Finance Committee - Regular Meeting

At 1033 a.m. on June 3rd, 2026. At this time, I'll do a roll call. Alderman O'Neill?

Present.

Alderman Thorpe? Present. Alderman Huntley is here. Is there a motion for approval of the agenda as written? Second. All those in favor, please say aye. Aye. Beautiful. Approval of the minutes. We have Finance Committee minutes from May 6th and May 11th. It's been a little while. Is there a motion to approve both of those as written? So moved. Second. All those in favor, please say aye. Aye. Excellent. Oh, I see what you're saying about the two different supplemental appropriations. Okay. Department SA-2126, this is our supplemental appropriation to the fire department. This is a grant. Does anybody from the fire department want to speak on it? Looks like it's pretty darn straightforward. It's accepting a grant for defibrillators. Is there anything else we need to know? No, I'm seeing a head shake that that's about all. 2126. I was looking at 21, and I think you have questions about 22, which is more complicated.

That's right.

Just give us one sec. We're going to take a look at it. I think we, in our agenda, the supplemental appropriation 22 has a bunch of details. 21 was almost glossed over. So I want to make sure everybody has the opportunity to review it. I'm good with it, yeah.

You're right, I was talking about the next one.

Yeah, which I missed that one. All right, seeing no objections, is there a motion to approve Supplement Appropriation 2126?

There's a motion to give a favorable recommendation.

To give a favorable recommendation. Yes, thank you, Alderman O'Neill. Is there a second? Second. All those in favor, please say aye. Aye. All right, moving on to essay 2226, which I think it's the one that's a little more complicated. So this is appropriating $683,200 from the Federal Highway Administration and about $160,000 from the City's Capital Reserve Fund to our Safe Streets and Roads Capital Improvement Project. Yeah, I'll definitely be interested to hear about this because, as I understood, we were about tapped out on our capital reserve fund. So, Mr. Leschinsky, are you here to talk about this one? Yeah? You want to just kind of give us an overview or background since this has got a couple different parts to it?

And then am I correct in assuming that you're also here for our piece of legislation? No? No, I'm not. I'm not prepared to talk about the legislation at this time, although our department is producing a staff report right now. I'm just not the one writing it. No worries. Well, we'll stick to the supplemental appropriation. Thank you. Great, thanks for the opportunity. Eric Leschinski, Chief of Comprehensive Planning. So this is a big project that has been in the works for a few years. We received a grant in FY24 from the federal government through the Safe Streets for All program to essentially do a citywide mobility action plan This was one of these programs that came about through the IIJA federal budget to really transform.

IIJA? Yes, IIJA, yes.

This was kind of the Biden era stimulus package to basically fund a lot of new programs across the country. And this is the last year that it's actually in effect. But while the structure investment and jobs infrastructure investment also notice the bipartisan infrastructure law yes thank you um so a lot of transportation grant programs came out of that and this is the safe streets for all program was one of those grant and really was trying to move the needle on how cities and counties across the country uh evolved their mobility networks you know and and um the the Bedrock were getting communities to do these action plans that would really help them identify high priority locations to fix roadways, to make them more walkable, bikeable, transit friendly, essentially complete streets kind of thinking. So the city got one of these grants for a large amount, $683,000. We had a 20% match required. We then took about almost a year to get a grant agreement signed. Very long process.

Yes, tedious process.

That grant agreement was ultimately signed by a number of people at the city, including a former finance director, and take some responsibility here. I had assumed at the time that the grant agreement was signed that the funds were moved into our operating budget. I don't interact with our operating budget in planning and zoning much. It's our director who handles that. flash forward to doing our RFP process to select a consultant team to do this action plan, which is really the bulk of what that grant was supposed to fund. We selected an incredible team based in D.C. that do these type of plans all over the country, have moved into the contracting process, have essentially a contract ready to sign, and then realized that the money had not been fully allocated. And in talking with finance, there was a feeling that this While I had assumed it was maybe more of an operating grant, it actually makes more sense as a capital project because it's essentially planning for future infrastructure improvements. And so the logic is it makes more sense as a capital improvement project And in working with finance, Suzanne in particular, we basically worked out a way of getting this in the budget. So I can't necessarily comment on where the capital reserve, et cetera, but there was some coordination and they just provided all of the information that was needed so they understood what this is all about. While the bulk of the grant is funding this action plan, and this is the first citywide mobility plan that I'm aware of the city's ever taken on. We've done these sector studies, looking at, we have one for Eastport, it was done in 2016. But this is the first city-wide one. This is a pretty big deal. It's going to be an 18-month planning process, involve a wide array of community participation. But there's about $240,000 of the grant budget would go towards these demonstration projects on Forest Drive. So that was the other piece of this. That's our... most troubled corridor in the city and from a safety perspective and the county is already doing a lot but this was aimed at helping them to kind of implement short-term you know quick build type of improvements at certain intersections on forest drive so that's the remainder of the budget but we don't have those locations figured out yet and so the main you know i think we're in a position to kick off this mobility action plan That's the immediate thing that this grant is funding now.

So I'm inclined to hear from Ms. Flaherty first about the funding side of things, and then I imagine we'll have questions for both of you. But I wanted to check with both of you, my committee colleagues, to see if you would prefer to ask Eric questions first before we hear about the financial side of things.

I have a quick question about what you mean by the demonstration part of it.

Yeah, this is a term that the federal, the U.S. Department of Transportation uses to, it's become kind of in vogue to basically do projects that might not be permanent, but can kind of change the way a roadway works in the short term to see if it works. And then if it were, think about like Melvin, okay, you know, it doesn't look, a lot of people don't like the way Melvin Avenue looks and the traffic calming there or Hilltop Lane, but These initially, Hilltop Lane right now, that's a demonstration project. It's not permanent, but yeah. And the idea is that if it works, it becomes permanent. And then it could be designed differently, but...

I like the idea on those of like, if you've got a stretch of parking spots that fits say five and a half cars, you take up half of that half parking spot that nobody's ever really gonna use, stick a big planter in there and you've suddenly created a lot of traffic comment. Okay, let's hear about the sort of, how are we funding this side of things? And in particular, my question is, but I thought we were very low on our capital reserve fund, but if you could just kind of give us a overview of, How did you guys decide to set this up as a capital project? What does it mean for the FY26 budget versus the FY27 budget? And just everything from more of the accounting side. That'd be great. You might want to just tilt it down a little more. Just talk closer to it.

Okay, Suzanne Flaherty, Budget Department. It was actually not determined by me to take it out of capital reserve. That was something that is determined by Vicki. And for the year end 26, we're projected to have approximately $600,000 remaining in that capital reserve account. and so you know because at the beginning of the year a certain amount is set aside for such like last minute projects that need to move forward and so as i said there's always about 600 000 it was determined by vicky that we should this is an instance where we should use this funding to proceed with this project

It looks like this is $159,700 from the capital reserve fund, but then also I see that getting counted twice in the allocation of appropriations. So could you explain to me the difference between this capital reserve fund balance and then transfer from the general fund capital reserves capital projects fund? Why is that on there two times?

Yeah, it's just the way we have to transfer the funding from the... into the capital reserve fund. I honestly don't understand that 100%.

So if. But I think the bottom line is that one of these thing, $159,700 in revenue here is canceled out by the $159,700 in expenditure, right? Like we're sort of taking a two-step process by which this,

Get it there, correct.

Yeah, this $160,000 is getting kept up by the other $160,000. And you said at the end of FY26, we're currently projected to have $600,000 remaining in the capital reserve fund before this essay? Before this, correct. Okay, thank you. All right, any other questions? Who wants to jump in? Yeah, go ahead Alderman Thorpe.

Thank you for helping me. I just have some more questions on how this works. When I do the math, I get that the 802 plus 40 equals 842, 843, 683 plus 160 equals 843. So we're really talking about 843. So my question is how is city overhead determined and where does that money really come out of since we already pay for our overhead. Realizing this is more of a budget kind of movement question, but.

So the overhead is 5% charged on any capital project.

Okay, and so that money actually, when it's expended, it actually goes into the operating account and defrays the cost of salaries and things, which goes to Alderman Huntley's point about decreasing the amount in the salaries in the FY27 budget because these kind of funds continue to flow into that, which creates a significant overage in the amount budgeted. Is that, Sean, does that make sense?

Yeah, I think maybe to put what Alderman Thorpe is asking in a similar way, a question that he and I were talking about this a week or two ago that I'm a little unclear on is, when we put a, this is a perfect example of putting in a new capital project that has $40,000 of city overhead, we have the same staffing level, right? Like we're not hiring a new half of an FTE with this. So is it, does it show up in the operating budget as more revenue? Does it show up as like, we've just, to your point, we now will have to spend less out of the operating budget because we've got, I mean, this is, I almost feel a little silly asking this question. Like I think I should know the answer, but I don't. And so if you guys can help us understand that, that would be really helpful.

I actually would like to follow where the money goes and I think it'd be very helpful. I mean, I'm a straight accountant, so if they actually had the GL accounts here so you could see where the funds are rather than just a description of it. I've noticed that in several other reports, but I would be interested to see if that actually increases the GL amounts for the overhead and how it's allocated because as far as I know, it just goes to the general ledger account. So like where it's actually getting parked.

That's the gist of our question is there's a movement here of this, a paper movement of this money within our own organization. And I think it'd be good for the finance committee to understand that too. So what I would either, if we want to tackle the answer now, or go ahead and vote to approve this if everything else looks good and then at a later finance committee come back and Sean talk about how you're looking to make this more clear and especially I think it'll affect, the city council might have the same question because we just had this debate Monday about how much we budget for salaries and we budget so much overage and I think this would put perspective in that. What would you prefer?

To find out the answer now, we would have to get a subject matter expert, maybe Capri and budgets to tell us exactly how it's allocated. So I think it'd be better to go back and do some research and get back to the audience committee.

I'm fine with that.

I have it on. Actually, I already have this on my list of things to have a hearing about when we have a new finance director in place, because I think to your point, we could get. whether it's Capri, whether it's, I'm sure Burr would be able to answer this question too. Well, I think he would, because he has lots of opinions on how we calculate city overhead. Yeah, I think it would be very helpful to spend 20, 30 minutes making sure that all three of us 100% understand that and dig into questions about if there are benefits, but see the city manager wanted to jump in, yeah.

Thank you, Chair. I think one of the things, we will get the answer for you, but I do want to clarify that typically with grants, federal grants and other grants that come into the city, you are allowed to place overhead into the budget infrastructure it is not necessarily going towards staffing it goes towards things like administrative protocols that need to be in place to actually manage that grant that's not a new person but there there are additional duties that may be associated with it so we will clarify it but i just wanted to mention that not all overhead actually applies to the staffing infrastructure sometimes it's just the administrative administering the money in a way that is is required by the grantor

keeping the lights on too right i mean like that's i know on on federal grants i manage my day job like it goes towards our office rent uh in some cases um yeah you got another question about this so i have a question just to give you the question now so that when we address it later um because we're taking it a step farther because that was that's good information so The question I'm gonna ask when we do this is, so if we get a grant for a million dollars and we get 5% off the top, that's $50,000. If we're allowed to do that, I don't know what right words to say it, but that's budget helpful. I'd like to dive down into that when we do that and get some perspective as to does that overhead actually end up helping our finances or not? Is our finance department going to say, well, it actually takes us roughly 9%, but we get to recoup 5%. So every grant think that we are down 4% right from the beginning or something like that. Okay.

Thank you. I think it's almost a separate question on a relatively speaking small one like this, where we're talking about $40,000 of overhead compared to. when we we have the city doc project in the cip last year and it was five percent overhead on a hundred million dollar project like that's that's a five million dollars that's a gigantic chunk of money that are we using that to hire i mean that could pay our bge bills for the whole city for multiple years so that's uh all i'm saying is it's almost a separate question with forty thousand dollars for with five million dollars Anyway, sorry to get you caught in the crossfire on this one, Mr. Lushinsky. It's something we've been noodling on for a little while. It's all interesting. I hear people say that about accounting all the time. You wouldn't believe it. All right. Questions more directly related to the supplemental appropriation? Anybody got anything else? Just to make sure I'm clear. I'm sorry, do you have another question? Yes, please. I guess my...

What is the output? What does this product look like? In other words, 200 and some thousand's gonna actually sounds like go to projects, trial projects. So that leaves about 460,000, whatever. What, Do, is this a study? Is it a plan? I mean, are they gonna look and say, you know, on the corner of West Street and Chickapin Round Road, we should do this? Or is this gonna say we should have more roundabouts and more stop signs or less stop signs? Not trying to predict the outcome of the study, but this is a lot of money, when you come to us with, hey, the results are, and they have 27 recommendations, we wanna go forward with 17 of them, this is what they are, or is it,

more philosophical. Totally fair question. I'd be happy to share the proposal from the consultant team, which really goes into great depths of what their scope looks like, but I can summarize for you. Essentially, there is a The scope is broken into various pieces that are needed to put together this action plan, which ultimately has actions that range from it'll have physical improvements. They're going to put together, in regard to physical improvements, they're going to put together a map that's called the High Injury Network. This has become a buzzword, a buzz phrase nationally where Not every roadway has the same level of concern, but they're going to find a way to target specific locations that really need more attention. It's going to require quite a bit of analysis to get to that point. They're spending a lot of time on the community outreach and participation elements. Some of the recommendations are going to be program related. Are there things that we can do to get more people involved in solving problems? Should the city be more proactive in promoting certain ways of getting around So those are kind of the tenor of the recommendations. But there's some other scope items I'm really excited about, which are a little bit outside of the final plan. We are having a complete streets manual or guideline that's going to, I believe, influence the city's code. We have... something i noticed i started six years ago our city code in the way it talks about street design in my view is very outdated it's very suburban it's very um for a city that has really no additional space for anything we don't build new streets very often but when we do the guidance in the city code in my view is not very effective for proportioning things for an urban place. And so the complete street guidelines will help us guide how the code language should work in the future. We're updating the bike master plan, the sort of network map. That's another outcome of this. Those are the two kind of tangents to the plan that i think are you know pretty important um but um all this is going to be in print and digital format we'll have some you know map type outcomes that people will be able to access so that essentially so it sounds like this will inform

your future code changes. But in and of itself, we wouldn't vote to approve this thing. This is a tool.

Yeah, sorry to interrupt. I was gonna say the council would probably adopt this plan if it meets your, you know, expectation you know that's that's really the goal of this is and the council will be involved along the way i think there's a number of meetings that are scoped for different committees and boards and commissions and so we want the council involved in this so that by the time it's finished it's something that you see value in and like the comprehensive plan you know we would want you to adopt this and then we can use it as a guiding document. So that's really the goal, but it has to get to that point.

Okay, a question specific to Eastport. We're about to embark on a series of meetings, road by road by road, to determine what we should do at our intersections in Eastport, one way, converting some of the roads to one way, et cetera. and the city staff is gonna be invited to participate in a series of probably about 15 meetings over a couple months. Is this series of meetings something that this vendor who's doing this study should be involved in because We're doing this based on, you mentioned it, the 2016 mobility study, which was never acted on, and it's been so long that we can't just act on it. We need to update it, and our intent is to do a plan that when we come out of that series of meetings, we have a list of actions that work with Alderman Huntley and working with Director Vogel, we've got money in the budget now to support a lot of that. So should we be inviting the vendor to participate in these meetings?

Yeah, I think ideally they would be a great party to be involved. Some of them actually worked on the Eastport Transportation Plan. Hopefully that doesn't discredit them in the eyes of the community, but a lot of those, A lot of those recommendations were really valid. It's just, you know, obviously building consensus is hard around... We're going to get there. We are going to get there. They're going to revisit those. I mean, you know, places changed, communities changed. That is one of those documents that they're going to be starting with just to sort of look at is how much of this is still relevant. Do we need to update our findings on this? So... That's kind of the early stage of their process. So if those meetings are happening starting this summer and they're on board already, I would definitely encourage one of the representatives from that team to participate at least.

Yeah, let's continue to communicate. I know for the first couple, our plan is to personally invite you, and then after two or three or four, ask you to determine are you the right person to continue to participate. So you'll know everything we're doing as we go through this. Okay, I'd like to change course to the, and just take this opportunity to talk about the temporary markings on Hilltop and now I'm involved because of the temporary markings on the corner of 6th Street and Chester. I think we need to communicate better to the city, to the residents that these are temporary and give them a timeline because as the ones went up on the corner of 6th and Chester, they made all the sense in the world to me I was told by the city staff that they're temporary. I gave that answer to the residents because I believe it. And I got thrown in my face, well, yeah, but the ones on Hilltop clearly are permanent because they've been there for so long. And so I don't know how long a test takes. It's clearly more than a month because we're trying to train vehicles, drivers and all that. But if we could, as we do this, and this also might be a Director Vogel issue, but give people a timeline that how much time do you need to either prove the concept or learn that, we'll always make alterations is my presumption, and if it's a year, so be it, let's tell people, because it's economically, what I'm telling people is we have, the other choice is go ahead and put in concrete and plantings and all that, and then a year later, two years later, come back and rip up 30% of them and redo them, which is not good for the tax bill. So I would just ask if we could communicate that, the length of, they're temporary, the length of time is, even if it's a window, that would be really helpful, Eric.

I completely agree with you. Every project's different. In fact, the grant program has very specific, for the projects we're going to do that are funded by this grant, they have very specific guidelines for how we do them. They actually require us to do before and after data counts to understand how this improvement is impacting the situation. There's a minimum amount, I think it's a, 12-month period where it has to be in place. So, yeah, I think that's important. Every project we do that's deemed a demonstration or a temporary has to have a pretty clear timeframe, and I think there has to be clarity on what we're looking to find out. What's the metric exactly?

There's a balance, right? I just think that sometimes the city staff gets criticized because of a lack of information that the resident has as compared to and the staff is doing a great job doing responsible work based on science, data, et cetera, but it looks like we're slacking.

Yeah, I feel, I understand. There are certain projects that are very pedestrian-oriented, like that one you're talking about on Sixth Street, Personally, I feel like it's a good opportunity. You could put up a sign that people are going to see as they walk by that could have a QR code to a website where they could find out more information. I mean, those are harder if the demonstration project is more geared towards cars and not pedestrians. It's not like a very walkable place, but that I think is an opportunity to improve.

Not to take up too much of the committee's time, but I am creating an eastport website that my commitment is to take it down when the city's website is done and fulfills it and the reason is for that very thing to be agile enough to have a qr code on a sign like you're talking because if we did that and uh mr burks lives on that corner would gladly put up a sign for more information about this uh test or this project go here and i would be more than glad on esport website to put information that you wanted up there um i think that would that would be one of the biggest game changers we have for the residents of Eastport is just that flow of information. Thank you, I'm done.

I will also remind you guys that on Monday night, we funded a new software to do almost exactly that. That was something in the Mayor's proposed budget that would not only have landing pages for these kinds of projects but also allow them to directly communicate with the residents in that area by shooting a text to everybody within x number of blocks and i it was something the mayor's office proposed and i was initially pretty skeptical of it and then after seeing a demonstration from the pio i thought it was a really worthwhile investment to be more proactive okay so i'm ready to vote to approve this i'm sorry do you have questions i don't think so uh I'm ready to vote to approve this. I will say two things about it. One is, I think if it didn't have this demonstration part, I would be a little bit more skeptical to say, I don't think I would support spending $160,000 city dollars to get a plan. But if we're spending $160,000 to for free get $80,000 worth of improvements and also for free get a plan, that seems like a good deal to me. The other thing I was going to say is just that I have noticed that sometimes intersections where the safety issues are cars hitting pedestrians are undercounted. Because it's one thing, you know, if somebody goes to the hospital, maybe it gets counted. But often, like St. John Street and College Ave., we had all these issues of pedestrians getting hit there. the pedestrians, particularly because they were college students, were not filing reports in the way that if two cars hit each other, you file a report, go to the insurance, everybody knows about it. So that's just exercising my own prerogative to give my opinion that I think we should make sure we pay attention to those car pedestrian crashes.

I'm gonna take your prerogative for opinions and give you a heads up that I'm not sure I agree that the City Council should approve this plan. And when it comes forward, one of the problems I have with several plans that have been reviewed in the past, some of which are hundreds of pages, is people saying, well, on page 72 of the plan that was approved four years ago, it says we will do this, so we're done. Not so much. Different city council, different staff, four years later. So as we look at this, I think we need to, if we're going to pass, approve a 200-page report, it should be a work session where everybody understands it so that city council members should be able to say, We do not, we amend page, delete page 72 because we don't think we should paint all stop signs green for better visibility, I made that up. But, so I would encourage us to use this as a guide so that when we create changes to legislation, you can say on page 72, this is what we got from this, it makes sense to us, we wanna make this change.

Point noted. I completely understand. Ultimately, the plan has to be something that you all feel could be your legacy. You know, candidly, I think if it's a great plan and you want to see it actually implemented, you know, I think that's one way is to adopt it. But if you have any concerns, then, yeah, it's not going to it's going to fall short. So. Yeah.

I'm excited about this. And thank you so much for taking so much time with us today to explain it all. Listen to us, have opinions.

I will make a favorable recommendation that we... Second.

Thank you. All those in favor of a favorable recommendation for essay 2226, please say aye. Aye. Oh, sorry, we're not adjourning. But the motion does carry.

Thank you. Very much appreciated.

All right, R1726, I hope this is relatively straightforward in that I think we could have all sorts of opinions about the underlying legislation, but the point of this resolution is just, are the fees going to cover the staff impact? And so I'm hoping somebody from the finance department can speak to that.

Yes, Mr. Chair. Sean Doyle. I'm filling in for Joel today, but I wrote the fiscal impact note, so I should be able to answer any questions.

My only question is, do you think these fees will cover the cost of the staff time to operate this underlying legislation, to put this underlying legislation into practice?

Speaking with planning and zoning, I don't think it'll fully offset all the additional inspections, zoning review, licensing, compliance, because it's only $125, which is the same as the standard rental operating license. But they only anticipated five rooming houses the first year, so the overall impact would be minimal.

Got it, so you're saying, If it were to cost hypothetically $200 for each one and we're only charging $125, we're not fully offsetting it, but because we might only get 10 of these, the city's not really going to lose that much money either. Is that a fair way to put it? Okay. Thank you. That seems reasonable to me. All right. I'm satisfied with this. Does anybody else have any questions? All right. I'll go to Alderman O'Neill first.

Thank you. just we are only expecting 625 a new annual license for the revenue on this so that's four that's five rooming houses that was the estimate from planning and zoning just talking to them but obviously

We have no real way of knowing.

Okay, thank you. I just wanted that clarification.

I have a question for the committee. So I kind of changed the format of the fiscal impact note, made it rather wordy, maybe a little redundant with the actual other reports. Do you like this format? Would you like it more just to the point?

I appreciated the additional details because it allowed us to be able to compare and contrast against other type of licensing fees in the housing.

Yeah, I find it helpful for this kind. I think there are other pieces of legislation that have relatively little fiscal impact note, relatively little fiscal impact, for which it makes sense for the note to be pretty pro forma. But since this really does, I mean, we're talking about a fee. It's got a very direct fiscal impact. I find this helpful.

Okay.

Thank you.

I'll continue to include details when it's necessary. I like the format a lot. Um,

I think we need this detail. I think the key to these reports is vigor and honesty and boldness. Sometimes the council needs to hear what we don't like to hear. I am concerned about words of the following effect in this report. While the new license fee is not expected to fully offset the increased costs associated, remains minimal. Our job with fees is to pay for the program. I would much rather hear from this report an honest assessment that says this fee does not pay for the program and therefore there will be operating expenses needed to you know however you know that there will be staff work that is not comp that is not uh so i mean we've got to be bold to be honest and i mr chairman i'm going to recommend an amendment to this because it should fully offset if we think it's 130 or 150 it should be 100 and and i would granted it's minimal but it's kind of like we talked at the meeting on monday one-tenth of a person without any additional people 10 times is an additional person. So I think if the finance department's best estimate that it should be 140, that's what I'd like to see in the staff report is it would take $140 fee we think would be offset you're never going to be perfect it could be five we could get two we could get ten and nobody's gonna punish the city or you or the finance department the city manager but we need we need vigor in these that say it should caught by finance committee rules it should be 140. we may decide we're going to keep it at 125 for whatever reason does that make sense

It will be difficult to come up with an exact estimate. It'll be a talk with planning and zoning, how many hours, what's their average salary. I could get closer to the actual number, but at the end of the day, it would still be an estimate.

I'm not looking for exact. There's a balance between, especially when we're expecting five as compared to 500, but when you write it's not expected to fully offset, the honest and vigor I'm looking for, I expect it's going to be 135. We're not going to ask you to give us a spreadsheet. If we do, we're going to give you days time to get it to us. But I think if we're saying it's not going to offset it, and I'm fine with, I think it's about 135. It's so small. City Council, we didn't do a super research. But ballpark, we think 135 is more fair.

Are you suggesting I redo this with an estimate?

I'm suggesting if you can, if you give us a number. If you give us a number, I will recommend an amendment that we go forward with a favorable recommendation, but we make it 1XX as compared to 125 because the finance department thinks that that would, is expected that would cover the expense of the program.

So I think there's a philosophical argument to be had about what kinds of things should be fully covered by fees and what shouldn't. And I won't get into that today. But I do want to make a technical point that as I read this, there's a line, it's not the line you quoted. There's a line talking about, essentially what it's saying is, The cost for this are both the administrative setup and then the annual compliance. And so as I think about it, there is both a, if we think of this as a little enterprise, a little business, there is both a fixed cost and a variable cost. And what I'm reading in here is the revenue, the variable revenue is not sufficient to cover the fixed and the variable cost. But it might make perfect sense for us to attach the, to set the revenue, the license fee, to be equal to just the variable cost, right? If they say setting this program up costs $1,000, that's only gonna happen once. And so we could try to bump up the fee by an amount that would then cover that $1,000, or we could say, no, we're going to sink the $1,000 of general fund revenue into it, and then, or maybe I should better say tax revenue into it, but then we're gonna set it so that this covers every one of those inspections going forward. Because otherwise we end up in a situation where it's like, Okay, we're gonna set the fee at $150 this year so that we cover those startup costs, and then three years from now, we're gonna bump it back down to 125 so that it's only covering the variable cost. So I just think that's an important distinction to make. Are we really trying to cover every single cost, or are we trying to cover just the variable cost? And I think the answer is we should try to cover the variable cost, assuming the fix is not gigantic.

Yeah, you want to respond? I think we're looking to cover the cost talking about in that paragraph. I think your point is well taken, and I would count on the judgment of the Director of Finance. In this one, it's minimal, so do we want him to, to your point, six hours to set the program up? He could or couldn't. I don't necessarily want to go that far, but he literally says additional inspections, zoning review, license administration, and ongoing compliance monitored by the plan of zoning. So that, to me, is the cost of the program. And I think it's, we're talking pennies, I get it, right? 10 times five, 50 bucks or whatever. But you asked a question about an example. I was already gonna ask the question, but I use it for two reasons. One, I'd like these reports to be more distinct that you think it should cost 100 and whatever the number is. Having said that, I would ask that number now so that I could make a recommendation that we pass this with a number that finance committee, and let's get the city council used to you doing that because we're looking, these reports, clearly you put a lot of work into this, but if every time you do one, we lose 10%, it adds up, right?

Yeah, I would think just based on the conversation that I would calculate the variable cost, but I could still mention that there will be fixed costs associated with it.

Yeah, the line that I was looking for before is. Spanning the bottom of page 1 top of page 2 says. expected to partially offset but not fully cover the administrative costs associated with establishing the new license type, developing inspection standards, and conducting initial and annual compliance. So that's sort of both the fixed and the variable, whereas the one you were citing is talking just about variable.

Yeah. Either way, I'm looking for the cost of the program because the reality is we're not going to revisit this next year. Even when we do the fee schedule, we're not going to go. Did the 125 become 129 or whatever? We're not going to touch this again for years. So let's come up with the right number that ballpark.

then we have to revisit the other fees that are pretty closely related the standard rental operating license say this comes out to be 600 then that might be another whole discussion

I think that's a great point that, yeah, even there's somebody said for let's get this one that's in front of us right. But if the other ones are all wrong, then we're creating wrong incentives for people.

Mr. Chairman, we've already, the other day, we changed the short-term rental license fee from 400 to 650 for owner-occupied, 750 for non-owner-occupied. Yep. So, and you wouldn't have known that. I mean, you wrote this.

It's written on May 19th.

Right, right. You wouldn't have known that when we passed this. Okay. But to the very point of this discussion, we oughta look at what the, because the question at hand is the rooms. And again, I'm not looking to delay this to another meeting. It sounds like you did the work, and so I'd be real comfortable with a number that you came up with right now, unless you weren't comfortable.

didn't come up with a specific number it was a discussion with planning and zoning basically that there's no way this is going to cost 125 now whether that means 250 500 i did not get to that level of specificity chairman i can't support going forward if we don't have that kind of number okay well i uh

Yeah, I mean, I think it's worthwhile to understand an upper bound. Are we talking about 500 or are we talking about 250? Are we talking about 1,000? But I think at the same time, we do have an upper bound. I think it would be fair to say this is not going to cost more than the number we just set for our short-term rental license. If we just did all the math on that, and we know that they have the exact same cost plus a bunch of additional ones, we can be quite sure that the absolute upper bound is $700. So we do have a range, and the question is whether that range is precise enough for you to be comfortable.

I think, I don't remember if this is on Monday night's city council, but if we're really truly agile, it's not?

It hasn't gone through committee yet. I'm sorry? If it passes right now.

Okay, so.

Doesn't it go to the rules committee?

Well, the underlying legislation certainly has to go to another committee. I'm not sure whether the fees do or not. I can look right now. They do, Kaylin? Okay.

Thank you. If we're truly agile, I would be game to pass to recommend as forward with a number that the finance department provides us before Monday and then the finance committee recommend when we go to city council to change 125, explain what just happened and go from 125 to the number they recommend

So it's an amendment.

It's an amendment for the city council.

Yeah, I'm not necessarily supportive of bumping up this fee for our most affordable housing options, right? Like, I think it's one thing to say we want to absolutely capture every single possible cost for people coming and vacationing here. I'm not sure it's beneficial to say we're going to get every single penny out of what is quite literally the cheapest possible housing option in the entire city because all of those costs get passed on to our most vulnerable residents. So I'm not sure that it is worthwhile to say I would not necessarily be supportive without knowing the number of saying, boy, we want to capture every single penny here. But I see Ms. Reuter raised her hand. You don't have to press anything. Just talk into it. Not lighting up, you might need to pull it. So maybe like point it directly at your mouth. There you go, closer to you. Or they didn't give you a battery. You want to just go up to the podium real quick? Sorry.

Hi, Cynthia Reuter, legislative analyst. for the Office of Law. Just want to give you an update on the legislation and the progress of it. The bill itself is in Planning Commission right now. And then it goes to two different committees, Economic Matters and Rules. So you have time. Yeah, exactly.

That would be my suggestion.

I would agree. I mean, I feel comfortable saying that we know a range of the cost for this. We know how it compares to the other fees that we charge. To me, that is enough information to say this is a reasonable fee to set. And it's the fee that is recommended by the Director of Planning and Zoning. And I'm inclined to defer to him about what he thinks is reasonable. So I would not be interested in delaying this. I would vote against that motion. So if, I'm sorry, Ms. Lewis, did you want to say something?

Thank you, Chair Ferguson. I just wanted to also mention that this, if we are clear, based on Sean's feedback, this is a pilot project, and so it is not a long-term project, and I'm assuming that pilots can be reevaluated for amendments. I just wanted to remind you it's a pilot.

Sure, yeah, I mean, I think, Bottom line is we can say how many we expect there to be. We can say what the absolute maximum cost to the city would be. We can say how much we are bringing in from this. We can understand with all of these assumptions what the potential maximum cost to the city is from this, and it's pennies. And so I would rather move forward with it get this into law, see what the actual effects are. And just as we've done with many of these other license types, come back in a year and say, oh boy, it turns out it's actually way cheaper or it's actually way more expensive and adjust it. I think we're not going to get good data on this until we actually have it operating. We could delay another two weeks and have maybe slightly better data. We can narrow the range from 125 to 700 to, I don't know, 175 to 650, but we're not really gonna get good data on this until we actually put it into law. Did you wanna say something, Mr. Doyle?

Now I think it'd be better to find out what the actual costs are a year from now and we'd have a much better understanding. Right.

And we're actually not delaying anything because we're gonna have another meeting before this goes to the city council.

So would you like me to still try to come up with an answer?

Yes please.

Furthermore, we don't know what the base legislation is going to do. We don't know what the baseless legislation is going to do and how that's going to play out. So I would be more apt to delay making a decision on this so that the council is not voting on Monday on fees for this when the actual legislation could look very different from the initial.

Potentially, but I think it's also worth considering that the legislation was introduced by the chair of the committee that it's the main committee that's reviewing it and that it was introduced with five people supporting it. I don't think you're going to see this look dramatically different.

You know, I don't, but I mean, but I mean, the point being. I mean, granted, this would be ready to go to the city council on Monday if we signed off for 125, but we still wouldn't want it to go. The order would be wrong for the city council to vote on something, the cost of a program that they have not yet voted or discussed the program yet. So even though it's ready from a city clerk perspective, it still wouldn't go. So we're not, right?

So even if we make a favorable recommendation today, it won't be voted on until we are voting on the final legislation. So we can make the favorable recommendation today and not have to worry about, oh my God, we're going to pass this without knowing what the actual program is, right? No, quite the opposite.

No, we just heard we took. We shouldn't approve it today, because we don't need to, and Mr. Doyle should come back at the next Finance Committee meeting with a cost after having heard that we actually are focused on their staff report, and we will believe, we will take their staff report number that doesn't start with a phrase that says we don't think this is the right number, is not expected to fully offset.

That's very different than we don't think this is the right number. They do think it's the right number. That's why they recommended it. Semantics, I would fundamentally disagree. One's a value judgment and one is a factual statement. It is the right number according to their recommendation, which is why they recommended it.

I don't think it says that, but I mean, it doesn't matter. My point is we have time to make the recommendation based on a better evaluated number, which is also sending a very clear message to the finance department and the city manager that we care what their recommendations are. Now, once that number comes, if it is $650 or $800, we can have the conversation. But it's not going to be $800. We already heard that answer.

Can I finish, Mr. Chairman?

If it's $800, we can have the conversation that you would like to have about, is that right? But we need the number first, whatever it is. I agree with you, it's not gonna be 800.

But my point being, we should have a real conversation. We just heard from the city manager that there is already a range that we know, and that we're not really going to be able to narrow down that range until we actually get the program going. So I just don't see any point to saying, hey, boy, please increase the precision by, a smidge when we know it's not really going to be anything meaningful so like we just heard that we're not really going to be able to get a better estimate than the pretty good estimate we already have until the program's in law so i don't see a point in delaying to get an estimate that's not really any better ready to vote Anything else? No? All right. Is there a motion for a favorable recommendation on R1726?

No, I move we delay the decision until the next meeting.

All right, the motion on the floor is to postpone action on R1726 until the next meeting of the Finance Committee, which I believe is June 17th. Is that right, Ms. Jackson? June 17th. All those in favor, please say aye. Aye. All those opposed, say no. No. Motion carries and R1726 will be considered at the June 17th meeting of the Finance Committee and let the record reflect that Alderman Thorpe is requesting a more precise estimate from the Finance Department. uh all right with that i think we're just on to the finance department update i know we were initially anticipating that uh acting finance director pallet call would be the one providing that but i know he's not here do you want to give us a little bit of an update or do we want to just skip over this today i can give an update sure if that's all right sean doyle

I'm assisting Joel as acting budget director. So there was the budget working sessions on Monday, and it was a 14-hour meeting. I did not attend that, but— Lucky you.

Yeah.

It sounds like the budget's almost passed. I guess June 8th is the final step in the 2027 budget. We hired an office manager in the finance department, Inez Capone. She comes from PG County. She's already hit the ground running. She's been there about two weeks now. So we're pretty excited about that. And we continue to clean up processes as we prepare for close. It's less than a month away, and then it'll be audit season before we know it.

I hear that's starting even earlier this year. We're moving to get that done by December 31st. Ms. Lewis, was there anything you wanted to add?

Thank you, Chair. We also met with Joel on yesterday and the deputy city manager and part of what we would like to do after June 8th is have a budget debriefing to really kind of articulate where things worked really, really well and where we can shore up some actions. Our actual finance committee will finance department will be doing an after action report to kind of think about the internal workings. And I would like to ask if you would poll your colleagues to determine if there are recommendations or observations that we should consider in part of that report.

Absolutely, yeah. So we should maybe talk a little bit more about this because I had basically the exact same conversation you just relayed with the finance director, I had with the mayor. So it sounds like we're working on two parallel tracks and we should combine those. But yes, I am already planning to pull, I mean, i say poll not in the sense of i'm going to send out a poll but in the sense of i'm having conversations to understand what folks think worked well what they didn't i think i talked with both of you about that on monday night around 11 30 we might do it again in the daylight but yes at the end of the day i think what i'm hearing from you is get a sense from the council members what worked well what didn't and then let's get a written document for how we do that even better and the other thing the mayor suggested to me is specifically write down the timeline for next year, because I think certainly this year, and it's also true that it's happened in previous years, it always feels like we come down to a crunch time. So making sure that as Alderman Thorpe has done with the audit committee for the audit, we have a very clear timeline of when things are going to happen to make sure we have enough space in each one of those, because there were parts that I felt like this year we didn't feel as rushed in as in previous years. And then there were parts where we definitely were rushed. And so maybe we just need to reallocate some of those timelines. Or maybe we can't, maybe there are reasons we can't. Anything else for updates from the finance department? I'm seeing none. Any questions from either of my colleagues to the finance board? I'll go with Alderman Thorpe first.

So more of a statement and a request for the future than a question for today. So we're in the first week of June. We arguably don't know how we're doing financially in May, but actually let me first applaud everybody from the finance department for all of the work you did on the budget. As we do an after action, I applaud that initiative. but I think we all witnessed tremendous amount of work that went into it and it was effective work and we can always build and improve on our processes. So I want to applaud the two of you from finance who are sitting there and all the tremendous work. My point being, for the first week of June, there's no way we have the books closed for May, but in the future, a meeting in June, I would like to see, as we get the new finance director on board and the finance team being as good as we are, as you are, that we get a substantive financial report arguably how we're doing as of the end of April for this meeting. And what do I mean by that? We have three big problem areas. We have three areas where we've saved significant amount of money. We have a million dollars now. We thought the city doc, a good example, the city doc is tracking on budget. I mean, it's just a simple phrase like that for some of the bigger projects. I would really like to see us move in that direction. And then quarterly, we get a more substantive quarterly report, I get that, but we should get on a monthly report the highs and the lows. Thank you.

Yeah, I think we've had this discussion before, and I've been of the opinion that quarterly is the appropriate timeframe for us to hear those things, barring anything that is truly urgent. I mean, I expect that to be brought up in the update, but I'm of the opinion that quarterly is the right timeframe for us to check in on these. And that's why we have the quarterly budget actuals that we get, and we have the Director of Public Works come quarterly to talk about the CIP. So that's my opinion.

Mr. Chairman, since you've opted to disagree with me, I wanna speak up. There is not a legitimate responsible business in the United States of America that does not do a monthly close. And there's already a discussion to move to a monthly close. So the idea that we wouldn't get a update on a monthly basis, granted, we wouldn't get it on the third for the previous month, but we could end up Without that, well, I mean, bottom line is if we do a monthly close, we should, even if we did a soft close rather than a hard close, businesses do monthly closes. And all the staff members I've talked to, the directors have said, I would benefit by a monthly close. I'm guessing right now based on my data, several of them said, I've been shocked that we don't. So we're moving in that direction already. so i don't know why we wouldn't get a highs and lows on a monthly basis but i'll i've spoken my piece um from here i think it becomes a mayor city council city manager decision oh i'm sorry ms flaherty you want to respond

This is not really in reference to the monthly versus quarterly, although it would be a lot of work to do that monthly, but I understand I've worked for a lot of companies that we do provide monthly reports. However, I would like you guys to consider the reports that we do provide quarterly because it is a budget versus actual, and I really feel like you guys should be, what we should be providing, what you should be looking at is a projection quarterly. Where are you going to end up at the end of the year as opposed to what you budgeted?

I could not agree more yeah I also agree with that that's a really good distinction it's something that I've noticed in looking at those we'll see this there will be it's way off from what we budgeted and then there will be a note of well here's why but that that should just be reflected in the numbers would be my preference yeah excellent point it should be more of a projection versus a

snapshot in time.

Well, you already do the actuals. So, I mean, the actuals are part of your quarterly close. So I wouldn't say don't do actuals because the actual is the basis for your brief, right? So we're $200,000 ahead of budget on this, but we project to be $300,000 behind because. And in some cases, projections are, in my experience, a lot, more fluid than actuals. And projections actually clarify actuals, right? So I don't know that we need a projection on every area. If there's something that's budgeted for $32,000 for the whole year and it's projected to be 34,000, I'm less concerned than a million dollars that's projected to be 1.8, but so.

Do you have questions for the finance department?

I have two things. One, it was amazing this year. Thank you for changing the process to have that budget amendment document live and seeing the live changes. I thought that was great. I know that in past years, especially the last two, the finance department was doing that live, but for us to be able to see it live was great. So thank you for moving in that direction. the other thing it's not for the finance department um but june 17th at least two of us i believe will be at mml so i'm asking that we either alter that date or yeah thank you for flagging that for me i i am not going this year and so i had forgotten about it um would you like to just bump it to the following wednesday june 24th would you like to bump it up a week

I don't think that makes sense necessarily.

I'm not sure of your plans, but I've been told that I should plan on coming back Tuesday, that Wednesday is MML committee meeting. But I don't know. I've never been. You've been. You two have been. So if there's things that we're planning to do with MML or we don't know that we're not going to be doing it, we should move it.

We are currently slated to for... hotel rooms through Tuesday night into Wednesday. My plan was leaving Wednesday because there are a lot of things that happen Tuesday night, but that would just mean that I would have to be leaving.

At O Dark 30. At O Dark 30 versus. That makes sense to move it, yep.

So.

I'd also be fine with moving it to later in the day on the 17th if you guys are both available then. Okay, well you're not doing that because there's a public safety meeting. I think the downside of moving it to the 24th is just if we have legislation that's ready. Ms. Rota, you wouldn't think that the conference.

The conference ends at 11, so I don't wanna jam us, but the public safety meeting is at four, so.

Sure, I take your point. I think also Yeah.

If I want back-to-back meetings.

What I was going to ask Ms. Reuter is, in thinking about the timing of the Planning Commission, the rules in government, the Economic Matters Committee, if Is there a possibility that the rooming house legislation we're talking about makes it onto the agenda for the 22nd city council meeting? No, there's not a possibility of that. Okay, so then if we have our meeting on the 17th, then we approve or make a favorable recommendation on those fees on the 24th, we're not going to be holding that up. Okay, so with that said, how would you all just feel about bumping it back a week to the 24th? Okay, that's important. Yeah, that's actually, I get what you're saying. I think I know what you mean, but would you explain it for everybody?

So basically where there's a lack of funding and we need to put together that fourth quarter report to identify those areas and that funding needs to be addressed and voted on by both the Finance Committee and the City Council. So we have to have the Finance Committee prior to, yeah.

Right, okay. Will you all have it ready by the 10th? If we were to have a meeting then, would it be possible for you to introduce it then? The 18th?

I have to check, but I would hope so.

I have no problem with going to the 18th, that could work.

We have a regular city council work session at five o'clock that day.

I would think 10.30, but I'm flexible. I don't know we necessarily need to do this while everybody's videoing us.

Could we on the 18th? move it to the afternoon so that we're not coming here and then leaving and coming back again?

Sure, that would totally be my preference.

Could we do it at 2.30, 3 p.m.?

I think the TV studio normally needs some time to reset between meetings, so 2.30 might be better than 3 in case we do take a full two hours.

We did 2.30 to 4.30 on the 18th.

So let's say tentatively 2.30 on Thursday the 18th with awaiting confirmation from the TV studio. Yep, thank you for pointing that out. I was not paying attention to it. All right, with that.

So we're gonna cancel the 17th.

Right, and move to the 18th at 2.30 tentatively.

Oh, wait. Oh, yeah, yeah, yeah, okay, yep, yep, yep.

All right, is there anything else for the good of the order? No, seeing none, I will entertain a motion to adjourn the Finance Committee meeting.

So moved.

Second. All those in favor, please say aye. Aye. Motion carries, meeting adjourned.