverside Park from the general funds unassigned fund balance, right? We in fact have budgeted 3.8 8 million
total, 3 million general fund on the sun fund bill and it's an $800,000 from the tiff. So, one of the things we looked at is uh the tiff has a fairly robust reserve this year um over $1.1 million. So, u
Mr. Ingram had a suggestion to move $500,000 from the tiff reserve in the FY26 year end balance to the Riverside Park project to replace $500,000 in unassigned general fund balance dollars.
So that would reduce the general fund commitment to the park from 3 million to 2.5 million. Um it still leaves a contingency in the CRA of $657,225. So, more than ample contingency for anything we'd probably encounter in the
CRA for fiscal 27. And it also bolsters our unassigned fund balance numbers. I know council has a couple of questions about what that would look like in fiscal 27 and beyond. So, we're going to show you a couple of slides on that also. So, by making this change, this is what
the CRA budget would look like. So, the only difference here from what I showed you on July 6th is the reserve for contingency that is now at 657225. So looking at the city's unassigned um the general fund unassigned fund balance. So you'll see here are the red
line is as a reminder is the minimum for aaa bond rating. Again I want to emphasize we're not saying we're going to be in contention for AAA bond rating. typically as a community with a much larger revenue base, but that's what banks and credit credit association rating associations will use as as the
base. Um, we have a council goal here of 25% for the unassigned fund balance ratio. You can see here that we are in FY26. We anticipate it being 34.04. You had questions about what we think it'll be at the end of FY27. Now, that's
still largely a crystal ball exercise because we haven't even started that fiscal year, but we did do some projections based on some assumptions. And if we add the $500,000 from the CRA reserve to the park project, reducing the general funds contribution, then the
budget um for fiscal 27, the unassigned fund balance budgeted number we anticipate will be about 27.4%. The ratio. Now, one thing to consider, because Jim and I did talk about this, is you you have the flexibility. You
still have the capacity to add more money from the CRA to the park and reduce the general funds obligation even further. So, I'm going to show you this next slide, and this would be if you took a million dollars from the CRA reserve instead of just $500,000, and
you put a million dollars as part of the budget right now into the park project. What that would do is it would leave you with a balance of um >> $857,225 in the CRA reserve and it would increase
your projected unassigned fund balance in the general fund from remember it was 27.4 to just under 30%. For the end of fiscal 27. So, something to consider if council if you want to have a conversation about
that or contemplate that. Um, I think I feel comfortable if that's where you wanted to go. But again, we're trying to be conservative and just have a little starting point here. You could always make this change later as well. It doesn't have to be it's part of the budget right now, but something to just ponder.
Moving on to the CIT, we had one item that I just need to clarify. In the uh first workshop, we mentioned playground border and in my mind, the way it was communicated to me, it was a border for like the playground play zone
materials to keep everything in place. And that has since been clarified. That's not in fact what it is. It's actually a fence to go around the River Hills playground, the new playground we have there. So, there's a picture of the fence here. So that's what the $9,000 was for, not necessarily, you know, something to hold mulch in. Um, so just
want to make sure the council was aware of that. Vice Mayor Chambers asked about how we compare with the other jurisdictions in the area in terms of fees. If you recall, we put a slide up last time in terms of how we compare with the property tax, the overall property tax
burden, which we we do. We compare pretty well, I think. Looking at fees though. So the one annual fee that every other jurisdiction charges in the county um is the annual storm water utility fee. So this is a nonadvalorum fee. Um
and this is based on each community does it slightly different. This number here is uh I took a basically I took a composite of all the other metrics that they use. It's anywhere from a home from 1300 to let's say 2500 to 2,800 ft² or
so. Um, and Tampa as again Tampa and the county have rates that diff they're differentiated based on the size of the house. Plan city is a flat fee for every single house. Doesn't matter what size it is. So you see here, Tampa's $82 a
year for a mediumsiz home. The county is $86.49 and Plant City is $764. And Temple Terrace does not charge this fee. That's the annual fee, the one annual fee that everyone charges. except for
us. Uh now let's look at one-time impact fees. So these are fees that are typically paid by developers or people making significant improvements to their property. And so you could see here um the fire impact fee on the first row that is a fee
that's charged uh for infrastructure for the fire department. So it would pay for like uh fire stations, large equipment, things like that. So Tampa, Plant City, and Hillsboro County all charge this fee. Uh city of Temple Terrace, we do not. They also charge all the other
jurisdictions charge a parks and wreck impact fee. Again, this is for park infrastructure. Uh we do not. Um police impact fee against for police infrastructure, police stations, things like that is charged by Tampa and Plant City. The county nor Temple Terrace
charges this fee. Library impact fee only Plant City charges that. And then there's a mobility impact fee, which is sort of your transportation impact fee, which is the one that when a development comes in, if there's impacts on the roads, sidewalks, traffic signals, this is the fee that would be used to pay for that. And um everyone charges the
mobility impact fee. Water and sewer impact fees. This is when people build new developments, they connect to our system, this is the impact fee that's charged. Every community charges this as well. And then school impact fees, we all charge that, but as that is largely a pass through, we collect those dollars
for the Hillsboro County Public Schools. And those are the fees. >> In sanitation now, so in sanitation, um, again, no rate increases proposed. We did some more due diligence and we still feel comfortable having a 0% rate adjustment.
Here we have your five-year proform. So I want to draw your attention to a couple of things. Uh the first one is the very bottom row which has the ratio the reserve ratio. As you know we always recommend having 25% as a reserve ratio
for our funds. Um you're seeing here that we're not going to hit that. We we've not hit that. I don't think we've ever hit that since I've been here. And that's okay with sanitation because I draw your attention to something else which is right above the row right above the ratio. You'll see estimated fund
balance. So you see the estimated fund balance at the end of the fiscal year for 27 is projected to be $816,792. And again, this is without a a rate increase. So um unlike the other funds, this this fund, as I've mentioned many times before, operates truly like a
business. So you can make decisions uh in real time. Um you can decide I have enough money in fund balance I can buy another piece of equipment or I don't have enough money in fund balance which means I can wait you know another year to do that. Um it doesn't involve complex pro projects where you'd have to
have engineering. You discover things as you go. It's pretty simple. You either need a truck or you don't need a truck. Um I mean just that's a little oversimpl over oversimplification but that's largely what it is. So we are comfortable not necessarily meeting the 25% goal. I think with good growth we're
going to get there eventually. Um, but we feel reasonably confident that that this fund is doing very well. Part of the reason why it does so well, a large large part of the reason that we don't have a rate increase is the Amazon facility. I've mentioned that before.
Not just its solid waste um collection, but it's cardboard. So, it produces an an enormous amount of cardboard. We generate, we're projecting to generate $280,500 just from cardboard from Amazon in terms of the recycling value of the cardboard.
Uh that is largely what's keeping the rate down to zero. So when we talk about our corporate people stepping up and helping us with the budget, that this one does it. I mean, this really single-handedly keeps the rate from uh being impactful to our residents. Uh Council Member Fernandez had a question
about the tipping fee from the county. So, it's 9% is what we've been told it will be for the upcoming year. But again, we feel that with these other revenue pieces that the the team has successfully uh generated that we're we're comfortable with keeping the rate
at zero for this uh for this next year. Now, this shows here this slide where we would compare then based on our projected rate. So, Tampa has an automatic increase that they're projecting for FY27. They've already done this increase. It's been pre-programmed every year, so they're
going up to $45.84 monthly. Uh the county does an annual fee and the county also has an increase and it breaks out to $44.40 monthly. These services are all very comparable, by the way. We're not talking about one place having a service
that's dramatically different than ours. Um Temple Terrace, we're at 3712 monthly, and that's again not that's the current rate. It's not going to change. And then Plant City is at $306. Now I want to talk a little bit about Plant City because I have the same question. I
looked at this like why why are they so much cheaper? So one thing, a couple things going on. So Plant City services 14,000 homes based on the information from their website. We only service 4,000. So there's a a scale here um that that helps them. Plan City also uses the
um uh automated trucks, the arm that comes out and grabs the trash can. So that reduces your staffed uh component dramatically. Um the challenge with us from what I understand this community has looked at that in the past. One of our challenges is the canopy that we
have. We we value our trees. You need at least 15 ft at least 15 ft clearance to have that truck work. And so that that's a challenge for us. Um the other thing is that Plant City, despite the fact it's $30 here, Plant City charges for
your second can. So, they charge you to buy the the can. Um, but they charge you a monthly fee to to dump your can. We do not do that here. We sell you the can and then when we pick up your trash, we don't charge you any more for for the second can. If you have two cans, we
just pick it up for the same rate. Plant City doesn't do that. So, they charge you a monthly fee for the second can. So, the second can is over $19. So, this $30 number, if you had two cans, in fact, would be about $49 and change. So, just a little bit of nuance here to
explain some of the differences. >> And that brings us to the end of today's presentation. Happy to take any questions. >> Very good. Council members, questions. >> I have a couple. >> Okay. So, I want to ask you about the TIFF
reserve and and the CRA and what would we use that reserve for? >> That is the same question that Jim and I were talking about actually just yesterday. Um, you could >> Well, we've used some of the for
example, we bought trash cans this past year. So, we we we did that basically out of reserve. we had the CRA the legal costs we cited would have come out at the reserve. So if you have some expenses that you don't foresee necessarily those will charge off to reserve. Um
you could do things with the reserve. I mean you can do other things. You could say well we want to for example we want to use this for the park or we want to use this to pay down the debt faster or we want there's different things that you could use the reserve. You do want to use the reserve. Um, I think that's
the important part here. We we budget for the reserve. So the reserve, we meet all the statutory guidelines as to the use of proper use of a CRA, CRA funds, but there's not really a reason to keep building the reserve and the CRA in my estimation. Um, because you're going to
get to 2035, the CRA is going to end and then, you know, going to have to figure out what to do with those with those dollars. So I think we need to have some use for them. Um I that's why I'm comfortable if you wanted to add take more of that reserve out and make it a more productive use
because I don't foresee these large expenses coming up in the CRA that would trigger that that you know that that we would need to as you use the reserve sort of as a savings default like some for something we had in like for example our unassigned fund balance we know is our reserve for everything right so if
there's storms we go we go into unassigned fund balance I don't necessarily foresee the same thing for the CRA it's Not as if Hurricane Milton comes through and, you know, we're going to dip into the CRA reserve to to deal with the issues. I would suppose we could, but I don't think that's our number one sort of thought process
there. >> So, it would make more sense financially, fiscally because the general fund, unassigned fund balance can be used for most anything in the city, but the CRA reserve can really only be used in the CRA space, right?
So, I don't have an issue actually taking an additional 500,000 out of that reserve and putting that towards the park versus general fund unassigned fund balance. Um, with regard to the cost to
actually the cost to operate the fleet vehicles and reducing I know that that's a paper reduction basically of reducing the general fund contribution to fleet maintenance by 165. I I know that's not
necessarily cash transferred, but how how does the fleet maintenance fund get funded and would they need that? I mean, by balancing the general fund with
the 165, are we having any actual impact on the operation of the fleet maintenance? No, I I would say we're not because I the number I gave you was still pretty robust and what finance director Ingram and I we talked about this at length about what was the trend.
I wanted to know like historically how much have we used in the past and like he said typically we have less than $100,000 in that reserve. What we're trying to do over the years and this is the great work that that Jim and his team does is we're trying to do everything to the best practices in terms of accounting. So we're trying to
build up our reserves. So like you said on paper we want this to be in a in a better place so that when when we had a bigger reserve and fleet was like obviously that's that's better. We're getting to a you know more account best practice in terms of accountability but based on actual usage it's not
necessary. We've we've not seen an issue where we we would definitely need to do that. If there was an issue in fleet for example and they expended all their reserves that we would have to make an adjustment using the general fund you know unassigned fund balance. Again I'm not I'm not concerned about that.
Okay. Um when with regard to the enterprise funds, the water and sewer fund, uh well, first with the sanitation fund, we have no increase. And I I just want to confirm because in the past
sometimes we've arbitrarily not had an increase in one of the enterprise funds because we didn't feel like the public had an appetite for an increase. But it put us in a bad position down the road requiring higher increases because we
didn't have the funds available for renewal, reinvestment, maintenance, etc. So, I just want to confirm that all of that has been considered when we're not anticipating a rate increase. >> It has been considered. So, um if you
look I have the Brian, can you show the the slide? Thank you. So, I've got the the performer here. So, you can see um some of the assumptions that that we've got built in here. So, again, this year 0% you see when it says revenue, you got the 0% increase column. So, based on the
performance, now granted this is a proform. So, you know, this could change, but right now we've got projected in the future over the next 3 years at a minimum of 3% increase. Um, I think in the past, if you looked at our proformas, I think we were at like 5%
increases. So, the picture is getting better um because of the work that everybody's been doing. You know, for example, we're just, you know, lots of due diligence now, lots of working very closely with the businesses to understand to better understand their needs. Uh, for example, the new cookout
restaurant that just opened up here on Fowler, you know, they've been open for a couple of weeks and now we've discovered that they need, you know, additional dumpsters and things like that. And so, we're in touch with them. We're picking up these these issues before they get out of hand. Um, and
before they, you know, these folks decide, I want to try something else, which wouldn't be allowed in the ordinance. But, so that's the kind of work that's being done here to help keep these costs down. Um, so it wasn't necessarily meant to be a hey, we're just doing that because this is, you know, a way to just reduce the cost to
the to the taxpayer. That's that was a great outcome, but that wasn't necessarily the impetus for it. The impetus for all our fee, tax rate, everything we do is can we continue to provide services without adding any additional cost. We look at that every time. That's our underlying initial
premise. Uh, if we can, great. And that's why we've had 10 years without a tax rate increase. And this year again, we're proposing a zero rate increase because we feel again based on largely some of our biggest corporate users that they're providing us enough revenue to
make to help that uh proceed. >> And then I just have one more question and that is regarding the water and sewer enterprise fund. And we've we obviously h will be talking about this in much more detail August 11th, but the question has come up um regarding the
analysis of the different proposals or possibilities that we have for investment or outside connection or or or what we would be doing. And the the question has come up um when do you think you would have that analysis
available for the public to see? I know we'll be discussing it at that meeting. Um, but do you have an estimated time for when we might have the information available to put out publicly
>> right now? I I don't have an answer to to that. I'd have to consult with the team and just see where we are. Um, I can advise the council on your update as to when I think that might happen. Uh, but at this point, I don't have a specific date. >> Okay. It's just it's obviously a large
investment that that people are uh wanting more information about. So that's it. That's all my questions. >> Member system. >> Thank you. Um good job. Good summary. Um the 165,000 you overhead charges. You know, it's it's you're moving it from
one bucket to the other. the the the the one thing that would have been nice about it would have been a better delineation within the general fund of where these monies are actually going to and allocated. So it it would have it feels good a nice thing but uh it won't have an overall impact over on the
budget which is fine. um the sanitation fund with coming in at 13% this year. Um, I would be concerned with that from an audit perspective as maybe a comment in a future audit. But when you look at the modeling that you've done, I think
that you've got sound assumptions on where you're going to be at a target date and the the uh the breakdown of the capital spending as well as the u uh increased revenues from u Amazon as you
say um I think would be okay in the long run. I mean, if if Jeff gets get has any problem with that next year, you know, you sit down and work work with them through it, that the only time that that that factor would really ever come into play as as a comment in the audit. We
don't want those because we've had them in the past. Um, and and they they tend to cloud the overall issue. Um, so I think I think you've done the good due diligence on that, good an um analytics on that, and I feel comfortable with what you're what you're projecting. One
thing I'd like to caution everybody in the future on the CRA um uh reserve, remember the reserve builds up because we have re tiff revenues coming in versus what's going out and it's supposed to cover that that debt ceiling, the the debt that we're
carrying for that. Remember the revenues for the CRA stop coming in about two years before the debt is fully extinguished. And that reserve, I know I've done the calculations numerous times, that's going to pay for that when it come when that bill comes due. That's
what that really is for. So, we got to be real careful spending too much of it now without so that in 10 years when this when this note comes due finally for for final payment, that's not a general fund ding because that will be
uh it's I think it's like two$ two.5 million dollars overall. and and and I'm I'm I'm talking big numbers. I'm and I recognize that um it's it's 10 years down the future, but that's what that is designed to handle so that the payout
covers it without inter interfering or interacting with the general fund 10 years from now. So that's just a just a word of caution. You were >> I was going to kind of add on to what you were just saying if I could. >> Okay. So, um, one thing to consider too and is that so this the TIFFix sunsets
2035 and I believe the last payment is due 2038. >> Yes. >> But right now the general fund is contributing as part of the CRA $98,000 per year this year for 27 98,000 is what the general fund contribution to the CRA. It's our legal required
contribution. That legally required contribution ends in 2035. >> That's pretty much the same amount as the debt payment. So in essence, you're going to stop paying from the general fund to pay into the CRA, but you can take those same dollars and continue to pay for the debt. So you're in essence,
you wouldn't feel the difference. You can continue that. So it' be it'd be a wash for those three years after the after 2038, then obviously you'd be ahead. The general fund would be >> would be ahead. >> Well, that that's our fault for not being our fault. That's the market's fault for not being able to to to sell the properties in the timely manner
within the way the CRA was originally set up. But I understand what you're saying, but that's going to be undue pressure later on. So, I just just caution. We want to, you know, we don't we don't have to spend it. Let's not spend it because we may we're going to need that in the future. That that's all I'm saying with that. But, otherwise,
I'm I uh I feel pretty comfortable with with with the modifications. Um how far down what was the ultimate change on the overall tax basis from last budget meeting to this budget meeting from the property appraiser? Was there was there
significant difference or was it just chump change? >> Good morning. Um if you're asking about how much difference in the contribution from general fund and from the other uh jurisdictions,
general fund it was only a difference of about $6,000 of what has to be paid into it. It was a very small and I don't have it off the top of my head the percentage but the uh taxable value they had round
it was a round number and it just it went down very slightly >> just a bit. >> Yeah. >> Okay. Cool. Thank you. That's that's all I had. Just sir. And if I could just add quickly, the um that's a great point and we discussed it about the um the
three-year gap when the funding ends and we still have to pay out. By my projections, we should have a very healthy reserve at that point. Unless we come up with more and more projects that are costing a lot, I really don't
foresee that being an issue. we should have a healthy reserve um that would pay down that debt at that time. >> That's just that's just a warning. >> No, no, it's a good great point. >> Let's keep that in the back of your
minds as you go forward. >> Right. >> And and Jim, sorry you can you confirm for me. So that the properties right now that we are potentially selling that revenue that comes in that will go into the CRA, will it not? Or will that go into the general fund?
um the the revenue two properties in the CRA, >> it should go into the CRA. Okay, that's another bonus. Plus, it should raise the value of the the CRA. >> Okay, >> Council Monz,
>> thank you very much. Good morning. Um, a lot has been done. Looks looks pretty good. I think there still needs to be a little bit more work put in. Uh, so I'm going to ask a few questions in that direction now. Um, first I'm going to pick up something that you mentioned about the storm water utility fees. Uh,
my understanding right now is that we draw on the general fund from public utilities to pay for storm water projects. So, if we were to introduce a storm water utility fee, would that be a way of giving some relief to the general fund? >> Yes. >> Okay, that sounds like a really good idea and I think that that would be fun
to pursue. Um, the other question that I have is about um the temporary PAS filtering solution. I brought this up at the previous budget workshop. and I asked if it could be included as a contingency. So my question is why is it not included as a contingency
>> it so at the we are contemplating the temporary solution and we're going to talk about that at the August 11th workshop. >> Mhm. >> But if we do it on August 11th I don't think there will be enough time to incorporate it into the budget. So we will have to end up doing an amendment. Is that not correct?
>> Well not necessarily. I I think right now we're working through the details. So, at the 11th workshop, we should be able to give you the information as to if you want to pursue a temporary contingency, what that would cost, what it would entail. We can we'll have information built into potential rate
scenarios uh to account for that as well. And we'll present that to you on the 11th. >> Okay. So, >> you want to clarify that? >> I just want to make sure we're clear. What we need to do now as far as timeline is the general fund and the
millage rate. Um obviously this is the water and sewer utility fund enterprise. We have more time. We want to have a good budget proposal all the funds by August 15th. That's by ordinance. We can
still adjust or amend up until our meetings in September. But the main focus today um right now is we need to make sure we have our millage rate for the general fund so that we can
submit it by the August 4th deadline to the property appraiser. >> Sure. >> I hope that helps. >> Yeah. No, no, I understand. Um I don't have a problem with that at all. I just, you know, I took note of the fact that there's a I believe 8.7 million inclusion here for um rehabilitation and
modernization of the existing plant. It just made sense to me that in addition to that since the uh uh temporary filtering solution is something that we have considered and that we have an outstanding uh request that we're going to get a response from city management
uh regarding that could enter into the budget as a contingency because it's not something that's certain, but it is something that's possible. So that was my my thought process on that. Not trying to hold up any of the millage stuff. Um, so, oh, and, uh, while we're on that topic, um, I really like the
rate schedule that was included for sanitation. There were, I think on page 39, three different options, 5, 10, 15% increase with corresponding reserve levels. Um, and it would have made me happy to see something like that for the
water fund. Um, so if it could be possible to obtain something like that for the water fund, then I'd very much like to see that. Uh, and on on that same topic, um, can I ask what the rationale was for the
0% rate increase in 2027? Because I see in 2028, 2029, 2030 there are 3% increases. And I checked what the official inflation was for 2025 and as I've said up here multiple times, I don't think that the official inflation rate truly
reflects the amount of inflation that exists in the market presently. Um it was 2.7%. So every year that we don't increase the sanitation rate by at least 2.7%. We are in effect lowering our revenue
past what inflation is pushing it up to. So we're losing ground. And I don't I don't particularly find that appealing because we're not we we would like a higher reserve. Uh we can get a higher reserve and I just don't I'd really like
to understand why the 0% proposal. >> Sure. So if you look at it so if you look at the Brian can you bring up the chart again the proforma? Thank you. So you can see here so for 27 they are projecting a 2% growth in in in the the
revenue for the fund for the sanitation fund. Um uh in terms of accounts and things like that uh the base the rate revenue is zero because we're not we're proposing a 0% rate increase. If you look at the estimated fund
balance at the bottom last next to last row you'll see that it's $817,000. We're only projecting to buy one truck in the FY27 budget. The assumptions in the rest of the years are actually two trucks per year. So, um they're more
conservative. Again, council, if if you want to increase the rate, we're that's fine. I mean, I'm not going to sit here and oppose the rate increase. I I agree the rate increase would give us more cushion and it would definitely increase the the
operational ratio at the bottom. To get to 25% though, I believe you'd have to have an 11% rate increase. >> Oh, well, you don't have to get to 25% in one year, >> right? No, I agree. So, that's not that's never been our goal. At least not since I've been here. Um, but if if you feel more comfortable with a a nominal
rate increase, I say nominal, anything up to 5%. That we could definitely run the numbers and we could include that in the budget if that's the will of the council. I I just think once you've done a 0% increase, it sets a precedent to not have further increases, but we're
planning further increases. So, I think for me it makes sense to simply put in a 3% increase, which is what we're going to sustain into the upcoming 3 years anyway. Uh so, personally, I'd like to see a 3% increase just to for consistency sake and also so that we are building up a little bit of a cushion.
Um because inflation could very much increase as well. Um and right now the economic indicators are not especially rosy. Uh and at the same time we do have a situation uh both federally and in
corporate uh circles where there is a large amount of debt being issued and a situation like that can lend itself to uh stagflation where you have inflation but not a lot of economic growth. So I think while we have it right now we should just apply the 3% increase. Just
my personal viewpoint. Um and uh I did have one more question about um the um yeah the um the Stantech opinion here. So there's um just referring to this our rate study consultant Stantech believes that we may
able to access be be able to access some of these funds to mitigate our borrowing needs. So this was a um a movement out of the water trust fund I think into the water operating fund. Is that I believe that was the the the transfer there
that's being referred to by Stantech. >> Jim, you want to take that one? >> 2 mill. I think >> they weren't specific on on how that could be used. >> I I don't think that we would actually
transfer the funds. We would use uh the water improvement fund to fund any piece of it that we could uh could justify using impact fees for
which is supposed to be used for growth capacity. They believe that in this project that we could do that and therefore we could use funds. We wouldn't necessarily have to transfer it into the 410, the water and sewer, the operating fund, but we
could use a portion of the improvement fees to pay for certain pieces of the uh the PAS remediation project. Uh the overall project, >> okay,
>> that still would have to be identified. >> It is a possibility. >> Okay, that's good. So, it's not currently planned to make a transfer out of the trust fund. >> No. No. Not until we have more definition on that. >> I'm really happy to hear that because my next request was going to be for us to
get a legal opinion about whether or not that's permissible. >> Um, and uh, while I have you up there, uh, if I may, um, I think from the previous year budget, there was about $3.6 $6 million of um
unspent money that's being carried forward into uh this year's budget for various projects. And one one of the examples that I' I'd bring up here is the uh the green tractor that I mentioned last time. So that was paid for out of savings from another project
in the previous year's budget, which is why it did not appear in this year's budgets, capital expenses, even though it is a capital expense. So my request is uh whether we could please receive an itemization of all of the different things that are being paid for out of
this 3.6 million because it is a lot of money and I wasn't able to actually find where that is in the budget. Uh and I wouldn't have been able to figure it out if I hadn't asked the question about the green tractor. So I think for the sake of just getting a grasp of where this 3.6 million is going and where it came
from, uh if we could receive some sort of an itemization, that would be welcome. We can certainly do that. In fact, I was I let the directors know yesterday that I would be putting that together within the next couple weeks
>> so that they could have that information so we can certainly provide that. >> I really hate asking for things that I was going to get anyway because it makes me look really stupid. So, >> it's fine. Yeah. >> Um All right. Excellent. Uh All right.
So, that's uh I like the the TIFF thing. That's very good, by the way. And also, um, since the money from the sale of the two properties downtown is going to go into the CRA fund, um, I think it would be interesting to explore whether
Riverside Park is the only project that we could draw funds uh draw that we could draw funds for out of the CRA funds. uh since we are going to have um probably several million dollars of inflow into the CRA um there
might be possibilities there to relieve the general fund. So if you have any thoughts on that I'd welcome them. >> Yep. Sure. Thank you. >> Okay. I yield the floor. Thank you. >> I have a couple questions. >> I don't know if you want to stand up. Um
I know we've had a couple of um FEMA recoveries that have closed out recently because I've gotten the emails. So, do we currently have outstanding FEMA um reimbursement anticipated? And if so, how much is outstanding about
over $4 million? But I don't know, that's not all committed or obligated yet. That's what we expect. Um and >> somewhere in the neighborhood of 4 million at the most. Jamie, do you have uh like the specific
>> cuz they do it in pieces. >> Yeah, I know. >> And it's hard to predict their timing. >> Yeah. Yeah, I understand. I just want us to have some idea of what we So, the about the most is maybe $4 million or thereabouts. >> It's probably over 4 million. Four uh
3.9 I think was just the debris pickup alone. Um which is obviously the biggest piece of it. And that's a separate category that they, you know, would reimburse us for.
>> Okay. So, I think you answered this, Mr. Bea, but just to make sure I heard it correctly. The CRA reserves, those those funds are obviously restricted to be spent within the CRA.
That would make sense. But the unassigned fund balance funds can be spent anywhere in the city if we need them. Right. So if we had something bad happen, we could spend unassigned fund balance anywhere, including the CRA, but not the reverse.
>> That's correct. >> Okay. So there would be really very little risk of taking an additional $500,000 out of the CRA reserves thereby bolstering the unassigned fund balance by the equal amount. There'd be
very little risk in that because the money is still there and it's put in a fund that's more has is less restricted than the CRA reserves. Am I reading that correct? >> That's correct. >> Okay. So there would be no real downside
to taking that additional $500,000 out of the CRA reserves. Now that would reduce the CRA reserves down to 157,000 roughly, but it there's no big risk to that because if something disastrous happened, we'd still have that money on
hand in another we could we could still use it. >> That's correct. >> We're tracking. Okay. All right. Um, okay. The other thing, and this is a a decision for council to make, but just
for my perspective, I would want personally I I think the council would need more information if we were going to contemplate a 3% rate increase for sanitation. I I'm not necessarily opposed to that idea. We've done it before, but that
fund, what we didn't see on that graph was the past three or four years because we did have some serious increases a couple years in a row with the expected outcome of those years to get down to a
smaller or no increase. And so now that we arrived at this point, if we have to tell the public that we're not really going to do what we said we were going to do over the last three or four years and get to this point of having some relief, I want to make sure
that it's necessary. If it is, it is. And I mean, I don't fundamentally I agree with Council Member Kravitz. I don't want to put ourselves in a hole that we have to dig out of. We've done that before and now we got to dig out of a hole with major,
you know, 15% increases instead of 3% incremental. I don't want to do that. But if we are going to do or contemplate an increase even at all, even if it's 3%, I just want to make sure that it's needed,
it's appropriate, it's makes sense, and it's not just because it's consistent. I I I don't want to particularly in a year when we're contemplating what 15% increase in water probably if we I mean or somewhere around there I think that if I remember
right it was a hefty increase in year one for the water. Um, if it's necessary, it's necessary, but I I I would want more personally would want more discussion on that to establish that it's necessary and not just
Well, what we can do is we can run if council would like us to do a 3% scenario, we could run the 3% scenario and uh Okay, thanks. >> and get you that information.
I don't know if you got it right now but >> so but we can certainly for the even though the focus is water and sewer on the 11th we could include incorporate the >> so on the August 11th that workshop we can take the first several minutes and just give you the information we can
give it to you beforehand uh but we can talk about it in the public setting at the at the 11th in the beginning to see if council wants >> there are some differences in that table that you put up in year one it assumes 2% growth whereas the other years assume 1%. So there there's >> Mhm.
>> there's differences on both sides of the equation there. And so anyhow, I I I don't want to go up 3% just because just because um if it's necessary, then so be it. But
and the other thing I I the other point I'd like to make is we don't know and I've said this before. We don't know what's going to happen with ballot three or you know this this property tax initiative and that's a game changer and so it doesn't
immediately affect this budget but it's um it's a real gamecher for FY28. I mean, you can't just cut 21% of your property tax revenue and not have any
impact. And so, all the capital that you've put forth before us is fine. I I think we're on a great track. We've we've been consistent with our multi-year kind of strategic plan where we're trying to get. We've
stuck with that. We've I think you guys have done a terrific job of that. But on some of the capital projects that are going to be forever commitments or multi-year commitments in terms of maintenance or in terms of for instance
the Riverside Park, which I'm a big proponent of I really would like to wait and see what's going to happen on the ballot before we I I we would be building a park at the same
time that we're cutting services and increasing fees for other things. And I just think that's a terrible I mean the public optics of that are oh they screamed that they you know they didn't have any you know they needed all this money they're cutting
services at the library they're cutting services across you know they're cutting positions and they're moving dirt around here building this it's all happening at the same time which I really hope does not happen. Um,
so, um, I would be a little concerned about that, but that's all I have. Council member Kravitz, just wanted to offer a different perspective on the rate increase. Uh, so, um, if we did do the 3% increase,
arguably it's not just because because right now we're not yet at our reserve target. So if we don't do the 3% increase, we move further away from hitting the reserve target than if we did. So that could be a reason if you're looking for one. That's all.
>> Any other questions? Okay. >> What's next? >> So I would just ask for if the council could maybe give me some direction cuz I I heard some folks that were okay.
There's a there's one decision point here. I know you can't take a formal vote, but it'll be a consensual decision. Um, which is on the the tiff piece, the extra 500,000 um to go to a million from reserve. It seemed like there was consensus towards that. I just want to make sure am I
understanding that correctly? That's what you'd like us to do? >> Yes, >> I would be fine with it. Sure. >> Okay. All right. We'll do that. >> Direction might have been even to draw more. At least that's what I heard from >> but you only have $100,000 more. So
>> sorry we were talking about the CRA going to get Yeah. going to the full million versus the 500,000. >> Yeah. >> Yeah. >> Okay. >> Okay. All right. That's what we'll do then. We will program that in. We will bring you the information on the 3% rate increase. Again, we'll have that
information to you and discuss it at at August 11th and then you can uh obviously make the decision you want to make at that point or give us some direction. Um, I believe Jim, is there anything that your you and your team still needs in terms of direction from today?
>> No, I I don't think so. I think that covers it. >> Okay. Then that would be all we have right now for this portion. >> Now, do we need to wait till 11:00 because it's a publicly noticed meeting? >> Correct. >> Okay. So, we adjourn this meeting and
kill an hour and come back at 11. >> Okay. Very good. Okay, then we will stand adjourned and reconvene at 11 o'clock. Hey. Hey. Hey.